EXHIBIT 10.8.7
AMENDMENT NO. 2 TO
LOAN AND SECURITY AGREEMENT
AMENDMENT NO. 2 to LOAN AND SECURITY AGREEMENT ("Amendment"), dated
August 23, 2002 by and between Congress Financial Corporation (Southern), a
Georgia corporation ("Lender") and Delta Apparel, Inc., a Georgia corporation
("Borrower").
W I T N E S S E T H:
WHEREAS, Borrower has entered into financing arrangements with Lender
pursuant to which Lender may make loans and provide other financial
accommodations to Borrower as set forth in the Loan and Security Agreement,
dated May 16, 2000, by and between Borrower and Lender as amended by Amendment
No. 1 to Loan and Security Agreement, dated as of October 16, 2001 (as the same
now exists and is amended hereby and may hereafter be further amended, modified,
supplemented, extended, renewed, restated or replaced, the "Loan Agreement") and
the other agreements, documents and instruments referred to therein or at any
time executed and/or delivered in connection therewith or related thereto,
including this Amendment (all of the foregoing, together with the Loan
Agreement, as the same now exist or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced, being collectively
referred to herein as the "Financing Agreements");
WHEREAS, Borrower has requested that Lender agree to certain amendments
to the Loan Agreement and Lender is willing to agree to such amendments, subject
to the terms and conditions contained herein; and
WHEREAS, by this Amendment, Borrower and Lender intend to evidence such
amendments.
NOW, THEREFORE, in consideration of the foregoing, and the agreements
and covenants contained herein, the parties hereto agree as follows:
1. Definitions.
(a) Additional Definition. Section 1 of the Loan Agreement is
hereby amended to include, in addition and not in imitation, the following
definition:
"Monthly Average Excess Availability" shall mean, at any time,
the average of the amount of the Excess Availability for the
immediately preceding thirty (30) days as calculated by Lender
based on the amount of the Excess Availability on each date
during such period."
(b) Interpretation. For purposes of this Amendment, unless
otherwise defined herein, all terms used herein, including, but not limited to,
those terms used and/or defined in the recitals above, shall have the respective
meanings assigned to such terms in the Loan Agreement.
2. Amendments.
(a) Collection of Accounts. Section 6.3(a) is hereby amended to
add the following before the last sentence thereof:
"Lender shall instruct the depository banks at which the
Blocked Accounts are maintained to transfer the funds on
deposit in the Blocked Accounts to such operating bank account
of Borrower as Borrower may specify in writing to Lender until
such time as Lender shall notify the depository bank
otherwise. Lender may notify the depository banks at which the
Blocked Accounts are maintained that the Blocked Account
Agreements are effective and may instruct such banks to
transfer all funds received or deposited into the Blocked
Accounts to the Payment Account at any time that either: (i)
an Event of Default, or act, condition or event which with
notice or passage of time or both would constitute an Event of
Default, shall exist or have occurred, or (ii) Monthly Average
Excess Availability shall at any time be less than
$7,500,000."
(b) Inventory Covenants. The reference to "twice" in the second
line of Section 7.3(d) of the Loan Agreement is hereby deleted and "once" is
substituted therefor.
(c) Dividends and Redemptions. Clause (E) of Section 9.11(c)(i) of
the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:
"(E) the aggregate amount of all payments for such repurchases
during the term of this Agreement shall not exceed
$23,000,000."
(d) Term. The reference to "three (3) years" in the third line of
Section 12.1(a) of the Loan Agreement is hereby deleted and the phrase "five (5)
years" is substituted therefor.
(e) Early Termination Fee. (i) The first sentence of Section
12.1(c) of the Loan Agreement is hereby deleted in its entirety and the
following substituted therefor:
"If for any reason this Agreement is terminated prior to the
end of the then current term or renewal term of this
Agreement, in view of the impracticality and extreme
difficulty of ascertaining actual damages and by mutual
agreement of the parties as to a reasonable calculation of
Lender's lost profits as a result thereof, Borrower agrees to
pay to Lender, upon the effective date of such termination, an
early termination fee in the amount equal to one (1%) percent
of the Maximum Credit plus $75,000."
