AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT
EXHIBIT 10.3
AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT
This AMENDMENT NO. 2 TO LOAN AND SECURITY AGREEMENT dated as of November 18, 2009 (this
“Amendment”), by and among (i) THE BON-TON DEPARTMENT STORES, INC. (“Bon-Ton”), a
Pennsylvania corporation, and THE XXXXX-XXXXXXX STORES CORP. (“Xxxxx-Xxxxxxx” and together
with Bon-Ton, collectively, the “Borrowers”), an Ohio corporation, (ii) BANK OF AMERICA,
N.A. (“Bank of America”), (iii) the financial institutions party from time to time party to
the Loan Agreement (as defined below) (together with Bank of America, the “Lenders”), and
(iv) BANK OF AMERICA, as agent for the Lenders (“Agent”), amends certain provisions of the
Loan and Security Agreement, dated as of March 6, 2006 among the Borrowers, the Lenders and the
Agent (as amended or supplemented and in effect from time to time, the “Loan Agreement”).
WHEREAS, the Borrowers, the Agent and the Lenders desire to amend certain provisions of the
Loan Agreement as provided more fully herein below;
WHEREAS, each of the undersigned guarantors (each, a “Guarantor”) have guaranteed the
Borrowers’ obligations to the Lenders and the Agent under or in respect of the Loan Agreement,
pursuant to the terms of that certain Guaranty dated as of March 6, 2006 (as amended or
supplemented and in effect on the date hereof, the “Guaranty”); and
WHEREAS, it is a condition precedent to the Lenders entering into this Amendment that each of
the Guarantors ratifies its obligations under the Guaranty;
NOW THEREFORE, in consideration of the mutual agreements contained in the Loan Agreement and
herein and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as follows:
§1. Defined Terms. Capitalized terms used herein without definition shall have the
meanings assigned to such terms in the Loan Agreement.
§2. Amendments to the Loan Agreement. Subject to the satisfaction of the conditions
set forth in Section 5 of this Amendment, the Loan Agreement is hereby amended as follows:
§2.1. Section 1.1 (Definitions) of the Loan Agreement. The definition of “Material
Contract” in Section 1.1 (Definitions) of the Loan Agreement is hereby amended by deleting existing
clause (d) of such definition in its entirety and substituting the following new clause (d) in lieu
thereof: “(d) that relates to the Mortgage Loan Debt, the Senior Note Debt, the Second Lien Debt
or other Debt in an aggregate amount of $5,000,000 or more.”
§2.2. Section 1.1 (Definitions) of the Loan Agreement. The definition of
“Refinancing Debt” in Section 1.1 (Definitions) of the Loan Agreement is hereby amended by deleting
the text “Section 10.2.1 (b), (c), (d), or (e)” in its entirety and substituting the following
text in lieu thereof: “Section 10.2.1 (b), (c), (d), (e) or (k).”
§2.3. Section 1.1 (Definitions) of
the Loan Agreement. Section 1.1 (Definitions) of
the Loan Agreement is hereby amended by adding the following new definitions in the appropriate
alphabetical order:
Intercreditor Agreement — the intercreditor agreement dated as of the closing
date of the Second Lien Facility, by and among Agent, the Second Lien Agent, each of the
Borrowers and the Guarantors, in form and substance reasonably satisfactory to the Agent,
as it may be amended, supplemented or otherwise modified from time to time.
Second Lien Agent — the administrative and collateral agent for the Second
Lien Debt under the Second Lien Loan Documents.
Second Lien Debt — the Debt under the Second Lien Loan Documents and any
Refinancing Debt thereof which satisfies the Refinancing Conditions.
Second Lien Lenders — the lenders under the Second Lien Loan Documents.
Second Lien Loan Agreement — the loan agreement by and among the Borrowers,
as borrowers, the Guarantors, as guarantors, the Second Lien Agent, the Second Lien Lenders
and each other party thereto, in form and substance reasonably satisfactory to the Agent,
as it may be amended, supplemented or otherwise modified from time to time in accordance
with the Intercreditor Agreement.
Second Lien Loan Documents — collectively, the Second Lien Loan Agreement and
each of the other documents (including, without limitation, all guaranties and security
documents), agreements, instruments, filings and certificates from time to time executed in
favor of the Second Lien Agent and/or the Second Lien Lenders, in each case, (x) with
respect to such documents in effect on the date of the issuance of the Second Lien Debt, in
form and substance reasonably satisfactory to the Agent (and the Agent hereby acknowledges
as such) and (y) with respect to such documents in effect after such date, as any of the
same may be amended, supplemented or otherwise modified from time to time in accordance
with the Intercreditor Agreement.
§2.4. Section 10.2.1 (Permitted Debt) of the Loan Agreement. Section 10.2.1
(Permitted Debt) of the Loan Agreement is hereby amended by restating clause (k) of such Section
10.2.1 in its entirety as follows:
“(k) Second Lien Debt in an aggregate principal amount not to exceed $100,000,000,
provided, however, that as of the date of issuance of the Second Lien Debt
(and subject to any amendments, supplements or other modifications from time to time in
accordance with the terms of the Intercreditor Agreement) (i) the final maturity of such
Debt shall not occur prior to Xxxxx 0, 0000 (xx) the terms and conditions of such Debt, the
Second Lien Loan Documents (together with any documents executed in connection with any
Refinancing Debt of the Second Lien Debt) and the Intercreditor Agreement are acceptable to
the Agent and (iii) except for (x) scheduled amortization of no more than 1% per annum and
(y) prepayments in connection with Asset Dispositions solely to the extent (i) the proceeds
thereof shall be required under the Loan Agreement to be applied to the Obligations and
(ii) the Required Lenders under the Loan Agreement have waived or forgiven (by way of
amendment, consent or otherwise) such requirement, there shall be no mandatory prepayments
or mandatory repayments of such Debt prior to the earlier of (A) March 6, 2011 and (B)
payment, in full, in cash (or other consideration acceptable to the
Lenders), of the Obligations under the Loan Agreement (other than unmatured contingent
Obligations);”
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§2.5. Section 10.2.2 (Permitted Liens) of the Loan Agreement. Section 10.2.2
(Permitted Liens) of the Loan Agreement is hereby amended by restating clause (i) of such Section
10.2.2 in its entirety as follows:
“(i) (y) Liens on the assets of SPE securing the Mortgage Loan Debt and the
Refinancing Debt of the Mortgage Loan Debt and (z) Liens securing the Second Lien Debt;
provided that such Liens are subject to, and have the priority set forth in, the
Intercreditor Agreement in all respects. For the avoidance of doubt, notwithstanding any
provision in this Loan Agreement or any other Loan Document to the contrary, Liens
permitted by this Section 10.2.2(i) shall be permitted to be created and suffered to
exist.”
§2.6. Section 10.2.8 (Restrictions on Payment of Certain Debt) of the Loan Agreement.
Section 10.2.8 (Restrictions on Payment of Certain Debt) of the Loan Agreement is hereby amended
by restating such Section 10.2.8 in its entirety as follows:
“10.2.8. Restrictions on Payment of Certain Debt. Make any payments (whether
voluntary or mandatory, or a prepayment, redemption, retirement, defeasance or acquisition)
with respect to the Senior Note Debt, the Mortgage Loan Debt, the Second Lien Debt and
Refinancing Debt of the Senior Note Debt, the Mortgage Loan Debt and the Second Lien Debt
other than (a) payments of interest, fees and expenses due in the ordinary course, (b)
regularly scheduled principal payments with respect to the Mortgage Loan Debt and
Refinancing Debt of the Mortgage Loan Debt and the Second Lien Debt, (c) payments of the
Senior Note Debt, the Second Lien Debt and Mortgage Loan Debt derived solely from
Refinancing Debt which meets the Refinancing Condition, (d) prepayments of the Second Lien
Debt with the proceeds of asset sales to the extent the Required Lenders have waived or
forgiven (by way of amendment, consent or otherwise) such requirement, and (e) other
payments of Senior Note Debt, Mortgage Loan Debt, Second Lien Debt and Refinancing Debt of
the Senior Note Debt, the Second Lien Debt and the Mortgage Loan Debt, so long as (i) no
Default or Event of Default shall have occurred and be continuing or would result after
giving effect to any such payment, (ii) Excess Availability on the date of the making of
such payment on a pro forma basis after giving effect to such payment, and projected Excess
Availability on a pro forma basis for the upcoming twelve month period (after giving effect
to such payment) is, in each case, greater than or equal to 25% of the lesser of (x) the
Tranche A Revolver Commitments plus the Tranche A-1 Revolver Commitments or (y) the
Tranche A Borrowing Base, plus the Tranche A-1 Borrowing Base, (iii) as of the
monthly fiscal period most recently then ended, the Consolidated Fixed Charge Coverage
Ratio (on a pro forma trailing 12 fiscal month basis, giving effect to the making of such
payment determined as though such payment occurred on the first day of the twelve (12)
fiscal month period ended prior to such payment) is not less than 1.1 to 1.0, and (iv) the
Borrowers shall have provided the Agent with a certificate not less than then (10) days
prior to the making of such payment executed by a Senior Officer, evidencing compliance, on
a pro forma basis, after giving effect to such payment, with the requirements set forth in
clauses (d)(ii) and (d)(iii) above) prior to its due date under the agreements evidencing
such Debt as in effect on the Closing Date (or as amended thereafter with the consent of
Agent).”
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§2.7. Section 10.2.14 (Restrictive Agreements) of the Loan Agreement. Section 10.2.14
(Restrictive Agreements) of the Loan Agreement is hereby amended by restating such Section 10.2.14
in its entirety as follows:
“10.2.14 Restrictive Agreements. Become a party to any Restrictive
Agreement, except (a) a Restrictive Agreement as in effect on the Closing Date and shown on
Schedule 9.1.16; (b) a Restrictive Agreement relating to secured Debt permitted hereunder,
if such restrictions apply only to the collateral for such Debt; (c) customary provisions
in leases and other contracts restricting assignment thereof; (d) Restrictive Agreements
contained in documents evidencing Refinancing Debt of the Senior Note Debt; (e) Restrictive
Agreements contained in documents evidencing the Second Lien Debt and (f) Restrictive
Agreements contained in documents evidencing Refinancing Debt of the Second Lien Debt.”
§2.8. Section 10.2.19 (Amendments to Certain Material Contracts) of the Loan
Agreement. Section 10.2.19 (Amendments to Certain Material Contracts) of the Loan Agreement is
hereby amended by inserting the following text at the end of such Section: “Each Obligor shall
not, and shall not permit any Subsidiary to, change, waive, refinance or amend any of the Second
Lien Loan Documents if such change, waiver, refinancing or amendment is prohibited by the
Intercreditor Agreement”.
§2.9. Section 10.2.24 (Indebtedness under Senior Note Debt Documents) of the Loan
Agreement. Section 10.2.24 (Indebtedness under Senior Note Debt Documents) of the Loan
Agreement is hereby amended by restating such Section 10.2.24 in its entirety as follows:
“10.2.24. Indebtedness under Senior Note Debt Documents. Incur any
Indebtedness (as defined in the Senior Note Indenture), other than (i) the Obligations,
(ii) the Mortgage Loan Debt and any Refinancing Debt of the Mortgage Loan Debt and (iii)
the Second Lien Debt, that at the time of the incurrence thereof, or at any time
thereafter, is Indebtedness (as defined in the Senior Note Indenture) permitted to be
incurred under the Senior Note Indenture as a result of such Indebtedness (as defined in
the Senior Note Indenture) being permitted under Section 4.09(b)(1) of the Senior Note
Indenture.”
§2.10. Amendment to Schedule 9.1.16 (Burdensome Contracts) of the Loan Agreement.
Upon the closing of the transactions contemplated Second Lien Loan Documents, Schedule 9.1.16
(Burdensome Contracts) of the Loan Agreement shall be deemed to be amended by including the Second
Lien Loan Documents on such Schedule 9.1.16.
§3. Affirmation and Acknowledgment. Each of the Borrowers hereby ratifies and
confirms all of its Obligations to the Lenders and the Agent, including, without limitation, the
Loans, and the Borrower hereby affirms its absolute and unconditional promise to pay to the Lenders
the Loans, the Obligations, and all other amounts due under the Loan Agreement as amended hereby.
The Borrower hereby confirms that the Obligations are and remain secured pursuant to the Security
Documents and pursuant to all other instruments and documents executed and delivered by the
Borrower as security for the Obligations.
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§4. Representations and Warranties. Each of the Borrowers hereby represents and
warrants to the Lenders and the Agent as follows:
(a) The execution and delivery by each of the Borrowers of this Amendment and the performance
by the Borrowers of its obligations and agreements under this Amendment and the Loan Agreement as
amended hereby are within the corporate authority of each Borrower, have been duly authorized by
all necessary corporate proceedings on behalf of each Borrower, and do not and will not contravene
any provision of law, statute, rule or regulation to which any Borrower is subject or such
Borrower’s charter, other incorporation papers, by-laws or any stock provision or any amendment
thereof or of any agreement or other instrument binding upon such Borrower.
(b) Each of this Amendment and the Loan Agreement as amended hereby constitutes the legal,
valid and binding obligation of the Borrowers, enforceable against the Borrowers in accordance with
their respective terms, except as limited by bankruptcy, insolvency, reorganization, moratorium or
other laws relating to or affecting generally the enforcement of creditors’ rights and general
equitable principles.
(c) No approval or consent of, or filing by any Borrower with, any governmental agency or
authority is required to make valid and legally binding the execution, delivery or performance by
the Borrowers of this Amendment.
(d) The representations and warranties contained in Section 9 of the Loan Agreement, the other
Loan Documents or in any document or instrument delivered pursuant to or in connection with the
Loan Agreement are true and correct in all material respects on and as of the date made and as of
the date hereof, except to the extent that such representations and warranties specifically refer
to an earlier date and except for changes which do not constitute a violation of the Loan
Agreement.
(e) As of the date hereof, after giving effect to the provisions hereof, there exists no Event
of Default or Default.
§5. Conditions. This Amendment shall become effective as of the date first set forth
above upon the satisfaction of the following conditions precedent:
(a) this Amendment and all related documents, as applicable, shall have been duly executed and
delivered by each Obligor, the Required Lenders, the Agent and each other party thereto, as
applicable, and shall be in full force and effect; and
(b) Each of the representations and warranties set forth in Section 4 of this Amendment shall
be true and correct in all material respects.
§6. Ratification of Loan Documents. Each of the Obligors hereby ratifies and confirms
the Security Documents to which it is a party and the guarantees, pledges and security interests
created thereby. Each of the Obligors ratifies and confirms that the pledges and security
interests created by the Security Documents to which it is a party secure the obligations that are
secured pursuant to such Security Document. Each of the Guarantors ratifies and confirms that the
guaranties created by the Guaranty guarantee the Obligations of the Borrowers under the Loan
Agreement.
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§7. Miscellaneous Provisions.
§7.1. Except as otherwise expressly provided by this Amendment, all of the terms, conditions
and provisions of the Loan Agreement and the other Loan Documents shall remain the
same. It is declared and agreed by each of the parties hereto that the Loan Agreement and the
Loan Documents, as amended hereby, shall continue in full force and effect, and that this Amendment
and the Loan Agreement and the other Loan Documents shall be read and construed as one instrument.
All references in the Loan Agreement or any related agreement or instrument to the Loan Agreement
shall hereafter refer to the Loan Agreement as amended hereby.
§7.2. This Amendment shall be construed according to and governed by the laws of the State of
New York, including without limitation, New York General Obligations Law §§ 5-1401 and 5-1402 (but
giving effect to federal laws relating to national banks).
§7.3. This Amendment may be executed in any number of counterparts, but all such counterparts
shall together constitute but one instrument. In making proof of this Amendment, it shall not be
necessary to produce or account for more than one counterpart signed by each party hereto by and
against which enforcement hereof is sought. Delivery of an executed counterpart of a signature
page of this Amendment by telecopy or other electronic transmission shall be as effective as
delivery of a manually executed counterpart of this Amendment.
§7.4. The Borrowers hereby agrees to pay to the Agent, on demand by the Agent, all reasonable
and documented out-of-pocket costs and expenses incurred or sustained by the Agent in connection
with the preparation of this Amendment (including legal fees).
§7.5. This Amendment shall constitute a Loan Document under the Loan Agreement, and all
obligations included in this Amendment (including, without limitation, all obligations for the
payment of principal, interest, fees, and other amounts and expenses) shall constitute Obligations
under the Loan Documents and be secured by the collateral security for the Obligations.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above
written.
| THE BON-TON DEPARTMENT STORES, INC. | ||||
| /s/ Xxxxx X. Xxxxxxx
|
||||
| Title: Executive Vice President, Chief Financial Officer | ||||
| and Principal Accounting Officer | ||||
| Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxx | ||||
| Telecopy: (000) 000-0000 | ||||
| THE XXXXX-XXXXXXX STORES CORP. | ||||
| /s/ H. Xxxx Xxxxxxxxx
|
||||
| Title: Vice President — Treasurer | ||||
| Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxx | ||||
| Telecopy: (000) 000-0000 |
(Signature Page to Second Amendment)
| BANK OF AMERICA, N.A., as | ||||||
| Agent and Lender | ||||||
| By: | /s/ Xxxxxx Xxxxxxx
|
|||||
| Title: Senior Vice President | ||||||
| Address: | ||||||
| 000 Xxxxxxx Xxxxxx | ||||||
| Xxxxxx, Xxxxxxxxxxxxx 00000 | ||||||
| Attn: Xxxxxx Xxxxxxx | ||||||
| Telecopy: | ||||||
(Signature Page to Second Amendment)
Each of the undersigned Obligors hereby joins in this Amendment for the purpose of consenting
to and being bound by the provisions of §6 hereof and acknowledging the Amendment.
