EXHIBIT 10.1
AMENDMENT NO. 2 TO CREDIT AGREEMENT & WAIVER
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT & WAIVER (this "Amendment No.
2"), dated as of May 21, 1998, is entered into by and among ANVIL KNITWEAR,
INC., a Delaware corporation (the "Borrower"), ANVIL HOLDINGS, INC., a Delaware
corporation (the "Parent Company"), the Subsidiaries of the Borrower identified
on the signature pages hereto and such other Subsidiaries of the Borrower which
may hereafter become a Guarantor in accordance with the terms hereof
(hereinafter together with the Parent Company sometimes referred to individually
as a "Guarantor" and collectively as the "Guarantors"), the various banks and
lending institutions identified on the signature pages hereto (each a "Bank" and
collectively, the "Banks"), NATIONSBANK, N.A., as agent for the Banks (in such
capacity, the "Agent") and BANK OF AMERICA NATIONAL TRUST & SAVINGS BANK
(formerly Bank of America Illinois), BANQUE NATIONALE DE PARIS and HELLER
FINANCIAL, INC., as co-agents for the Banks (in such capacities, the
"Co-Agents").
RECITALS
WHEREAS, the Borrower, the Guarantors, the Banks, the Agent and the
Co-Agents are party to that certain Amended and Restated Credit Agreement dated
as of March 14, 1997, as amended by that certain Amendment No. 1 to Credit
Agreement dated as of May 30, 1997 and as may be further amended, supplemented
or otherwise modified from time to time (the "Existing Credit Agreement");
WHEREAS, the parties hereto have agreed to amend the Existing Credit
Agreement as set forth herein;
WHEREAS, the Required Lenders have agreed to waive certain Defaults and
Events of Default as set forth herein;
NOW, THEREFORE, in consideration of the agreements herein contained, the
parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. Unless otherwise defined herein or the
context otherwise requires, the following terms used in this Amendment No. 2,
including its preamble and recitals, have the following meanings:
"Amended Credit Agreement" means the Existing Credit Agreement as
amended hereby.
"Amendment No. 2 Effective Date" is defined in Subpart 4.1.
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SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the
context otherwise requires, terms used in this Amendment No. 2, including its
preamble and recitals, have the meanings provided in the Amended Credit
Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 2
Effective Date, the Existing Credit Agreement is hereby amended in accordance
with this Part II.
SUBPART 2.1. Amendment to Section 7.7. Section 7.7 of the Existing Credit
Agreement is amended in its entirety to read as follows:
7.7 Restricted Payments.
None of the Credit Parties will make any Restricted Payments; except
(i) Subsidiaries of the Borrower may pay dividends or make other payments
or advances to the Borrower, (ii) the Borrower may pay dividends or make
payments to the Parent Company (A) pursuant to an intercompany tax sharing
arrangement but only to an extent that the amount of such dividend or
other payment reflects the applicable tax liability of the Parent Company
and its consolidated Subsidiaries which dividend or payment will be paid
by the Parent Company, (B) to enable the Parent Company to pay ordinary
and necessary expenses associated with the limited activities of the
Parent Company, such as reasonable accounting and professional expenses,
to third parties and director's fees and reasonable expenses, which
director's fees
(1) in the case of directors which are Investors or officers,
directors or employees of an Investor, directors' fees shall not exceed
$50,000 in the aggregate in any single calendar year; and
(2) in the case of directors which are not Investors or officers,
directors or employees of an Investor, directors' fees shall not be in
excess of amounts which would be reasonable and customary for outside
directors of similarly situated companies,
and any and all state franchise taxes and similar taxes, and (C) in an
amount necessary to redeem or otherwise purchase capital stock of the
Management Group to the extent permitted by clause (iii) of this Section
7.7, (iii) any Credit Party may redeem or otherwise purchase capital stock
of members of the Management Group in an aggregate cash amount (including
in connection herewith payment or prepayment of Subordinated Debt owing to
members of the Management Group under Section 7.1(j) of up to $500,000 in
any calendar year (or if less than such
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amount is paid in any year, the "unused" portion may be carried-over for a
period of three (3) successive calendar years and serve to increase
amounts otherwise permitted in such subsequent years, with purchases and
redemptions in a given year being applied first to carry-over amounts,
