Exhibit 4.1
NINTH AMENDMENT TO THE THIRD
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of June 15, 2000
NINTH AMENDMENT TO THE THIRD AMENDED AND RESTATED CREDIT
AGREEMENT (this "Amendment") among Glenoit Corporation (the "Borrower"), the
Lenders named in the Credit Agreement (defined below) (the "Lenders"), Banque
Nationale de Paris (the "Agent"), as Agent, Arranger, Issuing Bank and Swing
Line Bank, Fleet National Bank, as Syndication Agent, and LaSalle National Bank,
as Documentation Agent.
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders, the Agent, the Arranger, the
Issuing Bank, the Swing Line Bank, the Syndication Agent and the Documentation
Agent have entered into a Third Amended and Restated Credit Agreement, dated as
of February 12, 1999 (as the same has been and in the future may be amended and
modified from time to time, the "Credit Agreement"). Capitalized terms not
otherwise defined in this Amendment have the same meanings as specified in the
Credit Agreement as amended hereby.
(2) Section 2.06(b)(iii) of the Credit Agreement provides that
the Borrower is obligated to prepay an aggregate principal amount of Working
Capital Advances, Swing Line Advances and Letter of Credit Advances in an amount
by which such Advances plus the Available Amount of all Letters of Credit then
outstanding (together with such Advances, the "Outstanding Amount") exceeds the
Loan Value of Eligible Collateral, based upon the most recent Borrowing Base
Certificate.
(3) On February 23, 2000, Borrower delivered to the Agent a
Borrowing Base Certificate dated February 23, 2000 (the "February BB
Certificate") reflecting that the Outstanding Amount exceeded the Loan Value of
Eligible Collateral. The Borrower was then obligated under Section 2.06(b)(iii)
of the Credit Agreement to make a principal prepayment in the approximate amount
of $2,000,000, which the Borrower failed to make.
(4) The failure of the Borrower to make the principal
prepayment required by Section 2.06(b)(iii) of the Credit Agreement as aforesaid
constitutes on Event of Default under Section 6.01(a) of the Credit Agreement
(the "Section 2.06(b)(iii) Event of Default"), which the Borrower has
acknowledged by its letter to the Agent, dated February 23, 2000.
(5) Section 5.04 of the Credit Agreement sets forth the
financial covenants of the Borrower. On April 9, 2000, the Borrower delivered a
letter to the Agent confirming that the Borrower is in breach of the Section
5.04 covenants as of April 1, 2000. The breach of such covenants constitutes an
Event of Default under Section 6.01(c) of the Credit Agreement (the "Covenant
Events of Default").
(6) On April 14, 2000, the Agent delivered to the Borrower and
United States Trust Company of New York, the Indenture Trustee under the
Subordinated Debt Documents (the "Indenture Trustee"), a letter (the
"Subordinated Debt Notice") (i) confirming that, as a result of the Section
2.06(b)(iii) Event of Default, the Borrower was prohibited from making any
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payments whatsoever in respect of the Subordinated Notes, and (ii) notifying the
Company and the Indenture Trustee that if, but only if, the Section 2.06(b)(iii)
Event of Default is determined not to be a payment default and the Borrower is
not otherwise in payment default under the Credit Agreement, the Subordinated
Debt Notice shall constitute a Blockage Notice (as defined in the Subordinated
Debt Documents) based on the Covenant Events of Default.
(7) Pursuant to the terms and conditions set forth in that
certain Seventh Amendment to the Third Amended and Restated Credit Agreement,
dated as of April 28, 2000 (the "Seventh Amendment"), the Lenders agreed that,
provided the Borrower is working diligently to devise a restructuring plan
acceptable to its creditors and equity holders, the Lenders may, in their
discretion, continue to provide Working Capital Advances and issue Letters of
Credit on the conditions, for the limited period and for the limited purposes
set forth in the Seventh Amendment.
(8) Over the past several weeks, the Borrower and its equity
holders have been pursuing a potential restructuring of the Borrower and its
subsidiaries. In order to provide the Loan Parties with the necessary liquidity
with which to operate during such period, the Loan Parties requested and the
Lenders, subject to the terms and conditions set forth in the Eighth Amendment
to the Third Amended and Restated Credit Agreement, dated as of May 25, 2000
(the "Eighth Amendment"), consented through June 15, 2000 (a) to increase the
Available Amount of Letters of Credit and the available amount of Working
Capital Loans for the limited purposes set forth therein, and (b) to the
issuance by the Lenders, in their discretion, of Standby Letters of Credit in
the limited amounts, and for the limited purposes set forth therein.
