Document:

EX-10.1

EXHIBIT 10.1

EXECUTION VERSION

AMENDMENT NUMBER TWO

TO AMENDED AND RESTATED FINANCING AGREEMENT

          This AMENDMENT NUMBER TWO TO AMENDED AND RESTATED FINANCING AGREEMENT (this
“Amendment”) is entered into as of March 30, 2009, by and among PRG-SCHULTZ INTERNATIONAL,
INC., a Georgia corporation (the “Parent”), PRG-SCHULTZ USA, INC., a Georgia corporation
(“PRG-Schultz USA” and together with the Parent, individually and collectively, jointly and
severally, the “Borrower”), the lenders party hereto (each a “Lender” and
collectively, the “Lenders”), ABLECO FINANCE LLC, a Delaware limited liability company
(“Ableco”), as collateral agent for the Lenders (in such capacity, together with any
successor collateral agent, the “Collateral Agent”), and WELLS FARGO FOOTHILL, INC., a
California corporation, as administrative agent for the Lenders (in such capacity, together with
any successor administrative agent, the “Administrative Agent” and together with the
Collateral Agent, each an “Agent” and collectively, the “Agents”) with reference to
the following:

          WHEREAS, the Borrower, each subsidiary of the Parent listed as a “Guarantor” on the
signature pages thereto (each a “Guarantor” and collectively, jointly and severally, the
“Guarantors”), the Agents and the Lenders are parties to that certain Amended and Restated
Financing Agreement, dated as of September 17, 2007 (as amended by that certain Amendment Number
One to Amended and Restated Financing Agreement dated as of March 28, 2008 and as further amended,
restated, supplemented, or otherwise modified from time to time, the “Financing
Agreement”);

          WHEREAS, the Borrower has requested that the Agents and Lenders amend the Financing Agreement
as set forth herein; and

          WHEREAS, upon the terms and conditions set forth herein, the Agents and Lenders are willing to
accommodate the Borrower’s request.

          NOW, THEREFORE, in consideration of the foregoing and the mutual covenants herein contained,
and for other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

     1. Defined Terms. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Financing Agreement, as amended hereby.

     2. Amendments to Financing Agreement.

          (a) Section 1.01 of the Financing Agreement is hereby amended by adding the following
new definitions of “AR Addition”, “AR Availability” and “Second Amendment Effective Date” in proper
alphabetical order:

               ““AR Addition” means 0.25 multiplied by AR Availability.”

 

 

               ““AR Availability” means the sum of (A) up to 85% of the value of the Net
Amount of Eligible Accounts Receivable, less the amount, if any, of the Dilution
Reserve, plus (B) the lesser of (x) up to 20% of the Eligible Backlog, and (y) 50%
of the amount determined under clause (A) of this definition.”

               ““Second Amendment Effective Date” means March 30, 2009.”

          (b) The definition of “Borrowing Base Addition” in Section 1.01 of the
Financing Agreement is hereby amended and restated in its entirety as follows:

               “Borrowing Base Addition” means, as of any date of determination during
any period set forth in the below table, the amount set forth opposite such period
in the below table:

	 	 	 	 	 	 	 	 
	 
	 	Applicable Period	 	 	Borrowing Base Addition	 
	 	During the period from March 28,
2008 to and including September 30,
2008

	 	 	$10,000,000	 	 	 
	 	During the period from October 1,
2008 to and including December 31,
2008

	 	 	$9,750,000	 	 	 
	 	During the period from January 1 ,
2009 to the Second Amendment
Effective Date

	 	 	$9,500,000	 	 	 
	 	During the period from and including
the Second Amendment Effective Date
to and including June 30, 2009

	 	 	The lesser of $3,000,000 and AR
Addition
	 
	 	During the period from July 1, 2009
to and including September 30, 2009

	 	 	The lesser of $2,900,000 and AR
Addition
	 
	 	During the period from October 1,
2009 to and including December 31,
2009

	 	 	The lesser of $2,800,000 and AR
Addition
	 
	 	During the period from January 1,
2010 to and including March 31, 2010

	 	 	The lesser of $2,700,000 and AR
Addition
	 
	 	During the period from April 1, 2010
to and including June 30, 2010

	 	 	The lesser of $2,600,000 and AR
Addition
	 
	 	During the period from July 1, 2010
to and including September 30, 2010

	 	 	The lesser of $2,500,000 and AR
Addition
	 
	 	During the period from October 1,
2010 to and including December 31,
2010

	 	 	The lesser of $2,400,000 and AR
Addition
	 
	 

2

 

	 	 	 	 	 	 	 	 
	 
	 	Applicable Period	 	 	Borrowing Base Addition	 
	 	During the period from January 1,
2011 to and including March 31, 2011

	 	 	The lesser of $2,300,000 and AR
Addition
	 
	 	During the period from April 1, 2011
to and including June 30, 2011

	 	 	The lesser of $2,200,000 and AR
Addition
	 
	 	During the period from July 1, 2011
to and including September 30, 2011

	 	 	The lesser of $2,100,000 and AR
Addition
	 
	 	During the period from October 1,
2011 to and including December 31,
2011

	 	 	The lesser of $2,000,000 and AR
Addition
	 
	 

          (c) Section 7.02(h) of the Financing Agreement is hereby amended by deleting clause
(D) of the proviso set forth therein and replacing it with the following:

“(D) (i) on or before March 31, 2009, the Parent may purchase up to $2,000,000 in the
aggregate of the Parent’s Capital Stock on the open market or through privately-negotiated
transactions and (ii) from April 1, 2009 until March 31, 2010, the Parent may purchase up to
$5,000,000 in the aggregate of the Parent’s Capital Stock on the open market or through
privately-negotiated transactions so long as (x) no Default or Event of Default shall have
occurred and be continuing either immediately before or after giving effect thereto and (y)
after giving effect thereto, the aggregate outstanding principal amount of Revolving Loans
does not exceed $10,000,000.”

          (d) Section 7.03(b) of the Financing Agreement is hereby amended by deleting the table
appearing therein and replacing it with the following:

	 	 	 	 	 	 
	 
	 	“Fiscal Quarter End	 	 	Fixed Charge Coverage Ratio	 
	 	September 30, 2007

	 	 	1.40:1.00	 
	 	December 31, 2007

	 	 	1.30:1.00	 
	 	March 31, 2008

	 	 	1.50:1.00	 
	 	June 30, 2008

	 	 	1.30:1.00	 
	 	September 30, 2008

	 	 	1.90:1.00	 
	 	December 31, 2008

	 	 	1.90:1.00	 
	 	March 31, 2009

	 	 	1.80:1.00	 
	 	June 30, 2009

	 	 	1.50:1.00	 
	 	September 30, 2009

	 	 	1.50:1.00	 
	 	December 31, 2009

	 	 	1.80:1.00	 
	 	March 31, 2010

	 	 	1.85:1.00	 
	 	June 30, 2010

	 	 	1.90:1.00	 
	 	September 30, 2010

	 	 	1.90:1.00	 
	 	December 31, 2010

	 	 	1.90:1.00	 
	 	March 31, 2011

	 	 	2.00:1.00	 
	 	June 30, 2011

	 	 	2.00:1.00	 
	 	September 30, 2011

	 	 	2.00:1.00	 
	 	December 31, 2011

	 	 	2.00:1.00”	 
	 

3

 

          (e) Section 7.03(c) of the Financing Agreement is hereby amended by deleting the table
appearing therein and replacing it with the following:

	 	 	 	 	 	 	 	 
	 
	 	“Fiscal Quarter End	 	 	Consolidated EBITDA	 
	 	September 30, 2007

	 	 	 	29,100,000	 	 
	 	December 31, 2007

	 	 	 	28,400,000	 	 
	 	March 31, 2008

	 	 	 	25,700,000	 	 
	 	June 30, 2008

	 	 	 	25,000,000	 	 
	 	September 30, 2008

	 	 	 	26,900,000	 	 
	 	December 31, 2008

	 	 	 	24,000,000	 	 
	 	March 31, 2009

	 	 	 	29,250,000	 	 
	 	June 30, 2009

	 	 	 	26,000,000	 	 
	 	September 30, 2009

	 	 	 	26,000,000	 	 
	 	December 31, 2009

	 	 	 	27,000,000	 	 
	 	March 31, 2010

	 	 	 	29,750,000	 	 
	 	June 30, 2010

	 	 	 	30,850,000	 	 
	 	September 30, 2010

	 	 	 	29,450,000	 	 
	 	December 31, 2010

	 	 	 	27,050,000	 	 
	 	March 31, 2011

	 	 	 	27,600,000	 	 
	 	June 30, 2011

	 	 	 	28,150,000	 	 
	 	September 30, 2011

	 	 	 	28,750,000	 	 
	 	December 31, 2011

	 	 	 	29,125,000	” 	 
	 

     3. Conditions Precedent to Amendment. The satisfaction of each of the following shall
constitute conditions precedent to the effectiveness of this Amendment and each and every provision
hereof:

          (a) The Collateral Agent shall have received this Amendment, duly executed by the parties
hereto, and the same shall be in full force and effect.

