Exhibit 10.1
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
NationsBank, N.A., as agent for the Lenders (the "Agent").
W I T N E S S E T H :
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WHEREAS, Borrower, the Lenders, the Agent, NationsBanc Xxxxxxxxxx
Securities LLC, as Syndication Agent and Arranger, and BankAmerica Business
Credit, Inc., as Documentation 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 Agent and the Lenders to waive certain
Events of Default under the Loan Agreement; and
WHEREAS, the Agent and the Lenders are willing to grant such waiver,
subject to the terms and conditions set forth herein, including the amendments
to the Loan Agreement 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 hereby 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 Agent and 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 Agent and 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.
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3. In order to induce the Agent and 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 Second Lienholder Loan Agreement (the "Second Lienholder Waiver"),
and upon the effective date of this Agreement, the Second Lienholder Waiver
shall be in full force and effect and all conditions precedent to the
effectiveness thereof shall have been satisfied or waived;
(b) Borrower shall pay for the cost of the preparation by one or more
appraisers selected by the Agent of a new appraisal of each of Borrower's
owned parcels of Real Estate identified by the Agent for appraisal and a
desktop appraisal of Borrower's Equipment, and Borrower shall cooperate
with the Agent and each such appraiser in order to allow such appraisals to
be completed as promptly as practicable, including by providing access
during normal business hours by each such appraiser to Borrower's premises
and books and records; and
(c) on or before December 31, 1999, Borrower shall deliver to the
Agent and each Lender 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. The Loan Agreement is amended by deleting the definition of
"Applicable Margin" set forth in Section 1.1 and replacing it with the
following:
"Applicable Margin" means (a) as to Prime Rate Revolving Credit Loans,
1.0%, (b) as to Prime Rate Term Loans, 1.25%, (c) as to Eurodollar Rate
Revolving Credit Loans, 3.0%, and (d) as to Eurodollar Rate Term Loans,
3.25%; provided, however, no Loans shall be made as, converted into, or
continued as Eurodollar Rate Loans after December 10, 1999.
5. The Loan Agreement is amended by deleting Section 5.2(d)(i) and
replacing it with the following:
(i) The Borrower agrees to pay to the Agent, for the ratable benefit
of the Lenders, Letter of Credit fees equal to (A) 0.75% per annum, based
on the average daily aggregate Letter of Credit Amount of all documentary
Letters of Credit from time to time outstanding during the term of this
Agreement, and (B) 3.0% per annum, based on the average daily aggregate
Letter of Credit Amount of all standby Letters of Credit from time to time
outstanding during the term of this Agreement. Such fees shall be payable
to the Agent for the ratable benefit of the
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Lenders in accordance with their respective Commitment Percentages monthly
in arrears and shall be calculated based on a year of 360 days and the
actual number of days elapsed.
6. The Loan Agreement is amended by adding the following new Section
5.18:
SECTION 5.18. Termination of Eurodollar Rate Option. The parties
hereto agree that, notwithstanding anything to the contrary set forth in this
Agreement or any other Loan Document, no Loans shall be made as, converted into,
or continued as Eurodollar Rate Loans after December 10, 1999.
7. The Loan Agreement is amended by deleting the performance pricing
matrix attached thereto as Annex I.
8. The Loan Agreement is amended by deleting Section 9.12 and
replacing it with the following:
SECTION 9.12. Information and Reports.
(a) Schedule of Receivables. The Borrower shall deliver to the Agent
on or before the Effective Date and not later than the third Business Day
of each fiscal week thereafter a Schedule of Receivables which (i) shall be
as of the last Business Day of the immediately preceding fiscal week, (ii)
shall be reconciled to the Borrowing Base Certificate as of such last
Business Day, and (iii) shall set forth a detailed aged trial balance of
all its then existing Receivables, specifying the names and balance due for
each Account Debtor obligated on a Receivable so listed.
(b) Schedule of Inventory. The Borrower shall deliver to the Agent on
or before the Effective Date and not later than the 15th Business Day of
each fiscal month thereafter (other than the fiscal month that ends the
fiscal year) a Schedule of Inventory as of the last Business Day of the
immediately preceding fiscal month of the Borrower, itemizing and
describing the kind, type and quantity of Inventory, the Borrower's cost
thereof and the location thereof. For the last fiscal month of Borrower's
fiscal year, Borrower shall deliver the Schedule of Inventory not later
than 45 days after such fiscal year end.
(c) Schedule of Foreign Letter of Credit Amount. The Borrower shall
deliver to the Agent not later than the third Business Day of each fiscal
week a schedule setting forth the letter of credit number and undrawn
amount of each Letter of Credit (and, if the issuer thereof is not Bank of
America, the name of the Issuing Bank) included in the calculation of the
Foreign Letter of Credit Amount in the corresponding Borrowing Base
Certificate; provided that no schedule need be delivered if there has been
no change since the previous schedule delivered.
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(d) Schedule of Equipment. The Borrower shall deliver to the Agent on
or before the Effective Date and thereafter on such subsequent dates upon
reasonable notice as may be requested by the Agent, a Schedule of
Equipment, describing each item of the Borrower's Equipment and the
location, cost and then current book value thereof.
(e) Borrowing Base Certificate. The Borrower shall deliver to the
Agent (i) on or before the third Business Day of each fiscal week after the
Effective Date a Borrowing Base Certificate prepared as of the close of
business on the last Business Day of the immediately preceding fiscal week,
and (ii) together with each Schedule of Inventory, a Borrowing Base
Certificate updated to include the information contained in such Schedule
of Inventory. Each Borrowing Base Certificate shall be executed by a
Financial Officer, provided the Borrowing Base Certificate accompanying
each Schedule of Inventory shall be executed by the Borrower's chief
financial officer.
(f) Additional Information. The Agent may in its discretion from time
to time request that the Borrower deliver the schedules or certificates
described in Sections 9.12(a), (b), (c), (d) and (e) more or less often and
on different schedules than specified in such Sections and the Borrower
will use reasonable efforts to comply with such requests. The Borrower will
also furnish to the Agent and each Lender such other information with
respect to the Collateral as the Agent or the Required Lenders may from
time to time reasonably request.
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 paragraphs 3(b) and (c) of this Agreement,
(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, and (c) in connection with
the establishment of such financial covenants, the Lenders may in good faith
require adjustments to the interest rate applicable to the Loans. Therefore, the
parties hereto agree (i) to negotiate in good faith to establish such financial
covenants (and adjustments to the applicable interest rate) 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 and applicable interest rate prior to such fiscal year end,
on terms acceptable to all of the parties hereto, at the election of the
Required Lenders the Commitments shall automatically terminate, and all of the
Secured Obligations under the Loan Agreement shall be due and payable, as of
such fiscal year end.
10. The effectiveness of this Agreement and the waiver and amendments
set forth herein shall be conditioned upon the receipt by the Agent of the
following certificates, agreements and opinions, all of which shall be in form
and substance reasonably satisfactory to the Agent and the Lenders:
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(a) a certificate of the Secretary of Borrower as to such corporate and
other matters as the Agent may reasonably request;
(b) if requested by the Agent, an opinion of Borrower's counsel as to
such matters as the Agent may reasonably request; and
(c) a certified copy of the duly executed and delivered Second
Lienholder Waiver, including a certification of the Financial Officer that
such Second Lienholder 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 $50,000, such fee to be shared among the Lenders on a
Ratable basis.
13. To induce the Agent and 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 Second
Lienholder 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.
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.
16. In addition to any other fees described herein, Borrower agrees to
pay on demand all reasonable costs and expenses of the Agent 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.
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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 Documents 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 action as the Agent 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.
22. This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Georgia.
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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
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Name: Xxxxxxx X. Xxxxxx
Title: Senior VP/CFO
LENDERS:
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, VP
BANKAMERICA BUSINESS CREDIT, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, VP
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XXXXXXXX XXXX XX XXXXXX
By: /s/ Xxxx X. Council
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Name: Xxxx X. Council
Title: Vice President
THE CIT GROUP/COMMERCIAL SERVICES, INC.
By: /s/ M. Xxx Xxxxxxxxx
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Name: M. Xxx Xxxxxxxxx
Title: Vice President
FLEET BUSINESS CREDIT CORPORATION, as
successor to Sanwa Business Credit
Corporation
By: /s/ Xxxx Xxxxxxxxx
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Name: Xxxx Xxxxxxxxx
Title: Vice President
AGENT:
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx, VP
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