EXHIBIT 4.26
WAIVER AGREEMENT
WAIVER AGREEMENT dated as of February 27, 1997, between JBI, INC.,
a Massachusetts corporation (the "Borrower"); X. XXXXX, INC., a
Massachusetts corporation ("Xxxxx"), each of the banks that is a signatory
hereto (individually a "Bank" and, collectively, the "Banks"); and FLEET
NATIONAL BANK, a national banking association, as agent for the Banks party
to the Credit Agreement referred to below (in such capacity, together with
its successors in such capacity, the "Agent").
Reference is made to the Revolving Credit and Loan Agreement dated
as of February 1, 1993 (as modified and supplemented and in effect from
time to time, the "Credit Agreement") among the Borrower, Xxxxx, the Banks
and the Agent. Xxxxx has advised the Banks that Xxxxx desires to:
(a) sell its divisional business known as Shoe Corporation of
America ("SCOA") to SC Acquisition Corp. (the "SCOA Sale"), all as more
particularly described in the draft Asset Purchase Agreement among the
Borrower and SC Acquisition Corp. (a copy of which has been provided to the
Agent and each of the Banks; the "SCOA Sale Agreement");
(b) sell its divisional business known as Parade of Shoes
("Parade") to Payless ShoeSource, Inc. (the "Parade Sale"), all as more
particularly described in the Purchase and Sale Agreement, dated as of
January 13, 1997 (a copy of which has been provided to the Agent and each
of the Banks; the "Parade Sale Agreement"); and
(c) amend its Senior Subordinated Note Agreement (the "Note
Agreement"), dated as of May 1, 1989 between the Borrower, Xxxxx and
Massachusetts Mutual Life Insurance Company and Mass Mutual Participation
Investors ("MassMutual"), under which MassMutual holds an outstanding
principal amount of $4,500,000 of the Borrower's Senior Subordinated Notes
(the "Subordinated Notes") all as more particularly described in the
consent letter dated February 24, 1997, issued by the Borrower and Xxxxx
and accepted by MassMutual (a copy of which has been provided to the Agent
and each of the Banks; the "MassMutual Consent Letter").
Xxxxx has further advised the Banks that as a result of the SCOA
Sale and the Parade Sale, and the repositioning of its licensed discount
shoe division, Xxxxx will suffer a one-time, after-tax restructuring charge
to earnings of $118,000,000 to be recorded by Xxxxx in the fourth quarter
of fiscal year ending on the last Saturday in January 1997 (the
"Restructuring Charge").
To that end, Xxxxx and the Borrower have requested that:
(i) the Majority Banks waive certain provisions of the Credit
Agreement solely
to the extent required to permit the SCOA Sale and the Parade Sale;
(ii) the Majority Banks consent to the Borrower and Xxxxx'x
exclusion of the Restructuring Charge in their calculations of all
financial covenants contained in the Credit Agreement under Sections
10.01.1 through 10.01.10;
(iii) the Majority Banks waive compliance with Section 10.06 to
the extent necessary to (a) increase the applicable interest rate payable
under the Note Agreement and (b) amend the interest payment periods under
the Note Agreement, each as contemplated under the MassMutual Consent
Letter;
(iv) the Majority Banks consent to the Subsidiaries delivering
guarantees to MassMutual in connection with Xxxxx and Borrower's
obligations under the Note Agreement; and
(v) in connection with the SCOA Sale, the Agent release the
Mortgage, Assignment of Leases and Rents and Security Agreement, dated as
of June 21, 1996, from the Borrower to the Agent (the "Mortgage") held on
the property located at 0000 Xxxxx Xxxx, Xxxxxxxx, Xxxx (the "Columbus
Property").
Accordingly the parties hereto agree as follows:
1. Definitions. Except as otherwise defined in this Agreement,
terms defined in the Credit Agreement are used herein as defined therein.
2. Waivers. Effective as of the Effective Date (as defined
in Section 5 hereof) and subject to the terms and conditions hereof, and
in reliance on the representations and warranties set forth herein, the
Majority Banks hereby:
(a) waive compliance by the Borrower and Xxxxx with the provisions
of Sections 10.01.8 and 10.07 of the Credit Agreement solely to the extent
required to permit the consummation of the SCOA Sale in accordance with the
terms of the SCOA Sale Agreement and to permit the release of the Mortgage
in connection with the SCOA Sale; provided that the foregoing waiver of
compliance with Sections 10.01.8 and 10.07 contained in this clause (a)
shall only be effective if the SCOA Sale is consummated on or before March
17, 1997 and Xxxxx shall have complied with the covenants set forth in
clause (a) of Section 4 hereof and no Default or Event of Default shall
have occurred and be continuing;
(b) waive compliance by the Borrower and Xxxxx with the provisions
of Sections, 10.01.8 and 10.07 of the Credit Agreement solely to the extent
required to permit the consummation of the Parade Sale in accordance with
the terms of the Parade Sale Agreement; provided that the foregoing waiver
of compliance with Sections 10.01.8 and 10.07 contained in this clause (b)
shall only be effective if the Parade Sale occurs on or before March 17,
1997, and Xxxxx shall have complied with the covenants set forth in clause
(b) of Section 4 hereof and no Default or Event
of Default shall have occurred and be continuing; and
(c) consent to Borrower and Xxxxx'x exclusion of the Restructuring
Charge in their calculations of all financial covenants contained in the
Credit Agreement under Sections 10.01.1 through 10.01.10; provided that the
foregoing consent contained in this clause (c) shall only be effective if
the SCOA Sale is consummated on or before March 17, 1997 and Xxxxx shall
have complied with the covenants set forth in clause (a) of Section 4
hereof and no Default or Event of Default shall have occurred and be
continuing;
(d) waive compliance by the Borrower and Xxxxx with the provisions
of Section 10.06 of the Credit Agreement solely to the extent required to
permit the transactions contemplated by the MassMutual Consent Letter upon
the terms and conditions and under the circumstances described in clause
(c) of the recitals hereto; provided that the foregoing waiver of
compliance with Section 10.06 shall only be effective if (i) the SCOA Sale
has closed and the Net Proceeds of the SCOA Sale have been paid to the
Banks, (ii) Borrower and Xxxxx have permanently reduced the Aggregate
Commitment Amount in an amount equal to the greater of (x) the Net Proceeds
of the SCOA Sale and (y) $40,000,000, and (iii) no Default or Event of
Default shall have occurred and be continuing prior to or after giving
effect to any proposed transaction under the MassMutual Consent Letter.
3. Representations and Warranties. By its signature hereto, each
of the Borrower and Xxxxx represents and warrants to the Banks and the
Agent that, as of the date hereof and after giving effect to the SCOA Sale,
the Parade Sale and the MassMutual Consent Letter and the waivers
contemplated by Section 2 hereof:
(a) no Default has occurred and is continuing;
(b) the representations and warranties set forth in
Article VIII of the Credit Agreement are true and complete on the
date hereof as if made on and as of the date hereof and as if each
reference in said Article VIII to "this Agreement" included
reference to this Agreement (provided that the representation and
warranty set forth herein shall not be deemed to be inaccurate
solely by reason of the failure of any information contained in
any of Exhibits G (solely as the information therein relates to
Section 8.04 or 8.05 of the Credit Agreement), N, O, P, Q and R to
the Credit Agreement to remain true); and
(c) the Parade Sale, the SCOA Sale and the MassMutual
Consent Letter do not require any consent or waiver (other than
the waivers contemplated by Section 2 hereof) under any agreement,
instrument or other document (including without limitation the
Convertible Subordinated Notes and the Subordinated Convertible
Debentures).
The foregoing shall be deemed to be representations and warranties made in
an
operative Document for purposes of section 11.01(d) of the Credit Agreement:
4. Covenants.
(a) Simultaneously with receipt thereof, Xxxxx shall cause
to be paid to the Banks an amount equal to the Net Proceeds of the
SCOA Sale for application to the Borrower's Obligations under the
Credit Agreement, and the Aggregate Commitment Amount shall
automatically and permanently be reduced by an amount equal to the
greater of (x) the Net Proceeds of the SCOA Sale and (y)
$40,000,000, provided, however, that such reduction in the
Aggregate Commitment Amount under the Credit Agreement (the "SCOA
Reduction") shall be in addition to (and not in satisfaction of)
any required reductions in the Aggregate Commitment Amount
pursuant to the terms of the Credit Agreement (including the
Parade Reduction (as defined below)); and
(b) Simultaneously with receipt thereof, Xxxxx shall cause
to be paid to the Banks an amount equal to the Net Proceeds of the
Parade Sale for application to the Borrower's Obligations under
the Credit Agreement, and the Aggregate Commitment Amount shall
automatically and permanently be reduced by an amount equal to the
greater of (x) the Net Proceeds of the Parade Sale and (y)
$20,000,000, provided, however, that such reduction in the
Aggregate Commitment Amount under the Credit Agreement (the
"Parade Reduction") shall be in addition to (and not in
satisfaction of) any required reductions in the Aggregate
Commitment Amount pursuant to the terms of the Credit Agreement
(including the SCOA Reduction).
A breach of any of the foregoing covenants shall be an Event of Default for
all purposes of the Credit Agreement.
5. Effective Date. This Agreement shall become effective on the
date (the "Effective Date") as of which the Agent notifies each of the
parties hereto in writing that it shall have received the following
documents, each of which shall be satisfactory to it in form and substance:
(a) copies of this Agreement duly executed and
delivered by each of the Borrower, Guarantors and Majority Banks;
and
(b) such other documents relating to the matters
contemplated hereby as the Agent or its counsel may reasonably
request.
6. Miscellaneous. Except as expressly herein provided, the
Credit Agreement and all other operative Documents and Financing Agreements
shall remain unchanged and in full force and effect. This Agreement may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement
shall be governed by, and construed in
accordance with, the law of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the day and year first above
written.
JBI, INC.
By /s/Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
X. XXXXX, INC.
By /s/Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
FLEET NATIONAL BANK,
for itself and as Agent
By /s/Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Asst. Vice President
THE FIRST NATIONAL BANK OF BOSTON
By /s/Xxxxxx X. Xxxxxx, Xx.
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Director
FLEET BANK, N.A. (formerly "NatWest Bank
N.A.")
By /s/Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Asst. Vice President
BANK HAPOALIM B.M.
By /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: First Vice President
By /s/Xxxxx X. Xxxxx
Name: Xxxxx Xxxx Xxxxx
Title: First Vice President and
Corporate Manager
NATIONAL CITY BANK OF COLUMBUS
By /s/Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Corporate Loan Officer
STANDARD CHARTERED BANK
By /s/Xxxxx X. Cutting
Name: Xxxxx X. Cutting
Title: Senior Vice President
By /s/Xxxxxxxx X. Tee
Name: Xxxxxxxx X. Tee
Title: Vice President
CITIZENS BANK OF MASSACHUSETTS
By /s/Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Vice President
THE YASUDA TRUST AND BANKING COMPANY,
LTD.
By /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Deputy General Manager
We hereby acknowledge, consent and agree to the terms of the foregoing Agreement
and confirm that our obligations under the Guarantee and the Pledge Agreement
shall remain unchanged and in full force and effect.
Dated: February 27, 1997
XXXXXXX COMPANIES, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
XXXXXXX NO. 301 CORP.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
JBI HOLDING CO., INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
TCMB&T, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
WGS CORP.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
TCM HOLDING COMPANY, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
XXXXX SHOE, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
BUCKMIN, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
ELM EQUIPMENT CORP.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
JARED CORPORATION
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
XXXXX SHOE (CANADA) LTD.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
XXXXX SHOE INTERNATIONAL, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
ISAB, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
WHITE CAP FOOTWEAR, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
THE CASUAL MALE, INC.
By /s/ Xxxxxx Xxxxxxxxx
Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
