SECOND AMENDMENT
TO
CREDIT AGREEMENT
SECOND AMENDMENT dated as of December 28, 1999 (the
"AMENDMENT") between CARLYLE INDUSTRIES, INC., a Delaware corporation (the
"BORROWER"), and FLEET BANK, N.A., a national banking association (the "BANK")
to the Credit Agreement (as hereinafter defined). Capitalized terms used but not
defined herein shall have the meanings given to such terms in the Credit
Agreement.
WHEREAS, the Bank and the Borrower are parties to a Credit
Agreement dated as of June 23, 1998, as amended by the First Amendment dated as
of December 16, 1998, pursuant to which the Bank has made loans to, and
established credit facilities for, the Borrower (as the same may be further
amended, modified or supplemented from time to time, the "CREDIT AGREEMENT");
WHEREAS, the Borrower wishes to amend the Credit Agreement (i)
to permit use of loan proceeds to fund the acquisition of certain of the assets
of Button Fashion Holland B.V., a Netherlands corporation ("BUTTON FASHION") by
BLC Netherlands B.V., a Netherlands corporation ("BLC NETHERLANDS") and a wholly
owned Subsidiary of Xxxxxxxxxx (the "BUTTON FASHION ACQUISITION"), and (ii) to
increase the Letter of Credit Commitment and Letter of Credit Facility from
$500,000 to $1,500,000, in each case, in the manner and on the terms and
conditions set forth below.
WHEREAS, the Borrower requests that the Lenders consent to the
creation of BLC Netherlands, a Subsidiary of Xxxxxxxxxx and the proposed
purchaser in the Button Fashion Acquisition;
WHEREAS, the Borrower has requested that the Bank consent to
the amendments and provide the consents as herein provided and, subject to the
terms and conditions provided herein, the Bank is willing to agree to such
amendments;
NOW, THEREFORE, the Bank and the Borrower agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT.
(a) On and after the Amendment Effective Date (as
hereinafter defined), the Preliminary Statement in the Credit
Agreement is hereby amended by replacing it in its entirety
with the following:
"The Borrower has requested that the Lender Parties
lend to the Borrower up to $14,000,000, subject to reduction
as provided in the Credit Agreement, in order (1) to finance
the acquisition of substantially all of the assets of
Westwater Enterprises, L.P., (2) to finance the acquisition by
Xxxxxxxxxx of certain of the assets of Streamline Industries,
Inc. (the "STREAMLINE ACQUISITION"), (3) to use up to
$10,000,000 toward the redemption of $12,500,000 of Preferred
Stock of the Borrower, (4) to finance the acquisition by BLC
Netherlands of certain of the assets of Button Fashion Holland
B.V., a Netherlands corporation (the "BUTTON FASHION
ACQUISITION"), (5) to pay transaction fees and expenses in
connection with the transactions contemplated hereby and (6)
to provide for the short term working capital requirements of
the Borrower. The Lender Parties have indicated their
willingness to agree to lend such amounts on the terms and
conditions of this Agreement."
(b) On and after the Amendment Effective Date, the
definitions of Acquisition Documents, Letter of Credit
Commitment and Letter of Credit Facility in Section 1.01 of
the Credit Agreement are hereby deleted in their entirety and
the following new definitions inserted in lieu thereof:
"ACQUISITION DOCUMENTS" means all documents executed and
delivered in connection with the Acquisition, including
without limitation the Asset Purchase Agreement, to be
executed on a date not later than July 31, 1998 between the
Borrower or Westwater Inc. and Westwater, all documents
executed and delivered in connection with the Streamline
Acquisition, including, without limitation, the Purchase and
Sale Agreement dated as of December 16, 1998 (the "STREAMLINE
ACQUISITION DOCUMENTS"), and all documents executed and
delivered in connection with the Button Fashion Acquisition,
including, without limitation, the Assets and Liabilities
Purchase Agreement dated as of December __, 1999 (the "BUTTON
FASHION ACQUISITION DOCUMENTS"), each in form and substance
satisfactory to the Agent.
"LETTER OF CREDIT COMMITMENT" means the commitment of the
Issuing Bank in an amount, not to exceed the lesser of (a)
available amounts under the Revolving Credit Facility or (b)
$1,500,000 at any time outstanding.
"LETTER OF CREDIT FACILITY" means, at any time, an amount
equal to the amount of the Issuing Bank's Letter of Credit
Commitment at such time and not to exceed $1,500,000."
(c) On and after the Amendment Effective Date, the
last sentence of Section 2.01(b) of the Credit Agreement is
hereby deleted in its entirety and the following inserted in
lieu thereof:
"The Letter of Credit Advances shall not exceed
$1,500,000 in the aggregate at any one time outstanding.
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(d) " On and after the Amendment Effective Date,
Section 2.15 of the Credit Agreement is hereby deleted in its
entirety and the following inserted in lieu thereof:
"SECTION 2.15. USE OF PROCEEDS. The proceeds of the Advances
shall be available (and the Borrower agrees that it shall use
such proceeds) solely (i) in an amount not to exceed
$3,000,000, to partially fund the Acquisition, including the
satisfaction of certain Debt of Westwater; (ii) to fund up to
$10,000,000 toward the redemption of $12,500,000 of Preferred
Stock of the Borrower, it being understood that as of the
Closing Date Borrower will redeem shares of Preferred Stock of
the Borrower having an aggregate value of $12,500,000; (iii)
to pay transaction fees and expenses in connection with the
transactions contemplated hereby; (iv) in an amount not to
exceed $2,500,000, to partially fund the Streamline
Acquisition; (v) in an amount not to exceed $800,000 to
partially fund the Button Fashion Acquisition and (vi) to
provide for the short term working capital requirements of the
Borrower, Westwater, Inc. (after the occurrence of the
Acquisition) and Xxxxxxxxxx. Issuances of Letters of Credit
shall be available (and the Borrower agrees that it shall use
such Letters of Credit) solely for the benefit of foreign
suppliers of Inventory to the Borrower, Westwater Inc. (after
the occurrence of the Acquisition) and Xxxxxxxxxx."
2. CONSENT OF THE BANK. The Bank consents to the
establishment and creation of BLC Netherlands upon the terms and conditions set
forth in Section 3 hereof and waives the requirements of Section 5.01(m)(A) and,
subject to Section 7 hereof, (B) of the Credit Agreement.
3. CONDITIONS PRECEDENT TO EXECUTION OF AMENDMENT. The
obligation of the Bank to execute and deliver this Amendment and to make any
Loan after the Amendment Effective Date under the Credit Agreement as amended
hereby is subject to the condition that on or before the Amendment Effective
Date the Bank shall have received each of the following documents and
instruments in form and substance satisfactory to the Bank and dated as of the
Amendment Effective Date or other evidence of compliance with the following
conditions satisfactory to the Bank:
(a) the Amendment executed and delivered by an
authorized officer of the Borrower;
(b) a Pledge Agreement, in form and substance
reasonably satisfactory to the Agent, duly executed and
delivered by an authorized officer of Xxxxxxxxxx (a "PLEDGE
AGREEMENT"), in respect of sixty-five percent (65%) of the
stock of BLC Netherlands held by Xxxxxxxxxx.
(c) the representations and warranties contained in
each Loan Document are correct on and as of the Amendment
Effective Date, before and after giving effect to such
Borrowing or issuance and to the application of the proceeds
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therefrom, as though made on and as of such date other than
any such representations or warranties that, by their terms,
refer to a specific date other than the date of such
Borrowing, in which case as of such specific date;
(d) no event shall have occurred and be continuing,
or would result from such Borrowing or issuance or from the
application of the proceeds therefrom, that constitutes a
Default;
(e) the Lenders shall be satisfied that the assets
and earnings of the Borrower immediately following the Button
Fashion Acquisition contemplated hereby will be sufficient to
support the Obligations of the Borrower under the Credit
Agreement, the Notes, the other Loan Documents and the
Acquisition Documents and the timely amortization of all
Indebtedness and other Obligations of the Borrower;
(f) intentionally omitted;
(g) the Agent shall have received on or before the
date of the Borrowing, each of even date therewith (unless
otherwise specified), in form and substance satisfactory to
the Lenders (unless otherwise specified) and in sufficient
copies for each Lender and Agent and Lender's counsel and in
the case of (i) through (v) below to the extent reasonably
necessary to evidence the Borrowing to fund the Button Fashion
Acquisition:
(i) Amended schedules to the Credit Agreement
and Collateral Documents;
(ii) Certified copies of the resolutions of the
Board of Directors of the Borrower and Xxxxxxxxxx
approving the Button Fashion Acquisition, all other
transactions contemplated thereby, and of all
documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to
the Button Fashion Acquisition and the Button Fashion
Acquisition Documents;
(iii) Copies of drafts of the Button Fashion
Acquisition Documents, provided that Borrower and
Xxxxxxxxxx agree to deliver to the Bank counterparts
duly and validly executed by each party thereto of
the Button Fashion Acquisition Documents (without any
material changes to the terms thereof) prior to
funding the Button Fashion Acquisition and provided,
further that the Button Fashion Acquisition shall
occur by no later than January 7, 2000,
(iv) Such financial, business and other
information regarding the Button Fashion Acquisition
as the Lenders shall have reasonably requested;
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(v) A certificate, in substantially the form of
Exhibit I to the Credit Agreement, attesting to the
Solvency of the Borrower and its Subsidiaries, taken
as a whole, immediately after giving effect to the
Button Fashion Acquisition from its president or vice
president and chief financial officer;
(h) An opinion of counsel to the Borrower in form and
substance satisfactory to the Agent as to such matters as the
Agent or its counsel may reasonably request; and
(i) An opinion of Netherlands counsel to the
Borrower, Xxxxxxxxxx and BLC Netherlands in form and substance
satisfactory to the Agent as to such matters as the Agent or
its counsel may reasonably request.
4. FEES. The Borrower agrees to pay on or before the
date hereof, all costs and expenses incurred by the Bank (including, without
limitation, the fees and disbursements of counsel for the Bank) in connection
with the preparation and execution of this Amendment.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Bank to enter into this Amendment, the
Borrower represents and warrants to the Bank as follows:
(i) that no Default exists under the Credit
Agreement on the date hereof, both before and after
giving effect to this Amendment;
(ii) repeats and reaffirms, on and as of the
Amendment Effective Date, each of the
representations, warranties and agreements contained
in Article IV of the Credit Agreement after giving
effect to this Amendment;
(iii) the execution, delivery and performance
by the Borrower of the Amendment and by Xxxxxxxxxx of
the Pledge Agreement and the taking by each such
entity of all actions contemplated thereby are within
such entity's corporate powers, have been duly
authorized by all necessary corporate action and do
not contravene (x) such entity's charter or by-laws
or similar organizational documents, or (y) any law
or any contractual restriction binding on or
affecting such entity;
(iv) no authorization, approval or other
action by, and no notice to or filing with, any
governmental authority or regulatory body is required
(other than those which have been given or made) for
the due execution, delivery and performance by the
Borrower of this Amendment or the Pledge Agreement or
for the taking by it of any action contemplated
hereby or thereby to be taken by it;
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(v) the Amendment constitutes the legal, valid
and binding obligation of the Borrower, enforceable
against the Borrower in accordance with its terms;
and
(vi) the Pledge Agreement constitutes the valid
and binding obligation of Xxxxxxxxxx, enforceable
against Xxxxxxxxxx in accordance with its terms.
6. AFFIRMATIVE COVENANT
(a) By no later than January 21, 2000, the Company
shall cause Xxxxxxxxxx to file or cause to be filed an
amendment to the articles of association of BLC Netherlands,
which amendment shall be in form and substance satisfactory to
the Agent and shall be sufficient, in the opinion of
Netherlands counsel to the Company, to give effect to
provisions of the Pledge Agreement that provide for the
assignment of voting rights to the Agent and related matters.
