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Exhibit 10.1.6
SIXTH AMENDMENT TO
SECOND AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT
THIS SIXTH AMENDMENT TO SECOND AMENDED AND RESTATED FINANCING AND SECURITY
AGREEMENT (this "Agreement") is made as of the 14th day of May, 2001, by and
among
AAi.FOSTERGRANT, INC. (formerly known as Accessories Associates, Inc.), a
corporation organized and existing under the laws of the State of Rhode Island,
successor in interest to Xxxxxx Xxxxx Group, L.P., F.G.G. Investments, Inc., The
Xxxxxxx Company, Xxxxxxx Holdings, Inc., Xxxxxxx General, Inc., Xxxxxx Xxxxx
Holdings, Inc., and O-Ray Holdings, Inc. (the "Borrower");
FANTASMA, LLC, a limited liability company organized under the laws of the
State of Delaware ("Fantasma") (Fantasma together with the Borrower, the
"Obligors");
BANK OF AMERICA, N.A., a national banking association ("Bank of America"),
formerly NationsBank, N.A., and each other financial institution which is party
to the Financing Agreement (as that term is defined below) from time to time
(collectively, the "Lenders" and individually, a "Lender"); and
BANK OF AMERICA, N.A., a national banking association (the "Agent"),
formerly NationsBank, N.A., in its capacity as both collateral and
administrative agent for each of the Lenders.
RECITALS
A. The Obligors, the Lenders and the Agent entered into a Second Amended
and Restated Financing and Security Agreement dated July 21, 1998 (as amended by
that certain First Amendment to Second Amended and Restated Financing and
Security Agreement dated as of May 7, 1999, Second Amendment to Second Amended
and Restated Financing and Security Agreement dated as of March 24, 2000, Third
Amendment to Second Amended and Restated Financing and Security Agreement dated
as of June 12, 2000 (the "Third Amendment"), Fourth Amendment to Second Amended
and Restated Financing and Security Agreement dated as of August 14, 2000 (the
"Fourth Amendment"), Fifth Amendment to Second Amended and Restated Financing
and Security Agreement dated as of March 26, 2001 and as further amended,
restated, modified, substituted, extended, and renewed from time to time, the
"Financing Agreement"). The Financing Agreement provides for some of the
agreements among the Obligors, the Lenders and the Agent with respect to the
"Loan" (as defined in the Financing Agreement), including the Revolving Credit
Facility (as that term is defined in the Financing Agreement) in an amount not
to exceed $60,000,000 and the Letter of Credit Facility which is part of the
Revolving Credit Facility.
B. The Obligors have requested that the Agent and Lenders waive certain
financial covenant defaults, amend certain financial covenant provisions of the
Financing Agreement and amend certain other provisions of the Financing
Agreement.
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C. The Agent and Lenders are willing to agree to the Obligors' request on
the condition, among others, that this Agreement be executed.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, receipt of which is hereby acknowledged, the Obligors,
the Agent and the Lenders agree as follows:
1. The Obligors, the Agent and the Lenders agree that the Recitals above
are a part of this Agreement. Unless otherwise expressly defined in this
Agreement, terms defined in the Financing Agreement shall have the same meaning
under this Agreement.
2. Each of the Borrower and Fantasma represents and warrants to the Lenders
and Agent as follows:
(a) The Borrower is a corporation duly organized, and validly existing
and in good standing under the laws of the state in which it was organized and
is duly qualified to do business as a foreign corporation in good standing in
every other state wherein the conduct of its business or the ownership of its
property requires such qualification.
(b) Fantasma is a limited liability company duly organized, validly
existing and in good standing under the laws of the state in which it was
organized and is duly qualified to do business as a foreign limited partnership
in every other state wherein the conduct of its business or the ownership of its
property requires such qualification.
(c) Each of the Borrower and Fantasma has the power and authority to
execute and deliver this Agreement and perform its obligations hereunder and has
taken all necessary and appropriate corporate, partnership or limited liability
company action, as applicable, to authorize the execution, delivery and
performance of this Agreement.
(d) The Financing Agreement, as amended by this Agreement, and each of
the other Financing Documents remains in full force and effect, and each
constitutes the valid and legally binding obligation of the Borrower and
Fantasma, enforceable in accordance with its terms.
(e) All of the Borrower's and Fantasma's representations and
warranties contained in the Financing Agreement and the other Financing
Documents are true and correct on and as of the date of the Borrower's and
Fantasma's execution of this Agreement.
(f) After giving effect to this Agreement, no Event of Default and no
event which, with notice, lapse of time or both would constitute an Event of
Default, has occurred and is continuing under the Financing Agreement or the
other Financing Documents which has not been waived in writing by the Lenders
and Agent.
3. Section 1.1 of the Financing Agreement (Certain Defined Terms) is hereby
amended by adding the following definition:
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"SIXTH AMENDMENT" MEANS THAT CERTAIN SIXTH AMENDMENT TO SECOND AMENDED
AND RESTATED FINANCING AND SECURITY AGREEMENT DATED AS OF MAY 14, 2001 BY
AND AMONG THE BORROWER, FANTASMA, THE AGENT AND THE LENDERS.
4. Section 2.1.10 of the Financing Agreement (Revolving Credit Unused Line
Fee) is hereby deleted in its entirety and the following is substituted in its
place:
2.1.10 REVOLVING CREDIT UNUSED LINE FEE.
THE BORROWER SHALL PAY TO THE AGENT FOR THE RATABLE BENEFIT OF THE
LENDERS A MONTHLY REVOLVING CREDIT FACILITY FEE (COLLECTIVELY, THE
"REVOLVING CREDIT UNUSED LINE FEES" AND INDIVIDUALLY, A "REVOLVING CREDIT
UNUSED LINE FEE") IN AN AMOUNT EQUAL TO ONE-HALF OF ONE PERCENT (.500%) PER
ANNUM ON THE AVERAGE DAILY UNUSED AND UNDISBURSED PORTION OF THE TOTAL
REVOLVING CREDIT COMMITTED AMOUNT IN EFFECT FROM TIME TO TIME ACCRUING
DURING EACH CALENDAR MONTH, MINUS THE AVERAGE AMOUNT BY WHICH BORROWINGS
UNDER THE REVOLVING LOAN WERE REDUCED DUE TO THE OPERATION OF SECTION
2.1.12 (REQUIRED AVAILABILITY). THE ACCRUED AND UNPAID PORTION OF THE
REVOLVING CREDIT UNUSED LINE FEE SHALL BE PAID IN ARREARS BY THE BORROWER
TO THE AGENT ON THE FIRST DAY OF EACH MONTH, COMMENCING ON THE FIRST SUCH
DATE FOLLOWING THE DATE HEREOF, AND ON THE REVOLVING CREDIT TERMINATION
DATE.
5. Section 2.3.1(d) of the Financing Agreement (Applicable Interest Rates)
is hereby deleted in its entirety and the following is substituted in its place:
(d) CHANGES IN THE APPLICABLE MARGIN SHALL BE MADE NOT MORE FREQUENTLY
THAN QUARTERLY BASED ON THE BORROWER'S PRICING RATIO, DETERMINED BY THE
AGENT IN THE EXERCISE OF ITS SOLE AND ABSOLUTE DISCRETION FROM THE MONTHLY
REPORTS FOR MONTHS THAT ARE ALSO THE END OF A FISCAL QUARTER REQUIRED BY
SECTION 6.1.1(c) (MONTHLY STATEMENTS AND CERTIFICATES) (THE FIRST SUCH
DETERMINATION SHALL BE MADE BASED ON THE BORROWER'S FINANCIAL STATEMENTS
FOR THE LAST BUSINESS DAY OF THE BORROWER'S FISCAL QUARTER ENDING CLOSEST
TO JUNE 30, 2001, WHICH DELIVERY SHALL BE MADE ON OR BEFORE JULY 31, 2001)
AND SHALL BE EFFECTIVE AS OF THE FIRST DAY OF THE FIRST MONTH AFTER THE
MONTH IN WHICH THE AGENT RECEIVES SUCH STATEMENTS. THE APPLICABLE MARGIN
(EXPRESSED AS BASIS POINTS) SHALL VARY DEPENDING UPON THE BORROWER'S
PRICING RATIO, AS FOLLOWS:
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APPLICABLE MARGIN FOR
APPLICABLE MARGIN FOR BASE RATE REVOLVING
PRICING RATIO LIBOR REVOLVING LOANS LOANS
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.94 TO 1.0 AND BELOW 375 BASIS POINTS 200 BASIS POINTS
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GREATER THAN .94 TO 1.0 325 BASIS POINTS 150 BASIS POINTS
BUT LESS THAN OR EQUAL TO
.99 TO 1.0
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GREATER THAN .99 TO 1.00 300 BASIS POINTS 125 BASIS POINTS
TO 1.0 BUT LESS THAN OR
EQUAL TO 1.10 TO 1.0
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GREATER THAN 1.10 TO 1.0 275 BASIS POINTS 100 BASIS POINTS
BUT LESS THAN OR EQUAL TO
1.20 TO 1.0
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GREATER THAN 1.20 TO 1.0 250 BASIS POINTS 75 BASIS POINTS
BUT LESS THAN OR EQUAL TO
1.30 TO 1.0
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GREATER THAN 1.30 TO 1.0 225 BASIS POINTS 50 BASIS POINTS
AND GREATER
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THE INITIAL APPLICABLE MARGIN UPON THE CLOSING DATE OF THE SIXTH AMENDMENT
SHALL BE (a) 325 BASIS POINTS FOR LIBOR REVOLVING LOANS AND (b) 150 BASIS
POINTS FOR BASE RATE REVOLVING LOANS.
NOTWITHSTANDING THE FOREGOING, FOLLOWING THE OCCURRENCE AND DURING THE
CONTINUANCE OF AN EVENT OF DEFAULT, AT THE OPTION OF THE AGENT, ALL LOAN
AND OTHER OBLIGATIONS MAY BEAR INTEREST AT THE POST-DEFAULT RATE
6. Section 2.4.3 of the Financing Agreement (Field Examination Fees) is
hereby deleted in its entirety and the following is substituted in its place:
2.4.3 FIELD EXAMINATION AND ADMINISTRATIVE FEES.
(a) THE BORROWER SHALL CAUSE TO BE PAID TO THE AGENT, FOR THE
EXCLUSIVE BENEFIT OF THE AGENT, A FIELD EXAMINATION FEE (COLLECTIVELY, THE
"FIELD EXAMINATION FEES" AND INDIVIDUALLY A "FIELD EXAMINATION FEE") OF
$750 PER DAY PER EXAMINER PLUS ALL REASONABLE OUT-OF-POCKET EXPENSES, IF
ANY, INCURRED BY THE AGENT IN CONNECTION WITH THE CONDUCT AND REVIEW OF THE
FIELD EXAMINATION CONDUCTED PAYABLE AT THE TIME THAT SUCH EXAM IS
COMPLETED.
(b) THE BORROWER SHALL CAUSE TO BE PAID TO THE AGENT, FOR THE
EXCLUSIVE BENEFIT OF THE AGENT, AN ADMINISTRATIVE FEE (THE "ADMINISTRATIVE
FEE") OF FIFTEEN THOUSAND DOLLARS ($15,000) WHICH SHALL BE PAYABLE
QUARTERLY ON THE FIRST DAY OF EACH CALENDAR QUARTER COMMENCING ON THE FIRST
SUCH DATE FOLLOWING THE CLOSING DATE, AND CONTINUING UNTIL THE LAST SUCH
DATE PRIOR TO WHICH ALL OBLIGATIONS ARISING OUT OF, OR UNDER, THE CREDIT
FACILITIES THEN OUTSTANDING HAVE BEEN PAID IN FULL. THE BORROWER AGREES
THAT IT SHALL BE REQUIRED TO PAY AN ADMINISTRATIVE FEE TO THE AGENT FOR
EACH QUARTERLY PERIOD REGARDLESS OF WHETHER THE AGENT ACTUALLY CONDUCTS A
FIELD EXAMINATION DURING OR WITH RESPECT TO SUCH QUARTERLY PERIOD.
7. Section 6.1.13 of the Financing Agreement (Financial Covenants) is
hereby deleted in its entirety and the following is substituted in its place:
6.1.13 FINANCIAL COVENANTS.
(a) FIXED CHARGE COVERAGE RATIO. THE BORROWER AND ITS SUBSIDIARIES ON
A CONSOLIDATED BASIS WILL MAINTAIN, TESTED ON THE LAST BUSINESS DAY OF EACH
OF THE BORROWER'S FISCAL QUARTERS BEGINNING ON THE LAST BUSINESS
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DAY OF THE FISCAL QUARTER ENDING CLOSEST TO (a) MARCH 31, 2001, FOR THE
FOUR (4) QUARTER PERIOD ENDING ON SUCH DATE, A FIXED CHARGE COVERAGE RATIO
OF NOT LESS THAN .90 TO 1.0 AND (b) JUNE 30, 2001 AND THEREAFTER, FOR THE
FOUR (4) QUARTER PERIOD ENDING ON SUCH DATE, A FIXED CHARGE COVERAGE RATIO
OF NOT LESS THAN 1.00 TO 1.0.
(b) LEVERAGE RATIO. THE BORROWER AND ITS SUBSIDIARIES ON A
CONSOLIDATED BASIS WILL AT ALL TIMES MAINTAIN, TESTED AS OF THE LAST
BUSINESS DAY OF EACH OF BORROWER'S FISCAL QUARTERS BEGINNING WITH THE
FISCAL QUARTER ENDING CLOSEST TO JUNE 30, 2001, AS OF THE LAST DAY OF EACH
OF THE BORROWER'S FISCAL QUARTERS FOR THE FOUR (4) QUARTER PERIOD ENDING ON
SUCH DATE, A RATIO OF FUNDED DEBT TO EBITDA SO THAT IT IS NOT MORE THAN THE
FOLLOWING:
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FISCAL QUARTER ENDING CLOSEST TO: RATIO
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MARCH 31, 2001 5.20 TO 1.0
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JUNE 30, 2001 5.00 TO 1.0
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SEPTEMBER 30, 2001 5.00 TO 1.0
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DECEMBER 31, 2001 5.00 TO 1.0
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MARCH 31, 2002 THROUGH AND 4.75 TO 1.0
INCLUDING DECEMBER 31, 2002
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MARCH 31, 2003 AND THEREAFTER 4.50 TO 1.0
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(c) EBITDA. THE BORROWER AND ITS SUBSIDIARIES ON A CONSOLIDATED BASIS
WILL MAINTAIN, TESTED ON THE LAST BUSINESS DAY OF EACH OF THE BORROWER'S
FISCAL QUARTERS BEGINNING ON THE LAST BUSINESS DAY OF THE FISCAL QUARTER
ENDING CLOSEST TO MARCH 31, 2001 FOR THE FOUR (4) QUARTER PERIOD ENDING ON
SUCH DATE, EBITDA OF NOT LESS THAN THE FOLLOWING:
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FISCAL QUARTER ENDING CLOSEST TO: AMOUNT
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MARCH 31, 2001 WAIVED
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JUNE 30, 2001 $17,000,000
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SEPTEMBER 30, 2001 $16,000,000
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DECEMBER 31, 2001 $16,500,000
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MARCH 31, 2002 THROUGH AND INCLUDING $17,000,000
DECEMBER 31, 2002
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MARCH 31, 2003 AND THEREAFTER $18,500,000
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(d) CERTAIN ADJUSTMENTS. IN DETERMINING COMPLIANCE WITH THE FOREGOING
FINANCIAL COVENANTS:
(i) FOR THE FISCAL QUARTERS ENDING CLOSEST TO JUNE 30, 2001 AND
SEPTEMBER 30, 2001 ONLY, THERE SHALL BE EXCLUDED FROM INTEREST EXPENSE
THE $90,000 FEE DUE THE LENDERS UNDER THE SIXTH AMENDMENT; AND
(ii) SEVERANCE EXPENSES UP TO AND INCLUDING $750,000 ACCRUED
DURING THE PERIOD BEGINNING MAY 15, 2001 AND ENDING ON THE LAST
BUSINESS DAY OF AUGUST, 2001, SHALL BE EXCLUDED FROM EBITDA UNTIL THE
FISCAL PERIOD IN WHICH THEY ARE PAID IN CASH.
8. Section 6.2.7 of the Financing Agreement (Capital Expenditures) is
hereby deleted in its entirety and the following is substituted in its place:
6.2.7 CAPITAL EXPENDITURES. THE BORROWER AND FANTASMA WILL NOT,
DIRECTLY OR INDIRECTLY (BY WAY OF THE ACQUISITION OF THE SECURITIES OF A
PERSON OR OTHERWISE), MAKE ANY CAPITAL EXPENDITURES (EXCLUDING, HOWEVER,
ANY BUYBACKS OTHERWISE INCLUDED AS A CAPITAL EXPENDITURE) IN THE AGGREGATE
FOR THE BORROWER, XXXXXX XXXXX AND FANTASMA (TAKEN AS A WHOLE) FOR THE
FISCAL YEAR ENDING DECEMBER 31, 2001 AND FOR ANY FISCAL YEAR THEREAFTER,
EXCEEDING $8,500,000.
9. The Obligors shall permit authorized representatives of the Agent to
conduct an appraisal of the Obligors' Inventory, all at such times during normal
business hours as may be reasonably requested by the Agent. The Obligors agree
to provide cooperation as necessary to complete the appraisals in a timely
manner. Any and all costs and expenses reasonably incurred by, or on behalf of,
the Agent in connection with the conduct of any of the foregoing shall be part
of the Enforcement Costs and shall be payable to the Agent upon demand. The
Obligors acknowledge and agree that such reasonable expenses may include, but
shall not be limited to, any and all out-of-pocket costs and expenses of the
Agent's employees and agents reasonably incurred in, and when, travelling to any
of the Obligors' facilities.
10. On the condition that the Obligors shall have complied with the terms
and conditions of this Agreement, the Agent and the Lenders hereby waive
defaults under the following provisions of the Financing Agreement which, prior
to the execution of this Agreement or for the period stated, existed under the
Obligations; provided, however that this Paragraph shall not be deemed to waive
any defaults under the following provisions after the date of this Agreement or
after the period stated, or any other defaults arising out of non-compliance by
the Obligors with the Financing Agreement, whether or not the events, facts or
circumstances giving rise to such non-compliance existed on or prior to the date
hereof:
Section Default
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6.1.13(c) Failure of Borrower to maintain EBITDA as
required by Section 6.1.13(c) for Fiscal
Year period ending March 31, 2001
11. The Obligors hereby issue, ratify and confirm the representations,
warranties and covenants contained in the Financing Agreement, as amended
hereby. The Obligors agree that this Agreement is not intended to and shall not
cause a novation with respect to any or all of the Obligations.
12. The Obligors acknowledge and warrant that the Agent and the Lenders
have acted in good faith and has conducted in a commercially reasonable manner
its relationships with the Obligors in connection with this Agreement and
generally in connection with the Financing Agreement and the Obligations, the
Obligors hereby waiving and releasing any claims to the contrary.
