Exhibit 10.1
SIXTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT
THIS SIXTH AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this
"AGREEMENT")
is entered into to be effective as of
December 22, 2005, by and among HOME
INTERIORS & GIFTS, INC., a Texas
corporation ("BORROWER"), each lender party to
the Credit Agreement (collectively,
"LENDERS" and individually, a "LENDER"), and
JPMORGAN CHASE BANK, N.A. (formerly known
as JPMorgan Chase Bank), as
Administrative Agent (in such capacity,
"ADMINISTRATIVE AGENT").
R E C I T A L S
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A. Reference is hereby made to that certain Credit Agreement dated
as
of March 31, 2004, executed by Borrower,
Administrative Agent, and Lenders (as
amended, the "CREDIT AGREEMENT").
B. Capitalized terms used herein shall, unless otherwise
indicated,
have the respective meanings set forth in
the Credit Agreement.
C. Borrower and Lenders desire to waive and modify certain
provisions
contained in the Credit Agreement, subject
to the terms and conditions set forth
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt
and
sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
1. (a) WAIVER. Subject to compliance with CLAUSE (B) below,
Lenders
hereby waive during the period from and
including June 30, 2005 to but excluding
January 11, 2006 (the "WAIVER PERIOD"),
compliance by Borrower with the
Consolidated Leverage Ratio set forth in
SECTION 7.1(A) of the Credit Agreement
and the Consolidated Interest Coverage
Ratio set forth in SECTION 7.1(B) of the
Credit Agreement, in each case for the
period ending on each of June 30, 2005,
September 30, 2005, and December 31, 2005
(it being understood that such waiver
shall expire on January 11, 2006 such that
any Default or Event of Default that
would have occurred during the period from
and including June 30, 2005 to but
excluding January 11, 2006 (without giving
effect to any waiver by Lenders of
such Default or Event of Default) shall be
deemed to have occurred on January
11, 2006 and shall be continuing
thereafter).
(b) CONDITIONS OF WAIVER. During the Waiver Period, Borrower
shall, and shall cause its Subsidiaries, to
(A) conduct its business in the
ordinary course consistent with past
practice and (B) not (without the prior
written consent of the Required Lenders)
(i) enter into any acquisition, sale or
transfer of any asset by Borrower or any of
its Subsidiaries other than (A) for
consideration of less than $500,000 in any
one transaction or in the aggregate
consistent with past practice or (B) sales
and purchases of inventory and raw
materials in the ordinary course of
business consistent with past practice; (ii)
change any accounting methods or practices
(including any change in depreciation
or amortization policies or rates) unless
such change is required by GAAP; (iii)
effect any declaration, setting aside, or
payment of a dividend or other
distribution with respect to the shares of
Borrower, or any direct or indirect
redemption, purchase or other acquisition
by Borrower of any of its shares of
capital stock; (iv) enter into any material
agreement, not made in the ordinary
course of business, or any amendment or
termination (not made in the ordinary
course of business) of, or breach by
Borrower or any of its Subsidiaries under,
any material agreement to which Borrower or
any Subsidiary is a party or by
which it is bound, including any lease
related to the lease to any office or
other real estate, including by way of
extension (other than an extension of
only one (1) additional month) of the term
of any such lease expiring during the
term of this Waiver Period, but excluding
purchase orders and other agreements
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relating to sales and purchases of
inventory and raw materials in the ordinary
course of business consistent with past
practice; (v) enter into any agreement
with any officer, director or employee
other than any agreements or arrangements
entered into in the ordinary course of
business consistent with past practice
and Borrower's or the applicable
Subsidiary's existing employment policies with
any officer or employee in connection with
the hiring or termination of any such
officer or employee, including any
confidentiality, non-competition, assignment
of inventions, separation, or other similar
agreements, but excluding any
employment agreements with any such
officers or employees; (vi) make any
amendment or change to its organizational
documents; (vii) increase or make any
modification to the base compensation
payable or to become payable by Borrower
or any of its Subsidiaries to any of its
directors or officers (or equivalent
positions); or (viii) change the capital
structure of Borrower, including, but
not limited to, any reclassification,
combination, subdivision, share split,
reverse share split, reorganization,
recapitalization or other like change. In
addition, Borrower agrees that within one
(1) Business Day of the date of this
Agreement, the Required Lenders and their
affiliates shall have received from
Borrower no less than fifty percent (50%)
of the total the legal fees and
expenses of the Required Lenders and their
affiliates invoiced to Borrower as of
December 21, 2005, provided that Borrower
acknowledges that such fees and
expenses paid hereunder do not constitute
all of the fees and expenses of the
Required Lenders and their affiliates
incurred through the date hereof.
Borrower and the Loan Parties acknowledge that this CLAUSE (B)
is
intended solely to provide additional
restrictions on the Borrower and its
Subsidiaries and does not authorize or
permit any activities or actions by the
Borrower or any other Loan Party that would
otherwise be restricted by the
Credit Agreement or any other Loan
Document. Furthermore, it is acknowledged by
the Borrower and the other Loan Parties
that any breach of this CLAUSE (B) shall
result in an immediate expiration of the
Waiver Period, and that any Default or
Event of Default that would have occurred
during the Waiver Period (without
giving effect to any waiver by Lenders of
such Default or Event of Default)
shall be deemed to have occurred on the
date that Borrower fails to comply with
any of the provisions of this CLAUSE
(B).
2. AMENDMENTS TO THE CREDIT AGREEMENT.
(a) SECTION 1.1 of the Credit Agreement is hereby amended to delete
the
definition of "WAIVER Period" in its
entirety and replace such definition with
the following:
"Waiver Period": the period from and including September 29,
2005 to but excluding January 11, 2006.
(b) SECTION 7.10(E) of the Credit Agreement is hereby amended
by
inserting the words "and December 31, 2005"
immediately after the date
"September 30, 2005" in the proviso
thereto.
3. AMENDMENTS TO CREDIT AGREEMENT AND OTHER LOAN DOCUMENTS.
(A) All references in the Loan Documents to the Credit Agreement
shall
henceforth include references to the Credit
Agreement as modified and amended by
this Agreement, and as may, from time to
time, be further modified, amended,
restated, extended, renewed, and/or
increased.
(B) Any and all of the terms and provisions of the Loan Documents
are
hereby amended and modified wherever
necessary, even though not specifically
addressed herein, so as to conform to the
amendments and modifications set forth
herein.
4. REPRESENTATIONS. Each Loan Party that is a party hereto
represents
and warrants to Lenders that as of the date
of this Agreement: (a) this
Agreement has been duly authorized,
executed, and delivered by each such Loan
2
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Party; (b) no action of, or filing with,
any Governmental Authority is required
to authorize, or is otherwise required in
connection with, the execution,
delivery, and performance by each such Loan
Party of this Agreement; (c) the
Loan Documents, as amended by this
Agreement, are valid and binding upon each
Loan Party that is a party thereto and are
enforceable against each Loan Party
in accordance with their respective terms,
(except as enforceability may be
limited by applicable bankruptcy,
insolvency, reorganization, moratorium or
similar laws affecting the enforcement of
creditors' rights generally and
general principles of equity (whether
enforcement is sought by proceedings in
equity or law)); (d) the execution,
delivery, and performance by each Loan Party
that is a party hereto of this Agreement do
not require the consent of any other
Person and do not and will not constitute a
violation of any Laws, order of any
Governmental Authority, or material
agreements to which any such Loan Party that
is a party or by which any such Loan Party
is bound; (e) all representations and
warranties in the Loan Documents are true
and correct in all material respects
on and as of the date of this Agreement
(after giving effect hereto), except to
the extent that (i) any of them speak to a
different specific date, or (ii) the
facts on which any of them were based have
been changed by transactions
contemplated or permitted by the Credit
Agreement; and (f) after giving effect
to this Agreement, no Default or Event of
Default exists.
5. CONDITIONS. This Agreement shall not be effective unless and
until
this Agreement is executed by the Borrower
and the Required Lenders and the
Ratification attached hereto and made a
part of this Agreement is executed by
each other Loan Party.
6. CONTINUED EFFECT. Except to the extent amended or waived hereby,
all
terms, provisions, and conditions of the
Credit Agreement and the other Loan
Documents, and all documents executed in
connection therewith, shall continue in
full force and effect and shall remain
enforceable and binding in accordance
with their respective terms. Borrower
acknowledges and agrees that nothing in
this Agreement shall, except as expressly
provided herein, operate as a waiver
of any right, power or remedy of any Lender
or Administrative Agent under any of
the Loan Documents or constitute an
indication of the Lenders' willingness to
consent to any other amendment or waiver of
any other provision of the Credit
Agreement or a waiver of compliance with
any such provision not referenced in
SECTION 1(A) of this Agreement or for any
other time period.
7. MISCELLANEOUS. Unless stated otherwise (a) the singular
number
includes the plural and vice versa and
words of any gender include each other
gender, in each case, as appropriate, (b)
headings and captions may not be
construed in interpreting provisions, (c)
this Agreement shall be construed --
and its performance enforced -- under New
York law, (d) if any part of this
Agreement is for any reason found to be
unenforceable, all other portions of it
nevertheless remain enforceable, (e) this
Agreement may be executed in any
number of counterparts with the same effect
as if all signatories had signed the
same document, and all of those
counterparts must be construed together to
constitute the same document, and (f) d
