Exhibit 10.1
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SIXTH AMENDMENT
Dated as of December 12, 2001
This SIXTH AMENDMENT among Barney's, Inc., a New York
corporation ("Barneys"), Barneys America, Inc., a Delaware corporation ("BAI"),
PFP Fashions Inc., a New York corporation ("PFP"), Barneys (CA) Lease Corp., a
Delaware corporation ("CA Lease"), Barneys (NY) Lease Corp., a Delaware
corporation ("NY Lease"), Xxxxx All-American Sportswear Corp., a New York
corporation ("Xxxxx"), BNY Licensing Corp., a Delaware corporation ("BNY"), and
Barneys America (Chicago) Lease Corp., a Delaware corporation ("Chicago Lease;"
and together with Barney's, BAI, PFP, CA Lease, NY Lease, Xxxxx and BNY
collectively the "Borrowers"), the Lenders (as defined below) and the
Administrative Agent (as defined below), amends the Credit Agreement dated as of
January 28, 1999, as amended from time to time (as so amended, the "Credit
Agreement") entered into among the Borrowers, the financial institutions from
time to time parties thereto (the "Lenders"), the issuing banks from time to
time parties thereto (the "Issuing Banks"), General Electric Capital
Corporation, in its capacity as documentation agent and Citicorp USA, Inc., in
its capacity as agent for the Lenders and the Issuing Banks (the "Administrative
Agent"). Unless otherwise defined herein, the terms defined in the Credit
Agreement shall be used herein as therein defined.
PRELIMINARY STATEMENTS:
(1) The Borrowers and the Requisite Lenders have agreed to
amend the Credit Agreement as hereinafter set forth.
SECTION 1. Amendments to Credit Agreement. The Credit
Agreement is, effective as of the date hereof and subject to the satisfaction of
the conditions precedent set forth in Section 4 below, amended as follows:
(a) The definition of "Applicable Commercial Letter of Credit
Percentage" in Section 1.01 of the Credit Agreement is amended by deleting such
definition in its entirety and substituting therefor a new definition to read as
follows:
"`Applicable Commercial Letter of Credit Percentage' means a
rate equal to 1.50% per annum."
(b) The definition of "Applicable Fixed Rate Margin" in
Section 1.01 of the Credit Agreement is amended by deleting such definition in
its entirety and substituting therefor a new definition to read as follows:
"`Applicable Fixed Rate Margin' means a rate equal to 2.75%
per annum."
(c) The definition of "Applicable Floating Rate Margin" in
Section 1.01 of the Credit Agreement is amended by deleting such definition in
its entirety and substituting therefor a new definition to read as follows:
"`Applicable Floating Rate Margin' means a rate equal to 1.75%
per annum."
(d) The definition of "Applicable Standby Letter of Credit
Percentage" in Section 1.01 of the Credit Agreement is amended by deleting such
definition in its entirety and substituting therefor a new definition to read as
follows:
"`Applicable Standby Letter of Credit Percentage' means a rate
equal to 2.50% per annum."
(e) The definition of "Applicable Usance Letter of Credit
Percentage" in Section 1.01 of the Credit Agreement is amended by deleting such
definition in its entirety and substituting therefor a new definition to read as
follows:
"`Applicable Usance Letter of Credit Percentage' means a rate
equal to 2.00% per annum."
(f) The definition of "Borrowing Base" in Section 1.01 of the
Credit Agreement is amended by deleting such definition in its entirety and
substituting therefor a new definition to read as follows:
"`Borrowing Base' means, as of any date of determination, an
amount equal to the sum of (i) up to ninety percent (90%) of
the face amount of Eligible Receivables less such reserves as
the Administrative Agent, in its reasonable credit judgment,
deems appropriate, plus (ii) up to thirty-seven percent (37%)
of Eligible Retail Inventory less such reserves as the
Administrative Agent, in its reasonable credit judgment, deems
appropriate, plus (iii) up to thirty-seven percent (37%) of
the Inventory being purchased by a Borrower in the ordinary
course of its business for which a Commercial Letter of Credit
is outstanding and has not been drawn upon less such reserves
as the Administrative Agent, in its reasonable credit
judgment, deems appropriate, plus (iv) up to thirty-seven
percent (37%) of the Inventory being purchased by a Borrower
in the ordinary course of its business for which a Usance
Letter of Credit is outstanding and has not been drawn upon
less such reserves as the Administrative Agent, in its
reasonable credit judgment, deems appropriate, plus (v) up to
twenty percent (20%) of Eligible Aged Inventory less such
reserves as the Administrative Agent, in its reasonable credit
judgment, deems appropriate, plus (vi) the Trademark Available
Amount plus, (vii) 100% of the funds constituting Net Cash
Proceeds in the Cash Collateral Account, plus (viii) 100% of
the market value of the Treasury Notes credited to the Control
Account in an amount not to exceed $500,000 but only after
appropriate documentation and opinions, in form and substance
reasonably satisfactory to the Administrative Agent, have been
delivered to the Administrative Agent relating to the
Administrative Agent's first priority Lien in such Treasury
Notes less such reserves as the Administrative Agent, in its
reasonable credit judgment, deems appropriate, minus (ix) the
Rent Reserve, if any, in effect at such time, minus (x) the
amount of Pre-Settlement Exposure at such time. The
Administrative Agent, based on such reasonable credit and
collateral considerations as the Administrative Agent may deem
appropriate, may change from time to time the advance rates in
clauses (i), (ii), (iii) and (iv) above, provided that such
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advance rates do not at any time exceed the respective
percentages set forth above. The Administrative Agent agrees
to give the Borrowers prior written notice of any such
change."
(g) The definition of "Commitment" in Section 1.01 of the
Credit Agreement is amended by deleting such definition in its entirety and
substituting therefor a new definition to read as follows:
"`Commitment' means, with respect to any Lender, the
obligation of such Lender to make Revolving Loans and to
participate in Letters of Credit, and which shall not exceed
the principal amount set forth opposite such Lender's name on
the Annex attached to the Sixth Amendment or on the signature
page of the Assignment and Acceptance by which it became a
Lender, as modified from time to time pursuant to the terms
hereof or to give effect to any applicable Assignment and
Acceptance, and `Commitments' means the aggregate principal
amount of the Commitments of all the Lenders, the maximum
amount of which shall not exceed a principal amount of
$105,000,000, as reduced from time to time pursuant to the
terms hereof."
(h) The definition of "Consolidated EBITDA" in Section 1.01 of
the Credit Agreement is amended by deleting such definition in its entirety and
substituting therefor a new definition to read as follows:
"`Consolidated EBITDA' means, for any period on a consolidated
basis for any Person and its Subsidiaries, (i) the sum of (A)
Consolidated Net Income, (B) depreciation and amortization
expense, (C) Consolidated Interest Expense, (D) federal,
state, local and foreign income taxes, (E) other non-cash
charges and (F) up to $3,000,000 in the aggregate of any cash
equity contributed or Permitted Subordinated Indebtedness
loaned to the Borrowers during Fiscal Years 2000, 2001 and
2002 to the extent not used for Capital Expenditures pursuant
to clause (i) of the first proviso in Section 10.04, minus
(ii) extraordinary gains not already excluded from the
determination of Consolidated Net Income."
(i) The definition of "Consolidated Net Worth" in Section 1.01
of the Credit Agreement is amended by deleting such definition in its entirety
and substituting therefor a new definition to read as follows:
"`Consolidated Net Worth' means, on a consolidated basis for
any Person and its Subsidiaries, (i) total consolidated assets
of such Person minus (ii) total consolidated liabilities of
such Person; provided, however, the impact of the adoption of
FASB Statements No. 141 "Business Combinations" and No. 142
"Goodwill and Other Intangible Assets" shall be excluded from
such calculation. Assets and liabilities shall be determined
in accordance with GAAP, except that investments in, and
moneys due from, Affiliates of Barneys shall be excluded from
total consolidated assets.
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(j) The definition of "Permitted Subordinated Indebtedness" in
Section 1.01 of the Credit Agreement is amended by adding at the end thereof a
proviso to read as follows:
"provided that up to an aggregate of $15,000,000 of such
Indebtedness may be secured by a subordinated Lien pursuant to
(and subject to) terms and conditions reasonably satisfactory
to the Administrative Agent and the Requisite Lenders."
(k) The definition of "Trademark Available Amount" in Section
1.01 of the Credit Agreement is amended by deleting such definition in its
entirety and substituting therefor a new definition to read as follows:
"`Trademark Available Amount' means initially an amount equal
to $5,000,000, which amount shall be permanently reduced as
follows: (i) $1,250,000 on August 4, 2002 and on September 1,
2002 and $2,500,000 on November 3, 2002; and (ii) an amount
equal to the Net Cash Proceeds from sales or other
dispositions of assets in an aggregate amount not to exceed
the amount of the Trademark Available Amount at such time
prior to giving effect to such reduction."
(l) Section 1.01 of the Credit Agreement is amended by adding
a new definition after the definition of "Federal Reserve Board" and before the
definition "Fiscal Year" to read as follows:
"`Financial Covenant Period' means (i) with respect to the
fourth fiscal quarter of Fiscal Year 2001, the three fiscal
months ending on the last day of such fiscal quarter; (ii)
with respect to the first fiscal quarter of Fiscal Year 2002,
the six fiscal months ending on the last day of such fiscal
quarter; (iii) with respect to the second fiscal quarter of
Fiscal Year 2002, the nine fiscal months ending on the last
day of such fiscal quarter; and (iv) with respect to each
fiscal quarter thereafter, the immediately preceding twelve
fiscal months."
(m) Section 1.01 of the Credit Agreement is amended by
deleting the definition "Leverage Ratio" in its entirety.
(n) Section 1.01 of the Credit Agreement is amended by adding
a new definition after the definition of "Servicer" and before the definition of
"Solvent" to read as follows:
"`Sixth Amendment' means the Sixth Amendment dated as of
December 12, 2001 among the Borrowers, the Lenders, the
Issuing Bank, the Documentation Agent and the Administrative
Agent."
(o) Section 3.01(b) of the Credit Agreement is amended by
adding a new subsection (v) at the end thereof to read as follows:
"(v) For thirty consecutive days during the period commencing
December 1 of each year to February 28 of the following year,
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the Revolving Credit Obligations shall not exceed $65,000,000
at any time during such thirty consecutive day period."
(p) Section 6.01(j) of the Credit Agreement is amended by
deleting such Section in its entirety and substituting therefor the following:
"(j) No Material Adverse Change. Since August 1, 1998 (other
than as disclosed in the Disclosure Statement with respect to
the Fall 1998 Stub Period or as disclosed in writing to the
Lenders prior to December 10, 2001), there has occurred no
event which has had, shall have or is reasonably likely to
have a Material Adverse Effect."
(q) Section 9.03 of the Credit Agreement is amended by (i)
deleting the word "and" at the end of clause (iv) thereof; (ii) deleting the
period at the end of clause (v) thereof and substituting therefor "; and"; and
(iii) adding a new clause (vi) at the end thereof to read as follows:
"(vi) the subordinated Lien securing up to $15,000,000 of the
Permitted Subordinated Indebtedness pursuant to (and subject
to) terms and conditions reasonably satisfactory to the
Administrative Agent and the Requisite Lenders."
(r) Section 10.01 of the Credit Agreement is amended by
deleting such Section in its entirety and substituting therefor the following:
"10.01. Minimum Consolidated Net Worth. The Consolidated Net
Worth of Holdings and the Barneys Group at the end of each
fiscal quarter set forth below shall not be less than the
minimum amount set forth opposite such fiscal quarter:
Fiscal Quarter Ending Minimum Amount
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Fourth fiscal quarter 2001 $136,000,000
First fiscal quarter 2002 $128,000,000
Second fiscal quarter 2002 $124,000,000
Third fiscal quarter 2002 $126,000,000
Fourth fiscal quarter 2002 $132,000,000
(s) Section 10.02 of the Credit Agreement is amended by
deleting such Section in its entirety and substituting therefor the following:
"10.02. Intentionally Deleted."
