Exhibit 10.1
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Second Amendment to Loan and Security Agreement is made as of this
28th day of May, 1998 by and between
BankBoston Retail Finance Inc. as Agent for the Lenders party to a certain
Loan and Security Agreement dated as of October 29, 1997, as amended and in
effect;
the Lenders party thereto; and
County Seat Stores, Inc., a Minnesota corporation with its principal
executive offices at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
in consideration of the mutual covenants herein contained and benefits to be
derived herefrom.
W I T N E S S E T H:
WHEREAS, on October 29, 1997, the Agent, the Lenders and the Borrower
entered in a certain Loan and Security Agreement,(as amended and in effect, the
"Agreement"); and
WHEREAS, the Agent, the Lenders and the Borrower desire to modify certain
of the provisions of the Agreement as set forth herein.
NOW, THEREFORE, it is hereby agreed among the Agent, the Lenders and the
Borrowers as follows:
1. Capitalized Terms. All capitalized terms used herein and not
otherwise defined shall have the same meaning herein as in the
Agreement.
2. Amendments to Article 1. The provisions of Article 1 of the Agreement
are hereby amended as follows:
(a) by adding the following new sentence at the end of the definition
of "Acceptable Inventory":
In no event shall Inventory reflected in the Borrower's stock
ledger Department 3010 constitute "Acceptable Inventory" at any
time on or after July 20, 1998.
(b) by deleting the definition of "Fixed Charge Coverage Ratio"
appearing therein and substituting the following in its stead:
"Fixed Charge Coverage Ratio": The ratio of the following, each
determined for the period in respect of which compliance with this
ratio is being determined:
EBITDA less Fixed Charges
-------------------------------------
The sum of cash payments of (a) interest
(other than to the holders of the New
Notes but only to the extent such cash payment is
funded from amounts presently deposited in the New Note
Disbursement Account (and any interest earned thereon), it being
agreed that any payments not funded from the New Note
Disbursement Account shall be included as "interest" for purposes
hereof) and (b) principal amortization.
(c) by amending the definition of "Fixed Charges" by deleting clause
(a) in its entirety.
3. Amendments to Article 5. The provisions of Article 5 of the Agreement
are hereby amended by deleting the provisions of Section 5-11(a) in
their entirety and substituting the following in its stead:
(a) The Borrower will not permit its Fixed Charge Coverage Ratio
to be less than the following for the periods indicated:
Fiscal Quarter Ending Ratio
On or About
--------------------- -----
January 31, 1998 1.25:1.00
April 30, 1998 1.25:1.00
July 31, 1998 1.00:1.00*
October 31, 1998 1.00:1.00**
January 31, 1999 and
thereafter 1.25:1.00
* For purposes of calculating the Borrower's compliance with
this covenant for the quarter ending on or about July 31, 1998
only, the parties agree that the numerator of the Fixed Charge
Coverage Ratio shall be calculated as follows:
EBITDA plus $12,000,000.00 less Fixed Charges
** For purposes of calculating the Borrower's compliance with
this covenant for the quarter ending on or about October 31, 1998
only, the parties agree that the numerator of the Fixed Charge
Coverage Ratio shall be calculated as follows:
2
EBITDA plus $1,700,000.00 less Fixed Charges
4. Ratification of Loan Documents. Except as provided herein, all terms
and conditions of the Agreement on the other Loan Documents remain in
full force and effect. The Borrower hereby ratifies, confirms, and
reaffirms (i) all of the representations, warranties and covenants
therein contained (except to the extent that such representations and
warranties expressly relate to an earlier date), and (ii) that all
Collateral secures all of the Liabilities, as modified hereby.
5. Conditions to Effectiveness. This Second Amendment to Loan and
Security Agreement shall not be effective until each of the following
conditions precedent have been fulfilled to the satisfaction of the
Agents:
(a) This Second Amendment to Loan and Security Agreement shall have
been duly executed and delivered by the Borrower, the Agent and
such percentage of the Lenders as is required to consent hereto
under the terms of the Agency Agreement. The Agent shall have
received a fully executed copy hereof and of each other document
required hereunder.
(b) All action on the part of the Borrower necessary for the valid
execution, delivery and performance by the Borrower of this
Second Amendment to Loan and Security Agreement shall have been
duly and effectively taken. The Agent shall have received from
the Borrower, a true copy of its certificate of the resolutions
adopted by its board of directors authorizing the transactions
described herein, certified by its secretary as of a recent date
to be true and complete.
(c) The Borrower shall have paid to the Agent, for the ratable
benefit of the Lenders consenting to this Second Amendment to
Loan and Security Agreement an amendment fee in the sum of
$200,000.00.
(d) The Borrower shall have paid to the Agent all fees and expenses
then due and owing pursuant to the Loan and Security Agreement,
as modified hereby, including, without limitation, reasonable
attorneys' fees incurred by the Agent.
(e) No Suspension Event shall have occurred and be continuing.
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(f) The Borrower shall have provided such additional instruments and
documents to the Agent as the Agent and its counsel may have
reasonably requested.
6. Miscellaneous.
(a) This Second Amendment to Loan and Security Agreement may be
executed in several counterparts and by each party on a separate
counterpart, each of which when so executed and delivered shall be an
original, and all of which together shall constitute one instrument.
(b) This Second Amendment to Loan and Security Agreement
expresses the entire understanding of the parties with respect to the
transactions contemplated hereby. No prior negotiations or
discussions shall limit, modify, or otherwise affect the provisions
hereof.
(c) Any determination that any provision of this Second
Amendment to Loan and Security Agreement or any application hereof is
invalid, illegal or unenforceable in any respect and in any instance
shall not effect the validity, legality, or enforceability of such
provision in any other instance, or the validity, legality or
enforceability of any other provisions of this Second Amendment to
Loan and Security Agreement.
(d) The Borrower shall pay on demand all costs and expenses of
the Agent, including, without limitation, reasonable attorneys' fees
in connection with the preparation, negotiation, execution and
delivery of this Second Amendment to Loan and Security Agreement.
(e) The Borrower warrants and represents that the Borrower has
consulted with independent legal counsel of the Borrower's selection
in connection with this Second Amendment to Loan and Security
Agreement and is not relying on any representations or warranties of
the Agent or any Lender or their respective counsel in entering into
this Second Amendment.
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IN WITNESS WHEREOF, the parties have hereunto caused this Second Amendment
to Loan and Security Agreement to be executed and their seals to be hereto
affixed as of the date first above written.
AGENT
BANKBOSTON RETAIL FINANCE INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Title: Director
LENDERS
BANKBOSTON RETAIL FINANCE INC.
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------
Title: Director
BANKAMERICA BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx Xxx
--------------------------------
Title: Vice President
CONGRESS FINANCIAL CORPORATION (CENTRAL)
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Title: Vice President
FOOTHILL CAPITAL CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------
Title: Asst. Vice President
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FINOVA CAPITAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------
Title: Asst. Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Title: Assistant Secretary
BORROWER
COUNTY SEAT STORES, INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------
Title: Chief Financial Officer
AGREED
CSS TRADE NAMES INC.
By: /s/ Xxxx X. Xxxxxxx
--------------------------
Title: Chief Financial Officer
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