10.33. Third Amendment and Consent to the Amended and Restated Revolving
Credit Agreement by and between Guess ?, Inc. And BankBoston, N.A.,
F/K/A The First National Bank of Boston, Sanwa Bank California and the
Financial Institutions Party Hereto.
-------------------------------------------------------------------------------
THIRD AMENDMENT AND CONSENT
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
BY AND BETWEEN
GUESS ?, INC.
AND
BANKBOSTON, N.A.
F/K/A THE FIRST NATIONAL BANK OF BOSTON,
SANWA BANK CALIFORNIA
AND
THE FINANCIAL INSTITUTIONS PARTY HERETO
Dated as of March 29, 1998
1
THIRD AMENDMENT AND CONSENT
TO
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This Third Amendment and Consent to Amended and Restated Revolving
Credit Agreement (this "Agreement") is entered into as of March 29, 1998, by
and between GUESS ?, INC., a Delaware corporation having its chief executive
office at 0000 X. Xxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, 00000 (the
"Company") and BankBoston, N.A. formerly THE FIRST NATIONAL BANK OF BOSTON, a
bank with its head offices at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx,
00000 (the "Agent"), SANWA BANK CALIFORNIA, a bank with its head offices at
000 Xxxxx Xxxxxxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (the "Co-Agent"),
and THE FINANCIAL INSTITUTIONS PARTIES HERETO (the "Lenders").
RECITALS
I. The parties hereto have previously entered into that certain Amended
and Restated Revolving Credit Agreement, dated as of March 28, 1997 as amended
by the First Amendment and Waiver to the Amended and Restated Revolving Credit
Agreement dated as of April 30, 1997 and the Second Amendment and Consent to
the Amended and Restated Revolving Credit Agreement dated as of January 30,
1998 (collectively the "Credit Agreement");
A. As a condition of the Waiver Agreement dated as of March 6, 1998
(the "Waiver Agreement"), the Company agreed to enter into this Third
Amendment to the Amended and Restated Revolving Credit Agreement (the "Third
Amendment") ;
A. By this Third Amendment, The Industrial Bank of Japan, Limited, Los
Angeles Agency is removed as a Lender and the Lenders and the Lender's
Percentage has been revised as provided on revised Schedule J to the Third
Amendment; and
A. The Company, the Agent and the Lenders have agreed to modify the
Credit Agreement as provided below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained in this Amendment and Waiver and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree to the above Recitals and as follows:
1. Definitions. All defined terms used herein without definition
shall have the meanings assigned to them in the Credit Agreement.
1. Amendments to the Credit Agreement. From and after the date
hereof the Credit Agreement is hereby amended as follows:
a. The Credit Agreement is amended by the deletion of the
definition of the Eurodollar Spread and the addition of the following
definition of "Applicable Margin" to read as follows:
Applicable Margin. Shall equal the following percentage
margins as to each of the interest rates or percentages as
to Letters of Credit for each and every quarter in which
the Company falls within the following range of ratios for
the fiscal quarter then most recently ended, as certified by
the chief
2
financial officer of the Company to the Agent pursuant to Section
5.1(c), of both Indebtedness for Money Borrowed less the Fair
Market Value (as hereinafter defined) of the Senior Subordinated
Notes held by the Company or any of its Wholly Owned Subsidiaries
(to the extent such Senior Subordinated Notes are included in the
calculation of Indebtedness for Money Borrowed; but only so long as
the Fair Market Value of such Senior Subordinated Notes so held is
not less than 80% of the principal amount of such Senior
Subordinated Notes), as of the fiscal quarter then ended to
Consolidated Cash Flow ("Leverage") for the prior four fiscal
quarters and Consolidated EBITDA less Capital Expenditures to
Consolidated Total Interest Expense ("Coverage") for the prior four
fiscal quarters:
Level Leverage Coverage Adjusted Base Standby Documentary
Eurodolla Rate + Letters of Letter of
r Rate + Credit Fee per Credit Fee
Annum
-----------------------------------------------------------------------------------------------------------
