EXHIBIT 4.3
April 22, 1998
London Fog Industries, Inc.
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxx, Xxxxxxxx 00000
Pacific Trail, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
The Scranton Outlet Corporation
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxx, Xxxxxxxx 00000
Re: Amendment No. 2 to Loan and Security Agreement
Gentlemen:
Reference is made to the Loan and Security Agreement (the "Loan
Agreement"), dated as of May 15, 1997, by and among Congress Financial
Corporation ("Lender"), London Fog Industries, Inc. ("LFI"), Pacific Trail, Inc.
("PTI") and The Scranton Outlet Corporation ("SCO"; and together with LFI and
PTI, collectively, "Borrowers"), as amended by Amendment No. 1 to Loan and
Security Agreement, dated as of February 27, 1998, together with all other
agreements, documents, supplements and instruments now or at any time hereafter
executed and/or delivered by Borrowers or any other person, with, to or in favor
of Lender in connection therewith (all of the foregoing, together with this
Amendment and the other agreements and instruments delivered hereunder, as the
same now exist or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced, collectively, the "Financing Agreements"). All
capitalized terms used herein and not otherwise defined herein shall have the
meanings given to them in the Loan Agreement.
Borrowers and Guarantors have requested that Lender agree to amend certain
provisions of Section 9.11 of the Loan Agreement, and Lender is willing to do so
to the extent and subject to the terms and conditions set forth herein.
In consideration of the foregoing, the mutual agreements and covenants
contained in this Amendment No. 2 to Loan and Security Agreement (this
"Amendment"), and other good and valuable consideration, the adequacy and
sufficiency of which are hereby acknowledged, Borrowers and Lender agree as
follows:
1. Dividends and Redemptions. Section 9.11 of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"9.11 Dividends and Redemptions. No Borrower shall, directly or indirectly,
declare or pay any dividends on account of any shares of any class of
Capital Stock of any Borrower now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or redeem, retire,
defease, purchase or otherwise acquire any shares of any class of Capital
Stock (or set aside or otherwise deposit or invest any sums for such
purpose) for any consideration other than common stock, or apply or set
apart any sum, or make any other distrubution (by reduction of capital or
otherwise) in respect of any such shares, or agree to do any of the
foregoing, (other than by delivery of a subordinated note evidencing
indebtedness permitted under Section 9.9(g) hereof), except that, provided
no Event of Default, and no event or state of facts that would, with notice
or passage of time or both, constitute an Event of Default, exists or has
occurred and is continuing, or would exist or occur after giving effect to
such redemption or repurchase or any payment therefor, LFI may, out of
legally available funds therefor: (i) redeem and/or repurchase certain
shares and options to purchase shares of Capital Stock of LFI owned by
certain employees of LFI, pursuant to the exercise of the put options
described in Section 9.9(g) hereof ("Management Put Repurchases"), but not
to exceed the aggregate amount which, when added to the amounts expended as
permitted under clauses (ii) and (iii) hereof in a given fiscal year of
LFI, does not exceed the amount of $350,000 so expended in such fiscal
year, (ii) repurchase fractional shares, or make payments in lieu of
issuing fractional shares, of common stock of LFI upon the exercise of
stock options or warrants issued to employees of LFI to the extent not
issued in violation hereof, but not to exceed the amount of $100,000 so
expended in any one fiscal year of LFI, and (iii) repurchase common stock
of LFI in open market transactions involving cash expenditures of not more
than $200,000 in any fiscal year of LFI, where such stock is used in such
fiscal year to pay directors' fees to outside directors of LFI. Any amount
permitted to be paid under clauses(i), (ii) or (iii) and not so used in any
fiscal year of LFI may be carried over under the respective clauses to
succeeding fiscal years, but in no event may the amounts carried forward
from any fiscal year under all such clauses exceed $250,000 in the
aggregate, and in no event may the
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amounts paid under all such clauses in a given fiscal year of LFI,
including any amounts carried over from prior years, exceed $600,000 in the
aggregate."
