FIRST AMENDMENT TO CREDIT AGREEMENT
AND OTHER TRANSACTION DOCUMENTS
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This First Amendment to Credit Agreement and Other Transaction
Documents (the "Agreement"), made as of the 31st day of December, 1997, by
and between FLEET NATIONAL BANK, a national banking association with its
principal office at 000 Xxxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx 00000,
in its capacity as agent and as lender ("Lender") sometimes hereinafter
referred to as "Agent" or "Lender", as appropriate depending on
responsibility and FRENCH FRAGRANCES, 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:
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WHEREAS, pursuant to the terms and conditions of that certain Credit
Agreement dated May 13, 1997 between Borrower and Lender (the "Credit
Agreement"), Lender agreed to make a revolving credit loan available to
Borrower, subject to the terms and conditions of the Credit Agreement; and
WHEREAS, Lender desires to take a security interest in the assets of
FRM Services, Inc., a Delaware corporation ("FRM") and wholly owned
subsidiary of Borrower; and
WHEREAS, Lender is 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 Lender that:
(a) Borrower is duly organized, validly existing and in good
standing as a corporation in the state of its incorporation, and is in good
standing and is qualified to do business as a foreign corporation in all
other jurisdictions where it is required to be so qualified, except such
jurisdictions, if any, in which the failure to be so qualified will not
have a material adverse effect on the financial condition, business,
assets, operations or properties of Borrower. Borrower has all requisite
power and authority to own and lease its assets and properties and to
conduct its business in the manner presently conducted by it.
(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; provided, however, that FRM will
be required under the Indenture dated as of May 13, 1997, between Borrower
and Marine Midland Bank, as Trustee, to execute a supplemental indenture
and a subsidiary guarantee providing that FRM will guarantee Borrower's
obligations with respect to the Senior Notes issued thereunder.
(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.
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The Credit Agreement is hereby amended, effective as of the date
hereof, as follows:
Section 3.01. Additional Definitions.
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Section 1.01 of the Credit Agreement is hereby amended by adding the
following new definition:
"FRM Security Agreement" shall mean that certain Security Agreement
of even date herewith between FRM and Agent pursuant to which FRM has
granted to Agent for the ratable benefit of the Lenders a first priority
security interest in all of its fixtures and tangible and intangible
personal properties now owned or hereafter acquired to the extent provided
therein.
Section 3.02. Amendment to Section 4.02.
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Section 4.02 of the Credit Agreement is hereby amended by adding one
new subsection as follows:
"(c) the FRM Security Agreement; and
Section 4.02 is further amended by deleting the "and" at the end
of the current subsection "(b)" and relettering subsection (c) as
"(d)", accordingly.
Section 4. Security Documents.
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(a) Borrower and Lender each hereby confirm that all references to
the "Credit Agreement" or the "Agreement" in any of the Security Documents
shall be deemed to be references to the Credit Agreement as amended hereby;
that the obligations of Borrower under the Credit Agreement, as amended
hereby, and fees and expenses in connection therewith constitute additional
indebtedness, liabilities and obligations of Borrower to Lender, all of
which are secured by the Security Documents, and that all references to
"indebtedness" and/or "obligations" secured by such instruments shall be
deemed amended to include all obligations of Borrower in respect of the
Credit Agreement as amended hereby.
(b) Borrower hereby ratifies and reaffirms its grant and conveyance
to Agent for the ratable benefit of the Lenders of a security interest in
and lien upon all collateral covered by any of the Security Documents.
(c) Borrower and Lender each hereby confirm that nothing contained
herein or done pursuant hereto shall limit or be construed to limit the
security interest or lien previously granted by Borrower to Agent for the
ratable benefit of the Lender under any of the Security Documents, or the
priority thereof over other liens, encumbrances and security interests.
Except as amended hereby, the Security Documents shall remain in full force
and effect and Borrower hereby ratifies and confirms the Security Documents
in all other respects, including, without limitation, the continuing grant
of a lien on and interest in the collateral covered thereby.
Section 5. Conditions Precedent to First 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 and Lender.
(b) The fees and disbursements of Lender's counsel shall be paid in
full on the Effective Date.
(c) Borrower shall have executed and/or delivered to Agent the
following:
(i) Certificate of the Secretary or Assistant Secretary of
Borrower certifying as to the due authorization, execution
and delivery by Borrower of this Agreement; and
(ii) Certificate of the Secretary or Assistant Secretary of
Borrower certifying as to the names of the officers of
Borrower authorized to sign this Agreement, and any other
documents or certificates to be delivered pursuant to this
Agreement, together with the true signatures of such officers.
Lender may conclusively rely on such certificates until Agent
shall receive a further certificate of the Secretary or an
Assistant Secretary of Borrower canceling or amending the prior
certificate and submitting the signatures of the officers named
in such further certificate.
(d) FRM shall have executed and/or delivered to Agent the
following:
(i) Certificate of the Secretary or Assistant Secretary of FRM
certifying as to the due authorization, execution and delivery
by FRM of the FRM Security Agreement; and
(ii) Certificate of the Secretary or Assistant Secretary of FRM
certifying as to the names of the officers of FRM authorized to
sign this Agreement, and any other documents or certificates to
be delivered pursuant to this Agreement, together with the true
signatures of such officers. Lender may conclusively rely on
such certificates until Agent shall receive a further
certificate of the Secretary or an Assistant Secretary of FRM
canceling or amending the prior certificate and submitting the
signatures of the officers named in such further certificate.
(e) Lender shall have received a legal opinion of counsel to FRM,
satisfactory in scope and substance to Lender's Counsel.
(f) All legal matters relating to this Agreement shall be
satisfactory to Lender and its counsel.
Section 6. Ratification.
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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 Notes, the Security
Documents and all other documents and instruments evidencing obligations of
Borrower under or in connection with the Credit Agreement, the Notes or the
Security Documents, shall be deemed to be amended to refer to the Credit
Agreement, as amended by the terms hereof.
Section 7. Expenses.
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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 8. Miscellaneous.
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This Agreement shall be governed by and construed in accordance with
the laws of the State of Rhode Island 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 9. No Defenses.
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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 10. Consent of Lender.
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The Lender does hereby consent to the assignment by Borrower of all
accounts receivable on its books as of December 31, 1997 to FRM, which
assignment shall be subject to all existing liens in favor of the Lender.
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.
LENDER:
FLEET NATIONAL BANK
By: /s/ Xxxxxx X.X. Xxxxxx
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Xxxxxx X.X. Xxxxxx
Senior Vice President
AGENT:
FLEET NATIONAL BANK
By: /s/ Xxxxxx X.X. Xxxxxx
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Xxxxxx X. X. Xxxxxx
Senior Vice President
BORROWER:
FRENCH FRAGRANCES, INC.
By: /s/ E. Xxxxx Xxxxxxx
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E. Xxxxx Xxxxxxx
President and Chief
Executive Officer