(b) Xxxxxxxxxx shall within thirty Business Days
after the Amendment Effective Date deliver to the Collateral
Agent in form and substance reasonably satisfactory to the
Agent evidence of the perfection of the Lien granted in the
Pledge Agreement.
7. FURTHER ASSURANCES
Xxxxxxxxxx and/or BLC Netherlands shall, upon the request of
the Agent, promptly (and in any event within five Business Days after such
request) deliver to the Collateral Agent in form and substance reasonably
satisfactory to the Agent a security agreement duly executed by Xxxxxxxxxx
and/or BLC Netherlands (an "SECURITY AGREEMENT") and notarial deed or other
evidence of perfection duly executed by Xxxxxxxxxx and/or BLC Netherlands and
filed or recorded in compliance with Netherlands law (a "PERFECTION
INSTRUMENT"), in respect of the assets of BLC Netherlands and creating and
perfecting a Lien on and in respect of such assets, together with such opinions
of Netherlands and New York counsel with respect to such Security Agreement and
Perfection Instrument as the Agent may reasonably request, provided that such
pledge of assets will not result in adverse U.S. tax consequences to the
Borrower or Xxxxxxxxxx.
8. MISCELLANEOUS.
(a) This Amendment shall become effective on the date
(the "AMENDMENT EFFECTIVE DATE") when the Borrower and the
Bank shall have signed a copy of this Amendment (whether the
same or different counterpart) and the Borrower shall have
delivered the same to the Bank (including by way of facsimile
device) and complied with the conditions set forth in Section
3 hereof, unless such conditions are waived by the Bank.
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(b) THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK. (i) The
(c) Borrower hereby irrevocably and unconditionally:
(i) submits for itself and its property in any
legal action or proceeding relating to this
Amendment, or for recognition and enforcement of any
judgment in respect thereof, to the nonexclusive
general jurisdiction of the State of New York, the
courts of the United States of America for the
Southern District of New York, and appellate courts
from any thereof;
(ii) consents that any such action or
proceeding may be brought in such courts, and waives
any objection that it may now or hereafter have to
the venue of any such action or proceeding in any
such court or that such action or proceeding was
brought in an inconvenient court and agrees not to
plead or claim the same;
(iii) agrees that service of process in any
such action or proceeding may be effected by mailing
a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage
prepaid, to the Borrower at its address set forth in
Section 8.02 of the Credit Agreement or at such other
address of which the Bank has been notified pursuant
thereto;
(iv) agrees that nothing herein shall affect
the right to effect service of process in any other
manner permitted by law or shall limit the right to
xxx in any other jurisdiction; and
(v) waives trial by jury in any legal action or
proceeding referred to in paragraphs (i) through (iv)
of this Section 8(c).
(d) This Amendment may be executed in several
counterparts, each of which shall be an original and all of
which shall constitute but one and the same instrument.
(e) This Amendment is limited as specified and
shall not constitute a modification, acceptance or waiver of
any other provision of the Credit Agreement or any other Loan
Document. Except as otherwise provided herein, all terms and
conditions of the Credit Agreement and every other Loan
Document, respectively, and all obligations of the Borrower
and rights of the Bank thereunder shall remain in full force
and effect.
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(f) This Amendment amends the terms of the Credit
Agreement and does and shall be deemed to form a part of, and
shall be construed in connection with and as part of, the
Credit Agreement for any and all purposes. Any reference to
the Credit Agreement, following the execution and delivery of
this Amendment, shall be deemed a reference to such Credit
Agreement as hereby amended.
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IN WITNESS WHEREOF the parties hereto have executed this
Amendment as of the date first above written.
CARLYLE INDUSTRIES, INC.
BY: \s\ XXXXXX X. XXXXX
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
FLEET BANK, N.A., as Agent, Issuing Bank
and Lender
BY: \s\ XXXX XXXXXXX
------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
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