CREDIT AGREEMENT
among
FURNITURE BRANDS INTERNATIONAL, INC.,
BROYHILL FURNITURE INDUSTRIES, INC.,
LANE FURNITURE INDUSTRIES, INC.,
THOMASVILLE FURNITURE INDUSTRIES, INC.,
VARIOUS BANKS,
CREDIT LYONNAIS CHICAGO BRANCH,
as DOCUMENTATION AGENT,
NATIONSBANK, N.A.,
as SYNDICATION AGENT,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
----------------------------------------
Dated as of November 17, 1994
and
Amended and Restated as of December 29, 1995
and further
Amended and Restated as of September 6, 1996
and further
Amended and Restated as of June 27, 1997
and further
Amended and Restated as of July 14, 1998
TABLE OF CONTENTS
Page
SECTION 1.Amount and Terms of Credit..........................................1
1.01 The Commitments..................................................1
1.02 Minimum Amount of Each Borrowing.................................4
1.03 Notice of Borrowing..............................................4
1.04 Disbursement of Funds............................................5
1.05 Notes............................................................5
1.06 Conversions......................................................6
1.07 Pro Rata Borrowings..............................................7
1.08 Interest.........................................................7
1.09 Interest Periods.................................................8
1.10 Increased Costs, Illegality, etc.................................9
1.11 Compensation....................................................11
1.12 Change of Lending Office........................................11
1.13 Replacement of Banks............................................12
SECTION 2.Letters of Credit..................................................13
2.01 Letters of Credit..............................................13
2.02 Minimum Stated Amount..........................................14
2.03 Letter of Credit Requests......................................14
2.04 Letter of Credit Participations................................15
2.05 Agreement to Repay Letter of Credit Drawings and
Acceptance Payments............................................17
2.06 Increased Costs................................................18
SECTION 3.Commitment Commission; Fees; Reductions of Commitment..............19
3.01 Fees 19
3.02 Voluntary Termination of Unutilized Commitments................20
3.03 Mandatory Reduction of Commitments.............................21
SECTION 4.Prepayments; Payments; Taxes.......................................21
4.01 Voluntary Prepayments..........................................21
4.02 Mandatory Repayments, Cash Collateralizations and
Commitment Reductions..........................................22
4.03 Method and Place of Payment....................................25
4.04 Net Payments...................................................25
SECTION 5.Conditions Precedent to the Fourth Restatement Effective
Date...............................................................27
5.01 Execution of Agreement; Notes..................................27
5.02 Fees, etc......................................................28
5.03 Opinions of Counsel............................................28
5.04 Corporate Documents; Proceedings; etc..........................28
5.05 Collective Bargaining Agreements; Permitted Debt
Agreements; Tax Sharing Agreements.............................28
5.06 Solvency; Environmental Analyses; Insurance Matters............29
5.07 Subsidiary Guaranty............................................29
5.08 Pledge Agreement...............................................29
5.09 Security Agreement.............................................29
5.10 Receivables Facility...........................................30
5.11 Consent Letter.................................................31
5.12 Adverse Change; Governmental Approvals; etc....................31
5.13 Litigation.....................................................32
5.14 Financial Statements; Pro Forma Financial Statements;
Projections....................................................32
5.15 Refinancing; Existing Credit Agreement; etc....................32
5.16 Officers Certificate...........................................32
5.17 Mortgage Amendments; etc.......................................32
SECTION 6.Conditions Precedent to All Credit Events..........................33
6.01 No Default; Representations and Warranties.....................33
6.02 Notice of Borrowing; Letter of Credit Request..................33
SECTION 7.Representations, Warranties and Agreements.........................33
7.01 Corporate Status...............................................34
7.02 Corporate Power and Authority..................................34
7.03 No Violation...................................................34
7.04 Governmental Approvals.........................................34
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections; etc......................35
7.06 Litigation.....................................................36
7.07 True and Complete Disclosure...................................36
7.08 Use of Proceeds; Margin Regulations............................37
7.09 Tax Returns and Payments.......................................37
7.10 Compliance with ERISA..........................................38
7.11 The Security Documents.........................................39
7.12 Representations and Warranties in Other Documents..............40
7.13 Properties.....................................................40
7.14 Capitalization.................................................40
7.16 Compliance with Statutes, etc..................................41
7.17 Investment Company Act.........................................41
7.18 Public Utility Holding Company Act.............................41
7.19 Environmental Matters..........................................41
7.20 Labor Relations................................................42
7.21 Patents, Licenses, Franchises and Formulas.....................42
7.22 Indebtedness...................................................42
7.23 Transaction....................................................43
7.24 Receivables Subsidiary.........................................43
SECTION 8.Affirmative Covenants..............................................43
8.01 Information Covenants..........................................43
8.02 Books, Records and Inspections.................................46
8.03 Maintenance of Property; Insurance.............................47
8.04 Corporate Franchises...........................................48
8.05 Compliance with Statutes, etc..................................48
8.06 Compliance with Environmental Laws.............................48
8.07 ERISA..........................................................49
8.08 End of Fiscal Years; Fiscal Quarters...........................50
8.09 Performance of Obligations.....................................50
8.10 Payment of Taxes...............................................50
8.11 Additional Security; Further Assurances; Required
Appraisals.....................................................51
8.12 Interest Rate Protection.......................................53
8.13 Ownership of Subsidiaries......................................53
8.14 Permitted Acquisitions.........................................53
8.15 Maintenance of Corporate Separateness..........................54
8.16 Cash Management System.........................................54
8.17 Margin Stock...................................................54
SECTION 9.Negative Covenants.................................................54
9.01 Liens..........................................................54
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.........57
9.03 Dividends......................................................59
9.04 Indebtedness...................................................59
9.05 Investments; etc...............................................60
9.06 Transactions with Affiliates and Unrestricted Subsidiaries.....62
9.07 Capital Expenditures...........................................63
9.08 Consolidated Net Interest Coverage Ratio.......................63
9.09 Maximum Leverage Ratio.........................................63
9.10 Limitation on Modifications of and Payments on
Indebtedness and Qualified Preferred Stock;
Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; Surviving
Guaranty Payments, etc.........................................64
9.11 Limitation on Creation or Acquisition of Subsidiaries
and Restricted Subsidiaries....................................65
9.12 Limitation on Issuance of Capital Stock.......................65
9.13 Business.......................................................66
9.14 Limitation on Certain Restrictions on
Subsidiaries..................................................66
SECTION 10.Events of Default.................................................66
10.01 Payments......................................................66
10.02 Representations, etc..........................................67
10.03 Covenants.....................................................67
10.04 Default Under Other Agreements................................67
10.05 Bankruptcy, etc...............................................67
10.06 ERISA.........................................................68
10.07 Security Documents............................................68
10.08 Subsidiary Guaranty...........................................68
10.09 Judgments.....................................................69
10.10 Change of Control.............................................69
10.11 Tax Sharing Agreement.........................................69
SECTION 11.Definitions and Accounting Terms..................................69
11.01 Defined Terms.................................................70
SECTION 12.The Agents.......................................................101
12.01 Appointment..................................................101
12.02 Nature of Duties.............................................101
12.03 Lack of Reliance on the Administrative Agent, the
Documentation Agent and the Syndication Agent................101
12.04 Certain Rights of the Administrative Agent, the
Documentation Agent and the Syndication Agent................102
12.05 Reliance.....................................................102
12.06 Indemnification..............................................102
12.07 The Administrative Agent, the Documentation Agent
and the Syndication Agent in its Individual Capacity
103................
12.08 Holders......................................................103
12.09 Resignation by the Agents....................................103
SECTION 13.Miscellaneous....................................................104
13.01 Payment of Expenses, etc.....................................104
13.02 Right of Setoff..............................................105
13.03 Notices......................................................105
13.04 Benefit of Agreement.........................................106
13.05 No Waiver; Remedies Cumulative...............................107
13.06 Payments Pro Rata............................................108
13.07 Calculations; Computations...................................108
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL.........................................109
13.09 Counterparts.................................................110
13.10 Effectiveness................................................110
13.11 Headings Descriptive.........................................110
13.12 Amendment or Waiver; etc.....................................110
13.13 Survival.....................................................112
13.14 Domicile of Loans............................................112
13.15 Limitation on Additional Amounts, etc........................112
13.16 Confidentiality..............................................113
13.17 Register.....................................................113
13.18 Addition of New Banks; etc...................................114
13.19 Post Closing Actions.........................................114
13.20 Release of Mortgages.........................................115
13.21 Judgment Currency............................................116
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Existing Mortgaged Properties
SCHEDULE IV Undisclosed Liabilities
SCHEDULE V Tax Matters
SCHEDULE VI Subsidiaries
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Insurance
SCHEDULE IX Existing Liens
SCHEDULE X Existing Investments
SCHEDULE XI Existing Transactions
SCHEDULE XII Existing Letters of Credit
SCHEDULE XIII Certain Restrictions on Subsidiaries
SCHEDULE XIV ERISA Matters
SCHEDULE XV Leases Guarantied Under Surviving Guaranties
SCHEDULE XVI Excluded Assets
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Term Note
EXHIBIT B-2 Revolving Note
EXHIBIT B-3 Swingline Note
EXHIBIT C-1 Letter of Credit Service Agreement
EXHIBIT C-2 Trade Letter of Credit Request
EXHIBIT C-3 Standby Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Opinion of General Counsel of Credit Parties
EXHIBIT F Officers' Certificate
EXHIBIT G Solvency Certificate
EXHIBIT H Fourth Amended and Restated Subsidiary Guaranty
EXHIBIT I Fourth Amended and Restated Pledge Agreement
EXHIBIT J Fourth Amended and Restated Security Agreement
EXHIBIT K Consent Letter
EXHIBIT L Assignment and Assumption Agreement
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1 Schedule prepared as at Fourth Amendment Effective Date.
CREDIT AGREEMENT, dated as of November 17, 1994, as amended and restated as
of December 29, 1995, as further amended and restated as of September 6, 1996,
as further amended and restated as of June 27, 1997, and as further amended and
restated as of July 14, 1998, among FURNITURE BRANDS INTERNATIONAL, INC., a
Delaware corporation ("Furniture Brands"), BROYHILL FURNITURE INDUSTRIES, INC.,
a North Carolina corporation ("Broyhill"), LANE FURNITURE INDUSTRIES, INC., a
Delaware corporation ("Lane"), THOMASVILLE FURNITURE INDUSTRIES, INC., a
Delaware corporation ("Thomasville" and together with Furniture Brands, Broyhill
and Lane, each a "Borrower," and, collectively, the "Borrowers"), the Banks
party hereto from time to time, CREDIT LYONNAIS CHICAGO BRANCH ("Credit
Lyonnais"), as Documentation Agent, NATIONSBANK, N.A. ("NationsBank"), as
Syndication Agent, and BANKERS TRUST COMPANY, as Administrative Agent (all
capitalized terms used herein and defined in Section 11 are used herein as
therein defined).
W I T N E S S E T H :
WHEREAS, the Borrowers, the Existing Banks, the Documentation Agent, the
Syndication Agent and the Administrative Agent are party to a Credit Agreement,
dated as of November 17, 1994, as amended and restated as of December 29, 1995,
as further amended and restated as of September 6, 1996 and as further amended
and restated as of June 27, 1997 (as in effect immediately prior to the Fourth
Restatement Effective Date, the "Existing Credit Agreement");
WHEREAS, the parties hereto wish to amend and restate the Existing Credit
Agreement in the form of this Agreement;
NOW, THEREFORE, the parties hereto agree that the Existing Credit Agreement
shall be and hereby is amended and restated in its entirety as follows:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and conditions set
forth in the Existing Credit Agreement, each Existing Bank with a Term Loan
Commitment pursuant to the Existing Credit Agreement severally agreed to make,
on the Third Restatement Effective Date, a term loan or term loans (each a "Term
Loan" and collectively the "Term Loans") to the Borrowers, which Term Loans (i)
are outstanding on the Fourth Restatement Effective Date in the principal
amounts for the various Banks as set forth opposite their names under the
heading "Outstanding Principal Amount of Term Loans" in Schedule I hereto, (ii)
shall, at the option of the Borrowers, be maintained as Base Rate Loans or
Eurodollar Loans (with any Interest Periods applicable thereto immediately
before the occurrence of the Fourth Restatement Effective Date to continue to be
applicable thereto until the expiration thereof), provided that except as
otherwise specifically provided in Section 1.10(b), all Term Loans comprising
the same Borrowing shall at all times be of the same Type and (iii) constitute
joint and several obligations of each of the Borrowers. The aggregate
outstanding principal amount of Term Loans of each Bank, as at the date provided
in Schedule I, is accurately set forth in Schedule I. The Term Loans of each
Bank outstanding immediately prior to the Fourth Restatement Effective Date
shall remain outstanding after giving effect to the occurrence of the Fourth
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Restatement Effective Date, and shall in no way be affected as a result of the
occurrence of the Fourth Restatement Effective Date. Once repaid, Term Loans
incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein, each
Bank severally agrees, at any time and from time to time on and after the Third
Restatement Effective Date and prior to the Revolving Loan Maturity Date, to
make a revolving loan or revolving loans (each, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrowers, which Revolving Loans (i)
shall, at the option of the Borrowers, be Base Rate Loans or Eurodollar Loans,
provided that except as otherwise specifically provided in Section 1.10(b), all
Revolving Loans comprising the same Borrowing shall at all times be of the same
Type, (ii) may be repaid and reborrowed in accordance with the provisions
hereof, (iii) shall not exceed for any Bank at any time outstanding that
aggregate principal amount which, when added to the product of (x) such Bank's
Adjusted Percentage and (y) the sum of (I) the aggregate amount of all Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Revolving Loan
Commitment of such Bank at such time, (iv) shall not exceed for all Banks at any
time outstanding that aggregate principal amount which, when added to (x) the
aggregate amount of all Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) at such time and
(y) the aggregate principal amount of all Swingline Loans (exclusive of
Swingline Loans which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Total Revolving Loan Commitment at such time, and (v)
shall be the joint and several obligations of each of the Borrowers. On and
immediately after the occurrence of the Fourth Restatement Effective Date, the
Revolving Loan Commitment for each Bank shall be the amount set forth opposite
such Bank's name in Schedule I hereto directly below the column entitled
"Revolving Loan Commitment" (as same may be (x) reduced from time to time
pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time to
time as a result of assignments to or from such Bank pursuant to Section 1.13 or
13.04(b)), such that the Total Revolving Loan Commitment (as of the Fourth
Restatement Effective Date) shall represent an increase of $125,000,000 over the
Total Revolving Loan Commitment as in effect immediately before the occurrence
of the Fourth Restatement Effective Date. In connection with such increase, on
the Fourth Restatement Effective Date the Borrowers shall repay in full all
Revolving Loans then outstanding (although Revolving Loans may be incurred
hereunder on the Fourth Restatement Effective Date in accordance with the
provisions hereof, so that the Banks participate in each Borrowing of
outstanding Revolving Loans pro rata on the basis of their Revolving Loan
Commitments (as in effect on the Fourth Restatement Effective Date) as provided
herein), it being understood and agreed that the Borrowers shall jointly and
severally pay all breakage or similar costs of the type described in Section
1.11 incurred by the Banks in connection with any repayment or reborrowing of
Revolving Loans.
(c) Subject to and upon the terms and conditions herein set forth, BTCo in
its individual capacity agrees to make at any time and from time to time on and
after the Third Restatement Effective Date and prior to the Swingline Expiry
Date, a revolving loan or revolving loans (each, a "Swingline Loan" and,
collectively, the "Swingline Loans") to the Borrowers, which Swingline Loans (i)
shall be made and maintained as Base Rate Loans, (ii) may be repaid and
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reborrowed in accordance with the provisions hereof, (iii) shall not exceed in
aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans made by Non-Defaulting Banks
then outstanding and the Letter of Credit Outstandings at such time, an amount
equal to the Adjusted Total Revolving Loan Commitment at such time (after giving
effect to any reductions to the Adjusted Total Revolving Loan Commitment on such
date), (iv) shall not exceed at any time outstanding the Maximum Swingline
Amount and (v) shall be the joint and several obligations of each of the
Borrowers.
(d) On any Business Day, BTCo may, in its sole discretion, give notice to
the Banks that its outstanding Swingline Loans shall be funded with a Borrowing
of Revolving Loans (provided that such notice shall be deemed to have been
automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day by all Banks with a
Revolving Loan Commitment (without giving effect to any reductions thereto
pursuant to the last paragraph of Section 10) pro rata based on each Bank's
Adjusted Percentage (determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section 10) and the
proceeds thereof shall be applied directly to BTCo to repay BTCo for such
outstanding Swingline Loans. Each such Bank hereby irrevocably agrees to make
Revolving Loans upon one Business Day's notice pursuant to each Mandatory
Borrowing in the amount and in the manner specified in the preceding sentence
and on the date specified in writing by BTCo notwithstanding that (i) the amount
of the Mandatory Borrowing may not comply with the minimum amount for Borrowings
otherwise required hereunder, (ii) whether any conditions specified in Section 6
are then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) the date of such Mandatory Borrowing and (v) the amount of the Total
Revolving Loan Commitment or the Adjusted Total Revolving Loan Commitment at
such time; provided that, in no event shall such Bank be required to make
Revolving Loans in excess of such Bank's Revolving Loan Commitment. In the event
that any Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code with respect to any of the Borrowers),
then each such Bank hereby agrees that it shall forthwith purchase (as of the
date the Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrowers on or after such date and prior to such
purchase) from BTCo such participations in the outstanding Swingline Loans as
shall be necessary to cause such Banks to share in such Swingline Loans ratably
based upon their respective Adjusted Percentages (determined before giving
effect to any termination of the Revolving Loan Commitments pursuant to the last
paragraph of Section 10), provided that (x) all interest payable on the
Swingline Loans shall be for the account of BTCo until the date as of which the
respective participation is required to be purchased and, to the extent
attributable to the purchased participation, shall be payable to the participant
from and after such date and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Bank shall be
required to pay BTCo interest on the principal amount of participation purchased
for each day from and including the day upon which the Mandatory Borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the overnight Federal Funds Rate for the first three days and
at the rate otherwise applicable to Revolving Loans maintained as Base Rate
Loans hereunder for each day thereafter.
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1.02 Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing under a Tranche shall be not less than the Minimum Borrowing
Amount for such Tranche and, if greater, shall be in the applicable integral
multiple set forth in the definition of Minimum Borrowing Amount, provided that
Mandatory Borrowings shall be made in the amounts required by Section 1.01(d).
More than one Borrowing may occur on the same date, but at no time shall there
be outstanding more than twelve Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrowers desire to incur Loans
under any Tranche (excluding Borrowings of Swingline Loans and Revolving Loans
incurred pursuant to Mandatory Borrowings), an Authorized Representative of the
Borrowers shall give the Administrative Agent at its Notice Office at least one
Business Day's prior written (or telephonic notice promptly confirmed in
writing) notice of each Base Rate Loan and at least three Business Days' prior
written (or telephonic notice promptly confirmed in writing) notice of each
Eurodollar Loan to be made hereunder, provided that any such notice shall be
deemed to have been given on a certain day only if given before 11:00 A.M. (New
York time) (or before 12:00 Noon (New York time) in the case of a Borrowing of
Base Rate Loans) on such day. Each such written notice or written confirmation
of telephonic notice (each a "Notice of Borrowing"), except as otherwise
expressly provided in Section 1.10, shall be irrevocable and shall be given by
the Borrowers in the form of Exhibit A, appropriately completed to specify the
aggregate principal amount of the Loans to be made pursuant to such Borrowing,
the date of such Borrowing (which shall be a Business Day) and whether the Loans
being made pursuant to such Borrowing are to be initially maintained as Base
Rate Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest
Period to be applicable thereto. The Administrative Agent shall promptly give
each Bank notice of such proposed Borrowing, of such Bank's proportionate share
thereof and of the other matters required by the immediately preceding sentence
to be specified in the Notice of Borrowing.
(b) (i) Whenever the Borrowers desire to make a Borrowing of Swingline
Loans hereunder, an Authorized Representative of the Borrowers shall give BTCo
not later than 12:00 Noon (New York time) on the date that a Swingline Loan is
to be made, written notice or telephonic notice promptly confirmed in writing of
each Swingline Loan to be made hereunder. Each such notice shall be irrevocable
and specify in each case (A) the date of Borrowing (which shall be a Business
Day) and (B) the aggregate principal amount of the Swingline Loans to be made
pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(d), with each Borrower irrevocably agreeing, by its incurrence
of any Swingline Loan, to the making of the Mandatory Borrowings as set
forth in Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrowers to confirm
in writing any telephonic notice of any Borrowing, the Administrative Agent may
act without liability upon the basis of telephonic notice of such Borrowing,
believed by the Administrative Agent in good faith to be from an Authorized
Representative of any Borrower prior to receipt of written confirmation. In each
such case, each Borrower hereby waives the right to dispute the Administrative
Agent's record of the terms of such telephonic notice of such Borrowing.
1.04 Disbursement of Funds. Except as otherwise specifically provided in
the immediately succeeding sentence, no later than 12:00 Noon (New York time) on
the date specified in each Notice of Borrowing (or (x) in the case of Swingline
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Loans, not later than 2:00 P.M. (New York time) on the date specified pursuant
to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (New York time) on the date specified in Section 1.01(d)), each Bank
will make available its pro rata portion of each such Borrowing requested to be
made on such date (or in the case of Swingline Loans, BTCo shall make available
the full amount thereof). All such amounts shall be made available in Dollars
and in immediately available funds at the Payment Office of the Administrative
Agent, and the Administrative Agent will make available to the Borrowers at the
Payment Office the aggregate of the amounts so made available by the Banks
(prior to 1:00 P.M. (New York time)) on such day, to the extent of funds
actually received by the Administrative Agent prior to 12:00 Noon (New York
time) on such day). Unless the Administrative Agent shall have been notified by
any Bank prior to the date of Borrowing that such Bank does not intend to make
available to the Administrative Agent such Bank's portion of any Borrowing to be
made on such date, the Administrative Agent may assume that such Bank has made
such amount available to the Administrative Agent on such date of Borrowing and
the Administrative Agent may, in reliance upon such assumption, make available
to the Borrowers a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Bank, the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon the
Administrative Agent's demand therefor, the Administrative Agent shall promptly
notify the Borrowers to immediately pay such corresponding amount to the
Administrative Agent. The Administrative Agent shall also be entitled to recover
on demand from such Bank or the Borrowers, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Administrative Agent to the Borrowers until the
date such corresponding amount is recovered by the Administrative Agent, at a
rate per annum equal to (i) if recovered from such Bank, the overnight Federal
Funds Rate and (ii) if recovered from the Borrowers, the rate of interest
applicable to the respective Borrowing, as determined pursuant to Section 1.08.
Nothing in this Section 1.04 shall be deemed to relieve any Bank from its
obligation to make Loans hereunder or to prejudice any rights which the
Borrowers may have against any Bank as a result of any failure by such Bank to
make Loans hereunder.
1.05 Notes. (a) The Borrowers' obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if Term Loans,
by a promissory note duly executed and delivered by the Borrowers substantially
in the form of Exhibit B-1, with blanks appropriately completed in conformity
herewith (each, a "Term Note" and, collectively, the "Term Notes"), (ii) if
Revolving Loans, by a promissory note duly executed and delivered by the
Borrowers substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each a "Revolving Note" and, collectively, the
"Revolving Notes") and (iii) if Swingline Loans, by a promissory note duly
executed and delivered by the Borrowers substantially in the form of Exhibit
B-3, with blanks appropriately completed in conformity herewith (the "Swingline
Note").
(b) The Term Note issued to each Bank shall (i) be executed by the
Borrowers, (ii) be payable to such Bank or its registered assigns and be dated
the Third Restatement Effective Date (or, in the case of Term Notes issued after
the Third Restatement Effective Date, be dated the date of issuance thereof),
(iii) be in a stated principal amount equal to the Term Loans made by such Bank
on such date and be payable in the principal amount of the Term Loans evidenced
thereby, (iv) mature on the Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to voluntary prepayment as provided in Section 4.01 and mandatory
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repayment as provided in Section 4.02 and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(c) The Revolving Note issued to each Bank shall (i) be executed by the
Borrowers, (ii) be payable to such Bank or its registered assigns and be dated
the Third Restatement Effective Date (or, in the case of Revolving Notes issued
after the Third Restatement Effective Date, be dated the date of issuance
thereof), (iii) be in a stated principal amount equal to the Revolving Loan
Commitment of such Bank and be payable in the principal amount of the Revolving
Loans evidenced thereby, (iv) mature on the Revolving Loan Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 1.08 in respect
of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section 4.01 and
mandatory repayment as provided in Section 4.02 and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(d) The Swingline Note issued to BTCo shall (i) be executed by the
Borrowers, (ii) be payable to BTCo or its registered assigns and be dated the
Fourth Restatement Effective Date (or, in the case of any Swingline Note issued
after the Fourth Restatement Effective Date, be dated the date of issuance
thereof), (iii) be in a stated principal amount equal to the Maximum Swingline
Amount and be payable in the principal amount of the outstanding Swingline Loans
evidenced thereby from time to time, (iv) mature on the Swingline Expiry Date,
(v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans evidenced thereby and (vi) be entitled to the
benefits of this Agreement and the other Credit Documents.
(e) Each Bank will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
any of its Notes endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation or any
error in any such notation or endorsement shall not affect the Borrowers'
obligations in respect of such Loans.
1.06 Conversions. The Borrowers shall have the option to convert, on any
Business Day occurring after the Fourth Restatement Effective Date, all or a
portion equal to at least the applicable Minimum Borrowing Amount of the
outstanding principal amount of Loans made pursuant to one or more Borrowings
(so long as of the same Tranche) of one or more Types of Loans into a Borrowing
(of the same Tranche) of another Type of Loan, provided that (i) except as
otherwise provided in Section 1.10(b), Eurodollar Loans may be converted into
Base Rate Loans only on the last day of an Interest Period applicable thereto
and no partial conversion of Eurodollar Loans shall reduce the outstanding
principal amount of such Eurodollar Loans made pursuant to a single Borrowing to
less than the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans
may only be converted into Eurodollar Loans if no Default or Event of Default is
in existence on the date of the conversion, (iii) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings of Eurodollar Loans
than is permitted under Section 1.02 and (iv) Swingline Loans may not be
converted pursuant to this Section 1.06. Each such conversion shall be effected
by the Borrowers by giving the Administrative Agent at its Notice Office prior
to 12:00 Noon (New York time) at least three Business Days' prior notice (each a
"Notice of Conversion") specifying the Loans to be so converted, the Borrowing
or Borrowings pursuant to which such Loans were made and, if to be converted
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into Eurodollar Loans, the Interest Period to be initially applicable thereto.
The Administrative Agent shall give each Bank prompt notice of any such proposed
conversion affecting any of its Loans.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans and Revolving Loans
under this Agreement shall be incurred from the Banks pro rata on the basis of
their Term Loan Commitments and Revolving Loan Commitments, as the case may be,
provided that all Borrowings of Revolving Loans made pursuant to a Mandatory
Borrowing shall be incurred from the Banks pro rata on the basis of their
Adjusted Percentages. It is understood that no Bank shall be responsible for any
default by any other Bank of its obligation to make Loans hereunder and that
each Bank shall be obligated to make the Loans provided to be made by it
hereunder, regardless of the failure of any other Bank to make its Loans
hereunder.
1.08 Interest. (a) The Borrowers jointly and severally agree to pay
interest in respect of the unpaid principal amount of each Base Rate Loan from
the date the proceeds thereof are made available to the Borrowers until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall be equal to the sum of
the Applicable Margin plus the Base Rate in effect from time to time.
(b) The Borrowers jointly and severally agree to pay interest in respect of
the unpaid principal amount of each Eurodollar Loan from the date the proceeds
thereof are made available to the Borrowers until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and (ii)
the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section
1.06 or 1.10, as applicable, at a rate per annum which shall, during each
Interest Period applicable thereto, be equal to the sum of the Applicable Margin
plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue interest
in respect of each Loan and any other overdue amount payable hereunder shall, in
each case, bear interest at a rate per annum equal to the greater of (x) 2% per
annum in excess of the rate otherwise applicable to Base Rate Loans from time to
time and (y) the rate which is 2% in excess of the rate then borne by such
Loans, in each case with such interest to be payable on a joint and several
basis by the Borrowers on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period, (iii) in respect of each Eurodollar Loan, on any
repayment or prepayment (on the amount repaid or prepaid) and (iv) in respect of
each Loan, at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent shall
determine the Eurodollar Rate for the respective Interest Period or Interest
Periods and shall promptly notify the Borrowers and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
1.09 Interest Periods. At the time the Borrowers give any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
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thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Loan (in the case of any subsequent
Interest Period), the Borrowers shall have the right to elect, by having an
Authorized Representative of the Borrowers give the Administrative Agent notice
thereof, the interest period (each an "Interest Period") applicable to such
Eurodollar Loan, which Interest Period shall, at the option of the Borrowers, be
a one, two, three or six-month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end on
the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for
a Eurodollar Loan would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) no Interest Period may be selected at any time when a Default or
an Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche of
Loans shall be selected which extends beyond the respective Maturity Date
for such Tranche of Loans; and
(vii) it is understood that in respect of Term Loans that remain
outstanding immediately after giving effect to the Fourth Restatement
Effective Date pursuant to Section 5.15 (ii), the Interest Periods
applicable thereto shall continue to apply thereto until the last day of
such Interest Period.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrowers have failed to elect, or are not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrowers shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank shall
have determined (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto but, with respect to clause (i)
below, may be made only by the Administrative Agent):
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(i) on any Interest Determination Date that, by reason of any changes
arising after the Fourth Restatement Effective Date affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the Fourth Restatement
Effective Date in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or in
the interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, order, guideline or
request, such as, for example, but not limited to: (A) a change in the
basis of taxation of payment to any Bank of the principal of or interest on
such Eurodollar Loan or any other amounts payable hereunder (except for
changes in the rate of tax on, or determined by reference to, the net
income or net profits of such Bank, or any franchise tax based on the net
income or net profits of such Bank, in either case pursuant to the laws of
the United States of America, the jurisdiction in which it is organized or
in which its principal office or applicable lending office is located or
any subdivision thereof or therein), but without duplication of any amounts
payable in respect of Taxes pursuant to Section 4.04(a), or (B) a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate and/or (y) other circumstances since the Fourth
Restatement Effective Date affecting such Bank or the interbank Eurodollar
market or the position of such Bank in such market (except as a result of a
deterioration in the creditworthiness of such Bank subsequent to the date
hereof); or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by any Bank in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the Fourth
Restatement Effective Date which materially and adversely affects the
interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the case
of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrowers and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Banks). Thereafter (x) in the
case of clause (i) above, Eurodollar Loans shall no longer be available until
such time as the Administrative Agent notifies the Borrowers and the Banks that
the circumstances giving rise to such notice by the Administrative Agent no
longer exist, and any Notice of Borrowing or Notice of Conversion given by the
Borrowers with respect to Eurodollar Loans which have not yet been incurred
(including by way of conversion) shall be deemed rescinded by the Borrowers, (y)
in the case of clause (ii) above, the Borrowers jointly and severally agree to,
subject to the provisions of Section 13.15 (to the extent applicable), pay to
such Bank, upon written demand therefor, such additional amounts (in the form of
an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing the basis for the calculation thereof,
submitted to the Borrowers by such Bank in good faith shall, absent manifest
error, be final and conclusive and binding on all the parties hereto) and (z) in
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the case of clause (iii) above, the Borrowers shall take one of the actions
specified in Section 1.10(b) as promptly as possible and, in any event, within
the time period required by law. Each of the Administrative Agent and each Bank
agrees that if it gives notice to the Borrowers of any of the events described
in clause (i) or (iii) above, it shall promptly notify the Borrowers and, in the
case of any such Bank, the Administrative Agent, if such event ceases to exist.
If any such event described in clause (iii) above ceases to exist as to a Bank,
the obligations of such Bank to make Eurodollar Loans and to convert Base Rate
Loans into Eurodollar Loans on the terms and conditions contained herein shall
be reinstated.
