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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported):
AUGUST 31, 1994
L.A. GEAR, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA
(State or other jurisdiction of incorporation)
1-10157
(Commission File Number)
95-3375118
(IRS Employer Identification No.)
2850 OCEAN PARK BOULEVARD, SANTA MONICA, CALIFORNIA 90405
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(310)452-4327
NOT APPLICABLE
(Former name or former address, if changed since last report)
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THIS REPORT INCLUDES A TOTAL OF 8 PAGES.
THE EXHIBIT INDEX APPEARS ON PAGE 4.
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Item 5. Other Events.
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On August 31, 1994, L.A. Gear California, Inc. ("Borrower"), a wholly-owned
subsidiary of L.A. Gear, Inc. (the "Company"), entered into the Second
Amendment to Loan and Security Agreement dated as of August 31, 1994 (the
"Second Amendment") to the Loan and Security Agreement, dated as of November
22, 1993, between Borrower and BankAmerica Business Credit, Inc. ("Lender"), as
amended to date (the "Loan Agreement"), pursuant to which Lender provides to
Borrower a revolving line of credit facility for loans and letters of credit in
an aggregate amount not to exceed $75 million. The Second Amendment
principally amends the Loan Agreement to (i) reduce the Adjusted Tangible Net
Worth (as defined in the Loan Agreement) requirement from $169.5 million to
$165 million; (ii) eliminate the minimum quarterly earnings test, and (iii)
further facilitate entry by Borrower into foreign exchange contracts with an
affiliate of Lender. The Second Amendment also includes a quarterly fee of
$25,000 per each quarter in which the Adjusted Tangible Net Worth is between
$170 million and $175 million, and $50,000 per each quarter in which it is
below $170 million. The foregoing description of the Second Amendment is
qualified in its entirety by reference to the full text of the Second
Amendment, filed as Exhibit 99.3 hereto and which is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of Businesses Acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable.
(c) Exhibits.
99.3 Second Amendment to Loan and Security Agreement dated as of
August 31, 1994, by and between L.A. Gear California, Inc.
and BankAmerica Business Credit, Inc.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
L.A. GEAR, INC.
Dated: September 2, 1994 By:/s/ Thomas F. Larkins
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Senior Vice President
and General Counsel
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EXHIBIT INDEX
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Exhibit Page
No. Document No.
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99.3 Second Amendment to Loan and Security 5
Agreement dated as of August 31, 1994
by and between L.A. Gear California,Inc.
and BankAmerica Business Credit, Inc.
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EXHIBIT 99.3
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
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THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT ("Amendment") is entered
into as of August 31, 1994, by and between L. A. Gear California, Inc., a
California corporation, ("Borrower") and BankAmerica Business Credit, Inc., a
Delaware corporation, ("Lender").
WHEREAS, Lender and Borrower entered into a certain Loan and Security
Agreement, dated as of November 22, 1993, as amended by a First Amendment to
Loan and Security Agreement dated as of May 31, 1994 (the Loan and Security
Agreement, as amended and supplemented, the "Agreement"), and
WHEREAS, Borrower desires to amend the Agreement and Lender is willing to
amend the Agreement, subject to the terms and conditions stated herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
intending to be legally bound, the parties agree as follows.
SECTION ONE - AMENDMENTS
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1.1 The definition of "Foreign Exchange Reserve" in Section 1 of the
Agreement is hereby amended to read as follows:
"`Foreign Exchange Reserve' means, at any date during which a foreign
exchange contract is outstanding between Borrower and Bank of America, the
amount of $1,000,000 plus such additional amount as Lender, in its
Discretion, calculates to be its current exposure with respect to foreign
exchange contracts then outstanding."
1.2 Section 3 of the Agreement is hereby amended by the addition of
Section 3.5:
"3.5 Quarterly Fee. Borrower will pay Lender on October 15,
February 28, April 15 and July 15 of each year the sum of (i) $50,000 if
the Borrower's Adjusted Tangible Net Worth is less than $170,000,000 as
of the end of the previous Fiscal Quarter or (ii) $25,000 if the
Borrower's Adjusted Tangible Net Worth is $170,000,000 or more, but less
than $175,000,000 as of the end of the previous Fiscal Quarter."
1.3 Section 9.18 of the Agreement is amended to read in its entirety
as follows: "9.18 Adjusted Tangible Net Worth. Borrower will not
permit Adjusted Tangible Net Worth as of the last day of any Fiscal
Quarter to be less than $165,000,000.
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1.4 Section 9.24 of the Agreement is deleted in its entirety.
SECTION TWO - REPRESENTATIONS AND WARRANTIES
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2.1 Acknowledgment of Borrower. Borrower hereby represents and warrants
that the execution and delivery of this Amendment and compliance by Borrower
with all of the provisions of this Amendment (i) are within the powers and
purposes of Borrower; (ii) have been duly authorized or approved by Borrower;
and (iii) constitute the valid and binding obligation of Borrower, enforceable
in accordance with its terms. Borrower reaffirms its obligation to pay all
amounts due Lender under the Agreement in accordance with, and subject to, the
terms thereof, as modified hereby.
SECTION THREE - CONDITIONS PRECEDENT
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3.1 The effectiveness of this Amendment is subject to the Borrower paying to
Lender the sum of $100,000 in consideration for Lender entering into this
Amendment.
SECTION FOUR - GENERAL PROVISIONS
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4.1 Agreement Unmodified. Except as otherwise specifically modified by this
Amendment, all terms and provisions of the Agreement remain unmodified and in
full force and effect.
4.2 Total Agreement. This Amendment, and all other agreements referred to
herein or delivered in connection herewith, shall constitute the entire
agreement between the parties relating to the subject matter hereof, shall
rescind all prior agreements and understandings between the parties hereto
relating to the subject matter hereof, and shall not be changed or terminated
orally.
4.3 Definitions. Unless specifically defined herein, all capitalized terms
shall be defined in accordance with the Agreement.
4.4 Severability. To the extent any provision of this Amendment is not
enforceable under applicable law, such provision shall be deemed null and void
and shall have no effect on the remaining portions of the Amendment.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
day and year first above written.
L.A. Gear California, Inc.
California corporation
By: /s/ Thomas F. Larkins
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Title: Senior Vice President
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and General Counsel
BankAmerica Business Credit, Inc.
Delaware corporation
By: /s/ Richard Burke
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Title: Vice President
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RATIFICATION OF GUARANTY
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Raegal Finance Inc. hereby consents to the foregoing and confirms that
its Guaranty dated as of November 22, 1993 in favor of BankAmerica Business
Credit, Inc. relating to the obligations of L.A. Gear California, Inc. remains
unmodified and in full force and effect.
Raegal Finance, Inc.
By: /s/ Thomas F. Larkins
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Title: Secretary and General Counsel
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L.A. Gear, Inc. hereby consents to the foregoing and confirms that its
Guaranty dated as of November 22, 1993 in favor of BankAmerica Business Credit,
Inc. relating to the obligations of L.A. Gear California, Inc. remains
unmodified and in full force and effect.
L.A. Gear, Inc.
By: /s/ Thomas F. Larkins
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Title: Senior Vice President
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and General Counsel
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