EIGHTH AMENDMENT TO
CREDIT AGREEMENT
THIS EIGHTH AMENDMENT TO CREDIT AGREEMENT (hereinafter, this
"Amendment") is entered as of March 15, 1999 among PLUMA, INC., a North Carolina
corporation (the "Borrower"), NATIONSBANK, N.A., as Agent for and on behalf of
the Lenders (the "Agent") and the Lenders. Capitalized terms used herein and not
otherwise defined herein shall have the respective meanings given to them in the
Credit Agreement.
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
Third 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 dated as of December 31, 1998, by that certain
Sixth Amendment to Credit Agreement dated as of January 29, 1999 and by that
certain Seventh Amendment to Credit Agreement 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 on behalf of the Lenders are parties
to that certain Forbearance Agreement dated as of November 16, 1998, as amended
by an Amendment to Forbearance Agreement dated as of December 31, 1998, by a
Second Amendment to Forbearance Agreement dated as of January 29, 1999, by a
Third Amendment to Forbearance Agreement dated as of March 1, 1999 and by a
Fourth Amendment to Forbearance Agreement dated as of the date hereof (as
further amended, modified, supplemented, extended or restated from time to time,
the "Forbearance Agreement"); and
WHEREAS, the parties desire to amend certain terms of the Credit
Agreement as 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:
1. Reaffirmation of Existing Debt. The Credit Parties acknowledge and
confirm: (a) that the Agent, on behalf of the Lenders, has a valid and
enforceable first priority perfected security interest in the Collateral subject
only to certain Permitted Liens, (b) that the Borrower's obligation to repay the
outstanding principal amount of the Loans and reimburse the Issuing Lender for
any drawing on a Letter of Credit is unconditional and not subject to any
offsets, defenses or
counterclaims, (c) that the Agent and the Lenders have performed fully all of
their respective obligations under the Credit Agreement, the Forbearance
Agreement and the other Credit Documents, and (d) by entering into this
Amendment, the Lenders do not waive or release any term or condition of the
Credit Agreement, the Forbearance Agreement or any of the other Credit Documents
or any of their rights or remedies under such Credit Documents or applicable law
or any of the obligations of any Credit Party thereunder.
2. Amendments. The Credit Agreement is hereby amended so that the
definition of "Borrowing Base" set forth in Section 1.1 of the Credit Agreement
is amended and restated in its entirety to read as follows:
"BORROWING BASE" MEANS, AS OF ANY DAY, THE SUM OF (A) 85% OF
ELIGIBLE RECEIVABLES, (B) 60% OF ELIGIBLE INVENTORY, IN EACH CASE AS SET
FORTH IN THE MOST RECENT BORROWING BASE CERTIFICATE DELIVERED TO THE
AGENT AND THE LENDERS IN ACCORDANCE WITH THE TERMS OF SECTION 7.1(E) AND
(C) DURING THE PERIOD (I) FROM AND INCLUDING MARCH 15, 1999 THROUGH AND
INCLUDING MARCH 31, 1999, $14,400,000 AND (II) AFTER MARCH 31, 1999, $0.
3. Miscellaneous.
(a) The term "Credit Agreement" as used in each of the Credit
Documents shall hereafter mean the Credit Agreement as amended by this
Amendment. Except as herein specifically agreed, the Credit Agreement,
and the obligations of the Credit Parties thereunder and under the other
Credit Documents, are hereby ratified and confirmed and shall remain in
full force and effect according to their terms.
(b) The Borrower hereby represents and warrants as follows:
(i) It has taken all necessary action to authorize the
execution, delivery and performance of this Amendment.
(ii) This 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 (a) bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium or similar
laws affecting creditors' rights generally and (b) general principles of
equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).
(iii) 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 Amendment.
(c) The Borrower represents and warrants to the Lenders that (i)
except for the representation contained in Section 6.2(a) with respect
to matters previously disclosed to the
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Lenders, the representations and warranties of the Credit Parties set
forth in Section 6 of the Credit Agreement are true and correct as of
the date hereof and (ii) other than the Acknowledged Events of Default
(as defined in the Forbearance Agreement) no unwaived event has occurred
and is continuing which constitutes a Default or an Event of Default.
(d) This Amendment may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but
all of which shall constitute one and the same instrument. Delivery of
an executed counterpart of this Amendment by telecopy shall be effective
as an original and shall constitute a representation that an executed
original shall be delivered.
(e) 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.
(f) THIS 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.
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Each of the parties hereto has caused a counterpart of this 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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