Exhibit 10.7

 

EXECUTION VERSION

 

FIRST AMENDMENT TO INTERCREDITOR AGREEMENT

 

FIRST AMENDMENT TO INTERCREDITOR AGREEMENT (this “Amendment”) is entered into as
of November 7, 2017 by and among (a) ROYAL BANK OF CANADA (“Royal Bank”), in its
capacities as administrative agent and collateral agent (together with its
successors and assigns in such capacities, the “ABL Agent”) for (i) the
financial institutions, lenders and investors party from time to time to the ABL
Credit Agreement (as defined in the Intercreditor Agreement referred to below)
(such financial institutions, lenders and investors together with their
respective successors, assigns and transferees, including any letter of credit
issuers under the ABL Credit Agreement, the “ABL Lenders”), (ii) any ABL Cash
Management Affiliates (as defined in the Intercreditor Agreement) and (iii) any
ABL Hedging Affiliates (as defined in the Intercreditor Agreement) (such ABL
Cash Management Affiliates and ABL Hedging Affiliates, together with the ABL
Agent and the ABL Lenders and any other secured parties under any ABL Credit
Agreement, the “ABL Secured Parties”), (b) Royal Bank, in its capacities as
administrative agent and collateral agent (together with its successors and
assigns in such capacities, the “First Lien Term Agent”) for (i) the financial
institutions, lenders and investors party from time to time to the Term Credit
Agreement (as defined in the Intercreditor Agreement) (such financial
institutions, lenders and investors, together with their respective successors,
assigns and transferees, the “First Lien Term Lenders”), (ii) any Term Cash
Management Affiliates (as defined in the Intercreditor Agreement) and (iii) any
Term Hedging Affiliates (as defined in the Intercreditor Agreement) (such Term
Cash Management Affiliates and Term Hedging Affiliates, together with the First
Lien Term Agent and the First Lien Term Lenders and any other secured parties
under any Term Credit Agreement, the “First Lien Term Secured Parties”), and
(c) Wilmington Trust, National Association, in its capacities as administrative
agent and collateral agent (the “Second Lien Term Agent”) for the financial
institutions, lenders and investors party from time to time to the Second Lien
Term Credit Agreement (as defined below) (such financial institutions, lenders
and investors together with their respective successors, assigns and
transferees, the “Second Lien Term Lenders” and, together with the Second Lien
Term Agent, the “Second Lien Term Secured Parties”).

 

Unless otherwise defined in this Amendment, capitalized terms used herein will
have the same meaning in this Amendment as set forth in the Intercreditor
Agreement.

 

WHEREAS, the ABL Agent and the First Lien Term Agent entered into that certain
Intercreditor Agreement as of January 13, 2012 (as amended, supplemented,
restated, and/or otherwise modified prior to the date hereof, the “Intercreditor
Agreement”);

 

WHEREAS, the Intercreditor Agreement provides for the respective and relative
rights of the ABL Secured Parties and the First Lien Term Secured Parties;

 

WHEREAS, in connection with the refinancing and restructuring of certain debt
and other obligations (collectively, the “Restructuring Transactions”) of
Holdings, the Borrower and the Guarantors (each as defined in the Intercreditor
Agreement), (a) Holdings, the Borrower and the Guarantors are amending certain
terms of each of the ABL Credit Agreement and the Term Credit Agreement,
(b) Holdings, the Borrower, the Guarantors, the Second Lien Term Lenders and the
Second Lien Term Agent are entering into that certain Credit Agreement, dated as
of the date hereof (as amended, supplemented, restated, and/or otherwise
modified from time to time, the “Second Lien Term Credit Agreement”), and (c) a
portion of the term loans outstanding on the date hereof under the Term Credit
Agreement shall be reallocated to new second lien term loans made by the Second
Lien Term Lenders (the “Second Lien Term Loans” and, together with all other
“Obligations” or similar term as defined in the Second Lien Term Credit
Agreement owed to the Second Lien Term Secured Parties or any of them, the
“Second Lien Term Obligations”);

 

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WHEREAS, in connection with the Restructuring Transactions, the First Lien Term
Agent and the Second Lien Agent are entering into that certain Term Loan
Intercreditor Agreement, dated as of the date hereof (and amended, supplemented,
restated and/or otherwise modified or replaced from time to time, the “Term Loan
Intercreditor Agreement”), which will provide for the respective and relative
rights of the First Lien Term Secured Parties and the Second Lien Term Secured
Parties; and

 

WHEREAS, pursuant to Section 7.4 of the Intercreditor Agreement, the parties
hereto wish to supplement and modify the Intercreditor Agreement as set forth in
this Amendment to include the Second Lien Term Secured Parties as parties to the
Intercreditor Agreement and to provide that the Second Lien Term Obligations
shall constitute Term Obligations thereunder and to make other technical
amendments to the Intercreditor Agreement to facilitate the foregoing on the
terms and conditions set forth herein.

 

NOW, THEREFORE, the parties hereto hereby agree as follows:

 

1.                                      Acknowledgements and Agreements.

 

(a)                                 Each of (i) the ABL Agent, on behalf of
itself and the ABL Secured Parties, and (ii) the Term Loan Agent, on behalf of
itself and the First Lien Term Secured Parties, acknowledges and agrees that
(A) the Second Lien Term Lenders constitute additional “Term Lenders” under and
as defined in the Intercreditor Agreement, (B) the Second Lien Term Secured
Parties constitute additional “Term Secured Parties” under and as defined in the
Intercreditor Agreement, (C) the Second Lien Term Obligations constitute
additional “Term Obligations” under and as defined in the Intercreditor
Agreement and (D) the Second Lien Term Credit Agreement constitutes an
additional “Term Credit Agreement” under and as defined in the Intercreditor
Agreement.

 

(b)                                 The Second Lien Term Agent, for the benefit
of the ABL Agent, the ABL Secured Parties, the First Lien Term Agent and the
First Lien Term Secured Parties, acknowledges and agrees, on behalf of itself
and the other Second Lien Term Secured Parties, that (i) it is subject to and
bound by all of the obligations and agreements of the “Term Agent” under and as
defined in the Intercreditor Agreement, and the First Lien Term Agent is
authorized to act on its behalf in accordance with the terms thereof, (ii) the
rights and obligations of the Second Lien Term Secured Parties as Term Secured
Parties under the Intercreditor Agreement are subject to and bound by the rights
and obligations applicable to Term Secured Parties in respect of Term
Obligations under the Intercreditor Agreement, (iii) the Second Lien Term
Obligations constitute “Term Obligations” under and as defined in the
Intercreditor Agreement, and (iv) it will comply with the terms of the
Intercreditor Agreement.

 

(c)                                  Each of the parties hereto further
acknowledges and agrees that, from and after the date of the Discharge of Term
Obligations (other than the Second Lien Term Obligations) and upon proper
written notice from the First Lien Term Agent and the Second Lien Term Agent to
the ABL Agent, the Second Lien Term Agent shall be deemed to be the Term Agent
under the Intercreditor Agreement and shall have all of the rights and remedies
afforded to the Term Agent pursuant to the Intercreditor Agreement.  Until such
time as the Second Lien Term Agent may become the Term Agent under the
Intercreditor Agreement as provided in the preceding sentence, the Second Lien
Term Agent and the other Second Lien Term Secured Parties shall only have the
rights and obligations of Term Secured Parties under the Intercreditor Agreement
and not the rights or the obligations of the Term Agent.

 

(d)                                 The Second Lien Term Agent, for the benefit
of the First Lien Term Agent and the First Lien Term Secured Parties,
acknowledges and agrees, on behalf of itself and the other Second Lien Term
Secured Parties, and the First Lien Term Agent, for the benefit of the Second
Lien Term Agent and the Second Lien Term Secured Parties, acknowledges and
agrees, on behalf of itself and the other First Lien Term Secured Parties, that,
solely as between holders of the First Lien Term Obligations, on

 

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the one hand, and holders of the Second Lien Term Obligations, on the other
hand, the rights and obligations of the First Lien Term Secured Parties and the
Second Lien Term Secured Parties as Term Secured Parties under the Intercreditor
Agreement and the First Lien Term Obligations and the Second Lien Term
Obligations as Term Obligations under the Intercreditor Agreement will be
subject to the terms and conditions of the Term Loan Intercreditor Agreement. 
Neither the ABL Agent nor any of the other ABL Secured Parties are parties to or
have any rights or obligations under the Term Loan Intercreditor Agreement.

 

2.                                      Representations.

 

(a)                                 The First Lien Term Agent represents and
warrants to the ABL Agent and the Second Lien Term Agent that it has the
requisite power and authority under the Term Documents to enter into, execute,
deliver, and carry out the terms of this Amendment on behalf of itself and the
First Lien Term Secured Parties and that this Amendment shall be binding
obligations of the First Lien Term Agent and the First Lien Term Secured
Parties, enforceable against the First Lien Term Agent and the First Lien Term
Secured Parties in accordance with its terms.

 

(b)                                 The Second Lien Term Agent represents and
warrants to the ABL Agent and the First Lien Term Agent that it has the
requisite power and authority under the Second Lien Term Credit Agreement to
enter into, execute, deliver, and carry out the terms of this Amendment on
behalf of itself and the Second Lien Term Secured Parties and that this
Amendment shall be binding obligations of the Second Lien Term Agent and the
Second Lien Term Secured Parties, enforceable against the Second Lien Term Agent
and the Second Lien Term Secured Parties in accordance with its terms.

 

(c)                                  The ABL Agent represents and warrants to
the First Lien Term Agent and the Second Lien Term Agent that it has the
requisite power and authority under the ABL Documents to enter into, execute,
deliver, and carry out the terms of this Amendment on behalf of itself and the
ABL Secured Parties and that this Amendment shall be binding obligations of the
ABL Agent and the ABL Secured Parties, enforceable against the ABL Agent and the
ABL Secured Parties in accordance with its terms.

 

3.                                      Notices.  The address of the Second Lien
Term Agent for purposes of all notices and other communications under the
Intercreditor Agreement is as set forth on its signature page hereto.

 

4.                                      No Other Changes.  Except as explicitly
amended by this Amendment, all of the terms and conditions of the Intercreditor
Agreement shall remain in full force and effect.

 

5.                                      Governing Law.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

6.                                      Counterparts.  This Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed an original and all of which counterparts, taken
together, shall constitute one and the same instrument.

 

7.                                      Miscellaneous.  The provisions of
Sections 7.11, 7.12, 7.13, 7.14, 7.17 and 7.18 of the Intercreditor Agreement
will apply with like effect to this Agreement.

 

[SIGNATURE PAGES FOLLOW]

 

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IN WITNESS WHEREOF, the ABL Agent, for and on behalf of itself and the ABL
Secured Parties, the First Lien Term Agent, for and on behalf of itself and the
First Lien Term Secured Parties, and the Second Lien Term Agent, for and on
behalf of itself and the Second Lien Term Secured Parties, have caused this
Amendment to be duly executed and delivered as of the date first above written.

 

 

ROYAL BANK OF CANADA, in its capacity as
the ABL Agent

 

 

 

 

 

By:

/s/ Susan, Khokher

 

 

Name:

Susan, Khokher

 

 

Title:

Manager, Agency

 

Signature Page to First Amendment to Intercreditor Agreement

 

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ROYAL BANK OF CANADA, in its capacity as
the First Lien Term Agent

 

 

 

 

 

By:

/s/ Susan, Khokher

 

 

Name:

Susan, Khokher

 

 

Title:

Manager, Agency

 

Signature Page to First Amendment to Intercreditor Agreement

 

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WILMINGTON TRUST, NATIONAL
ASSOCIATION, in its capacity as the Second Lien
Term Agent

 

 

 

 

 

By:

/s/ Joshua G. James

 

 

Name:

Joshua G. James

 

 

Title:

Vice President

 

 

 

Notice Address:

 

 

 

50 South Sixth Street

 

Minneapolis MN 55402

 

Attn: Josh James, Vice President

 

Fax: (612) 217-5651

 

Signature Page to First Amendment to Intercreditor Agreement

 

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ACKNOWLEDGMENT

 

The Borrower and each Guarantor hereby acknowledges that it has received a copy
of this Amendment as in effect on the date hereof and consents thereto, agrees
to recognize all rights granted thereby to the ABL Agent, the ABL Secured
Parties, the First Lien Term Agent, the First Lien Term Secured Parties, the
Second Lien Term Agent and the Second Lien Term Secured Parties.  The Borrower
and each Guarantor further acknowledges and agrees that it is not an intended
beneficiary or third party beneficiary under this Amendment.

 

 

BORROWER:

 

 

 

99 CENTS ONLY STORES LLC

 

 

 

 

 

By:

/s/ Felicia Thornton

 

 

Name:

Felicia Thornton

 

 

Title:

Chief Financial Officer

 

 

 

GUARANTORS:

 

 

 

NUMBER HOLDINGS, INC.

 

99 CENTS ONLY STORES TEXAS, INC.

 

 

 

 

 

By:

/s/ Felicia Thornton

 

 

Name:

Felicia Thornton

 

 

Title:

Chief Financial Officer

 

Signature Page to First Amendment to Intercreditor Agreement

 

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