EXHIBIT 10.27
Execution Copy
FIRST AMENDMENT AND WAIVER TO
AMENDED AND RESTATED CREDIT AGREEMENT AND GUARANTY
FIRST AMENDMENT AND WAIVER TO AMENDED AND RESTATED CREDIT
AGREEMENT AND GUARANTY (the "Amendment and Waiver") dated as of August 30, 1996
among BISCAYNE APPAREL, INC., BISCAYNE APPAREL INTERNATIONAL, INC., MACKINTOSH
OF NEW ENGLAND CO., and M & L INTERNATIONAL, INC., (individually, each a
"Borrower" and collectively, the "Borrowers" and individually, each a
"Guarantor" and collectively, the "Guarantors"), THE CHASE MANHATTAN BANK
(successor by merger to The Chase Manhattan Bank, N.A.), CORESTATES BANK, N.A.,
THE FIRST NATIONAL BANK OF BOSTON, FLEET BANK N.A. (successor by merger to
Natwest Bank, N.A.), and XXXXXXX FACTORS, INC. (individually, each a "Lender"
and collectively, the "Lenders"), THE CHASE MANHATTAN BANK (successor by merger
to The Chase Manhattan Bank, N.A.), as agent for the Lenders (in such capacity,
together with its successors in such capacity, the "Agent"), and XXXXXXX
FACTORS, INC., as servicing agent for the Lenders (in such capacity, together
with its successors in such capacity, the "Servicing Agent").
PRELIMINARY STATEMENT. The Borrowers, the Guarantors, the
Lenders and the Agents have entered into an Amended and Restated Credit
Agreement and Guaranty dated as of March 28, 1996 (the "Credit Agreement"). The
terms defined in the Credit Agreement are used in this Amendment and Waiver as
in the Credit Agreement unless otherwise defined in this Amendment and Waiver.
The Borrowers, the Lenders and the Agents have agreed to amend
and waive certain provisions of the Credit Agreement as hereinafter set forth.
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 3 hereof, hereby amended as
follows:
(a) The following definition is added in its proper
alphabetical order:
"Xxxx Xxxxx" means Xxxx Xxxxx Fashions
International.
(b) The definition of "Revolving Credit Loans Borrowing Base"
is amended by deleting the first sentence
thereof in its entirety and inserting in its place the
following:
"Revolving Credit Loans Borrowing Base" means for
each date or period specified below the lesser of (1) an
amount equal to the total of (a) the Collateral Borrowing
Base, and to the extent the amount is a positive number plus,
and to the extent the amount is a negative number minus, the
integer of (b) the Revolving Credit Loans Permitted
Overadvance or (2) column A set forth below for such date or
period:
DATE OR PERIOD A
-------------- -
August 30, 1996 to and including August 31, Thirty Million Dollars ($30,000,000)
1996
September 1, 1996 to and including Thirty-Three Million Dollars ($33,000,000)
October 30, 1996
October 31, 1996 to and including Twenty-Five Million Dollars ($25,000,000)
November 29, 1996
November 30, 1996 to and including Sixteen Million Dollars ($16,000,000)
December 30, 1996
On December 31, 1996 Eight Million Dollars ($8,000,000)
January 1, 1997 to the Revolving Credit Fifty Million Dollars ($50,000,000)
Termination Date
(c) The definition of "Revolving Credit Loans Permitted
Overadvance (During the Month)" is amended by deleting the months of August,
September, October, November and December and the amounts corresponding to such
months and inserting in their place the following:
MONTH AMOUNT
----- ------
August $ 14,750,000
September $ 7,000,000
October $ 2,500,000
November $ (2,000,000)
December $ (3,500,000)
(d) The definition of "Revolving Credit Loans Permitted
Overadvance (Month End)" is amended by (i) deleting the months of August,
September and October and the amounts corresponding to such months and inserting
in their place the following:
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MONTH AMOUNT
----- ------
August $ 5,250,000
September $ 0
October $ (5,000,000)
and (ii) inserting at the end thereof the following:
Notwithstanding the foregoing, the proceeds of the
Revolving Credit Loans made to BAI which are used to finance
its Xxxx Xxxxx division shall be equal to or less than the
Eligible Accounts of the Xxxx Xxxxx division relied on in
computing the Collateral Borrowing Base as set forth on the
Reconciliation Report for the months ended November and
December. In addition, the proceeds of the Revolving Credit
Loans made to BAI for its Xxxxx division shall be less than
the Eligible Accounts of the Xxxxx division relied on in
computing the Collateral Borrowing Base as set forth on the
Reconciliation Report in amounts of at least $1,000,000,
$2,000,000 and $3,000,000 for the months ended October,
November, and December, respectively.
