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EXHIBIT 10.1
FIRST AMENDMENT TO
CREDIT AND SECURITY AGREEMENT
Preamble. THIS FIRST AMENDMENT TO CREDIT AND SECURITY AGREEMENT (hereinafter,
together with all schedules and exhibits hereto, and any supplements, additions,
modifications or amendments thereto made from time to time called the "First
Amendment"), dated as of January 19, 1999 (the "First Amendment Date"), is made
by and among THOMASTON ▇▇▇▇▇, INC., a Georgia corporation (hereinafter, together
with its successors and permitted assigns called the "Borrower"); THOMASTON
▇▇▇▇▇ FSC, INC., a U.S. Virgin islands corporation (hereafter, together with its
successors and permitted assigns, called "FSC"); NATIONSBANK, N.A., a national
banking association (hereinafter, together with its successors and permitted
assigns, called "NationsBank"; NationsBank, together with SunTrust and Wachovia,
each as hereinafter defined, called collectively, the "Lenders" and,
individually, a "Lender"); SUNTRUST BANK, ATLANTA, a Georgia banking corporation
(hereinafter, together with its successors and permitted assigns, called
"SunTrust"), individually and as "Administrative Agent" and "Syndication Agent"
(as those terms are defined in the Credit Agreement defined below), on behalf of
the Lenders; WACHOVIA BANK, N.A., a national banking association (hereinafter,
together with its successors and permitted assigns, called "Wachovia"), as
"Special Issuer," "Documentation Agent" and "Collateral Agent" (as those terms
are defined in the Credit Agreement defined below), on behalf of the Lenders;
and SUNTRUST EQUITABLE SECURITIES CORPORATION, a Tennessee corporation
(hereinafter, together with its successors and permitted assigns called
"SunTrust Equitable Securities"), as "Arranger" and "Lead Manager" (as those
terms are defined in the Credit Agreement defined below), on behalf of the
Lenders.
The Borrower, FSC, SunTrust (in its respective capacities
described above), Wachovia (in its respective capacities described above),
NationsBank as a Lender and SunTrust Equitable Securities (in its respective
capacities described above) (the foregoing parties herein sometimes collectively
called the "Parties" and individually called a "Party") are Parties to a certain
Credit and Security Agreement, dated as of August 19, 1998 (which is called
herein the "Credit Agreement"), pursuant to which, among other things, the
Lenders agreed to extend credit and other financial accommodations to the
Borrower. The Parties have agreed to modify and amend the Credit Agreement in
the manner, and subject to the terms and conditions, set forth hereinbelow.
NOW, THEREFORE, in consideration of the foregoing premises,
the mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, the Parties, each intending to be legally bound, hereby agree as
follows:
SECTION 1. Definitions. Capitalized terms used in this First Amendment
and not defined herein are defined in the Credit Agreement.
SECTION 2. Amendments to Credit Agreement. The Parties hereby amend the
Credit Agreement as set forth in SECTIONS 2.1 through 2.10.
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2.1 Incorporated Definitions. The terms "First Amendment" and
"First Amendment Date," defined and described in the Preamble hereinabove, are
incorporated by reference into, and made an integral part of, SECTION 1.1, as
defined terms therein in the appropriate alphabetic order.
2.2 Definition of Borrowing Base. The defined term "Borrowing
Base," set forth in SECTION 1.1 of the Credit Agreement, is amended by deleting
existing clause (x) thereof, in its entirety, therefrom, and substituting in its
place the following revised clause (x):
(x) a fixed and continuing reserve, in the
amount of Ten Million Dollars ($10,000,000), from the Closing
Date through January 18, 1999, reducing to Five Million
Dollars ($5,000,000) on January 19, 1999 and continuing in
such reduced amount until March 1, 1999, on which date such
reserve shall be increased to, and remain thereafter at, Ten
Million Dollars ($10,000,000);
2.3 Definition of Eligible Accounts. The defined term
"Eligible Accounts," set forth in SECTION 1.1 of the Credit Agreement, is
amended by deleting existing clause (v) thereof, in its entirety, therefrom, and
substituting in its place the following revised clause (v):
(v) which is owing by any Account Debtor whose
accounts, in face amount, with the Obligors exceed ten percent
(10%) of such Obligor's Eligible Accounts (except for VF
Corporation, as to which such concentration limit shall be,
instead, twenty-five percent (25%), but only to the extent of
such excess);
2.4 Collateral Reserve Account. Pursuant to clause (ii) of
the fifth sentence of SECTION 3.02 of the Credit Agreement, the Borrower is
hereby advised in writing by the Collateral Agent of a different arrangement
selected by the Collateral Agent (as directed by the Required Lenders) in
respect of the disposition of collected amounts on deposit from time to time in
the Collateral Reserve Account; that is, effective as of the Amendment Date, and
continuing at all times thereafter, the Administrative Agent will apply all
collected amounts in the Collateral Account to Revolving Loans then outstanding
and Letter of Credit Obligations in respect of In-Line Standby Letters of Credit
and Commercial Letters of Credit then due and payable, pro rata among each of
such Obligations based on the proportion which each bears to the total amount of
all such Obligations, all in conformity with the last sentence of SECTION 3.02
and subject to the overriding provisions of SECTION 3.02 in respect of such
dispositions during any time that a Default or Event of Default is in existence.
2.5 Interest Rates. SECTION 2.05 of the Credit Agreement is
amended by adding thereto, at the end thereof, the following:
(f) Notwithstanding any of the foregoing
provisions of this SECTION 2.05, excepting therefrom only
subsections (d) and (e) hereof, effective on and at all times
after the First Amendment Date,
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the following provisions shall govern the interest rate
payable on the Loans:
(i) all Loans made, continued or
converted shall be made, continued as or converted
into Base Rate Loans only;
(ii) all Base Rate Loans existing on the
First Amendment Date, together with any and all Loans
made, continued or converted into Base Rate Loans
after the First Amendment Date, shall bear interest
at the Base Rate plus an Applicable Margin of one
percent (1%) per annum (without any subsequent
performance pricing adjustment);
(iii) the interest rate payable on all
Euro-Dollar Loans outstanding on the First Amendment
Date shall be increased by one percent (1%) per
annum, effective as of the First Amendment Date, and
all such Euro-Dollar Loans shall by converted into
Base Rate Loans effective upon the expiration of the
current Interest Period respective thereto;
2.6 Financial Reporting. SECTION 5.01 of the Credit Agreement
is amended by adding thereto, at the end thereof, the following new subsection
(p):
(p) without limitation of the foregoing clauses
(a) through (n), and in supplementation thereof, effective on
the First Amendment Date, and continuing at all relevant times
thereafter, the following additional reporting covenants shall
apply:
(i) there shall be included with the
monthly financial statements required to be delivered
to the Lenders pursuant to clause (b) of this SECTION
5.01, divisional financial statements for the
relevant fiscal period, in respect of each of the
Borrower's operating divisions, segregated on a
division-by-division basis;
(ii) as soon as available and in any
event on the second Business Day of each calendar
week, the Borrower shall have prepared and delivered
to each of the Lenders (x) a cash forecast and budget
for the coming four (4) calendar weeks (including the
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current week), segregated week-by-week and (y) a
weekly reconciliation of discrepancies among
forecasted, budgeted and actual cash receipts and
disbursements for the prior week, all in form
satisfactory to the Agents; and
(iii) the Borrowing Base Certificate (and
accompanying documentation) described in clause (j)
of this SECTION 5.01, shall be prepared and delivered
weekly by the Borrower, as of the last Business Day
of the preceding calendar week, with the Borrowing
Base Certificate to be delivered on the third
Business Day of each calendar week, and with the
accompanying documentation to be delivered on the
fourth Business Day of each calendar week..
2.7 Reports Respecting Collateral. SECTION 5.32 of the Credit
Agreement is amended by deleting therefrom (i) the words "twenty (20) days after
the end of each Fiscal Month" in the second line thereof and substituting in
their place the words "the first Business Day of each calendar week"; and by
further deleting therefrom the words "preceding Fiscal Month" and substituting
in their place the words "preceding calendar week," wherever they appear in such
SECTION.
