EXHIBIT 10.1
THIRD AMENDMENT TO
THE REVOLVING CREDIT AGREEMENT
THIRD AMENDMENT dated the 23rd day of May, 2000 to the REVOLVING CREDIT
AGREEMENT (the "Credit Agreement") dated August 31, 1998 by and between SAUCONY,
INC., a Massachusetts corporation with its principal place of business at 13
Centennial Drive, Peabody, Massachusetts (the "Borrower") and STATE STREET BANK
AND TRUST COMPANY, a Massachusetts trust company with its head office at 225
Franklin Street, Boston, Massachusetts (the "Bank").
Except as otherwise indicated, all capitalized terms used herein shall
have the meanings given to them in the Credit Agreement.
1. Increase of Commitment. From and including the Effective Date (as
defined below) Section 2.1 of the Credit Agreement shall be revised to
read as follows:
2.1. REVOLVING CREDIT. The Bank agrees on the terms and conditions
herein set forth, to make loans, whether LIBO Rate Loans or Prime Rate
Loans (including LMCS Loans) (together, the "Loans") to the Borrower
and to issue Letters of Credit (subject, however, to the additional
terms and conditions of the Letter of Credit Agreement) from time to
time in an aggregate principal amount of up to (a) thirty million
United States Dollars (US$30,000,000) at any one time outstanding
during the period from May 1, 2000 through September 30, 2000 and (b)
twenty million United States Dollars (US$ 20,000,000) during the period
from October 1, 2000 up to but not including the Termination Date, as
such amounts may be reduced pursuant to Section 2.2 (the "Commitment").
Each Loan (other than a LMCS Loan) which shall not utilize the
Commitment in full shall be in an amount not less than $50,000. Within
the limits of the Commitment, the Borrower may borrow, prepay pursuant
to Section 2.7, repay pursuant to Section 2.8, and reborrow under this
Section 2.1.
2. Stock Repurchase. From and including the Effective Date Section 6.6 of
the Credit Agreement shall be revised to read as follows:
6.6. DIVIDENDS. Declare or pay any Dividends or permit any Subsidiary
to declare or pay any Dividends except (a), in the case of any
Subsidiary, Dividends paid solely to another Subsidiary or to the
Borrower and (b) purchases, redemptions or retirements by the Borrower
of common stock of the Borrower in one or more transactions not in
excess of $4,000,000 in the aggregate during the period from November
1, 1999 to December 31, 2000.
3. The Effective Date shall be the date when all of the following
conditions precedent shall have been satisfied in form and substance
satisfactory to the Bank:
(a) The Borrower shall have executed and delivered to the Bank this
Third Amendment and the Amended and Restated Note, attached hereto as Exhibit A.
(b) The Borrower shall have delivered to the Bank a certificate from
its President, Chief Operating Officer or Clerk certifying to the Board of
Directors votes authorizing the execution, delivery and performance of this
Third Amendment, the Amended and Restated Note, and the other matters
contemplated hereby, setting forth the names of the officers of the Borrower
authorized to sign the same, and stating that the Bank may conclusively rely on
the statements made therein until the Bank shall receive a further certificate
of such officer canceling or amending the prior certificate.
(c) The Bank shall have received a duly executed original of the
favorable legal opinion of counsel for the Borrower as to the due authorization,
execution and enforceability of the Credit Agreement, as amended by this Third
Amendment, and the Amended and Restated Note and such other matters as the Bank
and its counsel may reasonably require.
(d) The representations and warranties of the Borrower contained in
Section 4 of the Credit Agreement shall be true on and as of the Effective Date
as if they had been made on such date (except to the extent that such
representations and warranties expressly relate to an earlier date or are
affected by the consummation of transactions permitted under the Credit
Agreement).
(e) No Default shall have occurred and be continuing.
4. The Borrower represents and warrants to the Bank that (i) the
representations and warranties of the Borrower contained in Section 4 of the
Credit Agreement are true on the date hereof as though made on such date (except
to the extent that such representations and warranties expressly relate to an
earlier date or are affected by the consummation of transactions permitted under
the Credit Agreement), and (ii) no Default has occurred or is continuing or will
occur after giving effect to this Third Amendment and the transactions
contemplated hereunder.
5. As of the Effective Date, all references to the Credit Agreement
shall be to the Credit Agreement as amended hereby and all references to the
Note shall be to the Amended and Restated Note.
6. The Borrower agrees to pay all costs and expenses, including
reasonable attorneys' fees, incurred by the Bank in connection with the
preparation, negotiation and execution of this First Amendment and of the
documents and instruments referred to herein.
7. Except as otherwise provided herein all other terms of the Credit
Agreement shall remain in full force and effect.
8. THE BORROWER AND THE BANK HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH,
THIS THIRD AMENDMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE
BORROWER OR THE BANK. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED
FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION
OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE BORROWER AND THE BANK ENTERING INTO THIS THIRD
AMENDMENT AND EACH SUCH OTHER LOAN DOCUMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to be
duly executed by their respective duly authorized officers as of the date first
above written.
SAUCONY, INC. STATE STREET BANK AND TRUST COMPANY
BORROWER BANK
By: /s/ John H. Fisher By: /s/ Scott A. Young
----------------------- ------------------
Name: John H. Fisher Name: Scott A. Young
Title: President and C.E.O. Title: Assistant Vice President
EXHIBIT A
AMENDED AND RESTATED PROMISSORY NOTE
US$30,000,000 Boston, Massachusetts
May 23, 2000
--
FOR VALUE RECEIVED, the undersigned, SAUCONY, INC., a Massachusetts
corporation (the "Borrower"), hereby promises to pay to the order of STATE
STREET BANK AND TRUST COMPANY, at its offices at 225 Franklin Street, Boston,
Massachusetts (the "Bank") the principal sum of Thirty Million United States
Dollars ($30,000,000) or, if less, the aggregate unpaid principal amount of all
Loans made by the Bank to the Borrower pursuant to the Credit Agreement referred
to below, together with interest on the outstanding principal amounts of the
Loans, at the rates, on such dates and as otherwise provided for in the Credit
Agreement.
This Note is the Note referred to in the Revolving Credit Agreement (as
modified, supplemented or amended from time to time, the "Credit Agreement"),
dated as of August 31, 1998, by and between the Borrower and the Bank and is
subject to the provisions and entitled to the benefits thereof. Terms used
herein which are defined in the Credit Agreement shall have their defined
meanings when used herein. As provided in the Credit Agreement, this Note is
subject to voluntary prepayment, in whole or in part.
In case an Event of Default shall occur and be continuing, the
principal of and accrued interest on this Note shall be, or may be declared to
be, due and payable in the manner and with the effect provided in the Credit
Agreement.
The Borrower hereby waives, to the fullest extent permitted by
applicable law, presentment, demand, protest and all notices of any kind in
connection with this Note.
This Note amends and restates the terms of that Amended and Restated
Promissory Note dated March 12, 1999 (the "1999 Note") made by the Borrower to
the order of the Bank, which 1999 Note is superseded in its entirety hereby. By
accepting this Note or canceling the 1999 Note, the Bank does not waive any
obligation of the Borrower to the Bank under the 1999 Note, nor shall the
delivery or acceptance of this Note be deemed to satisfy any such obligation,
the intent of the parties being to hereby amend and restate the agreed terms
applicable to such obligations.
This Note is executed as an instrument under seal, and shall be
governed by the laws of the Commonwealth of Massachusetts.
THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON,
OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS NOTE.
SAUCONY, INC.
By: /s/ John H. Fisher
Name: John H. Fisher
Title: President and C.E.O.
