FIRST AMENDMENT TO AN AMENDED AND RESTATED EXIT CREDIT AGREEMENT
Exhibit
10.1
FIRST
AMENDMENT TO AN
AMENDED
AND RESTATED EXIT CREDIT AGREEMENT
This FIRST AMENDMENT TO AN AMENDED AND RESTATED EXIT
CREDIT AGREEMENT,
dated as of May 9, 2008 (this “Amendment”), by and
among FOOTSTAR, INC.,
(“Footstar”)
and FOOTSTAR CORPORATION
(“Footstar
Corp.” and, together with Footstar, the “Borrowers”), the
lenders from time to time party thereto (the “Lenders”), BANK OF AMERICA, N.A., as
administrative agent for itself and the Lenders (in such capacity, the “Administrative
Agent”), as swingline lender, as issuing bank and as collateral agent,
modifies certain provisions of the Amended and Restated Exit Credit Agreement,
dated as of February 7, 2006 (as amended and in effect from time to time, the
“Credit
Agreement”), by and among the Borrowers, the Lenders, the Administrative
Agent and GENERAL
ELECTRIC CAPITAL CORPORATION, as syndication agent. Terms not
otherwise defined herein which are defined in the Credit Agreement shall have
the same respective meanings herein as therein.
WHEREAS, the Borrowers have
requested that the Administrative Agent and the Lenders extend the Maturity Date
of the Credit Agreement to December 31, 2008 and reduce the Lenders’ Commitment;
and
WHEREAS, the Administrative
Agent and the Lenders have agreed to such extension and reduction as provided
more fully herein below;
WHEREAS, the Borrowers have
informed the Administrative Agent and the Lenders that they would like to
declare and pay a dividend or distribution in favor of their equity holders and
the Lenders have agreed to such declaration and payment provided that no further
dividends or distributions shall be permitted as provided more fully herein
below;
WHEREAS, the Borrowers have
requested certain other amendments to the Credit Agreement and the Lenders agree
to the same as more fully described below, subject to the conditions set forth
below;
NOW THEREFORE, in
consideration of the mutual agreements contained in the Credit Agreement and
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1.1. Amendment
to §1.1 of the Credit Agreement (Defined Terms). §1.1 of the
Credit Agreement is hereby amended by deleting the definition of “Appraisal
Percentage” in its entirety and substituting in lieu thereof the following
definition: “”Appraisal Percentage” shall mean (a) 50%, or (b) if an Inventory
appraisal, conducted by an independent appraiser mutually acceptable to the
Administrative Agent and Borrower, in form and substance similar to the most
recent Inventory appraisal and satisfactory to the Administrative Agent, is
conducted on or after May 7, 2008, then 85% after the date of such
appraisal.”
1.2. Amendment
to §1.1 of the Credit Agreement (Defined Terms). §1.1 of the
Credit Agreement is hereby amended by deleting clause (ii) of the definition of
“Borrowing Base” in its entirety and substituting in lieu thereof the
following: “(ii) the Appraisal Percentage times the sum of
the Appraised
Value of Eligible Inventory (other than Eligible L/C Inventory) and the
Appraised Value of Eligible In-Transit Inventory (and net of applicable
Inventory Reserves); plus”
1.3. Amendment
to §1.1 of the Credit Agreement (Defined Terms). §1.1 of the
Credit Agreement is hereby amended by deleting the definition of “Inventory
Advance Rate” in its entirety.
1.4. Amendment
to §1.1 of the Credit Agreement (Defined Terms). §1.1 of the
Credit Agreement is hereby amended by deleting the definition of “Maturity Date”
in its entirety and substituting in lieu thereof the following definition:
“”Maturity Date” means the earlier to occur of (a) the termination of the Kmart
Agreement in accordance with Article 4.2 of the Kmart Agreement and (b) December
31, 2008.”
1.5. Amendment
to §1.1 of the Credit Agreement (Defined Terms). §1.1 of the Credit Agreement is hereby
amended by deleting the definition of “Required Lenders” in its entirety and
substituting in lieu thereof the following definition: “”Required Lenders”
means, at any time, Lenders having Commitments in excess of 50% of the Total
Commitments, or if the Commitments have been terminated, Lenders whose
percentage of the outstanding Credit Extensions aggregate (after settlement and
repayment of all Swingline Loans by the Lenders and taking into account each
Lender’s Commitment Percentage of the Letter of Credit Outstandings) in excess
of 50% of all such Credit Extensions.”
1.6. Amendment
to §1.1 of the Credit Agreement (Defined Terms). Pursuant to §2.15 of the Credit
Agreement, each of the Borrowers, the Agent and each Lender hereby (a) agrees to
the reduction of the Total Commitment from $100,000,000 to $50,000,000 (b)
waives the requirement that the Borrowers provide prior written notice thereof
as set forth in §2.15 of the Credit Agreement, (c) agrees to the pro-rata
reduction of each Lender’s Commitment, and (d) confirms that all fees and
amounts owing under §2.15 on the date hereof equal $29,105.01. To
give effect to the reduction of the Total Commitment, §1.1 of the
Credit Agreement is hereby amended by deleting the definition of “Total
Commitment” in its entirety and substituting in lieu thereof the following
definition: “”Total Commitment” means the sum of the Commitments of the Lenders
to make Loans in an aggregate amount not to exceed
$50,000,000.”
1.7. Amendment
to §2.6(a)(i) of the Credit Agreement (Letters of Credit). §2.6(a)(i) of the Credit Agreement is
hereby amended by (a) deleting the word “$40,000,000” and (b) replacing it with
the word “$25,000,000”.
1.8. Amendment
to §6.1(e) of the Credit Agreement (Financial Statements and Other
Information). §6.1(e) of the
Credit Agreement is hereby amended by (a) deleting each reference to the word
“$40,000,000” and (b) replacing each such reference with the words “twenty
percent (20%) of the Borrowing Base”.
1.9. Amendment
to §7.5 of the Credit Agreement (Asset Sales; Blocked Sales;
Transfers). §7.5 of the
Credit Agreement is hereby amended by (i) adding the word “and” at the end of
clause (g) in such section 7.5 and (ii) inserting the following new clause (h)
following existing clause (g): “(h) the sale or disposition of any
assets of any Loan Party on the Maturity Date, provided that (i) all
Obligations under the Loan Documents have been paid in full in cash and all Loan
Documents and Commitments thereunder have been terminated before the Maturity
Date or simultaneously with such sale or disposition on the Maturity Date and in
a manner acceptable to the Administrative Agent, and (ii) all Letters of Credit
have been terminated or fully cash collateralized in a manner acceptable to the
issuer thereof.
1.10. Amendment
to §7.6 of the Credit Agreement (Restricted Payments). §7.6 of the
Credit Agreement is hereby amended by deleting clause (a)(iv) thereof in its
entirety and substituting in lieu thereof the following:
“(iv) the
Lead Borrower may declare and pay a dividend or distribution to its shareholders
(1) consisting solely of the net proceeds of a sale of the Borrowers’ corporate
office located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇, or (2) with the prior
written consent of the Administrative Agent at any time and from time to time,
in each case provided that (w) such
dividend or distribution may not be paid using the proceeds of any Loan or other
extension of credit under the Loan Documents, (x) no Default or Event of Default
shall exist on the date that such dividend or distribution is paid or shall
result after giving effect thereto, (y) the Lead Borrower is solvent both before
and after giving effect to such dividend or distribution, and (z) the Lead
Borrower delivers to the Agent an officer’s certificate which certifies the
amount of net proceeds received from such sale, the amount of the dividend or
distribution that will be paid under §7.6(a)(iv) and that such dividend or
distribution is being paid in compliance with this §7.6(a)(iv) (including
clauses (w) through (y) of this proviso);”
1.11. Amendment
to §7.12 of the Credit Agreement (Fixed Charge Coverage Ratio). §7.12 of the
Credit Agreement is hereby amended by (a) deleting the words “twenty percent
(20%)” and (b) replacing them with the words “ten percent (10%)”.
1.12. Amendment
to §8.1(o) of the Credit Agreement (Events of Default). §8.1(o) of the
Credit Agreement is hereby amended by inserting the following proviso at the end
of clause (o): “, provided that any
vote by any Loan Party’s board of directors to adopt a plan of liquidation for
the purposes of satisfying Section 331 of the Internal Revenue Code of 1986 (as
amended) shall not constitute a Default or Event of Default hereunder so long as
such plan contemplates the satisfaction in full of the Obligations (and
appropriate reserves in connection therewith) prior to the dissolution of any
Loan Party or the final liquidating distribution by any Loan Party to its equity
holders (it being hereby agreed and understood that this provision shall in no
way be construed as consenting to, authorizing or permitting any Loan Party to
take any action not otherwise permitted under the Loan Documents in furtherance
of such plan of liquidation);”
1.13. Amendment
to Schedule 1.1(a) of the Credit Agreement (Pricing Grid - Revolving
Loans). Schedule 1.1(a) of the
Credit Agreement is hereby amended by deleting the pricing grid set forth
thereon in its entirety and substituting in lieu thereof the following pricing
grid:
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Level
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Average
Excess Availability
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Applicable
Margin for
Eurodollar
Loans
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Applicable
Margin for
Base
Rate Loans
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I
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Greater
than or equal to $25,000,000
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1.75%
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0.0%
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II
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Greater
than or equal to $17,500,000 and less than $25,000,000
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2.00%
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0.25%
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III
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Greater
than or equal to $10,000,000 and less than $17,500,000
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2.25%
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0.50%
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IV
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Less
than $10,000,000
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2.50%
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0.50%
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1.14. Consent. Notwithstanding
any provision of the Credit Agreement or the Credit Agreement as amended by this
Amendment to the contrary and in reliance on the representations and warranties
contained herein, the Agent and each Lender hereby consent to the declaration
and payment of a dividend or distribution by the Lead Borrower to its
shareholders in an amount less than or equal to $1.00 per
share of common stock of Footstar, Inc., provided that such dividend or
distribution is paid within 60 days of the date hereof, and provided further that (1) such
dividend or distribution may not be paid using the proceeds of any Loan or other
extension of credit under the Loan Documents, (2) no Default or Event of Default
shall exist on the date that such dividend or distribution is paid or shall
result after giving effect thereto, (3) the Lead Borrower is solvent both before
and after giving effect to such dividend or distribution and (4) the Lead
Borrower delivers to the Agent an officer’s certificate which certifies that
such dividend or distribution is being paid in compliance with this §1.14
(including clauses (1) through (3) of this proviso).
1.15. Conditions
to Effectiveness. This Amendment
shall be deemed to be effective upon the Administrative Agent's confirmation of
receipt of the following:
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a)
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a
counterpart signature page to this Amendment duly executed and delivered
by each Loan Party and each Lender under the Credit
Agreement;
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b)
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good
standing certificates from each of the Borrowers and the other Loan
Parties;
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c)
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certificates
of the secretary or assistant secretary of each Loan Party certifying as
to (i) the legal existence of each Loan Party, (ii) resolutions
authorizing the amendments contemplated herein, and (ii) confirmation that
there have been no changes to the charter or bylaws of such Loan Party
since February 7, 2006 and such charters and bylaws remain in full force
and effect, or an Exhibit to such certificate evidencing any such
changes;
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d)
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payment
of fees and amounts owing (i) pursuant to §2.15 of the Credit Agreement in
the aggregate amount of $29,105.01, and (ii) any other fees and
expenses payable on or before the effective date
hereof;
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e)
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a
favorable written opinion (addressed to the Agent and each Lender and
dated the date hereof) of ▇▇▇ ▇▇▇▇▇▇ LLP, with respect to (i) the
enforceability of this Amendment, the Credit Agreement as amended hereby,
and confirming that the security interests granted by the Loan Parties in
favor of the Collateral Agent and the Lenders under the Loan Documents is
continuing after giving effect to this Amendment, and (ii) with respect to
each Loan Party, corporate status, authority, due authorization and no
conflicts as well as due execution and delivery of this Amendment;
and
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f)
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a
favorable written opinion (addressed to the Agent and each Lender and
dated the date hereof) of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Corporate Counsel of Footstar,
Inc., with respect to Meldisco K-M Cranston, R.I., Inc.’s corporate
authority, due authorization and lack of
conflicts.
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1.16. Conditions
Subsequent. The agreement by
the Administrative Agent and Lender evidenced hereby is expressly conditioned
upon receipt by the Administrative Agent of a favorable written opinion
(addressed to the Agent and the Lender and dated the date hereof and in form and
substance satisfactory to the Administrative Agent) of Texas counsel (choice of
such counsel to be reasonably acceptable to the Administrative Agent) with
respect to Footstar Corporation’s corporate authority, due authorization and
lack of conflicts, by May 16, 2008. Failure to comply with this
condition subsequent shall render the Administrative Agent’s and Lender’s
agreement hereto ineffective and shall render this Amendment null and
void.
1.17. Borrower
Representations and Warranties. Each of the
Borrowers hereby represents and warrants to the Administrative Agent and the
Lenders as follows:
(a) Representations
and Warranties in the Credit Agreement. The
representations and warranties of each of the Borrowers contained in the Credit
Agreement were true and correct in all material respects as of the date when
made and are true and correct in all material respects on and as of the date
hereof, except to the extent of changes resulting from transactions or events
contemplated or permitted by the Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not reasonably expected to have a Material Adverse Effect, or to
the extent that such representations and warranties relate expressly to an
earlier date.
(b) Ratification,
Etc. Except as expressly amended, modified or waived hereby,
the Credit Agreement and the other Loan Documents, and all documents,
instruments and agreements related thereto, are hereby ratified and confirmed in
all respects and shall continue in full force and effect. The Credit
Agreement shall, together with this Amendment, be read and construed as a single
agreement. All references to the Credit Agreement in the Credit
Agreement, the Loan Documents or any related agreement or instrument shall
hereafter refer to the Credit Agreement subject to this
Amendment.
