EXHIBIT 4.12
SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SEVENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
"Agreement") is made and entered into this 22nd day of January, 2004, by and
among THE XXXXX GROUP, INC., a Tennessee corporation ("Borrower"), each of the
subsidiaries of Borrower as guarantors ("Guarantors"), FLEET CAPITAL
CORPORATION, a Rhode Island corporation ("Agent"), in its capacity as collateral
and administrative agent for the Lenders (as defined in the Loan Agreement
referenced below); CONGRESS FINANCIAL CORPORATION (SOUTHWEST), as successor to
Congress Financial Corporation (Southern), as Co-Agent ("Co-Agent"); and
Lenders.
RECITALS:
Lenders, Agent, Co-Agent, Guarantors and Borrowers are parties to a
certain Loan and Security Agreement dated May 14, 2002, as amended (as at any
time amended, the "Loan Agreement"), pursuant to which Lenders agreed to make
certain loans and other extensions of credit to Borrower from time to time,
subject to the terms and conditions contained therein.
Borrower has requested that Agent and Lenders amend certain provisions
of the Loan Agreement. Agent and Lenders are willing to amend the Loan Agreement
as hereinafter set forth, subject to the conditions contained herein.
NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good
and valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. DEFINITIONS. All capitalized terms used in this Agreement,
unless otherwise defined herein, shall have the meaning ascribed to such terms
in the Loan Agreement.
2. AMENDMENT TO LOAN AGREEMENT. The Loan Agreement is hereby
amended as follows:
(a) By deleting the definition of "Fixed Charge Coverage
Ratio" from Appendix A to the Loan Agreement and by substituting the
following new definition in lieu thereof:
Fixed Charge Coverage Ratio - for any period, the
ratio of (i) Borrower's EBITDA for such period minus
Borrower's Capital Expenditures for such period (but excluding
Capital Expenditures financed with the proceeds of Debt for
Money Borrowed other than Revolver Loans), minus Borrower's
cash income taxes for such period (but excluding the effect of
income tax refunds with respect to prior fiscal periods),
minus Distributions made during such period other than
Distributions to purchase or redeem the Specified Equity
Interests, minus the effect of income taxes relating to any
one-time gain from any sale of assets, to (ii) regularly
scheduled payments of principal and interest on Borrower's
Funded Debt due during such period; provided that
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EXHIBIT 4.12
expenditures for fixed assets recorded as a result of the GE
Lease shall not be included in the definition of Capital
Expenditures for purposes of this covenant, and provided
further that to the extent that the payment and satisfaction
of the Xxxxxxxxxxx Arbitration Award by Borrower would
otherwise be deducted from Borrower's EBITDA as provided
therein, for purposes only of computing the Fixed Charge
Coverage Ratio, the amount of such award recognized for
accounting purposes up to $2,200,000 shall not be deducted in
the calculation of EBITDA.
(b) By adding the following new definition of
"Xxxxxxxxxxx Arbitration Award" to Appendix A to the Loan Agreement, in
proper alphabetical sequence:
Xxxxxxxxxxx Arbitration Award - the arbitration award
entered on November 21, 2003 against Borrower and Bretlin in
favor of Xxxxxxxxxxx Dyeing, LLC and Product Concepts
Residential, LLC in the amount of $1,774,160.51, as may be
supplemented for additional damages and interest for the
period from May 1, 2003 through November 21, 2003.
3. RATIFICATION AND REAFFIRMATION. Each Obligor hereby ratifies
and reaffirms the Obligations, each of the Loan Documents and all of such
Obligor's covenants, duties, indebtedness and liabilities under the Loan
Documents.
4. ACKNOWLEDGMENTS AND STIPULATIONS. Each Obligor acknowledges
and stipulates that the Loan Agreement and the other Loan Documents are legal,
valid and binding obligations of such Obligor that are enforceable against such
Obligor in accordance with the terms thereof; all of the Obligations are owing
and payable without defense, offset or counterclaim (and to the extent there
exists any such defense, offset or counterclaim on the date hereof, the same is
hereby waived by such Obligor); and the security interests and Liens granted by
each Obligor in favor of Agent, for the benefit of itself, Lenders and the other
Secured Parties, are duly perfected, first priority security interests and
Liens. As of the Closing Date Borrower had incurred Debt from General Electric
Capital Corporation for certain Equipment financing as disclosed on Schedule
9.2.5 of the Loan Agreement and as currently evidenced by the GE Lease. Agent
and Lenders acknowledge and agree that the GE Lease shall not be included in the
$7,500,000 cap that is contained in the definition of Permitted Purchase Money
Debt.
5. REPRESENTATIONS AND WARRANTIES. All representations and
warranties made under the Loan Agreement and the other Loan Documents by an
Obligor shall be deemed to be reaffirmed on each date that a request for a Loan
under the Loan Agreement is made by Borrower. Each Obligor represents and
warrants to Agent and Lenders, to induce Agent and Lenders to enter into this
Agreement, that no Default or Event of Default exists on the date hereof; the
execution, delivery and performance of this Agreement have been duly authorized
by all requisite corporate action on the part of each Obligor and this Agreement
has been duly executed and delivered by each Obligor; and except to the extent
otherwise disclosed by an Obligor to Agent and Lenders in writing, all of the
representations and warranties made by an Obligor in the Loan Agreement are true
and correct on and as of the date hereof, except to the extent that such
representations or warranties refer to an earlier date or period.
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EXHIBIT 4.12
6. REFERENCE TO LOAN AGREEMENT. Upon the effectiveness of this
Agreement, each reference in the Loan Agreement to "this Agreement,"
"hereunder," or words of like import shall mean and be a reference to the Loan
Agreement, as amended by this Agreement.
7. BREACH OF AGREEMENT. This Agreement shall be part of the Loan
Agreement and a breach of any representation, warranty or covenant herein shall
constitute an Event of Default.
8. NO WAIVER. In no event shall Agent's and Lenders' entry into
this Agreement or their making of additional Loans to Borrower be deemed to
constitute a waiver by Agent or any Lender of any Event of Default in existence
on the date hereof, or of each Obligor's continuing obligation to comply with
all of the terms and conditions of the Loan Agreement and the other Loan
Documents, as amended hereby.
9. EXPENSES OF AGENT. Borrower agrees to pay, ON DEMAND, all
costs and expenses incurred by Agent in connection with the preparation,
negotiation and execution of this Agreement and any other Loan Documents
executed pursuant hereto and any and all amendments, modifications, and
supplements thereto, including, without limitation, the costs and fees of
Agent's legal counsel and any taxes or expenses associated with or incurred in
connection with any instrument or agreement referred to herein or contemplated
hereby.
10. EFFECTIVENESS; GOVERNING LAW. This Agreement shall be
effective upon execution by Borrower and Guarantors and acceptance by Agent in
Atlanta, Georgia (notice of which acceptance is hereby waived), whereupon the
same shall be governed by and construed in accordance with the internal laws of
the State of Georgia.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and assigns.
12. NO NOVATION, ETC. Except as otherwise expressly provided in
this Agreement, nothing herein shall be deemed to amend or modify any provision
of the Loan Agreement or any of the other Loan Documents, each of which shall
remain in full force and effect. This Agreement is not intended to be, nor shall
it be construed to create, a novation or accord and satisfaction, and the Loan
Agreement as herein modified shall continue in full force and effect.
13. COUNTERPARTS; TELECOPIED SIGNATURES. This Agreement may be
executed in any number of counterparts and by different parties to this
Agreement on separate counterparts, each of which, when so executed, shall be
deemed an original, but all such counterparts shall constitute one and the same
agreement. Any signature delivered by a party by facsimile transmission shall be
deemed to be an original signature hereto.
14. FURTHER ASSURANCES. Obligors agree to take such further
actions as Agent shall request from time to time in connection herewith to
evidence or give effect to the agreements and amendments set forth herein or any
of the transactions contemplated hereby.
15. SECTION TITLES. Section titles and references used in this
Agreement shall be without substantive meaning or content of any kind whatsoever
and are not a part of the agreements among the parties hereto.
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EXHIBIT 4.12
16. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, THE PARTIES HERETO EACH HEREBY WAIVES THE RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, COUNTERCLAIM OR PROCEEDING ARISING OUT OF OR RELATED TO
THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed under seal, and delivered by their respective duly authorized
officers on the date first written above.
FLEET CAPITAL CORPORATION,
as Agent and a Lender
By: /s/ Xxxxxxxxx X. Xxxxxx
-------------------------------------
Title: Senior Vice President
CONGRESS FINANCIAL
CORPORATION (SOUTHWEST),
as Co-Agent and a Lender
By: /s/ Xxxx Xxxxxxx, Xx.
-------------------------------------
Title: Vice President
LASALLE BUSINESS CREDIT, LLC,
successor by merger to LaSalle Business Credit,
Inc., as a Lender
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Title: Senior Vice President
XXXXX FARGO FOOTHILL, INC.
(formerly known as Foothill Capital Corporation),
as a Lender
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Title: Assistant Vice President
[Signatures continued on following page.]
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EXHIBIT 4.12
ACCEPTED AND AGREED TO:
THE XXXXX GROUP, INC.
("Borrower")
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: Vice President and Chief Financial Officer
FABRICA INTERNATIONAL, INC.,
formerly known as Fabrica International
("Guarantor")
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: Vice President
BRETLIN, INC.
("Guarantor")
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: Vice President
CANDLEWICK YARNS, INC.
("Guarantor")
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: Vice President
CHROMA TECHNOLOGIES, INC.
("Guarantor")
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: President
XXXXX GROUP LOGISTICS, INC.
("Guarantor")
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: Vice President
MASLAND CARPETS, LLC
("Guarantor")
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Title: Vice President
Seventh Amendment Fleet Capital and Xxxxx Group Page 5
