Exhibit 10.1
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND
TO SECURITY AGREEMENT
SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND TO SECURITY
AGREEMENT(this "Second Amendment") dated as of July 15, 2005 among
CIRCUIT CITY STORES, INC., a corporation organized under the laws of the
Commonwealth of Virginia having a place of business at 0000 Xxxxxxx Xxxxx,
Xxxxxxxx, Xxxxxxxx, as Lead Borrower for the Borrowers, being
said CIRCUIT CITY STORES, INC.,
CIRCUIT CITY STORES WEST COAST, INC., a corporation organized
under the laws of the State of California having a place of business
at 000 X. Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000;
ORBYX ELECTRONICS, LLC, a limited liability company organized
under the laws of the State of Delaware, having a place of business
at 000 Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxx 00000; and
INTERTAN CANADA LTD., a corporation organized under the laws
of the Province of Ontario, Canada having its head office at 000
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxxx, Xxxxxx X0X 0X0; and
the LENDERS party hereto; and
FLEET RETAIL GROUP, LLC (f/k/a Fleet Retail Group, Inc.), as Administrative
Agent and Collateral Agent for the Lenders (the "Agent"), a Delaware
limited liability company, having its principal place of business at 00
Xxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000; and
in consideration of the mutual covenants herein contained and benefits to
be derived herefrom.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrowers, Lenders and the Agent, among others, have entered
into a certain Amended and Restated Credit Agreement dated as of July 8, 2004
(as amended and in effect, the "Credit Agreement"); and
WHEREAS, the Borrowers and the Agent, among others, have entered into a
certain Security Agreement dated as of June 27, 2003 (as amended and in effect,
the "Security Agreement")
WHEREAS, the Borrowers and the Lenders desire to amend and modify certain
terms and provisions of the Credit Agreement and the Security Agreement as
provided herein;
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NOW THEREFORE, in consideration of the mutual promises and agreements
herein contained, the parties hereto hereby agree that the Credit Agreement and
the Security Agreement are hereby amended as follows:
1. Incorporation of Terms and Conditions of Credit Agreement and Security
Agreement. All of the terms and conditions of the Credit Agreement and the
Security Agreement (including, without limitation, all definitions set
forth therein) are specifically incorporated herein by reference. All
capitalized terms not otherwise defined herein shall have the same meaning
as in the Credit Agreement or in the Security Agreement, as applicable.
2. Representations and Warranties. Each Borrower hereby represents and
warrants that (i) no Default by any Borrower exists under the Credit
Agreement or under any other Loan Document, and (ii) all representations
and warranties contained in the Credit Agreement and the other Loan
Documents are true and correct as of the date hereof.
3. Amendments to Credit Agreement.
a. All references to the "Documentation Agent" in the Credit Agreement
shall mean General Electric Capital Corporation and JPMorgan Chase,
Bank, N.A., as successor in interest to Bank One, NA.
b. Amendments to Article I of the Credit Agreement. Section 1.01 of the
Credit Agreement is hereby amended as follows:
i. The definition of "Applicable Margin" is hereby deleted in its
entirety and the following substituted in its stead:
"Applicable Margin" means the rates for Prime Rate Loans, LIBO Loans
and BA Equivalent Loans as set forth below:
------------ ------------------------- ------------- --------------------------- --------------- ---------------------------
Level Consolidated EBITDA Domestic LIBO Loans Canadian BA Equivalent Loans
Borrowers Borrower
Prime Rate Prime Rate
Loans Loans
------------ ------------------------- ------------- --------------------------- --------------- ---------------------------
------------ ------------------------- ------------- --------------------------- --------------- ---------------------------
I Consolidated EBITDA 0% [CONFIDENTIAL]*% 0% [CONFIDENTIAL]*%
greater than or equal
to $375,000,000
------------ ------------------------- ------------- --------------------------- --------------- ---------------------------
*Confidential treatment has been requested for the redacted portions of this
agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended. The condfidential, redacted portions have been filed separately with
the United States Securites and Exchange Commission.
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------------ ------------------------- ------------- --------------------------- --------------- ---------------------------
II Consolidated EBITDA 0% [CONFIDENTIAL]*% 0% [CONFIDENTIAL]*%
less than $375,000,000
but greater than or
equal to $200,000,000
------------ ------------------------- ------------- --------------------------- --------------- ---------------------------
------------ ------------------------- ------------- --------------------------- --------------- ---------------------------
III Consolidated EBITDA 0% [CONFIDENTIAL]*% 0% [CONFIDENTIAL]*%
less than $200,000,000
------------ ------------------------- ------------- --------------------------- --------------- ---------------------------
The Applicable Margin shall be adjusted quarterly based upon the
Borrowers' Consolidated EBITDA for the period ending on the last day of
the most recent fiscal quarter. Any adjustments to the Applicable
Margin shall be implemented prospectively on the fifth Business Day
after delivery of the financial statements required by Sections 5.01
(a)(i) or (ii) hereof and the compliance certificate required by
Section 5.01(a)(iii) hereof. Upon the failure of the Borrowers to
timely deliver the financial statements required by Sections 5.01(a)(i)
or (ii) hereof or the compliance certificate required pursuant to
Section 5.01(a)(iii), and until such financial statements and
compliance certificate is so delivered, the Applicable Margin shall be
established at Level III. Upon the occurrence of an Event of Default,
interest shall be determined in the manner set forth in Section 2.12.
ii. The definition of "Canadian Availability" is hereby amended by
deleting the number "$100,000,000" and substituting the number
"$50,000,000" in its stead.
iii. The definition of "Eligible Inventory" is hereby amended by
deleting clause (b) describing Inventory not constituting
Eligible Inventory and substituting the following in its stead:
(b) Inventory (including any portion thereof in transit from
vendors, other than Eligible L/C Inventory) that is not located
at a warehouse facility or store that is owned or leased by a
Borrower or that is located with any third party or bailee
described in Section 3.05 of the Security Agreement, unless an
intercreditor agreement reasonably acceptable to the Agent is
executed and delivered by the owner of such location;
iv. The definitions of "Extended Maturity Date", "Extension
Request" and Extension Request Response" are each hereby
deleted in their entirety.
v. The definition of "Initial Maturity Date" is hereby deleted in
its entirety.
*Confidential treatment has been requested for the redacted portions of this
agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended. The condfidential, redacted portions have been filed separately with
the United States Securites and Exchange Commission.
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vi. The definition of "Maturity Date" is hereby deleted in its
entirety and the following substituted in its stead:
"Maturity Date" means June 27, 2009.
vii. The definition of "Permitted Investments" is hereby deleted in
its entirety and the following substituted in its stead:
"Permitted Investments" means each of the following:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by Canada or the
United States of America (or by any agency thereof to the extent such
obligations are backed by the full faith and credit of Canada or the
United States of America, as the case may be), in each case maturing
within one year from the date of acquisition thereof;
(b) any obligation issued, sponsored or backed by the
government of Canada or the United States of America, including Federal
Agency Securities, with a maturity of 365 days or less with a credit
rating of at least "AAA" as used by S&P or "Aaa" as used by Xxxxx'x or
the equivalent rating by an established national credit rating agency
in Canada;
(c) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above
(without regard to the limitation on maturity contained in such clause)
and entered into with a financial institution satisfying the criteria
described in clause (e) below or with one of the primary dealers
regulated by the Federal Reserve that is at least 102% collateralized
by U.S. government obligations;
(d) Investments in commercial paper issued by a corporation
organized under the federal laws of Canada or the laws of any province
within Canada or the laws of any state of the United States of America
maturing within 270 days from the date of purchase and having, at such
date of purchase, a credit rating of at least "A-2" or "P-2" from S&P
or from Xxxxx'x or the equivalent rating by an established national
credit rating agency in Canada;
(e) Investments in certificates of deposit, banker's
acceptances and time deposits maturing within 365 days from the date of
acquisition thereof issued or guaranteed by or placed with, and demand
deposit and money market deposit accounts, and master notes issued or
offered by, any bank to which the Bank Act (Canada) applies or by any
company licensed to carry on the business of a trust company in one or
more provinces of Canada or any domestic office of any commercial bank
or financial institution organized under the laws of the United States
of America or any State thereof that has a combined capital and surplus
and
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undivided profits of not less than $500,000,000 (or the equivalent
amount in another currency);
(f) variable rate demand obligations or Notes which have a
rating of at xxxxx "X0" by S&P or "P1" by Xxxxx'x or the equivalent
rating by an established national credit rating agency in Canada or
which are backed by letters of credit, liquidity facilities or special
purchaser's agreement with a financial institution satisfying the
criteria described in clause (e) above and maturing not later than 365
days after purchase;
(g) money market funds which comply with the provisions of Rule
2a-7 of the Securities and Exchange Commission or any investment fund
regulated and advised by a registered investment advisor under Rule
3c-7 or money market funds which comply with the provisions of Rule
3c-7 of the Securities and Exchange Commission;
(h) Shares of mutual funds which have a rating of at least "AA"
as used by S&P or "Aa" as used by Xxxxx'x or the equivalent rating by
an established national credit rating agency in Canada and have a
weighted average maturity of 365 days or less when purchased;
(i) auction rate securities or auction preferred stock-ARS,
SAVRS, having a rating of single A or better by one of the national
credit rating agencies in Canada or the United States of America and
with an auction period of no longer than 90 days;
(j) Asset-backed commercial paper which matures not later than
270 days following the date of purchase and which certificates are
rated at least "A-2" from S&P or "P-2" from Xxxxx'x or the equivalent
rating by an established national credit rating agency in Canada;
(k) Obligations of any corporation organized under the federal
laws of Canada or the laws of any province within Canada or the laws of
any state of the United States of America or under the laws of any
other nation, payable in Canada or the United States of America, as the
case may be, maturing within 365 days from the date of purchase and
having a rating of at least "A" by S&P or Xxxxx'x or the equivalent
rating by an established national credit rating agency in Canada at the
time of purchase;
provided that, notwithstanding the foregoing, after the occurrence and
during the continuance of a Cash Dominion Event, no such Investments
shall be made by a Borrower (and no Investments then existing shall be
extended past the then maturity date thereof) unless (i) either (A) no
Loans are then outstanding, or (B) the Investment is a temporary
Investment pending expiration of an Interest Period
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for a LIBO Loan or a BA Equivalent Loan, the proceeds of which
Investment will be applied to the Obligations after the expiration of
such Interest Period, and (ii) such Investments are pledged by the
applicable Borrower to the Collateral Agent as additional collateral
for the Obligations and Other Liabilities pursuant to such agreements
as may be reasonably required by the Agents.
c. Amendments to Article II of the Credit Agreement. The provisions of
Article II of the Credit Agreement are hereby amended as follows:
i. Section 2.01(a)(ii)(B) is hereby amended by deleting the number
"$100,000,000" and substituting the number "$50,000,000" in its
stead.
ii. Section 2.07(a) is hereby amended by deleting the number
"$100,000,000" in clause (ii) of the proviso thereto and
substituting the number "$50,000,000" in its stead.
iii. Section 2.07(c) is hereby amended by deleting the number "120"
appearing therein and substituting the number "180" in its
stead.
iv. Section 2.10 is hereby deleted in its entirety and the following
substituted in its stead:
2.10 Intentionally Omitted.
v. Each of Section 2.14(a) and 2.14(b) is hereby amended by
deleting the number "[CONFIDENTIAL]* %" wherever it appears and
substituting the number "[CONFIDENTIAL]*%" in its stead.
d. Amendment to Article V of the Credit Agreement. The provisions of
Article V of the Credit Agreement are hereby amended as follows:
i. Section 5.01(b) is hereby amended by renumbering clause (iv) as
(v) and inserting the following new clause (iv):
(iv) within ten (10) Business Days after the end of each month,
an aging of the Accounts due with respect to the "Builders
Install Initiative" as of the close of business on the last day
of the immediately preceding month; and
*Confidential treatment has been requested for the redacted portions of this
agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended. The condfidential, redacted portions have been filed separately with
the United States Securites and Exchange Commission.
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ii. Section 5.09(b) is hereby amended by deleting the second
sentence thereof and substituting the following in its stead:
Notwithstanding the foregoing, the Agents and the Borrowers
acknowledge and agree that so long as no Default or Event of
Default has occurred and is continuing (during the continuation
of which the Borrowers shall pay the costs of all appraisals and
commercial finance examinations undertaken by the Agents), the
Borrowers shall only be obligated to reimburse the Agents for
one (1) inventory appraisal and one (1) commercial finance
examination during each fiscal year of the Borrowers, provided
that in the event that the Borrowers, individually or in the
aggregate, have possession of property on consignment, the value
of which exceeds $150,000,000, the Agents may undertake
additional appraisals and commercial finance examinations at the
Borrowers' expense, provided further that nothing contained in
this sentence shall limit the right of the Agents to undertake
additional appraisals and commercial finance examinations at
their expense if no Default or Event of Default then exists, and
provided further that the Canadian Agent shall not undertake any
appraisals or commercial finance examinations with respect to
any Collateral owned by the Canadian Borrower unless an Event of
Default has occurred and is continuing.
e. Amendment to Article VI of the Credit Agreement. The provisions of
Article VI of the Credit Agreement are hereby amended as follows:
i. The proviso at the end of Section 6.05 is hereby deleted in its
entirety and the following substituted in its stead:
provided that all sales, transfers, leases and other
dispositions permitted hereby (other than sales, transfers and
other disposition permitted under clause (ii)) shall be made at
arm's length and for fair value and, with respect to Inventory
and Accounts, solely for cash consideration (which term shall
include credit card sales), except that sales in connection with
the Borrowers' "Builder Install Initiative" may be made for cash
or on credit (which sales on credit which have not been paid
shall in no event exceed $150,000,000 at any time outstanding),
as the Borrowers determine in their reasonable business
judgment.
ii. Section 6.09 is hereby deleted in its entirety and the following
substituted in its stead:
Section 6.09 Fiscal Year. The Borrowers shall not change their
fiscal year without the prior written consent of the
Administrative Agent, which consent shall not be unreasonably
withheld. The Borrowers and the Lenders acknowledge that the
adoption of the retail calendar for
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accounting purposes by the Borrowers shall not, in and of
itself, be deemed a change of their fiscal year.
f. Amendment to Schedules. Schedule 1.1 to the Credit Agreement is hereby
deleted in its entirety and a new Schedule 1.1 in the form annexed
hereto substituted in its stead.
4. Amendments to Security Agreement. The Security Agreement is hereby amended
as follows:
a. Section 3.05 of the Security Agreement is hereby deleted in its
entirety and substituting the following in its stead:
Bailees, Warehousemen, Etc. Except as otherwise disclosed in the
Perfection Certificate, and except for Inventory, the value of which
does not at any time exceed $100,000,000 on an aggregate basis as to
all Grantors, no Inventory is in the care or custody of any third party
or stored or entrusted with a bailee or other third party and none
shall hereafter be placed under such care, custody, storage, or
entrustment except for goods in transit.
b. Section 3.06 of the Security Agreement is hereby amended by deleting
the number "$30,000,000" and substituting the number "$300,000,000" in
its stead.
5. No Further Modification. Except as expressly modified in the manner set
forth above, the Credit Agreement, the Security Agreement, and the other
Loan Documents shall remain unmodified and in full force and effect.
6. No Claims; Waiver. Each Borrower acknowledges, confirms and agrees that as
of the date hereof such Borrower has no knowledge of any offsets, defenses,
claims or counterclaims against the Lender with respect to, under or
relating to the Loan, the Loan Documents, or the transactions contemplated
therein.
7. Conditions to Effectiveness. This Second Amendment shall not be effective
until each of the following conditions precedent have been fulfilled to the
satisfaction of the Agent:
a. This Second Amendment shall have been duly executed and delivered by
the Borrowers, the Agent and Lenders. The Agent shall have received a
fully executed copy hereof and of each other document required
hereunder.
b. All action on the part of the Borrowers necessary for the valid
execution, delivery and performance by the Borrowers of this Second
Amendment shall have been duly and effectively taken. The Agent shall
have received from the Borrowers true copies of the resolutions
authorizing the transactions described herein, each certified by their
secretary or other appropriate officer to be true and complete.
