SECOND AMENDMENT TO CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"),
dated as of July 29, 1998, is entered into by and among Delta
▇▇▇▇▇, Inc. (the "Borrower"), the guarantors identified as such
on the signature pages attached hereto (the "Guarantors;"
collectively, the Borrower and the Guarantors are referred to as
the "Credit Parties"), the lenders identified as such on the
signature pages hereto (the "Lenders"), NationsBank, N.A., as
Administrative agent (the "Administrative Agent") for the
Lenders, and BNY Financial Corporation, as Collateral agent (the
"Collateral agent") for the Lenders.
RECITALS
A. The Borrower, the Guarantors, the Lenders, the
Administrative Agent and the Collateral Agent entered into that
certain Credit agreement dated as of August 25, 1997, as amended
by that first Amendment and Waiver to Credit Agreement dated as
of May 11, 1998 (as so amended, the "Existing Credit Agreement").
B. The Lenders have agreed to execute and deliver this
Amendment on the terms and conditions set forth herein.
NOW, THEREFORE, IN CONSIDERATION of the premises and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as
follows:
PART I
DEFINITIONS
Subpart 1.1 General Definitions. Unless otherwise defined
herein or the context otherwise
requires, terms used in this Amendment, including the preamble
and recitals, have the meanings provided in the Existing Credit
Agreement.
SUBPART 1.2 Certain Definitions. Unless the context
otherwise required, the following
terms used in this Amendment shall have the indicated
definitions:
"Amended Credit Agreement' means the Existing Credit
Agreement as amended hereby.
"Amendment No. 2 Effective Date" has the meaning ascribed to such
term in Part 4.1 of this Amendment.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
SUBPART 2.1 Amendment to Section 7.11. Sections 7.11(a),
(c) and (d) of the Existing Credit Agreement are hereby amended
and restated to read as follows:
7.11 Financial Covenants.
(a) Interest Coverage Ratio. The Interest Coverage Ratio,
as of the last day of each fiscal quarter of the Consolidated
Parties, shall be greater than or equal to:
Fiscal Year ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ Quarter
1998 2.5 2.5 1.1 1.1
1998 1.1 1.1 3.0 3.0
2000 3.0 3.0 3.0 3.2
2001 3.2 3.2 3.2 3.4
thereafter 3.4
(c) Leverage Ration. The Leverage Ratio, as of the last
day of each fiscal quarter of the Consolidated Parties, shall be
less than or equal to:
Fiscal Year ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ Quarter
1998 4.5 4.5 9.0 9.0
1999 9.0 8.5 3.8 3.4
2000 3.4 3.4 3.4 3.0
thereafter 3.4
(d) Consolidated Tangible Net Worth. At all times the
Consolidated Tangible Net Worth shall be greater than or equal
to:
(i) for the period from the Closing Date to and
including the next to last day of the third fiscal
quarter of fiscal year 1998 of the consolidated
Parties, $50,000,000;
(ii) for the period from the last day of the third
fiscal quarter of fiscal year 1998 to and including the
next to last day of the second fiscal quarter of fiscal
year 1998 of the Consolidated Parties, $30,000,000;
(iii) for the period from the last day of the second fiscal
quarter of fiscal year 1999 to and including the next
to last day of the fourth fiscal quarter of fiscal year
1999 of the Consolidated Parties, $35,000,000;
(iv) for the period from the last day of the
fourth fiscal quarter of fiscal year 1999 to and
including the next to last day of fiscal year 2000 of
the Consolidated Parties, $45,000,000;
(v) for the period from the last day of fiscal
year 2000 to and including the next to last day of
fiscal year 2001 of the Consolidated Parties,
$65,000,000; and
(vi) for the period from the last day of fiscal
year 2001 and thereafter, $80,000,000.
SUBPART 2.2 Amendment to section 8.5. Clause (d) of
Section 8.5 of the Existing Credit Agreement is amended to read
as follows:
8.5 Asset Dispositions.
(d) The aggregate net book value of all of the assets
sold or otherwise disposed of by the Consolidated
Parties in all such transactions after the Closing Date
(excluding dispositions of the assets of the Stevcoknit
division of the Borrower) shall not exceed $7,500,000,
PART III
REPRESENTATIONS AND WARRANTIES OF CREDIT PARTIES
Each Credit Party hereby represents and warrants to the
Administrative Agent and to each Lender that:
(i) each of the representations and warranties of the
Borrower contained in the Amended Credit Agreement or in any
other Credit Document is true as of the date hereof (after
giving effect to this Amendment);
(ii) after giving effect to this Amendment, no Default
of Event of the Default exists and is continuing under the
Amended Credit Agreement;
(iii)since the date of the last financial statements of the
Borrower delivered to Lenders, no material adverse
change has occurred in the business, financial
condition, operations or prospects of the Consolidated
Parties other than as previously disclosed to the
Lenders; and
(iv) no consent, approval, authorization or order of, or
filing, registration or qualification with, any court or
governmental authority or third party is required in connection
with the execution, delivery or performance by such Person of
this Amendment.
