TENTH AMENDMENT TO CREDIT AGREEMENT
TENTH AMENDMENT TO CREDIT AGREEMENT, dated as of February __, 1997
(this "Amendment"), to the Revolving Credit, Factoring and Security Agreement,
dated as of September 20, 1993, as amended by letter agreement Re: Amendment to
Credit Agreement with respect to the Mississippi Property, dated June 14, 1994
(the "First Amendment") and by letter agreement Re: Amendment to Credit
Agreement with respect to Additional Guarantors, dated August 24, 1994 (the
"Second Amendment"), and by the Third Amendment to Credit Agreement, dated as of
February 28, 1995 (the "Third Amendment"), and by the Fourth Amendment to Credit
Agreement, dated as of March 1, 1995 (the "Fourth Amendment"), and by the Fifth
Amendment to Credit Agreement, dated as of June 28, 1995 (the "Fifth Amendment")
and by the Sixth Amendment to Credit Agreement, dated as of August 15, 1995 (the
"Sixth Amendment") the Seventh Amendment to Credit Agreement, dated as of March
27, 1996 (the "Seventh Amendment"), by the Eighth Amendment to Credit Agreement,
dated as of June 1, 1996 (the "Eighth Amendment"), and by the Ninth Amendment to
Credit Agreement, dated as of August 16, 1996 (the "Ninth Amendment") (as so
amended, and as further amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), between THE CIT GROUP/COMMERCIAL SERVICES, INC.
("Lender") and XXXXXX CORPORATION ("Borrower").
W I T N E S S E T H :
WHEREAS, Lender and Borrower are parties to the Credit Agreement;
WHEREAS, Borrower has requested Lender to amend the Credit
Agreement to (i) extend the Renewal Date, as defined therein, (ii) provide
Borrower with the option of requesting a portion of the Revolving Loans that
bear interest at the Effective Eurodollar Rate (as defined below) and (iii) to
amend certain financial covenants set forth therein; and
WHEREAS, Lender is willing to make such amendments to the
Credit Agreement upon the terms and subject to the conditions set forth in this
Amendment;
NOW, THEREFORE, in consideration of the premises, the parties
hereto hereby agree, effective as of the Effective Date, as defined below, as
follows:
1. Credit Agreement Defined Terms. Initially capitalized terms used and not
otherwise defined
herein shall have their respective meanings as defined in the Credit Agreement.
2. Amendments to Section 1. Section 1 of the Credit Agreement is hereby
amended as follows:
(a) The following subsection is hereby added to Section 1 of the Credit
Agreement as Section 1.5A thereof:
"1.5A 'Applicable Margin' shall mean (a)(i) in the case of
Prime Rate Loans, one-half (.50%) percent, and (ii) in the
case of Eurodollar Loans, two and three-quarters (2.75%)
percent, and (b) from after the occurrence of (i) declaration
by Lender of any Event of Default (so long as such Event of
Default is continuing and unwaived), (ii) termination of this
Agreement, or (iii) the non-renewal of this Agreement on the
Renewal Date pursuant to Section 10.1(a) hereof, the amount
described in clause (a)(i) and clause (a)(ii) of this
definition plus one (1%) percent."
(b) The following subsection is hereby added to Section 1 of the Credit
Agreement as Section 1.13A thereof:
"1.13A 'Business Day' shall mean any day that is not a
Saturday, Sunday or day on which commercial banks in New York,
New York are required or permitted to close."
(c) The following subsection is hereby added to Section 1 of the Credit
Agreement as Section 1.27A thereof:
"1.27A 'Effective Eurodollar Rate' shall mean, for each
Eurodollar Loan, a rate per annum equal to the Eurodollar Base
Rate in effect for the Interest Period with respect to such
Eurodollar Loan, plus the Applicable Margin."
(d) The following subsection is hereby added to Section 1 of the Credit
Agreement as Section 1.27B thereof:
"1.27B 'Effective Prime Rate' shall mean, for each Prime Rate
Loan, a rate per annum equal to the Prime Rate plus the
Applicable Margin."
(e) The following subsection is hereby added to Section 1 of the Credit
Agreement as Section 1.33A thereof:
"1.33A 'Eurodollar Base Rate' shall mean, with respect to each
day during each Interest Period pertaining to a Eurodollar
Loan, the rate of interest published in The Wall Street
Journal, Eastern Edition, two business days prior to the first
day of such Interest Period as the highest rate in the range
of rates quoted for one, two or three month 'London Late
Eurodollars'. In the event that The Wall Street Journal,
Eastern Edition, is not published or such rate does not appear
in The Wall Street Journal, Eastern Edition, the 'Eurodollar
Base Rate' shall be the rate determined by Lender to be the
rate at which deposits in Dollars are offered by The Chase
Manhattan Bank to first class banks in the interbank
eurodollar market where the eurodollar and foreign currency
and exchange operations in respect of its eurodollar loans are
then being conducted at approximately 11:00 a.m., New York
City time, two Business Days prior to the beginning of such
Interest Period, in an amount approximately equal to the
principal amount of the Eurodollar Loan to which such Interest
Period is to apply and for a period of time comparable to such
Interest Period."
(f) The following subsection is hereby added to Section 1 of the Credit
Agreement as Section 1.33B thereof:
"1.33B 'Eurodollar Loan' shall mean a Revolving Loan bearing interest based
on the Eurodollar Rate."
(g) The following subsection is hereby added to Section 1 of the Credit
Agreement as Section 1.33C thereof:
"1.33C 'Eurodollar Rate' shall mean with respect to each day
during each Interest Period pertaining to a Eurodollar Loan, a
rate per annum determined for such day in accordance with the
following formula (rounded upward to the nearest 1/100 of 1%):
Eurodollar Base Rate
1.00 -- Reserve Requirements"
(h) The following subsection is hereby added to Section 1 of the Credit
Agreement as Section 1.37A thereof:
"1.37A 'Funding Date' shall mean, with respect to any
Revolving Loan, the date of the funding of such Revolving
Loan, and in the case of a Eurodollar Loan which is continued
pursuant to Section 3.1A(c), the first day of the Interest
Period with respect thereto."
(i) The following subsection is hereby added to Section 1 of the Credit
Agreement as Section 1.39A thereof:
"1.39A 'Governmental Authority' shall mean any nation, state,
sovereign, or government, any federal, regional, state, local
or political subdivision thereof and any entity exercising
executive, legislative, regulatory or administrative functions
of or pertaining to government."
(j) Section 1.47 of the Credit Agreement is hereby deleted in its entirety
and the following is substituted therefor:
"1.47 'Interest Period' shall mean, with respect to each
Eurodollar Loan, the period commencing on the Funding Date for
such loan and ending, as Borrower may select, pursuant to
Section 3.1A(a), on the numerically corresponding day in the
first, second or third calendar month thereafter, provided,
however, that:
(i) An Interest Period based on a one, two or three
calendar month period which commences on the last Business Day
of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month;
(ii) In no event shall an Interest Period extend beyond the Renewal Date;
and
(iii) If an Interest Period would end on a day that
is not a Business Day, such Interest Period shall be extended
to the next Business Day, unless such Business Day would fall
in the next calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day."
(k) The following subsection is hereby added to Section 1 of the Credit
Agreement as subsection 1.62A.1 thereof:
"1.62A.1 'Notice of Borrowing' shall mean, with respect to a
request for a Eurodollar Loan pursuant to Section 3.1, a
written notice in substantially the form of Exhibit O (or
telephonic or telecopy notice, as provided in Section 3.1A(a)
hereof)."
(l) Section 1.69 of the Credit Agreement is hereby amended by
deleting therefrom all references to "Chemical Bank" and substituting "The Chase
Manhattan Bank" in lieu thereof in each instance where such term appears.
(m) The following subsection is hereby added to Section 1 of the Credit
Agreement as subsection 1.69A thereof:
"1.69A 'Prime Rate Loans' shall mean any and all Revolving
Loans (or any portion thereof) requested to be made by Lender
as Revolving Loans bearing interest when, and to the extent
that, the interest rate therefor is determined by reference to
the Prime Rate."
(n) The following subsection is hereby added to Section 1 of the Credit
Agreement as subsection 1.72A thereof:
"1.72A 'Reserve Requirements' shall mean for any day as
applied to a Eurodollar Loan, the aggregate (without
duplication) of the rates (expressed as a decimal fraction) of
reserve requirements in effect on such date (including,
without limitation, basic, supplemental, marginal and
emergency reserves under any regulations of the Federal
Reserve Board or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve
requirements prescribed for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of
the Board of Governors of the Federal Reserve System of the
United States) maintained by a member bank of the Federal
Reserve System. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve
requirements without benefit of or credit for proration,
exceptions or offsets which may be available from time to time
to Lender or any Participant or any Affiliate of Lender or of
any Participant under Regulation D."
3. Amendment of Section 3.1(a) (iii). Section 3.1(a) (iii) of the Credit
Agreement is amended in its entirety to read as follows:
"(iii) Fifty percent (50%) of the value of Eligible Inventory,
provided, however, that solely for, and at all times during
the months of May, June, July and August of 1997 and of 1998,
such advance rate shall be sixty percent (60%) of the value of
Eligible Inventory."
