EX-10.47 3 dest-ex1047_241.htm EX-10.47 dest-ex1047_241.htm

Exhibit 10.47

[Execution]

AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDMENT NO. 3 TO AMENDED AND RESTATED CREDIT AGREEMENT, dated as of February 1, 2018 (this “Amendment No. 3”), is entered into by and among WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, in its capacity as agent (in such capacity, together with its successors and assigns, “Administrative Agent”) pursuant to the Credit Agreement (as defined below) for the Lenders (as defined below), the parties to the Credit Agreement as lenders (individually, each a “Lender” and collectively, “Lenders”) party hereto (who constitute Required Lenders), DESTINATION MATERNITY CORPORATION, a Delaware corporation (“Lead Borrower”), CAVE SPRINGS, INC., a Delaware corporation (“Cave” and, together with Lead Borrower, each a “Borrower” and collectively, “Borrowers”), MOTHERS WORK CANADA, INC., a Delaware corporation (“Mothers Work”), DM URBAN RENEWAL, LLC, a New Jersey limited liability company (“DM Urban” and, together with Mothers Work, each a “Guarantor” and collectively, “Guarantors”).

W I T N E S S E T H :

WHEREAS, Administrative Agent, Lenders, Borrowers and Guarantors have entered into financing arrangements pursuant to which Lenders have 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 March 25, 2016, by and among Administrative Agent, Borrowers, the Lenders parties thereto and the Guarantors (as the same now exists and is amended and supplemented pursuant hereto and may hereafter be further amended, modified, supplemented, extended, renewed, restated or replaced, the “Credit Agreement”) and the other Loan Documents;

WHEREAS, Lead Borrower has requested that Administrative Agent and Lender modify certain provisions of the Credit Agreement and Administrative Agent and Required Lenders are willing to agree to such modifications on the terms and subject to the conditions set forth herein;

WHEREAS, by this Amendment No. 3, Administrative Agent, Required Lenders, and Borrowers desire and intend to make certain amendments to the Credit Agreement, including without limitation, extending the stated Maturity Date of the credit facility evidenced by the Credit Agreement;

NOW THEREFORE, in consideration of the foregoing and the mutual agreements and covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.Definitions.  For purposes of this Amendment No. 3, all terms used herein which are not otherwise defined herein, including but not limited to, those terms used in the recitals hereto, shall have the respective meanings assigned thereto in the Credit Agreement.

2.Amendments.  Effective as of the Effective Date, the Credit Agreement is hereby amended in its entirety to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the bold and double-underlined text (indicated textually in the same manner as the following example: double underlined text) as set forth in Exhibit A hereto.  All schedules and exhibits to the Credit Agreement, as in effect immediately prior to the date of this Amendment No. 3, shall constitute schedules and exhibits to the Credit Agreement, except that: (a) each of the Schedules to the Credit Agreement is hereby each replaced in its entirety with the corresponding Schedule to Exhibit A hereto, and (b) each of the Exhibits to the Credit Agreement is hereby each replaced in its entirety with the corresponding Exhibit to Exhibit A hereto.  By executing this Amendment No. 3, Borrower, Subsidiary Guarantors and Lenders hereby each consents and agrees to the other amendments and modifications to the Credit Agreement contained in this Amendment No. 3

5048795.3


 

3.Representations and Warranties.  Borrowers each represent and warrant with and to the Administrative Agent and each Lender on the Consent Effective Date as follows:

(a)no Default or Event of Default exists or has occurred and is continuing as of the date of this Amendment No. 3;

(b)this Amendment No. 3 and the Term Loan Intercreditor Agreement have been duly authorized, executed and delivered by all necessary action on the part of Borrowers and the other Loan Parties and, if necessary, its equity holders and is in full force and effect as of the date hereof, as the case may be, and the agreements and obligations of Borrowers and the other Loan Parties contained herein and therein constitute legal, valid and binding obligations of Borrowers and the other Loan Parties, enforceable against Borrowers and the other Loan Parties in accordance with their terms, except as enforceability is limited by bankruptcy, insolvency, reorganization, moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights and except to the extent that availability of the remedy of specific performance or injunctive relief is subject to the discretion of the court before which any proceeding therefor may be brought;

(c)the execution, delivery and performance of this Amendment No. 3 and the Term Loan Intercreditor Agreement (i) are within each Borrower’s and Guarantor’s corporate or limited liability company powers and (ii) are not in contravention of law or the terms of any Borrower’s or Guarantor’s certificate or articles of incorporation or formation, operating agreement, by laws, or other organizational documentation, or any indenture, agreement or undertaking (including, without limitation, the Term Loan Documents) to which any Borrower or other Loan Party is a party or by which any Borrower or other Loan Party or its property are bound; and

(d)all of the representations and warranties set forth in the Credit Agreement and the other Loan Documents, each as amended hereby, are true and correct in all material respects on and as of the date hereof, as if made on the date hereof, except to the extent any such representation or warranty is made as of a specified date, in which case such representation or warranty shall have been true and correct as of such date.

4.Amendment No. 3 Effective Date.  This Amendment No. 3 shall become effective as of the date on which each of the following conditions has been satisfied, as determined by Administrative Agent in its sole discretion:

(a)this Amendment No. 3 shall have been duly executed by each party hereto;

(b)the Administrative Agent shall have received a copy of Term Loan Credit Agreement, dated of even date herewith, duly executed by Pathlight Capital LLC, as the Term Loan Agent, the requisite lenders parties thereto, Borrowers and Guarantors; and the other Term Loan Documents, each in form and substance satisfactory to the Agent;

(c)the Administrative Agent shall have received evidence that (i) the “Existing Liabilities” (as such quoted term is defined in the Term Loan Credit Agreement (as such term is defined in Exhibit A hereto)) have been repaid in full with the proceeds of the Term Loans (as such term is defined in Exhibit A hereto) under the Term Loan Credit Agreement and the “Existing Term Loan Credit Agreement” and that the documents related thereto shall have been terminated, and (ii) all liens (including “Existing Liens” as such quoted term is defined in the Term Loan Credit Agreement) have been terminated;

 

5048795.3

2

 

 


 

(d)the Administrative Agent shall have received a copy of the Term Loan Intercreditor Agreement, in form and substance satisfactory to the Administrative Agent, duly executed by Administrative Agent, Term Loan Agent, Borrowers and Guarantors;

(e)the receipt by Administrative Agent of (i) the Fee Letter referred to in Exhibit A to Amendment No. 3, executed and delivered by Borrowers and Agent, in form and substance satisfactory to the Agent, and (ii) the fees referred to in the Fee Letter which are due and payable on the date hereof; and

(f)the receipt by Administrative Agent of such certificates of resolutions or other action, incumbency certificates and/or other certificates of responsible officers of each Loan Party as the Administrative Agent may reasonably require evidencing (i) the authority of each Loan Party to enter into this Amendment No. 3 and the other Loan Documents to which such Loan Party is a party or is to become a party and (ii) the identity, authority and capacity of each responsible officer thereof authorized to act as a responsible officer in connection with this Amendment No. 3 and the other Loan Documents to which such Loan Party is a party or is to become a party.

5.Effect of this Amendment No. 3.  Except as expressly set forth herein, no other consents, amendments, changes or modifications to the Loan Documents are intended or implied hereby, and in all other respects the Loan Documents are hereby specifically ratified, restated and confirmed by all parties hereto as of the effective date hereof and Borrowers and the other Loan Parties shall not be entitled to any other or further consent by virtue of the provisions of this Amendment No. 3 or with respect to the subject matter of this Amendment No. 3.  To the extent of conflict between the terms of this Amendment No. 3 and the other Loan Documents, the terms of this Amendment No. 3 shall control.  The Credit Agreement and this Amendment No. 3 shall be read and construed as one agreement.

6.Governing Law.  The validity, interpretation and enforcement of this Amendment No. 2 and any dispute arising out of the relationship between the parties hereto whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York but excluding any principles of conflicts of law or other rule of law that would cause the application of the law of any jurisdiction other than the laws of the State of New York.

7.Binding Effect.  This Amendment No. 3 shall be binding upon and inure to the benefit of each of the parties hereto and their respective successors and assigns.

8.Further Assurances.  Borrowers and other Loan Parties shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Administrative Agent to effectuate the provisions and purposes of this Amendment No. 3.

9.Entire Agreement.  This Amendment No. 3 and the other Loan Documents represent the entire agreement and understanding concerning the subject matter hereof and thereof among the parties hereto, and supersedes all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof and thereof, whether oral or written.

10.Headings.  The headings listed herein are for convenience only and do not constitute matters to be construed in interpreting this Amendment No. 3.

 

5048795.3

3

 

 


 

11.Waiver, Release and Disclaimer.  To induce the Lenders and the Administrative Agent to enter into this Amendment No. 3, the Borrowers and each other Loan Party hereby waive and release any claim, defense, demand, action or suit of any kind or nature whatsoever against the Lenders or the Administrative Agent arising on or prior to the date of this Amendment No. 3 in connection with the Credit Agreement or any of the other Loan Documents, or any of the transactions contemplated thereunder, except that this Section 11 shall not waive or release any of the Lenders’ or the Agent’s contractual obligations under the Credit Agreement or any of the other Loan Documents.

12.Counterparts.  This Amendment No. 3 may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of this Amendment No. 3 by telefacsimile or other electronic method of transmission shall have the same force and effect as delivery of an original executed counterpart of this Amendment No. 3.  Any party delivering an executed counterpart of this Amendment No. 3 by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart of this Amendment No. 3, but the failure to do so shall not affect the validity, enforceability, and binding effect of this Amendment No. 3.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

 

 

5048795.3

4

 

 


 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to be duly executed and delivered by their authorized officers as of the day and year first above written.

 

AGENT AND LENDERS:

 

BORROWERS:

 

 

 

WELLS FARGO BANK, NATIONAL ASSOCIATION,

 

DESTINATION MATERNITY CORPORATION

 

 

 

as Administrative Agent, Issuing Bank,
as a Lender and Swing Line Lender

 

 

 

 

 

By:

 

/s/ Michele L. Riccobono

 

By:

 

/s/ David Stern

Name:

 

Michele L. Riccobono

 

Name:

 

David Stern

Its

 

Authorized Signatory

 

Title:

 

Executive Vice President and Chief

Financial Officer

 

 

 

 

 

CAVE SPRINGS, INC.

 

 

 

 

 

By:

 

/s/ Ronald J. Masciantonio

 

 

Name:

 

Ronald J. Masciantonio

 

 

Title:

 

Assistant Secretary

 

 

 

 

GUARANTORS:

 

 

 

 

 

MOTHERS WORK CANADA, INC.

 

 

 

 

 

By:

 

/s/ Ronald J. Masciantonio

 

 

Name:

 

Ronald J. Masciantonio

 

 

Title:

 

Chief Executive Officer, Executive Vice

President & Chief Administrative Officer

 

 

 

 

DM URBAN RENEWAL, LLC

 

 

By:

 

/s/ Ronald J. Masciantonio

 

 

Name:

 

Ronald J. Masciantonio

 

 

Title:

 

Executive Vice President & Chief

Administrative Officer

 

 

 

[Signature Page to Amendment No. 3 (Destination Maternity)]


EXECUTIONEXHIBIT A

 

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of March 25, 2016 as amended through Amendment No. 23 to Amended and Restated Credit Agreement dated April 7, 2017February 1, 2018

among

DESTINATION MATERNITY CORPORATION,

as the Lead Borrower

For

The Borrowers Named Herein

The Guarantors Named Herein

WELLS FARGO BANK, NATIONAL ASSOCIATION

as Administrative Agent, L/C Issuer, Swing Line Lender,

and

The Other Lenders Party Hereto

WELLS FARGO BANK, NATIONAL ASSOCIATION

as

Sole Lead Arranger and Sole Bookrunner
As amended through Amendment No. 3

 

 

 

 

5048719.15048719.6

 

 

 


 

Table of Contents

 

 

 

Page

 

 

 

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

 

1

 

1.01.

Defined Terms

 

1

 

1.02.

Other Interpretive Provisions

 

6564

 

1.03.

Accounting Terms

 

6765

 

1.04.

Rounding

 

6766

 

1.05.

Times of Day

 

6866

 

1.06.

Letter of Credit Amounts

 

6866

 

1.07.

Currency Equivalents Generally

 

6866

 

1.08.

Determination of Compliance with Certain Covenants

 

6866

 

 

 

 

 

ARTICLE II THE COMMITMENTS AND CREDIT EXTENSIONS

 

6867

 

2.01.

Committed Loans; Reserves

 

6867

 

2.02.

Borrowings, Conversions and Continuations of Committed Loans

 

7068

 

2.03.

Letters of Credit

 

7270

 

2.04.

Swing Line Loans

 

7876

 

2.05.

Prepayments

 

8179

 

2.06.

Termination or Reduction of Commitments

 

8280

 

2.07.

Repayment of Loans

 

8381

 

2.08.

Interest

 

8381

 

2.09.

Fees

 

8482

 

2.10.

Computation of Interest and Fees

 

8482

 

2.11.

Evidence of Debt

 

8482

 

2.12.

Payments Generally; Administrative Agent’s Clawback

 

8583

 

2.13.

Sharing of Payments by Lenders

 

8786

 

2.14.

Settlement Amongst Lenders

 

8886

 

2.15.

Increase in Commitments

 

8887

 

 

 

 

 

ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY; APPOINTMENT OF LEAD BORROWER

 

9088

 

3.01.

Taxes

 

9088

 

3.02.

Illegality

 

9290

 

3.03.

Inability to Determine Rates

 

9290

 

3.04.

Increased Costs; Reserves on LIBO Rate Loans

 

9291

 

3.05.

Compensation for Losses

 

9492

 

3.06.

Mitigation Obligations; Replacement of Lenders

 

9493

 

3.07.

Survival

 

9593

 

3.08.

Designation of Lead Borrower as Borrowers’ Agent

 

9593

 

 

 

 

 

ARTICLE IV CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

 

9593

 

4.01.

Conditions of Initial Credit Extension

 

9594

 

4.02.

Conditions to all Credit Extensions

 

9896

 

 

 

 

 

ARTICLE V REPRESENTATIONS AND WARRANTIES

 

9897

 

5.01.

Existence, Qualification and Power

 

9997

 

5048719.15048719.6

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5.02.

Authorization; No Contravention

 

9997

 

5.03.

Governmental Authorization; Other Consents

 

9997

 

5.04.

Binding Effect

 

9998

 

5.05.

Financial Statements; No Material Adverse Effect

 

10098

 

5.06.

Litigation

 

10099

 

5.07.

No Default or Event of Default

 

10199

 

5.08.

Ownership of Property; Liens

 

10199

 

5.09.

Environmental Compliance

 

102100

 

5.10.

Insurance

 

102101

 

5.11.

Taxes

 

103101

 

5.12.

ERISA and Canadian Pension Compliance

 

103101

 

5.13.

Subsidiaries; Equity Interests

 

104102

 

5.14.

Margin Regulations; Investment Company Act

 

104102

 

5.15.

Disclosure

 

104103

 

5.16.

Compliance with Laws

 

105103

 

5.17.

Intellectual Property; Licenses, Etc

 

106104

 

5.18.

Labor Matters

 

106104

 

5.19.

Security Documents

 

107105

 

5.20.

Solvency

 

107105

 

5.21.

Deposit Accounts; Credit Card Arrangements

 

107105

 

5.22.

Brokers

 

107106

 

5.23.

Customer and Trade Relations

 

108106

 

5.24.

Material Contracts

 

108106

 

5.25.

Payables Practices

 

108106

 

5.26.

Credit Card Receivables

 

108106

 

 

 

ARTICLE VI AFFIRMATIVE COVENANTS

 

108106

 

6.01.

Financial Statements

 

108106

 

6.02.

Certificates; Other Information

 

109108

 

6.03.

Notices

 

112110

 

6.04.

Payment of Obligations

 

112111

 

6.05.

Preservation of Existence, Etc

 

113111

 

6.06.

Maintenance of Properties

 

113111

 

6.07.

Maintenance of Insurance

 

113112

 

6.08.

Compliance with Laws

 

114112

 

6.09.

Books and Records; Accountants

 

114112

 

6.10.

Inspection Rights; Field Examinations; Appraisals

 

114113

 

6.11.

Use of Proceeds

 

115114

 

6.12.

Additional Loan Parties

 

116114

 

6.13.

Cash Management

 

116114

 

6.14.

Information Regarding the Collateral

 

117115

 

6.15.

Physical Inventories

 

118116

 

6.16.

Environmental Laws

 

118117

 

6.17.

Further Assurances

 

119117

 

6.18.

Lender Meetings

 

120118

 

6.19.

Reserved

 

120118

 

6.20.

Designation as Senior Debt

 

120118

 

5048719.15048719.6

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6.21.

Post-Closing Matters

 

120118

 

6.22.

Compliance with Canadian Pension Matters

 

120119

 

6.23.

Maintenance of Records

 

121119

 

6.24.

Collection

 

121119

 

6.25.

Actions Regarding Intellectual Property

 

121119

 

 

 

 

 

ARTICLE VII NEGATIVE COVENANTS

 

121120

 

7.01.

Liens

 

121120

 

7.02.

Investments; Acquisitions

 

122120

 

7.03.

Indebtedness; Disqualified Stock

 

122120

 

7.04.

Fundamental Changes

 

122120

 

7.05.

Dispositions

 

123122

 

7.06.

Restricted Payments

 

123122

 

7.07.

Prepayments of Indebtedness

 

124122

 

7.08.

Change in Nature of Business

 

125123

 

7.09.

Transactions with Affiliates

 

125123

 

7.10.

Burdensome Agreements

 

125123

 

7.11.

Use of Proceeds

 

126124

 

7.12.

Amendment of Material Documents

 

126124

 

7.13.

Fiscal Year

 

126125

 

7.14.

Deposit Accounts; Credit Card Processors

 

127125

 

7.15.

Financial Covenant

 

127125

 

7.16.

[Reserved]

 

127125

 

7.17.

Canadian Pension Plans

 

127125

 

7.18.

Modification of Terms, Etc

 

127125

 

 

 

 

 

ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES

 

128126

 

8.01.

Events of Default

 

128126

 

8.02.

Remedies Upon Event of Default

 

131129

 

8.03.

Application of Funds

 

132130

 

 

 

 

 

ARTICLE IX ADMINISTRATIVE AGENT

 

133131

 

9.01.

Appointment and Authority

 

133131

 

9.02.

Rights as a Lender

 

134132

 

9.03.

Exculpatory Provisions

 

134132

 

9.04.

Reliance by Administrative Agent

 

135133

 

9.05.

Delegation of Duties

 

135133

 

9.06.

Resignation of Administrative Agent

 

135133

 

9.07.

Non-Reliance on Administrative Agent and Other Lenders

 

136134

 

9.08.

No Other Duties, Etc

 

136134

 

9.09.

Administrative Agent May File Proofs of Claim

 

136135

 

9.10.

Collateral and Guaranty Matters

 

137135

 

9.11.

Notice of Transfer

 

138136

 

9.12.

Reports and Financial Statements

 

138136

 

9.13.

Agency for Perfection

 

138137

 

9.14.

Indemnification

 

139137

 

9.15.

Relation among Lenders

 

139137

 

9.16.

Defaulting or Deteriorating Lender

 

139137

 

5048719.15048719.6

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9.17.

[Reserved]

 

140138

 

9.18.

Appointment for the Province of Québec

 

140138

 

 

 

 

 

ARTICLE X MISCELLANEOUS

 

141139

 

10.01.

Amendments, Etc

 

141139

 

10.02.

Notices; Effectiveness; Electronic Communications

 

142140

 

10.03.

No Waiver; Cumulative Remedies

 

144142

 

10.04.

Expenses; Indemnity; Damage Waiver

 

144142

 

10.05.

Payments Set Aside

 

146144

 

10.06.

Successors and Assigns

 

146144

 

10.07.

Treatment of Certain Information; Confidentiality

 

149147

 

10.08.

Right of Setoff

 

150148

 

10.09.

Interest Rate Limitation

 

151149

 

10.10.

Counterparts; Integration; Effectiveness

 

151149

 

10.11.

Survival

 

151149

 

10.12.

Severability

 

151150

 

10.13.

Replacement of Lenders

 

152150

 

10.14.

Governing Law; Jurisdiction; Etc.

 

152150

 

10.15.

Waiver of Jury Trial

 

153151

 

10.16.

No Advisory or Fiduciary Responsibility

 

153152

 

10.17.

USA PATRIOT Act Notice

 

154152

 

10.18.

Foreign Asset Control Regulations

 

154152

 

10.19.

Time of the Essence

 

154153

 

10.20.

Reserved

 

154153

 

10.21.

Press Releases

 

155153

 

10.22.

Additional Waivers

 

155153

 

10.23.

No Strict Construction

 

156154

 

10.24.

Attachments

 

156154

 

10.25.

Québec Interpretation

 

156154

 

10.26.

English Language Only

 

157155

 

10.27.

Lender Action

 

157155

 

10.28.

Intercreditor Agreements.

 

157155

 

10.29.

Keepwell

 

157155

 

 

 

 

 

ARTICLE XI ACKNOWLEDGMENT AND RESTATEMENT

 

157156

 

11.01.

Existing Obligations

 

157156

 

11.02.

Acknowledgment of Security Interests

 

158156

 

11.03.

Existing Loan Documents

 

158156

 

11.04.

Restatement

 

158156

 

 

 

 

 

SIGNATURES

 

S-1


 

5048719.15048719.6

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SCHEDULES

 

1.01(a)

 

Customer List and Marketing Service Agreements

 

 

 

1.01(b)

 

Leased Department Agreements

 

 

 

1.01(c)

 

Approved Foreign Jurisdictions

 

 

 

1.01(d)

 

Existing Loan Documents

 

 

 

2.01

 

Commitments and Applicable Percentages

 

 

 

4.01(a)

 

Security Documents

 

 

 

5.01

 

Loan Parties Organizational Information

 

 

 

5.05

 

Material Indebtedness

 

 

 

5.06

 

Litigation

 

 

 

5.08(b)(1)

 

Owned Real Estate

 

 

 

5.08(b)(2)

 

Leased Real Estate

 

 

 

5.09

 

Environmental Matters

 

 

 

5.10

 

Insurance

 

 

 

5.11

 

Tax Sharing Arrangements

 

 

 

5.13

 

Subsidiaries; Other Equity Investments

 

 

 

5.17

 

Intellectual Property Matters

 

 

 

5.18

 

Collective Bargaining Agreements

 

 

 

5.21(a)

 

DDAs

 

 

 

5.21(b)

 

Credit Card Arrangements

 

 

 

5.24

 

Material Contracts

 

 

 

6.02

 

Financial and Collateral Reporting

 

 

 

6.21

 

Post-Closing Matters

 

 

 

7.01

 

Existing Liens

 

 

 

7.02

 

Existing Investments

 

 

 

7.03(a)

 

Existing Indebtedness

 

 

 

7.10

 

Burdensome Agreements

 

 

 

10.02

 

Administrative Agent’s Office; Certain Addresses for Notices

 

 

5048719.15048719.6

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EXHIBITS

Form of

 

A

 

Committed Loan Notice

 

 

 

B

 

Swing Line Loan Notice

 

 

 

C-1

 

Note

 

 

 

C-2

 

Swing Line Note

 

 

 

D

 

Compliance Certificate

 

 

 

E

 

Assignment and Assumption

 

 

 

F

 

Customs Broker Agreement

 

 

 

G

 

Borrowing Base Certificate

 

 

 

H

 

DDA Notification

 

 

 

I

 

Credit Card Notification

 

 

 

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AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of March 25, 2016, among DESTINATION MATERNITY CORPORATION, a Delaware corporation (the “Lead Borrower”), CAVE SPRINGS, INC., a Delaware corporation (“Cave”, and together with Lead Borrower, each a “Borrower” and collectively, the “Borrowers”), the Guarantors, each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and Swing Line Lender and L/C Issuer.

WHEREAS, Administrative Agent, Lenders and Lead Borrower have entered into financing arrangements pursuant to which Lenders (or Agent on behalf of Lenders) have made revolving loans to Lead Borrower, as set forth in the Existing Credit Agreement (as hereinafter further defined), and together with the agreements listed on Schedule 1.01(d) and all other agreements, documents and instruments at any time executed and/or delivered in connection therewith, or related thereto, as from time to time amended, modified, supplemented, extended, renewed, restated or replaced, collectively, the “Existing Loan Documents”);

WHEREAS, Administrative Agent and Lenders have agreed to amend and restate the Existing Credit Agreement and each Lender (severally and not jointly) has agreed to continue to make Committed Loans to the Borrowers on a pro rata basis according to its Commitment (as defined below) on the terms and conditions set forth herein, the L/C Issuer (as defined below) has indicated its willingness to issue Letters of Credit (as defined below), and Agent has agreed to continue to act as agent for Lenders, in each case, on the terms and conditions set forth herein and the other Loan Documents;

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS

1.01.Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

Accelerated Borrowing Base Delivery Event” means either (a) the occurrence and continuance of any Event of Default, or (b) the failure of the Borrowers to maintain Excess Availability of an amount greater than twelve and one-half percent (12.5%) of the Borrowing Base (calculated without giving effect to the Term Loan Reserve).  For purposes of this Agreement, the occurrence of an Accelerated Borrowing Base Delivery Event shall be deemed continuing at the Administrative Agent’s option (c) so long as such Event of Default has not been waived, and/or (d) if the Accelerated Borrowing Base Delivery Event arises as a result of the Borrowers’ failure to achieve Excess Availability as required hereunder, until Excess Availability has exceeded the amount equal to fifteen percent (15%) of the Borrowing Base (calculated without giving effect to the Term Loan Reserve) for thirty (30) consecutive calendar days, in which case an Accelerated Borrowing Base Delivery Event shall no longer be deemed to be continuing for purposes of this Agreement.

 

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Acceptable Document of Title” means, with respect to any Inventory, a tangible, negotiable bill of lading or other Document (as defined in the UCC) that (a) is issued by a common carrier which is not an Affiliate of the Approved Foreign Vendor or any Loan Party which is in actual possession of such Inventory, (b) is issued to the order of any Borrower or, if so requested by the Administrative Agent, to the order of the Administrative Agent, (c) names the Administrative Agent as a notify party and bears a conspicuous notation on its face of the Administrative Agent’s security interest therein, (d) that is not subject to any Lien other than a perfected first priority security interest in favor of the Administrative Agent and Liens permitted under clauses (a), (b),  (p) and (r) of the definition of Permitted Encumbrances and any other Liens with respect thereto permitted under this Agreement that are subject to an intercreditor agreement in form and substance reasonably satisfactory to Administrative Agent, and (e) is on terms otherwise reasonably acceptable to the Administrative Agent.

ACH” means automated clearing house transfers.

Accommodation Payment” has the meaning specified in Section 10.22.

Account” means “accounts” as defined in the UCC, and also means a right to payment of a monetary obligation, whether or not earned by performance, (a) for property that has been or is to be sold, leased, licensed, assigned, or otherwise disposed of, (b) for services rendered or to be rendered, (c) for a policy of insurance issued or to be issued, (d) for a secondary obligation incurred or to be incurred, (e) for energy provided or to be provided, (f) for the use or hire of a vessel under a charter or other contract, (g) arising out of the use of a credit or charge card or information contained on or for use with the card, or (h) as winnings in a lottery or other game of chance operated or sponsored by a state, governmental unit of a state, or person licensed or authorized to operate the game by a state or governmental unit of a state.  The term “Account” includes health-care-insurance receivables.

