EXHIBIT 10.29
FOURTH AMENDMENT TO
POST-PETITION CREDIT AGREEMENT
THIS FOURTH AMENDMENT TO POST-PETITION CREDIT AGREEMENT (this "Amendment"),
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dated to be effective as of November 14, 2001, is entered into among PILLOWTEX
CORPORATION, PILLOWTEX, INC., PTEX HOLDING COMPANY, PILLOWTEX MANAGEMENT
SERVICES COMPANY, BEACON MANUFACTURING COMPANY, ▇▇▇▇▇▇▇ HOME FASHIONS, INC.,
TENNESSEE WOOLEN ▇▇▇▇▇, INC., FIELDCREST ▇▇▇▇▇▇, INC., CRESTFIELD COTTON
COMPANY, ENCEE, INC., FCC CANADA, INC., FIELDCREST ▇▇▇▇▇▇ FINANCING, INC.,
FIELDCREST ▇▇▇▇▇▇ LICENSING, INC., FIELDCREST ▇▇▇▇▇▇ INTERNATIONAL, INC.,
FIELDCREST ▇▇▇▇▇▇ ▇▇, INC. (formerly known as Fieldcrest ▇▇▇▇▇▇ Sure Fit, Inc.),
FIELDCREST ▇▇▇▇▇▇ TRANSPORTATION, INC., ST. MARYS, INC., AMOSKEAG MANAGEMENT
CORPORATION, DOWNEAST SECURITIES CORPORATION, BANGOR INVESTMENT COMPANY, ▇▇▇▇▇'▇
FALLS CORPORATION, THE ▇▇▇▇▇▇▇ CORPORATION, ▇▇▇▇▇▇▇ OF CALIFORNIA, INC., and
OPELIKA INDUSTRIES, INC. (collectively, the "Borrowers"), the institutions
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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
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Administrative Agent for itself and the Lenders (in said capacity, the
"Administrative Agent").
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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
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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 entirely amending the definitions of
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"Applicable Margin", "EBITDA", "Scheduled Termination Date" and "Total
Credit Commitment" and adding a new definition of "Operational
Restructuring Costs" as follows:
"Applicable Margin": a per annum percentage equal to (a) 4.00%
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with respect to Eurodollar Loans and (b) 1.50% for Base Rate Loans.
"EBITDA": for any period, determined in accordance with GAAP on a
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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 or
accruals for Operational Restructuring Costs, to the extent not
captured in (d), (e), or (f) above.
"Operational Restructuring Costs" for any period, on a
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consolidated basis for the Borrowers and their Subsidiaries the costs
related to the permanent closure of a facility or facilities and the
relocation of the production to an alternative facility or facilities
to the extent included in determining Earnings from Operations
consisting of the sum of (a) payment or accruals for severance and
benefit continuation, plus (b) payment or accruals for employee
retention bonuses, plus (c) expenses incurred to relocate equipment
from a closed facility or facilities to an alternative manufacturing
location or locations, plus (d) payments or accruals to resolve any
environmental issues related to a closed facility or facilities, plus
(e) employee training costs for the relocated equipment, plus (f)
increased quality costs due to the start-up of production at the new
facility or facilities and the phase-down of production at the closed
facility or facilities, plus (g) increased labor and workers
compensation costs during the phase-down of production at the closed
facility or facilities, plus (h) payments or accruals for a general
reduction in force.
"Scheduled Termination Date": June 30, 2002.
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"Total Credit Commitment": $100,000,000 (which amount includes
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the Letter of Credit Commitment), as such sum may be reduced from time
to time.
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(b) Section 2.5(b) is entirely amended, as follows:
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(b) Unused Capacity Fee. For the period of time
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commencing on the Effective Date until, but not including, the
Termination Date, the Borrowers agree to pay in the aggregate
to the Administrative Agent for the pro rata account of each
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Lender in accordance with its Commitment Percentage a
non-refundable unused commitment fee. Such unused commitment
fee will be payable in arrears by the Borrowers, on each
Monthly Payment Date and on the Termination Date. Each payment
of such unused commitment fee shall be determined for the
calendar month (or portion of a calendar month commencing on
the date hereof or ending on the Termination Date) preceding
and including the date such payment is due and shall be equal
to the product of (i) 0.75%, per annum, multiplied by (ii) the
amount by which the average daily Total Credit Commitment
exceeds the sum of (A) the average daily principal amount
outstanding under DIP Loans plus (B) the average daily Letter
of Credit Liability.
(c) Section 2.5(c) is amended by entirely amending and
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restating clause (i) thereof, as follows:
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(i) to the Administrative Agent for the pro rata
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account of each Lender (including the Issuing Bank) in
accordance with its Commitment Percentage, a non-refundable
letter of credit fee at the rate of 4.0% per annum on the
aggregate undrawn and available amount under all outstanding
Letters of Credit; and
(d) Section 8.15 is entirely amended, as follows:
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Section 8.15 Capital Expenditures. Make Capital
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Expenditures in excess of (a) $17,000,000 in the aggregate
from November 14, 2001 through the Scheduled Termination Date,
and (b) $9,000,000 in the aggregate during any fiscal quarter.
(e) Section 8.16 is entirely amended, as follows:
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Section 8.16 Asset Coverage Ratio. Permit, at any
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time, 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, plus (v) asset write-downs during the
fourth fiscal quarter of 2001 attributable to the permanent
closure of certain facilities, which do not exceed $14,000,000
in the aggregate, 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:
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Period Minimum Ratio
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September 30, 2001 through October 31, 2001 1.21 to 1.00
November 1, 2001 through December 31, 2001 1.20 to 1.00
January 1, 2002 through March 31, 2002 1.17 to 1.00
April 1, 2002 through June 30, 2002 1.15 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
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below to be less than the amount set forth opposite each such
period:
Period Amount
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1 fiscal month ended 11/3/01 $ 1,065,000
2 fiscal months ended 12/1/01 $ 1,256,000
3 fiscal months ended 12/29/01 $ 3,286,000
4 fiscal months ended 2/2/02 $ 4,164,000
5 fiscal months ended 3/2/02 $ 6,636,000
6 fiscal months ended 3/30/02 $10,566,000
7 fiscal months ended 5/4/02 $12,244,000
8 fiscal months ended 6/1/02 $14,299,000
9 fiscal months ended 6/29/02 $19,831,000
(g) A new Section 8.18 is added immediately following
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Section 8.17, as follows:
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Section 8.18 Restructuring Costs. Permit Operational
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Restructuring Costs incurred and/or paid for the periods set
forth below to be greater than the amount set forth opposite
each such period:
Period Amount
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3 fiscal months ended 12/29/01 $7,000,000
6 fiscal months ended 3/30/02 $8,000,000
9 fiscal months ended 6/29/02 $9,000,000
(h) Section 10.3 is amended by inserting the text,
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"financial advisors," immediately following the text, "agents," found
in such Section 10.3.
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(i) Section 11.1 is amended by deleting the word, "and",
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immediately following the semi-colon in clause (b) thereof, deleting
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the period (".") at the end of clause (c) thereof and replacing it with
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the text, "; and", and adding a new clause (d) to such Section 11.1
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immediately following clause (c) thereof, as follows:
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(d) no such waiver and no such amendment, supplement or
modification shall amend, modify or waive any provision of
Section 8.16 without the written consent of Lenders on the
date of such waiver, amendment, supplement or modification
having Credit Exposures aggregating in excess of 66 2/3% of
the aggregate Credit Exposures of all Lenders on such date.
2. AMENDMENT FEE. Borrowers shall pay to the Administrative
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Agent, for 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, November 14, 2001, an amendment fee in an amount equal to the
product of (a) 0.50% multiplied by (b) an amount equal to such Lender's portion
of the 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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6 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 6 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 2 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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3. ADDITIONAL EVENTS OF DEFAULT. Notwithstanding anything in the
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DIP 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 (a) file, on or prior to December 31, 2001, a feasible plan of reorganization
and disclosure statement, substantially complete in form and substance, that
complies with all applicable provisions of Chapter 11 of the Bankruptcy Code,
including Section 1129(a)(9), and provides for the cash payment, in full, of all
outstanding DIP Loans, the replacement or liquidation of all Letters of Credit,
and the cash payment of all administrative expenses, (b) obtain, on or prior to
March 1, 2002, the Bankruptcy Court's approval of a disclosure statement, (c)
obtain confirmation from the Bankruptcy Court of a plan on or prior to May 15,
2002, or (d) cause a plan to become effective on or prior to June 30, 2002
(each, a "Plan Default").
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4. WAIVER FEE REGARDING PLAN DEFAULTS. Notwithstanding anything
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in the DIP Financing Documents to the contrary, waiver of any Plan Default will
require approval of the Required Lenders and the Borrowers' payment of a fee,
for the pro rata benefit of the Lenders that timely execute and deliver the
waivers to the Administrative Agent (or its counsel), equal to 0.50% of an
amount equal to each such Lender's portion of the Total Credit Commitment at the
time of such waiver.
5. REPRESENTATIONS AND WARRANTIES. By its execution and delivery
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hereof, the Borrowers represent and warrant to the Lenders that, as of the date
hereof:
(a) 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;
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(b) no event has occured 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 Borrower), is required for the
execution, delivery or performance by the Borrowers of this Amendment.
6. CONDITIONS OF EFFECTIVENESS. This Amendment shall be effective only
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after each of the following conditions precedent shall have been satisfied;
provided that the Lenders hereby waive satisfaction of the conditions set forth
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in clauses (b) and (c) below until such time as the Bankruptcy Court shall have
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the opportunity to consider this Amendment, and if the Bankruptcy Court does not
approve this Amendment after such consideration, then this Amendment shall be
null and void and of no further force or effect, and provided further that the
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Lenders shall have no commitment to fund DIP Loans, and Issuing Bank shall not
issue Letters of Credit, during the period commencing on the date hereof and
continuing through and including the date the Bankruptcy Court considers this
Amendment:
(a) the Administrative Agent shall receive counterparts of this
Amendment executed by the Lenders and the Borrowers;
(b) Borrowers shall pay the Amendment Fee;
(c) the Bankruptcy Court shall enter an order approving this Amendment,
which order must also contain a clarification that proceeds from the liquidation
of accounts receivable and inventory of Borrowers' blankets division shall be
applied to payment of the Pre-Petition Indebtedness;
(d) the representations and warranties set forth in Section 5 of this
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Amendment shall be true and correct; and
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(e) 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.
7. 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.
8. COUNTERPARTS; EXECUTION VIA FACSIMILE. This Amendment may be
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executed in one or more counterparts, each of which shall be deemed an original,
but all of which together shall constitute one and the same instrument. This
Amendment may be validly executed and delivered by facsimile or other electronic
transmission.
9. 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.
10. HEADINGS. Section headings in this Amendment are included herein
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for convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
11. 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.
12. 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
▇▇▇▇▇▇▇ HOME FASHIONS, INC.
TENNESSEE WOOLEN ▇▇▇▇▇, INC.
FIELDCREST ▇▇▇▇▇▇, INC.
CRESTFIELD COTTON COMPANY
ENCEE, INC.
FCC CANADA, INC.
FIELDCREST ▇▇▇▇▇▇ FINANCING, INC.
FIELDCREST ▇▇▇▇▇▇ LICENSING, INC.
FIELDCREST ▇▇▇▇▇▇ INTERNATIONAL, INC.
FIELDCREST ▇▇▇▇▇▇ ▇▇, INC. (formerly known as Fieldcrest ▇▇▇▇▇▇ Sure Fit, Inc.)
FIELDCREST ▇▇▇▇▇▇ TRANSPORTATION, INC.
ST. MARYS, INC.
AMOSKEAG MANAGEMENT CORPORATION
DOWNEAST SECURITIES CORPORATION
BANGOR INVESTMENT COMPANY
▇▇▇▇▇'▇ FALLS CORPORATION
THE ▇▇▇▇▇▇▇ CORPORATION
▇▇▇▇▇▇▇ OF CALIFORNIA, INC.
OPELIKA INDUSTRIES, INC.
By: _________________________
Name:____________________
Title:___________________
Fourth Amendment to Post Petition Credit Agreement
Signature Page
ADMINISTRATIVE AGENT:
BANK OF AMERICA, N.A., as Administrative Agent, Issuing Bank and a Lender
By: ________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
Managing Director
Fourth Amendment to Post Petition Credit Agreement
Signature Page
LENDERS:
THE BANK OF NOVA SCOTIA ▇▇▇▇▇▇▇ SACHS CREDIT PARTNERS L.P.
By: ___________________________________ By: ______________________________
Name:__________________________________ Name:_____________________________
Title:_________________________________ Title:____________________________
CREDIT LYONNAIS - NEW YORK BRANCH ▇▇▇▇▇▇ COMMERCIAL PAPER, INC.
By: ___________________________________ By: ______________________________
Name:__________________________________ Name:_____________________________
Title:_________________________________ Title:____________________________
PB CAPITAL CORPORATION
FLEET NATIONAL BANK, (formerly known as
Fleet Bank, N.A.)
By: ______________________________
By: ___________________________________ Name:_____________________________
Name:__________________________________ Title:____________________________
Title:_________________________________
FRANKLIN FLOATING RATE TRUST By: ______________________________
Name:_____________________________
By: ___________________________________ Title:____________________________
Name:__________________________________
Title:_________________________________
GENERAL ELECTRIC CAPITAL CORPORATION
By:
Fourth Amendment to Post Petition Credit Agreement
Signature Page
Name:__________________________________________
Title:_________________________________________
OCM ADMINISTRATIVE SERVICES II, L.L.C.
By Oaktree Capital Management, LLC, Its Manager
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
FOOTHILL INCOME TRUST II, L.P.
By: ___________________________________________
Name:__________________________________________
Title:_________________________________________
Fourth Amendment to Post Petition Credit Agreement
Signature Page