SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Exhibit 10.2.3
SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
“Amendment”) is made and entered into this 26th day of February, 2007, by and among
DELTA APPAREL, INC., a Georgia corporation (“Delta”), X.X. XXXXX CO., a North Carolina corporation
(“Soffe”), JUNKFOOD CLOTHING COMPANY, a Georgia corporation (“JCC”; Delta, Soffe and JCC being
hereinafter collectively referred to as “Borrowers” and each individually as a “Borrower”),
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, in its capacity as agent
(together with its successors in such capacity, “Agent”) for the financial institutions party from
time to time to the Loan Agreement (as defined below) as lenders (“Lenders”), and such Lenders.
Recitals:
Borrowers are parties to a certain Second Amended and Restated Loan and Security Agreement
dated August 22, 2005, among Borrowers, Agent and Lenders, as amended by that certain First
Amendment to Second Amended and Restated Loan and Security Agreement and Consent dated October 2,
2006 (as so amended, and as at any other time amended, restated, modified or supplemented, the
“Loan Agreement”), pursuant to which Agent and Lenders have made certain loans and other financial
accommodations available to Borrowers.
The parties hereto desire to further amend the Loan Agreement as hereinafter set forth.
NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and valuable
consideration, the receipt and sufficiency of which are hereby severally acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:
1. Definitions. All capitalized terms used in this Amendment, unless otherwise
defined herein, shall have the meaning ascribed to such terms in the Loan Agreement.
2. Amendments to Loan Agreement. The Loan Agreement is hereby amended as follows:
(a) By deleting the definitions of “Fixed Charge Coverage Ratio,” “Fixed Charges” and “Maximum
Credit” contained in Section 1 of the Loan Agreement and by substituting the following new
definitions in lieu thereof:
“Fixed Charge Coverage Ratio” shall mean, with respect to Borrowers and their
Subsidiaries, on a consolidated basis, for any period of determination, the ratio of
(a) EBITDA of Borrowers during such period minus the amount of any taxes
paid in cash, cash dividends to the equity holders of such Person, other
distributions to equity holders of such Person, and redemptions with respect to the
Capital Stock of such Person (including, but not limited to stock repurchases)
during the period in question minus all Unfinanced Capital Expenditures made
during such period to (b) Fixed Charges of Borrowers and their Subsidiaries for the
same period.
“Fixed Charges” for any Person during any period shall mean the sum of, without
duplication, (a) cash interest paid during such period, (b) all regularly scheduled
(as determined at the beginning of the respective period) principal payments of
Indebtedness
for borrowed money and Indebtedness with respect to the Capital Leases (and, without
duplicating any item included in clause (a) of this definition, the interest
component with respect to Indebtedness under Capital Leases), (c) an amount equal to
the product of: (i) $265,278 (which represents the aggregate monthly reduction of
the Fixed Asset Loan Limit and the Tennessee Asset Loan Limit in effect under this
Agreement prior to the First Amendment Date) multiplied by the (ii) the cumulative
number of months that elapsed during such period of determination prior to the First
Amendment Date, and (d) an amount equal to the product of: (i) $177,778 (which
represents the aggregate monthly reduction of the Fixed Asset Loan Limit and the
Tennessee Asset Loan Limit currently in effect under this Agreement) multiplied by
the (ii) the cumulative number of months that elapsed during such period of
determination following the First Amendment Date.
“Maximum Credit” shall mean the amount of $90,000,000.
(b) By deleting clause (b) of Section 3.2 of the the Loan Agreement in its entirety and by
substituting the following new clause (b) in lieu thereof:
(b) on the first day of each month in arrears for the benefit of Lenders, an
unused line fee at a rate equal to one quarter of one percent (0.250%) per annum
calculated upon the amount by which the Maximum Credit exceeds the average daily
principal balance of the outstanding Loans and Letter of Credit Obligations during
the immediately preceding month (or part thereof) (the “Average Daily Balance”)
while this Agreement is in effect and for so long thereafter as any of the
Obligations are outstanding, which fee shall be payable on the first day of each
month in arrears and shall be fully earned when due; and
(c) By deleting the reference to “$85,000,000” contained in the recitals to Exhibit A
to the Loan Agreement and by substituting in lieu thereof a reference to “$90,000,000”.
