9
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended December 31, 1994
Commission File Number 33-11479
SYNTHETIC INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 58-1049400
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
309 LaFayette Road, Chickamauga, Georgia 30707
(Address of principal executive offices) (Zip Code)
(706) 375-3121
(Registrant's telephone number, including area code)
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ____
State the aggregate market value of the voting stock held by non-affiliates
of the registrant at February 10, 1995.
Common Stock, $1.00 par value -- $0
Indicate the number of shares outstanding of each of the registrant's
classes of common stock as of the latest practicable date:
Outstanding at
Class February 11, 1995
Common Stock, $1.00 par value 49.95
PART I-FINANCIAL INFORMATION SYNTHETIC INDUSTRIES, INC.
ITEM 1. FINANCIAL INFORMATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
DECEMBER 31, SEPTEMBER 30,
ASSETS 1994 1994
CURRENT ASSETS:
Cash $ 116 $ 117
Accounts receivable, net of allowance for
doubtful accounts of $1,255 and $1,201 36,842 39,094
Inventory (Note 3) 37,050 32,520
Other current assets (Note 4) 11,580 10,859
TOTAL CURRENT ASSETS 85,588 82,590
PROPERTY, PLANT AND EQUIPMENT, net (Note 5) 118,057 115,050
DEFERRED FINANCING AND ORGANIZATION COSTS,
net of accumulated amortization
of $4,970 and $4,788 7,064 7,246
EXCESS OF PURCHASE PRICE OVER NET
ASSETS ACQUIRED
AND OTHER INTANGIBLES (Note 6) 82,433 83,047
$293,142 $287,933
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts payable $ 20,949 $ 18,767
Accrued expenses and other current
liabilities 4,402 6,944
Income taxes payable - 482
Interest payable 1,741 6,247
Current maturities of long-term debt
(Note 7) 6,036 6,036
TOTAL CURRENT LIABILITIES 33,128 38,476
LONG-TERM DEBT (Note 7) 183,233 172,490
DEFERRED INCOME TAXES 21,254 21,150
237,615 232,116
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
Common stock, $1 par value:
Authorized, issued and
outstanding 49.95 shares - -
Additional paid-in capital 69,300 69,300
Cumulative translation adjustments 20 26
Deficit (13,793) (13,509)
TOTAL STOCKHOLDER'S EQUITY 55,527 55,817
$293,142 $287,933
See notes to consolidated financial statements
SYNTHETIC INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
FOR THREE MONTHS ENDED DECEMBER 31
1994 1993
Net sales $58,012 $51,694
Costs and expenses:
Cost of sales 42,027 33,807
Selling expenses 5,455 4,983
General and administrative expenses 4,608 3,725
Amortization of organization costs
and intangibles 635 634
52,725 43,149
Operating income 5,287 8,545
Other expenses:
Interest expense 5,418 5,079
Amortization of deferred financing
costs 182 187
5,600 5,266
(Loss) income before income tax
(benefit) provision (313) 3,279
Income tax (benefit) provision (Note 8) (29) 1,483
NET (LOSS) INCOME $ (284) $ 1,796
See notes to consolidated financial statements
SYNTHETIC INDUSTRIES, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
THREE MONTHS ENDED DECEMBER 31,
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (284) $ 1,796
Adjustments to reconcile net (loss) income
to net cash (used in) provided by operations:
Depreciation 2,784 2,274
Amortization of deferred financing
and organization costs and
intangibles 817 821
Provision for bad debts (5) 181
Deferred income taxes (70) 173
Change in assets and liabilities:
Decrease in accounts receivable 2,198 6,682
Increase in inventory (4,530) (2,580)
(Increase) decrease in other
current assets (547) 312
Increase in deferred financing costs - (132)
Increase in intangibles (21) -
Increase (decrease) in accounts
payable 2,182 (1,618)
Decrease in accrued expenses and
other current liabilities (2,542) (871)
(Decrease) increase in income
taxes payable (482) 841
Decrease in interest payable (4,506) (4,423)
Cash (used in) provided by
operating activities (5,006) 3,456
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and
equipment (5,791) (3,061)
Cash used in investing activities (5,791) (3,061)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments under term loan (1,500) (1,500)
Net borrowings under revolving
credit line 12,252 1,052
Repayments of other long term obligations (9) (8)
Cash provided by (used in)
financing activities 10,743 (456)
Effect of exchange rate changes
on cash 53 (3)
NET DECREASE IN CASH (1) (64)
CASH AT BEGINNING OF PERIOD 117 253
CASH AT END OF PERIOD $ 116 $ 189
SUPPLEMENTAL SCHEDULE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $ 9,924 $ 9,533
Income taxes 899 -
See notes to consolidated financial statements
SYNTHETIC INDUSTRIES, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS OF DOLLARS)
(INFORMATION AS OF DECEMBER 31, 1994 AND FOR THE
PERIODS ENDING DECEMBER 31, 1994 AND 1993 IS UNAUDITED)
1.ORGANIZATION
Synthetic Industries, Inc. (the "Company"), a wholly owned subsidiary of
Synthetic Industries L.P., a Delaware limited partnership (the "Partnership"),
manufactures and markets a wide range of polypropylene-based technical textile.
These include primary and secondary carpet backing, construction/civil
engineering products and technical textiles.
2.INTERIM CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements as of December 31, 1994 and for the three
month periods ended December 31, 1994 and 1993 included herein have been
prepared, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. In the opinion of management, all adjustments
(consisting of normal recurring accruals) necessary for a fair presentation of
the financial position at December 31, 1994 and 1993, and the results of
operations for the three months then ended have been made on a consistent basis.
Certain information and footnote disclosures included in consolidated financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
management believes that the disclosures herein are adequate to make the
information presented not misleading. Certain reclassifications have been made
to previous years' consolidated financial statements to conform to current
classifications. It is suggested that these consolidated financial statements
be read in conjunction with management's discussion and analysis of financial
condition and results of operations and the consolidated financial statements of
the Company's Form 10-K for the fiscal year ended September 30, 1994. Operating
results for the three months ended December 31, 1994 may not necessarily be
indicative of the results that may be expected for the full year.
3.INVENTORY
December 31, September 30,
1994 1994
Finished goods $22,068 $ 20,580
Work in process 6,144 5,263
Raw materials 8,838 6,677
$37,050 $ 32,520
4.OTHER CURRENT ASSETS
December 31, September 30,
1994 1994
Prepaid supplies $ 5,747 $ 6,416
Prepaid income taxes 389 -
Income tax receivable 550 550
Deferred income tax
benefits 3,259 3,085
Other 1,635 808
$ 11,580 $ 10,859
5.PROPERTY, PLANT AND EQUIPMENT
December 31, September 30,
1994 1994
Land $ 3,061 $ 3,061
Buildings and improvements 21,183 21,183
Machinery and equipment and
leasehold improvements 147,123 141,332
171,367 165,576
Accumulated depreciation 53,310 50,526
$118,057 $ 115,050
6.EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED AND OTHER
INTANGIBLES
December 31, September 30,
1994 1994
Excess of purchase price over
net assets acquired 99,818 99,818
Intangible assets 4,506 4,485
104,324 104,303
Accumulated amortization 21,891 21,256
$82,433 $ 83,047
Excess of purchase price over net assets acquired is assessed for recoverability
on a regular basis. In evaluating the value and future benefits of goodwill,
its carrying value will be reduced by the excess, if any, of the balance over
management's best estimate of undiscounted future operating income before
amortization of the related intangible assets over the remaining amortization
period.
7.LONG-TERM DEBT
December 31, September 30,
1994 1994
Secured revolving credit facility:
Secured revolving credit
portion 28,381 16,129
Term loan portion 19,500 21,000
12_% Senior subordinated
debentures 140,000 140,000
Other 1,388 1,397
189,269 178,526
Less current portion 6,036 6,036
Total long term portion $183,233 $ 172,490
A.THE SECURED REVOLVING CREDIT FACILITY
On March 15, 1993, the Company and its lenders entered into a Second
Amended and Restated Revolving Credit Agreement (as amended, the "Amended
Credit Facility"). The Company borrowed $30 million under the term loan
portion of the Amended Credit Facility. Such term loan borrowing is
payable over a 60-month period which began on April 1, 1993, in equal
installments of $500, plus interest.
The revolving credit loan portion of the Amended Credit Facility provides
for availability based on a borrowing formula consisting of 85% of
eligible accounts receivable and 50% of eligible inventory, subject to
certain limitations. On December 28, 1994, the Company and its lenders
entered into a seventh amendment to the Amended Credit Facility. The
amendment increased the maximum amount available for borrowing under the
Amended Credit Facility from $30 million to $35 million, less any amounts
outstanding under the letter of credit portion of the Amended Credit
Facility. The Company and its lenders entered into a Third Amended and
Restated Credit Agreement on January 13, 1995 (see Note 9).
Interest on borrowings under the Amended Credit Facility is calculated at
a rate equal to the agent bank's rate plus 1 1/4% (9 3/4% at December 31,
1994).
The Company may, at its option and with certain restrictions, convert a
portion of its advances under the term or revolving credit loan portion of
the Amended Credit Facility into borrowings in Eurodollars. Interest on
Eurodollar borrowings is calculated based on the Interbank Eurodollar rate
plus 3% for term loan advances. The interest rate on Eurodollar
borrowings for revolving credit advances is one-quarter of a percent less
than the term loan advance rate.
The Amended Credit Facility provides for borrowings of up to $3 million
under letters of credit. Such borrowings reduce the amount otherwise
available under the revolving credit loan portion of the Amended Credit
Facility. The Company is required to pay a .375% fee on the unused
portion of the commitment and an agency fee of $150 per annum.
B.SENIOR SUBORDINATED DEBENTURES
On December 14, 1992, the Company issued $140,000 of 12_% Senior
Subordinated Debentures (the "Debentures") due 2002, which represent
unsecured obligations of the Company. The Debentures are redeemable at
the option of the Company at any time on or after December 1, 1997,
initially at 106.375% of their principal amount , together with accrued
interest, with declining redemption prices thereafter. Interest on the
Debentures is payable semiannually on June 1 and December 1. Interest
payments on the Debentures commenced on June 1, 1993.
8.INCOME TAXES
The (benefit) provision for income taxes is as follows:
Three Months Ended December 31,
1994 1993
Current:
Federal $ 41 1,080
State - 230
41 1,310
Deferred:
Federal 114 166
State (212) 7
(70) 173
Total (benefit)\provision $ (29) $ 1,483
The federal income tax provision for the three months ended December 31, 1994
and 1993 reflect the non-deductibility of certain expenses for income tax
purposes such as amortization of goodwill. Deferred income taxes result from
temporary differences between tax bases of assets and liabilities and their
reported amounts in the financial statements.
9. SUBSEQUENT EVENT
On January 13, 1995, the Company and its lenders entered into a Third Amended
and Restated Revolving Credit Agreement (the "Third Credit Facility"). Under
the term portion of the Third Credit Facility, the Company borrowed $30,000,
payable over a 60-month period which began on February 1, 1995, in equal
installments of $500, plus interest, calculated at a rate equal to the agent
bank's base rate of 7.5% plus 1% (8.5% at December 31, 1994). Under the
revolving credit loan portion, the maximum amount available for borrowing is
$35,000. Interest on borrowings is at the agent bank's base rate plus .75%.
The Third Credit Facility will terminate on January 1, 2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS)
LIQUIDITY AND CAPITAL RESOURCES
During the three months ended December 31, 1994, cash used in operating
activities was $5,006. The Company has planned capital expenditures of $13
million during fiscal 1995 to be financed through operations and bank
borrowings. Of this amount, $5,791 has been expended through December 31, 1994,
including $4,750 relating to the payoff of leased equipment which occurred in
December. At December 31, 1994, there was $4,404 available for borrowing under
the Amended Credit Facility.
Management's plans indicate that current and future operations will provide
sufficient cash flow to satisfy the debt service requirements of the long-term
debt obligations, including bank borrowings and lease commitments.
The average cost of polypropylene was higher in the first quarter of fiscal
1995 than in the first quarter of fiscal 1994. The Company believes this
increase was primarily due to increased demand throughout the polypropylene
market coupled with the inadequate expansion of polypropylene manufacturing
capacity. The Company expects that polypropylene costs will further increase
during fiscal 1995. Polypropylene costs are approximately 50% of cost of goods
sold, accordingly, increases in the price of polypropylene without offsetting
selling price increases could have a significant negative effect on the
Company's results of operations and financial condition. As a result of the
level of competition, the Company, to date, has been able to pass through only a
portion of the polypropylene cost increases through higher selling prices of
certain product lines. To date, the Company has not experienced any shortage of
supply of polypropylene; however, continued increases in demand or major supply
disruptions without offsetting increases in manufacturing capacities could cause
the Company future supply shortages. Management anticipates that additional
polypropylene manufacturing facilities will be completed and commence production
during calendar years 1995 through 1997. Historically, the creation of
additional facilities has helped to relieve supply pressures.
RESULTS OF OPERATIONS FOR THE FIRST QUARTER
Net sales for the three months ended December 31, 1994 were $58,012 compared
to $51,694 for the three months ended December 31, 1993, an increase of 12%.
This increase was principally due to a 14% increase in sales of carpet backing
and a 26% increase in sales of construction/civil engineering products.
Carpet backing sales were $31,158 for the first quarter of fiscal 1995, an
increase of $3,841 or 14% from the first quarter of fiscal 1994. This increase
was primarily due to increased sales volumes.
Construction/civil engineering product sales increased to $15,470 for the
first quarter of fiscal 1995 from $12,275 for the same period in fiscal 1994, an
increase of $3,195 or 26%. This increase is primarily attributable to the
increased sales of woven and nonwoven geotextiles. Additionally, there was a
26% increase in Fibermesh sales during the first quarter of fiscal 1995 compared
to the same period in fiscal 1994.
Technical textiles sales were $11,384 for the first quarter of fiscal 1995
compared to $12,102 for the same period of last year for a decrease of $718 or
6%. This decrease was due to the phase-out of several industrial product lines
as the equipment was redirected to the additional production of woven
geotextiles.
Gross profit for the first quarter of fiscal 1995 decreased to $15,985 from
$17,887 or 11% from the first quarter of fiscal 1994. As a percent of sales,
gross profit decreased to 28% from 35% primarily due to increased raw material
costs.
Direct selling expenses were $5,455 (9% of net sales) in the first quarter of
fiscal 1995 compared to $4,983 (10% of net sales) in the first quarter of
fiscal 1994. This increase is due to increased activities associated with
higher sales volumes. General and administrative expenses of $4,608 (8% of
sales) for the first quarter of fiscal 1995 increased $883 over the first
quarter of fiscal 1994 due to higher expenses in three major areas; Human
Resources, Research and Development and Marketing. These increased activities
are directly related to the Company's future growth plans.
Operating income decreased to $5,287 during the first quarter of fiscal 1995
(9% of net sales) from $8,545 during the first quarter of fiscal 1994 (17% of
net sales). This decrease was primarily due to higher raw material costs.
Total interest expense for the first quarter of fiscal 1995 increased by $339
from the first quarter of fiscal 1994 due to average higher total debt
outstanding.
OTHER INFORMATION
NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 10-Q
(a) Exhibits
Amendment 7 dated December 28, 1994 to the Second Amended and Restated
Revolving Credit Agreement
(b) Reports of Form 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SYNTHETIC INDUSTRIES, INC.
By: /s/ Leonard Chill
Leonard Chill
President
Dated: February 10,1995
By: /s/ Jon P. Beckman
Jon P. Beckman
Chief Financial Officer
Dated: February 10, 1995
t:\bkboston\syntheti\3damdsch.exe
AMENDMENT NO. 7
to
SECOND AMENDED AND RESTATED REVOLVING
CREDIT AND SECURITY AGREEMENT
dated as of March 15, 1993
THIS AMENDMENT NO. 7 dated as of December 28, 1994 is made by and
among Synthetic Industries, Inc., a Delaware corporation (the "Borrower"), The
First National Bank of Boston ("Bank of Boston") and SouthTrust Bank of Georgia,
N.A. ("SouthTrust" and together with Bank of Boston, the "Lenders"), and Bank of
Boston as agent (the "Agent") for the Lenders.
Preliminary Statements
The Borrower, the Lenders and the Agent are parties to a Second
Amended and Restated Revolving Credit and Security Agreement dated as of March
15, 1993, as amended by First Amended Schedule I dated April 15, 1993, Amendment
No. 2 dated as of May 10, 1993, Second Amended Schedule I dated September 3,
1993, Amendment No. 4 dated as of October 1, 1993, Amendment No. 5 dated as of
February 25, 1994 (effective October 1, 1993), and Amendment No. 6 dated as of
August 10, 1994 (the "Credit Agreement"; terms defined therein and not otherwise
defined herein being used herein as therein defined).
The Borrower has requested, and the Lenders and the Agent have agreed,
upon and subject to the terms, conditions and provisions of this Amendment,
further to amend certain provisions of the Credit Agreement to temporarily
increase the Revolving Credit Facility. The parties have further agreed to
modify the Credit Agreement to permit the Lenders to hold different percentage
interests in the Revolving Credit Facility and the Term Loan and Bank of Boston
has given notice of its intention to assign to Sanwa Business Credit Corporation
("Sanwa") up to $10,000,000 in principal amount of Bank of Boston's share of the
Revolving Credit Facility and the outstanding principal amount of the Term Loan.
The parties desire to set forth such related agreements in a single set of
documents.
NOW, THEREFORE, in consideration of the Credit Agreement, the Loans
made by the Lenders and outstanding thereunder, the mutual promises hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendments to Credit Agreement. The Credit Agreement is
hereby amended, subject to the provisions of Section 2 hereof, effective as of
the date hereof, by
(a) amending Section 1.1 Definitions by
(i) amending the definition "Revolving Credit Facility" in its
entirety to read as follows:
"Revolving Credit Facility" means an amount equal to $30,000,000,
EXCEPT that during the period beginning December 28, 1994 and ending
February 28, 1995, "Revolving Credit Facility" means an amount equal to
$35,000,000.
(ii) adding thereto in proper alphabetical order the following
additional definition:
"Combined Lender Percentage" means, as to each Lender at any time, the
result (expressed as a percentage) obtained by dividing (a) the sum of such
Lender's Commitment plus the outstanding principal amount of the Term Loan
held by such Lender at such time by (b) the sum of the aggregate amount of
all Commitments plus the total outstanding principal amount of the Term
Loan at such time.
(b) amending Section 3.13 Pro Rata Treatment; Settlement between Agent
and Lenders by amending subsection (a) thereof in its entirety to read as
follows:
(a) Each Borrowing under the Revolving Credit Facility shall be made
pro rata from the Lenders on the basis of their respective Commitment
Percentages. Each payment or prepayment of principal and interest on the
Loans shall be made to the Agent for the account of the Lenders and (i) in
the case of the Term Loan shall be applied by the Agent ratably in the same
proportion that the outstanding principal amount of the Term Loan held by
each Lender immediately prior to such payment or prepayment bears to the
aggregate outstanding principal amount of the Term Loan at such time and
(ii) in the case of the Revolving Credit Loan shall be applied by the Agent
ratably on the basis of the respective Commitment Percentages of the
Lenders in effect on the date of such payment or prepayment; PROVIDED,
HOWEVER, that if any Lender shall fail or refuse to make available to the
Agent the Advance to be made by such Lender as part of any Borrowing under
the Revolving Credit Facility and the provisions of SECTION 2.2(C) are not
applicable, then all amounts thereafter received by the Agent for
application to repayment of the principal of or payment of interest on the
outstanding Revolving Credit Loan shall be paid by the Agent (x) as to
principal, to the Lender, if any, the aggregate principal amount of whose
outstanding Advances under the Revolving Credit Facility exceeds such
Lender's Commitment Percentage of the total principal amount of the
outstanding Revolving Credit Loan until such excess is eliminated and (y)
as to interest, to the Lenders ratably in the same proportion that the
Advances under the Revolving Credit Facility outstanding from each of them
bears to the total outstanding Revolving Credit Loan.
(c) amending subsection (a) of Section 3.15 Additional Lender by
deleting therefrom the phrase "to execute and deliver in exchange for the
existing Notes new Notes reflecting and giving effect to the adjustments to the
respective Commitment Percentages of the Lenders" and substituting therefor the
phrase "to execute and deliver in exchange for the existing Notes new Notes in
principal amounts reflecting and giving effect to the adjustments to the
respective Commitment Percentages of, and outstanding Term Loan held by, the
Lenders";
(d) amending Section 12.5 Expenses and Indemnification by deleting
therefrom the phrase "Commitment Percentage" appearing therein and substituting
therefor the phrase "Combined Lender Percentage";
(e) amending Section 13.5 Pro-Rata Participation by deleting from
subsection (a)(ii) thereof the phrase "Commitment Percentage" appearing therein
and substituting therefor the phrase "Combined Lender Percentage";
(f) amending Section 13.12 Amendments in its entirety to read as
follows:
Section 13.12 Amendments. No amendment or waiver of any provision of
this Agreement or the Notes, nor consent to any departure by the Borrower
therefrom, shall in any event be effective unless the same shall be in
writing signed by the Majority Lenders and, in the case of an amendment, by
the Borrower, and then such waiver or consent shall be effective only in
the specified instance and for the specific purpose for which given;
PROVIDED, HOWEVER, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders and, in the case of an amendment, by
the Borrower, do any of the following: (a) waive any of the conditions
specified in ARTICLE 4, (b) increase the Commitments or Commitment
Percentages of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, or rate of
interest applicable to, the Notes or reduce any fees or other amounts
payable to the Lenders hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Notes or of any fees or other
amounts payable to the Lenders hereunder, (e) release any material
Collateral or any Real Estate, other than in accordance with the provisions
of this Agreement or the applicable Mortgage, as the case may be, (f)
change the percentage of the aggregate unpaid principal amount of the Loans
or the Combined Lender Percentages which shall be required for the Lenders
or any of them to take any action hereunder (g) amend the definition
"Borrowing Base" or increase any advance rate thereunder or (h) amend this
SECTION 13.12; and PROVIDED, FURTHER, that no amendment, waiver or consent
shall, unless in writing and signed by the Agent in addition to the Lenders
required above to take such action, affect the rights or duties of the
Agent under this Agreement or any Note or any other Loan Document.
(g) the Credit Agreement is further amended by amending Schedule I
thereto to read in the form of Annex A hereto.
Section 2. Effectiveness of Amendment. This Amendment shall
become effective upon receipt by the Agent of the following, each in form and
substance satisfactory to the Agent:
(a) at least seven copies of this Amendment and of the Third
Amended Schedule I to the Credit Agreement in the form of Annex A hereto,
each duly executed and delivered by the Borrower and each Lender,
(b) at least seven copies of the Third Amended Schedule I to the
Credit Agreement in the form of Annex A hereto duly executed and delivered
by Sanwa,
(c) Revolving Credit Notes and Term Notes, each duly executed and
delivered by the Borrower, payable to the order, respectively, of Bank of
Boston and Sanwa, each in the amount of its respective Commitment and
outstanding Term Loan amount as reflected on said Third Amended Schedule I
and a Term Note, duly executed and delivered by the Borrower, payable to
the order of SouthTrust Bank of Georgia, N.A. in its outstanding Term Loan
amount as reflected on said Third Amended Schedule I,
(d) a certificate of the chief executive officer or chief financial
officer of the Borrower to the effect that (i) all representations and
warranties of the Borrower set forth in the Credit Agreement and the other
Loan Documents are true and correct on and as of the effective date of this
Amendment, both before and after giving effect to this Amendment, and (ii)
no Default or Event of Default has occurred and is continuing, and such
statements shall be true,
(e) a reliance letter addressed to Sanwa from counsel for the
Borrower with respect to each of the opinions delivered in connection with
the original closing of the Credit Agreement, and
(f) a certificate of the chief executive officer and chief
financial officer of the Borrower in the form attached hereto as Annex B.
Section 3. Effect of Amendment. (a) From and after the
effectiveness of this Amendment, all references in the Credit Agreement and in
any other Loan Document to "this Agreement," "the Credit Agreement,"
"hereunder," "hereof" and words of like import referring to the Credit
Agreement, shall mean and be references to the Credit Agreement as amended by
this Amendment. Except as expressly amended hereby, the Credit Agreement and
all terms, conditions and provisions thereof remain in full force and effect and
are hereby ratified and confirmed. 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 or the Agent under any of the
Loan Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
(b) Upon the effectiveness of this Amendment, Sanwa shall become a
"Lender" under and for all purposes of the Credit Agreement.
Section 4. Counterpart Execution; Governing Law.
(a) 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 and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
(b) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Georgia.
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.
SYNTHETIC INDUSTRIES, INC.
[Corporate Seal] By _Leonard Chill_______
Leonard Chill
ATTEST: President
_Jon P. Beckman______
Secretary
THE FIRST NATIONAL BANK OF
BOSTON, as the Agent and as a Lender
By _William C. Purinton___
William C. Purinton
Vice President
SOUTHTRUST BANK OF GEORGIA, N.A.
By _Laura J. Ireland______
Laura J. Ireland
Vice President
THIRD AMENDED SCHEDULE I
NO. 7
LENDERS
Outstanding
Commitment Term Loan
Commitment Percentage Amount Lender:
Executed
and delivered this 28th day
of December 1994.
$21,078,000 60.22286% $11,047,000 THE FIRST NATIONAL BANK
OF BOSTON
By:_William C. Purinton
William C. Purinton
Vice President
Address:
100 Federal Street
Boston, MA 02110
$ 7,500,000 21.42857% $4,875,000 SOUTHTRUST BANK OF GEORGIA,
N.A.
By:_Laura J. Ireland
Laura J. Ireland
Vice President
Address:
600 West Peachtree St.
22nd Floor
Atlanta, GA 30308
$ 6,422,000 18.34857% $3,578,000 SANWA BUSINESS CREDIT
CORPORATION
By:_Peter L. Skavla
Peter L. Skavla
Vice President
Address:
500 Glenpointe Centre West
4th Floor
Teaneck, NJ 07666
By their execution and delivery of this THIRD AMENDED SCHEDULE I to the
Second Amended and Restated Revolving Credit and Security Agreement
dated as of March 15, 1993, as amended by First Amended Schedule I dated
as of April 15, 1993, Amendment No. 2 dated as of May 10, 1993, Second
Amended Schedule I dated as of September 3, 1993, Amendment No. 4 dated
as of October 1, 1993, Amendment No. 5 dated as of February 25, 1994,
Amendment No. 6 dated as of August 10, 1994, Amendment No. 7 of even
date herewith and by this Third Amended Schedule I, among Synthetic
Industries, Inc., as Borrower, the Lenders named therein and The First
National Bank of Boston, as Agent, each of the above agrees to be or
remain parties thereto as Lenders and hereby accepts the benefits
thereof and agrees to be bound by the terms thereof as Lenders.
THIS THIRD AMENDED SCHEDULE I REPLACES AND SUPERSEDES THE SECOND AMENDED
SCHEDULE I TO THE AFORESAID SECOND AMENDED AND RESTATED REVOLVING CREDIT
AND SECURITY AGREEMENT.
Accepted and agreed to this 28th day of December 1994.
SYNTHETIC INDUSTRIES, INC.
By: _Leonard Chill
Leonard Chill
President
CERTIFICATE OF THE BORROWER
We, as duly authorized officers of Synthetic Industries, Inc., a
Delaware corporation (the "Borrower"), do hereby certify to SANWA BUSINESS
CREDIT CORPORATION that to the best of our knowledge and based upon an
examination sufficient to enable us to make an informed statement:
1. The undersigned Leonard Chill and Jon P. Beckman are President
and Secretary, respectively, of the Borrower and in such capacity are authorized
and empowered to issue this Certificate for and on behalf of the Borrower.
