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EXHIBIT 4.6
THIRD AMENDMENT TO CREDIT AGREEMENT,
WAIVER AND CONSENT
This THIRD AMENDMENT TO CREDIT AGREEMENT, WAIVER AND CONSENT (this
"Amendment") is entered into as of August 24, 1999 among GERBER CHILDRENSWEAR,
INC., a Delaware corporation ("Gerber") and AUBURN HOSIERY XXXXX, INC., a
Kentucky corporation ("Auburn", collectively with Gerber, the "Borrowers"); the
Subsidiaries of Gerber (other than Auburn) as Guarantors, the Lenders party
hereto and BANK OF AMERICA, N.A., formerly NationsBank, N.A., as Administrative
Agent for the Lenders (the "Administrative Agent"). Capitalized terms used
herein and not otherwise defined shall have the meanings set forth in the Credit
Agreement (as defined below).
RECITALS
WHEREAS, the Borrowers, the Guarantors, the Lenders and the
Administrative Agent entered into that certain Credit Agreement, dated as of
December 17, 1997 (as amended by that certain First Amendment to Credit
Agreement and Consent, Release and Waiver, dated as of April 3, 1998 and as
amended by that certain Second Amendment to Credit Agreement and Consent,
Release and Waiver, dated as of June 2, 1998, the "Credit Agreement").
WHEREAS, Gerber intends to acquire through one or more wholly-owned
Canadian Subsidiaries (the "Canadian Subsidiaries") all of the assets of St.
Xxxxxxxx Textiles, Inc. and Lian Textiles, Inc., each corporations formed under
the laws of Canada, (the "St. Xxxxxxxx Acquisition") pursuant to the terms of an
asset purchase agreement (the "Acquisition Agreement").
WHEREAS, the Credit Parties are requesting that the Lenders consent to
the St. Xxxxxxxx Acquisition and otherwise amend and modify certain terms of the
Credit Agreement as more fully set forth below.
WHEREAS, the Administrative Agent and the Lenders have agreed to (a)
consent to the St. Xxxxxxxx Acquisition and (b) amend and waive certain terms of
the Credit Agreement, in each case, on the terms, and subject to the conditions,
set forth below.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
AGREEMENT
1. Amendments to Credit Agreement.
(a) Existing Definitions. The following definitions set forth in
Section 1.1 of the Credit Agreement are amended and restated in their entireties
to read as follows:
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"Fixed Charge Coverage Ratio" means the ratio of (a)
EBITDAR less Capital Expenditures made in cash to (b) cash
Interest Expense plus Current Maturities of Long Term Debt
plus Cash Income Taxes plus cash Rent Expense.
"Permitted Acquisitions" means an acquisition of all
or substantially all of the assets or stock of another Person
by a Credit Party or its Subsidiaries; provided that (a) such
acquisition does not cause or would not be reasonably expected
to cause a Default or Event of Default, (b) after giving
effect to such acquisition, the Credit Parties would be in
compliance on a pro forma basis (as such pro forma compliance
is computed in accordance with Regulation S-X of the
Securities Act) with all of the financial covenants set forth
in Section 7.2, (c) such Person must in all material respects
engage in a business similar to or a logical extension of the
business of the Credit Parties and their Subsidiaries and (d)
the aggregate amount of all such acquisitions (other than the
acquisition of St. Xxxxxxxx Textiles) shall not exceed $10
million during the term of this Credit Agreement.
(b) New Definitions. The following new definition is added to Section
1.1 of the Credit Agreement in the appropriate alphabetical order:
"Cash Income Taxes" means, for any period, with
respect to the Credit Parties and their Subsidiaries, on a
consolidated basis, income taxes actually paid in cash during
such period.
(c) Section 8.1(f). Section 8.1(f) of the Credit Agreement is amended
and restated in its entirety to read as follows:
(f) Indebtedness of Foreign Subsidiaries up to
$15,000,000, in the aggregate, at any one time;
(d) Section 8.14. Section 8.14 of the Credit Agreement is amended and
restated in its entirety to read as follows:
The Credit Parties will not, nor will they permit any of their
Subsidiaries to, allow the Foreign Subsidiaries to have assets which in
the aggregate constitute more than 30% of Total Assets at any time.
