Exhibit 10.5
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Amendment"),
dated as of June 28th, 2000, is entered into between CONGRESS FINANCIAL
CORPORATION (SOUTHWEST), a Texas corporation ("Lender"), and ALLIED FASHION,
INC., a Delaware corporation ("Borrower").
RECITAL
A. Borrower and Lender have previously entered into that certain Loan and
Security Agreement dated April 2, 1999, (the "Loan Agreement"), pursuant to
which Lender has made certain loans and financial accommodations available to
Borrower. Terms used herein without definition shall have the meanings ascribed
to them in the Loan Agreement.
B. Lender and Borrower wish to further amend the Loan Agreement under the
terms and conditions set forth in this Amendment. Borrower is entering into this
Amendment with the understanding and agreement that, except as specifically
provided herein, none of Lender's rights or remedies as set forth in the Loan
Agreement is being waived or modified by the terms of this Amendment.
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. Amendments to Loan Agreement.
(a) Section 1.28 of the Loan Agreement is hereby amended to read in
its entirety as follows
"Maximum Credit" shall mean, with reference to the Revolving Loans
and the Letter of Credit Accommodations, the amount of Ten Million
Dollars ($10,000,000).
2. Amendment Fee. Borrower shall pay Lender an amendment fee in the amount
of Five Thousand Dollars ($5,000) for the processing and approval of this
Amendment, which fee will be fully earned on the date of this Amendment.
3. Effectiveness of this Amendment. Lender must have received the
following items, in form and content acceptable to Lender, before this Amendment
is effective and before Lender is required to extend any credit to Borrower as
provided for by this Amendment.
(a) Amendment. This Amendment fully executed in a sufficient number
of counterparts for distribution to Lender and Borrower.
(b) Representations and Warranties. The representations and
warranties set forth herein and in the Loan Agreement must be true and
correct.
(c) Payment of Fee. Borrower shall have paid the Amendment Fee
required by Section 3.
(d) Other Required Documentation. All other documents and legal
matters in connection with the transaction contemplated by this Amendment
shall have been delivered or executed or recorded and shall be in form and
substance satisfactory to Lender.
4. Representations and Warranties. The Borrower represents and warrants as
follows:
(a) Authority. The Borrower has the requisite corporate power and
authority to execute and deliver this Amendment, and to perform its
obligations hereunder and under the Financing Agreements (as amended or
modified hereby) to which it is a party. The execution, delivery and
performance by the Borrower of this Amendment have been duly approved by
all necessary corporate action, have received all necessary governmental
approval, if any, and do not contravene any law or any contractual
restrictions binding on Borrower. No other corporate proceedings are
necessary to consummate such transactions.
(b) Enforceability. This Amendment has been duly executed and
delivered by the Borrower. This Amendment and each Financing Agreement (as
amended or modified hereby) is the legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms, and
is in full force and effect.
(c) Representations and Warranties. The representations and
warranties contained in each Financing Agreement (other than any such
representations or warranties that, by their terms, are specifically made
as of a date other than the date hereof) are correct on and as of the date
hereof as though made on and as of the date hereof.
(d) No Default. After giving effect to this Amendment, no event has
occurred and is continuing that constitutes an Event of Default.
5. 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 internal
laws of the State of New York governing contracts only to be performed in that
State.
6 . Counterparts. This Amendment may be executed in any number of
counterparts and by different parties and separate counterparts, each of which
when so executed and delivered, shall be deemed an original, and all of which,
when taken together, shall constitute one and the same instrument. Delivery of
an executed counterpart of a signature page to this Amendment by telefacsimile
shall be effective as delivery of a manually executed counterpart of this
Amendment.
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7. Reference to and Effect on the Financing Agreements.
(a) Upon and after the effectiveness of this Amendment, each
reference in the Loan Agreement to "this Agreement", "hereunder", "hereof"
or words of like import referring to the Loan Agreement, and each
reference in the other Financing Agreements to "the Loan Agreement",
"thereof" or words of like import referring to the Loan Agreement, shall
mean and be a reference to the Loan Agreement as modified and amended
hereby.
(b) Except as specifically amended above, the Loan Agreement and all
other Financing Agreements, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed and shall
constitute the legal, valid, binding and enforceable obligations of
Borrower to Lender.
(c) The execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of Lender under any of the Financing Agreements,
nor constitute a waiver of any provision of any of the Financing
Agreements.
(d) To the extent that any terms and conditions in any of the
Financing Agreements shall contradict or be in conflict with any terms or
conditions of the Loan 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 Loan Agreement as
modified or amended hereby.
8. Ratification. Borrower hereby restates, ratifies and reaffirms each and
every term and condition set forth in the Loan Agreement, as amended hereby, and
the Financing Agreements effective as of the date hereof.
9. Estoppel. To induce Lender to enter into this Amendment and to continue
to make advances to Borrower under the Loan Agreement, Borrower hereby
acknowledges and agrees that, after giving effect to this Amendment, as of the
date hereof, there exists no Event of Default and no right of offset, defense,
counterclaim or objection in favor of Borrower as against Lender with respect to
the Obligations.
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IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the date first above written.
"BORROWER"
ALLIED FASHION INC.,
a Delaware corporation
By: /s/ Xxxxxxx X. Orofi
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Title: VP Finance
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"LENDER"
CONGRESS FINANCIAL CORPORATION
(SOUTHWEST), a Texas corporation
By: /s/ Xxx X. Xxxxx
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Title: AVP
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