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Exhibit 10.3.2
WAIVER AND AMENDMENT TO SENIOR SUBORDINATED
CONVERTIBLE LOAN AGREEMENT
THIS WAIVER AND AMENDMENT TO SENIOR SUBORDINATED CONVERTIBLE LOAN
AGREEMENT, dated as of December 11, 2000 (this "AMENDMENT"), is among VALUE CITY
DEPARTMENT STORES, INC., an Ohio corporation (herein, together with its
successors and assigns, the "BORROWER"), the lender listed on the signature
pages hereof (the "LENDER"), and SCHOTTENSTEIN STORES CORPORATION, a Delaware
corporation, as a Lender and as Administrative Agent (in such latter capacity,
the "ADMINISTRATIVE AGENT").
PRELIMINARY STATEMENTS:
1. The Borrower and Prudential Securities Credit Corp., LLC, as initial
lender and as administrative agent ("PSCC"), entered into the Senior
Subordinated Convertible Loan Agreement, dated as of March 15, 2000, as amended
from time to time (collectively, the "LOAN AGREEMENT"). Capitalized terms used
in this Amendment and not otherwise defined have the meanings assigned such
terms in the Loan Agreement.
2. As of December 11, 2000, PSCC has assigned all of its right, title
and interest in the Loan Agreement and attendant loan documents to Schottenstein
Stores Corporation.
3. The Borrower has failed to comply with the covenants set forth in
Sections 7.01 and 7.02 of the Loan Agreement and Events of Default under the
Loan Agreement have occurred and are continuing as a result of these failures to
comply and as a result of the occurrence of certain events of default under the
Senior Credit Facility (such Events of Default hereinafter collectively called
the "EXISTING DEFAULTS").
4. As of December 11, 2000, the Senior Credit Facility has been amended
and modified in certain respects.
5. The Borrower has requested the Lender to waive the Existing Defaults
and to amend the Loan Agreement for the purpose, among other things, of making
changes thereto that conform to the amendment and modification of the Senior
Credit Facility.
5. The Lender has agreed to the Borrower's requested waiver and to the
amendment of the Loan Agreement on the terms and subject to the conditions set
forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the Borrower, the Lender, and the Administrative
Agent hereby agree as follows:
SECTION 1. WAIVER
Subject to the satisfaction of each of the conditions to effectiveness
set forth in Section 5, the Lender hereby waives each of the Existing Defaults
through and including the date (the "Waiver Expiration Date") that is the
earlier of (a) the date upon which all Indebtedness under the Senior Credit
Facility has been indefeasibly paid in full and the commitments of all lenders
thereunder have terminated,
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and (b) the acceleration of the Obligations under the Senior Credit Facility, as
the term "Obligations" is defined in the Senior Credit Facility. This waiver is
limited strictly to the Existing Defaults, and shall not constitute a waiver of
any other Default or Event of Default, whether now existing or hereafter
arising, including without limitation any subsequent failure of the Borrower to
comply with the covenants set forth in Section 7.01 of the Loan Agreement after
the Waiver Expiration Date.
SECTION 2. AMENDMENTS TO LOAN AGREEMENT.
2.1 PERMITTED LIENS. Section 6.03 of the Loan Agreement is hereby
amended to include as Permitted Liens all Liens that are "Permitted Liens" under
the Senior Credit Facility.
2.2 DELETION OF CONSOLIDATED TOTAL DEBT/CONSOLIDATED EBITDA RATIO
FINANCIAL COVENANT. Section 7.02, "Consolidated Total Debt/Consolidated EBITDA
Ratio," of the Loan Agreement is hereby deleted in its entirety.
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 the Borrower,
has been duly executed and delivered by a duly authorized officer of the
Borrower, and constitutes the valid and binding agreement of the Borrower,
enforceable against the Borrower in accordance with its terms.
3.2. REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Borrower contained in the Loan Agreement and in the other Loan 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. Except for the Existing Defaults, 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 Loan Agreement, as amended hereby.
SECTION 4. CONTINUING EFFECT OF CREDIT DOCUMENTS.
This Amendment shall not constitute an amendment or waiver of or
consent to any provision of the Loan Agreement or any other Loan 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 Administrative Agent or the Lenders except
as expressly stated herein. Except as expressly amended hereby, the provisions
of the Loan Agreement and each other Loan Document are and shall remain in full
force and effect in accordance with their respective terms.
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SECTION 5. CONDITIONS TO EFFECTIVENESS.
This Amendment shall become effective on a date (the "AMENDMENT
EFFECTIVE DATE"), on or before December 11, 2000, if the following conditions
shall have been satisfied on and as of such date:
(a) counterparts of this Amendment shall have been executed by
the Borrower, the Lender and the Administrative Agent, and counterparts
hereof as so executed shall have been delivered to the Administrative
Agent;
and thereafter this Amendment shall be binding upon and inure to the benefit of
the Borrower, the Administrative Agent, and each Lender and their respective
permitted successors and assigns. After this Amendment becomes effective, the
Administrative Agent will promptly furnish a copy of this Amendment to each
Lender and 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 Administrative Agent or any
Lender or any subsequent Loan or other Credit Event shall affect the
representations and warranties or the right of the Administrative Agent or any
Lender to rely upon them.
6.2. REFERENCE TO LOAN AGREEMENT. The Loan Agreement and any and all
other agreements, instruments or documentation now or hereafter executed and
delivered pursuant to the terms of the Loan Agreement as amended hereby, are
hereby amended so that any reference therein to the Loan Agreement shall mean a
reference to the Loan Agreement as amended hereby.
6.3. EXPENSES. As provided in the Loan Agreement, but without limiting
any terms or provisions thereof, the Borrower shall pay on demand all reasonable
costs and expenses incurred by the Administrative Agent in connection with the
preparation, negotiation, and execution of this Amendment, including without
limitation the reasonable costs and fees of the Administrative Agent's special
legal counsel, regardless of whether this Amendment becomes effective in
accordance with the terms hereof, and all reasonable costs and expenses incurred
by the Administrative Agent or any Lender in connection with the enforcement or
preservation of any rights under the Loan 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
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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 Loan
Agreement.
6.8. JURY TRIAL WAIVER. The parties hereto hereby confirm that the jury
trial waiver provisions of section 12.11 of the Loan 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.
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered
as of the date first above written.
VALUE CITY DEPARTMENT STORES, INC. SCHOTTENSTEIN STORES CORPORATION,
INDIVIDUALLY AS A LENDER AND AS THE
ADMINISTRATIVE AGENT
BY: /S/ XXXXX X. XXXXXXX BY: /S/ XXXXXXX X. XXXXXXX
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TITLE: CFO, SECRETARY AND TREASURER TITLE: SENIOR VICE PRESIDENT
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