EXECUTION COPY
FIFTH AMENDMENT
TO REVOLVING CREDIT
AND GUARANTY AGREEMENT
FIFTH AMENDMENT, dated as of June 14, 1999 (the "AMENDMENT"), to the
REVOLVING CREDIT AND GUARANTY AGREEMENT dated as of January 7, 1998 among
PARAGON TRADE BRANDS, INC., a Delaware corporation (the "BORROWER"), a debtor
and debtor-in-possession under Chapter 11 of the Bankruptcy Code, the Guarantors
named therein (the "GUARANTORS"), THE CHASE MANHATTAN BANK, a New York banking
corporation ("CHASE"), each of the other financial institutions party thereto
(together with Chase, the "BANKS") and THE CHASE MANHATTAN BANK, as Agent for
the Banks (in such capacity, the "AGENT"):
W I T N E S S E T H:
WHEREAS, the Borrower, the Guarantors, the Banks and the Agent are
parties to that certain Revolving Credit and Guaranty Agreement, dated as of
January 7, 1998 (as heretofore amended pursuant to the First Amendment to
Revolving Credit and Guaranty Agreement dated as of January 30, 1998, the Second
Amendment to the Revolving Credit and Guaranty Agreement dated as of March 23,
1998, the Third Amendment to the Revolving Credit and Guaranty Agreement dated
as of April 15, 1998 and the Fourth Amendment to the Revolving Credit and
Guaranty Agreement dated as of September 28, 1998, and as the same may be
further amended, modified or supplemented from time to time, the "CREDIT
AGREEMENT"); and
WHEREAS, the Borrower and the Guarantors have requested that from and
after the Effective Date (as hereinafter defined) of this Amendment, the Credit
Agreement be amended subject to and upon the terms and conditions set forth
herein;
NOW, THEREFORE, it is agreed:
1. As used herein all terms that are defined in the Credit Agreement
shall have the same meanings herein.
2. The definition of the term "Borrowing Base" set forth in Section 1.01
of the Credit Agreement is hereby amended in its entirety to read as follows:
"BORROWING BASE" shall mean on any day an amount that is
equal to the sum, without duplication, of (a) Available Accounts
Receivable PLUS (b) Available Inventory PLUS (c) the Real
Property Component. The Borrowing Base shall be computed in
accordance with Section 5.10. The Borrowing Base at any time in
effect shall be
determined by reference to the Borrowing Base Certificate most
recently delivered hereunder.
3. The definition of the term "Borrowing Base Certificate" set forth in
Section 1.01 of the Credit Agreement is hereby amended by deleting the
"PROVIDED" clause appearing at the end thereof.
4. The definition of the term "Maturity Date" set forth in Section 1.01
of the Credit Agreement is hereby amended in its entirety to read as follows:
"MATURITY DATE" shall mean March 26, 2000.
5. Section 1.01 of the Credit Agreement is hereby amended by inserting
the following new definitions in appropriate alphabetical order:
"EFFECTIVE DATE" shall have the meaning given such term in
the Fifth Amendment.
"FIFTH AMENDMENT" shall mean the Fifth Amendment to this
Agreement dated as of June 14, 1999.
6. Section 4.02(g) of the Credit Agreement is hereby amended in its
entirety to read as follows:
(g) BORROWING BASE CERTIFICATE. The Agent shall have
received the timely delivery of the most recent Borrowing Base
Certificate required to be delivered pursuant to Section 5.10.
7. Section 4 of the Credit Agreement is hereby amended by inserting the
following new Section 4.03 at the end thereof:
SECTION 4.03. CONDITIONS PRECEDENT TO EXTENSION OF THE
MATURITY DATE. The effectiveness of the extension of the Maturity
Date pursuant to, and of the other modifications to this
Agreement contemplated by, the Fifth Amendment is subject to the
satisfaction of the following conditions precedent:
(a) ORDER. On or before the Effective Date, the Agent and
the Banks shall have received a certified copy of an order of the
Bankruptcy Court, in form and substance satisfactory to the Agent
(the "Extension Order"), approving the terms of the Fifth
Amendment (including the payment of the Amendment Fee required
thereunder)
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which Extension Order shall be in full force and effect, and
shall not have been stayed, reversed, modified or amended in any
respect.
(b) OPINION OF COUNSEL TO THE BORROWER. The Agent and the
Banks shall have received the favorable written opinion of
counsel to the Borrower and the Guarantors, dated the Effective
Date, in form and substance satisfactory to the Agent.
(c) PAYMENT OF AMENDMENT FEE. The Borrower shall have paid
to the Agent for the account of the Banks the Amendment Fee
referred to in the Fifth Amendment.
(d) CORPORATE AND JUDICIAL PROCEEDINGS. All corporate and
judicial proceedings and all instruments and agreements in
connection with the transactions among the Borrower, the
Guarantors, the Agent and the Banks contemplated by the Fifth
Amendment shall be reasonably satisfactory in form and substance
to the Agent, and the Agent shall have received all information
and copies of all documents and papers; including records of
corporate and judicial proceedings, which the Agent may have
reasonably requested in connection therewith, such documents and
papers where appropriate to be certified by proper corporate,
governmental or judicial authorities.
(e) REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained in this Agreement and the other Loan
Documents or otherwise made in writing in connection herewith or
therewith shall be true and correct in all material respects on
and as of the Effective Date, and the Agent shall have received a
certificate from a Financial Officer of the Borrower to such
effect.
(f) NO DEFAULT. On the Effective Date (and after giving
effect to the terms of paragraph 11 of the Fifth Amendment), the
Borrower and Guarantors shall be in compliance with all of the
terms and provisions set forth herein to be observed or performed
and no unwaived Event of Default or event which upon notice or
lapse of time or both would constitute an Event of Default shall
have occurred and be continuing, and the Agent and the Banks
shall have received a certificate from a Financial Officer to
such effect.
