EX-10.49 AMENDMENT NO.1 TO MASTER SECURITY

Contract Categories: Business Finance - Security Agreements
EX-10.49 5 g88347exv10w49.txt EX-10.49 AMENDMENT NO.1 TO MASTER SECURITY EXHIBIT 10.49 [CIT LOGO] EQUIPMENT RENTAL AND FINANCE - US 1540 W. FOUNTAINHEAD PKWY. TEMPE, AZ 85282 February 24, 2004 Avondale Mills, Inc. 506 South Broad Street Monroe, GA 30655-2172 Attention: Jack R. Altherr, Jr. Re: Amendment #1: Financial Reports and Covenant Rider (the "Rider") to Master Security Agreement (the "Agreement") dated July 30, 2002 between Avondale Mills, Inc. as Debtor, and The CIT Group/Equipment Financing, Inc. as Secured Party. Mr. Altherr: Debtor has notified Secured Party that Debtor will fail to comply with the Fixed Charge Coverage ratio, and the Consolidated Adjusted Tangible Net Worth covenant under the Rider to the Agreement, during the fiscal years of 2004 and 2005, which failure would result in an Event of Default under Section 9(b) of the Agreement. Secured Party agrees to amend the Fixed Charge Coverage ratio, and the Consolidated Adjusted Tangible Net Worth covenant as follows:
FIXED CHARGE MINIMUM TANGIBLE COVERAGE NET WORTH ------------------------------------- ------------------------------------- CURRENT PROPOSED CURRENT PROPOSED ----------------- ------------------- ---------------------- ------------ FY 2004 1ST QUARTER 1.50 1.50 $ 100,000 $ 100,000 2ND QUARTER 1.50 1.25 100,000 100,000 3RD QUARTER 1.50 1.00 100,000 90,000 4TH QUARTER 1.50 1.00 100,000 85,000 FY 2005 1ST QUARTER 1.50 1.00 100,000 80,000 2ND QUARTER 1.50 1.00 100,000 75,000 3RD QUARTER 1.50 1.25 100,000 75,000 4TH QUARTER 1.50 1.50 100,000 75,000
Provided, however, (i) the amendments set forth in this letter shall not constitute an amendment of any other covenant, or of any other Event of Default or event which with notice or the passage of time or both would be an Event of Default under the Agreement, (ii) the Agreement shall remain in full force and effect, and unchanged except as set forth in this letter amendment and (iii) notwithstanding the amendment of the Fixed Charge Coverage ratio and the Consolidated Adjusted Tangible Net Worth covenant in this letter, Debtor is hereby advised that the Secured Party shall demand strict compliance by the Debtor with the terms of the Agreement at all times and the Secured Party reserves all rights and remedies with respect thereto. The effectiveness of this amendment shall be subject to the Secured Party's receipt of a $40,000.00 amendment fee. Please indicate your agreement with the foregoing by executing this letter and returning it to the undersigned with the amendment fee no later than March 12, 2004. THE CIT GROUP/EQUIPMENT FINANCING, INC. By: ------------------------------ Title: Credit Analyst AGREED TO: Debtor : Avondale Mills, Inc. By ------------------------------ Title --------------------------- Guarantor : Avondale Incorporated By ------------------------------ Title ---------------------------