EXHIBIT 10.17.5
THIRD AMENDMENT AND WAIVER AND CONSENT AGREEMENT - AMENDED AND
RESTATED LOAN AND SECURITY AGREEMENT
This THIRD AMENDMENT AND WAIVER AND CONSENT AGREEMENT (this "THIRD
AMENDMENT") is made as of this 2nd day of January, 2004 by and among
FLEET RETAIL FINANCE INC. (the "LENDER"), a Delaware
corporation with offices at 00 Xxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000,
and
BAKERS FOOTWEAR GROUP, INC., f/k/a Xxxxx and Xxxxxx
Shoe Co. (the "BORROWER"), a Missouri corporation with its
principal executive offices at 0000 Xxxxx Xxxxxx, Xxxxx X,
Xx. Xxxxx, Xxxxxxxx 00000,
in consideration of the mutual covenants contained herein and benefits to be
derived herefrom,
WITNESSETH:
A. Reference is made to that certain Amended and Restated Loan
and Security Agreement (as amended to date, the "LOAN
Agreement") dated as of June 11, 2002 between the Borrower and
the Lender.
B. The Borrower and the holders (the "HOLDERS") of those certain
Subordinated Convertible Debentures (the "2002 DEBENTURES")
each dated April 4, 2002 and listed on Exhibit 4.8 to the Loan
Agreement, entered into that certain Debenture Purchase
Agreement, dated as of April 4, 2002 (the "PURCHASE
AGREEMENT"), pursuant to which the Holders purchased the 2002
Debentures from the Borrower.
C. In connection with the Purchase Agreement, the Borrower
agreed, on the terms and conditions set forth herein, to
register for resale under the Securities Act of 1933 (the
"SECURITIES ACT"), shares of its voting common equity issuable
to the Holders upon conversion of the 2002 Debentures,
pursuant to that certain Registration Rights Agreement, dated
April 4, 2002 (the "2002 REGISTRATION RIGHTS AGREEMENT").
D. The Holders have agreed with the Borrower to exchange their
2002 Debentures for new subordinated convertible debentures
(the "NEW DEBENTURES") in the form attached as EXHIBIT A
hereto pursuant to that certain Convertible Debenture Exchange
Agreement, dated as of even date herewith (the "EXCHANGE
AGREEMENT") in the form attached as EXHIBIT B hereto.
E. The Borrower has filed a registration statement on Form S-1
(No. 333-86322, as amended from time to time, the "EXISTING
REGISTRATION STATEMENT") with the Securities
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and Exchange Commission under the Securities Act, which
Existing Registration Statement has not yet been declared
effective by the SEC. The Borrower anticipates that the
Existing Registration Statement will be declared effective and
the IPO will be consummated on or before February 29, 2004.
F. In connection with the Exchange Agreement, the Holders and
Borrower agreed to amend and restate the 2002 Registration
Rights Agreement in its entirety and to replace it, subject to
certain conditions, with that certain Second Registration
Rights Agreement dated as of the date hereof (the "SECOND
REGISTRATION RIGHTS AGREEMENT") in the form attached as
EXHIBIT C hereto.
G. The Loan Agreement prohibits the Borrower from exchanging the
2002 Debentures for the New Debentures and the Borrower has
requested that the Lender waive such prohibition.
Accordingly, the Borrower and the Lender agree as follows:
1. DEFINITIONS. Terms defined in the Recitals shall be
incorporated herein as therein defined. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Loan Agreement.
2. AMENDMENT TO LOAN AGREEMENT. The definitions "Change in
Control" and "IPO" shall be deleted from Article I of the Loan Agreement and
the following shall be substituted therefor:
"CHANGE IN CONTROL": The occurrence of any of the following:
A. Prior to the occurrence of the IPO:
(i) Any event such that Xxxxx Xxxxxx and direct
family members of Xxxxx Xxxxxx, including, trust entities
created, for estate planning purposes, for the benefit of the
foregoing individuals, cease to own and otherwise control
fifty-one percent (51%) or more of the issued and outstanding
capital stock of the Borrower having the right, under ordinary
circumstances, to vote for the election of directors of the
Borrower and/or such that Xxxxx Xxxxxx shall be unable to
control at all times the appointment of the sole director of
the Borrower.
(ii) Any event such that Xxxxx Xxxxxx shall cease,
for any reason, to be the sole director of the Borrower,
except that it shall not be deemed a Change in Control
hereunder if, in order to facilitate changes required for the
IPO, any or all of Xxxxxxx X. Bergerac, Xxxxxx X. Xxxx,
Xxxxxxx X. Xxxxxx, Xxxxx X. Xxxx, Xxxxx X. Xxxxxxx, Xxxxxxx
Xxxxxx and/or Xxxxxx Xxxxxx are made directors of the Borrower
and Xxxxx Xxxxxx is named chairman of the board of directors
of the Borrower.
B. On and after the occurrence of the IPO:
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(i) The purchase or other acquisition by any Person
or group of Persons (within the meaning of Rule 13d-3 or Rule
14d of the Securities Exchange Act of 1934, as amended)
(excluding, for this purpose, the Borrower or its subsidiaries
or any employee benefit plan of the Borrower or its
subsidiaries) of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities Exchange Act of 1934, as amended)
of either the then-outstanding shares of the Borrower's common
stock or the combined voting power of the Borrower's
then-outstanding voting securities entitled to vote generally
in the election of directors, exceeding (x) that of Xxxxx
Xxxxxx (provided that this does not occur because Xxxxx Xxxxxx
has reduced the number of shares or voting power owned by him
by more than 20% from the date of the occurrence of the IPO),
or (y) 50% of either the then-outstanding shares of common
stock of the Borrower or the combined voting power of the
Borrower's then-outstanding voting securities entitled to vote
generally in the election of directors; or
(ii) A reorganization, merger, consolidation, sale of
all or substantially all of the assets of the Borrower, or
similar transaction, in each case with respect to which
Persons who were the stockholders of the Borrower immediately
prior to such reorganization, merger or consolidation would
not immediately thereafter own more than 50% of, respectively,
the Borrower's common stock and the combined voting power
entitled to vote generally in the election of directors of the
reorganized, merged, consolidated or successor corporation's
then-outstanding voting securities; or
(iii) Xxxxx Xxxxxx shall cease, for any reason, to be
the chairman of the board of directors of the Borrower; or
(iv) During any period of two (2) consecutive years,
individuals who at the beginning of such period constituted
the board of directors of the Borrower (together with any
directors whose election or appointment by the board of
directors of the Borrower or whose nomination for election by
the shareholders of the Borrower was approved by vote of a
majority of the directors then still in office who are either
directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for
any reason to constitute a majority of the board of directors
of the Borrower then in office."
"IPO": The receipt by the Borrower of aggregate net cash
proceeds of no less than $8,000,000.00 as a result of the
issuance and sale of common stock of the Borrower as set forth
in a Registration Statement on Form S-1 as filed with the
Securities & Exchange Commission (Registration No. 333-86322),
as such Registration Statement may be amended from time to
time."
3. WAIVER AND CONSENT. Subject to satisfaction of the conditions
to effectiveness set forth in Section 6 below, the Lender hereby (a) waives the
prohibition in the Loan Agreement regarding the exchange of the 2002 Debentures
for the New Debentures and (b) consents to the issuance by the Borrower of the
New Debentures, and the execution and delivery by the Borrower of the Exchange
Agreement and Second Registration Rights Agreement and the performance by the
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Borrower of its obligations thereunder and under the 2002 Registration Rights
Agreement, as applicable.
4. ADDITIONAL ACKNOWLEDGMENTS AND REPRESENTATIONS. As an
inducement for the Lender to execute this Third Amendment, the Borrower hereby
represents and warrants that as of the date hereof (i) no Suspension Event has
occurred and is continuing; and (ii) none of the principal outstanding under any
of the 2002 Debentures has matured or otherwise become due and payable.
5. RATIFICATION OF LOAN DOCUMENTS; NO CLAIMS AGAINST LENDER.
Except as provided herein, all terms and conditions of the Loan Agreement and of
the other Loan Documents remain in full force and effect. Each of the Borrower
and the Guarantor hereby ratifies, confirms, and re-affirms all and singular the
terms and conditions, including execution and delivery, of the Loan Documents.
There is no basis nor set of facts on which any amount (or any portion thereof)
owed by the Borrower or the Guarantor to the Lender could be reduced, offset,
waived, or forgiven, by rescission or otherwise; nor is there any claim,
counterclaim, off set, or defense (or other right, remedy, or basis having a
similar effect) available to the Borrower or to the Guarantor with regard to the
respective Liabilities of the Borrower and the Guarantor to the Lender; nor is
there any basis on which the terms and conditions of any of the respective
Liabilities of the Borrower and of the Guarantor to the Lender could be claimed
to be other than as stated on the written instruments which evidence such
Liabilities. To the extent that the Borrower or the Guarantor has (or ever had)
any such claims against the Lender, each hereby affirmatively WAIVES and
RELEASES same.
6. CONDITIONS TO EFFECTIVENESS. This Third Amendment shall not
be effective until each of the following conditions precedent have been
fulfilled to the satisfaction of the Lender:
(a) This Third Amendment shall have been duly executed
and delivered by the respective parties hereto, shall be in full force
and effect and shall be in form and substance satisfactory to the
Lender;
(b) All action on the part of the Borrower necessary for
the valid execution, delivery and performance by the Borrower of this
Third Amendment shall have been duly and effectively taken and evidence
thereof satisfactory to the Lender shall have been provided to the
Lender;
(c) The Borrower shall have paid to the Lender all fees
and expenses then due and owing pursuant to the Loan Agreement;
(d) The Borrower shall have delivered to the Lender
copies of each executed New Debenture, the Exchange Agreement and the
Second Registration Rights Agreement;
(e) Each Holder shall have entered into an Amended and
Restated Intercreditor and Subordination Agreement in the form attached
as EXHIBIT D hereto; and
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(f) The Borrower shall have provided such additional
instruments and documents to the Lender as the Lender and Lender's
counsel may have reasonably requested, each in form and substance
satisfactory to the Lender.
7. MISCELLANEOUS.
(a) This Third Amendment may be executed in several
counterparts and by each party on a separate counterpart, each of which
when so executed and delivered shall be an original, and all of which
together shall constitute one instrument.
(b) This Third Amendment expresses the entire
understanding of the parties with respect to the transactions
contemplated hereby. No prior negotiations or discussions shall limit,
modify, or otherwise affect the provisions hereof.
(c) Any determination that any provision of this Third
Amendment or any application hereof is invalid, illegal, or
unenforceable in any respect and in any instance shall not affect the
validity, legality, or enforceability of such provision in any other
instance, or the validity, legality, or enforceability of any other
provisions of this Third Amendment.
(d) The Borrower shall pay on demand all reasonable costs
and expenses of the Lender, including, without limitation, reasonable
attorneys' fees in connection with the preparation, negotiation,
execution, and delivery of this Third Amendment.
(e) THIS THIRD AMENDMENT SHALL BE CONSTRUED, GOVERNED,
AND ENFORCED PURSUANT TO THE INTERNAL LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS AND SHALL TAKE EFFECT AS SEALED INSTRUMENT.
[SPACE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties have hereunto caused this Third
Amendment to be executed and their seals to be hereto affixed as of the date
first above written.
BAKERS FOOTWEAR GROUP, INC.,
F/K/A XXXXX AND XXXXXX SHOE CO.
By /s/ Xxxxx X. Xxxxxx
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Name Xxxxx X. Xxxxxx
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Title Chairman & CEO
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FLEET RETAIL FINANCE INC.
By /s/ Xxxxx X. Xxxx
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Name Xxxxx X. Xxxx
------------------------------------------
Title Managing Director
-----------------------------------------
/S-1/
The undersigned Guarantor hereby (i) consents to the terms and
conditions of this Third Amendment and hereby joins in the acknowledgments and
agreements set forth in this Third Amendment, all as of the date first above
written, (ii) ratifies and confirms the warranties and representations set forth
in the Guaranty, and acknowledges that pursuant to the terms of the Guaranty,
the Guarantor previously guaranteed the payment of the Liabilities of the
Borrower to the Lender to the extent set forth in such Guaranty, that this
acknowledgment is being executed as a confirmation of the Guarantor's
obligations to Lender under the Guaranty and that, subject to the limitations
contained in the Guaranty, the Guarantor shall remain liable for all of the
Liabilities, now existing or hereafter arising, whether or not any similar
confirmation letter is executed in the future and (iii) acknowledges and agrees
that he has no offsets, defenses, or counterclaims against the Lender with
respect to his obligations under the Guaranty or otherwise, and to the extent
that the Guarantor has any such offsets, defenses, or counterclaims, the
Guarantor hereby WAIVES and RELEASES the same.
/s/ Xxxxx Xxxxxx
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XXXXX XXXXXX
[All exhibits omitted. The Registrant undertakes to furnish a supplemental copy
of such omitted exhibits to the Commission upon request.]