(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 1.10(a)(ii) or (iii), the Borrowers may (and in the case of
a Eurodollar Loan affected by the circumstances described in Section
1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, cancel the respective Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Borrowers were notified by the affected Bank or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days'
written notice to the Administrative Agent, require the affected Bank to convert
such Eurodollar Loan into a Base Rate Loan, provided that, if more than one Bank
is affected at any time, then all affected Banks must be treated the same
pursuant to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank determines
that the introduction of or any change in any applicable law or governmental
rule, regulation, order, guideline, directive or request (whether or not having
the force of law) concerning capital adequacy, or any change in interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitments
hereunder or its obligations hereunder, then the Borrowers jointly and severally
agree, subject to the provisions of Section 13.15 (to the extent applicable), to
pay to such Bank, upon its written demand therefor, such additional amounts as
shall be required to compensate such Bank or such other corporation for the
increased cost to such Bank or such other corporation or the reduction in the
rate of return to such Bank or such other corporation as a result of such
increase of capital. In determining such additional amounts, each Bank will act
reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Bank's reasonable good faith
determination of compensation owing under this Section 1.10(c) shall, absent
manifest error, be final and conclusive and binding on all the parties hereto.
Each Bank, upon determining that any additional amounts will be payable pursuant
to this Section 1.10(c), will give written notice thereof to the Borrowers,
which notice shall show the basis for calculation of such additional amounts.
1.11 Compensation. The Borrowers jointly and severally agree, subject to
the provisions of Section 13.15 (to the extent applicable), to compensate each
Bank, upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding any loss of
anticipated profit) which such Bank may sustain: (i) if for any reason (other
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than a default by such Bank or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrowers or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any repayment (including any repayment made pursuant to Section 4.02 or
as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrowers; or (iv) as a consequence of (x) any other
default by the Borrowers to repay its Loans when required by the terms of this
Agreement or any Note held by such Bank or (y) any election made pursuant to
Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that upon the occurrence of
any event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section 4.04 with respect to such Bank, it will, if
requested by the Borrowers, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any Loans
or Letters of Credit affected by such event, provided that such designation is
made on such terms that such Bank and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequence of
the event giving rise to the operation of such Section. Nothing in this Section
1.12 shall affect or postpone any of the obligations of the Borrowers or the
rights of any Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank or
otherwise defaults in its obligations to make Loans or fund Unpaid Drawings, (y)
upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect
to any Bank which results in such Bank charging to the Borrowers increased costs
in excess of those being generally charged by the other Banks or (z) as provided
in Section 13.12(b) in the case of certain refusals by a Bank to consent to
certain proposed changes, waivers, discharges or terminations with respect to
this Agreement which have been approved by the Required Banks, the Borrowers
shall have the right, if no Default or Event of Default will exist immediately
after giving effect to the respective replacement, to replace such Bank (the
"Replaced Bank") with one or more other Eligible Transferee or Transferees, none
of whom shall constitute a Defaulting Bank at the time of such replacement
(collectively, the "Replacement Bank") reasonably acceptable to the
Administrative Agent, provided that (i) at the time of any replacement pursuant
to this Section 1.13, the Replacement Bank shall enter into one or more
Assignment and Assumption Agreements pursuant to Section 13.04(b) (and with all
fees payable pursuant to said Section 13.04(b) to be paid by the Replacement
Bank) pursuant to which the Replacement Bank shall acquire all of the
Commitments and outstanding Loans of, and participations in Letters of Credit
by, the Replaced Bank and, in connection therewith, shall pay to (x) the
Replaced Bank in respect thereof an amount equal to the sum of (A) an amount
equal to the principal of, and all accrued interest on, all outstanding Loans of
the Replaced Bank, (B) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant to
Section 3.01 and (y) BTCo an amount equal to such Replaced Bank's Adjusted
Percentage (for this purpose, determined as if the adjustment described in
clause (y) of the immediately succeeding sentence had been made with respect to
such Replaced Bank) of (1) any Unpaid Drawing (which at such time remains an
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Unpaid Drawing) and (2) any portion of any Swingline Loan for which BTCo has
given a notice of a Mandatory Borrowing pursuant to Section 1.01(d) and such
Replaced Bank has not provided a Revolving Loan which it was obligated to
provide to the extent such amount was not theretofore funded by such Replaced
Bank, and (ii) all obligations of the Borrowers owing to the Replaced Bank
(other than those (a) specifically described in clause (i) above in respect of
which the assignment purchase price has been, or is concurrently being, paid or
(b) relating to any Tranche of Loans and/or Commitments of the respective
Replaced Bank which will remain outstanding after giving effect to the
respective replacement) shall be paid in full to such Replaced Bank concurrently
with such replacement. Upon the execution of the respective Assignment and
Assumption Agreements, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Bank, delivery to the
Replacement Bank of the appropriate Notes executed by the Borrowers, (x) the
Replacement Bank shall become a Bank hereunder and the Replaced Bank shall cease
to constitute a Bank hereunder, except with respect to indemnification
provisions under this Agreement (including, without limitation, Sections 1.10,
1.11, 2.06, 4.04, 13.01 and 13.06), which shall survive as to such Replaced Bank
and (y) in the case of a replacement of a Defaulting Bank with a Non-Defaulting
Bank, the Adjusted Percentages of the Banks shall be automatically adjusted at
such time to give effect to such replacement (and to give effect to the
replacement of a Defaulting Bank with one or more Non-Defaulting Banks).
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and conditions
herein set forth, the Borrowers may request that any Issuing Bank issue, at any
time and from time to time on and after the Third Restatement Effective Date and
prior to the Revolving Loan Maturity Date, for the joint and several account of
the Borrowers, one or more irrevocable letters of credit or, in the case of
Trade Letters of Credit, through the creation thereunder by the respective
Issuing Bank of acceptances or any other customary agreement or method for
providing for deferred payment under letters of credit ("Acceptances"), and
otherwise in a form customarily used by such Issuing Bank or in such other form
as has been approved by such Issuing Bank (each such letter of credit, a "Letter
of Credit") in support of obligations described in the definitions of Standby
Letter of Credit or Trade Letter of Credit and any other obligations of the
Borrowers or any of their Restricted Subsidiaries that are reasonably acceptable
to the Administrative Agent and otherwise permitted to exist pursuant to this
Agreement. On the Fourth Restatement Effective Date, all Existing Letters of
Credit shall be deemed to have been issued under this Agreement and shall for
all purposes constitute "Letters of Credit" hereunder.
(b) Letters of Credit may be issued at the request of the Borrowers in
Dollars or any Alternate Currency.
(c) Each Issuing Bank may agree, in its sole discretion, and BTCo hereby
agrees that in the event a requested Letter of Credit is not issued by one of
the other Issuing Banks, it will (subject to the terms and conditions contained
herein), at any time and from time to time on or after the Third Restatement
Effective Date and prior to the Revolving Loan Maturity Date, following its
receipt of the respective Letter of Credit Request, issue for the account of the
Borrowers one or more Letters of Credit in support of such obligations described
in the definitions of Standby Letter of Credit and Trade Letter of Credit of the
Borrowers or any of their Restricted Subsidiaries as is permitted to exist
pursuant to this Agreement without giving rise to a Default or Event of Default
hereunder, provided that the respective Issuing Bank shall be under no
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obligation to issue any Letter of Credit of the types described above if at the
time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or not
having the force of law) from any governmental authority with jurisdiction
over such Issuing Bank shall prohibit, or request that such Issuing Bank
refrain from, the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon such Issuing Bank with respect to
such Letter of Credit any restriction or reserve or capital requirement
(for which such Issuing Bank is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to such Issuing Bank as of the date hereof
and which such Issuing Bank in good faith deems material to it; or
(ii) such Issuing Bank shall have received notice from any Bank prior
to the issuance of such Letter of Credit of the type described in the
penultimate sentence of Section 2.03(b).
(d) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued
the Stated Amount of which, when added to the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid on the date of, and prior to the
issuance of, the respective Letter of Credit) at such time would exceed either
(x) $60,000,000 or (y) when added to the aggregate principal amount of all
Revolving Loans made by Non-Defaulting Banks and then outstanding and Swingline
Loans then outstanding, an amount equal to the Adjusted Total Revolving Loan
Commitment at such time, (ii) no Letter of Credit denominated in a currency
other than Dollars shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time in respect of Letters of Credit issued in currency other than Dollars,
would exceed $5,000,000 unless the Administrative Agent and the respective
Issuing Bank consents thereto, (iii) no Acceptance shall be created the Stated
Amount of which, when added to the amount of all Acceptances outstanding at such
time, would exceed $15,000,000, (iv) each Letter of Credit shall by its terms
terminate or be terminable by the Issuing Bank on such date that would result in
all drawings thereunder, or any Acceptances created thereunder, being funded
pursuant to the terms thereof prior to (x) (A) in the case of Standby Letters of
Credit, the date which occurs 12 months after the date of the issuance thereof
(although any such Letter of Credit may be extendible for successive periods of
up to 12 months, but not beyond the Revolving Loan Maturity Date, on terms
acceptable to the Issuing Bank thereof) and (B) in the case of Trade Letters of
Credit, the date which occurs six months (or up to one year with the consent of
the respective Issuing Bank) after the date of the issuance thereof or (y) (A)
in the case of Standby Letters of Credit, the date which is five Business Days
prior to the Revolving Loan Maturity Date and (B) in the case of Trade Letters
of Credit, the date which is thirty Business Days prior to the Revolving Loan
Maturity Date and (v) in the event that the Borrower requests that the Trade
Letter of Credit be issued on an Acceptance basis, the Trade Letter of Credit
shall be issued at a tenor for no less than 30 days.
2.02 Minimum Stated Amount. The Stated Amount of each Letter of Credit
shall be not less than $10,000 or such lesser amount as is acceptable to the
respective Issuing Bank.
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2.03 Letter of Credit Requests. (a) Whenever any Borrower desires that a
Letter of Credit be issued by the Administrative Agent as Issuing Bank, it shall
have (i) executed and delivered the Letter of Credit Service Agreement in the
form of Exhibit C-1 attached hereto (as amended, modified or supplemented from
time to time, the "Letter of Credit Service Agreement"), which Letter of Credit
Service Agreement shall be in full force and effect and (ii) made a request for
the issuance of such Letter of Credit in accordance with the terms of the Letter
of Credit Service Agreement. Whenever any Borrower desires that a Trade Letter
of Credit be issued by an Issuing Bank other than the Administrative Agent, it
shall have (x) executed and delivered to the respective Issuing Bank (with
copies having been sent to the Administrative Agent) at least five Business Days
prior to the issuance thereof (or such shorter period as may be acceptable to
the respective Issuing Bank), a Trade Letter of Credit Request in the form of
Exhibit C-2 attached hereto (each a "Trade Letter of Credit Request") and (y)
completed and executed a letter of credit application in the form customarily
used by such Issuing Bank for Trade Letters of Credit or in such other form as
the Administrative Agent and the Issuing Bank shall request. Whenever any
Borrower desires that a Standby Letter of Credit be issued by an Issuing Bank
other than the Administrative Agent for its account it shall have executed and
delivered to the respective Issuing Bank (with copies having been sent to the
Administrative Agent) at least five Business Days prior to the issuance thereof
(or such shorter period as may be acceptable to the respective Issuing Bank), a
Standby Letter of Credit Request in the form of Exhibit C-3 attached hereto
(each a "Standby Letter of Credit Request"). Letter of Credit Requests shall be
given in writing, or in the case of requests of Trade Letters of Credit, by
telephone, if promptly confirmed in writing, or, if the Administrative Agent is
the Issuing Bank, as otherwise provided in the Letter of Credit Service
Agreement, provided that (I) if the express provisions of any letter of credit
application conflict with the express provisions of this Agreement, the
provisions of this Agreement shall control to the extent of such conflict and
(II) no event (other than the failure to reimburse Letter of Credit Drawings as
provided for in Section 2.05) which constitutes a default under any application
shall constitute an Event of Default hereunder solely by reason of any default
provisions contained in such application.
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrowers that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(d). Unless the respective Issuing Bank has received notice from any Bank
before it issues a Letter of Credit that one or more of the conditions specified
in Section 6 are not then satisfied, or that the issuance of such Letter of
Credit would violate Section 2.01(d), then such Issuing Bank may issue the
requested Letter of Credit for the account of the Borrowers in accordance with
such Issuing Bank's usual and customary practices. Upon its issuance of any
Letter of Credit, such Issuing Bank shall promptly notify each Bank of such
issuance.
2.04 Letter of Credit Participations.
(a) Immediately upon the issuance by any Issuing Bank of any Letter of
Credit, such Issuing Bank shall be deemed to have sold and transferred to each
Bank, other than such Issuing Bank (each such Bank, in its capacity under this
Section 2.04, a "Participant"), and each such Participant shall be deemed
irrevocably and unconditionally to have purchased and received from such Issuing
Bank, without recourse or warranty, an undivided interest and participation, to
the extent of such Participant's Adjusted Percentage in such Letter of Credit,
each drawing made thereunder and Acceptances created thereunder and the
obligations of the Borrowers under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments or Adjusted Percentages of the Banks pursuant to
Section 1.13 or 13.04 or as a result of a Bank Default, it is hereby agreed
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that, with respect to all outstanding Letters of Credit, Acceptances and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new Adjusted Percentages of the assignor and
assignee Bank or of all Banks with Revolving Loan Commitments, as the case may
be.
(b) In determining whether to pay or create an Acceptance under any Letter
of Credit, such Issuing Bank shall have no obligation relative to the other
Banks other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct, as determined by a court of competent
jurisdiction, shall not create for such Issuing Bank any resulting liability to
the Borrowers or any Bank.
(c) In the event that any Issuing Bank makes any payment under any Letter
of Credit issued by it or any Acceptance created thereunder and the Borrowers
shall not have reimbursed such amount in full to such Issuing Bank pursuant to
Section 2.05(a), such Issuing Bank shall promptly notify the Administrative
Agent, which shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to such Issuing Bank the
amount of such Participant's Adjusted Percentage of such unreimbursed payment in
Dollars and in same day funds. If the Administrative Agent so notifies, prior to
11:00 A.M. (New York time) on any Business Day, any Participant required to fund
a payment under a Letter of Credit, such Participant shall make available to
such Issuing Bank in Dollars such Participant's Adjusted Percentage of the
amount of such payment on such Business Day in same day funds. If and to the
extent such Participant shall not have so made its Adjusted Percentage of the
amount of such payment available to such Issuing Bank, such Participant agrees
to pay to such Issuing Bank, forthwith on demand, such amount, together with
interest thereon, for each day from such date until the date such amount is paid
to such Issuing Bank at the overnight Federal Funds Rate. The failure of any
Participant to make available to such Issuing Bank its Adjusted Percentage of
any payment under any Letter of Credit shall not relieve any other Participant
of its obligation hereunder to make available to such Issuing Bank its Adjusted
Percentage of any Letter of Credit or Acceptance created thereunder on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to such Issuing Bank such
other Participant's Adjusted Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Bank shall pay to each Participant
which has paid its Adjusted Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount originally funded by such Participant to the aggregate amount
funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.
(e) (i) In the case of Standby Letters of Credit, the Administrative Agent
shall deliver to each Participant copies of each Standby Letter of Credit upon
issuance and any amendments thereto as they occur, as furnished to the
Administrative Agent by the Issuing Bank.
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(ii) In the case of Trade Letters of Credit, when the Administrative Agent
is not the Issuing Bank, then the Issuing Bank is to send to the Administrative
Agent, promptly on the first business day of each week, by telefax, their daily
outstanding Trade Letters of Credit balances for the previous week. The
Administrative Agent shall deliver to each Bank upon each calendar month end and
upon each Letter of Credit fee payment a report setting forth for such period
the aggregate daily amount available to be drawn under Trade Letters of Credit
issued by all Issuing Banks that were outstanding during such period.
(f) The obligations of the Participants to make payments to each Issuing
Bank with respect to Letters of Credit and Acceptances issued thereunder shall
be irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrowers or any of their Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), any
holder of an Acceptance, the Administrative Agent, any Participant, or any
other Person, whether in connection with this Agreement, any Letter of
Credit, any Acceptance, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between any
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings and Acceptance Payments.
(a) The Borrowers hereby jointly and severally agree to reimburse the
respective Issuing Bank, by making payment to the Administrative Agent for the
account of such Issuing Bank in an amount in Dollars (in the case of any payment
or disbursement made by such Issuing Bank in a currency other than Dollars, of
the Dollar Equivalent of such payment and disbursement as determined by BTCo on
the date of such payment or disbursement) and in immediately available funds at
the Payment Office, for any payment or disbursement made by such Issuing Bank
under any Letter of Credit or Acceptance created thereunder (each such amount,
or the Dollar Equivalent thereof as determined by BTCo on the date of payment or
disbursement, so paid until reimbursed, an "Unpaid Drawing"), immediately after,
and in any event on the date of such payment or disbursement, with interest on
the amount so paid or disbursed by such Issuing Bank, to the extent not
reimbursed prior to 12:00 Noon (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding the
date such Issuing Bank was reimbursed by the Borrowers therefor at a rate per
annum which shall be the Base Rate in effect from time to time plus the
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Applicable Margin for Base Rate Loans, provided, however, to the extent such
amounts are not reimbursed prior to 12:00 Noon (New York time) on the second
Business Day following such payment or disbursement, interest shall thereafter
accrue on the amounts so paid or disbursed by such Issuing Bank (and until
reimbursed by the Borrowers) at a rate per annum which shall be the Base Rate in
effect from time to time plus the Applicable Margin for Base Rate Loans plus 2%,
in each such case, with interest to be payable by the Borrowers on demand. The
respective Issuing Bank shall give the Borrowers prompt notice of each Drawing
under any Letter of Credit or payment under any Acceptance created thereunder,
provided that the failure to give any such notice shall in no way affect, impair
or diminish the Borrowers' obligations hereunder.
(b) The obligations of the Borrowers under this Section 2.05 to reimburse
the respective Issuing Bank with respect to drawings on Letters of Credit and
payments under any Acceptance created thereunder (each, a "Drawing") (including
interest thereon) shall be joint and several and shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which any Borrower may have or have had
against any Bank (including in its capacity as issuer of the Letter of Credit or
as Participant), or any nonapplication or misapplication by the beneficiary of
the proceeds of such Drawing, the respective Issuing Bank's only obligation to
the Borrowers being to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Bank under or in
connection with any Letter of Credit or any Acceptance created thereunder if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for such Issuing Bank any resulting liability to the Borrowers.
2.06 Increased Costs. If at any time after the date of this Agreement, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Issuing Bank or any Participant with any request
or directive by any such authority (whether or not having the force of law), or
any change in generally acceptable accounting principles, shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued, or Acceptances created, by
any Issuing Bank or participated in by any Participant, or (ii) impose on any
Issuing Bank or any Participant any other conditions relating, directly or
indirectly, to this Agreement, any Letter of Credit or any Acceptance created
thereunder; and the result of any of the foregoing is to increase the cost to
any Issuing Bank or any Participant of issuing, maintaining or participating in
any Letter of Credit or any Acceptance created thereunder, or reduce the amount
of any sum received or receivable by any Issuing Bank or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit and Acceptances created thereunder (except for changes in the rate of tax
on, or determined by reference to, the net income or net profits of such Issuing
Bank or such Participant, or any franchise tax based on the net income or net
profits of such Bank or Participant, in either case pursuant to the laws of the
United States of America, the jurisdiction in which it is organized or in which
its principal office or applicable lending office is located or any subdivision
thereof or therein), but without duplication of any amounts payable in respect
of Taxes pursuant to Section 4.04(a), then, upon demand to the Borrowers by such
Issuing Bank or any Participant (a copy of which demand shall be sent by such
Issuing Bank or such Participant to the Administrative Agent) and subject to the
provisions of Section 13.15 (to the extent applicable), the Borrowers jointly
and severally agree to pay to such Issuing Bank or such Participant such
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additional amount or amounts as will compensate such Bank for such increased
cost or reduction in the amount receivable or reduction on the rate of return on
its capital. Any Issuing Bank or any Participant, upon determining that any
additional amounts will be payable pursuant to this Section 2.06, will give
prompt written notice thereof to the Borrowers, which notice shall include a
certificate submitted to the Borrowers by such Issuing Bank or such Participant
(a copy of which certificate shall be sent by such Issuing Bank or such
Participant to the Administrative Agent), setting forth in reasonable detail the
basis for the calculation of such additional amount or amounts necessary to
compensate such Issuing Bank or such Participant. The certificate required to be
delivered pursuant to this Section 2.06 shall, if delivered in good faith and
absent manifest error, be final and conclusive and binding on the Borrowers.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrowers jointly and severally agree to pay to the
Administrative Agent for distribution to each Non-Defaulting Bank with a
Revolving Loan Commitment a commitment commission (the "Commitment Commission")
for the period from the Fourth Restatement Effective Date to but excluding the
Revolving Loan Maturity Date (or such earlier date as the Total Revolving Loan
Commitment shall have been terminated), computed at a rate for each day equal to
1/2 of 1% (reduced by the then applicable Commitment Commission Reduction
Percentage) per annum on the daily average Unutilized Revolving Loan Commitment
of such Non-Defaulting Bank. Accrued Commitment Commission shall be due and
payable quarterly in arrears on each Quarterly Payment Date and on the Revolving
Loan Maturity Date or such earlier date upon which the Total Revolving Loan
Commitment is terminated.
(b) The Borrowers jointly and severally agree to pay to the Administrative
Agent for pro rata distribution to each Non-Defaulting Bank a fee in respect of
(x) each Letter of Credit issued hereunder (the "Letter of Credit Fee"), for the
period from and including the date of issuance of such Letter of Credit to the
termination of such Letter of Credit, computed at a rate per annum equal to the
Applicable Margin for Revolving Loans maintained as Eurodollar Loans as in
effect from time to time on the daily Stated Amount of such Letter of Credit and
(y) each Acceptance (the "Acceptance Fee") for the period from and including the
date of creation of such Acceptance to and including the maturity of such
Acceptance, computed at a rate per annum equal to the Applicable Margin for
Revolving Loans maintained as Eurodollar Loans as in effect from time to time on
the daily Stated Amount of such Acceptance. Accrued Letter of Credit Fees and
Acceptance Fees shall be due and payable quarterly in arrears on each Quarterly
Payment Date and upon the first day on or after the termination of the Total
Revolving Loan Commitment upon which no Letters of Credit or Acceptances remain
outstanding.
(c) The Borrowers jointly and severally agree to pay to the respective
Issuing Bank, for its own account, a facing fee in respect of (x) each Standby
Letter of Credit issued for its account hereunder (the "Letter of Credit Facing
Fee") for the period from and including the date of issuance of such Standby
Letter of Credit to and including the termination of such Standby Letter of
Credit, computed at a rate equal to 1/8 of 1% per annum of the daily Stated
Amount of such Standby Letter of Credit, provided that in any event the minimum
amount of the Letter of Credit Facing Fee payable in any 12 month period for any
Standby Letter of Credit shall be $500 (it being agreed that, on each
anniversary of the issuance of any Standby Letter of Credit or upon any earlier
termination or expiration of a Standby Letter of Credit, if $500 exceeds the
amount of Letter of Credit Facing Fees theretofore paid or then accrued with
respect to such Standby Letter of Credit, in either case after the date of the
issuance thereof or, if later, after the date of the last anniversary of the
issuance thereof (but excluding any amounts paid after such anniversary with
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respect to periods ending on or prior to such anniversary, including, without
limitation, as a result of the operation of this parenthetical), the amount of
such excess shall be payable on the next date upon which accrued Letter of
Credit Facing Fees are otherwise payable with respect to Standby Letters of
Credit as provided in the following sentence) and (y) each Acceptance created by
it (the "Acceptance Facing Fee," and together with the Letter of Credit Facing
Fees, the "Facing Fees") for the period from and including the date of creation
of such Acceptance to and including the maturity of such Acceptance, computed at
a rate equal to 1/8 of 1% per annum of the daily Stated Amount of such
Acceptance. Accrued Facing Fees shall be due and payable quarterly in arrears on
each Quarterly Payment Date and on the date upon which the Total Revolving Loan
Commitment has been terminated and all Letters of Credit and Acceptances have
been terminated in accordance with their terms.
(d) The Borrowers jointly and severally agree to pay, upon each drawing
under, issuance of, or amendment to any Letter of Credit, such amount as shall
at the time of such event be the administrative charge and out-of-pocket
expenses which the respective Issuing Bank is generally imposing in connection
with such occurrence with respect to letters of credit.
(e) The Borrowers jointly and severally agree to pay to the Agents, for
their own account, such other fees as have been agreed to in writing by the
Borrowers and the Agents.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at least two
Business Days' prior notice from an Authorized Representative of the Borrowers
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks), the
Borrowers shall have the right, at any time or from time to time, without
premium or penalty, to terminate the Total Unutilized Revolving Loan Commitment,
in whole or in part, in integral multiples of $1,000,000, provided that (i) each
such reduction shall apply proportionately to permanently reduce the Revolving
Loan Commitment of each Bank with such a Commitment, and (ii) the reduction to
the Total Unutilized Revolving Loan Commitment shall in no case be in an amount
which would cause the Revolving Loan Commitment of any Bank to be reduced (as
required by preceding clause (i)) by an amount which exceeds the remainder of
(x) the Unutilized Revolving Loan Commitment of such Bank as in effect
immediately before giving effect to such reduction minus (y) such Bank's
Adjusted Percentage of the aggregate principal amount of Swingline Loans then
outstanding.
(b) In the event of certain refusals by a Bank as provided in Section
13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrowers may, subject to their compliance with the
requirements of said Section 13.12(b), upon five Business Days' written notice
to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Banks) terminate all
of the Revolving Loan Commitment of such Bank so long as all Loans, together
with accrued and unpaid interest, Fees and all other amounts, owing to such Bank
(other than amounts owing in respect of any Term Loans maintained by such Bank,
if such Term Loans are not being repaid pursuant to Section 13.12(b)) are repaid
concurrently with the effectiveness of such termination (at which time Schedule
I shall be deemed modified to reflect such changed amounts), and at such time,
such Bank shall no longer constitute a "Bank" for purposes of this Agreement,
except with respect to indemnifications under this Agreement (including, without
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limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06), which shall
survive as to such repaid Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Revolving Loan
Commitment (and the Revolving Loan Commitment of each Bank) shall terminate in
its entirety on July 31, 1998 and the Existing Credit Agreement shall continue
in effect (in accordance with its terms) unless the Fourth Restatement Effective
Date shall have occurred on or prior to such date.
(b) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Term Loan Commitment (and the Term Loan Commitment
of each Bank) was terminated in full on the Third Restatement Effective Date
(after giving effect to the making of the Term Loans on such date).
(c) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Revolving Loan Commitment (and the Revolving Loan
Commitment of each Bank) shall terminate in its entirety on the Revolving Loan
Maturity Date.
(d) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, on each date after the Fourth Restatement Effective Date upon
which a mandatory prepayment of Term Loans pursuant to Section 4.02(A)(b), (c)
or (d) is required (and exceeds in amount the aggregate principal amount of Term
Loans then outstanding) or would be required if Term Loans were then
outstanding, the Total Revolving Loan Commitment shall be permanently reduced by
the amount, if any, by which the amount required to be applied pursuant to said
Section (determined as if an unlimited amount of Term Loans were actually
outstanding) exceeds the aggregate principal amount of Term Loans then
outstanding.
(e) Each reduction to the Total Revolving Loan Commitment pursuant to this
Section 3.03 shall be applied proportionately to reduce the Revolving Loan
Commitment of each Bank.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrowers shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) an Authorized
Representative of the Borrowers shall give the Administrative Agent prior to
12:00 Noon (New York time) at its Notice Office (x) at least one Business Day's
prior written notice (or telephonic notice promptly confirmed in writing) of the
Borrowers' intent to prepay Base Rate Loans (or same day notice in the case of
Swingline Loans provided such notice is given prior to 11:00 A.M. (New York
time)) and (y) at least three Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of their intent to prepay Eurodollar
Loans, whether Term Loans, Revolving Loans or Swingline Loans shall be prepaid,
the amount of such prepayment and the Types of Loans to be prepaid and, in the
case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which
made, which notice the Administrative Agent shall promptly transmit to each of
the Banks; (ii) each prepayment shall be in an aggregate principal amount of at
least $1,000,000 (or $500,000 in the case of Swingline Loans), provided that if
any partial prepayment of Eurodollar Loans made pursuant to any Borrowing shall
reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto, then such
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Borrowing may not be continued as a Borrowing of Eurodollar Loans and any
election of an Interest Period with respect thereto given by the Borrowers shall
have no force or effect; (iii) at the time of any prepayment of Eurodollar Loans
pursuant to this Section 4.01 on any date other than the last day of the
Interest Period applicable thereto, the Borrowers shall pay the amounts required
pursuant to Section 1.11; and (iv) each prepayment in respect of any Loans made
pursuant to a Borrowing shall be applied pro rata among such Loans, provided
that at the Borrowers' election in connection with any prepayment of Loans, such
prepayment shall not be applied to the prepayment of Loans of a Defaulting Bank.
(b) In the event of certain refusals by a Bank as provided in Section
13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Banks, the Borrowers may, upon five Business Days' written notice by an
Authorized Representative of the Borrowers to the Administrative Agent at its
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Banks) repay all Loans, together with accrued and unpaid interest,
Fees, and other amounts owing to such Bank in accordance with, and subject to
the requirements of, said Section 13.12(b) so long as (A) the Commitments of
such Bank are terminated concurrently with such repayment (at which time
Schedule I shall be deemed modified to reflect the changed Commitments) and (B)
the consents required by Section 13.12(b) in connection with the repayment
pursuant to this clause (b) have been obtained.
4.02 Mandatory Repayments, Cash Collateralizations and Commitment
Reductions.
(A) Requirements:
(a) (i) On any day on which the sum of the aggregate outstanding principal
amount of the Revolving Loans made by Non-Defaulting Banks, Swingline Loans and
the Letter of Credit Outstandings exceeds the Adjusted Total Revolving Loan
Commitment as then in effect, the Borrowers jointly and severally agree to
prepay principal of Swingline Loans and, after the Swingline Loans have been
repaid in full, Revolving Loans of Non-Defaulting Banks in an amount equal to
such excess. If, after giving effect to the prepayment of all outstanding
Swingline Loans and Revolving Loans of Non-Defaulting Banks, the aggregate
amount of the Letter of Credit Outstandings exceeds the Adjusted Total Revolving
Loan Commitment as then in effect, the Borrowers jointly and severally agree to
pay to the Administrative Agent at the Payment Office on such date an amount of
cash or Cash Equivalents equal to the amount of such excess (up to a maximum
amount equal to the Letter of Credit Outstandings at such time), such cash or
Cash Equivalents to be held as security for all obligations of the Borrowers to
Non-Defaulting Banks hereunder in a cash collateral account to be established by
the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal amount of
the Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan
Commitment of such Defaulting Bank, the Borrowers jointly and severally
shall prepay principal of Revolving Loans of such Defaulting Bank in an
amount equal to such excess.
(b) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, on each date after the Fourth Restatement
Effective Date upon which Furniture Brands or any of its Restricted Subsidiaries
receives any cash proceeds from any incurrence by Furniture Brands or any of its
Restricted Subsidiaries of Indebtedness for borrowed money (excluding any other
Indebtedness for borrowed money permitted to be incurred pursuant to Section
9.04 as such Section is in effect on the Fourth Restatement Effective Date), an
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amount equal to 100% (or 0% if the Leverage Ratio, after giving effect to the
respective debt incurrence, is less than 4.0:1.0 and so long as no Default or
Event of Default exists on the date of the respective incurrence of debt) of the
Net Cash Proceeds of the respective incurrence of Indebtedness shall be applied
as a mandatory repayment of principal of the then outstanding Term Loans. In
addition to any other mandatory repayments or commitment reductions pursuant to
this Section 4.02, on each date after the Fourth Restatement Effective Date upon
which any Borrower receives any cash proceeds from any incurrence by such
Borrower of Permitted Unsecured Indebtedness pursuant to Section 9.04(ii), an
amount equal to 50% of the Net Cash Proceeds of the respective incurrence of
Permitted Unsecured Indebtedness shall be applied as a mandatory repayment of
principal of the then outstanding Term Loans.