2.8 Field Audit. In conformity with SECTION 5.02 of the
Credit Agreement, the Borrower shall fully cooperate with the Collateral Agent
in the conduct of a field audit of the Collateral, commencing on or as soon as
practicable after the Amendment Date.
2.9 Inventory Appraisal. SECTION 5.34 of the Credit Agreement
shall be amended by adding thereto, at the end thereof, the following new
sentence:
In addition to the foregoing, as soon as practicable
after the First Amendment Date, but in any event by February
15, 1999, the Borrower shall obtain, at its expense, and
deliver to the Collateral Agent an appraisal of the Inventory
Collateral from an appraiser, and using an appraisal
methodology, approved by the Agents.
2.10 Mortgages. There shall be added to ARTICLE 5 a new
SECTION 5.42, to read as follows:
SECTION 5.42 Mortgages. As soon as available after
the First Amendment Date, but in any event by not later than
February 10, 1999, the Borrower shall deliver or cause to be
delivered to the Collateral Agent, in respect of that portion
of the Aggregate Real Properties as are owned by the Obligors
on the First
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Amendment Date on which any manufacturing facilities (whether
open or closed) are situated, and all contiguous, adjacent and
related real property, including, in Pike County, Georgia, all
timberland, consisting of 900 acres, more or less (herein, the
"Mortgaged Real Property"), the following:
(i) a mortgage, deed to secure debt,
deed of trust or similar instrument of conveyance
(herein, a "Mortgage"), conveying to the Collateral
Agent for the benefit of all Agents and Lenders a
first priority Lien on the Mortgaged Real Property,
free and clear of all other Liens and encumbrances
excepting only those which are approved in writing by
the Collateral Agent;
(ii) a mortgagee's title insurance
policy (or binder committing to issue same), in
customary ALTA form, from a title insurer selected by
the Borrower, at its expense, but acceptable to the
Collateral Agent, insuring the Collateral Agent's
interest as mortgagee in the Mortgaged Real Property
in an amount of coverage acceptable to the Collateral
Agent and containing only such exceptions and
limitations as shall be acceptable to the Collateral
Agent;
(iii) a current, as-built boundary line
survey of the Mortgaged Real Property from a
registered land surveyor, selected by the Borrower,
at its expense, but acceptable to the Collateral
Agent in customary ALTA form;
(iv) as appropriate, a lessor's
acknowledgment and consent in respect of any
Mortgaged Real Property which is leased; and
(v) such other, similar or related
requirements as the Collateral Agent may require in
connection the foregoing.
Additionally, the Lenders reserve the right to require that Borrower comply with
the foregoing requirements as to any one or more or all other parcels of real
property, whether now owned or hereafter acquired, which Borrower shall do as
soon as possible after, but in any event within thirty (30) days after, receipt
of written request therefor from Agent that it do so.
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SECTION 3. Representations and Warranties of Obligors. The Borrower
and FSC, each severally, represents and warrants to the other Parties that:
(a) It has the power and authority to enter into and to perform
this First Amendment, to execute and deliver all documents
relating to this First Amendment, and or incur the obligations
provided for in this First Amendment, all of which have been
duly authorized and approved in accordance with its corporate
documents;
(b) This First Amendment, together with all documents executed
pursuant hereto, shall constitute when executed its valid and
legally binding obligations in accordance with their
respective terms;
(c) All representations and warranties made by it in the Credit
Agreement are true and correct as of the date hereof, with the
same force and effect as if all representations and warranties
were fully set forth herein;
(d) Its Obligations under the Credit Documents remain valid and
enforceable Obligations, and the execution and delivery of
this First Amendment and the other documents executed in
connection herewith shall not be construed as a novation of
the Credit Agreement or any of the other Credit Documents;
(e) As of the date hereof, it has no offsets, defenses or
counterclaims against the payment of any of the Obligations;
and
(f) As of the date hereof, and after giving effect to the terms
hereof, no Default Condition or Event of Default exists,
except in relation to Borrower's continuing compliance with
Sections 5.21 and 5.24 of the Credit Agreement as they relate
to Borrower's Fiscal Quarter ending closest to December 31,
1998; which Default Conditions and Events of Default have not
been waived by Lenders, and are not being waived hereby by
Lenders, but shall continue, together with Lenders' full
reservation after all rights and remedies deriving therefrom,
notwithstanding this Amendment.
