SECOND AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit
Agreement (the "Agreement"), made as of the 13th day of March,
2002, by and among FLEET NATIONAL BANK, a national banking
association with its principal office at 000 Xxxxxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxx Xxxxxx 00000, in its capacity as Administrative
Agent and as a Bank ("Agent"), the Banks listed on the signature
page hereto (the "Required Banks") and XXXXXXXXX XXXXX, INC., a
Florida corporation with its principal place of business at 00000
X.X. 00xx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx 00000 ("Borrower").
W I T N E S S E T H:
WHEREAS, pursuant to the terms and conditions of that
certain Amended and Restated Credit Agreement dated as of January
29, 2001 among Borrower, Agent, Credit Suisse First Boston, as
Syndication Agent, Fleet Securities, Inc. and Credit Suisse First
Boston, as Joint Lead Arranger and Joint Book Managers and the
Banks named therein (the "Banks"), as amended by a First
Amendment to Amended and Restated Credit Agreement dated as of
July 20, 2001 (as amended, the "Credit Agreement"), the Banks
agreed to make a revolving credit loan available to Borrower,
subject to the terms and conditions of the Credit Agreement; and
WHEREAS, the Required Banks have requested, in addition to
other things, changes to certain financial covenants and
additional reporting requirements; and
WHEREAS, the Required Banks are willing to amend the Credit
Agreement subject to the terms and conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants set forth herein, and for good and valuable
other consideration, receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Section 1. Defined Terms.
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All capitalized terms not defined herein shall have the same
meaning ascribed to such terms as provided in the Credit
Agreement.
Section 2. Representations and Warranties.
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Borrower hereby represents and warrants to the Banks that:
(a) Borrower is duly incorporated, validly existing and in
good standing under the laws of the State of Florida and has all
requisite corporate powers and all material governmental
licenses, authorizations, consents and approvals required to
carry on its business as now conducted.
(b) Borrower has all requisite power and authority to
execute, deliver and perform its obligations under this Agreement
and the execution, delivery and performance by Borrower of this
Agreement has been duly authorized by all requisite action. This
Agreement has been duly executed and delivered by Borrower, and
is the valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its respective terms.
(c) The execution, delivery and performance by Borrower of
this Agreement will not violate or contravene (i) the articles of
incorporation or by-laws of Borrower, (ii) any provision of any
law, rule or regulation applicable to Borrower, (iii) any order,
writ, judgment, injunction, decree, determination or award of any
court or other agency of government to which Borrower is bound,
or (iv) any other agreement, lease, indenture or instrument to
which Borrower is a party or by which Borrower is bound, or be in
conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under, or result in
the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever, upon any properties or assets of Borrower
pursuant to any such other agreement, lease, indenture or
instrument.
(d) There is no action, suit or proceeding at law or in
equity or by or before any court, governmental instrumentality or
other agency pending, or to Borrower's knowledge, threatened
against, or in any way affecting Borrower which, if adversely
determined, would have a material adverse effect on the business,
operations, properties, assets or condition, financial or
otherwise, of Borrower.
(e) No consent, approval or authorization from, or filing
of any declaration or statement with, any court, governmental
instrumentality or other agency is required in connection with or
as a condition to the execution, delivery or performance of this
Agreement, by Borrower.
(f) Except as set forth in SCHEDULE I attached hereto,
Borrower hereby reaffirms and restates, as of the date hereof,
all of the representations and warranties made by it in the
Credit Agreement, as amended by this Agreement, except to the
extent altered by actions permitted pursuant to the terms thereof
or expressly contemplated pursuant to the terms hereof, or to the
extent Lender has been advised in writing of any inaccuracy with
respect to such representations or warranties and have waived the
same in writing.
(g) No Event of Default exists under the Credit Agreement,
or any event which, with the giving of notice or passage of time
or both, would constitute such an Event of Default, has occurred
which has not been waived in writing by Lender or which will not
be cured upon the execution and delivery by Borrower of this
Agreement.
Section 3. Amendments to Credit Agreement.
--------- ------------------------------
The Credit Agreement is hereby amended, effective as of the
date hereof, as follows:
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Section 3.01. Amended Definitions.
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Section 1.01 of the Credit Agreement is hereby amended by
deleting the definitions "Applicable Margin", "Consolidated
EBITDA" and "Shareholders Equity Base" and replacing them with
the following:
"APPLICABLE MARGIN" means the applicable margins based on
the applicable Consolidated Debt/EBITDA Ratio (as determined
quarterly) as shown below (in basis points):
Consolidated Base Rate
Tier Total Debt/EBITDA LIBOR Loans Loans
---- ----------------------------- ----------- ---------
I Greater than or equal to
4.5:1.0 350 225
II Less than 4.5:1.0 but greater
than or equal to 3.5:1.0 325 200
III Less than 3.5:1.00 but greater
than or equal to 3.0:1.0 300 175
IV Less than 3.0:1.0 but greater
than or equal to 2.5:1.0 275 150
V Less than 2.5:1.0 but greater
than or equal to 2.0:1.0 250 125
VI Less than 2.0:1.0 225 100
Any change in an Applicable Margin shall be effective
commencing on the first business day of the month following the
due date of the compliance certificate required by Section 5.1(c)
hereof and provided, however, if any compliance certificate is
not received by the due date required by Section 5.1(c), the
Applicable Margin shall revert back to Tier I until delivery of
the next compliance certificate. Immediately upon execution of
this Agreement, the Applicable Margins for the period from the
date of this Agreement until changed as prescribed above shall be
determined by reference to Tier I."
"CONSOLIDATED EBITDA" means, with respect to any Person for
any period, Consolidated Net Income for such period, PLUS (i) the
sum of (a) Consolidated Net Interest Expense, (b) depreciation,
amortization and other non-cash charges, (c) losses on asset
sales, exchanges, transfers or other dispositions, and (d)
extraordinary or other non-recurring losses or charges, (e) PLUS
income tax expense, LESS (ii) the sum of (a) gains on asset
sales, exchanges, transfers or other dispositions, (b)
extraordinary or other non-recurring gains or credits, and (c)
income attributable to non-cash items or other non-cash credits,
in each case to the extent included in arriving at such net
income (or loss) for such period and determined in accordance
with GAAP; provided, however, that for the purposes of this
definition, Borrower may add back the higher
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cost effect of the Arden Inventory resulting in an add back of
$15,461,000 for the fiscal quarter ending April 27, 2002,
$12,309,000 for the fiscal quarter ending July 27, 2002 and
$3,968,000 for the fiscal quarter ending October 26, 2002.".
"SHAREHOLDERS' EQUITY BASE" means, with respect to any
Person, as at any date, the stockholders equity of such Person as
of such date as determined in accordance with GAAP, which shall
include for the purposes of this calculation, the liquidation
preference of the Seller Preferred, but shall exclude, for the
purposes of this calculation, any impact resulting from the
implementation of FAS 141 and 142 pertaining to the accounting
for goodwill.
Section 1.01 of the Credit Agreement is hereby further
amended by adding the following new definitions:
"ARDEN INVENTORY" means, that specific Arden inventory
identified by Borrower to the Banks that existed in the
Borrower's inventory prior to the Acquisition.
"NET INCOME ATTRIBUTABLE TO COMMON SHAREHOLDERS" means, net
income of the Borrower adjusted downward for the accretion and
dividends paid or accrued by the Borrower associated with its
preferred stock.
Section 3.02. Amendments to Section 5.01.
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Section 5.01 of the Credit Agreement is hereby amended by
deleting subsection (f) in its entirety and replacing with the
following:
"(f) within fifteen (15) days after the end of each
month in each fiscal year of Borrower or during the period
of June 1 through October 31 of each year, by Tuesday of
each week for the prior week, a Borrowing Base Certificate
and a schedule setting forth in reasonable detail
Borrower's Inventory, certified by Borrower's principal
financial officer as of the end of such applicable period;"
Section 5.01 of the Credit Agreement is hereby further
amended by adding the following new subsections:
"(n) within thirty (30) days after the end of each
month in each fiscal year of Borrower, the following
reports: (i) a management narrative of the financial results
of Borrower; (ii) comparison of month to date and year to
date performance of the Borrower to prior year results and
current year's budget; (iii) a summary aging of all accounts
receivable and accounts payable of Borrower; (iv) a listing
of the top ten concentration for accounts receivable and
accounts payable; (v) a listing of the balance of inter-
company loans to the Foreign Subsidiaries; (vi)consolidating
profit and loss statement (domestic/international); and
(vii) SBU analysis of sales, EBITDA and gross margin."
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Section 3.03 Amendment to Section 5.16.
