AMENDMENT NO. 1
TO LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT ("Amendment No. 1"), dated
as of April 28, 2003, by and among Xxxxxx International Corp., a Delaware
corporation ("Borrower"), HAPL Leasing Co., Inc. ("HAPL"), Xxxxxx Business
Concepts, LLC ("HBC"), Sedeco, Inc. ("Sedeco") and Hometown Threads, LLC
("Hometown", and together with HAPL, HBC and Sedeco, individually, each a
"Guarantor" and collectively, "Guarantors") and Congress Financial Corporation,
a Delaware corporation ("Lender").
W I T N E S S E T H :
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WHEREAS, Lender and Borrower have entered into financing arrangements
pursuant to which Lender has made and may make loans and advances and provide
other financial accommodations to Borrower as set forth in the Loan and Security
Agreement, dated as of November 26, 2002, among Lender, Borrower and Guarantors
(as amended hereby and as the same may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, the "Loan Agreement"),
and the agreements, documents and instruments at any time executed and/or
delivered in connection therewith or related thereto (collectively, together
with the Loan Agreement, the "Financing Agreements").
WHEREAS, Borrower and Guarantors have requested that Lender amend certain
provisions of the Loan Agreement.
WHEREAS, Lender is willing to agree such amendments, subject to the terms
and conditions set forth herein.
WHEREAS, by this Amendment No. 1, Lender, Borrower and Guarantors desire
and intend to evidence such amendments.
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
and covenants contained herein, the parties hereto agree as follows:
1. Definitions.
(a) Additional Definition. As used herein, the term "Amendment No. 1" shall
mean this Amendment No. 1 to Loan and Security Agreement by and among Lender,
Borrower and Guarantors, as the same now exists or may hereafter be amended,
modified, supplemented, extended, renewed, restated or replaced and the Loan
Agreement and the other Financing Agreements are hereby amended to include, in
addition to and not in limitation of, such definition.
(b) Interpretation. For purposes of this Amendment No. 1, unless otherwise
defined herein, all terms used herein, including, but not limited to, those
terms used and/or defined in the recitals above, shall have the respective
meanings assigned to such terms in the Loan Agreement.
2. Minimum EBITDA. Sections 9.17 (a), (b), (c), and (d) of the Loan
Agreement are hereby deleted in their entirety and replaced with the following:
"(a) January 31, 2003 ($1,840,000)
(b) April 30, 2003 ($1,420,000)
(c) July 31, 2003 ($1,450,000)
(d) October 31, 2003 ($875,000)"
3. Collateral Reporting. Section 7.1(a)(i) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"(i) as soon as possible after the end of each week, except for
the period from January 31, 2003 to and including the week ending May
2, 2003 (but in any event by the close of business in New York City on
the fourth (4th) Business Day after the end of each such period), or
more frequently as Lender may request at any time that Excess
Availability is less than $5,000,000 or a Default or Event of Default
shall exist or have occurred and be continuing, a schedule of sales
made, collections received and credit memos issued for such period;"
4. Amendment Fee. In addition to all other fees, charges, interest and
expenses payable by Borrower to Lender under the Loan Agreement and the other
Financing Agreements, Borrower shall pay to Lender, contemporaneously with the
effectiveness of this Amendment, an amendment fee in the amount of $5,000, which
fee shall be fully earned and nonrefundable as of the date hereof and may be
charged to any loan account of Borrower.
5. Additional Representations, Warranties and Covenants. Borrower and each
Guarantor represents, warrants and covenants with and to Lender as follows,
which representations, warranties and covenants are continuing and shall survive
the execution and delivery hereof, and the truth and accuracy of, or compliance
with each, together with the representations, warranties and covenants in the
other Financing Agreements, being a continuing condition of the making of Loans
or Letter of Credit Accommodations by Lender to Borrower:
(a) After giving effect to the provisions of this Amendment No. 1, no Event
of Default exists or has occurred as of the date of this Amendment No. 1.
(b) This Amendment No. 1 has been duly executed and delivered by Borrower
and each Guarantor and is in full force and effect as of the date hereof and the
agreements and obligations of Borrower and each Guarantor contained herein
constitute legal, valid and binding obligations of Borrower and each Guarantor
enforceable against each of them in accordance with their respective terms.
6. Conditions Precedent. The effectiveness of the amendments contained
herein shall be subject to the receipt by Lender of this Amendment No. 1 duly
authorized, executed and delivered by the parties hereto.
7. Effect of this Amendment. Except as expressly set forth herein, no other
amendments, consents, changes or modifications to the Financing Agreements are
intended or implied, and in all other respects the Financing Agreements are
hereby specifically ratified, restated and confirmed by all parties hereto as of
the effective date hereof and Borrower and Guarantors shall not be entitled to
any other or further amendment or consent by virtue of the provisions of this
Amendment No. 1 or with respect to the subject matter of this Amendment No. 1.
To the extent of conflict between the terms of this Amendment No. 1 and the
other Financing Agreements, the terms of this Amendment No. 1 shall control. The
Loan Agreement and this Amendment No. 1 shall be read and construed as one
agreement.
8. Governing Law. The validity, interpretation and enforcement of this
Amendment No. 1 and the other Financing Agreements and any dispute arising out
of the relationship between the parties hereto whether in contract, tort, equity
or otherwise, shall be governed by the internal laws of the State of New York
but excluding any principles of conflicts of law or other rule of law that would
cause the application of the law of any jurisdiction other than the laws of the
State of New York.
9. Binding Effect. This Amendment No. 1 shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors and
assigns.
10. Headings. The headings listed herein are for convenience only and do
not constitute matters to be construed in interpreting this Amendment No. 1.
11. Counterparts. This Amendment No. 1 may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one and
the same agreement. In making proof of this Amendment No. 1, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties hereto. Delivery of an executed counterpart of this
Amendment No. 1 by telefacsimile shall have the same force and effect as
delivery of an original executed counterpart of this Amendment No. 1. Any party
delivering an executed counterpart of this Amendment No. 1 by telefacsimile also
shall deliver an original executed counterpart of this Amendment No. 1, but the
failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment No. 1 as to such
party or any other party.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
be duly executed and delivered by their authorized officers as of the day and
year first above written.
CONGRESS FINANCIAL CORPORATION
By:
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Title:
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XXXXXX INTERNATIONAL CORP.
By:
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Title:
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HAPL LEASING CO., INC.
By:
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Title:
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SEDECO, INC.
By:
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Title:
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XXXXXX BUSINESS CONCEPTS, LLC
By:
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Title:
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HOMETOWN THREADS, LLC
By:
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Title:
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