EXHIBIT 99.2
EXECUTION COPY
AMENDMENT
This AMENDMENT (this "Amendment") is dated as of May 27, 2004 and is
entered into by and between XXX RIVER INC., a Georgia corporation, as
debtor and debtor in possession (the "Borrower") and DEUTSCHE BANK TRUST
COMPANY AMERICAS, in its capacity as the Agent for the Lenders under the
Credit Agreement referred to below (in such capacity, the "Agent").
RECITALS:
WHEREAS, pursuant to that certain Post-Petition Credit Agreement,
dated as of April 1, 2004, by and among (among others) the Borrower, the
Agent and the lenders from time to time party thereto (collectively, the
"Lenders") (as amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement"), the Lenders have agreed to make
certain Loans and issue certain Letters of Credit to and for the benefit of
the Borrower;
WHEREAS, the Borrower has requested that the Majority Lenders agree to
amend the Credit Agreement as more particularly described below;
WHEREAS, the Agent, upon the written consent of the Majority Lenders,
is willing to so amend the Credit Agreement on the terms and subject to the
conditions set forth in this Amendment; and
WHEREAS, unless otherwise defined herein, capitalized terms used in
this Amendment shall have the same definitions as are contained in the
Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and incorporating the
foregoing recitals herein, the parties hereto agree as follows.
ARTICLE I.
AMENDMENT
Subject to the terms and conditions set forth in this Amendment
(including, without limitation, Article III) and in reliance upon the
representations and warranties of the Borrower set forth herein, the Credit
Agreement is hereby amended as follows:
1.1 Additional Defined Terms. Section 1.1 of the Credit Agreement is
hereby amended by inserting the following defined terms in appropriate
alphabetical order:
(a) ""May 2004 Amendment" shall mean the amendment dated as of
May 27, 2004 by and among the Borrower and the Agent (at the direction of
the Majority Lenders)."
(b) ""May 20 Budget" shall mean the budget delivered on May 20,
2004 for the period ending July 17, 2004, which budget is attached as Annex
I to the May 2004 Amendment."
1.2 Minimum Operating EBITDA. Section 8.1(a) of the Credit Agreement
is hereby amended by deleting the table therein and replacing it with the
table below:
Fiscal Period Minimum Operating EBITDA
The two month fiscal period (in Dollars)
ending June 5, 2004 1,459,000
The three month fiscal period
ending July 3, 2004 2,885,000
The four month fiscal period
ending August 7, 2004 4,499,000
The five month fiscal period
ending September 4, 2004 5,878,000
The six month fiscal period
ending October 2, 2004 8,594,000
The seven month fiscal period
ending November 6, 2004 11,254,000
The eight month fiscal period
ending December 4, 2004 13,284,000
The nine month fiscal period
ending January 1, 2005 14,883,000
The ten month fiscal period
ending January 29, 2005 17,379,000
The eleven month fiscal
period ending March 5, 2005 19,603,000
The twelve month fiscal
period ending April 2, 2005 21,106,000
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1.3 Budget. (a) Clause (i) of Section 8.23(b) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it
with the following new clause (i):
"(i) collect aggregate cash receipts during any week in an amount less
than (A) 80% of the aggregate amount of cash receipts set forth in the May
20 Budget for any such week ending on or after May 22, 2004 up to and
excluding the week ending July 17, 2004 and (B) 80% of the aggregate amount
of cash receipts set forth in the Budget for any week ending on or after
July 17, 2004".
(b) Section 8.23(b)(ii) of the Credit Agreement is hereby
amended by inserting the following language after the words "for such week"
in the third sentence thereof:
"provided, however, that for the week ending June 19, 2004, the
Borrower and its Subsidiaries may make operating disbursements in excess of
110% of the aggregate amount of operating disbursements set forth in the
Budget for such week so long as such excess does not exceed $1,250,000 in
actual Dollars".
