EXHIBIT 10.2
EXECUTION COPY
SECOND AMENDMENT, dated as of September 30, 1997 (this "Amendment"),
to the CREDIT AND GUARANTEE AGREEMENT, dated as of August 14, 1996 (as amended
pursuant to the First Amendment thereto, dated as of June 19, 1997 and as the
same may be further amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among DAL-TILE INTERNATIONAL INC., a Delaware
corporation ("Holdings"), DAL-TILE GROUP INC., a Delaware corporation (the
"Borrower"), the several banks and other financial institutions from time to
time parties thereto (collectively, the "Lenders"), CREDIT SUISSE, as
documentation agent (in such capacity, the "Documentation Agent"), GOLDMAN SACHS
CREDIT PARTNERS L.P. as syndication agent (in such capacity, the "Syndication
Agent") and THE CHASE MANHATTAN BANK ("Chase"), a New York banking corporation,
as administrative agent for the Lenders (in such capacity, the "Administrative
Agent").
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower has requested that the Lenders amend the Credit
Agreement in the manner provided for herein; and
WHEREAS, the Lenders are willing to amend the Credit Agreement in the
manner and on the terms and conditions provided for herein;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. DEFINITIONS AND SECTION REFERENCES
1.1 Defined Terms. Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein are so used as so defined.
1.2 Section References. Unless otherwise indicated, all Section and
subsection references are to the Credit Agreement.
SECTION 2. AMENDMENTS TO CREDIT AGREEMENT
2.1 Amendment to Subsection 1.1. Subsection 1.1 of the Credit
Agreement is hereby amended as follows:
(a) by amending and restating in their entireties the following
definitions contained in such subsection to read as follows:
"Consolidated Net Income": for any period, the net income of
Holdings (or, if the Merger is consummated, the Borrower) and its
Subsidiaries for such period as determined on a consolidated basis in
accordance with GAAP, but excluding from the determination thereof
(without duplication) (a) any extraordinary or non-recurring gains or
losses (including, without limitation, (i) the one-time charge taken
in the second fiscal quarter of the fiscal year ending December 31,
1997 to reflect, among other things, the write-down in valuation of
inventory and accounts receivable, provided that the amount excluded
in respect of such charge shall not exceed $25,000,000 and (ii)
charges taken in the third and fourth fiscal quarters of the fiscal
year ending December 31, 1997 to reflect, among other things, the
write-down in valuation of inventory and accounts receivable and other
write-downs and restructuring costs, provided that (A) the maximum
amount excluded pursuant to this clause (a)(ii) in respect of the cash
portion
2
of such charges shall not exceed $8,000,000 in the aggregate, (B) the
cash portion of such charges shall be paid prior to December 31, 1998
(it being understood and agreed that the cash portion of any such
charges which are not paid by December 31, 1998 shall not be excluded
pursuant to this clause (a)(ii)) and (C) the aggregate amount excluded
pursuant to this clause (a)(ii) shall in no event exceed $75,000,000),
(b) gains or losses from the proposed or actual disposition of
material assets, (c) goodwill write-downs and restructuring charges
(but deducting from the determination of Consolidated Net Income for
any period, cash payments made during such period in respect of any
goodwill write-downs or restructuring charges recorded after the
Closing Date) and (d) non-cash charges resulting from the vesting or
exercise of stock options or stock appreciation rights granted to
management of the Borrower.
"Consolidated Net Worth": at any date of determination, all
items which would, in accordance with GAAP, be included under
shareholders' equity on a consolidated balance sheet of Holdings (or,
if the Merger is consummated, the Borrower) and its Subsidiaries at
such date of determination, but excluding from the determination
thereof the effect of (a) any foreign currency translation
adjustments, (b) charges taken in the third and fourth fiscal quarters
of the fiscal year ending December 31, 1997 to reflect, among other
things, the write-down in valuation of inventory and accounts
receivable and other write-downs and restructuring costs, provided
that (i) the maximum amount excluded pursuant to this clause (b) in
respect of the cash portion of such charges shall not exceed
$8,000,000 in the aggregate, (ii) the cash portion of such charges
shall be paid prior to December 31, 1998 (it being understood and
agreed that the cash portion of any such charges which are not paid by
December 31, 1998 shall not be excluded pursuant to this clause (b))
and (iii) the aggregate amount excluded pursuant to this clause (b)
shall in no event exceed $75,000,000, and (c) any non-cash charges
resulting from the vesting or exercise of stock options or stock
appreciation rights granted to management of the Borrower.