| THE BON-TON STORES, INC. | ||||
| /s/ Xxxxx X. Xxxxxxx
|
||||
| Title: Executive Vice President, Chief Financial Officer | ||||
| and Principal Accounting Officer | ||||
| Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxx | ||||
| Telecopy: (000) 000-0000 | ||||
| THE BON-TON TRADE, LLC (formerly known as The Bon-Ton Trade Corp.) | ||||
| /s/ Xxxxx X. Xxxxxxx
|
||||
| Title: Treasurer and Chief Financial Officer | ||||
| Address: 000 Xxxxxxxx Xxxxxx, Xxxxx 00000, Xxxxxxxxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxx | ||||
| Telecopy: (000) 000-0000 | ||||
| THE BON-TON STORES OF LANCASTER, INC. | ||||
| /s/ Xxxxxx X. Xxxxx
|
||||
| Title: Secretary and Treasurer | ||||
| Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxx | ||||
| Telecopy: (000) 000-0000 | ||||
| THE BON-TON GIFTCO, INC. | ||||
| /s/ Xxxxx X. Xxxxxxx
|
||||
| Title: President and Chief Financial Officer | ||||
| Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxx | ||||
| Telecopy: (000) 000-0000 |
(Signature Page to Second Amendment)
| BON-TON DISTRIBUTION, INC. (formerly known as Saks Distribution Centers, Inc.) | ||||
| /s/ H. Xxxx Xxxxxxxxx
|
||||
| Title: Vice President — Treasurer | ||||
| Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxx | ||||
| Telecopy: (000) 000-0000 | ||||
| MCRIL, LLC | ||||
| /s/ H. Xxxx Xxxxxxxxx
|
||||
| Title: Vice President — Treasurer | ||||
| Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxx | ||||
| Telecopy: (000) 000-0000 | ||||
| XXXXXX XXXXX XXXXX XX, INC. (formerly known as XxXxx’x, Inc.) | ||||
| /s/ H. Xxxx Xxxxxxxxx
|
||||
| Title: Vice President — Treasurer | ||||
| Address: 0000 Xxxx Xxxxxx Xxxxxx, Xxxx, XX 00000 | ||||
| Attn: Xxxxx X. Xxxxxxx | ||||
| Telecopy: (000) 000-0000 |
(Signature Page to Second Amendment)
| LENDERS: GENERAL ELECTRIC CAPITAL CORPORATION |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Duly Authorized Signatory | |||
| Address: | 00 Xxxxxxxxx Xxxxx, 0xx Xxxxx | |||
| Xxxxxxx, Xxxxxxxxxxx 00000 | ||||
| Attn: | Xxxxxxx Xxxxxx | |||
| Telecopy: | 000-000-0000 |
(Signature Page to Second Amendment)
| XXXXX FARGO RETAIL FINANCE, LLC |
||||
| By: | /s/ Xxxxxx Xxx | |||
| Name: | Xxxxxx Xxx | |||
| Title: | Assistant VP | |||
| Address: | Xxx Xxxxxx Xxxxx, Xxxxx 0000 | |||
| Xxxxxx, Xxxxxxxxxxxxx 00000 | ||||
| Attn: | Xxxxxx Xxx | |||
| Telecopy: | 000-000-0000 |
(Signature Page to Second Amendment)
| GE BUSINESS FINANCIAL SERVICES INC. (formerly known as Xxxxxxx Xxxxx Business Financial Services Inc.) |
||||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Its Duly Authorized Signatory | |||
| Address: | 00 Xxxxxxxxx Xxxxx, 0xx Xxxxx | |||
| Xxxxxxx, Xxxxxxxxxxx 00000 | ||||
| Attn: | Xxxxxxx Xxxxxx | |||
| Telecopy: | 000-000-0000 |
(Signature Page to Second Amendment)
