Exhibit 99.2
FIRST AMENDMENT
TO REVOLVING CREDIT AND
GUARANTY AGREEMENT
FIRST AMENDMENT, dated as of March 13, 2002 (the "Amendment"), to the
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REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of February 20, 2002, among
XXXXX & LORD, INC., a Delaware corporation (the "Borrower"), a debtor and
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debtor-in-possession under Chapter 11 of the Bankruptcy Code, the Guarantors
named therein (the "Guarantors"), FIRST UNION NATIONAL BANK, a national banking
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corporation ("FUNB"), each of the other financial institutions from time to time
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party thereto (together with FUNB, the "Banks") and FIRST UNION NATIONAL BANK,
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as Agent for the Banks (in such capacity, the "Agent"):
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W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent are
parties to that certain Revolving Credit and Guaranty Agreement, dated as of
February 20, 2002 (as the same may be amended, modified or supplemented from
time to time, the "Credit Agreement"); and
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WHEREAS, the Borrower and the Guarantors have requested that from and
after the Effective Date (as hereinafter defined) of this Amendment, the Credit
Agreement be amended subject to and upon the terms and conditions set forth
herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. As used herein, all terms that are defined in the Credit
Agreement shall have the same meanings herein.
2. Section 1.01 of the Credit Agreement is hereby amended by
inserting the following new definitions in appropriate alphabetical order:
"Account" shall mean any right to payment for goods sold
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or leased or for services rendered, whether or not earned by
performance.
"Account Debtor" shall mean, with respect to any Account,
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the obligor with respect to such Account.
"Adjusted Eligible Finished Goods" shall mean, on any
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date, Eligible Finished Goods minus Inventory Reserves.
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"Adjusted Eligible Raw Materials" shall mean, on any date,
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Eligible Raw Materials minus Inventory Reserves.
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"Adjusted Eligible Stock-in-Process" shall mean, on any
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date, Eligible Stock-in-Process minus Inventory Reserves.
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"Adjusted Eligible Weaving-in-Process" shall mean, on any
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date, Eligible Weaving-in-Process minus Inventory Reserves.
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"Dilution Percentage" shall mean, on any date, expressed
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as a percentage, the total of all non-cash credits or reductions
of the Borrower's accounts receivable for the last twelve months
(calculated on a rolling basis monthly) divided by gross sales
for the same period.
"Dilution Reserve" shall mean, on any date, (a) the
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Dilution Percentage minus 5% multiplied by (b) gross sales for
any period of measurement (to the extent non-negative).
"Eligible Accounts Receivable" shall mean, at the time of
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any determination, the gross outstanding balance at such time,
determined in accordance with GAAP and stated on a basis
consistent with the historical practices of the Borrower or the
Guarantors (as applicable) as of the date hereof, of Accounts of
the Borrower or the Guarantors (as the case may be) less, as
applicable and without duplication, the aggregate amount of (i)
all accrued rebates, (ii) all trade discounts, (iii) all finance
charges, late fees and other fees that are unearned, (iv) all
reserves for service fees and such other fees or commissions or
similar amounts that the Borrower or the Guarantors (as
applicable) have agreed to pay, (v) all cash received in respect
of Accounts but not yet applied by the Borrower or the Guarantors
(as applicable) to reduce the amount of the Accounts, and (vi)
any Account deemed ineligible for inclusion in the calculation of
the Borrowing Base pursuant to any of clauses (a) through (r)
below or otherwise deemed by the Agent in its reasonable
discretion to be ineligible for inclusion in the calculation of
the Borrowing Base as described below. Without limiting the
foregoing, to qualify as an Eligible Account Receivable, an
Account shall indicate as sole payee and as sole remittance party
the Borrower or the Guarantors (as the case may be). Standards of
eligibility may be fixed from time to time solely by the Agent in
the exercise of its reasonable discretion, with any changes in
such standards to be effective five (5) days after delivery of
notice thereof to the Borrower or the Guarantors (as applicable).
Unless
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otherwise approved from time to time in writing by the Agent, no
Account shall be an Eligible Account Receivable if, without
duplication:
(a) the Borrower or the Guarantors (as applicable) do not
have sole lawful and absolute title to such Account; or
(b) it arises out of a sale made by the Borrower or the
Guarantors (as applicable) to an employee, officer, agent,
director, stockholder, or Affiliate of the Borrower or the
Guarantors (as applicable); or
(c) the Account Debtor (i) is a creditor of the Borrower
or the Guarantors (as applicable), (ii) has or has asserted a
right of set-off against the Borrower or the Guarantors (as
applicable) (unless such Account Debtor has entered into a
written agreement reasonably acceptable to the Agent to waive
such set-off rights) or (iii) has disputed its liability (whether
by chargeback or otherwise) or made any asserted or unasserted
claim with respect to the Account or any other Account of the
Borrower or the Guarantors (as applicable) which has not been
resolved, in each case, without duplication, to the extent of the
amount owed by such Borrower or Guarantors (as applicable) to the
Account Debtor, the amount of such actual or asserted right of
set-off, or the amount of such dispute or claim, as the case may
be (without duplication for non-cash credits taken into
consideration in calculating Dilution Percentage); or
(d) the Account Debtor is insolvent or the subject of any
bankruptcy case or insolvency proceeding of any kind (other than
postpetition accounts payable of an Account Debtor that is a
debtor-in-possession under the Bankruptcy Code and acceptable to
the Agent); or
(e) the Account is not payable in Dollars or the Account
Debtor is either not incorporated under the laws of the United
States of America, any state thereof or the District of Columbia
or is located outside or has its principal place of business or
substantially all of its assets outside the United States (except
to the extent such Account is supported by an irrevocable letter
of credit or credit insurance issued by an institution acceptable
to the Agent in its reasonable discretion); or
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(f) the sale to the Account Debtor is on a delayed
shipment (or xxxx and hold) basis (provided that following
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shipment the related Account shall not be excluded from Eligible
Accounts Receivable solely as a result of this clause), or is
deemed ineligible at the reasonable discretion of the Agent,
guaranteed sale, sale-and-return, ship-and-return, sale on
approval, extended terms or consignment or other similar basis or
made pursuant to any other agreement providing for repurchase or
return of any merchandise which has been claimed to be defective
or otherwise unsatisfactory; or
(g) the goods giving rise to such Account have not been
shipped and title has not been transferred to the Account Debtor,
or the Account represents a progress-billing or otherwise does
not represent a completed sale; for purposes hereof,
"progress-billing" means any invoice for goods sold or leased or
services rendered under a contract or agreement pursuant to which
the Account Debtor's obligation to pay such invoice is
conditioned upon the Borrower or the Guarantors' (as applicable)
completion of any further performance under the contract or
agreement; or
(h) the Account does not comply in all material respects
with the requirements of all applicable laws and regulations,
whether Federal, state or local, including without limitation the
Federal Consumer Credit Protection Act, the Federal Truth in
Lending Act and Regulation Z of the Board; or
(i) the Account is subject to any adverse security
deposit, retainage or other similar advance made by or for the
benefit of the Account Debtor, in each case to the extent
thereof; or
(j) the Account is unpaid more than 60 days from the
original due date; or
(k) such Account was not paid in full, and the Borrower or
Guarantors (as applicable) created a new receivable for the
unpaid portion of the Account, without the agreement of the
customer, including without limitation chargebacks, debit memos
and other adjustments for unauthorized deductions; or
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(l) more than 50% of all Accounts of the particular
Account Debtor are over 60 days from the original due date, in
which case no Accounts of the particular Account Debtor shall be
Eligible Accounts Receivable; or
(m) such Account has a payment term that is greater than
90 days; or
(n) (i) it is not subject to a valid and perfected first
priority Lien in favor of the Agent for the benefit of the Banks,
subject to no other Liens other than the Liens (if any) permitted
by the Loan Documents or (ii) it does not otherwise conform in
all material respects to the representations and warranties
contained in the Loan Documents relating to Accounts; or
(o) as to all or any part of such Account, a check,
promissory note, draft, trade acceptance or other Instrument for
the payment of money has been received, presented for payment and
returned uncollected for any reason; or
(p) it has been written off the books of the Borrower or
the Guarantors (as applicable) or has been otherwise designated
as uncollectible; or
(q) the inclusion of such Account as an Eligible Account
Receivable would cause the aggregate amount of the Eligible
Accounts Receivable of a particular Account Debtor to exceed 15%
of the total Eligible Accounts Receivable, provided that with
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respect to Account Debtors, Levi Xxxxxxx & Co. and VF
Corporation, the amount of the Eligible Accounts Receivables of
each such Account Debtor shall not exceed 25% of the total
Eligible Accounts Receivable; or
(r) the Account is a non-trade Account, or relates to
payments for interest.
"Eligible Finished Goods" shall mean, on any date,
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Eligible Inventory defined as Finished Goods by the Borrower or
the Guarantors (as applicable) on such date as shown on the
Borrower or the Guarantors' (as applicable) perpetual inventory
records in accordance with its current and historical accounting
practices.
"Eligible Inventory" shall mean, at the time of any
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determination thereof, without duplication, the Inventory Value
of the Borrower or the Guarantors (as applicable) at
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the time of such determination that is not ineligible for
inclusion in the calculation of the Borrowing Base pursuant to
any of clauses (a) through (k) below, minus any Inventory
otherwise deemed by the Agent in its reasonable discretion to be
ineligible for inclusion in the calculation of the Borrowing Base
as described below. Without limiting the foregoing, to qualify as
"Eligible Inventory" no person other than the Borrower or the
Guarantors (as applicable) shall have any direct or indirect
ownership, interest or title to such Inventory and no person
other than the Borrower or the Guarantors (as applicable) shall
be indicated on any purchase order or invoice with respect to
such Inventory as having or purporting to have an interest
therein. Standards of eligibility may be altered from time to
time solely by the Agent in the exercise of its reasonable
judgment, with any changes in such standards to be effective 5
days after delivery of notice thereof to the Borrower or the
Guarantors (as applicable). Unless otherwise from time to time
approved in writing by the Agent, no Inventory shall be deemed
Eligible Inventory if, without duplication:
(a) the Borrower or the Guarantors (as applicable) do not
have sole and good, valid and unencumbered title thereto (except
for Permitted Liens); or
(b) it is not located in the United States; or
(c) from and after the date that is thirty (30) days after
the effective date of the Borrowing Base Amendment, it is not
located on property owned or leased by the Borrower or the
Guarantors (as applicable) or is located in a third party
warehouse in which a valid landlord waiver satisfactory in form
and substance to the Agent is not in full force or effect; or
(d) it is supplies, packing or shipping materials,
cartons, repair parts, labels or miscellaneous spare parts, dyes
or chemicals; or
(e) it is not subject to a valid and perfected first
priority Lien in favor of the Agent for the benefit of the Banks
(except for Permitted Liens); or
(f) it is Inventory that is deemed to be greater than one
year old; or
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(g) it is consigned or at a customer location but still
accounted for in the Borrower or the Guarantors' (as applicable)
perpetual inventory balance; or
(h) from and after the date that is thirty (30) days after
the effective date of the Borrowing Base Amendment, it is
Inventory which is being processed offsite at a third party
location or an outside processor in which a valid waiver with
each processor satisfactory in form and substance to the Agent is
not in full force or effect, or is in transit to or from the said
third party location or outside processor; or
(i) it is identified as overstock by the Borrower or the
Guarantors (as applicable); or
(j) it is in-transit to or from a foreign location, or is
part of a xxxx and hold arrangement from a vendor, which has not
yet been received into a facility owned or operated by the
Borrower or the Guarantors (as applicable); or
(k) it is Inventory used as a sample or prototype, if it
is not first quality; or
(l) it is Inventory which is recognized as damaged, off
quality, or not to customer specifications by the Borrower or the
Guarantors (as applicable) or in any way not first-quality
inventory.
"Eligible Raw Materials" shall mean, on any date, Eligible
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Inventory defined as Raw Materials by the Borrower or the
Guarantors (as applicable) on such date as shown on the Borrower
or the Guarantors' (as applicable) perpetual inventory records in
accordance with its current and historical accounting practices.
"Eligible Stock-in-Process" shall mean, on any date,
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Eligible Inventory defined as Stock-in-Process by the Borrower or
the Guarantors (as applicable) on such date as shown on the
Borrower or the Guarantors' (as applicable) perpetual inventory
records in accordance with its current and historical accounting
practices except that purchased yarn, which has been inspected by
the Borrower or the Guarantors (as applicable) and determined to
be first quality, and in all regards acceptable for use, and
which has
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yet to be involved in the manufacturing process in any way, shall
be considered Raw Materials.
"Eligible Weaving-in-Process" shall mean, on any date,
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Eligible Inventory defined as Weaving-in-Process by the Borrower
or the Guarantors (as applicable) on such date as shown on the
Borrower or the Guarantors' (as applicable) perpetual inventory
records in accordance with its current and historical accounting
practices.
"Finished Goods" shall mean completed goods which require
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no additional processing, to be sold in the ordinary course of
business.
"Xxxxx & Lord Industries" shall mean Xxxxx & Lord
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Industries, Inc., a subsidiary of the Borrower.
"Inventory" shall mean all Raw Materials,
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Stock-in-Process, Weaving-in-Process and Finished Goods held by
the Borrower or the Guarantors, as the case may be, in the normal
course of business.
"Inventory Reserves" shall mean, as to Inventory defined
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as Raw Materials, Stock-in-Process, Weaving-in-Process or
Finished Goods by the Borrower or the Guarantors (as applicable),
the sum of the following (as to such applicable category of
Inventory):
(a) a reserve for shrink, or discrepancies that arise
pertaining to inventory quantities on hand between the Borrower
or the Guarantors' (as applicable) perpetual accounting system
and physical counts of the inventory, which will be equal to the
greater of 1% or the results of the last physical count with the
variance expressed as a percentage, for Raw Materials,
Stock-in-Process, Weaving-in-Process and Finished Goods,
respectively; and
(b) a reserve for Inventory that is discontinued; and
(c) any other reserve as deemed appropriate by the Agent
in their sole discretion exercised reasonably, from time to time.
"Inventory Value" of any Inventory shall mean at the time
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of any determination thereof the standard cost carried on the
perpetual records of the Borrower or the Guarantors (as
applicable) in accordance with their current and historical
accounting practices, in Dollars, determined
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in accordance with the standard cost method of accounting less
(i) any markup on Inventory from an Affiliate and (ii) in the
event variances under the standard cost method (a) are
capitalized, favorable variances shall be deducted from Eligible
Inventory, and unfavorable variances shall not be added to
Eligible Inventory, and (b) are expensed, a reserve shall be
determined as appropriate in order to adjust the standard cost of
Eligible Inventory to approximate actual cost.
"Lower of Cost or Market Reserve" shall mean a reserve for
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differences between the Borrower or the Guarantors' (as
applicable) actual cost to produce versus their selling price to
third parties, determined on a product line basis.
"Qualified Xxxx and Hold Sales" shall mean, on any date,
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transactions involving the sale of Inventory to third parties,
which Inventory has not been shipped by the Borrower or the
Guarantors (as applicable) to the third party Account Debtor and
which transactions have the characteristics set forth in the
following sentence (it being understood that following shipment
such transactions shall no longer be treated as a Qualified Xxxx
and Hold Sale). Such transactions are transactions in which (i)
the Inventory is segregated and uniquely identified as being
Account Debtor owned in the systems and official records of the
Borrower or the Guarantors (as applicable); (ii) the Inventory is
not included in the Borrower or the Guarantors' (as applicable)
Inventory; (iii) title and risk of loss have passed to the
Account Debtor; (iv) sales are non-cancelable and payable sale
transactions under normal payment terms from the date of the
invoice; (v) the applicable terms qualify as a sale and account
receivable according to all applicable regulatory accounting
guidelines; (vi) the parties' obligations are evidenced by an
executed bilateral letter agreement or such other documentation
entered into by the Borrower or the Guarantors (as applicable)
with the Account Debtor in accordance with past practices
acceptable to its third party financial auditors; and (vii) the
Accounts are owed and due from Account Debtors that are based in
the United States (amounts being in U.S. Dollars) and that are
current and in compliance (in all respects) on all Accounts, and
otherwise meet the criteria set forth in items (c), (d), (h),
(i), (j), (k) through (q) in the definitions of Eligible Accounts
Receivable.
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"Raw Materials" shall mean materials used or consumed in
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the manufacturing of goods to be sold by the Borrower or the
Guarantors (as applicable) in the ordinary course of business,
such as xxxxx of cotton, xxxxx of greasy wool and purchased yarn.
"Run-Out Expenses" shall mean all costs and expenses
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whenever incurred and arising from the closing of production
facilities of the Borrower which occurred prior to the date
hereof, including, without limitation, costs associated with (i)
the carrying costs of buildings to be sold, (ii) the preparation
of equipment to be sold, (iii) costs related to employees who
have been terminated at such facilities, (iv) the storage of
Finished Goods and (v) workers compensation claims of employees
from such facilities, as set forth in the business plan delivered
to Agent, pursuant to Section 4.01(i).
"Stock-in-Process" shall mean product that has been
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removed from Raw Materials inventory and as to which the spinning
and/or production process has begun and which has not been
completed, tested and prepared for use as Raw Materials.
"Swift Textiles" shall mean Swift Textiles, Inc., a
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subsidiary of the Borrower.
"Total Commitment Usage" shall mean, at any time, the sum
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of (i) the aggregate outstanding principal amount of all Loans,
and (ii) the aggregate Letter of Credit Outstandings.
"Weaving-in-Process" shall mean yarn that has been removed
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from standard packaging and as to which the warping and/or the
production process has begun and which has not been completed,
tested and prepared for shipment as Finished Goods.
3. The definitions of the terms "Borrowing Base" and "Borrowing Base
Certificate" set forth in Section 1.01 of the Credit Agreement are hereby
amended in their entirety to read as follows:
"Borrowing Base" shall mean, on any date, the amount
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(calculated based on the most recent Borrowing Base Certificate
delivered pursuant to this Agreement) that is equal to (a) 85% of
Eligible Accounts Receivable, net of Dilution Reserve plus (b)
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40% of Adjusted Eligible Raw
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Materials for Xxxxx & Lord Industries and Swift Textiles plus (c)
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20% of Adjusted Eligible Stock-in-Process for Xxxxx & Lord
Industries and 15% of Adjusted Eligible Stock-in-Process for
Swift Textiles, plus (d) 35% of Adjusted Eligible
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Weaving-in-Process for Xxxxx & Lord Industries and 15% of
Adjusted Eligible Weaving-in-Process for Swift Textiles plus (e)
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45% of Adjusted Eligible Finished Goods for Xxxxx & Lord
Industries and 50% of Adjusted Eligible Finished Goods for Swift
Textiles plus (f) 50% of Qualified Xxxx and Hold Sales minus (g)
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the Carve-Out. Borrowing Base eligibility standards may be fixed
and revised from time to time by the Agent in its sole
discretion, exercised reasonably. The Borrowing Base shall be
subject to reserves from time to time established by the Agent
with any changes in such standards and reserves to be effective
five (5) days after delivery of notice thereof to the Borrower.
"Borrowing Base Certificate" shall mean a certificate
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substantially in the form of Exhibit E hereto (with such changes
therein as may be required by the Agent to reflect the components
of and reserves against the Borrowing Base as provided for
hereunder from time to time), executed and certified by a
Financial Officer of the Borrower, which shall include
appropriate exhibits and schedules as referred to therein and as
provided for in Section 5.08.
4. The definition of the term "EBITDA" set forth in Section 1.01 of
the Credit Agreement is hereby amended by (A) deleting the word "and" appearing
at the end of clause (viii) thereof and inserting in lieu thereof a "," and (B)
inserting the following new clause at the end of clause (ix) thereof immediately
preceding the word "less":
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"and (x) the Run-Out Expenses (but only to the extent that such
Run-Out Expenses do not exceed the amounts thereof permitted by
Section 6.13)".
5. Section 2.20 of the Credit Agreement is hereby amended in its
entirety by inserting the following:
SECTION 2.20. Commitment Fee. The Borrower shall pay to the Banks
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a commitment fee (the "Commitment Fee") for the period commencing
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on the Closing Date to the Termination Date or the earlier date
of termination of the Commitment, computed (on the basis of
actual number of days elapsed during the period over a year of
360 days) as follows: (A) at such time as First Union is no
longer the sole Bank, at the rate of (i) three-quarters of one
percent
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(3/4 of 1%) per annum on the average daily Unused Total
Commitment during the period for which the Commitment Fee is
calculated at all times during which the average Total Commitment
Usage is less than 25% of the Total Commitment and (ii) one-half
of one percent (1/2 of 1%) per annum on the average daily Unused
Total Commitment during the period for which the Commitment Fee
is calculated at all times during which the average Total
Commitment Usage is more than or equal to 25% of the Total
Commitment; or (B) at all times that First Union is the sole
Bank, at a rate of one-half of one percent (1/2 of 1%) per annum
on the average daily Unused Total Commitment during the period
for which the Commitment Fee is calculated. Such Commitment Fee,
to the extent then accrued, shall be payable (x) monthly, in
arrears, on the last calendar day of each month, (y) on the
Termination Date and (z) as provided in Section 2.10 hereof, upon
any reduction or termination in whole or in part of the Total
Commitment.
6. Section 3 of the Credit Agreement is hereby amended by inserting
the following new section:
SECTION 3.11. Historic EBITDA. EBITDA for the Borrower and the
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Guarantors for each fiscal month commencing with the month ending
in April 2001 through the month ending in January 2002 shall be
as set forth in Schedule 3.11.
7. Section 5.01(d) of the Credit Agreement is hereby amended by (A)
deleting the words "(a) and (b)" appearing in clause (i) thereof and inserting
in lieu thereof the following text: "(a), (b) and (c)"; and (B) deleting the
words "Sections 6.04 and 6.05" appearing in clause (i)(B) thereof and inserting
in lieu thereof the words "Sections 6.04, 6.05 and 6.13."
8. Section 5.07 of the Credit Agreement is hereby amended by
deleting the proviso at the end thereof and inserting in lieu thereof the
following:
"provided that the Borrower and the Guarantors may maintain up
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to an aggregate of $250,000 in deposit accounts other than the
principal concentration account maintained with the Agent."
9. Section 5.08 of the Credit Agreement is hereby amended in its
entirety by inserting the following:
SECTION 5.08. Borrowing Base Certificate. Furnish a Borrowing
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Base Certificate substantially in the form of
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Exhibit E to the Agent: (a) on or before the fifth Business Day
following the end of each week, which weekly Borrowing Base
Certificate shall reflect (i) the accounts receivable updated as
of Friday of each such week (which shall include and reflect for
the Borrower and the Guarantors the most recent Accounts
Receivable Aging Report in the form and substance satisfactory to
the Agent); and (ii) Inventory as of the end of the preceding
month, which shall be updated as of the twentieth (20th) Business
Day of each month (which shall include and reflect for the
Borrower and the Guarantors the most recent Open Orders History
in form and substance satisfactory to the Agent), and (b) if
requested by the Agent at any other time when the Agent
reasonably believes that the then existing Borrowing Base
Certificate is materially inaccurate, as soon as reasonably
available but in no event later than five (5) Business Days after
such request, a Borrowing Base Certificate showing the Borrowing
Base as of the date so requested, in each case with supporting
documentation; and shall be supplemented at any time by such
other supporting documentation and additional reports with
respect to the Borrowing Base as the Agent shall reasonably
request.
10. Section 5 of the Credit Agreement is hereby amended by deleting
Section 5.11 in its entirety.
11. Section 6.01 of the Credit Agreement is hereby amended by (A)
deleting the "and" at end of clause (iv) thereof and inserting in lieu thereof a
"," and (B) inserting the following new clause at the end thereof:
"and (vi) Liens in favor of the relevant taxing authority in an
amount not to exceed $550,000 upon the personal or real property
associated with the closed Xxxxx Denim Facility."
12. Section 6.05 of the Credit Agreement is hereby amended in its
entirety by inserting the following:
SECTION 6.05. EBITDA. Permit EBITDA for each 12-month period
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ending on the last day of each fiscal month listed below to be
less than the amount specified opposite such date:
12 Months Ending EBITDA
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March, 2002 $36,500,000
April, 2002 $34,100,000
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May, 2002 $34,000,000
June, 2002 $29,750,000
July, 2002 $30,500,000
August, 2002 $35,000,000
September, 2002 $29,750,000
October, 2002 $26,500,000
November, 2002 $26,000,000
December, 2002 $21,500,000
January, 2003 $22,500,000
February, 2003 $21,400,000
March, 2003 $22,300,000
April, 2003 $23,100,000
May, 2003 $24,000,000
June, 2003 $23,500,000
July, 2003 $24,500,000
August, 2003 $24,800,000
September, 2003 $24,000,000
13. Section 6.09 of the Credit Agreement is hereby amended by
inserting a "(i)" immediately following the words "except for" appearing therein
and inserting the following new clause at the end thereof:
"and (ii) the repayment of prior advances from Dimmit Industries
S.A. de C.V. (Mexico) and Confecciones Alta Loma S.A. de C.V.
(Mexico) in an aggregate amount not to exceed $500,000."
14. Section 6.10 of the Credit Agreement is hereby amended by
inserting the following text at the end thereof:
"; it being understood that the repayment of advances permitted
pursuant to clause (ii) of Section 6.09 will not constitute an
Investment as contemplated herein."
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15. Section 6 of the Credit Agreement is hereby amended by inserting
the following new Section:
SECTION 6.13. Run-Out Expenses. Permit Run-Out Expenses (i) for
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the period commencing on the effective date of the Borrowing Base
Amendment through and including June 30, 2002, to exceed $250,000
in any one fiscal month during such period, (ii) for the period
commencing on July 1, 2002 through and including October 31,
2002, to exceed $325,000 in any one fiscal month during such
period, or (iii) for the period commencing on November 1, 2002
through and including the Maturity Date, to exceed $200,000 in
any one fiscal month during such period.
16. The Credit Agreement is hereby further amended by adding a new
"Exhibit E" in the form attached hereto as Exhibit A.
17. The Credit Agreement is hereby further amended by adding a new
"Schedule 3.11" in the form attached hereto as Exhibit B.
18. The Credit Agreement is hereby further amended by deleting
Schedule 5.11 in its entirety.
19. This Amendment shall not become effective until the date (the
"Effective Date") on which this Amendment shall have been executed by the
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Borrower, the Guarantors and Banks representing the Required Banks, and the
Agent shall have received evidence satisfactory to it of such execution.
20. Except to the extent hereby amended, the Credit Agreement and
each of the Loan Documents remain in full force and effect and are hereby
ratified and affirmed.
21. The Borrower agrees that its obligations set forth in Section
10.05 of the Credit Agreement shall extend to the preparation, execution and
delivery of this Amendment, including the reasonable fees and disbursements of
special counsel to the Agent.
22. This Amendment shall be limited precisely as written and shall
not be deemed (a) to be a consent granted pursuant to, or a waiver or
modification of, any other term or condition of the Credit Agreement or any of
the instruments or agreements referred to therein or (b) to prejudice any right
or rights which the Agent or the Banks may now have or have in the future under
or in connection with the Credit Agreement or any of the instruments or
agreements referred to therein. Whenever the Credit Agreement is referred to in
the Credit Agreement or any of the instruments, agreements or other documents or
papers executed or delivered in connection therewith, such reference shall be
deemed to mean the Credit Agreement as modified by this Amendment.
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23. This Amendment may be executed in any number of counterparts and
by the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
24. This Amendment shall be governed by, and construed in accordance
with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
BORROWER:
XXXXX & LORD, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President, Secretary and Treasurer
GUARANTORS:
XXXXX & LORD INDUSTRIES, INC.
G&L SERVICE COMPANY,
NORTH AMERICA, INC.
SWIFT TEXTILES, INC.
SWIFT DENIM SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President, Secretary and Treasurer
XXXXX & LORD PROPERTIES, INC.
SWIFT DENIM PROPERTIES, INC.
GREENSBORO TEXTILE
ADMINISTRATION LLC
BRIGHTON WEAVING LLC
FLINT SPINNING LLC
SOCIETY HILL FINISHING LLC
XXXXXXXX WEAVING LLC
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Manager
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FIRST UNION NATIONAL BANK
Individually and as Agent
By: /s/ X.X. Xxxx
------------------------------------------
Name: X. X. Xxxx
Title: Director
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