AMENDMENT NO. 4 TO AMENDED & RESTATED FINANCING AGREEMENT
Exhibit 10.1
AMENDMENT NO. 4
TO
AMENDED & RESTATED FINANCING AGREEMENT
This Amendment No. 4 to Amended & Restated Financing Agreement (this “Amendment No.
4”) is entered into as of May 13, 2010, by and among G-III Leather Fashions, Inc., a New York
corporation (“G-III Inc.”), X. Xxxxx for Xxxxxx Xxxxxxxx, Ltd., a New York corporation
(“JPMR”), CK Outerwear, LLC, a New York limited liability company (“CKO”), A. Marc
& Co., Inc., a New York corporation (“AMC”), Xxxxxx & Xxxxxxx Company Inc., a New York
corporation (“A&S”), AM Retail Group, Inc., a Delaware corporation (“AMRGI”, and
together with G-III Inc., JPMR, CKO, AMC and A&S, individually a “Company” and
collectively, the “Companies”), JPMorgan Chase Bank N.A. (“JPMC”), The CIT
Group/Commercial Services, Inc., a New York corporation (“CIT”) (JPMC, CIT and the other
financial institutions which are now or hereafter become a party to the Financing Agreement (as
hereafter defined) each a “Lender” and collectively, “Lenders”), and JPMC, as
successor agent to CIT, as agent for Lenders (JPMC, in such capacity, “Agent”).
BACKGROUND
The Companies, Agent and Lenders are parties to an Amended and Restated Financing Agreement,
dated as of April 3, 2008 (as amended by Joinder and Amendment No. 1 to Amended and Restated
Financing Agreement dated as of July 21, 2008, Amendment No. 2 to Amended and Restated Financing
Agreement dated as of April 20, 2009, Amendment No. 3 to Amended & Restated Financing Agreement
dated as of August 31, 2009, and as further amended, restated, modified and/or supplemented from
time to time, the “Financing Agreement”) pursuant to which Agent and Lenders provide the
Companies with certain financial accommodations.
The Companies have requested Agent and Lenders to (a) extend the Termination Date set forth in
the Financing Agreement from July 11, 2011 to July 31, 2013, (b) increase the Line of Credit from
$250,000,000 to $300,000,000, (c) lower the interest rates applicable to the Loans by one-quarter
of one percent (0.25%) and (d) make certain other modifications to the Financing Agreement. Agent
and Lenders are willing to agree to such extension, increase the Line of Credit, lower the interest
rates and amend certain of the terms of the Financing Agreement, all as hereinafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or
hereafter made to or for the account of the Companies by Agent and Lenders, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:
1. Definitions. All capitalized terms not otherwise defined herein shall have the
meanings given to them in the Financing Agreement.
2. Amendments to Financing Agreement. Subject to satisfaction of the conditions
precedent set forth in Section 3 below, the Financing Agreement is hereby amended as follows:
(a) Section 1.1 of the Financing Agreement is hereby amended by inserting a definition for the
new term “Net Equity Raised and Retained”, in its appropriate alphabetical order, to provide as
follows:
Net Equity Raised and Retained shall mean an amount equal to (a) 100% of the
net cash proceeds from the sale of equity securities by Parent at any time during
the period from November 1, 2009 through the Termination Date minus (b) any
Permitted Distributions during the period from the date such equity securities are
issued through the date of the applicable acquisition and minus (c) any “net
cash losses” sustained by Parent and its Subsidiaries during the period from the
date such equity securities are issued through the date of the applicable
acquisition. For purposes of this definition, “net cash losses” shall mean (x) all
earnings of Parent and its Subsidiaries on a consolidated basis for such period
before depreciation and amortization expenses minus (y) Capital
Expenditures during such period.
(b) Section 1.1 of the Financing Agreement is hereby further amended by restating the
definitions of the terms “Applicable Margin”, “Commitment”, “Line of Credit”, “Line of Credit Fee”,
“Revolving Line of Credit”, “Supplemental Amount” and “Termination Date” to provide as follows:
Applicable Margin shall mean, with respect to (a) the Revolving Loans, plus
0.50% for Chase Bank Rate Loans and 2.75% for LIBOR Loans, (b) standby Letters of
Credit, 1.50%, (c) documentary Letters of Credit, 0.125%, or (d) Bankers
Acceptances, the discount rate of JPMorgan Chase Bank, N.A. plus 2.50%.
