FIRST AMENDMENT
TO REVOLVING CREDIT AND
GUARANTY AGREEMENT
FIRST AMENDMENT, dated as of March 13, 2002 (the "Amendment"), to the
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REVOLVING CREDIT AND GUARANTY AGREEMENT, dated as of February 20, 2002, among
XXXXX & LORD, INC., a Delaware corporation (the "Borrower"), a debtor and
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debtor-in-possession under Chapter 11 of the Bankruptcy Code, the Guarantors
named therein (the "Guarantors"), FIRST UNION NATIONAL BANK, a national banking
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corporation ("FUNB"), each of the other financial institutions from time to time
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party thereto (together with FUNB, the "Banks") and FIRST UNION NATIONAL BANK,
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as Agent for the Banks (in such capacity, the "Agent"):
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W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent are
parties to that certain Revolving Credit and Guaranty Agreement, dated as of
February 20, 2002 (as the same may be amended, modified or supplemented from
time to time, the "Credit Agreement"); and
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WHEREAS, the Borrower and the Guarantors have requested that from and
after the Effective Date (as hereinafter defined) of this Amendment, the Credit
Agreement be amended subject to and upon the terms and conditions set forth
herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. As used herein, all terms that are defined in the Credit
Agreement shall have the same meanings herein.
2. Section 1.01 of the Credit Agreement is hereby amended by
inserting the following new definitions in appropriate alphabetical order:
"Account" shall mean any right to
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payment for goods sold or leased or for
services rendered, whether or not earned by
performance.
"Account Debtor" shall mean, with
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respect to any Account, the obligor with
respect to such Account.
"Adjusted Eligible Finished Goods"
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shall mean, on any date, Eligible Finished
Goods minus Inventory Reserves.
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"Adjusted Eligible Raw Materials"
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shall mean, on any date, Eligible Raw Materials
minus Inventory Reserves.
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"Adjusted Eligible Stock-in-Process"
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shall mean, on any date, Eligible
Stock-in-Process minus Inventory Reserves.
"Adjusted Eligible Weaving-in-Process"
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shall mean, on any date, Eligible
Weaving-in-Process minus Inventory Reserves.
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"Dilution Percentage" shall mean, on
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any date, expressed as a percentage, the total
of all non-cash credits or reductions of the
Borrower's accounts receivable for the last
twelve months (calculated on a rolling basis
monthly) divided by gross sales for the same
period.
"Dilution Reserve" shall mean, on any
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date, (a) the Dilution Percentage minus 5%
multiplied by (b) gross sales for any period of
measurement (to the extent non-negative).
"Eligible Accounts Receivable" shall
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mean, at the time of any determination, the
gross outstanding balance at such time,
determined in accordance with GAAP and stated
on a basis consistent with the historical
practices of the Borrower or the Guarantors (as
applicable) as of the date hereof, of Accounts
of the Borrower or the Guarantors (as the case
may be) less, as applicable and without
duplication, the aggregate amount of (i) all
accrued rebates, (ii) all trade discounts,
(iii) all finance charges, late fees and other
fees that are unearned, (iv) all reserves for
service fees and such other fees or commissions
or similar amounts that the Borrower or the
Guarantors (as applicable) have agreed to pay,
(v) all cash received in respect of Accounts
but not yet applied by the Borrower or the
Guarantors (as applicable) to reduce the amount
of the Accounts, and (vi) any Account deemed
ineligible for inclusion in the calculation of
the Borrowing Base pursuant to any of clauses
(a) through (r) below or otherwise deemed by
the Agent in its reasonable discretion to be
ineligible for inclusion in the calculation of
the Borrowing Base as described below. Without
limiting the foregoing, to qualify as an
Eligible Account Receivable, an Account shall
indicate as sole payee and as sole remittance
party the Borrower or the Guarantors (as the
case may be). Standards of eligibility may be
fixed from time to time solely by the Agent in
the exercise of its reasonable discretion, with
any changes in such standards to be effective
five (5) days after delivery of notice thereof
to the Borrower or the Guarantors (as
applicable). Unless
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otherwise approved from time to time in writing
by the Agent, no Account shall be an Eligible
Account Receivable if, without duplication:
(a) the Borrower or the Guarantors (as
applicable) do not have sole lawful and
absolute title to such Account; or
(b) it arises out of a sale made by
the Borrower or the Guarantors (as applicable)
to an employee, officer, agent, director,
stockholder, or Affiliate of the Borrower or
the Guarantors (as applicable); or
(c) the Account Debtor (i) is a
creditor of the Borrower or the Guarantors (as
applicable), (ii) has or has asserted a right
of set-off against the Borrower or the
Guarantors (as applicable) (unless such Account
Debtor has entered into a written agreement
reasonably acceptable to the Agent to waive
such set-off rights) or (iii) has disputed its
liability (whether by chargeback or otherwise)
or made any asserted or unasserted claim with
respect to the Account or any other Account of
the Borrower or the Guarantors (as applicable)
which has not been resolved, in each case,
without duplication, to the extent of the
amount owed by such Borrower or Guarantors (as
applicable) to the Account Debtor, the amount
of such actual or asserted right of set-off, or
the amount of such dispute or claim, as the
case may be (without duplication for non-cash
credits taken into consideration in calculating
Dilution Percentage); or
(d) the Account Debtor is insolvent or
the subject of any bankruptcy case or
insolvency proceeding of any kind (other than
postpetition accounts payable of an Account
Debtor that is a debtor-in-possession under the
Bankruptcy Code and acceptable to the Agent);
or
(e) the Account is not payable in
Dollars or the Account Debtor is either not
incorporated under the laws of the United
States of America, any state thereof or the
District of Columbia or is located outside or
has its principal place of business or
substantially all of its assets outside the
United States (except to the extent such
Account is supported by an irrevocable letter
of credit or credit insurance issued by an
institution acceptable to the Agent in its
reasonable discretion); or
3
(f) the sale to the Account Debtor is
on a delayed shipment (or xxxx and hold) basis
(provided that following shipment the related
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Account shall not be excluded from Eligible
Accounts Receivable solely as a result of this
clause), or is deemed ineligible at the
reasonable discretion of the Agent, guaranteed
sale, sale-and-return, ship-and-return, sale on
approval, extended terms or consignment or
other similar basis or made pursuant to any
other agreement providing for repurchase or
return of any merchandise which has been
claimed to be defective or otherwise
unsatisfactory; or
(g) the goods giving rise to such
Account have not been shipped and title has not
been transferred to the Account Debtor, or the
Account represents a progress-billing or
otherwise does not represent a completed sale;
for purposes hereof, "progress-billing" means
any invoice for goods sold or leased or
services rendered under a contract or agreement
pursuant to which the Account Debtor's
obligation to pay such invoice is conditioned
upon the Borrower or the Guarantors' (as
applicable) completion of any further
performance under the contract or agreement; or
(h) the Account does not comply in all
material respects with the requirements of all
applicable laws and regulations, whether
Federal, state or local, including without
limitation the Federal Consumer Credit
Protection Act, the Federal Truth in Lending
Act and Regulation Z of the Board; or
(i) the Account is subject to any
adverse security deposit, retainage or other
similar advance made by or for the benefit of
the Account Debtor, in each case to the extent
thereof; or
(j) the Account is unpaid more than 60
days from the original due date; or
(k) such Account was not paid in full,
and the Borrower or Guarantors (as applicable)
created a new receivable for the unpaid portion
of the Account, without the agreement of the
customer, including without limitation
chargebacks, debit memos and other adjustments
for unauthorized deductions; or
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(l) more than 50% of all Accounts of
the particular Account Debtor are over 60 days
from the original due date, in which case no
Accounts of the particular Account Debtor shall
be Eligible Accounts Receivable; or
(m) such Account has a payment term
that is greater than 90 days; or
(n) (i) it is not subject to a valid
and perfected first priority Lien in favor of
the Agent for the benefit of the Banks, subject
to no other Liens other than the Liens (if any)
permitted by the Loan Documents or (ii) it does
not otherwise conform in all material respects
to the representations and warranties contained
in the Loan Documents relating to Accounts; or
(o) as to all or any part of such
Account, a check, promissory note, draft, trade
acceptance or other Instrument for the payment
of money has been received, presented for
payment and returned uncollected for any
reason; or
(p) it has been written off the books
of the Borrower or the Guarantors (as
applicable) or has been otherwise designated as
uncollectible; or
(q) the inclusion of such Account as
an Eligible Account Receivable would cause the
aggregate amount of the Eligible Accounts
Receivable of a particular Account Debtor to
exceed 15% of the total Eligible Accounts
Receivable, provided that with respect to
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Account Debtors, Levi Xxxxxxx & Co. and VF
Corporation, the amount of the Eligible
Accounts Receivables of each such Account
Debtor shall not exceed 25% of the total
Eligible Accounts Receivable; or
(r) the Account is a non-trade
Account, or relates to payments for interest.
"Eligible Finished Goods" shall mean,
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on any date, Eligible Inventory defined as
Finished Goods by the Borrower or the
Guarantors (as applicable) on such date as
shown on the Borrower or the Guarantors' (as
applicable) perpetual inventory records in
accordance with its current and historical
accounting practices.
"Eligible Inventory" shall mean, at
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the time of any determination thereof, without
duplication, the Inventory Value of the
Borrower or the Guarantors (as applicable) at
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the time of such determination that is not
ineligible for inclusion in the calculation of
the Borrowing Base pursuant to any of clauses
(a) through (k) below, minus any Inventory
otherwise deemed by the Agent in its reasonable
discretion to be ineligible for inclusion in
the calculation of the Borrowing Base. Without
limiting the foregoing, to qualify as "Eligible
Inventory" no person other than the Borrower or
the Guarantors (as applicable) shall have any
direct or indirect ownership, interest or title
to such Inventory and no person other than the
Borrower or the Guarantors (as applicable)
shall be indicated on any purchase order or
invoice with respect to such Inventory as
having or purporting to have an interest
therein. Standards of eligibility may be
altered from time to time solely by the Agent
in the exercise of its reasonable judgment,
with any changes in such standards to be
effective 5 days after delivery of notice
thereof to the Borrower or the Guarantors (as
applicable). Unless otherwise from time to time
approved in writing by the Agent, no Inventory
shall be deemed Eligible Inventory if, without
duplication:
(a) the Borrower or the Guarantors (as
applicable) do not have sole and good, valid
and unencumbered title thereto (except for
Permitted Liens); or
(b) it is not located in the United
States; or
(c) from and after the date that is
thirty (30) days after the effective date of
the Borrowing Base Amendment, it is not located
on property owned or leased by the Borrower or
the Guarantors (as applicable) or is located in
a third party warehouse in which a valid
landlord waiver satisfactory in form and
substance to the Agent is not in full force or
effect; or
(d) it is supplies, packing or
shipping materials, cartons, repair parts,
labels or miscellaneous spare parts, dyes or
chemicals; or
(e) it is not subject to a valid and
perfected first priority Lien in favor of the
Agent for the benefit of the Banks (except for
Permitted Liens); or
(f) it is Inventory that is deemed to
be greater than one year old; or
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(g) it is consigned or at a customer
location but still accounted for in the
Borrower or the Guarantors' (as applicable)
perpetual inventory balance; or
(h) from and after the date that is
thirty (30) days after the effective date of
the Borrowing Base Amendment, it is Inventory
which is being processed offsite at a third
party location or an outside processor in which
a valid waiver with each processor satisfactory
in form and substance to the Agent is not in
full force or effect, or is in transit to or
from the said third party location or outside
processor; or
(i) it is identified as overstock by
the Borrower or the Guarantors (as applicable);
or
(j) it is in-transit to or from a
foreign location, or is part of a xxxx and hold
arrangement from a vendor, which has not yet
been received into a facility owned or operated
by the Borrower or the Guarantors (as
applicable); or
(k) it is Inventory used as a sample
or prototype, if it is not first quality; or
(l) it is Inventory which is
recognized as damaged, off quality, or not to
customer specifications by the Borrower or the
Guarantors (as applicable) or in any way not
first-quality inventory.
"Eligible Raw Materials" shall mean,
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on any date, Eligible Inventory defined as Raw
Materials by the Borrower or the Guarantors (as
applicable) on such date as shown on the
Borrower or the Guarantors' (as applicable)
perpetual inventory records in accordance with
its current and historical accounting
practices.
"Eligible Stock-in-Process" shall
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mean, on any date, Eligible Inventory defined
as Stock-in-Process by the Borrower or the
Guarantors (as applicable) on such date as
shown on the Borrower or the Guarantors' (as
applicable) perpetual inventory records in
accordance with its current and historical
accounting practices except that purchased
yarn, which has been inspected by the Borrower
or the Guarantors (as applicable) and
determined to be first quality, and in all
regards acceptable for use, and which has
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yet to be involved in the manufacturing process
in any way, shall be considered Raw Materials.
"Eligible Weaving-in-Process" shall
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mean, on any date, Eligible Inventory defined
as Weaving-in-Process by the Borrower or the
Guarantors (as applicable) on such date as
shown on the Borrower or the Guarantors' (as
applicable) perpetual inventory records in
accordance with its current and historical
accounting practices.
"Finished Goods" shall mean completed
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goods which require no additional processing,
to be sold in the ordinary course of business.
"Xxxxx & Lord Industries" shall mean
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Xxxxx & Lord Industries, Inc., a subsidiary of
the Borrower.
"Inventory" shall mean all Raw
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Materials, Stock-in-Process, Weaving-in-Process
and Finished Goods held by the Borrower or the
Guarantors, as the case may be, in the normal
course of business.
"Inventory Reserves" shall mean, as to
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Inventory defined as Raw Materials,
Stock-in-Process, Weaving-in-Process or
Finished Goods by the Borrower or the
Guarantors (as applicable), the sum of the
following (as to such applicable category of
Inventory):
(a) a reserve for shrink, or
discrepancies that arise pertaining to
inventory quantities on hand between the
Borrower or the Guarantors' (as applicable)
perpetual accounting system and physical counts
of the inventory, which will be equal to the
greater of 1% or the results of the last
physical count with the variance expressed as a
percentage, for Raw Materials,
Stock-in-Process, Weaving-in-Process and
Finished Goods, respectively; and
(b) a reserve for Inventory that is
discontinued; and
(c) any other reserve as deemed
appropriate by the Agent in their sole
discretion exercised reasonably, from time to
time.
"Inventory Value" of any Inventory
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shall mean at the time of any determination
thereof the standard cost carried on the
perpetual records of the Borrower or the
Guarantors (as applicable) in accordance with
their current and historical accounting
practices, in Dollars, determined
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in accordance with the standard cost method of
accounting less (i) any markup on Inventory
from an Affiliate and (ii) in the event
variances under the standard cost method (a)
are capitalized, favorable variances shall be
deducted from Eligible Inventory, and
unfavorable variances shall not be added to
Eligible Inventory, and (b) are expensed, a
reserve shall be determined as appropriate in
order to adjust the standard cost of Eligible
Inventory to approximate actual cost.
"Lower of Cost or Market Reserve"
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shall mean a reserve for differences between
the Borrower or the Guarantors' (as applicable)
actual cost to produce versus their selling
price to third parties, determined on a product
line basis.
"Qualified Xxxx and Hold Sales" shall
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mean, on any date, transactions involving the
sale of Inventory to third parties, which
Inventory has not been shipped by the Borrower
or the Guarantors (as applicable) to the third
party Account Debtor and which transactions
have the characteristics set forth in the
following sentence (it being understood that
following shipment such transactions shall no
longer be treated as a Qualified Xxxx and Hold
Sale). Such transactions are transactions in
which (i) the Inventory is segregated and
uniquely identified as being Account Debtor
owned in the systems and official records of
the Borrower or the Guarantors (as applicable);
(ii) the Inventory is not included in the
Borrower or the Guarantors' (as applicable)
Inventory; (iii) title and risk of loss have
passed to the Account Debtor; (iv) sales are
non-cancelable and payable sale transactions
under normal payment terms from the date of the
invoice; (v) the applicable terms qualify as a
sale and account receivable according to all
applicable regulatory accounting guidelines;
(vi) the parties' obligations are evidenced by
an executed bilateral letter agreement or such
other documentation entered into by the
Borrower or the Guarantors (as applicable) with
the Account Debtor in accordance with past
practices acceptable to its third party
financial auditors; and (vii) the Accounts are
owed and due from Account Debtors that are
based in the United States (amounts being in
U.S. Dollars) and that are current and in
compliance (in all respects) on all Accounts,
and otherwise meet the criteria set forth in
items (c), (d), (h), (i), (j), (k) through (q)
in the definitions of Eligible Accounts
Receivable.
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"Raw Materials" shall mean materials
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used or consumed in the manufacturing of goods
to be sold by the Borrower or the Guarantors
(as applicable) in the ordinary course of
business, such as xxxxx of cotton, xxxxx of
greasy wool and purchased yarn.
