AMENDMENT NO. 1 TO AMENDED AND RESTATED LOAN AGREEMENT
AND TO GUARANTY
AMENDMENT AGREEMENT, dated as of April 1, 1997, among REX RADIO
AND TELEVISION, INC., an Ohio corporation ("Rex Radio"), KELLY & COHEN
APPLIANCES, INC., an Ohio corporation ("Kelly"), STEREO TOWN, INC., a
Georgia corporation ("Stereo Town"), REX KANSAS, INC., a Kansas corporation
("Rex Kansas" and together with Rex Radio, Kelly and Stereo Town, each a
"Borrower" and collectively, the "Borrowers"), REX STORES CORPORATION, a
Delaware corporation (the "Guarantor"), those financial institutions named
as lenders on the signature pages hereto (the "Lenders") and FLEET BANK,
N.A. (as successor to NatWest Bank N.A.), in its capacity as agent (the
"Agent") for itself and the Lenders. Reference is hereby made to (i)
the Amended and Restated Loan Agreement, dated as of July 31, 1995
(as same may be further amended, supplemented, modified or restated in
accordance with its terms, the "Loan Agreement") , among the Borrowers, the
Lenders and the Agent and (ii) the Guaranty, dated January 31, 1989 and as
amended and restated as of July 31, 1995 (as same may be further amended,
supplemented, modified or restated in accordance with its terms, the
"Guaranty") by the Guarantor in favor of the Agent. Capitalized terms used
herein and not otherwise defined shall have the meanings attributed to them
in the Loan Agreement or the Guaranty, as the context may require.
SECTION I. AMENDMENT TO LOAN AGREEMENT
1. Section 1.01 of the Loan Agreement is amended by adding the
following defined term in the correct alphabetical order:
"Cumulative Net Income Factor " shall mean for any period of time
commencing with the beginning of Parent's fiscal year which ended in
January 1996, (i) that amount which is the sum of fifty percent (50%) of
the Net Income, if any, for Parent's fiscal year ended in January 1996 and
for each fiscal year of Parent thereafter which falls within such period of
time less (ii) that amount which is the sum of one hundred percent (100%)
of the Net Loss (as hereinafter defined), if any, for any fiscal year of
Parent after Parent's fiscal year ended in January 1996 which falls within
such period of time. For purposes of this definition, (i) "Net Loss" shall
mean for any period an amount equal to the net loss of Parent and its
Subsidiaries determined on a Consolidated basis as determined in accordance
with GAAP for such period and (ii) Net Income or Net Loss for any fiscal
year of Parent shall be determined based upon the annual financial
statements required to be furnished to the Agent pursuant to Section 8.01
(b) hereto.'
2. Section 9.05 of the Loan Agreement is amended by deleting clause
(ii) thereof in its entirety and substituting the following therefor:
"(ii) dividend to Parent from and after April 1, 1997 not more than the
Cumulative Net Income Factor from the beginning of Parent's fiscal year
ended in January 1996 through the end of the fiscal year of Parent just ended;
provided, however, that, for purposes of this clause (ii), (x) no such
dividend payment(s) shall be made to Parent in any fiscal year of Parent
earlier than ten (10) days after delivery to the Agent of the annual
financial statements for the fiscal year of Parent just ended required
pursuant to Section 8.01(b) hereof and (y) such dividends shall be used by
Parent within three (3) days of receipt by Parent or its agent thereof
solely to pay dividends to holders of Parent's common stock and/or for Stock
Repurchases and Permitted Acquisitions pursuant to and in accordance with
Section 14 (h) of the Parent Guaranty, any such monies not so used by Parent
to be immediately returned to the applicable Borrower"
SECTION II. AMENDMENT TO GUARANTY
1. Section 14(g) of the Guaranty is hereby amended by (i) deleting the
phrase "except that the Guarantor shall be permitted up to an aggregate during
the term of the Loan Agreement of $20,000,000 for any combination of the
following" and substituting therefor the phrase "except that for the period
from and including April 1, 1997 through and including the remaining term of
the Loan Agreement the Guarantor shall be permitted up to an aggregate of
$20,000,000 for any combination of the following" and (ii) adding clause
"(i) (x)" immediately after the phrase "Section 9.05" in subclause (iii)
of each of clauses (I) and (II).
2. Section 14(h) of the Guaranty is hereby amended by deleting same in
its entirety and substituting the following therefor:
"(h) Notwithstanding anything to the contrary set forth herein, so
long as no Default or Event of Default shall have occurred and be continuing or
would occur after giving effect to the following, the Guarantor shall be
permitted to pay dividends to holders of its common stock and make Stock
Repurchases and Permitted Acquisitions solely with monies received from the
Borrowers in accordance with Section 9.05(ii) of the Loan Agreement, any such
monies not used by Parent for the payment of dividends on its common stock
or for Stock Repurchases or Permitted Acquisitions within three (3) days of
receipt thereof by Parent or its agent to be immediately returned to the
applicable Borrower; provided, that no dividend, Stock Repurchase or
Permitted Acquisition shall be permitted under this Section 14(h) if,
at any time during the twelve month period immediately preceding such
dividend, Stock Repurchase or Permitted Acquisition, as the case maybe, and
after giving effect thereto, Availability shall be less than $25,000,000; and
provided, further, that in addition to the foregoing requirements no Permitted
Acquisition shall be permitted under this Section 14(h) unless the
requirements set forth in clauses (C), (E), (F) and (G) of Section 14(g) above
are satisfied with respect to such Permitted Acquisition. It is further
understood and agreed that it shall constitute an Event of Default if, at any
time during the twelve month period immediately subsequent to any dividend on
Parent's common stock or any Stock Repurchase or Permitted Acquisition,
Availability shall be less than $25,000,000."
SECTION III. CONDITIONS PRECEDENT
This Amendment Agreement shall become effective upon the execution and
delivery of counterparts hereof by the Borrowers, the Guarantor, the Agent and
the Required Lenders and the fulfillment of the following conditions:
1. No unwaived event has occurred and is continuing which constitutes a
Default or an Event of Default.
2. All representations and warranties made by the Borrowers and the
Guarantor in this Amendment Agreement shall be true and correct.
3. All legal matters incidental to the transactions contemplated hereunder
shall be satisfactory to the Agent, and the Agent shall have received such
confirmations, approvals, opinions or other documents or instruments as it
shall request in connection herewith.
4. The Agent shall have received fully executed counterparts to this
Amendment Agreement signed by the Borrowers, the Guarantor and the Required
Lenders.
SECTION IV. MISCELLANEOUS
1. By its signature below, each of the Borrowers reaffirms and
restates the representations and warranties set forth in Article VII of the
Loan Agreement, and all such representations and warranties are true and
correct on the date hereof with the same force and effect as if made on such
date (except to the extent that they relate expressly to an earlier date).
The Guarantor reaffirms and restates the representations and warranties set
forth in Section 14 of the Guaranty, and all such representations and
warranties are true and correct on the date hereof with the same force and
effect as if made on such date (except to the extent that they relate
expressly to an earlier date). In addition, each of the Borrowers and the
Guarantor represents and warrants (which representations and warranties
shall survive the execution and delivery hereof) to the Agent and the
Lenders that:
(a) it has the power and authority to execute, deliver and carry
out the terms and provisions of this Amendment Agreement and the transactions
contemplated hereby, and has taken or caused to be taken all necessary
actions to authorize the execution, delivery and performance of this Amendment
Agreement and the transactions contemplated hereby;
(b) no consent of any other Person (including, without limitation,
shareholders or creditors of the Borrowers or the Guarantor) and no action
of, or filing with any governmental or public body or authority is required to
authorize, or is otherwise required in connection with the execution, delivery
and performance of this Amendment Agreement, or consummation of the
transactions contemplated hereby;
(c) this Amendment Agreement has been duly executed and delivered by
or on behalf of the Borrowers and the Guarantor and constitutes a legal, valid
and binding obligation of each of the Borrowers and the Guarantor enforceable in
accordance with its terms, subject as to enforceability to bankruptcy,
reorganization, insolvency, moratorium and other similar laws affecting the
enforcement of creditors' rights generally and the exercise of judicial
discretion in accordance with general principles of equity;
(d) the execution, delivery and performance of this Amendment
Agreement will not violate any law, statute or regulation, or any order or
decree of any court or governmental instrumentality, or conflict with, or
result in the breach of, or constitute a default under any contractual
obligation of any Borrower or the Guarantor; and
(e) as of the date hereof (after giving effect to the consummation
of the transactions contemplated under this Amendment Agreement) there exists
no Default or Event of Default.
By its signature below, each of the Borrowers and the Guarantor agree that
it shall constitute an Event of Default if any representation or warranty made
above should be false or misleading in any material respect.
2. Each of the Loan Agreement and the Guaranty is hereby ratified and
confirmed in all respects and, except as expressly amended hereby, all of the
representations, warranties, terms, covenants and conditions of the Loan
Agreement and the Guaranty shall remain unamended, unwaived and in effect in
accordance with their respective terms. The amendments set forth herein
shall be limited precisely as provided for herein and shall not be deemed
to be amendments or consents to, or waivers of modifications of, any term
or provision of the Loan Documents or any other document or instrument
referred to herein or therein or of any transaction or further or future
action on the part of any Borrower or the Guarantor requiring the consent
of the Agent or any Lender, except to the extent specifically provided for
herein.
3. Each Borrower and the Guarantor confirms in favor of the Agent and
each Lender that it agrees that it has no defense, offset, claim, counterclaim
or recoupment with respect to any of its obligations or liabilities under the
Loan Agreement, the Guaranty, the Parent Security Agreement, the Parent Pledge
or any other Loan Document and that, except as herein provided, all terms of
the Loan Agreement, the Guaranty, the Parent Security Agreement, the Parent
Pledge and the other Loan Documents shall continue in full force and effect.
4. This Amendment Agreement may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one and the same
agreement.
5. THIS AMENDMENT AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID STATE
(WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES
THEREOF).
"Borrowers"
REX RADIO AND TELEVISION, INC.
By: ____________________________
Name: Edward M. Kress
Title: Secretary
KELLY & COHEN APPLIANCES, INC.
By: ____________________________
Name: Edward M. Kress
Title: Secretary
STEREO TOWN, INC.
By: ____________________________
Name: Edward M. Kress
Title: Secretary
REX KANSAS, INC.
By: ____________________________
Name: Edward M. Kress
Title: Secretary
"Guarantor"
REX STORES CORPORATION
By: ____________________________
Name: Edward M. Kress
Title: Secretary
"Lenders"
FLEET BANK, N.A.,
Individually
By:______________________________
Name: Thomas Maiale
Title: Vice President
BANK ONE, DAYTON, N.A.
By:______________________________
Name: John B. Middelberg
Title: Vice President
HELLER FINANCIAL, INC.
By:______________________________
Name: Tara Hopkins
Title: Assistant Vice President
NATIONAL CITY BANK, DAYTON
By:______________________________
Name: Neal J. Hinker
Title: Vice President
THE PROVIDENT BANK
By:______________________________
Name: Jerome J. Brunswick
Title: Regional Vice President
THE FIFTH THIRD BANK
By:______________________________
Name: D. Ward Allen
Title: Vice President
STAR BANK, N.A.
By:______________________________
Name: Thomas D. Gibbons
Title: Vice President
"Agent"
FLEET BANK, N.A.,
As Agent
By:______________________________
Name: Thomas Maiale
Title: Vice President