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Exhibit 10.5
EXTENSION OF LIMITED WAIVER AND LOAN MODIFICATION AGREEMENT
THIS EXTENSION OF LIMITED WAIVER AND LOAN MODIFICATION AGREEMENT (the
"Extension") is made effective as of June 30, 2000 by and among Rocky Shoes &
Boots, Inc., an Ohio corporation ("Rocky Inc."), Five Star Enterprises Ltd., a
Cayman Islands corporation ("Five Star"), Lifestyle Footwear, Inc., a Delaware
corporation ("Lifestyle") (the foregoing parties being referred to herein
individually as a "Borrower" and collectively as the "Borrowers"), Bank One, NA,
a national banking association ("Bank One"), The Huntington National Bank, a
national banking association ("HNB")(Bank One and HNB shall be referred to
herein individually as a "Bank" and collectively as the "Banks"), and Bank One,
NA, as Agent, acting in the manner and to the extent described in Article IX of
the Agreement referred to herein (in such capacity, the "Agent").
BACKGROUND INFORMATION
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A. The Borrowers, Bank One, HNB and the Agent entered into a certain
Revolving Credit Loan Agreement, dated as of January 28, 1997, as amended by (i)
a Term Loan Agreement and First Amendment to Revolving Credit Loan Agreement,
dated effective as of April 18, 1997, (ii) a Second Amendment to Revolving
Credit Loan Agreement, dated effective as of May 29, 1998, (iii) a Third
Amendment to Revolving Credit Loan Agreement, dated effective as of April 1,
1999, and (iv) a Fourth Amendment to Revolving Credit Loan Agreement, dated
effective as of July 23, 1999 (such agreement, as so amended, the "Agreement"),
pursuant to which Bank One and HNB agreed to provide term and revolving credit
loans to the Borrowers, upon and subject to the terms and conditions as set
forth in the Agreement.
B. Events of Default have occurred under the terms of the Facility
Documents, and the Borrowers and the Banks entered into a Limited Waiver and
Loan Modification Agreement, made effective as of May 15, 2000 (the "Waiver
Agreement"), pursuant to which the Banks waived certain provisions of the
Agreement and the Facility Documents until June 29, 2000.
C. Such Events of Default have continued to occur under the terms of the
Facility Documents, and the Borrowers have requested that the Banks extend the
waiver of certain provisions of the Agreement granted pursuant to the Waiver
Agreement, and the Banks are willing do to so, but only in accordance with the
terms as set forth in this Extension.
PROVISIONS
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NOW, THEREFORE, in consideration of the extension of the waiver of the
Banks as set forth herein, the mutual agreements hereunder and under the
Facility Documents, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Borrowers, the Banks and
the Agent hereby agree as follows:
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SECTION 1. CAPITALIZED TERMS. Except as provided for herein, the
capitalized terms used herein shall have the same meanings as set forth in the
Agreement.
SECTION 2. CURRENT AMOUNT OF LOANS. The Borrowers certify, acknowledge,
agree and state that as of August 2, 2000, (i) the total principal amount of
Revolving Credit Loans owed to the Banks under the Agreement and the Notes is
$40,700,000 (with $24,420,000 being owed to Bank One and $16,280,000 being owed
to HNB), and that such amounts are payable to the Banks without any offsets,
counterclaim, defense or reductions, (ii) the total principal amount of Term
Loans owed to the Banks under the Agreement and the Term Loan Notes is
$1,250,000 (with $750,000 being owed to Bank One and $500,000 being owed to
HNB), and that such amounts are payable to the Banks without any offsets,
counterclaim, defense or reductions, and (iii) the aggregate undrawn amount of
outstanding Commercial L/Cs and Standby L/Cs is $872,787 (with Bank One's
participation therein being $523,672.21 and HNB's participation therein being
$349,114.79).
SECTION 3. DEFAULT; WAIVER BY THE BANKS; WAIVER FEE; INCREASE IN INTEREST
RATES.
(a) The Borrowers acknowledge and agree that the Borrowers continue
to be in default with respect to the following sections of the Agreement
(such sections being referred to collectively as the "Subject Sections"):
(i) Section 7.2(l) (i) (relating to the Consolidated Net Worth
financial covenant);
(ii) Section 7.2(l) (ii) (relating to the Consolidated Fixed
Charge Coverage Ratio financial covenant); and
(iii) Section 7.2(l)(iii) (relating to the Consolidated Funded
Debt to Consolidated EBITDA Ratio financial covenant).
(b) Subject to the terms of this Extension, the Banks hereby extend
the waiver of compliance (the "Waiver") by the Borrowers with the Subject
Sections for the period (the "Waiver Period") commencing on June 30, 2000
(the "Effective Date") and continuing through and including August 31,
2000 (the "Termination Date"). EACH BORROWER ACKNOWLEDGES AND AGREES THAT,
EXCEPT AS PROVIDED IN THE FOLLOWING SUBSECTION (C), THE BANKS DO NOT
INTEND TO EXTEND, AND NEITHER BANK IS MAKING ANY COMMITMENT TO EXTEND, THE
WAIVER PROVIDED FOR HEREIN BEYOND THE TERMINATION DATE.
(c) The Termination Date and the Waiver provided by this Extension
shall be extended from August 31, 2000 to and including September 20,
2000, and the Waiver Period shall be extended to and including September
20, 2000, provided that (i) in the judgment of the Agent, no material
adverse change in the financial condition of the Borrowers has occurred
prior to August 31, 2000, and (ii) on or prior to August 18, 2000, the
Borrowers deliver to the Agent (x) a commitment letter (the "Commitment
Letter")
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for a refinancing (the "Refinancing") of the Revolving Credit Loans and
the Term Loans (collectively, the "Loans") from another financing source,
with such source and the terms of such Commitment Letter being acceptable
to the Agent, and (y) evidence satisfactory to Banc One Leasing
Corporation ("BOLC") that all equipment leases between any Borrower and
BOLC (the "Leases") will be refinanced or otherwise dealt with in a manner
satisfactory to BOLC by the date of any refinancing of the Loans.
(d) (i) The maturity date of the Term Loans shall be extended from
May 1, 2000 to August 31, 2000, and, if the Termination Date and the
Waiver provided by this Extension is extended from August 31, 2000 to
September 20, 2000, and the Waiver Period is extended to and including
September 20, 2000, pursuant to subsection (c) above, such maturity date
of the Term Loans shall be extended to September 20, 2000.
(ii) The interest rate on the Term Loans as set forth in the
Term Loan Notes shall increase from the rate equal to the sum of the
"prime" rate plus 25 basis points, to the rate equal to the sum the
"prime" rate plus 50 basis points, effective as of May 1, 2000.
(e) (i) The interest rate on the Revolving Credit Loans shall
increase to a rate equal to the Prime Rate, effective as of June 30, 2000.
(ii) The option of the Borrowers to have Revolving Credit
Loans bear interest based on the LIBOR Rate shall terminate on June
30, 2000, and any outstanding LIBOR Rate Loans on such date shall be
converted to Prime Rate Loans.
(f) The Borrowers, jointly and severally, shall pay to the Agent for
the ratable benefit the Banks the following waiver fee(s) upon the
occurrence of either or both of the following:
(i) if a Commitment Letter satisfying the requirements set
forth in Section 3(c) is not delivered to the Agent on or prior to
August 18, 2000, a waiver fee in the amount of $25,000 shall be
payable immediately; and
(ii) if, on or prior to September 20, 2000, (x) the Loans are
not paid in full or refinanced in a form satisfactory to the Agent,
and (y) the Leases are not refinanced or otherwise dealt with in a
manner satisfactory to BOLC, a waiver fee in the amount of $25,000
shall be payable immediately.
(g) Although the Banks are agreeing to the Waiver as set forth
herein, the Banks (i) are not waiving, abandoning, discharging, releasing,
modifying, extending, canceling or relinquishing any right, claims, or
causes of action, and (ii) are not accepting any security or promise
granted herein as payment of any right, claims, or causes of action. The
Waiver by the Banks as set forth herein shall not affect or impair any
right that the Banks may have against any Borrower or any other party.
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SECTION 4. ABSENCE OF WAIVER. The Borrowers and the Banks agree that the
agreements set forth in Section 3 hereof shall not be deemed to:
(a) except as expressly set forth in Section 3 of this Extension,
modify or limit any other term of the Facility Documents;
(b) impose upon the Banks any obligation, express or implied, to
consent to any amendment or modification of the Facility Documents; or
(c) prejudice any right or remedy that (i) the Banks and/or the
Agent may now have or may in the future have under the Facility Documents
or any instrument or agreement referred to therein including, without
limitation, any right or remedy resulting from any Default or Event of
Default not covered by the Waiver with respect to the Subject Sections, or
any other failure of any Borrowers to comply with the terms of this
Extension, including without limitation the terms set forth in Section 5
hereof, or (ii) BOLC may now have or may in the future have under the
Leases or any instrument or agreement referred to therein.
