AMENDMENT NO. 5 TO CREDIT AND GUARANTEE AGREEMENT
AMENDMENT NO. 5 TO CREDIT AND GUARANTEE AGREEMENT (this "Amendment"), dated
as of March 30, 2003, among REMINGTON PRODUCTS COMPANY, L.L.C., a Delaware
limited liability company (the "Company") REMINGTON CONSUMER PRODUCTS LIMITED, a
company incorporated under the laws of England (the "UK Borrower"), REMINGTON
PRODUCTS GMBH, a company organized and existing under the laws of Germany (the
"German Borrower"), REMINGTON CONSUMER PRODUCTS (IRELAND) LIMITED, a company
incorporated under the laws of Ireland (the "Irish Borrower") and REMINGTON
PRODUCTS (CANADA) INC., a company incorporated under the laws of Canada (the
"Canadian Borrower"; together with the Company, the UK Borrower, the German
Borrower and the Irish Borrower, the "Borrowers"), the lending institutions
party hereto and Fleet Capital Corporation, as administrative agent (the
"Agent").
WHEREAS, the Borrowers, certain lenders, Fleet Securities, Inc., as sole
advisor, lead arranger and book manager, Congress Financial Corporation (New
England), as syndication agent and coarranger, and the Agent entered into a
certain Credit and Guarantee Agreement, dated as of August 21, 2001, as amended
as of September 30, 2001, as of March 28, 2002, as of July 1, 2002 and as of
November 15, 2002 (such agreement being referred to herein as the "Credit
Agreement"), pursuant to which one or more of such lenders have agreed, subject
to certain terms and conditions, to make revolving advances to one or more of
the Borrowers and to issue or to cause the issuance of letters of credit for the
account of one or more of the Borrowers;
WHEREAS, the Borrowers have requested that the Required Lenders agree to
amend certain provisions of the Credit Agreement and the Required Lenders,
subject to the terms and conditions set forth herein, are willing to grant such
request;
NOW, THEREFORE, the Borrowers and the Required Lenders hereby agree as
follows:
SECTION 1. CAPITALIZED TERMS. Capitalized terms used but not defined herein
shall have the respective meanings set forth in the Credit Agreement.
SECTION 2. AMENDMENTS TO THE CREDIT AGREEMENT.
2.1 The definition of "Applicable Margin" contained in Section 1
(Definitions) of the Credit Agreement is hereby amended by deleting such
definition in its entirety and replacing it with the following new definition:
"Applicable Margin": for each Type of Loan, the rate per annum set forth
under the relevant column heading below, based upon the Fixed Charge Coverage
Ratio in effect from time to time as described below:
Eurocurrency Loans and Sterling ABR Commitment
LIBOR Loans Loans Fee
------------------------------- ----- ----------
Fixed Charge Coverage Ratio of less than 3.00% 1.75% .50%
1.20 to 1.00
Fixed Charge Coverage Ratio of greater 2.50% 1.25% .375%
than or equal to 1.20 to 1.00 and less
than 1.40 to 1.00
Fixed Charge Coverage Ratio of greater 2.25% 1.00% .375%
than or equal to 1.40 to 1.00 and less
than 1.60 to 1.00
Fixed Charge Coverage Ratio of greater
than or equal to 1.60 to 1.00 and less 2.00% .75% .25%
than 1.80 to 1.00
Fixed Charge Coverage Ratio of greater 1.75% .50% .25%
than or equal to 1.80 to 1.00
Notwithstanding the foregoing, if the Company shall fail to timely deliver
the statements and certificates required under subsections 9.4(a), (b) and (c)
for any period the Applicable Margin shall be the highest provided for herein
until such time as the appropriate statements and certificates are delivered.
Any change in the Applicable Margin shall become effective on the date which is
three Business Days following the date of delivery by the Company of its
financial statements and related certificates for the relevant fiscal period in
accordance with the provisions of subsection 9.4(a) or (b), as the case may be,
and subsection 9.4(c). The Applicable Margin shall initially be based upon the
financial statements of the Company delivered to the Agent and the Lenders for
the fiscal quarter ended December 31, 2002."
