EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into as
of October 1, 2005, by and between LACROSSE FOOTWEAR, INC., a Wisconsin
corporation ("Borrower"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of April 15, 2004, as amended from time to time ("Credit Agreement").
WHEREAS, Bank and Borrower have agreed to certain changes in the terms and
conditions set forth in the Credit Agreement and have agreed to amend the Credit
Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:
1. Section 1.1(a) is hereby amended to read as follows:
"(a) Line of Credit. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to
time under a revolving line of credit ("Line of Credit") up to and
including June 30, 2007, not to exceed (i) at any time (other than during
each Reduction Period, as defined below), the aggregate principal amount
of Thirty Million Dollars ($30,000,000.00), and (ii) from and including
each January 1 to and including each May 31 (with each such period
referred to as a "Reduction Period"), the aggregate principal amount of
Seventeen Million Five Hundred Thousand Dollars ($17,500,000.00), the
proceeds of which shall be used to finance the working capital
requirements of Borrower and Xxxxxx, Inc., a Wisconsin corporation
("Subsidiary"). Borrower's obligation to repay advances under the Line of
Credit shall be evidenced by a promissory note dated as of October 1, 2005
in the form attached hereto as Exhibit A ("Line of Credit Note"), all
terms of which are incorporated herein by this reference.
2. Section 1.1(b) (entitled "Limitation on Borrowings") is hereby deleted
in its entirety, without substitution.
3. Section 1.1(c) is hereby amended to delete the phrase", subject to the
Borrowing Base limitation" from the end of the first sentence.
4. Section 1.1(d) is hereby amended to read as follows:
"(d) Borrowing and Repayment. Borrower may from time to time during
the term of the Line of Credit borrow, partially or wholly repay its
outstanding borrowings, and reborrow, subject to all of the limitations,
terms and conditions contained herein or in the Line of Credit Note;
provided however, that the total outstanding borrowings, Letters of Credit
and Usance Drafts under the Line of Credit shall not at any time exceed
the
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applicable maximum principal amount available thereunder, as set forth in
Section 1.1(a) above. The provisions of the Line of Credit Note (as
modified, replaced, renewed, or restated from time to time) are
incorporated by this reference herein."
5. Section 1.2(d) is hereby amended to read as follows:
"(d) Annual Fee. Borrower shall pay to Bank a periodic
non-refundable commitment fee for the Line of Credit equal to Ten Thousand
Dollars ($10,000.00)."
Such fee shall be payable on the date of Borrower's execution of this Amendment,
and thereafter on each June 1 until Bank has no further commitments to make Line
of Credit Advances under the Loan Documents.
6. The second paragraph of Section 1.3 is hereby amended by deleting
therefrom the phrase "including the pre-loan feasibility audit, the initial
collateral audit and annual collateral audits."
7. Section 2.5 is hereby amended by (a) deleting the phrase "September 27,
2003" and replacing it with "June 25, 2005, and (b) by adding at the end of the
first sentence the phrase: "; all subject to normal year-end audit adjustments
and the absence of footnotes"."
8. Section 2.12 is hereby amended and restated in its entirely as follows:
"SECTION 2.12. SUBSIDIARY. Subsidiary and Lacrosse International,
Inc. are the only entities in existence as of October 17, 2005 in which
Borrower owns all or a majority or a controlling share of the equity
interests."
9. Section 4.3(c) is hereby deleted in its entirety, without substitution:
10. Section 4.3(d) is amended and restated in its entirety as follows:
"(d) Contemporaneously with each annual and quarterly financial
statement of Borrower required hereby, a certificate of the president or
chief financial officer of Borrower that (a) said financial statements
fairly present in all material respects the financial conditions, results
of operations, and cash flows of the Borrower (and in the case of
financial statements presented for the first, second, and third fiscal
quarters of the Borrower, subject to normal year-end audit adjustments and
the absence of footnotes), and (b) to the knowledge of such officer there
exists no Event of Default nor any condition, act or event which with the
giving of notice or the passage of time or both would constitute an Event
of Default."
11. Section 4.9(a) is hereby deleted in its entirety, and the following
substituted therefor:
"(a) Tangible Net Worth not less than $30,000,000.00 determined as
of the end of each fiscal quarter, with "Tangible Net Worth" defined as
the aggregate of total stockholders' equity plus Subordinated Debt less
any intangible assets, and with "Subordinated Debt" defined as
indebtedness subordinated in right of payment to Borrower's indebtedness
to Bank pursuant to subordination agreements satisfactory to Bank."
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12. The following is hereby added to the Credit Agreement as Section
4.9(d).
"(d) Current Ratio not less than 1.75 to 1.0, determined as of the
end of each fiscal quarter end, with "Current Ratio" defined as the ratio
of current assets to total current liabilities, and with current
liabilities hereby deemed to include, without limitation, the then
outstanding principal amount of all liabilities, contingent or liquidated,
under the Line of Credit."
13. Borrower shall promptly notify Bank in the event that the assets or
revenues of Lacrosse International, Inc. ("New Subsidiary") represent 5% or more
of Borrower's consolidated assets or consolidated revenues, respectively,
following which Bank and Borrower shall enter into a further amendment to the
Credit Agreement whereby all affirmative and negative covenants and Events of
Default which at such time apply to Subsidiary shall be also made applicable to
New Subsidiary, on terms reasonably acceptable to Bank and Borrower.
14. Except as specifically provided herein, all terms and conditions of
the Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
15. Borrower hereby remakes all representations and warranties contained
in the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY BANK
CONCERNING LOANS AND OTHER CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY
OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S RESIDENCE MUST BE IN
WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY BANK TO BE ENFORCEABLE.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
XXXXX FARGO BANK,
LACROSSE FOOTWEAR, INC. NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxxx By: /s/ Xxxxx X. Xxxxxxx
_______________________ ______________________
Xxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxx
President/chief Executive Officer Relationship Manager
By: /s/ Xxxxx X. Xxxxxxx
_____________________
Xxxxx X. Xxxxxxx
Executive Vice President/Chief Financial Officer
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