1
[Execution Copy: 3/3/95]
EXHIBIT 4.1
EIGHTH AMENDMENT TO CREDIT AGREEMENT
THIS EIGHTH AMENDMENT (the "Eighth Amendment"), dated as of March 3, 1995,
is entered into by and among BROADWAY STORES, INC., a Delaware corporation
previously known as Carter Hawley Hale Stores, Inc. (the "Borrower"), the
financial institutions parties thereto (the "Lenders") and GENERAL ELECTRIC
CAPITAL CORPORATION, a New York corporation, as agent (the "Agent") for the
Lenders.
R E C I T A L S
WHEREAS, the parties hereto have entered into that certain Credit Agreement
dated as of October 8, 1992 and amended by the letter agreement dated April 29,
1993, the Amended and Restated Second Amendment dated as of August 20, 1993,
the Third Amendment dated as of September 30, 1993, the Fourth Amendment dated
as of October 31, 1993, the Fifth Amendment dated as of December 10, 1993, the
Sixth Amendment dated as of February 26, 1994 and the Seventh Amendment dated
as of September 13, 1994 ("Seventh Amendment") (as so amended, the "Credit
Agreement"), and now desire to amend the Credit Agreement in certain respects;
NOW, THEREFORE, in consideration of the agreements herein contained, the
parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein with the same meanings ascribed to them
therein.
2. Amendments to the Credit Agreement: Upon the Effective Date (as defined
herein), Section 7.1 of the Credit Agreement is hereby amended in its entirety
to read as set forth below:
7.1 Financial Covenants.
(a) Consolidated EBITDA. The Borrower will not permit aggregated
Consolidated EBITDA for the Fiscal Months which are substantially coextensive
with any period set forth below to be less than the amount set forth below
opposite such period (except that any amount set forth below in parentheses
shall be the maximum amount of permitted Consolidated EBITDA deficit for the
period of Fiscal Months set forth opposite such amount):
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[Execution Copy: 3/3/95]
Period Amount
------ ------
February 1994 ($ 20,100,000)
February 1994 - March 1994 $ 16,300,000
February 1994 - April 1994 ($ 13,300,000)
February 1994 - May 1994 ($ 6,300,000)
February 1994 - June 1994 $ 3,200,000
February 1994 - July 1994 $ 3,500,000
February 1994 - August 1994 $ 5,300,000
February 1994 - September 1994 $ 9,600,000
February 1994 - October 1994 $ 12,800,000
February 1994 - November 1994 $ 22,000,000
February 1994 - December 1994 $ 78,100,000
February 1994 - January 1995 $ 73,200,000
March 1994 - February 1995 $ 65,700,000
April 1994 - March 1995 $ 65,400,000
May 1994 - April 1995 $ 66,700,000
June 1994 - May 1995 $ 68,600,000
July 1994 - June 1995 $ 70,200,000
August 1994 - July 1995 $ 70,500,000
September 1994 - August 1995 $ 73,600,000
October 1994 - September 1995 $ 75,800,000
November 1994 - October 1995 $ 79,100,000
December 1994 - November 1995 $ 85,000,000
January 1995 - December 1995 $106,500,000
February 1995 - January 1996 $110,000,000
March 1995 - February 1996 $114,800,000
April 1995 - March 1996 $118,800,000
May 1995 - April 1996 $124,100,000
June 1995 - May 1996 $131,900,000
July 1995 - June 1996 $136,900,000
August 1995 - July 1996 $136,900,000
September 1995 - August 1996 $136,900,000
October 1995 - September 1996 $136,900,000
(b) Consolidated Net Cash Flow. The Borrower will not permit
Consolidated Net Cash Flow for the Fiscal Months which are substantially
coextensive with any period set forth below to be less that the amount set
forth below opposite such period (except that any amount set forth below in
parentheses shall be the maximum amount of permitted Consolidated Net Cash
Flow deficit for the period of Fiscal Months set forth opposite such amount):
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[Execution Copy: 3/3/95]
Period Amount
------ ------
February 1994 ($27,800,000)
February 1994 - March 1994 ($32,100,000)
February 1994 - April 1994 ($36,100,000)
February 1994 - May 1994 ($35,700,000)
February 1994 - June 1994 ($33,600,000)
February 1994 - July 1994 ($40,200,000)
February 1994 - August 1994 ($44,800,000)
February 1994 - September 1994 ($47,900,000)
February 1994 - October 1994 ($51,100,000)
February 1994 - November 1994 ($48,200,000)
February 1994 - December 1994 $ 800,000
February 1994 - January 1995 ($10,400,000)
February 1995 ($36,800,000)
February 1995 - March 1995 ($41,400,000)
February 1995 - April 1995 ($45,800,000)
February 1995 - May 1995 ($49,700,000)
February 1995 - June 1995 ($47,900,000)
February 1995 - July 1995 ($52,900,000)
February 1995 - August 1995 ($55,600,000)
February 1995 - September 1995 ($56,500,000)
February 1995 - October 1995 ($58,700,000)
February 1995 - November 1995 ($53,500,000)
February 1995 - December 1995 $ 4,800,000
February 1995 - January 1996 ($11,800,000)
February 1995 - February 1996 ($22,200,000)
February 1995 - March 1996 ($22,600,000)
February 1995 - April 1996 ($21,500,000)
February 1995 - May 1996 ($17,500,000)
February 1995 - June 1996 ($10,500,000)
February 1995 - July 1996 ($15,700,000)
February 1995 - August 1996 ($19,000,000)
February 1995 - September 1996 ($22,600,000)
(c) Consolidated Net Inventory Ratio. The Borrower will not permit the
Consolidated Net Inventory Ratio on the last day of any two consecutive
Fiscal Months set forth below to exceed the percentages set forth below
opposite such Fiscal Months:
Fiscal Month Percentage
------------ ----------
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[Execution Copy: 3/3/95]
June 1993 90.0%
July 1993 87.0%
August 1993 81.7%
September 1993 82.0%
October 1993 75.2%
November 1993 73.9%
December 1993 81.4%
January 1994 86.6%
February 1994 82.8%
March 1994 87.1%
April 1994 87.2%
May 1994 82.3%
June 1994 89.8%
July 1994 87.1%
August 1994 81.9%
September 1994 81.9%
October 1994 77.1%
November 1994 73.3%
December 1994 81.7%
January 1995 85.8%
February 1995 83.1%
March 1995 87.1%
April 1995 87.0%
May 1995 82.7%
June 1995 89.8%
July 1995 86.5%
August 1995 78.9%
September 1995 80.1%
October 1995 76.9%
November 1995 73.3%
December 1995 81.7%
January 1996 85.8%
February 1996 83.1%
March 1996 87.1%
April 1996 87.0%
May 1996 82.7%
June 1996 89.8%
July 1995 86.5%
August 1996 78.9%
September 1996 80.1%
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[Execution Copy: 3/3/95]
(d) Consolidated Maximum/Minimum Inventory Balance. The Borrower
will not permit the aggregate amount of all inventory of the Borrower and its
Subsidiaries (determined on the lower of a first-in, first-out or market
basis) on the last day of any two consecutive Fiscal Months set forth below
to exceed the maximum amount, or to be less than the minimum amount, set
forth below opposite such Fiscal Months:
Fiscal Month Maximum Amount Minimum Amount
------------ -------------- --------------
February 1994 $436,900,000 $386,900,000
March 1994 $417,400,000 $367,400,000
April 1994 $415,000,000 $365,000,000
May 1994 $433,300,000 $383,300,000
June 1994 $400,800,000 $350,800,000
July 1994 $404,000,000 $354,000,000
August 1994 $483,100,000 $433,100,000
September 1994 $500,000,000 $450,000,000
October 1994 $554,100,000 $504,100,000
November 1994 $609,600,000 $559,600,000
December 1994 $468,500,000 $418,500,000
January 1995 $464,500,000 $414,500,000
February 1995 $468,900,000 $418,900,000
March 1995 $459,700,000 $409,700,000
April 1995 $454,700,000 $404,700,000
May 1995 $465,700,000 $415,700,000
June 1995 $432,100,000 $382,100,000
July 1995 $436,100,000 $386,100,000
August 1995 $476,600,000 $426,600,000
September 1995 $493,700,000 $443,700,000
October 1995 $538,400,000 $488,400,000
November 1995 $588,900,000 $538,900,000
December 1995 $438,200,000 $388,200,000
January 1996 $441,600,000 $391,600,000
February 1996 $468,900,000 $418,900,000
March 1996 $459,700,000 $409,700,000
April 1996 $454,700,000 $404,700,000
May 1996 $465,700,000 $415,700,000
June 1996 $432,100,000 $382,100,000
July 1996 $436,100,000 $386,100,000
August 1996 $476,600,000 $426,600,000
September 1996 $493,700,000 $443,700,000
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[Execution Copy: 3/3/95]
(e) Consolidated Capital Expenditures. The Borrower will not permit
the aggregate amount of all Capital Expenditures of the Borrower and its
Subsidiaries to exceed, during any period set forth below, the amount set
forth below opposite such period:
Period (Fiscal Months) Amount
---------------------- ------
From Through (and including)
---- -----------------------
February 1994 January 1995 $110,000,000
February 1995 January 1996 $ 40,000,000
February 1996 September 1996 $ 22,000,000
provided, however, that the aggregate amount of Capital Expenditures
otherwise permitted pursuant to this Section 7.1(e) during the period from
the February 1996 through and including the September 1996 Fiscal Months
shall be increased by an amount equal to the lesser of $20,000,000 or the
unused portion of the allowance for Capital Expenditures for the period from
February 1995 through January 1996. Notwithstanding anything to the contrary
set forth in this Section 7.1(e), in no event shall the aggregate amount of
Capital Expenditures of the Borrower and its Subsidiaries exceed $25,000,000
during any Fiscal Month.
