SIXTH AMENDMENT TO
CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT (hereinafter, this "Amendment")
is entered into as of January 29, 1999 among PLUMA, INC., a North Carolina
corporation (the "Borrower"), NATIONSBANK, N.A., as Agent for and on behalf of
the Lenders (the "Agent") and the Lenders. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings given to them in the
Credit Agreement.
RECITALS
WHEREAS, the Borrower, the Agent and the Lenders are parties to that
certain Credit Agreement dated as of April 23, 1998, as amended by that certain
First Amendment to Credit Agreement and Waiver between the Borrower and the
Agent for and on behalf of the Lenders dated as of August 27, 1998, by that
certain Second Amendment to Credit Agreement between the Borrower and the Agent
for and on behalf of the Lenders dated as of September 30, 1998, by that Third
Amendment to Credit Agreement between the Borrower and the Agent for and on
behalf of the Lenders dated as of November 16, 1998, by that certain Fourth
Amendment to Credit Agreement between the Borrower and the Agent for and on
behalf of the Lenders dated as of December 11, 1998 and by that certain Fifth
Amendment to Credit Agreement dated as of December 31, 1998 (as further amended,
modified, supplemented, extended or restated from time to time, the "Credit
Agreement").
WHEREAS, the Borrower and the Agent on behalf of the Lenders are parties
to that certain Forbearance Agreement dated as of November 16, 1998, as amended
by an Amendment to Forbearance Agreement dated as of December 31, 1998 and by a
Second Amendment to Forbearance Agreement dated as of the date hereof (as
further amended, modified, supplemented, extended or restated from time to time,
the "Forbearance Agreement"); and
WHEREAS, the parties desire to amend certain terms of the Credit
Agreement as set forth herein.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Reaffirmation of Existing Debt. The Credit Parties acknowledge and
confirm: (a) that the Agent, on behalf of the Lenders, has a valid and
enforceable first priority perfected security interest in the Collateral subject
only to certain Permitted Liens, (b) that the Borrower's obligation to repay the
outstanding principal amount of the Loans and reimburse the Issuing Lender for
any drawing on a Letter of Credit is unconditional and not subject to any
offsets, defenses or counterclaims, (c) that the Agent and the Lenders have
performed fully all of their respective obligations under the Credit Agreement,
the Forbearance Agreement and the other Credit Documents, and (d) by entering
into this Amendment, the Lenders do not waive or release any term
or condition of the Credit Agreement, the Forbearance Agreement or any of the
other Credit Documents or any of their rights or remedies under such Credit
Documents or applicable law or any of the obligations of any Credit Party
thereunder.
2. Amendments. The Credit Agreement is hereby amended in the following
respects:
(a) The definition of "Applicable Percentage" set forth in
Section 1.1 of the Credit Agreement is hereby amended and restated in
its entirety to read as follows:
"APPLICABLE PERCENTAGE" MEANS, FOR PURPOSES OF CALCULATING
(I) THE APPLICABLE INTEREST RATE FOR ANY REVOLVING LOAN OR ANY
TERM LOAN, (A) FOR EURODOLLAR LOANS, 3.75% FROM JANUARY 29, 1999
AND THEREAFTER AND (B) FOR BASE RATE LOANS, 3.00% FROM JANUARY
29, 1999 AND THEREAFTER, (II) THE APPLICABLE RATE OF THE UNUSED
FEE FOR ANY DAY FOR PURPOSES OF SECTION 3.5(B), .375% AND (III)
THE APPLICABLE RATE FOR THE LETTER OF CREDIT FEE FOR ANY DAY,
3.50%.
(b) The definition of "Borrowing Base" set forth in Section 1.1
of the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
"BORROWING BASE" MEANS, AS OF ANY DAY, THE SUM OF (A) 85%
OF ELIGIBLE RECEIVABLES, (B) 60% OF ELIGIBLE INVENTORY, IN EACH
CASE AS SET FORTH IN THE MOST RECENT BORROWING BASE CERTIFICATE
DELIVERED TO THE AGENT AND THE LENDERS IN ACCORDANCE WITH THE
TERMS OF SECTION 7.1(C) AND (C) DURING THE PERIOD (I) FROM AND
INCLUDING JANUARY 30, 1998 THROUGH AND INCLUDING MARCH 1, 1999,
$4,500,000 AND (II) AFTER MARCH 1, 1999, $0.
