FOURTH AMENDMENT
to
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This FOURTH AMENDMENT (the "Amendment"), dated as of December 29, 1995, is
by and among FIELDCREST XXXXXX, INC., a Delaware corporation (the "Company"),
the lenders listed on the signature pages hereto (the "Lenders"), BANK OF
AMERICA ILLINOIS (formerly known as Continental Bank N.A.), CORESTATES BANK,
N.A. (formerly known as Philadelphia National Bank) and FIRST UNION NATIONAL
BANK OF NORTH CAROLINA, as lead managers for the Lenders (collectively, the
"Lead Managers"), and THE FIRST NATIONAL BANK OF BOSTON, as agent for the
Lenders (the "Agent").
WHEREAS, the Company, the Lenders, the Lead Managers and the Agent are
parties to that certain Third Amended and Restated Revolving Credit Agreement,
dated as of March 10, 1994, as amended (as so amended, the "Credit Agreement");
and
WHEREAS, the Company, the Lenders, the Lead Managers and the Agent have
agreed, subject to the terms and conditions set forth herein, to amend certain
provisions of the Credit Agreement as set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
ss.1. CERTAIN DEFINED TERMS. Capitalized terms which are used herein
without definition and which are defined in the Credit Agreement shall have the
same meanings herein as in the Credit Agreement.
ss.2. AMENDMENT TO CREDIT AGREEMENT.
(a) Section 1 of the Credit Agreement is hereby amended by adding the
following new definitions in the appropriate places in the alphabetical sequence
thereof:
Fourth Amendment. The Fourth Amendment to Third Amended and Restated
Revolving Credit Agreement dated as of December 29, 1995.
Mortgages. The several mortgages from the Company and the Secured
Guarantors to the Agent with respect to the fee interests of the Company
and the Secured Guarantors in the real property listed and described on
Schedule 7.20 attached hereto, each satisfactory to the Lenders and the
Agent in all respects and as may be amended and in effect from time to
time.
Restructuring Charge. An amount equal to the one-time charge against
Consolidated Net Income of the Company and its Subsidiaries for the nine
months of the Company ending September 30, 1995 incurred as a result of the
reorganization of the Company's New York operations, relocation of sales,
marketing and design personnel to Kannapolis, North Carolina
and the Company's voluntary retirement program, as such amount is reflected
in the consolidated financial statements of the Company and its
Subsidiaries for such fiscal periods; provided that in no event shall the
Restructuring Charge include the Yarn Spinning Charge.
Yarn Spinning Charge. The one-time charge against Consolidated Net
Income of the Company and its Subsidiaries for the fiscal quarter of the
Company ending December 31, 1995 incurred as a result of the restructuring
charge related to closure of the yarn spinning facilities known as Plant 4
and Plant 7, the sale of a warehouse in Eden, North Carolina and related
charges, as such amount is reflected in the consolidated financial
statements of the Company and its Subsidiaries for such fiscal quarter.
(b) Section 1 of the Credit Agreement is hereby further amended by deleting
the definitions of "Applicable Margin" and "Security Documents" in their
entirety, and substituting therefor the following:
Applicable Margin. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a
"Rate Adjustment Period"), the Applicable Margin shall be the applicable
percentage set forth below with respect to the Company's Interest Coverage
Ratio, as determined at the end of the fiscal period of the Company and its
Subsidiaries ending immediately prior to the applicable Rate Adjustment
Period:
Interest Coverage Commitment EuroRate C/D Rate Letter of
Ratio Fee Amounts Amounts Credit
Fees
Less than or equal to 0.500% 2.250% 2.375% 2.250%
0.50 to 1.00
Greater than 0.50 to 0.500% 2.000% 2.125% 2.000%
1.00 and less than or
equal to 1.00 to 1.00
Greater than 1.00 to 0.500% 1.750% 1.875% 1.750%
1.00 and less than or
equal to 1.50 to 1.00
Greater than 1.50 to 0.375% 1.500% 1.625% 1.500%
1.00
Notwithstanding the foregoing, (a) for the period commencing on January 15, 1996
through the date immediately preceding the first Adjustment Date to occur after
December 29, 1995, the Applicable Margin shall be deemed to be the highest
Applicable Margin set forth above and (b) if the Company fails to deliver any
Compliance Certificate pursuant to ss.7.5(d) hereof then, for the period
commencing on the next Adjustment Date to occur subsequent to such failure
through the date immediately preceding the Adjustment Date which occurs
immediately following the date on which such Compliance Certificate is
delivered, the Applicable Margin shall be deemed to be the highest Applicable
Margin set forth above.
