Exhibit 10.1
 
 
SECOND AMENDMENT TO
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
 
This SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY
AGREEMENT, dated as of December 12, 2013 (this “Amendment”), modifies that
certain Second Amended and Restated Loan and Security Agreement, dated as of
March 21, 2011 (as amended by that certain First Amendment to Second Amended and
Restated Loan and Security Agreement dated as of October 25, 2012 and as may be
further amended, restated, amended and restated, extended, supplemented or
otherwise modified in writing from time to time, the “Loan and Security
Agreement”), among THE BON-TON DEPARTMENT STORES, INC., a Pennsylvania
corporation (“Bon-Ton”), CARSON PIRIE SCOTT II, INC., a Florida corporation
(“CPS II”), BON-TON DISTRIBUTION, INC., an Illinois corporation
(“Distribution”), MCRIL, LLC, a Virginia limited liability company (“McRIL”),
THE BON-TON STORES OF LANCASTER, INC., a Pennsylvania corporation (“Lancaster”
and, together with Bon-Ton, CPS II, Distribution, McRIL and any other person
from time to time a borrower thereunder, collectively, the “Borrowers”), each of
the other Obligors party thereto, the financial institutions party thereto from
time to time as lenders (collectively, the “Lenders”), BANK OF AMERICA, N.A., a
national banking association (“Bank of America”), as agent for the Lenders (in
such capacity, the “Agent”), Bank of America and GENERAL ELECTRIC CAPITAL
CORPORATION (“GE Capital”), acting as co-collateral Agents (in such capacity,
the “Co-Collateral Agents”), and the other parties thereto.  Capitalized terms
used herein and not defined shall have the meaning assigned to such terms in the
Loan and Security Agreement.
 
W I T N E S S E T H:
 
A.           The Borrowers have requested that the Agent and the Lenders agree
to amend certain of the terms and provisions of the Loan and Security Agreement,
as specifically set forth in this Amendment; and
 
B.           The undersigned Lenders and the Agent are prepared to amend the
Loan and Security Agreement on the terms, subject to the conditions and in
reliance on the representations set forth herein.
 
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the parties hereto hereby agree as follows:
 
1.   Amendments to Loan and Security Agreement.
 
(a)   Section 1.1 (Definitions) of the Loan and Security Agreement is hereby
amended by restating the following definitions contained therein in their
entirety as follows:
 
“Applicable Margin - with respect to any Type of Loan, the margin set forth
below, as determined by the average daily Availability Percentage during the
Fiscal Quarter most recently then ended:
 
 
 

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Level
Availability
Percentage
LIBOR
Tranche A
Revolver Loans
LIBOR
Tranche A-1
Revolver Loans
Base Rate
Tranche A
Revolver Loans
Base Rate
Tranche A-1
Revolver Loans
           
I
Greater than 60%
1.50%
3.25%
0.50%
2.25%
II
Less than or equal to 60% and greater than 30%
1.75%
3.50%
0.75%
2.50%
III
Less than or equal to 30%
2.00%
3.75%
1.00%
2.75%

 
The margins shall be subject to increase or decrease on a quarterly basis.  Not
more than ten (10) Business Days after the first day of each Fiscal Quarter,
Agent shall determine the Applicable Margin for such Fiscal Quarter (which shall
be effective as of the first Business Day of such Fiscal Quarter) based on the
average daily Availability Percentage for the prior Fiscal Quarter; provided
that notwithstanding the foregoing, (i) from and after the date that the
aggregate amount of the Tranche A Real Estate Availability Amount and the
Tranche A-1 Real Estate Amount included in the Aggregate Borrowing Base (as
reflected in the Borrowing Base Certificate delivered pursuant to Section 8.1)
exceeds $65,000,000 and until the Termination Date, the margins shall be
increased by 25 basis points per annum at each Level for each Type of Loan and
(ii) the Applicable Margin shall not be less than the margins corresponding to
Level II above until March 1, 2014.”
 
“Excess Availability Trigger Event - the first date on which Excess Availability
for five consecutive Business Days is less than 12.5% of the lesser of (x) the
aggregate Commitments at such time and (y) the Aggregate Borrowing Base at such
time.”
 
“Excess Availability Trigger Period - any period (a) commencing upon the
occurrence of a Excess Availability Trigger Event and (b) ending on the date
that Excess Availability for a period of sixty (60) consecutive calendar days
exceeds 12.5% of the lesser of (x) the aggregate Commitments at such time and
(y) the Aggregate Borrowing Base at such time.”
 
“Guarantors - each of (a) the Parent, (b) The Bon-Ton Giftco, LLC, (c) each
other Person who guarantees payment or performance of any Obligations and (d)
with respect to Obligations owing by any Obligor or any Subsidiary of an Obligor
(other than the Borrowers) under any Hedging Agreement or Cash Management
Services, the Borrowers.”
 
“Termination Date - The date that is the earlier to occur of (a) December 12,
2018 and (b) the date that is sixty (60) days prior to the earliest of the
maturity date of (x) any Senior Note Debt (unless there is less than $60 million
in aggregate principal of Senior Note Debt (exclusive of Senior Note Debt with a
stated maturity later than sixty (60) days after the date in clause (a))
outstanding, in which case this clause (x) shall not apply) and (y) the Junior
Debt (if incurred).”
 
