AMENDMENT NO. 1 TO
LOAN AND SECURITY AGREEMENT
This AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is entered into as of May __, 1998, by and between Foothill Capital Corporation,
a California corporation, individually ("Foothill") and as agent ("Agent"), PNC
Bank, National Association and Mellon Bank, N.A. (collectively with Foothill,
"Lenders") and Today's Man, Inc., a Pennsylvania corporation ("Borrower"), with
reference to the following facts:
A. Lenders, Agent and Borrower heretofore have entered into that
certain Loan and Security Agreement, dated as of December 31,
1997 (as heretofore amended, supplemented, or otherwise
modified, the "Agreement");
B. Borrower has requested that Lenders amend the Agreement to
permit a subfacility for Borrower's Permitted F/X Contracts,
as set forth in this Amendment (the "Amendment");
C. Agent and Lenders are willing to so amend the Agreement in
accordance with the terms and conditions hereof; and
D. All capitalized terms used herein and not defined herein shall
have the meanings ascribed to them in the Agreement, as
amended hereby.
NOW, THEREFORE, in consideration of the above recitals and the mutual
premises contained herein, Lenders, Agent and Borrower hereby agree as follows:
1. Amendments to the Agreement.
a. Section 1.1 of the Agreement hereby is amended by adding the
following new defined terms in alphabetical order:
"Borrower Indemnity Amount" means the lesser of (x) the FX
Reserve or (y) the aggregate (with respect to all FX Transactions) of
the notional amount of each FX Transaction multiplied by the reserve
percentage established by the FX Bank (which such reserve percentage as
to existing FX Transactions may not be increased by the FX Bank).
"F/X Bank" means Norwest Bank Minnesota, National Association,
or any successor thereto.
"F/X Bank Parameters Letter" means that certain letter
agreement between F/X Bank and Borrower, a copy of which is attached
hereto as Exhibit F-1, regarding the parameters under which F/X Bank
provides foreign exchange currency services to Borrower as the same may
be amended and supplemented from time to time.
"F/X Reserve" means, as of any date of determination, a
reserve equal to the reserve established from time to time against the
Borrowing Base in connection with Permitted FX Contracts and Permitted
Spot Trades.
"FX Transactions" means Permitted FX Contracts and Permitted
Spot Trades.
"Initial Reserve" As of the date hereof, the amount of the FX
Reserve is $250,000.
"Permitted F/X Contracts" means foreign currency exchange
contracts between F/X Bank and Borrower that: (a) are in respect of
marked-to-market risk on foreign exchange future trades or options; (b)
are entered into by Borrower in the ordinary course of its business;
(c) are entered into in connection with the operational needs of
Borrower's business and not for speculative purposes; (d) do not have a
maturity date in excess of one year or that is after the date five (5)
Business Days prior to the Renewal Date (or any anniversary of the
Renewal Date if the Agreement has been renewed); and (e) are provided
by F/X Bank pursuant to the F/X Bank Parameters Letter.
"Permitted Spot Trades" means foreign currency exchange
transactions between F/X Bank and Borrower that: (a) are in respect of
foreign exchange spot value trades; (b) are entered into by Borrower in
the ordinary course of its business; and (c) are entered into in
connection with the operational needs of Borrower's business and not
for speculative purposes; and (d) are conducted pursuant to the F/X
Bank Parameters Letter.
b. The following definition contained in Section 1.1 of the Agreement
are amended and restated in their entirety to read as follows:
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"Revolving Facility Usage", means as of the date of determination, the
aggregate amount of (x) Advances, (y) undrawn or unreimbursed Letters of Credit
outstanding and (z) the FX Reserve.
c. The first sentence of Section 2.1(a) of the Agreement hereby is
amended and restated in its entirety to read as follows:
Subject to the terms and conditions of this Agreement, each Lender
agrees to make advances ("Advances") to Borrower in an amount at any
one time outstanding not to exceed at any one time such Lender's Pro
Rata Share of an amount equal to the lesser of (i) the Maximum
Revolving Amount less the sum of the outstanding balance of all undrawn
or unreimbursed Letters of Credit and the F/X Reserve, or (ii) the
Borrowing Base less (A) the sum of the outstanding balance of all
undrawn or unreimbursed Letters of Credit (other than Inventory Letters
of Credit) and the F/X Reserve less (B) 50% of the aggregate amount of
all undrawn or unreimbursed Inventory Letters of Credit less (C) the
aggregate amount of the Inventory Reserves.
d. The second sentence of Section 2.2(a) of the Agreement hereby is
amended and restated in its entirety to read as follows:
Agent shall have no obligation to issue a Letter of Credit if any of
the following would result:
(i) the sum of 50% of the aggregate amount of all undrawn and
unreimbursed Inventory Letters of Credit plus 100% of the aggregate
amount of all other types of undrawn and unreimbursed Letters of Credit
would exceed the Borrowing Base less the sum of the amount of
outstanding Advances (including any Agent Advances and Agent Loans) and
the F/X Reserve less the aggregate amount of Inventory Reserves and
reserves established under Section 2.1(b), or
(ii) the aggregate amount of all undrawn or unreimbursed
Letters of Credit (including Inventory Letters of Credit would exceed
the lower of (y) the Maximum Revolving Amount less the sum of the
amount of outstanding Advances (including any Agent Advances and Agent
Loans) and the F/X Reserve less the aggregate amount of Inventory
Reserves and reserves established under Section 2.1(b), or (z)
$20,000,000, or
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(iii) the outstanding Obligations (other than under the Term
Loans) would exceed the Maximum Revolving Amount.
e. A new Section 2.12 of the Agreement hereby is added and shall read
in its entirety as follows:
2.12 Subfacility for Borrower's Permitted F/X Contracts and Permitted
Spot Trades.
(a) Borrower wants to engage in FX Transactions with the F/X
Bank and Foothill has agreed to provide an indemnity to the F/X Bank
(any such indemnity in effect from time to time, the "Indemnity"). The
Indemnity is solely between Foothill and the FX Bank, which is an
affiliate of Foothill. The maximum amount payable by Foothill pursuant
to the Indemnity is the Borrower Indemnity Amount. At any time Foothill
is obligated to advance funds under the Indemnity as it relates to
Borrower, Borrower shall immediately upon demand therefor reimburse
such amount to Foothill and, in the absence of such reimbursement, the
amount so advanced immediately and automatically shall be deemed to be
an Advance hereunder and, thereafter, shall bear interest at the rate
then applicable to Advances.
(b) If, upon the maturity date of any Permitted F/X Contract
or Permitted Spot Trade, Borrower does not have availability in an
amount sufficient to pay the full amount of Borrower's obligations to
F/X Bank under such contract or at any time upon the occurrence of an
Event of Default, Foothill may, in its sole discretion, instruct F/X
Bank to liquidate such Permitted F/X Contract, at Borrower's sole
expense, and to apply any amounts thereunder that would have been
payable to Borrower against the amounts owed to F/X Bank by Borrower.
(c) Any amounts paid by Foothill to F/X Bank and any other
costs or expenses incurred by Foothill in connection with any such
Permitted F/X Contracts shall constitute Advances, shall be secured by
all of the Collateral, and thereafter shall be payable by Borrower to
Agent together with interest as provided for herein.
(d) Borrower hereby agrees to indemnify, save, defend, and
hold Foothill harmless from any loss, cost, expense, or liability,
including payments made by Foothill, expenses, and reasonable attorneys
fees incurred by Foothill arising out of or in connection with the
Indemnity.
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(e) Immediately upon the termination of this Agreement,
Borrower agrees to provide cash collateral to be held by Foothill in an
amount equal to 102% of the maximum amount of Foothill's obligations
under the Indemnity as it relates to the Borrower.
(f) The amount of the F/X Reserve may be reduced from time to
time by Foothill upon the receipt and written acceptance by Foothill of
an F/X Reserve Reduction Certificate, in the form of that attached
hereto as Exhibit F-2, duly executed by both Borrower and F/X Bank, not
less than 2 Business Days prior to the requested effective date of such
reduction.
(g) So long as no Default or Event of Default has occurred and
is continuing or would result therefrom, the amount of the F/X Reserve
may be increased from time to time by Foothill in its sole discretion
upon its receipt and written acceptance by Foothill of an F/X Reserve
Increase Certificate, in the form of that attached hereto as Exhibit
F-3, duly executed by both Borrower and F/X Bank, not less than 2
Business days prior to the requested effective date of such increase.