Security Documents. The Security Agreement, the Crestfield Cotton
Guaranty, the FCC Canada Guaranty, the Subsidiary Guaranty, the Fieldcrest
Financing Guaranty, the Fieldcrest Licensing Guaranty, the Fieldcrest
Transportation Guaranty, the Fieldcrest Sure Fit Guaranty, the Crestfield
Cotton Security Agreement, the Subsidiary Security Agreement, the Encee
Security Agreement, the Fieldcrest Financing Security Agreement, the
Fieldcrest Licensing Security Agreement, the Fieldcrest Transportation
Security Agreement, the Fieldcrest Sure Fit Security Agreement, the
Assignment of Acquisition Documents, the Trademark Assignment, the
Fieldcrest Licensing Trademark Assignment, the Mortgages and the Agency
Agreements, and any and all instruments and documents required to be
delivered pursuant thereto, in each case as originally executed, or if
amended, restated, modified or supplemented, as so amended, restated,
modified or supplemented.
(c) Section 1 of the Credit Agreement is hereby further amended by deleting
the word "and" at the end of clause (a) thereof and substituting therefor a
comma and inserting before the period at the end of the definition of
"Consolidated Net Income" the following text: ", (c) there shall be added to
Consolidated Net Income for the fiscal quarters ending March 31, 1995, June 30,
1995 and September 30, 1995 an amount equal to the Restructuring Charge, as
determined on a pre-tax basis, provided, that in no event shall the aggregate
amount added to Consolidated Net Income pursuant to this clause (c) exceed
$15,536,000 and (d) there shall be added to Consolidated Net Income for the
fiscal quarter ending December 31, 1995 an amount equal to the Yarn Spinning
Charge, as determined on a pre-tax basis, provided that in no event shall the
aggregate amount added to Consolidated Net Income pursuant to this clause (d)
exceed $5,000,000, all as determined in accordance with Generally Accepted
Accounting Principles."
(d) Section 1 of the Credit Agreement is hereby further amended by deleting
from clause (ii) of the definition of "Net Security Value of Inventory", the
parenthetical "(unless such security interests have been released by the Agent
pursuant to ss.5(i) hereof)".
(e) Section 2.2 of the Credit Agreement is hereby amended by deleting the
last sentence of such section in its entirety.
(f) Section 4.5 of the Credit Agreement is hereby amended by deleting the
phrase "rate of .375% per annum on" in the first sentence thereof, and
substituting therefor the phrase "Applicable Margin with respect to the
Commitment Fee multiplied by".
(g) Section 5 of the Credit Agreement is hereby amended by deleting clause
(i) thereof in its entirety.
(h) Section 6 of the Credit Agreement is hereby amended by inserting after
ss.6.25 thereof the following new section:
ss.6.26. Assets of Guarantors. Neither St. Mary's nor Fieldcrest
International have or own any assets.
