Exhibit 10(b)
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FIRST AMENDMENT
TO REVOLVING CREDIT AND
GUARANTY AGREEMENT
FIRST AMENDMENT, dated as of April 2, 2002 (the "Amendment"), to the
REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of March 13, 2002, among
XXXXXXXX XXXXX, INC., a Delaware corporation (the "Borrower"), a debtor and
debtor-in-possession under Chapter 11 of the Bankruptcy Code, the Guarantors
named therein (the "Guarantors"), FIRST UNION NATIONAL BANK, a national banking
corporation ("First Union"), each of the other financial institutions from time
to time party thereto (together with First Union, the "Lenders") and FIRST UNION
NATIONAL BANK, as Agent for the Lenders (in such capacity, the "Agent"):
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent are
parties to that certain Revolving Credit and Guaranty Agreement, dated as of
March 13, 2002 (as the same may be amended, modified or supplemented from time
to time, the "Credit Agreement"); and
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 or
leased or for services rendered, whether or not earned by performance.
"Account Debtor" shall mean, with respect to any Account, the
obligor with respect to such Account.
"Adjusted EBITDA for Ongoing Operations" shall mean the EBITDA
of the Ongoing Operations, adjusted to include Unallocated Corporate
Items.
"Adjusted Eligible Finished Goods" shall mean, on any date,
Eligible Finished Goods minus Inventory Reserves.
"Adjusted Eligible Raw Materials" shall mean, on any date,
Eligible Raw Materials minus Inventory Reserves.
"Adjusted Eligible Work-in-Process" shall mean, on any date,
Eligible Work-in-Process minus Inventory Reserves.
"Credit Memo Account" shall mean an Account described in
clause (u) of the definition of "Eligible Accounts Receivable."
"Credit Memo Lag Reserve" shall mean, on any date, an amount
equal to (i) the aggregate balance of all Credit Memo Accounts for the
twelve month period ending on such date, divided by 360; multiplied by
(ii) 49 (which number is intended to represent an approximate average
of the number of days in excess of 30 days that elapse from the
creation of a Credit Memo Account until the issuance of a credit memo
by the Borrower or a Guarantor, and which number shall be subject to
review and modification by the Agent from time to time); divided by
(iii) the then applicable advance rate described in clause (a) of the
definition of "Borrowing Base."
"Dilution Percentage" shall mean, on any date, expressed 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.
"Discontinued Operations" shall mean Guilford Apparel and
Guilford Home Fashions.
"Dilution Reserve" shall mean, on any date, (a) the Dilution
Percentage minus 5%, multiplied by (b) gross sales for any period of
measurement (to the extent non-negative).
"EBITDA for Discontinued Operations" shall mean the EBITDA of
the Discontinued Operations.
"Eligible Accounts Receivable" shall mean, at the time of 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
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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 (u) below or otherwise deemed by the Agent in its reasonable
discretion to be ineligible for inclusion in the calculation of the
Borrowing Base. 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 a Guarantor (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 otherwise approved from time to time in writing by the Agent,
the following shall not be included in Eligible Accounts Receivable:
(a) any Account for which the Borrower or a Guarantor (as
applicable) does not have sole lawful and absolute title;
(b) any Account that arises out of a sale made by the Borrower
or a Guarantor to an employee, officer, agent, director, stockholder,
or Affiliate of the Borrower or a Guarantor;
(c) any Account for which the Account Debtor (i) is a creditor
of the Borrower or a Guarantor (as applicable), (ii) has or has
asserted a right of set-off against the Borrower or the Guarantor (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 Guarantor (as
applicable) which has not been resolved, in each case, without
duplication, to the extent of the amount owed by such Borrower
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or Guarantor (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);
(d) any Account for which 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);
(e) any Account that is not payable in Dollars or with respect
to which the Account Debtor is either not incorporated or organized
under the laws of the United States of America, any state thereof or
the District of Columbia or is located, domiciled or has its principal
place of business or substantially all of its assets outside the United
States, with the exception of Canada (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);
(f) any Account with respect to which the sale to the Account
Debtor is on a delayed shipment (or xxxx and hold) basis (provided that
following shipment, the related Account shall not be excluded from
Eligible Accounts Receivable solely as a result of this clause),
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;
(g) any Account with respect to which 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 Guarantor's (as applicable) completion of any further
performance under the contract or agreement;
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(h) any Account that 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;
(i) any Account that 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;
(j) any Account that is unpaid more than 60 days from the
original due date;
(k) any Account that was not paid in full, and with respect to
which the Borrower or Guarantor (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;
(l) all Accounts of an Account Debtor where more than 50% of
all Accounts of such Account Debtor are unpaid more than 60 days from
the original due date;
(m) any Account that has a payment term that is greater than
90 days;
(n) any Account that (i) is not subject to a valid and
perfected first priority Lien in favor of the Agent for the benefit of
the Lenders, (ii) is subject to a Lien other than the Liens (if any)
permitted by the Loan Documents, or (iii) does not otherwise conform in
all material respects to the representations and warranties contained
in the Loan Documents relating to Accounts;
(o) any Account that is a Factored Receivable or is otherwise
subject to a Lien in favor of CIT pursuant to a factoring agreement;
(p) any Account with respect to which 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 for all or any part of such Account;
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(q) any Account that has been written off the books of the
Borrower or the Guarantors (as applicable) or has been otherwise
designated as uncollectible;
(r) any Account whose inclusion 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;
(s) any Account that is a non-trade Account, or relates to
payments for interest;
(t) any amounts represented by the negative balances included
in any Account described in clause (j) above; and
(u) any Account with respect to which the Account Debtor has
provided notification to the Borrower or Guarantor with respect to an
asserted non-cash reduction relating to such Account as a result of,
among other things, a billing error, xxxx-down allowance or returned
product, to the extent of the amount of such asserted non-cash
reduction.
"Eligible Finished Goods" shall mean, on any date, 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
determination thereof, without duplication, the Inventory Value of the
Borrower or the Guarantors (as applicable) at 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 (l) 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. 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
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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) it is not located on property owned or leased by the
Borrower or the Guarantors (as applicable) or, if located in a third
party warehouse, 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 Lenders (except for
Permitted Liens); or
(f) it is Inventory that is deemed to be greater than one year
old; or
(g) it is consigned or at a customer location but still
accounted for in the Borrower or the Guarantor's (as applicable)
perpetual inventory balance; or
(h) 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
Guarantor (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
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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; 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
Inventory defined as Raw Materials of 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 Work-in-Process" shall mean, on any date, Eligible
Inventory defined as Work-in-Process of 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 no
additional processing, to be sold in the ordinary course of business.
"Guilford Apparel" shall mean the apparel division of the
Borrower and the Guarantors.
"Guilford Automotive" shall mean the automotive division of
the Borrower and the Guarantors.
"Guilford Fibers" shall mean the fibers division of the
Borrower and the Guarantors.
"Guilford Home Fashions" shall mean the home fashions division
of the Borrower and the Guarantors.
"Guilford Technical Textile" shall mean the technical textile
division of the Borrower and the Guarantors.
"Guilford Warping" shall mean the warping division of the
Borrower and the Guarantors.
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"Inventory" shall mean all Raw Materials, Work-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 as
Raw Materials, Work-in-Process or Finished Goods of 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's 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, Work-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
its sole discretion exercised reasonably, from time to time.
"Inventory Value" of any Inventory shall mean at the time 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 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.
"Ongoing Operations" shall mean Guilford Automotive, Guilford
Warping, Guilford Fibers and Guilford Technical Textile.
"Qualified Xxxx and Hold Sales" shall mean, on any date,
transactions involving the sale of Inventory to third
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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 both in the
systems of the Borrower or the Guarantor (as applicable) as well as in
the physical inventory; (ii) the Inventory is not included in the
Borrower or the Guarantor's (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 Guarantor (as applicable) with the
Account Debtor in accordance with past practices acceptable to the
Borrower or Guarantor's third party financial auditors stipulating the
above; and (vii) the Accounts are owed and due from Account Debtors
that are current and in compliance (in all respects) on all Accounts,
and otherwise meet the criteria set forth in the definition of Eligible
Accounts Receivable.
"Raw Materials" shall mean materials used or consumed in 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.
"Unallocated Corporate Items" shall mean those items referred
to as, designated as or included in Unallocated Corporate Items in the
Budget.
"Unused Availability" shall mean, at any time, (i) the
Borrowing Base less (ii) the sum of (x) the aggregate outstanding
principal amount of all Loans and (y) the aggregate Letter of Credit
Outstandings.
"Work-in-Process" shall mean yarn that has been removed from
standard packaging and as to which the warping
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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," "Borrowing Base
Amendment" 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
(calculated based on the most recent Borrowing Base Certificate
delivered pursuant to this Agreement) that is equal to (a) 85% of the
net of Eligible Accounts Receivable less the sum of the Dilution
Reserve and the Credit Memo Lag Reserve, plus (b) 30% of Adjusted
Eligible Raw Materials of Guilford Automotive and Guilford Technical
Textile and 40% of Adjusted Eligible Raw Materials Guilford Fibers;
plus (c) 25% of Adjusted Eligible Work-in-Process for Guilford
Automotive and Guilford Technical Textile; plus (d) 50% of Adjusted
Eligible Finished Goods of Guilford Automotive, 30% of Adjusted
Eligible Finished Goods of Guilford Fibers and 40% of Adjusted Eligible
Finished Goods of Guilford Technical Textile; plus (e) 50% of Inventory
subject to Qualified Xxxx and Hold Sales of Guilford Automotive,
Guilford Technical Textile and Guilford Fibers; minus (f) 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 shall not include any
Accounts or Inventory of discontinued operations or operations that are
to be discontinued.
"Borrowing Base Amendment" shall mean an amendment to this
Agreement satisfactory to the Agent and the Borrower to be executed and
delivered no later than three Business Days after entry of the Final
Order.
"Borrowing Base Certificate" shall mean a certificate
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
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Borrower, which shall include appropriate exhibits and schedules as
referred to therein and as provided for in Section 5.08.
4. Section 2.13(b) of the Credit Agreement is hereby amended in its
entirety to read as follows:
(b) The Net Proceeds of any sale or other disposition
(including as a result of casualty loss or condemnation) of any of the
assets or properties of the Borrower or the Guarantors (except for
sales of Inventory, fixtures and equipment in the ordinary course of
business) and any tax refund received by the Borrower or any Guarantor
(such Net Proceeds or tax refund, the "Prepayment Funds") shall
immediately be delivered to the Agent. The Agent shall apply 100% of
such Prepayment Funds first to the prepayment of the Loans and second,
as a deposit with the Agent of cash collateral for the Letter of Credit
Outstandings in an aggregate amount equal to 105% thereof (the "Cash
Collateralization"). Any such prepayment of the Loans shall not reduce
the Total Commitment, provided however, that if an Event of Default or
event which upon notice or lapse of time or both would constitute an
Event of Default has occurred or is continuing, such prepayment shall
automatically and permanently reduce the Total Commitment in an amount
equal to the amount so prepaid. The Agent shall deposit the remaining
balance of the Prepayment Funds, after giving effect to the prepayment
and the Cash Collateralization described above, in an interest-bearing
account under its control, and shall make such withdrawals from such
account as are necessary for prepayments on any subsequent Borrowing or
as Cash Collateralization for subsequently issued Letters of Credit.
5. Section 5.01(q) of the Credit Agreement is hereby amended in its
entirety to read as follows:
(q) By no later than April 29, 2002, deliver to the Agent and the
Lenders the Borrower's business plan for its Fiscal Years ending on or
about September 30, 2002 and September 20, 2003, and such business plan
shall be satisfactory in form and substance to the Agent and the
Lenders.
6. Section 5.08 of the Credit Agreement is hereby amended in its
entirety to read as follows:
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SECTION 5.08. Borrowing Base Certificate. Furnish a Borrowing Base
Certificate substantially in the form of Exhibit E to the Agent: (a) on
or before the third Business Day following the end of each week, which
weekly Borrowing Base Certificate shall reflect the Accounts and
Inventory 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 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.
7. Section 6.05 of the Credit Agreement is hereby amended in its
entirety by inserting the following:
SECTION 6.05. Adjusted EBITDA. Permit Adjusted EBITDA for Ongoing
Operations and EBITDA for Discontinued Operations (i) for each period
beginning on March 4, 2002 and ending on the dates listed below to be
less than the amount specified under such columns opposite such date:
EBITDA for
----------
Period Ending Adjusted EBITDA for Discontinued
------------- ------------------- ------------
Ongoing Operations Operations
------------------ ----------
March 31, 2002 $2,000,000 ($3,700,000)
April 28, 2002 $4,300,000 ($8,300,000)
June 2, 2002 $7,400,000 ($11,800,000)
June 30, 2002 $9,800,000 ($10,200,000)
July 28, 2002 $11,200,000 ($10,600,000)
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September 1, 2002 $13,700,000 ($11,000,000)
September 29, 2002 $15,700,000 ($11,400,000)
and (ii) thereafter to be less than the specified amounts for the
specified periods to be set forth in an amendment to this Agreement
satisfactory to the Agent, which amendment shall be executed and
delivered prior to, or simultaneously with, the delivery of the
business plan pursuant to Section 5.01(q).
8. Section 6.10 of the Credit Agreement is hereby amended by replacing
clause (v) thereof with the following new clause (v):
(v) advances to Guilford de Tamaulipas, S.A. de C.V., Guilford de
Altamira, S.A. de C.V. or Altamira Servicios de Infraestructura S.A. de
C.V. in an amount not to exceed $400,000 during any single fiscal
quarter commencing with the first fiscal quarter after the Closing Date
or $1,500,000 in the aggregate during the one year period beginning on
the Closing Date, and in any event only to the extent specified in the
Budget for the winddown of operations at the plant located in Altamira,
Mexico.
9. Section 6 of the Credit Agreement is hereby amended by inserting the
following new Section 6.14 at the end thereof:
SECTION 6.14 Liquidity. Permit the sum of (i) cash on hand (including
cash equivalents) of the Borrower and the Guarantors plus (ii) the
Unused Availability to be less than $5,000,000.
10. The Credit Agreement is hereby further amended by adding a new
"Exhibit E" in the form attached hereto as Exhibit A.
11. This Amendment shall be effective as of the date first written
above (the "Effective Date") upon execution by the Borrower, the Guarantors and
Lenders, and the Agent having received evidence satisfactory to it of such
execution.
12. 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.
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13. 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 counsel to
the Agent.
14. 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 Lenders 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.
15. 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. A fax copy of a
counterpart signature page shall serve as the functional equivalent of a
manually executed copy for all purposes.
16. 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:
XXXXXXXX XXXXX, INC.
By:______________________________________
Title:______________________________
GUARANTORS:
CURTAINS AND FABRICS, INC.
GOLD XXXXX, INC.
RASCHEL FASHION INTERKNITTING, LTD.
GFD FABRICS, INC.
GFD SERVICES, INC.
MEXICAN INDUSTRIES OF NORTH
CAROLINA, INC.
XXXXXXX LACES, LTD.
ADVISORY RESEARCH SERVICES, INC.
XXXXXXXX XXXXX (MICHIGAN), INC.
GUILFORD AIRMONT, INC.
GOLD MILL FARMS, INC.
GMI COMPUTER SALES, INC.
TWIN RIVERS TEXTILE PRINTING AND FINISHING
By: Advisory Research Services, Inc.
a General Partner
By:______________________________________
Title:______________________________
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AGENT AND LENDERS:
FIRST UNION NATIONAL BANK,
Individually and as Agent
By:______________________________________
Title:______________________________
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Exhibit A
Form of Borrowing Base Certificate
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