Exhibit 10.1
VALUE CITY DEPARTMENT STORES, INC.,
AS THE BORROWER,
AND
SCHOTTENSTEIN STORES CORPORATION,
AS LENDER,
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FIRST AMENDMENT
DATED AS OF
SEPTEMBER 10, 2001
TO
SUBORDINATED
CREDIT AGREEMENT
DATED AS OF
DECEMBER 11, 2000
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FIRST AMENDMENT TO SUBORDINATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT, dated as of September 10,
2001 ("THIS 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 "CREDIT
AGREEMENT"). Capitalized terms used in this Amendment and not otherwise defined
have the meanings assigned such terms in the Credit Agreement.
2. The Borrower has requested that the Lender extend additional credit
to the Borrower and amend the Credit Agreement to provide such additional
credit.
3. The Lender has agreed to the Borrower's requested additional credit
and amendments on the terms and subject to the conditions set forth in this
Amendment.
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 Borrower has obtained 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, terminated pursuant to 10.2 or adjusted from time to time
pursuant to section 11.4; provided, however, that any amounts in excess
of the principal sum of $70,000,000 shall be advanced in the sole
discretion of the Lender; provided, further, that once the aggregate
unpaid principal sum of the Loans, for the first time, equals or
exceeds $70,000,000, any amounts thereafter advanced when the aggregate
principal sum of the Loans exceeds $20,000,000 ("DISCRETIONARY
ADVANCES") shall be advanced in the sole discretion of the Lender.
The remainder of Section 1.1 of the Credit Agreement shall remain as originally
written.
1.2. NOTES. Paragraph (a) of Section 2.5 of the Credit Agreement is
hereby amended by amending and restating paragraph (a) in its entirety as
follows:
2.5. NOTES. (a) The Borrower's obligation to pay the principal
of, and interest on, the Loans made to it by the Lender shall be
evidenced by a promissory note substantially in the
form of Exhibit A attached to a certain First Amendment to Subordinated
Credit Agreement dated as of September 10, 2001 (the "GENERAL REVOLVING
NOTE").
The remainder of Section 2.5 of the Credit Agreement shall remain as originally
written.
1.3 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.
(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, quarterly in arrears on the
last Business Day of January, April, July, and October, (B) which is a
Eurodollar Loan, on the last day of each Interest Period applicable
thereto, and in the case of Interest Period in excess of three months,
on the dates which are successively three months after the commencement
of such Interest Period, and (C) on any prepayment or conversion (on
the amount prepaid or converted), at maturity (whether by acceleration
or otherwise) and, after such maturity, on demand; provided, however
that any interest accruing at the 15% Rate on the unpaid balance of the
Post-November 30 Excess Principal Amount shall be payable as follows:
(i) interest accruing at 8% per annum on such amount shall be payable
as provided in this paragraph (d) of Section 2.7 above, and (ii)
interest accruing in excess of 8% per annum (the "PIK Interest") shall
be capitalized and added to the principal balance of the Loan. The
Borrower hereby authorizes Lender to enter the amounts of the PIK
Interest as an advance on the revolving loan account for the Loan.
1.4. INTEREST AFTER NOVEMBER 30, 2001 ON PRINCIPAL AMOUNT OF LOANS IN
EXCESS OF $20,000,000 PLUS DISCRETIONARY ADVANCES. A new paragraph (g) is hereby
added to Section 2.7 of the Credit Agreement and shall recite in its entirety as
follows:
(g) INTEREST AFTER NOVEMBER 30, 2001 ON PRINCIPAL AMOUNT OF
LOANS IN EXCESS OF $20,000,000 PLUS DISCRETIONARY ADVANCES.
Notwithstanding the above provisions, if, after November 30, 2001, the
aggregate unpaid principal amount of the Loans exceeds the sum of (i)
$20,000,000, plus (ii) the aggregate principal amount of any
outstanding Discretionary Advances (the Post-November 30 Excess
Principal Amount"), then interest shall accrue on the Post-November 30
Excess Principal Amount from December 1, 2001, or such later date that
such amount becomes outstanding, until maturity (whether by
acceleration or otherwise) at the fixed rate of 15 percent per annum
(the "15% Rate"). Any payment of principal in respect of the Loans
shall first be applied to that portion of the Loans bearing interest at
the 15% Rate.
The remainder of Section 2.7 of the Credit Agreement shall remain as originally
written.
1.5. MANDATORY PREPAYMENT CERTAIN PROCEEDS OF ASSET SALES. Paragraph
(b) of Section 4.2 of the Credit Agreement is hereby amended by amending and
restating paragraph (b) in its entirety as follows:
(a) MANDATORY PREPAYMENT---CERTAIN PROCEEDS OF ASSET SALES. If
during any fiscal year of the Borrower, and only if the Borrower's
obligations under the Senior Facility have been fully satisfied and all
lending commitments thereunder terminated, the Borrower and its
Subsidiaries have received cumulative Cash Proceeds during such fiscal
year from one or more Asset Sales of at least $1,000,000, not later
than the third Business Day following the date of receipt of any Cash
Proceeds in excess of such amount, an amount, conforming to the
requirements as to the amount of partial prepayments contained in
section 4.1, at least equal to 100% of the Net Cash Proceeds then
received in excess of such amount from any Asset Sale, shall be applied
as a mandatory prepayment of principal of the outstanding General
Revolving Loans; provided, that if (i) no Default or Event of Default
shall have occurred and be continuing, (ii) the aggregate unpaid
principal sum of the Loans does not exceed the sum of (x) $20,000,000,
plus (y) and counterparts hereof as so executed shall have been
delivered to the Lender;
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the aggregate principal amount of any outstanding Discretionary
Advances, (iii) the Borrower and its Subsidiaries have scheduled
Consolidated Capital Expenditures during the following 12 months, and
(iv) the Borrower notifies the Lender of the amount and nature thereof
and of its intention to reinvest all or a portion of such Net Cash
Proceeds in such Consolidated Capital Expenditures during such 12 month
period, then no such prepayment shall be required to the extent the
Borrower so indicates that such reinvestment will take place. If at the
end of any such 12 month period any portion of such Net Cash Proceeds
has not been so reinvested, the Borrower will immediately make a
prepayment of the outstanding General Revolving Loans as provided above
in an amount, conforming to the requirements as to amount of
prepayments contained in section 4.1, at least equal to such remaining
amount.
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 and each
Security Document 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.
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SECTION 5. CONDITIONS TO EFFECTIVENESS.
This Amendment shall become effective on a date (the "AMENDMENT
EFFECTIVE DATE"), on or before September 10, 2001, 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 and the Lender, and counterparts hereof as so executed
shall have been delivered to the Lender;
(b) 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;
(c) 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;
(d) 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;
(e) 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
(f) 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.
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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.
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 ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior
Financial Officer and Treasurer Vice President
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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 Amendment No. 1 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/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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WESTERVILLE ROAD LP, INC., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
AS A SUBSIDIARY GUARANTOR Chief Financial Officer and Treasurer
SHONAC CORPORATION,
AS A SUBSIDIARY GUARANTOR
DSW SHOE WAREHOUSE, INC.
(F/K/A ▇▇▇▇▇▇▇▇▇ SHOE CO.), VALUE CITY ACQUISITION CORP.,
AS A SUBSIDIARY GUARANTOR AS A SUBSIDIARY GUARANTOR
VALUE CITY DEPARTMENT STORES
SERVICES, INC.
(F/K/A PENN MANAGEMENT, INC.), BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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AS A SUBSIDIARY GUARANTOR ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
▇. ▇. ▇▇▇▇▇▇▇▇ DELIVERY, INC., Secretary
AS A SUBSIDIARY GUARANTOR
GRAMEX RETAIL STORES, INC.,
AS A SUBSIDIARY GUARANTOR
FILENE'S BASEMENT, INC.
(F/K/A BASE ACQUISITION CORP.),
AS A SUBSIDIARY GUARANTOR
BY: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chief Financial Officer and Treasurer
