Exhibit 10.1
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AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT
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AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT (this "Amendment"), dated as
of August 31, 2004, by and among Xxxxxx International Corp., a Delaware
corporation ("Borrower"), HAPL Leasing Co., Inc. ("HAPL"), Xxxxxx Business
Concepts, LLC ("HBC"), Sedeco, Inc. ("Sedeco") and Hometown Threads, LLC
("Hometown", and together with HAPL, HBC and Sedeco, individually, each a
"Guarantor" and collectively, "Guarantors") and Congress Financial Corporation,
a Delaware corporation ("Lender").
W I T N E S S E T H :
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WHEREAS, Lender and Borrower have entered into financing arrangements
pursuant to which Lender has made and may make loans and advances and provide
other financial accommodations to Borrower as set forth in the Loan and Security
Agreement, dated as of November 26, 2002, as amended by Amendment No. 1 to Loan
and Security Agreement, dated as of April 28, 2003, Amendment No. 2 to Loan and
Security Agreement, dated as of July 16, 2003, and Amendment No. 3 to Loan and
Security Agreement, dated as of April 30, 2004, by and among Lender, Borrower
and Guarantors (as amended hereby and as the same may hereafter be further
amended, modified, supplemented, extended, renewed, restated or replaced, the
"Loan Agreement"), and the agreements, documents and instruments at any time
executed and/or delivered in connection therewith or related thereto
(collectively, together with the Loan Agreement, the "Financing Agreements");
WHEREAS, Borrower and Guarantors have requested that Lender amend certain
provisions of the Loan Agreement;
WHEREAS, Lender is willing to agree to such amendments, subject to the
terms and conditions set forth herein; and
WHEREAS, by this Amendment, Lender, Borrower and Guarantors desire and
intend to evidence such amendments;
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
and covenants contained herein, the parties hereto agree as follows:
1. Definitions.
(a) Additional Definition. As used herein, the term "Fee Reduction
Period" shall mean the period commencing on September 1, 2004 and
ending on the earlier of (i) the occurrence of a Default or Event
of Default and (ii) February 28, 2005.
(b) Interpretation. For purposes of this Amendment, unless otherwise
defined herein, all terms used herein, including, but not limited
to, those terms used and/or defined in the recitals above, shall
have the respective meanings assigned to such terms in the Loan
Agreement.
2. Servicing Fee. Notwithstanding anything to the contrary contained in
Section 3.3 of the Loan Agreement, during the Fee Reduction Period,
the amount of the monthly servicing fee payable by Borrower to Lender
under such section shall be reduced to $2,000 in respect of Lender's
services for each month (or part thereof). After the Fee Reduction
Period, such servicing fee shall be payable in the amount set forth in
Section 3.3 of the Loan Agreement.
3. Unused Line Fee. Notwithstanding anything to the contrary contained in
Section 3.4 of the Loan Agreement, during the Fee Reduction Period,
Borrower shall not be required to make any payment to Lender in
respect of the unused line fee provided for in such section of the
Loan Agreement. After the Fee Reduction Period, Borrower shall be
required to pay the unused line fee as set forth in Section 3.4 of the
Loan Agreement.
4. Letter of Credit Fee. Notwithstanding anything to the contrary
contained in Section 2.2(b) of the Loan Agreement, during the Fee
Reduction Period, the letter of credit and acceptance fee payable by
Borrower to Lender in connection with the Letter of Credit
Accommodations, other than Letter of Credit Accommodations consisting
of banker's acceptances, shall be reduced to a rate equal to one and
one-half (1 1/2%) percent per annum on the daily outstanding balance
of such Letter of Credit Accommodations. After the Fee Reduction
Period, such letter of credit and acceptance fee shall be payable in
the amount set forth in Section 2.2(b) of the Loan Agreement.
5. Collateral Reporting. Notwithstanding anything to the contrary
contained in Section 7.1(a)(i) of the Loan Agreement, during the Fee
Reduction Period, Borrower shall only be required to provide to Lender
schedules of sales made, collections received and credit memos issued
for the immediately preceding month as soon as possible after the end
of each month (but in any event within five (5) Business Days after
the end thereof), or more frequently as Lender may request at any time
that Excess Availability is less than $5,000,000, or a Default or
Event of Default shall exist or have occurred and be continuing, or at
any time that Borrower has requested any Loans or as Lender may
otherwise request. After the Fee Reduction Period, Borrower shall be
required to provide such schedules in accordance with Section
7.1(a)(i) of the Loan Agreement.
6. Field Examinations. Unless and until Borrower may request a Loan, so
long as no Default or Event of Default exists or has occurred and is
continuing, Lender will not conduct a field examination of the
business or assets of Borrower.
7. Additional Conditions Precedent.
(a) In addition to the satisfaction of each of the conditions
precedent to the making of any Loans or providing any Letter of
Credit Accommodations set forth in Section 4.2 of the Loan
Agreement, on and after the date hereof, it shall be an
additional condition precedent to the making of any Loan that:
(a) Lender shall have received a written request from Borrower
for such Loan not less than forty five (45) days prior to the
date of making such Loan, and (b) Lender shall have completed a
field examination of the business and assets of Borrower in
accordance with its customary practices or as is otherwise
required by Lender under the circumstances and the results of
such field examination shall in all respects be satisfactory to
Lender (or Lender may at its option reduce the advance rates,
establish reserves or otherwise modify the terms under which it
is willing to make any Loans or provide Letter of Credit
Accommodations based on the results of such field examination)
and (c) as to any Letter of Credit Accommodation, Lender shall
have received and be in possession of Collateral consisting of
cash of Borrower in an amount equal to one hundred ten (110%)
percent of the face amount of the Letter of Credit Accommodation
requested.
