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EXHIBIT 4.2
AMENDMENT NO. 2 TO RECEIVABLES-BACKED CREDIT AGREEMENT
Amendment No. 2 to Receivables-Backed Credit Agreement (this
"Amendment"), dated as of September 13, 1994, among BROADWAY RECEIVABLES, INC.
(formerly, CHH Receivables, Inc.) (the "Borrower"), BLUE HAWK FUNDING
CORPORATION (the "Lender") and GENERAL ELECTRIC CAPITAL CORPORATION, as Agent
(in such capacity, the "Agent"). All capitalized terms used herein not
otherwise defined shall have the respective meanings assigned to such terms in
the Credit Agreement hereinafter described.
W I T N E S S E T H :
WHEREAS, the parties hereto have entered into a
Receivables-Backed Credit Agreement, dated as of October 8, 1992, as amended by
an Amendment No. 1 to Receivables-Backed Credit Agreement, dated as of
September 28, 1993 (as amended, the "Credit Agreement"); and
WHEREAS, the parties hereto wish to amend the Credit Agreement
as hereinafter provided;
NOW, THEREFORE, in consideration of the premises and of the
commitments made hereunder by the Borrower, the Lender and the Agent, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. The definition of the term "Borrowing Base" set forth in
Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
""Borrowing Base" means, as of any day, the lowest of (a) the
Sub-Borrowing Base on such day, (b) an amount equal to (i) the product
of (x) the Outstanding Balance of Eligible Receivables on such
day multiplied by (y) the Maximum Permitted Debt Ratio on such day
minus (ii) the principal amount of the Non-Affiliate Subordinated
Notes outstanding on such day, (c) an amount equal to (i) the product
of (x) the Outstanding Balance of Eligible Receivables on such
day multiplied by (y) the Maximum Class A Debt Ratio on such day minus
(ii) the principal amount of the Class A Notes outstanding on such day
or (d) an amount
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equal to the product of (x) the Outstanding Balance of Eligible
Receivables on such day multiplied by (y) 82%.".
2. The definition of the term "Carter Hawley" set forth in
Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
""Carter Hawley" or "Broadway" means Broadway Stores, Inc.
(formerly Carter Hawley Hale Stores, Inc.), a Delaware corporation,
together with its successors and assigns.".
3. The definition of "Commitment Termination Date" set forth in
Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety to read as follows:
""Commitment Termination Date" means the earlier of (i)
October 8, 1996, as such date may be extended in accordance with
Section 2.15 and (ii) the date of the termination of the Commitment
pursuant to Section 2.03 or Section 6.01.".
4. The definition of the term "Effective Advance Rate" set forth
in Section 1.01 of the Credit Agreement is hereby amended and restated in its
entirety as follows:
""Effective Advance Rate" means, at any time, the ratio
(expressed as a percentage) determined by dividing (x) the sum of (i)
the Sub-Borrowing Base plus (ii) $25,348,570 by (y) the aggregate
Outstanding Balance of the Purchased Receivables.".
5. The definition of the term "Purchased Receivable" in Section
1.01 of the Credit Agreement is hereby amended and restated in its entirety to
read as follows:
""Purchased Receivable" means, at any date of determination,
any Receivable purchased by the Borrower from Broadway pursuant to the
terms of the Purchase Agreement and which has not been repurchased by
Broadway in accordance with the terms of the Purchase Agreement.".
6. The definition of "Security Agreement" in Section 1.01 of the
Credit Agreement is hereby amended by inserting the following language after
the words "Collateral Agent" and before the "." at the end thereof: ", as such
agreement may be amended from time to time".
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7. Section 1.01 of the Credit Agreement is hereby amended by
inserting the following new definitions in the appropriate alphabetical order:
"Borrower Interest Rate Cap" means, collectively, those
certain Interest Rate Cap Agreements between the Borrower and each of
Citicorp, N.A., Nationsbank, N.A. and Bank of America National Trust
and Savings Association, each substantially in the form of Exhibit D
to the Security Agreement.
"Calculation Period" means, with respect to any Settlement
Period, the period from and including the tenth day following the end
of such Settlement Period to, but excluding, the tenth day following
the end of the next succeeding Settlement Period.
"Class A Note Rate" means 7.55%.
"Class A Notes" means the 7.55% Subordinated Credit Card
Notes, Class A, Due 1999, in the initial aggregate principal amount of
$38,000,000, issued by the Borrower pursuant to the terms of the
Sub-Debt Indenture.
"Class B Note Rate" means 11%.
"Class B Notes" means the 11% Subordinated Credit Card Notes,
Class B, Due 1999, in the initial aggregate principal amount of
$26,000,000, issued by the Borrower pursuant to the terms of the
Sub-Debt Indenture.
""Interest Expense" means, for any Settlement Period, the
percentage equivalent of a fraction (x) the numerator of which is
equal to the sum of (1) the Class A Note Rate multiplied by the
average daily outstanding principal amount of the Class A Notes during
such Settlement Period, plus (2) the Class B Note Rate multiplied by
the average daily outstanding principal amount of the Class B Notes
during such Settlement Period, plus (3) Interest for such Settlement
Period multiplied by the quotient obtained by dividing 360 by the
number of days in such Settlement Period, and (y) the denominator of
which is equal to the sum of (1) the average daily outstanding
principal amount of the Class A Notes during such Settlement Period,
plus (2) the average daily outstanding principal amount of the Class B
Notes during such Settlement Period, plus (3) the average
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daily outstanding principal amount of the Advances during such
Settlement Period.
"Maximum Class A Debt Ratio" means, as of any day, an amount
equal to (i) either (a) on any day from and including December 1 to,
but excluding, February 1, 86%, or (b) on any day from and including
February 1 to, but excluding, December 1, 87%, minus (ii) the sum of
the Yield Discount Factor for such day and the Payment Rate Factor for
such day.
"Maximum Permitted Debt Ratio" means, as of any day, an amount
equal to (i) either (a) on any day from and including December 1 to,
but excluding, February 1, 90%, or (b) on any day from and including
February 1 to, but excluding, December 1, 91%, minus (ii) the sum of
the Yield Discount Factor for such day and the Payment Rate Factor for
such day.
"Net Portfolio Yield" means, for any Settlement Period, twelve
times the percentage equivalent of a fraction (x) the numerator of
which is equal to (i) the Normalized Finance Charges for such
Settlement Period minus (ii) the Normalized Net Write-Offs for such
Settlement Period and (y) the denominator of which is equal to the
Outstanding Balance of the Purchased Receivables on the first day of
such Settlement Period.
"Non-Affiliate Subordinated Notes" means, collectively, the
Class A Notes and the Class B Notes.
"Normalized Collections" means, with respect to any Settlement
Period, the amount obtained by dividing (x) the aggregate Collections
received in such Settlement Period by (y) the number of Billing Cycles
in such Settlement Period, and multiplying the quotient by 36.
"Normalized Finance Charges" means, with respect to any
Settlement Period, the amount obtained by dividing (x) the aggregate
Collections received in such Settlement Period that are allocable to
finance charges by (y) the number of Billing Cycles that occurred in
such Settlement Period, and multiplying the quotient by 36.
"Normalized Net Write-Offs" means, with respect to any
Settlement Period, the amount obtained by dividing (x) an amount equal
to (i) the aggregate
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amount of Purchased Receivables written-off as uncollectible during
such Settlement Period minus (ii) the aggregate Recoveries received in
such Settlement Period by (y) the number of Billing Cycles that
occurred in such Settlement Period, and multiplying the quotient by
36.
"Payment Rate" shall mean, for any Settlement Period, a
fraction the numerator of which is equal to the Normalized Collections
for such Settlement Period and the denominator of which is the
aggregate Outstanding Balance of the Receivables on the first day of
such Settlement Period.
"Payment Rate Factor" means, with respect to each day during
any Calculation Period, an amount equal to (i) if the average Payment
Rate for the three Settlement Periods ending with the related
Settlement Period equals or exceeds 13%, 0% and (ii) if the average
Payment Rate for the three Settlement Periods ending with the related
Settlement Period is less than 13%, 1.0%.
"Settlement Period" has the meaning set forth in the Purchase
Agreement.
"Sub-Borrowing Base" means, as of any day, an amount equal to
(i) the product of (x) the Borrowing Availability for such day
multiplied by (y) the Advance Rate in effect as of such day minus (ii)
$25,348,570.
