FOURTH AMENDMENT
TO REVOLVING CREDIT
AND GUARANTY AGREEMENT
FOURTH AMENDMENT, dated as of September 28, 1998 (the
"AMENDMENT"), to the REVOLVING CREDIT AND GUARANTY AGREEMENT dated as of January
7, 1998 among PARAGON TRADE BRANDS, 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"), THE CHASE
MANHATTAN BANK, a New York banking corporation ("CHASE"), each of the other
financial institutions party thereto (together with Chase, the "BANKS") and THE
CHASE MANHATTAN BANK, as Agent for the Banks (in such capacity, the "AGENT"):
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent
are parties to that certain Revolving Credit and Guaranty Agreement, dated as of
January 7, 1998 (as heretofore amended pursuant to the First Amendment to
Revolving Credit and Guaranty Agreement dated as of January 30, 1998, the Second
Amendment to Revolving Credit and Guaranty Agreement dated as of March 23, 1998
and the Third Amendment to Revolving Credit and Guaranty Agreement dated as of
April 15, 1998 and as the same may be further 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, it is agreed:
1. As used herein all terms that are defined in the Credit Agreement
shall have the same meanings herein.
2. Section 6.09 of the Credit Agreement is hereby amended by inserting
the words (a) "and in Section 6.13" immediately following the parenthetical
phrase "(the "SECTION 6.09 AGREEMENTS")" set forth in the first sentence
thereof, (b) "or any of the Guarantors" immediately following the words "the
Borrower" set forth in clause (y) of the second sentence thereof, and (c) "and
Section 6.11(iv)" immediately following the words "Section 6.11(ii)" set forth
in subclause (y).
3. Section 6.10 of the Credit Agreement is hereby amended by deleting
the word "and" immediately preceding clause (v) appearing therein and inserting
in lieu thereof a comma, and by inserting the following new clause (vi) at
the end thereof:
"and (vi) loans and advances, not to exceed one year in duration,
to employees of the Borrower and the Guarantors that are being
relocated and which are made in the ordinary course of business
in an aggregate principal amount not in excess of $1,000,000 at
any one time outstanding."
4. Section 6.11 of the Credit Agreement is hereby amended by deleting
the word "and" immediately preceding clause (iii) appearing therein and by
inserting the following new clause (iv) at the end thereof:
"and (iv) the sale or disposition, upon the terms of that certain
Asset Purchase Agreement dated as of September 1, 1998, among the
Borrower, Changing Paradigms, Inc. ("CP") and House, Home and
Hardware, LLC (or pursuant to a higher and better offer that is
approved by the Bankruptcy Court from such purchaser or another
Person), of substantially all of the assets (and assumption of
certain trade payables) of CP."
5. Section 6 of the Credit Agreement is hereby amended by inserting
the following new Section 6.13 at the end thereof:
"SECTION 6.13 CHANGING PARADIGMS TRANSACTION.
Notwithstanding anything to the contrary set forth in Sections
6.03, 6.09 and 6.10 of the Credit Agreement , the Borrower, CP
and PTB International shall be permitted, in connection with the
sale of substantially all of CP's assets described in Section
6.11(iv), to enter into a series of intercompany transactions
pursuant to which (x) the Borrower may assign to PTB
International an intercompany receivable owing by CP to the
Borrower in the amount of approximately $7,800,000, with PTB
International to be obligated under an intercompany payable to
the Borrower in the same amount in consideration of such
assignment and (y) CP shall use the proceeds of such asset sale
to repay such intercompany receivable owing by CP. It is
understood and agreed that such intercompany payable from PTB
International to the Borrower shall not be treated as a loan or
advance by the Borrower to PTB International for purposes of the
formulas appearing in the "PROVIDED" clause of the first sentence
of Section 6.09 and in the "PROVIDED" clause of Section 6.10."
6. This Amendment shall not become effective until the date (the
"EFFECTIVE DATE") on which this Amendment shall have been executed by the
Borrower, the Guarantors and Banks constituting the Required Banks and the
Agent, and the Agent shall have received evidence satisfactory to it of such
execution.
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7. 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.
8. 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 Banks 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.
9. 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.
10. This Amendment shall in all respects be construed in accordance
with and governed by the laws of the State of New York applicable to contracts
made and to be performed wholly within such State.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and the year first above written.
PARAGON TRADE BRANDS, INC.
By: /s/
Title:
PTB INTERNATIONAL, INC.
By: /s/
Title:
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CHANGING PARADIGMS, INC.
By: /s/
Title:
PARAGON TRADE BRANDS FSC, INC.
By: /s/
Title:
PTB ACQUISITION SUB, INC.
By: /s/
Title:
THE CHASE MANHATTAN BANK,
INDIVIDUALLY AND AS AGENT
By: /s/
Title:
AMSOUTH BANK
By: /s/
Title:
THE BANK OF NOVA SCOTIA
By: /s/
Title:
4
BHF-BANK AKTIENGESELLSCHAFT
By: /s/
Title:
By: /s/
Title:
XXXXXX FINANCIAL, INC.
By: /s/
Title:
IBJ BUSINESS CREDIT CORPORATION
By: /s/
Title:
PNC BANK, NATIONAL ASSOCIATION
By: /s/
Title:
WACHOVIA, N.A.
By: /s/
Title:
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