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As of May 1, 1997
Chatwins Group, Inc.
000 Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxxxx 00000
Re: Amendment No. 7 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, Amendment No. 5 to Loan and Security Agreement, dated May
1, 1996, between Lender and Borrower, and Amendment No. 6 to Loan and Security
Agreement, dated November 1, 1996, 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 establish the Maximum Credit in the
amount of $28,000,000 and increase the amount of the sublimit to $8,000,000
with respect to Advances under the Availability A Component against the Value
of Eligible Inventory consisting of finished goods and raw materials and the
Value of Eligible Work-in-Process. Lender is willing to so establish the
Maximum Credit and to so increase the Availability A Component sublimit in
respect of Eligible Inventory consisting of finished goods and raw materials
and Eligible Work-in-Process to the extent set forth herein and subject to the
terms and conditions set forth herein.
1. Amendment to Definition. Section 1.40 of the Loan Agreement is
hereby deleted in its entirety and replaced with the following, effective as
of the date hereof:
"1.40 "Maximum Credit" shall mean the amount of
$28,000,000."
2. Sublimit on Inventory regarding Availability A Component.
Section 2.2(a)(ii)(B) of the Loan Agreement is hereby amended, effective as of
the date hereof, by deleting the amount "$7,000,000" and substituting the
amount "$8,000,000" in its place.
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
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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, a Fourth Amended and Restated Availability A
Promissory Note by Borrower payable to the order of Lender in the original
principal amount of up to $28,000,000, duly authorized, executed and delivered
by Borrower;
(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 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
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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.
