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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
AMENDMENT NO. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ___________________ to ___________________
Commission file number 33-80570
APPAREL VENTURES, INC.
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(Exact Name of Registrant as specified in its charter)
DELAWARE 95-4475766
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
204 WEST ROSECRANS, GARDENA, CALIFORNIA 90248
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(Address of principal executive offices) (Zip Code)
(310) 538-4980
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
AT NOVEMBER 16, 1998 , 1,000 SHARES OF $.01 PAR VALUE COMMON STOCK OF
THE REGISTRANT WERE OUTSTANDING.
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APPAREL VENTURES, INC.
EXPLANATORY NOTE
Following the filing of the Company's Form 10-Q for the quarter
ended September 30, 1998, the Company determined that an error was made in the
calculation of its minimum adjusted tangible net worth as of September 30, 1998
as defined in the Company's credit facility. The Company and the lender then
entered into an amendment to the Company's credit facility which modified the
minimum adjusted tangible net worth covenant beginning with the month ended
September 30, 1998. The purpose of this amendment is to file the amendment to
the credit facility as an exhibit to this report. No other changes have been
made to the report.
PART II . OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8 - K
(A) EXHIBITS
The Exhibits listed in the Index to Exhibits are filed as part of this Quarterly
Report on Form 10-Q/A
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
APPAREL VENTURES, INC.
December 11 , 1998 /s/ WILLIAM F. SINGLETARY
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Date WILLIAM F. SINGLETARY
Chief Financial Officer
(Duly authorized officer and
principal financial and
accounting officer)
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EXHIBIT INDEX
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<CAPTION>
Exhibit No. Description of Exhibit
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10.1 Amendment No. 9 to Loan and Security Agreement
between Apparel Ventures, Inc. and Fleet Capital
Corporation-formerly Shawmut Capital Corporation
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AMENDMENT NO. 9
TO
LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NO. 9 ("Amendment") is entered into as of
December 4 , 1998, by and between APPAREL VENTURES, INC., a Delaware corporation
having its chief executive office and principal place of business at 204 West
Rosecrans Avenue, Gardena, California 90248 ("Borrower") and FLEET CAPITAL
CORPORATION ("Lender").
BACKGROUND
Borrower and Lender are parties to a Loan and Security
Agreement dated as of May 23, 1994 (as amended, supplemented, restated or
otherwise modified from time to time, the "Loan Agreement") pursuant to which
Lender provided Borrower with certain financial accommodations.
Borrower has requested that Lender amend certain provisions of
the Loan Agreement and Lender is willing to do so on the terms and conditions
hereafter set forth.
NOW, THEREFORE, in consideration of any loan or advance or
grant of credit heretofore or hereafter made to or for the account of Borrower
by Lender, 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 Loan Agreement.
2. Amendment to Loan Agreement. Subject to the satisfaction of
the Conditions Precedent set forth in Section 3 below, the Loan Agreement is
hereby amended as follows:
(a) Section 7.3 (A) of the Loan Agreement is hereby amended
in its entirety to provide as follows:
(A) Minimum Adjusted Tangible Net Worth. Maintain an
Adjusted Tangible Net Worth, to be measured as of the end of each month, of not
less than the amount ("Net Worth Amount") shown below for the months
corresponding thereto:
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<CAPTION>
Month Ending Amount
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<S> <C>
09/30/98 ($25,000,000)
10/31/98 ($26,000,000)
11/30/98 ($27,000,000)
12/31/98 ($26,000,000)
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<TABLE>
<S> <C>
1/31/99 ($24,000,000)
2/28/99 ($22,000,000)
3/31/99 ($22,000,000)
4/30/99 and each month thereafter ($18,000,000)
</TABLE>
3. Conditions of Effectiveness. This Amendment shall become
effective upon satisfaction of the following conditions precedent: Lender shall
have received (i) four (4) copies of this Amendment executed by Borrower and
Lender (ii) such other certificates, instruments, documents, agreements and
opinions of counsel as may be required by Lender or its counsel, each of which
shall be in form and substance satisfactory to Lender and its counsel.
4. Representations and Warranties. Borrower hereby represents
and warrants as follows:
(a) This Amendment and the Loan Agreement, as amended hereby,
constitute legal, valid and binding obligations of Borrower and are enforceable
against Borrower in accordance with their respective terms.
(b) Upon the effectiveness of this Amendment, Borrower hereby
reaffirms all covenants, representations and warranties made in the Loan
Agreement to the extent the same are not amended hereby and agree that all such
covenants, representations and warranties shall be deemed to have been remade as
of the effective date of this Amendment.
(c) No Event of Default or Default has occurred and is
continuing or would exist after giving effect to this Amendment.
(d) Borrower has no defense, counterclaim or offset with
respect to the Loan Agreement.
(e) Borrower is in compliance in all material respects with
the terms contained in the Senior Debt Documentation.
5. Effect on the Loan Agreement.
(a) Upon the effectiveness of Section 2 hereof, each reference
in the Loan Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import shall mean and be a reference to the Loan Agreement as
amended hereby.
(b) Except as specifically amended herein, the Loan Agreement,
and all other documents, instruments and agreements executed and/or delivered in
connection therewith, shall remain in full force and effect, and are hereby
ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, operate as a waiver of any right, power or remedy of
Lender, nor constitute a waiver of any
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provision of the Loan Agreement, or any other documents, instruments or
agreements executed and/or delivered under or in connection therewith.
6. Governing Law. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns and shall be governed by and construed in accordance with the laws of
the State of New York.
7. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
8. Counterparts. This Amendment may be executed by the parties
hereto in one or more counterparts, each of which shall be deemed an original
and all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, this Amendment has been duly executed as
of the day and year first written above.
APPAREL VENTURES, INC.
By: /s/ William F. Singletary
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Name: William F. Singletary
Title: Chief Financial Officer
FLEET CAPITAL CORPORATION
By: /s/ Walter Schuppe
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Name: Walter Schuppe
Title: Vice President