1 greater greater 1.75% -0- 1.75% .875%
than than or
4.00 to equal to
1 2.75 to 1
-----------------------------------------------------------------------------------------------------------
2 greater greater 1.50% -0- 1.50% .750%
than than or
3.00 to equal to
1, but 3.00 to 1
less
than or
equal to
4.00 to
1
-----------------------------------------------------------------------------------------------------------
3 greater greater 1.25% (.50%) 1.25% .625%
than than or
2.25 to equal to
1, but 3.50 to 1
less
than or
equal to
3.00 to
1
-----------------------------------------------------------------------------------------------------------
4 greater greater 1.00% (.50%) 1.00% .50%
than than or
1.75 to equal to
1, but 4.00 to 1
less
than or
equal to
2.25 to
1
-----------------------------------------------------------------------------------------------------------
5 less greater .75% (.50%) .75% .50%
than or than or
equal to equal to
1.75 to 4.50 to 1
1
3
provided, that (i) for the fiscal year ending December 31, 1998, regardless
of the actual Leverage and Coverage, the Applicable Margin shall not be
reduced below Xxxxx 0, xxx xxxxx xxxxx, (xx) any change in pricing shall be
effective on and after receipt by the Agent of the financial statement
showing such ratio, (iii) if financial statements are not received as
provided in Section 5.1, the Applicable Margin shall be at Level 1 until such
compliance statement is received. The term "Fair Market Value" as used
herein with respect to the Senior Subordinated Notes shall mean the price for
such notes quoted by PaineWebber, Inc. on the date of such calculation of the
Applicable Margin.
a. The Credit Agreement is amended by deleting the definition of
"Commitment Amount" and substituting the following definition to read as
follows:
Commitment Amount . $86,875,000 or any lesser amount, including
zero, resulting from a termination or reduction of such amount in
accordance with Section 2.5 or Section 7.2 .
a. The Credit Agreement is amended by deleting the definition "Letter
of Credit Sublimit" and substituting the following definition to read as
follows:
Letter of Credit Sublimit. The sum of the outstanding amount of all
Letters of Credit, which shall not exceed $25,000,000 at any time.
a. Section 2.1(a) of the Credit Agreement is deleted in its entirety and
amended to read as follows:
(a) Subject to the terms and conditions hereof, the
Lenders will make Revolving Loans to the Company, from time to time
until the close of business on the Revolving Credit Termination
Date, in such sums as the Company may request, provided that the
aggregate principal amount of all Loans plus the outstanding amount
of all Letters of Credit at any one time outstanding hereunder
shall not exceed the Commitment Amount; that the aggregate
Revolving Loans may not exceed $20,000,000 for a period of 30
consecutive days during each 12 month period commencing April 1,
1998 . The Company may borrow, prepay pursuant to Section 2.12 and
reborrow, from the date of this Agreement until the Revolving
Credit Termination Date, the full amount of the Commitment Amount,
(other than a 30 day period in each 12 months as provided in the
prior sentence) or any lesser sum that is at least $100,000 and an
integral multiple of $100,000. Any Revolving Loan not repaid by
the Revolving Credit Termination Date shall be due and payable on
the Revolving Credit Termination Date.
a. Section 2.1(c) of the Credit Agreement is deleted in its entirety and
amended to read as follows:
(c) The proceeds of the Revolving Loans shall be used by the
Company exclusively for working capital purposes, except that, up
to $75,000,000 (reduced as provided in Section 5.13) of the
Commitment Amount may be used, in the aggregate, to repurchase some
or all of the Senior Subordinated Notes and fund the Stock
Repurchase Program, provided that the Company shall demonstrate
that it will comply with provisions of Sections 5.13
4
and 6.8 (xiv) of this Agreement and the Company may not repurchase
any additional Senior Subordinated Notes or fund the Stock
Repurchase Program prior to October 1, 1998 and shall only make
such purchases or do such funding thereafter with the consent of
the Majority Lenders.
