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EXHIBIT
10.9
SECOND AMENDMENT
TO
INTERCREDITOR AND LIEN
SUBORDINATION AGREEMENT
THIS SECOND AMENDMENT TO
INTERCREDITOR AND LIEN SUBORDINATION AGREEMENT (this “
Amendment ”) is entered into as of April 29, 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.
RECITALS
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 and the
Facility Guarantor have requested that the First Lien Credit
Agreement be amended to provide, among other things, that the
Borrowing Base and the Minimum Required Excess Availability be
amended and that the Second Lien Credit Agreement be amended to
provide, among other things, that the Minimum Required Excess
Availability be amended; 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.
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
new definition of “Third Amendment to First Lien Credit
Agreement Effective Date” in the appropriate alphabetical
order:
““ Third
Amendment to First Lien Credit Agreement Effective Date
” means the date on which all conditions precedent to the
Third Amendment to Amended and Restated Credit Agreement, dated as
of April 29, 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 the
definition of “Borrowing Base Certificate” in its
entirety and substituting in lieu thereof the following new
definition:
““
Borrowing Base Certificate ” means the
Borrowing Base Certificate as defined in the First Lien Credit
Agreement (as in effect on the Third Amendment to First Lien Credit
Agreement Effective Date).”
(c) Section 1 of the
Intercreditor Agreement is hereby further modified by deleting the
definition of “Maximum First Lien Debt” in its entirety
and substituting in lieu thereof the following new
definition:
““ Maximum
First Lien Debt ” shall mean on any date of
determination thereof, First Lien Debt in an amount equal to (a)
the lesser of (i) $50,000,000 and (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 Third
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 Third Amendment to First
Lien Credit Agreement Effective Date); plus (b) $8,000,000;
plus , (c) the Permitted Overadvance Amount, minus
(d) all Asset Sale Revolver Reserves, all Insurance Reserves and
all Term Loan Permanent Reductions.”
(d) Section 1 of the
Intercreditor Agreement is hereby further modified by deleting the
definition of “Second Lien Actionable Default” in its
entirety and substituting in lieu thereof the following new
definition:
““ Second
Lien Actionable Default ” shall mean, collectively to
the extent that such events have not been cured or waived, (a) an
“Event of Default” that arises pursuant to (i) the
incurrence of indebtedness that is pari passu or senior in right of
payment to the Second Lien Debt in contravention of Section 6.01 of
the Second Lien Credit Agreement and (ii) Section 7.01(a) of
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