In addition, notwithstanding the foregoing (1) the
proceeds of intercompany loans or advances made to BAI which
are used to finance the Xxxx Xxxxx division of BAI (excluding
amounts related to corporate expenses, management fee
expenses, and state and federal income taxes between BAI and
Apparel) shall not exceed an amount equal to Two Million Seven
Hundred Fifty Thousand Dollars ($2,750,000) in the aggregate
at any time, and (2) the proceeds of intercompany loans or
advances made to BAI which are used to finance the Xxxxx
division of BAI (excluding amounts related to corporate
expenses, management fee expenses, and state and federal
income taxes between BAI and Apparel) shall not exceed Three
Million Nine Hundred Fifty-Three Dollars ($3,000,953) in the
aggregate at any time.
(e) The definition of "Working Capital Borrowing Base" is
amended by inserting after "time" in the first line thereof the following:
"prior to August 30, 1996 and on and after January 1, 1997,".
(f) Section 3.01, LETTERS OF CREDIT, is amended by adding at
the end thereof the following:
Notwithstanding the foregoing, during the
period from August 15, 1996 to December 31, 1996
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Chase will not be required to issue a Letter of Credit or
amend an outstanding Letter of Credit if after giving effect
to the issuance thereof or amendment thereto the total of (a)
the aggregate face amount of all Letters of Credit issued
during such period plus (b) the increase in the face amount of
all outstanding Letters of Credit during such period less (c)
the aggregate face amount of all Letters of Credit cancelled
during such period, is equal to or greater than Eleven Million
Five Hundred Thousand Dollars ($11,500,000). In addition,
during such period, Chase will not be required to issue a
Letter of Credit or amend an outstanding Letter of Credit
issued for the account of BAI where the goods covered by such
Letter of Credit are for or such Letter of Credit otherwise
relates to the Xxxx Xxxxx division of BAI if after giving
effect to the issuance thereof or amendment thereto the total
of (a) the aggregate face amount of all such Letters of Credit
issued during such period plus (b) the increase in the face
amount of all such outstanding Letters of Credit during such
period less (c) the aggregate face amount of all Letters of
Credit cancelled during such period, is equal to or greater
than Two Million Five Hundred Thousand Dollars ($2,500,000).
SECTION 2. WAIVER. Because the August 7, 1996 and August 15,
1996 Reconciliation Reports reflected that Outstanding Working Capital
Obligations exceeded the Working Capital Borrowing Base and the Borrowers failed
to make a prepayment in the amount of such excess within one (1) day thereof,
the Borrowers are not in compliance with Section 2.08, MANDATORY PREPAYMENTS of
the Credit Agreement. Such noncompliance constitutes Events of Default under the
Credit Agreement. The Borrowers have requested that each Lender and each Agent
waive such Events of Default. Upon the conditions set forth below, each Lender
and each Agent waive the Borrowers failure to comply with Section 2.08,
MANDATORY PREPAYMENTS for the periods set forth in the August 7, 1996 and August
15, 1996 Reconciliation Reports. No Lender nor Agent waives any future
noncompliance with such Section.
SECTION 3. CONDITIONS OF EFFECTIVENESS TO THIS AMENDMENT AND
WAIVER. This Amendment and Waiver shall become effective on the date on which
the Agent shall have received each of the following documents, in form and
substance satisfactory to the Agent and its counsel and the Lenders, and each of
the following requirements shall have been fulfilled:
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(1) THIS AMENDMENT AND WAIVER. The Borrowers, the Lenders and
the Agents shall each have executed and delivered this Amendment and Waiver;
(2) INTERCOMPANY LOAN SCHEDULE. The Borrowers shall have
delivered its most recent Intercompany Loan Schedule for each Borrower and each
Borrower's divisions prior to the date of this Amendment, and such Intercompany
Loan Schedule shall be in form and substance satisfactory to the Lenders and the
Agents in their sole discretion;
(3) OFFICER'S CERTIFICATE. The following statements shall be
true and the Agent shall have received a certificate signed by a duly authorized
officer of each Borrower dated the effective date of this Amendment and Waiver
stating that:
(a) The representations and warranties contained in the Credit
Agreement and in each of the other Facility Documents are true and
correct on and as of the effective date of this Amendment and Waiver as
though made on and as of such date;
(b) After giving effect to this Amendment and Waiver, no
Default or Event of Default has occurred and is continuing; and
(c) The amounts set forth on the Intercompany Loan Schedule
delivered in connection with this Amendment are true and correct;
(4) LENDERS' FEES. The Borrowers shall have paid to the Agent
a fee of Twenty-Five Thousand Dollars ($25,000) for the account of the Lenders.
The Agent will promptly thereafter cause to be distributed to each Lender such
Lender's Pro Rata Share of such fees;
(5) LEGAL XXXX. Xxxxx Xxxxxxxxxx will be paid in full for all
legal fees, costs and expenses in connection with the preparation of the
Amendment and Waiver and all past due legal fees, costs and expenses;
(6) ADDITIONAL DOCUMENTATION. The Agent shall have received
such other approvals, opinions or documents as any Lender may reasonably
request.
SECTION 4. REFERENCE TO AND EFFECT ON THE FACILITY DOCUMENTS.
(a) Upon the effectiveness of Section 1 hereof, on and after the date hereof
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import, and each reference in the other
Facility Documents to the Credit Agreement, shall mean
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and be a reference to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement
and all other Facility Documents shall remain in full force and effect and are
hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment and Waiver shall not, except as expressly provided herein, operate as
a waiver of any right, power or remedy of any Lender or Agent under any of the
Facility Documents, nor, except as expressly provided herein, constitute a
waiver of any provision of the Facility Documents.
SECTION 5. COSTS AND EXPENSES. The Borrowers agree to pay the
Agent, the Servicing Agent, and the Lenders on demand all costs, expenses and
charges, in connection with the preparation, reproduction, execution, delivery,
filing, recording and administration of this Amendment and Waiver and any other
instruments and documents to be delivered hereunder, including, without
limitation, the fees and out-of-pocket expenses of counsel for the Agent, the
Servicing Agent, and each Lender with respect thereto and with respect to
advising the Agent, the Servicing Agent, and each Lender as to its rights and
responsibilities under such documents, and all costs and expenses, if any, in
connection with the enforcement of any such documents.
SECTION 6. GOVERNING LAW. This Amendment and
Waiver shall be governed by and construed in accordance with
the laws of the State of New York.
SECTION 7. HEADINGS. Section headings in this
Amendment and Waiver are included herein for convenience of
reference only and shall not constitute a part of this
Amendment and Waiver for any other purpose.
SECTION 8. COUNTERPARTS. This Amendment and Waiver may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument, and any party hereto may execute this
Amendment and Waiver by signing any such counterpart.
[INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment and Waiver to be duly executed as of the day and year first above
written.
BISCAYNE APPAREL, INC.
By: /s/ XXXXX XXXXXXXXXX XX.
--------------------------
Name: Xxxxx Xxxxxxxxxx Xx.
Title: Vice President
BISCAYNE APPAREL INTERNATIONAL, INC.
By: /s/ XXXXX XXXXXXXXXX XX.
--------------------
Name: Xxxxx Xxxxxxxxxx Xx.
Title: Vice President
MACKINTOSH OF NEW ENGLAND CO.
By: /s/ XXXXX XXXXXXXXXX XX.
--------------------
Name: Xxxxx Xxxxxxxxxx Xx.
Title: Vice President
M & L INTERNATIONAL, INC.
By: /s/ XXXXX XXXXXXXXXX XX.
--------------------
Name: Xxxxx Xxxxxxxxxx Xx.
Title: Vice President
THE CHASE MANHATTAN BANK (successor
by merger to The Chase Manhattan
Bank, N.A.; "Chase"), as Lender
By: /s/ XXXX XXXXXX
------------------------
Name: Xxxx Xxxxxx
Title: Vice President
XXXXXXX FACTORS, INC., as Lender
By: /s/
-----------------------
Name:
Title:
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CORESTATES BANK, N.A., as Lender
By: /s/ XXXX X. XXXXXX
-------------------------
Name: Xxxx X. Xxxxxx
Title: Commercial Officer
THE FIRST NATIONAL BANK OF BOSTON,
as Lender
By: /s/ XXXXX X. XXXXXX
--------------------------
Name: Xxxxx X. Xxxxxx
Title: Director
FLEET BANK, N.A. (formerly known as
NatWest Bank N.A.), as Lender
By: /s/ XXXXX XXXXX
---------------------------
Name: Xxxxx Xxxxx
Title: Vice President
THE CHASE MANHATTAN BANK (successor
by merger to The Chase Manhattan
Bank, N.A.; "Chase"), as Agent
By: /s/ XXXX XXXXXX
-------------------------
Name: Xxxx Xxxxxx
Title: Vice President
XXXXXXX FACTORS, INC., as
Servicing Agent
By: /s/
--------------------------
Name:
Title:
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