[EXECUTION COPY]
AMENDMENT NO. 1
TO
SECOND AMENDED AND RESTATED
REVOLVING CREDIT AND SECURITY AGREEMENT
AMENDMENT NO. 1, dated as of May 11, 2002 (this "Amendment") to the
Second Amended and Restated Revolving Credit and Security Agreement, dated
November 30, 2001 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement") by and among XXXXXX CORPORATION, a Delaware
corporation ("Xxxxxx"), XXXXXX HOLDING CORPORATION, a Delaware corporation
("Holding", and together with Xxxxxx, collectively, the "Borrowers"), the
lenders party thereto (collectively, the "Lenders"), including THE CIT
GROUP/COMMERCIAL SERVICES, INC. ("CIT"), the sole Lender as of the date hereof,
and CIT, as agent, for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers have requested that the Agent and the Lenders
agree to extend the term and amend certain provisions of the Credit Agreement;
and
WHEREAS, the Agent and the Lenders have agreed to extend the term and
make such amendments to the Credit Agreement upon the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and in the Credit Agreement, the parties hereto agree
as follows:
1. Defined Terms. Capitalized terms used and not otherwise
defined herein shall have their respective meanings as defined in the Credit
Agreement.
2. Amendment of Section 1. Section 1 of the Credit Agreement is
hereby amended by adding the following new Sections 1.7(A), 1.7(B), 1.7(C),
1.25(A), 1.25(B) and 1.79(A):
"1.7(A) 'Amendment No. 1' shall mean Amendment No. 1 to Second Amended and
Restated Revolving Credit and Security Agreement, dated as of May 11, 2002,
executed by and among Agent, Lenders and Borrowers and consented to by the
Guarantors."
"1.7(B) 'Amendment No. 1 Effective Date' shall mean May 11, 2002.
"1.7(C) 'Availability' shall mean, as of any date, the amount, if any, by
which (i) the aggregate amount available to the Borrowers under the Lending
Formulas, not to exceed the Maximum Credit, exceeds (ii) the aggregate principal
amount of the Loans and Letter of Credit Accommodations outstanding and any
reserves established pursuant to Section 3.3."
"1.25(A) 'Consolidated Working Capital' shall mean, as of any date, the
amount by which total current assets exceed total current liabilities,
determined on a consolidated basis, for Xxxxxx and its Subsidiaries in
accordance with GAAP."
"1.25(B) 'Contract Year' shall mean the consecutive twelve (12) month
period commencing May 11, 2002 and each consecutive twelve (12) month period or
portion thereof immediately thereafter during the term hereof."
"1.79(A) 'Prime Rate Loans' shall mean any Loans or portion thereof on
which interest is payable based on the Prime Rate in accordance with the terms
hereof."
3. Amendment of Section 1.51. The definition of "Interest Rate" is
hereby amended by replacing the phrase " 'Interest Rate' shall mean as to Prime
Rate Loans, a rate of one-quarter (.25%) percent per annum in excess of the
Prime Rate" set forth in such definition with the phrase " 'Interest Rate' shall
mean as to Prime Rate Loans, a rate equal to the Prime Rate".
4. Amendment of Section 1.79. The definition of " Prime Rate" is hereby
amended by replacing "The Chase Manhattan Bank" wherever set forth therein with
"JPMorgan Chase Bank".
5. Amendment of Section 3. Section 3 of the Credit Agreement is hereby
amended by adding the following new Section 3.14:
"3.14 'Clean-Up' Borrowers shall reduce the aggregate amount of Loans
outstanding to $0 for thirty (30) consecutive days during each Contract Year,
provided, that any Loan arising during such thirty (30) day period out of a
Letter of Credit Accommodation, or any charge or fee, which Loan is repaid in
full by the close of the Business Day next following the day on which such Loan
is made shall not constitute a breach of this Section 3.14."
6. Amendment of Section 3.2(b). Section 3.2(b) of the Credit Agreement
is hereby amended by adding the following at the end thereof:
"Effective as of the Amendment No. 1 Effective Date,
notwithstanding anything to the contrary contained in Schedule
3.2(b) hereto, letter of credit fees payable upon negotiation
or payment of documentary letters of credit shall be payable
in respect of the first Fifty Million Dollars ($50,000,000) of
documentary letters of credit negotiated or paid in each
Contract Year. Effective as of the Amendment No. 1 Effective
Date, Schedule 3.2(b) hereto shall be deemed amended in
accordance with the preceding sentence and, except as so
amended, shall remain in full force and effect in accordance
with its terms."