3. Effective Date. This Eighth Amendment shall become effective upon the
date (the "Effective Date") on or before March 30, 1995 on which all of the
following conditions have been simultaneously satisfied:
(a) The Agent has received each of the following:
(i) counterparts hereof signed by the Borrower, the Lenders and the
Agent;
(ii) an amended and restated Note duly executed by the Borrower in the
form attached hereto as Exhibit A;
(iii) in addition to all other amounts due under or in connection with
the Credit Agreement, payment in the amount of $281,250 in same day funds
for the account of the Lenders in accordance with their respective
Percentages;
(iv) one or more certificates, dated the Effective Date and in form and
substance satisfactory to the Agent, of the Secretary or any Assistant
Secretary of the Borrower certifying (A) as to resolutions of the Board of
Directors of the Borrower authorizing this Eighth Amendment
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[Execution Copy: 3/3/95]
and the Seventh Amendment and the transactions contemplated hereby and
thereby, (B) that the resolutions described in clause (A) have not been
amended and remain in full force and effect, (C) as to the incumbency and
signatures of each officer of the Borrower executing this Eighth Amendment
or any of the Loan Documents delivered in connection therewith, (D) as to
the matters set forth in Sections 3(b) and 3(c) of this Eighth Amendment,
(E) that the copy of Amendment No. 2 to the Receivables-Backed Credit
Agreement dated as of September 13, 1994 among the Receivables Borrower, the
Receivables Lender and GE Capital, as attached to the Officer's Certificate
of the Borrower furnished pursuant to Section 3(a)(iii) of the Seventh
Amendment, is true and complete and (F) as to such other matters as shall be
reasonably requested by Agent; and
(v) opinions, dated the Effective Date and addressed to the Agent and
each Lender, of Marc Bercoon, general counsel of the Borrower, and of
Milbank, Tweed, Hadley & McCloy, counsel to the Borrower, each in form and
substance satisfactory to the Agent.
(b) After giving effect to this Eighth Amendment, no Default or Event of
Default shall have occurred or be continuing.
(c) The representations and warranties contained in Article 4 of the
Credit Agreement (other than representations and warranties which expressly
speak as of a different date) are true, correct and complete in all material
respects, except that such representations and warranties need not be true,
correct and complete to the extent that changes in the facts and conditions
on which such representations and warranties are based are required or
permitted under the Credit Agreement.
4. Representations and Warranties. The Borrower hereby represents and
warrants that, as of the date hereof and as of the Effective Date, after giving
effect to this Eighth Amendment:
(a) The execution, delivery and performance by the Borrower of this
Eighth Amendment have been duly authorized by all necessary corporate action;
(b) No Default or Event of Default has occurred or is continuing; and
(c) The representations and warranties of the Borrower contained in
Article 4 of the Credit Agreement and any other Loan Document
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[Execution Copy: 3/3/95]
(other than representations and warranties which expressly speak as of a
different date) are true, correct and complete in all material respects,
except that such representations and warranties need not be true, correct
and complete to the extent that changes in the facts and conditions on which
such representations and warranties are based are required or permitted
under the Credit Agreement.
