EXHIBIT 10.2(c)
January 8, 1997
Venture Stores, Inc.
0000 Xxxx Xxxxx Xxxx
X'Xxxxxx, Xxxxxxxx 00000-0000
Re: Second Amendment to Loan and Security Agreement
(this "Second Amendment")
Ladies/Gentlemen:
Reference is hereby made to that certain Loan and Security
Agreement, as amended prior to the date hereof (the "Agreement"),
dated as of June 28, 1996 and executed by and among Venture
Stores, Inc. (the "Borrower"), the financial institutions party
thereto (collectively, the "Lenders") and BankAmerica Business
Credit, Inc., as agent for the Lenders (in such capacity as
agent, the "Agent"). Certain capitalized terms used herein and
not otherwise defined shall have the meanings attributed to them
in the Agreement.
For good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Agent, the Lenders and the
Borrower hereby agree as follows:
1. The definition of "Maximum Revolver Amount" appearing in
Section 1.1 of the Agreement is hereby amended by adding the
phrase "; and" immediately following "clause (iv)" appearing
therein, and by adding a new "clause (v)" immediately
following such new phrase which new "clause(v)" shall read
in its entirety as follows:
(v) an inventory reserve in the amount of $20,000,000
(the "Inventory Reserve"), which Inventory Reserve
shall continue until both of the following events shall
have occurred: (A) the Agent and the Lenders shall have
received and reviewed an inventory appraisal
satisfactory in form and substance to the Agent, and
pursuant to the terms of this Agreement the Agent shall
have made any corresponding adjustments to the
Borrowing Base relating to such inventory appraisal,
and (B) an amendment to this Agreement (the terms of
which are to be negotiated), satisfactory in form and
substance to the Borrower, the Agent and the Lenders,
shall have been executed and delivered by the Borrower,
the Agent and the Lenders and shall have become
effective in accordance with its terms, which amendment
is anticipated, among other things, to reset the
financial covenants contained herein for the fiscal
year ending on or about January 31, 1998, to establish
a negative cash flow reserve, and to provide for the
elimination or adjustment of the Inventory Reserve, and
which amendment shall contain such other terms and
provisions as may be deemed necessary or desirable by
the Lenders.
2. Section 8.21 of the Agreement is hereby amended as follows:
(a) The minimum ratio "1.0 to 1" appearing therein is
hereby deleted INSOFAR AND ONLY INSOFAR as said minimum
ratio relates to the period entitled "Three fiscal
quarter period ending nearest January 31, 1997", and is
hereby replaced with the minimum ratio "0.30 to 1", it
being expressly understood and agreed by the parties
that the minimum ratio of "1.0 to 1" shall remain
applicable to the periods entitled "Four fiscal quarter
period ending at each fiscal quarter thereafter"; and
(b) The following three new sentences are hereby added to
the end of said Section 8.21 and made a part thereof:
In addition, the Borrower will maintain a minimum Fixed
Charge Coverage Ratio of 1.0 to 1 for the nine-month
fiscal period ending nearest February 28, 1997 provided
that such required minimum Fixed Charge Coverage Ratio
shall not become effective unless and until the
Required Lenders shall have elected, in the exercise of
their sole discretion, to require that the Borrower
maintain such minimum Fixed Charge Coverage Ratio. The
Agent, upon the direction of the Required Lenders,
shall notify the Borrower in writing of any such
election before March 31, 1997, and upon such
notification such minimum Fixed Charge Coverage Ratio
requirement shall become effective on March 31, 1997
for such nine-month fiscal period ending nearest
February 28, 1997. For purposes of this Section 8.21,
and notwithstanding any provision to the contrary
contained in Section 10.1(d), any failure of the
Borrower to deliver the financial statements for the
month ending nearest February 28, 1997 by March 31,
1997 shall be deemed to constitute an immediate Event
of Default under this Agreement.
It is expressly understood and agreed by the parties hereto that
this Second Amendment only outlines certain, but not all,
provisions of a proposed further amendment to the Agreement (as
amended by this Second Amendment), shall not constitute a
commitment or contract of any kind on the part of the Agent or
any Lender for any such amendment, and is not to be construed or
relied upon by the Borrower or anyone else as a commitment for
any such amendment. This Second Amendment, insofar as it
describes such a proposed further amendment to the Agreement, is
merely a proposal which is subject to the completion of due
diligence and formal approval by each Lender and the satisfactory
negotiation of the terms and provisions thereof.
Except to the extent modified herein, the Agreement and the other
Loan Documents remain in full force and effect and are each
hereby ratified and confirmed. Please evidence your agreement
with the terms of this Second Amendment by signing in the space
below. This Second Amendment may be executed by one or more of
the parties hereto on any number of counterparts, and all of said
counterparts taken together shall be deemed to constitute one and
the same instrument. This Second Amendment shall become
effective in accordance with its terms upon its execution by the
Agent, the Majority Lenders and the Borrower, whereupon each
reference to the Agreement in the Agreement and in any and all
other Loan Documents shall, except where the context otherwise
requires, be deemed a reference to the Agreement as amended by
this Second Amendment.
Sincerely,
BANKAMERICA BUSINESS CREDIT, INC.,
as the Agent
By:\s\Xxxxxxx Xxx
Name:Xxxxxxx Xxx
Title:Vice President
BANKAMERICA BUSINESS CREDIT, INC.,
as a Lender
By:\s\Xxxxxxx Xxx
Name:Xxxxxxx Xxx
Title:Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.,
as a Lender
By:\s\Xxxxx X. Xxxxxxx
Name:Xxxxx X. Xxxxxxx
Title:Assistant Secretary
CONGRESS FINANCIAL CORPORATION,
as a Lender
By:\s\Xxxxxx X. Xxxxxx
Name:Xxxxxx X. Xxxxxx
Title:Vice President
LA SALLE BUSINESS CREDIT, INC.,
as a Lender
By:\s\Xxxxxxx X. Xxxxxxx
Name:Xxxxxxx X. Xxxxxxx
Title:Asset Based Lending Officer
GENERAL ELECTRIC CAPITAL CORPORATION,
as a Lender
By:\s\Xxxxxxx X. Xxx Xxxx
Name:Xxxxxxx X. Xxx Xxxx
Title:Duly Authorized Signatory
ACCEPTED AND AGREED:
VENTURE STORES, INC.
By:\s\Xxxxxxx Xxxx
Name:Xxxxxxx Xxxx
Title:Executive Vice President
Date: January 8, 1997
