EXHIBIT 10.49
[CIT LOGO] EQUIPMENT RENTAL AND FINANCE - XX
0000 X. XXXXXXXXXXXX XXXX.
XXXXX, XX 00000
February 24, 2004
Avondale Xxxxx, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, XX 00000-0000
Attention: Xxxx X. Xxxxxxx, Xx.
Re: Amendment #1: Financial Reports and Covenant Rider (the "Rider") to Master
Security Agreement (the "Agreement") dated July 30, 2002 between Avondale
Xxxxx, Inc. as Debtor, and The CIT Group/Equipment Financing, Inc. as Secured
Party.
Xx. Xxxxxxx:
Debtor has notified Secured Party that Debtor will fail to comply with the
Fixed Charge Coverage ratio, and the Consolidated Adjusted Tangible Net Worth
covenant under the Rider to the Agreement, during the fiscal years of 2004 and
2005, which failure would result in an Event of Default under Section 9(b) of
the Agreement. Secured Party agrees to amend the Fixed Charge Coverage ratio,
and the Consolidated Adjusted Tangible Net Worth covenant as follows:
FIXED CHARGE MINIMUM TANGIBLE
COVERAGE NET WORTH
------------------------------------- -------------------------------------
CURRENT PROPOSED CURRENT PROPOSED
----------------- ------------------- ---------------------- ------------
FY 2004
1ST QUARTER 1.50 1.50 $ 100,000 $ 100,000
2ND QUARTER 1.50 1.25 100,000 100,000
3RD QUARTER 1.50 1.00 100,000 90,000
4TH QUARTER 1.50 1.00 100,000 85,000
FY 2005
1ST QUARTER 1.50 1.00 100,000 80,000
2ND QUARTER 1.50 1.00 100,000 75,000
3RD QUARTER 1.50 1.25 100,000 75,000
4TH QUARTER 1.50 1.50 100,000 75,000
Provided, however, (i) the amendments set forth in this letter shall not
constitute an amendment of any other covenant, or of any other Event of Default
or event which with notice or the passage of time or both would be an Event of
Default under the Agreement, (ii) the Agreement shall remain in full force and
effect, and unchanged except as set forth in this letter amendment and (iii)
notwithstanding the amendment of the Fixed Charge Coverage ratio and the
Consolidated Adjusted Tangible Net Worth covenant in this letter, Debtor is
hereby advised that the Secured Party shall demand strict compliance by the
Debtor with the terms of the Agreement at all times and the Secured Party
reserves all rights and remedies with respect thereto.
The effectiveness of this amendment shall be subject to the Secured Party's
receipt of a $40,000.00 amendment fee.
Please indicate your agreement with the foregoing by executing this letter and
returning it to the undersigned with the amendment fee no later than March 12,
2004.
THE CIT GROUP/EQUIPMENT FINANCING, INC.
By:
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Title: Credit Analyst
AGREED TO:
Debtor : Avondale Xxxxx, Inc.
By
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Title
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Guarantor : Avondale Incorporated
By
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Title
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