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Exhibit 10(gg)
AMENDMENT NO. 3 AND CONSENT
TO
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT NO. 3 AND CONSENT, dated as of December 29, 1999 (this
"AMENDMENT AND CONSENT"), to the AMENDED AND RESTATED CREDIT AGREEMENT, dated as
of July 27, 1998, as heretofore amended (the "CREDIT AGREEMENT"), among THE
ELDER-BEERMAN STORES CORP. (the "BORROWER"), the financial institutions listed
on the signature pages thereto as lenders (the "LENDERS"), CITIBANK, N.A. as
issuing bank (the "ISSUER"), and CITICORP USA, INC., as swing bank (in that
capacity, the "SWING BANK") and as agent for the Lenders, the Issuer and the
Swing Bank (in that capacity, the "AGENT").
W I T N E S S E T H:
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WHEREAS, pursuant to Amendment No. 2 and Consent, dated as of November
23, 1999, to the Credit Agreement (the "SECOND AMENDMENT"), the Borrower has
requested and the Lenders agreed to amend the Credit Agreement and waive
compliance with Sections 7.4 and 7.5 thereof in connection with a proposed
reorganization of the Borrower and its Subsidiaries (the "PROPOSED
REORGANIZATION"); and
WHEREAS, the Borrower has advised the Agent that the Borrower may (i)
utilize a limited partnership in lieu of a limited liability company in
connection with the Proposed Reorganization (ii) create a wholly owned
Subsidiary that will become a Subsidiary Guarantor and will own 1% of each of
the New Subsidiaries (as defined below) after the consummation of the Proposed
Reorganization; and
WHEREAS, the Borrower has requested that the Second Amendment be
modified to permit such use of a limited partnership and creation of such wholly
owned Subsidiary; and
WHEREAS, the Majority Lenders have agreed to such amendment and waiver
on the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, the parties hereto hereby agree as follows:
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SECTION 1. DEFINITIONS. All capitalized terms used but not
otherwise defined in this Amendment and Consent shall have the meanings
assigned thereto in the Credit Agreement.
SECTION 2. AMENDMENT TO THE CREDIT AGREEMENT. As of the Effective
Date, the Credit Agreement shall be amended as follows:
(a) By amending Section 4.1 of the Credit Agreement by deleting
such Section 4.1 in its entirety and replacing it with the following:
"4.1 EXISTENCE; COMPLIANCE WITH LAW. Each Loan Party and each
of its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its
organization; (b) is duly qualified in each foreign jurisdiction
in which it conducts business, except for failures to so qualify
which in the aggregate have no Material Adverse Effect; (c) has
all requisite corporate, partnership or limited liability company
power and authority and the legal right to own, pledge, mortgage
and operate its properties, to lease the property it operates
under lease and to conduct its business as now or currently
proposed to be conducted; (d) is in compliance with its charter
and by-laws or other comparable governing documents; (e) is in
compliance with all other applicable Requirements of Law except
for such non-compliances as in the aggregate have no Material
Adverse Effect; and (f) has all necessary Licenses, permits,
consents or approvals from or by, has made all necessary filings
with, and has given all necessary notices to, each Government
Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for Licenses, permits,
consents or approvals which can be obtained by the taking of
ministerial action to secure the grant or transfer thereof or
failures which in the aggregate have no Material Adverse Effect."
(b) By amending Section 4.2 thereof be deleting Section 4.2(a)(i)
and (ii) in its entirety and replacing it with the following:
"(i) are within such Loan Party's corporate, partnership or
limited liability company powers, as the case may be;
(ii) have been duly authorized by all necessary corporate,
partnership or limited liability company action, as the case may
be, including, without limitation, the consent of shareholders,
partners or members, as the case may be, where required;"
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(c) By amending Section 6.5 thereof by deleting such Section 6.5 in its
entirety and replacing it with the following:
"6.5 PRESERVATION OF EXISTENCE, ETC. The Borrower shall preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its
corporate, partnership or limited liability company existence, rights
(charter and statutory) and franchises, as the case may be, except as
permitted under Section 7.4; PROVIDED, HOWEVER, that neither the Borrower
nor any Subsidiary shall be prohibited from withdrawing its qualification
to do business in any jurisdiction from which it no longer is conducting
its business."
SECTION 3. LENDER CONSENT.
(a) The Majority Lenders consent to the Borrower's non-compliance with
Sections 7.4 and 7.5 of the Credit Agreement to the extent necessary to enable
the Borrower (i) to form a wholly owned Subsidiary ("Newco") that will become a
Subsidiary Guarantor and that will own 1% of each of the New Subsidiaries (as
defined below) (ii) to form (but not transfer any significant assets to unless
the relevant conditions set forth in Section 3(b) below are satisfied) a limited
liability company and a limited partnership (each a "NEW SUBSIDIARY") that will
be either wholly owned by the Borrower or jointly owned by the Borrower and one
or more Subsidiary Guarantors and (iii) subject to the satisfaction of the
conditions set forth in Section 3(b) below, to transfer to one of the New
Subsidiaries all of the Borrower's operations located in Indiana, including all
operational items relative to the Borrower's stores located in Indiana (such as
assets, employees and leases and other contractual agreements) and to the other
New Subsidiary all of the Borrower's employees other than those employed in the
Borrower's Michigan or Indiana locations.
(b) The consent in Section 3(a)(ii) above shall be effective as to each
New Subsidiary only upon the execution and delivery to the Agent of each of the
instruments and other documents set forth below in form and substance
satisfactory to the Agent:
(i) a guaranty substantially in the form of the Subsidiary Guaranty,
duly executed by such New Subsidiary and Newco;
(ii) a pledge amendment substantially in the form of Schedule II to
the Borrower Pledge Agreement, duly executed by Borrower, pursuant to which
all the outstanding capital stock of Newco is pledged to the Agent;
(iii) an amendment to the Amended and Restated Security Agreement,
duly executed by each Loan Party substantially in the form of the Amendment
Agreement attached hereto as Exhibit A, whereby INTER ALIA such New
Subsidiary and Newco are added as parties to, become bound by the
provisions of and grant Liens in favor of the Agent for the
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benefit of the Secured Parties pursuant to the Amended and Restated
Security Agreement;
(iv) all UCC-1 financing statements necessary to perfect the Liens
granted by such New Subsidiary and Newco in favor of the Agent for the
benefit of the Secured Parties, each duly executed by such New Subsidiary
and Newco and duly recorded in all the recording offices that the Agent
deems necessary to perfect such Liens;
(v) a certificate of each of such New Subsidiary and Newco dated the
date such New Subsidiary is organized and signed by a duly authorized
Responsible Officer of such New Subsidiary or Newco, as the case may be,
certifying as to (x) true copies of governing documents of such New
Subsidiary or Newco, as the case may be, in effect as of such date, (y)
true copies of all corporate, limited liability company or limited
partnership action, as the case may be, taken by such New Subsidiary or
Newco, as the case may be, authorizing the instruments and other documents
that it is required to execute pursuant to this Section 3(b), authorizing
the incurrence of the obligations and the granting of the Liens in the
Collateral owned by it securing payment and performance of the Obligations
and stating that the same have been properly adopted and have not been
modified or amended and (z) the names, true signatures and incumbency of
the Responsible Officers of such New Subsidiary or Newco, as the case may
be, authorized to execute the other instruments and other documents
required to be executed by such New Subsidiary or Newco, as the case may
be, pursuant to this Section 3(b);
(vi) a Certificate of Good standing for such New Subsidiary and Newco
duly issued by the Secretary of State of each state in which such New
Subsidiary or Newco, as the case may be, does business; and
(vii) written opinions of counsel to such New Subsidiary and Newco to
the same effect as those delivered pursuant to Section 3.1 of the Credit
Agreement.
(c) The Majority Lenders hereby consent to the amendment to the Amended and
Restated Security Agreement substantially in the form of the Amendment Agreement
attached hereto as Exhibit A.
(d) The provisions of this Section 3 shall supersede the provisions of
Section 3 of the Second Amendment.
SECTION 4. GUARANTOR CONSENT. Each Guarantor hereby consents to the terms
and conditions of this Amendment and Consent and confirms that its Guaranty
remains in full force and effect and continues to secure the Obligations
pursuant to the terms thereof as amended hereby. Each Pledgor and Grantor (as
such terms are defined in the Loan Documents) hereby consents to the terms of
this Amendment and Consent
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and confirms that the security interests and liens granted pursuant to the Loan
Documents to which it is a party continue to secure the Obligations pursuant to
the terms thereof as amended thereby and that such security interests and liens
and Loan Documents remain in full force and effect.
SECTION 5. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents
and warrants to the Lenders and the Agent that (i) the execution, delivery and
performance of this Amendment and Consent has been duly authorized by all
requisite corporate, partnership or limited liability company action, as the
case may be, on the part of the Borrower and other Loan Parties and will not
violate any certificate of incorporation, certificate of formation, by-laws,
operating agreement, partnership agreement or any other comparable
organizational document of any of the Borrower and other Loan Parties; (ii) this
Amendment and Consent is the legal, valid, binding and enforceable obligation of
the Borrower, enforceable against it in accordance with its terms; (iii) the
representations and warranties contained in the Credit Agreement are true and
correct in all material respects on and as of the date hereof as though made on
and as of such date, except to the extent that any such representation or
warranty expressly relates to an earlier date and for changes therein permitted
or contemplated by the Credit Agreement as amended by this Amendment and
Consent; and (iv) no Default or Event of Default under the Credit Agreement has
occurred and is continuing.
SECTION 6. CONDITIONS TO EFFECTIVENESS. This Amendment and Consent shall
become effective (the "EFFECTIVE DATE") when, and only when, the Agent shall
have received counterparts hereof which when taken together shall have been
signed by the Borrower, the Guarantors and the Majority Lenders (whether on the
same or different counterparts).
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SECTION 7. EFFECT ON THE LOAN DOCUMENTS.
(a) On and after the date hereof, each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like
import, and each reference in the other Loan Documents to the Credit Agreement,
shall mean and be a reference to the Credit Agreement, as amended hereby.
(b) Except as specifically amended herein, the Credit Agreement and
all other Loan Documents shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment and
Consent shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender under any of the Loan Documents, nor
shall it constitute a waiver of any provision of any of the Loan Documents,
including, without limitation, a waiver of any rights of any Lender arising out
of, or relating to, any Default or Event of Default that has occurred and is
continuing.
SECTION 8. COUNTERPARTS.
This Amendment and Consent may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
SECTION 9. GOVERNING LAW.
THIS AMENDMENT AND CONSENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Amendment as of the date first above written.
Borrower:
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THE ELDER-BEERMAN STORES CORP.
By: /s/ Steven D. Lipton
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Name: Steven D. Lipton
Title: Vice President, Controller
Grantors:
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THE BEE-GEE SHOE CORP.
By: /s/ Steven D. Lipton
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Name: Steven D. Lipton
Title: Sr. Vice President, Controller
THE EL-BEE CHARGIT CORP.
By: /s/ Steven D. Lipton
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Name: Steven D. Lipton
Title: Sr. Vice President, Controller
ELDER-BEERMAN WEST VIRGINIA, INC.
By: /s/ Steven D. Lipton
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Name: Steven D. Lipton
Title: Vice President, Controller
Agent:
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CITICORP USA, INC.
By: /s/ Claudia Slacik
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Name: Claudia Slacik
Title: Vice President
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Issuer:
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CITIBANK, NA
By: /s/ Claudia Slacik
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Name: Claudia Slacik
Title: Vice President
Lenders:
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CITICORP USA, INC.
By: /s/ Claudia Slacik
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Name: Claudia Slacik
Title: Vice President
BANK OF AMERICA, N.A.
By: /s/ Louis Alexander
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Name: Louis Alexander
Title: Senior Vice President
BANK ONE, NA
By: /s/ Michael R. Zaksheske
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Name: Michael R. Zaksheske
Title: Vice President
DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
By: /s/ John W. Sweeney
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Name: John W. Sweeney
Title: Vice President
By: /s/ John R. Morrison
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Name: John R. Morrison
Title: Vice President
THE FIRST NATIONAL BANK OF
BOSTON
By: N/A
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Name:
Title:
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FLEET NATIONAL BANK
By: /s/ Douglas Scala
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Name: Douglas Scala
Title: Senior Vice President
NATIONAL CITY COMMERCIAL FINANCE, INC.
By: /s/ Elizabeth M. Lynch
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Name: Elizabeth M. Lynch
Title: Senior Vice President
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BANKBOSTON, N.A.
By: /s/ Edward M. Barthowski
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Name: Edward M. Barthowski
Title: Authorized Officer
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