CONSENT AND SECOND AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS CONSENT AND SECOND AMENDMENT (this "Consent and
Amendment") is entered into as of April 22, 1999, between BIG XXXXX BRANDS,
INC., a Delaware corporation ("Borrower"), and NATIONSCREDIT COMMERCIAL
CORPORATION, THROUGH ITS NATIONSCREDIT COMMERCIAL FUNDING DIVISION ("Lender").
WHEREAS, Borrower has advised Lender that it has entered into
an agreement to (a) sell substantially all of its assets relating to its
workwear products business, including machinery and equipment, raw materials,
work-in-process, trims and finished goods related thereto (other than real
property and certain intellectual property), to Walls Industries ("Buyer") and
(b) transfer all of its trademarks to a new entity known as Big Xxxxx Holdings,
Inc., which will, among other things, license the trademarks to Buyer
(collectively, the "Transaction"); and
WHEREAS, Borrower has requested that Lender consent to the
Transaction and release its liens on the assets being sold and on the trademarks
being transferred, and Lender is willing to do so on the terms and conditions
set forth herein; and
WHEREAS, Borrower has requested that Lender amend the Loan and
Security Agreement between Borrower and Lender dated December 10, 1997, as
amended (the "Loan Agreement") in various respects, and Lender has agreed to do
so subject to the terms contained herein;
NOW THEREFORE, in consideration of the premises and mutual
agreements herein contained, the parties hereto agree as follows:
1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to such terms in the Loan
Agreement.
2. Consent. Subject to the terms and conditions set forth
herein, Lender hereby consents to the Transaction and agrees to release its
liens on the assets of Borrower being sold to Buyer and on the trademarks being
transferred to Big Xxxxx Holdings, Inc.
3. Amendments to Loan Agreement
(a) Section 1(a) of Schedule A to the Loan Agreement is hereby
amended and restated in its entirety as follows:
"1. Loan Limits for Revolving Loans:
(a) Maximum Facility
Amount: $7,000,000"
(b) Section 1(b)(ii) of Schedule A to the Loan Agreement
is hereby amended and restated in its entirety as follows:
"(ii) Inventory Advance Rate(s):
(A) Finished goods: 40%
(B) Raw materials: N/A
(C) Piece goods, work in process and trim: N/A"
(c) Section 1(d) of Schedule A to the Loan Agreement is
hereby amended and restated in its entirety as follows:
"(d) Inventory Sublimit(s):
(i) Overall sublimit on advances against
Eligible Inventory $2,000,000
(ii) Sublimit on advances against piece goods N/A
(iii) Sublimit on advances against raw materials N/A
(iv) Sublimit on advances against work in process N/A
(v) Sublimit on advances against trim N/A
(vi) Sublimit on advances against Inventory
in outlet stores N/A
(d) Section 1(e) of Schedule A to the Loan Agreement is
hereby amended and restated in its entirety as follows:
"(e) Additional Advance Rates
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(i) Equipment Advance Rate: N/A
(ii) Real Property Advance Rate: $114,000, which advance rate
will be reduced to 0 in monthly
increments of $2,600 on the
first day of each calendar month
commencing May 1, 1999
(iii) Trademark Advance Rate: N/A"
(e) Section 6(h) of Schedule A to the Loan Agreement is
hereby amended and restated in its entirety as follows:
"(h) Early Termination Fee: 2.5% of the Maximum Facility
Amount if terminated on or prior
to December 10, 1999 and 2% of
the Maximum Facility Amount if
terminated after December 10,
1999 but before December 10,
2001"
(f) Section 7 of Schedule A to the Loan Agreement is
hereby amended and restated in its entirety as follows:
"7. Initial Maturity Date: December 10, 2001"
(g) Section 8(e) of Schedule A to the Loan Agreement is
hereby amended and restated in its entirety as follows:
"(e) Maximum Cumulative Net Loss: $450,000; if exceeded, Lender
shall have the right to reduce
the Accounts Advance Rate to
80%"
(h) Section 9 of Schedule A to the Loan Agreement is
hereby amended and restated in its entirety as follows:
"9. Borrower Information:
(a) Prior Names of Borrower: Gemini Marketing Associates,
Inc.
(b) Prior Trade Names of
Borrower: N/A
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(c) Existing Trade Names of Big Xxxxx Brands, Inc., Big
Borrower: Xxxxx, Big Xxxxx Mountain
Classics, Big Xxxxx Vintage,
Big Xxxxx Kids
(d) Inventory Locations: Big Xxxxx Brands, Inc. (retail
store)
000 0xx Xxxxxx
Xxxxx Xxxxx, Xxxxxxx 00000
(e) Other Locations: Big Xxxxx Brands, Inc.