2.2 The following new definition is hereby added to Section 1 (Definitions)
of the Credit Agreement in its appropriate alphabetical order:
" " Commitment Fee": the percentage set forth in the definition of
Applicable Margin under the heading Commitment Fee."
2.3 Section 6.7 (Commitment Fee; Other Fees) of the Credit Agreement is
hereby amended by deleting the phrase "a commitment fee of three-eighths of one
percent (3/8 of 1%) per annum" each time that it appears in clause (a) of such
Section and replacing it with "the Commitment Fee per annum".
2.4 Section 9.4 (Financial Statements, Reports, etc.) of the Credit
Agreement is hereby amended by deleting (A) subsection (x) of clause (g) of such
Section in its entirety and replacing it with the following:
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(x) "reporting date" shall mean each of (1) the last day of each fiscal month
and, in addition, the fifteenth day of such fiscal month solely in the
event that (x) the average unused amount available under the Borrowing Base
of the Company and each of the other Borrowers for the most recently ended
fiscal month is less than $15,000,000 (as calculated in accordance with
Section 1.2(e) hereof with respect to the Foreign Borrowers) and (y) the
Fixed Charge Coverage Ratio at the end of the most recently ended fiscal
month of the Company for the twelve most recent consecutive fiscal months
is less than 1.40 to 1.00, and (2) any other time when the Agent notifies
the Company that it reasonably believes that the then-existing Borrowing
Base of any Borrower is materially inaccurate; and", and
(B) clause (m) of such Section in its entirety and replacing it with the
following:
"(m) if at the end of any fiscal quarter the (i) Fixed Charge Coverage
Ratio is less than 1:40 to 1:00 for the four most recent consecutive fiscal
quarters and (ii) the average unused amount available under the Borrowing Base
of the Company and each of the other Borrowers is less than $25,000,000 (as
calculated in accordance with Section 1.2(e) hereof with respect to the Foreign
Borrowers and which solely for the purposes of this Section 9.4(m), so long as
there are no Loans outstanding, shall include the cash and cash equivalents of
the Company in excess of $2,000,000, if any) during such fiscal quarter, the
Borrower shall be required to deliver to the Agent monthly unaudited
consolidated balance sheets of the Company and its consolidated Subsidiaries as
at the end of the calendar month following the end of such fiscal quarter (and
for each calendar month thereafter as set forth in the immediately succeeding
sentence of this Section 9.4(m)) and the related unaudited consolidated
statements of income and of cash flows for such month and the portion of the
fiscal year through the end of such month, setting forth in each case in
comparative form the figures for the previous year, accompanied by a certificate
of a Responsible Officer of the Company (in his or her capacity as such) (i)
certifying that (1) such financial statements are fairly stated in all material
respects (subject to normal year-end audit adjustments) and (2) such Responsible
Officer has no actual knowledge of the occurrence of any Event of Default or
Default or, if s/he has knowledge of any Event of Default or Default, specifying
the nature and extent thereof and any corrective action taken or proposed to be
taken with respect thereto and (ii) setting forth the computation of the Fixed
Charge Coverage Ratio as at the end of such fiscal quarter in reasonable detail
satisfactory to the Agent. The Borrower shall deliver the monthly financial
statements referred to in the immediately preceding sentence (x) for the
calendar month following the end of any Fiscal Quarter in which clauses (i) and
(ii) above apply and for each calendar month thereafter until such time as there
is a Fiscal Quarter in which such clauses (i) and (ii) do not apply and (y) to
the Agent as soon as available, but in no event later than 30 days after the end
of such calendar month; and".