(c) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, on each date after the Fourth Restatement
Effective Date upon which Furniture Brands or any of its Restricted Subsidiaries
receives proceeds from any sale or other disposition of assets (including
capital stock and securities held thereby, but excluding (i) sales or transfers
of inventory in the ordinary course of business, (ii) sales or transfers of
assets with a fair market value less than (A) $100,000 per such sale or
disposition (or in a series of related sales or dispositions) and (B) with
respect to any sale or transfer in an amount in excess of the amount referred to
in clause (A) above, $10,000,000 in the aggregate for all such transfers in any
Fiscal Year and (iii) sales or transfers of assets permitted pursuant to
Sections 9.02 (v)), an amount equal to 100% of the Net Sale Proceeds therefrom
shall be applied as a mandatory repayment of principal of the then outstanding
Term Loans.
(d) In addition to any other mandatory repayments or commitment reductions
pursuant to this Section 4.02, within 10 days following each date after the
Fourth Restatement Effective Date on which Furniture Brands or any of its
Restricted Subsidiaries receives any proceeds from any Recovery Event (other
than proceeds from Recovery Events in an amount less than (A) $100,000 per each
Recovery Event and (B) with respect to any Recovery Event with proceeds in
excess of the amount referred to in clause (A) above, $1,000,000 in the
aggregate for all such Recovery Events in any Fiscal Year), an amount equal to
100% of the proceeds of such Recovery Event (net of reasonable costs including,
without limitation, legal costs and expenses, and taxes incurred in connection
with such Recovery Event) shall be applied as a mandatory repayment of principal
of the then outstanding Term Loans, provided that (x) so long as no Default or
Event of Default then exists and such proceeds do not exceed $5,000,000, such
proceeds shall not be required to be so applied on such date to the extent that
an Authorized Representative of the Borrowers has delivered a certificate to the
Administrative Agent on or prior to such date stating that such proceeds shall
be used or shall be committed to be used to replace or restore any properties or
assets in respect of which such proceeds were paid within one year following the
date of such Recovery Event (which certificate shall set forth the estimates of
the proceeds to be so expended) and (y) so long as no Default or Event of
Default then exists and to the extent that (a) the amount of such proceeds
exceeds $5,000,000, (b) the amount of such proceeds, together with other cash
available to the Borrowers and permitted to be spent by them or their Restricted
Subsidiaries on Capital Expenditures during the relevant period pursuant to
Section 9.07, equals at least 100% of the cost of replacement or restoration of
the properties or assets in respect of which such proceeds were paid as
determined by the Borrowers and as supported by such estimates or bids from
contractors or subcontractors or such other supporting information as the
Administrative Agent may reasonably request, (c) an Authorized Representative of
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the Borrowers has delivered to the Administrative Agent a certificate on or
prior to the date the application would otherwise be required pursuant to this
Section 4.02(A)(d) in the form described in clause (x) above and also certifying
its determination as required by preceding clause (b) and certifying the
sufficiency of business interruption insurance as required by succeeding clause
(d), and (d) an Authorized Representative of the Borrowers has delivered to the
Administrative Agent such evidence as the Administrative Agent may reasonably
request in form and substance reasonably satisfactory to the Administrative
Agent establishing that the Borrowers have sufficient business interruption
insurance and that the Borrowers will receive payment thereunder in such amounts
and at such times as are necessary to satisfy all obligations and expenses of
the Borrowers (including, without limitation, all debt service requirements,
including pursuant to this Agreement) without any delay or extension thereof,
for the period from the date of the respective casualty, condemnation or other
event giving rise to the Recovery Event and continuing through the completion of
the replacement or restoration of respective properties or assets, then the
entire amount of the proceeds of such Recovery Event and not just the portion in
excess of $5,000,000 shall be deposited with the Administrative Agent pursuant
to a cash collateral arrangement reasonably satisfactory to the Administrative
Agent whereby such proceeds shall be disbursed to the Borrowers from time to
time as needed to pay actual costs incurred by them in connection with the
replacement or restoration of the respective properties or assets (pursuant to
such certification requirements as may be established by the Administrative
Agent), provided further, that at any time while an Event of Default has
occurred and is continuing, the Required Banks may direct the Administrative
Agent (in which case the Administrative Agent shall, and is hereby authorized by
the Borrowers to, follow said directions) to apply any or all proceeds then on
deposit in such collateral account to the repayment of Obligations hereunder in
the same manner as proceeds would be applied pursuant to the Security Agreement,
and provided further, that if all or any portion of such proceeds not required
to be applied as a mandatory repayment pursuant to the second preceding proviso
(whether pursuant to clause (x) or (y) thereof) are either (A) not so used or
committed to be so used within one year after the date of the respective
Recovery Event or (B) if committed to be used within one year after the date of
receipt of such Net Sale Proceeds and not so used within 18 months after the
date of respective Recovery Event then, in either such case, such remaining
portion not used or committed to be used in the case of preceding clause (A) and
not used in the case of preceding clause (B) shall be applied on the date which
is the first anniversary of the date of the respective Recovery Event in the
case of clause (A) above or the date occurring 18 months after the date of the
respective Recovery Event in the case of clause (B) above as a mandatory
repayment of principal of the then outstanding Term Loans.
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(B) Application:
(a) With respect to each repayment of Loans required by this Section 4.02,
the Borrowers may designate the Types of Loans which are to be repaid and, in
the case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to
which made, provided that: (i) repayments of Eurodollar Loans pursuant to this
Section 4.02 may only be made on the last day of an Interest Period applicable
thereto unless all Eurodollar Loans with Interest Periods ending on such date of
required repayment and all Base Rate Loans have been paid in full; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than the Minimum Borrowing Amount applicable thereto, then such Borrowing
shall be converted at the end of the then current Interest Period into a
Borrowing of Base Rate Loans; and (iii) each repayment of Loans required by this
Section 4.02 shall, except as otherwise expressly set forth in Section
4.02(A)(a), be applied pro rata among such Loans. In the absence of a
designation by the Borrowers as described in the preceding sentence, the
Administrative Agent shall, subject to the above, make such designation in its
sole discretion with a view, but no obligation, to minimize breakage costs owing
under Section 1.11.
(b) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, (i) all the outstanding Term Loans shall be repaid in full on the
Term Loan Maturity Date, (ii) all then outstanding Revolving Loans shall be
repaid in full on the Revolving Loan Maturity Date and (iii) all then
outstanding Swingline Loans shall be repaid on the Swingline Expiry Date.
4.03 Method and Place of Payment. Except as otherwise specifically provided
herein, all payments under this Agreement or any Note shall be made to the
Administrative Agent for the account of the Bank or Banks entitled thereto not
later than 12:00 Noon (New York time) on the date when due and shall be made in
Dollars in immediately available funds at the Payment Office of the
Administrative Agent. Any payments received by the Administrative Agent after
such time shall be deemed to have been received on the next Business Day.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension.
4.04 Net Payments. (a) All payments made by the Borrowers hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Bank pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Bank is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imports,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrowers jointly and
severally agree to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or in such Note.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrowers agree to reimburse each Bank, upon the written request
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of such Bank, for taxes imposed on or measured by the net income or net profits
of such Bank pursuant to the laws of the jurisdiction in which the principal
office or applicable lending office of such Bank is located or under the laws of
any political subdivision or taxing authority of any such jurisdiction in which
the principal office or applicable lending office of such Bank is located and
for any withholding of income or similar taxes imposed by the United States of
America as such Bank shall determine are payable by, or withheld from, such Bank
in respect of such amounts so paid to or on behalf of such Bank pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Bank pursuant to this sentence. The Borrowers will furnish to the Administrative
Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts evidencing such payment by the
Borrowers. The Borrowers jointly and severally agree to indemnify and hold
harmless each Bank, and reimburse such Bank upon its written request, for the
amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) agrees to deliver to the Borrowers and the
Administrative Agent on or prior to the Third Restatement Effective Date (or the
Fourth Restatement Effective Date in the case of such Banks that first become
party hereto on the Fourth Restatement Effective Date), or in the case of a Bank
that is an assignee or transferee of an interest under this Agreement pursuant
to Section 1.13 or 13.04 (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note, or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Bank agrees that from time to time after the
Fourth Restatement Effective Date, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Borrowers and the Administrative Agent
two new accurate and complete original signed copies of Internal Revenue Service
Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate, as the
case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or it shall immediately notify the Borrowers and the
Administrative Agent of its inability to deliver any such Form or Certificate.
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 13.04(b) and the immediately succeeding sentence, (x) the
Borrowers shall be entitled, to the extent they are required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrowers U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrowers
shall not be obligated pursuant to Section 4.04(a) hereof to gross-up payments
to be made to a Bank in respect of income or similar taxes imposed by the United
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States if (I) such Bank has not provided to the Borrowers the Internal Revenue
Service Forms required to be provided to the Borrowers pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such forms do not establish a
complete exemption from withholding of such taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
4.04 and except as set forth in Section 13.04(b), the Borrowers agree to pay
additional amounts and to indemnify each Bank in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any amounts deducted or withheld by it
as described in the immediately preceding sentence as a result of any changes
after the Fourth Restatement Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.
(c) The provisions of this Section 4.04 are subject to the provisions of
Section 13.15 (to the extent applicable).
SECTION 5. Conditions Precedent to the Fourth Restatement Effective Date.
The occurrence of the Fourth Restatement Effective Date, and the obligation of
each Bank to make Loans, and the obligation of each Issuing Bank to issue
Letters of Credit, on the Fourth Restatement Effective Date, is subject at the
time of the making of such Loans or the issuance of such Letters of Credit to
the satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Fourth Restatement
Effective Date (i) this Agreement shall have been executed and delivered as
provided in Section 13.10, (ii) there shall have been delivered to the
Administrative Agent for the account of each of the Banks which has a Revolving
Loan Commitment that is increased on the Fourth Restatement Effective Date from
the Revolving Loan Commitment (if any) of such Bank before giving effect to the
occurrence of the Fourth Restatement Effective Date, the appropriate Revolving
Note executed by the Borrowers, in each case in the amount, maturity and as
otherwise provided herein, and (iii) there shall have been delivered to the
Administrative Agent for the account of BTCo the Swingline Note executed by the
Borrowers, in each case in the amount, maturity and as otherwise provided
herein.
5.02 Fees, etc. On the Fourth Restatement Effective Date, all costs, fees
and expenses (including, without limitation, legal fees and expenses) payable to
the Agents and the Banks shall have been paid to the extent then due.
5.03 Opinions of Counsel. On the Fourth Restatement Effective Date, the
Administrative Agent shall have received (i) from the General Counsel to
Furniture Brands and its Restricted Subsidiaries, an opinion addressed to the
Agents and each of the Banks and dated the Fourth Restatement Effective Date
covering the matters set forth in Exhibit E.
5.04 Corporate Documents; Proceedings; etc. (a) On the Fourth Restatement
Effective Date, the Administrative Agent shall have received a certificate,
dated the Fourth Restatement Effective Date, signed by an Authorized
Representative of the Borrowers and each Subsidiary of the Borrowers which is to
become a Credit Party on the Fourth Restatement Effective Date (excluding any
such Person which was a Credit Party on the Third Restatement Effective Date),
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and attested to by another Authorized Representative of such respective Person,
in the form of Exhibit F with appropriate insertions, together with copies of
the certificate of incorporation and by-laws of such respective Person, and the
resolutions of such respective Person referred to in such certificate, and the
foregoing shall be reasonably acceptable to the Agents.
(b) On the Fourth Restatement Effective Date, the Administrative Agent
shall have received bring-down certificates of all Credit Parties (x) certifying
that there were no changes, or providing the text of any changes, to the
Certificate of Incorporation and By-Laws of such Credit Parties as delivered
pursuant to Section 5.04 of the Original Credit Agreement, Section 5.04 of the
First Restated Credit Agreement, Section 5.04 of the Second Restated Credit
Agreement or Section 5.04 of the Existing Credit Agreement, as the case may be,
(y) to the effect that each such Credit Party is in good standing in its
respective state of incorporation and in those states where each such Credit
Party conducts business and (z) providing the resolutions adopted by each such
Credit Party with respect to the actions contemplated in this Agreement
(including without limitation with respect to the amendment and restatement of
this Agreement, and the obligations of such Credit Party with respect to the
increased extensions of credit pursuant hereto) and the foregoing shall be
reasonably acceptable to the Agents in their reasonable discretion.
(c) All corporate and legal proceedings and all instruments and agreements
in connection with the transactions contemplated by this Agreement and the other
Documents shall be reasonably satisfactory in form and substance to the
Administrative Agent and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams, if any, which the Administrative Agent reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities.
5.05 Collective Bargaining Agreements; Permitted Debt Agreements; Tax
Sharing Agreements. On or prior to the Fourth Restatement Effective Date, the
Administrative Agent shall have received (i) a certification from an Authorized
Representative of Furniture Brands that all agreements and plans referenced in
Section 5.05(a) of the Original Credit Agreement, Section 5.05(a) of the First
Restated Credit Agreement, Section 5.05(a) of the Second Restated Credit
Agreement and Section 5.05(a) of the Existing Credit Agreement, as the case may
be, previously delivered to the Administrative Agent by each Credit Party,
remain in full force and effect (or specifying which of such agreements and
plans do not remain in full force and effect) and (ii) any amendments thereto or
additional such agreements.
5.06 Solvency; Environmental Analyses; Insurance Matters. On or prior to
the Fourth Restatement Effective Date, the Borrowers shall cause to be delivered
to the Administrative Agent (i) a solvency certificate from the Chief Financial
Officer of Furniture Brands, in the form of Exhibit G hereto, setting forth his
conclusions that, after giving effect to the Transaction and the incurrence of
all the financings contemplated herein, Furniture Brands and its Subsidiaries
(on a consolidated basis), is not insolvent, and has not been rendered insolvent
by the Indebtedness in connection therewith, will not be left with unreasonably
small capital with which to engage in its and/or their businesses and will not
have incurred debts beyond its and/or their ability to pay such debts as they
mature, (ii) such environmental updates as may have been requested by the
Administrative Agent, the results of which will be in scope, form and substance
acceptable to the Agents, and (iii) evidence of insurance complying with the
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requirements of Section 8.03 for the business and properties of Furniture Brands
and its Restricted Subsidiaries, in scope, form and substance reasonably
satisfactory to the Agents and naming the Collateral Agent as an additional
insured and/or loss payee, and stating that such insurance shall not be
cancelled or revised without 30 days' prior written notice by the insurer to the
Administrative Agent.
5.07 Subsidiary Guaranty. On or prior to the Fourth Restatement Effective
Date, each Subsidiary Guarantor shall have duly authorized, executed and
delivered the Fourth Amended and Restated Subsidiary Guaranty in the form of
Exhibit H hereto (as modified, supplemented or amended from time to time, the
"Subsidiary Guaranty").
5.08 Pledge Agreement. On or prior to the Fourth Restatement Effective
Date, each Credit Party shall have duly authorized, executed and delivered the
Fourth Amended and Restated Pledge Agreement in the form of Exhibit I (as
modified, supplemented or amended from time to time, the "Pledge Agreement") and
shall have delivered to the Collateral Agent, as Pledgee, all the Pledged
Securities referred to therein then owned by such Credit Party, (x) endorsed in
blank in the case of promissory notes constituting Pledged Securities and (y)
together with executed and undated stock powers, in the case of capital stock
constituting Pledged Securities.
5.09 Security Agreement. On or prior to the Fourth Restatement Effective
Date, each Credit Party shall have duly authorized, executed and delivered the
Fourth Amended and Restated Security Agreement in the form of Exhibit J (as
modified, supplemented or amended from time to time, the "Security Agreement")
covering all of such Credit Party's present and future Security Agreement
Collateral, together with:
(a) proper Financing Statements or amendments thereto (Form UCC-1 or UCC-3,
respectively) fully executed for filing under the UCC or other appropriate
filing offices of each jurisdiction as may be necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect (or maintain the
perfection of) the security interests purported to be created (or maintained) by
the Security Agreement;
(b) certified copies of Requests for Information or Copies (Form UCC-11),
or equivalent reports, listing all effective financing statements that name any
Credit Party as debtor and that are filed in the jurisdictions referred to in
clause (a) above, together with copies of such other financing statements (none
of which shall cover the Collateral except to the extent evidencing Permitted
Liens or in respect of which the Collateral Agent shall have received
termination statements (Form UCC-3) or such other termination statements as
shall be required by local law) fully executed for filing;
(c) evidence of the completion of all other recordings and filings of, or
with respect to, the Security Agreement as may be necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect (or maintain
the perfection of) the security interests intended to be created (or maintained)
by the Security Agreement;
(d) lockbox agreements and other agreements from deposit banks utilized
pursuant to the Cash Management System, recognizing the security interests
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granted pursuant thereto and directing payments from deposit accounts to be made
to the Concentration Account; and
(e) evidence that all other actions necessary or, in the reasonable opinion
of the Collateral Agent, desirable to perfect and protect (or maintain the
perfection of) the security interests purported to be created (or maintained) by
the Security Agreement have been taken.
5.10 Receivables Facility. (a) On or prior to the Fourth Amendment
Restatement Effective Date, the Receivables Facility shall have been terminated,
all loans and notes with respect thereto shall have been repaid in full,
together with interest thereon, and all other amounts (including premiums) owing
pursuant to the Receivables Facility shall have been repaid in full and all
documents in respect of the Receivables Facility and all guarantees with respect
thereto shall have been terminated (except as to indemnification provisions
which may survive to the extent provided therein) and be of no further force and
effect. Without limiting the foregoing, the parties to the Receivables Facility
Intercreditor Agreement shall have executed and delivered an agreement relating
thereto which acknowledges and agrees that the Receivables Facility
Intercreditor Agreement is terminated, which agreement shall be in form and
substance satisfactory to the Administrative Agent.
(b) On or prior to the Fourth Restatement Effective Date, the creditors in
respect of the Receivables Facility shall have terminated and released any and
all security interests and liens on the assets owned by the Borrowers and their
respective Subsidiaries (including the Receivables Subsidiary). The
Administrative Agent shall have received such releases of security interests in
and liens on the assets owned by the Borrowers and their respective Subsidiaries
(including the Receivables Subsidiary) as may have been reasonably requested by
the Administrative Agent, which releases shall be in form and substance
reasonably satisfactory to the Administrative Agent. Without limiting the
foregoing, there shall have been delivered (i) proper termination statements
(Form UCC-3 or the appropriate equivalent) for filing under the UCC of such
jurisdiction where a financing statement (Form UCC-1 or the appropriate
equivalent) was filed with respect to Borrowers and their respective
Subsidiaries (including the Receivables Subsidiary), in connection with the
security interests created with respect to the Receivables Facility and the
documentation related thereto and (ii) all collateral owned by the Receivables
Subsidiary in the possession of any creditors in respect of the Receivables
Facility or any collateral agent or trustee under any related security document
shall have been returned to the Receivables Subsidiary.
(c) On or prior to the Fourth Restatement Effective Date, the Receivables
Subsidiary shall have been liquidated.
(d) The Administrative Agent shall have received evidence, in form and
substance reasonably satisfactory to it, that the matters set forth in this
Section 5.10 have been satisfied as of the Fourth Restatement Effective Date.
5.11 Consent Letter. On or prior to the Fourth Restatement Effective Date,
the Administrative Agent shall have received a letter from CT Corporation
System, presently located at 1633 Broadway, New York, New York 10019,
substantially in the form of Exhibit K, indicating its consent to its
appointment by each Credit Party as its agent to receive service of process as
specified in Section 13.08 or in the respective Security Document.
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5.12 Adverse Change; Governmental Approvals; etc. (a) On the Fourth
Restatement Effective Date, nothing shall have occurred (and the Banks shall
have become aware of no facts, conditions or other information not previously
known) which the Agents reasonably believe could have a material adverse effect
on the rights or remedies of the Administrative Agent or the Banks, or on the
ability of the Credit Parties to perform their respective obligations to the
Administrative Agent and the Banks or which the Agents reasonably believe would
have a material adverse effect on the operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrowers taken as a
whole or the Borrowers and their Restricted Subsidiaries taken as a whole.
(b) On the Fourth Restatement Effective Date, there shall not have occurred
and be continuing material adverse change to the syndication market for credit
facilities similar in nature to this Agreement and there shall not have occurred
and be continuing a material disruption of or a material adverse change in
financial, banking or capital markets that would have a material adverse effect
on the syndication, in each case as determined by the Administrative Agent in
its sole discretion.
(c) On or prior to the Fourth Restatement Effective Date, all necessary and
material governmental (domestic and foreign) and third party approvals in
connection with the Transaction shall have been obtained and remain in effect,
and all applicable waiting periods shall have expired without any action being
taken by any competent authority which restrains, prevents or imposes materially
adverse conditions upon the consummation of the Transaction. Additionally, there
shall not exist any judgment, order, injunction or other restraint issued or
filed or a hearing seeking injunctive relief or other restraint pending or
notified prohibiting or imposing materially adverse conditions upon the making
of any Loan, issuance of any Letter of Credit or the consummation of the
Transaction.
5.13 Litigation. On the Fourth Restatement Effective Date, no litigation by
any entity (private or governmental) shall be pending or threatened with respect
to the Transaction or any documentation executed in connection therewith
(including any Credit Document), or which the Administrative Agent or the
Required Banks shall reasonably believe could have a materially adverse effect
on the Transaction or the business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the Borrowers
taken as a whole or the Borrowers and their Restricted Subsidiaries taken as a
whole.
5.14 Financial Statements; Pro Forma Financial Statements; Projections. On
or prior to the Fourth Amendment Effective Date, the Administrative Agent shall
have received true and correct copies of the financial statements (including the
pro forma financial statements) and Projections referred to in Section 7.05(a)
and (e), which pro forma financial statements and Projections shall be
satisfactory in form and substance to the Agents.
5.15 Refinancing; Existing Credit Agreement; etc. On the Fourth Restatement
Effective Date, (i) all outstanding Revolving Loans (as contemplated by the last
sentence of Section 1.01(b)) and all outstanding Swingline Loans shall be repaid
in full (although Revolving Loans may be incurred hereunder on the Fourth
Restatement Effective Date in accordance with the provisions hereof) and, if any
such then outstanding Revolving Loans were at such time maintained as Eurodollar
Loans, all breakage or similar costs owing in connection therewith shall have
been paid as contemplated by Section 1.11 of the Existing Credit Agreement, (ii)
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all outstanding Term Loans shall continue to be outstanding on, and immediately
after giving effect to, the Fourth Restatement Effective Date, (iii) all accrued
interest and all regularly accruing fees pursuant to the Existing Credit
Agreement shall be repaid in full on, and through, the Fourth Restatement
Effective Date (whether or not same would otherwise be then due and payable
pursuant to the Existing Credit Agreement) and (iv) the Administrative Agent
shall have received evidence in form, scope and substance satisfactory to it
that the matters set forth in this Section 5.15 have been satisfied on such
date.
5.16 Officer's Certificate. On the Fourth Restatement Effective Date, the
Administrative Agent shall have received a certificate, dated the Fourth
Restatement Effective Date, and signed on behalf of the Borrowers by an
Authorized Representative, stating that all conditions in Sections 5.04, 5.05,
5.10, 5.15 and 6.01 have been satisfied on such date.
5.17 Mortgage Amendments; etc. On or prior to the Fourth Restatement
Effective Date, the Collateral Agent shall have received:
(i) fully executed counterparts of amendments (the "Mortgage Amendments"),
in form and substance satisfactory to the Administrative Agent and the
Required Banks, to each of the Existing Mortgages, together with evidence
that counterparts of each of the Mortgage Amendments have been delivered to
the title company insuring the lien of the Existing Mortgages for recording
in all places to the extent necessary or desirable, in the judgment of the
Collateral Agent, effectively to maintain a valid and enforceable first
priority mortgage lien (subject to Permitted Encumbrances relating thereto)
on the Existing Mortgaged Properties in favor of the Collateral Agent (or
such other trustee as may be required or desired under local law) for the
benefit of the Secured Creditors; and
(ii) endorsements reasonably satisfactory to the Collateral Agent to
each Existing Mortgage Policy assuring the Collateral Agent that each
Existing Mortgage is a valid and enforceable first priority mortgage lien
on the respective Existing Mortgaged Properties, free and clear of all
defects and encumbrances except Permitted Encumbrances.
SECTION 6. Conditions Precedent to All Credit Events. The obligation of
each Bank to make Loans (including Loans made on the Fourth Restatement
Effective Date but excluding Mandatory Borrowings made thereafter, which shall
be made as provided in Section 1.01(d)), and the obligation of an Issuing Bank
to issue any Letter of Credit, is subject, at the time of each such Credit Event
(except as hereinafter indicated), to the satisfaction of the following
conditions:
6.01 No Default; Representations and Warranties. At the time of each such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the making
of each Loan (excluding Swingline Loans), the Administrative Agent shall have
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received the notice required by Section 1.03(a). Prior to the making of each
Swingline Loan, BTCo shall have received the notice required by Section
1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the respective Issuing Bank shall have received a Letter of Credit
Request meeting the requirements of Section 2.03.
The acceptance of the benefit of each Credit Event shall constitute a
representation and warranty by the Borrowers to the Agents and each of the Banks
that all the conditions specified in Section 5 and in this Section 6 and
applicable to such Credit Event exist as of that time (except to the extent that
any of the conditions specified in Section 5 are required to be satisfactory to
or determined by any Bank, the Required Banks and/or the Administrative Agent).
All of the Notes, certificates, legal opinions and other documents and papers
referred to in Section 5 and in this Section 6, unless otherwise specified,
shall be delivered to the Administrative Agent at the Notice Office for the
account of each of the Banks and, except for the Notes, in sufficient
counterparts or copies for each of the Banks and shall be in form and substance
reasonably satisfactory to the Banks.
SECTION 7. Representations, Warranties and Agreements. In order to induce
the Banks to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, each of the Borrowers
makes the following representations, warranties and agreements, in each case
after giving effect to the Transaction consummated on the Fourth Restatement
Effective Date, all of which shall survive the execution and delivery of this
Agreement and the Notes and the making of the Loans and issuance of the Letters
of Credit, with the occurrence of each Credit Event on or after the Fourth
Restatement Effective Date being deemed to constitute a representation and
warranty that the matters specified in this Section 7 are true and correct in
all material respects on and as of the Fourth Restatement Effective Date and on
the date of each such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
7.01 Corporate Status. Furniture Brands and each of its Restricted
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in each
jurisdiction where the conduct of its business requires such qualifications,
except for failures to be so qualified which, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect.
7.02 Corporate Power and Authority. Each Credit Party has the corporate
power and authority to execute, deliver and perform the terms and provisions of
each of the Documents to which it is party and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of each of
such Documents. Each Credit Party has duly executed and delivered each of the
Documents to which it is party, and each of such Documents constitutes the
legal, valid and binding obligation of such Credit Party enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
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or other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by any
Credit Party of the Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, (i) will contravene any provision of any
applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants, conditions
or provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Security Documents) upon any of the material properties or assets of
Furniture Brands or any of its Restricted Subsidiaries pursuant to the terms of
any indenture, mortgage, deed of trust, credit agreement or loan agreement, or
any other material agreement, contract or instrument, to which Furniture Brands
or any of its Restricted Subsidiaries is a party or by which it or any of its
property or assets is bound or to which it may be subject or (iii) will violate
any provision of the Certificate of Incorporation or By-Laws of Furniture Brands
or any of its Restricted Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except (i) as have been obtained or made prior to the Fourth Restatement
Effective Date and (ii) other than UCC-1 or UCC-3 filings and recordings of
Assignments of Security Interests in U.S. Patents and Trademarks, in each case,
performed pursuant to Section 5.09, which filings and/or recordings, as the case
may be, if this representation is being made on a date which is more than ten
days after the Fourth Restatement Effective Date, have been made), or exemption
by, any governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with, (i) the execution,
delivery and performance of any Document or (ii) the legality, validity, binding
effect or enforceability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc. (a) The consolidated and consolidating statements of financial
condition of Furniture Brands and its Subsidiaries for the Fiscal Year ended on
December 31, 1997 and the three-month period ended on March 31, 1998,
respectively, and the related consolidated and consolidating statements of
income and consolidated statements of cash flow and changes in shareholders'
equity of Furniture Brands and its Subsidiaries for the Fiscal Year or
three-month period ended on such dates, as the case may be, and furnished to the
Banks prior to the Fourth Restatement Effective Date in each case, present
fairly the financial condition of Furniture Brands and its Subsidiaries (or
Furniture Brands and its Restricted Subsidiaries, as the case may be) at the
date of such statements of financial condition and the results of the operations
of Furniture Brands and its Subsidiaries (or Furniture Brands and its Restricted
Subsidiaries as the case may be) for the respective Fiscal Year or fiscal
quarter, as the case may be (subject, in the case of unaudited financial
statements, to normal year-end adjustments). All of the foregoing financial
statements have been prepared in accordance with generally accepted accounting
principles and practices consistently applied, except, in the case of the
quarterly financial statements, for the omission of footnotes, and certain
reclassifications and ordinary end of period adjustments and accruals (all of
which are of a recurring nature and none of which individually, or in the
aggregate, would be material). The pro forma consolidated statements of
financial condition of Furniture Brands and its Subsidiaries, in each case after
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giving effect to the Transaction and the financing therefor, copies of which
have been furnished to the Banks prior to the Fourth Restatement Effective Date,
present fairly in all material respects the pro forma consolidated financial
condition of Furniture Brands and its Subsidiaries as of March 31, 1998.
(b) Since December 31, 1997 there has been no material adverse change in
the business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrowers taken as a whole or of the Borrowers
and their Restricted Subsidiaries taken as a whole, it being understood that any
determination of whether such material adverse change has occurred shall take
into account, inter alia, (x) any available indemnities and (y) the timing and
likelihood of payment thereunder.
(c) (i) On and as of the Fourth Restatement Effective Date, after giving
effect to the Transaction and to all Indebtedness (including the Loans) being
incurred or assumed and Liens created (or maintained) by the Credit Parties in
connection therewith (assuming the full utilization of all Revolving Loan
Commitments on the Fourth Restatement Effective Date), (a) the sum of the
assets, at a fair valuation, of each Borrower, individually, each Borrower and
its Subsidiaries, (each of the foregoing, as to itself or as to itself and its
Subsidiaries, a "Solvent Entity") will exceed its or their debts; (b) each
Solvent Entity has not incurred and does not intend to incur, and does not
believe that it will incur, debts beyond its ability to pay such debts as such
debts mature; and (c) each Solvent Entity will have sufficient capital with
which to conduct its businesses. For purposes of this Section 7.05(c), "debt"
means any liability on a claim, and "claim" means (i) right to payment, whether
or not such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured,
or unsecured or (ii) right to an equitable remedy for breach of performance if
such breach gives rise to a right to payment, whether or not such right to an
equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured,
disputed, undisputed, secured or unsecured.
(d) Except as fully disclosed in the financial statements referred to in
Section 7.05(a) or in Schedule IV, there were as of the Fourth Restatement
Effective Date no liabilities or obligations with respect to Furniture Brands or
any of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either individually or in
aggregate, is reasonably likely to have a Material Adverse Effect. As of the
Fourth Restatement Effective Date, none of the Borrowers knows of any basis for
the assertion against it of any liability or obligation of any nature whatsoever
that is not fully disclosed in the financial statements referred to in Section
7.05(a) or as disclosed in Schedule IV hereto which, either individually or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
(e) On and as of the Fourth Restatement Effective Date, the projections
previously delivered to the Administrative Agent and the Banks (the
"Projections") have been prepared on a basis consistent with the financial
statements referred to in Section 7.05(a) (other than as set forth or presented
in such Projections), and there are no statements or conclusions in any of the
Projections which are based upon or include information known to the Borrowers
to be misleading in any material respect or which fail to take into account
material information regarding the matters reported therein. On the Fourth
Restatement Effective Date, the Borrowers believed that the Projections were
reasonable and attainable.
