1
EXHIBIT 4.2
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT effective as of November 2,
2000 (this "Amendment"), by and among THE XXXXX GROUP, INC., a Tennessee
corporation (the "Borrower"), SUNTRUST BANK, formerly known as SunTrust Bank,
Atlanta, a Georgia banking corporation ("SunTrust"), the other banks and lending
institutions listed on the signature pages hereof, and any assignees of SunTrust
or such other banks and lending institutions which become "Lenders" as provided
herein (SunTrust, and such other banks, lending institutions, and assignees
referred to collectively as "Lenders"), SUNTRUST BANK, as administrative agent
for the Lenders (in such capacity, the "Administrative Agent") and BANK OF
AMERICA, N.A., formerly known as NationsBank, N.A., as documentation agent for
the Lenders (in such capacity, the "Documentation Agent").
W I T N E S S E T H :
WHEREAS, Borrower, the Lenders, the Administrative Agent and the
Documentation Agent are parties to that certain Credit Agreement, dated as of
March 31, 1998, as amended by that certain First Amendment to Credit Agreement,
effective December 26, 1998, and as amended by that certain Second Amendment to
Credit Agreement, effective October 5, 2000 (as amended or modified, the "Credit
Agreement");
WHEREAS, Borrower, the Lenders, the Administrative Agent and the
Documentation Agent have agreed to make certain modifications to the Credit
Agreement subject to the terms, conditions and requirements set forth in this
Amendment.
NOW THEREFORE, in consideration of the terms and conditions contained
herein, the parties hereto, intending to be legally bound, hereby amend the
Credit Agreement as follows:
A. AMENDMENTS TO THE CREDIT AGREEMENT
1. Section 1.01 of the Credit Agreement is hereby amended by
replacing the definitions of "Agents", "Applicable Commitment Fee Percentage",
"Applicable Margin", "Credit Documents", "Debt", "EBIT", "EBITDA", "Interest
Coverage Ratio", "Interest Expense", "Material Subsidiary", "Maturity Date",
"Net Income", "Net Worth", "Revolving Loan Termination Date", "Securitization
Documents", "Securitization Program", "Subordinated Debt", "Subsidiary",
"Subsidiary Guaranty Agreement", and "Total Funded Debt" in their entirety with
the following:
"Agents" shall mean collectively, the Administrative Agent,
the Collateral Agent and the Documentation Agent.
"Applicable Commitment Fee Percentage" shall mean, with
respect to any calculation of the Revolving Loan Commitment Fee
hereunder, (i) from the Third Amendment Effective Date through the date
which is two days after the date that the Borrower is required to
deliver its quarterly financial statements for the quarter ending March
31, 2001, one-half of one percent (0.50%) per annum, and
2
(ii) thereafter, the applicable percentage determined from the chart
set forth below based on Borrower's ratio of Total Funded Debt to
EBITDA, as of the relevant date of determination,
> 3.50 and > 4.00 and > 4.50 and
Total Funded Debt - - -
to EBITDA < 3.50 < 4.00 < 4.50 < 5.00 > 5.00
--------- ------ ---------- ---------- ---------- -----
Applicable Commitment .25% .375% .375% .50% .50%
Fee Percentage
Each change in the Applicable Commitment Fee Percentage shall
be effective from and after the date that any change in the Applicable
Margin is effective.
"Applicable Margin" shall mean, with respect to all Loans, (i)
from the Third Amendment Effective Date through the date which is two
days after the date that the Borrower is required to deliver its
quarterly financial statements for the quarter ending March 31, 2001,
(A) two and three quarters percent (2.75%) per annum for all Revolving
Loans that consist of Eurodollar Borrowings and (B) one and one-half of
one percent (1.50%) per annum for all Loans that consist of Base Rate
Borrowings, and (ii) thereafter, the applicable percentage determined
from the chart set forth below based on Borrower's ratio of Total
Funded Debt to EBITDA for the preceding four quarter period then
ending, as determined quarterly based upon the financial statements
delivered by the Borrower pursuant to this Agreement, with such
Applicable Margin to be effective, with respect to calculations based
upon the quarterly unaudited financial statements delivered pursuant to
Section 7.07(b) of this Agreement, as of the second Business Day
following the date the Administrative Agent receives the Borrower's
applicable financial statements:
> 3.50 and > 4.00 and > 4.50 and
Total Funded Debt - - -
to EBITDA < 3.50 < 4.00 < 4.50 < 5.00 > 5.00
--------- ------ ---------- ---------- ---------- ------
Applicable Margin 1.75% 2.00% 2.25% 2.50% 2.75%
for Eurodollar Borrowings
Applicable Margin .50% .75% 1.00% 1.25% 1.50%
for Base Rate Borrowings
"Credit Documents" shall mean and include, as the context
requires, this Agreement, the Subsidiary Guaranty Agreement, the
Masland Bonds, the Parent Guaranty, the Xxxxx Reimbursement Agreement,
the Letters of Credit, the Security Documents and any and all other
instruments, agreements, documents and writings contemplated hereby or
executed in connection herewith.
"Debt" of any Person shall mean, without duplication, (i)
obligations of such Person for borrowed money, (ii) obligations of such
Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations of such
-2-
3
Person in respect of the deferred purchase price of property or
services (other than trade payables incurred in the ordinary course of
business on terms customary in the trade), (iv) obligations of such
Person under any conditional sale or other title retention agreement(s)
relating to property acquired by such Person, (v) capitalized lease
obligations of such Person, (vi) obligations, contingent or otherwise,
of such Person in respect of letters of credit, acceptances or similar
extensions of credit, (vii) guaranties by such Person of the type of
indebtedness described in clauses (i) through (v) above, (viii) all
indebtedness of a third party secured by any Lien on property owned by
such Person, whether or not such indebtedness has been assumed by such
Person, (ix) all obligations of such Person, contingent or otherwise,
to purchase, redeem, retire or otherwise acquire for value any common
stock of such Person, (x) off-balance sheet liability retained in
connection with asset securitization programs, real estate synthetic
leases, real estate sale and leaseback transactions or other similar
obligations arising with respect to any other transaction which is the
functional equivalent of or takes the place of borrowing but which does
not constitute a liability on the consolidated balance sheet of such
Person and its Subsidiaries, (xi) obligations under any Interest Rate
Contracts and (xii) advances under any factoring arrangement pursuant
to which such Person sells its accounts on a recourse or non-recourse
basis; provided, however, that in no event shall Debt include any
earnout obligations of the Borrower and its Subsidiaries incurred in
connection with the acquisition of Fabrica International, Inc., Chroma
Technologies, Inc. and Multitex, Inc.
"EBIT" shall mean, for the Borrower and its Subsidiaries for
any period, an amount equal to the sum of (a) the Consolidated Net
Income (Loss) of the Borrower and its Subsidiaries for such period,
plus, (b) to the extent deducted in determining Net Income for such
period, (i) Interest Expense of the Consolidated Companies for such
period, (ii) income tax expense (whether paid or deferred) of the
Consolidated Companies for such period determined in on a consolidated
basis in accordance with GAAP, (iii) any other non-cash charges of the
Consolidated Companies for such period determined in on a consolidated
basis in accordance with GAAP and (iv) other non-recurring,
non-operating consolidation expenses, not to exceed $7,553,000 in the
aggregate so long as such expenses are incurred in the third and fourth
fiscal quarters of the Borrower's fiscal year 2000, to the extent
approved by the Administrative Agent in its sole discretion; provided,
however, that with respect to any Person, or substantially all of the
assets of a Person, that became a Subsidiary of, or was merged with or
consolidated into, or acquired by, the Borrower or any of its
Subsidiaries in accordance with the terms of this Agreement, during
such period, "EBIT" shall also include the EBIT of such Person or the
EBIT attributable to such assets during such period as if such Person
or assets were acquired as of the first day of such period.
"EBITDA" shall mean, for the Borrower and its Subsidiaries for
any period, an amount equal to (i) EBIT for such period, plus (ii) to
the extent
-3-
4
subtracted in determining Consolidated Net Income (Loss) of the
Borrower and its Subsidiaries for such period, the sum of (x)
amortization expense and (y) depreciation expense of the Consolidated
Companies, in each case, determined on a consolidated basis for such
period in conformity with GAAP; provided, however, that with respect to
any Person, or substantially all of the assets of a Person, that became
a Subsidiary of, or was merged with or consolidated into, or acquired
by, the Borrower or any of its Subsidiaries in accordance with the
terms of this Agreement, during such period, "EBITDA" shall also
include the EBITDA of such Person or the EBITDA attributable to such
assets during such period as if such Person or assets were acquired as
of the first day of such period.
"Interest Coverage Ratio" shall mean, as of any date, the
ratio of (i) EBITDA for the twelve-month period ending on or
immediately prior to such date to (ii) Interest Expense for the
twelve-month period ending on or immediately prior to such date.
"Interest Expense" shall mean, for the Borrower and its
Subsidiaries for any period determined on a consolidated basis in
accordance with GAAP, the sum of (i) total interest expense, including
without limitation the interest component of any payments in respect of
capital leases capitalized or expensed during such period (whether or
not actually paid during such period) plus (ii) the net amount payable
(or minus the net amount receivable) under Currency Contracts during
such period (whether or not actually paid or received during such
period); provided, however, that with respect to any Person, or
substantially all of the assets of a Person, that became a Subsidiary
of, or was merged with or consolidated into, or acquired by, the
Borrower or any of its Subsidiaries in accordance with the terms of
this Agreement, during such period, "Interest Expense" shall also
include the Interest Expense of such Person or the Interest Expense
attributable to such assets during such period as if such Person or
assets were acquired as of the first day of such period.
"Material Subsidiary" shall mean each Subsidiary of the
Borrower, now existing or hereafter established or acquired, that at
any time prior to the Maturity Date, has or acquires total assets in
excess of $1,000,000, or that is otherwise material to the operations
or business of the Borrower or another Material Subsidiary or that has
guaranteed any Subordinated Debt; provided that, for so long as Xxxxx
Funding II, Inc. holds no assets and undertakes no activities other
than in connection with the Securitization Program, Xxxxx Funding II,
Inc. shall not be deemed to be a Material Subsidiary of the Borrower.
"Maturity Date" shall mean the earlier of (i) March 31, 2003,
and (ii) the date on which all amounts outstanding under this Agreement
have been declared or have automatically become due and payable
(whether by acceleration or otherwise).
"Net Income" shall mean, for any period, the net income (or
loss) of the Borrower and its Subsidiaries for such period determined
on a consolidated basis in
-4-
5
accordance with GAAP, but excluding therefrom (to the extent otherwise
included therein)(i) any extraordinary gains or losses and (ii) any
gains attributable to write-ups of assets; provided, however, that to
the extent during such period, the percentage of Chroma Technologies,
Inc.'s net income (the "Net Income Percentage") actually distributed to
the Borrower is less than 75% of Chroma Technologies, Inc.'s net income
for such period, then "Net Income" for such period with respect to
Chroma Technologies, Inc. shall only include an amount equal to the Net
Income Percentage of Chroma Technologies, Inc.'s net income.
"Net Worth" shall mean, as of any date, (i) the total assets
of the Borrower and its Subsidiaries that would be reflected on the
Borrower's consolidated balance sheet as of such date prepared in
accordance with GAAP, after eliminating all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Subsidiaries, minus (ii) the sum of (A) the total liabilities of the
Borrower and its Subsidiaries that would be reflected on the Borrower's
consolidated balance sheet as of such date prepared in accordance with
GAAP and (B) the amount of any write-up in the book value of any assets
resulting from a revaluation thereof or any write-up in excess of the
cost of such assets acquired reflected on the consolidated balance
sheet of the Borrower as of such date prepared in accordance with GAAP.
"Revolving Loan Termination Date" shall mean the earlier of
(i) March 31, 2003, and (ii) the date on which all amounts outstanding
under this Agreement have been declared or have automatically become
due and payable (whether by acceleration or otherwise).
"Securitization Documents" shall mean all documents from time
to time executed in connection with the Securitization Program,
including without limitation that certain Loan Agreement, dated as of
June 23, 2000, among Xxxxx Funding II, Inc. as borrower, the Borrower,
as Servicer, Three Pillars Funding Corporation, as lender and SunTrust
Equitable Securities Corporation, the First Tier Purchase Agreement,
dated as of June 23, 2000, between Borrower, Carriage Industries, Inc.,
Bretlin, Inc., Candlewick Yarns, Inc. and Xxxxx Logistics, Inc., and
that certain Receivables Purchase Agreement, dated as of June 23, 2000,
between Xxxxx Funding II, Inc. and the Borrower, in each case as
amended, modified or supplemented from time to time.
"Securitization Program" shall mean that certain accounts
receivable purchase program established by the Borrower and its
wholly-owned subsidiary, Xxxxx Funding II, Inc., for the sale of the
accounts receivable of the Borrower and certain of its Subsidiaries to
Xxxxx Funding II, Inc. for further transfer to a trust or series of
trusts in return for certain interests in such trust or trusts with
such interests in an aggregate amount not to exceed $60,000,000 to be
sold to certain third party investors with all other interests in such
trust or trusts to be retained by Xxxxx Funding II, Inc. or the
Borrower.
-5-
6
"Subsidiary" shall mean, as applied to any Person, (a) any
corporation of which more than fifty percent (50%) of the outstanding
capital stock (other than directors' qualifying shares) having ordinary
voting power to elect a majority of its board of directors, regardless
of the existence at the time of a right of the holders of any class or
classes of securities of such corporation to exercise such voting power
by reason of the happening of any contingency, or any partnership of
which more than fifty percent (50%) of the outstanding partnership
interests is at the time owned by such Person, or by one or more
Subsidiaries of such Person, or by such Person and one or more
Subsidiaries of such Person, and (b) any other entity which is
controlled or capable of being controlled by such Person, or by one or
more Subsidiaries of such Person, or by such Person and one or more
Subsidiaries of such Person.
"Subsidiary Guaranty Agreement" shall mean the Amended and
Restated Subsidiary Guaranty Agreement executed by each of the Material
Subsidiaries of the Borrower in favor of the Lenders and the
Administrative Agent, substantially in the form of Exhibit C as the
same may be amended, restated or supplemented from time to time.
"Subordinated Debt" shall mean any Debt of the Borrower or any
Subsidiary (i) that is expressly subordinated to the Debt and other
obligations arising under the Credit Documents on terms reasonably
satisfactory to the Administrative Agent and the Required Lenders, (ii)
that matures by its terms no earlier than six months after the later of
the Revolving Loan Termination Date or the Maturity Date then in
effect, and (iii) that is evidenced by an indenture or other similar
agreement that is in a form satisfactory to the Administrative Agent
and the Required Lenders.
"Total Funded Debt" shall mean, at any time, all then
currently outstanding obligations, liabilities and indebtedness of the
Borrower and its Subsidiaries on a consolidated basis of the types
described in the definition of Debt (other than as described in
subsections (vi) and (vii) thereof), including, but not limited to, all
Loans and Letter of Credit Obligations under the Credit Documents.
2. Section 1.01 of the Credit Agreement is hereby amended by
adding the following definitions of "Carriage Pledge Agreement", "Collateral",
"Collateral Agent", "Collateral Assignments", "Copyright Security Agreement",
"Deed of Trust Properties", "Deeds of Trust", "Xxxxx Pledge Agreement",
"Environmental Indemnity", "Hazardous Materials", "Landlord Waiver", "Loans",
"Master Account Agreement", "Patent Security Agreement", "Perfection
Certificate", "Pledge Agreements", "Processor Agreements", "Real Estate", "Real
Estate Documents", "Security Agreement", "Security Documents", "SunTrust Note",
"Trademark Security Agreement" and "Third Amendment Effective Date" in the
appropriate alphabetical order:
"Carriage Pledge Agreement" shall mean that certain Pledge
Agreement, dated as of the date hereof, executed by Carriage
Industries, Inc. in favor of the
-6-
7
Collateral Agent, for the benefit of the Lenders and SunTrust Bank
individually, as amended, restated, supplemented or otherwise modified
from time to time.
"Collateral" shall mean all tangible and intangible property,
real and personal, of any Credit Party that is the subject of a Lien
granted pursuant to a Security Document to the Administrative Agent for
the benefit of the Lenders to secure the whole or any part of the
Obligations or any guarantee thereof, and shall include, without
limitation, all casualty insurance proceeds and condemnation awards
with respect to any of the foregoing.
"Collateral Agent" shall mean SunTrust Bank, as Collateral
Agent for the Lenders under the Credit Agreement and for itself (and
its successors and assigns) as the lender under the SunTrust Note.
"Collateral Assignments" shall mean all collateral assignments
of lease and collateral assignments of distribution agreements
delivered by any Credit Party to the Collateral Agent, all in form and
substance satisfactory to the Collateral Agent, as each may be amended,
restated, modified or otherwise supplemented from time to time.
"Copyright Security Agreement" shall mean those Copyright
Security Agreements, dated as of the date hereof, executed by the
Borrower and any of its Subsidiaries in favor of the Collateral Agent,
for the benefit of the Lenders and SunTrust Bank individually, as
amended, restated, supplemented or otherwise modified from time to
time.
"Deed of Trust Properties" shall mean, collectively, the Real
Estate subject to the Deeds of Trust.
"Deeds of Trust" shall mean each of the deeds of trust,
leasehold deeds of trust, mortgages, leasehold mortgages, deeds to
secure debt, leasehold deeds to secure debt or other real estate
security documents delivered by any Credit Party to the Collateral
Agent, all in form and substance satisfactory to the Collateral Agent,
as each may be amended, restated, modified or otherwise supplemented
from time to time.
"Xxxxx Pledge Agreement" shall mean that certain Pledge
Agreement, dated as of the date hereof, executed by the Borrower in
favor of the Collateral Agent, for the benefit of the Lenders and
SunTrust Bank individually, as amended, restated, supplemented or
otherwise modified from time to time.
"Environmental Indemnity" shall mean the Environmental
Indemnity, to be executed by the Borrower in favor of the Collateral
Agent, for the benefit of the Lenders, as amended, restated,
supplemented or otherwise modified from time to time.
-7-
8
"Hazardous Materials" shall mean all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or
other pollutants, including petroleum or petroleum distillates,
asbestos or asbestos containing materials, polychlorinated biphenyls,
radon gas, infectious or medical wastes and all other substances or
wastes of any nature regulated pursuant to any Environmental Law.
"Landlord Waiver" shall mean any and all Landlord Waivers, by
and among the Borrower, the Collateral Agent and the landlords at which
the Borrower or any of the Material Subsidiaries leases Real Estate, as
amended, restated, supplemented or otherwise modified from time to
time.
"Loans" shall mean, collectively, the Revolving Loans, the
Term Loans and the Swing Line Loans.
"Master Account Agreement" shall mean that certain Master
Account Agreement, dated as the Third Amendment Effective Date, by and
between the Borrower and the Collateral Agent, as amended, restated,
supplemented or otherwise modified.
"Patent Security Agreement" shall mean those Collateral
Assignment and Security Agreements (Patents), dated as of the date
hereof, executed by the Borrower and any of its Subsidiaries in favor
of the Collateral Agent, for the benefit of the Lenders and SunTrust
Bank individually, as amended, restated, supplemented or otherwise
modified from time to time.
"Perfection Certificate" shall have the meaning assigned to
such term in the Security Agreement.
"Pledge Agreements" shall mean, collectively, the Carriage
Pledge Agreement and the Xxxxx Pledge Agreement.
"Processor Agreements" shall mean all agreements entered into
among the Credit Parties, the Collateral Agent and the third-party
processors of inventory of the Credit Parties, all in form and
substance satisfactory to the Collateral Agent, as each may be amended,
restated, modified or otherwise supplemented from time to time.
"Real Estate" shall mean all real property owned or leased by
the Borrower and its Subsidiaries listed on Schedule 1.1R.
"Real Estate Documents" shall mean collectively, the Deeds of
Trust, the Environmental Indemnity, the Collateral Assignments, the
Processor Agreements and all other documents, instruments, agreements
and certificates executed and delivered by any Credit Party to the
Collateral Agent in connection with the foregoing.
-8-
9
"Security Agreement" shall mean that certain Security
Agreement, dated as of the Third Amendment Effective Date, executed by
the Borrower and each Material Subsidiary in favor of the Collateral
Agent for the benefit of the Lenders and SunTrust Bank individually, as
amended, restated, supplemented or otherwise modified from time to
time.
"Security Documents" shall mean, collectively, the Security
Agreement, the Pledge Agreements, the Copyright Security Agreement, the
Patent Security Agreement, the Trademark Security Agreement, the Deeds
of Trust, the other Real Estate Documents, any Landlord Waivers, the
Master Account Agreement, the Perfection Certificate, and all other
instruments and agreements now or hereafter securing the whole or any
part of the Obligations or any guarantee thereof, all UCC-1 financing
statements, fixture financing statements, stock powers, and all other
documents, instruments, agreements and certificates executed and
delivered by any Credit Party to the Collateral Agent in connection
with the foregoing.
"SunTrust Note" shall mean that certain Promissory Note, dated
as of August 15, 2000, executed by the Borrower in favor of SunTrust
Bank in the committed amount of $5,000,000, as amended or modified.
"Trademark Security Agreement" shall mean those certain
Collateral Assignment and Security Agreements (Trademarks), dated as of
the date hereof, executed by the Borrower and any of its Subsidiaries
in favor of the Collateral Agent, for the benefit of the Lenders and
SunTrust Bank individually, as amended, restated, supplemented or
otherwise modified from time to time.
"Third Amendment Effective Date" shall mean November 2, 2000.
3. Section 2.02(b) of the Credit Agreement is hereby amended by
deleting the first sentence of said subsection and replacing it with the
following:
(b) Each Revolving Loan shall, at the option of the
Borrower, be made or continued as, or converted into, part of one of
Borrowings that shall consist entirely of Base Rate Advances or
Eurodollar Advances.
4. Section 3.01(b) of the Credit Agreement is hereby amended by
deleting the first two sentences of said subsection and replacing them with the
following
(b) Each Term Loan shall, at the option of the Borrower,
be made or continued as, or converted into, part of one of Borrowings
that shall consist entirely of Base Rate Advances or Eurodollar
Advances. The aggregate principal amount of each Borrowing of Term
Loans consisting of Eurodollar Advances shall be not less than
$5,000,000 or a greater integral multiple of $1,000,000 and the
aggregate principal amount of each Borrowing of Term Loans consisting
of
-9-
10
Base Rate Advances shall not be less than $1,000,000 or greater
integral multiple of $1,000,000.
5. Section 3.02(b) of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing such section with the
following:
(b) The Borrower agrees to repay the Term Loans in
consecutive quarterly installments, commencing on December 31, 2000,
and continuing on the last day of each calendar quarter (each, a
"Mandatory Reduction Date") in accordance with the chart set forth
below:
Date of Payment Quarterly Payment Amount
--------------- ------------------------
December 31, 2000 $ 1,635,577
March 31, 2001 $ 1,635,577
June 30, 2001 $ 1,635,577
September 30, 2001 $ 1,635,577
December 31, 2001 $ 1,635,577
March 31, 2002 $ 1,635,577
June 30, 2002 $ 1,635,577
September 30, 2002 $ 1,635,577
December 31, 2002 $ 1,635,577
March 31, 2003 $15,447,115
Additionally, the Term Loans shall be repaid as required by
Section 3.03 hereof. Any remaining principal and interest with respect
to the Term Loans shall be due and payable in full on the Maturity
Date.
6. Section 3.03(a) of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing such section with the
following:
(a) No mandatory prepayment shall be required pursuant to
this Section 3.03 except in connection with an Asset Disposition or
series of related Asset Dispositions where the aggregate value of the
assets subject to such Asset Disposition(s) exceeds $1,000,000 (based
on the Asset Fair Market Values thereof); provided, that, regardless of
the value of the assets disposed of, no mandatory prepayment shall be
required with respect to (i) Asset Dispositions resulting from loss,
damage, destruction, or taking where the proceeds thereof are utilized
so as to be excluded from the definition of Net Proceeds, (ii) Asset
Dispositions occurring as a part of any sale and leaseback transactions
permitted pursuant to Section 8.07, (iii) the Tarboro Disposition, and
(iv) Asset Dispositions in connection with off-balance sheet financings
resulting in Deemed Debt hereunder. Whenever any Asset Disposition
shall have occurred in which such Asset Fair Market Values shall have
equaled or exceeded such amount, then within fifteen (15) Business Days
after each date on which any Consolidated Company receives any Net
Proceeds as a result of or in connection with an Asset Disposition by
any Consolidated Company, the Term Loans shall be prepaid, or in the
even that the Term Loans have been prepaid in full, the Total
Commitments
-10-
11
shall be reduced, on a pro rata basis by an amount equal to 50% the Net
Proceeds of such Asset Disposition plus interest accrued and unpaid on
the amount of such prepayment; provided that, in the event that the
Borrower has invested or intends to reinvest the Net Proceeds of such
Asset Disposition in other capital assets to be used in the business of
the Borrower, the Borrower may deliver to the Administrative Agent a
certificate of a Financial Officer (a "Reinvestment Certificate") of
the Borrower indicating either that Borrower has reinvested or that
Borrower intends to reinvest such Net Proceeds in capital assets to be
used in Borrower's business within 180 days (or such longer period as
may be allowed in the definition of Net Proceeds in the case of certain
Asset Dispositions), then the application of the Net Proceeds of such
Asset Disposition to repay the Term Loans or reduce the Total
Commitments hereunder shall not be required. At the end of such 180 day
period (or such longer period as may be specified in the applicable
Reinvestment Certificate in the circumstances described above), 50% of
the Net Proceeds of such Asset Disposition in excess of $100,000 which
have not been used as set forth in the Reinvestment Certificate shall
immediately be used to repay the Term Loans or, in the event that the
Term Loans have been paid in full, to reduce the Total Commitments as
provided herein.
7. Section 4.03(a) of the Credit Agreement is hereby amended by
adding the word "and" to the end of subsection (i), by deleting the word "and"
from the end of subsection (ii) and by deleting subsection (iii) thereto in its
entirety.
8. Sections 4.04(a) and (b) of the Credit Agreement are hereby
amended by replacing such subsections thereof with the following:
(a) In connection with the making or continuation of, or
conversion into, each Borrowing of Eurodollar Advances, the Borrower
shall select an Interest Period to be applicable to such Eurodollar
Advances, which Interest Period shall be either (i) a 1, 2, or 3 month
period at any time during the one year period after the Third Amendment
Effective Date or (ii) a 1, 2, 3 or 6 month period at any time at any
time thereafter.
9. Section 7.07 of the Credit Agreement are hereby amended by
renumbering subsection (u) as subsection (v) and adding the following as a new
subsection (u) thereof:
(u) promptly after the institution of, notice of any
claim arising in tort with respect to which any Credit Party is the
claimant and is alleging damages of at least $1,500,000;
10. Section 8.02 of the Credit Agreement is hereby amended by
replacing subsection (c) and (j) thereof in their entirety with the following:
(c) (i) Debt owing to a Credit Party in the form of
Intercompany Advances, payable on demand and (ii) Investments in
Subsidiaries permitted by Section 8.03; provided that the aggregate
amount of Intercompany Advances at
-11-
12
any one time outstanding from the Borrower to its Subsidiaries
(excluding amounts owed by Xxxxx Funding or Xxxxx Funding II to the
Borrower in connection with the Securitization Program) shall not
exceed $85,000,000 at any time outstanding; plus
(j) Deemed Debt incurred in connection with the
Securitization Program; plus
11. Section 8.06 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
SECTION 8.06. LEASE OBLIGATIONS. Create or suffer to exist
any obligations for the payment of rent for any property under
operating leases or agreements to lease (other than capital leases)
which would cause the direct or contingent liabilities of the Borrower
and its Subsidiaries, on a consolidated basis, to exceed $12,500,000
payable in any period of twelve consecutive calendar months.
12. Section 8.07 of the Credit Agreement is hereby amended by
adding the following as a new clause (iii) at the end of such section:
or (iii) in connection with the purchase of new equipment by the
Borrower and its Subsidiaries which is sold and leased back by the
Borrower or such Subsidiary within 45 days after such new equipment is
purchased.
13. Section 8.11 of the Credit Agreement is hereby amended by
deleting such section in its entirety and replacing it with the following:
SECTION 8.11. FINANCIAL COVENANTS. In the case of the Borrower, permit:
(a) Total Funded Debt to EBITDA. Its ratio of (i) Total
Funded Debt as of the last day of any fiscal quarter of the Borrower to
(ii) EBITDA for the four fiscal quarter period ending on such date to
be greater than the following levels for the following periods:
Period: Maximum Ratio:
------ --------------
Third fiscal quarter of the Borrower's
fiscal year 2000 through and including
the second fiscal quarter of fiscal year
2001 5.5:1.0
Third fiscal quarter of the Borrower's
fiscal year 2001 5.0:1.0
Fourth fiscal quarter of the Borrower's
fiscal year 2001 4.5:1.0
Each fiscal quarter thereafter 4.0.1.0
-12-
13
(b) Senior Funded Debt to EBITDA. Its ratio of (i) Senior
Funded Debt as of the last day of any fiscal quarter of the Borrower to
(ii) EBITDA for the four fiscal quarter period ending on such date to
be greater than the following levels for the following periods:
Period: Maximum Ratio:
------ --------------
Third fiscal quarter and fourth fiscal
quarter of the Borrower's fiscal year
2000 3.65:1.0
First and second fiscal quarter of the
Borrower's fiscal year 2001 3.5:1.0
Third fiscal quarter of the Borrower's
fiscal year 2001 3.3:1.0
Each fiscal quarter thereafter 3.0.1.0
(c) Interest Coverage Ratio. Its Interest Coverage Ratio
to be less than the following levels for the following periods, tested
as of the last day of each fiscal month during the first twelve months
ending after the Third Amendment Effective Date and as of the last day
of each fiscal quarter thereafter:
Period: Maximum Ratio:
------ --------------
Fiscal month ending on or about October 31, 2000
through and including the fiscal month ending
on or about September 30, 2001 2.5:1.0
Fiscal quarter ending on or about December 31, 2001 2.75:1.0
Each fiscal quarter thereafter 3.0.1.0
(d) Consolidated Net Worth. Fail to maintain as of the
last day of each fiscal quarter of Borrower, Net Worth equal to or
greater than the Minimum Compliance Level plus 50% of the Net Income of
the Borrower earned during the current fiscal year, calculated on a
cumulative basis for such fiscal year; provided, however, in the event
that the Consolidated Companies suffer a net loss for any year-to-date
fiscal period, Net Income shall be deemed to be $0. The "Minimum
Compliance Level" shall, as of any date of determination, be equal to
the sum of
-13-
14
(x) $103,000,000 plus (y) an additional amount calculated as of the
last day of each fiscal year of Borrower, commencing with fiscal year
2000 and added to the Minimum Compliance Level then in effect as of the
last day of such fiscal year, equal to 50% of the Net Income for such
fiscal year of Borrower then ending; provided, however, in the event
that the Consolidated Companies suffer a net loss for any fiscal year,
Net Income shall be deemed to be $0, and further provided that amounts
calculated pursuant to clause (y) above shall be permanent increases in
the Minimum Compliance Level so that in no event shall the Minimum
Compliance Level at any date of determination be less than the amount
required at any preceding date of determination.
14. Section 11.05 of the Credit Agreement is amended by replacing
all references contained therein to "the Administrative Agent" to "the
Administrative Agent and the Collateral Agent".
15. Section 11.17 of the Credit Agreement is amended by adding the
following as subsection (d) thereof:
(d) release any guarantor or limit the liability of any
such guarantor under any guaranty agreement, or release all or
substantially all of the collateral securing any of the Obligations;
16. Article XI of the Credit Agreement is hereby amended by
inserting the provisions set forth on Exhibit A hereto at the end of such
Article. Each Lender hereby acknowledges and agrees that all Collateral secures,
on a pari passu basis, the Obligations and all obligations and indebtedness owed
to SunTrust Bank under the SunTrust Chattanooga Note, in an aggregate principal
amount of indebtedness not to exceed $5,000,000, and that the proceeds of any
Collateral realized upon the exercise of any remedies of the Collateral Agent or
the Lenders shall be applied in accordance with the specific terms of the
Security Documents.
17. Schedule 1.1R attached hereto is hereby added as Schedules
1.1R to the Credit Agreement.
18. Schedule 6.01 and Schedule 8.01 the Credit Agreement are
hereby amended by replacing such Schedules in their entirety with Schedule 6.01
and Schedule 8.01 to this Amendment.
19. Exhibit C to the Credit Agreement is hereby amended by
replacing such Exhibit in its entirety with Exhibit C to this Amendment.
20. All references to "Loan Document" or "Loan Documents"
contained in the Credit Agreement are hereby amended to refer to "Credit
Document" or "Credit Documents".
-14-
15
B. CONDITIONS PRECEDENT:
This Amendment shall become effective, when and only when, the
following conditions have been fulfilled to the satisfaction of the
Administrative Agent:
1. The Administrative Agent shall have received the fee agreed to
by the parties in that certain Fee Letter, dated as of the date hereof, by and
between the Company and the Administrative Agent on behalf of the Lenders (the
"Third Amendment Fee"), to be distributed pro rata to the Lenders, together with
all other fees and other amounts due and payable on or prior to the Closing
Date, including reimbursement or payment of all out-of-pocket expenses
(including reasonable fees, charges and disbursements of counsel to the
Administrative Agent) required to be reimbursed or paid by the Borrowers
hereunder, under any other Credit Document and under any agreement with the
Administrative Agent.
2. Administrative Agent shall have received executed originals of
this Amendment and all of the following documents, each (unless otherwise
indicated) being dated the Third Amendment Effective Date, in form and substance
satisfactory to the Lenders:
(a) the duly completed and executed Revolving Credit
Notes in favor of each Lender in the amount of its Revolving Commitment Amount;
(b) the duly completed and executed Term Notes in favor
of each Lender in the amount of its Term Loan;
(c) the duly executed Amended and Restated Guaranty,
executed by all Guarantors;
(d) the duly executed Security Agreement and Master
Account Agreement, together with (A) UCC-1 financing statements and other
applicable documents under the laws of the jurisdictions with respect to the
perfection of the Liens granted under the Security Agreement, as requested by
the Administrative Agent in order to perfect such Liens, duly executed by the
Borrower and the other Credit Parties, and (B) a Perfection Certificate duly
completed and executed by the Borrower;
(e) the duly executed Pledge Agreements, together with
(A) original stock certificates evidencing the issued and outstanding shares of
capital stock pledged to the Collateral Agent for the benefit of the Lenders
pursuant to the Pledge Agreements, and (B) stock powers or other appropriate
instruments of transfer executed in blank;
(f) the duly executed Copyright Security Agreement,
Patent Security Agreement and the Trademark Security Agreement;
(g) a certificate of a Secretary or Assistant Secretary
of each Credit Party, attaching and certifying copies of its Articles of
Incorporation, Bylaws and unanimous written consent of its board of directors,
authorizing the execution, delivery and performance of the
-15-
16
Security Documents to which it is a party and certifying the name, title and
true signature of each officer of such Credit Party executing the Credit
Documents to which it is a party;
(h) a favorable written opinion of counsel to the Credit
Parties, addressed to the Collateral Agent and each of the Lenders, and covering
such matters relating to the Credit Parties, the Amendment, the Security
Documents and the transactions contemplated therein as the Collateral Agent or
the Required Lenders shall reasonably request;
(i) certificates of insurance, in form and detail
acceptable to the Collateral Agent, describing the types and amounts of
insurance (property and liability) covering any of the tangible insurable
Collateral maintained by the Credit Parties in each case naming the Collateral
Agent as loss payee or additional insured, as the case may be, together with a
lender's loss payable endorsement in form and substance satisfactory to the
Collateral Agent; and
(j) evidence that the ratio of Total Funded Debt as of
the Third Amendment Effective Date to EBITDA for the most recently ended four
fiscal quarter period does not exceed 5.5:1.0.
C. POST CLOSING COVENANT
1. The Borrower agrees to deliver, or cause to be delivered, to
the Administrative Agent no later than forty-five days after the Third Amendment
Effective Date:
(a) the duly executed Deeds of Trust covering all of the
Real Estate owned or leased by the Borrower or any other Credit Party described
in Section A of Schedule 1.1R, the duly executed Collateral Assignments covering
all locations where the Borrower or any other Credit Party leases warehouse or
distribution space as described in Section B of Schedule 1.1R with landlord
consents (unless waived by the Administrative Agent after determining in its
sole discretion that the Credit Parties have unsuccessfully used their
commercially reasonable efforts to obtain such Collateral Assignments and
landlord consents), duly executed counterparts of Processor Agreements with all
third party processors of any Credit Party's inventory if the inventory located
with such processor has an aggregate value of $250,000 or more (unless waived by
the Administrative Agent after determining in its sole discretion that the
Credit Parties have unsuccessfully used their commercially reasonable efforts to
obtain such Processor Agreements), and the duly executed counterparts of the
other Real Estate Documents;
(b) (i) title insurance policies (with endorsements as
required by the Administrative Agent), current as-built ALTA/ACSM Land Title
surveys certified to the Collateral Agent, and except to the extent waived by
the Administrative Agent in its sole discretion, zoning letters, building
permits and certificates of occupancy, in each case relating to the Real Estate
described in Section A of Schedule 1.1R, in form and substance satisfactory to
the Administrative Agent; (ii) evidence that counterparts of such Deeds of Trust
have been recorded in all places to the extent necessary or desirable, in the
judgment of Administrative Agent, to create a valid and enforceable first
priority lien (subject to Liens permitted pursuant to Section 8.01) on each such
Deed of Trust Property in favor of the Collateral Agent for the benefit of the
Lenders and SunTrust Bank (or in favor of such other trustee as may be required
or desired
-16-
17
under local law); and (iii) an opinion of counsel in each state in which the
Real Estate listed in Section A of Schedule 1.1R is located in form and
substance and from counsel satisfactory to the Administrative Agent; and
(c) satisfactory field audits of all accounts receivable,
inventory and other personal property of the Credit Parties requested by the
Lenders.
2. The Borrower agrees to deliver, or cause to be delivered, to
the Administrative Agent no later than fifteen days after the Third Amendment
Effective Date, UCC, tax, judgment and fixture lien searches in all
jurisdictions and under all names that the Administrative Agent has requested,
showing no Liens of record other than Liens permitted under the Credit
Agreement.
3. The Borrower agrees to deliver, or cause to be delivered, to
the Administrative Agent no later than thirty days after the Third Amendment
Effective Date, certified articles of merger, assignments, releases of liens and
such other documents as the US Patent and Trademark Office shall require, or
otherwise, to evidence each Credit Party's patents, patent applications,
trademarks and trademark applications as being owned by such Credit Party under
its current name.
4. The Borrower acknowledges and agrees that the failure of the
Borrower to satisfy the foregoing conditions by the deadlines set forth above
shall constitute an Event of Default under the Credit Agreement.
D. COLLATERAL
1. The Borrower agrees that it has or will, pursuant to Section
C(1) above, pledge and cause all of its Subsidiaries to pledge all of their real
and personal property as Collateral under the Security Documents for their
respective obligations under the Credit Documents and the Borrower's obligations
under the SunTrust Note, except that the Borrower and its Subsidiaries shall not
be obligated to pledge the following assets or property:
a. All assets and property of Xxxxx Funding II, and all
capital stock of Xxxxx Funding II;
b. All assets of the Borrower and its Subsidiaries
excluded from the definition of Collateral as defined in the Security
Agreement, including without limitation, (i) all accounts receivable
and related assets sold or contributed, or purported to be sold or
contributed, directly or indirectly, to Xxxxx Funding II pursuant to
the Borrower's asset securitization, (ii) all accounts receivable and
related assets owed by account debtors located outside the United
States to the extent factored by GE Factors or any third party and
(iii) all accounts receivable of Fabrica International and related
assets factored by SunTrust Bank so long as the proceeds thereof are
deposited into bank accounts at SunTrust Bank subject to the Master
Account Agreement;
-17-
18
c. All equipment or related collateral owned by SAFECO
Credit Company, Inc. and leased to The Xxxxx Group, Inc. pursuant to
that certain Master Equipment Lease Agreement dated as of August 15,
2000, and all subleases of such equipment;
d. All capital stock of Chroma Technologies, Inc. and
Fabrica International, Inc.;
e. The Borrower's office at the Chattanooga, Tennessee
airport, the Borrower's lease of (i) its New York show room located at
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (ii) its New York sales
office located at 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, (iii)
its Atlanta carpets show room located at 000 Xxxxxxxxx Xxxxxx, XX,
Xxxxxxx, XX 00000, (iii) its Chicago carpets show room located at 222
Merchandise Mart Plaza, and (iv) its High Points, North Carolina
carpets show room located at 000 Xxxx Xxxx Xxxxxx, Xxxx Xxxxxx, Xxxxx
Xxxxxxxx 00000;
f. The lots of real estate described, with their
approximate value, on Exhibit B; and
g. All trucks and other rolling stock of the Credit
Parties.
2. The Borrower agrees that it will not permit the aggregate
amount of accounts receivable owed by accounts debtors located outside the
United States to exceed $5,000,000 at any time.
3. The Borrower agrees that it will not permit the aggregate
amount of property located at its warehouse in the Netherlands to exceed
$2,000,000 at any time.
E. MISCELLANEOUS
1. Except for the amendments and agreements expressly set forth
above, the Credit Agreement shall remain unchanged and in full force and effect.
The Borrower acknowledges and expressly agrees that the Lenders reserve the
right to, and do in fact, require strict compliance with the terms and
provisions of the Credit Agreement, as amended by this Amendment.
2. The Borrower hereby affirms and restates as of the date hereof
all covenants set forth in the Credit Agreement, as amended hereby, and such
covenants are incorporated by reference herein as if set forth herein directly.
3. To induce the Lenders to enter into this Amendment (A) the
Borrower hereby represents and warrants that the representations and warranties
set forth in Article VI of the Credit Agreement as amended hereby are true and
correct, (B) the Borrower hereby restates, ratifies and reaffirms each and every
term and condition set forth in the Credit Agreement, as amended hereby, and in
the Credit Documents, effective as of the date hereof; and (C) the Borrower
hereby certifies that no Event of Default has occurred and is continuing.
-18-
19
4. The Borrower agrees to pay all costs and expenses of the
Administrative Agent and the Lenders incurred in connection with the
preparation, execution, delivery and enforcement of this Amendment, including
the reasonable fees and out-of-pocket expenses of Administrative Agent's and
each Lender's counsel.
5. Except as expressly amended herein, all terms, covenants and
conditions of the Credit Agreement and all other Credit Documents shall remain
in full force and effect. The parties hereto do expressly ratify and confirm the
Credit Agreement as amended herein.
6. The Borrower hereby agrees that except as explicitly stated
herein nothing herein shall constitute a waiver by the Lenders of any Event of
Default, whether known or unknown, which may exist under the Credit Agreement.
The Borrower hereby further agrees that no action, inaction or agreement by the
Lenders, including, without limitation, any indulgence, waiver, consent or
agreement altering the provisions of the Credit Agreement which may have
occurred with respect to the non-payment of any obligation during the terms of
the Credit Agreement or any portion thereof, or any other matter relating to the
Credit Agreement, shall require or imply any future indulgence, waiver, or
agreement by the Lenders. In addition, the Borrower acknowledges and agrees that
it has no knowledge of any defenses, counterclaims, offsets or objections in its
favor against the Administrative Agent or any Lender with regard to any of the
obligations due under the terms of the Credit Agreement or any other Credit
Document as of the date of this Amendment.
7. This Amendment shall be binding upon and inure to the benefit
of the parties hereto, their respective successors, successors-in-titles, and
assigns.
8. 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.
9. This Amendment shall be governed by and construed in
accordance with the laws of the State of Georgia.
10. This Amendment may be executed by one or more of the parties
hereto in any number of separate counterparts, each of which shall be deemed an
original and all of which, taken together, shall be deemed to constitute one and
the same instrument. Delivery of an executed counterpart of this Amendment by
facsimile transmission shall be as effective as delivery of a manually executed
counterpart hereof.
-19-
20
IN WITNESS the hand and seal of the parties hereto through their duly
authorized officers, as of the date first above written.
THE XXXXX GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxxx
------------------------------------------
Xxxxxx X. Xxxxxxx
Chairman and CEO
By: /s/ Xxxx X. Xxxxxx
------------------------------------------
Xxxx X. Xxxxxx
Vice President and Chief Financial Officer
Attest: /s/ Starr X. Xxxxx
--------------------------------------
Starr X. Xxxxx
Secretary
[CORPORATE SEAL]
Address:
The Xxxxx Group, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO THIRD AMENDMENT]
21
SUNTRUST BANK, formerly known as
SunTrust Bank, Atlanta, individually and as
Administrative Agent
By: /s/
----------------------------------------
Title:
Address:
SunTrust Bank
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Payment Office:
00 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
[SIGNATURE PAGE TO THIRD AMENDMENT]
22
BANK OF AMERICA, N.A., formerly known as
Nationsbank, N.A., individually and as
Documentation Agent
By: /s/
-------------------------------------
Title:
Address:
000 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Mr. Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO THIRD AMENDMENT]
23
SOUTHTRUST BANK, formerly known as
SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By: /s/
--------------------------------------
Title:
Address:
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000
Attn: Xx. Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO THIRD AMENDMENT]
24
FIRST UNION NATIONAL BANK
By: /s/
-------------------------------------
Title:
Address:
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000-0000
Attn: Xx. Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO THIRD AMENDMENT]
25
THE CHASE MANHATTAN BANK
By: /s/
---------------------------------------
Title:
Address:
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xx. Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
[SIGNATURE PAGE TO THIRD AMENDMENT]
26
SCHEDULE 1.1R
A. REAL ESTATE LOCATIONS FOR DEEDS OF TRUST
Office Building - Held For Sale (No title insurance, survey or other
0000 Xxxxx Xxxxxxx Xxxxxx real estate diligence to be required on
Xxxxxxxxxxx, XX 00000 this location)
(Xxxxxxxx County)
Bretlin, Inc.
000 X. Xxxxxxxxxx Xxxx.
Xxxxxxx, XX 00000 (Xxxxxx County)
Bretlin Recycling
0000 Xxxxxxxx Xxxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000 (Xxxxxx County)
Bretlin - Needlepunch - Dalton
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000 (Xxxxxxxxx County)
Bretlin - Colormaster
000 Xxxx Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000 (Xxxxxx County)
Candlewick Yarns
0000 Xxxxxx Xx.
Xxxxxx, XX 00000 (Xxxxxxxxx County)
Candlewick Calhoun Yarn Plant
000 Xxxxx Xxxxxxxxxx Xxxx.
Xxxxxxx, XX 00000 (Xxxxxx County)
Candlewick Extrusion
000 Xxx Xxxxxx Xxxx
Xxxxxxx, XX 00000 (Xxxxxx County)
Candlewick Xxxxx Plant
000 Xxxxxxxxxx Xxxx
Xxxxxxxx, XX 00000 (Catoosa County)
Candlewick Lemoore Plant
000 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000 (Kings County)
27
Candlewick Roanoke Plant
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000 (Xxxxxxxx County)
Carriage Industries, Inc.
000 Xxxxx Xxxxxxxxxx Xxxx., XX
Xxxxxxx, XX 00000 (Xxxxxx County)
Carriage Keystone Building
000 Xxxxx Xxxxxxxxxx Xxxx., XX
Xxxxxxx, XX 00000 (Xxxxxx County)
Colorworks
000 Xxxxxx Xx.
Xxxxxxx, XX 00000 (Xxxxxx County)
Carriage Distribution Center
000 Xxxxx Xxxxx Xx.
Xxxxxxx, XX 00000 (Xxxxxx County)
Dixie Logistics Truck Xxxx
Xxxxx Xxxxxxxxxx Xxxx., XX
Xxxxxxx, XX 00000 (Xxxxxx County)
Masland Carpets
000 Xxxx Xxxxx Xxxxx
Xxxxxxxx, XX 00000 (Mobile County)
Masland Carpets
000 Xxxxxx Xx.
Xxxxxx, XX 00000 (Escambia County)
Fabrica (Manufacturing Facility) - Leased
0000 Xxxxxxx Xxxxxx
Xxxxx Xxx, XX 00000
Fabrica
Catalina Island Condominium
00 Xxxxxxx
Xxxxxx, XX
Carriage Indiana Warehouse
00000 Xxxxxx Xx. #0
00
Xxxxxxx, XX 00000 (Elkhart County)
Xxxxx Group
0000 Xxxx Xxxx #00 098 049 00 000 ($74,800) [Dixie leases this property to
H&S Homes, LLC w/ option to purchase] and
0000 Xxxx Xxxx #00 098 050 00 000 ($51,000)
Xxxxxx County, NC
Xxxxx Group
Hope Xxxxx (21.08 acres) #0000-00-0000 ($87,617) Hope Xxxxx (67.15 acres Mill
land including 20.72 acres Hope Xxxxx Lake) #0000-00-0000 ($127,172)
Cumberland County, NC
Golf Course and tracts of land in Xxxxxx City, Tennessee
29
B. LEASED LOCATIONS FOR COLLATERAL ASSIGNMENTS OF LEASE OR COLLATERAL
ASSIGNMENTS OF DISTRIBUTION AGREEMENTS
Bretlin Tufting - Leased
0000 Xxxxxxxxx Xxxxx
Xxxxxx, XX 00000 (Xxxxxxxxx County)
Bretlin - Sales - Dalton - Leased
0000 Xxxxx Xxxxx
Xxxxxx, XX 00000 (Xxxxxxxxx County)
Bretlin Tufting - Leased
00X Xxxx Xxxxx
Xxxxxxxxxx, XX 00000 (Xxxxxx County)
Bretlin Xxxxxxx Warehouse - Leased
0000 Xxxxxxx Xxxx
Xxxxxxx, XX 30701(Xxxxxx County)
Bretlin Samples - Leased
000 Xxxxxxxxx 0
Xxxxxx, XX 00000 (Xxxxxxxxx County)
Bretlin Raw Material Warehouse - Leased
Xxxxxxxxxxx Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxxx, XX 00000 (Xxxxxxxxx County)
Candlewick West Coast Sales Office and Warehouse - Leased
00000 Xxxx Xxxxxx
Xxxxx Xx Xxxxxxx, XX 00000 (Los Angeles County)
Candlewick Raw Material Warehouse - Leased
0000 XXX 00
Xxxxxxx, XX (Xxxxxx County)
Candlewick Raw Material Warehouse - Leased
000 Xxxxxx Xxxxxx
Xx. Xxxxxxxxxx, XX 00000
Carriage Warehousing - Distribution Agreement
0000 Xxxxx 0xx Xxx.
Xxxxxxxxx, XX 00000
Carriage Warehousing - Distribution Agreement
30
000 X. Xxxxx
Xxxxxx, XX 00000
Carriage Warehousing - Distribution Agreement
0000 Xxxxxxxxxx Xxx, X.X.
Xxxxx, XX 00000
Carriage Warehousing - Distribution Agreement
0000 X. Xxxxx Xx.
Xx. Xxxxx, XX 00000
Xxxxx Logistics Xxxxxx - Xxxxxx
Xxxxx Xxxxxxxxxx Xxxx.
Xxxxxxx, XX 00000 (Xxxxxx County)
Fabrica
0000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxx Xxx, XX 00000
31
EXHIBIT A
ADDITIONAL AGENCY PROVISIONS RELATING TO COLLATERAL AGENT
SECTION 10.09. COLLATERAL AGENT PROVISIONS. (a) Each Lender hereby
designates SunTrust Bank as Collateral Agent to act as specified in this
Agreement and in the Security Documents. Each Lender hereby irrevocably
authorizes, and each holder of any Note by the acceptance of a Note shall be
deemed irrevocably to authorize, the Collateral Agent to take such action on its
behalf under the provisions of this Agreement and any other instruments and
agreements referred to herein, and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required of
the Collateral Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Collateral Agent may perform any of its
duties hereunder by or through its agents or employees.
(b) The Collateral Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement. Neither the Collateral Agent
nor any of its officers, directors, employees or agents shall be liable for any
action taken or omitted by it as such hereunder or in connection herewith,
unless caused by its or their gross negligence or willful misconduct. The
Collateral Agent shall not have by reason of this Agreement a fiduciary
relationship in respect of any Lender; and nothing in this Agreement, expressed
or implied, is intended to or shall be so construed as to impose upon the
Collateral Agent any obligations in respect of this Agreement except as
expressly set forth herein.
(c) (i) Each Lender agrees that, independently and without
reliance upon the Collateral Agent, or the directors, officers, agents or
employees of the Collateral Agent or of any other Lender, each Lender, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Borrower
and its Subsidiaries in connection with the taking or not taking of any action
in connection with this Agreement and the other Credit Documents, including the
decision to enter into this Agreement and to purchase the participation in the
Masland Bonds, and (ii) its own appraisal of the creditworthiness of the
Borrower and its Subsidiaries, and, except as expressly provided in this
Agreement, the Collateral Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the making of any Advance or at any time or times thereafter.
(ii) The Collateral Agent shall not be responsible to any
Lender for any recitals, statements, information, representations or warranties
herein or in any document, certificate or other writing delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement or the
Notes or the Masland Bonds or the financial condition of the Borrower or its
Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or the Notes or the Masland Bonds, or the financial
32
condition of the Borrower or its Subsidiaries, or the existence or possible
existence of any Default or Event of Default.
(d) If the Collateral Agent shall request instructions from the
Required Lenders with respect to any act or action (including the failure to
act) in connection with this Agreement or the Security Documents, the Collateral
Agent shall be entitled to refrain from such act or taking such action unless
and until the Collateral Agent shall have received instructions from the
Required Lenders and the Collateral Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Collateral Administrative
Agent as a result of the Collateral Agent acting or refraining from acting
hereunder in accordance with the instructions of the Required Lenders; provided,
however, that the Collateral Agent shall not be required to act or not act in
accordance with any instructions of the Required Lenders if to do so would
expose the Collateral Agent to personal liability or would be contrary to any
Credit Document or to applicable law.
(e) The Collateral Agent may assume that no Event of Default has
occurred and is continuing, unless the Collateral Agent has received notice from
the Borrower stating the nature of the Event of Default, or has received notice
from a Lender stating the nature of the Event of Default and that such Lender
considers the Event of Default to have occurred and to be continuing.
(f) Neither the Collateral Agent nor any of its directors,
officers, agents, or employees shall be liable for any action taken or not taken
by them in such capacity under or in connection with the Credit Documents,
except for their own gross negligence or willful misconduct. Without limitation
on the foregoing, the Collateral Agent and their respective directors, officers,
agents, and employees:
(i) may treat the payee of any Note as the holder thereof
until the Administrative Agent receives notice of the assignment or
transfer thereof in form satisfactory to the Administrative Agent,
signed by the payee and may treat each Lender as the owner of that
Lender's interest in the obligations due to the Lender for all purposes
of this Agreement until the Administrative Agent receives notice of the
assignment or transfer thereof, in form satisfactory to the
Administrative Agent, signed by that Lender;
(ii) may consult with legal counsel, in-house legal counsel,
independent public accountants, in-house accountants and other
professionals, or other experts selected by it with reasonable care, or
with legal counsel, independent public accountants, or other experts
for the Borrower, and shall not be liable for any action taken or not
taken by it or them in good faith in accordance with the advice of such
legal counsel, independent public accountants, or experts;
(iii) will not be responsible to any Lender for any statement,
warranty, or representation made in any of the Credit Documents or in
any notice, certificate, report, request, or other statement (written
or oral) in connection with any of the Credit Documents;
33
(iv) except to the extent expressly set forth in the Credit
Documents, will have no duty to ascertain or inquire as to the
performance or observance by the Borrower or any other Person of any of
the terms, conditions, or covenants of any of the Credit Documents or
to inspect the property, books, or records of the Borrower or any
Subsidiary or other Person;
(v) will not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness,
effectiveness, sufficiency, or value of any Credit Document, any other
instrument or writing furnished pursuant thereto or in connection
therewith;
(vi) will not incur any liability by acting or not acting in
reliance upon any Credit Document, notice, consent, certificate,
document, statement, telex, telecopier message or other instrument or
writing believed by it or them to be genuine and to have been signed,
sent or made by the proper Person; and
(vii) will not incur any liability for any arithmetical error
in computing any amount payable to or receivable from any Lender
hereunder, including, without limitation, payment of principal and
interest on the Notes, Advances, and other amounts; provided that
promptly upon discovery of such an error in computation, the Collateral
Agent, the Lender, and (to the extent applicable) the Borrower shall
make such adjustments as are necessary to correct such error and to
restore the parties to the position that they would have occupied had
the error not occurred.
(g) Each Lender and SunTrust Bank, individually, shall, ratably in
accordance with the respective outstanding principal amount of its Advances with
respect to any Lender and in accordance with the outstanding principal amount
under the SunTrust Chattanooga Note, indemnify and hold the Collateral Agent and
its directors, officers, agents, and employees harmless against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements of any kind or nature whatsoever (including,
without limitation, attorneys' fees and disbursements) that may be imposed on,
incurred by, or asserted against it or them in any way relating to or arising
out of the Credit Documents (other than losses incurred by reason of the failure
by the Borrower to pay the obligations due to the Lenders hereunder or under the
Notes) or any action taken or not taken by it as Collateral Agent thereunder,
except for the gross negligence or willful misconduct of such party. Without
limitation of the foregoing, each Lender shall reimburse the Collateral Agent
upon demand for that Lender's ratable share of any cost or expense incurred by
the Collateral Agent in connection with the negotiation, preparation, execution,
delivery, administration, amendment, waiver, refinancing, restructuring,
reorganization (including a bankruptcy reorganization), or enforcement of the
Credit Documents, to the extent that the Borrower is required to pay that cost
or expense but fails to do so upon demand.
(h) SunTrust Bank (and each successor Collateral Agent) has the
same rights and powers under the Credit Documents as any other Lender and may
exercise the same as though it
34
were not the Collateral Agent and the term "the Lenders" or "Lender" includes
SunTrust Bank in its individual capacity. SunTrust Bank (and each successor
Collateral Agent), and its Affiliates may accept deposits from, lend money to,
and generally engage in any kind of banking, trust or other business with the
Borrower and any Affiliate or Subsidiary of the Borrower, as if it were not the
Collateral Agent and without any duty to account therefor to the Lenders.
SunTrust Bank (and each successor Collateral Agent) need not account to any
other Lender for any monies received by it for reimbursement of its costs,
expenses and fees as the Collateral Agent hereunder, or for any monies received
by it in its capacity as a Lender hereunder, except as otherwise provided
herein. This Agreement shall not be deemed to constitute a joint venture or
partnership among the Lenders.
(i) The Collateral Agent may resign as such at any time by written
notice to the Borrower and the Lenders, to be effective upon a successor's
acceptance of appointment as Collateral Agent. In such event, subject to the
approval of the Borrower, the Required Lenders shall appoint a successor
Collateral Agent, who must be from among the Lenders; provided, that the
Collateral Agent shall be entitled to appoint a successor Collateral Agent from
among the Lenders, subject to acceptance of appointment by that successor
Collateral Agent and subject to the approval of the Borrower, if the Required
Lenders have not appointed a successor Collateral Agent within thirty (30)
calendar days after the date the Collateral Agent gave notice of resignation or
was removed. Upon a successor's acceptance of appointment as Collateral Agent,
the successor will thereupon succeed to and become vested with all the rights,
powers, privileges, and duties of the Collateral Agent under the Credit
Documents, and the resigning Collateral Agent will thereupon be discharged from
its duties and obligations thereafter arising under the Credit Documents.
00
XXXXXXX X
XXXXX XXXX
Xxxxxx Xxxx, XX:
Xxx 000 Xxxxxx Xxxx (x0,000)
Xxx 00 Xxxxxx Xxxx ($1,625)
Xxx 000 Xxxxxx Xxxx (x000)
Xxx 000 Xxxxxx Xxxx ($1,175)
Xxxxxx County, NC:
May Street #01 041 063 00 000 ($6,500)
S. Xxxx Xxxx #00 098 051 00 000 ($4,600)
S. Xxxx Xxxx #00 098 052 00 000 ($17,500)
S. Xxxx Xxxx #00 098 53 00 000 ($17,400)
Xxxx Xxxx #00 098 054 00 000 ($16, 000)
Xxxxx Xxxxxx #00 063B 016 00 000 ($600)
Xxxx Street #10 063B 095 00 000 ($700)
Xxx 000 #00 063C 008 00 000 ($3,400)
Xxxxxx Xxxxxx #00 063C 009 00 000 ($3,400)
Xxxxxx Xxxxxx #00 063C 010 00 000 ($3,000)
Xxxxxx Xxxxxx #00 063C 011 00 000 ($3,000)
Xxxxxx Xxxxxx #00 063C 012 00 000 ($5,100)
Meadow Street #10, 063C 013 00 000 ($3,000)
Xxxxxx Xxxxxx #00 063C 014 00 000 ($3,000)
Xxxxxx Xxxxxx #00 063C 015 00 000 ($3,000)
Xxxxxx Xxxxxx #00 063C 016 00 000 ($14,800)
Xxxxx Xxxxxx #00 063C 017 00 000 ($3,900)
Xxxxx Xxxxxx #00 063C 018 00 000 ($3,200)
Xxxxx Xxxxxx #00 063C 019 00 000 ($3,200)
Xxxxx Xxxxxx #00 063C 020 00 000 ($3,100)
Xxxxx Xxxxxx #00 063C 021 00 000 ($1,900)
Xxxxx Xxxxxx #00 063C 022 00 000 ($2,300)
Xxxxx Xxxxxx #00 063C 023 00 000 ($3,100)
Xxxxx Xxxxxx #00 063C 024 00 000 ($3,100)
Xxxxx Xxxxxx #00 063C 025 00 000 ($3,100)
Xxxxx Xxxxxx #00 063C 026 00 000 ($3,100)
Xxxxxxxx Xx. #00 063C 074 00 000 ($7,000)
Xxxxx Street #10 070 002 00 000 ($4,200)
Xxxxx Street #10 070 0002 06 000 ($1,100)
Xxxxx Park Road #10 070A 043 00 000 ($3,600)
Xxxx Xxxx #00 070A 051 00 000 ($9,300)
00
Xxxx Xxxx #00 070A 054 00 000 ($9,900)
Xxxx Xxxx #00 070A 055 00 000 ($10,100)
Xxxx Xxxx #00 070A 056 00 000 ($10,300)
Xxxx Xxxx #00 070A 057 00 000 ($8,600)
Xxxx Xxxx #00 070A 058 00 000 ($7,100)
Xxxxxx Street (Mt. Xxxxx) #15 019B 119 00 000 ($2,000)
Xxxxxx Street (Mt. Xxxxx #15 019B 120 00 000 ($1,900)
0000 Xxxxxxx Xxxx Xxxx (Xxx Xxxx) #00 124 019 00 912 ($3,300)
Cumberland County, NC:
Hope Xxxxx (9.8 acres) #0000-00-0000 ($35,535)
Hope Xxxxx (.60 acres) #0000-00-0000 ($5,250)
Hope Xxxxx (.65 Bluff Mill Tract) #0405-40-4596) ($2,750)
Hope Xxxxx (7.51 acres Rockfish Creek between Lakeview Dr. and Legion Rd)
#0000-00-0000 ($9,578)
Hope Xxxxx (lot 24 Courthouse Acres) #0000-00-0000 ($8,000)
Hope Xxxxx (Lot 23 Courthouse Acres) #0000-00-0000 ($8,000)
Hope Xxxxx (Lot 22 Courthouse Acres) #0000-00-0000 ($8,000)
Hope Xxxxx Xxx 00 Xxxxxxxxxx Xxxxx) #0000-00-0000 ($8,000)
Warehouse leased in the Netherlands
37
THIRD AMENDMENT TO CREDIT AGREEMENT
SCHEDULE 6.01
SUBSIDIARIES
Material Subsidiaries:
Company Jurisdiction Parent
------- ------------ ------
Amtex, Inc. Tennessee The Xxxxx Group, Inc.
Bretlin, Inc. Georgia Carriage Industries, Inc.
Candlewick Yarns, Inc. Tennessee Carriage Industries, Inc.
Carriage Industries, Inc. Georgia The Xxxxx Group, Inc.
Chroma Technologies, Inc. California The Xxxxx Group, Inc.
Dixie Funding, Inc. Tennessee The Xxxxx Group, Inc.
Xxxxx Group Logistics, Inc. Georgia Carriage Industries, Inc.
Fabrica International California The Xxxxx Group, Inc.
Other Subsidiaries:
Company Jurisdiction Parent
------- ------------ ------
C-Knit Apparel, Inc. Tennessee The Xxxxx Group, Inc.
Dixie Export, Inc. U.S.V.I The Xxxxx Group, Inc.
Dixie Funding II, Inc. Tennessee The Xxxxx Group, Inc.
Wingate Carpets, Inc. Georgia Carriage Industries, Inc.
38
THIRD AMENDMENT TO CREDIT AGREEMENT
SCHEDULE 8.01
LIENS
(i) Specific Assets
a. All equipment or related collateral owned by or pledged to SAFECO
Credit Company, Inc. and leased to The Xxxxx Group, Inc. pursuant to
that certain Master Equipment Lease Agreement dated as of August 15,
2000; and all subleases of such equipment;
b. Real property located in Calhoun, Georgia is subject to a Deed to
Secure Debt dated August 4, 1993, in the amount of $544,156.20 incurred
upon the purchase of the property. A Carriage Industries distribution
center is now under construction on the property.
c. The Borrower and its Subsidiaries have recorded UCC Financing
Statements to effect the sale of its Accounts in connection with the
Loan Agreement, dated as of June 23, 2000 among the Borrower, Dixie
Funding II, Three Pillars Funding Corporation and SunTrust Equitable
Securities Corporation.
d. Liens on the shares of stock of Fabrica International and Chroma
Technologies, Inc. pledged to the former owners to the extent that such
shares of stock secure the contingent deferred purchase price owed to
the former owners.
(ii) Miscellaneous
a. All locations: security interests have been granted in connection with
various copiers, computers and miscellaneous office equipment.
b. All locations: security interests in accounts receivables have been
granted in connection with various factoring contracts.
c. All locations; security interests have been granted in the ordinary
course of business in connection with various automobiles, trucks,
tractor and trailers and operating leases.
