EXHIBIT 10.37
June 25, 2001
Tropical Sportswear Int'l Corporation
0000 Xxxx Xxxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000-0000
Re: Fleet Capital Corporation, as Agent -- Tropical Sportswear Int'l Corporation
and its affiliates
Ladies and Gentlemen:
Reference is hereby made to that certain Loan and Security Agreement dated June 10, 1998 (as amended,
the "Loan Agreement"), by and among TROPICAL SPORSTWEAR INT'L CORPORATION, a Florida corporation ("Tropical"),
TROPICAL SPORTSWEAR COMPANY, INC., a Delaware corporation, SAVANE INTERNATIONAL CORP., a Texas corporation,
APPAREL NETWORK CORPORATION, a Florida corporation, TSI BRANDS, INC., a Delaware corporation, and TSIL, INC., a
Delaware corporation (collectively referred to herein as "Borrowers" and individually as a "Borrower"); various
financial institutions from time to time lenders thereunder ("Lenders"); and FLEET CAPITAL CORPORATION, a Rhode
Island corporation, in its capacity as collateral and administrative agent for the Lenders (together with its
successors in such capacity, "Agent"). Unless otherwise defined herein, all capitalized terms used herein shall
have the meanings ascribed to such terms in the Loan Agreement.
Borrowers have informed Agent and Lenders that Tropical desires to acquire the stock of Duck Head
Apparel Company, Inc. ("Duckhead"), a Georgia corporation pursuant to the terms of a certain draft Agreement and
Plan of Merger (the "Merger Agreement") among Duck Head, Tropical and HB Acquisition Corp. ("Acquisition Sub"), a
Georgia corporation and a wholly-owned Subsidiary of Tropical (hereinafter, the "Duck Head Acquisition").
Subject to the satisfaction of each of the Consent Conditions as set forth below, Agent and Lenders consent to
the Duck Head Acquisition and agree that the Duck Head Acquisition will not constitute an Event of Default under
(or as defined in) the Loan Agreement.
For purposes hereof, the term "Consent Conditions" shall mean each of the following conditions, the
satisfaction of each of which shall be acceptable to Agent and Lenders in all respects: (a) the business being
acquired complies with Section 10.2.14 of the Loan Agreement; (b) immediately before and after giving effect to
the Duck Head Acquisition, no Event of Default shall have occurred and be continuing or would result therefrom;
(c) the Duck Head Acquisition does not involve the incurrence of Debt for Money Borrowed (as defined below) by
Borrowers other than Revolver Loans; (d) immediately before and after giving effect to the Duck Head Acquisition,
Borrowers shall have a minimum Availability of at least $10,000,000, provided that no Accounts or Inventory
acquired by Borrowers in connection with the Duck Head Acquisition shall be deemed Eligible Accounts or Eligible
Inventory for purposes of determining Availability for purposes of this definition; (e) the purchase price for
the Duck Head Acquisition shall not exceed (i) $16,500,000 in cash and (ii) $4,720,000 in assumed Debt for
Borrowed Money, which debt, if secured, shall only be secured by a lien on certain real property of Duck Head
that is located in Winder, Georgia (the "Winder Real Property Lien"), (f) prior to the consummation of the Duck
Head Acquisition, Borrowers shall have delivered to Agent UCC-1 financing statements and any other appropriate
documentation to perfect or continue the perfection of Agent's Liens with respect to any and all assets acquired
by any Borrower; (g) any assets acquired by any Borrower in connection with the Duck Head Acquisition shall not
be subject to any Liens other than Permitted Liens and the Winder Real Property Lien; (h) if requested by Agent
and Lenders, Acquisition Sub and Duck Head shall have guaranteed the payment in full of Borrowers' Obligations to
Agent and Lenders, shall have executed a Joinder Agreement and shall have executed and delivered to Agent and
Lenders such other agreements, instruments or documents required by Agent and Lenders in their sole discretion;
(i) Borrowers shall have delivered to Agent Projections on a pro forma basis for the forthcoming 3 Fiscal Years,
year by year and for the forthcoming Fiscal Year, on a quarterly basis, showing that, after giving effect to the
Duck Head Acquisition, Borrowers will have Consolidated Cash Flow in an amount satisfactory to Agent and Lenders
in their sole discretion; (j) the use of any proceeds of Loans made in connection with the Duck Head Acquisition
shall not violate Regulation U; and (k) Agent and Lenders shall have reviewed and found acceptable in all
respects the final executed Merger Agreement and all exhibits, schedules and disclosure memoranda attached
thereto or delivered in connection therewith and the transactions described in the Merger Account shall have been
consummated in compliance with all Applicable Law.
