1
EXHIBIT 10.42
SECOND AMENDMENT AND WAIVER AGREEMENT
THIS SECOND AMENDMENT AND WAIVER AGREEMENT (this "Amendment"), dated as
of January 23, 1997, is among WestPoint Xxxxxxx Inc., a Delaware corporation
(the "Borrower"), NationsBank, N.A. (formerly known as NationsBank of North
Carolina, N.A. and referred to herein as "NationsBank"), The Bank of New York,
The First National Bank of Boston, The First National Bank of Chicago, The
Nippon Credit Bank, Ltd., Wachovia Bank of Georgia, N.A., SunTrust Bank, Atlanta
(formerly known as Trust Company Bank), AmSouth Bank of Alabama, and ABN AMRO
Bank, N.V. (collectively, the "Banks"), and NationsBank in its capacities as the
administrative agent for the Banks (the "Administrative Agent" or the "Agent")
and as trustee ("Trustee") for the Secured Parties (as hereafter defined).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Amended and Restated Credit
Agreement, dated as of November 23, 1994, as amended by that certain Amendment
Agreement dated as of December 4, 1995 (the "Existing Credit Agreement"), among
the parties hereto, the Banks have agreed to make loans to the Borrower;
WHEREAS, the Borrower, the Banks and the Agent desire to make certain
additional amendments to the Existing Credit Agreement;
NOW, THEREFORE, based upon the foregoing, and for good and valuable
consideration, the sufficiency and receipt of which is hereby acknowledged, the
parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. Unless otherwise defined herein or
the context otherwise requires, terms used in this Amendment, including its
preamble and recitals, have the following meanings (such meanings to be equally
applicable to the singular and plural forms thereof):
"Amended Collateral Trust Agreement" means the Existing Collateral
Trust Agreement as amended hereby.
"Amended Credit Agreement" means the Existing Credit Agreement as
amended hereby.
"Amendment Effective Date" is defined in Subpart 4.1.
"Borrower Subsidiaries" means each of the Subsidiaries of the Borrower.
"Existing Collateral Trust Agreement" means that certain Amended and
Restated Collateral Trust Agreement, dated as of November 23, 1994, by and among
the Borrower, each of the Borrower Subsidiaries, the Trustee, each of the
Lenders, and IBJ Xxxxxxxx Bank & Trust Company in its capacity as Xxxxxxx
Indenture Trustee.
"Trustee" means NationsBank, not in its individual capacity but in its
capacity as trustee for the Secured Parties (as defined in the Existing
Collateral Trust Agreement).
2
SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment, including its preamble
and recitals, have the meanings provided in the Amended Credit Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment Effective
Date, the Existing Credit Agreement is hereby amended in accordance with this
Part II. Except as so amended, the Existing Credit Agreement shall continue in
full force and effect.
SUBPART 2.1 Amendments to the Introduction. The first paragraph of the
Existing Credit Agreement is amended to read in its entirety as follows:
This Amended and Restated Credit Agreement, dated as of
November 23, 1994, as amended as of December 4, 1995 pursuant to that
certain Amendment Agreement, and as further amended as of January 23,
1997 pursuant to that certain Second Amendment and Waiver Agreement, is
entered into by and among WestPoint Xxxxxxx Inc., a Delaware
corporation (the "Borrower"), NationsBank, N.A. (formerly known as
NationsBank of North Carolina, N.A. and referred to herein as
"NationsBank"), The Bank of New York, The First National Bank of
Boston, The First National Bank of Chicago, The Nippon Credit Bank,
Ltd., Wachovia Bank of Georgia, N.A., SunTrust Bank, Atlanta (formerly
known as Trust Company Bank) (collectively, other than NationsBank, the
"Co-Agent Banks"), AmSouth Bank of Alabama, ABN AMRO Bank, N.V. and any
other lending institutions, if any, listed on the signature pages
hereof (together with NationsBank, the Co-Agent Banks and any Assignee
(as hereinafter defined) pursuant to the terms of this Agreement,
collectively, "Banks" and each individually, a "Bank"), and
NationsBank, as the administrative agent for the Banks (the
"Administrative Agent" or the "Agent").
SUBPART 2.2 New Definitions Added to Article I. Article I of the
Existing Credit Agreement is hereby amended by inserting, in the alphabetically
appropriate places, the following definitions:
"Dollar Amount" means (a) with respect to Dollars or an amount
denominated in Dollars, such amount, and (b) with respect to an amount
of Pounds Sterling or an amount denominated in Pounds Sterling, the
Dollar Equivalent of such amount on the date of determination thereof.
"Dollar Equivalent" means, on any date, with respect to an
amount denominated in Pounds Sterling, the amount of Dollars into which
the Agent could, in accordance with its practice from time to time in
the interbank foreign exchange market, convert such amount of Pounds
Sterling at its spot rate of exchange (inclusive of all reasonable
related costs of conversion) applicable to the relevant transaction at
or about 10:00 A.M., Charlotte, North Carolina time, on such date.
"European Borrowers" means collectively WestPoint Xxxxxxx UK
and Flower.
"Flower" means X.X. Flower & Co. Limited, an English
corporation and a wholly-owned subsidiary of WestPoint Xxxxxxx (UK).
2
3
"Foreign Currency Committed Amount" has the meaning ascribed
to such term in Section 2.1(a) of the Foreign Currency Credit
Agreement.
"Foreign Currency Credit Agreement" means that certain Credit
Agreement dated as of January 23, 1997 by and among WestPoint Xxxxxxx
(UK), Flower, the Borrower as guarantor, NationsBank as agent, and the
Banks, pursuant to which the Banks have agreed to make revolving credit
and letter of credit facilities available to the European Borrowers.
"Foreign Currency Loan Reserve" means, as of the date of any
determination thereof from time to time, an amount equal to the Dollar
Amount of the sum of (i) the outstanding principal balances of Foreign
Currency Loans and (ii) the Foreign Currency LOC Obligations, as such
terms are defined in the Foreign Currency Credit Agreement.
"Second Amendment Agreement" means that Second Amendment and
Waiver Agreement to this Credit Agreement, dated as of January 23,
1997, among the Borrower, the Agent and the Banks, amending this
Agreement as then in effect.
"WestPoint Xxxxxxx (UK)" means WestPoint Xxxxxxx (UK) Limited,
an English corporation and a wholly-owned subsidiary of the Borrower.
SUBPART 2.3 Amendment of the Definition of "Loan Documents." Article I
is further amended by deleting in its entirety the existing definition of "Loan
Documents" and replacing it, in the appropriate alphabetical place, with the
following new definition:
"Loan Documents" means, collectively this Agreement, the
Notes, the Collateral Trust Agreement, the other Collateral Documents,
the Letters of Credit, the Applications/Notices, and the Foreign
Currency Credit Agreement, as the same may be amended, modified,
supplemented or restated from time to time.
SUBPART 2.4 Amendment of the Definition of "Secondary Borrowing Base".
Article I is further amended by deleting in its entirety the existing definition
of "Secondary Borrowing Base" and replacing it, in the appropriate alphabetical
place, with the following new definition:
"Secondary Borrowing Base" means the amount equal to (i) 50%
of Eligible Inventory less (ii) the sum of (a) the Alamac Reserve and
(b) the Foreign Currency Loan Reserve.
SUBPART 2.5 Amendment to Section 3.4(a). Section 3.4(a) is amended in
its entirety so that such Section now reads as follows:
(a) The Borrower shall pay to the Administrative Agent for pro rata
distribution to each Bank (based on its Revolver Pro Rata Share) a commitment
fee (collectively, the "Commitment Fees") for the period commencing on the
Initial Borrowing Date to and including the Revolver Termination Date computed
at a rate equal to 3/8 of 1% per annum of the difference between (i) the average
daily amount of Revolving Loan Commitments and (ii) the sum of the average daily
outstanding principal amount of the Revolving Loans and the average daily
aggregate amount available for drawing under all outstanding Letters of Credit;
provided, however, for purposes of this subparagraph (ii), Swing Line Loans
shall not be counted as outstanding Revolving Loans. For the avoidance of any
doubt, in the calculation of the amount
3
4
of Commitment Fees owing by the Borrower to the Banks, the amount of the Alamac
Reserve and the Foreign Currency Loan Reserve shall not be counted as
outstanding Revolving Loans or otherwise affect or reduce the amount of
Commitment Fees owing by the Borrower to the Banks hereunder.
SUBPART 2.6 Amendments to Section 9.8(c). Section 9.8(c) is amended in
its entirety so that such Section now reads as follows:
(c) Subject to paragraph (f) of this Section 9.8, any Bank may
at any time assign to one or more banks or other entities ("Assignees")
all or any part of its Credit Exposure, provided that (i) unless
assigned to an Affiliate of such Bank or another Bank, it assigns all
of its Credit Exposure or a portion of its Credit Exposure in an amount
not less than $10,000,000 (calculated treating Revolving Loans and
participating interests in Letters of Credit as not being in addition
to the Revolving Loan Commitments), (ii) after such assignment, such
Bank and its Affiliates continue to hold at least $10,000,000
(calculated treating Revolving Loans and participating interests in
Letters of Credit as not being in addition to the Revolving Loan
Commitments) of Credit Exposure or have reduced their Credit Exposure
to $0, (iii) each Bank must sell and each Assignee must purchase an
identical percentage interest in the Primary Revolving Loan Credit
Exposure and the Secondary Revolving Loan Credit Exposure, (iv)
simultaneously with the sale of its Credit Exposure or any portion of
its Credit Exposure to any Assignee, each Bank must sell, to the same
such Assignee, the same percentage in its share of the Revolving
Committed Amount under the Alamac Credit Agreement (as such term is
defined therein) as the percentage of its Credit Exposure which it
assigns hereunder, to such Assignee, (v)simultaneously with the sale of
its Credit Exposure or any portion of its Credit Exposure to any
Assignee, each Bank must sell, to the same such Assignee, the same
percentage in its share of the Foreign Currency Committed Amount as the
percentage of its Credit Exposure which it assigns hereunder, to such
Assignee, and (vi) any Assignee, other than an Affiliate of such Bank
or another Bank, must be reasonably acceptable to the Administrative
Agent and the Borrower. Such acceptance shall not be unreasonably
delayed or withheld and, in the case of the Borrower, such acceptance
shall be deemed to have occurred unless the Borrower gives the
Administrative Agent notice of its objection to such Assignee within 24
hours after the Administrative Agent sends the Borrower notice of the
assignment pursuant to the next sentence. In the event of any
assignment, the assignor Bank shall give notice to the Administrative
Agent, the Administrative Agent shall send notice of the same by
telecopy to the Borrower, and the assignor Bank shall deliver to the
Administrative Agent, for its acceptance and recording in its records,
an assignment agreement substantially in the form of Exhibit 9.8
hereto, together with a processing and recordation fee of $3,000 (or if
the Assignee is a Bank, $1,500); provided that in the case of any
assignment pursuant to Section 2.9(e) the Assignee shall pay such
processing and recording fee, and, notwithstanding any provision of
this Agreement to the contrary, the Borrower shall not be required to
pay any such processing and recording fee under any circumstances.
Within five (5) Business Days of receipt thereof, the Administrative
Agent shall, if such assignment agreement has been fully executed by
the Assignee and the assignor Bank and completed and is in
substantially the form of Exhibit 9.8 hereto, execute such assignment
agreement and, as agent for the Borrower for the sole purpose of
maintaining a register (the "Register") on which it enters the Credit
Exposure of each Bank hereunder, record such assignment in the
Register. No assignment shall be effective unless it has been recorded
on the Register as provided in this Section 9.8(c). The Borrower, the
Administrative Agent and the Banks shall treat each Bank for which
Credit Exposure is recorded on the Register as the holder of such
Credit Exposure for all purposes of this Agreement notwithstanding
notice to the contrary. Notwithstanding the foregoing, the failure of
the Administrative Agent to make such recording in
4
5
respect of an assignment pursuant to this Section 9.8(c) or any
error with respect to such recording shall not limit or otherwise
affect the obligations of the Borrower hereunder nor shall such failure
or error affect the rights of the Borrower hereunder or under
applicable law. The Borrower, the Banks, and the Administrative Agent
agree that to the extent of any assignment, the Assignee shall be
deemed to have the same rights and benefits with respect to the
Borrower under this Agreement and the same rights of set-off and
obligation to share pursuant to Section 9.6 as it would have had if it
were a Bank that was an original signatory to this Agreement, provided
that the Borrower, the Banks and the Administrative Agent shall be
entitled to continue to deal solely and directly with the assignor Bank
in connection with the interests so assigned to the Assignee until the
assignment agreement and any required fee, as described above, shall
have been delivered to the Administrative Agent by the assignor Bank
and the Assignee and the assignment shall have become effective as
described above. Upon the assignment of Credit Exposure provided for
hereby, the assignor Bank shall be relieved of its obligations
hereunder to the extent of such assignment. Upon receipt of any Note
representing Credit Exposure assigned pursuant to this Section 9.8(c),
the Borrower agrees to issue a new Note for such Credit Exposure
payable to the Assignee (or its registered assigns) and a new Note for
any unassigned portion of such Credit Exposure to the assignor Bank (or
its registered assigns).
PART III
AGREEMENTS AFFECTING COLLATERAL TRUST AGREEMENT
SUBPART 3.1. Amendment to Definitions of Collateral Trust Agreement. Effective
on (and subject to the occurrence of ) the Amendment Effective Date, the
Existing Collateral Trust Agreement is hereby amended in accordance with this
Subpart 3.1. Except as so amended, and subject to the waivers contained in
Subpart 3.2 hereof, the Existing Collateral Trust Agreement shall continue in
full force and effect.
SUBPART 3.1.1. Amendment to Definition of "Debt Instruments." Section
1.1(a) of the Existing Collateral Trust Agreement is amended by deleting in its
entirety the existing definition of "Debt Instruments" and replacing it, in the
appropriate alphabetical place, with the following new definition:
"Debt Instruments" means (i) the Restated Credit Agreement, any
notes issued pursuant thereto and the other agreements, documents and
instruments executed in connection therewith, and any amendments,
supplements, or restatements thereof, including, without limitation,
the Restated Guaranties, the Foreign Currency Credit Agreement and the
notes issued pursuant thereto, and liabilities of up to $10,000,000
outstanding at any time under interest rate swap agreements with Banks
permitted by the Restated Credit Agreement, and (ii) the Xxxxxxx
Indenture, the Xxxxxxx Debentures and the other documents and
instruments executed in connection therewith.
SUBPART 3.2. Limited Waiver of Requirements of Section 2.2(b) and (c)
of Collateral Trust Agreement. Effective on (and subject to the occurrence of )
the Amendment Effective Date, the Banks, which in the aggregate constitute the
Required Secured Parties as defined in the Existing Collateral Trust Agreement,
hereby waive the Borrower's compliance with Section 2.2(b) and (c) of the
Existing Collateral Trust Agreement to the limited extent that such provisions
(i) would otherwise require the Borrower to pledge to the Trustee the capital
stock of WestPoint Xxxxxxx (UK); (ii) would otherwise require WestPoint Xxxxxxx
(UK) to pledge to the Trustee the capital stock of Flower; (iii) would otherwise
require WestPoint Xxxxxxx (UK) and Flower to guaranty the Secured Debt; and (iv)
would otherwise require WestPoint
5
6
Xxxxxxx (UK) and Flower to grant liens and security interests on their
respective assets in favor of the Trustee to secure the Secured Debt. Such
waiver is effective only with respect to Flower and WestPoint Xxxxxxx (UK) and
does not relate to any other application, prospective or otherwise, of the
requirements of such Section.
PART IV
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1. Amendment Effective Date. This Amendment shall be and
become effective on such date (the "Amendment Effective Date") when all of the
conditions set forth in this Subpart 4.1 shall have been satisfied, and
thereafter, this Amendment shall be known, and may be referred to, as the
"Amendment Agreement."
SUBPART 4.1.1. Execution of Counterparts. The Agent shall have received
counterparts of this Amendment, each of which shall have been duly executed on
behalf of the Borrower, the Agent and each Bank.
SUBPART 4.1.2. Certified Resolutions. The Agent shall have received
resolutions of the Board of Directors of the Borrower authorizing this
Amendment, such resolutions to be certified by the Secretary or Assistant
Secretary of the Borrower.
SUBPART 4.1.3. Closing Certificate. The Agent shall have received a
certificate from the Borrower certifying that (i) no Default or Event of Default
exists as of the Amendment Effective Date, and (ii) the representations and
warranties of the Borrower made in or pursuant to the Loan Documents are true in
all material respects on and as of the Amendment Effective Date.
SUBPART 4.1.4. Trustee Certificates. In accordance with Section 11.1 of
the Existing Collateral Trust Agreement, the Trustee shall have received a
certificate executed by the president or any vice president of the Borrower to
the effect that the amendments to the Existing Collateral Trust Agreement
effected by this Amendment will not result in a breach of any provision or
covenant contained in the Restated Credit Agreement.
SUBPART 4.1.5. Documentation. All documents executed or submitted
pursuant hereto shall be satisfactory in form and substance to the Agent and its
counsel. The Agent and its counsel shall have received all information, and such
counterpart originals or such certified or other copies of such originals, as
the Agent may reasonably request, and all legal matters incident to the
transactions contemplated by this Amendment shall be satisfactory to the Agent.
In addition, the Agent shall have received such other agreements, documents or
instruments (including legal opinions) as it may from time to time reasonably
request.
SUBPART 4.2 Acknowledgement and Agreement of Borrower Subsidiaries.
Each of the undersigned Borrower Subsidiaries, as parties to the Restated
Guaranties and the Collateral Documents, hereby (a) acknowledge, agree to, and
join in the execution and delivery of this Amendment, including without
limitation the amendment of the Existing Collateral Trust Agreement effected
hereby, and confirm and agree that the Restated Guaranties and the Collateral
Documents are, and shall continue to be, in full force and effect except as
amended hereby; (b) ratify and confirm in all respects their respective
obligations thereunder, except that, upon the effectiveness of, and on and after
the date of, this Amendment, all references in the Collateral Documents and the
Restated Guaranties to the "Restated Credit Agreement,"
6
7
"thereunder," "thereof" or words of like import referring to the Existing Credit
Agreement (as defined in this Amendment) shall mean the Amended Credit Agreement
(as defined in this Amendment), and all references to the Collateral Trust
Agreement, "thereunder," thereof," or words of like import referring to the
Collateral Trust Agreement shall mean the Amended Collateral Trust Agreement (as
defined in this Amendment).
PART V
MISCELLANEOUS
SUBPART 5.1 Cross-References. References in this Amendment to any Part
or Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment.
SUBPART 5.2 Instrument Pursuant to Existing Credit Agreement. This
Amendment is a document executed pursuant to the Existing Credit Agreement and
shall (unless otherwise expressly indicated therein) be construed, administered
and applied in accordance with the terms and provisions of the Existing Credit
Agreement.
SUBPART 5.3 Primary Subsidiaries. The Borrower, the Lenders, and the
Agent acknowledge and agree that each of the European Borrowers constitutes a
"Primary Subsidiary" within the meaning of the Amended Credit Agreement.
SUBPART 5.4 Notes and Loan Documents. The Borrower hereby confirms and
agrees that the Notes and the other Loan Documents are, and shall continue to
be, in full force and effect, and hereby ratifies and confirms in all respects
its obligations thereunder, except that, upon the effectiveness of, and on and
after the date of, this Amendment, all references in each Note and each other
Loan Document to the "Credit Agreement", "thereunder", "thereof" or words of
like import referring to the Existing Credit Agreement shall mean the Amended
Credit Agreement.
SUBPART 5.5 Counterparts, Effectiveness, Etc. This Amendment may be
executed by the parties hereto in several counterparts, each of which shall be
deemed to be an original and all of which shall constitute together but one and
the same agreement.
SUBPART 5.6 Governing Law; Entire Agreement. THIS AMENDMENT SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES
THEREOF.
SUBPART 5.7 Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
7
8
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the day and year
first above written.
WESTPOINT XXXXXXX INC.
ATTEST:
By By
----------------------------- -----------------------------------
Title Title
-------------------------- --------------------------------
NATIONSBANK, N.A.,
in its individual capacity, as Agent
and as Trustee
By
----------------------------------
Title
-------------------------------
THE BANK OF NEW YORK
By
----------------------------------
Title
-------------------------------
THE FIRST NATIONAL BANK OF BOSTON
By
----------------------------------
Title
-------------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By
----------------------------------
Title
-------------------------------
[Signatures Continue]
9
THE NIPPON CREDIT BANK, LTD.
By
----------------------------------
Title
-------------------------------
WACHOVIA BANK OF GEORGIA, N.A.
By
----------------------------------
Title
-------------------------------
SUNTRUST BANK, ATLANTA
By
----------------------------------
Title: Vice President
By
----------------------------------
Title
-------------------------------
AMSOUTH BANK OF ALABAMA
By
----------------------------------
Title
-------------------------------
ABN AMRO BANK, N.V.
By
----------------------------------
Title
-------------------------------
[Signatures Continue]
9
10
BORROWER SUBSIDIARIES: ALAMAC KNIT FABRICS, INC.
By
----------------------------------
Title
-------------------------------
WESTPOINT XXXXXXX STORES, INC.
(formerly known as WestPoint Pepperell
Stores, Inc.)
By
----------------------------------
Title
-------------------------------
X.X. XXXXXXX & CO., INC.
By
----------------------------------
Title
-------------------------------
WESTPOINT-PEPPERELL ENTERPRISES, INC.
By
----------------------------------
Title
-------------------------------
X.X. XXXXXXX ENTERPRISES, INC.
By
----------------------------------
Title
-------------------------------
[Signatures Continue]
00
XXXXXXXXX XXXXXXX (XXXXXX) LTD.
By
----------------------------------
Title
-------------------------------
ALAMAC HOLDINGS INC.
By
----------------------------------
Title
-------------------------------
AIH INC.
By
----------------------------------
Title
-------------------------------
ALAMAC ENTERPRISES INC.
By
----------------------------------
Title
-------------------------------
ALAMAC SUB HOLDINGS INC.
By
----------------------------------
Title
-------------------------------