Account Debtor” means an “Account Debtor” as such term is a defined in the UCC, including without limitation, any Credit Card Issuer, any Credit Card Processor and any Department Lessor.

Acquisition” means, with respect to any Person (a) an Investment in, or a purchase of a Controlling interest in, the Equity Interests of any other Person, (b) a purchase or other acquisition of all or substantially all of the assets or properties of, another Person or of any business unit of another Person, (c) any merger or consolidation of such Person with any other Person or other transaction or series of transactions resulting in the acquisition of all or substantially all of the assets, or a Controlling interest in the Equity Interests, of any Person, or (d) any acquisition of any Store locations of any Person (other than the leasing or acquisition of any one Store in the ordinary course of business), in each case, in any transaction or group of transactions which are part of a common plan.

 

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Additional Maximum PMSI Debt Amount” means on any date of determination, the maximum amount of Additional PMSI Indebtedness which may be outstanding pursuant to clause (c) of the definition of Permitted Indebtedness, provided, that, (a) at all times prior to the incurrence of Permitted Term Loan Indebtedness, the Additional Maximum PMSI Debt Amount shall not exceed $10,000,000, and (b) upon and after the incurrence of the Permitted Term Loan Indebtedness and for so long as any Permitted Term Loan Indebtedness remains outstanding or there is any undrawn or committed amount of Permitted Term Loan Indebtedness, the Additional Maximum PMSI Debt Amount shall not exceed the amount equal to the lesser of (i) $150,000,000 minus  the outstanding principal amount of Permitted Term Loan Indebtedness, or (ii) $10,000,000.  The amount of Additional PMSI Indebtedness outstanding at any time plus the amount of Permitted Term Loan Indebtedness outstanding at anytime shall not exceed $150,000,000, in the aggregate.

Additional PMSI Indebtedness” means the Indebtedness permitted to be incurred and outstanding pursuant to clause (c) of the definition of Permitted Indebtedness in excess of $15,000,000.

Adjusted LIBO Rate” means:

(a)for any Interest Period with respect to any LIBO Borrowing, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of one percent) equal to (i) the LIBO Rate for such Interest Period multiplied by (ii) the Statutory Reserve Rate; and

(b)for any interest rate calculation with respect to any Base Rate Loan, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of one percent) equal to (i) the LIBO Rate for an Interest Period commencing on the date of such calculation and ending on the date that is thirty (30) days thereafter multiplied by (ii) the Statutory Reserve Rate.

The Adjusted LIBO Rate will be adjusted automatically as of the effective date of any change in the Statutory Reserve Rate.

Administrative Agent” means Wells Fargo in its capacity as administrative and collateral agent hereunder and under any of the other Loan Documents, or any replacement or any successor administrative agent permitted hereunder.

Administrative Agent’s Office” means the Administrative Agent’s address as set forth on Schedule 10.02, and, as appropriate, the Agent Payment Account, or such other address or account as the Administrative Agent may from time to time notify the Lead Borrower and the Lenders.

Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.

Affiliate” means, with respect to any Person, (i) another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

 

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Agent Payment Account” shall mean account no. 37235547964501150 of Administrative Agent at Wells Fargo, or such other account of Administrative Agent as Administrative Agent may from time to time designate to Lead Borrower as the Agent Payment Account for purposes of this Agreement and the other Loan Documents.

Agent Parties” shall have the meaning specified in Section 10.02(c).

Aggregate Commitments” means the Commitments of all the Lenders.  As of the RestatementAmendment No. 3 Effective Date, the Aggregate Commitments are $70,000,000.50,000,000.

Aggregate Tranche A-1 Commitments” has the meaning specified in the Existing Credit Agreement.

Agreement” means this Credit Agreement.

Allocable Amount” has the meaning specified in Section 10.22(d).

Amendment No. 1” means the Consent and Amendment No. 1 to Amended and Restated Credit Agreement, dated December 20, 2016, by and among the Administrative Agent, Borrowers, Required Lenders, and Guarantors.

Amendment No. 2” means Amendment No. 2 to Amended and Restated Credit Agreement, dated April 7, 2017, by and among the Administrative Agent, Borrowers, Required Lenders, and Guarantors.

Amendment No. 3” means Amendment No. 3 to Amended and Restated Credit Agreement, dated February 1, 2018, by and among the Administrative Agent, Borrowers, Required Lenders, and Guarantors.

“Amendment No. 2 Effective Date” means the date that all of the conditions set forth in Section 4 belowof Amendment No. 2 are satisfied.

“Amendment No. 3 Effective Date” means the date that all of the conditions set forth in Section 4 of Amendment No. 3 are satisfied.

Anti-Corruption Laws” means Laws relating to anti-bribery or anti-corruption (governmental or commercial) which apply to the Loan Parties, their Restricted Subsidiaries, including Laws that prohibit the corrupt payment, offer, promise, or authorization of the payment or transfer of anything of value (including gifts or entertainment), directly or indirectly, to any foreign Government Official, foreign government employee or commercial entity to obtain a business advantage; including the FCPA, and all national and international Laws enacted to implement the OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions.

Anti-Terrorism Laws” means Laws relating to terrorism or money laundering, including Executive Order No. 13224, the PATRIOT Act, the Laws comprising or implementing the Bank Secrecy Act, any Sanctions Laws, and the Laws administered by OFAC.

 

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Applicable Lenders” means the Required Lenders, all affected Lenders, or all Lenders, as the context may require.

Applicable Margin” means with respect to each:

 

(a)  

LIBO Rate Loan, one and one-half percent (1.50%); and

 

(b)  

Base Rate Loan, one-half of one percent (0.50%).

Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender’s Commitment at such time.  If the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments.  The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

Appraised Value” means with respect to Eligible Inventory, the appraised orderly liquidation value, net of costs and expenses to be incurred in connection with any such liquidation, which value is expressed as a percentage of Cost of Eligible Inventory as set forth in the inventory stock ledger of the Lead Borrower, which value shall be determined from time to time by the most recent appraisal undertaken by an independent appraiser engaged by the Administrative Agent.

Approved Foreign Jurisdiction” means each country or jurisdiction listed on Schedule 1.01(c) and each additional country or jurisdiction as Administrative Agent may from time to time agree in its Permitted Discretion.

Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender, (c) an entity or an Affiliate of an entity that administers or manages a Lender or (d) the same investment advisor or an advisor under common control with such Lender, Affiliate or advisor, as applicable.

Approved Foreign Vendor” means a Foreign Vendor which (a) is located in any country acceptable to the Administrative Agent in its Permitted Discretion, (b) has received timely payment or material performance of all obligations owed to it by the Loan Parties, (c) has not asserted and has no right to assert any reclamation, repossession, diversion, stoppage in transit, Lien or title retention rights in respect of such Inventory, and (d), if so requested by the Administrative Agent, has entered into and is in material compliance with the terms of a Foreign Vendor Agreement.

Arranger” means Wells Fargo Bank, National Association, in its capacity as sole lead arranger and sole book manager.

 

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Assignee Group” means two or more Eligible Assignees that are Affiliates of one another or two or more Approved Funds managed by the same investment advisor.

Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form approved by the Administrative Agent.

Attributable Indebtedness” means, on any date, (a) in respect of any Capital Lease Obligation of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease or similar payments under the relevant lease or other applicable agreement or instrument that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease, agreement or instrument were accounted for as a capital lease.

Audited Financial Statements” means the audited consolidated balance sheet of the Lead Borrower and its Subsidiaries for the twelve (12) month (12) period ended September 30, 2014, and the related consolidated statements of income or operations, Shareholders’ Equity and cash flows for such fiscal year of the Lead Borrower and its Subsidiaries, including the notes thereto.

Auto-Extension Letter of Credit” shall have the meaning specified in Section 2.03(b)(iii).

Availability Period” means the period from and including the Restatement Effective Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

Availability Reserves” means, without duplication of any other Reserves or items to the extent such items are otherwise addressed or excluded through eligibility criteria, such reserves as the Administrative Agent from time to time determines in its Permitted Discretion as being appropriate, to reflect (a) matters that adversely affect the Collateral, its value or the amount that Administrative Agent might receive from the sale or other disposition thereof or the ability of Administrative Agent to realize thereon, (b) claims and liabilities that Administrative Agent in its Permitted Discretion determines will need to be satisfied in connection with the realization on the Collateral (c) events, conditions, contingencies or risks which adversely affect any component of the Borrowing Base, (d) matters that adversely affect the validity or enforceability of the Loan Documents or any material remedies of the Administrative Agent and the Secured Parties thereunder, or (e)  that a Default or an Event of Default then exists. Without limiting the generality of the foregoing, Availability Reserves may include, in the Administrative Agent’s Permitted Discretion, (but are not limited to) reserves based on: (i) rental payments or other amounts payable to lessors where Administrative Agent has not received a Collateral Access Agreement, provided, that, (A) such reserves as to retail store locations shall not exceed at any time the aggregate of amounts payable for the next one (1) month for such locations in those States where any right of the lessor may be pari passu or have priority over the Lien of

 

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Administrative Agent, including Pennsylvania, Virginia and Washington and (B) no Availability Reserves shall be established in respect of payments to Department Lessors that would be categorized as rent by the Loan Parties, consistent with their current practices in effect on the Restatement Effective Date, provided, that, the applicable Leased Department Agreement is in full force and effect and no event of default exists thereunder; (ii) customs duties, and other costs to release Inventory which is being imported into the United States; (iii) salaries, wages and benefits due to employees of any Borrower, that would reasonably be expected to be incurred in connection with a Liquidation, (iv) outstanding Taxes and other governmental charges, including, without limitation, ad valorem, real estate, personal property, sales, claims of the PBGC and other Taxes which may have or are reasonably anticipated to have priority over the interests of the Administrative Agent in the Collateral; (v) [Reserved], (vi) Customer Credit Liabilities, which reserve shall be in an amount equal to thirty-three percent (33%) of the aggregate amount of Customer Credit Liabilities, (vii) Customer Deposits, which reserve shall be in an amount equal to thirty-three percent (33%) of the aggregate amount of Customer Deposits, (viii) reserves for reasonably anticipated changes in the Appraised Value of Eligible Inventory between appraisals, (ix) warehousemen’s or bailee’s charges and other Permitted Encumbrances which may have priority over the security interests of the Administrative Agent in the Collateral, (x) amounts due to vendors on account of consigned goods, (xi) Cash Management Reserves, (xii) Bank Products Reserves, (xiii) Reserved, (xiv) royalties payable in respect of licensed merchandise, and  (xv) for the amount of the Priority Payables then outstanding, (xvi) the Term Loan Reserve, (xvii) the EBITDA Reserve and (xviii) Incremental Equipment Reserve. To the extent that such Availability Reserve is in respect of amounts that may be payable to third parties the Administrative Agent may, at its option, deduct such Availability Reserve from the amount equal to the Aggregate Commitments, at any time that the Aggregate Commitments are less than the amount of the Borrowing Base.  The amount of any Availability Reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition or other matter which is the basis for such Reserve as determined by the Administrative Agent in their Permitted Discretion.  To the extent that an event, condition or matter is directly addressed pursuant to the calculation of the Net Recovery Percentage as to Inventory, the Administrative Agent shall not also establish an Availability Reserve to address the same event, condition or matter, including any Availability Reserve referred to in clause (iii) above.

Bank Products” means any services or facilities provided to any Loan Party by the Administrative Agent or any of its Affiliates (but excluding Cash Management Services) including, without limitation, on account of (a) Swap Contracts, (b) merchant services constituting a line of credit, (c) leasing facilities, including without limitation, the transactions evidenced by the Wells Fargo Equipment Financing Documents, (d) Factored Receivables, and (de) supply chain finance services including, without limitation, trade payable services, and supplier accounts receivable purchases, but excluding any factoring services.

Bank Products Reserves” means such reserves as the Administrative Agent from time to time determines in its discretion as being appropriate to reflect the liabilities and obligations of the Loan Parties with respect to Bank Products then provided or outstanding.

 

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Base Rate” means, for any day, a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate, as in effect from time to time, plus one-half of one percent (0.50%), (b) the Adjusted LIBO Rate plus one percent (1.00%), or (c) the rate of interest in effect for such day as publicly announced from time to time by Wells Fargo as its “prime rate.; provided that the Base Rate shall not be less than zero.  The “prime rate” is a rate set by Wells Fargo based upon various factors including Wells Fargo’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate.  Any change in such rate announced by Wells Fargo shall take effect at the opening of business on the day specified in the public announcement of such change.

Base Rate Loan” means a Loan that bears interest based on the Base Rate.

Blocked Account” means a deposit account of a Loan Party to which funds from one or more DDAs are from time to time transferred.

Blocked Account Agreement” means with respect to an account established by a Loan Party, an agreement, in form and substance reasonably satisfactory to the Administrative Agent, establishing control (as defined in the UCC) of such account by the Administrative Agent and Term Loan Agent and whereby the bank maintaining such account agrees, upon the occurrence and during the continuance of a Cash Dominion Event, to comply only with the instructions originated by the Administrative Agent and/or Term Loan Agent, as applicable, without the further consent of any Loan Party.

Blocked Account Bank” means each bank with whom deposit accounts are maintained in which any funds of any of the Loan Parties from one or more DDAs are concentrated and with whom a Blocked Account Agreement has been, or is required to be, executed in accordance with the terms hereof.

Blocked Person” means any Person: (a) listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (b) a Person owned or controlled by, or acting for or on behalf of, any Person that is listed in the annex to, or is otherwise subject to the provisions of, Executive Order No. 13224; (c) a Person with which any Lender is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law; (d) a Person that commits, threatens or conspires to commit or supports “terrorism” as defined in Executive Order No. 13224; or (e) a Person that is named on the most current OFAC Lists.

Borrower Materials” has the meaning specified in last paragraph of Section 6.02.

Borrowers” has the meaning specified in the introductory paragraph hereto.

Borrowing” means a Committed Borrowing or a Swing Line Borrowing, as the context may require.

 

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Borrowing Base” means, at any time of calculation, an amount equal to:

(a)  the lesser of (i) the sum of (A) ninety percent (90%) multiplied by the face amount of Eligible Credit Card Receivables; plus (B) eighty-five percent (85%) multiplied by the face amount of Eligible Trade Receivables; plus (C) eighty percent (80%) multiplied by the face amount of Eligible Receivables consisting of Customer List and Marketing Services Receivables; plus (D) eighty percent (80%) multiplied by the face amount of Eligible Receivables consisting of Leased Department Receivables or (ii) the amount equal to thirty percent (30%) of the Borrowing Base (the “Borrowing Base” calculation for purposes of this clause (ii), shall include the amount obtained in clause (a)(i) without regard to the 30% limitation and the amounts set forth in clauses (b), (c), (d) and (e) below), and in the case of each of clauses (i) and (ii) net of any Receivables Reserves; plus

(b)   ninety percent (90%) of the Net Recovery Percentage of Eligible Inventory consisting of finished goods Inventory and Eligible LC Inventory (other than Eligible In-Transit Inventory) multiplied by the Value of such Inventory, net of applicable Inventory Reserves;

(c)  the lesser of (i) ninety percent (90%) of the Net Recovery Percentage of Eligible Inventory consisting of leased department finished goods Inventory multiplied by the Value of such Inventory, or (ii) the amount of equal to thirty-five percent (35%) of the Borrowing Base calculated pursuant to clauses (b), (c) and (d) hereof (but without regard to the 35% limitation), and in the case of each of clauses (i) and (ii) net of any applicable Inventory Reserves;

(d)  the lesser of (i) ninety percent (90%) of the Net Recovery Percentage of Eligible In-Transit Inventory (exclusive of Eligible LC Inventory) multiplied by the Value of such Inventory, net of applicable Inventory Reserves or (ii) $10,000,000the lesser of (A) $7,500,000 or (B) fifteen percent (15%) of the Borrowing Base calculated pursuant to clauses (b), (c) and (d) hereof (but without regard to the 35% limitation), and in the case of each of clauses (i) and (ii) net of any applicable Inventory Reserves;

(e)  one hundred percent (100%) of Qualified Cash, provided, that, Qualified Cash included in the Borrowing Base may not be withdrawn from the deposit account or investment account at Administrative Agent or another institution reasonably satisfactory to Administrative Agent, thereby reducing the Borrowing Base, unless and until the Lead Borrower furnishes the Administrative Agent with a Borrowing Base Certificate as of the date of such proposed withdrawal reflecting that, after giving effect to such withdrawal, no Overadvance will result;

minus

(f)  the sum of (i) the then amount of the Term Loan Reserve, and (ii) the then amount of all Availability Reserves (other than the Term Loan Reserve, EBITDA Reserve, and Incremental Equipment Reserve), (iii) the EBITDA Reserve and (iv) the Incremental Equipment Reserve.

 

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Notwithstanding clause (a)(i)(C) of the definition of Borrowing Base, upon the occurrence of an event of default pursuant to Section 8.01(a) or Section 8.01(f) of the Term Loan Credit Agreement (as in effect on the date hereofAmendment No. 3 Effective Date, each being a “Term Loan Default”), Receivables consisting of Customer List and Marketing Services Receivables invoiced after the date of any such Term Loan Default, shall not be included in the calculation of the Borrowing Base.

Borrowing Base Certificate” means a certificate substantially in the form of Exhibit G hereto (with such changes therein as may be required by the Administrative Agent in theits Permitted Discretion to reflect the components of and reserves against the Borrowing Base as provided for hereunder from time to time), executed and certified as accurate and complete by a Responsible Officer of the Lead Borrower which shall include appropriate exhibits, schedules, supporting documentation, and additional reports as reasonably requested by the Administrative Agent.

Business” means the retail or wholesale manufacturing, marketing and/or sale of consumer products or services, the licensing of Borrowers’ trademarks and/or other intellectual property (either in connection with its franchising activities or otherwise), and the provision of services to third party companies in connection with the Borrowers’ proprietary list of customers and other marketing partnership related activities.

Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent’s Office is located and, if such day relates to any LIBO Rate Loan, means any such day on which dealings in Dollar deposits are conducted by and between banks in the London interbank market.

Canadian Benefit Plans” means any plan, fund, program, or policy, whether oral or written, formal or informal, funded or unfunded, insured or uninsured, providing employee benefits, including medical, hospital care, dental, sickness, accident, disability, life insurance, pension, retirement or savings benefits, under which any of the Loan Parties or any Restricted Subsidiary has any liability with respect to any employee or former employee related to employment in Canada, but excluding any Canadian Pension Plans and any Canadian Union Plans.

Canadian Collateral” means Collateral consisting of assets or interests in assets of the Loan Parties located in Canada, and the proceeds thereof.

Canadian Dollars” and “C$” shall each mean the lawful currency of Canada.

 

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Canadian Pension Event” means (a) the voluntary whole or partial wind up of a Canadian Pension Plan by any Loan Party or Restricted Subsidiary; (b) the withdrawal of a Borrower or Restricted Subsidiary from a Canadian Union Plan; (c) the filing of a notice of intent to terminate in whole or in part a Canadian Pension Plan or Canadian Union Plan or the treatment of a Canadian Pension Plan or Canadian Union Plan amendment as a termination or partial termination; (d) the institution of proceedings by any Governmental Authority to terminate in whole or in part or have a trustee appointed to administer a Canadian Pension Plan or Canadian Union Plan, or (e) any other event or condition which might constitute grounds for the termination of, winding up or partial termination or winding up or the appointment of trustee to administer, any Canadian Pension Plan or Canadian Union Plan.

Canadian Pension Plans” means any plan or arrangement that is required to be registered under Canadian federal or provincial law and is or was established, maintained or contributed to or required to be contributed to by a Borrower or any Restricted Subsidiary for its employees or former employees, but does not include the Canada Pension Plan or the Quebec Pension Plan as maintained by the Government of Canada or the Province of Quebec, respectively, or any Canadian Union Plan.

Canadian Security Agreement” means the Security Agreement, dated November 1, 2012, in form and substance reasonably satisfactory to Administrative Agent, executed and delivered by the Loan Parties.

Canadian Security Documents” means the Canadian Security Agreement, the Québec Hypothec and any other Loan Document that grants or purports to grant a Lien on any Canadian Collateral.

Canadian Union Plan” means any and all registered pension and other benefit plans for the benefit of employees or former employees of any Loan Party or Restricted Subsidiary in respect of employment in Canada, which are not maintained, sponsored or administered by a Loan Party or Restricted, but to which a Borrower or any Restricted Subsidiary is or was required to contribute pursuant to a collective agreement or a participation agreement.

Capital Expenditures” means, with respect to any Person for any period, (a) all expenditures made (whether made in the form of cash or other property) or costs incurred for the acquisition or improvement of fixed or capital assets of such Person (excluding normal replacements and maintenance which are properly charged to current operations), in each case that are (or should be) set forth as capital expenditures in a Consolidated statement of cash flows of such Person for such period, in each case prepared in accordance with GAAP, and (b) Capital Lease Obligations incurred by a Person during such period.

Capital Lease Obligations” means, with respect to any Person for any period, the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as liabilities on a balance sheet of such Person under GAAP and the amount of which obligations shall be the capitalized amount thereof determined in accordance with GAAP.

 

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Cash Collateral” means any pledges or deposits of cash by the Loan Parties to Cash Collateralize any L/C Obligations.

Cash Collateral Account” means a non-interest bearing account established by one or more of the Loan Parties with Wells Fargo, and in the name of, the Administrative Agent (as the Administrative Agent shall otherwise direct) and under the sole and exclusive dominion and control of the Administrative Agent, in which deposits are required to be made in accordance with Section 2.03(g) or 8.02(c).  

Cash Collateralize” means to (a)  pledge and deposit with or deliver to the Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as collateral for the L/C Obligations, cash or deposit account balances in an amount equal to one hundred three percent (103%) of the Outstanding Amount of all L/C Obligations (other than L/C Obligations with respect to Letters of Credit denominated in a currency other than Dollars, which L/C Obligations shall be Cash Collateralized in an amount equal to one hundred fifteen percent (115%) of the Outstanding Amount of such L/C Obligations) pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent and the L/C Issuer (which documents are hereby Consented to by the Lenders) or (b) cause all outstanding L/C Obligations (other than L/C Obligations that have been previously cash collateralized as described in clause (a) above) to be supported by standby letters of credit in an aggregate Stated Amount equal to one hundred and three percent (103%) of the Outstanding Amount of all L/C Obligations (other than L/C Obligations with respect to Letters of Credit denominated in a currency other than Dollars, which L/C Obligations shall be supported by standby letters of credit in an aggregate Stated Amount equal to one hundred and fifteen percent (115%) of the Outstanding Amount of such L/C Obligations); provided, that, the issuer of such back-stop letter of credit shall be reasonably acceptable to the Administrative Agent and the L/C Issuer. Derivatives of such term have corresponding meanings.

Cash Dominion Event” means either (a) the occurrence and continuance of any Specified Event of Default, or (b) the failure of the Borrowers to maintain Excess Availability in an amount equal to or greater than the greater of (i) an amount equal to fifteen percent (15%) of the Borrowing Base (calculated without giving effect to the Term Loan Reserve) for five (5) consecutive Business Days, or (ii) an amount equal to twelve and one-half percent (12.5%) of the Borrowing Base (calculated without giving effect to the Term Loan Reserve) at any time.  For purposes of this Agreement, the occurrence of a Cash Dominion Event shall be deemed continuing until the earlier of: (A) the date of the waiver by Administrative Agent of such Specified Event of Default, (B) if the Cash Dominion Event arises as a result of the Borrowers’ failure to achieve Excess Availability as required hereunder, until such date as Excess Availability has exceeded fifteen percent (15%) of the Borrowing Base (calculated without giving effect to the Term Loan Reserve) for thirty (30) consecutive days or (C) such date on which the Administrative Agent states that the applicable Cash Dominion Event shall no longer be deemed to be continuing for purposes of this Agreement; provided, that, a Cash Dominion Event shall be deemed continuing for a period of six (6) consecutive months (even if a Specified Event of Default is no longer continuing and/or Excess Availability exceeds the required amount for thirty (30) consecutive Business Days) at any time a Cash Dominion Event occurs after a Cash Dominion Event has occurred and been discontinued on four (4) occasions after November 1, 2012.the Amendment No. 3 Effective Date.  The termination of a Cash Dominion Event as provided herein shall in no way limit, waive or delay the occurrence of a subsequent Cash Dominion Event in the event that the conditions set forth in this definition again arise.

 

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Cash Equivalents” means

(a)  readily marketable obligations issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof having maturities of not more than 360 days from the date of acquisition thereof; provided, that, the full faith and credit of the United States of America is pledged in support thereof;

(b)  commercial paper issued by any Person organized under the laws of any state of the United States of America and rated at least “Prime-1” (or the then equivalent grade) by Moody’s or at least “A-1” (or the then equivalent grade) by S&P, in each case with maturities of not more than 180 days from the date of acquisition thereof;

(c)  time deposits with, or insured certificates of deposit or bankers’ acceptances of, any commercial bank that (i) (A) is a Lender or (B) is organized under the laws of the United States of America, any state thereof or the District of Columbia or is the principal banking subsidiary of a bank holding company organized under the laws of the United States of America, any state thereof or the District of Columbia, and is a member of the Federal Reserve System, (ii) issues (or the Lead Borrower of which issues) commercial paper rated as described in clause (c) of this definition and (iii) has combined capital and surplus of at least $1,000,000,000, in each case with maturities of not more than 180 days from the date of acquisition thereof;

(d)  fully collateralized repurchase agreements with a term of not more than thirty (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 (c) above or with any primary dealer and having a market value at the time that such repurchase agreement is entered into of not less than one hundred percent (100%) of the repurchase obligation of such counterparty entity with whom such repurchase agreement has been entered into; and

(e)  Investments, classified in accordance with GAAP as current assets of the Loan Parties, in any money market fund, mutual fund, or other investment companies that are registered under the Investment Company Act of 1940, as amended, which are administered by financial institutions that have the highest rating obtainable from either Moody’s or S&P, and which invest solely in one or more of the types of securities described in clauses (a) through (d) above.

Cash Management Reserves” means such reserves as the Administrative Agent, from time to time, determines in its Permitted Discretion as being appropriate to reflect the reasonably anticipated liabilities and obligations of the Loan Parties with respect to Cash Management Services then provided or outstanding.

 

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Cash Management Services” means any one or more of the following types or services or facilities provided to any Loan Party by the Administrative Agent or any of its Affiliates: (a) ACH transactions, (b) cash management services, including, without limitation, controlled disbursement services, treasury, depository, overdraft, and electronic funds transfer services, (c) foreign exchange facilities, (d) credit or debit cards, (e) credit card processing services, and (f) purchase cards.

Casualty Event” means casualty or other insured damage to, or any taking under power of eminent domain or by condemnation or similar proceeding of (and payments in lieu thereof), any property or asset of a Loan Party.

CERCLA” means the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § 9601 et seq.

CERCLIS” means the Comprehensive Environmental Response, Compensation, and Liability Information System maintained by the United States Environmental Protection Agency.

CFC” means a Person that is a controlled foreign corporation under Section 957 of the Code.

Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority.  For purposes of this definition, the Dodd-Frank Wall Street Reform and Consumer Protection Act and all rules, regulations, orders, requests, guidelines or directives thereunder or in connection therewith and all requests, rules, guidelines or directives concerning capital adequacy known as “Basel III” and promulgated either by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or by the United States or foreign regulatory authorities pursuant thereto are deemed to have been adopted and gone into effect after the date of this Agreement.

Change of Control” means an event or series of events by which:

(a)  prior to the consummation of the Permitted Orchestra Merger, any “any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (“Exchange Act”),1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act, of 1934, except that a person or group shall be deemed to have "beneficial ownership" of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an "option right")), directly or indirectly, of fifty percent (50%) or more of the Equity Interests of the Lead Borrower entitled to vote generally in the election of directors (or equivalent governing body) of the total voting power of all outstanding shares of the Lead Borrower entitled to vote for members of the board of directors or equivalent governing body of

 

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the Lead Borrower on a fully-diluted basis (and taking into account all such Equity Interests that such "person" or "group" has the right to acquire pursuant to any option right), except pursuant to the Permitted Orchestra Merger, or ; or

(i)upon the consummation of the Permitted Orchestra Merger and at any time thereafter:

(ii)Parent shall fail to own, directly or indirectly, one hundred percent (100%) of the Equity Interests of the Lead Borrower entitled to vote generally in the election of members of the board of directors (or equivalent governing body) of the Lead Borrower; or

(b)  any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than Permitted Holders becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a “person” or “group” shall be deemed to have “beneficial ownership” of all Equity Interests that such “person” or “group” has the  right to acquire, pursuant to any option right, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of more than fifty-one percent (51%) of the Equity Interests of Parent entitled to vote in the election of members of the board of directors (or equivalent governing body) of Parent; or

(b)  (c)   any "change in control” with respect to the Lead Borrower" or similar event, as defined in the documents evidencing the Permitted Term Loan Indebtedness shall have occurred; or

(c)  (d)   the Lead Borrower fails at any time to own, directly or indirectly, one hundred percent (100%) of the Equity Interests of each other Loan Party free and clear of all Liens (other than Liens in favor of the Administrative Agent and Permitted Encumbrances of the type described in clauses (a), (e) and (r) of the definition of such term), except where such failure is as a result of a transaction permitted by the Loan Documents.

Code” means the Internal Revenue Code of 1986, and the regulations promulgated thereunder, as in effect from time to time.

Collateral” means any and all “Collateral” or “Mortgaged Property” as defined in any applicable Security Document and all other property that is or is intended under the terms of the Security Documents to be subject to Liens in favor of the Administrative Agent.

Collateral Access Agreement” means an agreement reasonably satisfactory in form and substance to the Administrative Agent executed by, as the case may be, (a) a bailee or other Person in possession of Collateral, and (b) any landlord of Real Estate leased by any Loan Party, pursuant to which such Person (i) acknowledges the Administrative Agent’s Lien on the Collateral, (ii) releases or subordinates such Person’s Liens in the Collateral held by such Person or located on such Real Estate, (iii) agrees to provide the Administrative Agent with access to the Collateral held by such bailee or other Person or located in or on such Real Estate, (iv) as to any landlord, provides the Administrative Agent with a reasonable time to sell and dispose of the Collateral from such Real Estate, and (v) makes such other agreements with the Administrative Agent as it may reasonably require.

 

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Combined Loan Caps” means, on any date of determination, the sum of (a) the Loan Cap, and (b) the lesser of the (i) the outstanding aggregate principal amount of the Term Loans, and (ii) Term Loan Borrowing Base.

Commercial Letter of Credit” means any Letter of Credit issued for the purpose of providing the primary payment mechanism in connection with the purchase of any materials, goods or services by a Loan Party in the ordinary course of business of such Loan Party.

Commercial Letter of Credit Agreement” means the Commercial Letter of Credit Agreement relating to the issuance of a Commercial Letter of Credit in the form from time to time in use by the L/C Issuer.  

Commitment” means, as to each Lender, its obligation to (a) make Committed Loans to the Borrowers pursuant to Section 2.01, (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

Committed Borrowing” means a borrowing consisting of simultaneous Committed Loans of the same Type and, in the case of LIBO Rate Loans, having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

Committed Loan” means a Revolving Loan.

Committed Loan Notice” means a notice of (a) a Committed Borrowing, (b) a conversion of Committed Loans from one Type to the other, or (c) a continuation of LIBO Rate Loans, pursuant to 2.01(a), which, if in writing, shall be substantially in the form of Exhibit A.

Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

Compliance Certificate” means a certificate substantially in the form of Exhibit D.

Concentration Account” means the deposit account of Lead Borrower in which funds of any Loan Party from one or more Blocked Accounts are from time to time deposited. As of the Restatement Effective Date, the Concentration Account is the deposit account identified as the Concentration Account on Schedule 5.21(a).

Consent” means actual consent given by a Lender from whom such consent is sought; or the passage of seven (7) Business Days from receipt of written notice to a Lender from the Administrative Agent of a proposed course of action to be followed by the Administrative Agent without such Lender’s giving the Administrative Agent written notice of that Lender’s objection to such course of action.

 

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Consolidated” means, when used to modify a financial term, test, statement, or report of a Person, the application or preparation of such term, test, statement or report (as applicable) based upon the consolidation, in accordance with GAAP, of the financial condition or operating results of such Person and its Subsidiaries.

Contractual Obligation” means, as to any Person, any provision of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise.  “Controlling” and “Controlled” have meanings correlative thereto.

Control Agreement” shall have its meaning as set forth in the Security Agreement.

Controlling Shareholder” means Yeled Invest S.à r.l., a société à responsabilité limitée, organized under the laws of Luxembourg.

Cost” means the lower of cost or market value of Inventory, based upon the Borrowers’ accounting practices, known to the Administrative Agent, which practices are in effect on the Restatement Effective Date as such calculated cost is determined from invoices received by the Borrowers, the Borrowers’ purchase journals or the Borrowers’ stock ledger, and the term “Cost” in any event shall include freight costs and duties associated with the transportation of Inventory to distribution points.  “Cost” does not include inventory capitalization costs or other non -purchase price charges used in the Borrowers’ calculation of cost of goods sold.

Credit Card Agreements” shall mean all agreements now or hereafter entered into by any Borrower or for the benefit of any Borrower, in each case with any Credit Card Issuer or any Credit Card Processor with respect to sales transactions involving credit card or debit card purchases, including, but not limited to, the agreements set forth on Schedule 5.21(b) hereto.

Credit Card Issuer” shall mean any person (other than a Loan Party) who issues or whose members issue credit cards, including, without limitation, MasterCard or VISA bank credit or debit cards or other bank credit or debit cards issued through World Financial Network National Bank, MasterCard International, Inc., Visa, U.S.A., Inc. or Visa International and American Express, Discover, Diners Club, Carte Blanche and other non-bank credit or debit cards, including, without limitation, credit or debit cards issued by or through American Express Travel Related Services Company, Inc., Novus Services, Inc., PayPal and other issuers approved by the Administrative Agent.

Credit Card Notifications” has the meaning provided in Section 6.13(a)(ii).

Credit Card Processor” shall mean any servicing or processing agent or any factor or financial intermediary who facilitates, services, processes or manages the credit authorization, billing transfer and/or payment procedures with respect to any Borrower’s sales transactions involving credit card or debit card purchases by customers using credit cards or debit cards issued by any Credit Card Issuer.

 

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Credit Card Receivables” means each “Account” and “Payment Intangible” (as such terms are defined in the UCC) together with all income, payments and proceeds thereof, owed by a major credit or debit card issuer (including, but not limited to, Visa, MasterCard and American Express and such other issuers approved by the Administrative Agent) to a Loan Party resulting from charges by a customer of a Loan Party on credit or debit cards issued by such issuer in connection with the sale of goods by a Loan Party, or services performed by a Loan Party, in each case in the ordinary course of its business.

Credit Extensions” mean each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

Customer Credit Liabilities” means at any time, the aggregate remaining value at such time of (a) outstanding gift certificates and gift cards of any Borrower entitling the holder thereof to use all or a portion of the certificate or gift card to pay all or a portion of the purchase price for any Inventory, (b) outstanding merchandise credits of any Borrower, (c) layaway obligations of any Borrower, and (d) liabilities in connection with frequent shopping programs of any Borrower.

Customer Deposits” means deposits made by customers with respect to the purchase of goods or the performance of services.

Customer List and Marketing Services Agreements” means agreements entered into from time to time by any of the Loan Parties with third parties pursuant to which such Loan Party leases its customer lists or provides marketing services to such third party, including without limitation the agreements listed on Schedule 1.01(a), as such agreements may be amended, modified, replaced, extended or renewed from time to time; Schedule 1.01(a) lists each Customer List and Marketing Services Agreement in respect of which the Receivables owing to the Borrowers in any Fiscal Year exceed $500,000 in the aggregate.

Customer List and Marketing Services Receivables” means all of the Receivables of any Borrower arising from Customer List and Marketing Service Agreements.

Customs Broker Agreement” means an agreement in substantially the form attached hereto as Exhibit F among a Borrower, a customs broker or other carrier, and the Administrative Agent, in which the customs broker or other carrier acknowledges that it has control over and holds the documents evidencing ownership of the subject Inventory for the benefit of the Administrative Agent and agrees, upon notice from the Administrative Agent, to hold and dispose of the subject Inventory solely as directed by the Administrative Agent.

DDA” means each checking, savings or other demand deposit account maintained by any of the Loan Parties.  All funds in each DDA (other than Excluded DDAs) shall be conclusively presumed to be Collateral and proceeds of Collateral and the Administrative Agent and the Lenders shall have no duty to inquire as to the source of the amounts on deposit in any DDA.

DDA Notification” has the meaning provided therefor in Section 6.17(e).

 

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Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect and affecting the rights of creditors generally.

Default” means any event or condition that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Margin, if any, applicable to Base Rate Loans, plus (iii) two percent (2%) per annum; provided, that, with respect to a LIBO Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Margin) otherwise applicable to such Loan plus two percent (2%) per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Margin for Standby Letters of Credit or Commercial Letters of Credit, as applicable, plus two percent (2%) per annum.

Defaulting Lender” means any Lender that (a) has failed to fund any portion of the Committed Loans, participations in L/C Obligations or participations in Swing Line Loans required to be funded by it hereunder within one Business Day of the date required to be funded by it hereunder, (b) has otherwise failed to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one Business Day of the date when due, or (c) has been deemed insolvent or become the subject of a receivership, bankruptcy or insolvency proceeding.

Department Lessor” means a Person (other than a Loan Party) that owns and operates a department or specialty store or other location and licenses space in such store to a Borrower.

Deteriorating Lender” means any Defaulting Lender or any Lender as to which (a) the L/C Issuer or the Swing Line Lender has a good faith belief that such Lender has defaulted in fulfilling its obligations under one or more other syndicated credit facilities, or (b) a Person that Controls such Lender has been deemed insolvent or become the subject of a bankruptcy, insolvency or similar proceeding.

Dilution Reserve” means, for any period, that percentage reasonably determined by the Administrative Agent by (a) dividing  the amount of charge-offs of Eligible Trade Receivables and Eligible Customer Service and Marketing Receivables and returns of goods purchased from the Borrowers during such period which had, at the time of sale, resulted in the creation of an Eligible Trade Receivable or an Eligible Customer Service and Marketing Receivable, by (b) the amount of sales (exclusive of sales and other similar taxes) of the Borrowers during such period and thereafter.

Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction and any sale, transfer, license or other disposition of (whether in one transaction or in a series of transactions) of any property (including, without limitation, any Equity Interests) by any Person (or the granting of any option or other right to do

 

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any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith.

Disqualified Stock” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Loans mature; provided, that, (a) only the portion of such Equity Interests which so matures or is mandatorily redeemable, is so convertible or exchangeable or is so redeemable at the option of the holder thereof prior to such date shall be deemed to be Disqualified Stock and (b) with respect to any Equity Interests issued to any employee or to any plan for the benefit of employees of the Lead Borrower or its Restricted Subsidiaries or by any such plan to such employees, such Equity Interest shall not constitute Disqualified Stock solely because it may be required to be repurchased by the Lead Borrower or one of its Restricted Subsidiaries in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s termination, resignation, death or disability and if any class of Equity Interest of such Person that by its terms authorizes such Person to satisfy its obligations thereunder by delivery of an Equity Interest that is not Disqualified Stock, such Equity Interests shall not be deemed to be Disqualified Stock. Notwithstanding the preceding sentence, any Equity Interest that would constitute Disqualified Stock solely because the holders thereof have the right to require a Loan Party to repurchase such Equity Interest upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock.  The amount of Disqualified Stock deemed to be outstanding at any time for purposes of this Agreement will be the maximum amount that the Lead Borrower and its Restricted Subsidiaries may become obligated to pay upon maturity of, or pursuant to any mandatory redemption provisions of, such Disqualified Stock or portion thereof, plus accrued dividends.

Dollars” and “$” mean lawful money of the United States.

Domestic Holding Company” means any Domestic Subsidiary of the Borrowers that is treated as a disregarded entity for U.S. federal income tax purposes and all of its assets (other than immaterial assets) consist of the ownership of the Equity Interests of one or more CFCs.

Domestic Subsidiary” means any Subsidiary that is organized under the laws of the United States of America, any State thereof or the District of Columbia (excluding, for the avoidance of doubt, any Subsidiary organized under the laws of Puerto Rico or any other territory).

EBITDA Reserve” means a Reserve in the amount of $10,000,000, which Reserve may only be released by the Agent or reduced upon prior written consent of the Required Lenders (as such term is defined in the Term Loan Credit Agreement).Early Termination Fee” has the meaning specified in the Fee Letter.

Eligible Assignee” means (a) a Lender or any of its Affiliates; (b) a bank, insurance company, or company engaged in the business of making commercial loans, which Person, together with its Affiliates, has a combined capital and surplus in excess of $250,000,000; (c) an

 

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Approved Fund; (d) any Person to whom a Lender assigns its rights and obligations under this Agreement as part of an assignment and transfer of such Lender’s rights in and to a material portion of such Lender’s portfolio of asset based credit facilities, and (e) any other Person (other than a natural person) approved by (i) the Administrative Agent, the L/C Issuer and the Swing Line Lender, and (ii) unless an Event of Default has occurred and is continuing, the Lead Borrower (each such approval not to be unreasonably withheld or delayed); provided, that, notwithstanding the foregoing, “Eligible Assignee” shall not include a Loan Party or any of the Loan Parties’ Affiliates or Subsidiaries.

Eligible Credit Card Receivables” means at the time of any determination thereof, each Credit Card Receivable that at all times satisfies the criteria set forth below as determined by the Administrative Agent in its Permitted Discretion and which has been earned by performance and represents the bona fide amounts due to a Borrower from a Credit Card Processor and/or Credit Card Issuer, and in each case originated in the ordinary course of business of such Borrower.  Without limiting the foregoing, in order to be an Eligible Credit Card Receivable, an Account shall indicate no Person other than a Borrower as payee or remittance party.  In determining the amount to be so included, the face amount of an Account shall be reduced by, without duplication, to the extent not reflected in such face amount, (a) the amount of all accrued and actual fees, discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that a Borrower may be obligated to rebate to a customer, a Credit Card Processor, or Credit Card Issuer pursuant to the terms of any agreement or understanding (written or oral)) and (b) the aggregate amount of all cash received in respect of such Account but not yet applied by the Loan Parties to reduce the amount of such Credit Card Receivable.  Except as otherwise determined by the Administrative Agent in its Permitted Discretion, Eligible Credit Card Receivables shall not include any Credit Card Receivable:

(i)which does not constitute an “Account” or “Payment Intangible”(as each is defined in the UCC);

(ii)which is unpaid more than five (5) Business Days after the date of determination of eligibility thereof;

(iii)payable other than in Dollars or Canadian Dollars;

(iv)where such Credit Card Receivable or the underlying contract contravenes any laws, rules or regulations applicable thereto in any material respect, including, rules and regulations relating to truth-in-lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices and privacy or any party to the underlying contract is in violation of any such laws, rules or regulations in any material respect;

(v)which is not a valid, legally enforceable obligation of the applicable Credit Card Issuer or Credit Card Processor with respect thereto;

(vi)(A) which is disputed, is with recourse due to the creditworthiness of the cardholder, or with respect to which a claim, chargeback, offset, deduction or counterclaim, dispute or other defense has been asserted (to the extent of such claim, chargeback,

 

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offset, deduction or counterclaim, dispute or other defense); or (B) to the extent to which it is subject to any present, or contingent (or any facts (i) exist to the knowledge of Administrative Agent or any Loan Party, or (ii) have been disclosed in the course of any field examination or otherwise, which are the basis for any future) claim, chargeback, offset, deduction or counterclaim, dispute or other defense on the part of an Account Debtor;

(vii)with respect to which a Borrower does not have good, valid and marketable title thereto,

(viii)that is not subject to a perfected first priority security interest in favor of the Administrative Agent or that is subject to any other Lien, other than Liens permitted under clauses (a), (e), (o) and (r) of the definition of Permitted Encumbrances and any other Liens with respect thereto permitted under this Agreement that are subject to an intercreditor agreement in form and substance reasonably satisfactory to Administrative Agent between the holder of such Lien and Administrative Agent;

(ix)which does not conform to all representations, warranties or other provisions in the Loan Documents relating to Credit Card Receivables in all material respects, except (A) to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and (B) in the case of any representation and warranty qualified by “materiality”, “Material Adverse Effect” or similar language, they shall be true and correct in all respects;

(x)as to which the Credit Card Processor or Credit Card Issuer has the right under certain circumstances to require a Loan Party to repurchase such Credit Card Receivable from such Credit Card Processor or Credit Card Issuer, as the case may be;

(xi)is due from a Credit Card Issuer or Credit Card Processor of the applicable credit card which is the subject of any proceedings under a Debtor Relief Law;

(xii)which is evidenced by “chattel paper” or an “instrument” of any kind unless such “chattel paper” or “instrument” is in the possession of the Administrative Agent, and to the extent necessary or appropriate, endorsed to the Administrative Agent; or

(xiii)which the Administrative Agent determines in its Permitted Discretion to be uncertain of collection or which do not meet such other eligibility criteria for Credit Card Receivables as the Administrative Agent may determine in its Permitted Discretion.

Any Credit Card Receivables that are not Eligible Credit Card Receivables shall nevertheless be part of the Collateral.

Eligible In-Transit Inventory” means, as of any date of determination thereof, without duplication of other Eligible Inventory, In-Transit Inventory:

(a)  Which has been shipped from a foreign location for receipt by a Borrower, but which has not yet been delivered to such Borrower, which In-Transit Inventory has been in transit for sixty (60) days or less from the date of shipment of such Inventory;

 

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(b)  For which the purchase order is in the name of a Borrower and title and risk of loss has passed to such Borrower;

(c)  For which an Acceptable Document of Title has been issued, and in each case as to which the Administrative Agent has control (as defined in the UCC) over the documents of title which evidence ownership of the subject Inventory (such as, if requested by the Administrative Agent, by the delivery of a Customs Broker Agreement with a carrier or freight forwarder);

(d)  Which is insured in accordance with the terms of this Agreement to the reasonable satisfaction of the Administrative Agent (including, without limitation, marine cargo insurance);

(e)  the Foreign Vendor with respect to such In-Transit Inventory is an Approved Foreign Vendor;

(f)  For which payment of the purchase price has been made by any Borrower or the purchase price is supported by a Commercial Letter of Credit; and

(g)  Which otherwise would constitute Eligible Inventory;

provided, that, the Administrative Agent may, in its discretion, exclude any particular Inventory from the definition of “Eligible In-Transit Inventory” in the event the Administrative Agent determines that such Inventory is subject to any Person’s right or claim which is (or is capable of being) senior to, or pari passu with, the Lien of the Administrative Agent (such as, without limitation, a right of stoppage in transit) or may otherwise adversely impact the ability of the Administrative Agent to realize upon such Inventory.

Any Inventory that is not Eligible In-Transit Inventory shall nevertheless be part of the Collateral.

Eligible Inventory” means, as of the date of determination thereof, without duplication, (a) Eligible In-Transit Inventory, and (b) items of Inventory of a Borrower that are finished goods, merchantable and readily saleable to the public in the ordinary course of the Borrowers’ business deemed by the Administrative Agent in its Permitted Discretion to be eligible for inclusion in the calculation of the Borrowing Base, in each case that, except as otherwise agreed by the Administrative Agent, (i) complies with each of the representations and warranties respecting Inventory made by the Borrowers in the Loan Documents (except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and  except in the case of any such representation and warranty qualified by  “materiality”, “Material Adverse Effect” or similar language, which shall be true and correct in all respects), and (ii) is not excluded as ineligible by virtue of one or more of the criteria set forth below.  Except as otherwise agreed by the Administrative Agent, in its Permitted Discretion, the following items of Inventory shall not be included in Eligible Inventory:

(A)Inventory that is not solely owned by a Borrower or a Borrower does not have good and valid title thereto;

 

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(B)Inventory that is leased by or is on consignment to a Borrower or which is consigned by a Borrower to a Person which is not a Loan Party;

(C)Inventory (other than Eligible In-Transit Inventory) that is not located in the United States of America (excluding territories or possessions of the United States) and Canada at a location that is owned or leased by a Borrower, except (i) Inventory in transit between such owned or leased locations, or (ii) to the extent that the Borrowers have furnished the Administrative Agent with (A) any UCC or PPSA financing statements or other documents that the Administrative Agent may determine in its Permitted Discretion to be necessary to perfect its security interest in such Inventory at such location, and (B) a Collateral Access Agreement executed by the Person owning any such location on terms reasonably acceptable to the Administrative Agent unless the Administrative Agent has established an Availability Reserve with respect to such location;

(D)Inventory that is located in a distribution center leased by a Borrower unless the applicable lessor has delivered to the Administrative Agent a Collateral Access Agreement or the Administrative Agent has established an Availability Reserve with respect to such distribution center;

(E)Inventory that is comprised of goods which (i) are damaged, defective, “seconds,” or otherwise unmerchantable, (ii) are to be returned to the vendor, (iii) are obsolete or slow moving, or custom items, work in process, raw materials, or that constitute spare parts, promotional, marketing, packaging and shipping materials or supplies used or consumed in a Borrower’s business, (iv) are seasonal in nature and which have been packed away for sale in the subsequent season, except in the ordinary course of business of such Borrower, (v) are  not in material compliance with all standards imposed by any Governmental Authority having regulatory authority over such Inventory, its use or sale, or (vi) are bill and hold goods;

(F)Inventory that is not subject to a perfected first priority security interest in favor of the Administrative Agent or that is subject to any other Lien, other than Liens permitted under clauses (a), (b), (p) and (r) of the definition of Permitted Encumbrances and any other Liens with respect thereto permitted under this Agreement that are subject to an intercreditor agreement in form and substance reasonably satisfactory to Administrative Agent between the holder of such Lien and Administrative Agent;

(G)Inventory that consists of samples, labels, bags, packaging, and other similar non-merchandise categories;

(H)Inventory that is not insured in compliance with the provisions of Section 5.10 hereof;

(I)Inventory that has been sold but not yet delivered or as to which a Borrower has accepted a deposit;

(J)Inventory that is subject to any licensing, patent, royalty, trademark, trade name or copyright agreement with any third party (1) from which any Borrower or any of its Restricted Subsidiaries has received notice of a dispute in respect of any such agreement, provided, that, only Inventory which is the subject of such dispute shall be deemed ineligible by

 

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Administrative Agent in its Permitted Discretion or (2) unless Administrative Agent determines in its Permitted Discretion that it may sell or otherwise dispose of such Inventory without (a) infringing the rights of such licensor, (b) violating any contract with such licensor, or (c) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement;

(K)Inventory located in a Leased Department in the event that the Leased Department Agreement with respect to such location, permits the applicable Borrower to file a UCC  or PPSA financing statement against the Department Lessor, evidencing Borrower’s ownership of such Inventory and Borrower fails to file and maintain such UCC and PPSA Financing Statements;

(L)Inventory acquired in a Permitted Acquisition or which is not of the type usually sold in the ordinary course of the Borrowers’ business, unless and until the Administrative Agent has completed or received (i) an appraisal of such Inventory from appraisers reasonably satisfactory to the Administrative Agent and establishes an Inventory Advance Rate and Inventory Reserves (if applicable) therefor, and otherwise agrees that such Inventory shall be deemed Eligible Inventory, and (ii) such other due diligence as the Administrative Agent may require, all of the results of the foregoing to be reasonably satisfactory to the Administrative Agent (provided, that, it is agreed that so long as the Administrative Agent has received at least forty-five (45) days prior notice of such Permitted Acquisition and the Loan Parties reasonably cooperate (and cause the Person being acquired to reasonably cooperate) with the Administrative Agent, the Administrative Agent shall use reasonable efforts to complete such due diligence, engage a third party appraiser and complete such appraisal on or prior to the closing date of such Permitted Acquisition).

Any Inventory that is not Eligible Inventory shall nevertheless be part of the Collateral.

Eligible LC Inventory” shall mean Inventory that would otherwise be Eligible Inventory (other than for its location) that as to which: (a) the Inventory is purchased with and subject to a Letter of Credit, (b) the Inventory is then in transit (whether by vessel, air or land) from a location outside of the continental United States of America to a location permitted hereunder and for which Administrative Agent shall have received such evidence thereof as Administrative Agent may require, (c) the title of the Inventory has passed to, and such Inventory is owned by, a Borrower and for which Administrative Agent shall have received such evidence thereof as Administrative Agent may require, (d) Administrative Agent has received each of the following: (i) a Customs Broker Agreement, duly authorized, executed and delivered by the Customs Broker handling the shipping and delivery of such Inventory, (ii) a copy of the certificate of marine cargo insurance in connection therewith in which it has been named as an additional insured and loss payee in a manner reasonably acceptable to Administrative Agent and (iii) a copy of the invoice and manifest with respect thereto, (e) the Inventory is either (A) subject to a negotiable bill of lading: (1) that is consigned to a Borrower (unless and until such time as Administrative Agent shall require that the same be consigned to Administrative Agent, then thereafter, that is consigned to Administrative Agent either directly or by means of endorsements), (2) that was issued by the carrier in respect of such Inventory and (3) is either in the possession of the Customs Broker or the subject of a telefacsimile copy that Administrative Agent has received from the issuer of the Letter of Credit Accommodation and as to which Administrative Agent has also received confirmation from such issuer that such document is in

 

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transit to Administrative Agent or a Customs Broker or (B) subject to a negotiable cargo receipt and is not the subject of a bill of lading (other than a negotiable bill of lading consigned to, and in the possession of a consolidator or Administrative Agent, or their respective agents) and such negotiable cargo receipt is (1) consigned to a Borrower  (unless and until such time as Administrative Agent shall require that the same be consigned to Administrative Agent, then thereafter, that is consigned to Administrative Agent either directly or by means of endorsements), (2) issued by a consolidator in respect of such Inventory and (3) either in the possession of Administrative Agent or a Customs Broker or the subject of a telefacsimile copy that Administrative Agent has received from the issuer of the Letter of Credit Accommodation and as to which Administrative Agent has also received a confirmation from such issuer that such document is in transit to Administrative Agent or a Customs Broker.

