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EXHIBIT 10.6.4
U.S. BANK
NATIONAL CORPORATE
BANKING DIVISION
0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
November 10, 1995
Mr. Xxxxx Xxxxx
Senior Vice President, CFO
Sun Sportswear, Inc.
0000 Xxxxx 000xx Xxxxxx
Xxxx, XX 00000
Re: Revolving and Term Loan Agreement dated November 19, 1991, as Amended, the
"Agreement"
Dear Xxxxx,
U.S. Bank of Washington, National Association, as Agent for the Banks in the
referenced credit agreement hereby confirms that the Agent and Banks agree to
amend the Agreement to eliminate the requirement within the Agreement that Sun
Sportswear maintain a ninety consecutive day period in each year during which
time the Aggregate Current Amount shall not exceed Eligible Accounts Receivable.
Further, subject to the terms hereof, the Agent and Banks agree to waive
non-compliance with such requirement for the year and fiscal quarter ended
September 30, 1995. Both the elimination and the waiver are subject to the
following terms and conditions (all of which are to be included in an Amendment
to the Agreement acceptable to Agent and Banks).
o Conversion to daily settlement of the line of credit with A/R payments to
be made directly to a bank-controlled lockbox,
o Modification of the Agreement to reduce the advance rate on receivables due
from K Mart to 70%, and limit the maximum amount of gross receivables from
K Mart in the Borrowing Base to $2,500,000, except that in the event that K
Mart files for protection under bankruptcy laws, all K Mart receivables
shall be excluded from the Borrowing Base,
o Addition of a new financial covenant testing interest coverage (to be
defined as the sum of GAAP earnings before interest, taxes, depreciation
and amortization, all divided by interest expense, with a minimum
requirement of 1.0 for the quarter ended December 31, 1995 and each quarter
thereafter),
o Increase the frequency of compliance reporting from quarterly to monthly
(except for the coverage test which shall be measured quarterly),
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o Increase in the Applicable Margin for Libor loans to 2.0% effective as of
the date of this letter,
o Payment of a fee (to be split by the Banks pro-rata based on their
commitments) of $12,500, and all other expenses and fees incurred in
connection with the Amendment to the Agreement,
o Waiver of defenses and claims.
All other terms and conditions of the Agreement remain in full force and effect.
If these terms are acceptable to Sun, please indicate so by signing and
returning the attached copy of this letter by November 17, 1995, after which
time this offer shall expire.
Oral agreements or oral commitments to loan money, extend credit or to forbear
from enforcing repayment of a debt are not enforceable under Washington law.
Please let me know if you have any questions regarding this matter.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
cc: Xxxxx Xxxx, West One Bank, Washington
Agreed and Accepted:
SUN SPORTSWEAR, INC.
BY: /s/ Xxxxx Xxxxx
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ITS: Senior Vice President and Chief Financial Officer
DATE: November 10, 1995
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