Exhibit 10.8
THIRD AMENDMENT AND WAIVER
TO THE CREDIT AGREEMENT
Dated as of October 30, 1998
THIRD AMENDMENT AND WAIVER TO THE CREDIT AGREEMENT among GLENOIT
CORPORATION, a Delaware corporation (the "Borrower"), the banks, financial
institutions and other institutional lenders parties to the Credit Agreement
referred to below (collectively, the "Lenders") and BANQUE NATIONALE DE PARIS,
as agent (the "Agent") for the Lenders (as amended, supplemented or otherwise
modified from time to time, the "Amendment and Waiver").
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders and the Agent have entered into a Second Amended
and Restated Credit Agreement dated as of April 1, 1997, a First Amendment and
Waiver dated as of July 10, 1997 and a Second Amendment and Waiver dated as of
October 2, 1998 (as amended, supplemented or otherwise modified through the date
hereof, the "Credit Agreement"). Capitalized terms not otherwise defined in this
Amendment and Waiver have the same meanings as specified in the Credit
Agreement.
(2) The Borrower has requested certain amendments and waivers to the Credit
Agreement, including but not limited to (i) an amendment to the definitions of
"EBITA" and "EBITDA" to exclude a certain noncash, nonrecurring item and (ii) a
waiver of noncompliance with Section 5.02(g) resulting from a dividend paid by
the Borrower to Universal, which dividend was used by Universal to satisfy its
obligations under the Settlement Agreement dated as of July 17, 1998 (the
"Settlement Agreement") between Universal and Stirling Investment Holdings, Inc.
(3) The Lenders, on the terms and conditions stated below, are willing to grant
the request of the Borrower and the Borrower and the Lenders have agreed to
further amend the Credit Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Amendment and Waiver, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby agree as follows:
SECTION 1. Amendments to Credit Agreement. The Credit Agreement is
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 3, hereby amended as follows:
(a) (i) The definition of "EBITA" in Section 1.01 is amended by adding a
new clause (b)(v) to read "(v) noncash, nonrecurring charges in the
aggregate amount of approximately $3,000,000 during the Borrower's
fourth quarter 1998 associated with the one time write-up of inventory
pursuant to the Borrower's
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election of Section 338 of the Internal Revenue Code in connection with
the acquisition of American Pacific Enterprises, Inc.".
(b) (ii) The definition of "EBITDA" in Section 1.01 is amended by adding
a new clause (b)(vi) to read "(vi) noncash, nonrecurring charges in the
aggregate amount of approximately $3,000,000 during the Borrower's
fourth quarter 1998 associated with the one time write-up of inventory
pursuant to the Borrower's election of Section 338 of the Internal
Revenue Code in connection with the acquisition of American Pacific
Enterprises, Inc.".
SECTION 2. Waivers to the Credit Agreement. The Lenders and the Agent
hereby waive, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 3, the noncompliance with Section
5.02(g) of the Credit Agreement resulting from a $1,935,871.53 cash dividend
paid by the Borrower to Universal, which dividend was used by Universal to
satisfy its obligations under the Settlement Agreement.
SECTION 3. Conditions of Effectiveness. This Amendment and Waiver shall
become effective as of the date first above written when, and only when the
Agent shall have received all of the following documents, each such document
(unless otherwise specified) dated the date of receipt thereof by the Agent, in
form and substance satisfactory to the Agent and (unless otherwise specified) in
sufficient copies for each Lender:
(i) Counterparts of this Amendment and Waiver executed by the
Borrower, and the Lenders or, as to any of the Lenders, advise
satisfactory to the Agent that such Lender has executed this Amendment
and Waiver.
(ii) Counterparts of the Consent appended hereto, executed by
each of the Loan Parties (other than the Borrower).
(iii) A certificate signed by a duly authorized officer of the
Borrower stating that:
(A) The representations and warranties contained in Section
4 are correct on and as of the date of such certificate as
though made on and as of such date; and
(B) No event has occurred and is continuing that
constitutes a default.
SECTION 4: Representations and Warranties of the Borrower. The Borrower
represents and warrants as follows:
(a) Each Loan Party (i) is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, (ii) is duly
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qualified and in good standing as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct
of its business requires it to so qualify or be licensed except where
the failure to so qualify or be licensed could not have a Material
Adverse Effect and (iii) has all requisite corporate power and authority
(including, without limitation, all governmental licenses, permits and
other approvals) to own or lease and operate its properties and to carry
on its business as now conducted and as proposed to be conducted.
(b) The execution, delivery and performance by each Loan Party of this
Amendment and Waiver and the Loan Documents, as amended hereby, to which
such Loan Party is or is to be a party, and the consummation of the
transactions contemplated hereby or thereby, are within such Loan
Party's corporate powers, have been duly authorized by all necessary
corporate action and do not (i) contravene such Loan Party's charter or
by-laws, (ii) violate any law (including, without limitation, the
Securities Exchange Act of 1934, as amended, and the Racketeer
Influenced and Corrupt Organizations Chapter of the Organized Crime
Control Act of 1970), rule or regulation (including, without limitation,
Regulation X of the Board of Governors of the Federal Reserve System),
or any order, writ, judgment, injunction, decree, determination or
award, binding on or affecting any Loan Party or any of their respective
Subsidiaries or any of their respective properties, (iii) conflict with
or result in the breach of, or constitute a default under, any material
contract, loan agreement, indenture, mortgage, deed of trust, lease or
other instrument binding on or affecting any Loan Party or any of their
respective Subsidiaries or any of their respective properties or (iv)
except for the Liens created under the Loan Documents, as amended
hereby, result in or require the creation or imposition of any Lien upon
or with respect to any of the properties of any Loan Party or any of
their respective Subsidiaries. No Loan Party or any of their respective
Subsidiaries is in violation of any such law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award or in breach
of any such contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument, the violation or breach of which could
have a Material Adverse Effect.
(c) No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other
third party is required for (i) the due execution, delivery,
recordation, filing or performance by any Loan Party of this Amendment
and Waiver, the Notes, any other Loan Document, as amended hereby, or
any Related Document to which it is or is to be a party, or for the
consummation of the transactions contemplated hereby or thereby, (ii)
the grant by any Loan Party of the Liens granted by it pursuant to the
Collateral Documents, (iii) the perfection or maintenance of the Liens
created by the Collateral Documents (including the first priority nature
thereof) or (iv) the exercise by the Agent or any Lender Party of its
rights under the Loan Documents or the remedies in respect of the
Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d) of the Credit Agreement, all of which have been duly
obtained,
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taken, given or made and are in full force and effect (other than
filings with the patent, trademark and copyright offices of the United
States and the relevant foreign countries). All applicable waiting
periods in connection with the transactions contemplated hereby and
thereby have expired without any action having been taken by any
competent authority restraining, preventing or imposing materially
adverse conditions upon the rights of the Loan Parties or their
respective Subsidiaries freely to transfer or otherwise dispose of, or
to create any Lien on, any properties now owned or hereafter acquired by
any of them.
(d) This Amendment and Waiver and each of the Loan Documents and each of the
Related Documents have been duly executed and delivered by each Loan
Party party thereto. This Amendment and Waiver and each of the Loan
Documents, as amended hereby, and Related Documents, as amended hereby,
to which any Loan Party is or is to be a party are legal, valid and
binding obligations of such Loan Party enforceable against such Loan
Party in accordance with the respective terms.
(e) There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of their respective Subsidiaries,
including any Environmental Action, pending or, to the best of such Loan
Parties' knowledge, threatened before any court, governmental agency or
arbitrator that (i) could have a Material Adverse Effect or (ii)
purports to affect the legality, validity or enforceability of this
Amendment and Waiver, any Note, any other Loan Document as amended
hereby or any Related Document or the consummation of the transactions
contemplated hereby or thereby.
SECTION 5. Reference to and Effect on the Credit Agreement and the Loan
Documents.
(a) On and after the effectiveness of this Amendment and Waiver, each
reference in the Credit Agreement to "this Agreement", "hereunder", or
"hereof" or words of like import referring to the Credit Agreement, and
each reference in the Notes and each of the other Loan Documents to "the
Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as amended by this Amendment and Waiver.
(b) The Credit Agreement, the Notes and each of the other Loan Documents, as
specifically amended by this Amendment and Waiver, are and shall
continue to be in full force and effect and are hereby in all respects
ratified and confirmed. Without limiting the generality of the
foregoing, the Collateral Documents and all of the Collateral described
therein do and shall continue to secure the payment of all Obligations
of the Loan Parties under the Loan Documents, in each case as amended by
this Amendment and Waiver.
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(c) The execution, delivery and effectiveness of this Amendment and Waiver
shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Agent under any of the
Loan Documents, nor constitute a waiver of any provision of any of the
Loan Documents.
SECTION 6. Costs and Expenses. The Borrower agrees to pay on demand all
reasonable costs and expenses of the Agent in connection with the preparation,
execution, delivery and administration, modification and amendment of this
Amendment and Waiver and the other instruments and documents to be delivered
hereunder (including, without limitation, the reasonable fees and expenses of
counsel for the Agent) in accordance with the terms of Section 8.04 of the
Credit Agreement.
SECTION 7. Execution in Counterparts. This Amendment and Waiver may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute but one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Amendment and Waiver by telecopier shall be effective as delivery of a manually
executed counterpart of this Amendment and Waiver.
[The remainder of this page has been left blank intentionally.]
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SECTION 8. Governing Law. This Amendment and Waiver shall be governed
by, and construed in accordance with, the laws of the State of New York.
SECTION 9. Successors and Assigns. This Amendment and Waiver shall be
binding upon, and shall inure to the benefit of, the Agent, each of the Lenders,
each of the Loan Parties and, in each case, their respective successors and
permitted assigns under the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Waiver to be executed by their respective officers thereunto duly authorized, as
of the date first above written.
GLENOIT CORPORATION
By_____________________________
Name:
Title:
BANQUE NATIONALE DE PARIS
By______________________________
Name:
Title:
By______________________________
Name:
Title:
SANWA BUSINESS CREDIT CORPORATION
By______________________________
Name:
Title:
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FLEET BANK, N.A.
By_____________________________
Name:
Title:
CIBC INC.
By_____________________________
Name:
Title:
LASALLE NATIONALE BANK
By_____________________________
Name:
Title:
CENTURA BANK
By_____________________________
Name:
Title:
FIRST UNION BANK OF CALIFORNIA, N.A.
By____________________________
Name:
Title:
FIRST SOURCE FINANCIAL, LLP
By FIRST SOURCE FINANCIAL, INC.
(its Agent/Manager
By____________________________
Name:
Title:
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CONSENT
Dated as of October 30, 1998
The undersigned, each a Grantor under the Second Amended and Restated
Security Agreement dated April 1, 1997 and the Amended and Restated Patent and
Trademark Security Agreement dated April 1, 1997, (the "Security Agreements") in
favor of the Agent, for its benefit and the benefit of the Secured Parties (as
defined in the Credit Agreement referred to in the foregoing Second Amendment
and Waiver (the "Credit Agreement")) and a Guarantor under the Second Amended
and Restated Guarantee dated April 1, 1997 (the "Guarantee") in favor of the
Agent and the Secured Parties, hereby consents to such Second Amendment and
Waiver and hereby confirms and agrees that (a) notwithstanding the effectiveness
of such Second Amendment and Waiver, each of (i) the Security Agreements and
(ii) the Guarantee is, and shall continue to be, in full force and effect and is
hereby ratified and confirmed in all respects, except that, on and after the
effectiveness of such Second Amendment and Waiver, each reference in the
Guarantee or the Security Agreements to the "Credit Agreement", "thereunder",
"thereof" or words of like import shall mean and be a reference to the Credit
Agreement, as amended by such Second Amendment and Waiver and (b) the Collateral
Documents to which such Grantor is a party and all of the Collateral described
therein do, and shall continue to, secure the payment of all of the Secured
Obligations (in each case, as defined therein).
GLENOIT UNIVERSAL, LTD.
By_____________________________
Name:
Title:
GLENOIT ASSETS CORP.
By_____________________________
Name:
Title:
AMERICAN PACIFIC ENTERPRISES, INC.
By_____________________________
Name:
Title:
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By____________________________
Name:
Title: