SECOND AMENDMENT TO CREDIT AGREEMENT

 

 

This SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of February 13, 2012 (this “Amendment”), modifies that certain Credit Agreement, dated as of January 4, 2011 (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), among RADIOSHACK CORPORATION, a Delaware corporation (the “Borrower”), the guarantors from time to time party thereto (the “Facility Guarantors”), the financial institutions from time to time party thereto (collectively, the “Lenders”), and BANK OF AMERICA, N.A., as administrative agent and collateral agent (in such capacity, the “Administrative Agent”) for itself and the other Lenders.  Capitalized terms used herein and not defined shall have the meaning assigned to such terms in the Credit Agreement.

 

 

WHEREAS, the Borrower has requested that the Administrative Agent and the Lenders agree to amend certain of the terms and provisions of the Credit Agreement, as specifically set forth in this Amendment; and

 

WHEREAS, the Administrative Agent and each of the undersigned Lenders are prepared to amend the Credit Agreement on the terms, subject to the conditions and in reliance on the representations set forth herein.

 

NOW THEREFORE, in consideration of the premises and other good and valuable consideration, the parties hereto hereby agree as follows:

 

Section 1.        Amendments to Credit Agreement.

(a) Section 1.01 (Defined Terms) of the Credit Agreement is hereby amended by restating the following definition in its entirety as follows:

“Consolidated Fixed Charge Coverage Ratio” means, with respect to the Borrower and its Subsidiaries for any period, the ratio of (a) (i) Consolidated EBITDA for such period minus (ii) the sum of (A) Capital Expenditures paid in cash during such period (other than any Capital Expenditures financed with the proceeds of Indebtedness) plus (B) the aggregate amount of Federal, state, local and foreign income taxes paid in cash during such period to (b) the sum of (i) Debt Service Charges paid in cash during such period plus (ii) Restricted Payments constituting dividends paid in cash during such period pursuant to SECTIONS 6.06(f) and (g) (but excluding, in any event, the Restricted Payment constituting a cash dividend paid on December 15, 2011 in the amount of  $49,621,741.00).

 

(b) Paragraph (d) of Section 5.01 (Financial Statements) of the Credit Agreement is hereby amended by restating such paragraph (d) in its entirety as follows:

 

(d)           as soon as available, and in any event no later than sixty (60) days after the end of each Fiscal Year of the Borrower, (i) a detailed consolidated budget by quarter for the following Fiscal Year (including a projected Consolidated balance sheet of the Borrower and its Subsidiaries, the related Consolidated statements of projected cash flow and projected income and a summary of the material underlying assumptions applicable thereto), (ii) the projected Borrowing Base and (iii) Availability forecasts, in each case, as of the end of each quarter of the following Fiscal Year, and, as soon as available, significant revisions, if any, of such budget and projections with respect to such Fiscal Year (collectively, the “Projections”) (provided, however, that if at any time during the previous Fiscal Year Borrower was required to deliver a monthly Borrowing Base Certificate pursuant to SECTION 5.01(e), the Projections shall be provided on a monthly basis).  The Projections shall in each case be in form and substance satisfactory to the Administrative Agent and accompanied by a certificate of a Responsible Officer stating that such Projections are based on estimates, information and assumptions believed to be reasonable and that such Responsible Officer has no reason to believe that such Projections are incorrect or misleading in any material respect, it being understood that no assurance is given that such Projections will be realized and that such Projections may vary from actual results and such variances may be substantial;

 

Section 2.        Conditions Precedent.  This Amendment shall become effective as of the date first written above (the “Effective Date”) upon the satisfaction of the following conditions precedent:

 

(a)           Documentation.  The Administrative Agent shall have received a fully-executed and effective Amendment, executed by the Borrower, the Facility Guarantors, the Administrative Agent and the Required Lenders.

 

(b)           No Default.  On the Effective Date and after giving effect to this Amendment, no event shall have occurred and be continuing that would constitute a Default or an Event of Default.

 

 

Section 3.        Representations and Warranties; Reaffirmation of Grant.  The Borrower hereby represents and warrants to Administrative Agent and the Lenders that, as of the date hereof and after giving effect to this Amendment, (a) all representations and warranties of the Loan Parties set forth in the Credit Agreement and in any other Loan Document are true and correct in all material respects on and as of the date hereof to the same extent as though made on and as of such date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects on and as of such earlier date, provided that any representation and warranty which is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct in all respects on such respective dates, (b) no Default or Event of Default has occurred and is continuing, (c) the Credit Agreement and all other Loan Documents are and remain legally valid, binding obligations of the Loan Parties party thereto, enforceable against each such Loan Party in accordance with their respective terms and (d) each of the Security Documents to which such Loan Party is a party and all of the Collateral described therein do and shall continue to secure the payment of all Obligations as set forth in such respective Security Documents.

 

 

Section 4.        Survival of Representations and Warranties.  All representations and warranties made in this Amendment or any other Loan Document shall survive the execution and delivery of this Amendment, and no investigation by the Administrative Agent or the Lenders shall affect the representations and warranties or the right of the Administrative Agent and the Lenders to rely upon them.

Section 5.        Amendment as Loan Document.  This Amendment constitutes a “Loan Document” under the Credit Agreement.

