The CIT Group/
Commercial Services, Inc.
1211 Avenue of the Americas
New York, NY 10036
February 23, 1998
Leslie Fay Marketing, Inc.
1412 Broadway
New York, New York 10018
Gentlemen:
Reference is made to the Revolving Credit Agreement between us, dated as of June
2, 1997, as supplemented and amended (herein the "Agreement"). Capitalized terms
used herein and defined in the Agreement shall have the same meanings as set
forth therein unless otherwise specifically defined herein.
Pursuant to mutual understanding, effective as of December 31, 1997, the
Agreement is hereby amended as follows:
1. Section 10.15 of Article X of the Agreement entitled "Negative
Covenants" is hereby deleted in its entirety and shall hereafter read as
follows:
"10.15. Minimum Consolidated Tangible Net
Worth. The Borrower will not permit the Parent's
Consolidated Tangible Net Worth to be less than the
following amounts during and at the end of each of the
following fiscal months: (a) $34 million for each of the
fiscal months of April, May, June, July and August of
1997, (b) $35 million for each of the fiscal months of
September, October and November of 1997, (c) $35 million
for each of the fiscal months of December of 1997 and
January, February, March, April, May, June, July, and
August of 1998, and (d) $37 million for each fiscal month
thereafter."
2. Section 10.17 of Article X of the Agreement entitled "Negative
Covenants" is hereby deleted in its entirety and shall hereafter read as
follows:
"10.17. Minimum Ratio of Consolidated Current
Assets to Consolidated Current Liabilities. The Borrower
will not permit the ratio of the Parent's Consolidated
Current Assets to the Parent's Consolidated Current
-2-
Liabilities to be less than (a) 2.60 to 1.00 as of the end
of the second fiscal quarter of 1997, (b) 2.60 to 1.00 as
of the end of the third fiscal quarter of 1997 (c) 2.60 to
1.00 as of the end of the fourth fiscal quarter of 1997
(d) 3.00 to 1.00 as of the end of the first fiscal quarter
of 1998 (e) 3.10 to 1.00 as of the end of the second,
third and fourth fiscal quarters of 1998 and (f) 3.30 to
1.00 as of the end of each fiscal quarter thereafter."
3. Section 10.20 of Article X of the Agreement entitled "Negative
Covenants" is hereby deleted in its entirety and shall hereafter read as
follows:
"10.20. Capital Expenditures. The Borrower
shall not make Capital Expenditures in an amount greater
than (i) $1.5 million in the aggregate for the period from
the Closing Date through January 3, 1998, (ii) $2.5
million in the aggregate for the 1998 fiscal year, and
(iii) $2.5 million in the aggregate for the 1999 fiscal
year, and for each fiscal year thereafter."
Except to the extent specifically set forth herein, no other change or waiver of
any of the terms or provisions of the Agreement is intended or implied, and all
of the terms and conditions of the Agreement shall continue in full force and
effect. This letter shall not constitute a waiver by us of any other default
under the Agreement, whether or not we have knowledge of same and shall not
constitute a waiver of any other defaults whatsoever.
If the foregoing is in accordance with your understanding of our agreement,
kindly so indicate by signing and returning the enclosed copy of this letter.
Very truly yours,
THE CIT GROUP/COMMERCIAL SERVICES, INC.
By /s/John Hendrickson
Name: John Hendrickson
Title: Vice President
Read and Agreed to:
LESLIE FAY MARKETING, INC.
By /s/Warren Wishart
Name: Warren Wishart
Title: Chief Financial Officer