AMENDMENT NO. 2 TO AMENDED & RESTATED FINANCING AGREEMENT
Exhibit 10.2
AMENDMENT NO. 2
TO
AMENDED & RESTATED FINANCING AGREEMENT
This Amendment No. 2 to Amended & Restated Financing Agreement (this “Amendment No.
2”) is entered into as of April 20, 2009, 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”), The CIT Group/Commercial Services, Inc., a New York
corporation (“CIT”) (CIT and the financial institutions which are now or hereafter become a
party to the Financing Agreement (as hereafter defined) each a “Lender” and collectively,
“Lenders”), and CIT as agent for Lenders (CIT, 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, 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 amend certain of the terms of the Financing
Agreement as hereinafter set forth. Agent and Lenders have agreed to amend the Financing Agreement
on the terms and conditions set forth below.
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) The definition of the term “Applicable Margin” appearing in Section 1.1 of the Financing
Agreement is hereby amended by amending clause (a) thereof to read in its entirety as follows:
(a) the Revolving Loans, plus 0.75% for Chase Bank Rate Loans and 3.00% for LIBOR
Loans,
(b) The definition of the term “Chase Bank Rate” appearing in Section 1.1 of the Financing
Agreement is hereby amended by inserting the following sentence at the end thereof:
Notwithstanding the foregoing, in no event shall the Chase Bank Rate be less than a
rate of interest per annum equal to one month LIBOR plus 2.50%
(c) The definition of the term “Line of Credit Fee” appearing in Section 1.1 of the Financing
Agreement is hereby amended by deleting the text “$95,000” contained therein and inserting the text
“$150,000” in lieu thereof.
(d) The definition of the term “Permitted Encumbrances” appearing in Section 1.1 of the
Financing Agreement is hereby amended by (x) deleting the word “and” immediately prior to clause
(j) thereof; and (y) by changing the period appearing at the end thereof to a semi-colon and by
inserting the following immediately thereafter:
and (k) liens with respect to certain assets of AMRGI granted to G-III Inc. which
(i) secure the Intercompany AMRGI-GIII Note, (ii) are subordinate to the liens of
the Agent and the Lenders and (iii) have been collaterally assigned to the Agent for
the benefit of the Agent and the Lenders.
(e) The definition of the term “Permitted Indebtedness” appearing in Section 1.1 of the
Financing Agreement is hereby amended by changing the letter of clause “(i)” to “(j)” and by
inserting a new clause “(i)” immediately after clause “(h)” to read as follows:
(i) Swap Contracts entered into with Agent, Lenders and/or Affiliates of Agent or
Lenders;
(f) Section 1.1 of the Financing Agreement is hereby amended by inserting a definition for the
new term “Intercompany AMRGI-GIII Note” in appropriate alphabetical order to read as follows:
“Intercompany AMRGI-GIII Note” shall mean that certain secured subordinated
revolving promissory note dated as of April 20, 2009, executed by AMRGI to the order
of G-III Inc.
(g) Section 7.3 of the Financing Agreement is hereby amended by deleting the table contained
in Subclause (a) thereof in its entirety and inserting the following table in lieu thereof:
Twelve Months Ending | Senior Leverage Ratio | |||
April 30, 2009 |
1.60 to 1.00 | |||
July 31, 2009 |
5.00 to 1.00 | |||
October 31, 2009 |
8.50 to 1.00 | |||
January 31, 2010 |
2.40 to 1.00 | |||
April 30, 2010 |
1.60 to 1.00 |
2
Twelve Months Ending | Senior Leverage Ratio | |||
July 31, 2010 |
5.00 to 1.00 | |||
October 31, 2010 |
8.50 to 1.00 | |||
January 31, 2011 |
2.40 to 1.00 | |||
April 30, 2011 |
1.60 to 1.00 |
(h) Section 7.3 of the Financing Agreement is hereby amended by deleting the table contained
in Subclause (b) thereof in its entirety and inserting the following table in lieu thereof:
Fixed Charge Coverage | ||||
Twelve Months Ending | Ratio | |||
April 30, 2009 |
1.00 to 1.00 | |||
July 31, 2009 |
1.00 to 1.00 | |||
October 31, 2009 |
1.10 to 1.00 | |||
January 31, 2010 |
1.10 to 1.00 | |||
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 |
3. Conditions of Effectiveness. This Amendment No. 2 shall become effective as of the
date hereof upon satisfaction of the following conditions: Agent shall have received:
(a) Fourteen (14) copies of this Amendment No. 2 duly executed by Companies, Agent and
Required Lenders, and consented to by each Guarantor;
(b) An amendment fee in the sum of $200,000 for the pro rata benefit of the Lenders executing
this Amendment No. 2;
(c) A true and correct copy of the Intercompany AMRGI-GIII Note and the Security Agreement
pursuant to which G-III Inc. has been granted a security interest in certain assets of AMRGI as
collateral for the obligations of AMRGI under the Intercompany AMRGI-GIII Note, each of which shall
be in form and substance reasonably satisfactory to Agent and its counsel;
(d) Six (6) copies of a duly executed collateral assignment in favor of Agent, in form and
substance satisfactory to Agent, with respect to (i) the Intercompany AMRGI-GIII Note and (ii) the
subordinated lien in favor of G-III Inc. securing the obligations of AMGRI under the Intercompany
AMRGI-GIII Note;
(e) Six (6) copies of a duly executed Subordination and Intercreditor Agreement by and among
Agent, AMRGI and G-III Inc. with respect to the Intercompany AMRGI-GIII Note and the subordinated
lien in favor of G-III Inc. securing the obligations of
3
AMGRI under the Intercompany AMRGI-GIII
Note and the related Security Agreement, in form and substance satisfactory to Agent and its
counsel; and
(f) 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. 2, 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.
(b) Upon the effectiveness of this Amendment No. 2, each Company and each Guarantor hereby
reaffirms all covenants, representations and warranties made in the Financing Agreement and the
other Loan Documents and agree 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. 2, after giving effect to this Amendment No. 2, 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. 2 and to perform its obligations hereunder. This Amendment No. 2
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. 2.
(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.
4
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. 2 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. 2 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.
7. Headings. Section headings in this Amendment No. 2 are included herein for
convenience of reference only and shall not constitute a part of this Amendment No. 2 for any other
purpose.
8. Counterparts; Facsimile. This Amendment No. 2 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.
[balance of page intentionally left blank]
[signature pages follow]
5
IN WITNESS WHEREOF, this Amendment No. 2 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: Name: |
/s/ Xxxx X. Xxxxxxx
|
|||||
Title: | Vice President – Finance | |||||
X. XXXXX FOR XXXXXX XXXXXXXX, LTD., as a Company | ||||||
By: Name: |
/s/ Xxxx X. Xxxxxxx
|
|||||
Title: | Secretary | |||||
CK OUTERWEAR, LLC, as a Company | ||||||
By: Name: |
/s/ Xxxx X. Xxxxxxx
|
|||||
Title: | Secretary | |||||
A. MARC & CO., INC., as a Company | ||||||
By: | /s/ Xxxx X. Xxxxxxx | |||||
Name: | Xxxx X. Xxxxxxx | |||||
Title: | Vice President – Finance and Secretary | |||||
XXXXXX & XXXXXXX COMPANY INC., as a Company | ||||||
By: | /s/ Xxxx X. Xxxxxxx | |||||
Name: | Xxxx X. Xxxxxxx | |||||
Title: | Vice President – Finance and Secretary |
AM RETAIL GROUP, INC., as a Company | ||||||
By: Name: |
/s/ Xxxxxxx Xxxxx
|
|||||
Title: | Controller and Vice President | |||||
THE CIT GROUP/COMMERCIAL SERVICES, INC., as Agent and Lender |
||||||
By: Name: |
/s/ Xxxxxx X. Xxxxxx
|
|||||
Title: | Senior Vice President | |||||
HSBC BANK USA, NATIONAL ASSOCIATION, as Lender | ||||||
By: Name: |
/s/ Xxxxxxx X. Xxxxxxxx, Xx.
|
|||||
Title: | Vice President | |||||
SOVEREIGN BANK, as Lender | ||||||
By: Name: |
/s/ Xxxxxxx Xxxxx
|
|||||
Title: | Senior Vice President | |||||
ISRAEL DISCOUNT BANK OF NEW YORK, as Lender | ||||||
By: Name: |
/s/ Xxxxxx Commander
|
|||||
Title: | Senior Vice President | |||||
By: Name: |
/s/ Xxxxxx Xxxxxxxxxxx
|
|||||
Title: | Senior Vice President |
COMMERCE BANK, N.A., as Lender | ||||||
By: Name: |
/s/ Xxxxxx Xxxxx
|
|||||
Title: | Vice President | |||||
SIGNATURE BANK, as Lender | ||||||
By: Name: |
/s/ Xxxxxx X. Xxxxx
|
|||||
Title: | Senior Vice President | |||||
BANK LEUMI USA, as Lender | ||||||
By: Name: |
/s/ Xxxx Xxxxxxxxxxx
|
|||||
Title: | Senior Vice President | |||||
By: Name: |
/s/ Xxxx Xxxxxxxxxx
|
|||||
Title: | Vice President | |||||
XXXXXXX BUSINESS CREDIT, as Lender | ||||||
By: Name: |
/s/ Xxxxxx Xxxxx
|
|||||
Title: | Vice President | |||||
JPMORGAN CHASE BANK, N.A., as Lender | ||||||
By: Name: |
/s/ Xxxxx X’Xxxxxx
|
|||||
Title: | Vice President |
BANK OF AMERICA, N.A., as Lender | ||||||
By: Name: |
/s/ Xxxxx Xxxxxxxxx
|
|||||
Title: | Senior Vice President | |||||
WACHOVIA BANK, N.A., as Lender | ||||||
By: Name: |
/s/ Xxxxxx Xxxxxxx
|
|||||
Title: | Senior Vice President | |||||
ACKNOWLEDGED AND AGREED TO BY EACH OF THE GUARANTORS: |
||||||
G-III APPAREL GROUP, LTD. | ||||||
By: Name: |
/s/ Xxxx X. Xxxxxxx |
|||||
Title: | Chief Financial Officer and Treasurer | |||||
G-III RETAIL OUTLETS INC. | ||||||
By: Name: |
/s/ Xxxx X. Xxxxxxx
|
|||||
Title: | Vice President – Finance | |||||
G-III LICENSE COMPANY, LLC | ||||||
By: G-III Apparel Group, Ltd. | ||||||
By: | /s/ Xxxx X. Xxxxxxx
|
|||||
Name: | Xxxx X. Xxxxxxx | |||||
Title: | Chief Financial Officer & Treasurer |
G-III BRANDS, LTD. | ||||||
By: Name: |
/s/ Xxxx X. Xxxxxxx
|
|||||
Title: | Vice President – Finance | |||||
AM APPAREL HOLDINGS, INC. | ||||||
By: Name: |
/s/ Xxxxxxx Xxxxx
|
|||||
Title: | Treasurer | |||||
ASH RETAIL CORP. | ||||||
By: Name: |
/s/ Xxxxxxx Xxxxx
|
|||||
Title: | Treasurer | |||||
ASH RETAIL OF EASTHAMPTON, INC. | ||||||
By: Name: |
/s/ Xxxxxxx Xxxxx
|
|||||
Title: | Treasurer |