a. Section 2.4 of the Credit Agreement is deleted in its entirety and
amended to read as follows:
2.4 Commitment Fee. The Company shall pay to the Agent for the
benefit of the Lenders during the Revolving Credit Period a
commitment fee (the "Commitment Fee") computed at the rate of 0.25%
per annum on the average daily amount of the unborrowed portion of
the Commitment Amount less the average daily amount of the
outstanding amount of all Letters of Credit during each quarter or
portion thereof. Commitment fees shall be payable quarterly in
arrears, on the last Business Day of each of March, June, September
and December of each year and on the last day of the Revolving
Credit Period.
a. Sections 2.8 (a) and 2.8 (b) of the Credit Agreement are deleted in
their entirety and amended to read as follows:
(a) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof at a rate per annum equal to the Base Rate
plus the Applicable Margin, which rate shall change
contemporaneously with any change in the Base Rate. Such interest
shall be payable on the last day of each month, and when such Loan
is due (whether at maturity, by reason of acceleration or
otherwise).
(b) Each Eurodollar Loan shall bear interest on the outstanding
principal amount thereof, for each Interest Period applicable
thereto, at a rate per annum equal to the Adjusted Eurodollar Rate
plus the Applicable Margin. Such interest shall be payable for such
Interest Period on the last day thereof and when such Eurodollar
Loan is due (whether at maturity, by reason of acceleration or
otherwise) and, if such Interest Period is longer than three
months, at intervals of three months after the first day thereof.
a. Section 2.16 and 2.17 of the Credit Agreement are deleted in their
entirety and amended to read as follows:
2.16 Letters of Credit.
(a) General. Subject to the terms and conditions set forth
herein in addition to the Loans provided for in Section 2.1, as
long as any Event of Default or Default has not occurred and is not
continuing, the Company may request the issuance of Letters of
Credit for its own account by the Agent, in a form reasonably
acceptable to the Agent, at any time and from time to time during
the Revolving Credit Period. Letters of Credit issued hereunder
shall constitute utilization of the Commitment. In the event of
any inconsistency between the terms and conditions of this
Agreement and the terms and conditions of any form of letter of
credit application or other agreement submitted by the Company to,
or entered into by the Company with, the Agent relating to any
Letter of Credit, the terms and conditions of this Agreement shall
control.
5
(b) Notice of Issuance, Amendment, Renewal, Extension;
Certain Conditions. To request the issuance of a Letter of Credit
(or the amendment, renewal or extension of an outstanding Letter of
Credit), the Company shall hand deliver or telecopy (or transmit by
electronic communication, if arrangements for doing so have been
approved by the Agent) to the Agent (reasonably in advance of the
requested date of issuance, amendment, renewal or extension) a
notice requesting the issuance of a Letter of Credit, or
identifying the Letter of Credit to be amended, renewed or
extended, the date of issuance, amendment, renewal or extension,
the date on which such Letter of Credit is to expire (which shall
comply with paragraph (c) of this Section 2.16), the amount of such
Letter of Credit, the name and address of the beneficiary thereof,
and such other information as shall be necessary to prepare, amend,
renew or extend such Letter of Credit. As required by the Agent,
the Company also shall submit a letter of credit application on the
Agent's standard form in connection with any request for a Letter
of Credit. A Letter of Credit shall be issued, amended, renewed or
extended only if (and upon issuance, amendment, renewal or
extension of each Letter of Credit the Company shall be deemed to
represent and warrant that), after giving effect to such issuance,
amendment, renewal or extension (i) the aggregate Letter of Credit
exposure of the Agent, including unpaid drawings under Letters of
Credit (determined for these purposes without giving effect to the
participations therein of the Lenders pursuant to paragraph (d) of
this Section 2.16) shall not exceed the Letter of Credit Sublimit,
and (ii) the total of all outstanding Loans and Letters of Credit
exposure of the Agent shall not exceed the total Commitment..
(c) Expiration Date. Each Letter of Credit shall expire
(without giving effect to any extension thereof by reason of an
interruption of business) at or prior to the close of business on
the earlier of (i) the date 365 days after the date of the issuance
of such Letter of Credit (or, in the case of any renewal or
extension thereof, 365 days after such renewal or extension)
PROVIDED that any such Letter of Credit may provide for automatic
extensions thereof to a date not later than 365 days beyond its
current expiration date, and (ii) the date that is fifteen Business
Days prior to the Revolving Credit Termination Date. No Letter of
Credit may be extended beyond the date that is fifteen Business
Days prior to the Revolving Credit Termination Date.
(d) Participations. By the issuance of a Letter of Credit
(or an amendment to a Letter of Credit increasing the amount
thereof) by the Agent, and without any further action on the part
of the Agent, the Agent hereby grants to each Lender, and each
Lender hereby acquires from the Agent, a participation in such
Letter of Credit equal to such Lender's Percentage of the aggregate
amount available to be drawn under such Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender
hereby absolutely and unconditionally agrees to pay to the Agent
such Lender's Percentage of each disbursement made by the Agent
under such Letter of Credit and not reimbursed by the Company on
the date due as provided in paragraph (e) of this Section 2.16, or
of any reimbursement payment required to be
6
refunded to the Company for any reason. Each Lender acknowledges
and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance
whatsoever, including any amendment, renewal or extension of any
Letter of Credit or the occurrence and continuance of a Default or
reduction or termination of the Commitment, and that each such
payment shall be made without any offset, abatement, withholding or
reduction whatsoever.
(e) Reimbursement. If the Agent shall make any
disbursement in respect of a Letter of Credit, the Company shall
reimburse the Agent in respect of such disbursement by paying to
the Agent an amount equal to such disbursement not later than 1:30
p.m., Boston, Massachusetts time, on (i) the Business Day that the
Company receives notice of such disbursement, if such notice is
received prior to 12:00 noon, Boston, Massachusetts time, or (ii)
the Business Day immediately following the day that the Company
receives such notice, if such notice is not received prior to such
time, PROVIDED that the Company may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.1
that such payment be financed with a Revolving Loan in an
equivalent amount and, to the extent so financed, the Company's
obligation to make such payment shall be discharged and replaced by
the resulting Revolving Credit Base Rate Borrowing.
(f) Failure to Pay. If the Company fails to make payment
when due under any Letter of Credit, the Agent shall notify each
Lender of the applicable disbursement under the Letter of Credit,
the payment then due from the Company in respect thereof and such
Lender's Percentage thereof. Promptly following receipt of such
notice, each Lender shall pay to the Agent its Percentage of the
payment then due from the Company, in the same manner as with
respect to Revolving Loans made by such Lender. Promptly following
receipt by the Administrative Agent of any payment from the
Company, the Agent shall distribute such payment, to the extent
that the Lenders have made payments pursuant to this paragraph to
reimburse the Agent, as their interests may appear. Any payment
made by a Lender pursuant to this paragraph to reimburse the Agent
for any disbursement under a Letter of Credit shall not constitute
a Revolving Loan and shall not relieve the Company of its
obligation to reimburse such disbursement.
a. (g) Obligations Absolute. The Company's obligation to
reimburse LC Disbursements as provided in paragraph (e) of this
Section 2.16 shall be absolute, unconditional and irrevocable, and
shall be performed strictly in accordance with the terms of this
Agreement under any and all circumstances whatsoever and
irrespective of (A) any lack of validity or enforceability of any
Letter of Credit, or any term or provision therein, (B) any draft
or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement
therein being untrue or inaccurate in any respect, (C) payment by
the Agent under a Letter of Credit against presentation of a draft
or other document that does not comply strictly with the terms of
such Letter of Credit and (D) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that
might, but for the
7
provisions of this Section 2.16, constitute a legal or equitable
discharge of the Company's obligations hereunder.
(h) Neither the Agent nor the Lenders shall have any
liability or responsibility by reason of or in connection with the
issuance or transfer of any Letter of Credit by the Agent or any
payment or failure to make any payment thereunder, or any error,
omission, interruption, loss or delay in transmission or delivery
of any draft, notice or other communication under or relating to
any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms
or any consequence arising from causes beyond the control of the
Agent; PROVIDED that the foregoing shall not be construed to excuse
the Agent from liability to the Company to the extent of any direct
damages (as opposed to consequential damages, claims in respect of
which are hereby waived by the Company to the extent permitted by
applicable law) suffered by the Company that are caused by the
Agent's gross negligence or willful misconduct when determining
whether drafts and other documents presented under a Letter of
Credit comply with the terms thereof.