2. All of the representations and warranties made by or on behalf of
the Borrower under the Second Amended and Restated Revolving Credit and Security
Agreement dated as of March 15, 1993, as amended by First Amended Schedule I
dated April 15, 1993, Amendment No. 2 dated as of May 10, 1993, Second Amended
Schedule I dated as of September 3, 1993, Amendment No. 4 dated as of October 1,
1993, Amendment No. 5 dated as of February 25, 1994, Amendment No. 6 dated as of
August 10, 1994, and Amendment No. 7 and Third Amended Schedule I, each of even
date herewith, among the Borrower, as borrower, The First National Bank of
Boston and certain other lenders, as lenders, and The First National Bank of
Boston, as agent for the lenders (the "Credit Agreement"; unless otherwise
defined herein, terms used herein shall have the meanings ascribed thereto in
the Credit Agreement) are true and correct on and as of the date hereof, both
with and without giving effect to any Loans to be made on the date hereof and
the application of the proceeds thereof.
3. The Borrower has performed and complied with all covenants,
agreements and conditions contained in the Credit Agreement which are required
to be performed or complied with before or on the date hereof.
4. There exists on the date hereof no Default or Event of Default as
specified in Article 11 of the Credit Agreement.
5. As of the date hereof, neither the Credit Agreement nor any other
Loan Document, has been rescinded, terminated or withdrawn and no provision
therein as been amended or waived by the Borrower or the Lenders.
6. The corporate actions of the Borrower referred to in Section
4.1(a)(ii) of the Credit Agreement are in full force and effect and have not
been amended, rescinded or terminated and the incumbency of the officers or
other persons authorized to act on behalf of the Borrower are as stated in the
Certificates of Incumbency delivered on March 17, 1993 pursuant to Section
4.1(a)(iii) of the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seal on this 28th day of December 1994.
Leonard Chill (SEAL)
Leonard Chill, President
Jon P. Beckman (SEAL)
Jon P. Beckman, Secretary
SECOND AMENDED AND RESTATED
REVOLVING CREDIT NOTE
(AS AMENDED PURSUANT TO THIRD AMENDED SCHEDULE I)
$21,078,000.000 Atlanta, Georgia
December 28,1994
FOR VALUE RECEIVED, the undersigned SYNTHETIC INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of THE FIRST NATIONAL BANK OF BOSTON (the "Lender"), on March 1, 1998 the
principal amount of TWENTY-ONE MILLION SEVENTY-EIGHT THOUSAND AND NO/100 DOLLARS
($21,078.000.00), or, if less, the aggregate unpaid balance of all Advances
under the Revolving Credit Facility (each as defined in the Credit Agreement
referred to below) made by the Lender to the Borrower pursuant to the Credit
Agreement (as hereinafter defined), the provisions of which are hereby
incorporated herein by reference. All payments made under this Revolving Credit
Note shall be made in lawful money of the United States of America in federal or
other immediately available funds.
The Borrower also unconditionally promises to pay interest on the unpaid
principal amount of the Revolving Credit Note for each day from the date hereof
until such principal amount is paid in full at the rates per annum and on the
dates specified in the Credit Agreement applicable from time to time in
accordance with the provisions thereof. Nothing contained in this Revolving
Credit Note or in the Credit Agreement shall be deemed to establish or require
the payment of a rate of interest in excess of the maximum rate permitted by any
Applicable Law. In the event that any rate of interest required to be paid
hereunder exceeds the maximum rate permitted by Applicable Law, the provisions
of the Credit Agreement relating to the payment of interest under such
circumstances shall control.
Both principal and interest are payable in lawful money of the United
States of America to the Agent for the account of the Lender at the Agent's
office at 100 Federal Street, Boston, Massachusetts 02110, in federal or other
immediately available funds.
This Second Amended and Restated Revolving Credit Note is made by the
Borrower and given to the Lender in partial substitution for that certain Second
Amended and Restated Revolving Credit Note dated September 3, 1993 in the
original principal amount of $22,500,000.00 payable to the Lender but not in
extinguishment of the debt evidenced thereby, in connection with the Lender's
assignment of a portion of its Commitment to Sanwa Business Credit Corporation.
For the purposes of this Revolving Credit Note, "Credit Agreement" means
the Second Amended and Restated Revolving Credit and Security Agreement dated as
of March 15, 1993, as amended by First Amended Schedule I dated as of April
15,1993, Amendment No. 2 dated as of May 10, 1993, Second Amended Schedule I
dated as of September 3,1993, Amendment No. 4 dated as of October 1, 1993,
Amendment No. 5 dated as of February 25, 1994, Amendment No. 6 dated as of
August 10, 1994, and Amendment No. 7 and Third Amended Schedule I, each of even
date herewith, among the Borrower, the Agent, the Lender and the other lenders
identified therein, as the same may be amended, modified, supplemented or
restated from time to time.
Reference is made to the Credit Agreement for the definitions of other
terms used in this Second Amended and Restated Revolving Credit Note.
Presentment for payment, demand, protest and notice of demand, notice of
dishonor and notice of non-payment and all other notices are hereby waived by
the Borrower.
This Second Amended and Restated Revolving Credit Note is one of the
Revolving Credit Notes under, is secured in accordance with the terms of, and is
entitled to the benefits of, the Credit Agreement, which, among other things,
contains provisions with respect to security for the indebtedness evidenced
hereby, the acceleration of the maturity and prepayments of the principal of
this Revolving Credit Note prior to maturity, all upon the terms and conditions
therein specified.
The Borrower hereby agrees to pay on demand all costs and expenses incurred
in collecting the Borrower's obligations hereunder or in enforcing or attempting
to enforce any of the Lender's rights hereunder, including, but not limited to,
reasonable attorneys' fees and expenses if collected by or through an attorney,
whether or not suit is filed.
This Second Amended and Restated Revolving Credit Note shall be governed by
and construed in accordance with the laws of the State of Georgia.
SYNTHETIC INDUSTRIES, INC.
[CORPORATE SEAL}
By Leonard Chill
Leonard Chill
ATTEST: President
By: Jon P. Beckman
Jon P. Beckman
Secretary
SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE
(AS AMENDED PURSUANT TO THIRD AMENDED SCHEDULE I)
$11,047,000.000 Atlanta, Georgia
December 28,1994
FOR VALUE RECEIVED, the undersigned SYNTHETIC INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of THE FIRST NATIONAL BANK OF BOSTON (the "Lender"), on March 1, 1998 the
principal sum of ELEVEN MILLION FORTY-SEVEN THOUSAND AND NO/100 DOLLARS
($11,047.000.00) constituting the aggregate Advances made by the Lender under
the Term Loan Facility (each as defined in the Credit Agreement referred to
below), in 39 consecutive monthly installments each equal to the result obtained
by multiplying $500,000 by a fraction, the numerator of which is equal to the
outstanding principal amount of the Lender's Advances evidenced by this Note and
the denominator of which is equal to the total outstanding principal amount of
the Term Loan before giving effect to such installment, beginning January 1,
1995, PROVIDED that the final installment shall be in the amount of the then
outstanding aggregate unpaid balance of such Advances.
The Borrower will also pay interest on the unpaid principal amount
outstanding from time to time hereunder until such principal amount is paid in
full, at such interest rates and payable at such times as are specified in the
Credit Agreement. Nothing in this Term Note shall be deemed to establish or
require the payment of a rate of interest in excess of the maximum rate
permitted by any Applicable Law (as defined in the Credit Agreement). In the
event that any rate of interest required to be paid hereunder exceeds the
maximum rate permitted by Applicable Law, the provisions of the Credit Agreement
relating to the payment of interest under such circumstances shall control.
Both principal and interest are payable in lawful money of the United
States of America to the Agent for the account of the Lender at the Agent's
office at 100 Federal Street, Boston, Massachusetts 02110, in federal or other
immediately available funds.
This Second Amended and Restated Revolving Credit Note is made by the
Borrower and given to the Lender in partial substitution for that certain Second
Amended and Restated Revolving Credit Note dated September 3, 1993 in the
original principal amount of $20,250,000.00 payable to the Lender but not in
extinguishment of the debt evidenced thereby, in connection with the Lender's
assignment of a portion of its Commitment to Sanwa Business Credit Corporation.
For the purposes of this Revolving Credit Note, "Credit Agreement" means
the Second Amended and Restated Revolving Credit and Security Agreement dated as
of March 15, 1993, as amended by First Amended Schedule I dated as of April
15,1993, Amendment No. 2 dated as of May 10, 1993, Second Amended Schedule I
dated as of September 3,1993, Amendment No. 4 dated as of October 1, 1993,
Amendment No. 5 dated as of February 25, 1994, Amendment No. 6 dated as of
August 10, 1994, and Amendment No. 7 and Third Amended Schedule I, each of even
date herewith, among the Borrower, the Agent, the Lender and the other lenders
identified therein, as the same may be amended, modified, supplemented or
restated from time to time.
Reference is made to the Credit Agreement for the definitions of other
terms used in this Second Amended and Restated Revolving Credit Note.
Presentment for payment, demand, protest and notice of demand, notice of
dishonor and notice of non-payment and all other notices are hereby waived by
the Borrower.
This Second Amended and Restated Revolving Credit Note is one of the
Revolving Credit Notes under, is secured in accordance with the terms of, and is
entitled to the benefits of, the Credit Agreement, which, among other things,
contains provisions with respect to security for the indebtedness evidenced
hereby, the acceleration of the maturity and prepayments of the principal of
this Revolving Credit Note prior to maturity, all upon the terms and conditions
therein specified.
The Borrower hereby agrees to pay on demand all costs and expenses incurred
in collecting the Borrower's obligations hereunder or in enforcing or attempting
to enforce any of the Lender's rights hereunder, including, but not limited to,
reasonable attorneys' fees and expenses if collected by or through an attorney,
whether or not suit is filed.
This Second Amended and Restated Revolving Credit Note shall be governed by
and construed in accordance with the laws of the State of Georgia.
SYNTHETIC INDUSTRIES, INC.
[CORPORATE SEAL}
By Leonard Chill
Leonard Chill
ATTEST: President
By: Jon P. Beckman
Jon P. Beckman
Secretary
SECOND AMENDED AND RESTATED
REVOLVING CREDIT NOTE
(AS AMENDED PURSUANT TO THIRD AMENDED SCHEDULE I)
$6,422,000.000 Atlanta, Georgia
December 28,1994
FOR VALUE RECEIVED, the undersigned SYNTHETIC INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of SANWA BUSINESS CREDIT CORPORATION (the "Lender"), on March 1, 1998 the
principal amount of SIX MILLION FOUR HUNDRED TWENTY-TWO THOUSAND AND NO/100
DOLLARS ($6,422.000.00), or, if less, the aggregate unpaid balance of all
Advances under the Revolving Credit Facility (each as defined in the Credit
Agreement referred to below) made by the Lender to the Borrower pursuant to the
Credit Agreement (as hereinafter defined), the provisions of which are hereby
incorporated herein by reference. All payments made under this Revolving Credit
Note shall be made in lawful money of the United States of America in federal or
other immediately available funds.
The Borrower also unconditionally promises to pay interest on the unpaid
principal amount of the Revolving Credit Note for each day from the date hereof
until such principal amount is paid in full at the rates per annum and on the
dates specified in the Credit Agreement applicable from time to time in
accordance with the provisions thereof. Nothing contained in this Revolving
Credit Note or in the Credit Agreement shall be deemed to establish or require
the payment of a rate of interest in excess of the maximum rate permitted by any
Applicable Law. In the event that any rate of interest required to be paid
hereunder exceeds the maximum rate permitted by Applicable Law, the provisions
of the Credit Agreement relating to the payment of interest under such
circumstances shall control.
Both principal and interest are payable in lawful money of the United
States of America to the Agent for the account of the Lender at the Agent's
office at 100 Federal Street, Boston, Massachusetts 02110, in federal or other
immediately available funds.
This Second Amended and Restated Revolving Credit Note is made by the
Borrower and given to the Lender in partial substitution for that certain Second
Amended and Restated Revolving Credit Note dated September 3, 1993 in the
original principal amount of $22,500,000.00 payable to the Lender but not in
extinguishment of the debt evidenced thereby, in connection with the Lender's
assignment of a portion of its Commitment to Sanwa Business Credit Corporation.
For the purposes of this Revolving Credit Note, "Credit Agreement" means
the Second Amended and Restated Revolving Credit and Security Agreement dated as
of March 15, 1993, as amended by First Amended Schedule I dated as of April
15,1993, Amendment No. 2 dated as of May 10, 1993, Second Amended Schedule I
dated as of September 3,1993, Amendment No. 4 dated as of October 1, 1993,
Amendment No. 5 dated as of February 25, 1994, Amendment No. 6 dated as of
August 10, 1994, and Amendment No. 7 and Third Amended Schedule I, each of even
date herewith, among the Borrower, the Agent, the Lender and the other lenders
identified therein, as the same may be amended, modified, supplemented or
restated from time to time.
Reference is made to the Credit Agreement for the definitions of other
terms used in this Second Amended and Restated Revolving Credit Note.
Presentment for payment, demand, protest and notice of demand, notice of
dishonor and notice of non-payment and all other notices are hereby waived by
the Borrower.
This Second Amended and Restated Revolving Credit Note is one of the
Revolving Credit Notes under, is secured in accordance with the terms of, and is
entitled to the benefits of, the Credit Agreement, which, among other things,
contains provisions with respect to security for the indebtedness evidenced
hereby, the acceleration of the maturity and prepayments of the principal of
this Revolving Credit Note prior to maturity, all upon the terms and conditions
therein specified.
The Borrower hereby agrees to pay on demand all costs and expenses incurred
in collecting the Borrower's obligations hereunder or in enforcing or attempting
to enforce any of the Lender's rights hereunder, including, but not limited to,
reasonable attorneys' fees and expenses if collected by or through an attorney,
whether or not suit is filed.
This Second Amended and Restated Revolving Credit Note shall be governed by
and construed in accordance with the laws of the State of Georgia.
SYNTHETIC INDUSTRIES, INC.
[CORPORATE SEAL}
By Leonard Chill
Leonard Chill
ATTEST: President
By: Jon P. Beckman
Jon P. Beckman
Secretary
SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE
(AS AMENDED PURSUANT TO THIRD AMENDED SCHEDULE I)
$3,578,000.000 Atlanta, Georgia
December 28,1994
FOR VALUE RECEIVED, the undersigned SYNTHETIC INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of SANWA BUSINESS CREDIT CORPORATION (the "Lender"), the principal sum of
THREE MILLION FIVE HUNDRED SEVENTY-EIGHT THOUSAND AND NO/100 DOLLARS
($3,578.000.00) constituting the aggregate Advances made by the Lender under the
Term Loan Facility (each as defined in the Credit Agreement referred to below),
in 39 consecutive monthly installments each equal to the result obtained by
multiplying $500,000 by a fraction, the numerator of which is equal to the
outstanding principal amount of the Lender's Advances evidenced by this Note and
the denominator of which is equal to the total outstanding principal amount of
the Term Loan before giving effect to such installment, beginning January 1,
1995, PROVIDED that the final installment shall be in the amount of the then
outstanding aggregate unpaid balance of such Advances.
The Borrower will also pay interest on the unpaid principal amount
outstanding from time to time hereunder until such principal amount is paid in
full, at such interest rates and payable at such times as are specified in the
Credit Agreement. Nothing in this Term Note shall be deemed to establish or
require the payment of a rate of interest in excess of the maximum rate
permitted by any Applicable Law (as defined in the Credit Agreement). In the
event that any rate of interest required to be paid hereunder exceeds the
maximum rate permitted by Applicable Law, the provisions of the Credit Agreement
relating to the payment of interest under such circumstances shall control.
Both principal and interest are payable in lawful money of the United
States of America to the Agent for the account of the Lender at the Agent's
office at 100 Federal Street, Boston, Massachusetts 02110, in federal or other
immediately available funds.
This Second Amended and Restated Revolving Credit Note is made by the
Borrower and given to the Lender in partial substitution for that certain Second
Amended and Restated Revolving Credit Note dated September 3, 1993 in the
original principal amount of $20,250,000.00 payable to the Lender but not in
extinguishment of the debt evidenced thereby, in connection with the Lender's
assignment of a portion of its Commitment to Sanwa Business Credit Corporation.
For the purposes of this Revolving Credit Note, "Credit Agreement" means
the Second Amended and Restated Revolving Credit and Security Agreement dated as
of March 15, 1993, as amended by First Amended Schedule I dated as of April
15,1993, Amendment No. 2 dated as of May 10, 1993, Second Amended Schedule I
dated as of September 3,1993, Amendment No. 4 dated as of October 1, 1993,
Amendment No. 5 dated as of February 25, 1994, Amendment No. 6 dated as of
August 10, 1994, and Amendment No. 7 and Third Amended Schedule I, each of even
date herewith, among the Borrower, the Agent, the Lender and the other lenders
identified therein, as the same may be amended, modified, supplemented or
restated from time to time.
Reference is made to the Credit Agreement for the definitions of other
terms used in this Second Amended and Restated Revolving Credit Note.
Presentment for payment, demand, protest and notice of demand, notice of
dishonor and notice of non-payment and all other notices are hereby waived by
the Borrower.
This Second Amended and Restated Revolving Credit Note is one of the
Revolving Credit Notes under, is secured in accordance with the terms of, and is
entitled to the benefits of, the Credit Agreement, which, among other things,
contains provisions with respect to security for the indebtedness evidenced
hereby, the acceleration of the maturity and prepayments of the principal of
this Revolving Credit Note prior to maturity, all upon the terms and conditions
therein specified.
The Borrower hereby agrees to pay on demand all costs and expenses incurred
in collecting the Borrower's obligations hereunder or in enforcing or attempting
to enforce any of the Lender's rights hereunder, including, but not limited to,
reasonable attorneys' fees and expenses if collected by or through an attorney,
whether or not suit is filed.
This Second Amended and Restated Revolving Credit Note shall be governed by
and construed in accordance with the laws of the State of Georgia.
SYNTHETIC INDUSTRIES, INC.
[CORPORATE SEAL}
By Leonard Chill
Leonard Chill
ATTEST: President
By: Jon P. Beckman
Jon P. Beckman
Secretary
SECOND AMENDED AND RESTATED REVOLVING CREDIT NOTE
(AS AMENDED PURSUANT TO THIRD AMENDED SCHEDULE I)
$4,875,000.000 Atlanta, Georgia
December 28,1994
FOR VALUE RECEIVED, the undersigned SYNTHETIC INDUSTRIES, INC., a Delaware
corporation (the "Borrower"), hereby unconditionally promises to pay to the
order of SOUTHTRUST BANK OF GEORGIA N.A. (the "Lender"), the principal sum of
FOUR MILLION EIGHT HUNDRED SEVENTY-FIVE THOUSAND AND NO/100 DOLLARS
($4,875.000.00) constituting the aggregate Advances made by the Lender under the
Term Loan Facility (each as defined in the Credit Agreement referred to below),
in 39 consecutive monthly installments each equal to the result obtained by
multiplying $500,000 by a fraction, the numerator of which is equal to the
outstanding principal amount of the Lender's Advances evidenced by this Note and
the denominator of which is equal to the total outstanding principal amount of
the Term Loan before giving effect to such installment, beginning January 1,
1995, PROVIDED that the final installment shall be in the amount of the then
outstanding aggregate unpaid balance of such Advances.
The Borrower will also pay interest on the unpaid principal amount
outstanding from time to time hereunder until such principal amount is paid in
full, at such interest rates and payable at such times as are specified in the
Credit Agreement. Nothing in this Term Note shall be deemed to establish or
require the payment of a rate of interest in excess of the maximum rate
permitted by any Applicable Law (as defined in the Credit Agreement). In the
event that any rate of interest required to be paid hereunder exceeds the
maximum rate permitted by Applicable Law, the provisions of the Credit Agreement
relating to the payment of interest under such circumstances shall control.
Both principal and interest are payable in lawful money of the United
States of America to the Agent for the account of the Lender at the Agent's
office at 100 Federal Street, Boston, Massachusetts 02110, in federal or other
immediately available funds.
This Second Amended and Restated Revolving Credit Note is made by the
Borrower and given to the Lender in partial substitution for that certain Second
Amended and Restated Revolving Credit Note dated September 3, 1993 in the
original principal amount of $6,750,000.00 payable to the Lender but not in
extinguishment of the debt evidenced thereby, in connection with the Lender's
assignment of a portion of its Commitment to Sanwa Business Credit Corporation.
For the purposes of this Revolving Credit Note, "Credit Agreement" means
the Second Amended and Restated Revolving Credit and Security Agreement dated as
of March 15, 1993, as amended by First Amended Schedule I dated as of April
15,1993, Amendment No. 2 dated as of May 10, 1993, Second Amended Schedule I
dated as of September 3,1993, Amendment No. 4 dated as of October 1, 1993,
Amendment No. 5 dated as of February 25, 1994, Amendment No. 6 dated as of
August 10, 1994, and Amendment No. 7 and Third Amended Schedule I, each of even
date herewith, among the Borrower, the Agent, the Lender and the other lenders
identified therein, as the same may be amended, modified, supplemented or
restated from time to time.
Reference is made to the Credit Agreement for the definitions of other
terms used in this Second Amended and Restated Revolving Credit Note.
Presentment for payment, demand, protest and notice of demand, notice of
dishonor and notice of non-payment and all other notices are hereby waived by
the Borrower.
This Second Amended and Restated Revolving Credit Note is one of the
Revolving Credit Notes under, is secured in accordance with the terms of, and is
entitled to the benefits of, the Credit Agreement, which, among other things,
contains provisions with respect to security for the indebtedness evidenced
hereby, the acceleration of the maturity and prepayments of the principal of
this Revolving Credit Note prior to maturity, all upon the terms and conditions
therein specified.
The Borrower hereby agrees to pay on demand all costs and expenses incurred
in collecting the Borrower's obligations hereunder or in enforcing or attempting
to enforce any of the Lender's rights hereunder, including, but not limited to,
reasonable attorneys' fees and expenses if collected by or through an attorney,
whether or not suit is filed.
This Second Amended and Restated Revolving Credit Note shall be governed by
and construed in accordance with the laws of the State of Georgia.
SYNTHETIC INDUSTRIES, INC.
[CORPORATE SEAL}
By Leonard Chill
Leonard Chill
ATTEST: President
By: Jon P. Beckman
Jon P. Beckman
Secretary
CERTIFICATE AS TO REPRESENTATIONS, WARRANTIES AND DEFAULTS
I, Leonard Chill, President of Synthetic Industries, Inc., a Delaware
corporation (the "Borrower"), hereby certify in connection with Amendment No. 7
dated as of December 28, 1994 ("Amendment No. 7.") to the Second Amended and
Restated Revolving Credit and Security Agreement dated as of March 15, 1993 (as
amended by First Amended Schedule I dated April 15, 1993, Amendment No. 2 dated
as of May 10,1993, Second Amended Schedule I dated September 3,1993, Amendment
No. 4 dated as of October 1, 1993, Amendment No. 5 dated as of February 25,
1994, Amendment No. 6 dated as of August 10, 1994 and by said Amendment No. 7,
the "Credit Agreement"; terms defined therein, unless otherwise defined herein,
being used herein as therein defined) among the Borrower, the "Lenders" named
herein and The First National Bank of Boston, as agent for the Lenders, that, to
the best of my knowledge and based on an examination sufficient to enable me to
make an informed statement:
(i) all of the representations and warranties made or deemed to be
made under the Credit Agreement and any other Loan Document are true and
correct as of the date hereof, both before and after giving effect to
Amendment No. 7, and
(ii) no Default or Event of Default has occurred and is continuing as
of the date hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of the
Borrower this 28th day of December 1994.
Leonard Chill
Leonard Chill
President
Sanwa Business Credit Corporation
500 Glenpointe Centre West
4th Floor
Teaneck, NJ 07666
RE: Synthetic Industries, Inc.
Ladies and Gentlemen:
We have acted as counsel for Synthetic Industries, Inc. ("the Borrower") in
connection with the Second Amended and Restated Revolving Credit and Security
Agreement dated as of March 15, 1993, as amended by First Amended Schedule I
dated as of April 15, 1993, Amendment No. 2 dated as of September 3,1993, Second
Amended Schedule I dated as of September 3, 1993, Amendment No. 4 dated as of
October 1, 1993, Amendment No. 5 dated as of February 25, 1994, Amendment No. 6
dated as of August 10, 1994 and Amendment No. 7 dated as of December 28, 1994
(the "Credit Agreement"; unless otherwise defined herein, terms used herein
shall have the meanings ascribed thereto in the Credit Agreement), between the
Borrower, the Lenders named on Schedule I thereto as amended from time to time,
and The First National Bank of Boston, as agent for said Lenders.
This letter is to confirm that you may rely, in connection with your acquisition
of an interest in the Loans as reflected in the Third Amended Schedule I of even
date herewith, on the opinion letter addressed to the First National Bank of
Boston and dated March 17, 1993, delivered by this firm in connection with the
execution and delivery of, and initial borrowings under, the Credit Agreement,
as of the date of such opinion letter and subject to all qualifications and
assumptions set forth therein, as if such opinion letter were specifically
addressed to you.
Yours very truly,
Joseph F. Dana
Joseph F. Dana
Sanwa Business Credit Corporation
500 Glenpointe Centre West
Teaneck, New Jersey 07666
Re: Synthetic Industries, Inc.
Ladies and Gentlemen:
We have acted as counsel for Synthetic Industries, Inc. ("the Borrower") in
connection with the Second Amended and Restated Revolving Credit and Security
Agreement dated as of March 15, 1993 (the "Original Credit Agreement"), as
amended by First Amended Schedule I dated as of April 15, 1993, Amendment No. 2
dated as of September 3,1993, Second Amended Schedule I dated as of September 3,
1993, Amendment No. 4 dated as of October 1, 1993, Amendment No. 5 dated as of
February 25, 1994, Amendment No. 6 dated as of August 10, 1994 and Amendment No.
7 dated as of December 28, 1994 (as so amended, the "Credit Agreement"; unless
otherwise defined herein, terms used herein shall have the meanings ascribed
thereto in the Credit Agreement), between the Borrower, the Lenders named on
Schedule I thereto as amended from time to time and The First National Bank of
Boston, as agent for said Lenders.
This letter is to confirm that, in connection with your acquisition of an
interest in the Loans as reflected in the Third Amended Schedule I to the Credit
Agreement, you may rely on the opinion letter, dated March 17, 1993, delivered
by this firm to the First National Bank of Boston in connection with the
execution and delivery of, and initial borrowings under, the Original Credit
Agreement, as of the date of such opinion letter and subject to all
qualifications and assumptions set forth therein, as if such opinion letter were
specifically addressed to you.
Yours very truly,
GORDON ALTMAN BUTOWSKY
WEITZEN SHAVLOV & WEIN
By: Bonnie D. Podolsky
Bonnie D. Podolsky
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-END> DEC-31-1994
<CASH> 116
<SECURITIES> 0
<RECEIVABLES> 38097
<ALLOWANCES> 1255
<INVENTORY> 37050
<CURRENT-ASSETS> 11580
<PP&E> 171367
<DEPRECIATION> 53310
<TOTAL-ASSETS> 293142
<CURRENT-LIABILITIES> 33128
<BONDS> 183233
<COMMON> 0
0
0
<OTHER-SE> 55527
<TOTAL-LIABILITY-AND-EQUITY> 293142
<SALES> 58012
<TOTAL-REVENUES> 58012
<CGS> 52725
<TOTAL-COSTS> 52725
<OTHER-EXPENSES> 182
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5418
<INCOME-PRETAX> (313)
<INCOME-TAX> (29)
<INCOME-CONTINUING> (248)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (248)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
