Second Amendment to Credit Agreement among Footstar, Inc., Footstar Corporation, and Lenders

Summary

This amendment updates the existing Credit Agreement dated May 25, 2000, between Footstar, Inc., Footstar Corporation, several banks, and their agents. The amendment revises definitions, allows for certain new types of debt and liens, and clarifies the process for incurring additional debt. It also confirms that all security documents remain in effect. The amendment becomes effective once specific conditions are met, including delivery of required documents and approvals from the involved parties.

EX-10.14.B 4 file003.txt SECOND AMENDMENT TO CREDIT AGREEMENT Exhibit 10-14(b) SECOND AMENDMENT TO CREDIT AGREEMENT THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as of June 19, 2001 by and among FOOTSTAR, INC. and FOOTSTAR CORPORATION (the "Borrowers"); the financial institutions which are now, or in accordance with Section 9.06 of the Credit Agreement (hereinafter described) hereafter become, parties to the Credit Agreement by execution of the signature pages to the Credit Agreement or otherwise (collectively, the "Banks" and each individually, a "Bank"); FLEET NATIONAL BANK, as administrative agent ("Administrative Agent") for the Banks (in such capacity as Administrative Agent, together with its successors and assigns in such capacity, the "Agent"); FIRST UNION NATIONAL BANK, as syndication agent (in such capacity, together with its successors and assigns in such capacity, the "Syndication Agent"); and BANK OF NEW YORK, as documentation agent (in such capacity, together with its successors and assigns in such capacity, the "Documentation Agent"). RECITALS A. The Borrowers, the Banks, the Agent, the Syndication Agent and the Documentation Agent are parties to a Credit Agreement dated as of May 25, 2000 (as the same has been or may hereafter be amended, supplemented, extended or otherwise modified from time to time, the "Credit Agreement"). Capitalized terms used herein without definition have the meanings assigned to them in the Credit Agreement. B. The Borrowers have requested certain amendments to the Credit Agreement. C. Subject to certain terms and conditions, the Agent and the Banks are willing to agree to such requests, as hereinafter set forth. NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: I. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended as follows: A. Definitions. The definition of "Rental Expense" in Section 1.01 of the Credit Agreement is hereby amended to read in its entirety as follows: "Rental Expense" means, for any period, all obligations in respect of base and contingent rent paid or due by the Borrowers or any of their Subsidiaries during such period under any rental agreements or leases of real or personal property (other than capitalized leases), excluding: (a) "License Fees", "Excess Fees" and "Miscellaneous Expense Fees" as defined under the Kmart Agreement, and (b) other fees which (i) are similar to those referenced in clause (a) above and (ii) may be characterized as royalties, license fees, excess fees, advertising fees or miscellaneous expense fees and which arise under any agreement between any Borrower or any Borrower's Subsidiary and any retailer pursuant to which such Borrower or Subsidiary operates a footwear department in such retailer's store. B. Pari Passu Liens. Section 5.10 of the Credit Agreement is hereby amended by re-lettering paragraph (k) as paragraph (l) and adding new paragraph (k) as follows: (k) Liens on the Collateral securing Debt permitted under Section 5.16(g); provided that such Liens shall rank pari passu with any Liens on the Collateral securing Debt under this Agreement and the other Loan Documents, with the Agent hereby authorized to act as collateral agent for any Bank which provides any credit facility permitted under Section 5.16(g), pursuant to amendments to the Pledge Agreement, the Guarantee Agreement and all applicable UCC financing statements in form and substance reasonably satisfactory to the Agent and the Borrowers. C. Additional Debt. Section 5.16 of the Credit Agreement is hereby amended by deleting the word "and" at the end of paragraph (e), by adding the following new paragraph (f), by re-lettering existing paragraph (f) as paragraph (g), and by amending such new paragraph (g) to read in its entirety as set forth below: (f) at any time, up to $50,000,000 in Debt reflecting the aggregate face amount of all letters of credit issued on behalf of the Company and its Subsidiaries and the aggregate amount of all unpaid reimbursement obligations relating to letters of credit; and (g) Debt of the Company and its Subsidiaries which are Borrowers or Guarantors not otherwise permitted by the foregoing clauses of this Section (including Guarantees), provided that (i) no Debt covered by this Section 5.16(g) shall contain terms, conditions, covenants or defaults more restrictive on the Company or any of its Subsidiaries than those set forth in this Agreement; (ii) with respect to any Debt covered by this Section 5.16(g) which is in excess of $25,000,000, the Agent shall have received final, executed documents and instruments evidencing and securing such Debt, or relating thereto, within ten (10) calendar days after the incurrence thereof; (iii) immediately after the incurrence of any such Debt, and after giving effect thereto on a pro forma basis (both as of the date of such incurrence and as of the end of and for the applicable fiscal period most recently ended prior thereto), no Default shall have occurred and be continuing; and -2- (iv) the Company shall have provided to the Agent a certificate, signed on behalf of the Company by its chief financial officer or other financial officer and demonstrating, in reasonable detail, compliance with paragraph (iii) above, as to all financial covenants set forth in this Agreement, and certifying to the satisfaction of the conditions set forth in this Section 5.16(g) as of the date such Debt is incurred. D. No Further Amendments. Except as specifically amended above, the text of the Credit Agreement and of each of the other Loan Documents shall remain unmodified and in full force and effect and is hereby ratified and affirmed in all respects, and the Debt of any Borrower to the Agent and the Banks evidenced thereby and by the Notes is hereby reaffirmed in all respects. II. REFERENCES IN SECURITY DOCUMENTS; CONFIRMATION OF SECURITY. All references to the "Credit Agreement" in the Guarantee Agreement, the Pledge Agreement and any other Loan Documents evidencing or relating to the Collateral (the "Security Documents"), and in any other Loan Documents shall, from and after the date hereof, refer to the Credit Agreement, as amended by this Amendment, and all obligations of any Borrower under the Credit Agreement, as amended, shall be secured by and be entitled to the benefits of the Security Documents and other Loan Documents. All Security Documents heretofore executed by the Company and any Subsidiary thereof shall remain in full force and effect and such Security Documents, as amended hereby, are hereby ratified and affirmed. III. CONDITIONS. The effectiveness of this Amendment is subject to the following express conditions precedent and subsequent: A. The Company shall have executed and delivered to the Agent (or shall have caused to be executed and delivered to the Agent by the appropriate persons) the following: 1. This Amendment; 2. True and complete copies of any required stockholders' and/or directors' consents and/or resolutions, authorizing the execution and delivery of this Amendment, certified by the secretary of the Company; and 3. Such other supporting documents and certificates as the Agent or its counsel may reasonably request. -3- B. The Agent and the Banks shall have received the favorable opinion of in-house counsel to the Borrowers substantially in the form of Exhibit A-1 attached hereto and such other matters as may be reasonably requested by the Agent. C. As soon as practicable after the date hereof, the Borrowers shall have complied with the terms and conditions of that certain letter agreement dated as of June 19, 2001 between the Agent and the Borrowers. D. The Banks required pursuant to the Credit Agreement to execute and deliver this Amendment in order to amend the Credit Agreement shall have executed and delivered this Amendment. E. All legal matters incident to the transactions contemplated hereby shall be reasonably satisfactory to counsel for the Agent. IV. REPRESENTATIONS, WARRANTIES AND COVENANTS. As a material inducement to the Agent and the Banks to enter into this Amendment, the Borrowers hereby jointly and severally represent and warrant to the Agent (which representations and warranties shall survive the delivery of this Amendment), after giving effect to this Amendment, as follows: A. The execution and delivery of this Amendment have been duly authorized by all requisite corporate action on the part of each Borrower, and will not violate any provision of law, any order, judgment or decree of any court or other agency of government, or the articles or bylaws of the Company or any Subsidiary or any indenture, agreement or other instrument to which the Company or any Subsidiary is bound, or be in conflict with, or result in a breach of, or constitute (with due notice or lapse of time or both) a default under, or result in the creation or imposition of any Lien upon any of the property or assets of the Company or any Subsidiary thereto pursuant to, any such indenture, agreement or instrument, except for any violations, contraventions or defaults under such indentures, agreements, judgments, injunctions, orders, decrees or other instruments or the creation or imposition of any such Liens that individually or in the aggregate would not constitute an Event of Default under Section 5.10 or would not reasonably be expected to have a Material Adverse Effect. B. The representations and warranties contained in the Credit Agreement and in the other Loan Documents, and the information set forth in the Exhibits and Schedules thereto and in the Officer's Certificates heretofore delivered thereunder are true and correct in all material respects on and as of the date of this Amendment as though made at and as of such date (except to the extent that such representations and warranties expressly relate to an earlier date (including but not limited to, the representations and warranties in Section 4.04(d) which expressly relate to an earlier date), and except to the extent variations therefrom have been permitted under the terms of the Credit Agreement). No material adverse change has occurred in the assets, liabilities, financial condition, business or prospects of the Company and its Subsidiaries from -4- that disclosed in the financial statements most recently furnished to the Agent pursuant to the Credit Agreement. No Default has occurred and is continuing. C. This Amendment constitutes the legal, valid and binding obligation of each Borrower, enforceable