1
EXHIBIT 10.1.2
SECOND AMENDMENT TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this "Second Amendment"),
dated as of March 12, 1999, is entered into among HOME INTERIORS & GIFTS, INC.,
a Texas corporation (the "Borrower"), the institutions listed on the signature
pages hereof that are parties to the Credit Agreement defined below
(collectively, the "Lenders"), THE CHASE MANHATTAN BANK, as syndication agent
(in said capacity, the "Syndication Agent"), NATIONAL WESTMINSTER BANK, PLC , as
documentation agent (the "Documentation Agent'), THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, as a co-agent, SOCIETE GENERALE, as a co-agent, CITICORP
USA. INC., as a co-agent (collectively, the "Co-Agents'), and NATIONSBANK, N.A.,
as administrative agent (in said capacity, the "Administrative Agent").
BACKGROUND
A. The Borrower, the Lenders, the Documentation Agent, the Syndication
Agent, the Co- Agents, and the Administrative Agent are parties to that certain
Credit Agreement, dated as of June 4, 1998, as amended by that certain First
Amendment to Credit Agreement, dated as of December 18, 1998 (said Credit
Agreement, as amended, the "Credit Agreement"; the terms defined in the Credit
Agreement and not otherwise defined herein shall be used herein as defined in
the Credit Agreement).
B. The Borrower, the Lenders, the Documentation Agent, the Syndication
Agent, the Co- Agents, and the Administrative Agent desire to make certain
amendments to the Credit Agreement.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, the Borrower, the
Lenders, the Documentation Agent, the Syndication Agent, the Co-Agents, and the
Administrative Agent covenant and agree as follows:
1. AMENDMENT TO CREDIT AGREEMENT. The definition of "Excess Cash Flow"
set forth in Section 1.1 of the Credit Agreement is hereby amended by (a)
deleting the "." at the end of the definition thereof and inserting ";" in lieu
thereof and (b) adding the following proviso at the end thereof to read as
follows:
"; provided, however, notwithstanding the above, there shall be
excluded from the definition of Current Liabilities for purposes of
calculating Working Capital for the period ending December 31, 1998,
accounts payable, which otherwise would have been payable in the
ordinary course, in the aggregate amount of $5,977,000, which were the
result of a delay in processing during the implementation of the
Borrower's new computer system in January, 1999."
2
2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its
execution and delivery hereof, the Borrower represents and warrants that, as of
the date hereof and after giving effect to the amendment contemplated by the
foregoing Section 1:
(a) the representations and warranties contained in the Credit
Agreement (other than those representations and warranties that specifically
relate to an earlier date) and the other Loan Documents are true and correct in
all material respects on and as of the date hereof as made on and as of such
date;
(b) no event has occurred and is continuing which constitutes a Default
or an Event of Default;
(c) the Borrower has full corporate power and authority to execute and
deliver this Second Amendment, and this Second Amendment constitutes the legal,
valid and binding obligations of the Borrower, enforceable in accordance with
its terms, except as enforceability may be limited by applicable Debtor Relief
Laws and by general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law) and except as rights to indemnity
may be limited by federal or state securities laws;
(d) neither the execution, delivery and performance of this Second
Amendment nor the consummation of any transactions contemplated herein will
conflict with any material Applicable Law, the articles of incorporation, bylaws
or other governance document of the Borrower or any of its Subsidiaries, or any
material indenture, agreement or other instrument to which the Borrower or any
of its Subsidiaries or any of their respective property may be bound; and
(e) no authorization, approval, consent, or other action by, notice to,
or filing with, any governmental authority or other Person (including the Board
of Directors of the Borrower or any Guarantor), is required for the execution,
delivery or performance by the Borrower of this Second Amendment or the
acknowledgment of this Second Amendment by any Guarantor other than (i) those
approvals and consents already obtained, and (ii) consents under immaterial
contractual obligations.
3. CONDITIONS OF EFFECTIVENESS. This Second Amendment shall be
effective as of March 12, 1999, subject to the following:
(a) the Administrative Agent shall receive counterparts of this Second
Amendment executed by the Required Facility A Term Lenders and the Required
Facility B Term Lenders;
(b) the Administrative Agent shall receive counterparts of this Second
Amendment executed by the Borrower and acknowledged by each Guarantor; and
- 2 -
3
(c) the Administrative Agent shall receive, in form and substance
satisfactory to the Administrative Agent and its counsel, such other documents,
certificates and instruments as the Administrative Agent shall reasonably
require.
4. GUARANTOR ACKNOWLEDGMENT. By signing below, each of the Guarantors
(i) acknowledges, consents and agrees to the execution and delivery of this
Second Amendment, (ii) acknowledges and agrees that its obligations in respect
of its Subsidiary Guaranty are not released, diminished, waived, modified,
impaired or affected in any manner by this Second Amendment or any of the
provisions contemplated herein, (iii) ratifies and confirms its obligations
under its Subsidiary Guaranty, and (iv) acknowledges and agrees that it has no
claims or offsets against, or defenses or counterclaims to, its Subsidiary
Guaranty as a result of this Second Amendment.
5. REFERENCE TO THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this Second Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", or words of like import
shall mean and be a reference to the Credit Agreement, as amended by this Second
Amendment.
(b) The Credit Agreement, as amended by this Second Amendment, and all
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
6. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Administrative Agent in
connection with the preparation, reproduction, execution and delivery of this
Second Amendment and the other instruments and documents to be delivered
hereunder (including the reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent with respect thereto and with respect to advising
the Administrative Agent as to its rights and responsibilities under the Credit
Agreement, as amended by this Second Amendment).
7. EXECUTION IN COUNTERPARTS. This Second Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each which when so executed and delivered shall be deemed to be an
original and all of which taken together shall constitute but one and the same
instrument.
8. GOVERNING LAW: BINDING EFFECT. This Second Amendment shall be
governed by and construed in accordance with the Laws of the State of Texas
without regard to the principles of the conflicts of Laws and the applicable
federal Laws and shall be binding upon the Borrower, the Administrative Agent,
the Syndication Agent, the Documentation Agent and each Lender and their
respective successors and assigns.
- 3 -
4
9. HEADINGS. Section headings in this Second Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Second Amendment for any other purpose.
10. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AMENDED BY THIS SECOND
AMENDMENT, AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
(REMAINDER OF PAGE LEFT INTENTIONALLY BLANK)
- 4 -
5
IN WITNESS WHEREOF, the parties hereto have executed this Second
Amendment as the date first above written.
HOME INTERIORS & GIFTS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Chief Financial Officer
NATIONSBANK, N.A., as Administrative Agent and
as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
THE CHASE MANHATTAN BANK, as Syndication
Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
NATIONAL WESTMINSTER BANK, PLC, as
Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Senior Vice President
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA, as Co-Agent and as a Lender
By: /s/ ▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇
Title: Vice President
- 5 -
6
SOCIETE GENERALE, as Co-Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
CITICORP USA, INC., as Co-Agent and as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director/SCO
BANK ONE, TEXAS, N.A.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
BANKERS TRUST COMPANY
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Principal
BHF-BANK AKTIENGESELLSCHAFT
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Assistant Treasurer
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Title: Assistant Vice President
- 6 -
7
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: Associate
--------------------------------------
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------------------
Title: Executive Vice President
--------------------------------------
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Duly Authorized Signatory
--------------------------------------
▇▇▇▇▇▇ FINANCIAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
--------------------------------------
NATIONAL CITY BANK OF KENTUCKY
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
--------------------------------------
- 7 -
8
BALANCED HIGH-YIELD FUND I LTD.
By: BHF-BANK Aktiengesellschaft, acting
through its New York Branch, as attorney-in-
fact
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------------
Title: Assistant Treasurer
--------------------------------------
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Assistant Vice President
--------------------------------------
KZH ING-2 LLC
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Title: Authorized Agent
--------------------------------------
DELANO COMPANY
By: Pacific Investment Management Company, as
its Investment Advisor
By: PIMCO Management, Inc.,
a general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Title: Vice President
--------------------------------------
▇▇▇ ▇▇▇▇▇▇ CLO II, LIMITED
By: ▇▇▇ ▇▇▇▇▇▇ American Capital Management,
Inc., as Collateral Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Title: Senior Vice President and Director
--------------------------------------
- 8 -
9
SENIOR DEBT PORTFOLIO
By: Boston Management and Research, as
Investment Manager
By: /s/ ▇▇▇▇▇ ▇. PAGE
--------------------------------------------
Name: ▇▇▇▇▇ ▇. Page
---------------------------------------
Title: Vice President
--------------------------------------
AG CAPITAL FUNDING PARTNERS, L.P.
By: ▇▇▇▇▇▇, ▇▇▇▇▇▇ & Co., L.P., as Investment
Manager
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------
Title: Authorized Signatory
--------------------------------------
ALLIANCE CAPITAL MANAGEMENT L.P., as Manager on
behalf of Alliance Capital Funding, L.L.C.
By: Alliance Capital Management Corporation,
General Partner of Alliance Capital
Management L.P.
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
FIRST DOMINION FUNDING I
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
- 9 -
10
TCW LEVERAGED INCOME TRUST, L.P.
By: TCW Advisers (Bermuda), Ltd., as General
Partner
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By: TCW Investment Management Company, as
Investment Manager
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
TCW LEVERAGED INCOME TRUST II, L.P.
By: TCW Advisers (Bermuda), Ltd., as General
Partner
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
By: TCW Investment Management Company, as
Investment Manager
By:
--------------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
CAPTIVA III FINANCE LTD., as advised by Pacific
Investment Management Company
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Director
--------------------------------------
- 10 -
11
ACKNOWLEDGED AND AGREED:
DALLAS WOODCRAFT, INC., a Texas corporation
GIA, INC., a Nebraska corporation
HOMCO, INC., a Texas corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Secretary
--------------------------------------
HOMCO PUERTO RICO, INC., a Delaware corporation
SPRING VALLEY SCENTS, INC., a Texas corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Secretary
--------------------------------------
- 11 -