Exhibit 10.2
XXXXXX A.S.L., LTD.
(f/k/a Sassco Fashions, Ltd.)
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12.75% Senior Notes Due 2004
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SECOND SUPPLEMENTAL INDENTURE
Dated as of June 16, 1999
to
Indenture
Dated as of June 1, 1997
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IBJ WHITEHALL BANK & TRUST COMPANY
(f/k/a IBJ Xxxxxxxx Bank & Trust Company),
as Trustee
#457762 v8
SECOND SUPPLEMENTAL INDENTURE
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XXXXXX A.S.L., LTD.
(f/k/a Sassco Fashions, Ltd.)
IBJ WHITEHALL BANK & TRUST COMPANY
(f/k/a IBJ Xxxxxxxx Bank & Trust Company),
as Trustee
Dated as of June 16, 1999
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Second Supplemental Indenture, dated as of June 16, 1999 (this "Second
Supplemental Indenture"), between Xxxxxx A.S.L., Ltd. (f/k/a Sassco Fashions,
Ltd.), a Delaware corporation ("Xxxxxx" or the "Company"), and IBJ Whitehall
Bank & Trust Company (f/k/a IBJ Xxxxxxxx Bank & Trust Company), as trustee (the
"Trustee"), to the Indenture, dated as of June 1, 1997 and effective as of June
4, 1997 (as amended by the Supplemental Indenture, dated as of June 30, 1997,
the "Indenture"), between Xxxxxx and the Trustee, relating to the 12.75% Senior
Notes due 2004 of Xxxxxx (the "Notes"). Capitalized terms used herein and not
defined herein have the meanings set forth in the Indenture.
WHEREAS, pursuant to an Asset Purchase Agreement (the "Asset Purchase
Agreement"), dated as of March 15, 1999, among Xxxxxx, Xxxx Xxxxx Company LLC
("Xxxx Xxxxx") and Takihyo Inc. ("Takihyo" and, together with Xxxx Xxxxx, the
"Sellers"), Xxxxxx has agreed to purchase from the Sellers certain trademarks
and related license agreements and other selected assets of Xxxx Xxxxx (the
"Trademark Purchase"); and
WHEREAS, Xxxxxx intends to enter into a new working capital facility to
refinance its existing revolving credit facility, fund its working capital
requirements and finance the Trademark Purchase; and
WHEREAS, Xxxxxx is also proposing to purchase from Fashions of Seventh
Avenue, Inc. ("FSA") 27 retail leases, together with certain specified
inventory, receivables and pre-paid expenses of FSA (the "Retail Acquisition");
and
WHEREAS, in order to effectuate the Trademark Purchase and the Retail
Acquisition, Xxxxxx desires to amend certain provisions of the Indenture; and
WHEREAS, Section 7.2 of the Indenture authorizes Xxxxxx to amend
certain provisions of the Indenture with the consent of the holders of at least
a majority in principal amount of the Notes outstanding; and
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WHEREAS, the holders of at least a majority in principal amount of the
Notes outstanding have consented to all of the amendments set forth herein; and
WHEREAS, the Board of Directors of Xxxxxx has duly adopted resolutions
authorizing Xxxxxx to execute and deliver this Second Supplemental Indenture;
and
WHEREAS, pursuant to Section 7.2 of the Indenture, the Trustee is
authorized to execute and deliver this Second Supplemental Indenture.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Amendment of the Indenture.
(a) The definition of "Permitted Investments" in Section 1.1
of the Indenture is amended in its entirety to read as follows:
"Permitted Investments" means (i) Restricted
Investments in existence as of the date hereof, (ii)
certificates of deposit with final maturities of one year or
less issued by commercial banks chartered in the United States
of America (a "Commercial Bank") with capital and surplus in
excess of $100,000,000, (iii) commercial paper rated at least
P-1 by Xxxxx'x Investors Service, Inc. or at least A-1 by
Standard & Poor's Corporation, (iv) direct obligations issued
by the United States of America or any agency thereof with a
maturity not more than one year from the date of acquisition,
(v) money market preferred stock rated A or above, (vi)
tax-exempt floating rate option tender bonds, backed by a
letter of credit issued by a Commercial Bank rated AA by
Standard & Poor's Corporation or Aa by Xxxxx'x Investors
Service, Inc., (vii) equity or debt investments in
wholly-owned Subsidiaries with lines of business similar to
that of the Company or any of its Subsidiaries' existing lines
of business or lines of business permitted by Section 4.22 of
the Indenture, (viii) investments in prepaid expenses,
negotiable instruments held for collection and lease, utility
and workers' compensation, performance and other similar
deposits, (ix) investments represented by accounts receivable
created or acquired in the ordinary course of business, (x)
loans or advances to vendors in the ordinary course of
business and (xi) other debt or equity investments in any
person having an aggregate fair market value (measured on the
date each such investment was made and without giving effect
to subsequent changes in value), when taken together with all
other investments made pursuant to this clause (xi) since the
date of the Indenture, not to exceed $5.0 million.
(b) The definition of "Working Capital Facility" in Section
1.1 of the Indenture is amended in its entirety to read as follows:
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"Working Capital Facility" means, with respect to
Xxxxxx, one or more debt facilities or commercial paper
facilities, in each case with banks or other institutional
lenders providing for revolving credit loans, term loans,
receivables financing (including through the sale of
receivables to such lenders or to special purpose entities
formed to borrow from such lenders against such receivables)
or letters of credit, in each case, as amended, restated,
modified, renewed, refunded, replaced or refinanced in whole
or in part from time to time.
(c) Section 2.3(b) of the Indenture is amended and restated in
its entirety to read as follows:
(b) The Securities shall have a Maturity Date of
March 31, 2004 and shall bear interest at the rate of 12.75%
per annum, through and including December 31, 1999, and 13.00%
per annum, commencing as of January 1, 2000. Interest shall be
(i) computed on the basis of a 360-day year of twelve 30-day
months and (ii) payable in arrears on September 30, 1997 and
semiannually on each March 31 and September 30 thereafter.
(d) Section 4.8 of the Indenture is amended and restated in
its entirety to read as follows:
Section 4.8. Limitation on Additional Indebtedness.
Neither the Company nor any of its Subsidiaries shall
contract, create, incur, assume, guarantee, suffer to exist
nor otherwise become liable with respect to (collectively,
"incur") any Indebtedness except for the following (each of
which shall be given independent effect):
(1) Indebtedness incurred pursuant to this Indenture
and the Securities;
(2) Indebtedness under the Working Capital
Facility in an aggregate outstanding principal amount not to
exceed $160,000,000 at any one time;
(3) Indebtedness of the Company and any of its
Subsidiaries outstanding on the Effective Date;
(4) Indebtedness consisting of Capital Lease
Obligations so long as the aggregate annual rental obligations
in respect thereof do not exceed $1,000,000 at any one time
and purchase money obligations incurred for the purpose of
financing all or any part of the purchase price or cost of
construction or improvement of property, plant or equipment
used in the business of the Company or any of its
Subsidiaries, in an aggregate principal amount not to exceed
$5.0 million at any time outstanding;
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(5) Indebtedness to refinance its Indebtedness (or
Indebtedness of a Subsidiary, in the case of the Company),
provided that any such Indebtedness shall not (i) have a final
maturity or mandatory redemption payments prior to the earlier
of the final maturity of the Indebtedness being so refinanced
and the Maturity Date, or (ii) have a principal amount in
excess of the principal amount and accrued interest of the
Indebtedness being so refinanced (unless such Indebtedness is
issued at a discount in which case the issuance price of such
discount Indebtedness shall not exceed the principal amount of
the Indebtedness being so refinanced (it being understood
that, with respect to any Indebtedness issued at a discount in
compliance with this covenant, the accrual of amortization of
the original issue discount on such Indebtedness after the
date of issuance thereof shall not be deemed to be incurrence
of additional Indebtedness for the purpose of this covenant))
plus all fees and expenses related to the negotiation,
consummation or execution of such Indebtedness;
(6) additional Indebtedness (including any
refinancings thereof) in an aggregate principal amount (or
accreted value, as applicable) at any time outstanding, not to
exceed $5.0 million; and
(7) additional Indebtedness of the Company (but not
any Subsidiary), so long as, after giving effect to the
incurrence of such Indebtedness and the application of the net
proceeds thereof as if such Indebtedness was incurred and the
proceeds thereof applied at the beginning of the relevant
period, the Consolidated Interest Coverage Ratio for the most
recent four quarter period in respect of which financial
statements are available is not less than 1.75 to 1.
(e) Section 4.9 of the Indenture is deleted in its
entirety and replaced by the following:
Section 4.9. [Text Intentionally Deleted]
(f) Subparagraph (7) of Section 4.10 of the Indenture is
amended and restated in its entirety to read as follows:
(7) Liens on assets or property of the Company or any
Subsidiary relating to Indebtedness incurred in respect of the
Working Capital Facility to the extent permitted by Section
4.8(2) hereof, provided, however, that the aggregate principal
amount of the Indebtedness secured by such Liens shall not
exceed $160,000,000 at any one time;
(g) A new subparagraph (12) is added to Section 4.10 of the
Indenture to read as follows
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(12) additional Liens incurred with respect to
obligations that do not exceed $5.0 million at any one time
outstanding.
(h) Section 4.15 of the Indenture is amended and restated in
its entirety to read as follows:
Section 4.15. Limitation on Dividend and Other Payment
Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary to
(a) pay dividends or make any other distributions on its
Capital Stock or any other interest or participation in, or
measured by, its profits, owned by the Company or any
Subsidiary of the Company, or pay any Indebtedness owed to,
the Company or any Subsidiary, (b) make loans or advances to
the Company or any Subsidiary or (c) transfer any of its
properties or assets to the Company, except for such
encumbrances or restrictions existing under or by reason of
(i) applicable law, (ii) this Indenture, (iii) customary
provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Company or any
Subsidiary, (iv) any instrument governing Indebtedness of a
Person acquired by the Company or any Subsidiary at the time
of such acquisition, which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any
Person, other than the Person, or the property or assets of
the Person, so acquired, (v) Indebtedness existing on the date
hereof (and Indebtedness under the Working Capital Facility)
and any amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or
refinancings thereof, provided that such amendments,
modifications, restatements, renewals, increases, supplements,
refundings, replacements or refinancings are no more
restrictive, taken as a whole, with respect to such dividend
and other payment restrictions than those contained in such
Indebtedness, as in effect on the date of the Indenture (or
contained in the Working Capital Facility); (vi) purchase
money obligations for property acquired in the ordinary course
of business that impose restrictions on the property so
acquired of the nature described in clause (c) of this
paragraph; (vii) Liens securing Indebtedness otherwise
permitted to be incurred pursuant to the provisions of Section
4.10 hereof that limit the right of the Company or any of its
Subsidiaries to dispose of the assets subject to such Lien; or
(viii) any guarantee of any of the foregoing.
(i) Section 4.22 of the Indenture is amended and restated in
its entirety to read as follows:
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Section 4.22. Change in Business.
The Company shall not materially change or alter, or
permit or suffer any of its Subsidiaries to materially change
or alter, the nature of its business as conducted or as
proposed to be conducted as of the Effective Date, which shall
include, but not be limited to, the design, manufacture,
distribution, license and sale of apparel and apparel
accessories and the licensing and exploitation of trademarks,
trade names and other intellectual property of the Company.
(j) The first paragraph of Section Exhibit A to the
Indenture is amended and restated in its entirety to read as follows:
1. Interest. Sassco Fashions, Ltd., a
Delaware corporation (the "Company"), promises to pay interest
on the principal amount of this Security from June 1, 1997
(the "Issue Date") until maturity at the interest rate of
12.75% per annum, through and including December 31, 1999, and
13.00% per annum, commencing as of January 1, 2000, payable as
set forth in paragraph 2.
2. Confirmation. Except as expressly amended hereby, all of the
provisions of the Indenture are in all respects ratified and confirmed, and
nothing herein shall affect the validity or enforceability of the Indenture, as
amended hereby.
3. Counterparts. This Second Supplemental Indenture may be executed in
any number of counterparts, each of which, when so executed, shall be deemed to
be an original, but all of which shall together constitute but one and the same
instrument.
4. Effectiveness. This Second Supplemental Indenture shall become
effective immediately upon (i) the execution and delivery hereof by Xxxxxx and
the Trustee, (ii) the execution and delivery to the Trustee by Xxxxxx of an
Officer's Certificate and an opinion of counsel, in form and substance
acceptable to the Trustee and (iii) the execution and deliver of definitive
agreements for a new senior revolving credit facility in an aggregate amount of
up to $160,000,000 to be provided to the Company pursuant to the Commitment
Letter, dated as of June 1, 1999, between the Company, The Chase Manhattan Bank
and Chase Securities Inc.
5. Governing Law. This Second Supplemental Indenture shall be governed
by and construed in accordance with the law of the State of New York.
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IN WITNESS WHEREOF, the parties have caused this Second
Supplemental Indenture to be duly executed, all as of the date and year above
first written.
XXXXXX A.S.L., LTD
By: /s/ Xxxx Xxx Xxxxxxxxx
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Name: Xxxx Xxx Xxxxxxxxx
Title: Executive Vice President -
Finance and Administration
/s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Chief Financial Officer
IBJ WHITEHALL BANK & TRUST COMPANY, as Trustee
By: /s/ Xxxxxxx XxXxxxxxx
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Name: Xxxxxxx XxXxxxxxx
Title: Vice President
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