November 22, 1999
RSI Holdings, Inc.
28 East Court Street
Greenville, SC 29601
Attn: Buck A. Mickel, President
Re: Revolving Credit Line in amount of Five-hundred Thousand Dollars
($500,000.00).
Dear Mr. Mickel:
Reference is made to that certain LOAN AGREEMENT dated as of April 30, 1999 (the
"Agreement") between RSI Holdings, Inc. (the "Borrower"), MICCO Corporation (the
"Guarantor") and First Union National Bank (the "Bank"). The Agreement and all
other documents executed and delivered in connection therewith are collectively
referred to herein as the "Loan Documents". All capitalized terms used but not
defined herein shall have the meanings assigned in the Loan Documents.
The Agreement provides:
TANGIBLE NET WORTH. Borrower shall at all times maintain a Tangible Net Worth of
at least One Thousand Dollars and No Cents ($1,000.00). ). "Tangible Net Worth"
shall mean total assets minus total liabilities. For purposes of this
computation, the aggregate amount of any intangible assets of Borrower including
without limitation, goodwill, franchises, licenses, patents, trademarks, trade
names, copyrights, service marks, and brand names, shall be subtracted from
total assets, and total liabilities shall include subordinated debt.
The Bank has determined that the Borrower has violated the above-referenced
provision due to the following: Failure to maintain the required Minimum
Tangible Net Worth of at least One Thousand Dollars and No Cents ($1,000.00). At
Borrower's fiscal year end August 31, 1999, Borrower's Tangible Net Worth is
reported to be negative Fifty-four Thousand Dollars (-$54,000.00).
The Borrower has requested the Bank's waiver, and the Bank does hereby waive the
Borrower's default under this provision, subject to Borrower's execution of and
return of this letter. This waiver is limited to the default recited above, as
of Borrower's fiscal year end 1999, and shall not be construed to be a waiver of
any subsequent default under the referenced provision, or of any existing or
future defaults under any other provision of any Loan Document.
The Borrower, by signature below, represents and warrants that there exist no
defaults or event of default under the Loan Documents other than those
specifically waived herein, that the Loan Documents are in full force and
effect, and that Borrower does not have any defenses to its obligations under
the Loan Documents nor any claims against Bank.
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Please evidence your acceptance of the terms of this waiver by signing and
returning to the Bank a copy of this letter bearing original authorized
signature of each of the parties indicated.
Very Truly Yours,
FIRST UNION NATIONAL BANK
BY: /s/ Brian W. English
-------------------------------
Brian W. English
Vice President and Portfolio Manager
ACCEPTED AND AGREED TO:
RSI Holdings, Inc.
By: /s/ Buck A. Mickel
----------------------
Buck A. Mickel
President & CEO
Date: 11/24/99
ACKNOWLEDGED:
MICCO Corporation, Guarantor
By: /s/ Buck A. Mickel
-------------------------
Buck A. Mickel
Vice President
Date: 11-24-99
cc: Joseph F. Ogburn, Treasurer, RSI Holdings, Inc.
Charles Cecil, SVP, First Union National Bank
David Sheinutt, SVP, First Union National Bank
