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EXHIBIT 10.1
AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT (this "Agreement") is made and
entered into as of this 31st day of October, 1996 among:
BEC GROUP, INC., a Delaware corporation ("Borrower"), BEC DISTRIBUTION,
INC., a Delaware corporation ("BEC Distribution"), ▇▇▇▇▇▇▇ HOLDINGS, INC., a
Delaware corporation ("▇▇▇▇▇▇▇ Holdings"), ▇▇▇▇▇▇▇ GENERAL, INC., a Delaware
corporation ("▇▇▇▇▇▇▇ General"), ▇▇▇▇▇▇ ▇▇▇▇▇ GROUP, L.P., a Delaware limited
partnership ("▇▇▇▇▇▇ ▇▇▇▇▇ LP"), OPTICAL RADIATION CORPORATION, a Delaware
corporation ("Optical Radiation"), OPTI-RAY, INC., a New York corporation
("Opti-Ray"), O-RAY HOLDINGS, INC., a Delaware corporation ("O-Ray"), ORC
CARIBE, a California corporation ("ORC Caribe"), THE ▇▇▇▇▇▇▇ COMPANY, a Texas
corporation ("▇▇▇▇▇▇▇") (each of BEC Distribution, ▇▇▇▇▇▇▇ Holdings, ▇▇▇▇▇▇▇
General, ▇▇▇▇▇▇ ▇▇▇▇▇ LP, Optical Radiation, Opti-Ray, O-Ray, ORC Caribe and
▇▇▇▇▇▇▇ sometimes being hereinafter referred to individually as a "Guarantor"
and collectively referred to as the "Guarantors"), EACH LENDER EXECUTING AND
DELIVERING A SIGNATURE PAGE HERETO (individually, a "Lender" and collectively,
the "Lenders"); and
NATIONSBANK, N.A., a national banking association organized under the
laws of the United States of America, in its capacity as agent for the Lenders
(in such capacity, the "Agent");
W I T N E S S E T H:
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WHEREAS, the Borrower, the Guarantors, the Lenders and the Agent have
entered into a Credit Agreement, dated as of April 3, 1996, as amended hereby
and as amended pursuant to that certain Amendment No. 1 to Credit Agreement
dated as of June 17, 1996, (the "Credit Agreement"), pursuant to which the
Lenders agreed to make certain Advances to the Borrower; and
WHEREAS, the Borrower has requested that the Credit Agreement be
amended in the manner set forth herein and the Agent and the Lenders are
willing to agree to such amendment;
NOW, THEREFORE, in consideration of the mutual covenants and the
fulfillment of the conditions set forth herein, the parties hereto do hereby
agree as follows:
1. Definitions. Any capitalized terms used herein without definition
shall have the meaning set forth in the Credit Agreement.
2. Amendment. Subject to the terms and conditions set forth herein,
the Credit Agreement is hereby amended as follows:
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(a) A new defined term "FGG Disposition" is hereby inserted in
alphabetical position in Section 1.1 of the Credit Agreement and shall
read as follows:
"FGG Disposition" means the sale of all of the issued
and outstanding capital stock of The ▇▇▇▇▇▇▇ Company, Opti-Ray,
Inc. and Asian Buying Source, Inc., upon terms and conditions
acceptable to the Lenders, resulting in net proceeds to the
Borrower of at least $31,000,000;
(b) The definition of "Consolidated EBITDA" in Section 1.1 of
the Credit Agreement is hereby amended by inserting after the words
"applied on a Consistent Basis" in the last line thereof the following:
"provided, however, for any Four-Quarter Period during which
the FGG Disposition was effective, the Borrower's Consolidated
EBITDA shall be determined on a pro forma basis as if the FGG
Disposition had occurred immediately prior to such Four-
Quarter Period".
(c) The definition of "Consolidated Fixed Charge Ratio" in
Section 1.1 of the Credit Agreement is hereby amended by inserting
after the following:
"for such period" in the last line thereof the words "provided,
however, for any Four-Quarter Period during which the FGG
Disposition was effective, the Borrower's Consolidated Fixed
Charge Ratio shall be determined on a pro forma basis as if the
FGG Disposition had occurred immediately prior to such
Four-Quarter Period".
(d) The definition of "Consolidated Funded Indebtedness" in
Section 1.1 of the Credit Agreement is hereby amended by inserting
after the following:
"applied on a Consistent Basis" in the last line thereof the
words "provided, however, for any Four-Quarter Period during
which the FGG Disposition was effective, the Borrower's
Consolidated Funded Indebtedness shall be determined on a pro
forma basis as if the FGG Disposition had occurred immediately
prior to such Four-Quarter Period".
(e) The definition of "Revolving Credit Termination Date" in
Section 1.1 of the Credit Agreement is hereby amended by deleting the
words "the fifth anniversary of the Closing Date" in the second line
thereof and inserting in replacement thereof the words "364 days from
the effective date of the FGG Disposition";
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(f) A new definition of Permitted Stock Repurchases is
hereby inserted in proper alphabetical sequence in Section 1.1 of the
Credit Agreement which shall read as follows:
"Permitted Stock Repurchases" means the Borrower's
repurchase of its capital stock on the open market in accordance
with the following terms: (i) the aggregate expense incurred in
connection with such repurchases, including without limitation
the consideration tendered to holders of the Borrower's capital
stock and related professional and other expenses does not
exceed $5,000,000, (ii) the consideration paid by the Borrower
to holders of its capital stock is exclusively cash, (iii) no
such repurchase shall be made until the aggregate principal
amount of Consolidated Funded Indebtedness shall be less than
$15,000,000, and (iv) after the initial such repurchase is made
in compliance with (i), (ii) and (iii) above, no further
repurchase may be made at any time that the aggregate principal
amount of Outstandings equals or exceeds $20,000,000.
(g) The definition of "Total Revolving Credit Commitment"
in Section 1.1 of the Credit Agreement is hereby amended by deleting the
dollar figure "$30,000,000" therein and inserting in replacement thereof
the dollar figure "$25,000,000";
(h) Section 10.1(i) of the Credit Agreement is hereby
deleted in its entirety;
(i) Section 10.3 of the Credit Agreement is hereby deleted
in its entirety and inserted in replacement thereof is the following:
SECTION 10.3 INVESTMENTS; ACQUISITIONS. Make any
Acquisition or otherwise purchase, own, invest in or otherwise
acquire, directly or indirectly, any stock or other securities,
or make or permit to exist any interest whatsoever in any other
Person or permit to exist any loans or advances to any Person,
except that the Borrower and its Subsidiaries may maintain
investments or invest in:
(a) Eligible Securities;
(b) investments existing as of the date hereof and
as set forth in Schedules 8.4 and 8.5 attached hereto;
(c) accounts receivable arising and trade credit
granted in the ordinary course of business and any securities
received in satisfaction or partial satisfaction thereof in
connection with accounts of
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financially troubled Persons to the extent reasonably necessary
in order to prevent or limit loss;
(d) loans and advances to and investments in
Subsidiaries which are Guarantors;
(e) investment existing in Eyecare Products Plc as
of the date hereof and additional investment after the date
hereof therein consisting of stock dividends declared and issued
to the Borrower; and
(f) Permitted Stock Repurchases.
(j) Section 10.4 of the Credit Agreement is hereby amended
by inserting after the words "Schedule 10.4 hereto" in the second line
thereof the words "and for the FGG Disposition and disposition of all or
any part of the Borrower's investment in Eyecare Products Plc as
permitted pursuant to Section 10.3(e) hereof";
(k) Section 10.10 of the Credit Agreement is hereby amended
by inserting at the commencement thereof the words "Except for Permitted
Stock Repurchases,";
(l) Section 10.11 of the Credit Agreement is hereby amended
by deleting all of clause (iii) thereof and inserting in replacement
thereof the words "(iii) the Borrower may prepay the TIA Debt after
consummation of the FGG Disposition provided (A) no Default or Event of
Default exists hereunder either immediately prior to or immediately
after such prepayment and (B) no Indebtedness is incurred by the
Borrower at any time prior to or after such prepayment in order to make
such prepayment";
(m) Section 11.1 of the Credit Agreement is hereby deleted
in its entirety and inserted in replacement thereof is the following:
SECTION 11.1 CONSOLIDATED FIXED CHARGE RATIO.
Permit at any time during any Four-Quarter Period of the
Borrower the Consolidated Fixed Charge Ratio at the end of such
Four-Quarter Period to be less than 2.75 to 1.00.
