SECOND AMENDMENT TO AND WAIVER UNDER CREDIT AGREEMENT
THIS SECOND AMENDMENT TO AND WAIVER UNDER CREDIT AGREEMENT (this
"Second Amendment and Waiver") is dated as of May 15, 2001 among XXXXXXXX XXXXX,
INC. (the "Borrower"), WACHOVIA BANK, N.A., as Administrative Agent, FIRST UNION
NATIONAL BANK, as Syndication Agent, BANK ONE, NA, as Documentation Agent and
WACHOVIA BANK, N.A., FIRST UNION NATIONAL BANK, BANK ONE, NA, and BRANCH BANKING
AND TRUST COMPANY, as Banks (collectively, the "Banks");
W I T N E S S E T H :
---------------------
WHEREAS, the Borrower, the Administrative Agent, the Syndication Agent,
the Documentation Agent and the Banks executed and delivered that certain Credit
Agreement, dated as of May 26, 2000, as amended by First Amendment to Credit
Agreement dated as of November 6, 2000 (as so amended, the "Credit Agreement");
WHEREAS, the Borrower has advised the Agent and the Banks, and hereby
acknowledges, that the Borrower has breached the Interest Coverage Ratio
covenant contained in Section 5.17 of the Credit Agreement as it existed prior
to being replaced pursuant to this Second Amendment and Waiver (the "Replaced
Interest Coverage Covenants"), the Leverage Ratio covenant contained in Section
5.19 of the Credit Agreement as it existed prior to being replaced pursuant to
this Second Amendment and Waiver (the "Replaced Leverage Ratio Covenant") and
the Consolidated Tangible Net Worth covenant contained in Section 5.20 of the
Credit Agreement as it existed prior to being replaced pursuant to this Second
Amendment and Waiver (the "Replaced Net Worth Covenant"), for the Fiscal Quarter
ending on or about March 31, 2001 (the "Second Quarter FY2001")(such breaches of
the Replaced Interest Coverage Covenant, the Replaced Leverage Ratio Covenant
and the Replaced Net Worth Covenant for the Second Quarter FY2001 being
collectively referred to as the "Second Quarter FY2001 Replaced Financial
Covenant Defaults"), and requested that the Agent and the Banks waive the Event
of Default which has occurred under Sections 5.17, 5.19 and 5.20 as a result of
the Second Quarter FY2001 Replaced Financial Covenant Defaults, and the Agent
and the Required Banks have agreed to such waiver, subject to the terms and
conditions hereof;
WHEREAS, the Borrower has requested and the Administrative Agent and
the Banks have agreed to 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 Administrative
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. Effective upon satisfaction of the conditions to
effectiveness set forth, and subject to the other terms and conditions set forth
herein, the Agent and the Banks waive the Second Quarter FY2001 Replaced
Financial Covenant Defaults.
3. Amendment to Section 1.01. Section 1.01 of the Credit Agreement
hereby is amended by (i) amending and restating each of the following
definitions which previously were contained in Section 1.01 of the Credit
Agreement and (ii) adding to the Credit Agreement the following definitions
which were not previously contained in Section 1.01 of the Credit Agreement.
"Applicable Restructuring Charges" means, for each
applicable quarterly reporting period in which such charges should be
included: (i) the UK Restructuring Charges, up to the amount set forth
in the definition thereof; (ii) other restructuring charges incurred in
the fourth Fiscal Quarter of the 2000 Fiscal Year in an amount not
exceeding $28,645,000, described in the Restructuring Charges Letter;
(iii) other restructuring charges to be incurred in each Fiscal Quarter
of the 2001 Fiscal Year described in the Restructuring Charges Letter;
provided, that the aggregate of such Applicable Restructuring Charges
under this clause (iii) for the 2001 Fiscal Year shall not exceed
$16,060,000.
"Cash Flow Certificate Delivery Date" has the meaning
set forth in Section 2.08(b).
"Collateral" means: (i) the Foreign Pledged Stock;
(ii) the Domestic Pledged Stock and (if applicable, the Receivables
Subsidiary Pledged Stock); (iii) all of the personal property described
in the Security Agreement and the Patent Assignment; provided, however,
that from and after the release of the Receivables Program Assets
pursuant to Section 9.19, all references to Collateral pursuant to the
Security Agreement shall exclude the Receivables Program Assets and the
Purchase Money Note, but shall include the Receivables Subsidiary
Pledged Stock; (iv) all of the Plants and Designated Other Real
Property; (v) from and after execution and delivery of the Life
Insurance Assignments pursuant to Section 5.25(c) of the Credit
Agreement, the life insurance policies described in the Life Insurance
Assignments; and (vi) when and if the UK Subsidiary Collateral
Documents are executed and delivered pursuant to Section 5.25(d) of the
Credit Agreement, the UK Subsidiary Collateral.
"Commitment Reduction Date" means each of June 30,
2001, July 31, 2001, August 31, 2001, September 30, 2001 and September
30, 2002.
2
"Consolidated Excess Cash Flow" means for any period,
the sum of the following calculated on a consolidated basis for the
Borrower and its Domestic Subsidiaries (i) Consolidated Net income,
plus (ii) to the extent deducted (or minus to the extent included) in
determining Consolidated Net Income for such period, non-cash items of
income and expense (including depreciation, amortization, and other
similar non-cash charges) minus (if a gain) or plus (if a loss) (iii)
any gain or loss from the dispositions of Property to the extent taken
into account in determining Consolidated Net Income, minus (iv) Capital
Expenditures not financed with Purchase Money Debt, minus (v) any
increase (or plus any decrease) in the average of the Consolidated Net
Working Investment at the end of each month during the period, when
compared to the average of the Consolidated Net Working Investment at
the end of each month ending during the corresponding period
immediately prior thereto, minus (vi) all scheduled principal payments
made on Debt (including prepayments pursuant to Section 2.10 which
reduce the Commitments pursuant to Section 2.08(b)).
"Consolidated Fixed Charges" means the sum of
Consolidated Interest Expense for such period plus Capital Expenditures
not financed by Permitted Foreign Debt or Domestic Purchase Money Debt
for such period plus all scheduled principal payments on Debt coming
due in the next period (but not including prepayments pursuant to
Section 2.10 which reduce the Commitments pursuant to Section 2.08(b)).
"Consolidated Net Working Investment" means for any
period, the sum of the following calculated on a consolidated basis,
(i) the current assets (including gross trade accounts receivable
before Factor Advances, but excluding cash and cash equivalents) of the
Borrower and its Domestic Subsidiaries, minus (ii) the current
liabilities (excluding Debt) of the Borrower and its Domestic
Subsidiaries.
"Consolidated Total EBITDA" means, as to the Borrower
and its Consolidated Subsidiaries calculated for each Fiscal Quarter
then ending, and the immediately preceding 3 Fiscal Quarters
(determined on a consolidated basis and in accordance with GAAP), the
sum of (a) Consolidated Net Income, plus (b) Consolidated Interest
Expense (to the extent subtracted from Consolidated Net Income), plus
(c) Amortization (to the extent subtracted from Consolidated Net
Income), plus (d) Depreciation (to the extent subtracted from
Consolidated Net Income), plus or minus (e) to the extent included in
determining Consolidated Net Income, provisions for taxes on income for
such period (subtract if net benefits are recognized), plus (f)
Applicable Restructuring Charges.
"Domestic Permitted Purchase Money Lien" means any
Lien on an asset which is purchased after the Second Amendment
Effective Date and which is located in the United States of America or
any state, territory or possession thereof or the District of Columbia,
provided that (i) such Lien attaches to such asset concurrently with
the acquisition, (ii) such Lien does not at any time encumber any
Property other than such asset, (iii) the amount of Debt secured by
such asset is not increased and (iv) the aggregate principal amount
3
outstanding at any time of all Domestic Purchase Money Debt secured by
Domestic Permitted Purchase Money Liens shall not exceed $40,000,000.
"Domestic Purchase Money Debt" means Debt incurred by
the Borrower or any Domestic Subsidiary incurred for the purpose of
financing all or any part of the cost of acquiring an asset located in
the United States of America or any state, territory or possession
thereof or the District of Columbia, which Debt is secured by a
Domestic Permitted Purchase Money Lien.
"Fiscal Month" means any fiscal month of the
Borrower.
"Fixed Charge Coverage Ratio" means the ratio of the
sum of Consolidated Total EBITDA for such period to Consolidated Fixed
Charges for such period.
"Life Insurance Assignments" means, individually and
collectively, as the context shall require, each Collateral Assignment
of Life Insurance executed and delivered by the Borrower pursuant to
Section 5.25(c) in favor of the Collateral Agent, for the ratable
benefit of the Secured Parties, to secure the Secured Obligations, each
in substantially the form of Exhibit R.
"Morelos Assets Sale Letter" means a letter from the
Borrower to the Administrative Agent and the Secured Parties dated May
15, 2001 pertaining to the sale of certain assets in State of Morelos,
Mexico.
"Net Proceeds of Special Transaction" means all
amounts paid in cash from time to time to the Borrower or any
Subsidiary by the Special Transaction Entity, including, without
limitation, cash dividends and other cash distributions and payments
under a put agreement or other cash returns of capital paid to the
Borrower or any Subsidiary pursuant to the operating or partnership
agreement or any other agreement pertaining to the Special Transaction
Entity, and repayments of loans to the Special Transaction Entity, in
each case net of applicable taxes, but excluding payments arising from
ordinary course of business transactions between the Borrower or any
Subsidiary and the Special Transaction Entity which are unrelated to
the Special Transaction Investment (such as receipt of payment for
goods sold).
"Net Proceeds of Loan Repayment" means all cash
proceeds received in payment of intercompany loans between the Borrower
or any Domestic Subsidiary and any of the Foreign Subsidiaries made as
permitted by Section 5.15(xii), (xiii) or (xiv), in each case net of
applicable taxes, and excluding "VAT" or "IVA" tax reimbursements
originally applied for during the 2001 Fiscal Year.
"Second Amendment Effective Date" means May 15, 2001.
"Security Documents" means the Foreign Stock Pledge
Agreement, the Domestic Stock Pledge Agreement, the Life Insurance
Assignments, the Security Agreement, the Patent Assignment, the
Mortgages and any UK Subsidiary Collateral Documents.
4
"Special Transaction Investment" means the Investment
to be made in the Special Transaction Entity described in the Special
Transaction Letter, subject to the provisions of Section 5.15(xxiii).
"Special Transaction Entity" means the entity in
which the Special Transaction Investment will be made as described in
the Special Transaction Letter, subject to the provisions of Section
5.15(xxiii).
"Special Transaction Letter" means a letter from the
Borrower to the Administrative Agent and the Secured Parties dated May
15, 2001 which (i) is entitled at the top thereof "SPECIAL TRANSACTION
LETTER", (ii) refers to the Credit Agreement, as amended by this Second
Amendment and Waiver, (iii) describes the Special Transaction
Investment in the Special Transaction Entity and (iv) describes the
equipment to be contributed to the Special Transaction Entity.
"UK Restructuring Charges" means restructuring
charges taken or to be taken in the 2001 Fiscal Year in connection with
the operations of UK Subsidiaries in an aggregate amount not to exceed
$4,800,000 and described in a letter dated April 16, 2001 from the
Borrower to the Agent, the Banks and the Senior Note Holders.
"UK Subsidiary" means any Subsidiary organized under
the laws of the United Kingdom and any Subsidiary owned by a Subsidiary
organized under the laws of the United Kingdom.
"UK Subsidiary Collateral" means substantially all of
the assets (both real or personal) of any UK Subsidiary as to which the
Collateral Agent has taken a fixed or floating charge pursuant to
Section 5.25(d) for the ratable benefit of the Secured Parties, to
secure the Secured Obligations.
"UK Subsidiary Collateral Documents" means,
individually and collectively, as the context shall require, any
documents executed and delivered by any of the UK Subsidiaries granting
to the Collateral Agent, for the ratable benefit of the Secured
Parties, to secure the Secured Obligations, a fixed or floating charge
on any UK Subsidiary Collateral pursuant to Section 5.25(d).
4. Amendment to Section 2.02(a). Section 2.02(a) of the Credit
Agreement hereby is amended by deleting it in its entirety and by substituting
the following therefor:
(a) The Borrower shall give the Administrative Agent
notice (a "Notice of Borrowing"), which shall be substantially in the
form of Exhibit E, prior to 11:00 A.M. (Atlanta, Georgia time) for
Dollar Borrowings, and 9:30 A.M. (Atlanta, Georgia time) for Foreign
Currency Borrowings, on the same Domestic Business Day of each Base
Rate Borrowing and at least 3 Euro-Dollar Business Days before each
Euro-Dollar Borrowing, and at least 3 Foreign Currency Business Days
before each Foreign Currency Borrowing, specifying:
(i) the date of such Borrowing, which shall be a
Domestic Business Day in the case of a Domestic Borrowing, a
Euro-Dollar Business Day in the case of a Euro-Dollar
5
Borrowing, or a Foreign Currency Business Day in the case of a
Foreign Currency Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are
to be Syndicated Loans or Swing Loans, whether they are to be
Base Rate Loans, Euro-Dollar Loans or Foreign Currency Loans,
and if such Loans are to be Foreign Currency Loans, specifying
the Foreign Currency, and
(iv) in the case of a Fixed Rate Borrowing, the
duration of the Interest Period applicable thereto, subject to
the provisions of the definition of Interest Period; provided
that if one or more Commitment Reduction Dates are scheduled
to occur during the Interest Period so selected, and as a
result thereof (but for this proviso) the Borrower shall
become obligated to prepay or repay all or any portion of the
Loans on any of such Commitment Reduction Dates pursuant to
Section 2.08(b), then a portion of such Fixed Rate Borrowing
which is equal to the amount of the Loans that would otherwise
be so prepaid or repaid on any of such Commitment Reduction
Dates either (A) shall have applicable thereto an Interest
Period or Interest Periods, as selected by the Borrower,
ending on or before the Commitment Reduction Date on which
Loans corresponding in amount to such portion would otherwise
be prepaid or repaid, or (B) shall instead be made as a Base
Rate Borrowing.
5. Amendment to Section 2.05(a). Section 2.05(a) of the Credit
Agreement hereby is amended by deleting it in its entirety and substituting the
following therefor:
(a) "Applicable Margin" means:
(i) for the period commencing on the Second Amendment
Effective Date to and including the first Performance Pricing
Determination Date after the Second Amendment Effective Date,
(x) for any Base Rate Loan, 1.25%, and (y) for any Euro-Dollar
Loan or Foreign Currency Loan, 4.25%; and
(ii) from and after the first Performance Pricing
Determination Date after the Second Amendment Effective Date,
(x) for any Base Rate Loan, 1.25%, and (y) for any Euro-Dollar
Loan or Foreign Currency Loan, the percentage determined on
each Performance Pricing Determination Date by reference to
the table set forth below and the Leverage Ratio for the
quarterly or annual period ending immediately prior to such
Performance Pricing Determination Date.
Leverage Ratio Applicable Margin
-------------- -----------------
< 2.75 2.50%
=> 2.75 and < 3.25 2.75%
=> 3.25 and < 4.00 3.75%
=> 4.00 4.25%
6
In determining interest for purposes of
this Section 2.05, the Borrower and the Banks shall refer to the
Borrower's most recent consolidated quarterly and annual (as the case
may be) financial statements delivered pursuant to Section 5.01(a) or
(b), as the case may be. If such financial statements require a change
in interest pursuant to this Section 2.05 or fees pursuant to Section
2.06, the Borrower shall deliver to the Administrative Agent, along
with such financial statements, a notice to that effect, which notice
shall set forth in reasonable detail the calculations supporting the
required change. The "Performance Pricing Determination Date" is the
date which is the last date on which such financial statements are
permitted to be delivered pursuant to Section 5.01(a) or (b), as
applicable. Any such required change in interest and fees shall become
effective on such Performance Pricing Determination Date, and shall be
in effect until the next Performance Pricing Determination Date,
provided that no interest shall be decreased pursuant to this Section
2.05 if a Default is in existence on the Performance Pricing
Determination Date, unless such Default in existence on the Performance
Pricing Date was not an Event of Default on such date and did not
thereafter become an Event of Default.
6. Amendment to Section 2.06(a) and (b). Section 2.06(a) and (b) of the
Credit Agreement hereby are amended by deleting them in their entirety and
substituting the following therefor:
(a) The Borrower shall pay to the Administrative
Agent, for the ratable account of each Bank, a commitment fee, on the
aggregate daily amount of such Bank's Unused Commitment, at a rate per
annum equal to 0.50% from and after the Second Amendment Effective
Date. Such commitment fees shall accrue from and including the Second
Amendment Effective Date (but excluding the Termination Date) and shall
be payable on each March 31, June 30, September 30 and December 31 and
on the Termination Date.
(b) The Borrower shall pay to the Administrative
Agent, for the ratable account of each Bank, an additional amendment
fee equal to 1.75% per annum of the average daily principal amount of
the Loans outstanding from and after the Second Amendment Effective
Date until the earlier of (a) the Termination Date and (b) the date on
which the Applicable Rate (as defined in the Note Purchase Agreements)
for the Senior Notes is reduced to 7.91% or less; provided, that on
each date after the Second Amendment Effective Date on which the
Applicable Rate for the Senior Notes is reduced from the Applicable
Rate in effect on the Second Amendment Effective Date (after giving
effect to the amendment to the Note Purchase Agreements contemplated in
Section 30(e) hereof) to a new Applicable Rate which is still greater
than 7.91%, such fee shall be reduced by the same number of basis
points as such reduction in the Applicable Rate for the Senior Notes,
and such reduction in such fee shall be effective for so long as such
reduction in the Applicable Rate for the Senior Notes remains
effective. The additional amendment fee shall be payable in full on the
Termination Date; provided, however, that if by December 31, 2001, all
of the Bank Obligations have been indefeasibly paid in full (other than
any indemnification claims related to causes unknown at the time) and
7
all Commitments have been terminated, such additional amendment fee
shall be waived by the Banks and no payment shall be due on account
thereof.
