EXHIBIT 10.11
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT is dated as of April 2, 1998
(this "Agreement"), by and among (a) THE CASUAL MALE, INC. ("Casual Male"), TCM
HOLDING CO., INC. ("TCM"), WGS CORP. ("WGS") and TCMB&T, INC. ("TCMB&T" and,
together with Casual Male, TCM and WGS, the "Borrowers" and each, singularly, a
"Borrower"), (b) ▇. ▇▇▇▇▇, INC. (the "Guarantor"), (c) FLEET NATIONAL BANK
("Fleet"), BANKBOSTON, N.A. ("BankBoston") and each of the other lending
institutions party to the Credit Agreement (as hereinafter defined)
(collectively, the "Lenders" and each singularly, a "Lender"), (d) Fleet as
Administrative Agent for itself and the other Lenders (in such capacity, the
"Administrative Agent"), and (e) BankBoston as Documentation Agent for itself
and the other Lenders (in such capacity, the "Documentation Agent" and together
with the Administrative Agent, collectively, the "Agents").
WHEREAS, the Borrowers, the Guarantor, the Lenders and the Agents are
parties to a Credit Agreement dated as of May 30, 1997 (as amended, supplemented
or modified and in effect from time to time, the "Credit Agreement")
(capitalized terms used but not defined in this Agreement having the meanings
specified for such terms in the Credit Agreement);
WHEREAS, the Total Commitment, as in effect on the Closing Date as
reflected on Schedule 1 to the Credit Agreement (as such Schedule was in effect
prior to giving effect to this Agreement), was automatically reduced to
$90,000,000 pursuant to the terms of Section 2.4 of the Credit Agreement (as
such Section 2.4 was in effect prior to giving effect to this Agreement);
WHEREAS, the Borrowers and the Guarantor have requested that the Agents
and the Lenders agree to amend the Credit Agreement (including Schedule 1 and
Schedule 2 thereto) in order (i) to increase the Total Commitment to $95,000,000
(as such amount shall be reduced, terminated or otherwise modified pursuant to
the terms of the Credit Agreement as amended and in effect from time to time)
and to amend the schedule of automatic reductions in the Total Commitment, (ii)
to amend the financial covenants contained in Section 10 of the Credit Agreement
in certain respects, and (iii) to amend the definition of Applicable Margin in
certain respects, in each case as provided more fully herein; and
WHEREAS, the Agents and the Lenders are willing to agree to such
amendments to the Credit Agreement, upon the terms and subject to the conditions
contained herein;
NOW, THEREFORE, for valuable consideration, receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Amendment to the Credit Agreement. The Credit Agreement is hereby
amended as set forth below:
(a) Mandatory Reduction of Total Commitment. Section 2.4 of the Credit
Agreement is hereby amended and restated to read in its entirety as
follows:
"ss.2.4. Mandatory Reduction of Total Commitment. On each of
the dates set forth in the table below (each such date being hereinafter
referred to as a "Commitment Reduction Date"), the Total Commitment shall be
automatically reduced by the amount (the "Reduction Amount") set forth opposite
such date in the column headed "Reduction Amount" set forth below, to the amount
set forth opposite such date in the column headed "Total Commitment" set forth
below:
Date Reduction Amount Total Commitment
December 31, 1998 $10,000,000 $85,000,000
December 31, 1999 $10,000,000 $75,000,000"
(b) Fixed Charge Coverage Ratio. Section 10.1 of the Credit Agreement is hereby
amended and restated to read in its entirety as follows:
"ss.10.1. Fixed Charge Coverage Ratio. The Borrowers will not
permit the Fixed Charge Coverage Ratio at the end of any fiscal quarter ending
during any period described below to be less than the ratio set forth opposite
such period below:
Period Ratio
------ -----
Fiscal quarter ending May 3, 1997 1.00 to 1
Two consecutive fiscal quarters ending August 2, 1997 1.00 to 1
Three consecutive fiscal quarters ending November 1, 1997 1.00 to 1