SECTION 5. CONTINUING OBLIGATIONS; MODIFICATIONS; ADDITIONAL OBLIGATIONS;
PROVISION OF ADDITIONAL ITEMS.
(a) Except with respect to the Subject Sections, the Borrowers shall
continue to comply, observe and perform all of their obligations under the
Agreement and the other Facility Documents.
(b) Effective as the date hereof and continuing hereafter,
notwithstanding anything in the Agreement and the other Facility Documents
to the contrary, the Borrowers hereby consent and agree that the Banks and
the Agent shall have, and the Banks and the Agent hereby reserve, the
right and ability to reduce, modify and otherwise change in any manner the
Borrowing Base, which right may be exercised in the Banks' and the Agent's
sole and absolute discretion at anytime and from time to time; without
limiting the generality of the foregoing, the Banks and the Agent shall
have the right to (x) reduce the percentage of Eligible Accounts
Receivable (currently 80%) and Inventory (currently 50%) which may be
included in calculating the Borrowing Base, (y) determine which Accounts
Receivable shall constitute Eligible Accounts Receivable, and (z)
determine which Inventory may be included in calculating the Borrowing
Base.
(c) In addition to their current obligations under the Agreement and
the other Facility Documents, the Borrowers shall:
(i) provide to the Agent, not later than 2:00 p.m. on each
Tuesday during the Waiver Period, a Borrowing Base Certificate in
the form attached hereto, certified by an officer of the Borrowers
as true and correct, setting forth the amount of Eligible Accounts
Receivable and Inventory, in each case as of the close of business
of the preceding Friday; as currently provided in the Agreement,
notwithstanding any provision in the Facility Documents or herein to
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the contrary, the total amount of outstanding Revolving Credit Loans
under the Aggregate Commitment, when taken together with the total
aggregate Dollar amount available to be drawn under outstanding
Commercial L/Cs and Standby L/Cs, shall at no time exceed the lesser
of (i) the Aggregate Commitment or (ii) the Borrowing Base as set
forth on the most recent weekly Borrowing Base Certificate provided
to the Agent, plus 50% of the Dollar amount available to be drawn
under outstanding Commercial L/Cs;
(ii) provide to the Agent as soon as available, but in any
event not later than 25 days after the end of each month (beginning
with July, 2000 and continuing during the Waiver Period), the
unaudited internally prepared consolidated balance sheet of the
Borrowers as at the end of such month and the related unaudited
unconsolidated statements of income and shareholders equity of the
Borrowers for such month and the portion of the Fiscal Year through
such date, setting forth in each case in comparative form the
figures for the previous year, certified by an appropriate officer
as being fairly stated in all material respects;
(iii) concurrently with the delivery of the monthly financial
statements referred to in subsection (ii) above, a certificate of an
appropriate officer of the Borrowers (in such form as shall be
reasonably acceptable to the Banks) stated to have been made after
due examination by such officer (x) stating that, to the best of
such officer's knowledge, except with respect to the Subject
Sections, the Borrowers during such period have observed or
performed in all material respects all of its covenants and other
agreements, and satisfied every condition, contained in the Facility
Documents to be observed, performed or satisfied by the Borrowers
and that such officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate, (y)
showing in detail the calculations used in determining the financial
covenants set forth in the Subject Sections, and (z) stating that,
to the best of such officer's knowledge, the representations and
warranties expressed in Article V are true, correct and complete in
all material respects on and as of the date of such financial
statements delivered concurrently therewith, except in each case of
(x), (y) or (z) as may otherwise be specifically set forth in such
certificate;
(iv) provide to the Agent as soon as available, but in any
event not later than 15 days after the end of each month (beginning
with July, 2000 and continuing during the Waiver Period), an
accounts receivable aging report as of the end of such month, in a
form acceptable to the Agent;
(v) provide to the Agent as soon as available, but in any
event not later than 15 days after the end of each month (beginning
with July, 2000 and continuing during the Waiver Period), an
accounts payable aging report as of the end of such month, in a form
satisfactory to the Agent;
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(vi) provide to the Agent a copy of each appraisal completed
by third party appraisers in connection with the Refinancing process
as promptly as possible after receipt thereof by any Borrower, but
in any event not later than 14 days after receipt; and
(vi) execute such additional documents reasonably requested by
the Banks and/or the Agent to carry out the intent of the Facility
Documents or this Extension, including without limitation to
protect, perfect or continue perfection of liens.
SECTION 6. TRUTH OF REPRESENTATIONS AND WARRANTIES. The Borrowers hereby
represent and warrant that the following are true and correct as of the date of
this Extension:
(a) the representations and warranties of the Borrowers contained in
the Facility Documents are true and correct on and as of the date of this
Extension as if made on and as of such date unless stated to relate to a
specific earlier date;
(b) all financial statements of the Borrowers provided to the Banks
are true, accurate and complete in all material respects as of the date
of, and for the periods covered by, such financial statements;
(c) neither this Extension nor any other document, certificate or
written statement furnished to the Banks or the Agent by or on behalf of
any Borrower in connection herewith or with the Revolving Credit Loans and
the transactions contemplated hereby and by the Facility Documents
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein
and therein not misleading;
(d) each Borrower has full power and authority (i) to make the
borrowings contemplated by the Facility Documents, (ii) to execute,
deliver and perform this Extension, and (iii) to incur the obligations
provided for herein, all of which have been duly authorized by all
necessary and proper corporate action;
(e) no consent, waiver or authorization of, or filing with, any
person or any governmental authority is required to be made or obtained by
the Borrowers in connection with the borrowings under the Facility
Documents, or the execution, delivery, performance, validity or
enforceability of this Extension;
(f) this Extension constitutes the legal, valid and binding
obligation of each Borrower, enforceable against each Borrower in
accordance with its terms; and
(g) the execution and delivery by the Borrowers of this Extension
and the performance by the Borrowers of this Extension: (i) do not and
will not violate any law or regulation; (ii) do not and will not violate
any order, decree or judgment by which any Borrower is bound; (iii) do not
and will not violate or conflict with, result in a breach of or constitute
(with notice, lapse of time, or otherwise) a default under any material
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agreement, mortgage, indenture or other contractual obligation to which
any Borrower is a party, or by which any Borrower's properties are bound;
or (iv) do not and will not result in the creation or imposition of any
lien upon any property or assets of any Borrower.
SECTION 7. CONDITIONS TO THE BANKS 'S OBLIGATIONS. The obligations of the
Banks to enter into this Extension and be bound by the terms hereof are subject
to the satisfaction of the following conditions precedent:
(a) DELIVERY OF DOCUMENTS AND ITEMS. Contemporaneously with or
before the execution of this Extension by the Banks, the Agent shall have
received the following, each in form and substance satisfactory to the
Agent, the Banks and their counsel:
(i) EXTENSION. This Extension, duly executed by the Borrowers;
(ii) OTHER DOCUMENTS AND ITEMS. All certificates, documents
and other items currently required to be furnished by the Borrowers
to the Agent and/or the Banks pursuant to this Extension shall have
been so furnished; and
(iii) OTHER REQUIREMENTS. Such other certificates, documents
and other items as the Banks and/or the Agent deem necessary or
desirable.
(b) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Borrowers in this Extension shall be true and
correct in all material respects as of the date hereof.
SECTION 8. ADDITIONAL EVENTS OF DEFAULT; REVOCATION OF WAIVER. Upon (i)
the failure of the Borrowers, or any of them, to observe, comply or perform any
of their obligations under this Extension, (ii) the occurrence of an Event of
Default, other than with respect to the Subject Sections, during the Waiver
Period, or (iii) the failure of the Borrowers, or any of them, to observe,
comply or perform any of their obligations under any of the Leases, the Waiver
provided herein may, in the sole and absolute discretion of the Banks, be
revoked by giving notice thereof by the Agent to the Borrowers, and upon such
revocation, the Waiver shall be null and void and the Banks and the Agent shall
be entitled to exercise all rights and remedies that the Banks and the Agent now
have at law or under the Facility Documents or any instrument or agreement
referred to therein with respect to such failure or Event of Default, including
an Event of Default with respect to any of the Subject Sections.
SECTION 9. REAFFIRMATION OF LIABILITY; RELEASE OF CLAIMS.
(a) Each Borrower hereby reaffirms its liability to (i) the Banks
and the Agent under the Facility Documents and all other agreements and
instruments executed by the Borrowers for the benefit of the Banks and the
Agent in connection therewith, and (ii) to BOLC under the Leases and all
other agreements and instruments executed by the Borrowers for the benefit
of BOLC in connection therewith.
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(b) Each Borrower acknowledges and agrees that (i) the Banks and the
Agent have performed all of their respective obligations under the
Facility Documents, (ii) BOLC has performed all of its obligations under
the Leases, (iii) the Banks and the Agent, or any of them, are not in
default under any obligation it has or ever did have to any Borrower under
the Facility Documents or any other agreement or otherwise, and (iv) BOLC
is not in default under any obligation it has or ever did have to any
Borrower under the Leases or any other agreement or otherwise.
(c) As a specific inducement and consideration to the Banks to enter
into this Extension and agree to the transactions contemplated hereby,
each Borrower hereby waives and releases the Banks, the Agent and BOLC,
their respective officers, directors, employees and representatives, from
any and all claims or causes of actions, if any, accruing on or before the
date hereof and arising out of the past and/or present business
relationship between any Borrower and the Banks, the Agent and/or BOLC
which any Borrower now has or may have or in the future may have against
the Banks, the Agent and/or BOLC or any of their respective officers,
directors, employees or representatives.
SECTION 10. EFFECTIVENESS OF FACILITY DOCUMENTS. The Borrowers have read
and understand all terms and provisions of the Facility Documents and this
Extension and, subject to the Waiver provided hereby, all of the terms,
covenants and conditions of, and the obligations of the Borrowers under, all
Facility Documents shall remain valid, binding and in full force and effect. No
delay on the part of the Banks or the Agent in the exercise of any right or
remedy under the Facility Documents shall operate as a waiver. No single or
partial exercise by the Banks or the Agent of any such right or remedy shall
preclude any other future exercise of such right or remedy or the exercise of
any other right or remedy. No waiver or indulgence by the Banks of any Default
or Event of Default shall be effective unless in writing and signed by the
Banks, nor shall a waiver on one occasion be construed as a bar to or waiver of
that right on any future occasion.
SECTION 11. PRESERVATION OF EXISTING SECURITY INTERESTS. Each mortgage,
security interest, pledge, assignment, lien or other conveyance or encumbrance,
including without limitation pursuant to the Security Agreement, of any right,
title, or interest in any property of any kind delivered to the Banks at any
time by any person or entity in connection with the Facility Documents or to
secure the performance of the obligations of the Borrowers under the Facility
Documents, , shall remain in full force and effect following the execution of
this Extension.
SECTION 12. APPLICABLE LAW. This Extension shall be deemed to be a
contract made under the laws of the State of Ohio and for all purposes shall be
construed in accordance with the laws of such state.
SECTION 13. SEVERABILITY. Any provision of this Extension which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent of such prohibition or unenforceability,
without invalidating the remaining provisions hereof or affecting the validity
or enforceability of such provision in any other jurisdiction.
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SECTION 14. INTERPRETATION. This Extension is to be deemed to have been
prepared jointly by the parties hereto, and any uncertainty or ambiguity
existing herein shall not be interpreted against any party but shall be
interpreted according to the rules for the interpretation of arm's length
agreements. The various headings in this Extension are inserted for convenience
of reference only and shall not affect the meaning or interpretation of this
Extension or any provision hereof.
SECTION 15. ENTIRE AGREEMENT. This Extension embodies the entire agreement
and understanding among the Borrowers, the Agent and the Banks relating to, and
supersedes all prior agreements and understandings among the Borrower, the Agent
and the Banks relating to, the subject matter hereof.
SECTION 16. COVENANTS TO SURVIVE, BINDING AGREEMENT. This Extension shall
be binding upon and inure to the benefit of the Agent, the Banks, the Borrowers
and their respective successors or assigns; provided, however, that the
Borrowers may not assign or otherwise dispose of any of its rights or
obligations hereunder.
SECTION 17. AMENDMENTS AND SUPPLEMENTS. This Extension may not be amended
or supplemented except by an instrument in writing executed by the Borrowers,
the Banks and the Agent.
SECTION 18. EXPENSES. The Borrowers, jointly and severally, shall
reimburse the Banks and the Agent for any costs, internal charges and
out-of-pocket expenses (including reasonable auditors' fees, attorneys' fees and
time charges of attorneys for the Banks and the Agent, which auditors and
attorneys may be employees of the Banks or the Agent) paid or incurred by the
Banks and/or the Agent in connection with the preparation, negotiation,
execution, delivery, review, amendment, modification, and administration of this
Extension and the other Facility Documents. The Borrowers, jointly and
severally, also agree to reimburse the Banks for any costs, internal charges and
out-of-pocket expenses (including reasonable attorneys' fees and time charges of
attorneys for the Banks, which attorneys may be employees of the Banks) paid or
incurred by the Banks in connection with the collection and enforcement of the
Facility Documents.
