EXHIBIT 10.24
THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS THIRD AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment")
is made and entered into this 31st day of December, 1998, by and between
TROPICAL SPORSTWEAR INT'L CORPORATION, a Florida corporation ("Tropical"),
TROPICAL SPORTSWEAR COMPANY, INC., a Delaware corporation ("TSCI"), SAVANE
INTERNATIONAL CORP., a Texas corporation (formerly known as Farah Incorporated)
("Savane"), and APPAREL NETWORK CORPORATION, a Florida corporation ("Apparel")
(Tropical, TSCI, Savane and Apparel collectively referred to hereinafter as
"Borrowers" and individually as a "Borrower") each with its chief executive
office and principal place of business at 0000 Xxxx Xxxxxx Xxxxxx, Xxxxx,
Xxxxxxx 00000-0000; the various financial institutions listed on the signature
pages hereof and their respective successors and permitted assigns which become
"Lenders" as provided in the Loan Agreement (as defined below); 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") with an office at 000 Xxxxxxxx Xxxxxxx, X.X., Xxxxx 000,
Xxxxxxx, Xxxxxxx 00000.
Recitals:
Borrowers, Agent and Lenders, are parties to a certain Loan and
Security Agreement dated June 10, 1998, as amended by that certain First
Amendment to Loan and Security Agreement dated July 9, 1998, and that certain
Second Amendment to Loan and Security Agreement dated August 27, 1998 (as at any
time amended, the "Loan Agreement"), pursuant to which Lenders have made certain
revolving credit loans and letter of credit accommodations to Borrowers.
Borrower is currently in default under the Loan Agreement due to
Borrowers breach of the tangible net worth covenant. Borrowers have requested
that Agent and Lenders waive the existing default under the Loan Agreement and
amend the terms of the Loan Agreement to modify the tangible net worth covenant.
Agent and Lenders are willing to waive the default and amend the Loan
Agreement on the terms and conditions as hereinafter set forth.
NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good
and valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. Definitions. All capitalized terms used in this Amendment, unless
otherwise defined herein, shall have the meaning ascribed to such terms in the
Loan Agreement.
2. Amendment to Loan Agreement. The Loan Agreement is hereby amended as
follows:
(a) By deleting the definition of "Consolidated Tangible Net Worth" in
Section 1 of the Loan Agreement and by substituting the following definition in
lieu thereof:
Consolidated Tangible Net Worth - on any date of
determination, the Consolidated net worth of Borrowers on such
date as determined in accordance with GAAP, after adding
thereto the outstanding principal amount of the Senior
Subordinated Notes (not to exceed $100,000,000) and after
deducting therefrom the amount of all intangible items
reflected therein, including all unamortized debt discount and
expense, unamortized research and development expense,
unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, unamortized excess
cost of investment in Subsidiaries over equity at dates of
acquisition, and all similar items which should properly be
treated as intangibles in accordance with GAAP.
(b) By deleting Section 10.3.1 of the Loan Agreement in its entirety
and by substituting the following new Section 10.3.1 in lieu thereof:
10.3.1. Consolidated Tangible Net Worth.
Maintain, as of the end of each Fiscal Quarter, Consolidated
Tangible Net Worth of not less than the amount shown below for
the period corresponding thereto:
Period Amount
Fiscal Quarter ending $95,000,000
January 2, 1999
Fiscal Quarter ending $99,000,000
April 3, 1999
Fiscal Quarter ending $103,000,000
July 3, 1999
Each Fiscal Quarter thereafter $103,000,000
plus $4,000,000 for each
additional Fiscal Quarter
after October 1, 1999
3. Limited Waiver of Default. An Event of Default has occurred and
currently exists under the Loan Agreement as a result of Borrowers' breach of
Section 10.3.1 of the Loan Agreement (the "Designated Default"). The Designated
Default exists because of Borrowers' failure to maintain the required
Consolidated Tangible Net Worth set forth in Section 10.3.1. Each Borrower
represents and warrants that the Designated Default is the only Default or Event
of Default that exists under the Loan Agreement and the other Loan Documents as
of the date hereof. Agent and Lenders hereby waive the Designated Default in
existence on the date hereof. In no event shall such waiver be deemed to
constitute a waiver of (a) any Default or Event of Default other than the
Designated Default in existence on the date of this Amendment or (b) each
Borrower's obligation to comply with all of the terms and conditions of the Loan
Agreement and the other Loan Documents from and after the date hereof.
Notwithstanding any prior, temporary mutual disregard of the terms of any
contracts between the parties, each Borrower hereby agrees that it shall be
required strictly to comply with all of the terms of the Loan Documents on and
after the date hereof.
4. Acknowledgments and Stipulations. Each Borrower acknowledges and
stipulates that the Loan Agreement and the other Loan Documents executed by such
Borrower are legal, valid and binding obligations of such Borrower that are
enforceable against such Borrower in accordance with the terms thereof; all of
the Obligations are owing and payable without defense, offset or counterclaim
(and to the extent there exists any such defense, offset or counterclaim on the
date hereof, the same is hereby waived by each Borrower); the security interests
and liens granted by each Borrower in favor of Agent are duly perfected, first
priority security interests and liens; and the unpaid principal amount of the
Revolver Loans on and as of the close of business on December 30, 1998, totaled
$74,663,679.51.
