WAIVER
AGREEMENT, dated as of March 19, 1997 by and among Xxxxx
Xxxxxxxxx & Co. ("Lender"), Signal Apparel Company, Inc., The
Shirt Shed, Inc. and American Marketing Works, Inc. (collectively
"Borrowers").
WHEREAS, Lender and Borrowers entered a Credit Agreement
dated as of March 31, 1995, as amended by a First Amendment to
Credit Agreement dated as of August 10, 1995 (the "Credit
Agreement") by which Borrowers have borrowed from Lenders
approximately $32 million;
WHEREAS, the Lender purchased the Tranche A and Tranche B
notes totaling $6.5 million plus accrued interest from Nations
Bank and have sole control over those notes and the Company's
liability herein;
WHEREAS, Borrowers have defaulted and anticipate that they
may become or continue in default under certain provisions of the
Credit Agreement, in particular the payment of interest pursuant
to Section 2.5 of the Credit Agreement as well as the Tranche A
and Tranche B notes;
WHEREAS, Borrowers have requested of Lender a waiver of any
default under the Credit Agreement as well as the Tranche A and
Tranche B notes which may exist currently or which may arise
prior to January 1, 1998, subject to the terms hereof; and
WHEREAS, Borrower have requested of Lender an extension of
due dates on Tranchee A and Tranchee B notes to January 1, 1998.
NOW, THEREFORE, for and in consideration of the foregoing,
the sufficiency of which is acknowledged, the parties agree as
follows:
1. Lender hereby waives any default by Borrowers of its
payment obligations and of its financial representations and
warranties under the Credit Agreement, including its affirmative
covenants to maintain payments to senior lenders and to comply
with certain financial covenants pursuant to Section 7.3 and
8.13, respectively, of the Credit Agreement, which defaults
currently exist or may arise prior to January 1, 1998, subject in
all respects to the terms and conditions of Paragraphs 3 and 4
hereof. In particular, the foregoing waiver shall include those
Events of Default described in Sections 9(a), (c), (d) and (h) of
the Credit Agreement. The foregoing waiver shall apply equally
to Borrowers' obligation under the Note executed in connection
with the Credit Agreement.
2. The Lender extends the Borrowers' payment obligations
on the Tranche A and Tranche B notes formerly owned by Nations
Bank and purchase by Xxxxx Greenwood & Co. to January 1, 1998, as
well as, waives any default through such time by the Borrowers of
its interest payment obligations.
3. The foregoing waiver shall in no respect relieve
Borrowers from the right of Lenders to accrue late payment
penalties or interest pursuant to Section 2.5(a) of the Credit
Agreement, nor shall it apply to the Affirmative Covenants of
Section 7 or the Negative Covenants of Section 8, other than
Sections 7.3 and 8.13 and those covenants which pertain solely to
the payment of money to Lender or the Borrowers' senior lenders.
In particular, this agreement and the foregoing waiver shall
become null, void and of no effect upon the occurrence of the
Event of Default described in section 9(e) and (f) of the Credit
Agreement or upon the exercise by any of Borrowers' senior
lenders of any rights in and to the Collateral, as defined in the
Credit Agreement.
4. Upon entering the Credit Agreement, Lender and
Borrowers also executed an Intercreditor Agreement, dated as of
March 31, 1995, with BNY Financial Corporation and Greyrock
Capital Group, Inc., and this Waiver is granted pursuant to
Section 4.7 of such Agreement. To the extent that the existence
of this Wavier should adversely affect Lender's rights under such
Intercreditor Agreement or cause the other parties to such
Agreement to obtain additional rights in and to the Collateral,
as defined in the Credit Agreement, then this Wavier shall
immediately become null, void and of no effect.
5. This Wavier in no respect shall constitute an amendment
of the Credit Agreement but merely shall be a temporary waiver by
Lender of its rights to exercise its powers thereunder. All
terms of the Credit Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF the parties have caused this Waiver to be
executed on the day and date first above written.
SIGNAL APPAREL COMPANY, INC.
BY: /s/ Xxxxxxx X. Xxxxx
--------------------------
THE SHIRT SHED, INC.
BY: /s/ Xxxxxxx X. Xxxxx
--------------------------
AMERICAN MARKETING WORKS, INC.
BY: /s/ Xxxxxxx X. Xxxxx
--------------------------
XXXXX GREENWOOD & CO.
BY: /s/ Xxxx X. Xxxxxxxxx
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