(h) Notwithstanding anything to the contrary in the Loan
Documents, Permitted Spot Trades shall be permitted by Foothill only
until there has been a failure on the part of Borrower to satisfy its
obligations with respect to any Permitted Spot Trades and thereafter
such Permitted Spot Trades shall be permitted solely at the option of
Foothill.
(i) Participations.
(i) Purchase of Participations. Immediately upon issuance
of any Permitted F/X Contract or Permitted Spot Trade in accordance with this
Section 2.12, each Lender shall be deemed to have irrevocably and
unconditionally purchased and received without recourse or warranty, an
undivided interest and participation in the credit support or enhancement
provided through Foothill to the F/X Bank, equal to such Lender's Pro Rata Share
of the Borrower Indemnity Amount. The FX Reserve may not be increased by
Foothill without the consent of the Lenders, to an amount in excess of
$1,000,000.
(ii) Obligations Irrevocable. The obligations of each
Lender to make payments to Foothill with respect to any Permitted F/X Contract
or Permitted Spot Trade or with respect to any credit support or enhancement
provided through Agent with respect to a Permitted F/X Contract or Permitted
Spot Trade, and the obligations of Borrower to make
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payments to Agent, for the account of the Lenders shall be irrevocable, not
subject to any qualification or exception whatsoever, including, without
limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(B) the surrender or impairment of any security for
the performance or observance of any of the terms of any of the Loan Documents;
or
(C) the occurrence of any Default or Event of Default.
(f) The first sentence of Section 3.5 of the Agreement hereby
is amended and restated in its entirety to read as follows:
On the date of termination of this Agreement, all Obligations
(including contingent reimbursement obligations of Borrower with
respect to any outstanding Letters of Credit or any outstanding
indemnities by Foothill in favor of the FX Bank in connection with the
FX Transactions) immediately shall become due and payable without
notice or demand.
(g) The preamble to Section 5 of the Agreement hereby is
amended and restated in its entirety to read as follows:
In order to induce the Lender Group to enter into this Agreement,
Borrower makes the following representations and warranties which shall
be true, correct, and complete in all respects as of the Closing Date,
and at and as of the date of the making of each Advance or Letter of
Credit or indemnity in connection with the FX Transaction made
thereafter, as though made on and as of the date of such Advance or
Letter of Credit or F/X Transaction indemnity (except to the extent
that such representations and warranties relate solely to an earlier
date) and such representations and warranties shall survive the
execution and delivery of this Agreement:
(h) Section 7.1(a) of the Agreement hereby is amended and
restated in its entirety to read as follows:
(a) Indebtedness evidenced by this Agreement,
together with Indebtedness to issuers of letters of credit
that are the subject of L/C Guarantees and Indebtedness to
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F/X Bank under Permitted F/X Contracts or the Permitted Spot
Trades;
(i) A new subsection (n) hereby is added to Section 9.1 of the
Agreement in proper numerical order as follows:
(n) Foothill may, at its option, require Borrower to
deposit with Foothill funds in an amount equal to the F/X
Reserve (if any), and, if Borrower fails to make such deposit
promptly, Foothill may advance such amount as an Advance
(whether or not an Overadvance is created thereby). At such
time (if ever) as all such indemnity obligations have been
paid or terminated, any amounts remaining in such reserve
shall be applied against any outstanding Obligations or, if
all Obligations have been indefeasibly paid in full, returned
to Borrower.
2. Representations and Warranties. Borrower hereby represents
and warrants to Agent that: (a) the execution, delivery, and
performance of this Amendment and of the Agreement, as amended by this
Amendment, are within its corporate powers, have been duly authorized
by all necessary corporate action, and are not in contravention of any
law, rule, or regulation, or 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 Agreement, as amended by this Amendment,
constitute Borrower's legal, valid and binding obligation, enforceable
against Borrower in accordance with its terms; and (c) attached hereto
a Exhibit F-1 is a true, correct, and complete copy of the F/X Bank
Parameters Letter.
3. Conditions Precedent to Amendment. The satisfaction of each
of the following, unless otherwise specified below, shall constitute
conditions precedent to the effectiveness of this Amendment:
a. Agent shall have received the reaffirmation and consent
of each of the Obligors (other than Borrower) attached hereto as
Exhibit A, duly executed and delivered by the respective authorized
officials thereof;
b. Agent shall have received a Certificate from the
Secretary of Borrower attesting to the incumbency and signatures of
authorized officers of Borrower and to the resolutions of Borrower's
Board of Directors authorizing its execution and delivery of this
Amendment and the performance of this Amendment and the Agreement as
amended by this Amendment and authorizing specific officers of Borrower
to execute and deliver the same;
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c. The representations and warranties in this Amendment, the
Agreement as amended by this Amendment, and the other Loan Documents shall be
true and correct in all 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);
d. No Event of Default or event which with the giving of notice or
passage of time would constitute an Event of Default shall have occurred and be
continuing on the date hereof, nor shall result from the consummation of the
transactions contemplated herein;
e. The Collateral shall not have declined materially in value from
the values set forth in the most recent appraisals or field examinations
previously done by Agent; and
f. All other documents and legal matters in connection with the
transactions contemplated by this Amendment shall have been delivered or
executed or recorded and shall be in form and substance satisfactory to Agent
and its counsel.
4. Effect on Agreement. The Agreement, as amended hereby, shall be and
remain in full force and effect in accordance with its respective terms and
hereby is ratified and confirmed in all respects. The execution, delivery, and
performance of this Amendment shall not operate as a waiver of or, except as
expressly set forth herein, as an Amendment, of any right, power, or remedy of
Agent or any Lender under the Agreement, as in effect prior to the date hereof.
5. Further Assurances. Borrower shall execute and deliver all
agreements, documents, and instruments, in form and substance satisfactory to
Agent, and take all actions as Agent may reasonably request from time to time,
to perfect and maintain the perfection and priority of Agent's security
interests in the Collateral, and to fully consummate the transactions
contemplated under this Amendment and the Agreement, as amended by this
Amendment.
6. Miscellaneous.
a. Upon the effectiveness of this Amendment, each reference in the
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Agreement shall mean and refer to the Agreement as amended by
this Amendment.
b. Upon the effectiveness of this Amendment, each reference in the
Loan Documents to the "Loan Agreement", "thereunder", "therein", "thereof" or
words of like import
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referring to the Agreement shall mean and refer to the Agreement as amended by
this Amendment.
c. Upon the effectiveness of this Amendment, each reference in the
Agreement and the other loan documents to Exhibit F-1, Exhibit F-2, or Exhibit
F-3 of the Agreement shall mean and refer to Exhibit F-1, Exhibit F-2, or
Exhibit F-3 attached hereto, respectively.
d. This Amendment may be executed in any number of counterparts,
all of which taken together shall constitute one and the same instrument and any
of the parties hereto may execute this Amendment by signing any such
counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
duly executed as of the date first written above.
TODAY'S MAN, INC., a Pennsylvania
corporation
By: __________________________
Title: _______________________
FOOTHILL CAPITAL CORPORATION,
a California corporation
By: _________________________
Title: ______________________
PNC BANK, NATIONAL ASSOCIATION
By: _________________________
Title: ______________________
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MELLON BANK, N.A.
By: _________________________
Title: ______________________
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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 Amendment No. 1 to Loan
and Security Agreement, dated as of May __, 1998 (the "Amendment"). Each of the
undersigned hereby (a) represents and warrants to Agent that the execution,
delivery, and performance of this Reaffirmation and Consent are within its
corporate powers, have been duly authorized by all necessary corporate 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 Agreement by the
Amendment; (c) acknowledges and reaffirms its obligations owing to Agent under
all Loan Documents to which it is 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 each of the undersigned has been informed of the matters set forth
herein and has acknowledged and agreed to same it understands that Agent has no
obligation 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.
BENMOL, INC.
By: _____________________
Title: __________________
XXXX & XXXX, INC.
By: _____________________
Title: __________________
F & S INTERNATIONAL, INC.
By: _____________________
Title: __________________
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D&L, INC.,
By: _____________________
Title: __________________
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EXHIBIT F-1
[FORM OF PARAMETERS LETTER]
_______________, 1998
[Customer Name and Address]
Re: Foreign Exchange Currency Contracts
Dear [insert]:
We are pleased to provide foreign exchange currency services to you.
