EXHIBIT 10.37
[TRADE BANK LETTERHEAD]
LIMITED CONSENT AND WAIVER
RECITALS:
Reference is made to that certain Credit Agreement dated as of June 27,
2001 (the "Agreement") among Tandy Brands Accessories, Inc. ("Borrower"), Wells
Fargo HSBC Trade Bank, N.A. ("Agent"), and the lenders specified therein
("Lenders"). Terms used and not defined herein shall have the meanings given
them in the Agreement.
Borrower has advised Agent that as of September 30, 2001 it has failed to
satisfy the Leverage Ratio requirement set forth at Section 10.14 of the
Agreement. Failure to perform this covenant resulted in an Event of Default
under the Agreement. Borrower has requested that Agent, acting on behalf of the
Lenders waive the foregoing described Event of Default.
LIMITED CONSENT AND WAIVER:
Subject to the conditions and limitations set forth hereinbelow, Agent
hereby:
1. Waives the foregoing Event of Default under the Agreement caused by the
failure to perform the covenant set forth at Section 10.14 of the Agreement
as of September 30, 2001.
Provided, so long as any Advances remain outstanding:
A. Agent is hereby authorized to demand specific performance of this Limited
Consent and Waiver (the "Limited Consent and Waiver") at any time when
Borrower shall have failed to comply with any of the provisions of this
Limited Consent and Waiver. Borrower hereby irrevocably waives any defense
based upon the adequacy of a remedy at law which might be asserted as a bar
to such remedy of specific performance and waives any requirement of the
posting of any bond which might otherwise be required before such remedy
of specific performance is granted.
B. No action or inaction of Agent or the Lenders or any other Person, and no
change of law or circumstances, shall release or diminish the obligations,
liabilities, agreements or duties hereunder of Borrower, affect the
Agreement in any way, or afford any Person any recourse against Agent or
the Lenders.
1
LIMITATIONS AND CONDITIONS:
Borrower hereby represents and warrants to the Agent and the Lenders that
(i) immediately after giving effect to this Limited Consent and Waiver, there
shall exist no Default or Event of Default, and (ii) immediately after giving
effect to this Limited Consent and Waiver, all representations and warranties
contained herein, in the Agreement or otherwise made in writing by Borrower in
connection herewith or therewith shall be true and correct in all material
respects with the same force and effect as if those representations and
warranties had been made on and as of the date hereof, except to the extent such
representations and warranties by their terms speak as of an earlier date.
Except as expressly waived or agreed herein, all covenants, obligations and
agreements of Borrower contained in the Agreement shall remain in full force and
effect in accordance with their terms. Without limitation of the foregoing, the
consents and agreements set forth herein are limited precisely to the extent set
forth herein and shall not be deemed to (a) be a consent or agreement to, or
waiver or modification of, any other term or condition of the Agreement or any
of the documents referred to therein, or (b) except as expressly set forth
herein, prejudice any right or rights which the Agent or the Lenders may now
have or may have in the future under or in connection with the Agreement or any
of the documents referred to therein. Except as expressly modified hereby, the
terms and provisions of the Agreement and any other documents or instruments
executed in connection with any of the foregoing, are and shall remain in full
force and effect, and the same are hereby ratified and confirmed by Borrower in
all respects.
Borrower agrees to reimburse and save Agent harmless from and against
liabilities for the payment of all out-of-pocket costs and expenses arising in
connection with the preparation, execution, delivery, amendment, modification,
waiver and enforcement of, or the preservation of any rights under, this Limited
Consent and Waiver, including, without limitation, the reasonable fees and
expenses of legal counsel to Agent which may be payable in respect of, or in
respect of any modification of, this Limited Consent and Waiver.
This Limited Consent and Waiver, and the rights and obligations of the
parties hereunder, shall be construed in accordance with and be governed by the
laws of the State of Texas.
This Limited Consent and Waiver, and the documents referred to herein,
represent the entire understanding of the parties hereto regarding the subject
matter
2
hereof and supersede all prior and contemporaneous oral and written agreements
of the parties hereto with respect to the subject matter hereof. This Limited
Consent and Waiver is a "Loan Document" as defined and described in the
Agreement, and all of the terms and provisions of the Agreement relating to Loan
Documents shall apply hereto.
This Limited Consent and Waiver may be separately executed in counterparts
and by the different parties hereto in separate counterparts, each of which when
so executed shall be deemed to constitute one and the same agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this Limited
Consent and Waiver as of the 5th day of November, 2001.
TANDY BRANDS ACCESSORIES, INC.
By: /s/ STAN NINEMIRE
-------------------------------------
Name: Stan Ninemire
Title: Senior Vice President & CFO
WELLS FARGO HSBC TRADE BANK, N.A.
as Agent under the Agreement.
By: /s/ STEVE CHRISTOPHER
-------------------------------------
Name: Steve Christopher
Title: Relationship Manager
3
CONFIRMATION OF GUARANTY
Reference is made to the Credit Agreement dated as of June 27, 2001 (the
"Agreement") among Tandy Brands Accessories, Inc. ("Borrower"), Wells Fargo HSBC
Trade Bank, N.A. ("Agent"), and the lenders specified therein ("Lenders"). The
undersigned Guarantors hereby confirm that their guaranty under the Subsidiary
Guaranty dated as of June 27, 2001 for the benefit of the Agent, the Lenders,
and Wells Fargo, N.A., continues in full force and effect notwithstanding the
Limited Consent and Waiver dated as of November 5, 2001, which Limited Consent
and Waiver is hereby accepted and consented to by each Guarantor. In accordance
herewith, the aforesaid guaranty shall be deemed to cover and secure the
Obligations at any time due from Borrower to Lenders pursuant to the Agreement
as the latter has been modified by the Limited Consent and Waiver. This
Confirmation of guaranty shall be governed by and construed in accordance with
the laws of the State of Texas.
Dated this ____ day of November, 2001.
ACCESSORY DESIGN GROUP, INC.
By: /s/ STAN NINEMIRE
--------------------------------------
Name: Stan Ninemire
Title: Vice President
AMITY/ROLFS, INC.
By: /s/ STAN NINEMIRE
--------------------------------------
Name: Stan Ninemire
Title: Vice President
TANDY BRANDS ACCESSORIES HANDBAGS, INC.
By: /s/ STAN NINEMIRE
--------------------------------------
Name: Stan Ninemire
Title: Vice President
H.A. SHELDON CANADA, LTD.
By: /s/ STAN NINEMIRE
---------------------------------
Name: Stan Ninemire
Title: Vice President
TBAC INVESTMENTS, INC.
By: /s/ STAN NINEMIRE
---------------------------------
Name: Stan Ninemire
Title: Vice President
TBAC GENERAL MANAGEMENT COMPANY
By: /s/ STAN NINEMIRE
---------------------------------
Name: Stan Ninemire
Title: Vice President
TBAC MANAGEMENT COMPANY L.P.
BY: TBAC GENERAL MANAGEMENT COMPANY,
ITS GENERAL PARTNER
By: /s/ STAN NINEMIRE
----------------------------
Name: Stan Ninemire
Title: Vice President
TBAC PRINCE GARDNER, INC.
By: /s/ STAN NINEMIRE
---------------------------------
Name: Stan Ninemire
Title: Vice President
STAGG INDUSTRIES, INC.
By: /s/ STAN NINEMIRE
---------------------------------
Name: Stan Ninemire
Title: Vice President
TBAC - TOREL, INC.
By: /s/ STAN NINEMIRE
---------------------------------
Name: Stan Ninemire
Title: Vice President
TBAC INVESTMENT TRUST, INC.
By: /s/ STAN NINEMIRE
-----------------------
Name: Stan Ninemire
Title: Vice President
ACCEPTED as of the date first written above.
BORROWER
TANDY BRANDS ACCESSORIES, INC.
By: /s/ STAN NINEMIRE
------------------------------
Name: Stan Ninemire
Title: Senior Vice President & CFO