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7.06 Litigation. There are no actions, suits or proceedings pending or, to
the best knowledge of the Borrowers, threatened (i) with respect to any Document
or (ii) that could reasonably be expected to have a Material Adverse Effect.
7.07 True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of Furniture Brands or any of its Subsidiaries
in writing to the Administrative Agent or any Bank (including, without
limitation, all factual information contained in the Documents) for purposes of
or in connection with this Agreement, the other Credit Documents or any
transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of Furniture
Brands or any of its Subsidiaries in writing to the Administrative Agent or any
Bank will be, true and accurate in all material respects on the date as of which
such information is dated or certified and not incomplete by omitting to state
any fact necessary to make such information (taken as a whole) not misleading in
any material respect at such time in light of the circumstances under which such
information was provided.
7.08. Use of Proceeds; Margin Regulations. (a) All proceeds of the Term
Loans were used as required by the Existing Credit Agreement
(b) All proceeds of the Revolving Loans and Swingline Loans have been, and
shall be, used for the Borrowers' and their Subsidiaries' ongoing general
corporate purposes.
(c) The value of the Margin Stock at any time owned by the Borrowers and
their respective Subsidiaries does not, and will not, exceed 25% of the value of
the assets of the Borrowers and their Subsidiaries taken as a whole. Neither the
making of any Loan nor the use of the proceeds thereof nor the occurrence of any
other Credit Event will violate or be inconsistent with the provisions of
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Each of Furniture Brands and its Restricted
Subsidiaries have timely filed or caused to be timely filed, on the due dates
thereof or within applicable grace periods (inclusive of any permitted
extensions), with the appropriate taxing authority, all Federal, state and other
material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of Furniture Brands and its Restricted Subsidiaries. The Returns accurately
reflect in all material respects all liability for taxes of Furniture Brands and
its Restricted Subsidiaries for the periods covered thereby other than Taxes for
which adequate reserves have been established in accordance with generally
accepted accounting principles. Each of Furniture Brands and its Restricted
Subsidiaries have paid all material taxes payable by them other than taxes which
are not delinquent, and other than those contested in good faith and for which
adequate reserves have been established in accordance with generally accepted
accounting principles. Except as disclosed in the financial statements referred
to in Section 7.05(a) or (b) and except as disclosed on Schedule V, there is, as
of the Fourth Restatement Effective Date, no material action, suit, proceeding,
investigation, audit, or claim now pending or, to the best knowledge of the
Borrowers, threatened by any authority regarding any taxes relating to Furniture
Brands or its Restricted Subsidiaries. As of the Fourth Restatement Effective
Date, except as set forth on Schedule V, none of Furniture Brands or its
Restricted Subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of Furniture Brands
or its Restricted Subsidiaries, or is aware of any circumstances that would
cause the taxable years or other taxable periods of Furniture Brands or its
Restricted Subsidiaries not to be subject to the normally applicable statute of
limitations. As of the Fourth Restatement Effective Date, none of Furniture
Brands or its Restricted Subsidiaries has provided, with respect to themselves
or property held by them, any consent under Section 341 of the Code. Except for
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amounts specifically set forth in Schedule V, none of Furniture Brands or its
Restricted Subsidiaries has incurred, or will incur, any material tax liability
in connection with the Transaction and the other transactions contemplated
hereby. Additionally, all of the foregoing representations are true and correct
as to all Unrestricted Subsidiaries of Furniture Brands (to the same extent they
were Restricted Subsidiaries) except to the extent any and all failures to be
true and correct could not reasonably be expected to have a Material Adverse
Effect. Notwithstanding anything to the contrary contained above, to the extent
the foregoing representations contained in this Section 7.09 relate to
Thomasville and its Subsidiaries for periods prior to the First Restatement
Effective Date, such representations shall be deemed untrue only if the
aggregate effect of all such failures and noncompliances of the types described
above with respect to Thomasville and its Subsidiaries for periods prior to the
First Restatement Effective Date would reasonably be expected to have a Material
Adverse Effect.
7.10 Compliance with ERISA. (a) Each Plan is in substantial compliance with
ERISA and the Code; no Reportable Event has occurred with respect to a Plan; to
the best knowledge of the Borrowers, no Multiemployer Plan is insolvent or in
reorganization; no Plan has an Unfunded Current Liability; no Plan, and to the
best knowledge of the Borrowers, no Spunoff Plan, has an accumulated or waived
funding deficiency, or has applied for an extension of any amortization period
within the meaning of Section 412 of the Code; all contributions required to be
made by the Borrowers, any of their respective Restricted Subsidiaries or any
ERISA Affiliate with respect to a Plan, a Spunoff Plan, a Multiemployer Plan,
and/or a Foreign Pension Plan have been timely made; none of the Borrowers or
any of their respective Restricted Subsidiaries nor any ERISA Affiliate has
incurred any liability to or on account of a Plan, a Spunoff Plan, and/or a
Multiemployer Plan pursuant to Section 409, 502(i), 502(1), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or
4980 of the Code or reasonably expects to incur any liability (including any
indirect, contingent or secondary liability) under any of the foregoing Sections
with respect to any Plan, a Spunoff Plan, and/or a Multiemployer Plan; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Plan and, to the best knowledge of the Borrowers, any Spunoff Plan; no
condition exists which presents a risk to the Borrowers or any of their
respective Restricted Subsidiaries or any ERISA Affiliate of incurring a
liability to or on account of a Plan, or to the best knowledge of the Borrowers
a Spunoff Plan, and/or a Multiemployer Plan pursuant to the foregoing provisions
of ERISA and the Code; using actuarial assumptions and computation methods
consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of the Borrowers, their respective Restricted Subsidiaries and their
ERISA Affiliates to all Multiemployer Plans in the event of a complete
withdrawal therefrom, as of the close of the most recent fiscal year of each
such Multiemployer Plan ended prior to the date of the most recent Credit Event,
would not exceed $50,000; no lien imposed under the Code or ERISA on the assets
of the Borrowers or any of their respective Restricted Subsidiaries or any ERISA
Affiliate exists on account of any Plan, a Spunoff Plan, and/or a Multiemployer
Plan or is likely to arise on account of any Plan, or to the best knowledge of
the Borrowers, is likely to arise on account of any Spunoff Plan and/or
Multiemployer Plan; and the Borrowers and their respective Restricted
Subsidiaries do not maintain or contribute to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) which provides benefits to retired
employees or other former employees (other than as required by Section 601 of
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ERISA) or any employee pension benefit plan (as defined in Section 3(2) of
ERISA) the obligations with respect to which could reasonably be expected to
have a Material Adverse Effect. For purposes of this Section 7.10(a) "to the
best knowledge of the Borrowers" with respect to any Spunoff Plan means (x)
actual knowledge or (y) knowledge acquired through written or oral notice
provided directly to a Borrower by any governmental agency, court, or Spunoff
Plan administrator.
(b) Each Foreign Pension Plan has been maintained in substantial compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities. None of the Borrowers
nor any of their respective Restricted Subsidiaries has incurred any obligation
in connection with the termination of or withdrawal from any Foreign Pension
Plan. The present value of the accrued benefit liabilities (whether or not
vested) under each Foreign Pension Plan, determined as of the end of each
Borrower's most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
(c) Notwithstanding anything to the contrary in this Section 7.10, the
representations made in this Section 7.10 shall only be untrue if the aggregate
effect of all failures and noncompliances of the types described above could
reasonably be expected to have a Material Adverse Effect.
7.11 The Security Documents. (a) The provisions of the Security Agreement
are effective to create (or maintain) in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Security Agreement, upon the
filing of Form UCC-1 or UCC-3 financing statements or the appropriate equivalent
(which filings, if this representation is being made more than 10 days after the
Fourth Restatement Effective Date, have been made), create (or maintain) a fully
perfected first lien on, and security interest in, all right, title and interest
in all of the Security Agreement Collateral described therein, to the extent
that a security interest may be perfected therein by filing a financing
statement under the UCC, subject to no other Liens other than Permitted Liens.
The recordation of the Assignment of Security Interest in U.S. Patents and
Trademarks in the form attached to the Security Agreement in the United States
Patent and Trademark Office together with filings on Form UCC-1 or UCC-3 made
pursuant to the Security Agreement will be effective, under applicable law, to
perfect the security interest granted to the Collateral Agent in the trademarks
and patents covered by the Security Agreement. Each of the Credit Parties party
to the Security Agreement has good and valid title to all Security Agreement
Collateral owned by such Credit Party described therein, free and clear of all
Liens except those described above in this clause (a).
(b) The security interests created in favor of the Collateral Agent, as
Pledgee, for the benefit of the Secured Creditors under the Pledge Agreement
constitute first priority perfected security interests in the Pledged Securities
described in the Pledge Agreement, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect (or maintain
the perfection or priority of) the security interests created in the Pledged
Securities and the proceeds thereof under the Pledge Agreement.
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(c) Until such time (if any) as the Mortgages are released in accordance
with the provisions of Section 13.20, the Mortgages create, as security for the
obligations purported to be secured thereby, a valid and enforceable perfected
security interest in and mortgage lien on all of the Mortgaged Properties in
favor of the Collateral Agent (or such other trustee as may be required or
desired under local law) for the benefit of the Secured Creditors, superior to
and prior to the rights of all third persons (except that the security interest
and mortgage lien created in the Mortgaged Properties may be subject to the
Permitted Encumbrances related thereto) and subject to no other Liens (other
than Permitted Liens). Schedule III contains a true and complete list of each
parcel of Real Property owned or leased by Furniture Brands and its Restricted
Subsidiaries on the Fourth Restatement Effective Date (and indicates which of
said Real Properties constitute Existing Mortgaged Properties), and the type of
interest therein held by Furniture Brands or such Restricted Subsidiary.
Furniture Brands and each of its Restricted Subsidiaries have good and
indefeasible title to all fee-owned Mortgaged Properties and valid leasehold
title to all Leaseholds material to its business, in each case free and clear of
all Liens except those described in the first sentence of this subsection (c).
7.12 Representations and Warranties in Other Documents. All representations
and warranties set forth in the Documents other than this Agreement were true
and correct in all material respects at the time as of which such
representations and warranties were made (or deemed made) and shall be true and
correct in all material respects as of the Fourth Restatement Effective Date as
if such representations and warranties were made on and as of such date, unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date.
7.13 Properties. Furniture Brands and each of its Restricted Subsidiaries
have good and valid title to all material properties owned by them, including
all property reflected in the balance sheets referred to in Sections 7.05(a)
(except as sold or otherwise disposed of since the date of such balance sheet in
the ordinary course of business or otherwise as permitted hereunder), free and
clear of all Liens, other than (i) as referred to in the balance sheet or in the
notes thereto or in the pro forma balance sheet or (ii) Permitted Liens
otherwise permitted by Section 9.01.
7.14 Capitalization. (a) On the Fourth Restatement Effective Date, the
authorized capital stock of Furniture Brands consists of 100,000,000 shares of
Furniture Brands Common Stock, $1.00 stated value per share, 52,184,653 shares
of which are issued and outstanding as of June 30, 1998. As of the Fourth
Restatement Effective Date, Furniture Brands does not have outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock, in
each case other than the options outstanding pursuant to the Employee Stock
Option Plan.
(b) On the Fourth Restatement Effective Date, the authorized capital stock
of Broyhill consists of 5,296,178 shares of common stock, no par value per
share, 100 shares of which are issued and outstanding and have been delivered
for pledge pursuant to the Pledge Agreement. All such outstanding shares of
common stock have been duly and validly issued, are fully paid and
nonassessable. As of the Fourth Restatement Effective Date, Broyhill does not
have outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
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otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
(c) On the Fourth Restatement Effective Date, the authorized capital stock
of Lane consists of 1,000 shares of common stock, no par value per share, all of
which are issued and outstanding and have been delivered for pledge pursuant to
the Pledge Agreement. All such outstanding shares of common stock have been duly
and validly issued, are fully paid and nonassessable. As of the Fourth
Restatement Effective Date, Lane does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
(d) On the Fourth Restatement Effective Date, the authorized capital stock
of Thomasville consists of 1,000 shares of common stock, $1.00 par value per
share, 1,000 shares of which are issued and outstanding and have been delivered
for pledge pursuant to the Pledge Agreement. All such outstanding shares of
common stock have been duly and validly issued, are fully paid and
nonassessable. As of the Fourth Restatement Effective Date, Thomasville does not
have outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
7.15 Subsidiaries. (a) On the Fourth Restatement Effective Date, Furniture
Brands has no Subsidiaries other than the other Borrowers and their respective
Subsidiaries.
(b) After the Fourth Restatement Effective Date, Furniture Brands will have
no Subsidiaries other than (i) those Subsidiaries listed on Schedule VI and (ii)
new Subsidiaries created in compliance with this Agreement.
7.16 Compliance with Statutes, etc. Furniture Brands and each of its
Subsidiaries are in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of their business and the
ownership of their property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
7.17 Investment Company Act. None of Furniture Brands nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. None of Furniture Brands nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
7.19 Environmental Matters. (a) Furniture Brands and each of its
Subsidiaries have complied with all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the best knowledge of the Borrowers after due inquiry, threatened
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Environmental Claims against Furniture Brands, or any of its Subsidiaries or any
Real Property owned or operated by Furniture Brands or any of its Subsidiaries.
There are no facts, circumstances, conditions or occurrences on any Real
Property owned or operated by Furniture Brands or any of its Subsidiaries or, to
the best knowledge of Furniture Brands or the Borrowers after due inquiry, on
any property adjoining or in the vicinity of any such Real Property that, to the
best knowledge of the Borrowers after due inquiry, could reasonably be expected
(i) to form the basis of an Environmental Claim against Furniture Brands or any
of its Subsidiaries or any such Real Property or (ii) to cause any such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability of such Real Property by Furniture Brands or any of its
Subsidiaries under any applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used, treated
or stored on, or transported to or from, any Real Property owned or operated by
Furniture Brands or any of its Subsidiaries except in compliance with all
applicable Environmental Laws and so as not to give rise to an Environmental
Claim. Hazardous Materials have not at any time been Released on or from any
Real Property owned or operated by Furniture Brands or any of its Subsidiaries
except in compliance with all applicable Environmental Laws and so as not to
give rise to an Environmental Claim.
(c) Notwithstanding anything to the contrary in this Section 7.19, the
representations made in this Section 7.19 shall only be untrue if the aggregate
effect of all failures and noncompliances of the types described above could
reasonably be expected to have a Material Adverse Effect.
7.20 Labor Relations. None of Furniture Brands nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a Material Adverse Effect. There is (i) no unfair labor practice complaint
pending against Furniture Brands or any of its Subsidiaries or, to the best
knowledge of the Borrowers, threatened against any of them, before the National
Labor Relations Board, and no material grievance or material arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against Furniture Brands or any of its Subsidiaries or, to the best
knowledge of the Borrowers, threatened against any of them, (ii) no strike,
labor dispute, slowdown or stoppage pending against Furniture Brands or any of
its Subsidiaries or, to the best knowledge of the Borrowers, threatened against
Furniture Brands or any of its Subsidiaries and (iii) to the best knowledge of
the Borrowers, no union representation proceeding pending with respect to the
employees of Furniture Brands or any of its Subsidiaries, except (with respect
to any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.
7.21 Patents, Licenses, Franchises and Formulas. Furniture Brands and its
Subsidiaries own all material patents, trademarks, permits, service marks, trade
names, copyrights, licenses, franchises and formulas, or rights with respect to
the foregoing, and have obtained assignments of all leases and other rights of
whatever nature, reasonably necessary for the present conduct of their business,
without any known conflict with the rights of others which, or the failure to
obtain which, as the case may be, could reasonably be expected to result in a
Material Adverse Effect.
7.22 Indebtedness. Schedule VII sets forth a true and complete list of all
Indebtedness for borrowed money of Furniture Brands and its Restricted
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Subsidiaries as of the Fourth Restatement Effective Date and which is to remain
outstanding after giving effect to the Transaction (excluding the Loans and the
Letters of Credit , the "Existing Indebtedness"), in each case showing the
aggregate principal amount thereof and the name of the respective borrower and
any other entity which directly or indirectly guaranteed such debt.
7.23 Transaction. At the time of consummation thereof, the Transaction
shall have been consummated in all respects in accordance with the terms of the
respective Documents and all applicable laws. At the time of consummation of the
Transaction, all consents and approvals of, and filings and registrations with,
and all other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Transaction will
have been obtained, given, filed or taken and are or will be in full force and
effect (or effective judicial relief with respect thereto has been obtained).
All applicable waiting periods with respect thereto have or, prior to the time
when required, will have, expired without, in all such cases, any action being
taken by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the Transaction. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Transaction or the occurrence of any Credit Event or the
performance by the Credit Parties of their obligations under the respective
Documents. All actions taken by the Credit Parties pursuant to or in furtherance
of the Transaction have been taken in material compliance with the respective
Documents and all applicable laws.
7.24 Receivables Subsidiary. The Receivables Subsidiary was formed for the
purpose of purchasing, and receiving contributions of, receivables from each of
the Borrowers (other than Furniture Brands) and their respective Restricted
Subsidiaries, and selling such receivables to, or obtaining secured loans from,
the Receivables Purchasers, pursuant to the Receivables Facility and except in
connection with the foregoing (and activities reasonably incidental thereto),
the Receivables Subsidiary engaged in no business activities and had no
significant assets or liabilities and in no event purchased receivables from any
Unrestricted Subsidiary. On the Fourth Amendment Effective Date, and following
the termination of the Receivables Facility, the Receivable Subsidiary has been
liquidated.
SECTION 8. Affirmative Covenants. Each of the Borrowers hereby covenants
and agrees that on and after the Fourth Restatement Effective Date and until the
Total Commitment and all Letters of Credit and Acceptances have terminated and
the Loans, Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Borrowers will furnish to the
Administrative Agent, and the Administrative Agent will promptly forward to each
Bank:
(a) Monthly Reports. Within 30 days after the end of each calendar month of
Furniture Brands (within 45 days after the end of the last month of each Fiscal
Year), the consolidated and consolidating balance sheets of Furniture Brands and
its Subsidiaries, in each case, as at the end of such month, and the related
consolidated and consolidating statements of income and the consolidated
statement of cash flow for such month and for the elapsed portion of the
calendar year ended with the last day of such month, in each case setting forth
comparative figures for the corresponding month in the prior calendar year and
the budgeted figures for such month as set forth in the respective budget
delivered pursuant to Section 8.01(e).
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(b) Quarterly Financial Statements. As soon as available and in any event
within 45 days after the close of each of the first three quarterly accounting
periods in each Fiscal Year, (i) the consolidated and consolidating balance
sheets of Furniture Brands and its Subsidiaries, in each case, as at the end of
such quarterly period and the related consolidated and consolidating statements
of income and the consolidated statement of cash flow for such quarterly period
and for the elapsed portion of the Fiscal Year ended with the last day of such
quarterly period and (ii) management's discussion and analysis of the important
operational and financial developments during such quarterly period.
(c) Annual Financial Statements. Within 95 days after the close of each
Fiscal Year, (i) the consolidated and consolidating balance sheets of Furniture
Brands and its Subsidiaries, in each case, as at the end of such Fiscal Year and
the related consolidated and consolidating statements of income and consolidated
statements of shareholders' equity and cash flow for such Fiscal Year setting
forth comparative figures for the preceding Fiscal Year and (A) certified, in
the case of such consolidated financial statements and (B) confirmed by a
letter, in the case of the consolidating statements, delivered in substantially
the form of the auditor's letter delivered to Furniture Brands on January 28,
1997, in each case by KPMG Peat Marwick or such other independent certified
public accountants of recognized national standing reasonably acceptable to the
Administrative Agent, together with a report of such accounting firm stating
that in the course of its regular audit of the financial statements of Furniture
Brands and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained no
knowledge of any Default or Event of Default which has occurred and is
continuing or, if in the opinion of such accounting firm such a Default or Event
of Default with respect to the covenants set forth in Sections 9.02 through
9.14, inclusive, has occurred and is continuing, a statement as to the nature
thereof and (ii) management's discussion and analysis of the important
operational and financial developments during such Fiscal Year.
(d) Management Letters. Promptly after the receipt thereof by Furniture
Brands or any of its Restricted Subsidiaries, a copy of any "management letter"
received by such Person from their certified public accountants and the
management's responses thereto.
(e) Budgets. No later than 30 days following the commencement of the first
day of each Fiscal Year, a budget in form satisfactory to the Administrative
Agent (including budgeted statements of income and sources and uses of cash and
balance sheets) prepared by Furniture Brands for (x) each of the twelve months
of such Fiscal Year prepared in detail and (y) each of the four Fiscal Years
immediately following such Fiscal Year prepared in summary form, in each case,
of Furniture Brands and its Restricted Subsidiaries, accompanied by the
statement of an Authorized Representative of Furniture Brands to the effect
that, to the best of his knowledge, the budget is a reasonable estimate for the
period covered thereby.
(f) Officer's Certificates. At the time of the delivery of the financial
statements provided for in Section 8.01(a), (b) and (c), a certificate of an
Authorized Representative of Furniture Brands to the effect that, to the best of
such Authorized Representative's knowledge, no Default or Event of Default has
occurred and is continuing or, if any Default or Event of Default has occurred
and is continuing, specifying the nature and extent thereof, which certificate
shall, in the case of any such financial statements delivered in respect of a
period ending on the last day of a fiscal quarter or year of Furniture Brands,
(x) set forth the calculations required to establish whether the Borrowers were
in compliance with the provisions of Sections 4.02(A) (excluding Section
4.02(A)(d)), 9.02, 9.03, 9.04, 9.05 and 9.07 through 9.09, inclusive, and 9.14
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at the end of such fiscal quarter or year, as the case may be, and (y) set forth
the calculation of the Leverage Ratio and Senior Debt Leverage Ratio and the
amount of the Available Basket Amount, the Available Debt Proceeds Amount and
the Consolidated Cumulative 50% Net Income Amount, at the end of the period
covered by such financial statements, and all sources and uses of proceeds
relating to the calculation thereof changing during the period covered by such
statements.
(g) Notice of Default or Litigation. Promptly, and in any event within
three Business Days after an executive officer of any Borrower obtains knowledge
thereof, notice of (i) the occurrence of any event which constitutes a Default
or Event of Default and (ii) any litigation or governmental investigation or
proceeding pending (x) against Furniture Brands or any of its Subsidiaries which
could reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrowers taken as a whole or the Borrowers and their
Restricted Subsidiaries taken as a whole, (y) with respect to any material
Indebtedness of Furniture Brands and its Restricted Subsidiaries taken as a
whole or (z) with respect to any Document.
(h) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and other information and reports, if any, which
Furniture Brands or any of its Restricted Subsidiaries shall file with the
Securities and Exchange Commission or any successor thereto (the "SEC") or
deliver to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within ten
Business Days after, an executive officer of Furniture Brands or any of its
Restricted Subsidiaries obtains knowledge thereof, notice of one or more of the
following environmental matters, unless such environmental matters could not,
individually or when aggregated with all other such environmental matters, be
reasonably expected to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Borrowers taken as a whole or of the Borrowers and their Restricted
Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against Furniture
Brands or any of its Subsidiaries or any Real Property owned or operated by
Furniture Brands or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real Property
owned or operated by Furniture Brands or any of its Subsidiaries that (a)
results in noncompliance by Furniture Brands or any of its Subsidiaries
with any applicable Environmental Law or (b) could reasonably be expected
to form the basis of an Environmental Claim against Furniture Brands or any
of its Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property owned or
operated by Furniture Brands or any of its Subsidiaries that could
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reasonably be expected to cause such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability by
Furniture Brands or any of its Subsidiaries of such Real Property under any
Environmental Law; and
(iv) the taking of any removal or remedial action in response to the
actual or alleged presence of any Hazardous Material on any Real Property
owned or operated by Furniture Brands or any of its Subsidiaries as
required by any Environmental Law or any governmental or other
administrative agency; provided that in any event the Borrowers shall
deliver to each Bank all notices received by them or any of their
respective Subsidiaries from any government or governmental agency under,
or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action, and the
Borrowers' or such Subsidiary's response thereto. In addition, the Borrowers
will provide the Banks with copies of all material communications with any
government or governmental agency relating to Environmental Laws, all
communications with any Person (other than its attorneys) relating to any
Environmental Claim of which notice is required to be given pursuant to this
Section 8.01(i), and such detailed reports of any such Environmental Claim as
may reasonably be requested by the Banks.
(j) Annual Meetings with Banks. At the request of the Administrative Agent,
Furniture Brands shall within 120 days after the close of each Fiscal Year hold
a meeting at a time and place selected by Furniture Brands and reasonably
acceptable to the Administrative Agent with all of the Banks at which meeting
shall be reviewed the financial results of the previous Fiscal Year and the
financial condition of Furniture Brands and the budgets presented for the
current Fiscal Year.
(k) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to Furniture Brands or any of
its Subsidiaries as any Bank may reasonably request in writing.
8.02 Books, Records and Inspections. The Borrowers will, and will cause
each of their respective Restricted Subsidiaries to, keep proper books of record
and account in which full, true and correct entries in conformity with generally
accepted accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. The
Borrowers will, and will cause each of their respective Restricted Subsidiaries
to, permit officers and designated representatives of the Agents or the Required
Banks to visit and inspect, after reasonable notice during regular business
hours and under guidance of officers of the Borrowers or such Restricted
Subsidiary, any of the properties of the Borrowers or such Restricted
Subsidiary, and to examine the books of account of the Borrowers or such
Restricted Subsidiary and discuss the affairs, finances and accounts of the
Borrowers or such Restricted Subsidiary with, and be advised as to the same by,
its and their officers and independent accountants, all at such reasonable times
and intervals and to such reasonable extent as such Agent or such Bank may
request.
8.03 Maintenance of Property; Insurance. (a) Schedule VIII sets forth a
true and complete listing of all insurance (including self-insurance programs)
maintained by Furniture Brands and its Restricted Subsidiaries as of the Fourth
Restatement Effective Date. The Borrowers will, and will cause each of their
respective Restricted Subsidiaries to, (i) keep all property necessary in its
business in good working order and condition (ordinary wear and tear excepted),
(ii) maintain insurance on all its property in at least such amounts and against
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at least such risks as is consistent and in accordance with industry practice
and (iii) furnish to the Administrative Agent, upon written request, full
information as to the insurance carried. In addition to the requirements of the
immediately preceding sentence, the Borrowers will at all times cause insurance
of the types described in Schedule VIII to be maintained (with the same scope of
coverage as that described in Schedule VIII) at levels which are at least as
great as the respective amount described opposite the respective type of
insurance on Schedule VIII under the column headed "Minimum Amount Required to
be Maintained."
(b) Except with respect to self-insurance programs listed on Schedule VIII,
the Borrowers will, and will cause their respective Restricted Subsidiaries to,
at all times keep their respective property insured in favor of the Collateral
Agent, and all policies (including Mortgage Policies) or certificates (or
certified copies thereof) with respect to such insurance (and any other
insurance maintained by the Borrowers or any of their respective Restricted
Subsidiaries) (i) shall be endorsed to the Collateral Agent's satisfaction for
the benefit of the Collateral Agent (including, without limitation, by naming
the Collateral Agent as loss payee or as an additional insured (provided that
Furniture Brands and its Restricted Subsidiaries shall be permitted to settle
claims in an amount less than $10,000,000 per claim, so long as the proceeds
from such claims are applied in accordance with Section 4.02(A)(d)), (ii) shall
state that such insurance policies shall not be cancelled without 30 days' prior
written notice thereof by the respective insurer to the Collateral Agent, (iii)
shall provide that the respective insurers irrevocably waive any and all rights
of subrogation with respect to the Collateral Agent and the Secured Creditors,
(iv) shall contain the standard non-contributory mortgagee clause endorsement in
favor of the Collateral Agent with respect to hazard insurance coverage, (v)
shall, except in the case of public liability insurance and workers'
compensation insurance, provide that any losses shall be payable notwithstanding
(A) any act or neglect of the Borrowers or any of their respective Restricted
Subsidiaries, (B) the occupation or use of the properties for purposes more
hazardous than those permitted by the terms of the respective policy if such
coverage is obtainable at commercially reasonable rates and is of the kind from
time to time customarily insured against by Persons owning or using similar
property and in such amounts as are customary, (C) any foreclosure or other
proceeding relating to the insured properties if such coverage is available at
commercially reasonable rates or (D) any change in the title to or ownership or
possession of the insured properties and (vi) shall be deposited with the
Collateral Agent if such coverage is available at commercially reasonable rates.
(c) If the Borrowers or any of their respective Restricted Subsidiaries
shall fail to maintain all insurance in accordance with this Section 8.03, or if
the Borrowers or any of their respective Restricted Subsidiaries shall fail to
so endorse and deposit all policies or certificates with respect thereto, the
Administrative Agent and/or the Collateral Agent shall have the right (but shall
be under no obligation) after giving notice to Furniture Brands (but not
requiring any consent from Furniture Brands) to procure such insurance and the
Borrowers agree to jointly and severally reimburse the Administrative Agent or
the Collateral Agent, as the case may be, for all costs and expenses of
procuring such insurance.
8.04 Corporate Franchises. The Borrowers will, and will cause each of their
respective Restricted Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 8.04 shall prevent (i) sales of assets, mergers or other
transactions by or among Furniture Brands or any of its Restricted Subsidiaries
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in accordance with Section 9.02 or (ii) (x) the withdrawal by Furniture Brands
or any of the Restricted Subsidiaries of its qualification as a foreign
corporation or the failure to qualify as a foreign corporation in any
jurisdiction or (y) the amendment of the Certificate of Incorporation or By-Laws
of Furniture Brands or any of its Subsidiaries, in each case which would not in
any way materially and adversely affect the Banks, and where such withdrawal or
failure or amendment, as the case may be, could not reasonably be expected to
have a Material Adverse Effect.
8.05 Compliance with Statutes, etc. The Borrowers will, and will cause each
of their respective Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property, except such noncompliances as could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
8.06 Compliance with Environmental Laws. (a) The Borrowers will comply, and
will cause each of their respective Subsidiaries to comply, in all material
respects with all Environmental Laws applicable to the ownership or use of its
Real Property now or hereafter owned or operated by Furniture Brands or any of
its Subsidiaries, will within a reasonable time period pay or cause to be paid
all costs and expenses incurred in connection with such compliance, and will
keep or cause to be kept all such Real Property free and clear of any Liens on
such Real Property imposed pursuant to such Environmental Laws; provided that,
none of Furniture Brands nor any of its Subsidiaries shall be required to remove
any such Liens, so long as the aggregate amount of obligations purported to be
secured by such Liens does not exceed $1,000,000, and such Liens are being
contested in good faith and by proper proceedings if it has maintained adequate
reserves with respect thereto in accordance with generally accepted accounting
principles. None of Furniture Brands nor any of its Subsidiaries will generate,
use, treat, store, release or dispose of, or permit the generation, use,
treatment, storage, release or disposal of Hazardous Materials on any Real
Property now or hereafter owned or operated by Furniture Brands or any of its
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property except for Hazardous Materials used or stored
at any such Real Properties in material compliance with all applicable
Environmental Laws and reasonably required in connection with the operation, use
and maintenance of any such Real Property.
(b) At the written request of the Administrative Agent or the Required
Banks, which request shall specify in reasonable detail the basis therefor, at
any time and from time to time, the Borrowers will provide, at the Borrowers'
joint and several cost and expense, an environmental site assessment report
concerning any Real Property now or hereafter owned or operated by Furniture
Brands or any of its Subsidiaries, prepared by an environmental consulting firm
approved by the Administrative Agent, indicating the presence or absence of
Hazardous Materials and the potential cost of any removal or remedial action in
connection with any Hazardous Materials on such Real Property; provided, that
such request may be made only if (i) there has occurred and is continuing an
Event of Default, (ii) the Administrative Agent reasonably believes that
Furniture Brands, any of its Subsidiaries or any such Real Property is not in
material compliance with Environmental Law, or (iii) circumstances exist that
reasonably could be expected to form the basis of a material Environmental Claim
against Furniture Brands, any of its Subsidiaries or any such Real Property. If
the Borrowers fail to provide the same within 90 days after such request was
made, the Administrative Agent may order the same, and the Borrowers shall grant
and hereby grant to the Administrative Agent and the Banks and their agents
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access to such Real Property and specifically grant the Administrative Agent and
the Banks an irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment, all at the Borrowers' joint and
several expense.
