FOURTH AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS FOURTH AMENDMENT dated as of October 17, 1997 (this "FOURTH
AMENDMENT") to the Note Purchase Agreements each dated July 7, 1995 is between
CANDLE CORPORATION WORLDWIDE, INC., a Delaware corporation ("WORLDWIDE"), CANDLE
CORPORATION OF AMERICA, a New York corporation ("CANDLE AMERICA"), PARTYLITE
GIFTS, INC., a Delaware corporation ("PARTYLITE"; each of Worldwide, Candle
America and PartyLite being referred to herein as a "PRIOR ISSUER" and
collectively as the "PRIOR ISSUERS"), and BLYTH INDUSTRIES, INC., a Delaware
corporation (the "PARENT"),and each of the institutions which is a signatory to
this Fourth Amendment (collectively, the "NOTEHOLDERS").
RECITALS:
A. The Prior Issuers, the Parent and each of the Noteholders have
heretofore entered into separate and several Note Purchase Agreements each dated
July 7, 1995, as amended by the Amendment of Note Purchase Agreement dated as of
June 30, 1996, Amendment No. 2 to Note Purchase Agreement dated as of December
13, 1996, Amendment No. 3 to Note Purchase Agreement dated as of March 10, 1997
(collectively, the "NOTE AGREEMENTS"). The Prior Issuers have heretofore issued
pursuant to the Note Agreements $25,000,000 aggregate principal amount of their
7.54% Senior Notes due June 30, 2005 (the "NOTES"), all of which principal
amount is presently outstanding. The Noteholders are the holders of 100% of the
outstanding principal amount of the Notes.
B. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Note Agreements unless herein defined or the context
shall otherwise require.
C. On the terms and conditions set forth in this Fourth Amendment,
the Parent desires to assume all of the payment obligations of the Prior Issuers
under the Note Agreements and the Notes pursuant to an Assumption Agreement (the
"ASSUMPTION AGREEMENT") in the form of Exhibit A attached to this Fourth
Amendment.
D. The Prior Issuers are willing to guaranty unconditionally the
obligations of the Parent under the Note Agreements and the Notes, pursuant to
the Guaranty Agreements (the "Guaranty Agreements") in the form of Exhibit B
attached to this Fourth Amendment, and to remain a party to the Note Agreements,
all as set forth below. The Prior Issuers are Wholly-Owned Subsidiaries of the
Parent.
E. The Parent has requested that certain amendments be made to the
Note Agreements.
F. Each of the Noteholders is willing to (i) consent to the
consummation of the transactions contemplated by the Assumption Agreement, (ii)
permit the assumption by the Parent of the obligations of the Prior Issuers
under the Note Agreements and the Notes, provided that the Prior Issuers
unconditionally guaranty the Parent's payment obligations and remain a party to
the Note Agreements, pursuant to the terms and conditions contained herein and
in the Guaranty Agreements, and (iii) amend the Note Agreements in certain
respects as set forth herein.
NOW, THEREFORE, upon the full and complete satisfaction of the
conditions precedent to the effectiveness of this Fourth Amendment set forth in
Section 5 hereof, and for good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Prior Issuers, the Parent and
the Noteholders do hereby agree as follows:
SECTION 1 CONSENT TO ASSUMPTION.
Subject to the terms and conditions of this Fourth Amendment,
effective on the Fourth Amendment Closing Date (as defined below) the
Noteholders hereby consent (a) to the assumption by the Parent of the Prior
Issuers' payment obligations under the Note Agreements and the Notes pursuant to
the Assumption Agreement and (b) (i) to the change in the Prior Issuers' status
from the issuers of the Notes to unconditional guarantors of all payment
obligations of the Parent under the Note Agreements and the Notes pursuant to
the Guaranty Agreements it being understood that the Prior Issuers will remain
party to, and be bound by the terms of, the Note Agreements in all other
respects; and (ii) to the release of the Subsidiary Guarantors and termination
of each of the Subsidiary Guaranties to which they are a party.
SECTION 2 AMENDMENTS TO NOTE AGREEMENTS.
Effective on the Fourth Amendment Closing Date, each of the Note
Agreements is hereby amended as follows:
2.1 THE PARENT AS ISSUER. For all purposes, unless otherwise
stated in this Fourth Amendment, (a) reference to the Company contained in the
Note Agreements shall be deemed to mean the Parent (redundant usage of the term
Parent caused by this Fourth Amendment shall be ignored, i.e., where the Note
Agreements state "the Parent and the Company") and (b) reference to Issuers
contained in the Note Agreements shall be deemed to mean the Prior Issuers.
2.2 AMENDMENTS TO SECTION 5 - REPRESENTATIONS AND WARRANTIES OF THE
ISSUERS AND THE PARENT.
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(a) AMENDMENTS TO SECTION 5.16.
(i) The first line of Section 5.16(a) is hereby amended by
deleting the phrase "Except as described therein,".
(ii) The first line of Section 5.16(a) is hereby amended by
deleting the phrase "SCHEDULE 5.16" and replacing such phrase with
"SCHEDULE 10.2 attached to the Fourth Amendment".
(iii) The third line of Section 5.16(a) is hereby amended by
deleting the date "April 30, 1995," and replacing such date with
October 17, 1997.".
(iv) The third through fifth lines of Section 5.16(a) are hereby
amended by deleting the phrase "since which date there has been no
Material change in the amounts, interest rates, sinking funds,
instalment payments or maturities of the Indebtedness of the Parent,
the Issuers or their respective Subsidiaries except as set forth on
Schedule 5.16.".
2.3 AMENDMENTS TO SECTION 7 - INFORMATION AS TO PARENT AND COMPANY.
(a) AMENDMENTS TO SECTION 7.1. The final proviso to Section
7.1(a)(ii) and the final proviso to Section 7.1(b) are hereby deleted in
their entirety.
(b) AMENDMENTS TO SECTION 7.2.
(i) The preamble to Section 7.2 is hereby amended by deleting
the phrase "and a Senior Financial Officer of the Company".
(ii) The second line of Section 7.2(a) is hereby amended by
deleting the phrase ", the Company and their," and replacing such
phrase with "and its".
(iii) The third and fourth lines of Section 7.2(b) are hereby
amended by deleting the phrase ", each Issuer and their respective"
and replacing such phrase with "and its".
(iv) The ninth line of Section 7.2(b) is hereby amended by
deleting the phrase ", any Issuer or any of their respective" and
replacing such phrase with "or any of its".
(v) The eleventh line of Section 7.2(b) is hereby amended by
deleting the phrase "or any Issuer, as the case may be,".
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(c) AMENDMENTS TO SECTION 7.3.
(i) Section 7.3 is hereby amended by deleting the use of the
phrase "their respective", and replacing such phrase with "its".
(ii) The second line of Section 7.3(a) is hereby amended by
deleting the phrase "or the Issuers".
(iii) The third line of Section 7.3(a) is hereby amended by
deleting the phrase " and each Issuer".
(iv) The fourth line of Section 7.3(a) and the second and eighth
lines of Section 7.3(b) are hereby amended by deleting the phrase ",
the Issuers".
(v) The fifth line of Section 7.3(a) is hereby amended by
deleting the phrase "and any Issuers'".
(vi) The second line of Section 7.3(b) is hereby amended by
deleting the term "Issuers" at the beginning of the second line and
replacing it with the term "Parent".
(vii) The sixth line of Section 7.3(b) is hereby amended by
deleting the phrase "each of the Issuers and".
2.4 AMENDMENTS TO SECTION 8 - PREPAYMENT OF THE NOTES.
(a) AMENDMENTS TO SECTION 8.1.
(i) Section 8.1 is hereby amended by replacing the term
"Issuers" with the term "Parent".
(ii) Section 8.1 is hereby amended by deleting the last sentence
in its entirety.
(b) AMENDMENTS TO SECTION 8.2.
(i) Section 8.2 is hereby amended by replacing the term
"Issuers" with the term "Parent".
(ii) The first line of Section 8.2 is hereby amended by replacing
the word "their" and replacing such word with "its".
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(c) AMENDMENTS TO SECTION 8.4.
(i) Section 8.4 is hereby amended by replacing the term
"Issuers" with the term "Parent".
(d) AMENDMENTS TO SECTION 8.5.
(i) Section 8.5 is hereby amended by replacing the term
"Issuers" with the term "Parent".
(ii) Section 8.5 is hereby amended by deleting the phrase "their
respective" each time it appears, and replacing such phrase with
"its".
(iii)The fourth and fifth lines of Section 8.5 are hereby
amended by replacing the phrase "any of them", and replacing such
phrase with "it".
2.5 AMENDMENTS TO SECTION 9 - AFFIRMATIVE COVENANTS.
(a) AMENDMENTS TO SECTION 9.1.
(i) The eleventh line of Section 9.1 is hereby amended by
deleting the phrase "the Company and its Subsidiaries or".
(b) AMENDMENTS TO SECTION 9.3.
(i) The tenth line of Section 9.3 is hereby amended by deleting
the phrase "the Company and its Subsidiaries or".
(c) AMENDMENTS TO SECTION 9.5.
(i) The fifteenth and sixteenth lines of Section 9.5 are hereby
amended by deleting the phrase "the Company and its Subsidiaries or".
(d) AMENDMENTS TO SECTION 9.6.
(i) The first line of Section 9.6 is hereby amended by adding
the phrase "(unless merged into the Parent or another Prior Issuer)"
after the phrase "each Prior Issuer".
(e) AMENDMENTS TO SECTION 9.7. Section 9.7 is hereby deleted in
its entirety.