beginning with the oldest carry-over amounts and working forward to the
most recent carry-over amounts, and then to the amount permitted for the
year in which they are made), but not to exceed $2,500,000 during the term
of this Credit Agreement, provided, that the aggregate amount of any such
redemptions may be increased in a given fiscal year by an amount equal to
actual cash consideration received in such fiscal year from members of the
Management Group from the sale of capital stock, (iv) the portion of Net
Proceeds from any Equity Transaction which is not paid to the Banks for
application to the Revolving Loans may used to prepay (with a
corresponding commitment reduction in the case of any revolving Funded
Debt) Funded Debt of the Borrower and/or its Subsidiaries in accordance
with the provisions of Section 6.15, (v) the Parent Company may (A) pay
dividends on the Senior Preferred Stock in an amount not to exceed $10,000
in the aggregate during any fiscal year and (B) upon issuance of the
Exchange Debentures in accordance with Section 7.11, repurchase fractional
shares of and pay accrued dividends owing with respect to the Senior
Preferred Stock, (vi) pursuant to the terms of the Recapitalization
Agreement, any payments made in connection with the Recapitalization and
(vii) the Borrower may pay to BRS and Venture Partners a management fee in
an amount not to exceed $500,000 in the aggregate during any fiscal year.
PART III
WAIVER
The Required Lenders hereby (i) waive the requirements of Section 6.11(a)
of the Credit Agreement for May 2, 1998 and (ii) agree that the Borrower's
failure to observe the covenant of Section 6.11(a) for May 2, 1998 shall not
constitute an Event of Default under Section 8.1 of the Credit Agreement.
PART IV
CONDITIONS TO EFFECTIVENESS
SUBPART 4.1. Amendment No. 2 Effective Date. This Amendment No. 2 shall be
and become retroactively effective as of March 14, 1997 (the "Amendment No. 2
Effective Date") when all of the conditions set forth in this Subpart 4.1 shall
have been satisfied, and thereafter this Amendment No. 2 shall be known, and may
be referred to, as "Amendment No. 2."
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SUBPART 4.1.1. Execution of Counterparts of Amendment. The Agent shall
have received executed counterparts (or other evidence of execution, including
facsimile signatures, satisfactory to the Agent) of this Amendment No. 2, which
collectively shall have been duly executed on behalf of each of the Borrower,
the Guarantors and the Required Banks.
SUBPART 4.1.2. Other Documents. The Agent shall have received such other
documents as the Agent, any Bank or counsel to the Agent may reasonably request.
PART V
MISCELLANEOUS
SUBPART 5.1. Cross-References. References in this Amendment No. 2 to any
Part or Subpart are, unless otherwise specified, to such Part or Subpart of this
Amendment No. 2.
SUBPART 5.2. Instrument Pursuant to Existing Credit Agreement. This
Amendment No. 2 is a Credit Document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be construed,
administered and applied in accordance with the terms and provisions of the
Existing Credit Agreement.
SUBPART 5.3. References in Other Credit Documents. At such time as this
Amendment No. 2 shall become effective pursuant to the terms of Subpart 4.1, all
references in the Credit Documents to the "Credit Agreement" shall be deemed to
refer to the Amended Credit Agreement.
SUBPART 5.4. Representations and Warranties. Each Credit Party hereby
represents and warrants that (i) each Credit Party that is party to this
Amendment No. 2: (a) has the requisite corporate power and authority to execute,
deliver and perform this Amendment No. 2, as applicable, and (b) is duly
authorized to, and has been authorized by all necessary corporate action, to
execute, deliver and perform this Amendment No. 2, (ii) the Borrower has no
claims, counterclaims, offsets, or defenses to the Credit Documents and the
performance of its obligations thereunder, or if the Borrower has any such
claims, counterclaims, offsets, or defenses to the Credit Documents or any
transaction related to the Credit Documents, the same are hereby waived,
relinquished and released in consideration of the Banks' execution and delivery
of this Amendment No. 2, (iii) the representations and warranties contained in
Section 5 of the Existing Credit Agreement are, subject to the limitations set
forth therein, true and correct in all material respects on and as of the date
hereof as though made on and as of such date (except for those which expressly
relate to an earlier date) and (iv) after giving effect to this Amendment No. 2,
no Default or Event of Default exists under the Existing Credit Agreement on and
as of the date hereof or will occur as a result of the transactions contemplated
hereby.
SUBPART 5.5. Liens. The Borrower and the Guarantors, as applicable, affirm
the liens and security interests created and granted in the Credit Documents and
agree that this Amendment No. 2 shall in no manner adversely effect or impair
such liens and security interest.
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SUBPART 5.6. Acknowledgment of Guarantors. The Guarantors acknowledge and
consent to all of the terms and conditions of this Amendment No. 2 and agree
that this Amendment No. 2 and all documents executed in connection herewith do
not operate to reduce or discharge the Guarantors' obligations under the Amended
Credit Agreement or the other Credit Documents. The Guarantors further
acknowledge and agree that the Guarantors have no claims, counterclaims,
offsets, or defenses to the Credit Documents and the performance of the
Guarantors' obligations thereunder or if the Guarantors did have any such
claims, counterclaims, offsets or defenses to the Credit Documents or any
transaction related to the Credit Documents, the same are hereby waived,
relinquished and released in consideration of the Banks' execution and delivery
of this Amendment No. 2.
SUBPART 5.7. No Other Changes. Except as expressly modified and amended in
this Amendment No. 2, all the terms, provisions and conditions of the Credit
Documents shall remain unchanged and shall continue in full force and effect.
SUBPART 5.8. Counterparts. This Amendment No. 2 may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement.
SUBPART 5.9. Entirety. This Amendment No. 2, the Amended Credit Agreement
and the other Credit Documents embody the entire agreement between the parties
and supersede all prior agreements and understandings, if any, relating to the
subject matter hereof. These Credit Documents represent the final agreement
between the parties and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties.
SUBPART 5.10. Governing Law. THIS AMENDMENT NO. 2 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 NEW YORK.
SUBPART 5.11. Successors and Assigns. This Amendment No. 2 shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
[Signatures to Follow]
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This Amendment No. 2 is executed as of the day and year first written
above.
BORROWER: ANVIL KNITWEAR, INC.
a Delaware corporation
By: /s/ Bernard Geller
---------------------------------------
Bernard Geller, President
GUARANTORS: ANVIL HOLDINGS, INC.,
a Delaware corporation
By: /s/ Bernard Geller
---------------------------------------
Bernard Geller, Chief Executive Officer
COTTONTOPS, INC.,
a Delaware corporation
By: /s/ Bernard Geller
---------------------------------------
Bernard Geller, Chief Executive Officer
[Signatures Continue]
BANKS: NATIONSBANK, N.A.,
individually in its capacity as a
Bank and in its capacity as Agent
By:
-------------------------------
Name:
Title:
BANK OF AMERICA NATIONAL TRUST &
SAVINGS ASSOCIATION,
individually in its capacity as a
Bank and in its capacity as Co-Agent
By:
-------------------------------
Name:
Title:
BANQUE NATIONALE DE PARIS,
individually in its capacity as
a Bank and in its capacity as Co-Agent
By:
-------------------------------
Name:
Title:
By:
-------------------------------
Name:
Title:
HELLER FINANCIAL, INC.,
individually in its capacity as a
Bank and in its capacity as Co-Agent
By: /s/ T. Bukowski
-------------------------------
Name: T. Bukowski
Title: Sr. Vice Pres.
[Signatures Continue]
THE CHASE MANHATTAN BANK
By: /s/ Abby Parsonnet
--------------------------------
Name: Abby Parsonnet
Title: V.P.
FLEET BANK, N.A.
By:
-------------------------------
Name:
Title: