UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): January 30, 2013
J. C. PENNEY COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction
of incorporation )
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1-15274
(Commission File No.)
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26-0037077
(IRS Employer
Identification No.)
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6501 Legacy Drive
Plano, Texas
(Address of principal executive offices)
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75024-3698
(Zip code)
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Registrant’s telephone number, including area code:
(972) 431-1000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 1.01
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Entry into a Material Definitive Agreement.
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(a)
On January 30, 2013, J. C. Penney Company, Inc.’s (the “Company”) direct wholly-owned subsidiary J. C. Penney Corporation, Inc. (“JCPenney”) and GE Capital Retail Bank (“GECRB”) entered into an amendment (the “Second Amendment”) to the amended and restated Consumer Credit Card Program Agreement dated as of November 5, 2009, as amended by the First Amendment thereto dated as of October 29, 2010 (the “Agreement”) between JCPenney and GECRB. The Agreement covers the parties’ marketing and servicing alliance for JCPenney’s private label credit card (the “Program”).
The Second Amendment extends the term of the Agreement to January 28, 2017 and increases the financial benefits to be received by JCPenney under the Program, including additional payments from GECRB to JCPenney and enhanced gainshare payments.
The foregoing description of the Second Amendment does not purport to be complete and is qualified in its entirety by reference to the Second Amendment, which is filed as Exhibit 10.1 hereto and incorporated herein by reference.
(b)
On January 31, 2013, the Company, JCPenney and the Company’s indirect wholly-owned subsidiary J. C. Penney Purchasing Corporation (“Purchasing”) (the Company, JCPenney, and Purchasing collectively referred to as the “Loan Parties”) entered into a Third Amendment (the “Amendment”) to the Amended and Restated Credit Agreement dated as of January 27, 2012, among the Loan Parties, the financial institutions named therein as lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, and Wells Fargo Bank, National Association, as LC Agent (as amended, the “Credit Agreement”).
The Amendment increases the aggregate size of the facility to $1.75 billion. A copy of the Amendment is filed herewith as Exhibit 10.2. The foregoing description of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment which is incorporated herein by reference.
Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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The information set forth under Item 1.01(b) above is incorporated herein by reference as if fully set forth herein.
Item 2.04
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Triggering Events That Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement.
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To the extent required by Item 2.04 of Form 8-K, the information contained in Item 8.01 of this Current Report is incorporated by reference herein. As more fully set forth in Item 8.01, the Company does not believe that a triggering event has occurred, or will occur upon the passage of time.
The Company received a letter, dated January 29, 2013, from an attorney claiming to represent holders of more than 50% of the Company’s 7.4% Debentures due 2037 (the “Debentures”). The letter purports to be a Notice of Default under the Indenture dated April 1, 1994, between J. C.
Penney Company, Inc. and U. S. Bank National Association (formerly Bank of America National Trust and Savings Association), as trustee. Despite repeated requests from the Company, the attorney has not identified all of the holders he claims to represent.
The attorney alleges that the Company, by entering into the Credit Agreement and granting a lien on its inventory, violated Section 5.08 of the Indenture, which restricts the Company’s ability to issue, assume or guarantee any notes, bonds, debentures or other similar evidences of indebtedness for money borrowed that are secured by certain property identified in the Indenture without simultaneously granting an equal and ratable security interest to the holders of the Debentures. Under the Credit Agreement, the lenders have a security interest in certain inventory and related current assets of the Company; however, there are not now, nor have there ever been, any loans outstanding under the Credit Agreement, and therefore the Company has not issued indebtedness for money borrowed secured by inventory. Further, Section 5.08 of the Indenture is not a negative covenant as to liens on inventory. The negative covenant extends only to “Principal Property,” a term which is defined in the Indenture as consisting of “real property and tangible personal property owned by the Company . . . constituting a part of any store, warehouse or distribution center.” Inventory does not constitute a part of a store, warehouse, or distribution center.
The Company believes that the allegations in the letter are without merit and that the granting of a security interest in its inventory pursuant to the Credit Agreement, without providing for equal and ratable security for the holders of Debentures, in no way constitutes an event of default under the Indenture. The Company intends to contest such allegations vigorously and has filed a complaint in the Court of Chancery for the State of Delaware seeking injunctive relief and a declaratory judgment that the Company is not in breach of the Indenture.