(n) Section 11.2 of the Credit Agreement is hereby deleted
in its entirety and inserted in replacement thereof is the following:
SECTION 11.2 CONSOLIDATED FUNDED INDEBTEDNESS TO
CONSOLIDATED EBITDA. Permit at any time during any Four-Quarter
Period of the Borrower the ratio of Consolidated Funded
Indebtedness at the end of such Four-Quarter Period to
Consolidated EBITDA for such Four-Quarter Period to be equal to
or greater than 2.50 to 1.00.
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(o) SECTION 11.3 of the Credit Agreement is hereby deleted
in its entirety and inserted in replacement thereof is the following:
SECTION 11.3 CONSOLIDATED NET WORTH. Permit at any
time Consolidated Net Worth to be less than (i) $5,000,000 from
October 31, 1996 until the earlier of November 14, 1996 and the
date on which the financial statements of the Borrower and its
Subsidiaries for the fiscal quarter ending September 30, 1996
are delivered to the Agent and the Lenders in accordance with
Section 9.1(b) (such earlier date being the "Third Quarter Net
Worth Date"), and (ii) at all times on and after the Third
Quarter Net Worth Date, the greater of (A) $5,000,000 and (B)
the difference of Consolidated Net Worth as reported in the
consolidated balance sheet of the Borrower and its Subsidiaries
delivered on the Third Quarter Net Worth Date less $5,000,000.
(p) SECTION 11.4 of the Credit Agreement is hereby deleted
in its entirety and inserted in replacement thereof is the following:
SECTION 11.4 CAPITAL EXPENDITURES. Make or become
committed to make Capital Expenditures with respect to any asset
which exceed $5,000,000 in the aggregate in any Fiscal Year of
the Borrower (all on a noncumulative basis, with the effect that
amounts not expended in any Fiscal Year may not be carried
forward to a subsequent period); provided, however, that the
calculation of Capital Expenditures in the Fiscal Year in which
the FGG Disposition is effective shall be determined as if the
FGG Disposition had occurred immediately prior to such Fiscal
Year.
3. REPRESENTATIONS AND WARRANTIES. In order to induce the Agent
and the Lenders to enter into this Agreement, the Borrower represents and
warrants to the Agent and the Lenders as follows:
(a) The representations and warranties made by Borrower in
Article 8 of the Credit Agreement are true and correct on and as of the
date hereof, except to the extent that such representations and
warranties expressly relate to an earlier date;
(b) There has been no material adverse change in the
condition, financial or otherwise, of the Borrower and its Subsidiaries,
taken as a whole, since the date of the most recent financial reports of
the Borrower received by the Agent and the Lenders under Section 9.1 of
the Credit Agreement;
(c) No event has occurred and is continuing which
constitutes, and no condition exists which upon the
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consummation of the transaction contemplated hereby would constitute, a
Default or an Event of Default on the part of the Borrower under the
Credit Agreement.
4. Conditions Precedent. The effectiveness of this Agreement is
subject to the receipt by the parties hereto of the following:
(a) The Agent shall have received:
(i) eight (8) counterparts of this Agreement duly
executed by all signatories hereto;
(ii) Updated Schedules 8.7 and 10.1 containing
information relating to Liens and Indebtedness in form and
content acceptable to the Agent and the Lenders; and
(iii) copies of all additional agreements, instruments
and documents which the Agent may reasonably request, such
documents, when appropriate, to be certified by appropriate
governmental authorities.
(b) All of the proceeds of the FGG Disposition shall have
been applied first as a prepayment of the Term Loan Outstandings and a
permanent reduction of the Term Loan Commitment to zero and second, if
the Term Loan Outstandings are paid in full, to prepay the TIA Debt in
accordance with Section 10.11(iii) of the Credit Agreement as amended
hereby and, third, if all the Term Loan Outstandings and the TIA Debt
are paid in full, to prepay the Revolving Credit Outstandings. All
prepayments made pursuant to this Section 4(b) shall be accompanied by
all amounts due, if any, under Section 5.4 of the Credit Agreement.
(c) All proceedings of the Borrower relating to the matters
provided for herein shall be reasonably satisfactory to the Lenders, the
Agent and their counsel.
5. Entire Agreement. This Agreement sets forth the entire
understanding and agreement of the parties hereto in relation to the subject
matter hereof and supersedes any prior negotiations and agreements among the
parties relative to such subject matter. No promise, condition, representation
or warranty, express or implied, not herein set forth shall bind any party
hereto, and not one of them has relied on any such promise, condition,
representation or warranty. Each of the parties hereto acknowledge that, except
as otherwise expressly stated in this Agreement, no representations, warranties
or commitments, express or implied, have been made by any party to the other.
None of the terms or conditions of this Agreement may be changed, modified,
waived or canceled orally or otherwise, except by writing, signed by all the
parties hereto, specifying such change, modification, waiver or cancellation of
such terms or conditions, or of any proceeding or succeeding breach thereof.
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6. Limitation of Waiver and Consents. The waiver and consents
contained herein are limited as specified herein and shall remain in effect
only so long as the Borrower is in compliance with the terms of this Agreement.
The waiver and consents are granted only for the specific instance specified
herein and in no manner creates a course of dealing or otherwise impairs the
future ability of the Agent or the Lenders to declare a default under or
otherwise enforce the terms of the Credit Agreement.
7. Full Force and Effect of Agreement. Except as hereby
specifically amended, modified or supplemented, the Credit Agreement and all
other Loan Documents are hereby confirmed and ratified in all respects and
shall remain in full force and effect according to their respective terms. Each
Guarantor hereby acknowledges and agrees to the amendments of the Credit
Agreement set forth herein and hereby confirms and ratifies in all respects the
Guaranty and enforceability of the Guaranty against such Guarantor in
accordance with its terms.
8. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original as against any party
whose signature appears thereon, and all of which shall together constitute one
and the same instrument.
9. Governing Law. This Agreement shall in all respects be
governed by the laws and judicial decisions of the state of New York, without
giving effect to the conflict of laws provisions thereof.
10. Enforceability. Should any one or more of the provisions of
this Agreement be determined to be illegal or unenforceable as to one or more
of the parties hereto, all other provisions nevertheless shall remain effective
and binding on the parties hereto.
11. Credit Agreement. All references in any of the Loan Documents
to the "Credit Agreement" shall mean the Credit Agreement as amended hereby.
12. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of each of the Borrower, the Lenders and the Agent and
their respective successors, assigns and legal representatives; provided,
however, that the Borrower, without the prior consent of the Agent and each of
the Lenders, may not assign any rights, powers, duties or obligations
hereunder.
13. Expenses. Borrower agrees to pay to the Agent all reasonable
out-of-pocket expenses incurred or arising in connection with the negotiation
and preparation of this Agreement.
[Signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their duly authorized officers, all as of the day and year
first above written.
BORROWER:
BEC GROUP, INC.
By: /s/ IAN ▇. ▇. ▇▇▇▇▇
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Name: Ian ▇. ▇. ▇▇▇▇▇
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Title: Executive Vice President of Finance
and Administration
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LENDERS:
NATIONSBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇
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Title: Vice President
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EUROPEAN AMERICAN BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Vice President
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NATIONAL CITY BANK, KENTUCKY
By: /s/ ▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
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NATIONAL BANK OF CANADA
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
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Title: Vice President Assistant V.P.
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By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
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Title: Assistant V.P.
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Signature Page 1
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KEYBANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇
---------------------------------
Title: Vice President
---------------------------------
AGENT:
NATIONSBANK, N.A., as Agent for the
Lenders
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
Title: Vice President
---------------------------------
ACKNOWLEDGED AND AGREED this
31st day of October, 1996:
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BEC DISTRIBUTION, INC.
▇▇▇▇▇▇▇ HOLDINGS, INC.
▇▇▇▇▇▇▇ GENERAL, INC.
▇▇▇▇▇▇ ▇▇▇▇▇ GROUP, L.P.
OPTICAL RADIATION CORPORATION
OPTI-RAY, INC.
O-RAY HOLDINGS, INC.
ORC CARIBE
THE ▇▇▇▇▇▇▇ COMPANY
By: /s/ IAN ▇. ▇. ▇▇▇▇▇▇
----------------------------------
Name: Ian ▇. ▇. ▇▇▇▇▇▇
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Title: Executive Vice President of
Finance and Administration
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Signature Page 2
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