"Run-Out Expenses" shall mean all
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costs and expenses whenever incurred and
arising from the closing of production
facilities of the Borrower which occurred prior
to the date hereof, including, without
limitation, costs associated with (i) the
carrying costs of buildings to be sold, (ii)
the preparation of equipment to be sold, (iii)
costs related to employees who have been
terminated at such facilities, (iv) the storage
of Finished Goods and (v) workers compensation
claims of employees from such facilities, as
set forth in the business plan delivered to
Agent, pursuant to Section 4.01(i).
"Stock-in-Process" shall mean product
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that has been removed from Raw Materials
inventory and as to which the spinning and/or
production process has begun and which has not
been completed, tested and prepared for use as
Raw Materials.
"Swift Textiles" shall mean Swift
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Textiles, Inc., a subsidiary of the Borrower.
"Total Commitment Usage" shall mean,
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at any time, the sum of (i) the aggregate
outstanding principal amount of all Loans, and
(ii) the aggregate Letter of Credit
Outstandings.
"Weaving-in-Process" shall mean yarn
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that has been removed from standard packaging
and as to which the warping and/or the
production process has begun and which has not
been completed, tested and prepared for
shipment as Finished Goods.
3. The definitions of the terms "Borrowing Base" and "Borrowing
Base Certificate" set forth in Section 1.01 of the Credit Agreement are hereby
amended in their entirety to read as follows:
"Borrowing Base" shall mean, on any
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date, the amount (calculated based on the most
recent Borrowing Base Certificate delivered
pursuant to this Agreement) that is equal to
(a) 85% of Eligible Accounts Receivable, net of
Dilution Reserve plus (b) 40% of Adjusted
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Eligible Raw
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Materials for Xxxxx & Lord Industries and Swift
Textiles plus (c) 20% of Adjusted Eligible
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Stock-in-Process for Xxxxx & Lord Industries
and 15% of Adjusted Eligible Stock-in-Process
for Swift Textiles, plus (d) 35% of Adjusted
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Eligible Weaving-in-Process for Xxxxx & Lord
Industries and 15% of Adjusted Eligible
Weaving-in-Process for Swift Textiles plus (e)
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45% of Adjusted Eligible Finished Goods for
Xxxxx & Lord Industries and 50% of Adjusted
Eligible Finished Goods for Swift Textiles plus
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(f) 50% of Qualified Xxxx and Hold Sales minus
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(g) the Carve-Out. Borrowing Base eligibility
standards may be fixed and revised from time to
time by the Agent in its sole discretion,
exercised reasonably. The Borrowing Base shall
be subject to reserves from time to time
established by the Agent with any changes in
such standards and reserves to be effective
five (5) days after delivery of notice thereof
to the Borrower.
"Borrowing Base Certificate" shall
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mean a certificate substantially in the form of
Exhibit E hereto (with such changes therein as
may be required by the Agent to reflect the
components of and reserves against the
Borrowing Base as provided for hereunder from
time to time), executed and certified by a
Financial Officer of the Borrower, which shall
include appropriate exhibits and schedules as
referred to therein and as provided for in
Section 5.08.
4. The definition of the term "EBITDA" set forth in Section 1.01
of the Credit Agreement is hereby amended by (A) deleting the word "and"
appearing at the end of clause (viii) thereof and inserting in lieu thereof a
"," and (B) inserting the following new clause at the end of clause (ix) thereof
immediately preceding the word "less":
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"and (x) the Run-Out Expenses (but only to the
extent that such Run-Out Expenses do not exceed
the amounts thereof permitted by Section
6.13)".
5. Section 2.20 of the Credit Agreement is hereby amended in its
entirety by inserting the following:
SECTION 2.20. Commitment Fee. The Borrower
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shall pay to the Banks a commitment fee (the
"Commitment Fee") for the period commencing on
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the Closing Date to the Termination Date or the
earlier date of termination of the Commitment,
computed (on the basis of actual number of days
elapsed during the period over a year of 360
days) as follows: (A) at such time as First
Union is no longer the sole Bank, at the rate
of (i) three-quarters of one percent
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(3/4 of 1%) per annum on the average daily
Unused Total Commitment during the period for
which the Commitment Fee is calculated at all
times during which the average Total Commitment
Usage is less than 25% of the Total Commitment
or (ii) one-half of one percent (1/2 of 1%) per
annum on the average daily Unused Total
Commitment during the period for which the
Commitment Fee is calculated at all times
during which the average Total Commitment Usage
is more than or equal to 25% of the Total
Commitment; or (B) at all times that First
Union is the sole Bank, at a rate of one-half
of one percent (1/2 of 1%) per annum on the
average daily Unused Total Commitment during
the period for which the Commitment Fee is
calculated. Such Commitment Fee, to the extent
then accrued, shall be payable (x) monthly, in
arrears, on the last calendar day of each
month, (y) on the Termination Date and (z) as
provided in Section 2.10 hereof, upon any
reduction or termination in whole or in part of
the Total Commitment.