For purposes hereof, "Debt for Money Borrowed" shall mean as applied to any Person, (i) Debt arising
from the lending of money by any other Person to such Person; (ii) Debt, whether or not in any such case arising
from the lending of money by another Person to such Person, (A) which is represented by notes payable or drafts
accepted that evidence extensions of credit, (B) which constitutes obligations evidenced by bonds, debentures,
notes or similar instruments, or (C) upon which interest charges are customarily paid (other than accounts
payable) or that was issued or assumed as full or partial payment for Property; (iii) Debt that constitutes a
Capitalized Lease Obligation; (iv) reimbursement obligations with respect to letters of credit or guaranties of
letters of credit; and (v) Debt of such Person under any guaranty of obligations that would constitute Debt for
Money Borrowed under clauses (i) through (iii) hereof, if owed directly by such Person.
Tropical Sportswear Int'l Corporation
June 25, 2001
Page 1
By its signature below, each Borrower ratifies and reaffirms all of its obligations under the Loan
Agreement and other Loan Documents and acknowledges and agrees that except to the extent of Agent's and Lenders'
express agreements herein, nothing herein shall be construed to be a waiver, modification or release of any
provision of the Loan Documents, each of which shall remain in full force and effect. Nothing herein is intended
to be, nor shall it be construed to create, a novation or an accord and satisfaction.
By their signatures below, Agent and each Lender hereby waives the requirement contained in clause (f)
of the deifnition of "Permitted Business Acquisition" for the delivery of at least thirty Business Days prior
written notice of the Duck Head Acquisition.
This letter agreement shall be effective upon signature by Agent and Lenders, whereupon the same shall
be governed and interpreted in accordance with the internal laws of the State of Georgia.
This letter agreement may be executed in any number of counterparts and by different parties hereto and
separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all
such counterparts taken together shall constitute but one and the same instrument. Any signature delivered by a
party by facsimile transmission shall be deemed to be an original signature hereto.
AGENT:
FLEET CAPITAL CORPORATION,
as Agent
By: /s/ Xxxxxx Xxxxx
Title: SVP
LENDERS:
FLEET CAPITAL CORPORATION
By: /s/ Xxxxxx Xxxxx
Title: SVP
[Signatures continued on following page]
BANK OF AMERICA, N.A.
By: /s/ Xxxxx X. Xxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ Xxxx X. Xxxxxxx
Title: Vice President
GMAC COMMERCIAL CREDIT LLC
By: /s/ Xxxxxx X. Xxxxxx
Title: Executive Vice President
BORROWERS:
---------
ATTEST: TROPICAL SPORTSWEAR INT'L CORPORATION
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx Xxxxx
Assistant Secretary
[CORPORATE SEAL] Title: Executive Vice President
[Signatures continued on following page]
ATTEST: TROPICAL SPORTSWEAR COMPANY, INC.
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx Xxxxx
Assistant Secretary
[CORPORATE SEAL] Title: Executive Vice President
ATTEST: SAVANE INTERNATIONAL CORP.
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx Xxxxx
Assistant Secretary
[CORPORATE SEAL] Title: Executive Vice President
ATTEST: APPAREL NETWORK CORPORATION
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx Xxxxx
Assistant Secretary
[CORPORATE SEAL] Title: Executive Vice President
ATTEST: TSI BRANDS, INC.
/s/ Xxxx X. Xxxxxx By: /s/ N. Xxxxx XxXxxxxxx
Assistant Secretary
[CORPORATE SEAL] Title: Executive Vice President
ATTEST: TSIL, INC.
/s/ Xxxx X. Xxxxxx By: /s/ N. Xxxxx XxXxxxxxx
Assistant Secretary
[CORPORATE SEAL] Title: Executive Vice President
