WAIVER AGREEMENT

 

                               WAIVER AGREEMENT

     WAIVER AGREEMENT dated as of July 31, 1997 (this "WAIVER"), among 
GANTOS, INC., a Michigan corporation (the "BORROWER"), FLEET BANK, N.A. 
(formerly known as Natwest Bank N.A.) and LASALLE NATIONAL BANK as lenders 
(each individually, a "LENDER" and collectively, the "Lenders"), and FLEET 
BANK, N.A. (formerly known as Natwest Bank N.A.) as agent for the Lenders (in 
such capacity, the "AGENT"). Reference is made to the Revolving Credit 
Agreement dated as of March 10, 1995 (as heretofore and hereafter amended, 
supplemented or modified from time to time in accordance with its terms, the 
"CREDIT AGREEMENT") among the Borrower, the Lenders, and the Agent. Unless 
otherwise specifically defined herein, all capitalized terms used herein 
shall have the respective meanings ascribed to such terms in the Credit 
Agreement.

     WHEREAS, Section 7.10 of the Credit Agreement requires that EBITDA of 
the Borrower and its subsidiaries for the four fiscal quarter period ended 
July 31, 1997 shall have been no less than $6,800,000.

     WHEREAS, the Borrower has informed the Agent and the Lenders that EBITDA 
of the Borrower and its subsidiaries for such period exceeded $6,000,000 but 
was less than $6,800,000; and

     WHEREAS, the Borrower has requested that the Agent and the Lenders waive 
the requirement under said Section 7.10 that EBITDA of the Borrower and its 
subsidiaries for such period shall have been no less than $6,800,000.

     NOW, THEREFORE, for good and valuable consideration, the receipt of 
which is hereby acknowledged, and subject to the terms and conditions and 
fulfillment of the conditions set forth below, the parties hereto agree as 
follows:

     1.  CONDITIONAL WAIVER OF SECTION 7.10 OF THE CREDIT AGREEMENT. Subject 
to the conditions as to effectiveness set forth in Paragraph 3 of this 
Waiver, so long as EBITDA of the Borrower and its subsidiaries for the four 
fiscal quarter period ended July 31, 1997 exceeded $6,000,000 the Agent and 
the Lenders waive the requirement under Section 7.10 of the Credit Agreement 
that EBITDA of the Borrower and its subsidiaries for such period shall have 
been no less than $6,800,000.

     2.  REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and 
warrants as follows (which representations and warranties shall survive the 
execution and delivery of this Waiver) as of the date hereof that:

     (a)  All representations and warranties contained in the Credit 
Agreement and each of the other Loan Documents are true and correct in all 
material respects as of

the date hereof with the same force and effect as if made on such date 
(except to the extent that any such representation or warranty relates 
expressly to an earlier date).

          (b)  No registration or filing with, consent or approval of, or 
other action by, any Federal, State or other governmental agency, authority 
or regulatory body is or will be required on behalf of the Borrower in 
connection with the execution, delivery, performance, validity or enforcement 
of this Waiver other than any such registration or filing which has been made 
or any such consent, approval or other action which has been obtained and 
remains in full force and effect and other than the filing of a Form 10-Q or 
a Form 10-K with the Securities and Exchange Commission.

          (c)  The execution, delivery and performance of this Waiver by the 
Borrower will not violate any provision of the certificate or articles of 
incorporation or bylaws of the Borrower or any of its subsidiaries or any 
law, statute, rule or regulation, or any order or decree of any court or 
governmental instrumentality applicable to the Borrower or any of its 
subsidiaries, or violate, result in the breach of or constitute a default 
under any indenture, agreement or other instrument to which the Borrower or 
any of its subsidiaries or any of their respective properties or assets are 
or may be bound.

          (d)  After giving effect to this Waiver, the Borrower is in 
compliance with all of the various covenants and agreements applicable to it 
set forth in the Credit Agreement and each of the other Loan Documents.

          (e)  After giving effect to this Waiver, no event has occurred and 
is continuing which constitutes or would constitute, with the giving of 
notice or the lapse of time or both, an Event of Default under the Credit 
Agreement or any of the other Loan Documents, or an Event of Default (as 
defined in the Indenture) under the Indenture.

          (f)  The Borrower has no defense to or setoff, counterclaim or 
claim against payment of the Obligations or enforcement of the Loan Documents 
based upon a fact or circumstance existing or occurring on or prior to the 
date hereof.

          3.   CONDITIONS PRECEDENT.  Notwithstanding any term or provision 
of this Waiver to the contrary, the waiver set forth in Paragraph 1 hereof 
shall become effective until the Agent shall have determined that each of the 
following conditions precedent shall have been satisfied:

          (a)  All representations and warranties made by the Borrower 
contained in Paragraph 2 hereof shall be true and correct with the same 
effect as though such representations and warranties had been made on the 
date of effectiveness of this Waiver after giving effect to such Waiver 
(unless any such representation or warranty speaks expressly to an earlier 
date).

   (b)  Counterparts of this Waiver shall have been duly executed and 
delivered on behalf of the Borrower, the Lenders and the Agent.

   4.   CONTINUED EFFECTIVENESS.  Each of the parties hereto agrees that, 
except as expressly supplemented by this Waiver, all of the covenants and 
agreements and other provisions contained in the Credit Agreement and the 
other Loan Documents are hereby ratified and confirmed in all respects and 
shall remain in full force and effect from and after the date of this Waiver.

   5.   COUNTERPARTS.  This Waiver may be executed in two or more 
counterparts, each of which shall be an original, and all of which, taken 
together, shall constitute a single instrument. Delivery of an executed 
counterpart of a signature page to this Waiver by telecopier shall be 
effective as delivery of a manually executed counterpart of this Waiver.

   6.   GOVERNING LAW.  THIS WAIVER SHALL BE CONSTRUED IN ACCORDANCE WITH AND 
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE 
CONFLICTS OF LAWS PRINCIPLES THEREOF).

   IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly 
executed by their respective officers thereunto duly authorized as of the day 
and year first above written.

                                       GANTOS, INC., as Borrower

                                       By:  /s/ Arlene H. Stern
                                           ---------------------------------
                                         Name: Arlene H. Stern
                                         Title: President & CEO

                                       FLEET BANK, N.A. (formerly known as 
                                       Natwest Bank N.A.), as Agent and as 
                                       a Lender

                                       By: /s/ Thomas B. Joyce
                                           ---------------------------------
                                         Name: Thomas B. Joyce
                                         Title: V.P. & Portfolio Manager

                                       LASALLE NATIONAL BANK, as a Lender

                                       By: /s/ Mary S. Joseph
                                           ---------------------------------
                                         Name: 
                                         Title: 

 

Basic Info X:

Name: WAIVER AGREEMENT
Type: Waiver
Date: Sept. 16, 1997
Company: GANTOS INC
State: Michigan

Other info:

Date:

  • March 10 , 1995
  • four fiscal quarter period ended July 31 , 1997

Organization:

  • Revolving Credit Agreement
  • Securities and Exchange Commission
  • Event of Default
  • Natwest Bank N.A
  • LASALLE NATIONAL BANK

Location:

  • Michigan
  • NEW YORK

Money:

  • $ 6,000,000
  • $ 6,800,000

Person:

  • Arlene H. Stern
  • Thomas B. Joyce
  • Mary S. Joseph