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Chatwins Group, Inc.
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
November 1, 1996
Re: Amendment No. 6 to Loan and Security Agreement
Gentlemen:
Reference is made to the-Loan and Security Agreement, dated March 4, 1994
(the "Loan Agreement"), by and between Congress Financial Corporation
("Lender") and Chatwins Group, Inc. ("Borrower"), as amended by Amendment No.
1 to Loan and Security -Agreement, dated June 20, 1995, between Lender and
Borrower, Amendment No. 2 to Loan and Security.Agreement, dated September 14,
1995, between Lender and Borrower, Amendment No. 3 to Loan and Security
Agreement, dated October.18,-1995,-between Lender and Borrower, Amendment No.
4 to Loan and Security Agreement, dated as of December 29, 1995, between
Lender and Borrower, and Amendment No. 5 to Loan and Security Agreement, dated
May 1, 1996, between Lender and Borrower ("Amendment No. 5"), together with
all other agreements, documents, supplements and instruments now or at any
time hereafter executed and/or delivered by Borrower or any other person, with
to or in favor of Lender in connection therewith (all of the foregoing,
together with this Amendment and the 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.
Borrower has requested that Lender provide up to $2,500,000 of temporary
additional loan availability. Lender is willing to provide such temporary
additional availability to the extent set forth herein and subject to the
terms and conditions set forth herein.
1. Definitions.
(a) Additional Definition. As used herein or in any of the other
Financing Agreements, the term "Temporary Availability A Period" shall mean
the period commencing on November 1, 1996 and ending on February 28, 1997, and
the Loan Agreement shall be deemed and is hereby amended to include such
definition.
(b) Amendment to Definition. As used herein, or in any of the
other Financing Agreements, the term "Additional Availability A Advances"
shall have the meaning given in Section 2 of this Amendment and the meaning of
such term set forth in Amendment No. 5 shall cease to be applicable for any
purpose in respect of the Financing Agreements.
2. Additional Availability A Advances.
(a) Subject to the terms and conditions contained herein and all
of the terms and conditions of the Loan Agreement as amended hereby, Lender
agrees to make or permit to remain outstanding during the Temporary
Availability A Period, additional Advances under the Availability A Component
in the aggregate principal amount of $2,500,000 at any one time outstanding in
excess of the amount of Advances otherwise determined by Lender to be
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available to Borrower under the Availability A Component pursuant to Section
2.2 of the Loan Agreement (such additional Advances, the "Additional
Availability A Advances") less the cumulative total of all Reductions (as
defined below) hereunder through and including the time of determination. The
Additional Availability A Advances (i) shall constitute part of and shall be
deemed made under the Availability A Component for all purposes under the
Financing Agreements, and as such shall constitute part of the obligations,
except that such Advances shall not be deemed made pursuant to Section 2.2 of
the Loan Agreement for purposes of calculating the maximum amount of
Availability A Advances outstanding or available at any time, (ii) shall be
subject, without limitation, to the terms and conditions set forth herein and
in the Loan Agreement and the other Financing Agreements, (iii) shall be
repaid, on or prior to the expiration of the Temporary Availability A Period,
without notice or demand by Lender, together with interest and other amounts
due thereon, in accordance with the provisions of this Amendment, the Loan
Agreement as amended hereby and the other Financing Agreements, and (iv) shall
be secured by all of the Collateral.
(b) During the Temporary Availability A Period, and for so long
thereafter as any Additional Availability A Advances remain outstanding, no
portion of the temporary additional loan availability provided hereunder for
Additional Availability A Advances shall be included under Section 1.29(a)(i)
of the Loan Agreement in determining Excess Availability and the Maximum
Credit shall remain at $25,000,000 for purposes of Section 1.29(a)(ii) of the
Loan Agreement. All outstanding Additional Availability A Advances shall be
included as outstanding Obligations under Section 1.29(b)(i) of the Loan
Agreement in determining Excess Availability at any time.
