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Title: |
Credit Facility Agreement |
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Entities: |
Phoenix Footwear Group, Inc.; Bank of New York; Harris Beach |
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Date: |
2005 |
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Size: |
Preview shows 15KB of 222KB total |
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Price: |
$76 |
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ID: |
#1092479 |
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This CREDIT FACILITY AGREEMENT is made as of the 29th day of June, 2005,
by and among PHOENIX FOOTWEAR GROUP, INC., a corporation formed under the laws
of the State of Delaware ("Borrower") and MANUFACTURERS AND TRADERS TRUST
COMPANY ("Agent"), a New York banking corporation, with offices at 255 East
Avenue, Rochester, New York 14604 as administrative agent for the Lenders, and
each of the LENDERS (defined below).
ARTICLE I - DEFINITIONS
1.1 The following terms shall have the following meanings unless otherwise
expressly stated herein:
"Affiliate" means any Person which directly or indirectly, or through one
or more intermediaries, Controls or is Controlled By or is Under Common Control
with Borrower.
"Agent" means Manufacturers and Traders Trust Company, as administrative
agent for the Lenders, and its successors, legal representatives, and assigns.
"Agent Office" means Manufacturers and Traders Trust Company, 255 East
Avenue, Rochester, New York 14604, Attention: Kevin Wilmot, Corporate Banking,
or if by wire transfer:
M&T Bank
ABA # 022000046
For Credit To Account #8890756722
Telephone Advise: Irene Michaels (585-258-8446)
Reference: Phoenix Footwear Group, Inc.
or to such other location or transfer designation in the United States
designated by the Agent from time to time by written notice to the each of the
Lenders.
"Agreement" means this Credit Facility Agreement, as further amended,
modified or restated from time to time.
"Altama" means Altama Delta Corporation.
"Altama Acquisition Agreement" means the Stock Purchase Agreement dated as
of June 15, 2004 by and among W. Whitlow Wyatt, Altama, and Borrower.
"Altama Business" means the combat boot and related products business
operated by the Credit Parties.
"Altama PR" means Altama Delta (Puerto Rico) Corporation.
"Applicable Margin" means, with respect to the Revolving Line Facility and
the Term Loans, the per annum rates shown in the applicable column of the table
below based on the applicable Average Borrowed Funds to EBITDA Ratio, calculated
for Borrower on a consolidated basis and without duplication in accordance with
GAAP:
Revolver Term Loans
----------------------- ------------------------
Average Borrowed Base Rate Base Rate
Level Funds to EBITDA Margin LIBOR Margin Margin LIBOR Margin
----- --------------------------- --------- ------------ --------- ------------
I > or = 3.50 to 1 0.750% 3.500% 1.250% 4.000%
II < 3.00 and > or = 3.49 to 1 0.375% 3.000% 0.750% 3.500%
III < 2.50 and > or = 2.99 to 1 0.250% 2.500% 0.625% 3.000%
IV < 2.00 and > or = 2.49 to 1 0.000% 2.000% 0.250% 2.500%
V < 2.00 0.000% 1.750% 0.250% 2.250%
The Applicable Margin shall be fixed at Level II until May 10, 2006.
Thereafter, changes, if any, in the Level applicable to Loans will be effective
on the tenth (10th) day following each date on which the Borrower's Quarterly
Covenant Compliance Sheet ("QCC Sheet") is required to be delivered to the
Lenders pursuant to Section 1.95. In the event that any QCC Sheet is not
delivered by the date required, pricing will revert to Level I until the tenth
(10th) day following the date of delivery of the delayed QCC Sheet, on which
tenth day pricing will be adjusted to the applicable level shown by the QCC
Sheet.
"Applicable Unused Fee" means the per annum rate shown in the table below
based on the applicable Average Borrowed Funds to EBITDA Ratio, calculated for
Borrower on a consolidated basis and without duplication in accordance with
GAAP:
Average Borrowed Funds to
Level EBITDA Unused Fee
----- ---------------------------- ----------
I > or = 3.50 to 1 0.250%
II < 3.00 and > or = 3.49 to 1 0.250%
III < 2.50 and > or = 2.99 to 1 0.250%
IV < 2.00 and > or = 2.49 to 1 0.125%
V < 2.00 0.125%
The Applicable Unused Fee shall be fixed at Level II until May 10, 2006.
Thereafter, changes, if any, in the Level applicable to Unused Fees will be
effective on the tenth (10th) day following each date on which the Borrower's
Quarterly Covenant Compliance Sheet ("QCC Sheet") is required to be delivered to
the Lenders pursuant to Section 1.95. In the event that any QCC Sheet is not
delivered by the date required, pricing will revert to Level I until the tenth
(10th) day
following the date of delivery of the delayed QCC Sheet, on which
tenth day pricing will be adjusted to the applicable level shown by the QCC
Sheet.
"Asset Disposition" means any sale, assignment, transfer, lease, or other
disposition by a Person to any other Person, whether in one transaction or in a
series of related transactions, of any of its assets, business units or other
properties (including (i) any interest in property, whether tangible or
intangible, (ii) Capital Securities of Subsidiaries, and (iii) any
sale-leaseback transaction), provided, however, that "Asset Disposition" shall
not include (a) the sale of inventory in the ordinary course of business, (b)
the disposition of any obsolete or retired property not used or useful in the
business of the Credit Parties in return for a fair market value, and (c)
disposition of Money Market Instruments in return for an equivalent value of
cash or other Money Market Instruments.
"Average Borrowed Funds to EBITDA Ratio" means as of the applicable
measurement date, the Average Borrowed Funds as of such date divided by EBITDA
for the twelve (12) Fiscal Month period ended as of such date.
"Average Borrowed Funds" means as of the last day of any Fiscal Quarter,
the average of the aggregate amounts of Borrowed Funds of the Borrower as of
such day, and as of the last day of each of the eleven (11) immediately
preceding Fiscal Months.
"Authorized Person" means James Riedman, Richard White, Kenneth Wolf, or
Douglas Langston, each of whom are authorized by the Borrower to request Loans
and Letters of Credit, and any additional person who the Borrower notifies the
Agent of in writing is authorized to do the same.
"Base Rate" means the higher of (i) the Prime Rate, and (ii) the Federal
Funds Rate plus one-half percentage point (.5%).
"Base Rate Loan" means any Loan when and to the extent that the interest
rate for such Loan is determined by reference to the Base Rate.
"Borrowed Funds" means, as of the measurement date, without duplication,
on a consolidated basis, Borrower's and its Subsidiaries':
(a) indebtedness or liability for borrowed money, including without
limitation Obligations under the Loan Documents, synthetic leases, and any other
off-balance sheet financing;
(b) obligations evidenced by bonds, debentures, notes, or other
similar instruments;
(c) obligations for the deferred purchase price of property or
services (excluding current accounts payable incurred in the ordinary course of
business);
(d) obligations as lessee under capital leases;
(e) current liabilities in respect of unfunded vested benefits under
Plans covered by ERISA;
(f) obligations as an account party under letters of credit (other
than the Earn-Out Letter of Credit) and letters of guaranty;
(g) obligations under acceptance facilities;
(h) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business), and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person,
or otherwise to assure a creditor against loss;
(i) obligations secured by (or for which the holder of the
obligations has an existing right, contingent or otherwise to be secured by) any
Liens on property owned or acquired, whether or not the obligations secured
thereby have been assumed;
(j) all purchase money mortgages, outstanding under asset
securitization vehicles, conditional sales contracts and similar title retention
debt instruments; and
(k) the Contingent Earn-Out Amounts excluding the Contingent
Earn-Out Amounts related to the Altama Acquisition Agreement.
"Borrower" means Phoenix Footwear Group, Inc. and its successors, legal
representatives and assigns.
"Borrower's 401(k) Plan" means the Borrower's defined contribution 401(k)
savings plan.
"Borrowing Base" means the sum of the following:
(a) 80% of the Eligible Accounts of the Credit Parties;
(b) plus 50% of the Eligible Inventories of the Credit Parties that
are used in their business with a $4,000,000 inventory cap for the Penobscot
Business, $3,000,000 inventory cap for the Trask Business, $3,000,000 inventory
cap for the Royal Business, $3,000,000 inventory cap for the Altama Business,
and $2,500,000 inventory cap for the Chambers Business, provided, however, the
aggregate inventory cap for the Credit Parties shall be $14,000,000.
(c) less a Term Loan Reserve equal to $950,000, which $950,000
amount will be reduced by $150,000 at such time as each quarterly principal
payment with respect to the Term Loans is made; and
(d) less Letter of Credit Obligations.
The Agent reserves the right in its sole discretion to modify the Borrowing Base
(including the inventory caps) or make changes in the definitions of Eligible
Accounts or Eligible Inventories, or to delete certain accounts or inventories
from the Borrowing Base in the event of a material
adverse change in any of the collateral for the Revolving Credit or its
collectibility, in the event the Agent reasonably concludes that there are
circumstances or conditions which materially affect the value of the collateral,
or in the event the Agent deems it prudent to adjust the mix and balance of the
collateral.
"Borrowing Base Report" means a report described in Section 1.66 of this
Agreement.
"Business Day" means any day other than a Saturday, Sunday, or other day
on which commercial banks in New York are authorized or required to close under
the laws of such State and, if the applicable day relates to LIBOR Loan, LIBOR
Interest Period, or notice with respect to a LIBOR Loan, a day on which dealings
in Dollar deposits are also carried on in the London interbank market and banks
are open for business in London.
"Capital Security" means, (a) with respect to any Person that is a
corporation, any and all shares, interests or equivalents in capital stock
(without limitation whether voting or nonvoting, and whether common or
preferred) of such corporation, and (b) with respect to any Person that is not a
corporation, any and all partnership, membership, limited liability company or
other equity interests of such Person; and (c) in each case, any and all
warrants, rights or options to purchase any of the foregoing with respect to any
Person, any security convertible into any of the foregoing, participations, and
any other equity interests or equity equivalents with respect to such Person.
"Cash Flow" means for the applicable period EBITDA minus (i) Taxes paid,
minus (ii) Unfinanced Capital Expenditures, minus (iii) interest expense, minus
(iv) Distributions made (which may only be made in accordance with Section 1.85)
all determined in accordance with GAAP.
"Cash Flow Coverage Ratio" means as of the applicable measurement date,
Cash Flow for the four (4) Fiscal Quarters then ended, divided by the sum of all
Scheduled Principal Payments due during the four (4) Fiscal Quarters immediately
following such date.
"Casualty Event" means, with respect to any property (including any
interest in property) of any Credit Party, any loss of, theft of, damage to, or
condemnation or other taking of, such property for which the Credit Party
receives insurance proceeds, proceeds of a condemnation award, or other
compensation.
"CBC" means Chambers Belt Company, an Arizona corporation operating under
that name prior to the Chambers Acquisition.
"Chambers" means Chambers Delaware Acquisition Company, whose name was or
will be changed to Chambers Belt Company as part of the Chambers Acquisition on
or about the date of this Agreement.
"Chambers Acquisition" means the transactions consummated as contemplated
by the Chambers Acquisition Agreement.
"Chambers Acquisition Agreement" means the Asset Purchase Agreement dated
as of April 18, 2005 by and among CBC, Stockholders of CBC, and Chambers.
"Chambers Business" means the belt products business operated by the
Credit Parties.
"Change in Control" means the acquisition of ownership, directly or
indirectly, beneficially or of record, by any person or group (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934 and the rules
of the Securities and Exchange Commission thereunder as in effect on the date
hereof), of shares representing more than twenty-five percent (25%) of the
aggregate ordinary voting power in the election of Borrower's directors
represented by the issued and outstanding capital stock of Borrower by any
person, excluding however the acquisition of shares by any person who is a
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