Section 6.        Costs and Expenses.  The Borrower shall pay on demand all reasonable out-of-pocket costs and expenses of the Administrative Agent (including the reasonable fees, charges and disbursements of counsel to the Administrative Agent) incurred in connection with the preparation, negotiation, execution and delivery of this Amendment.

Section 7.        Governing Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION OR RULE THAT WOULD CAUSE THE APPLICATION OF THE DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER STATE).

Section 8.        Execution.  This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Amendment by telecopier (or electronic mail (including in PDF format)) shall be effective as delivery of a manually executed counterpart of this Amendment.

Section 9.        Limited Effect.  This Amendment relates only to the specific matters expressly covered herein, shall not be considered to be an amendment or waiver of any rights or remedies that the Administrative Agent or any Lender may have under the Credit Agreement, under any other Loan Document (except as expressly set forth herein) or under Law, and shall not be considered to create a course of dealing or to otherwise obligate in any respect the Administrative Agent or any Lender to execute similar or other amendments or waivers or grant any amendments or waivers under the same or similar or other circumstances in the future.

 

 

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date first above written.

 

 

		RADIOSHACK CORPORATION,
		as Borrower
	By:	/s/ Mark Barfield
	Name:	Mark Barfield
	Title:	Vice President and Treasurer

 

 

		RADIOSHACK CUSTOMER SERVICE
		LLC, as a Facility Guarantor
	By:	/s/ Mark Barfield
	Name:	Mark Barfield
	Title:	Vice President and Treasurer

 

 

		RADIOSHACK GLOBAL SOURCING
		CORPORATION, as a Facility Guarantor
	By:	/s/ Mark Barfield
	Name:	Mark Barfield
	Title:	Vice President and Treasurer

 

		RADIOSHACK GLOBAL SOURCING
		LIMITED PARTNERSHIP, as a Facility
		Guarantor
	By:	RadioShack Corporation, its general
		partner
	By:	/s/ Mark Barfield
	Name:	Mark Barfield
	Title:	Vice President and Treasurer

 

 

		RADIOSHACK GLOBAL SOURCING,
		INC., as a Facility Guarantor
	By:	/s/ Mark Barfield
	Name:	Mark Barfield
	Title:	Vice President and Treasurer

 

		SCK, INC., as a Facility Guarantor
	By:	/s/ Mark Barfield
	Name:	Mark Barfield
	Title:	Vice President and Treasurer

 

 

		TANDY FINANCE CORPORATION, as
		a Facility Guarantor
	By:	/s/ Mark Barfield
	Name:	Mark Barfield
	Title:	Vice President and Treasurer

 

 

		TE ELECTRONICS LP, as a Facility
		Guarantor
	By:	RadioShack Corporation, its general
		partner
	By:	/s/ Mark Barfield
	Name:	Mark Barfield
	Title:	Vice President and Treasurer

 

 

		TRS QUALITY, INC., as a Facility
		Guarantor
	By:	/s/ Joel H. Tiede
	Name:	Joel H. Tiede
	Title:	President

 

		IGNITION L.P., as a Facility Guarantor
	By:	RadioShack Corporation, its general
		partner
	By:	/s/ Mark Barfield
	Name:	Mark Barfield
	Title:	Vice President and Treasurer

 

 

 

		BANK OF AMERICA, as Administrative
		Agent, Swingline Lender, a Lender and an
		Issuing Bank
	By:	/s/ David Vega
	Name:	David Vega
	Title:	Managing Director

 

 

		WELLS FARGO BANK, NATIONAL
		ASSOCIATION, as a Lender and as an Issuing
		Bank
	By:	/s/ Connie Liu
	Name:	Connie Liu
	Title:	Vice President

 

 

		REGIONS BANK, as a Lender
	By:	/s/ Louis Alexander
	Name:	Louis Alexander
	Title:	Attorney in Fact

 

 

 

		JPMORGAN CHASE BANK, N.A., as a
		Lender
	By:	/s/ Kevin D. Padgett
	Name:	Kevin D. Padgett
	Title:	Authorized Officer

 

 

 

 

		HSBC BANK USA N.A., as a Lender
	By:	/s/ Brian Gingue
	Name:	Brian Gingue
	Title:	Vice President

 

 

		SOVEREIGN BANK, as a Lender
	By:	/s/ Cameron D. Gateman
	Name:	Cameron D. Gateman
	Title:	SVP - Large Corporate Banking

 

 

		FIFTH THIRD BANK, as a Lender
	By:	/s/ Christopher Motley
	Name:	Christopher Motley
	Title:	Senior Vice President

 

 

		PNC BANK, NATIONAL ASSOCIATION,
		Lender
	By:	/s/ Jonathan Parker
	Name:	Jonathan Parker
	Title:	AVP

 

 

		SUNTRUST BANK, as a Lender
	By:	/s/ Virginia Sullivan
	Name:	Virginia Sullivan
	Title:	VP

 

 

 

 

		KEYBANK NATIONAL ASSOCIATION, as a
		Lender
	By:	/s/ Paul A. Taubeneck
	Name:	Paul A. Taubeneck
	Title:	Vice President

 

 

		COMPASS BANK, as a Lender
	By:	/s/ Ramon Garcia
	Name:	Ramon Garcia
	Title:	Vice President