(Administrative Office)
0000 X. Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxxx, Xxxxxxx 00000
(f) Litigation: See attached
(g) Ownership of Borrower: N/A
(h) Subsidiaries (and ownership Big Xxxxx Global, Ltd. (100%)
thereof): Big Xxxxx Holdings Corp. (60%)
(i) Facsimile Numbers:
Borrower: (000) 000-0000
Lender: (000) 000-0000"
4. Conditions to Effectiveness. This Consent and Amendment
shall be effective from the date hereof upon receipt by Lender of (i) a fully
executed copy of this Consent and Amendment; (ii) proceeds of the sale of assets
to Buyer in an amount not less than $3,157,000, which amount shall be applied to
repayment of the Obligations as provided in the Loan Agreement; (iii) a duly
executed Consent and Amendment to the Deed of Trust in form and substance
satisfactory to Lender; and (iv) an accommodation fee of $45,000.
5. Other Amendments. This Consent and Amendment shall
constitute an amendment to the Loan Agreement and all of the other Loan
Documents as appropriate to express the agreements contained herein. In all
other respects, the Loan Agreement and the other Loan Documents shall remain
unchanged and in full force and effect in accordance with their original terms.
6. Miscellaneous.
(a) Warranties and Absence of Defaults. In order to induce
Lender to enter into this Consent and Amendment, Borrower hereby warrants to
Lender, as of the date hereof, that:
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(i) The representations and warranties of Borrower contained in the
Loan Agreement are true and correct as of the date hereof as if
made on the date hereof.
(ii) All information, reports and other papers and data heretofore
furnished to Lender by Borrower in connection with this Consent
and Amendment, the Loan Agreement and the other Loan Documents are
accurate and correct in all material respects and complete insofar
as may be necessary to give Lender true and accurate knowledge of
the subject matter thereof. Borrower has disclosed to Lender every
fact of which it is aware which might adversely affect the
business, operations or financial condition of Borrower or the
ability of Borrower to perform its obligations under this Consent
and Amendment, the Loan Agreement or under any of the other Loan
Documents. None of the information furnished to Lender by or on
behalf of Borrower contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the
statements contained herein or therein not materially misleading.
(iii) No Event of Default or Default exists as of the date hereof.
(b) Expenses. Borrower agrees to pay on demand all costs and
expenses of Lender (including the reasonable fees and expenses of outside
counsel for Lender) in connection with the preparation, negotiation, execution,
delivery and administration of this Consent and Amendment and all other
instruments or documents provided for herein or delivered in connection
herewith. In addition, Borrower agrees to pay, and save Lender harmless from all
liability for, any stamp or other taxes which may be payable in connection with
the execution or delivery of this Consent and Amendment or the Loan Agreement,
as amended hereby, and the execution and delivery of any instruments or
documents provided for herein or delivered or to be delivered hereunder or in
connection herewith. All obligations provided in this Section 4(b) shall survive
any termination of this Consent and Amendment and the Loan Agreement as amended
hereby.
(c) Governing Law. This Consent and Amendment shall be a
contract made under and governed by the internal laws of the State of New York.
(d) Counterparts. This Consent and Amendment may be executed
in any number of counterparts, and by the parties hereto on the same or separate
counterparts, and each such counterpart, when executed and delivered, shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same Consent and Amendment.
(e) Reference to Loan Agreement. On and after the
effectiveness of the amendment to the Loan Agreement accomplished hereby, each
reference in the Loan Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import, and each reference to the Loan Agreement in
any other Loan Documents, or other agreements,
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documents or other instruments executed and delivered pursuant to the Loan
Agreement, shall mean and be a reference to the Loan Agreement, as amended by
this Consent and Amendment.
(f) Successors. This Consent and Amendment shall be binding
upon Borrower, Lender and their respective successors and assigns, and shall
inure to the benefit of Borrower, Lender and the successors and assigns of
Lender.
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IN WITNESS WHEREOF, the parties hereto have caused this Consent and Amendment to
be executed by their respective officers thereunto duly authorized and delivered
as of the date first above written.
BIG XXXXX BRANDS, INC.
By______________________________
Its_____________________________
NATIONSCREDIT COMMERCIAL
CORPORATION, THROUGH ITS
NATIONSCREDIT COMMERCIAL FUNDING
DIVISION
By______________________________
Its_____________________________
ACKNOWLEDGEMENT AND REAFFIRMATION OF INDIVIDUAL GUARANTY
The undersigned hereby acknowledges that he has received and
reviewed a copy of the foregoing Consent and Amendment to Loan and Security
Agreement between Big Xxxxx Brands, Inc. and NationsCredit Commercial
Corporation, through its NationsCredit Commercial Funding Division of even date
herewith. The undersigned hereby reaffirms his obligations to Lender under and
as defined in that certain Individual Guaranty issued by the undersigned in
favor of Lender and dated December 5, 1997.
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S. XXXXX XXXXXXXX
Dated: March ___, 1999
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