AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, dated as of September 11, 1998 to the Loan Agreement,
dated as of September 2, 1998 (the "Loan Agreement") among The North Face,
Inc. ("TNFI"), The North Face (Europe) Limited ("TNFE") and The North Face,
Hong Kong, Limited ("TNFHK"), and together with TNFI and TNFE, the
"Borrowers"), The Industrial Bank of Japan, Limited, New York Branch as
Syndication Agent and Documentation Agent and Lender IBJ Xxxxxxxx Business
Credit Corporation as Administrative Agent, Collateral Agent and Lender 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.
The parties hereto have agreed to certain amendments to the Loan Agreement
NOW THEREFORE, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE LOAN AGREEMENT
1.1 The definition of "L/C Issuing Bank" is amended in its entirety to read
as follows:
""L/C Issuing Bank" means Banque Nationale de Paris or any other
legally authorized Person selected by Administrative Agent, which is
reasonably acceptable to TNFI."
1.2 The definition of "Collateral Documents" is amended by inserting the
phrase "each Canadian Document" after the word "Mortgage" in the third line
thereof.
1.3 The definition of "Applicable Available Maximum Revolving Loan Amount"
is amended in its entirety to read as follows:
"Applicable Available Maximum Revolving Loan Amount means the TNFI
Maximum Available Revolving Loan Amount, the TNFE Maximum Available Revolving
Loan Amount and the TNFHK Maximum Available Revolving Loan Amount, as
applicable."
1.4 The definition of "Requisite Lenders" is amended in its entirety to
read as follows:
"Requisite Lenders" means Lenders having (i) if no Commitments have
been terminated, fifty-one percent (51%) or more of the Total Loan Commitments
or, (ii) if the Term Loan Commitments (but not the Revolving Loan Commitments)
have been terminated, fifty-one percent (51%) or more of the sum of the
Revolving Loan Commitments and the aggregate outstanding principal amount of
the Terms Loans, if any, or (iii) if all Commitments have been terminated,
fifty-one percent (51%) or more of the aggregate outstanding principal amount
of the Revolving Loan and the Term Loan; provided, however, that at any time at
which there are more than three (3) Lenders party to this Agreement,
"Requisite Lenders" shall mean not less than three (3) Lenders which
collectively meet the requirements of clause (i), (ii) or (iii), whichever is
applicable, of this definition.
1.5 The fifth line of Section 2.1(C)(2)(ii) is amended by deleting the
number "(2)" where it appears therein and inserting the number "(3)" in its
place.
1.6 Section 2.1(E)(4) is amended by adding the following sentence to the
end thereof:
"Administrative Agent shall confirm to the relevant L/C Issuing Bank in
the notice whether the requested Lender Letter of Credit would exceed the
Applicable Available Maximum Revolving Loan Amount"; the TNFI Maximum
Available Revolving Loan Amount; the TNFE Maximum Available Revolving Loan
Amount; the TNFHK Maximum Available Revolving Loan Amount; or the TNFI
Borrowing Limit.
1.7 The first line of Section 2.4(B)(2)(d) is amended by deleting the
letter "(A)" where it appears therein and inserting the letter "(B)" in its
place.
1.8 Section 3.2(G) is amended by deleting the term "Regulation G" where it
appears therein.
1.9 Section 6.1 is amended by deleting the number "sixty million dollars
($60,000,000)" in the second line thereof and replacing it with the phrase
"seventy two million dollars ($72,000,000) minus any additional good will
adjustments for the acquisition of La Sportiva Italy and La Sportiva USA".
Provided that such additional good will adjustments do not exceed $12,000,000.
1.10 Section 6.5 is amended in its entirety to read as follows:
"The Senior Leverage Ratio at the end of each quarter of a Fiscal Year
for the rolling four (4) quarter period ending on the last day of each quarter
of a Fiscal Year shall not exceed 2.5:1 for each of the fiscal quarters up to
and including the fiscal quarter ending December 31, 1998, 2.25:1 for each of
the fiscal quarters ending after December 31, 1998 up to and including the
fiscal quarter ending December 31, 1999, 2.0:1 for each of the fiscal quarters
ending after December 31, 1999 up to and including the fiscal quarter ending
December 31, 2000, 1.75:1 for any fiscal quarter ending after December 31,
2000 up to and including the fiscal quarter ending December 31, 2001 and
1.50:1 for any fiscal quarter ending thereafter."
1.11 Section 7.1 is amended by inserting the phrase " and confirmed as
satisfactory by the Requisite Lenders" after the word "Agent" in the sixteenth
line thereof.
1.12 Section 9.1 is amended by adding the following language to the end
thereof:
"Notwithstanding any other provision in this Agreement to the contrary,
any Lender may at any time create a security interest in, or pledge, all or
any portion of its rights under and interest in this Agreement and the Note
held by it in favor of any Federal Reserve Bank in accordance with Regulation
A of the FRB or U.S. Treasury Regulation 31 CFR ?203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law."
1.13 Section 9.3(B) is amended in its entirety to read as follows:
"In the event Administrative Agent requests the consent of a Lender and
does not receive a written denial thereof within ten (10) Business Days after
Administrative Agent has confirmed Lender's receipt of such request, such
Lender will be deemed to have given such consent."
1.14 Section 9.6(A) is amended by deleting the phrase "one-half of one
percent (.50%)" where it appears in the third line from the end thereof and
replacing it with the phrase "three-eights of one percent (.375%)". Section
9.6(A) is further amended by adding the following sentence to the end thereof:
"Notwithstanding anything contained herein to the contrary,
Administrative Agent shall pay to each Lender on the same Business Day for
funds received by 1:00 p.m. New York time and on the following Business Day
for funds received thereafter, such Lenders pro rata portion of such payment
received by Administrative Agent."
1.15 Clause (c) of Section 10.3 is amended in its entirety to read as
follows: "extend the scheduled maturity date of any principal amount due with
respect to any Loan".
SECTION 2. CONDITIONS PRECEDENT
This Amendment Agreement (the "Agreement") shall be effective upon the
execution and delivery of counterparts hereof by the parties listed below and
the fulfilment of the following conditions:
2.1 All representations and warranties contained in this Agreement shall be
true and correct in all material respects.
2.2 No unwaived event shall have occurred and be continuing which
constitutes a Default or an Event of Default.
SECTION 3. MISCELLANEOUS
3.1 Each of the Borrowers reaffirms and restates the representations and
warranties set forth in the Loan Documents, 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 Administrative Agent
that:
(a) Each is a duly organized, validly existing corporation and has
the corporate power and authority to execute, deliver and carry out the terms
and provisions of this Agreement, and has taken or caused to be taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement;
(b) No consent of any other person, and no action of, or filing
with any governmental or public body or authority is required to authorize, or
is otherwise required in connection with the execution, delivery and
performance of this Agreement;
(c) This Agreement has been duly executed and delivered by a duly
authorized officer on behalf of each Borrower and constitutes the legal, 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 principals of equity
(regardless of whether enforcement is sought in a proceeding in equity or at
law); and
(d) The execution, delivery and performance of this Agreement will
not violate any law, statute or regulation applicable to a 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 Except as herein expressly amended, the Loan Agreement and the other
Loan Documents are each ratified and confirmed in all respects and shall
remain in full force and effect in accordance with their respective terms.
3.3 All references to the Loan Agreement in any Loan Document shall mean
the Loan Agreement as amended hereby.
3.4 This 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.
3.5 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 Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first above written.
THE NORTH FACE, INC.
By:..............................
Name:
Title:
THE NORTH FACE, HONG KONG, LIMITED
By:.............................
Name:
Title:
THE NORTH FACE (EUROPE) LIMITED
By:............................
Name:
Title:
