1
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is dated as
of the 20th day of March, 1997 among SPRINGS INDUSTRIES, INC. (the "Borrower"),
WACHOVIA BANK OF GEORGIA, N.A., as Agent (the "Agent") and WACHOVIA BANK OF
NORTH CAROLINA, N.A., SUNTRUST BANK, ATLANTA, and NATIONSBANK, N.A. (CAROLINAS)
(collectively, the "Banks");
W I T N E S S E T H:
WHEREAS, the Borrower, the Agent and the Banks are parties to that
certain Credit Agreement, dated as of the 12th day of August, 1996, as amended
from time to time (the "Credit Agreement");
WHEREAS, the Borrower has requested and the Agent and the Banks have
agreed to the waiver of certain defaults under and certain amendments to the
Credit Agreement, subject to the terms and conditions hereof;
NOW, THEREFORE, for and in consideration of the above premises and
other good and valuable consideration, the receipt and sufficiency of which
hereby is acknowledged by the parties hereto, the Borrower, the Agent and the
Banks hereby covenant and agree as follows:
1. Definitions. Unless otherwise specifically defined herein, each term
used herein which is defined in the Credit Agreement shall have the meaning
assigned to such term in the Credit Agreement. Each reference to "hereof",
"hereunder", "herein" and "hereby" and each other similar reference and each
reference to "this Agreement" and each other similar reference contained in the
Credit Agreement shall from and after the date hereof refer to the Credit
Agreement as amended hereby.
2. Waiver. The Borrower represents and warrants to the Agent and the
Banks that the Borrower has entered into agreements with the South Carolina
Counties of Xxxxxxx, York, Lancaster and Spartanburg (each a "SC County,"
collectively, the "SC Counties") for the purpose of obtaining a
fee-in-lieu-of-tax characterization with respect to such transaction whereby
(the following transactions are referred to herein as the "Bond
Transaction(s)"): (i) the Borrower has sold or will sell certain real and
personal property (the "Property") located in each of the SC Counties to the
respective SC County in which such Property is located; (ii) the Borrower has
leased-back or will lease-back the Property from each respective SC County;
(iii) each of the SC Counties has assigned or will assign such lease (the
"Lease(s)") to certain trustees (the "Trustee(s)"); (iv) each of the Trustees
has sold or will sell a bond (the "Bond(s)") issued by the respective SC County
to the Borrower, the payment of which is secured
68
2
by the Property in such SC County and the respective Lease, and the Bond
proceeds are loaned to the Borrower in return for the Borrower's issuance of a
promissory note therefor; (v) each Bond and the collateral security therefor
shall be freely assignable, provided, however, the Borrower shall not encumber,
transfer or otherwise dispose of the Bond or any collateral security therefor
and shall remain the sole holder thereof; (vi) each Bond Transaction shall be
entered into, performed and terminated (including, without limitation, all
payments of any loans, rent, and purchase price by Borrower, any County or any
Trustee at the consummation of any Bond Transaction, during the performance of
any Bond Transaction, and at the termination of any Bond Transaction) in
accordance with its terms and without (x) the transfer of or obligation to
transfer any funds between the parties to the Bond Transactions except for
mutual offsetting book entries and fees paid or to be paid to any SC County in
lieu of taxes, or (y) any effect under GAAP (as currently in effect) on the
Borrower's financial statements; (vii) at any time the Borrower may terminate
any Lease and title to the respective Property subject to such Lease shall be
automatically transferred back to the Borrower; and (viii) at the end of the
term of any lease and upon payment of the respective Bond in full, title to the
respective Property subject to such lease shall be automatically transferred
back to the Borrower. In reliance upon the foregoing, the Agent and the Banks
hereby waive any Default or Event of Default under Sections 5.08 and 5.12 of the
Credit Agreement arising from any Bond Transaction entered into prior to the
date of this Amendment; provided, however, no such waiver set forth in this
paragraph 2 shall constitute a waiver of any other Default or Event of Default
under the Financing Agreement.
