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Exhibit 10.37
AMENDMENT NO. 3
TO THE CREDIT AGREEMENT
Dated as of June 23, 1999
AMENDMENT NO. 3 TO THE CREDIT AGREEMENT (this "Amendment")
among Iron Age Corporation, a Delaware corporation (the "Borrower"), Iron Age
Holdings Corporation, a Delaware corporation (the "Parent Guarantor"), the
banks, financial institutions and other institutional lenders parties to the
Credit Agreement referred to below (collectively, the "Lenders") and Banque
Nationale de Paris, as agent (the "Agent") for the Lenders, initial issuing bank
and swing line bank.
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders and the Agent have entered into
a Credit Agreement dated as of April 24, 1998, a Letter Waiver thereto dated as
of August 28, 1998 and an Amendment No. 2 and Waiver dated as of February 26,
1999 (such Credit Agreement, as so amended, the "Credit Agreement"). Capitalized
terms not otherwise defined in this Amendment have the same meanings as
specified in the Credit Agreement.
(2) The Borrower and the Required Lenders have agreed to amend
the Credit Agreement as hereinafter set forth.
SECTION 1. Amendments to Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 2 hereof, hereby amended as
follows:
(a) The definition of "Fixed Charge Coverage Ratio" set forth
in Section 1.01 is amended by amending clause (a)(ii) thereof in full
to read as follows:
"(ii) income taxes of the Parent Guarantor and its
Subsidiaries that have been paid in cash during such Rolling
Period (other than taxes paid in respect of the purchase of
Senior Subordinated Notes at a discount in accordance with
Section 5.02(k)(ii)(z)) to"
(b) Section 2.14(b) is amended in full to read as follows:
"(b) from the Acquisition Advances on the terms provided by
Section 5.02(f)(xi), 5.02(f)(xvi), 5.02 (f)(xvii) or
5.02(k)(ii)(z), as applicable".
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(c) Section 3.02(iii) is amended in full to read as follows:
"(iii) for each Acquisition Borrowing, (a) such
Borrowing shall be in compliance with the terms set forth in
Section 5.02(f)(xi), 5.02(f)(xvi) or 5.02(f)(xvii), as
applicable, and, if requested by the Agent or the Required
Lenders, the Borrower will provide the Lender Parties with
certificates and letters of the type referred to in Section
3.01(k)(xv) after giving effect to the application of proceeds
from such Borrowing, (b) with respect to each Acquisition
Borrowing occurring prior to April 30, 2000 the proceeds of
which will be used for any purpose other than the purchase of
Senior Subordinated Notes in compliance with Section
5.02(k)(ii)(z), the Parent Guarantor shall also be in
compliance, before and after giving effect to the Investment
related to such Acquisition Borrowing, with the financial
covenants set forth in Schedule IV hereto and (c) with respect
to each Acquisition Borrowing the proceeds of which will be
used to purchase Senior Subordinated Notes, such Borrowing
shall be in compliance with the terms set forth in Section
5.02(k)(ii)(z); and"
(d) Section 3.02(iv) is amended in full to read as follows:
"(iv) for each Working Capital Advance or Swing Line
Advance made by the Swing Line Bank or issuance of any Letter
of Credit, the sum of the Loan Values of the Eligible
Collateral (as determined based on the most recent Borrowing
Base Certificate delivered to the Lender Parties hereunder)
exceeds the aggregate principal amount of Working Capital
Advances plus Swing Line Advances plus Letter of Credit
Advances to be outstanding plus the aggregate Available Amount
of all Letters of Credit then outstanding after giving effect
to such Advance or issuance, respectively, plus, for the
period beginning on the date that the Borrower first makes an
Acquisition Borrowing to finance the purchase of Senior
Subordinated Notes in accordance with the terms set forth in
Section 5.02(k)(ii)(z) and ending on the date upon which the
Required Lenders consent in writing to the termination of such
availability blockage, $3,000,000."
