THIRD AMENDMENT
THIRD AMENDMENT dated as of September 23, 1998 (this "AMENDMENT"), by and
among LAMONTS APPAREL, INC., a Delaware corporation (the "BORROWER"), having its
principal place of business at 00000 Xxxxxxx Xxxx X.X., Xxxxxxxx, XX 00000,
BANKBOSTON, N.A. (f/k/a "The First National Bank of Boston"), a national banking
association with its head office at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000 (the "BANK"), and BANKBOSTON, N.A. (f/k/a "The First National Bank of
Boston"), as Agent (the "AGENT") amending certain provisions of the Amended and
Restated Debtor in Possession and Exit Financing Loan Agreement by and among the
Borrower, the Bank, and the Agent dated as of September 26, 1997 as previously
amended by a First Amendment dated as of January 8, 1998 and a Second Amendment
dated as of April 1, 1998 (as so amended, the "LOAN AGREEMENT"). Terms not
otherwise defined herein which are defined in the Loan Agreement shall have the
respective meanings herein assigned to such terms in the Loan Agreement.
WHEREAS, the Borrower has requested that the Bank and the Agent agree to
amend the terms of the Loan Agreement in certain respects; and
WHEREAS, the Bank and the Agent are willing to amend the terms of the Loan
Agreement in such respects, upon the terms and subject to the conditions
contained herein; and
NOW, THEREFORE, in consideration of the mutual agreements contained in the
Loan Agreement, herein and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto hereby
agree as follows:
Section 1. AMENDMENTS TO SECTION 1.1 OF THE LOAN AGREEMENT. Section 1.1
of the Loan Agreement is hereby amended as follows:
NEW DEFINITIONS. Section 1.1 of the Loan Agreement is hereby amended by
adding to Section 1.1 in the appropriate location in the alphabetical sequence
the following new definition:
"ADDITIONAL AMENDMENT FEE: That certain fee in the amount of
$50,000."
DEFINITION OF "BORROWING BASE." Section 1.1 of the Loan Agreement is
amended by deleting clauses (a) and (b) appearing in the definition of
"Borrowing Base," and substituting therefor the following:
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"(a) Except as otherwise provided in paragraph (b) hereof, at any time
on or after the Exit Facility Date:
(i) 65% of the result of (A) Eligible Inventory at
such time, MINUS (B) the Inventory Shrink Reserve; MINUS
(ii) the aggregate amount of any Landlord Lien Reserves
with respect to all Specified Leases at such time.
(b) Provided the Agent shall have received on or prior to January
13, 1999 (A) an updated collateral appraisal and assessment of the
Borrower's inventory including, without limitation, its mix and quality
in form and substance satisfactory to the Banks and the Surety in their
absolute discretion, and (B) the Additional Amendment Fee for the account
of the Term Loan Lender (which in turn will be for the account of the
Surety), during the period commencing on January 15, 1999 and ending on
June 30, 1999:
(i) 70% of the result of (A) Eligible Inventory at
such time, MINUS (B) the Inventory Shrink Reserve; MINUS
(ii) the aggregate amount of any Landlord Lien Reserves
with respect to all Specified Leases at such time."
DEFINITION OF "EXIT COMMITMENT." Section 1.1 of the Loan Agreement is
further amended by deleting the words, "the lesser of," and clauses (a) and (b)
appearing in the definition of "Exit Commitment," and substituting therefor the
following:
"$32,000,000 during the period commencing on the Effective Date and
ending on October 14, 1998, $35,000,000 during the period commencing on
October 15, 1998, and ending on December 15, 1998, and $32,000,000 during
the period commencing on December 16, 1998 and at all applicable times
thereafter; as such amount may be reduced from time to time or terminated
hereunder, PROVIDED THAT, so long as any Derivative Contract is in effect,
the "Exit Commitment" shall be reduced by any amount by which the sum of
all Derivative Contract Termination Obligations exceeds $600,000."
DEFINITION OF "TOTAL EXIT COMMITMENT." Section 1.1 of the Loan Agreement
is further amended by deleting the proviso appearing in the definition of "Total
Exit Commitment."
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Section 2. AMENDMENT TO EXIT REVOLVING CREDIT NOTE. In furtherance of
the foregoing, the Exit Revolving Credit Note is hereby amended by changing the
amount "$32,000,000" to "$35,000,000" in each place such amount appears, and by
changing the phrase "Thirty-Two Million" to "Thirty-Five Million", in each place
such amount appears in the Exit Revolving Credit Note. Each Revolving Credit
Bank is authorized to reflect such change on its Exit Revolving Credit Note.
Section 3. AMENDMENT FEE. The Borrower agrees to pay to the Agent, for
the account of the Revolving Credit Bank, a Third Amendment amendment fee (the
"Amendment Fee") in the amount of $30,000. The Borrower hereby authorizes the
Agent to debit its Operating Account to pay the Amendment Fee on the effective
date of this Third Amendment.
Section 4. REPRESENTATIONS, WARRANTIES AND COVENANTS; NO DEFAULT;
AUTHORIZATION. The Borrower hereby represents, warrants and covenants to the
Agent as follows:
(a) Each of the representations and warranties of the Borrower contained
in the Loan Agreement or in any other Loan Documents was true and correct as of
the date as of which it was made and is true and correct in all material
respects as of the date of this Amendment except to the extent such
representations and warranties expressly related to a prior date (in which case
they shall be true and correct as of such earlier date); and no Default or Event
of Default has occurred and is continuing as of the date of this Amendment;
(b) This Amendment has been duly authorized, executed and delivered by the
Borrower; and
(c) This Amendment shall constitute the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms.
Section 5. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Amendment shall be subject to satisfaction of the following conditions on or
prior to September 30, 1998:
(a) This Amendment shall have been duly executed and delivered by the
Borrower, the Banks, and the Agent.
(b) The Agent shall have received copies, certified by a duly authorized
officer of the Borrower as of the date hereof, of the resolution of the board of
directors of the Borrower approving the transactions contemplated hereby and the
execution and delivery of this Amendment, and as to the titles, incumbency, and
specimen signatures of the officers signing this Amendment and the documents
relating thereto.
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(c) The Agent shall have received a certificate of a duly authorized
officer of the Borrower (i) certifying that no amendments to the certificate or
articles of incorporation or organization of the Borrower have been undertaken
since such documents were last delivered to the Agent, and (ii) certifying that
no amendments to the by-laws of the Borrower have been undertaken since such
documents were last delivered to the Agent.
(d) The Agent shall have received from Borrower the most recently required
Borrowing Base Report.
(e) The Agent shall have received a favorable legal opinion addressed to
the Banks and the Agent, dated as of the date hereof, in form and substance
satisfactory to the Agent, from Xxxx, Xxxxxxx & Cleveland, counsel to the
Borrower.
(f) The Agent shall have received the Amendment Fee.
(g) The Agent shall have received written confirmation of approval of this
Amendment executed by the Surety and written ratification of the Supplemental
Guaranty (as defined in the Purchase and Guaranty Agreement) executed by the
Guarantor (as defined in the Purchase and Guaranty Agreement), each in form and
substance satisfactory to the Agent.
(h) The Agent shall have received such other documents or instruments
relating hereto as the Agent shall have reasonably requested.
Section 6. RATIFICATION, ETC. Except as expressly amended hereby, the
Loan Agreement, the other Loan Documents, and all documents, instruments and
agreements related thereto are hereby ratified and confirmed in all respects.
All references in the Loan Agreement or any related agreement or instrument to
the Loan Agreement or the Notes shall hereafter refer to the Loan Agreement or
the Notes as amended hereby.
Section 7. NO OTHER CHANGES; NO IMPLIED WAIVER. Except as expressly
provided herein, the Loan Agreement and the other Loan Documents shall be
unaffected hereby and shall continue in full force and effect, and nothing
contained herein shall constitute a waiver by the Agent or any Bank of any
right, remedy, Default, or Event of Default, or impair or otherwise affect any
Obligations, any other obligations of the Borrower, or any right of the Agent or
any Bank consequent thereon.
Section 8. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
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Section 9. GOVERNING LAW. THIS AMENDMENT SHALL FOR ALL PURPOSES BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS (WITHOUT REFERENCE TO CONFLICTS OF LAW).
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IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as a
sealed instrument as of the date first above written.
LAMONTS APPAREL, INC.
By: /s/ Xxxxx Xxxxxxxxxx
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Name: Xxxxx Xxxxxxxxxx
Title: Vice Chairman
BANKBOSTON, N.A., in its
respective capacities as a Revolving
Credit Bank and Agent
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
BANKBOSTON, N.A., as Term Loan Lender
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
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CONFIRMATION OF THE SURETY
AND
OF THE GUARANTOR
The Surety hereby confirms approval of the foregoing amendment in all
respects and directs the Term Loan Lender to give its consent thereto. The
Guarantor (as defined in the Purchase and Guaranty Agreement) hereby ratifies
and confirms the Supplemental Guaranty (as defined in the Purchase and Guaranty
Agreement) in all respects, and agrees that the Supplemental Guaranty, after
giving effect to foregoing amendment, shall continue in full force and effect.
SPECIALTY INVESTMENT I LLC
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
Title: Mgr & CFO
XXXXXX XXXXXXXX PARTNERS, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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Name: Xxxx X. Xxxxxxxxx
Title: CFO/SVP
