Exhibit 10.6
FIFTH AMENDMENT
FIFTH AMENDMENT, dated as of March 11, 1999 (this
"Amendment"), to the Credit and Guarantee Agreement, dated as of May 23, 1996
(as amended, supplemented or otherwise modified from time to time, the ("Credit
Agreement"), among:
(a) REMINGTON PRODUCTS COMPANY, L.L.C., a Delaware limited liability
company (the "Company");
(b) REMINGTON CONSUMER PRODUCTS LIMITED, a corporation organized and
existing under the laws of the United Kingdom (the "UK Borrower");
(c) each Acquisition Subsidiary from time to time party thereto (together
with the Company and the UK Borrower, the "Borrowers");
(d) FLEET NATIONAL BANK and BANQUE NATIONALE DE PARIS, as Co- Documentation
Agents (in such capacity, the "Co-Documentation Agents:); and
(e) THE CHASE MANHATTAN BANK (formerly known as CHEMICAL BANK), a New York
banking corporation, as administrative agent (in such capacity, the
"Agent") for the Lenders hereunder.
W I T N E S S E T H :
WHEREAS, the Borrowers, the Lenders and the Agent are
parties to the Credit Agreement;
WHEREAS, the Borrowers have requested that the Agent and the
Lenders agree to amend certain provisions of the Credit Agreement in accordance
with the terms hereof;
WHEREAS, the Agent, the Lenders and The Chase Manhattan Bank
(as Issuing Lender) are willing to amend such provisions of the Credit
Agreement, but only upon the terms and subject to the conditions set forth
herein;
NOW THEREFORE, in consideration of the premises contained
herein, the parties hereto agree as follows:
1. Defined Terms: Unless otherwise defined herein,
capitalized terms which are used herein shall have the meanings assigned thereto
in the Credit Agreement.
2. Amendment of Subsection 1.1. (a) Subsection 1.1 of the
Credit Agreement hereby is amended by deleting therefrom in their entireties the
definitions of the terms "Applicable Margin," "Domestic Borrowing Base" and
"Overadvance Period" contained therein.
(b) Subsection 1.1 of the Credit Agreement hereby is amended
by inserting therein, in proper alphabetical order, the following definitions:
"Applicable Advance Rate:" with respect to (a) Eligible Domestic
Accounts, 85% and (b) Eligible Domestic Inventory, 60% (collectively,
the "Basic Advance Rates"); provided that, during each period set
forth below, the Basic Advance Rates shall be increased to the extent
necessary to cause the Domestic Borrowing Base to be increased by the
amount equal to the "Increase Amount" set forth below opposite such
period:
Period Increase Amount
------ ---------------
02/01/99 - 11/30/99 $10,000,000
12/01/99 - 06/30/00 $5,000,000
"Applicable Margin": for each Type of Loan, or with respect
to commitment fees, as applicable, the rate per annum set forth under
the relevant column heading below, based upon the Leverage Ration in
effect from time to time as described below:
Eurodollar, Domestic
Sterling and Sterling ABR Fee
Base Rate Loans Rate Loans Percentage
------------------- ---------- ----------
Leverage Ratio of greater 2.75% 1.50% 0.50%
than or equal to 5.00 to 1.00
Leverage Ratio of less than 2.50% 1.25% 0.50%
5.00 to 1.00 and greater
than or equal to 4.00 to 1.00
Leverage Ration of less than 2.25% 1.00% 0.50%
4.00 to 1.00 and greater
than or equal to 3.50 to 1.00
Leverage Ratio of less than 2.00% 0.75% 0.375%
3.50 to 1.00
Notwithstanding the foregoing, at all times prior to the date upon
which the Company delivers the financial statements required pursuant
to subsection 13.4(b) for its fiscal quarter ended June 30, 1996, the
Company shall be deemed (for purposes of this definition only) to have
a Leverage Ratio of greater than 5.00 to 1.00. Any changes 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 for the relevant fiscal period in accordance with
the provisions of subsection 13.4(a) or (b), as the case may be.
"Domestic Borrowing Base": as of any date of determination an
amount equal to the sum, without duplication of (a) the Applicable
Advance Rate of the total of Eligible Domestic Accounts of the Company
and in Domestic Subsidiaries as of such date less the Domestic
Dilution Reserve then in effect, (b) the Applicable Advance Rate of
the Eligible Domestic Inventory of the Company and its Domestic
Subsidiaries as of such date and (c) during any Overadvance Period,
$10,000,000 minus any Seasonal Overadvance Utilization then in effect.
For purposes of determining the Domestic Borrowing Base from time to
time, Eligible Domestic Accounts and Eligible Domestic Accounts of the
Company and its Domestic Subsidiaries shall be determined from time to
time by the Agent by reference to the Domestic Borrowing Base
Certificate then most recently delivered to it; provided that the
information contained in such Domestic Borrowing Base Certificate
shall not be conclusive in calculating the amount of Eligible Domestic
Accounts and Eligible Domestic Inventory and, after consultation with
the Company, the Agent shall be entitled to adjust the amounts and
other information contained therein to the extent that it believes in
its reasonable credit judgment that such adjustment is appropriate to
reflect (x) the then current amount of Eligible Domestic Accounts and
Eligible Domestic Accounts or (y) changes in the business practices of
the Company and its Domestic Subsidiaries (or newly disclosed matters
with respect to them).
"Overadvance Period": shall mean the period from April 1,
1998 through the date of effectiveness of the Fifth Amendment, dated
as of March 11, 1999, to this Agreement.
(c) Subsection 1.1 of the Credit Agreement hereby is amended
by deleting from clause (a) (iii) of the definition of the term "Inventory
Reserves" contained therein and by substituting therefor the following:
any favorable variances (production material, production
manufacturing, purchase price variance or other variance categories)
that result when standard costs are greater than the actual costs and
are remaining in the ending inventory balance (with such favorable
variance inventory reserve to (x) be subject to review, testing and,
if appropriate, adjustment by the Agent, (y) be calculated on the last
day of the accounting period for each calendar quarter, commencing on
March 31, 1999, on an individual product basis and (z) remain in
effect until the next calculation).
3. Amendment of Subsection 5.1(c). Subsection 5.1(c) of the
Credit Agreement hereby is amended by inserting at the end of said subsection
5.1(c) the following:
Notwithstanding anything to the contrary contained herein, the
Domestic Swing Line Lender shall (unless any of the events described
in paragraph (g) or (h) of Section 16 shall have occurred) request
each Domestic Lender to make such a Domestic Revolving Credit Loan for
the purpose of refunding outstanding Domestic Swing Line Loans not
less frequently than every 15 days.
4. Amendment of Section 8.1(c). Subsection 8.1(c) of the
Credit Agreement hereby is amended by inserting at the end of said subsection
8.1(c) the following:
Notwithstanding anything to the contrary contained herein, the UK
Swing Line Lender shall (unless any of the events described in
paragraph (g) or (h) of Section 16 shall have occurred) request each
UK Lender to make such a UK Revolving Credit Loan for the purpose of
refunding outstanding UK Swing Line Loans not less frequently than
every 15 days.
5. Amendment of Subsection 10.7(d). Subsection 10.7(d) of
the Credit Agreement hereby is amended by deleting said subsection 10.7(d) in
its entirety and by substituting therefor the following:
(d) The Company agrees to pay to the Agent, for the account
of each Lender, a utilization fee for each day upon which the Domestic
Revolving Credit Exposure exceeds the amount which would be available
under the Domestic Borrowing Base if the Domestic Borrowing Base were
determined using the Basic Advance Rates (i.e., without giving effect
to any Increase Amount then In effect). Such utilization fee shall be
in the amount equal to 1/4% of 1% per annum on the then outstanding
amount of such Lender's Domestic Revolving Credit Exposure, UK
Revolving Credit Exposure, Domestic Term Loans and shall be payable
quarterly, in arrears, on the last day of each March, June, September
and December. Nothing contained herein shall be deemed to permit the
Domestic Revolving Credit Exposure at any date to exceed the Domestic
Borrowing Base then in effect.
6. Amendment of Subsection 14.14. Subsection 14.14 of the
Credit Agreement is amended by deleting therefrom the dates set forth under the
heading "Period" and the ratios set forth under the heading "Ratio" contained
therein and by substituting therefor the following:
Period Ratio
-------------- -----------
04/01/99 - 12/30/99 0.70 to 1.0
12/31/99 - 06/29/00 0.85 to 1.0
06/30/00 - thereafter 1.05 to 1.0
7. Amendment of Subsection 14.15. Subsection 14.15 of the
Credit Agreement hereby is amended by deleting therefrom the dates set forth
under the heading "Period" and the ratios set forth under the heading "Ratios"
contained therein and by substituting therefor the following:
Period Ratio
---------------- ----------------
Closing Date - 12/30/99 1.00 to 1.0
12/31/99 - 06/29/00 1.25 to 1.0
06/30/00 - 12/30/00 1.60 to 1.0
12/31/00 - 06/30/01 1.70 to 1.0
07/01/01 - 12/31/01 1.80 to 1.0
01/01/02 - thereafter 2.00 to 1.0
8. Amendment to Subsection 14.16(a). Subsection 14.16(a) of the
Credit Agreement hereby is amended by deleting therefrom the dates set forth
under the heading "Period" and the ratios set forth under the heading "Ratio"
contained therein and by substituting therefor the following:
Period Ratio
---------------- --------------
04/01/99 - 12/30/99 3.20 to 1.0
12/31/99 - thereafter 3.00 to 1.0
9. Amendment to Subsection 14.16(b). Subsection 14.16(b) of
the Credit Agreement hereby is amended by deleting therefrom the dates set forth
under the heading "Period" and the ratios set forth under the heading "Ratio"
contained therein and by substituting therefor the following:
Period Ratio
------------------- --------------
04/01/99 - 12/30/99 9.00 to 1.0
12/31/99 - 06/29/00 8.00 to 1.0
06/30/00 - 09/29/00 5:00 to 1.0
09/30/00 - 06/30/01 4.50 to 1.0
07/01/01 - thereafter 4.00 to 1.0
10. Conditions to Effectiveness. This Amendment shall become
effective on the date upon which the Agent receives (a) counterparts hereof,
executed and delivered by a duly authorized officer of each Borrower and the
Required Lenders and (b) an amendment fee, for ratable account of the Lenders
which execute and deliver this Amendment on or prior to March 26, 1999 (or such
later date as the Agent and the Borrower shall agree), in the amount equal to
1/8 of 1% of the amount of the Domestic Revolving Credit Commitments then then
in effect, the UK Revolving Credit Commitments then in effect and the aggregate
then outstanding principal amount of the Domestic Term Loans and the UK Term
Loans. Upon the effectiveness of this Amendment, the Applicable Margin shall be
adjusted to the rates set forth therein, without regard to whether such
effectiveness occurs on a day which is not the last day of an Interest Period.
11. Representations and Warranties. The Borrowers hereby
confirm, reaffirm and restate the representations and warranties set forth in
Section 6 of the Credit Agreement; provided that each reference to the Credit
Agreement therein shall be deemed to be a reference to the Credit Agreement
giving effect to this Amendment. The Borrowers represent and warrant that no
Default or Event of Default has occurred and is continuing.
12. Continuing Effect of Credit Agreement. This Amendment
shall not constitute a waiver or amendment of any other provision of the Credit
Agreement not expressly referred to herein and shall not be construed as a
waiver or consent to any further or future action on the part of a Borrower that
would require a waiver or consent of the Agent or the Lenders. Except as
expressly amended hereby, the provisions of the Credit Agreement are and shall
remain in full force and effect.
13. Counterparts. This Amendment may be executed by the
parties hereto in any number of counterparts, and all of such counterparts taken
together shall be deemed to constitute one and the same instrument.
14. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered by their respective duly authorized
offices as of the date first above written.
REMINGTON PRODUCTS COMPANY, L.L.C.
By: ---------------------------
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent, as a Lender and as (or on
behalf of) the Issuing Bank
By: -----------------------------
Title:
BANQUE NATIONALE DE PARIS, as a Co-
Documentation Agent and as a Lender
By:-------------------------------
Title:
FLEET NATIONAL BANK, as a Co-
Documentation Agent and as a Lender
By:----------------------------
Title:
FIRST UNION NATIONAL BANK
S/
By:--------------------------
Title:
THE FIRST NATIONAL BANK OF BOSTON
By:--------------------------------
Title:
FIRST UNION BANK OF CONNECTICUT
By:-----------------------------------
Title:
XXXXXX FINANCIAL, INC.
By:-------------------------------------
Title:
PEOPLE'S BANK
By:------------------------------------
Title:
PNC BANK, NATIONAL ASSOCIATION
By:------------------------------------
Title:
THE PROVIDENT BANK
By:-----------------------------------
Title:
