Exhibit (4)(c)(6)
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SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
October 18, 1996, by and between B.B. WALKER COMPANY, a North Carolina
corporation (the "Borrower"), and MELLON BANK, N.A., a national banking
association (the "Lender").
RECITALS
A. The Borrower and the Lender are parties to a certain Credit Agreement
dated as of August 15, 1995 (as amended by the "First Amendment", defined
below, the "Credit Agreement") pursuant to which the Lender established
certain credit facilities for the Borrower in order to provide working
capital financing and to refinance certain existing indebtedness. As a
result of certain Events of Default, the Borrower and the Lender agreed to
amend the Credit Agreement to reduce the amount of the Revolving Credit
Commitment, revise certain financial covenants and amend other terms and
provisions of the Credit Agreement, and therefore entered into the First
Amendment to Credit Agreement dated as of April 15, 1996 ("First Amendment").
Except as otherwise defined herein, capitalized terms used in this Amendment
shall have the same meaning as in the Credit Agreement.
B. Certain additional Events of Default have occurred, as more fully
described in Exhibit A attached hereto.
C. As a consequence of these Events of Default, the Borrower and the
Lender have agreed to amend certain terms and provisions of the Credit
Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained and intending to be legally bound hereby, the
parties hereto agree as follows:
AMENDMENTS
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1. The following additions shall be made to Article 1, Definitions, in
alphabetical order:
"Second Amendment" shall mean the Second Amendment to Credit Agreement,
dated as of October 18, 1996, by and between the Borrower and the
Lender.
"Second Amendment Closing Date" shall mean October 18, 1996.
2. Section 2.06, Interest Rates, shall be amended by deleting Section 2.06
(a) in its entirety and replacing it with the following:
(a) Rate of Interest. The unpaid principal amount of interest of the
Revolving Credit Loans and the Term Loan shall bear interest for
each day until due at the Prime Rate Option plus three quarters of
one percent (3/4%).
3. Section 2.02 (d)(iv) shall be amended by deleting the second sentence of
that Section and replacing it with the following:
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Eligible Receivables shall not include cross-agings Accounts owed by an
obligor if tweny-five percent (25%) or more of such obligor's Accounts
owed to the Borrower are 120 or more days beyond the date of issuance.
4. Section 2.12 (c), Collateral Management Fee, shall be amended by
increasing the quarterly collateral management fee described therein from
$9,000 to $12,000.
5. Section 5.01 (f)(iv) shall be amended by deleting the phrase "monthly
accounts receivable reports (which shall include...", and replacing it
with the phrase "separate monthly accounts recivable reports for the
western boot product line and the work/outdoor product line (which shall
each include...".
6. Article 5, Affirmative Covenants, shall be amended by adding the
following as new Sections 5.15 and 5.16:
5.15. Consultant. As soon as possible, but no later than November 15,
1996, the Borrower shall retain a consultant, who shall be reasonably
acceptable to the Lender, with industry expertise to assist the Borrower
in developing a strategic plan to evaluate, among other things, the
Borrower's marketing efforts, collection procedures, and the future
profitability of the western boot product line, which shall be completed
and delivered to the Lender no later than December 15, 1996.
5.16. Performance According to Projections. The Borrower shall cause
its cash management and accounts payable management to substantially
comply with the projections prepared by the Borrower pursuant to Section
5.01(f) of this Agreement (for the period from Apri1 1, 1996 through
October 31, 1997) and delivered to the Lender.
7. Subsection (g) of Section 6.03, Indebtedness, shall be deleted and
restated in its entirety as follows:
(g) Indebtedness of the Borrower arising from the issuance of unsecured
promissory notes issued to the Borrower's shareholders, provided,
however, (i) the aggregate principal amount of all such notes,
including all existing stockholder notes, shall not exceed
$1,500,000 at any time, (ii) the aggregate principal amount of any
stockholder notes presented for payment in any fiscal quarter shall
not exceed $100,000 per quarter, and (iii) the aggregate principal
amount of any stockholder notes shall not fall below $1,100,000 at
any time. Notwithstanding the foregoing, if the aggregate principal
amount of any stockholder notes falls below $1,200,000 at any time,
the Overadvances provided for in Section 2.02(c) will not be
available to Borrower.
8. Section 6.15, Limitation on Payments of Restricted Indebtedness, shall be
amended by deleting the phrase at the end of that section "except for
payments on account of Indebtedness allowed pursuant to Section 6.03",
and replacing it with the phrase "except for payments on account of
Indebtedness allowed pursuant to Sections 6.03(a),(d),(e),(f) and (g) and
on account of Indebtedness incurred in the PIDA Loan Transaction and the
EDP Loan Transaction".
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REPRESENTATIONS AND WARRANTIES
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9. Other Representations and Warranties. Each of the representations and
warranties (as amended hereby) made by the Borrower in Article 3 of the
Credit Agreement are true and correct on and as of the Second Amendment
Closing Date and are incorporated herein as though fully set forth.
CONDITIONS PRECEDENT
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10. Conditions to Effectiveness of this Amendment. The obligation of the
Lender to enter into this Amendment is subject to the satisfaction,
immediately prior to or concurrently with the execution of the
Amendment, of the following conditions precedent:
(a) Corporate Proceedings. The Lender shall have received certificates
by the Secretary or Assistant Secretary of the Borrower dated as of
the Second Amendment Closing Date as to (i) true copies of the
articles of incorporation and by-laws (or other constituent
documents) of the Borrower in effect on such date (which, in the
case of articles of incorporation or other constituent documents
filed or required to be filed with the Secretary of State or other
Governmental Authority in its jurisdiction of incorporation, shall
be certified to be true, correct and complete by such Secretary of
State or other Governmental Authority not more than thirty (30) days
before the date of this Amendment), (ii) true copies of all
corporate action taken by the Borrower relative to this Amendment
and the other Amendment Documents and (iii) the incumbency and
signature of the respective officers of the Borrower executing this
Amendment and the other Amendment Documents, together with
satisfactory evidence of the incumbency of such Secretary or
Assistant Secretary. The Lender shall have received certificates
from the appropriate Secretaries of State or other applicable
Governmental Authorities dated October 4, 1996 showing the good
standing of the Borrower in its state of incorporation and each
state in which the Borrower does business, if applicable in such
state.
(b) Officers' Certificates. The Lender shall have received certificates
from such officers of the Borrower in the form of Exhibit C attached
hereto.
(c) Fees, Expenses, Etc. All fees and other compensation (including,
without limitation, attorneys' fees) required to be paid to the
Lender pursuant hereto or pursuant to any other written agreement on
or prior to the First Amendment Closing Date shall have been paid or
received.
(d) Other Conditions Precedent. Each of the conditions precedent set
forth in Section 4.02 of the Credit Agreement shall have been met.
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MISCELLANEOUS
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11 Reaffirmation; No Waiver. Except as expressly modified herein, the terms
of the Credit Agreement, the Security Documents and all of the Loan
Documents executed in connection therewith, remain in full force and
effect in accordance with their respective terms and conditions, are in
no manner impaired hereby and, are hereby reaffirmed by all of the
parties. In the event of any conflict between this Amendment and any
other Loan Document, the provisions of this Amendment shall prevail.
12. Fees, Expenses, Etc. Within ten (10) days of receipt of invoice, the
Borrower shall pay all fees and other compensation (including, without
limitation, attorneys' fees, costs of searches, field examination
expenses, filing and recording fees) required to be paid to the Lender
pursuant hereto, pursuant to any Amendment Document or pursuant to any
other written agreement.
13. Severability. The provisions of this Amendment are intended to be
severable. If any provision of this Amendment shall be held invalid or
unenforceable in whole or in part in any jurisdiction such provision
shall, as to such jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without in any manner affecting the
validity or enforceability thereof in any other jurisdiction or the
remaining provisions hereof in any jurisdiction.
14. Prior Understandings. This Amendment and the other Amendment Documents
supersede all prior and contemporaneous understandings and agreements,
whether written or oral, among the parties hereto relating to the
transactions provided for herein and therein.
15. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate
counterparts each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the
same instrument.
16. Successors and Assigns. This Amendment shall be binding upon and inure
to the benefit of the Borrower, the Lender, all future holders of the
Notes, and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights hereunder or
interests herein without the prior written consent of the Lender, and
any purported assignment without such consent shall be void.
17. Governing Law. THIS AMENDMENT AND ALL OTHER AMENDMENT DOCUMENTS (EXCEPT
TO THE EXTENT, IF ANY, OTHERWISE EXPRESSLY STATED IN SUCH OTHER
AMENDMENT DOCUMENTS) SHALL BE GOVERNED BY, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF PENNSYLVANIA, WITHOUT REGARD TO
CHOICE OF LAW PRINCIPLES.
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IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this Amendment as of the date first
above written.
ATTEST: B.B. WALKER COMPANY
By: DOROTHY W. CRAVEN By: KENT T. ANDERSON
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[Corporate Seal] Kent T. Anderson, President
MELLON BANK, N.A.
By: ROGER D. ATTIX
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Roger D. Attix, Vice President
EXHIBIT A
EVENTS OF DEFAULT
B.B. Walker Company's violation of each of the following covenants, measured
pursuant to its financial statements dated October 28, 1995, constituted a
separate Event of Default under the Credit Agreement dated August 15, 1995 by
and between B.B. Walker Company and Mellon Bank, N.A. (the "Credit
Agreement"):
1) Section 6.01(b) of the Credit Agreement -
Consolidated Leverage Ratio;
2) Section 6.01(c) of the Credit Agreement -
Consolidated Tangible Net Worth; and
3) Section 6.01(e) of the Credit Agreement -
Consolidated Net Income.
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