EXHIBIT 99.2
THIRD AMENDMENT AGREEMENT
THIRD AMENDMENT AGREEMENT, dated as of January 31, 1997, to the
Security Agreement, dated as of June 5, 1995 (as the same has been heretofore,
and may be further, amended, supplemented or modified from time to time in
accordance with its terms, the "Security Agreement"), between Donnkenny
Apparel, Inc., a Delaware corporation ("DKA"), Xxxxxxx Industries Corporation,
a Delaware corporation (collectively with DKA, the "Borrowers"), MegaKnits,
Inc., a New York corporation, Fashion Avenue Knits Inc., a New York
corporation ("Fashion"), The Sweater Company, Inc., a New York corporation
("Sweater Company") and The Chase Manhattan Bank (formerly known as Chemical
Bank) as agent (in such capacity, the "Agent") for the lenders (the "Lenders")
named in Schedules 2.01(a) and (b) of the Credit Agreement dated as of June 5,
1995 (as amended, modified or supplemented from time to time in accordance
with its terms, the "Credit Agreement") among the Borrowers, the guarantors
named therein and signatory thereto, the Lenders and the Agent. Capitalized
terms used herein but not otherwise defined herein shall have the meanings
attributed thereto in the Security Agreement or the Credit Agreement.
WHEREAS, DKA desires to dispose of Fashion and Sweater Company
pursuant to the Rescission Agreement dated as of January 24, 1997 between DKA
and Xxx Xxxxx; and
WHEREAS, the parties hereto desire to amend certain provisions of the
Security Agreement to reflect said Rescission Agreement and to provide for
additional collateral.
NOW THEREFORE, for valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and subject to the fulfillment of
the conditions set forth below, the parties hereto agree as follows:
SECTION 1. AMENDMENTS TO THE SECURITY AGREEMENT
1.1 Each of Fashion and Sweater Company shall be deleted from the
Security Agreement as a "Grantor" as such term is defined in the Security
Agreement and shall no longer be bound by the terms and provisions of the
Security Agreement.
1.2 Section 1(a) of the Security Agreement is hereby amended by
deleting from the sixth and seventh lines thereof the phrase "located in the
United States, Canada, Mexico and Puerto Rico."
1.3 Section 1(b) of the Security Agreement is hereby amended and
restated in its entirety as follows:
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"(b) "Collateral" shall mean all (i) Accounts Receivable,
(ii) Documents, (iii) Equipment, (iv) General Intangibles,
(v) Inventory and (vi) Proceeds."
1.4 Section 1(f) of the Security Agreement is hereby amended by
deleting the proviso at the end thereof and by deleting the phrase "in each
instance which is financed through the issuance of Letters of Credit"
immediately preceding such proviso and substituting therefor the phrase
"constituting inventory which is imported into the United States."
1.5 Section 1 of the Security Agreement is hereby amended by deleting
clause (h) thereof.
1.6 Schedule I to the Security Agreement is hereby amended by
deleting all locations for Fashion and Sweater Company.
SECTION 2. MISCELLANEOUS
2.1 Each of the Grantors reaffirms and restates the
representations and warranties set forth in the Security Agreement, and all
such representations and warranties, after giving effect to the amendments set
forth herein, shall be true and correct on the date hereof with the same force
and effect as if made on such date.
2.2 Except as herein expressly amended, the Security Agreement and
the other documents executed and delivered in connection therewith are each
ratified and confirmed in all respects and shall remain in full force and
effect in accordance with their respective terms.
2.3 From and after the date hereof, (a) all references in the
Security Agreement to "this Agreement", "hereof", "herein", or similar terms
and (b) all references to the Security Agreement in each agreement, instrument
and other documents executed or delivered in connection with the Security
Agreement, shall mean and refer to the Security Agreement, as amended by this
Amendment Agreement.
2.4 This Amendment Agreement may be executed by the parties hereto
individually or in combination, in one or more counterparts, each of which
shall be an original and all of which shall constitute one and the same
agreement. A facsimile signature page shall constitute an original for the
purposes hereof.
2.5 THIS AMENDMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
DONNKENNY APPAREL, INC.
By:
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Name:
Title:
XXXXXXX INDUSTRIES CORPORATION
By:
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Name:
Title:
MEGAKNITS, INC.
By:
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Name:
Title:
THE CHASE MANHATTAN BANK
(formerly known as Chemical Bank),
as Agent and Lender
By:
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Name:
Title:
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