AMENDMENT AND CONSENT
AMENDMENT AND CONSENT, dated as of November 12, 1997, among
Renaissance International Export, Inc., a Delaware corporation, Xxxx Perfumes
Corp. ("Borrower"), the other Credit Parties to the Credit Agreement referred to
below, General Electric Capital Corporation, for itself, as Lender, and as Agent
for Lenders, and the other Lenders party to the Credit Agreement.
W I T N E S S E T H:
WHEREAS, Borrower, the other Credit Parties, Agent and Lenders
are parties to that certain Credit Agreement dated as of March 12, 1997 (as from
time to time amended, restated, supplemented or otherwise modified, the "Credit
Agreement", and unless the context otherwise requires or unless otherwise
defined herein, capitalized terms used herein shall have the meanings assigned
to them in the Credit Agreement); and
WHEREAS, Borrower has requested that Agent and Lenders amend
the Credit Agreement to provide for Letters of Credit and make certain other
amendments as hereinafter set forth; and
WHEREAS, Borrower has requested that Agent and Lenders consent
to the formation by Borrower of Renaissance International Export, Inc., and to
amend the Loan Documents to add Renaissance International Export, Inc. as a
Credit Party as hereinafter set forth; and
WHEREAS, Agent and Lenders have agreed to amend the Loan
Documents and consent to the formation of Renaissance International Export,
Inc., on the terms and subject to the conditions as hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto hereby agree as follows:
SECTION 1. Amendments to the Credit Agreement. The following
amendments shall be effective on the Effective Date (as defined below) (except
for the amendments set forth in Sections 1(g), 1(h), 1(z), 1(af), 1(ag) and
1(ah) below, which shall be effective as of September 30, 1997):
(a) Section 1.1(a)(i) of the Credit Agreement is amended by
adding the phrase ", in each case less the sum of the Letter of Credit
Obligations outstanding at such time" after the phrase "the Borrowing Base" in
the fourth sentence thereof.
(b) Section 1.1(a)(iii) of the Credit Agreement is amended by
adding the phrase "or incur any Letter of Credit Obligations," after the phrase
"Overadvances or Revolving Credit Advances," in the first sentence thereof.
(c) Section 1 of the Credit Agreement is amended by adding a
new Section 1.1A at the end thereof which reads as follows:
"1.1A Letters of Credit. Subject to and in
accordance with the terms and conditions contained herein and
in Annex B, Borrower shall have the right to request, and
Revolving Lenders agree to incur, or purchase participations
in, Letter of Credit Obligations in respect of Borrower."
(d) The fourth sentence of Section 1.2(a) of the Credit
Agreement is amended to read in its entirety as follows:
"Upon any such prepayment and reduction or termination of the
Commitment, Borrower's right to request Revolving Credit
Advances, or request that Letter of Credit Obligation be
incurred on its behalf, shall simultaneously be permanently
reduced or terminated, as the case may be; provided that a
permanent reduction of the Commitment shall not require a
corresponding pro rata reduction in the L/C Sublimit (as
defined in Annex B)."
(e) Section 1.2(b) of the Credit Agreement is amended by
adding a new sentence after the first sentence thereof to read as follows:
"If any such excess remains after repayment in full of the
aggregate outstanding Revolving Credit Advances, Borrower
shall provide cash collateral for the Letter of Credit
Obligations in the manner set forth in Annex B to the extent
required to eliminate such excess."
(f) The first sentence of Section 1.2(c) of the Credit
Agreement is amended by (i) deleting the word "and" before the word "third", and
(ii) adding to the end thereof the following clause:
"; and fourth, to any Letter of Credit Obligations, to provide
cash collateral therefor in the manner set forth in Annex B,
until such Letter
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of Credit Obligations have been fully cash collateralized in
the manner set forth in Annex B."
(g) The second paragraph of Section 1.4(a) of the Credit
Agreement is amended to read in its entirety as follows:
"The Applicable Revolver Index Margin and
Applicable Revolver LIBOR Margin will be 1.00% and 2.25% per
annum, respectively, as of the Closing Date. The Applicable
Margins will be adjusted (up or down) prospectively on a
quarterly basis as determined by Parent's Interest Coverage
Ratio for the 12-month period then ended, commencing with the
delivery of Parent's quarterly Financial Statements to Lenders
for the Fiscal Quarter ending September 30, 1997 (subject to
adjustment as provided in the following paragraph).
Adjustments in Applicable Margins will be determined by
reference to the following grids:
IF INTEREST LEVEL OF
COVERAGE RATIO IS: APPLICABLE MARGINS:
-------------------
greater than 2.00 Level I
greater than 1.25, but less than or equal to 2.00 Level II
greater than 1.00, but less than or equal to 1.25 Level III
less than or equal to 1.00 Xxxxx XX
XXXXXXXXXX XXXXXXX
XXXXX X XXXXX XX XXXXX XXX LEVEL IV
------- -------- --------- --------
Applicable Revolver
Index Margin 1.00% 1.25% 1.50% 2.00%
Applicable Revolver LIBOR
Margin 2.25% 2.50% 2.75% 3.00%"
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(h) The first sentence of the third paragraph of Section
1.4(a) of the Credit Agreement is amended to delete the phrase "except that
there shall be no adjustment of the Applicable Revolver LIBOR Margin for an
outstanding LIBOR Loan during the LIBOR Period for such Loan".
(i) Section 1.4(d) of the Credit Agreement is amended to read
in its entirety as follows:
"(d) So long as any Default or Event of
Default shall have occurred and be continuing, and at the
election of Agent (or upon the written request of Requisite
Lenders) confirmed by written notice from Agent to Borrower,
the interest rates applicable to the Loans and the Letter of
Credit Fees shall be increased by two percentage points (2%)
per annum above the rates of interest or the rate of such Fees
otherwise applicable hereunder ("Default Rate"), and all
outstanding Obligations shall bear interest at the Default
Rate applicable to such Obligations. Interest and Letter of
Credit Fees at the Default Rate shall accrue from the initial
date of such Default or Event of Default until that Default or
Event of Default is cured or waived and shall be payable upon
demand."
(j) Clause number "(3)" of the last sentence of Section
1.10(a) of the Credit Agreement is amended to read in its entirety as follows:
"(3) to principal payments on the Loans and to provide cash
collateral for Letter of Credit Obligations in the manner
described in Annex B, ratably to the aggregate, combined
principal balances of the Loans and outstanding Letter of
Credit Obligations;"
(k) Section 2.2 of the Credit Agreement is amended to read in
its entirety as follows:
"2.2 Further Conditions to Each Loan. Except
as otherwise expressly provided herein, no Lender shall be
obligated to fund any Loan, convert or continue any Loan as a
LIBOR Loan or incur any Letter of Credit Obligation, if, as of
the date thereof:
(a) Any representation or warranty by any
Credit Party contained herein or in any of the other Loan
Documents shall be untrue or incorrect as of such date in any
material respect, except to the extent that such
representation or warranty expressly relates to an
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earlier date and except for changes therein expressly
permitted or expressly contemplated by this Agreement; or
(b) Any event or circumstance having a
Material Adverse Effect shall have occurred since the date
hereof and be continuing; or
(c) (i) Any Event of Default shall have
occurred and be continuing or would result after giving effect
to any Loan (or the incurrence of any Letter of Credit
Obligations), or (ii) a Default shall have occurred and be
continuing or would result after giving effect to any Loan,
and Agent or Requisite Lenders shall have determined not to
make any Loan or incur any Letter of Credit Obligation so long
as that Default is continuing; or
(d) After giving effect to any Advance (or
the incurrence of any Letter of Credit Obligations), the
outstanding principal amount of the Revolving Loan would
exceed the lesser of the Borrowing Base (plus Overadvances as
to which demand for payment has not been made) and the Maximum
Amount.
The request and acceptance by Borrower of the proceeds of any
Loan, the incurrence of any Letter of Credit Obligations or
the conversion or continuation of any Loan into, or as, a
LIBOR Loan, as the case may be, shall be deemed to constitute,
as of the date of such request or acceptance, (i) a
representation and warranty by Borrower that the conditions in
this Section 2.2 have been satisfied and (ii) a reaffirmation
by Borrower of the granting and continuance of Agent's Liens,
on behalf of itself and Lenders, pursuant to the Collateral
Documents."
(l) The introductory paragraph of Section 3 of the Credit
Agreement is amended by adding the phrase "and to incur Letter of Credit
Obligations" immediately after the word "Loans".
(m) The last sentence of Section 3.9 of the Credit Agreement
is amended by adding the phrase "the incurrence of the Letter of Credit
Obligations on behalf of Borrower," after the phrase "Borrower,".
(n) Section 3.23(a) of the Credit Agreement is amended by
adding the phrase "and Letter of Credit Obligations" immediately after each
reference to "Loans" therein.
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(o) Section 3.25 of the Credit Agreement is amended to read in
its entirety as follows:
"3.25 Parent Debt. As of the Closing Date,
Borrower has delivered to Agent a complete and correct copy of
the Parent Notes (including all schedules, exhibits,
amendments, supplements, modifications, assignments and all
other documents delivered pursuant thereto or in connection
therewith). Parent has the corporate power and authority to
incur the Indebtedness evidenced by the Parent Notes. The
subordination provisions of the Parent Notes (other than the
1997 Senior Notes) are enforceable against the holders thereof
by Agent and Lenders. All Obligations, including the
Obligations to pay principal of and interest on the Loans and
the Letter of Credit Obligations, constitute senior
Indebtedness entitled to the benefits of the subordination
provisions contained in the Parent Notes (other than the 1997
Senior Notes). The principal of and interest on the Notes, all
Letter of Credit Obligations and all other Obligations will
constitute "senior debt" as that or any similar term is or may
be used in any other instrument evidencing or applicable to
any other Parent Debt (other than the 1997 Senior Notes).
Borrower acknowledges that Agent and each Lender are entering
into this Agreement and are extending the Commitments in
reliance upon such subordination provisions and this Section
3.25."