 
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“Tranche A Real Estate Availability Amount - on any date of determination, the
lesser of (x) $100,000,000 minus the Tranche A-1 Real Estate Amount on such date
and (y) the Tranche A Real Estate Amount on such date.”
 
“Tranche A-1 Inventory Advance Percentage - (a) at all times prior to
December 31, 2014, 15%, (b) from and after December 31, 2014 through and
including December 30, 2015, 12.50%, and (c) from and after December 31, 2015
and at all times thereafter, 10.00%.  If any date on which the Tranche A-1
Inventory Advance Percentage is to be adjusted is not a Business Day, then the
Tranche A-1 Inventory Advance Percentage shall be adjusted on the Business Day
next succeeding such day.”
 
“Trigger Event Termination Date - any date during a Trigger Event Period on
which (a) with respect to a Trigger Event resulting from the occurrence of a
Specified Event of Default, all Events of Default have been waived or remedied
in accordance with the terms of the Loan Documents or (b) with respect to an
Excess Availability Trigger Event, Excess Availability for a period of sixty
(60) consecutive calendar days exceeds 12.5% of the lesser of (x) the aggregate
Commitments then in effect and (y) the Aggregate Borrowing Base then in effect;
provided, however, that in no event shall a Trigger Event Termination Date be
deemed to have occurred (and a Trigger Event Period may not end) more than two
(2) times during any period of twelve (12) consecutive months.”
 
“Unused Line Fee - for any Fiscal Quarter, 0.25% per annum.”
 
(b)   Section 1.1 (Definitions) of the Loan and Security Agreement is hereby
amended by inserting the following new definitions therein the appropriate
alphabetical order:
 
“Commodity Exchange Act -  means the Commodity Exchange Act (7 U.S.C. § 1 et
seq.), as amended from time to time, and any successor statute.”
 
“Designated Jurisdiction” means any country or territory to the extent that such
country or territory itself is the subject of any Sanction.”
 
“Excluded Swap Obligation - means, with respect to any Guarantor, any Swap
Obligation if, and to the extent that, all or a portion of the Guaranty of such
Guarantor of, or the grant by such Guarantor of a security interest to secure,
such Swap Obligation (or any Guaranty thereof) is or becomes illegal under the
Commodity Exchange Act or any rule, regulation or order of the Commodity Futures
Trading Commission (or the application or official interpretation of any
thereof) by virtue of such Guarantor’s failure for any reason to constitute an
“eligible contract participant” as defined in the Commodity Exchange Act
(determined after giving effect to Section 14.20 and any other “keepwell,
support or other agreement” for the benefit of such Guarantor and any and all
guarantees of such Guarantor’s Swap Obligations by other Loan Parties) at the
time the Guaranty of such Guarantor, or a grant by such Guarantor of a security
interest, becomes effective with respect to such Swap Obligation. If a Swap
Obligation arises under a master agreement governing more than one swap, such
exclusion shall apply only to the portion of such Swap Obligation that is
attributable to swaps for which such Guaranty or security interest is or becomes
excluded in accordance with the first sentence of this definition.”
 
 
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“Qualified ECP Guarantor - shall mean, at any time, each Obligor with total
assets exceeding $10,000,000 or that qualifies at such time as an “eligible
contract participant” under the Commodity Exchange Act and can cause another
person to qualify as an “eligible contract participant” at such time under
§1a(18)(A)(v)(II) of the Commodity Exchange Act.”
 
“Sanction(s) - means any international economic sanction administered or
enforced by the United States Government (including, without limitation, OFAC),
the United Nations Security Council, the European Union, Her Majesty’s Treasury
or other relevant sanctions authority.”
 
“Second Amendment Closing Date - December 12, 2013.”
 
“Specified Loan Party - means any Obligor that is not an “eligible contract
participant” under the Commodity Exchange Act (determined prior to giving effect
to Section 14.20).”
 
“Swap Obligations - means with respect to any Guarantor any obligation to pay or
perform under any agreement, contract or transaction that constitutes a “swap”
within the meaning of Section 1a(47) of the Commodity Exchange Act.”
 
(c)   The definition of “Adjusted LIBOR” contained in Section 1.1 (Definitions)
of the Loan and Security Agreement is hereby amended by restating the first
sentence of such definition as follows:
 
“Adjusted LIBOR - for any Interest Period, with respect to LIBOR Loans, the per
annum rate of interest (rounded upward, if necessary, to the nearest 1/16th of
1%) equal to the British Bankers Association per annum LIBOR Rate or the
successor thereto if the British Bankers Association is no longer making a LIBOR
rate available (“LIBOR”), as published by Reuters (or other commercially
available source providing quotations of LIBOR as designated by Agent from time
to time) at approximately 11:00 a.m., London time, two Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery on
the first day of such Interest Period) with a term equivalent to such Interest
Period.”
 