8.07 ERISA. As soon as possible and, in any event, within 20 days after the
Borrowers or any of their respective Restricted Subsidiaries or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the following,
the Borrowers will deliver to the Administrative Agent, and the Administrative
Agent shall promptly forward to each Bank a certificate of an Authorized
Representative of the Borrowers setting forth details as to such occurrence and
the action, if any, that the Borrowers, such Restricted Subsidiary or such ERISA
Affiliate is required or proposes to take, together with any notices required or
proposed to be given to or filed with or by the Borrowers, such Restricted
Subsidiary, the ERISA Affiliate, the PBGC, or a Plan participant or the Plan
administrator with respect thereto: that a Reportable Event has occurred; that
an accumulated funding deficiency has been incurred or an application is likely
to be or has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including any required installment
payments) or an extension of any amortization period under Section 412 of the
Code with respect to a Plan, Multiemployer Plan and/or a Spunoff Plan; that a
contribution required to be made to a Plan, Multiemployer Plan and/or Foreign
Pension Plan has not been timely made; that a Plan, Multiemployer Plan and/or a
Spunoff Plan has been or is reasonably expected to be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA; that a Plan,
Multiemployer Plan and/or a Spunoff Plan has an Unfunded Current Liability
giving rise to a lien under ERISA or the Code; that proceedings are likely to be
or have been instituted or notice has been given to terminate or appoint a
trustee to administer a Plan, Multiemployer Plan and/or a Spunoff Plan; that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Multiemployer Plan if material in amount; that the
Borrowers, any of their respective Restricted Subsidiaries or any ERISA
Affiliate will or is reasonably expected to incur any material liability
(including any indirect, contingent or secondary liability) to or on account of
the termination of or withdrawal from a Plan, Multiemployer Plan and/or a
Spunoff Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA
or with respect to a Plan, Multiemployer Plan and/or a Spunoff Plan under
Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or
502(l) of ERISA; or except as disclosed on Schedule XIV, that the Borrowers or
any Restricted Subsidiary is reasonably expected to incur any liability pursuant
to any employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or any employee pension benefit plan (as
defined in Section 3(2) of ERISA) which liability, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect. Upon
request, the Borrowers will deliver to each of the Banks a complete copy of the
annual report (Form 5500) of each Plan (including, to the extent required to be
filed with the Internal Revenue Service in connection with such annual report,
the related financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed with
the Internal Revenue Service. In addition to any certificates or notices
delivered to the Banks pursuant to the first sentence hereof, copies of such
annual reports and any material notices received by the Borrowers or any of
their respective Restricted Subsidiaries or any ERISA Affiliate with respect to
any Plan, Multiemployer Plan, Spunoff Plan and/or Foreign Pension Plan shall be
delivered to the Banks no later than 20 days after the date such report has been
requested or such notice has been received by the Borrowers, the Restricted
Subsidiary or the ERISA Affiliate, as applicable. For purposes of this Section
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8.07 "knows or has reason to know" with respect to any Spunoff Plan means
knowledge acquired through written or oral notice provided directly to a
Borrower by any governmental agency, court, or Spunoff Plan administrator.
8.08 End of Fiscal Years; Fiscal Quarters. Furniture Brands shall cause (i)
each of its Fiscal Years to end on December 31, and each of its fiscal quarters
to end on the last day of each March, June, September and December and (ii) each
of its Restricted Subsidiaries' (x) fiscal years to end on the closest Saturday
to December 31 and (y) fiscal quarters to end on the closest Saturday to the
last day of each March, June, September and December.
8.09 Performance of Obligations. Each of the Borrowers will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrowers taken as a whole or of the Borrowers
and the Restricted Subsidiaries taken as a whole.
8.10 Payment of Taxes. Each of the Borrowers will pay and discharge or
cause to be paid and discharged, and will cause each of their respective
Subsidiaries to pay and discharge, all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any material properties belonging to it, in each case on a timely basis,
and all lawful claims which, if unpaid, might become a lien or charge upon any
properties of Furniture Brands or any of its Restricted Subsidiaries; provided
that none of Furniture Brands nor any of its Subsidiaries shall be required to
pay any such tax, assessment, charge, levy or claim which is being contested in
good faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with generally accepted accounting principles.
8.11 Additional Security; Further Assurances; Required Appraisals. (a) At
any time and from time to time prior to the Mortgage Release Date, the Borrowers
will, and will cause each of their respective Restricted Subsidiaries to, grant
to the Collateral Agent security interests and mortgages (an "Additional
Mortgage") in such Real Property (other than Real Property encumbered by (i)
liens incurred by a Restricted Subsidiary at a time when it was an Unrestricted
Subsidiary, to the extent such Liens are otherwise permitted by this Agreement
and (ii) Liens securing Indebtedness permitted pursuant to Section 9.04 (vi),
but only until such time as such Indebtedness is repaid) of the Borrowers or any
of their respective Restricted Subsidiaries as are not covered by the original
Mortgages, to the extent such Real Property is acquired after the Third
Restatement Effective Date and either (x) the cost (including assumed
Indebtedness) of such Real Property is in excess of $2,500,000 or (y) the
respective Additional Mortgage has been requested by the Required Banks (each
such Real Property, an "Additional Mortgaged Property"). All such Additional
Mortgages shall be granted pursuant to documentation substantially in the form
of the Mortgages delivered to the Administrative Agent on the Original Effective
Date or the First Restatement Effective Date or in such other form as is
reasonably satisfactory to the Administrative Agent and shall constitute valid
and enforceable perfected Liens superior to and prior to the rights of all third
Persons and subject to no other Liens except as are permitted by Section 9.01 at
the time of perfection thereof. The Additional Mortgages or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
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favor of the Collateral Agent required to be granted pursuant to the Additional
Mortgages and all taxes, fees and other charges payable in connection therewith
shall have been paid in full.
(b) The Borrowers will, and will cause each of their respective Restricted
Subsidiaries to, at the joint and several expense of the Borrowers, make,
execute, endorse, acknowledge, file and/or deliver to the Collateral Agent from
time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, real property surveys, reports and other assurances or instruments
and take such further steps relating to the Collateral covered by any of the
Security Documents as the Collateral Agent may reasonably require pursuant to
this Section 8.11. Furthermore, the Borrowers shall cause to be delivered to the
Collateral Agent such opinions of counsel, title insurance and other related
documents as may be requested by the Collateral Agent to assure itself that this
Section 8.11 has been complied with.
(c) Each Borrower agrees to cause each Restricted Subsidiary established or
created in accordance with Section 9.11 to execute and deliver a guaranty of all
Obligations and all obligations under Interest Rate Protection Agreements in
substantially the form of the Subsidiary Guaranty, or by becoming a party to the
Subsidiary Guaranty.
(d) Each Borrower agrees to pledge all of the capital stock of each new
Subsidiary (other than any Subsidiary of an Unrestricted Subsidiary) created in
accordance with Section 9.11 to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement.
(e) Each Borrower will cause each Restricted Subsidiary established or
created in accordance with Section 9.11 to grant to the Collateral Agent a first
priority Lien on all property (tangible and intangible) of such Subsidiary upon
terms similar to those set forth in the Security Documents as appropriate, and
satisfactory in form and substance to the Administrative Agent and Required
Banks. Each Borrower shall cause each of its respective Restricted Subsidiaries,
at its own expense, to execute, acknowledge and deliver, or cause the execution,
acknowledgment and delivery of, and thereafter register, file or record in any
appropriate governmental office, any document or instrument reasonably deemed by
the Collateral Agent to be necessary or desirable for the creation and
perfection of the foregoing Liens. Each Borrower will cause each of its
respective Restricted Subsidiaries to take all actions requested by the
Administrative Agent (including, without limitation, the filing of UCC-1s) in
connection with the granting of such security interests.
(f) The security interests required to be granted pursuant to this Section
8.11 shall be granted pursuant to security documentation (which shall be
substantially similar to the Security Documents already executed and delivered
by Furniture Brands and its Restricted Subsidiaries, as applicable) or otherwise
satisfactory in form and substance to the Administrative Agent and shall
constitute valid and enforceable perfected security interests prior to the
rights of all third Persons and subject to no other Liens except such Liens as
are permitted by Section 9.01. The Additional Security Documents and other
instruments related thereto shall be duly recorded or filed in such manner and
in such places and at such times as are required by law to establish, perfect,
preserve and protect the Liens, in favor of the Collateral Agent for the benefit
of the respective Secured Creditors, required to be granted pursuant to the
Additional Security Documents and all taxes, fees and other charges payable in
connection therewith shall be paid, jointly and severally, in full by the
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Borrowers. At the time of the execution and delivery of the Additional Security
Documents, the Borrowers shall cause to be delivered to the Collateral Agent
such opinions of counsel, Mortgage Policies, title surveys, real estate
appraisals and other related documents as may be reasonably requested by the
Administrative Agent or the Required Banks to assure themselves that this
Section 8.11 has been complied with.
(g) In the event that the Administrative Agent or the Required Banks at any
time after the Fourth Restatement Effective Date determine in its or their good
faith discretion that real estate appraisals satisfying the requirements of
FIRREA (any such appraisal a "Required Appraisal") are or were required to be
obtained, or should be obtained, in connection with any Mortgaged Property or
Mortgaged Properties, then, within 120 days after receiving written notice
thereof from the Administrative Agent or the Required Banks, as the case may be,
such Required Appraisal shall be delivered, at the expense of the Borrowers, to
the Administrative Agent which Required Appraisal, and the respective appraiser,
shall be satisfactory to the Administrative Agent.
(h) Each of the Borrowers agrees that each action required above by Section
8.11 (a) or (b) shall be completed as soon as possible, but in no event later
than 60 days after such action is requested to be taken by the Administrative
Agent or the Required Banks. Each of the Borrowers further agrees that each
action required by Section 8.11(c), (d), (e) and (f) with respect to the
Additional Collateral shall be completed contemporaneously with the creation of
such new Subsidiary.
8.12 Interest Rate Protection. The Borrowers shall maintain, for a period
of at least three years after the Third Restatement Effective Date, interest
rate protection pursuant to one or more Interest Rate Protection Agreements
which establish a fixed or maximum interest rate (whether through swaps, caps,
collars, or otherwise) acceptable to the Administrative Agent in respect of at
least (i) $300,000,000 notional principal amount of Indebtedness through
February 22, 1999, and (ii) $100,000,000 notional principal amount of
Indebtedness during the period from February 22, 1999 through the third
anniversary of the Third Restatement Effective Date. The Administrative Agent
has approved the Interest Rate Protection Agreements which are in effect on the
Fourth Restatement Effective Date which established fixed or maximum interest
rates in respect of $300,000,000 notional principal amount of Indebtedness
through February 22, 1999.
8.13 Ownership of Subsidiaries. Furniture Brands shall at all times own
100% of the outstanding capital stock of the other Borrowers. Except to the
extent otherwise expressly consented in writing by the Required Banks and except
as set forth in Schedule VI, the Borrowers shall directly or indirectly own 100%
of the capital stock of each of their Subsidiaries (other than as permitted
pursuant to the definition of Permitted Acquisition).
8.14 Permitted Acquisitions. Subject to the provisions of this Section
8.14, Section 9.02(vi) and the requirements contained in the definition of
Permitted Acquisition, the Borrowers and their Restricted Subsidiaries may from
time to time after the Fourth Restatement Effective Date effect Permitted
Acquisitions, so long as (i) the Borrowers shall have given the Administrative
Agent and the Banks at least 10 Business Days' prior written notice of any
Permitted Acquisition, (ii) based on calculations made by the Borrowers on a Pro
Forma Basis after giving effect to the respective Permitted Acquisition and any
Indebtedness (including without limitation Permitted Acquired Debt) incurred,
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issued or assumed in connection with the respective Permitted Acquisition or to
finance same, (x) no Default or Event of Default will exist under, or would have
existed during the periods covered by, the financial covenants contained in
Sections 9.08 and 9.09 of this Agreement and (y) if any Indebtedness is being
incurred, issued or assumed in connection with the respective Permitted
Acquisition or to finance same (excluding, however, Permitted Acquired Debt in
connection with any Permitted Acquisition where the only Indebtedness being
incurred, issued or assumed in connection therewith or to finance same is
Permitted Acquired Debt), the Senior Debt Leverage Ratio shall not exceed
3.5:1.0, (iii) based on good faith projections prepared by the Borrowers for the
period from the date of the consummation of the Permitted Acquisition to the
date which is one year thereafter, the level of financial performance measured
by the covenants set forth in Sections 9.08 and 9.09 shall be better than or
equal to such level as would be required to provide that no Default or Event of
Default would exist under the financial covenants contained in Sections 9.08 and
9.09 of this Agreement as compliance with such covenants would be required
through the date which is one year from the date of the consummation of the
respective Permitted Acquisition, (iv) the Administrative Agent shall have been
satisfied in its reasonable discretion that the proposed Permitted Acquisition
could not reasonably be expected to result in materially increased tax, ERISA or
environmental liabilities with respect to Furniture Brands or any of its
Restricted Subsidiaries, it being understood that any determination of whether
the proposed Permitted Acquisition could reasonably be expected to result in
such materially increased tax, ERISA or environmental liabilities shall take
into account, inter alia, (x) any available indemnities and (y) the timing and
likelihood of payment thereunder and (v) the Borrowers shall have delivered to
the Administrative Agent an officer's certificate executed by an Authorized
Representative of the Borrowers, certifying (A) to the best of his knowledge,
compliance with the requirements of preceding clauses (i), (ii) and (iii) and
containing the calculations required by the preceding clauses (ii) and (iii) and
(B) compliance with the requirements of Section 9.02(vi).
8.15 Maintenance of Corporate Separateness. Furniture Brands will, and will
cause each of its Subsidiaries to, satisfy customary corporate formalities,
including the holding of regular board of directors' and shareholders' meetings
or action by directors or shareholders without a meeting and the maintenance of
corporate offices and records. None of the Borrowers nor any of their respective
Restricted Subsidiaries shall make any payment to a creditor of any Unrestricted
Subsidiaries in respect of any liability of any Unrestricted Subsidiaries, and
no bank account of any Unrestricted Subsidiary shall be commingled with any bank
account of any of the Borrowers or any of their respective Restricted
Subsidiaries. Any financial statements distributed to any creditors of any
Unrestricted Subsidiaries shall clearly establish or indicate the corporate
separateness of such Unrestricted Subsidiary from the Borrowers and their
respective Restricted Subsidiaries. Finally, neither Furniture Brands nor any of
its Subsidiaries shall take any action, or conduct its affairs in a manner,
which is likely to result in the corporate existence of Furniture Brands or any
of its Subsidiaries being ignored, or in the assets and liabilities of the
Borrowers or any of their respective Restricted Subsidiaries being substantively
consolidated with those of any Unrestricted Subsidiaries in a bankruptcy,
reorganization or other insolvency proceeding.
8.16 Cash Management System. The Borrowers will, and will cause each of
their respective Restricted Subsidiaries to, utilize and maintain the Cash
Management System for all deposits made by any of them (including the
concentration of all such deposits in the Concentration Account). The Cash
Management System shall be operated solely for the business of the Borrowers and
their respective Restricted Subsidiaries.
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8.17 Margin Stock. The Borrowers will, and will cause each of their
respective Subsidiaries to, take any and all actions as may be required to
ensure that no capital stock pledged, or required to be pledged, pursuant to any
Security Document shall constitute Margin Stock.
SECTION 9. Negative Covenants. The Borrowers covenant and agree that on and
after the Fourth Restatement Effective Date and until the Commitments and all
Letters of Credit and Acceptances have terminated and the Loans, Notes and
Unpaid Drawings, together with interest, Fees and all other Obligations incurred
hereunder and thereunder, are paid in full:
9.01 Liens. The Borrowers will not, and will not permit any of their
respective Restricted Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon or with respect to any property or assets (real or personal,
tangible or intangible) of Furniture Brands or any of its Restricted
Subsidiaries, whether now owned or hereafter acquired, or sell any such property
or assets subject to an understanding or agreement, contingent or otherwise, to
repurchase such property or assets (including sales of accounts receivable with
recourse to Furniture Brands or any of its Restricted Subsidiaries), or assign
any right to receive income or permit the filing of any financing statement
under the UCC or any other similar notice of Lien under any similar recording or
notice statute; provided that the provisions of this Section 9.01 shall not
prevent the creation, incurrence, filing, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Liens"):
(i) incipient Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles in the United
States (or the equivalent thereof in any country in which a Foreign Sales
Corporation or a Foreign Subsidiary is doing business, as applicable);
(ii) Liens in respect of property or assets of the Borrowers or any of
their Restricted Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers', warehousemen's, materialmen's and mechanics'
liens and other similar Liens arising in the ordinary course of business,
and (x) which do not in the aggregate materially detract from the value of
the Borrowers' or such Restricted Subsidiary's property or assets or
materially impair the use thereof in the operation of the business of the
Borrowers or such Restricted Subsidiary or (y) which are being contested in
good faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to any
such Lien;
(iii) Liens in existence on the Fourth Restatement Effective Date
which are listed, and the property subject thereto described, in Schedule
IX, but only to the respective date, if any, set forth in such Schedule IX
for the removal and termination of any such Liens, plus renewals and
extensions of such Liens to the extent set forth on Schedule IX, provided
that (x) the aggregate principal amount of the Indebtedness, if any,
secured by such Liens does not increase from that amount outstanding at the
time of any such renewal or extension and (y) any such renewal or extension
does not encumber any additional assets or properties of Furniture Brands
or any of its Restricted Subsidiaries;
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(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct of
the business of Furniture Brands and its Restricted Subsidiaries taken as a
whole;
(vii) Liens upon assets subject to Capitalized Lease Obligations of
the Borrowers and their Restricted Subsidiaries to the extent permitted by
Section 9.04(vi), provided that (x) such Liens only serve to secure the
payment of Indebtedness arising under such Capitalized Lease Obligation and
(y) the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of the Borrowers or any
Restricted Subsidiary of the Borrowers;
(viii) Liens placed upon assets used in the ordinary course of
business of the Borrowers or any of their Restricted Subsidiaries at the
time of acquisition or new construction thereof by the Borrowers or any
such Restricted Subsidiary or within 180 days thereafter to secure
Indebtedness incurred to pay all or a portion of the purchase price and/or
construction costs thereof, plus renewals or extensions of such Liens, or
Liens securing Permitted Acquired Debt, plus renewals or extensions of such
Liens, provided that (x) the aggregate outstanding principal amount of all
Indebtedness secured by Liens permitted by this clause (viii) shall not at
any time exceed the amount permitted by Section 9.04(vi) and (y) in all
events, the Lien encumbering the assets so acquired or newly constructed
does not encumber any other asset of the Borrowers or such Restricted
Subsidiary;
(ix) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
hereafter in existence, not securing Indebtedness and not materially
interfering with the conduct of the business of the Borrowers or any of
their respective Restricted Subsidiaries;
(x) Liens arising from precautionary UCC financing statement filings
regarding operating leases entered into by the Borrowers or any of their
Restricted Subsidiaries in the ordinary course of business;
(xi) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 10.09, provided that no cash
or property is deposited or delivered to secure the respective judgment or
award (or any appeal bond in respect thereof, except as permitted by
following clause (xiv));
(xii) statutory and contractual landlords' liens under leases to which
the Borrowers or any of their Restricted Subsidiaries are a party;
(xiii) Liens (other than any Lien imposed by ERISA) (x) incurred or
deposits made in the ordinary course of business of the Borrowers and their
respective Restricted Subsidiaries in connection with workers'
compensation, unemployment insurance and other types of social security,
(y) to secure the performance by the Borrowers and their respective
Restricted Subsidiaries of tenders, statutory obligations (other than
excise taxes), surety, stay, customs and appeal bonds, statutory bonds,
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bids, leases, government contracts, trade contracts, performance and
return of money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money) or (z) to secure the
performance by the Borrowers and their respective Restricted
Subsidiaries of leases of Real Property, to the extent incurred or
made in the ordinary course of business consistent with past
practices, provided that the aggregate amount of deposits at any time
pursuant to sub-clause (y) and sub-clause (z) shall not exceed
$5,000,000 in the aggregate;
(xiv) any interest or title of a lessor, sublessor, licensee
or licensor under any lease or license agreement permitted by this
Agreement;
(xv) Liens (x) in favor of customs and revenue authorities
arising as a matter of law to secure the payment of customs duties in
connection with the importation of goods and deposits made to secure
statutory obligations in the form of excise taxes or (y) in respect of
property or assets of Thomasville or any of its Subsidiaries imposed by
law or governmental action which arise out of actual or potential
claims under any Environmental Law disclosed in the environmental
report furnished to the Administrative Agent prior to the First
Restatement Effective Date, in each case so long as the Liens described
in this clause (y) are being contested in good faith (or Furniture
Brands or its respective Subsidiaries are in good faith pursuing
indemnities in respect thereof pursuant to the Armstrong Stock Purchase
Agreement) pursuant to appropriate proceedings, which proceedings have
the effect of preventing the forfeiture or sale of the property subject
to any such Lien and so long as adequate reserves (if necessary) have
been established in accordance with generally accepted accounting
principles with respect to the liability or liabilities secured by such
Liens;
(xvi) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into
by the Borrowers or any of their Restricted Subsidiaries in the
ordinary course of business in accordance with the past practices of
the Borrowers and their Restricted Subsidiaries prior to the Effective
Date; and
(xvii) Liens not otherwise permitted by the foregoing clauses
(i) through (xvi) to the extent attaching to properties and assets with
an aggregate fair value not in excess of, and securing liabilities not
in excess of, $20,000,000 in the aggregate at any time outstanding.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. The Borrowers
will not, and will not permit any of their respective Restricted Subsidiaries
to, wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time) all or any part of its
property or assets (other than the liquidation of Cash Equivalents in the
ordinary course of business), or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials, equipment, furniture, fixtures, and intangible assets in
the ordinary course of business) of any Person, except that:
(i) Capital Expenditures by the Borrowers and their Restricted
Subsidiaries shall be permitted to the extent not in violation of Section
9.07;
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(ii) each of the Borrowers and their Restricted Subsidiaries may
(x) in the ordinary course of business, sell, lease or otherwise
dispose of any assets which, in the reasonable judgment of such
Person, are obsolete, worn out or otherwise no longer useful in the
conduct of such Person's business, (y) sell, lease or otherwise
dispose of any other assets, provided that each such sale, lease or
disposition shall be for fair market value (other than with respect to
sales, leases or dispositions in an aggregate amount not to exceed
$100,000 per calendar year) and at least 75% of the consideration
therefor shall be in the form of cash, and provided further, that (A)
except as provided in following clause (B), the aggregate Net Sale
Proceeds of all assets subject to sales or other dispositions pursuant
to clauses (x) and (y) shall not exceed $15,000,000 in the aggregate
in any Fiscal Year and (B) in addition to sales effected pursuant to
preceding clause (A), additional assets may be sold pursuant to this
Section 9.02(ii) so long as at least 90% of the aggregate
consideration for any such asset sale shall be in the form of cash and
so long as the aggregate Net Sale Proceeds of all assets sold pursuant
to this clause (B) after the Second Restatement Effective Date do not
exceed $75,000,000, and (z) enter into transactions permitted under
Section 9.01(vi);
(iii) Investments may be made to the extent permitted by Section
9.05;
(iv) each of the Borrowers and their Restricted Subsidiaries may
lease (as lessee) real or personal property (so long as any such lease
does not create a Capitalized Lease Obligation except to the extent
permitted by Section 9.04);
(v) each of the Borrowers and their Restricted Subsidiaries may
make sales or transfers of inventory (x) in the ordinary course of
business or (y) to any other Borrower or any Domestic Wholly-Owned
Subsidiary of Furniture Brands which is a Subsidiary Guarantor;
(vi) the Borrowers and their respective Restricted Subsidiaries
shall be permitted to make Permitted Acquisitions so long as (A) such
Permitted Acquisitions are effected in accordance with the
requirements of Section 8.14, (B) after giving effect to any Permitted
Acquisition, the aggregate amount paid (including for the purpose of
this clause (vi) all cash consideration paid, the amount of all
Indebtedness directly issued as consideration, the face amount of all
Permitted Acquired Debt incurred or assumed and the fair market value
of any merger consideration, but excluding the fair market value of
all Furniture Brands Common Stock and/or Qualified Preferred Stock
issued as consideration therefor, in each case in connection with such
Permitted Acquisition) by the Borrowers and their Restricted
Subsidiaries in connection with such Permitted Acquisition shall not
exceed the sum of (x) the Available Basket Amount at such time (after
giving effect to all prior and contemporaneous adjustments thereto,
except as a result of such Permitted Acquisition) and (y) the
Available Debt Proceeds Amount at such time (after giving effect to
all prior and contemporaneous adjustments thereto, except as a result
of such Permitted Acquisition), and (C) with respect to each Permitted
Acquisition, no Default or Event of Default is in existence at the
time of the consummation of such Permitted Acquisition or would exist
after giving effect thereto;
(vii) Furniture Brands may sell or otherwise dispose of any
shares of capital stock of any Unrestricted Subsidiaries owned by it;
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(viii) so long as no Default or Event of Default then exists or
would result therefrom, the Borrowers or any Domestic Wholly-Owned
Subsidiary which is a Restricted Subsidiary of Furniture Brands may be
merged into or consolidated with any Borrower (so long as such
Borrower is the surviving corporation of such merger) or any other
Domestic Wholly-Owned Subsidiary which is a Restricted Subsidiary of
the Borrowers;
(ix) the Borrowers and their respective Restricted Subsidiaries
shall be permitted to merge with another Person (so long as such
Borrower or Restricted Subsidiary is the surviving corporation), so
long as such merger is used to effect a Permitted Acquisition in
compliance with Section 9.02(vi); and
(x) the Borrowers may sell or otherwise dispose of Excluded
Assets.
To the extent the Required Banks (or, the Required Supermajority Banks to the
extent required by Section 13.12(a)) waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold as
permitted by this Section 9.02, such Collateral (unless sold to Furniture Brands
or a Subsidiary of Furniture Brands) shall be sold free and clear of the Liens
created by the Security Documents, and the Administrative Agent and Collateral
Agent shall be authorized to take any actions deemed appropriate in order to
effect the foregoing.
9.03 Dividends. Furniture Brands shall not, and shall not permit any of its
Restricted Subsidiaries to, authorize, declare or pay any Dividends with respect
to Furniture Brands or any of its Restricted Subsidiaries, except that:
(i) any Restricted Subsidiary of any Borrower may pay Dividends to
such Borrower or any Wholly-Owned Subsidiary which is a Restricted
Subsidiary of the Borrowers; and
(ii) so long as no Default or Event of Default exists or would result
therefrom, Furniture Brands shall be permitted to pay Dividends (including,
without limitation, Dividends on Qualified Preferred Stock and payments
made to repurchase or redeem outstanding capital stock of Furniture Brands)
in an amount not to exceed (A) the Available Basket Amount on such date
(after giving effect to all prior and contemporaneous reductions thereto,
except as a result of such Dividend), minus (B) all Guaranty Payments made
by Furniture Brands pursuant to Section 9.10(b)(ii)(y)(A) and (B).
9.04 Indebtedness. Furniture Brands will not, and will not permit any of
its Restricted Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Permitted Unsecured Indebtedness not to exceed in aggregate
principal amount $300,000,000 at any time outstanding shall be permitted on
terms and conditions set forth in the definition of Permitted Unsecured
Indebtedness;
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(iii) Existing Indebtedness shall be permitted to the extent the same
is listed on Schedule VII, but no refinancings or renewals thereof, except
as expressly permitted on such Schedule VII;
(iv) accrued expenses and current trade accounts payable incurred in
the ordinary course of business;
(v) Indebtedness under Interest Rate Protection Agreements entered
into in compliance with Section 8.12;
(vi) Indebtedness of the Borrowers and their Restricted Subsidiaries
evidenced by Capitalized Lease Obligations to the extent permitted pursuant
to Section 9.01(vii), and Indebtedness secured by Liens permitted under
Section 9.01(viii) and Permitted Acquired Debt; provided that in no event
shall the aggregate principal amount of Capitalized Lease Obligations and
Indebtedness permitted by this clause (vii) exceed $20,000,000;
(vii) Indebtedness under Currency Hedging Agreements entered into in
compliance with Section 9.05(ix);
(viii) Contingent Obligations (a) of the Borrowers or any Restricted
Subsidiary as a guarantor of the lessee under any lease pursuant to which
the Borrowers or a Restricted Subsidiary is the lessee so long as such
lease is otherwise permitted hereunder, (b) of Furniture Brands
constituting guarantees by Furniture Brands of trade payables owing in the
ordinary course of business by its Restricted Subsidiaries, (c) of
Furniture Brands and/or Thomasville consisting of guarantees (with the
maximum amount guaranteed at any time pursuant to this clause (c) not to
exceed $7,500,000 in the aggregate) of actual or potential claims under
Environmental Laws as referenced in Section 9.01(xv)(y) and (d) of the
Borrowers or any Restricted Subsidiary as a guarantor of the lessee under
any lease pursuant to which a third party is the lessee in an aggregate
amount not to exceed $25,000,000;
(ix) Contingent Obligations of Furniture Brands pursuant to (x) the
Surviving Guaranties; provided that the making of any payments thereunder,
and any renewals or extensions of such Surviving Guaranties, shall be
subject to restrictions set forth in Section 9.10(b) and (y) the Tax
Sharing Agreements; and
(x) Indebtedness among the Borrowers and their Restricted Subsidiaries
to the extent permitted pursuant to Section 9.05(v).
In furtherance of the foregoing and in no way in limitation thereof,
Furniture Brands shall not permit any Unrestricted Subsidiary to incur any
Indebtedness having any element of recourse to Furniture Brands or its
Restricted Subsidiaries or to any of their assets or property.
9.05 Investments; etc. The Borrowers will not, and will not permit any of
their respective Restricted Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
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commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (any of the foregoing, an "Investment"), except that
the following shall be permitted:
(i) the Borrowers and their Restricted Subsidiaries may acquire and
hold accounts receivables owing to any of them, if created or acquired in
the ordinary course of business and payable or dischargeable in accordance
with customary terms;
(ii) the Borrowers and their Restricted Subsidiaries may acquire and
hold cash and Cash Equivalents (including cash and Cash Equivalents held by
Furniture Brands on behalf of its Restricted Subsidiaries pursuant to the
Cash Management System);
(iii) Furniture Brands and its Restricted Subsidiaries may make loans
and advances in the ordinary course of business to their respective
employees so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs of
such loans and advances) shall not exceed $1,000,000;
(iv) the Borrowers may enter into Interest Rate Protection Agreements
to the extent permitted in Section 9.04(v);
(v) any Credit Party or the Receivables Subsidiary may make
intercompany loans and advances to any other Credit Party;
(vi) the Borrowers may (x) establish Subsidiaries in compliance with
Section 9.11 and (y) make Investments therein as otherwise provided in this
Section 9.05;
(vii) so long as no Default or Event of Default exists, or would
result therefrom, the Borrowers and their Restricted Subsidiaries may make
Investments at any time in an amount not to exceed the Available Basket
Amount at such time (after giving effect to all prior and contemporaneous
reductions thereto, except as a result of such Investment);
(viii) the Borrowers and their Restricted Subsidiaries may retain cash
consideration plus purchase money notes derived from asset sales permitted
pursuant to Section 9.02(ii);
(ix) the Borrowers may enter into and perform their obligations under
Currency Hedging Agreements entered into in the ordinary course of business
and consistent with past practices so long as (i) any such Currency Hedging
Agreement is related to income derived from foreign operations of the
Borrowers or any Restricted Subsidiary (or any Foreign Sales Corporation
which is a Restricted Subsidiary) or otherwise related to purchases
permitted hereunder from foreign suppliers and (ii) such Currency Hedging
Agreements do not exceed a notional amount equal to $15,000,000 in the
aggregate at any one time;
(x) the Borrowers and their Restricted Subsidiaries may acquire and
own investments (including notes or other debt obligations or securities)
received in connection with the bankruptcy or reorganization of their
suppliers and customers and in settlement of delinquent obligations of, or
disputes with, their customers or suppliers in the ordinary course of
business;
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(xi) existing Investments by the Borrowers and their
Restricted Subsidiaries shall be permitted to the extent listed on
Schedule X;
(xii) Furniture Brands shall be permitted to make capital
contributions to Foreign Sales Corporations in an amount not to exceed
$100,000 in the aggregate; and
(xiii) Permitted Acquisitions shall be permitted in compliance with
Sections 8.14 and 9.02(vi).
9.06 Transactions with Affiliates and Unrestricted Subsidiaries. The
Borrowers will not, and will not permit any of their respective Restricted
Subsidiaries to, enter into any transaction or series of related transactions
with any Affiliate of Furniture Brands or any of its Subsidiaries or any of its
Unrestricted Subsidiaries, other than in the ordinary course of business and on
terms and conditions substantially as favorable to the Borrowers or such
Restricted Subsidiary as would reasonably be obtained by the Borrowers or such
Restricted Subsidiary at that time in a comparable arm's-length transaction with
a Person other than an Affiliate, except that:
(i) Dividends may be paid to the extent provided in Section 9.03;
(ii) Investments may be made to the extent permitted by Section 9.05;
(iii) the transactions entered into between the Borrowers and their
Subsidiaries shall be permitted to the extent expressly permitted by
Section 9.02;
(iv) customary fees may be paid to non-officer directors of the
Borrowers and their Restricted Subsidiaries;
(v) Furniture Brands and its Restricted Subsidiaries may enter into
employment arrangements with respect to the procurement of services with
their respective officers and employees in the ordinary course of business;
(vi) the Borrowers and their respective Restricted Subsidiaries may
make capital contributions to any of their respective Restricted
Subsidiaries which is a Credit Party;
(vii) existing transactions between Furniture Brands and its
Subsidiaries and their Affiliates shall be permitted to the extent listed
on Schedule XI;
(viii) Furniture Brands may sell or issue Furniture Brands Common
Stock and Qualified Preferred Stock to its Affiliates (other than its
Subsidiaries); and
(ix) Furniture Brands may modify the Tax Sharing Agreement as provided
in Section 9.10(c).
Except as specifically provided above, no management or similar fees shall
be paid or payable by Furniture Brands or any of its Restricted Subsidiaries to
any Affiliate (other than Furniture Brands).
Notwithstanding anything contained in the foregoing to the contrary, any
transactions between and among Furniture Brands and/or Restricted Subsidiaries
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on the one hand and any of their respective Affiliates (excluding Furniture
Brands and its Restricted Subsidiaries) on the other hand, shall be arm's-length
transactions and on terms and conditions at least as favorable to Furniture
Brands and/or such Restricted Subsidiaries as the terms and conditions which
would apply to a similar transaction on an arm's-length basis with a Person that
is not an Affiliate; provided, that, any transaction (other than as described in
clauses (i), (ii), (iii) and (vi) above) between and among the aforementioned
parties with a value in excess of $1,000,000 shall only be permitted if a
majority of the disinterested directors of Furniture Brands approve the
transaction.
9.07 Capital Expenditures. (a) The Borrowers will not, and will not permit
any of their respective Restricted Subsidiaries to, make any Capital
Expenditures, except that the Borrowers and their Restricted Subsidiaries may
make Capital Expenditures so long as the aggregate amount of such Capital
Expenditures made pursuant to this clause (a) does not exceed $80,000,000 in any
Fiscal Year (beginning with the Fiscal Year ended in 1998).
(b) In addition to the Capital Expenditures permitted pursuant to the
preceding clause (a), the Borrowers and their respective Restricted Subsidiaries
shall be permitted to make additional Capital Expenditures to the extent
consisting of the reinvestment of proceeds of Recovery Events not required to be
applied as a mandatory repayment pursuant to the provisions of Section
4.02(A)(d).
9.08 Consolidated Net Interest Coverage Ratio. The Borrowers will not
permit the Consolidated Net Interest Coverage Ratio for any period of four
consecutive fiscal quarters, in each case taken as one accounting period, ended
on the last day of a fiscal quarter set forth below to be less than the amount
set forth opposite such period below:
Fiscal Quarter
Ended Closest to Ratio
June 30, 1998 3.00:1.00
September 30, 1998 3.25:1.00
December 31, 1998 3.25:1.00
March 31, 1999 3.50:1.00
and the last day of
each fiscal quarter thereafter
9.09 Maximum Leverage Ratio. The Borrowers will not permit the Leverage
Ratio at any time to be greater than the ratio set forth opposite the fiscal
quarter most recently ended as set forth below:
Fiscal Quarter
Ended Closest to Ratio
June 30, 1998 4.50:1.00
September 30, 1998 4.35:1.00
December 31, 1998 4.25:1.00
March 31, 1999 4:00:1.00
and the last day of each
fiscal quarter thereafter
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9.10 Limitation on Modifications of and Payments on Indebtedness and
Qualified Preferred Stock; Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; Surviving Guaranty Payments, etc. (a) The
Borrowers will not, and will not permit any of their respective Restricted
Subsidiaries to, (i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption, repurchase or acquisition for
value of any of the Existing Indebtedness, or after the incurrence thereof, any
Permitted Unsecured Indebtedness (any such payment, prepayment, redemption or
acquisition, a "Restricted Junior Payment"), if at such time (x) a Default or
Event of Default then exists or arises therefrom or (y) such Restricted Junior
Payment shall exceed an amount equal to the then Available Basket Amount (after
giving effect to all prior or contemporaneous adjustments thereto, except as a
result of such Restricted Junior Payment), (ii) amend or modify, or permit the
amendment or modification of, any provision of the Existing Indebtedness or,
after the incurrence or issuance thereof, any Permitted Unsecured Indebtedness,
or Qualified Preferred Stock or of any agreement (including, without limitation,
any purchase agreement, indenture, loan agreement, security agreement or
certificate of designation) relating thereto, other than any amendments or
modifications to the Existing Indebtedness, any Permitted Unsecured Indebtedness
or any Qualified Preferred Stock which (A) do not make any term or condition
thereof more restrictive than the previously existing terms and conditions with
respect thereto, (B) do not in any way materially adversely affect the interests
of the Banks and (C) do not increase the interest or dividend rates applicable
thereunder, reduce the maturity date thereunder or change any pay-in-kind
mechanics or requirements or any subordination provision thereof or (iii) amend
or modify its Certificate of Incorporation (including, without limitation, by
the filing or modification of any certificate of designation, other than any
certificate of designation relating to Qualified Preferred Stock) or By-Laws, or
any agreement entered into by it, with respect to its capital stock or enter
into any new agreement with respect to its capital stock if the foregoing would
in any way materially and adversely affect the Banks.
(b) Furniture Brands will not (i) amend, extend, renew or modify, or permit
the amendment, extension, renewal or modification of, any provision of the
Surviving Guaranties (or any lease obligation guarantied thereby) or any
agreement relating thereto, other than any renewal or extension of a lease
obligation guarantied by any Surviving Guaranty pursuant to the renewal and/or
extension provisions contained therein as in effect on the Original Effective
Date which (a) creates a continuing guaranty obligation with respect to such
existing lease (without any amendments thereto which would increase the lessee's
obligations thereunder), (b) is exercised (x) not more than 30 days prior to the
last day on which such extension or renewal may be exercised in accordance with
the terms of the lease relating thereto and (y) at a time when no Default or
Event of Default then exists or arises therefrom and (c) creates future fixed
payment obligations with respect thereto which, when combined with all future
fixed payment obligations under renewals and/or extensions made in compliance
with this Section 9.10(b)(i), would not exceed $10,000,000 or (ii) make any
payment whatsoever, whether voluntary, mandatory or otherwise, in respect of the
Surviving Guaranties (any such payment, a "Guaranty Payment") if at such time
(x) a Default or Event of Default then exists or arises therefrom or (y) such
payment shall exceed an amount equal to the sum of (A) $5,000,000 less the
amount of all Guaranty Payments theretofore made after the Second Restatement
Effective Date pursuant to this clause (A), plus (B) at any time, the aggregate
amount of Dividends which could be made pursuant to Section 9.03(ii).
(c) The Borrowers will not, and will not permit any of their respective
Restricted Subsidiaries to, amend, modify or change any provision of any Tax
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Sharing Agreement other than any amendment, modification or change deemed
immaterial by the Administrative Agent or as otherwise consented to by the
Required Banks.
9.11 Limitation on Creation or Acquisition of Subsidiaries and Restricted
Subsidiaries. The Borrowers will not, and will not permit any of their
respective Restricted Subsidiaries to, establish, create or acquire after the
Fourth Restatement Effective Date any Subsidiary, unless (x) if such Subsidiary
is an Unrestricted Subsidiary (other than a Foreign Sales Corporation), (i) it
is established, created or acquired by Furniture Brands or another Unrestricted
Subsidiary, (ii) if owned by Furniture Brands, 100% of the capital stock of such
new Unrestricted Subsidiary owned by Furniture Brands shall be pledged pursuant
to the Pledge Agreement and the certificates representing such stock, together
with stock powers duly executed in blank, shall be delivered to the Collateral
Agent and (iii) such Unrestricted Subsidiary shall, at the request of the
Administrative Agent, become a party to a Tax Sharing Agreement, (y) if such
Subsidiary is a Restricted Subsidiary (other than a Foreign Sales Corporation),
(i) at least 10 Business Days' prior written notice thereof is given to the
Administrative Agent and the Banks, (ii) 100% of the capital stock of such new
Subsidiary is pledged pursuant to the Pledge Agreement and the certificates
representing such stock, together with stock powers duly executed in blank, are
delivered to the Collateral Agent and (iii) such new Restricted Subsidiary
executes a counterpart of the Subsidiary Guaranty, the Security Agreement and
the Pledge Agreement or (z) if such Subsidiary is a Foreign Sales Corporation,
any Investment therein is made in accordance with Section 9.05(xii). In
addition, each new Restricted Subsidiary shall execute and deliver, or cause to
be executed and delivered, all other relevant documentation of the type
described in Section 5 as such new Restricted Subsidiary would have had to
deliver if such new Restricted Subsidiary were a Restricted Subsidiary and/or a
Subsidiary Guarantor on the Fourth Restatement Effective Date.
9.12 Limitation on Issuance of Capital Stock. (a) Furniture Brands shall
not issue (i) any Preferred Stock (other than Qualified Preferred Stock) or (ii)
any redeemable common stock unless, in either case, all terms thereof are
satisfactory to the Required Banks in their sole discretion. Notwithstanding
anything to the contrary contained in the immediately preceding sentence,
Furniture Brands may adopt a shareholders' rights plan and, pursuant thereto,
may from time to time issue rights to purchase common stock and/or Preferred
Stock of Furniture Brands to its shareholders.
(b) No Restricted Subsidiary of Furniture Brands shall issue, or permit any
of their Restricted Subsidiaries to issue, any capital stock (including by way
of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into, capital stock, except (i) for transfers and
replacements of then outstanding shares of capital stock, (ii) for stock splits,
stock dividends and additional issuances which do not decrease the percentage
ownership of Furniture Brands or any of its Restricted Subsidiaries in any class
of the capital stock of such Restricted Subsidiaries, (iii) to qualify directors
to the extent required by applicable law, and (iv) Restricted Subsidiaries
formed after the Fourth Restatement Effective Date pursuant to Section 9.11 may
issue capital stock to the Borrowers or the respective Restricted Subsidiary of
the Borrowers which is to own such stock in accordance with the requirements of
Section 9.11. All capital stock issued in accordance with this Section 9.12(b)
shall, to the extent required by the Pledge Agreement, be delivered to the
Collateral Agent for pledge pursuant to the Pledge Agreement.
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9.13 Business. The Borrowers will not, and will not permit any of their
Restricted Subsidiaries to, engage (directly or indirectly) in any business
other than substantially the same lines of business in which they are engaged on
the Fourth Restatement Effective Date and reasonable extensions thereof. No
Restricted Subsidiary of Furniture Brands will, or will permit any of their
Restricted Subsidiaries to, create or own any Unrestricted Subsidiaries. The
Foreign Sales Corporation will not engage in any business other than the sale of
goods and/or services outside of the United States and any business reasonably
incidental to the foregoing.
9.14 Limitation on Certain Restrictions on Subsidiaries. (a) The Borrowers
will not, and will not permit any of their respective Restricted Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective, except as set forth on Schedule XIII, any encumbrance or
restriction on the ability of any such Restricted Subsidiary to (x) pay
dividends or make any other distributions on its capital stock or any other
interest or participation in its profits owned by Furniture Brands or any
Restricted Subsidiary of Furniture Brands, or pay any Indebtedness owed to
Furniture Brands or a Restricted Subsidiary of Furniture Brands, (y) make loans
or advances to Furniture Brands or any of Furniture Brands' Restricted
Subsidiaries or (z) transfer any of its properties or assets to Furniture
Brands, except for such encumbrances or restrictions existing under or by reason
of (i) applicable law, (ii) this Agreement and the other Credit Documents, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Borrowers or a Restricted Subsidiary of the
Borrowers, and (iv) customary provisions restricting assignment of any licensing
agreement entered into by the Borrowers or any Restricted Subsidiary of the
Borrowers in the ordinary course of business.
(b) Furniture Brands will not permit any of its Unrestricted Subsidiaries
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any restriction whatsoever on the operations of Furniture
Brands and/or its Restricted Subsidiaries.
SECTION 10. Events of Default. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
10.01 Payments. The Borrowers shall (i) default in the payment when due of
any principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for three or more Business Days, in the payment when due of
any Unpaid Drawings or interest on any Loan or Note, or any Fees or any other
amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or statement made
by any Credit Party herein or in any other Credit Document or in any certificate
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
10.03 Covenants. The Borrowers shall (i) default in the due performance or
observance by it of any term, covenant or agreement contained in Section
8.01(g)(i), 8.08, 8.12, 8.13, 8.14, 8.15, 8.16 or Section 9 or (ii) default in
the due performance or observance by it of any other term, covenant or agreement
contained in this Agreement and such default shall continue unremedied for a
period of 30 days after written notice to the Borrowers by the Administrative
Agent or any Bank; or
10.04 Default Under Other Agreements. The Borrowers or any of their
respective Restricted Subsidiaries shall (i) default in any payment of any
Indebtedness (other than the Obligations) beyond the period of grace, if any,
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provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any Indebtedness (other than the Obligations) or contained
in any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity, or (iii) any
Indebtedness (other than the Obligations) of the Borrowers or any of their
respective Restricted Subsidiaries shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof, provided that (x) it shall not be a
Default or Event of Default under this Section 10.04 unless the aggregate
principal amount of all Indebtedness as described in preceding clauses (i)
through (iii), inclusive, is at least $10,000,000; or
10.05 Bankruptcy, etc. The Borrowers or any of their respective
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrowers or any of their respective Subsidiaries and the
petition is not controverted within 30 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Borrowers or any of their respective Subsidiaries, or the
Borrowers or any of their respective Subsidiaries commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrowers or any of their
respective Subsidiaries, or there is commenced against the Borrowers or any of
their respective Subsidiaries any such proceeding which remains undismissed for
a period of 60 days, or the Borrowers or any of their respective Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrowers or any of
their respective Subsidiaries suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or the Borrowers or any of their respective
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Borrowers or any of their respective
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan, Multiemployer Plan, and/or Spunoff Plan shall
fail to satisfy the minimum funding standard required for any plan year or part
thereof or a waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code, any Plan, Multiemployer Plan
and/or Spunoff Plan shall have had or is likely to have a trustee appointed to
administer such Plan, Multiemployer Plan and/or Spunoff Plan pursuant to Section
4042 of ERISA, any Plan, Multiemployer Plan and/or Spunoff Plan shall have been
or is reasonably expected to be terminated or to be the subject of termination
proceedings under Section 4042 of ERISA, any Plan, Multiemployer Plan and/or
Spunoff Plan shall have an Unfunded Current Liability, a contribution required
to be made to a Plan, Multiemployer Plan, Spunoff Plan and/or Foreign Pension
Plan has not been timely made, the Borrowers or any their respective Restricted
Subsidiaries or any ERISA Affiliate has incurred or is reasonably expected to
incur a liability to or on account of a Plan, Multiemployer Plan and/or Spunoff
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Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code, the
Borrowers or any of their respective Restricted Subsidiaries has incurred or is
reasonably expected to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) which provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or employee pension benefit plans (as defined in
Section 3(2) of ERISA) or Foreign Pension Plans, (b) there shall result from any
such event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability; (c) and in
each case in clauses (a) and (b) above, such lien, security interest or
liability, individually, and/or in the aggregate, in the opinion of the Required
Banks, will have a Material Adverse Effect; or
10.07 Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect, or shall cease in any material respect to give the Collateral Agent for
the benefit of the Secured Creditors the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a perfected
security interest in, and Lien on, all of the Collateral), in favor of the
Collateral Agent, superior to and prior to the rights of all third Persons
(except as permitted by Section 9.01), and subject to no other Liens (except as
permitted by Section 9.01), or any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any of the Security Documents and such default
shall continue beyond any grace period specifically applicable thereto pursuant
to the terms of such Security Document; or
10.08 Subsidiary Guaranty. The Subsidiary Guaranty or any provision thereof
shall cease to be in full force or effect as to any Subsidiary Guarantor, or any
Subsidiary Guarantor or Person acting by or on behalf of such Subsidiary
Guarantor shall deny or disaffirm such Subsidiary Guarantor's obligations under
the Subsidiary Guaranty, or any Subsidiary Guarantor shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiary Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered against
the Borrowers or any of their respective Restricted Subsidiaries involving in
the aggregate for the Borrowers and their respective Restricted Subsidiaries a
liability (not paid or fully covered by a reputable and solvent insurance
company) and such judgments and decrees either shall be final and non-appealable
or shall not be vacated, discharged or stayed or bonded pending appeal for any
period of 60 consecutive days, and the aggregate amount of all such judgments
exceeds $10,000,000; or
10.10 Change of Control. A Change of Control shall occur; or
10.11 Tax Sharing Agreement. One or more parties to a Tax Sharing Agreement
(other than Borrowers or any of their respective Restricted Subsidiaries) shall
have defaulted in its or their payment obligations (other than reimbursement
obligations in respect of payments made under the Surviving Guaranties) in an
aggregate amount equal to or greater than $5,000,000 thereunder and such default
or defaults shall remain unremedied for a period in excess of ten consecutive
Business Days;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Banks, shall by written notice to the Borrowers, take any or all of
the following actions, without prejudice to the rights of any Agent, any Bank or
the holder of any Note to enforce its claims against any Credit Party (provided
that, if an Event of Default specified in Section 10.05 shall occur with respect
to the Borrowers, the result of which would occur upon the giving of written
notice by the Administrative Agent to the Borrowers as specified in clauses (i)
and (ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitment terminated, whereupon the Commitment of each
Bank shall forthwith terminate immediately and any Commitment Commission and
other Fees shall forthwith become due and payable without any other notice of
any kind; (ii) declare the principal of and any accrued interest in respect of
all Loans and the Notes and all Obligations owing hereunder and thereunder to
be, whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
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hereby waived by each Credit Party; (iii) terminate any Letter of Credit which
may be terminated in accordance with its terms; (iv) direct the Borrowers to pay
(and the Borrowers agree that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to the
Borrowers, they will pay) to the Collateral Agent at the Payment Office such
additional amount of cash, to be held as security by the Collateral Agent, as is
equal to the aggregate Stated Amount of all Letters of Credit issued for the
account of the Borrowers and all Acceptances then outstanding; (v) enforce, as
Collateral Agent, all of the Liens and security interests created pursuant to
the Security Documents; and (vi) apply any cash collateral held for the benefit
of the Banks pursuant to Section 4.02 to repay outstanding Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Acceptance" shall have the meaning provided in Section 2.01(a).
"Acceptance Facing Fee" shall having the meaning provided in Section
3.01(c).
"Acceptance Fee" shall have the meaning provided in Section 3.01(b).
"Action" shall mean Action Industries, Inc., a Mississippi corporation.
"Additional Collateral" shall mean all property (whether real or personal)
in which security interests are granted (or have been purported to be granted)
(and continue to be in effect at the time of determination) pursuant to Section
8.11.
"Additional Mortgage" shall have the meaning provided in Section 8.11(a).
"Additional Mortgaged Property" shall have the meaning provided in Section
8.11(a).
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered into
pursuant to Section 8.11 with respect to Additional Collateral.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
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offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily net
annual assessment rate as estimated by the Administrative Agent for determining
the current annual assessment payable by the Administrative Agent to the Federal
Deposit Insurance Corporation for insuring three-month certificates of deposit.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default exists,
for each Bank, such Bank's Percentage and (y) at a time when a Bank Default
exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for each Bank
that is a Non-Defaulting Bank, the percentage determined by dividing such Bank's
Revolving Loan Commitment at such time by the Adjusted Total Revolving Loan
Commitment at such time, it being understood that all references herein to
Revolving Loan Commitments and the Adjusted Total Revolving Loan Commitment at a
time when the Total Revolving Loan Commitment or Adjusted Total Revolving Loan
Commitment, as the case may be, has been terminated shall be references to the
Revolving Loan Commitments or Adjusted Total Revolving Loan Commitment, as the
case may be, in effect immediately prior to such termination, provided that (A)
no Bank's Adjusted Percentage shall change upon the occurrence of a Bank Default
from that in effect immediately prior to such Bank Default, to the extent such
change after giving effect to such Bank Default, and any repayment of Revolving
Loans and Swingline Loans at such time pursuant to Section 4.02(a) or otherwise,
would cause the sum of (i) the aggregate outstanding principal amount of
Revolving Loans of all Non-Defaulting Banks plus (ii) the aggregate outstanding
principal amount of Swingline Loans plus (iii) the Letter of Credit
Outstandings, to exceed the Adjusted Total Revolving Loan Commitment; (B) any
changes to the Adjusted Percentage that would have become effective upon the
occurrence of a Bank Default but that did not become effective as a result of
the preceding clause (A) shall become effective on the first date after the
occurrence of the relevant Bank Default on which the sum of (i) the aggregate
outstanding principal amount of the Revolving Loans of all Non-Defaulting Banks
plus (ii) the aggregate outstanding principal amount of Swingline Loans plus
(iii) the Letter of Credit Outstandings is equal to or less than the Adjusted
Total Revolving Loan Commitment; and (C) if (i) a Non-Defaulting Bank's Adjusted
Percentage is changed pursuant to the preceding clause (B) and (ii) any
repayment of such Bank's Revolving Loans, or of Unpaid Drawings with respect to
Letters of Credit or of Swingline Loans, that were made during the period
commencing after the date of the relevant Bank Default and ending on the date of
such change to its Adjusted Percentage must be returned to the Borrowers as a
preferential or similar payment in any bankruptcy or similar proceeding of the
Borrowers, then the change to such Non-Defaulting Bank's Adjusted Percentage
effected pursuant to said clause (B) shall be reduced to that positive change,
if any, as would have been made to its Adjusted Percentage if (x) such
repayments had not been made and (y) the maximum change to its Adjusted
Percentage would have resulted in the sum of the outstanding principal of
Revolving Loans made by such Bank plus such Bank's new Adjusted Percentage of
the outstanding principal amount of Swingline Loans and of Letter of Credit
Outstandings equaling such Bank's Revolving Loan Commitment at such time.
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"Adjusted Total Revolving Loan Commitment" shall mean at any time the Total
Revolving Loan Commitment less the aggregate Revolving Loan Commitments of all
Defaulting Banks.
"Administrative Agent" shall mean Bankers Trust Company, in its capacity as
Administrative Agent for the Banks hereunder, and shall include any successor to
the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other Person
(including, for purposes of Section 9.06 only, all directors, officers and
partners of such Person) directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person; provided, however,
that for purposes of Section 9.06, an Affiliate of Furniture Brands shall
include any Person that directly or indirectly owns more than 5% of any class of
the capital stock of Furniture Brands and any officer or director of Furniture
Brands or any such Person. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agents" shall mean any of the Administrative Agent, the Collateral Agent,
the Documentation Agent and the Syndication Agent.
"Agreement" shall mean this Credit Agreement, as modified, supplemented,
amended, restated, extended, renewed or replaced from time to time.
"Alternate Currency" shall mean each of Deutsche Marks, Dutch Guilders,
Japanese Yen, Hong Kong Dollars, Korean Won, Mexican Pesos, Canadian Dollars,
French Francs and British Pounds Sterling and such other currencies which are
readily convertible into Dollars.
"Alternate Receivables Purchase Agreement" shall mean that Receivables
Purchase Agreement, dated as of November 15, 1994, among the Receivables
Subsidiary, as Seller, and Credit Lyonnais, as Purchaser and Agent, as amended
and restated as of December 29, 1995, as same may be further amended, modified
or supplemented from time to time in compliance with Section 9.10, or as
replaced in compliance with the definition of Receivables Facility.
"Applicable Margin" shall mean (A) in the case of Revolving Loans, a
percentage per annum equal to (i) in the case of Base Rate Loans, 0.125% and
(ii) in the case of Eurodollar Loans, 1.125%, in each case reduced (but not
below zero) by the then applicable Reduction Percentage, if any, and (B) in the
case of Term Loans, a percentage per annum equal to (i) in the case of Base Rate
Loans, 0.75% and (ii) in the case of Eurodollar Loans, 1.75%.
"Armstrong Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated as of November 18, 1995, by and among Armstrong World
Industries, Inc., Armstrong Enterprises, Inc. and Furniture Brands.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit L (appropriately
completed).
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"Atlantic" shall mean Atlantic Asset Securitization Corp., a Delaware
corporation.
"Atlantic Receivables Purchase Agreement" shall mean the Receivables
Purchase Agreement, dated as of November 15, 1994, among the Receivables
Subsidiary, Atlantic, as Purchaser, and Credit Lyonnais, as Agent, as amended
and restated as of December 29, 1995 as same may be further amended, modified or
supplemented from time to time.
"Authorized Representative" shall mean, with respect to (i) delivering
Notices of Borrowing, Notices of Conversion, Letter of Credit Requests and
similar notices, any person or persons that has or have been authorized by the
respective boards of the Borrowers to deliver such notices pursuant to this
Agreement and that has or have appropriate signature cards on file with the
Administrative Agent, BTCo and each Issuing Bank; (ii) delivering financial
information and officer's certificates pursuant to this Agreement, any financial
officer of Furniture Brands and (iii) any other matter in connection with this
Agreement or any other Credit Document, any officer (or a person or persons so
designated by any two officers) of Furniture Brands.
"Available Basket Amount" shall mean, on any date of determination, an
amount equal to zero, plus (i) $50,000,000, plus (ii) all Net Cash Proceeds
received by Furniture Brands from issuances of common stock or Qualified
Preferred Stock by Furniture Brands (including pursuant to any exercise of
options or warrants to purchase such stock) after June 30, 1998 plus (iii) the
Consolidated Cumulative 50% Net Income Amount, minus (iv) any amounts used to
effect Permitted Acquisitions pursuant to clause (B)(x) of Section 9.02(vi)
after the Fourth Restatement Effective Date and on or prior to such date, minus
(v) any Dividend payments made by Furniture Brands pursuant to Section 9.03(ii)
after the Fourth Restatement Effective Date and on or prior to such date, minus
(vi) any Investments by the Borrowers or their Restricted Subsidiaries pursuant
to Section 9.05(vii) after the Fourth Restatement Effective Date and on or prior
to such date, minus (vii) any Restricted Junior Payments made by Furniture
Brands or its Restricted Subsidiaries after the Fourth Restatement Effective
Date and on or prior to such date pursuant to Section 9.10(a) minus (viii)
Guaranty Payments made by the Borrowers or their Restricted Subsidiaries after
the Fourth Restatement Effective Date and on or prior to such date pursuant to
Section 9.10(b)(ii)(y)(B).
"Available Debt Proceeds Amount" shall mean, on any date of determination,
an amount equal to zero, plus (i) all Net Cash Proceeds received by the
Borrowers after the Fourth Restatement Effective Date from the issuance
Permitted Unsecured Indebtedness pursuant to Section 9.04(ii) retained by any of
the Borrowers on or prior to such date and not required to be used to repay
Loans on or prior to such date pursuant to Section 4.02(A)(b), minus (ii) any
amounts used to effect Permitted Acquisitions pursuant to clause (B)(y) of
Section 9.02(vi) on or prior to such date; provided that, at the time of the
consummation of any Permitted Acquisition, the Available Debt Proceeds Amount
shall be increased by the face amount of Permitted Acquired Debt (not being
issued in return for Net Cash Proceeds) being incurred pursuant thereto and by
the aggregate principal amount of Permitted Unsecured Indebtedness being
directly issued as consideration in respect of such Permitted Acquisition (so
long as no Net Cash Proceeds are received in connection therewith), which
increase in the Available Debt Proceeds Amount shall be reduced to zero
immediately upon the consummation of the respective Permitted Acquisition.
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"Bank" shall mean each financial institution listed on Schedule I, as well
as any Person which becomes a "Bank" hereunder pursuant to 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been retracted) of
a Bank, in violation of this Agreement, to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.03(c) or (ii) a Bank having notified in
writing the Borrowers and/or the Administrative Agent that it does not intend to
comply with its obligations under Section 1.01 or Section 2 in the case of
either clause (i) or (ii), as a result of any takeover of such bank by any
regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in excess of
the Adjusted Certificate of Deposit Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean each Loan designated or deemed designated as
such by the Borrowers at the time of the incurrence thereof or conversion
thereto.
"Borrowers" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean the incurrence of (i) Swingline Loans by the
Borrower from BTCo on a given date or (ii) one Type of Loan of a single Tranche
by the Borrower from all of the Banks having Commitments of the respective
Tranche on a pro rata basis on a given date (or resulting from conversions on a
given date), having in the case of Eurodollar Loans the same Interest Period;
provided that Base Rate Loans incurred pursuant to Section 1.10(b) shall be
considered part of any related Borrowing of Eurodollar Loans.
"Broyhill" shall have the meaning provided in the first paragraph of this
Agreement.
"BTCo" shall mean Bankers Trust Company in its individual capacity.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles, including all such expenditures with
respect to fixed or capital assets (including, without limitation, expenditures
for maintenance and repairs which should be capitalized in accordance with
generally accepted accounting principles) and the amount of Capitalized Lease
Obligations incurred by such Person.
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"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof, the District of Columbia or any foreign jurisdiction
having capital, surplus and undivided profits aggregating in excess of
$200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more
than 90 days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper issued by any Person incorporated in the
United States rated at least A-1 or the equivalent thereof by Standard & Poor's
Rating Services or at least P-1 or the equivalent thereof by Moody's Investors
Service, Inc. and in each case maturing not more than one year after the date of
acquisition by such Person, (v) investments in money market funds substantially
all of whose assets are comprised of securities of the types described in
clauses (i) through (iv) above and (vi) demand deposit accounts maintained in
the ordinary course of business not in excess of $100,000 in the aggregate.
"Cash Management System" shall mean the "Cash Management System" as defined
in the Original Credit Agreement.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same may be amended from time to time, 42
U.S.C. ss. 9601 et seq.
"Change of Control" shall mean the occurrence of any of the following: (i)
Furniture Brands shall at any time cease to own 100% of the capital stock of any
of Broyhill, Lane or Thomasville, (ii) the board of directors of Furniture
Brands shall cease to consist of a majority of Continuing Directors or (iii) any
Person, entity or "group" (as such term is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) is or becomes the beneficial owner
of an amount of outstanding Voting Stock of Furniture Brands in excess of 25% of
the total amount of fully diluted shares of outstanding Voting Stock of
Furniture Brands.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purported to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral, all Mortgaged
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Properties (unless and until released pursuant to Section 13.20), all cash and
Cash Equivalents delivered as collateral pursuant to Section 4.02 or 10 hereof
and all Additional Collateral, if any.
