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EXHIBIT 10.1
THIRD AMENDMENT AGREEMENT
This Third Amendment Agreement, dated as of May 30, 2000 (this
"Agreement"), is among WESTPOINT XXXXXXX INC., a Delaware corporation (the
"Borrower"), WESTPOINT XXXXXXX (UK) LIMITED, WESTPOINT XXXXXXX (EUROPE)
LIMITED, each of the Banks signatories hereto, and BANK OF AMERICA, N.A., as
Administrative Agent (the "Agent").
RECITALS:
A. Pursuant to that certain Second Amended and Restated Credit
Agreement, dated as of June 9, 1998 among the Borrower, WestPoint Xxxxxxx (UK)
Limited and WestPoint Xxxxxxx (Europe) Limited (collectively, the "Foreign
Borrowers"), the lending and financial institutions party thereto (the
"Original Banks"), and the Agent, as amended by that certain letter agreement
dated as of June 10, 1998 among the Borrower, the Foreign Borrowers, the
Existing Banks, and the Agent (as amended, the "Original Credit Agreement"),
the Original Banks agreed to make revolving loan and letter of credit
facilities available to the Borrower and the Foreign Borrowers.
B. Pursuant to that certain Amendment Agreement (the "First
Amendment"), dated as of July 31, 1998, by and among the Borrower, the Foreign
Borrowers, the Original Banks parties thereto, the Agent, and National
Westminster Bank PLC ("Natwest"), the Original Credit Agreement was amended to
increase the aggregate Revolving Committed Amount from $550,000,000 to
$575,000,000, and to add Natwest as a Bank under the Original Credit Agreement
(as amended by the First Amendment, the "First Amended Credit Agreement").
C. Pursuant to that certain Second Amendment Agreement (the
"Second Amendment"), dated as of May 20, 1999, by and among the Borrower, the
Foreign Borrowers, the Banks parties thereto, and the Agent, the First Amended
Credit Agreement was amended to increase the aggregate Revolving Committed
Amount to $800,000,000 by increasing the Revolving Commitment of certain
consenting Banks (as amended by the Second Amendment, the "Second Amended
Credit Agreement").
D. By separate letter agreements dated June, 30, 1998, October
7, 1998, March 16, 1999, August 31, 1999, and November 15, 1999, the Borrower,
the Foreign Borrowers, the Required Banks, and the Agent have amended the
definitions of the terms "Maximum Restricted Payment Amount" and "Minimum
Consolidated Net Worth" on four occasions (the "Letter Amendments"). The
Original Credit Agreement, as amended by the First Amendment, the Second
Amendment, and the Letter Amendments shall be referred to as the "Existing
Credit Agreement".
E. The Borrower and the Foreign Borrowers have requested that
the Required Banks agree to make certain additional amendments to the Existing
Credit Agreement.
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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 Agreement, including its
preamble and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit Agreement as
amended hereby.
"Effective Date" shall have the meaning ascribed to such term
in Subpart 3.1.
SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Agreement, 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 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 Existing Definitions in Section 1.1.
Section 1.1 of the Existing Credit Agreement is amended by revising each of the
following definitions in the manner described below:
(a) Applicable Percentage. The definition of the term "Applicable
Percentage" is amended by substituting the following matrix for the one
previously set forth in the definition of "Applicable Percentage" in the
Existing Credit Agreement:
PRICING LEVEL Rate Adjustment Ratio Applicable Percentage For
Eurocurrency Loans, Standby
Letter of Credit Fee and Trade
Letter of Credit Fee
I LESS THAN OR EQUAL TO 1.0%
2.75
II LESS THAN OR EQUAL TO 3.25 BUT 0.75%
GREATER THAN 2.75
III GREATER THAN 3.25 0.50%
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(b) The definition of the terms "Consolidated Net Income" and
"Consolidated Net Loss" are amended to read in their entirety as follows:
"Consolidated Net Income" and "Consolidated Net Loss" mean,
respectively, for any period, the aggregate net income (or net loss)
of the Consolidated Parties on a consolidated basis, as determined in
accordance with GAAP. There shall be excluded in computing
Consolidated Net Income and Consolidated Net Loss, to the extent
otherwise included therein, (i) any gain or loss which is treated as
an extraordinary item under GAAP and any gain or loss from the sale of
any asset other than a sale in the ordinary course of business, (ii)
the income or loss of any Person (other than a Consolidated Subsidiary
of the Borrower) in which any other Person (other than the Borrower or
any of its Consolidated Subsidiaries) has a joint interest, except to
the extent of the amount of dividends or other distributions actually
paid to the Borrower or any of its Consolidated Subsidiaries by such
Person during such period, (iii) the income or loss of any Person
accrued prior to the date it becomes a Consolidated Subsidiary of the
Borrower or is merged into or consolidated with the Borrower or any of
its Consolidated Subsidiaries or that Person's assets are acquired by
the Borrower or any of its Consolidated Subsidiaries, (iv) the income
of any Consolidated Subsidiary of the Borrower to the extent that the
declaration or payment of dividends or similar distributions by that
Consolidated Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Consolidated Subsidiary (the only such restrictions
as of the date hereof being those imposed by the corporate law of any
such Subsidiary's state of incorporation), (v) the amortization of
Excess Reorganization Value during such period as determined in
accordance with GAAP, and (vi) the 2000 Restructuring Charges.
(c) The definition of the term "Consolidated Net Worth" is
amended to read in its entirety as follows:
"Consolidated Net Worth" means, as of any date, all amounts
which would be included under stockholders' equity on a balance sheet
of the Borrower and its Consolidated Subsidiaries determined as at
such date on a consolidated basis in accordance with GAAP. There shall
be excluded in computing Consolidated Net Worth (a) the amortization
of Excess Reorganization Value since January 1, 1993 as determined in
accordance with GAAP, (b) the effect of the Restructuring Charge,
adjusted to reflect the tax effect of such charge, (c) any non-cash
minimum pension liability adjustment determined in accordance with
GAAP, without giving effect to any adjustment for minority interest in
the cases of clauses (a) and (b) above, (d) the effect of the
after-tax write-off of deferred financing fees and expenses related to
the Original Credit Agreement (and each amendment or restatement
thereof, including the 1994 Credit Agreement and this Credit
Agreement, as amended), (e) the after-tax extraordinary expenses in
1998 and 1999 associated with the refinancing of the Borrower's 8-3/4%
senior notes, its 9-3/8% senior subordinated debentures, its 9%
sinking fund debentures and the Permitted Receivables Financing, and
(f) the effect of the 2000 Restructuring Charge.
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(d) The definition of the term Maximum Restricted Payment Amount
is amended to read in its entirety as follows:
"Maximum Restricted Payment Amount" means the sum of (i)
$358,874,000, plus (ii) 50% of the Consolidated Net Income from and
after September 30, 1999 until any relevant measurement date, plus
(iii) the Net Cash Proceeds received by the Borrower from the exercise
of stock warrants or options by current or former employees or
directors of the Borrower in respect of Capital Stock of the Borrower
from and after June 30, 1999.
SUBPART 2.2 Addition of New Definitions in Section 1.1. Section
1.1 of the Existing Credit Agreement is further amended by adding each of the
following new definitions in their appropriate alphabetical order:
(a) "2000 Restructuring Charge" means the following
non-recurring charges, in the aggregate amount not in excess of
$125,000,000, incurred, accrued or reserved by the Borrower or its
Consolidated Subsidiaries during fiscal year 2000: (i) write-off of
goodwill and other intangibles related to impaired assets; (ii) direct
inventory write-offs and/or related increases in inventory reserves;
(iii) write-offs of fixed assets and non- capitalized relocation
charges; and (iv) without duplication, relocation, severance,
unabsorbed overhead, and other costs related to the Borrower's
restructuring, impairment charges and recapitalization plan as
disclosed to the Agent and the Banks.
(b) "Balance Sheet Debt" means all Funded Indebtedness
of the Borrower and the Consolidated Subsidiaries less any amount of
any Indebtedness incurred and outstanding in relation to the Permitted
Receivables Financing, any Guaranty Obligations, and any Letters of
Credit (to the extent any such Indebtedness would otherwise constitute
Funded Indebtedness).
SUBPART 2.3 Amendment to Section 2.1(a). Section 2.1(a) of the
Existing Credit Agreement is amended to read in its entirety as follows:
2.1 REVOLVING LOANS.
(a) Revolving Commitment. Subject to the terms and
conditions hereof and in reliance upon the representations and
warranties set forth herein, each Bank severally agrees to make
available to the Borrower such Bank's Revolving Commitment Percentage
(as set forth on Schedule 2.1(a)) of revolving credit loans requested
by the Borrower in Dollars ("Revolving Loans") from time to time from
the Closing Date until the Maturity Date, or such earlier date as the
Revolving Commitments shall have been terminated as provided herein;
provided, however, that the sum of the aggregate principal amount of
outstanding Revolving Loans shall not exceed (i) at any time prior to
July 1, 2001, EIGHT HUNDRED MILLION DOLLARS ($800,000,000), (ii) from
and after July 1, 2001, SEVEN HUNDRED TWENTY-FIVE MILLION DOLLARS
($725,000,000), and (iii) from and after July 1, 2002, SIX HUNDRED
FIFTY MILLION DOLLARS ($650,000,000) (as such aggregate maximum
amounts may be reduced from time to time as provided in Section 3.4,
the "Revolving Committed
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Amount"); provided, further, (i) with regard to each Bank
individually, such Bank's outstanding Revolving Loans shall not exceed
such Bank's Revolving Commitment, (ii) with regard to the Banks
collectively, the aggregate principal amount of outstanding Revolving
Loans plus the aggregate principal amount of Competitive Loans plus
the Dollar Amount of the aggregate outstanding principal amount of
Foreign Currency Loans, plus the aggregate principal amount of
outstanding Swingline Loans plus the Dollar Amount of LOC Obligations
outstanding shall not exceed the Revolving Committed Amount. Revolving
Loans may consist of Base Rate Loans or Eurocurrency Loans, or a
combination thereof, as the Borrower may request; provided, however,
that no more than eight (8) Eurocurrency Loans shall be outstanding
under this Section 2.1 at any time (it being understood that, for
purposes hereof, Eurocurrency Loans with different Interest Periods
shall be considered as separate Eurocurrency Loans, even if they begin
on the same date, although borrowings, extensions and conversions may,
in accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurocurrency Loan with a
single Interest Period). Revolving Loans may be repaid and reborrowed
in accordance with the provisions hereof.
SUBPART 2.4 Amendment of Section 7.11(a). Section 7.11(a) of the
Existing Credit Agreement is amended in its entirety to read as follows:
(a) Minimum Consolidated Net Worth. Have a Consolidated
Net Worth as of the last day of each fiscal quarter of not less than
(i) $20,000,000, (ii) increased on a cumulative basis as of the end of
each fiscal quarter of the Consolidated Parties, commencing with the
fiscal quarter ending June 30, 1998, by an amount equal to forty
percent (40%) of Consolidated Net Income (to the extent positive) for
the fiscal quarter then ended, and (iii) further increased on a
cumulative basis by fifty percent (50%) of Consolidated Net Income (to
the extent positive) for the period October 1, 1998 through September
30, 1999.
SUBPART 2.5 Amendment of Section 7.11(c). Section 7.11(c) of the
Existing Credit Agreement is amended in its entirety to read as follows:
(c) Interest Coverage Ratio. Have at the end of each
fiscal quarter an Interest Coverage Ratio which is not less than 2.00
to 1.00.
SUBPART 2.6 Addition of New Section 7.11(d). Section 7.11 of the
Existing Credit Agreement is further amended by adding a new subsection (d)
which reads in its entirety as follows:
(d) Balance Sheet Debt to Consolidated EBITDA Ratio.
Have at the end of each fiscal quarter a ratio of Balance Sheet Debt
on such date to Consolidated EBITDA for the four (4) fiscal quarters
ending on such date of (i) not more than 4.85 to 1.0 from and after
December 31, 2000, and (ii) not more than 4.50 to 1.0 from and after
December 31, 2001.
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PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1 Effective Date. The amendments effected by this
Agreement shall be and become effective as of the date hereof when (i) all of
the conditions set forth in this Subpart 3.1 shall have been satisfied, and
(ii) the Required Banks, the Borrower, and the Foreign Borrowers shall have
duly executed counterparts of this Agreement and provided original copies
thereof to the Agent.
SUBPART 3.1.1. Closing Certificate. The Agent shall have
received a certificate from the Borrower and the Foreign Borrowers certifying
that (i) no Default or Event of Default exists as of the Effective Date, and
(ii) the representations and warranties of the Borrower and the Foreign
Borrowers made in or pursuant to the Credit Documents are true in all material
respects on and as of the Effective Date.
SUBPART 3.1.2. Guarantors Consent. Each of the Guarantors
shall have executed the Consent included in the signature pages of this
Agreement, and the Agent shall have received such Consent executed by each
Guarantor.
SUBPART 3.1.3. Corporate Action. The Borrower shall deliver
to the Agent certified copies of all corporate action taken by each Credit
Party approving this Agreement and each of the documents executed and delivered
in connection herewith (including, without limitation, a certificate setting
forth the resolutions of the Board of Directors of each Credit Party adopted in
respect of the transactions contemplated by this Agreement.)
SUBPART 3.1.4. Documentation. The Existing Banks and the
Agent shall have received all information, and such counterpart originals or
such certified or other copies of such originals, as they may reasonably
request, together with the legal opinion of counsel to the Borrower in form and
content reasonably satisfactory to the Agent and its counsel. All legal matters
incident to the transactions contemplated by this Agreement shall be
satisfactory to the counsel for the Agent.
SUBPART 3.1.5. Amendment Fee. An amendment fee of 25 basis
points ($2,000,000) of the Revolving Committed Amount shall be paid pro rata to
those Banks executing and delivering this Agreement to the Agent prior to the
deadline established by the Agent for the receipt thereof.
PART IV
MISCELLANEOUS
SUBPART 4.1 Cross-References. References in this Agreement to any
Part or Subpart are, unless otherwise specified, to such Part or Subpart of
this Agreement.
SUBPART 4.2 Instrument Pursuant to Existing Credit Agreement.
This Agreement 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 4.3 Credit Documents. Each of the Borrower and the
Foreign Borrowers hereby confirms and agrees that the Credit Documents are, and
shall continue to be, in full force and effect, except as amended hereby,
except that, on and after the Effective Date, references in each Credit
Document to the "Credit Agreement", "thereunder", "thereof" or words
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of like import referring to the Existing Credit Agreement shall mean the
Amended Credit Agreement.
SUBPART 4.4 Representations and Warranties. Each of the Borrower
and the Foreign Borrowers hereby represents and warrants that (i) it has the
requisite corporate power and authority to execute, deliver and perform this
Agreement, (ii) it is duly authorized to, and has been authorized by all
necessary corporate action, to execute, deliver and perform this Agreement,
(iii) it has no claims, counterclaims, offsets, or defenses to the Credit
Documents and the performance of its obligations thereunder, (iv) the
representations and warranties contained in Section 6 of the Existing Credit
Agreement are, subject to the limitations set forth therein, true and correct
in all material respects on and as of the date hereof as though made on and as
of such date (except for those which expressly relate to an earlier date or
those which relate to specific schedules, the changes to which do not represent
a Material Adverse Effect), (v) no event of default under any other agreement,
document or instrument to which it is a party will occur as a result of the
transactions contemplated hereby, and (vi) as of the date of this Agreement, no
Event of Default or Defaults exists.
SUBPART 4.5 Costs and Expenses. The Borrower hereby agrees to pay
on demand all costs and expenses (including without limitation the reasonable
fees and expenses of counsel to the Agent) incurred by the Agent in connection
with the negotiation, preparation, execution, and delivery of this Agreement
and the enforcement or preservation of any rights and remedies of the Banks and
the Agent hereunder.
SUBPART 4.6 Counterparts, Effectiveness, Etc. This Agreement 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 4.7 Captions. The captions in this Agreement are inserted
only as a matter of convenience and for reference and in no way define, limit
or describe the scope of this Agreement or any provision hereof.
SUBPART 4.8 Governing Law. THIS AGREEMENT 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 4.9 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
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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.
THE BORROWER: WESTPOINT XXXXXXX INC.,
a Delaware corporation
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
THE FOREIGN BORROWERS: WESTPOINT XXXXXXX (UK) LIMITED
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
WESTPOINT XXXXXXX (EUROPE)
LIMITED
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
THE BANKS: BANK OF AMERICA, N.A.,
individually in its capacity as a
Bank and in its capacity as
Agent
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
[Signatures Continued]
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BANK ONE, N.A.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
THE BANK OF NEW YORK
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
SCOTIABANC INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
WACHOVIA BANK, N.A.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
[Signatures Continued]
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SOCIETE GENERALE
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
ABN AMRO BANK, N.V.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
SUNTRUST BANK, ATLANTA
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
FIRST UNION NATIONAL BANK
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
FLEET BANK, N.A.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
[Signatures Continued]
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AMSOUTH BANK
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"Rabobank Nederland", New York Branch
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
NATIONAL WESTMINSTER BANK PLC
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
[Signatures Continued]
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CONSENT TO AGREEMENT
Each of the undersigned Subsidiary Guarantors, as a party to one or
more of the Credit Documents, hereby acknowledges the execution and delivery of
the Second Amendment Agreement dated as of May __, 2000, hereby confirms and
agrees that each Credit Document to which it is a party is, and shall continue
to be, in full force and effect, and hereby ratifies and confirms in all
respects its obligations thereunder. This Consent may be executed by the
parties hereto in counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same instrument.
WEST POINT-PEPPERELL ENTERPRISES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
X. X. XXXXXXX & CO., INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
X. X. XXXXXXX ENTERPRISES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
WESTPOINT XXXXXXX STORES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
XXXXXXXXX, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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