Contract

Exhibit 10.1

 

AMENDMENTNO. 1, dated as of April 28, 2006 (this “Amendment No. 1”), among THEWILLIAM CARTER COMPANY, a Massachusetts corporation (the “Borrower”),each lender from time to time party hereto (collectively, the “Lenders”and individually, a “Lender”), BANK OF AMERICA, N.A., as AdministrativeAgent, and the Required Lenders, the Term Lenders and the Additional Term 1Lenders (as defined below), in each case listed on the signature pages hereto,to the Credit Agreement dated as of July 14, 2005 (as amended, supplemented,amended and restated or otherwise modified from time to time) (the “CreditAgreement”) among the Borrower, the Administrative Agent and the Lendersnamed therein. Capitalized terms used and not otherwise defined herein shallhave the meanings assigned to them in the Credit Agreement.

 

WHEREAS,the Borrower desires to create a new Class of Term 1 Loans under the CreditAgreement having identical terms with, having the same rights and obligationsunder the Loan Documents as and in the same aggregate principal amount as, theTerm Loans, as set forth in the Credit Agreement and Loan Documents, except assuch terms are amended hereby;

 

WHEREAS,each Term Loan Lender who executes and delivers this Amendment No. 1 shall bedeemed, upon effectiveness of this Amendment No. 1, to have exchanged its TermLoan Commitment and Term Loans (which Term Loan Commitment and Term Loans shallthereafter be deemed terminated) for a Term 1 Loan Commitment and Term 1 Loansin the same aggregate principal amount as such Lender’s Term Loans, and suchLender shall thereafter become a Term 1 Loan Lender;

 

WHEREAS,each Person who executes and delivers this Amendment No. 1 as an AdditionalTerm 1 Loan Lender will make Term 1 Loans on the effective date of this AmendmentNo. 1 to the Borrower, the proceeds of which will be used by the Borrower torepay in full the outstanding principal amount of Term Loans of Non-ConsentingTerm Loan Lenders;

 

WHEREAS,the Borrower shall pay to each Term Loan Lender all accrued and unpaid intereston its Term Loans to, but not including, the date of effectiveness of this AmendmentNo. 1 on such date of effectiveness;

 

WHEREAS,the Borrower desires to make certain other changes to the Credit Agreement asset forth herein;

 

NOW,THEREFORE, in consideration of the premises and covenants contained herein andfor other good and valuable consideration, the receipt and sufficiency of whichare hereby acknowledged, the parties hereto, intending to be legally boundhereby, agree as follows:

 



 

Amendments Relating to Term 1 Loans.

 

Section 1.01 of the Credit Agreement ishereby amended by deleting clause (b) of the definition of “Applicable Rate” inits entirety and replacing it with the following:

 

“(b)(i) 0.50% withrespect to Term 1 Loans that are Base Rate Loans and (ii) 1.50% with respect toTerm 1 Loans that are Eurodollar Rate Loans.”

 

Section 2.05 of the Credit Agreement ishereby amended by adding to the end of such Section new paragraphs (i) and (j)as follows:

 

“(i)          Notwithstanding theforegoing, 100% of the proceeds of all Term 1 Loans shall be used to repay TermLoans and the requirements of Sections 2.05(g) and (h) shall not apply to suchproceeds and any repayments made with such proceeds.

 

(j)            Notwithstanding theforegoing, if the Borrower makes any optional prepayment of Term 1 Loans priorto the one year anniversary of the Amendment No. 1 Effective Date in connectionwith any Repricing Transaction, the Borrower shall pay to the AdministrativeAgent, for the ratable account of  eachTerm 1 Loan Lender, a prepayment premium of 1% of the amount of such Term 1Loans being prepaid.”

 

Section 2.06(b) of the Credit Agreement ishereby amended by adding to the end of such Section new sentence as follows:

 

“The Term 1 Loan Commitment of each Term 1 Loan Lender shall beautomatically terminated on the Amendment No. 1 Effective Date upon theBorrowing of the Term 1 Loans on such date.”

 

Section 6.11 of the Credit Agreement ishereby amended by adding to the end of such Section a new sentence as follows:

 

“The Borrower further covenants and agrees that the proceeds of allTerm 1 Loan Borrowings hereunder will be used to refinance the existing TermLoans.”

 

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All references to “Term Loan Borrowing,” “TermLoan Commitment,” “Term Loan Lender,” “Term Loan Maturity Date,” “Term LoanNote” and “Term Loans” in the Credit Agreement and the Loan Documents shall bedeemed to be references to “Term 1 Loan Borrowing,” “Term 1 Loan Commitment,” “Term1 Loan Lender,” “Term 1 Loan Maturity Date,” “Term 1 Loan Note” and “Term 1Loans,” respectively (unless the context otherwise requires).

 

The Term 1 Loans made on the Amendment No. 1Effective Date shall not constitute Incremental Term Loans under Section 2.14of the Credit Agreement.

 

The following defined terms shall be added toSection 1.01 of the Credit Agreement in alphabetic order:

 

“AdditionalTerm 1 Loan Commitment” means, with respect to an Additional Term 1 LoanLender, the commitment of such Additional Term 1 Loan Lender to make AdditionalTerm 1 Loans on the Amendment No. 1 Effective Date, in an amount set forth nextto the signature of such Additional Term 1 Loan Lender on Amendment No. 1. Theaggregate amount of the Additional Term 1 Loan Commitments of all AdditionalTerm 1 Loan Lenders shall equal the outstanding principal amount of Term Loansof Non-Consenting Term Loan Lenders.

 

“AdditionalTerm 1 Loan Lender” means a Person with an Additional Term 1 LoanCommitment to make Additional Term 1 Loans to the Borrower on the Amendment No.1 Effective Date, which for the avoidance of doubt may be an existing Term LoanLender.

 

“AdditionalTerm 1 Loan” means a Loan that is made pursuant to Section 2.01(d)(ii) ofthe Credit Agreement on the Amendment No. 1 Effective Date.

 

“AmendmentNo. 1” means Amendment No. 1 to this Agreement dated as of April 28, 2006.

 

“AmendmentNo. 1 Effective Date” means April 28, 2006, the date on which allconditions precedent set forth in Section 4 of Amendment No. 1 are satisfied.

 

“Non-ConsentingTerm Loan Lender” means each Term Loan Lender that has not executed anddelivered a counterpart of Amendment No. 1 on or prior to the Amendment No. 1Effective Date.

 

“RepricingTransaction” means the incurrence by any Loan Party of any Indebtedness(including, without limitation, any new or additional term loans under thisAgreement) that is secured or is broadly marketed or syndicated to banks andother institutional investors in financings similar to the Credit Agreement (i)having an effective interest rate margin or weighted average yield (to be determinedby the Administrative Agent consistent with generally accepted financialpractice) that is less than the Applicable Rate for, or weighted average yield(to be determined by the Administrative Agent on the same basis) of, the Term 1

 

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Loansand (ii) the proceeds of which are used to repay, in whole or in part,principal of outstanding Term 1 Loans.

 

“Term1 Loan Commitment” means, with respect to a Term Loan Lender, the agreementof such Term Loan Lender to exchange its Term Loans for an equal aggregateprincipal amount of Term 1 Loans on the Amendment No. 1 Effective Date, as evidencedby such Term Loan Lender executing and delivering Amendment No. 1.

 

“Term1 Loan Lender” means a Lender with outstanding Term 1 Loans.

 

“Term1 Loan” means an Additional Term 1 Loan or a Loan that is deemed madepursuant to Section 2.01(d)(i).

 

Section 2.01 of the Credit Agreement ishereby amended by adding the following clause (d) to such Section:

 

“(d)         (i)  Subject to the terms and conditions hereofand of Amendment No. 1, each Term Loan Lender with a Term 1 Loan Commitmentseverally agrees to exchange its Term Loans for a like principal amount of Term1 Loans on the Amendment No. 1 Effective Date;

 

(ii) Subject to the terms and conditions hereof and of Amendment No. 1, eachAdditional Term 1 Loan Lender severally agrees to make Additional Term 1 Loansto the Borrower on the Amendment No. 1 Effective Date in a principal amount notto exceed its Additional Term 1 Loan Commitment on the Amendment No. 1 EffectiveDate. The Borrower shall prepay all Term Loans of Non-Consenting Term LoanLenders with the gross proceeds of the Additional Term 1 Loans;

 

(iii) The Borrower shall pay to the Term Loan Lenders all accrued and unpaidinterest on the Term Loans to, but not including, the Amendment No. 1 EffectiveDate on such Amendment No. 1 Effective Date and to the Non-Consenting Term LoanLenders any breakage loss or expense under Section 3.05. The Amendment No. 1Effective Date shall be deemed the first day of a new Interest Period withrespect to the Term 1 Loans; and

 

(iv) The Term 1 Loans shall have the same terms as the Term Loans as setforth in the Credit Agreement and Loan Documents, except as modified by thisAmendment No. 1. For the avoidance of doubt, the Term 1 Loans (and allprincipal, interest and other amounts in respect thereof) will constitute “Obligations”under

 

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the Credit Agreement and the other Loan Documents and shall have thesame rights and obligations under the Credit Agreement and Loan Documents asthe Term Loans.”

 

Other Amendments.

 

The definition of “Cash Equivalents” inSection 1.01 is hereby amended by deleting clauses (g) through (h) of suchdefinition and replacing such clauses with the following:

 

“(g) auction rate securities with interest rate or dividend reset dateintervals not greater than thirty-five (35) days duration, and whose underlyingsecurities are rated at least AAA or the equivalent thereof by Standard &Poor’s Rating Service or at least Aaa or the equivalent thereof by Moody’sInvestors Service Inc.; (h) investments in money market funds substantially allof whose assets comprise securities of the types described in clauses (a)through (g) above; and (i) in the case of Foreign Subsidiaries, Investmentsmade locally of a type comparable to those described in clauses (a) through (h)of this definition.”

 

The following defined term shall be added toSection 1.01 of the Credit Agreement in alphabetic order:

 

“AmendmentNo. 1 Transaction Costs” means the fees, costs and expensespayable by Holdings, the Borrower or any of the Borrower’s Subsidiaries inconnection with entering into Amendment No. 1.

 

Section 1.01 of the Credit Agreement ishereby amended by amending the definition of “Consolidated EBITDA” by (i)deleting the “and” appearing at the end of clause (x) of  such definition; (ii) inserting the word “and”at the end of clause (xi) of such definition and (iii) adding the followingclause (xii) immediately following clause (xi) of such definition: “(xi)Amendment No. 1 Transaction Costs;”

 

Section 7.06(h) of the Credit Agreement ishereby amended by (i) substituting for “1:50” where it appears therein thefollowing: “2:50” and (ii) deleting the phrase “in an amount not to exceed theCumulative Growth Amount immediately prior to the time of the making of suchRestricted Payment” appearing in such Section and replacing it with thefollowing:

 

“; providedthat immediately following any such Restricted Payment, Borrower shall have notless than $75,000,000 of current availability under the Revolving Loan Commitments”

 

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Representationsand Warranties. The Borrower represents and warrants to the Lenders as of thedate hereof and the Amendment No. 1 Effective Date that:

 

The execution, delivery and performance ofthis Amendment No. 1 have been duly authorized by all necessary corporateaction by the Borrower, and do not and will not (i) contravene the terms of theBorrower’s Organization Documents; (b) conflict with or result in any breach orcontravention of, or the creation of any Lien under, or require any payment tobe made under (i) any Contractual Obligation to which the Borrower is a partyor (ii) any order, injunction, writ or decree of any Governmental Authority orany arbitral award to which such Person or its property is subject; or (c)violate any Law, except in the case of clause (b) or (c) as would notreasonably be expected to have a Material Adverse Effect.

 

Before and after giving effect to thisAmendment No. 1, the representations and warranties set forth in the CreditAgreement are true and correct in all material respects on and as of the dateof such Credit Extension, except to the extent that such representations andwarranties specifically refer to an earlier date, in which case they shall betrue and correct in all material respects as of such earlier date.

 

At the time of and after giving effect tothis Amendment No. 1, no Default or Event of Default has occurred and is continuing.

 

Conditionsto Effectiveness. This Amendment No. 1 shall become effective on the date onwhich each of the following conditions is satisfied:

 

The Administrative Agent (or its counsel)shall have received from (i) Lenders constituting (A) the Required Lenders and(B) each Term Loan Lender, or in lieu of one or more Term Loan Lenders, one ormore Additional Term 1 Loan Lenders, and (ii) each of the other partieshereto, either (x) a counterpart of this Amendment No. 1 signed on behalf ofsuch party or (y) written evidence satisfactory to the Administrative Agent(which may include telecopy transmission of a signed signature page of thisAmendment No. 1) that such party has signed a counterpart of this Amendment No.1;

 

The Borrower shall have provided theAdministrative Agent with a Borrowing request three Business Days prior to theAmendment No. 1 Effective Date with respect to the borrowing of Additional Term1 Loans on the Amendment No. 1 Effective Date; provided that if theBorrower shall have requested a Borrowing of Eurodollar Rate Loans, theBorrower shall have provided the Administrative Agent with a funding indemnityagreement satisfactory to the Administrative Agent;

 

Each Term 1 Loan Lender shall have received,if requested, one or more Notes payable to the order of such Lender dulyexecuted by the Borrower in substantially the form of Exhibit C-1 to theCredit Agreement, as modified by this Amendment No. 1, evidencing its Term 1Loans;

 

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The Borrower shall have paid to all Term LoanLenders simultaneously with the making of Term 1 Loans hereunder all accruedand unpaid interest on the Term Loans of such Term Loan Lenders to, but notincluding, the Amendment No. 1 Effective Date on the Amendment No. 1 EffectiveDate;

 

The Borrower shall have paid to theAdministrative Agent all reasonable costs and expenses (including, withoutlimitation, the reasonable fees, charges and disbursements of Cahill Gordon& Reindel LLP, counsel for the Agents) of the Administrative Agent;

 

All corporate and other proceedings taken orto be taken in connection with this Amendment No. 1 and all documentsincidental thereto, whether or not referred to herein, shall be satisfactory inform and substance to the Administrative Agent; and

 

At the time of and after giving effect to theAmendment No. 1, no Default or Event of Default has occurred and is continuing.

 

Expenses. The Borrower agrees to reimburse the Administrative Agentfor its and the other Agents’ reasonable out-of-pocket expenses incurred bythem in connection with this Amendment No. 1, including the reasonable fees,charges and disbursements of Cahill Gordon & Reindel LLP, counsel for theAdministrative Agent.

 

Counterparts. This Amendment No. 1 may be executed in any number ofcounterparts and by different parties hereto on separate counterparts, each ofwhich when so executed and delivered shall be deemed to be an original, but allof which when taken together shall constitute a single instrument. Delivery ofan executed counterpart of a signature page of this Amendment No. 1 byfacsimile transmission shall be effective as delivery of a manually executedcounterpart hereof.

 

ApplicableLaw. THIS AGREEMENT SHALL BE GOVERNED BY,AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

Headings. The headings of this Amendment No. 1 are for purposes ofreference only and shall not limit or otherwise affect the meaning hereof.

 

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Effectof Amendment. Except as expressly set forthherein, this Amendment No. 1 shall not by implication or otherwise limit,impair, constitute a waiver of or otherwise affect the rights and remedies ofthe Lenders or the Agents under the Credit Agreement or any other LoanDocument, and shall not alter, modify, amend or in any way affect any of theterms, conditions, obligations, covenants or agreements contained in the CreditAgreement or any other provision of the Credit Agreement or any other Loan Document,all of which are ratified and affirmed in all respects and shall continue infull force and effect. The Required Lenders agree that the Borrower and theAdministrative Agent may enter into an Amended and Restated Credit Agreementafter the Amendment No. 1 Effective Date in form and substance satisfactory tothe Administrative Agent to give effect to this Amendment No. 1. By executingand delivering a copy hereof, each Loan Party hereby agrees and confirms thatall Loans and Obligations (including, without limitation, the Term 1 Loans)shall be fully guaranteed by Holdings and Subsidiary Guarantors pursuant to theGuarantee Agreement and shall be fully secured pursuant to the SecurityDocuments.

 

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IN WITNESSWHEREOF, the parties hereto have caused this Amendment No. 1 to be dulyexecuted as of the date first above written.

 

 

 

  THE WILLIAM CARTER COMPANY

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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  BANK OF AMERICA, N.A., as
  Administrative Agent

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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  [LENDER],
  
as a Lender

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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[LENDER],

as an Additional Term 1 Lender

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

Term 1 Commitment:

$

 

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