2. Consent. Notwithstanding anything in the Credit Documents to the contrary,
subject to the conditions set forth below, the Lenders hereby consent to the St.
Xxxxxxxx Acquisition:
(a) the St. Xxxxxxxx Acquisition shall occur prior to
September 30, 1999.
(b) the St. Xxxxxxxx Acquisition occurs on terms identical to
those described in Acquisition Agreement;
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(c) the St. Xxxxxxxx Acquisition complies with the definition
of "Permitted Acquisition" in Section 1.1 of the Credit Agreement (as
amended by this Amendment);
(d) the aggregate consideration (including, without
limitation, cash and assumption of Indebtedness) paid in connection
with the St. Xxxxxxxx Acquisition does not exceed $22,000,000.
(e) Simultaneously with the consummation of the St. Xxxxxxxx
Acquisition, Gerber provides to the Administrative Agent:
(i) a certified copy of the Acquisition Agreement,
together with all amendments or modifications thereto;
(ii) an updated Schedule 6.15 to the Credit
Agreement;
(iii) such Uniform Commercial Code filings that the
Administrative Agent may reasonably request in order to
provide for its continued first-priority perfected security
interest in any Collateral, together with opinions with
respect thereto; and
(iv) such other information, documents, filings or
opinions as the Administration Agent may reasonably request in
connection with the St. Xxxxxxxx Acquisition.
(f) Within 30 days following the formation of the Canadian
Subsidiaries, the Credit Parties shall deliver to the Administrative
Agent all documentation required to be delivered by Section 7.13 of the
Credit Agreement, including, without limitation, an executed pledge
agreement which pledges 65% of the capital stock of each Canadian
Subsidiary to the Collateral Agent for the benefit of the Lenders,
together with favorable opinions of counsel.
3. Waiver. The Required Lenders hereby agree to waive compliance with Section
3.3(b)(ii) of the Credit Agreement for the fiscal year ending December 31, 1999.
This is a one time waiver and shall not be construed to be a waiver of any other
mandatory prepayment which may be required by Section 3.3(b)(ii) in the future.
4. Conditions Precedent. The effectiveness of this Amendment is subject to
receipt by the Administrative Agent of the following:
(a) copies of this Amendment duly executed by the Credit
Parties and the Lenders;
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(b) an opinion or opinions from counsel to the Credit Parties,
in form and substance satisfactory to the Administrative Agent,
addressed to the Administrative Agent on behalf of the Lenders and
dated as of the date hereof;
(c) the payment to the Administrative Agent, for the account
of each Lender approving this Amendment on or prior to August 24, 1999,
an amendment fee equal to $3,500 per Lender; and
(d) the payment of expenses, including without limitation
reasonable attorneys fees, incurred in connection with the preparation
of this Amendment.
5. Ratification of Credit Agreement. The term "Credit Agreement" as used in each
of the Credit Documents shall hereafter mean the Credit Agreement as amended and
modified by this Amendment. Except as herein specifically agreed, the Credit
Agreement, as amended by this Amendment, is hereby ratified and confirmed and
shall remain in full force and effect according to its terms. The Credit Parties
acknowledge and consent to the modifications set forth herein and agree that
this Amendment does not impair, reduce or limit any of their obligations under
the Credit Documents and that, after the date hereof, this Amendment shall
constitute a Credit Document. Notwithstanding anything herein to the contrary
and without limiting the foregoing, (a) each of the Credit Parties reaffirms the
liens and security interests granted under the terms of the Credit Documents and
(b) each of the Guarantors reaffirm their guaranty obligations set forth in the
Credit Agreement.
6. Authority/Enforceability. Each of the Credit Parties represents and warrants
as follows:
(a) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered by
such Person and constitutes such Person's 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).
(c) 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 such Person of this Amendment.
(d) The execution and delivery of this Amendment does not (i)
violate, contravene or conflict with any provision of its, or its
Subsidiaries' organizational documents or (ii) materially violate,
contravene or conflict with any Requirement of Law or any other law,
regulation (including, without limitation, Regulation U or Regulation
X),
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order, writ, judgment, injunction, decree or permit applicable to it or
any of its Subsidiaries.
7. No Default. The Credit Parties represent and warrant to the Lenders that (a)
the representations and warranties of the Credit Parties set forth in Section 6
of the Credit Agreement (as amended by this Amendment) are true and correct as
of the date hereof and (b) no event has occurred and is continuing which
constitutes a Default or an Event of Default.
8. Release. In consideration of entering into this Amendment, each of the Credit
Parties releases the Agents, the Lenders, and each Agent's and each of the
Lender's respective Affiliates, Subsidiaries, 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.
9. Counterparts/Telecopy. 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
executed counterparts of this Amendment by telecopy shall be effective as an
original and shall constitute a representation that an original shall be
delivered.
10. GOVERNING LAW. 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.
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed and delivered and this Amendment shall be
effective as of the date first above written.
BORROWERS:
GERBER CHILDRENSWEAR, INC., a Delaware
corporation
By: /s/ Xxxxxxx Solar
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Name: Xxxxxxx Solar
Title: Senior Vice President
AUBURN HOSIERY XXXXX, INC.,
a Kentucky corporation
By: /s/ Xxxxxxx Solar
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Name: Xxxxxxx Solar
Title: Senior Vice President
[Signatures continue]
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GUARANTORS:
COSTURA DOMINICANA, INC.,
a Delaware corporation
By: /s/ Xxxxxxx Solar
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Name: Xxxxxxx Solar
Title: Senior Vice President
GCW HOLDINGS, INC.
(formerly Auburn Holdings, Inc.),
a Delaware corporation
By: /s/ Xxxxxxx Solar
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Name: Xxxxxxx Solar
Title: Senior Vice President
GCI IP SUB, INC.,
a Delaware corporation
By: /s/ Xxxxxxx Solar
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Name: Xxxxxxx Solar
Title: Senior Vice President
GERBER CHILDRENSWEAR CANADA, INC.,
a Delaware corporation
By: /s/ Xxxxxxx Solar
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Name: Xxxxxxx Solar
Title: Senior Vice President
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Signature Page to Third Amendment to Credit Agreement, Waiver and Consent
LENDERS:
BANK OF AMERICA, N.A., formerly
NationsBank, N.A., acting in its
capacity as Administrative Agent and
Collateral Agent and individually
as a Lender
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA, N.A., formerly
NationsBank of Tennessee, N.A.,
solely in its capacity as an Issuing
Lender in connection with certain
Existing Letters of Credit
By: /s/ Xxxxx X. Xxxxxxx
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Name: Xxxxx X. Xxxxxxx
Title: Vice President
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Signature Page to Third Amendment to Credit Agreement, Waiver and Consent
THE CHASE MANHATTAN BANK
By: /s/ Xxxxxxx Xxxxxx
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Name: Xxxxxxx Xxxxxx
Title: Vice President
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Signature Page to Third Amendment to Credit Agreement, Waiver and Consent
FLEET BANK, N.A.
By: /s/ Xxxxxx Xxxxxxxxxx
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Name: Xxxxxx Xxxxxxxxxx
Title: Senior Vice President
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Signature Page to Third Amendment to Credit Agreement, Waiver and Consent
SUNTRUST BANK, ATLANTA
By: /s/ Xxxxx Xxxx
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Name: Xxxxx Xxxx
Title: Director, Senior Relationship
Manager
By:
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Name:
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Title:
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Signature Page to Third Amendment to Credit Agreement, Waiver and Consent
WACHOVIA BANK, N.A.
By: /s/ Xxxxxxx X.X. Xxxxx
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Name: Xxxxxxx X.X. Xxxxx
Title: Assistant Vice President
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Signature Page to Third Amendment to Credit Agreement, Waiver and Consent
BANK BOSTON, N.A.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Director