SECTION 19. COUNTERPARTS. This Extension may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Extension by signing any such
counterpart. This Extension shall become effective upon receipt by the Agent of
counterparts hereof signed by each of the parties hereto or, in the case of any
party as to which an executed counterpart shall not have been received, receipt
by the Agent in form satisfactory to it of telegraphic, facsimile or other
written confirmation from such party of execution of a counterpart hereof by
such party. Any such telegraphic, facsimile or other written confirmation from
such party of execution of a counterpart hereof shall be fully effective as an
original counterpart hereof.
SECTION 20. WAIVER OF JURY TRIAL. THE BANKS, THE AGENT AND EACH BORROWER,
AFTER CONSULTING OR HAVING HAD THE OPPORTUNITY TO CONSULT WITH COUNSEL,
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
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WAIVE ANY RIGHT ANY OF THEM MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION BASED
UPON OR ARISING OUT OF THIS EXTENSION, THE AGREEMENT, THE NOTES, THE OTHER
FACILITY DOCUMENTS, OR ANY RELATED INSTRUMENT OR AGREEMENT, OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREBY, OR ANY COURSE OF CONDUCT, DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTIONS OF ANY OF THEM. THIS WAIVER SHALL NOT IN
ANY WAY AFFECT THE AGENT'S OR THE BANKS' ABILITY TO PURSUE REMEDIES PURSUANT TO
ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION CONTAINED IN ANY FACILITY
DOCUMENT. NEITHER THE BANKS, THE AGENT NOR ANY BORROWER SHALL SEEK TO
CONSOLIDATE, BY COUNTERCLAIM OR OTHERWISE, ANY ACTION IN WHICH A JURY TRIAL HAS
BEEN WAIVED WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT
BEEN WAIVED. THESE PROVISIONS SHALL NOT BE DEEMED TO HAVE BEEN MODIFIED IN ANY
RESPECT OR RELINQUISHED BY THE BANKS, THE AGENT OR THE BORROWERS EXCEPT BY A
WRITTEN INSTRUMENT EXECUTED BY ALL OF THEM.
SECTION 21. CONFESSION OF JUDGMENT. Each Borrower irrevocably authorizes
any attorney-at-law, including any attorney-at-law employed or retained by the
Banks or the Agent, to appear for the Borrower in any court of record in
Franklin County, Ohio (which the Borrower acknowledges to be the place where the
Agreement and this Extension were made) or any other state or jurisdiction
wherein the Borrower may then reside, to (i) waive the issuing and service of
process, (ii) confess judgment against the Borrower in favor of the holder of
the Agreement for all amounts then due thereunder and under the Notes, together
with costs of suit, (iii) release all errors, and (iv) waive all rights of
appeal. Each Borrower consents to the jurisdiction and venue of that court. Each
Borrower waives any conflict of interest that any attorney-at-law employed or
retained by the Banks or the Agent may have in confessing judgment under the
Agreement and the Notes and consents to payment of a legal fee to any
attorney-at-law confessing judgment thereunder. After judgment is entered
against one or more of the Borrowers, the power conferred may be exercised as to
one or more of the other Borrowers.
[Balance of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Extension to be
executed by their duly authorized officers as of the date first written above.
BORROWERS:
Rocky Shoes & Boots, Inc.,
an Ohio corporation
By: /s/s David Fraedrich
----------------------------
Title: Exec V.P.
-------------------------
WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO
NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT
JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE
AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU
REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR
WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART
TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE.
Five Star Enterprises Ltd., Lifestyle Footwear, Inc.,
a Cayman Islands corporation a Delaware corporation
By: /s/ David Fraedrich By: /s/ David Fraedrich
--------------------------- --------------------------
Title: Exec V.P. Title: V.P.
------------------------ -----------------------
[Signatures continued on next page]
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BANKS:
Bank One, NA,
a national banking association
By: /s/ Michael A. Reeves
-----------------------------------
Michael A. Reeves, Vice President
The Huntington National Bank,
a national banking association
By: /s/ David A. Kirkley
-----------------------------------
David A. Kirkley, Vice President
AGENT:
Bank One, NA, as Agent,
a national banking association
By: /s/ Michael A. Reeves
-----------------------------------
Michael A. Reeves, Vice President
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ANNEX A
FORM OF BORROWING BASE CERTIFICATE
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