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EXHIBIT 10.1
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EXECUTION COPY
FIFTH AMENDMENT AND WAIVER
This FIFTH AMENDMENT AND WAIVER (this "Amendment") is dated
as of November 18, 2004 and is entered into by and between XXX
RIVER INC., a Georgia corporation, as debtor and debtor in
possession (the "Borrower") and DEUTSCHE BANK TRUST COMPANY
AMERICAS, in its capacity as the Agent for the Lenders under the
Credit Agreement referred to below (in such capacity, the
"Agent").
RECITALS:
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WHEREAS, pursuant to that certain Post-Petition Credit
Agreement, dated as of April 1, 2004, by and among (among others)
the Borrower, the Agent and the lenders from time to time party
thereto (collectively, the "Lenders") (as amended by the
Amendment thereto dated May 27, 2004, the Second Amendment
thereto dated July 20, 2004, the Third Amendment thereto dated
July 31, 2004, the Fourth Amendment and Waiver thereto dated
August 18, 2004, and as further amended, restated, supplemented
or otherwise modified from time to time, the "Credit Agreement"),
the Lenders have agreed to make certain Loans and issue certain
Letters of Credit to and for the benefit of the Borrower;
WHEREAS, pursuant to the Fourth Amendment and Waiver, dated
as of August 18, 2004 (the "Fourth Amendment"), the Agent, upon
the written consent of the Majority Lenders, waived for a limited
period of time the defaults specified therein subject to the
conditions set forth therein;
WHEREAS, in connection with certain disputes among the
Borrower, the Agent and the Lenders, the Bankruptcy Court
permitted the Borrower to borrow funds from certain purchasers of
the Senior Notes in an amount up to $10,000,000 on a super-
priority basis (the "Noteholder DIP Facility" and the loans made
thereunder, the "Noteholder DIP Loans");
WHEREAS, in furtherance of the settlement of such disputes,
the Agent, upon the written consent of the Majority Lenders, is
willing to waive certain defaults under the Credit Agreement and
to agree to certain amendments to the Credit Agreement as more
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fully described herein; provided that the Noteholder DIP Loans
are repaid in full, the Noteholder DIP Facility is terminated and
the interim order of the Bankruptcy Court entered on November 2,
2004 approving the Noteholder DIP Facility (the "Interim Order")
is vacated in its entirety by entry of an order of the Bankruptcy
Court (the "Consent Order"), in each case, on the date hereof;
and
WHEREAS, unless otherwise defined herein, capitalized terms
used in this Amendment shall have the same definitions as are
contained in the Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, and
incorporating the foregoing recitals herein, the parties hereto
agree as follows.
SECTION I.
ACKNOWLEDGMENTS
1.1 Acknowledgment of Liens and Grant of Security
Interests. The Borrower acknowledges that it has granted the
Agent, for the benefit of the Secured Parties, security interests
in and liens upon the Collateral pursuant to the Collateral
Documents and the Final Order, which security interests and liens
are perfected and, except where otherwise permitted thereunder,
of the first priority (after giving effect to the repayment of
the Noteholder DIP Loans, the termination of the Noteholder DIP
Facility and the vacating of the Interim Order) and which
security interests and liens secure the obligations of the
Borrower and the other Credit Parties to the Secured Parties
under the Credit Documents. The Borrower further acknowledges
the prior execution and delivery of the Collateral Documents to
the Agent, for the benefit of the Secured Parties, and that,
notwithstanding the execution and delivery of this Amendment, the
Collateral Documents and the Final Order (except as modified
herein and in the Consent Order) remain in full force and effect
and the rights and remedies of the Agent and the Secured Parties
thereunder, the obligations of the Borrower and the other Credit
Parties thereunder, and the liens and security interests created
and provided for thereunder remain in full force and effect and
shall not be affected, impaired or discharged hereby.
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SECTION II.
WAIVER
2.1 Waiver. The Agent, upon the consent of the Majority
Lenders, hereby agrees to waive, to the extent necessary and
applicable, any Default or Event of Default arising as a result
of the expiration of the Fourth Amendment (and any Default or
Event of Default arising from the failure to comply with Section
7.1(g) of the Credit Agreement with respect to any such Default
or Event of Default). After giving effect to such waiver, the
Borrower, the Agent and the Majority Lenders hereby acknowledge
and agree that no other Default or Event of Default has occurred
and is continuing as of the date hereof under the Credit
Agreement or any other Credit Document.
2.2 Limitation. Nothing in this Amendment, nor in any
communication between the Agent and/or any of the other Secured
Parties and the Borrower or any other Credit Party or any
officer, agent, employee, or representative of the Borrower or
any Credit Party, shall be construed as a waiver of or
acquiescence to any Default or Event of Default (except as
expressly set forth herein). Except as expressly provided
herein, the execution and delivery of this Amendment shall not
(i) constitute an extension, modification or waiver of any aspect
of the Credit Agreement or the other Credit Documents; (ii)
extend the terms of the Credit Agreement or any other Credit
Document or the due date of any of the Obligations; (iii) give
rise to any obligation on the part of the Agent or the other
Secured Parties to extend, modify or waive any term or condition
of the Credit Agreement or any of the other Credit Documents; or
(iv) give rise to any rights of setoff, defenses or counterclaims
to the right of the Agent and the other Secured Parties to compel
payment and performance of the Obligations or to otherwise
enforce any of their respective rights and remedies under the
Credit Agreement and the other Credit Documents. Except as
expressly limited herein, the Agent and the other Secured Parties
hereby expressly reserve all of their defenses, rights and
remedies under the Credit Documents and under applicable law or
otherwise with respect to any Default or Event of Default.
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SECTION III.
AMENDMENTS
Subject to the terms and conditions set forth in this
Amendment (including, without limitation, Article V) and in
reliance on the representations and warranties of the Borrower
set forth herein, the Credit Agreement is hereby amended as
follows:
3.1 Additional Defined Terms. Section 1.1 of the
Credit Agreement is hereby amended by inserting the following
defined terms in the appropriate alphabetical order:
""Ableco Commitment" shall mean the revolving loan
commitment of Ableco Finance LLC, on the terms and
conditions set forth and described in the Confirmation
Financing Commitment letter dated October 22, 2004 and
entered into by Ableco Finance LLC and the Borrower."
""Consent Order" shall mean the consent order of the
Bankruptcy Court, entered on November 18, 2004, among other
things, vacating the interim order entered by the Bankruptcy
Court on November 2, 2004 (and any findings of fact and
conclusions of law that may have been made in connection
therewith) and making certain modifications to the Final
Order."
""CSG Loan Application" shall mean the term loan
application of the Borrower delivered to CSG Investments,
Inc. on October 22, 2004, on the terms and conditions set
forth and described therein."
""Noteholder Commitment" shall mean the term loan
commitment of certain purchasers of the Senior Notes, on the
terms and conditions set forth and described in the
$25,000,000 Senior Secured Term Note Facility commitment
letter dated October 22, 2004 and entered into by certain
purchasers of the Senior Notes and the Borrower."
3.2 Modifications to Defined Terms. Section 1.1 of the
Credit Agreement is hereby further amended as follows:
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(a) Clause (b) of the definition of "Borrowing Base"
is amended by deleting it in its entirety and replacing it
with the following new clause (b): "[Intentionally
omitted]."
(b) The definition of "Budget" is amended by deleting
the last sentence thereof.
(c) The definition of "Eligible Accounts Receivable"
is amended as follows:
(i) clause (d) is amended by deleting the phrase
"(other than in respect of Kmart Corporation and its
Affiliates)" in the first and second lines thereof and
inserting the words "or Kmart Corporation and its
Affiliates" immediately after the words "Wal-mart
Corporation and its Affiliates" in the fourth line
thereof;
(ii) clause (r) is amended by deleting the phrase
"; or" at the end thereof and replacing it with a
period; and
(iii) clause (s) is deleted in its entirety.
3.3 Modifications Relating to Final Order.
(a) Section 5.2(h)(iii) of the Credit Agreement is
hereby amended by inserting the phrase "(except as modified
by the Consent Order)" at the end thereof.
(b) Section 6.30 of the Credit Agreement is hereby
amended by inserting the phrase "(except as modified by the
Consent Order)" at the end of the second sentence thereof.
(c) Section 6.31(c) of the Credit Agreement is hereby
amended by inserting the phrase "(except, in the case of the
Final Order, as modified by the Consent Order)" at the end
thereof.
(d) Section 9.1(o)(i)(A) of the Credit Agreement is
hereby amended by inserting the phrase "(except, in the case
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of the Final Order, as modified by the Consent Order)" at
the end thereof.
(e) Section 9.1(p)(v) of the Credit Agreement is
hereby amended by inserting the phrase ", except, in the
case of the Final Order under this clause (v), as modified
by the Consent Order" at the end thereof.
3.4 Reporting Requirements. Clause (k) of Section 7.1 is
hereby deleted in its entirety and replaced with the following
new clause (k): "as soon as practicable and in any event no later
than Wednesday of each week, the Borrower shall deliver to the
Agent (i) an update to the then current Budget, depicting, among
other things, cash flow projections for the immediately
succeeding 16-week period, together with an explanation of the
material assumptions on which such projections are based and a
variance report comparing actual cash receipts and disbursements
for the preceding week and for all other weeks since the delivery
of such Budget against the cash receipts and disbursements
reflected in such Budget and (ii) an update and status report as
to the Ableco Commitment, the CSG Loan Application and the
Noteholder Commitment (including, without limitation, a report as
to the Borrower's progress in satisfying the conditions set forth
therein), it being acknowledged and agreed that the Borrower
shall immediately notify the Agent if any of the Ableco
Commitment, the CSG Loan Application or the Noteholder Commitment
has been terminated, expired or otherwise ceased to be in full
force and effect."
3.5 Covenant Relief. Sections 8.1, 8.23, and 9.1(s) are
hereby deleted in their entirety and replaced with the phrase
"[intentionally omitted]".
3.6 Plan of Reorganization. Section 9.1 of the Credit
Agreement is hereby further amended as follows:
(a) the phrase "an order approving the disclosure
statement in respect of each such Plan of Reorganization
shall have been entered by the Bankruptcy Court on or before
November 1, 2004;" in clause (r) thereof is deleted;
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(b) the date "January 1, 2005" in the eighth line of
clause (r) thereof is deleted and replaced with the date
"January 31, 2005";
(c) the phrase "or any such Plan of Reorganization
shall fail to become effective on or before March 1, 2005;
or" in clause (r) thereof is deleted and replaced with the
phrase "or any such Plan of Reorganization shall fail to
become effective on or before February 15, 2005 (subject to
extension to a date not later than March 31, 2005 if and to
the extent necessary to avoid adverse tax consequences
associated with the sale of the Borrower's Engineered
Products division);"
(d) the period at the end of clause (s) is deleted and
replaced with the phrase "; or" and the following new clause
(t) is inserted: "the Noteholder Commitment shall have been
terminated, expired or otherwise ceased to be in full force
and effect; provided, however, that if the CSG Loan
Application shall have been formally approved by CSG
Investments, Inc. prior to such termination, no Event of
Default shall occur under this Section 9.1(t) as long as the
approved CSG Loan Application remains in full force and
effect."
(e) the following new paragraph is added at the end of
Section 9.1:
"In addition to the foregoing Events of Default,
it shall be an immediate Event of Default hereunder if
the Borrower, any Subsidiary of the Borrower, any other
Credit Party or any other party on behalf of the
Borrower, any Subsidiary of the Borrower or any other
Credit Party, files or supports any Plan of
Reorganization that does not provide for (i) the
payment of all Obligations and other claims of the
Secured Parties in full in cash on the effective date
of such Plan of Reorganization and (ii) the release of
claims against the Secured Parties, and the exculpation
from liability of the Secured Parties, in each case, in
the manner and using language set forth in clauses (A)
and (B) of the immediately succeeding paragraph (and
the Agent and the Majority Lenders shall be satisfied
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in their sole and absolute discretion that the
remainder of the applicable Plan of Reorganization and
the order of the Bankruptcy Court confirming such Plan
of Reorganization do not alter, modify or qualify such
language). No further consent or approval of the Agent
or the Lenders shall be required with respect to (and
the Lenders hereby agree to support) any Plan of
Reorganization to the extent such Plan of
Reorganization provides for each of the foregoing.
Any Plan of Reorganization shall include release
and exculpation language as follows: (A) pursuant to
section 1123(b)(3) of the Bankruptcy Code, as of the
effective date of such Plan of Reorganization, the
Borrower, each of its Subsidiaries and each other
Credit Party, in their individual capacities and as
debtors in possession for and on behalf of their
respective estates, shall release and discharge and be
deemed to have conclusively, absolutely,
unconditionally, irrevocably and forever released and
discharged each and every Secured Party (and each and
every secured party under the Pre-Petition Credit
Agreement), and each of their respective present or
former members, partners, officers, directors,
employees, advisors, attorneys, representatives,
financial advisors, investment bankers or agents and
any of their respective successors and assigns
(collectively, the "Released Parties") for and from any
and all claims, obligations, liabilities, losses,
expenses or causes of action of any kind or nature
whatsoever existing as of the effective date of such
Plan of Reorganization and howsoever arising, including
but not limited to in any manner arising from, based on
or relating to, in whole or in part, the Pre-Petition
Credit Agreement, this Agreement or any other Credit
Document, the Credit Parties, the subject matter of, or
the transactions or events giving rise to, any claim or
interest that is treated in such Plan of
Reorganization, the business or contractual
arrangements between any Credit Party and any Released
Party, or any act or omission related to the Bankruptcy
Cases or such Plan of Reorganization (the reorganized
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debtors shall be bound, to the same extent the Credit
Parties are bound, by all of the releases set forth
above) and (B) the Credit Parties, the reorganized
debtors, the unsecured creditors committee, the members
of the unsecured creditors committee in their
capacities as such, the indenture trustee under the
Senior Notes, in its capacity as such, and the Released
Parties, shall not have or incur, and are hereby
released from, any claim, obligation, cause of action,
or liability to one another or to any holder of any
claim or interest, or any other party-in-interest, or
any of their respective agents, employees,
representatives, financial advisors, attorneys or
affiliates, or any of their successors or assigns, for
any act or omission in connection with, relating to, or
arising out of the Bankruptcy Cases, the negotiation
and filing of the applicable Plan of Reorganization,
the filing of the Bankruptcy Cases, the pursuit of
confirmation of the applicable Plan of Reorganization,
the consummation of the applicable Plan of
Reorganization, or the administration of the applicable
Plan of Reorganization or the property to be
distributed under the applicable Plan of
Reorganization, except for their willful misconduct or
gross negligence, and in all respects shall be entitled
to reasonably rely upon the advice of counsel with
respect to their duties and responsibilities under the
applicable Plan of Reorganization. No holder of any
claim or interest, or other party in interest, none of
their respective agents, employees, representatives,
financial advisors, attorneys or affiliates, and no
successors or assigns of the foregoing, shall have any
right of action against the parties listed in this
provision for any act or omission in connection with,
relating to or arising out of the Bankruptcy Cases, the
pursuit of confirmation of the applicable Plan of
Reorganization, the consummation of the applicable Plan
of Reorganization, or the administration of the
applicable Plan of Reorganization or the property to be
distributed under the applicable Plan of
Reorganization."
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SECTION IV.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Agent and
the other Lenders as of the date hereof as follows:
4.1 Corporate Power. The Borrower has the requisite
corporate power and authority to execute and deliver this
Amendment and to perform its obligations hereunder and under the
other Credit Documents. The execution, delivery and performance
by the Borrower of this Amendment, and the performance by the
Borrower and by each other Credit Party of each Credit Document
to which it is a party have been duly approved by all necessary
corporate action of such Credit Party and no other corporate
proceedings on the part of such Credit Party are necessary to
consummate such transactions.
4.2 Authorization and Enforceability. This Amendment has
been duly executed and delivered by the Borrower. Each of this
Amendment and each other Credit Document is the legal, valid and
binding obligation of each Credit Party party hereto and thereto,
enforceable against such Credit Party in accordance with its
terms, and is in full force and effect.
4.3 Defaults. After giving effect to this Amendment, no
event has occurred and is continuing that constitutes a Default
or Event of Default.
4.4 Noteholder DIP Facility. Other than the Credit Agreement
and the Noteholder DIP Facility, neither the Borrower nor any
Credit Party is party to or a borrower under any debtor in
possession financing and the Noteholder DIP Loans (together with
interest thereon in an amount equal to $1,304,452.08) are the
only amounts owing under the Noteholder DIP Facility.
SECTION V.
CONDITIONS TO EFFECTIVENESS
This Amendment shall not be effective until each of the
following conditions precedent shall have been satisfied.
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5.1 Execution. The Agent, on behalf of the Majority
Lenders, shall have executed this Amendment and shall have
received counterparts of this Amendment executed by the Borrower
and acknowledged by each Guarantor.
5.2 Representations and Warranties. Each of the
representations and warranties in Section 4 above shall be true
and correct as of the date of this Amendment.
5.3 Payment of Fees and Expenses. The Borrower shall have
paid all of the accrued fees and expenses of the Agent and the
Lenders (including, without limitation, the fees and
disbursements of counsel for the Agent) for which invoices shall
have been submitted.
