EXHIBIT 10.35
FIRST AMENDMENT
TO
FINANCING AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO FINANCING AND SECURITY AGREEMENT (this "Agreement")
is made as of the 23rd day of April , 1997, by and among WG APPAREL, INC., a
Delaware corporation ("Apparel"), XXXXXXX & XXXXX, INC., a Delaware corporation
("Holdings"), LEADTEC SYSTEMS INC., a Delaware corporation ("Leadtec"), CLINTON
MANAGEMENT CORP., a Florida corporation ("Clinton Management"), CLINTON
MACHINERY CORPORATION, a Delaware corporation ("Clinton Machinery"), MACPHERSON
MEISTERGRAM, INC., a North Carolina corporation ("Macpherson"), jointly and
severally (each of Apparel, Holdings, Leadtec, Clinton Management, Clinton
Machinery, and Macpherson, a "Borrower;" Apparel, Holdings, Leadtec, Clinton
Management, and Clinton Machinery, collectively, the "Borrowers"), and
NATIONSBANK, N.A., a national banking association (the "Lender").
RECITALS
A. The Borrowers and the Lender entered into a Financing and Security
Agreement dated December 17, 1996 (the same, as amended, modified, substituted,
extended, and renewed from time to time, the "Financing Agreement"). The
Financing Agreement provides for some of the agreements between the Borrowers
and the Lender with respect to the "Loans" (as defined in the Financing
Agreement), including a revolving credit facility with letter of credit and
foreign exchange subfacilities in an amount not to exceed $18,500,000.
B. The Borrowers have requested that the Lender agree to modify the
Borrowing Base provisions and the treatment of Receivables received in the
Lender's Lockbox.
C. The Lender is willing to agree to the Borrowers' requests on the
condition, among others, that this Agreement be executed.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Borrowers
and the Lender agree as follows:
1. The Borrowers and the Lender agree that the Recitals above are a part
of this Agreement. Unless otherwise expressly defined in this Agreement, terms
defined in the Financing Agreement shall have the same meaning under this
Agreement.
2. The Borrowers and the Lender agree that on the date hereof the
aggregate outstanding principal balance under the Revolving Credit Note (subject
to change for returned items and
other adjustments made in the ordinary course of business) is
$_____________________.
3. The Financing Agreement is hereby amended as follows:
(a) Subpart (viii) of the definition of "Eligible Receivable" and
"Eligible Receivables" in Section 1.1 of the Financing Agreement is hereby
amended and restated in its entirety as follows:
(viii) the Receivable is not outstanding more than one
hundred twenty (120) days from the date of the invoice therefore
(b) Sub-Section (a) of Section 2.1.3 (BORROWING BASE) is hereby amended
and restated in its entirety as follows:
(a) As used in this Agreement, the term "Borrowing Base"
means at any time, an amount equal to the aggregate of (a) eighty
five percent (85%) of the amount of Eligible Receivables of all
Borrowers.
(c) Subsection (d) of Section 2.1.8 (THE COLLATERAL ACCOUNT) is hereby
amended as restated in its entirety as follows:
(d) After a Default or Event Default, the Lender will apply
the whole or any part of the collected funds credited to the
Collateral Account against any of the Obligation, the order and
method of such application to be in the sole discretion of the
Lender. It is understood and agreed, however, that, absent a
Default or Event of Default, the Lender shall cause collected
funds in the Collateral Account to be transferred to the deposit
account with the Lender on a daily basis.
(d) Section 2.1.9 (REVOLVING LOAN ACCOUNT) of the Financing Agreement is
amended and Restated in its entirety as follows:
2.1.9 REVOLVING LOAN ACCOUNT. The Lender will establish and
maintain a loan account on its books (the "Revolving Loan
Account") to which the Lender will (a) DEBIT (i) the principal
amount of each Revolving Loan made by the Lender hereunder as of
the date made, (ii) the amount of any interest accrued on the
Revolving Loan as and when due, and (iii) any other amounts due
and payable by the Borrowers to the Lender from time to time
under the provisions of this Agreement in connection
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with the Revolving Loan, including, without limitation,
Enforcement Costs, Fees, late charges, and service, collection
and audit fees, as and when due and payable, and (b) credit all
payments made by the Borrowers to the Lender on account of the
Revolving Loan as of the date made including, without limitation,
funds (if any) credited to the Revolving Loan Account from the
Collateral Account. The Lender may debit the Revolving Loan
Account for the amount of any Item of Payment which is returned
to the Lender unpaid. All credit entries to the Revolving Loan
Account are conditional and shall be readjusted as of the date
made if final and indefeasible payment is not received by the
Lender in cash or solvent credits.
(e) Section 2.1.12 (REQUIRED AVAILABILITY UNDER THE REVOLVING CREDIT
FACILITY) is hereby deleted in its entirety.
(f) Section 2.2.1 (LETTERS OF CREDIT) of the Financing Agreement is hereby
amended and restated in its entirety as follows:
2.2.1 LETTERS OF CREDIT. Subject to and upon the
provisions of this Agreement, and as a part of the Revolving
Credit Commitment, the Borrowers may obtain documentary letters
of credit and related bankers acceptances or standby letters of
credit (as the same may from time to time be amended,
supplemented or otherwise modified, each a "Letter of Credit" and
collectively the "Letters of Credit") from the Lender from time
to time from the Closing Date until the Business Day preceding
the Revolving Credit Termination Date. The Borrowers will not be
entitled to obtain a Letter of Credit hereunder unless (a) after
giving effect to the request, the Borrowers would be in
compliance with Section 2.1.1 (a) and (b), and (b) the sum of the
aggregate face amount of the then outstanding Letters of Credit
plus the aggregate of all Foreign Exchange Reserves then
outstanding does not exceed Ten Million Dollars ($10,000,000).
(g) Section 2.3.1 (FOREIGN EXCHANGE AGREEMENTS) is hereby amended and
restated in its entirety as follows:
2.3.1 FOREIGN EXCHANGE AGREEMENTS.
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Subject to and upon the provisions of this Agreement, and as a
part of the Revolving Credit Commitment, to cover the risks of
currency fluctuations with respect to those Letters of Credit and
Existing Letters of Credit which are drawable in a currency other
than U.S. dollars, or to cover other risks of currency
fluctuations in the ordinary course of the Borrowers' business,
the Borrowers may, upon the prior approval of the Lender, enter
into Foreign Exchange Agreements from time to time from the
Closing Date until the Business Day preceding the Revolving
Credit Termination Date. The Borrowers will not be entitled to
obtain a Foreign Exchange Agreement hereunder unless (a) after
giving effect to the request, the Borrowers would be in
compliance with Section 2.1.1 9a) and (b), and (b) the sum of the
aggregate of all Foreign Exchange Reserves then outstanding does
not exceed Ten Million Dollars ($10,000,000). In addition, in no
event shall the outstanding Foreign Exchange Reserves exceed
$750,000. The Lender shall calculate the amount of Foreign
Exchange Reserves in its sole discretion based upon the Lender's
determination of the credit risk associated with each Foreign
Exchange Agreement.
(h) Subsection (c) of Section 2.4 (APPLICABLE INTEREST RATE) is hereby
amended and restated in its entirety as follows:
(c) The Applicable Margin for (1) LIBOR Loans shall be two and
one-half percent (2.50%) per annum, and (ii) Base Rate Loans shall be one
quarter of one percent (.25%) per annum.
(i) Section 2.5.4 (FIELD EXAMINATION FEES) is hereby amended and restated
in its entirety as follows:
2.5.4 FIELD EXAMINATION FEES. The Borrowers shall pay
to the Lender a field examination fee (collectively the "Field
Examination Fees" and individually a "Field Examination Fee"),
which Field Examination Fees shall be payable quarterly on the
first day of each April, July, October and January of each year
commencing on the first such date following the Closing Date, and
continuing until the last such date prior to which all
Obligations arising out of, or under, the
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Credit Facilities then outstanding have been paid in full. Each
Field Examination Fee shall be in the amount of $3,750.
4. The Borrowers hereby issue, ratify and confirm the representations,
warranties and covenants contained in the Financing Agreement, as amended
hereby. The Borrowers agree that this Agreement is not intended to and shall
not cause a novation with respect to any or all of the Obligations.
5. The Borrowers acknowledge and warrant that the Lender has acted in
good faith and has conducted in a commercially reasonable manner its
relationships with the Borrowers in connection with this Agreement and generally
in connection with the Financing Agreement and the Obligations, the Borrowers
hereby waiving and releasing any claims to the contrary.
6. The Borrowers shall pay at the time this Agreement is executed and
delivered all fees, commissions, costs, charges, taxes and other expenses
incurred by the Lender and its counsel in connection with this Agreement,
including, but not limited to, reasonable fees and expenses of the Lender's
counsel and all recording fees, taxes and charges.
7. This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and all taken together shall constitute but one and the same
instrument. The Borrowers agree that the Lender may rely on a telecopy of any
signature of any Borrower. The Lender agrees that the Borrowers may rely on a
telecopy of this Agreement executed by the Lender.
IN WITNESS WHEREOF, the Borrowers and the Lender have executed this
Agreement under seal as of the date and year first written above.
WITNESS OR ATTEST: WG APPAREL, INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx (Seal)
---------------------------- -----------------------------
Xxxx X. Xxxxxxx, Xx. Xxxx X. Xxxxxxx
Assistant Secretary Chairman and Chief Executive Officer
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WITNESS OR ATTEST: XXXXXXX & XXXXX, INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx (Seal)
---------------------------- -----------------------------
Xxxx X. Xxxxxxx, Xx. Xxxx X. Xxxxxxx
Assistant Secretary Chairman and Chief Executive Officer
WITNESS OR ATTEST: LEADTEC SYSTEMS INC.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx (Seal)
---------------------------- -----------------------------
Xxxx X. Xxxxxxx, Xx. Xxxx X. Xxxxxxx
Assistant Secretary Vice President
WITNESS OR ATTEST: CLINTON MANAGEMENT CORP.
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx (Seal)
---------------------------- -----------------------------
Xxxx X. Xxxxxxx, Xx. Xxxx X. Xxxxxxx
Assistant Secretary Vice President
WITNESS OR ATTEST: CLINTON MACHINERY CORPORATION
/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxxx (Seal)
---------------------------- -----------------------------
Xxxx X. Xxxxxxx, Xx. Xxxx X. Xxxxxxx
Assistant Secretary Vice President
WITNESS OR ATTEST: MACPHERSON MEISTERGRAM, INC.
/s/ Xxxx-Xxxx Kieran By: /s/ Xxxx X. Xxxxxxx (Seal)
---------------------------- -----------------------------
Name: Xxxx-Xxxx Kieran Xxxx X. Xxxxxxx
Title: Secretary Vice President
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WITNESS: NATIONSBANK, N.A.
[ILLEGIBLE] By: /s/ Xxxxx X. Xxxxxx (Seal)
---------------------------- -----------------------------
Xxxxx X. Xxxxxx
Vice President
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