THIRD AMENDMENT
TO
SECOND RESTATED AND AMENDED
REVOLVING CREDIT AND SECURITY AGREEMENT
This Third Amendment to the Second Restated and Amended Revolving
Credit and Security Agreement (this "Amendment"), made as of December 6, 1996,
among the undersigned amends that certain Second Restated and Amended Revolving
Credit and Security Agreement, dated June 6, 1996, as previously amended as of
June 28, 1996 and October 15, 1996, (as amended previously and hereby, the
"Agreement"), among the Borrowers and the Lenders (as such terms are defined in
the Agreement).
WITNESSETH:
WHEREAS, the Borrowers and the Lenders entered into the Agreement
pursuant to which the Lenders have, on the terms and subject to the conditions
stated therein, made Loans to Borrowers;
WHEREAS, the Borrowers have identified an opportunity to make a
$13,000,000 special purchase of inventory consisting of Xxxxx Xxxxxx Fragrances
from Cosmair, Inc., such acquisition to be paid for in several installments (the
"Special RL Purchase");
WHEREAS, the Borrowers have requested that Lenders consent to the
Special RL Purchase and that the Agreement be amended in certain respects as set
forth in this Amendment, including, without limitation, so as to extend usage
beyond the 30 day limit imposed in the Agreement under the Borrowers' $6,500,000
Overadvance sublimit in order to accommodate the Special RL Purchase;
WHEREAS, in furtherance of the Special RL Purchase, the Borrowers
have requested that the Loan Agreement be amended to include in the definition
of the Borrowers an additional Subsidiary; and
WHEREAS, the Lenders have agreed to add the Subsidiary to the
definition of the Borrowers solely in accordance with the terms and conditions
of this Amendment;
NOW, THEREFORE, in consideration of the premises and of good and
valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto agree as follows:
Section 1. Definitions. All capitalized terms used herein which are
defined in the Agreement shall have the same meanings herein as therein, except
as otherwise specifically provided herein.
SECTION 2. CONSENT TO SPECIAL RL PURCHASE. Notwithstanding the terms
of the Agreement, including without limitation Section 5.8 thereof, the Lenders
hereby consent
to the Special RL Purchase solely in accordance with and to the extent
consistent with the terms of this Amendment.
SECTION 3. AMENDMENTS TO THE AGREEMENT. From and after the date
hereof, the Agreement is hereby amended as follows:
3.1 The $55,000,000 ceiling for the value of the Borrowing
Base Percentage of the Net Security Value of Base Inventory set forth in Section
1.11 is hereby increased to $64,000,000 solely for the period commencing on the
date hereof and ending on the earlier to occur of (i) such time as the Special
RL Purchase Overadvance is reduced to $0, or (ii) July 1, 1997. From and after
such time as such period shall end, such ceiling shall cease to be $64,000,000
and shall revert to $55,000,000, unless further modified in accordance with the
terms of the Agreement.
3.2 Section 2.7 of the Agreement is hereby amended by the
addition of the following clause (iii):
"(iii) In order to facilitate the Borrowers accomplishing
the Special RL Purchase, the Borrowers and Lenders hereby establish
the 'Special RL Purchase Overadvance Period.' The Special RL Purchase
Overadvance Period shall commence on the date hereof and extend until
ninety (90) days (the "Ninety Day Period") following the earlier to
occur of (i) such time as the Overadvance outstanding from and after
the date hereof is reduced to $0, and (ii) July 1, 1997. Pursuant to
clause (ii) of Section 2.7 hereof, the Agent hereby consents to the
Borrowers' requests for Overadvances in connection with the
Borrowers' consummation of the Special RL Purchase, and such
Overadvances shall constitute Overadvances made pursuant to clause
(i)(a) of this Section 2.7. For the entire duration of the Special RL
Purchase Overadvance Period, no other Overadvances shall be permitted
pursuant to Sections 2.7(i)(a), (b) or (c), provided, however,
Overadvances not to exceed $2,000,000 at any time outstanding may be
made pursuant to Section 2.7(i)(b) during the Ninety Day Period.
Notwithstanding Section 2.7(ii)(f), Overadvances made pursuant to
Section 2.7(i)(a) to facilitate the Special RL Purchase during the
Special RL Purchase Overadvance Period may remain outstanding until
July 1, 1997 and shall not exceed the maximum aggregate amount of
$6,500,000 for the period from the date hereof through March 31,
1997; shall not exceed $4,500,000 during the month of April, 1997;
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shall not exceed $3,500,000 during the month of May, 1997; shall not
exceed $2,500,000 during the month of June, 1997; and shall not
exceed $0 during the period commencing on July 1, 1997 and ending on
September 29, 1997. Notwithstanding the immediately preceding
sentence, from and after such time as the Special RL Purchase
Overadvance balance has been reduced to $0 prior to July 1, 1997, the
maximum aggregate amount of Overadvances pursuant to Section
2.7(i)(a) shall not exceed $0 for the duration of the Special RL
Purchase Overadvance Period."
3.3 Notwithstanding the terms of Sections 2.8.2(ii) and
(iii) of the Agreement, the Borrowers shall pay to the Agent for the benefit of
the Lenders in proportion to their respective commitment percentages for
issuance of Letters of Credit issued in connection with the Special RL Purchase
a fee quarterly in arrears that is either in accordance with the terms of
Section 2.8.2(i) or (y) a fee equal to the greater of 1/2% of the face amount of
each sight documentary Letter of Credit or such minimum fee for each such Letter
of Credit as may be generally in affect from time to time, or (z) a fee equal to
the greater of 2% per annum of the face amount of each time documentary Letter
of Credit or such minimum fee for each such Letter of Credit as may be generally
in effect from time to time; plus such fees and charges as are customarily
charged by the Agent.
SECTION 4. FEE. Simultaneously with the execution and delivery
hereof, the Borrowers shall pay to the Agent for the benefit of the Lenders pro
rata in proportion to their respective Commitment Percentages an administrative
fee of $20,000 in the aggregate.
SECTION 5. Conditions Precedent to this Amendment. The Agreements of
the Lenders set forth in this Amendment are subject to the satisfaction of the
conditions precedent to the Agreements set forth in that certain Third Amendment
to Subsidiary Tie-In Agreement, of even date herewith, among the Borrowers and
the Lenders.
SECTION 6. ADDITIONAL REPORTING. In addition to such information as
is required from time to time pursuant to Section 5 of the Agreement, the
Borrowers shall provide to the Agent by the 15th day of each calendar month
reports of sales and gross profits on a divisional basis for the immediate
preceding month.
SECTION 7. GENERAL.
7.1 The Agreement is hereby ratified and confirmed and
shall continue in full force and effect as amended hereby.
7.2 The Borrowers hereby represent and warrant that there
is no default or Event of Default outstanding or continuing under the Agreement
or any instrument or document executed in connection with the Agreement, or any
event or
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condition which with the giving of notice or the passage of time, or both, would
result in a default or an Event of Default under the Agreement or any instrument
or document executed in connection with the Agreement.
7.3 This Letter Agreement may be signed in any number of
counterparts with the same effect as if the signatures hereto and thereto were
upon the same instrument.
7.4 Allou Personal Care Corporation, X. Xxxxx, Inc.,
Superbuy of New York, Inc., Rona Beauty Supplies, Inc., Hempstead Health &
Beauty Aids, Inc., Pastel Cosmetic and Beauty Aids, Inc., HBA National Sales
Corp., HBA Distributors, Inc., Xxxx Xxxxxx Personal Care Corp., Stanford
Personal Care Manufacturing, Inc., and Cosmetic Plus Two, Inc. are each
executing and delivering this Amendment as a Borrower pursuant to the terms of
the Subsidiary Tie-In Agreement, as amended through the date hereof.
7.5 All of the Obligations undertaken hereunder by the
Borrowers are hereby undertaken by each of them jointly and severally.
If the foregoing sets forth your understanding of the matters
addressed herein, please evidence your agreement by countersigning this
Amendment in the space set forth below, whereupon this Amendment shall take
effect as an agreement under seal as of the day first written above.
THE FIRST NATIONAL BANK OF BOSTON
By:/s/Xxxxx X. Xxxx
---------------------------------
Title: Director
IBJ XXXXXXXX BANK & TRUST COMPANY
By:/s/ Xxxx XxXxxxxxxx
---------------------------------
Title: Vice President
SANWA BUSINESS CREDIT CORPORATION
By: /s/
---------------------------------
Title: Vice President
LASALLE BUSINESS CREDIT, INC.
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------
Title: Vice President
(Signatures continued on next page)
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THE BANK OF TOKYO - MITSUBISHI TRUST
COMPANY
By:/s/ G Xxxxxxx
---------------------------------
Title: SVP and Manager
ALLOU & BEAUTY CARE, INC.
ALLOU DISTRIBUTORS, INC.
ALLOU PERSONAL CARE CORPORATION
X. XXXXX, INC.
SUPERBUY OF NEW YORK, INC.
RONA BEAUTY SUPPLIES, INC.
HEMPSTEAD HEALTH & BEAUTY AIDS, INC.
PASTEL COSMETIC AND BEAUTY AIDS, INC.
HBA NATIONAL SALES CORPORATION
HBA DISTRIBUTORS, INC.
XXXX XXXXXX PERSONAL CARE
CORPORATION
STANFORD PERSONAL CARE
MANUFACTURING, INC.
COSMETIC PLUS TWO, INC.
By:./s/ Xxxxx Xxxxxxxxxxx
---------------------------------
Title: SVP and CFO
CONSENT OF GUARANTORS
Each of Xxxxxx Xxxxxx, Xxxxxx Xxxxxx and Xxxxx Xxxxxx (collectively,
the "Guarantors") has guaranteed certain of the Obligations under the Agreement
by executing separate Limited Guaranties dated as of December 10, 1991
(collectively, as amended, the "Guaranties"). By executing this letter, each of
the Guarantors hereby absolutely and unconditionally reaffirms the Guaranty to
which he is a party, and acknowledges and agrees to the terms and conditions of
this Amendment and the Agreement as so amended.
/s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxx Xxxxxx
---------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
---------------------------------
Xxxxxx Xxxxxx
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