04/17/98
AMENDMENT NO. 11 TO
LOAN AND SECURITY AGREEMENT
This Amendment No. 11 to Loan and Security Agreement (this "Amendment")
is entered into as of this 30th day of April, 1998, by and between FINOVA
CAPITAL CORPORATION, a Delaware corporation ("Lender"), and GENERAL TEXTILES, a
California corporation ("Borrower").
W I T N E S S E T H :
WHEREAS, Borrower and Greyhound Financial Capital Corporation, an
Oregon corporation, predecessor by merger and name change to Lender, entered
into a Loan and Security Agreement dated as of October 14, 1993, as amended by
(i) an Amendment No. 1 to Loan and Security Agreement dated as of July 11, 1994,
(ii) an Amendment No. 2 to Loan and Security Agreement dated as of Xxxxx 00,
0000, (xxx) an Amendment No. 3 to Loan and Security Agreement dated as of July
27, 1995, (iv) an Amendment No. 4 to Loan and Security Agreement dated as of
November 10, 1995, (v) an Amendment No. 5 to Loan and Security Agreement dated
as of April 18, 1996, (vi) an Amendment No. 6 to Loan and Security Agreement
dated as of July 10, 1996, (vii) an Amendment No. 7 to Loan and Security
Agreement dated as of December 31, 1996, (viii) a Letter Agreement dated January
10, 1997 with respect to the establishment of certain letters of credit (ix) an
Amendment No. 8 to Loan and Security Agreement and Waiver dated April 23, 1997,
(x) an Amendment No. 9 to Loan and Security Agreement dated as of May 30, 1997,
and (xi) an Amendment No. 10 to Loan and Security Agreement and Waiver dated as
of September 24, 1997 (as so amended, the "Loan Agreement"), that evidences a
loan from Lender to Borrower; and
WHEREAS, Borrower has asked Lender to modify the Loan Agreement in
accordance with the terms of, and subject to the conditions contained in, this
Amendment and Lender is willing so to amend the Loan Agreement, upon the terms
and conditions set forth herein.
NOW, THEREFORE, in consideration of these recitals, the covenants
contained in this Amendment, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Lender and Borrower
agree as follows:
1. Definitions. Unless otherwise defined in this Amendment, all
capitalized terms used herein which are defined in the Loan Agreement have the
same meaning as set forth in the Loan Agreement.
2. Loan Agreement. The Loan Agreement is amended as follows:
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2.1.Definitions. Section 1(A) is hereby amended by adding the following
definitions:
"'Eleventh Amendment' means that certain Amendment
No. 11 to Loan and Security Agreement between Lender and
Borrower dated as of April 30, 1998."
"'Eleventh Amendment Effective Date' means April 30,
1998, the date upon which the Eleventh Amendment became
effective pursuant to the terms and upon the conditions
thereof."
2.2.Current Ratio. Paragraph 14(N) is hereby amended in its entirety
to read as follows:
"(N) Current Ratio. Borrower shall maintain its ratio
of Current Assets to Current Liabilities, measured as of the
end of each fiscal quarter set forth in the table below, of
not less than the amount set forth opposite such quarter:
Test Date Current Ratio
April 30, 1998 1.05 to 1.0
July 31, 1998 1.00 to 1.0
October 31, 1998 1.05 to 1.0
January 31, 1999 0.90 to 1.0
Thereafter 1.20 to 1.0"
2.3 Senior Debt Service Coverage. Paragraph 22 of the Addendum
to the Loan Agreement is hereby amended to provide that, so long as any
of the Obligations remain outstanding and the Loan Agreement is in
effect, Borrower shall maintain its ratio of Operating Cash Flow to
Senior Contractual Debt Service, measured as of the end of each
calendar month set forth in the table below (on a rolling twelve-month
basis), of not less than the amount set forth opposite such month:
Test Date Senior Debt
Service Ratio
April 30, 1998 1.60 to 1.0
July 31, 1998 1.15 to 1.0
October 31, 1998 1.15 to 1.0
January 31, 1999 1.30 to 1.0
Thereafter 1.60 to 1.0
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2.4 Total Debt Service Coverage. Paragraph 22 of the Addendum
to the Loan Agreement is hereby further amended to provide that, so
long as any of the Obligations remain outstanding and the Loan
Agreement is in effect, Borrower shall maintain its ratio of Operating
Cash Flow to Total Contractual Debt Service, measured as of the end of
each calendar month set forth in the table below (on a rolling
twelve-month basis), of not less than the amount set forth opposite
such month:
Test Date Total Debt
Service Ratio
April 30, 1998 1.40 to 1.0
July 31, 1998 1.00 to 1.0
October 31, 1998 1.00 to 1.0
January 31, 1999 1.15 to 1.0
Thereafter 1.40 to 1.0
3. Effect as an Amendment. Other than as specifically set forth in this
Amendment, the remaining terms of the Loan Agreement and the other Loan
Documents shall remain in full force and effect and shall remain unaffected and
unchanged except as specifically amended hereby. In the event of any conflict
between the terms and conditions of this Amendment and any of the other Loan
Documents, the provisions of this Amendment shall control. Each reference to in
the Loan Agreement to "this Agreement" shall be deemed to refer to the Loan
Agreement as amended through and including the Eleventh Amendment, and each
reference in any other Loan Document to the Loan Agreement as amended through
and including the Eleventh Amendment.
4. No Waiver. This Amendment in no way acts as a waiver by Lender of
any breach, default, Event of Default or condition which, with the giving of
notice or passing of time or both, would constitute an Event of Default, of
Borrower (whether known or unknown to Lender) or as a release or relinquishment
of any of the liens, security interests, rights or remedies securing payment and
performance of the Obligations or the enforcement thereof. Nothing contained in
this Amendment is intended to or shall be construed as relieving any person or
entity, whether a party to this Amendment or not, of any of such person's or
entity's obligations to Lender.
5. Amendment Fee. In consideration of Lender's agreement to enter into
this Amendment and to the modification to the Loan Documents and the waivers by
Lender described herein, Borrower agrees to pay on or before the Eleventh
Amendment Effective Date the amount of FORTY-FIVE THOUSAND DOLLARS ($45,000)
(the "Amendment Fee"). Borrower and Lender acknowledge that Lender may withhold
the Amendment Fee from the proceeds of the Total Facility, to the extent the
Amendment Fee is not paid prior to disbursement thereof.
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6. Conditions Precedent. This Amendment will not be effective unless
and until each of the following conditions precedent have been satisfied, in
form, manner and substance satisfactory to Lender prior to April 30, 1998:
(a) Borrower shall have delivered or caused to be delivered to
Lender the following documents, all of which shall be properly
completed, executed and otherwise satisfactory to Lender:
(i) This Amendment;
(ii)Consent of Guarantor in the form attached hereto and
incorporated herein by this reference;
(iii)A corporate resolution and Certificate of Secretary of
each of Borrower and Guarantor, approving the
transactions contemplated hereby to which it is a party;
(iv) An Acknowledgment and Reaffirmation, in form and
substance, and from such parties, as Lender may
require; and
(v)Such other items as Lender may require or deem necessary.
(b) There shall not then exist an Event of Default or any act
or event which with notice, passage of time, or both would constitute
an Event of Default.
(c) All the representations and warranties of the Loan Parties
in the Loan Documents shall be true and correct, in all material
respects, before and after giving effect to the making of this
Amendment.
(d) Borrower shall have paid all closing costs, recording fees
and taxes, appraisal fees and expenses, travel expenses, fees and
expenses of Lender's counsel, and all other costs and expenses incurred
by Lender in connection with the preparation of, closing of and
disbursement of the advances pursuant to this Amendment, which costs,
fees and expenses may be payable from the first advance made pursuant
to this Amendment.
(e) Borrower shall have paid the Amendment Fee.
