EXHIBIT 4-C-7
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EXECUTION COPY
HARTMARX CORPORATION
SEVENTH AMENDMENT AND WAIVER TO THE AMENDED AND RESTATED
CREDIT AGREEMENT
This SEVENTH AMENDMENT AND WAIVER TO THE AMENDED AND RESTATED
CREDIT AGREEMENT (this "Agreement") is dated as of December 13, 2001 and entered
into by and among HARTMARX CORPORATION, a Delaware corporation ("Borrower"), the
LENDERS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to as a
"Lender" and collectively as "Lenders"), GENERAL ELECTRIC CAPITAL CORPORATION,
as Managing Agent and Collateral Agent for Lenders ("Managing Agent"), and THE
BANK OF NEW YORK and BANK OF AMERICA, N.A., as co-agents (collectively, the
"Co-Agents"), and, for purposes of Sections 4 and 5 hereof, the GUARANTORS
IDENTIFIED ON THE SIGNATURE PAGES HEREOF (collectively the "Guarantors"), and is
made with reference to that certain Amended and Restated Credit Agreement dated
as of August 18, 1999 among Borrower, Lenders, Managing Agent and Co-Agents (as
amended, the "Credit Agreement"; capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement). Unless otherwise indicated, Section and subsection references
contained herein shall be to the corresponding Sections and subsections of the
Credit Agreement.
RECITALS
WHEREAS, the Borrower (i) was not able to timely deliver to
the Managing Agent on or prior to October 26, 2001, as required by Section 6.14A
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of the Credit Agreement, a fully executed and notarized Mortgage relating to the
Easton, Pennsylvania property, which failure resulted in an Event of Default
under Section 8.3 of the Credit Agreement, (ii) was not able to timely deliver
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to the Managing Agent on or prior to October 26, 2001, as required by Section
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6.15 of the Credit Agreement, a copy of a bona fide proposal letter or letter of
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interest, in form and substance acceptable to the Managing Agent, to provide not
less than $25,000,000 of Additional Liquidity Proceeds by a Person with the
financial ability to provide such Additional Liquidity Proceeds, which failure
resulted in an Event of Default under Section 8.3 of the Credit Agreement, (iii)
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was not able to deliver to the Managing Agent on or prior to November 26, 2001,
as required by Section 6.15 of the Credit Agreement, a copy of a binding
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commitment letter, in form and substance acceptable to the Managing Agent, to
provide not less than $25,000,000 of Additional Liquidity Proceeds by a Person
with the financial ability to provide such Additional Liquidity Proceeds, which
failure resulted in an Event of Default under Section 8.3 of the Credit
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Agreement, (iv) may be unable to pay the principal or interest due and payable
on January 15, 2002 with respect to the Senior Subordinated Notes, which failure
would result in an Event of Default under Section 8.2 of the Credit Agreement,
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(v) was unable to comply with Section 5.8A of the Credit Agreement by reason of
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the Events of Default described in this paragraph, which failure itself resulted
in an Events of Default under Section 8.4 of the Credit Agreement (such Events
of Default, together with the Events of Default described in clauses (i) through
(iv) of this paragraph, being hereinafter collectively referred to as the
"Specified Direct Defaults"), and (vi) the occurrence and continuation of the
Specified Direct Defaults constitute
events of default under both the Canadian Credit Agreement and the Indiana Real
Estate Financing, which events of default constitute Events of Default under
Section 8.2 of the Credit Agreement (the "Cross Defaults," and collectively with
the Specified Direct Defaults, the "Specified Defaults");
WHEREAS, the Borrower has informed the Agents and the Lenders
that it desires to exchange all of the existing Senior Subordinated Notes for a
cash payment by the Borrower and its issuance of "New Senior Subordinated Notes"
(as defined herein) to the holders of the existing Senior Subordinated Notes
upon the terms and conditions satisfactory to the Managing Agent and the
Requisite Lenders hereby; and
WHEREAS, the Borrower has requested that the Requisite Lenders
(i) waive the Specified Defaults, (ii) permit the Borrower's proposed exchange
of Senior Subordinated Notes for cash and New Senior Subordinated Notes and
(iii) amend certain provisions of the Credit Agreement as set forth herein, and,
subject to the terms and conditions of this Agreement, the Requisite Lenders
have agreed to such requests.
NOW, THEREFORE, in consideration of the foregoing premises,
the terms and conditions stated herein and other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the Borrower, the
Requisite Lenders and the Managing Agent, such parties hereby agree as follows:
SECTION 1. Amendment to Credit Agreement. Subject to the
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satisfaction of each of the conditions set forth in Section 3 of this Agreement,
the Credit Agreement is hereby amended as follows (unless otherwise specified,
section, article, exhibit and schedule references refer to sections, articles,
exhibits and schedules of the Credit Agreement):
A. Amendments to Subsection 1.1.
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(i) Subsection 1.1 is amended by adding the following
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definitions to such section in their respective applicable alphabetical
locations:
"Additional Liquidity Proceeds" has the meaning set forth in
subsection 6.15 hereof.
"Approved Exchange Offer" means an exchange of all or a
portion of the Senior Subordinated Notes for a cash payment by the
Borrower and its issuance of New Senior Subordinated Notes to the
holders of the Senior Subordinated Notes pursuant to terms and
conditions approved in writing by the Requisite Lenders.
"Liquidity Proceeds" has the meaning set forth in subsection
6.15 hereof.
"New Senior Subordinated Notes" means senior subordinated
notes issued by the Borrower pursuant to an Approved Exchange Offer.
"New Subordinated Note Indenture" means an indenture pursuant
to which the Borrower issued or is to issue New Senior Subordinated
Notes.
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"Seventh Amendment" shall mean that certain Seventh Amendment
and Waiver to Amended and Restated Credit Agreement dated as of December 13,
2001 by and among Borrower, Managing Agent, Co-Agents and Lenders.
(ii) Subsection 1.1 of the Credit Agreement is hereby further
amended by deleting the following definitions in their entirety and substituting
the following therefor:
"Related Documents" means, collectively, (i) the New Senior
Subordinated Notes, (ii) the New Subordinated Note Indenture, (iii) the
Senior Subordinated Notes, (iv) the Subordinated Note Indenture, (v)
the Existing EDBs, (vi) the ESOP Loan Documents, (vii) the Xxxxxxx
Documents and (viii) the Refinancing Debt Documents."
"Required Excess Availability Amount" shall mean the Excess
Availability amount required to be maintained by the Borrower as set
forth below opposite the applicable period:
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Period Required Excess
Availability Amount
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December 13, 2001 - January 14, 2002 $15 Million
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January 15, 2001 and thereafter $10 Million
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(iii) Subsection 1.1 of the Credit Agreement is hereby further
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amended by deleting the definition of "Subordinated Indebtedness" in its
entirety and substituting the following therefor:
"Subordinated Indebtedness" means (i) the Indebtedness of
Borrower evidenced by the Senior Subordinated Notes, (ii) the
Indebtedness of Borrower evidenced by the New Senior Subordinated Notes
and (iii) any other Indebtedness of Borrower (including without
limitation any subordinated Refinancing Indebtedness) subordinated in
right of payment to the Obligations pursuant to documentation
containing maturities, amortization schedules, covenants, defaults,
remedies, subordination provisions and other material terms in form and
substance satisfactory to Managing Agent and Requisite Lenders.
B. Amendments to Subsection 2.3.
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(i) Subsection 2.3A is amended by deleting in its
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entirety the last full sentence thereof and substituting the following therefor:
"Each of the above commitment fees shall be calculated on the basis of
a 360-day year and the actual number of days elapsed and shall be
payable (i) with respect to fees accruing on or prior to January 1,
2002, quarterly in arrears on April 1, July 1, October 1 and January 1,
(ii) with respect to fees accruing after January 1, 2002, monthly in
arrears on the first day of each calendar month commencing thereafter,
and (iii) on the Commitment Termination Date."
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(ii) Subsection 2.3B is amended by deleting in its
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entirety such section and substituting the following therefor:
"B. Annual Administrative Fee. Borrower agrees to pay to
Managing Agent an annual administrative fee in the amount of $50,000,
payable (i) quarterly in advance on April 1, July 1, October 1 and
January 1 with respect to fees due on or prior to January 1, 2002, and
(ii) with respect to fees due after January 1, 2002, annually in
advance on the first day of each April, commencing with April 1, 2002."
(iii) Subsection 2.3C is amended by deleting in its entirety
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such section and substituting the following therefor:
"C. Collateral Agent Fee. Borrower agrees to pay to Collateral
Agent an annual collateral agent's fee equal to $50,000 per year,
payable (i) quarterly in advance on April 1, July 1, October 1 and
January 1 with respect to fees accruing on or prior to January 1, 2002,
and (ii) with respect to fees due after January 1, 2002, annually in
advance on the first day of each April, commencing with April 1, 2002."
C. Amendments to Subsection 2.4A(iii)(d)
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(i) Subsection 2.4A(iii)(d) is hereby amended by deleting such
subsection in its entirety and substituting the following therefor:
"(d) Prepayments from Liquidity Proceeds and Additional
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Liquidity Proceeds. Immediately upon receipt by Borrower of Liquidity
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Proceeds or Additional Liquidity Proceeds pursuant to subsection 6.15
prior to June 30, 2002, except for such Additional Liquidity Proceeds
as are deemed to have been received by Borrower upon consummation of an
Approved Exchange Offer, Borrower shall prepay the Swing Line Loans and
the Revolving Loans in an amount equal to such proceeds. Any mandatory
prepayment of the Loans pursuant to this subsection 2.4A(iii)(d) shall
be applied as provided in subsection 2.4A(iv), except that the
Revolving Loan Commitments will not be reduced as a result of such
prepayment."
D. Amendments to Subsection 3.2
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(i) Subsection 3.2(i) is hereby amended by deleting such
subsection in its entirety and substituting the following therefor:
"(i) with respect to each Financial Standby Letter of Credit, (a) a
fronting fee equal to 0.25% of the aggregate maximum amount available
to be drawn under such Financial Standby Letter of Credit and (b) a
letter of credit fee equal to the Applicable Margin that would be
applicable to LIBOR Rate Loans made during such period (regardless of
whether LIBOR Rate Loans are in fact made during such period), changing
as and when such Applicable Margin changes, multiplied by the average
daily maximum amount available to be drawn under such Financial Standby
Letter of Credit, in each case computed on the basis of a 360-day year
for the actual number of days elapsed and payable (i) quarterly in
arrears on April 1, July 1, October 1 and January 1 with respect to
fees accruing on or prior to January 1, 2002, and (ii) with respect to
fees accruing after
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January 1, 2002, monthly in arrears on the first day of each calendar
month, commencing with February 1, 2002."
(ii) Subsection 3.2(ii) is hereby amended by deleting such
subsection in its entirety and substituting the following therefor:
"(ii) with respect to each Nonfinancial Standby Letter of Credit, (a) a
fronting fee equal to 0.25% of the aggregate maximum amount available
to be drawn under such Nonfinancial Standby Letter of Credit and (b) a
letter of credit fee equal to the Applicable Margin that would be
applicable to LIBOR Rate Loans made during such period (regardless of
whether LIBOR Rate Loans are in fact made during such period), changing
as and when such Applicable Margin changes, less 0.50% per annum
multiplied by the average daily maximum amount available to be drawn
under such Nonfinancial Standby Letter of Credit, in each case computed
on the basis of a 360-day year for the actual number of days elapsed
and payable (i) quarterly in arrears on April 1, July 1, October 1 and
January 1 with respect to fees accruing on or prior to January 1, 2002,
and (ii) with respect to fees accruing after January 1, 2002, monthly
in arrears on the first day of each calendar month, commencing with
February 1, 2002."
E. Amendments to Subsection 5.2.
(i) Subsection 5.2E is amended by deleting such section
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in its entirety and substituting the following therefor:
"E. Valid Issuance of Senior Subordinated Notes and New Senior
Subordinated Notes. Borrower has the corporate power and authority to
issue the Senior Subordinated Notes and the New Senior Subordinated
Notes. The Senior Subordinated Notes and the New Senior Subordinated
Notes, when issued and paid for, will be the legally valid and binding
obligations of Borrower, enforceable against Borrower in accordance
with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
limiting creditors' rights generally or by general equitable principles
whether enforcement is sought in equity or at law. The Loans, Letters
of Credit and all other Obligations hereunder are and will be within
the definitions of "Senior Debt" included in each of the Subordinated
Note Indenture and, upon the effectiveness thereof, the New
Subordinated Note Indenture and are (or in the case of the New
Subordinated Note Indenture will be) the only liabilities that
constitute "Designated Senior Debt" as defined therein. The Senior
Subordinated Notes and the New Senior Subordinated Notes, when issued
and sold, will either (a) have been registered or qualified under
applicable federal and state securities laws or (b) be exempt from
registration thereunder."
