EXHIBIT 10.1
PAYLESS SHOESOURCE FINANCE, INC.
FIRST AMENDMENT TO
CREDIT AND GUARANTY AGREEMENT
This FIRST AMENDMENT, dated as of January 24, 2002 (this "AMENDMENT"),
to the Credit and Guaranty Agreement, dated as of April 17, 2000 (the "CREDIT
AGREEMENT"), by and among PAYLESS SHOESOURCE FINANCE, INC., a Nevada corporation
("COMPANY"), PAYLESS SHOESOURCE, INC., a Delaware corporation ("PARENT"), and
CERTAIN SUBSIDIARIES OF PARENT, as Guarantors, the Lenders party hereto from
time to time, GOLDMAN SACHS CREDIT PARTNERS L.P., as sole Lead Arranger and as
sole Syndication Agent (in such capacity, "SYNDICATION AGENT"), BANK ONE, NA,
with its main office in Chicago, Illinois, as Administrative Agent (together
with its permitted successors in such capacity, "ADMINISTRATIVE AGENT"), and
FIRST UNION NATIONAL BANK, as Documentation Agent. Capitalized terms used herein
not otherwise defined herein or otherwise amended hereby shall have the meanings
ascribed thereto in the Credit Agreement.
RECITALS:
WHEREAS, Parent and Company have requested that Requisite Lenders agree
to make amendments to certain provisions of the Credit Agreement; and
WHEREAS, Administrative Agent and Requisite Lenders have agreed to
amend certain provisions of the Credit Agreement, in the manner, and on the
terms and conditions, provided for herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
SECTION I. AMENDMENTS TO CREDIT AGREEMENT
A. AMENDMENTS TO SECTION 1: DEFINITIONS.
(a) Section 1.1 of the Credit Agreement is hereby amended by
adding thereto the following definitions in proper alphabetical order:
" 'BACK-TO-BACK GUARANTOR' is defined in the definition of
Back-to-Back Loans."
" 'BACK-TO-BACK LOANS' means any unsecured Indebtedness of a
Foreign Subsidiary of Parent to an Eligible Bank (i) which Indebtedness
is guaranteed by another Foreign Subsidiary of Parent (a "BACK-TO-BACK
GUARANTOR"), (ii) where such guarantee by a Back-to-Back Guarantor is
secured solely by funds in a certificate of deposit or other
cash collateral account held by such Eligible Bank to which the
Indebtedness is owed (a "CD ACCOUNT"), (iii) where all or a portion of
the funds used by such Back-to-Back Guarantor to fund such CD Account
are directly or indirectly from the proceeds of a capital contribution
permitted by Section 6.5 and (iv) at all times the principal amount of
such Indebtedness shall be equal to or less than the amounts in the CD
Account."
" 'CD ACCOUNT' is defined in the definition of Back-to-Back
Loans."
" 'ELIGIBLE BANK' means (i) a commercial bank or its
affiliates organized under the laws of the United States, or any state
thereof or the District of Columbia that (a) is at least "adequately
capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such
regulations) of not less than $100,000,000; (ii) a commercial bank or
its affiliates organized under the laws of any other country that (a)
accepts deposits and makes loans in the ordinary course of its
business, (b) has affiliates in the Cayman Islands, Jersey Islands,
British Virgin Islands or any other country with similar tax laws, (c)
is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such
country, (d) has total assets in excess of $5,000,000,000 and (e) is
acting through a branch or agency located in the country in which it is
organized, in the Cayman Islands, or in another country that is also a
member of the OECD; or (iii) if in any particular country there is no
commercial bank that qualifies under (i) or (ii) above, then a
commercial bank organized under the laws of such country that (a)
accepts deposits and makes loans in the ordinary course of its
business, (b) has affiliates in the Cayman Islands, Jersey Islands,
British Virgin Islands or any other country with similar tax laws, and
(c) has total assets in an amount which ranks such commercial bank in
terms of total assets in the top one-third of all commercial banks in
such country which both accept deposits and make loans in the ordinary
course of their business and have affiliates in the Cayman Islands,
Jersey Islands, British Virgin Islands or any other country with
similar tax laws."
(b) Section 1.1 of the Credit Agreement is hereby further
amended by deleting the definition of "Fiscal Year" in its entirety and
substituting therefore the following:
" 'FISCAL YEAR' means (a) with respect to Parent and its
Subsidiaries (except those Foreign Subsidiaries described in clause (b)
below) the fiscal year ending on the Saturday which is the closest to
January 31 of each following calendar year and (b) with respect to any
Foreign Subsidiary that is not permitted by applicable laws, rules or
regulations, or orders of any Governmental Authority, to have a fiscal
year-end on the Saturday which is the closest to January 31, the annual
accounting period for such Foreign Subsidiary as of (i) the Closing
Date or (ii) if such Foreign Subsidiary becomes a Subsidiary of Parent
after the Closing Date, the date established when such Foreign
Subsidiary became a Subsidiary of Parent."
(c) Section 1.1 of the Credit Agreement is hereby further
amended by deleting the definition of "Fixed Charge Coverage Ratio" in its
entirety and substituting therefore the following:
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" 'FIXED CHARGE COVERAGE RATIO' means the ratio as of the last
day of any Fiscal Quarter of (i) Consolidated Adjusted EBITDAR for the
four-Fiscal Quarter Period then ending, to (ii) the sum of (A)
Consolidated Fixed Charges plus (B) the aggregate amount of all
purchases, redemptions or other acquisitions by Parent of shares of its
Capital Stock in accordance with Section 6.4(vi), in each case for such
four-Fiscal Quarter Period."
B. AMENDMENTS TO SECTION 3: CONDITIONS PRECEDENT.
(a) Section 3.3 of the Credit Agreement is hereby amended by
adding the following clause (c) to the conclusion thereof as follows:
"(c) If at any time, Parent or any Domestic Subsidiary of
Parent consummates a sale or other conveyance of the Capital Stock of a
directly owned Foreign Subsidiary in accordance with the terms of
Section 6.7(i) or Section 6.7(j) and such sale or conveyance results in
the ownership of such Capital Stock by a Foreign Subsidiary of Parent
then, (x) the security interest granted to the Administrative Agent in
such Capital Stock owned by such Foreign Subsidiary shall automatically
terminate and (y) at the written request and expense of Company,
Administrative Agent shall take or cause to be taken any action, to
execute and deliver or cause to be executed and delivered any
agreement, document and instrument, and make or cause to be made any
filing and recording, in each case as reasonably requested by Company
in order to evidence such termination including, without limitation,
return of the applicable pledged Share Collateral and stock powers
related thereto. Notwithstanding anything herein to the contrary, 65%
of the Capital Stock in a Material Foreign Subsidiary which is directly
owned by Parent or any Domestic Subsidiary of Parent (after giving
effect to any permitted sale or conveyance in accordance with Section
6.7(i) and Section 6.7(j)) shall at all times be pledged to
Administrative Agent as Share Collateral and subject to a First
Priority Lien in favor of Administrative Agent in accordance with
Section 5.9(d) and the Pledge Agreement."
C. AMENDMENTS TO SECTION 6: NEGATIVE COVENANTS.
(a) Section 6.1(g) of the Credit Agreement is hereby amended
by deleting Section 6.1(g) in its entirety and replacing it with the following:
"(g) Indebtedness under leases arising out of Permitted
Sale-Leasebacks made in compliance with Section 6.9, in an aggregate
amount not to exceed $50,000,000."
(b) Section 6.1(l) of the Credit Agreement is hereby amended
by deleting Section 6.1(l) in its entirety and replacing it with the following:
"(l) other Indebtedness of the Company's Subsidiaries,
provided that the aggregate amount of such Indebtedness, together with
the aggregate amount of Indebtedness permitted under Section 6.1(n), in
each case outstanding as of the date of determination, shall not exceed
at any time in any Fiscal Year the corresponding amount set forth below
opposite such Fiscal Year less the aggregate outstanding amount of
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Indebtedness of Parent or Company that was incurred pursuant to Section
6.1(m) and is guaranteed by any Subsidiary of Company:
<Table>
<Caption>
FISCAL YEAR INDEBTEDNESS AMOUNT
------------------- --------------------
Fiscal Year ending $ 35,000,000
February 3, 2001
Fiscal Year ending $ 25,000,000
February 2, 2002
Fiscal Year ending $ 80,000,000
February 1, 2003
Fiscal Year ending $115,000,000
January 31, 2004
Fiscal Year ending $140,000,000
January 29, 2005
Thereafter $160,000,000
</Table>
(c) Section 6.1(m) of the Credit Agreement is hereby amended
by deleting Section 6.1(m) in its entirety and replacing it with the following:
"(m) other Indebtedness of the Parent and Company, in an
aggregate amount not to exceed at any time in any Fiscal Year the
corresponding amount set forth below opposite such Fiscal Year;
provided however, that if such Indebtedness is guaranteed by any
Subsidiary of Company pursuant to, and in compliance with, Section
6.1(l), such Indebtedness shall not be applied to reduce the amount of
Indebtedness permitted under this Section 6.1(m):
<Table>
<Caption>
FISCAL YEAR INDEBTEDNESS AMOUNT
------------------ -------------------
Fiscal Year ending $15,000,000
February 3, 2001
Fiscal Year ending $15,000,000
February 3, 2002
Fiscal Year ending $ 5,000,000
February 1, 2003
Fiscal Year ending $15,000,000
January 31, 2004
Fiscal Year ending $15,000,000
January 29 , 2005
and thereafter
</Table>
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(d) Section 6.1 of the Credit Agreement is hereby amended by
adding new clauses (n), (o) and (p) at the conclusion thereof as follows:
"(n) Indebtedness of any Foreign Subsidiary arising from
Back-to-Back Loans to such Foreign Subsidiary in an aggregate amount
for all such Foreign Subsidiaries not to exceed at any time in any
Fiscal Year the corresponding amount set forth below opposite such
Fiscal Year:
<Table>
<Caption>
FISCAL YEAR INDEBTEDNESS AMOUNT
------------------ -------------------
Fiscal Year ending $25,000,000
February 2, 2002
Fiscal Year ending $60,000,000
February 1, 2003
Fiscal Year ending $95,000,000
January 31, 2004
Fiscal Year ending $120,000,000
January 29, 2005
and thereafter
</Table>
(o) Indebtedness of a Back-to-Back Guarantor arising from
guaranties of Back-to-Back Loans permitted by Section 6.1(n) in an
aggregate amount for all such Back-to-Back Guarantors not to exceed at
any time in any Fiscal Year the corresponding amount set forth below
opposite such Fiscal Year:
<Table>
<Caption>
FISCAL YEAR INDEBTEDNESS AMOUNT
----------------------------- ----------------------
Fiscal Year ending $25,000,000
February 2, 2002
Fiscal Year ending $60,000,000
February 1, 2003
</Table>
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<Table>
<Caption>
FISCAL YEAR INDEBTEDNESS AMOUNT
------------------ -------------------
Fiscal Year ending $95,000,000
January 31, 2004
Fiscal Year ending $120,000,000
January 29, 2005
and thereafter
</Table>
; provided that the aggregate amount of any such Indebtedness
shall at all times be equal to the aggregate amount of outstanding
Back-to-Back Loans; and
(p) Indebtedness of any direct wholly-owned Foreign Subsidiary
of a non-wholly-owned Foreign Subsidiary of Parent to such
non-wholly-owned Foreign Subsidiary of Parent."
(e) Section 6.2 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of clause (n) thereof.
(f) Section 6.2(o) of the Credit Agreement is hereby amended
by deleting Section 6.2(o) in its entirety and replacing it with the following:
"other Liens on assets other than the Share Collateral
securing Indebtedness in an aggregate amount not to exceed at any time
in any Fiscal Year the corresponding amount set forth below opposite
such Fiscal Year:
<Table>
<Caption>
FISCAL YEAR INDEBTEDNESS AMOUNT
------------------ -------------------
Fiscal Year ending $50,000,000
February 3, 2001
Fiscal Year ending $40,000,000
February 2, 2002
Fiscal Year ending $40,000,000
February 1, 2003
Fiscal Year ending $65,000,000
January 31, 2004
Fiscal Year ending $75,000,000
January 29, 2005
and thereafter
</Table>
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(g) Section 6.2 of the Credit Agreement is hereby further
amended by adding a new clause (p) at the conclusion thereof as follows:
"(p) Liens on CD Accounts incurred by a Back-to-Back Guarantor
solely to secure guaranties permitted under Section 6.1(o)."
(h) Section 6.5(d) of the Credit Agreement is hereby amended
by adding the following at the conclusion thereof:
"; provided, however, that notwithstanding the foregoing, any
Investment made in a Back-to-Back Guarantor relating to a Back-to-Back
Loan shall not be permitted under this clause (d)."
(i) Section 6.5(i) of the Credit Agreement is hereby amended
by deleting the word "and" at the end thereof.
(j) Section 6.5(j) of the Credit Agreement is hereby amended
by deleting Section 6.5(j) in its entirety and replacing it with the following:
"(j) other Investments, provided that the aggregate amount of
such Investments, together with the aggregate amount of all Investments
made in accordance with Section 6.5(l), in each case made after the
Closing Date through the date of determination, shall not exceed at any
time in any Fiscal Year the corresponding amount set forth below
opposite such Fiscal Year:
<Table>
<Caption>
FISCAL YEAR INVESTMENT AMOUNT
------------------ -----------------
Fiscal Year ending $75,000,000
February 3, 2001
Fiscal Year ending $40,000,000
February 2, 2002
Fiscal Year ending $70,000,000
February 1, 2003
Fiscal Year ending $100,000,000
January 31, 2004
Fiscal Year ending $120,000,000
January 29, 2005
Thereafter $130,000,000
</Table>
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(k) Section 6.5 of the Credit Agreement is hereby amended by
adding new clauses (k), (l), (m) and (n) at the conclusion thereof as follows:
"(k) Investments made by a Back-to-Back Guarantor in a CD
Account at an Eligible Bank and made solely in connection with
guaranties of Back-to-Back Loans by such Back-to-Back Guarantor as
permitted under Section 6.1(o); provided that the aggregate amount of
any such Investments in the relevant CD Account shall at all times be
equal to or greater than the aggregate amount of the applicable
outstanding Back-to-Back Loan;
(l) Investments consisting of capital contributions made to
Foreign Subsidiaries of Parent, which Investments are made for the sole
purpose of providing funds to a Back-to-Back Guarantor to be deposited
in a CD Account in connection with a Back-to-Back Loan otherwise
permitted hereunder, provided that the aggregate amount for all Credit
Parties of all such Investments made after the Closing Date through the
date of determination shall not to exceed the corresponding amount set
forth below opposite such Fiscal Year:
<Table>
<Caption>
FISCAL YEAR INVESTMENT AMOUNT
------------------ -----------------
Fiscal Year ending $20,000,000
February 2, 2002
Fiscal Year ending $45,000,000
February 1, 2003
Fiscal Year ending $70,000,000
January 31, 2004
Fiscal Year ending $105,000,000
January 29, 2005
and thereafter
</Table>
(m) Investments consisting of capital contributions made by
Foreign Subsidiaries of Parent to other Foreign Subsidiaries of Parent
solely with the proceeds of Investments made in accordance with Section
6.5(l) and for the sole purpose of ultimately contributing the proceeds
of such Investment to a Back-to-Back Guarantor in order to provide
funds to such Back-to-Back Guarantor to be deposited in a CD Account in
connection with a Back-to-Back Loan otherwise permitted hereunder; and
(n) Investments made by a non-wholly-owned Foreign Subsidiary
of Parent in such non-wholly-owned Foreign Subsidiary's wholly-owned
Subsidiaries.
(l) Section 6.6(a) of the Credit Agreement is hereby amended
by deleting Section 6.6(a) in its entirety and replacing it with the following:
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"(a) Minimum Fixed Charge Coverage Ratio. Parent shall not
permit the Fixed Charge Coverage Ratio as of the last day of any Fiscal
Quarter (which last day occurs in any period set forth below),
beginning with the Fiscal Quarter ending April 29, 2000, to be less
than the correlative ratio indicated:
<Table>
<Caption>
FIXED CHARGE
FISCAL QUARTER COVERAGE RATIO
-------------------- --------------
April 29, 2000 - 1.75:1.00
November 3, 2001
November 4, 2001 - 1.55:1.00
February 2, 2002
February 3, 2002 - 1.50:1.00
May 4, 2002
May 5, 2002 - 1.55:1.00
August 3, 2002
August 4, 2002 - 1.65:1.00
November 2, 2002
November 3, 2002 and 1.75:1.00
and thereafter
</Table>
(m) Section 6.6(d) of the Credit Agreement is hereby amended
by deleting the proviso therein in its entirety and replacing it with the
following:
"provided, such amount for any Fiscal Year shall be increased
by an amount equal to the excess, if any, of such amount for the previous Fiscal
Year (as adjusted in accordance with this proviso) over the actual amount of
Consolidated Capital Expenditures for such previous Fiscal Year (the "CARRY-OVER
AMOUNT"); provided further, that notwithstanding the preceding proviso (i) any
Carry-Over Amount may not increase the permitted amount of Consolidated Capital
Expenditures for the Fiscal Year which begins on February 3, 2002 and ends on
February 1, 2003 ("FISCAL YEAR 2002") and (ii) the Carry-Over Amount at the end
of Fiscal Year 2002 shall increase the permitted amount of Consolidated Capital
Expenditures for the Fiscal Year which begins on February 2, 2003 and ends on
January 31, 2004 ("FISCAL YEAR 2003") only if the ratio of the amount of "Total
Operating Activities" as set forth on the Parent's Form 10-Q for the fiscal
quarter ending August 2, 2003 to the sum of (a) one-half of the amount of
Consolidated Capital Expenditures otherwise permitted to be made or incurred by
Parent and its Subsidiaries for Fiscal Year 2003 under this Section 6.6(d) plus
(b) one-half of the Carry-Over Amount at the end of Fiscal Year 2002 plus (c)
the aggregate amount of all required payments of Indebtedness (including,
without limitation, the aggregate amount of scheduled Installments set forth in
Section 2.12) for the first six months of Fiscal Year 2003 plus (d) one-half of
the amount
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of Parent's purchases, redemptions or other acquisitions of shares of its
Capital Stock permitted by Section 6.4(vi) for Fiscal Year 2003, is greater than
1.00:1.00."
(n) Section 6.7 of the Credit Agreement is hereby amended by
(i) deleting the word "and" at the end of clause (g) thereof, (ii) deleting the
phrase "board of directors of Parent" in clause (h) thereof and replacing it
with "board of directors of Payless ShoeSource, Inc., a Missouri corporation",
(iii) deleting "." at the conclusion of clause (h) thereof and replacing it with
";".
(o) Section 6.7 of the Credit Agreement is hereby amended by
adding a new clause (i), (j) and (k) at the conclusion thereof as follows:
"(i) Parent and any Subsidiary of Parent may sell or otherwise
convey the Capital Stock of any Foreign Subsidiary to any wholly-owned
Subsidiary of Parent; provided, (i) at the time of any such sale or
conveyance, no Default or Event of Default shall exist or shall result
from such sale or conveyance, (ii) such sale or conveyance shall not in
any manner adversely affect the Lenders, their rights and remedies
under any Credit Document, the Share Collateral or the Administrative
Agent's Liens, on behalf of Agents and Lenders on the Share Collateral,
or the priority of such Liens (other than the release of any Share
Collateral pursuant to Section 3.3), (iii) the Administrative Agent
shall receive prior written notice of such sale or conveyance along
with any other information reasonably requested by Administrative Agent
in connection therewith and (iv) 65% of the Capital Stock in a Material
Foreign Subsidiary which is directly owned by Parent or any Domestic
Subsidiary of Parent (after giving effect to any permitted sale or
conveyance in accordance with this clause (i)) shall at all times be
pledged to Administrative Agent as Share Collateral and subject to a
First Priority Lien in favor of Administrative Agent in accordance with
Section 5.9(d) and the Pledge Agreement;
(j) Parent and any Subsidiary of Parent may sell or otherwise
convey the Capital Stock of any non-wholly-owned Foreign Subsidiary to
any other non-wholly-owned Foreign Subsidiary of Parent; provided, (i)
that after giving effect to the consummation of such sale or
conveyance, the effective direct or indirect ownership of Parent in the
non-wholly-owned Foreign Subsidiary sold or conveyed is at least equal
to the effective direct or indirect ownership of Parent in such
non-wholly-owned Foreign Subsidiary prior to the consummation of such
sale or conveyance, (ii) at the time of any such sale or conveyance, no
Default or Event of Default shall exist or shall result from such sale
or conveyance, (iii) such sale or conveyance shall not in any manner
adversely affect the Lenders, their rights and remedies under any
Credit Document, the Share Collateral or the Administrative Agent's
Liens, on behalf of Agents and Lenders on the Share Collateral, or the
priority of such Liens (other than the release of any Share Collateral
pursuant to Section 3.3), (iv) the Administrative Agent shall receive
prior written notice of such sale or conveyance along with any other
information reasonably requested by Administrative Agent in connection
therewith and (v) 65% of the Capital Stock in a Material Foreign
Subsidiary which is directly owned by Parent or any Domestic Subsidiary
of Parent (after giving effect to any permitted sale or conveyance in
accordance with this clause (i)) shall at all times be pledged to
Administrative Agent as
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Share Collateral and subject to a First Priority Lien in favor of
Administrative Agent in accordance with Section 5.9(d) and the Pledge
Agreement; and
(k) Parent and any Domestic Subsidiary of Parent may sell or
otherwise convey the Capital Stock of any Domestic Subsidiary to any
other wholly-owned Domestic Subsidiary of Parent; provided, (i) at the
time of any such sale or conveyance, no Default or Event of Default
shall exist or shall result from such sale or conveyance, (ii) such
sale or conveyance shall not in any manner adversely affect the
Lenders, their rights and remedies under any Credit Document, the Share
Collateral or the Administrative Agent's Liens, on behalf of Agents and
Lenders on the Share Collateral, or the priority of such, (iii) the
Administrative Agent shall receive prior written notice of such sale or
conveyance along with any other information reasonably requested by
Administrative Agent in connection therewith and (iv) 100% of the
Capital Stock of all Domestic Subsidiaries shall at all times be
pledged to Administrative Agent as Share Collateral and subject to a
First Priority Lien in favor of Administrative Agent in accordance with
Section 5.9(c) and the Pledge Agreement."
(p) Section 6.9 of the Credit Agreement is hereby amended by
(i) deleting the reference to "Section 6.7(i)" in the proviso thereof and
replacing it with "Section 6.7(h)" and (ii) deleting the reference to
"$75,000,000" in the proviso thereof and replacing it with "$50,000,000".
(q) Section 6.13 of the Credit Agreement is hereby amended by
deleting Section 6.13 in its entirety and replacing it with the following:
"6.13. FISCAL YEAR. No Credit Party shall, nor shall it permit
any of its Subsidiaries to change its Fiscal Year-end."
SECTION II. CONDITIONS PRECEDENT TO EFFECTIVENESS
The effectiveness of the amendments set forth at Section I
hereof are subject to the satisfaction, or waiver, of the following conditions
on or before the date hereof (the "FIRST AMENDMENT CLOSING DATE"):
(a) The Company, Parent, other Credit Parties and Requisite
Lenders shall have indicated their consent by the execution and delivery of the
signature pages hereof to the Administrative Agent.
(b) The Administrative Agent shall have received a certificate
from an officer of the Company and Parent stating that as of the First Amendment
Closing Date, the representations and warranties contained in Section III herein
and in the other Credit Documents are true, correct and complete in all respects
on and as of the First Amendment Closing Date to the same extent as though made
on and as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case such representations and
warranties are true, correct and complete in all respects on and as of such
earlier date.
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(d) The Administrative Agent shall have received a certificate
from an officer of the Company and Parent stating that as of the First Amendment
Closing Date, no event has occurred and is continuing that would constitute an
Event of Default or a Default.
(e) The Administrative Agent shall have received, for
distribution to all Lenders executing this Amendment, an amendment fee equal to
0.20% of such Lender's Term Loans and Revolving Credit Commitment as of the date
hereof.
(f) Company shall have paid all fees and other amounts due and
payable on or prior to the First Amendment Closing Date, including, to the
extent invoiced, reimbursement or other payment of all out-of-pocket expenses
required to be reimbursed or paid by the Company hereunder or under any other
Credit Document.
(g) The Administrative Agent and Lenders shall have received
such other documents and information regarding Credit Parties and the Credit
Agreement as the Administrative Agent or Lenders may reasonably request.
SECTION III. REPRESENTATIONS AND WARRANTIES
A. CORPORATE POWER AND AUTHORITY. Each Credit Party has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under
the Credit Agreement and the other Credit Documents.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Credit Agreement and the other Credit
Documents have been duly authorized by all necessary corporate or partnership
(as applicable) action on the part of each Credit Party.
C. NO CONFLICT. The execution and delivery by each Credit
Party of this Amendment and the performance by each Credit Party of the Credit
Agreement and the other Credit Documents do not (i) violate (A) any provision of
any law, statute, rule or regulation, or of the certificate or articles of
incorporation or partnership agreement, other constitutive documents or by-laws
of each Credit Party or any of its Subsidiaries except to the extent such
violation could not reasonably be expected to have a Material Adverse Effect,
(B) any applicable order of any court or any rule, regulation or order of any
Governmental Authority except to the extent such violation could not reasonably
be expected to have a Material Adverse Effect or (C) any provision of any
indenture, certificate of designation for preferred stock, agreement or other
instrument to which each Credit Party or any of its Subsidiaries is a party or
by which any of them or any of their property is or may be bound except to the
extent such violation could not reasonably be expected to have a Material
Adverse Effect, (ii) be in conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under any such
indenture, certificate of designation for preferred stock, agreement or other
instrument, where any such conflict, violation, breach or default referred to in
this clause (ii) of this Section III.C., individually or in the aggregate could
reasonably be expected to have a Material Adverse Effect,
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(iii) result in or require the creation or imposition of any Lien upon any of
the properties or assets of each Credit Party (other than any Liens created
under any of the Credit Documents in favor of Administrative Agent on behalf of
Lenders), or (iv) require any approval of stockholders or partners or any
approval or consent of any Person under any contractual obligation of each
Credit Party, except for such approvals or consents which will be obtained on or
before the First Amendment Closing Date.
D. GOVERNMENTAL CONSENTS. No action, consent or approval of,
registration or filing with or any other action by any Governmental Authority is
required in connection with the execution and delivery by each Credit Party of
this Amendment and the performance by each Credit Party of the Credit Agreement
and the other Credit Documents, except for such actions, consents and approvals
the failure to obtain or make which could not reasonably be expected to result
in a Material Adverse Effect or which have been obtained and are in full force
and effect.
E. BINDING OBLIGATION. This Amendment and the Credit Agreement
have been duly executed and delivered by each Credit Party and each constitutes
a legal, valid and binding obligation of each Credit Party enforceable against
each Credit Party in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
DOCUMENTS. The representations and warranties contained in the Credit Documents
are and will be true, correct and complete in all material respects on and as of
the First Amendment Closing Date to the same extent as though made on and as of
that date, except to the extent such representations and warranties specifically
relate to an earlier date, in which case they were true, correct and complete in
all material respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Default.
SECTION IV. ACKNOWLEDGMENT AND CONSENT
Each of Parent and each wholly-owned Domestic Subsidiary of Parent
(other than Company) has (i) guaranteed the Obligations and (ii) created Liens
in favor of Lenders on certain Collateral (as defined in the Collateral
Documents) to secure its obligations under the Credit Agreement and the
Collateral Documents subject to the terms and provisions of the Credit
Agreement. Each of Parent and each wholly-owned Domestic Subsidiary of Parent
who has guaranteed the Obligations are collectively referred to herein as the
"CREDIT SUPPORT PARTIES", and the Credit Agreement and the Collateral Documents
are collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS".
Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Amendment and consents to
the amendment of the
13
Credit Agreement effected pursuant to this Amendment. Each Credit Support Party
hereby confirms that each Credit Support Document to which it is a party or
otherwise bound and all Collateral encumbered thereby will continue to guarantee
or secure, as the case may be, to the fullest extent possible in accordance with
the Credit Support Documents the payment and performance of all "Obligations"
under each of the Credit Support Documents, as the case may be (in each case as
such terms are defined in the applicable Credit Support Document), including
without limitation the payment and performance of all such "Obligations" under
each of the Credit Support Documents, as the case may be, in respect of the
Obligations of the Company now or hereafter existing under or in respect of the
Credit Agreement and hereby pledges and assigns to the Administrative Agent, and
grants to the Administrative Agent a continuing lien on and security interest in
and to all Collateral as collateral security for the prompt payment and
performance in full when due of the "Obligations" under each of the Credit
Support Documents to which it is a party (whether at stated maturity, by
acceleration or otherwise).
Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in the
Credit Agreement, this Amendment and the Credit Support Documents to which it is
a party or otherwise bound are true, correct and complete in all material
respects on and as of the First Amendment Closing Date to the same extent as
though made on and as of that date, except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true, correct and complete in all material respects on and as of such earlier
date.
Each Credit Support Party acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Amendment,
such Credit Support Party is not required by the terms of the Credit Agreement
or any other Credit Document to consent to the amendments to the Credit
Agreement effected pursuant to this Amendment and (ii) nothing in the Credit
Agreement, this Amendment or any other Credit Document shall be deemed to
require the consent of such Credit Support Party to any future amendments to the
Credit Agreement.
SECTION V. MISCELLANEOUS
A. BINDING EFFECT. This Amendment shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to the
benefit of the parties hereto and the successors and assigns of Lenders. No
Credit Party's rights or obligations hereunder or any interest therein may be
assigned or delegated by any Credit Party without the prior written consent of
all Lenders.
B. SEVERABILITY. In case any provision in or obligation hereunder shall
be invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
14
C. REFERENCE TO CREDIT AGREEMENT. On and after the First Amendment
Closing Date, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Credit Documents to the "Credit
Agreement", "thereunder", "thereof" or words of like import referring to the
Credit Agreement shall mean and be a reference to the Credit Agreement as
amended by this Amendment.
D. EFFECT ON CREDIT AGREEMENT. Except as specifically amended by this
Amendment, the Credit Agreement and the other Credit Documents shall remain in
full force and effect and are hereby ratified and confirmed.
E. EXECUTION. The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of any
provision of, or operate as a waiver of any right, power or remedy of any Agent
or Lender under, the Credit Agreement or any of the other Credit Documents.
F. HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
G. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
H. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. As set forth herein, this Amendment shall become effective upon
the execution of a counterpart hereof by each of the parties hereto and receipt
by Administrative Agent and Syndication Agent of written or telephonic
notification of such execution and authorization of delivery thereof.
[The remainder of this page is intentionally left blank.]
15
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY: PAYLESS SHOESOURCE FINANCE, INC.
By: /s/ Ullrich E. Porzig
--------------------------------------
Name: Ullrich E. Porzig
Title: President
GUARANTORS: PAYLESS SHOESOURCE, INC. (MO)
By: /s/ Ullrich E. Porzig
--------------------------------------
Name: Ullrich E. Porzig
Title: Senior Vice President-Chief
Financial Officer and Treasurer
DYELIGHTS, INC.
By: /s/ William J. Rainey
--------------------------------------
Name: William J. Rainey
Title: Vice President
PSS DELAWARE COMPANY 2, INC.
By: /s/ Ullrich E. Porzig
--------------------------------------
Name: Ullrich E. Porzig
Title: Vice President
PSS DELAWARE COMPANY 3, INC.
By: /s/ Ullrich E. Porzig
--------------------------------------
Name: Ullrich E. Porzig
Title: Vice President
PSS DELAWARE COMPANY 4, INC.
By: /s/ Ullrich E. Porzig
--------------------------------------
Name: Ullrich E. Porzig
Title: Vice President
PAYLESS SHOESOURCE, INC. (DE)
By: /s/ Ullrich E. Porzig
--------------------------------------
Name: Ullrich E. Porzig
Title: Senior Vice President-Chief
Financial Officer and Treasurer
PAYLESS SHOESOURCE GOLD VALUE, INC.
By: /s/ Ullrich E. Porzig
--------------------------------------
Name: Ullrich E. Porzig
Title: President
SHOE SOURCING, INC.
By: /s/ William J. Rainey
--------------------------------------
Name: William J. Rainey
Title: Vice President
PAYLESS PURCHASING SERVICES, INC.
By: /s/ Ullrich E. Porzig
------------------------------
Name: Ullrich E. Porzig
Title: President
EASTBOROUGH, INC.
By: /s/ William J. Rainey
------------------------------
Name: William J. Rainey
Title: Vice President
PAYLESS SHOESOURCE WORLDWIDE, INC.
By: /s/ William J. Rainey
------------------------------
Name: William J. Rainey
Title: Vice President
PSS LABOR LEASING, INC.
By: /s/ Ullrich E. Porzig
------------------------------
Name: Ullrich E. Porzig
Title: President
PSS INVESTMENT I, INC.
By: /s/ Ullrich E. Porzig
------------------------------
Name: Ullrich E. Porzig
Title: President
PSS INVESTMENT III, INC.
By: /s/ Ullrich E. Porzig
------------------------------
Name: Ullrich E. Porzig
Title: President
PAYLESS SHOESOURCE DISTRIBUTION, INC.
By: /s/ William J. Rainey
----------------------------------
Name: William J. Rainey
Title: Vice President
PAYLESS SHOESOURCE MERCHANDISING, INC.
By: /s/ William J. Rainey
----------------------------------
Name: William J. Rainey
Title: Vice President
PSS CANADA, INC.
By: /s/ Ullrich E. Porzig
----------------------------------
Name: Ullrich E. Porzig
Title: President
ADMINISTRATIVE AGENT
AND A LENDER: BANK ONE, NA
By: /s/ Debora K. Oberling
-------------------------
Name: Debora K. Oberling
Title: Director
SOLE SYNDICATION AGENT,
SOLE LEAD ARRANGER,
AND A LENDER: GOLDMAN SACHS CREDIT PARTNERS L.P.,
By: /s/ Elizabeth Fischer
-------------------------------
Name: Elizabeth Fischer
Title: Authorized Signatory
DOCUMENTATION AGENT
AND A LENDER: FIRST UNION NATIONAL BANK
By: /s/ Stephen T. Dorosh
-------------------------
Name: Stephen T. Dorosh
Title: Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
ABN AMRO Bank N.V.
By: /s/ W. Stephen Jones
-----------------------------
Name: W. Stephen Jones
Title: Senior Vice President
By: /s/ Peter J. Hallan
-----------------------------
Name: Peter J. Hallan
Title: Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
BANCO ESPIRITO SANTO, S.A., NASSAU BRANCH
By: /s/ Terry R. Hull
-----------------------------
Name: Terry R. Hull
Title: Senior Vice President
By: /s/ Andrew W. Orsen
-----------------------------
Name: Andrew W. Orsen
Title: Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
BANCO POPULAR DE PUERTO RICO
NEW YORK BRANCH
By: /s/ Hector A. Vina
------------------------
Name: Hector A. Vina
Title: Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
BANK OF CANTON OF CALIFORNIA
By: /s/ Ben C. Hom
-----------------------------------
Name: Ben C. Hom
Title: SVP & SENIOR CREDIT OFFICER
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
The Bank of New York
By: /s/ Charlotte Sohn Fuiks
----------------------------
Name: Charlotte Sohn Fuiks
Title: Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
Citizens Bank of Massachusetts
By: /s/ John E. Lucas
--------------------------
Name: John E. Lucas
Title: Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
EAST WEST BANK
By: /s/ Nancy A. Moore
-----------------------------
Name: Nancy A. Moore
Title: Senior Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
Fleet National Bank
By: /s/ Judith C.E. Kelly
-------------------------
Name: Judith C.E. Kelly
Title: Director
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
Fuji Bank, Limited
By: /s/ Nobuoki Koike
-----------------------------
Name: Nobuoki Koike
Title: Senior Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
HSBC Bank USA
By: /s/ Robert Corder
---------------------
Name: Robert Corfer
Title: FVP
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
Hua Nan Commercial Bank, Ltd. Los Angeles Branch
By: /s/ George Sheng-I Chang
-----------------------------
Name: George Sheng-I Chang
Title: SVP / General Manager
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
IKB Deutsche Industriebank AG
Luxembourg Branch
By: /s/ Ann Bohorquez
--------------------------
Name: Ann Bohorquez
Title: Assistant Director
By: /s/ Manfred Ziwey
--------------------------
Name: Manfred Ziwey
Title: Director
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
The International Commercial Bank of China
By: /s/ Chung-Yei Wang
-----------------------------------
Name: Chung-Yei Wang
Title: VP & Deputy General Manager
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
The Mitsubishi Trust and Banking Corporation
By: /s/ Hiroyuki Tsuru
------------------------------
Name: Hiroyuki Tsuru
Title: Deputy General Manager
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
RZB FINANCE LLC
By: /s/ John A. Valiska
----------------------------------
Name: John A. Valiska
Title: Vice President
By: /s/ Christoph Hoedl
----------------------------------
Name: Christoph Hoedl
Title: Assistant Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
UMB BANK, N.A.
By: /s/ Robert P. Elbert
------------------------
Name: Robert P. Elbert
Title: Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
United World Chinese Commercial Bank,
Los Angeles Agency
By: /s/ Tor-Tsai Thomas Tang
----------------------------
Name: Tor-Tsai Thomas Tang
Title: General Manager
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
US BANK NATIONAL ASSOCIATION
By: /s/ Amanda Smith
--------------------------------
Name: Amanda Smith
Title: Assistant Vice President
FIRST AMENDMENT TO THE
CREDIT AND GUARANTY AGREEMENT
To approve the First Amendment:
Name of Institution:
WELLS FARGO BANK TEXAS, N.A.
By: /s/ Christina M. Roche
----------------------------
Name: Christina M. Roche
Title: Relationship Manager