4. (i) Amendment of Section 3.1(c). Section 3.1(c) of the Credit Agreement
is amended in its entirety to read as follows:
"(c) Notwithstanding anything to the contrary
contained herein or in any of the other Financing Agreements,
except in Lender's discretion, the aggregate unpaid principal
amount of Revolving Loans outstanding at any time based on the
value of all Eligible Inventory shall not exceed $60,000,000
(the "Inventory Sublimit"), provided, however, that solely
for, and at all times during, the months of May, June, July
and August of 1997 and of 1998, the Inventory Sublimit shall
not exceed $70,000,000. On or before September 10, 1997 and
September 10, 1998, respectively, Borrower shall pay in full
to Lender that portion of the Revolving Loans which is equal
to the difference (such amount, the "Inventory Overadvance")
between: (i) the aggregate amount of Revolving Loans then
outstanding with respect to Eligible Inventory, and (ii) the
lesser of: (A) the maximum amount of Revolving Loans with
respect to Eligible Inventory to which Borrower is entitled on
September 1 of the applicable Contract Year based on an
advance rate of fifty percent (50%) of the value of Eligible
Inventory, and (B) the Inventory Sublimit as in effect on
September 1 of such Contract Year. Borrower's failure to pay
the Inventory Overadvance in full on or before September 10,
1997 or on or before September 10, 1998 (as applicable) shall
constitute an Event of Default under Section 8.1(a) of this
Agreement."
5. Additions to Section 3.1. Section 3.1 of the Credit Agreement is hereby
amended by adding thereto the following subsections as subsections (g) and (h)
thereof:
"(g) Eurodollar Loans made on any Funding Date shall be in the
aggregate minimum amount of $5,000,000 and in integral
multiples of $1,000,000 in excess of that amount."
"(h) There shall not exist at any time more than three (3)
borrowings (or any portion thereof) of Eurodollar Loans
outstanding, including, without limitation, Eurodollar Loans
arising as a result of the conversion of a Prime Rate Loan to
a Eurodollar Loan in accordance with the provisions of Section
3.1A(b) hereof or the continuation of a Eurodollar Loan as
such upon the expiration of an Interest Period with respect
thereto in accordance with the provisions of Section 3.1A(c)
hereof."
6. Addition of Section 3.1A. The Credit Agreement is hereby amended by
adding thereto the following Section 3.1A immediately following Section 3.1(h)
thereof:
"3.1A. Notice of Borrowing; Interest Rate Option.
(a) Notice of Borrowing. (i) Each borrowing of a Eurodollar
Loan under Section 3.1 shall be made on notice given by
Borrower to Lender no later than three (3) Business Days prior
to the requested Funding Date for such Eurodollar Loan. The
Notice of Borrowing shall specify (i) the requested Funding
Date (which shall be a Business Day), (ii) the amount of the
proposed borrowing, and (iii) the Interest Period elected by
Borrower with respect to such proposed Eurodollar Loan.
Failure by the Borrower to deliver a Notice of Borrowing with
respect to a request for a Eurodollar Loan or a request for a
borrowing of a Eurodollar Loan which would exceed the
limitations set forth in Section 3.1(h) shall be deemed and
shall constitute the Borrower's election that such proposed
borrowing shall be a Prime Rate Loan; and failure by Borrower
to make such election described in the immediately preceding
clause (iii) shall be deemed and shall constitute Borrower's
election that the Interest Period with respect to the proposed
borrowing shall be a one (1) month period. In lieu of
delivering a Notice of Borrowing, Borrower may give Lender
telephonic notice of any requested borrowing of a Eurodollar
Loan by the time required under this Section 3.1A(a);
provided, that such notice shall be confirmed in writing by
delivery to Lender (x) on the same Business Day, of a telecopy
of a written Notice of Borrowing which has been signed by an
authorized officer of Borrower and (y) promptly (and in no
event later than three (3) Business Days after the Funding
Date in respect of the applicable Eurodollar Loans), of a
Notice of Borrowing containing the original signature of an
authorized officer of Borrower.
(ii) Borrower shall notify Lender in writing of the names of
the officers authorized to request Revolving Loans on behalf
of Borrower, and shall provide Lender with a specimen
signature of each such officer. Lender shall be entitled to
rely conclusively on such officers' authority to request
Revolving Loans on behalf of Borrower, the proceeds of which
are requested to be transferred to an account of Borrower,
until Lender receives written notice to the contrary. Lender
shall have no duty to verify the authenticity of the signature
appearing on any Notice of Borrowing or other writing
delivered pursuant to Section 3.1A(a)(i) above and, with
respect to an oral request for Revolving Loans, Lender shall
have no duty to verify the identity of any individual
representing himself as one of the officers authorized to make
such request on behalf of Borrower.
Lender shall not incur any liability to Borrower as a
result of acting upon any telephonic notice referred to in
this Section 3.1A(a) which notice Lender believes in good
faith to have been given by a duly authorized officer or other
individual authorized to request Revolving Loans on behalf of
Borrower or for otherwise acting in good faith under this
Section 3.1A(a) and, upon the funding of Revolving Loans by
Lender in accordance with this Agreement, pursuant to any such
telephonic notice, Borrower shall be deemed to have requested
and received Revolving Loans hereunder.
Any Notice of Borrowing made pursuant to this Section
3.1A(a) shall be irrevocable.
(b) Conversion Option. Borrower may elect from time to time to
convert, on a Business Day, Eurodollar Loans to Prime Rate
Loans and Prime Rate Loans to Eurodollar Loans by giving
Lender at least three (3) Business Days prior irrevocable
written notice of such election, provided that any such
conversion of a Eurodollar Loan shall only be made on the last
day of an Interest Period with respect thereto. Each
conversion of a Eurodollar Loan to a Prime Rate Loan or of a
Prime Rate Loan to a Eurodollar Loan shall be for an amount of
$5,000,000, or, if more, in increments of any multiple of
$1,000,000, in each instance. Notwithstanding anything to the
contrary set forth herein, the conversion provided for in this
Section 3.1A(b) shall be subject to the limitations contained
in Section 3.1(h) and shall be permitted only so long as no
Event of Default has occurred and is continuing.
(c) Continuation of Eurodollar Loan. Any Eurodollar Loan may
be continued as such upon the expiration of an Interest Period
with respect thereto by compliance by Borrower with the notice
provisions contained in Section 3.1A(a) above for request of a
Eurodollar Loan; provided, however, that (i) the Effective
Eurodollar Rate with respect to any such continued Eurodollar
Loan shall be determined by Lender with respect to such
Eurodollar Loan as of two (2) Business Days prior to the first
day of the continued Interest Period elected by Borrower with
respect thereto, and (ii) any Eurodollar Loan may be continued
as such subject to the limitations contained in Section 3.1(h)
and only so long as no Event of Default has occurred and is
continuing, in either of which events, any such Eurodollar
Loan shall be automatically converted to a Prime Rate Loan on
the last day of the then current Interest Period with respect
thereto.
(d) Revocation of Interest Rate Election. With respect to each
requested Eurodollar Loan, in the event that Lender shall have
determined (which determination shall be conclusive and
binding upon Borrower) that by reason of circumstances
affecting the London interbank market and/or the interbank
eurodollar market where the eurodollar and foreign currency
and exchange operations of The Chase Manhattan Bank in respect
of its eurodollar loans are then being conducted, adequate and
reasonable means do not exist for ascertaining the Effective
Eurodollar Rate, then Lender shall forthwith give written or
telephonic notice of such determination to Borrower at least
one (1) Business Day prior to (i) the requested Funding Date
for such Eurodollar Loan, (ii) the conversion date of such
Prime Rate Loan, or (iii) the last day of such Interest
Period, as the case may be.
In the event such notice is given, then (i) any
requested Eurodollar Loan shall be made as a Prime Rate Loan,
(ii) any Prime Rate Loan which Borrower elected to have
converted to a Eurodollar Loan shall be continued as a Prime
Rate Loan, and (iii) any outstanding Eurodollar Loan shall be
converted to a Prime Rate Loan on the last day of the then
current Interest Period with respect thereto. Further, until
such notice has been withdrawn by Lender, no further
Eurodollar Loans shall be made or continued, nor shall
Borrower have the right to convert any Prime Rate Loan to a
Eurodollar Loan."
7. Amendment of Section 3.2(c). The last sentence of Section 3.2(c) of
the Credit Agreement is hereby amended by deleting therefrom the previously
existing defined term, "Interest Rate", and substituting "Effective Prime Rate"
in lieu thereof.
8. Amendment of Section 3.3. Section 3.3 of the Credit Agreement is amended
in its entirety to read as follows:
"3.3 Maximum Credit
The aggregate principal amount of the Revolving Loans and
Letter of Credit Accommodations at any time outstanding shall
not exceed $120,000,000, provided, however, that solely for,
and at all times during, the months of March, April, May,
June, July, August, September and October of 1997 and the
months of March, April, May, June, July, August and September
of 1998, such outstanding amount shall not exceed the amount
set forth opposite each such month and provided, further,
however, that during the first twenty (20) days of each month,
the Maximum Credit may equal but shall not exceed the higher
of (i) the Maximum Credit on the last day of the immediately
preceding month or (ii) the amount set forth below opposite
such month:
Month Xxxxxx
Xxxxx, 0000 $132,000,000
April, 1997 $135,000,000
May, 1997 $130,000,000
June, 1997 $132,000,000
July,1997 $130,000,000
August, 1997 $135,000,000
September, 1997 $135,000,000
October, 1997 $130,000,000
March, 1998 $132,000,000
April, 1998 $135,000,000
May, 1998 $130,000,000
June, 1998 $132,000,000
July, 1998 $130,000,000
August, 1998 $135,000,000
September, 1998 $135,000,000
Notwithstanding anything to the contrary contained herein,
from and after November 21, 1997 and through and including
February 28, 1998, the Maximum Credit shall not exceed
$120,000,000."
9. Interest. Section 3.5(a) of the Credit Agreement is hereby amended in
its entirety to read as follows:
"(a) Each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date such Revolving Loan is
made until it is paid in full at a fluctuating rate per annum
equal to (i) in the case of Prime Rate Loans, the Effective
Prime Rate, and (ii) in the case of Eurodollar Rate Loans, the
Effective Eurodollar Rate. Interest accrued on the Revolving
Loans in any calendar month shall be payable in arrears (i) on
the first Business Day of the immediately succeeding calendar
month, and (ii) upon the termination of this Agreement or, in
the event this Agreement is not renewed in accordance with
Section 10.1(a) hereof, on the Renewal Date. Interest on the
Revolving Loans shall be computed on the basis of the actual
number of days elapsed in the period during which interest
accrues and a year of 360 days."
10. Amendment of Section 3.6(g). The first sentence of Section 3.6(g)
of the Credit Agreement is hereby amended by deleting therefrom the previously
existing defined term, "Interest Rate", in each instance where such term appears
and substituting "Effective Prime Rate" in lieu thereof.
11. Amendment of Section 3.6(k). Section 3.6(k) of the Credit Agreement is
hereby amended in its entirety to read as follows:
"3.6(k) Notwithstanding anything to the contrary contained in
this Agreement, Borrower shall have the right to cease
factoring Notification Accounts upon not less than sixty (60)
days prior written notice to Lender, provided, however, that
all Accounts shall at all times constitute security for all
Obligations."
12. Addition of Sections 3.10, 3.11 and 3.12. Section 3 of the Credit
Agreement is amended hereby by adding thereto the following Sections 3.10, 3.11
and 3.12:
"3.10 Increased Costs for Revolving Loans and Letters of
Credit Accommodations. If any Governmental Authority, central
bank or other comparable authority shall at any time impose,
modify or deem applicable any reserve (including, without
limitation, any reserve imposed by the Federal Reserve Board,
including, but not limited to, in respect of the making and
maintaining of Eurodollar Loans), special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, Lender, or by any
Participant, or shall impose on Lender, or on any Participant,
or the market for revolving loans or letters of credit, any
other condition affecting a revolving loan or letter of credit
(any such event, an "Increased Cost Event"); and the result of
any Increased Cost Event is to increase the cost to Lender or
to such Participant of making or participating in a Revolving
Loan or the cost to Lender or to any other issuer issuing,
maintaining or creating a Letter of Credit Accommodation, as
the case may be, or to reduce the amount of any sum received
or receivable by Lender or such Participant in respect of any
Revolving Loan or by Lender or any such other issuer of any
Letter of Credit Accommodations, then, upon demand by Lender,
Borrower shall pay to Lender for the account of Lender, such
other issuer of a Letter of Credit Accommodation, or such
Participant, as the case may be, such additional amount or
amounts as will compensate Lender, such other issuer of a
Letter of Credit Accommodation or such Participant, for such
increased cost or reduction. Lender will promptly notify
Borrower of any Increased Cost Event occurring after the date
hereof, of which it has knowledge, which would entitle Lender
to compensation pursuant to this Section 3.10. A certificate
of Lender delivered to Borrower claiming compensation under
this Section 3.10 and setting forth the additional amount or
amounts to be paid to Lender hereunder, determined by Lender
on a reasonable basis and prepared in good faith and in
reasonable detail, shall, in the absence of manifest or
demonstrable error, be conclusive and binding for all
purposes. Notwithstanding the foregoing, Lender shall only
seek such compensation from Borrower for any such increased
cost or reduction if Lender, or such Participant (as
applicable), in connection with the Increased Cost Event that
has given rise to such increased cost or reduction, similarly
seeks such compensation generally from other commercial
borrowers of Lender or such Participant in respect of which
borrowers the respective financing agreements then in effect
between Lender or such Participant (as applicable) and each
such borrower give Lender or such Participant the right to
demand compensation from such borrower upon the occurrence of
such Increased Cost Event."
"3.11 Increased Capital. If either (i) the introduction of or
any change in or in the interpretation of any law or
regulation or (ii) compliance by Lender or Participant with
any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law
and whether or not the failure to comply therewith would be
unlawful), including, without limitation, any "Reserve
Requirement" used in determining the Eurodollar Base Rate,
affects or would affect the amount of capital required or
expected to be maintained by Lender or any corporation
controlling Lender or any Participant and Lender or such
Participant reasonably determines that the amount of such
capital is increased by or based upon the existence of the
commitments to make Revolving Loans and/or other commitments
of this type on the terms and conditions set forth in this
Agreement (any such event, an "Increased Capital Event") then,
upon demand by Lender, Borrower shall immediately pay to
Lender, from time to time as specified by Lender, additional
amounts sufficient to compensate Lender, such corporation
controlling Lender or such Participant (as applicable) in the
light of such circumstances, to the extent that Lender or such
Participant reasonably determines such increase in capital to
be allocable to the occurrence of the Increased Capital Event.
A certificate as to such amounts delivered by Lender to
Borrower, determined by Lender or such Participant (as
applicable) on a reasonable basis and prepared in good faith
and in reasonable detail by Lender or such Participant (as
applicable) shall, in the absence of manifest or demonstrable
error, be conclusive and binding for all purposes.
Notwithstanding the foregoing, Lender or such Participant
shall only seek such compensation from Borrower if Lender or
such Participant, in connection with the Increased Capital
Event that has given rise to such increased capital
requirement, similarly seeks such compensation generally from
other commercial borrowers of Lender or such Participant in
respect of which the respective financing agreements then in
effect between Lender or such Participant (as applicable) and
each such borrower give Lender or such Participant the right
to demand compensation from such borrower upon the occurrence
of such Increased Capital Event."
"3.12 Funding Loss Indemnification. Borrower shall pay to
Lender for the account of Lender or of a Participant (as
applicable) such amount or amounts as shall be certified by
Lender or such Participant in good faith to compensate Lender
or such Participant for any loss, cost, or expense incurred by
Lender or such Participant as a result of:
(a) Payment of a Eurodollar Loan on a date other than the last
day of the Interest Period relating thereto, including but not
limited to, as a result of acceleration of the Obligations
pursuant to Section 8.2 hereof; or
(b) The failure by Borrower to (i) borrow or continue a
Eurodollar Loan on the Funding Date specified in the Notice of
Borrowing relating thereto, or (ii) convert a Prime Rate Loan
to a Eurodollar Loan pursuant to irrevocable written notice of
its election thereof pursuant to Section 3.1A(b) including but
not limited to as a result of the operation of the last
sentence of Section 3.1A(b)."
13. Deletion of Section 7.18.
Section 7.18 of the Credit Agreement is hereby deleted in its
entirety and replaced with the following:
"7.18 [Intentionally Deleted]"
14. Amendment of Section 7.19. Section 7.19 of the Credit Agreement is
amended in its entirety to read as follows:
"7.19 Stockholders' Equity
Borrower shall not permit its consolidated stockholders'
equity to be less than $55,000,000 at any time during the
period from the Consummation Date through the day before the
last day of its 1993 fiscal year, $60,000,000 at any time
during the period from the last day of its 1993 fiscal year
through June 28, 1996, $45,000,000 during the period from June
29, 1996 through the day before the last day of its 1996
fiscal year, $52,000,000 during the period from January 1,
1997 through the day before the last day of its 1997 fiscal
year and $68,000,000 thereafter. Notwithstanding anything to
the contrary contained herein, write-offs for goodwill arising
during Borrower's 1997 fiscal year which Borrower would
otherwise be required to include in the determination of
Borrower's consolidated stockholders' equity under this
Section 7.19 shall, in an aggregate amount not to exceed
$5,000,000, be excluded from such determination of such
consolidated stockholders' equity solely during the period
from and after the last day of Borrower's 1997 fiscal year."
