Exhibit 10.7
SIXTH AMENDMENT AND WAIVER TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SIXTH AMENDMENT AND WAIVER TO AMENDED AND RESTATED CREDIT AGREEMENT
(this "Waiver"), dated as of February 15, 2000, is entered into among PILLOWTEX
CORPORATION, a Texas corporation (the "Borrower"), the institutions listed on
the signature pages hereof that are parties to the Credit Agreement defined
below (collectively, the "Lenders"), and BANK OF AMERICA, N.A. (formerly known
as NationsBank, N.A., successor by merger to NationsBank of Texas, N.A.), as
Administrative Agent for itself and the Lenders (in said capacity, the
"Administrative Agent").
BACKGROUND
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A. The Borrower, the Lenders and the Administrative Agent are parties to
that certain Amended and Restated Credit Agreement, dated as of December 19,
1997 (as amended through the date hereof, the "Credit Agreement"). Terms
defined in the Credit Agreement and not otherwise defined herein shall be used
herein as defined in the Credit Agreement.
B. The Borrower has requested a waiver of certain Events of Default under
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 Borrower, the
Lenders and the Administrative Agent covenant and agree as follows:
1. WAIVER. Subject to the satisfaction of the conditions of effectiveness
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set forth in Section 10 of this Waiver and the other conditions contained
-----------
herein, the Lenders hereby waive (a) the Event of Default with respect to
Section 7.11 of the Credit Agreement which occurred as a result of the failure
------------
of the Borrower to comply with the required Leverage Ratio at the end of the
Fiscal Quarter ended October 2, 1999, (b) the Event of Default which occurred as
a result of the failure of the Borrower to cause a lien to be granted to the
Administrative Agent, for the benefit of the Lenders, on certain leasehold
property in Phenix City, Alabama, on or before January 15, 2000, and (c) any
Events of Default with respect to Sections 7.11, 7.12, and 7.13 of the Credit
------------- ---- ----
Agreement which may occur as a result of the failure of the Borrower to comply
with the required Leverage Ratio, Fixed Charge Coverage Ratio, and Net Worth at
the end of the Fiscal Quarter ended January 1, 2000 (the "Existing Events of
------------------
Default"). The waiver provided in this Section 1 shall not be and shall not be
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deemed to be a waiver of any Events of Default under the Credit Agreement other
than the Existing Events of Default.
2. TERMINATION. The Waiver described in Section 1 above shall terminate
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automatically without any action by the Administrative Agent, the Lenders or any
other Person and be of no further force or effect upon termination of the Waiver
Period. For purposes hereof, the
"Waiver Period" shall mean the period commencing on the effective date of this
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Waiver and terminating upon the earliest to occur of (a) ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) the
declaration or payment by the Borrower of any cash dividends in respect of any
Capital Stock of the Borrower, or (c) the occurrence of any Event of Default
other than the Existing Events of Default.
3. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended
------------------------------
as follows:
(a) Section 1.1 is amended by entirely amending the following
-----------
definition:
"Fieldcrest ▇▇▇▇▇▇ Subordinated Debenture Reserve" means (a) for the
------------------------------------------------
period from and including October 8, 1999 through and including ▇▇▇▇▇ ▇▇,
▇▇▇▇, ▇▇▇▇, ▇▇▇ (▇) for the period from and including April 1, 2000 and
thereafter, an amount equal to 50% of the aggregate amount of cash
consideration that may be requested, at any time of determination, by the
holders of Fieldcrest ▇▇▇▇▇▇ Subordinated Debentures in respect of a
conversion thereof.
(b) Section 10.1(f) is hereby amended by inserting the text, ",
---------------
financial advisors," immediately following the word, "attorneys" in the
first sentence thereof.
4. BORROWING BASE. Notwithstanding anything in the Credit Agreement or
--------------
any other Loan Document, commencing on the date of this Waiver and continuing at
all times thereafter the Borrower shall not permit the sum of (a) the
outstanding principal amount of all Revolving Credit Advances, Facility A Term
Loan Advances and Facility B Term Loan Advances and (b) without duplication, the
Reimbursement Obligations, to exceed (i) the book value of the Liquid Assets of
the Borrower and each other Obligor, provided that an Event of Default shall
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arise from Borrower's failure to comply with this clause (i) only if such
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failure continues for seven days after a Responsible Officer of Borrower knows
or reasonably should know of such failure, or (ii) 102.50% of the book value of
the Liquid Assets of the Borrower and each other Obligor. For purposes hereof,
"Liquid Assets" shall mean net accounts receivable, net inventory and cash
balances.
5. CAPITAL EXPENDITURES. Notwithstanding anything in the Credit Agreement
--------------------
or any other Loan Document, during the Waiver Period the Borrower shall not, and
shall not permit any of its Subsidiaries to, make any Capital Expenditures in an
aggregate amount that exceeds $8,000,000.
6. WAIVER FEE. Borrower shall pay to the Administrative Agent, for the
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pro rata benefit of the Lenders that execute and deliver this Waiver to the
Administrative Agent (or its counsel) not later than 5:00 p.m., Dallas time,
February 15, 2000, a waiver fee in an amount equal to the product of (a) 0.15%
multiplied by (b) an amount equal to such Lender's portion of the Commitment.
Such waiver fee shall be paid in immediately available funds and shall be
payable only if the conditions set forth in Section 10 of this Waiver have been
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satisfied and shall be due and payable to each Lender eligible for payment
pursuant to the preceding sentence no later than two
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Business Days after the conditions set forth in Section 10 of this Waiver have
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been satisfied. The Borrower agrees that the failure to pay the waiver fee
provided in this Section 6 shall, after the expiration of any applicable grace
---------
period, be an Event of Default under Section 8.1(b)(ii) of the Credit Agreement.
------------------
7. OVERLINE FACILITY. During the Waiver Period, the Borrower shall not
-----------------
make any payments or prepayments of principal owing under the Overline Facility.
8. RELEASE.
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(a) The Borrower and each Guarantor hereby unconditionally and
irrevocably remises, acquits, and fully and forever releases and discharges
the Administrative Agent and the Lenders and all respective affiliates and
subsidiaries of the Administrative Agent and the Lenders, their respective
officers, servants, employees, agents, attorneys, principals, directors and
shareholders, and their respective heirs, legal representatives, successors
and assigns (collectively, the "Released Lender Parties") from any and all
-----------------------
claims, demands, causes of action, obligations, remedies, suits, damages
and liabilities (collectively, the "Borrower Claims") of any nature
---------------
whatsoever, whether now known, suspected or claimed, whether arising under
common law, in equity or under statute, which the Borrower or any Guarantor
ever had or now has against the Released Lender Parties which may have
arisen at any time on or prior to the date of this Waiver and which were in
any manner related to any of the Loan Documents or the enforcement or
attempted enforcement by the Administrative Agent or the Lenders of rights,
remedies or recourses related thereto.
(b) The Borrower and each Guarantor covenants and agrees never to
commence, voluntarily aid in any way, prosecute or cause to be commenced or
prosecuted against any of the Released Lender Parties any action or other
proceeding based upon any of the Borrower Claims which may have arisen at
any time on or prior to the date of this Waiver and were in any manner
related to any of the Loan Documents.
(c) The agreements of the Borrower and each Guarantor set forth in
this Section 8 shall survive termination of this Waiver and the other Loan
---------
Documents.
9. REPRESENTATIONS AND WARRANTIES. By its execution and delivery hereof,
------------------------------
the Borrower represents and warrants to the Lenders that, as of the date hereof:
(a) after giving effect to the waiver set forth in Section 1 of this
---------
Waiver, the representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct on and as of
the date hereof as if made on and as of such date;
(b) after giving effect to the waiver set forth in Section 1 of this
---------
Waiver, no event has occurred and is continuing which constitutes an Event
of Default;
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(c) the Borrower has full power and authority to execute and deliver
this Waiver, and this Waiver constitutes the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms,
except as enforceability may be limited by applicable 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 Waiver
nor the consummation of any transactions contemplated herein will conflict
with any Law, the articles of incorporation, bylaws or other governance
document of the Borrower or any of its Subsidiaries, or any indenture,
agreement or other instrument to which the Borrower or any of its
Subsidiaries or any of their respective property is subject; 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 the Borrower or any Guarantor), is required for
the execution, delivery or performance by the Borrower of this Waiver or
the acknowledgment of this Waiver by any Guarantor.
10. CONDITIONS OF EFFECTIVENESS. This Waiver shall be effective as of
---------------------------
February 15, 2000, so long as each of the following conditions precedent shall
have been satisfied:
(a) the Administrative Agent shall receive counterparts of (i) this Waiver
and (ii) the Sixth Amendment and Waiver to Term Credit Agreement, each executed
by the Required Lenders (as defined in the Intercreditor Agreement) and the
Borrower and acknowledged by each Guarantor;
(b) the Administrative Agent shall receive counterparts of the Fourth
Amendment to Promissory Note, executed by the Borrower and Bank of America,
N.A., extending the maturity of the Overline Facility to the end of the Waiver
Period;
(c) the representations and warranties set forth in Section 9 of this
---------
Waiver shall be true and correct;
(d) all reasonable out-of-pocket fees and expenses in connection with the
Loan Documents, including this Waiver, including legal and other professional
fees and expenses incurred on or prior to the date of this Waiver by
Administrative Agent or any Lender, including, without limitation, the
reasonable fees and expenses of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C. and
PricewaterhouseCoopers, shall have been paid; and
(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.
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11. GUARANTOR ACKNOWLEDGMENT. By signing below, each of the Guarantors
------------------------
(i) acknowledges, consents and agrees to the execution and delivery of this
Waiver, (ii) acknowledges and agrees that its obligations in respect of its
Subsidiary Guaranty are not released, diminished, waived, modified, impaired or
affected in any manner by this Waiver or any of the provisions contemplated
herein, (iii) ratifies and confirms its obligations under its Subsidiary
Guaranty, and (iv) acknowledges and agrees that it has no claims or offsets
against, or defenses or counterclaims to, its Subsidiary Guaranty as a result of
this Waiver.
12. BANK OF AMERICA CONSENT. Bank of America, N.A., in its capacity as
-----------------------
provider of the Overline Facility, hereby (i) agrees to this Waiver and
acknowledges that the waivers provided herein shall also be effective with
respect to the Overline Facility, (ii) agrees that it will not accept any
payment of principal under the Overline Facility during the Waiver Period, and
(iii) acknowledges that the maturity date of the Overline Facility has been
extended to the termination of the Waiver Period.
13. REFERENCE TO CREDIT AGREEMENT. Upon the effectiveness of this Waiver,
-----------------------------
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 Waiver.
14. COUNTERPARTS; EXECUTION VIA FACSIMILE. This Waiver may be 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 Waiver may be
validly executed and delivered by facsimile or other electronic transmission.
15. GOVERNING LAW: BINDING EFFECT. This Waiver shall be governed by and
-----------------------------
construed in accordance with the laws of the State of Texas and shall be binding
upon the Borrower, the Administrative Agent, each Lender and their respective
successors and assigns.
16. HEADINGS. Section headings in this Waiver are included herein for
--------
convenience of reference only and shall not constitute a part of this Waiver for
any other purpose.
17. LOAN DOCUMENT. This Waiver is a Loan Document and is subject to all
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provisions of the Credit Agreement applicable to Loan Documents, all of which
are incorporated in this Waiver by reference the same as if set forth in this
Waiver verbatim.
18. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
------------------
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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PILLOWTEX CORPORATION
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President/Treasurer
BANK OF AMERICA, N.A. (formerly
known as NationsBank, N.A., successor by
merger to NationsBank of Texas, N.A.), as
Administrative Agent and as a Lender, Swing
Line Bank and Issuing Bank
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
Title: Managing Director
THE BANK OF NOVA SCOTIA
ATLANTA AGENCY
By: ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇
Title: Relationship Manager
THE FIRST NATIONAL BANK
OF CHICAGO
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
▇▇▇▇▇ FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By: ▇▇▇▇▇ Fruenat
Title: Vice President
COMERICA BANK
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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CREDIT LYONNAIS - NEW YORK BRANCH
By: ▇▇▇▇-▇▇▇▇▇▇▇ Van Essche
Title: Vice President
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Manager
BANK ONE, TEXAS, N.A.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
BHF (USA) CAPITAL CORPORATION
By: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
By: ▇▇▇▇▇ ▇▇
Title: Associate
FIRST UNION NATIONAL BANK
By: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By: ▇▇▇ ▇▇▇▇▇
Title: Senior Credit Officer
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
CREDIT INDUSTRIEL ET COMMERCIAL
By: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Associate
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Associate
THE FUJI BANK, LTD.
By: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President & Manager
NATIONAL BANK OF CANADA
By: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By: (signature illegible)
Title: Vice President & Manager
NATIONAL CITY BANK OF KENTUCKY
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: B. ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
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BANK POLSKA KASA OPIEKI, S.A.,
NEW YORK BRANCH
By: Hussein B. El-▇▇▇▇▇
Title: Vice President
GUARANTY FEDERAL BANK, F.S.B.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
GENERAL ELECTRIC
CAPITAL CORPORATION
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
SOCIETE GENERALE, SOUTHWEST
AGENCY
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
CONSENTED TO BY:
KZH WATERSIDE LLC
By: ▇▇▇▇▇ ▇▇▇
Title: Authorized Agent
SENIOR DEBT PORTFOLIO
By: Boston Management and Research
as Investment Advisor
By: ▇▇▇▇▇ ▇. Page
Title: Vice President
AERIES FINANCE-II LTD.
By: INVESCO Senior Secured Management, Inc.
as Sub-Managing Agent
-9-
By: (signature illegible)
Title: Vice President
CYPRESSTREE INVESTMENT PARTNERS I, LTD.,
By: CypressTree Investment Management
Company, Inc., as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
NORTH AMERICAN SENIOR FLOATING RATE FUND
By: Cypress Tree Investment Management Company,
Inc., as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Principal
CYPRESSTREE INVESTMENT MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of First Allmerica
Financial Life Insurance Company as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
▇▇▇ ▇▇▇▇▇▇ CLO I, LIMITED
By: ▇▇▇ ▇▇▇▇▇▇ MANAGEMENT, INC.,
as Collateral Manager
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
INDOSUEZ CAPITAL FUNDING IIA, LIMITED
By: INDOSUEZ CAPITAL as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
▇▇▇ ▇▇▇▇▇▇ SENIOR INCOME TRUST
By: ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp.
-10-
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
INDOSUEZ CAPITAL FUNDING IV, L.P.
By: Indosuez Capital as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
CYPRESSTREE INSTITUTIONAL FUND, LLC
By: CypressTree Investment Management
Company, Inc., its Managing Member
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
CYPRESSTREE INVESTMENT FUND, LLC
By: CypressTree Investment Management
Company, Inc., its Managing Member
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
KZH-CYPRESSTREE-1 LLC
By: ▇▇▇▇▇ ▇▇▇
Title: Authorized Agent
OXFORD STRATEGIC INCOME FUND
By: ▇▇▇▇▇ ▇▇▇▇▇ Management, as
Investment Advisor
By: ▇▇▇▇▇ ▇. Page
Title: Vice President
▇▇▇▇▇ ▇▇▇▇▇ INSTITUTIONAL SENIOR LOAN FUND
By: ▇▇▇▇▇ ▇▇▇▇▇ Management, as
Investment Advisor
By: ▇▇▇▇▇ ▇. Page
Title: Vice President
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▇▇▇ ▇▇▇▇▇▇ CLO II, LIMITED
By: ▇▇▇ ▇▇▇▇▇▇ Management, Inc.,
as Collateral Manager
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
FINOVA CAPITAL CORPORATION
By: (signature illegible)
Title: Authorized Signer
THE DAI-ICHI KANGYO BANK
LIMITED, NEW YORK BRANCH
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President & Group Leader
MOUNTAIN CAPITAL CLO I LTD.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
MARINER LDC
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇
Title: Director
▇▇▇▇▇▇ COMMERCIAL PAPER, INC.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
ACKNOWLEDGED AND AGREED:
PILLOWTEX, INC.
PTEX HOLDING COMPANY
PILLOWTEX MANAGEMENT SERVICES COMPANY
BEACON MANUFACTURING COMPANY
▇▇▇▇▇▇▇ HOME FASHIONS, INC.
TENNESSEE WOOLEN ▇▇▇▇▇
FIELDCREST ▇▇▇▇▇▇, INC.
-▇▇-
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 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 COMPANY
AMOSKEAG MANAGEMENT CORPORATION
DOWNEAST SECURITIES CORPORATION
BANGOR INVESTMENT COMPANY
▇▇▇▇▇'▇ FALLS CORPORATION
THE ▇▇▇▇▇▇▇ CORPORATION
▇▇▇▇▇▇▇ OF CALIFORNIA, INC.
OPELIKA INDUSTRIES, INC.
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
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SIXTH AMENDMENT AND WAIVER TO
TERM CREDIT AGREEMENT
THIS SIXTH AMENDMENT AND WAIVER TO TERM CREDIT AGREEMENT (this "Waiver"),
dated as of February 15, 2000, is entered into among PILLOWTEX CORPORATION, a
Texas corporation (the "Borrower"), the institutions listed on the signature
pages hereof that are parties to the Credit Agreement defined below
(collectively, the "Lenders"), and BANK OF AMERICA, N.A. (formerly known as
NationsBank, N.A., successor by merger to NationsBank of Texas, N.A.), as
Administrative Agent for itself and the Lenders (in said capacity, the
"Administrative Agent").
BACKGROUND
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A. The Borrower, the Lenders and the Administrative Agent are parties to
that certain Term Credit Agreement, dated as of December 19, 1997 (as amended
through the date hereof, the "Credit Agreement"). Terms defined in the Credit
Agreement and not otherwise defined herein shall be used herein as defined in
the Credit Agreement.
B. The Borrower has requested a waiver of certain Events of Default under
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 Borrower, the
Lenders and the Administrative Agent covenant and agree as follows:
1. WAIVER. Subject to the satisfaction of the conditions of effectiveness
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set forth in Section 10 of this Waiver and the other conditions contained
----------
herein, the Lenders hereby waive (a) the Event of Default with respect to
Section 7.11 of the Credit Agreement which occurred as a result of the failure
------------
of the Borrower to comply with the required Leverage Ratio at the end of the
Fiscal Quarter ended October 2, 1999, (b) the Event of Default which occurred as
a result of the failure of the Borrower to cause a lien to be granted to the
Administrative Agent, for the benefit of the Lenders, on certain leasehold
property in Phenix City, Alabama, on or before January 15, 2000, and (c) any
Events of Default with respect to Sections 7.11, 7.12, and 7.13 of the Credit
------------- ---- ----
Agreement which may occur as a result of the failure of the Borrower to comply
with the required Leverage Ratio, Fixed Charge Coverage Ratio, and Net Worth at
the end of the Fiscal Quarter ended January 1, 2000 (the "Existing Events of
------------------
Default"). The waiver provided in this Section 1 shall not be and shall not be
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deemed to be a waiver of any Events of Default under the Credit Agreement other
than the Existing Events of Default.
2. TERMINATION. The Waiver described in Section 1 above shall terminate
----------- ---------
automatically without any action by the Administrative Agent, the Lenders or any
other Person and be of no further force or effect upon termination of the Waiver
Period. For purposes hereof, the
"Waiver Period" shall mean the period commencing on the effective date of this
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Waiver and terminating upon the earliest to occur of (a) ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) the
declaration or payment by the Borrower of any cash dividends in respect of any
Capital Stock of the Borrower, or (c) the occurrence of any Event of Default
other than the Existing Events of Default.
3. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is hereby amended
------------------------------
as follows:
(a) Section 1.1 is amended by entirely amending the following
-----------
definition:
"Fieldcrest ▇▇▇▇▇▇ Subordinated Debenture Reserve" means (a) for the
------------------------------------------------
period from and including October 8, 1999 through and including ▇▇▇▇▇ ▇▇,
▇▇▇▇, ▇▇▇▇, ▇▇▇ (▇) for the period from and including April 1, 2000 and
thereafter, an amount equal to 50% of the aggregate amount of cash
consideration that may be requested, at any time of determination, by the
holders of Fieldcrest ▇▇▇▇▇▇ Subordinated Debentures in respect of a
conversion thereof.
(b) Section 10.1(f) is hereby amended by inserting the text, ",
---------------
financial advisors," immediately following the word, "attorneys" in the
first sentence thereof.
4. BORROWING BASE. Notwithstanding anything in the Credit Agreement or
--------------
any other Loan Document, commencing on the date of this Waiver and continuing at
all times thereafter the Borrower shall not permit the sum of (a) the
outstanding principal amount of all Revolving Credit Advances, Facility A Term
Loan Advances and Facility B Term Loan Advances and (b) without duplication, the
Reimbursement Obligations, to exceed (i) the book value of the Liquid Assets of
the Borrower and each other Obligor, provided that an Event of Default shall
-------- ----
arise from Borrower's failure to comply with this clause (i) only if such
----------
failure continues for seven days after a Responsible Officer of Borrower knows
or reasonably should know of such failure, or (ii) 102.50% of the book value of
the Liquid Assets of the Borrower and each other Obligor. For purposes hereof,
"Liquid Assets" shall mean net accounts receivable, net inventory and cash
balances.
5. CAPITAL EXPENDITURES. Notwithstanding anything in the Credit Agreement
--------------------
or any other Loan Document, during the Waiver Period the Borrower shall not, and
shall not permit any of its Subsidiaries to, make any Capital Expenditures in an
aggregate amount that exceeds $8,000,000.
6. WAIVER FEE. Borrower shall pay to the Administrative Agent, for the
----------
pro rata benefit of the Lenders that execute and deliver this Waiver to the
Administrative Agent (or its counsel) not later than 5:00 p.m., Dallas time,
February 15, 2000, a waiver fee in an amount equal to the product of (a) 0.15%
multiplied by (b) an amount equal to such Lender's portion of the Commitment.
Such waiver fee shall be paid in immediately available funds and shall be
payable only if the conditions set forth in Section 10 of this Waiver have been
----------
satisfied and shall be due and payable to each Lender eligible for payment
pursuant to the preceding sentence no later than two
-2-
Business Days after the conditions set forth in Section 10 of this Waiver have
----------
been satisfied. The Borrower agrees that the failure to pay the waiver fee
provided in this Section 6 shall, after the expiration of any applicable grace
---------
period, be an Event of Default under Section 8.1(b)(ii) of the Credit Agreement.
------------------
7. OVERLINE FACILITY. During the Waiver Period, the Borrower shall not
-----------------
make any payments or prepayments of principal owing under the Overline Facility.
8. RELEASE.
-------
(a) The Borrower and each Guarantor hereby unconditionally and
irrevocably remises, acquits, and fully and forever releases and discharges
the Administrative Agent and the Lenders and all respective affiliates and
subsidiaries of the Administrative Agent and the Lenders, their respective
officers, servants, employees, agents, attorneys, principals, directors and
shareholders, and their respective heirs, legal representatives, successors
and assigns (collectively, the "Released Lender Parties") from any and all
-----------------------
claims, demands, causes of action, obligations, remedies, suits, damages
and liabilities (collectively, the "Borrower Claims") of any nature
---------------
whatsoever, whether now known, suspected or claimed, whether arising under
common law, in equity or under statute, which the Borrower or any Guarantor
ever had or now has against the Released Lender Parties which may have
arisen at any time on or prior to the date of this Waiver and which were in
any manner related to any of the Loan Documents or the enforcement or
attempted enforcement by the Administrative Agent or the Lenders of rights,
remedies or recourses related thereto.
(b) The Borrower and each Guarantor covenants and agrees never to
commence, voluntarily aid in any way, prosecute or cause to be commenced or
prosecuted against any of the Released Lender Parties any action or other
proceeding based upon any of the Borrower Claims which may have arisen at
any time on or prior to the date of this Waiver and were in any manner
related to any of the Loan Documents.
(c) The agreements of the Borrower and each Guarantor set forth in
this Section 8 shall survive termination of this Waiver and the other Loan
---------
Documents.
9. REPRESENTATIONS AND WARRANTIES. By its execution and delivery hereof,
------------------------------
the Borrower represents and warrants to the Lenders that, as of the date hereof:
(a) after giving effect to the waiver set forth in Section 1 of this
---------
Waiver, the representations and warranties contained in the Credit
Agreement and the other Loan Documents are true and correct on and as of
the date hereof as if made on and as of such date;
(b) after giving effect to the waiver set forth in Section 1 of this
---------
Waiver, no event has occurred and is continuing which constitutes an Event
of Default;
-3-
(c) the Borrower has full power and authority to execute and deliver
this Waiver, and this Waiver constitutes the legal, valid and binding
obligation of the Borrower, enforceable in accordance with its terms,
except as enforceability may be limited by applicable 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 Waiver
nor the consummation of any transactions contemplated herein will conflict
with any Law, the articles of incorporation, bylaws or other governance
document of the Borrower or any of its Subsidiaries, or any indenture,
agreement or other instrument to which the Borrower or any of its
Subsidiaries or any of their respective property is subject; 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 the Borrower or any Guarantor), is required for
the execution, delivery or performance by the Borrower of this Waiver or
the acknowledgment of this Waiver by any Guarantor.
10. CONDITIONS OF EFFECTIVENESS. This Waiver shall be effective as of
---------------------------
February 15, 2000, so long as each of the following conditions precedent shall
have been satisfied:
(a) the Administrative Agent shall receive counterparts of (i) this Waiver
and (ii) the Sixth Amendment and Waiver to Amended and Restated Credit
Agreement, each executed by the Required Lenders (as defined in the
Intercreditor Agreement) and the Borrower and acknowledged by each Guarantor;
(b) the Administrative Agent shall receive counterparts of the Fourth
Amendment to Promissory Note, executed by the Borrower and Bank of America,
N.A., extending the maturity of the Overline Facility to the end of the Waiver
Period;
(c) the representations and warranties set forth in Section 9 of this
---------
Waiver shall be true and correct;
(d) all reasonable out-of-pocket fees and expenses in connection with the
Loan Documents, including this Waiver, including legal and other professional
fees and expenses incurred on or prior to the date of this Waiver by
Administrative Agent or any Lender, including, without limitation, the
reasonable fees and expenses of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C. and
PricewaterhouseCoopers, shall have been paid; and
(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.
-4-
11. GUARANTOR ACKNOWLEDGMENT. By signing below, each of the Guarantors
------------------------
(i) acknowledges, consents and agrees to the execution and delivery of this
Waiver, (ii) acknowledges and agrees that its obligations in respect of its
Subsidiary Guaranty are not released, diminished, waived, modified, impaired or
affected in any manner by this Waiver or any of the provisions contemplated
herein, (iii) ratifies and confirms its obligations under its Subsidiary
Guaranty, and (iv) acknowledges and agrees that it has no claims or offsets
against, or defenses or counterclaims to, its Subsidiary Guaranty as a result of
this Waiver.
12. BANK OF AMERICA CONSENT. Bank of America, N.A., in its capacity as
-----------------------
provider of the Overline Facility, hereby (i) agrees to this Waiver and
acknowledges that the waivers provided herein shall also be effective with
respect to the Overline Facility, (ii) agrees that it will not accept any
payment of principal under the Overline Facility during the Waiver Period, and
(iii) acknowledges that the maturity date of the Overline Facility has been
extended to the termination of the Waiver Period.
13. REFERENCE TO CREDIT AGREEMENT. Upon the effectiveness of this Waiver,
-----------------------------
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 Waiver.
14. COUNTERPARTS; EXECUTION VIA FACSIMILE. This Waiver may be 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 Waiver may be
validly executed and delivered by facsimile or other electronic transmission.
15. GOVERNING LAW: BINDING EFFECT. This Waiver shall be governed by and
-----------------------------
construed in accordance with the laws of the State of Texas and shall be binding
upon the Borrower, the Administrative Agent, each Lender and their respective
successors and assigns.
16. HEADINGS. Section headings in this Waiver are included herein for
--------
convenience of reference only and shall not constitute a part of this Waiver for
any other purpose.
17. LOAN DOCUMENT. This Waiver is a Loan Document and is subject to all
-------------
provisions of the Credit Agreement applicable to Loan Documents, all of which
are incorporated in this Waiver by reference the same as if set forth in this
Waiver verbatim.
18. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE OTHER LOAN
------------------
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.
================================================================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
================================================================================
-5-
PILLOWTEX CORPORATION
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President/Treasurer
BANK OF AMERICA, N.A. (formerly
known as NationsBank, N.A., successor by
merger to NationsBank of Texas, N.A.), as
Administrative Agent and as a Lender, Swing
Line Bank and Issuing Bank
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, ▇▇
Title: Managing Director
THE BANK OF NOVA SCOTIA
ATLANTA AGENCY
By: ▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇
Title: Relationship Manager
THE FIRST NATIONAL BANK
OF CHICAGO
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
▇▇▇▇▇ FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By: ▇▇▇▇▇ Fruenat
Title: Vice President
COMERICA BANK
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CREDIT LYONNAIS - NEW YORK BRANCH
By: ▇▇▇▇-▇▇▇▇▇▇▇ Van Essche
Title: Vice President
-6-
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President & Manager
BANK ONE, TEXAS, N.A.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: First Vice President
BHF (USA) CAPITAL CORPORATION
By: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
By: ▇▇▇▇▇ ▇▇
Title: Associate
FIRST UNION NATIONAL BANK
By: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND", NEW YORK BRANCH
By: ▇▇▇ ▇▇▇▇▇
Title: Senior Credit Officer
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
THE BANK OF NEW YORK
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CREDIT INDUSTRIEL ET COMMERCIAL
By: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
-7-
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Associate
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Associate
THE FUJI BANK, LTD.
By: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President & Manager
NATIONAL BANK OF CANADA
By: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
By: (signature illegible)
Title: Vice President & Manager
NATIONAL CITY BANK OF KENTUCKY
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: B. ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
BANK POLSKA KASA OPIEKI, S.A.,
NEW YORK BRANCH
By: Hussein B. El-▇▇▇▇▇
Title: Vice President
-8-
GUARANTY FEDERAL BANK, F.S.B.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Vice President
GENERAL ELECTRIC
CAPITAL CORPORATION
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
SOCIETE GENERALE, SOUTHWEST
AGENCY
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Director
CONSENTED TO BY:
KZH WATERSIDE LLC
By: ▇▇▇▇▇ ▇▇▇
Title: Authorized Agent
SENIOR DEBT PORTFOLIO
By: Boston Management and Research
as Investment Advisor
By: ▇▇▇▇▇ ▇. Page
Title: Vice President
AERIES FINANCE-II LTD.
By: INVESCO Senior Secured Management, Inc.
as Sub-Managing Agent
By: (signature illegible)
Title: Vice President
CYPRESSTREE INVESTMENT PARTNERS I, LTD.,
By: CypressTree Investment Management
-9-
Company, Inc., as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
NORTH AMERICAN SENIOR FLOATING RATE FUND
By: Cypress Tree Investment Management Company,
Inc., as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Principal
CYPRESSTREE INVESTMENT MANAGEMENT COMPANY, INC.
As: Attorney-in-Fact and on behalf of First Allmerica
Financial Life Insurance Company as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
▇▇▇ ▇▇▇▇▇▇ CLO I, LIMITED
By: ▇▇▇ ▇▇▇▇▇▇ MANAGEMENT, INC.,
as Collateral Manager
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BALANCED HIGH-YIELD FUND I LTD.
By: BHF (USA) CAPITAL CORPORATION, acting as
attorney-in-fact
By: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
By: ▇▇▇▇▇ ▇▇
Title: Associate
INDOSUEZ CAPITAL FUNDING IIA, LIMITED
By: INDOSUEZ CAPITAL as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
-10-
▇▇▇ ▇▇▇▇▇▇ SENIOR INCOME TRUST
By: ▇▇▇ ▇▇▇▇▇▇ Investment Advisory Corp.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
INDOSUEZ CAPITAL FUNDING IV, L.P.
By: Indosuez Capital as Portfolio Manager
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
CYPRESSTREE INSTITUTIONAL FUND, LLC
By: CypressTree Investment Management
Company, Inc., its Managing Member
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
CYPRESSTREE INVESTMENT FUND, LLC
By: CypressTree Investment Management
Company, Inc., its Managing Member
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Principal
KZH-CYPRESSTREE-1 LLC
By: ▇▇▇▇▇ ▇▇▇
Title: Authorized Agent
OXFORD STRATEGIC INCOME FUND
By: ▇▇▇▇▇ ▇▇▇▇▇ Management, as
Investment Advisor
By: ▇▇▇▇▇ ▇. Page
Title: Vice President
▇▇▇▇▇ ▇▇▇▇▇ INSTITUTIONAL SENIOR LOAN FUND
By: ▇▇▇▇▇ ▇▇▇▇▇ Management, as
Investment Advisor
By: ▇▇▇▇▇ ▇. Page
-11-
Title: Vice President
▇▇▇ ▇▇▇▇▇▇ CLO II, LIMITED
By: ▇▇▇ ▇▇▇▇▇▇ Management, Inc.,
as Collateral Manager
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
CAPTIVA FINANCE, LTD.
By: ▇▇▇▇▇ ▇▇▇▇
Title: Director
BALANCED HIGH-YIELD FUND II LTD.
By: BHF (USA) CAPITAL CORPORATION
acting as attorney-in-fact
By: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
By: ▇▇▇▇▇ ▇▇
Title: Associate
FINOVA CAPITAL CORPORATION
By: (signature illegible)
Title: Authorized Signer
THE DAI-ICHI KANGYO BANK
LIMITED, NEW YORK BRANCH
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President & Group Leader
MOUNTAIN CAPITAL CLO I LTD.
By: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Director
MARINER LDC
By: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇
-12-
Title: Director
▇▇▇▇▇▇ COMMERCIAL PAPER, INC.
By: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
PRESIDENT & FELLOWS OF HARVARD
COLLEGE
By: Regiment Capital Management, LLC
as its Investment Advisor
By: Regiment Capital Advisors, LLC
its Manager and pursuant to delegated
authority
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
ACKNOWLEDGED AND AGREED:
PILLOWTEX, INC.
PTEX HOLDING COMPANY
PILLOWTEX MANAGEMENT SERVICES COMPANY
BEACON MANUFACTURING COMPANY
▇▇▇▇▇▇▇ HOME FASHIONS, INC.
TENNESSEE WOOLEN ▇▇▇▇▇
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 COMPANY
AMOSKEAG MANAGEMENT CORPORATION
DOWNEAST SECURITIES CORPORATION
BANGOR INVESTMENT COMPANY
▇▇▇▇▇'▇ FALLS CORPORATION
-13-
THE ▇▇▇▇▇▇▇ CORPORATION
▇▇▇▇▇▇▇ OF CALIFORNIA, INC.
OPELIKA INDUSTRIES, INC.
By: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
-14-