Exhibit 10.2
AMENDMENT AND WAIVER AGREEMENT
THIS AMENDMENT AND WAIVER AGREEMENT (this "Agreement") is made and entered
into as of this 10th day of December, 1999, among ITHACA INDUSTRIES, INC., a
Delaware corporation ("Borrower"), the Lenders party to this Agreement (the
"Lenders"), and BANK OF AMERICA, N.A., a national banking association, formerly
NationsBanks, N.A., as the collateral agent for the Lenders (the "Agent").
W I T N E S S E T H:
--------------------
WHEREAS, Borrower, the Lenders, and the Agent, entered into that certain
Loan and Security Agreement, dated as of March 24, 1998, pursuant to which the
Lenders agreed to make certain loans to Borrower (as amended, modified,
supplemented and restated from time to time, the "Loan Agreement"); and
WHEREAS, Borrower has asked the Lenders to waive certain Events of Default
under the Loan Agreement; and
WHEREAS, the Lenders are willing to grant such waiver, subject to the terms
and conditions set forth herein; and
NOW, THEREFORE, in consideration of the foregoing premises, and other good
and valuable consideration, the receipt and legal sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. All capitalized terms used herein and not otherwise expressly
defined herein shall have the respective meanings given to such terms in the
Loan Agreement.
2. In reliance upon the representations, warranties, agreements and
covenants of Borrower set forth herein and in the Loan Agreement, as amended
hereby, the Lenders agree to waive the defaults under Sections 12.1(a), (b) and
(c) of the Loan Agreement for the fiscal quarter ended October 30, 1999
(collectively, the "Specified Defaults"); provided, however, the waiver of the
Specified Defaults shall no longer be effective (and the defaults thereunder
shall no longer constitute Specified Defaults) unless Borrower has complied with
the terms of Paragraph 3(c) of this Agreement on or before the date set forth
therein. Notwithstanding the foregoing waiver, the Lenders reserve all of their
rights and remedies at all times with respect to any Default or Event of
Default, other than the Specified Defaults, whether presently existing or
occurring hereafter.
Page 25
26
3. In order to induce the Lenders to enter into this Agreement and
grant the accommodations set forth herein, Borrower hereby represents, warrants,
agrees and covenants that:
(a) attached hereto as Exhibit A is a true and correct copy of the
Amendment and Waiver Agreement, dated of even date herewith, with respect
to the Senior Loan Agreement (the "Senior Lender Amendment and Waiver"),
and upon the effective date of this Agreement, the Senior Lender Amendment
and Waiver shall be in full force and effect and all conditions precedent
to the effectiveness thereof shall have been satisfied or waived; and
(b) [Intentionally Deleted]
(c) on or before December 31, 1999, Borrower shall deliver to the
Lenders the final operating budget for Borrower and its Consolidated
Subsidiaries for the fiscal year commencing on or about January 31, 2000,
in the form customarily prepared by management of Borrower consistent with
past practice, together with a statement of the assumptions upon which such
budget was prepared.
4. [Intentionally Deleted]
5. [Intentionally Deleted]
6. [Intentionally Deleted]
7. [Intentionally Deleted]
8. [Intentionally Deleted]
9. The parties hereto acknowledge that (a) it is their intent to
establish new financial covenants for the fiscal year ending on or about January
31, 2000 and the succeeding fiscal year based on, among other things, the
appraisals and budget described in paragraph 3(b) of the Senior Lender Amendment
and Waiver and paragraph 3(c) of this Agreement and (b) the establishment of
acceptable financial covenants is a material condition to the Lenders'
determination to continue to make financial accommodations available to the
Borrower after such fiscal year end. Therefore, the parties hereto agree (i) to
negotiate in good faith to establish such financial covenants prior to such
fiscal year end on terms acceptable to all of the parties hereto and (ii) that
in the event that the parties hereto are not able in good faith to establish
such financial covenants prior to such fiscal year end, on terms acceptable to
all of the parties hereto, at the election of the Required Lenders the Term Loan
shall automatically terminate, and all of the Secured Obligations under the Loan
Agreement shall be due and payable as of such fiscal year end.
Page 26
27
10. The effectiveness of this Agreement and the waiver and amendments
set forth herein shall be conditioned upon the receipt by the Lenders of the
following certificates, agreements and opinions, all of which shall be in form
and substance reasonably satisfactory to the Lenders:
(a) a certificate of the Secretary of Borrower as to such corporate
and other matters as the Lenders may reasonably request;
(b) if requested by the Lenders, an opinion of Borrower's counsel as
to such matters as the Lenders may reasonably request; and
(c) a certified copy of the duly executed and delivered Senior Lender
Amendment and Waiver, including a certification of the Financial Officer
that such Senior Lender Amendment and Waiver is in full force and effect
and all conditions precedent to the effectiveness thereof have been
satisfied or waived.
