November 15, 1999
SIGNAL APPAREL COMPANY, INC.
000 0xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Gentlemen:
Reference is made to the Revolving Credit, Term Loan and Security
Agreement, dated March 12, 1999, as amended and/or supplemented from time to
time, the "Credit Agreement by and among SIGNAL APPAREL COMPANY, INC.
("Borrower") and our predecessor -in-interest, BNY FINANCIAL CORPORATION, now
GMAC COMMERCIAL CREDIT LLC, as Agent (in such capacity, "Agent") for the lenders
("Lenders") parties from time to time to the Credit Agreement. All capitalized
terms used and not otherwise defined herein shall have the respective meanings
ascribed to them in the Credit Agreement.
1. The Borrower has advised Lender that, for the fiscal quarter ending
October 2, 1999, its (i) Tangible Net Worth was less than ($70,000,000), the
minimum Tangible Net Worth permitted as of October 2, 1999 under Section 6.5
(Tangible Net Worth) of the Credit Agreement; (ii) the Current Ratio was less
than 0.65:1.00, the minimum Current Ratio permitted as of October 2, 1999 under
Section 6.6 (Current Ratio) of the Credit Agreement; (iii) Working Capital was
less than ($6,500,000), the minimum Working Capital permitted as of October 2,
1999 under Section 6.7 (Working Capital) of the Credit Agreement; and (iv) net
loss, excluding any extraordinary or non-recurring items was greater than
($3,500,000), the maximum net loss excluding any extraordinary or non-recurring
items permitted as of October 2, 1999 under Section 6.13(a) (Additional
Financial Convents) of the Credit Agreement. As a result of such noncompliance,
Events of Default have occurred under Section 10.2 of Article X (Events of
Default) of the Credit Agreement (the "Subject Events of Default"). Borrowers
have requested Lender to waive the Subject Events of Default, and Lender hereby
waives the Subject Events of Default.
2. The Borrower hereby acknowledges, confirms and agrees that all amounts
charged or credited to the Borrower's account as of November 15, 1999 are
correct and binding upon the Borrower and that all amounts reflected to be due
and owing in the Borrower's account as of November 15, 1999 are due and owing
without defense, setoff, offset, recoupment, claim or counterclaim. Furthermore,
Borrower hereby also irrevocably releases and forever discharges Agent and
Lenders and each of Agent's and Lenders' respective affiliated concerns, as well
as all of the Agent's and Lender's respective directors, officers, employees,
shareholders and agents from any and all liabilities, demands, obligations,
causes of action and other claims, of every kind, nature and
description, known and unknown, which Borrower now has or may hereafter have, by
reason of any matter, cause or thing occurred, done, omitted or suffered to be
done prior to the date hereof.
3. Except as specifically set forth herein, no other changes or
modifications to the Credit Agreement are intended or implied, and, in all other
respects, the Credit Agreement shall continue to remain in full force and effect
in accordance with its 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 or a waiver of Borrower's
compliance with any of the specific covenants set forth above for any other time
period. Without limiting the foregoing, nothing herein contained shall or shall
be deemed to, waive any Event of Default of which Agent does not have actual
knowledge as of the date hereof, or any event or circumstance which with notice
or passage of time, or both, would constitute an Event of Default. Agent may, in
its sole discretion, waive any of such other Events of Default, but only in a
specific writing signed by Agent.
4. In consideration of the waiver given by Agent and Lenders herein,
Borrower agrees to pay a non-refundable waiver fee to Agent, for the benefit of
Lenders in the amount of $40,000, which fee shall be fully earned as of the date
hereof, and may be paid by a charge to your account with us.
5. The terms and provisions of this agreement shall be for the benefit of
the parties hereto and the respective successors and assigns; no other person,
firm, entity or corporation shall have any right, benefit or interest under this
agreement.
6. This agreement may be signed in counterparts, each of which shall be an
original and all of which taken together shall 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.
7. 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 writing executed by the
party to be charged.
Very truly yours,
GMAC COMMERCIAL CREDIT LLC
By: /s/ Xxxxx Xxxxxx
-------------------------
Its: Vice President
ACKNOWLEDGED AND AGREED:
SIGNAL APPAREL COMPANY, INC.
/s/ Xxxxxx Xxxxxxxx
-------------------------------
By: Xxxxxx Xxxxxxxx
Title: Chief Financial Officer
