Exhibit 10.1
SECOND AMENDMENT TO
CREDIT AGREEMENT AND WAIVER
THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER dated as of June 29,
1999 (the "Amendment") is entered into among Worldtex, Inc., a Delaware
corporation (the "Borrower"), the Domestic Subsidiaries of the Borrower, as
Guarantors, the Lenders party thereto and NationsBank, N.A., as Agent. All
capitalized terms used herein and not otherwise defined herein shall have the
meanings given to such terms in the Credit Agreement (as defined below).
RECITALS
--------
WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent entered
into that certain Credit Agreement dated as of December 1, 1997, as amended by
that certain First Amendment to Credit Agreement dated as of March 29, 1999 (as
further amended and modified from time to time, the "CREDIT AGREEMENT");
WHEREAS, the Borrower acknowledges that an Event of Default currently
exists under the Credit Agreement (the "EXISTING DEFAULT") as a result of the
failure of the Borrower and its Domestic Subsidiaries to comply with the terms
of Section 7.9(c) of the Credit Agreement as of the fiscal quarter ending March
31, 1999;
WHEREAS, the Borrower has requested that the Lenders waive the Existing
Default and continue to make available to the Borrower the Loans provided under
the Credit Agreement;
WHEREAS, the Lenders are willing to waive the Existing Default subject to
the terms and conditions specified in this Amendment;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for 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 security interest in the Collateral, (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, to the best of their knowledge, the Agent and the Lenders have performed
fully all of their respective obligations under the Credit Agreement and the
other Credit Documents, and (d) by entering into this Amendment, the Lenders do
not waive (except as specifically provided in Section 2 hereof) or release any
term or condition of the Credit 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. WAIVER. Subject to the other terms and conditions of this Amendment, the
Agent and the Lenders hereby waive the Existing Default. Except for the waiver
contained herein, this Amendment does not modify or affect the obligations of
the Credit Parties to comply fully with all terms, conditions and covenants
contained in the Credit Documents. This waiver is limited solely to the Existing
Default as of the date thereof, and nothing contained in this Amendment shall be
deemed to constitute a waiver of any other rights or remedies the Agent or any
Lender may have under the Credit Agreement or any other Credit Documents or
under applicable law.
3. AMENDED DEFINITION.
(a) The definition of "CURRENT RATIO" set forth in Section 1.1 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:
"CURRENT RATIO" means, as of the last day of any fiscal quarter of the
Borrower, with respect to the Borrower and its Subsidiaries on a
consolidated basis, the ratio of Current Assets on such day to Current
Liabilities on such day.
4. CURRENT RATIO. Section 7.9(c) of the Credit Agreement is hereby amended
and restated in its entirety to read as follows:
(a) CURRENT RATIO. There shall be maintained with respect to the
Borrower and its Subsidiaries as of the end of each fiscal quarter to occur
during the periods shown, a Current Ratio greater than:
(i) From April 1, 1999 to and including March 30, 2000, 2.35 to 1.0;
and
(ii) From March 31, 2000 and thereafter, 2.75 to 1.0.
5. CONDITIONS PRECEDENT. The effectiveness of this Amendment is subject to
the satisfaction of each of the following conditions:
(a) The Agent shall have received original counterparts of this
Amendment duly executed by the Borrower, the Guarantors and the Required
Lenders; and
(b) The Agent shall have received an opinion from the counsel to the
Credit Parties as to authority, enforceability and such other matters as
may be required by the Agent.
6. 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 and the Guarantors, as applicable, affirm the liens
and security interests created and granted in the Credit Agreement and the
Credit Documents and agree that this Amendment shall in no manner adversely
affect or impair such liens and security interests.
(c) The Borrower and the Guarantors hereby represent and warrant as
follows:
(i) Each Credit Party 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 Credit
Parties and constitutes each of the Credit Parties' legal, valid and
binding obligations, enforceable in accordance with its terms, except as
such enforceability may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (ii) 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 any Credit Party of this Amendment.
(d) The Credit Parties represent and warrant to the Lenders that (i)
the representations and warranties of the Credit Parties set forth in
Section 6 of the Credit Agreement and in each other Credit Document are
true and correct as of the date hereof with the same effect as if made on
and as of the date hereof, except to the extent such representations and
warranties expressly relate solely to an earlier date and (ii) no unwaived
event has occurred and is continuing which constitutes a Default or an
Event of Default.
(e) The Guarantors (i) acknowledge and consent to all of the terms and
conditions of this Amendment, (ii) affirm all of their obligations under
the Credit Documents and (iii) agree that this Amendment and all documents
executed in connection herewith do not operate to reduce or discharge the
Guarantors' obligations under the Credit Agreement or the other Credit
Documents.
(f) 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.
(g) 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.
[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.
WORLDTEX, INC., a Delaware corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
REGAL MANUFACTURING COMPANY, INC., a
Delaware corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
ELASTIC CORPORATION OF AMERICA, INC., a
Delaware corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
WTX COLOMBIA II, INC., a Delaware
corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
WTX COLOMBIA I, INC., a Delaware corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
[SIGNATURES CONTINUE]
XXXXXXX & XXXXX XXXXX OF DELAWARE, INC., a
Delaware corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
REGAL YARNS OF ARGENTINA, INC., a North
Carolina corporation
By:________________________________________
Name:______________________________________
Title:_____________________________________
NATIONSBANK, N.A., individually in its
capacity as a Lender and in its capacity as
the Agent
By:________________________________________
Name:______________________________________
Title:_____________________________________
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION
By:________________________________________
Name:______________________________________
Title:_____________________________________
BANQUE NATIONALE DE PARIS
By:________________________________________
Name:______________________________________
Title:_____________________________________