5. Representations and Warranties. Each Borrower represents and
warrants to Agent and Lenders, to induce Agent and Lenders to enter into this
Amendment, that no Default or Event of Default exists on the date hereof; the
execution, delivery and performance of this Amendment have been duly authorized
by all requisite corporate action on the part of such Borrower and this
Amendment has been duly executed and delivered by such Borrowers; and all of the
representations and warranties made by Borrowers in the Loan Agreement are true
and correct on and as of the date hereof, except to the extent any
representation or warranty specifically relates to an earlier date.
6. Expenses of Agent. Borrowers jointly and severally agree to pay, on
demand, all costs and expenses incurred by Agent in connection with the
preparation, negotiation and execution of this Amendment and any other Loan
Documents executed pursuant hereto and any and all amendments, modifications,
and supplements thereto, including, without limitation, the reasonable costs and
fees of Agent's legal counsel and any taxes or expenses associated with or
incurred in connection with any instrument or agreement referred to herein or
contemplated hereby.
7. Effectiveness; Governing Law. This Amendment shall be effective upon
acceptance by Agent and Lenders in Atlanta, Georgia (notice of which acceptance
is hereby waived), whereupon the same shall be governed by and construed in
accordance with the internal laws of the State of Georgia.
8. Successors and Assigns. This Amendment shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns.
9. No Novation, etc.. Except as otherwise expressly provided in this
Amendment, nothing herein shall be deemed to amend or modify any provision of
the Loan Agreement or any of the other Loan Documents, each of which shall
remain in full force and effect. This Amendment is not intended to be, nor shall
it be construed to create, a novation or accord and satisfaction, and the Loan
Agreement as herein modified shall continue in full force and effect.
10. Counterparts; Telecopied Signatures. This Amendment may be executed
in any number of counterparts and by different parties to this Agreement on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the same agreement.
Any signature delivered by a party by facsimile transmission shall be deemed to
be an original signature hereto.
11. Further Assurances. Each Borrower agrees to take such further
actions as Agent and Lenders shall reasonably request from time to time in
connection herewith to evidence or give effect to the amendments set forth
herein or any of the transactions contemplated hereby.
12. Section Titles. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto.
13. Release of Claims. To induce Agent and Lenders to enter into this
Amendment, each Borrower hereby release, acquits and forever discharges Agent
and Lenders, and all officers, directors, agents, employees, successors and
assigns of Agent and Lenders, from any and all liabilities, claims, demands,
actions or causes or actions of any kind or nature (if there be any), whether
absolute or contingent, disputed or undisputed, at law or in equity, or known or
unknown, that such Borrower now has or ever had against Agent and Lenders
arising under or in connection with any of the Loan Documents or otherwise.
14. Waiver of Jury Trial. To the fullest extent permitted by applicable
law, the parties hereto each hereby waives the right to trial by jury in any
action, suit, counterclaim or proceeding arising out of or related to this
Amendment.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal and delivered by their respective duly authorized
officers on the date first written above.
BORROWERS:
ATTEST: TROPICAL SPORTSWEAR INT'L
CORPORATION
/s/ Xxxxxx X. Xxxxxx By: N. Xxxxx XxXxxxxxx
Assistant Secretary Title: Executive Vice President
[CORPORATE SEAL] Finance and Operations
ATTEST: TROPICAL SPORTSWEAR COMPANY, INC.
/s/ N. Xxxxx XxXxxxxxx
/s/ Xxxxxx X. Xxxxxx By: N. Xxxxx XxXxxxxxx
Assistant Secretary Title: Executive Vice President
[CORPORATE SEAL] Finance and Operations
ATTEST: SAVANE INTERNATIONAL CORP.
(f/k/a Farah Incorporated)
/s/ N. Xxxxx XxXxxxxxx
/s/ Xxxxxx X. Xxxxxx By: N. Xxxxx XxXxxxxxx
Assistant Secretary Title: Executive Vice President
[CORPORATE SEAL] Finance and Operations
ATTEST: APPAREL NETWORK CORPORATION
/s/ N. Xxxxx XxXxxxxxx
/s/ Xxxxxx X. Xxxxxx By: N. Xxxxx XxXxxxxxx
Assistant Secretary Title: Executive Vice President
[CORPORATE SEAL] Finance and Operations
LENDERS:
FLEET CAPITAL CORPORATION
/s/ Xxxxxxxxx X. Xxxxxx
By: Xxxxxxxxx X. Xxxxxx
Title: Senior Vice President
NATIONSBANC COMMERCIAL CORPORATION
/s/ Xxxxxx Xxxxxxx
By: Xxxxxx Xxxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
/s/ Xxxx Xxxxxx
By: Xxxx Xxxxxx
Title: Vice President
DEUTSCHE FINANCIAL SERVICES
CORPORATION
/s/ Xxxx Xxxxxxx
By: Xxxx Xxxxxxx
Title: Senior Vice President
AGENT:
FLEET CAPITAL CORPORATION,
as Agent
/s/ Xxxxxxxxx X. Xxxxxx
By: Xxxxxxxxx X. Xxxxxx
Title: Senior Vice President