PART IV
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1. Effective Time of Amendment. This Amendment shall be
and become effective as of the first Business Day upon which each of
the conditions set forth in this Subpart 4.1 shall have been completed
to the satisfaction of the Administrative Agent and the Required
Lenders (the " Amendment No. 2 Effective Date").
SUBPART 4.1. Execution of Amendment. The Administrative Agent shall
have received counterparts (or other evidence of execution, including
telephonic message, satisfactory to the Administrative Agent) of the
due execution of this Amendment on behalf of the Credit Parties and
the Required Lenders.
SUBPART 4.2. Amendment Fees. The Administrative Agent shall have
received from the Borrower, on the Amendment No.2 Effective Date, for
the account of each Lender, in immediately available funds, an
amendment fee of 0.05% of each Lender's Commitment.
SUBPART 4.3. Other Documents. The Administrative Agent shall have
received such other documents relating to the transactions
contemplated hereby as the Administrative Agent or counsel to the
Administrative Agent may reasonably request of the Borrower in writing
on or before the amendment No. 2 Effective Date.
SUBPART 4.4 Expenses of Administrative Agent. The Borrower shall
have reimbursed the Administrative Agent for all reasonable out-of-
pocket expenses of the Administrative Agent, including without
limitation, all reasonable fees and expenses of its attorneys,
incurred in connection with the negotiation, preparation or execution
of this Amendment.
PART V
MISCELLANEOUS
SUBPART 5.1 Further Assurances. As soon as practicable after receipt
of a written request from the Administrative Agent, and in any event
not later than 30 days from the date such request is received by the
Borrower, The Credit Parties shall cause to be delivered to the
Administrative Agent, in form and content reasonably satisfactory to
the Administrative Agent, all documents or other instruments incident
to the transactions contemplated by this Agreement in the reasonable
judgment of the Administrative Agent.
SUBPART 5.2. References. References in this Amendment to any Part or
Subpart are unless otherwise specified, to such Part or Subpart of
this Amendment. As of the Amendment
No. 2 Effective Date, all references in the Credit Documents to
the "Credit Agreement" shall be deemed to refer to such document
as amended by this Amendment.
SUBPART 5.3. Counterparts. This Agreement may be
executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which
constitute together one and the same agreement.
SUBPART 5.4. Governing Law. This Amendment shall be deemed
to be a contract made under and governed by the internal laws and
judicial decisions of the State of North Carolina without giving
effect to the conflict of law principles thereof.
SUBPART 5.5 Successors and Assigns. This Amendment shall
be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.
SUBPART 5.6 Entire Agreement. The Amended Credit
Agreement, this Amendment, and the other Credit Documents, as
amended hereby, constitute the entire contract among the parties
relative to the subject matter hereof.
SUBPART 5.7 No Other Changes. Except as expressly modified
and amended in this Agreement, all of the terms, provisions and
conditions of the Credit Documents shall remain unchanged.
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first above written.
BORROWER: DELTA ▇▇▇▇▇, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: EVP, Treasurer, CFO
GUARANTOR: DELTA ▇▇▇▇▇ MARKETING, INC.
a Delaware corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: EVP, Treasurer, CFO
LENDERS: NATIONSBANK, N.A., individually as a
Lender and in its capacity as
Administrative Agent
By: /s/ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
BNY FINANCIAL CORPORATION, individually
as a Lender and in its capacity as
Collateral Agent
By: /s/ ▇.▇. Frangos_________
Name: ▇.▇. ▇▇▇▇▇▇▇
Title: Senior Vice President
GENERAL ELECTRIC
CAPITAL CORPORATION
By: /s/ / ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President & Manager
Consumer Finance
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND",
NEW YORK BRANCH
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
By: /s/ W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: W. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Credit Office & Senior Vice President