(d)   The definition of “Bank Product” contained in Section 1.1 (Definitions) of
the Loan and Security Agreement is hereby amended by (i) deleting the “and” at
the end of clause (d) of such definition, (ii) inserting a “;” immediately after
“leases” at the end of clause (d) of such definition, and (iii) inserting the
following new text immediately before the “;” in clause (e) of such definition:
 
“and (f) supply chain financing”
 
 
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(e)   The definition of “Obligations” contained in Section 1.1 (Definitions) of
the Loan and Security Agreement is hereby amended by inserting the following new
text at end of such definition:
 
“; provided that the “Obligations” shall exclude any Excluded Swap Obligations”.
 
 
(f)   The definition of “Permitted Acquisition” contained in Section 1.1
(Definitions) of the Loan and Security Agreement is hereby amended by restating
clauses (v) and (vi) of such definition as follows:
 
“(v)           Excess Availability on the date of the making of such acquisition
on a pro forma basis after giving effect to such acquisition, and projected
Excess Availability on a pro forma basis for the upcoming six month period
(after giving effect to such acquisition), measured as of the last day of each
fiscal month during such six month period, is, in each case, greater than or
equal to 15% of the lesser of (A) the aggregate Commitments as of the date of
such acquisition and last day of each fiscal month during such six month period
and (B) the Aggregate Borrowing Base as of the date of such acquisition and the
last day of each fiscal month during such six month period;
 
(vi)           except if an acquisition is made within 180 days of an equity
issuance and solely with the cash proceeds in an aggregate amount not to exceed
the Available Basket Amount then in effect, as of the monthly fiscal period most
recently then ended, the Consolidated Fixed Charge Coverage Ratio (on a pro
forma trailing 12 fiscal month basis, giving effect to the making of such
acquisition, and any Borrowings made in connection therewith, determined as
though such acquisition and such Borrowings occurred on the first day of the 12
fiscal month period ended prior to such acquisition) is greater than or equal to
1.00 to 1.00; provided that the foregoing shall not be applicable in the event
that Excess Availability on the date of the making of such acquisition on a pro
forma basis after giving effect to such acquisition, and projected Excess
Availability on a pro forma basis for the upcoming six month period (after
giving effect to such acquisition), measured as of the last day of each fiscal
month during such six month period, is, in each case, greater than or equal to
30% of the lesser of (A) the aggregate Commitments as of the date of such
acquisition and last day of each fiscal month during such six month period and
(B) the Aggregate Borrowing Base as of the date of such acquisition and the last
day of each fiscal month during such six month period;”
 
(g)   The definition of “Permitted Distribution” contained in Section 1.1
(Definitions) of the Loan and Security Agreement is hereby amended by restating
clause (a) of such definition as follows:
 
 
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“(a) a dividend by the Parent or redemption or repurchase of equity securities
of the Parent so long as (i) no Default or Event of Default shall have occurred
and be continuing or would result after giving effect to any such Distribution,
(ii) Excess Availability on the date of the making of such Distribution on a pro
forma basis after giving effect to such Distribution, and projected Excess
Availability on a pro forma basis for the upcoming six month period (after
giving effect to such Distribution), measured as of the last day of each fiscal
month during such six month period, is, in each case, greater than or equal to
17.5% of the lesser of (A) the aggregate Commitments as of the date of such
Distribution and last day of each fiscal month during such six month period and
(B) the Aggregate Borrowing Base as of the date of such Distribution and the
last day of each fiscal month during such six month period, (iii) as of the
monthly fiscal period most recently then ended, the Consolidated Fixed Charge
Coverage Ratio (on a pro forma trailing 12 fiscal month basis, giving effect to
the making of such Distribution, and any Borrowings made in connection
therewith, determined as though such Distribution and such Borrowings occurred
on the first day of the twelve fiscal month period ended prior to such
Distribution) is greater than or equal to 1.10 to 1.00; provided that this
clause (iii) shall not be applicable in the event that Excess Availability on
the date of the making of such Distribution on a pro forma basis after giving
effect to such Distribution, and projected Excess Availability on a pro forma
basis for the upcoming six month period (after giving effect to such
Distribution), measured as of the last day of each fiscal month during such six
month period, is, in each case, greater than or equal to 35% of the lesser of
(x) the aggregate Commitments as of the date of such Distribution and last day
of each fiscal month during such six month period and (y) the Aggregate
Borrowing Base as of the date of such Distribution and the last day of each
fiscal month during such six month period and (iv) the Borrowers shall have
provided the Agent with a certificate not less than ten days prior to the making
of such Distribution executed by a Senior Officer of the Borrower Agent,
evidencing compliance, on a pro forma basis, after giving effect to such
Distribution, with the requirements set forth in clauses (i) through (iii) above
(which certificate shall attach supporting projections, information and
calculations with respect to the requirements set forth in clauses (ii) and
(iii) above (all based on projections of the financial performance of the
Obligors believed to be fair and reasonable at the time made)),”
 
(h)   The definition of “Restricted Investment” contained in Section 1.1
(Definitions) of the Loan and Security Agreement is hereby amended by restating
clause (n)(ii) of such definition as follows:
 