(i) Section 7 of the Credit Agreement is hereby amended by inserting after
ss.7.19 thereof the following new sections:
ss.7.20. Mortgages. As soon as practicable but in any event on or
prior to April 15, 1996, the Company and its Subsidiaries shall have
granted to the Agent for the benefit of the Lenders a valid and enforceable
first-priority mortgage over the properties described on Schedule 7.20
attached hereto, free and clear of all defects and encumbrances except for
liens permitted under ss.8.2 hereof, or entered into amendments,
satisfactory to the Agent and the Lenders, to the mortgages already
existing in favor of the Agent for the benefit of the Lenders and which
relate to the properties described on Schedule 7.20 attached hereto and
shall have delivered to the Agent fully executed Mortgages or amendments to
Mortgages, as the case may be, with respect to each such property, together
with title insurance policies or endorsements to existing title insurance
policies, if any, surveys, environmental reports, real estate appraisals,
evidences of insurances with the Agent named as loss payee and additional
insured, legal opinions, collateral notes, financing statements and other
documents and certificates with respect to such properties reasonably
required by the Agent, and all steps necessary to perfect such Mortgages
shall have been take to the reasonable satisfaction of the Agent. The
Company will reimburse the Agent for all of its reasonable out-of-pocket
expenses, including but not limited to the reasonable attorneys' fees and
disbursements of the Lender's Special Counsel and other reasonable
attorneys' fees and disbursements, incurred or expended in connection with
the preparation, interpretation, restructuring or termination of the
Mortgages or any amendment thereof and real estate appraisals and surveys
of the properties of the Company and its Subsidiaries.
ss.7.21. Amendments to Security Agreements, Etc. As soon as
practicable but in any event on or prior to March 15, 1996, the Company and
each of the Secured Guarantors shall have executed and delivered an
amendment to its respective Security Agreement granting an additional
security interest in such Person's unencumbered equipment located at the
facilities listed on Schedule 7.20 attached hereto and all such amendments
shall be in form and substance satisfactory to the Agent and the Lenders.
In addition, on or prior to March 15, 1996, duly executed amendments to
financing statements originally filed against the Company and the Secured
Guarantors shall have been received by the Agent and all filings,
recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Agent to protect and preserve the Agent's
legal, valid and enforceable first security interest in and lien upon the
Collateral shall have been duly effected and the Agent shall have received
evidence thereof in form and substance satisfactory to the Agent. On or
prior to March 15, 1996, the Agent also shall have received a complete and
fully executed updated Perfection Certificate from the Company and each of
the Secured Guarantors and the results of UCC searches with respect to the
Collateral, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Agent. Simultaneously
with the delivery of the amendments to the Security Agreements, each of the
Lenders shall have received from each of the Secured Guarantors a copy,
certified by a duly authorized officer of such Person to be true and
complete on the date hereof, of each of (i) its charter or other
incorporation documents as in effect on such date of certification, and
(ii) its by-laws as in effect on such date and each of the Lenders shall
have received evidence satisfactory to the Lenders that all corporate
action necessary for the valid execution, delivery and performance by each
of the Secured Guarantors of such amendments to which it is or is to become
a party shall have been duly and effectively taken. Each of the Lenders
also shall have received from each of the Secured Guarantors on or before
March 15, 1996 an incumbency certificate, dated as of the date as of which
the amendment to such Person's Security Agreement is dated, signed by a
duly authorized officer of such Person, and giving the name and bearing a
specimen signature of each individual who shall be authorized: (i) to sign,
in the name and on behalf of such Person, each of the Fourth Amendment, the
amendment to its Security Agreement and the other documents to which such
Person is or is to become a party; and (ii) to give notices and to take
other action on its behalf under the Fourth Amendment, the Security
Agreement and the other documents to which it is a party.
(j) Section 8.1 of the Credit Agreement is hereby amended by deleting
clause (r) thereof in its entirety, and substituting therefor the following:
(r) so long as no Default or Event of Default exists or is continuing
or would exist as a result thereof, unsecured Indebtedness of the Company
not otherwise included in this ss.8.1 in an aggregate amount not at any
time to exceed $20,000,000.
(k) Section 8.3 of the Credit Agreement is hereby amended by deleting
clause (e) thereof in its entirety, and substituting therefor the phrase
"intentionally omitted;".
(l) Section 8.3 of the Credit Agreement is hereby amended by deleting
clause (h) thereof in its entirety, and substituting therefor the following:
(h) so long as no Default or Event of Default exists or is continuing
or would exist as a result thereof, Investments of the Company not
otherwise included in this ss.8.3 in an aggregate amount not at any time to
exceed $30,000,000, provided that any Investment by the Company in any
Subsidiary of the Company pursuant to this ss.8.3(h) shall be limited to
loans to such Subsidiary evidenced by a promissory note of such Subsidiary
and that such promissory note shall be pledged to the Agent for the benefit
of the Lenders and the Agent pursuant to the terms of the Security
Documents to which the Company is a party; provided further that the
aggregate amount of Investments by the Company in any joint ventures or any
other entity in which the Company owns less than 100% of the
ownership interests of such entity shall not at any time exceed
$15,000,000.
(m) Section 8.5 of the Credit Agreement is hereby amended by deleting the
text of such section in its entirety, and substituting therefor the following:
ss.8.5. Distributions. The Company shall not make any Distributions
except as provided in this ss.8.5. The Company may declare and pay cash
dividends in respect of its preferred stock subject to all of the following
restrictions:
(a) the aggregate amount of cash dividends paid in any fiscal year of
the Company in respect of such preferred stock of the Company shall not
exceed $4,500,000;
(b) no Default or Event of Default shall have occurred and be
continuing at the time of declaration or payment of any cash dividend, and
no Default or Event of Default will exist after giving effect to the
payment of any cash dividend; and
(c) the Company shall have delivered to the Agent no later than one
Business Day after the declaration of such cash dividend (but prior to
payment thereof) a certificate signed by an authorized officer of the
Company and evidence satisfactory to the Agent showing compliance with the
provisions of clauses (a) and (b) hereof.
(n) Section 8.9 of the Credit Agreement is hereby amended by deleting the
text of such section in its entirety, and substituting therefor the following:
ss.8.9. Capital Expenditures. The Company and its Subsidiaries will
not make Consolidated Capital Expenditures in any fiscal year that exceed,
(a) $38,000,000 in the aggregate for the fiscal year of the Company ending
on December 31, 1996, and (b) $55,000,000 in the aggregate in any fiscal
year of the Company thereafter; provided, however, that, if during any
fiscal year the amount of Consolidated Capital Expenditures permitted for
that fiscal year is not so utilized, such unutilized amount may be utilized
in any succeeding fiscal year.
(o) Section 8.10 of the Credit Agreement is hereby amended by deleting the
table set forth at the end of such section in its entirety, and substituting
therefor the following table:
Quarter Ending Ratio
December 31, 1995 0.55 to 1.00
March 31, 1996 0.01 to 1.00
June 30, 1996 0.01 to 1.00
September 30, 1996 0.25 to 1.00
December 31, 1996 1.25 to 1.00
The last day of each
fiscal quarter 1.50 to 1.00
thereafter
(p) Section 8.11 of the Credit Agreement is hereby amended by deleting the
table set forth at the end of such section in its entirety, and substituting
therefor the following table:
Quarter Ending Ratio
December 31, 1995 1.40 to 1.00
March 31, 1996 0.85 to 1.00
June 30, 1996 0.90 to 1.00
September 30, 1996 1.15 to 1.00
December 31, 1996 and 2.00 to 1.00
thereafter
(q) Section 8.12 of the Credit Agreement is hereby amended by deleting the
table set forth at the end of such section in its entirety, and substituting
therefor the following table:
Period Ratio
10/01/95 through 12/15/95 3.00 to 1.00
12/16/95 through 02/29/96 3.20 to 1.00
03/01/96 through 12/15/96 3.50 to 1.00
12/16/96 through 03/01/97 3.20 to 1.00
Each month thereafter 3.00 to 1.00
(r) The Credit Agreement is hereby further amended by deleting Schedule 6.1
thereto in its entirety, and substituting therefor the Schedule 6.1 attached
hereto.
(s) The Credit Agreement is hereby further amended by adding thereto as
Schedule 7.20 the Schedule 7.20 attached hereto.
ss.3. AMENDMENT FEE. The Company agrees to pay to the Agent, for the
account of the Lenders in accordance with their pro rata share to the Loans, on
or prior to the date on which all conditions set forth in 6 hereof are satisfied
(other than the condition precedent set forth in 6(f) hereof), an amendment fee
(the "Amendment Fee") equal to $243,750.00.
ss.4. AFFIRMATION BY THE COMPANY AND THE GUARANTORS.
(a) The Company hereby ratifies and confirms all of the Lender Obligations,
including, without limitation, the Loans, and the Company hereby affirms its
absolute and unconditional promise to pay to the Lenders the Loans and all other
amounts due under the Credit Agreement as amended hereby. The Company hereby
confirms that the Lender Obligations are and remain secured pursuant to the
Security Documents to which the Company is a party.
(b) Each of Crestfield Cotton, FCC Canada, Encee, Fieldcrest International,
St. Mary's, Fieldcrest Transportation, Fieldcrest Financing, Fieldcrest
Licensing and Fieldcrest Sure Fit hereby acknowledges the provisions of this
Amendment and hereby reaffirms its absolute and unconditional guaranty of the
Company's payment and performance of the Lender Obligations to the Banks as more
fully described in the Guaranty to which such Person is a party. Each of the
Secured Guarantors hereby confirms that its obligations under the Guaranty to
which it is a party are and remain secured pursuant to the Security Documents to
which it is a party.
ss.5. REPRESENTATIONS AND WARRANTIES. The Company hereby represents and
warrants to the Lenders as follows:
(a) Representations and Warranties. The representations and warranties
contained in ss.6 of the Credit Agreement were true and correct in all material
respects when made. The representations and warranties contained in ss.6 of the
Credit Agreement, as amended hereby, are true and correct on the date hereof.
(b) Enforceability. The execution and delivery by the Company and the
Secured Guarantors of this Amendment and all other instruments and agreements
required to be executed and delivered by the Company and the Secured Guarantors,
as the case may be, in connection with the transactions contemplated hereby or
referred to herein (collectively, the "Amendment Documents"), and the
performance by the Company and the Secured Guarantors of the Amendment Documents
and the Credit Agreement, as amended hereby, are within the corporate powers of
the Company and the Secured Guarantors, as the case may be, and have been duly
authorized by all necessary corporate action on the part of the Company and the
Secured Guarantors, as the case may be. Each of the Amendment Documents and the
Credit Agreement, as amended hereby, are valid and legally binding obligations
of the Company and the Secured Guarantors, as the case may be, enforceable in
accordance with their terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or affecting the
enforcement of creditors' rights in general.
(c) No Default. No Default or Event of Default has occurred and is
continuing and no Default or Event of Default will exist after the execution and
delivery of this Amendment or after the consummation of the transactions
contemplated hereby.
ss.6. EFFECTIVENESS. This Amendment shall become effective as of December
29, 1995 upon satisfaction of each of the following conditions precedent on or
prior to January 15, 1996:
(a) Delivery. The Company, the Lenders, the Agent and the guarantors
referred to in ss.4(b) hereof shall have executed and
delivered this Amendment.
(b) Certified Copies of Corporate Documents. Each of the Lenders shall have
received from the Company a copy, certified by a duly authorized officer of the
Company to be true and complete on the date hereof, of each of (i) its charter
or other incorporation documents as in effect on such date of certification, and
(ii) its by-laws as in effect on such date.
(c) Corporate Action. All corporate action necessary for the valid
execution, delivery and performance by the Company of the Amendment Documents to
which it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Lenders shall have been provided to
each of the Lenders.
(d) Incumbency Certificate. Each of the Lenders shall have received from
the Company an incumbency certificate, dated as of the date hereof, signed by a
duly authorized officer of the Company, and giving the name and bearing a
specimen signature of each individual who shall be authorized: (i) to sign, in
the name and on behalf of the Company, each of the Amendment Documents to which
such company is or is to become a party; and (ii) to give notices and to take
other action on its behalf under the Amendment Documents to which it is a party.
(e) Opinion of Counsel. Each of the Lenders and the Agent shall have
received a favorable legal opinion addressed to the Lenders and the Agent, dated
as of January 15, 1996, in form and substance satisfactory to the Lenders and
the Agent, from X.X. Xxxx, general counsel to the Company and its Subsidiaries.