(p) The first sentence of Section 6.1 of the Credit Agreement
is amended by deleting in clause (b) thereof the phrase "except mergers,
consolidations or combinations of any Credit Party (other than Parent) with any
other Credit Party (other than Parent (other than a merger of Holdings into
Parent)), provided that no Default or Event of Default shall have occurred and
be continuing or would result from such merger, consolidation or combination"
and substituting in place thereof the following phrase:
"except mergers, consolidations or combinations of any Credit
Party (other than Parent) or any non-Credit Party Subsidiary
of a Credit Party with any Credit Party (other than Parent
(other than a merger of Holdings into Parent)), and
liquidations and dissolutions of any Credit Party (other than
Parent) or any non-Credit Party Subsidiary of a Credit Party
by transfer of its assets and liabilities to a Credit Party
(other than Parent), provided that no Default or Event of
Default shall have occurred and be continuing or would result
from such merger, consolidation, combination, liquidation or
dissolution"
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(q) Section 6.1 of the Credit Agreement is further amended by
adding the following paragraph at the end thereto:
"Notwithstanding the foregoing provisions of
this Section 6.1, any Credit Party may form one or more new
wholly-owned domestic Subsidiaries whose sole purpose is to
serve as a joint venturer in a Permitted Joint Venture (a
"Joint Venture Subsidiary"), provided that (i) the Joint
Venture Subsidiary becomes a Credit Party, a Guarantor, a
party to the Security Agreement, and a party to the Pledge
Agreement, (ii) no Default or Event of Default shall have
occurred and be continuing or result from such formation, and
(iii) the requirements of a Permitted Joint Venture are
complied with."
(r) Clause "(h)" of Section 6.2 of the Credit Agreement is
amended by deleting the amount "$2,000,000" and substituting therefor
"$5,000,000".
(s) The first sentence of Section 6.8 of the Credit Agreement
is amended: (i) by deleting the word "and" immediately preceding clause "(b)";
(ii) by deleting the word "and" immediately preceding clause "(e)"; and (iii) by
adding the following clause to the end thereof ", and (f) as permitted by
Section 6.1".
(t) Section 8.2 of the Credit Agreement is amended to read in
its entirety as follows:
"8.2 Remedies. (a) If any Default or Event
of Default shall have occurred and be continuing, Agent may
(and at the written request of the Requisite Lenders shall),
without notice, suspend this facility with respect to further
Advances and/or the incurrence of further Letter of Credit
Obligations whereupon any further Advances and Letter of
Credit Obligations shall be made or extended in Agent's sole
discretion (or in the sole discretion of the Requisite
Lenders, if such suspension occurred at their direction) so
long as such Default or Event of Default is continuing. If any
Default or Event of Default shall have occurred and be
continuing, Agent may (and at the written request of the
Requisite Lenders shall), without notice except as otherwise
expressly provided herein, increase the rate of interest
applicable to the Loans and the Letter of Credit Fees to the
Default Rate.
(b) If any Event of Default shall have
occurred and be continuing, Agent may (and at the written
request of the Requisite Lenders shall), without notice, (i)
terminate this facility with respect to further Advances or
the incurrence of further Letter of Credit
7
Obligations; (ii) declare all or any portion of the
Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of
Credit Obligations be cash collateralized as provided in Annex
B, all without presentment, demand, protest or further notice
of any kind, all of which are expressly waived by Borrower and
each other Credit Party; and (iii) exercise any rights and
remedies provided to Agent under the Loan Documents and/or at
law or equity, including all remedies provided under the Code;
provided, however, that upon the occurrence of an Event of
Default specified in Sections 8.1(g), (h) or (i), all of the
Obligations, including the Revolving Loan, shall become
immediately due and payable without declaration, notice or
demand by any Person."
(u) Section 9.1(a) of the Credit Agreement is amended by
adding the phrase "Letter of Credit Obligations," immediately after the word
"Loans," in the first sentence thereof.
(v) Section 11.2(b) of the Credit Agreement is amended by
adding the phrase "or Letter of Credit Obligations" after the word "Loan" in
clause (ii) thereof.
(w) Annex A to the Credit Agreement is hereby amended by
adding the following definitions thereto in the appropriate alphabetical order:
"Joint Venture Subsidiary" shall have the
meaning assigned to such term in Section 6.1.
"L/C Issuer" shall have the meaning assigned
to such term in Annex B.
"Letter of Credit Fee" shall have the
meaning assigned to such term in Annex B.
"Letter of Credit Obligations" shall mean
all outstanding obligations incurred by Agent and Lenders at
the request of Borrower, whether direct or indirect,
contingent or otherwise, due or not due, in connection with
the issuance of a reimbursement agreement or guaranty by Agent
or purchase of a participation as set forth in Annex B with
respect to any Letter of Credit. The amount of such Letter of
Credit Obligations shall equal the maximum amount which may be
payable by Agent or Lenders thereupon or pursuant thereto.
8
"Letters of Credit" shall mean commercial or
standby letters of credit issued for the account of Borrower
by any L/C Issuer, and bankers' acceptances issued by
Borrower, for which Agent and Lenders have incurred Letter of
Credit Obligations.
(x) The definition of "Commitments" in Annex A to the Credit
Agreement is amended to read in its entirety as follows:
"Commitments" shall mean (a) as to any
Lender, the aggregate commitment of such Lender to make
Revolving Credit Advances and/or incur Letter of Credit
Obligations as set forth on the signature page to the
Agreement or in the most recent Assignment Agreement executed
by such Lender and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Revolving Credit Advances
and/or incur Letter of Credit Obligations, which aggregate
commitment shall be Seventy Five Million Dollars ($75,000,000)
on the Closing Date, as such amount may be adjusted, if at
all, from time to time in accordance with the Agreement.
(y) The definition of "Commitment Termination Date" in Annex A
to the Credit Agreement is amended to read in its entirety as follows:
"Commitment Termination Date" shall mean the
earliest of (a) Xxxxx 00, 0000, (x) the date of termination of
Lenders' obligations to make Advances and/or incur Letter of
Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 8.2(b), and (c) the date of
indefeasible prepayment in full by Borrower of the Loans and
the cancellation and return (or stand-by guarantee) of all
Letters of Credit or the cash collateralization of all Letter
of Credit Obligations pursuant to Annex B, and the permanent
reduction of the Commitment to zero dollars ($0), in
accordance with the provisions of Section 1.2(a).
(z) The definition of "Interest Coverage Ratio" in Annex A to
the Credit Agreement is amended to read in its entirety as follows:
"Interest Coverage Ratio" shall mean, with
respect to any Person for any 12-month period, the ratio of
(a) EBITDA, to (b) cash Interest Expense (without regard to
interest income), less the Escrow Adjustment (as defined
below), plus cash dividends paid to holders of Cumulative
Exchangeable Preferred Stock. For purposes of this definition
the term "Escrow Adjustment" shall represent the current
9
accrual of amounts to be paid out of the 1997 Senior Notes
Escrow Account as follows: (i) $4,842,000 for the 12-month
period ended on the Fiscal Quarter ending September 30, 1997;
(ii) $7,263,000, for the 12- month period ended on the Fiscal
Quarter ending December 31, 1997; and (iii) $9,684,000 for the
12-month period ended on the Fiscal Quarter ending March 31,
1998 and each Fiscal Quarter end thereafter; provided,
however, such adjustment shall be made only so long as a
semi-annual disbursement representing the semi-annual interest
due on $79.0 million aggregate principal amount of the 1997
Senior Notes is being paid out of the 1997 Senior Notes Escrow
Account, pursuant to the 1997 Senior Notes Escrow Agreement.
(aa) The definition of "Requisite Lenders" in Annex A to the
Credit Agreement is amended to read in its entirety as follows:
"Requisite Lenders" shall mean (a) Lenders
having at least sixty-six and two-thirds percent (66 2/3%) of
the Commitments of all Lenders, or (b) if the Commitments have
been terminated, at least sixty-six and two-thirds percent (66
2/3%) of the aggregate outstanding amount of the Loans and
Letter of Credit Obligations.
(bb) The definition of "Revolving Loan" in Annex A to the
Credit Agreement is amended to read in its entirety as follows:
"Revolving Loan" shall mean, as the context
may require, at any time, the sum (i) the aggregate amount of
Revolving Credit Advances outstanding to Borrower plus (ii)
the aggregate Letter of Credit Obligations incurred on behalf
of Borrower.
(cc) The definition of "Termination Date" in Annex A to the
Credit Agreement is amended to read in its entirety as follows:
"Termination Date" shall mean the date on
which the Loans have been indefeasibly repaid in full and all
other Obligations under the Agreement and the other Loan
Documents have been completely discharged and Letter of Credit
Obligations have been cash collateralized, cancelled or backed
by stand-by letters of credit in accordance with Annex B, and
Borrower shall not have any further right to borrow any monies
under the Agreement.
(dd) Annex B to the Credit Agreement is amended and restated
in its entirety to read as Annex B annexed hereto.
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(ee) Annex E to the Credit Agreement is amended by deleting
clause (iii) of the second sentence of paragraph (d) thereof and renumbering
clauses (iv) and (v) therein as clauses (iii) and (iv), respectively.
(ff) Paragraph (a) of Annex G to the Credit Agreement is
amended by deleting "12,000,000" as the amount of maximum Capital Expenditures
for the Fiscal Year ending March 31, 1998, and substituting therefor the amount
of "13,500,000".
(gg) Paragraph (b) of Annex G to the Credit Agreement is
amended to read in its entirety as follows:
"(b) Minimum EBITDA. The Parent on a consolidated
basis shall have, at the end of each Fiscal Quarter set forth
below, EBITDA for the respective periods set forth below of
not less than the following:
12-month
Period Ended EBITDA
------------ ------
March 31, 1997 $18,000,000
June 30, 1997 18,000,000
September 30, 1997 16,000,000
December 31, 1997 17,000,000
March 31, 1998 26,000,000
June 30, 1998 26,500,000
September 30, 1998 27,000,000
December 31, 1998 28,500,000
March 31, 1999 31,500,000
June 30, 1999 32,000,000
September 30, 1999 32,000,000
December 31, 1999 32,500,000
March 31, 2000 34,000,000
June 30, 2000 34,500,000
September 30, 2000 35,000,000
December 31, 2000 36,000,000
March 31, 2001 37,000,000
and each Fiscal Quarter end thereafter."
