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EXHIBIT 10.10(d)
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
This Second Amendment to that certain Amended and Restated Loan and
Security Agreement ("Amendment") is made and entered into as of December 23,
1998 by and between Skechers U.S.A., Inc. ("Borrower") and Xxxxxx Financial,
Inc., as Agent and as Lender ("Agent").
WHEREAS, Agent and Borrower are parties to a certain Amended and
Restated Loan and Security Agreement, dated September 4, 1998 and all amendments
thereto (the "Agreement"); and
WHEREAS, Borrower has informed Agent that it intends to repay Term Loan
B in full and requests that Agent cancel the Guaranty and release the cash
collateral pledged to Lender by Guarantor pursuant to the Cash Collateral Pledge
Agreement; and
WHEREAS, Borrower has further requested that Agent consent to Borrower's
incurrence of indebtedness in the amount of $13,250,000 from Guarantor, which
indebtedness shall be evidenced by a subordinated promissory note in the amount
of $10,000,000 which indebtedness shall be subordinated to Agent pursuant to the
terms of a subordination agreement and a promissory note in the amount of
$3,250,000 (the "Xxxxxxxxx Note") which note shall not be subordinated; and
WHEREAS, Agent and Lenders have agreed to cancel the Guaranty and
release the cash collateral pledged by Guarantor, and Agent and Lenders have
further agreed to the incurrence by Borrower of $13,250,000 of indebtedness; and
WHEREAS, the parties desire to amend the Agreement as hereinafter set
forth;
NOW THEREFORE, in consideration of the mutual conditions and agreements
set forth in the Agreement and this Amendment, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. DEFINITIONS. Capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such term in the
Agreement.
2. AMENDMENTS. Subject to the conditions set forth the below, the
Agreement is amended as follows:
(a) The definition of "Tangible Net Worth" is amended by
deleting the definition of "Tangible Net Worth" in its entirety and inserting
the following in lieu thereof:
"Tangible Net Worth" of any Person means as of any date, an
amount equal to: (a) Net Worth of such Person; less (b)
Intangible Assets of such Person; less (c) prepaid expenses of
such Person in excess of $250,000; less (d) all obligations owed
to such Person by any Affiliate of such Person or any of its
Subsidiaries; and less (e) all loans by such Person to its
officers, stockholders, Subsidiaries or employees (determined in
each case in conformity with GAAP) plus (f) the outstanding
amount of Subordinated Debt.
(b) The definition of "Loan Documents" is amended by
deleting the definition of "Loan Documents" in its entirety and inserting the
following in lieu thereof:
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"Loan Documents" means this Agreement, the Subsidiary Guaranty,
the Subordination Agreement and all other documents, instruments
and agreements executed by or on behalf of Borrower, Borrower's
Subsidiaries or any Subsidiary Guaranty or any Guarantor and
delivered concurrently herewith or at any time hereafter to or
for Agent or any Lender in connection with the Loans, any Agent
Letter of Credit, and any other transaction contemplated by this
Agreement, all as amended, restated, supplemented or modified
from time to time.
(c) Section 11.1 is amended by inserting the following
definitions of "Subordination Agreement," "Xxxxxxxxx Note" and "Subordinated
Debt" in the proper alphabetical order in Section 11.1 of the Agreement:
"Xxxxxxxxx Note" means that certain promissory note evidencing
the obligations of Borrower to the Xxxxxxxxx Family Trust in the
original principal amount of $3,250,000 dated December 22,
1998.
"Subordination Agreement" means that certain subordination
agreement dated as of December 23, 1998 by and among, Agent,
Borrower and Xxxxxx X. Xxxxxxxxx and Xxxxx X. Xxxxxxxxx,
Trustees of the Xxxxxxxxx Family Trust dated May 3, 1988, as
amended from time to time.
"Subordinated Debt" means the indebtedness incurred by Borrower
pursuant to that certain subordinated promissory note dated
December 22, 1998 in the original principal amount of
$10,000,000 in favor of Xxxxxx X. Xxxxxxxxx and Xxxxx X.
Xxxxxxxxx, Trustees of the Xxxxxxxxx Family Trust dated May 3,
1988 as amended.
(d) The first sentence of subsection 7.1 is amended by
deleting the same in its entirety and inserting the following in lieu thereof:
"Directly or indirectly create, incur, assume, guaranty, or
otherwise become or remain directly or indirectly liable, on a
fixed or contingent basis, with respect to any Indebtedness
except: (a) the Obligations; (b) Indebtedness under Capital
Leases not to exceed $12,000,000 outstanding at any time in the
aggregate; (c) Indebtedness existing on the Closing Date and
identified on Schedule 7.1; (d) the Subordinated Debt; and (e)
the indebtedness outstanding under the Xxxxxxxxx Note.
(e) Subsection 7.5(c) is amended by deleting the same in
its entirety and inserting the following in lieu thereof:
"Borrower may make distributions and or dividends to its
shareholders provided that (i) Borrower shall have first given
Agent notice of its intention to make such distribution or
dividend and (ii) Borrower shall be in compliance with the terms
and conditions of the Loan Documents both prior to making such
distribution or dividend and after giving effect to such
distribution or dividend (including Borrower's compliance with
the financial covenants calculated through the date of such
payment) and Borrower shall have delivered a Compliance
Certificate to Agent demonstrating such compliance, not later
than two (2) Business Days before making such distribution or
dividend. Borrower may make principle payments on the
Subordinated Debt in accordance with the Subordination Agreement
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provided that (i) Borrower shall have paid in full the Xxxxxxxxx
Note; (ii) Borrower shall have first given Agent notice of its
intention to make such payment and (iii) Borrower shall be in
compliance with the terms and conditions of the Loan Documents
both prior to making such payment and after giving effect to
such payment (including Borrower's compliance with the financial
covenants calculated through the date of such payment) and
Borrower shall have delivered a Compliance Certificate to Agent
demonstrating such compliance, not later than two (2) Business
Days before making such payment."
3. CONDITIONS. The effectiveness of this Amendment is subject to
the following conditions precedent (unless specifically waived in writing by
Agent):
(a) There shall have occurred no material adverse change in
the business, operations, financial condition, profits or prospects of Borrower,
or in the Collateral;
(b) Borrower shall have executed and delivered such other
documents and instruments as Agent may require;
(c) All corporate proceedings taken in connection with the
transactions contemplated by this Amendment and all documents, instruments and
other legal matters incident thereto shall be satisfactory to Agent and its
legal counsel;
(d) No Default or Event of Default shall have occurred and
be continuing.
(e) Borrower shall have repaid in full Term Loan B.
4. CORPORATE ACTION. The execution, delivery, and performance of
this Amendment has been duly authorized by all requisite corporate action on the
part of Borrower and this Amendment has been duly executed and delivered by
Borrower.
5. SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
6. SEVERABILITY. Any provision of this Amendment held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Amendment and the effect thereof shall be
confined to the provision so held to be invalid or unenforceable.
7. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall constitute an original, but all of which taken
together shall be one and the same instrument.
8. RATIFICATION. The terms and provisions set forth in this
Amendment shall modify and supersede all inconsistent terms and provisions of
the Agreement and, except as expressly modified and superseded by this
Amendment, the terms and provisions of the Agreement are ratified and confirmed
and shall continue in full force and effect.
9. REFERENCES. Any reference to the Agreement contained in any Loan
Document, or any other notice, request, certificate, or other document executed
concurrently with or after the execution and delivery of this Amendment shall be
deemed to include this Amendment, unless the context shall otherwise require.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.
XXXXXX FINANCIAL, INC., as Agent
and as Lender
By: /s/ XXXX XXXX
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Name: Xxxx Xxxx
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Title: AVP
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SKECHERS U.S.A., INC.
ATTEST:
/s/ XXXXXX X. XXXXXXXX
----------------------------------- By: /s/ XXXXX XXXXXXXX
Secretary --------------------------------------
Name: Xxxxx Xxxxxxxx
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Title: CfO
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CONSENT AND REAFFIRMATION
The undersigned Subsidiary Guarantor of the obligations of Borrower at
any time owing hereby (i) acknowledges receipt of a copy of the foregoing Second
Amendment to Loan and Security Agreement; (ii) consents to Borrower's execution
and delivery thereof; (iii) agrees to be bound thereby; and (iv) affirms that
nothing contained therein shall modify in any respect whatsoever its guaranty of
the obligations and reaffirms that such guaranty is and shall remain in full
force and effect. Although Guarantor has been informed of the matters set forth
herein and has acknowledged and agreed to same, Guarantor understands that Agent
has no obligation to inform the Guarantor of such matters in the future or to
seek Guarantor's acknowledgment or agreement to future amendments or waivers,
and nothing herein shall create such a duty.
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Consent
and Reaffirmation on and as of the date of such Second Amendment to the Loan and
Security Agreement.
SKECHERS BY MAIL, INC.,
a Delaware corporation
By: /s/ XXXXX XXXXXXXX
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Name: Xxxxx Xxxxxxxx
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Title: CFO
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