(ii) Section 12.1(d) of the Loan Agreement is hereby deleted in its
entirety and the following substituted therefor:
" (d) Notwithstanding anything to the contrary contained in
Section 12.1(c) above, in the event of the termination of this
Agreement at the request of Borrower prior to the end of the
term of this Agreement and the full and final repayment of all
Obligations and the receipt by Lender of cash collateral all
as provided in Section 12.1(a) above, Borrower shall only be
required to pay to Lender an early termination fee of $75,000
if such payments are made to Lender with the initial proceeds
of a financing transaction provided or underwritten by
Wachovia Bank, National Association to Borrower."
3. Amendment Fee. In addition to all other fees, charges,
interest and expenses payable by Borrower to Lender, Borrower shall pay to
Lender a fee for entering into this Amendment in an amount equal to $80,000,
which fee is fully earned as of the date hereof and due and payable on the date
hereof, and which Lender may, at its option, charge directly to the loan
account(s) of Borrower.
4. Representations, Warranties and Covenants. Borrower
represents, warrants and covenants with and to Lender as follows, which
representations, warranties and covenants are continuing and shall survive the
execution and delivery hereof, the truth and accuracy of, or compliance with
each, together with the representations, warranties and covenants in the other
Financing Agreements, being a continuing condition of the making or providing of
any Loans or Letter of Credit Accommodations by Lender to Borrower:
(a) This Amendment has been duly authorized, executed and
delivered by Borrower and the agreements and obligations of Borrower contained
herein constitute legal, valid and binding obligations of Borrower enforceable
against Borrower in accordance with their terms.
(b) Neither the execution and delivery of this Amendment, or any
other agreements, documents or instruments in connection herewith, nor the
consummation of the transactions herein or therein contemplated, nor compliance
with the provisions hereof or thereof are in contravention of any law or
regulation or any order or decree of any court or governmental instrumentality
applicable to Borrower or any of its Subsidiaries in any respect, or conflicts
with or result in the breach of, or constitutes a default in any respect under
any mortgage, deed of trust, security agreement, agreement or instrument to
which Borrower is a party or may be bound, or violates any provision of the
Certificate of Incorporation or By-Laws of Borrower.
(c) After giving effect to the provisions of this Amendment, no
Event of Default or act, condition or event which with notice or passage or time
or both would constitute an Event of Default, exists or has occurred and is
continuing.
5. Conditions Precedent. The effectiveness of the terms and
conditions of this Amendment shall be effective upon the satisfaction of each of
the following conditions precedent in a manner satisfactory to Lender:
(a) the receipt by Lender of an original of this Amendment, duly
authorized, executed and delivered by Borrower;
(b) the receipt by Lender of the fee set forth in Section 3
hereof; and
(c) no Event of Default shall have occurred and be continuing and
no event shall have occurred or condition be existing and continuing which, with
notice or passage of time or both, would constitute an Event of Default.
6. General.
(a) Effect of this Amendment. Except as modified pursuant hereto,
no other changes or modifications to the Financing Agreements are intended or
implied and in all other respects the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
date hereof. To the extent of conflict between the terms of this Amendment and
the Financing Agreements, the terms of this Amendment shall control.
(b) Further Assurances. The parties hereto shall execute and
deliver such additional documents and take such additional action as may be
necessary to effectuate the provisions and purposes of this Amendment.
(c) Governing Law. The rights and obligations hereunder of each of
the parties hereto shall be governed by and interpreted and determined in
accordance with the internal laws of the State of Georgia (without giving effect
to principles of conflict of laws).
(d) Binding Effect. This Amendment is binding upon and shall inure
to the benefit of Lender and Borrower and their respective successors and
assigns.
(e) Counterparts. This Amendment may be executed in one or more
counterparts, each of which when so executed shall be deemed to be an original
but all of which when taken together shall constitute one and the same
instrument. In making proof of this Amendment, it shall not be necessary to
produce or account for more than one counterpart thereof signed by each of the
parties hereto.
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IN WITNESS WHEREOF, Lender and Borrower have caused this Amendment to be duly
executed as of the day and year first above written.
CONGRESS FINANCIAL CORPORATION
(SOUTHERN)
By:
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Title:
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DELTA APPAREL, INC.
By:
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Title:
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