In the unlikely event the Company is found to be in breach of the Indenture and such breach is not cured within ninety days, then holders of not less than 25% of the principal amount of outstanding Debentures may declare all of the outstanding Debentures to be immediately due and payable. As of Febraury 4, 2013, approximately $326 million in principal amount of the Debentures was outstanding, and approximately $2.868 billion in principal amount of total long-term debt was outstanding under the Company’s indentures that have the same equal and ratable lien covenant. In addition, if the outstanding Debentures are declared due and payable prior to their scheduled maturity, such event would constitute an Event of Default under the Credit Agreement. In the unlikely event that the Company is found to be in breach of the Indenture, the Company believes there are numerous solutions that could be implemented within the ninety-day cure period.
A copy of the press release announcing the Company’s receipt of the letter is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Forward Looking Statements
This Current Report on Form 8-K contains forward-looking statements, including, but not limited to, statements that include words such as “believes,” “intends” or other words of similar import, and statements regarding the allegations described above and the potential consequences of an asserted default under the Indenture. The forward-looking statements are based on the Company’s current expectations and involve risks and uncertainties, including, but not limited to, risks and uncertainties relating to the outcome of any litigation relating to the issue, the Company’s defense, the final interpretation of the Indenture and the Company’s ability to cure any default deemed to have occurred under the Indenture. The Company cautions that actual results could differ materially from the expectations described in the
forward-looking statements. The Company also cautions that undue reliance should not be placed on any of the forward-looking statements, which speak only as of the date of this Current Report. The Company undertakes no responsibility to update any of these forward-looking statements to reflect events or circumstances after the date of this report or to reflect actual outcomes.
Item 9.01
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Financial Statements and Exhibits.
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(d)
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Exhibit 10.1
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Second Amendment dated as of January 30, 2013 to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and GE Capital Retail Bank, as amended and restated as of November 5, 2009 and as amended by the First Amendment thereto dated as of October 29, 2010
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Exhibit 10.2
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Third Amendment dated as of January 31, 2013 to the Amended and Restated Credit Agreement dated as of January 27, 2012 (as amended through the date hereof, the “
Credit Agreement
”), among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc., J. C. Penney Purchasing Corporation, the financial institutions named therein as lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, and Wells Fargo Bank, National Association, as LC Agent
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Exhibit 99.1
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Company News Release issued February 4, 2013
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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J. C. PENNEY COMPANY, Inc.
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By:
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/s/
Janet
Dhillon
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Janet Dhillon
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Executive Vice President,
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General Counsel and Secretary
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Date: February 4, 2013
EXHIBIT INDEX
Exhibit Number
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Description
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10.1
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Second Amendment dated as of January 30, 2013 to Consumer Credit Card Program Agreement by and between J. C. Penney Corporation, Inc. and GE Capital Retail Bank, as amended and restated as of November 5, 2009 and as amended by the First Amendment thereto dated as of October 29, 2010
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10.2
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Third Amendment dated as of January 31, 2013 to the Amended and Restated Credit Agreement dated as of January 27, 2012 (as amended through the date hereof, the “
Credit Agreement
”), among J. C. Penney Company, Inc., J. C. Penney Corporation, Inc., J. C. Penney Purchasing Corporation, the financial institutions named therein as lenders, JPMorgan Chase Bank, N.A., as Administrative Agent, and Wells Fargo Bank, National Association, as LC Agent
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99.1
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Company News Release issued February 4, 2013
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Exhibit 10.1
SECOND AMENDMENT TO
AMENDED AND RESTATED CONSUMER CREDIT CARD PROGRAM
AGREEMENT
This Second Amendment (“Amendment Number Two”) dated as of January 30, 2013, to that certain Consumer Credit Card Program Agreement made as of December 6, 1999, as amended and restated as of November 5, 2009, and as amended as of October 29, 2010, by and between J. C. PENNEY CORPORATION, INC., formerly known as J. C. Penney Company, Inc., a Delaware corporation, with its principal place of business at Plano, Texas, and GE CAPITAL RETAIL BANK, assignee of Monogram Credit Card Bank of Georgia and formerly known as GE Money Bank, with its principal place of business at 170 W. Election Road, Draper, Utah 84020 (the “Agreement”). Capitalized terms used herein without definition shall have the meanings ascribed to them in the Agreement.