against such Borrower in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium and similar laws affecting the rights and remedies of creditors generally or the application of principles of equity, whether in any action at law or proceeding in equity, and subject to the availability of the remedy of specific performance or of any other equitable remedy or relief to enforce any right thereunder. V. MISCELLANEOUS. A. As provided in the Credit Agreement, the Borrowers jointly and severally agree to reimburse the Agent upon demand for all reasonable fees and disbursements of counsel to the Agent incurred in connection with the preparation of this Amendment. B. This Amendment shall be governed by and construed in accordance with the internal laws of The State of New York (excluding the laws applicable to conflicts or choice of laws). C. This Amendment may be executed by the parties hereto in several counterparts hereof and by the different parties hereto on separate counterparts hereof, all of which counterparts shall together constitute one and the same agreement. Delivery of an executed signature page of this Amendment by facsimile transmission shall be effective as an in-hand delivery of an original executed counterpart hereof. [The next pages are the signature pages.] -5- IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized representatives, all as of the day and year first above written. FOOTSTAR, INC. By: /s/ Thomas E. Baumlin ------------------------------------ Name: Thomas E. Baumlin Title: Senior Vice President, Finance FOOTSTAR CORPORATION By: /s/ Thomas E. Baumlin ------------------------------------ Name: Thomas E. Baumlin Title: Senior Vice President, Finance FLEET NATIONAL BANK, as Agent By: /s/ Stephen J. Garvin ------------------------------------ Name: Stephen J. Garvin Title: Director FIRST UNION NATIONAL BANK, as Syndication Agent By: /s/ Anthony D. Braxton ------------------------------------ Name: Anthony D. Braxton Title: Vice President BANK OF NEW YORK, as Documentation Agent By: /s/ Howard F. Bascom, Jr. ------------------------------------ Name: Howard F. Bascom, Jr. Title: Vice President CREDIT SUISSE FIRST BOSTON, as Managing Agent By: /s/ Kristin Lepri /s/ David L. Sawyer ----------------- ------------------- Name: Kristin Lepri David L. Sawyer Title: Asst VP Vice President (signatures continued on next page) BANK OF AMERICA, N.A., as Managing Agent By:_____________________________________ Name:_______________________________ Title:______________________________ FLEET NATIONAL BANK, as Bank By: /s/ Stephen J. Garvin ------------------------------------ Name: Stephen J. Garvin Title: Director FIRST UNION NATIONAL BANK, as Bank By: /s/ Anthony D. Braxton ------------------------------------ Name: Anthony D. Braxton Title: Vice President BANK OF NEW YORK, as Bank By: /s/ Howard F. Bascom, Jr. ------------------------------------ Name: Howard F. Bascom, Jr. Title: Vice President CREDIT SUISSE FIRST BOSTON, as Bank By: /s/ Kristin Lepri /s/ David L. Sawyer ----------------- ------------------- Name: Kristin Lepri David L. Sawyer Title: Asst VP Vice President BANK OF AMERICA, N.A., as Bank By:_____________________________________ Name:_______________________________ Title:______________________________ NATIONAL CITY BANK, as Bank By: /s/ Thomas J. McDonnell ------------------------------------ Name: Thomas J. McDonnell Title: Senior Vice President (signatures continued on next page) PNC BANK, NATIONAL ASSOCIATION, as Bank By: /s/ Judy B. Land ------------------------------------ Name: Judy B. Land Title: Vice President THE CHASE MANHATTAN BANK, as Bank By: /s/ Andrea Johnson ------------------------------------ Name: Andrea Johnson Title: Vice President FIRSTAR BANK, N.A., as Bank By: /s/ Thomas L. Bayer ------------------------------------ Name: Thomas L. Bayer Title: Vice President BANCO POPULAR DE PUERTO RICO, as Bank By:_____________________________________ Name:_______________________________ Title:______________________________ BANK OF HAWAII, as Bank By: /s/ Donna R. Parker ------------------------------------ Name: Donna R. Parker Title: Vice President HIBERNIA NATIONAL BANK, as Bank By:_____________________________________ Name:_______________________________ Title:______________________________ By:_____________________________________ Name:_______________________________ Title:______________________________ CONSENT AND CONFIRMATION OF SUBSIDIARIES Each of the undersigned hereby joins in the execution of the foregoing Second Amendment to Credit Agreement dated as of June 19, 2001 (the "Amendment") to which this Consent and Confirmation is attached (1) to confirm its consent, to the extent required, to all of the transactions contemplated by the Amendment, and (2) to confirm and ratify its Guaranty Agreement and its Pledge and Security Agreement, each entered into as required under such Credit Agreement, dated as of May 25, 2000 in favor of the Agent on behalf of the Banks, which remains in full force and effect. FOOTSTAR, INC. FOOTSTAR CORPORATION By: /s/ Thomas E. Baumlin ------------------------------------ Duly authorized signatory as to both FOOTSTAR CENTER, INC. FOOTACTION CENTER, INC. FEET CENTER, INC. MELDISCO H.C., INC. APACHE-MINNESOTA THOM MCAN, INC. MILES SHOES MELDISCO LAKEWOOD COLORADO, INC. MALL OF AMERICA FAN CLUB, INC. NEVADA FEET, INC. FEET OF COLORADO, INC. LFD I, INC. LFD II, INC. LFD OPERATING, INC. By: /s/ Donna Wangenstein ------------------------------------ Duly Authorized Signatory as to all