AMENDMENT
NO. 1 TO AMENDED AND RESTATED FINANCING AGREEMENT
AMENDMENT
NO. 1 TO AMENDED AND RESTATED FINANCING AGREEMENT AND WAIVER (this
“ Amendment ”) is entered into as of
February 1, 2009, by and among CYNTHIA STEFFE ACQUISITION,
LLC, a New York limited liability company (“ CS
Acquisition ”), S.L. DANIELLE ACQUISITION, LLC a New York
limited liability company (“ Danielle Acquisition
”), BERNARD CHAUS, INC. a New York corporation (“
Chaus ” and together with CS Acquisition and Danielle
Acquisition, collectively, the “ Company ”) and
THE CIT GROUP/COMMERCIAL SERVICES, INC. (“ CIT
”) as agent (in such capacity, “ Agent ”)
for itself and the various other financial institutions (together
with CIT, collectively, the “ Lenders ”) named
in or which hereafter become a party to the Financing Agreement (as
hereafter defined).
The
Company, Agent and Lenders are parties to an Amended and Restated
Financing Agreement dated as of September 18, 2008 (as
amended, modified, restated or supplemented from time to time, the
“ Financing Agreement ”) pursuant to which Agent
and Lenders provide financial accommodations to Company.
The
Company has requested that Agent and Lenders: (a) amend the
Financing Agreement as hereinafter provided, and (b) waive
certain Events of Default existing on the date hereof as
hereinafter provided, and in each instance, Agent on behalf of
Lenders is willing to do so on the terms and conditions set forth
herein.
NOW,
THEREFORE, in consideration of any loan or advance or grant of
credit heretofore or hereafter made to or for the account of
Company by Agent and Lenders, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as
follows:
1. Definitions . All capitalized terms not otherwise
defined herein shall have the meanings given to them in the
Financing Agreement.
2. Amendments to Financing Agreement . Subject to
satisfaction of the conditions precedent set forth in
Section 4 below, the Financing Agreement is hereby amended as
of the date hereof as follows:
(a) Section.
1 of the Financing Agreement is hereby amended in order to modify
the definition of the term “Special Reserve” as
follows:
“
Special Reserve ” shall mean $2,000,000 at all
times.
(b) The
LIBOR option for Revolving Loans provided for in the Financing
Agreement is hereby eliminated, and all Revolving Loans hereafter
made pursuant to the Financing Agreement shall only be Base Rate
Loans. Furthermore, the Company shall not hereafter request or
receive, or continue, any LIBOR Loans, and additionally, no Base
Rate Loans shall hereafter be converted into LIBOR Loans.
Additionally, the definition of “Applicable Margin “
appearing in Section 1 of the Financing Agreement is hereby
amended to read as follows: “Applicable Margin for Base Rate
Loans shall mean one percent (1%).”
(c) Supplementing
the Fiscal Quarter end test periods and Tangible Net Worth
requirements set forth in sub-clause (a) of
Paragraph 7.10 of Section 7 of the Financing Agreement,
an additional test period and Tangible Net Worth requirement is
also to be included in such sub-clause, by adding the following
provision immediately at the end of such sub-clause: “Without
limiting the foregoing, the Company shall also maintain as of its
financial statement date of February 28, 2009, a Tangible Net
Worth of not less than $4,667,000 (the “Month End February,
2009 Tangible Net Worth Covenant”). In this regard, the
Company will furnish to the Agent and each Lender a consolidated
financial statements, by no later than April 10, 2009,
certified by an authorized financial or accounting officer of the
Borrowing Agent, accompanied by an officer’s compliance
certificate, signed by the President, Vice President, Controller,
Chief Financial Officer or Treasurer, pursuant to which any one
such officer must certify whether or not the calculations based
upon the above referenced financial statements demonstrate
compliance with the Month End February, 2009 Tangible Net Worth
Covenant.”
(d) Supplementing
the Fiscal Quarter end test periods and minimum EBITDA requirements
set forth in sub-clause (b) of Paragraph 7.10 of
Section 7 of the Financing Agreement, an additional test
period and minimum EBITDA requirement is also to be included in
such sub-clause, by adding the following provision immediately at
the end of such sub-clause: “Without limiting the foregoing,
the Company shall also maintain for the eight month period ending
February 28, 2009, a minimum EBITDA of not less than a
negative $674,000 (the “Month End February, 2009 Minimum
EBITDA Covenant”). In this regard, the Company will furnish
to the Agent and each Lender consolidated financial statements, by
no later than April 10, 2009, certified by an authorized
financial or accounting officer of the Borrowing Agent, accompanied
by an officer’s compliance certificate, signed by the
President, Vice President, Controller, Chief Financial Officer or
Treasurer, pursuant to which any one such officer must certify
whether or not the calculations based upon the above referenced
financial statements demonstrate compliance with the Month End
February, 2009 Minimum EBITDA Covenant.”
(e) Supplementing
the Fiscal Quarter end test periods and Leverage Ratio requirements
set forth in sub-clause (c) of
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