FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
- --------------------------------------------------------------------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JANUARY 1, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____ TO _____
COMMISSION FILE NO. 0-8544
SPEIZMAN INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 56-0901212
------------------------------ -------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
701 GRIFFITH ROAD 28217
------------------------------ -------------------
CHARLOTTE, NORTH CAROLINA (ZIP CODE)
------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(704) 559-5777
--------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
--------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF
CHANGED SINCE LAST REPORT)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
OUTSTANDING AT
CLASS OF COMMON STOCK FEBRUARY 8, 2000
--------------------- ----------------
Par value $.10 per share 3,250,928
Page 1
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SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
PAGE NO.
--------
PART I. FINANCIAL INFORMATION:
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets....................... 3 - 4
Consolidated Condensed Statements of Operations............. 5
Consolidated Condensed Statements of Cash Flows............. 6
Notes to Consolidated Condensed Financial Statements........ 7 - 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................ 9 - 12
PART II. OTHER INFORMATION:
Item 6. Exhibits and reports on Form 8-K..................... 13
Page 2
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
<S> <C> <C>
January 1, July 3,
2000 1999
------------ ------------
(Unaudited) (Unaudited)
ASSETS
CURRENT:
Cash and cash equivalents $ 520,867 $ 642,167
Accounts receivable, less allowances of
$651,372 and $646,316 24,358,792 21,138,563
Inventories 21,472,451 16,360,366
Prepaid expenses and other current assets 3,978,016 6,140,919
------------ ------------
TOTAL CURRENT ASSETS 50,330,126 44,282,015
------------ ------------
PROPERTY AND EQUIPMENT:
Building and leasehold improvements 4,423,336 4,449,204
Machinery and equipment 1,279,392 1,610,559
Furniture, fixtures and transportation equipment 1,752,294 1,726,918
------------ ------------
Total 7,455,022 7,786,681
Less accumulated depreciation and amortization (1,936,247) (1,972,975)
------------ ------------
NET PROPERTY AND EQUIPMENT 5,518,775 5,813,706
------------ ------------
OTHER LONG-TERM ASSETS 843,402 689,902
INTANGIBLES, NET OF ACCUMULATED AMORTIZATION 5,450,410 5,670,410
------------ ------------
$ 62,142,713 $ 56,456,033
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 3
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
<S> <C> <C>
January 1, July 3,
2000 1999
------------ ------------
(Unaudited) (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable - bank line of credit $ 9,100,000 $ 4,900,000
Accounts payable 16,587,577 15,069,201
Customers' deposits 3,407,719 5,280,271
Accrued expenses 2,541,000 1,434,229
Current maturities of long-term debt 1,542,941 1,540,273
------------ ------------
TOTAL CURRENT LIABILITIES 33,179,237 28,223,974
Long-term debt 3,040,000 3,800,000
Obligation under capital lease 1,843,318 1,855,341
------------ ------------
TOTAL LIABILITIES 38,062,555 33,879,315
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock - par value $.10; authorized 20,000,000
shares, issued 3,391,728 and outstanding 3,250,928;
and issued 3,369,506, outstanding 3,228,706 339,173 336,951
Additional paid-in capital 13,043,663 12,935,886
Retained earnings 11,284,145 9,890,704
------------ ------------
Total 24,666,981 23,163,541
Treasury stock, at cost, 140,800 shares (586,823) (586,823)
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 24,080,158 22,576,718
------------ ------------
$ 62,142,713 $ 56,456,033
============ ============
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 4
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C>
(Unaudited) (Unaudited)
For the Three Months Ended For the Six Months Ended
---------------------------- ----------------------------
01-01-00 01-02-99 01-01-00 01-02-99
(13 Weeks) (13 Weeks) (26 Weeks) (27 Weeks)
------------ ------------ ------------ ------------
REVENUES $ 32,888,309 $ 28,211,079 $ 60,439,975 $ 48,676,720
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Cost of sales 26,430,964 24,449,934 48,998,371 41,438,836
Selling expenses 2,354,885 1,849,365 4,502,236 3,656,720
General and administrative
expenses 2,051,011 2,039,395 3,847,354 3,769,780
------------ ------------ ------------ ------------
Total costs and expenses 30,836,860 28,338,694 57,347,961 48,865,336
------------ ------------ ------------ ------------
2,051,449 (127,615) 3,092,014 (188,616)
NET INTEREST EXPENSE 402,783 266,901 789,573 497,746
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE
TAXES ON INCOME 1,648,666 (394,516) 2,302,441 (686,362)
TAXES (BENEFIT) ON
INCOME 646,000 (158,000) 909,000 (268,000)
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 1,002,666 $ (236,516) $ 1,393,441 $ (418,362)
============ ============ ============ ============
Basic earnings (loss) per share $ 0.31 $ (0.07) $ 0.43 $ (0.12)
Diluted earnings (loss) per share 0.30 (0.07) 0.42 (0.12)
Weighted average shares
Outstanding:
Basic 3,240,916 3,274,381 3,234,811 3,293,369
Diluted 3,304,404 3,274,381 3,297,313 3,293,369
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 5
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
<S> <C>
(Unaudited)
--------------------------
For the Six Months Ended
--------------------------
01-01-00 01-02-99
(26 Weeks) (27 Weeks)
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 1,393,441 $ (418,362)
Adjustments to reconcile net income (loss) to cash used
by operating activities:
Depreciation and amortization 661,746 623,960
Provision for inventory obsolescence 301,190 150,000
Gain on disposal of assets (5,715) (321)
(Increase) decrease in:
Accounts receivable (3,220,229) (3,978,968)
Inventories (5,413,275) (1,592,810)
Prepaid expenses and other current assets 2,162,903 (615,477)
Other assets (153,500) (630,765)
Increase (decrease) in:
Accounts payable 1,518,376 4,487,901
Accrued expenses and customers' deposits (765,781) 775,165
----------- -----------
Net cash used in operating activities (3,520,844) (1,199,677)
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (147,374) (211,012)
Proceeds on sale of assets 6,274 10,500
----------- -----------
Net cash used in investing activities (141,100) (200,512)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on line of credit agreement 4,200,000 1,350,000
Principal payments on long-term debt (769,355) (1,590,000)
Issuance of common stock for stock options 109,999 --
Purchase of treasury stock -- (188,590)
----------- -----------
Net cash provided by (used in) financing activities 3,540,644 (428,590)
----------- -----------
NET DECREASE IN CASH (121,300) (1,828,779)
CASH AND CASH EQUIVALENTS at beginning of period 642,167 2,193,329
----------- -----------
CASH AND CASH EQUIVALENTS at end of period $ 520,867 $ 364,550
=========== ===========
Supplemental Disclosures:
Cash paid during period for:
Interest $ 744,802 $ 548,902
Income taxes 432,900 313,850
</TABLE>
See accompanying notes to consolidated condensed financial statements.
Page 6
<PAGE>
SPEIZMAN INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
Note 1. Management Statement re Adjustments
In the opinion of management, the accompanying unaudited consolidated
financial statements contain all adjustments necessary to present the
Registrant's financial position, the results of operations and
changes in cash flow for the periods indicated.
The accounting policies followed by the Registrant are set forth on
page F-6 of the Registrant's Form 10-K for the fiscal year ended July
3, 1999, which is incorporated by reference.
Note 2. Inventories
Inventories consisted of the following:
January 1, July 3,
2000 1999
----------- -----------
(Unaudited) (Unaudited)
Machines $15,311,273 $10,262,358
Parts and supplies 6,161,178 6,098,008
----------- -----------
Total $21,472,451 $16,360,366
=========== ===========
Note 3. Taxes on Income
Taxes on income are allocated to interim periods on the basis of an
estimated annual effective tax rate.
Note 4. Net Income (Loss) Per Share
Basic net income per share includes no dilution and is calculated by
dividing net income by the weighted average number of common shares
outstanding for the period. Diluted net income per share reflects the
potential dilution of securities that could share in the net income
of the Company which consists of stock options (using the treasury
stock method). In a period with a net loss, the weighted average
shares outstanding will be the same.
Note 5. Intangibles
Goodwill is calculated as the excess cost of purchased businesses
over the value of their underlying net assets and is being amortized
on a straight-line basis over fifteen years.
Page 7
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Note 6. Subsequent Event
In February 2000, Speizman Industries and Fratelli Marzoli & C. SpA
agreed to a settlement agreement terminating the Company's exclusive
distribution rights in North America of new Marzoli yarn processing
equipment, related parts and service. The Company had represented
this line since August 1998. Because of low margins and high
installation costs of new equipment, loss of this product line is not
expected to have an adverse impact on future earnings. For the
seventeen months Speizman represented Marzoli, the product line
generated approximately $7.9 million of revenue and a net loss before
tax of approximately $350,000.
The Company is maintaining a presence in the yarn processing industry
with used equipment sales and distribution agreements with other
suppliers of yarn processing equipment.
Page 8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
Speizman Industries, Inc. and subsidiaries (collectively the "Company") is a
major distributor operating through four companies: Speizman Industries, Inc.
("Speizman" or "Speizman Industries"), Wink Davis Equipment Co., Inc. ("Wink
Davis"), Todd Motion Controls, Inc. ("TMC"), and Speizman Yarn Equipment, Inc.
("Speizman Yarn"). Speizman distributes sock knitting machines, other knitting
equipment and related parts. Wink Davis sells commercial and industrial laundry
equipment, including the distribution of machines and parts as well as
installation and after sales service. TMC manufactures automated boarding,
finishing and packaging equipment used in the sock knitting industry. TMC's
products are sold through Speizman's distribution network. Speizman Yarn
distributes equipment used in the yarn processing industry.
RESULTS OF OPERATIONS
Revenues increased by approximately $4.7 million in the Company's second fiscal
quarter of the current year as compared to the same period of the prior year.
Revenues of knitted fabric equipment, which includes ladies seamless equipment,
increased by $9.7 million. Revenues of Wink Davis, which includes laundry
equipment, parts and services, increased by $2.2 million. Hosiery equipment
revenues decreased by approximately $3.2 million. Revenues for yarn processing
equipment also declined by about $3.6 million.
For the six-month period ended January 1, 2000, revenues increased by about
$11.8 million over the same six-month period of the prior fiscal year. Similar
to the quarterly changes, revenues increased by $16.3 million and $3.9 million
in knitted fabric and laundry products, respectively. Revenues of hosiery
machinery and yarn processing equipment decreased by $6.3 million and $2.0
million, respectively.
In the second quarter, cost of sales as a percentage of sales decreased to 80.4%
as compared to 86.7% for the same period of the prior year. For the year to date
cost of sales as a percentage of sales has decreased to 81.1% from 85.1%. These
favorable decreases are directly attributable to the change in product mix.
Margins for knitted fabric equipment remain favorable due to strong demand.
Conversely, margins for hosiery equipment were lower due to lower overall volume
and lessened demand directly attributable to anticipated future orders for
closed toe equipment.
Selling expenses in the second quarter of fiscal 2000 were approximately $2.4
million, an increase of about $505,000 over the same quarter of the prior year.
For the six-month period ending January 1, 2000, selling expenses increased to
about $4.5 million as compared to approximately $3.7 million for the previous
year. The increases are primarily due to higher salaries, commissions and
bonuses related to increased overall sales.
Page 9
<PAGE>
For the quarter and six-month period ending January 1, 2000, general and
administrative expenses were not significantly changed from comparable periods
of the prior year. Increased bonus expenses in fiscal 2000 have been
substantially offset by lower bad debt expenses.
Interest expense is shown net of interest income. Net interest expense increased
to approximately $403,000 and $790,000 in the current quarter and current fiscal
year, respectively. The increases of $136,000 and $292,000, respectively, were
due primarily to higher borrowings on the bank line of credit and interest
expense on the obligation under capital lease for the Company's new main
facilities.
Net income for the second quarter was $1,003,000 or $0.31 per share basic and
$0.30 per share diluted, as compared to a net loss of $237,000 or $0.07 per
share basic and diluted for the comparable period last year. Year to date net
income totaled approximately $1,393,000 or $0.43 per share basic and $0.42 per
share diluted. Last year for the six-month period, the net loss was $418,000 or
$0.12 per share basic and diluted.
OUTLOOK
Deliveries of knitted fabric equipment, primarily Santoni equipment for
producing ladies' seamless garments have been very strong for two quarters. The
Company has had some decrease for new orders of this equipment as the market
absorbs the latest deliveries and remaining equipment on back order for future
delivery. Demand for hosiery knitting equipment is generally weak due to
anticipated development of closed toe equipment. Initial deliveries of this
product are projected for later in the current fiscal year. The Company has
distribution agreements with other manufacturers of equipment used in the yarn
processing industry and continues to pursue other profitable agreements. The
demand for laundry equipment and services is substantially unchanged from prior
quarters.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital at January 1, 2000 was $17.2 million as compared
to $16.1 million at the end of the prior fiscal year. Over that same period, the
current ratio decreased to 1.52 from 1.57.
Operating activities used about $3.5 million for the six-month period ending
January 1, 2000 as compared to a usage of $1.2 million for the comparable period
of the prior fiscal year. Primary reasons for the usage of cash are increases in
accounts receivable and inventories offset partially by decreases in prepaid and
other current assets and increases in accounts payable.
Investing activities were minimal, using approximately $141,000.
For the first two quarters of fiscal 2000, financing activities provided
approximately $3.5 million. The primary source of financing in this period was
borrowings on the Company's line of credit.
Page 10
<PAGE>
SEASONALITY AND OTHER FACTORS
There are certain seasonal factors that may affect the Company's business.
Traditionally, manufacturing businesses in Italy close for the month of August,
and the Company's hosiery customers close for one week in July. Consequently, no
shipments or deliveries, as the case may be, of machines distributed by the
Company that are manufactured in Italy are made during these periods which fall
in the Company's first quarter. In addition, manufacturing businesses in Italy
generally close for two weeks in December, during the Company's second quarter.
Fluctuations of customer orders or other factors may result in quarterly
variations in net revenues from year to year.
EFFECTS OF INFLATION AND CHANGING PRICES
Management believes that inflation has not had a material effect on the
Company's operations.
DISCLOSURE ABOUT FOREIGN CURRENCY RISK
Generally, the Company's purchases of foreign manufactured machinery for resale
are denominated in Italian lira. In the ordinary course of business, the Company
enters into foreign exchange forward contracts to mitigate the effect of foreign
currency movements between the Italian lira and the U.S. dollar from the time of
placing the Company's purchase order until final payment for the purchase is
made. The contracts have maturity dates that do not generally exceed 12 months.
Substantially all of the increase or decrease of the lira denominated purchase
price is offset by the gains and losses of the foreign exchange contract. The
unrealized gains and losses on these contracts are deferred and recognized in
the results of operations in the period in which the hedged transaction is
consummated.
A substantial portion of the Company's textile machine and spare part purchases
are denominated and payable in Italian lira. Currency fluctuations of the lira
could result in substantial price level changes and therefore impede or promote
import/export sales and substantially impact profits. However, to reduce
exposure to adverse foreign currency fluctuations during the period from
customer orders to payment for goods sold, the Company enters into forward
exchange contracts. The Company is not able to assess the quantitative effect
that such currency fluctuations could have upon the Company's operations. There
can be no assurance that fluctuations in foreign currency exchange rates will
not have a significant adverse effect on future operations.
NOTE REGARDING PRIVATE SECURITIES LITIGATION REFORM ACT
Statements made by the Company which are not historical facts are forward
looking statements that involve risks and uncertainties. Actual results could
differ materially from those expressed or implied in forward-looking statements.
All such forward-looking statements are subject to the safe harbor created by
the Private Securities Litigation Reform Act of 1995. Important factors that
could cause financial performance to differ materially from past results and
from those expressed and implied in this document include, without limitation,
the risks of acquisition of businesses (including limited knowledge of the
businesses acquired and misrepresentations by
Page 11
<PAGE>
sellers) availability of financing, competition, management's ability to manage
growth, loss of customers, and a variety of other factors.
YEAR 2000 COMPLIANCE
As of the date of filing of this Form 10-Q, the Company has experienced no
material impact to its business, including suppliers' and customers' operations,
performance of electronic components of equipment distributed by the Company, or
other parties. The Company will continue to monitor operations for possible
issues related to Y2K.
Page 12
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits:
10(a). 1999 Fifth Amendment Agreement to $37,000,000
Amended and Restated Loan Agreement and
Term Note dated as of October 29, 1999
10(b). 1999 Sixth Amendment Agreement to $37,000,000
Amended and Restated Loan Agreement and
Term Note dated as of November 16, 1999
10(c). 2000 First Amendment Agreement to $37,000,000
Amended and Restated Loan Agreement and
Term Note dated as of January 26, 2000
10(d). Termination Letter of Distributor Agreement between
the Company and Marzoli dated December 16, 1999
27 Financial Data Schedule
(b) Reports on Form 8-K:
None.
Page 13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SPEIZMAN INDUSTRIES, INC.
(Registrant)
Date: February 15, 2000 /s/ Robert S. Speizman
--------------------------- -----------------------------------
Robert S. Speizman
President
Date: February 15, 2000 /s/ James H. McCorkle, III
--------------------------- -----------------------------------
James H. McCorkle, III
Secretary-Treasurer
(Chief Financial Officer)
Page 14
EXHIBIT 10(A)
1999 FIFTH AMENDMENT AGREEMENT TO
$37,000,000 AMENDED AND RESTATED LOAN AGREEMENT AND TERM NOTE
THIS AMENDMENT AGREEMENT, made and entered into as of this 29th day of
October, 1999, by and between SPEIZMAN INDUSTRIES, INC., a Delaware corporation
(the "Borrower"), WINK DAVIS EQUIPMENT CO., INC., a Georgia corporation ("WD"),
TODD MOTION CONTROLS, INC., a North Carolina corporation ("TMC") and BANK OF
AMERICA, N.A. d/b/a NATIONSBANK, N.A., successor to NATIONSBANK, N.A., a
national banking association (the "Lender");
W I T N E S S E T H:
-------------------
WHEREAS, pursuant to the $37,000,000 Amended and Restated Loan
Agreement dated as of July 31, 1997 between Borrower and Lender, as amended by
1998 First Amendment Agreement thereto dated as of February 6, 1998, 1998 Second
Amendment Agreement dated as of December 30, 1998, 1999 First Amendment
Agreement thereto dated as of May 17, 1999, 1999 Second Amendment Agreement
thereto dated as of August 27, 1999, and 1999 Third Amendment Agreement thereto
dated as of September 27, 1999, and 1999 Fourth Amendment Agreement thereto
dated as of September 30, 1999, among the Borrower, WD, TMC and the Lender
(collectively the "Loan Agreement"), arrangements were made for the extension by
the Lender to the Borrower of credit on the terms and conditions set forth in
such Loan Agreement;
WHEREAS, under the Loan Agreement, the Borrower obtained a Credit
Facility in the maximum aggregate principal amount at any time outstanding of up
to $37,000,000, of which (i) up to $30,000,000 may be allocated under a "Letter
of Credit Facility" for the issuance of documentary Letters of Credit to support
the Borrower's purchase and importing of (x) presold textile machinery in the
ordinary course of its business and (y) in certain cases, equipment to be held
as inventory for sale and, within such $30,000,000, up to $8,500,000, as
temporarily increased to $11,500,000, may be allocated to borrowings for the
Borrower's short term operating needs under a Revolving Line of Credit, and up
to $500,000 may be allocated for the issuance of Standby Letters of Credit, as
provided in such Loan Agreement, and (ii) up to $7,000,000, as subsequently
increased to $8,050,000 by Note Modification Agreement dated February 6, 1998,
may be allocated as a term loan, all upon the terms and conditions provided in
the Loan Agreement;
WHEREAS, under the Loan Agreement, the Borrower has issued to the
Lender its Amended and Restated Revolving Credit Note dated July 31, 1997 in the
principal amount of $8,500,000 (the "Revolving Credit Note"), as modified by
Note Modification Agreement dated August 27, 1999 and Note Modification
Agreement dated September 27, 1999;
WHEREAS, under the Loan Agreement, the Borrower has issued to the
Lender its Term Note dated July 31, 1997 in the original principal amount of
$7,000,000, as subsequently
<PAGE>
increased to $8,050,000 by Note Modification Agreement dated February 6, 1998
(the "Term Note");
WHEREAS, collateral for the indebtedness and obligations of the
Borrower in respect of the Loan Agreement, the Revolving Credit Note and the
Letter of Credit Facility is provided under the Amended and Restated Security
Agreement dated July 31, 1997 between the Borrower, WD and the Lender and a
Security Agreement dated as of February 6, 1998 between TMC and the Lender
(collectively, the "Security Agreement");
WHEREAS, the Borrower has requested that the Lender agree to certain
modifications to the Loan Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and conditions herein set forth, it is hereby agreed as follows:
1. Terms. All terms used herein without definition, unless the context
clearly requires otherwise, shall have the meanings provided therefor in the
Loan Agreement.