13. The Obligors shall pay at the time this Agreement is executed and
delivered all fees, commissions, costs, charges, taxes and other expenses
incurred by the Agent, the Lenders and their respective counsel in connection
with this Agreement, including, but not limited to, reasonable fees and expenses
of the counsel and all recording fees, taxes and charges.
14. As a condition of the Agent's and the Lenders' agreement to enter into
this Agreement, the Obligors hereby agree to pay to the Agent and the Lenders an
amendment fee equal to $90,000, for the ratable benefit of the Lenders, which
fee shall be due and payable at the time this Agreement is executed and is fully
earned and non-refundable upon payment.
15. As a condition of the Agent's and the Lenders' agreement to enter into
this Agreement, the Obligors hereby agree to pay to the Agent an Administrative
Fee equal to $15,000, which fee shall be due and payable at the time this
Agreement is executed and is fully earned and non-refundable upon payment.
16. This Agreement is one of the Financing Documents. This Agreement may be
executed in any number of duplicate originals or counterparts, each of such
duplicate originals or counterparts shall be deemed to be an original and taken
together shall constitute but one and the same instrument. The parties agree
that their respective signatures may be delivered by fax. Any party who chooses
to deliver its signature by fax agrees to provide a counterpart of this
Agreement with its inked signature promptly to each other party.
IN WITNESS WHEREOF, the Obligors, the Agent and the Lenders have executed
this Agreement under seal as of the date and year first written above.
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Exhibit 10.1.6
May 14, 2001 4:14 PM
Signature Page
Sixth Amendment to
Second Amended and Restated
Financing and Security Agreement
among
AAi.FOSTERGRANT, INC. and certain of its affiliates, BANK OF AMERICA, N.A.(in
its capacity as "Agent"), and BANK OF AMERICA, N.A. and the other financial
institutions which are parties to the Financing Agreement as "Lenders"
AAi.FOSTERGRANT, INC. (formerly known as
Accessories, Associates, Inc.)
By:/s/ Xxxxx X. Xxxxxxx (SEAL)
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Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
FANTASMA, LLC
By:/s/ Xxxxx X. Xxxxxxx (SEAL)
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chief Financial Officer
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Signature Page
Sixth Amendment to Second Amended and Restated
Financing and Security Agreement
among
AAi.FOSTERGRANT, INC. and certain of its affiliates, BANK OF AMERICA, N.A.(in
its capacity as "Agent"), and BANK OF AMERICA, N.A. and the other financial
institutions which are parties to the Financing Agreement as "Lenders"
BANK OF AMERICA, N.A., Agent
By: /s/ Xxxx X. Xxxxxxxx (SEAL)
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Xxxx X. Xxxxxxxx
Vice President
BANK OF AMERICA, N.A.
in its capacity as a Lender
By: /s/ Xxxx X. Xxxxxxxx (SEAL)
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Xxxx X. Xxxxxxxx
Vice President
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Signature Page
Sixth Amendment to Second Amended and Restated
Financing and Security Agreement
among
AAi.FOSTERGRANT, INC. and certain of its affiliates, BANK OF AMERICA, N.A.(in
its capacity as "Agent"), and BANK OF AMERICA, N.A. and the other financial
institutions which are parties to the Financing Agreement as "Lenders"
LASALLE BUSINESS CREDIT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx (SEAL)
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Xxxxxx X. Xxxxxxxx
Vice President
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Signature Page
Sixth Amendment to Second Amended and Restated
Financing and Security Agreement
among
AAi.FOSTERGRANT, INC. and certain of its affiliates, BANK OF AMERICA, N.A.(in
its capacity as "Agent"), and BANK OF AMERICA, N.A. and the other financial
institutions which are parties to the Financing Agreement as "Lenders"
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Xxxx Xxxxx (SEAL)
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Xxxx Xxxxx
Vice President
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