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(hh) The first paragraph of Paragraph (d) of Annex G to the
Credit Agreement is amended to read in its entirety as follows:
"(d) Minimum Interest Coverage Ratio. The Parent on a
consolidated basis shall have at the end of each Fiscal
Quarter set forth below, an Interest Coverage Ratio for the
12-month period then ended of not less than the following:
0.94 for the Fiscal Quarter ending March 31, 1997;
0.85 for the Fiscal Quarter ending June 30, 1997;
0.85 for the Fiscal Quarter ending September 30, 1997;
0.90 for the Fiscal Quarter ending December 31, 1997;
1.50 for the Fiscal Quarter ending March 31, 1998;
1.50 for the Fiscal Quarter ending June 30, 1998;
1.60 for the Fiscal Quarter ending September 30, 1998;
1.70 for the Fiscal Quarter ending December 31, 1998;
1.75 for the Fiscal Quarter ending March 31, 1999;
1.70 for the Fiscal Quarter ending June 30, 1999;
1.50 for the Fiscal Quarter ending September 30, 1999;
1.40 for the Fiscal Quarter ending December 31, 1999;
1.30 for the Fiscal Quarter ending March 31, 2000;
1.30 for the Fiscal Quarter ending June 30, 2000;
1.30 for the Fiscal Quarter ending September 30, 2000;
and 1.40 for the Fiscal Quarter ending December 31, 2000
and each Fiscal Quarter end thereafter."
SECTION 2. Consent and Amendments regarding Renaissance
International Export, Inc. Effective as of the Effective Date: (a)
notwithstanding Section 6.1(a) of the Credit Agreement, Agent and Lenders hereby
consent to the formation of Renaissance International Export, Inc., a Delaware
corporation and newly-formed wholly-owned subsidiary of Borrower ("Export"); and
(b) the Credit Agreement is hereby amended to add Export as a Credit Party, (ii)
the Security Agreement is hereby amended to add Export as a Grantor, (iii) the
Guaranty is hereby amended to add Export as a Guarantor, and (iv) the Pledge
Agreement is hereby amended to add Export as a Pledgor, in each case, as though
Export had been an original signatory thereto.
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SECTION 3. Fees. In consideration of the amendments and
consent herein, Borrower shall pay on the Effective Date to Agent (i) a fee of
$200,000, to be divided among the Lenders executing this Amendment and Consent
based on their Pro Rata Share and (ii) a fee of $50,000 solely for the benefit
of GE Capital (collectively, the "Amendment Fee").
SECTION 4. TCW Landlord Consent. The parties hereto agree that
if pursuant to that certain Landlord's Subordination and Consent, dated
September 18, 1997, by and among, Trust Company of the West, as trustee of TCW
Realty Fund IV, Cosmar Corporation and Agent (the "TCW Landlord Consent"), Agent
is required to reimburse any Person for attorneys' fees and costs and
disbursements in connection with an action or proceeding against Agent, then the
Credit Parties shall promptly pay such attorneys' fees and costs and
disbursements for Agent's account. The parties hereto further agree that if the
Credit Parties fail to pay or reimburse Agent for such attorneys' fees and costs
and disbursements within ten (10) Business Days following Agent's demand for
such payment or reimbursement, such failure shall constitute an Event of Default
under the Credit Agreement, and that in any event, any such unpaid amounts shall
be included in the Obligations.
SECTION 5. Representations and Warranties of the Credit
Parties and Export. The Credit Parties and Export represent and warrant to Agent
and each Lender as follows:
(a) The execution, delivery and performance by each Credit
Party and Export of this Amendment and Consent (and each of the financing
statements and other documents to be executed by such Person pursuant hereto)
and the creation of all Liens provided for herein: (1) are within such Person's
corporate power; (2) have been duly authorized by all necessary or proper
corporate and shareholder action; (3) do not contravene any provision of such
Person's charter or bylaws; (4) do not violate any law or regulation, or any
order or decree of any Governmental Authority; (5) do not conflict with or
result in the breach or termination of, constitute a default under or accelerate
or permit the acceleration of any performance required by, any indenture,
mortgage, deed of trust, lease, agreement or other instrument to which such
Person is a party or by which such Person or any of its property is bound; (6)
do not result in the creation or imposition of any Lien upon any of the property
of such Person other than those in favor of Agent, on behalf of itself and
Lenders, pursuant to the Loan Documents; and (7) do not require the consent or
approval of any Governmental Authority or any other Person.
(b) This Amendment and Consent and the financing statements
and other documents to be executed and delivered by the Credit Parties and
Export have been duly executed and delivered by each Credit Party and Export and
this
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Amendment and Consent and the Loan Documents as amended hereby constitute the
legal, valid and binding obligation of such Credit Party and Export enforceable
against it in accordance with their terms.
(c) After giving effect to the amendments and consent
contained in this Amendment and Consent, each of the representations and
warranties of the Credit Parties (including Export) contained in the Credit
Agreement and each of the other Loan Documents shall be true and correct on and
as of the Effective Date as if made on such date, except to the extent any such
representation or warranty expressly relates to an earlier date and except for
changes therein expressly permitted or expressly contemplated by such
agreements.
(d) After giving effect to the amendments and consent
contained in this Amendment and Consent, no Default or Event of Default shall be
continuing.
(e) Upon the Effective Date, Export shall be a Credit Party,
Grantor, Guarantor and Pledgor under the Credit Agreement, Security Agreement,
Guaranty and Pledge Agreement, respectively.
SECTION 6. Conditions Precedent to the Effectiveness of this
Amendment and Consent. This Amendment and Consent shall become effective as of
the first date on which each of the following conditions shall have been
satisfied or provided for in a manner satisfactory to Agent, or waived by Agent
and Requisite Lenders (such date is referred to herein as the "Effective Date"):
(a) Agent shall have executed this Amendment and Consent.
(b) Agent shall have received, in form and substance
satisfactory to Agent, this Amendment and Consent, duly executed and delivered
by Export, Borrower, the other Credit Parties and Requisite Lenders.
(c) Agent on behalf of Lenders executing this Amendment and
Consent and GE Capital shall have received the Amendment Fee.
(d) Agent shall have received, in form and substance
satisfactory to Agent, financing statements on Form UCC-1 in proper form for
filing, duly executed and delivered by Export.
(e) Agent shall have received, in form and substance
satisfactory to Agent, Pledge Amendments, duly executed and delivered by
Borrower and Export, pledging Intercompany Notes between Borrower and Export
pursuant to Section 6.4(a)(vii) of the Credit Agreement, along with the original
Intercompany Notes and
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duly executed instruments of transfer in blank in form and substance
satisfactory to Agent.
SECTION 7. Reference to and Effect on the Loan Documents. (a)
On and after the Effective Date, each reference in the Loan Documents to "this
Agreement", "herein", "hereof", "hereunder" or words of similar import, shall
mean and be a reference to such Loan Document as amended hereby.
(b) Except as specifically amended above, the Credit
Agreement, the Notes and all other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment and Consent shall not, except as expressly provided herein, operate as
a waiver of any right, power or remedy of Lenders under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
SECTION 8. Fees and Expenses. Borrower agrees to reimburse
Agent for all reasonable out-of-pocket fees, costs and expenses, including the
reasonable fees, costs and expenses of counsel or other advisors in connection
with the preparation, execution, and delivery of this Amendment and Consent.
SECTION 9. GOVERNING LAW. THIS AMENDMENT AND CONSENT AND THE
OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA.
SECTION 10. Section Titles. Section titles contained in this
Amendment and Consent are and shall be without substantive meaning or content of
any kind whatsoever and are not a part of the agreement between the parties
hereto.
SECTION 11. Counterparts. This Amendment and Consent may be
executed in any number of separate counterparts, each of which shall
collectively and separately constitute one agreement.
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IN WITNESS WHEREOF, this Amendment and Consent has been duly
executed as of the date first written above.
RENAISSANCE INTERNATIONAL
EXPORT, INC.
By: /s/
Name:
Title:
XXXX PERFUMES CORP.
By: /s/
Name:
Title:
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender
By: /s/
Name:
Title: Duly Authorized Signatory
NATIONAL CITY COMMERCIAL
FINANCE, INC.,
as Lender
By: /s/
Name:
Title:
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PNC BANK, N.A.,
as Lender
By: /s/
Name:
Title:
Other Credit Parties:
RENAISSANCE COSMETICS, INC.
COSMAR CORPORATION
RCI CHINA, INC.
GREAT AMERICAN COSMETICS, INC.
HOUBIGANT (1995) LIMITED
MEM COMPANY, INC.
TINKERBELL, INC.
(f/k/a XXXXXX XXXXXX, INC.)
MEM COMPANY (CANADA) LIMITED
By: /s/
Name:
Title:
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ANNEX B (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the
Agreement, Agent and Revolving Lenders agree to incur, from time to time prior
to the Commitment Termination Date, upon the request of Borrower and for
Borrower's account, Letter of Credit Obligations by causing Letters of Credit to
be issued (by a bank or other legally authorized Person selected by or
acceptable to Agent in its sole discretion (each, an "L/C Issuer")) for
Borrower's account and guaranteed by Agent; provided, however, that if the L/C
Issuer is a Revolving Lender, then such Letters of Credit shall not be
guaranteed by Agent but rather each Revolving Lender shall, subject to the terms
and conditions hereinafter set forth, purchase (or be deemed to have purchased)
risk participations in all such Letters of Credit issued with the written
consent of Agent, as more fully described in paragraph (b)(ii) below. The
aggregate amount of all such Letter of Credit Obligations shall not at any time
exceed the least of (i) five million dollars ($5,000,000) (the "L/C Sublimit"),
and (ii) the Maximum Amount less the aggregate outstanding principal balance of
the Revolving Credit Advances, and (iii) the Borrowing Base less the aggregate
outstanding principal balance of the Revolving Credit Advances. No such Letter
of Credit shall have an expiry date which is more than one year following the
date of issuance thereof, and neither Agent nor Revolving Lenders shall be under
any obligation to incur Letter of Credit Obligations in respect of, or purchase
risk participations in, any Letter of Credit having an expiry date which is
later than the Commitment Termination Date.
