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EXHIBIT 10(w)
THIRD AMENDMENT TO AMENDED AND RESTATED
SENIOR REVOLVING CREDIT AGREEMENT
This THIRD AMENDMENT TO AMENDED AND RESTATED SENIOR REVOLVING CREDIT
AGREEMENT (the "Amendment") is made as of this 23rd day of March, 2001, by and
among ENESCO GROUP, INC., a Massachusetts corporation (the "Borrower"), the
Borrowing Subsidiaries who may from time to time become a party to the Amended
and Restated Senior Revolving Credit Agreement, and FLEET NATIONAL BANK, a
national banking association (the "Bank").
RECITALS
The Borrower and the Bank are parties to a certain Amended and Restated
Senior Revolving Credit Agreement dated as of August 23, 2000, as amended by a
First Amendment to Amended and Restated Senior Revolving Credit Agreement dated
November 27, 2000, and as further amended by a Second Amendment to Amended and
Restated Senior Revolving Credit Agreement dated November 30, 2000 (the "Credit
Agreement"), pursuant to which the Bank has extended certain financial
accommodations to the Borrower including those evidenced by a Borrower Note in
the face amount of $50,000,000 dated August 3, 2000, a Back-Up L/C Demand Note
in the face amount of $25,000,000 dated November 27, 2000 and a Back-Up F/X
Demand Note in the face amount of $10,000,000 dated November 27, 2000. The
Borrower and the Bank have agreed to modify the definition of EBITDA and certain
of the financial covenants which appear in the Credit Agreement, as more fully
described and set forth hereinbelow. Capitalized terms not otherwise defined in
this Amendment shall have their meanings as defined in the Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Borrower and the Bank agree
that the Credit Agreement is amended as follows:
1. The definition of "EBITDA" which appears in ARTICLE I is deleted in
its entirety and replaced with the following:
"EBITDA" for any period shall mean the sum of (i)
Consolidated Net Income for such period, plus, to the extent
deducted in determining Consolidated Net Income for such
period, (ii) Consolidated Interest Expense for such period,
(iii) all provisions for any income or similar taxes paid or
accrued by the Borrower and its Subsidiaries during such
period, and (iv) depreciation and amortization for the
Borrower and its Subsidiaries for such period adjusted for
the following: (a) non-cash writedowns occurring in the
second quarter of the Borrower's fiscal year ending December
31, 2000; (b) the writedown for transaction costs associated
with the failed acquisition of Precious Moments, Inc. in the
second quarter of the Borrower's fiscal year ending December
31, 2000; (c) the charge relating to the severance benefits
for the Borrower's former
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Chief Executive Officer in the second quarter of the Borrower's
fiscal year ending December 31, 2000; and (d) non-cash amounts which
are paid in treasury stock; with all such EBITDA adjustments to be
determined by the Bank in its reasonable discretion.
2. Section 6.12.1 is deleted in its entirety and replaced with the
following:
"6.12.1. Fixed Charge Coverage Ratio. The
Borrower shall maintain a Fixed Charge Coverage Ratio
of not less than 2.44 to 1.00 as of the fiscal
quarter ending March 31, 2001, calculated based upon
financial results of the Borrower for the four most
recent consecutive fiscal quarters then ended. For
the purposes of this covenant: (1) the term "Fixed
Charge Coverage Ratio" means the ratio of (i) the
Borrower's Adjusted EBITDA for the four most recent
consecutive fiscal quarters then ended to (ii) the
total of (I) Consolidated Interest Expense for such
period and (II) principal paid on long-term debt for
such period; and (2) the term "Adjusted EBITDA" means
the Borrower's EBITDA for such four fiscal quarter
period, adjusted for any Permitted Acquisitions made
during such period, minus (a) gains associated with
distribution of the "Rabbi Trust" in the second
quarter of the Borrower's fiscal year ending December
31, 2000 for calculation dates after June 30, 2000;
(b) net unfinanced capital expenditures during such
period; (c) cash taxes during such period; and (d)
dividends paid during such period. All such
adjustments to EBITDA shall be determined by the Bank
in its reasonable discretion."
3. Section 6.12.2 is deleted in its entirety and replaced with the
following:
"6.12.2. Funded Debt/EBITDA Ratio. The
Borrower shall maintain a ratio of funded
Consolidated Indebtedness, excluding letters of
credit issued in the ordinary course of business, to
the Borrower's EBITDA for the four most recent
consecutive fiscal quarters ending March 31, 2001 of
not greater than 0.86 to 1.00."
4. Section 6.12.3 is deleted in its entirety and replaced with the
following:
"6.12.3. Minimum Consolidated Net Worth. The
Borrower shall maintain a minimum Consolidated Net
Worth (exclusive of any foreign currency translation
gains or losses) of not less than $125,956,000 as of
the fiscal quarter ending March 31, 2001."
5. Section 6.12.4 is deleted in its entirety and replaced with the
following:
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"6.12.4. Maximum Quarterly EBITDA Deficit.
The Borrower shall have an EBITDA deficit of not more
than $4,750,000 for the fiscal quarter ending March 31,
2001."
6. EXHIBIT C attached as a part of the Credit Agreement is deleted in
its entirety and replaced with EXHIBIT C attached to this Amendment.
7. Except as amended, modified or supplemented by this Amendment,
all of the terms, conditions, covenants, provisions,
representations, warranties and conditions of the Credit
Agreement shall remain in full force and effect and are hereby
acknowledged, ratified, confirmed and continued as if fully
restated hereby.
8. The invalidity or unenforceability of any term or provision
hereof shall not affect the validity or enforceability of any
other term or provision hereof or contained in the Credit
Agreement.
9. It is the intention of the parties hereto that this Amendment
shall not constitute a novation and shall in no way adversely
affect or impair performance of the obligations of the
Borrower under the Credit Agreement.
10. The Borrower hereby confirms and ratifies the obligations
established under the Credit Agreement, as amended hereby.
11. This Amendment is to be governed and construed in accordance with
the laws of the Commonwealth of Massachusetts.
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IN WITNESS WHEREOF, the foregoing has been executed as an instrument
under seal as of the date first above written.
WITNESS: ENESCO GROUP, INC.
By: /s/ Xxxx-Xxx Xxxxxxxx
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Print Name: Xxxx-Xxx Xxxxxxxx
Title: Interim CEO and President
By: /s/ Xxxxxxx X. Xxxxxxxx
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Print Name: Xxxxxxx X. Xxxxxxxx
Title: CFO
FLEET NATIONAL BANK
By: /s/ Xxxxxx X. XxXxxxx
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Its Vice President
Acknowledged and agreed to, and confirming Guaranty dated August 3, 2000:
ENESCO INTERNATIONAL LTD.
By: /s/ Xxxxxxx X. Xxxxxxxx
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Print Name: Xxxxxxx X. Xxxxxxxx
Title: Treasurer
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