EXHIBIT 10.16
RESTRUCTURING AGREEMENT
JUST FOR FEET, INC.
-and-
MEMBERS OF AD HOC COMMITTEE
OF CERTAIN HOLDERS OF 11% SENIOR SUBORDINATED NOTES
DUE MAY 1, 2009
Dated: November 2, 0000
Xxx Xxxx, Xxx Xxxx
TABLE OF CONTENTS
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This table of contents is not part of the Agreement to which it is attached
but is inserted for convenience only.
Section Page
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1 Means For Effectuating Financial Restructuring...................................... 1
2 Conduct of Business Pending the Effective Date of Plan.............................. 2
3 Forbearance; Restrictions on Transfers.............................................. 3
4 Voting.............................................................................. 3
5 Preparation of Restructuring Documents.............................................. 3
6 Feet Undertakings................................................................... 4
7 Third Party Approvals; Support of the Financial Restructuring....................... 4
8 Representations and Warranties...................................................... 4
9 Termination of Agreement............................................................ 5
10 Conditions to Consenting Holders' Obligation to Consummate Financial
Restructuring....................................................................... 7
11 Conditions to Feet's Obligation to Consummate Financial Restructuring............... 8
12 Good Faith Negotiations of Financial Restructuring Documents........................ 8
13 Acknowledgment...................................................................... 8
14 Effectiveness; Amendments; Consenting Holders....................................... 9
15 Disclosures......................................................................... 9
16 Impact of Appointment to Creditors' Committee....................................... 9
17 Governing Law; Jurisdiction......................................................... 9
18 Specific Performance................................................................ 9
19 Reservation of Rights............................................................... 10
20 Fees, Expenses and Indemnification.................................................. 10
21 Survival............................................................................ 10
22 Headings............................................................................ 11
23 Successors and Assigns.............................................................. 11
24 Notice.............................................................................. 11
25 Prior Negotiations.................................................................. 12
26 Counterparts........................................................................ 12
27 No Third Party Beneficiaries........................................................ 12
28 Consideration....................................................................... 12
29 Additional Noteholders.............................................................. 12
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GLOSSARY OF DEFINED TERMS
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The following terms, when used in this Agreement, have the meanings
ascribed to them in the corresponding Sections of this Agreement listed below:
Term Section
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"Agreement"........................................................................... Preamble
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"Bankruptcy Code"..................................................................... Section 1
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"Bankruptcy Court".................................................................... Section 1
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"Bankruptcy Rules".................................................................... Section 1
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"Chapter 11 Cases".................................................................... Section 1
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"Chapter 11 Documents"................................................................ Section 5
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"Committee"........................................................................... Preamble
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"Consenting Holder"................................................................... Preamble
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"Consenting Holders Termination Event"................................................ Section 9
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"Disclosure Statement"................................................................ Section 5
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"Feet"................................................................................ Preamble
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"Financial Restructuring"............................................................. Preamble
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"Forbearance Period".................................................................. Section 3
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"Indenture"........................................................................... Preamble
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"JFF"................................................................................. Preamble
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"JFF Termination Event"............................................................... Section 9
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"Junior Credit Facility".............................................................. Section 2
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"Junior Lenders"...................................................................... Section 2
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"Lenders"............................................................................. Section 2
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"Notes"............................................................................... Preamble
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"Official Committee".................................................................. Section 20
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"Petition"............................................................................ Section 1
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"Plan"................................................................................ Section 1
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"Relevant Securities"................................................................. Section 4
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"Senior Credit Facility".............................................................. Section 2
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"Senior Lenders"...................................................................... Section 2
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"Term Sheet".......................................................................... Preamble
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"Trustee"............................................................................. Preamble
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This RESTRUCTURING AGREEMENT (the "Agreement"), is dated as of
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November 2, 1999, by and between Just For Feet, Inc. ("Feet"), a Delaware
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corporation (and collectively with its direct and indirect subsidiaries and
affiliates "JFF"), and each of the undersigned holders or investment manager or
---
advisor for certain discretionary accounts that are holders or beneficial owners
(each, a "Consenting Holder"), of Feet's 11% Senior Subordinated Notes due 2009
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(the "Notes") issued under that certain indenture (the "Indenture") dated as of
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April 15, 1999, between Feet and The Bank of New York, as trustee (the
"Trustee") and guaranteed by various subsidiaries and affiliates of JFF.
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WHEREAS, JFF and an ad hoc committee of certain holders of the Notes
(the "Committee") have engaged in good faith negotiations with the objective of
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reaching an agreement with regard to a financial restructuring of JFF, including
the indebtedness outstanding under the Notes;
WHEREAS, Feet and the Committee have agreed to implement a financial
restructuring (the "Financial Restructuring") of JFF on the terms set forth on
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the term sheet (the "Term Sheet") attached hereto as Exhibit A and incorporated
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herein by reference;/1/
WHEREAS, to expedite and ensure the implementation of the Financial
Restructuring, each of the Consenting Holders is prepared to commit, on the
terms and subject to the conditions of this Agreement and applicable bankruptcy
law, to, if and when solicited to do so, vote (or, in the case of managed
accounts, instruct its custodial agents to vote) to accept the Plan (as defined
below), to support its confirmation, and to perform its other obligations
hereunder.