2. Representations, Warranties and Covenants. In addition to the continuing
representations, warranties and covenants heretofore or hereafter made by
Borrowers to Lender pursuant to the other Financing Agreements, Borrowers hereby
represent, warrant and covenant with and to Lender as follows (which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof and shall be incorporated into and made a part of
the Financing Agreements):
(a) No event of Default exists on the date of this Amendment (after
giving effect to the amendments to the Loan Agreement provided in this
Amendment).
(b) All of the representations and warranties set forth in the Loan
Agreement as amended hereby, and the other Financing Agreements, are true and
correct in all material respects, except to the extent any such representation
or warranty is made as of a specified date, in which case such representation or
warranty shall have been true and correct as of such date.
(c) This Amendment has been duly authorized, executed and delivered by
Borrowers and consented to by Guarantors, and the agreements and obligations of
Borrowers, contained herein constitute legal, valid and binding obligations of
Borrowers, enforceable against Borrowers in accordance with their respective
terms.
3. Conditions Precedent. The effectiveness of the amendments set forth
herein shall be subject to the receipt by Lender of each of the following, in
form and substance satisfactory to Lender:
(a) an original of this Amendment, duly authorized, executed and
delivered by Borrowers and consented to by Guarantors; and
(b) after giving effect to the amendments to the Loan Agreement
provided in, this Amendment, no Event of Default shall exist or have occurred
and no event or condition shall have occurred or exist which with notice or
passage of time or both would constitute an Event of Default.
4. Effect of this Amendment. This Amendment and the instruments and
agreements delivered pursuant hereto constitute the entire agreement of the
parties with respect to the subject matter hereof and thereof, and supersede all
prior oral or
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written communications, memoranda, proposals, negotiations, discussions, term
sheets and commitments with respect to the subject matter hereof and thereof.
Except for the specific amendments expressly set forth herein, no other changes
or modifications to the Financing Agreements, and no consents under or waivers
of any provisions of the Financing Agreements are intended or implied, and in
all other respects the Financing Agreements are hereby specifically ratified,
restated and confirmed by all parties hereto as of the effective date hereof. To
the extent of conflict between the terms of this Amendment and the other
Financing Agreements, the terms of this Amendment shall control. The Loan
Agreement and this Amendment shall be read and construed as one agreement.
5. Further Assurances. Borrowers shall execute and deliver such additional
documents and take such additional action as may be reasonably requested by
Lender to effectuate the provisions and purposes of this Amendment.
6. Governing Law. The rights and obligations hereunder of each of the
parties hereto shall be governed by and interpreted and determined in accordance
with the internal laws of the State of New York (without giving effect to
principles of conflicts of law).
7. Binding Effect. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
8. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment, it shall not be necessary
to produce or account for more than one counterpart thereof signed by each of
the parties hereto.
Please sign in the space provided below and return a counterpart of this
Amendment, whereupon this Amendment, as so agreed to and accepted, shall become
a binding agreement among Borrowers and Lender, consented to by Guarantors.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------
Title: First Vice President
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[SIGNATURES CONTINUE ON NEXT PAGE]
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
AGREED AND ACCEPTED:
LONDON FOG INDUSTRIES, INC.
By:/s/
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Title: SR.VP
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PACIFIC TRAIL, INC.
By:/s/
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Title: Secretary
----------------------------
THE SCRANTON OUTLET CORPORATION
By:/s/
-------------------------------
Title: Secretary
----------------------------
CONSENTED TO:
PTI HOLDING CORP.
By:/s/
-------------------------------
Title: Secretary
----------------------------
PTI TOP COMPANY, INC.
By:/s/
-------------------------------
Title: Secretary
----------------------------
STAR SPORTSWEAR MANUFACTURING CORP.
By:/s/
-------------------------------
Title: Secretary
----------------------------
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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
XXXXXXX MANUFACTURING CO., INC.
By:/s/
-------------------------------
Title: Secretary
----------------------------
WASHINGTON HOLDING COMPANY
By:/s/
-------------------------------
Title: Secretary
----------------------------
CLIPPER MIST, INC.
By:/s/
-------------------------------
Title: Secretary
----------------------------
LONDON FOG SPORTSWEAR, INC.
By:/s/
-------------------------------
Title: Secretary
----------------------------
THE XXXXXXX CORPORATION
By:/s/
-------------------------------
Title: Secretary
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