SECOND AMENDMENT AND CONSENT
to
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
dated as of March 10, 1994
This SECOND AMENDMENT AND CONSENT (the "Amendment"), dated as of
December 30, 1994, is by and among FIELDCREST CANNON, INC., a Delaware
corporation (the "Company"), the lenders listed on the signature pages
hereto (the "Lenders"), BANK OF AMERICA ILLINOIS (formerly known as
Continental Bank N.A.), CORESTATES BANK, N.A. (formerly known as
Philadelphia National Bank) and FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as lead managers for the Lenders (collectively, the "Lead
Managers"), and THE FIRST NATIONAL BANK OF BOSTON, as agent for the Lenders
(the "Agent").
WHEREAS, the Company, the Lenders, the Lead Managers and the
Agent are parties to that certain Third Amended and Restated Revolving
Credit Agreement, dated as of March 10, 1994, as amended (as so amended,
the "Credit Agreement"); and
WHEREAS, the Company, the Lenders, the Lead Managers and the
Agent have agreed, subject to the terms and conditions set forth herein, to
amend certain provisions of the Credit Agreement as set forth herein;
NOW, THEREFORE, the parties hereto hereby agree as follows:
(section mark)1. CERTAIN DEFINED TERMS. Capitalized terms
which are used herein without definition and which are defined in
the Credit Agreement shall have the same meanings herein as in the
Credit Agreement.
(section mark)2. AMENDMENT TO CREDIT AGREEMENT.
(a) Section 1 of the Credit Agreement is hereby amended by
adding the following new definitions in the appropriate places in the
alphabetical sequence thereof:
Encee Security Agreement. The Security Agreement, dated as
of December 30, 1994, between Encee and the Agent, for the
benefit of the Lenders and the Agent, and satisfactory to the
Lenders and the Agent in all respects, as the same may be amended
and in effect from time to time.
Fieldcrest Financing. Fieldcrest Cannon Financing, Inc., a
Delaware corporation and wholly-owned Subsidiary of the Company.
Fieldcrest Licensing. Fieldcrest Cannon Licensing, Inc., a
Delaware corporation and wholly-owned Subsidiary of Fieldcrest
Financing.
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Fieldcrest Transportation. Fieldcrest Cannon
Transportation, Inc., a Delaware corporation and a wholly-owned
Subsidiary of the Company.
Fieldcrest Financing Guaranty. The Guaranty, dated as of
December 30, 1994, from Fieldcrest Financing to the Lenders and
the Agent and satisfactory to the Lenders and the Agent in all
respects, as the same may be amended and in effect from time to
time.
Fieldcrest Licensing Guaranty. The Guaranty, dated as of
December 30, 1994, from Fieldcrest Licensing to the Lenders and
the Agent and satisfactory to the Lenders and the Agent in all
respects, as the same may be amended and in effect from time to
time.
Fieldcrest Transportation Guaranty. The Guaranty, dated as
of December 30, 1994, from Fieldcrest Transportation to the
Lenders and the Agent and satisfactory to the Lenders and the
Agent in all respects, as the same may be amended and in effect
from time to time.
Fieldcrest Financing Security Agreement. The Security
Agreement, dated as of December 30, 1994, between Fieldcrest
Financing and the Agent, for the benefit of the Lenders and the
Agent, and satisfactory to the Lenders and the Agent in all
respects, as the same may be amended and in effect from time to
time.
Fieldcrest Licensing Security Agreement. The Security
Agreement, dated as of December 30, 1994, between Fieldcrest
Licensing and the Agent, for the benefit of the Lenders and the
Agent, and satisfactory to the Lenders and the Agent in all
respects, as the same may be amended and in effect from time to
time.
Fieldcrest Licensing Trademark Assignment. The Trademark
Collateral Security and Pledge Agreement, dated as of December
30, 1994, between Fieldcrest Licensing and the Agent, for the
benefit of the Lenders and the Agent, as the same may be amended
and in effect from time to time.
Fieldcrest Transportation Security Agreement. The Security
Agreement, dated as of December 30, 1994 between Fieldcrest
Transportation and the Agent, for the benefit of the Lenders and
the Agent, and satisfactory to the Lenders and the Agent in all
respects, as the same may be amended and in effect from time to
time.
