Exhibit 10.15B
AMENDMENT AND WAIVER AGREEMENT
AMENDMENT AND WAIVER AGREEMENT, dated as of August 13, 1999, to the Loan
Agreement dated as of September 2, 1998 (as amended to date, and as the same may
be further amended, supplemented, restated or modified from time-to-time in
accordance with its terms, the "Loan Agreement") among The North Face, Inc.
("TNFI"), The North Face (Europe) Limited ("TNFE") and The North Face Hong Kong,
Limited ("THFHK") and together with TNFI and TNFHK, each a "Borrower" and
collectively, the "Borrowers"), The Industrial Bank of Japan, Limited, New York
Branch as Syndication Agent and Documentation Agent, IBJ Whitehall Business
Credit Corporation (formerly known as IBJ Xxxxxxxx Business Credit Corporation)
as Administrative Agent and Collateral Agent and the financial institutions
parties thereto from time-to-time. Capitalized terms used but not defined herein
have the meanings given such terms in the Loan Agreement.
WHEREAS, the Borrowers are in violation of Sections 6.2, 6.4, 6.5 and 6.6 for
each of the fiscal quarters ending March 31, 1999 and June 30, 1999 (such
violations, collectively referred to as the "Financial Covenant Violations").
WHEREAS, the Borrowers have requested and the Lenders and the Administrative
Agent have agreed to certain waivers and amendments to the Loan Agreement.
NOW THEREFORE, for valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto agree as follows:
1. WAIVER
1.1 The Administrative Agent and the Lenders hereby waive each of the
Financial Covenant Violations.
2. AMENDMENTS TO LOAN AGREEMENT
2.1 The Loan Agreement is amended by adding the following definition in its
appropriate alphabetical order in Section 1.1:
"Applicable Commercial Rate Margin" means, as of August 13, 1999, one
percent (1.00%). The Applicable Commercial Rate Margin shall be adjusted
(up or down) prospectively on a quarterly basis based on a rolling four
quarter calculation of the Senior Leverage Ratio as determined based on
Borrowers' quarterly financial statements. Adjustments in the Applicable
Commercial Rate Margin will be determined by reference to the following
grid:
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Level Senior Leverage Ratio Applicable Margin
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1 (greater than)=2.75 1.00%
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2 2.25 - 2.74 0.75%
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3 1.75 - 2.24 0.50%
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4 1.25 - 1.74 0.25%
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5 (less than) 1.25 --
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2.2 The grid contained in the definition of "Applicable Margin" in Section 1.1
of the Loan Agreement is amended in its entirety to read as follows:
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Level Senior Leverage Ratio Applicable Margin
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1 (greater than)=2.75 2.50%
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2 2.25 - 2.74 2.25%
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3 1.75 - 2.24 2.00%
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4 1.25 - 1.74 1.75%
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5 (less than) 1.25 1.50%
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2.3 The definition of "Prime Rate" in Section 1.1 of the Loan Agreement is
amended by deleting the phrase "minus one half of one percent (0.50%)" at
the end of clause (a) thereof, and inserting in its place the phrase "plus
the Applicable Commercial Rate Margin".
2.4 The penultimate paragraph in Section 2.2(A) of the Loan Agreement is
amended by inserting the phrase "and the Applicable Commercial Rate
Margin" immediately after the term "the Applicable Margin" where such term
appears in the first, seventh and ninth lines thereof.
2.5 Section 2.3(B) of the Loan Agreement is amended by deleting the phrase
"three eighths of one percent (.375%)" in the third line from the end of
such section and replacing it with the phrase "one half of one percent
(.500%)".
2.6 Section 6.3 of the Loan Agreement is amended by adding the following
proviso at the end of the first sentence thereof:
"; provided that from August 13, 1999 through December 31, 1999, the
Borrowers shall not, without the prior written approval of the
Administrative Agent, make any Capital Expenditures that the Borrowers had
not committed to make prior to August 13, 1999".
2.7 The Loan Agreement is amended by adding the following as new section 7.17:
"7.17 Restriction on Stock Repurchase. No Borrower shall repurchase any of
its own Common Stock or the Common Stock of any other Borrower".