8. EBITDA. Section 9.17 of the Loan Agreement is hereby deleted in its
entirety and replaced with the following:
"9.17 Minimum EBITDA. As of the last day of the fiscal quarter
of Borrower ending on January 31, 2005 and as of the last day
of each fiscal quarter of Borrower thereafter, the EBITDA of
Borrower and its Subsidiaries for the immediately preceding
four (4) consecutive fiscal quarters (treated as a single
accounting period) shall be not less than negative $2,950,000."
9. Minimum Excess Availability. Notwithstanding anything to the contrary
contained in Section 9.19 of the Loan Agreement, during the Fee
Reduction Period, Borrower shall not be required to comply with the
maintenance of the minimum Excess Availability provided for therein.
After the end of the Fee Reduction Period, Borrower shall be required
to comply with Section 9.19 of the Loan Agreement in accordance with
its terms.
10. Cash Collateral. Without limiting any other rights of Lender, or the
prior grant to Lender of any security interest in the Collateral,
Borrower hereby confirms and agrees that it has granted to Lender a
security interest in and lien upon, and pledge of, cash at any time
now or hereafter held or received by or in transit to Lender from or
for the account of Borrower as collateral security for the prompt
performance, observance and indefeasible payment in full of all of the
Obligations. With respect to any Letter of Credit Accommodations
provided as of the date hereof and at any time on or prior to the
request by Borrower of any Letter of Credit Accommodation after the
date hereof, Borrower shall deliver, or cause to be delivered to
Lender, additional cash in an amount not less than one hundred ten
(110%) percent of the amount of the Letter of Credit Accommodation
requested. Such cash shall be collateral security for the prompt
performance, observance and indefeasible payment in full of all of the
Obligations. All of such cash described in this Section 10 whether
delivered to Lender prior to or after the date hereof is referred to
herein as the "Cash Collateral". The Cash Collateral shall be held by
Lender in an account designated by Lender for such purposes in its
books and records and may be commingled with Lender's own funds.
Borrower shall have no right to be paid or to draw upon any of the
Cash Collateral until all of the Obligations have been indefeasibly
paid and satisfied in full. If and when all of the Obligations have
been indefeasibly paid and satisfied in full (or sooner if Lender so
determines), any sums still held by Lender as Cash Collateral
hereunder shall be returned to Borrower (subject to applicable law or
court order).
11. Additional Representations, Warranties and Covenants. Borrower and
each Guarantor 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 Loans or
Letter of Credit Accommodations by Lender to Borrower:
(a) After giving effect to the provisions of this Amendment, no Event
of Default exists or has occurred as of the date of this
Amendment.
(b) This Amendment has been duly executed and delivered by Borrower
and each Guarantor and is in full force and effect as of the date
hereof and the agreements and obligations of Borrower and each
Guarantor contained herein constitute legal, valid and binding
obligations of Borrower and each Guarantor enforceable against
each of them in accordance with their respective terms.
12. Conditions Precedent. The effectiveness of the amendments contained
herein shall be subject to the receipt by Lender of this Amendment
duly authorized, executed and delivered by the parties hereto.
13. Effect of this Amendment. Except as expressly set forth herein, no
other amendments, consents, changes or modifications to the Financing
Agreements 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 and
Borrower and Guarantors shall not be entitled to any other or further
amendment or consent by virtue of the provisions of this Amendment or
with respect to the subject matter of this Amendment. 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 and this Amendment shall be read and construed as one
agreement.
14. Governing Law. The validity, interpretation and enforcement of this
Amendment and the other Financing Agreements and any dispute arising
out of the relationship between the parties hereto whether in
contract, tort, equity or otherwise, shall be governed by the internal
laws of the State of New York but excluding any principles of
conflicts of law or other rule of law that would cause the application
of the law of any jurisdiction other than the laws of the State of New
York.
15. 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.
16. Headings. The headings listed herein are for convenience only and do
not constitute matters to be construed in interpreting this Amendment.
17. 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. Delivery of
an executed counterpart of this Amendment by telefacsimile shall have
the same force and effect as delivery of an original executed
counterpart of this Amendment. Any party delivering an executed
counterpart of this Amendment by telefacsimile also shall deliver an
original executed counterpart of this Amendment, but the failure to
deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment as to
such party or any other party.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their authorized officers as of the day and year
first above written.
CONGRESS FINANCIAL CORPORATION
By:/s/ Xxxxxx X. Xxxx
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Title:Vice-President
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XXXXXX INTERNATIONAL CORP.
By:/s/ Xxxxxxx Xxxxxx
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Title:V.P. & CFO
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HAPL LEASING CO., INC.
By:/s/Xxxxxxx Xxxxxx
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Title:V.P. & CFO
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SEDECO, INC.
By:/s/Xxxxxxx Xxxxxx
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Title:V.P. & CFO
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XXXXXX BUSINESS CONCEPTS, LLC
By:/s/Xxxxxxx Xxxxxx
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Title:V.P. & CFO
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HOMETOWN THREADS, LLC
By:/s/Xxxxxxx Xxxxxx
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Title:V.P. & CFO
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