(b) (i) Advances Automatic; Participations. In the event that
Agent or any Revolving Lender shall make any payment on or pursuant to any
Letter of Credit Obligation, such payment shall then be deemed automatically to
constitute a Revolving Credit Advance under Section 1.1(a) of the Agreement
regardless of whether a Default or Event of Default shall have occurred and be
continuing and notwithstanding Borrower's failure to satisfy the conditions
precedent set forth in Section 2, and each Revolving Lender shall be obligated
to pay its Pro Rata Share thereof in accordance with the Agreement. The failure
of any Revolving Lender to make available to Agent for Agent's own account its
Pro Rata Share of any such Revolving Credit Advance or payment by Agent under or
in respect of a Letter of Credit shall not relieve any other Revolving Lender of
its obligation hereunder to make available to Agent its Pro Rata Share thereof,
but no Revolving Lender shall be responsible for the failure of any other
Revolving Lender to make available such other Revolving Lender's Pro Rata Share
of any such payment.
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(ii) If the L/C Issuer is a Revolving Lender or if it
shall be illegal or unlawful for Borrower to incur Revolving Credit Advances as
contemplated by paragraph (b)(i) above because of an Event of Default described
in Section 8.1(h) or (i) or otherwise or if it shall be illegal or unlawful for
any Revolving Lender to be deemed to have assumed a ratable share of the
reimbursement obligations owed to an L/C Issuer, then (i) immediately and
without further action whatsoever, each Revolving Lender shall be deemed to have
irrevocably and unconditionally purchased from Agent (or such L/C Issuer, as the
case may be) an undivided interest and participation equal to such Revolving
Lender's Pro Rata Share of the Letter of Credit Obligations in respect of all
Letters of Credit then outstanding and (ii) thereafter, immediately upon
issuance of any Letter of Credit, each Revolving Lender shall be deemed to have
irrevocably and unconditionally purchased from Agent (or such L/C Issuer, as the
case may be) an undivided interest and participation in such Revolving Lender's
Pro Rata Share of the Letter of Credit Obligations with respect to such Letter
of Credit on the date of such issuance. Each Revolving Lender shall fund its
participation in all payments or disbursements made under the Letters of Credit
in the same manner as provided in the Agreement with respect to Revolving Credit
Advances.
(c) Cash Collateral. If Borrower is required to provide cash
collateral for any Letter of Credit Obligations pursuant to the Agreement prior
to the Commitment Termination Date, Borrower will pay to Agent for the benefit
of Revolving Lenders cash or cash equivalents acceptable to Agent ("Cash
Equivalents") in an amount equal to 105% of the maximum amount then available to
be drawn under each applicable Letter of Credit outstanding. Such funds or Cash
Equivalents shall be held by Agent in a cash collateral account (the "Cash
Collateral Account") maintained at a bank or financial institution acceptable to
Agent. The Cash Collateral Account shall be in the name of Borrower and shall be
pledged to, and subject to the control of, Agent, for the benefit of Agent and
Lenders, in a manner satisfactory to Agent. Borrower hereby pledges and grants
to Agent, on behalf of Lenders, a security interest in all such funds and Cash
Equivalents held in the Cash Collateral Account from time to time and all
proceeds thereof, as security for the payment of all amounts due in respect of
the Letter of Credit Obligations and other Obligations, whether or not then due.
The Agreement, including this Annex B, shall constitute a security agreement
under applicable law.
If any Letter of Credit Obligations, whether or not then due
and payable, shall for any reason be outstanding on the Commitment Termination
Date, Borrower shall either (i) provide cash collateral therefor in the manner
described above, or (ii) cause all such Letters of Credit and guaranties thereof
to be canceled and returned, or (iii) deliver a stand-by letter (or letters) of
credit in guaranty of such Letter of Credit Obligations, which stand-by letter
(or letters) of credit shall be of like
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tenor and duration as, and in an amount equal to 105% of the aggregate maximum
amount then available to be drawn under, the Letters of Credit to which such
outstanding Letter of Credit Obligations relate and shall be issued by a Person,
and shall be subject to such terms and conditions, as may be satisfactory to
Agent in its sole discretion.
From time to time after funds are deposited in the Cash
Collateral Account by Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, in such order as
Agent may elect, as shall be or shall become due and payable by Borrower to
Lenders with respect to such Letter of Credit Obligations of Borrower and, upon
the satisfaction in full of all Letter of Credit Obligations of Borrower, to any
other Obligations then due and payable.
Neither Borrower nor any Person claiming on behalf of or
through Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrower to Lenders in respect thereof, any funds remaining in the
Cash Collateral Account shall be applied to other Obligations when due and owing
and upon payment in full of such Obligations, any remaining amount shall be paid
to Borrower or as otherwise required by law.
(d) Fees and Expenses. Borrower agrees to pay to Agent for the
benefit of Revolving Lenders, as compensation to such Lenders for Letter of
Credit Obligations incurred hereunder, (x) all costs and expenses incurred by
Agent or any Lender on account of such Letter of Credit Obligations, and (y) for
each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the "Letter of Credit Fee") in an amount equal to one and
one-half percent (1.50%) per annum multiplied by the maximum amount available
from time to time to be drawn under the applicable Letter of Credit. Such fee
shall be paid to Agent for the benefit of the Revolving Lenders in arrears, on
the first day of each month. In addition, Borrower shall pay to any L/C Issuer,
on demand, such fees (including all per annum fees), charges and expenses of
such L/C Issuer in respect of the issuance, negotiation, acceptance, amendment,
transfer and payment of such Letter of Credit or otherwise payable pursuant to
the application and related documentation under which such Letter of Credit is
issued.
(e) Request for Incurrence of Letter of Credit Obligations.
Borrower shall give Agent at least two (2) Business Days prior written notice
requesting the incurrence of any Letter of Credit Obligation, specifying the
date such Letter of Credit Obligation is to be incurred, identifying the
beneficiary to which such
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Letter of Credit Obligation relates and describing the nature of the
transactions proposed to be supported thereby. The notice shall be accompanied
by the form of the Letter of Credit (which shall be acceptable to the L/C
Issuer) to be guaranteed. Notwithstanding anything contained herein to the
contrary, Letter of Credit applications by Borrower and approvals by Agent may
be made and transmitted pursuant to electronic codes and security measures
mutually agreed upon and established by and among Borrower, Agent and the L/C
Issuer.
(f) Obligation Absolute. The obligation of Borrower to
reimburse Agent and Revolving Lenders for payments made with respect to any
Letter of Credit Obligation shall be absolute, unconditional and irrevocable,
without necessity of presentment, demand, protest or other formalities, and the
obligations of each Revolving Lender to make payments to Agent or the L/C Issuer
if it is a Revolving Lender with respect to Letters of Credit shall be
unconditional and irrevocable. Such obligations of Borrower and Revolving
Lenders shall be paid strictly in accordance with the terms hereof under all
circumstances including the following circumstances:
(i) any lack of validity or enforceability of any Letter of
Credit or the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, set-off, defense or other
right which Borrower or any of its Affiliates or any Lender may at any
time have against a beneficiary or any transferee of any Letter of
Credit (or any Persons or entities for whom any such transferee may be
acting), Agent, any Lender, or any other Person, whether in connection
with the Agreement, the Letter of Credit, the transactions contemplated
herein or therein or any unrelated transaction (including any
underlying transaction between Borrower or any of its Affiliates and
the beneficiary for which the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by Agent or any L/C Issuer under any Letter of
Credit or guaranty thereof against presentation of a demand, draft or
certificate or other document which does not comply with the terms of
such Letter of Credit or such guaranty;
(v) any other circumstance or happening whatsoever, which is
similar to any of the foregoing; or
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(vi) the fact that a Default or an Event of Default shall have
occurred and be continuing.
(g) Indemnification; Nature of Lenders' Duties. In addition to
amounts payable as elsewhere provided in the Agreement, Borrower hereby agrees
to pay and to protect, indemnify, and save harmless Agent and each Lender from
and against any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including attorneys' fees and allocated costs of internal
counsel) which Agent or any Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit or guaranty
thereof, or (ii) the failure of Agent or any Lender seeking indemnification or
of any L/C Issuer to honor a demand for payment under any Letter of Credit or
guaranty thereof as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority, in each case other than to the extent solely as a result
of the gross negligence or willful misconduct of Agent or such Lender (as
finally determined by a court of competent jurisdiction).
As between Agent and any Lender and Borrower, Borrower assumes
all risks of the acts and omissions of, or misuse of any Letter of Credit by
beneficiaries of any Letter of Credit. In furtherance and not in limitation of
the foregoing, to the fullest extent permitted by law neither Agent nor any
Lender shall be responsible: (i) for the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in connection
with the application for and issuance of any Letter of Credit, even if it should
in fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; (iii) for
failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to demand payment under such Letter of Credit;
provided that, in the case of any payment by Agent or the L/C Issuer if it is a
Revolving Lender under any Letter of Credit or guaranty thereof, Agent or such
L/C Issuer shall be liable to the extent such payment was made solely as a
result of its gross negligence or willful misconduct (as finally determined by a
court of competent jurisdiction) in determining that the demand for payment
under such Letter of Credit or guaranty thereof complies on its face with any
applicable requirements for a demand for payment under such Letter of Credit or
guaranty thereof; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) for errors in interpretation of
technical terms; (vi) for any loss or delay in the transmission or otherwise of
any document required in order to make a payment under any Letter of Credit or
guaranty thereof or of the proceeds thereof; (vii) for the credit of the
proceeds of any drawing
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under any Letter of Credit or guaranty thereof; and (viii) for any consequences
arising from causes beyond the control of Agent or any Lender. None of the above
shall affect, impair, or prevent the vesting of any of Agent's or any Lender's
rights or powers hereunder or under the Agreement.
Nothing contained herein shall be deemed to limit or to expand
any waivers, covenants or indemnities made by Borrower in favor of any L/C
Issuer in any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between Borrower and such L/C Issuer.
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