Document:

mm08-2313_8ke101.htm

Exhibit 10.1

 

 

FORM OF AMENDED RETENTION AGREEMENT

 

 

Leucadia National Corporation

520 Madison Avenue

New York, New York 10022

 

 

[Name of Executive]

c/o Leucadia National Corporation

520 Madison Avenue

New York, New York 10022

 

August 21, 2013

 

 

Dear [Executive]:

 

The purpose of this letter agreement is to induce you to remain in the employ of Leucadia National Corporation (“LUK”), to amend and restate that certain retention letter agreement, dated as of [●], 20101(the “Prior Agreement”) in its entirety, and to confirm our agreement and understanding as to the following matters:

 

	
1.)  

	
When your employment with LUK terminates for any reason other than as a result of (i) the commission by you of any act of gross negligence in the performance of your duties or obligations to LUK or any of its subsidiary or affiliated companies, or (ii) the commission by you of any material act of disloyalty, dishonesty or breach of trust against LUK or any of its subsidiary or affiliated companies, you shall receive the Payment (as defined below) in addition to all other benefits to which you may be then entitled.  The Payment shall be made to you in a lump sum on the sixtieth (60th) day following your termination of employment.

 

	
2.)  

	
For purposes of this agreement, "Payment" shall mean $[•]2 plus annually compounded interest at the annual rate of 5.125% from March 1, 2013 through the date that the Payment is paid to you; provided, however, that, notwithstanding anything to the contrary in Section 6 of this letter agreement, if the Payment, taken together with any amounts or benefits otherwise paid or distributed or payable or distributable to you by LUK and/or its subsidiaries and affiliates (collectively "Covered Payments"), would be an "excess parachute payment" as defined in Section 280G of the Internal Revenue Code of 1986, as amended and the underlying regulations (the "Code"), and would subject you to the excise tax under Section 4999 of the Code (or any similar tax that may hereafter be imposed) (the “Excise Tax”), the Payment shall be reduced to the maximum amount which may be paid without you becoming subject to the Excise Tax, it being the understanding of the parties hereto as of the date of this letter that the Payment is not a 

 

 

_____________________________

1 March 1, 2010 for Justin R. Wheeler; June 22, 2010 for Joseph A. Orlando and Thomas E. Mara

 

2 $2,750,000 for Messrs. Mara and Orlando; $2,500,000 for Mr. Wheeler.

 

 

 

  

  

  

 

 

	 	
parachute payment under Section 280G of the Code.  The parties hereto agree that, upon the execution of this letter, you are vested as to the Payment and no longer subject to a risk of forfeiture.

  

	
3.)  

	
As it pertains to certain tax matters:

 

a) This letter shall be interpreted to comply with Section 409A of the Code and the guidance promulgated thereunder to the extent applicable (collectively “Code Section 409A”), and all provisions of this letter shall be construed in a manner consistent with the requirements for avoiding taxes or penalties under Code Section 409A.

 

b) A termination of employment shall not be deemed to have occurred for purposes of any provision of this letter providing for the payment of any amounts or benefits subject to Code Section 409A upon or following a termination of employment unless such termination is also a "separation from service" within the meaning of Code Section 409A and, for purposes of any such provision of this letter, references to a "termination," "termination of employment" or like terms shall mean "separation from service."  If you are deemed on the date of termination to be a "specified employee" within the meaning of that term under Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit considered "nonqualified deferred compensation" under Code Section 409A (whether under this letter, any other plan, program, payroll practice or any equity grant and which payment or benefit is payable on account of your separation from service and is otherwise scheduled to be paid within six (6) months after your separation from service), then solely to the extent necessary to prevent the imposition of Code Section 409A taxes such payment or benefit shall not be made or provided until the date which is the earlier of (A) the expiration of the six- (6) month period measured from the date of your "separation from service", and (B) the date of your death or the later payment date specified in (1) above (the "Delay Period") and this letter and each such plan, program, payroll practice or equity grant shall hereby be deemed amended accordingly.  In event the payment under this letter is so delayed, the Payment will continue to earn interest at the rate stated in paragraph 2 above until the Payment is paid to you.

 

	
4.)  

	
While you are employed by LUK and for two (2) years thereafter, you will not, directly or indirectly, as a stockholder or partner or owner, investor, principal or agent, or in any other manner, engage in any business, within any geographic area in which LUK or its subsidiaries or affiliates conduct business, which competes in any manner with any business conducted by LUK or its subsidiaries or affiliates. Further, during such period, you agree not to directly or indirectly solicit or induce any employee of LUK's or its subsidiaries’ or affiliates’ to leave his or her employment.

 

	
5.)  

	
Nothing herein contained shall be construed as creating an employment contract between you and LUK, it being understood that your employment shall be "at will."

 

	
6.)  

	
LUK will reimburse you for any and all Federal, state, local or foreign taxes and penalties and interest incurred by you (A) solely as a result of the application of Code Section 409A to the terms of this letter or the amounts which may be payable to you hereunder, in each case, excluding any ordinary income taxes and related payroll taxes owed by you on the Payment at the time of your receipt of the Payment (collectively, the "Additional Taxes"), including reimbursement for any and all reasonable expenses incurred by you due to a tax audit or litigation addressing the existence or amount of such Additional

 

 

 

 

  

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Taxes (the "Related Costs") and (B) as a result of your receipt of reimbursement for any Additional Taxes or Related Costs (collectively, the “Other Taxes”); provided, that (i) you must notify LUK of your incurrence of any Additional Taxes or Related Costs and provide documentation reasonably acceptable to LUK verifying such Additional Taxes or Related Costs, in each case, on or before five (5) business days following (x) the filing of your individual tax return in respect of the calendar year in which any Additional Taxes are incurred by you or (y) the completion of any audit or a final and nonappealable settlement or other resolution of litigation, in each case, to which any Related Costs relate, and (ii) LUK may take any actions it deems necessary or appropriate in connection with your incurrence of such Additional Taxes and/or Related Costs.  Notwithstanding the forgoing, with respect to any payments made by LUK to you pursuant to this Section 6, any payments in respect of (x) Additional Taxes or Other Taxes, as applicable, shall be made as soon as practicable, but in no event later than the December 31 of the calendar year next following the calendar year in which the Additional Taxes or Other Taxes, as applicable, are remitted to the appropriate taxing authority and (y) Related Costs shall be made as soon as practicable, but in no event later than the December 31 of the calendar year next following the calendar year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the litigation.

 

	
7.)  

	
LUK will withhold from the Payment all applicable withholding taxes.

 

	
8.)  

	
Amounts payable or paid hereunder shall not be deemed to be compensation to you for purposes of calculating the amount of your benefits or contributions under a pension plan or retirement plan (qualified under Section 401(a) of the Internal Revenue Code) or any non-qualified supplemental retirement plan, the amount of life insurance payable under any life insurance plan, the amount of any disability benefit payments payable under any disability plan or the amount of any severance payment or other payment or benefit under an employment agreement or compensation program or arrangement.

 

	
9.)  

	
This letter constitutes the entire agreement between LUK and you with respect to the subject matter hereof, and supersedes any prior communications, agreements, term sheets and understandings, written or oral, with respect to the subject matter hereof, including, without limitation, the Prior Agreement.  This agreement shall be binding on you and LUK and LUK's successors and shall be governed by and construed in accordance with the laws of the State of New York.

 

Please confirm your understanding by signing below.

 

	
 

	
Very truly yours,

	 
	 	 	 
	 	LEUCADIA NATIONAL CORPORATION	 
	 	 	 	 
	
 

	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 
	 	 	 	 

 

 

 

	Agreed to: 	 
	 	 
	 	 
	Name of Executive	 
	 	 
	Date: August __, 2013	 

 

 

 

3SECOND AMENDMENT
TO CREDIT AGREEMENT

 

This Second Amendment to Credit
Agreement (this “Amendment”) is made as of August 21, 2013, by and among:

 

TRANS WORLD ENTERTAINMENT CORPORATION,
a New York corporation (the “Lead Borrower”);

 

the Persons named on Schedule
I hereto (together with the Lead Borrower, individually, a “Borrower”, and collectively, the “Borrowers”);

 

the Persons named on Schedule
II hereto (individually, a “Guarantor”, and collectively, the “Guarantors”, and together
with the Borrowers, individually, a “Loan Party”, and collectively, the “Loan Parties”);

 

the LENDERS party hereto; and

 

WELLS FARGO BANK, NATIONAL ASSOCIATION
(“Wells Fargo”), as Administrative Agent, Collateral Agent, Swingline Lender and as Issuing Bank;

 

in consideration of the mutual covenants herein contained and benefits to
be derived herefrom.

 

W I T N E S S E T
H:

 

WHEREAS, reference is made to that
certain Amended and Restated Credit Agreement, dated as of April 15, 2010 (as amended, restated, supplemented or otherwise modified
and in effect from time to time, the “Credit Agreement”), by, among others, the Loan Parties, the Lenders party
thereto from time to time, Bank of America, N.A. (“Bank of America”), as Administrative Agent, Collateral Agent,
Swingline Lender and Issuing Bank, and Bank of America, N.A. and Wells Fargo Bank, National Association (as successor by merger
to Wells Fargo Retail Finance, LLC), as Co-Borrowing Base Agents;

 

WHEREAS, on May 4, 2012, Bank of
America resigned as Administrative Agent, Collateral Agent, Swingline Lender, Issuing Bank and Co-Borrowing Base Agent in accordance
with the terms of the Credit Agreement, and Wells Fargo was appointed successor Administrative Agent, Collateral Agent and Issuing
Bank in accordance with the terms of the Credit Agreement;

 

WHEREAS, the Lead Borrower has
advised the Administrative Agent that the Lead Borrower desires to make Restricted Payments in the aggregate amount of up to $22,000,000
utilizing cash on hand, which Restricted Payments shall be made to the Lead Borrower’s shareholders for the purposes
of repurchasing and redeeming from such shareholders up to $22,000,000 in aggregate value of Capital Stock of the Lead Borrower;

 

WHEREAS, in connection therewith,
the parties hereto have agreed to amend certain provisions of the Credit Agreement as set forth herein.

 

NOW, THEREFORE, the parties hereto
hereby agree as follows:

    	 

    	

    

		1.	Defined Terms. Capitalized terms used in this Amendment shall
have the respective meanings assigned to such terms in the Credit Agreement unless otherwise defined herein. 

 

		2.	Amendments to Article I of Credit Agreement. The provisions
of Section 1.01 of the Credit Agreement are hereby amended as follows:

 

		(a)	By deleting the definition of “Dividend Conditions” therefrom
in its entirety and substituting in its stead the following new definition:

 

“Dividend Conditions”
means, at the time of determination with respect to any dividend or other distribution (whether in cash, securities or other property)
of the type described in clause (d) of the definition of “Permitted Dividends”, that (a) no Default or Event of Default
then exists or would arise as a result of the making of such dividend or other distribution, (b) (i) at no time during the six
(6) month period ending on the date of such dividend or other distribution shall there have been any Borrowings, and (ii) after
giving effect to the making of such dividend or other distribution, as projected on a pro-forma basis for the six (6) month period
following the making of such dividend or other distribution, there are no anticipated Borrowings, (c) after giving effect to the
making of such dividend or other distribution, (i) in the case of dividends of the type described in clause (d)(i) of the definition
of “Permitted Dividends”, the aggregate amount of all such dividends and other distributions made during the then current
Fiscal Year does not exceed $5,000,000, and (ii) in the case of dividends of the type described in clause (d)(ii) of the definition
of “Permitted Dividends”, the aggregate amount of all such dividends and other distributions made from and after the
Second Amendment Effective Date does not exceed $22,000,000, and (d) such dividend is made in cash utilizing the Loan Parties’
cash on hand not consisting of Eligible Cash on Hand and not from proceeds of any Borrowings hereunder. Prior to undertaking any
transaction or payment which is subject to the Dividend Conditions, the Loan Parties shall deliver to the Administrative Agent
evidence of satisfaction of the conditions contained in clauses (b) and (c) above on a basis (including, without limitation, giving
due consideration to results for prior periods) reasonably satisfactory to the Administrative Agent.

 

		(b)	By adding the following new definition in appropriate alphabetical
order:

 

“Second Amendment
Effective Date” means August 21, 2013.

 

		3.	Ratification; Representations and Warranties. Except as otherwise
expressly provided herein, all terms and conditions of the Credit Agreement, the Security Agreement, the Facility Guarantees and
the other Loan Documents remain in full force and effect. The Loan Parties hereby ratify, confirm, and reaffirm that all representations
and warranties of the Loan Parties contained in the Credit Agreement, the Security Agreement, the Facility Guarantees and each
other Loan Document are true and correct in all material 

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			respects on and as of the date hereof, other than (x) representations
and warranties that relate solely to an earlier date, in which case they are true and correct as of such earlier date, or (y) representations
and warranties qualified by materiality, in which case they are true and correct in all respects. 

 

		4.	Conditions to Effectiveness. This Amendment shall not be effective
until each of the following conditions precedent has been fulfilled to the reasonable satisfaction of the Administrative Agent:

 

		(a)	The Administrative Agent shall have received counterparts of this
Amendment duly executed and delivered by each of the parties hereto.

 

		(b)	All action on the part of the Loan Parties necessary for the valid
execution, delivery and performance by the Loan Parties of this Amendment and the documents, instruments and agreements to be executed
in connection herewith shall have been duly and effectively taken and evidence thereof reasonably satisfactory to the Administrative
Agent shall have been provided to the Administrative Agent.

 

		(c)	The Loan Parties shall have paid in full all reasonable costs and
expenses of the Agents (including, without limitation, reasonable attorneys’ fees) in connection with the preparation, negotiation,
execution and delivery of this Amendment and related documents.

 

		(d)	No Default or Event of Default shall have occurred and be continuing.

 

		(e)	All representations and warranties of the Loan Parties shall be true
and correct in all material respects on and as of the date hereof, other than (x) representations and warranties that relate solely
to an earlier date, in which case they shall be true and correct as of such earlier date, or (y) representations and warranties
qualified by materiality, in which case they shall be true and correct in all respects.

 

		(f)	The Administrative Agent shall have received such additional documents,
instruments, and agreements as any Agent may reasonably request in connection with the transactions contemplated hereby.

 

		5.	Prior Consent Terminated. The parties hereto acknowledge and
agree that that certain letter agreement dated as of June 27, 2013 (the “Consent Agreement”) by and among the
Loan Parties, the Administrative Agent and the Lenders, pursuant to which the Lenders provided their consent to the making of the
2013 Specified Restricted Payment (as defined in the Consent Agreement) subject to the terms and conditions thereof, is hereby
terminated and of no further force and effect. The Loan Parties represent and warrant that (i) the actual amount of the 2013 Specified
Restricted Payment made prior to the date hereof does not exceed $3,000,000 in the aggregate, and (ii) such portion of the 2013

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			Specified Restricted Payment was made in accordance with the terms
and conditions of the Consent Agreement.

 

		6.	Miscellaneous.

 

		(a)	This Amendment may be executed in several counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall
constitute a single contract. This Amendment and the other Loan Documents constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all contemporaneous or previous agreements and understandings, oral or written,
relating to the subject matter hereof. Delivery of an executed counterpart of a signature page to this Amendment by telecopy or
other electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment.

 

		(b)	Any provision of this Amendment held to be invalid, illegal or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability
without affecting the validity, legality and enforceability of the remaining provisions hereof; and the invalidity of a particular
provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction.

 

		(c)	The Loan Parties represent and warrant that they have consulted with
independent legal counsel of their selection in connection with this Amendment and are not relying on any representations or warranties
of the Agents or the other Credit Parties or their respective counsel in entering into this Amendment.

 

		(d)	This Amendment shall constitute a Loan Document for all purposes.

 

		(e)	THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.

 

[SIGNATURE PAGES FOLLOW]

    	4

    	

    

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

	 	TRANS WORLD ENTERTAINMENT

CORPORATION, as Lead Borrower and as a
	 	Borrower

 

	 	By:	/s/ Edwin Sapienza	 
	 	Name:	Edwin Sapienza
	 	Title:	Corporate Secretary

 

	 	RECORD TOWN, INC., as a Borrower
	 	 	 
	 	By:	/s/ Edwin Sapienza	 
	 	Name:	Edwin Sapienza
	 	Title:	Corporate Secretary

 

	 	RECORD TOWN USA, LLC, as a Borrower
	 	 	 
	 	By:	/s/ Edwin Sapienza	 
	 	Name:	Edwin Sapienza
	 	Title:	Corporate Secretary

 

	 	TRANS WORLD NEW YORK, LLC, as a Borrower
	 	 	 
	 	By:	/s/ Edwin Sapienza	 
	 	Name:	Edwin Sapienza
	 	Title:	Corporate Secretary

 

	 	TRANS WORLD FLORIDA, LLC, as a Borrower
	 	 	 
	 	By:	/s/ Edwin Sapienza	 
	 	Name:	Edwin Sapienza
	 	Title:	Corporate Secretary

 

Signature Page to Second Amendment to Credit Agreement

    	 

    	

    

	 	MOVIES PLUS, INC., as a Borrower
	 	 	 
	 	By:	/s/ Edwin Sapienza	 
	 	Name:	Edwin Sapienza
	 	Title:	Corporate Secretary

 

		RECORD TOWN UTAH, LLC, as a Borrower
	 	 	 
	 	By:	/s/ Edwin Sapienza	 
	 	Name:	Edwin Sapienza
	 	Title:	Corporate Secretary

 

	 	MEDIA LOGIC USA, LLC, as a Facility Guarantor
	 	 	 
	 	By:	Record Town, Inc., its sole member
	 	 	 
	 	By:	/s/ Edwin Sapienza	 
	 	Name:	Edwin Sapienza
	 	Title:	Corporate Secretary

 

Signature Page to Second Amendment to Credit Agreement

    	 

    	

    

	 	WELLS FARGO BANK, NATIONAL 

ASSOCIATION, as Administrative Agent, 

Collateral Agent, Swingline Lender, Issuing Bank and Lender

 

	 	By:	/S/Peter Foley	 
	 	Name:	Peter Foley
	 	Title:	Authorized Signatory

 

Signature Page to Second Amendment to Credit Agreement

    	 

    	

    

Schedule I

 

Borrowers other than the Lead Borrower

 

Record Town, Inc.

Record Town USA, LLC

Trans World New York, LLC

Trans World Florida, LLC

Movies Plus, Inc.

Record Town Utah, LLC

    	 

    	

    

Schedule II

 

Guarantors

 

Media Logic USA, LLC

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