FIFTH AMENDMENT AND MODIFICATION
TO LOAN AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT AND MODIFICATION TO LOAN AND SECURITY AGREEMENT
(the "AMENDMENT") is made effective as of May 11, 2000 by and among TODAY'S MAN,
INC., a Pennsylvania corporation ("BORROWER"); each of the Subsidiaries of the
Borrower identified under the caption "Guarantor" on the signature pages of this
Amendment (individually, a "GUARANTOR" and, collectively, the "GUARANTORS");
each of the financial institutions identified under the caption "Lenders" on the
signature pages of this Amendment (including without limitation Mellon in such
capacity) (individually, a "LENDER" and, collectively, the "LENDERS"); and
MELLON BANK, N.A., a national banking association, as agent for the Lenders (in
such capacity, together with its successors in such capacity, the "AGENT").
BACKGROUND
A. Borrower, Guarantors, Lender and Agent previously entered into a certain
Loan and Security Agreement dated December 4, 1998, as amended by (i) that
certain First Amendment and Modification to Loan and Security Agreement dated
Xxxxx 00, 0000, (xx) that certain Second Amendment and Modification to Loan and
Security Agreement dated October 13, 1999, (iii) that certain Third Amendment
and Modification to Loan and Security Agreement dated March 15, 2000 (the "THIRD
AMENDMENT"), and (iv) that certain Fourth Amendment and Modification to Loan and
Security Agreement dated May 1, 2000 (collectively, the "LOAN AGREEMENT"),
pursuant to which, INTER ALIA, Lender agreed to extend to Borrower a revolving
credit facility up to a maximum outstanding principal amount of Thirty-Five
Million Dollars ($35,000,000.00).
B. Borrowers, Guarantors, Lender and Agent are entering into this Amendment
to amend certain terms and conditions of the Loan Agreement.
C. Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth for such terms in the Loan Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
intending to be legally bound hereby, the parties hereto agree as follows:
1. TANGIBLE NET WORTH. SECTION 13.1 of the Loan Agreement shall be and
is hereby amended to read in its entirety as follows:
"13.1. TANGIBLE NET WORTH. Borrower will maintain Tangible Net
Worth of not less than the following amounts for the following periods:
AMOUNT PERIODS
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$48,809,000.00 as of November 30, 1999 and at all
times thereafter until January 28, 2000;
$39,340,000.00 as of January 29, 2000;
$36,500,000.00 as of January 30, 2000 and at all times
thereafter until April 28, 2000;
$33,000,000.00 as of April 29, 2000 and at all times
thereafter until May 30, 2000;
$34,000,000.00 as of May 31, 2000 and at all times
thereafter until June 30, 2000;
$35,500,000.00 as of July 1, 2000 and at all times
thereafter until August 25, 2000;
$34,800,000.00 as of August 26, 2000 and at all times
thereafter until September 29, 2000;
$34,000,000.00 as of September 30, 2000 and at all
times thereafter until October 27, 2000;
$35,250,000.00 as of October 28, 2000 and at all times
thereafter until November 24, 2000;
$35,000,000.00 as of November 25, 2000 and at all
times thereafter until December 29,
2000; and
$38,000,000.00 as of December 30, 2000 and at all
times thereafter."
2. NET INCOME/NET LOSS. Agent agrees to waive Borrower's compliance
with the Net Income/Net Loss covenant set forth in SECTION 13.5 of the Loan
Agreement for the fiscal month ending April 29, 2000. Such waiver shall be
limited to Borrower's compliance with the Net Income/Net Loss covenant solely
for the fiscal month ending April 29, 2000 and for no other period and such
waiver shall not be construed to constitute a waiver of Borrower's or any
Guarantor's compliance with any other terms of the Loan Documents or an
agreement to enter into any future waivers with Borrower or any Guarantor.
3. EXTENSION OF PERMITTED OUT-OF-FORMULA ADVANCES AND USAGE.
Notwithstanding anything to the contrary contained in the Loan Agreement
(including the terms of SECTION 9 of the Third Amendment), Borrower may continue
to exceed the formula availability calculated pursuant to SECTIONS 2.1 AND 2.3
of the Loan Agreement by an amount not to exceed (i) $2,500,000.00 for a period
commencing on June 30, 2000 and ending on August 15, 2000, (ii) $2,250,000.00
for a period commencing on August 16, 2000 and ending on September 15, 2000,
(iii) $1,250,000.00 for a period commencing on September 16, 2000 and ending on
October 15, 2000, and (iv) $1,000,000.00 for a period commencing on October 16,
2000 and ending on November 30, 2000. On November 30, 2000, all Out-Of-Formula
Advances must be repaid in full. In no event shall the outstanding Revolving
Credit Facility Usage (including the permitted Out-Of-Formula
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Advances described above) exceed $35,000,000.00. For purposes of this Amendment
and the Loan Agreement "Out-Of-Formula Advances" shall be redefined to mean the
amount by which the then existing Revolving Credit Facility Usage exceeds the
then applicable Borrowing Base.
Upon the occurrence of a Default or an Event of Default under the Loan
Documents, at the Agent's option, Borrower will repay all Out-Of-Formula
Advances.
4. TERMINATION FEE. Notwithstanding anything to the contrary set forth
in SECTION 7.10 of the Loan Agreement, in the event that the Revolving Credit
Facility is terminated on or before March 14, 2002 the termination fee payable
by Borrower will be to equal $1,050,000.
5. MAXIMUM REVOLVING CREDIT FACILITY AMOUNT. Effective November 30,
2000, the Maximum Revolving Credit Facility Amount will be reduced and reset at
$30,000,000. Accordingly, effective on November 30, 2000, the definition of
"Maximum Revolving Credit Facility" in SECTION 1.1 of the Loan Agreement is
amended in its entirety to read as follows:
"MAXIMUM REVOLVING CREDIT FACILITY AMOUNT means $30,000,000."
Borrower agrees to execute and deliver to Agent on or before November
30, 2000 replacement Notes in the aggregate amount of the revised Maximum
Revolving Credit Facility Amount, which replacement Notes are given in
substitution and replacement for the existing Notes and not in payment or
satisfaction of such existing Notes. Such replacement Notes shall be in form and
content acceptable to Agent. All references to Notes in the Loan Documents shall
be deemed to be references to the replacement Notes. Upon receipt of the
original signed replacement Notes by the Lenders, the Lenders will return to
Borrower the prior Notes marked "Replaced" or "Substituted".
6. MAINTENANCE OF MINIMUM BORROWINGS. At all times, Borrower shall
maintain an aggregate outstanding balance under the Revolving Credit Facility of
at least Ten Million Dollars ($10,000,000.00). If such balance is not maintained
during any month, Borrower will pay to Agent (for the benefit of Lenders) a fee
equal to the difference between (a) the interest that would have accrued on the
Revolving Credit Facility if the balance had been Ten Million Dollars
($10,000,000.00) at all times during such month, and (b) the interest accrued on
the actual balance of the Revolving Credit Facility during such month.
7. NEW CAPITAL FUNDS. Borrower has represented to Lender and Agent
that Borrower is seeking to raise additional equity funds or subordinated debt
financing ("NEW CAPITAL FUNDS") from various sources. Borrower acknowledges and
agrees that the issuance of stock in connection with Borrower obtaining new
equity, the incurrence of new subordinated indebtedness and matters related to
obtaining such New Capital Funds will require the prior written consent of
Lender and Agent. Borrower agrees to provide Agent with weekly up-dates
regarding its current and future efforts to obtain New Capital Funds and agrees
to provide Agent with copies of all material
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undertakings, commitments or similar proposals or agreements to provide New
Capital Funds promptly upon receipt of such items by Borrower, together with a
description of how Borrower intends to respond to such proposals, the timetable
for such transactions and such information as Agent may reasonably require
regarding the source and terms of such New Capital Funds.
8. BUSINESS PLAN. Borrower has represented to Lender and Agent that
Borrower will continue to perform its business and operations consistent with
the business plan of Borrower previously delivered to Agent by Borrower.
9. CONSULTANT. Borrower has represented to Lender and Agent that on or
before May 31, 2000, Borrower will engage a consultant to assist Borrower in
obtaining the New Capital Funds; in preparing, completing and implementing
general business strategies; implementing the business plan; and in general
business operations. Borrower agrees to provide Agent with weekly updates
regarding its efforts to engage such consultant and to provide Agent promptly
with background information regarding each proposed consultant.
10. FEES. Borrower agrees to pay to Agent (for the benefit of Lender)
the fees set forth in that certain fee letter between Borrower and Agent of even
date herewith.
11. CONFIRMATION OF COLLATERAL. Nothing contained herein shall be
deemed to be a compromise, satisfaction, accord and satisfaction, novation or
release of any of the Loan Documents, or any rights or obligations thereunder,
or a waiver by Agent or any Lender of any of its rights under the Loan Documents
or at law or in equity. All liens, security interest, rights and remedies
granted to Agent or Lenders in Loan Documents are hereby ratified, confirmed and
continued. Borrowers and Guarantors acknowledge and agree that the term "Loan
Documents" as used in the Loan Agreement and any other documents executed in
connection therewith shall include, without limitation, this Amendment and any
and all other documents executed in connection herewith.
12. CHALLENGE TO ENFORCEMENT. Borrower and Guarantors acknowledge and
agree that they do not have any defense, set-off, counterclaim or challenge
against the payment of any sums owing under the Loan Documents, or the
enforcement of any of the terms or conditions thereof.
13. REPRESENTATION WARRANTIES. Borrower and Guarantors hereby
represent and warrant, which representations and warranties shall survive until
all Obligations are paid and satisfied in full, as follows:
(A) All representations and warranties of Borrower and Guarantors
set forth in the Loan Documents are true and complete in all material respects
as of the date hereof.
(B) Upon the execution of this Amendment, no condition or event
exists or has occurred which would constitute an event of default under the Loan
Documents or under any
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other agreement between Borrower, any Guarantor and any other third party (or
would, upon the giving of notice or the passage of time, or both constitute an
event of default).
(C) Borrower has not received any notice of default or event of
default from any other lender, trustee or lessor with respect to any other loan,
financing or lease agreement.
(D) The execution and delivery of this Amendment by Borrower and
Guarantors and all documents and agreements to be executed and delivered
pursuant to the terms hereof:
(I) have been duly authorized by all requisite corporate
action by Borrower and by each Guarantor;
(II) will not conflict with or result in the breach of or
constitute a default (upon the passage of time, delivery of notice or both)
under Borrower's or any Guarantor's Articles of Incorporation, By-Laws or any
applicable statute, law, rule, regulation or ordinance or any indenture,
mortgage, loan or other document or agreement to which Borrower or any Guarantor
is a party or by which any of them is bound or affected; and
(III) will not result in the creation or imposition of any
lien, charge or encumbrance of any nature whatsoever upon any of the property or
assets of Borrower or any Guarantor, except liens in favor of the Agent or as
permitted hereunder or under the Loan Documents.
14. CONDITIONS. The obligation of Agent and Lender to enter into this
Amendment is subject to the following conditions (any of which may be waived by
Agent):
(A) LOAN DOCUMENTS. Borrower and Guarantors and all other
required persons and entities will have executed and delivered to Agent this
Amendment and such other documents as Agent may require.
(B) REPRESENTATIONS AND WARRANTIES. All representations and
warranties of Borrower and Guarantors set forth in the Loan Documents are true
at and as of the date hereof.
(C) NO DEFAULT. No condition or event shall exist or have
occurred which would constitute a Default or an Event of Default hereunder.
(D) FEE LETTER. Borrower will execute and deliver to Agent that
certain fee letter dated May 11, 2000.
(D) SIDE LETTER. Borrower, Guarantors and Xxxxx Xxxx will execute
and deliver to Agent that certain side letter between dated May 11, 2000.
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(E) OTHER DOCUMENTS. Such other documents as may be required to
be submitted to Agent by the terms hereof or any of the Loan Documents shall
have been delivered by or on behalf of Borrower and Guarantors to Agent.
15. ADDITIONAL DOCUMENTS; FURTHER ASSURANCES. Borrower covenants and
agrees to execute and deliver to Agent, or to cause to be executed and delivered
to Agent contemporaneously herewith, at the sole cost and expense of Borrower,
any and all other documents, agreements, statements, resolutions, certificates,
consents and information as Agent may require in connection with the matters or
actions described herein. Borrower further covenants and agrees to execute and
deliver to Agent or to cause to be executed and delivered at the sole cost and
expense of Borrower, from time to time, any and all other documents, agreements,
statements, certificates and information as Agent shall reasonably request to
evidence or effect the terms hereof, the Loan Agreement, as amended, or any of
the other Loan Documents, or to enforce or to protect Agent's interest in the
Collateral. All such documents, agreements, statements, certificates and
information shall be in form and content acceptable to Agent in its sole
discretion.
16. CERTAIN FEES, COSTS, EXPENSES AND EXPENDITURES. Borrower will pay
all of the Agent's expenses in connection with the review, preparation,
negotiation, documentation and closing of this Amendment and the consummation of
the transactions contemplated hereunder, including without limitation, costs and
fees and expenses of counsel retained by Agent and all fees related to filings,
recording of documents and searches, whether or not the transactions
contemplated hereunder are consummated. Nothing contained herein shall limit in
any manner whatsoever any Lender's or Agent's right to reimbursement under any
of the Loan Documents.
17. COMMUNICATIONS AND NOTICES. All notices, requests and other
communications made or given in connection with this Amendment shall be made in
accordance with the provisions of the Loan Agreement.
18. TIME OF ESSENCE. Time is of the essence of this Amendment.
19. NO WAIVER. Except as otherwise provided herein, nothing contained
and no actions taken by Agent in connection herewith shall constitute nor shall
they be deemed to be a waiver, release or amendment of or to any rights,
remedies, or privileges afforded to Agent under the Loan Documents or under the
UCC. Nothing herein shall constitute a waiver by Agent of Borrower's or any
Guarantor's compliance with the terms of the Loan Documents, nor shall anything
contained herein constitute an agreement by Agent to enter into any further
amendments with Borrower and Guarantors.
20. INCONSISTENCIES. To the extent of any inconsistencies between the
terms and conditions of this Amendment and the terms and conditions of the Loan
Documents, the terms and conditions of this Amendment shall prevail. All terms
and conditions of the Loan Documents not inconsistent herewith shall remain in
full force and effect and are hereby ratified and confirmed by Borrower and
Guarantors.
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21. BINDING EFFECT. This Amendment and all rights and powers granted
hereby will bind and inure to the benefit of the parties hereto and their
respective permitted successors and assigns.
22. SEVERABILITY. The provisions of this Amendment and all other Loan
Documents are deemed to be severable, and the invalidity or unenforceability of
any provision shall not affect or impair the remaining provisions which shall
continue in full force and effect.
23. NO THIRD PARTY BENEFICIARIES. The rights and benefits of this
Amendment and the Loan Documents shall not inure to the benefit of any third
party.
24. MODIFICATIONS. No modifications of this Amendment or any of the
Loan Documents shall be binding or enforceable unless in writing and signed by
or on behalf of the party against whom enforcement is sought.
25. HOLIDAYS. If the day provided herein for the payment of any amount
or the taking of any action falls on a Saturday, Sunday or public holiday at the
place for payment or action, then the due date for such payment or action will
be the next succeeding Business Day.
26. LAW GOVERNING. This Amendment has been made, executed and
delivered in the Commonwealth of Pennsylvania and will be construed in
accordance with and governed by the laws of such Commonwealth, without regard to
any rules or principles regarding conflicts of law or any rule or canon of
construction which interprets agreements against the draftsman.
27. HEADINGS. The headings of the Articles, Sections, paragraphs and
clauses of this Amendment are inserted for convenience only and shall not be
deemed to constitute a part of this Amendment.
28. COUNTERPARTS; FACSIMILE SIGNATURES. This Amendment may be executed
in any number of counterparts, all of which taken together constitute one and
the same instrument, and any of the parties hereto may execute this Amendment by
signing any such counterpart. Any signature delivered via facsimile shall be
deemed an original signature hereto.
29. JOINT AND SEVERAL. The obligations of Borrower and Guarantors
under this Amendment shall be joint and several obligations.
30. WAIVER OF RIGHT TO TRIAL BY JURY. BORROWER, GUARANTORS AND THE
LENDER GROUP WAIVE ANY RIGHT TO TRIAL BY JURY ON ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION (A) ARISING UNDER THIS AMENDMENT, (B) ARISING UNDER ANY OF THE
OTHER LOAN DOCUMENTS OR (C) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL
TO THE DEALINGS OF BORROWER, GUARANTORS OR ANY MEMBER OF THE LENDER GROUP WITH
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RESPECT TO THIS AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
RELATED HERETO OR THERETO, IN EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE. BORROWER, GUARANTORS AND THE LENDER GROUP AGREE AND CONSENT THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY TO THIS AMENDMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF BORROWER, GUARANTORS AND THE LENDER GROUP TO THE WAIVER OF THEIR
RIGHT TO TRIAL BY JURY. BORROWER AND GUARANTORS ACKNOWLEDGE THAT THEY HAVE HAD
THE OPPORTUNITY TO CONSULT WITH COUNSEL REGARDING THIS SECTION, THAT THEY FULLY
UNDERSTAND ITS TERMS, CONTENT AND EFFECT, AND THAT THEY VOLUNTARILY AND
KNOWINGLY AGREE TO THE TERMS OF THIS SECTION.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
intending to be legally bound hereby. BORROWER:
TODAY'S MAN, INC., a Pennsylvania
corporation
[CORPORATE SEAL] By:
-------------------------------------
Name/Title:
-----------------------------
GUARANTORS:
BENMOL, INC., a Delaware corporation
By:
-------------------------------------
[CORPORATE SEAL] Name/Title:
-----------------------------
D & L, INC., a Delaware corporation
By:
-------------------------------------
[CORPORATE SEAL] Name/Title:
-----------------------------
XXXX & XXXX, INC., a Delaware corporation
By:
-------------------------------------
[CORPORATE SEAL] Name/Title:
-----------------------------
XXXXXXXXX.XXX INC., a Delaware
corporation
By:
-------------------------------------
[CORPORATE SEAL] Name/Title:
-----------------------------
(SIGNATURES CONTINUED ON NEXT PAGE)
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(SIGNATURES CONTINUED FROM PREVIOUS PAGE)
LENDERS:
MELLON BANK, N.A.
By:
-------------------------------------
Xxxxxx X. Xxxxxx, Vice President
AGENT:
MELLON BANK, N.A.
By:
-------------------------------------
Xxxxxx X. Xxxxxx, Vice President
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