Exhibit 10.1
AMENDMENT AGREEMENT NO. 4 AND WAIVER
AMENDMENT AGREEMENT NO. 4 AND WAIVER, dated as of June 19,
2001 (this "Agreement"), to the Amended and Restated Credit Agreement dated as
of July 9, 1999 (as amended, restated or modified from time to time, the "Credit
Agreement"), among XXXXXX A.S.L., LTD., a Delaware corporation (the "Borrower"),
the Guarantors named therein, the financial institutions from time to time party
thereto (collectively, the "Lenders"), THE CHASE MANHATTAN BANK, as
administrative and collateral agent for the Lenders (in such capacity, the
"Agent"), and THE CIT GROUP/COMMERCIAL SERVICES, INC., as collateral monitor (in
such capacity, the "Collateral Monitor"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to them in the Credit
Agreement.
WHEREAS, the Borrower has requested that the Lenders agree (i)
to waive certain Events of Defaults that have occurred and are continuing under
the Credit Agreement and (ii) to amend certain terms and provisions of the
Credit Agreement;
WHEREAS, the Lenders have agreed to waive certain Events of
Defaults that have occurred and are continuing under the Credit Agreement and
the Lenders, the Borrower and the Guarantors have agreed to amend the Credit
Agreement, in each case as described herein;
NOW, THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and subject to the fulfillment of
the conditions set forth below, the parties hereto agree as follows:
SECTION 1. WAIVERS OF EVENTS OF DEFAULT
Upon the fulfillment of the conditions set forth in Section 4
below, the following provisions of the Credit Agreement are hereby waived as
follows:
1.1 The Lenders hereby agree to waive any Event of Default
which has occurred and is continuing as a result of the Borrower's failure to
comply with the provisions of Section 7.08 for the period ended on or about
March 31, 2001.
1.2 The Lenders hereby agree to waive any Event of Default
which has occurred and is continuing as a result of the Borrower's failure to
comply with the provisions of Section 7.09 for the period ended on or about
March 31, 2001.
1.3 The Lenders hereby agree to waive any Event of Default
which has occurred and is continuing as a result of the Borrower's failure to
comply with the provisions of Section 7.10 for the periods ended on or about
February 28, 2001, March 31, 2001, April 30, 2001 and May 31, 2001.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT
Upon the fulfillment of the conditions set forth in Section 4
below, the Credit Agreement is hereby amended as follows:
2.1 The definitions set forth in Article I of the Credit
Agreement are hereby amended by inserting the following new definition in
appropriate alphabetical order:
"Amendment Agreement No. 3" shall mean that certain
Amendment Agreement No. 3 and Waiver, dated as of November 13,
2000, to the Credit Agreement.
2.2 The definition of the term "Obligations" set forth in
Section 1.01 of the Credit Agreement is hereby amended by inserting the
parenthetical phrase "(or any of their Affiliates)" immediately following the
words "Indebtedness of the Borrower to the Lenders" each time the same appears
therein and immediately following the words "so long as any Lender" appearing in
the first parenthesis thereof.
2.3 The definition of the term "Trademark Advance" set forth
in Section 1.01 of the Credit Agreement is hereby amended by inserting the words
"fiscal monthly" immediately preceding the words "period as set forth on Exhibit
A annexed hereto" appearing in clause (ii)(y) of such definition.
2.4 Section 2.17 of the Credit Agreement is hereby amended (i)
by deleting the amount "$10,000,000" appearing in the first sentence thereof and
inserting in lieu thereof the amount "$15,000,000" and (ii) by inserting the
following proviso at the end of the first sentence thereof:
"and provided, further, that no standby Letter of Credit shall
be issued for the purchase of inventory other than standby
Letters of Credit in the aggregate undrawn face amount not in
excess of $500,000 and which are issued for the benefit of
Nissho Iwai Textile (USA) Inc., DFK Trading Corp. Ltd. and
Union Industries Inc."
2.5 Section 7.01 of the Credit Agreement is hereby amended by
inserting the word "; or" at the end of subsection (n) thereof and by inserting
the following new subsection (o) immediately thereafter:
"(o) Liens, in an amount not to exceed $1,700,000 in the
aggregate, on unearned insurance premiums that are financed by
one or more finance companies."
2.6 Section 7.03(xii) of the Credit Agreement is hereby
amended in its entirety to read as follows:
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"and (xii) other Indebtedness of the Borrower and its
subsidiaries provided that the aggregate amount of
Indebtedness permitted pursuant to this clause (xii) shall not
exceed $3,500,000 in the aggregate during the period from and
after June 1, 2001 through February 10, 2002, and at any time
thereafter, $2,500,000."
2.7 Subject to the proviso set forth at the end of this
Section 2.7, Sections 7.08, 7.09 and 7.10 of the Credit Agreement are hereby
amended in their entireties to read as follows (it being understood that if any
of the Senior Notes are converted to equity, the covenant levels set forth in
such Sections shall be recalculated and reset at levels mutually agreed upon
between the Borrower and the Required Lenders):
"SECTION 7.08 Capitalization Ratio. Permit the
Capitalization Ratio of the Borrower and its subsidiaries on a
Consolidated basis for the four consecutive fiscal quarter
periods ending on or about the dates set forth below to be
greater than the respective amounts set forth below opposite
such dates:
Fiscal Quarter ending Ratio
--------------------- -----
on or about
-----------
June 30, 2001 70%
September 30, 2001 72%
December 31, 2001 70%
March 31, 2002 66%
June 30, 2002 64%
September 30, 2002 65%
December 31, 2002 61%
March 31, 2003 63%
June 30, 2003 63%
September 30, 2003 63%
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SECTION 7.09 Interest Coverage Ratio. Permit the
Interest Coverage Ratio of the Borrower and its subsidiaries
on a Consolidated basis for the four consecutive fiscal
quarter periods ending on or about the dates set forth below
to be less than the respective amounts set forth below
opposite such dates:
Fiscal Quarter ending Ratio
--------------------- -----
on or about
-----------
June 30, 2001 .27:1.00
September 30, 2001 .37:1.00
December 31, 2001 .77:1.00
March 31, 2002 1.40:1.00
June 30, 2002 1.50:1.00
September 30, 2002 1.65:1.00
December 31, 2002 1.80:1.00
March 31, 2003 1.95:1.00
June 30, 2003 2.05:1.00
September 30, 2003 2.25:1.00
SECTION 7.10 Net Worth. Permit the Net Worth of the
Borrower and its subsidiaries on a Consolidated basis at any
time to be less than the respective amounts set forth below
for the fiscal periods indicated:
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Fiscal Month ending Amount
------------------- ------
on or about
-----------
May 31, 2001 $80,000,000
June 30, 2001 $78,000,000
July 31, 2001 $78,000,000
August 31, 2001 $79,000,000
September 30, 2001 $78,000,000
October 31, 2001 $78,000,000
November 30, 2001 $76,500,000
December 31, 2001 $74,500,000
Fiscal Quarter ending
---------------------
on or about
-----------
March 31, 2002 $ 97,000,000
June 30, 2002 $ 98,000,000
September 30, 2002 $ 99,000,000
December 31, 2002 $103,000,000
March 31, 2003 $104,000,000
June 30, 2003 $108,000,000
September 30, 2003 $109,000,000
December 31, 2003 $115,000,000"
; provided that in the event the Borrower shall make any payment on account of
the principal of, interest on, or any redemption or sinking fund payment in
respect of, any of the Senior Notes, the amendments provided for in this Section
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2.7 as well as the amendments provided for in Section 2.8 of Amendment Agreement
No. 3 shall be automatically rescinded in their entirety and the applicable
covenant amounts for any period shall again be the covenant amounts set forth in
Sections 7.08, 7.09 and 7.10 as applicable as of the date immediately preceding
the date on which Amendment Agreement No. 3 became effective.
2.8 Section 7.20 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"SECTION 7.20. Revolving Credit Loans. Permit the
aggregate outstanding principal amount of Revolving Credit
Loans (excluding Letter of Credit Usage) on the last Business
Day of any of the fiscal months set forth below to exceed the
lesser of (A) the amount permitted by Section 2.01(a) hereof
and (B) the amount (or such other amount as may be consented
to by the Required Lenders) set forth opposite such fiscal
month:
Fiscal Month Maximum Amount
------------ --------------
June 2001 $80,900,000
July 2001 $89,904,000
August 2001 $107,114,000
September 2001 $104,096,000
October 2001 $79,600,000
November 2001 $88,867,000
December 2001 $76,051,000
January 2002 $91,000,000
February 2002 $102,500,000
March 2002 and thereafter through the
Revolving Credit Termination Date $92,000,000
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2.9 Subject to the proviso set forth at the end of this
Section 2.9, Exhibit A to the Credit Agreement is hereby amended by deleting the
entries for the fiscal monthly periods commencing with "May `01" and ending with
"August `01" appearing therein and inserting in lieu thereof the following:
"May `01 Jun `01 Jul `01
$42,000 $42,000 $42,000
Aug `01
$42,000"
; provided that in the event the Borrower shall make any payment on account of
the principal of, interest on or any redemption or sinking fund payment in
respect of, any of the Senior Notes, the amendments provided for in this Section
2.9 as well as the amendments provided for in Section 2.10 of Amendment
Agreement No. 3 shall be automatically rescinded in their entirety and the
applicable amount of the Trademark Advance for any period shall again be the
amount set forth on Exhibit A to the Credit Agreement as of the date immediately
preceding the date on which Amendment Agreement No. 3 became effective.
Notwithstanding anything to the contrary set forth in this Section 2.9 or in
Exhibit A to the Credit Agreement as amended hereby, from the fifth calendar day
through the twenty-fifth calendar day of each fiscal month commencing with June,
2001 and ending with the fiscal month of September 2001, the amount of the
Trademark Advance may be up to $3,000,000 in excess of the amount thereof for
such fiscal month set forth on Exhibit A, but at no time in excess of
$45,000,000.
SECTION 3. CONFIRMATION OF LOAN DOCUMENTS
3.1 Each Loan Party, by its execution and delivery of this
Agreement, irrevocably and unconditionally ratifies and confirms in favor of the
Agent and the Lenders that (i) it consents to the terms and conditions of the
Credit Agreement as it has been amended by this Agreement and that
notwithstanding this Agreement, each Loan Document to which such Loan Party is a
party shall continue in full force and effect in accordance with its terms, as
it has been amended by this Agreement, and is and shall continue to be
applicable to all of the Obligations and (ii) it is truly and justly indebted to
the Agent, the Collateral Monitor and the Lenders, for all of the Obligations
without defense, offset or counterclaim of any kind whatsoever and hereby
releases the Agent, the Collateral Monitor and each of the Lenders from any and
all claims, obligations, acts, omissions, damages or causes of action arising
out of, related or in any way connected with any action or failure to act, prior
to the execution of this Agreement , in connection with the events or
circumstances arising under or otherwise related to the Credit Agreement or any
other Loan Document.
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SECTION 4. CONDITIONS PRECEDENT
This Agreement shall become effective upon the execution and delivery
to the Agent of counterparts hereof by the Borrower, each Guarantor and Lenders
constituting the Required Lenders and the fulfillment of the following
conditions:
4.1 The Agent shall have received a non-refundable amendment
fee in the amount of $675,000 for the ratable benefit of the Lenders who have
executed and delivered to the Agent a counterpart to this Agreement by not later
than 5:00 p.m. (New York City time) on June 25, 2001.
4.2 Xxxxxx, Xxxxx & Xxxxxxx LLP counsel to the Agent, shall
have received payment in full for all legal fees charged, and all costs and
expenses incurred and invoiced, by such counsel through the date hereof and all
legal fees charged, and all costs and expenses incurred, by such counsel in
connection with the transactions contemplated under the Credit Agreement, this
Agreement and the other Loan Documents and instruments in connection herewith
and therewith and the Agent shall have received payment in full of any other
fees and expenses of the Agent, the Collateral Monitor, or any other
professional retained by the Agent which the Borrower is obligated to pay
pursuant to the Credit Agreement and the other Loan Documents.
4.3 All legal matters in connection with this Agreement shall
be satisfactory to the Agent and its counsel in their sole discretion.
4.4 The Agent shall have received a certificate signed by a
Financial Officer of the Borrower and each Guarantor stating that after giving
effect to this Agreement (i) all representations and warranties contained in
this Agreement and the Credit Agreement shall be true and correct in all
material respects with the same effect as though made on and as of the date on
which the conditions set forth in this Section 4 are fulfilled (except insofar
as such representations and warranties relate expressly to an earlier date) and
(ii) there exists no Event of Default.
4.5 The Agent shall have received such other documents as the
Agent or Agent's counsel shall reasonably deem necessary.
SECTION 5. MISCELLANEOUS
5.1 Each of the Borrower and the Guarantors reaffirms and
restates the representations and warranties set forth in Article IV of the
Credit Agreement, and represents that after giving effect to this Agreement all
such representations and warranties shall be true and correct in all material
respects with the same effect as though made on and as of the date on which the
conditions set forth in Section 4 are fulfilled (except insofar as such
representations and warranties relate expressly to an earlier date). Each Loan
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Party represents and warrants (which representations and warranties shall
survive the execution and delivery hereof) to the Lenders that:
(a) It has the corporate power and authority to execute,
deliver and carry out the terms and provisions of this Agreement hereby
and has taken or caused to be taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement;
(b) No consent of any other person (including, without
limitation, shareholders or creditors of any Loan Party), and no action
of, or filing with any governmental or public body or authority is
required to authorize, or is otherwise required in connection with the
execution, delivery and performance of this Agreement;
(c) This Agreement has been duly executed and delivered on
behalf of each Loan Party by a duly authorized officer, and constitutes
a legal, valid and binding obligation of each Loan Party enforceable in
accordance with its terms, subject to bankruptcy, reorganization,
insolvency, moratorium and other similar laws affecting the enforcement
of creditors' rights generally and the exercise of judicial discretion
in accordance with general principles of equity; and
(d) The execution, delivery and performance of this Agreement
will not violate any law, statute or regulation, or any order or decree
of any court or governmental instrumentality, or conflict with, or
result in the breach of, or constitute a default under any contractual
obligation of any Loan Party.
5.2 Except, as herein expressly amended, the Credit Agreement
is ratified and confirmed in all respects and shall remain in full force and
effect in accordance with its terms.
5.3 All references to the Credit Agreement in the Credit
Agreement and the other Loan Documents and the other documents and instruments
delivered pursuant to or in connection therewith shall mean the Credit Agreement
as amended hereby and as may in the future be amended, restated, supplemented or
modified from time to time.
5.4 This Agreement may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which shall
be an original and all of which shall constitute one and the same agreement.
5.5 Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
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5.6 THIS AGREEMENT, IN ACCORDANCE WITH SECTION 5-1401 OF THE
GENERAL OBLIGATION LAW OF THE STATE OF NEW YORK, SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ANY CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION
OF THE LAWS OF ANY OTHER JURISDICTION.
5.7 The parties hereto shall, at any time and from time to
time following the execution of this Agreement, execute and deliver all such
further instruments and take all such further actions as may be reasonably
necessary or appropriate in order to carry out the provisions of this Agreement.
[Remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the Borrower, Guarantors, the Agent, the
Collateral Monitor and the Lenders have caused this Amendment Agreement No. 4
and Waiver to be duly executed by their respective authorized officers as of the
day and year first above written.
XXXXXX A.S.L., LTD., as Borrower
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
A.S.L. RETAIL OUTLETS, INC., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
ASL/K LICENSING CORP., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
XXXXXX A.S.L. EUROPE, LTD., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
XXXXXX HOLDINGS INC., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
AKC ACQUISITION, LTD., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
LION LICENSING, LTD., as a Guarantor
By: /s/ Xxxxxx X. Xxxxxxxxx
------------------------
Name: Xxxxxx X. Xxxxxxxxx
Title: Director
ASIA EXPERT LIMITED, as a Guarantor
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
TOMWELL LIMITED, as a Guarantor
By: /s/ Xxxxxx X. Xxxxxx
---------------------
Name: Xxxxxx X. Xxxxxx
Title: Director
THE CHASE MANHATTAN BANK, as Lender
By: /s/ Xxxxx X. Xxxx
---------------------
Name: Xxxxx X. Xxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as Agent
By: /s/ Xxxxx X. Xxxx
------------------------
Name: Xxxxx X. Xxxx
Title: Vice President
THE CIT GROUP/COMMERCIAL
SERVICES, INC., as Lender
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
THE CIT GROUP/COMMERCIAL
SERVICES, INC., as Collateral Monitor
By: /s/ Xxxxx X. Xxxxxxxx
---------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
LASALLE BANK, NATIONAL ASSOCIATION, as
Lender
By: /s/ Xxxxxxx X. Kiss
---------------------
Name: Xxxxxxx X. Kiss
Title: Senior Vice President
FLEET CAPITAL CORPORATION, as Lender
By: /s/ Xxxxx X. Xxxxx
---------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
FINOVA CAPITAL CORPORATION, as Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President Senior Credit Officer
ISRAEL DISCOUNT BANK OF NEW
YORK, as Lender
By: /s/ Xxx XxXxxxx
---------------------
Name: Xxx XxXxxxx
Title: Assistant Manager
By: /s/ Xxxxxx Xxxxxxxx
---------------------
Name: Xxxxxx Xxxxxxxx
Title: Senior Vice President
PNC BANK, NATIONAL ASSOCIATION,
as Lender
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
DEBIS FINANCIAL SERVICES, INC., as Lender
By: /s/ G. Xxxxxxxxx Xxxx
----------------------
Name: G. Xxxxxxxxx Xxxx
Title: Managing Director -
Credit ABL Division
BANK LEUMI USA, as Lender
By: /s/ Xxxxxx Xxxxxx
---------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