(c) During the Temporary Availability A Period, the maximum amount
of Additional Availability A Advances shall be reduced on the close of
business on each of the dates set forth below (each, a "Reduction Date") by
the respective amount of the reduction (each, a "Reduction") indicated on the
table below:
Amount of
Reduction on Each
Reduction Dates Reduction Date
January 31, 1997 $500,000
February 7, 1997 $500,000
February 14, 1997 $500,000
February 21, 1997 $500,000
February 28, 1997 $500,000
In addition to, and not in limitation of, the Obligation of Borrower to make
other payments in respect of Availability A Advances, Borrower shall repay the
outstanding Obligations in respect of the Availability A Component that remain
outstanding on any day in excess of the maximum amount of Availability A
Advances permitted to remain outstanding after giving effect to -the
cumulative total of all scheduled Reductions that are provided for hereunder
as of and through such day.
(d) Each of the scheduled Reductions set forth in 2(c) hereof
shall constitute a reduction of the maximum amount of Additional Availability
A Advances. The amount of Additional Availability A Advances repaid pursuant
to such scheduled Reductions may not thereafter be reborrowed.
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3. Amendment Fee. In addition to all other fees, charges, interest and
expenses payable by Borrower to Lender under the Financing Agreements,
Borrower shall pay to Lender a fee for entering into this Amendment in the
amount of $25,000, which amount is fully earned and payable as of the date
hereof and may be charged directly to Borrower's loan account maintained by
Lender in respect of the Availability A Component.
4. Additional Representations, Warranties and Covenants. Borrower
represents, warrants and covenants with and to Lender as follows, which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof, and the truth and accuracy of, or compliance
with each, together with the representations, warranties and covenants in the
other Financing Agreements, being a continuing condition of the making of any
and all Advances by Lender to Borrower:
(a) No Event of Default or act, condition or event which with
notice or passage of time or both would constitute an Event of Default exists
or has occurred as of the date of this Amendment (after giving effect to the
amendments made pursuant to this Amendment).
(b) This Amendment and each other agreement or instrument to be
executed and delivered by Borrower hereunder has been duly executed and
delivered by Borrower and is in full force and effect as of the date hereof,
and the agreements and obligations of Borrower contained herein and therein
constitute legal, valid and binding obligations of Borrower enforceable
against Borrower in accordance with their terms.
5. Conditions to Effectiveness of Amendment. The effectiveness of the
amendments and waivers pursuant to this Amendment shall be subject to the
satisfaction of each of the following conditions precedent:
(a) Lender shall have received an executed original or executed
original counterparts of this Amendment (as the case may be) duly authorized,
executed and delivered by the respective party or parties hereto;
(b) Lender shall have received, in form and substance satisfactory
to Lender, an original Supplemental Limited Guarantee with respect to
$2,500,000 in the principal amount of the Advances under the Availability A
Component, plus interest thereon and collection expenses (including reasonable
attorneys' fees and legal expenses), duly authorized, executed and delivered
by Xxxxxxx;
(c) All requisite corporate action and proceedings in connection
with this Amendment and the documents and agreements to be delivered hereunder
shall be in form and substance satisfactory to Lender, and Lender shall have
received all information and copies of all documents, including, without
limitation, records of requisite corporate action and proceedings which Lender
may have reasonably requested in connection therewith, such documents where
requested by Lender or its counsel to be certified by appropriate corporate
officers or governmental authorities; and
(d) 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.
6. Effect of this Amendment. This Amendment and the instruments and
agreements delivered pursuant hereto constitute the entire agreement of the
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parties with respect to the subject matter hereof and thereof, and supersede
all prior oral or written communications, memoranda, proposals, negotiations,
discussions, term sheets and commitments with respect to the subject matter
hereof and thereof. Except as expressly amended pursuant hereto, no other
changes or modifications to the Financing Agreements or any waivers of or
consents under any provisions thereof 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, as heretofore amended, and this Amendment shall be read and
construed as one agreement.
7. Further Assurances. Borrower 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.
8. 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 laws).
9. 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.
10. 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 between Borrower and Lender.
Very truly yours,
CONGRESS FINANCIAL CORPORATION
By:__________________________________
Title:_______________________________
AGREED TO AND ACCEPTED:
CHATWINS GROUP, INC.
By:____________________________
Title:_________________________
CONSENTED TO:
_______________________________
XXXXXXX X. XXXXXXX, XX.