Commitment shall mean, as to each Lender, the amount of the Commitment for
such Lender set forth (a) on the signature page to this Financing Agreement, (b) in
the Assignment and Transfer Agreement to which such Lender is a party, or (c) on the
signature page to any amendment to this Agreement executed by all Lenders, as such
amount may be reduced or increased in accordance with the provisions of Section
13.4(b) or any other applicable provision of this Financing Agreement.
Line of Credit shall mean, with the aggregate commitment of the Lenders in
an amount equal to $300,000,000 to (a) make Revolving Loans pursuant to Section
3 of this Financing Agreement, and (b) assist any Company in opening Letters of
Credit and/or Bankers Acceptances pursuant to Section 5 of this Financing
Agreement.
Line of Credit Fee shall mean, for any month, the product obtained by
multiplying (a) (i) the amount of the Revolving Line of Credit minus (ii)
the average daily principal balance of Revolving Loans and the average daily undrawn
amount of Letters of Credit, Bankers Acceptances, Steamship Guarantees and Airway
Releases outstanding during such month, times (b) one-quarter of one percent
(0.25%) per annum for the number of days in said month;
provided, however, that the Line of Credit Fee during any one year
period commencing on each April 1 and ending on the day before each anniversary
thereof shall not exceed $375,000.
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Revolving Line of Credit shall mean the Commitments of the Lenders to make
Revolving Loans pursuant to Section 3 of this Financing Agreement and assist
the Companies in opening Letters of Credit, Bankers Acceptances, Steamship
Guarantees and Airway Releases pursuant to Section 5 of this Financing
Agreement, in an aggregate amount equal to $300,000,000.
Supplemental Amount shall mean the following amounts during the following
periods during each calendar year, in each case minus all Supplemental Amount
Reductions:
| Period | Supplemental Amount | |||
May 1 through and including May 31 |
$ | 20,000,000 | ||
June 1 through and including June 30 |
$ | 30,000,000 | ||
July 1 through and including July 31 |
$ | 35,000,000 | ||
August 1 through and including September 29 |
$ | 40,000,000 | ||
September 30 through and including October 15 |
$ | 0 | ||
Termination Date shall mean July 31, 2013.
(c) Clause (d) of the definition of “Permitted Distributions” appearing in Section 1.1 of the
Financing Agreement is hereby amended by inserting the following immediately prior to the words “to
fund a Special Capital Expenditure” appearing therein:
either (A) in connection with a Permitted Acquisition or (B)
3
(d) Paragraph 7.3(a) of the Financing Agreement is hereby amended by restating the required
Senior Leverage Ratio levels to be maintained as at the end of each fiscal quarter ending after the
date hereof, on a trailing twelve months basis, to be not greater than the following for the
applicable test period:
| Twelve Months Ending | Senior Leverage Ratio | |||
April 30, 2010 |
2.50 to 1.00 | |||
July 31, 2010 |
5.00 to 1.00 | |||
October 31, 2010 |
5.60 to 1.00 | |||
January 31, 2011 |
2.40 to 1.00 | |||
April 30, 2011 |
2.50 to 1.00 | |||
July 31, 2011 |
5.00 to 1.00 | |||
October 31, 2011 |
5.60 to 1.00 | |||
January 31, 2012 |
2.40 to 1.00 | |||
April 30, 2012 |
2.50 to 1.00 | |||
July 31, 2012 |
5.00 to 1.00 | |||
October 31, 2012 |
5.60 to 1.00 | |||
January 31, 2013 |
2.40 to 1.00 | |||
April 30, 2013 |
2.50 to 1.00 | |||
(e) Paragraph 7.3(b) of the Financing Agreement is hereby amended by restating the required
Fixed Charge Coverage Ratio levels to be maintained as at the end of each fiscal quarter ending
after the date hereof, on a trailing twelve months basis, to be not less than the following for the
applicable test period:
| Twelve Months Ending | Fixed Charge Coverage Ratio | |||
April 30, 2010 |
1.00 to 1.00 | |||
July 31, 2010 |
1.00 to 1.00 | |||
October 31, 2010 |
1.10 to 1.00 | |||
January 31, 2011 |
1.10 to 1.00 | |||
April 30, 2011 |
1.00 to 1.00 | |||
July 31, 2011 |
1.00 to 1.00 | |||
October 31, 2011 |
1.10 to 1.00 | |||
January 31, 2012 |
1.10 to 1.00 | |||
April 30, 2012 |
1.00 to 1.00 | |||
July 31, 2012 |
1.00 to 1.00 | |||
October 31, 2012 |
1.10 to 1.00 | |||
January 31, 2013 |
1.10 to 1.00 | |||
April 30, 2013 |
1.00 to 1.00 | |||
(f) Paragraph 7.4(g)(I) of the Financing Agreement is hereby amended and restated in its
entirety to provide as follows:
(I) the aggregate consideration in respect of all acquisitions contemplated
by this clause (g) shall not exceed, during the period commencing May 1,
2010 and continuing through the Termination Date, the sum of (x) $35,000,000
in cash (whether payable on or prior to the closing thereof or at any time
thereafter through and including the Termination Date, but excluding any
contingent “earn out” payments relating to such Permitted Acquisition;
provided, however, that no more than $5,000,000 of such
amount shall be available for acquisitions that are not in the same line of
business as the Companies on the Closing Date or a complementary line of
business), plus (y) an amount equal to any
consideration payable in the form of additional capital stock of Parent
issued to the applicable seller in connection with such acquisition (“Seller
Issued Equity”), plus (z) without duplication of any Seller Issued
Equity, an amount equal to any Net Equity Raised and Retained;
provided, further, that the aggregate consideration (whether
cash or non-cash) in respect of all acquisitions contemplated by this clause
(g) shall not exceed, during the term of this Agreement, the sum of
$70,000,000;
4
(g) Paragraph 7.4(l) of the Financing Agreement is hereby deleted in its entirety.
(h) Paragraph 10.1(k) of the Financing Agreement is hereby deleted in its entirety.
3. Conditions of Effectiveness. This Amendment No. 4 shall become effective as of the
date hereof upon satisfaction of the following conditions: Agent shall have received:
(a) Fifteen (15) copies of this Amendment No. 4 duly executed by the Companies, Agent and all
Lenders, and consented to by each Guarantor;
(b) Payment of an amendment fee in an amount equal to 15 basis points on the aggregate amount
of the Commitments in effect immediately prior to the date hereof, for an aggregate amendment fee
of $375,000, for the ratable benefit of all Lenders, which fee shall be fully earned and
non-refundable on the effective date of this Amendment No. 4;
(c) Payment of an upfront fee in an amount equal to 25 basis points on the aggregate
$50,000,000 increase in the Commitments as of the effective date of this Amendment No. 4, for an
aggregate upfront fee of $125,000, for the ratable benefit of all Lenders increasing their
Commitment as of the effective date of this Amendment No. 4, pro rata based upon each Lender’s
respective increase, which fee shall be fully earned and non-refundable on the effective date of
this Amendment No. 4; and
(d) such other certificates, instruments, documents and agreements as may reasonably be
required by Agent or its counsel, each of which shall be in form and substance satisfactory to
Agent and its counsel.
4. Representations and Warranties. Each of the Companies hereby represents, warrants
and covenants as follows:
(a) This Amendment No. 4, the Financing Agreement and the other Loan Documents are and shall
continue to be legal, valid and binding obligations of each of Companies and Guarantors,
respectively, and are enforceable against each Company and each Guarantor in accordance with their
respective terms.
5
(b) Upon the effectiveness of this Amendment No. 4, each Company and each Guarantor hereby
reaffirms all covenants, representations and warranties made in the Financing Agreement and the
other Loan Documents and agrees that all such covenants, representations and warranties shall be
deemed to have been remade and are true and correct in all material
respects as of the effective date of this Amendment No. 4, after giving effect to this
Amendment No. 4, provided, however, that the information contained in the Schedules attached to the
Financing Agreement continues to be true, correct and complete as of the Closing Date, and there
have been no changes to such matters as of the date hereof except to the extent any such change
would not have a Material Adverse Effect, constitute a Default or Event or Default, or otherwise
require notice to the Agent in accordance with the terms of the Financing Agreement.