Any Inventory that is not Eligible LC Inventory shall nevertheless be part of the Collateral.

Eligible Receivables” means  (x) Customer List and Marketing Services Receivables owing to any Borrower or (y) Leased Department Receivables owing to any Borrower, in each case, deemed by the Administrative Agent in its discretion to be eligible for inclusion in the calculation of the Borrowing Base  that satisfy the following criteria at the time of creation and continues to meet the same at the time of such determination: such Customer List and Marketing Receivable or Leased Department Receivable, as the case may be  (i) has been earned by performance and represents the bona fide amounts due to a Borrower from an Account Debtor or a Department Lessor, as the case may be, and in each case originated in the ordinary course of business of such Borrower, and (ii) in each case is acceptable to the Administrative Agent in its Permitted Discretion, and is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (A) through (V) below.  Without limiting the foregoing, to qualify as an Eligible Receivable, such Customer List and Marketing Receivable or Leased Department Receivable, as the case may be shall indicate no Person other than a Borrower as payee or remittance party.  In determining the amount to be so included, the face amount of such Receivable shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that a Borrower may be obligated to rebate to a customer pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by the Borrowers to reduce the amount of such Eligible Receivable.  Except as otherwise agreed by the Administrative Agent, any such Customer List and Marketing Receivable or Leased Department Receivable, as the case may be included within any of the following categories shall not constitute an Eligible Receivable:

(A)any Customer List and Marketing Receivable not evidenced by an invoice, or (ii) any Leased Department Receivable that is not reported to the satisfaction of Administrative Agent in its Permitted Discretion;

(B)(1) if arising under clause (x) above, that have been outstanding for more than ninety (90) days from the date of sale or more than sixty (60) days past the due date or (2) if arising under clause (y) above, that have been outstanding for more than thirty (30) days from the date of sale or more than fifteen (15) days past the due date;

 

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(C)owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible in clause (B) above;

(D) with respect to which a Borrower does not have good, valid and marketable title thereto

(E)that is not subject to a perfected first priority security interest in favor of the Administrative Agent or that is subject to any other Lien, other than Liens permitted under clauses (a), (e), and (r) of the definition of Permitted Encumbrances and any other Liens with respect thereto permitted under this Agreement that are subject to an intercreditor agreement in form and substance reasonably satisfactory to Administrative Agent between the holder of such Lien and Administrative Agent;

(F)which are disputed or with respect to which a claim, counterclaim, offset or chargeback has been asserted, but only to the extent of such dispute, counterclaim, offset or chargeback;

(G)which arise out of any sale made not in the ordinary course of business, made on a basis other than upon credit terms usual to the business of the Borrowers or are not payable in Dollars or Canadian Dollars;

(H)[Reserved];

(I)which are owed by any Affiliate or any employee of a Loan Party;

(J)for which all material consents, approvals or authorizations of, or registrations or declarations with any Governmental Authority required to be obtained, effected or given in connection with the performance of such Account by the Account Debtor or in connection with the enforcement of such Account by the Administrative Agent have not been duly obtained, effected or given and are not in full force and effect;

(K)due from an Account Debtor which is the subject of any  proceeding under any Debtor Relief Laws, has had a trustee or receiver appointed for all or a substantial part of its property, has made an assignment for the benefit of creditors or has suspended its business;

(L)due from any Governmental Authority except to the extent that the subject Account Debtor is the federal government of the United States of America and has complied with the Federal Assignment of Claims Act of 1940 and any similar state legislation or is the federal government of Canada and has complied with the Financial Administration Act (Canada) and any similar provincial legislation;

(M)(1) owing from any Person that is also a supplier to or creditor of a Loan Party or any of its Restricted Subsidiaries unless such Person has waived any right of setoff in a manner acceptable to the Administrative Agent in its Permitted Discretion or (2) representing any manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling a Loan Party or any of its Restricted Subsidiaries to discounts on future purchase therefrom;

 

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(N)arising out of sales on a bill-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis or subject to any right of return, set off or charge back;

(O)arising out of sales to Foreign Account Debtors other than those amounts arising out of sales to Foreign Account Debtors in Approved Foreign Jurisdictions (provided, that, the maximum aggregate Dollar amount of all such Receivables owing by all Account Debtors located in Approved Foreign Jurisdictions and deemed Eligible Receivables and Eligible Trade Receivables included in the Borrowing Base at any time shall not exceed $1,000,000 or such greater amount as the Administrative Agent shall otherwise agree in its Permitted Discretion), provided, further, that if such Foreign Account Debtor (i) is not located in an Approved Foreign Jurisdiction (or the maximum amount which may be included in the Borrowing Base as set forth above would be exceeded whether as a result of the Receivables owing by one or more Foreign Account Debtors), or (ii) is the government of any foreign country or sovereign state, or of any state or public corporation or other instrumentality thereof,  then in each case, such Receivable shall be deemed eligible pursuant to this clause (O) in the event that  either (1) the Receivable is supported by an irrevocable letter of credit reasonably satisfactory to Administrative Agent in its Permitted Discretion (as to form, substance (including amount), and issuer or domestic confirming bank), or (2) the Receivable is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to Administrative Agent determined in its Permitted Discretion; provided, that, if such Receivable is owed by a Foreign Account Debtor in an Approved Foreign Jurisdiction without a letter of credit or credit insurance in support of such Receivable, then promptly upon Administrative Agent’s request, each Borrower shall execute and deliver, or cause to be executed and delivered, such other agreements, documents and instruments as may be required by Administrative Agent in its Permitted Discretion to perfect the security interests of Administrative Agent in those Accounts of Foreign Account Debtors and take or cause to be taken such other and further actions as Administrative Agent may request to enable Administrative Agent as secured party with respect thereto to collect such Accounts under such applicable laws; notwithstanding the foregoing, Borrower may request that Administrative Agent consider the inclusion of Receivables owed by Foreign Account Debtors which do not meet the eligibility criteria set forth in this clause (O), and Administrative Agent agrees that it shall consider the eligibility of those Receivables, on a case by case basis in its Permitted Discretion;

(P)payable other than in Dollars or Canadian Dollars or that are otherwise on terms other than those normal and customary in the Loan Parties’ business;

(Q)evidenced by a promissory note or other instrument;

(R)consisting of amounts due from vendors as rebates or allowances;

(S)which are in excess of the credit limit for such Account Debtor established by the Loan Parties in the ordinary course of business and consistent with practices of the Loan Parties in effect on November 1, 2012the Amendment No. 3 Effective Date;

(T)which include extended payment terms (datings) beyond those generally furnished to other Account Debtors in the ordinary course of business;

 

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(U)which constitute Credit Card Receivables or Accounts which constitute Eligible Trade Receivables;

(V)with respect to which there exists a material breach under the applicable Customer List and Marketing Agreement or Leased Department Agreement (or such agreement has been terminated) pursuant to which such Receivable was created;

(W)which the Administrative Agent determines in its Permitted Discretion to be uncertain of collection or which do not meet such other eligibility criteria for Eligible Credit Card Receivables as the Administrative Agent may determine in its Permitted Discretion.  

Any Receivables that are not Eligible Receivables shall nevertheless be part of the Collateral.

Eligible Trade Receivables” means Accounts created by any Borrower arising out of the sale of finished goods Inventory other than to retail customers deemed by the Administrative Agent in its discretion to be eligible for inclusion in the calculation of the Borrowing Base arising from the sale of the Borrowers’ Inventory (other than those consisting of Credit Card Receivables, Customer and Marketing Services Receivables, and Leased Department Receivables) that satisfy the following criteria at the time of creation and continue to meet the same at the time of such determination: such Account (a) has been earned by performance and represent the bona fide amounts due to a Borrower from an Account Debtor, and in each case originated in the ordinary course of business of such Borrower, and (b) in each case is acceptable to the Administrative Agent in its Permitted Discretion, and is not ineligible for inclusion in the calculation of the Borrowing Base pursuant to any of clauses (a) through (s) below.  Without limiting the foregoing, to qualify as an Eligible Trade Receivable, an Account shall indicate no Person other than a Borrower as payee or remittance party.  In determining the amount to be so included, the face amount of an Account shall be reduced by, without duplication, to the extent not reflected in such face amount, (i) the amount of all accrued and actual discounts, claims, credits or credits pending, promotional program allowances, price adjustments, finance charges or other allowances (including any amount that a Borrower may be obligated to rebate to a customer pursuant to the terms of any agreement or understanding (written or oral)) and (ii) the aggregate amount of all cash received in respect of such Account but not yet applied by the Borrowers to reduce the amount of such Eligible Trade Receivable.  Except as otherwise agreed by the Administrative Agent, any Account included within any of the following categories shall not constitute an Eligible Trade Receivable:

(A)that are not evidenced by an invoice;

(B)that have been outstanding for more than ninety (90) days from the date of sale or more than sixty (60) days past the due date;

(C)owed by an Account Debtor (or its Affiliates) where 50% or more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed ineligible in clause (B), above.

(D)with respect to which a Borrower does not have good, valid and marketable title thereto;

 

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(E)that is not subject to a perfected first priority security interest in favor of the Administrative Agent or that is subject to any other Lien, other than Liens permitted under clauses (a), (e), and (r) of the definition of Permitted Encumbrances and any other Liens with respect thereto permitted under this Agreement that are subject to an intercreditor agreement in form and substance reasonably satisfactory to Administrative Agent between the holder of such Lien and Administrative Agent;

(F)which are disputed or with respect to which a claim, counterclaim, offset or chargeback has been asserted, but only to the extent of such dispute, counterclaim, offset or chargeback;

(G)which arise out of any sale made not in the ordinary course of business, made on a basis other than upon credit terms usual to the business of the Borrowers or are not payable in Dollars or Canadian Dollars;

(H)[Reserved];

(I)which are owed by any Affiliate or any employee of a Loan Party;

(J)for which all material consents, approvals or authorizations of, or registrations or declarations with any Governmental Authority required to be obtained, effected or given in connection with the performance of such Account by the Account Debtor or in connection with the enforcement of such Account by the Administrative Agent have not been duly obtained, effected or given and are not  in full force and effect;

(K)due from an Account Debtor which is the subject of any proceeding under any Debtor Relief Laws, has had a trustee or receiver appointed for all or a substantial part of its property, has made an assignment for the benefit of creditors or has suspended its business;

(L)due from any Governmental Authority except to the extent that the subject Account Debtor is the federal government of the United States of America and has complied with the Federal Assignment of Claims Act of 1940 and any similar state legislation and has complied with the Federal Assignment of Claims Act of 1940 and any similar state legislation or is the federal government of Canada and has complied with the Financial Administration Act (Canada) and any similar provincial legislation;

(M)(1) owing from any Person that is also a supplier to or creditor of a Loan Party or any of its Restricted Subsidiaries unless such Person has waived any right of setoff in a manner acceptable to the Administrative Agent in its Permitted Discretion or (2) representing any manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling a Loan Party or any of its Restricted Subsidiaries to discounts on future purchase therefrom;

(N)arising out of sales on a bill-and-hold, guaranteed sale, sale-or-return, sale on approval or consignment basis or subject to any right of return, set off or charge back;

 

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(O)arising out of sales to Foreign Account Debtors other than those amounts arising out of sales to Foreign Account Debtors in Approved Foreign Jurisdictions (provided, that, the maximum aggregate Dollar amount of all such Receivables owing by all Account Debtors located in Approved Foreign Jurisdictions and deemed Eligible Receivables and Eligible Trade Receivables included in the Borrowing Base at any time shall not exceed $1,000,000 or such greater amount as the Administrative Agent shall otherwise agree in its Permitted Discretion), provided, further, that if such Foreign Account Debtor (i) is not located in an Approved Foreign Jurisdiction (or the maximum amount which may be included in the Borrowing Base as set forth above would be exceeded whether as a result of the Receivables owing by one or more Foreign Account Debtors), or (ii) is the government of any foreign country or sovereign state, or of any state or public corporation or other instrumentality thereof,  then in each case, such Receivable shall be deemed eligible pursuant to this clause (O) in the event that  either (1) the Receivable is supported by an irrevocable letter of credit reasonably satisfactory to Administrative Agent in its Permitted Discretion (as to form, substance (including amount), and issuer or domestic confirming bank), or (2) the Receivable is covered by credit insurance in form, substance, and amount, and by an insurer, satisfactory to Administrative Agent determined in its Permitted Discretion; provided, that, if such Receivable is owed by a Foreign Account Debtor in an Approved Foreign Jurisdiction without a letter of credit or credit insurance in support of such Receivable, then promptly upon Administrative Agent’s request, each Borrower shall execute and deliver, or cause to be executed and delivered, such other agreements, documents and instruments as may be required by Administrative Agent in its Permitted Discretion to perfect the security interests of Administrative Agent in those Accounts of Foreign Account Debtors and take or cause to be taken such other and further actions as Administrative Agent may request to enable Administrative Agent as secured party with respect thereto to collect such Accounts under such applicable laws; notwithstanding the foregoing, Borrower may request that Administrative Agent consider the inclusion of Receivables owed by Foreign Account Debtors which do not meet the eligibility criteria set forth in this clause (O), and Administrative Agent agrees that it shall consider the eligibility of those Receivables, on a case by case basis in its Permitted Discretion;

(P)[Reserved];

(Q)evidenced by a promissory note or other instrument;

(R)consisting of amounts due from vendors as rebates or allowances;

(S)which are in excess of the credit limit for such Account Debtor established by the Loan Parties in the ordinary course of business and consistent with  practices of the Loan Parties in effect on November 1, 2012the Amendment No. 3 Effective Date;

(T)which include extended payment terms (datings) beyond those generally furnished to other Account Debtors in the ordinary course of business;

(U)which constitute Credit Card Receivables, Leased Department Receivables or Customer List and Marketing Agreement Receivables or

 

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(V)which the Administrative Agent determines in its Permitted Discretion to be uncertain of collection or which do not meet such other eligibility criteria for Eligible Trade Receivables as the Administrative Agent may determine in its Permitted Discretion.  

Any Receivables that are not Eligible Trade Receivables shall nevertheless be part of the Collateral.

Environmental Laws” means any and all Federal, provincial, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution or the protection of human health or the environment (including ambient air, surface water, ground water, land surface, or subsurface strata), or emissions, discharges, releases, or threatened releases of, or the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of (i) any hazardous substance, hazardous material, hazardous waste, regulated substance, or toxic substance and (ii) any chemicals, pollutants, contaminants, petroleum, petroleum products, or oil, asbestos-containing materials and any polychlorinated biphenyls.

Environmental Liability” means any liability, obligation, damage, loss, claim, action, suit, judgment, order, fine, penalty, fee, expense, or cost, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of any Borrower, any other Loan Party or any of their respective Restricted Subsidiaries directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal or presence of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

Equipment” has the meaning set forth in the UCC.

Equity Interests” means, with respect to any Person, all of the shares of capital stock of (or other ownership or profit interests in) such Person, all of the warrants, options or other rights for the purchase or acquisition from such Person of shares of capital stock of (or other ownership or profit interests in) such Person, all of the securities convertible into or exchangeable for shares of capital stock of (or other ownership or profit interests in) such Person or warrants, rights or options for the purchase or acquisition from such Person of such shares (or such other interests), and all of the other ownership or profit interests in such Person (including partnership, member or trust interests therein), whether voting or nonvoting, and whether or not such shares, warrants, options, rights or other interests are outstanding on any date of determination.

ERISA” means the Employee Retirement Income Security Act of 1974.

ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Lead Borrower within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

 

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ERISA Event” means (a) a Reportable Event with respect to a Pension Plan; (b) a withdrawal by the Lead Borrower or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Lead Borrower or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization; (d) the filing of a notice of intent to terminate, the treatment of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a Pension Plan or Multiemployer Plan; (e) an event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan or Multiemployer Plan; or (f) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Lead Borrower or any ERISA Affiliate.

Event of Default” has the meaning specified in Section 8.01.  An Event of Default shall be deemed to be continuing unless and until that Event of Default has been duly waived as provided in Section 10.01 hereof.

Excess Availability” means, as of any date of determination thereof by the Administrative Agent, the result, if a positive number, of: (a) The Loan Cap minus (b) the aggregate unpaid balance of Credit Extensions to, or for the account of, the Borrowers.  

Excluded DDAs” means any DDA exclusively used (a) for trust, payroll, payroll taxes and other employee wage and benefit payments to or for the benefit of any Borrower’s or Guarantor’s employees, or (b) after the incurrence of Permitted Term Loan Indebtedness, to hold proceeds of Term Loan Priority Collateral, subject to the Term Loan Intercreditor Agreement, unless and until the release of the Lien therein of the Term Loan Agent.

Excluded Subsidiary” means (a) any Subsidiary that is prohibited by applicable law, regulation or contractual obligation from guaranteeing or providing collateral for the Obligations (only to the extent such prohibition is applicable and not rendered ineffective) or would require a governmental (including regulatory) consent, approval, license or authorization in order to provide such guarantee, (b) any Domestic Holding Company, (c) any CFC and any direct or indirect Domestic Subsidiary of such CFC and (d) any Subsidiary that is not a Wholly-Owned Subsidiary.

Excluded Swap Obligation” means, with respect to any Guarantor, any Swap Obligation if, and to the extent that, all or a portion of the Guarantee of such Guarantor of, or the grant by such Guarantor of a security interest to secure, such Swap Obligation (or any Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Guarantor’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the Guarantee of such Guarantor or the grant of such security interest becomes effective with respect to such Swap Obligation. If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such Guarantee or security interest is or becomes illegal.

 

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Excluded Taxesmeans, with respect to the Administrative Agent, any Lender, any LC Issuer or any other recipient of any payment to be made by or on account of any obligation of the Loan Parties hereunder, (a) any tax imposed on or measured by, in whole or in part, the revenue, net income, net profits, net assets, capital or net worth of, and franchise taxes imposed on, any Lender or any Participant (including any branch profits taxes), in each case imposed by the jurisdiction (or by any political subdivision or taxing authority thereof) (i) in which such Lender or such Participant is organized (ii) in which such Lender’s or such Participant’s principal office is located, (iii) in which such Lender or such Participant is doing business, including, branch profits taxes and branch interest taxes (other than solely as a result of entering into any Loan Document or taking any action contemplated thereunder), (iv) in which it has a present or former connection other than as a result of the Loan Documents or taking any action contemplated thereunder or (v) in the case of any Foreign Lender, in which its applicable Lending Office is located, in each case as a result of a present or former connection between such Lender or such Participant and the jurisdiction or taxing authority imposing the tax (other than any such connection arising solely from such Lender or such Participant having executed, delivered or performed its obligations or received payment under, or enforced its rights or remedies under the Agreement or any other Loan Document); (b) taxes resulting from a Lender’s or a Participant’s failure to comply with the requirements of Section 3.01(e), (c) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which any Borrower is located, (d) in the case of a Foreign Lender, any United States federal withholding taxes imposed on amounts payable to such Foreign Lender as a result of such Foreign Lender’s failure to comply with FATCA to establish a complete exemption from withholding thereunder, and (e) any United States federal withholding taxes that would be imposed on amounts payable to a Foreign Lender based upon the applicable withholding rate in effect at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), except that Taxes shall include (1) any amount that such Foreign Lender (or its assignor, if any) was previously entitled to receive pursuant to Section 3.01(e), if any, with respect to such withholding tax at the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), and (2) additional United States federal withholding taxes that may be imposed after the time such Foreign Lender becomes a party to the Agreement (or designates a new lending office), as a result of a Change in Law.

Executive Order” has the meaning set forth in Section 10.18.

Existing Credit Agreement” means the Credit Agreement dated November 1, 2012, among the Borrowers, Guarantor, Administrative Agent and the lenders party thereto.

Extraordinary Receipt” means any cash received by or paid to or for the account of any Loan Party not in the ordinary course of business, including tax refunds, pension plan reversions, proceeds of insurance (other than proceeds of business interruption insurance to the extent such proceeds constitute compensation for lost earnings), condemnation awards (and payments in lieu thereof), indemnity payments and any purchase price adjustments.

Facility Guaranty” means the Guaranty made by the Guarantors in favor of the Administrative Agent and the other Secured Parties, in form reasonably satisfactory to the Administrative Agent.

 

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Factored Receivables” means any Accounts oforiginally owed or owing by a Loan Party to another Person which have been purchased by or factored or sold by an Account Debtor of a Loan Party towith Wells Fargo or any of its Affiliates pursuant to a factoring arrangement or otherwise with the Person that sold the goods or rendered the services to the Loan Party which gave rise to such Account.

FATCA” means current Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is that is substantively comparable and not materially more burdensome to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code.

FCPA” means the U.S. Foreign Corrupt Practices Act (15 U.S.C. §§78dd-1 et seq.).

Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided, that, (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Wells Fargo on such day on such transactions as determined by the Administrative Agent.

Fee Letter” means the Amended and Restated Fee Letter Agreement, dated of eventhe date herewith,of Amendment No. 3, among the Lead Borrower, the Administrative Agent and the Arranger.

FIRREA” means the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended from time to time.

Fiscal Month” means any fiscal month of any Fiscal Year, each of which ends on or about the last day of each calendar month in accordance with the fiscal accounting calendar of the Loan Parties, subject to change in accordance with Section 7.13.

Fiscal Quarter” means any fiscal quarter of any Fiscal Year, each of which ends on or about the last day of each April, July, October and January of such Fiscal Year in accordance with the fiscal accounting calendar of the Loan Parties, subject to change in accordance with Section 7.13.

Fiscal Year” means any period of twelve consecutive Fiscal Months ending on the Saturday closest to January 31st of any calendar year, subject to change in accordance with Section 7.13.

Foreign Account Debtor” means an Account Debtor which (i) does not maintain its chief executive office in the United States, Puerto Rico or Canada, and (B) is not organized under the laws of the United States, Puerto Rico, or Canada, or any state or province thereof.

 

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Foreign Asset Control Regulations” has the meaning set forth in Section 10.18.

Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which the Lead Borrower is resident for tax purposes.  For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

Foreign Vendor” means a Person that sells In-Transit Inventory to a Borrower.

Foreign Vendor Agreement” means an agreement between a Foreign Vendor and the Administrative Agent in form and substance reasonably satisfactory to the Administrative Agent and pursuant to which, among other things, the parties shall agree upon their relative rights with respect to In-Transit Inventory of a Borrower purchased from such Foreign Vendor.

Formation” means the creation of any Person by a Loan Party of any of its Subsidiaries.

FRB” means the Board of Governors of the Federal Reserve System of the United States.

Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

Guarantee” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity or level of income or cash flow of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee

 

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in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien).  The amount of any Guarantee shall be deemed to be an amount equal to the stated or determinable amount of the related primary obligation, or portion thereof, in respect of which such Guarantee is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by the guaranteeing Person in good faith.  The term “Guarantee” as a verb has a corresponding meaning.

Guarantor” means each Restricted Subsidiary of the Lead Borrower in existence on the Restatement Effective Date (other than another Borrower) and each other Restricted Subsidiary of the Lead Borrower that shall be required to execute and deliver a Facility Guaranty pursuant to Section 6.12.

Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature regulated pursuant to any Environmental Law.

Honor Date” has the meaning specified in Section 2.03(c)(i).

Incentive Program Assets” means the transferrable income tax credits issuable to the Company under the Grow New Jersey Assistance Act pursuant to the Project Agreement, dated May 12, 2014, by and between the Lead Borrower and the New Jersey Economic Development Authority, as the (as the same may be modified, changed, and extended from time to time), which tax credits, the Lead Borrower, has agreed to sell to Apple Inc., pursuant to the Tax Credit Sale Agreement.

Increase Effective Date” shall have the meaning provided therefor in Section 2.15(c).

Incremental Equipment Reserve” means a Reserve established on the Amendment No.2 Effective Date, initially in the amount of $5,000,000 (reducing dollar for dollar for prepayments of the Term Loan  in accordance with clause (x) of the definition of “Permitted Indebtedness” but not less than $0), which Reserve may only be released or reduced by the Agent, upon the receipt of notice from the Term Loan Agent with the prior written consent of the Required Lenders (as such term is defined in the Term Loan Credit Agreement).

Indebtedness” means, as to any Person at a particular time, without duplication, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)  all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

 

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(b)  the maximum amount (after giving effect to any prior drawings or reductions that may have been reimbursed) of all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds and similar instruments;

(c)  net obligations of such Person under any Swap Contract;

(d)  all obligations of such Person to pay the deferred purchase price of property or services (other than (i) trade accounts and accrued expenses payable in the ordinary course of business which are not past due  more than sixty (60) days after their applicable due date and (ii) accruals for payroll and other liabilities accrued in the ordinary course of business);

(e)  indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)  All Attributable Indebtedness of such Person;

(g)  all obligations of such Person to purchase, redeem, retire, defease or otherwise make any payment in respect of any Equity Interest in such Person or any other Person (including, without limitation, Disqualified Stock, or any warrant, right or option to acquire such Equity Interest, valued, in the case of a redeemable preferred interest, at the greater of its voluntary or involuntary liquidation preference plus accrued and unpaid dividends; and

(h)  all Guarantees of such Person in respect of any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date.  For purposes of this definition, (i) the amount of any Indebtedness represented by a guaranty or other similar instrument shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Indebtedness, and (ii) the amount of any Indebtedness described in clause (e) above shall be the lower of the amount of the obligation and the fair market value of the assets of such Person securing such obligation.

Indemnified Taxes” means Taxes other than Excluded Taxes.

Indemnitees” has the meaning specified in Section 10.04(b).

Information” has the meaning specified in Section 10.07.

 

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Intellectual Property” means all present and future:  trade secrets, know-how and other proprietary information; trademarks, trademark applications, internet domain names, service marks, trade dress, trade names, business names, designs, logos, slogans (and all translations, adaptations, derivations and combinations of the foregoing) indicia and other source and/or business identifiers, and all registrations or applications for registrations which have heretofore been or may hereafter be issued thereon throughout the world and including the goodwill associated therewith; copyrights, copyrightable works (registered or unregistered) and copyright applications; (including copyrights for computer programs) and all tangible and intangible property embodying the copyrights, unpatented inventions (whether or not patentable); patents and patent applications and patent disclosures; industrial design applications and registered industrial designs; license agreements related to any of the foregoing and income therefrom; books, records, writings, computer tapes or disks, flow diagrams, specification sheets, all rights in computer software including source codes, object codes, and executable code, data, databases and other physical manifestations, embodiments or incorporations of any of the foregoing; all other intellectual property; and all common law and other rights throughout the world in and to all of the foregoing.

Intellectual Property Security Agreement” means the Intellectual Property Security Agreement, dated as of November 1, 2012, among the Loan Parties and the Administrative Agent, granting a Lien in the Intellectual Property and certain other assets of the Loan Parties, as amended and in effect from time to time.

Intercreditor Agreement” means the Intercreditor Agreement, dated of even date herewith, among the Borrowers, the Guarantors, the Administrative Agent, and the Term Loan Agent in form and substance reasonably satisfactory to the Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time in accordance therewith and herewith.  Notwithstanding anything to the contrary set forth herein, the Interceditor Agreement is a “Term Loan Intercreditor Agreement” for all purposes in connection with this Agreement.

Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, that, if any Interest Period for a LIBO Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the first day after the end of each month and the Maturity Date.