5.4 Majority Lender Consent. The Majority Lenders shall
have consented in writing to the execution and delivery of this
Amendment by the Agent (or the Agent shall have received evidence
satisfactory to it that such written consent has been provided).
5.5 Repayment of Noteholder DIP Loans. Any amounts
previously funded and then owing or outstanding under the
Noteholder DIP Facility or otherwise constituting Noteholder DIP
Loans shall have been repaid in full (with proceeds to be drawn
under the Credit Agreement) and the Noteholder DIP Facility shall
have been terminated.
5.6 Bankruptcy Court Findings. The Interim Order, any
subsequent orders that may have been entered by the Bankruptcy
Court in connection therewith (other than the order approving
this Amendment) and any findings of fact or conclusions of law
that may have been made by the Bankruptcy Court in the hearing on
November 1, 2004 shall have been vacated to the satisfaction of
the Agent and its counsel.
SECTION VI.
MISCELLANEOUS.
6.1 Limited Effect. Except as otherwise expressly set
forth herein, the Credit Agreement and each other Credit Document
shall continue to be, and shall remain, unaltered and in full
force and effect in accordance with their terms and are hereby
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confirmed and ratified. To the extent that any existing
provision of the Credit Agreement or any other Credit Document is
inconsistent with the specific provisions of this Amendment, the
provisions of this Amendment shall control.
6.2 No Novation. This Amendment shall not be deemed or
construed to be a satisfaction, restatement, novation or release
of the Credit Agreement or of any of the other Credit Documents
or a waiver by the Agent or any Lender of any of the defenses,
rights or remedies of the Agent and the Lenders under the Credit
Agreement or any of the other Credit Documents or at law or in
equity or otherwise.
6.3 Reaffirmation. The Borrower hereby reaffirms each and
every covenant, condition, obligation and provision set forth in
the Credit Documents.
6.4 Additional Action. The parties agree to take such
further action to execute and deliver to each other such
additional agreements, instruments and documents as may
reasonably be required to carry out the purposes and intent of
this Amendment.
6.5 Headings. Section headings in this Amendment are
included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose.
6.6 Severability. Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such
provision in any other jurisdiction.
6.7 Governing Law. THIS AMENDMENT SHALL BE GOVERNED BY,
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.
6.8 Counterparts. This Amendment may be executed in any
number of counterparts, and by different parties hereto in
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separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument.
Delivery of an executed counterpart of a signature page to this
Amendment by facsimile shall be effective as delivery of a
manually executed counterpart of this Amendment.
6.9 Construction. The Borrower acknowledges that it has
been represented by its own legal counsel in connection with the
negotiation, execution and delivery of this Amendment, that it
has exercised independent judgment with respect to this
Amendment, and that it has not relied on the Agent or any Lender
or on the Agent's or any Lender's counsel for any advice with
respect to this Amendment.
[Signature page follows]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their proper and duly
authorized officers as of the date first set forth above.
BORROWER:
XXX RIVER INC., a Georgia corporation,
as debtor and debtor in possession
/s/ Xxxxx X. Xxxx
By: -------------------------------
Name: Xxxxx X. Xxxx
Title: Executive Vice President-
Chief Financial Officer
AGENT:
DEUTSCHE BANK TRUST COMPANY AMERICAS, in
its capacity as Agent for and on behalf
of the Lenders
/s/ Xxxxxx Xxxxxxxxx
By: -------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Director
ACKNOWLEDGED BY:
GUARANTORS:
XXX RIVER INTERNATIONAL LTD., a Virginia
corporation, as debtor and debtor in possession
/s/ Xxxxx X. Xxxx
By: ------------------------------
Name: Xxxxx X. Xxxx
Title: Executive Vice President-
Chief Financial Officer
[signature page continues]
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XXX RIVER FACTORY STORES, INC., a
Georgia corporation, as debtor and debtor in possession
/s/ Xxxxx X. Xxxx
By: ------------------------------
Name: Xxxxx X. Xxxx
Title: Executive Vice President-
Chief Financial Officer
THE XXXX COMPANY LLC, a Delaware limited
liability company, as debtor and debtor in possession
/s/ Xxxxx X. Xxxx
By: ------------------------------
Name: Xxxxx X. Xxxx
Title: Executive Vice President-
Chief Financial Officer