7. Amendment to Section 2.08. Section 2.08 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the following
therefor:
(a) The Commitments shall terminate on the
Termination Date and any Loans then outstanding (together with accrued
interest thereon) shall be due and payable on such date.
(b) The aggregate amount of the Commitments shall be
reduced on each Commitment Reduction Date to the amount set forth below
for such Commitment Reduction Date, or to such higher amount as shall
be equal to the principal amount of the Loans outstanding on such date
as a result of the provisions of, and after giving effect to the
prepayment described in, the proviso contained in the first sentence of
Section 2.10(a).
--------------------------- -----------------------
COMMITMENT REDUCTION DATE NEW COMMITMENT LEVEL(1)
--------------------------- -----------------------
June 30, 2001 $127,500,000
--------------------------- ---------------------
July 31, 2001 $125,000,000
--------------------------- ---------------------
August 31, 2001 $122,500,000
--------------------------- ---------------------
September 30, 2001 $120,000,000
--------------------------- ---------------------
September 30, 2002 $95,000,000
--------------------------- ---------------------
In addition, concurrently with the delivery of the
annual financial statements of the Borrower pursuant to Section 5.01(a)
(but in no event later than the date such financial statements are
required to be delivered pursuant to such Section, if they have not
been timely delivered) (each such date being a "Cash Flow Certificate
Delivery Date"), the Borrower shall certify to the Administrative Agent
the amount of Consolidated Excess Cash Flow for the Fiscal Year then
ended and the Commitments shall be reduced by an aggregate principal
amount equal to 75% of such Consolidated Excess Cash Flow for such
Fiscal Year, or to such higher amount as shall be equal to the
principal amount of the Loans outstanding on such date as a result of
the provisions of, and after giving effect to the prepayment described
in, the proviso contained in the first sentence of Section 2.10(a).
In addition, the aggregate amount of the Commitments
shall be permanently reduced by the amount of each prepayment made for
the account of the Banks pursuant to Section 2.10(c) through (k);
provided, however, that reductions in the Commitments as a result of
prepayments pursuant to Section 2.10(d) and (e) shall be made only as
and when the aggregate amount of such prepayments since the last
Commitment reduction under Section 2.10(d) and (e) exceeds $500,000.
----------
1 Prior to giving effect to prepayment sharing provisions of Section
2.10(a).
8
Each reduction pursuant to this Section 2.08 shall be applied to reduce
the Commitments of the several Lenders ratably. No optional reduction
of the Commitments pursuant to Section 2.09 shall reduce the amount of
any subsequent mandatory reduction pursuant to this Section 2.08(b).
8. Amendment to Section 2.10. Section 2.10 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the following
therefor:
Section 2.10 Mandatory Prepayments.
(a) On each date on which the
Commitments are reduced pursuant to Section 2.07 or Section
2.08(b), the Borrower shall repay or prepay such principal
amount of the outstanding Loans, if any (together with
interest accrued thereon and any amount due under Section
8.05(a)), as may be necessary so that after such payment the
aggregate unpaid principal amount of the Loans does not exceed
the aggregate amount of the Commitments as then reduced;
provided, however, that if on any Commitment Reduction Date or
Cash Flow Certificate Delivery Date the principal amount of
the outstanding Loans exceeds the amount of the new Commitment
level set forth for such Commitment Reduction Date in the
table contained in Section 2.08(b) or the amount to which the
Commitments otherwise would be reduced on the Cash Flow
Certificate Delivery Date by virtue of Section 2.08(b) (the
amount of such excess being the "Outstanding Excess"), then a
prepayment in the aggregate amount of the Outstanding Excess
shall be made ratably on the Loans and the Senior Notes in
accordance with paragraph (m) of this Section 2.10 and the
Commitments shall be reduced only by the amount of such
prepayment made on account of the Loans. All such prepayments
shall be applied first to the Syndicated Dollar Loan Notes and
then to the Swing Loan Note.
(b) If the Administrative Agent
determines at any time (either on its own initiative or upon
notice from any Bank) that the aggregate principal amount of
the Foreign Currency Loans outstanding (after converting each
Foreign Currency Loan to its Dollar Equivalent on the date of
calculation) at any time exceeds $25,000,000, then upon 5
Foreign Currency Business Days' written notice from the
Administrative Agent, the Borrower shall prepay an aggregate
principal amount of Foreign Currency Loans sufficient to bring
the aggregate of the Foreign Currency Loans outstanding within
an amount equal to $25,000,000. Nothing in the foregoing shall
require the Administrative Agent to make any such calculation
unless expressly requested to do so by the Required Banks.
(c) Upon receipt by the Borrower or any
Domestic Subsidiary of Net Proceeds of Asset Dispositions from
any Receivables Securitization Program, the Borrower shall
certify to the Administrative Agent the amount of Net Proceeds
of Asset Dispositions so received and the current amount of
Maximum Available Proceeds under such Receivables
Securitization Program and prepay the outstanding Loans and
Senior Notes (as provided in paragraph (m) below) in an
aggregate principal amount equal to 85% of such Net Proceeds
9
of Asset Dispositions, but including such Net Proceeds of
Asset Dispositions only to the extent they are derived from
sales of Receivables in an aggregate amount in excess of the
highest level of aggregate sales of Receivables for which Net
Proceeds of Asset Dispositions have previously been paid
pursuant to this paragraph (c).
(d) After the Second Amendment Effective
Date, each time during any Fiscal Year in which Net Proceeds
of Asset Dispositions in excess of $100,000 from any sale or
disposition of any Collateral (other than sales of Inventory
in the ordinary course of business or in connection with a
Receivables Securitization Program or Permitted Factoring
Arrangement), has been received by the Borrower or any
Domestic Subsidiary since the later of (x) the first day of
such Fiscal Year and (y) the date of the most recent
prepayment made during such Fiscal Year pursuant to this
Section 2.10(d), if any (each such later date being a
"Collateral Net Proceeds Aggregation Date"), within 3 Domestic
Business Days after such Collateral Net Proceeds Aggregation
Date, the Borrower shall certify to the Administrative Agent
the amount of Net Proceeds of Asset Dispositions so received
as of such Collateral Net Proceeds Aggregation Date and after
any prior Collateral Net Proceeds Aggregation Date during such
Fiscal Year, and prepay the outstanding Loans and Senior Notes
(as provided in paragraph (m) below) by an aggregate principal
amount equal to 100% of such Net Proceeds of Asset
Dispositions received as of such Collateral Net Proceeds
Aggregation Date and after any prior Collateral Net Proceeds
Aggregation Date during such Fiscal Year.
(e) After the Second Amendment Effective
Date, each time during any Fiscal Year in which Net Proceeds
of Asset Dispositions in excess of $100,000 from any sale or
disposition of any asset (other than Collateral, sales of
Inventory in the ordinary course of business or in connection
with a Receivables Securitization Program or Permitted
Factoring Arrangement), has been received by the Borrower or
any Domestic Subsidiary since the later of (x) the first day
of such Fiscal Year and (y) the date of the most recent
prepayment made during such Fiscal Year pursuant to this
Section 2.10(e), if any (each such later date being a
"Non-Collateral Net Proceeds Aggregation Date"), within 3
Domestic Business Days after such Non-Collateral Net Proceeds
Aggregation Date, the Borrower shall certify to the
Administrative Agent the amount of Net Proceeds of Asset
Dispositions so received as of such Non-Collateral Net
Proceeds Aggregation Date and after any prior Non-Collateral
Net Proceeds Aggregation Date during such Fiscal Year, and
prepay the outstanding Loans and Senior Notes (as provided in
paragraph (m) below) by an aggregate principal amount equal to
75% of such Net Proceeds of Asset Dispositions received as of
such Non-Collateral Net Proceeds Aggregation Date and after
any prior Non-Collateral Net Proceeds Aggregation Date during
such Fiscal Year.
(f) Except as expressly provided in the
Morelos Assets Sale Letter, after the Second Amendment
Effective Date, within 5 Domestic Business Days after any
Foreign Subsidiary receives Net Proceeds of Asset Dispositions
from any Foreign Sale-Leaseback Transaction, the Borrower
shall certify to the Administrative Agent the amount of Net
10
Proceeds of Asset Dispositions so received and prepay the
outstanding Loans and Senior Notes (as provided in paragraph
(m) below) in an aggregate principal amount equal to 100% of
the amount of such Net Proceeds of Asset Dispositions.
(g) After the Second Amendment Effective
Date, within 3 Domestic Business Days after the Borrower or
any Domestic Subsidiary receives Net Proceeds of Debt in
excess of $250,000, the Borrower shall certify to the
Administrative Agent the amount of Net Proceeds of Debt so
received and prepay the outstanding Loans and Senior Notes (as
provided in paragraph (m) below) in an aggregate principal
amount equal to 100% of the amount by which such Net Proceeds
of Debt exceeds an aggregate amount of Net Proceeds of Debt so
received since the Second Amendment Effective Date of
$250,000.
(h) After the Second Amendment Effective
Date, within 5 Domestic Business Days after any Foreign
Subsidiary receives Net Proceeds of Debt or incurs any
obligations under a Foreign Capital Lease (in each case other
than Debt permitted by Section 5.24(A)), the Borrower shall
certify to the Administrative Agent the amount of Net Proceeds
of Debt pertaining thereto and prepay the outstanding Loans
and Senior Notes (as provided in paragraph (m) below) in an
aggregate principal amount equal to 75% of the amount of such
Net Proceeds of Debt, or, in the case of a Foreign Capital
Lease, the present value (using a discount rate equal to the
implicit interest rate of such Foreign Capital Lease) of the
aggregate amount of basic rent (excluding taxes, insurance and
similar other charges) required to be paid during the term of
such Foreign Capital Lease (excluding any renewal term, but
including any payment required to be made at the end of the
term as a result of failure to renew or purchase the
property).
(i) After the Second Amendment Effective
Date, within 3 Domestic Business Days after the Borrower or
any Foreign Subsidiary receives any repayment of Investments
made as permitted by Section 5.15(xii), (xiii) or (xiv), the
Borrower shall certify to the Administrative Agent the amount
of Net Proceeds of Loan Repayment so received and prepay the
outstanding Loans and Senior Notes (as provided in paragraph
(m) below) in an aggregate principal amount equal to 100% of
such Net Proceeds of Loan Repayment.
(j) After the Second Amendment Effective
Date, within 3 Domestic Business Days after the Borrower or
any Consolidated Subsidiary receives any Net Proceeds of
Capital Stock (excluding Net Proceeds of Capital Stock issued
in connection with the exercise of any management or employee
stock option, so long as the Borrower or such Consolidated
Subsidiary does not incur any net cash cost in connection with
the exercise of such option), the Borrower shall certify to
the Administrative Agent the amount of Net Proceeds of Capital
Stock pertaining thereto and prepay the outstanding Loans and
Senior Notes (as provided in paragraph (m) below) in an
aggregate principal amount equal to 100% of the amount of such
Net Proceeds of Capital Stock.
11
(k) Upon receipt by the Borrower or any
Domestic Subsidiary of Net Proceeds of Special Transaction,
the Borrower shall certify to the Administrative Agent the
amount of Net Proceeds of Special Transaction so received and
prepay the outstanding Loans and Senior Notes (as provided in
paragraph (m) below) in an aggregate principal amount equal to
100% of such Net Proceeds of Special Transaction.
(l) After the Second Amendment Effective
Date, on each date on which the aggregate amount of Cash
Deposits exceeds the Cash Deposit Limit, the Borrower shall
prepay the Loans by an amount equal to the excess.
(m) The amount of all prepayments
pursuant to paragraphs (c) through (k), inclusive, shall be
made ratably (based on the aggregate outstanding principal
amount of Loans and under the Senior Notes) to (x) the
Administrative Agent, for the ratable benefit of the Banks and
(y) ratably to the Senior Note Holders, but subject to the
exercise by any Senior Note Holder of its contractual right to
decline any mandatory prepayments. In the event any Senior
Note Holder declines any such prepayment, the prepayments
shall be made ratably based on the aggregate outstanding
principal amount of Loans and under the Senior Notes held by
Senior Note Holders who have not declined such prepayment. The
Commitments shall be ratably reduced by the amount of all such
prepayments received by the Agent pursuant to paragraphs (c)
through (k), inclusive.
(n) Each such payment or prepayment
pursuant to this Section 2.10 shall be applied ratably to the
Loans of the Banks outstanding on the date of payment or
prepayment in the following order of priority:(i) first, to
Syndicated Loans which are Base Rate Loans; (ii) secondly, to
Swing Loans which are Base Rate Loans; (iii) thirdly, to
Euro-Dollar Loans; (iv) fourthly, to Syndicated Loans which
are Foreign Currency Loans, and (v) lastly, to Swing Loans
which are Foreign Currency Loans.
9. Amendment to Section 5.01. Section 5.01 of the Credit Agreement
hereby is amended by deleting the word "and" at the end of paragraph (i)
thereof, by deleting paragraphs (a), (b), (c) and (j) thereof, and by adding the
following as new paragraphs (a), (b),(c), (j), (k) and (l):
(a) as soon as available and in any
event within 90 days after the end of each Fiscal Year, a
consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries as of the end of such Fiscal Year
and the related consolidated statements of income,
shareholders' equity and cash flows for such Fiscal Year,
setting forth in each case in comparative form the figures for
the previous Fiscal Year, all certified by Xxxxxx Xxxxxxxx LLP
or other independent public accountants of nationally
recognized standing, with such certification to be
unqualified, except for immaterial exceptions not giving rise
to qualification, together with statements of income, balance
sheets and statements of cash flow for the Fiscal Year then
ended on a consolidating basis by business unit, with
sufficient balance sheet detail to enable an identification of
domestic and foreign assets and liabilities, such
12
consolidating statements to be certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP and
consistency by the chief financial officer or the chief
accounting officer of the Borrower;
(b) as soon as available and in any
event within 45 days after the end of each of the first 3
Fiscal Quarters of each Fiscal Year, a consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries as of
the end of such Fiscal Quarter and the related statement of
income and statement of cash flows for such Fiscal Quarter and
for the portion of the Fiscal Year ended at the end of such
Fiscal Quarter, together with statements of income, balance
sheets and statements of cash flow on a consolidating basis by
business unit, with sufficient balance sheet detail to enable
an identification of domestic and foreign assets and
liabilities, in each case in comparative form the figures for
the corresponding Fiscal Quarter and the corresponding portion
of the previous Fiscal Year, all certified (subject to normal
year-end adjustments) as to fairness of presentation, GAAP and
consistency by the chief financial officer or the chief
accounting officer of the Borrower,
(c) simultaneously with the delivery of
each set of financial statements referred to in paragraphs (a)
and (b) above, commencing with the second Fiscal Quarter of
the 2001 Fiscal Year, a certificate, substantially in the form
of Exhibit F (a "Compliance Certificate"), of the chief
financial officer, the chief accounting officer or the
treasurer of the Borrower (i) setting forth in reasonable
detail the calculations required to establish whether the
Borrower was in compliance with the requirements of Section
5.05, 5.15, 5.16, 5.17, 5.19, 5.20, 5.23, 5.24, 5.27, 5.28
(when applicable) and 5.29 on the date of such financial
statements and (ii) stating whether any Default exists on the
date of such certificate and, if any Default then exists,
setting forth the details thereof and the action which the
Borrower is taking or proposes to take with respect thereto;
(j) as soon as available and in any
event within 30 days after the end of each Fiscal Month, a
consolidated and consolidating statement of income by business
unit for the month then ended and for the portion of the year
then ended;
(k) as soon as available and in any
event within 30 days after the end of each Fiscal Month, a
statement of the chief financial officer, the chief accounting
officer or the treasurer of the Borrower setting forth in
reasonable detail satisfactory to the Administrative Agent the
availability for the month then ended under its Permitted
Factoring Arrangements; and
(l) from time to time such additional
information regarding the financial position or business of
the Borrower and its Subsidiaries as the Administrative Agent,
at the request of any Bank, may reasonably request.
13
10. Amendment to Section 5.02. Section 5.02 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the following
therefor:
Section 5.02 Inspection of Property,
Books and Records. The Borrower will (i) keep, and cause each
Subsidiary to keep, proper books of record and account in
which full, true and correct entries in conformity with GAAP
shall be made of all dealings and transactions in relation to
its business and activities; and (ii) subject to Section 9.09,
permit, and cause each Subsidiary to permit, representatives
of the Administrative Agent or any Bank (at the Borrower's
expense no more than 4 times per year if by representatives of
the Administrative Agent, at the expense of all of the Banks
if by the Administrative Agent and done more frequently than 4
times per year at the request of the Required Banks, and at
the expense of the inspecting Bank if by representatives of
any Bank), in each case prior to the occurrence of a Default
and at the Borrower's expense after the occurrence of a
Default to visit and inspect any of their respective
properties, to examine and make abstracts from any of their
respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers,
employees and independent public accountants, and the Borrower
agrees to cooperate and assist in such visits and inspections,
in each case upon reasonable notice and at reasonable times;
provided, that as to inspections of books and records by any
Bank (but not as to visits with officers, employees and
independent public accountants), any such inspections prior to
the occurrence of a Default shall be coordinated through the
Administrative Agent, and shall be limited to no more than one
such inspection for all Banks in any Fiscal Quarter.
