EXHIBIT 10(a)
AMENDMENT NO. 2
TO
LOAN AND SECURITY AGREEMENT
AND CONSENT
THIS AMENDMENT NO. 2 AND CONSENT ("Amendment No. 2 and Consent") is
entered into as of September 12, 2005, by and among ROCKY SHOES & BOOTS, INC., a
corporation organized and existing under the laws of the State of Ohio
("Rocky"), LIFESTYLE FOOTWEAR, INC., a corporation organized and existing under
the laws of the State of Delaware, EJ FOOTWEAR LLC, a limited liability company
organized and existing under the laws of the State of Delaware, XX XXXXXX SAFETY
SHOE CO. LLC, a limited liability company organized and existing under the laws
of the State of Delaware, GEORGIA BOOT LLC, a limited liability company
organized and existing under the laws of the State of Delaware, GEORGIA BOOT
PROPERTIES LLC, a limited liability company organized and existing under the
laws of the State of Delaware, DURANGO BOOT COMPANY LLC, a limited liability
company organized and existing under the laws of the State of Delaware,
NORTHLAKE BOOT COMPANY LLC, a limited liability company organized and existing
under the laws of the State of Delaware, LEHIGH SAFETY SHOE CO. LLC, a limited
liability company organized and existing under the laws of the State of
Delaware, LEHIGH SAFETY SHOE PROPERTIES LLC, a limited liability company
organized and existing under the laws of the State of Delaware (each a
"Borrower" and jointly and severally, "Borrowers"), the financial institutions
party thereto (each a "Lender" and collectively, the "Lenders"), GMAC COMMERCIAL
FINANCE LLC, as administrative agent and sole lead arranger for the Lenders (in
such capacities, the "Agent") and BANK OF AMERICA, N.A., as syndication agent
(in such capacity, the "Syndication Agent").
BACKGROUND
Borrowers, Agent and Lenders are parties to a Loan and Security
Agreement dated as of January 6, 2005 (as amended by Amendment No. 1 and Consent
dated as of January 19, 2005, and as further amended, restated, supplemented or
otherwise modified from time to time, the "Loan Agreement") pursuant to which
Agent and Lenders provide Borrowers with certain financial accommodations.
Borrowers have informed Agent and Lenders of the anticipated issuance
by Rocky of additional shares of Rocky's common stock, no par value, with the
option to issue further additional shares of Rocky's common stock, no par value,
in the event that the initial issuance shall be oversubscribed (the "Issuance").
Borrowers have requested that, as the Issuance relates to Sections 2.4(B)(4) and
2.4(E) of the Loan Agreement, Agent and Requisite Lenders consent to the
application of the Issuance proceeds thereof (a) $11,300,000 in full prepayment
and satisfaction of Term Loan A, including both principal and interest accrued
thereon, (b) $30,000,000 in full prepayment and satisfaction of Term Loan B (the
"Term Loan B Prepayment"), including both principal and interest accrued
thereon, (c) in the event any excess proceeds remain following the payment of
underwriting fees and other reasonable professional
fees associated with the Issuance, to pay all accrued and unpaid interest on the
prepaid principal of Term Loan A and Term Loan B, and any applicable prepayment
premiums associated with the prepayment of Term Loan A and Term Loan B and (d)
to repay outstanding Revolving Loans, but not as a permanent reduction of the
Revolving Loan Commitment. Agent and Requisite Lenders have agreed to consent to
the Term Loan B Prepayment, and to otherwise amend the Loan Agreement, upon the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of Borrowers 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 Loan Agreement.
2. Amendment to Loan Agreement. Subject to satisfaction of the
conditions precedent set forth in Section 3 below, the Loan Agreement is hereby
amended as follows:
(a) Section 1.2 of the Loan Agreement is amended by inserting
the following new defined terms in their appropriate alphabetical order:
"Amendment 2" shall mean Amendment No. 2 to this
Agreement dated as of September 12, 2005.
"Amendment 2 Closing Date" shall mean the date upon
which all of the conditions precedent to the
effectiveness of Amendment 2 have been satisfied.
(b) By deleting the third sentence of Section 2.1(B) in its
entirety and by substituting in lieu thereof the following:
"Term Loan A shall be repaid in full on the Amendment
2 Closing Date."
(c) By deleting the final sentence of Section 2.1(B) and the
related Schedule in its entirety.
3. Consent to Term Loan B Prepayment. Effective as of the Amendment No.
2 Closing Date, Agent, and each of the Requisite Lenders, hereby consents to the
Term Loan B Prepayment.
4. Conditions of Effectiveness. This Amendment No. 2 and Consent shall
become effective upon satisfaction of the following conditions precedent:
(a) Agent shall have received eight (8) copies of this
Amendment No. 2 and Consent duly executed by each Borrower and each of the
Requisite Lenders;
(b) Agent shall have received the sum of $11,300,000
representing prepayment in full of Term Loan A;
(c) Agent shall have received such other certificates,
instruments, documents, agreements and opinions of counsel as may be required by
Agent or its counsel relating to the transactions contemplated in this Amendment
No. 2 and Consent; and
(d) The Issuance shall have occurred on or before December 31,
2005.
5. Representations and Warranties. Each Borrower hereby represents and
warrants as follows:
(a) This Amendment No. 2 and Consent and the Loan Agreement,
as amended hereby, constitute legal, valid and binding obligations of Borrowers
and are enforceable against each Borrower in accordance with their respective
terms.
(b) Upon the effectiveness of this Amendment No. 2 and
Consent, each Borrower hereby reaffirms all covenants, representations and
warranties made in the Loan Agreement to the extent the same are not amended
hereby, and agrees that all such covenants, representations and warranties shall
be deemed to have been remade as of the effective date of this Amendment No. 2
and Consent, except to the extent any such representation or warranty expressly
relates to an earlier date.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Amendment No. 2 and
Consent.
(d) No Borrower has any defense, counterclaim or offset with
respect to the Loan Agreement.
(e) The Issuance is permitted pursuant to all applicable law
and all material agreements, documents and instruments to which any Loan Party
is a party or by which any of their respective properties or assets are bound.
6. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference
in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Loan Agreement as
amended hereby.
(b) Except as specifically amended herein, the Loan 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.
(c) The execution, delivery and effectiveness of this
Amendment No. 2 and Consent shall not operate as a waiver of any right, power or
remedy of Agent or Lenders, nor constitute a waiver of any provision of the Loan
Agreement, or any other documents, instruments or agreements executed and/or
delivered under or in connection therewith.
7. Governing Law. This Amendment No. 2 and Consent 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.
8. Headings. Section headings in this Amendment No. 2 and Consent are
included herein for convenience of reference only and shall not constitute a
part of this Amendment No. 2 and Consent for any other purpose.
9. Counterparts; Facsimile. This Amendment No. 2 and Consent 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
transmission shall be deemed to be an original signature hereto.
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IN WITNESS WHEREOF, this Amendment No. 2 and Consent has been duly
executed as of the day and year first written above.
ROCKY SHOES & BOOTS, INC.
LIFESTYLE FOOTWEAR, INC.
EJ FOOTWEAR LLC
XX XXXXXX SAFETY SHOE CO. LLC
GEORGIA BOOT LLC
GEORGIA BOOT PROPERTIES LLC
DURANGO BOOT COMPANY LLC
NORTHLAKE BOOT COMPANY LLC
LEHIGH SAFETY SHOE CO. LLC
LEHIGH SAFETY SHOE PROPERTIES LLC
By: /s/ Xxxxx X. XxXxxxxx
----------------------------
Name: Xxxxx X. XxXxxxxx
Title: Chief Financial Officer
of each of the foregoing Borrowers
GMAC COMMERCIAL FINANCE LLC
By: /s/ Xxxxxx Xxxxx
----------------------------
Name: Xxxxxx Xxxxx
Title: Director
BANK OF AMERICA, N.A.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
CHARTER ONE BANK, N.A.
By: /s/ Xxxx X. XxXxxxxx
---------------------------
Name: Xxxx X. XxXxxxxx
Title: Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxxxx
----------------------------
Name: Xxxxx Xxxxxxxxx
Title: A.V.P.
COMERICA BANK
By: /s/ Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: V.P.