          (b) The Collateral Agent shall have received the reaffirmation and consent of each Guarantor
attached hereto as Exhibit A, duly executed and delivered by each Guarantor.

          (c) The Borrower shall pay concurrently with the closing of the transactions evidenced by this
Amendment, all fees, costs, expenses and taxes then payable pursuant to Section 2.06
(including the fees due and payable under the Fee Letter, if any) or
12.04 (including the attorneys fees of the Agents incurred in
connection with this Amendment) of the Financing Agreement.

4

 

          (d) After giving effect to this Amendment, the representations and warranties herein and in
the Financing Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date hereof, as though made on such date (except to the extent that such
representations and warranties relate solely to an earlier date).

          (e) After giving effect to this Amendment, no Default or Event of Default shall have occurred
and be continuing on the date hereof.

          (f) No injunction, writ, restraining order, or other order of any nature prohibiting, directly
or indirectly, the consummation of the transactions contemplated herein shall have been issued and
remain in force by any Governmental Authority against the Borrower, any Agent, or any Lender.

     4. Representations and Warranties. The Borrower represents and warrants to the Agents
and Lenders that (a) the execution, delivery, and performance of this Amendment and of the
Financing Agreement, as amended hereby, (i) are within its powers, (ii) have been duly authorized
by all necessary action, and (iii) are not in contravention of any law applicable to it or of the
terms of its governing documents, or of any contract or undertaking to which it is a party or by
which any of its properties may be bound or affected; (b) this Amendment and the Financing
Agreement, as amended hereby, are legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms, except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or other similar laws; (c) after
giving effect to this Amendment, no Default or Event of Default has occurred and is continuing on
the date hereof or as of the date upon which the conditions precedent set forth herein, are
satisfied; and (d) the Borrower is not in violation of its organizational documents or any law,
rule, regulation, judgment or order of any Governmental Authority applicable to it or any of its
property or assets, or any material term of any agreement or instrument (including, without
limitation, any Material Contract) binding on or otherwise affecting it or any of its properties,
except where such violation could not reasonably be expected to have a Material Adverse Effect.

     5. Advice of Counsel. The Borrower has had advice of independent counsel of its own
choosing in negotiations for and the preparation of this Amendment, has read this Amendment in full
and final form, and has had this Amendment fully explained to it to its satisfaction.

     6. Payment of Costs and Fees. The Borrower shall pay to each Agent all costs, all
reasonable out-of-pocket expenses, and all fees and charges of every kind in connection with the
preparation, negotiation, execution and delivery of this Amendment and any documents and
instruments relating hereto. In addition thereto, the Borrower agrees to reimburse each Agent on
demand for its costs arising out of this Amendment and all documents or instruments relating hereto
(which costs may include the reasonable fees and expenses of any attorneys retained by any Agent).

5

 

     7. Reaffirmation of Loan Documents. By executing this Amendment, the Borrower hereby
restates, ratifies and reaffirms each and every term and condition set forth in the Financing
Agreement and the other Loan Documents to which it is a party effective as of the date hereof. By
executing this Amendment, the Borrower hereby acknowledges, consents and agrees that all of its
obligations and liabilities under the Financing Agreement (as amended hereby) remain in full force
and effect, and that the execution and delivery of this Amendment and any and all documents
executed in connection therewith shall not alter, amend, reduce or modify its obligations and
liability under the Financing Agreement (as amended hereby) or any of the other Loan Documents to
which it is a party.

     8. Choice of Law. The validity of this Amendment, its construction, interpretation
and enforcement, the rights of the parties hereunder, shall be determined under, governed by, and
construed in accordance with the laws of the State of New York.

     9. Counterpart Execution. This Amendment may be executed in any number of
counterparts, all of which when taken together shall constitute one and the same instrument, and
any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery of
an executed counterpart of this Amendment by telefacsimile or electronic mail shall be equally as
effective as delivery of an original executed counterpart of this Amendment. Any party delivering
an executed counterpart of this Amendment by telefacsimile or electronic mail also shall deliver an
original executed counterpart of this Amendment, but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.

     10. Effect on Loan Documents.

          (a) The Financing Agreement, as amended hereby, and each of the other Loan Documents shall be
and remain in full force and effect in accordance with their respective terms and hereby are
ratified and confirmed in all respects. The execution, delivery, and performance of this Amendment
shall not operate, except as expressly set forth herein, as a modification or waiver of any right,
power, or remedy of any Agent or any Lender under the Financing Agreement or any other Loan
Document. The modifications contained herein are limited to the specifics hereof (including facts
or occurrences on which the same are based), shall not apply with respect to any facts or
occurrences other than those on which the same are based, shall not excuse any non-compliance with
the Loan Documents, and shall not operate as a consent to any matter under the Loan Documents.

          (b) To the extent that any such Loan Document purports to assign or pledge to the Collateral
Agent or to grant to the Collateral Agent a security interest in or lien on, any collateral as
security for the Obligations from time to time existing in respect of the Financing Agreement
immediately prior to the date hereof, such pledge or assignment or grant of the security interest
or lien is hereby ratified and confirmed in all respects.

          (c) Upon and after the effectiveness of this Amendment, each reference in the Financing
Agreement to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to
the Financing Agreement, and each reference in the other Loan Documents to “the Financing
Agreement”, “thereunder”, “therein”,
“thereof or words of like import referring to the Financing
Agreement, shall mean and be a reference to the Financing Agreement
as modified and amended hereby.

6

 

          (d) To the extent that any terms and conditions in any of the Loan Documents shall contradict
or be in conflict with any terms or conditions of the Financing Agreement, after giving effect to
this Amendment, such terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Financing Agreement as modified or amended hereby.

          (e) This Amendment is a Loan Document.

     11. Entire Agreement. This Amendment embodies the entire understanding and agreement
among the parties hereto with respect to the subject matter hereof and supersedes any and all prior
or contemporaneous agreements or understandings with respect to the subject matter hereof, whether
express or implied, oral or written.

[signature page follows]

7

 

     IN WITNESS WHEREOF, the parties have entered into this Amendment as of the date first above
written.

	 	 	 	 	 
	 	BORROWER:

PRG-SCHULTZ INTERNATIONAL, INC.,

a Georgia corporation

 	 
	 	By:  	/s/
Peter Limeri 	 
	 	 	Name: Peter Limeri
	 	 	Title:   CFO
	 

	 	 	 	 	 
	 	PRG-SCHULTZ USA, INC.,

a Georgia corporation

 	 
	 	By:  	/s/
Peter Limeri 	 
	 	 	Name: Peter Limeri
	 	 	Title:   CFO
	 

[SIGNATURE PAGE TO AMENDMENT NUMBER TWO

TO AMENDED AND RESTATED FINANCING AGREEMENT]

 

 

	 	 	 	 	 
	 	AGENTS AND LENDERS:

ABLECO FINANCE LLC, as Collateral Agent and, on

behalf of itself and its affiliate assign, as a

Lender

 	 
	 	By:  	/s/
Eric Miller 	 
	 	 	Name: Eric Miller
	 	 	Title:   Senior Vice President
	 

	 	 	 	 	 
	 	WELLS FARGO FOOTHILL, INC., as the

Administrative Agent and a Lender

 	 
	 	By:  	/s/
Robert Bernier 	 
	 	 	Name: Robert Bernier
	 	 	Title:   V.P.
	 

	 	 	 	 	 
	 	PETRUS PRIVATE INVESTMENTS, L.P.,

as a Lender

 	 
	 	By:  	/s/
David Radunsky 	 
	 	 	Name: David Radunsky
	 	 	Title:   Chief Operating Officer
	 

[SIGNATURE PAGE TO AMENDMENT NUMBER TWO

TO AMENDED AND RESTATED FINANCING AGREEMENT]

 

 

Exhibit A

REAFFIRMATION AND CONSENT

     All capitalized terms used herein but not otherwise defined herein shall have the meanings
ascribed to them in that certain Amended and Restated Financing Agreement dated as of September 17,
2007 (as amended by that certain Amendment Number One to Amended and Restated Financing Agreement
dated as of March 28, 2008 and as further amended, restated, supplemented or otherwise modified
from time to time, the “Financing Agreement”) by and among PRG-SCHULTZ INTERNATIONAL, INC.,
a Georgia corporation (the “Parent”), PRG-SCHULTZ USA, INC., a Georgia corporation
(“PRG-Schultz USA” and together with the Parent, individually and collectively, jointly and
severally, the “Borrower”), each subsidiary of the Parent listed as a “Guarantor”
on the signature pages thereto (each a “Guarantor” and collectively, jointly and severally,
the “Guarantors”), the lenders from time to time party thereto (each a “Lender” and
collectively, the “Lenders”), ABLECO FINANCE LLC, a Delaware limited liability company
(“Ableco”), as collateral agent for the Lenders (in such capacity, together with any
successor collateral agent, the “Collateral Agent”), and WELLS FARGO FOOTHILL, INC., a
California corporation, as administrative agent for the Lenders (in such capacity, together with
any successor administrative agent, the “Administrative Agent” and together with the
Collateral Agent, each an “Agent” and collectively, the “Agents”) or in Amendment
Number Two to Amended and Restated Financing Agreement, dated as of March 30, 2009 (the
“Amendment”), by and among the Borrower, the Lenders, and the Agents. The undersigned each
hereby (a) represents and warrants to the Collateral Agent that the execution, delivery, and
performance of this Reaffirmation and Consent are within its powers, have been duly authorized by
all necessary action, and are not in contravention of any law, rule, or regulation, or any order,
judgment, decree, writ, injunction, or award of any arbitrator, court, or governmental authority,
or of the terms of its charter or bylaws, or of any contract or undertaking to which it is a party
or by which any of its properties may be bound or affected; (b) consents to the amendment of the
Financing Agreement as set forth in the Amendment; (c) acknowledges and reaffirms its obligations
owing to the Agents and the Lenders under any Loan Documents to which it is a party; and (d) agrees
that each of the Loan Documents to which it is a party is and shall remain in full force and
effect. Although the undersigned each has been informed of the matters set forth herein and has
acknowledged and agreed to the same, they each understand that neither any Agent nor any Lender has
any obligations to inform it of such matters in the future or to seek its acknowledgment or
agreement to future amendments, and nothing herein shall create such a duty. Delivery of an
executed counterpart of this Reaffirmation and Consent by telefacsimile shall be equally as
effective as delivery of an original executed counterpart of this Reaffirmation and Consent. Any
party delivering an executed counterpart of this Reaffirmation and Consent by telefacsimile also
shall deliver an original executed counterpart of this Reaffirmation and Consent but the failure to
deliver an original executed counterpart shall not affect the validity, enforceability, and binding
effect of this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed by the
laws of the State of New York.

 

 

     IN WITNESS WHEREOF, the undersigned have each caused this Reaffirmation and Consent to be
executed as of the date of the Amendment,

	 	 	 	 	 
	 	PRG-SCHULTZ CANADA, LLC,

a Georgia limited liability company

THE PROFIT RECOVERY GROUP

MEXICO, INC.,

a Georgia corporation

PRG-SCHULTZ PUERTO RICO, INC.,

a Georgia corporation

THE PROFIT RECOVERY GROUP

COSTA RICA, INC.,

a Georgia corporation

PRG-SCHULTZ CHILE, INC.,

a Georgia corporation

PRG INTERNATIONAL, INC.,

a Georgia corporation

PRGFS, INC.,

a Delaware corporation

PRGTS, LLC,

a Georgia limited liability company

HS&A ACQUISITION — UK, INC.,

a Texas corporation

PRG-SCHULTZ AUSTRALIA, INC.,

a Georgia corporation

PRG-SCHULTZ BELGIUM, INC.,

a Georgia corporation

PRG-SCHULTZ EUROPE, INC.,

a Georgia corporation

THE PROFIT RECOVERY GROUP

GERMANY, INC.,

a Georgia corporation

PRG-SCHULTZ FRANCE, INC.,

a Georgia corporation

THE PROFIT RECOVERY GROUP

NETHERLANDS, INC.,

a Georgia corporation

THE PROFIT RECOVERY GROUP NEW

ZEALAND, INC.,

a Georgia corporation

PRG-SCHULTZ SCANDINAVIA, INC.,

a Georgia corporation

PRG-SCHULTZ PORTUGAL, INC.,

a Georgia corporation

PRG-SCHULTZ SWITZERLAND, INC.,

a Georgia corporation

THE PROFIT RECOVERY GROUP

ITALY, INC.,

a Georgia corporation

THE PROFIT RECOVERY GROUP SPAIN,

INC.,

a Georgia corporation

THE PROFIT RECOVERY GROUP ASIA,

INC.,

a Georgia corporation

THE PROFIT RECOVERY GROUP

SOUTH AFRICA, INC.,

a Georgia corporation

PRG-SCHULTZ JAPAN, INC.,

a Georgia corporation

PRG-SCHULTZ PUERTO RICO,

a Puerto Rico foreign partnership

 	 
	 	By:  	/s/
Peter Limeri 	 
	 	 	Name: Peter Limeri
	 	 	Title:   CFO
	 

[SIGNATURE PAGE TO EXHIBIT A TO AMENDMENT NUMBER TWO

TO AMENDED AND RESTATED FINANCING AGREEMENT]EX-10.1

Exhibit 10.1

AMENDMENT NO. 2

TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

     THIS AMENDMENT NO. 2 (this “Amendment No. 2”) is entered into as of March 31, 2009, by and
among ROCKY BRANDS, INC., a corporation organized and existing under the laws of the State of Ohio
(“Parent”), LIFESTYLE FOOTWEAR, INC., a corporation organized and existing under the laws of the
State of Delaware, ROCKY BRANDS WHOLESALE LLC, a limited liability company organized and existing
under the laws of the State of Delaware, LEHIGH OUTFITTERS, LLC, a limited liability company
organized and existing under the laws of the State of Delaware (and formerly known as Rocky Brands
Retail LLC), ROCKY BRANDS INTERNATIONAL, LLC, a limited liability company organized and existing
under the laws of the State of Ohio (the foregoing entities, jointly and severally, as the context
requires, “Borrower” or “Borrowers”), the financial institution(s) listed on the signature pages
hereof and their respective successors and Eligible Assignees (each individually a “Lender” and
collectively, “Lenders”), GMAC COMMERCIAL FINANCE LLC, a Delaware limited liability company (in its
individual capacity, “GMAC CF”), as administrative agent and sole lead arranger for the Lenders (in
such capacities, the “Agent”) and BANK OF AMERICA, N.A., as syndication agent (in such capacity,
the “Syndication Agent”) and CHARTER ONE BANK, N.A., as documentation agent (in such capacity, the
“Documentation Agent”).

BACKGROUND

     Borrowers, Lenders, Agent, Syndication Agent and Documentation Agent are parties to an Amended
and Restated Loan and Security Agreement, dated as of May 25, 2007 (as amended, restated, modified
and/or supplemented from time to time, the “Loan Agreement”) pursuant to which Agent and Lenders
provide Borrowers with certain financial accommodations.

     Borrowers have requested that Agent and Lenders make certain amendments to the Loan Agreement,
and Agent and Lenders are willing to do so on the terms and conditions hereinafter set forth.

     NOW, THEREFORE, in consideration of any loan or advance or grant of credit heretofore or
hereafter made to or for the account of Borrowers by Agent and Lenders, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto hereby agree as follows:

     1. Definitions. All capitalized terms not otherwise defined herein shall have the
meanings given to them in the Loan Agreement.

     2. Amendments to Loan Agreement. Subject to satisfaction of the conditions precedent
set forth in Section 3 below, the Loan Agreement is hereby amended as follows:

     (a) Section 1.1 is amended as follows:

 

 

(i) The following defined terms are amended as
follows:

(A) The definition of “Applicable Margin” shall be amended and restated as
follows:

“Applicable Margin” for each type of Loan shall mean, commencing as of
the Amendment No. 2 Effective Date and continuing until the First Adjustment
Date (as hereafter defined), the applicable percentage specified below:

	 	 	 	 	 	 	 	 	 	 
	Type	 		Applicable Margin	 	Applicable Margin
	of Loan	 		For Base Rate Loans	 	For LIBOR Loans
	Revolving Advances
	 		 	2.25	%	 	 	3.75	%

Thereafter on a quarterly basis, effective as of the first day following
receipt by Agent of the internal financial statements of Rocky on a
Consolidated Basis required under Section 5.1(E)(2) for the previous fiscal
quarter (each day of such delivery, an “Adjustment Date”), commencing with
the first Adjustment Date occurring after the Amendment No. 2 Effective Date
(the “First Adjustment Date”), the Applicable Margin for each type of Loan
shall be adjusted, if necessary, to the applicable percent per annum set
forth in the pricing table set forth below corresponding to the Total
Leverage Ratio for the trailing twelve month period ending on the last day
of the most recently completed fiscal quarter prior to the applicable
Adjustment Date (each such period, a “Calculation Period”):

	 	 	 	 	 	 	 	 	 	 
	 	 		Applicable Margin for	 	Applicable Margin for
	Total Leverage Ratio	 		Base Rate Loans	 	LIBOR Loans
	Greater than or equal
to 4.0 to 1.0
	 		 	2.25	%	 	 	3.75	%
	Greater than or equal
to 3.0 to 1.0 but
less than 4.0 to 1.0
	 		 	2.00	%	 	 	3.50	%
	Greater than or equal
to 2.0 to 1.0 but
less than 3.0 to 1.0
	 		 	1.75	%	 	 	3.25	%
	Less than 2.0 to 1.0
	 		 	1.50	%	 	 	3.00	%

If Borrower shall fail to timely deliver the financial statements,
certificates and/or other information required under Section 5.1(E)(2),

2

 

each Applicable Margin shall be conclusively presumed to equal the highest
Applicable Margin specified in the pricing table set forth above for the
period commencing on the required delivery date of such financial
statements, certificates and/or other information until the delivery
thereof.”

