FOURTH AMENDMENT TO CREDIT AGREEMENT
AND OTHER TRANSACTION DOCUMENTS
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This Fourth Amendment to Credit Agreement and Other
Transaction Documents (the "Agreement"), made as of the 31st day
of March, 1997, by and between FLEET NATIONAL BANK, a national
banking association organized under the laws of the United States
of America having a place of business at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, in its capacity as agent and as a
lender ("Fleet") and FRENCH FRAGRANCES, INC., a Florida
corporation with its principal place of business at ▇▇▇▇▇ ▇.▇.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower").
W I T N E S S E T H:
WHEREAS, pursuant to the terms and conditions of that
certain Credit Agreement dated ▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇ and Bank of America Illinois ("B of A"), as amended by a
First Amendment to Credit Agreement and Other Transaction
Documents dated as of May 10, 1996, as further amended by a
Second Amendment to Credit Agreement and Other Transaction
Documents dated as of August 28, 1996 and as further amended by a
Third Amendment to Credit Agreement and Other Transaction
Documents dated as of December 31, 1996 (as amended, the "Credit
Agreement"), Lenders agreed to make term loans and revolving
credit loans available to Borrower, subject to the terms and
conditions of the Credit Agreement; and
WHEREAS, B of A has assigned to Fleet all of its right,
title and interest in and to its portion of the Loans (as defined
in the Credit Agreement) pursuant to the terms of an Assignment
and Acceptance Agreement of even date herewith; and
WHEREAS, as a result of the assignment, Fleet shall be the
only Lender at this time; and
WHEREAS, the parties have agreed to certain modifications to
the Credit Agreement necessary to reflect the current
relationship of the parties; and
WHEREAS, Fleet is willing to amend the Credit Agreement and
the Security Documents 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.
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.
Borrower hereby represents and warrants to Fleet 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 Security Documents, as applicable, 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 constitutes the
valid and binding obligations of Borrower, enforceable against
Borrower in accordance with its 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 Fleet has been advised in writing of any inaccuracy with
respect to such representations or warranties and has 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 Fleet 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:
Section 3.01. Amendments to Definitions.
The definitions of "▇▇▇▇▇ Term Note", "Borrowing Base",
"Business Day", "Lender", Revolving Credit Facility", "Revolving
Credit Note", "Term Loans" and "Term Loan Principal" set forth in
Section 1.01 of the Credit Agreement are hereby amended to read
in their entirety as follows:
"▇▇▇▇▇ Term Note" or "▇▇▇▇▇ Term Notes" shall mean the term
note or term notes of Borrower issued to Lender pursuant to
Article III hereof, in substantially the form attached hereto as
Exhibit B-Amended, which promissory note evidences the obligation
of Borrower to repay Lender the ▇▇▇▇▇ Term Loan Principal loaned
by Lender, together with interest thereon, as the same may be
amended, supplemented, extended and modified from time to time in
accordance with the terms thereof.
"Borrowing Base" shall mean, as of any date, the sum of,
without duplication, (i) eighty-five percent (85%) of Insured
Eligible Accounts Receivable determined as of such date, plus
(ii) eighty-five percent (85%) of Approved Eligible Accounts
Receivable determined as of such date, plus, (iii) eighty percent
(80%) of Eligible Accounts Receivable (other than Insured
Eligible Accounts Receivable or Approved Eligible Accounts
Receivable) determined as of such date, plus (iv) the lesser of
sixty percent (60%) of Eligible In-House Inventory (for the
period from May 10, 1996 through October 31, 1996 and for each
fiscal year thereafter for the period from July 1 through
October 31) or fifty percent (50%) of Eligible In-House Inventory
(for the period from November 1, 1996 through June 30, 1996 and
for each fiscal year thereafter for the period from November 1
through June 30); provided that the portion of the Borrowing Base
derived from clause (iv) shall be capped for the period from
December 1 through June 30 at Twenty Seven Million Dollars
($27,000,000); for the period from July 1 through October 31 at
Thirty Million Dollars ($30,000,000) and for the period
November 1 through November 30 at Twenty Million Dollars
($20,000,000), and provided further there shall be a reserve
against total Eligible In-House Inventory of One Million Two
Hundred Thousand Dollars ($1,200,000). The foregoing definition
of "Borrowing Base", may be amended from time to time by the
execution and delivery of an Amendment Letter or other written
instrument executed by Borrower and Lenders.
"Revolving Credit Facility" shall mean the Fifty-Five
Million Dollar ($55,000,000) revolving credit facility available
to the Borrower pursuant to the provisions of Article II hereof
and subject to the other terms and conditions of this Agreement.
"Lender" or "Lenders" shall mean Fleet National Bank and
together with any other bank or financial institution which
becomes a party to this Agreement.
"Business Day" shall mean any day except a Saturday, Sunday
or other day on which commercial banks in Providence, Rhode
Island are authorized or required to close.
"Revolving Credit Note" or "Revolving Credit Notes" shall
mean the secured revolving credit note of Borrower issued to
Lender in the aggregate principal amount not to exceed Fifty-Five
Million Dollars ($55,000,000) and substantially in the form
attached hereto as Exhibit F-Amended, which promissory note
evidences the obligations of Borrower to repay Lender the
Advances made by Lender under the Revolving Credit Facility,
which note is hereby incorporated herein by reference and made a
part hereof, as such Revolving Credit Note may be amended,
extended or renewed from time to time by the execution and
delivery of an Amendment Letter or other written instrument
executed and delivered by Lender hereunder.
"Term Loans" or "Term Loan" shall mean the Six Million and
04/100 Dollars ($6,000,000.04) term loan made by Lender to
Borrower pursuant to Section 3.02 hereof.
"Term Loan Principal" shall mean the principal amount
outstanding under the ▇▇▇▇▇ Term Note.
Section 3.02. Deletion of Definitions.
The following definitions are hereby deleted in their
entirety:
"Bank of America Term Loan Maturity Date";
"Bank of America Term Loan";
"Bank of America Term Loan Principal"; and
"Bank of America Term Note".
Section 3.03. Amendment to Section 2.02.
Section 2.02 of the Credit Agreement is hereby amended to
read in its entirety as follows:
"The Advances made by Lender pursuant to Section
2.01 hereof shall be evidenced by the Revolving
Credit Note issued by Borrower to the order of Lender
in an original principal amount of Fifty-Five Million
Dollars ($55,000,000)."
Section 3.04. Amendment to Section 2.03(a).
Section 2.03(a) of the Credit Agreement is hereby amended to
read in its entirety as follows:
"Section 2.03. The Revolving Credit Commitment.
(a) The Revolving Credit Commitment shall be equal to the
lesser of:
(i) the Borrowing Base or the Net Borrowing Base (as
applicable) as in effect from time to time, or
(ii) Forty Million Dollars ($40,000,000); provided,
however, that the maximum Revolving Credit Commitment
contemplated by this clause (ii) shall be adjusted in accordance
with the following schedule:
Revolving Credit
Commitment
After Giving
Date of Amount of Effect to
Adjustment Adjustment Adjustment
---------- ---------- -----------------
January 1, 1996
through May 10, 1996 $10,000,000 $30,000,000
May 11, 1996
through May 31, 1996 $5,000,000 $35,000,000
August 28, 1996
through December 31, 1996 $15,000,000 $55,000,000
March 31, 1997
through June 30, 1997 $5,000,000 $45,000,000
July 1, 1997 through
December 31, 1997 $15,000,000 $55,000,000
January 1, 1998 through
June 30, 1998 $10,000,000 $30,000,000."
Provided, however, the availability under the Revolving Credit
Commitment can be further adjusted (upward or downward) upon
execution and delivery of a Revolving Credit Commitment
Adjustment Letter.
Section 3.05. Agency Status.
All terms and provisions of Article XI regarding Agent shall
remain in effect notwithstanding the fact that Fleet is the sole
Lender as of the date hereof. Until such time as there are
additional lenders, Fleet as Lender, shall perform all functions
of the Agent.
Section 3.06. Amended Schedules and Exhibits.
Exhibit A attached hereto is hereby intended to replace
Schedule 1.01(C) to the Credit Agreement and is hereby intended
to read as Schedule 1.01(C) - Amended.
Exhibit B attached hereto is hereby intended to replace
Exhibit B to the Credit Agreement and is hereby intended to read
as Exhibit B - Amended. Exhibit C attached hereto is hereby
intended to replace Exhibit F to the Credit Agreement and is
hereby intended to read as Exhibit F - Amended.
Section 3.07. Security Documents.
(a) Borrower and Fleet 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 Fleet,
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 benefit of Fleet of a security
interest in and lien upon all collateral covered by any of the
Security Documents.
(c) Borrower and Fleet 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 benefit of Fleet 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 4. Conditions Precedent to Fourth 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 Fleet, and consented to and confirmed by the parties
to the Subordination Agreement and the Subordination Agreement
II.
(b) Fleet shall have received payment of the fees described
in Section 9 hereof in immediately available funds.
(c) The fees and disbursements of Fleet's counsel shall be
paid in full.
(d) Borrower shall have executed and/or delivered to Fleet
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 corporate charter and by-laws and
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. Fleet may conclusively rely on such
certificates until Fleet 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.
(e) All legal matters relating to this Agreement shall be
satisfactory to Fleet 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 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 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.
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 8. Consent of Subordinated Lenders.
By their signature hereon, each of the parties to the
Subordination Agreement (other than Fleet), and the Subordination
Agreement II hereby (a) consent to the amendments of the Credit
Agreement and other Transaction Documents pursuant to this
Agreement, (b) confirm that the term "Senior Indebtedness" under
the Subordination Agreement and the Subordination Agreement II
shall include all amounts outstanding under the Credit Agreement,
as amended by this Agreement, including all amounts outstanding
under the Notes, and (c) ratify and confirm their respective
agreements in all respects.
Section 9. Facility Fee.
In consideration of Fleet's commitment to enter into this
Agreement, Borrower hereby agrees to pay to Fleet a facility fee
equal to Fifty Thousand Dollars ($50,000). In addition, Borrower
acknowledges its obligation to pay the remaining one-half
($35,000) of the Facility Fee required by that certain Third
Amendment to Credit Agreement dated as of December 31, 1996 and
agrees to pay to Fleet the Facility Fee.
Section 10. 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.
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.
LENDERS:
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇
Vice President
BORROWER:
FRENCH FRAGRANCES, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
President
CONSENTED AND AGREED:
NATIONAL TRADING
MANUFACTURING, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
President
BEDFORD CAPITAL CORPORATION
By: /s/ E. ▇▇▇▇▇ ▇▇▇▇▇▇▇
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E. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Executive Vice President
/s/ ▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇
SCHEDULE 1.01(c)
LENDERS' COMMITMENT SHARE AND TERM LOAN SHARE
Lender Share Interest
Fleet National Bank
▇▇▇▇▇ Term Note 100%
Revolving Credit Commitment 100%
