FIFTH AMENDMENT TO CREDIT AGREEMENT
Exhibit 10.1
FIFTH AMENDMENT TO CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of July 30, 2013, is entered into by and among THE XXXXX GROUP, INC., a Tennessee corporation (“Xxxxx”), CANDLEWICK YARNS, LLC, an Alabama limited liability company (“Candlewick”), FABRICA INTERNATIONAL, INC., a California corporation (“Fabrica”), MASLAND CARPETS, LLC, a Georgia limited liability company (“Masland”; together with Xxxxx, Candlewick and Fabrica, are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as the “Borrowers”), THE PERSONS IDENTIFIED AS THE LENDERS ON THE SIGNATURE PAGES HERETO (the “Lenders”), and XXXXX FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”).
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, dated as of September 13, 2011, as amended by the First Amendment to Credit Agreement, dated as of November 2, 2012, the Second Amendment to Credit Agreement, dated as of April 1, 2013, the Third Amendment to Credit Agreement, dated as of May 22, 2013, and the Fourth Amendment to Credit Agreement, dated as of July 1, 2013 (as amended hereby and as the same may be further amended, modified, supplemented, renewed, restated or replaced, the “Credit Agreement”), among Agent, the Lenders and the Borrowers, the Lenders have made loans and advances and provided other financial accommodations to the Borrowers; and
WHEREAS, the Borrowers have requested that Agent and Lenders enter into this Amendment to make certain changes to the Credit Agreement effective on (and subject to the occurrence of) the Fifth Amendment Effective Date; and
WHEREAS, Agent and the Lenders are willing to amend the Credit Agreement as set forth herein.
NOW, THEREFORE, in consideration of the agreements herein contained and other good and valuable consideration, the parties hereby agree as follows:
I. | DEFINITIONS |
1.1. Interpretation. Unless otherwise defined herein or the context otherwise requires, terms used in this Amendment, including its preamble and recitals, have the meanings provided in the Credit Agreement.
1.2. Additional Definitions. As used herein, the following terms shall have the meanings given to them below, and the Credit Agreement is hereby amended to include, in addition and not in limitation, the following:
“Fifth Amendment” means the Fifth Amendment to Credit Agreement, dated as of July 30, 2013, by and among Borrowers, Lenders and Agent, as acknowledged and agreed to by the Guarantors.
“Fifth Amendment Effective Date” shall have the meaning given to such term in Section IV of the Fifth Amendment.
1.3. Amendments to Definitions
(a)Fixed Asset Availability Amount. Schedule 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Fixed Asset Availability Amount” in its entirety and replacing it with the following:
“ 'Fixed Asset Availability Amount' means, as of any date of determination following the Fifth Amendment Effective Date, the lesser of (a) $15,500,000, and (b) the sum of (i) 85% of the net orderly liquidation value of Eligible M&E of Borrowers set forth in an appraisal of such Eligible M&E conducted by an appraisal company selected by Agent, plus (ii) 75% of the fair market value (as determined on the basis of a 12-month sale period) of Eligible Real Property of Borrowers (other than the Xxxxx Xxxxxx Real Property) set forth in an appraisal of such Eligible Real Property conducted by an appraisal company selected by Agent, as such lesser amount shall be reduced on a monthly basis (on the first day of each calendar month, commencing on September 1, 2013) on (A) a 10-year straight-line amortization schedule from September 1, 2013 through and including August 1, 2014, (B) an 8.5-year straight-line amortization schedule from September 1, 2014 through and including August 1, 2015, and (C) a 7-year straight-line amortization schedule from and after September 1, 2015. In no event shall any increase in the appraised value of any Eligible M&E or Eligible Real Property, as set forth in any appraisal obtained after the Fifth Amendment Effective Date, be taken into account in the calculation of the Fixed Asset Availability Amount.”
(b)Maximum Revolver Amount. Schedule 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Maximum Revolver Amount” in its entirety and replacing it with the following:
“ 'Maximum Revolver Amount' means $130,000,000, as such amount may be increased by the amount of Additional Commitment Amounts in accordance with Section 2.2 of the Agreement or decreased by the amount of reductions in the Commitments made in accordance with Section 2.4(c) of the Agreement.”
(c)Xxxxx Xxxxxx Real Property Availability Amount. Schedule 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Xxxxx Xxxxxx Real Property Availability Amount” in its entirety and replacing it with the following:
“ 'Xxxxx Xxxxxx Real Property Availability Amount' means, as of any date of determination following the Fifth Amendment Effective Date, the lesser of (a) $13,500,000, and (b) 75% of the fair market value (as determined on the basis of a 12-month sale period) of the Xxxxx Xxxxxx Real Property set forth in an appraisal thereof conducted by an appraisal company selected by Agent, as such lesser amount is reduced on a monthly basis (on the first day of each calendar month, commencing on September 1, 2013) on a 15-year straight-line amortization schedule. In no event shall any increase in the appraised value of the Xxxxx Xxxxxx Real Property, as set forth in any appraisal obtained after the Fifth Amendment Effective Date, be taken into account in the calculation of the Xxxxx Xxxxxx Real Property Availability Amount.”
(d)Trigger Level. Schedule 1.1 of the Credit Agreement is hereby amended by deleting the definition of “Trigger Level” in its entirety and replacing it with the following:
“ 'Trigger Level' means $14,440,000.”
II. | MATURITY |
Section 3.3 of the Credit Agreement is amended by deleting such Section in its entirety and replacing it with the following:
“3.3 Maturity. This Agreement shall continue in full force and effect for a term ending on August 1, 2018 (the “Maturity Date”). The foregoing notwithstanding, the Lender Group, upon the election of the Required Lenders, shall have the right to terminate its obligations under this Agreement immediately and without notice upon the occurrence and during the continuation of an Event of Default.”
III. | SCHEDULES TO CREDIT AGREEMENT |
Schedule C-1 to the Credit Agreement (Commitments) is hereby amended by deleting such schedule in its entirety and replacing it with Schedule C-1 to this Amendment.
IV. | CONDITIONS PRECEDENT |
This Amendment shall become effective as of the date hereof (the “Fifth Amendment Effective Date”), subject to the following conditions precedent having been satisfied or waived by Agent:
4.1. Execution of Amendment. Agent shall have received fully executed counterparts of this Amendment.
4.2. Amendment Fee. Agent shall have received an amendment fee in the amount of $125,000 to be apportioned on a pro-rata basis among the Lenders according to each Lender's Commitment, and Borrowers hereby authorize Agent to charge the Loan Account for such amendment fee.
4.3. Accuracy of Representations and Warranties. Each of the representations and warranties of the Loan Parties set forth in Section 4 of the Credit Agreement shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof).
4.4. Other Documents. Agent shall have received such other agreements, documents, instruments and information executed and/or delivered by the Loan Parties as Agent may reasonably request.
V. | MISCELLANEOUS |
5.1. No Additional Obligations. The Borrowers acknowledge and agree that the execution, delivery and performance of this Amendment shall not create (nor shall the Borrowers rely upon the existence of or claim or assert that there exists) any obligation of any of Agent or Lenders to consider or agree to any other amendment of or waiver or consent with respect to the Credit Agreement or any other instrument or agreement to which Agent or any Lender is a party (collectively, an “Additional Amendment” or “Consent”), and in the event that Agent and the Lenders subsequently agree to consider any requested Additional Amendment or Consent, neither the existence of this Amendment nor any other conduct of Agent or the Lenders related hereto, shall be of any force or effect on the Lenders' consideration or decision with respect to any such requested Additional Amendment or Consent, and the Lenders shall not have any obligation whatsoever to consider or agree to any such Additional Amendment or Consent.
5.2. Acknowledgments and Stipulations. In order to induce Agent and Lenders to enter into this Amendment, each Borrower acknowledges, stipulates and agrees that (a) the Loan Documents executed by each Borrower are legal, valid and binding obligations of such Borrower enforceable against such Borrower in accordance with their respective terms, except as enforcement may be limited by equitable principles or by bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or limiting creditors' rights generally; (b) the Liens granted by each Borrower to Agent in the Collateral are valid and duly perfected, first priority Liens, subject only to Permitted Liens; (c) each of the recitals contained at the beginning of this Amendment is true and correct; and (d) prior to executing this Amendment, each Borrower consulted with and had the benefit of advice of legal counsel of its own selection and has relied upon the advice of such counsel, and in no part upon the representation of Agent, any Lender or any counsel to Agent or any Lender concerning the legal effects of this Amendment or any provision hereof.
5.3. Additional Representations and Warranties of the Borrowers. Each Borrower hereby represents and warrants that on the Fifth Amendment Effective Date and after giving effect to the amendments and waivers contained herein: (a) the representations and warranties contained in Section 4 of the Credit Agreement shall be correct in all material respects on and as of such date as though made on and as of such date, (b) no Default or Event of Default exists under the Credit Agreement on and as of such date. Without limitation of the preceding sentence, each Borrower hereby expressly re-affirms the validity, effectiveness and enforceability of each Loan Document to which it is a party (in each case, as the same may be modified by the terms of this Amendment).
5.4. Effect of this Agreement. Except as expressly amended pursuant hereto, no other changes or modifications to the Credit Agreement or any of the other Loan Documents are intended or implied, and in all other respects, the Credit Agreement and each of the other Loan Documents is hereby specifically ratified, restated and confirmed by all parties hereto as of the date hereof. To the extent that any provision of the Credit Agreement or any of the other Loan Documents are inconsistent with the provisions of this Amendment, the provisions of this Amendment shall control. All references in the Credit Agreement (including without limitation the Schedules thereto) to the “Agreement” and all references in the other Loan Documents to the “Credit Agreement” shall be deemed to refer to the Credit Agreement, as amended hereby.
5.5. Further Assurances. The Loan Parties shall execute and deliver such additional documents and take such additional action as may be reasonably requested by Agent to effectuate the provisions and purposes hereof.
5.6. Governing Law. THE VALIDITY OF THIS AMENDMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF GEORGIA.
5.7. Binding Effect. This Amendment shall bind and inure to the benefit of the respective successors and permitted assigns of each of the parties hereto.
5.8. Counterparts; Electronic Execution. This Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same agreement. Delivery of an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart of this Amendment. Any party delivering an executed counterpart of this Amendment by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart
of this Amendment but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Amendment.
5.9. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
[Remainder of Page Intentionally Left Blank]
Each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.
BORROWERS: | THE XXXXX GROUP, INC. By: /s/ Xxx X. Xxxxxxxx Name: Xxx X. Faulkner Title: VP/CFO |
CANDLEWICK YARNS, LLC By: /s/ Xxx X. Xxxxxxxx Name: Xxx X. Faulkner Title: President | |
FABRICA INTERNATIONAL, INC. By: /s/ Xxx X. Xxxxxxxx Name: Xxx X. Faulkner Title: President | |
MASLAND CARPETS, LLC By: /s/ Xxx X. Xxxxxxxx Name: Xxx X. Faulkner Title: President | |
AGENT AND LENDERS: | XXXXX FARGO CAPITAL FINANCE, LLC, as Agent and as a Lender By: /s/ Xxxx X. Xxxxxxxx, Xx. Name: Xxxx X. Xxxxxxxx, Xx. Title: Vice President |
BANK OF AMERICA, N.A., as a Lender By: /s/ Xxxxxx X. X. Xxxxx Name: Xxxxxx X. X. Moore Title: Senior Vice President | |
GUARANTOR'S ACKNOWLEDGEMENT
The undersigned, a guarantor of the “Obligations” of THE XXXXX GROUP, INC., a Tennessee corporation (“Xxxxx”), CANDLEWICK YARNS, LLC, an Alabama limited liability company (“Candlewick”), FABRICA INTERNATIONAL, INC., a California corporation (“Fabrica”), MASLAND CARPETS, LLC, a Georgia limited liability company (“Masland”; together with Xxxxx, Candlewick and Fabrica, are referred to hereinafter each individually as a “Borrower”, and individually and collectively, jointly and severally, as the “Borrowers”), under and as defined in that certain Credit Agreement, dated as of September 13, 2011, as amended by the First Amendment to Credit Agreement, dated as of November 2, 2012, the Second Amendment to Credit Agreement, dated as of April 1, 2013, the Third Amendment to Credit Agreement, dated as of May 22, 2013, the Fourth Amendment to Credit Agreement, dated as of July 1, 2013, and the Fifth Amendment to Credit Agreement (the “Fifth Amendment”), dated as of the date hereof (as amended, restated, supplemented, or otherwise modified prior to the date hereof, the “Credit Agreement”) among the Borrowers, the lenders party thereto (the “Lenders”), XXXXX FARGO CAPITAL FINANCE, LLC, a Delaware limited liability company, as administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, the “Agent”), hereby (a) acknowledges receipt of the foregoing Fifth Amendment; (b) consents to the terms thereof and the execution thereof by the Borrowers; (c) reaffirms its obligations pursuant to the terms of the Guaranty Agreement, dated as of September 13, 2011, by the undersigned in favor of Agent and Lenders (the “Guaranty”); and (d) acknowledges that Agent and the Lenders may amend, restate, extend, renew or otherwise modify the Credit Agreement and any indebtedness or agreement of the Borrowers, or enter into any agreement or extend additional or other credit accommodations to the Borrowers, without notifying or obtaining the consent of the undersigned and without impairing the liability of the undersigned under the Guaranty for the Borrowers' present and future Obligations. Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement.
C-KNIT APPAREL, INC. By: /s/ Xxx X. Xxxxxxxx Name: Xxx X. Faulkner Title: President | |
SCHEDULE C-1
TO
FIFTH AMENDMENT TO CREDIT AGREEMENT
SCHEDULE C-1 (Commitments)
Lender | Commitment | ||
Xxxxx Fargo Capital Finance, LLC | $ | 65,000,000 | |
Bank of America, N.A. | $ | 65,000,000 | |
Total | $ | 130,000,000 | |
C-1