(B) The definition of “Borrowing Base” shall be amended by deleting
“$50,000,000” from clause (b)(i) and substituting “$42,500,000” therefor.

(C) The definition of “Lender Letter of Credit shall be amended and restated
as follows:

“Lender Letter of Credit” has the meaning assigned to that term in Section
2.1(F).”

(D) The definition of “Revolving Loan Commitment” shall be amended by (x)
deleting the words “in the aggregate amount set forth on the signature page
of this Agreement opposite such Lender’s signature” and substituting “in the
aggregate amount set forth on Schedule A to Amendment No. 2 to this
Agreement dated as of March 31, 2009” and (y) by deleting the words “Section
2.1(E)” therein and replacing them with the words “Section 2.1(F)”.

(ii) The following defined term is added in its appropriate alphabetical
order:

(A) “Amendment No. 2 Effective Date” shall mean March 31, 2009.

     (b) The second sentence of Section 2.1(A) shall be amended by deleting “$100,000,000”
therefrom and substituting “$85,000,000” therefor.

     (c) Section 2.3 shall be amended as follows:

	 	(i)	 	By deleting from Section 2.3(A)(3) “3/8th of 1%
(0.375%)” and substituting therefor “7/8th of 1% (0.875%)”;
	 
	 	(ii)	 	By deleting from the first sentence of Section
2.3(B) “2.75% per annum until the first Adjustment Date and
thereafter”; and
	 
	 	(iii)	 	By deleting from Section 2.3(E) “December 13,
2004” and substituting therefor “March 6, 2009”.

     (d) Section 2.5 shall be amended as follows:

By deleting from clause (a) thereof “January 5, 2010” and substituting
therefor “April 30, 2012”; and

3

 

          (e) Section 5.3(B) shall be amended and restated by deleting such Section 5.3(B) in its
entirety and by substituting the following:

          “(B) Capital Expenditures. Capital Expenditures made by Rocky on a Consolidated Basis during any
Fiscal Year (or, as applicable, with respect to the fiscal quarter ending March 31, 2012) set forth
below, in the aggregate together with all expenditures in respect of Capital Leases, that would
exceed the amount set forth opposite each Fiscal Year below (or, as applicable, such fiscal quarter
ending March 31, 2012 ); provided, that any unused portion of any such annual amount in each Fiscal
Year, up to twenty-five percent (25%) of such maximum amount set forth below may be carried over
solely to the immediately succeeding Fiscal Year:

	 	 	 	 	 
	Fiscal Year ending December 31, 2007
	 	$	6,500,000	 
	Fiscal Year ending December 31, 2008
	 	$	6,500,000	 
	Fiscal Year ending December 31, 2009
	 	$	6,500,000	 
	Fiscal Year ending December 31, 2010
	 	$	6,500,000	 
	Fiscal Year ending December 31, 2011
	 	$	6,500,000	 
	Fiscal Quarter ending March 31, 2012
	 	$	1,600,000”	 

     3. Conditions of Effectiveness. This Amendment No. 2 shall become effective upon
Agent’s receipt of:

          (a) This Amendment No. 2 duly executed by Borrowers, Agent and all Lenders;

          (b) Payment of an amendment consent fee in the amount of $1,062,500 for the ratable benefit of
all Lenders, which fee shall be fully earned and non-refundable on the Amendment No. 2 Effective
Date;

          (c) such other certificates, instruments, documents and agreements as may reasonably be
required by Agent or its counsel, each of which shall be in form and substance satisfactory to
Agent and its counsel.

     4. Representations and Warranties. Each of the Borrowers hereby represents, warrants
and covenants as follows:

          (a) This Amendment No. 2, the Loan Agreement and the other Loan Documents are and shall
continue to be legal, valid and binding obligations of each of the Borrowers, respectively, and are
enforceable against each Borrower in accordance with their respective terms except as
enforceability may be limited by applicable bankruptcy, insolvency, moratorium or other laws
affecting the enforcement of creditors’ rights generally and by general principles of equity.

          (b) Upon the effectiveness of this Amendment No. 2, each Borrower hereby reaffirms all
covenants, representations and warranties made in the Loan Agreement and the other Loan Documents
and agree that all such covenants, representations and warranties shall be deemed to have been
remade and are true and correct in all material respects as of the effective

4

 

date of this Amendment No. 2, except to the extent that any representation or warranty
expressly relates to an earlier date, after giving effect to this Amendment No. 2.

          (c) Each Borrower has the corporate power, and has been duly authorized by all requisite
corporate action, to execute and deliver this Amendment No. 2 and to perform its obligations
hereunder. This Amendment No. 2 has been duly executed and delivered by each Borrower.

