FOURTH AMENDMENT TO
FORBEARANCE AGREEMENT
THIS FOURTH AMENDMENT TO FORBEARANCE AGREEMENT (hereinafter, this
"Fourth Forbearance Agreement Amendment") is entered as of March 15, 1999
between PLUMA, INC., a North Carolina corporation (the "Borrower") and
NATIONSBANK, N.A., as Agent for and on behalf of the Lenders (the "Agent").
Capitalized terms used herein and not otherwise defined or designated herein
shall have the respective meanings given to them in the Credit Agreement
(defined below).
RECITALS
WHEREAS, the Borrower, the Agent and the Lenders are parties to that
certain Credit Agreement dated as of April 23, 1998, as amended by that certain
First Amendment to Credit Agreement and Waiver between the Borrower and the
Agent for and on behalf of the Lenders dated as of August 27, 1998, by that
certain Second Amendment to Credit Agreement between the Borrower and the Agent
for and on behalf of the Lenders dated as of September 30, 1998, by that certain
Fourth Amendment to Credit Agreement between the Borrower and the Agent for and
on behalf of the Lenders dated as of November 16, 1998, by that certain Fourth
Amendment to Credit Agreement between the Borrower and the Agent for and on
behalf of the Lenders dated as of December 11, 1998, by that certain Fifth
Amendment to Credit Agreement between the Borrower and the Agent for and on
behalf of the Lenders dated as of December 31, 1998, by that certain Sixth
Amendment to Credit Agreement between the Borrower and the Agent for and on
behalf of the Lenders dated as of January 29, 1999, and by that certain Seventh
Amendment to Credit Agreement between the Borrower and the Agent for and on
behalf of the Lenders dated as of March 1, 1999 (as further amended, modified,
supplemented, extended or restated from time to time, the "Credit Agreement");
WHEREAS, the Borrower and the Agent for and on behalf of the Lenders are
parties to that certain Forbearance Agreement dated as of November 16, 1998, as
amended by that certain Amendment to Forbearance Agreement between the Borrower
and the Agent for and on behalf of the Lenders dated as of December 31, 1998, by
a Second Amendment to Forbearance Agreement between the Borrower and the Agent
for and on behalf of the Lenders dated as of January 29, 1999, and by a Third
Amendment to Forbearance Agreement between the Borrower and the Agent for and on
behalf of the Lenders dated as of March 1, 1999 (as further amended, modified,
supplemented, extended or restated from time to time, the "Forbearance
Agreement");
WHEREAS, the Borrower has requested that the Lenders agree to (i) amend
the Forbearance Agreement to extend the Forbearance Termination Date to March
31, 1999 and (ii) release the Capital Factors Receivables (defined below). The
Agent, for and on behalf of the Lenders, has agreed to do so, but only upon the
terms and conditions set forth herein;
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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:
1. Forbearance Termination Date. The Forbearance Agreement is hereby
amended so that the Forbearance Termination Date is extended to March 31, 1999.
2. Capital Factors Receivables. The Agent, for and on behalf of the
Lenders, agrees that the Agent shall execute such documents as are necessary to
release its security interest, held for and on behalf of the Lenders, in the
Receivables set forth on Schedule I to this Forbearance Agreement (the "Capital
Factors Receivables") to allow for the assignment, free and clear of any
interest of the Agent or the Lenders, of the Capital Factors Receivables to
Capital Factors, Inc. ("Capital Factors"), provided that the Capital Factors
pays a minimum of $290,430 to the Borrower in immediately available funds in
exchange for the assignment of the Capital Factors Receivables.
3. Cash Flow Forecast. On or before March 22, 1999, the Borrower shall
deliver to the Agent on behalf of the Lenders a weekly cash flow forecast for
the period from March 31, 1999 through September 30, 1999, which cash flow
forecast shall be prepared with the material assistance of PwC.