“(ii) Excess Availability on the date of the making of such Investment on a pro
forma basis after giving effect to such Investment, and projected Excess
Availability on a pro forma basis for the upcoming six month period (after
giving effect to such Investment), measured as of the last day of each fiscal
month during such six month period, is, in each case, greater than or equal to
15% of the lesser of (A) the aggregate Commitments as of the date of such
Investment and last day of each fiscal month of such six month period and (B)
the Aggregate Borrowing Base as of the date of such Investment and the last day
of each fiscal month of such six month period and”
 
(i)   The definition of “Tranche A Borrowing Base” contained in Section 1.1
(Definitions) of the Loan and Security Agreement is hereby amended by adding the
following new sentence at the end of such definition:
 
“Notwithstanding the foregoing, in no event shall the Tranche A Real Estate
Availability Amount included in the Tranche A Borrowing Base exceed 20% of the
Tranche A Borrowing Base.”
 
 
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(j)   The definition of “Tranche A-1 Borrowing Base” contained in Section 1.1
(Definitions) of the Loan and Security Agreement is hereby amended by adding the
following new sentence at the end of such definition:
 
“Notwithstanding the foregoing, in no event shall the Tranche A-1 Real Estate
Amount included in the Tranche A-1 Borrowing Base exceed 20% of the Tranche A-1
Borrowing Base.”
 
(k)   Section 3.1.4 (Interest Rate Not Ascertainable) of the Loan and Security
Agreement is hereby amended by restating such section in its entirety as
follows:
 
“3.1.4      Interest Rate Not Ascertainable.  If in connection with any request
for a LIBOR Loan or a conversion to or continuation thereof, (a) the
Administrative Agent determines that (i) Dollar deposits are not being offered
to banks in the London interbank market for the applicable amount and Interest
Period of such LIBOR Loan, or (ii) adequate and reasonable means do not exist
for determining the Adjusted LIBOR for any requested Interest Period with
respect to a proposed LIBOR Loan or in connection with an existing or proposed
Base Rate Loan (in each case with respect to clause (a)(i) above, “Impacted
Loans”), or (b) the Required Lenders determine that for any reason the Adjusted
LIBOR for any requested Interest Period with respect to a proposed LIBOR Loan
does not adequately and fairly reflect the cost to such Lenders of funding such
Loan, the Administrative Agent will promptly so notify the Borrower and each
Lender and, in the case of clause (b) above, the Required Lenders shall deliver
a certificate to the Borrower setting forth the basis on which such Lenders have
determined that the Adjusted LIBOR for the applicable Interest Period does not
adequately and fairly reflect the cost to such Lenders of funding such proposed
LIBOR Loan and certifying that such Lenders’ determination is not inconsistent
with their treatment of other borrowers generally.  Thereafter, (x) the
obligation of the Lenders to make or maintain LIBOR Loans shall be suspended (to
the extent of the affected LIBOR Loans or Interest Periods), and (y) in the
event of a determination described in the preceding sentence with respect to the
Adjusted LIBOR component of the Base Rate, the utilization of the Adjusted LIBOR
component in determining the Base Rate shall be suspended, in each case until
the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice.  Upon receipt of such notice, the Borrowers may revoke any pending
request for a Borrowing of, conversion to or continuation of LIBOR Loans (to the
extent of the affected LIBOR Loans or Interest Periods) or, failing that, will
be deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.”
 
(l)   Section 5.5.1 (Pre-Default Allocation of Payment) of the Loan and Security
Agreement is hereby amended by adding the following to the end of such section:
 
“Excluded Swap Obligations with respect to any Guarantor shall not be paid with
amounts received from such Guarantor or its assets, but appropriate adjustments
shall be made with respect to payments from other Loan Parties to preserve the
allocation to Obligations otherwise set forth above in this Section 5.5.1.”
 
 
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(m)   Section 5.5.2 (Post-Default Allocation of Payment) of the Loan and
Security Agreement is hereby amended by adding the following to the end of such
section:
 
“Excluded Swap Obligations with respect to any Guarantor shall not be paid with
amounts received from such Guarantor or its assets, but appropriate adjustments
shall be made with respect to payments from other Loan Parties to preserve the
allocation to Obligations otherwise set forth above in this Section 5.5.2.”
 
(n)   Section 8.1 (Borrowing Base Certificates) of the Loan and Security
Agreement is hereby amended by restating the first sentence of such section in
its entirety as follows:
 
“The Borrowers shall deliver to the Agent and each Co-Collateral Agent (and
Agent shall promptly deliver same to Lenders) (i) at all times prior to the
commencement of a Trigger Event Period, not later than the twelfth (12th)
Business Day after the immediately preceding fiscal month end, a Borrowing Base
Certificate prepared as of the close of business of the previous month and (ii)
at all times (x) after the occurrence and during the continuation of an Event of
Default or (y) after the first date on which Excess Availability for five
consecutive Business Days is less than the greater of (i) $65,000,000 or (ii)
12.5% of the lesser of (A) the aggregate Commitments at such time and (B) the
Aggregate Borrowing Base at such time, not later than the last Business Day of
each week, a Borrowing Base Certificate prepared as of the close of business of
the previous week, with such weekly Borrowing Base Certificates (other than
those coinciding with a month end) updated for purchases and sales of Inventory
from the prior week in a manner consistent with the past practices of the
Obligors and reasonably approved by Agent; provided, that at such time as, in
the case of clause (x) above, all Events of Default have been waived or remedied
in accordance with the terms of the Loan Documents and, in the case of clause
(y) above, the date that Excess Availability for a period of 60 consecutive
calendar days exceeds the greater of (1) $65,000,000 or (2) 12.5% of the lesser
of (I) the aggregate Commitments at such time and (II) the Aggregate Borrowing
Base at such time, then the Borrowers shall deliver the Borrowing Base
Certificate pursuant to clause (i) above.”
 