15. Deletion of Section 7.20. Section 7.20 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:
"7.20 [Intentionally Deleted]"
16. Deletion of Section 7.21. Section 7.21 of the Credit
Agreement is hereby deleted in its
entirety and replaced with the following:
"7.21 [Intentionally Deleted]"
17. Amendment of Section 7.22. Section 7.22 of the Credit Agreement is
amended in its entirety to read as follows:
"7.22 Maximum Loss
Borrower shall not incur, in any four consecutive fiscal
quarters, commencing after the date of this Agreement, on a
cumulative basis, a net loss of $10,000,000 or more, or in any
period of eight consecutive fiscal quarters, commencing after
the date of this Agreement on a cumulative basis, a net loss
of $15,000,000 or more. Notwithstanding anything to the
contrary contained herein, write-offs for goodwill,
restructuring expense or other unusual or non-recurring
expense arising during the first two fiscal quarters of
Borrower's 1996 fiscal year (ending June 29, 1996) in
connection with or pursuant to a restructuring and which
Borrower would otherwise be required to include in the
determination of Borrower's net loss under this Section 7.22,
shall, in an aggregate amount not to exceed $13,000,000, be
excluded from such determination of such net loss of
Borrower."
18. Deletion of Section 7.23. Section 7.23 of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:
"7.23 [Intentionally Deleted]" 19. Amendment of Section 8.1(l). Section
8.1(l) of the Credit Agreement is amended in its entirety to read as follows:
"(l) one or more judgments are entered against Borrower or any
Guarantor in excess of $750,000 in any one case or in the aggregate and
the same shall not have been paid, vacated, discharged, stayed or
bonded pending appeal on or before the earlier of (x) the date required
by the terms (if any) of such judgment for the completion of the
foregoing and (y) thirty (30) days after the entry thereof."
20. Amendment of Section 9.1(a). Section 9.1(a) of the Credit Agreement is
amended in its entirety to read as follows:
"(a) All invoices relating to Non-Notification Accounts and
Non-Factored Accounts shall indicate that remittances with respect
thereto are to be made to: XXXXXX CORPORATION, X.X. XXX 0000, XXXXXX
XXXXXX XXXXXXX, XXX XXXX, XXX XXXX 00000-0000, a lock box opened by
Lender pursuant to a Lock Box Deposit Service Agreement dated June 25,
1990 with Manufacturers Hanover Trust Company, predecessor-in-interest
to The Chase Manhattan Bank (the "Lock Box Agreement"). Notwithstanding
the foregoing, upon not less than thirty (30) days prior written
request made by Borrower to Lender, Lender shall, as soon as possible
thereafter, open a new lock box pursuant to an agreement entered into
between Lender and a different bank designated by Borrower in such
written request and reasonably acceptable to Lender ("Successor Lock
Box Bank"). Upon execution of such agreement with such Successor Lock
Box Bank, such agreement shall be deemed and shall constitute the "Lock
Box Agreement" for all purposes of this Agreement, and all invoices
relating to Non-Notification Accounts and Non-Factored Accounts shall
indicate, from and after the date of execution of such agreement, that
remittances with respect thereto are to be made to the lock box address
designated in the Lock Box Agreement entered into with the Successor
Lock Box Bank. All such remittances shall be deposited in Lender's
account with The Chase Manhattan Bank or with the Successor Lock Box
Bank (as applicable) pursuant to the Lock Box Agreement (the "CIT
Account")."
21. Amendment of Section 10.1(a). Section 10.1(a) of the Credit Agreement
is amended in its entirety to read as follows:
"10.1 Term.
(a) This Agreement and the other Financing Agreements
shall become effective as of the date hereof and shall continue in full
force and effect for a term ending on September 30, 1998 (the "Renewal
Date") and from year to year thereafter, unless sooner terminated
pursuant to the terms hereof."
22. Amendment of Section 10.2(c). The first sentence of Section 10.2(c)
of the Credit Agreement is hereby amended by deleting therefrom the previously
defined term, "Interest Rate", and substituting "Effective Prime Rate" in lieu
thereof.
23. Addition of Exhibit O. The Credit Agreement is hereby amended by
adding to the List of Exhibits, "EXHIBIT O -- Form of Notice of Borrowing", and
by adding to the Exhibits attached to and made a part of the Credit Agreement
the "EXHIBIT O -- Form of Notice of Borrowing" attached to and made a part of
this Amendment.
24. Representations and Warranties. Borrower hereby represents and
warrants to Lender that the representations and warranties set forth in Section
6 of the Credit Agreement are true on and as of the date hereof as if made on
and as of the date hereof after giving effect to this Amendment, except to the
extent any such representation or warranty expressly relates to a prior date,
and breach of any of the representations and warranties made in this paragraph 8
shall constitute an Event of Default under Section 8.1(b) or 8.1(c) of the
Credit Agreement, as applicable. Borrower further represents and warrants that,
after giving effect to this Amendment, no Event of Default or event which, with
the lapse of time or the giving of notice or both, would become an Event of
Default has occurred and is continuing.
25. Effectiveness. This Amendment shall become effective on the date (the
"Effective Date") Lender shall have received each of the following:
(a) The written consent of all Participants to the execution and delivery
of this Amendment by Lender.
(b) Counterparts of this Amendment, duly executed and delivered by Borrower
and Lender.
(c) A duly executed copy of the Consent of Guarantors substantially in the
form of Exhibit A hereto.
26. Continuing Effect of Credit Agreement. This Amendment shall not
constitute a waiver or amendment of any provision of the Credit Agreement not
expressly referred to herein and shall not be construed as a consent to any
further or future action on the part of Borrower that would require consent of
Lender. Except as expressly amended, the provisions of the Credit Agreement are
and shall remain in full force and effect.
27. Counterparts. This Amendment may be executed in counterparts, and all
of such counterparts taken together shall be deemed to constitute one and the
same instrument.
28. Governing Law. This Amendment shall be governed by, and construed and
interpreted in accordance with, the laws of the state of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered in New York, New York by their proper and duly
authorized officers as of the day and year first above written.
THE CIT GROUP/COMMERCIAL
SERVICES, INC.
By:
Title:
XXXXXX CORPORATION
By:
Title:
EXHIBIT O
FORM OF NOTICE OF BORROWING
NOTICE OF BORROWING
THE CIT GROUP/COMMERCIAL SERVICES, INC.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxxxx
Gentlemen:
The undersigned, XXXXXX CORPORATION (the "Borrower"), refers
to the Revolving Credit, Factoring and Security Agreement dated as of September
20, 1993 (as amended, the "Credit Agreement", the terms defined therein being
used herein as therein defined), between Borrower and The CIT Group/Commercial
Services, Inc. ("Lender"), and hereby gives Lender notice, irrevocably, pursuant
to Section 3.1A of the Credit Agreement, that the Borrower hereby requests a
Eurodollar Loan under the Credit Agreement, and sets forth below the information
relating to such Eurodollar Loan (the "Proposed Eurodollar Borrowing") as
required by Section 3.1A of the Credit Agreement:
(A) The Business Day of the Proposed Eurodollar Borrowing is ,
199 .
(B) The aggregate principal amount of the Proposed Eurodollar
Borrowing is $_____________.
(C) The Interest Period elected with respect to the to the
Proposed Eurodollar Borrowing is (check appropriate box):
|_| one (1) month
|_| two (2) months
|_| three (3) months
The Borrower hereby certifies that before and after giving
effect to the Proposed Eurodollar Borrowing, no Event of Default shall have
occurred or would result from such extension of credit.
Very truly yours,
XXXXXX CORPORATION
By:
Title:
EXHIBIT A
CONSENT OF GUARANTORS
Each of the undersigned, CLANTEXPORT, INC., XXXXXX XXXXX,
INC., FROST BROS. ENTERPRISES, INC., SLT SOURCING, INC., each a Guarantor under
its respective Guarantee, each dated as of September 20, 1993, and XXXXXX CANADA
INC. and X.X. XXXXXX CLOTHING INC., each a guarantor under its respective
Guaranty (Unlimited Liability), each dated as of September 20, 1994
(individually, in the case of each of the foregoing Guarantors, its
"Guarantee"), made in favor of the CIT Group/Commercial Services, Inc.
("Lender"), pursuant to the Credit Agreement as defined in the Tenth Amendment
to Credit Agreement, dated as of February __, 1997 between Lender and Xxxxxx
Corporation (the "Amendment"), to which this Consent is attached, hereby
consents to the Amendment and the matters contemplated thereby, and hereby
confirms and agrees that its Guarantee is, and shall continue to be, in full
force and effect and is hereby ratified and confirmed in all respects except
that, on and after the effective date of the Amendment, each reference in its
Guarantee to "the Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended by the Amendment.
IN WITNESS WHEREOF, each of the undersigned has caused this
Consent of Guarantors to be duly executed and delivered by its authorized
officer this __ day of February, 1997.
CLANTEXPORT, INC. FROST BROS. ENTERPRISES, INC.
By: By:
Title: Title:
XXXXXX XXXXX, INC. SLT SOURCING, INC.
By: By:
Title: Title:
XXXX LICENSING, INC. XXXXXX CANADA INC.
By: By:
Title: Title:
JJ. XXXXXX CLOTHING, INC.
By:
Title:
