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EXHIBIT (10)(i)(h)
Material Contracts --
Amendment No. 7 to
Credit Agreement between
Xxxxxxx Gordman 1/2
Price Stores, Inc. and
Congress Financial
Corporation, dated
April 7, 1997.
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AMENDMENT NO. 7 TO
INVENTORY FINANCING AGREEMENT
AND ACCOUNTS SECURITY AGREEMENT
April 7, 1997
Xxxxxxx Gordman 1/2 Price Stores, Inc.
00000 Xxxx Xxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Inventory Financing Agreement and
Accounts Security Agreement dated as of October 20, 1993, as
previously mended and supplemented (the "Loan Agreement") between
Congress Financial Corporation (Central) ("Congress") and Xxxxxxx
Gordman 1/2 Price Stores, Inc. ("Borrower"). Terms used xxxxxx and not
otherwise defined herein shall the meaning ascribed to such terms in
the Loan Agreement
Borrower has requested that Congress agree to amend the Loan
Agreement to, among other things, (i) modify the inventory advance
rate and (ii) decrease the interest rate and Congress is willing to do
so subject the terms and conditions set forth herein.
Accordingly, the Loan Agreement is hereby amended in the
following respects:
1. The following sentence is hereby added to the end of Section
1.5 to read as follows:
"Notwithstanding the foregoing sentence, Eligible Inventory
shall include, (a) Inventory, to the extent that it is
otherwise Eligible Inventory and to the extent that it has been
prepaid by Borrower and which is at the location of the
supplier of such Inventory ("Prepaid Inventory"); provided that
(1) such Inventory shall only be Eligible Inventory for 60 days
after payment in full has been made by Borrower and (2) the
aggregate mount of loan availability predicated on Prepaid
Inventory shall not exceed $500,000 and (b) Inventory m-transit
within the United States to Borrower; provided that the
aggregate amount of loan availability predicated on Inventory
mtransit shall not exceed $3,000,000."
2. The first sentence of Section 2.1 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
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Xxxxxxx Xxxxxxx 1/2 Price Stores, Inc.
April 7, 1997
Page 25
In the absence of an Event of Default and in the absence of an
event which with the passage of time or the giving of notice or
both would mature into an Event of Default and subject to the
terms and conditions of this Agreement as amended by any
supplements and riders hereto, you shall make loans to us from
time to time, at our request, of up to thirty-eight percent (38%)
of the retail value of Eligible Inventory (reduced to (i) twenty
percent (20%) of the retail value of all "clearance items"
constituting Eligible Inventory in an mount not to exceed Six
Million Dollars ($6,000,000) which have been on our Premises for
a period of less than eighteen (18) months and (ii) twenty
percent (20%) of all Prepaid Inventory in an amount not to exceed
Two Million Five Hundred Thousand Dollars ($2,500,000); provided
that at no time shall the outstanding loans made pursuant to the
provisions of this section exceed seventy-five percent (75%) of
the "Mid Range Liquidation Value", as determined by the most
recently prepared Inventory Liquidation Sale Analysis of
Schottenstein Xxxxxxxxx Capital Group, LLC (the "Mid Range
Liquidation Value Amount"). In the event that at any time the
loans made pursuant to this section exceed the Mid Range
Liquidation Value Amount, as so determined, Borrower shall be
obligated to immediately repay the loans by an amount necessary
to eliminate such excess.
3. The first sentence of Section 3.1 is hereby amended and
restated to read as follows:
"Interest shall be payable by us to you on the first day of
each month upon the closing daily balances in our loan account
for each day during the immediately preceding month, at a rate
equal to one percent (1.00%) per annum in excess of the prime
commercial interest rate publicly announced by Philadelphia
National Bank, incorporated as CoreStates Bank, N.A.,
Philadelphia, Pennsylvania, whether or not such announced rate
is the best rate available at such bank."
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Xxxxxxx Xxxxxxx 1/2 Price Stores, Inc.
April 7, 1997
Page 3
4. The third sentence of Section 3 of Rider No. 1 to the Loan
Agreement is hereby amended and restated to read as follows:
"Debtor also acknowledges and agrees that Congress shall have
the right to engage Schottenstein Asset Recovery Division or
such other firm as is acceptable to Congress to appraise the
Inventory on a semi-annual basis, and Debtor shall be required
to reimburse Congress for such appraisal as provided in Section
3.8 of the Loan Agreement; provided that if at any time, the
amount by which loan availability of Debtor described in
Section 2.1 of the Loan Agreement exceeds the loans outstanding
under the Loan Agreement by an amount less than $2,500,000
after Debtor has paid or reserved for payment of all accounts
payable which are more than sixty (60) days past the invoice
date, then Congress shall have the right to obtain such
appraisals on a quarterly basis."
5. The first sentence of Section 2.1 of the Inventory Security
Agreement Supplement to Inventory Financing Agreement and
Accounts Security Agreement is hereby amended to read as
follows:
"Except for Inventory in transit and Prepaid Inventory, the
only locations of any tangible Collateral are those addresses
listed on Schedule A annexed hereto and made a part hereof, as
amended from time to time upon 30 days' prior written notice to
you."
The amendment to the Loan Agreement described herein shall be
effective upon the dehvery by Borrower to Congress of a counterpart of
this Amendment No. 7 which has been acknowledged and agreed to by
Borrower, along with (i) resolutions of the board of directors of
Borrower pertaining to the subject matter hereof, in form and
substance satisfactory to Congress, and (ii) evidence of the consent
of the Official Unsecured Creditors Committee of Xxxxxxx Gordman 1/2
Price Stores, Inc. to this Amendment No. 7.
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Xxxxxxx Xxxxxxx 1/2 Price Stores, Inc.
April 7, 1997
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Except as expressly set forth herein, the Loan Agreement shall remain
unmodified and in full force and effect.
Very truly yours,
CONGRESS FINANCIAL CORPORATION (CENTRAL)
By /s/ Xxxxx Xxxxx
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Its Assistant Vice President
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ACKNOWLEDGED AND AGREED TO as of
the 18th day of April, 1997.
XXXXXXX GORDMAN 1/2 PRICE STORES, INC.
By /s/ Xxxxxxx X. Xxxxxxx
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Its President and CEO
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