Interest Period” means, as to each LIBO Rate Loan, the period commencing on the date such LIBO Rate Loan is disbursed or converted to or continued as a LIBO Rate Loan and ending on the date one, two, three or six months thereafter, as selected by the Lead Borrower in its Committed Loan Notice; provided, that:

(a)  any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

 

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(b)  any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period;

(c)  no Interest Period shall extend beyond the Maturity Date; and

(d)  notwithstanding the provisions of clause (iii) unless Consented to by all Lenders, no Interest Period shall have a duration of less than one (1) month, and if any Interest Period applicable to a LIBO Borrowing would be for a shorter period, such Interest Period shall not be available hereunder.

For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.

Internal Control Event” means a material weakness in, or fraud that involves management or other employees who have a significant role in, the Lead Borrower’s and/or its Subsidiaries’ internal controls over financial reporting, in each case as described in the Securities Laws.

In-Transit Inventory” means Inventory of a Borrower which is in the possession of a common carrier and is in transit from a Foreign Vendor of a Borrower from a location outside of the continental United States to a location of a Borrower that is within the continental United States.

Inventory” has the meaning given that term in the UCC, and shall also include, without limitation, all: (a) goods which (i) are leased by a Person as lessor, (ii) are held by a Person for sale or lease or to be furnished under a contract of service, (iii) are furnished by a Person under a contract of service, or (iv) consist of raw materials, work in process, or materials used or consumed in a business; (b) goods of said description in transit; (c) goods of said description which are returned, repossessed or rejected; and (d) packaging, advertising, and shipping materials related to any of the foregoing.

Inventory Reserves” means such reserves as may be established from time to time by the Administrative Agent in its Permitted Discretion with respect to the determination of the saleability, at retail, of the Eligible Inventory or which reflect such other factors as affect the market value of the Eligible Inventory to the extent not addressed in the calculation of Net Recovery Percentage. Without limiting the generality of the foregoing, Inventory Reserves may, in the Administrative Agent’s Permitted Discretion, include (but are not limited to) reserves based on: (a) obsolescence; (b) seasonality; (c) Shrink; (d) imbalance; (e) change in Inventory character; (f) change in Inventory composition; (g) change in Inventory mix; (h) markdowns (both permanent and point of sale); (i) retail markons and markups inconsistent with prior period practice and performance, industry standards, current business plans or advertising calendar and planned advertising events; (j) returns to vendors, (k) out-of-date and/or expired Inventory, (l) inventory in the possession of any bailee, (m) damaged Inventory and (n) design room Inventory.

 

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Investment” means, as to any Person, any direct or indirect acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of Equity Interests of another Person, (b) a loan, advance or capital contribution to, Guarantee or assumption of debt of, or purchase or other acquisition of any other debt or interest in, another Person, or (c) any Acquisition.  For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment.

IRS” means the United States Internal Revenue Service.

ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice (or such later version thereof as may be in effect at the time of issuance).

Issuer Documents” means with respect to any Letter of Credit, the Letter Credit Application, the Standby Letter of Credit Agreement or Commercial Letter of Credit Agreement, applicable, and any other document, agreement and instrument entered into by the L/C Issuer and the applicable Borrower (or any Restricted Subsidiary) or in favor of the L/C Issuer and relating to any such Letter of Credit.

Joinder Agreement” means an agreement, in form reasonably satisfactory to the Administrative Agent pursuant to which, among other things, a Person becomes a party to, and bound by the terms of, this Agreement and/or the other Loan Documents in the same capacity and to the same extent as either a Borrower or a Guarantor, as the Administrative Agent may determine.

Landlord Lien State” means such state(s) in which a landlord’s claim for rent may have priority over the Lien of the Administrative Agent in any of the Collateral.

Laws” means each international, foreign, Federal, state, provincial and local statute, treaty, rule, guideline, regulation, ordinance, code and administrative or judicial precedent or authority, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and each applicable administrative order, directed duty, request, license, authorization and permit of, and agreement with, any Governmental Authority, in each case whether or not having the force of law.

L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

L/C Issuer” means (a) Wells Fargo in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder (which successor may only be a Lender selected by the Administrative Agent and prior to the occurrence and continuance of an Event of Default, the consent of the Lead Borrower) (b) any other Lender selected by the Administrative Agent in its discretion.  The L/C Issuer may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of the L/C Issuer and/or for such Affiliate to act as an advising, transferring, confirming and/or nominated bank in connection with the issuance or administration of any such Letter of Credit, in which case the term “L/C Issuer” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate.

 

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Lead Borrower” has the meaning specified in the introductory paragraph hereto.

L/C Obligations” means, as at any date of determination, the aggregate undrawn amount available to be drawn under all outstanding Letters of Credit.  For purposes of computing the amounts available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.06.  For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of any Rule under the ISP or any article of UCP 600, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

Lease” means any agreement, whether written or oral, no matter how styled or structured, pursuant to which a Loan Party is entitled to the use or occupancy of any space in a structure, land, improvements or premises for any period of time.

Leased Department” means the space licensed by any Loan Party from a Department Lessor pursuant to an applicable Leased Department Agreement.

Leased Department Agreements” means agreements entered into from time to time by any of the Loan Parties, pursuant to which a Borrower licenses a portion of the space from a  Department Lessor, including without limitation the agreements listed on Schedule 1.01(b), as the same may be amended, modified, replaced, extended or renewed from time to time.

Leased Department Receivable” means a Receivable owing by a Department Lessor to a Borrower arising out of a Leased Department Agreement.

Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the Swing Line Lender.

Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Lead Borrower and the Administrative Agent.

Letter of Credit” means each Standby Letter of Credit and each Commercial Letter of Credit issued hereunder.

Letter of Credit Application” means an application for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

Letter of Credit Expiration Date” means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

Letter of Credit Fee” has the meaning specified in Section 2.03(i).

Letter of Credit Sublimit” means an amount equal to $15,000,000.  The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.  A permanent reduction of the Aggregate Commitments shall not require a corresponding pro rata reduction in the Letter of Credit Sublimit; provided, that, if the Aggregate Commitments are reduced to an amount less than the Letter of Credit Sublimit, then the Letter of Credit Sublimit shall be reduced to an amount equal to (or, at Lead Borrower’s option, less than) the Aggregate Commitments.

 

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LIBO Borrowing” means a Borrowing comprised of LIBO Rate Loans.

LIBO Rate” means for any Interest Period with respect to a LIBO Rate Loan, the rate per annum rate which appears on the Reuters Screen LIBOR01 page as of 11:00 a.m., London time, on the second London Business Day preceding the first day of such Interest Period (or if such rate does not appear on the Reuters Screen LIBOR01 Page, then the rate as determined by the Agent from another recognized source or interbank quotation), for a term, and in an amount, comparable to the Interest Period and the amount of the LIBO Rate Loan requested (whether as an initial LIBO Rate Loan or as a continuation of a LIBO Rate Loan or as a conversion of a Base Rate Loan to a LIBO Rate Loan) by Borrowers in accordance with this Agreement (and, if any such rate is below zero, the LIBO Rate shall be deemed to be zero), which determination shall be made by Administrative Agent and shall be conclusive in the absence of manifest error.  If such rate is not available at such time for any reason, then the “LIBO Rate” for such Interest Period shall be the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the LIBO Rate Loan being made, continued or converted by Wells Fargo and with a term equivalent to such Interest Period would be offered to Wells Fargo by major banks in the London interbank eurodollar market in which Wells Fargo participates at their request at approximately 11:00 a.m. (London time) two Business Days prior to the commencement of such Interest Period.

LIBO Rate Loan” means a Committed Loan that bears interest at a rate based on the Adjusted LIBO Rate.

Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale, any Lease or other agreement constituting or giving rise to a Capital Lease Obligation, Synthetic Lease Obligation, or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

Liquidation” means the exercise by the Administrative Agent of those rights and remedies accorded to it under the Loan Documents and applicable Law as a creditor of the Loan Parties with respect to the realization on the Collateral, including (after the occurrence and during the continuation of an Event of Default) the conduct by the Loan Parties acting with the consent of the Administrative Agent, of any public, private or “going out of business”, “store closing”, or other similarly themed sale or other disposition of the Collateral for the purpose of liquidating the Collateral.  Derivations of the word “Liquidation” (such as “Liquidate”) are used with like meaning in this Agreement.

Loan” means an extension of credit by or on behalf of a Lender to a Borrower under Article II in the form of a Committed Loan or a Swing Line Loan.

Loan Account” has the meaning assigned to such term in Section 2.11(a).

 

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Loan Cap” means, at any time of determination, the lesser of (a) the Aggregate Commitments or (b) the Borrowing Base.

Loan Documents” means this Agreement, each Note, each Issuer Document, the Fee Letter, all Borrowing Base Certificates, the Blocked Account Agreements, the DDA Notifications, the Credit Card Notifications, the Security Documents, the Facility Guaranty, and any other instrument or agreement, including the Term Loan Intercreditor Agreement and all other Term Loan Intercreditor Agreements, now or hereafter executed and delivered in connection herewith, or in connection with any transaction arising out of any Cash Management Services and Bank Products provided by the Administrative Agent or any of its Affiliates, each as amended and in effect from time to time; provided, that, for purposes of the definition of “Material Adverse Effect” and Article VIII, “Loan Documents” shall not include agreements relating to Cash Management Services and Bank Products.

Loan Parties” means, collectively, the Borrowers and the Guarantors.

London Business Day” means a day on which commercial banks are open for general business (including dealings in foreign exchange and foreign currency deposits) in London, England.

Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, assets, liabilities (actual or contingent), or financial condition of any Loan Party or the Lead Borrower and its Subsidiaries taken as a whole; provided, that, any non-cash adjustments to financial statements in respect of fiscal periods ending on or prior to December 31, 2016 Date as a result of a non-cash write off of a $27,800,000 tax asset do not constitute material adverse changes; (b) a material impairment of the ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material impairment of the rights and remedies of the Agent or the Lenders under any Loan Document or a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.  In determining whether any individual event would result in a Material Adverse Effect, notwithstanding that such event in and of itself does not have such effect, a Material Adverse Effect shall be deemed to have occurred if the cumulative effect of such event and all other then existing events would result in a Material Adverse Effect.

Material Contract” means, with respect to any Loan Party, each contract or agreement which is a “material contract” within the meaning of item 601(b)(10)(ii) of Regulation S-K (as in effect on the November 1, 2012), whether or not Lead Borrower and its Restricted Subsidiaries are required to comply with the Securities Laws.

Material Indebtedness” means (a) any individual Indebtedness (other than the Obligations) of the Loan Parties and Restricted Subsidiaries in an aggregate principal amount exceeding $7,500,000, and (b) Permitted Term Loan Indebtedness.  For purposes of determining the amount of Material Indebtedness at any time, (i) the amount of the obligations in respect of any Swap Contract at such time shall be calculated at the Swap Termination Value thereof, (ii) undrawn committed or available amounts shall be included with respect to Permitted Term Loan Indebtedness, and (iii) all amounts owing to all creditors under any combined or syndicated credit arrangement shall be included.

 

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Maturity Date” means March 25, 2021.the earliest of (a) January 31, 2023, (b) the occurrence of an Event of Default under Sections 8.01(f) or (g) or (c) the acceleration of the Loans and the termination of the Commitments pursuant to Section 8.03.

Maximum Rate” has the meaning provided therefor in Section 10.09.

Moody’s” means Moody’s Investors Service, Inc. and any successor thereto.

Mortgages” means each and every fee and leasehold mortgage or deed of trust, security agreement and assignment by and between the Loan Party owning or holding the leasehold interest in the Real Estate encumbered thereby in favor of the Administrative Agent.Mortgage Policy” has the meaning specified in the definition of Real Estate Eligibility Requirements. As of the Amendment No. 3 Effective Date there are no Mortgages.

Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Lead Borrower or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

Net Proceeds” means (a)  with respect to any Disposition by any Loan Party or any of its Restricted Subsidiaries, or any Extraordinary Receipt received or paid to the account of any Loan Party or any of its Restricted Subsidiaries, the excess, if any, of (i) the sum of cash and Cash Equivalents received in connection with such transaction (including any cash or Cash Equivalents received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) over (ii) the sum of (A) the principal amount of any Indebtedness that is secured by the applicable asset by a Lien permitted hereunder which is senior to the Administrative Agent’s Lien on such asset and that is required to be repaid (or to establish an escrow for the future repayment thereof) in connection with such transaction (other than Indebtedness under the Loan Documents), (B) the reasonable and customary out-of-pocket expenses incurred by such Loan Party or such Restricted Subsidiary in connection with such transaction (including, without limitation, appraisals, and brokerage, legal, title and recording or transfer tax expenses and commissions) paid by any Loan Party to third parties (other than Affiliates), (C) taxes paid or reasonably estimated to be payable in connection therewith, (D) in the case of any Disposition or casualty event by a non-Wholly-Owned Subsidiary, the pro-rata portion of the Net Proceeds thereof (calculated without regard to this clause (D)) attributable to minority interests and not available for distribution to or for the account of the Borrowers or a Wholly-Owned Subsidiary as a result thereof, and (E) any reserve for adjustment in respect of (x) the sale price of such asset or assets established in accordance with GAAP and (y) any liabilities associated with such asset or assets and retained by the Borrowers or their Restricted Subsidiaries after such sale or other disposition thereof, including pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction, it being understood that “Net Proceeds” shall include the amount of any reversal (without the satisfaction of any applicable liabilities in cash in a corresponding amount) of any reserve described in this clause (E); and

 

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(b)  with respect to the sale or issuance of any Equity Interest by any Loan Party or any of its Restricted Subsidiaries, or the incurrence or issuance of any Indebtedness by any Loan Party or any of its Restricted Subsidiaries, the excess of (i) the sum of the cash and Cash Equivalents received in connection with such transaction over (ii) the investment banking fees, underwriting discounts and commissions, costs and other reasonable and customary out-of-pocket expenses, incurred by such Loan Party or such Restricted Subsidiary in connection therewith.

Net Recovery Percentage” means the fraction, expressed as a percentage (a) the numerator of which is the amount equal to the recovery on the aggregate amount of the applicable category of Eligible Inventory at such time on a “going out of business sale” basis for such Inventory, as set forth in the most recent acceptable (as determined by Administrative Agent in its Permitted Discretion) inventory appraisal received by Administrative Agent,  in accordance with the requirements of this Agreement, net of operating expenses, liquidation expenses and commissions reasonably anticipated in the disposition of such assets and (b) the denominator of which is the Book Value of the aggregate amount of the Eligible Inventory subject to such appraisal.  The Net Recovery Percentage shall be based on the applicable percentage in the most recent acceptable (as determined by Administrative Agent in its Permitted Discretion) appraisal conducted as set forth in Section 6.10.

Non-Consenting Lender” has the meaning provided therefor in Section 10.01.

Non-Extension Notice Date” has the meaning specified in Section 2.03(b)(iii).

Non-Loan Party” means any Subsidiary of the Lead Borrower that is not a Loan Party.

Note” means (a) a promissory note made by the Borrowers in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit C-1, and (b) the Swing Line Note, as each may be amended, supplemented or modified from time to time.

NPL” means the National Priorities List under CERCLA.

Obligations” means (a) all advances to, and debts (including principal, interest, fees (including any Early Termination Fee), costs, and expenses), liabilities, obligations, covenants, indemnities, and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan or Letter of Credit (including payments in respect of reimbursement of disbursements, interest thereon and obligations to provide cash collateral therefor), whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest, fees, costs, expenses and indemnities that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest, fees, costs, expenses and indemnities are allowed claims in such proceeding, and (b) any Other Liabilities; provided, that, the Obligations shall not include any Excluded Swap Obligations.

 

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Occurrence Update Schedules” means each of Schedule 5.01 (Loan Parties Organizational Information), 5.05 (Material Indebtedness), 5.06 (Litigation), 5.09 (Environmental Matters), 5.10 (for primary casualty insurance policies that cover Collateral), 5.11 (Tax Sharing Agreements), 5.13 (Subsidiaries; Other Equity Investments), 5.17 (Intellectual Property Matters), and 5.21(b) (Credit Card Agreements).

OFAC” means the U.S. Department of Treasury Office of Foreign Assets Control.

OFAC Lists” means, collectively, the SDN List and/or any other list of terrorists or other restricted Persons maintained pursuant to any of the rules and regulations of OFAC or pursuant to any other applicable executive orders.

Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; (c) with respect to any partnership, joint venture, trust or other form of business entity, the partnership, joint venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity, and (d) in each case, all shareholder or other equity holder agreements, voting trusts and similar arrangements to which such Person is a party or which is applicable to its Equity Interests and all other arrangements relating to the Control or management of such Person.

Other Liabilities” means (a) any obligation on account of (i)a) any Cash Management Services furnished to any of the Loan Parties or any of their Restricted Subsidiaries and/or (iib) any transaction with Administrative Agent or any of its Affiliates, which arises out of any Bank Product entered into with any Loan Party and any such Person, as each may be amended from time to time; and (b) any liability with respect to Factored Receivables.

Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

Outstanding Amount” means (a) with respect to Committed Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any Borrowings and prepayments or repayments of Committed Loans and Swing Line Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date.

Overadvance” means a Credit Extension to the extent that, immediately after its having been made, Excess Availability is less than zero.

 

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Parent” means Orchestra-Premaman S.A., a société anonyme organized under the laws of France.

Participant” has the meaning specified in Section 10.06(d).

Patriot Act” shall have the meaning specified in Section 10.17.

Payment Conditions” means, at the time of determination with respect to any specified transaction or payment, that (a) as of the date of any such transaction or payment, and after giving effect thereto no Event of Default then exists or would arise as a result of entering into such transaction or the making such payment, (b) as of the date of any such transaction or payment, and after giving effect to any such transaction or payment, on a pro forma basis using the most recent calculation of the Borrowing Base immediately prior to any such payment, Excess Availability shall be not less than fifteentwenty percent (1520%) of the lesser of (i) the Borrowing Base (calculated without giving effect to the Term Loan Reserve) or (ii) the Aggregate Commitments, and (c) Administrative Agent shall have received projections (in form satisfactory to Administrative Agent in its Permitted Discretion) for the sixtwelve (612) month period after the date of such transaction or payment showing, on a pro forma basis after giving effect thereto, minimum Excess Availability at all times during such period of not less than fifteen(i)  twenty-five percent (15%) of the lesser of (i) the Borrowing Base25%) or (ii) solely with respect to payments to be made under Section 7.06(a), fifty percent (50%) of (x) the Aggregate Commitments plus (y) the outstanding principal balance of the Term Loans.  Prior to (A) undertaking a Permitted Acquisition, (B) incurring any Material Indebtedness or (C) making of any Permitted Investment or Restricted Payment in excess of $5,000,0001,000,000 which is subject to the satisfaction of Payment Conditions, the Loan Parties shall deliver to the Administrative Agent evidence of satisfaction of the conditions contained in clause (b) and (c) above on a basis (including, without limitation, giving due consideration to results for prior periods) reasonably satisfactory to the Administrative Agent.

PBGC” means the Pension Benefit Guaranty Corporation.

PCAOB” means the Public Company Accounting Oversight Board.

Pension Plan” means any “employee pension benefit plan” (as such term is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject to Title IV of ERISA and is sponsored or maintained by the Lead Borrower or any ERISA Affiliate or to which the Lead Borrower or any ERISA Affiliate contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of ERISA, has made contributions at any time during the immediately preceding five plan years.

Periodic Update Schedules” shall mean each of Schedules 5.08(b)(1) (Owned Real Estate), 5.08(b)(2) (Leased Real Estate), 5.10 (for policies other than primary casualty policies that cover Collateral), 5.21(a) (Demand Deposit Accounts), 7.01 (Existing Liens), 7.02 (for Investments greater than $5,000,000 (Existing Investments), and 7.09 (Transactions with Affiliates).

 

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Permitted Acquisition” means:

(a)  an Acquisition or Formation of any Excluded Subsidiary, so long as (i) no Event of Default then exists or would arise from the consummation of such Acquisition or Formation; and (ii) as of the date of any such Acquisition or Formation, and after giving effect thereto, the Loan Parties shall have satisfied the Payment Conditions; and  

(b)  any other Acquisition or Formation in which all of the following conditions are satisfied:

(i)no Default or Event of Default then exists or would arise from the consummation of such Acquisition or Formation;

(ii)in the case of an Acquisition of a majority (or more) of the Equity Interests of a Person, such Acquisition shall have been approved by the Board of Directors of the Person (or similar governing body if such Person is not a corporation) which is the subject of such Acquisition and such Person shall not have announced that it will oppose such Acquisition or shall not have commenced any action which alleges that such Acquisition shall violate applicable Law;

(iii)in the case of any Acquisition where the consideration to be paid for such Acquisition equals or exceeds $2,000,000, the Lead Borrower shall have furnished the Administrative Agent with thirty (30) days’ prior written notice of such intended Acquisition and shall have furnished the Administrative Agent with a current draft of the Acquisition Documents (and final copies thereof as and when executed), a summary of any due diligence undertaken by the Loan Parties in connection with such Acquisition, appropriate financial statements of the Person which is the subject of such Acquisition, pro forma projected financial statements for the twelve (12) month period following such Acquisition after giving effect to such Acquisition (including balance sheets, cash flows and income statements by month for the acquired Person, individually, and on a Consolidated basis with all Loan Parties), and such other information as the Administrative Agent may reasonably require, all of which shall be reasonably satisfactory to the Administrative Agent;

(iv)after giving effect to the Acquisition or Formation, if the Acquisition is an Acquisition of the Equity Interests, a Loan Party shall acquire and own, directly or indirectly, a majority of the Equity Interests in the Person being acquired and shall Control a majority of any voting interests or shall otherwise Control the governance of the Person being acquired or formed;

(v)such Acquisition or Formation shall be with respect to an operating company or division or line of business that engages in a line of business substantially similar, reasonably related or incidental to, or a logical extension of, the Business;

(vi)if the Person which is the subject of such Acquisition or Formation will be maintained as a Restricted Subsidiary of a Loan Party, or if the assets acquired in an acquisition will be transferred to a Subsidiary which is to be a Loan Party, such Subsidiary shall have been joined as a “Borrower” hereunder or as a Guarantor, as the Administrative Agent shall determine in its Permitted Discretion, and the Administrative Agent shall have received a first

 

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priority security and/or mortgage interest (except for those Permitted Encumbrances that have priority in such Collateral by operation of law and except as to the Term Loan Priority Collateral, for the Liens of the Term Loan Agent to the extent provided in the Term Loan Intercreditor Agreement) in such Subsidiary’s Equity Interests, Inventory, Accounts, Real Estate and other property of the same nature as constitutes collateral under the Security Documents; provided, that, in the event such Subsidiary is joined as a “Borrower” the assets of such Person will only be eligible after a satisfactory field examination, appraisals and legal diligence is conducted by Administrative Agent in its Permitted Discretion; and

(vii)as of the date of any such investment or acquisition and the date of any payment in respect thereof, and after giving effect thereto, the Loan Parties shall have satisfied the Payment Conditions.

Permitted Discretion” means, as used in this Agreement, with reference to the Administrative Agent, a determination made in good faith in the exercise of its reasonable business judgment based on how an asset-based lender with similar rights providing a credit facility of the type set forth herein would act in similar circumstances at the time with the information then available to it.