(c) Section 7.19 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
7.19 CONSULTANTS. THE BORROWER PREVIOUSLY HAS RETAINED
XXXXXXX AND COMPANY ("N&C") AND PRICEWATERHOUSE COOPERS,
L.L.P.("PWC") AS BUSINESS AND FINANCIAL CONSULTANTS FOR THE
BORROWER, AND BORROWER PREVIOUSLY HAS RETAINED THE XXXXXXXX GROUP
("TSG") AS A MANAGEMENT INFORMATION CONSULTANT. THE BORROWER
SHALL MAKE AVAILABLE TO THE LENDERS FROM TIME TO TIME APPROPRIATE
REPRESENTATIVES OF THE BORROWER'S CONSULTANTS TO REVIEW AND
DISCUSS WITH THE LENDERS THE RECOMMENDATIONS AND/OR REPORTS THAT
HAVE BEEN MADE BY ANY OF THE BORROWER'S CONSULTANTS TO AND/OR ON
BEHALF OF THE BORROWER (INCLUDING MAKING AVAILABLE TO THE LENDERS
COPIES OF ALL WRITTEN MATERIALS PROVIDED BY ANY OF THE BORROWER'S
CONSULTANTS TO THE BORROWER). THE LENDERS MAY ELECT TO ENGAGE, AT
THE EXPENSE OF THE BORROWER, A THIRD-PARTY EXPERT TO REVIEW ON
BEHALF OF THE LENDERS THE INFORMATION PREPARED BY ANY OF THE
BORROWER'S CONSULTANTS. THE BORROWER SHALL CAUSE THE BORROWER'S
CONSULTANTS, AS THE AGENT MAY REQUEST, (I) TO MEET PERIODICALLY
WITH THE AGENT TO REPORT UPON THE BORROWER'S CONSULTANTS'
FINDINGS, REPORTS AND
2
RECOMMENDATIONS AND (II) TO MEET WITH THE LENDERS TO REPORT ON
THE BORROWER'S CONSULTANTS' FINDINGS, REPORTS AND
RECOMMENDATIONS. THE BORROWER SHALL PAY ALL COSTS ASSOCIATED WITH
ITS RETENTION OF THE BORROWER'S CONSULTANTS. THE BORROWER SHALL
NOT TERMINATE PWC'S SERVICES UNLESS IT IMMEDIATELY REPLACES PWC
WITH A BUSINESS AND FINANCIAL CONSULTANT WITH SIMILAR EXPERIENCE
AND REPUTATION. THE BORROWER SHALL NOT DENY ANY OF THE BORROWER'S
CONSULTANTS ACCESS TO INFORMATION NECESSARY TO PERFORM ITS
SERVICES WITHIN THE SCOPE OF ITS ENGAGEMENT, PRIOR TO THE
EXPIRATION OF SUCH ENGAGEMENT. ALL REPORTS AND INFORMATION
PROVIDED BY THE BORROWERS' CONSULTANTS TO THE AGENT, THE LENDERS
OR ANY THIRD-PARTY EXPERT ENGAGED BY THE LENDERS SHALL BE SUBJECT
TO THE CONFIDENTIALITY PROVISIONS OF SECTION 11.15 HEREOF.
(d) Section 8.14 is hereby amended so that the reference to
"December 21, 1998" is changed to "January 29, 1999."
3. Miscellaneous.
(a) The term "Credit Agreement" as used in each of the Credit
Documents shall hereafter mean the Credit Agreement as amended by this
Amendment. Except as herein specifically agreed, the Credit Agreement,
and the obligations of the Credit Parties thereunder and under the other
Credit Documents, are hereby ratified and confirmed and shall remain in
full force and effect according to their terms.
(b) The Borrower hereby represents and warrants as follows:
(i) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(ii) This Amendment has been duly executed and delivered
by the Borrower and constitutes the Borrower's legal, valid and binding
obligations, enforceable in accordance with its terms, except as such
enforceability may be subject to (a) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(iii) No consent, approval, authorization or order of, or
filing, registration or qualification with, any court or governmental
authority or third party is required in connection with the execution,
delivery or performance by the Borrower of this Amendment.
(c) The Borrower represents and warrants to the Lenders that (i)
except for the representation contained in Section 6.2(a) with respect
to matters previously disclosed to the Lenders, the representations and
warranties of the Credit Parties set forth in Section 6 of the Credit
Agreement are true and correct as of the date hereof and (ii) other than
the
3
Acknowledged Events of Default (as defined in the Forbearance Agreement)
no unwaived event has occurred and is continuing which constitutes a
Default or an Event of Default.
(d) This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but
all of which shall constitute one and the same instrument. Delivery of
an executed counterpart of this Amendment by telecopy shall be effective
as an original and shall constitute a representation that an executed
original shall be delivered.
(e) The Borrower hereby releases the Agent, the Lenders, and the
Agent's and the Lenders' respective officers, employees,
representatives, agents, counsel and directors from any and all actions,
causes of action, claims, demands, damages and liabilities of whatever
kind or nature, in law or in equity, now known or unknown, suspected or
unsuspected to the extent that any of the foregoing arises from any
action or failure to act on or prior to the date hereof.
(f) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF
NORTH CAROLINA.
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.
PLUMA, INC., a North Carolina corporation
By:______________________________________
Name:____________________________________
Title:___________________________________
NATIONSBANK, N.A., as Agent for and on
behalf of the Lenders
By:______________________________________
Name:____________________________________
Title:___________________________________
4