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7. Indebtedness Acknowledged. Borrower acknowledges that the
indebtedness evidenced by the Loan Documents is just and owing and agrees to pay
such indebtedness in accordance with the terms of the Loan Documents. Borrower
further acknowledges and represents that no event has occurred and no condition
presently exists that would constitute a default or event of default by Lender
under the Loan Agreement or any of the other Loan Documents, with or without
notice or lapse of time.
8. Validity of Documents. Borrower hereby ratifies, reaffirms,
acknowledges and agrees that the Loan Agreement and the other Loan Documents
represent valid, enforceable and collectable obligations of Borrower, and that
Borrower presently has no existing claims, defenses (personal or otherwise) or
rights of setoff whatsoever with respect to the Obligations of Borrower under
the Loan Agreement or any of the other Loan Documents. Borrower furthermore
agrees that it has no defense, counterclaim, offset, cross-complaint, claim or
demand of any nature whatsoever which can be asserted as a basis to seek
affirmative relief or damages from Lender.
9. Reaffirmation of Warranties. Borrower hereby reaffirms to Lender
each of the representations, warranties, covenants and agreements of Borrower as
set forth in each of the Loan Documents with the same force and effect as if
each were separately stated herein and made as of the date hereof. Borrower
represents and warrants to Lender that with respect to the financing transaction
herein contemplated, no Person is entitled to any brokerage fee or other
commission and Borrower agrees to indemnify and hold Lender harmless against any
and all such claims.
10. Other Writings. Lender and Borrower will execute such other
writings as may be necessary to confirm or carry out the intentions of Lender
and Borrower evidenced by this Amendment.
11. Entire Agreement. The Loan Documents as modified by this Amendment
embody the entire agreement and understanding between Borrower and Lender, and
supersede all prior agreements and understandings between said parties relating
to the subject matter thereof.
12. Counterparts; Telefacsimile Execution. This Amendment (including
the consents attached hereto) may be executed in any number of separate
counterparts, all of which when taken together shall constitute one and the same
instrument, admissible into evidence, notwithstanding the fact that all parties
have not signed the same counterpart. Delivery of an executed counterpart of
this Amendment by telefacsimile shall be equally as effective as delivery of a
manually executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by telefacsimile shall also deliver a
manually executed counterpart of this Amendment, but the failure to deliver a
manually executed counterpart shall not affect the validity, enforceability, and
binding effect of this Amendment.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first written above.
FINOVA CAPITAL CORPORATION, a Delaware
corporation, successor-by-merger to
Greyhound Financial Capital Corporation, an
Oregon corporation
By:
Name:
Title:
GENERAL TEXTILES, a California corporation
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxxx
Title:Executive Vice President
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CONSENT OF GUARANTOR
The undersigned ("Guarantor") hereby executes this Consent for
the purpose of (i) evidencing Guarantor's consent to the execution and
performance of the foregoing Amendment No. 11 to Loan and Security Agreement
(the "Eleventh Amendment") by Lender and Borrower, (ii) reaffirming the terms of
the Guaranty Agreement executed by Guarantor, (iii) evidencing Guarantor's
agreement that the Borrower's Obligations as set forth in the Guaranty Agreement
shall, for all purposes, include the Loan Documents, as amended by the Eleventh
Amendment, and shall further include all additional amounts which may be funded
or advanced to Borrower pursuant to the Loan Agreement described above as
amended by the Eleventh Amendment, and (iv) ratifying and affirming all terms
and provisions of the Guaranty Agreement. Except to the extent otherwise
indicated, terms used herein with initial capital letters shall have the
meanings set forth in the Loan Agreement, as amended by the Eleventh Amendment.
Guarantor agrees that it has no defense, counterclaim, offset,
cross-complaint, claim or demand of any nature whatsoever which can be asserted
as a basis to seek affirmative relief or damages from Lender.
IN WITNESS WHEREOF, the undersigned has hereunto executed this
Consent as of this 30th day of April, 1998.
FAMILY BARGAIN CORPORATION,
a Delaware corporation
By: /s/ Jaonathan X. Xxxxx
Name: Xxxxxxxx X. Xxxxx
Title: Executive Vice President