5. Limitation on Amendment. This Eighth Amendment shall be limited solely
to the matters expressly set forth herein and shall not (a) constitute a waiver
or amendment of any other term or condition of the Credit Agreement, or of any
instruments or agreements referred to therein, (b) prejudice any right or
rights which the Agent or any of the Lenders may now have or may have in the
future under or in connection with the Credit Agreement or any instruments or
agreements referred to therein, or (c) require the Lenders to agree to a
similar waiver or amendment or grant a similar waiver or amendment for a
similar transaction or on a future occasion. Except to the extent specifically
waived herein, the provisions of the Credit Agreement shall not be amended,
modified, impaired or otherwise affected hereby, and the Credit Agreement and
all of the Obligations are hereby confirmed in full force and effect.
6. Miscellaneous. This Eighth Amendment is a Loan Document and, together
with the Credit Agreement and the other Loan Documents, comprises the complete
and integrated agreement of the parties on the subject matter hereof. The
headings herein are for convenience of reference only and shall not alter or
otherwise affect the meaning hereof.
7. Governing Law. This Eighth Amendment shall be governed by, and shall be
construed and enforced in accordance with, the laws of the State of New York.
8. Counterparts. This Eighth Amendment may be executed in any number of
counterparts which, when taken together, shall be deemed to constitute one and
the same instrument.
WITNESS the due execution hereof as of the date first above written.
BROADWAY STORES, INC., as the Borrower
By: /s/ Ralph DeMarco
--------------------------------
Title: Vice President, Treasurer
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[Execution Copy: 3/3/95]
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and as the Lender
By: /s/ Steven C. Bierman
-----------------------------------
Title: Duly Authorized Signatory
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EXHIBIT A TO EIGHTH AMENDMENT
FORM OF AMENDED AND RESTATED REVOLVING CREDIT NOTE
$225,000,000 Los Angeles, California
September 13, 1994
FOR VALUE RECEIVED, the undersigned, BROADWAY STORES, INC., a Delaware
corporation (previously known as Carter Hawley Hale Stores, Inc.) having an
office at 3880 N. Mission Road, Los Angeles, California 90031 (the "Borrower"),
hereby promises to pay to the order of GENERAL ELECTRIC CAPITAL CORPORATION
(the "Lender"), or its registered assigns, in lawful money of the United States
of America and in immediately available funds, the principal amount of TWO
HUNDRED TWENTY-FIVE MILLION DOLLARS ($225,000,000), or, if less, the aggregate
unpaid principal amount of all Advances made by the Lender pursuant to that
certain Credit Agreement, dated as of October 8, 1992 (together with all
amendments and other modifications, if any, from time to time thereafter made
thereto, the "Credit Agreement"), among the Borrower, certain commercial
lending institutions (including the Lender) as are, or may from time to time
become, parties thereto, and General Electric Capital Corporation, as Agent,
together with interest on the unpaid principal amount of this Note outstanding
from time to time from the date of the first advance made or deemed to have
been made hereunder, as hereinafter provided.
This Note is issued pursuant to the Credit Agreement, is one of the Notes
referred to therein, and is entitled to the benefit and security of the Loan
Documents provided for therein, to which reference is hereby made for a
statement of all of the terms and conditions under which the Advances evidenced
hereby are made. All capitalized terms, unless otherwise defined herein, shall
have the meanings ascribed to them in the Credit Agreement.
The principal amount of the indebtedness from time to time evidenced hereby
shall be payable in the manner specified in the Credit Agreement and, if not
sooner paid in full, on October 8, 1996.
The outstanding principal amount of indebtedness evidenced hereby shall bear
interest, payable monthly in arrears on the tenth day of each month for the
immediately preceding calendar month, the first such payment date being
November 10, 1992, as set forth in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of
the United States of America in immediately available funds to the account
designated by the Agent pursuant to the Credit Agreement.
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If any payment or prepayment on this Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
Upon and after the occurrence of an Event of Default, this Note may, as
provided in the Credit Agreement, and without demand, notice or legal process
of any kind, be declared, and upon such declaration immediately shall become,
due and payable.
Demand, presentment, protest and notice of nonpayment and protest are hereby
waived by the Borrower.
This Note is given in renewal of and rearrangement and substitution, but not
in payment, for the "Note" referred to in the Credit Agreement (the "Prior
Note"), it being acknowledged and agreed that the indebtedness evidenced by the
Prior Note constitutes the same indebtedness evidenced by this Note and that
this Note in no way is intended to constitute a novation of such Prior Note or
the outstanding principal amount thereof.
This Note has been delivered and accepted at Los Angeles, California, and
shall be governed by, and interpreted and construed in accordance with, the
laws of the State of New York.
BROADWAY STORES, INC.
By______________________________
Title:
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