EXHIBIT 4.1
AMENDMENT AND WAIVER UNDER NOTE AGREEMENT
THIS AMENDMENT AND WAIVER UNDER NOTE AGREEMENT (this "AMENDMENT") is
dated as of the December 17, 2001, among XXXXXXXX XXXXX, INC. (the "COMPANY")
and each of the Purchasers a party hereto (collectively, the "PURCHASERS");
PRELIMINARY STATEMENTS
1. The Company and each of the Purchasers entered into an Amended and
Restated Note Purchase Agreement dated November 6, 2000 (collectively, as
amended through the date hereof, the "NOTE AGREEMENTS").
2. Under the Amendment and Waiver under Note Agreement, dated as of
August 13, 2001 (the "AUGUST AMENDMENT AND WAIVER") as extended by the Amendment
and Waiver, dated as of October 31, 2001, the Purchasers agreed to waive certain
Events of Default, which waiver will expire on December 17, 2001;
3. The Company has requested that the Purchasers extend such waiver;
4. Further, the Company has indicated that for the Fiscal Quarter
ending December 30, 2001 (the "DECEMBER 2001 FISCAL QUARTER") the Company will
breach the covenant contained in Section 10.8 of the Note Agreements pertaining
to the Fixed Charge Coverage Ratio (the "FIXED CHARGE COVERAGE COVENANT"), the
covenant contained in Section 10.10 of the Note Agreements pertaining to the
Leverage Ratio (the "LEVERAGE COVENANT"), the covenant contained in Section
10.18 of the Note Agreements pertaining to minimum Consolidated Total EBITDA
(the "EBITDA COVENANT") and the covenant contained in Section 10.11 of the Note
Agreements pertaining to minimum Consolidated Tangible Net Worth (the "NET WORTH
COVENANT"), and has requested that the Purchasers waive any Events of Default
which may occur under Sections 10.8, 10.10, 10.11 and 10.18 as a result thereof,
in order to afford the parties hereto sufficient time to attempt to negotiate
and implement an amendment to the Note Agreements satisfactory to all of such
parties.
5. The Purchasers are willing to extend and grant such waiver,
subject to the satisfaction of conditions and terms set forth herein, by
entering into this Amendment and Waiver.
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Company and the Purchasers
hereby covenant and agree as follows:
1. DEFINITIONS. Unless otherwise specifically defined herein, each
term used herein which is defined in the Note Agreements shall have the meaning
assigned to such term in the Note Agreements.
2. WAIVER. Effective upon satisfaction of the conditions to
effectiveness set forth in Section 17 hereof, and subject to the other terms and
conditions set forth herein, each of the Purchasers agrees (i) to extend to
January 7, 2002 the date by which a Note Agreement Amendment (as defined in the
August Amendment and Waiver) must, as required by Section 8 of the August
Amendment and Waiver, be executed and become effective, (ii) to extend to
January 7, 2002 the waiver provided in Section 2 of the August Amendment and
Waiver and (iii) to waive any Event of Default arising under the Fixed Charge
Coverage Covenant, the Leverage Covenant, the Net Worth Covenant and the EBITDA
Covenant for the December 2001 Fiscal Quarter.
3. PAYMENT OF INTEREST. The Noteholders hereby agree to accept
payment of $773,755.90 on December 18, 2001 (for interest accruing at 7.91% from
May 16, 2001 through and including November 30, 2001, after taking into account
interest payments made on June 18, 2001, and September 18, 2001) and $891,100.85
on December 31, 2001 (for interest accruing at 7.91% from December 1, 2001
through and including December 28, 2001) as partial payment of accrued interest
at the Applicable Rate and the Company and the Noteholders agree that the
balance of such interest accruing at the Applicable Rate from May 16, 2001
through January 7, 2002 shall be due and payable not later than 2:00 p.m. on
January 7, 2002.
4. AMENDMENT TO SECTION 10.19. Section 10.19 of the Note Agreements
is amended by deleting the date "December 1, 2001" where such date appears
therein and replacing such date with "January 7, 2002."
5. AMENDMENT OF SECTION 11. Section 11 of each Note Agreement is
hereby amended by deleting the period at the end of clause (p) and inserting ";
or" and adding a new clause (q) thereof as follows:
"(q) the Company shall fail to observe or perform the
covenant contained in letter agreement dated as of December 17,
2001."
6. AMENDMENT OF SCHEDULE B. Schedule B to each of the Note Agreements
is amended by deleting "December 17, 2001" in the definition of "Reserved Asset
Disposition Proceeds" and inserting in lieu thereof "January 7, 2002".
7. RESTATEMENT OF REPRESENTATIONS AND WARRANTIES. Since October 31,
2001, there has been no event, act, condition or occurrence having a Material
Adverse Effect. The Company hereby restates and renews each and every other
representation and warranty heretofore made by it in the Note Agreements as
fully as if made on the date hereof (after giving effect to the amendments and
extension of waiver contained herein) and with specific reference to this
Amendment and all other documents executed and/or delivered in connection
herewith.
8. EFFECT OF AMENDMENT AND WAIVER. Except as set forth expressly
hereinabove, all terms of each of the Note Agreements shall be and remain in
full force and effect, and shall constitute the legal, valid, binding and
enforceable obligations of the Company. The waiver extended in Section 2 of this
Amendment shall continue to be limited in the manner described in Section 7 of
the August Amendment and Waiver.
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9. CONDITION SUBSEQUENT; EXPIRATION OF WAIVER. Notwithstanding
anything to the contrary contained herein, in the event a Note Agreement
Amendment has not been executed and become effective on or before January 7,
2002, the extension of waiver made pursuant to Section 2 hereof for the
September 2001 Fiscal Quarter and the December 2001 Fiscal Quarter shall expire
and become void and of no further force or effect on such date, and the
provisions of the Fixed Charge Coverage Covenant, the Leverage Covenant, the Net
Worth Covenant and the EBITDA Covenant shall be strictly enforceable by each
Purchaser for the September 2001 Fiscal Quarter and the December 2001 Fiscal
Quarter to the same extent as if no waiver had ever been given pursuant hereto.
10. REAFFIRMATION; NO NOVATION OR MUTUAL DEPARTURE. The Company
expressly acknowledges and agrees that: (i) there has not been, and this
Amendment and Waiver does not constitute or establish, a novation with respect
to any Note or Note Agreement, or a mutual departure from the strict terms,
provisions and conditions thereof, other than as provided herein; and (ii)
nothing in this Amendment and Waiver shall affect or limit a Purchaser's right
to demand payment of liabilities owing from the Company to such Purchaser under,
or to demand strict performance of the terms, provisions and conditions of, its
respective Note Agreement, to exercise any and all rights, powers and remedies
under such Note Agreement or at law or in equity, or to do any and all of the
foregoing, immediately at any time after the occurrence of a Default or an Event
of Default which is not waived pursuant to this Amendment and Waiver,
pursuant to such Note Agreement, including, without limitation, as a result of
the circumstances described in Section 9 hereof.
11. RATIFICATION. Except as expressly contemplated or provided
herein, the Company hereby restates, ratifies and reaffirms each and every term,
covenant and condition set forth in the Note Agreements effective as of the date
hereof.
12. COUNTERPARTS. This Amendment and Waiver may be executed in any
number of counterparts and by different parties hereto in separate counterparts
and transmitted by facsimile to the other parties, each of which when so
executed and delivered by facsimile shall be deemed to be an original and all of
which counterparts, taken together, shall constitute but one and the same
instrument.
13. SECTION REFERENCES. Section titles and references used in this
Amendment and Waiver shall be without substantive meaning or content of any kind
whatsoever and are not a part of the agreements among the parties hereto
evidenced hereby.
14. NO DEFAULT/NO CLAIM. To induce the Purchasers to enter into this
Amendment and Waiver, the Company hereby acknowledges and agrees that, as of the
date hereof, and after giving effect to the terms hereof, there exists (i) no
Default or Event of Default and (ii) no right of offset, defense, counterclaim,
claim or objection in favor of the Company arising out of or with respect to any
of the Notes or other obligations of the Company owed to a Purchaser under its
respective Note Agreement.
15. FURTHER ASSURANCES. The Company agrees to take such further
actions as any Purchaser shall reasonably request in connection herewith to
evidence the waiver herein contained.
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16. GOVERNING LAW. This Amendment and Waiver shall be governed by and
construed and interpreted in accordance with, the laws of the State of New York.
17. CONDITIONS PRECEDENT. This Amendment and Waiver shall become
effective only upon: (i) execution and delivery (including by facsimile) of this
Amendment and Waiver by the Company and all the holders; (ii) execution and
delivery (including by facsimile) of the Consent and Reaffirmation of Guarantors
at the end hereof by the Guarantors; (iii) execution and delivery (including by
facsimile) of the Seventh Amendment to Intercreditor Agreement in substantially
the form of Annex 1 to the Bank Amendment; (iv) execution and delivery
(including by facsimile) of the Eighth Amendment to and Waiver under Credit
Agreement (the "BANK AMENDMENT"); and (v) payment of outstanding fees and
expenses of the Purchasers' counsel, King & Spalding.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Amendment and Waiver to be duly executed, under seal, by its duly authorized
officer as of the day and year first above written.
XXXXXXXX XXXXX, INC.
By: Xxxx X. Xxxx
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Title: Treasurer
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THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: Xxxx Xxxxxx
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Title: Associate
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THE VARIABLE ANNUITY LIFE INSURANCE COMPANY
AMERICAN GENERAL ANNUITY INSURANCE COMPANY
By: American General Investment Management, L.P.
By: American General Investment Managing
Corporation, its general Partner
By: Xxxxxxx X. XxXxx
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Title: Senior Vice President
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MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company, Inc.,
as Investment Advisor
By: Xxxxxx Xxxx
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Title: Counsel
CM LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company, Inc.,
as Investment Advisor
By: Xxxxxx Xxxx
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Title: Counsel
CONSENT, REAFFIRMATION AND AGREEMENT OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Amendment and Waiver, dated as of December 17, 2001 (the "AMENDMENT AND
WAIVER"), (ii) consents to the execution and delivery of the Amendment and
Waiver by the parties thereto and acknowledges the limitation with respect to
such Amendment and Waiver, as set forth therein and (iii) reaffirms all of its
obligations and covenants under each of the Guaranty Agreements, dated as of
November 6, 2000 (each, a "GUARANTY"), executed by it in favor of each of the
Purchasers (as defined in the Amendment and Waiver), and agrees that none of
such obligations and covenants shall be affected by the execution and delivery
of the Amendment and Waiver, (iv) acknowledges and agrees that there exists no
right of offset, defense, counterclaim, claim or objection in favor of it
arising out of or with respect to any Note (as defined in each Guaranty) or
other obligations of such Guarantor (as defined in each Guaranty) owed to any
Purchaser under any Note Agreement (as defined in each Guaranty), any Guaranty
or any document delivered in connection therewith, and (v) agrees to take such
further actions as any Purchasers shall reasonably require in connection with
the Amendment and Waiver and to evidence the amendments and waivers contained
therein. This Consent and Reaffirmation may be executed in any number of
counterparts and by 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 counterparts, taken together, shall constitute but one and the same
instrument.
GOLD XXXXX, Inc., a Delaware corporation (SEAL)
RASCHEL FASHION INTERKNITTING, LTD.,
a New York corporation (SEAL)
CURTAINS AND FABRICS, INC.,
a New York corporation (SEAL)
GFD FABRICS, INC.,
a North Carolina corporation (SEAL)
GFD SERVICES, INC.,
a Delaware corporation (SEAL)
MEXICAN INDUSTRIES OF NORTH
CAROLINA, INC.,
a North Carolina corporation (SEAL)
XXXXXXX LACES, LTD.,
a New York corporation (SEAL)
ADVISORY RESEARCH SERVICES, INC.
a North Carolina corporation (SEAL)
XXXXXXXX XXXXX (MICHIGAN), INC.
a Michigan corporation (SEAL)
GUILFORD AIRMONT, INC.,
a North Carolina corporation (SEAL)
GOLD XXXXX FARMS, INC.,
a New York corporation (SEAL)
GMI COMPUTER SALES, INC.
a North Carolina corporation (SEAL)
each as a Guarantor
By: Xxxx X. Xxxx
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Title: Vice President
TWIN RIVERS TEXTILE PRINTING AND FINISHING,
a North Carolina general partnership
as a Guarantor
By: Advisory Research Services, Inc.
a General Partner
By: Xxxx X. Xxxx
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Title: Vice President