(i) Interim Interest. All amounts drawn under Letters of
Credit are Obligations hereunder and if not paid when due by the
Company shall bear interest at the rate provided in Section 2.14
for overdue payments.
2.17 Letter of Credit Fees . The Company shall pay to the
Agent (in each case, a "Letter of Credit Fee") (a) for the accounts
of the Lenders in accordance with their respective Lender's
Percentage, a commission on the average daily face amount of each
outstanding Letter of Credit (i) with respect to each documentary
Letter of Credit, at the Applicable Margin per annum for
documentary letters of credit and (ii) with respect to each standby
Letter of Credit, at the Applicable Margin per annum for standby
letters of credit, payable in either such case quarterly in arrears
on the last Business Day of each quarter for the immediately
preceding quarter in which any Letters of Credit shall have been or
remain outstanding, and on the Revolving Credit Termination Date,
and (b) for the Agent's own account, such customary commissions,
issuance fees, transfer fees and other fees and charges in
connection with the issuance or administration of each Letter of
Credit as the Company and the Agent shall agree.
a. Section 5.8 of the Credit Agreement is deleted in its entirety and
amended to read as follows:
5.8 Leverage Ratio. The Company shall maintain at the end of each
fiscal quarter, as provided below, a ratio of Indebtedness for
Money Borrowed at the end of such fiscal quarter to Consolidated
Cash Flow less dividends permitted hereunder all calculated for the
four fiscal quarters then ended in amount no greater than the ratio
provided below as follows:
8
Fiscal Quarter Ending Ratio
------------------------------------------------------------------
March 31, 1998 less than or equal to 4.40 to 1
------------------------------------------------------------------
June 30, 1998 less than or equal to 4.20 to 1
------------------------------------------------------------------
September 30, 1998 less than or equal to 3.25 to 1
------------------------------------------------------------------
December 31, 1998 less than or equal to 2.75 to 1
------------------------------------------------------------------
March 31, 1999 and each less than or equal to 2.75
fiscal quarter to 1
thereafter
------------------------------------------------------------------
a. Section 5.9 of the Credit Agreement is deleted in its entirety and
amended to read as follows:
5.9 Total Interest Coverage. The Company shall maintain, at the
end of each fiscal quarter, as provided below, for the four fiscal
quarters then ended, a ratio of Consolidated EBITDA less Capital
Expenditures for the period to Consolidated Total Interest Expense
for the period as follows:
Fiscal Quarter Ending Ratio
---------------------------------------------------------------
March 31, 1998 greater than or equal to
2.35 to 1
---------------------------------------------------------------
June 30, 1998 greater than or equal to
2.40 to 1
---------------------------------------------------------------
September 30, 1998 greater than or equal to
2.75 to 1
---------------------------------------------------------------
December 31, 1998 and greater than or equal to
each quarter thereafter 3.00 to 1
---------------------------------------------------------------
a. Section 5.10 of the Credit Agreement is deleted in its entirety and
amended to read as follows:
5.10 Total Fixed Charge Coverage. The Company shall maintain, at
the end of each fiscal quarter, as provided below, for the four
fiscal quarters then ended, a ratio of Consolidated Cash Flow plus
payments on Operating Leases for the period to Consolidated Total
Debt Service plus payments on Operating Leases for the period as
follows:
Fiscal Quarter Ending Ratio
------------------------------------------------------------------
March 31, 1998 greater than or equal to
1.35 to 1
------------------------------------------------------------------
June 30, 1998 greater than or equal to
1.35 to 1
------------------------------------------------------------------
September 30, 1998 greater than or equal to
1.60 to 1
------------------------------------------------------------------
December 31, 1998 greater than or equal to
1.65 to 1
------------------------------------------------------------------
March 31, 1999 and each greater than or equal to
fiscal quarter 2.00 to 1
thereafter
------------------------------------------------------------------
a. Section 5.11 of the Credit Agreement, Profitability, is deleted in
its entirety and amended to read as follows:
9
5.11 Profitability . The Company shall have Consolidated Net Income at the
end of each fiscal quarter of a least $1.00.
a. Section 5.13 of the Credit Agreement, Use of Proceeds, is deleted in its
entirety and amended to read as follows:
5.13 Use of Proceeds. The Company will use the proceeds of the
Revolving Loans for the ongoing working capital needs of the Company
and the Guarantors. Notwithstanding the foregoing, the Company may
use up to $75,000,000 , in the aggregate of the Commitment Amount,
reduced by all purchases of Senior Subordinated Notes prior to the
date of this Agreement as set forth on Exhibit C and further reduced
by all purchases of Senior Subordinated Notes and common stock under
the Stock Repurchase Program made on and after the date hereof, to
repurchase a portion of the Senior Subordinated Notes or any of the
Company's common stock under the Stock Repurchase Program, provided,
(i) that the Company shall satisfy on a pro forma basis, all of the
covenants made herein for the next four (4) fiscal quarters from the
date thereof, (ii) that the Company's repurchase of the Senior
Subordinated Notes and common stock under the Stock Repurchase Program
in any fiscal quarter shall be limited to the amount of the Company's
positive net income based on the average of net income for the
preceding four fiscal quarters, as previously reported to the Agent
and using the current quarter as the fourth quarter for purposes of
the calculation and (iii) that such repurchase complies with the
provisions of Section 6.8 (xiv) hereof. Notwithstanding the forgoing,
the Company shall not repurchase any additional Senior Subordinated
Note or common stock under the Stock Repurchase Program prior to
October 1, 1998 and shall only make such repurchases after October 1,
1998 with the prior consent of the Majority Lenders.
a. Section 5.16 is added to the Credit Agreement to read as follows:
5.16 Capital Expenditures. The Company shall not make Capital
Expenditures (i) in the fiscal year ending December 31, 1998 which exceed
$20,000,000 and (ii) in the fiscal year ending December 31, 1999 which
exceed $30,000,000.
a. Section 6.1 (i) of the Credit Agreement is deleted in its entirety.
b. Exhibit F is amended in its entirety as provided in Exhibit F to this
Third Amendment.
c. Exhibit J is amended in its entirety as provided in Exhibit J to this
Third Amendment.
1. Consent and Waiver. Subject to the terms of this Agreement and the
Consent Agreement, the Lenders hereby reaffirm the waiver contained in the
Waiver Agreement.
1. Conditions to Third Amendment.
10
a. The agreements of the Agent and the Lenders as set forth in this Third
Amendment are subject to the fulfillment of the following conditions:
(1) Receipt by Agent of a copy of this Third Amendment and Consent Agreement
executed by the Company, Retail, Licensing and the Majority Lenders;
(1) Receipt by each of the Lenders of a one time amendment fee equal to 10
basis points of each such Lender's Commitment.
(1) Evidence of Termination of the Guess Letter of Credit;
(a) Receipt by the Agent of (i) the opinion of counsel to the Company in form
reasonably satisfactory to the counsel to the Agent; (ii) a certificate signed
by the Secretary or Assistant Secretary of the Company certifying, among other
things: that appended is a Certified Articles of Incorporation of the Company,
that the By-laws of the Company has not been amended since the certificate
delivered on December 31, 1997, that the appended resolutions of the
Company's Boards of Directors authorizing the execution, delivery and
performance of the Third Amendment to the Credit Agreement are in full force
and effect, and affirmation as to the names, incumbency and signatures of the
officers of the Company, Retail and Licensing executing the Third Amendment to
Credit Agreement and the other Loan Documents executed pursuant thereto;
(1) Current certificates of foreign qualification for the Company.
(1) Such other documents, instruments and agreements as Agent may reasonably
request in connection herewith or in order to effectuate the matters described
herein.