          (d) Each Borrower has no defense, counterclaim or offset with respect to any of the Loan
Documents.

          (e) The Loan Documents are in full force and effect, and are hereby ratified and confirmed.

          (f) Agent and Lenders have and will continue to have a valid first priority lien and security
interest in all Collateral except for liens permitted by the Loan Agreement, and each Borrower
expressly reaffirms all guarantees, security interests and liens granted to Agent and Lenders
pursuant to the Loan Documents.

          (g) No Defaults or Events of Default are in existence.

     5. Effect of Agreement.

          (a) Except as specifically modified herein, the Loan Agreement, and all other documents,
instruments and agreements executed and/or delivered in connection therewith, shall remain in full
force and effect, and are hereby ratified and confirmed.

          (b) The execution, delivery and effectiveness of Amendment No. 2 shall not operate as a
waiver of any right, power or remedy of Agent or any Lender, nor constitute a waiver of any
provision of the Loan Agreement, or any other documents, instruments or agreements executed and/or
delivered under or in connection therewith.

     6. Governing Law. This Amendment No. 2 shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns and shall be governed by and
construed in accordance with the laws of the State of New York.

     7. Headings. Section headings in this Amendment No. 2 are included herein for
convenience of reference only and shall not constitute a part of this Amendment No. 2 for any other
purpose.

     8. Counterparts; Facsimile. This Amendment No. 2 may be executed by the parties
hereto in one or more counterparts, each of which shall be deemed an original and all of which when
taken together shall constitute one and the same agreement. Any signature delivered by a party by
facsimile or other electronic transmission (including in “pdf” format) shall be deemed to be an
original signature hereto.

[signature pages follow]

5

 

     IN WITNESS WHEREOF, this Amendment No. 2 has been duly executed as of the day and year first
written above.

	 	 	 	 	 	 	 
	 	 	ROCKY BRANDS, INC.	 	 
	 	 	LIFESTYLE FOOTWEAR, INC.	 	 
	 	 	ROCKY BRANDS WHOLESALE LLC	 	 
	 	 	LEHIGH OUTFITTERS, LLC	 	 
	 	 	ROCKY BRANDS INTERNATIONAL, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ James E. McDonald
 

James E. McDonald
	 	 
	 

	 	Title:
	 	Executive VP and Chief Financial Officer	 	 

Signature Page to Amendment No. 2 — 1610253

 

 

	 	 	 	 	 	 	 
	 	 	GMAC COMMERCIAL FINANCE LLC, as Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Thomas Brent
 

Thomas Brent
	 	 
	 

	 	Title:
	 	Director	 	 
	 
	 	 	 	 	 	 
	 	 	GMAC COMMERCIAL FINANCE LLC,
as Lender and as agent for CF Blackburn LLC, as Lender	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Thomas Brent
 

Thomas Brent
	 	 
	 

	 	Title:
	 	Director	 	 

Signature Page to Amendment No. 2 — 1610253

 

 

	 	 	 	 	 	 	 
	 

	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ William J. Wilson
 

William J. Wilson
	 	 
	 

	 	Title:
	 	Senior Vice President	 	 

Signature Page to Amendment No. 2 — 1610253

 

 

	 	 	 	 	 	 	 
	 	 	CHARTER ONE BANK, NA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ James G. Zamborsky
 

James G. Zamborsky
	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature Page to Amendment No. 2 — 1610253

 

 

	 	 	 	 	 	 	 
	 	 	PNC BANK, NATIONAL ASSOCIATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ Erin L. Moore
 

Erin L. Moore
	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature Page to Amendment No. 2 — 1610253

 

 

	 	 	 	 	 	 	 
	 

	 	COMERCIA BANK
	 	 
	 
	 	 	 	 	 	 
	 

	 	By:

Name:
	 	/s/ David R. Alexander
 

David R. Alexander
	 	 
	 

	 	Title:
	 	Vice President	 	 

Signature Page to Amendment No. 2 — 1610253

 

 

SCHEDULE A

REVOLVING LOAN COMMITMENTS

	 	 	 	 	 
	Lender	 	               Revolving Loan Commitment
	GMAC Commercial Finance LLC
	 	$	23,050,844.00	 
	 
	Bank of America, N.A.
	 	$	18,008,474.00	 
	 
	Charter One Bank, NA
	 	$	15,127,118.50	 
	 
	PNC Bank, National Association
	 	$	15,127,118.50	 
	 
	Comerica Bank
	 	$	13,686,445.00	 

Signature Page to Amendment No. 2 — 1610253

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