(c) Section 8.23(c) of the Credit Agreement is hereby amended by
deleting the paragraph in its entirety and replacing it with the following
new paragraph:
"(c) At any time during the term of this Agreement, the Borrower and
its Subsidiaries shall not (i) collect aggregate cash receipts in an amount
less than (A) 90% of the aggregate amount of cash receipts set forth in the
May 20 Budget for any period on or after the week ending May 22, 2004 up to
and including the period ending on July 17, 2004 and (B) 90% of the
aggregate amount of cash receipts set forth in the Budget for any period
after the week ending July 17, 2004 (provided that this Section 8.23(c)(i)
will not apply unless net operating cash flow is more than: (t) $2,000,000
less than the net operating cash flow set forth in the Budget for any
period other than the periods specified in clauses (u), (v), (w), (x), (y)
and (z) below, (u) $2,500,000 less than the net operating cash flow set
forth in the Budget for the period ending June 12, 2004, (v) $5,000,000
less than the net operating cash flow set forth in the Budget for the
period ending June 19, 2004, (w) $5,500,000 less than the net operating
cash flow set forth in the Budget for the period ending June 26, 2004, (x)
$6,500,000 less than the net operating cash flow set forth in the Budget
for the period ending July 3, 2004, (y) $5,500,000 less than the net
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operating cash flow set forth in the Budget for the period ending July 10,
2004 or (z) $5,500,000 less than the net operating cash flow set forth in
the Budget for the period ending July 17, 2004) or (ii) make operating
disbursements in an aggregate amount which is in excess of (A) 110% of the
aggregate amount of operating disbursements set forth in the Budget for
such period ending May 1, 2004 and (B) 105% of the aggregate amount of
operating disbursements set forth in the Budget for such period on or after
May 2, 2004.".
(d) Section 8.23(d) of the Credit Agreement is hereby amended by
inserting the following language after the words "such 16-week period" in
the last sentence thereof:
"(other than with respect to the periods ending (i) June 19, 2004,
June 26, 2004, July 10, 2004 and July 17, 2004, as to which periods the
Borrower and its Subsidiaries shall not permit net operating cash flow for
any such period to be more than $6,000,000 less than the net operating cash
flow set forth in the Budget for such period and (ii) July 3, 2004, as to
which period the Borrower and its Subsidiaries shall not permit net
operating cash flow for such period to be more than $7,500,000 less than
the net operating cash flow set forth in the Budget for such period)".
1.4 Employees. Section 8.25 of the Credit Agreement is hereby
amended by adding the following sentence at the end thereof:
"Notwithstanding the previous sentence, so long as no Default or Event
of Default shall have occurred and be continuing, the Borrower shall be
permitted to pay retention bonuses to any "Tier 3", "Tier 4" and "Tier 5"
employees that are approved in an order signed by the Bankruptcy Court,
which order shall be in form and substance reasonably satisfactory to the
Agent, which payments shall be made in instalment payments in an amount not
to exceed (i) $584,670, in the aggregate for all such employees, such
payment to be made on or after July 1, 2004 for the first such instalment,
(ii) $584,670, in the aggregate for all such employees, such payment to be
made on or after the earlier of October 1, 2004 and the date on which the
Plan of Reorganization has been filed with the Bankruptcy Court for the
second such instalment and (iii) $1,169,340, in the aggregate for all such
employees, such payment to be made on or after the date on which the Plan
of Reorganization shall have become final and effective for the final such
instalment.".
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ARTICLE II.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Agent and the other
Lenders as of the date hereof as follows:
2.1 Corporate Power. The Borrower has the requisite corporate power
and authority to execute and deliver this Amendment and to perform its
obligations hereunder and under the Credit Documents (as amended hereby).
The execution, delivery and performance by the Borrower of this Amendment,
and the performance by the Borrower and by each other Credit Party of each
Credit Document (as amended hereby) to which it is a party have been duly
approved by all necessary corporate action of such Credit Party and no
other corporate proceedings on the part of such Credit Party are necessary
to consummate such transactions.
2.2 Authorization and Enforceability. This Amendment has been duly
executed and delivered by the Borrower. Each of this Amendment and each
Credit Document (as amended hereby) is the legal, valid and binding
obligation of each Credit Party party hereto and thereto, enforceable
against such Credit Party in accordance with its terms, and is in full
force and effect.
2.3 Defaults. After giving effect to this Amendment, no event has
occurred and is continuing that constitutes a Default or Event of Default.
2.4 Schedules and other Information. All information contained in
any schedule attached to this Amendment or subsequently delivered pursuant
to this Amendment is or will be complete and accurate as of the date hereof
or thereof.
ARTICLE III.
CONDITIONS TO EFFECTIVENESS
This Agreement shall not be effective until each of the following
conditions precedent shall have been satisfied.
3.1 Majority Lender Consent. The Majority Lenders shall have
consented in writing to the execution and delivery of this Amendment by the
Agent (or the Agent shall have received evidence satisfactory to it that
such written consent has been provided).
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3.2 Execution. The Agent, on behalf of the Lenders, shall have
executed this Amendment and shall have received counterparts of this
Amendment executed by the Borrower. The Agent shall have received
acknowledgments in form and substance satisfactory to it executed by each
Guarantor with respect to this Amendment.
3.3 Representations and Warranties. Each of the representations and
warranties in Article II above shall be true and correct as of the date of
the effectiveness of this Amendment.
3.4 Payment of Fees and Expenses. The Borrower shall have paid all
of the accrued fees and expenses of the Agent and the Lenders (including,
without limitation, the fees and disbursements of counsel for the Agent)
for which invoices shall have been submitted.
ARTICLE IV.
MISCELLANEOUS.
4.1 Reference to and Effect on Credit Documents. On and after the
effectiveness of this Amendment, each reference in the Credit Agreement to
"this Agreement", "hereunder", "hereof" or words of similar import
referring to the Credit Agreement, and each reference in each of the other
Credit Documents to "the Credit Agreement", "thereunder", "thereof" or
words of similar import referring to the Credit Agreement, shall mean and
be a reference to the Credit Agreement as amended by this Amendment.
Except as otherwise expressly set forth herein, the Credit Agreement and
each other Credit Document shall continue to be, and shall remain,
unaltered and in full force and effect in accordance with their terms and
are hereby confirmed and ratified. To the extent that any existing
provision of the Credit Agreement or any other Credit Document is
inconsistent with the specific provisions of this Amendment, the provisions
of this Amendment shall control.
4.2 No Novation. This Amendment shall not be deemed or construed to be a
satisfaction, restatement, novation or release of the Credit Agreement or
of any of the other Credit Documents or a waiver by the Agent or any Lender
of any of the defenses, rights or remedies of the Agent and the Lenders
under the Credit Agreement or any of the other Credit Documents or at law
or in equity or otherwise.
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4.3 Reaffirmation. The Borrower hereby reaffirms each and every
covenant, condition, obligation and provision set forth in the Credit
Documents.
4.4 Additional Action. The parties agree to take such further action
to execute and deliver to each other such additional agreements,
instruments and documents as may reasonably be required to carry out the
purposes and intent of this Amendment.
4.5 Headings. Section and Article headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of
this Amendment for any other purpose.
4.6 Severability. Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and
any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
4.7 Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.
4.8 Counterparts. This Amendment may be executed in any number of
counterparts, and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original,
but all such counterparts together shall constitute but one and the same
instrument. Delivery of an executed counterpart of a signature page to
this Amendment by facsimile shall be effective as delivery of a manually
executed counterpart of this Amendment.
4.9 Construction. The Borrower acknowledges that it has been
represented by its own legal counsel in connection with the negotiation,
execution and delivery of this Amendment, that it has exercised independent
judgment with respect to this Amendment, and that it has not relied on the
Agent or any Lender or on the Agent's or any Lender's counsel for any
advice with respect to this Amendment.
[signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed and delivered by their proper and duly authorized officers
as of the date first set forth above.
BORROWER:
XXX RIVER INC., a Georgia corporation,
as debtor and debtor in possession
By: _______________________________
Name:
Title:
AGENT:
DEUTSCHE BANK TRUST COMPANY AMERICAS, in its
capacity as Agent for and on behalf of the
Lenders
By: _______________________________
Name:
Title:
ACKNOWLEDGED BY:
GUARANTORS:
XXX RIVER INTERNATIONAL LTD., a Virginia
corporation, as debtor and debtor in possession
By: _______________________________
Name:
Title:
XXX RIVER FACTORY STORES, INC., a
Georgia corporation, as debtor and debtor in possession
By: _______________________________
Name:
Title:
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[signature page continues]
THE XXXX COMPANY LLC, a Delaware limited
liability company, as debtor and debtor in possession
By: _______________________________
Name:
Title:
