Exhibit
[EXECUTION FINAL]
TENTH AMENDMENT TO CREDIT AGREEMENT
TENTH AMENDMENT TO CREDIT AGREEMENT, dated as of August 11, 2003 (this
"Amendment"), to the Credit Agreement dated as of June 29, 1999 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement")
among DONNKENNY APPAREL, INC. a Delaware corporation (DKA), ▇▇▇▇▇▇▇ INDUSTRIES
CORPORATION, a Delaware corporation ("BIC"; together with DKA, and severally,
the "Borrowers"), the Guarantors party thereto, the Lenders party thereto and
THE CIT GROUP/COMMERCIAL SERVICES, INC. as agent for the Lenders (in such
capacity, the "Agent").
The Borrowers, the Guarantors, the Lenders and the Agent are parties to the
Credit Agreement.
The Borrowers have requested that the Lenders (a) decrease the Total
Revolving Credit Commitment, (b) agree to extend the Final Maturity Date and (c)
amend the negative covenants relating to redemption of Parent's common stock and
capital expenditures.
The Lenders are willing to (a) decrease the Total Revolving Credit
Commitment, (b) extend the Final Maturity Date and (c) amend the negative
covenants relating to redemption of Parent's common stock and capital
expenditures, all upon the terms and subject to the conditions set forth in this
Amendment.
Accordingly, in consideration of the mutual agreements set forth herein,
and for good and other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Initially capitalized terms used and not otherwise
defined herein shall have their respective meanings as defined in the Credit
Agreement.
2. Reduction of Revolving Credit Commitments. The Total Revolving Credit
Commitments are hereby reduced from $75,000,000 to $65,000,000 and, in order to
evidence such reduction, Schedule 2.01 (b) to the Credit Agreement is hereby
deleted in its entirety and replaced by Schedule 2.01 (b) attached to this
Amendment.
3. Extension of Final Maturity Date. The definition of Final Maturity Date
set forth in the Credit Agreement is hereby amended and restated in its entirety
to read as follows:
"Final Maturity Date" shall mean June 30, 2007."
4. Amendment of Negative Covenants.
(a) Prohibition, with respect to Redemption of Parent's Capital Stock.
Borrowers, Parent, Agent and Lenders agree that Parent shall not be permitted to
redeem, purchase or otherwise acquire for value any shares of its capital stock
without the express prior written consent thereto of Agent, on behalf of
Required Lenders. In order to reflect such agreement, Section 7.04 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"SECTION 7.04 Dividends. Distributions and Payments.
Declare or pay, directly and indirectly, any cash dividends or
make any other distribution, whether in cash, property,
securities or a combination thereof, with respect to (whether
by reduction of capital or otherwise) any shares of its
capital stock or directly or indirectly redeem, purchase,
retire or otherwise acquire for value (or permit any
Subsidiary to purchase or acquire) any shares of any class of
its capital stock or set aside any amount for any such
purchase."
(b) Increase in Permitted Capital Expenditures. Section 7.07 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:
"SECTION 7.07 Capital Expenditures. Permit the
aggregate amount of payments made for capital expenditures,
including Capitalized Lease Obligations and Indebtedness
secured by Liens permitted under Section 7.01(e) hereof, for
the Parent and its Subsidiaries on a consolidated basis, to
exceed in any Fiscal Year $2,500 000 less the aggregate amount
of cash payments or other consideration paid in such Fiscal
Year by Parent (or any of its Subsidiaries) to redeem,
purchase, retire or otherwise acquire any shares of any class
of Parent's capital stock (provided, however, that all such
payments are expressly subject to Agent's prior written
consent thereto, on behalf of Required Lenders, pursuant to
Section 7.04)."
5. Representations and Warranties. Borrowers hereby represent and warrant
to Lenders that the representations and warranties set forth in Article IV of
the Credit Agreement are true on and. as of the date hereof, as if made on and
as of the date hereof, after giving effect to this Amendment, except to the
extent that any such representation or warranty expressly relates to a prior
date, and breach of any of the representations and warranties made in this
paragraph 4 shall constitute an Event of Default under Article VIII(a) of the
Credit Agreement. Borrowers further represent and warrant that, after giving
effect to this Amendment, no Event of Default or event which, with the lapse of
time or the giving of notice or both, would become an Event of Default has
occurred and is continuing, except that, Borrowers hereby advise Agent and
Lenders that Borrowers' financial statements for Borrowers' Fiscal Quarter ended
June 30,
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2003 may reflect that Borrowers have failed to comply with the Tangible Net
Worth covenant set forth in Section 7.12A of the Credit Agreement for such
Fiscal Quarter ended June 30, 2003.
6. Amendment Fee. In consideration of the agreement of Agent and Lenders to
amend the Credit Agreement on the terms and conditions set forth herein,
Borrowers agree to pay to Agent, for the ratable benefit of Lenders, an
amendment fee in the amount of $243,750, which fee is earned and payable in full
as of the date hereof and may, at Agent's option, be charged to any account of
Borrowers maintained by Agent.
7. Effectiveness. This Amendment shall become effective on the date each of
the following conditions precedent shall have been satisfied in full, as
determined by Agent:
(a) Agent shall have received counterparts of this Amendment duly
executed and delivered by each of the parties hereto;
(b) CIT shall have received an amendment to the Factoring Agreements,
duly authorized, executed and delivered by each Borrower in favor of CIT,
in form and substance satisfactory to CIT, pursuant to which the
termination date set forth in the Factoring Agreements shall be extended to
June 30, 2004.
8. Continuing Effect of Credit Agreement, This Amendment shall not
constitute a waiver or amendment of any provision of the Credit Agreement not
expressly referred to herein and shall not be construed as a consent to any
further or future action on the part of either of the Borrowers that would
require consent of Lenders. Except as expressly amended by this Amendment, the
provisions of the Credit Agreement are and shall remain in full force and
effect.
9. Applicable Law. This Amendment shall be construed in accordance with and
governed by the laws of the State of New York (other than the conflicts of law
principles thereof).
10. Counterparts: Facsimile Signature. This Amendment may be executed in
counterparts, each of which shall constitute an original and all of which when
taken together shall constitute but one contract. Delivery of an executed
counterpart of the signature page of this Amendment by facsimile shall be
effective as delivery of a manually executed signature page hereto.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed and delivered by their respective authorized officers as of the
day and year first above written,
DONNKENNY APPAREL, INC., as a Borrower and a Guarantor ▇▇▇▇▇▇▇ INDUSTRIES CORPORATION, as a Borrower and a Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
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Title: VP/CFO Title: VP/CFO
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CHRISTIANBURG GARMENT COMPANY, INCORPORATED, as a H SQUARED DISPOSITIONS, INC., as a Guarantor
Guarantor
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
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Title: VP/CFO Title: VP/CFO
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THE CIT GROUP/COMMERCIAL SERVICES, INC., as Agent DONNKENNY, INC. as a Guarantor
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇
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Title: Vice President Title: VP/CFO
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CENTURY BUSINESS CREDIT CORPORATION, as a Lender THE CIT GROUP/COMMERCIAL SERVICES, INC., as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇ Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Title: Executive Vice President Title: Vice President
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SCHEDULE 2.01(b)
Revolving Credit Commitments
Percentage of Total
Lender Revolving Credit Revolving Loan
Commitment Commitment
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The CIT Group/Commercial Services, Inc. $47,671,000 73 .34%
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇▇
Century Business Credit Corporation $17,329,000 26.66%
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
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