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Fourth Amendment And Forbearrance Agreement

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THIS FOURTH AMENDMENT AND FORBEARANCE AGREEMENT (this "Agreement"), dated and effective the 31/st/ day of July, 2002 (the "Effective Date"), by and among SPEIZMAN INDUSTRIES, INC., a Delaware company ("Speizman"), SPEIZMAN YARN EQUIPMENT, INC., a South Carolina company ("Speizman Yarn"), WINK DAVIS EQUIPMENT COMPANY, INC., a Georgia company ("Wink Davis"), TODD MOTION CONTROLS, INC., a North Carolina company ("Todd Motion" and together with Speizman, Speizman Yarn, Wink Davis and any future or indirect subsidiaries of Speizman or of any other entities listed above, the "Borrowers"), jointly and severally and their respective successors and assigns, and SOUTHTRUST BANK ("Lender").

R E C I T A L S :

WHEREAS, the Borrowers above entered into that certain Credit Facility Agreement, dated as of May 31, 2000 (the "Credit Agreement") with Lender for the purpose of establishing a $17,500,000 Revolving Credit Facility and a $15,000,000 Letter of Credit Facility with the Lender in favor of the Borrowers (collectively, with all other obligations owed by Borrowers to SouthTrust, the "Obligations") (all terms not otherwise defined herein shall have the meaning ascribed to it in the Credit Agreement); and

WHEREAS, the parties amended the Credit Agreement pursuant to that certain Amendment and Forbearance Agreement dated as of the 13/th/ day of November, 2000 (the "First Amendment") which was superseded by the Second Amendment as hereinafter defined; and

WHEREAS, the parties amended the Credit Agreement pursuant to that certain Second Amendment and Forbearance Agreement dated July 1, 2001 (the "Second Amendment"); and

WHEREAS, the parties amended the Credit Agreement pursuant to that certain Third Amendment and Forbearance Agreement dated February 19, 2002 (the "Third Amendment"); (the Credit Agreement, Second Amendment, and Third Amendment are collectively the "Credit Agreements"); and

WHEREAS, the Borrowers have requested the Lender to temporarily modify certain terms of the Credit Agreement and to forbear from taking remedial actions as a result of their non-compliance with certain covenants and warranties in the Credit Agreement (the "Existing Noncompliance") and to extend the Forbearance Period as set forth in the Third Amendment; and

WHEREAS, the Lender is willing to accommodate the Borrowers under the terms set forth in this Agreement; and

WHEREAS, the Lender is willing to grant the forbearance requested by the Borrowers, but only upon the terms and conditions set forth in this Agreement.

NOW, THEREFORE, the Borrowers and the Lender agree as follows:

1. Borrowers acknowledge and agree that the foregoing recitals are true, correct, and complete.

2. "Existing Noncompliance": Borrowers acknowledge that as of the date hereof, they are not in compliance with Sections 10.16, 10.17, 10.18 and 10.19 of the Credit Agreement and as set forth in Sections 4.01(a), (c) and (d) of the Second Amendment. As a result, the Lender could declare an event of default under the Credit Agreement and exercise its rights and remedies thereunder and under the related Loan Documents.

3. Except as expressly set forth herein, the terms and conditions of the Credit Agreements remain in full force and effect. This Agreement shall be a Loan Document.

4. Lender agrees that, in respect of the Existing Noncompliance, during the Forbearance Period (as defined below), Lender will not enforce or exercise any remedies available to it under the Loan Documents, and will not seek collection of the Loans from the Borrowers, except as set forth herein. As used herein, the term "Forbearance Period" means the period of time commencing on as of the date of this Agreement and ending on December 31, 2002, subject to an earlier termination of the Forbearance Period as provided in Section 6 below.

5. Interest shall continue to accrue on the principal of the Loans, as set forth in the Credit Agreement, as amended, until such principal is paid in full. During the Forbearance Period, Borrowers shall make all payments in accordance with the payment terms set forth in the respective Loan Documents.

6. Notwithstanding the provisions of Section 2 above, the Forbearance Period shall automatically terminate without further notice to the Borrowers or any other person (all notice otherwise required by the Loan Documents or otherwise being hereby waived) if (i) any case or other proceeding is instituted by or against Borrowers under any state or federal law relating to the bankruptcy or insolvency of debtors, including, without limitation, the United States Bankruptcy Code, 11 U.S.C. (S) 101 et seq.; (ii) any "Event of Default" (as defined in the Loan Documents) occurs under any of the Loan Documents other than the Existing Noncompliance; (iii) any of the acknowledgments, warranties, or representations of Borrowers set forth herein shall be untrue or inaccurate in any material respect as of the date made; or (iv) Borrowers breach, default, or failure to perform any other obligation or agreement contained in this Agreement in a material way arising to an Event of Default under the Loan Documents, including, without limitation, the failure to meet its EBITDA projections as set forth in more detail in paragraph 9.

7. During the Forbearance Period, SouthTrust can require Borrowers, at Borrowers' sole expense, to hire an independent outside consulting firm to assist Borrowers with financial reporting, soliciting alternative financing opportunities, and seeking potential investors and/or purchasers. SouthTrust shall notify Borrowers in writing of such request. Borrowers will thereafter notify SouthTrust in writing of the name and address of the consultant that Borrowers intends to hire.

8. The Credit Agreement, as amended, is hereby amended as follows:


(a) Section 3.1 of the Credit Agreement is amended to increase the
maximum principal face amount of Documentary Letters of Credit
by $2,000,000 to $6,000,000.

(b) Lender will permit no over-advancements under the Revolving
Credit Loan. Any Over-Advance Condition shall be an immediate
Event of Default hereunder.

(c) The percentage of Eligible Accounts used to determine, and as
stated in the definition of "Borrowing Base Amount" remains

(d) The Borrowing Base Certificate attached as Exhibit B to the
Second Amendment shall continue to be used by the Borrowers
with the amended percentage of Eligible Accounts set forth

9. In addition to the reports required under Section 10.1 of the Credit Agreement, as amended by the Second Amendment, the Borrowers will provide within 20 days after the end of each month, all financial information and reporting currently required under the Credit Agreement on a quarterly basis, including EBITDA calculations, on a monthly basis with financial information for the immediately proceeding month.

10. Borrowers have provided Lender month-end EBITDA projections for all months covered by the Forbearance Agreement (the "EBITDA Projections"). A copy of the EBITDA Projections are attached hereto as Exh
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