7. Amendment of Section 3.7. Section 3.7 of the Credit Agreement is
amended by replacing the phrase "an unused line fee at a rate equal to
one-quarter of one percent (.25%) per annum" with the phrase "an unused line fee
at a rate equal to one-fifth of one percent (.20%) per annum".
8. Amendment of Section 3.8. Section 3.8 of the Credit Agreement is
amended by replacing the phrase "a collateral management fee in an amount equal
to $8,333 for each month (or part thereof)" with the phrase "a collateral
management fee in an amount equal to $4,000 for each month (or part thereof)".
9. Amendment of Section 3.9. Section 3.9 of the Credit Agreement is
amended by deleting it in its entirety and replacing it with the following new
Section 3.9:
"Section 3.9 Agency Fee. As compensation for acting
as Agent and administering the Credit Facility for the benefit
of Borrowers and Lenders, Borrowers shall pay to the Agent,
for its own account, an agency fee for each month (or part
thereof) during the term hereof, as follows:
(a) $3,125, if, after the Amendment No. 1 Effective
Date, the total of the Loans outstanding plus the face amount
of Letter of Credit Accommodations issued under the Credit
Facility exceeds $50,000,000 in the aggregate at the end of
any month (other than the months of July, August and
September), such payment to commence the month next following
the end of such month; or
(b) $6,250, if, after the Amendment No. 1 Effective
Date, the total of the Loans outstanding plus the face amount
of Letter of Credit Accommodations issued under the Credit
Facility exceeds $60,000,000 in the aggregate at the end of
any month (other than the months of July, August and
September), such payment to commence the month next following
the end of such month.
All agency fees shall be fully earned and payable monthly in advance on the
first day of each month that such fee is payable, except that with respect to
the first month for which such agency fee is payable, such agency fee shall be
payable in arrears on the first day of the immediately following month.
10. Amendment of Section 7.6. Section 7.6 of the Credit Agreement is
hereby amended by adding the following at the end thereof:
"In the event that, with the prior written consent of Lenders,
either Borrower acquires assets and/or stock of another Person for an
aggregate Purchase Price in excess of $1,000,000 ("Material
Acquisition") then, after such Borrower has taken title to the property
acquired in any such Material Acquisition, the Lenders will give
consideration to adjusting, in their discretion, the dollar
amount(s)/ratio set forth in (i) Section 3.14 Clean-Up; (ii) Section
7.21 Consolidated Tangible Net Worth, (iii) Section 7.22 Minimum
Pre-Tax Income, (iv) Section 7.23 Minimum Interest Coverage Ratio,
and/or Section 7.23(A) Consolidated Working Capital. In the case of
Consolidated Working Capital, Lenders will also give consideration to
establishing, in their discretion, revised minimum Consolidated Working
Capital amounts for fiscal 2003 and thereafter based upon Xxxxxx
projections for such periods submitted to Agent and acceptable to
Lenders."
11. Amendment of Section 7.8. Section 7.8 of the Credit Agreement is
hereby amended by adding the following at the end of clause (i) thereof:
"provided, however, that each Borrower may pay such dividends
if (w) at the time of any such payment, no Event of Default
has occurred and is continuing or would result from the making
of such payment, (x) after giving effect to any such payment,
Availability equals or exceeds $15,000,000, (y) the aggregate
amount of such dividends paid to shareholders of Xxxxxx in
respect of any fiscal year does not exceed fifty percent (50%)
of Xxxxxx'x consolidated net income for such fiscal year, and
(z) such dividends are declared not later than 180 days after
the fiscal year in respect of which such consolidated net
income is earned,"
12. Amendment of Section 7.21. Section 7.21 of the Credit Agreement is
amended by deleting it in its entirety and replacing it with the following new
Section 7.21:
"Section 7.21. Consolidated Tangible Net Worth.
