Execution Copy
FOURTH AMENDMENT
This Fourth Amendment (the "Amendment") is dated as of
October 4, 2004 among GFSI, Inc., a Delaware corporation (the "Borrower"),
GFSI Holdings, Inc., a Delaware corporation ("Holdings"), each of the
financial institutions party thereto (such financial institutions, together
with their successors and assigns, are referred to herein each individually as
a "Lender" and collectively as the "Lenders"), and Bank of America, N.A., as
agent for the Lenders (in its capacity as agent, the "Agent").
Recitals
Borrower, Holdings, Lenders and Agent have entered into that
certain Credit Agreement dated as of March 28, 2002 (as it has been or may
hereafter be amended, restated, supplemented, extended or otherwise modified,
the "Credit Agreement"), and
Borrower, Holdings, Agent and Lenders have agreed to amend
certain provisions of the Credit Agreement as set forth herein.
Agreement
Therefore, in consideration of the mutual execution of this
Amendment and other good and valuable consideration, the parties to this
Amendment agree as follows:
1. Definitions. Capitalized terms that are used in this
Amendment but are not otherwise defined in this Amendment have the meanings
ascribed to them in the Credit Agreement.
2. Amendments to Credit Agreement.
(a) The definition of "Fixed Asset Amount" set forth in
Annex A to Credit Agreement is hereby amended and restated to read in its
entirety as follows:
"Fixed Asset Amount" means an amount equal to
$8,720,000; provided, however, that such amount shall
decrease by $500,000 on the first day of each calendar
quarter, commencing on the calendar quarter beginning on
October 1, 2004. The Fixed Asset Amount shall increase by an
additional amount equal to the lesser of (i) 70% of the
appraised fair market value of the Real Estate owned by
Borrower located at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxx
Xxxxxx, Xxxx (the "Bedford Property") or (ii) $329,000 at
such time when Agent shall have received each of the
following agreements and documents in respect of the Bedford
Property, in form and substance reasonably satisfactory to
the Agent and the Lenders in their sole discretion: (i) duly
executed first-priority Mortgage by Borrower in favor of
Agent and related UCC fixture filing, (ii) survey and title
insurance policy, (iii) flood certificates, (iv) Phase I
environmental site assessment, (v) a legal opinion of an
Iowa local counsel reasonably satisfactory to Agent and
Lenders, (v) an appraisal in form and substance, and
prepared by an appraiser reasonably satisfactory to Agent,
Lenders and Borrower, and (vi) any other documents,
agreements or certificates reasonable requested by Agent or
Lenders in connection therewith.
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(b) The definition of "Stated Termination Date" set forth
in Annex A to Credit Agreement is hereby amended and restated to read in its
entirety as follows:
"Stated Termination Date" means January 15, 2007 or
the date to which this Agreement is extended pursuant to
Section 10.1.
3. Conditions to Effectiveness. This Amendment shall become
effective when each of the following conditions precedent has been met:
(a) Amendment. Each of Agent, Borrower, Holdings and
Lenders shall have delivered to Agent duly executed counterparts to this
Amendment; and
(b) Reaffirmation of Guaranty. Holdings shall have
executed and delivered to Agent the Reaffirmation of Guaranty attached to this
Amendment.
4. Representations and Warranties. In order to induce the
Agent and each Lender to enter into this Amendment, each of Borrower and
Holdings hereby represents and warrants to the Agent and each Lender, which
representations and warranties shall survive the execution and delivery of
this Amendment, that:
(a) all of the representations and warranties contained
in the Credit Agreement and in each Loan Document are true and correct as of
the date hereof after giving effect to this Amendment (determined as if all
references to "Closing Date" were references to October 4, 2004), except to
the extent that any such representations and warranties expressly relate to an
earlier date;
(b) the execution, delivery and performance by Borrower
and Holdings of this Amendment has been duly authorized by all necessary
corporate action required on its part and this Amendment, and the Credit
Agreement is the legal, valid and binding obligation of Borrower and Holdings
enforceable against Borrower and Holdings in accordance with its terms, except
as its enforceability may be affected by the effect of bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors generally;
(c) neither the execution, delivery and performance of
this Amendment by Borrower and Holdings, the performance by Borrower and
Holdings of the Credit Agreement nor the consummation of the transactions
contemplated hereby does or shall contravene, result in a breach of, or
violate (i) any provision of Borrower's or Holdings' certificate or articles
of incorporation or bylaws or other similar documents, or agreements, (iii)
any law or regulation, or any order or decree of any court or government
instrumentality, or (iii) any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which Borrower, Holdings or any of their
Subsidiaries is a party or by which Borrower, Holdings or any of their
Subsidiaries or any of their property is bound, except in any such case to the
extent such conflict or breach has been waived herein or by a written waiver
document, a copy of which has been delivered to Agent on or before the date
hereof; and
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(d) No Default or Event of Default has occurred and is
continuing.
5. Reference to and Effect Upon the Credit Agreement.
(a) Except as specifically set forth above, the Credit
Agreement and the other Loan Documents shall remain in full force and effect
and are hereby ratified and confirmed; and
(b) The amendments set forth herein is effective solely
for the purposes set forth herein and shall be limited precisely as written,
and shall not be deemed to (i) be a consent to any amendment, waiver or
modification of any other term or condition of the Credit Agreement or any
other Loan Document, (ii) operate as a waiver or otherwise prejudice any
right, power or remedy that the Agent or the Lenders may now have or may have
in the future under or in connection with the Credit Agreement or any other
Loan Document or (iii) constitute a waiver of any provision of the Credit
Agreement or any Loan Document, except as specifically set forth herein. Upon
the effectiveness of this Amendment, each reference in the Credit Agreement to
"this Agreement", "herein", "hereof" and words of like import and each
reference in the Credit Agreement and the Loan Documents to the Credit
Agreement shall mean the Credit Agreement as amended hereby. This Amendment
shall be construed in connection with and as part of the Credit Agreement.
6. Costs and Expenses. As provided in Section 13.7 of the
Credit Agreement, Borrower will reimburse Agent for all reasonable costs and
expenses that Agent incurs (including reasonable attorneys' costs) in
connection with the preparation, execution, delivery and administration of
this Amendment (and the other documents to be delivered in connection with
this Amendment).
7. GOVERNING LAW. THIS AMENDMENT SHALL BE INTERPRETED AND
THE RIGHTS AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH
THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE
OF ILLINOIS; PROVIDED THAT THE AGENT AND THE LENDERS SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.
8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute part of this
Amendment for any other purposes.
9. Counterparts. This Amendment may be executed in any
number of counterparts, each of which when so executed shall be deemed an
original, but all such counterparts shall constitute one and the same
instrument.
[The remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties to this Amendment have
caused it to be duly executed as of the day and year first above written.
"BORROWER"
GFSI, INC.
By: /s/ J. Xxxxx Xxxxxxxx
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Name: J. Xxxxx Xxxxxxxx
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Title: CFO
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"HOLDINGS"
GFSI HOLDINGS, INC.
By: /s/ J. Xxxxx Xxxxxxxx
-----------------------------------------
Name: J. Xxxxx Xxxxxxxx
---------------------------------------
Title: CFO
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[Signature Page to the Fourth Amendment to Credit Agreement]
"AGENT"
BANK OF AMERICA, N.A., as the Agent
By: /s/ Xxx Xxxxxx
-----------------------------------------
Name: Xxx Xxxxxx
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Title: V.P.
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"LENDERS"
BANK OF AMERICA, N.A., as a Lender
By: /s/ Xxx Xxxxxx
-----------------------------------------
Name: Xxx Xxxxxx
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Title: V.P.
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S-2
[Signature Page to the Fourth Amendment to Credit Agreement]
THE CIT GROUP/COMMERCIAL
SERVICES, INC., as a Lender
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
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Title: VP
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[Signature Page to the Fourth Amendment to Credit Agreement]
U.S. BANK NATIONAL
ASSOCIATION, as a Lender
By: /s/ Xxxxxx Xxxxxxxx
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Name: Xxxxxx Xxxxxxxx
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Title: Vice President
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S-4
[Signature Page to the Fourth Amendment to Credit Agreement]
Reaffirmation of Guaranty
The undersigned Guarantor (i) hereby acknowledges the
receipt of the Amendment, (ii) acknowledges and reaffirms all of Guarantor's
obligations and undertakings under the Guaranty, dated as of March 28, 2002,
between the undersigned and Agent (as amended, restated or otherwise modified
from time to time, the "Guaranty"), and (iii) acknowledges and agrees that
subsequent to, and taking into account such Amendment and the transactions
contemplated thereby, the Guaranty is and shall remain in full force and
effect in accordance with the terms thereof.
GFSI HOLDINGS, INC.
By: /s/ J. Xxxxx Xxxxxxxx
-----------------------------------------
Name: J. Xxxxx Xxxxxxxx
---------------------------------------
Title: CFO
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S-5
[Signature Page to the Reaffirmation of Guaranty]
