EXHIBIT (4h)
WAIVER AND FIRST AMENDMENT TO
CREDIT AGREEMENT
THIS WAIVER AND FIRST AMENDMENT TO CREDIT AGREEMENT, dated
as of February 27, 1996 (this "Amendment"), and effective as of the
Effective Date (as such term is defined below) is entered into by and among
XXXXX YARNS, INC., a Tennessee corporation (referred to herein as the
"Borrower"), SUNTRUST BANK, ATLANTA (formerly known as Trust Company Bank),
a Georgia banking corporation, individually and as Agent (in such capacity,
the "Agent"), NATIONSBANK, N.A. (formerly known as NationsBank, N.A.
(Carolinas), a national banking association, individually and as Lead
Manager and CHEMICAL BANK, a New York banking corporation (collectively,
the "Lenders").
WITNESSETH:
WHEREAS, the Borrower, the Agent and the Lenders are parties to a
certain Third Amended and Restated Credit Agreement dated as of March 31,
995 (the "Credit Agreement;" all terms used herein without definition shall
have the meanings set for in the Credit Agreement) wherein the Lenders
extended to the Borrower certain loan facilities in an aggregate principal
amount at any time outstanding not to exceed $135,000,000 (as subsequently
reduced on September 18, 1995 by an amount equal to $2,835,936);
WHEREAS, the Borrower has requested that the Lenders(i) waive
compliance with a certain financial covenant set forth in the Credit
Agreement for the last fiscal quarter of 1995, (ii) amend the Credit
Agreement to modify certain financial covenants, and (iii) add a certain
financial covenant;
WHEREAS, Lenders have agreed to such waivers and amendments on the
terms and conditions set forth herein;
WHEREAS, the parties wish to amend the Credit Agreement to reflect
these agreements, all upon the terms and subject to the conditions set
forth herein;
NOW, THEREFORE, for and in consideration of the mutual premises
contained herein and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to be legally bound, agree as follows:
1. Section 1.01 of the Credit Agreement is hereby amended as follows:
(a) by adding the following definition thereto in appropriate
alphabetical order:
"EBITDA" shall mean, for any period, EBIT for such period,
plus, to the extent deducted in determining Net Income or such period,
the depreciation and amortization expense of the Borrower and its
Subsidiaries for such period determined on a consolidated basis in
accordance with generally accepted accounting principles."
(b) by deleting the definition of "Total Capitalization" in its
entirety and substituting the following in lieu thereof:
"Total Capitalization" shall mean the sum of (i) Total Debt, plus
(ii) Net Worth, plus (iii) for any calculation of Total Capitalization
on or after the last day of fiscal year 1995, an amount not to exceed
$31,400,000 relating to the write-down of assets of T-C Threads, Inc.
and its Subsidiaries."
2. Section 9.11 of the Credit Agreement is hereby amended by deleting
subsections (a) and (c) thereof in its entirety and substituting the
following subsections (a) and (c) in lieu thereof:
"(a) Total Debt to Total Capitalization. Its ratio of Total Debt
to Total Capitalization as of the last day of any fiscal quarter of
the Borrower occurring during the periods set forth below to be
greater than the ratio (expressed as a percentage) set forth opposite
such period:
Period Ratio
Closing Date through the last day of
fiscal year 1996 65%
First day of fiscal year 1997 through the last
day of fiscal year 1997 62.5%
First day of fiscal year 1998 through the last
day of fiscal year 1998 60%
First day of fiscal year 1999 and thereafter 57.5%
(c) Interest Coverage Ratio. Its Interest Coverage Ratio as of
any of the dates set forth below to be less than the ratio set forth
opposite such period below:
Period Ratio
Fiscal quarter ending on or about
March 31, 1995 1.25:1.0
Two preceding fiscal quarters ending on or
about June 30, 1995 1.25:1.0
Three preceding fiscal quarter ending on or
about September 30, 1995 1.25:1.0
Four preceding fiscal quarters ending on or
about December 31, 1995 1.25:1.0
Fiscal Quarter ending on or about March 31, 1996 Not Required
Fiscal Quarter ending on or about June 30, 1996 .75:1.0
Fiscal Quarter ending on or about
September 30, 1996 1.15:1.0
Fiscal Quarter ending on or about
December 31, 1996 1.15:1.0
Two preceding fiscal quarters ending on or about
December 31, 1996 1.15:1.0
Three preceding fiscal quarters ending on or
about March 31, 1997 1.15:1.0
Four preceding fiscal quarters ending on or about
each of June 30, 1997, September 30, 1997, and
December 31, 1997 1.25:1.0
Four preceding fiscal quarters ending on the last
day of each of the fiscal quarters in fiscal
year 1998 1.5:1.0
Four preceding fiscal quarters ending on the last
day of each of the fiscal quarters in fiscal
year 1999 and thereafter 1.75:1.0. "
3. Section 9.11 of the Credit Agreement is hereby further amended by
adding the following subsection (e) thereto:
"(e) EBITDA to Interest Expense Ratio. Its ratio of EBITDA
Interest Expense for the first fiscal quarter of 1996 ending on or
about March 31, 1996 to be less than 2.0:1.0."
4. The Borrower has requested and the Lenders have agreed to waive,
for the fiscal quarter of the Borrower ending on or about December 31, 995,
compliance with the Interest Coverage Ratio set forth in Section 9.11(c) of
the Credit Agreement.
5. The Borrower hereby agrees that nothing herein shall constitute a
waiver by the Lenders of any Default or Event of Default, whether known or
unknown, which may now exist or which may hereafter exist under the Credit
Agreement except as specifically set forth in Section 4 hereof, including
without limitation, any violation of Section 9.11(c) of the Credit
Agreement arising or continuing after the fiscal quarter of the Borrower
ending on or about March 31, 1996. The Borrower represents and warrants to
the Agent and the lenders that as of the date hereof, no Default or Event
of Default exists pursuant to the Credit Agreement which is not expressly
waived herein.
6. Except as expressly amended and modified herein, all terms,
covenants and provisions of the Credit Agreement shall remain unaltered and
in full force and effect, and the parties hereto do expressly ratify and
confirm the Credit Agreement as modified herein. As of the Effective Date,
all future references to the Credit Agreement shall be deemed to refer to
the Credit Agreement as amended hereby.
7. Borrower agrees to pay on demand all reasonable costs and expenses
of the Agent in connection with the preparation, execution and delivery of
the Amendment, including, without limitation, the reasonable fees and out-
of-pocket expenses of counsel for the Agent with respect hereto and with
respect to advising the Agent as to its rights and responsibilities
hereunder.
8. This Amendment shall become effective as of December 30, 1995 (the
"Effective Date") on the first day when this Amendment shall have been
executed by the Borrower and the Required Lenders and delivered to the
Agent in its office in Atlanta, Georgia.
9. This Amendment shall be binding upon the inure to the benefit of
the parties hereto, their respective heirs, successors, successors-in-
title, and assigns.
10. This Amendment shall be governed by and construed in accordance
with the laws of the State of Georgia.
11. This Amendment sets forth the entire understanding of the parties
with respect to the matters set forth herein, and shall supersede any prior
negotiations or agreements, whether written or oral, with respect thereto.
12. This Amendment may be executed in any number of counterparts and
by different parties hereto in separate counterparts and may be delivered
by telecopier. Each counterpart so executed and delivered shall be deemed
an original and all of which taken together shall constitute but one and
the same instrument.
EXECUTED AND DELIVERED by the duly authorized officers of the
parties hereto under seal as of the day and year first above written.
XXXXX YARNS, INC.
By: Xxxx X. Xxxxxx
Title: Treasurer
Attest: Starr X. Xxxxx
Title: Secretary
SUNTRUST BANK, ATLANTA (formerly
known as Trust Company Bank),
individually and as Agent
By: Xxxxxxxx X. Xxxxx, III
Title: Vice President
By: Xxxx X. Xxxxxxx
Title: Assistant Vice President
EXECUTED AND DELIVERED by the duly authorized officers of the
parties hereto under seal as of the day and year first above written.
NATIONSBANK, N.A. (formerly known
as NationsBank, N.A. (Carolinas)),
individually and as Lead Manager
By: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
CHEMICAL BANK
By: Xxxxx X. Xxxxxxxx
Title: Vice President