11. Amendment to Section 5.05(c). Section 5.05(c) of the Credit
Agreement hereby is amended by deleting it in its entirety and substituting the
following therefor:
(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, subject to Sections 2.10, 5.21(b) and
5.22(b), if applicable, the following:
(1) any Foreign Sale-Leaseback;
(2) any sale, lease or other
transfer included in the Special
Transaction Investment, subject to the
provisions of Section 5.15(xxiii);
(3) subject to any prepayment
required by Section 2.10, the Borrower
or any Subsidiary may sell and transfer
any asset, (x) as to assets having a
book value less than $3,000,000, so long
as the aggregate cash proceeds of such
sale are not less than such book value
and (y) as to all other assets, so long
as the Required Secured Parties have
consented to such sale (and as to any
Collateral for which the Collateral
Agent has obtained an appraisal pursuant
14
to this Agreement, the Required Secured
Parties shall be deemed to have so
consented if the aggregate cash proceeds
of such sale are equal to or greater
than the appraised amount therefor);
(4) the Borrower may enter into
an arrangement to sell Receivables
pursuant to a Receivables Securitization
Program if, as of the end of each of the
2 immediately preceding Fiscal Quarters
prior to entering into such arrangement,
the Leverage Ratio has been equal to or
less than 2.50 to 1.00
If any assets permitted to be sold under
this Section 5.05(c) constitute
Collateral, the Collateral Agent shall
release its Lien and security interest
therein, subject, except as to the
Special Transaction Investment, to its
receipt of the Net Proceeds of Asset
Disposition with respect thereto.
12. Amendment to Section 5.15. Section 5.15 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the following
therefor:
Section 5.15 Investments. Neither the Borrower nor
any of its Subsidiaries shall make Investments in any Person except
(i) existing Investments described in
Schedule 5.15 and Debt permitted by Section 5.24,
(ii) loans or advances to employees not
exceeding $1,000,000 in the aggregate principal amount
outstanding at any time, in each case made in the ordinary
course of business and consistent with practices existing on
the Closing Date;
(iii) deposits required by landlords,
government agencies or public utilities;
(iv) Investments in direct obligations
of the United States Government maturing within one year,
(v) Investments in certificates of
deposit issued by a commercial bank whose credit is
satisfactory to the Administrative Agent,
(vi) Investments in commercial paper
rated A1 or the equivalent thereof by Standard & Poor's Rating
Group, a division of XxXxxx-Xxxx, Inc. 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,
(vii) Investments in 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
15
or the equivalent thereof by Standard & Poor's Rating Group
and Aa or the equivalent thereof by Xxxxx'x Investors Service,
Inc.,
(viii) Investments in the Borrower or
any Guarantor,
(ix) loans and advances to Subsidiaries
which are in existence on the Second Amendment Effective Date
and are evidenced by Pledged Notes and are reflected on
Schedule 5.15,
(x) Investments in a Receivables
Subsidiary pursuant to a Receivables Securitization Program,
(xi) conversion of debt in existence on
the Second Amendment Effective Date which arose from loans to
American Textil S.A. de C.V. and Xxxxx Fabrik, LLC to equity,
(xii) total Investments made in the
infrastructure project in Tamaulipas, Mexico, in an aggregate
amount not exceeding $12,500,000,
(xiii) total Investments made for other
capital expenditures in Tamaulipas, Mexico for the completion
of dyeing, finishing and knitting and related facilities in an
aggregate amount not exceeding $54,500,000.
(xiv) loans made after the First
Amendment Effective Date for working capital to be used in
Tamaulipas, Mexico in an aggregate amount not exceeding
$16,000,000,
16
(xv) transfer of equipment in an
aggregate amount not exceeding $3,000,000 from the United
States to Mexico,
(xvi) Investments made after the First
Amendment Effective Date in Brazil in an aggregate amount not
exceeding $2,000,000,
(xvii) Investments made after the First
Amendment Effective Date in the Czech Republic in an aggregate
amount not exceeding $1,500,000, consisting of up to $800,000
in transfers of United Kingdom equipment to the Czech Republic
and up to $700,000 in working capital loans from cash
available in the United Kingdom,
(xviii) Investments made after the First
Amendment Effective Date in American Textil S.A. de C.V. in an
aggregate amount not exceeding $1,000,000,
(xix) Investments made after the First
Amendment Effective Date in Xxxxx Fabrik, LLC in an aggregate
amount not exceeding $1,000,000 of which no greater than
$750,000 is a cash Investment (except that if Xxxxx Fabrik,
LLC becomes a Guarantor hereunder, clause (viii) above shall
be applicable and this clause shall have no further force or
effect),
(xx) in addition to other Investments
permitted by this Section, other Investments made after the
First Amendment Effective Date in Mexico in an aggregate
amount not exceeding $1,000,000,
(xxi) other Investments made in Foreign
Subsidiaries created after the First Amendment Effective Date,
so long as the amount of such Investment in any such new
Foreign Subsidiary does not exceed the statutory minimum
amount required by applicable law in order to create such new
Foreign Subsidiary, and the aggregate amount of all such
Investments does not exceed $100,000 and
(xxii) Investments in Grupo Ambar S.A.
de C.V. necessary to acquire the 5% of the common stock
therein not owned by the Borrower in the event the owner of
such 5% interest exercises a put right or the Borrower
exercises a call right pertaining thereto, so long as such
Investments do not involve the payment of cash or cash
equivalents as part of the purchase price or consideration
paid to such owner (other than pursuant to a subordinated loan
arrangement in which such loan is fully subordinated in all
respects to the Bank Obligations, with no interest or
principal being payable thereunder until all Bank Obligations
have been repaid in full and all Commitments terminated);
(xxiii) Investments in the Special
Transaction Entity under terms acceptable to the Banks
including, but not limited to, the following: (a) final
operating, partnership or other governing agreement pertaining
to the Special Transaction Entity and capital structure
thereof acceptable to the Administrative Agent and Required
Banks, (b) assets contributed to the Special Transaction
17
Entity are limited to equipment and other tangible personal
property acceptable to the Secured Parties and generally
described in the Special Transaction Letter, and cash of up to
$5,000,000 spent to ready the relevant plant and fund working
capital within the first 3 months of the Special Transaction
Investment startup, (c) the Borrower or such Borrower's
Subsidiary, as the case may be, pledges its ownership in the
Special Transaction Entity and any rights to any put agreement
which the Borrower, or the Borrower's Subsidiary as the case
may be, has pertaining to the Special Transaction Investment
to the Collateral Agent as Collateral for the benefit of the
Banks, (d) the Borrower, or the Borrower's Subsidiary as the
case may be, shall not permit the Special Transaction Entity
to pledge its assets to a third party, (e) the Borrower shall
not, or permit its Subsidiaries to, make any additional
Investment in the Special Transaction Entity,
provided, that after giving effect to the making of any
Investments permitted by clauses (xi) through (xxi) and clause
(xxiii) of this Section, if there are any Loans outstanding at
that time, no Default shall be in existence or be created
thereby.
13. Amendment to Section 5.16. Section 5.16 of the Credit Agreement
hereby is amended by adding at the end thereof a new paragraph (k), as follows:
(k) Domestic Purchase Money Liens securing Domestic
Purchase Money Debt.
14. Amendment to Section 5.17. Section 5.17 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the following
therefor:
Section 5.17 Fixed Charge Coverage Ratio. As of the end of each Fiscal
Quarter, the Fixed Charge Coverage Ratio for the Fiscal Quarter just
ended shall at no time be less than the ratio set forth below as of the
end of the Fiscal Quarters set forth below:
----------------------------------------- ----------------------------------
Fiscal Quarter Minimum Fixed Charge Coverage
Ratio
----------------------------------------- ----------------------------------
2nd of 2001 Fiscal Year Not tested
----------------------------------------- ----------------------------------
3rd of 2001 Fiscal Year 0.80 to 1.00
----------------------------------------- ----------------------------------
4th of 2001 Fiscal Year 0.90 to 1.00
----------------------------------------- ----------------------------------
1st of 2002 Fiscal Year 1.25 to 1.00
----------------------------------------- ----------------------------------
2nd of 2002 Fiscal Year 1.30 to 1.00
----------------------------------------- ----------------------------------
3rd of 2002 Fiscal Year 1.35 to 1.00
----------------------------------------- ----------------------------------
4th of 2002 Fiscal Year and thereafter 1.35 to 1.00
----------------------------------------- ----------------------------------
15. Amendment to Section 5.19. Section 5.19 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the following
therefor:
Section 5.19 Leverage Ratio. The Leverage Ratio for
the Fiscal Quarter just ended and the immediately preceding 3 Fiscal
Quarters shall at all times be less than the ratio set forth below as
of the end of the Fiscal Quarters set forth below:
18
----------------------------------------- ----------------------------------
Fiscal Quarter Leverage Ratio
----------------------------------------- ----------------------------------
2nd of 2001 Fiscal Year 7.00 to 1.00
----------------------------------------- ----------------------------------
3rd of 2001 Fiscal Year 7.25 to 1.00
----------------------------------------- ----------------------------------
4th of 2001 Fiscal Year 6.00 to 1.00
----------------------------------------- ----------------------------------
1st of 2002 Fiscal Year 5.00 to 1.00
----------------------------------------- ----------------------------------
2nd of 2002 Fiscal Year 4.00 to 1.00
----------------------------------------- ----------------------------------
3rd of 2002 Fiscal Year 3.50 to 1.00
----------------------------------------- ----------------------------------
4th of 2002 Fiscal Year and thereafter 3.00 to 1.00
----------------------------------------- ----------------------------------
16. Amendment to Section 5.20. Section 5.20 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the following
therefor:
Section 5.20 Minimum Consolidated Tangible Net Worth.
On and after the Second Amendment Effective Date, Consolidated Tangible
Net Worth shall at no times be less than $200,000,000 plus the sum of
(i) 50% of the cumulative Reported Net Income of the Borrower and its
Consolidated Subsidiaries during any period after the Fiscal Quarter
ended 12/31/00 (taken as one accounting period), calculated quarterly
at the end of each Fiscal Quarter but excluding from such calculations
of Reported Net Income for purposes of this clause (i), any Fiscal
Quarter in which Reported Net Income of the Borrower and its
Consolidated Subsidiaries is negative, (ii) 100% of the cumulative
Reported Net Proceeds of Capital Stock received during any period after
the Fiscal Quarter ended 12/31/00, calculated quarterly at the end of
each Fiscal Quarter, and (iii) 100% of any equity resulting from the
conversions of any Debt of the Borrower or its Consolidated
Subsidiaries.
17. Amendment to Section 5.23. Section 5.23 of the Credit Agreement
hereby is amended by deleting it in its entirety and substituting the following
therefor:
Section 5.23 Factoring Arrangements.
The Borrower and its Subsidiaries shall not have any
factoring arrangements, except those which comply with the provisions
of this Section 5.23 ("Permitted Factoring Arrangements"): (i) the
aggregate face amount of factored accounts receivable outstanding at
any time shall not exceed $40,000,000; (ii) any Factor Advances under a
Permitted Factoring Arrangement shall be included in the computation of
Debt for purposes of Section 5.24(B)(viii) and may be secured by (x)
accounts receivable (and other receivables, including instruments,
chattel paper, documents and general intangibles, and returned and
repossessed goods related thereto) which are not sold and have not been
identified for sale to such factor ("Non-Factored Accounts"), so long
as such factor has expressly subordinated its Lien on such Non-Factored
Accounts to the Lien of the Collateral Agent, pursuant to a
subordination provision acceptable to the Administrative Agent, which
subordinated Liens shall be included in the computation of Liens
19
permitted by Section 5.16(j), and (y) accounts receivable (and other
receivables, including instruments, chattel paper, documents and
general intangibles, and returned and repossessed goods related
thereto) which have been identified for sale to such factor pursuant to
the factoring arrangement but which have not yet been sold ("Identified
Accounts"), which Liens shall be included in the computation of Liens
permitted by Section 5.16(j) until they are actually sold pursuant to
such factoring arrangement, but need not be subordinated pursuant to
the foregoing (and any Non-Factored Accounts which become Identified
Accounts shall no longer be subject to such subordination provisions).
Upon the actual sale of Identified Accounts pursuant to such factoring
arrangement (such sold accounts being "Factored Accounts"), the Lien of
the Collateral Agent shall be automatically released pursuant to the
Security Agreement.
18. Amendment to Section 5.24. Section 5.24 hereby is amended by
deleting it in its entirety and substituting the following therefor:
Section 5.24. Additional Debt; Debt of Receivables
Subsidiary. The Borrower shall not incur or permit to exist, or permit
any Consolidated Subsidiary other than the Receivables Subsidiary to
incur or permit to exist, any Debt other than:
(A) Debt under credit facilities in Mexico in the
aggregate amount not exceeding the Dollar equivalent of 66,000,000
Mexican pesos, calculated based on the exchange rate as of the Closing
Date, debt under credit facilities in the United Kingdom in the
aggregate amount not exceeding the Dollar equivalent of 5,000,000
British pounds sterling, calculated based on the exchange rate as of
the Closing Date, term facilities in Portugal in the aggregate amount
not exceeding the Dollar equivalent of 900,000,000 Portuguese escudos,
calculated based on the exchange rate as of the Closing Date; and
(B) Subject to Section 2.10(h), (i) Debt in existence
on the Closing Date (including unsecured Debt in the amount of
$1,500,000 of Xxxxx Fabrik LLC, a limited liability company in which
the Borrower owns 50% on the First Amendment Effective Date, but in
which it may thereafter acquire additional interests), and extensions,
renewals, refinancings or refundings thereof (provided that the amount
of such Debt is not increased); (ii) the Debt under this Agreement;
(iii) Debt permitted to be secured by Liens permitted by Section 5.16;
(iv) Debt of the types described in clause (vii) of the definition of
Debt which is incurred in the ordinary course of business in connection
with the sale or purchase of goods or to assure performance of an
obligation to a utility or a governmental entity or a worker's
compensation obligation; (v) Receivables Program Obligations; (vi) Debt
permitted by Section 5.15; (vii) obligations to reimburse any bank or
other Person in respect of amounts paid or to be paid under any
irrevocable standby letter of credit, or letter of credit issued in
support of trade payables arising from the import of goods, in an
aggregate amount at any time for all such standby and trade letters of
credit not exceeding $5,000,000, (viii) Foreign Capital Leases and
other Permitted Foreign Debt and (ix) Domestic Purchase Money Debt up
to $40,000,000. The Borrower shall not permit the Receivables
20
Subsidiary to incur any Debt or other liabilities other than in
connection with the Receivables Securitization Program.
19. Amendment to Section 5.25. Section 5.25 of the Credit Agreement
hereby is amended by adding at the end thereof new paragraphs (c) and (d), as
follows:
(c) attached as Schedule 5.25(c) is a description of
certain life insurance policies owned by the Borrower (but excluding
life insurance policies owned by Xxxxxxxx Xxxxx, Inc. Management
Compensation Trust) for its employees identifying each insurer and
showing, for each employee covered by a policy issued by such insurer,
the insured (employee) name, the policy number, the cash surrender
value and the date issued. Within 2 Domestic Business Days after
receipt of a Life Insurance Assignment for an insurer, the Borrower
will execute and return to the Collateral Agent such Life Insurance
Assignment in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, to secure the Secured Obligations, and thereafter
cooperate with the Agent in obtaining the prompt completion and
execution by such insurer of the Acknowledgment of Receipt and Insurer
Questionnaire at the end thereof.
(d) At any time after the Second Amendment Effective
Date, the Administrative Agent, acting at the direction of the Required
Banks, may require the UK Subsidiaries to execute and deliver UK
Subsidiary Collateral Documents, in form and substance reasonably
satisfactory to the Collateral Agent, granting to the Collateral Agent,
for the ratable benefit of the Secured Parties, to secure the Secured
Obligations, a fixed or floating charge on all UK Subsidiary
Collateral, together with such officer's certificates and
organizational documents as the Collateral Agent may reasonably request
and opinions of counsel pertaining to the foregoing reasonably
acceptable to the Collateral Agent; provided, however, that the
Borrower has indicated that consent of a lender to one of the UK
Subsidiaries (the "UK Lender") to the granting of such a fixed and
floating charge is required, and the foregoing agreement is subject to
the obtaining of such consent of the UK Lender; provided, further, that
the Borrower hereby agrees that it will use its best efforts to obtain
such consent of the UK Lender within 45 days after the Second Amendment
Effective Date and, in the event it is unable to obtain such consent of
the UK Lender within such period despite the exercise of its best
efforts, it will provide to the Collateral Agent and each of the
Secured Parties a written explanation of the efforts expended by it and
the response of the UK Lender. Such UK Subsidiary Collateral Documents
shall grant a fixed charge over the UK Subsidiary Collateral, to the
extent the "control" required by applicable law can reasonably be
established with respect thereto, and a floating charge over all other
UK Subsidiary Collateral.
20. Section 5.27. Section 5.27 of the Credit Agreement hereby is
deleted in its entirety and substituting the following therefor:
Section 5.27 Capital Expenditures.
21
(a) Capital Expenditures for the Fiscal Quarter just
ended and the 3 immediately preceding Fiscal Quarters shall at no time
be greater than the sum of (x) the applicable amount set forth below as
of the end of the Fiscal Quarters set forth below, less (y) the cash
portion of the UK Restructuring Charges taken during such period:
----------------------------------------- ----------------------------------
Fiscal Quarter Maximum Capital Expenditures
----------------------------------------- ----------------------------------
2nd of 2001 Fiscal Year $71,000,000
----------------------------------------- ----------------------------------
3rd of 2001 Fiscal Year $73,000,000
----------------------------------------- ----------------------------------
4th of 2001 Fiscal Year $63,000,000
----------------------------------------- ----------------------------------
1st of 2002 Fiscal Year $61,000,000
----------------------------------------- ----------------------------------
2nd of 2002 Fiscal Year $53,000,000
----------------------------------------- ----------------------------------
3rd of 2002 Fiscal Year $52,000,000
----------------------------------------- ----------------------------------
4th of 2002 Fiscal Year and thereafter $50,000,000
----------------------------------------- ----------------------------------
(b) If, at the end of the first Fiscal Quarter of the
2002 Fiscal Year or at the end of any Fiscal Quarter thereafter, the
Fixed Charge Coverage Ratio for the Fiscal Quarter just ended is less
than 1.25 to 1.00, the Borrower shall not, or permit its Consolidated
Subsidiaries to, commit to future Capital Expenditures greater than 50%
of the maximum Capital Expenditures for the next 4 Fiscal Quarters as
set forth in the table above.
21. New Section 5.29. A new Section 5.29 hereby is added to the Credit
Agreement as follows:
Section 5.29 Minimum Consolidated Total EBITDA. Consolidated Total
EBITDA for the Fiscal Quarter just ended and the 3 immediately
preceding Fiscal Quarters shall be at least the amounts set forth below
as of the end of the Fiscal Quarters set forth below:
----------------------------------------- ----------------------------------
Fiscal Quarter Minimum EBITDA
----------------------------------------- ----------------------------------
2nd of 2001 Fiscal Year $43,000,000
----------------------------------------- ----------------------------------
3rd of 2001 Fiscal Year $42,000,000
----------------------------------------- ----------------------------------
4th of 2001 Fiscal Year $50,000,000
----------------------------------------- ----------------------------------
1st of 2002 Fiscal Year $60,000,000
----------------------------------------- ----------------------------------
2nd of 2002 Fiscal Year $78,000,000
----------------------------------------- ----------------------------------
3rd of 2002 Fiscal Year $88,000,000
----------------------------------------- ----------------------------------
4th of 2002 Fiscal Year and thereafter $95,000,000
----------------------------------------- ----------------------------------
22. Amendment to Section 6.01. Section 6.01 hereby is amended by
deleting it in its entirety and substituting the following therefor:
Section 6.01 Events of Default. If one or more of the
following events ("Events of Default") shall have occurred and be
continuing:
22
(a) the Borrower shall fail to pay when due any
principal of any Loan or shall fail to pay any interest on any
Loan within 5 Domestic Business Days after such interest shall
become due, or shall fail to pay any fee or other amount
payable hereunder within 5 Domestic Business Days after such
fee or other amount becomes due; or
(b) the Borrower shall fail to observe or perform any
covenant contained in Sections 5.02(ii), 5.03 to 5.06,
inclusive, or Sections 5.15 through 5.20, inclusive, or
Section 5.27 through 5.29, inclusive; or
(c) the Borrower shall fail to observe or perform any
covenant or agreement contained or incorporated by reference
in this Agreement (other than those covered by paragraph (a)
or (b) above) or any other Loan Document and such failure
shall not have been cured within 30 days (or, in the case of
the covenant contained in Section 5.01(e), 5 Domestic Business
Days) after the earlier to occur of (i) written notice thereof
has been given to the Borrower by the Administrative Agent at
the request of any Bank or (ii) a responsible officer of the
Borrower otherwise becomes aware of any such failure; or
(d) any representation, warranty, certification or
statement made by the Borrower in Article IV of this Agreement
or in any certificate, financial statement or other document
delivered pursuant to this Agreement shall prove to have been
incorrect or misleading in any material respect when made (or
deemed made); or
(e) the Borrower or any Subsidiary shall fail to make
any payment in respect of Debt in an aggregate amount
outstanding in excess of $5,000,000 (other than the Notes)
when due or within any applicable grace period; or
(f) any event or condition shall occur which results
in the acceleration of the maturity of Debt of the Borrower or
any Subsidiary in an aggregate amount outstanding in excess of
$5,000,000 or the termination (but not partial reduction) of
the commitments with respect to any such Debt (including,
without limitation, any required mandatory prepayment or "put"
of all such Debt to the Borrower or any Subsidiary, other than
those required by Section 2.10, Section 8.3 of the Note
Purchase Agreements and Section 23 of the Intercreditor
Agreement, and other than any other required prepayment of
Debt which does not require prepayment in full of such Debt)
or enables (or, with the giving of notice or lapse of time or
both, would enable) the holders of such Debt or Commitment or
any Person acting on such holders' behalf to accelerate the
maturity thereof or terminate (but not partially reduce) any
such commitment (including, without limitation, any required
mandatory prepayment or "put" of all such Debt to the Borrower
or any Subsidiary, other than those required by Section 2.10,
Section 8.3 of the Note Purchase Agreements and Section 23 of
the Intercreditor Agreement, and other than any other required
prepayment of Debt which does not require prepayment in full
of such Debt); or
(g) the Borrower or any Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its
debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
23
official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail
generally, or shall admit in writing its inability, to pay its
debts as they become due, or shall take any corporate action
to authorize any of the foregoing; or
(h) an involuntary case or other proceeding shall be
commenced against the Borrower or any Subsidiary seeking
liquidation, reorganization or other relief with respect to it
or its debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or an order
for relief shall be entered against the Borrower or any
Subsidiary under the federal bankruptcy laws as now or
hereafter in effect; or
(i) the Borrower or any member of the Controlled
Group shall fail to pay when due any material amount which it
shall have become liable to pay to the PBGC or to a Plan under
Title IV of ERISA; or notice of intent to terminate a Plan or
Plans shall be filed under Title IV of ERISA by the Borrower,
any member of the Controlled Group, any plan administrator or
any combination of the foregoing which results in a liability
of the Borrower in an aggregate amount of $3,000,000 or more;
or the PBGC shall institute proceedings under Title IV of
ERISA to terminate or to cause a trustee to be appointed to
administer any such Plan or Plans or a proceeding shall be
instituted by a fiduciary of any such Plan or Plans to enforce
Section 515 or 4219(c)(5) of ERISA and such proceeding shall
not have been dismissed within 30 days thereafter; or a
condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or
Plans must be terminated which results in a liability of the
Borrower in an aggregate amount of $3,000,000 or more; or
(j) one or more judgments or orders for the payment
of money in an aggregate amount in excess of $1,000,000 shall
be rendered against the Borrower or any Subsidiary and such
judgment or order shall continue unsatisfied and unstayed for
a period of 30 days; or
(k) a federal tax lien shall be filed against the
Borrower or any Subsidiary under Section 6323 of the Code or a
lien of the PBGC shall be filed against the Borrower or any
Subsidiary under Section 4068 of ERISA and in either case such
lien shall remain undischarged for a period of 25 days after
the date of filing; or
(l) (i) any Person or two or more Persons acting in
concert shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934) of 20%
or more of the outstanding shares of the voting stock of the
Borrower; or (ii) as of any date a majority of the Board of
Directors of the Borrower consists of individuals who were not
either (A) directors of the Borrower as of the corresponding
date of the previous year, (B) selected or nominated to become
24
directors by the Board of Directors of the Borrower of which a
majority consisted of individuals described in clause (A), or
(C) selected or nominated to become directors by the Board of
Directors of the Borrower of which a majority consisted of
individuals described in clause (A) and individuals described
in clause (B);
then, and in every such event, (i) the Administrative
Agent shall, if requested by the Required Banks, by notice to
the Borrower terminate the Commitments and they (and the
commitment of Wachovia to make any Swing Loan) shall thereupon
terminate, (ii) the Administrative Agent shall, if requested
by the Required Banks, by notice to the Borrower declare the
Notes (together with accrued interest thereon), and all other
amounts payable hereunder and under the other Loan Documents,
to be, and the Notes, including the Swing Loan Note (together
with accrued interest thereon), and all other amounts payable
hereunder and under the other Loan Documents shall thereupon
become, immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower together with accrued and unpaid
interest which, if elected by the Required Banks pursuant to
Section 2.05(f), shall be at the Default Rate accruing on the
principal amount thereof from and after the date of such Event
of Default; provided that if any Event of Default specified in
paragraph (g) or (h) above occurs with respect to the
Borrower, without any notice to the Borrower or any other act
by the Administrative Agent or the Banks, the Commitments
shall thereupon terminate and the Notes (together with accrued
interest thereon) and all other amounts payable hereunder and
under the other Loan Documents shall automatically and without
notice become immediately due and payable without presentment,
demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower together with accrued and unpaid
interest thereon, which, if elected by the Required Banks
pursuant to Section 2.05(f), shall be at the Default Rate
accruing on the principal amount thereof from and after the
date of such Event of Default and (iii) the Collateral Agent
shall take such actions as are directed by the "Required
Secured Parties" (as defined in the Intercreditor Agreement)
pursuant to Section 11 of the Intercreditor Agreement, and
apply any proceeds of the Collateral as provided in Section 12
of the Intercreditor Agreement. Notwithstanding the foregoing,
the Administrative Agent shall have available to it all other
remedies at law or equity, and shall exercise any one or all
of them at the request of the Required Banks.
23. Replacement of Exhibit F. Exhibit F to the Credit Agreement hereby
is deleted, and Exhibit F attached hereto is substituted therefor.
24. New Exhibit R. Exhibit R attached hereto hereby is added to the
Credit Agreement as Exhibit R, following Exhibit Q.
25. Field Audit. The Collateral Agent shall conduct a field examination
of the Borrower's books and records, at the Borrower's expense, within 60 days
of Second Amendment Effective Date.
26. Engagement of Financial Consultant. The Administrative Agent and
the Banks shall engage a financial consultant acceptable to the Administrative
Agent and the Required Banks within 45 days after the Second Amendment Effective
25
Date, and the Borrower hereby agrees to pay the reasonable fees and expenses of
such financial consultant and to execute such indemnification agreement as such
financial consultant may reasonably request.
27. Restatement of Representations and Warranties. Other than the
Second Quarter FY 2001 Replaced Financial Covenant Defaults and as disclosed in
writing to the Administrative Agent and the Banks, since November 6, 2000, there
has been no event, act, condition or occurrence having a Material Adverse
Effect, except to the extent, if any, that any event, act, condition or
occurrence disclosed in public filings with the Securities and Exchange
Commission prior to the Second Amendment Effective Date could have a Material
Adverse Effect. The Borrower hereby restates and renews each and every other
representation and warranty heretofore made by it in the Credit Agreement and
the other Loan Documents as fully as if made on the date hereof and with
specific reference to this Second Amendment and Waiver and all other loan
documents executed and/or delivered in connection herewith.
28. Effect of Amendment and Waiver. 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. The waiver set forth in Section 2 hereof
shall (i) relate only to the Second Quarter FY2001 Replaced Financial Covenant
Defaults, and (ii) be effective as of the end of the Second Quarter FY2001,
subject to satisfaction of the conditions precedent set forth in Section 35 of
this Second Amendment and Waiver. The waiver hereby granted by the Agent and the
Required Banks shall not apply to any other past, present or future
noncompliance with any provision of the Credit Agreement or any of the other
Loan Documents (including, without, limitation, any Event of Default occurring
or in existence under Sections 5.17, 5.19 and 5.20 of the Credit Agreement as
amended by this Second Amendment and Waiver on and after the last day of the
Second Quarter FY2001), and all rights, powers and remedies of the Agent and the
Banks are reserved with respect thereto).
29. Ratification. The Borrower hereby restates, ratifies and reaffirms
each and every term, covenant and condition set forth in the Credit Agreement
and the other Loan Documents effective as of the date hereof.
30. Counterparts. This Second Amendment and Waiver may be executed in
any number of counterparts and by different parties hereto in separate
counterparts and delivered by facsimile transmission, each of which when so
executed and delivered (including by facsimile transmission) shall be deemed to
be an original and all of which counterparts, taken together, shall constitute
but one and the same instrument.
31. Section References. Section titles and references used in this
Second Amendment and Waiver 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.
32. No Default. To induce the Administrative Agent and the Banks to
enter into this Second Amendment and Waiver 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
26
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.
33. Further Assurances. The Borrower agrees to take such further
actions as the Administrative Agent shall reasonably request in connection
herewith to evidence the amendments herein contained.
34. Governing Law. This Second Amendment and Waiver shall be governed
by and construed and interpreted in accordance with, the laws of the State of
Georgia.
35. Conditions Precedent. This Second Amendment and Waiver shall become
effective only upon receipt by the Administrative Agent of the following (as to
the documents described in paragraphs (a) and (e) below, in sufficient number of
counterparts for delivery of a counterpart to each Bank and retention of one
counterpart by the Administrative Agent):
(a) from each of the parties hereto of either (i) a duly
executed counterpart of this Second Amendment and Waiver signed by such
party, and of the Consent and Reaffirmation of Guarantors at the end
hereof signed by each Guarantor or (ii) a facsimile transmission of
such executed counterpart with 6 originals to be sent to counsel for
the Administrative Agent by overnight courier;
(b) an opinion letter (together with any opinions of local
counsel relied on therein) of (i) Weil, Gotshal & Xxxxxx LLP, special
counsel for the Borrower and the Guarantors, and (ii) Xxxxxx X. Xxxxx,
Xx., General Counsel for the Borrower and the Guarantors, each dated as
of the Second Amendment Effective Date, substantially in the form of
Exhibits B-1 and B-2, respectively, and covering such additional
matters relating to the transactions contemplated hereby as the
Administrative Agent or any Bank may reasonably request;
(c) an opinion of Xxxxx, Day, Xxxxxx & Xxxxx, special counsel
for the Administrative Agent, dated as of the Second Amendment
Effective Date, substantially in the form of Exhibit C and covering
such additional matters relating to the transactions contemplated
hereby as the Administrative Agent may reasonably request;
(d) all documents which the Administrative Agent or any Bank
may reasonably request relating to the existence of the Borrower and
each Guarantor, the corporate authority for and the validity of this
Second Amendment and Waiver, the Consent and Reaffirmation of
Guarantors at the end hereof, the Consent and Reaffirmation of the
Company and the Guarantors at the end of the First Amendment to
Intercreditor Agreement described herein, the Life Insurance Assignment
and any other matters relevant hereto, all in form and substance
satisfactory to the Administrative Agent, including, without
limitation, a certificate of the Borrower and each Guarantor, signed by
the Secretary or an Assistant Secretary of the Borrower and each
Guarantor, respectively, substantially in the form of Exhibit H (the
"Officer's Certificate"), certifying as to the names, true signatures
and incumbency of the officer or officers of the Borrower or such
27
Guarantor authorized to execute and deliver the Loan Documents to which
it is a party, and certified copies of the following items: (i) any
amendments since November 6, 2000 to the Certificate of Incorporation
or Bylaws of the Borrower and each Person who was a Guarantor as of the
Closing Date or who first becomes a Guarantor after November 6, 2000,
(ii) certificates of the Secretary of State of the jurisdiction of
incorporation as to the good standing of each of the Borrower and the
Guarantors, and (iii) the action taken by the Board of Directors of the
Borrower and each Guarantor authorizing the Borrower's or such
Guarantor's execution, delivery and performance of this Second
Amendment and Waiver, the Life Insurance Assignments, the Consent and
Reaffirmation of Guarantors at the end hereof and the Consent and
Reaffirmation of the Company and the Guarantors at the end of the First
Amendment to Intercreditor Agreement described herein.
(e) receipt of the Morelos Assets Sale Letter and approval
thereof by each Secured Party;
(f) receipt of the Special Transaction Letter and approval
thereof by each Secured Party (subject to the provisions of Section
5.15(xxiii));
(g) receipt of and satisfaction with the amendments to the
Note Purchase Agreements required by the Senior Note Holders and
amending sections thereof to be consistent with the amendments
contained in this Second Amendment and Waiver.
(h) execution and delivery by each of the Secured Parties of a
First Amendment to Intercreditor Agreement in substantially the form of
Annex 1 hereto and by the Guarantors of the Consent and Reaffirmation
of the Company and the Guarantors at the end thereof;
(i) receipt, for the ratable account of the Banks, of an
amendment fee equal to the greater of (i) 0.25 % of the aggregate
Commitments and (ii) such equivalent upfront fee payable to the Senior
Note Holders as a percentage of the Senior Notes outstanding in
conjunction with this Second Amendment and Waiver; and
(j) receipt, for the account of the Administrative Agent, of a
structuring fee in the amount set forth in the letter agreement between
the Administrative Agent and the Borrower dated as of even date
herewith.
28
IN WITNESS WHEREOF, the Borrower, the Administrative Agent and each of
the Banks has caused this Second Amendment and Waiver to be duly executed, under
seal, by its duly authorized officer as of the day and year first above written.
XXXXXXXX XXXXX, INC.,
as Borrower
By: Xxxx X. Xxxx
--------------------------------
Title: Treasurer
29
WACHOVIA BANK, N.A.,
as Administrative Agent and as a Bank
By: Xxxxx X. Xxxxxx
--------------------------------------
Title: Senior Vice President
30
FIRST UNION NATIONAL BANK,
as Syndication Agent and as a Bank
By: Xxxxxxx XxXxxxxx
----------------------------------------
Title: Senior Vice President
31
BANK ONE, NA,
as Documentation Agent and as a Bank
By: Xxxxx X. Xxxxxxxx
-------------------------------------
Title: First Vice President
32
BRANCH BANKING AND TRUST COMPANY, as a Bank
By: Xxxx Xxxxxxx
-----------------------------------------
Title: Vice President
33
CONSENT, REAFFIRMATION AND AGREEMENT OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Second Amendment to and Waiver Under Credit Agreement (the "Second Amendment and
Waiver"), (ii) consents to the execution and delivery of the Second Amendment
and Waiver and of the Life Insurance Assignments and UK Subsidiary Collateral
Documents described therein by the parties thereto, (iii) reaffirms all of its
obligations and covenants under the Amended and Restated Guaranty dated as of
November 6, 2000 executed by it, and (iv) agrees that none of such obligations
and covenants shall be affected by the execution and delivery of the Second
Amendment and Waiver or of the Life Insurance Assignments and UK Subsidiary
Collateral Documents (collectively, the "Amendment Documents"), except to the
extent provided for in the Amendment Documents. 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.
34
GOLD XXXXX, Inc., a Delaware corporation (SEAL)
RASCHEL FASHION INTERKNITTING, LTD.,
a New York corporation (SEAL)
CURTAINS AND FABRICS, INC.,
a New York corporation (SEAL)
GUILFORD INTERNATIONAL, INC.,
a U.S. Virgin Islands corporation (SEAL)
GFD FABRICS, INC.,
a North Carolina corporation (SEAL)
GFD SERVICES, INC.,
a Delaware corporation (SEAL)
MEXICAN INDUSTRIES OF NORTH
CAROLINA, INC.,
a North Carolina corporation (SEAL)
XXXXXXX LACES, LTD.,
a New York corporation (SEAL)
ADVISORY RESEARCH SERVICES, INC.
a North Carolina corporation (SEAL)
XXXXXXXX XXXXX (MICHIGAN), INC.
a Michigan corporation (SEAL)
GUILFORD AIRMONT, INC.,
a North Carolina corporation (SEAL)
GOLD XXXXX FARMS, INC.,
a New York corporation (SEAL)
GMI COMPUTER SALES, INC.
a North Carolina corporation (SEAL)
By:________________________________________________
Title:_______________________________________
TWIN RIVERS TEXTILE PRINTING AND FINISHING,
a North Carolina general partnership
By: Advisory Research Services, Inc.
a General Partner
By:________________________________________________
Title:_______________________________________
35
EXHIBIT B-1
-----------
OPINION OF WEIL, GOTSHAL & XXXXXX
Special Counsel to the Borrower
May 15, 2001
To the Banks and the
Administrative Agent referred to herein
c/o Wachovia Bank, N.A., as Administrative Agent
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Syndications Group
Gentlemen:
We have acted as special counsel to Xxxxxxxx Xxxxx, Inc., a
Delaware corporation (the "Company"), in connection with the execution and
delivery of, and the consummation of the transactions contemplated by, the
Second Amendment to and Waiver Under Credit Agreement, dated as of even date
herewith (the "Second Amendment and Waiver"), among the Company, the banks
listed on the signature pages thereof (the "Banks"), Wachovia Bank, N.A., as
Administrative Agent (the "Administrative Agent"), First Union National Bank, as
Syndication Agent and Bank One, NA, as Documentation Agent, pursuant to which
amendments have been made to the Credit Agreement by and among such parties
dated as of May 26, 2000, as amended by First Amendment to Credit Agreement
dated as of November 6, 2000 (as so amended, the "Credit Agreement"). Terms
defined in the Credit Agreement, as amended by the Second Amendment and Waiver,
and not otherwise defined herein are used herein with the meanings as so
defined. This opinion is being delivered to you pursuant to Section 36(b) of the
Second Amendment and Waiver.
In so acting, we have examined originals or copies (certified
or otherwise identified to our satisfaction) of the Second Amendment and Waiver,
the Consent and Reaffirmation of Guarantors at the end thereof, the First
Amendment to Intercreditor Agreement and the Consent and Reaffirmation of the
Company and the Guarantors at the end thereof and the form of the Life Insurance
Assignments, and such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials
and of officers and representatives of the Company and the Guarantors, and have
made such inquiries of such officers and representatives, as we have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to all questions
of fact material to this opinion that have not been independently established,
36
we have relied upon certificates or comparable documents of officers and
representatives of the Company and upon the representations and warranties of
the Company contained in the Second Amendment and Waiver, the Consent and
Reaffirmation of the Company and the Guarantors at the end of the First
Amendment to Intercreditor Agreement and in the form of the Life Insurance
Assignments (collectively, the "Company Documents"). We have also assumed (i)
that the Company has the requisite corporate power and authority to enter into
and perform the Company Documents, (ii) the due authorization, execution and
delivery of the Company Documents by the Company, (iii) the valid existence of
each Guarantor, (iv) that each Guarantor has the requisite corporate power and
authority to enter into and perform the Consent and Reaffirmation of Guarantors
at the end of the Second Amendment and Waiver and the Consent and Reaffirmation
of the Company and the Guarantors at the end of the First Amendment to
Intercreditor Agreement (collectively, the "Guarantor Documents") and (v) the
due authorization, execution and delivery of the Guarantor Documents by each
Guarantor. We have also assumed the validity and enforceability of the
obligations of the Administrative Agent and the Banks under the First Amendment,
of the Collateral Agent under the Life Insurance Assignments and of the Secured
Parties under the First Amendment to Intercreditor Agreement under the laws of
the State of Georgia or the State of New York (as applicable and selected as the
governing law in the relevant document) and that the Life Insurance Assignments,
when executed and delivered, will be in the form attached to the Second
Amendment and Waiver as Exhibit R, with the correct names of the insurers
inserted and with all blanks properly completed. As used herein, "to our
knowledge" and "of which we are aware" mean the conscious awareness of facts or
other information by any lawyer in our firm actively involved in the
transactions contemplated by the Loan Documents.
Based on the foregoing, and subject to the qualifications
stated herein, we are of the opinion that:
1. The Company is a corporation validly existing and in good
standing under the laws of the State of Delaware and has all requisite corporate
power and authority to own its properties and to carry on its business as now
being conducted.
2. Assuming the due authorization, execution and delivery
thereof by the other parties thereto, the Company Documents (including the Life
Insurance Assignments, when executed and delivered) constitute the legal, valid
and binding obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and subject, as to
enforceability, to general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity), and except that
certain remedial provisions of the Life Insurance Assignments are or may be
unenforceable in whole or in part under the laws of the State of New York, but
the inclusion of such provisions does not affect the validity of the Life
Insurance Assignments, and the Life Insurance Assignments contain adequate
provision for the practical realization of the rights and benefits afforded
thereby. No opinion is expressed in this paragraph as to the attachment,
perfection or priority of any liens granted pursuant to the Life Insurance
Assignments.
37
3. Assuming the due authorization, execution and delivery
thereof by the other parties to the Second Amendment and Waiver, the Life
Insurance Assignments and the First Amendment to Intercreditor Agreement, the
Guarantor Documents constitute the legal, valid and binding obligations of each
Guarantor, enforceable against such Guarantor in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity), and except that certain remedial provisions of
the Life Insurance Assignments are or may be unenforceable in whole or in part
under the laws of the State of New York, but the inclusion of such provisions
does not affect the validity of the Life Insurance Assignments, and the Life
Insurance Assignments contain adequate provision for the practical realization
of the rights and benefits afforded thereby. No opinion is expressed in this
paragraph as to the attachment, perfection or priority of any liens granted
pursuant to the Life Insurance Assignments.
4. To our knowledge, except as otherwise provided in the Loan
Documents, no consent, approval, waiver, license or authorization or other
action by or filing with any New York, Delaware corporate or federal
governmental authority is required in connection with (i) the execution and
delivery by the Company of the Company Documents, the consummation by the
Company of the transactions contemplated thereby or the performance by the
Company of its obligations thereunder and (ii) the execution and delivery by any
Guarantor of the Guarantor Documents, the consummation by such Guarantor of the
transactions contemplated thereby or the performance by such Guarantor of its
obligations thereunder, in each case, except for filings in connection with
perfecting security interests and federal or state securities or blue sky laws,
as to which we express no opinion, and those already obtained.
5. The execution and delivery by the Company of the Company
Documents and the performance by the Company of its obligations thereunder, and
the execution and delivery by any Guarantor of the Guarantor Documents and the
performance by such Guarantor of its obligations thereunder, will not conflict
with, constitute a default under or violate New York, Delaware corporate or
federal law or regulation (other than federal and state securities or blue sky
laws, as to which we express no opinion).
The opinions expressed herein are limited to the laws of the
State of New York, the corporate laws of the State of Delaware and the federal
laws of the United States, and we express no opinion as to the effect on the
matters covered by this letter of the laws of any other jurisdiction. For the
purposes of this opinion, we have assumed that the laws of the State of Georgia,
which is the governing law of the Company Documents and the Guarantor Documents
(other than the First Amendment to Intercreditor Agreement), are the same as the
laws of the State of New York.
The opinions expressed herein are rendered solely for your
benefit in connection with the transactions described herein. Those opinions may
not be used or relied upon by any other person, except an Assignee or
Participant, nor may this letter or any copies hereof be furnished to a third
party, filed with a governmental agency, quoted, cited or otherwise referred to
38
without our prior written consent, other than to an Assignee, a Participant, a
prospective Assignee or a prospective Participant.
Very truly yours,
39
EXHIBIT B-2
-----------
OPINION OF XXXXXX X. XXXXX, XX
General Counsel of the Borrower
May 15, 2001
To the Banks and Administrative Agent referred to herein
c/o Wachovia Bank, N.A., as Administrative Agent
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Syndications Group
Gentlemen:
As General Counsel of Xxxxxxxx Xxxxx, Inc., a Delaware
corporation (the "Company"), I am generally familiar with the legal affairs of
the Company and the Guarantors and am familiar with the actions taken by the
Company with respect to the execution and delivery of, and the consummation of
the transactions contemplated by, the Second Amendment to and Waiver Under
Credit Agreement, dated as of even date herewith (the "Second Amendment and
Waiver"), among the Company, the banks listed on the signature pages thereof
(the "Banks"), Wachovia Bank, N.A., as Administrative Agent (the "Administrative
Agent"), First Union National Bank, as Syndication Agent and Bank One, NA, as
Documentation Agent, pursuant to which amendments have been made to the Credit
Agreement by and among such parties dated as of May 26, 2000, as amended by
First Amendment to Credit Agreement dated as of November 6, 2001 (as so amended,
the "Credit Agreement"). Terms defined in the Credit Agreement, as amended by
the Second Amendment and Waiver, and not otherwise defined herein are used
herein with the meanings as so defined. This opinion is being delivered to you
pursuant to Section 36(b) of the Second Amendment and Waiver.
In connection with rendering this opinion, I have examined
originals or copies, certified or otherwise identified to my satisfaction, of
the Loan Documents and such corporate records, agreements, documents and other
instruments, and such certificates or comparable documents of public officials,
and have made such other inquiries of such officers and representatives, as I
have deemed relevant and necessary as a basis for the opinions hereinafter set
forth.
In such examination, I have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to me as originals, the conformity to original documents of
all documents submitted to me as certified, conformed or photostatic copies and
the authenticity of the originals of such latter documents. As to all questions
of fact material to these opinions that have not been independently established,
I have relied upon certificates or comparable documents of officers and
representatives of the Company and upon the representations and warranties of
the Company and the Guarantors contained in the Second Amendment and Waiver, the
Consent and Reaffirmation of Guarantors at the end thereof, the Consent and
Reaffirmation of the Company and the Guarantors at the end of the First
40
Amendment to Intercreditor Agreement, and the form of the Life Insurance
Assignments (collectively, the "Amendment Documents"). I have also assumed that
the Life Insurance Assignments, when executed and delivered, will be in the form
attached to the Second Amendment and Waiver as Exhibit R, with the correct names
of the insurers inserted and with all blanks properly completed
Based on the foregoing, and subject to the qualifications
stated herein, I am of the opinion that:
1. Each Guarantor is a corporation validly existing and in
good standing under the laws of the jurisdiction of its incorporation and has
all requisite corporate power and authority to own its properties and to carry
on its business as now being conducted.
2. Each of the Company and the Guarantors has all requisite
corporate power and authority to execute and deliver the Amendment Documents to
which it is a party and to perform its obligations thereunder. The execution,
delivery and performance by each of the Company and the Guarantors of the
Amendment Documents (including the Life Insurance Assignments, when executed and
delivered) to which it is a party have been duly authorized by all necessary
corporate action on the part of each of the Company and the Guarantors. Each of
the Company and the Guarantors have duly and validly executed and delivered the
Amendment Documents to which it is a party.
3. To my knowledge, except as otherwise provided in the Credit
Agreement, there is no litigation, proceeding or governmental investigation
pending or overtly threatened against the Company or any of the Guarantors that
relates to any of the transactions contemplated by the Loan Documents or which,
if adversely determined, would have a material adverse effect on the business,
assets or financial condition of the Company and its Subsidiaries taken as a
whole.
4. The execution and delivery by the Company of the Amendment
Documents to which it is a party (the "Company Documents") and the performance
by the Company of its obligations thereunder will not (A) conflict with,
constitute a default under or violate (i) any of the terms, conditions or
provisions of the Certificate of Incorporation or by-laws of the Company, (ii)
any of the terms, conditions or provisions of any material document, agreement
or other instrument to which the Company is a party or by which it is bound of
which I am aware (except for any consents which may be required with respect to
the Security Documents) or (iii) any judgment, writ, injunction, decree, order
or ruling of any court or governmental authority binding on the Company of which
I am aware or (B) to my knowledge, except as otherwise contemplated by the Loan
Documents, result in the creation or imposition of any lien, charge or
encumbrance upon any assets of the Company.
5. The execution and delivery by each Guarantor of the
Amendment Documents to which it is a party (the "Guarantor Documents") and the
performance by such Guarantor of its obligations thereunder will not (A)
conflict with, constitute a default under or violate (i) any of the terms,
conditions or provisions of the Certificate of Incorporation or by-laws of such
Guarantor, (ii) any of the terms, conditions or provisions of any material
document, agreement or other instrument to which such Guarantor is a party or by
which it is bound of which I am aware (except for any consents which may be
required with respect to the Security Documents) or (iii) any judgment, writ,
41
injunction, decree, order or ruling of any court or governmental authority
binding on such Guarantor of which I am aware or (B) to my knowledge, except as
otherwise contemplated by the Loan Documents, result in the creation or
imposition of any lien, charge or encumbrance upon any assets of such Guarantor.
6. No consent, approval, waiver, license or authorization or
other action by or filing with any North Carolina governmental authority is
required in connection with the execution and delivery by each of the Company
and the Guarantors of the Amendment Documents to which it is a party, the
consummation by each of the Company and the Guarantors of the transactions
contemplated thereby or the performance by each of the Company and the
Guarantors of its obligations thereunder, except for filings in connection with
perfecting security interests and federal and state securities or blue sky laws,
as to which I express no opinion, and those already obtained.
The opinions expressed herein are limited to the laws of the
State of North Carolina and the corporate laws of the State of Delaware, and I
express no opinion as to the effect on the matters covered by this letter of the
laws of any other jurisdiction.
The opinions expressed herein are rendered solely for your
benefit in connection with the transactions described herein. Those opinions may
not be used or relied upon by any other person, except an Assignee or
Participant, nor may this letter or any copies hereof be furnished to a third
party, filed with a governmental agency, quoted, cited or otherwise referred to
without my prior written consent, other than to an Assignee, a Participant, a
prospective Assignee or a prospective Participant.
Very truly yours,
Xxxxxx X. Xxxxx, Xx.
General Counsel
42
EXHIBIT C
---------
OPINION OF
XXXXX, DAY, XXXXXX & XXXXX, SPECIAL COUNSEL
FOR THE ADMINISTRATIVE AGENT
May 15, 2000
To the Banks and the Administrative Agent
Referred to Below
c/o Wachovia Bank, N.A.,
as Administrative Agent
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Syndications Group
Dear Sirs:
We have participated in the preparation of the Second
Amendment to and Waiver Under Credit Agreement, dated as of even date herewith
(the "Second Amendment and Waiver"), among Xxxxxxxx Xxxxx, Inc., a Delaware
corporation (the "Borrower"), the banks listed on the signature pages thereof
(the "Banks"), Wachovia Bank, N.A., as Administrative Agent (the "Administrative
Agent"), First Union National Bank, as Syndication Agent and Bank One, NA, as
Documentation Agent and have acted as special counsel for the Administrative
Agent for the purpose of rendering this opinion pursuant to Section 36(c) of the
Second Amendment and Waiver. The Second Amendment and Waiver amends the Credit
Agreement by and among such parties dated as of May 26, 2000, as amended by
First Amendment to Credit Agreement dated as of November 6, 2001 (as so amended,
the "Credit Agreement"). Terms defined in the Credit Agreement, as amended by
the Second Amendment and Waiver, and not otherwise defined herein are used
herein with the meanings as so defined.
This opinion letter is limited by, and is in accordance with,
the January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
which Interpretive Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise
identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed necessary or advisable
for purposes of this opinion. We have assumed that the Life Insurance
Assignments, when executed and delivered, will be in the form attached to the
Second Amendment and Waiver as Exhibit R, with the correct names of the insurers
inserted and with all blanks properly completed.
Upon the basis of the foregoing, and assuming the due
authorization, execution and delivery of the Second Amendment and Waiver, the
Consent and Reaffirmation of Guarantors at the end thereof, the First Amendment
43
to Intercreditor Agreement and the Consent and Reaffirmation of the Company and
the Guarantors at the end thereof and the form of the Life Insurance Assignments
(collectively, the "Amendment Documents") to which it is a party by each of the
Borrower and the Guarantors, we are of the opinion that each of the Amendment
Documents (including the Life Insurance Assignments, when executed and
delivered) to which it is a party constitutes a valid and binding agreement of
the Borrower and each of the Guarantors, in each case enforceable in accordance
with its terms except as: (i) the enforceability thereof may be affected by
bankruptcy, insolvency, reorganization, fraudulent conveyance, voidable
preference, moratorium or similar laws applicable to creditors' rights or the
collection of debtors' obligations generally; (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability; and (iii) the enforceability of certain of the remedial,
waiver and other provisions of the Amendment Documents may be further limited by
the laws of the State of Georgia; provided, however, such additional laws do
not, in our opinion, substantially interfere with the practical realization of
the benefits expressed in the Amendment Documents, except for the economic
consequences of any procedural delay which may result from such laws.
In giving the foregoing opinion, we express no opinion as to
the effect (if any) of any law of any jurisdiction except the State of Georgia.
We express no opinion as to the effect of the compliance or noncompliance of the
Administrative Agent or any of the Banks with any state or federal laws or
regulations applicable to the Administrative Agent or any of the Banks by reason
of the legal or regulatory status or the nature of the business of the
Administrative Agent or any of the Banks.
This opinion is delivered to you in connection with the
transaction referenced above and may only be relied upon by you and any
Assignee, Participant or other Transferee under the Credit Agreement without our
prior written consent.
Very truly yours,
44
EXHIBIT F
---------
COMPLIANCE CERTIFICATE
Reference is made to the Credit Agreement dated as of May 26,
2000, as amended by First Amendment to Credit Agreement dated as of November 6,
2000 and by Second Amendment to and Waiver Under Credit Agreement dated as of
May 15, 2001 (as so amended, and as hereafter modified and supplemented and in
effect from time to time, the "Credit Agreement") among Xxxxxxxx Xxxxx, Inc.,
the Banks from time to time parties thereto, Wachovia Bank, N.A., as
Administrative Agent, First Union National Bank, as Syndication Agent and Bank
One, NA, as Documentation Agent. Capitalized terms used herein shall have the
meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 5.01(c) [or 5.05(a)]of the Credit
Agreement, , the duly authorized of Xxxxxxxx Xxxxx, Inc., hereby (i) certifies
to the Administrative Agent and the Banks that the information contained in the
Compliance Check List attached hereto is true, accurate and complete as of , ,
and that no Default is in existence on and as of the date hereof and (ii)
restates and reaffirms that the representations and warranties contained in
Article IV of the Credit Agreement are true on and as of the date hereof as
though restated on and as of this date.
XXXXXXXX XXXXX, INC. (SEAL)
By:________________________________________________
Title:_______________________________________
45
1. Consolidations, Mergers and Sales of Assets (Section 5.05)
The Borrower will not, nor will it
permit any Subsidiary to . . . 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 . . . (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, subject to Sections 2.10, 5.21(b) and
5.22(b), if applicable, the following:
(1) any Foreign Sale-Leaseback;
(2) any sale, lease or other
transfer included in the Special
Transaction Investment, subject to the
provisions of Section 5.15(xxiii);
(3) subject to any prepayment
required by Section 2.10, the Borrower
or any Subsidiary may sell and transfer
any asset, (x) as to assets having a
book value less than $3,000,000, so long
as the aggregate cash proceeds of such
sale are not less than such book value
and (y) as to all other assets, so long
as the Required Secured Parties have
consented to such sale (and as to any
Collateral for which the Collateral
Agent has obtained an appraisal pursuant
to this Agreement, the Required Secured
Parties shall be deemed to have so
consented if the aggregate cash proceeds
of such sale are equal to or greater
than the appraised amount therefor);
(4) the Borrower may enter into
an arrangement to sell Receivables
pursuant to a Receivables Securitization
Program if, as of the end of each of the
2 immediately preceding Fiscal Quarters
prior to entering into such arrangement,
the Leverage Ratio has been equal to or
less than 2.50 to 1.00.
If any assets permitted to be sold under
this Section 5.05(c) constitute
Collateral, the Collateral Agent shall
release its Lien and security interest
therein upon receipt by the
Administrative Agent of the Net Proceeds
of Asset Disposition with respect
thereto.
(a) Consolidated Total Debt
(Schedule 4) $____________
(b) Consolidated Total EBITDA
(Schedule 1) $____________
(c) Ratio of (a) to (b) _____ to 1.00
46
Minimum Ratio to permit entering into arrangement for
sale of Receivables pursuant to a Receivables
Securitization Program 2.50 to 1.00
2. Investments (Section 5.15)
Neither the Borrower nor any of its Subsidiaries
shall make Investments in any Person except
(i) existing Investments described in
Schedule 5.15 and Debt permitted by Section 5.24,
(ii) loans or advances to employees not
exceeding $1,000,000 in the aggregate principal amount
outstanding at any time, in each case made in the ordinary
course of business and consistent with practices existing on
the Closing Date;
(iii) deposits required by landlords,
government agencies or public utilities;
(iv) Investments in direct obligations
of the United States Government maturing within one year,
(v) Investments in certificates of
deposit issued by a commercial bank whose credit is
satisfactory to the Administrative Agent,
(vi) Investments in commercial paper
rated A1 or the equivalent thereof by Standard & Poor's Rating
Group, a division of XxXxxx-Xxxx, Inc. 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,
(vii) Investments in 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 Rating Group
and Aa or the equivalent thereof by Xxxxx'x Investors Service,
Inc.,
(viii) Investments in the Borrower or
any Guarantor,
(ix) loans and advances to Subsidiaries
which are in existence on the Second Amendment Effective Date
and are evidenced by Pledged Notes and are reflected on
Schedule 5.15,
(x) Investments in a Receivables
Subsidiary pursuant to a Receivables Securitization Program,
(xi) conversion of debt in existence on
the Second Amendment Effective Date which arose from loans to
American Textil S.A. de C.V. and Xxxxx Fabrik, LLC to equity,
47
(xii) total Investments made in the
infrastructure project in Tamaulipas, Mexico, in an aggregate
amount not exceeding $12,500,000,
(xiii) total Investments made for other
capital expenditures in Tamaulipas, Mexico for the completion
of dyeing, finishing and knitting and related facilities in an
aggregate amount not exceeding $54,500,000.
(xiv) loans made after the First
Amendment Effective Date for working capital to be used in
Tamaulipas, Mexico in an aggregate amount not exceeding
$16,000,000,
(xv) transfer of equipment in an
aggregate amount not exceeding $3,000,000 from the United
States to Mexico,
(xvi) Investments made after the First
Amendment Effective Date in Brazil in an aggregate amount not
exceeding $2,000,000,
(xvii) Investments made after the First
Amendment Effective Date in the Czech Republic in an aggregate
amount not exceeding $1,500,000, consisting of up to $800,000
in transfers of United Kingdom equipment to the Czech Republic
and up to $700,000 in working capital loans from cash
available in the United Kingdom,
(xviii) Investments made after the First
Amendment Effective Date in American Textil S.A. de C.V. in an
aggregate amount not exceeding $1,000,000,
(xix) Investments made after the First
Amendment Effective Date in Xxxxx Fabrik, LLC in an aggregate
amount not exceeding $1,000,000 of which no greater than
$750,000 is a cash Investment (except that if Xxxxx Fabrik,
LLC becomes a Guarantor hereunder, clause (viii) above shall
be applicable and this clause shall have no further force or
effect),
(xx) in addition to other Investments
permitted by this Section, other Investments made after the
First Amendment Effective Date in Mexico in an aggregate
amount not exceeding $1,000,000,
(xxi) other Investments made in Foreign
Subsidiaries created after the First Amendment Effective Date,
so long as the amount of such Investment in any such new
Foreign Subsidiary does not exceed the statutory minimum
amount required by applicable law in order to create such new
Foreign Subsidiary, and the aggregate amount of all such
Investments does not exceed $100,000 and
(xxii) Investments in Grupo Ambar S.A.
de C.V. necessary to acquire the 5% of the common stock
therein not owned by the Borrower in the event the owner of
such 5% interest exercises a put right or the Borrower
exercises a call right pertaining thereto, so long as such
Investments do not involve the payment of cash or cash
equivalents as part of the purchase price or consideration
48
paid to such owner (other than pursuant to a subordinated loan
arrangement in which such loan is fully subordinated in all
respects to the Bank Obligations, with no interest or
principal being payable thereunder until all Bank Obligations
have been repaid in full and all Commitments terminated);
(xxiii) Investments in the Special
Transaction Entity under terms acceptable to the Banks
including, but not limited to, the following: (a) final
operating, partnership or other governing agreement pertaining
to the Special Transaction Entity and capital structure
thereof acceptable to the Administrative Agent and Required
Banks, (b) assets contributed to the Special Transaction
Entity are limited to equipment acceptable to the Secured
Parties and generally described in the Special Transaction
Letter, and cash of up to $5,000,000 spent to ready the
relevant plant and fund working capital within the first 3
months of the Special Transaction Investment startup, (c) the
Borrower or such Borrower's Subsidiary, as the case may be,
pledges its ownership in the Special Transaction Entity and
any rights to any put agreement which the Borrower, or the
Borrower's Subsidiary as the case may be, has pertaining to
the Special Transaction Investment to the Collateral Agent as
Collateral for the benefit of the Banks, (d) the Borrower, or
the Borrower's Subsidiary as the case may be, shall not permit
the Special Transaction Entity to pledge its assets to a third
party, (e) the Borrower shall not, or permit its Subsidiaries
to, make any additional Investment in the Special Transaction
Entity,
provided, that after giving effect to the making of any
Investments permitted by clauses (xi) through (xxi) and clause
(xxiii) of this Section, if there are any Loans outstanding at
that time, no Default shall be in existence or be created
thereby.
(a) loans or advances to employees $_______________
Limitation: $1,000,000
(b) Investments for infrastructure in Tamaulipas, Mexico $_______________
Limitation: $12,500,000
(c) Investments for completion of facilities in Tamaulipas,
Mexico $_______________
Limitation: $54,500,000
(d) loans for working capital in Tamaulipas, Mexico $_______________
Limitation: $16,000,000
(e) transfer of equipment from the United States to Mexico $_______________
Limitation $3,000,000
49
(f) Investments in Brazil $_______________
Limitation $2,000,000
(g) Transfers of Equipment to the Czech Republic $_______________
Limitation: $800,000
(h) Working capital loans in the Czech Republic
Limitation: $700,000
(i) Investments in American Textil S.A. de C.V. $_______________
Limitation $1,000,000
(j) cash Investments in Xxxxx Fabrik, LLC(2)
Limitation: $750,000
(k) non-cash Investments in Xxxxx Fabrik, LLC(3) $_______________
(l) sum of (j) and (k) $_______________
Limitation: $1,000,000
(m) other Investments in Mexico $_______________
Limitation: $1,000,000
(n) other Investments in new Foreign Subsidiaries $_______________
Limitation $100,000
(o) cash Investments in Special Transaction Entity described
in and otherwise permitted by clause (xxiii) $_______________
Limitation: $5,000,000
3. Liens (Section 5.16)
Neither the Borrower nor any Consolidated Subsidiary will create,
assume or suffer to exist any Lien on any asset now owned or hereafter
acquired by it, except: . . . (j) Liens on assets leased pursuant to
----------
2 Delete if Xxxxx Fabrik, LLC becomes a Guarantor
3 Delete if Xxxxx Fabrik, LLC becomes a Guarantor
50
Foreign Capital Leases or other Permitted Foreign Debt and Liens
permitted by Section 5.23 in connection with Permitted Factoring
Arrangements.
None of the Borrower's or any Consolidated Subsidiary's property is
subject to any Lien securing Debt which is not permitted by paragraphs
(a) through (i) of Section 5.16, except for Foreign Capital Leases
described below and in connection with Permitted Factoring
Arrangements:
Description of Lien and Property Amount of Debt
Subject to same Secured
----------------------------------------------- -------
a. ___________________________________ $____________
b. ___________________________________ $____________
c. ___________________________________ $____________
d. ___________________________________ $____________
e. ___________________________________ $____________
f. ___________________________________ $____________
4. Fixed Charge Coverage Ratio (Section 5.17)
As of the end of each Fiscal Quarter, the Fixed Charge Coverage Ratio
for the Fiscal Quarter just ended shall at no time be less than the
ratio set forth below as of the end of the Fiscal Quarters set forth
below:
----------------------------------------- ----------------------------------
Fiscal Quarter Minimum Fixed Charge Coverage
Ratio
----------------------------------------- ----------------------------------
2nd of 2001 Fiscal Year Not tested
----------------------------------------- ----------------------------------
3rd of 2001 Fiscal Year 0.80 to 1.00
----------------------------------------- ----------------------------------
4th of 2001 Fiscal Year 0.90 to 1.00
----------------------------------------- ----------------------------------
1st of 2002 Fiscal Year 1.25 to 1.00
----------------------------------------- ----------------------------------
2nd of 2002 Fiscal Year 1.30 to 1.00
----------------------------------------- ----------------------------------
3rd of 2002 Fiscal Year 1.35 to 1.00
----------------------------------------- ----------------------------------
4th of 2002 Fiscal Year and thereafter 1.35 to 1.00
----------------------------------------- ----------------------------------
(a) Consolidated Total EBITDA $____________
(Schedule 1)
(b) Consolidated Interest Expense $____________
51
(c) Capital Expenditures(4) $____________
(d) scheduled principal payments on Debt coming due in the
next period(5) $____________
(e) sum of (b) plus (c) plus (d) $____________
(f) Ratio of (a) to (e) ______ to 1.00
Minimum Ratio [0.80 to 1.00]
[0.90 to 1.00]
[1.25 to 1.00]
[1.30 to 1.00]
[1.35 to 1.00]
5. Leverage Ratio (Section 5.19)
The Leverage Ratio for the Fiscal Quarter just ended
and the immediately preceding 3 Fiscal Quarters shall at all times be
less than the ratio set forth below as of the end of the Fiscal
Quarters set forth below:
----------------------------------------- ----------------------------------
Fiscal Quarter Leverage Ratio
----------------------------------------- ----------------------------------
2nd of 2001 Fiscal Year 7.00 to 1.00
----------------------------------------- ----------------------------------
3rd of 2001 Fiscal Year 7.25 to 1.00
----------------------------------------- ----------------------------------
4th of 2001 Fiscal Year 6.00 to 1.00
----------------------------------------- ----------------------------------
1st of 2002 Fiscal Year 5.00 to 1.00
----------------------------------------- ----------------------------------
2nd of 2002 Fiscal Year 4.00 to 1.00
----------------------------------------- ----------------------------------
3rd of 2002 Fiscal Year 3.50 to 1.00
----------------------------------------- ----------------------------------
4th of 2002 Fiscal Year and thereafter 3.00 to 1.00
----------------------------------------- ----------------------------------
(a) Consolidated Total Debt $_______________
(Schedule 4)
(b) Consolidated Total EBITDA
(Schedule 1) $_______________
(c) Ratio of (a) to (b) ______ to 1.00
------------------
4 Exclude if financed by Permitted Foreign Debt or Domestic Purchase
Money Debt
5 Exclude prepayments pursuant to Section 2.10 which reduce the
Commitments pursuant to Section 2.08(b)
52
Maximum Ratio <[7.00 to 1.00]
<[7.25 to 1.00]
<[6.00 to 1.00]
<[5.00 to 1.00]
<[4.00 to 1.00]
<[3.50 to 1.00]
<[3.00 to 1.00]
53
7. Minimum Consolidated Tangible Net Worth (Section 5.20)
On and after the Second Amendment Effective Date, Consolidated Tangible
Net Worth shall at no times be less than $200,000,000 plus the sum of
(i) 50% of the cumulative Reported Net Income of the Borrower and its
Consolidated Subsidiaries during any period after the Fiscal Quarter
ended 12/31/00 (taken as one accounting period), calculated quarterly
at the end of each Fiscal Quarter but excluding from such calculations
of Reported Net Income for purposes of this clause (i), any Fiscal
Quarter in which Reported Net Income of the Borrower and its
Consolidated Subsidiaries is negative, (ii) 100% of the cumulative
Reported Net Proceeds of Capital Stock received during any period after
the Fiscal Quarter ended 12/31/00, calculated quarterly at the end of
each Fiscal Quarter, and (iii) 100% of any equity resulting from the
conversions of any Debt of the Borrower or its Consolidated
Subsidiaries.
(a) Consolidated Tangible Net Worth
(Schedule 2) $______________
(b) Reported Net Income6___________________ $______________
(c) 50% of (b) $______________
(d) cumulative Net Proceeds of Capital Stock
received after Fiscal Quarter ending December
31, 2000 $______________
(e) equity resulting from conversions of Debt $______________
(f) Sum of (c), (d) (e) and $200,000,000 $______________
Limitation: (a) may not be less than (f)
----------
6 Exclude any Fiscal Quarter in which Reported Net Income is negative,
100% of cumulative Net Proceeds of Capital Stock received during any
period after the Fiscal Quarter ending December 31, 2000, and 100% of
any equity resulting from the conversions of any Debt.
54
8. Factoring Arrangements (Section 5.23)
The Borrower and its Subsidiaries shall not have any factoring arrangements,
except those which comply with the provisions of this Section 5.23 ("Permitted
Factoring Arrangements"): (i) the aggregate face amount of factored accounts
receivable outstanding at any time shall not exceed $40,000,000; (ii) any Factor
Advances under a Permitted Factoring Arrangement shall be included in the
computation of Debt for purposes of Section 5.24(B)(viii) and may be secured by
(x) accounts receivable (and other receivables, including instruments, chattel
paper, documents and general intangibles, and returned and repossessed goods
related thereto) which are not sold and have not been identified for sale to
such factor ("Non-Factored Accounts"), so long as such factor has expressly
subordinated its Lien on such Non-Factored Accounts to the Lien of the
Collateral Agent, pursuant to a subordination provision acceptable to the
Administrative Agent, which subordinated Liens shall be included in the
computation of Liens permitted by Section 5.16(j), and (y) accounts (and other
receivables, including instruments, chattel paper, documents and general
intangibles, and returned and repossessed goods related thereto) which have been
identified for sale to such factor pursuant to the factoring arrangement but
which have not yet been sold ("Identified Accounts"), which Liens shall be
included in the computation of Liens permitted by Section 5.16(j) until they are
actually sold pursuant to such factoring arrangement, but need not be
subordinated pursuant to the foregoing (and any Non-Factored Accounts which
become Identified Accounts shall no longer be subject to such subordination
provisions). Upon the actual sale of Identified Accounts pursuant to such
factoring arrangement (such sold accounts being "Factored Accounts"), the Lien
of the Collateral Agent shall be automatically released pursuant to the Security
Agreement.
----------- ---------------------------------------------------------- --------------------------------------
(a) aggregate face amount of factored accounts outstanding $_______________
----------- ---------------------------------------------------------- --------------------------------------
(b) Limitation $40,000,000
----------- ---------------------------------------------------------- --------------------------------------
9. Additional Debt (Section 5.24)
The Borrower shall not incur or permit to exist, or permit any Consolidated
Subsidiary other than the Receivables Subsidiary to incur or permit to exist,
any Debt other than:
(A) Subject to Section 2.10(h), Debt under credit
facilities in Mexico in the aggregate amount not exceeding the Dollar
equivalent of 66,000,000 Mexican pesos, calculated based on the
exchange rate as of the Closing Date, debt under credit facilities in
the United Kingdom in the aggregate amount not exceeding the Dollar
equivalent of 5,000,000 British pounds sterling, calculated based on
the exchange rate as of the Closing Date, term facilities in Portugal
in the aggregate amount not exceeding the Dollar equivalent of
900,000,000 Portuguese escudos, calculated based on the exchange rate
as of the Closing Date; and
(B) (i) Debt in existence on the Closing Date
(including unsecured Debt in the amount of $1,500,000 of Xxxxx Fabrik
LLC, a limited liability company in which the Borrower owns 50% on the
First Amendment Effective Date, but in which it may thereafter acquire
55
additional interests), and extensions, renewals, refinancings or
refundings thereof (provided that the amount of such Debt is not
increased); (ii) the Debt under this Agreement; (iii) Debt permitted to
be secured by Liens permitted by Section 5.16; (iv) Debt of the types
described in clause (vii) of the definition of Debt which is incurred
in the ordinary course of business in connection with the sale or
purchase of goods or to assure performance of an obligation to a
utility or a governmental entity or a worker's compensation obligation;
(v) Receivables Program Obligations; (vi) Debt permitted by Section
5.15; (vii) obligations to reimburse any bank or other Person in
respect of amounts paid or to be paid under any irrevocable standby
letter of credit, or letter of credit issued in support of trade
payables arising from the import of goods, in an aggregate amount at
any time for all such standby and trade letters of credit not exceeding
$5,000,000, (viii) Foreign Capital Leases and other Permitted Foreign
Debt and (ix) Domestic Purchase Money Debt up to $40,000,000. The
Borrower shall not permit the Receivables Subsidiary to incur any Debt
or other liabilities other than in connection with the Receivables
Securitization Program.
(a) Reimbursement obligations under standby and trade letters of credit $________
Limitation: (a) may not exceed $5,000,000
(b) Domestic Purchase Money Debt $________
Limitation: (b) may not exceed $40,000,000
10. Capital Expenditures (Section 5.27)
(a) Capital Expenditures for the Fiscal Quarter just
ended and the 3 immediately preceding Fiscal Quarters shall at no time
be greater than the sum of (x) the applicable amount set forth below as
of the end of the Fiscal Quarters set forth below, less (y) the cash
portion of the UK Restructuring Charges taken during such period:
----------------------------------------- ----------------------------------
Fiscal Quarter Maximum Capital Expenditures
----------------------------------------- ----------------------------------
2nd of 2001 Fiscal Year $71,000,000
----------------------------------------- ----------------------------------
3rd of 2001 Fiscal Year $73,000,000
----------------------------------------- ----------------------------------
4th of 2001 Fiscal Year $63,000,000
----------------------------------------- ----------------------------------
1st of 2002 Fiscal Year $61,000,000
----------------------------------------- ----------------------------------
2nd of 2002 Fiscal Year $53,000,000
----------------------------------------- ----------------------------------
3rd of 2002 Fiscal Year $52,000,000
----------------------------------------- ----------------------------------
4th of 2002 Fiscal Year and thereafter $50,000,000
----------------------------------------- ----------------------------------
56
(b) If, at the end of the first Fiscal Quarter of the 2002 Fiscal Year
or at the end of any Fiscal Quarter thereafter, the Fixed Charge
Coverage Ratio for the Fiscal Quarter just ended is less than 1.25 to
1.00, the Borrower shall not, or permit its Consolidated Subsidiaries
to, commit to future Capital Expenditures greater than 50% of the
maximum Capital Expenditures for the next 4 Fiscal Quarters as set
forth in the table above.
-------------------------------------------------------------------------------------- ----------------------
(a) Capital Expenditures (Schedule 3) $_________
-------------------------------------------------------------------------------------- ----------------------
(b) cash portion of the UK Restructuring Charges (if applicable) (Schedule 3) $_________
-------------------------------------------------------------------------------------- ----------------------
(c) sum of (a) less (b) $_________
-------------------------------------------------------------------------------------- ----------------------
Limitation (unless (i) below is less than 1.25 to 1.0) [$71,000,000]
[$73,000,000]
[$63,000,000]
[$61,000,000]
[$53,000,000]
[$52,000,000]
[$50,000,000]
-------------------------------------------------------------------------------------- ----------------------
(d) Consolidated Total EBITDA(7) $____________
(Schedule 1)
(e) Consolidated Interest Expense(7) $____________
(f) Capital Expenditures(7,8) $____________
(g) scheduled principal payments on Debt coming due in the next period(9) $____________
(h) sum of (e) plus (f) plus (g) $____________
(i) Ratio of (d) to (h) ______ to 1.00
Limitation (if (g) is less than 1.25 to 1.0) [$35,500,000]
[$36,500,000]
[$31,500,000]
[$30,500,000]
[$26,500,000]
[$26,000,000]
[$25,000,000]
----------
7 Most recent Fiscal Quarter only, from and after the first Fiscal
Quarter of the 2002 Fiscal Year
8 Exclude if financed by Permitted Foreign Debt or Domestic Purchase
Money Debt
9 Include only next Fiscal Quarter and exclude prepayments pursuant to
Section 2.10 which reduce the Commitments pursuant to Section 2.08(b)
57
11. Adjusted Interest Coverage Ratio (Section 5.28)(10)
Commencing at the end of the first Fiscal Quarter of the 2003 Fiscal
Year, the Adjusted Interest Coverage Ratio for the Fiscal Quarter just
ended and the 3 immediately preceding Fiscal Quarters shall at no time
be less than 3.00.
(a) Consolidated Total EBITDA
(Schedule 1) $____________
(b) Capital Expenditures $____________
(c) Sum of (a) less (b) $____________
(d) Consolidated Interest Expense $____________
(e) Ratio of (c) to (d) ______ to 1.00
Minimum Ratio 3.0 to 1.00
12. Minimum Consolidated Total EBITDA (Section 5.29)
Consolidated Total EBITDA for the Fiscal Quarter just ended and the 3
immediately preceding Fiscal Quarters shall be at least the amounts set
forth below as of the end of the Fiscal Quarters set forth below:
----------------------------------------- ----------------------------------
Fiscal Quarter Minimum EBITDA
----------------------------------------- ----------------------------------
2nd of 2001 Fiscal Year $43,000,000
----------------------------------------- ----------------------------------
3rd of 2001 Fiscal Year $42,000,000
----------------------------------------- ----------------------------------
4th of 2001 Fiscal Year $50,000,000
----------------------------------------- ----------------------------------
1st of 2002 Fiscal Year $60,000,000
----------------------------------------- ----------------------------------
2nd of 2002 Fiscal Year $78,000,000
----------------------------------------- ----------------------------------
3rd of 2002 Fiscal Year $88,000,000
----------------------------------------- ----------------------------------
4th of 2002 Fiscal Year and thereafter $95,000,000
----------------------------------------- ----------------------------------
----------
10 Include this portion only from and after the first Fiscal Quarter of
the 2003 Fiscal Year
58
(a) Consolidated Total EBITDA $____________
(Schedule 1)
Limitation [$43,000,000]
[$42,000,000]
[$50,000,000]
[$60,000,000]
[$78,000,000]
[$88,000,000]
[$95,000,000]
59
Schedule 1
----------
CONSOLIDATED TOTAL EBITDA
-------------------------
(a) Consolidated Net Income for:
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(b) Consolidated Interest Expense for:
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(c) Amortization expense for:
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(d) Depreciation expense for:
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(e) Consolidated tax expense for (subtract if
a net tax benefit has been recognized):
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
60
(f) Applicable Restructuring Charges for
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
CONSOLIDATED TOTAL EBITDA $______________
(sum of (a), plus (b), plus (c), plus (d),
plus (e), plus (f))
61
Schedule 2
----------
CONSOLIDATED TANGIBLE NET WORTH
-------------------------------
(a) Stockholders' Equity $_____________
(b) any surplus resulting from any write-up of
assets subsequent to [__________________] $_____________
(c) all assets which would be treated as
intangible assets $_____________
(d) any amount at which shares of Capital Stock
appear as an asset on the balance sheet (to the
extent not included in (c) $_____________
(e) loans or advances to stockholders, directors,
officers or employees $_____________
(f) deferred expenses (to the extent not
included in (c) $_____________
CONSOLIDATED TANGIBLE NET WORTH (sum
of (a) less (b), less (c), less (d), less (e), less (f)) $_____________
62
Schedule 3
----------
CAPITAL EXPENDITURES
--------------------
CASH PORTION OF THE UK RESTRUCTURING CHARGES
--------------------------------------------
(a) Capital Expenditures:
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(b) Cash portion of UK Restructuring Charges taken
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
63
Schedule 4
CONSOLIDATED TOTAL DEBT11
-------------------------
(a) obligations for borrowed money, including Factor Advances:
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(b) obligations evidenced by bonds, debentures, notes or other
similar instruments
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(c) obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(d) obligations as lessee under capital leases
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(e) obligations to reimburse any bank or other Person in respect of
amounts payable under a banker's acceptance
___ quarter ___ $______________
----------
11 Avoid duplication by including in only one category any item which
could be included in more than one category
64
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(f) Redeemable Preferred Stock
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(g) obligations to reimburse any bank or other Person in respect of
amounts paid or to be paid under a letter of credit or similar
instrument, but excluding letters of credit or similar
instruments having a stated maturity of less than one year from
the date of issuance which are issued in support of trade
payables arising from the import of goods
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(h) Hedge Obligations
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(i) Debt of others secured by a Lien on any asset, whether or not
such Debt is assumed
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(j) Debt of others Guaranteed
___ quarter ___ $______________
65
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
(k) principal amounts outstanding and owed to parties other than the
Borrower or any Subsidiary under the items described in clause
(a) of the definition of Receivables Program Obligations.
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
___ quarter ___ $______________
Total $______________
CONSOLIDATED TOTAL DEBT (sum of (a) through (k), inclusive) $_________________
66
EXHIBIT R
---------
WACHOVIA LOGO
--------------------------------------------------------------------------------
Assignment of Life Insurance Policy as Collateral
A. For Value Received the undersigned hereby assign, transfer and set over to
WACHOVIA BANK, N.A., in its capacity as Collateral Agent, and its successors and
assigns in such capacity (herein called the "Assignee") under the Amended and
Restated Intercreditor Agreement among Wachovia Bank, N.A., as Collateral Agent,
and the Secured Parties party thereto from time to time, as amended by First
Amendment to Intercreditor Agreement dated as of May 15, 2001, pertaining to
Xxxxxxxx Xxxxx, Inc. and certain of its Subsidiaries (as amended or supplemented
from time to time, the "Intercreditor Agreement") the policies listed on
Appendix 1 hereto issued by ________________________________________ (herein
called the "Insurer") and any supplementary contracts issued in connection
therewith (each said policy and contracts as to a named insured being
collectively called the "Policy" as to such named insured), upon the life of,
for each Policy, the individuals named on Appendix 1 opposite the Policy No. for
such Policy and all claims, options, privileges, rights, title and interest
therein and thereunder (except as provided in Paragraph D hereof), subject to
all the terms and conditions of the Policy and to all superior liens, if any,
which the Insurer may have against the Policy. The undersigned by this
instrument jointly and severally agree and the Assignee by the acceptance of
this assignment agrees to the conditions and provisions herein set forth.
Capitalized terms which are used but not defined herein have the meanings set
forth in the Credit Agreement. may have against the Policy. The undersigned by
this instrument agrees and the Assignee by the acceptance of this assignment
agrees to the conditions and provisions herein set forth. Capitalized terms
which are used but not defined herein have the meanings set forth in the
Intercreditor Agreement.
B. This assignment is made and each Policy is to be held as collateral security
for all Secured Obligations.
C. It is expressly agreed that, without detracting from the generality of the
foregoing, the following specific rights are included in this assignment and
pass by virtue hereof:
1. The sole right to collect from the Insurer the net proceeds of the
Policy when it becomes a claim by death or maturity;
2. The sole right to surrender the Policy and receive the surrender
value thereof at any time provided by the terms of the Policy and at
such other times as the Insurer may allow;
3. The sole right to obtain one or more loans or advances on the
Policy, either from the Insurer or, at any time, from other persons,
and to pledge or assign the Policy as security for such loans or
advances;
4. The sole right to collect and receive all distributions or shares of
surplus, dividend deposits or additions to the Policy now or
hereafter made or apportioned thereto, and to exercise any and all
options contained in the Policy with respect thereto; provided, that
unless and until the Assignee shall notify the Insurer in writing to
the contrary, the distributions or shares of surplus, dividend
deposits and additions shall continue on the plan in force at the
time of this assignment; and
5. The sole right to exercise all nonforfeiture rights permitted by the
terms of the Policy or allowed by the Insurer and to receive all
benefits and advantages derived therefrom.
D. It is expressly agreed that the following specific rights, so long as the
Policy has not been surrendered, are reserved and excluded from this
assignment and do not pass by virtue hereof:
1. The right to collect from the Insurer any disability benefit payable
in cash that does not reduce the amount of insurance;
2. The right to elect any optional mode of settlement permitted by the
Policy or allowed by the Insurer; but the reservation of these
rights shall in no way impair the right of the Assignee to surrender
the Policy completely with all its incidents or impair any other
right of the Assignee hereunder, and any designation or change of
beneficiary or election of a mode of settlement shall be made
subject to this assignment and to the rights of the Assignee
hereunder.
E. The Assignee covenants and agrees with the undersigned as follows:
1. That any balance of sums received hereunder from the Insurer
remaining after payment of the then existing Secured Obligations,
matured or unmatured, shall be paid by the Assignee to the persons
entitled thereto under the terms of the Policy had this assignment
not been executed;
2. That the Assignee will not exercise any rights under paragraph C
hereof (except for the purpose of paying premiums), until there has
been an Actionable Default under the Intercreditor Agreement or a
failure to pay any premium when due, nor until twenty days after the
Assignee shall have mailed, by first- class mail, to the undersigned
at the address(es) last supplied in writing to the Assignee
specifically referring to this assignment, notice of intention to
exercise such right; and
3. That the Assignee will upon request forward without unreasonable
delay to the Insurer the Policy for endorsement of any designation
or change of beneficiary or any election of an optional mode of
settlement.
F. The Insurer is hereby authorized to recognize the Assignee's claims to rights
hereunder without investigating the reason for any action taken by the
Assignee, or the validity or the amount of the Secured Obligations or the
existence of any default therein, or the giving of any notice under Paragraph
E(2) above or otherwise, or the application to be made by the Assignee of any
amounts to be paid to the Assignee. The sole signature of the Assignee shall
be sufficient for the exercise of any right under the Policy assigned hereby
and the sole receipt of the Assignee for any sums received shall be a full
discharge and release therefor to the Insurer. Checks for all or any part of
the sums payable under the Policy and assigned herein, shall be drawn to the
exclusive order of the Assignee if, when, and in such amounts as may be
requested by the Assignee.
G. The Assignee shall be under no obligation to pay any premium, or the
principal of or interest on any loans or advances on the Policy whether or
not obtained by the Assignee, or any other charges on the Policy, but any
such amounts so paid by the Assignee from its own funds, shall become a part
of the Secured Obligations hereby secured, shall be due immediately, and
shall draw interest at a rate equal to the Default Rate under the Credit
Agreement, not exceeding the maximum rate permitted by applicable law.
H. The exercise of any right, option, privilege or power given herein to the
Assignee shall be at the option of the Assignee, but (except as restricted by
paragraph E(2) above) the Assignee may exercise any such right, option,
privilege or power without notice to, or assent by, or affecting the
liability of, or releasing any interest hereby assigned by the undersigned.
I. The Assignee may take or release other security, may release any party
primarily or secondarily liable for any of the Secured Obligations, may grant
extensions, renewals orindulgences with respect to the Secured Obligations,
or may apply to the Secured Obligations in such order as the Assignee shall
determine, the proceeds of the Policy hereby assigned or any amount received
67
on account of the Policy by the exercise of any right permitted under this
assignment, without resorting or regard to other security.
J. In the event of any conflict between the provisions of this assignment and
provisions of the note or other evidence of any Liability, with respect to
the Policy or rights of collateral security therein, the provisions of this
assignment shall prevail.
K. Each of the undersigned declares that no proceedings in bankruptcy are
pending against him and that his property is not subject to any assignment
for the benefit of creditors.
L. The Insurer is hereby authorized to provide to the Assignee the attached
Acknowledgment of Receipt and Insurer Questionnaire.
M. This assignment shall be governed by, and construed in accordance with, the
laws of the State of New York and shall bind and inure to the benefit of the
successors and assigns of the parties hereto.
Signed this day of , 2001
--------- ----------------- ---------
------------------------------------------------------------ ------------------------------------------------------------
Witness XXXXXXXX XXXXX, INC.,
------------------------------------------------------------
Xxxxxxxx Xxxxx, Inc.
0000 Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxx X. Xxxxxxxx, CFO
Telecopier number: 000-000-0000
Confirmation number: 000-000-0000
Individual Acknowledgment
State of ______________________________________
County of _____________________________________} SS:
On the ___________ day of _____________________, ____________, before me
personally came____________________________________to me known to be the
individual described in and who executed the foregoing assignment and
acknowledged to me that he/she executed the same.
________________________________
Notary Public
My commission expires ________________________
Corporate Acknowledgment
State of North Carolina
County of____________________________________} SS:
On the ___________day of _____________________, ____________ before me
personally came _______________________________________, who being by me duly
sworn, did depose and say that he resides in that he is the
__________________________________of Xxxxxxxx Xxxxx, Inc., the corporation
described in and which executed the foregoing assignment; that he knows the seal
of said corporation; that the seal affixed to said assignment is such corporate
seal; that it was so affixed by order of the Board of Directors of said
corporation, and that he signed his name thereto by like order.
________________________________
Notary Public
My commission expires ________________________
68
WACHOVIA LOGO
--------------------------------------------------------------------------------
Acknowledgment of Receipt and Insurer Questionnaire
The Insurer hereby acknowledges that a duplicate of the
foregoing Assignment was received and filed this day at the home office of the
Insurer in
--------------------------------------------------------------
The Insurer hereby responds for the benefit of the Assignee to
the following questions regarding the Policy:
Ownership:
1. Is the ownership of the Policy described in the Assignment
correct as to your records?
-------------------------------------------------------------
Premiums:
1. Premiums paid to _______Annually _______Semiannual
_______Quarterly _______ Monthly _______
Amount of prepaid premiums, if any:__________________________
2. Premium payment branch or agency office name and address:
---------------------------------------------
---------------------------------------------
---------------------------------------------
3. In the event of premium default:
(a). Is A.P.L. provision operative?
----------------------
(b) Will you notify Assignee in ample time for Assignee
to protect its collateral?
-----------------------------------------------------
Policy Cash Value:
1. Cash value as of : $ (Dividends excluded; loans not deducted)
--------------- -----------------------
2. Cash value of accumulated dividends: $ Additions: $
----------------------- ------------------------
Encumbrances:
1. Policy loans (if none, so indicate): $
--------------------------------------------------------------------
2. Any existing assignments, tax liens or other encumbrances applicable to the Policy on your records?
-------------------------------------------------------------------------------------------------------------
If so, please describe
--------------------------------------------------------------------------------------------
Net loan value (amount of cash value for loan purposes):
---------------------------------------------------------
Beneficiary Arrangement:
Please send to the Assignee for execution the following forms or
information indicated by (x):
( ) Form to designate Insured's estate as beneficiary
( ) Form to reinstate the present beneficiary arrangement
subject to the Assignment to the Assignee
( ) Form to provide that settlement with an assignee in the
event of a death claim will be made in a single sum, or, if
such form is not necessary, your assurance that it is your
company's practice to make such a single sum settlement with
an assignee.
69
Special Questions: (Use space below or on reverse side or an attachment if additional space is required)
1. Name of present beneficiary if different from original named in policy:
-------------------------------------------------------------------------------------------------------------
2. Death Settlement Basis: |_| Lump Sum |_| Optional Mode
Describe:
-----------------------------------------------------------------------------------------------
3. Have you recorded the Assignment in an appropriate manner on your records?
[ ] Yes [ ] No
4. Will you notify Assignee at the end of the grace period if premiums are not paid?
[ ] Yes [ ] No
The undersigned, being duly authorized, does hereby represent
and warrant that the information furnished in this Acknowledgment of Receipt and
Insurer Questionnaire is true and correct as of the date hereof.
Date:
--------------------------------------------------------
Name of Insurer
----------------------------------------------------------
By:
--------------------------------------------------------
Authorized Signature
--------------------------------------------------------
Name of Signatory Party - type or print
70
Appendix I
---------------------------------------------------------------------------------------------------------
Insurer Insured Policy Number Amount Date Issued
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
71
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
TOTAL
72
Schedule 5.25(c) to Second Amendment
------------------------------------------------------------------------------------------------------------
Insurer Policy Number Insured Date Issued CSV Amount
------------------------------------------------------------------------------------------------------------
73
74
ANNEX 1 TO
----------
SECOND AMENDMENT TO AND WAIVER UNDER CREDIT AGREEMENT
-----------------------------------------------------
FIRST AMENDMENT TO AMENDED AND RESTATED INTERCREDITOR AGREEMENT
FIRST AMENDMENT TO AMENDED AND RESTATED INTERCREDITOR AGREEMENT ("First
Amendment"), dated as of May 15, 2001, among Wachovia Bank, N.A., in its
capacity as collateral agent hereunder (the "Collateral Agent"), each of the
holders of the Senior Note Holders specified on the signature pages hereof and
each of the Banks specified on the signature pages hereof .
WHEREAS, the Collateral Agent and the Senior Note Holders and Banks
party hereto executed and delivered that certain Amended and Restated
Intercreditor Agreement dated as of November 6, 2000 (the "Intercreditor
Agreement"; capitalized terms used herein without definition have the meanings
given them or incorporated by reference in the Intercreditor Agreement);
WHEREAS, the Credit Agreement and the Note Purchase Agreements are
being amended as of the date hereof and the parties desire to amend the
Intercreditor Agreement in order to make it consistent with such amendments;
NOW, THEREFORE, the parties hereto agree as follows:
1. Amendment to Definitions. The definition contained in the
Intercreditor Agreement hereby are amended by deleting the definition of
"Collateral" and by adding the following new definitions:
"Collateral" has the meaning set forth in the
introductory paragraphs of the Intercreditor Agreement, but also
includes (i) any Additional Lien, as contemplated in Section 5 of the
Intercreditor Agreement, (ii) from and after execution and delivery of
the Life Insurance Assignments pursuant to Section 5.25(c) of the
Credit Agreement and Section 9.9(c) of the Note Agreement, the life
insurance policies described in the Life Insurance Assignments, and
(iii) when and if the UK Subsidiary Collateral Documents are executed
and delivered pursuant to Section 5.25(d) of the Credit Agreement and
Section 9.9(d) of the Note Agreement, the UK Subsidiary Collateral.
"Life Insurance Assignments" has the meaning set
forth in the Credit Agreement, without giving effect to any amendment
thereof after the date hereof.
"Second Amendment Effective Date" means the date of
execution and delivery of the Second Amendment to and Waiver Under
Credit Agreement pertaining to the Credit Agreement, which is the date
hereof.
75
"UK Subsidiary Collateral" has the meaning set forth
in the Credit Agreement, without giving effect to any amendment thereof
after the date hereof.
"UK Subsidiary Collateral Documents" has the meaning
set forth in the Credit Agreement, without giving effect to any
amendment thereof after the date hereof.
2. Amendment to Section 23. Section 23 of the Intercreditor Agreement
hereby is deleted and the following is substituted therefor:
23. Mandatory Prepayments.
Pursuant to amendments to the Transaction Documents
on the Second Amendment Effective Date, but subject to the exercise by
any Senior Note Holder of its contractual right to decline any
mandatory prepayments, certain mandatory prepayments are required to be
made ratably (based on the aggregate outstanding principal amount under
the Bank Notes and under the Senior Notes) to (x) the Bank Agent, for
the ratable benefit of the Banks and (y) ratably to the Senior Note
Holders, and such amendments to the Credit Agreement also provide that
the "Commitments" under the Credit Agreement shall be ratably reduced
by the amount of all such prepayments received by the Bank Agent
pursuant to such provisions. Capitalized terms which are used below
without definition have the meanings set forth in the Credit Agreement.
Such provisions for mandatory prepayments to be made ratably on the
Bank Notes and Senior Notes are as follows:
(a) If on any Commitment Reduction Date or Cash Flow
Certificate Delivery Date under the Credit Agreement the principal
amount of the outstanding Loans exceeds to the amount of the new
Commitment level set forth for such Commitment Reduction Date in the
table contained in Section 2.08(b) of the Credit Agreement or the
amount to which the Commitments otherwise would be reduced on the Cash
Flow Certificate Delivery Date by virtue of such Section 2.08(b) (the
amount of such excess being the "Outstanding Excess"), then a
prepayment in the aggregate amount of the Outstanding Excess shall be
made ratably on the Loans and the Senior Notes.
(b) Upon receipt by the Company or any Domestic
Subsidiary of Net Proceeds of Asset Dispositions from any Receivables
Securitization Program, the Company shall certify to the Bank Agent and
the Collateral Agent the amount of Net Proceeds of Asset Dispositions
so received and the current amount of Maximum Available Proceeds under
such Receivables Securitization Program and prepay the outstanding
Loans and Senior Notes in an aggregate principal amount equal to 85% of
such Net Proceeds of Asset Dispositions, but including such Net
Proceeds of Asset Dispositions only to the extent they are derived from
sales of Receivables in an aggregate amount in excess of the highest
level of aggregate sales of Receivables for which Net Proceeds of Asset
Dispositions have previously been paid pursuant to this paragraph (b).
(c) After the Second Amendment Effective Date, each
time during any Fiscal Year in which Net Proceeds of Asset Dispositions
in excess of $100,000 from any sale or disposition of any Collateral
(other than sales of Inventory in the ordinary course of business or in
connection with a Receivables Securitization Program or Permitted
Factoring Arrangement), has been received by the Borrower or any
76
Domestic Subsidiary since the later of (x) the first day of such Fiscal
Year and (y) the date of the most recent prepayment made during such
Fiscal Year pursuant to this Section 23(c), if any (each such later
date being a "Collateral Net Proceeds Aggregation Date"), within 3
Domestic Business Days after such Collateral Net Proceeds Aggregation
Date, the Company shall certify to the Bank Agent and the Collateral
Agent the amount of Net Proceeds of Asset Dispositions so received as
of such Collateral Net Proceeds Aggregation Date and after any prior
Collateral Net Proceeds Aggregation Date during such Fiscal Year, and
prepay the outstanding Loans and Senior Notes by an aggregate principal
amount equal to 100% of such Net Proceeds of Asset Dispositions
received as of such Collateral Net Proceeds Aggregation Date and after
any prior Collateral Net Proceeds Aggregation Date during such Fiscal
Year.
(d) After the Second Amendment Effective Date, each
time during any Fiscal Year in which Net Proceeds of Asset Dispositions
in excess of $100,000 from any sale or disposition of any asset (other
than Collateral, sales of Inventory in the ordinary course of business
or in connection with a Receivables Securitization Program or Permitted
Factoring Arrangement), has been received by the Borrower or any
Domestic Subsidiary since the later of (x) the first day of such Fiscal
Year and (y) the date of the most recent prepayment made during such
Fiscal Year pursuant to this Section 23(d), if any (each such later
date being a "Non-Collateral Net Proceeds Aggregation Date"), within 3
Domestic Business Days after such Non-Collateral Net Proceeds
Aggregation Date, the Company shall certify to the Bank Agent and the
Collateral Agent the amount of Net Proceeds of Asset Dispositions so
received as of such Non-Collateral Net Proceeds Aggregation Date and
after any prior Non-Collateral Net Proceeds Aggregation Date during
such Fiscal Year, and prepay the outstanding Loans and Senior Notes by
an aggregate principal amount equal to 75% of such Net Proceeds of
Asset Dispositions received as of such Non-Collateral Net Proceeds
Aggregation Date and after any prior Non-Collateral Net Proceeds
Aggregation Date during such Fiscal Year.
(e) Except as expressly provided in the Morelos
Assets Sale Letter, after the Second Amendment Effective Date, within 5
Domestic Business Days after any Foreign Subsidiary receives Net
Proceeds of Asset Dispositions from any Foreign Sale-Leaseback
Transaction, the Company shall certify to the Bank Agent and the
Collateral Agent the amount of Net Proceeds of Asset Dispositions so
received and prepay the outstanding Loans and Senior Notes in an
aggregate principal amount equal to 100% of the amount of such Net
Proceeds of Asset Dispositions.
(f) After the Second Amendment Effective Date, within
3 Domestic Business Days after the Company or any Domestic Subsidiary
receives Net Proceeds of Debt in excess of $250,000, the Company shall
certify to the Bank Agent and the Collateral Agent the amount of Net
Proceeds of Debt so received and prepay the outstanding Loans and
Senior Notes in an aggregate principal amount equal to 100% of the
amount by which such Net Proceeds of Debt exceeds an aggregate amount
of Net Proceeds of Debt so received since the Second Amendment
Effective Date of $250,000.
(g) After the Second Amendment Effective Date, within
5 Domestic Business Days after any Foreign Subsidiary receives Net
Proceeds of Debt or incurs any obligations under a Foreign Capital
77
Lease (in each case other than Debt permitted by Section 5.24(A) of the
Credit Agreement and Section 10.14(a) of the Note Agreement), the
Company shall certify to the Bank Agent and the Collateral Agent the
amount of Net Proceeds of Debt pertaining thereto and prepay the
outstanding Loans and Senior Notes in an aggregate principal amount
equal to 75% of the amount of such Net Proceeds of Debt, or, in the
case of a Foreign Capital Lease, the present value (using a discount
rate equal to the implicit interest rate of such Foreign Capital Lease)
of the aggregate amount of basic rent (excluding taxes, insurance and
similar other charges) required to be paid during the term of such
Foreign Capital Lease (excluding any renewal term, but including any
payment required to be made at the end of the term as a result of
failure to renew or purchase the property).
(h) After the Second Amendment Effective Date, within
3 Domestic Business Days after the Borrower or any Foreign Subsidiary
receives any repayment of Investments made as permitted by Section
5.15(xii), (xiii) or (xiv) of the Credit Agreement and Section
10.6(xii), (xiii) or (xiv) of the Note Agreement, the Company shall
certify to the Bank Agent and the Collateral Agent the amount of Net
Proceeds of Loan Repayment so received and prepay the outstanding Loans
and Senior Notes in an aggregate principal amount equal to 100% of such
Net Proceeds of Loan Repayment.
(i) After the Second Amendment Effective Date, within
3 Domestic Business Days after the Company or any Consolidated
Subsidiary receives any Net Proceeds of Capital Stock (excluding Net
Proceeds of Capital Stock issued in connection with the exercise of any
management or employee stock option, so long as the Company or such
Consolidated Subsidiary does not incur any net cash cost in connection
with the exercise of such option), the Company shall certify to the
Bank Agent and the Collateral Agent the amount of Net Proceeds of
Capital Stock pertaining thereto and prepay the outstanding Loans and
Senior Notes in an aggregate principal amount equal to 100% of the
amount of such Net Proceeds of Capital Stock.
(j) Upon receipt by the Company or any Domestic
Subsidiary of Net Proceeds of Special Transaction, the Company shall
certify to the Bank Agent and the Collateral Agent the amount of Net
Proceeds of Special Transaction so received and prepay the outstanding
Loans and Senior Notes in an aggregate principal amount equal to 100%
of such Net Proceeds of Special Transaction.
Each Secured Party hereby agrees that any payment received by
it pursuant to this Section 23 shall, for all purposes under this Agreement,
including, without limitation, the calculation of distributions of additional
mandatory prepayments under this Section 23, be deemed to have been applied
solely to the outstanding principal balance under its Bank Note or Senior Note,
as the case may be (but each Secured Party reserves the right to actually apply
such payment to other components of its Secured Obligations).
3. Conditions Precedent. This First Amendment shall be effective upon
(i) execution and delivery of a counterpart hereof by each party hereto and of
the Consent and Reaffirmation of the Company and the Guarantors at the end
hereof by the parties thereto and (ii) execution of the Second Amendment to and
Waiver Under Credit Agreement and the amendments to the Note Purchase Agreements
contemplated in the recitals hereto, in each case satisfactory to all Secured
Parties.
78
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be duly executed as of the day and year first above written.
COLLATERAL AGENT:
WACHOVIA BANK, N.A.
By:
-------------------------------------
Name:
Title:
BANKS:
WACHOVIA BANK, N.A.
By:
-------------------------------------
Name:
Title:
79
FIRST UNION NATIONAL BANK
By:
-------------------------------------
Name:
Title:
80
BANK ONE, NA
(Main Office Chicago)
By:
-------------------------------------
Name:
Title:
81
BRANCH BANKING AND TRUST COMPANY
By:
-------------------------------------
Name:
Title:
82
NOTEHOLDERS:
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
-------------------------------------
Name:
Title:
83
THE VARIABLE ANNUITY LIFE
INSURANCE COMPANY
By:
-------------------------------------
Name:
Title:
84
AMERICAN GENERAL ANNUITY
INSURANCE COMPANY
By:
-------------------------------------
Name:
Title:
85
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc. as
Investment Adviser
By:
-------------------------------------
Name:
Title:
86
C. M. LIFE INSURANCE COMPANY
By: Xxxxx X. Xxxxxx & Company Inc. as
Investment Sub-Adviser
By:
-------------------------------------
Name:
Title:
87
CONSENT AND REAFFIRMATION OF THE COMPANY AND THE GUARANTORS
The undersigned, although not a party thereto, (i) consent to the
execution and delivery of the First Amendment to Amended and Restated
Intercreditor Agreement to which this Consent And Reaffirmation of the Company
and the Guarantors is attached (the "First Amendment"), (ii) consents to the
execution and delivery of the Life Insurance Assignments and UK Subsidiary
Collateral Documents described therein by the parties thereto, (iii) reaffirms
all of its obligations and covenants under the Acknowledgment and Agreement at
the end of the Intercreditor Agreement executed by it, and (iv) agrees that none
of such obligations and covenants shall be affected by the execution and
delivery of the First Amendment or of the Life Insurance Assignments and UK
Subsidiary Collateral Documents. This Consent and Reaffirmation of the Company
and the Guarantors 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.
IN WITNESS WHEREOF, the party below has caused this Consent And
Reaffirmation of the Company and the Guarantors to be duly executed as of the
date first above written.
XXXXXXXX XXXXX, INC.
By:
-------------------------------------
Name:
Title:
CURTAINS AND FABRICS, INC.
By:
-------------------------------------
Name:
Title:
GOLD XXXXX, INC.
By:
-------------------------------------
Name:
Title:
88
RASCHEL FASHION INTERKNITTING, LTD.
By:
---------------------------------------
Name:
Title:
GUILFORD INTERNATIONAL, INC.,
a U.S. Virgin Islands corporation
GFD FABRICS, INC.,
a North Carolina corporation
GFD SERVICES, INC.,
a Delaware corporation
By:
---------------------------------------
Title:
---------------------------------
MEXICAN INDUSTRIES OF NORTH
CAROLINA, INC. a North Carolina corporation (SEAL)
XXXXXXX LACES, LTD.,
a New York corporation (SEAL)
ADVISORY RESEARCH SERVICES, INC.
a North Carolina corporation (SEAL)
XXXXXXXX XXXXX (MICHIGAN), INC.
a Michigan corporation (SEAL)
GUILFORD AIRMONT, INC.,
a North Carolina corporation (SEAL)
GOLD MILL FARMS, INC.,
a North Carolina corporation (SEAL)
GMI COMPUTER SALES, INC.
a North Carolina corporation (SEAL)
By:
---------------------------------------
Title:
---------------------------------
TWIN RIVERS TEXTILE PRINTING AND FINISHING,
a North Carolina general partnership
By: Advisory Research Services, Inc.
a General Partner
By:
---------------------------------------
Title:
---------------------------------
89