Xxxxxx shall maintain as of the end of each fiscal quarter,
during each period set forth below, Consolidated Tangible Net
Worth in an amount not less than the amount set forth below
opposite each such period:
Minimum Consolidated
Period Tangible Net Worth
Beginning of the first fiscal quarter of 2002
through the end of the third fiscal quarter of 2002 $65,000,000
Beginning of the fourth fiscal quarter of 2002
through the end of the third fiscal quarter of $70,000,000
2003
Beginning of the fourth fiscal quarter of 2003
and thereafter $80,000,000"
13. Amendment of Section 7.22. Section 7.22 of the Credit Agreement
is amended by deleting it in its entirety and replacing it with the following
new Section 7.22:
"Section 7.22 Minimum Pre-Tax Income. Xxxxxx and its
Subsidiaries shall achieve cumulative pre-tax income of not
less than (i) $0 for the twelve month period ending at the end
of the third fiscal quarter of 2002, (ii) $3,000,000 for each
twelve month period through the end of each fiscal quarter
beginning with the fourth fiscal quarter of 2002 and ending
with the third fiscal quarter of 2003 and (iii) $5,000,000 for
each twelve month period through the end of each fiscal
quarter beginning with the fourth fiscal quarter of 2003, and
thereafter. Notwithstanding anything to the contrary contained
in this Section 7.22, write-offs by Xxxxxx for intangible
assets (including, without limitation, trademarks and
goodwill) which Xxxxxx would otherwise be required to include
in the determination of Xxxxxx'x pre-tax loss or income under
this Section 7.22 shall be excluded from such determinations."
14. Amendment of Section 7.23. Section 7.23 of the Credit Agreement is
amended by deleting it in its entirety and replacing it with the following new
Section 7.23:
"Section 7.23 Minimum Interest Coverage Ratio. Xxxxxx
shall not permit the ratio of (a) consolidated net income
(including royalty income) from continuing operations
(excluding any unusual or non recurring items of income or
expense) before interest and taxes of Xxxxxx and its
Subsidiaries, to (b) consolidated interest expense (including
all imputed interest on Capitalized Lease Obligations) of
Xxxxxx and its Subsidiaries, to be less than (i) 2:1 for the
nine month period ending at the end of the third fiscal
quarter of 2002, and (ii) 3:1 for the twelve month period
ending at the end of the fourth fiscal quarter of 2002 and for
each twelve month period through the end of each fiscal
quarter thereafter."
15. Amendment of Section 7. Section 7 of the Credit Agreement is hereby
amended by adding the following new Section 7.23 (A):
"Section 7.23 (A) Consolidated Working Capital.
Xxxxxx shall maintain, as of the end of each fiscal quarter
and thereafter as set forth below, Consolidated Working
Capital in an amount not less that the amount set forth below
opposite each such period:
Minimum Consolidated
Period Working Capital
Second Quarter of 2002 $45,000,000
Third Quarter of 2002 $50,000,000
Fourth Quarter of 2002 and thereafter $55,000,000"
16. Amendment of Section 10.1(a). Section 10.1(a) of the Credit
Agreement is hereby amended by replacing the phrase "a term ending May 11, 2002
(the 'Renewal Date') and from year to year thereafter" with the phrase "a term
ending May 11, 2005 (the 'Renewal Date') and from year to year thereafter".
17. Amendment of Section 10.1(e). Section 10.1(e) of the Credit
Agreement is hereby amended by deleting it in its entirety and replacing it with
the following new Section 10.1(e):
"(e) If this Agreement terminates upon the occurrence
of an Event of Default or at the request of Xxxxxx and such
termination is effective after May 11, 2002 but on or prior to
May 11, 2004, in view of the impracticality and extreme
difficulty of ascertaining actual damages and by mutual
agreement of the parties as to a reasonable calculation of the
lost profits of Agent and Lenders as a result thereof,
Borrowers hereby agree to pay to Agent for the ratable benefit
of Lenders, upon the effective date of such termination, an
early termination fee in an amount equal to one (1%) percent
of the average aggregate daily balance of Loans and Letter of
Credit Accommodations outstanding for the twelve (12) month
period prior to the Termination Date. Such early termination
fee shall be presumed to be the amount of damages sustained by
said early termination and each Borrower agrees that it is
reasonable under the circumstances currently existing. The
early termination fee provided for in this Section 10.1 shall
be deemed included in the Obligations."
18. Representations and Warranties Construction. Each of the Borrowers
hereby represents and warrants to the Agent and the Lenders that (a) the
execution, delivery and performance of this Amendment has been duly authorized
by all requisite corporate action on the part of each of the Borrowers and will
not violate the certificates of incorporation or by-laws of any of the
Borrowers, (b) this Amendment is the legal, valid, binding and enforceable
obligation of each of the Borrowers and is enforceable against it in accordance
with its terms, (c) the representations and warranties contained in the Credit
Agreement are true and correct in all material respects on and as of the date
hereof as though made on and as of such date, except to the extent that any such
representation or warranty expressly relates to an earlier date and for changes
therein permitted or contemplated by the Credit Agreement, and (d) no Event of
Default under the Credit Agreement has occurred and is continuing.