(t) Section 10.03 of the Credit Agreement is amended by
deleting such Section in its entirety and substituting therefor the following:
"10.03. Minimum Consolidated EBITDA. The Consolidated EBITDA
of the Barneys Group, as determined as of the last day of each
fiscal quarter set forth below for the Financial Covenant
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Period ending on such day, shall not be less than the minimum
amount set forth opposite such fiscal quarter:
Fiscal Quarter Ending Minimum Amount
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Fourth fiscal quarter 2001 $ 1,000,000
First fiscal quarter 2002 $ 1,000,000
Second fiscal quarter 2002 $ 2,000,000
Third fiscal quarter 2002 $ 8,000,000
Fourth fiscal quarter 2002 $16,000,000
(u) Section 10.04 of the Credit Agreement is amended by
deleting such Section in its entirety and substituting therefor the following:
"10.04. Maximum Capital Expenditures. Capital Expenditures
made or incurred by the members of the Barneys Group on a
consolidated basis (a) with respect to Fiscal Year 2001, shall
not exceed during such Fiscal Year, an aggregate amount of
$7,777,000 and (b) with respect to any Fiscal Year thereafter,
shall not exceed during such Fiscal Year, an aggregate amount
of $5,000,000; provided, however, the foregoing maximum
amounts may be increased (i) by the amount (on a dollar for
dollar basis) of any cash equity contribution made by
Holdings, or Permitted Subordinated Indebtedness loaned, to
Barneys but only to the extent not required in the calculation
of "Consolidated EBITDA" in order for the Borrowers to meet
the financial covenant set forth in Section 10.03 and (ii)
with respect to Fiscal Year 2001 and each Fiscal Year
thereafter, an amount of up to $4,000,000 for such Fiscal Year
if the Fixed Charge Coverage Ratio of the Barneys Group on a
consolidated basis, as determined as of the last day of the
immediately preceding fiscal quarter for the twelve month
period ending on such day (after giving effect to such
increased amount of Capital Expenditures), is more than 1.25
to 1.0 provided that the amount of such increase reduces the
maximum amount of Capital Expenditures (on a dollar for dollar
basis) in a subsequent Fiscal Year selected by the Borrowers
and ending prior to February 7, 2003; and provided, further,
in the event that the maximum amount which is permitted to be
expended in respect of Capital Expenditures during any Fiscal
Year as set forth above (without giving effect to this
proviso) is not fully expended during such Fiscal Year, the
maximum amount expended during the immediately succeeding
Fiscal Year shall be increased by such unutilized amount."
SECTION 2. Additional Amendment to Credit Agreement. The
Credit Agreement is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 5 below, further
amended as follows:
(a) The definition of "Commitment Termination Date" in Section
1.01 of the Credit Agreement is amended by deleting such definition in its
entirety and substituting therefor a new definition to read as follows:
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"`Commitment Termination Date' means the earlier to occur of
(i) the date of the termination of the Commitments pursuant to
the terms hereof and (ii) February 15, 2003."
SECTION 3. Amendment to Guaranty. Section 7(b) of the Guaranty
is, effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 4 below, amended by deleting such
Section in its entirety and substituting therefor the following:
"(b) Liens. Directly or indirectly create, incur, assume or
suffer to exist any Lien on or with respect to any of its Property
except Liens created by or pursuant to the Loan Documents, Customary
Permitted Liens and Liens permitted under Section 9.03(vi) of the
Credit Agreement."
SECTION 4. Conditions Precedent to Effectiveness. All Sections
(other than Section 2) of this Sixth Amendment shall become effective as of the
date hereof on the date (the "Amendment Effective Date") when the following
conditions precedent have been satisfied:
(a) Certain Documents. The Administrative Agent shall have
received all of the following:
(i) this Sixth Amendment executed by the Borrowers
and the Requisite Lenders; and
(ii) an Acknowledgment substantially in the form of
Exhibit A attached hereto executed by Barneys New York, Inc.
("Holdings").
(b) Representations and Warranties. Each of the
representations and warranties made by the Borrowers and Holdings in
Section 6 of this Sixth Amendment shall be true, correct and complete
in all material respects on and as of the Amendment Effective Date.
(c) No Events of Default. No Event of Default or Default shall
have occurred and be continuing on the Amendment Effective Date.
(d) Fees and Expenses. There shall have been paid (i) to the
Administrative Agent, for the account of each Lender that executes this
Sixth Amendment on or prior to December 12, 2001, an amendment fee in
the amount of 0.375% of such Lender's Commitment after giving effect to
this Sixth Amendment and (ii) to the Administrative Agent all fees due
and payable to the Administrative Agent on or before the Amendment
Effective Date (including, without limitation, all fees described in
the letter dated as of the date hereof between the Borrowers and the
Administrative Agent) and all expenses (including, without limitation,
legal expenses) due and payable on or before the Amendment Effective
Date.
SECTION 5. Conditions Precedent to Section 2. Section 2 of
this Sixth Amendment shall become effective as of the Amendment Effective Date
when (i) the Administrative Agent has received this Sixth Amendment executed by
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the Borrower and all Lenders and (ii) all the conditions precedent set forth in
Section 4 have been satisfied.
SECTION 6. Representations and Warranties. Each Borrower
represents and warrants as follows:
(a) After giving effect to this Sixth Amendment, all of the
representations and warranties contained in Section 6.01 of the Credit
Agreement and in the other Loan Documents shall be true, correct and
complete in all material respects.
(b) After giving effect to this Sixth Amendment, no Default or
Event of Default shall have occurred and be continuing.
(c) As of the date hereof, no material adverse change shall
have occurred in the condition (financial or otherwise), performance,
properties, operations or prospects of the Barneys Group since August
1, 1998 except as publicly disclosed or otherwise disclosed in writing
to the Lenders prior to the date hereof.
SECTION 7. Reference to and Effect on the Loan Documents. (a)
Upon the effectiveness of this Sixth Amendment, on and after the date hereof
each reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" or words of like import referring to the Credit Agreement, and each
reference in the other Loan Documents to "the Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement, shall mean
and be a reference to the Credit Agreement as amended hereby.
(b) Except as specifically amended above, the Credit Agreement
and all other Loan Documents, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed. Without limiting
the generality of the foregoing, the Loan Documents and all of the Collateral
described therein do and shall continue to secure the payment of all obligations
of the Borrowers under the Credit Agreement, the Notes and the other Loan
Documents, in each case as amended hereby.
(c) The execution, delivery and effectiveness of this Sixth
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any Lender or the Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
SECTION 8. Execution in Counterparts. This Sixth Amendment may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute but
one and the same agreement.
SECTION 9. Governing Law. This Sixth Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York.
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IN WITNESS WHEREOF, the parties hereto have caused this Sixth
Amendment to be executed as of the date first above written.
BARNEY'S, INC.
BARNEYS AMERICA, INC.
PFP FASHIONS INC.
BARNEYS (CA) LEASE CORP.
BARNEYS (NY) LEASE CORP.
XXXXX ALL-AMERICAN SPORTSWEAR CORP.
BNY LICENSING CORP.
BARNEYS AMERICA (CHICAGO) LEASE CORP.
By:/s/ Xxxxxx X. Xxxxxxx
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Title: Executive Vice President and Chief
Financial Officer
CITICORP USA, INC., as Administrative Agent and
Lender
By:/s/ Xxxxx X. XxXxxxxx
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Title: Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION, as Lender
By:/s/ Xxxxxxx X. Xxxxxxxx
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Title: Vice President
GMAC COMMERCIAL CREDIT LLC, as Lender
By:/s/ Xxxxx Xxxxxxxx
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Title: Senior Vice President
NATIONAL CITY COMMERCIAL
FINANCE, INC., as Lender
By:/s/ Xxxxxxx Xxxxxx
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Title: Vice President
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EXHIBIT A
ACKNOWLEDGMENT
Reference is hereby made to the Holdings Guaranty (as defined
in the Credit Agreement) to which the undersigned is a party. The undersigned
hereby consents to the terms of the foregoing Sixth Amendment to Credit
Agreement and agrees that the terms thereof shall not affect in any way its
obligations and liabilities under the undersigned's Holdings Guaranty or any
other Loan Document, all of which obligations and liabilities shall remain in
full force and effect and each of which is hereby reaffirmed.
BARNEYS NEW YORK, INC.
By:/s/ Xxxxxx X. Xxxxxxx
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Title: Executive Vice President and
Chief Financial Officer
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ANNEX
Lenders Commitment Amount
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Citicorp USA, Inc. $43,750,000
General Electric Capital Corporation $26,250,000
GMAC Commercial Credit, LLC $21,875,000
National City Commercial Finance, Inc. $13,125,000
=================
$105,000,000
