Exhibit 10.1
THIRD AMENDMENT, CONSENT AND WAIVER OF
POST-PETITION CREDIT AGREEMENT
THIS THIRD AMENDMENT, CONSENT AND WAIVER OF POST-PETITION CREDIT AGREEMENT
(this "Amendment"), dated as of August 13, 2001, is entered into among PILLOWTEX
CORPORATION, PILLOWTEX, INC., PTEX HOLDING COMPANY, PILLOWTEX MANAGEMENT
SERVICES COMPANY, BEACON MANUFACTURING COMPANY, XXXXXXX HOME FASHIONS, INC.,
TENNESSEE WOOLEN XXXXX, INC., FIELDCREST XXXXXX, INC., CRESTFIELD COTTON
COMPANY, ENCEE, INC., FCC CANADA, INC., FIELDCREST XXXXXX FINANCING, INC.,
FIELDCREST XXXXXX LICENSING, INC., FIELDCREST XXXXXX INTERNATIONAL, INC.,
FIELDCREST XXXXXX XX, INC. (formerly known as Fieldcrest Xxxxxx Sure Fit, Inc.),
FIELDCREST XXXXXX TRANSPORTATION, INC., ST. MARYS, INC., AMOSKEAG MANAGEMENT
CORPORATION, DOWNEAST SECURITIES CORPORATION, BANGOR INVESTMENT COMPANY, XXXXX'X
FALLS CORPORATION, THE XXXXXXX CORPORATION, XXXXXXX OF CALIFORNIA, INC., and
OPELIKA INDUSTRIES, INC. (collectively, the "Borrowers"), the institutions
listed on the signature pages hereof that are parties to the Credit Agreement
defined below (collectively, the "Lenders"), and BANK OF AMERICA, N.A., as
Administrative Agent for itself and the Lenders (in said capacity, the
"Administrative Agent").
BACKGROUND
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A. The Borrowers, the Lenders and the Administrative Agent are parties to
that certain Post-Petition Credit Agreement, dated as of November 14, 2000 (as
amended through the date hereof, the "Credit Agreement"). Terms defined in the
Credit Agreement and not otherwise defined herein shall be used herein as
defined in the Credit Agreement.
B. The Borrowers, the Lenders and the Administrative Agent desire to make
certain amendments to the Credit Agreement.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Borrowers,
the Lenders and the Administrative Agent covenant and agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended
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as follows:
(a) Section 1.1 is amended by amending the definition of "EBITDA" in
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its entirety, as follows:
"EBITDA": for any period, determined in accordance with GAAP on
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a consolidated basis for the Borrowers and their Subsidiaries the sum
of (a) Earnings From Operations plus (b) depreciation and amortization
to the extent included in determining Earnings From Operations, plus
(c) professional fees incurred outside the ordinary course of business
including legal counsel, financial advisors, human resource
consultants, manufacturing consultants, and cash management
consultants to the extent included in determining Earnings From
Operations, plus (d) non-cash charges associated with the permanent
closure of a facility or facilities to the extent included in
determining Earnings From Operations, plus, (e) cash charges
associated with the permanent closure of a facility or facilities to
the extent included in determining Earnings From Operations, plus (f)
non-cash charges associated with the write-down or adjustment of net
asset values including goodwill to the extent included in determining
Earnings From Operations, plus (g) other non-cash charges (excluding
any such non-cash charge to the extent it represents an accrual of or
reserve for cash charges in any future period or amortization of a
prepaid cash expense that was paid in a prior period except as noted
in (d) and (e), above) to the extent included in determining Earnings
From Operations, plus (h) payments or accruals related to a Bankruptcy
Court approved key employee retention program, plus (i) payments for
severance made prior to the Filing Date to the extent deducted in
determining Earnings From Operations, plus (j) Earnings From
Operations associated with the Borrowers' blankets division, to the
extent included in determining consolidated Earnings From Operations.
(b) Section 4.12 is entirely amended, as follows:
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4.12 [Intentionally deleted].
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(c) Section 7.1(c) is entirely amended, as follows:
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(c) as soon as practical, but in any event within 20 Business
Days after the end of each fiscal month of each fiscal year other than
the last fiscal month of each fiscal quarter, and within 45 Business
Days after the end of the last fiscal month of each fiscal quarter,
commencing as of the fiscal month ending on December 2, 2000, the
unaudited Consolidated balance sheet of the Parent Corporation and its
Subsidiaries as at the end of such month and the related unaudited
Consolidated statement of income and statement of cash flows of the
Parent Corporation and its Subsidiaries for such month and for the
portion of the fiscal year of the Parent Corporation and its
Subsidiaries through such date in the form and detail similar to those
customarily prepared by management of the Parent Corporation for
internal use, setting forth in each case (a) detailed results of
operations and cash flow, and (b) in comparative form the Consolidated
figures for the corresponding month of, and year to date portion of,
the previous year and the figures for such periods in the
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Budget, certified by the chief financial officer, controller or
treasurer of the Parent Corporation as being fairly stated in all
material respects, subject to year-end audit adjustments; provided
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that such financial information for the fiscal months ending December
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30, 2000 and February 2, 2001 will not be required to be delivered
until the earlier of (i) five (5) days after the completion of the
financial statement audit of the Parent Corporation for the fiscal
year 2000 by the Parent Corporation's outside auditor, KPMG, and (ii)
March 23, 2001.
(d) New Sections 7.1(n) and (o) are added immediately following
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Section 7.1(m), as follows:
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(n) as soon as practical, but in any event no later than 20
Business Days after the end of each fiscal month of the Parent
Corporation, (i) a report on consummated asset sales and the status of
proposed asset sales, (ii) a report on the status of the Subject
Assets (as defined in the Financing Orders), including detail
regarding collection of accounts relating to the Subject Assets, and
(iii) a supplement, in electronic form, to the list of claims filed in
the Bankruptcy Case provided to Administrative Agent on August _____,
2001, all in form and detail satisfactory to the Administrative
Agent; and
(o) as soon as practical, but in any event no later than 20
Business Days after the end of the last fiscal month of each fiscal
quarter of the Parent Corporation, a draft of the financial statements
required to be delivered under Section 7.1(c) above for such month;
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provided that, the accompanying certificate may be qualified to the
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effect that the financial information is based on preliminary
estimates, may not reflect all accounting adjustments being considered
by the Parent Corporation, and may be subject to adjustment.
(e) Section 8.16 is entirely amended, as follows:
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Section 8.16 Asset Coverage Ratio. Permit, at any time,
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determined in accordance with GAAP on a consolidated basis for the
Borrowers and their Subsidiaries, the ratio of (a) the sum of (i) the
net book value of accounts receivable, plus (ii) the net book value of
inventory, plus (iii) the book value of owned land, real property,
equipment, leasehold improvements and other fixed assets, net of
depreciation, plus (iv) cash on hand, to (b) the outstanding principal
amount of all Pre-Petition Indebtedness and the Obligations, to be
less than the ratios set forth below during the periods set forth
below, measured twice monthly pursuant to the reporting requirements
set forth in Section 7.1:
Period Minimum Ratio
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June 30, 2001 through August 29, 2001 1.23 to 1.00
August 30, 2001 through September 29, 2001 1.22 to 1.00
September 30, 2001 through October 30, 2001 1.21 to 1.00
October 31, 2001 through November 14, 2001 1.20 to 1.00
(f) Section 8.17 is entirely amended, as follows:
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8.17 EBITDA. Allow EBITDA for the periods set forth below to be
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less than the amount set forth opposite each such period:
Period Amount
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1 month ended 6/30/01 ($5,900,000)
2 months ended 7/31/01 ($7,700,000)
3 months ended 8/30/01 ($4,800,000)
4 months ended 9/30/01 ($4,600,000)
5 months ended 10/30/01 $0
2. CONSENT. The Lenders hereby consent to any orders of the Bankruptcy
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Court granting to (a) ARK CLO 2000-1 Limited ("ARK CLO") relief from the
automatic stay applicable under Section 362 of the Bankruptcy Code and allowing
ARK CLO to proceed to exercise its non-bankruptcy rights and remedies under the
documents relating to the Lease Agreement dated September 18, 1995, between the
predecessor-in-interest of ARK CLO, as lessor, and the Parent Corporation, as
lessee, and (b) The CIT Group/Equipment Financing, Inc. ("CIT") relief from the
automatic stay applicable under Section 362 of the Bankruptcy Code and allowing
CIT to proceed to exercise its non-bankruptcy rights and remedies under the
documents relating to the Loan and Security Agreement dated on or about June 26,
1996, between Opelika Industries, Inc., as borrower, and CIT, as lender.
3. WAIVER. To the extent that an Event of Default will occur, pending
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Bankruptcy Court approval of this Amendment, under Section 7.1(c), Section
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7.1(e) and Section 7.1(k) (solely with respect to the certificate of compliance
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with Section 8.16) of the Credit Agreement, Section 7.2(b) of the Credit
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Agreement (solely with respect to the certificate required to be delivered
concurrent with the foregoing), Section 7.1(l) of the Credit Agreement, Section
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8.16 of the Credit Agreement, and Section 7.7(a) (solely with respect to notice
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of any Default or Event of Default arising from any of the foregoing) of the
Credit Agreement (collectively, the Specified Defaults'), the Lenders hereby
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waive such Specified Defaults through the earlier of (a) September 15, 2001, or
(b) the date of the Bankruptcy Court order approving the terms of this
Amendment.
4. AMENDMENT FEE. Borrowers shall pay to the Administrative Agent, for
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the pro rata benefit of the Lenders that execute and deliver this Amendment to
the Administrative Agent (or its counsel) not later than 5:00 p.m., Dallas time,
August 14, 2001, an amendment fee in an amount equal to the product of (a) 0.75%
multiplied by (b) an amount equal to such Lender's portion of the
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Total Credit Commitment. Such amendment fee shall be paid in immediately
available funds and shall be payable only if the conditions set forth in Section
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7 of this Amendment have been satisfied and shall be due and payable to each
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Lender eligible for payment pursuant to the preceding sentence no later than two
Business Days after the conditions set forth in Section 7 of this Amendment have
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been satisfied. The Borrowers agree that the failure to pay the amendment fee
provided in this Section 4 shall, after the expiration of any applicable grace
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period, be an Event of Default under Section 9.1(a)(ii) of the Credit Agreement.
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5. ADDITIONAL EVENTS OF DEFAULT. Notwithstanding anything in the DIP
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Financing Documents to the contrary, it will constitute an immediate Event of
Default (with no grace or cure period) if the Parent Corporation shall fail to
deliver to Administrative Agent (a) on or before August 15, 2001, a report from
Interbrand Corporation, (b) on or before September 15, 2001, a draft term sheet
summarizing the Borrowers' proposed plan of reorganization, which draft term
sheet shall include classification of claims and proposed treatment for each
class of claims, which treatment may consist of ranges based on varying
assumptions, (c) on or before September 30, 2001, the Borrowers' three year
financial forecast, (d) on or before September 15, 2001, a report from Xxxxx
Xxxxxxx, and (e) on or before October 15, 2001, a draft of the Borrowers'
proposed plan of reorganization and disclosure statement.
6. REPRESENTATIONS AND WARRANTIES. By its execution and delivery hereof,
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the Borrowers represent and warrant to the Lenders that, as of the date hereof:
(a) after giving effect hereto, the representations and warranties
contained in the Credit Agreement and the other DIP Financing Documents are
true and correct on and as of the date hereof as if made on and as of such
date;
(b) after giving effect hereto, no event has occurred and is
continuing which constitutes an Event of Default;
(c) the Borrowers have legal power and authority to execute and
deliver this Amendment, and this Amendment constitutes the legal, valid and
binding obligation of the Borrowers, enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy or
other debtor relief laws and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law) and
except as rights to indemnity may be limited by federal or state securities
laws;
(d) neither the execution, delivery and performance of this Amendment
nor the consummation of any transactions contemplated herein will conflict
with any Requirement of Law or Contractual Obligation; and
(e) no authorization, approval, consent, or other action by, notice
to, or filing with, any Governmental Authority or other Person (including
the Board of Directors of any
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Borrower), is required for the execution, delivery or performance by the
Borrowers of this Amendment.
7. CONDITIONS OF EFFECTIVENESS. This Amendment shall be effective as of
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August 13, 2001; provided, however, that Sections 1 and 5 hereof shall be
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effective as of such date only after each of the following conditions precedent
shall have been satisfied:
(a) the Administrative Agent shall receive counterparts of this Amendment
executed by the Required Lenders and the Borrowers;
(b) the Administrative Agent shall receive the following, in form and
detail satisfactory to the Administrative Agent:
(i) a full accounting of asset sales and proceeds received by the
Borrowers since the Filing Date, and payment of 100% of the net
proceeds received by the Borrowers from such sales for application in
accordance with Financing Orders;
(ii) delivery of outstanding accounting and other information
requested by PricewaterhouseCoopers in its letter of July 10, 2001 to
Xxxx Xxxxxx; and
(iii) a list of all claims filed in the Bankruptcy Cases as of the
bar date, in electronic form;
(c) Borrowers shall pay the Amendment Fee;
(d) the Bankruptcy Court shall approve this Amendment;
(e) the representations and warranties set forth in Section 6 of this
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Amendment shall be true and correct; and
(f) the Administrative Agent shall receive, in form and substance
satisfactory to the Administrative Agent and its counsel, such other documents,
certificates and instruments as the Administrative Agent shall reasonably
require.
8. REFERENCE TO CREDIT AGREEMENT. Upon the effectiveness of this
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Amendment, each reference in the Credit Agreement to "this Agreement,"
"hereunder," or words of like import shall mean and be a reference to the Credit
Agreement, as affected and amended by this Amendment.