2.6 AMENDMENTS TO SECTION 10 - NEGATIVE COVENANTS. Section 10 is
hereby amended and restated to read in its entirety as follows:
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10. NEGATIVE COVENANTS
Each of the Prior Issuers and the Parent agrees that so long as
any of the Notes are outstanding:
10.1. TRANSACTIONS WITH AFFILIATES.
The Parent and each Prior Issuer will not and will not permit any of
their respective Subsidiaries to enter into directly or indirectly any Material
transaction or Material group of related transactions (including without
limitation the purchase, lease, sale or exchange of properties of any kind or
the rendering of any service) with any Affiliate (other than the Parent or a
Subsidiary), except in the ordinary course and pursuant to the reasonable
requirements of the Parent's or such Subsidiary's business and upon fair and
reasonable terms no less favorable to the Parent or such Subsidiary than would
be obtainable in a comparable arm's-length transaction with a Person not an
Affiliate.
10.2. PROHIBITED LIENS.
The Parent and each Prior Issuer will not, and will not permit any of
their respective Subsidiaries to, directly or indirectly, create, incur, assume
or permit to exist any Lien on or with respect to any property or asset of any
kind (including any document or instrument in respect of goods or accounts
receivable) of the Parent, any Prior Issuer or any of their respective
Subsidiaries, whether now owned or hereafter acquired, or any income profits
therefrom, or file or permit the filing of, or permit to remain in effect, any
charge, mortgage, finance statement or other similar notice of any Lien with
respect to any such property, asset, income or profits under the recording or
notice statutes of any jurisdiction, except:
(a) Permitted Liens;
(b) Liens existing as of the date hereof and described in
Schedule 10.2 annexed hereto; PROVIDED that to the extent any
such Lien secures any greater amount of Indebtedness than the
respective amount thereof set forth on Schedule 10.2, such Lien
shall not be permitted by this Section 10.2(b) but only by
Section 10.2(g);
(c) Liens created or incurred after the date hereof by the
Parent or any of its Subsidiaries on assets useful and intended
to be used in carrying on the business of the Parent and its
Subsidiaries (subject to Section 10.3), securing the purchase
price, or cost of construction or improvement, thereof; PROVIDED,
HOWEVER, that (i) the Liens shall attach solely to assets
purchased or constructed, (ii) the Liens shall be created within
twelve months of the date of the acquisition, purchase,
construction or improvement of the assets to which the Liens
attached,
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and (iii) at the time of acquisition, purchase, construction or
improvement of such assets, the unpaid principal amount of all
Indebtedness secured by such Liens on such assets (whether or not
assumed by the Parent or a Subsidiary) shall not exceed an amount
equal to the lesser of (A) the purchase price, or the cost of
construction or improvement, of such assets incurred by the Parent
or any of its Subsidiaries and (B) the fair market value of such
assets at the time of acquisition, purchase, construction or
improvement of such assets (as determined in good faith by the
Board of Directors of the Parent);
(d) Liens existing on property of a Person immediately prior to
its being consolidated with or merged into the Parent or any of
its Subsidiaries or immediately prior to its becoming a
Subsidiary of the Parent; PROVIDED that to the extent any Lien
described in Items 11 through 14 of Schedule 10.2 secures any
greater amount of Indebtedness than the respective amount thereof
set forth in Schedule 10.2, such Lien shall not be permitted by
this Section 10.2(d) but only by Section 10.2(g);
(e) Liens on assets leased by the Parent or one of its
Subsidiaries pursuant to a Capital Lease securing the obligations
of the Parent or such Subsidiary under such Capital Lease;
(f) Liens on assets of a Foreign Subsidiary, created after the
date hereof, securing Indebtedness of such Foreign Subsidiary;
and
(g) Liens securing Indebtedness of the Parent or any of its
Subsidiaries not described in Section 10.2(a) through 10.2(f)
above (the "OTHER LIENS"), PROVIDED that after giving effect to
the creation, incurrence or assumption, or after accounting for
the existence, of all Other Liens, the aggregate principal amount
of all Indebtedness secured by all Other Liens does not exceed
10% of Consolidated Net Worth.
10.3. SUBSIDIARY INDEBTEDNESS. The Parent will not permit any of its
Subsidiaries (including Candle America, Candle Worldwide and PartyLite) to
directly or indirectly create, assume, incur or guaranty, or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness for
borrowed money except:
(a) a Subsidiary may become and remain liable with respect to
Indebtedness to the Parent or a Wholly-Owned Subsidiary of the
Parent;
(b) the Subsidiaries may remain liable with respect to
Indebtedness existing as of the Fourth Amendment Closing Date and
described in Schedule 10.3;
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(c) a Subsidiary may remain liable with respect to Indebtedness
outstanding at the time such Subsidiary becomes a Subsidiary;
PROVIDED that (i) such Indebtedness shall not have been incurred
in contemplation of such Subsidiary becoming a Subsidiary and
(ii) immediately after such Subsidiary becomes a Subsidiary, no
Default shall exist; PROVIDED that any increase in the amount of
the Indebtedness described in Items 11 through 14 of Schedule
10.3 at such time over the respective amount thereof set forth in
Schedule 10.3 shall not be permitted by this Section 10.3(c) but
only by Section 10.3(g);
(d) a Subsidiary may become and remain liable with respect to
Indebtedness incurred to refinance, in whole or in part, any
outstanding Indebtedness permitted under Section 10.3(b) or
10.3(c); PROVIDED, HOWEVER, that the principal amount of such
refinancing Indebtedness does not exceed the principal amount of
the Indebtedness so refinanced;
(e) a Subsidiary may become and remain liable with respect to
Indebtedness secured by Liens permitted by Section 10.2; PROVIDED
that the recourse of the holders of such Indebtedness in respect
thereof shall be limited to the assets subject to such Lien, and
such holder shall have no recourse to any other assets of such
Subsidiary or to the Parent or any other Subsidiary with respect
thereto;
(f) a Prior Issuer may become and remain liable with respect to
Indebtedness which is in all respects pari passu with the
obligations of such Prior Issuer under the Loan Documents,
provide however, that with respect to PartyLite, a creditor under
such Indebtedness shall have entered into an inter-creditor
agreement acceptable to the Noteholders; and
(g) a Subsidiary may become and remain liable after the date
hereof with respect to Indebtedness not described in Sections
10.3(a) through 10.3(f) above, PROVIDED that after giving effect
to such Subsidiary's creation, assumption, incurrence or guaranty
of (or such Subsidiary's becoming liable with respect to), or
after accounting for the existence of, such other Indebtedness,
the aggregate principal amount of all such Indebtedness of
Subsidiaries does not exceed 15% of Consolidated Net Worth.
10.4. INVESTMENTS. The Parent will not, and will not permit any of
its Subsidiaries to, make directly or indirectly any Investment in any
Person, including any joint venture, except:
(a) the Parent and its Subsidiaries may continue to own the
Investments owned by them as of the date hereof and described in
Schedule 10.4;
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(b) the Parent and its Subsidiaries may make and own Investments
in any Person which is, or immediately after giving effect to
such Investment will become, a Subsidiary of the Parent;
(c) the Parent and its Subsidiaries may make and own Investments
in Cash Equivalents or in money market funds that invest solely
in Cash Equivalents; and
(d) the Parent and its Subsidiaries may make and own Investments
not described in Sections 10.4(a) through (c) above, PROVIDED
that the aggregate amount of all such Investments does not exceed
15% of Consolidated Net Worth.
10.5. LEVERAGE RATIO. The Leverage Ratio will not, at any time
exceed 2.00 to 1.00.
10.6. MINIMUM CONSOLIDATED NET WORTH. Consolidated Net Worth will at
no time be less than the sum of $160,000,000 plus 50% of Cumulative
Positive Net Income plus 50% of Cumulative Equity Proceeds. For
purposes of this Section, "CUMULATIVE POSITIVE NET INCOME" means, as
of any date, the sum of Consolidated Net Income for each Fiscal
Quarter ending after the Fourth Amendment Closing Date (or, in the
case of the first such Fiscal Quarter, the period from May 1, 1997
through the end of such Fiscal Quarter, treated as a single period)
and on or prior to such date for which such Consolidated Net Income is
a positive amount, disregarding any Fiscal Quarter for which
Consolidated Net Income is a negative amount and "CUMULATIVE EQUITY
PROCEEDS" means, as of any date, the aggregate amount by which
Consolidated Net Worth shall have been increased by reason of the
issuance of capital stock of the Parent subsequent to April 30, 1997
and on or prior to such date.
10.7. MERGERS AND SALES OF ASSETS. The Parent will not (i)
consolidate or merge with or into any other Person; PROVIDED that the
Parent may merge with another Person if (x) the Parent is the
corporation surviving such merger and (y) after giving effect to such
merger, no Default shall have occurred and be continuing. The Parent
will not permit the sale, lease or other transfer, directly or
indirectly, of all or any substantial part of the assets of the Parent
and its Subsidiaries, taken as a whole, to any other Person or
Persons; PROVIDED that the foregoing shall not prohibit the Parent and
its Subsidiaries from (i) transferring assets with an aggregate book
value of less than $70,000,000 in one or more related or unrelated
transactions to one or more Persons in connection with the leasing of
such assets from such Person or Persons, (ii) selling inventory in the
ordinary course of business, (iii) disposing of obsolete assets no
longer used in their respective businesses or (iv) disposing of any
assets within twelve months after the acquisition thereof.
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10.8. EXISTING TERM LOANS. Not later than December 31, 1997, the
Parent will prepay in full the Existing Term Loans and terminate the
related lending facilities.
10.9. PRIOR ISSUERS. The Parent will maintain ownership free and
clear of any Lien of all capital stock of the Prior Issuers from time
to time outstanding.
2.7 AMENDMENTS TO SECTION 11 - EVENTS OF DEFAULT.
(a) AMENDMENT TO SECTION 11(a) AND 11(b).
(i) The first lines of Section 11(a) and 11(b) are hereby
amended by deleting the phrase "Issuers default", and replacing such
phrase with "Parent defaults".
(b) AMENDMENT TO SECTION 11(f).
(i) Section 11(f) is hereby amended by deleting the dollar
figure of "$3,000,000" each time it appears, and replacing such dollar
figure with "$5,000,000".
(c) AMENDMENTS TO SECTION 11(g).
(i) The third line of Section 11(g) is hereby amended by
deleting the phrase "comprises less than 2% of the Consolidated Net
Income" and replacing such phrase with "comprises less than 5% of the
Consolidated Net Worth".
(d) AMENDMENTS TO SECTION 11(i).
(i) The second line of Section 11(i) is hereby amended by
deleting the dollar figure "$500,000" and replacing such dollar figure
with "$5,000,000".
(ii) The third line of Section 11(i) is hereby amended by adding
the phrase "(other than Immaterial Insolvent Subsidiaries)" after the
phrase "respective Subsidiaries".
(e) AMENDMENTS TO SECTION 11(k).
(i) The first and second lines of Section 11(k) are hereby
amended by deleting the phrase "the Parent seeks ... hereof, or".
(ii) The fourth line of Section 11(k) is hereby amended by
deleting the phrase "or any provision of the Parent Guaranty".
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2.8 AMENDMENTS TO SECTION 12 - REMEDIES OF DEFAULT, ETC..
(a) AMENDMENT TO SECTION 12.4.
(i) The ninth and tenth lines of Section 12.4 are hereby amended
by deleting the phrase ", including Section 13 hereof,".
2.9 AMENDMENTS TO SECTION 13 - GUARANTY BY PARENT.
(a) Section 13 is hereby amended by deleting it in its entirety, and
replacing such Section with the following:
13. INTENTIONALLY DELETED
2.10 AMENDMENTS TO SECTION 14 - REGISTRATION; EXCHANGE; SUBSTITUTION
OF NOTES.
(a) For all purposes, unless otherwise stated in this Fourth
Amendment, reference to each Issuer contained in Section 14 of the Note
Agreements shall be deemed to mean the Parent.
3.0 AMENDMENT TO SECTION 15 - PAYMENTS ON NOTES.
(a) For all purposes, unless otherwise stated in this Fourth
Amendment, reference to each Issuer contained in Section 15 of the Note
Agreements shall be deemed to mean the Parent.
3.1 AMENDMENT TO SECTION 16 - EXPENSES, ETC..
(a) For all purposes, unless otherwise stated in this Fourth
Amendment, each reference to "Issuers" contained in Section 16 shall be
deemed to mean "the Parent and the Prior Issuers" and references to
"Issuer" shall be deemed to mean "Prior Issuers".
3.2 AMENDMENT TO SECTION 18 - AMENDMENT AND WAIVER.
(b) AMENDMENT TO SECTION 18.2.
(i) For all purposes, unless otherwise stated in this Fourth
Amendment, reference to each Issuer contained in Section 18.2 of the
Note Agreements shall be deemed to mean the Parent.
3.3 AMENDMENT TO SECTION 20 - REPRODUCTION OF DOCUMENTS.
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(a) For all purposes, unless otherwise stated in this Fourth
Amendment, reference to each Issuer contained in Section 20 of the Note
Agreements shall be deemed to mean the Parent.
3.4 AMENDMENT TO SECTION 21 - CONFIDENTIAL INFORMATION.
(a) For all purposes, unless otherwise stated in this Fourth
Amendment, reference to the Company contained in Section 21 of the Note
Agreements shall be deemed to mean the Prior Issuers.
(b) The twenty-second line of Section 21 is hereby amended by
deleting the term "Company" and replacing such term with "Parent".
3.7 AMENDMENT TO SECTION 22 - SUBSTITUTION OF PURCHASER.
(a) For all purposes, unless otherwise stated in this Fourth
Amendment, reference to each Issuer contained in Section 22 of the Note
Agreements shall be deemed to mean the Parent.
SECTION 3 AMENDMENTS TO EXHIBITS AND SCHEDULES.
(a) Effective on the Fourth Amendment Closing Date, the form of Note
attached to the Note Agreements as Exhibit 1 is hereby amended to read as
set forth on Exhibit A attached to this Fourth Amendment.
(b) Effective on the Fourth Amendment Closing Date, the form of
Subsidiary Guaranty attached to the Note Agreements as Exhibit 4.7 is
hereby amended to read as set forth on Exhibit B attached to this Fourth
Amendment.
(c) Effective on the Fourth Amendment Closing Date, the form of
Compliance Certificate attached to the Note Agreements as Exhibit 7.2 is
hereby amended to read as set forth on Exhibit C attached to this Fourth
Amendment.
(d) Effective on the Fourth Amendment Closing Date, the Schedule 5.4
attached to the Note Agreements is hereby amended to read as set forth on
Exhibit D attached to this Fourth Amendment.
(e) Effective on the Fourth Amendment Closing Date, Schedule B to the
Note Agreements is hereby amended by including the following definitions:
"ACQUISITION" means an acquisition by the Parent or any of its
Consolidated Subsidiaries of a company, a division, a location or a
line of business or of all or substantially all of the assets of any
of the foregoing.
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"CANDLE WORLDWIDE" means Candle Corporation Worldwide, Inc., a
Delaware corporation.
"CONSOLIDATED DEBT" means at any date the Indebtedness of the
Parent and its Consolidated Subsidiaries, determined on a consolidated
basis as of such date.
"CONSOLIDATED EBITDA" means, for any period, the sum of (i)
Consolidated Net Income for such period plus (ii) to the extent
deducted in the determination thereof, interest expense, depreciation
and amortization expense and provision for income taxes. Consolidated
EBITDA for any four-quarter period will be adjusted on a historical
pro forma basis to reflect any Acquisition closed during such period
as if such Acquisition had been closed on the first day of such
period.
"CONSOLIDATED NET WORTH" means at any date the consolidated
stockholders' equity of the Parent and its Consolidated Subsidiaries,
determined as of such date.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or
other entity the accounts of which would be consolidated with those of
the Parent in its consolidated financial statements if such statements
were prepared as of such date.
"EXISTING TERM LOANS" means the term loan facilities identified
as Items 2 and 3 in Schedule 10.2.
"FISCAL QUARTER" means a consolidated fiscal quarter of the
Parent and its Subsidiaries ending on a Quarterly Date.
"FOREIGN SUBSIDIARY" means any Subsidiary organized outside the
United States and conducting substantially all its business outside
the United States.
"LEVERAGE RATIO" means, at any date, the ratio of (i)
Consolidated Debt at such date to (ii) Consolidated EBITDA for the
period of four consecutive fiscal quarters most recently ended on or
prior to such date.
"PRIOR ISSUERS" means Candle Worldwide, Candle America and
PartyLite.
"QUARTERLY DATE" means each January 31, April 30, July 31 and
October 31, commencing with January 31, 1998.
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(f) Effective on the Fourth Amendment Closing Date, Schedule B to the
Note Agreements is hereby amended by deleting the definitions listed below
and replacing such definitions with the following:
"CASH EQUIVALENTS" means (a) marketable securities issued or
directly and unconditionally guaranteed by the United States
Government or issued by any agency or instrumentality thereof and
backed by the full faith and credit of the United States, in each case
maturing within one year from the date of issuance thereof; (b)
obligations of a municipality, a state, a territory or a possession of
the United States, or any political subdivision of any of the
foregoing or of the District of Columbia as described in Section
103(a) of the Code if these investments are rated at least AA- by
Standard & Poor's Ratings Services or its equivalent by another
nationally recognized credit rating agency or are secured, as to
payments of principal and interest, by a letter of credit provided by
a financial institution or by insurance provided by a bond insurance
company whose debt is rated at least AA- by Standard & Poor's Ratings
Services or its equivalent by another nationally recognized credit
rating agency; (c) commercial paper maturing no more than 270 days
from the date of acquisition thereof and, at the time of acquisition,
having the highest rating by a nationally recognized credit rating
agency; (d) investments in short term asset management accounts
offered by any bank described in clause (e) of this definition for the
purpose of investing in loans to a corporation (other than an
Affiliate of the Parent or any of its Subsidiaries) organized under
the laws of the United States of America or any state thereof or the
District of Columbia and rated at least A-1 by Standard and Poor's
Ratings Services are at least P-1 by Xxxxx'x Investors Service, Inc.;
(e) certificates of deposit or bankers' acceptances maturing within
one year from the date of acquisition thereof issued by any bank or
trust company organized under the laws of the United States of America
or any state thereof or the District of Columbia having unimpaired
capital, surplus and undivided profits of not less than $250,000,000
and (f) tax exempt and tax advantaged auction rate products issued by
financial institutions and rated at least AA- by Standard & Poor's
Ratings Services or its equivalent by another nationally recognized
credit rating agency.
"IMMATERIAL SUBSIDIARY" means, at any time, any Subsidiary of the
Parent having consolidated assets at such time in an amount less than
5% of Consolidated Net Worth at such time.
"INDEBTEDNESS" with respect to any Person means, at any time,
without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of
14
business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to
any such property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money); PROVIDED that for
purposes of the definition of "Consolidated Debt", contingent
liabilities in respect of undrawn amounts under letters of credit
shall be excluded;
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a
type described in any clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such
Person of the character described in clauses (a) through (g) to the
extent such Person remains legally liable in respect thereof not
withstanding that any such obligations is deemed to be extinguished
under GAAP.
"LIEN" means, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any
interest or title of any vendor, lessor, lender or other secured party
to or of such Person under any conditional sale or other title
retention agreement or Capital Lease, upon or with respect to any
property or asset of such Person (including in the case of stock
issued by a direct or indirect Subsidiary of the Parent; stockholder
agreements, voting trust agreements and all similar arrangements in
which any mortgage, lien, pledge, charge or security interest is
granted with respect to such stock).
"MATERIAL" means material in relation to the business,
operations, affairs, financial condition, assets or properties of the
Parent and its Subsidiaries taken as a whole.
SECTION 4 REPRESENTATIONS AND WARRANTIES OF THE PRIOR ISSUERS AND THE PARENT.
4.1 To induce the Noteholders to execute and deliver this Fourth
Amendment (which representations shall survive the execution and delivery of
this Fourth Amendment), each of the Prior Issuers and the Parent, jointly and
severally, represents and warrants to the Noteholders that:
(a) the Parent is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and is duly
qualified as a
15
foreign corporation and is in good standing in each jurisdiction in
which such qualification is required by law, other than those
jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect; this Fourth Amendment and
the Assumption Agreement have been duly authorized, executed and
delivered by the Prior Issuers and the Parent, respectively, and
constitute the legal, valid and binding obligation, contract and
agreement of the Prior Issuers and the Parent, respectively, enforceable
against each of them in accordance with their respective terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or
limiting creditors' rights generally;
(b) each of the Amended and Restated Notes has been duly
authorized, executed and delivered by the Parent, constitutes the legal,
valid and binding obligation, contract and agreement of the Parent,
enforceable against the Parent in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting
creditors' rights generally;
(c) the Guaranty Agreement has been duly authorized, executed
and delivered by the Prior Issuers and constitutes the legal, valid and
binding obligation, contract and agreement of the Prior Issuers enforceable
against the Prior Issuers in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting
creditors' rights generally;
(d) the Note Agreements, as amended by this Fourth Amendment,
constitute the legal, valid and binding obligations, contracts and
agreements of the Prior Issuers and the Parent, respectively, enforceable
against each of them in accordance with their respective terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting
creditors' rights generally;
(e) the execution, delivery and performance by the Prior Issuers
and the Parent, respectively, of this Fourth Amendment, the Assumption
Agreement and the Guaranty Agreements, as applicable, and the performance
by the Prior Issuers and the Parent, as applicable, of the Note Agreements
and the Amended and Restated Notes (i) have been duly authorized by all
requisite corporate action and, if required, shareholder action, (ii) do
not require the consent or approval of any governmental or regulatory body
or agency, and (iii) will not (A) violate (1) any provision of law,
statute, rule or regulation or their respective articles of incorporation
or bylaws, (2) any order of any court or any rule, regulation or order of
any other agency or government binding upon either of them, or (3) any
provision of any material indenture, agreement or other instrument to which
either of them is a party or by which either of their properties or assets
are or may be bound, including, without limitation, that certain Credit
Agreement dated as of October 17, 1997 among the Parent, the banks listed
therein, Xxxxxx Guaranty Trust Company of New York, as
16
Documentation Agent and Bank of America National Trust and Savings
Association, as Administrative Agent or (B) result in a breach or
constitute (alone or with due notice or lapse of time or both) a default
under any indenture, agreement or other instrument referred to in clause
(iii)(A)(3) of this Section 4.1(e);
(f) as of the date hereof and after giving effect to this Fourth
Amendment and the consummation of the transactions contemplated hereby, no
Default or Event of Default has occurred which is continuing; and
(g) all the representations and warranties contained in Section
5 of the Note Agreements (excluding Section 5.3) are true and correct in
all material respects with the same force and effect as if made by the
Prior Issuers and the Parent on and as of the date hereof.
SECTION 5 CONDITIONS TO EFFECTIVENESS OF THIS FOURTH AMENDMENT.