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Section 5.16 of the Credit Agreement is hereby amended by
deleting Section 5.16 in its entirety and replacing it with the
following:
SECTION 5.16. CONSOLIDATED TOTAL DEBT/EBITDA RATIO. The
Consolidated Total Debt/EBITDA Ratio will not exceed the
following levels for each respective Calculation Period;
Ratio Calculation Period:
----- -------------------
3.25:1.00 for the fiscal quarter ending on or about
April 30, 2001;
3.50:1.00 for the fiscal quarter ending on or about
July 31, 2001;
3.75:1.00 for the fiscal quarter ending on or about
October 31, 2001;
3.00:1.00 for the fiscal quarter ending on or about
January 31, 2002;
6.00:1.00 for the fiscal quarter ending on or about
April 30, 2002;
6.00:1.00 for the fiscal quarter ending on or about
July 31, 2002;
6.00:1.00 for the fiscal quarter ending on or about
October 31, 2002;
3.30:1.00 for the fiscal quarter ending on or about
January 31, 2003;
3.50:1.00 for the fiscal quarter ending on or about
April 30, 2003;
3.50:1.00 for the fiscal quarter ending on or about
July 31, 2003;
3.50:1.00 for the fiscal quarter ending on or about
October 31, 2003;
2.50:1.00 for the fiscal quarter ending on or about
January 31, 2004 and each
January 31 quarter end thereafter;
2.50:1.00 for the fiscal quarter ending on or about
April 30, 2004 and each April 30
quarter end thereafter;
3.00:1.00 for the fiscal quarter ending on or about
July 31, 2004 and each July 31
quarter end thereafter; and
3.25:1.00 for the fiscal quarter ending on or about
October 31, 2004 and each
October 31 quarter thereafter."
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Section 3.04 Amendment to Section 5.17.
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Section 5.17 of the Credit Agreement is hereby amended by
deleting Section 5.17 in its entirety and replacing it with the
following.
Interest Coverage Ratio Calculation Period
----------------------- ------------------
2.50:1.00 for each fiscal quarter of Fiscal Year
2002;
1.40:1.00 for the fiscal quarter ending on or
about April 30, 2002;
1.50:1.00 for the fiscal quarter ending on or
about July 31, 2002;
1.60:1.00 for the fiscal quarter ending on or
about October 31, 2002
2.00:1.00 for the fiscal quarter ending on or
about January 31, 2003;
2.50:1.00 for the fiscal quarter ending on or
about April 30, 2003;
2.50:1.00 for the fiscal quarter ending on or
about July 31, 2003;
2.50:1.00 for the fiscal quarter ending on or
about October 31, 2003; and
3.00:1.00 for the fiscal quarter ending January
31, 2004 and each fiscal quarter
thereafter."
Section 3.05 Amendment to Section 5.18.
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Section 5.18 of the Credit Agreement is hereby amended by
deleting Section 5.18 in its entirety and replacing it with the
following.
"SHAREHOLDERS' EQUITY BASE. The Borrower will maintain
Shareholders' Equity Base of at least equal to $100,000,000
("Minimum Amount") from the Effective Date through April 30,
2001; provided, however, the Minimum Amount shall be increased
quarterly thereafter on a cumulative quarterly basis by an amount
equal to 50% of the positive Net Income Attributable to Common
Shareholders for the prior fiscal quarter."
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Section 3.06 Amendment to Section 5.22.
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Section 5.22 of the Credit Agreement is hereby amended by
deleting Section 5.22 in its entirety and replacing it with the
following:
"CAPITAL EXPENDITURES. The Borrower shall not make Capital
Expenditures during any fiscal quarter in excess of the following
levels for each respective period, to be tested on a cumulative
basis:
Capital Expenditure Limit Period
------------------------- ------
$4,500,000 for the fiscal quarter ending
on or about April 30, 2002;
$9,000,000 for the six months ending
on or about July 31, 2002;
$12,000,000 for the nine months ending on
or about October 31, 2002;
$18,000,000 for the fiscal year ending
January 31, 2003; and
$25,000,000 PLUS an amount for the fiscal year ending
equal to no more than Five January 31, 2004."
Million Dollars which
represents all or a portion
of the Capital Expenditure
Allotment not used for
Capital Expenditures during
the prior year.
Section 3.07 Amendment to Article V.
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Article V of the Credit Agreement is hereby amended by
adding the following new sections:
"SECTION 5.25. MINIMUM EBITDA. Consolidated EBITDA will be
at least equal to the following levels for each fiscal quarter
ended in each of the following Calculation Periods.
Minimum Consolidated EBITDA Calculation Period
--------------------------- ------------------
$68,000,000 for the four fiscal quarters
ending on or about April 30,
2002;
$70,000,000 for the four fiscal quarters
ending on or about July 31,
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2002;
$75,000,000 for the four fiscal quarters
ending on or about October
31, 2002; and
$95,000,000 for the four fiscal quarters
ending January 31, 2003".