(o)   Section 9.1.27 (Anti-Terrorism) of the Loan and Security Agreement is
hereby amended by restating such section in its entirety as follows:
 
“9.1.27.      Anti-Terrorism.  No Obligor, nor its Subsidiaries, nor, to the
knowledge of any Obligor and its Subsidiaries, any director, officer, employee,
agent, affiliate or representative thereof, is an individual or entity currently
the subject of any Sanctions, nor is any Obligor or any Subsidiary located,
organized or resident in a Designated Jurisdiction.”
 
(p)   Section 10.1.1 (Inspections; Appraisals) of the Loan and Security
Agreement is hereby amended by restating clauses (b)(i) and (b)(ii) of such
section in their entirety as follows:
 
“(i) examinations of any Obligor’s books and records or any other financial or
Collateral matters as Agent deems appropriate, (x) other than those times
described in clause (y), once per Loan Year or (y) at all times during the
twelve (12) month period following any date that Excess Availability for a
period of five (5) consecutive Business Days, is less than 30% of the lesser of
(A) the aggregate Commitments at such time and (B) the Aggregate Borrowing Base
at such time, up to two times per Loan Year; (ii) appraisals of Inventory (x)
other than those times described in clause (y), once per Loan Year or (y) at all
times during the twelve (12) month period following any date that Excess
Availability for a period of five (5) consecutive Business Days, is less than
30% of the lesser of (A) the aggregate Commitments at such time and (B) the
Aggregate Borrowing Base at such time, up to two times per Loan Year;”
 
 
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(q)   Section 10.2.8 (Restrictions on Payment of Certain Debt) of the Loan and
Security Agreement is hereby amended by restating clauses (e)(ii) and (e)(iii)
of such section in their entity as follows:
 
“(ii) Excess Availability on the date of the making of such payment on a pro
forma basis after giving effect to such payment, and projected Excess
Availability on a pro forma basis for the upcoming six month period (after
giving effect to such payment), measured as of the last day of each fiscal month
during such six month period, is, in each case, greater than or equal to 15% of
the lesser of (x) the aggregate Commitments as of the date of such payment and
last day of each fiscal month during such six month period and (y) the Aggregate
Borrowing Base as of the date of such payment and the last day of each fiscal
month during such six month period, (iii) as of the monthly fiscal period most
recently then ended, the Consolidated Fixed Charge Coverage Ratio (on a pro
forma trailing 12 fiscal month basis, giving effect to the making of such
payment, and any Borrowings made in connection therewith, determined as though
such payment and such Borrowings occurred on the first day of the twelve fiscal
month period ended prior to such payment) is greater than or equal to 1.00 to
1.00; provided that this clause (iii) shall not be applicable in the event that
Excess Availability on the date of the making of such payment on a pro forma
basis after giving effect to such payment, and projected Excess Availability on
a pro forma basis for the upcoming six month period (after giving effect to such
payment), measured as of the last day of each fiscal month during such six month
period, is, in each case, greater than or equal to 30% of the lesser of (x) the
aggregate Commitments as of the date of such payment and last day of each fiscal
month during such six month period and (y) the Aggregate Borrowing Base as of
the date of such payment and the last day of each fiscal month during such six
month period and”
 
(r)   The Loan and Security Agreement is hereby amended by inserting the
following new Section 10.4 immediately after Section 10.3:
 
“10.4.      Sanctions.  Use the proceeds of any Borrowing, or lend, contribute
or otherwise make available such proceeds to any Subsidiary, joint venture
partner or other individual or entity, to fund any activities of or business
with any individual or entity, or in any Designated Jurisdiction, that, at the
time of such funding, is the subject of Sanctions, or in any other manner that
will result in a violation by any individual or entity (including any individual
or entity participating in the transaction, whether as Lender, Joint Lead
Arranger, Agent, L/C Issuer, or otherwise) of Sanctions.”
 
(s)   Section 11.1 (Events of Default) of the Loan and Security Agreement is
hereby amended by (i) deleting the “or” in clause (c)(ii) of such section, (ii)
inserting a “,” immediately after 10.2 in such clause and (iii) adding “or 10.4”
immediately after 10.3 in such clause.
 
(t)   The Loan and Security Agreement is hereby amended by inserting following
new Section 14.20 immediately after Section 14.19:
 
 
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“14.20.      Keepwell.  Each Obligor that is a Qualified ECP Guarantor at the
time the Guaranty or the grant of the security interest under the Loan
Documents, in each case, by any Specified Loan Party, becomes effective with
respect to any Swap Obligation, hereby jointly and severally, absolutely,
unconditionally and irrevocably undertakes to provide such funds or other
support to each Specified Loan Party with respect to such Swap Obligation as may
be needed by such Specified Loan Party from time to time to honor all of its
obligations under its Guaranty and the other Loan Documents in respect of such
Swap Obligation (but, in each case, only up to the maximum amount of such
liability that can be hereby incurred without rendering such Qualified ECP
Guarantor’s obligations and undertakings under this Section 14.20 voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer, and not
for any greater amount).  The obligations and undertakings of each Qualified ECP
Guarantor under this Section 14.20 shall remain in full force and effect until
the Obligations have been indefeasibly paid and performed in full.  Each
Qualified ECP Guarantor intends this Section 14.20 to constitute, and this
Section 14.20 shall be deemed to constitute, a guarantee of the obligations of,
and a “keepwell, support, or other agreement” for the benefit of, each Specified
Loan Party for all purposes of the Commodity Exchange Act.”
 
2.   Conditions Precedent.  This Amendment shall become effective as of the date
first written above (the “Second Amendment Closing Date”) upon the satisfaction
of the following conditions precedent:
 
(a)   This Amendment shall have been duly executed and delivered to the Agent by
each of the Borrowers, the Guarantors, the Agent and each of the Lenders.
 
(b)   The Agent shall have received a Borrowing Base Certificate dated as of the
Second Amendment Closing Date, in form and substance reasonably satisfactory to
it and providing a determination of the Tranche A Borrowing Base and the Tranche
A-1 Borrowing Base after giving effect to this Amendment, and the Agent shall be
satisfied that, both before and after giving effect to all extensions of credit
outstanding or to be made on the Second Amendment Closing Date, Excess
Availability under the Loan and Security Agreement, as amended by this
Amendment, shall not be less than $250,000,000.
 
(c)   The Agent shall be satisfied that the Security Documents remain effective
to create in favor of the Agent a legal, valid and enforceable first priority
(subject only to Permitted Liens entitled to priority under Applicable Law)
perfected security interest in and Lien upon the Collateral.
 
(d)   The Agent shall have received a certificate of a duly authorized officer
of each Obligor (with such certification to be in such Person’s capacity as an
officer of such Obligor and not in such Person’s individual capacity), (i)
certifying (x) that such Obligor’s Organic Documents certified by such Obligor
to the Agent on the Closing Date remain in full force and effect, without
amendment (or, if such Organic Documents have been amended, attaching copies
thereof, certified by the Secretary of State or another official of such
Obligor’s jurisdiction of organization), and (y) that an attached copy of
resolutions authorizing execution and delivery of the Amendment is true and
complete, and that such resolutions are in full force and effect, were duly
adopted, have not been amended, modified or revoked, and constitute all
resolutions adopted with respect to this Amendment, and (ii) attaching good
standing or subsistence certificates, as applicable, for such Obligor, issued by
the Secretary of State or other appropriate official of such Obligor’s
jurisdiction of organization.
 
 
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(e)   The Obligors shall have delivered, and shall have caused each Subsidiary
to deliver, each Mortgage amendment necessary to amend the Termination Date
stated in such Mortgage, in form reasonably acceptable to Agent, necessary to
reflect the modifications to the Credit Agreement contemplated hereby.
 
(f)   The Agent shall have received flood zone determinations and, if
applicable, evidence of flood zone insurance for all Real Estate subject to a
Mortgage, in form and substance reasonably acceptable to the Agent.
 
(g)   The Agent shall have received (i) a written opinion of Paul, Weiss,
Rifkind, Wharton & Garrison LLP, on behalf of each Obligor, and (ii) as well as
any relevant local counsel to Obligors, in form and substance reasonably
satisfactory to the Agent relating to the Mortgage amendments (including an
opinion regarding the absence of any conflict between the Loan and Security
Agreement as amended hereby and the Mortgage Loan Debt and the Senior Note
Debt).
 
(h)   The Borrowers shall have paid (i) to the Agent all fees that are due and
payable to the Agent and the Lenders on the Second Amendment Closing Date and
(ii) to such other Person(s) as are entitled thereto, all reasonable and
documented fees and out-of-pocket expenses incurred by the Agent and Lenders on
or prior to the Second Amendment Closing Date (including, without limitation,
all reasonable and documented fees, out-of-pocket charges and disbursements of
counsel to the Agent), accounting, appraisal, consulting and other reasonable
and documented fees and out-of-pocket expenses to the extent invoiced prior to
or on the Second Amendment Closing Date.
 
(i)   Both immediately before, and immediately after giving effect to this
Amendment and transactions hereunder, including all extensions of credit to be
made on the Second Amendment Closing Date, (i) no Default or Event of Default
shall exist and (ii) the representations and warranties set forth in Section 9
of the Loan and Security Agreement shall be true and correct in all material
respects (except that such materiality qualifier shall not be applicable to the
extent that any representation or warranty is already qualified or modified by
materiality in the text thereof) as of the Second Amendment Closing Date, as
though made on and as of such date (except to the extent that such
representation or warranty relates to an earlier date or period, in which case
as of such earlier date or period).
 
(j)   The Agent shall have received a detailed monthly availability forecast
prepared by management of the Borrowers, in a format substantially similar to
that contained in the Borrowing Base Certificate, for the period beginning on
the Second Amendment Closing Date and ending on January 31, 2015.
 
(k)   The Agent shall have received such additional documents, instruments and
information as are customary for transactions of this type as the Agent may
reasonably request to effect the transactions contemplated hereby.
 
 
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3.   Covenants of the Obligors.  To the extent not delivered on or prior to the
Second Amendment Closing Date, each of the Obligors hereby agrees to use
commercially reasonable efforts to deliver, and to cause each Subsidiary to
deliver, to Agent title reports and title insurance date-down endorsements and,
to the extent applicable, me-too endorsements reasonably satisfactory to the
Agent evidencing that the Mortgages remain effective to create in favor of the
Agent a legal, valid and enforceable first priority (subject only to Permitted
Liens entitled to priority under Applicable Law) perfected security interest in
and Lien upon the Collateral encumbered thereby (it being agreed that, to the
extent any such title reports, title insurance date-down endorsements and me-too
endorsements relating to any Mortgage are not delivered within thirty (30) days
of the Second Amendment Closing Date, the Agent may, in its discretion, deem the
Real Estate encumbered by such Mortgage not to be Eligible Real Estate and
otherwise exclude the Collateral encumbered by such Mortgage from the Tranche A
Borrowing Base or Tranche A-1 Borrowing Base, as applicable).  The Borrowers
shall use their commercially reasonable efforts to deliver to the Agent, as
promptly as reasonably possible, evidence satisfactory to the Agent of the
payment of all real estate taxes owed in La Porte County, Indiana by the
landlord of the store located in Michigan City, Indiana (it being agreed that,
to the extent such evidence is not delivered, the Agent may, in the reasonable
exercise of its credit judgment, implement an Availability Reserve in respect of
such tax liabilities).
 
4.   Survival of Representations and Warranties.  All representations and
warranties made in this Amendment or in any other Loan Document shall survive
the execution and delivery of this Amendment.  Such representations and
warranties have been or will be relied upon by the Agent and each Lender,
regardless of any investigation made by the Agent or any Lender or on their
behalf and notwithstanding that the Agent or any Lender may have had notice or
knowledge of any Default at the time of any extension of credit under the Loan
and Security Agreement, and shall continue in full force and effect as long as
any Loan or any other Obligation under the Loan and Security Agreement or any
other Loan Document shall remain unpaid or unsatisfied or any Letter of Credit
shall remain outstanding.
 
5.   Amendment as Loan Document.  This Amendment constitutes a “Loan Document”
under the Loan and Security Agreement.
 
6.   Amendment of Loan and Security Agreement.  On the Second Amendment Closing
Date, this Amendment shall amend the Loan and Security Agreement.  On the Second
Amendment Closing Date, the rights and obligations of the parties evidenced by
the Loan and Security Agreement shall be evidenced by the Loan and Security
Agreement, as amended by this Amendment, and the other Loan Documents, and the
grant of security interest in the Collateral by the relevant Obligors under the
Loan and Security Agreement and the other Loan Documents shall continue under
but as amended by this Amendment, and shall not in any event be terminated,
extinguished or annulled but shall hereafter be governed by the Loan and
Security Agreement, as amended by this Amendment, and the other Loan
Documents.  All references to the Loan and Security Agreement in any Loan
Document or other document or instrument delivered in connection therewith shall
be deemed to refer to the Loan and Security Agreement as amended by this
Amendment.  Nothing contained herein shall be construed as a novation of the
Obligations outstanding under and as defined in the Loan and Security Agreement,
which shall remain in full force and effect, except as modified hereby.
 
 
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7.   Governing Law.  THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, NEW YORK GENERAL OBLIGATIONS LAW SECTIONS 5-1401
AND 5-1402 (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).
 
8.   Execution.  This Amendment may be executed in counterparts, each of which
taken together shall constitute one instrument.  This Amendment may be executed
and delivered by facsimile or electronic transmission (including .pdf file), and
they shall have the same force and effect as manually signed originals.  The
Agent may require confirmation by a manually-signed original, but failure to
request or deliver same shall not limit the effectiveness or any facsimile or
electronic transmission signature.
 
9.   Limited Effect.  This Amendment relates only to the specific matters
expressly covered herein, shall not be considered to be an amendment or waiver
of any rights or remedies that the Agent or any Lender may have under the Loan
and Security Agreement, under any other Loan Document (except as expressly set
forth herein) or under Applicable Law, and shall not be considered to create a
course of dealing or to otherwise obligate in any respect the Agent or any
Lender to execute similar or other amendments or waivers or grant any amendments
or waivers under the same or similar or other circumstances in the future.
 
10.   Ratification by Guarantors.  Each of the Guarantors acknowledges that its
consent to this Amendment is not required, but each of the undersigned
nevertheless does hereby agree and consent to this Amendment and to the
documents and agreements referred to herein.  Each of the Guarantors agrees and
acknowledges that (i) notwithstanding the effectiveness of this Amendment, such
Guarantor’s Guaranty shall remain in full force and effect without modification
thereto and (ii) nothing herein shall in any way limit any of the terms or
provisions of such Guarantor’s Guaranty or any other Loan Document executed by
such Guarantor (as the same may be amended from time to time), all of which are
hereby ratified, confirmed and affirmed in all respects.  Each of the Guarantors
hereby agrees and acknowledges that no other agreement, instrument, consent or
document shall be required to give effect to this Section 10.  Each of the
Guarantors hereby further acknowledges that the Borrowers, the Agent and any
Lender may from time to time enter into any further amendments, modifications,
terminations and/or amendments of any provisions of the Loan Documents without
notice to or consent from such Guarantor and without affecting the validity or
enforceability of such Guarantor’s Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of such Guarantor’s Guaranty.
 
11.   Reaffirmation of Grant of Security Interests, Etc.  Each Obligor hereby
reaffirms its grant to Agent, for the benefit of Secured Parties, of a
continuing security interest in and Lien upon the Collateral of such Obligor of
every kind and nature, whether now owned or hereafter acquired or arising, and
wherever located, all as provided in the Loan and Security Agreement and in the
other Loan Documents, and each Obligor reaffirms that the Obligations are and
shall continue to be secured by the continuing security interest and Lien
granted by such Obligor to the Agent, for the benefit of Secured Parties,
pursuant to the Loan and Security Agreement and the other Loan Documents.
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment to
Second Amended and Restated Loan and Security Agreement to be executed and
delivered as of the date first above written.
 
 

 
BORROWERS:
        THE BON-TON DEPARTMENT STORES, INC.               By: /s/ Keith E.
Plowman   Name: Keith E. Plowman   Title: Executive Vice President and Chief
Financial Officer              
CARSON PIRIE SCOTT II, INC.
              By: /s/ Keith E. Plowman   Name: Keith E. Plowman   Title:
Executive Vice President and Chief Financial Officer              
BON-TON DISTRIBUTION, INC.
              By: /s/ Keith E. Plowman   Name: Keith E. Plowman   Title: 
Executive Vice President and Chief Financial Officer              
MCRIL, LLC
              By: /s/ Keith E. Plowman   Name:  Keith E. Plowman   Title: 
Executive Vice President and Chief Financial Officer              
THE BON-TON STORES OF LANCASTER, INC.
              By: /s/ Keith E. Plowman   Name: Keith E. Plowman    Title:
Executive Vice President and Chief Financial Officer 

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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The following Persons are signatories to this Second Amendment to Second Amended
and Restated Loan and Security Agreement in their capacity as Obligors and not
as Borrowers:
 

 
THE BON-TON STORES, INC.
              By: /s/ Keith E. Plowman   Name:  Keith E. Plowman   Title: 
Executive Vice President and Chief Financial Officer              
THE BON-TON GIFTCO, LLC
              By: /s/ J. Gregory Yawman   Name: J. Gregory Yawman   Title: Vice
President and Secretary

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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BANK OF AMERICA, N.A.,
  as Agent and as Co-Collateral Agent               By: /s/ Andrew Cerussi  
Name: Andrew Cerussi   Title: Senior Vice President

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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GENERAL ELECTRIC CAPITAL
 
CORPORATION, as Co-Collateral Agent
              By: /s/ Charles D. Chiodo   Name: Charles D. Chiodo   Title: Duly
Authorized Signatory

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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BANK OF AMERICA, N.A.,
 
as a Lender
              By: /s/ Andrew Cerussi   Name: Andrew Cerussi   Title: Senior Vice
President

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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CITIZENS BANK OF PENNSYLVANIA,
 
as a Lender and Co-Documentation Agent
              By: /s/ Don Cmar   Name: Don Cmar   Title: Vice President

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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GENERAL ELECTRIC CAPITAL
 
CORPORATION, as a Lender
              By: /s/ Charles D. Chiodo   Name: Charles D. Chiodo   Title: Duly
Authorized Signatory

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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PNC BANK NATIONAL ASSOCIATION,
 
as a Lender
              By: /s/ Brandon Schmoyer   Name: Brandon Schmoyer   Title: Officer

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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SUNTRUST BANK, as a Lender
              By: /s/ Ryan Jones   Name: Ryan Jones   Title: Vice President

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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TD BANK, N.A., as a Lender
              By: /s/ Jang Kim   Name: Jang Kim   Title: Vice President

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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U.S. BANK NATIONAL ASSOCIATION,
  as a Lender               By: /s/ Lisa Freeman   Name: Lisa Freeman   Title:
SVP

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement
 
 

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WELLS FARGO BANK, NATIONAL
 
ASSOCIATION, as a Lender
              By: /s/ Connie Liu   Name: Connie Liu   Title: Director

 
 
Bon-Ton – Second Amendment to Second Amended and Restated Loan and Security
Agreement