2.5 Section 9.7 (Maintaining Records; Access to Properties and Inspections)
of the Credit Agreement is hereby amended by deleting clause (b) thereto in its
entirety and replacing it with the following:
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"(b) The Company will, and will cause each of the other Borrowers to,
permit the Agent (which may be accompanied by any Lender and/or its
representatives) from time to time to conduct (upon reasonable notice to a
Responsible Officer of the Company) an audit of the accounts receivable and
inventories of the Borrowers and of the Borrowing Base of each Borrower,
provided, that if no Default or Event of Default shall have occurred and be
continuing, the Company shall only be responsible for the expenses of two audits
in any one year period in an amount not to exceed $25,000 per each audit plus
reasonable out-of-pocket costs and expenses of the Agent in connection
therewith; provided, further, that in the event the (i) average unused amount
available under the Borrowing Base of the Company and each of the other
Borrowers is greater than $25,000,000 (as calculated in accordance with Section
1.2(e) hereof with respect to the Foreign Borrowers) during the most recently
ended two fiscal quarter period and (ii) the average aggregate of the Domestic
Revolving Credit Exposure plus the Dollar equivalent of the Foreign Revolving
Credit Exposure is less than $10,000,000 during the most recently ended two
fiscal quarter period, the Agent may, in its sole discretion, only conduct one
such audit at the expense of the Company, and provided, further, that the
foregoing limitations (including, without limitation, the cost of the audit)
shall not apply in the event that a Default or Event of Default shall have
occurred and be continuing. The Company will, and will cause each of the other
Borrowers to, permit Hilco Appraisal Services, LLC or another third party
appraiser satisfactory to the Agent to conduct (upon reasonable notice to a
Responsible Officer of the Company and at the sole expense of the Company not to
exceed $20,000 in any fiscal year in the case of any appraisal referred to in
the following clause (i)) (i) an appraisal of the inventories of the Borrowers,
up to one time in each fiscal year and (ii) a "desk top review" or limited scope
appraisal of the inventories of the Borrowers solely in the event that any of
the Borrowers enters into a new product category; provided, however, that such
limitations shall not apply in the event that a Default or Event of Default
shall have occurred and be continuing."
2.6 Section 10.10 (Limitations on Certain Debt Payments and Interest
Payments) of the Credit Agreement is hereby amended by deleting clause (b) of
such Section in its entirety and replacing it with the following:
"(b) make any payment on account of the Senior Subordinated Indebtedness
(other than of interest as permitted by the Indenture with respect thereto);
provided that the Company may prepay, repurchase or redeem in any consecutive
sixty (60) day period up to $10,000,000 (not to exceed $40,000,000 in the
aggregate during any fiscal year) of Senior Subordinated Indebtedness so long as
(i) no Default or Event of Default shall have occurred and be continuing or
would result therefrom and (ii) the Agent shall have received evidence
satisfactory to it demonstrating that immediately after giving effect to any
such prepayment, repurchase or redemption, (x)(1) the aggregate amount of the
Borrowing Base of the Company plus the Dollar equivalent of the aggregate
Borrowing Bases of the other Borrowers less (2) the aggregate of the Domestic
Revolving Credit Exposure plus the Dollar equivalent of the Foreign Revolving
Credit Exposure shall be no less than $15,000,000 and (y) the aggregate of the
Domestic Revolving Credit Exposure plus the Dollar equivalent of the Foreign
Revolving Credit Exposure shall be less than $50,000,000."
2.7 Section 10.13 (Fixed Charge Coverage Ratio) of the Credit Agreement is
hereby amended by deleting such Section in its entirety and replacing it with
the following:
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"10.13 Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio
at the end of each fiscal quarter for the four most recent consecutive fiscal
quarters ending on December 31, 2002 and each fiscal quarter thereafter to be
less than 1.10 to 1.00."