"Sub-Debt Indenture" means the Indenture dated as of September
1, 1994 between the Borrower and Bankers Trust Company, as Trustee,
the form of which shall have been approved by the Agent, as such
Indenture may be amended from time to time.
"Trustee" mean Bankers Trust Company, as trustee under the
Sub-Debt Indenture, and its successors and assigns.
"Yield Discount Factor" means, with respect to each day during
any Calculation Period, the amount, if any, by which (x) an amount
equal to (i) the Interest Expense for the related Settlement
Period plus (ii) 2% minus (iii) twelve times the percentage equivalent
of a fraction the numerator of which is equal to the aggregate amount
of any payments received under the Interest Rate Cap during such
related Settlement
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Period and the denominator of which is equal to the average
outstanding principal amount of the Issuer's obligations under the
Class A Notes, the Class B Notes and the Note for such related
Settlement Period exceeds (y) the Net Portfolio Yield for such related
Settlement Period.".
8. Section 2.04 of the Credit Agreement is hereby amended by (i)
deleting clause (b) thereof and substituting in place thereof the following
clauses (b) and (c) and (ii) redesignating clause (c) thereof as clause (d):
"(b) Mandatory. On any date, the Borrower shall forthwith
prepay to the Agent, for the account of the Lender, the outstanding
Principal of Advances, if any, as may be necessary so that after such
prepayment the aggregate outstanding Principal of Advances does not
exceed the Sub-Borrowing Base on such date, together with in the case
of a prepayment in full of all outstanding Advances, Interest accrued
to the date of such prepayment and all accrued and unpaid fees, costs
and expenses at the time due and payable by the Borrower under the
Facility Documents.
(c) Mandatory - Non-Affiliate Subordinated Notes. On any
date on which the Sub-Borrowing Base exceeds the Borrowing Base, the
Borrower shall forthwith prepay to the Agent, for the account of the
Lender, the outstanding Principal of Advances, if any, as may be
necessary so that after such prepayment and any prepayment made
pursuant to clause (b) above on such date the aggregate outstanding
Principal of Advances does not exceed the Borrowing Base on such date,
together with in the case of a prepayment in full of all outstanding
Advances, Interest accrued to the date of such prepayment and all
accrued and unpaid fees, costs and expenses at the time due and
payable by the Borrower under the Facility Documents."
9. Section 2.07(b) of the Credit Agreement is hereby amended by
deleting the figure "1.10%" in line 3 thereof and inserting in lieu thereof the
figure "1.08%".
10. Section 2.13 of the Credit Agreement is hereby amended by
inserting the following language after the words "Cash Collateral Account" and
before the "." at the end thereof:
"and (iv) to pay interest in respect of the Non-Affiliate Subordinated
Notes".
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11. Section 2.15 of the Credit Agreement is hereby amended by
deleting the clause "to which the Liquidity Termination Date has been extended"
in lines 10 and 11 thereof and inserting in lieu thereof the following
language:
"which is the 16th day prior to the date to which the Liquidity
Termination Date has been extended".
12. Section 5.01(h) of the Credit Agreement is hereby amended by
deleting the word "and" in the last line of sub-clause (xiii) thereof, by
inserting the following new sub-clause immediately after sub-clause (xiii)
thereof:
"(xiv) promptly and in any event within one Business Day
after the Borrower becomes aware of the existence thereof, telephonic,
telex or telecopied notice (confirmed in writing within 5 days)
identifying, and specifying the nature of, any Early Amortization
Event, any "Event of Default" (as defined in the Sub-Debt Indenture),
any "Default" (as defined in the Sub-Debt Indenture) or any
development or other information which could materially and adversely
affect the ability of the Borrower to perform its obligations under
the Sub-Debt Indenture; and".
and by deleting the numeral "(xiv)" in the first line of sub-clause (xiv)
thereof and inserting in lieu thereof the numeral "(xv)".
13. Section 5.02(b) of the Credit Agreement is hereby amended and
restated in its entirety as follows:
"(b) Debt. Create or suffer to exist any Debt except the
Obligations of the Borrower pursuant to the Facility Documents, the
Subordinated Promissory Notes and the Non-Affiliate Subordinated
Notes.".