Permitted Disposition” means any of the following so long as no Event of Default exists or will result therefrom:

(a)  Dispositions of Inventory in the ordinary course of business which for this purpose does not include any Disposition in connection with a Store closing or sale of a Store location;

(b)  bulk sales or other Dispositions of the Inventory of a Loan Party in connection with the closing of retail store locations, locations within department or specialty stores or other locations in which a Loan Party leases or licenses a portion of the space in such store in the ordinary course of the business of such Loan Party, in an arm’s length transaction, provided, that, (i) such closings and related sales or other Dispositions of Inventory shall not exceed (A) in any Fiscal Year of the Lead Borrower, twenty percent (20%) of the retail stores of Loan Parties (which does not include store relocations, locations which are closed in connection with the opening of a combination store or superstore, locations within department or specialty stores or other locations in which a Loan Party leases or licenses a portion of such store or international locations where Inventory is not included in the Collateral) in any Fiscal Year of the Lead Borrower as of the beginning of such Fiscal Year (net of openings of new retail store locations) and (B) in the aggregate from and after NovemberJanuary 1, 2012,2018, thirty-five percent (35%) of the retail store locations of Loan Parties (which does not include store relocations, locations which are closed in connection with the opening of a combination store or superstore, locations within department or specialty stores or other locations in which a Loan Party leases or licenses a portion of such store or international locations where Inventory is not included in the Collateral) in existence as of November 1, 2012 (net of new store openings),January 1, 2018, and (ii) all sales of Inventory in connection with Store closings shall be in accordance with liquidation agreements and with professional liquidators reasonably acceptable to Administrative Agent; provided, that, (A) all Net Proceeds received in connection therewith are applied to the Obligations if then required in accordance with Section 2.05 hereof,

 

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and (B) no such liquidation agreement or professional liquidators shall be required to the extent such sales of Inventory are limited to the closing of a single Store;

(c)  non-exclusive licenses of Intellectual Property of a Loan Party in the ordinary course of business, so long as such Dispositions are permitted under the terms of the Term Loan Documents;

(d)  licenses for the conduct of licensed departments within the Loan Parties’ Stores in the ordinary course of business; provided, that, if requested by the Administrative Agent, the Administrative Agent shall have entered into an intercreditor agreement with the Person operating such licensed department on terms and conditions reasonably satisfactory to the Administrative Agent;

(e)  Dispositions of obsolete, worn out, used or surplus Equipment, whether now owned or hereafter acquired, in the ordinary course of business and Dispositions of property, no longer used or useful  in the conduct of the business of the Loan Parties;

(f)  sales, transfers and Dispositions among the Loan Parties or by any Restricted Subsidiary to a Loan Party;

(g)  [Reserved];sales of State of New Jersey income tax credits by Lead Borrower to Apple Inc., pursuant to the Tax Credit Sale Agreement (as in effect on the Amendment No. 3 Effective Date);

(h)  (i) the making of Permitted Investments, (ii) the granting of or suffering to permit of Permitted Encumbrances, (iii) transactions permitted under Section 7.04, (iv) the making of Restricted Payments permitted under Section 7.06, and (v) transfers of property subject to a Casualty Event upon receipt of the Net Proceeds of such Casualty Event;

(i)  sales of Real Estate of any Loan Party (or sales of any Person or Persons created to hold such Real Estate or the Equity Interests in such Person or Persons), including sale-leaseback transactions involving any such Real Estate pursuant to leases on market terms;

(j)  the sale or abandonment of Intellectual Property of a Loan Party or any of its Subsidiaries in the ordinary course of business that is not material and is no longer used or useful in the business of any Loan Party, is not affixed to or used in connection with any of the Collateral or any of the books and records of such Loan Party relating to the Collateral and in the case of abandonment, does not have any material value, so long as such actions are permitted under the terms of the Term Loan Documents;

(k)  Dispositions by or of any Excluded Subsidiary (including the Equity Interests thereof);

(l)  leases, subleases, licenses or sublicenses (including the provision of software under an open source license), in each case in the ordinary course of business of any Loan Party and which do not materially interfere with the business of the Loan Parties, taken as a whole;

 

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(m)  Dispositions of Investments in joint ventures to the extent required by, or made pursuant to customary buy/sell arrangements between, the joint venture parties set forth in joint venture arrangements and similar binding arrangements;

(n)  the sale or discount of Receivables arising in the ordinary course of business but only in connection with the collection or compromise thereof; provided, that, no sale or discount of Eligible Credit Card Receivables, Eligible Trade Receivables, or Eligible Receivables shall be permitted pursuant to this clause (n) unless the applicable Loan Party shall have (i) delivered to the Administrative Agent written notice of such disposition in reasonable detail and (ii) if requested by Administrative Agent an updated Borrowing Base Certificate;

(o)  to the extent allowable under Section 1031 of the Code (or comparable or successor provision), any exchange of like property (excluding any boot thereon permitted by such provision) for use in any business conducted by the Loan Parties that is not in contravention of Section 7.08  other than Accounts and Inventory;

(p)  the unwinding of any Swap Contract;

(q)  (i) any involuntary loss, damage or destruction of property of any Loan Party or (ii) any involuntary condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, or confiscation or requisition of use of property of any Loan Party;

(r)  Dispositions of cash and Cash Equivalents in a manner that is not prohibited by this Agreement or the other Loan Documents;

(s)  sales or other Dispositions of assets of the Loan Parties in connection with the Disposition of any Real Estate, buildings or related assets, or the sale or other Disposition of any line of business and related assets and liabilities (in each case, excluding Term Loan Priority Collateral), provided, that, as to any such sale or other Disposition, each of the following conditions is satisfied:

(i) in the event of a Disposition of any line of business and related assets and liabilities, not less than seventy-five percent (75%) of the consideration to be received by the Loan Parties shall be paid or payable in cash and shall be paid contemporaneously with consummation of the transaction or otherwise on terms and conditions reasonably satisfactory to Administrative Agent,

(ii)the consideration received by such Loan Party in respect of the sale or other Disposition of such assets shall be for the fair value of such assets determined in a commercially reasonable manner based on an arm’s length transaction,

(iii)in the case of any sale or other Disposition of any Real Estate, buildings or related assets, or the sale or other Disposition of any line of business and related assets and liabilities that includes any assets of a category included in the Borrowing Base, as of the date of such sale or other Disposition and after giving effect thereto, using the most recent calculation of the Borrowing Base prior to the date of any such sale or other Disposition, on a pro forma basis, Excess Availability shall be not less than twenty percent (20%) of the lesser of (A) the Aggregate Commitments or (B) the Borrowing Base (calculated without giving effect to the Term Loan Reserve), and Administrative Agent shall have received an updated Borrowing Base Certificate reflecting the Disposition of such assets,

 

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(iv)at any time a Cash Dominion Event exists, the Net Proceeds from any such sale or other Disposition, shall be applied to the Obligations (subject to the Term Loan Intercreditor Agreement) to the extent required herein,

(v)if the aggregate book value of the assets subject to the applicable Disposition exceeds $10,000,000, prior to such Disposition, Lead Borrower shall provide to Administrative Agent updated financial projections (after giving effect to such Disposition for the twelve (12) month period following such Disposition),

(vi)in the case of any sale or other Disposition of any Real Estate, buildings or related assets, or the sale or other Disposition of any line of business and related assets and liabilities that includes any assets consisting of Term Loan Priority Collateral, in addition to the satisfaction of clauses of this subsection (s), in addition, such sale of Term Loan Priority Collateral shall be consummated in accordance with the terms of the Term Loan Documents (as in effect on the Amendment No. 3 Effective Date) or otherwise with the consent of the Term Loan Agent and Term Loan Lenders as required therein; and

(vii)(vi) as of the date of any such sale or other Disposition, and in each case after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing;

(t)  the issuance and sale by Lead Borrower of Equity Interests of Lead Borrower (including any purchase option, call or similar right of a third party with respect to the Equity Interests of the Lead Borrower) after the date hereof; provided, that, (i) Lead Borrower shall not be required to pay any cash dividends or repurchase or redeem such Equity Interests or make any other payments in respect thereof except to the extent permitted by Section 7.06, and (ii) at any time during the occurrence and continuance of a Cash Dominion Event, all of the Net Proceeds of the sale and issuance of such Equity Interests shall be applied to the Obligations (subject to the Term Loan Intercreditor Agreement) if then required in accordance with Section 2.05 hereof, and

(u)  other Dispositions of property by Loan Parties and Restricted Subsidiaries not otherwise permitted pursuant to clauses (a) through (t) above (but not includingfor the avoidance of doubt, such Dispositions shall in any event not include any Revolving Loan Priority Collateral), the proceeds of which when aggregated with the proceeds of all other Dispositions made pursuant to this clause (u) in any Fiscal Year are less than $1,000,000; provided, that, the Net Proceeds thereof shall be applied or held as required hereunder.

Permitted Encumbrances” means:

(a)  Liens for Taxes that are not yet delinquent (and remain payable without penalty) or are being contested in compliance with Section 6.04;

(b)  carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by applicable Law, arising in the ordinary course of business and securing obligations that are not overdue or if they are overdue the amount secured is not in excess of $250,000 individually, and $2,000,000 in the aggregate or are otherwise being contested in compliance with Section 6.04;

 

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(c)  (i) pledges and deposits of cash and Cash Equivalents made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations, other than any Lien imposed by ERISA and (ii) pledges and deposits of cash and Cash Equivalents in the ordinary course of business securing liability for reimbursement or indemnification obligations of (including obligations in respect of letters of credit or bank guarantees for the benefit of) insurance carriers providing property, casualty or liability insurance to any Loan Party or any Subsidiary thereof;

(d)  deposits of cash and Cash Equivalents to secure the performance of bids, trade contracts, governmental contracts and leases (other than Indebtedness for borrowed money), statutory obligations, surety, stay, customs and appeal bonds, performance bonds and other obligations of a like nature (including those to secure health, safety and environmental obligations) incurred in the ordinary course of business;

(e)  Liens in respect of judgments that would not constitute an Event of Default hereunder;

(f)  easements, covenants, conditions, restrictions, encroachments, building code laws, zoning restrictions, rights-of-way, protrusions and similar encumbrances and title defects affecting real property imposed by law or arising in the ordinary course of business that do not secure any monetary obligations and that in the aggregate do not materially detract from the value of the affected property or materially interfere with the ordinary conduct of business of the Loan Parties, taken as a whole and such other title defects or survey matters in the aggregate that are disclosed by current surveys that, in each case, do not materially interfere with the current use of the Real Estate;

(g)  Liens existing on the date hereofAmendment No. 3 Effective Date and listed on Schedule 7.01 and any renewals or extensions thereof, provided, that, (i) the property covered thereby is not changed, (ii) the amount secured or benefited thereby is not increased, (iii) the direct or any contingent obligor with respect thereto is not changed, and (iv) any renewal or extension of the obligations secured or benefited thereby is otherwise permitted hereunder);

(h)  purchase money Liens on improvements to, fixtures located on, Equipment located at or on, or the construction of any addition to any Real Estate or additional buildings at any Real Estate securing Indebtedness permitted under clause (l) of the definition of Permitted Indebtedness so long as (i) such Liens and the Indebtedness secured thereby are incurred prior to or within sixty (60) days after such acquisition, (ii) the Indebtedness secured thereby does not exceed the cost of acquisition of such fixed or capital assets and (iii) such Liens shall not extend to any other property or assets of the Loan Parties other than the proceeds of the disposition of such Real Estate, fixtures or Equipment;

(i)  Liens in favor of the Administrative Agent, for the benefit of the Administrative Agent and the other Secured Parties pursuant to the Loan Documents to secure the Obligations;

 

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(j)  Statutory or common law Liens of landlords and other like Liens or other customary Liens (other than in respect of Indebtedness) in favor of landlords, so long as, in each case, such Liens arise in the ordinary course of business and secure obligations not overdue for a period of more than thirty (30) days;

(k)  possessory Liens in favor of brokers and dealers arising in connection with the acquisition or disposition of Investments owned as of the date hereof and Permitted Investments, provided, that, such liens (i) attach only to such Investments and the proceeds thereof and (ii) secure only obligations incurred in the ordinary course and arising in connection with the acquisition or disposition of such Investments and not any obligation in connection with margin financing;

(l)  Liens arising solely by virtue of any statutory or common law provisions relating to banker’s liens, liens in favor of securities intermediaries, rights of setoff or similar rights and remedies as to deposit accounts or securities accounts or other funds maintained with depository institutions or securities intermediaries;

(m)  purported Liens arising from precautionary UCC filings or similar public filings regarding operating leases or the consignment of goods;

(n)  voluntary Liens on property (other than property of the type included in the Borrowing Base) in existence at the time such property is acquired pursuant to a Permitted Acquisition or on such property of a Subsidiary of a Loan Party in existence at the time such Subsidiary is acquired pursuant to a Permitted Acquisition; provided, that, such Liens are not incurred in connection with or in anticipation of such Permitted Acquisition and do not attach to any other assets of any Loan Party or any Restricted Subsidiary;

(o)  Liens or rights of setoff against credit balances of Borrowers with Credit Card Issuers or Credit Card Processors or amounts owing by such Credit Card Issuers or Credit Card Processors to Loan Parties in the ordinary course of business, but not Liens on or rights of setoff against any other property or assets of Loan Parties, pursuant to the Credit Card Agreements to secure the obligations of Loan Parties to the Credit Card Issuers or Credit Card Processors as a result of fees and chargebacks;

(p)  Liens on Inventory in favor of customs and revenues authorities imposed by applicable Law arising in the ordinary course of business in connection with the importation of goods;

(q)  Liens on the fixed or capital assets acquired by any Loan Party with the proceeds of the Indebtedness described in clause (c) of the definition of “Permitted Indebtedness” below so long as (A) such Liens and the Indebtedness secured thereby are incurred prior to or within ninety (90) days after such acquisition, (B) the Indebtedness secured thereby consists only of the Indebtedness that was incurred to pay the purchase price for the purchase or acquisition of the property and such Indebtedness does not exceed the cost or fair market value, whichever is lower, of the property being acquired on the date of acquisition, and (C) such Liens shall not extend to any other property or assets of the Loan Parties;

 

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(r)  Liens on the Collateral to secure the Permitted Term Loan Indebtedness, provided, that, such Liens are on the terms and conditions described the definition of the term “Permitted Term Loan Indebtedness” and such Liens on the Revolving Loan Priority Collateral are subordinated to the Liens in favor of the Administrative Agent on such Revolving Loan Priority Collateral and are otherwiseat all times subject to the terms of the Term Loan Intercreditor Agreement applicable thereto;

(s)  encumbrances referred to in Schedule B of the Mortgage Policies insuring the Mortgages;Reserved;

(t)  leases, licenses, subleases or sublicenses granted to others in the ordinary course of business which do not (i) interfere in any material respect with the business of the Loan Parties, taken as a whole, or (ii) secure any Indebtedness;

(u)  Liens relating to banker’s Liens (including Liens of a collection bank arising under Section 4-208 of the Uniform Commercial Code), Liens in favor of securities intermediaries, rights of setoff or similar rights and remedies as to deposit accounts or securities accounts or other funds maintained with depository institutions or securities intermediaries in the ordinary course of business only to secure customary fees and charges related to the maintenance and operation of accounts maintained with such depository institution or securities intermediaries;

(v)  Liens solely on any Cash deposits or Cash Equivalents of any Loan Party (other than Qualified Cash) by the Loan Parties in connection with any letter of intent or purchase agreement in respect of any Permitted Investment;

(w)  any interest or title of a lessor, sublessor, licensor or sublicensor or secured by a lessor’s, sublessor’s, licensor’s or sublicensor’s interest under any lease entered into in the ordinary course of business;

(x)  Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods (including Inventory having a Value not in excess of $1,000,000) entered into by any Loan Party in the ordinary course of business;

(y)  Liens that are contractual rights of set-off (i) relating to the establishment of depository relations with banks not given in connection with the issuance of Indebtedness (other than Indebtedness described in clause (e) of the definition thereof), (ii) relating to pooled deposit or sweep accounts of any Loan Party to permit satisfaction of overdraft or similar obligations incurred in the ordinary course of business of such Loan Party and (iii) relating to purchase orders and other agreements entered into with customers of any Loan Party in the ordinary course of business;

(z)  Liens on insurance policies owned by any Loan Party and the proceeds thereof securing the financing of the premiums with respect thereto;

 

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(aa)  deposits of cash and Cash Equivalents made by any Loan Party held by the owner or lessor of premises leased and operated by any of the Loan Parties in the ordinary course of business of the Loan Parties to secure the performance of the Loan Parties’ obligations under the terms of the lease for such premises;

(bb)  transactions described in Section 7.01 that constitute Dispositions to the extent that such Dispositions are Permitted Dispositions;

(cc)  Liens on the Equity Interests of Lead Borrower in favor of third parties consisting of any purchase options, calls or similar rights of third parties; and

(dd)  Liens on Real Estate (together with Liens on improvements, fixtures and Equipment located on such Real Estate) securing Indebtedness to the extent such Indebtedness is permitted under clause (f) of the definition of Permitted Indebtedness (and any Permitted Refinancing thereof) so long as such Liens do not extend to any other property or assets (other than proceeds) of the Loan Parties other than such Real Estate (or fixtures, improvements, or Equipment located thereon);

(ee)  Reserved; and

(ff)  Liens on Permitted Financed FFE in connection with any Permitted FFE Financing permitted under clause (x) of the definition of “Permitted Indebtedness; provided, that (i) the Indebtedness secured thereby does not exceed the fair market value (in place) of the Permitted Financed FFE, and (ii) such Liens shall not extend to any property or assets of the Loan Parties other than the Permitted Financed FFE and proceeds thereof”.

Permitted FFE Financing” means Indebtedness secured by Liens on the Permitted Financed FFE, and which is otherwise on terms and conditions reasonably satisfactory to Administrative Agent.

Permitted FFE Financing Proceeds” has the meaning set forth in clause (x) of the “Permitted Indebtedness” definition.

Permitted Financed FFE” means the furniture, fixtures and Equipment listed on Schedule 1.01(c).Permitted Holders” means (a) the Controlling Shareholder, any of the existing beneficial owners of the equity interests in the Controlling Shareholder, and their controlled Affiliates and immediate family members, and any of their respective spouses or lineal descendants including, in each case, stepchildren and family members by adoption (each, a “Family Member”), (b) any trust the sole beneficiaries of which are Family Members, and (c) the heirs at law and the estate and the beneficiaries thereof of a Family Member.

Permitted Indebtedness” means each of the following as long as no Event of Default exists on the date of such incurrence or would arise from the incurrence thereof:

(a)  Indebtedness and other obligations outstanding on the date hereofAmendment No. 3 Effective Date and listed on Schedule 7.03(a) and any Permitted Refinancing thereof;

 

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(b)  Indebtedness of (i) any Loan Party to any other Loan Party and (ii) any Loan Party to any Excluded Subsidiary to the extent such Indebtedness is subordinated on terms and conditions reasonably satisfactory to the Administrative Agent in its Permitted Discretion;

(c)  purchase money Indebtedness of any Loan Party to finance the acquisition of any fixed or capital assets (other than Real Estate), including Capital Lease Obligations and Synthetic Lease Obligations and Indebtedness under the Wells Fargo Equipment Financing Documents , and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and Permitted Refinancings thereof; provided, that, the aggregate principal amount of Indebtedness permitted by this clause (c) shall not exceed $15,000,00025,000,000 in at any time outstanding, plus Additional PMSI Indebtedness up to a maximum amount outstanding at any time not to exceed the Additional Maximum PMSI Debt Amount;

(d)  obligations (contingent or otherwise) of any Loan Party existing or arising under any Swap Contract, provided, that, such obligations are (or were) entered into by such Person in the ordinary course of business for the purpose of directly mitigating risks associated with fluctuations in interest rates, commodities pricing risks or foreign exchange rates, and not for purposes of speculation or taking a “market view”;

(e)  contingent liabilities under performance, bid, appeal and surety bonds and performance and completion guarantees or similar obligations or obligations incurred in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case, incurred in the ordinary course of business, including in respect of workers compensation claims, health, disability or other employee benefits or property, casualty or liability insurance or self-insurance or other Indebtedness with respect to reimbursement-type obligations regarding worker compensation claims;

(f)  Indebtedness incurred for the construction or acquisition or improvement of, or to finance or to refinance, any Real Estate owned by any Loan Party (including therein any Indebtedness incurred in connection with sale-leaseback transactions), provided, that, all Net Proceeds received in connection with any such Indebtedness are applied to the Obligations to the extent the failure to do so would result in a Cash Dominion Event;

(g)  unsecured Indebtedness incurred with respect to any Permitted Acquisition, any other Permitted Investment or any Permitted Disposition, in each case, to the extent constituting customary indemnification obligations or obligations in respect of purchase price (including earn-outs) or other similar adjustments;

(h)  Indebtedness of any Person that becomes a Subsidiary of a Loan Party as a result of a Permitted Acquisition, which Indebtedness is existing at the time such Person becomes a Subsidiary of a Loan Party (other than Indebtedness incurred solely in contemplation of such Person’s becoming a Subsidiary of a Loan Party); provided, that, the foregoing shall not restrict the incurrence of Indebtedness by an Excluded Subsidiary in connection with the Permitted Acquisition thereof;

(i)  the Obligations;

 

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(j)  Reserved;

(k)  Reserved;

(l)  Indebtedness to finance the acquisition, construction, repair, replacement or improvement of (i) additional or replacement buildings and/or Real Estate (or an addition or additions to such Real Estate) for distribution, warehousing or office space, and (ii) any improvements, fixtures or Equipment for any buildings or Real Estate of a Loan Party, in each case, only to the extent secured by Liens permitted under clause (h) of the definition of Permitted Encumbrances;

(m)  unsecured Indebtedness in the aggregate principal amount of up to $75,000,000 at any time outstanding (which Indebtedness may include the issuance, redemption or repurchase of Disqualified Stock), provided, that, as to any such Indebtedness (i) such Indebtedness shall be on commercially reasonable terms and conditions with market rate pricing and otherwise on terms acceptable to the Administrative Agent and shall have a maturity date that is at least ninety-one (91) days after the Maturity Date, (ii) as of the date of the incurring of any such Indebtedness and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing, and (iii) if such Indebtedness is owed to a seller of assets to any Loan Party, it is expressly subordinate in right of payment to the prior payment in full of the Obligations and otherwise subject to related subordination provisions on terms reasonably acceptable to Administrative Agent;

(n)  Permitted Term Loan Indebtedness; provided, that, so long as the Term Loan Obligations evidenced by the Term Loan Credit Agreement and the other Term Loan Documents have not been repaid in full and the Term Loan Documents terminated, Loan Parties shall not occur incur any other Permitted Term Loan Indebtedness;

(o)  unsecured guarantees made by any Loan Party in the ordinary course of business of the obligations of suppliers, customers, franchisees and licensees of the Loan Parties;

(p)  guarantees by any Loan Party of Indebtedness of any other Loan Party with respect to Indebtedness otherwise permitted to be incurred pursuant to Section 7.02,

(q)  Indebtedness consisting of (i) the financing of insurance premiums or (ii) take or pay obligations contained in supply arrangements, in each case, in the ordinary course of business,

(r)  Indebtedness representing deferred compensation to employees of the Loan Parties incurred in the ordinary course of business,

(s)  Indebtedness consisting of obligations of the Loan Parties under deferred compensation or other similar arrangements with employees incurred by such Loan Party in connection with Permitted Acquisitions or any other Investment permitted hereunder,

(t)  Indebtedness to current or former officers, directors, managers, consultants and employees, their respective estates, spouses, former spouses or domestic partners to finance the purchase or redemption of Equity Interests in the Lead Borrower permitted by Section 7.01,

 

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(u)  cash management obligations and other Indebtedness in respect of netting services, automatic clearinghouse arrangements, overdraft protections, employee credit card programs and other cash management and similar arrangements in the ordinary course of business;

(v)  obligations in respect of performance, bid, appeal and surety bonds and performance and completion guarantees and similar obligations provided by the Loan Parties or obligations in respect of letters of credit, bank guarantees or similar instruments related thereto, in each case in the ordinary course of business; and

(w)  all premiums (if any), interest (including post-petition interest), fees, expenses, charges and additional or contingent interest on obligations described in clauses (a) through (v) above;(x)  Permitted FFE Financing, provided, however, that in connection with any Permitted FFE Financing (or all such financings in the aggregate), Borrowers shall prepay the Term Loans in an aggregate amount that is the lesser of (i) $5,000,000 and (ii) the net proceeds to the Borrower of the Permitted FFE Financing after paying all amounts due under the Wells Equipment Financing Documents in order to terminate the financing thereunder and secure the release of the equipment financed thereunder, and deducting the fees, costs and expenses of the Permitted FFE Financings (the “Permitted FFE Financing Proceeds”).

Permitted Investments” means each of the following as long as no Event of Default exists or would arise from the making of such Investment:

(a)  Investments in cash and Cash Equivalents,

(b)  Investments existing on the Restatement Effective Date and set forth on Schedule 7.02, and any modifications, replacements, renewals, reinvestments or extensions of any of the foregoing but not any increase in the amount thereof except pursuant to the terms of such Investment (as in effect on the Restatement Effective Date);

(c)  [Reserved];

(d)  (i) Investments (including capital contributions, loans or advances) by any Loan Party and its Subsidiaries in their respective Subsidiaries outstanding on the date hereof, (ii) additional Investments by any Loan Party and its Subsidiaries in Loan Parties, and (ii) additional Investments by the Loan Parties in Subsidiaries that are Non-Loan Parties, provided, that, in the case of this clause (ii), as of the date of such Investment and after giving effect thereto, each of the Payment Conditions shall be satisfied;

(e)  Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the grant of trade credit in the ordinary course of business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled Account Debtors;

(f)  guarantees by any Loan Party of leases (other than Capitalized Leases) or of other obligations that do not constitute Indebtedness in the ordinary course of business;

 

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(g)  Investments by any Loan Party in Swap Contracts permitted under clause (d) of the definition of “Permitted Indebtedness”;

(h)  Investments (including debt obligations and Equity Interests) received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and other disputes with, customers and suppliers, in each case in the ordinary course of business or upon the foreclosure with respect to any secured Investment or other transfer of title with respect to any secured Investment;

(i)  loans or advances to officers, directors, partners and employees of the Loan Parties in the ordinary course of business in an amount not to exceed $200,000 to any individual at any time or in an aggregate amount not to exceed $500,000 at any time outstanding, for travel, entertainment, relocation and analogous ordinary business purposes;

(j)  Investments constituting Permitted Acquisitions; and

(k)  asset purchases (including purchases of inventory, supplies and materials) and the licensing or contribution of Intellectual Property pursuant to joint marketing arrangements with other Persons, in each case in the ordinary course of business;

(l)  Investments permitted pursuant to Sections 7.01, 7.03, 7.04, 7.05 and 7.06;

(m)  promissory notes and other noncash consideration permitted to be received in accordance with the terms of this Agreement in connection with Permitted Dispositions, Restricted Payments permitted to be made in accordance with Section 7.06 and Permitted Acquisitions;

(n)  Investments in the ordinary course of business consisting of endorsements for collection or deposit and customary trade arrangements with customers;

(o)  advances of payroll payments to employees in the ordinary course of business;

(p)  loans and advances made by Loan Parties to the Lead Borrower in lieu of, and not in excess of the amount of (after giving effect to any other such loans or advances or Restricted Payments in respect thereof), Restricted Payments to the extent permitted to be made to the Lead Borrower in accordance with Section 7.06;

(q)  Investments held by a Loan Party acquired after the Restatement Effective Date or of a Person merged into such Loan Party or merged or consolidated with such Loan Party (other than the Lead Borrower) in accordance with Section 7.04 after the Restatement Effective Date to the extent that such Investments were not made in contemplation of or in connection with such acquisition, merger or consolidation and were in existence on the date of such acquisition, merger or consolidation;

(r)  Investments to the extent that payment for such Investments is made solely with Equity Interests (other than Disqualified Equity Interests) of the Lead Borrower;

 

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(s)  Investments in any Rabbi Trust in order to fund accrued benefits under any SERP, provided, that, prior to or contemporaneously with the formation of any such Rabbi Trust, the applicable Loan Party has granted a first priority Lien thereon in favor of Agent for the benefit of the Secured Parties to secure the Obligations;

(t)  Investments made by Excluded Subsidiaries, provided, that, to the extent such Investments are loans and advances to any Loan Party or Restricted Subsidiary such loans and advances shall be subordinated to the payment in full of the Obligations on terms and conditions acceptable to the Administrative Agent in its Permitted Discretion; and

(u)  other Investments (other than Permitted Acquisitions which shall be permitted upon the satisfaction of the conditions set forth in the definition thereof), to the extent that, as of the date of such Investment and the date of any payment in respect thereof, and after giving effect thereto, the Payment Conditions are satisfied.

Permitted Orchestra Merger” means the merger between Merger Sub and Lead Borrower pursuant to the Orchestra Merger Agreement, provided all of the Conditions Precedent set forth in Section 2 of Amendment No. 1 have been satisfied.

Permitted Overadvance” means an Overadvance made by the Administrative Agent, in its discretion, which: (a) is made to maintain, protect or preserve the Collateral and/or the Secured Parties’ rights under the Loan Documents or which is otherwise for the benefit of the Secured Parties; or (b) is made to enhance the likelihood of, or to maximize the amount of, repayment of any Obligation; (c) is made to pay any other amount chargeable to any Loan Party hereunder; and (d) together with all other Permitted Overadvances then outstanding, shall not (i) exceed ten percent (10%) of the Borrowing Base at any time or (ii) unless a Liquidation is occurring, remain outstanding for more than forty-five (45) consecutive Business Days, unless in each case, the Required Lenders otherwise agree; provided, that, the foregoing shall not (A) modify or abrogate any of the provisions of Section 2.03 regarding the Lender’s obligations with respect to Letters of Credit, or (B) result in any claim or liability against the Administrative Agent (regardless of the amount of any Overadvance) for Unintentional Overadvances and such Unintentional Overadvances shall not reduce the amount of Permitted Overadvances allowed hereunder, and provided, that, in no event shall the Administrative Agent make an Overadvance, if after giving effect thereto, the principal amount of the Credit Extensions would exceed the Aggregate Commitments (as in effect prior to any termination of the Commitments pursuant to Section 2.06 hereof).