SECTION 4. Waiver of Claims. As a specific inducement to the other
Parties without which the Borrower and FSC acknowledge the other Parties would
not enter into this First Amendment and the other documents executed in
connection herewith, each of the Borrower and FSC hereby waives any and all
claims that it may have against any other Party, as of the date hereof, arising
out of or relating to the Credit Agreement or any other Credit Document whether
sounding in contract, tort, or any other basis.
SECTION 5. Conditions of Effectiveness. This First Amendment shall
become effective when, and only when, the Documentation Agent shall have
received this First Amendment, executed by each Party.
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SECTION 5. Miscellaneous.
5.1 Reference to Credit Agreement. Upon the effectiveness of
this Credit Agreement, each reference in the Credit Agreement to "this Credit
Agreement" and each reference in the other Credit Documents to the Credit
Agreement, shall mean and be a reference to the Credit Agreement as amended
hereby.
5.2 Effect on Credit Documents. Except as specifically
amended above, all terms of the Credit Agreement and all other Credit Documents
shall remain in full force and effect and are hereby ratified and confirmed.
5.3 No Waiver. The execution, delivery and effectiveness of
this First Amendment shall not operate as a waiver of any right, power, or
remedy of Lenders or the Agents under any of the Credit Documents, nor
constitute a waiver of any provision of any of the Credit Documents.
5.4 Costs, Expenses and Taxes. The Borrower agrees to pay on
demand all costs and expenses of the Agents and the Lenders in connection with
the preparation, reproduction, execution, and delivery of this First Amendment
and the other instruments and documents to be delivered hereunder, including the
reasonable fees and out-of-pocket expenses of counsel for the Agent and the
Lenders with respect hereto.
5.5 No Novation. Nothing contained herein intended, or shall
be construed, to constitute a novation to the Credit Agreement or any Credit
Document.
5.6 Governing Law. This First Amendment shall be governed by
and construed in accordance with the laws of the State of Georgia, without
giving affect to conflict of law provisions.
5.7 Counterparts. This First Amendment may be executed in
counterparts. Each counterpart shall bind the Party or Parties executing same.
All counterparts, taken together, shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the Parties have caused this First
Amendment to be duly executed, under seal, by their respective authorized
officers as of the day and year first above written.
"BORROWER"
THOMASTON ▇▇▇▇▇, INC.
By: (SEAL)
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Attest:
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A. ▇▇▇▇▇▇▇ ▇▇▇
Vice President-Finance
(CORPORATE SEAL)
"SUBSIDIARY GUARANTOR"
THOMASTON ▇▇▇▇▇ FSC, INC.
By: (SEAL)
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
Attest:
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A. ▇▇▇▇▇▇▇ ▇▇▇
Vice President-Finance
(CORPORATE SEAL)
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SUNTRUST BANK, ATLANTA,
as Administrative Agent,
Syndication Agent and as a Lender (SEAL)
By:
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Name:
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Title:
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By:
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Name:
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Title:
-----------------------------------
(CORPORATE SEAL)
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WACHOVIA BANK, N.A.,
as Special Issuer, Documentation Agent,
Collateral Agent, and as a Lender (SEAL)
By:
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Name:
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Title:
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NATIONSBANK, N.A.,
as a Lender (SEAL)
By:
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Name:
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Title:
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SUNTRUST EQUITABLE SECURITIES
CORPORATION, as Arranger and Lead
Manager
By:
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Name:
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Title:
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By:
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Name:
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Title:
-----------------------------------
(CORPORATE SEAL)
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