EXHIBIT 10.18
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 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."
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
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Xxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxx
President/chief Executive Officer Relationship Manager
By: /s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