Each period of four consecutive fiscal quarters ending thereafter 1.25 to 1"
(c) Leverage Ratio. Section 10.2 of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
"ss.10.2. Leverage Ratio. The Borrowers will not permit the Leverage Ratio as at
the end of any fiscal quarter ending during any period described below to
be greater than the ratio set forth opposite such period below:
Period Ratio
Fiscal quarter ended January 31, 1998 3.00 to 1
February 1, 1998 through October 31, 1998 3.75 to 1
November 1, 1998 through January 30, 1999 2.75 to 1
January 31, 1999 through October 30, 1999 3.50 to 1
October 31, 1999 through January 29, 2000 2.25 to 1
January 30, 2000 and thereafter 3.00 to 1"
(d) Capital Expenditures; Capitalized Leases. Section 10.5 of the Credit
Agreement is hereby amended and restated to read in its entirety as
follows:
"ss.10.5. Capital Expenditures; Capitalized Leases. None of
the Apparel Obligors will make Capital Expenditures plus Capitalized Lease
expenditures (including the "face amount" of Capitalized Leases) that exceed,
in the aggregate for all Apparel Obligors (a) $9,000,000 in the aggregate
during the fiscal year of the Borrowers ending January 31, 1998, (b)
$8,000,000 in the aggregate during the fiscal year of the Borrowers ending
January 30, 1999, and (c) $9,000,000 in the aggregate during the fiscal year
of the Borrower ending January 29, 2000."
(e) Schedule 1 to Credit Agreement. Schedule 1 to the Credit Agreement
is hereby amended and restated in its entirety and shall be replaced by the
Schedule 1 attached hereto.
(f) Schedule 2 to Credit Agreement. Schedule 2 to the Credit Agreement
is hereby amended by amending and restating the definition of "Applicable
Margin" set forth in such Schedule to read in its entirety as follows:
"Applicable Margin. With respect to any Loan, at any time after
January 31, 1998, the Applicable Margin shall be the interest rate margin
determined by the Administrative Agent based upon the Leverage Ratio as of
the last day of the fiscal quarter immediately preceding any date of
determination, effective as of the fifth Business Day after the financial
statements referred to in Section 8.4 hereof have been or, if earlier, are
required to be furnished by the Borrowers to the Administrative Agent and
each Lender for such immediately preceding fiscal quarter, expressed as a
per annum rate of interest, in each case as set forth (a) with respect to
such Leverage Ratio as of the last day of any of the first three fiscal
quarters of any fiscal year, in table 1 below, and (b) with respect to such
Leverage Ratio as of the last day of the last fiscal quarter of any fiscal
year, in table 2 below:
Table 1 (first three fiscal quarters):
Base Rate LIBOR Rate
Applicable Applicable Facility
Level Leverage Ratio Margin Margin Fee Rate
----- -------------- ---------- ---------- ---------
But
Less Than Greater
Or Equal To Than
----------- -----
Level 1 2.75:1 -- 0.25% 1.500% .50%
▇▇▇▇▇ ▇ 3.25:1 2.75:1 0.75% 2.00% .50%
▇▇▇▇▇ ▇ -- 3.25:1 1.25% 2.50% .50%
Table 2 (last fiscal quarter):
Base Rate LIBOR Rate
Applicable Applicable Facility
Level Leverage Ratio Margin Margin Fee Rate
----- -------------- --------- ---------- --------
But
Less Than Greater
Or Equal To Than
Level 1 1.75:1 -- 0.25% 1.500% .50%
▇▇▇▇▇ ▇ 2.50:1 1.75:1 0.75% 2.00% .50%
▇▇▇▇▇ ▇ -- 2.50:1 1.25% 2.50% .50%
provided, however, that, in the event that any Borrower fails to timely
provide the financial statements referred to above in accordance with the terms
of Section 8.4 hereof, and without prejudice to any additional rights under
Section 14.3 hereof, no downward adjustment of the Applicable Margin shall occur
until the second Business Day after the actual delivery of such statements. From
April 3, 1998 until the date of delivery of the financial statements for the
fiscal quarter ending on January 31, 1998 pursuant to Section 8.4(a), the
Leverage Ratio shall be deemed to be at Level 3 as set forth in table 2 above."
Section 2. Conditions to Effectiveness. This Agreement shall become
effective (the date of such effectiveness being referred to hereinafter as the
"Effective Date") on the date on which each of the following conditions
precedent is satisfied:
(a) the Administrative Agent shall have received copies of this
Agreement bearing the signature of each of the Borrowers, the Guarantor,
the Agents and the Lenders;
(b) the Administrative Agent shall have received from each of the
Apparel Obligors a certificate signed by a duly authorized officer of such
Person to the effect that its certificate or articles of incorporation or
organization and its by-laws, in each case as previously delivered to the
Administrative Agent on or prior to the Closing Date, have not been amended
or modified and remain in full force and effect;
(c) all corporate action necessary for the valid execution, delivery
and performance by each Apparel Obligor of this Agreement and the other
Loan Documents to which it is or is to become a party shall have been duly
and effectively taken, and evidence thereof satisfactory to the Agents
shall have been provided to the Administrative Agent;
(d) the Administrative Agent shall have received from each of the
Apparel Obligors an incumbency certificate signed by a duly authorized
officer of such Person and giving the name and bearing a specimen signature
of each individual who shall be authorized: (i) to sign, in the name and on
behalf of Person, this Agreement and each of the Loan Documents to which
such Person is or is to become a party, (ii) in the case of each Borrower,
to make Loan Requests and apply for Credit Instruments, and (iii) to give
notices and to take other action on such Persons' behalf under the Loan
Documents;
(e) the Administrative Agent shall have received from each of the
Apparel Obligors a certificate of good standing as of a recent date from
the Secretary of State (or similar applicable governmental authority) of
its state of organization;
(f) the Administrative Agent shall have received a favorable legal
opinion, addressed to the Lenders and the Agents and in form and substance
satisfactory to the Lenders and the Agents, from ▇▇▇▇▇▇▇, Procter & ▇▇▇▇
LLP, counsel to the Obligors;
(g) the Obligors shall have paid or reimbursed the Administrative
Agent for all of the fees and disbursements of ▇▇▇▇▇▇▇ ▇▇▇▇ LLP, the
Administrative Agent's special counsel, which shall have been incurred by
the Administrative Agent in connection with the preparation, negotiation,
execution and delivery of this Agreement and the implementation of the
transactions contemplated thereby, or which otherwise are required to be
paid under the Credit Agreement;
(h) the Apparel Obligors shall have paid to the Administrative Agent
an amendment fee in the aggregate amount of $275,000, such fee to be for
the ratable accounts of the Lenders in accordance with their respective
Commitment Percentages;
(i) the Administrative Agent shall have received evidence satisfactory
to it that all of the Obligations constitute "Senior Indebtedness," "Senior
Debt," or "Superior Indebtedness" under the Subordinated Debt;
(j) the representations and warranties of the Apparel Obligors set
forth in Section 3 below, shall be true and correct in every respect; and
(k) the Administrative Agent shall receive such other documents and
writings as the Administrative Agent may reasonably determine necessary to
effect the transactions contemplated hereby.
Notwithstanding anything in this Agreement to the contrary, should the
Effective Date not occur on or before April 3, 1998, this Agreement shall be
null and void and of no force or effect.