Per our discussions, the following are the parameters under which Norwest will
provide such services:
The Foreign Exchange Department of Norwest Bank Minnesota, National
Association will transact foreign currency exchange contracts, as described in
your loan documentation (the "Loan Documents") with our affiliate, Foothill
Capital Corporation ("Foothill").
As of the date hereof, we have established a __% reserve (USD
equivalent) on the notional value of all outstanding forward contracts having a
maturity of no more than ___ months. Norwest will assess a ____% reserve of the
notional amount on all spot contracts for the applicable delivery time frame.
Norwest reserves the right to increase the amount of the reserve
percentage on future trades should the maturity of the foreign currency future
contract(s) exceed ____ months and/or we deem the particular currency to be
unstable. Norwest will notify you of such increase in the reserve percentage
substantially contemporaneously with such increase.
Norwest will provide such services so long as the total of the reserves
does not exceed the Borrower Indemnity Amount (as defined in the Loan
Documents).
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Should you fail to settle any future contracts within the specified
period for settlement, such failure to settle will be deemed, at the option of
Norwest, to be a default and failure to settle on all outstanding foreign
currency contracts.
Please confirm your understanding by signing below and returning a copy
of this letter to me.
Thank you and welcome
-------------------------
Senior Vice President
Manager Foreign Exchange
CONFIRMATION:
TODAY'S MAN, INC.
By: _______________________
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Exhibit F-2
F/X RESERVE REDUCTION CERTIFICATE
Today's date: _______________
(1) FROM TODAY'S MAN TO: NORWEST BANK MINNESOTA
ATTENTION: Xxxxx Xxxxx/Xxx Xxxxxxx
FACSIMILE: (000) 000-0000
(2) FROM NORWEST TO: FOOTHILL CAPITAL CORPORATION
ATTENTION: Xxxxx Xxxxxx
FACSIMILE: (000) 000-0000
(3) FROM Agent TO TODAY'S MAN AND NORWEST:
Reference hereby is made to that certain Loan and Security Agreement, dated as
of December 31, 1997 (as amended, supplemented, and modified, the "Loan
Agreement"), between Foothill Capital Corporation (individually and as agent
("Agent"), PNC Bank, National Association and Mellon Bank, N.A.(collectively
with Foothill, "Lenders") and Today's Man ("Borrower"). Capitalized terms used
herein and not otherwise defined herein shall have the meanings ascribed to them
in the Loan Agreement.
Pursuant to Section 2.12(e) of the Agreement, Borrower hereby requests a
reduction in the F/X Reserve from the current amount of $_____________ to the
new amount of $_________________, such reduction to become effective on
___________________.
TODAY'S MAN, INC. FACSIMILE:
ATTENTION: Xxxxxx Xxxxxx
By: ______________________
Its: _____________________
NORWEST BANK MINNESOTA, N.A.
By: ______________________
Its: _____________________
FOOTHILL CAPITAL CORPORATION
By: ______________________
Its: _____________________
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Exhibit F-3
F/X RESERVE INCREASE CERTIFICATE
Today's date: _______________
(1) FROM TODAY'S MAN TO: FOOTHILL CAPITAL CORPORATION
ATTENTION: Xxxxx Xxxxxx
FACSIMILE: (000) 000-0000
(2) FROM Agent TO: NORWEST BANK MINNESOTA
ATTENTION: Xxxxx Xxxxx/Xxx Xxxxxxx
FACSIMILE: (000) 000-0000
(3) FROM NORWEST TO TODAY'S MAN AND Agent:
Reference hereby is made to that certain Loan and Security Agreement, dated as
of December 31, 1997 (as amended, supplemented, and modified, the "Loan
Agreement"), between Agent Capital Corporation ("Agent") and Today's Man
("Borrower"). Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Loan Agreement.
Pursuant to Section 2.12(f) of the Agreement, Borrower hereby requests a
increase in the F/X Reserve from the current amount of $_____________ to the new
amount of $_________________, such reduction to become effective on
___________________.
TODAY'S MAN, INC. FACSIMILE:
ATTENTION: Xxxxxx Xxxxxx, Xx.
By: ______________________
Its: _____________________
NORWEST BANK MINNESOTA, N.A.
By: ______________________
Its: _____________________
FOOTHILL CAPITAL CORPORATION
By: ______________________
Its: _____________________
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