1. Credit Agreement Remains in Full Force an Effect. Except for the
amendments set forth in Section 2 hereof, no other amendment to the Credit
Agreement is being made or implied by this Third Amendment and all provisions
of the Credit Agreement shall remain in full force and effect, except as
specifically amended by this Third Amendment.
1. Representations and Warranties; No Default or Event of Default.
a. The Company hereby confirms that the representations and warranties
contained in Section 4 of the Credit Agreement are true and correct as of the
date hereof (except to the extent that such representations and warranties
relate to a prior date) and that no Default or Event of Default has occurred
and is continuing on the date hereof which was not waived under the Waiver
Agreement.
a. The Guarantors, which have consented to this Third Amendment, hereby
confirm that each of them is a Subsidiary for all purposes under the Credit
Agreement and that all of the representations and warranties contained in
Section 4 of the Credit Agreement are true and correct as of the date hereof as
to each of the Guarantors.
1. Governing Law. This Waiver shall be construed in accordance with and
governed by the laws of the Commonwealth of Massachusetts (without giving
effect to any conflicts of laws provisions contained therein).
1. Fees and Expenses. The Company shall pay the Lenders' reasonable
attorneys' fees and out-of-pocket expenses including, without limitation, other
normal and customary charges for photocopying, facsimile transmission,
overnight delivery, postage, long distance telephone calls and
11
similar charges actually incurred in connection with this Third Amendment as of
and through the date hereof.
1. Counterparts. This Third Amendment and Waiver may be executed in any
number of counterparts, each of which when executed and delivered shall be
deemed an original, but all of which together shall constitute one instrument.
In making proof of this Third Amendment, it shall not be necessary to account
for more than one counterpart hereof signed by each of the parties hereto.
Except to the extent specifically amended or supplemented hereby, all of the
items, conditions and provisions of the Credit Agreement shall remain
unmodified, and the Credit Agreement, as amended and supplemented by this Third
Amendment, is confirmed as being in full force and effect.
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
GUESS ?, INC.
By:
Print Name:
Title:
BANKBOSTON, N.A. FORMERLY THE FIRST NATIONAL BANK OF
BOSTON (AS AGENT AND LENDER)
By:
Print Name:
Title:
SANWA BANK
CALIFORNIA (AS CO-AGENT AND LENDER)
By:
Print Name:
Title:
CREDIT LYONNAIS LOS ANGELES
BRANCH (AS LENDER)
By:
Print Name:
Title:
SUMITOMO
BANK OF CALIFORNIA (AS LENDER)
By:
Print Name:
Title:
Acknowledged and Consented to:
GUESS ? RETAIL, INC.
By:___________________
Print Name:_________________
Title:_____________________
GUESS? LICENSING, INC.
By:
Print Name:
Title:____________________
13
EXHIBIT F
GUESS ?, INC.
REPORT OF CHIEF FINANCIAL OFFICER
GUESS ?, INC. (the "Company") HEREBY CERTIFIES that:
This Report is furnished pursuant to Section 5.1(c) of the Amended and
Restated Revolving Credit Agreement dated as of March 28, 1997, as amended from
time to time, by and between the Company and BankBoston, N.A. formerly known as
The First National Bank of Boston (the "Bank of Boston"), as Agent, Sanwa Bank
California, as Co-Agent, and the other Lenders party thereto (the "Agreement").
Unless otherwise defined herein, the terms used in this Report have the meanings
given to them in the Agreement.
As required by Section 5.1(a) and (b) of the Agreement, consolidated
financial statements of the Company and its Subsidiaries for the
[year/month/quarter] ended , 19 (the "Financial Statements")
prepared in accordance with GAAP consistently applied accompany this Report.
The Financial Statements present fairly the consolidated financial position of
the Company and its Subsidiaries as at the date thereof and the consolidated
results of operations of the Company and its Subsidiaries for the period
covered thereby (subject only to normal recurring year-end adjustments).
The figures set forth in Schedule A for determining compliance by the
Company with the financial covenants contained in the Agreement are true and
complete as of the date hereof.
The activities of the Company and its Subsidiaries during the period
covered by the Financial Statements have been reviewed by the Chief Financial
Officer or by employees or agents under his immediate supervision. Based on
such review, to the best knowledge and belief of the Chief Financial Officer,
and as of the date of this Report, no Default has occurred and is continuing.(1)
WITNESS my hand this day of , 19 .
GUESS ?, INC.
By:
Title:
(1) If a Default has occurred, this paragraph is to be modified with an
appropriate statement as to the nature thereof, the period of existence
period of existence thereof and what action the Company has taken, is
taking, is taking, or proposes to take with respect thereto.
1
SCHEDULE A
to
EXHIBIT F
FINANCIAL COVENANTS
Current Ratio (Section 5.7)
REQUIRED for fiscal quarter ending
:
:1.00
ACTUAL for fiscal quarter ending
:
(i) Consolidated Current Assets $
(ii) Consolidated Current Liabilities
(iii) Current portion of Indebtedness for Money Borrowed $
(iv) Line (ii) less line (iii) $
(v) Line (i) divided by line (iv) :1.00
Leverage Ratio (Section 5.8)
MAXIMUM for fiscal quarter ending
: :1.00
ACTUAL for fiscal quarter ending
:
(i) Indebtedness for Money Borrowed $
(ii) Consolidated Cash Flow $
(iii) Excess Dividends $
(iv) Line (ii) less line (iii) $
(vi) Line (i) divided by line (iv) :1.00
Total Interest Coverage (Section 5.9)
REQUIRED for fiscal quarter ending
: :1.00
ACTUAL for fiscal quarter ending $
:
(i) Consolidated EBITDA
(ii) Capital Expenditures $
(iii) Line (i) less Line (ii) $
2
(iv) Consolidated Total Interest Expense $
(v) Line (iii) divided by line (iv) :1.00
Total Fixed Charge Coverage (Section 5.10)
REQUIRED for fiscal quarter ending
: :1.00
ACTUAL for fiscal quarter ending
:
(i) Consolidated Cash Flow $
(ii) Payments on Operating Leases $
(iii) Sum Total of Line (i) plus Line (ii) $
(iv) Consolidated Total Debt Service $
(v) Payments on Operating Leases
(vi) Sum Total of Line (iv) plus Line (v)
(vii) Line (iii) divided by Line (iv) :1.00
Profitability (Section 5.11)
REQUIRED at the end of each fiscal quarter: $ 1.00
ACTUAL for fiscal quarter ending
:
Consolidated net income $
Inventory Turnover (Section 5.12)
MINIMUM: 2.25 Turns
ACTUAL:
(i) Total cost of sales for the $
Company for the four fiscal quarters ended
(ii) Book Value of inventory at end $
of current fiscal quarter
(iii) Book value of inventory $
at beginning of measurement period
(iv) Line (ii) plus line (iii) $
(v) Line (iv) divided by 2
(vi) Line (i) divided by line (v) ____ Turns
3
CAPITAL EXPENDITURES (SECTION 5.16)
MAXIMUM for fiscal year ending
:
ACTUAL through the fiscal quarter ending
:
WITNESS my hand this ______ day of ____________, 19__.
GUESS ?, INC.
By:
Title:
4
EXHIBIT J
LENDER'S PERCENTAGES
Lender Maximum
Total Lender's
Commitment Percentages
BankBoston, N.A. $30,000,000 34.5324%
000 Xxxxxxx Xxxxxx
Mail Stop 01-09-05
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx, Director
Telecopier: (000)000-0000
Sanwa Bank California $26,875,000 30.9353%
Sanwa Bank Plaza
000 Xxxxx Xxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, Vice President
Telecopier: (000)000-0000
Credit Lyonnais $20,000,000 23.0216%
Los Angeles Branch
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxx, Vice President
Telecopier: (000) 000-0000
Sumitomo Bank of California $10,000,000 11.5108%
000 Xxxx 0xx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxx Xxxxxxxxxx, Vice President
Telecopier: (000) 000-0000
1