2.8 Section 10.14A (Total Liabilities to Tangible Net Worth Ratio) of the
Credit Agreement is hereby amended by deleting such section in its entirety and
replacing it with the following:
"10.14A Total Liabilities to Tangible Net Worth Ratio. Permit the Total
Liabilities to Tangible Net Worth Ratio at the end of each fiscal
quarter set forth below to be greater than the respective ratios set
forth opposite such period:
Fiscal Quarter ending on or about: Ratio
---------------------------------- -----
March 31 of any fiscal year 1.40:1.00
June 30 of any fiscal year 1.60:1.00
September 30 of any fiscal year 2.30:1.00
December 31 of any fiscal year 1.30:1.00"
2.9 Section 10.14B (Minimum Excess Availability) of the Credit Agreement.
is hereby amended by deleting such section in its entirety and replacing it with
the following:
"10.14B Minimum Excess Availability. Subject to the last sentence of this
Section 10.14(B), permit the daily average of the unused amount
available under the Borrowing Base of the Company and the other
Borrowers for any month to be less than the respective amounts (as
calculated in accordance with Section 1.2(e) hereof with respect to
the Foreign Borrowers) set forth below for the month indicated:
Period Amount
------ ------
February, March and April of any fiscal year $7,000,000
May, June, July, August and September of any fiscal year $5,000,000
October, November and December of
any fiscal year and January of the next fiscal year $9,000,000
Notwithstanding the above, so long as the Fixed Charge Coverage Ratio at the end
of the most recently ended fiscal month of the Company for the twelve most
recent consecutive fiscal months shall be equal to or greater than 1.20 to 1.00,
the Company shall not be required to be in compliance with the above
requirements for such month."
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SECTION 3. EFFECTIVENESS. This Amendment shall become effective when
counterparts hereof have been duly executed and delivered to the Agent by the
Company, on behalf of the Borrowers, and the Required Lenders.
SECTION 4. COUNTERPARTS. This Amendment may be executed in counterparts,
each of which shall be an original, and all of which, taken together, shall
constitute a single instrument. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
SECTION 5. REFERENCES TO CREDIT AGREEMENT. From and after the effectiveness
of this Amendment and the amendment contemplated hereby, all references in the
Credit Agreement to "this Agreement", "hereof", "herein", and similar terms
shall mean and refer to the Credit Agreement, as the provisions thereof have
been amended by this Amendment, and all references in other documents to the
Credit Agreement shall mean such agreement as the provisions thereof have been
amended by this Amendment.
SECTION 6. RATIFICATION AND CONFIRMATION. The Credit Agreement is hereby
ratified and confirmed and, except as herein agreed, remains in full force and
effect. The Company, on behalf of the Borrowers, represents and warrants that
after giving effect to this Amendment (i) all representations and warranties
contained in the Loan Documents are true and correct in all material respects
with the same effect as though such representations and warranties had been made
on and as of the date hereof (except to the extent that such representations or
warranties expressly related to a specified date) and (ii) there exists no
Default or Event of Default.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the day and year
first above written.
REMINGTON PRODUCTS COMPANY,L.L.C.
By:
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Name:
Title:
REMINGTON CONSUMER PRODUCTS LIMITED
By:
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Name:
Title:
REMINGTON PRODUCTS GMBH
By:
------------------------------------------------
Name:
Title
REMINGTON CONSUMER PRODUCTS (IRELAND) LIMITED
By:
------------------------------------------------
Name:
Title:
REMINGTON PRODUCTS (CANADA) INC.
By:
------------------------------------------------
Name:
Title:
FLEET CAPITAL CORPORATION, as Agent and as a Lender
By:
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Name: Xxxxx Xxxxxxx
Title: Vice President
CONGRESS FINANCIALCORPORATION (CENTRAL), as a Lender
By:
------------------------------------------------
Name:
Title:
XXXXXX FINANCIAL, INC., as a Lender
By:
------------------------------------------------
Name:
Title:
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CITIZENS BUSINESS CREDIT CO.,
A DIVISION OF CITIZENS LEASING CORP., as a Lender
By:
------------------------------------------------
Name:
Title:
WHITEHALL BUSINESS CREDIT CORPORATION, as a Lender
By:
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Name:
Title:
THE PROVIDENT BANK, as a Lender
By:
------------------------------------------------
Name:
Title:
PNC, NATIONAL ASSOCIATION, as a Lender
By:
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Name:
Title:
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