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EXHIBIT 10(x)
SECOND AMENDMENT AND WAIVER TO CREDIT AGREEMENT
THIS SECOND AMENDMENT AND WAIVER (this "AMENDMENT"), to the Credit
Agreement dated as of July 30, 1997, among SAFETY 1ST, INC., a Massachusetts
corporation ("SAFETY"), SAFETY 1ST HOME PRODUCTS CANADA INC., a Canadian federal
corporation ("SAFETY CANADA" and, together with Safety, the "BORROWERS"), each
of the financial institutions from time to time parties thereto as lenders (the
"LENDERS"), BT COMMERCIAL CORPORATION, as agent (in such capacity, the "AGENT")
for the Lenders and BANKERS TRUST COMPANY, as issuer of letters of credit (in
such capacity, the "ISSUING BANK"), is made as of January 23, 1998 among the
Borrowers and the Lenders.
WHEREAS, the Borrowers, the Lenders, the Agent and the Issuing Bank are
parties to the Credit Agreement, dated as of July 30, 1997 (as heretofore
amended on October 29, 1997 and as the same may be further amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT";
capitalized terms used herein shall have the meanings assigned to them in the
Credit Agreement unless otherwise defined herein);
WHEREAS, the Borrowers have requested that the Lenders agree to amend the
Credit Agreement to, among other things, increase the Commitment of each Lender;
and
WHEREAS, the Lenders are agreeable to such amendments, but only on the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the parties hereto hereby agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. Effective as of the date hereof,
but subject to the satisfaction of the conditions precedent set forth in
Section 3, the Credit Agreement is hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is amended by inserting the
following definitions in their proper alphabetical sequence:
"'OUTSTANDING SUPPLEMENTAL AMOUNT' means, on any day, the amount by
which (a) the sum of (i) the outstanding principal balance of the Revolving
Loans on such day and (ii) the Letter of Credit Obligations outstanding on
such day exceeds (b) the sum of (i) the
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Accounts Borrowing Base on such day and (ii) the Inventory Borrowing Base
on such day.
'SUPPLEMENTAL AMOUNT' means (a) $1,500,000 from January 23, 1998 to
February 22, 1998, (b) $1,000,000 from February 23, 1998 to March 22, 1998,
(c) $500,000 from March 23, 1998 to April 22, 1998 and (d) $0 thereafter.
'SUPPLEMENTAL AMOUNT FEE' is defined in Section 4.5 (b)."
(b) The definition of "Accounts Borrowing Base" in Section 1.1 of the
Credit Agreement is amended by deleting "75%" and substituting therefor "80%."
(c) The definition of "Borrowing Base" in Section 1.1 of the Credit
Agreement is amended by
(i) deleting "and" in subsection (a) thereof and substituting
therefor; and
(ii) inserting at the end of subsection (b) thereof the following:
"and (c) the supplemental Amount on such day."
(d) The definition of "Fees" in Section 1.1 of the Credit Agreement is
amended by inserting "Supplemental Amount Fee" immediately after "Unused Line
Fee,."
(e) The definition of "Line of Credit" in Section 1.1 of the Credit
Agreement is amended by deleting "$27,500,000" and substituting therefor
"$35,000,000."
(f) The definition of "Unused Line Fee" is amended by inserting "(a)"
immediately after "4.5."
(g) Section 2.6 (c) of the Credit Agreement is amended and restated as
follows:
"(c) DISTRIBUTION OF INTEREST, UNUSED LINE FEES AND SUPPLEMENTAL
AMOUNT FEES. Interest on the Revolving Loans (including Agent Advances),
together with the amount of the Unused Line Fee and the Supplemental Amount
Fee, shall be allocated by the Agent to each Lender in accordance with the
Proportionate Share of Revolving Loans actually advanced by and repaid to
each Lender, and shall accrue from and including the date such Revolving
Loans are so advanced and to but excluding the date such Revolving Loans
are either repaid by a Borrower or actually settled under this Section.
After the end of each month, the Agent shall, upon receipt from a Borrower,
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distribute to each Lender its Proportionate Share of the interest, Unused
Line Fee and Supplemental Amount Fee accrued during such month. The Agent
shall, upon receipt from a Borrower, distribute interest on Eurodollar Rate
Loans promptly after it is received from a Borrower.
(h) Section 4.5 of the Credit Agreement is amended and restated as follows:
"Section 4.5. UNUSED LINE FEE AND SUPPLEMENTAL AMOUNT FEE.
(a) The Borrowers shall jointly and severally pay to the Agent for
distribution to the Lenders on the first Business Day of each month and on
the Expiration Date a fee equal to 0.50% per annum calculated monthly in
arrears on the average unused portion of the total Commitments at the close
of business each day during the immediately preceding month or occurring
prior to the Expiration Date (the 'UNUSED LINE FEE').
(b) The Borrowers shall jointly and severally pay to the Agent for
distribution to the Lenders on the first Business Day of each month a fee
equal to 0.50% per annum calculated monthly in arrears on the average daily
amount of the Outstanding Supplemental Amount during the immediately
preceding month (the 'SUPPLEMENTAL AMOUNT FEE')."
(i) Schedule 1 to the Credit Agreement is amended and restated in the
form of Annex I hereto.
SECTION 2. WAIVER. Effective as of the date hereof, but subject to the
satisfaction of the conditions of effectiveness set forth in Section 3 hereof,
the Lenders hereby waive compliance with Section 7.2(u) of the Credit Agreement
with respect to the two fiscal quarters ended December 31, 1997, PROVIDED that
this waiver will not be effective if the EBITDA of Safety and its Subsidiaries
for the two fiscal quarters ended December 31, 1997 is less than $5,500,000.
SECTION 3. EFFECTIVENESS. This Amendment shall become effective upon
the Agent's receipt of (a) this Amendment, duly executed by the Borrowers and
the Lenders, and (b) payment (i) of an amendment fee of $37,500 for the ratable
benefit of the Lenders and (ii) for all costs and expenses incurred by the Agent
in connection with the preparation, execution and delivery of this Amendment and
the documents contemplated hereby, including, without limitation, the reasonable
fees and expenses of counsel to the Agent. Sections 1 and 2 hereof shall become
effective when, and only when, the Agent shall have additionally received
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all of the following documents, each of which shall be in form and substance
satisfactory to the Agent:
(a) Certified copies of (i) the resolutions of the Board of Directors
of each Borrower approving this Amendment, the documents delivered in connection
herewith and the matters contemplated hereby and thereby and (ii) all documents
evidencing other necessary corporate actions and governmental approvals, if any,
with respect to this Amendment and the transactions contemplated hereby.
(b) A certificate of the Secretary or an Assistant Secretary of each
Borrower certifying the names and true signatures of the officers of such
Borrower who are authorized to sign this Amendment and the documents delivered
in connection herewith to which such Borrower is a party.
(c) An opinion of counsel for the Borrowers, covering such matters
relating to this Amendment as the Agent shall reasonably request, including an
opinion to the effect that the transactions contemplated hereby do not conflict
with or constitute a default under Safety's Series A Preferred Stock.
(d) A certificate signed by a duly authorized officer of Safety
certifying that (i) the representations and warranties contained in Section 4
hereof are true and correct on and as of the date of such certificate as though
made on and as of such date, (ii) the representations and warranties contained
in Section 6.1 of the Credit Agreement are true and correct on and as of the
date of such certificate as though made on and as of such date, except to the
extent that such representations and warranties expressly relate solely to an
earlier date (in which case such representations and warranties shall have been
true and correct on and as of such earlier date) and (iii) no Default or Event
of Default has occurred and is continuing.
(e) A certificate executed by an Authorized Officer certifying that,
since September 30, 1997, there has been change, occurrence, development or
event which has had or could reasonably be expected to have a Material Adverse
Effect.
(f) A certificate executed by the chief financial officer of each
Credit Party to the effect that such Credit Party is solvent after giving
effect to the transactions contemplated by this Amendment.
(g) A consent, substantially in the form of Exhibit A hereto, duly
executed by the Guarantors.
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(h) Amended and Restated Revolving Notes, each substantially in the
form of Exhibit B, duly executed by the Borrowers in favor of each Lender.
(i) Such other documents, instruments, opinions, materials and
information as the Agent may request.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS. Each of
the Borrowers represents and warrants as follows:
(a) The execution, delivery and performance by each Borrower of this
Amendment, the Credit Agreement as amended hereby and the documents delivered in
connection herewith to which such Borrower is a party (i) are within such
Borrower's corporate powers and authority, have been duly authorized by all
necessary corporate action and do not contravene (A) such Borrower's Governing
Documents (including, without limitation, the certificate of designation for any
preferred stock of a Borrower), (B) any Requirement of Law applicable to it or
any of its properties or (C) any franchise, license, permit, indenture,
contract, lease, agreement, instrument or other commitment to which it is a
party or by which it or any of its properties are bound, (ii) will not result in
a Default or an Event of Default and (iii) will not result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by any Borrower (other than Liens permitted by the
Credit Agreement).
(b) This Amendment, the Credit Agreement as amended hereby and the
documents delivered in connection herewith to which such Borrower is a party
constitute the legal, valid and binding obligations of such Borrower enforceable
against such Borrower in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting creditor's rights generally and general principles of equity.
(c) There is no pending or, to the best of its knowledge, threatened
litigation, proceeding, inquiry or other action seeking an injunction or other
restraining order with respect to the transactions contemplated by this
Amendment or the Credit Agreement as amended hereby.
(d) Since September 30, 1997 there has occurred no change, occurrence,
development or event which has had or could reasonably be expected to have a
Material Adverse Effect.
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(e) All consents, filings and approvals required in connection with
the execution, delivery and performance by such Borrower of this Amendment and
the Credit Agreement as amended hereby have been obtained or made and are in
full force and effect.
SECTION 5. REFERENCE TO AND EFFECT ON THE CREDIT DOCUMENTS.
(a) Upon the effectiveness of this Amendment, on and after the date
hereof, each reference in the Credit Agreement to (i) "this Agreement,"
"hereunder," "hereof," "herein" and words of like import, and such words or
words of like import in each reference in the Credit Documents, shall mean and
be a reference to the Credit Agreement as amended hereby.
(b) Except as specifically amended and waived hereby, all of the terms
and provisions of the Credit Agreement shall remain in full force and effect and
are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as an amendment to or a waiver
of any right, power or remedy of the Agent or the Lenders under any of the
Credit Documents, or constitute an amendment to or a waiver of any provision of
any of the Credit Documents.
(d) This Amendment shall be deemed to be a Credit Document for
all purposes.
SECTION 6. EXECUTION IN COUNTERPARTS; ETC. This Amendment may be
executed in counterparts each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument. This Amendment and each of the other documents
delivered in connection herewith may be executed and delivered by telecopier
with the same force and effect as if the Game was a fully executed and delivered
original manual counterpart.
SECTION 7. COSTS, EXPENSES AND TAXES. The Borrowers shall
jointly and severally pay any and all stamp and other taxes payable or
determined to be payable in connection with the execution and delivery of this
Amendment and the documents contemplated hereby or delivered in connection
herewith, and agrees to hold the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes.
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SECTION 8. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND
ENFORCEMENT OF THIS AMENDMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAW PRINCIPLES THEREOF (OTHER
THAN SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized as of the
date first above written.
BORROWERS
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SAFETY 1ST, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Name:
Title:
SAFETY 1ST, HOME PRODUCTS CANADA INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------------
Name: Xxxxxxx X. Xxxx
Title:
LENDERS
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BT COMMERCIAL CORPORATION
By: /s/ Xxxxxxxx X. Xxxxxx, Xx.
-------------------------------------
Name: Xxxxxxxx X. Xxxxxx, Xx.
Title: V.P.
LASALLE NATIONAL BANK
By: /s/ Xxxxxxxxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
Title: Sr. Vice President
BNY FINANCIAL CORPORATION
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name:
Title: V.P.
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SUMMIT COMMERCIAL/GIBRALTAR CORP.
By: /s/ Xxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Exec. Vice Pres.
FINOVA CAPITAL CORPORATION
By: /s/ Xxxx Xxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxx Xxxx X. Xxxxxxxxxx
Title: A.V.P.
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ANNEX I
SCHEDULE 1
List of Lenders, Lending Offices
and Commitments
---------------------------------
LENDER REVOLVING
COMMITMENT
BT Commercial Corporation $7,000,000
00 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
LaSalle National Bank $7,000,000
000 X. XxXxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
BNY Financial Corporation $7,000,000
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Summit Commercial/Gibraltar Corp. $7,000,000
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Finova Capital Corporation $7.000,000
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