19. Conditions Precedent. This Amendment shall be effective upon the
satisfaction of each of the following conditions precedent:
(a) The Agent shall have received an original of this
Amendment, duly authorized, executed and delivered by each of the Borrowers,
each of the Guarantors, the Agent and each of the Lenders.
(b) No Event of Default shall have occurred and be continuing.
(c) The Agent shall have received an original of the Consent
of Guarantors, which immediately follows this Amendment, duly authorized,
executed and delivered by each of the Guarantors.
20. Effect on the Financing Agreements.
(a) On and after the date hereof, each reference in the Credit
Agreement to "this Agreement," "hereunder," "hereof," "herein" or words of like
import, and each reference in the other Financing Agreements to the Credit
Agreement, shall mean and be a reference to the Credit Agreement, as amended
hereby.
(b) Except as specifically amended herein, the Credit
Agreement and all other Financing Agreements shall remain in full force and
effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of the Agent or any Lender under any of the Financing
Agreements, nor shall it constitute a waiver of any provision of any of the
Financing Agreements.
21. Governing Law. This Amendment shall be governed by and construed
in accordance with the internal laws of the State of New York (without giving
effect to principles of conflicts of law). 22. Binding Agreement. This Amendment
shall be a binding agreement upon and inure to the benefit of each of the
parties hereto and their respective successors and assigns.
23. Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective authorized officers as of the
day and year first above written.
XXXXXX CORPORATION,
as Borrower
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Sinh
Title: COO, CFO & Secretary
XXXXXX HOLDING CORPORATION,
as Borrower
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxx
Title: COO, Treasurer
THE CIT GROUP/COMMERCIAL
SERVICES, INC.,
as Agent
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
THE CIT GROUP/COMMERCIAL
SERVICES, INC.,
as Lender
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
CONSENT OF GUARANTORS
Each of the undersigned, XXXXXX CORPORATION, XXXXXX HOLDING CORPORATION,
CLANTEXPORT INC., FROST BROS. ENTERPRISES, INC., SLT SOURCING, INC., XXXXXX
XXXXX, INC., XXXX LICENSING, INC., XXXX MANUFACTURING, INC. and XXXXXX CANADA,
INC., each a Guarantor, as defined in the Second Amended and Restated Revolving
Credit and Security Agreement, dated as of November 30, 2001, by and among
XXXXXX CORPORATION and XXXXXX HOLDING CORPORATION, as Borrowers, the financial
institutions named therein, as Lenders, and The CIT Group/Commercial Services,
Inc., as Agent (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), as amended by Amendment No. 1 to Credit Agreement
dated as of May 11, 2002 ("Amendment No. 1") to which this Consent of Guarantors
is attached, hereby consents to Amendment No. 1 and to the matters contemplated
thereby, and hereby confirms and agrees that its Guarantee, as defined in the
Credit Agreement, is, and shall continue to be, in full force and effect and is
hereby ratified and confirmed in all respect except that, on and after the
effective date of Amendment No. 1, each reference in its Guarantee 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 by Amendment No. 1.
IN WITNESS WHEREOF, each of the undersigned has caused this Consent of
Guarantors to be duly executed and delivered by its authorized officer as of
this 11th day of May, 2002.
XXXXXX CORPORATION,
as Guarantor
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxx
Title: COO, CFO & Secretary
XXXXXX HOLDING CORPORATION,
as Guarantor
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Sinh
Title: COO, Treasurer
[SIGNATURES CONTINUED ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
CLANTEXPORT INC.,
as Guarantor
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Sinh
Title: COO, Treasurer
FROST BROS. ENTERPRISES, INC.,
as Guarantor
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Sinh
Title: COO, Treasurer
SLT SOURCING, INC.,
as Guarantor
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Sinh
Title: COO, Treasurer
XXXXXX XXXXX, INC.,
as Guarantor
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxx
Title: COO, Treasurer
[SIGNATURES CONTINUED ON NEXT PAGE]
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
XXXX LICENSING, INC.,
as Guarantor
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Sinh
Title: COO, Treasurer
XXXX MANUFACTURING, INC.,
as Guarantor
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Xxxx
Title: COO, Treasurer
XXXXXX CANADA INC.,
as Guarantor
By: /s/ Xxxxxxxx X. Xxxxx
Name: Xxxxxxxx X. Sinh
Title: COO, Treasurer
