EXHIBIT 10 .1
FIRST AMENDMENT TO
AMENDED AND RESTATED
LOAN AND GUARANTY
AGREEMENT
This FIRST
AMENDMENT TO AMENDED
AND RESTATED LOAN
AND GUARANTY AGREEMENT
, dated as of December 19, 2007 (this “
First Amendment ”), to the Loan Agreement referred to below, among
COLLECTIVE BRANDS
FINANCE, INC. , a
Nevada corporation (formerly known as “ Payless ShoeSource Finance, Inc. ”, the “ Borrower ”), the guarantors
signatory hereto (the “ Guarantors ”), the Lenders (as
defined in the Loan Agreement), and WELLS
FARGO RETAIL FINANCE,
LLC , as administrative agent and
collateral agent for the Lenders (in such capacity, the
“ Administrative Agent
”).
RECITALS
WHEREAS, the Borrower, the Guarantors, the
Administrative Agent and the other Lenders party to the Amended and
Restated Loan and Guaranty Agreement dated as of August 17, 2007
(the “ Loan Agreement
”), desire to amend the Loan Agreement as set
forth herein; and
NOW THEREFORE, in consideration of the premises and
the covenants and agreements contained herein and other good and
valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as
follows:
Section 1.
Definitions .
Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Loan Agreement.
Section 2.
Amendments . The Loan
Agreement is, effective as of the Effective Date (as defined
below), hereby amended as follows:
(a)
Section 1.1 ( Defined
Terms ) of the Loan Agreement is hereby
amended by adding the following definitions in the appropriate
alphabetical order:
“ Disregarded
Entity ” means any entity that, for
U.S. federal tax purposes, is disregarded as an entity separate
from its owner or is otherwise fiscally transparent.
“ First Amendment
Effective Date ” means the
“Effective Date”, as defined in the First
Amendment.
“ Non-Domestic
Restructuring ” shall mean, (i)
subject to the proviso set forth below, (A) the creation of one or
more holding companies (each a “ Holding Company ”) that are
both Excluded Subsidiaries owned directly by a Loan Party and
Wholly-Owned Restricted Subsidiaries of the Borrower, (B) the
direct or indirect transfer, contribution, dividend or sale of the
Stock of certain Wholly-Owned Excluded Subsidiaries of the Borrower
to one or more of such Holding Companies or Payless ShoeSource
Canada, Inc. (“ Payless
Canada ”), or (ii) subject to the
proviso set forth below, an internal reorganization and
recapitalization among the Credit Parties and certain Restricted
Subsidiaries organized under the laws of the United States or
Canada to be completed after the Closing Date and on or before
January 31, 2008, unless such date is extended in writing by the
Administrative Agent (which extension shall not be for more than
one additional 30 day period) pursuant to which, (a) a portion of
the Target’s Voting Stock (the “ Transferred Stock” ) will be
transferred from the Borrower to one or more of its Wholly-Owned
Restricted Subsidiaries, (b) upon the completion of such transfers
of the Transferred Stock, the Target Stockholder will be a
Wholly-Owned Domestic Subsidiary, (c) one or more of the direct or
indirect holders of the Target Stockholder will contribute the
Transferred Stock to
one or more Wholly-Owned Restricted Subsidiaries in
exchange for a debenture, intercompany notes, equity and/or forward
subscription agreements, (d) any dividends or distributions with
respect to the Transferred Stock, to the extent paid in cash, shall
be utilized to repay the debenture and the intercompany notes, as
applicable, or any accrued or unpaid interest thereon, to make or
grant intercompany loans to Wholly-Owned Restricted Subsidiaries or
to fund dividends with no less than 75% of the proceeds thereof
ultimately being received by a Credit Party; provided, however , the foregoing
transactions in clause (i) or (ii) above
shall not constitute a “Non-Domestic Restructuring”,
unless (x) after giving effect to such transactions, no Default or
Event of Default shall have occurred and be continuing and (y) the
following conditions, as applicable, shall be satisfied at all
times from and after the consummation of such transactions: (1) in
the case of clause (ii) only, the Target Stockholder shall be a
Guarantor and shall, pursuant to the Pledge and Security Agreement,
pledge 100% of its ownership interest in the Transferred Stock to
the Administrative Agent and shall grant to the Administrative
Agent a Lien on any of its other assets, (2) in the case of clause
(ii) only, the Borrower or another Credit Party shall pledge 100%
of the Stock of any direct Subsidiary that is a Disregarded Entity
and that holds, directly or indirectly, any Stock in the Target
Stockholder, provided
that such Disregarded Entity is not an
“Investment Company” (as defined
in the Investment Company Act of 1940, as amended)
, (3) any intercompany note or debenture payable to
any Credit Party issued in connection with a Non-Domestic
Restructuring shall be pledged to the Administrative Agent as
additional Collateral under the Pledge and Security Agreement, (4)
in connection with the consummation of a Non-Domestic
Restructuring, no Credit Party shall be required to make any cash
Investment in any Holding Company or in the Target Stockholder or
any Restricted Subsidiary that holds, directly or indirectly, any
Stock in the Target other than such amounts required by statute or
for initial capitalization in an amount not to exceed $100,000 in
each instance, (5) each Holding Company, the Target Stockholder,
PSS Canada Financial Management Corp., PSS Canada Financial
Services Corp., PSS Canada Holdings Corp. and Collective Canada
Holdings Corp. shall not incur any Indebtedness (other than the
intercompany Indebtedness or debenture described above) or Liens
and shall not engage in any business or activity (other than
holding the Stock of its Subsidiaries, paying taxes, dividends,
distributions, interest or other business expenses, preparing
reports to Governmental Authorities and to its equity holders and
holding directors and shareholders meetings, preparing corporate
records and other corporate activities required to maintain its
separate corporate, limited liability or limited partnership
structure) and (6) each Holding Company, the Target Stockholder and
any Subsidiary of the Borrower that holds, directly or indirectly,
any Stock in the Target Stockholder shall remain Wholly-Owned
Restricted Subsidiaries of the Borrower.
“ Target
Stockholde r ” means the holder of the Transferred Stock (as defined
in the definition of Non-Domestic Restructuring) after giving
effect to the Non-Domestic Restructuring.
“ Voting
Stock ” means Stock of any Person
having ordinary power to vote in the election of members of the
board of directors, managers, trustees or other controlling
Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or
might have voting power by reason of the happening of any
contingency).
“ Wholly-Owned ” means, with
respect to a Subsidiary of any Person, any Subsidiary of such
Person, all of the Stock of which (other than director’s
qualifying shares, as may be required by law) is owned by such
Person, either directly or indirectly through one or more
Wholly-Owned Subsidiaries of such Person.
(b)
The definition of “ Permitted Investment ” in
Section 1.1 ( Defined Terms
) of the Loan Agreement is hereby amended by
inserting the following new sentence immediately following clause
(g) thereof:
For purposes of determining the value of any
Investment outstanding for purposes of any subclause of
Section 7.10 , such
amount, when aggregated with the amount of all other Investments
made pursuant to such subclause, shall deemed to be the amount of
all such Investments when made, purchased or acquired on or after
the Closing Date less the amount of any returns received by the
Credit Parties after the Closing Date on such Investments (without
duplication but not to exceed the aggregate of the original amounts
invested pursuant to such subclause) and, in the case of any
Investments made pursuant to clauses
(e)(v) or (i)(B) of Section 7.10 , less the amount
of any returns received by the Credit Parties after the Closing
Date on any Investments in Qualified Restricted Subsidiaries
identified on Schedule 7.10
.
(c) Section 5.7(c) of the Loan Agreement is hereby
amended by deleting the first clause from inception through the
word “showing,” and inserting the following as a new
clause thereof:
Set forth on Schedule
5.7(c) is a complete and accurate list of
each Credit Party’s direct and indirect Subsidiaries showing,
as of the First Amendment Effective Date,
(d) Section 5.10 (
No Material Adverse Changes
) of the Loan Agreement is hereby amended by
inserting the following clause immediately following the
parenthetical:
in the case of the Borrower and any Wholly Owned
Domestic Subsidiary, or, in the case of the financial statements of
any Excluded Subsidiary, have been prepared or maintained in
accordance with generally accepted accounting principles of its
country of origin and, in addition, have been prepared for
consolidation in accordance with GAAP
(e) Section 5.14 ( Investment Company Act ) of the Loan
Agreement is deleted in its entirety and substituting the following
in its place:
None of the Credit Parties is an “
investment company ,” or “ promoter ” or “
principal underwriter ” for an “ investment
company ,” as such terms are
defined in the Investment Company Act of 1940, as
amended.
(f) Section 6.1 (
Accounting System ) of
the Loan Agreement is hereby amended by inserting the following
parenthetical at the end of the first sentence thereof:
(or, in the case of any Restricted Subsidiary that
is an Excluded Subsidiary, such consolidated records shall be
maintained in accordance with the generally accepted accounting
principles of its country of origin and, in addition, shall have
been prepared for consolidation in accordance with GAAP)
(g)