3. Amendments. (a) A new definition "Permitted Sale-Lease Back/Bond
Transaction" is hereby added to Section 1.01 of the Credit Agreement as follows
in alphabetical order:
"Permitted Sale-Lease Back/Bond Transaction" shall mean a
transaction entered into by the Borrower with any of the South Carolina
Counties of Xxxxxxx, York, Lancaster and Spartanburg (each an "SC
County", collectively, the "SC Counties") for the purpose of obtaining
a fee-in-lieu-of-tax characterization with respect to such transaction,
whereby (the following transactions are referred to in this definition
as the "Bond Transaction(s)"): (i) the Borrower has sold or will sell
certain real and personal property (the "Property") located in each of
the SC Counties to the respective SC County in which such Property is
located; (ii) the Borrower has leased-back or will lease-back the
Property from each respective SC County; (iii) each of the SC counties
has assigned or will assign such lease (the "Lease(s)") to certain
trustees (the "Trustee(s)"); (iv) each of the Trustees has sold or will
sell a bond (the "Bond(s)") issued by the respective SC County to the
Borrower, the payment of which is secured by the Property in such SC
County and the respective Lease, and the Bond proceeds are loaned to
the Borrower in return for the Borrower's issuance of a promissory note
therefor; (v) each Bond and the collateral security therefor shall be
freely assignable, provided, however,
69
3
the Borrower shall not enter, transfer or otherwise dispose of the Bond
or any collateral security therefor and shall remain the sole holder
thereof; (vi) each Bond Transaction shall be entered into, performed
and terminated (including, without limitation, all payments of any
loans, rent, and purchase price by Borrower, any County or any Trustee
at the consummation of any Bond Transaction, during the performance of
any Bond Transaction, and at the termination of any Bond Transaction)
in accordance with its terms and without (x) the transfer of or
obligation to transfer any funds between the parties to the Bond
Transactions except for mutual offsetting book entries and fees paid or
to be paid to any SC County in lieu of taxes, or (y) any effect under
GAAP (as currently in effect) on the Borrower's financial statements;
(vii) at any time the Borrower may terminate any Lease and title to the
respective Property subject to such Lease shall be automatically
transferred back to the Borrower; and (viii) at the end of the term of
any Lease and upon payment of the respective Bond in full, title to the
respective Property subject to such Lease shall be automatically
transferred back to the Borrower.
(b) The word "and" located after the semicolon in Section 5.01(h) is
hereby deleted and Section 5.01(i) is hereby deleted and substituted in lieu
thereof is the following:
(i) thirty (30) days prior to the consummation thereof a
written summary of the terms and conditions of any Permitted Sale-Lease
Back/Bond Transaction, and promptly thereafter, copies of any documents
to be executed in connection therewith reasonably requested by the
Agent and the Banks; and
(j) from time to time such additional information regarding
the financial position or business of the Borrower and its Subsidiaries
as the Agent, at the request of any Bank, may reasonably request.
(c) Section 5.08 is hereby deleted and substituted in lieu thereof is
the following:
SECTION 5.08. Investment. Except for the existing Investments
listed on Schedule 5.08, neither the Borrower nor any of its
Subsidiaries shall make Investments in any Person except as permitted
by Section 5.07 and except (A) Investments in (i) direct obligations of
the United States Government maturing within one year, (ii)
certificates of deposit issued by a commercial bank whose credit is
satisfactory to the Agent, (iii) commercial paper rated Al or the
equivalent thereof by Standard & Poor's Corporation or P1 or the
equivalent thereof by Xxxxx'x Investors Service, Inc. and in either
case maturing within 6 months after the date of acquisition, (iv)
tender bonds the payment of the principal of and interest on which is
fully supported by a letter of credit issued by a United States bank
whose long-term certificates of deposit are rated at least AA or the
equivalent thereof by Standard & Poor's Corporation and Aa
70
4
or the equivalent thereof by Xxxxx'x Investors Service, Inc. and/or (v)
other short term Investments in accordance with company policy of the
Borrower in effect as of the date of this Agreement, a written copy of
which has been provided to the Banks, which policy may not be changed
without the Required Banks' prior written consent, (B) Investments by
the Borrower in a Guarantor or by any Guarantor in another Guarantor,
(C) Investments by the Borrower in Foreign Subsidiaries not exceeding
at any time an amount which, together with loans and advances to
Foreign Subsidiaries permitted by clause (v) of Section 5.07, is equal
to 15% of Consolidated Tangible Net Worth at such time; (D) other
Investments not exceeding at any time an amount which, together with
the aggregate amounts of loans and advances permitted by clause (vi) of
Section 5.07, is equal to l0% of consolidated Tangible Net Worth at
such time, and (E) investments in the bond issued pursuant to a
Permitted Sale-Lease Back/Bond Transaction.
(d) Section 5.12 is hereby deleted and substituted in lieu thereof is
the following:
SECTION 5.12. Consolidations, Mergers and Sales of Assets. The
Borrower will not, nor will it permit any subsidiary to, consolidate or
merge with or into, or sell, lease or otherwise transfer all or any
substantial part of its assets to, any other Person, or discontinue or
eliminate any business line or segment, provided that (a) the Borrower
may merge with another Person if (i) such Person was organized under
the laws of the United States of America or one of its states, (ii) the
Borrower is the corporation surviving such merger and (iii) immediately
after giving effect to such merger, no Default shall have occurred and
be continuing, (b) Subsidiaries of the Borrower may merge with one
another, and (c) the foregoing limitation on the sale, lease or other
transfer of assets and on the discontinuation or elimination of a
business line or segment shall not prohibit, during any Fiscal Year,
(A) a transfer of assets or the discontinuance or elimination of a
business line or segment (in a single transaction or in a series of
related transactions) unless the aggregate assets to be so transferred
or utilized in a business line or segment to be so discontinued, when
combined with all other assets transferred, and all other assets
utilized in all other business lines or segments discontinued, during
such Fiscal Year constituted more than 10% of Consolidated Tangible Net
Worth, or (B) a transfer of assets as a part of a Permitted Sale-Lease
Back/Bond Transaction.
(e) A New Section 5.23 is hereby added to the Credit Agreement as
follows:
SECTION 5.23 Ownership of Bonds. The Borrower shall be the
sole holder of each bond issued pursuant to a Permitted Sale-Lease
Back/Bond Transaction and shall not encumber, transfer or otherwise
dispose of such bond without the prior written consent of all Banks.
71
5
4. Effect of Amendment. Except as set forth expressly hereinabove, all
terms of the Credit Agreement and the other Loan Documents shall be and remain
in full force and effect, and shall constitute the legal, valid, binding and
enforceable obligations of the Borrower. The amendments contained herein shall
be deemed to have prospective application only, unless otherwise specifically
stated herein.
5. Counterparts. This Amendment may be executed in any number of
counterparts and by 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 counterparts, taken together, shall constitute but one and the same
instrument.
6. Section References. Section titles and references used in this
Amendment shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto evidenced hereby.
7. No Default. To induce the Agent and the Banks to enter into this
Amendment and to continue to make advances pursuant to the Credit Agreement, the
Borrower hereby acknowledges and agrees that, as of the date hereof, and after
giving effect to the terms hereof, there exists (i) no Default or Event of
Default and (ii) no right of offset, defense, counterclaim, claim or objection
in favor of the Borrower arising out of or with respect to any of the Loans or
other obligations of the Borrower owed to the Banks under the Credit Agreement.
8. Further Assurances. The Borrower agrees to take such further actions
as the Agent shall reasonably request in connection herewith to evidence the
amendments herein contained to the Borrower.
9. Governing Law. This Amendment shall be governed by and construed and
interpreted in accordance with, the laws of the State of Georgia.
10. Conditions Precedent. This Amendment shall become effective only
upon (i) execution and delivery of this Amendment by each of the parties hereto,
(ii) execution and delivery of the Consent and Reaffirmation of Guarantors at
the end hereof by each of the Guarantors, and (iii) the delivery of a copy of
the Lease to the Agent and the Banks and the terms and conditions of the Lease
being satisfactory to the Agent and the Banks in all respects.
72
6
IN WITNESS WHEREOF, the Borrower, the Agent and each of the Banks has
caused this Amendment to be duly executed, under seal, by its duly authorized
officer as of the day and year first above written.
SPRINGS INDUSTRIES, INC.,
as Borrower (SEAL)
By: /s/Xxxxxx X. Xxxxxx
---------------------------------
Title: Treasurer
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent (SEAL)
By: /s/Xxxxx X. Love
---------------------------------
Title: Senior Vice President
WACHOVIA BANK OF NORTH CAROLINA, N.A.,
as a Bank (SEAL)
By: /s/Xxxx X. Xxxxx
---------------------------------
Title: Senior Vice President
SUNTRUST BANK, ATLANTA,
as a Bank (SEAL)
By: /s/Xxxxxxx X. Xxxxxxx
---------------------------------
Title: Banking Officer
By: /s/X. X. Xxxx
---------------------------------
Title: Vice President
NATIONSBANK, N.A.
as a Bank (SEAL)
By: /s/Xxxxx X. Xxxxxxx
---------------------------------
Title: Vice President
73
7
CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Amendment to Credit Agreement (the "Amendment"), (ii) consents to the execution
and delivery of the Amendment by the parties thereto and agrees to all of the
terms of the foregoing Amendment, and (iii) reaffirms all of its obligations and
covenants, respectively, as a Guarantor under the Guaranty dated as of March 31,
1995 executed and delivered by Springs Window Fashions Division, Inc., and under
the Guaranty dated as of May 27, 1995 executed and delivered by Dundee Xxxxx,
Incorporated, and as a Contributing Party under the Contribution Agreement dated
as of March 31, 1995, and agrees that none of such obligations and covenants
shall be affected by the execution and delivery of the Amendment. This Consent
and Reaffirmation may be executed in any number of counterparts and by 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 counterparts, taken
together, shall constitute but one and the same instrument.
SPRINGS WINDOW FASHIONS DIVISION,
INC. (SEAL)
By: /s/Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
DUNDEE XXXXX, INCORPORATED (SEAL)
By: /s/Xxxxxx X. Xxxxxxxx
-------------------------------
Title: Vice President
74