(c) Authority,
Etc. The execution and delivery by each of the Borrowers of
this Amendment and the performance by such Person of all of its agreements and
obligations under the Credit Agreement subject to this Amendment are within the
corporate, limited partnership or limited liability company authority, as
applicable, of such Person and have been duly authorized by all necessary entity
proceedings on the part of such Person.
(d) Enforceability
of Obligations. This Amendment and the Credit Agreement
subject hereto constitute the legal, valid and binding obligations of each of
the Borrowers enforceable against such Person in accordance with their terms,
except as enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of,
creditors' rights and except to the extent that availability of the remedy of
specific performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefore may be brought.
(e) Solvency. The
Lead Borrower is solvent on the date hereof and will be solvent both before and
after giving effect to the distribution contemplated by §1.14 (Consent)
hereof.
(f) No
Default. No Default or Event of Default has occurred and is
continuing as of the date hereof or will occur after giving effect to the
provisions hereof.
1.18. No
Other Consents or Amendments. Each
Loan Party hereby agrees that, except as expressly provided in this Amendment,
all of the terms and conditions of the Credit Agreement and the other Loan
Documents, expressly including but not limited to the Facility Guaranty or any
other Guaranty securing any obligations arising under the Loan Documents, remain
in full force and effect. Nothing contained in this Amendment shall
(a) be construed to imply a willingness on the part of the Administrative Agent
or the Lenders to grant any similar or other future amendment, waiver or consent
of any of the terms and conditions of the Credit Agreement or the other Loan
Documents, (b) establish a custom or a course of dealing or conduct among the
Administrative Agent, any Lender or any Borrower, or (c) in any way prejudice,
impair or effect any rights or remedies of the Administrative Agent or the
Lenders under the Credit Agreement or the other Loan Documents. The
Facility Guarantors hereby affirm
their agreement to secure the Obligations (as defined in the Facility Guaranty)
pursuant to the Facility Guaranty, after giving effect to this
Amendment.
1.19. Authorization
to Take Further Action. Each Lender hereby agrees that the
Administrative Agent and the Collateral Agent are hereby authorized to take such
further action and shall execute and deliver such additional documents and
instruments as the Administrative Agent may reasonably determine in its sole
discretion are necessary or appropriate to effectuate the terms of this
Amendment. Each Lender also agrees that each of them shall take such
further action and shall execute and deliver such additional documents and
instruments as the Administrative Agent may reasonably request to effectuate the
same.
1.20. Execution
in Counterparts. This Amendment may be executed in any number
of counterparts, each of which shall be deemed an original, but which together
shall constitute one instrument. In proving this Amendment, it shall
not be necessary to produce or account for more than one such counterpart signed
by the party against whom enforcement is sought. Delivery of an
executed signature page of this Amendment by facsimile or other electronic
transmission shall be effective as delivery of a manually executed counterpart
thereof.
1.21. Expenses. Pursuant
to §10.3 of the Credit Agreement, all reasonable out of pocket costs and
expenses incurred by the Administrative Agent in connection with this Amendment,
including the reasonable fees, charges and disbursements of legal counsel for
the Administrative Agent in producing, reproducing and negotiating this
Amendment, will be for the account of the Borrowers whether or not the
transactions contemplated by this Amendment are consummated.
1.22. Miscellaneous.
THIS
AMENDMENT IS
A CONTRACT UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL PURPOSES BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID STATE OF NEW YORK
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF
LAW). The captions in this Amendment are for
convenience of reference only and shall not define or limit the provisions
hereof.
[signature
pages follow]
IN WITNESS WHEREOF, the
parties hereto have executed this Amendment as a document under seal as of the
date first above written.
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FOOTSTAR,
INC.,
as
Lead Borrower and as Borrower
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: Treasurer | |||
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FOOTSTAR,
INC.,
as
Borrower
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: Treasurer | |||
IN WITNESS WHEREOF, the
Facility Guarantors have hereby acknowledged this document under seal as of the
date first written above for the purposes set forth in the last sentence of
§1.18 hereof.
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FOOTSTAR HQ,
LLC,
as
Facility Guarantor
By:
Footstar Corporation, the sole member
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: Treasurer | |||
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MELDISCO
K-M CRANSTON, R.I., INC.
as
Facility Guarantor
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By:
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/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |
| Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ | |||
| Title: Treasurer | |||
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BANK OF AMERICA,
N.A.,
as Administrative Agent, as Swingline Lender and as Issuing Bank |
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By:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |||
| Title: Managing Director | |||
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BANK OF AMERICA,
N.A.,
as
Collateral Agent
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By:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |||
| Title: Managing Director | |||
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BANK OF AMERICA,
N.A.,
as
a Lender
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By:
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/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |
| Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ | |||
| Title: Managing Director | |||