14. Section 5.02(c) of the Credit Agreement is hereby amended by
deleting clause (A) set forth therein and substituting in place thereof the
following:
"(A) the Equity of the Borrower is not less than an amount
equal to (i) the aggregate Outstanding Balance of the Eligible
Receivables minus (ii) the sum of the outstanding Principal of the
Advances, the outstanding principal amount of the Non-Affiliate
Subordinated Notes and the amount of any loss reserve existing on the
balance sheet of the Borrower with respect to the Purchased
Receivables, and"
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15. Section 5.03(c) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"(c) Capitalization. The Borrower shall not at any time
permit the sum of (i) the Non-Affiliate Subordinated Notes and (ii)
its Equity, to be less than $88,500,000."
16. Section 6.01(n) of the Credit Agreement is hereby amended by
inserting the following language after the phrase "Purchase Agreement);" in
line 5 thereof:
"or
(o) Any "Event of Default" under (and as defined in)
the Sub-Debt Indenture shall have occurred; or
(p) Any Early Amortization Event (as defined in the
Security Agreement) shall have occurred; or
(q) Any of the Non-Affiliated Subordinated Notes
shall for any reason cease to be valid and binding on or
enforceable against the Borrower, or the Borrower shall so
state in writing;".
17. Section 6.02 of the Credit Agreement is hereby amended by
inserting the following language after the word "Agent" in line 4 thereof:
", the Trustee under the Sub-Debt Indenture".
18. Section 9.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"Section 9.10. No Proceedings. The Borrower hereby covenants
and agrees that, prior to the date which is one year and one day after
the payment in full of all outstanding Commercial Paper and
Non-Affiliate Subordinated Notes, it will not institute against, or
join any other Person in instituting against, the Lender any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other similar proceeding under the laws of the United
States or any state of the United States.
19. The Credit Agreement is hereby amended by deleting the form of
Borrowing Base Certificate set forth
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as Exhibit E to the Credit Agreement and inserting in place thereof Exhibit E
attached to this Amendment.
20. The Credit Agreement is hereby amended by deleting the form of
Lender Report set forth as Exhibit G to the Credit Agreement and inserting in
place thereof Exhibit G attached to this Amendment.
21. In order to induce the Lender to enter into this Amendment,
the Borrower hereby represents and warrants as of the date hereof that no
Default or Event or Default has occurred and is continuing.
22. This Amendment is limited as specified and shall not
constitute a modification or waiver of any other provision of the Credit
Agreement. Any references to the Credit Agreement in any of the Facility
Documents or in any of the documents executed or delivered in connection
therewith or in contemplation thereof shall be deemed after the date hereof to
be references to the Credit Agreement as amended by this Amendment.
23. The Borrower shall deliver to the Agent such resolutions
approving and authorizing this Amendment and such opinions of counsel and
corporate certificates as the Agent may reasonably request, which resolutions,
opinions and certificates shall be in form and substance satisfactory to the
Agent.
24. This Amendment shall be effective on the latest of (i) the
date on which each of the parties hereto shall have executed and delivered a
copy or counterpart of this Amendment to each other party hereto, (ii) the date
upon which each Rating Agency shall have confirmed that the execution of this
Amendment and the issuance of the Non-Affiliate Subordinated Notes by the
Borrower shall not result in a withdrawal or downgrading of such Rating
Agency's current credit rating of the Commercial Paper, (iii) the date on which
the Borrower issues and sells the Non-Affiliate Subordinated Notes, in a form
which has been approved by the Agent and with credit ratings of not less than,
with respect to the Class A Notes, "BBB" from S&P and "BBB" from Fitch and,
with respect to the Class B Notes, "BB" from S&P and "BB" from Fitch, and (iv)
the effective date of an amendment to the Retailer Credit Agreement, in a form
which has been approved by the Agent, that extends the commitment termination
date thereunder to October 8, 1996".
25. This Amendment may be executed in any number of counterparts
and by the different parties hereto on
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separate counterparts each of which when so executed and delivered shall be an
original, but all of which together shall constitute one and the same
instrument.
26. This Amendment and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by the laws of the
State of New York.
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IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
BROADWAY RECEIVABLES, INC.
By:___________________________
Name:
Title:
BLUE HAWK FUNDING CORPORATION
By:___________________________
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent
By:___________________________
Name:
Title:
Consented to:
GENERAL ELECTRIC CAPITAL
CORPORATION, as LOC Agent and Collateral Agent
By:_______________________________
Name:
Title:
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