(e) Section 5.02(k) is amended in full to read as follows:
"(k) Prepayments, Etc. of Debt. (i) Amend, modify or
change in any manner, or permit any of their Subsidiaries to
amend, modify or change in any manner, any term or condition
of any Surviving Debt, any Subordinated Debt or the Discount
Notes or (ii) prepay, redeem, purchase, defease or otherwise
satisfy prior to the scheduled maturity thereof in any manner,
or make any payment in violation of any subordination terms
of, any Debt, or permit any of their Subsidiaries to do so,
other than (x) the prepayment of the Advances in accordance
with the terms of this Agreement, (y) if both before and after
giving effect to any such prepayment, redemption, purchase,
defeasance or other
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satisfaction, no Default has occurred or would result
therefrom, regularly scheduled or required repayments or
redemptions of Surviving Debt and (z) on or prior to January
31, 2000, the purchase of Senior Subordinated Notes at or
below par if (1) the Borrower provides to the Lenders on or
prior to the date of such purchase a certificate (A) stating
that both before and after giving effect to any such purchase,
no Default has occurred or would result therefrom, (B) stating
that, in the aggregate, not more than $13,300,000 of the
Acquisition Advances have been used in connection with such
purchase and (C) demonstrating in reasonable detail pro forma
compliance with Section 5.04 giving effect to such purchase
and (2) any proceeds of the Acquisition Advances used in
connection with such purchase shall not exceed $13,300,000 in
the aggregate and shall equal not more than 66 2/3% of the
purchase price of such Senior Subordinated Notes and not less
than 33 1/3% of the purchase price of such Senior Subordinated
Notes shall be paid with the proceeds of a Permitted Issuance
."
(f) Section 5.04(c) is amended by deleting the ratios set
opposite the following dates and substituting therefor the ratio set
forth below opposite each such date:
Rolling Period Ending Closest To Ratio
-------------------------------- -----
July 31, 1999 1.40 : 1.00
October 31, 1999 1.50 : 1.00
January 31, 2000 1.60 : 1.00
(g) Section 5.04(e) is amended by deleting the ratios set
opposite the following dates and substituting therefor the ratio set
forth below opposite each such date:
Rolling Period Ending Closest To Ratio
-------------------------------- -----
July 31, 1999 2.20 : 1.00
October 31, 1999 2.10 : 1.00
January 31, 2000 2.00 : 1.00
(h) Schedule I to the Credit Agreement is amended in full to
read as set forth as Annex A hereto.
SECTION 2. Conditions of Effectiveness. This Amendment shall
become effective as of the date first above written when, and only when, the
Agent shall have received the following:
(a) Counterparts of this Amendment executed by the Borrower,
the Required Lenders and each Acquisition Lender for which the
Acquisition Commitment of such Lender is increased as a result of this
Amendment or, as to any of the Lenders, advice satisfactory to the
Agent that such Lender has executed this Amendment,
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(b) The consent attached hereto executed by the Parent
Guarantor and the Subsidiary Guarantors,
(c) Certified copies of the resolutions of the Board of
Directors of the Borrower and each other Loan Party approving this
Amendment, and of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this
Amendment,
(d) A certificate of each of the Borrower, the Parent
Guarantor and each other Loan Party, signed on behalf of such Person by
its President, any Executive Vice President or any Vice President and
its Secretary, dated the date of this Amendment (the statements made in
which certificate shall be true on and as of the date of this
Amendment), certifying as to (A) the absence of any amendments to the
charter of such Person since the date of the Secretary of State's
certificate referred to in Section 3.01(k)(iii) of the Credit
Agreement, (B) a true and correct copy of the bylaws of such Person as
in effect on the date on which the resolutions referred to in clause
(c) were adopted and on the date of this Amendment, (C) the due
incorporation and good standing or valid existence of such Person as a
corporation organized under the laws of the jurisdiction of its
incorporation and the absence of any proceeding for the dissolution or
liquidation of such Person, (D) the completeness and accuracy of the
representations and warranties contained in the Loan Documents as
though made on and as of the date of this Amendment and (E) the absence
of any event occurring and continuing, or resulting from this
Amendment, that constitutes a Default,
(e) A certificate of the Secretary of each of the Borrower,
the Parent Guarantor and each other Loan Party certifying the names and
true signatures of the officers of such Persons authorized to sign this
Amendment and the Consent, as applicable,
(f) A favorable opinion of Ropes & Xxxx, special counsel for
the Loan Parties, in form and substance reasonably satisfactory to the
Agent.
This Amendment is subject to the provisions of Section 9.01 of the Credit
Agreement.
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SECTION 3. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction
indicated in the recital of parties to this Amendment.
(b) The execution, delivery and performance by the Borrower of
this Amendment and the Loan Documents, as amended hereby, to which it
is or is to be a party, are within the Borrower's corporate powers,
have been duly authorized by all necessary corporate action and do not
(i) contravene the Borrower's charter or by-laws, (ii) violate any law
(including, without limitation, the Securities Exchange Act of 1934, as
amended, and the Racketeer Influenced and Corrupt Organizations Chapter
of the Organized Crime Control Act of 1970), rule or regulation
(including, without limitation, Regulation X of the Board of Governors
of the Federal Reserve System), or any order, writ, judgment,
injunction, decree, determination or award, binding on or affecting the
Borrower or any of its Subsidiaries or any of their properties, (iii)
conflict with or result in the breach of, or constitute a default
under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting the Borrower,
any of its Subsidiaries or any of their properties or (iv) except for
the Liens created under the Collateral Documents, result in or require
the creation or imposition of any Lien upon or with respect to any of
the properties of the Borrower or any of its Subsidiaries.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery or
performance by the Borrower of this Amendment or any of the Loan
Documents, as amended hereby, to which it is or is to be a party.
(d) This Amendment has been duly executed and delivered by the
Borrower. This Amendment and each of the other Loan Documents, as
amended hereby, to which the Borrower is a party is the legal, valid
and binding obligation of the Borrower, enforceable against the
Borrower in accordance with its terms.
(e) There is no action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries
(including, without limitation, any Environmental Action) pending or
threatened before any court, governmental agency or arbitrator that (i)
could be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of this
Amendment or any of the other Loan Documents, as amended hereby.
SECTION 4. Reference to and Effect on the Credit Agreement and
the Loan Documents. (a) On and after the effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof" or
words of like import referring to the Credit Agreement, and each reference in
each of the other Loan Documents to "the Credit
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Agreement", "thereunder", "thereof" or words of like import referring to the
Credit Agreement, shall mean and be a reference to the Credit Agreement, as
amended by this Amendment.
(b) The Credit Agreement and each of the other Loan Documents,
as specifically amended by this Amendment, are and shall continue to be in full
force and effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
SECTION 5. Costs and Expenses. The Borrower agrees to pay on
demand all costs and expenses of the Agent in connection with the preparation,
execution, delivery and administration, modification and amendment of this
Amendment and the other instruments and documents to be delivered hereunder
(including, without limitation, the reasonable fees and expenses of counsel for
the Agent) in accordance with the terms of Section 9.04 of the Credit Agreement.
SECTION 6. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment by telecopier shall be effective as delivery of a manually executed
counterpart of this Amendment.
SECTION 7. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
IRON AGE CORPORATION
By ___________________________
Title:
BANQUE NATIONALE DE PARIS,
as Agent, Swing Line Bank,
Issuing Bank and as Lender
By ___________________________
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Title:
By ___________________________
Title:
KEY CORPORATE CAPITAL INC.
By ___________________________
Title:
PNC BANK, NATIONAL ASSOCIATION
By ___________________________
Title:
UBS AG, STAMFORD BRANCH
By ___________________________
Title:
By ___________________________
Title:
U.S. BANK NATIONAL ASSOCIATION
By ___________________________
Title:
CONSENT
Dated as of June 23, 1999
Each of the undersigned, as a Loan Party party to certain of
the Loan Documents (as defined in the Credit Agreement referred to in the
foregoing Amendment No. 3), hereby
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consents to such Amendment and hereby confirms and agrees that (a)
notwithstanding the effectiveness of such Amendment, each Loan Document to which
it is a party is, and shall continue to be, in full force and effect and is
hereby ratified and confirmed in all respects, except that, on and after the
effectiveness of such Amendment, each reference in such Loan Document to the
"Credit Agreement", "thereunder", "thereof" or words of like import shall mean
and be a reference to the Credit Agreement, as amended by such Amendment, and
(b) the Collateral Documents to which such Loan Party is a party and all of the
Collateral described therein do, and shall continue to, secure the payment of
all of the Secured Obligations (in each case, as defined therein).
IRON AGE HOLDINGS CORPORATION
By ___________________________
Title:
IRON AGE INVESTMENT COMPANY
By ___________________________
Title:
FALCON SHOE MFG. CO.
By ___________________________
Title:
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Annex A
SCHEDULE I
