GMAC COMMERCIAL FINANCE LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
as of Xxxxx 00, 0000
XXXXX XXXXX, INC.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Re: Consent and Amendment to Credit Agreement and Other Documents
Gentlemen:
Reference is made to the Revolving Credit and Security Agreement dated
as of March 31, 2000 (as amended, restated, renewed, extended, supplemented,
substituted or otherwise modified, the "Credit Agreement"), by and between DELTA
XXXXX, INC. ("Borrower") and GMAC COMMERCIAL FINANCE LLC, as successor by merger
with GMAC COMMERCIAL CREDIT LLC, as a lender and as agent for the lenders party
to the Credit Agreement from time to time (in such capacity, "Agent"). All
capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Credit Agreement.
Borrower has requested that Agent consent to the sale of its Maiden,
North Carolina facility and make certain amendments to the Credit Agreement, the
Factoring Agreement and the Other Documents and Agent has agreed to do so,
subject to the terms and conditions contained herein.
A. Amendment Regarding GMAC Commercial Finance LLC. The Credit
Agreement, the Factoring Agreement and the Other Documents are hereby amended as
follows:
All references to "GMAC Commercial Credit LLC" appearing in
the Credit Agreement, the Factoring Agreement, and the Other Documents are
deleted in their entirety and references to "GMAC Commercial Finance LLC, as
successor by merger with GMAC Commercial Credit LLC" are inserted in lieu
thereof.
B. Amendments to Credit Agreement.
1. The definition of "Factoring Agreement" set forth in
Article I of the Credit Agreement is amended and restated in its entirety to
read as follows:
""Factoring Agreement" shall mean, individually and
collectively, the Amended and Restated Factoring Agreement
effective as of March 31, 1993 between Borrower and Factor,
and the Factoring Service Agreement effective as of July 15,
1986 between Borrower and Factor, as each such agreement
exists, has been or may hereafter be amended, restated,
renewed, extended, supplemented, substituted or otherwise
modified from time to time."
2. The definition of "Applicable Margin for Domestic Rate
Loans" set forth in Section 1.2 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
""Applicable Margin for Domestic Rate Loans" shall
mean (- .50%)."
3. The definition of "Applicable Margin for Eurodollar Rate
Loans" set forth in Section 1.2 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
""Applicable Margin for Eurodollar Rate Loans" shall
mean 1.75%."
4. The definition of "Term" set forth in Section 1.2 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
""Term" shall mean the Closing Date through March 31,
2007."
5. The following definition of "Fixed Charge Coverage Ratio"
is inserted in Section 1.2 of the Credit Agreement in the appropriate
alphabetical position:
""Fixed Charge Coverage Ratio" shall mean, as of the
last day of each fiscal quarter of Borrower, the ratio of (a)
EBITDA less unfinanced capital expenditures for the period of
four consecutive fiscal quarters ending on such date to (b)
the sum of all principal and cash interest paid with respect
to any Indebtedness, plus cash taxes and dividends actually
paid, in each case during the period of four consecutive
quarters ending on such date. Notwithstanding anything to the
contrary set forth herein, (a) any one-time charges incurred
in connection with Borrower's closing of its Maiden, North
Carolina plant shall be excluded from the calculation of the
Fixed Charge Coverage Ratio and (b) for purposes of
calculating the Fixed Charge Coverage Ratio, "unfinanced
capital expenditures" shall be reduced by the amount of all
cash proceeds of the Borrower's sales of assets during the
period of calculation."
6. Section 3.3 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"3.3 Commitment Fee. If, for any month during the
Term, the average daily outstanding balance of the Advances
for each day of such month is less than the Maximum Loan
Amount, then Borrower shall pay to Agent, for the ratable
benefit of Lenders, a fee at a rate equal to the product of
the amount by which the Maximum Loan Amount in effect at such
time exceeds such average daily outstanding balance of the
Advances multiplied by .30%. The commitment fee shall be
payable to Agent, for the ratable benefit of Lenders, in
arrears on the last day of each month, shall be fully earned
as of the last day of the applicable month in which such fee
becomes due and shall not be subject to refund, rebate or
proration for any reason whatsoever."
7. Section 4.10 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"4.10 Inspection of Premises and Inventory
Appraisals.
(a) At all reasonable times, Agent and each
Lender shall have full access to and the right to audit,
check, inspect and make abstracts and copies from Borrower's
books, records, audits, correspondence and all other papers
relating to the Collateral and the operation of Borrower's
business. Agent, any Lender and their agents may enter upon
Borrower's premises at any time during business hours and at
any other reasonable time, and from time to time, for the
purpose of inspecting the Collateral and any and all records
pertaining thereto and the operation of Borrower's business.
(b) At any time that the amount equal to (i)
the lesser of the Maximum Loan Amount and the Formula Amount
minus (ii) the average daily outstanding balance of Advances
is less than Five Million Dollars ($5,000,000) for a period of
thirty consecutive Business Days, Agent may, at its option,
conduct, and Borrower hereby consents to and shall cooperate
with an appraisal of Borrower's Inventory by an appraiser
acceptable to Agent in its sole and absolute discretion. The
cost of such appraisal, including reasonable fees and
disbursements of such appraiser, shall be for the account of
Borrower and Borrower shall pay any invoice directly delivered
to it by such appraiser. To the extent Borrower fails to make
any such payment, the amount due to the appraiser shall be an
expense payable by Borrower under Section 15.9."
8. Section 6.9 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"6.9 Financial Covenants.
(a) Maximum Leverage Ratio. Maintain as of
the last day of each of Borrower's fiscal quarters for the
period of four consecutive quarters ending thereon, a Leverage
Ratio of not more than 6.0:1.
(b) Fixed Charge Coverage Ratio. Maintain as
of the last day of each of Borrower's fiscal quarters for the
period of four consecutive quarters ending thereon, a Fixed
Charge Coverage Ratio of not less than 1.0:1."
9. Section 7.6 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
"7.6 Capital Expenditures. For each of Borrower's
fiscal years, make expenditures, on a consolidated basis,
in connection with the maintenance of its capital assets in
excess of $15,000,000."
C. Amendment to Factoring Agreement. All references to "March 31, 2004"
appearing in Section 9(a) of the Amended and Restated Factoring Agreement and
Section 8.3(a) of the Factoring Service Agreement are deleted in their entirety
and references to "March 31, 2007" are inserted in lieu thereof.
D. Consent to Sale. Borrower has requested that Lender consent to the
sale of Borrower's "Maiden Plant" located in Maiden, North Carolina (the "Maiden
Plant"). By its signature below, Lender hereby consents to the sale of the
Maiden Plant by the Borrower, provided that the net proceeds of such sale are
remitted to Lender as a mandatory prepayment of the Revolving Advances. Borrower
and Lender hereby agree that for purposes of calculating EBITDA under the Credit
Agreement, impairment and restructuring costs of the Maiden Plant closing as
reflected on the Borrower's income statements in accordance with GAAP are
considered extraordinary costs.
E. General Provisions.
1. Except as specifically set forth herein, no other changes
or modifications to the Credit Agreement or the Factoring Agreement or the Other
Documents are intended or implied, and, in all other respects, the Credit
Agreement, Factoring Agreement and the Other Documents shall continue to remain
in full force and effect in accordance with their terms as of the date hereof.
Except as specifically set forth herein, nothing contained herein shall evidence
a waiver or amendment by Agent of any other provision of the Credit Agreement,
the Factoring Agreement or any of the Other Documents nor shall anything
contained herein be construed as a consent by Agent to any transaction other
than those specifically consented to herein.
2. The terms and provisions of this agreement shall be for the
benefit of the parties hereto and their respective successors and assigns; no
other person, firm, entity or corporation shall have any right, benefit or
interest under this agreement.
3. This agreement may be signed in counterparts, each of which
shall be an original and all of which taken together constitute one amendment.
In making proof of this agreement, it shall not be necessary to produce or
account for more than one counterpart signed by the party to be charged.
4. This agreement sets forth the entire agreement and
understanding of the parties with respect to the matters set forth herein. This
agreement cannot be changed, modified, amended or terminated except in a writing
executed by the party to be charged.
Very truly yours,
GMAC COMMERCIAL FINANCE LLC, as Agent and Lender
By: /s/ Xxxxxx Xxxxxxx
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Title: EVP
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ACKNOWLEDGED AND AGREED:
DELTA XXXXX, INC.
By: /s/ X.X. Xxxxxxx, Xx.
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X.X. Xxxxxxx, Xx.
Title: Chief Financial Officer
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