NOW THEREFORE, in consideration of the promises and mutual covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, Feet and each
Consenting Holder hereby agree as follows:
1. Means For Effectuating Financial Restructuring. To implement the
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Financial Restructuring, Feet has agreed, on the terms and conditions set forth
herein, to consummate, and to cause each of its direct and indirect subsidiaries
to consummate, the Financial Restructuring through a plan of reorganization (the
"Plan"), the requisite acceptances of which will be solicited after JFF
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commences reorganization cases (the "Chapter 11 Cases") by filing voluntary
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petitions (collectively, the "Petition") under chapter 11 of title 11 of the
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United States Code, 11 U.S.C. (S)(S) 101-1330 (as amended, the "Bankruptcy
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Code"), and to use its best efforts to have such Plan confirmed by the United
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States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"),
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as expeditiously as possible under the Bankruptcy Code, the Federal Rules of
Bankruptcy Procedure, and the local Bankruptcy Rules of the Bankruptcy Court
(the federal and local rules being, the "Bankruptcy Rules").
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____________________
/1/ All capitalized terms not defined herein shall have the meanings ascribed
to them in the Term Sheet.
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2. Conduct of Business Pending the Effective Date of Plan. Feet
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agrees that, prior to the Effective Date, unless otherwise expressly permitted
by this Agreement (or by consent of the Consenting Holders):
(a) Feet shall not directly or indirectly, and shall cause each
of its direct and indirect subsidiaries not to directly or indirectly,
engage in, agree to, or consummate any transaction outside the
ordinary course of its business, including without limitation, a
merger, business combination, security issuance, selling transaction,
or leasing of assets;
(b) Feet shall not directly or indirectly, and shall cause each
of its direct and indirect subsidiaries not to directly or indirectly,
do or permit to occur any of the following: (i) issue, sell, pledge,
dispose of or encumber any additional shares of, or any options,
warrants, conversion privileges or rights of any kind to acquire any
shares of, any of its equity interests including without limitation
partnership interests or capital stock, provided, however, that Feet
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may issue shares of its Common Stock pursuant to options previously
and properly granted under a qualified employee stock ownership plan;
(ii) amend or propose to amend its respective articles of
incorporation, partnership agreement or comparable organizational
documents; (iii) split, combine or reclassify any outstanding shares
of its capital stock or other equity interests, or declare, set aside
or pay any dividend or other distribution payable in cash, stock,
property or otherwise with respect to any of its equity interests
including without limitation partnership interests or capital stock;
(iv) redeem, purchase or acquire or offer to acquire any of its equity
interests including without limitation partnership interests or
capital stock; (v) acquire (by merger, exchange, consolidation,
acquisition of stock or assets or otherwise) any corporation,
partnership, joint venture or other business organization or division
or material assets thereof; (vi) incur any indebtedness for borrowed
money or issue any debt securities outside the ordinary course of
business, except in connection with any restructuring or satisfaction
of its Credit Agreement (the "Senior Credit Facility"), dated as of
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September 24, 1999, entered into among Just For Feet, Inc., as
borrower, various Feet entities as guarantors, various lending
institutions led by Bank of America, N.A., as administrative agent
(the lenders to the Senior Credit Facility, the "Senior Lenders") or
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its Credit Agreement (the "Junior Credit Facility"), entered into as
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of September 23, 1999, entered into among Just For Feet, Inc., as
borrower, various Feet entities as guarantors, various lending
institutions led by Bank of America, N.A., as administrative agent
(the lenders to the Junior Credit Facility, the "Junior Lenders" and,
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together with the Senior Lenders, the "Lenders"), including any
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debtor-in-possession financing, the terms of which are reasonably
acceptable to the Committee, obtained by Feet and/or JFF as part of or
in connection with the Chapter 11 Cases; or (vii) enter into or
propose to enter into, or modify or propose to modify, any agreement,
arrangement or understanding with respect to any of the matters set
forth in this Section 2(a); and
(c) Feet shall and shall cause each of its direct and indirect
subsidiaries to (i) maintain its good standing under the laws of the
State or other
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jurisdiction in which it is incorporated or organized and (ii) notify
the Consenting Holders of any governmental or third party complaints,
investigations or hearings (or communications indicating that the same
may be contemplated or threatened) which could reasonably be
anticipated to materially adversely affect the business, property, or
financial condition of JFF considered as one enterprise.
3. Forbearance; Restrictions on Transfers. For a period commencing as
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of the effective date hereof until the earlier to occur of (i) the occurrence of
a Consenting Holders Termination Event and (ii) Feet's termination of this
Agreement after the occurrence of a JFF Termination Event (each as defined
below) (such period, the "Forbearance Period"), each of the Consenting Holders
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hereby agrees (a) to forbear (and agrees not to give instructions to the Trustee
that are inconsistent with the terms and conditions of this Agreement) from the
exercise of any rights or remedies it may have under the Indenture, applicable
law, or otherwise with respect to any default existing as of the date hereof or
arising hereafter under the Indenture and (b) not to sell, assign, transfer,
hypothecate or otherwise dispose of, directly or indirectly (i) any Notes
beneficially owned by it or as to which it has investment authority or
discretion (including Notes acquired after the date hereof) or (ii) any option,
interest in, or right to acquire any Notes referred to in clause (i) above,
unless the transferee agrees in writing to assume and be bound by the terms of
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this Agreement.
4. Voting. Each of the Consenting Holders represents that, as of the
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date hereof, it is the beneficial owner of, and/or the investment adviser or
manager (with the power to vote and dispose of all or substantially all of the
Relevant Securities (as defined below) on behalf of their beneficial owners) of
discretionary accounts for the holders or beneficial owners of, the aggregate
principal amount of the Notes as set forth on its signature page (the "Relevant
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Securities"). Each of the Consenting Holders agrees that, subject to the
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conditions that (i) the material terms of any applicable agreements, including
without limitation the Plan, implementing the Financial Restructuring embody the
terms set forth in the Term Sheet, (ii) all final documents are in form and
substance satisfactory to each Consenting Holder and all agreements have been
entered into by all applicable parties and have become valid, binding, and
enforceable, (iii) no Consenting Holders Termination Event shall have occurred
and be continuing, and (iv) Feet has not terminated this Agreement after the
occurrence of a JFF Termination Event and none of its direct and indirect
subsidiaries shall have taken any action inconsistent with this Agreement, it
shall, when solicited, (a) vote to accept the Plan and (b) not object to
confirmation of the Plan; provided, however, that no Consenting Holder shall be
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barred from (x) objecting to compliance with Bankruptcy Code section 1125 or
other applicable law relating to disclosure, if it reasonably believes the
Disclosure Statement or other document received by such Consenting Holder lacks
adequate information (as defined in section 1125(a)(1) of the Bankruptcy Code)
or (y) taking any action that does not directly or indirectly conflict with the
provisions of the Term Sheet.
5. Preparation of Restructuring Documents. Promptly upon the
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execution of this Agreement, Feet shall instruct its counsel to prepare for the
review and approval of the parties hereto the following documents: (a) the
Petition; (b) a disclosure statement (the "Disclosure Statement") pursuant to
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section 1125 of the Bankruptcy Code; (c) the Plan, which shall incorporate the
terms and provisions of the Term Sheet, (d) all schedules, motions, pleadings,
and other papers necessary or useful in connection with the filing of the
Petition or the motions to be presented to the court on or shortly after the
date of the Petition; (e) any additional
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documents that Feet or the Consenting Holders deem(s) reasonably necessary or
appropriate to consummate the Financial Restructuring; and (f) except for those
documents referenced in the paragraph below, all other restructuring agreements
and documents including, without limitation, new or amended certificates of
incorporation, to implement the Plan according to the Term Sheet.
Counsel for the Committee shall prepare for the review and approval of
the parties hereto the registration rights agreement (all provisions and
documents referred to in this section 5, the "Chapter 11 Documents"). All
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parties shall coordinate with one another in preparation of the Chapter 11
Documents.
The Chapter 11 Documents, including without limitation the Plan and
any motion regarding the assumption, assumption and assignment, or rejection of
any executory contract or unexpired lease, must be acceptable in form and
substance to counsel for the Consenting Holders, and such documents shall not be
filed with the Bankruptcy Court without the prior written consent of the
Consenting Holders which consent shall not be unreasonably withheld.
6. Feet Undertakings. Feet hereby agrees to use its reasonable best
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efforts, and shall cause its direct and indirect subsidiaries to use their
reasonable best efforts, to, as applicable, (i) take all acts reasonably
necessary to effectuate and consummate the Financial Restructuring and the Plan
and (ii) implement all reasonable steps necessary and desirable to obtain an
order of the Bankruptcy Court confirming the Plan, in each case, as
expeditiously as possible under the Bankruptcy Code and the Bankruptcy Rules.
7. Third Party Approvals; Support of the Financial Restructuring.
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Feet shall use its reasonable best efforts, and shall cause its direct and
indirect subsidiaries to use their reasonable best efforts, to obtain all
regulatory, governmental, administrative, and third party approvals of the
Financial Restructuring or confirmation of the Plan, and to promptly consummate
the Financial Restructuring. Each Consenting Holder and Feet will take all
necessary and appropriate actions to achieve the Financial Restructuring on the
timetable set forth herein.
8. Representations and Warranties. Feet, on the one hand, and each of
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the Consenting Holders on the other, represents and warrants to each other that
the following statements are true, correct and complete as of the date hereof:
(a) Power and Authority. Each party hereto has all requisite power
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and authority to enter into this Agreement and to carry out the
transactions contemplated by, and perform its respective obligations
under, this Agreement;
(b) Authorization. The execution and delivery of this Agreement
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and the performance of its obligations hereunder have been duly
authorized by all necessary action on its part;
(c) No Conflicts. The execution, delivery and performance by it of
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this Agreement do not and shall not (i) violate any provision of law,
rule or regulation applicable to it or any of its subsidiaries or its
organizational documents or those of any of its subsidiaries or its
organizational documents or
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those of any of its subsidiaries, or (ii) conflict with, result in a
breach of or constitute (with due notice or lapse of time or both) a
default under any material contractual obligation to which JFF is a
party or under its organizational documents;
(d) Governmental Consents. The execution, delivery and
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performance by it of this Agreement do not and shall not require any
registration or filing with consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental
authority or regulatory body, except such filings as may be necessary
and/or required under the federal securities laws and, in connection
with the commencement of the Chapter 11 Cases, the approval of the
Disclosure Statement and confirmation of Plan;
(e) Binding Obligation. This Agreement is a legally valid and
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binding obligation of each of the undersigned, enforceable against it
in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or limiting creditor's rights generally or by
equitable principles relating to enforceability; and
(g) Representation by Counsel. Each party hereto acknowledges
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that it has been represented by counsel in connection with this
Agreement and the transactions contemplated by this Agreement. The
provisions of this Agreement shall be interpreted in a reasonable
manner to effect the intent of the parties hereto.
9. Termination of Agreement. This Agreement and the Forbearance
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Period shall terminate automatically without the act of any party upon the
occurrence of any Consenting Holders Termination Event (as hereinafter defined),
unless the occurrence of such Consenting Holders Termination Event is waived in
writing within three (3) days of its occurrence by Consenting Holders holding or
managing more than a majority of the face amount of the Relevant Securities. If
any Consenting Holders Termination Event occurs (and has not been waived) or
Feet terminates this Agreement after the occurrence of a JFF Termination Event
at a time when permission of the Bankruptcy Court shall be required for a
Consenting Holder to change or withdraw (or cause to be changed or withdrawn)
its votes to accept the Plan, JFF shall not oppose any attempt by such
Consenting Holder to change or withdraw (or cause to be changed or withdrawn)
such votes at such time. Upon the occurrence of a Consenting Holders Termination
Event or a termination of this Agreement by Feet after the occurrence of a JFF
Termination Event, each of the Consenting Holders shall have all rights and
remedies available to it under the Indenture, other documents relating to the
Notes, applicable law, or otherwise, with respect to any default under the
Indenture that may have occurred at any time prior to such event including,
without limitation, Feet's failure to pay interest on November 1, 1999 as
required under the Indenture.
A "Consenting Holders Termination Event" shall mean any of the
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following:
(a) The Plan shall not have been filed within twenty (20) days
after the
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commencement of the Chapter 11 Cases;
(b) The Effective Date of the Plan in accordance with its terms shall
not have occurred on or before February 29, 2000;
(c) A trustee or examiner with enlarged powers shall have been
appointed under section 1104 or 105 of the Bankruptcy Code for service in
the Chapter 11 Cases;
(d) Any of the Chapter 11 Cases shall have been converted to a case
under chapter 7 of the Bankruptcy Code;
(e) Either or both of JFF's exclusive periods within which to file a
plan or to solicit acceptances thereof under section 1121 of the Bankruptcy
Code is terminated;
(f) JFF shall have entered into, moved for Bankruptcy Court approval
of, or consummated any settlement involving any claim (as defined in
section 101(5) of the Bankruptcy Code) by or against JFF of an amount in
excess of $1 million, in any such case without the prior approval of the
Committee;
(g) The Plan provides or is modified to provide for any terms that
are materially adverse to the terms set forth in the Term Sheet, it being
understood that any improvement in the distribution to Consenting Holders
under the Plan shall not be deemed to be materially adverse (so long as
such improvement does not impair the recovery of other Consenting Holders);
(h) After filing the Plan, JFF (i) submits a second or amended plan
of reorganization that does not incorporate all the terms and provisions of
the Term Sheet, or (ii) withdraws (or moves to withdraw) the Plan;
(i) JFF shall have materially breached any provision of this
Agreement, including, but not limited to, (x) failing to use its best
efforts to obtain approval of the Disclosure Statement and/or confirmation
of the Plan and (y) Section 2 hereof;
(j) There shall have occurred, directly or indirectly, after the date
hereof and before the Effective Date of the Plan, any material adverse
change (other than the commencement of the Chapter 11 Cases or any
consequences that derive directly from the commencement of the Chapter 11
Cases) in the condition (financial or otherwise), business, assets,
liabilities or results of operations of JFF (considered as one enterprise);
(k) The fiduciary duties of any Consenting Holder, as reasonably
determined by such holder, to any investor, holder or beneficial owner of
the Relevant Securities shall require termination of this Agreement or the
support of another financial restructuring transaction that may enhance
value, as determined by the Consenting Holder, for such investor, holder or
beneficial owner;
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(l) The Consenting Holders shall not have had an opportunity to
complete (and be satisfied, in their sole discretion, with) their
business, legal, and operational due diligence review of Feet;
provided, however, that this clause (9)(l) shall be of no force and
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effect after November 12, 1999; and
(m) The Bankruptcy Court grants relief that is materially
inconsistent with the Term Sheet and materially adverse to the
Consenting Holder including, without limitation, a motion to vacate or
modify the automatic stay contained in section 362 of the Bankruptcy
Code.
The foregoing Consenting Holders Termination Events are intended solely for the
benefit of the Consenting Holders. This Agreement shall automatically terminate
(unless waived in accordance with the terms of this Section 9) three days after
the earlier to occur of (i) the receipt by Feet of notice from the holder(s) of
a majority in face amount of the Relevant Securities that a termination event
under one of the Consenting Holders Termination Events has occurred and (ii) the
receipt by the Consenting Holders of notice from Feet that such a termination
event has occurred. Feet shall, and shall cause each of its direct and indirect
subsidiaries at all times to immediately advise the Consenting Holders of any
breach of this Agreement by or on behalf of JFF or of the occurrence of any
Consenting Holders Termination Event. Any approval or waiver by the Consenting
Holders shall be in writing. The waiver by the Consenting Holders of any
condition or the occurrence of any Consenting Holders Termination Event shall
not relieve any other party of any liability or obligation with respect to any
covenant or agreement set forth in this Agreement.
In addition, Feet shall have the right to terminate (a "JFF
---
Termination Event") this Agreement, by the giving of written notice thereof to
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each of the Consenting Holders, if this Agreement is materially breached by the
holder(s) of a majority of the face amount of the Relevant Securities.
Upon the occurrence of any Consenting Holders Termination Event,
unless such Consenting Holders Termination Event is waived in accordance with
the terms hereof, or upon Feet's declaration of the occurrence of a JFF
Termination Event, this Agreement shall terminate and, except as set forth in
section 20 hereof, no party hereto shall have any continuing liability or
obligation to any other party hereunder; provided, that, no such termination
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shall relieve any party from liability for its breach or non-performance of its
obligations hereunder prior to the date of such termination.
10. Conditions to Consenting Holders' Obligation to Consummate
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Financial Restructuring. The obligations of the Consenting Holders to vote for
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the Plan and to consummate the Financial Restructuring shall be subject to the
satisfaction, as of the closing date of the transactions contemplated by the
Financial Restructuring and the Plan, of each of the following conditions
relating to the Chapter 11 Cases and this Agreement:
(a) No Consenting Holders Termination Event shall have occurred;
(b) This Agreement shall not otherwise have been terminated in
accordance with its terms;
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(c) The Plan and the confirmation order shall be in form and
substance reasonably acceptable to counsel for the Consenting Holders;
(d) The Bankruptcy Court shall have entered a final order
confirming the Plan under section 1129 of the Bankruptcy Code;
(e) All claims of creditors (whether secured or unsecured) and
all interests of equity security holders shall be treated in a fashion
consistent with the terms of the Term Sheet and the Plan; and
(f) There shall not be in force any order, decree or ruling by
any court or governmental body having jurisdiction, or any threatened
or pending complaint of a governmental body or any person praying for
an order, decree or ruling of a court restraining or enjoining the
consummation of the Financial Restructuring or the Effective Date of
the Plan or rendering illegal the transactions contemplated by this
Agreement or the Plan.
The above conditions may be waived in writing by the holder(s) of a
majority in face amount of the Relevant Securities.
11. Conditions to Feet's Obligation to Consummate Financial
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Restructuring. The obligations of Feet to consummate the Financial Restructuring
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shall be subject to the satisfaction, as of the closing date of the transactions
contemplated by the Financial Restructuring and the Plan, of each of the
following conditions relating to the Chapter 11 Cases and this Agreement:
(a) This Agreement shall not have been terminated in accordance
with its terms;
(b) The Bankruptcy Court shall have entered an order confirming
the Plan under section 1129 of the Bankruptcy Code; and
(c) There shall not be in force any order, decree or ruling by
any court or governmental body having jurisdiction restraining or
enjoining the Effective Date of or rendering illegal the transactions
contemplated by this Agreement or the Plan.
12. Good Faith Negotiations of Financial Restructuring Documents.
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Feet and each Consenting Holder hereby further covenants and agrees to negotiate
the definitive documents relating to the Financial Restructuring, including,
without limitation, the Chapter 11 Documents, in good faith. Feet shall keep the
Committee apprised of, and members or representatives of the Committee shall be
entitled to attend and participate in, any discussions, negotiations or meetings
with the Lenders (including any replacement or successor lenders including,
without limitation, any debtor-in-possession lender(s)).
13. Acknowledgment. This Agreement and the terms of the Financial
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Restructuring are the product of negotiations between Feet and the Consenting
Holders and their respective representatives. This Agreement is not and shall
not be deemed to be a solicitation of
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votes for the acceptance of the Plan. Each of the Consenting Holders' acceptance
of the Plan will not be solicited until it has received a Disclosure Statement
approved by the Bankruptcy Court.
14. Effectiveness; Amendments; Consenting Holders. This Agreement
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shall not become effective and binding on the parties hereto unless and until
counterpart signature pages hereto shall have been executed and delivered by
Feet and Consenting Holders holding or managing Notes which constitute in the
aggregate a majority of the face amount of the Notes. Once effective, this
Agreement may not be modified (except as provided in sections 9 and 10),
amended, or supplemented as to any Consenting Holder except in writing signed by
Feet and each Consenting Holder.
15. Disclosures. Unless required by lawful subpoena issued by a court
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of competent jurisdiction or applicable statute, rule, or regulation promulgated
by the Securities and Exchange Commission, Feet shall not, and shall cause each
of its direct and indirect subsidiaries not to, disclose (i) any Consenting
Holder's identity, (ii) the amount of Relevant Securities owned or managed by
any Consenting Holders, and (iii) the terms of this Agreement, in any such case
without the prior written consent of such Consenting Holder; and, JFF shall not
issue or make any press release, announcement, or disclosure relating to the
Financial Restructuring without the prior written consent of the holders of a
majority in face amount of the Relevant Securities.
16. Impact of Appointment to Creditors' Committee. Notwithstanding
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anything herein to the contrary, if any Consenting Holder is appointed to and
serves on an official committee of creditors in the Chapter 11 Cases, the terms
of this Agreement shall not be construed so as to limit such Consenting Holder's
exercise (in its sole discretion) of its fiduciary duties to any person arising
from its service on such Committee, and any such exercise (in the sole
discretion of such Consenting Holder) of such fiduciary duties shall not be
deemed to constitute a breach of the terms of this Agreement.
17. Governing Law; Jurisdiction. This Agreement shall be governed by
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and construed in accordance with the internal laws of the State of New York,
without regard to any conflicts of law provision which would require the
application of the law of any other jurisdiction. By its execution and delivery
of this Agreement, each of the parties hereto hereby irrevocably and
unconditionally agrees for itself that any legal action, suit or proceeding
against it with respect to any matter under or arising out of or in connection
with this Agreement or for recognition or enforcement of any judgment rendered
in any such action, suit or proceeding, may be brought in any federal court of
competent jurisdiction in the District of New York.
By execution and delivery of this Agreement, each of the parties
hereto hereby irrevocably accepts and submits itself to the nonexclusive
jurisdiction of such court, generally and unconditionally, with respect to any
such action, suit or proceeding. Notwithstanding the foregoing consent to New
York jurisdiction, upon the commencement of the Chapter 11 Cases, each of the
parties hereto hereby agrees that the Bankruptcy Court shall have exclusive
jurisdiction of all matters arising out of or in connection with this Agreement.
18. Specific Performance. It is understood and agreed by each of the
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parties hereto that money damages would not be a sufficient remedy for any
breach of this Agreement
9
by any party (other than a breach by Feet or any of its direct or indirect
subsidiaries of section 20 hereof) and each non-breaching party shall be
entitled to specific performance and injunctive or other equitable relief as a
remedy of any such breach.
19. Reservation of Rights. This Agreement and the Plan are part of a
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proposed settlement of disputes among the parties hereto. Except as expressly
provided in this Agreement, nothing herein is intended to, or does, in any
manner waive, limit, impair, or restrict the ability of each of the Consenting
Holders to protect and preserve its rights, remedies and interests, including
without limitation, its claims against JFF or its full participation in any
bankruptcy case filed by JFF. If the transaction contemplated herein or in the
Plan are not consummated, or if this Agreement is terminated for any reason, the
parties hereto fully reserve any and all of their rights. Pursuant to Federal
Rule of Evidence 408 and any applicable state rules of evidence, this Agreement
shall not be admitted into evidence in any proceeding other than a proceeding to
enforce its terms.
20. Fees, Expenses and Indemnification. Unless the Committee shall
----------------------------------
have breached any provision of this Agreement, Feet shall pay any and all
outstanding fees and expenses of the Consenting Holders' financial and legal
advisors in accordance with the terms and conditions of their respective
agreements and, in addition, shall pay all outstanding amounts owed to such
advisors in full on the day immediately prior to the filing of the Petition with
respect to the Chapter 11 Cases; provided, however, that in the event of such
-------- -------
breach, Feet shall pay on such date any and all outstanding expenses of such
advisors through the date of the termination of this Agreement.
Feet agrees that it shall continue to pay, subject to Bankruptcy Court
approval, the reasonable fees and expenses of legal counsel and the financial
advisors to the Committee from and after the commencement (and through the
conclusion) of the Chapter 11 Cases and through the earlier to occur of (x) the
Effective Date of the Plan and (y) the termination of this transaction by Feet
or the Committee, whether or not an official committee of unsecured creditors is
actually appointed in such cases and, if such Committee is appointed (the
"Official Committee"), whether or not counsel for the Committee is selected as
------------------
counsel for the Official Committee and whether or not the financial advisor to
the Committee is selected as financial advisor to the Official Committee.
Feet agrees to indemnify and hold harmless each Consenting Holder and
its officers, directors, partners, employees, agents, attorneys, and advisors
and each of their respective successors and assigns from and against any and all
claims, suits, actions, liabilities, and judgments and costs related thereto
(including any defense costs associated therewith on an "as incurred" basis)
arising under or with respect to this Agreement or the transactions contemplated
hereby or any act or failure to act taken in contemplation, furtherance or
connection herewith, except if such claim or liability is determined by a
competent court to have arisen as a result of such Consenting Holder's material
breach of its obligations hereunder or fraudulent or willful misconduct or gross
negligence on the part of such Consenting Holder or the applicable indemnified
person.
21. Survival. Notwithstanding the sale of the Relevant Securities in
--------
accordance with section 3 hereof or the termination of the Consenting Holders'
obligation
10
hereunder in accordance with section 9 hereof, Feet's obligations and agreements
set forth in sections 18 and 20 (with respect to expenses incurred through the
date of such termination) hereto shall survive such termination and shall
continue in full force and effect for the benefit of the Consenting Holders in
accordance with the terms hereof.
22. Headings. The headings of the sections, paragraphs and
--------
subsections of this Agreement are inserted for convenience only and shall not
affect the interpretation hereof.
23. Successors and Assigns. This Agreement is intended to bind and
----------------------
inure to the benefit of the parties and their respective successors, assigns,
heirs, executors, administrators and representatives. The agreements,
representations and obligations of the Consenting Holders under this Agreement
are, in all respects, several and not joint.
24. Notice. Notices given under this Agreement shall be provided by
------
telecopier and overnight courier to:
If to Feet and/or JFF:
---------------------
Just For Feet, Inc.
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx
Attn: Xxxxx Xxxxxx
Telecopier: (000) 000-0000
with a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
If to any Consenting Holder or the Committee:
Banc of America Securities LLC
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx X. Xxxxx
Telecopier: (000) 000-0000
-and-
00
Xxxx xx Xxxxxxx Securities LLC
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxx XxXxxx
Telecopier: (000) 000-0000
with a copy to:
Milbank, Tweed, Xxxxxx & XxXxxx LLP
-
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxx, Esq.
Xxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
25. Prior Negotiations. This Agreement and Exhibit A supersede all
------------------ -
prior negotiations with respect to the subject matter hereof.
26. Counterparts. This Agreement may be executed in one or more
------------
counterparts and by facsimile copy, each of which shall be deemed an original
and all of which shall constitute one and the same Agreement.
27. No Third Party Beneficiaries. Unless expressly stated herein,
----------------------------
this Agreement shall be solely for the benefit of the parties hereto and no
other person or entity.
28. Consideration. It is hereby acknowledged by the parties hereto
-------------
that no consideration shall be due or paid to the Consenting Holders for their
agreement to vote to accept the Plan in accordance with the terms and conditions
of this Agreement other than Feet's Agreement to commence the Chapter 11 Cases,
to use its best efforts to obtain approval of the Disclosure Statement, and to
take all steps necessary and desirable to confirm, consummate, and implement the
Plan in accordance with the terms and conditions of the transaction contemplated
by the Financial Restructuring and this Agreement.
29. Additional Noteholders. Any holder of any portion of the Notes
----------------------
may become a party to this Agreement by duly executing a written acknowledgement
of such holder's Agreement to be bound by the terms and provisions of this
Agreement and to be deemed a "Consenting Holder" for all purposes hereof, and
upon delivery of an executed copy of such acknowledgement to Feet and each other
Consenting Holder, such holder shall thereafter be deemed to be a Consenting
Holder for all purposes hereof.
* * *
12
IN WITNESS WHEREOF, each of the parties below has caused a counterpart
of this Agreement to be executed and delivered by its duly authorized officer as
of the date first above written.
JUST FOR FEET, INC., On behalf of itself and
each of its affiliates and subsidiaries,
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Chief Executive Officer
0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IN WITNESS WHEREOF, each of the parties below has caused a counterpart
of this Agreement to be executed and delivered by its duly authorized officer as
of the date first above written.
XXXXXX X. XXXXXXXXXX, Individually and as
Chairman of the Board of Directors of
Just For Feet, Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
IN WITNESS WHEREOF, each of the parties below has caused a counterpart
of this Agreement to be executed and delivered by its duly authorized officer as
of the date first above written.
CONSENTING HOLDER:
BANC OF AMERICA SECURITIES LLC
By: /s/ Xxxxxxx X. Xxxxx
--------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
0 Xxxx 00/xx/ Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IN WITNESS WHEREOF, each of the parties below has caused a counterpart
of this Agreement to be executed and delivered by its duly authorized officer as
of the date first above written.
CONSENTING HOLDER:
BLUE RIDGE FUND LLC
By: /s/ Xxxxxx X. Xxxxx
---------------------------
Name: Xxxxxx X. Xxxxx
Title:
IN WITNESS WHEREOF, each of the parties below has caused a counterpart
of this Agreement to be executed and delivered by its duly authorized officer as
of the date first above written.
CONSENTING HOLDER:
ATLANTIC EQUITY CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxxx
Title:
EXHIBIT A
---------
TERM SHEET
Subject to Rule 408 of the
--------------------------
Federal Rules of Evidence
-------------------------
JUST FOR FEET, INC.
Restructuring Term Sheet
November 2, 1999
--------------------------------------------------------------------------------
This term sheet (the "Term Sheet") contains the material terms of a financial
----------
restructuring of Just For Feet, Inc. ("Feet") and its subsidiaries
----
(collectively, "JFF" or the "Company") which JFF and an ad hoc committee (the
--- -------
"Ad Hoc Committee") of certain holders of 11% Senior Subordinated Notes due 2009
-----------------
(the "Notes") of Feet and guaranteed by various subsidiaries and affiliates of
-----
JFF, have agreed to. The Notes were issued pursuant to an Indenture (the
"Indenture") dated April 15, 1999 by and between Feet, as issuer; Sneaker
----------
Stadium, Inc., Just For Feet of Texas, Inc., Just For Feet of Nevada, Inc., Just
For Feet Specialty Stores, Inc., SNKR Holding Corp, and Athletic Attic
Marketing, Inc., as guarantors; and The Bank of New York, as trustee. As of the
date of this Term Sheet, of the 70,000,000 shares of common stock, par value
$.0001, Feet has authorized, 31,211,000 shares have been issued (the "Common
------
Stock"). Feet, as borrower, is party to a Credit Agreement (the "Senior Credit
----- -------------
Facility"), dated as of September 24, 1999, with various JFF entities as
--------
guarantors, and various lending institutions (the "Senior Lenders") led by Bank
--------------
of America, N.A., as administrative agent, in the principal amount of $175
million. Feet, as borrower, is also party to a Credit Agreement (the "Junior
------
Credit Facility"), entered into as of September 23, 1999, with various JFF
---------------
entities as guarantors, and various lending institutions (the "Junior Lenders")
--------------
led by Bank of America, N.A., as administrative agent, in the principal amount
of $40 million.
When used herein, the term "New JFF" refers to JFF as reorganized in accordance
-------
with the terms hereof on and after the Effective Date (as defined below). As a
result of the Financial Restructuring, Feet's outstanding capital would consist
of shares of common stock of New JFF ("New JFF Common Stock"), par value $.0001.
--------------------
TREATMENT OF CLAIMS/1/ AND INTERESTS UNDER THE PLAN
---------------------------------------------------
The Plan shall classify and provide treatment for claims against and interests
in the Company generally as described below. Claims in each class will be
satisfied in full by the delivery of the consideration described below on the
consummation date of the Plan (the "Effective Date").
--------------
Senior Credit Facility Subject to review of the validity and
perfection of liens and security interests
of the Senior Lenders, the Claims of the
Senior Lenders arising from the Senior
Credit Facility shall be unimpaired or
subject to any other treatment agreed to
among JFF, the Ad Hoc Committee, and the
Senior Lenders.
Junior Credit Facility Subject to review of the validity and
perfection of liens and security interests
of the Junior Lenders, the Claims of the
--------------
/1/ As such term is defined in section 101(5) of the Bankruptcy Code.
Subject to Rule 408 of the
--------------------------
Federal Rules of Evidence
-------------------------
JUST FOR FEET, INC.
Restructuring Term Sheet
November 2, 1999
--------------------------------------------------------------------------------
Junior Lenders arising from the Junior
Credit Facility shall be unimpaired or
subject to any other treatment agreed to
among JFF, the Ad Hoc Committee, and the
Senior Lenders.
Senior Debt Claims that constitute Senior Debt under the
Indenture shall be unimpaired or subject to
any other treatment agreed to among JFF, the
Ad Hoc Committee, and the holders of the
Senior Debt.
General Unsecured Claims Unsecured, nonpriority claims that are not
(including Notes) Trade Claims (as defined below), and the
Claims for the outstanding principal and
interest on the Notes, will be converted
into the right to receive, on a pro rata
basis, New JFF Common Stock representing
100% of all issued and outstanding shares of
New JFF Common Stock on the Effective Date.
Such Shares of New JFF Common Stock shall be
subject to dilution by the Executive
Management options. The Notes will be deemed
allowed Claims under the Plan, without
offsets of any kind.
Holders of Common Stock Holders of Common Stock shall receive
(or any equivalents) warrants to acquire no more than ten percent
(10%) of New JFF Common Stock. The warrants
shall expire twenty-four (24) months from
the Effective Date. The warrants shall be
exercisable at a strike price that assumes
an equity valuation for New JFF equal to
100% of the face amount of allowed unsecured
Claims, including the Notes. Shares of New
JFF Common Stock issuable upon exercise of
the warrants shall be subject to dilution by
the Executive Management options. All
existing options or warrants to acquire the
Common Stock shall be canceled under the
Plan.
Trade Claims Claims of suppliers of goods and services
that contractually agree to extend trade
terms (such terms to be acceptable to Ad Hoc
Committee) and honor co-op agreements
("Trade Claims") shall be paid in full in
the ordinary course of business. Such
treatment of Trade Claims shall be provided
pursuant to a "first day" order, based on
the "rule of necessity" doctrine.
2
Subject to Rule 408 of the
--------------------------
Federal Rules of Evidence
-------------------------
JUST FOR FEET, INC.
Restructuring Term Sheet
November 2, 1999
--------------------------------------------------------------------------------
Executive Management . Executive management, which will include
additional senior executives, shall
receive options to acquire 10% of New JFF
Common Stock:
-- 5% issued at a strike price to be
agreed to by the Ad Hoc Committee and
JFF
-- 5% performance-based as determined by
the compensation committee of Board of
New JFF
. Vesting to be discussed
. Option term is 4 years
. Must exercise no later than 60 days
after termination
. Allocation of options to be determined by
compensation committee of Board of New
JFF
Employment and Severance Treatment of current employment and
Agreements severance agreements shall be subject to
review by Ad Hoc Committee.
Employee Stock Bonus Plan The Employee Stock Bonus Plan shall be a
subset of Executive Management Plan.
Board of Directors Initially, New JFF Board of Directors shall
consist of seven directors, (i) five (5) to
be appointed by the Ad Hoc Committee and
(ii) two (2) to be appointed by the chief
executive officer of JFF.
ADDITIONAL PROVISIONS
---------------------
Liquidity/Registration Rights Any creditor that would be deemed, following
the Effective Date, to be an "affiliate" of
New JFF by reason of its equity holdings in
New JFF or who otherwise could not benefit
from the section 1145 exemption from
registration shall be granted customary
registration rights. New JFF Common Stock
shall be freely tradable pursuant to section
1145 of the Bankruptcy Code.
Releases/Contribution/Indemnific- To be reviewed by the Ad Hoc Committee and
ation any official creditors' committee appointed
in JFF's chapter 11 cases.
3
