As of July 11, 1995
Salant Corporation
1114 Avenue of the Americas
New York, New York 10036
Attention: Mr. Richard P. Randall
Chief Financial Officer
Re: Seasonal Overadvance Subfacility Loans
Gentlemen:
Reference is made to the Revolving Credit, Factoring and
Security Agreement, dated as of September 20, 1993, as amended by
letter agreement Re: Amendment to Credit Agreement with Respect to
the Mississippi Property, dated June 14, 1994, and by letter
agreement Re: Amendment to Credit Agreement with Respect to
Additional Guarantors, dated August 24, 1994, and by the Third
Amendment to Credit Agreement, dated as of February 28, 1995, and
by the Fourth Amendment to Credit Agreement, dated as of March 1,
1995 and by the Fifth Amendment to Credit Agreement, dated as of
June 28, 1995 (as so amended, the "Credit Agreement"), between The
CIT Group/Commercial Services, Inc. ("Lender") and Salant
Corporation ("Borrower"). Capitalized terms used herein shall have
the meanings ascribed thereto in the Credit Agreement, unless
otherwise defined herein.
Borrower has requested that (i) Lender permit the
Inventory Overadvance to remain outstanding and make additional
Revolving Loans with respect to Inventory in excess of the
Inventory Sublimit through and including July 31, 1995 and (ii)
Lender make Revolving Loans to Borrower pursuant to the Seasonal
Overadvance Subfacility through and including August 31, 1995, all
of which Lender is willing to do, on and subject to the terms and
conditions contained below in this Letter re: Seasonal Overadvance
Subfacility Loans (the "Seasonal Overadvance Agreement") and in
Section 3.1(e) of the Credit Agreement:
1. From and after the date hereof through and including
July 31, 1995, Lender agrees to permit the Inventory Overadvance to
remain outstanding, provided, however, that (a) Borrower agrees to
exercise good faith efforts in eliminating as soon as possible the
Inventory Overadvance in existence as of the date hereof, and (b)
any unpaid balance of the Inventory Overadvance shall be due and
payable in full to Lender, without notice or demand, on July 31,
1995.
2. From and after the date hereof, through and
including August 31, 1995, Lender may make Revolving Loans and
Letter of Credit Accommodations to Borrower, from time to time,
pursuant to the Seasonal Overadvance Subfacility, on and subject to
the terms and conditions contained in Section 3.1(e) of the Credit
Agreement.
3. In consideration of the Lender's agreements set
forth herein, Borrower agrees to pay to Lender:
(a) contemporaneously with the execution hereof, a
non-refundable fee in the amount of $126,000 (the "Overadvance
Fee"), which Overadvance Fee is fully earned as of the date hereof;
and
(b) a factoring commission surcharge of one (1%)
percent in excess of the factoring commission otherwise due and
payable to Lender on the Factored Accounts pursuant to Section
3.6(h) of the Credit Agreement, which one (1%) percent factoring
commission surcharge shall be paid commencing as of the date hereof
and continue until such time as such surcharge is equal to an
aggregate amount of $224,000.
The Overadvance Fee and the factoring surcharges may, at
Lender's option, be charged directly to any account(s) of Borrower
maintained with Lender.
4. This Seasonal Overadvance Agreement shall not be
effective until Lender has received (a) a counterpart of this
Seasonal Overadvance Agreement executed by Borrower and (b) a duly
executed Consent of Guarantors substantially in the form of Exhibit
A hereto.
5. This Seasonal Overadvance Agreement sets forth the
entire agreement of Lender and Borrower with respect to the subject
matter hereof and supersedes all prior discussions, negotiations
and agreements, whether written or oral, all of which are hereby
merged herein. Except as amended hereby, no other amendments,
modifications or supplements to any of the terms and provisions of
the Credit Agreement are intended or implied, and in all other
respects the Credit Agreement remains in full force and effect in
accordance with its existing terms and provisions.
6. This Seasonal Overadvance Agreement may be executed
in one or more counterparts, each of which when executed shall be
deemed an original and all of which when taken together shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Seasonal Overadvance Agreement to be duly executed and delivered in
New York, New York by their proper and duly authorized officers as
of the date and year first above written.
THE CIT GROUP/COMMERCIAL SERVICES, INC.
By:
Name:
Title:
SALANT CORPORATION
By:
Name:
Title:
EXHIBIT A
CONSENT OF GUARANTORS
Each of the undersigned, CLANTEXPORT, INC., DENTON MILLS,
INC, FROST BROS. ENTERPRISES, INC., SLT SOURCING, INC. and VERA
LICENSING, INC., each a Guarantor under its respective Guarantee,
each dated as of September 20, 1993, and SALANT CANADA INC. and
J.J. FARMER CLOTHING INC., each a Guarantor under its respective
Guaranty (Unlimited Liability), each dated as of September 28, 1994
(individually, in the case of each of the foregoing Guarantors, its
"Guarantee"), made in favor of The CIT Group/Commercial Services,
Inc. ("Lender") pursuant to the Credit Agreement as defined in the
Letter re: Seasonal Overadvance Subfacility Loans, dated as of July
11, 1995 between Lender and Borrower (the "Seasonal Overadvance
Agreement") to which this Consent is attached, hereby consents to
the Seasonal Overadvance Agreement, and hereby confirms and agrees
that its Guarantee is, and shall continue to be, in full force and
effect and is hereby ratified and confirmed in all respects, except
that, on or after the effective date of the Seasonal Overadvance
Agreement, each reference in its Guarantee to "the Credit
Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to
the Credit Agreement as amended by the Seasonal Overadvance
Agreement.
IN WITNESS WHEREOF, each of the undersigned has caused
this Consent of Guarantors to be duly executed and delivered by its
authorized officer as of the day of July, 1995.
CLANTEXPORT, INC. FROST BROS. ENTERPRISES, INC.
By: By:
Title: Title:
DENTON MILLS, INC. SLT SOURCING, INC.
By: By:
Title: Title:
VERA LICENSING, INC. SALANT CANADA INC.
By: By:
Title: Title:
J.J. FARMER CLOTHING INC.
By:
Title: