FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT dated as of March 29, 1999 (the
"Agreement") is entered into among Worldtex, Inc., a Delaware corporation (the
"Borrower"), the Domestic Subsidiaries of the Borrower, as Guarantors, the
Lenders party thereto and NationsBank, N.A., as Agent. All capitalized terms
used herein and not otherwise defined herein shall have the meanings given to
such terms in the Credit Agreement (as defined below).
RECITALS
WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent entered
into that certain Credit Agreement dated as of December 1, 1997 (as amended and
modified from time to time, the "CREDIT AGREEMENT");
WHEREAS, the Borrower has requested and the Lenders have agreed to amend
certain terms of the Credit Agreement as set forth below;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AMENDED DEFINITIONS.
(a) The pricing grid in the definition of "APPLICABLE PERCENTAGE"
set forth in Section 1.1 of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
Applicable
Percentage
For
Eurodollar Applicable Applicable
Loans and Percentage Percentage Applicable
CD Rate For For Percentage
Loans and Base Letter of For
Pricing Leverage Swingline Rate Credit Unused
Level Ratio Loans Loans Fees Fees
----- ----- ----- ----- ---- ----
I greater than 2.50% 1.25% 2.50% .50%
6.25 to 1.0
II less than or equal 2.25% 1.0% 2.25% .50%
to 6.25 to 1.0
but greater than
5.25 to 1.0
III less than or equal 1.75% .75% 1.75% .375%
to 5.25 to 1.0 but
but greater than
4.25 to 1.0
IV less than or equal 1.50% .50% 1.50% .30%
to 4.25 to 1.0 but
greater than 3.0
to 1.0
V less than or equal 1.25% .25% 1.25% .25%
to 3.0 to 1.0 but
greater than 2.0
to 1.0
VI less than or equal 1.0% 0% 1.0% .20%
to 2.0 to 1.0
(b) The definition of "REQUIRED LENDERS" is hereby amended and
restated in its entirety to read as follows:
"REQUIRED LENDERS" means (i) until such time as there are three (3)
Lenders party to the Credit Agreement, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate 100% of (a) the Commitments and (b) if the
Commitments have been terminated, the outstanding Loans and Participation
Interests (including the Participation Interests of the Issuing Lender in
any Letters of Credit) and (ii) at such time as there are at least three
(3) Lenders party to the Credit Agreement, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate at least 67% of (a) the Commitments and (b)
if the Commitments have been terminated, the outstanding Loans and
Participation Interests (including the Participation Interests of the
Issuing Lender in any Letters of Credit). For purposes of this definition,
NationsBank, N.A. and Bank of America National Trust and Savings
Association will be considered one Lender.
(c) A definition of "YEAR 2000 COMPLIANT" is hereby added to Section
1.1 of the Credit Agreement and shall read as follows:
"YEAR 2000 COMPLIANT" shall have the meaning assigned to such term
in Section 6.18.
2. YEAR 2000 COMPLIANCE. A new Section 6.18 is hereby added to the Credit
Agreement and shall read as follows:
6.18 YEAR 2000 COMPLIANCE.
Each of the Credit Parties has (i) initiated a review and assessment
of all areas within its and each of its Subsidiaries' businesses and
operations (including those affected by suppliers, vendors and customers)
that could be adversely affected by the "Year 2000 Problem" (that is, the
risk that computer applications may not be able to recognize and properly
perform date-sensitive functions after December 31, 1999), (ii) developed
a plan and timeline for addressing the Year 2000 Problem on a timely
basis, and (iii) to date, implemented that plan in accordance with that
timetable. Based on the foregoing, each Credit Party believes that all
computer applications (including those of its suppliers, vendors and
customers) that are material to its or any of its Subsidiaries' business
and operations are reasonably expected on a timely basis to be able to
perform properly date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "Year 2000 Compliant"), except to the extent
that a failure to do so could not reasonably be expected to have a
Material Adverse Effect.
3. LEVERAGE RATIO. Section 7.9(a) of the Credit Agreement is hereby
amended and restated in its entirety to read as follows:
(a) LEVERAGE RATIO.
There shall be maintained with respect to the Borrower and its
Subsidiaries as of the end of each fiscal quarter to occur during the
periods shown, a Leverage Ratio less than:
(i) From March 31, 1999 to and including June 29, 1999, 7.65 to
1.0;
(ii) From June 30, 1999 to and including September 29, 1999, 6.85
to 1.0;
(iii) From September 30, 1999 to and including December 30, 1999,
6.50 to 1.0;
(iv) From December 31, 1999 to and including March 30, 2000, 5.60
to 1.0;
(v) From March 31, 2000 to and including June 29, 2000, 4.0 to
1.0;
(vi) From June 30, 2000 to and including December 30, 2000, 3.75
to 1.0; and
(vii) From December 31, 2000 and thereafter, 3.6 to 1.0.
4. INTEREST COVERAGE RATIO. Section 7.9(b) of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:
(b) INTEREST COVERAGE RATIO.
There shall be maintained with respect to the Borrower and its
Subsidiaries as of the end of each fiscal quarter to occur during the
periods shown, an Interest Coverage Ratio greater than:
(i) From March 31, 1999 to and including June 29, 1999, 1.35 to
1.0;
(ii) From June 30, 1999 to and including September 29, 1999, 1.50
to 1.0;
(iii) From September 30, 1999 to and including December 30, 1999,
1.60 to 1.0;
(iv) From December 31, 1999 to and including March 30, 2000, 1.80
to 1.0;
(v) From March 31, 2000 to and including September 29, 2000, 2.5
to 1.0; and
(vi) From September 30, 2000 and thereafter, 2.6 to 1.0.
5. NET WORTH. Section 7.9(d) of the Credit Agreement is hereby amended and
restated in its entirety to read as follows:
(d) NET WORTH. At all times Net Worth shall be no less than
$82,000,000 increased on a cumulative basis by an amount equal to, (i)
commencing with the fiscal quarter ending March 31, 1999, as of the last
day of each fiscal quarter, 50% of Net Income for the fiscal quarter then
ended (without deductions for losses) PLUS (ii) 100% of the Net Cash
Proceeds from any Equity Transaction subsequent to the Closing Date.
6. SCHEDULE 6.17. Schedule 6.17 of the Credit Agreement is hereby amended
to delete therefrom the reference to Elastex, Inc. and the information relating
to it.
7. YEAR 2000 COMPLIANCE. A new Section 7.12 is hereby added to the Credit
Agreement and shall read as follows:
7.12 YEAR 2000 COMPLIANCE.
The Credit Parties will promptly notify the Agent in the event any
Credit Party discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material
to its or any of its Subsidiaries' business and operations will not be
Year 2000 Compliant, except to the extent that such failure could not
reasonably be expected to have a Material Adverse Effect.
8. SECURITY AGREEMENT. The Security Agreement is hereby amended in the
following respects:
(a) Section 5(d) of the Security Agreement is hereby amended and
restated in its entirety to read as follows:
(d) CHANGE IN LOCATION OR NAME. Not, without providing 30 days
prior written notice to the Agent and without filing such amendments
to any previously filed financing statements as the Agent may
require, (i) change the location of its chief executive office and
chief place of business (as well as its books and records) from the
locations set forth on SCHEDULE 4(B) attached hereto, (ii) change
the location of its Collateral from the locations set forth on
SCHEDULE 4(A) attached hereto, and (iii) change its legal name or
begin using a tradename other than as set forth on SCHEDULE 4(C)
attached hereto.
9. CONDITIONS PRECEDENT. The effectiveness of this Agreement is subject to
the satisfaction of each of the following conditions:
(a) The Agent shall have received original counterparts of this
Agreement duly executed by the Borrower, the Guarantors and the Required
Lenders;
(b) The Agent shall have received an opinion from the counsel to the
Credit Parties as to authority, enforceability and such other matters as
may be required by the Agent; and
(c) Payment by the Borrower to each of the Lenders of an amendment
fee in an amount equal to 0.25% of the Revolving Commitment of such
Lender.
10. MISCELLANEOUS.
(a) The term "Credit Agreement" as used in each of the Credit
Documents shall hereafter mean the Credit Agreement as amended by this
Agreement. Except as herein specifically agreed, the Credit Agreement, and
the obligations of the Credit Parties thereunder and under the other
Credit Documents, are hereby ratified and confirmed and shall remain in
full force and effect according to their terms.
(b) The Borrower and the Guarantors, as applicable, affirm the liens
and security interests created and granted in the Credit Agreement and the
Credit Documents and agree that this Agreement shall in no manner
adversely affect or impair such liens and security interests.
(c) The Borrower and the Guarantors hereby represent and warrant as
follows:
(i) Each Credit Party has taken all necessary action to
authorize the execution, delivery and performance of this Agreement.
(ii) This Agreement has been duly executed and delivered by
the Credit Parties and constitutes each of the Credit Parties' 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).
(iii) 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 any Credit Party of this Agreement.
(d) The Credit Parties represent and warrant to the Lenders that (i)
the representations and warranties of the Credit Parties set forth in
Section 6 of the Credit Agreement and in each other Credit Document are
true and correct as of the date hereof with the same effect as if made on
and as of the date hereof, except to the extent such representations and
warranties expressly relate solely to an earlier date and (ii) no unwaived
event has occurred and is continuing which constitutes a Default or an
Event of Default.
(e) The Guarantors (i) acknowledge and consent to all of the terms
and conditions of this Agreement, (ii) affirm all of their obligations
under the Credit Documents and (iii) agree that this Agreement and all
documents executed in connection herewith do not operate to reduce or
discharge the Guarantors' obligations under the Credit Agreement or the
other Credit Documents.
(f) This Agreement 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 an
executed counterpart of this Agreement by telecopy shall be effective as
an original and shall constitute a representation that an executed
original shall be delivered.
(g) THIS AGREEMENT 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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Each of the parties hereto has caused a counterpart of this Agreement to
be duly executed and delivered as of the date first above written.
WORLDTEX, INC., a Delaware corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
REGAL MANUFACTURING COMPANY, INC., a
Delaware corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
ELASTIC CORPORATION OF AMERICA, INC., a
Delaware corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
WTX COLOMBIA II, INC., a Delaware
corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
WTX COLOMBIA I, INC., a Delaware
corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
[SIGNATURES CONTINUE]
XXXXXXX & XXXXX XXXXX OF DELAWARE, INC.,
a Delaware corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
REGAL YARNS OF ARGENTINA, INC., a North
Carolina corporation
By: ________________________________
Name: ______________________________
Title: _____________________________
NATIONSBANK, N.A., individually in its
capacity as a Lender and in its capacity
as the Agent
By: ________________________________
Name: ______________________________
Title: _____________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: ________________________________
Name: ______________________________
Title: _____________________________
BANQUE NATIONALE DE PARIS
By: ________________________________
Name: ______________________________
Title: _____________________________