"SECTION 5.26. MINIMUM AVAILABILITY. Minimum availability
under Total Availability in an amount at least equal to the
following levels at all times during each fiscal quarters:
"Minimum Availability Period
-------------------- ------
$20,000,000 at all times during the fiscal
quarter ending on or about
April 30, 2002; and
$10,000,000 at all times during the fiscal
quarter ending on or about
July 31, 2002."
Section 4. Conditions Precedent to Second Amendment.
--------- ----------------------------------------
The effectiveness of the transactions described herein shall
be subject to the following conditions:
(a) This Agreement shall have been executed and delivered
by Borrower, Agent and the Required Banks;
(b) Borrower shall have executed and/or delivered to Agent
a certificate of the Secretary or Assistant Secretary of Borrower
certifying as to the due authorization, execution and delivery by
Borrower of this Agreement;
(c) The fees and disbursements of the Banks (as applicable)
shall have been paid in full; and
(d) All legal matters relating to this Agreement shall be
satisfactory to Agent and its counsel.
Section 5. Ratification.
--------- ------------
Borrower hereby ratifies and confirms all of its
obligations, covenants, duties and agreements set forth in the
Credit Agreement, as amended by the terms hereof. All references
to the "Credit Agreement" or the "Agreement" contained in the
Credit Agreement, the Note, the Security Agreement and all other
documents and instruments evidencing obligations of Borrower
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under or in connection with the Credit Agreement, the Note or the
Security Agreement, shall be deemed to be amended to refer to the
Credit Agreement, as amended by the terms hereof.
Section 6. Expenses.
--------- --------
All costs and expenses, including reasonable attorneys'
fees, relating to the negotiation, preparation, execution and
delivery of this Agreement and all instruments, agreements and
documents contemplated hereby shall be the responsibility of
Borrower.
Section 7. Miscellaneous.
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This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to
contracts made and to be performed within such State. This
Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together
shall constitute one and the same instrument. The headings of
the Articles and Sections of this Agreement are inserted for
convenience only and shall not constitute a part hereof.
Section 8. No Defenses.
--------- -----------
Borrower hereby acknowledges and agrees that the Credit
Agreement, as amended by the terms hereof, and the other
Transaction Documents are not subject as of the date hereof to
any defenses, rights of setoff, claims or counterclaims that
might limit the enforceability thereof.
Section 9. Amendment Fee.
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In consideration of Banks' commitment to enter into this
Agreement, Borrower hereby agrees to pay to each Bank that enters
into this Agreement, an amendment fee equal to three-eighths of
one percent (.375%) of such Bank's Commitment.
Section 10. Waiver.
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The Required Banks hereby waive Borrower's failure to
observe and perform the covenants set forth in Sections 5.16 and
5.17 of the Credit Agreement with respect to the year ending
January 31, 2002. The waiver described in the preceding sentence
shall be effective only as to the individual period described and
as to the specific financial covenants identified herein.
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IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed by their respective officers hereunto duly
authorized, all as of the day and year first above written.
AGENT:
FLEET NATIONAL BANK
as Administrative Agent, Issuing
Bank, Swingline Lender and a Bank
By: /s/ Xxxxxxx X. Xxxxx
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
BORROWER:
XXXXXXXXX XXXXX, INC.
By: /s/ Xxxxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Sr. Vice President,
Finance and Treasurer
REQUIRED BANKS:
CREDIT SUISSE FIRST BOSTON
By: /s/ Xxxx X'Xxxx
---------------------------
Name: Xxxx X'Xxxx
Title: Director
By: /s/ Xxxxxxxxx Xxxxxxx
---------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: Associate
US BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President
THE PROVIDENT BANK
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxxx X. Xxxxxx
Title: AVP
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
LASALLE BUSINESS CREDIT
By: /s/ Xxxxxxx Xxxxxxx
---------------------------
Name: Xxxxxxx Xxxxxxx
Title: Assistant Vice President
FIRST UNION NATIONAL BANK
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Managing Director
SIEMENS FINANCIAL SERVICES, INC.
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: VP - Credit
TRANSAMERICA BUSINESS CAPITAL
CORPORATION (As successor to
Transamerica Business Credit
Corporation)
By: /s/ Xxxxx Xxxxxxxxxx
---------------------------
Name: Xxxxx Xxxxxxxxxx
Title: Senior Vice President
