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AMENDMENT NO. 3 TO
CREDIT AGREEMENT AND WAIVER
THIS AMENDMENT NO. 3 TO CREDIT AGREEMENT AND WAIVER (this
"Amendment") dated as of April 19, 1999, by and among DYERSBURG CORPORATION, a
Tennessee corporation ("Parent"), DYERSBURG FABRICS LIMITED PARTNERSHIP, I, a
Tennessee limited partnership ("DFLP"), UNITED KNITTING LIMITED PARTNERSHIP, I,
a Tennessee limited partnership (UKLP"), IQUE LIMITED PARTNERSHIP, I, a
Tennessee limited partnership ("IQLP"), and ALAMAC KNIT FABRICS, INC., a
Delaware corporation ("Alamac"; Parent, DFLP, UKLP, IQLP and Alamac referred to
collectively herein as the "Borrowers"), the banks and other financial
institutions listed on the signature pages hereof (such banks and other
financial institutions referred to collectively herein as the "Lenders"),
SUNTRUST BANK, ATLANTA, in its capacity as agent for the Lenders (the "Agent"),
and SUNTRUST BANK, ATLANTA, in its capacity as collateral agent for the Agent
and the Lenders (the "Collateral Agent").
W I T N E SS E T H:
WHEREAS, the Borrowers, the Lenders, the Agent and the
Collateral Agent are parties to a certain Credit Agreement dated as of August
27, 1997, as amended by Amendment No. 1 to Credit Agreement dated as of
September 26, 1997, and as amended by Amendment No. 2 to Credit Agreement dated
as of July 23, 1998 (as so amended, the "Credit Agreement"; defined terms used
herein without definition shall have the meanings ascribed to such terms in the
Credit Agreement);
WHEREAS, the Borrowers have requested, and Lenders
constituting the "Required Lenders" under the Credit Agreement have agreed, that
compliance with certain financial covenants for the Parent's Fiscal Quarter
ending April 3, 1999 be waived for the period set forth herein, and the parties
have further agreed that the Credit Agreement be amended to make certain
modifications therein, all as more specifically set forth below;
NOW, THEREFORE, for and in consideration of the mutual
covenants contained herein and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
SECTION 1. Amendments to Credit Agreement. Subject to the
satisfaction of the conditions precedent set forth in Section 3 hereof, and
effective as of the Effective Date (as hereinafter defined), the following
amendments to the Credit Agreement shall be made:
1.1 The defined term "Applicable Margin" and accompanying
definition as set forth in Section 1.01 of the Credit Agreement is
hereby amended by deleting such defined
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term and accompanying definition in their entirety, and substituting in
lieu thereof the following defined term and accompanying definition for
all purposes under the Credit Agreement:
"Applicable Margin" shall mean the relevant percentage
indicated below for the Parent's Adjusted Funded Debt Coverage Ratio,
as determined quarterly, based upon the financial statements delivered
to the Lenders pursuant to Section 7.07(a) or Section 7.07(b) hereof,
as the case may be, in accordance with Section 7.09(c), with such
Applicable Margin to be effective on the date such financial statements
are received by the Agent:
Adjusted Funded Debt Applicable Margin Applicable Margin
Coverage Ratio for Eurodollar Advances for Base Rate Advances
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Less than or equal to 2.5:1.0 0.75% 0%
Greater than 2.5:1.0, but less than
or equal to 3.0:1.0 1.00% 0%
Greater than 3.0:1.0, but less than
or equal to 3.5:1.0 1.50% 0%
Greater than 3.5:1.0, but less than
or equal to 4.0:1.0 1.75% 0%
Greater than 4.0:1.0, but less than
or equal to 4.5:1.0 2.25% 0%
Greater than 4.5:1.0, but less than
or equal to 5.0:1.0 2.75% 0.25%
Greater than 5.0:1.0, but less than
or equal to 5.5:1.0 3.25% 0.75%
Greater than 5.5:1.0 3.75% 1.25%
Notwithstanding the foregoing, (i) for the Fiscal Quarter of Parent ending July
3, 1999, effective April 19, 1999 until the earlier of (x) the date Parent is
required to submit to the Agent its financial statements for its Fiscal Quarter
ending April 3, 1999, and (y) the date of actual receipt by the Agent of such
financial statements, the Applicable Margin for Eurodollar Advances shall be
3.25% and the Applicable Margin for Base Rate Advances shall be 0.75%, and on
and after the earlier of the dates referred to in the preceding clauses (x) and
(y) the Applicable Margin shall be as otherwise provided in this definition, and
(ii) at any time during which Parent has failed to deliver the financial
statements and certificates when required by Section 7.07(a), (b), and (c), as
applicable, the
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Applicable Margin with respect to Eurodollar Advances then outstanding shall be
3.75% and the Applicable Margin with respect to Base Rate Advances shall be
1.25%.
1.2 Article 7 of the Credit Agreement is hereby amended by
adding a new Section 7.14 to said Article 7, as follows:
SECTION 7.14 Appraisal of Assets. Not later than May 19, 1999,
the Borrowers shall have engaged an appraisal firm or firms, acceptable
in each case to the Agent, to conduct an appraisal of the inventory and
property, plant and equipment of the Borrowers and their respective
Subsidiaries.
SECTION 2. Waiver. Subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, and effective as of the
Effective Date, the Required Lenders hereby agree to waive, for the period from
April 3, 1999 through July 3, 1999, any Default or Event of Default existing or
occurring under the Credit Agreement by reason of the Consolidated Companies'
failure to maintain, as of the last day of the Fiscal Quarter of Parent ending
April 3, 1999, the minimum Fixed Charge Coverage Ratio as required by Section
7.09(a) of the Credit Agreement, the minimum Interest Coverage Ratio as required
by Section 7.09(b) of the Credit Agreement, and the maximum Adjusted Funded Debt
Coverage Ratio as required by Section 7.09(c) of the Credit Agreement; provided,
however, that the foregoing waiver shall be limited in all respects solely to
such period of time, and the requirements to maintain the minimum Fixed Charge
Coverage Ratio, the minimum Interest Coverage Ratio, and maximum Adjusted Funded
Debt Coverage Ratio as set forth in Section 7.09(a), (b) and (c), shall be and
remain in full force and effect upon the expiration of the foregoing waiver.
SECTION 3. Conditions of Effectiveness. This Amendment shall
become effective as of the date first above written (the "Effective Date") when
(i) this Amendment shall have been executed and delivered by the Borrowers,
Lenders constituting the Required Lenders as provided in the Credit Agreement,
the Agent and the Collateral Agent, and (ii) the Borrowers shall have paid to
each Lender that has submitted its written agreement to this Amendment not later
than 12:00 noon (Eastern Daylight Time) on April 19, 1999, an amendment fee
equal to one-tenth of one percent (0.10%) of such Lender's total Commitments as
now in effect.
SECTION 4. Representations and Warranties of the Borrowers.
Each of the Borrowers, without limiting the representations and warranties
provided in the Credit Agreement, represents and warrants to the Lenders and the
Agents as follows:
4.1 The execution, delivery and performance by the Borrowers
of this Amendment are within the Borrowers' organizational powers, have been
duly authorized by all necessary organizational action (including any necessary
shareholder or partner action) and do not and will not (a) violate any provision
of any law, rule or regulation, any judgment, order or ruling of any court or
governmental agency, the organizational documents of any Borrower or any
indenture, agreement or other instrument to which any Borrower is a party or by
which any Borrower
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or any of its properties is bound or (b) be in conflict with, result in a breach
of, or constitute with notice or lapse of time or both a default under any such
indenture, agreement or other instrument.
4.2 This Amendment constitutes the legal, valid and binding
obligation of the Borrowers, enforceable against the Borrowers in accordance
with its terms.
4.3 No Default or Event of Default has occurred and is
continuing as of the Effective Date.
SECTION 5. Survival. Each of the foregoing representations and
warranties and each of the representations and warranties made in the Credit
Agreement shall be made at and as of the Effective Date. Each of the foregoing
representations and warranties shall constitute a representation and warranty of
the Borrowers under the Credit Agreement, and it shall be an Event of Default if
any such representation and warranty shall prove to have been incorrect or false
in any material respect at the time when made. Each of the representations and
warranties made under the Credit Agreement (including those made herein) shall
survive and not be waived by the execution and delivery of this Amendment or any
investigation by the Lenders or the Agent or the Collateral Agent.
SECTION 6. No Waiver, Etc. The Borrowers hereby agree that,
except as otherwise expressly provided in Section 2 hereof, nothing herein shall
constitute a waiver by the Lenders of any Default or Event of Default, whether
known or unknown, which may exist under the Credit Agreement. The Borrowers
hereby further agree that no action, inaction or agreement by the Lenders,
including without limitation, any indulgence, waiver, consent or agreement
altering the provisions of the Credit Agreement which may have occurred with
respect to the non-payment of any obligation under the terms of the Credit
Agreement or any portion thereof, or any other matter relating to the Credit
Agreement, shall require or imply any future indulgence, waiver, or agreement by
the Lenders. In addition, the Borrowers acknowledge and agree that they have no
knowledge of any defenses, counterclaims, offsets or objections against any
Lender with regard to any of the obligations due under the terms of the Credit
Agreement as of the date of this Amendment.
SECTION 7. Affirmation of Covenants. The Borrowers hereby
affirm and restate as of the date hereof all covenants set forth in the Credit
Agreement, as expressly amended or waived hereby, and such covenants are
incorporated by reference herein as if set forth herein directly.
SECTION 8. Ratification of Credit Agreement. Except as
expressly amended or waived herein, all terms, covenants and conditions of the
Credit Agreement and the other Credit Documents shall remain in full force and
effect, and the parties hereto do expressly ratify and confirm the Credit
Agreement as amended herein. All references to the Credit Agreement contained in
all Credit Documents shall be deemed to refer to the Credit Agreement as amended
hereby.
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SECTION 9. Binding Nature. This Amendment shall be binding
upon and inure to the benefit of the parties hereto, their respective
successors, successors-in-titles, and permitted assigns.
SECTION 10. Costs, Expenses and Taxes. The Borrowers agree to
pay on demand all reasonable costs and expenses of the Agent and the Collateral
Agent in connection with the preparation, execution and delivery of this
Amendment and the other instruments and documents to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Agent and the Collateral Agent with respect thereto and with
respect to advising the Agent and the Collateral Agent as to its rights and
responsibilities hereunder and thereunder. In addition, the Borrowers shall pay
any and all stamp and other taxes payable or determined to be payable in
connection with the execution and delivery of this Amendment and the other
instruments and documents to be delivered hereunder, and agrees to save the
Agent, the Collateral Agent, and each Lender harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes.
SECTION 11. Governing Law. This Amendment shall be governed
by, and construed in accordance with, the laws of the State of Georgia.
SECTION 12. Entire Understanding. This Amendment sets forth
the entire understanding of the parties with respect to the matters set forth
herein, and shall supersede any prior negotiations or agreements, whether
written or oral, with respect thereto.
SECTION 13. Counterparts. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts and may be delivered by telecopier. Each counterpart so executed
and delivered shall be deemed an original and all of which taken together shall
constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment through their authorized officers as of the date first above written.
DYERSBURG CORPORATION
By: /s/ William S. Shropshire, Jr.
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William S. Shropshire, Jr.
Executive Vice President and
Chief Financial Officer
DYERSBURG FABRICS LIMITED
PARTNERSHIP, I, a Tennessee Limited
Partnership
By: Dyersburg Fabrics Inc., its sole general partner
By: /s/ William S. Shropshire, Jr.
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William S. Shropshire, Jr.
Executive Vice President and
Chief Financial Officer
UNITED KNITTING LIMITED
PARTNERSHIP, I, a Tennessee limited
partnership
By: United Knitting, Inc., its sole general partner
By: /s/ William S. Shropshire, Jr.
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William S. Shropshire, Jr.
Secretary and Treasurer
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IQUE LIMITED PARTNERSHIP, I, a
Tennessee limited partnership
By: IQUE, Inc., its sole general partner
By: /s/ William S. Shropshire, Jr.
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William S. Shropshire, Jr.
Executive Vice President and
Chief Financial Officer
ALAMAC KNIT FABRICS, INC.
By: /s/ William S. Shropshire, Jr.
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William S. Shropshire, Jr.
Vice President and Secretary
SUNTRUST BANK, ATLANTA, individually
and as Agent and Collateral Agent
By: /s/ Laura Kahn
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Name: Laura Kahn
Title: Senior Vice President
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FIRST UNION NATIONAL BANK
By: /s/ Roger Pelz
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Name: Roger Pelz
Title: Senior Vice President
WACHOVIA BANK, N.A.
By: /s/ Timothy R. Hileman
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Name: Timothy R. Hileman
Title: Senior Vice President
CENTURA BANK
By: /s/ Robert E. Hammersely, Jr.
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Name: Robert E. Hammersely, Jr.
Title: Bank Officer
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEEN BANK B.A.,
"RABOBANK NEDERLAND", NEW YORK
BRANCH
By: /s/ Theodore W. Cox
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Name: Theodore W. Cox
Title: Vice President
By: /s/ Ian Reece
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Name: Ian Reece
Title: Senior Credit Officer
NATIONAL CITY BANK OF KENTUCKY
By: /s/ Kevin Anderson
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Name: Kevin Anderson
Title: Vice President
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NATIONSBANK, N.A.
By: /s/ E. Phifer Helms
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Name: E. Phifer Helms
Title: Senior Vice President
THE FUJI BANK, LIMITED, NEW
YORK BRANCH
By: /s/ Teiji Teramoto
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Name: Teiji Teramoto
Title: Vice President & Manager
THE BANK OF TOKYO-MITSUBISHI, LTD.
By: /s/ Bill Otott
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Name: Bill Otott
Title: Assistant Vice President
THE CHASE MANHATTAN BANK
By: /s/ James A. Knight
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Name: James A. Knight
Title: Vice President
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