Exhibit 10.2
VALUE CITY DEPARTMENT STORES, INC.,
AS THE BORROWER,
AND
SCHOTTENSTEIN STORES CORPORATION,
AS LENDER,
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SECOND AMENDMENT
DATED AS OF
FEBRUARY 1, 2002
TO
SUBORDINATED
CREDIT AGREEMENT
DATED AS OF
DECEMBER 11, 2000
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SECOND AMENDMENT TO SUBORDINATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, dated as of February 1, 2002
(the "AMENDMENT"), is among VALUE CITY DEPARTMENT STORES, INC., an Ohio
corporation (herein, together with its successors and assigns, the "BORROWER"),
and SCHOTTENSTEIN STORES CORPORATION, a Delaware corporation (the "LENDER").
PRELIMINARY STATEMENTS:
1. The Borrower and the Lender entered into a certain $50,000,000
Subordinated Credit Agreement, dated as of December 11, 2000 (the "ORIGINAL
CREDIT AGREEMENT"). Capitalized terms used in this Amendment and not otherwise
defined have the meanings assigned such terms in the Credit Agreement.
2. As of September 10, 2001, the Borrower and the Lender entered into a
certain First Amendment to Subordinated Credit Agreement (the "FIRST
AMENDMENT"), thereby amending and modifying the Original Credit Agreement (the
Original Credit Agreement, as so amended by the First Amendment, and as the same
may hereafter be amended from time to time, is hereinafter collectively referred
to as the "CREDIT AGREEMENT").
3. The parties hereto desire to make certain changes in the terms and
provisions of the Credit Agreement, all as more fully set forth below.
4. Amendment of the Credit Agreement requires the consent of the Senior
Agent, acting on instructions of the required lenders under the Senior Facility,
and the effectiveness of this Amendment is subject to obtaining such consent.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the Borrower and the Lender hereby agree as
follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT.
Subject to the satisfaction of each of the conditions to effectiveness
set forth in Section 5, the Credit Agreement is hereby amended as follows:
1.1. CERTAIN DEFINED TERMS. Section 1.1 of the Credit Agreement is
hereby amended by amending and restating the following definition in its
entirety:
"COMMITMENT" shall mean an amount up to the principal sum of
$100,000,000, as the same may be reduced from time to time pursuant to
section 3.3, or terminated pursuant to Section 4.2(h) or Section 10.2;
provided, however, that any amounts in excess of the principal sum of
$20,000,000 shall be advanced in the sole discretion of the Lender (any
such advances are referred to as "DISCRETIONARY ADVANCES").
The remainder of Section 1.1 of the Credit Agreement shall remain as originally
written.
1.2 ACCRUAL AND PAYMENT OF INTEREST. Paragraph (d) of Section 2.7 of
the Credit Agreement is hereby amended by amending and restating paragraph (d)
in its entirety as follows:
(d) ACCRUAL AND PAYMENT OF INTEREST. Interest shall accrue
from and including the date of any Borrowing to but excluding the date
of prepayment or repayment thereof and shall be payable in the case of
any Loan (A) which is a Prime Rate Loan or is a Eurodollar Loan,
quarterly in arrears on the last Business Day of January, April, July,
and October, and (B) on any prepayment or conversion (on the amount
prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
Except as otherwise modified herein, the remainder of Section 2.7 of the Credit
Agreement shall remain as originally written.
1.3 INTEREST ON PRIME RATE LOANS. Paragraph (a) of Section 2.7 of the
Credit Agreement is hereby amended by amending and restating paragraph (a) in
its entirety as follows:
(a) INTEREST ON PRIME RATE LOANS. Notwithstanding any other
provision of this Agreement (except for Section 2.7(c) below), but
subject to the consent of the required lenders under the Senior
Facility to the Second Amendment to Subordinated Credit Agreement
between Borrower and Lender, dated as of February 1, 2002, the unpaid
principal amount of each General Revolving Loan that is a Prime Rate
Loan shall bear interest effective beginning February 1, 2002, and
continuing until maturity (whether by acceleration or otherwise) at a
fixed rate of ten percent (10%) per annum.
Except as otherwise modified herein, the remainder of Section 2.7 of the Credit
Agreement shall remain as originally written.
1.4 INTEREST ON EURODOLLAR LOANS. Paragraph (b) of Section 2.7 of the
Credit Agreement is hereby amended by amending and restating paragraph (b) in
its entirety as follows:
(b) INTEREST ON EURODOLLAR LOANS. Notwithstanding any other
provision of this Agreement (except for Section 2.7(c) below), but
subject to the consent of the required lenders under the Senior
Facility to the Second Amendment to Subordinated Credit Agreement
between Borrower and Lender, dated as of February 1, 2002, (i) the
unpaid principal amount of each Eurodollar Loan shall bear interest
effective beginning February 1, 2002, and continuing until maturity
(whether by acceleration or otherwise) at a fixed rate of ten percent
(10%) per annum, and (ii) Lender waives the provisions of Section 2.10
of the Agreement.
Except as otherwise modified herein, the remainder of Section 2.7 of the Credit
Agreement shall remain as originally written.
1.5. INTEREST AFTER NOVEMBER 30, 2001 ON PRINCIPAL AMOUNT OF LOANS IN
EXCESS OF $20,000,000 PLUS DISCRETIONARY ADVANCES. Paragraph (g) of Section 2.7
of the Credit Agreement is hereby deleted in its entirety. Except as otherwise
modified herein, the remainder of Section 2.7 of the Credit Agreement shall
remain as originally written.
1.6. MANDATORY PREPAYMENT TERMINATION OF SENIOR FACILITY. A new
paragraph (h) of Section 4.2 of the Credit Agreement is hereby added to the
Credit Agreement and shall recite in its entirety as follows:
(h) MANDATORY PREPAYMENT---TERMINATION OF SENIOR FACILITY.
Notwithstanding any other provision of this Agreement, if the
Borrower's obligations under the Senior Facility have been fully
satisfied and all lending commitments thereunder terminated, whether in
connection with a refinancing or otherwise, the Commitment shall
terminate and the principal of,
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and any accrued interest in respect of, all Loans and all obligations
owing hereunder and thereunder shall be due and payable.
The remainder of Section 4.2 of the Credit Agreement shall remain as originally
written.
SECTION 2. RESERVED
SECTION 3. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants as follows:
3.1. AUTHORIZATION AND VALIDITY OF DOCUMENTS. This Amendment has been
duly authorized by all necessary corporate action on the part of each Credit
Party party thereto, has been duly executed and delivered by a duly authorized
officer of each such Credit Party, and constitutes the valid and binding
agreement of each such Credit Party, enforceable against such Credit Party in
accordance with its terms.
3.2. REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Credit Parties contained in the Credit Agreement and in the other Credit
Documents are true and correct in all material respects on and as of the date
hereof as though made on and as of the date hereof, except to the extent that
such representations and warranties expressly relate to an earlier specified
date, in which case such representations and warranties are hereby reaffirmed as
true and correct in all material respects as of the date when made.
3.3. NO EVENT OF DEFAULT. No condition or event has occurred or exists
that constitutes a Default or an Event of Default.
3.4. COMPLIANCE. The Borrower is in full compliance with all covenants
and agreements contained in the Credit Agreement, as amended hereby, and each
Credit Party is in full compliance with the other Credit Documents to which it
is a party.
SECTION 4. CONTINUING EFFECT OF CREDIT DOCUMENTS.
This Amendment shall not constitute an amendment or waiver of or
consent to any provision of the Credit Agreement or any other Credit Document
not expressly referred to herein and shall not be construed as an amendment,
waiver, or consent to any action on the part of the Borrower that would require
an amendment, waiver, or consent of the Lender except as expressly stated
herein. Except as expressly amended hereby, the provisions of the Credit
Agreement and each other Credit Document are and shall remain in full force and
effect in accordance with their respective terms.
SECTION 5. CONDITIONS TO EFFECTIVENESS.
This Amendment shall become effective as of February 1, 2002, subject
to the satisfaction of the following conditions:
(a) Counterparts of this Amendment shall have been executed by
the Borrower and the Lender,
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(b) The required lenders under the Senior Facility shall have
consented to the Amendment;
(c) The Acknowledgment and Consent appended hereto shall have
been executed by the Credit Parties named therein, and counterparts
thereof as so executed shall have been delivered to the Lender;
(d) The Borrower shall have paid or caused to be paid all
reasonable fees and expenses of the Lender and of counsel to the Lender
which have been invoiced on or prior to such date in connection with
the preparation, execution and delivery of this Amendment and the other
Credit Documents and the consummation of the transactions contemplated
hereby and thereby;
(e) The Lender shall have received certified copies of the
resolutions of the Board of Directors of the Borrower and each other
Credit Party, approving this Amendment and each of the Credit Documents
to which the Borrower or any such other Credit Party, as the case may
be, is or may become a party, and of all documents evidencing other
necessary corporate action and governmental approvals, if any, with
respect to the execution, delivery and performance by the Borrower or
any such other Credit Party of this Amendment and each of the Credit
Documents to which it is or may become a party;
(f) The Lender shall have received a certificate of the
Secretary, an Assistant Secretary or other authorized officer of the
Borrower and of each other Credit Party, certifying the names and true
signatures of the officers of the Borrower or such other Credit Party,
as the case may be, authorized to sign this Amendment and the Credit
Documents to which the Borrower or such other Credit Party is a party
and any other documents to which the Borrower or any such other Credit
Party is a party which may be executed and delivered in connection
herewith; and
(g) All corporate and other proceedings and all documents
incidental to the transactions contemplated hereby shall be
satisfactory in substance and form to the Lender, and the Lender shall
have received all such counterpart originals or certified or other
copies of such documents as the Lender may reasonably request.
and thereafter this Amendment shall be binding upon and inure to the benefit of
the Borrower and the Lender and their respective permitted successors and
assigns. After this Amendment becomes effective, the Lender will promptly
furnish a copy of this Amendment to the Borrower.
SECTION 6. MISCELLANEOUS.
6.1. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment, and no investigation by the Lender or any subsequent Loan or
other Credit Event shall affect the representations and warranties or the right
of the Lender to rely upon them.
6.2. REFERENCE TO CREDIT AGREEMENT. The Credit Agreement and any and
all other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Credit Agreement as amended hereby, are
hereby amended so that any reference therein to the Credit Agreement shall mean
a reference to the Credit Agreement as amended hereby.
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6.3. EXPENSES. As provided in the Credit Agreement, but without
limiting any terms or provisions thereof, the Borrower shall pay on demand all
reasonable costs and expenses incurred by the Lender in connection with the
preparation, negotiation, and execution of this Amendment, including without
limitation the reasonable costs and fees of the Lender's legal counsel,
regardless of whether this Amendment becomes effective in accordance with the
terms hereof, and all reasonable costs and expenses incurred by the Lender in
connection with the enforcement or preservation of any rights under the Credit
Agreement, as amended hereby.
6.4. SEVERABILITY. Any term or provision of this Amendment held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Amendment and the effect thereof shall be
confined to the term or provision so held to be invalid or unenforceable.
6.5. APPLICABLE LAW. This Amendment shall be governed by and construed
in accordance with the laws of the State of Ohio.
6.6. HEADINGS. The headings, captions and arrangements used in this
Amendment are for convenience only and shall not affect the interpretation of
this Amendment.
6.7. ENTIRE AGREEMENT. This Amendment is specifically limited to the
matters expressly set forth herein. This Amendment and all other instruments,
agreements and documentation executed and delivered in connection with this
Amendment embody the final, entire agreement among the parties hereto with
respect to the subject matter hereof and supersede any and all prior
commitments, agreements, representations and understandings, whether written or
oral, relating to the matters covered by this Amendment, and may not be
contradicted or varied by evidence of prior, contemporaneous or subsequent oral
agreements or discussions of the parties hereto. There are no oral agreements
among the parties hereto relating to the subject matter hereof or any other
subject matter relating to the Credit Agreement.
6.8. JURY TRIAL WAIVER. The parties hereto hereby confirm that the jury
trial waiver provisions of section 11.8(c) of the Credit Agreement shall be
fully applicable to this Amendment and the transactions contemplated hereby.
6.9. COUNTERPARTS. This Amendment may be executed by the parties hereto
separately in one or more counterparts, each of which when so executed shall be
deemed to be an original, but all of which when taken together shall constitute
one and the same agreement.
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IN WITNESS WHEREOF, this Amendment has been duly executed and delivered as
of the date first above written.
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VALUE CITY DEPARTMENT STORES, INC. SCHOTTENSTEIN STORES CORPORATION
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ BY: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Financial Officer ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice President
and Treasurer
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ACKNOWLEDGMENT AND CONSENT
For the avoidance of doubt, and without limitation of the intent and
effect of sections 6 and 10 of the Subsidiary Guaranty (as such term is defined
in the Credit Agreement referred to in the Second Amendment to Subordinated
Credit Agreement (the "AMENDMENT"), to which this Acknowledgment and Consent is
appended), each of the undersigned hereby unconditionally and irrevocably (i)
acknowledges receipt of a copy of the Credit Agreement and the Amendment, and
(ii) consents to all of the terms and provisions of the Credit Agreement as
amended by the Amendment.
Capitalized terms used herein and not otherwise defined have the
meanings assigned such terms in the Credit Agreement referred to herein. This
Acknowledgment and Consent is for the benefit of the Lender, any other person
who is a third party beneficiary of the Subsidiary Guaranty, and their
respective successors and assigns. No term or provision of this Acknowledgment
and Consent may be modified or otherwise changed without the prior written
consent of the Lender, given as provided in the Credit Agreement. This
Acknowledgment and Consent shall be binding upon the successors and assigns of
each of the undersigned. This Acknowledgment and Consent may be executed by any
of the undersigned in separate counterparts, each of which shall be an original
and all of which together shall constitute one and the same instrument.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, each of the undersigned has duly executed and
delivered this Acknowledgment and Consent as of the date of the Amendment
referred to herein.
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VALUE CITY OF MICHIGAN, INC., VALUE CITY LIMITED PARTNERSHIP,
AS A SUBSIDIARY GUARANTOR AS A SUBSIDIARY GUARANTOR
VC ACQUISITION, INC.,
AS A SUBSIDIARY GUARANTOR BY: WESTERVILLE ROAD GP, INC.,
GB RETAILERS, INC., ITS GENERAL PARTNER
AS A SUBSIDIARY GUARANTOR
WESTERVILLE ROAD GP, INC.,
AS A SUBSIDIARY GUARANTOR BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
WESTERVILLE ROAD LP, INC., --------------------
AS A SUBSIDIARY GUARANTOR ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
SHONAC CORPORATION, Chief Financial Officer and Treasurer
AS A SUBSIDIARY GUARANTOR
DSW SHOE WAREHOUSE, INC.
(f/k/a ▇▇▇▇▇▇▇▇▇ SHOE CO.),
AS A SUBSIDIARY GUARANTOR VALUE CITY ACQUISITION CORP.,
VALUE CITY DEPARTMENT STORES AS A SUBSIDIARY GUARANTOR
SERVICES, INC.
(f/k/a PENN MANAGEMENT, INC.),
AS A SUBSIDIARY GUARANTOR BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇▇ DELIVERY, INC., --------------------
AS A SUBSIDIARY GUARANTOR ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
GRAMEX RETAIL STORES, INC., Secretary
AS A SUBSIDIARY GUARANTOR
FILENE'S BASEMENT, INC.
(f/k/a BASE ACQUISITION CORP.),
AS A SUBSIDIARY GUARANTOR
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chief Financial Officer and Treasurer