3. Miscellaneous
3.1 Each of the Borrowers reaffirms and restates the representations and
warranties set forth in the Loan Agreement, as applicable, and all such
representations and warranties shall be true and correct on the date
hereof with the same force and effect as if made on such date. Each of the
Borrowers represents and warrants as to itself (which representations and
warranties shall survive the execution and delivery hereof) to the Agent
that:
(a) This Amendment and Waiver Agreement has been duly executed and
delivered by a duly authorized officer on behalf of each of the
Borrowers, and constitutes the legal,
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valid and binding obligations of each, enforceable in accordance with
its terms, except as enforcement thereof may be subject to the effect
of any applicable (i) bankruptcy, insolvency, reorganization,
moratorium or similar law affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether enforcement
is sought in a proceeding in equity or at law); and
(b) The execution, delivery and performance of this Amendment and Waiver
Agreement will not violate any law, statute or regulation applicable
to any Borrower, or any order or decree of any court or governmental
instrumentality applicable to such company, or conflict with, or
result in the breach of, or constitute a default under any contractual
obligation of such company.
3.2 Each of the Borrowers hereby irrevocably and unconditionally confirms,
that notwithstanding this Amendment and Waiver Agreement, the Loan
Agreement and the other Loan Documents (including each Collateral
Document) are each ratified and confirmed in all respects and shall remain
in full force and effect in accordance with their respective terms.
3.3 Except as specifically set forth herein, nothing herein contained shall
constitute a waiver or be deemed to be a waiver, of any existing Default
or Event of Default and the Lenders and Administrative Agent reserve all
rights and remedies granted to them by the Loan Agreement, the other Loan
Documents, by law and otherwise.
3.4 All references to the Loan Agreement in any Loan Document shall mean the
Loan Agreement as amended hereby.
3.5 TNFI hereby agrees to pay a waiver fee to the Administrative Agent for the
pro rata benefit of the Lenders in the amount of $162,500. This Amendment
and Waiver Agreement shall not be effective until receipt by the
Administrative Agent of the foregoing waiver fee.
3.6 TNFI hereby agrees to deliver a final and complete financial statement for
the fiscal quarter ending June 30, 1999. The Administrative Agent hereby
acknowledges receipt of the foregoing. In addition, TNFI hereby agrees to
deliver to the Administrative Agent on or before August 31, 1999 a revised
forecast for the remainder of the 1999 Fiscal Year.
3.7 This Amendment and Waiver Agreement may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one and the same
agreement. A facsimile signature page shall constitute an original for the
purposes hereof.
3.8 Borrowers hereby agree in favor of the Administrative Agent and the
Lenders to enter into a further amendment to the Loan Agreement on or
prior to September 30, 1999 which amendment will have the overall effect
of converting the Loan Agreement to what the Administrative Agent and the
Lenders recognize as an asset based loan structure (such amendment, the
"ABL Amendment"). In addition to the foregoing, the ABL Amendment will
require, among other
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things that the Borrowers (i) obtain, at their own cost and expense, an
appraisal of their intellectual property, in form and substance
satisfactory to the Administrative Agent (ii) pay a monthly $5,000
collateral monitoring fee and (iii) enter into lock box agreements
granting dominion over their accounts to the Administrative Agent. In the
interim, the Borrowers agree to conduct monthly telephone updates with the
Administrative Agent and Lenders which updates will include the status of
litigation against any of the Borrowers. The Borrowers further confirm
that the Administrative Agent maintains the right, prior to entering into
the ABL Amendment, to establish reserves in the borrowing limits as the
Administrative Agent deems appropriate in its sole reasonable discretion.
3.9 TNFI, hereby agrees to pay all expenses incurred by the Administrative
Agent in connection with this Amendment and Waiver Agreement including but
not limited to the fees and expenses of Xxxxxxxx Chance, counsel to the
Agent.
3.10 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT
TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver Agreement
to be duly executed as of the date first written above.
THE NORTH FACE, INC.
By:........................................
Name:
Title:
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THE NORTH FACE, (CANADA) INC.
By:........................................
Name:
Title:
THE NORTH FACE, HONG KONG, LIMITED
By:........................................
Name:
Title:
THE NORTH FACE (EUROPE) LIMITED
By:........................................
Name:
Title:
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
as a Lender and as Administrative Agent
and Collateral Agent
By:........................................
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN, LIMITED,
NEW YORK BRANCH, as a Lender and as
Syndication Agent
By:........................................
Name:
Title:
FLEET BANK, N.A.
By:........................................
Name:
Title:
BANK OF AMERICA
By:........................................
Name:
Title:
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BANQUE NATIONALE DE PARIS
By:........................................
Name:
Title:
NORWEST BANK, COLORADO
By:........................................
Name:
Title:
NATIONAL BANK OF CANADA
By:........................................
Name:
Title:
BANK ONE, COLORADO N.A.
By:........................................
Name:
Title:
COMERICA
By:........................................
Name:
Title:
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