6. Section 3 of the Credit Agreement is hereby amended by
inserting the following new section:
SECTION 3.11. Historic EBITDA. EBITDA for the
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Borrower and the Guarantors for each fiscal
month commencing with the month ending in April
2001 through the month ending in January 2002
shall be as set forth in Schedule 3.11.
7. Section 5.01(d) of the Credit Agreement is hereby amended by
(A) deleting the words "(a) and (b)" appearing in clause (i) thereof and
inserting in lieu thereof the following text: "(a), (b) and (c)"; and (B)
deleting the words "Sections 6.04 and 6.05" appearing in clause (i)(B) thereof
and inserting in lieu thereof the words "Sections 6.04, 6.05 and 6.13."
8. Section 5.07 of the Credit Agreement is hereby amended by
deleting the proviso at the end thereof and inserting in lieu thereof the
following:
"provided that the Borrower and the Guarantors
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may maintain up to an aggregate of $250,000 in
deposit accounts other than the principal
concentration account maintained with the
Agent."
9. Section 5.08 of the Credit Agreement is hereby amended in its
entirety by inserting the following:
SECTION 5.08. Borrowing Base Certificate.
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Furnish a Borrowing Base Certificate
substantially in the form of
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Exhibit E to the Agent: (a) on or before the
fifth Business Day following the end of each
week, which weekly Borrowing Base Certificate
shall reflect (i) the accounts receivable
updated as of Friday of each such week (which
shall include and reflect for the Borrower and
the Guarantors the most recent Accounts
Receivable Aging Report in the form and
substance satisfactory to the Agent); and (ii)
Inventory as of the end of the preceding month,
which shall be updated as of the twentieth
(20th) Business Day of each month (which shall
include and reflect for the Borrower and the
Guarantors the most recent Open Orders History
in form and substance satisfactory to the
Agent), and (b) if requested by the Agent at
any other time when the Agent reasonably
believes that the then existing Borrowing Base
Certificate is materially inaccurate, as soon
as reasonably available but in no event later
than five (5) Business Days after such request,
a Borrowing Base Certificate showing the
Borrowing Base as of the date so requested, in
each case with supporting documentation; and
shall be supplemented at any time by such other
supporting documentation and additional reports
with respect to the Borrowing Base as the Agent
shall reasonably request.
10. Section 5 of the Credit Agreement is hereby amended by
deleting Section 5.11 in its entirety.
11. Section 6.01 of the Credit Agreement is hereby amended by (A)
deleting the "and" at end of clause (iv) thereof and inserting in lieu thereof a
"," and (B) inserting the following new clause at the end thereof:
"and (vi) Liens in favor of the relevant taxing
authority in an amount not to exceed $550,000
upon the personal or real property associated
with the closed Xxxxx Denim Facility."
12. Section 6.05 of the Credit Agreement is hereby amended in its
entirety by inserting the following:
SECTION 6.05. EBITDA. Permit EBITDA for each
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12-month period ending on the last day of each
fiscal month listed below to be less than the
amount specified opposite such date:
12 Months Ending EBITDA
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March, 2002 $36,500,000
April, 2002 $34,100,000
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May, 2002 $34,000,000
June, 2002 $29,750,000
July, 2002 $30,500,000
August, 2002 $35,000,000
September, 2002 $29,750,000
October, 2002 $26,500,000
November, 2002 $26,000,000
December, 2002 $21,500,000
January, 2003 $22,500,000
February, 2003 $21,400,000
March, 2003 $22,300,000
April, 2003 $23,100,000
May, 2003 $24,000,000
June, 2003 $23,500,000
July, 2003 $24,500,000
August, 2003 $24,800,000
September, 2003 $24,000,000
13. Section 6.09 of the Credit Agreement is hereby amended by
inserting a "(i)" immediately following the words "except for" appearing therein
and inserting the following new clause at the end thereof:
"and (ii) the repayment of prior advances from
Dimmit Industries S.A. de C.V. (Mexico) and
Confecciones Alta Loma S.A. de C.V. (Mexico) in
an aggregate amount not to exceed $500,000."
14. Section 6.10 of the Credit Agreement is hereby amended by
inserting the following text at the end thereof:
"; it being understood that the repayment of
advances permitted pursuant to clause (ii) of
Section 6.09 will not constitute an Investment
as contemplated herein."
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15. Section 6 of the Credit Agreement is hereby amended by
inserting the following new Section:
SECTION 6.13. Run-Out Expenses. Permit Run-Out
----------------
Expenses (i) for the period commencing on the
effective date of the Borrowing Base Amendment
through and including June 30, 2002, to exceed
$250,000 in any one fiscal month during such
period, (ii) for the period commencing on July
1, 2002 through and including October 31, 2002,
to exceed $325,000 in any one fiscal month
during such period, or (iii) for the period
commencing on November 1, 2002 through and
including the Maturity Date, to exceed $200,000
in any one fiscal month during such period.
16. The Credit Agreement is hereby further amended by adding a new
"Exhibit E" in the form attached hereto as Exhibit A.
17. The Credit Agreement is hereby further amended by adding a new
"Schedule 3.11" in the form attached hereto as Exhibit B.
18. The Credit Agreement is hereby further amended by deleting
Schedule 5.11 in its entirety.
19. This Amendment shall not become effective until the date (the
"Effective Date") on which this Amendment shall have been executed by the
--------------
Borrower, the Guarantors and Banks representing the Required Banks, and the
Agent shall have received evidence satisfactory to it of such execution.
20. Except to the extent hereby amended, the Credit Agreement and
each of the Loan Documents remain in full force and effect and are hereby
ratified and affirmed.
21. The Borrower agrees that its obligations set forth in Section
10.05 of the Credit Agreement shall extend to the preparation, execution and
delivery of this Amendment, including the reasonable fees and disbursements of
special counsel to the Agent.
22. This Amendment shall be limited precisely as written and shall
not be deemed (a) to be a consent granted pursuant to, or a waiver or
modification of, any other term or condition of the Credit Agreement or any of
the instruments or agreements referred to therein or (b) to prejudice any right
or rights which the Agent or the Banks may now have or have in the future under
or in connection with the Credit Agreement or any of the instruments or
agreements referred to therein. Whenever the Credit Agreement is referred to in
the Credit Agreement or any of the instruments, agreements or other documents or
papers executed or delivered in connection therewith, such reference shall be
deemed to mean the Credit Agreement as modified by this Amendment.
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23. This Amendment may be executed in any number of counterparts
and by the 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
taken together shall constitute but one and the same instrument.
24. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and the year first written.
BORROWER:
XXXXX & LORD, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President, Secretary and Treasurer
GUARANTORS:
XXXXX & LORD INDUSTRIES, INC.
G&L SERVICE COMPANY,
NORTH AMERICA, INC.
SWIFT TEXTILES, INC.
SWIFT DENIM SERVICES, INC.
By: /s/ XXXXXXX X. XXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President, Secretary and Treasurer
XXXXX & LORD PROPERTIES, INC.
SWIFT DENIM PROPERTIES, INC.
GREENSBORO TEXTILE
ADMINISTRATION LLC
BRIGHTON WEAVING LLC
FLINT SPINNING LLC
SOCIETY HILL FINISHING LLC
XXXXXXXX WEAVING LLC
By: /s/ XXXXXXX X. XXXXXX
------------------------------------------
Name:
Title:
17
FIRST UNION NATIONAL BANK
Individually and as Agent
By: /s/ X.X. XXXX
------------------------------------------
Name: X. X. Xxxx
Title: Director
18
Exhibit A
Form Borrowing Base Certificate
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Exhibit B
Schedule 3.11
Historic EBITDA
---------------
Fiscal Month Ending EBITDA
------------------- ------
April 2001 $ 2,939,000
May 2001 $ 1,679,000
June 2001 $ 9,046,000
July 2001 ($ 1,888,000)
August 2001 ($ 2,038,000)
September 2001 $12,175,000
October 2001 $ 3,600,000
November 2001 $ 771,000
December 2001 $ 8,566,000
January 2002 ($ 1,180,000)
20