WITNESSETH:
WHEREAS, JCPenney and Bank desire to make certain changes to the Agreement, including (i) extending the current Initial Term of the Agreement, (ii) providing for certain payments from Bank and JCPenney, (iii) modifying the gain share provisions of the Agreement, and (iv) modifying certain termination rights.
NOW, THEREFORE, in consideration of the terms and conditions stated herein, and for good and valuable consideration the receipt of which is hereby acknowledged, the parties hereto agree as follows:
I.
Extension of Initial Term.
Bank and JCPenney hereby agree to the following change to the Initial Term of the Agreement.
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A.
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Section 10.1 shall be deleted in its entirety and superseded by the following:
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“10.1
Initial and Renewal Term
. This Agreement shall be effective as of the Effective Date and shall remain in effect until January 28, 2017 (the “Initial Term”) and shall thereafter be automatically renewed for successive two (2) Fiscal Year terms (the “Renewal Term(s)”) unless either party gives the other party at least three hundred sixty (360) days’ notice of its intent not to renew. The parties shall have the additional rights and obligations in respect of renewal set forth in Schedule 10.1.”
II.
Additional Payments to JCPenney.
Bank and JCPenney hereby agree to the following changes to the Agreement to add additional payments from Bank to JCPenney.
A.
Extension Signing Bonus.
Section 4.6 shall be added to the Agreement and read as follows:
“4.6
Extension Signing Bonus
. In connection with the execution of Amendment Number Two, Bank shall pay to JCPenney, the Extension Signing Bonus as defined and set forth in accordance with Schedule 4.6 on the date(s) specified on Schedule 4.6.”
B.
Performance Payments.
Section 4.7 shall be added to the Agreement and read as follows:
“4.7
Performance Payments
. Bank shall pay to JCPenney the Performance Payments as defined and set forth in accordance with Schedule 4.7 on the date(s) specified on Schedule 4.7.”
C.
Growth Incentive Payments.
Section 4.8 shall be added to the Agreement and read as follows:
“4.8
Growth Incentive Payments
. Bank shall pay to JCPenney the Growth Incentive Payments as defined and set forth in accordance with Schedule 4.8 on the date(s) specified on Schedule 4.8.”
D.
Conforming Schedules.
For clarity, Schedules 4.6, 4.7 and 4.8 are attached to this Amendment Number Two and shall be incorporated into the Agreement in their entirety.
III.
Changes to Gain Share.
The parties agree that Schedule 4.3 of the Agreement is replaced with the Amended and Restated Schedule 4.3 attached to this Amendment Number Two. Attachments 1 and 2 to Schedule 4.3 of Amendment Number One shall be replaced by Attachments 1 and 2 that are attached to the Amended and Restated Schedule 4.3 attached to this Amendment Number Two. Attachment 3 to Schedule 4.3 of the Agreement shall be deleted in its entirety. Notwithstanding anything in this Amendment Number Two, this Amendment Number Two shall not affect the gain share amount due to JCPenney for the year 2012 calculated under the version of Schedule 4.3 of the Agreement before this
Amendment Number Two, and any portion of such gain share amount not already paid to JCPenney on the date hereof shall be paid to JCPenney no later than January 31, 2013.
IV.
Changes to Termination Rights.
Bank and JCPenney hereby agree to the following changes in the Agreement to modify their respective termination rights.
A. Elimination of Events of Default.
Sections 9.1(f) and 9.1(g), and Schedules 9.1(f) and 9.1(g), of the Agreement shall be deleted in their entirety and shall have no further force and effect, and neither JCPenney nor Bank shall have any right to declare an Event of Default if the circumstances described in those provisions occur or have occurred.
V.
Additional Changes.
Bank and JCPenney hereby agree to the following additional changes in the Agreement.
A.
Bank Ownership and Use of Bank Portfolio Information.
