FIRST AMENDMENT AND WAIVER
TO
LOAN AND SECURITY AGREEMENT
This First
Amendment and Waiver to Loan and Security Agreement (the
“First Amendment and Waiver”) is made as of the
4 th
day of April, 2007 by and
among
EDDIE BAUER,
INC., a corporation organized under the laws of the State of
Delaware, having a place of business at 15010 NE 36
th Street, Redmond, Washington 98052 (the
“Borrower”);
The GUARANTORS
party hereto (together with the Borrower, individually, a
“Loan Party” and collectively, the “Loan
Parties”);
the LENDERS
party hereto;
BANK OF
AMERICA, N.A., as Agent for the Lenders, having a place of business
at 100 Federal Street, 9 th Floor, Boston, Massachusetts 02110;
BANK OF
AMERICA, N.A. and THE CIT GROUP/BUSINESS CREDIT, INC., as
Co-Syndication Agents; and
GENERAL
ELECTRIC CAPITAL CORPORATION, as Documentation Agent;
in
consideration of the mutual covenants herein contained and benefits
to be derived herefrom.
WHEREAS, the Loan
Parties, the Agent, the Lenders, the Co-Syndication Agents, and the
Documentation Agent have entered into a Loan and Security Agreement
dated as of June 21, 2005 (as amended and in effect, the
“Loan Agreement”); and
WHEREAS, Holdings
has advised the Agent and the Lenders that it intends to issue
certain Convertible Senior Notes due 2014 in the face amount of
$75,000,000, which notes shall be guaranteed by the other Loan
Parties and the proceeds of which will be primarily used to repay a
portion of the Term Debt; and
WHEREAS, Holdings
has further advised the Agent and the Lenders that, reasonably
contemporaneously with the issuance of the Convertible Senior Notes
described above, it and the Borrower intend to enter into an
Amended and Restated Term Loan Agreement with, among others,
JPMorgan Chase Bank, N.A., as administrative agent; and
WHEREAS, in order
to facilitate the issuance of the Convertible Senior Notes and the
amendment of, and prepayment of a portion of, the Term Debt, and
for certain other purposes as set forth herein, the Loan Parties
have requested that certain provisions of the Loan Agreement be
amended as set forth herein; and
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WHEREAS, the
Borrower has requested that the Agent and the Majority Lenders
confirm the waiver on the terms and conditions set forth herein, of
certain Events of Default which have arisen under the Loan
Agreement and which were previously temporarily waived by the
Lenders, all as more fully set forth herein.
NOW THEREFORE, it
is hereby agreed as follows:
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1.
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Definitions. All capitalized terms used herein
and not otherwise defined shall have the same meaning herein as in
the Loan Agreement.
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2.
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Amendments to Article 1 of the
Loan Agreement . The provisions of
Section 1.1 of the Loan Agreement are hereby amended as
follows:
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a.
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Clause (i) of the definition of
“Permitted Liens” is hereby deleted in its entirety and
the following substituted in its stead:
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“(i) Liens securing Term Debt
permitted pursuant to Section 9.11(e) hereof and Guaranties
thereof permitted pursuant to Section 9.10(i) hereof, provided
that the holder of such Term Debt shall have entered into the
Intercreditor Agreement;”
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b.
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The
definition of “Term Debt” is hereby deleted in its
entirety and the following substituted in its stead:
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“ Term Debt ”
means the Debt due or to become due under a certain Term Loan
Agreement dated as of June 21, 2005 among JPMorgan Chase Bank,
N.A., as administrative agent, the lenders party thereto, the
Borrower, and Holdings, together with all other documents relating
thereto, including, without limitation, a certain Guarantee and
Collateral Agreement dated as of June 21, 2005 (as each may be
amended, modified, supplemented, extended, restated, renewed or
replaced from time to time in accordance with the terms hereof and
the Intercreditor Agreement, including, without limitation,
pursuant to that certain Amended and Restated Term Loan Agreement
dated as of April 4, 2007).
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c.
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The
following new definitions are hereby added to the Loan Agreement in
appropriate alphabetical order:
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“ Convertible Notes
Documents ”: the Convertible Note Indenture, the
Convertible Notes issued thereunder and any other documentation
executed in connection therewith, as in effect on the First
Amendment Effective Date, together with any amendments and
supplements thereto permitted under Section 9.12(b)
hereof.
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“ Convertible Note
Indenture ”: the Indenture dated as of April 4, 2007
among Holdings, the subsidiary guarantors party thereto and the
trustee therefor, as in
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effect on the First Amendment
Effective Date, together with any amendments and supplements
thereto permitted under Section 9.12(b) hereof.
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“ Convertible Notes
”: the convertible notes issued by Holdings pursuant to the
Convertible Note Indenture.
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“ First Amendment Effective
Date ”: April 4, 2007.
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3.
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Amendments to Article 9 of the
Loan Agreement. The provisions of Article 9 of
the Loan Agreement are hereby amended as follows:
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a.
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Section 9.8 of the Loan
Agreement is hereby amended by deleting the word “and”
at the end of clause (f) and adding the word “and”
at the end of clause (g) and adding the following clause
(h) at the end thereof:
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“(h) a liquidating
distribution by Spiegel Credit Card Master Note Trust (the
“Note Trust”) to SAC of all of the assets of the Note
Trust (the “Note Trust Receivables”); (ii) the
sale, transfer or assignment by the Note Trust or SAC, as the case
may be, of the Note Trust Receivables or any interest therein, or
the sale by Holdings of SAC to a third party purchaser in an
arm’s length transaction; (iii) the dissolution or
liquidation of the Note Trust and/or SAC, as the case may be,
following such sale, or the merger of SAC into or with Holdings or
any of its Subsidiaries; and (iv) the execution and delivery
by the Note Trust and/or SAC of any and all consents, certificates,
guaranties, indemnities or other agreements deemed necessary or
desirable to accomplish the activities set forth in (i), (ii) and
(iii) above.”
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b.
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Section 9.9 of the Loan
Agreement is hereby amended by adding the words “(other than
the conversion of the Convertible Notes into common stock of
Holdings)” immediately after the words “capital
structure” in clause (ii) thereof.
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c.
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Section 9.10 of the Loan
Agreement is hereby amended by adding “and the Convertible
Notes” at the end of clause (i) thereof.
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d.
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Section 9.11 of the Loan
Agreemen
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