FIFTH AMENDMENT
THIS FIFTH AMENDMENT (the "Amendment") to the Credit Agreement referred
to below is entered into as of the 8th day of October, 1997, by and among TEXFI
INDUSTRIES, INC., a corporation organized under the laws of Delaware (the
"Borrower"), THE LENDERS signatory hereto (collectively, the "Lenders"), and
NATIONSBANK, N.A., a national banking association, as Agent (the "Agent").
STATEMENT OF PURPOSE
The Borrower, the Lenders and the Agent are parties to a certain Credit
Agreement dated as of March 15, 1996 (as heretofore amended and as further
amended or modified hereby, the "Credit Agreement"), pursuant to which the
Lenders have agreed to make, and have made, certain Loans to the Borrower. The
Borrower, the Lenders and the Agent have agreed to amend the Credit Agreement
upon the terms and conditions of this Amendment.
NOW, THEREFORE, in consideration of the premises and mutual agreements
contained herein, the parties hereto hereby agree as follows:
I. Amendments and Waivers.
1. Sale of Assets; Application of Proceeds. The Credit Agreement is
hereby amended to provide that:
(a) The Net Proceeds of any sale of the plant, property or
equipment at the Borrower's Kingstree Knits facility or Graham, North
Carolina elastics facility shall be applied against the outstanding
principal amount of the Revolving Credit Loans.
(b) The Net Proceeds realized from the sale of the assets of
the Narrow Fabrics division of the Borrower shall be applied as
follows:
(i) $2,800,000 shall be applied to the payment of the
Borrower's 11-1/4% Convertible Senior Subordinated Debentures
due October 1, 1997;
(ii) $2,100,000 shall be applied against the
principal installments due on the Term Loan in the inverse
order of their maturity; and
(iii) The balance shall be applied against the
outstanding principal amount of the Revolving Credit Loans.
(c) On or before October 31, 1997, the Borrower shall prepay
the Term Loan by an additional $600,000, such prepayment to be in
addition to the scheduled payment of $500,000 due on October 31, 1997,
and to be applied against the installments due on the Term Loan in the
inverse order of their maturity. The breach
of this covenant shall constitute a default in the payment of principal
due on the Term Loan.
(d) The balance due on the Term Loan, after giving effect to
the prepayments provided for above, shall be repaid in ten (10)
consecutive, equal monthly installments, plus accrued interest,
commencing on November 30, 1997 and continuing on the last day of each
month thereafter through August 31, 1998, on which date the Term Loan,
together with all accrued and unpaid interest thereon, shall be due and
payable in full.
(e) Not later than October 31, 1997, (i) the Borrower shall
have consummated the sale of Rival Sport, L.L.C. ("Rival") to Mentmore
Holdings, Inc. or one of its affiliates (the "Purchaser") for a price
equal to the Borrower's net investment in Rival as of the date of such
sale. The consideration received by the Borrower will consist of a cash
payment of at least $500,000 and the assumption by the Purchaser of the
debt and other liabilities of Rival; and (ii) the Letters of Credit
issued by the Issuing Lender for the benefit of Rival which are
outstanding at the date of sale shall have been terminated and all
liabilities and obligations to the Issuing Lender thereunder shall have
been satisfied in full.
2. Section 9.1 of the Credit Agreement. Section 9.1 of the Credit
Agreement is hereby amended to provide that the ratio of (a) Consolidated
Current Assets of the Borrower and its Subsidiaries to (b) Consolidated Current
Liabilities of the Borrower and its Subsidiaries shall not be less than 1.85 to
1.0 at the end of the fourth quarter of Fiscal Year 1997 and not less than 2.0
to 1.0 at any time thereafter.
3. Section 9.4 of the Credit Agreement. Section 9.4 of the Credit
Agreement is deleted in its entirety and the following substituted in lieu
thereof:
Section 9.4 Minimum Net Worth. Permit Consolidated
Net Worth to be less than negative $12,850,000 as of the end
of the fourth quarter of the Borrower's 1997 fiscal year and
as of any date thereafter, an amount equal to the sum of (x)
negative $12,850,000 plus (y) fifty percent (50%) of
Consolidated Net Income (if positive) of the Borrower and its
Subsidiaries for each fiscal quarter occurring after the end
of the Borrower's 1997 fiscal year plus (z) one hundred
percent (100%) of the aggregate Net Proceeds of any issuance
or offering of capital stock received by the Borrower or any
of its Subsidiaries after the end of the Borrower's 1997
fiscal year.
4. Waiver. The Agent and the Lenders hereby waive any Event of Default
which exists as of the date of this Amendment resulting from the failure by the
Borrower to comply with Section 9.1 (Current Ratio) or Section 9.4 (Minimum Net
Worth) of the Credit Agreement.
-2-
II. Confirmation; Conditions to Effectiveness.
1. Representations and Warranties. To induce the Lenders and the Agent
to execute this Amendment, the Borrower hereby confirms that each representation
and warranty made by it under the Loan Documents is true and correct as of the
date hereof and that after giving effect to this Amendment and the application
of the Net Proceeds as provided in Section I above, no Default or Event of
Default exists under the Credit Agreement. The Borrower hereby represents and
warrants that as of the date hereof there are no claims or offsets against or
defenses or counterclaims to its obligations under the Credit Agreement or any
other Loan Document.
2. Conditions to Effectiveness. This Amendment shall become effective
upon completion of the following conditions to the satisfaction of the Agent:
(a) this Amendment shall have been duly authorized, executed
and delivered by the Borrower and shall be in full force and effect;
(b) receipt by the Agent of a commitment fee in an amount
equal to $150,000, such fee to be shared by the Lenders pro rata in
accordance with the Commitment Percentage of each Lender; and
(c) receipt by the Agent of any other document or instrument
reasonably requested by it in connection with the execution of this
Amendment.
III. General Provisions.
1. Limited Amendment. This Amendment shall not be deemed (i) to be a
waiver of, or consent to, or a modification or amendment of, any other term or
condition of the Credit Agreement or (ii) to prejudice any other right or rights
which the Agent or any Lender may now have or may have in the future under or in
connection with the Credit Agreement or the Loan Documents or any of the
instruments or agreements referred to therein, as the same may be amended or
modified from time to time.
2. Counterparts. This Amendment may be executed by one or more of the
parties hereto in any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
3. Definitions. All capitalized terms used and not defined herein shall
have the meanings given thereto in the Credit Agreement.
4. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NORTH CAROLINA.
-3-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
BORROWER:
TEXFI INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxxx
Name: Xxxx X. Xxxxxxx
Title: VP, CEO & Treasurer
AGENT:
NATIONSBANK, N.A.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
LENDERS:
NATIONSBANK, N.A.
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
-4-
BANKBOSTON, N.A.
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
CORESTATES BANK, N.A.
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President
NATIONAL BANK OF CANADA
By: /s/ Xxxxxxx Xxxxxx
Name: Xxxxxxx Xxxxxx
Title: VP & Mgr.
By: /s/ Xxx Xxxx
Name: Xxx Xxxx
Title: A.V.P.
-5-
THE CIT GROUP/
COMMERCIAL SERVICES, INC.
By: /s/ X.X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: V.P.
-6-