BNY FINANCIAL CORPORATION
A WHOLLY OWNED SUBSIDIARY OF THE BANK OF NEW YORK
NEW YORK'S FIRST BANK- FOUNDED 1784 BY XXXXXXXXX XXXXXXXX
0000 XXXXXX XX XXX XXXXXXXX, XXX XXXX, X.X. 00000
000-000-0000
October 6, 1995
Xxxxxxx Chaus, Inc.
0000 Xxxxxxxx
Xxx Xxxx, XX 00000
Gentlemen/women:
Reference is made to the Restated and Amended Financing
Agreement between us bearing the effective date of February 21,
1995, as supplemented and amended (the "Financing Agreement").
Any capitalized terms used but not defined herein shall have the
meanings set forth in the Financing Agreement.
It is hereby agreed that effective as of September 28, 1995,
the Financing Agreement shall be amended as follows:
1. Paragraph 2(a) shall be amended so as to provide that
the limit on the aggregate amount of Loans outstanding at any
time shall be increased from $40,000,000 to $47,000,000 during
the period commencing on October 1, 1995 and ending on November
30, 1995 (the "Increase Period"). Accordingly, during the
Increase Period only, the references to the amount $40,000,000 in
the eighth and twelfth lines of Paragraph 2(a) shall be amended
to read $47,000,000. At the end of the Increase Period such
references shall revert back to the original amount of
$40,000,000.
2. The definition of Applicable Permitted Overadvances set
forth in Paragraph 8 shall be amended to read in its entirety as
follows:
" `Applicable Permitted Overadvances' shall mean solely
with respect to the period commencing on September 28, 1995 and
ending on July 4, 1996, provided that no Event of Default has
occurred or is continuing (in which event the overadvance shall
be immediately repaid in its entirety), the amounts set forth
below:
9/28/95 - 10/28/95 $6,000,000
10/29/95 - 11/4/95 1,525,000
11/5/95 - 11/28/95 5,125,000
11/29/95 - 12/4/95 0
12/5/95 - 12/28/95 2,950,000
12/29/95 - 1/4/96 175,000
1/5/96 - 1/28/96 3,775,000
1/29/96 - 2/4/96 1,775,000
2/5/96 - 2/28/96 5,950,000
2/29/96 - 3/4/96 2,725,000
3/5/96 - 3/28/96 6,700,000
3/29/96 - 4/4/96 2,725,000
4/5/96 - 4/28/96 6,100,000
4/29/96 - 5/4/96 1,500,000
5/5/96 - 5/28/96 4,775,000
5/29/96 - 6/4/96 3,125,000
6/5/96 - 6/28/96 6,250,000
6/29/96 - 7/4/96 2,475,000"
3. Paragraph 9(a)(vi) shall be amended to read in its
entirety as follows:
"( vi ) permit your Tangible Net Worth (equity plus
subordinated debt minus goodwill and intangible
assets) to be less than the following amounts as
of the following dates:
As of September 30, 1995 ($11,500,000)
As of December 31, 1995 ($12,500,000)
As of March 31, 1996 ($13,500,000)
As of June 30, 1996 ($14,500,000)
Intangible assets include write ups, unamortized
debt discount and expense, unamortized deferred
charges, patents, licenses, R&D expenses, and
other intangible items."
4. Paragraph 9(a) (vii) shall be amended to read in its
entirety as follows:
"( vii ) permit your Working Capital (the amount by which
your current assets exceed your current
liabilities) to be less than the following amounts
on the following dates:
As of September 30, 1995 ($14,000,000)
As of December 31, 1995 ($14,500,000)
As of March 31, 1996 ($15,000,000)
As of June 30, 1996 ($15,500,000)"
5. The unnumbered paragraph following Paragraphs 9(a) (vi)
and (vii) shall be amended to read as follows:
"The amounts set forth in the above subsections
(vi) and (vii) shall be amended for the fiscal years
ending June 30, 1997 and June 30, 1998 upon receipt by
us at least 30 days prior to June 30th of each year of
your business plan. If you fail to deliver such
business plan or after receipt of same you and we
cannot agree on amended financial covenants, then you
agree that your net loss for any fiscal quarter during
which these covenants are not in effect shall not be
more than $1,000,000."
Except as set forth herein, the Financing Agreement shall
remain in full force and effect in accordance with its terms.
If you are in agreement with the foregoing, please so
indicate by signing and returning the enclosed copy of this
letter.
Very truly yours,
BNY FINANCIAL CORPORATION
By: /s/ Xxxxxx Xxxxx
-------------------
Title: Vice President
XXXXXXX CHAUS, INC.
By: /s/ Xxxxx Xxxxxx
------------------
Title: Executive Vice President-
Finance and Administration