9. COUNTERPARTS; EXECUTION VIA FACSIMILE. This Amendment may be executed
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in one or more counterparts, each of which shall be deemed an original, but all
of which
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together shall constitute one and the same instrument. This Amendment may be
validly executed and delivered by facsimile or other electronic transmission.
10. GOVERNING LAW: BINDING EFFECT. This Amendment shall be governed by
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and construed in accordance with the laws of the State of Texas and shall be
binding upon the Borrowers, the Administrative Agent, each Lender and their
respective successors and assigns.
11. HEADINGS. Section headings in this Amendment are included herein for
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convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
12. DIP FINANCING DOCUMENT. This Amendment is a DIP Financing Document
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and is subject to all provisions of the Credit Agreement applicable to DIP
Financing Documents, all of which are incorporated in this Amendment by
reference the same as if set forth in this Amendment verbatim.
13. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER DIP
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FINANCING DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
BORROWERS:
PILLOWTEX CORPORATION
PILLOWTEX, INC.
PTEX HOLDING COMPANY
PILLOWTEX MANAGEMENT SERVICES COMPANY
BEACON MANUFACTURING COMPANY
XXXXXXX HOME FASHIONS, INC.
TENNESSEE WOOLEN XXXXX, INC.
FIELDCREST XXXXXX, INC.
CRESTFIELD COTTON COMPANY
ENCEE, INC.
FCC CANADA, INC.
FIELDCREST XXXXXX FINANCING, INC.
FIELDCREST XXXXXX LICENSING, INC.
FIELDCREST XXXXXX INTERNATIONAL, INC.
FIELDCREST XXXXXX XX, INC. (formerly known as Fieldcrest Xxxxxx Sure Fit, Inc.)
FIELDCREST XXXXXX TRANSPORTATION, INC.
ST. MARYS, INC.
AMOSKEAG MANAGEMENT CORPORATION
DOWNEAST SECURITIES CORPORATION
BANGOR INVESTMENT COMPANY
XXXXX'X FALLS CORPORATION
THE XXXXXXX CORPORATION
XXXXXXX OF CALIFORNIA, INC.
OPELIKA INDUSTRIES, INC.
By: __________________________
Name:_____________________
Title:____________________
Third Amendment, Consent and Waiver of Post Petition Credit Agreement
Signature Page
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent, Issuing Bank and a Lender
By: ________________________________
Xxxxxxx X. Xxxxxxxxxxx, XX
Managing Director
Third Amendment, Consent and Waiver of Post Petition Credit Agreement
Signature Page
LENDERS:
THE BANK OF NOVA SCOTIA
By: _______________________________
Name:________________________________
Title:_______________________________
CREDIT LYONNAIS - NEW YORK BRANCH
By: _______________________________
Name:________________________________
Title:_______________________________
BANK ONE, TEXAS, N.A.
By: _______________________________
Name:________________________________
Title:_______________________________
FLEET NATIONAL BANK, (formerly known as Fleet Bank, N.A.)
By: _______________________________
Name:________________________________
Title:_______________________________
FRANKLIN FLOATING RATE TRUST
By: _______________________________
Name:________________________________
Title:_______________________________
Third Amendment, Consent and Waiver of Post Petition Credit Agreement
Signature Page
XXXXXXX XXXXX CREDIT PARTNERS L.P.
By: _______________________________
Name:________________________________
Title:_______________________________
ING BARING (U.S.) CAPITAL, LLC
By: _______________________________
Name:________________________________
Title:_______________________________
MARINER LDC
By: _______________________________
Name:________________________________
Title:_______________________________
BHF (USA) CAPITAL CORPORATION
By: _______________________________
Name:________________________________
Title:_______________________________
By: _______________________________
Name:________________________________
Title:_______________________________
GENERAL ELECTRIC CAPITAL CORPORATION By:
Name:
Title:
Third Amendment, Consent and Waiver of Post Petition Credit Agreement
Signature Page
GUARANTY BUSINESS CREDIT CORPORATION
By: _______________________________
Name:________________________________
Title:_______________________________
XXXXX FARGO BANK TEXAS, NATIONAL
ASSOCIATION, successor by consolidation to Xxxxx
Fargo Bank (Texas), National Association
By: _______________________________
Name:________________________________
Title:_______________________________
BANK OF AMERICA, N.A. (Trading)
By: _______________________________
Name:________________________________
Title:_______________________________
FOOTHILL INCOME TRUST II, L.P.
By: _______________________________
Name:________________________________
Title:_______________________________
Third Amendment, Consent and Waiver of Post Petition Credit Agreement
Signature Page