FIRST AMENDMENT TO CREDIT AGREEMENT
AND WAIVER
This FIRST
AMENDMENT TO CREDIT AGREEMENT AND WAIVER dated as of August 1, 2008
(this “ Amendment ”), is by and among PACIFIC
SUNWEAR OF CALIFORNIA, INC., a California corporation (the “
Borrower ”), JPMORGAN CHASE BANK, N.A. as
administrative agent for the Lenders under the Credit Agreement
described below (in such capacity, the “ Administrative
Agent ”) and the Lenders party hereto.
WHEREAS the
Borrower is party to a Credit Agreement dated as of April 29,
2008, with the Lenders and the Administrative Agent (as amended and
as the same shall be further amended, supplemented or otherwise
modified from time to time, the “ Credit Agreement
”), pursuant to which the Lenders agreed, subject to the
terms and conditions set forth therein, to make certain Loans to
the Borrower;
WHEREAS, the
Borrower has informed the Administrative Agent that in the course
of reviewing several of the Loan Parties’ retail store
leases, the Borrower has discovered that certain leases include
provisions which grant Liens (collectively, “ Landlord
Lease Liens ”) in favor of the applicable landlords on
assets of the Loan Parties to secure the Loan Parties’
obligations under the leases;
WHEREAS, the
existence of the Landlord Lease Liens constitutes an Event of
Default under subsections (c) and (d) of Article VII
of the Credit Agreement (such Event of Default, the “
Specified Event of Default ”); and
WHEREAS, the
Borrower has requested and the Administrative Agent and the Lenders
have agreed, on the terms set forth herein, to waive the Specified
Event of Default and to amend the Credit Agreement as set forth
herein;
NOW, THEREFORE, in
consideration of the foregoing and the agreements contained herein,
the parties hereby agree as follows:
1.
Capitalized Terms . Capitalized terms used herein which are
defined in the Credit Agreement have the same meanings herein as
therein, except to the extent that such meanings are amended
hereby.
2. Waiver of
Specified Event of Default . Subject to the satisfaction of the
terms and conditions set forth in Section 5 hereof, the
Administrative Agent and the Lenders hereby waive the Specified
Event of Default. The parties hereby acknowledge and agree that the
waiver set forth in this Section 2 is limited solely to the
Specified Event of Default, solely for the periods through and
ending on the effective date of this Amendment, and that such
waiver does not constitute a waiver of any other presently existing
or future Event of Default or a modification or waiver of any
provision of the Credit Agreement.
3.
Amendments to Credit Agreement. Subject to the satisfaction
of the terms and conditions set forth in Section 5 hereof, the
Borrower, the Lenders and the Administrative Agent agree that the
Credit Agreement shall be amended as follows:
(a)
Amendment to Definition of “Permitted
Encumbrances” . The definition of “Permitted
Encumbrances” set forth in Section 1.01 of the Credit
Agreement is hereby amended by deleting clause (b) of such
definition in its entirety and replacing such clause with the
following:
“(b)
(i) landlords’, carriers’, warehousemen’s,
mechanics’, materialmen’s, repairmen’s and other
like Liens imposed by law, Liens of collecting banks under the
Uniform Commercial Code
on items in the
course of collection, Liens and rights of set-off of banks, in each
case arising in the ordinary course of business and securing
obligations that are not overdue by more than thirty (30) days
or are being contested in compliance with Section 5.04, (ii)
landlord’s Liens arising by operation of law which are
subordinated to the Liens in favor of the Administrative Agent,
(iii) landlord’s Liens in Landlord Lien States arising
by operation of law and (iv) any Lien in favor of a landlord
on the assets of any Loan Party arising under the terms of the
lease relating to any retail store to secure such Loan
Party’s obligations under such lease (provided that the
Administrative Agent’s Liens are senior in priority to such
landlord’s Lien);”
(b)
Amendment to definition of “Reserves” . The
definition of “Reserves” set forth in Section 1.01
of the Credit Agreement is hereby amended and restated in its
entirety and replaced with the following:
“
Reserves ” means any and all reserves which the
Administrative Agent deems necessary, in its Permitted Discretion,
to maintain (including, without limitation, Banking Services
Reserves, reserves for rent at any retail store location leased by
any Loan Party in any Landlord Lien State for which the applicable
landlord has not executed and delivered a Collateral Access
Agreement (it being agreed that the maximum amount of any Reserve
for any retail store in any Landlord Lien State shall not exceed
two month’s rent for such location), reserves for rent with
respect to any Leased Distribution Cent
|