Permitted Refinancing” means any extension, renewal, replacement, modification or refinancing of any Permitted Indebtedness of any Loan Party arising after the Restatement Effective Date issued in exchange for, or the proceeds of which are used to extend, refinance, replace or substitute for other Permitted Indebtedness (such extended, refinanced, replaced or substituted Indebtedness, the “Refinanced Obligations”) to the extent permitted hereunder; provided that:  (a) the Administrative Agent shall have received not less than ten (10) Business Days’ prior written notice of the intention to incur such Indebtedness, which notice shall set forth in reasonable detail reasonably satisfactory to the Administrative Agent the amount of such Indebtedness, the schedule of repayments and maturity date with respect thereto and such other information with respect thereto as the Administrative Agent may reasonably request; (b)

 

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promptly upon the Administrative Agent’s request, the Administrative Agent shall have received true, correct and complete copies of all agreements, documents and instruments evidencing or otherwise related to such Indebtedness, as executed and delivered by the parties thereto; (c) the principal amount of such Refinancing Indebtedness shall not exceed the principal amount of the Refinanced Obligations (plus the amount of reasonable refinancing fees and expenses incurred in connection therewith);  (d) such Indebtedness shall have a final maturity that is no earlier than (i) in the case of Refinanced Obligations that constitute Material Indebtedness, ninety-one (91) days after the Maturity Date, and (ii) in the case of all other Refinanced Obligations, three hundred sixty-four (364) days after the final maturity date of such Refinanced Obligations or, if earlier, ninety (91) days after the Maturity Date; (e) such Indebtedness shall have a Weighted Average Life to Maturity not less than the Weighted Average Life to Maturity of the Refinanced Obligations;  (f)  such Indebtedness shall rank in right of payment no more senior than, and be subordinated (if subordinated) to the Obligations on terms no less favorable to the Secured Parties than the Refinanced Obligations;  (g)as of the date of incurring such Indebtedness and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing; (h)if the Refinanced Obligations or any Guarantees thereof are unsecured, such Indebtedness and any Guarantees thereof shall be unsecured; (i) if the Refinanced Obligations or any guarantees thereof are secured, such Indebtedness and any Guarantees thereof shall be secured in all material respects by substantially the same or less collateral as secured such Refinanced Obligations or any guarantees thereof, on terms no less favorable to the Administrative Agent or the Lenders; (j) if the Refinanced Obligations or any guarantees thereof are secured, the Liens to secure such Indebtedness shall not have a priority more senior than the Liens securing the Refinanced Obligations and if subordinated to any other Liens on such property, shall be subordinated to the Administrative Agent’s Liens on terms and conditions no less favorable;  (k) if the Refinanced Obligations or any Guarantees thereof are subordinated to any Indebtedness of Borrowers other than the Obligations, such Refinancing Indebtedness and any Guarantees thereof shall be subordinated to the Obligations on terms (including intercreditor terms) no less favorable to the Administrative Agent or the Lenders;  (l)the obligors in respect of the Refinanced Obligations immediately prior to such refinancing, refunding, extending, renewing or replacing thereof shall be the only obligors on such Indebtedness; and  (m) the terms and conditions (excluding as to pricing, premiums and optional prepayment or redemption provisions) of any such Indebtedness, taken as a whole, are not more restrictive with respect to the Lead Borrower and the Restricted Subsidiaries, as reasonably determined by the Lead Borrower in good faith, than the terms and conditions of the Refinanced Obligations.

Permitted Term Loan Indebtedness” means the secured Indebtedness in the principal amount of $25,000,000,incurred by Borrowers after November 1, 2012 pursuant to the Term Loan Credit Agreement, contemporaneously with the execution and delivery of Amendment No. 3, subject to the satisfaction, as reasonably determined by Administrative Agent, of the following conditions: (a) the aggregate maximum principal amount of such Indebtedness shall be in a principal amount not greater than $150,000,000 minus the then outstanding principal amount of Additional PMSI Indebtedness, (b) such Indebtedness shall be on commercially reasonable terms and conditions with market rate pricing, (c) the maturity date of such Indebtedness shall be no earlier than six (6) months after the Maturity Date, (d) scheduled amortization payments prior to or on the Maturity Date shall not exceed $6,000,000 in any calendar year (the “Maximum Annual Amortization Amount”); provided, that, any market mandatory cash flow sweep prepayment shall be permitted to be made in addition to and not included as part of the

 

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Maximum Annual Amortization Amount, (e) Administrative Agent shall have received, thirty (30) days prior to any such incurrence of such Indebtedness, pro forma (after giving effect to the incurrence of such Indebtedness and the application of the proceeds therefrom) projections on a monthly basis for the first twelve (12) months and on an annual basis thereafter for the term of this Agreement, all in reasonable detail and in a format consistent with the projections delivered by Lead Borrower to Administrative Agent prior to November 1, 2012, together with such supporting information as Administrative Agent may reasonably request, using such methodology as is consistent with the then most recent financial statements delivered to Administrative Agent pursuant to the terms of the Loan Documents, all in form and substance reasonably satisfactory to Administrative Agent, (f25,000,000, (b) the holders of such Indebtedness may have a first priority Lien on the Term Loan Priority Collateral to secure the payment of such Indebtedness, and a second priority Lien on the Revolving Loan Priority Collateral subject to the intercreditor agreement referred in clause (g) immediately below, (g) the execution of an intercreditor agreement, in form and substance, reasonably satisfactory to Administrative Agent, by and between the administrative agent for the holders of such Indebtedness and the Administrative Agent on behalf of itself and the other Secured Parties, with respect to the rights of each of Administrative Agent and the other Secured Parties, and the administrative agent for the holders of the Indebtedness arising from the issuance of such Indebtedness as to the Loan Parties and the Collateral, including among other things, that Administrative Agent for the benefit of itself and the other Secured Parties has a first priority Lien on the Revolving Loan Priority Collateral and a second priority Lien on the Term Loan Priority Collateral (referred to herein as the “Term Loan Intercreditor Agreement”),  (h) Reserved, (i) Administrative Agent shall have received at least thirty (30) days’ prior notice and other information, reasonably requested by Administrative Agent, related to such transactions, and (j) as of the date of the incurrence of any such Indebtedness or the making of any payment in connection therewith, and after giving effect thereto, no Default or Event of Default shall exist or have occurred and be continuing. The amount of Additional PMSI Indebtedness outstanding at any time plus the amount of Permitted Term Loan Indebtedness outstanding at any time shall not exceed $150,000,000, in the aggregate.  Notwithstanding that the Term Loan evidenced by the Term Loan Documents does not satisfy the criteria set forth in clause (c) set forth above, upon the execution of (i) the Term Loan Documents, in form and substance satisfactory to the Administrative Agent and (ii) the, and (c) Term Loan Intercreditor Agreement, by all of the parties thereto, such Term Loan shall be deemed Permitted Term Loan Indebtedness for all purposes under this Agreementis in full force and effect, and any Permitted Refinancing thereof.

Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, limited partnership, Governmental Authority or other entity.

Plan” means any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) established by the Lead Borrower or, with respect to any such plan that is subject to Section 412 of the Code or Title IV of ERISA, any ERISA Affiliate.

Platform” has the meaning specified in the last paragraph of Section 6.02.

 

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PPSA” means the Personal Property Security Act (Ontario), the Civil Code of Québec or any other applicable  Canadian Federal or Provincial statute pertaining to the granting, perfecting, priority or ranking of security interests, liens, hypothecs on personal property, and any successor statutes, together with any regulations thereunder, in each case as in effect from time to time.  References to sections of the PPSA shall be construed to also refer to any successor sections.

Prepayment Event” means:

(a)  solely to the extent a Cash Dominion Event then exists or would result therefrom, any Disposition (including pursuant to a sale and leaseback transaction) of any property or asset of a Loan Party (other than Real Estate as set forth in clause (b) below);

(b)  Reserved;

(c)  solely to the extent a Cash Dominion Event then exists or would result therefrom, any Casualty Event with respect to Inventory (including the receipt of any Extraordinary Receipts with respect to such Casualty Event);

(d)  solely to the extent a Cash Dominion Event then exists, the issuance by a Loan Party or any of its Restricted Subsidiaries of any Equity Interests, other than any such issuance of Equity Interests (i) to a Loan Party, (ii) as consideration for a Permitted Acquisition or other Investment permitted hereunder or (iii) as a compensatory issuance to any employee, director, or consultant (including  pursuant to any employee stock or option plans approved by the board of directors of such Loan Party);

(e)  solely to the extent a Cash Dominion Event then exists, the incurrence by any Loan Party, of any Indebtedness for borrowed money issued by any Loan Party or its Restricted Subsidiaries (other than the incurrence of (i) Permitted Term Loan Indebtedness in which event a Prepayment Event exists pursuant to clause (g) of this definition or (ii) Permitted Indebtedness described in clauses (c) and (l) of the definition thereof);

(f)  solely to the extent a Cash Dominion Event then exists, the receipt by any Loan Party of any Extraordinary Receipts (other than Extraordinary Receipts in respect of Inventory); or

(g)  the date of the incurrence of Permitted Term Loan Indebtedness.

Priority Payables” shall mean, as to any Borrower or Guarantor, as of any date of determination, (a) the full amount of the liabilities of such Borrower or Guarantor as of such date of determination which (i) have a trust imposed to provide for payment or a security interest, pledge, lien, hypothec or charge ranking or capable of ranking senior to or pari passu with security interests, liens or charges securing the Obligations under Canadian federal, Provincial, state, county, district, municipal or local law in Canada, or (ii) have a right imposed to provide for payment ranking or capable of ranking senior to or pari passu with the Obligations under local or national Canadian laws, regulations or directives, including, but not limited to, claims for unremitted and/or accelerated rents, taxes, wages, withholding taxes, VAT and other amounts payable to an insolvency administrator, employee withholdings or deductions and vacation pay,

 

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workers’ compensation obligations, government royalties or pension fund obligations, in each case to the extent such trust or security interest, lien or charge has been or may be imposed, and (b) the amount equal to the percentage applicable to Inventory in the calculation of Excess Availability multiplied by the aggregate Value of the Eligible Inventory which Agent, in good faith, considers is or may be subject to retention of title by a supplier or a right of a supplier to recover possession thereof, where such supplier’s right has priority over the security interests, hypothecs, liens or charges securing the Obligations, including, without limitation, Eligible Inventory subject to a right of a supplier to repossess goods pursuant to Section 81.1 of the Bankruptcy and Insolvency Act (Canada) or any applicable laws granting revendication or similar rights to unpaid suppliers or any similar laws of Canada or any other applicable jurisdiction (provided, that, to the extent such Inventory has been identified and has been excluded from Eligible Inventory, the amount owing to the supplier shall not be considered a Priority Payable).

Public Lender” has the meaning specified in last paragraph of Section 6.02.

Public Market” shall exist if (a) a Public Offering has been consummated and (b) any Equity Interests of the Lead Borrower have been distributed by means of an effective registration statement under the Securities Act of 1933.

Public Offering” means a public offering of the Equity Interests of the Lead Borrower pursuant to an effective registration statement under the Securities Act of 1933.

Qualified Cash” means unrestricted cash and Cash Equivalents of Borrowers that are subject to the valid, enforceable and first priority perfected security interest of Administrative Agent in an investment account or deposit account at Administrative Agent or another institution reasonably satisfactory to Administrative Agent subject to a Control Agreement, in form and substance reasonably satisfactory to Administrative Agent, and free and clear of any pledge, security interest, Lien, claim or other encumbrance (other than Liens (i) in favor of Administrative Agent, and (ii) the Permitted Encumbrances set forth in clauses (a), (e), (u), and (r) of the definition of Permitted Encumbrances, provided, that, for purposes of the amount of Qualified Cash in the Borrowing Base, such amount would be reduced by the amount secured by any such Permitted Encumbrances), are available for use by a Borrower, without condition or restriction (other than in favor of Administrative Agent), and for which Administrative Agent shall have received evidence, in form and substance reasonably satisfactory to Administrative Agent, of the amount of such cash or Cash Equivalents held in such deposit account or investment account as of the applicable date of the calculation of the Borrowing Base.  Borrowers shall be permitted to withdraw Qualified Cash from the applicable investment account or deposit account, as the case may be, until the occurrence and during the continuance of a Cash Dominion Event.  In addition, withdrawals of Qualified Cash shall be subject to the restrictions set forth in clause (f) of the definition of “Borrowing Base” and the reporting requirements set forth in Schedule 6.02.

Qualified ECP Guarantor” means, in respect of any Swap Contract, each Loan Party that has total assets exceeding $10,000,000 at the time the relevant Facility Guarantee or grant of the relevant security interest becomes effective with respect to such Swap Obligation or such other person as constitutes an “eligible contract participant” under the Commodity Exchange Act or

 

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any regulations promulgated thereunder and can cause another person to qualify as an “eligible contract participant” at such time by entering into a keepwell under Section 1a(18)(A)(v)(II) of the Commodity Exchange Act.

Québec Hypothec” means a hypothec, in form and substance reasonably satisfactory to Agent and all other documents contemplated thereby or delivered in connection therewith, each executed and delivered by the Loan Parties.

Rabbi Trust” means any grantor trust established by an Obligor in accordance with Internal Revenue Service Revenue Procedure 96-24 to accept both employer and employee contributions made under the terms of one or more SERPs.  As of the Restatement Effective Date, there are no Rabbi Trusts in full force and effect.

Real Estate” means all Leases and all land, together with the buildings, structures, parking areas, and other improvements thereon, now or hereafter owned by any Loan Party, including all fixtures, hereditaments, appurtenances, easements, rights-of-way, and similar rights relating thereto and all leases, tenancies, and occupancies thereof, now or hereafter owned by any Loan Party.

Receivables” shall mean all of the following now owned or hereafter arising or acquired property of any Loan Party: (a) all Accounts; (b) all interest, fees, late charges, penalties, collection fees and other amounts due or to become due or otherwise payable in connection with any Account; (c) all payment intangibles of any Loan Party;  (d)  letters of credit, indemnities, guarantees, security or other deposits and proceeds thereof issued payable to any Loan Party or otherwise in favor of or delivered to Borrower or Guarantor in connection with any Account; or (e) all other accounts, contract rights, chattel paper, instruments, notes, general intangibles and other forms of obligations owing to any Loan Party, whether from the sale and lease of goods or other property, licensing of any property (including Intellectual Property or other general intangibles), rendition of services or from loans or advances by any Loan Party or to or for the benefit of any third person (including loans or advances to any Affiliates or Subsidiaries of any Loan Party) or otherwise associated with any Accounts, Inventory or general intangibles of any Loan Party (including, without limitation, choses in action, causes of action, tax refunds, tax refund claims, any funds which may become payable to any Loan Party in connection with the termination of any Plan or other employee benefit plan and any other amounts payable to any Loan Party from any Plan or other employee benefit plan, rights and claims against carriers and shippers, rights to indemnification, business interruption insurance and proceeds thereof, casualty or any similar types of insurance and any proceeds thereof and proceeds of insurance covering the lives of employees on which any Loan Party is a beneficiary).

Receivables Reserves” means such Reserves as may be established from time to time by the Administrative Agent in the Administrative Agent’s Permitted Discretion with respect to the determination of the collectability in the ordinary course of Eligible Trade Receivables, including, without limitation, Dilution Reserves.

Register” has the meaning specified in Section 10.06(c).

 

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Registered Public Accounting Firm” has the meaning specified by the Securities Laws and shall be independent of the Lead Borrower and its Subsidiaries as prescribed by the Securities Laws.

Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates.

Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the thirty (30) day notice period has been waived.

Reports” has the meaning provided in Section 9.12(b).

Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Committed Loans, a Committed Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application and, if required by the L/C Issuer, a Standby Letter of Credit Agreement or Commercial Letter of Credit Agreement, as applicable, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

Required Lenders” means, as of any date of determination, Lenders holding more than fifty percent (50%) of the Aggregate Commitments or, if the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, Lenders holding in the aggregate more than fifty percent (50%) of the Total Outstandings (with the aggregate amount of each Lender’s risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition); provided, that, the Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender or Deteriorating Lender shall be excluded for purposes of making a determination of Required Lenders.

Reservesmeans all Inventory Reserves, Availability Reserves, Receivables Reserves, and the Term Loan Reserve, the EBITDA Reserve, and the Incremental Equipment Loan Reserve.

Responsible Officer” means the chief executive officer, president, chief financial officer, secretary or assistant secretary, treasurer or assistant treasurer of a Loan Party or any of the other individuals designated in writing to the Administrative Agent by an existing Responsible Officer of a Loan Party as an authorized signatory of any certificate or other document to be delivered hereunder.  Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, limited liability company partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

Restatement Effective Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.March 25, 2016.

 

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Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other Equity Interest of any Person or any of its Subsidiaries, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such capital stock or other Equity Interest, or on account of any return of capital to such Person’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such dividend or other distribution or payment.  Without limiting the foregoing, “Restricted Payments” with respect to any Person shall also include all payments made by such Person with any proceeds of a dissolution or liquidation of such Person.

Restricted Subsidiary” means each Subsidiary of Lead Borrower that is not an Excluded Subsidiary.

Reuters Screen LIBOR01 Page” means the display page LIBOR01 on the Reuters service or any successor display page, other published source, information vendor or provider that has been designated by the sponsor of Reuters Screen LIBOR01 page.

Revolving Loan Priority Collateral” means all assets and properties of the Loan Parties (other than the Term Loan Priority Collateral), including without limitation the following: (i)  Accounts, Receivables, Credit Card Receivables and payment intangibles (other than Accounts under contracts for sale of Term Loan Priority Collateral), (ii) chattel paper (other than chattel paper relating to Term Loan Priority Collateral), (iii) deposit accounts and investment accounts (and all cash, checks and other negotiable instruments, funds and other evidences of payment held therein, but not any identifiable proceeds of Term Loan Priority Collateral), (iv) investment property, (v) all Inventory, (vi) general intangibles consisting of payment intangibles, (vii) to the extent evidencing, governing, securing or otherwise related to any of the foregoing and the other Revolving Loan Priority Collateral, all documents, general intangibles (excluding all Intellectual Property, but including loans or advances payable by a Loan Party to any other Loan Party), instruments, investment property, commercial tort claims, letters of credit, supporting obligations and letter of credit rights, (viii) all books, records and documents related to the foregoing (including databases and other records, whether tangible or electronic, which contain any information relating to any of the foregoing), and (ix) all proceeds and products of any or all of the foregoing in whatever form received, and proceeds of business interruption and other insurance and claims against third parties.  Extraordinary receipts constituting proceeds of judgments relating to any of the property referred to in the preceding sentence, insurance proceeds and condemnation awards in respect of any such property, indemnity payments in respect of any such property and purchase price adjustments in connection with any such property shall constitute Revolving Loan Priority Collateral.   including for the avoidance of doubt, any such assets, that but for the application of Section 552 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws), would be Revolving Loan Priority Collateral, and all Proceeds of the same but excluding the Term Loan Priority Collateral.  Notwithstanding the foregoing, the Incentive Program Assets and proceeds thereof shall not constitute Revolving Loan Priority Collateral.

S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc. and any successor thereto.

 

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Sanctions Laws” has the meaning set forth in Section 5.22.5.16.

Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002.

SDN List” means the list of the Specially Designated Nationals and Blocked Persons.

SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

Secured Party” or “Secured Parties” means (a) individually (i) each Lender, (ii) the Administrative Agent, (iii) each L/C Issuer, (iv) the Arranger, (v) any other Person (including Affiliates of Lenders and the Administrative Agent) to whom Obligations (including Other Liabilities) are owing until such time as the Obligations are paid in full, and (vi) the successors and assigns of each of the foregoing, and (b) collectively, all of the foregoing.

Secured Party Expenses” means, without limitation, (a) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates, in connection with this Agreement and the other Loan Documents, including without limitation (but in any event subject to the limitations described below) (i) the reasonable and documented fees, charges and disbursements of (A) counsel for the Administrative Agent, (B) outside consultants for the Administrative Agent, (C) appraisers (but only to the extent expressly provided to be paid by the Borrowers as set forth in this Agreement), (D) field examinations (but only to the extent expressly provided to be paid by the Borrowers as set forth in this Agreement), and (E) all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of the Obligations, (ii) in connection with (A) the syndication of the credit facilities provided for herein, (B) the preparation, negotiation, administration, management, execution and delivery of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (C) the enforcement or protection of their rights in connection with this Agreement or the Loan Documents or efforts to preserve, protect, collect, or enforce the Collateral, or (D) any workout, restructuring or negotiations in respect of any Obligations, and (b) with respect to the L/C Issuer, and its Affiliates, all reasonable and documented out-of-pocket expenses incurred in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder; and (c) all reasonable and documented out-of-pocket expenses incurred by the Lenders who are not the Administrative Agent, the L/C Issuer or any Affiliate of any of them, after the occurrence and during the continuance of an Event of Default, provided, that, such Lenders shall be entitled to reimbursement for no more than one counsel representing all such Lenders (absent a conflict of interest in which case the Lenders may engage and be reimbursed for additional counsel). Notwithstanding anything herein or otherwise to the contrary, no Loan Party shall be obligated to pay for or reimburse any party described in this definition for the fees for the initial field examination or inventory appraisal conducted prior to November 1, 2012.

Securities Laws” means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley, and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the PCAOB.

 

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Security Agreement” means the Security Agreement, dated as of November 1, 2012, among the Loan Parties and the Administrative Agent, as it may be amended, supplemented, restated or otherwise modified from time to time, including without limitation as the same has been amended pursuant to Section 11.02 hereof.

Security Documents” means the Security Agreement, the Intellectual Property Security Agreement, the Blocked Account Agreements, the Mortgages, the DDA Notifications, the Credit Card Notifications, the Canadian Security Documents, and each other security agreement or other instrument or document executed and delivered to the Administrative Agent pursuant to this Agreement or any other Loan Document granting a Lien to secure any of the Obligations.

SERP” means all non-qualified retirements plans approved by the members of any Loan Party’s board of directors, whether individual supplemental agreements or executive deferred compensation plans.

Settlement Date” has the meaning provided in Section 2.14(a).

Shareholders’ Equity” means, as of any date of determination, consolidated shareholders’ equity of the Lead Borrower and its Subsidiaries as of that date determined in accordance with GAAP.

Shrink” means Inventory which has been lost, misplaced, stolen, or is otherwise unaccounted for.

Shrink Reserve” means an amount reasonably estimated by the Administrative Agent to be equal to that amount which is required in order that the Shrink reflected in Borrowers’ stock ledger would be reasonably equivalent to the Shrink calculated as part of the Borrowers’ most recent physical inventory.

Solvent” and “Solvency” means, with respect to any Person on any date of determination, that on such date (a) at fair valuation, all of the properties and assets of such Person are greater than the sum of the debts, including contingent liabilities, of such Person, (b) the present fair saleable value of the properties and assets of such Person is not less than the amount that would be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person is able to realize upon its properties and assets and pay its debts and other liabilities, contingent obligations and other commitments as they mature in the normal course of business, (d) such Person does not intend to, and does not believe that it will, incur debts beyond such Person’s ability to pay as such debts mature, and (e) such Person is not engaged in a business or a transaction, and is not about to engage in a business or transaction, for which such Person’s properties and assets would constitute unreasonably small capital after giving due consideration to the prevailing practices in the industry in which such Person is engaged.  The amount of all guarantees at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, can reasonably be expected to become an actual or matured liability.

Specified Canadian Pension Plan” means any Canadian Pension Plan which contains a “defined benefit provision”, as defined in subsection 147.1(1) of the Income Tax Act (Canada).

 

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Specified Event of Default” means the occurrence of (a) any Event of Default described in any of Sections 8.01(a), 8.01(b) (but only with respect to an Event of Default arising from the failure to deliver a Borrowing Base Certificate), 8.01(d) (but only with respect to representations and warranties set forth in a Borrowing Base Certificate) or 8.01(f) or (b) the exercise by Administrative Agent of its rights and remedies upon an Event of Default.

Spot Rate” has the meaning given to such term in Section 1.07 hereof.

Standby Letter of Credit” means any Letter of Credit that is not a Commercial Letter of Credit and that (a) is used in lieu or in support of performance guaranties or performance, surety or similar bonds (excluding appeal bonds) arising in the ordinary course of business, (b) is used in lieu or in support of stay or appeal bonds, (c) supports the payment of insurance premiums for reasonably necessary casualty insurance carried by any of the Loan Parties, or (d) supports payment or performance for identified purchases or exchanges of products or services in the ordinary course of business.

Standby Letter of Credit Agreement” means the Standby Letter of Credit Agreement relating to the issuance of a Standby Letter of Credit in the form from time to time in use by the L/C Issuer.

Stated Amount” means at any time the maximum amount for which a Letter of Credit may be honored.

Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the FRB to which the Administrative Agent is subject with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the FRB). Such reserve percentages shall include those imposed pursuant to such Regulation D.  LIBO Rate Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.

Store” means any retail store (which may include any real property, fixtures, equipment, inventory and other property related thereto) operated, or to be operated, by any Loan Party other than a Leased Department.

Store Leased Location” means any Store which is subject to a lease agreement between a Loan Party and a third party, but excluding any location where a Loan Party is operating pursuant to a Leased Department Agreement.

Subordinated Indebtedness” means Indebtedness which is expressly subordinated in right of payment to the prior payment in full of the Obligations and which is in form and on terms approved in writing by the Administrative Agent.

 

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Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares Equity Interests having ordinary voting power for the election of directors or other governing body are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.  Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of a Loan Party.

Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

Swap Obligation” means, with respect to any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of section 1a(47) of the Commodity Exchange Act.

Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

Swing Line” means the revolving credit facility made available by the Swing Line Lender pursuant to Section 2.04.

Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

Swing Line Lender” means Wells Fargo, in its capacity as provider of Swing Line Loans, or any replacement or any successor swing line lender permitted hereunder.

Swing Line Loan” has the meaning specified in Section 2.04(a).

 

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Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B.

Swing Line Note” means the promissory note of the Borrowers substantially in the form of Exhibit C-2, payable to the order of the Swing Line Lender, evidencing the Swing Line Loans made by the Swing Line Lender.

Swing Line Sublimit” means an amount equal to $15,000,000.  The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitments.

Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property (including sale and leaseback transactions), in each case, creating obligations that do not appear on the balance sheet of such Person but which, upon the application of any Debtor Relief Laws to such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

Tax Credit Sale Agreement” means the Purchase and Sale Agreement, effective as of December 9, 2013 by and between Lead Borrower, as seller and Apple Inc., a California corporation, as buyer, pursuant to which Lead Borrower agreed to sell to Apple, Inc., up to $30,000,000 of transferrable State of New Jersey income tax credits, and up to an additional $10,000,000 of such tax credits, pursuant to the terms of such agreement, as the same may be amended, restated, modified, supplemented, extended, renewed or replaced from time to time pursuant to the terms of this Agreement.

Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

Termination Date” means the earliest to occur of (a) the Maturity Date, (b) the date on which the maturity of the Obligations is accelerated (or deemed accelerated) and the Commitments are irrevocably terminated (or deemed terminated) in accordance with Article VII, or (c) the termination of the Commitments in accordance with the provisions of Section 2.06(a) hereof.

Term Loans” means the term loans made on the date hereofAmendment No. 3 Effective Date, in the maximum aggregate principal amount of $32,000,00025,000,000 under the Term Loan Credit Agreement, the proceeds of which shall repay in full any existing term loan Indebtedness.

Term Loan Agent” means Wells Fargo Bank, National AssociationPathlight Capital LLC, in its capacity as administrative agent and collateral agent under the Term Loan Credit Agreement, or any successor administrative agent and collateral agent under the Term Loan Credit Agreement.

Term Loan Borrowing Base” means the “Borrowing Base” (as such term is defined in the Term Loan Credit Agreement).