5.1 This Fourth Amendment shall not become effective until, and shall
become effective when, each and every one of the following conditions shall have
been satisfied (the date on which such conditions are satisfied being the
"Fourth Amendment Closing Date"):
(a) executed counterparts of this Fourth Amendment, duly
executed by the Prior Issuers, the Parent and the holders of 100%
of the outstanding principal amount of the Notes, shall have been
delivered to the Noteholders;
(b) the Noteholders shall have received originally executed
copies of (i) the Assumption Agreement, executed by the Prior Issuers and
the Parent, (ii) Amended and Restated Notes in the form of Exhibit A
attached hereto, in the principal amount of the Notes, executed by the
Parent and (iii) the Guaranty Agreements, executed by the Prior Issuers;
(c) the Noteholders shall have received evidence satisfactory to
the Required Holders that the Xxxxxx Credit Agreement is in full force and
effect;
(d) the Noteholders shall have received (i) a copy of the
Certificate of Incorporation of the Parent and a good standing certificate
for the Parent, each certified by the Secretary of State of the State of
Delaware, and (ii) a copy of the Bylaws of the Parent, certified by the
Secretary of the Parent;
(e) the Noteholders shall have received a copy of the
resolutions of the Boards of Directors of each of the Prior Issuers and the
Parent authorizing the execution, delivery and performance by the Prior
Issuers and the Parent of this Fourth Amendment, the Assumption Agreement,
the Amended and Restated Notes and the Guaranty Agreements, as applicable,
and the performance by the Prior Issuers and the
17
Parent, of the Note Agreements, as amended by this Fourth Amendment,
certified by its Secretary or an Assistant Secretary;
(f) the Noteholders shall have received (i) a certificate of the
Secretary of the Prior Issuers stating that there have been no amendments
to the Prior Issuers' respective articles of incorporation or Bylaws since
July 7, 1995, and (ii) a signature and incumbency certificate of the Prior
Issuers and the Parent;
(g) the representations and warranties of the Prior Issuers and
the Parent set forth in Section 4 hereof shall be true and correct on and
as of the date hereof and as of the Fourth Amendment Closing Date, and the
Noteholders shall have received an Officer's Certificate of the Prior
Issuers and the Parent to such effect;
(h) the Noteholders shall have received the favorable opinion of
counsel to the Prior Issuers and the Parent as to the matters set forth in
Sections 4.1(a), 4.1(b), 4.1(c), 4.1(d) and 4.1(e) hereof, and as to such
other matters as the Required Holders may reasonably request, which opinion
shall be in form and substance satisfactory to the Required Holders; and
(i) The Prior Issuers and the Parent shall have paid the
reasonable fees and expenses of O'Melveny & Xxxxx LLP, special counsel to
the Noteholders, in connection with the negotiation, preparation, approval,
execution and delivery of this Fourth Amendment and the Exhibits hereto.
(j) The Prior Issuers and the Parent shall have paid (i) a fee
of $5,600 to Connecticut General Life Insurance Company, (ii) a fee of
$1,200 to Life Insurance Company of North America, (iii) a fee of $1,200 to
Connecticut General Life Insurance Company, on behalf of one or more
separate accounts and (iv) a fee of $2,000 to United of Omaha Life
Insurance Company.
Upon receipt of all of the foregoing, this Fourth Amendment shall
become effective.
SECTION 6 MISCELLANEOUS.
6.1 This Fourth Amendment shall be construed in connection with
and as part of each of the Note Agreements, and except as modified and
expressly amended by this Fourth Amendment, all terms, conditions and
covenants contained in the Note Agreements and the Notes are hereby ratified
and shall be and remain in full force and effect.
6.2 Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this Fourth Amendment
may refer to the Note Agreements without making specific reference to this
Fourth Amendment but nevertheless all such references shall include this Fourth
Amendment unless the context otherwise requires.
18
6.3 The descriptive headings of the various Sections or parts of this
Fourth Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
6.4 This Fourth Amendment shall be governed by and construed in
accordance with New York law.
6.5 The execution hereof by the parties hereto shall constitute a
contract between such parties for the uses and purposes herein set forth. This
Fourth Amendment may be executed in any number of counterparts, each executed
counterpart constituting an original, but all together only one agreement.
(Remainder of page intentionally left blank)
19
In witness whereof, the parties hereto have caused this Fourth
Amendment to be duly executed and delivered as of the date first written above.
BLYTH INDUSTRIES, INC.
By /s/ Xxxxxx X. Xxxx
_____________________________
Xxxxxx X. Xxxx
Chief Financial Officer
CANDLE CORPORATION WORLDWIDE, INC.
By /s/ Xxxxxx X. Xxxx
_____________________________
Xxxxxx X. Xxxx
Vice President, Chief Financial Officer
and Treasurer
CANDLE CORPORATION OF AMERICA
By /s/ Xxxxxx X. Xxxx
_____________________________
Xxxxxx X. Xxxx
Senior Vice President and Treasurer
PARTYLITE GIFTS, INC.
By /s/ Xxxxxx X. Xxxx
_____________________________
Xxxxxx X. Xxxx
Vice President and Treasurer
S-1
The foregoing is hereby
agreed to as of the
date thereof.
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By /s/ Xxxxx X. Xxxxxxxxx
______________________
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
S-2
The foregoing is hereby
agreed to as of the
date thereof.
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, on
behalf of one or more
separate accounts
BY: CIGNA INVESTMENTS, INC.
By /s/ Xxxxx X. Xxxxxxxxx
______________________
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
S-2
The foregoing is hereby
agreed to as of the
date thereof.
LIFE INSURANCE COMPANY OF
NORTH AMERICA
BY: CIGNA INVESTMENTS, INC.
By /s/ Xxxxx X. Xxxxxxxxx
______________________
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Director
S-2
The foregoing is hereby
agreed to as of the
date thereof.
UNITED OF OMAHA LIFE INSURANCE COMPANY
By /s/ Xxxx Xxxxxxx
________________
Name: Xxxx Xxxxxxx
Title: Vice President
S-2