2. Amendment to Loan Agreement.
(A) Section 1.12 of the Loan Agreement (entitled "Borrowing
Base") is rewritten to read as follows:
"1.12. "Borrowing Base" means the sum as of the date
of determination of (i) Eligible Accounts multiplied by 80%
and (ii) Eligible Inventory multiplied by 30%, and (iii) L/C
Credit multiplied by 50%, and (iv) Cash Collateral multiplied
by 100% and (v) if such date of determination occurs between
the period August 12, 1999 and December 15, 1999, $2,000,000,
all determined pursuant to the Borrowing Base Certificate."
(B) Section 2.4(b)(iv) of the Loan Agreement is hereby amended
to read as follows:
"(iv) Notwithstanding the foregoing, the Committed
Amount shall be $10,000,000 during the period August 12, 1999
to September 17, 1999 and $11,500,000 during the period
September 18, 1999 to December 15, 1999, subject to such
permanent reductions as may be required hereunder during such
period. At December 16, 1999 and thereafter, the Committed
Amount shall be permanently reduced to $6,000,000, less any
other permanent reductions which may otherwise be required
hereunder."
3. Representations and Warranties. Each of the Borrower, WD and TMC
hereby jointly and severally represents and warrants that:
(A) The representations and warranties contained in Article V
of the Loan Agreement are hereby made by the Borrower on and as of the
date hereof except the
2
<PAGE>
representations of Sections 5.3 and 5.4 shall refer to the most recent
financial statements delivered under Section 7.1 of the Loan Agreement.
(B) There has been no material change, and there exists no
known prospective change, in the condition, financial or otherwise, of
the Borrower, WD or TMC since the date of the most recent financial
reports received by the Lender, other than changes in the ordinary
course of business, none of which has been a materially adverse change;
(C) The business and properties of the Borrower, WD or TMC are
not, and since the date of the most recent financial reports thereof
received by Lender have not, been materially adversely affected as the
result of any fire, explosion, earthquake, chemical spill, accident,
strike, lockout, combination of workmen, flood, embargo, riot, or
cancellation or loss of any major contracts;
(D) No event has occurred and no condition exists which,
either prior to or upon the consummation of the transactions
contemplated hereby, constitutes an Event of Default under the Loan
Agreement, either immediately or with the lapse of time or the giving
of notice, or both;
(E) The property which is collateral for the indebtedness of
the Borrower, WD or TMC to the Lender under the Security Agreement and
other collateral documents of the Borrower, WD or TMC in favor of the
Lender are subject to no liens or encumbrances except Permitted Liens;
(F) The execution, delivery and performance by the Borrower,
WD or TMC of its obligations under this Amendment Agreement will not
cause a violation or default under any indenture, loan agreement, or
other agreement of, or applicable to, the Borrower, WD or TMC; and
(G) Each of the Borrower, WD and TMC has the requisite
corporate power and authority to execute, deliver and perform this
Amendment Agreement; each of such documents has been duly authorized,
executed and delivered; and each of such documents constitutes a valid,
binding and enforceable instrument, obligation or agreement of the
Borrower, WD or TMC, in accordance with its respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement
of creditors' rights generally.
4. Effectiveness of Documents. The terms and conditions hereof shall
not be effective until each of the following are delivered to the Lender:
(A) Amendment Agreement. Three (3) fully executed originals of
this Amendment Agreement.
(B) Other Documents, Etc. Such other documents, instruments
and certificates as the Lender may reasonably request.
3
<PAGE>
5. Miscellaneous.
(A) This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the
subject matter hereof and supersedes any prior negotiations and
agreements among the parties relative to such subject matter. No
promise, condition, representation or warranty, express or implied, not
herein set forth shall bind any party hereto, and none of them has
relied on any such promise, condition, representation or warranty. Each
of the parties hereto acknowledges that, except as in this Amendment
Agreement otherwise expressly stated, no representations, warranties,
or commitments, express or implied, have been made by any other party
to the other regarding the subject matter hereof. None of the terms or
conditions of this Amendment Agreement may be changed, modified, waived
or canceled, orally or otherwise, except in a writing, signed by the
party to be charged therewith, specifying such change, modification,
waiver or cancellation of such terms or conditions, or of any preceding
or succeeding breach thereof, unless expressly so stated.
(B) Except as hereby specifically amended, modified, or
supplemented, the Loan Agreement, the Loan Documents and all other
agreements, documents, and instruments related thereto are hereby
confirmed and ratified in all respects and shall remain in full force
and effect according to their respective terms.
(C) This Amendment Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which
together shall constitute one and the same instrument.
(D) This Amendment Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of
North Carolina.
(E) Upon request of the Lender, each of the parties hereto
will duly execute and deliver or cause to be duly executed and
delivered to the Lender such further instruments and do and cause to be
done such further acts that may be reasonably necessary or proper in
the opinion of the Lender to carry out more effectively the provisions
and purposes hereof, including documents deemed necessary by the Lender
to more fully evidence the obligations of Borrower, TMC or WD to Lender
and protect and perfect the collateral therefor.
(F) The Borrower agrees to pay all reasonable costs and
expenses of the Lender in connection with the preparation, execution
and delivery of the documents executed in connection with this
Amendment Agreement, including without limitation, the reasonable fees
and out-of-pocket expenses of special counsel to the Lender.
(G) Each of WD and TMC (collectively the "Guarantors") as
guarantors under, in the case of WD, a Guaranty Agreement dated July
31, 1997 from the WD in favor of the Lender and, in the case of TMC, a
Guaranty Agreement dated February 6,
4
<PAGE>
1998, of TMC in favor of the Lender, hereby joins in this Amendment
Agreement to join in the terms hereof and evidence its consent to the
terms and conditions hereof.
[Signatures appear on following page]
5
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date hereof by the Company and the Lender.
ATTEST: SPEIZMAN INDUSTRIES, INC.
/s/ James H. McCorkle, III By: /s/ Robert S. Speizman
- ---------------------------------- -----------------------
Secretary Name: Robert S. Speizman
Title: President
ATTEST: WINK DAVIS EQUIPMENT CO., INC.
/s/ Dana G. Russell By: /s/ James H. McCorkle, III
- ---------------------------------- ---------------------------
Assistant Secretary Name: James H. McCorkle, III
Title: Vice President
ATTEST: TODD MOTION CONTROLS, INC.
/s/ James H. McCorkle, III By: /s/ Robert S. Speizman
- ---------------------------------- -----------------------
Secretary Name: Robert S. Speizman
Title: President
BANK OF AMERICA, N.A.
d/b/a NATIONSBANK, N.A.
successor to NATIONSBANK, N.A.
By: /s/ Leesa Sluder
Name: Leesa Sluder
Title: Managing Director
6
EXHIBIT 10(B)
1999 SIXTH AMENDMENT AGREEMENT TO
$37,000,000 AMENDED AND RESTATED LOAN AGREEMENT AND TERM NOTE
THIS AMENDMENT AGREEMENT, made and entered into as of this 16th day of
November, 1999, by and between SPEIZMAN INDUSTRIES, INC., a Delaware corporation
(the "Borrower"), WINK DAVIS EQUIPMENT CO., INC., a Georgia corporation ("WD"),
TODD MOTION CONTROLS, INC., a North Carolina corporation ("TMC") and BANK OF
AMERICA, N.A. d/b/a NATIONSBANK, N.A., successor to NATIONSBANK, N.A., a
national banking association (the "Lender");
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to the $37,000,000 Amended and Restated Loan
Agreement dated as of July 31, 1997 between Borrower and Lender, as amended by
1998 First Amendment Agreement thereto dated as of February 6, 1998, 1998 Second
Amendment Agreement dated as of December 30, 1998, 1999 First Amendment
Agreement thereto dated as of May 17, 1999, 1999 Second Amendment Agreement
thereto dated as of August 27, 1999, 1999 Third Amendment Agreement thereto
dated as of September 27, 1999, 1999 Fourth Amendment Agreement thereto dated as
of September 30, 1999, and 1999 Fifth Amendment Agreement thereto dated as of
October 29, 1999, among the Borrower, WD, TMC and the Lender (collectively the
"Loan Agreement"), arrangements were made for the extension by the Lender to the
Borrower of credit on the terms and conditions set forth in such Loan Agreement;
WHEREAS, under the Loan Agreement, the Borrower obtained a Credit
Facility in the maximum aggregate principal amount at any time outstanding of up
to $37,000,000, of which (i) up to $30,000,000 may be allocated under a "Letter
of Credit Facility" for the issuance of documentary Letters of Credit to support
the Borrower's purchase and importing of (x) presold textile machinery in the
ordinary course of its business and (y) in certain cases, equipment to be held
as inventory for sale and, within such $30,000,000, up to $8,500,000, as
temporarily increased to $11,500,000, may be allocated to borrowings for the
Borrower's short term operating needs under a Revolving Line of Credit, and up
to $500,000 may be allocated for the issuance of Standby Letters of Credit, as
provided in such Loan Agreement, and (ii) up to $7,000,000, as subsequently
increased to $8,050,000 by Note Modification Agreement dated February 6, 1998,
may be allocated as a term loan, all upon the terms and conditions provided in
the Loan Agreement;
WHEREAS, under the Loan Agreement, the Borrower has issued to the
Lender its Amended and Restated Revolving Credit Note dated July 31, 1997 in the
principal amount of $8,500,000 (the "Revolving Credit Note"), as modified by
Note Modification Agreement dated August 27, 1999 and Note Modification
Agreement dated September 27, 1999;
WHEREAS, under the Loan Agreement, the Borrower has issued to the
Lender its Term Note dated July 31, 1997 in the original principal amount of
$7,000,000, as subsequently
<PAGE>
increased to $8,050,000 by Note Modification Agreement dated February 6, 1998
(the "Term Note");
WHEREAS, collateral for the indebtedness and obligations of the
Borrower in respect of the Loan Agreement, the Revolving Credit Note and the
Letter of Credit Facility is provided under the Amended and Restated Security
Agreement dated July 31, 1997 between the Borrower, WD and the Lender and a
Security Agreement dated as of February 6, 1998 between TMC and the Lender
(collectively, the "Security Agreement");
WHEREAS, the Borrower has requested that the Lender agree to certain
modifications to the Loan Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and conditions herein set forth, it is hereby agreed as follows:
1. Terms. All terms used herein without definition, unless the context
clearly requires otherwise, shall have the meanings provided therefor in the
Loan Agreement.
2. Amendment to Loan Agreement.
(A) Section 1.12 of the Loan Agreement (entitled "Borrowing
Base") is rewritten to read as follows:
"1.12. "Borrowing Base" means the sum as of the date
of determination of (i) Eligible Accounts multiplied by 80%
and (ii) Eligible Inventory multiplied by 30%, and (iii) L/C
Credit multiplied by 50%, and (iv) Cash Collateral multiplied
by 100% and (v) if such date of determination occurs between
the period August 12, 1999 and January 20, 2000, $2,000,000,
all determined pursuant to the Borrowing Base Certificate."
(B) Section 2.4(b)(iv) of the Loan Agreement is hereby amended
to read as follows:
"(iv) Notwithstanding the foregoing, the Committed
Amount shall be $10,000,000 during the period August 12, 1999
to September 17, 1999 and $11,500,000 during the period
September 18, 1999 to January 20, 2000, subject to such
permanent reductions as may be required hereunder during such
period. At January 21, 2000 and thereafter, the Committed
Amount shall be permanently reduced to $6,000,000, less any
other permanent reductions which may otherwise be required
hereunder."
(C) Section 8.2 of the Loan Agreement is hereby amended to add
the following sentence:
"Notwithstanding the foregoing, the ratio of (x)
Indebtedness for Money Borrowed of the Borrower and
Subsidiaries, all determined on a consolidated
2
<PAGE>
basis to (y) EBITDA shall not exceed 5.5 to 1.0 for the
measuring date September 30, 1999."
3. Representations and Warranties. Each of the Borrower, WD and TMC
hereby jointly and severally represents and warrants that:
(A) The representations and warranties contained in Article V
of the Loan Agreement are hereby made by the Borrower on and as of the
date hereof except the representations of Sections 5.3 and 5.4 shall
refer to the most recent financial statements delivered under Section
7.1 of the Loan Agreement.
(B) There has been no material change, and there exists no
known prospective change, in the condition, financial or otherwise, of
the Borrower, WD or TMC since the date of the most recent financial
reports received by the Lender, other than changes in the ordinary
course of business, none of which has been a materially adverse change;
(C) The business and properties of the Borrower, WD or TMC are
not, and since the date of the most recent financial reports thereof
received by Lender have not, been materially adversely affected as the
result of any fire, explosion, earthquake, chemical spill, accident,
strike, lockout, combination of workmen, flood, embargo, riot, or
cancellation or loss of any major contracts;
(D) No event has occurred and no condition exists which,
either prior to or upon the consummation of the transactions
contemplated hereby, constitutes an Event of Default under the Loan
Agreement, either immediately or with the lapse of time or the giving
of notice, or both;
(E) The property which is collateral for the indebtedness of
the Borrower, WD or TMC to the Lender under the Security Agreement and
other collateral documents of the Borrower, WD or TMC in favor of the
Lender are subject to no liens or encumbrances except Permitted Liens;
(F) The execution, delivery and performance by the Borrower,
WD or TMC of its obligations under this Amendment Agreement will not
cause a violation or default under any indenture, loan agreement, or
other agreement of, or applicable to, the Borrower, WD or TMC; and
(G) Each of the Borrower, WD and TMC has the requisite
corporate power and authority to execute, deliver and perform this
Amendment Agreement; each of such documents has been duly authorized,
executed and delivered; and each of such documents constitutes a valid,
binding and enforceable instrument, obligation or agreement of the
Borrower, WD or TMC, in accordance with its respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement
of creditors' rights generally.
3
<PAGE>
4. Effectiveness of Documents. The terms and conditions hereof shall
not be effective until each of the following are delivered to the Lender:
(A) Amendment Agreement. Three (3) fully executed originals of
this Amendment Agreement.
(B) Other Documents, Etc. Such other documents, instruments
and certificates as the Lender may reasonably request.
5. Miscellaneous.
(A) This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the
subject matter hereof and supersedes any prior negotiations and
agreements among the parties relative to such subject matter. No
promise, condition, representation or warranty, express or implied, not
herein set forth shall bind any party hereto, and none of them has
relied on any such promise, condition, representation or warranty. Each
of the parties hereto acknowledges that, except as in this Amendment
Agreement otherwise expressly stated, no representations, warranties,
or commitments, express or implied, have been made by any other party
to the other regarding the subject matter hereof. None of the terms or
conditions of this Amendment Agreement may be changed, modified, waived
or canceled, orally or otherwise, except in a writing, signed by the
party to be charged therewith, specifying such change, modification,
waiver or cancellation of such terms or conditions, or of any preceding
or succeeding breach thereof, unless expressly so stated.
(B) Except as hereby specifically amended, modified, or
supplemented, the Loan Agreement, the Loan Documents and all other
agreements, documents, and instruments related thereto are hereby
confirmed and ratified in all respects and shall remain in full force
and effect according to their respective terms.
(C) This Amendment Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which
together shall constitute one and the same instrument.
(D) This Amendment Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of
North Carolina.
(E) Upon request of the Lender, each of the parties hereto
will duly execute and deliver or cause to be duly executed and
delivered to the Lender such further instruments and do and cause to be
done such further acts that may be reasonably necessary or proper in
the opinion of the Lender to carry out more effectively the provisions
and purposes hereof, including documents deemed necessary by the Lender
to more fully evidence the obligations of Borrower, TMC or WD to Lender
and protect and perfect the collateral therefor.
4
<PAGE>
(F) The Borrower agrees to pay all reasonable costs and
expenses of the Lender in connection with the preparation, execution
and delivery of the documents executed in connection with this
Amendment Agreement, including without limitation, the reasonable fees
and out-of-pocket expenses of special counsel to the Lender.
(G) Each of WD and TMC (collectively the "Guarantors") as
guarantors under, in the case of WD, a Guaranty Agreement dated July
31, 1997 from the WD in favor of the Lender and, in the case of TMC, a
Guaranty Agreement dated February 6, 1998, of TMC in favor of the
Lender, hereby joins in this Amendment Agreement to join in the terms
hereof and evidence its consent to the terms and conditions hereof.
[Signatures appear on following page]
5
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date hereof by the Company and the Lender.
ATTEST: SPEIZMAN INDUSTRIES, INC.
/s/ James H. McCorkle, III By: /s/ Robert S. Speizman
- ------------------------------- -----------------------
Secretary Name: Robert S. Speizman
Title: President
ATTEST: WINK DAVIS EQUIPMENT CO., INC.
/s/ Dana G. Russell By: /s/ James H. McCorkle, III
- ------------------------------- ---------------------------
Assistant Secretary Name: James H. McCorkle, III
Title: Vice President
ATTEST: TODD MOTION CONTROLS, INC.
/s/ James H. McCorkle, III By: /s/ Robert S. Speizman
- ------------------------------- -----------------------
Secretary Name: Robert S. Speizman
Title: President
BANK OF AMERICA, N.A.
d/b/a NATIONSBANK, N.A.
successor to NATIONSBANK, N.A.
By:/s/ Leesa C. Sluder
Name: Leesa C. Sluder
Title: Managing Director
6
EXHIBIT 10(C)
2000 FIRST AMENDMENT AGREEMENT TO
$37,000,000 AMENDED AND RESTATED LOAN AGREEMENT AND TERM NOTE
THIS AMENDMENT AGREEMENT, made and entered into as of this 26th day of
January, 2000, by and between SPEIZMAN INDUSTRIES, INC., a Delaware corporation
(the "Borrower"), WINK DAVIS EQUIPMENT CO., INC., a Georgia corporation ("WD"),
TODD MOTION CONTROLS, INC., a North Carolina corporation ("TMC") and BANK OF
AMERICA, N.A. d/b/a NATIONSBANK, N.A., successor to NATIONSBANK, N.A., a
national banking association (the "Lender");
W I T N E S S E T H:
--------------------
WHEREAS, pursuant to the $37,000,000 Amended and Restated Loan
Agreement dated as of July 31, 1997 between Borrower and Lender, as amended by
1998 First Amendment Agreement thereto dated as of February 6, 1998, 1998 Second
Amendment Agreement dated as of December 30, 1998, 1999 First Amendment
Agreement thereto dated as of May 17, 1999, 1999 Second Amendment Agreement
thereto dated as of August 27, 1999, 1999 Third Amendment Agreement thereto
dated as of September 27, 1999, 1999 Fourth Amendment Agreement thereto dated as
of September 30, 1999, 1999 Fifth Amendment Agreement thereto dated as of
October 29, 1999, and 1999 Sixth Amendment Agreement thereto dated as of
November __, 1999, among the Borrower, WD, TMC and the Lender (collectively the
"Loan Agreement"), arrangements were made for the extension by the Lender to the
Borrower of credit on the terms and conditions set forth in such Loan Agreement;
WHEREAS, under the Loan Agreement, the Borrower obtained a Credit
Facility in the maximum aggregate principal amount at any time outstanding of up
to $37,000,000, of which (i) up to $30,000,000 may be allocated under a "Letter
of Credit Facility" for the issuance of documentary Letters of Credit to support
the Borrower's purchase and importing of (x) presold textile machinery in the
ordinary course of its business and (y) in certain cases, equipment to be held
as inventory for sale and, within such $30,000,000, up to $8,500,000, as
temporarily increased to $11,500,000, may be allocated to borrowings for the
Borrower's short term operating needs under a Revolving Line of Credit, and up
to $500,000 may be allocated for the issuance of Standby Letters of Credit, as
provided in such Loan Agreement, and (ii) up to $7,000,000, as subsequently
increased to $8,050,000 by Note Modification Agreement dated February 6, 1998,
may be allocated as a term loan, all upon the terms and conditions provided in
the Loan Agreement;
WHEREAS, under the Loan Agreement, the Borrower has issued to the
Lender its Amended and Restated Revolving Credit Note dated July 31, 1997 in the
principal amount of $8,500,000 (the "Revolving Credit Note"), as modified by
Note Modification Agreement dated August 27, 1999 and Note Modification
Agreement dated September 27, 1999 and Note Modification Agreement dated
November 10, 1999;
<PAGE>
WHEREAS, under the Loan Agreement, the Borrower has issued to the
Lender its Term Note dated July 31, 1997 in the original principal amount of
$7,000,000, as subsequently increased to $8,050,000 by Note Modification
Agreement dated February 6, 1998 (the "Term Note");
WHEREAS, collateral for the indebtedness and obligations of the
Borrower in respect of the Loan Agreement, the Revolving Credit Note and the
Letter of Credit Facility is provided under the Amended and Restated Security
Agreement dated July 31, 1997 between the Borrower, WD and the Lender and a
Security Agreement dated as of February 6, 1998 between TMC and the Lender
(collectively, the "Security Agreement");
WHEREAS, the Borrower has requested that the Lender agree to certain
modifications to the Loan Agreement;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and conditions herein set forth, it is hereby agreed as follows:
1. Terms. All terms used herein without definition, unless the context
clearly requires otherwise, shall have the meanings provided therefor in the
Loan Agreement.
2. Amendment to Loan Agreement.
(A) Section 2.4(b)(iv) of the Loan Agreement is hereby amended
to read as follows:
"(iv) Notwithstanding the foregoing, the Committed
Amount shall be $10,000,000 during the period August 12, 1999
to September 17, 1999, $11,500,000 during the period September
18, 1999 to January 20, 2000, $11,000,000 during the period
January 21, 2000 to February 29, 2000 and $8,000,000 during
the period March 1, 2000 to March 31, 2000, subject to such
permanent reductions as may be required hereunder during such
period. At April 1, 2000 and thereafter, the Committed Amount
shall be permanently reduced to $6,000,000, less any other
permanent reductions which may otherwise be required
hereunder."
(B) Section 8.2 of the Loan Agreement is hereby amended to add
the following sentence:
"Notwithstanding the foregoing, the ratio of (x)
Indebtedness for Money Borrowed of the Borrower and
Subsidiaries, all determined on a consolidated basis to (y)
EBITDA shall not exceed 3.5 to 1.0 for the measuring date
occurring in December, 1999."
3. Representations and Warranties. Each of the Borrower, WD and TMC
hereby jointly and severally represents and warrants that:
2
<PAGE>
(A) The representations and warranties contained in Article V
of the Loan Agreement are hereby made by the Borrower on and as of the
date hereof except the representations of Sections 5.3 and 5.4 shall
refer to the most recent financial statements delivered under Section
7.1 of the Loan Agreement.
(B) There has been no material change, and there exists no
known prospective change, in the condition, financial or otherwise, of
the Borrower, WD or TMC since the date of the most recent financial
reports received by the Lender, other than changes in the ordinary
course of business, none of which has been a materially adverse change;
(C) The business and properties of the Borrower, WD or TMC are
not, and since the date of the most recent financial reports thereof
received by Lender have not, been materially adversely affected as the
result of any fire, explosion, earthquake, chemical spill, accident,
strike, lockout, combination of workmen, flood, embargo, riot, or
cancellation or loss of any major contracts;
(D) No event has occurred and no condition exists which,
either prior to or upon the consummation of the transactions
contemplated hereby, constitutes an Event of Default under the Loan
Agreement, either immediately or with the lapse of time or the giving
of notice, or both;
(E) The property which is collateral for the indebtedness of
the Borrower, WD or TMC to the Lender under the Security Agreement and
other collateral documents of the Borrower, WD or TMC in favor of the
Lender are subject to no liens or encumbrances except Permitted Liens;
(F) The execution, delivery and performance by the Borrower,
WD or TMC of its obligations under this Amendment Agreement will not
cause a violation or default under any indenture, loan agreement, or
other agreement of, or applicable to, the Borrower, WD or TMC; and
(G) Each of the Borrower, WD and TMC has the requisite
corporate power and authority to execute, deliver and perform this
Amendment Agreement; each of such documents has been duly authorized,
executed and delivered; and each of such documents constitutes a valid,
binding and enforceable instrument, obligation or agreement of the
Borrower, WD or TMC, in accordance with its respective terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting enforcement
of creditors' rights generally.
4. Effectiveness of Documents. The terms and conditions hereof shall
not be effective until each of the following are delivered to the Lender:
(A) Amendment Agreement. Three (3) fully executed originals of
this Amendment Agreement.
(B) Amendment Fee. Payment to the Lender of an amendment fee
of $5,000.
3
<PAGE>
(C) No Litigation Certificate. An executed No Litigation
Certificate satisfactory to Lender.
(D) Other Documents, Etc. Such other documents, instruments
and certificates as the Lender may reasonably request.
5. Miscellaneous.
(A) This Amendment Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the
subject matter hereof and supersedes any prior negotiations and
agreements among the parties relative to such subject matter. No
promise, condition, representation or warranty, express or implied, not
herein set forth shall bind any party hereto, and none of them has
relied on any such promise, condition, representation or warranty. Each
of the parties hereto acknowledges that, except as in this Amendment
Agreement otherwise expressly stated, no representations, warranties,
or commitments, express or implied, have been made by any other party
to the other regarding the subject matter hereof. None of the terms or
conditions of this Amendment Agreement may be changed, modified, waived
or canceled, orally or otherwise, except in a writing, signed by the
party to be charged therewith, specifying such change, modification,
waiver or cancellation of such terms or conditions, or of any preceding
or succeeding breach thereof, unless expressly so stated.
(B) Except as hereby specifically amended, modified, or
supplemented, the Loan Agreement, the Loan Documents and all other
agreements, documents, and instruments related thereto are hereby
confirmed and ratified in all respects and shall remain in full force
and effect according to their respective terms.
(C) This Amendment Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which
together shall constitute one and the same instrument.
(D) This Amendment Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of
North Carolina.
(E) Upon request of the Lender, each of the parties hereto
will duly execute and deliver or cause to be duly executed and
delivered to the Lender such further instruments and do and cause to be
done such further acts that may be reasonably necessary or proper in
the opinion of the Lender to carry out more effectively the provisions
and purposes hereof, including documents deemed necessary by the Lender
to more fully evidence the obligations of Borrower, TMC or WD to Lender
and protect and perfect the collateral therefor.
(F) The Borrower agrees to pay all reasonable costs and
expenses of the Lender in connection with the preparation, execution
and delivery of the documents
4
<PAGE>
executed in connection with this Amendment Agreement, including without
limitation, the reasonable fees and out-of-pocket expenses of special
counsel to the Lender.
(G) Each of WD and TMC (collectively the "Guarantors") as
guarantors under, in the case of WD, a Guaranty Agreement dated July
31, 1997 from the WD in favor of the Lender and, in the case of TMC, a
Guaranty Agreement dated February 6, 1998, of TMC in favor of the
Lender, hereby joins in this Amendment Agreement to join in the terms
hereof and evidence its consent to the terms and conditions hereof.
[Signatures appear on following page]
5
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date hereof by the Company and the Lender.
ATTEST: SPEIZMAN INDUSTRIES, INC.
/s/ James H. McCorkle, III By: /s/ Robert S. Speizman
- ------------------------------- -----------------------
Secretary Name: Robert S. Speizman
Title: President
ATTEST: WINK DAVIS EQUIPMENT CO., INC.
/s/ Dana Russell By: /s/ James H. McCorkle, III
- ------------------------------- ---------------------------
Assistant Secretary Name: James H. McCorkle, III
Title: Vice President
ATTEST: TODD MOTION CONTROLS, INC.
/s/ James H. McCorkle, III By: /s/ Robert S. Speizman
- ------------------------------- -----------------------
Secretary Name: Robert S. Speizman
Title: President
BANK OF AMERICA, N.A.
d/b/a NATIONSBANK, N.A.
successor to NATIONSBANK, N.A.
By:/s/ Leesa C. Sluder
Name: Leesa C. Sluder
Title: Managing Director
6
EXHIBIT 10(D)
[MARZOLI LETTERHEAD]
Speizman Industries, Inc.
P.O. Box 31215
Charlotte, NC 28231 - U.S.A.
Attention To: Mr. Robert S. Speizman
-------------------------------------
Palazzolo S/O, 16/12/99
Re: Speizman Industries, Inc. - Agreement with Marzoli S.p.A.
- --------------------------------------------------------------
Dear Mr. Speizman,
We understand from your conversation with Marco Camozzi on December 2nd
that you agree that our arrangement should be ended. This is to confirm that the
agreement is now terminated and that Marzoli will assume full control of the
business immediately. Marzoli will pay all commissions due (3%) on sales
completed up to the date of this letter according to the terms of the agreement
and a final accounting.
Please have your property removed from the premises by January 15,
2000. Of course, Speizman will be expected to discontinue its use of the
"Marzoli" and/or "Vouk" names in any manner immediately, as well as any
activities suggesting that Speizman is or represents Marzoli or Vouk. There have
been a number of other problems about which we have learned recently, such as
your systematic effort to outsource Marzoli and/or Vouk spare parts which
undermines the sales of Marzoli and/or Vouk parts. Please return immediately all
Marzoli parts that you are using in this effort.
Please call Mr. David C. Kitzmiller, our local manager, as soon as
possible to discuss plans for the accounting and the disposition of your
property on the premises.
Very truly yours,
Attilio Camozzi
President and CEO
/s/ Attilio Camozzi
- -------------------
cc: Marc Camozzi
David C. Kitzmiller
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<FISCAL-YEAR-END> JUL-01-2000
<PERIOD-START> OCT-04-1999
<PERIOD-END> JAN-01-2000
<PERIOD-TYPE> 6-MOS
<CASH> 520,867
<SECURITIES> 0
<RECEIVABLES> 25,010,164
<ALLOWANCES> 651,372
<INVENTORY> 21,472,451
<CURRENT-ASSETS> 50,330,126
<PP&E> 7,455,022
<DEPRECIATION> 1,936,247
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0
0
<OTHER-SE> 23,740,985
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</TABLE>