 

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Term Loan Credit Agreement” means that certain Term Loan Credit Agreement, dated of even date herewith,as of the Amendment No. 3, among the Lead Borrower, the other Borrowers, the guarantors named therein, the lenders party thereto and Wells Fargo Bank, National AssociationPathlight Capital LLC, as administrative agent and collateral agent, as the same may be amended, restated, modified, supplemented, extended, renewed, refunded, replaced or refinanced from time to time in one or more agreements (in each case with the same or new lenders, institutional investors or agents), including any agreement extending the maturity thereof or otherwise restructuring all or any portion of the Indebtedness thereunder or increasing the amount loaned or issued thereunder or altering the maturity thereof, in each case as and to the extent permitted by this Agreement and the Term Loan Intercreditor Agreement.

Term Loan Documents” means the Term Loan Credit Agreement and all security agreements, guarantees, pledge agreements and other agreements or instruments executed in connection therewith, in each case as the same may be amended, restated, modified, supplemented, extended, renewed, refunded, replaced or refinanced from time to time in one or more agreements as and to the extent permitted by this Agreement and the Term Loan Intercreditor Agreement.

“Term Loan Intercreditor Agreement” means the Intercreditor Agreement, dated the date of Amendment No. 3, among the Borrowers, the Guarantors, the Administrative Agent, and the Term Loan Agent in form and substance reasonably satisfactory to the Administrative Agent, as amended, restated, supplemented or otherwise modified from time to time in accordance therewith and herewith.  

Term Loan Obligations” means all of the Loan Parties’ “Obligations” (as such term is defined in the Term Loan Credit Agreement).

“Term Loan Lenders” means all lenders parties to the Term Loan Documents as “lenders” from time to time.

Term Loan Priority Collateral” means the Intellectual Property, fee owned Real Estate and fixtures of the Loan Parties.“Term Loan Priority Collateral” means only the following property of the Loan Parties: all Intellectual Property, Equipment, fee owned real estate and Fixtures of the Loan Parties, Incentive Program Assets, and any Deposit Accounts or Securities Accounts that are intended to solely contain Proceeds of the Term Priority Collateral, together with all rights, remedies, privileges, and insurance policies and certificates with respect to the foregoing, all products, Proceeds, substitutions, and accessions thereof or thereto and all cash, cash equivalents, checks, negotiable instruments, money, insurance proceeds therefrom, Instruments,  Accounts, books, Records and information in each case received as Proceeds of, or with respect to such books, Records and information, relating thereto (such Proceeds, “Term Priority Proceeds”).  For the avoidance of doubt, “Term Priority Collateral” shall include any such assets that, but for the application of Section 552 of the Bankruptcy Code (or any similar provision of any foreign Debtor Relief Laws) would be Term Priority Collateral.  Notwithstanding the foregoing, “Term Priority Collateral” shall exclude (a) Customer List and Marketing Service Receivables included in the Borrowing Base in an amount equal to the face amount of such Customer List and Marketing Service Receivables (net of Receivables Reserves applicable thereto) multiplied by 80% and (b) proceeds of business interruption insurance and

 

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other insurance and claims against third parties.  As of the Amendment No. 3 Effective Date, the Loan Parties do not own any Real Estate or maintain any Deposit Accounts or Securities Accounts that are intended to solely contain Proceeds of the Term Priority Collateral.

Term Loan Reserve” means an amount, at any time of calculation, equal to the difference (if positive) between (a) the then outstanding principal amount of Term Loans (as defined in the Term Loan Credit Agreement) and (b) the Term Loan Borrowing Base as reflected in the most recent Borrowing Base Certificate furnished by the Borrowers pursuant to this Agreement.

Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

Tranche A Revolving Loans” has the meaning specified in the Existing Loan Agreement.

Tranche A-1 Commitment” has the meaning specified in the Existing Loan Agreement.

Tranche A-1 Revolving Loan Lenders” has the meaning specified in the Existing Loan Agreement.

Tranche A-1 Revolving Loans” has the meaning specified in the Existing Loan Agreement.

Trading with the Enemy Act” has the meaning set forth in Section 10.18.

Type” means, with respect to a Committed Loan, its character as a Base Rate Loan or a LIBO Rate Loan.

UCC” or “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of New York provided, that, if a term is defined in Article 9 of the Uniform Commercial Code differently than in another Article thereof, the term shall have the meaning set forth in Article 9; provided further that, if by reason of mandatory provisions of law, perfection, or the effect of perfection or non-perfection, of a security interest in any Collateral or the availability of any remedy hereunder is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, “Uniform Commercial Code” means the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection or availability of such remedy, as the case may be.

UCP 600” means the rules of the Uniform Customs and Practice for Documentary Credits, as most recently published by the International Chamber of Commerce and in effect as of July 1, 2007.

UFCA” has the meaning specified in Section 10.22.

UFTA” has the meaning specified in Section 10.22.

 

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Unfunded Pension Liability” means the excess of a Pension Plan’s benefit liabilities under Section 4001(a)(16) of ERISA, over the current value of that Pension Plan’s assets, determined in accordance with the assumptions used for funding the Pension Plan pursuant to Section 412 of the Code for the applicable plan year.

Unintentional Overadvance” means an Overadvance which, to the Administrative Agent’s knowledge, did not constitute an Overadvance when made but which has become an Overadvance resulting from changed circumstances beyond the control of the Secured Parties, including, without limitation, a reduction in the Appraised Value of property or assets included in the Borrowing Base, increase in Reserves or misrepresentation by the Loan Parties.

United States” and “U.S.” mean the United States of America.

US Dollar Equivalent” means at any time (a) as to any amount denominated in Dollars, the amount thereof at such time, and (b) as to any amount denominated in any other currency, the equivalent amount in Dollars calculated by Administrative Agent by converting such foreign currency involved in such computation into Dollars at the spot rate for the purchase of Dollars with the applicable foreign currency as published in the Wall Street Journal in the “Exchange Rate” column under the heading “Currency Trading” (if currency is not quoted in the Wall Street Journal on such day, such other source as the Agent shall reasonably select) on the Business Day immediately prior to such determination.

Value” means, with respect to each category of Inventory, the Cost, consistent with the then current practices of Borrowers, without regard to intercompany profit or increases for currency exchange rates.

VAT” shall mean Value Added Tax imposed in Canada or any other jurisdiction and any equivalent tax applicable in any jurisdiction (including Goods and Services Tax, Harmonized Sales Tax and Québec Sales Tax).

Weighted Average Life to Maturity” shall mean, when applied to any Indebtedness at any date, the number of years obtained by dividing (a) the then outstanding principal amount of such Indebtedness into (b) the total of the product obtained by multiplying (i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment.

Wells Fargo” means Wells Fargo Bank, N.A. and its successors.

Wells Fargo Equipment Financing Documents” means the Master Lease No. 426197, dated September 30, 2014, by and between Wells Fargo Equipment Finance, Inc. and the Lead Borrower.

Wholly-Owned Subsidiary” means any Subsidiary of which all of the issued and outstanding shares of capital stock (other than directors’ qualifying shares and shares held by a resident of the jurisdiction, in each case, as required by law) or other Equity Interests are owned by an one or more of the Borrowers and any of the Borrowers’ other Wholly-Owned Subsidiaries at such time.

 

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1.02.Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

(a)  The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms.  The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.”  The word “will” shall be construed to have the same meaning and effect as the word “shall.”  Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, modified, supplemented, extended, renewed, restated or replaced (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (iii) the words “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b)  In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c)  Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

(d)  Any reference herein or in any other Loan Document to the “satisfaction”, “repayment”, “paid in full” or “payment in full” of the Obligations (including, the “Guaranteed Obligations” as defined in the Facility Guaranty and the “Secured Obligations” as defined in the Security Agreement) shall mean the repayment in Dollars in full in cash or immediately available funds (or, in the case of contingent reimbursement obligations with respect to Letters of Credit and Bank Products (other than Swap Contracts) and any other contingent Obligation, including indemnification obligations, providing Cash Collateralization) or other collateral as may be requested by the Administrative Agent of all of the Obligations (including the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Obligations) under Swap Contracts with a Lender or an Affiliate of Lender) other than (i) unasserted contingent indemnification Obligations, (ii) any Obligations relating to Bank Products (other than Swap Contracts) that, at such time, are allowed by the applicable Bank Product provider to remain outstanding without being required to be repaid or

 

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Cash Collateralized or other collateral as may be requested by the Administrative Agent, and (iii) any Obligations relating to Swap Contracts that, at such time, are allowed by the applicable provider of such Swap Contracts to remain outstanding without being required to be repaid.

(e)  For the purposes of determining the Term Loan Reserve, the Loan Parties and the Secured Parties agree that that the Administrative Agent shall be entitled to rely solely on the calculation thereof made by the Borrowers as reflected in the most recent Borrowing Base Certificate delivered by the Borrowers to the Administrative Agent hereunder, unless the Administrative Agent is notified in writing by the Term Loan Agent that such calculation is inaccurate and providing the Administrative Agent with the correct calculation of the Term Loan Reserve (“Term Loan Reserve Correction Notice”), and, in such event, the Administrative Agent shall be entitled to rely solely on the calculation of the Term Loan Reserve made by the Term Loan Agent as reflected in the Term Loan Reserve Correction Notice.  Administrative Agent promptly but in any event not later than two (2) Business Days implement any adjustments to the Term Loan Reserve as set forth in such Borrowing Base Certificate or such Term Loan Reserve Correction Notice, as the case may be.  Each of the Loan Parties agrees that Administrative Agent nor any Lender shall have any liability for relying on the calculation of the Term Loan Reserve as set forth in a Borrowing Base Certificate delivered by the Loan Parties or in the Term Loan Reserve Correction Notice delivered by the Term Loan Agent, as the case may be.  Each of the Loan Parties agrees that in the event of any discrepancy or dispute between the Term Secured Parties and the Loan Parties as to the amount of the Term Loan Reserve, the Administrative Agent and Secured Parties shall be entitled to rely solely on the calculation of the Term Loan Reserve as determined by the Term Loan Agent and shall have no liability to any Person for doing so.  Subject to the two (2) Business Day period of time for the Administrative Agent to implement any required adjustments, the Administrative Agent shall adjust the Term Loan Reserve hereunder as set forth therein.  In all cases, the Borrowing Base shall be calculated based upon the most recent Borrowing Base Certificate received by the Administrative Agent pursuant to this Credit Agreement prior to funding of loans or advances by any Borrower or the issuance, renewal or amendment  of a letter of credit by any Issuer.

1.03.Accounting Terms.

(a)  Generally.  All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein.

(b)  Changes in GAAP.  If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Lead Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Lead Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided, that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Lead Borrower shall provide to the Administrative Agent and the Lenders financial statements and

 

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other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

(c)  Lease.  Notwithstanding any other provision contained herein, (i) any lease that is treated as an operating lease for purposes of GAAP as of the Restatement Effective Date shall not be treated as Indebtedness or as a capital lease or Capital Lease Obligations and shall continue to be treated as an operating lease (and any future lease, if it were in effect on the Restatement Effective Date, that would be treated as an operating lease for purposes of GAAP as of the Restatement Effective Date shall be treated as an operating lease), in each case for the purposes of this Agreement and (ii) any obligation that is not treated as Indebtedness for the purposes of GAAP and otherwise included in the definition of “Indebtedness” as of the Restatement Effective Date shall not be treated as Indebtedness for purposes of this Agreement, in each case described in subclauses (i) and (ii), notwithstanding any actual or proposed change in or application of GAAP after the Restatement Effective Date.

1.04.Rounding. Any financial ratios required to be maintained by the Borrowers pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.05.Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

1.06.Letter of Credit Amounts. Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to be the Stated Amount of such Letter of Credit in effect at such time; provided, that, with respect to any Letter of Credit that, by its terms of any Issuer Documents related thereto, provides for one or more automatic increases in the Stated Amount thereof, the amount of such Letter of Credit shall be deemed to be the maximum Stated Amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum Stated Amount is in effect at such time.

1.07.Currency Equivalents Generally. Any amount specified in this Agreement (other than in Articles II, IX and X) or any of the other Loan Documents to be in Dollars shall also include the equivalent of such amount in any currency other than Dollars, such equivalent amount thereof in the applicable currency to be determined by the Administrative Agent at such time on the basis of the Spot Rate (as defined below) for the purchase of such currency with Dollars.  For purposes of this Section 1.07, the “Spot Rate” for a currency means the rate determined by the Administrative Agent to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 11:00 a.m. on the date two Business Days prior to the date of such determination; provided, that, the Administrative Agent may obtain such spot rate from another financial institution designated by the Administrative Agent if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency.

1.08.Determination of Compliance with Certain Covenants. For purposes of determining compliance with any negative covenant set forth in Section 7.01 (Liens), Section 7.02 (Investments), Section 7.03 (Indebtedness), Section 7.05 (Dispositions), Section 7.06 (Restricted Payments) and Section 7.07 (Prepayments of Indebtedness) (each of the foregoing the “Specified Negative Covenants”), (i) in the

 

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event that any Lien, Investment, Indebtedness, Disposition, Restricted Payment or prepayment of Indebtedness meets the criteria of more than one of the categories permitted under the Specified Negative Covenants, the Lead Borrower, in its sole discretion, may classify or reclassify such Lien, Investment, Indebtedness, Disposition, Restricted Payment or prepayment of Subordinated Indebtedness, as the case may be (or any portion thereof), and will only be required to include the amount and type of such Lien, Investment, Indebtedness, Disposition, Restricted Payment or prepayment of Subordinated Indebtedness, as the case may be, in one permitted category of Lien, Investment, Indebtedness, Disposition, Restricted Payment or prepayment of Subordinated Indebtedness, as the case may be and (ii) at the time of incurrence or reclassification, the Lead Borrower will be entitled to divide and classify such Lien, Investment, Indebtedness, Disposition, Restricted Payment or prepayment of Subordinated Indebtedness, as the case may be, among the relevant categories permitted under the Specified Negative Covenants.

ARTICLE II
THE COMMITMENTS AND CREDIT EXTENSIONS

2.01.Committed Loans; Reserves.

(a)  Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “Revolving Loan”) to the Borrowers from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the lesser of (x) the amount of such Lender’s Commitment, or (y) such Lender’s Applicable Percentage of the Borrowing Base; subject in each case to the following limitations:

(i)after giving effect to any Committed Borrowing, the Total Outstandings shall not exceed the Loan Cap,

(ii)Reserved,

(iii)after giving effect to any Committed Borrowing pursuant to which Revolving Loans are requested, the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment,

(iv)The Outstanding Amount of all L/C Obligations shall not at any time exceed the Letter of Credit Sublimit,

(v)Within the limits of each Lender’s Revolving Loan  Commitment, and subject to the other terms and conditions hereof, Borrowers may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01.  Revolving Loans may be Base Rate Loans or LIBO Rate Loans, as further provided herein.

(b)  Reserved.

(c)  The following are the Inventory Reserves and Availability Reserves as of the Restatement Effective Date:

 

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(i)Shrink Reserve (an Inventory Reserve): An amount equal to the amount set forth on the Borrowing Base Certificate delivered on the Restatement Effective Date;

(ii)Rent Reserve (an Availability Reserve): An amount equal to one (1) month’s rent for all of the Borrowers’ Store Leased Locations in each Landlord Lien State, other than Store Leased Locations with respect to which the Administrative Agent has received a Collateral Access Agreement in form reasonably satisfactory to the Administrative Agent;

(iii)Customer Deposits Reserve (an Availability Reserve): An amount equal to thirty-three percent (33%) of the Customer Deposits;

(iv)Priority Payables Reserve (an Availability Reserve); and

(v)Customer Credit Liabilities Reserve (an Availability Reserve): An amount equal to thirty-three percent (33%) of the Customer Credit Liabilities as reflected in the Borrowers’ books and records.

(d)  The Administrative Agent shall have the right, at any time and from time to time after November 1, 2012 in its discretion to establish, modify or eliminate Reserves against the Borrowing Base.  The Administrative Agent upon three (3) Business Days prior notice to the Lead Borrower with respect to the establishment of any new categories of Reserves or changes in the methodology of the calculation of an existing category of Reserves (during which period the Administrative Agent shall be available to discuss any such proposed new category of Reserves or proposed changes to methodology with Borrowers and Borrowers may take such action as may be required so that the event, condition or matter that is the basis for such reserve or change no longer exists in a manner and to the extent reasonably satisfactory to Administrative Agent); provided, that, no such prior notice shall be required (i) at any time that an Event of Default is continuing, (ii) for changes to any Reserves resulting solely by virtue of mathematical calculations of the amount of the Reserve in accordance with the methodology of calculation previously utilized (such as, but not limited to, rent and Customer Credit Liabilities), or (iii) for changes to Reserves or establishment of additional Reserves if a Material Adverse Effect has occurred or it would be reasonably likely that a Material Adverse Effect to the Lenders would occur were such Reserve not changed or established prior to the expiration of such three (3) Business Day period. The amount of any Reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition or other matter which is the basis for such reserve as determined by the Administrative Agent in its Permitted Discretion. The Administrative Agent shall not establish any Reserves that are duplicative of any other Reserves or items that are otherwise addressed or excluded through eligibility criteria.

 

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2.02.Borrowings, Conversions and Continuations of Committed Loans.

(a)  Committed Loans (other than Swing Line Loans) shall be either Base Rate Loans or LIBO Rate Loans as the Lead Borrower may request subject to and in accordance with this Section 2.02.  All Swing Line Loans shall be only Base Rate Loans.  Subject to the other provisions of this Section 2.02, Committed Borrowings of more than one Type may be incurred at the same time.

(b)  Each Committed Borrowing, each conversion of Committed Loans from one Type to the other, and each continuation of LIBO Rate Loans shall be made upon the Lead Borrower’s irrevocable notice to the Administrative Agent, which may be given by telephone.  Each such notice must be received by the Administrative Agent not later than 11:00 a.m. (i)  three Business Days prior to the requested date of any Borrowing of, conversion to or continuation of LIBO Rate Loans or of any conversion of LIBO Rate Loans to Base Rate Loans, and (ii) on the Business Day of the request of any Borrowing of Base Rate Loans.  Each telephonic notice by the Lead Borrower pursuant to this Section 2.02(b) must be confirmed promptly by delivery to the Administrative Agent of a written Committed Loan Notice, appropriately completed and signed by a Responsible Officer of the Lead Borrower.  Each Borrowing of, conversion to or continuation of LIBO Rate Loans shall be in a principal amount of $1,000,000 or a whole multiple of $500,000 in excess thereof.  Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Loans shall be in a principal amount of $200,000 or a whole multiple of $100,000 in excess thereof.  Each Committed Loan Notice (whether telephonic or written) shall specify (i) whether the Lead Borrower is requesting a Committed Borrowing, a conversion of Committed Loans from one Type to the other, or a continuation of LIBO Rate Loans, (ii) the requested date of the Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) whether such Committed Loan is a Revolving Loan or Swing Line Loan, (v) the Type of Committed Loans to be borrowed or to which existing Committed Loans are to be converted, and (vi) if applicable, the duration of the Interest Period with respect thereto.  If the Lead Borrower fails to specify a Type of Committed Loan in a Committed Loan Notice or if the Lead Borrower fails to give a timely notice requesting a conversion or continuation, then the applicable Committed Loans shall be made as, or converted to, Base Rate Loans.  Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable LIBO Rate Loans.  If the Lead Borrower requests a Borrowing of, conversion to, or continuation of LIBO Rate Loans in any such Committed Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.  Notwithstanding anything to the contrary herein, a Swing Line Loan may not be converted to a LIBO Rate Loan.

(c)  Following receipt of a Committed Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Committed Loans, and if no timely notice of a conversion or continuation is provided by the Lead Borrower, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in Section 2.02(b).  In the case of a Committed Borrowing, each Lender shall make the amount of its Committed Loan available to the Administrative Agent in immediately available funds at the Administrative Agent’s Office not later than 1:00 p.m. on the Business Day specified in the applicable Committed Loan Notice.  

 

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Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall use reasonable efforts to make all funds so received available to the Borrowers in like funds by no later than 4:00 p.m. on the day of receipt by the Administrative Agent either by (i) crediting the account of the Lead Borrower on the books of Wells Fargo with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Lead Borrower.

(d)  The Administrative Agent, without the request or consent of the Lead Borrower, may advance any interest, fee, service charge (including direct wire fees), Secured Party Expenses, or other payment to which any Secured Party is entitled from the Loan Parties pursuant hereto or any other Loan Document and may charge the same to the Loan Account notwithstanding that an Overadvance may result thereby.  The Administrative Agent shall advise the Lead Borrower of any such advance or charge promptly after the making thereof.  Such action on the part of the Administrative Agent shall not constitute a waiver of the Administrative Agent’s rights and the Borrowers’ obligations under Section 2.05(c).  Any amount which is added to the principal balance of the Loan Account as provided in this Section 2.02(d) shall bear interest at the interest rate then and thereafter applicable to Base Rate Loans.

(e)  Except as otherwise provided herein, a LIBO Rate Loan may be continued or converted only on the last day of an Interest Period for such LIBO Rate Loan.  During the existence of a Default or Event of Default, no Loans may be requested as, converted to or continued as LIBO Rate Loans without the Consent of the Required Lenders.

(f)  The Administrative Agent shall promptly notify the Lead Borrower and the Lenders of the interest rate applicable to any Interest Period for LIBO Rate Loans upon determination of such interest rate.  At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Lead Borrower and the Lenders of any change in Wells Fargo’s prime rate used in determining the Base Rate promptly following the public announcement of such change.

(g)  After giving effect to all Committed Borrowings, all conversions of Committed Loans from one Type to the other, and all continuations of Committed Loans as the same Type, there shall not be more than five (5) Interest Periods in effect with respect to LIBO Rate Loans.

(h)  The Administrative Agent, the Lenders, the Swing Line Lender and the L/C Issuer shall have no obligation to make any Loan or to provide any Letter of Credit if an Overadvance would result.  The Administrative Agent may, in its discretion, make Permitted Overadvances without the consent of the Borrowers, the Lenders, the Swing Line Lender and the L/C Issuer and the Borrowers and each Lender shall be bound thereby.  Any Permitted Overadvance may constitute a Swing Line Loan. A Permitted Overadvance is for the account of the Borrowers and shall constitute a Base Rate Loan and an Obligation and shall be repaid by the Borrowers in accordance with the provisions of Section 2.05(c).  The making of any such Permitted Overadvance on any one occasion shall not obligate the Administrative Agent or any Lender to make or permit any Permitted Overadvance on any other occasion or to permit such Permitted Overadvances to remain outstanding. The making by the Administrative Agent of a

 

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Permitted Overadvance shall not modify or abrogate any of the provisions of Section 2.03 regarding the Lenders’ obligations to purchase participations with respect to Letter of Credits or of Section 2.04 regarding the Lenders’ obligations to purchase participations with respect to Swing Line Loans.  The Administrative Agent shall have no liability for, and no Loan Party or Secured Party shall have the right to, or shall, bring any claim of any kind whatsoever against the Administrative Agent with respect to Unintentional Overadvances regardless of the amount of any such Overadvance(s).

2.03.Letters of Credit.

(a)  The Letter of Credit Commitment.

(i)Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Restatement Effective Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of the Borrowers, and to amend or extend Letters of Credit previously issued by it, in accordance with Section 2.03(b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of the Borrowers and any drawings thereunder; provided, that, after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (1) the Total Outstandings shall not exceed the Loan Cap, (2) the aggregate Outstanding Amount of the Committed Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, (3) the aggregate Outstanding Amount of the Revolving Loan Loans of any Lender, plus such Lender’s Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender’s Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender’s Commitment, and (4) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit.  Each request by the Lead Borrower for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Borrowers that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence.  Within the foregoing limits, and subject to the terms and conditions hereof, the Borrowers’ ability to obtain Letters of Credit shall be fully revolving, and accordingly the Borrowers may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed.  Any L/C Issuer (other than Wells Fargo or any of its Affiliates) shall notify the Administrative Agent in writing on each Business Day of all Letters of Credit issued on the prior Business Day by such L/C Issuer, provided, that, (A) until the Administrative Agent advises any such Issuing Bank that the provisions of Section 4.02 are not satisfied, or (B) the aggregate amount of the Letters of Credit issued in any such week exceeds such amount as shall be agreed by the Administrative Agent and the L/C Issuer, such L/C Issuer shall be required to so notify the Administrative Agent in writing only once each week of the Letters of Credit issued by such L/C Issuer during the immediately preceding week as well as the daily amounts outstanding for the prior week, such notice to be furnished on such day of the week as the Administrative Agent and such L/C Issuer may agree.  

 

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(ii)No Letter of Credit shall be issued if, subject to Section 2.03(b)(iii), the expiry date of such requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless either such Letter of Credit is Cash Collateralized on or prior to the date of issuance of such Letter of Credit (or such later date as to which the Administrative Agent may agree) or all the Lenders have approved such expiry date.

(iii)No Letter of Credit shall be issued without the prior consent of the Administrative Agent if:

(A)any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing such Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon the L/C Issuer with respect to such Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Restatement Effective Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Restatement Effective Date and which the L/C Issuer in good faith deems material to it;

(B)the issuance of such Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;

(C)except as otherwise agreed by the Administrative Agent and the L/C Issuer, such Letter of Credit is in an initial Stated Amount less than $100,000, in the case of a Commercial Letter of Credit, or $500,000, in the case of a Standby Letter of Credit;

(D)such Letter of Credit is to be denominated in a currency other than Dollars; provided, that, if the L/C Issuer, in its discretion, issues a Letter of Credit denominated in a currency other than Dollars, all reimbursements by the Borrowers of the honoring of any drawing under such Letter of Credit shall be paid in Dollars based on the Spot Rate;

(E)such Letter of Credit contains any provisions for automatic reinstatement of the Stated Amount after any drawing thereunder; or

(F)a default of any Lender’s obligations to fund under Section 2.03(c) exists or any Lender is at such time a Defaulting Lender hereunder, unless the Administrative Agent or L/C Issuer has entered into reasonably satisfactory arrangements with the Borrowers or such Lender to eliminate the L/C Issuer’s risk with respect to such Lender.

(iv)The L/C Issuer shall not amend any Letter of Credit if (A) the L/C Issuer would not be permitted at such time to issue such Letter of Credit in its amended form under the terms hereof or (B) the beneficiary of such Letter of Credit does not accept the proposed amendment to such Letter of Credit.

 

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(v)The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.

(b)  Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

(i)Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Lead Borrower delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by a Responsible Officer of the Lead Borrower.  Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 11:00 a.m. at least two Business Days (or such other date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be.  In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the Administrative Agent and the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; and (G) such other matters as the Administrative Agent or L/C Issuer may require.  In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail reasonably satisfactory to the Administrative Agent and the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the Administrative Agent or the L/C Issuer may require.  Additionally, the Lead Borrower shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, and any Issuer Documents (including, if requested by the L/C Issuer, a Standby letter of Credit Agreement or Commercial Letter of Credit Agreement, as applicable), as the L/C Issuer or the Administrative Agent may require.

(ii)Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Lead Borrower and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof.  Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the applicable Borrower or enter

 

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into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer’s usual and customary business practices.  Immediately upon the issuance or amendment of each Letter of Credit, each Lender shall be deemed to (without any further action), and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer, without recourse or warranty, a risk participation in such Letter of Credit in an amount equal to the product of such Lender’s Applicable Percentage times the Stated Amount of such Letter of Credit.  Upon any change in the Commitments under this Agreement, it is hereby agreed that with respect to all L/C Obligations, there shall be an automatic adjustment to the participations hereby created to reflect the new Applicable Percentages of the assigning and assignee Lenders.

(iii)If