Exhibit 10.3
[EXECUTION COPY]
FIRST AMENDMENT
TO
INTERCREDITOR AND LIEN
SUBORDINATION AGREEMENT
THIS FIRST AMENDMENT TO
INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT (this “
Amendment ”) is entered into as of January 14, 2005,
by and among S.A.C. CAPITAL ASSOCIATES, LLC, a limited liability
company organized under the laws of Anguila, as
“Administrative Agent” and “Collateral
Agent” for all Second Lien Lenders party to the Second Lien
Credit Agreement as described more fully in the Intercreditor
Agreement referred to below (the “ Second Lien Agent
”), THE WET SEAL, INC., a Delaware corporation (the “
Lead Borrower ”), THE WET SEAL RETAIL, INC., a
Delaware corporation (“ Wet Seal Retail ”), WET
SEAL CATALOG, INC., a Delaware corporation (collectively, with Wet
Seal Retail and the Lead Borrower, the “ Companies
”), WET SEAL GC, INC., a Virginia corporation (the “
Facility Guarantor ”), and FLEET RETAIL GROUP, INC.,
as “Administrative Agent” and “Collateral
Agent” for all of the First Lien Lenders party to the First
Lien Credit Agreement as described more fully in the Intercreditor
Agreement referred to below (the “ First Lien Agent
”). All capitalized terms used but not defined herein shall
have the meanings ascribed to such terms in the Intercreditor
Agreement referred to below.
R E C I T A L S
A. Concurrently with the
Companies’, the Facility Guarantor’s and the Second
Lien Agent’s execution and delivery of that certain Second
Lien Credit Agreement with the Second Lien Lenders, the Companies,
the Facility Guarantor, the Second Lien Agent and the First Lien
Agent executed an Intercreditor and Lien Subordination Agreement,
dated as of November 9, 2004 (as amended and in effect from time to
time, the “ Intercreditor Agreement
”);
B. The Companies, the Facility
Guarantor and the Second Lien Agent have requested that the Second
Lien Credit Agreement be amended to provide, among other things,
that the Maturity Date (as defined in the Second Lien Credit
Agreement) be extended; and
C. The First Lien Agent and the
Second Lien Agent have agreed, subject to the terms and conditions
provided herein, to amend the Intercreditor Agreement as provided
herein.
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NOW, THEREFORE
, for good and valuable
consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto hereby agree as
follows:
1. Amendments to Intercreditor
Agreement .
(a) Section 1 of the Intercreditor
Agreement is hereby amended by adding the following the new
definition of “Second Amendment to First Lien Credit
Agreement Effective Date” in the appropriate alphabetical
order:
““ Second
Amendment to First Lien Credit Agreement Effective Date
” means the date on which all conditions precedent to the
Second Amendment to Amended and Restated Credit Agreement, dated as
of January 14, 2005, among the Credit Parties, the First Lien Agent
and the First Lien Lenders, have been satisfied.”
(b) Section 1 of the Intercreditor
Agreement is hereby further modified by deleting clause (ii) in the
definition of “Maximum First Lien Debt” and
substituting in lieu thereof the following new clause
(ii):
“(ii) the result of (A) the
greater of the (I) Borrowing Base and (II) Term Loan Borrowing Base
(as such terms (including the component definitions thereof) are
defined in the First Lien Credit Agreement as of the Second
Amendment to First Lien Credit Agreement Effective Date,
minus (B) the Minimum Required Excess Availability (as such
term (including the component definitions thereof) is defined in
the First Lien Credit Agreement as of the Second Amendment to First
Lien Credit Agreement Effective Date)”.
(c) Section 1 of the Intercreditor
Agreement is hereby further modified by deleting the definition of
“Paid in Full” or “Payment in Full” and
substituting in lieu thereof the following new
definition:
““ Paid in
Full ” or “ Payment in
Full ” shall mean the payment in full in cash of all
First Lien Debt (other than contingent indemnification obligations
to the extent no bona fide claim giving rise thereto has been
asserted); provided , that cash collateral in an
amount of 103% of the aggregate undrawn amount of the letters of
credit provided under the First Lien Debt Documents may be
furnished in lieu of payment in cash for such related Letter of
Credit Liabilities; and termination of all commitments to lend or
make other financial accommodations under the First Lien Debt
Documents.”
(d) Section 2.3 of the Intercreditor
Agreement is hereby modified by deleting all references to
“ninety (90)” therein and substituting in lieu thereof
a reference to “one hundred and twenty
(120)”.
(e) Section 3.2(i) of the
Intercreditor Agreement is hereby amended by deleting the
parenthetical “(other than as a result of the capitalization
of interest”) and substituting in lieu thereof the following
new parenthetical: “(other than as a result of the
capitalization of interest and the capitalization of other
amounts)”.
(f) Section 3.2(ii) of the
Intercreditor Agreement is hereby amended by deleting the date
“April 29, 2005” and substituting “March 31,
2009” in lieu thereof.
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(g) Section 8(a)(ii) of the
Intercreditor Agreement is hereby amended by deleting the
parenthetical “(but excluding any such sales or other
dispositions of Collateral conducted in connection with or as a
result of store closures permitted under the First Lien Credit
Agreement)” and substituting in lieu thereof the following
new parenthetical: “(but excluding (x) any such sales or
other dispositions of Collateral conducted in connection with or as
a result of store closures permitted under the First Lien Credit
Agreement (as in effect on the date hereof) and (y) any such sales
or other dispositions