4. Amendment to Credit Agreement. Simultaneously with the execution of
this Fourth Forbearance Agreement Amendment, the Borrower shall execute and
deliver to the Agent, on behalf of the Lenders, a Eighth Amendment to Credit
Agreement (the "Eighth Amendment") in form of that attached hereto as Exhibit A.
5. Fourth Forbearance Agreement Amendment Fees. In consideration of the
willingness of the Agent, on behalf of the Lenders, to enter this Fourth
Forbearance Agreement Amendment, the Borrower, simultaneously with the execution
of this Agreement, shall pay to the Agent for the account of each Lender who
consents to this Fourth Forbearance Agreement Amendment and the Eighth Amendment
and delivers evidence of such consent to the Agent by the date hereof, a fee in
an amount equal to .05% of such Lender's Commitment immediately prior to the
execution of the Eighth Amendment (collectively, the "Fourth Forbearance
Agreement Amendment Fees").
6. Conditions Precedent. As conditions precedent to the effectiveness of
this Fourth Forbearance Agreement Amendment, on or before the date hereof:
(a) The Agent shall have received original duly executed
counterparts of this Fourth Forbearance Agreement Amendment duly
executed by the Credit Parties and the Agent;
(b) The Borrower shall have executed and delivered to the Agent
the Eighth Amendment;
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(c) The Agent, on behalf of the Lenders, shall have received the
Fourth Forbearance Agreement Amendment Fees; and
(d) The Borrower shall have delivered to the Agent an opinion of
counsel to the Borrower in form and substance satisfactory to the Agent
as to the due authorization, execution, delivery and enforceability of
this Fourth Forbearance Agreement Amendment and the Eighth Amendment.
7. Limited Modification Only. Except as specifically modified hereby,
the terms and conditions of the Forbearance Agreement remain in full force and
effect.
8. Release. The Borrower hereby releases the Agent, the Lenders, and the
Agent's and the Lenders' respective officers, employees, representatives,
agents, counsel and directors from any and all actions, causes of action,
claims, demands, damages and liabilities of whatever kind or nature, in law or
in equity, now known or unknown, suspected or unsuspected to the extent that any
of the foregoing arises from any action or failure to act on or prior to the
date hereof.
9. Expenses. Upon demand therefor, the Borrower shall pay all
out-of-pocket expenses incurred by the Agent in connection with the negotiation,
drafting and execution of this Fourth Forbearance Agreement Amendment and the
exhibits hereto, including without limitation reasonable fees and expenses of
the Agent's counsel.
10. Borrower's Representations. The Borrower hereby represents and
warrants as follows:
(a) The Borrower has taken all necessary action to authorize the
execution, delivery and performance of this Fourth Forbearance Agreement
Amendment;
(b) This Fourth Forbearance Agreement Amendment has been duly
executed and delivered by the Borrower and constitutes the Borrower's
legal, valid and binding obligations, enforceable in accordance with its
terms, except as such enforceability may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors' rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity); and
(c) 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 the Borrower of this Fourth Forbearance Agreement
Amendment.
11. Counterparts. This Fourth Forbearance Agreement Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be an original, but
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all of which shall constitute one and the same instrument. Delivery of an
executed counterpart of this Fourth Forbearance Agreement Amendment by telecopy
shall be effective as an original and shall constitute a representation that an
executed original shall be delivered.
12. GOVERNING LAW. THIS FOURTH FORBEARANCE AGREEMENT AMENDMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.
[SIGNATURES CONTINUE ON FOLLOWING PAGE.]
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Each of the parties hereto has caused a counterpart of this Fourth
Forbearance Agreement Amendment to be duly executed and delivered as of the date
first above written.
PLUMA, INC.,
a North Carolina corporation
By:_________________________________
Name:_______________________________
Title:______________________________
NATIONSBANK, N.A.,
as Agent for and on behalf of
the Lenders
By:_________________________________
Name:_______________________________
Title:______________________________
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