Exhibit 10.22
SECOND AMENDMENT TO
AMENDED AND RESTATED FINANCING AGREEMENT
This Second Amendment to Amended and Restated Financing Agreement
("Amendment") is entered into as of January 12, 2004, by and among FACTORY 2-U
STORES, INC., a Delaware corporation ("Company"), THE CIT GROUP/BUSINESS CREDIT,
INC., a New York corporation ("CITBC"), in its capacity as Agent for the Lenders
under the Financing Agreement ("Agent"); CITBC in its capacity as the Tranche A
Lender (together with any other Persons who may subsequently become a Tranche A
Lender, the "Tranche A Lenders"); and GB RETAIL FUNDING, LLC, a Massachusetts
limited liability company in its capacity as the Tranche B Lender (together with
any other Persons who may subsequently become a Tranche B Lender, the "Tranche B
Lenders" and together with the Tranche A Lenders, the "Lenders").
A. Agent, Company and Lenders have previously entered into that certain
Amended and Restated Financing Agreement dated as of April 10, 2003 (as amended
and restated by that certain First Amendment to Amended and Restated Financing
Agreement dated as of December 22, 2003, the "Financing Agreement"), pursuant to
which the Lenders have provided Company with certain loans and other financial
accommodations.
B. Company has requested that Agent and Lenders amend the Financing
Agreement pursuant to the terms and subject to the conditions set forth in this
Amendment.
C. Agent and Lenders are willing to amend the Financing Agreement on the
terms and subject to the conditions set forth in this Amendment.
NOW THEREFORE, in consideration of the foregoing and the terms and
conditions hereof, the parties do hereto agree as follows, effective as of the
date set forth above:
1. Definitions. Terms used herein, unless otherwise defined herein, shall
have the meanings set forth in the Financing Agreement.
2. Amendments to Financing Agreement.
(a) Section 1 of the Financing Agreement is hereby amended by deleting
the definition of "Overall Borrowing Base" in such Section in its entirety
and replacing it with the following:
"Overall Borrowing Base shall mean the Tranche A Borrowing Base."
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(b) Section 1 of the Financing Agreement is hereby amended by deleting
the definition of "Overall Inventory Advance Percentage" in such Section
without replacement.
(c) Section 1 of the Financing Agreement is hereby amended by deleting
the definition of "Tranche B Early Termination Fee" in such Section and
replacing it with the following: "Tranche B Early Termination Fee" shall
mean $75,000; provided, however, that Tranche B Lender agrees that it shall
pay $25,000 in outstanding legal fees due to its counsel for services
rendered through January 12, 2004; and provided further, however, that
Tranche B Lender's agreement to pay such legal fees shall not relieve
Borrower from the obligation under the Financing Agreement to pay Tranche B
Lender's legal fees and expenses for services rendered from and after
January 13, 2004.
(d) Section 1 of the Financing Agreement is hereby amended by deleting
the definition of "Tranche B Fees" in such Section without replacement.
(e) Section 8.14 of the Financing Agreement is hereby amended by
deleting all language after the word "termination" in the fourth line
thereof.
(f) Section 8.15 of the Financing Agreement is hereby amended by
deleting the first sentence of such Section in its entirety and replacing
with the following:
"8.15 Notwithstanding anything to the contrary as may be
contained in this Agreement or any of the other Loan Documents, the
full unpaid balance of Tranche B Loan I shall be due and payable on or
before January 12, 2004, and the Company and the Tranche A Lenders
hereby agree that, so long as no Event of Default shall have occurred
and be continuing or shall result therefrom, up to $4,000,000 of such
amount shall be paid on or before such date by the Tranche A Lenders
on behalf of the Company as a Revolving Loan."
3. Conditions Precedent. The effectiveness of the foregoing amendment shall
be, and hereby is, subject to the fulfillment to Agent's satisfaction of the
Conditions Precedent. The "Conditions Precedent" shall mean each of the
following:
(a) Receipt by Agent of this Amendment duly executed by each of the
parties hereto; and
(b) Receipt by Agent of that certain letter agreement by and among
Tranche A Lender and Tranche B Lender, in form and substance satisfactory
to Agent.
5. Miscellaneous.
(a) Reference to and Effect on the Financing Agreement.
(i) Except as specifically amended by this Amendment and the
documents executed and delivered in connection herewith, the Financing
Agreement shall remain in full force and effect and is hereby ratified
and confirmed.
(ii) The execution and delivery of this Amendment shall not,
except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of
Agent or any Lender under the Financing Agreement or any agreement or
document executed in connection therewith.
(iii) Upon the Conditions Precedent being satisfied, this
Amendment shall be construed as one with the existing Financing
Agreement, and the existing Financing Agreement shall, where the
context requires, be read and construed throughout so as to
incorporate this Amendment.
(b) Headings. Section and subsection headings in this Amendment are
included for convenience of reference only and shall not constitute a part
of this Amendment for any other purpose or be given any substantive effect.
(d) Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(e) Governing Law. This Amendment shall be governed by and construed
according to the laws of the State of California.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the date first above written.
Company:
FACTORY 2-U STORES, INC.
By: /s/Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Chief Executive Officer
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Agent and Tranche A Lender:
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Xxxx Xxxxxxx
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Name: Xxxx Xxxxxxx
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Title: Vice President
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Tranche B Lender:
GB RETAIL FUNDING, LLC
By:/s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
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Title: Managing Director
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