Form 8-K BON TON STORES INC For: Jan 15

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 15, 2016

THE BON-TON STORES, INC.

(Exact name of registrant as specified in its charter)

2801 E. Market Street, York, Pennsylvania 17402

(Address of Principal Executive Offices)

717-757-7660

(Registrant’s Telephone Number, including Area Code)

Not Applicable

(Former Name or Former Address, If Changed Since Last Report)

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:

o                                    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o                                    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o                                    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o                                    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01                                           Entry into a Material Definitive Agreement.

On January 19, 2016, The Bon-Ton Stores, Inc. (the “Parent” and, together with its subsidiaries, the “Company”) issued a press release announcing the retirement of the Company’s remaining mortgage loan facility using borrowings under its revolving credit facility.  The refinancing is described in more detail below, and the full text of the press release is attached hereto as Exhibit 99.1.

Consent and Third Amendment to Second Amended and Restated Loan and Security Agreement

On January 15, 2016, The Bon-Ton Department Stores, Inc. (“Bon-Ton”), Carson Pirie Scott II, Inc., Bon-Ton Distribution, LLC and McRIL, LLC, as borrowers (the “Borrowers”), and The Bon-Ton Stores, Inc. and The Bon-Ton Giftco, LLC (collectively with the Borrowers, the “Obligors”), entered into a Consent and Third Amendment (the “Third Amendment”) to the Second Amended and Restated Loan and Security Agreement, dated as of March 21, 2011 (as amended or supplemented, the “Loan Agreement”), with Bank of America, N.A., as Agent, and certain financial institutions as lenders.

The Third Amendment provided for the joinders of the special purpose entities that had previously participated in the Company’s two mortgage loan facilities, Bonstores Realty One, LLC, Bonstores Holdings One, LLC, Bonstores Realty Two, LLC and Bonstores Holdings Two, LLC (collectively, the “SPEs”), as Obligors under the Loan Agreement.  Pursuant to the amendment, all 18 properties owned by the SPEs became real estate in which security interests were granted under the Loan Agreement.  As a result, the borrowing base availability under the revolving credit facility increased to reflect the addition of the properties.

In connection with the Third Amendment and the aforementioned joinders, Bon-Ton also entered into (a) the Omnibus Joinder Agreement to Loan Documents, by and among certain of the SPEs, as new borrowers, Bon-Ton, as borrower agent, and Bank of America, N.A., as administrative agent and co-collateral agent (the “Borrower Joinder”), (b) the Omnibus Joinder Agreement to Loan Documents, by and among certain of the SPEs, as new guarantors, Bon-Ton, as borrower agent, and Bank of America, N.A., as administrative agent and co-collateral agent (the “Guarantor Joinder”), and (b) the Guaranty by the SPEs, as new guarantors, in favor of Bank of America, N.A., as agent (the “Guaranty”).  The Borrower Joinder joins the SPEs party thereto as borrowers under the Loan Agreement.  The Guarantor Joinder joins the SPEs party thereto as guarantors under the Loan Agreement.  The Guaranty requires that the SPEs guarantee obligations incurred under the Loan Agreement and related loan documents.

The foregoing descriptions of the Third Amendment, the Borrower Joinder, the Guarantor Joinder and the Guaranty are qualified in their entirety by reference to the Third Amendment, the Borrower Joinder, the Guarantor Joinder and the Guaranty, copies of which are included as Exhibits 10.1, 10.2, 10.3 and 10.4 hereto, respectively, and which are incorporated herein by reference.

Supplemental Indentures

Also on January 15, 2016, the Parent designated the SPEs as “Restricted Subsidiaries” under each of (i) the Indenture, dated as of May 28, 2013 (as amended or

2

supplemented, the “2021 Notes Indenture”), governing Bon-Ton’s 8.00% Second Lien Senior Secured Notes due 2021 (the “2021 Notes”), by and among Bon-Ton, the Parent, the other guarantors party thereto and Wells Fargo Bank, National Association, as trustee, and (ii) the Indenture, dated as of July 9, 2012 (as amended or supplemented, the “2017 Notes Indenture” and, together with the 2021 Notes Indenture, the “Indentures”), governing Bon-Ton’s 105/8% Second Lien Senior Secured Notes due 2017 (the “2017 Notes”), by and among Bon-Ton, the Parent, the other guarantors party thereto and Wells Fargo Bank, National Association, as trustee.  The SPEs were previously designated as “Unrestricted Subsidiaries” under the Indentures.

Immediately following the designation of the SPEs as “Restricted Subsidiaries” under the Indentures, Bon-Ton and the SPEs entered into (a) the Fifth Supplemental Indenture to the 2017 Notes Indenture (the “Fifth Supplemental Indenture”), by and among Bon-Ton, the SPEs and Wells Fargo Bank, National Association, as trustee, (b) the Third Supplemental Indenture to the 2021 Notes Indenture (the “Third Supplemental Indenture” and, together with the Fifth Supplemental Indenture, the “Supplemental Indentures”), by and among Bon-Ton, the SPEs and Wells Fargo Bank, National Association, as trustee, and (c) Supplement No. 4 to the Second Lien Security Agreement, by and among Bon-Ton, the SPEs and Wells Fargo Bank, National Association, as trustee and collateral agent (the “Security Agreement Supplement”).  The Supplemental Indentures amended the Indentures to include the SPEs as guarantors under the 2017 Notes and the 2021 Notes.  The Security Agreement Supplement added the SPEs as grantors under the Second Lien Security Agreement, by and among the Issuer, the Parent and the other signatories thereto, dated as of July 9, 2012 (the “Second Lien Security Agreement”).  The Supplemental Indentures were effected pursuant to provisions in the Indentures that permit Bon-Ton and the trustees thereunder to amend the Indentures without notice to or consent of any noteholder in order to add guarantors or any other obligors under the Indentures.

The foregoing descriptions of the Fifth Supplemental Indenture, the Third Supplemental Indenture and the Security Agreement Supplement are qualified in their entirety by reference to the Fifth Supplemental Indenture, the Third Supplemental Indenture and the Security Agreement Supplement, copies of which are included as Exhibits 4.1, 4.2 and 10.4 hereto, respectively, and which are incorporated herein by reference.

Item 1.02                                           Termination of a Material Definitive Agreement.

In connection with the foregoing transactions described under Item 1.01 of this Current Report on Form 8-K, which description is incorporated herein by reference, on January 15, 2016, Bon-Ton borrowed $89.1 million under its revolving credit facility and used such proceeds, together with cash on hand, to immediately repay $103.9 million, including principal, accrued interest, fees and $1.3 million of prepayment penalties, and to satisfy all other outstanding obligations under, and to retire, the Loan Agreement, dated as of March 6, 2006, between Bonstores Realty Two, LLC and Bank of America, N.A.

3

Item 9.01                                           Financial Statements and Exhibits.

(d) Exhibits

4

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: January 19, 2016

5

EXHIBIT 4.1

FIFTH SUPPLEMENTAL INDENTURE

Fifth Supplemental Indenture (this “Supplemental Indenture”), dated as of January 15, 2016, among Bonstores Holdings One, LLC, a Delaware limited liability company, Bonstores Realty One, LLC, a Delaware limited liability company, Bonstores Holdings Two, LLC, a Delaware limited liability company, and Bonstores Realty Two, LLC, a Delaware limited liability company (collectively, the “Guaranteeing Subsidiaries”), each of which is a subsidiary of The Bon-Ton Stores, Inc., a Pennsylvania corporation (or its permitted successor) (the “Parent”), The Bon-Ton Department Stores, Inc., a Pennsylvania corporation (the “Company”), and Wells Fargo Bank, National Association, a national banking association (or its permitted successor), as trustee and collateral agent under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company and the other Guarantors party thereto have heretofore executed and delivered to the Trustee an indenture (as amended or supplemented to the date hereof, the “Indenture”), dated as of July 9, 2012, providing for the issuance of the Company’s 105/8% Second Lien Senior Secured Notes due 2017 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall, subject to Article Ten of the Indenture, unconditionally guarantee the Notes on the terms and conditions set forth therein (the “Note Guarantee”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the Guaranteeing Subsidiaries and the Trustee agree as follows for the equal and ratable benefit of the Holders of the Notes:

1.                                      Capitalized Terms.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2.                                      Agreement to Guarantee.

(a)                                 Subject to Article Ten of the Indenture, the Guaranteeing Subsidiaries fully and unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:

(i)                                     the principal of, premium, if any, and interest and Additional Interest, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest and Additional Interest, if any, on the Notes, if

lawful (subject in all cases to any applicable grace period provided herein), and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full, all in accordance with the terms hereof and thereof; and

(ii)                                  in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same will be promptly paid in full when due in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.  Failing payment when due of any amount so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately.  The Guaranteeing Subsidiaries agree that this is a guarantee of payment and not a guarantee of collection.

(b)                                 The Guaranteeing Subsidiaries hereby agree that, to the maximum extent permitted under applicable law, their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor.

(c)                                  The Guaranteeing Subsidiaries, subject to Section 6.06 of the Indenture, hereby waive diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture.

(d)                                 If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any custodian, trustee, liquidator or other similar official acting in relation to any of the Company or the Guarantors, any amount paid by any of them to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(e)                                  The Guaranteeing Subsidiaries agree that they shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(f)                                   The Guaranteeing Subsidiaries agree that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article Six of the Indenture for the purposes of the Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such Obligations as provided in Article Six of the Indenture, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of the Note Guarantee.

2

(g)                                  The Guaranteeing Subsidiaries shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.

(h)                                 The Guaranteeing Subsidiaries confirm, pursuant to Section 10.02 of the Indenture, that it is the intention of each such Guaranteeing Subsidiary that the Note Guarantee not constitute (i) a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to the Note Guarantee or (ii) an unlawful distribution under any applicable state law prohibiting shareholder distributions by an insolvent subsidiary to the extent applicable to the Note Guarantee.  To effectuate the foregoing intention, the Guaranteeing Subsidiaries and the Trustee hereby irrevocably agree that the obligations of each Guaranteeing Subsidiary will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of each Guaranteeing Subsidiary that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article Ten of the Indenture, result in the obligations of each Guaranteeing Subsidiary under the Note Guarantee not constituting a fraudulent transfer or conveyance or such an unlawful shareholder distribution.

3.                                      Execution and Delivery.  The Guaranteeing Subsidiaries agree that the Note Guarantee shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of the Note Guarantee.

4.                                      Guaranteeing Subsidiaries May Consolidate, Etc., on Certain Terms.  The Guaranteeing Subsidiaries may not sell or otherwise dispose of all or substantially all of their assets to, or consolidate with or merge with or into, any Person other than as set forth in Section 10.04 of the Indenture.

5.                                      Release.  Each Guaranteeing Subsidiary’s Note Guarantee shall be released as set forth in Section 10.05 of the Indenture.

6.                                      No Recourse Against Others.  Pursuant to Section 13.07 of the Indenture, no director, officer, employee, incorporator, stockholder, member, manager or partner of any Guaranteeing Subsidiary, as such, shall have any liability for any obligations of any Guaranteeing Subsidiary under the Notes, the Indenture, this Supplemental Indenture, the Note Guarantees, the Security Documents or the Intercreditor Agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a note waives and releases all such liability.  This waiver and release are part of the consideration for the Note Guarantee.

7.                                      NEW YORK LAW TO GOVERN.  THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

3

8.                                      Counterparts.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.

9.                                      Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

10.                               Trustee.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiaries and the Company.

11.                               FATCA.  The parties to this Supplemental Indenture will treat the Notes as qualifying as a “grandfathered obligation” within the meaning of Treasury regulation section 1.1471-2(b)(2)(i).

[SIGNATURE PAGE FOLLOWS]

4

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

EXHIBIT 4.2

THIRD SUPPLEMENTAL INDENTURE

Third Supplemental Indenture (this “Supplemental Indenture”), dated as of January 15, 2016, among Bonstores Holdings One, LLC, a Delaware limited liability company, Bonstores Realty One, LLC, a Delaware limited liability company, Bonstores Holdings Two, LLC, a Delaware limited liability company, and Bonstores Realty Two, LLC, a Delaware limited liability company (collectively, the “Guaranteeing Subsidiaries”), each of which is a subsidiary of The Bon-Ton Stores, Inc., a Pennsylvania corporation (or its permitted successor) (the “Parent”), The Bon-Ton Department Stores, Inc., a Pennsylvania corporation (the “Company”), and Wells Fargo Bank, National Association, a national banking association (or its permitted successor), as trustee and collateral agent under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company and the other Guarantors party thereto have heretofore executed and delivered to the Trustee an indenture (as amended or supplemented to the date hereof, the “Indenture”), dated as of May 28, 2013, providing for the issuance of the Company’s 8.00% Second Lien Senior Secured Notes due 2021 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiaries shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiaries shall, subject to Article Ten of the Indenture, unconditionally guarantee the Notes on the terms and conditions set forth therein (the “Note Guarantee”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Company, the Guaranteeing Subsidiaries and the Trustee agree as follows for the equal and ratable benefit of the Holders of the Notes:

1.             Capitalized Terms.  Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2.             Agreement to Guarantee.

(a)           Subject to Article Ten of the Indenture, the Guaranteeing Subsidiaries fully and unconditionally guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of the Indenture, the Notes or the obligations of the Company hereunder or thereunder, that:

(i)            the principal of, premium, if any, and interest and Additional Interest, if any, on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium, if any, and interest and Additional Interest, if any, on the Notes, if

lawful (subject in all cases to any applicable grace period provided herein), and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full, all in accordance with the terms hereof and thereof; and

(ii)           in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same will be promptly paid in full when due in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise.  Failing payment when due of any amount so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately.  The Guaranteeing Subsidiaries agree that this is a guarantee of payment and not a guarantee of collection.

(b)           The Guaranteeing Subsidiaries hereby agree that, to the maximum extent permitted under applicable law, their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a Guarantor.

(c)           The Guaranteeing Subsidiaries, subject to Section 6.06 of the Indenture, hereby waive diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture.

(d)           If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any custodian, trustee, liquidator or other similar official acting in relation to any of the Company or the Guarantors, any amount paid by any of them to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

(e)           The Guaranteeing Subsidiaries agree that they shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby.

(f)            The Guaranteeing Subsidiaries agree that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the Obligations guaranteed hereby may be accelerated as provided in Article Six of the Indenture for the purposes of the Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such Obligations as provided in Article Six of the Indenture, such Obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of the Note Guarantee.

2

(g)           The Guaranteeing Subsidiaries shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Note Guarantee.

(h)           The Guaranteeing Subsidiaries confirm, pursuant to Section 10.02 of the Indenture, that it is the intention of each such Guaranteeing Subsidiary that the Note Guarantee not constitute (i) a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to the Note Guarantee or (ii) an unlawful distribution under any applicable state law prohibiting shareholder distributions by an insolvent subsidiary to the extent applicable to the Note Guarantee.  To effectuate the foregoing intention, the Guaranteeing Subsidiaries and the Trustee hereby irrevocably agree that the obligations of each Guaranteeing Subsidiary will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of each Guaranteeing Subsidiary that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article Ten of the Indenture, result in the obligations of each Guaranteeing Subsidiary under the Note Guarantee not constituting a fraudulent transfer or conveyance or such an unlawful shareholder distribution.

3.             Execution and Delivery.  The Guaranteeing Subsidiaries agree that the Note Guarantee shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of the Note Guarantee.

4.             Guaranteeing Subsidiaries May Consolidate, Etc., on Certain Terms.  The Guaranteeing Subsidiaries may not sell or otherwise dispose of all or substantially all of their assets to, or consolidate with or merge with or into, any Person other than as set forth in Section 10.04 of the Indenture.

5.             Release.  Each Guaranteeing Subsidiary’s Note Guarantee shall be released as set forth in Section 10.05 of the Indenture.

6.             No Recourse Against Others.  Pursuant to Section 13.07 of the Indenture, no director, officer, employee, incorporator, stockholder, member, manager or partner of any Guaranteeing Subsidiary, as such, shall have any liability for any obligations of any Guaranteeing Subsidiary under the Notes, the Indenture, this Supplemental Indenture, the Note Guarantees, the Security Documents or the Intercreditor Agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation.  Each Holder of Notes by accepting a note waives and releases all such liability.  This waiver and release are part of the consideration for the Note Guarantee.

7.             NEW YORK LAW TO GOVERN.  THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE.

3

8.             Counterparts.  The parties may sign any number of copies of this Supplemental Indenture.  Each signed copy shall be an original, but all of them together represent the same agreement.

9.             Effect of Headings.  The Section headings herein are for convenience only and shall not affect the construction hereof.

10.          Trustee.  The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiaries and the Company.

11.          FATCA.  The parties to this Supplemental Indenture will treat the Notes as qualifying as a “grandfathered obligation” within the meaning of Treasury regulation section 1.1471-2(b)(2)(i).

[SIGNATURE PAGE FOLLOWS]

4

IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed as of the date first above written.

EXHIBIT 10.1

CONSENT AND THIRD AMENDMENT TO
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

This CONSENT AND THIRD AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of January 15, 2016 (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, as further amended by that certain Second Amendment to Second Amended and Restated Loan and Security Agreement dated as of December 12, 2013 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, LLC, an Illinois limited liability company (“Distribution”), MCRIL, LLC, a Virginia limited liability company (“McRIL” and, together with Bon-Ton, CPS II and Distribution 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 COMPANY (as successor in interest by merger to General Electric Capital Corporation), 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 informed the Agent and the Lenders that they intend to restructure, replace, repay or refinance the existing Debt of Bonstores Holdings Two, LLC and Bonstores Realty Two, LLC (collectively, “CMBS II Entities”), in part, with proceeds of Revolving Credit Loans (the “CMBS Refinancing”).

B.                                    In connection with the CMBS Refinancing, the Borrowers desire (i) to join the SPEs as Borrowers under the Loan and Security Agreement and, substantially concurrently with such joinder, to make an Investment in an amount not to exceed $100,000,000 (the “CMBS II Refinancing Investment”) into the CMBS II Entities and (ii) the option to make the SPE Real Estate Election (as defined herein).

C.                                    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 and consent to the CMBS II Refinancing Investment, as specifically set forth in this Amendment.

D.                                    The undersigned Lenders and the Agent are prepared to amend the Loan and Security Agreement and to consent to the CMBS II Refinancing Investment 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)                                 The defined term “Adjusted LIBOR” set forth in Section 1.1 (Definitions) of the Loan and Security Agreement is hereby amended by inserting the following sentence immediately after the second sentence of such definition:

“If Adjusted LIBOR shall be less than zero, such rate shall be deemed zero for purposes of this Agreement.”

(b)                                 The defined term “Base Rate” set forth in Section 1.1 (Definitions) of the Loan and Security Agreement is hereby amended by inserting the following text immediately after the text “plus 100%” appearing in clause (c) of such definition:

“; and if the Base Rate shall be less than zero, such rate shall be deemed zero for purposes of this Agreement”.

(c)                                  The defined term “Eligible Real Estate” set forth in Section 1.1 (Definitions) of the Loan and Security Agreement is hereby amended by:

(i)             deleting the reference to “Agent” in clause (d) of such definition and inserting “Required Lenders” in lieu thereof; and

(ii)          restating the last sentence of such definition in its entirety as follows:

“For the avoidance of any doubt, Real Estate owned by any SPE shall not be deemed “Eligible Real Estate” prior to the occurrence of the SPE Real Estate Effective Date applicable to such Real Estate.”

(d)                                 The defined term “Eligible Real Estate Conditions” set forth in Section 1.1 (Definitions) of the Loan and Security Agreement is hereby deleted in its entirety.

(e)                                  The defined term “Excluded Tax” set forth in Section 1.1 (Definitions) of the Loan and Security Agreement is hereby amended by (i) deleting the text “Sections 1471 through 1474 of the IRC, or any applicable Treasury regulation promulgated thereunder or published administrative guidance implementing such law” and (ii) inserting the text “FATCA” in lieu thereof.

(f)                                   The defined term “Permitted Asset Disposition” set forth in Section 1.1 (Definitions) of the Loan and Security Agreement is hereby amended by (i) deleting the text “required to be” in clause (l) of such definition (ii) deleting the text of clause (m) of such definition in its entirety and inserting the text “reserved” in lieu thereof and (iii) deleting the text of clause (n) of such definition in its entirety and inserting the text “reserved” in lieu thereof.

(g)                                  The defined term “Related Real Estate Documents” set forth in Section 1.1 (Definitions) of the Loan and Security Agreement is hereby amended by (i) deleting the reference

2

to “Agent” in clause (e) of such definition and inserting “Required Lenders” in lieu thereof, (ii) deleting the “and” immediately before clause (g) of such definition, (iii) deleting the period (“.”) at the end of clause (g) of such definition (iv) and inserting “; and (h) a written opinion of local counsel relating to each Mortgage and with respect to such other matters as Agent may reasonably request, in each case, in form and substance reasonably acceptable to Agent.” in lieu thereof.

(h)                                 Section 1.1 (Definitions) of the Loan and Security Agreement is hereby amended by restating the following definitions contained therein in its entirety as follows:

SPE - means, (a) prior to the SPE Joinder Effective Date, collectively, (i) Bonstores Realty One, LLC, a Delaware limited liability company (“BR1LLC”); (ii) Bonstores Holdings One, LLC, a Delaware limited liability company and the sole member of BR1LLC; (iii) Bonstores Realty Two, LLC, a Delaware limited liability company (“BR2LLC”); (iv) Bonstores Holdings Two, LLC, a Delaware limited liability company and the sole member of BR2LLC, and (b) after the SPE Joinder Effective Date, none (it being understood that there shall be no SPEs after the SPE Joinder Effective Date).

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 (or, for the avoidance of doubt, any portion thereof) utilized in the calculation of the Tranche A-1 Borrowing Base on such date and (y) the Tranche A Real Estate Amount on such date.

(i)                                     Section 1.01 (Definitions) of the Loan and Security Agreement is hereby amended by inserting the following new definitions in the appropriate alphabetical order:

FATCA - means Sections 1471 through 1474 of the IRC, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471 (b)(1) of the IRC and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such sections of the IRC.

SPE Joinder Effective Date - means the date that (i) each of BR1LLC and BR2LLC shall have joined this Agreement as a Borrower and (ii) each of Bonstores Holdings One, LLC, a Delaware limited liability company and Bonstores Holdings Two, LLC, a Delaware limited liability company shall have joined this Agreement as a Guarantor, in each case by executing a joinder agreement substantially in the form of Exhibit H; provided that the Mortgage Loan Debt shall be discharged, and all Liens in respect thereof released, pursuant to payoff arrangements reasonably satisfactory to Agent prior to or substantially concurrently with the joinder of the SPEs as Borrowers or Guarantors, as applicable, hereunder.

SPE Real Estate Effective Date - means each date on which (a) Agent shall have received (i) an SPE Real Estate Election and (ii) a Borrowing Base Certificate reflecting a calculation of Eligible Real Estate for purposes of determining the Tranche A Real Estate Availability Amount and the Tranche A-1 Real Estate Amount, and (b) each of the

3

eligibility criteria set forth in the definition of “Eligible Real Estate” shall be satisfied with respect to the Real Estate owned by the SPEs that is the subject of the applicable SPE Real Estate Election.

SPE Real Estate Election - means an election of the Borrowers, at any time on or after the SPE Joinder Effective Date, to have any Real Estate owned by BR1LLC or BR2LLC as of the Third Amendment Closing Date included in the determination of Eligible Real Estate, as set forth in a written notice of Borrower Agent addressed to Agent, in form and substance reasonably satisfactory to Agent.

Third Amendment Closing Date - January 15, 2016.

(j)                                    Section 1.7 (Special Provisions Relating to The Bon-Ton Stores of Lancaster, Inc.) of the Loan and Security Agreement is hereby deleted in its entirety and in lieu thereof the following new Section 1.7 is inserted:

“1.7                         Borrowing Notices (CashPro).  The parties agree that any Notice of Borrowing, Notice of Conversion/Continuation, and notice of a Swingline Loan borrowing, shall be made on Borrower Agent’s irrevocable notice, which may be given by (A) telephonic or other e-mailed, electronic or internet-based means in form, in each case, acceptable to the Agent and the Borrower Agent, or (B) a written notice; provided that any telephonic notice must be confirmed promptly by delivery to Agent of a written notice executed by a Senior Officer or any other officer or employee of the applicable Obligor so designated by any Senior Officer in a notice to Agent or any other officer or employee of the applicable Obligor designated in or pursuant to an agreement between the applicable Obligor and Agent.  Any document delivered hereunder that is signed by a Senior Officer of an Obligor shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Obligor and such Senior Officer shall be conclusively presumed to have acted on behalf of such Obligor.”

(k)                                 Section 5.9 (Withholding Tax Exemption) of the Loan and Security Agreement is hereby amended by inserting the following new text at the end of such section:

“If a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the IRC, as applicable), such Lender shall deliver to the Borrower Agent and the Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower Agent or the Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the IRC) and such additional documentation reasonably requested by the Borrower Agent or the Agent as may be necessary for the Borrowers and the Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this Section 5.9, “FATCA” shall include any amendments made to FATCA after the date of this Agreement.  For purposes of determining withholding Taxes imposed under the FATCA, from and after the Third

4

Amendment Closing Date, the Obligors and the Agent shall treat (and the Lenders hereby authorize the Agent to treat) the Loans and the Loan Agreement as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation Section 1.1471-2(b)(2)(i).”

(l)                                     Section 7.3 (Real Estate Collateral) of the Loan and Security Agreement is hereby amended by restating such section in its entirety as follows:

“7.3                         Real Estate Collateral.  The Obligations shall be secured by Mortgages upon (x) all Real Estate owned by Obligors described on Schedule 7.3 and (y) all leasehold interests in Real Estate described on Schedule 7.3.  The Mortgages shall be duly recorded, at Borrowers’ expense, in each office where such recording is required to constitute a fully perfected Lien on the Real Estate covered thereby.  If any Obligor acquires (or otherwise desires to mortgage) any fee or leasehold interest in any Real Estate after the Closing Date, the Borrower Agent shall within ten (10) Business Days furnish to Agent a description of any such Real Estate in detail satisfactory to Agent and, upon written request of Agent (or the at the election of the Borrower Agent), the applicable Obligor shall forthwith (but in any event within sixty (60) days), (i) execute, deliver and record a Mortgage sufficient to create a first priority perfected Lien (or, where such Real Estate is subject to Permitted Purchase Money Debt and the documents evidencing such Debt permit Agent to hold a lien junior in priority on such Real Estate, a Lien junior in priority) in favor of Agent on such Real Estate and (ii) deliver all Related Real Estate Documents.  Notwithstanding anything to the contrary in this Section 7.3, the Agent agrees that it shall not request that any Obligor mortgage to the Agent any Real Estate (i) encumbered by Permitted Purchase Money Debt, the terms of which expressly prohibit a Lien junior in priority on such Real Estate or (ii) having a value of less than (x) $5,000,000, individually or (y) $25,000,000, in the aggregate for all such Real Estate.  The Agent may amend Schedule 7.3 from time to time to reflect thereon any Real Estate that constitutes Eligible Real Estate.”

(m)                             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 that is (i) currently the subject of any Sanctions, (ii) included on OFAC’s List of Specially Designated Nationals, HMT’s Consolidated List of Financial Sanctions Targets and the Investment Ban List, or any similar list enforced by any other relevant sanctions authority or (iii) located, organized or resident in a Designated Jurisdiction.”

(n)                                 The Loan and Security Agreement is hereby amended by inserting the following new Section 9.1.28 (Anti-Corruption Laws) immediately after Section 9.1.27 (Anti-Terrorism):

“9.1.28.  Anti-Corruption Laws.  Each Obligor and its Subsidiaries have conducted their businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other

5

jurisdictions, and have instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.”

(o)                                 The Loan and Security Agreement is hereby amended by inserting the following new Section 10.1.15 (Anti-Corruption Laws) immediately after Section 10.1.14 (Operation and Maintenance Plan):

“10.1.15.  Anti-Corruption Laws.  Conduct its businesses in compliance with the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions, and maintain policies and procedures designed to promote and achieve compliance with such laws.”

(p)                                 Section 10.2.23 (Sale-Leaseback Transactions) of the Loan and Security Agreement is hereby amended by,

(i)                                     deleting the following text contained therein: “(x) any such transaction entered into by any SPE or Passive Company where such transaction involves only the assets of such SPE or Passive Company and (y)”;

(ii)                                  replacing the reference to “$75,000,000” therein with a reference to “$150,000,000”; and

(iii)                               deleting the following text from the proviso contained therein: “, in the case of clause (y),”.

(q)                                 The Loan and Security Agreement is hereby amended by inserting the following new Section 10.2.28 (Sanctions) immediately after Section 10.2.27 (Stay, Extension and Usury Laws):

“10.2.28.  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.”

(r)                                    The Loan and Security Agreement is hereby amended by inserting the following new Section 10.2.29 (Anti-Corruption Laws) immediately after new Section 10.2.28 (Sanctions):

“10.2.29.  Anti-Corruption Laws.  Directly or indirectly use the proceeds of any Credit Extension for any purpose which would breach the United States Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010, and other similar anti-corruption legislation in other jurisdictions.”

(s)                                   Section 10.4 (Sanctions) of the Loan and Security Agreement is hereby deleted in its entirety.

6

(t)                                    Section 13.2.4 (Electronic Execution of Assignments) of the Loan and Security Agreement is hereby amended by restating such section in its entirety as follows:

“13.2.4.  Electronic Execution of Assignments and Certain Other Documents.  The words “execute,” “execution,” “signed,” “signature,” and words of like import in or related to any document to be signed in connection with this Agreement and the transactions contemplated hereby (including without limitation Assignment and Assumptions, amendments or other modifications, Notices of Borrowing, notices of Swingline Loan borrowings, waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained herein to the contrary Agent is under no obligation to agree to accept electronic signatures in any form or in any format unless expressly agreed to by Agent pursuant to procedures approved by it.”

(u)                                 Except for the reference contained in the definition of “Existing Credit Agreement,” each reference to “General Electric Capital Corporation” set forth in the Loan and Security Agreement and the other Loan Documents is hereby replaced with a reference to “General Electric Company (as successor in interest by merger to General Electric Capital Corporation).”

2.                                      Amendments to Schedules to Loan and Security Agreement.

(a)                                 Schedule 7.3 (Mortgaged Real Estate) to the Loan and Security Agreement is hereby replaced by Schedule 7.3 (Mortgaged Real Estate) attached hereto as Exhibit A.

(b)                                 Schedule 7.3A (Mortgage Amendments) to the Loan and Security Agreement is hereby deleted in its entirety, together with the related reference to Schedule 7.3A included in the table of contents to the Loan and Security Agreement.

3.                                      Consent.  Notwithstanding any term or provision to the contrary contained in the Loan and Security Agreement, including, without limitation, the restriction contained in Section 10.2.5 of the Loan and Security Agreement, the Lenders hereby consent to the Borrowers making the CMBS II Investment in the CMBS II Entities.

4.                                      Conditions Precedent.  This Amendment shall become effective as of the date first written above (the “Third 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 Required Lenders.

7

(b)                                 The Administrative Agent shall have received such amendments and/or updates to the Related Real Estate Documents as it shall reasonably request in connection with the Loan and Security Agreement.

(c)                                  The Agent shall have received a Borrowing Base Certificate dated as of the Third 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 to any SPE Real Estate Election made on the Third Amendment Closing Date to the extent that the SPE Real Estate Effective Date with respect to such SPE Real Estate Election also occurs on the Third Amendment Closing Date, 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 Third Amendment Closing Date, Excess Availability under the Loan and Security Agreement, as amended by this Amendment, shall not be less than $225,000,000.

(d)                                 The Agent and the Lenders 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.

(e)                                  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.

(f)                                   The Agent shall have received a written opinion of Paul, Weiss, Rifkind, Wharton & Garrison LLP, on behalf of the Borrowers and each of the Guarantors, as well as any relevant local counsel to Obligors, in form and substance reasonably satisfactory to the Agent and each of the Lenders (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).

(g)                                  The Borrowers shall have paid (i) to the Agent all fees to be paid pursuant to that certain Fee Letter, dated as of December 23, 2015, by and among Agent and the Borrowers and (ii) to such other Person(s) as are entitled thereto, all reasonable and documented fees and out-of-pocket expenses to be paid to the Agent and Lenders on the Third 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 Third Amendment Closing Date.

8

(h)                                 Both immediately before, and immediately after giving effect to this Amendment and transactions hereunder, including all extensions of credit to be made on the Third 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 Third 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).

(i)                                     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.

5.                                      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.

6.                                      Amendment as Loan Document.  This Amendment constitutes a “Loan Document” under the Loan and Security Agreement.

7.                                      Amendment of Loan and Security Agreement.  On the Third Amendment Closing Date, this Amendment shall amend the Loan and Security Agreement.  On the Third 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.

8.                                      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).

9

9.                                      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.

10.                               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.

11.                               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 11.  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.

12.                               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.

[Remainder of Page Intentionally Left Blank]

10

IN WITNESS WHEREOF, the parties hereto have caused this Consent and Third Amendment to Second Amended and Restated Loan and Security Agreement to be executed and delivered as of the date first above written.

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

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

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

[Bon-Ton — Consent and Third Amendment to Loan and Security Agreement]

Exhibit A

Schedule 7.3

Mortgaged Real Estate

EXHIBIT 10.2

OMNIBUS JOINDER AGREEMENT TO LOAN DOCUMENTS

This Omnibus Joinder Agreement to Loan Documents (this “Joinder”) is made as of January 15, 2016, by and among:

BONSTORES REALTY ONE, LLC, a Delaware limited liability company, and BONSTORES REALTY TWO, LLC, a Delaware limited liability company (each a “New Borrower”, and collectively, the “New Borrowers”), each with their principal executive offices at 2801 East Market Street, York, PA  17402;

THE BON-TON DEPARTMENT STORES, INC., a Pennsylvania corporation, in its capacity as Borrower Agent (as defined in the Loan Agreement referred to below); and

BANK OF AMERICA, N.A., a national banking association, having a place of business at 100 Federal Street, Boston, Massachusetts 02110, as administrative agent and as co-collateral agent for its own benefit and the benefit of the other Secured Parties (as defined in the Loan Agreement);

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H:

A.            Reference is made to that certain Second Amended and Restated Loan and Security Agreement dated as of March 21, 2011 (as amended, amended and restated, supplemented or otherwise modified and in effect from time to time, the “Loan Agreement”), by and 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, LLC, an Illinois limited liability company (“Distribution”) and McRIL, LLC, a Virginia limited liability company (“McRIL” and together with Bon-Ton, CPS II, Distribution 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”, and each individually, a “Lender”), Bank of America, N.A. (“Bank of America”), a national banking association, as agent for the Lenders (in such capacity, the “Agent”), Bank of America and General Electric Company (as successor in interest by merger to General Electric Capital Corporation), acting as co-collateral agents (in such capacity, the “Co-Collateral Agents”) and the other agents and arrangers from time to time party thereto.  All capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned to such terms in the Loan Agreement.

B.            The New Borrowers are entering into that certain Guaranty dated as of the date hereof, whereby the New Borrowers guarantee to the Agent, for the benefit of the Secured Parties, the full and punctual payment when due and the performance of all of the Obligations.

1

C.            The New Borrowers desire to become party to, and to be bound by the terms of, the Loan Agreement and the other Loan Documents in the same capacity and to the same extent as the Borrowers and the Guarantors thereunder.

D.            Pursuant to the terms of the Loan Agreement, in order for the New Borrowers to become party to the Loan Agreement and the other Loan Documents as “Borrowers”, the New Borrowers and the Borrower Agent are required to execute this Joinder.

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.                                      Joinder and Assumption of Obligations.  Effective as of the date of this Joinder, each of the New Borrowers hereby acknowledges that it has received and reviewed a copy of the Loan Agreement and the other Loan Documents, and hereby:

a.                                      joins in the execution of, and becomes a party to, the Loan Agreement as a “Borrower” and a “Guarantor”, as indicated by its signature below, as if such New Borrower was an original signatory to the Loan Agreement and was expressly named therein;

b.                                      joins in the execution of, and becomes a party to, the Pledge Agreement as a “Company” and, to the extent applicable, a “Subsidiary”, as indicated by its signature below, as if such New Borrower was an original signatory to the Pledge Agreement and was expressly named therein;

c.                                       joins in the execution of, and becomes a party to, the Trademark Security Agreement as an “Assignor”, as indicated by its signature below, as if such New Borrower was an original signatory to the Trademark Security Agreement and was expressly named therein;

d.                                      joins in the execution of, and becomes a party to, the Copyright Security Agreement as a “Grantor”, as indicated by its signature below, as if such New Borrower was an original signatory to the Copyright Security Agreement and was expressly named therein;

e.                                       covenants and agrees to be bound by all covenants, agreements, liabilities and acknowledgments (other than covenants, agreements, liabilities and acknowledgments which specifically relate solely to an earlier date) of a Borrower and a Guarantor under the Loan Agreement and the other Loan Documents, in each case, with the same force and effect as if such New Borrower was a signatory to the Loan Agreement and the other Loan Documents and was expressly named as a Borrower and a Guarantor (however referenced) therein and a party thereto (including, without limitation, (i) the grant of a security interest to the Agent in the Collateral as provided in Section 7.1 of the Loan Agreement and in any other Loan

2

Document and (ii) the joint and several liability under Section 5.10 of the Loan Agreement);

f.                                        assumes and agrees to perform all applicable duties and Obligations of a Borrower and a Guarantor under the Loan Agreement and the other Loan Documents; and

g.                                       joins in the execution of, and becomes a “Borrower” under, each Note, and agrees to be bound by all the respective terms and conditions of each Note in all respects as if such New Borrower was an original “Borrower” signatory thereto and agrees that a copy of this Joinder may be annexed or affixed to any Note to evidence such New Borrower’s execution of such Note as a “Borrower” thereunder.

2.                                      Grant of Security Interest, Etc.  To secure the prompt payment and performance of all Obligations, each New Borrower hereby grants to Agent, for the benefit of the Secured Parties, a continuing security interest in and Lien upon the personal and fixture property, assets and rights (including, without limitation, the Collateral, and all of the assets, property and rights described in Section 7.1 of the Loan Agreement or in any other Loan Document) of such New Borrower of every kind and nature, whether now owned or hereafter acquired or arising, and wherever located to the extent provided by and in accordance with Section 7.1 of the Loan Agreement.

3.                                      Representations and Warranties.  Each New Borrower hereby makes as of the date hereof all representations, warranties and other statements (other than representations, warranties and statements which specifically relate solely to an earlier date) of a Borrower or a Guarantor under the Loan Agreement and the other Loan Documents, in each case, with the same force and effect as if such New Borrower was a signatory to the Loan Agreement and the other Loan Documents and was expressly named as a Borrower and a Guarantor therein.

4.                                      Ratification of Loan Documents.  All of the terms and conditions of the Loan Agreement and of the other Loan Documents shall remain in full force and effect as in effect prior to the date hereof, without releasing any Obligor thereunder or Collateral therefor.

5.                                      Conditions Precedent to Effectiveness.  This Joinder shall not be effective until each of the following conditions precedent have been fulfilled to the satisfaction of the Agent:

a.                                      This Joinder shall have been duly executed and delivered by the respective parties hereto.

b.                                      A Guaranty shall have been duly executed and delivered by the New Borrowers.

c.                                       All action on the part of the New Borrowers and the other Obligors necessary for the valid execution, delivery and performance by each New Borrower of this Joinder and all other documentation, instruments, and agreements required to be executed in connection herewith shall have been duly and effectively taken and

3

evidence thereof reasonably satisfactory to the Agent shall have been provided to the Agent.

d.                                      Each New Borrower shall have delivered each of the following to the Agent, in form and substance reasonably satisfactory to the Agent:

i.                                          Certificate of legal existence and good standing of such New Borrower issued by the Secretary of State of the State of its incorporation or organization.

ii.                                       A certificate of an authorized officer of such New Borrower in respect of the due adoption and continued effectiveness of each corporate resolution adopted in connection with the assumption by such New Borrower of obligations under the Loan Agreement and the other Loan Documents, setting forth the text of each such resolution, and attesting to the true signatures of each Person authorized as a signatory of such New Borrower to any of the Loan Documents, together with true and accurate copies of all Organic Documents of such New Borrower.

iii.                                    Perfection Certificate of such New Borrower in the form delivered by the Obligors on the Closing Date.

iv.                                   Such other documents, agreements and certificates as the Agent may reasonably require in accordance with the Loan Documents.

e.                                       The Agent shall have received a written legal opinion of the Obligors’ counsel addressed to the Agent and the other Lenders, covering such matters relating to the New Borrowers, the Loan Documents and/or the transactions contemplated thereby as the Agent shall reasonably request, it being understood that such opinion shall be substantively similar to the opinion of Obligors’ counsel delivered on the Closing Date pursuant to Section 6.1(g) of the Loan Agreement.

f.                                        The Agent shall have received all documents and instruments, (including UCC financing statements, agreements providing for Agent’s control over Deposit Accounts and Credit Card Notifications), required by law or reasonably requested by the Agent in accordance with the Loan Documents to create or perfect the first priority Lien (subject only to Permitted Liens having priority by operation of Applicable Law) intended to be created under the Loan Documents and all such documents and instruments shall have been so filed, registered or recorded to the reasonable satisfaction of the Agent.

g.                                       All reasonable and documented out-of-pocket expenses incurred by the Agent in connection with the preparation and negotiation of this Joinder and related documents (including the reasonable and documented fees and out-of-pocket expenses of one legal counsel to the Agent) shall have been paid in full by the Borrowers.

4

h.                                      The Agent shall have received copies of policies of insurance, be reasonably satisfied with the amount, types and terms and conditions of all insurance maintained by the New Borrowers and have received certificates of insurance with endorsements naming the Agent, for the benefit of the Secured Parties, as lender’s loss payee or additional insured, as applicable, with respect to each insurance policy required to be maintained with respect to the Collateral and otherwise in form and substance reasonably satisfactory to the Agent and each of the Lenders.

i.                                          The Obligors shall have executed and delivered to the Agent such additional documents, instruments, and agreements as the Agent may reasonably request.

6.                                      Miscellaneous.

a.                                      This Joinder may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument.  Delivery by telecopier or by electronic .pdf copy of an executed counterpart of a signature page to this Joinder shall be effective as delivery of an original executed counterpart of this Joinder.

b.                                      This Joinder expresses the entire understanding of the parties with respect to the transactions contemplated hereby.  No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.  This Joinder constitutes a Loan Document.

c.                                       Any determination that any provision of this Joinder or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this Joinder.

d.                                      THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION).

[SIGNATURE PAGES FOLLOW]

5

IN WITNESS WHEREOF, each of the undersigned has caused this Joinder to be duly executed and delivered by its proper and duly authorized officer as of the date set forth above.

[Bon Ton — Signature Page to Borrower Joinder]

[Bon Ton — Signature Page to Borrower Joinder]

[Bon Ton — Signature Page to Borrower Joinder]

EXHIBIT 10.3

OMNIBUS JOINDER AGREEMENT TO LOAN DOCUMENTS

This Omnibus Joinder Agreement to Loan Documents (this “Joinder”) is made as of January 15, 2016, by and among:

BONSTORES HOLDINGS ONE, LLC, a Delaware limited liability company, and BONSTORES HOLDINGS TWO, LLC, a Delaware limited liability company (each a “New Guarantor”, and collectively, the “New Guarantors”), each with their principal executive offices at 2801 East Market Street, York, PA  17402;

THE BON-TON DEPARTMENT STORES, INC., a Pennsylvania corporation, in its capacity as Borrower Agent (as defined in the Loan Agreement referred to below); and

BANK OF AMERICA, N.A., a national banking association, having a place of business at 100 Federal Street, Boston, Massachusetts 02110, as administrative agent and as co-collateral agent for its own benefit and the benefit of the other Secured Parties (as defined in the Loan Agreement);

in consideration of the mutual covenants herein contained and benefits to be derived herefrom.

W I T N E S S E T H:

A.                                    Reference is made to that certain Second Amended and Restated Loan and Security Agreement dated as of March 21, 2011 (as amended, amended and restated, supplemented or otherwise modified and in effect from time to time, the “Loan Agreement”), by and 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, LLC, an Illinois limited liability company (“Distribution”) and McRIL, LLC, a Virginia limited liability company (“McRIL” and together with Bon-Ton, CPS II, Distribution 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”, and each individually, a “Lender”), Bank of America, N.A. (“Bank of America”), a national banking association, as agent for the Lenders (in such capacity, the “Agent”), Bank of America and General Electric Company (as successor in interest by merger to General Electric Capital Corporation), acting as co-collateral agents (in such capacity, the “Co-Collateral Agents”) and the other agents and arrangers from time to time party thereto.  All capitalized terms used herein, and not otherwise defined herein, shall have the meanings assigned to such terms in the Loan Agreement.

B.                                    The New Guarantors are entering into that certain Guaranty dated as of the date hereof, whereby the New Guarantors guarantee to the Agent, for the benefit of the Secured Parties, the full and punctual payment when due and the performance of all of the Obligations.

1

C.                                    The New Guarantors desire to become party to, and to be bound by the terms of, the Loan Agreement and the other Loan Documents in the same capacity and to the same extent as the Guarantors thereunder.

D.                                    Pursuant to the terms of the Loan Agreement, in order for the New Guarantors to become party to the Loan Agreement and the other Loan Documents as “Guarantors”, the New Guarantors and the Borrower Agent are required to execute this Joinder.

NOW, THEREFORE, in consideration of the foregoing premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.                                      Joinder and Assumption of Obligations.  Effective as of the date of this Joinder, each of the New Guarantors hereby acknowledges that it has received and reviewed a copy of the Loan Agreement and the other Loan Documents, and hereby:

a.                                      joins in the execution of, and becomes a party to, the Loan Agreement as an “Obligor” and a “Guarantor”, as indicated by its signature below, as if such New Guarantor was an original signatory to the Loan Agreement and was expressly named therein;

b.                                      joins in the execution of, and becomes a party to, the Pledge Agreement as a “Company” and, to the extent applicable, a “Subsidiary”, as indicated by its signature below, as if such New Guarantor was an original signatory to the Pledge Agreement and was expressly named therein;

c.                                       joins in the execution of, and becomes a party to, the Trademark Security Agreement as an “Assignor”, as indicated by its signature below, as if such New Guarantor was an original signatory to the Trademark Security Agreement and was expressly named therein;

d.                                      joins in the execution of, and becomes a party to, the Copyright Security Agreement as a “Grantor”, as indicated by its signature below, as if such New Guarantor was an original signatory to the Copyright Security Agreement and was expressly named therein;

e.                                       covenants and agrees to be bound by all covenants, agreements, liabilities and acknowledgments (other than covenants, agreements, liabilities and acknowledgments which specifically relate solely to an earlier date) of a Guarantor under the Loan Agreement and the other Loan Documents, in each case, with the same force and effect as if such New Guarantor was a signatory to the Loan Agreement and the other Loan Documents and was expressly named as a Guarantor (however referenced) therein and a party thereto (including, without limitation, the grant of a security interest to the Agent in the Collateral as provided in Section 7.1 of the Loan Agreement and in any other Loan Document); and

2

f.                                        assumes and agrees to perform all applicable duties and Obligations of a Guarantor under the Loan Agreement and the other Loan Documents.

2.                                      Grant of Security Interest, Etc.  To secure the prompt payment and performance of all Obligations, each New Guarantor hereby grants to Agent, for the benefit of the Secured Parties, a continuing security interest in and Lien upon the personal and fixture property, assets and rights (including, without limitation, the Collateral, and all of the assets, property and rights described in Section 7.1 of the Loan Agreement or in any other Loan Document) of such New Guarantor of every kind and nature, whether now owned or hereafter acquired or arising, and wherever located to the extent provided by and in accordance with Section 7.1 of the Loan Agreement.

3.                                      Representations and Warranties.  Each New Guarantor hereby makes as of the date hereof all representations, warranties and other statements (other than representations, warranties and statements which specifically relate solely to an earlier date) of a Guarantor under the Loan Agreement and the other Loan Documents, in each case, with the same force and effect as if such New Guarantor was a signatory to the Loan Agreement and the other Loan Documents and was expressly named as a Guarantor therein.

4.                                      Ratification of Loan Documents.  All of the terms and conditions of the Loan Agreement and of the other Loan Documents shall remain in full force and effect as in effect prior to the date hereof, without releasing any Obligor thereunder or Collateral therefor.

5.                                      Conditions Precedent to Effectiveness.  This Joinder shall not be effective until each of the following conditions precedent have been fulfilled to the satisfaction of the Agent:

a.                                      This Joinder shall have been duly executed and delivered by the respective parties hereto.

b.                                      A Guaranty shall have been duly executed and delivered by the New Guarantors.

c.                                       All action on the part of the New Guarantors and the other Obligors necessary for the valid execution, delivery and performance by each New Guarantor of this Joinder and all other documentation, instruments, and agreements required to be executed in connection herewith shall have been duly and effectively taken and evidence thereof reasonably satisfactory to the Agent shall have been provided to the Agent.

d.                                      Each New Guarantor shall have delivered each of the following to the Agent, in form and substance reasonably satisfactory to the Agent:

i.                                          Certificate of legal existence and good standing of such New Guarantor issued by the Secretary of State of the State of its incorporation or organization.

3

ii.                                       A certificate of an authorized officer of such New Guarantor in respect of the due adoption and continued effectiveness of each corporate resolution adopted in connection with the assumption by such New Guarantor of obligations under the Loan Agreement and the other Loan Documents, setting forth the text of each such resolution, and attesting to the true signatures of each Person authorized as a signatory of such New Guarantor to any of the Loan Documents, together with true and accurate copies of all Organic Documents of such New Guarantor.

iii.                                    Perfection Certificate of such New Guarantor in the form delivered by the Obligors on the Closing Date.

iv.                                   Such other documents, agreements and certificates as the Agent may reasonably require in accordance with the Loan Documents.

e.                                       The Agent shall have received a written legal opinion of the Obligors’ counsel addressed to the Agent and the other Lenders, covering such matters relating to the New Guarantors, the Loan Documents and/or the transactions contemplated thereby as the Agent shall reasonably request, it being understood that such opinion shall be substantively similar to the opinion of Obligors’ counsel delivered on the Closing Date pursuant to Section 6.1(g) of the Loan Agreement.

f.                                        The Agent shall have received all documents and instruments, (including UCC financing statements, agreements providing for Agent’s control over Deposit Accounts and Credit Card Notifications), required by law or reasonably requested by the Agent in accordance with the Loan Documents to create or perfect the first priority Lien (subject only to Permitted Liens having priority by operation of Applicable Law) intended to be created under the Loan Documents and all such documents and instruments shall have been so filed, registered or recorded to the reasonable satisfaction of the Agent.

g.                                       All reasonable and documented out-of-pocket expenses incurred by the Agent in connection with the preparation and negotiation of this Joinder and related documents (including the reasonable and documented fees and out-of-pocket expenses of one legal counsel to the Agent) shall have been paid in full by the Borrowers.

h.                                      The Agent shall have received copies of policies of insurance, be reasonably satisfied with the amount, types and terms and conditions of all insurance maintained by the New Guarantors and have received certificates of insurance with endorsements naming the Agent, for the benefit of the Secured Parties, as lender’s loss payee or additional insured, as applicable, with respect to each insurance policy required to be maintained with respect to the Collateral and otherwise in form and substance reasonably satisfactory to the Agent and each of the Lenders.

4

i.                                          The Obligors shall have executed and delivered to the Agent such additional documents, instruments, and agreements as the Agent may reasonably request.

6.                                      Miscellaneous.

a.                                      This Joinder may be executed in several counterparts and by each party on a separate counterpart, each of which when so executed and delivered shall be an original, and all of which together shall constitute one instrument.  Delivery by telecopier or by electronic .pdf copy of an executed counterpart of a signature page to this Joinder shall be effective as delivery of an original executed counterpart of this Joinder.

b.                                      This Joinder expresses the entire understanding of the parties with respect to the transactions contemplated hereby.  No prior negotiations or discussions shall limit, modify, or otherwise affect the provisions hereof.  This Joinder constitutes a Loan Document.

c.                                       Any determination that any provision of this Joinder or any application hereof is invalid, illegal or unenforceable in any respect and in any instance shall not affect the validity, legality, or enforceability of such provision in any other instance, or the validity, legality or enforceability of any other provisions of this Joinder.

d.                                      THIS JOINDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK (WITHOUT REGARD TO ANY CONFLICT OF LAWS PRINCIPLES THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION).

[SIGNATURE PAGES FOLLOW]

5

IN WITNESS WHEREOF, each of the undersigned has caused this Joinder to be duly executed and delivered by its proper and duly authorized officer as of the date set forth above.

[Bon Ton — Signature Page to Guarantor Joinder]

[Bon Ton — Signature Page to Guarantor Joinder]

[Bon Ton — Signature Page to Guarantor Joinder]

EXHIBIT 10.4

GUARANTY

This GUARANTY (this “Guaranty”), dated as of January 15, 2016, by the entities signatory hereto (collectively, the “New Guarantors” and each a “New Guarantor”) in favor of (i) Bank of America, N.A., a national banking association, as agent (hereinafter, in such capacity, “Agent”) for itself and the other financial institutions (hereinafter, collectively, the “Lenders”) which from time to time are or may become parties to that certain Second Amended and Restated Loan and Security Agreement dated as of March 21, 2011 (as amended, amended and restated, supplemented or otherwise modified and in effect from time to time, the “Loan Agreement”), by and 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, LLC, an Illinois limited liability company (“Distribution”), McRIL, LLC, a Virginia limited liability company (“McRIL” and together with Bon-Ton, CPS II, Distribution and any other person from time to time a borrower thereunder, collectively, the “Borrowers”), each of other Obligors party thereto, the Lenders, Agent, and the other agents and arrangers from time to time party thereto, (ii) each of the Lenders and (iii) each of the other Secured Parties (as defined in the Loan Agreement).

WHEREAS, the Borrowers, the Guarantors and the New Guarantors are members of a group of related entities, the success of any one of which is dependent in part on the success of the other members of such group;

WHEREAS, each New Guarantor expects to receive substantial direct and indirect benefits from the extensions of credit to the Borrowers by the Lenders pursuant to the Loan Agreement (which benefits are hereby acknowledged);

WHEREAS, pursuant to the Loan Agreement, the Obligors have covenanted to cause each New Guarantor to execute and deliver to Agent, for the benefit of the Secured Parties, a guaranty substantially in the form hereof; and

WHEREAS, each New Guarantor wishes to guarantee the payment and performance of the Obligations (as defined in the Loan Agreement) to Agent, the Lenders and the other Secured Parties as provided herein.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in order to induce the Lenders and Agent to continue to make loans and otherwise extend credit to the Borrowers, the New Guarantors hereby agree with the Lenders, Agent and the other Secured Parties as follows:

1.        Definitions. The term “Obligations” and all other capitalized terms used herein without definition shall have the respective meanings provided therefor in the Loan Agreement.

2.        Guaranty of Payment and Performance. Each of the New Guarantors hereby guarantees to Agent, for the benefit of the Secured Parties, the full and punctual payment when due (whether at stated maturity, by required pre-payment, by acceleration or otherwise), as well as the performance, of all of the Obligations including all such which would become due but for the operation of the automatic stay pursuant to §362(a) of the Bankruptcy Code and the operation of §§502(b) and 506(b) of the Bankruptcy Code. This Guaranty is an absolute, unconditional and continuing guaranty of the full and punctual payment and performance of all of the Obligations and not of their collectibility only and is in no way conditioned upon any requirement that Agent or any other Secured Party first attempt to collect any of the Obligations from any Borrower or any other Obligor or resort to any collateral security or other means of obtaining payment. Payments by the New Guarantors hereunder may be required by Agent on

any number of occasions. All payments by the New Guarantors hereunder shall be made to Agent, in the manner and at the place of payment specified therefor in the Loan Agreement, for the account of the Secured Parties.

3.        New Guarantors’ Agreement to Pay Enforcement Costs, etc. Each New Guarantor further agrees, as the principal obligor and not as a guarantor only, to pay to Agent, on demand, all reasonable and documented out-of-pocket costs, expenses or advances (including court costs and legal expenses) incurred or expended by Agent or any other Secured Party which constitute a part of the Obligations, this Guaranty and the enforcement thereof, together with interest on amounts recoverable under this Section 3 from the time when such amounts become due until payment, whether before or after judgment, at the rate of interest for overdue principal set forth in the Loan Agreement, provided that if such interest exceeds the maximum amount permitted to be paid under Applicable Law, then such interest shall be reduced to such maximum permitted amount.

4.         Waivers by Guarantors; Lender’s Freedom to Act. Each New Guarantor agrees that the Obligations will be paid and performed strictly in accordance with their respective terms, regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights of Agent or any other Secured Party with respect thereto. Each New Guarantor waives promptness, diligence, presentment, demand, protest, notice of acceptance, notice of any Obligations incurred and all other notices of any kind, all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of any Obligor or any other entity or other person primarily or secondarily liable with respect to any of the Obligations, and all suretyship defenses generally. Without limiting the generality of the foregoing, each New Guarantor agrees to the provisions of any instrument evidencing, securing or otherwise executed in connection with any Obligation and agrees that the obligations of such New Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (i) the failure of Agent or any Secured Party to assert any claim or demand or to enforce any right or remedy against any Obligor or any other entity or other person primarily or secondarily liable with respect to any of the Obligations; (ii) any extensions, compromise, refinancing, consolidation or renewals of any Obligation; (iii) any change in the time, place or manner of payment of any of the Obligations or any rescissions, waivers, compromise, refinancing, consolidation or other amendments or modifications of any of the terms or provisions of the Loan Agreement, the Notes, the other Loan Documents or any other agreement evidencing, securing or otherwise executed in connection with any of the Obligations; (iv) the addition, substitution or release of any entity or other person primarily or secondarily liable for any Obligation; (v) the adequacy of any rights which Agent or any other Secured Party may have against any collateral security or other means of obtaining repayment of any of the Obligations; (vi) the impairment of any collateral securing any of the Obligations, including without limitation the failure to perfect or preserve any rights which Agent or any other Secured Party might have in such collateral security or the substitution, exchange, surrender, release, loss or destruction of any such collateral security; or (vii) any other act or omission which might in any manner or to any extent vary the risk of such New Guarantor or otherwise operate as a release or discharge of such New Guarantor, all of which may be done without notice to such New Guarantor.  To the fullest extent permitted by law, each New Guarantor hereby expressly waives any and all rights or defenses arising by reason of (A) any “one action” or “anti-deficiency” law which would otherwise prevent Agent or any other Secured Party from bringing any action, including any claim for a deficiency, or exercising any other right or remedy (including any right of set-off), against such New Guarantor before or after Agent’s or such other Secured Party’s commencement or completion of any foreclosure action, whether judicially, by exercise of power of sale or otherwise, or (B) any other law which in any other way would otherwise require any election of remedies by Agent or any other Secured Party.

2

5.         Unenforceability of Obligations Against Any Obligor. If for any reason any Obligor has no legal existence or is under no legal obligation to discharge any of the Obligations, or if any of the Obligations have become irrecoverable from any Obligor by reason of such Obligor’s insolvency, bankruptcy or reorganization or by other operation of law or for any other reason, this Guaranty shall nevertheless be binding on each New Guarantor to the same extent as if such New Guarantor at all times had been the principal obligor on all such Obligations. In the event that acceleration of the time for payment of any of the Obligations is stayed upon the insolvency, bankruptcy or reorganization of any Obligor, or for any other reason, all such amounts otherwise subject to acceleration under the terms of the Loan Agreement, the Notes, the other Loan Documents or any other agreement evidencing, securing or otherwise executed in connection with any Obligation shall be immediately due and payable by each New Guarantor.

6.         Subrogation; Subordination.

6.1.                       Waiver of Rights Against the Borrowers. Until the final payment and performance in full of all of the Obligations (other than contingent indemnification Obligations with respect to which no claim has been asserted in writing), each New Guarantor shall not exercise, and each New Guarantor hereby waives, any rights against each Obligor arising as a result of payment by such New Guarantor hereunder, by way of subrogation, reimbursement, restitution, contribution or otherwise, and will not prove any claim in competition with Agent or any other Secured Party in respect of any payment hereunder in any bankruptcy, insolvency or reorganization case or proceedings of any nature; each New Guarantor will not claim any setoff, recoupment or counterclaim against any Obligor in respect of any liability of such New Guarantor to any Obligor; and each New Guarantor waives any benefit of and any right to participate in any collateral security which may be held by Agent or any other Secured Party.

6.2.                       Subordination. The payment of any amounts due with respect to any indebtedness of any Obligor for money borrowed or credit received now or hereafter owed to any New Guarantor is hereby subordinated to the prior payment in full of all of the Obligations (other than contingent indemnification Obligations with respect to which no claim has been asserted in writing). Each New Guarantor agrees that, after the occurrence of, and during the continuance of, any Default or Event of Default under the Loan Agreement such New Guarantor will not demand, sue for or otherwise attempt to collect any such indebtedness of any Obligor to such New Guarantor until all of the Obligations (other than contingent indemnification Obligations with respect to which no claim has been asserted in writing) shall have been paid in full. If, notwithstanding the foregoing sentence, any New Guarantor shall collect, enforce or receive any amounts in respect of such indebtedness while any Obligations are still outstanding, such amounts shall be collected, enforced and received by such New Guarantor as trustee for the Secured Parties and be paid over to Agent, for the benefit of the Secured Parties, on account of the Obligations without affecting in any manner the liability of such New Guarantor under the other provisions of this Guaranty.

6.3.                       Provisions Supplemental. The provisions of this Section 6 shall be supplemental to and not in derogation of any rights and remedies of the Secured Parties under any separate subordination agreement which Agent may at any time and from time to time enter into with any Guarantor for the benefit of the Secured Parties.

7.         Security; Setoff. Regardless of the adequacy of any collateral security or other means of obtaining payment of any of the Obligations, each of the Agent and the other Secured Parties is hereby authorized at any time during an Event of Default, without notice to the New Guarantors (any such notice being expressly waived by each New Guarantor) and to the fullest extent permitted by law, to set off and apply such deposits and other sums against the accrued

3

and unpaid obligations of each New Guarantor under this Guaranty, whether or not the Agent or such other Secured Party shall have made any demand under this Guaranty.

8.         Further Assurances. Each New Guarantor agrees that it will from time to time, at the written request of Agent, do all such things and execute all such documents as Agent may consider necessary to give full effect to this Guaranty and to perfect and preserve the rights and powers of the Secured Parties hereunder. Each New Guarantor acknowledges and confirms that such New Guarantor itself has established its own adequate means of obtaining from each Borrower on a continuing basis all information desired by such New Guarantor concerning the financial condition of such Borrower and that such New Guarantor will look to the Borrowers and not to Agent or any other Secured Party in order for such New Guarantor to keep adequately informed of changes in the Borrowers’ financial condition.

9.         Termination; Reinstatement. This Guaranty shall remain in full force and effect until the payment in full, in cash, of all accrued and unpaid principal, interest and fees, and any other Obligations (other than contingent indemnification Obligations with respect to which no claim has been asserted in writing), the payment of any appropriate collateral deposits in connection with other Obligations and the occurrence of the Commitment Termination Date. This Guaranty shall continue to be effective or be reinstated if at any time any payment made or value received with respect to any Obligation is rescinded or must otherwise be returned by Agent or any other Secured Party upon the insolvency, bankruptcy or reorganization of any Obligor, or otherwise, all as though such payment had not been made or value received.

10.  Successors and Assigns. This Guaranty shall be binding upon each New Guarantor, its successors and assigns, and shall inure to the benefit of Agent and the other Secured Parties and their respective successors, transferees and permitted assigns. Without limiting the generality of the foregoing sentence, each Secured Party may, as and to the extent permitted in the Loan Agreement, assign or otherwise transfer the Loan Agreement, the Notes, the other Loan Documents or any other agreement or note held by it evidencing, securing or otherwise executed in connection with the Obligations, or sell participations in any interest therein, to any other entity or other person, and such other entity or other person shall thereupon become vested, to the extent set forth in the agreement evidencing such assignment, transfer or participation, with all the rights in respect thereof granted to such Secured Party herein, all in accordance with Section 13.2 of the Loan Agreement.  No New Guarantor may assign any of its obligations hereunder.

11.  Amendments and Waivers. No amendment or waiver of any provision of this Guaranty nor consent to any departure by any New Guarantor therefrom shall be effective unless the same shall be in writing and signed by Agent with the consent of the Required Lenders and each New Guarantor. No failure on the part of Agent or any other Secured Party to exercise, and no delay in exercising, any right hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right hereunder preclude any other or further exercise thereof or the exercise of any other right.

12.       Notices. All notices, requests and other communications by or to a party hereto shall be made in accordance with Section 14.3 of the Loan Agreement.

13.       Governing Law; Consent to Forum. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, UNLESS OTHERWISE SPECIFIED, 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). EACH NEW GUARANTOR HEREBY CONSENTS TO THE

4

NON-EXCLUSIVE JURISDICTION OF ANY FEDERAL COURT SITTING IN OR WITH JURISDICTION OVER THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY STATE COURT OF THE STATE OF NEW YORK SITTING IN THE COUNTY OF MANHATTAN, IN ANY PROCEEDING OR DISPUTE RELATING IN ANY WAY TO ANY LOAN DOCUMENTS, AND AGREES THAT ANY SUCH PROCEEDING SHALL BE BROUGHT BY IT SOLELY IN ANY SUCH COURT. EACH NEW GUARANTOR IRREVOCABLY WAIVES ALL CLAIMS, OBJECTIONS AND DEFENSES THAT IT MAY HAVE REGARDING SUCH COURT’S PERSONAL OR SUBJECT MATTER JURISDICTION, VENUE OR INCONVENIENT FORUM. Nothing herein shall limit the right of Agent or any other Secured Party to bring proceedings against any Obligor in any other court. Nothing in this Agreement shall be deemed to preclude enforcement by Agent of any judgment or order obtained in any forum or jurisdiction.

14.       Waiver of Jury Trial. To the fullest extent permitted by Applicable Law, each New Guarantor waives (a) the right to trial by jury (which Agent hereby also waives) in any proceeding, claim or counterclaim of any kind relating in any way to this Guaranty; (b) presentment, demand, protest, notice of presentment, default, nonpayment, maturity, release, compromise, settlement, extension or renewal of any commercial paper, accounts, contract rights, documents, instruments, chattel paper and guaranties at any time held by Agent on which a Borrower may in any way be liable, and hereby ratifies anything Agent may do in this regard; (c) notice prior to taking possession or control of any Collateral; (d) any bond or security that might be required by a court prior to allowing Agent to exercise any rights or remedies; (e) the benefit of all valuation, appraisement and exemption laws; (f) any claim against Agent or any other Secured Party, on any theory of liability, for special, indirect, consequential, exemplary or punitive damages (as opposed to direct or actual damages) in any way relating to any Enforcement Action, Obligations, Loan Documents or transactions relating thereto; and (g) notice of acceptance hereof. Each New Guarantor acknowledges that Agent and the other Secured Parties are relying upon the foregoing in their dealings with Borrowers and Guarantors. Each New Guarantor has reviewed the foregoing waivers with its legal counsel and has knowingly and voluntarily waived its jury trial and other rights following consultation with legal counsel. In the event of litigation, this Guaranty may be filed as a written consent to a trial by the court.

16.        Miscellaneous. This Guaranty constitutes the entire agreement of the New Guarantors with respect to the matters set forth herein. The rights and remedies herein provided are cumulative and not exclusive of any remedies provided by law or any other agreement, and this Guaranty shall be in addition to any other guaranty of or collateral security for any of the Obligations. The invalidity or unenforceability of any one or more sections of this Guaranty shall not affect the validity or enforceability of its remaining provisions. Captions are for the ease of reference only and shall not affect the meaning of the relevant provisions. The meanings of all defined terms used in this Guaranty shall be equally applicable to the singular and plural forms of the terms defined. Delivery by telecopier or by electronic .pdf copy of an executed counterpart of a signature page to this Guaranty shall be effective as delivery of an original executed counterpart of this Guaranty.

17.        Contribution. To the extent any New Guarantor makes a payment hereunder in excess of the aggregate amount of the benefit received by such New Guarantor in respect of the extensions of credit under the Loan Agreement (the “Benefit Amount”), then such New Guarantor, after the payment in full, in cash, of all of the Obligations, shall be entitled to recover from each other guarantor of the Obligations such excess payment, pro rata, in accordance with the ratio of the Benefit Amount received by each such other guarantor to the total Benefit Amount received by all guarantors of the Obligations, and the right to such recovery shall be deemed to be an asset and property of such New Guarantor so funding; provided, that all such

5

rights to recovery shall be subordinated and junior in right of payment to the final and undefeasible payment in full in cash of all of the Obligations (other than contingent indemnification Obligations with respect to which no claim has been asserted in writing).

[SIGNATURE PAGES FOLLOW]

6

IN WITNESS WHEREOF, each New Guarantor has caused this Guaranty to be executed and delivered as of the date first above written.

[Bon Ton — Signature Page to Guaranty]

[Bon Ton —Signature Page to Guaranty]

EXHIBIT 10.5

SECURITY AGREEMENT SUPPLEMENT

SUPPLEMENT NO. 4 (this “Supplement”), dated as of January 15, 2016, to the Second Lien Security Agreement, dated as of July 9, 2012, by and among THE BON-TON DEPARTMENT STORES, INC., a Pennsylvania corporation (the “Issuer”), and the other Persons listed on the signature pages thereof (collectively, the “Initial Grantors”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee and Collateral Agent (in its capacity as collateral agent, the “Collateral Agent”) for the Secured Parties.

A.            Reference is made to the indenture, dated as of July 9, 2012 (as amended, amended and restated, extended, renewed, refinanced, supplemented or otherwise modified from time to time, the “Indenture”), by and among the Issuer, each Guarantor (as defined in the Indenture), the Trustee and the Collateral Agent.

B.            Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Indenture and the Security Agreement referred to therein.

C.            The Grantors have entered into the Security Agreement pursuant to the requirements of the Indenture.  Section 6.14 of the Security Agreement provides that certain Persons may become Grantors under the Security Agreement by execution and delivery of an instrument in the form of this Supplement.  The undersigned Persons (each a “New Grantor” and together the “New Grantors”) are executing this Supplement in accordance with the requirements of the Indenture to become Grantors under the Security Agreement as required by the Indenture.

Accordingly, the Collateral Agent and the New Grantors agree as follows:

SECTION 1.  In accordance with Section 6.14 of the Security Agreement, each New Grantor by its signature below becomes a Grantor under the Security Agreement with the same force and effect as if originally named therein as a Grantor and each New Grantor hereby (a) agrees to all the terms and provisions of the Security Agreement applicable to it as a Grantor thereunder and (b) represents and warrants that the representations and warranties made by it as a Grantor thereunder are true and correct on and as of the date hereof.  In furtherance of the foregoing, each New Grantor, as security for the payment and performance in full of the Secured Obligations does hereby create and grant to the Collateral Agent, its successors and assigns, for the benefit of the Secured Parties, their successors and assigns, a security interest in and lien on all of the New Grantor’s right, title and interest in and to the Collateral (as defined in the Security Agreement) of the New Grantor.  Each reference to a “Grantor” in the Security Agreement shall be deemed to include the New Grantors.  The Security Agreement is hereby incorporated herein by reference.

SECTION 2.  Each New Grantor represents and warrants to the Collateral Agent and the other Secured Parties that this Supplement has been duly authorized, executed and delivered by it and constitutes its legal, valid and binding obligation,

enforceable against it in accordance with its terms, except as such enforceability may be limited by Debtor Relief Laws and by general principles of equity.

SECTION 3.  This Supplement may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract.  This Supplement shall become effective when the Collateral Agent shall have received a counterpart of this Supplement that bears the signature of the New Grantors, and the Collateral Agent has executed a counterpart hereof.  Delivery of an executed signature page to this Supplement by facsimile transmission or other electronic communication shall be as effective as delivery of a manually signed counterpart of this Supplement.

SECTION 4.  Each New Grantor hereby represents and warrants that (a) set forth on Schedule I attached hereto is a true and correct schedule of the Pledged Collateral and (b) set forth on the signature page hereto is the true and correct legal name of the New Grantor, its jurisdiction of formation and the location of its chief executive office.

SECTION 5.  Except as expressly supplemented hereby, the Security Agreement shall remain in full force and effect.

SECTION 6.  THIS SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

SECTION 7.  In case any one or more of the provisions contained in this Supplement should be held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and in the Security Agreement shall not in any way be affected or impaired thereby (it being understood that the invalidity of a particular provision in a particular jurisdiction shall not in and of itself affect the validity of such provision in any other jurisdiction).  The parties hereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.

SECTION 8.  All communications and notices hereunder shall be in writing and given as provided in Section 6.01 of the Security Agreement.

SECTION 9.  Each New Grantor agrees to reimburse the Collateral Agent for its fees and reasonable out-of-pocket expenses in connection with this Supplement, including the reasonable fees, other charges and disbursements of counsel for the Collateral Agent.

[Remainder of Page Intentionally Blank]

IN WITNESS WHEREOF, the New Grantors and the Collateral Agent have duly executed this Supplement to the Security Agreement as of the day and year first above written.

[Signature Page to Security Agreement Supplement]

[Signature Page to Security Agreement Supplement]

SCHEDULE I
TO EXHIBIT I TO THE SECOND LIEN SECURITY AGREEMENT

Pledged Equity

Pledged Debt

EXHIBIT 99.1

N E W S     R E L E A S E

THE BON-TON STORES, INC. ANNOUNCES RETIREMENT OF

REMAINING MORTGAGE LOAN FACILITY

York, PA, January 19, 2016 — The Bon-Ton Stores, Inc. (NASDAQ: BONT) today announced that, effective as of January 15, 2016,  it has retired its remaining mortgage loan facility due in April using borrowings under the Company’s $830 million revolving credit facility.  The mortgage loan facility had principal outstanding of $102.4 million and was secured by 12 properties.  In June of 2015, the Company retired the first of its two mortgage loan facilities in the amount of $104.5 million. The consummation of these two transactions fully satisfies all obligations pursuant to the Company’s aggregate mortgage loan facility entered into on March 6, 2006.

To facilitate the transaction, the Company’s revolving credit facility was amended to include the special purpose entities (“SPEs”) that had previously participated in the Company’s two mortgage loan facilities.  Pursuant to the amendment, all 18 properties owned by the SPEs became real estate in which security interests were granted under the revolving credit facility.  As a result, the borrowing base availability under the revolving credit facility increased to reflect the addition of the properties.

Kathryn Bufano, President and Chief Executive Officer, commented, “We were able to retire our remaining mortgage facility through our recent proactive pursuit of increased borrowing capacity under our revolving credit facility.  That increased capacity and the granting of security interests in the 18 owned properties afforded us the flexibility to utilize our revolver for retirement of the mortgage facility while maintaining sufficient liquidity to effectively manage our business and fund strategic initiatives to position us for long-term profitable growth.”

In conjunction with the early termination of the mortgage loan facility, the Company will pay $1.3 million to satisfy the make-whole provision of the agreement.

About The Bon-Ton Stores, Inc.

The Bon-Ton Stores, Inc., with corporate headquarters in York, Pennsylvania and Milwaukee, Wisconsin, operates 270 stores, which includes nine furniture galleries and four clearance centers, in 26 states in the Northeast, Midwest and upper Great Plains under the Bon-Ton, Bergner’s, Boston Store, Carson’s, Elder-Beerman, Herberger’s and Younkers nameplates.  The stores offer a broad assortment of national and private brand fashion apparel and accessories for women, men and children, as well as cosmetics and home furnishings.  For further information, please visit the investor relations section of the Company’s website at http://investors.bonton.com.

Cautionary Note Regarding Forward-Looking Statements

Certain information included in this press release contains statements that are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which may be identified by words such as “may,” “could,” “will,” “plan,” “expect,” “anticipate,” “estimate,” “project,” “intend” or other similar expressions and include the Company’s fiscal 2015 guidance, involve important risks and uncertainties that could significantly affect results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by or on behalf of the Company.   Factors that could cause such differences include, but are not limited to: risks related to retail businesses generally; a significant and prolonged deterioration of general economic conditions which could negatively impact the Company in a number of ways, including the potential write-down of the current valuation of intangible assets and deferred taxes; risks related to the Company’s proprietary credit card program; potential increases in pension obligations; consumer spending patterns, debt levels, and the availability and cost of consumer credit; additional competition from existing and new competitors; inflation; deflation; changes in the costs of fuel and other energy and transportation costs; weather conditions that could negatively impact sales; uncertainties associated with expanding or remodeling existing stores; the ability to attract and retain qualified management; the dependence upon relationships with vendors and their factors; a data security breach or system failure; the ability to reduce or control SG&A expenses, including initiatives to reduce expenses and improve efficiency; operational disruptions; unsuccessful marketing initiatives; the ability to expand our capacity and improve efficiency through our new eCommerce fulfillment center; changes in, or the failure to successfully implement, our key strategies, including initiatives to improve our merchandising, marketing and operations; adverse outcomes in litigation; the incurrence of unplanned capital expenditures; the ability to obtain financing for working capital, capital expenditures and general corporate purposes; the impact of regulatory requirements including the Health Care Reform Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act; the inability or limitations on the Company’s ability to favorably adjust the valuation allowance on deferred tax assets; and the financial condition of mall operators.  Additional factors that could cause the Company’s actual results to differ from those contained in these forward-looking statements are discussed in greater detail under Item 1A of the Company’s Form 10-K filed with the Securities and Exchange Commission.