(9) The Borrower is currently in the process of attempting to
effectuate its proposed restructuring plan. In order to provide the Loan Parties
with the necessary liquidity with which to operate while the Borrower undertakes
to implement its restructuring proposal, the Loan Parties have requested and the
Lenders, subject to the terms and conditions of the Credit Agreement as amended
hereby, have consented to the extension of the terms of the Eighth Amendment
through July 5, 2000.
SECTION 1. Extension of Amendment Period. The Amendment
Period, as defined in the Eighth Amendment, is hereby extended through and
including July 5, 2000.
SECTION 2. Conditions of Effectiveness of Amendment. This
Amendment shall become effective as of the date first above written when, and
only when, the following conditions precedent shall have been satisfied:
(a) The Agent shall have received counterparts of this
Amendment executed by the Borrower, the Agent and the required number
of Lenders.
(b) The Borrower shall have reimbursed or otherwise paid all
reasonable costs and expenses of the Agent paid or incurred in
connection with the Borrower or the Credit Agreement, and theretofore
presented to the Borrower for payment, including, without limitation,
in connection with the preparation, execution, delivery and
administration of this Amendment (including, without limitation, (a)
all outstanding fees and disbursements of (a) Shearman & Sterling and
Kramer Levin Naftalis & Frankel, LLC ("Kramer
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Levin") in their capacity as counsel to the Agent, and (b) Zolfo Cooper
LLP, in its capacity as consultant to the Agent's counsel ("Zolfo
Cooper").
SECTION 3. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Each Loan Party is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization.
(b) The execution, delivery and performance by the Borrower of
this Amendment and the Loan Documents, as amended hereby, to which it
is or is to be a party, is within the Borrower's corporate powers, has
been duly authorized by all necessary corporate action and does not (i)
contravene the Borrower's charter or by-laws, (ii) violate any law
(including, without limitation, the Securities Exchange Act of 1934, as
amended, and the Racketeer Influenced and Corrupt Organizations Chapter
of the Organized Crime Control Act of 1970), rule or regulation
(including, without limitation, Regulation X of the Board of Governors
of the Federal Reserve System), or any order, writ, judgment,
injunction, decree, determination or award, binding on or affecting the
Borrower or any of its Subsidiaries or any of their properties, (iii)
conflict with or result in the breach of, or constitute a default
under, any contract, loan agreement, indenture, mortgage, deed of
trust, lease or other instrument binding on or affecting the Borrower,
any of its Subsidiaries or any of their properties or (iv) except for
the Liens created under the Loan Documents, result in or require the
creation or imposition of any Lien upon or with respect to any of the
properties of the Borrower or any of its Subsidiaries.
(c) No authorization or approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body
or any other third party is required for the due execution, delivery,
recordation, filing or performance by the Borrower of this Amendment or
any of the Loan Documents, as amended hereby, to which it is or is to
be a party.
(d) With the exception of the Section 2.06(b)(iii) Event of
Default and the Covenant Events of Default described herein, there are
no other Defaults or Events of Default by Borrower as of the date
hereof.
(e) This Amendment has been duly executed and delivered by the
Borrower. This Amendment and each of the Loan Documents, as amended
hereby, to which the Borrower is a party are legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or other
laws relating to or limiting creditors' rights or by equitable
principles generally.
(f) There is no action, suit, investigation, litigation or
proceeding affecting the Borrower or any of its Subsidiaries
(including, without limitation, any Environmental Action) pending or
threatened before any court, governmental agency or arbitrator that (i)
would be reasonably likely to have a Material Adverse Effect or (ii)
purports to affect
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the legality, validity or enforceability of this Amendment or any of
the Loan Documents, as amended hereby.
SECTION 4. Definitions. For the purposes of this Amendment,
"Majority Working Capital Lenders" shall mean, at any time, Lenders owed or
holding at least 51% of the sum of (a) the aggregate principal amount of the sum
of all Working Capital Advances, Swing Line Advances and Letter of Credit
Advances outstanding at such time, (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time, and (c) the aggregate Unused Working
Capital Commitments at such time.
SECTION 5. Reference to and Effect on the Credit Agreement,
the Loan Documents, and the Subordinated Notes.
(a) On and after the effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Credit Agreement, and
each reference in the Notes and each of the other Loan Documents to
"the Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement, shall mean and be a reference to the
Credit Agreement, as amended by this Amendment.
(b) The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Amendment, are and shall
continue to be in full force and effect and are hereby in all respects
ratified and confirmed. Without limiting the generality of the
foregoing, the Collateral Documents and all of the Collateral described
therein do and shall continue to secure the payment of all Obligations
of the Loan Parties under the Loan Documents, in each case as amended
by this Amendment.
(c) The Borrower hereby agrees that (i) the Borrower is truly
and justly indebted to the Secured Parties, without defense,
counterclaim or offset of any kind in the full amount of the Secured
Obligations and (ii) the Secured Obligations are secured by valid,
perfected, enforceable and unavoidable first priority Liens and
security interests upon the Collateral senior to all other security
interests and liens upon the Collateral (except as set forth in the
Third Amended and Restated Security Agreement and the Credit
Agreement), granted by the Loan Parties to the Agent for the ratable
benefit of the Secured Parties.
(d) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power or remedy of any Lender Party or the Agent
under any of the Loan Documents, nor constitute a waiver of any
provision of any of the Loan Documents.
(e) This Amendment shall not constitute a waiver of the
Section 2.06(b)(iii) Event of Default, the Covenant Events of Default
or any other Default or Event of Default existing as of the date
hereof, nor shall this Amendment authorize or be deemed to authorize
any payment by the Borrower in respect of the Subordinated Notes or
terminate or be deemed to terminate the payment block existing in
respect of the Subordinated Notes.
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SECTION 6. Fees; Costs and Expenses. The Borrower agrees to
pay on demand all reasonable costs and expenses of the Agent in
connection with the preparation, execution, delivery and
administration, modification and amendment of this Amendment and the
other instruments and documents to be delivered hereunder (including,
without limitation, the reasonable fees and disbursements of counsel
and financial advisor to the Agent) in accordance with the terms of
Section 8.04 of the Credit Agreement.
SECTION 7. Execution in Counterparts. This Amendment may be
executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute but one and the same agreement. Delivery of an executed
counterpart of a signature page to this Amendment by telecopier shall
be effective as delivery of a manually executed counterpart of this
Amendment.
SECTION 8. Governing Law. This Amendment shall be governed by,
and construed in accordance with, the laws of the State of New York.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
GLENOIT CORPORATION
By /s/ Thomas J. O'Gorman
Name: Thomas J. O'Gorman
Title: President and CEO
AGENT
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BANQUE NATIONALE DE PARIS,
as Agent and as a Lender
By /s/ David A. Barcus
Name: David A. Barcus
Title: Director
By /s/ Elie Doft
Name: Elie Doft
Title: Associate
LENDERS
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BOEING CAPITAL CORPORATION
By /s/ David Nelson
Name: David Nelson
Title: Special Credits
CENTURA BANK
By /s/ Lowry D. Perry
Name: Lowry D. Perry
Title: Bank Officer
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COMERICA
By /s/ David W. Day
Name: David W. Day
Title: Vice President
DEUTSCHE FINANCIAL SERVICES
By /s/ Philip G. Porcher IX
Name: Philip G. Porcher IX
Title: Vice President
FIRST SOURCE FINANCIAL LLP,
By First Source Financial, Inc., as its
Agent/Manager
By /s/ Robert Horak
Name: Robert Horak
Title: Vice President
FLEET BANK, N.A.
By /s/ Michael S. Haines
Name: Michael S. Haines
Title: Senior Vice President
FLOATING RATE PORTFOLIO
By: INVESCO Senior Secured Management,
Inc., as attorney in fact
By /s/ Gregory Stoeckle
Name: Gregory Stoeckle
Title: Authorized Signatory
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LASALLE BANK NATIONAL ASSOCIATION
By /s/ Margaret P. Hager
Name: Margaret P. Hager
Title: First Vice President
KZH ING-1 LLC
By /s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
KZH ING-2 LLC
By /s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
KHZ ING-3 LLC
By /s/ Peter Chin
Name: Peter Chin
Title: Authorized Agent
METROPOLITAN LIFE
INSURANCE COMPANY
By /s/ Jacqueline D. Jenkins
Name: Jacqueline D. Jenkins
Title: Director
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VAN KAMPEN SENIOR FLOATING
RATE FUND
By /s/ Darvin Pierce
Name: Darvin Pierce
Title: Vice President
VAN KAMPEN PRIME RATE
INCOME TRUST
By /s/ Darvin Pierce
Name: Darvin Pierce
Title: Vice President
FLEET BUSINESS CREDIT CORPORATION
By /s/ Mark Pickering
Name: Mark Pickering
Title: Vice President
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