(b) Section 1 of the Credit Agreement is hereby further amended
by deleting the definitions of Collateral, Revolving Credit Commitment
Amount, and Security Documents in their entirety, and substituting
therefore the following:
Collateral. All of the property, rights and interests of
the Company, FCC Canada, Crestfield Cotton, Encee, Fieldcrest
Financing, Fieldcrest Licensing and Fieldcrest Transportation
that are or are intended to be subject to the security interests
created by the Security Documents.
Revolving Credit Commitment Amount. $160,000,000, less the
aggregate
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amount, if any, by which the same has been reduced
pursuant to (section mark)2.4 hereof.
Security Documents. The Security Agreement, the Crestfield
Cotton Guaranty, the FCC Canada Guaranty, the Subsidiary
Guaranty, the Fieldcrest Financing Guaranty, the Fieldcrest
Licensing Guaranty, the Fieldcrest Transportation Guaranty, the
Crestfield Cotton Security Agreement, the Subsidiary Security
Agreement, the Encee Security Agreement, the Fieldcrest Financing
Security Agreement, the Fieldcrest Licensing Security Agreement,
the Fieldcrest Transportation Security Agreement, the Trademark
Assignment, the Fieldcrest Licensing Trademark Assignment and the
Agency Agreements, and any and all instruments and documents
required to be delivered pursuant thereto, in each case as
originally executed, or if amended, restated, modified or
supplemented, as so amended, restated, modified or supplemented.
(c) Section 1 of the Credit Agreement is hereby further
amended by deleting "(section mark)5(e)" where it appears in clause
(iii) of the definition of Accounts Receivable, and substituting
therefor "(section mark)5(h)".
(d) Section 1 of the Credit Agreement is hereby further
amended by deleting "(section mark)5(e)" where it appears in clause
(ii) of the definition of Net Security Value of Inventory, and
substituting therefor "(section mark)5(h)".
(e) Section 5 of the Credit Agreement is hereby amended by
deleting clause (d) in it entirety, and substituting therefor the
following:
(d) The Lender Obligations shall also be guarantied by each
of Encee, Fieldcrest International and St. Mary's pursuant to the
Subsidiary Guaranty. The obligations of Encee under the
Subsidiary Guaranty shall be secured by a blanket first lien on
certain assets of Encee, whether now owned or hereafter acquired
by Encee, pursuant to the terms of the Encee Security Agreement.
(f) Section 5 of the Credit Agreement is hereby further amended
by designating clause (e) thereof as clause (h) and inserting after clause
(d) thereof the following new clauses:
(e) The Lender Obligations shall also be guaranteed by
Fieldcrest Financing pursuant to the Fieldcrest Financing
Guaranty. The obligations of Fieldcrest Financing under the
Fieldcrest Financing Guaranty shall be secured by a blanket first
lien on all assets of Fieldcrest Financing, whether now owned or
hereafter acquired by Fieldcrest Financing, pursuant to the terms
of the Fieldcrest Financing Security Agreement.
(f) The Lender Obligations shall also be guaranteed by
Fieldcrest Licensing pursuant to the Fieldcrest Licensing
Guaranty. The obligations of Fieldcrest Licensing under the
Fieldcrest Licensing Guaranty shall be secured by a blanket first
lien on all assets of Fieldcrest Licensing, whether now owned or
hereafter acquired by Fieldcrest Licensing pursuant to the terms
of the Fieldcrest Licensing Security Agreement.
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(g) The Lender Obligations shall also be guaranteed by the
Fieldcrest Transportation pursuant to the Fieldcrest
Transportation Guaranty. The obligations of Fieldcrest
Transportation under the Fieldcrest Transportation Guaranty shall
be secured by a blanket first lien on all assets (other than
motor vehicles) of Fieldcrest Transportation, whether now owned
or hereafter acquired by Fieldcrest Transportation, pursuant to
the terms of the Fieldcrest Transportation Security Agreement.
(g) Section 8.3(d) of the Credit Agreement is hereby amended by
inserting on line six thereof after the amount "$20,000,000" the phrase ",
except that loans to any of Crestfield Cotton, FCC Canada, Encee,
Fieldcrest Financing, Fieldcrest Licensing and Fieldcrest Transportation
shall not be subject to such dollar limitation,".
(h) Section 8.6 of the Credit Agreement is hereby amended by
deleting the last sentence thereof in its entirety, and substituting
therefor the following:
The Company will not sell, lease or otherwise dispose of assets
except for (i) sales of inventory in the ordinary course of
business, (ii) sales of assets (other than Collateral) in arms-
length transactions for cash and for fair and reasonable value,
and (iii) transfers of assets to Subsidiaries of the Company,
provided that (A) such Subsidiary is a guarantor of the Lender
Obligations, (B) all such assets which constitute Collateral are
transferred to such Subsidiary subject to the Agent's lien
thereon and (C) such Subsidiary grants to the Agent, for the
benefit of the Agent and the Lenders, a first perfected lien on
all of such transferred assets.
(i) Section 8.8 of the Credit Agreement is hereby amended by
deleting "(p)" where it appears therein, and substituting therefor "(q)".
(j) Schedule 1.1 to the Credit Agreement is hereby amended by
deleting such schedule in its entirety, and substituting therefor the
Schedule 1.1 attached hereto.
(k) Schedule 6.1 to the Credit Agreement is hereby amended by
deleting such schedule its entirety, and substituting therefor the Schedule
6.1 attached hereto.
(section mark)3. CONSENT. The Lenders hereby consent to the
transfer by the Company on or prior to the date hereof of certain
assets of the Company, including without limitation, Collateral, to
each of Encee, Fieldcrest Transportation, Fieldcrest Financing and
Fieldcrest Licensing, provided that all assets constituting
Collateral which are transferred to such entities are and shall
remain subject to the first priority security interest of the
Agent, for the benefit of the Lenders and the Agent, granted
pursuant to the Security Documents.
(section mark)4. AFFIRMATION BY THE COMPANY AND THE GUARANTORS.
(a) The Company hereby ratifies and confirms all of the Lender
Obligations, including, without limitation, the Loans, and the Company
hereby affirms its absolute and unconditional promise to pay to the
Lenders the Loans and all other amounts due under the Credit Agreement as
amended hereby. The Company hereby confirms that the Lender
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Obligations are and remain secured pursuant to the Security
Documents to which the Company is a party.
(b) Each of Crestfield Cotton, FCC Canada, Encee, Fieldcrest
International and St. Mary's hereby acknowledges the provisions of this
Amendment and hereby reaffirms its absolute and unconditional guaranty of
the Company's payment and performance of the Lender Obligations to the
Banks as more fully described in the Guaranty to which such Person is a
party. Each of Crestfield Cotton and FCC Canada hereby confirms that its
obligations under the Guaranty to which it is a party are and remain
secured pursuant to the Security Documents to which it is a party.
(section mark)5. REPRESENTATIONS AND WARRANTIES. The
Company hereby represents and warrants to the Lenders as follows:
(a) Representations and Warranties. The representations
and warranties contained in (section mark)6 of the Credit Agreement
were true and correct in all material respects when made. The
representations and warranties contained in (section mark)6 of the
Credit Agreement, as amended hereby, are true and correct on the date
hereof.
(b) Enforceability. The execution and delivery by the Company
of this Amendment and all other instruments and agreements required to be
executed and delivered by the Company in connection with the transactions
contemplated hereby or referred to herein (collectively, the "Amendment
Documents"), and the performance by the Company of the Amendment Documents
and the Credit Agreement, as amended hereby, are within the corporate
powers of the Company and have been duly authorized by all necessary
corporate action on the part of the Company. Each of the Amendment
Documents and the Credit Agreement, as amended hereby, are valid and
legally binding obligations of the Company, enforceable in accordance with
their terms, except as limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or affecting the enforcement of
creditors' rights in general.
(c) No Default. No Default or Event of Default has occurred and
is continuing and no Default or Event of Default will exist after the
execution and delivery of this Amendment or after the consummation of the
transactions contemplated hereby.
(section mark)6. EFFECTIVENESS. This Amendment shall become
effective as of the date hereof upon satisfaction of each of the
conditions precedent set forth in this (section mark)6:
(a) Delivery. The Company, the Lenders and the
guarantors referred to in (section mark)3(b) hereof shall have
executed and delivered this Amendment.
(b) Restated A Notes. The Company shall have duly authorized,
executed and delivered to each of the Lenders a restated A Note in
substantially the form of Exhibit A attached hereto (collectively, the
"Restated A Notes"), with appropriate insertions, one Restated A Note being
payable to the order of each Lender in a principal amount equal to such
Lender's Commitment as amended hereby.
(c) Subsidiary Documents. Fieldcrest Financing shall have duly
authorized,
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executed and delivered to the Lenders and the Agent, as
applicable, the Fieldcrest Financing Guaranty and the Fieldcrest
Financing Security Agreement. Fieldcrest Licensing shall have duly
authorized, executed and delivered to the Lenders and the Agent, as
applicable, the Fieldcrest Licensing Guaranty, the Fieldcrest Licensing
Security Agreement and the Fieldcrest Licensing Trademark
Assignment. Fieldcrest Transportation shall have duly authorized,
executed and delivered to the Lender and the Agent, the Fieldcrest
Transportation Guaranty and the Fieldcrest Transportation Security
Agreement. Encee shall have duly authorized, executed and delivered
to the Lender and the Agent, the Encee Security Agreement.
(d) Pledged Stock and Intercompany Notes. The Company shall
have delivered to the Agent in pledge, for the benefit of the Agent and the
Lenders, (i) certificates for all shares of the capital stock of Fieldcrest
Financing and Fieldcrest Transportation, together with stock powers duly
executed by the Company in blank and (ii) all promissory notes executed and
delivered by any of Fieldcrest Financing, Fieldcrest Licensing and
Fieldcrest Transportation (collectively, the "New Subsidiaries") on or
prior to the date hereof in favor of the Company, endorsed in favor of the
Agent. Fieldcrest Financing shall have delivered to the Agent in pledge,
for the benefit of the Agent and the Lenders, (i) certificates for all
shares of the capital stock of Fieldcrest Licensing, together with stock
powers duly executed by Fieldcrest Financing in blank, and (ii) all
promissory notes executed and delivered by Fieldcrest Licensing and the
Company on or prior to the date hereof in favor of Fieldcrest Financing,
endorsed in favor of the Agent.
(e) Validity of Liens.
The Security Documents to which each of the New Subsidiaries and Encee is a
party shall be effective to create in favor of the Agent a legal, valid and
enforceable first security interest in and lien upon the Collateral
described therein. All filings, recordings, deliveries of instruments and
other actions necessary or desirable in the opinion of the Agent to protect
and preserve such security interests shall have been duly effected. The
Agent shall have received evidence thereof in form and substance
satisfactory to the Agent.
(f) Perfection Certificates and UCC Search Results.
The Agent shall have received from each of the New Subsidiaries and Encee a
completed and fully executed Perfection Certificate and the results of UCC
searches with respect to the Collateral, indicating no liens other than
Permitted Liens and otherwise in form and substance satisfactory to the
Agent.
(g) Certified Copies of Corporate Documents.
Each of the Lenders shall have received from each of New Subsidiaries and
Encee a copy, certified by a duly authorized officer of such Person to be
true and complete on the date hereof, of each of (i) its charter or other
incorporation documents as in effect on such date of certification, and
(ii) its by-laws as in effect on such date.
(h) Corporate, Action.
All corporate action necessary for the valid execution, delivery and
performance by each of the New Subsidiaries and Encee of the Loan Documents
to which it is or is to become a party shall have been duly and effectively
taken, and evidence thereof satisfactory to the Lenders shall have been
provided to each of the Lenders.
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(i) Incumbency Certificates.
Each of the Lenders shall have received from each of the New Subsidiaries
and Encee an incumbency certificate, dated as of the date hereof, signed by
a duly authorized officer of such Subsidiary, and giving the name and
bearing a specimen signature of each individual who shall be authorized:
(i) to sign, in the name and on behalf of each of such Subsidiary, each of
the Loan Documents to which such Subsidiary is or is to become a party; and
(ii) to give notices and to take other action on its behalf under the Loan
Documents to which it is a party.
(j) Certificates of Insurance. The Agent shall have received
(i) a certificate of insurance from an independent insurance broker dated
as of the date hereof, identifying insurers, types of insurance, insurance
limits, and policy terms, and otherwise describing the insurance obtained
in accordance with the provisions of the Security Documents to which the
New Subsidiaries and Encee are parties and (ii) certified copies of all
policies evidencing such insurance (or certificates therefore signed by the
insurer or an agent authorized to bind the insurer).
(k) Opinion of Counsel. Each of the Lenders and the Agent shall
have received a favorable legal opinion addressed to the Lenders and the
Agent, dated as of the date hereof, in form and substance satisfactory to
the Lenders and the Agent, from M.K. Doss, general counsel to the Company
and its Subsidiaries.
(l) Payment of Fees. The Company shall have paid to each of the
Lenders an amendment fee equal to $5,000 per Lender.
(m) Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Amendment and all documents
incident hereto shall be satisfactory in form and substance to the Agent,
and the Agent shall have received all information and such counterpart
originals or certified or other copies of such documents as the Agent may
reasonably request.
(section mark)7. CONCERNING THE RESTATED A NOTES. The
parties hereto hereby agree that from and after the delivery by the
Company of the Restated A Notes to the Lenders, such Restated A Notes
shall constitute the A Notes referred to in the Loan Documents.
Promptly upon the delivery to the Lenders of the Restated A Notes, the
Lenders shall return the superseded A Notes to the Company.
(section mark)8. MISCELLANEOUS PROVISIONS. (a) Except as
otherwise expressly provided by this Amendment, all of the terms,
conditions and provisions of the Credit Agreement shall remain the
same. It is declared and agreed by each of the parties hereto that
the Credit Agreement, as amended hereby, shall continue in full force
and effect, and that this Amendment and such Credit Agreement shall be
read and construed as one instrument. The consent granted
hereunder is limited to the specific matters referred to herein and
the Lenders shall not have any obligation to issue any further consent
with respect to the subject matter of this consent or any other
matter.
(b) This Amendment is intended to take effect as an agreement
under seal and shall be construed according to and governed by the laws of
the Commonwealth of
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Massachusetts.
(c) This Amendment may be executed in any number of
counterparts, but all such counterparts shall together constitute but one
instrument. In making proof of this Amendment it shall not be necessary to
produce or account for more than one counterpart signed by each party
hereto by and against which enforcement hereof is sought.
(d) The Company hereby agrees to pay to the Agent, on demand by
the Agent, all reasonable out-of-pocket costs and expenses incurred or
sustained by the Agent in connection with the preparation of this Amendment
and the documents referred to herein (including reasonable legal fees).
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IN WITNESS WHEREOF, the parties have executed this Amendment as
of the date first above written.
FIELDCREST CANNON, INC.
By:/s/ T. R. Staab
Title: Vice President and
Chief Financial Officer
THE FIRST NATIONAL BANK OF
BOSTON, as Agent
By:/s/ Mitchell B. Feldman
Title: Director
THE FIRST NATIONAL BANK OF
BOSTON
By:/s/ Mitchell B. Feldman
Title: Director
BANK OF AMERICA ILLINOIS,
individually and as Lead Manager
By:/s/ Wayne H. Riess
Title: Vice President
CORESTATES BANK, N.A.,
individually and as Lead Manager
By:/s/ James P. Richards
Title: Vice President
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FIRST UNION NATIONAL BANK OF
NORTH CAROLINA, individually and as
Lead Manager
By:/s/ Richard J. Rizzo, Jr.
Title: Vice President
BANK OF MONTREAL
By:/s/ Michael J. Love
Title: Director
MELLON BANK, N. A.
By:/s/ Frederick W. Okie, Jr.
Title: Vice President
Each of the undersigned joins in this Amendment for purposes of
(section mark)3(b) hereof.
CRESTFIELD COTTON COMPANY
By:/s/ T. R. Staab
Title: Vice President
FCC CANADA, INC.
By:/s/ T. R. Staab
Title: Vice President
ENCEE, INC.
By:/s/ T. R. Staab
Title: Vice President and Treasurer
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FIELDCREST CANNON
INTERNATIONAL, INC.
By:/s/ T. R. Staab
Title: Vice President and Treasurer
ST. MARY'S, INC.
By:/s/ T. R. Staab
Title: Vice President and Treasurer
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