Section 3. Representations and Warranties. By its signature hereto,
each of the Borrowers and the Guarantor represents and warrants to the Lenders
and the Agents that, as of the date hereof and after giving effect to the
agreements of the Lenders contemplated by Section 1 hereof:
(a) This Agreement has been duly executed and delivered by each of the
Borrowers and the Guarantor. The agreements and obligations of each of the
Borrowers and the Guarantor contained herein constitute legal, valid and
binding obligations of each such Person enforceable against such Person in
accordance with their respective terms.
(b) The execution, delivery and performance by the Borrowers and the
Guarantor of this Agreement and the transactions contemplated hereby are
within the corporate authority of each such Person, have been duly
authorized by proper corporate proceedings, do not and will not contravene
any contractual obligation of such Person or any applicable law, and do not
and will not result in or require the creation or imposition of any Lien on
any property of such Person, other than Liens in favor of the
Administrative Agent on behalf of the Lenders.
(c) The representations and warranties of the Apparel Obligors
contained in the Credit Agreement (i) were true and correct when made and
(ii) after giving effect to this Agreement, continue to be true and correct
on the date hereof (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement, as amended
hereby, and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent
that such representations and warranties relate expressly to an earlier
date).
(d) No Default or Event of Default has occurred, is continuing or will
exist under the Credit Agreement or any of the other Loan Documents after
giving effect to this Agreement.
(e) All of the Apparel Obligors' obligations and liabilities to the
Agents and the Lenders as evidenced by or otherwise arising under the
Credit Agreement or any of the other Loan Documents are hereby ratified and
confirmed in all respects, and no counterclaim, right of set-off or defense
of any kind exists or is outstanding with respect to such obligations and
liabilities.
Section 4. Miscellaneous.
(a) No Other Amendments, Etc. Except as expressly set forth in this
Agreement, this Agreement shall not, by implication or otherwise, limit,
impair, constitute a waiver of or otherwise affect any rights or remedies
of the Agents or the Lenders under the Credit Agreement or the other Loan
Documents, nor alter, modify, amend or in any way affect any of the terms,
obligations or covenants contained in the Credit Agreement or the other
Loan Documents, all of which are ratified and confirmed on and as of the
date hereof in all respects and shall continue in full force and effect. In
the event of any conflict between the terms of this Agreement and the terms
of the Credit Agreement, the terms of this Agreement shall control.
(b) Counterparts, Etc. This Agreement may be executed in any number of
counterparts, but all of such counterparts shall together constitute but
one and the same agreement. In making proof of this Agreement, it shall not
be necessary to produce or account for more than one such counterpart.
Delivery of an executed counterpart of a signature page by facsimile
transmission shall be effective as delivery of a manually executed
counterpart of this Agreement.
(c) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of each of the parties hereto and their respective
successors in title and assigns.
(d) Governing Law, Etc. This Agreement and the respective rights and
obligations hereunder of each of the parties hereto shall be governed by
and interpreted and determined in accordance with the laws of The
Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
THE CASUAL MALE, INC.
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
TCM HOLDING CO., INC.
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
WGS CORP.
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
TCMB&T, INC.
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
▇. ▇▇▇▇▇, INC.
By: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
FLEET NATIONAL BANK,
individually and as Administrative Agent
By: /s/▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name:
Title: AVP
BANKBOSTON, N.A.,
individually and as Documentation Agent
By: /s/▇▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇▇▇
Name:
Title: Vice President
THE CHASE MANHATTAN BANK
By: /s/▇▇▇▇▇▇▇ ▇▇▇▇▇
Name:
Title: VP
IMPERIAL BANK
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Name:
Title: First V.P.
USTRUST
By: /s/P. ▇▇▇▇▇▇▇ ▇▇▇▇
Name:
Title: ▇.▇.
▇▇▇▇▇▇▇▇▇▇ BANK AND
TRUST COMPANY
By: /s/▇▇▇ ▇. ▇▇▇▇▇▇
Name:
Title: President
BANK POLSKA KASA OPIEKI, S.A.
By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name:
Title: V.P.
/July 16, 1997 /