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8. Section 5.10 of the Credit Agreement is hereby amended in its
entirety to read as follows:
BORROWING BASE CERTIFICATE. Furnish to the Agent as soon
as available and in any event (a) on or before Wednesday of each
week a Borrowing Base Certificate for the last day of the
immediately preceding week and (b) within 15 days after the end
of each fiscal month a Borrowing Base Certificate showing the
Borrowing Base as of the close of business on the last day of
such fiscal month, each such certificate to be certified as
complete and correct on behalf of the Borrower by a Financial
Officer of the Borrower, and (c) such other supporting
documentation and additional reports with respect to the
Borrowing Base that are satisfactory to the Agent, PROVIDED that
the Borrower shall not be required to furnish a weekly Borrowing
Base Certificate pursuant to clause (a) above for any week during
which, at all times, (x) the sum of the Borrower's cash PLUS
Permitted Investments PLUS (so long as such cash is maintained
with the Agent) cash of the Guarantors EXCEEDS by more than
$7,500,000 (y) the sum of the aggregate outstanding principal
amount of the Loans PLUS the aggregate Letter of Credit
Outstandings.
9. Section 6.04 (b) of the Credit Agreement is hereby amended in its
entirety to read as follows:
(b) Make Capital Expenditures during each of the four
fiscal quarters ending on each of the dates listed below in an
aggregate amount in excess of the amount specified opposite such
date:
DATE AMOUNT
June 27, 1999 $44,550,000
September 26, 1999 $45,124,000
December 26, 1999 $44,433,000
March 26, 2000 $46,000,000
10. Section 6.05(b) of the Credit Agreement is hereby amended by (i)
deleting the last line of the table appearing therein and inserting the
following in lieu thereof:
June 27, 1999 and the
last day of each fiscal
month thereafter $30,000,000
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11. The Banks hereby waive the Borrower's failure to have delivered the
monthly financial projections referred to in Section 5.01(d) of the Credit
Agreement on each occasion that such monthly financial projections were due
(such projections having been actually delivered together with the financial
statements for the periods ended March 29, 1998, September 27, 1998 and March
29, 1999 and, in the case of the latter projections, having been prepared on a
quarterly and not a monthly basis) and the monthly cash flow reports required by
Section 5.01(e) of the Credit Agreement on each occasion that such monthly cash
flow reports were due (such reports having been furnished, subsequent to
November of 1998, on a fiscal year and quarterly basis only), provided that the
Borrower complies with the provisions of Section 5.01(d) for the quarter ended
June 27, 1999 and for each quarter thereafter and the Borrower complies with
Section 5.01(e) for the fiscal month ending May 30, 1999 and each fiscal month
thereafter.
12. The Borrower hereby agrees to pay an amendment fee in connection
with this Amendment in an amount equal to $187,500 (the "AMENDMENT FEE"), which
fee shall be payable on or prior to the Effective Date to the Agent for the
account of the Banks (or their respective successors and assigns, as the case
may be).
13. This Amendment shall not become effective (the "EFFECTIVE DATE")
until (i) the date on which this Amendment shall have been executed by the
Borrower, the Guarantors, the Banks and the Agent, and the Agent shall have
received evidence satisfactory to it of such execution, (ii) the Amendment Fee
shall have been paid to the Agent on behalf of the Banks, and (iii) the Agent
shall have received evidence satisfactory to it that each of the conditions
precedent set forth in Section 4.03 of the Credit Agreement as amended hereby
have been satisfied.
14. The Borrower, the Guarantors and the Banks agree that promptly after
the occurrence of the Effective Date they shall execute and deliver an Amended
and Restated Revolving Credit and Guaranty Agreement reflecting in a single
document the terms and provisions of the Credit Agreement as heretofore modified
and as modified by this Amendment.
15. Except to the extent hereby amended, the Credit Agreement and each
of the Loan Documents remain in full force and effect and are hereby ratified
and affirmed.
16. The Borrower agrees that its obligations set forth in Section 10.05
of the Credit Agreement shall extend to the preparation, execution and delivery
of this Amendment, including the reasonable fees and disbursements of counsel to
the Agent.
17. This Amendment shall be limited precisely as written and shall not
be deemed (a) to be a consent granted pursuant to, or a waiver or modification
of, any other term or condition of the Credit Agreement or any of the
instruments or agreements referred to therein or (b) to prejudice any right or
rights which the Agent or the Banks may now have or have in the future under or
in connection with the Credit Agreement or any of the instruments or agreements
referred to therein. Whenever the Credit Agreement is referred to in the Credit
Agreement or any of the instruments,
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agreements or other documents or papers executed or delivered in connection
therewith, such reference shall be deemed to mean the Credit Agreement as
modified by this Amendment.
18. This Amendment may be executed in any number of counterparts and by
the different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
19. THIS AMENDMENT SHALL IN ALL RESPECTS BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the day and the year first above written.
PARAGON TRADE BRANDS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
PTB INTERNATIONAL, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
PTB HOLDINGS, INC., FORMERLY KNOWN AS CHANGING
PARADIGMS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
PARAGON TRADE BRANDS FSC, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
PTB ACQUISITION SUB, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
THE CHASE MANHATTAN BANK,
INDIVIDUALLY AND AS AGENT
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
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AMSOUTH BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Attorney in Fact
THE BANK OF NOVA SCOTIA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Manager
▇▇▇▇▇▇ FINANCIAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
IBJ WHITEHALL BUSINESS CREDIT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III
Title: Senior Vice President
PNC BANK, NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
WACHOVIA, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
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