EXHIBIT 4.01.6
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FIFTH AMENDMENT TO REVOLVING CREDIT
AND SECURITY AGREEMENT
THIS FIFTH AMENDMENT TO REVOLVING CREDIT AND SECURITY AGREEMENT (this
"Amendment") is made as of April 27, 2001, among SWANK, INC., a corporation
organized under the laws of the State of Delaware (the "Borrower"), and PNC
BANK, NATIONAL ASSOCIATION, a national banking association ("PNC"), as agent for
the Lenders described below (in such capacity, the "Agent") and as a Lender.
W I T N E S S E T H:
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A. Pursuant to the Revolving Credit and Security Agreement dated as of
July 27, 1998, as amended by the Amendment to Revolving Credit and Security
Agreement dated as of July 12, 1999, the Second Amendment to Loan Documents
dated as of October 29, 1999, the Third Amendment to Revolving Credit and
Security Agreement dated as of December 31, 1999 and the Fourth Amendment to
Loan Documents dated as of October 18, 2000 (as further amended, supplemented or
modified from time to time, the "Credit Agreement"), by and among the Borrower,
the financial institutions and insurance companies which are now or which
hereafter become a party thereto (collectively, the "Lenders" and individually a
"Lender"), and the Agent, as agent for the Lenders, the Lenders agreed to make
revolving credit loans to, and issue letters of credit for the account of, the
Borrower upon the terms and conditions set forth therein.
B. PNC is currently the sole Lender.
C. The Borrower, the sole Lender and the Agent have agreed to amend the
Credit Agreement upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the sole Lender and the Agent agree as follows:
1. Capitalized terms used in this Amendment shall have the same
meanings given them in the Credit Agreement, unless otherwise defined herein.
2. Notwithstanding anything to the contrary contained in this
Amendment, the Credit Agreement or any Other Document, from and after the date
of this Amendment, no further Eurodollar Rate Loans shall be made by the Lenders
to the Borrower under the Credit Agreement and no loan under the Credit
Agreement shall be converted into a Eurodollar Rate Loan. All loans made by the
Lenders to the Borrower under the Credit Agreement on and after the date of this
Amendment shall be Domestic Rate Loans. Each Eurodollar Rate Loan outstanding on
the date of this Amendment shall be converted by the Borrower to a Domestic Rate
Loan on the last Business Day of the current Interest Period applicable to such
Eurodollar Rate Loan, pursuant to Section 2.2(d) of the Credit Agreement.
3. The definition of "Applicable Margin" in Section 1.2 of the Credit
Agreement read in its entirety as follows:
"Applicable Margin" shall mean with respect to the unpaid
balance of Revolving Advances, (a) during the period until April 27,
2001 (and, in the case of all Eurodollar Rate Loans outstanding as of
April 27, 2001, until repayment thereof or conversion of such Loans to
Domestic Rate Loans) the applicable percentages set forth below:
Fixed Charge Applicable Margin Applicable Margin for
Coverage Ratio for Domestic Rate Loans Eurodollar Rate Loans
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Greater than or equal to 1.1:1.0 0.25% 2.0%
less than 1.1:1.0 but greater
than or equal to 0.5:1.0 0.75% 2.50%
less than 0.5:1.0 but greater
than or equal to 0:1.0 1.0% 2.75%
less than 0:1.0 1.25% 3.0%
and (b) thereafter, one and one-half percent (1.50%) for Domestic Rate
Loans; provided that, after April 27, 2001, the Applicable Margin for
Eurodollar Rate Loans set forth in clause (a) above shall continue to
apply to the calculation of letter of credit fees pursuant to Section
3.2 hereof.
The foregoing shall not be deemed to be a modification or waiver of
Borrower's obligations under Section 6.5 of this Agreement."
4. The definition of "Revolving Interest Rate" in Section 1.2 of the
Credit Agreement is hereby amended to read in its entirety as follows:
"Revolving Interest Rate" shall mean an interest rate
per annum equal to (a) the sum of (i) the Base Rate plus (ii) the
Applicable Margin with respect to Domestic Rate Loans, or (b) in the
case of Eurodollar Rate Loans outstanding on or prior to April 27,
2001, the sum of (i) the Eurodollar Rate plus (ii) the Applicable
Margin with respect to Eurodollar Rate Loans, as applicable."
5. The definition of "Seasonal Advance Period" in Section 1.2 of the
Credit Agreement is hereby amended to read in its entirety as follows:
"Seasonal Advance Period" shall mean the period
commencing on July 1, 2001 and ending on November 30, 2001."
6. The definition of "Maximum Seasonal Advance Amount" in Section 1.2
of the Credit Agreement is hereby amended to read in its entirety as follows:
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"Maximum Seasonal Advance Amount" shall mean one
million five hundred thousand dollars ($1,500,000) for the Seasonal
Advance Period."
7. Section 6.5 of the Credit Agreement is hereby deleted in its
entirety.
8. Section 6.10 of the Credit Agreement is hereby amended to delete the
phrase "and each quarter thereafter" at the end of the table contained therein
and to insert the following at the end of such table:
"Quarter Ending Minimum Tangible Net Worth
March 31, 2001 $18,500,000
June 30, 2001 $13,500,000
September 30, 2001 $13,500,000
December 31, 2001 $14,500,000"
9. The first sentence of Section 13.1 of the Credit
Agreement is hereby amended to delete the phrase "the
fifth anniversary of the Closing Date" and to insert
"June 25, 2002" in lieu thereof.
10. A new Section 6.12 is hereby added to the Credit Agreement to read
in its entirety as follows:
"6.12 Sale of Norwalk Facility and Women's Jewelry
Division. (a) In the event that a sale/leaseback of Borrower's Norwalk,
CT facility has not taken place byJune 1, 2001, Borrower shall grant to
Agent a perfected first priority mortgage on Borrower's Real Property
in Norwalk, CT (including such facility) to secure the prompt payment
and performance to Agent and each Lender of the Obligations. Such
mortgage shall be in form and substance satisfactory to Agent and shall
be executed, delivered and recorded by Borrower as soon as practicable
after June 1, 2001 (and, in any event, no later than June 15, 2001).
Such mortgage shall be included in the Collateral (as defined herein)
and the Real Property subject to such mortgage shall be included in the
Formula Amount at an advance rate to be determined by Agent in its sole
discretion. Prior to or contemporaneously with the execution and
delivery of such mortgage, Borrower shall execute and deliver to Agent
an environmental indemnity agreement with respect to such Real Property
in form and substance acceptable to Agent and shall furnish to Agent an
environmental report with respect to such Real Property in form and
substance acceptable to Agent and a title search with respect to such
Real Property showing that such mortgage is a first priority lien
thereon, subject only to standard exceptions acceptable to Agent. The
net proceeds of any such sale of Borrower's Norwalk, CT facility (after
taking into account prepaid rent and reserves, broker's commissions,
applicable taxes and other direct expenses of the sale) shall be
deposited by Borrower in a Blocked Account or Depository Account, as
directed by Agent, and shall be applied to repay Revolving Advances.
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(b) In the event that a sale of Borrower's Women's
Jewelry Division has not taken place by June 1, 2001, Agent will
implement reserves under Section 2.1(a)(y)(v) hereof, in amounts
determined in its sole discretion, for the potential writedown of the
Women's Jewelry Division inventory. The provisions of this Section
6.12(b) shall not in any way limit any other rights of Agent to
establish reserves for such inventory at any other time pursuant to
Section 2.1(a)(y)(v) hereof. The net proceeds of any such sale of
Borrower's Women's Jewelry Division (after taking into account brokers'
commissions, applicable taxes and other direct expenses of the sale)
shall be deposited by Borrower in a Blocked Account or Depository
Account, as directed by Agent, and shall be applied to repay Revolving
Advances.
(c) Nothing contained this Section 6.12 or otherwise
in this Agreement shall constitute or be deemed to be a consent by
Agent or Lenders to any sale of Borrower's Women's Jewelry Division or
a waiver of any provision of this Agreement which would otherwise
prohibit or restrict any such sale, and no such sale shall occur unless
and until Agent and Lenders shall have consented thereto in writing,
which consent shall not be unreasonably withheld."
The mortgage referred to in new Section 6.12 of the Credit Agreement
set forth above shall be granted to the Agent in consideration of the Agent's
entering into this Amendment, granting the waivers contained in the letter dated
April 16, 2001 from the Agent to the Borrower, and the Lenders continuing to
make loans to the Borrower under the Credit Agreement in accordance with the
provisions thereof.
11. In order to induce the sole Lender and the Agent to enter into this
Amendment, the Borrower hereby represents and warrants that:
(a) after giving effect to paragraphs 8 and 9 of this
Amendment and the letter dated April 16, 2001 from Agent to Borrower, no Default
or Event of Default has occurred and is continuing;
(b) this Amendment has been duly authorized, executed and
delivered by the Borrower and constitutes its legal, valid and binding
obligation, enforceable in accordance with its terms;
(c) the Credit Agreement and each of the Other Documents to
which the Borrower is a party, after giving effect to this Amendment and the
transactions contemplated hereby, continue to be in full force and effect and to
constitute the legal, valid and binding obligations of the Borrower, enforceable
against the Borrower in accordance with their respective terms; and
(d) the representations and warranties made by the Borrower in
or pursuant to the Credit Agreement or any Other Document, or which are
contained in any certificate, document or financial or other statement furnished
at any time under or in connection herewith or therewith, are each true and
correct in all material respects on and as of the date hereof, as though made on
and as of such date.
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12. This Amendment shall become effective as of the date above upon
receipt by the Agent of (a) two (2) copies of this Amendment executed by the
Borrower, and (b) a modification fee of one hundred fifty thousand dollars
($150,000) in immediately available funds.
13. The Borrower hereby confirms that all liens granted on the
Collateral shall continue unimpaired and in full force and effect.
14. This Amendment may be executed in several counterparts, each of
which, when executed and delivered, shall be deemed an original, and all of
which together shall constitute one agreement. Any signature delivered by a
party by facsimile transmission shall be deemed to be an original signature
hereto.
15. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York applied to contracts to be performed
wholly within the State of New York, without giving effect to the conflicts of
law rules that would defer to the substantive laws of another jurisdiction. This
Amendment shall be binding upon and inure to the benefit of the Borrower, the
Lenders and the Agent, and their respective successors and permitted assigns.
16. From and after the effectiveness hereof, all references to the
Credit Agreement in the Other Documents shall mean the Credit Agreement as
amended and modified by this Amendment.
17. Except as amended and otherwise modified by this Amendment, the
Credit Agreement and the Other Documents shall remain in full force and effect
in accordance with their respective terms. Except as expressly provided herein,
this Amendment shall not constitute an amendment, waiver, consent or release
with respect to any provision of the Credit Agreement or any Other Document, a
waiver of any Default or Event of Default thereunder, or a waiver or release of
any of the Agent's or any Lender's rights or remedies (all of which are hereby
reserved). THE BORROWER EXPRESSLY RATIFIES AND CONFIRMS THE WAIVER OF JURY TRIAL
AND OTHER PROVISIONS OF SECTION 12.3 OF THE CREDIT AGREEMENT.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
ATTEST: SWANK, INC.
/s/ Xxxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
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Title: President
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PNC BANK, NATIONAL ASSOCIATION,
as Lender and as Agent
By: /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
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Title: Vice President
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