(f) Amendment Fee. The Company shall have paid to the Agent the Amendment
Fee.
(g) Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Amendment and all documents incident hereto
shall be satisfactory in form and substance to the Agent, and the Agent shall
have received all information and such counterpart originals or certified or
other copies of such documents as the Agent may reasonably request.
ss.7. MISCELLANEOUS PROVISIONS. (a) Except as otherwise expressly provided
by this Amendment, all of the terms, conditions and provisions of the Credit
Agreement shall remain the same. It is declared and agreed by each of the
parties hereto that the Credit Agreement, as amended hereby, shall continue in
full force and effect, and that this Amendment and such Credit Agreement shall
be read and construed as one instrument. The consent granted hereunder is
limited to the specific matters referred to herein and the Lenders shall not
have any obligation to issue any further consent with respect to the subject
matter of this consent or any other matter.
(b) This Amendment is intended to take effect as an agreement under seal
and shall be construed according to and governed by the laws of the Commonwealth
of Massachusetts.
(c) This Amendment may be executed in any number of counterparts, but all
such counterparts shall together constitute but one instrument. In making proof
of this Amendment it shall not be necessary to produce or account for more than
one counterpart signed by each party hereto by and against which enforcement
hereof is sought.
(d) The Company hereby agrees to pay to the Agent, on demand by the Agent,
all reasonable out-of-pocket costs and expenses incurred or sustained by the
Agent in connection with the preparation of this Amendment and the documents
referred to herein (including reasonable legal fees).
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment as of
the date first above written.
FIELDCREST XXXXXX, INC.
By:/s/ X. X. Xxxxx
Title: Vice President and
Chief Finanical Officer
THE FIRST NATIONAL BANK
OF BOSTON, as Agent
By:/s/ Xxxxxxxx X. Xxxxxxx
Title: Managing Director
THE FIRST NATIONAL BANK
OF BOSTON
By:/s/ Xxxxxxxx X. Xxxxxxx
Title: Managing Director
BANK OF AMERICA ILLINOIS,
individually and as Lead Manager
By:/s/ Xxxxxxx X. Xxxxx
Title: Vice President
CORESTATES BANK, N. A.,
individually and as Lead Manager
By:/s/ Xxxxx X. Xxxxxxxx
Title: Vice President
FIRST UNION NATIONAL BANK
OF NORTH CAROLINA,
individually and as Lead Manager
By:/s/ X. X. Xxxxxxxxx
Title: Senior Vice President
BANK OF MONTREAL
By:/s/ Xxxxxx X. Xxxxx
Title: Director
MELLON BANK, N. A.
By:/s/ Xxxxxxx X Xxxxx
Title: Vice President
Each of the undersigned joins in this Fourth Amendment for purposes of
ss.4(b) hereof.
CRESTFIELD COTTON COMPANY
By:/s/ X. X. Xxxxx
Title: Vice President and
Treasurer
FCC CANADA, INC.
By:/s/ X. X. Xxxxx
Title: Vice President and
Treasurer
ENCEE, INC.
By:/s/ X. X. Xxxxx
Title: Vice President and
Treasurer
FIELDCREST XXXXXX
INTERNATIONAL, INC.
By:/s/ X. X. Xxxxx
Title: Vice President and
Treasurer
ST. MARY'S, INC.
By:/s/ X. X. Xxxxx
Title: Vice President and
Treasurer
FIELDCREST XXXXXX
TRANSPORTATION, INC.
By:/s/ X. X. Xxxxx
Title: President
FIELDCREST XXXXXX LICENSING, INC.
By:/s/ Xxxx X. Xxxxxxx, Xx.
Title: Vice President
FIELDCREST XXXXXX FINANCING, INC.
By:/s/ Xxxx X. Xxxxxxx, Xx.
Title: Vice President
FIELDCREST XXXXXX SURE FIT, INC.
By:/s/ X. X. Xxxxx
Title: Vice President and
Chief Financial Officer