11. The Loan Agreement is amended by deleting Schedules 1.1B, 7.1(h),
7.1(u), 7.1(v) and 7.1(w) and replacing them with the Schedules attached to this
Agreement as Exhibit B.
12. As consideration for the accommodations set forth herein, on the
effective date of this Agreement, Borrower shall pay to the Lenders a
non-refundable fee of $150,000, such fee to be shared among the Lenders on a
ratable basis.
13. To induce the Lenders to enter into this Agreement, Borrower
hereby represents and warrants that, as of the date hereof, except for the
Specified Defaults and except for any defaults waived by the Senior Lender
Amendment and Waiver, which defaults may be deemed to be a Default or an Event
of Default under the Loan Agreement, there exists no Default or Event of Default
under the Loan Agreement.
14. Borrower hereby restates, ratifies, and reaffirms each and every
term, condition, representation and warranty heretofore made by it under or in
connection with the execution and delivery of the Loan Agreement, as amended
hereby, and the other Loan Documents, as fully as though such representations
and warranties had been made on the date hereof and with specific reference to
this Agreement, except to the extent that any such representation or warranty
relates solely to a prior date and except if Borrower has previously informed
the Agreement of any inaccuracies or changes in such terms, conditions,
representations and warranties.
15. Except as expressly set forth herein, the Loan Agreement and the
other Loan Documents shall be and remain in full force and effect as originally
written, and shall constitute the legal, valid, binding and enforceable
obligations of Borrower to the Agent and the Lenders.
Page 27
28
16. In addition to any other fees described herein, Borrower agrees to
pay on demand all reasonable costs and expenses of the Agent and the Lenders in
connection with the preparation, execution, delivery and enforcement of this
Agreement and all other Loan Documents and any other transactions contemplated
hereby, including, without limitation, the reasonable fees and out-of-pocket
expenses of legal counsel to the Agent and the Lenders.
17. To induce the Agent and the Lenders to enter into this Agreement
and grant the accommodations set forth herein, Borrower (a) acknowledges and
agrees that no right of offset, defense, counterclaim, claim or objection exists
in favor of Borrower against the Agent or any Lender arising out of or with
respect to the Loan Agreement, the other Loan Documents or the Secured
Obligations, and (b) releases, acquits, remises and forever discharges the Agent
and each Lender and its affiliates and all of their past, present and future
officers, directors, employees, agents, attorneys, representatives, successors
and assigns from any and all claims, demands, actions and causes of action
(other than those based on fraud or criminal misconduct), whether at law or in
equity, whether now accrued or hereafter maturing, and whether known or unknown,
which Borrower now or hereafter may have by reason of any manner, cause or
things, in each case, to and including the date of this Agreement with respect
to matters arising out of the Loan Agreement, the other Loan Document or the
Secured Obligations.
18. Borrower acknowledges that (a) except as expressly set forth
herein, neither the Agent nor any Lender has agreed to (and has no obligation
whatsoever to discuss, negotiate or agree to) any other restructuring,
modification, amendment, waiver or forbearance with respect to the Secured
Obligations or the Loan Agreement, (b) no understanding with respect to any
other restructuring, modification, amendment, waiver or forbearance with respect
to the Secured Obligations or the Loan Agreement shall constitute a legally
binding agreement or contract, or have any force or effect whatsoever, unless
and until reduced to writing and signed by authorized representatives of each
party hereto, and (c) the execution and delivery of this Agreement has not
established any course of dealing between the parties hereto or created any
obligation or agreement of the Agent or any Lender with respect to any future
restructuring, modification, amendment, waiver or forbearance with respect to
the Secured Obligations or the Loan Agreement.
19. Borrower agrees to take such further actions as the Lenders shall
reasonably request in connection herewith to evidence the agreements herein
contained.
20. 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
counterparts, taken together, shall constitute but one and the same instrument.
21. This Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns, and legal representatives and heirs, of
the parties hereto.
Page 28
29
22. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Georgia.
Page 29
30
IN WITNESS WHEREOF, Borrower, the Agent and the Lenders have caused
this Agreement to be duly executed, all as of the date first above written.
BORROWER:
ITHACA INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior VP/CFO
LENDERS:
FOOTHILL CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior VP
AGENT:
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Xxxxxxx X. Xxxxx, V.P.
Page 30
