Exhibit 10.1

WAIVER AND FOURTH AMENDMENT

TO REVOLVING CREDIT AGREEMENT

 

This Waiver and Fourth Amendment, dated as of February 9, 2007 (this “Waiver and
Amendment”), is executed and delivered by D 56, INC., a Minnesota corporation
(“D 56”), LENOX RETAIL, INC., a Minnesota corporation (“Lenox Retail”), LENOX,
INCORPORATED, a New Jersey corporation (“Lenox” and, together with D 56 and
Lenox Retail, “Borrowers” and each individually, a “Borrower”), the Revolving
Lenders party hereto and UBS AG, Stamford Branch, as administrative agent (in
such capacity, the “Administrative Agent”).

 

RECITALS

WHEREAS, Borrowers, the financial institutions party thereto as lenders (the
“Revolving Lenders”) and the Administrative Agent are parties to that certain
Revolving Credit Agreement, dated as of September 1, 2005, as amended by that
certain First Amendment thereto, dated as of December 29, 2005, by that certain
Second Amendment thereto, dated as of January 23, 2006, and by that certain
Third Amendment thereto, dated as of April 27, 2006 (as such agreement may be
further amended, modified or supplemented from time to time, the “Credit
Agreement”);

WHEREAS, Borrowers have informed Administrative Agent and Revolving Lenders that
the following Events of Default (the “Specified Events of Default”) have
occurred and are continuing: (i) failure to achieve the maximum Leverage Ratio
pursuant to Section 6.08(a) of the Credit Agreement for the Test Period ended
December 31, 2006 and (ii) failure to achieve the minimum Interest Coverage
Ratio pursuant to Section 6.08(b) of the Credit Agreement for the Test Period
ended December 31, 2006;

WHEREAS, Administrative Agent and Revolving Lenders are willing to waive the
Specified Events of Default as and to the extent set forth in this Waiver and
Amendment and subject to the terms and conditions set forth herein;

WHEREAS, this document shall constitute a Loan Document and these Recitals shall
be construed as part of this Waiver and Amendment;

NOW THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

1.             Definitions. Except to the extent otherwise specified herein,
capitalized terms used in this Waiver and Amendment shall have the same meanings
ascribed to them in the Credit Agreement.

2.             Limited Waiver. Administrative Agent and Revolving Lenders hereby
waive the Specified Events of Default solely for the time period ending on April
30, 2007 (the “Waiver Termination Date”). On the earlier of the Waiver
Termination Date or the occurrence of any other Event of Default under the
Credit Agreement, the foregoing waiver shall automatically

 

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terminate and the Specified Events of Default shall then be existing and
continuing Events of Default under the Credit Agreement entitling the
Administrative Agent and Revolving Loan Lenders to exercise all rights and
remedies with respect thereto as though such waiver had never been in effect.

3.

Amendments.

3.1.         Section 5.01(h) of the Credit Agreement is amended by deleting the
words “Not later than the first day of each fiscal year” and inserting in place
thereof, the following words at the beginning of such section: “With respect to
the fiscal year 2007, not later than March 15, 2007, and with respect to each
fiscal year thereafter, not later than 60 days after the first day of each such
fiscal year”.

3.2.         The following is inserted as a new Section 6.08(d) to the Credit
Agreement:

“(d) Minimum Borrowing Availability. Permit Borrowing Availability to be less
than $5,000,000 at any time.”

3.3.         The following amendments set forth in this Section 3.3 are made as
temporary amendments to the Credit Agreement solely until the Waiver Termination
Date. On the earlier of the Waiver Termination Date or the occurrence of any
Event of Default (other than the Specified Events of Default), the following
amendments shall automatically terminate and the respective covenant levels so
amended shall revert to the levels in effect under the Credit Agreement prior to
such amendments as though such amendments had never been in effect:

(a)          Section 6.08(a) of the Credit Agreement is amended by resetting the
Leverage Ratio covenant level for the Test Period of four fiscal quarters ending
March 31, 2007 to 5.40 to 1.0.

(b)          Section 6.08(b) of the Credit Agreement is amended by resetting the
Interest Coverage Ratio covenant level for the Test Period of four fiscal
quarters ending March 31, 2007 to 1.25 to 1.0.

4.            Borrowing Base Covenant. Beginning with the week commencing
February 12, 2007, and until otherwise agreed by the Administrative Agent,
Borrowers shall deliver a Borrowing Base Certificate to the Collateral Agent and
Administrative Agent within 3 Business Days after the end of each week as of the
last day of such week. Each such weekly Borrowing Base Certificate shall contain
updated information as to Eligible Accounts as of the last day of such week and
each such weekly Borrowing Base Certificate that is delivered with respect to
the last week of a month shall contain updated information as to Eligible
Inventory in form reasonably acceptable to the Administrative Agent. Failure to
deliver any such Borrowing Base Certificate within the time period provided
herein shall result in an immediate Event of Default.

 

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5.            Conditions Precedent to Effectiveness. The effectiveness of this
Waiver and Amendment is subject to the satisfaction of each of the following
conditions precedent in a manner acceptable to Administrative Agent:

5.1.         Administrative Agent’s receipt of counterparts of this Waiver and
Amendment, duly executed by Borrowers, each of the other Loan Parties, the
Administrative Agent and Required Lenders.

5.2.         Borrowers shall have paid to the Administrative Agent a
nonrefundable fee for the ratable account of those Revolving Lenders who consent
to this Waiver and Amendment, evidenced by their timely delivery to the
Administrative Agent of an executed counterpart signature page hereto, in an
amount equal to 7.5 basis points (i.e., 0.075%) of the aggregate Commitments of
such consenting Revolving Lenders.

5.3.         The required lenders under the Term Loan Agreement shall have
waived the events of defaults arising under the Term Loan Agreement as a result
of the Specified Events of Default.

5.4.         After giving effect to this Waiver and Amendment, no Default or
Event of Default shall have occurred and be continuing.

5.5.         Borrowers shall have delivered to the Administrative Agent a
completed Perfection Certificate Supplement, dated as of the date hereof.

6.

Reference to and Effect Upon the Credit Agreement and other Loan Documents.

6.1.        The Credit Agreement and each other Loan Document shall remain in
full force and effect and each is hereby ratified and confirmed by Borrowers and
each other Loan Party. Without limiting the foregoing, the Liens granted
pursuant to the Security Documents shall continue in full force and effect and
the guaranties of each of the Guarantors shall continue in full force and
effect.

6.2.        The effect of this Waiver and Amendment shall be limited precisely
as written and, except as expressly set forth herein, shall not be deemed to be
a consent to any waiver of any term or condition or to any amendment or
modification of any term or condition of the Credit Agreement or any other Loan
Document.

6.3.         Each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein” or any other word or words of similar import
shall mean and be a reference to the Credit Agreement as modified hereby, and
each reference in any other Loan Document to the Credit Agreement or any word or
words of similar import shall be and mean a reference to the Credit Agreement as
modified hereby.

7.            Counterparts. This Waiver and Amendment may be executed in any
number of counterparts, each of which when so executed shall be deemed an
original but all such counterparts shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this Waiver and
Amendment by telecopier or email transmission shall be

 

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as effective as delivery of a manually executed counterpart signature page to
this Waiver and Amendment.

8.            Costs and Expenses. As provided in Section 11.03 of the Credit
Agreement, Borrowers shall pay the fees, costs and expenses incurred by
Administrative Agent in connection with the preparation, execution and delivery
of this Waiver and Amendment (including, without limitation, reasonable
attorneys’ fees).

9.            Governing Law. This Waiver and Amendment shall be construed in
accordance with and governed by the law of the State of New York, without regard
to conflicts of law principles that would require the application of the laws of
another jurisdiction.

10.          Headings. Section headings in this Waiver and Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Waiver and Amendment for any other purpose.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the undersigned have executed and delivered this Agreement
as of the date first written above.

 

 

 

BORROWERS:

D 56, INC.

LENOX RETAIL, INC.

LENOX, INCORPORATED

 

 

 

 

By: 

/s/ Timothy J. Schugel

 

 

Name:

Timothy J. Schugel

 

 

Title:

Chief Operating and Financial Officer

 

 

 

 

 

GUARANTORS:

 

LENOX GROUP INC. (formerly Department 56, Inc.)

LENOX SALES, INC.

FL 56 INTERMEDIATE CORP.

 

 

 

 

By: 

/s/ Timothy J. Schugel

 

 

Name:

Timothy J. Schugel

 

 

Title:

Chief Operating and Financial Officer

 

 

 

LENOX/D 56 WAIVER AND FOURTH AMENDMENT (REVOLVING CREDIT AGREEMENT)

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UBS AG, STAMFORD BRANCH,
as Administrative Agent

 

 

 

 

By: 

/s/ Richard L. Tavrow

 

 

Name:

Richard L. Tavrow

 

 

Title:

Director

 

 

By: 

/s/ Irja R. Otsa

 

 

Name:

Irja R. Otsa

 

 

Title:

Associate Director

 

 

 

UBS LOAN FINANCE LLC,
as a Revolving Lender

 

 

 

 

By: 

/s/ Richard L. Tavrow

 

 

Name:

Richard L. Tavrow

 

 

Title:

Director

 

 

By: 

/s/ Irja R. Otsa

 

 

Name:

Irja R. Otsa

 

 

Title:

Associate Director

 

 

LENOX/D 56 WAIVER AND FOURTH AMENDMENT (REVOLVING CREDIT AGREEMENT)

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JPMORGAN CHASE BANK, N.A.,
as a Revolving Lender

 

 

 

 

By: 

/s/ Michael A. Hintz

 

 

Name:

Michael A. Hintz

 

 

Title:

Vice President

 

 

LENOX/D 56 WAIVER AND FOURTH AMENDMENT (REVOLVING CREDIT AGREEMENT)

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BANK OF AMERICA, N.A.,
as a Revolving Lender

 

 

 

 

By: 

/s/ Edmundo Kahn

 

 

Name:

Edmundo Kahn

 

 

Title:

Vice President

 

 

LENOX/D 56 WAIVER AND FOURTH AMENDMENT (REVOLVING CREDIT AGREEMENT)

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WELLS FARGO FOOTHILL, LLC,
as a Revolving Lender

 

 

 

 

By: 

/s/ Patrick McCormack

 

 

Name:

Patrick McCormack

 

 

Title:

Vice President

 

 

LENOX/D 56 WAIVER AND FOURTH AMENDMENT (REVOLVING CREDIT AGREEMENT)

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MERRILL LYNCH CAPITAL, a division of
Merrill Lynch Business Financial Services Inc.,
as a Revolving Lender

 

 

 

 

By: 

/s/ Phillip J. Salter

 

 

Name:

Phillip J. Salter

 

 

Title:

Vice President

 

 

LENOX/D 56 WAIVER AND FOURTH AMENDMENT (REVOLVING CREDIT AGREEMENT)

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U.S. BANK NATIONAL ASSOCIATION,
as a Revolving Lender

 

 

 

 

By: 

/s/ Christopher J. Schaaf

 

 

Name:

Christopher J. Schaaf

 

 

Title:

Vice President

 

 

LENOX/D 56 WAIVER AND FOURTH AMENDMENT (REVOLVING CREDIT AGREEMENT)

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RZB FINANCE LLC,
as a Revolving Lender

 

 

 

 

By: 

/s/ John A. Valiska

 

 

Name:

John A. Valiska

 

 

Title:

First Vice President

 

 

By: 

/s/ Dan Dobrjanskyj

 

 

Name:

Dan Dobrjanskyj

 

 

Title:

Vice President

 

 

 

LENOX/D 56 WAIVER AND FOURTH AMENDMENT (REVOLVING CREDIT AGREEMENT)

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