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Amendment No. 1, dated as of September 16, 1996 (this
"Amendment"), to the Second Amended and Restated Loan Agreement,
dated as of October 18, 1995 (as heretofore amended, supplemented
or otherwise modified, the "Agreement") among Xxxxxxxx-Alco
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Stores, Inc. (the "Borrower") BankAmerica Business Credit, Inc.,
individually and as agent (the "Agent") and Transamerica Business
Credit Corporation (collectively with the Agent, the "Lenders").
WITNESSETH
WHEREAS, Borrower has requested that the Agreement be amended by
the Lenders' amending certain provisions of the Agreement and the
Lenders are willing to do so on the terms and conditions as
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. DEFINED TERMS. Unless otherwise defined herein
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capitalized terms used herein have the meanings set forth
in the Agreement.
2. CONSENT. The Lenders consent to the assignment to
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and assumption by the Borrower of fourteen (14) leases of
store locations from Val Corporation, an Indiana
Corporation.
3. AMENDMENTS.
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(a) Section 7.2 (1) is hereby amended in its entirety
to read as follows:
"Upon request, within forty-five (45) days after
the end of each fiscal quarter, a report of the
Capital Expenditures of the Borrower for such
quarter and for the period from the beginning of
the then current Fiscal Year to the end of such
quarter, in each case, detailing the amount of
Capital Expenditures related to the new stores (the
"New Stores") opened with the proceeds from the
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Borrower's public offering of shares of its common
equity securities (the "Offerings") and showing
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the balance of the proceeds remaining from each
Offering".
(b) Section 9.17 and Section 9.21 are each hereby
amended by adding an "s" to the term "Offering" to
make it "Offerings" whenever it appears therein.
(c) Section 9.18 is hereby amended in its entirety to
read as follows:
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"Store Acquisitions and Lease Obligations.
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Neither Borrower nor its Subsidiaries shall
increase the number of store facilities by more
than 40 additional stores (a maximum of 18 "Alco"
stores and a maximum of 22 "Xxxxxxxx" stores) in
any Fiscal Year except that in the 1998 Fiscal
Year, the increase in the number of store
facilities shall not exceed 50 (not more than
27 "Alco Stores" nor 23 "Xxxxxxxx" stores). Neither
the Borrower nor any of its Subsidiaries shall
enter into any lease of real or personal property
as lessee or sublessee, if, after giving affect
thereto, the aggregate amount of Rentals (as
hereinafter defined) payable by the Borrower and
its Subsidiaries in any Fiscal Year in respect of
such lease and all other such leases would increase
the current annual lease obligations of Borrower
and its Subsidiaries by more than $2,000,000 per
annum (such amount being referred to herein as
"Permitted Rentals"). The term "Rentals"
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means all payments due as a lessee or sublessee
under a lease for the basic rent".
(d) Section 9.19 and Section 9.24 are each hereby
amended by adding the following after the phrase
"Adjusted Tangible Net Worth" whenever it appears
in the text thereof:
"(excluding from the calculation of Adjusted
Tangible Net Worth solely for purposes of this
covenant, 80% of the proceeds of any Offering other
than Borrower's initial Offering)".
4. REPRESENTATIONS AND WARRANTIES. To induce Lenders to
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enter into this Amendment, Borrower hereby represents and
warrants as follows, with the same effect as if such
representations and warranties were set forth in the
Agreement.
(a) Borrower has the power and authority to enter into
this Amendment, and has taken all corporate action
required to authorize its execution, delivery and
performance of this Amendment. This Amendment has
been duly executed and delivered by Borrower and
the Agreement, as amended hereby, constitutes the
valid and binding obligation of Borrower,
enforceable against Borrower n accordance with its
terms. The execution, delivery, and performance of
this Amendment and the Agreement, as amended
hereby, by Borrower, will not violate its
certificate of incorporation or by-laws or any
agreement or legal requirement binding on Borrower.
(b) On the date hereof and after giving effect to the
terms of this Amendment, (i) the Agreement and the
other Loan Documents are in full force and effect
and, to the extent that Borrower is a party
thereto, constitutes its binding obligation,
enforceable against it in accordance
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with their respective terms; (ii) no Default or Event of
Default has occurred and is continuing; and (iii)
Borrower does not have any defense to or setoff,
counterclaim or claim against payment of the
obligations and enforcement of the Loan Documents
based upon a fact or circumstance existing or
occurring on or prior to the date hereof.
5. LIMITED EFFECT. Except as expressly amended hereby,
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all of the covenants and provisions of the Agreement are
and shall continue to be in full force and effect.
6. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
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AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE
INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF NEW YORK.
7. COUNTERPARTS. This Amendment may be executed by the
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parties hereto in any number of separate counterparts,
each of which shall be an original, and all of which
taken together shall be deemed to constitute one and the
same.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed by their respective proper and duly authorized
officers as of the day and year first above written.
XXXXXXXX-ALCO STORES, INC.
By: /s/ Xxxxx X. XxXxxxxxx
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Name: Xxxxx X. XxXxxxxxx
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Title VP-Finance
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BANKAMERICA BUSINESS CREDIT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
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Name: Xxxxxx X. Xxxxxxxx
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Title: Vice President
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TRANSAMERICA BUSINESS CREDIT
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
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Name: Xxxxxx X. Xxxxxx
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Title: Region Credit Manager
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