"Leverage Ratio Level": as to the Borrower, the existence of
Leverage Ratio Level IC, Leverage Ratio Level IB, Leverage Ratio Level
IA, Leverage Ratio Level I, Leverage Ratio Level II, Leverage Ratio
Level III, Leverage Ratio Level IV, Leverage Ratio Level V or Leverage
Ratio Level VI, as the case may be.
"Leverage Ratio Level IA": as to the Borrower, shall exist on an
Adjustment Date if the Consolidated Leverage Ratio for the period of
four consecutive fiscal quarters ending on the last day of the period
covered by the financial statements relating to such Adjustment Date
is less than 5.00 to 1.00 but greater than or equal to 4.25 to 1.00.
(b) by adding the following new definitions in the proper
alphabetical order:
"Leverage Ratio Level IB": as to the Borrower, shall exist on an
Adjustment Date if the Consolidated Leverage Ratio for the period of
four consecutive fiscal quarters ending on the last day of the period
covered by the financial statements relating to such Adjustment Date
is less than 6.00 to 1.00 but greater than or equal to 5.00 to 1.00,
provided that, after the consummation of the Subordinated Debt
Offering, "Leverage Ratio Level IB" shall exist on an Adjustment Date
thereafter if the Consolidated Leverage Ratio for the period of four
consecutive fiscal quarters ending on the last day of the period
covered by the financial statements relating to such Adjustment Date
is greater than or equal to 5.00 to 1.00.
"Leverage Ratio Level IC": as to the Borrower, shall exist on an
Adjustment Date if the Consolidated Leverage Ratio for the period of
four consecutive fiscal quarters ending on the last day of the period
covered by the financial statements relating to such Adjustment Date
is greater than or equal to 6.00 to 1.00, provided that, after the
consummation of the Subordinated Debt Offering, "Leverage Ratio Level
IC" shall not exist on any Adjustment Date thereafter.
3
"Subordinated Debt": any unsecured Indebtedness of the Borrower:
no part of the principal of which is required to be paid (whether by
way of mandatory sinking fund, mandatory redemption, mandatory
prepayment or otherwise) prior to June 30, 2004; the payment of the
principal of and interest on which and other obligations of the
Borrower in respect thereof are subordinated to the prior payment in
full of the principal of and interest (including post-filing or post-
petition interest, whether or not a claim for post-filing or post-
petition interest is allowed in any bankruptcy, insolvency,
reorganization or like proceeding) on the Loans and all other
obligations and liabilities of the Borrower to the Administrative
Agent and the Lenders hereunder on terms and conditions satisfactory
to the Required Lenders; and all other terms and conditions of which
are reasonably satisfactory in form and substance to the Required
Lenders.
"Subordinated Debt Offering": the issuance or incurrence by the
Borrower of at least $125,000,000 in principal amount of Subordinated
Debt.
(c) by adding the following proviso at the end of the definition of
"Adjustment Date" contained in such subsection:
", provided that (a) September 30, 1997 shall also be an Adjustment
Date and (b) if the Applicable Margin shall be based upon Leverage
Ratio Level IC on the date the Subordinated Debt Offering is
consummated, the first Business Day following the consummation of such
Subordinated Debt Offering shall also be an Adjustment Date solely for
purposes of changing the Leverage Ratio Level then in effect to
Leverage Ratio Level IB".
(d) by adding the following proviso at the end of the definition of
"Consolidated EBITDA" contained in such subsection:
"provided further that, for purposes of determining whether Leverage
Ratio Level IB or Leverage Ratio Level IC exists on any Adjustment
Date, Consolidated EBITDA shall be equal to the greater of (x)
Consolidated EBITDA for the period of four consecutive fiscal quarters
ending on the last day of the period covered by the financial
statements relating to such Adjustment Date and (y) the product of (i)
Consolidated EBITDA for the most recent fiscal quarter of such period
times (ii) 4."
(e) by adding the following clause at the end of the definition of
"Net Proceeds" contained in such subsection:
"and (d) with respect to any Subordinated Debt, the cash proceeds
(including Cash Equivalents) received by the Borrower or any of its
Subsidiaries from the issuance or incurrence of such Subordinated Debt
net of all investment banking fees, legal fees, accountants fees,
underwriting discounts and commissions and other customary fees and
expenses, actually incurred by the Borrower or any of its Subsidiaries
and documented in connection therewith".
2.2 Amendment to Subsection 3.3. Subsection 3.3 of the Credit
Agreement is hereby amended by deleting (a) the reference to "Annex A" therein
-------
and substituting in lieu thereof a reference to "Annex A-1" and (b) the
---------
reference to "0.375%" and substituting in lieu thereof a reference to "0.50%".
2.3 Amendment to Subsection 4.1(b). Subsection 4.1 of the Credit
Agreement is hereby amended by deleting the last sentence of paragraph (b) of
such subsection in its entirety and substituting in lieu thereof the following
new sentences:
"Unless the Required Lenders otherwise agree, the Term Loans and Tranche B
Term Loans shall be prepaid and the Revolving Credit Commitments shall be
permanently reduced (and, in connection with any such reduction, the Swing
Line Loans and Revolving Credit Loans shall be prepaid and/or the
4
Letters of Credit shall be cash collateralized as provided in subsection
4.1(c)) as set forth in subsection 4.1(c) in an amount equal to 100% of the
Net Proceeds of any Subordinated Debt issued or incurred by the Borrower.
Except as otherwise provided in this subsection 4.1(b), each prepayment
required pursuant to this subsection 4.1(b) shall be made, and each
reduction of Revolving Credit Commitments pursuant to this subsection shall
be effective, on the third Business Day following receipt of the Net
Proceeds from the relevant Asset Sale or Casualty Event or the issuance or
incurrence of the relevant Subordinated Debt."
2.4 Amendment to Subsection 7.1. Subsection 7.1 of the Credit
Agreement is hereby amended by adding a new sentence at the end of such
subsection to read in its entirety as follows:
"All such financial statements shall be accompanied by a report of a
Responsible Officer of the Borrower setting forth in reasonable detail the
progress of the Borrower in its restructuring efforts undertaken during the
fiscal year ending December 31, 1997 and setting forth information as to
the aggregate amount of accounts receivable and inventory at the end of the
relevant period and any write-downs in the valuation of accounts receivable
and inventory taken during such period."
2.5 Amendment to Subsection 8.1(c). Subsection 8.1 of the Credit
Agreement is hereby amended by deleting paragraph (c) of such subsection in its
entirety and substituting in lieu thereof the following new paragraph:
"(c) Maintenance of Consolidated Adjusted Interest Coverage Ratio.
Permit for any period of four consecutive fiscal quarters ending on the
last day of any fiscal quarter set forth below the Consolidated Adjusted
Interest Coverage Ratio for such period to be less than the ratio set forth
opposite such fiscal quarter below (it being understood that this covenant
shall not be applicable to the third and fourth fiscal quarters of the
fiscal year ending December 31, 1997):
Fiscal Quarter Interest Coverage Ratio
-------------- -----------------------
1st Fiscal Quarter of 1998 Fiscal Year 0.20 to 1
2nd Fiscal Quarter of 1998 Fiscal Year 0.50 to 1
3rd Fiscal Quarter of 1998 Fiscal Year 1.00 to 1
4th Fiscal Quarter of 1998 Fiscal Year
and 1st Fiscal Quarter of 1999 Fiscal Year 1.50 to 1
2nd and 3rd Fiscal Quarters of 1999 Fiscal Year 1.75 to 1
4th Fiscal Quarter of 1999 Fiscal Year and 1st, 2nd
and 3rd Fiscal Quarters of 2000 Fiscal Year 2.25 to 1
4th Fiscal Quarter of 2000 Fiscal Year and 1st, 2nd
and 3rd Fiscal Quarters of 2001 Fiscal Year 2.50 to 1
All Fiscal Quarters thereafter 3.00 to 1"
2.6 Amendment to Subsection 8.1(d). Subsection 8.1 of the Credit
Agreement is hereby amended by deleting paragraph (d) of such subsection in its
entirety and substituting in lieu thereof the following new paragraph:
5
"(d) Maintenance of Consolidated Leverage Ratio. Permit at the end
of any fiscal quarter set forth below the Consolidated Leverage Ratio for
such fiscal quarter to be greater than the ratio set forth opposite such
fiscal quarter below:
Fiscal Quarter Leverage Ratio
-------------- --------------
3rd Fiscal Quarter of 1997 Fiscal Year 7.50 to 1
4th Fiscal Quarter of 1997 Fiscal Year 13.00 to 1
1st Fiscal Quarter of 1998 Fiscal Year 13.00 to 1
2nd Fiscal Quarter of 1998 Fiscal Year 12.00 to 1
3rd Fiscal Quarter of 1998 Fiscal Year 8.00 to 1
4th Fiscal Quarter of 1998 Fiscal Year 7.50 to 1
1st Fiscal Quarter of 1999 Fiscal Year 6.00 to 1
2nd and 3rd Fiscal Quarters of 1999 Fiscal Year 4.25 to 1
4th Fiscal Quarter of 1999 Fiscal Year and 1st, 2nd
and 3rd Fiscal Quarters of 2000 Fiscal Year 4.00 to 1
4th Fiscal Quarter of 2000 Fiscal Year and 1st, 2nd
and 3rd Fiscal Quarters of 2001 Fiscal Year 3.75 to 1
4th Fiscal Quarter of 2001 Fiscal Year and 1st, 2nd
and 3rd Fiscal Quarters of 2002 Fiscal Year 3.25 to 1
All Fiscal Quarters thereafter 3.00 to 1"
2.7 Addition of New Subsection 8.1(e). Subsection 8.1 of the Credit
Agreement is hereby amended by inserting after paragraph (d) of such subsection
a new paragraph (e) to read in its entirety as follows:
"(e) Maintenance of Consolidated EBITDA. Permit at the end of any
fiscal quarter set forth below Consolidated EBITDA for the period of four
consecutive fiscal quarters ended at the end of such fiscal quarter to be
less than the amount set forth opposite such fiscal quarter below:
6
Fiscal Quarter Amount
-------------- ------
3rd Fiscal Quarter of 1997 Fiscal Year $ 80,000,000
4th Fiscal Quarter of 1997 Fiscal Year 43,000,000
1st Fiscal Quarter of 1998 Fiscal Year 43,000,000
2nd Fiscal Quarter of 1998 Fiscal Year 49,000,000
3rd Fiscal Quarter of 1998 Fiscal Year 70,000,000
4th Fiscal Quarter of 1998 Fiscal Year 90,000,000
1st, 2nd, 3rd and 4th Fiscal Quarters of 1999 Fiscal Year 100,000,000
All Fiscal Quarters thereafter 110,000,000"
2.8 Amendment to Subsection 8.2. Subsection 8.2 of the Credit
Agreement is hereby amended by (a) deleting the word "and" at the end of
paragraph (i) thereof, (b) by redesignating paragraph (j) thereof as paragraph
(k) and (c) by adding a new paragraph after paragraph (i) to read in its
entirety as follows:
"(j) Subordinated Debt, provided that 100% of the Net Proceeds of any
such Subordinated Debt are applied to prepay Loans (and/or cash
collateralize Letter of Credit) and the Revolving Credit Commitments are
reduced, in each case to the extent required by subsection 4.1(b); and"
2.9 Amendment to Subsection 8.9. Subsection 8.9 of the Credit
Agreement is hereby amended by deleting such subsection in its entirety and
substituting in lieu thereof the following new subsection:
"8.9 Limitation on Capital Expenditures. Make or commit to make
Capital Expenditures in the aggregate for the Borrower and its Subsidiaries
during any of the fiscal years of the Borrower set forth below, in excess
of the amount set forth opposite such fiscal year below:
Fiscal Year Ending Amount
------------------ -------------
12/31/96 $42,000,000
12/31/97 50,000,000
12/31/98 25,000,000
12/31/99 30,000,000
12/31/00 35,000,000
12/31/01 40,000,000
12/31/02 45,000,000
provided, that, if the Consolidated Adjusted Interest Coverage Ratio for
any period of four consecutive fiscal quarters exceeds 5.00 to 1.00, this
covenant shall cease to be of any further force and effect."
2.10 Amendment to Section 8. Section 8 of the Credit Agreement is hereby
amended by adding a new subsection at the end thereof to read in its entirety as
follows:
"8.17 Limitation on Optional Payments and Modifications of Debt
Instruments. (a) Make any optional payment or prepayment on or redemption
or purchase of any Subordinated Debt, (b) amend, modify or change, or
consent or agree to any amendment, modification or change to any of the
terms of any Subordinated Debt (other than any such amendment, modification
or change which would extend the maturity or reduce the amount of any
payment of principal thereof or which would reduce the rate
7
or extend the date for payment of interest thereon or which would make the
covenants applicable thereto less restrictive on the Borrower and its
Subsidiaries), or (c) amend the subordination provisions of the
Subordinated Debt."
2.11 Amendment to Annexes to the Credit Agreement. Annex A-1, Annex A-2
--------- ---------
and Annex A-3 to the Credit Agreement are hereby amended by replacing each such
---------
Annex in its entirety with Annex A-1, Annex A-2 and Annex A-3 to this Amendment,
--------- --------- ---------
respectively.
2.12 Title Insurance, Surveys and other Real Property Matters. The
Borrower shall complete the delivery of the items required to be delivered
pursuant to subsection 3.4 of the First Amendment on or prior to October 31,
1997.
SECTION 3. MISCELLANEOUS
3.1 Representations and Warranties. On and as of the date hereof,
Holdings and the Borrower hereby confirm, reaffirm and restate the
representations and warranties set forth in Section 5 of the Credit Agreement
mutatis mutandis (after giving effect to any amendments thereto pursuant to this
Amendment), except to the extent that such representations and warranties
expressly relate to a specific earlier date in which case Holdings and the
Borrower hereby confirm, reaffirm and restate such representations and
warranties as of such earlier date.
3.2 Effectiveness. This Amendment shall become effective as of the date
upon which the conditions set forth below shall first be satisfied (the
"Effective Date"):
(a) Amendment. The Administrative Agent shall have received this
Amendment, executed and delivered by a duly authorized officer of Holdings,
the Borrower and the Required Lenders with a counterpart for the
Administrative Agent and a counterpart or a conformed copy for each Lender.
(b) Amendment Fee. The Administrative Agent shall have received for
each Lender which executes this Amendment on or prior to October 10, 1997,
an amendment fee in an amount equal to 1/8% of the sum of (a) such Lender's
Revolving Credit Commitment and (b) the aggregate principal amount of the
then outstanding Term Loans of such Lender.
(c) Representations and Warranties. Each of the representations and
warranties made by the Borrower and the other Loan Parties in or pursuant
to the Loan Documents shall be true and correct in all material respects on
and as of the Effective Date, except to the extent such representations and
warranties expressly relate to an earlier date in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date.
(d) No Default. No Default or Event of Default shall have occurred and
be continuing on the Effective Date.
3.3 Continuing Effect; No Other Amendments. Except as expressly amended
hereby, all of the terms and provisions of the Credit Agreement are and shall
remain in full force and effect. The amendments provided for herein are limited
to the specific subsections of the Credit Agreement specified herein and shall
not constitute an amendment of, or an indication of the Administrative Agent's
or the Lenders' willingness to amend, any other provisions of the Credit
Agreement or the same subsection for any other date or time period (whether or
not such other provisions or compliance with such subsections for another date
or time period are affected by the circumstances addressed in this Amendment).
3.4 Expenses. The Borrower agrees to pay and reimburse the
Administrative Agent for all reasonable costs and out-of-pocket expenses
incurred by the Administrative Agent in connection with the
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preparation and delivery of this Amendment, including, without limitation, the
reasonable fees and disbursements of counsel to the Administrative Agent.
3.5 Counterparts. This Amendment may be executed in any number of
counterparts by the parties hereto (including by facsimile transmission), each
of which counterparts when so executed shall be an original, but all the
counterparts shall together constitute one and the same instrument.
3.6 GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
DAL-TILE INTERNATIONAL INC.
By: /s/ RICHARD SEWELL
---------------------------------
Name: RICHARD SEWELL
Title: VICE PRESIDENT-FINANCE
DAL-TILE GROUP INC.
By: /s/ RICHARD SEWELL
---------------------------------
Name: RICHARD SEWELL
Title: VICE PRESIDENT-FINANCE
THE CHASE MANHATTAN BANK, as Administrative Agent
and as a Lender
By: /s/ WILLIAM J. CAGGIANO
---------------------------------
Name: WILLIAM J. CAGGIANO
Title: MANAGING DIRECTOR
TEXAS COMMERCE BANK NATIONAL ASSOCIATION
By: /s/
---------------------------------
Title: VICE PRESIDENT
CREDIT SUISSE FIRST BOSTON
(formerly CREDIT SUISSE)
By:
---------------------------------
Title:
By: /s/ CHRIS T. HORGAN
---------------------------------
Title: VICE PRESIDENT
GOLDMAN SACHS CREDIT PARTNERS L.P.
By: /s/ STEPHEN B. KING
---------------------------------
Title: AUTHORIZED SIGNATORY
ALLIED IRISH BANKS, P.L.C., CAYMAN ISLANDS
BRANCH
By: /s/ MARCIA MEEKER
---------------------------------
Title: VICE PRESIDENT
By: /s/
---------------------------------
Title:
BANKBOSTON, N.A.
By: /s/
---------------------------------
Title: VICE PRESIDENT
THE BANK OF NEW YORK
By: /s/
---------------------------------
Title: VICE PRESIDENT
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. ASHBY
---------------------------------
Title: SENIOR MANAGER LOAN OPERATIONS
CIBC, INC.
By: TIMOTHY E. DOYLE
---------------------------------
Title: MANAGING DIRECTOR, CIBC WOOD GUNDY
SECURITIES CORP., AS AGENT
CREDIT LYONNAIS NEW YORK BRANCH
By:
---------------------------------
Title:
CRESTAR BANK
By: /s/
---------------------------------
Title: VICE PRESIDENT
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ JENNY GILPIN
---------------------------------
Title: Authorized Agent
FIRST UNION NATIONAL BANK OF NORTH CAROLINA
By: /s/
---------------------------------
Title: S.V.P AND MANAGING DIRECTOR
FLEET BANK, N.A.
By: /s/
---------------------------------
Title: MANAGING DIRECTOR
THE FUJI BANK, LIMITED, HOUSTON AGENCY
By: PHILIP C. LAUINGER III
---------------------------------
Title: VICE PRESIDENT & MANAGER
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By:
---------------------------------
Title:
NATIONSBANK OF TEXAS, N.A.
By: /s/ SUNANNE B. SMITH
---------------------------------
Title: VICE PRESIDENT
PNC BANK, NATIONAL ASSOCIATION
By:
---------------------------------
Title: VICE PRESIDENT
SOCIETE GENERALE, SOUTHWEST AGENCY
By: /s/ RICHARD M. LEWIS
---------------------------------
Title: VICE PRESIDENT
MERRILL LYNCH SENIOR FLOATING RATE FUND, INC.
By: /s/ LYNN CALLICOTT BARANSKI
---------------------------------
Title: AUTHORIZED SIGNATORY
DEBT STRATEGIES FUND, INC.
By:/S/ LYNN CALLIOCOTT BARANSKI
---------------------------------
Title: AUTHORIZED SIGNATORY
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME
TRUST
By: /s/ JEFFREY W. MAILLET
---------------------------------
Title: SENIOR VICE PRESIDENT
& DIRECTOR
METROPOLITAN LIFE INSURANCE COMPANY
By: /s/
---------------------------------
Title: ASSISTANT VICE PRESIDENT
THE MITSUBISHI TRUST AND BANKING CORPORATION
By: /s/
---------------------------------
Title: FIRST VICE PRESIDENT
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By: /s/ PAUL P. MALECKI
---------------------------------
Title: VICE PRESIDENT
BANK LEUMI
By: /s/ GLORIA BEECHER
---------------------------------
Title: VICE PRESIDENT
KZH-SOLEIL CORPORATION
By: /s/
---------------------------------
Title:
CYPRESS TREE INVESTMENT PARTNERS I,
By: /s/
---------------------------------
Title:
KZH-SOLEIL CORPORATION
By: /s/
---------------------------------
Title:
CYPRESSTREE INVESTMENT PARTNERS I, LTD.
By: CYPRESSTREE INVESTMENT MANAGEMENT
COMPANY, INC., AS PORTFOLIO MANAGER
By: /s/
---------------------------------
Title: MANAGING DIRECTOR
CYPRESSTREE INVESTMENT MANAGEMENT
COMPANY, INC.,
As: ATTORNEY-IN-FACT AND ON BEHALF OF
ALLMERICA LIFE INSURANCE COMPANY
AS PORTFOLIO MANAGER
By: /s/
---------------------------------
Title: MANAGING DIRECTOR
BANKERS TRUST COMPANY
By: /s/ PATRICIA HOGAN
---------------------------------
Title: VICE PRESIDENT
CONSENT
The undersigned hereby acknowledges receipt of a copy of and consents to
the execution and delivery by Holdings and the Borrower of the Second Amendment
to which this Consent is attached (the "Amendment"). The undersigned further
confirms and agrees that, after giving effect to the Second Amendment, each Loan
Document to which it is a party shall continue in full force and effect in
accordance with its terms.
DAL-TILE CORPORATION
By /s/ RICHARD SEWELL
--------------------------
Name RICHARD SEWELL
-----------------------
Title VICE PRESIDENT-FINANCE
----------------------
Annex A-1
---------
Pricing Grid For Revolving Credit Loans and Term Loans
------------------------------------------------------
Eurodollar ABR
Leverage Ratio Level Applicable Margin Applicable Margin Commitment Fee
- - -------------------- ------------------ ----------------- ----------------
Leverage Ratio Level 1C 2.00% 1.00% 0.50%
Leverage Ratio Level 1B 1.75% 0.75% 0.50%
Leverage Ratio Level IA 1.50% 0.50% 0.375%
Leverage Ratio Level I 1.25% 0.25% 0.375%
Leverage Ratio Level II 1.00% 0% 0.30%
Leverage Ratio Level III .75% 0% 0.25%
Leverage Ratio Level IV .625% 0% 0.225%
Leverage Ratio Level V .50% 0% 0.20%
Leverage Ratio Level VI .375% 0% 0.175%
Annex A-2
---------
Pricing Grid For Tranche B Term Loans
-------------------------------------
Eurodollar ABR
Leverage Ratio Level Applicable Margin Applicable Margin
- - -------------------- ------------------ -----------------
Leverage Ratio Level 1C 2.50% 1.50%
Leverage Ratio Level 1B 2.25% 1.25%
Leverage Ratio Level IA 2.00% 1.00%
Leverage Ratio Level I - VI 1.75% 0.75%
Annex A-3
---------
Pricing Grid For Tranche B Term Loans
-------------------------------------
Eurodollar ABR
Leverage Ratio Level Applicable Margin Applicable Margin
- - -------------------- ------------------ -----------------
Leverage Ratio Level 1C 2.50% 1.50%
Leverage Ratio Level 1B 2.25% 1.25%
Leverage Ratio Level IA 2.00% 1.00%
Leverage Ratio Level I 1.75% 0.75%
Leverage Ratio Level II - VI 1.50% 0.50%