F. Amendments to Section 4.
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(i) Subsections 4.2B(ii) and 4.4C(v) are each amended to
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add the following phrase at the end of each such subsection:
"other than a `Specified Default' during the `Forbearance Period' as
such terms are defined in the Seventh Amendment."
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G. Amendment to Subsection 5.8A.
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(i) Subsection 5.8A is amended to add the following
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phrase at the end of such subsection:
"and except the occurrence of `Specified Defaults' during the
`Forbearance Period' as such terms are defined in the Seventh
Amendment."
H. Amendments to Subsection 6.15.
(i) Subsection 6.15 is amended by deleting the first
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paragraph thereof in its entirety and to substituting the following therefor:
"During the period from the Third Amendment Effective Date to
June 30, 2002, Borrower shall receive not less than $10,000,000 of net
cash proceeds from any of the following transactions in the aggregate
(such proceeds in the aggregate, received from such sources, whether
received on, prior to or after such date and prior to June 30, 2002,
being the "Liquidity Proceeds"): (i) Indebtedness secured by Liens on
any of the properties listed in Exhibit B to the Third Amendment and
permitted under subsection 7.1(xv) hereof, (ii) the sale of the capital
stock of Xxxxxx Xxxx or other Asset Sales permitted under subsection
7.7 hereof, (iii) the issuance by Borrower of its common or preferred
equity securities pursuant to documentation delivered to Managing Agent
and Lenders and in form and substance satisfactory to Managing Agent;
provided that all net cash proceeds from all transactions described in
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this sentence of subsection 6.15 shall be immediately applied to repay
Loans in accordance with this Agreement; provided further, for purposes
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of this sentence, all Additional Liquidity Proceeds received in excess
of $25,000,000 shall be deemed to be Liquidity Proceeds, it being
agreed and understood that, for purposes hereof, upon consummation of
an Approved Exchange Offer, the Borrower shall be deemed to have
received Additional Liquidity Proceeds in an amount equal to the
outstanding principal amount of Senior Subordinated Notes exchanged and
cancelled pursuant to such transaction. In addition to the receipt of
Liquidity Proceeds as provided in the preceding sentence, during the
period from the Sixth Amendment Effective Date to January 31, 2002
(such proceeds in the aggregate, received from such sources, excluding
any Liquidity Proceeds, the "Additional Liquidity Proceeds") (i)
Borrower shall receive not less than $25,000,000 of net cash proceeds
from the issuance by Borrower of its common or preferred equity
securities pursuant to documentation delivered to Managing Agent and
Lenders and in form and substance satisfactory to Managing Agent or
from the issuance of Refinancing Indebtedness or (ii) Borrower shall
have consummated an Approved Exchange Offer. The Borrower hereby
represents and warrants that it has received $4,306,022.66 of Liquidity
Proceeds contemplated by this subsection 6.15 on or prior to December
10, 2001."
I. Amendments to Section 7.
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(i) Subsection 7.1(x) is amended by deleting such
subsection in its entirety and to substituting the following therefor:
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"(x) Borrower may remain liable in respect of the Senior
Subordinated Notes and the New Senior Subordinated Notes;"
(ii) Subsection 7.5 is amended to add the parenthetical
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"(except with respect to Restricted Junior Payments under clauses (ii), (iii)
and (vii) below)" immediately prior to the phrase in the proviso thereof "as
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long as no Event of Default or Potential Event of Default has occurred and is
continuing, or would result therefrom".
(iii) Subsection 7.5 is further amended by deleting clause
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(ii) of such subsection in its entirety and to substituting the following
therefor:
"(ii) make regular scheduled interest payments on the Senior
Subordinated Notes and the New Senior Subordinated Notes;"
(iv) Subsection 7.5 is further amended by deleting clause
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(iii) of such subsection in its entirety and to substituting the following
therefor:
"(iii) consummate an Approved Exchange Offer;"
(v) Subsection 7.5 is further amended by deleting clauses (vi)
and (vii) of such subsection in their entirety and to substituting the following
therefor:
"(vi) repay the Senior Subordinated Notes in an aggregate amount not to
exceed $8,000,000 with the proceeds of Indebtedness received on or
prior to December 13, 2001 and secured by Liens on any of the
properties listed on Exhibit B to the Third Amendment permitted under
subsection 7.1(xv) hereof; and (vii) in addition to transactions
permitted by the foregoing clauses, use cash on hand to pay the
outstanding principal balance and accrued interest with respect to the
Senior Subordinated Notes which is due and payable at their final
maturity, or to repurchase such Senior Subordinated Notes; provided
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that (x) an Approved Exchange Offer has been consummated or is being
consummated concurrently with such payments or repurchases and (y)
Excess Availability as of the date of such payment or repurchase shall
not be less than the Required Excess Availability Amount (after giving
effect to such payments or repurchases); provided further that on or
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prior to the date of any such payments or repurchases, the Managing
Agent shall have received an Officer's Certificate of Borrower, in form
and substance satisfactory to Managing Agent, confirming such Excess
Availability and the satisfaction of any other requirements of this
subsection 7.5(vii), in reasonable detail as of such date."
(vi) Subsection 7.6C is amended by deleting such
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subsection in its entirety and substituting the following therefor:
"C. Minimum Consolidated Adjusted EBITDA. Borrower shall not permit its
Consolidated Adjusted EBITDA for the period commencing on September 1,
2001 and ending as of the last day of any month set forth below to be
less (or, in the case of a loss, to be a greater loss) than the
correlative amount indicated:
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Period Minimum Consolidated Adjusted EBITDA
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November 30, 2001 $2,200,000
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December 31, 2001 $(2,500,000)
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January 31, 2002 $1,300,000
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February 28, 2002 $6,700,000
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May 31, 2002 $10,500,000
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As soon as available and in any event within thirty days after the end
of each period during which this subsection 7.6C is applicable (or, in
the case of the period ending November 30, 2001, by January 10, 2002),
Borrower shall deliver to Managing Agent and Lenders a compliance
certificate in form and substance satisfactory to Managing Agent
setting forth its Consolidated Adjusted EBITDA for the applicable
period and stating whether or not Borrower is in compliance with this
subsection 7.6C as of the end of such period."
(vii) Section 7 is further amended by the addition of the
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following Subsection 7.18:
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7.18. Designated Senior Debt.
Anything in the Loan Documents or the Related Documents to the
contrary notwithstanding, in no event shall Borrower permit any
Indebtedness or Contingent Obligations other than the Obligations to
constitute or be designated as "Designated Senior Debt" (as that term
is defined in the New Subordinated Note Indenture). This subsection
7.18 shall not be amended, modified, terminated or waived without a
written consent signed by or on behalf of all the Lenders.
J. Amendment to Subsection 8.2.
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(i) Subsection 8.2(b)(iii) is amended by deleting such
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subsection in its entirety and substituting the following therefor:
"or (iii) breach or default by Borrower or any of its Subsidiaries
under the Senior Subordinated Notes, the New Senior Subordinated Notes,
the Subordinated Note Indenture or the New Subordinated Note Indenture
or any of the Refinancing Debt Documents;"
K. Amendment to Subsection 10.21A(iv)
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(i) Subsection 10.21A(iv) is amended by deleting in its
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entirety such subsection and substituting the following therefor:
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"(iv) Notwithstanding the date, manner or order of perfection or
recording of the security interests and Liens granted pursuant to the
Collateral Documents, and notwithstanding any provisions of the UCC, of
any applicable law or decision, or of the Loan Documents, or whether
Borrower or Collateral Agent holds possession of all or any part of the
Collateral, all right, title and interest of Borrower as a secured
party in and to any Collateral (collectively, the "Junior Lien") is
junior and subordinate to all rights and interests of Agents and
Lenders therein, and that the priorities, subordinations and
distribution arrangements specified in this Section 10.21 and the other
provisions of this Section 10.21 with respect to any Collateral are
expressly intended to be effective regardless of the avoidability or
non-perfection of the security interests and Liens held by Collateral
Agent in such Collateral, and in the event the security interests or
Liens held by Collateral Agent in any Collateral is judicially
determined to be unperfected or is avoided for any reason, then the
priorities, subordinations and distribution arrangements provided for
in this Section 10.21, shall as to the parties to this Agreement,
remain effective as to such Collateral; provided that the Requisite
Lenders may, at their option and at any time, waive any of the
subordination provisions of this subsection 10.21A(iv). Borrower agrees
that it will not challenge the legality, validity, enforceability or
priority of the Obligations or the legality, validity, enforceability,
perfection or priority of the Liens granted pursuant to the Collateral
Documents as set forth herein or the rights of any secured party
thereunder."
SECTION 2. Forbearance and Waiver.
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(a) Upon the satisfaction of the conditions precedent set
forth in Section 3 hereof, the Managing Agent and the Requisite Lenders, on
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behalf of all Lenders, hereby agree to forebear and not take any of the
following actions as a result of the occurrence and continuance of any of the
Specified Defaults for the period beginning on the date this Agreement becomes
effective and ending immediately upon the earliest of (i) the occurrence of any
Event of Default other than any of the Specified Defaults, (ii) January 31,
2002, and (iii) the Borrower's failure to commence an Approved Exchange Offer on
or prior to December 21, 2001, or the subsequent termination or expiration of
such Approved Exchange Offer prior to its consummation, or any amendment or
modification of such Approved Exchange Offer without the prior written approval
of the Requisite Lenders (such period being hereinafter referred to as the
"Forbearance Period"): terminate any of the Commitments, commence judicial
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enforcement proceedings against the Borrower or any of the Guarantors with
respect to the payment of any Obligations, commence any foreclosure or levy
against or seizure of all or any portion of the Collateral (other than pursuant
to Section 6.10), or apply the increased rates of interest as described in
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Subsection 2.2E of the Credit Agreement to the outstanding principal amount of
any Loans and any interest payments thereon not paid when due and any fees and
other amounts then due and payable under the Credit Agreement pursuant to
Subsection 2.2E thereof.
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(b) The Managing Agent and the Requisite Lenders, on behalf of
all the Lenders, expressly reserve the right to exercise all remedies under the
Loan Documents and applicable law with respect to all now existing and hereafter
arising Events of Default immediately upon the expiration of the Forbearance
Period, including, without limitation, the rights and remedies identified in
clauses (1) through (4) of subsection (a) above, in respect of all Specified
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Defaults and any other Events of Default then existing.
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(c) Except for the forbearance to the extent expressly set
forth above, the Managing Agent and the Requisite Lenders, on behalf of all the
Lenders, reserve each and every right and remedy they may have under the Loan
Documents and under applicable law. Nothing in this Agreement shall be deemed to
constitute a waiver by the Managing Agent or any Lender of any Event of Default,
whether now existing or hereafter arising, or of any right or remedy the
Managing Agent and the Lenders may have under any of the Loan Documents or
applicable law, except to the extent expressly forborne as set forth above in
subsection (a) or waived pursuant to subsection (d) below. In furtherance and
not in limitation of the foregoing, the Borrower acknowledges that the Managing
Agent shall have the present right to deliver to the holders of the Senior
Subordinated Notes a "Payment Notice" pursuant to Section 10.3 of the
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Subordinated Note Indenture, and that, following such notice and during the
resulting "Payment Blockage Period" as defined therein, no further payments on
the Senior Subordinated Notes may be made by the Borrower or accepted by such
holders thereunder as provided therein.
(d) Notwithstanding the foregoing, if, prior to the expiration
of the Forbearance Period, the Borrower consummates an Approved Exchange Offer,
then, effective concurrently with such consummation, each of the Specified
Defaults shall be hereby waived by the Lenders without the requirement of any
further action by any party hereto.
SECTION 3. Effectiveness of the Amendment and Waiver;
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Conditions Precedent. The provisions of Sections 1 and 2 of this Agreement shall
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become effective as of the date hereof upon the Managing Agent's receipt of each
of the following:
(a) originally-executed (or facsimiles of originally-executed)
counterparts of this Agreement executed and delivered by duly authorized
officers of the Borrower, each Guarantor and the Requisite Lenders;
(b) payment, in immediately available funds, of the amendment
fee described in that certain Fee Letter of even date herewith by and between
the Managing Agent and the Borrower, which amendment fee shall be allocated
among the Lenders who execute and deliver counterparts to this Agreement on or
before December 17, 2001 ratably based upon their relative Revolving Commitments
and interests in the outstanding Tranche C Term Loans; and
(c) waiver or forbearance agreements, in form and substance
acceptable to the Managing Agent, from the holders of Indebtedness issued
pursuant to the Canadian Credit Agreement and the Indiana Real Estate Financing,
effectively waiving the Cross Defaults thereunder or forbearing from their
exercise of enforcement remedies with respect thereto.
SECTION 4. Representations and Warranties. The Borrower and
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each Guarantor hereby represents and warrants that (a) this Agreement
constitutes its legal, valid and binding obligation, enforceable against each
such party in accordance with its terms and (b) there is no consent, approval or
other requirement known to the Borrower or such Guarantor which could reasonably
be expected to impair or materially delay the Borrower's or such Guarantor's
ability to perform its obligations under this Agreement or the Credit Agreement
as proposed to be amended hereby and (c) except for the Specified Defaults, no
Default or Event of Default exists and is continuing.
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SECTION 5. Reaffirmation, Ratification and Acknowledgment. (a)
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The Borrower and each of the Guarantors hereby (i) ratifies and reaffirms all of
its payment and performance obligations, contingent or otherwise, and each grant
of security interests and liens in favor of the Managing Agent, under each Loan
Document to which it is a party, (ii) agrees and acknowledges that such
ratification and reaffirmation is not a condition to the continued effectiveness
of such Loan Documents, and (iii) agrees that neither such ratification and
reaffirmation, nor the Managing Agent's nor any Lenders' solicitation of such
ratification and reaffirmation, constitutes a course of dealing giving rise to
any obligation or condition requiring a similar or any other ratification or
reaffirmation from the Borrower or the Guarantors with respect to any subsequent
modifications consent or waiver with respect to the Credit Agreement or other
Loan Documents. The Credit Agreement and each other Loan Document is in all
respects hereby ratified and confirmed and, except as is expressly set forth in
Section 2 hereof, neither the execution, delivery nor effectiveness of this
Agreement shall operate as a waiver of any Default or Event of Default (whether
or not known to the Managing Agent, the Collateral Agent or any Bank) or any
right, power or remedy of the Managing Agent, the Collateral Agent or any Bank
of any provision contained in the Credit Agreement or any other Loan Document,
whether as a result of any Default or Event of Default or otherwise. This
Agreement shall constitute a "Loan Document" for purposes of the Credit
Agreement.
(b) The Borrower and each of the Guarantors hereby
acknowledges and confirms that (i) it does not have any grounds, and hereby
agrees not to challenge (or to allege or to pursue any matter, cause or claim
arising under or with respect to), in any case based upon acts or omissions of
the Managing Agent or any of the Lenders occurring prior to the date hereof or
facts otherwise known to it as of the date hereof, the effectiveness,
genuineness, validity, collectibility or enforceability of the Credit Agreement
or any of the other Loan Documents, the Obligations, the Liens securing such
Obligations, or any of the terms or conditions of any Loan Document (it being
understood that such acknowledgement and confirmation does not preclude the
Borrower or the Guarantors from challenging the Managing Agent's or any Bank's
interpretation of any term or provision of the Credit Agreement or other Loan
Document) and (ii) it does not possess (and hereby forever waives, remises,
releases, discharges and holds harmless the Requisite Lenders, the Managing
Agent and their respective affiliates, stockholders, directors, officers,
employees, attorneys, agents and representatives and each of their respective
heirs, executors, administrators, successors and assigns (collectively, the
"Indemnified Parties") from and against, and agrees not to allege or pursue) any
action, cause of action, suit, debt, claim, counterclaim, cross-claim, demand,
defense, offset, opposition, demand and other right of action whatsoever,
whether in law, equity or otherwise (which it, all those claiming by, through or
under it, or its successors or assigns, have or may have) against the
Indemnified Parties, or any of them, by reason of, any matter, cause or thing
whatsoever, with respect to events or omissions occurring or arising on or prior
to the date hereof and relating to the Credit Agreement or any of the other Loan
Documents (including, without limitation, with respect to the payment,
performance, validity or enforceability of the Obligations, the Liens securing
the Obligations or any or all of the terms or conditions of any Loan Document)
or any transaction relating thereto; provided, however, that neither the
-----------------------
Borrower nor any Guarantor hereby releases or holds harmless any Indemnified
Party for actions or omissions by any such Indemnified Party constituting, or
losses or expenses directly resulting from, the gross negligence or willful
misconduct of such Indemnified Party as determined by a final judgment of a
court of competent jurisdiction.
11
SECTION 6. Additional Liquidity Reserve. Pursuant to the
----------------------------
provisions of the Credit Agreement, the Collateral Agent has established, in its
discretion, effective immediately, an additional liquidity reserve against the
Borrowing Base in the amount of $15,000,000, which reserve (based upon the
Collateral Agent's current intent and subject to its continuing discretion)
shall be reduced to $5,000,000 if and when an "Approved Exchange Offer" is
consummated (as proposed to be defined pursuant to Subsection 1.1 of this
Agreement).
SECTION 7. Miscellaneous.
(a) Execution in Counterparts; Governing Law This Agreement
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which when taken together shall constitute
but one and the same instrument. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
(b) Section Titles. The section titles contained in this
--------------
Agreement are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
(c) Managing Agent's Expense. The Borrower hereby agrees to
------------------------
promptly reimburse the Managing Agent for all reasonable out-of-pocket expenses,
including, without limitation, attorneys' and paralegals fees, it has heretofore
or hereafter incurred or incurs in connection with the preparation, negotiation
and execution of this Agreement or any document, instrument, agreement delivered
pursuant to this Agreement.
* * * *
12
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and Waiver to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
BORROWER:
HARTMARX CORPORATION
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Xxxxx X. Xxxxxx, Executive Vice President and
Chief Financial Officer
7th Amendment Signature Page, 1 of 9
GUARANTORS:
HMX Sportswear, Inc. (formerly known as
American Apparel Brands, Inc.)
Anniston Sportswear Corporation
Briar, Inc.
Consolidated Apparel Group, Inc.
C.M. Clothing, Inc.
C.M. Outlet Corp.
Chicago Trouser Company, Ltd.
Country Miss, Inc.
Country Suburbans, Inc.
Direct Route Marketing Corporation
E-Town Sportswear Corporation
Xxxxxxxx-Xxxxx, Inc.
Gleneagles, Inc.
Handmacher Fashions Factory Outlet, Inc.
Xxxxxxxxxx-Xxxxx, Inc.
Hartmarx International, Inc.
Xxxx Xxxxxxxxx & Xxxx
Xxxx Services, Inc.
Xxxx. Xxxxx Clothes, Inc.
TAG Licensing, Inc.
Xxxxxx-Xxxxxxx Co., Inc.
Xxxxxxx, Xxxxx & Xxxx, Inc.
Hoosier Factories, Incorporated
HSM University, Inc.
Intercontinental Apparel, Inc.
International Women's Apparel, Inc.
Xxxxxx-Xxxx, Inc.
JRSS, Inc.
Kuppenheimer Men's Clothiers
Dadeville, Inc.
Men's Quality Brands, Inc.
National Clothing Company, Inc.
106 Real Estate Corp.
Robert's International Corporation
SALHOLD, Inc.
Seaford Clothing Co.
Society Brand, Ltd.
Xxxxxx Surrey, Inc.
Tailored Trend, Inc.
Thorngate Uniforms, Inc.
Trade Finance International Limited
Universal Design Group, Ltd.
X. Xxxx & Company, Inc.
7th Amendment Signature Page, 2 of 9
Winchester Clothing Company
Yorke Shirt Corporation
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Xxxxx X. Xxxxxx
Vice President of each of the foregoing
7th Amendment Signature Page, 3 of 9
LENDERS:
GENERAL ELECTRIC CAPITAL CORPORATION,
individually, as Managing Agent and as
Collateral Agent
By: /s/ Xxxxxxx X. XxXxx
-----------------------------------
Name: Xxxxxxx X. XxXxx
Title: Duly Authorized Signatory
7th Amendment Signature Page, 4 of 9
THE BANK OF NEW YORK,
individually, as Co-Agent and as Issuing Lender
for the Letters of Credit
By: /s/ Xxxxxxxxx Xxxx Xxxxx
----------------------------------------
Name: Xxxxxxxxx Xxxx Xxxxx
Title: Vice President
7th Amendment Signature Page, 5 of 9
BANK OF AMERICA, N.A.,
individually and as Co-Agent
By: /s/ Xxxxx Xxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
7th Amendment Signature Page, 6 of 9
MANUFACTURERS AND TRADERS TRUST COMPANY
By: /s/ Xxxxxxxxxxx Xxxxx
----------------------------------------
Name: Xxxxxxxxxxx Xxxxx
Title: Vice President
7th Amendment Signature Page, 7 of 9
XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxx X. Xxxx
Title: Vice President
7th Amendment Signature Page, 8 of 9
THE NORTHERN TRUST COMPANY
By: /s/ X. Xxxxxxxx
----------------------------------------
Name: X. Xxxxxxxx
Title: Vice President
7th Amendment Signature Page, 9 of 9