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c. The Borrowers shall have paid the Agent for the pro rata account of the
Lenders an amendment fee in the sum of $[CONFIDENTIAL]*. Such fee shall
be fully earned on the effective date of this Second Amendment and
shall not be subject to refund or rebate under any circumstances.
d. The Borrowers shall have paid the Agent all amounts then due under that
certain Amendment Fee Letter of even date herewith.
e. The Borrowers shall have reimbursed the Agent for all expenses incurred
in connection herewith, including, without limitation, reasonable
attorneys' fees.
f. After giving effect to this Second Amendment, no Default or Event of
Default shall have occurred and be continuing.
g. The Borrowers shall have provided such additional instruments and
documents, as the Agent and its counsel may have reasonably requested.
8. Binding Agreement. The terms and provisions hereof shall be binding upon
and inure to the benefit of the parties hereto and their heirs,
representatives, successors and assigns.
9. Multiple Counterparts. This Second Amendment may be executed in multiple
counterparts, each of which shall constitute an original and together which
shall constitute but one and the same instrument.
10. Governing Law; Sealed Instrument. This Second Amendment shall be construed,
governed, and enforced pursuant to the laws of The Commonwealth of
Massachusetts (except and as to the limited extent expressly provided in
the Credit Agreement) and shall take effect as a sealed instrument.
*Confidential treatment has been requested for the redacted portions of this
agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended. The condfidential, redacted portions have been filed separately with
the United States Securites and Exchange Commission.
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IN WITNESS WHEREOF, this Second Amendment has been duly executed and
delivered by each of the parties hereto as a sealed instrument as of the date
first above written.
CIRCUIT CITY STORES, INC.
as Lead Borrower and Borrower
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Senior Vice President,
Treasurer and Controller
CIRCUIT CITY STORES WEST COAST, INC.
as Borrower
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President and Treasurer
ORBYX ELECTRONICS,LLC
as Borrower
By its sole member
Circuit City Stores West Coast,Inc.
By: /s/ Xxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President and Treasurer
INTERTAN CANADA LTD., as Canadian Borrower
By: /s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President and Treasurer
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FLEET RETAIL GROUP, INC.,
as Agent, and as Domestic Lender
By: /s/ Xxxxxxxx Xxxxxx
-------------------
Name: Xxxxxxxx Xxxxxx
Title:Managing Director
BANK OF AMERICA, N.A., [acting
through its Canada branch], as Canadian
Lender
By: /s/ Xxxxxx Xxx
----------------
Name: Xxxxxx Xxx
Title: Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, as Domestic Lender
By: /s/ Xxxx Xxxxxxx
--------------------
Name: Xxxx Xxxxxxx
Title: Duly Authorized Signer
GE CANADA FINANCE HOLDING
COMPANY, as Canadian Lender
By: /s/ Xxxxx Xxxxxx
------------------
Name: Xxxxx Xxxxxx
Title: Senior Vice President
CONGRESS FINANCIAL
CORPORATION (CENTRAL), as
Domestic Lender
By: /s/ Xxxxx Xxxxxxxx
-------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
CONGRESS FINANCIAL
CORPORATION (CANADA), as Canadian Lender
By: /s/ Xxxxx Xxxxxxxx
-----------------------
Name: Xxxxx Xxxxxxxx
Title: Vice President
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XXXXX FARGO FOOTHILL, LLC, as
Domestic Lender
By: /s/ Xxxxx Xxxxxxx
--------------------
Name: Xxxxx Xxxxxxx
Title: Assistant Vice President
THE CIT GROUP/BUSINESS CREDIT,
INC., as Domestic Lender
By: /s/ Xxxxxx Xxxxxx
-------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
Team Leader
NATIONAL CITY BUSINESS CREDIT,
INC., as Domestic Lender
By: /s/ Xxxxxx X. Xxxxxx
-----------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
JPMORGAN CHASE BANK, N.A.,
formerly known as JPMORGAN CHASE
BANK, as Domestic Lender
By: /s/ Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
FIFTH THIRD BANK, as
Domestic Lender
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Name: Xxxxxx X. Xxxxx
Title: Corporate Banking Officer
SIEMENS FINANCIAL SERVICES, INC.,
as Domestic Lender
By: /s/ Xxxxxx Xxxxxxx
----------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
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