(d) By attaching Schedule 1.21 to this Amendment to the Loan Agreement in proper
numerical sequence as Schedule 1.21 thereto.
3. Additional Covenants and Agreements. To induce Agents and Lenders to enter into
this Amendment, each Borrower covenants and agrees that no later than forty-five (45) days from the
date of this Amendment, Borrower shall have delivered to Agent, in form and substance satisfactory
to Agent, the following documents related to the Mortgage covering Real Property located in Fayette
County, Alabama (as at any time amended, the “Alabama Mortgage”):
(a) a duly executed amendment which gives effect to the transactions contemplated by
this Amendment;
(b) if deemed necessary by Agent, a mortgage tax order from the Alabama Department of
Revenue with respect to recording taxes payable in connection with the recordation of the
Mortgage amendment described in clause (a) above; and
(c) a valid, effective and fully paid endorsement to Agent’s mortgage title insurance
policy with respect to the Alabama Mortgage.
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4. Ratification and Reaffirmation. Each Borrower hereby ratifies and reaffirms the
Obligations, each of the Financing Agreements and all of such Borrower’s covenants, duties,
indebtedness and liabilities under the Financing Agreements.
5. Acknowledgments and Stipulations. Each Borrower acknowledges and stipulates that
the Loan Agreement and the other Financing Agreements executed by such Borrower are legal, valid
and binding obligations of such Borrower that are enforceable against such Borrower in accordance
with the terms thereof; all of the Obligations are owing and payable without defense, offset or
counterclaim (and to the extent there exists any such defense, offset or counterclaim on the date
hereof, the same is hereby waived by such Borrower); the security interests and liens granted by
such Borrower in favor of Agent are duly perfected, first priority security interests and liens;
and the unpaid principal amount of the Loans as of the opening of business on February 26, 2007,
totaled $78,254,254.70.
6. Representations and Warranties. Each Borrower represents and warrants to Agent and
Lenders, to induce Agent and Lenders to enter into this Amendment, that no Default or Event of
Default exists on the date hereof; the execution, delivery and performance of this Amendment have
been duly authorized by all requisite corporate action on the part of such Borrower and this
Amendment has been duly executed and delivered by such Borrower; and all of the representations and
warranties made by such Borrower in the Loan Agreement are true and correct on and as of the date
hereof.
7. Reference to Loan Agreement. Upon the effectiveness of this Amendment, each
reference in the Loan Agreement to “this Agreement,” “hereunder,” or words of like import shall
mean and be a reference to the Loan Agreement, as amended by this Amendment.
8. Breach of Amendment. This Amendment shall be part of the Loan Agreement and a
breach of any representation, warranty or covenant herein shall constitute an Event of Default.
9. Conditions Precedent. The effectiveness of the amendments contained in Section 2
hereof is subject to the satisfaction of each of the following conditions precedent, in form and
substance satisfactory to Agent, unless satisfaction thereof is specifically waived in writing by
Agent:
(a) Agent shall have received a duly executed Secretary’s Certificate of Director
Resolutions from each Borrower;
(b) Agent shall have received a duly executed counterpart of this Amendment from each
of the parties hereto;
(c) Agent shall have received duly executed amendments to each of the Mortgages (other
than the Alabama Mortgage) which give effect to the transactions contemplated by this
Amendment;
(d) Agent shall have received a valid, effective and fully-paid endorsement to Agent’s
mortgage title insurance policy with respect to each Mortgage (other than the Alabama
Mortgage);
(e) No Default or Event of Default shall be in existence.
10. Expenses of Agent. Borrowers agree to pay, on demand, all costs and expenses
incurred by Agent in connection with the preparation, negotiation and execution of this Amendment
and any other Financing Agreements executed pursuant hereto and any and all amendments,
modifications,
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and supplements thereto, including, without limitation, the costs and fees of Agent’s legal
counsel and any taxes or expenses associated with or incurred in connection with any instrument or
agreement referred to herein or contemplated hereby.
11. Effectiveness; Governing Law. This Amendment shall be effective upon acceptance
by Agent and Lenders (notice of which acceptance is hereby waived), whereupon the same shall be
governed by and construed in accordance with the internal laws of the State of Georgia.
12. Successors and Assigns. This Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.
13. No Novation, etc.. Except as otherwise expressly provided in this Amendment,
nothing herein shall be deemed to amend or modify any provision of the Loan Agreement or any of the
other Financing Agreements, each of which shall remain in full force and effect. This Amendment is
not intended to be, nor shall it be construed to create, a novation or accord and satisfaction, and
the Loan Agreement as herein modified shall continue in full force and effect.
14. Counterparts; Telecopied Signatures. This Amendment may be executed in any number
of counterparts and by different parties to this Amendment on separate counterparts, each of
which, when so executed, shall be deemed an original, but all such counterparts shall constitute
one and the same agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
15. Further Assurances. Each Borrower agrees to take such further actions as Agent
shall reasonably request from time to time in connection herewith to evidence or give effect to the
amendments set forth herein or any of the transactions contemplated hereby.
16. Section Titles. Section titles and references used in this Amendment shall be
without substantive meaning or content of any kind whatsoever and are not a part of the agreements
among the parties hereto.
17. Release of Claims. To induce Agent and Lenders to enter into this Amendment, each
Borrower hereby releases, acquits and forever discharges Agent and Lenders, and all officers,
directors, agents, employees, successors and assigns of Agent and Lenders, from any and all
liabilities, claims, demands, actions or causes of action of any kind or nature (if there be any),
whether absolute or contingent, disputed or undisputed, at law or in equity, or known or unknown,
that such Borrower now has or ever had against Agent or any Lender arising under or in connection
with any of the Financing Agreements or otherwise. Each Borrower represents and warrants to Agent
and Lenders that such Borrower has not transferred or assigned to any Person any claim that such
Borrower ever had or claimed to have against Agent or any Lender.
18. Waiver of Jury Trial. To the fullest extent permitted by applicable law, the
parties hereto each hereby waives the right to trial by jury in any action, suit, counterclaim or
proceeding arising out of or related to this Amendment.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed under
seal and delivered by their respective duly authorized officers on the date first written above.
BORROWERS:
| ATTEST: | DELTA APPAREL, INC. | |||||
| By: | ||||||
Secretary
|
Name: | |||||
[CORPORATE SEAL]
|
Title: | |||||
| ATTEST: | X.X. XXXXX CO. | |||||
| By: | ||||||
Secretary
|
Name: | |||||
[CORPORATE SEAL]
|
Title: | |||||
| ATTEST: | JUNKFOOD CLOTHING COMPANY | |||||
| By: | ||||||
Secretary
|
Name: | |||||
[CORPORATE SEAL]
|
Title: | |||||
[Signatures continued on following page.]
| AGENT: | ||||||
| WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| LENDERS: | ||||||
| WACHOVIA BANK, NATIONAL ASSOCIATION | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| THE CIT GROUP/COMMERCIAL SERVICES, INC. | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| IDB BANK | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
| By: | ||||||
| Name: | ||||||
| Title: | ||||||
Commitments
| Name of Lender | Commitment | |||
1.
|
Wachovia Bank, National Association | $57,500,000 | ||
2
|
The CIT Group/Commercial Services, Inc. | $15,000,000 | ||
3.
|
IDB Bank | $17,500,000 |
