SECOND AMENDMENT
TO
REVOLVING CREDIT AGREEMENT
Second Amendment, dated as of April 5, 1996 to the Revolving
Credit Agreement, dated as of February 7, 1996, as amended (the "Credit
Agreement"), by and among BEST PRODUCTS CO., INC., a Virginia corporation
(the "Borrower"), the financial institutions from time to time party
thereto (collectively, the "Lenders" and individually, a "Lender"), the co-
agents from time to time party thereto (collectively, the "Co-Agents") and
THE CIT GROUP/BUSINESS CREDIT, INC. ("CIT"), as agent for the Lenders (in
such capacity, the "Agent").
The Borrower, the Lenders and the Agent desire to amend the
definitions of the terms "Borrowing Base" and "Covenant EBITDA" on the
terms and conditions hereinafter set forth. Accordingly, the Borrower, the
Agent and the Lenders hereby agree as follows:
1. Definitions. All capitalized terms used herein and not
otherwise defined herein are used herein as defined in the Credit
Agreement.
2. Existing Definitions. (a) Subclause (ii) of the definition
of the term "Borrowing Base" in Section 1.01 of the Credit Agreement is
hereby amended in its entirety to read as follows:
"(ii) the sum of (A) the Rent Reserve and (B) $20,000,000,
provided that the dollar amount of the reserve set forth in this
clause (ii)(B) shall be reduced to $10,000000 during the months
of September, October and November."
(b) Subclauses (C) and (D) of clause (ii) of the definition
of the term "Covenant EBITDA" in Section 1.01 of the Credit Agreement are
hereby amended in their entirety to read as follows:
"(C) cash outlays of the Borrower and its Consolidated
Subsidiaries relating to (1) store closings permitted by Section
8.04(b) hereof, and (2) the failure of the Borrower to open any
new store which the Borrower has committed or otherwise become
obligated to open and (D) charges or losses incurred by the
Borrower and its Consolidated Subsidiaries relating to (1) store
closings permitted by Section 8.04(b) hereof and (2) any
Inventory discontinued by the Borrower or classified by the
Borrower as "exit inventory", in each case resulting from the
sale, liquidation or other disposition of Inventory to the
extent, if any, that the Realization Rate from such sale,
liquidation or other disposition of such Inventory is less than
70%."
3. Mortgages
(a) Paragraph (a) of Section 7.15 of the Credit Agreement
is hereby amended by deleting the date "April 5, 1996" each time it appears
therein and substituting in lieu thereof "May 3, 1996."
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(b) Schedule 7.15 of the Credit Agreement is hereby amended
by deleting Initial Mortgaged Location #13 (Raw Land located at Chula
Vista, CA).
4. Conditions to Effectiveness. This Amendment shall become
effective only upon satisfaction in full of the following conditions
precedent (the first date upon which all such conditions have been
satisfied being herein called the "Amendment Effective Date"):
(a) The representations and warranties contained in this
Amendment and in Article VI of the Credit Agreement and each other Related
Document shall be correct in all material respects on and as of the
Amendment Effective Date as though made on and as of such date (except
where such representations and warranties relate to an earlier date in
which case such representations and warranties shall be true and correct as
of such earlier date); no Event of Default or Potential Default shall have
occurred and be continuing on the Amendment Effective Date or result from
this Amendment becoming effective in accordance with its terms.
(b) The Agent shall have received counterparts of this
Amendment which bear the signatures of the Borrower and the Majority
Lenders.
(c) All legal matters incident to this Amendment shall be
satisfactory to the Agent and its counsel.
5. Representations and Warranties. The Borrower represents and
warrants to the Lenders as follows:
(a) The Borrower (i) is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation and (ii) has all requisite corporate power, authority and
legal right to execute, deliver and perform this Amendment, and to perform
the Credit Agreement, as amended hereby.
(b) The execution, delivery and performance by the Borrower
of this Amendment and the performance by the Borrower of the Credit
Agreement as amended hereby (i) have been duly authorized by all necessary
corporate action, (ii) do not and will not violate or create a default
under the Borrower's charter or by-laws, any such applicable law or any
contractual restriction binding on or otherwise affecting the Borrower or
any of the Borrower's properties, and (iii) except as provided in the
Related Documents, do not and will not result in or require the creation of
any Lien upon or with respect to the Borrower's property.
(c) No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority or other regulatory
body is required in connection with the due execution, delivery and
performance by the Borrower of this Amendment and the performance by the
Borrower of the Credit Agreement, as amended hereby.
(d) This Amendment and the Credit Agreement, as amended
hereby, constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their terms.
(e) The representations and warranties contained in Article
VI of the Credit Agreement are correct on and as of the Amendment Effective
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Date as though made on and as of the Amendment Effective Date (except to
the extent such representations and warranties expressly relate to an
earlier date), and no Event of Default or Potential Default, has occurred
and is continuing on and as of the Amendment Effective Date.
6. Continued Effectiveness of Credit Agreement. The Borrower
hereby (i) confirms and agrees that each Related Document to which it is a
party is, and shall continue to be, in full force and effect and is hereby
ratified and confirmed in all respects except that on and after the
Amendment Effective Date all references in any such Related Document to
"the Credit Agreement", "thereto", "thereof", "thereunder" or words of like
import referring to the Credit Agreement shall mean the Credit Agreement as
amended by this Amendment, and (ii) confirms and agrees that to the extent
that any such Related Document purports to assign or pledge to the Agent,
or to grant to the Agent a Lien on any collateral as security for the
Obligations of the Borrower from time to time existing in respect of the
Credit Agreement and the Related Documents, such pledge, assignment and/or
grant of a Lien is hereby ratified and confirmed in all respects.
7. Miscellaneous.
a. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.
b. Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this
Amendment for any other purpose.
c. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
d. The Borrower will pay on demand all fees, costs and
expenses of the Agent in connection with the preparation, execution and
delivery of this Amendment, including, without limitation, the reasonable
fees, disbursements and other charges of Schulte Roth & Zabel, counsel to
the Agent.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized as of
the day and year first above written.
BEST PRODUCTS CO., INC.
/s/Frederick G. Kraegel
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Title: Senior Vice President and Chief
Financial Officer
AGENT AND LENDER
THE CIT GROUP/BUSINESS CREDIT, INC.
/s/Sam Cirelli
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Title: Vice President
CO-AGENTS AND LENDERS
BANKAMERICA BUSINESS CREDIT, INC.
/s/Lisa Palmiere
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Title: Senior Account Executive
GENERAL ELECTRIC CAPITAL CORPORATION
/s/Anne T. Troxell
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Title: Duly Authorized Signatory
THE FIRST NATIONAL BANK OF BOSTON
/s/Maureen H. Forrester
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Title: Vice President
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LENDERS
HELLER FINANCIAL, INC.
/s/Jeff Schumacher
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Title: Assistant Vice President
CONGRESS FINANCIAL CORPORATION
/s/Eric Miller
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Title: Assistant Vice President
SANWA BUSINESS CREDIT CORPORATION
/s/Peter Skazla
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Title: Vice President
FOOTHILL CAPITAL CORPORATION
/s/Bryan Hamm
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Title: Assistant Vice President
GENERAL ELECTRIC CAPITAL CORPORATION
/s/Anne T. Troxell
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Title: Duly Authorized Signatory
THE FIRST NATIONAL BANK OF BOSTON
/s/Maureen H. Forrester
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Title: Vice President
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TRANSAMERICA BUSINESS CREDIT CORPORATION
/s/Michael Burns
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Title: Vice President
FREMONT FINANCIAL CORPORATION
/s/Gregory C. Lacker
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Title: Vice President