Exhibit
10.1
AMENDMENT NO. 2 TO RATIFICATION AGREEMENT AND
AMENDMENT NO. 9 TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 2 TO
RATIFICATION AGREEMENT AND AMENDMENT NO. 9 TO LOAN AND SECURITY
AGREEMENT (this “Amendment”), dated as of July 7, 2009,
is by and among Wachovia Capital Finance
Corporation (Central), an Illinois corporation, in its
capacity as agent acting for and on behalf of the parties to the
Loan Agreement (as hereinafter defined) as lenders (in such
capacity, “Agent”), the parties to the Loan Agreement
as lenders (each individually a “Lender” and
collectively, “Lenders”), Hartmarx Corporation, a
Delaware corporation, as Debtor and Debtor-in-Possession (“US
Borrower”), Coppley Apparel Group Limited, an Ontario
corporation (“Canadian Borrower”; together with US
Borrower, each individually, a “Borrower” and
collectively, “Borrowers”), and each of the companies
listed on Exhibit A hereto as guarantors, each as Debtor and
Debtor-in-Possession (each individually a “Guarantor”
and collectively, “Guarantors”).
W I T
N E S S E T H
WHEREAS, Borrowers
and Guarantors have entered into financing arrangements with Agent
and Lenders pursuant to which Lenders (or Agent on behalf of
Lenders) have made and may make loans and advances and provide
other financial accommodations to Borrowers as set forth in, and
subject to the terms and conditions of, the Loan and Security
Agreement, dated August 30, 2002, by and among Agent, Lenders,
JPMorgan Chase Bank, in its capacity as syndication agent for
Lenders, Wells Fargo Foothill, LLC, in its capacity as documentary
agent for Lenders, Borrowers and Guarantors (as amended and
supplemented by Amendment No. 1 to Loan and Security Agreement,
dated February 25, 2003, Amendment No. 2 to Loan and Security
Agreement, dated July 22, 2004, Amendment
No. 3 to Loan and Security Agreement, dated January 3, 2005
, Amendment No. 4 to Loan and Security
Agreement, dated October 31, 2005, Amendment No. 5 to Loan
and Security Agreement dated September 29, 2006, Amendment No. 6 to
Loan and Security Agreement, dated May 26, 2007, Amendment No. 7 to
Loan and Security Agreement, dated March 14, 2008, the Ratification
and Amendment Agreement, dated as of January 23, 2009
(“Ratification Agreement”), the Amendment No. 1 to
Ratification Agreement and Amendment No. 8 to Loan and Security
Agreement, dated as of June 1, 2009 (“Amendment No.
8”), and this Amendment (as the same now exists, is amended
hereby and may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, the
“Loan Agreement”)) and the other Financing Agreements
(as defined in the Loan Agreement);
WHEREAS, US
Borrower and each Guarantor have each commenced a case under
Chapter 11 of the Bankruptcy Code (as defined in the Ratification
Agreement) in the Bankruptcy Court (as defined in the Ratification
Agreement) and US Borrower and each Guarantor have retained
possession of their respective assets and are authorized under the
Bankruptcy Code to continue the operation of their respective
businesses as a debtor-in-possession;
WHEREAS, Canadian
Borrower has commenced a proceeding under the CCAA (as defined in
the Ratification Agreement) in the CCAA Court (as defined in the
Ratification Agreement) and Canadian Borrower has retained
possession of its assets and is authorized under the CCAA to
continue the operation of its business as a
debtor-in-possession;
WHEREAS, prior to
the commencement of the Chapter 11 Cases and the CCAA Case, Agent
and Lenders made loans and advances and provided other financial
accommodations to Borrowers secured by substantially all assets and
properties of Borrowers and Guarantors as set forth in the Existing
Financing Agreements (as defined in the Ratification Agreement);
and
WHEREAS, Debtors have requested that Agent and
Lenders make certain amendments to the Loan Agreement, the
Ratification Agreement and the other Financing Agreements
as set forth herein, which Agent and
Lenders are willing to do subject to the terms and conditions
contained herein.
NOW, THEREFORE, in
consideration of the foregoing, the mutual conditions and
agreements and covenants set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
SECTION 1. Interpretation
.
1.1 For
purposes of this Amendment, unless otherwise defined herein, all
capitalized terms used herein shall have the meanings assigned
thereto in the Loan Agreement.
SECTION 2. Amendments .
2.1 Additional Definition
. As used herein, the following terms shall have the
meanings given to them below, and the Loan Agreement, the
Ratification Agreement and the other Financing Agreements are
hereby amended to include, in addition and not in limitation, the
following definitions:
(a) “Amendment
No. 9” shall mean Amendment No. 2 to Ratification Agreement
and Amendment No. 9 to Loan and Security Agreement, dated as of
July 9, 2009, by and among Borrowers, Guarantors, Agent and
Lenders, as it now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(b) “7/09
Budget” shall mean the Budget, in form and substance
satisfactory to Agent and Required Lenders, setting forth the
Projected Information with respect to the period commencing with
the week ending July 3, 2009 through and including the week ending
July 17, 2009.
2.2 Term . Section
13.1(a) of the Loan Agreement is hereby amended by deleting the
first sentence of such Section in its entirety and replacing it
with the following:
“This
Agreement and the other Financing Agreements shall become effective
as of the date set forth on the first page hereof and shall
continue in full force and effect for a term ending on the earlier
to occur of (i) July 17, 2009, (ii) the later of (A) the close of
business on the business day immediately preceding the Emerisque
Sale Closing Date and (B) the close of business on the business day
immediately preceding the closing date of the sale of substantially
all of the assets of Canadian Borrower, (iii) the date of the
confirmation of a plan of reorganization or liquidation for
any Debtor in the Chapter 11 Cases, and (iv)
the last termination date set forth in the Final Financing Order
(the earlier to occur of clauses (i), (ii), (iii) and (iv) referred
to herein as the “Maturity Date”); provided ,
that , (1)(x) from and after the Emerisque Sale Closing
Date, if the closing date of the sale of substantially all of the
assets of Canadian Borrower has not occurred and the Maturity Date
has not otherwise occurred, the US Commitments shall be reduced to
$0, and (y) from and after the closing date of the sale of
substantially all of the assets of Canadian Borrower, if the
Emerisque Sale Closing Date has not occurred and the Maturity Date
has not otherwise occurred, the Canadian Commitments shall be
reduced to $0, and (2) this Agreement and all other Financing
Agreements must be terminated simultaneously.”
2.3 Budget . Effective as
of the date of this Amendment, Section 5.3(c) of the Ratification
Agreement is hereby amended and restated in its entirety as
follows:
“Each
Borrower acknowledges, confirms and agrees that: (i) commencing
with the week ending May 29, 2009, for the trailing three (3) week
period ending on the Friday of each week, (i) the actual aggregate
weekly cash receipts during such period for all line items in the
Budget shall not be less than ninety (90%) percent of the projected
aggregate weekly cash receipts during such period for all such line
items in the Budget, (ii) commencing with the week ending May 29,
2009, for the trailing three (3) week period ending on the Friday
of each week, the actual aggregate weekly cash disbursements for
“employee related expenses”, “inventory related
expenses”, “overhead related expenses” (as each
such term is defined in the Budget) and all other expenses (taken
as a whole) during such period shall not be greater than one
hundred ten (110%) percent of the projected aggregate weekly cash
disbursements for each such category of expenses set forth in the
Budget during such period, (iii) commencing with the week ending
May 29, 2009, for the trailing three (3) week period ending on the
Friday of each week, the actual aggregate weekly cash disbursements
for all line items in the Budget during such period shall not be
greater than one hundred ten (110%) percent of the projected
aggregate weekly cash disbursements for all such line items set
forth in the Budget during such period, (iv) commencing with the
week ending July 3, 2009, for the one (1) week period ending on the
Friday of each week, the actual aggregate principal amount of Loans
and Letter of Credit Accommodations outstanding during such period
shall not be greater than one hundred (100%) percent of the
projected aggregate principal amount of Loans and Letter of Credit
Accommodations outstanding as set forth in the Budget during such
period, (v)
commencing with the week ending July 10, 2009,
the aggregate principal amount of the Loans and Letter of Credit
Accommodations outstanding at any time to Borrowers shall not
exceed the US Borrowing Base by more than $2,074,000, and (vi)
commencing with the week ending July 17, 2009, the aggregate
principal amount of the Loans and Letter of Credit Accommodations
outstanding at any time to Borrowers shall not exceed the US
Borrowing Base by more than $3,130,000.”
2.4 Sale Milestones
. Notwithstanding anything to the contrary contained in
Amendment No. 8, not later than July 17, 2009, (a) the Emerisque
Sale Closing Date shall occur, (b) Borrowers shall remit to the
Agent Payment Account on the Emerisque Sale Closing Date all of the
proceeds of such Sale, which shall include a cash amount equal to
or greater than the Minimum Sale Proceeds, for application by Agent
to the Obligations in accordance with the Financing Agreements, and
(c) Emerisque shall deliver to Agent, for the benefit of itself and
the other Lenders, an original subordinated promissory note in the
amount of $5,500,000 and containing such other terms satisfactory
to Agent and consistent with the Emerisque APA.
SECTION 3. 7/09 Budget
.
3.1 On or prior to the date of this
Amendment, Borrowers shall have prepared and delivered to Agent, in
form and substance satisfactory to Agent, the 7/09 Budget, a copy
of which is annexed hereto as Exhibit B.
3.2 Borrowers and Guarantors hereby
acknowledge, confirm and agree that (i) the 7/09 Budget shall in
all respects be subject to the terms and conditions of Section 5.3
of the Ratification Agree