Section 3.6(c) shall be deleted in its entirety and superseded by the following:
“(c)
Bank Ownership and Use of Bank Portfolio Information
. During the term of this Agreement and thereafter to the extent provided in any of Sections 3.9, 10.4 and 12.1(e), Bank shall have sole ownership rights in Bank Portfolio Information; provided, however, that Bank hereby agrees that its right to use such Bank Portfolio Information, or any other information it receives, creates or maintains in connection with the Program, shall be limited to the creation, ownership, operation and collection of the Accounts, the marketing of Credit Cards and credit features on Accounts, the operation of the Program, and otherwise exercising its rights and performing its obligations under this Agreement, all pursuant to, in accordance with, and as limited by, this Agreement. Bank also may use Bank Portfolio Information in connection with such additional marketing or other activities as may be specifically agreed to from time to time by JCPenney in writing. The information use and transmission limitations set forth in this Section 3.6(c) and in Section 3.6(g) shall survive termination of this Agreement, except to the extent otherwise specified in Sections 3.9, 10.4 and 12.1(e). Notwithstanding anything to the contrary contained herein, Bank may share Cardholder income data across other Bank programs
for the limited purpose of determining whether cardholders on other programs are eligible for a proactive credit line increase. In turn Bank may use income data from other Bank programs to determine whether JCPenney Cardholders are eligible for a proactive credit line increase.”
B.
Liquidation.
Schedule 10.4, in its entirety, is replaced with the revised Schedule 10.4 (attached to this Amendment Number Two).
C.
Review and Monitoring.
Section 12.18(c) shall be added to the Agreement and read as follows:
“(c)
Review and Monitoring
. JCPenney will permit Bank, and hereby authorizes Bank, to review and monitor, on an ongoing basis, the administration and promotion of the Program through anonymous requests to open or utilize credit card accounts under the Program and by other reasonable means,
provided that,
Bank will use reasonable care not to interrupt the normal business operations of JCPenney nor to unduly interfere with JCPenney’s information system processing. Bank will provide JCPenney with the findings of such monitoring on a quarterly basis. Bank will maintain the confidentiality of the findings of such monitoring and disclose them to non-affiliated third parties only for the purposes of its regulatory compliance obligations. JCPenney agrees to cooperate with Bank to implement and maintain measures that are designed to (i) ensure ongoing security and protection of applicant and Cardholder data nonpublic personal information (as defined in the Gramm-Leach-Bliley Act, 15 USC 6801
et seq.
(as the same may be amended from time to time)) and (ii) make sure that the Program complies in all respects with JCPenney’s obligations pursuant to Section 3.6 (i) of this Agreement. Such cooperation shall include without limitation, reviewing that credit-related disclosures are consistent with applicable Bank-provided models and training JCPenney’s team members with respect to measures that are designed to comply with applicable fair lending laws. Bank agrees to assist JCPenney in the development of any such training materials and other applicable compliance procedures. Additionally, JCPenney will, and will use commercially reasonable efforts to cause its vendors, agents and subcontractors to, provide access to Bank or its authorized representative(s), upon reasonable prior notice and during normal business hours, to such information and resources as are reasonably
necessary to confirm such compliance and data security, and will either make (i) changes that Bank reasonably recommends, or, (ii) alternative changes suggested by JCPenney which are agreed to by Bank, with regard to data security of applicant and Cardholder nonpublic personal information and compliance with Applicable Law. The implementation schedule of any such changes shall be discussed and mutually agreed upon between the parties taking into account legal and regulatory considerations. For clarity, the references to data security in this section only apply to nonpublic personal information provided by or on behalf of Bank and nonpublic personal information JCPenney obtains in performing its responsibilities under the Program.”
D. Credit Review Point.
The definition of “Credit Review Point” appearing in Schedule 15.1 of the Agreement is replaced, in its entirety, with the revised definition shown on Schedule 15.1 (attached to this Amendment Number Two).
E.
Applicable Law.
The definition of “Applicable Law” appearing in Section 15.1 of the Agreement is replaced, in its entirety, with the following:
“‘Applicable Law’ means collectively or individually any federal, state or local law, rule, regulation or judicial, governmental or administrative order, decree, ruling, opinion or interpretation relating to or affecting any aspect of the Program, the Accounts established thereunder, the transactions reflected on the Accounts (including with respect to JCPenney and the other Authorized Entities, the Goods and/or Services charged to Accounts) or any of the rights or obligations of the parties under this Agreement, including the Consumer Credit Protection Act, the Equal Credit Opportunity Act, the Truth in Lending Act, the Fair Credit Billing Act, the Fair Credit Reporting Act and the implementing regulations and official commentaries issued thereunder from time to time, and local, state and federal laws and regulations applicable to usury, sales practices, privacy, telephone monitoring, advertising, unfair, deceptive or abusive acts or practices, and marketing.”
F.
Information.
Section 12.27 shall be added to the Agreement and read as follows:
“12.27
Information Provided to Bank
. JCPenney shall provide to Bank the information described in Schedule 12.27.”
Schedule 12.27, attached to this Amendment Number Two, shall be incorporated into the Agreement in its entirety.
VI.
Amendment Number Two Effective Date.
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A.
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This Amendment Number Two shall become effective as of the date it has been executed by both parties, except as provided in section VI.B.
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B.
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The changes set forth in Sections III and IV of this Amendment Number Two shall take effect as of January 1, 2013.
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[Remainder of page intentionally left blank]
VII.
Miscellaneous
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A.
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The execution, delivery and performance of this Amendment Number Two has been duly authorized by all requisite corporate action on the part of JCPenney and Bank and upon execution by all parties, will constitute a legal and binding obligation of each thereof.
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B.
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The Agreement, as amended by this Amendment Number Two, constitutes the entire understanding of the parties with respect to the subject matter thereof. Except as expressly amended hereby, the terms and conditions of the Agreement shall continue and remain in full force and effect. In the event of any conflict between the Agreement and this Amendment Number Two, the terms and conditions of this Amendment Number Two shall govern.
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C.
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The parties hereto agree to execute such other documents and instruments and to do such other and further things as may be necessary or desirable for the execution and implementation of this Amendment Number Two and the consummation of the transactions contemplated hereby and thereby.
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D.
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This Amendment Number Two may be executed in counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute but one agreement. A facsimile or other electronic signature is as valid and binding as an original.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amendment Number Two as of the date set forth above.
J. C. PENNEY CORPORATION, INC.
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GE CAPITAL RETAIL BANK
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By:
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/s/ Ken Hannah
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By:
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/s/ Brian Double
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Title:
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EVP, Chief Financial Officer
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Title:
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Chief Financial Officer
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Exhibit 10.2
THIRD AMENDMENT dated as of January 31, 2013, to the Amended and Restated Credit Agreement dated as of January 27, 2012 (as amended through the date hereof, the “
Credit Agreement
”), among J. C. PENNEY COMPANY, INC., J. C. PENNEY CORPORATION, INC., J. C. PENNEY PURCHASING CORPORATION, the financial institutions named therein as lenders, JPMORGAN CHASE BANK, N.A., as Administrative Agent, and WELLS FARGO BANK, NATIONAL ASSOCIATION, as LC Agent.
Capitalized terms used but not defined herein have the meanings assigned to them in the Credit Agreement, as amended hereby.
WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to extend and have extended credit to the Parent Borrower, Holdings and Purchasing, in each case pursuant to the terms and subject to the conditions set forth therein.
WHEREAS, the Parent Borrower, in accordance with Section 2.22 of the Credit Agreement, desires to increase the Commitments under the Credit Agreement in an aggregate amount not to exceed $250,000,000 (the “
Commitment Increase
”) by obtaining from the Augmenting Lenders party hereto increases of existing Commitments.
WHEREAS, each of the undersigned Augmenting Lenders are willing to provide such Commitments in the amount set forth opposite its name on Schedule A hereto pursuant to the terms and subject to the conditions set forth herein and in the Credit Agreement.
NOW THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and subject to the conditions set forth herein, the parties hereto hereby agree as follows:
SECTION 1.
Commitment Increase.
a)Each of the undersigned Augmenting Lenders agrees that, on and as of the Amendment Effective Date (as defined below), the Commitment of such Augmenting Lender under the Credit Agreement shall increase by the amount set forth opposite its name on Schedule A hereto (such amount, the “
Increased Amount
”).
(b) The undersigned Augmenting Lenders agree to assign, pro rata (in accordance with their share of the Commitment Increase), to any Lender (other than any other Augmenting Lender) a portion of their respective Increased Amount up to an amount equal to such Lender’s Applicable Percentage of the Commitment Increase,
provided
that such Lender shall have provided a written notice to the Administrative Agent of its request to participate in the Commitment Increase within three Business Days following the Amendment Effective Date.
SECTION 2.
Representations and Warranties.
