1
Exhibit 10.4
WAIVER
WAIVER dated as of November 6, 1998 to the Credit Agreement dated as of
April 9, 1997, as heretofore amended (the "Credit Agreement") among VENATOR
GROUP, INC. (formerly named Woolworth Corporation), the BANKS party thereto, the
CO-AGENTS party thereto, NATIONSBANK, N.A., as Documentation Agent, and THE BANK
OF NEW YORK, as LC Agent, Administrative Agent and Swingline Bank.
W I T N E S S E T H :
WHEREAS, the Borrower has requested that the Banks waive any failure by the
Borrower to comply with the provisions of Sections 5.07 (Minimum Consolidated
Tangible Net Worth) and 5.10 (Fixed Charge Coverage Ratio) of the Credit
Agreement during the period from and including October 31, 1998 to and including
March 19, 1999 (the "Waiver Period");
WHEREAS, the undersigned Banks are willing to grant such waiver, subject to
the terms and conditions set forth herein, if (i) the Borrower agrees that with
respect to interest and fees accrued during the Waiver Period, the Pricing
Schedule referred to in the Credit Agreement shall mean the Pricing Schedule
attached hereto and (ii) the Borrower agrees to limit Restricted Payments (as
defined below) as set forth in Section 5 hereto;
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Defined Terms; References. Unless otherwise specifically defined
herein, each term used herein which is defined in the Credit Agreement has the
meaning assigned to such term in the Credit Agreement.
Section 2. Minimum Consolidated Tangible Net Worth. The undersigned Banks
hereby waive any failure by the Borrower to comply with the provisions of
Section 5.07 of the Credit Agreement during the Waiver Period, but only if and
so long as Consolidated Tangible Net Worth at any time during the Waiver Period
is not less than (i) $750,000,000 at any time prior to January 30, 1999 or (ii)
$850,000,000 at any time on or after January 30, 1999.
Section 3. Fixed Charge Coverage Ratio. The undersigned Banks hereby waive
any failure by the Borrower to comply with the provisions of Section 5.10 of
(NY) 27009/335/WAIVERS/waiver1.wpd
2
the Credit Agreement at the end of the third and fourth Fiscal Quarters of
Fiscal Year 1998, but only if the ratio set forth in said Section is not less
than (i) 0.90 to 1 at the end of the third Fiscal Quarter of Fiscal Year 1998 or
(ii) 0.50 to 1 at the end of the fourth Fiscal Quarter of Fiscal Year 1998.
Section 4. Increase in Pricing. The Borrower agrees that for purposes of
calculating any interest and fees for any day during the Waiver Period, the
Pricing Schedule attached hereto shall be used instead of the Pricing Schedule
referred to in the Credit Agreement.
Section 5. Restricted Payments. The Borrower agrees that during the Waiver
Period, neither the Borrower nor any Subsidiary will declare or make any
Restricted Payment. As used herein, "Restricted Payment" means (i) any dividend
or other distribution on any shares of the Borrower's capital stock (except
dividends payable solely in shares of its capital stock of the same class) or
(ii) any payment on account of the purchase, redemption, retirement or
acquisition of (a) any shares of the Borrower's capital stock or (b) any option,
warrant or other rights to acquire shares of the Borrower's capital stock (but
not including payments of principal, premium (if any) or interest made pursuant
to the terms of convertible debt securities prior to conversion). The Borrower
agrees that failure to comply with this Section 5 shall constitute an Event of
Default under the Credit Agreement.
Section 6. Governing Law. This Waiver shall be governed by and construed in
accordance with the laws of the State of New York.
Section 7. Counterparts. This Waiver may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
Section 8. Effectiveness. This Waiver shall become effective as of the date
hereof when the Administrative Agent shall have received from each of the
Borrower and the Required Banks a counterpart hereof signed by such party or
facsimile or other written confirmation (in form satisfactory to the
Administrative Agent) that such party has signed a counterpart hereof. On the
later of November 6, 1998 and the date this Waiver becomes effective, the
Borrower agrees to pay to the Administrative Agent for the account of the Banks
who deliver a counterpart of this Waiver to the Administrative Agent on or
before the later of 1:00 P.M. (New York City time) on (i) November 6, 1998 and
(ii) the date this Waiver becomes effective, a fee in an aggregate amount equal
to 0.10% of the aggregate amount of the Commitments of such Banks on such
effective date. The Borrower agrees that the failure to pay such fee when due
shall be an Event of Default.
(NY) 27009/335/WAIVERS/waiver1.wpd
3
IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly
executed as of the date first above written.
VENATOR GROUP, INC.
By:/s/ John H. Cannon
--------------------------------
Title: Vice President - Treasurer
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:/s/ Unn Boucher
--------------------------------
Title: Vice President
NATIONSBANK, N.A.
By:/s/ Bill Manley, Sr.
--------------------------------
Title: Senior Vice President
THE BANK OF NEW YORK
By:/s/ Howard F. Bascom
--------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By:/s/ J. Alan Edwards
--------------------------------
Title: Authorized Signatory
(NY) 27009/335/WAIVERS/waiver1.wpd
4
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY
By:/s/ N. Saffra
--------------------------------
Title: Vice President
TORONTO DOMINION (NEW YORK), INC.
By:/s/ Jorge A. Garcia
--------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By:/s/ Bill Manley, Sr.
--------------------------------
Title: Senior Vice President
COMMERZANK AG, NEW YORK AND/OR
GRAND CAYMAN BRANCHES
By:/s/ David T. Whitworth
--------------------------------
Title: Senior Vice President
By:/s/ A. Oliver Welsch-Lehmann
--------------------------------
Title: Assistant Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By:/s/ Vladimir Labon
--------------------------------
Title: First Vice President-Manager
(NY) 27009/335/WAIVERS/waiver1.wpd
5
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By:/s/ Susan M. O'Connor
--------------------------------
Title: Director
By: /s/ Stephen A. Wiedeman
-------------------------------
Title: Director
KEYBANK NATIONAL ASSOCIATION
By:_______________________________
Title:
WELLS FARGO BANK, N.A.
By: /s/ Razia Damji
-------------------------------
Title: Vice President
By:_______________________________
Title:
UNION BANK OF CALIFORNIA, N.A.
By:/s/ Corinne Heyning
-------------------------------
Title: Vice President
(NY) 27009/335/WAIVERS/waiver1.wpd
6
PRICING SCHEDULE
The "Euro-Dollar Margin", "Non-Trade LC Fee Rate", "CD Margin" and
"Facility Fee Rate" for any day are the respective percentages per annum set
forth below in the applicable row under the column corresponding to the Pricing
Level that applies on such day:
================================================================================
Level Level Level Level Level Level Level Level
I II III IV V VI VII VIII
================================================================================
Pricing Level
Euro-Dollar
Margin and
Non-Trade LC Fee
Rate
If Utiliza- .1700 .2750 .3500 .6250 .7000 1.0250 1.3750 1.7500
tion is
50% or less
If Utiliza- .1700 .3750 .4750 .8750 .9500 1.2750 1.6250 2.0000
tion exceeds
50%
================================================================================
CD Margin
If Utiliza- .2950 .4000 .4750 .7500 .8250 1.1500 1.5000 1.8750
tion is
50% or less
If Utiliza- .2950 .5000 .6000 1.0000 1.0750 1.4000 1.7500 2.1250
tion exceeds
50%
================================================================================
Facility
Fee Rate .0800 .1250 .1500 .2500 .3000 .3500 .3750 .5000
================================================================================
For purposes of this Schedule, the following terms have the following
meanings:
"Level I Pricing" applies on any day on which (i) the Borrower's commercial
paper is rated A2 or higher by S&P and P2 or higher by Moody's and (ii) the
Borrower's long-term debt is rated A- or higher by S&P and A3 or higher by
Moody's.
"Level II Pricing" applies on any day on which (i) the Borrower's
commercial paper is rated A2 or higher by S&P and P2 or higher by Moody's and
(ii) the Borrower's long-term debt is rated BBB+ or higher by S&P and Baa1 or
higher by Moody's.
(NY) 27009/335/WAIVERS/waiver1.wpd
7
"Level III Pricing' applies on any day on which (i) the Borrower's
commercial paper is rated A2 or higher by S&P and P2 or higher by Moody's and
(ii) the Borrower's long-term debt is rated BBB or higher by S&P and Baa2 or
higher by Moody's.
"Level IV Pricing" applies on any day on which (i) the Borrower's
commercial paper is rated A3 or higher by S&P and P3 or higher by Moody's and
(ii) the Borrower's long-term debt is rated BBB- or higher by S&P and Baa3 or
higher by Moody's.
"Level V Pricing" applies on any day on which (i) the Borrower's commercial
paper is rated A3 or higher by S&P and P3 or higher by Moody's and (ii) the
Borrower's long-term debt is rated (A) BB+ or higher by S&P and Baa3 or higher
by Moody's or (B) BBB- or higher by S&P and Ba1 or higher by Moody's.
"Level VI Pricing" applies on any day on which the Borrower's long-term
debt is rated BB+ or higher by S&P and Ba1 or higher by Moody's.
"Level VII Pricing" applies on any day on which the Borrower's long-term
debt is rated BB or higher by S&P and Ba2 or higher by Moody's.
"Level VIII Pricing" applies on any day if no other Pricing Level applies
on such day.
'Moody's" means Moody's Investors Service, Inc.
"Pricing Level" refers to the determination of which of Level I Pricing,
Level II Pricing, Level III Pricing, Level IV Pricing, Level V Pricing, Level VI
Pricing, Level VII Pricing or Level VIII Pricing applies on any day.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-
Hill Companies, Inc.
"Utilization" means at any date the percentage equivalent of a fraction (i)
the numerator of which is the Total Usage at such date, after giving effect to
any borrowing or repayment on such date, and (ii) the denominator of which is
the Total Commitments at such date, after giving effect to any reduction of the
Commitments on such date. For purposes of this Schedule, if for any reason any
Bank has any Credit Exposure after the Commitments terminate, the Utilization on
and after the date of such termination shall be deemed to exceed 50%.
The credit ratings to be utilized for purposes of this Schedule are those
assigned to the unsecured commercial paper of the Borrower without third-party
credit enhancement or to the senior unsecured long-term debt securities of the
Borrower without third-party credit enhancement, as the case may be. Any rating
assigned to any other commercial paper or debt security of the Borrower shall be
disregarded. The rating in effect at any date is that in effect at the close of
business on such date.
(NY) 27009/335/WAIVERS/waiver1.wpd