BNY FINANCIAL CORPORATION
1290 Avenue of the Americas
New York, New York 10104
As of May 26, 1999
SIGNAL APPAREL COMPANY, INC.
500 7th Avenue, 7th Floor
New York, New York 10018
RE: Waiver
Gentlemen:
Reference is made to the Revolving Credit, Term Loan and Security
Agreement, dated March 12, 1999 (as amended from time to time, the "Credit
Agreement") by and among SIGNAL APPAREL COMPANY, INC. ("Borrower") and BNY
FINANCIAL CORPORATION, as Agent (in such capacity, "Agent") for the lenders
("Lenders") parties from time to time to the Credit Agreement. All capitalized
terms used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Credit Agreement.
1. The Borrower has advised Lender that, for the fiscal quarter ending
March 31, 1999, its (i)Working Capital was less than ($2.000,000), the minimum
Working Capital permitted as at March 31, 1999 under Section 6.7 (Working
Capital) of the Credit Agreement; and (ii) net loss, excluding any extraordinary
or non-recurring items, was greater than ($1,000,000), the maximum net loss
excluding any extraordinary or non-recurring items permitted as at March 31,
1999 under Section 6.13(a) (Additional Financial Convents) of the Credit
Agreement. As a result of such noncompliance, Events of Default have occurred
under Section 10.2 of Article X (Events of Default) of the Credit Agreement (the
"Subject Events of Default"). Borrowers have requested Lender to waive the
Subject Events of Default, and Lender hereby waives the Subject Events of
Default.
2. The Borrower hereby acknowledge, confirm and agree that all amounts
charged or credited to the Borrower's account as of April 30, 1999 are correct
and binding upon the Borrower and that all amounts reflected to be due and owing
in the Borrower's account as of April 30, 1999 are due and owing without
defense, setoff, offset, recoupment, claim or counterclaim. Furthermore,
Borrower hereby also irrevocably releases and forever discharges Agent and
Lenders and each of Agent's and Lenders' respective affiliated concerns, as well
as all of Agent's and Lenders' respective directors, officers, employees,
shareholders and agents from any and all liabilities, demands, obligations,
causes of action and other claims, of every kind, nature and description, known
and unknown, which Borrower now has or may hereafter have, by reason of any
matter, cause or thing occurred, done, omitted or suffered to be done prior to
the date hereof.
3. Except as specifically set forth herein, no other changes or
modifications to the Credit Agreements are intended or implied, and, in all
other respects, the Credit Agreement shall continue to remain in full force and
effect in accordance with its terms as of the date hereof. Excepts as
specifically set forth herein, nothing contained herein shall evidence a waiver
or amendment by Agent of any other provision of the Credit Agreement. Without
limiting the foregoing, nothing herein contained shall or shall be deemed to,
waive any Event of Default of which Agent does not have actual knowledge as of
the date hereof, or any event or circumstance which with notice or passage of
time, or both, would constitute an Event of Default. Agent may, in its sole
discretion, waive any of or such other Events of Default, but only in a specific
writing signed by Agent.
4. In consideration of the waiver given by Agent and Lender's herein,
Borrowers agrees to pay a non-refundable waiver fee to Agent, for the benefit of
Lenders in the amount of $20,000, which fee shall be fully earned as of the date
hereof.
5. The terms and provisions of this agreement shall be for the benefit of
the parties hereto and their respective successors and assigns; no other person,
firm, entity or corporation shall have any right, benefit or interest under this
agreement.
6. This agreement may be signed in counterparts, each of which shall be an
original and all of which taken together constitute one amendment. In making
proof of this agreement, it shall not be necessary to produce or account for
more than one counterpart signed by the party to be charged.
7. This agreement sets forth the entire agreement and understanding of the
parties with respect to the matters set forth herein. This agreement cannot be
changed, modified, amended or terminated except in writing executed by the part
to be charged.
Very truly yours,
BNY FINANCIAL CORPORATION
By: /s/ Wayne Miller
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Vice President
ACKNOWLEDGED AND AGREED:
SIGNAL APPAREL COMPANY, INC.
/s/ Howard Weinberg
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By: Howard Weinberg
Title: Chief Financial Officer