The Parent Borrower, on behalf of itself and each of Holdings and Purchasing, hereby represents and warrants to
the Administrative Agent and to each of the Lenders (including the Augmenting Lenders) that:
(a) This Amendment has been duly authorized by each of the Parent Borrower, Holdings and Purchasing and has been duly executed and delivered by the Parent Borrower and constitutes a legal, valid and binding obligation of the Parent Borrower, Holdings and Purchasing, enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
(b) After giving effect to this Amendment, each of the representations and warranties of the Loan Parties set forth in the Loan Documents is true and correct (or, in the case of any representation or warranty not qualified as to materiality, true and correct in all material respects) on and as of the date hereof, except to the extent such representations and warranties relate to an earlier date, in which case such representations and warranties are true and correct (or, in the case of any representation or warranty not qualified as to materiality, true and correct in all material respects) as of such earlier date.
(c) At the time of and immediately after giving effect to this Amendment, no Default shall have occurred and be continuing.
SECTION 3.
Conditions to Effectiveness.
This Amendment shall become effective, as of the date first above written, on the date (the “
Amendment Effective Date
”) on which each of the following conditions is satisfied:
(a) The Administrative Agent shall have received a notice from the Parent Borrower for delivery to the Lenders specifying the aggregate amount of the increase in Commitments to be effected hereby and the date the Parent Borrower proposes such increase to become effective.
(b) The Administrative Agent (or its counsel) shall have received from the Parent Borrower and each Augmenting Lender party hereto either (i) a counterpart of this Amendment signed on behalf of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy or electronic transmission of a signed signature page of this Amendment) that such party has signed a counterpart of this Amendment.
(c) The Administrative Agent shall have received a favorable written opinion (addressed to the Administrative Agent, the Issuing Banks and the Lenders and dated the Amendment Effective Date) of each of Skadden, Arps, Slate, Meagher & Flom LLP, special New York counsel for the Loan Parties, and Janet Dhillon, General Counsel of Holdings, covering such matters relating to the Loan Parties, the Loan Documents or the Transactions as the Administrative Agent shall reasonably request.
(d) The Administrative Agent shall have received a certificate, dated the Amendment Effective Date and signed by a Financial Officer of the Parent Borrower, confirming compliance with the conditions set forth in paragraphs (a) and (b) of
Section 4.02 of the Credit Agreement (in each case as though a Borrowing were being made on such date, with all references in such Section to a Borrowing being deemed to be references to the increase in Commitments effected hereby) as of the Amendment Effective Date.
The Administrative Agent shall notify the Parent Borrower and the Lenders of the Amendment Effective Date, and such notice shall be conclusive and binding.
SECTION 4.
Credit Agreement.
Except as specifically amended hereby, the Credit Agreement shall continue in full force and effect in accordance with the provisions thereof as in existence on the date hereof. After the date hereof, any reference to the Credit Agreement shall mean the Credit Agreement as amended or modified hereby. This Amendment shall be a Loan Document for all purposes of the Credit Agreement and the other Loan Documents.
SECTION 5.
Applicable Law.
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6.
Counterparts.
This Amendment may be executed in any number of counterparts and by separate parties hereto on separate counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one agreement. Delivery of an executed signature page to this Amendment by facsimile or email transmission shall be effective as delivery of a manually executed counterpart of this Amendment.
SECTION 7.
Expenses.
The Parent Borrower agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment, including the fees, charges and disbursements of Cravath, Swaine & Moore, LLP, counsel for the Administrative Agent.
SECTION 8.
Headings.
The Section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first written above.
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J. C. PENNEY CORPORATION, INC.,
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by:
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/s/ Michael Porter
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Name:
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Michael Porter
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Title:
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Vice President and Treasurer
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JPMORGAN CHASE BANK, N.A., as Lender and as Administrative Agent,
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by:
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/s/ Sarah L. Freedman
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Name:
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Sarah L. Freedman
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Title:
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Executive Director
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[Signature Page to Third Amendment to J. C. Penney Company, Inc. Credit Agreement]
SIGNATURE PAGE TO THE THIRD AMENDMENT TO THE J. C. PENNEY COMPANY, INC. CREDIT AGREEMENT.
Name of Lender: Barclays Bank PLC
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by:
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/s/ Ronnie Glenn
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Name:
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Ronnie Glenn
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Title:
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Vice President
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SIGNATURE PAGE TO THE THIRD AMENDMENT TO THE J. C. PENNEY COMPANY, INC. CREDIT AGREEMENT.
Name of Lender: Wells Fargo Bank, National Association
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by:
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/s/ Danielle Baldinelli
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Name:
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Danielle Baldinelli
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Title:
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Director
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For any Lender requiring a second signature block:
SIGNATURE PAGE TO THE THIRD AMENDMENT TO THE J. C. PENNEY COMPANY, INC. CREDIT AGREEMENT.
Name of Lender:
BANK OF AMERICA, N.A.
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by:
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/s/ Christine Hutchinson
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Name:
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Christine Hutchinson
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Title:
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Director
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For any Lender requiring a second signature block:
Schedule A
Commitments
INSTITUTION
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COMMITMENT
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JPMorgan Chase Bank, N.A.
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$62,500,000
|
Bank of America, N.A.
|
$62,500,000
|
Barclays Bank PLC
|
$62,500,000
|
Wells Fargo Bank, National Association
|
$62,500,000
|
Total
|
$250,000,000
|
Exhibit 99.1
JCPENNEY DECLARES PURPORTED NOTICE OF DEFAULT ON CERTAIN BONDS IS INVALID
Company Seeks Injunctive and Declaratory Relief in Delaware Chancery Court
PLANO, Texas (Feb. 4, 2013)
- J. C. Penney Company, Inc. (“jcpenney”) (NYSE:JCP) announced today that it received a letter dated January 29, 2013 from Brown Rudnick LLP claiming to represent holders of more than 50% of the Company’s 7.4% Debentures due 2037. The letter purports to be a Notice of Default under the Indenture for these Debentures dated April 1, 1994 between J. C. Penney Company, Inc. and U. S. Bank National Association as trustee. The Company strongly believes the Notice of Default is invalid and utterly without merit.
Brown Rudnick LLP alleges that the Company violated the Indenture by entering into an inventory-secured Credit Agreement in January 2012 without providing for equal and ratable security for the Debenture holders. However, the granting of a security interest in inventory pursuant to the Credit Agreement does not constitute an event of default under the Indenture. Pursuant to the Indenture, the negative covenant extends only to “principal property” -- which does not include inventory. Furthermore, the Company has never had any loans outstanding under the Credit Agreement, and because the Indenture only covers “indebtedness for money borrowed,” the Company’s entry into the Credit Agreement would not have triggered the Indenture provision in any case. The Company has publicly disclosed for some 10 years that it has had various undrawn credit facilities secured by inventory with no bondholder allegations of violation of the Indenture.
The Company today filed an action for injunctive and declaratory relief in support of its position in the Court of Chancery of the State of Delaware. The action seeks an order enjoining the trustee from declaring an event of default as well as an order declaring that the Company is not in default of the Indenture governing the Debentures.
Ken Hannah, chief financial officer of jcpenney said, “We believe this notice of default is invalid, completely without merit and is intended to create self-interested trading opportunities in the
market, and we will therefore vigorously defend the interests of jcpenney and all of our constituencies in all appropriate forums.
”
For further information, contact:
Investor Relations
; (972)431.5500
jcpinvestorrelations@jcpenney.com
Public Relations
; (972)431.3400
jcpcorpcomm@jcpenney.com
Corporate Website
ir.jcpenney.com
About jcpenney:
More than a century ago, James Cash Penney founded his company on the principle of the Golden Rule: treat others the way you’d like to be treated – Fair and Square. His legacy continues to this day, as J. C. Penney Company, Inc. (NYSE: JCP) boldly transforms the retail experience across 1,100 stores and jcp.com to become America’s favorite store. Focused on making the customer experience better every day, jcpenney is dreaming up new ways to make customers love shopping again. On every visit, customers will discover great prices every day in a unique Shops environment that features exceptionally curated merchandise, a dynamic presentation and unmatched customer service. For more information, visit us at jcp.com.
This release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which reflect the Company's current views of future events and financial performance, involve known and unknown risks and uncertainties that may cause the Company's actual results to be materially different from planned or expected results. Those risks and uncertainties include, but are not limited to, risks and uncertainties relating to the outcome of any litigation relating to the issue, the Company’s defense, the final interpretation of the Indenture and the Company’s ability to cure any default deemed to have occurred under the Indenture. Investors should take such risks into account when making investment decisions. We do not undertake to update these forward-looking statements as of any future date.
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