(c) Each Company and each Guarantor has the corporate or limited liability company power, and
has been duly authorized by all requisite corporate or limited liability company action, to execute
and deliver this Amendment No. 4 and to perform its obligations hereunder. This Amendment No. 4
has been duly executed and delivered by each Company and consented to by each Guarantor.
(d) Each Company has no defense, counterclaim or offset with respect to any of the Loan
Documents.
(e) The Loan Documents are in full force and effect, and are hereby ratified and confirmed.
(f) The recitals set forth in the Background section above are truthful and accurate and are
an operative part of this Amendment No. 4.
(g) Agent and Lenders have and will continue to have a valid first priority lien and security
interest in all Collateral except for liens permitted by the Financing Agreement, and each Company
and each Guarantor expressly reaffirms all guarantees, security interests and liens granted to
Agent and Lenders pursuant to the Loan Documents.
(h) No Defaults or Events of Default are in existence.
5. Effect of Agreement.
(a) Except as specifically modified herein, the Financing Agreement, and all other documents,
instruments and agreements executed and/or delivered in connection therewith, shall remain in full
force and effect, and are hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of Amendment No. 4 shall not operate as a
waiver of any right, power or remedy of Agent or any Lender, nor constitute a waiver of any
provision of the Financing Agreement, or any other documents, instruments or agreements executed
and/or delivered under or in connection therewith.
6. Governing Law. This Amendment No. 4 shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns and shall be governed by and
construed in accordance with the laws of the State of New York.
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7. Headings. Section headings in this Amendment No. 4 are included herein for
convenience of reference only and shall not constitute a part of this Amendment No. 4 for any other
purpose.
8. Counterparts; Facsimile. This Amendment No. 4 may be executed by the parties
hereto in one or more counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement. Any signature delivered by a party by
facsimile or other electronic transmission (including in “pdf” format) shall be deemed to be an
original signature hereto.
[signature pages follow]
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IN WITNESS WHEREOF, this Amendment No. 4 has been duly executed as of the day and year first
written above.
| G-III LEATHER FASHIONS, INC., as | ||||||
| a Company and the Funds Administrator | ||||||
| By: | /s/ Xxxx X. Xxxxxxx
|
|||||
| Title: Vice President — Finance | ||||||
| X. XXXXX FOR XXXXXX XXXXXXXX, LTD., as a Company | ||||||
| By: | /s/ Xxxx X. Xxxxxxx
|
|||||
| Title: Secretary | ||||||
| CK OUTERWEAR, LLC, as a Company | ||||||
| By: | /s/ Xxxx X. Xxxxxxx
|
|||||
| Title: Secretary | ||||||
| A. MARC & CO., INC., as a Company | ||||||
| By: | /s/ Xxxx X. Xxxxxxx
|
|||||
| Title: Vice President — Finance and Secretary | ||||||
| XXXXXX & XXXXXXX COMPANY INC., as a Company | ||||||
| By: | /s/ Xxxx X. Xxxxxxx
|
|||||
| Title: Vice President — Finance and Secretary | ||||||
Signature page to Amendment No. 4- 1852027
| AM RETAIL GROUP, INC., as a Company | ||||||
| By: | /s/ Xxxxxxx Xxxxx
|
|||||
| Title: Controller and Vice President | ||||||
| JPMORGAN CHASE BANK, N.A., as Lender and as Agent | ||||||
| By: | /s/ Xxxxx X. XxXxxxx
|
|||||
| Title: Vice President | ||||||
| Commitment: $42,500,000 | ||||||
| Pro Rata Percentage: 14.168% | ||||||
| THE CIT GROUP/COMMERCIAL SERVICES, INC., as Lender | ||||||
| By: | /s/ Xxxxxx X. Xxxxxx
|
|||||
| Title: Senior Vice President | ||||||
| Commitment: $15,000,000 | ||||||
| Pro Rata Percentage: 5.000% | ||||||
| HSBC BANK USA, NATIONAL ASSOCIATION, as Lender | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxxxx
|
|||||
| Title: |
||||||
| Commitment: $38,500,000 | ||||||
| Pro Rata Percentage: 12.833% | ||||||
Signature page to Amendment No. 4- 1852027
| SOVEREIGN BANK, as Lender | ||||||
| By: | /s/ Xxxxxxx Xxxxx
|
|||||
| Title: Senior Vice President | ||||||
| Commitment: $30,000,000 | ||||||
| Pro Rata Percentage: 10.000% | ||||||
| ISRAEL DISCOUNT BANK OF NEW YORK, as Lender | ||||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||||
| Name: Xxxxx X. Xxxxxxx | ||||||
| Title: Vice President | ||||||
| By: | /s/ Xxxxxx Commander | |||||
| Name: Xxxxxx Commander | ||||||
| Title: Senior Vice President | ||||||
| Commitment: $30,000,000 | ||||||
| Pro Rata Percentage: 10.000% | ||||||
| TD BANK, N.A., as Lender | ||||||
| By: | /s/ Xxxx Xxxxx | |||||
| Name: Xxxx Xxxxx | ||||||
| Title: Vice President | ||||||
| Commitment: $30,000,000 | ||||||
| Pro Rata Percentage: 10.000% | ||||||
Signature page to Amendment No. 4- 1852027
| SIGNATURE BANK, as Lender | ||||||
| By: | /s/ Xxxxx X. Xxxxxx | |||||
| Name: Xxxxx X. Xxxxxx | ||||||
| Title: Senior Lender & Vice President | ||||||
| Commitment: $15,000,000 | ||||||
| Pro Rata Percentage: 5.000% | ||||||
| BANK LEUMI USA, as Lender | ||||||
| By: | /s/ Xxxx Xxxxxxxxxx | |||||
| Name: Xxxx Xxxxxxxxxx | ||||||
| Title: Vice President | ||||||
| By: | /s/ Xxxxx Xxxxx
|
|||||
| Title: Assistant Vice President | ||||||
| Commitment: $18,500,000 | ||||||
| Pro Rata Percentage: 6.166% | ||||||
| XXXXXXX BUSINESS CREDIT, as Lender | ||||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||||
| Name: Xxxxxx Xxxxxxxx | ||||||
| Title: Vice President | ||||||
| Commitment: $18,500,000 | ||||||
| Pro Rata Percentage: 6.166% | ||||||
Signature page to Amendment Xx. 0- 0000000
| XXXX XX XXXXXXX, X.X., as Lender | ||||||
| By: | /s/ Xxxxx Xxxxxxxx | |||||
| Name: Xxxxx Xxxxxxxx | ||||||
| Title: Vice President | ||||||
| Commitment: $28,500,000 | ||||||
| Pro Rata Percentage: 9.500% | ||||||
| XXXXX FARGO BANK, N.A., as Lender | ||||||
| By: | /s/ Xxxxxx Xxxxxxx
|
|||||
| Title: Senior Vice President | ||||||
| Commitment: $33,500,000 | ||||||
| Pro Rata Percentage: 11.167% | ||||||
| ACKNOWLEDGED AND AGREED TO | ||||||
| BY EACH OF THE GUARANTORS: | ||||||
| G-III APPAREL GROUP, LTD. | ||||||
| By: | /s/ Xxxx X. Xxxxxxx
|
|||||
| Title: Chief Financial Officer and Treasurer | ||||||
| G-III RETAIL OUTLETS INC. | ||||||
| By: | /s/ Xxxx X. Xxxxxxx
|
|||||
| Title: Vice President — Finance | ||||||
Signature page to Amendment No. 4- 1852027
| G-III LICENSE COMPANY, LLC | ||||||
| By: G-III Apparel Group, Ltd. | ||||||
| By: | /s/ Xxxx X. Xxxxxxx
|
|||||
| Title: Chief Financial Officer & Treasurer | ||||||
| G-III BRANDS, LTD. | ||||||
| By: | /s/ Xxxx X. Xxxxxxx
|
|||||
| Title: Vice President — Finance | ||||||
| AM APPAREL HOLDINGS, INC. | ||||||
| By: | /s/ Xxxxxxx Xxxxx
|
|||||
| Title: Treasurer | ||||||
| ASH RETAIL CORP. | ||||||
| By: | /s/ Xxxxxxx Xxxxx
|
|||||
| Title: Treasurer | ||||||
| ASH RETAIL OF EASTHAMPTON, INC. | ||||||
| By: | /s/ Xxxxxxx Xxxxx
|
|||||
| Title: Treasurer | ||||||
Signature page to Amendment No. 4- 1852027