"Collateral Agent" shall mean the Administrative Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning provided in the
Existing Credit Agreement.
"Commitment" shall mean any of the commitments of any Bank, i.e., whether
the Term Loan Commitment or the Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in Section 3.01(a).
"Commitment Commission End Date" shall have the meaning provided in the
definition of `Commitment Commission Reduction Percentage'.
"Commitment Commission Reduction Percentage" shall mean .125% on and from
the Third Restatement Effective Date through July 30, 1997 (or such earlier date
on which the Borrowers deliver to the Administrative Agent a certificate
containing the calculations of Leverage Ratio for the fiscal quarter ended June
30, 1997, and thereafter shall mean, from and after each day of delivery of any
certificate delivered in accordance with the following sentence indicating an
entitlement to a Commitment Commission Reduction Percentage other than zero
(each, a "Commitment Commission Start Date") to and including the applicable
Commitment Commission End Date described below, the percentage set forth below
opposite the Leverage Ratio indicated to have been achieved in any certificate
delivered in accordance with the following sentence:
Leverage Commitment Commission
Ratio Reduction Percentage
Equal to or 0%
greater than
4.00:1
Equal to or .125%
greater than
3.50:1 but less
than 4.00:1
Equal to or .250%
greater than
2.50:1 but less
than 3.50:1
Less than 2.50:1 .375%
From and after the date of the delivery of the certificate referenced above for
the fiscal quarter ended June 30, 1997, the Leverage Ratio shall be determined
based on the delivery of a certificate of the Borrowers by an Authorized
Representative of the Borrowers to the Administrative Agent, within 30 days of
the last day of any fiscal quarter of Furniture Brands (beginning after the
fiscal quarter ended on June 30, 1997, based on calculations made at the end of
each fiscal quarter commencing with the fiscal quarter ended June 30, 1997),
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which certificate shall set forth the calculation of the Leverage Ratio for the
fiscal quarter ended immediately prior to the relevant Commitment Commission
Start Date and the Commitment Commission Reduction Percentage which shall be
thereafter applicable (until same is changed or ceases to apply in accordance
with the following sentences). The Commitment Commission Reduction Percentage so
determined shall apply, except as set forth in the succeeding sentence, from the
Commitment Commission Start Date to the earlier of (x) the date on which the
next certificate is delivered to the Administrative Agent and (y) the date which
is 30 days following the last day of the fiscal quarter in which the previous
Commitment Commission Start Date occurred (the "Commitment Commission End
Date"), at which time, if no certificate has been delivered to the
Administrative Agent indicating an entitlement to a Commitment Commission
Reduction Percentage other than zero (and thus commencing a new Commitment
Commission Start Date), the Commitment Commission Reduction Percentage shall be
reduced to zero. Notwithstanding anything to the contrary contained above in
this definition, the Commitment Commission Reduction Percentage shall be reduced
to zero at all times during which there shall exist an Event of Default.
"Commitment Commission Start Date" shall have the meaning provided in the
definition of `Commitment Commission Reduction Percentage'.
"Concentration Account" shall have the meaning provided in the Security
Agreement.
"Consolidated Cumulative Net Income Period" shall mean each period
consisting of a fiscal quarter of Furniture Brands ending after June 30, 1998
and for which the related financial statements required to be delivered pursuant
to Section 8.01(b) or (c) of this Agreement have theretofore been delivered.
"Consolidated Cumulative 50% Net Income Amount" shall mean, at any date an
amount determined on a cumulative basis equal to (i) the sum of 50% of
Consolidated Net Income for all Consolidated Cumulative Net Income Periods
ending after June 30, 1998 and prior to such date of determination for which
Consolidated Net Income was a positive number, minus (ii) 100% of Consolidated
Net Income for all Consolidated Cumulative Net Income Periods ending after June
30, 1998 and prior to such date of determination for which Consolidated Net
Income was a negative number.
"Consolidated Debt" shall mean all Indebtedness of Furniture Brands and its
Restricted Subsidiaries determined on a consolidated basis with respect to
borrowed money or other obligations of such Persons which would appear on the
balance sheet of such Persons as indebtedness (including unreimbursed drawings
under Letters of Credit and unreimbursed payments under Acceptances, but
excluding Consolidated Current Liabilities and deferred tax and pension
liabilities), plus (i) all Contingent Obligations of such Persons incurred after
the Third Restatement Effective Date (excluding the Thomasville lease guarantees
upon which payments are not being made and obligations resulting from extensions
or renewals of the leases guaranteed by the Surviving Guarantees made in
compliance with this Agreement), plus (ii) all Contingent Obligations with
respect to any Surviving Guaranty on and after the date on which Furniture
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Brands made any payment in respect of such Surviving Guaranty, minus (iii) the
cash in excess of $10,000,000 as shown on the consolidated balance sheet of
Furniture Brands and its Restricted Subsidiaries as of the date of
determination.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net Income
of Furniture Brands and its Restricted Subsidiaries, determined on a
consolidated basis, before Consolidated Net Interest Expense (to the extent
deducted in arriving at Consolidated Net Income) and provision for taxes or
gains or losses from sales of assets other than inventory sold in the ordinary
course of business, in each case that were included in arriving at Consolidated
Net Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation, in each case that were deducted in arriving at Consolidated EBIT
for such period.
"Consolidated Net Income" shall mean, for any period, the net after tax
income of Furniture Brands and its Restricted Subsidiaries determined on a
consolidated basis, without giving effect to any extraordinary gains or losses.
"Consolidated Net Interest Coverage Ratio" for any period shall mean the
ratio of Consolidated EBITDA to Consolidated Net Interest Expense for such
period.
"Consolidated Net Interest Expense" shall mean, for any period, the total
consolidated interest expense of Furniture Brands and its Restricted
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion of Capitalized
Lease Obligations of Furniture Brands and its Restricted Subsidiaries
representing the interest factor for such period, and capitalized interest
expense, but excluding the amortization of any deferred financing costs and all
amounts in respect of the Interest Rate Protection Agreements, all determined on
a consolidated basis.
"Consolidated Senior Debt" at any time shall mean Consolidated Debt on such
date, adjusted by excluding therefrom the amount of Permitted Subordinated
Indebtedness reflected in Consolidated Debt on such date.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
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determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Bank" shall mean each Existing Bank with outstanding Term Loans
or a Revolving Loan Commitment under this Agreement (immediately upon giving
effect to the Fourth Restatement Effective Date).
"Continuing Directors" shall mean the Directors of Furniture Brands on the
Fourth Restatement Effective Date (and immediately after giving effect to the
Transaction) and each other Director if such Director's nomination for election
to the Board of Directors of Furniture Brands is recommended by a majority of
the then Continuing Directors.
"Converse" shall mean Converse Inc., a Delaware corporation.
"Credit Documents" shall mean this Agreement and, after the execution and
delivery thereof pursuant to the terms of this Agreement, each Note, each
Security Document and the Subsidiary Guaranty and, after the execution and
delivery thereof, each additional guaranty or security document executed
pursuant to Section 8.11.
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit.
"Credit Lyonnais" shall have the meaning provided in the first paragraph of
this Agreement.
"Credit Party" shall mean the Borrowers and each Subsidiary Guarantor.
"Currency Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against the fluctuations in currency values.
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank Default
is in effect.
"Disqualified Preferred Stock" means any Preferred Stock of Furniture
Brands which is not Qualified Preferred Stock.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person or Qualified Preferred Stock of
Furniture Brands paid as a pay-in-kind Dividend on any Qualified Preferred Stock
of Furniture Brands) or cash to its stockholders as such, or redeemed, retired,
purchased or otherwise acquired, directly or indirectly, for a consideration any
shares of any class of its capital stock outstanding on or after the Fourth
Restatement Effective Date (or any options or warrants issued by such Person
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with respect to its capital stock), or set aside any funds for any of the
foregoing purposes, or shall have permitted any of its Subsidiaries to purchase
or otherwise acquire for a consideration any shares of any class of the capital
stock of such Person outstanding on or after the Fourth Restatement Effective
Date (or any options or warrants issued by such Person with respect to its
capital stock). Without limiting the foregoing, "Dividends" with respect to any
Person shall also include all payments made or required to be made during any
period by such Person with respect to any stock appreciation rights, plans,
equity incentive or achievement plans or any similar plans or setting aside of
any funds for the foregoing purposes, except to the extent such payments have
reduced Consolidated EBITDA during the respective period.
"Documentation Agent" shall mean Credit Lyonnais, in its capacity as
Documentation Agent for the Banks hereunder.
"Documents" shall mean the Credit Documents.
"Dollar Equivalent" shall mean, with respect to any currency other than
Dollars, the amount of Dollars into which such currency could be converted at
the Exchange Rate.
"Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.
"Domestic Subsidiary" with respect to any Person shall mean a Subsidiary
thereof other than a Foreign Subsidiary thereof.
"Domestic Wholly-Owned Subsidiary" of any Person shall mean each
Wholly-Owned Subsidiary of such Person which is also a Domestic Subsidiary.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Eligible Transferee" shall mean and include a commercial bank, mutual
fund, financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act).
"Employee Stock Option Plan" shall mean the Furniture Brands Incorporated
1992 Stock Option Plan.
"End Date" shall have the meaning provided in the definition of Reduction
Percentage.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Law" means any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
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order, consent decree or judgment, to the extent binding on the Borrowers or any
of their respective Subsidiaries, relating to the environment, employee health
and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA;
the Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss. 3803 et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the Emergency Planning
and the Community Right-to-Know Act of 1986, 42 U.S.C. ss. 11001 et seq., the
Hazardous Material Transportation Act, 49 U.S.C. ss. 1801 et seq. and the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); and any state and local
or foreign counterparts or equivalents, in each case as amended from time to
time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrowers or any Subsidiary of the Borrowers
would be deemed to be a "single employer" (i) within the meaning of Section
414(b), (c), (m) or (o) of the Code or (ii) as a result of the Borrowers or any
Subsidiary of the Borrowers being or having been a general partner of such
person.
"Eurodollar Loan" shall mean each Loan designated as such by the Borrowers
at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class banks
in the New York interbank Eurodollar market by BTCo for Dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the Eurodollar Loan of BTCo with maturities comparable to the Interest
Period applicable to such Eurodollar Loan commencing two Business Days
thereafter as of 10:00 A.M. (New York time) on the date which is two Business
Days prior to the commencement of such Interest Period, divided (and rounded off
to the nearest 1/16 of 1%) by (b) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Exchange Rate" shall mean, when converting any amount denominated in a
currency other than Dollars into Dollars, the rate determined in good faith by
BTCo at the opening of business (or close of business in the case of
determinations of reimbursement obligations with respect to Drawings) in New
York, on the date as to which any determination thereof is to be made, as the
spot rate at which such currency is offered for sale to BTCo against delivery of
Dollars by BTCo. If for any reason the Exchange Rate for any currency cannot be
calculated as provided above, BTCo shall calculate the Exchange Rate on such
basis as it deems fair and equitable. In determining the Stated Amount of any
Letter of Credit (A) for purposes of Sections 1.01(b), 1.01(c), 2.01(d) and
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4.02(A)(a), the Exchange Rate shall be calculated (x) on the Fourth Restatement
Effective Date, (y) on the first Business Day of each calendar month thereafter
and (z) on such other day as BTCo may, in its sole discretion, consider
appropriate and (B) for purposes of Section 3.01, the Exchange Rate shall be
calculated on the Fourth Restatement Effective Date and the first Business Day
of each calendar month thereafter. The Exchange Rate for all reimbursement
obligations with respect to Letters of Credit (including without limitation
pursuant to Sections 2.04 and 2.05) shall be determined by using the Exchange
Rate as in effect on the date the respective Unpaid Drawing was paid by such
Issuing Bank.
"Excluded Assets" shall mean each of the assets listed on Schedule XVI.
"Existing Banks" shall mean each Person which was a Bank under, and as
defined in, the Existing Credit Agreement.
"Existing Credit Agreement" shall have the meaning provided in the recitals
to this Agreement.
"Existing Indebtedness" shall have the meaning provided in Section 7.22.
"Existing IRBs" shall mean $8,000,000 Industrial Development Authority of
Fluvanna County, Virginia Floating Rate Demand Industrial Development Revenue
Bonds (Thomasville Furniture Industries, Inc. Project) Series 1986.
"Existing Letters of Credit" shall mean the letters of credit listed on
Schedule XII and previously issued under the Existing Credit Agreement.
"Existing Loans" shall mean the Existing Revolving Loans and the Existing
Swingline Loans.
"Existing Mortgage Policies" shall mean each mortgage insurance policy
issued with respect to an Existing Mortgage under the Original Credit Agreement,
the First Restated Credit Agreement, the Second Restated Credit Agreement or the
Existing Credit Agreement.
"Existing Mortgaged Properties" shall mean all Real Property of the
Borrowers and their respective Subsidiaries listed on Schedule III and
designated on said Schedule III as an Existing Mortgaged Property.
"Existing Mortgages" shall mean all Mortgages granted by the Borrowers
pursuant to the Original Credit Agreement, the First Restated Credit Agreement,
the Second Restated Credit Agreement or the Existing Credit Agreement and which
have not been released by the lenders thereunder prior to the Fourth Restatement
Effective Date, which Mortgages shall apply to the Existing Mortgaged
Properties.
"Existing Receivables Facility" shall mean the Receivables Facility as
defined in the Existing Credit Agreement.
"Existing Revolving Loans" shall mean the "Revolving Loans" under, and as
defined in, the Existing Credit Agreement.
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"Existing Swingline Loans" shall mean the "Swingline Loans" under, and as
defined in, the Existing Credit Agreement.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating interest rate
equal for each day during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in Section
3.01.
"FIRREA" shall mean Financial Institution Reform, Recovery and Enforcement
Act of 1989.
"First Restated Credit Agreement" shall mean the "Existing Credit
Agreement" under, and as defined in, the Second Restated Credit Agreement.
"First Restatement Effective Date" shall mean the "Restatement Effective
Date" as defined in the First Restated Credit Agreement.
"Fiscal Year" shall mean each fiscal year of Furniture Brands ending on
December 31 of each calendar year.
"Florsheim" shall mean The Florsheim Shoe Company, a Delaware corporation.
"Fluvanna Letter of Credit" shall mean a letter of credit issued by
NationsBank pursuant to the Existing Agreement on or after the First Restatement
Effective Date in support of the Existing IRBs.
"Foreign Pension Plan" means any plan, fund (including, without limitation,
any superannuation fund) or other similar program established or maintained
outside the United States of America by any Borrower or any one or more of their
respective Subsidiaries primarily for the benefit of employees of such Borrower
or such Subsidiary residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Sales Corporation" shall mean a Wholly-Owned Foreign Subsidiary of
Furniture Brands and/or its Restricted Subsidiaries created for the purpose of
effecting sales of goods and/or services in foreign countries.
"Foreign Subsidiary" with respect to any Person shall mean each Subsidiary
thereof that is incorporated under the laws of any jurisdiction other than the
United States of America, any State thereof, the United States Virgin Islands or
Puerto Rico.
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"Fourth Restatement Effective Date" shall have the meaning
provided in Section 13.10.
"Furniture Brands" shall have the meaning provided in the first paragraph
of this Agreement.
"Furniture Brands Common Stock" shall mean the common stock of Furniture
Brands.
"Guaranty Payments" shall have the meaning provided in Section 9.10(b).
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing any level of polychlorinated biphenyls, and radon
gas; (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority under Environmental Laws.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit issued
for the account of such Person and all unpaid drawings in respect of such
letters of credit, (iii) all Indebtedness of the types described in clause (i),
(ii), (iv), (v), (vi) or (vii) of this definition secured by any Lien on any
property owned by such Person, whether or not such Indebtedness has been assumed
by such Person (to the extent of the value of the respective property), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vi) all Contingent Obligations of such
Person and (vii) all obligations under any Interest Rate Protection Agreement or
under any similar type of agreement.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement, interest rate floor agreement or other similar agreement or
arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean BTCo and any Bank which at the request of the
Borrowers and with the consent of the Administrative Agent (which shall not be
unreasonably withheld or delayed) agrees, in such Bank's sole discretion, to
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become an Issuing Bank for the purpose of issuing Letters of Credit pursuant to
Section 2. On the Fourth Restatement Effective Date the sole Issuing Banks are
(x) BTCo and (y) NationsBank with respect to the Fluvanna Letter of Credit.
"Judgment Currency" shall have the meaning provided in Section 13.21.
"Judgment Currency Conversion Date" shall have the meaning provided in
Section 13.21.
"Lane" shall have the meaning provided in the first paragraph of this
Agreement.
"L/C Supportable Obligations" shall mean obligations of Furniture Brands or
its Restricted Subsidiaries incurred in the ordinary course of business with
respect to insurance obligations and workers' compensation, surety bonds and
other similar statutory obligations, and all obligations customarily supported
by Standby Letters of Credit and satisfactory to the Administrative Agent.
"Leaseholds" of any Person means all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a) and shall include Trade Letters of Credit and Standby Letters of Credit.
"Letter of Credit Facing Fee" shall have the meaning provided
in Section 3.01(c).
"Letter of Credit Fee" shall have the meaning provided in Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit which have not
terminated and Acceptances which have not matured or been prepaid and (ii) the
amount of all Unpaid Drawings.
"Letter of Credit Request" shall mean any request for the issuance of a
Letter of Credit made by the Borrowers pursuant to Section 2.03(a), including
Trade Letter of Credit Requests and Standby Letter of Credit Requests.
"Letter of Credit Service Agreement" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean on any date the ratio of (i) Consolidated Debt
on such date to (ii) Consolidated EBITDA for the period of four consecutive
fiscal quarters most recently ended on or prior to such date.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
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"Loan" shall mean each Term Loan, each Revolving Loan and each Swingline
Loan.
"Majority Banks" of any Tranche shall mean those Non-Defaulting Banks which
would constitute the Required Banks under, and as defined in, this Agreement if
all outstanding Obligations of the other Tranches under this Agreement were
repaid in full and all Commitments with respect thereto were terminated.
"Mandatory Borrowing" shall have the meaning provided in Section 1.01(d).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrowers taken as a whole or the Borrowers and
their Restricted Subsidiaries taken as a whole, it being understood that any
determination of whether a Material Adverse Effect has occurred shall take into
account, inter alia, (x) any available indemnities and (y) the timing and
likelihood of payments thereunder.
"Maturity Date" shall mean, with respect to any Tranche of Loans, the Term
Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline Expiry
Date, as the case may be.
"Maximum Swingline Amount" shall mean $25,000,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans $1,000,000
and, if greater, in an integral multiple of $500,000; (ii) for Term Loans
$1,000,000 and, if greater, in an integral multiple of $1,000,000; and (iii) for
Swingline Loans, $500,000 and, if greater, in an integral multiple of $100,000.
"Mortgage" shall mean and include each Existing Mortgage, as amended
pursuant to the respective Mortgage Amendment, and, after the execution and
delivery thereof, each Additional Mortgage, in each case as same may be amended,
modified or supplemented from time to time.
"Mortgage Amendments" shall have the meaning provided in Section 5.17.
"Mortgage Policies" shall mean and include each Existing Mortgage Policy
and, after the execution and delivery thereof, each mortgage insurance policy
issued with respect to an Additional Mortgaged Property.
"Mortgaged Property" shall mean each Existing Mortgaged Property and, after
the execution and delivery of any Additional Mortgage, shall include the
respective Additional Mortgaged Property.
"Mortgage Release Date" shall have the meaning provided in Section 13.20.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA, which is maintained or contributed to by (or to which there
is an obligation to contribute of) the Borrowers or a Subsidiary of the
Borrowers or an ERISA Affiliate and, except for a Spunoff Plan, each such plan
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for the five year period immediately following the latest date on which the
Borrowers, any Subsidiaries of the Borrowers or any ERISA Affiliates maintained,
contributed to or had an obligation to contribute to such plan.
"NationsBank" shall have the meaning provided in the first paragraph of
this Agreement.
"Net Cash Proceeds" shall mean for any event requiring a mandatory
repayment pursuant to Section 4.02, the gross cash proceeds (including any cash
received by way of deferred payment pursuant to a promissory note, receivable or
otherwise, but only as and when received) received from such event, net of
reasonable transaction costs (including, as applicable, any underwriting,
brokerage or other customary commissions and reasonable legal, advisory and
other fees and expenses associated therewith) received from any such event.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from any sale of assets, net of reasonable transaction costs
(including, without limitation, any underwriting, brokerage or other customary
selling commissions and reasonable legal, advisory and other fees and expenses,
including title and recording expenses, associated therewith) and payments of
unassumed liabilities relating to the assets sold at the time of, or within 30
days after, the date of such sale, the amount of such gross cash proceeds
required to be used to repay any Indebtedness (other than Indebtedness of the
Banks pursuant to this Agreement) which is secured by the respective assets
which were sold, and the estimated marginal increase in income taxes which will
be payable by Furniture Brands' consolidated group with respect to the fiscal
year in which the sale occurs as a result of such sale; but excluding any
portion of any such gross cash proceeds which Furniture Brands determines in
good faith should be reserved for post-closing adjustments (to the extent
Furniture Brands delivers to the Banks a certificate signed by its chief
financial officer, controller or chief accounting officer as to such
determination), it being understood and agreed that on the day that all such
post-closing adjustments have been determined, (which shall not be later than
six months following the date of the respective asset sale), the amount (if any)
by which the reserved amount in respect of such sale or disposition exceeds the
actual post-closing adjustments payable by Furniture Brands or any of its
Restricted Subsidiaries shall constitute Net Sale Proceeds on such date received
by Furniture Brands and/or any of its Restricted Subsidiaries from such sale,
lease, transfer or other disposition.
"New Bank" shall mean each of the Persons listed on Schedule I that is not
a Continuing Bank.
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice Office" shall mean the office of the Administrative Agent located
at 130 Liberty Street, New York, New York 10006, Attention: Anthony LoGrippo or
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such other office as the Administrative Agent may hereafter designate in writing
as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative Agent, the
Collateral Agent, any Issuing Bank or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Original Credit Agreement" shall mean the "Original Credit Agreement" as
defined in the First Restated Credit Agreement.
"Original Effective Date" shall mean the Effective Date as defined in, the
Original Credit Agreement.
"Participant" shall have the meaning provided in Section 2.04(a).
"Pay-In-Kind Preferred Stock" means any Preferred Stock where all dividends
with respect thereto may, at the option of the issuer thereof, be paid through
the issuance of additional shares of preferred stock of the same series.
"Payment Office" shall mean the office of the Administrative Agent located
at One Bankers Trust Plaza, New York, New York 10006, or such other office as
the Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction (expressed as a
percentage) the numerator of which is the Revolving Loan Commitment of such Bank
at such time and the denominator of which is the Total Revolving Loan Commitment
at such time, provided that if the Percentage of any Bank is to be determined
after the Total Revolving Loan Commitment has been terminated, then the
Percentages of the Banks shall be determined immediately prior (and without
giving effect) to such termination.
"Permitted Acquired Debt" shall mean Indebtedness (other than Permitted
Unsecured Indebtedness incurred pursuant to Section 9.04(ii) assumed or acquired
in connection with a Permitted Acquisition as permitted under this Agreement.
"Permitted Acquisition" shall mean the acquisition by the Borrowers or any
of their Restricted Subsidiaries of assets constituting part of or an entire
business or division of any Person not already a Subsidiary of the Borrowers or
of 100% of the capital stock of any such Person which Person shall, as a result
of such acquisition, become a Restricted Subsidiary, provided that (A) the
consideration paid by the Borrowers and/or their Restricted Subsidiaries
consists solely of cash or Furniture Brands Common Stock or Qualified Preferred
Stock, the issuance of Indebtedness otherwise permitted in Section 9.04 and the
assumption/acquisition of any Permitted Acquired Debt (calculated at face value)
relating to such business, division or Person, (B) the assets acquired, or the
business of the Person whose stock is acquired, shall be in the same line of
business in which the Borrowers and their Restricted Subsidiaries are already
engaged, and (C) in the case of the acquisition of 100% of the capital stock of
any Person, such Person shall own no capital stock of any other Person unless
either (x) such Person owns 100% of the capital stock of such other Person or
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(y) (1) such Person and/or its Wholly-Owned Subsidiaries own 80% of the
consolidated assets or capital stock of such Person and its Subsidiaries and (2)
any non-Wholly Owned Subsidiary of such Person was non-Wholly Owned prior to the
date of such Permitted Acquisition of such Person (it being understood and
agreed that investments by Subsidiaries shall be permitted in accordance with
the provisions of Section 9.05). Notwithstanding anything to the contrary
contained in the immediately preceding sentence, any acquisition shall be a
Permitted Acquisition only if all requirements of Sections 8.14 and 9.02(vi)
applicable to Permitted Acquisitions are met with respect thereto.
"Permitted Debt Agreements" shall have the meaning provided in the Existing
Credit Agreement.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged Property,
such exceptions to title as are set forth in the title insurance policy or title
commitment delivered with respect thereto, all of which exceptions must be
acceptable to the Administrative Agent in its reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Permitted Subordinated Indebtedness" shall mean any Permitted Unsecured
Indebtedness which is subordinated on terms reasonably satisfactory to the
Administrative Agent and the Required Banks to all Obligations hereunder and any
other obligations secured pursuant to the Security Documents and incurred by the
Borrowers, so long as (i) such Indebtedness shall require no amortization,
sinking fund payment or any other scheduled maturity of the principal amount
thereof on any date which is earlier than the date occurring one year after the
Term Loan Maturity Date and (ii) all other provisions of such Indebtedness
(including, without limitation, covenants, defaults and remedies) in the
documents governing or evidencing the same are reasonably satisfactory to the
Administrative Agent and the Required Banks. To the extent the preceding
sentence requires terms of Permitted Subordinated Indebtedness to be
satisfactory to the Required Banks, such terms shall be deemed satisfactory to
the Required Banks unless objected to by the Required Banks in writing on or
prior to the date which is 20 Business Days after the documentation therefor is
delivered to the Banks. Notwithstanding anything to the contrary contained above
in the definition of "Permitted Subordinated Indebtedness", all Permitted
Subordinated Indebtedness shall be required to constitute Indebtedness for
borrowed money (where 100% of the consideration received for the issuance of
such Indebtedness is cash), except that Permitted Subordinated Indebtedness may
be issued directly as consideration in connection with a Permitted Acquisition.
"Permitted Unsecured Indebtedness" shall mean any general unsecured
Indebtedness incurred by the Borrowers, so long as (i) based on calculations
made by the Borrowers on a Pro Forma Basis after giving effect to the incurrence
of such Indebtedness, no Default or Event of Default will exist under, or would
have existed under the periods covered by, the financial covenants contained in
Sections 9.08 and 9.09 of this Agreement, (ii) based on good faith projections
prepared by the Borrowers for the period from the date of the incurrence of such
Indebtedness to the date which is one year thereafter, the level of financial
performance measured by the covenants set forth in Sections 9.08 and 9.09 shall
be better than or equal to such level as would be required to provide that no
Default or Event of Default would exist under the financial covenants contained
in Sections 9.08 and 9.09 of this Agreement as compliance with such covenants
would be required through the date which is one year from the date of the
incurrence of such Indebtedness, (iii) Furniture Brands shall furnish to the
Administrative Agent for distribution to each of the Banks an officer's
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certificate by the chief financial officer or treasurer of Furniture Brands
certifying to the best of his knowledge as to compliance with the requirements
of the preceding clauses (i) and (ii) and containing the pro forma calculations
required by the preceding clauses (i) and (ii), (iv) the average life of such
Indebtedness at the time of the incurrence thereof shall be at least one year
beyond the Term Loan Maturity Date (assuming maximum utilization thereof) and
(v) such Indebtedness shall not contain any provision (including, without
limitation, covenants, defaults and remedies) in the documents governing or
evidencing the same which, in the opinion of the Administrative Agent, are more
restrictive than the provisions in the Credit Documents. Notwithstanding
anything to the contrary contained above in the definition of "Permitted
Unsecured Indebtedness", all Permitted Unsecured Indebtedness shall be required
to constitute indebtedness for borrowed money where 100% of the consideration
received for the issuance for such Indebtedness is cash, except that Permitted
Unsecured Indebtedness may be issued directly as consideration in connection
with Permitted Acquisitions so long as the proviso to Section 9.04(ii) has been
complied with.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any single-employer plan, as defined in Section 4001 of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of), the Borrowers or a Subsidiary of the Borrowers or
an ERISA Affiliate, and except for a Spunoff Plan, each such plan for the five
year period immediately following the latest date on which the Borrowers, a
Subsidiary of the Borrowers or an ERISA Affiliate maintained, contributed or had
an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.08.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in the
Pledge Agreement.
"Pledged Securities" shall mean "Pledged Securities" as defined in the
Pledge Agreement.
"Preferred Stock," as applied to the capital stock of any Person, means
capital stock of such Person (other than common stock of such Person) of any
class or classes (however designed) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of capital
stock of any other class of such Person, and shall include any Qualified
Preferred Stock and Disqualified Preferred Stock.
"Prime Lending Rate" shall mean the rate which BTCo announces from time to
time as its prime lending rate, the Prime Lending Rate to change when and as
such prime lending rate changes. The Prime Lending Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. BTCo may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, as to any Person, for any of the following
events which occur subsequent to the commencement of a period for which the
financial effect of such event is being calculated, and giving effect to the
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event for which such calculation is being made, such calculation as will give
pro forma effect to such event as if same had occurred at the beginning of such
period of calculation, and
(i) for purposes of the foregoing calculation, the transaction giving
rise to the need to calculate the pro forma effect to any of the following
events shall be assumed to have occurred on the first day of the four
fiscal quarter period last ended before the occurrence of the respective
event for which such pro forma effect is being determined (the "Reference
Period"), and
(ii) in making any determination with respect to the incurrence or
assumption of any Indebtedness during the Reference Period or subsequent to
the Reference Period and on or prior to the date of the transaction
referenced in clause (i) above (the "Transaction Date"), (w) all
Indebtedness (including the Indebtedness incurred or assumed and for which
the financial effect is being calculated) incurred or permanently repaid
during the Reference Period shall be deemed to have been incurred or repaid
at the beginning of such period, (x) Consolidated Net Interest Expense of
such Person attributable to interest on any Indebtedness bearing floating
interest rates should be computed on a pro forma basis as if the rate in
effect on the Transaction Date had been the applicable rate for the entire
period, (y) Consolidated Net Interest Expense of such Person attributable
to interest on any Indebtedness under any revolving credit facility which
was in effect during the respective Reference Period shall be computed on a
pro forma basis based upon the average daily balance of such Indebtedness
outstanding during the applicable period (or, if shorter, the portion of
the period during which the revolving credit facility was in effect) and
(z) Consolidated Net Interest Expense will be increased or reduced by the
net cost (including amortization of discount) or benefit (after giving
effect to amortization of discount) associated with the Interest Rate
Protection Agreements, which will remain in effect for the twelve-month
period after the Transaction Date and which shall have the effect of fixing
the interest rate on the date of computation, and
(iii) in making any determination of Consolidated EBITDA, pro forma
effect shall be given to any Permitted Acquisition or Significant
Divestiture which occurred during the Reference Period or subsequent to the
Reference Period and prior to the Transaction Date, Consolidated EBITDA
shall be determined as if such Permitted Acquisition or Significant
Divestiture occurred on the first day of the Reference Period, taking into
account cost savings and expenses which would otherwise be accounted for as
an adjustment pursuant to Article 11 of Regulation S-X under the Securities
Act, as if such cost savings or expenses were realized on the first day of
the Reference Period.
"Projections" shall have the meaning provided in Section 7.05(e).
"Purchase and Contribution Agreement" shall mean the Purchase and
Contribution Agreement, dated as of November 15, 1994 as amended and restated as
of December 29, 1995, among Broyhill, Lane, Action and Thomasville and the
Receivables Subsidiary, as same may be further amended, modified or supplemented
from time to time.
"Qualified Preferred Stock" means any Pay-In-Kind Preferred Stock of
Furniture Brands, or any other Preferred Stock of Furniture Brands, the express
terms of which shall provide that Dividends thereon shall not be required to be
paid in cash at any time that such cash payment would be prohibited by the terms
of this Agreement (and any refinancings, replacements or extensions hereof) and
in either case which, by its terms (or by the terms of any security into which
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it is convertible or for which it is exchangeable), or upon the happening of any
event (including an event which would constitute a Change of Control), cannot
mature (excluding any maturity as the result of an optional redemption by the
issuer thereof) and is not mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, and is not redeemable, or required to be repurchased,
at the sole option of the holder thereof (including, without limitation, upon
the occurrence of an event which would constitute a Change of Control), in whole
or in part, on or prior to the first anniversary of the Term Loan Maturity Date.
"Quarterly Payment Date" shall mean the last Business Day of each June,
September, December and March, occurring after the Third Restatement Effective
Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C.ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.
"Receivables Documents" shall mean the Receivables Purchase Agreements, the
Purchase and Contribution Agreement and any related documentation entered into
by the Borrowers and their Restricted Subsidiaries, the Receivables Subsidiary
and/or the Receivables Purchasers in connection with the Receivables Facility.
"Receivables Facility" shall mean the arrangement pursuant to which (x)
each of Broyhill, Lane, Action and Thomasville and its respective Subsidiaries
from time to time sell accounts receivable to the Receivables Subsidiary and (y)
the Receivables Subsidiary sells interests in the receivables to the Receivables
Purchasers, or obtains subordinated loans secured by the receivables from the
Receivables Purchasers, as more fully set forth in the Receivables Documents.
"Receivables Facility Intercreditor Agreement" shall mean the Receivables
Facility Intercreditor Agreement dated as of November 17, 1994, as amended and
restated as of December 29, 1995, as further amended and restated as of
September 6, 1996, and as further amended and restated as of June 27, 1997 and
executed by the Collateral Agent, Credit Lyonnais and the Receivables
Subsidiary, as the same may be amended, modified or supplemented from time to
time.
"Receivables Purchase Agreements" shall mean and include the Atlantic
Receivables Purchase Agreement, the Alternate Receivables Purchase Agreement and
the Subordinated Loan Agreement.
"Receivables Purchaser" shall mean and include (i) with respect to the
Alternate Receivables Purchase Agreement, Credit Lyonnais and (ii) with respect
to the Atlantic Receivables Purchase Agreement, Atlantic and Credit Lyonnais and
(iii) with respect to the Subordinated Loan Agreement, Credit Lyonnais and their
respective successors and assigns (in the event that the Receivables Facility is
replaced, any replacement receivables purchasers shall be deemed to be the
Receivables Purchasers hereunder).
"Receivables Subsidiary" shall mean Interco Receivables Corp., the special
purpose subsidiary formed by Broyhill, Lane and Action and owned by Broyhill,
Lane, Action and Thomasville to purchase and receive contributions of
receivables from each of Broyhill, Lane, Action and Thomasville and their
respective other Restricted Subsidiaries pursuant to the Receivables Facility.
"Recovery Event" shall mean the receipt by Furniture Brands or any of its
Restricted Subsidiaries of any cash insurance proceeds or condemnation award
payable (i) by reason of theft, loss, physical destruction or damage or any
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other similar event with respect to any property or assets of the Borrowers or
any of its Subsidiaries and (ii) under any policy of insurance required to be
maintained under Section 8.03.
"Reduction Percentage" shall mean .125% on and from the Third Restatement
Effective Date through July 30, 1997 (or such earlier date on which the
Borrowers deliver to the Administrative Agent a certificate containing the
calculations of Leverage Ratio for the fiscal quarter ended June 30, 1997), and
thereafter shall mean, from and after each day of delivery of any certificate
delivered in accordance with the following sentence indicating an entitlement to
a Reduction Percentage other than zero (each, a "Start Date") to and including
the applicable End Date described below, the percentage set forth below opposite
the Leverage Ratio indicated to have been achieved in any certificate delivered
in accordance with the following sentence:
Leverage Interest
Ratio Reduction Discount
Equal to or
greater than 4.00:1 0%
Equal to or .125%
greater than
3.50:1 but less
than 4.00:1
Equal to or .250%
greater than
3.00:1 but less
than 3.50:1
Equal to or .375%
greater than
2.50:1 but less
than 3.00:1
Less than 2.50:1 .625%
From and after the date of the delivery of the certificate referenced above for
the fiscal quarter ended June 30, 1997, the Leverage Ratio shall be determined
based on the delivery of a certificate of the Borrowers by an Authorized
Representative of the Borrowers to the Administrative Agent, within 30 days of
the last day of any fiscal quarter of Furniture Brands (beginning after the
fiscal quarter ended on June 30, 1997, based on calculations made at the end of
each fiscal quarter commencing with the fiscal quarter ended June 30, 1997,
which certificate shall set forth the calculation of the Leverage Ratio for the
fiscal quarter ended immediately prior to the relevant Start Date and the
Reduction Percentage which shall be thereafter applicable (until same is changed
or ceases to apply in accordance with the following sentences). The Reduction
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Percentage so determined shall apply, except as set forth in the succeeding
sentence, from the Start Date to the earlier of (x) the date on which the next
certificate is delivered to the Administrative Agent and (y) the date which is
30 days following the last day of the fiscal quarter in which the previous Start
Date occurred (the "End Date"), at which time, if no certificate has been
delivered to the Administrative Agent indicating an entitlement to a Reduction
Percentage other than zero (and thus commencing a new Start Date), the Reduction
Percentage shall be reduced to zero. Notwithstanding anything to the contrary
contained above in this definition, the Reduction Percentage shall be reduced to
zero at all times during which there shall exist an Event of Default.
"Refinancing" shall mean all repayments and refinancings of Indebtedness
under the Existing Credit Agreement and the refinancing of all outstandings
pursuant to the Receivables Facility in connection with the Transaction.
"Register" shall have the meaning provided in Section 13.17.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Replaced Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation Section 2615.
"Required Appraisal" shall have the meaning provided in Section 8.11(g).
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Term Loans and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and Adjusted Percentage of Swingline Loans
and Letter of Credit Outstandings) represent greater than 50% of the sum of all
outstanding Term Loans and the Adjusted Total Revolving Loan Commitment (or
after the termination thereof, the sum of the then total outstanding Revolving
Loans of Non-Defaulting Banks and the aggregate Adjusted Percentages of all
Non-Defaulting Banks of the total outstanding Swingline Loans and Letter of
Credit Outstandings at such time).
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"Required Supermajority Banks" shall mean those Non-Defaulting Banks which
would constitute the Required Banks under, and as defined in, this Agreement if
the term "50%" contained therein were changed to "66-2/3%."
"Restricted Junior Payment" shall have the meaning provided in Section
9.10.
"Restricted Subsidiaries" shall mean, (x) all of the Subsidiaries of the
Borrowers and their respective Subsidiaries in existence on the Fourth
Restatement Effective Date and (y) any Subsidiary (other than an Unrestricted
Subsidiary) that is created, established or acquired after the Fourth
Restatement Effective Date.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(b).
"Revolving Loan Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I hereto directly below the column
entitled "Revolving Loan Commitment," as same may be (x) reduced from time to
time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to Section 1.13
or 13.04(b).
"Revolving Loan Maturity Date" shall mean September 15, 2001.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"SEC" shall have the meaning provided in Section 8.01(h).
"Second Restated Credit Agreement" shall mean the "Existing Credit
Agreement" under, and as defined in, the Existing Credit Agreement.
"Second Restatement Effective Date" shall mean September 6, 1996.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Security Agreement" shall have the meaning provided in Section 5.09.
"Security Agreement Collateral" shall mean all "Collateral" as defined in
the Security Agreement.
"Security Document" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage and, after the execution and delivery thereof, each
Additional Mortgage and each Additional Security Document.
"Senior Debt Leverage Ratio" shall mean on any date a ratio calculated as
provided in the definition of Leverage Ratio contained herein; provided that the
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term "Consolidated Senior Debt" shall be deemed inserted in lieu of the term
"Consolidated Debt" in clause (i) of the definition of Leverage Ratio.
"Shareholders' Agreements" shall have the meaning provided in the Existing
Credit Agreement.
"Significant Divestiture" shall mean any sale or other disposition of
assets by Furniture Brands and/or its Restricted Subsidiaries, the fair market
value of which exceeds $5,000,000 for any transaction (or series of related
transactions).
"Solvent Entity" shall have the meaning provided in Section 7.05(c).
"Spunoff Plan" shall mean any employee benefit plan as defined in Section
3(3) of ERISA which Furniture Brands ceased to maintain or contribute to
pursuant to the Distribution and Services Agreement dated as of November 17,
1994.
"Standby Letter of Credit" shall mean any Standby Letter of Credit or
similar instrument issued or deemed issued for the account of any Borrower
pursuant to Section 2.01 for the purpose of supporting L/C Supportable
Obligations.
"Standby Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
"Start Date" shall have the meaning provided in the definition of
`Reduction Percentage.'
"Stated Amount" of (x) each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met); provided that
the "Stated Amount" of each Letter of Credit denominated in a currency other
than Dollars shall be, on any date of calculation, the Dollar Equivalent of the
maximum amount available to be drawn in the respective currency thereunder
(determined without regard to whether any conditions to drawing could then be
met) and (y) each Acceptance shall mean the amount of each such Acceptance.
"Subordinated Loan Agreement" shall mean the Subordinated Loan Agreement in
the form annexed to the Atlantic Receivables Purchase Agreement on the First
Restatement Effective Date.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time. As used in this
Agreement, the term "Subsidiary" shall include or apply to any Restricted
Subsidiary and any Unrestricted Subsidiary.
"Subsidiary Guarantor" shall mean Broyhill Transport, Inc., a North
Carolina corporation, Lane Advertising, Inc., a Virginia corporation, Action
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Industries, Inc., a Virginia corporation, Action Transport, Inc., a Delaware
corporation, Action Merger Sub, Inc., a Mississippi corporation, Fayette
Enterprises, Inc., a Mississippi corporation, Gordon's, Inc., a Delaware
corporation, Thomasville Home Furnishings, Inc., a Delaware corporation, The
Lane Company, Incorporated, a Virginia corporation, and Thomasville Upholstery,
Inc., a Delaware corporation, and any Restricted Subsidiary of any Borrower
which executes a guarantee after the Fourth Restatement Effective Date pursuant
to Section 8.11, but shall in any event exclude Thomasville Furniture Latin
America, S.A.
"Subsidiary Guaranty" shall have the meaning provided in Section 5.07.
"Supermajority Banks" of any Tranche shall mean those Non-Defaulting Banks
which would constitute the Required Banks under, and as defined in, this
Agreement if (x) all outstanding Obligations of the other Tranches under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated and (y) the term "50%" contained therein were changed to "66-2/3%."
"Surviving Guaranties" shall mean the guarantee obligations of Furniture
Brands with respect to the leases described in Schedule XV hereto.
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(c).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall mean NationsBank, in its capacity as Syndication
Agent for the Banks hereunder.
"Tax Sharing Agreement" shall mean any tax sharing, disaffiliation or tax
allocation agreement entered into among the Borrowers, Converse and Florsheim,
as amended.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean for each Bank, the "Term Loan Commitment"
of such Bank under, and as defined in, the Existing Credit Agreement.
"Term Loan Maturity Date" shall mean June 27, 2007.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Third Restatement Effective Date" shall mean the Third Restatement
Effective Date under, and as defined in the Existing Credit Agreement.
"Thomasville" shall have the meaning provided in the first paragraph of
this Agreement.
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"Total Commitment" shall mean, at any time, the sum of the Commitments of
each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the sum of the
Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the Term
Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the then Total Revolving Loan Commitment,
less (y) the sum of the aggregate principal amount of Revolving Loans and
Swingline Loans outstanding plus the then aggregate amount of Letter of Credit
Outstandings.
"Trade Letter of Credit" shall mean any Letter of Credit or similar
instrument issued for the account of any Borrower pursuant to Section 2.01 for
the purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by the Borrowers or their
Restricted Subsidiaries in the ordinary course of business of the Borrowers or
their Restricted Subsidiaries.
"Trade Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Tranche" shall mean the respective facility and commitments utilized in
making Loans hereunder, with there being three separate Tranches, i.e., Term
Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean (i) the amendment and restatement of the Existing
Credit Agreement in the form of this Agreement as provided herein, (ii) the
termination of the Receivables Facility and the taking of the related actions as
required by Section 5.10 and (iii) the consummation of the Refinancing.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by which
the actuarial present value of the accumulated benefits under the Plan as of the
close of its most recent plan year each exceeds the fair market value of the
assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of America.
"Unpaid Drawing" shall have the meaning provided for in Section 2.05(a).
"Unrestricted Subsidiary" shall mean any Wholly-Owned Subsidiary of
Furniture Brands that is acquired or created after the Fourth Restatement
Effective Date and designated by Furniture Brands as an Unrestricted Subsidiary
hereunder by written notice to the Administrative Agent; provided that Furniture
Brands shall only be permitted to so designate a new Unrestricted Subsidiary
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after the Fourth Restatement Effective Date and so long as (i) no Default or
Event of Default exists or would result therefrom and (ii) 100% of the capital
stock of such newly-designated Unrestricted Subsidiary is owned by Furniture
Brands or another Unrestricted Subsidiary and all of the provisions of Section
9.11 shall have been complied with in respect of such newly-designated
Unrestricted Subsidiary and such Unrestricted Subsidiary is capitalized (to the
extent capitalized by Furniture Brands or any of its Restricted Subsidiaries)
through Investments as permitted by, and in compliance with, Section 9.05(vii),
with any assets owned by such Unrestricted Subsidiary at the time of the initial
designation thereof to be treated as Investments made pursuant to Section
9.05(vii), provided that at the time of the initial Investments by Furniture
Brands in such Subsidiary (x) Furniture Brands shall designate such entity as an
Unrestricted Subsidiary in a written notice to the Administrative Agent and (y)
such entity and the Borrowers shall have entered into tax sharing and management
services agreements on a basis reasonably satisfactory to the Administrative
Agent. Additionally, Furniture Brands may not designate any Credit Party or any
Subsidiary created or acquired pursuant to a Permitted Acquisition as an
Unrestricted Subsidiary.
"Unutilized Revolving Loan Commitment" with respect to any Bank, at any
time, shall mean such Bank's Revolving Loan Commitment at such time less the sum
of (i) the aggregate outstanding principal amount of Revolving Loans made by
such Bank and (ii) such Bank's Adjusted Percentage of the Letter of Credit
Outstandings at such time.
"Voting Stock" shall mean, as to any Person, any class or classes of
capital stock of such Person pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of such Person.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose capital stock (other than director's qualifying shares) is at the
time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person and (ii) any partnership, association, joint venture or other entity in
which such Person and/or one or more Wholly-Owned Subsidiaries of such Person
has a 100% equity interest at such time.
SECTION 12. The Agents.
12.01 Appointment. The Banks hereby designate BTCo as Administrative Agent
(for purposes of this Section 12, the term "Administrative Agent" shall include
BTCo in its capacity as Collateral Agent pursuant to the Security Documents),
Credit Lyonnais as Documentation Agent and NationsBank as Syndication Agent, in
each case to act as specified herein and in the other Credit Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent, the Documentation Agent and the Syndication Agent to take
such action on its behalf under the provisions of this Agreement, the other
Credit Documents and any other instruments and agreements referred to herein or
therein and to exercise such powers and to perform such duties hereunder and
thereunder as are specifically delegated to or required of the Administrative
Agent, the Documentation Agent or the Syndication Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. Each of the
Administrative Agent, the Documentation Agent and the Syndication Agent may
perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.
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12.02 Nature of Duties. The Administrative Agent shall not have any duties
or responsibilities except those expressly set forth in this Agreement and the
Security Documents. The Documentation Agent and the Syndication Agent, as such,
shall not have any duties or responsibilities under this Agreement or any
Security Document or any other document or matter related thereto. None of the
Administrative Agent, the Documentation Agent or the Syndication Agent nor any
of its respective officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted by it or them hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the
Administrative Agent, the Documentation Agent and the Syndication Agent shall be
mechanical and administrative in nature; the Administrative Agent, the
Documentation Agent and the Syndication Agent shall not have by reason of this
Agreement or any other Credit Document a fiduciary relationship in respect of
any Bank or the holder of any Note; and nothing in this Agreement or any other
Credit Document, expressed or implied, is intended to or shall be so construed
as to impose upon the Administrative Agent, the Documentation Agent and the
Syndication Agent any obligations in respect of this Agreement or any other
Credit Document except as expressly set forth herein or therein.
12.03 Lack of Reliance on the Administrative Agent, the Documentation Agent
and the Syndication Agent. Independently and without reliance upon the
Administrative Agent, the Documentation Agent and the Syndication Agent, each
Bank and the holder of each Note, to the extent it deems appropriate, has made
and shall continue to make (i) its own independent investigation of the
financial condition and affairs of Furniture Brands and its Subsidiaries in
connection with the making and the continuance of the Loans and the taking or
not taking of any action in connection herewith and (ii) its own appraisal of
the creditworthiness of Furniture Brands and its Subsidiaries and, except as
expressly provided in this Agreement, the Administrative Agent, the
Documentation Agent and the Syndication Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. None of the Administrative Agent, the
Documentation Agent or the Syndication Agent or any of their respective
affiliates nor any of their respective officers, directors, agents, or employees
shall be responsible to any Bank or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability, perfection,
collectibility, priority or sufficiency of this Agreement or any other Credit
Document or the financial condition of Furniture Brands and its Subsidiaries or
be required to make any inquiry concerning either the performance or observance
of any of the terms, provisions or conditions of this Agreement or any other
Credit Document, or the financial condition of Furniture Brands and its
Subsidiaries or the existence or possible existence of any Default or Event of
Default.
12.04 Certain Rights of the Administrative Agent, the Documentation Agent
and the Syndication Agent. If the Administrative Agent, the Documentation Agent
or the Syndication Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with this
Agreement or any other Credit Document, such Administrative Agent, Documentation
Agent or Syndication Agent shall be entitled to refrain from such act or taking
such action unless and until the Administrative Agent shall have received
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instructions from the Required Banks; and such Administrative Agent,
Documentation Agent or Syndication Agent shall not incur liability to any Person
by reason of so refraining. Without limiting the foregoing, no Bank or holder of
any Note shall have any right of action whatsoever against the Administrative
Agent, the Documentation Agent or the Syndication Agent as a result of the
Administrative Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required Banks.
12.05 Reliance. The Administrative Agent, the Documentation Agent and the
Syndication Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, statement, certificate,
telex, teletype or telecopier message, cablegram, radiogram, order or other
document or telephone message signed, sent or made by any Person that such
Administrative Agent, Documentation Agent or Syndication Agent believed to be
the proper Person, and, with respect to all legal matters pertaining to this
Agreement and any other Credit Document and its duties hereunder and thereunder,
upon advice of counsel selected by such Administrative Agent, Documentation
Agent or Syndication Agent (which may be counsel for the Credit Parties).
12.06 Indemnification. To the extent each of the Administrative Agent, the
Documentation Agent or the Syndication Agent is not reimbursed and indemnified
by the Borrowers, the Banks will reimburse and indemnify such Administrative
Agent, Documentation Agent or Syndication Agent, in proportion to their
respective "percentages" as used in determining the Required Banks (determined
as if there were no Defaulting Banks), for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by such Administrative Agent, Documentation Agent
or Syndication Agent in performing its respective duties hereunder or under any
other Credit Document, in any way relating to or arising out of this Agreement
or any other Credit Document; provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such
Administrative Agent's, Documentation Agent's or Syndication Agent's gross
negligence or willful misconduct.
12.07 The Administrative Agent, the Documentation Agent and the Syndication
Agent in its Individual Capacity. With respect to its obligation to make Loans
and participate in Letters of Credit under this Agreement, each of the
Administrative Agent, the Documentation Agent and the Syndication Agent shall
have the rights and powers specified herein for a "Bank" and may exercise the
same rights and powers as though it were not performing the duties specified
herein; and the term "Banks," "Required Banks," "holders of Notes" or any
similar terms shall, unless the context clearly otherwise indicates, include the
Administrative Agent, the Documentation Agent and the Syndication Agent in their
individual capacity. Each of the Administrative Agent, the Documentation Agent
and the Syndication Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Credit Party or
any Affiliate of any Credit Party as if they were not performing the duties
specified herein, and may accept fees and other consideration from the Borrowers
or any other Credit Party for services in connection with this Agreement and
otherwise without having to account for the same to the Banks.
12.08 Holders. The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
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authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Agents.
(a) The Administrative Agent may resign from the performance of all its
functions and duties hereunder and/or under the other Credit Documents at any
time by giving 15 Business Days' prior written notice to the Borrowers and the
Banks. Such resignation shall take effect upon the appointment of a successor
Administrative Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation, the Required Banks shall appoint a
successor Administrative Agent hereunder or thereunder who shall be a commercial
bank or trust company reasonably acceptable to the Borrowers.
(c) If a successor Administrative Agent shall not have been so appointed
within such 15 Business Day period, the Administrative Agent, with the consent
of the Borrowers, shall then appoint a commercial bank or trust company with
capital and surplus of not less than $500 million as successor Administrative
Agent who shall serve as Administrative Agent hereunder or thereunder until such
time, if any, as the Required Banks appoint a successor Administrative Agent as
provided above.
(d) If no successor Administrative Agent has been appointed pursuant to
clause (b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Banks shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any other Credit
Document until such time, if any, as the Required Banks appoint a successor
Administrative Agent as provided above.
(e) The Documentation Agent, as such, may resign at any time by giving 5
Business Days' prior written notice to the Banks. Such resignation shall take
effect at the end of such five Business Day period.
(f) The Syndication Agent, as such, may resign at any time by giving 5
Business Days' prior written notice to the Banks. Such resignation shall take
effect at the end of such five Business Day period.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrowers jointly and severally shall:
(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of White &
Case LLP and local counsel) in connection with the preparation, execution and
delivery of this Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein and any amendment, waiver or consent
relating hereto or thereto, of the Agents in connection with their respective
syndication efforts with respect to this Agreement and of the Administrative
Agent and, following and during the continuation of an Event of Default, each of
the Banks in connection with the enforcement of this Agreement and the other
Credit Documents and the documents and instruments referred to herein and
therein (including, without limitation, the reasonable fees and disbursements of
counsel for the Administrative Agent and, following and during the continuation
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of an Event of Default, for each of the Banks); (ii) pay and hold each of the
Banks harmless from and against any and all present and future stamp, excise and
other similar taxes with respect to the foregoing matters and hold each of the
Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and (iii) indemnify the Agents and each Bank
(including in its capacity as an Issuing Bank), and each of their respective
officers, directors, employees, representatives, affiliates and agents from and
hold each of them harmless against any and all liabilities, obligations
(including removal or remedial actions), losses, damages, penalties, claims,
actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not any Agent or any Bank is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder or the consummation of any transactions contemplated herein
(including, without limitation, the Transaction) or in any other Credit Document
or the exercise of any of their rights or remedies provided herein or in the
other Credit Documents, or (b) the actual or alleged presence of Hazardous
Materials in the air, surface water or groundwater or on the surface or
subsurface of any Real Property owned or at any time operated by Furniture
Brands or any of its Subsidiaries, the generation, storage, transportation,
handling or disposal of Hazardous Materials at any location, whether or not
owned or operated by Furniture Brands or any of its Subsidiaries, the
non-compliance of any Real Property with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to any Real Property, or any Environmental Claim asserted against Furniture
Brands, any of its Subsidiaries, or any Real Property owned or at any time
operated by Furniture Brands or any of its Subsidiaries, including, in each
case, without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation, litigation
or other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the undertaking
to indemnify, pay or hold harmless any Agent or any Bank set forth in the
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrowers shall make the maximum contribution to the payment
and satisfaction of each of the indemnified liabilities which is permissible
under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrowers or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Bank (including, without limitation, by branches
and agencies of such Bank wherever located) to or for the credit or the account
of any Credit Party against and on account of the Obligations and liabilities of
all Credit Parties to such Bank under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in Obligations
purchased by such Bank pursuant to Section 13.06(b), and all other claims of any
nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether or not such Bank shall have made
any demand hereunder and although said Obligations, liabilities or claims, or
any of them, shall be contingent or unmatured.
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13.03 Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to the Borrowers, at the Borrowers'
address specified opposite its signature below; if to any other Credit Party, at
such Credit Party's address set forth in any Credit Document; if to any Bank, at
its address specified opposite its name on Schedule II below; and if to the
Administrative Agent, at its Notice Office; or, as to any Credit Party or the
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties hereto and, as to each Bank, at such
other address as shall be designated by such Bank in a written notice to the
Borrowers and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrowers shall not be effective until received by
the Administrative Agent or the Borrowers, as the case may be.
13.04 Benefit of Agreement. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, no Borrower may assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of all of the Banks and,
provided further, that although any Bank may transfer, assign or grant
participations in its rights hereunder, such Bank shall remain a "Bank" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitment hereunder except as provided in Section 13.04(b)) and the transferee,
assignee or participant, as the case may be, shall not constitute a "Bank"
hereunder and, provided further, that no Bank shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan or Note or extend the expiry date of any Letter of Credit
in which such participant is participating beyond the Revolving Loan Maturity
Date, or reduce the rate or extend the time of payment of interest or Fees
thereon (except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the principal amount thereof, or increase
the amount of the participant's participation over the amount thereof then in
effect (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the Total Revolving Loan Commitment shall not constitute a change in the
terms of such participation, and that an increase in any Commitment or Loan
shall be permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrowers of any of their rights and obligations
under this Agreement or (iii) release all or substantially all of the Collateral
under all of the Security Documents (except as expressly provided in the Credit
Documents) supporting the Loans and/or Letters of Credit hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of such
participation to be those set forth in the agreement executed by such Bank in
favor of the participant relating thereto) and all amounts payable by the
Borrowers hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together with one
or more other Banks) may (x) assign all or a portion of its Revolving Loan
Commitment (and related outstanding Obligations hereunder) and/or its
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outstanding Term Loans to (i) its parent company and/or any affiliate of such
Bank which is at least 50% owned by such Bank or its parent company or to one or
more Banks or (ii) in the case of any Bank that is a fund that invests in bank
loans, any other fund that invests in bank loans and is managed by the same
investment advisor of such Bank or by an Affiliate of such investment advisor or
(y) after providing at least two Business Days prior notice to (but without
requiring the consent of) Furniture Brands, assign all, or if less than all, a
portion equal to at least $10,000,000 in the aggregate for the assigning Bank or
assigning Banks, of such Revolving Loan Commitments (or, if the Revolving Loan
Commitments have terminated, its outstanding obligations) and/or its outstanding
Term Loans hereunder to one or more Eligible Transferees, each of which
assignees shall become a party to this Agreement as a Bank by execution of an
Assignment and Assumption Agreement, provided that, (i) at such time Schedule I
shall be deemed modified to reflect the Commitment and/or outstanding Term
Loans, as the case may be, of such new Bank and of the existing Banks, (ii) upon
surrender of the old Notes, new Notes will be issued, at the Borrowers' expense,
to such new Bank and to the assigning Bank, such new Notes to be in conformity
with the requirements of Section 1.05 (with appropriate modifications) to the
extent needed to reflect the revised Commitments and/or outstanding Term Loans,
as the case may be, (iii) the consent of the Administrative Agent and any
Issuing Bank shall be required in connection with any such assignment of a
Bank's Commitment and/or outstanding Term Loans, as the case may be (which
consent shall not be unreasonably withheld or delayed), and (iv) the
Administrative Agent shall receive at the time of each such assignment (other
than in connection with an assignment by a Bank to an affiliate of such Bank),
from the assigning or assignee Bank, the payment of a non-refundable fee of
$3,500 and, provided further, that such transfer or assignment will not be
effective until recorded by the Administrative Agent on the Register pursuant to
Section 13.17 hereof. To the extent of any assignment pursuant to this Section
13.04(b), the assigning Bank shall be relieved of its obligations hereunder with
respect to its assigned Commitments. At the time of each assignment pursuant to
this Section 13.04(b) to a Person which is not already a Bank hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall provide to the Borrowers and the Administrative Agent the
appropriate Internal Revenue Service Forms (and, if applicable a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Bank's Commitments and related outstanding
Obligations pursuant to Section 1.13 or this Section 13.04(b) would, at the time
of such assignment, result in increased costs under Section 1.10 or 1.11 greater
than those being charged by the respective assigning Bank prior to such
assignment, then the Borrowers shall not be obligated to pay such greater
increased costs (although the Borrowers shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Bank from such Federal Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
the Administrative Agent or any Bank or any holder of any Note in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between the Borrowers or any other Credit Party and the
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Administrative Agent or any Bank or the holder of any Note shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Administrative Agent or any Bank or the
holder of any Note would otherwise have. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Administrative Agent or any Bank or the holder of any Note to any other
or further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrowers in respect of any Obligations
hereunder, it shall distribute such payment to the Banks (other than any Bank
that has consented in writing to waive its pro rata share of any such payment)
pro rata based upon their respective shares, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or other Fees, of a sum
which with respect to the related sum or sums received by other Banks is in a
greater proportion than the total of such Obligation then owed and due to such
Bank bears to the total of such Obligation then owed and due to all of the Banks
immediately prior to such receipt, then such Bank receiving such excess payment
shall purchase for cash without recourse or warranty from the other Banks an
interest in the Obligations of the respective Credit Party to such Banks in such
amount as shall result in a proportional participation by all the Banks in such
amount; provided that if all or any portion of such excess amount is thereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
13.07 Calculations; Computations. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with generally accepted accounting principles in the United States (or the
equivalent thereof in any country in which a Foreign Sales Corporation is doing
business, as applicable) consistently applied throughout the periods involved,
provided that, (i) except as otherwise specifically provided herein, all
computations of the Available Basket Amount, the Available Debt Proceeds Amount,
and the Consolidated Cumulative 50% Net Income Amount and all computations
determining compliance with Sections 9.02 through 9.09, inclusive, shall utilize
accounting principles and policies in conformity with those used to prepare the
historical financial statements delivered to the Banks pursuant to Sections
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7.05(a), and (ii) for purposes of calculating financial terms, all covenants and
related definitions, all such calculations based on the operations of Furniture
Brands and its Restricted Subsidiaries on a consolidated basis shall be made
without giving effect to the operations of any Unrestricted Subsidiaries.
(b) All computations of interest, Commitment Commission and other Fees
hereunder shall be made on the basis of a year of 360 days for the actual number
of days (including the first day but excluding the last day) occurring in the
period for which such interest, Commitment Commission or other Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF
THE BORROWERS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID
COURTS. EACH OF THE BORROWERS HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 1633
BROADWAY, NEW YORK, NEW YORK 10019 AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE AND ACCEPT FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY,
SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY
BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH CREDIT
PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY
ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE
ADMINISTRATIVE AGENT UNDER THIS AGREEMENT. EACH OF THE BORROWERS FURTHER
IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY CREDIT PARTY AT ITS
ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE
30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
ADMINISTRATIVE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(b) EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
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FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrowers and the
Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the date (the
"Fourth Restatement Effective Date") on which (i) each Borrower, each New Bank,
the Required Banks (determined immediately before the occurrence of the Fourth
Restatement Effective Date) the Supermajority Banks holding Revolving Loan
Commitments (determined immediately before the occurrence of the Fourth
Restatement Effective Date) and each Agent shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered
(including by way of facsimile device) the same to the Administrative Agent at
its Notice Office; provided that the provisions of Section 13.20 shall only be
effective if counterparts of this Agreement (whether the same or different
counterparts) are executed and delivered to the Administrative Agent by the
Required Supermajority Banks (determined after the occurrence of the Fourth
Restatement Effective Date) and (ii) the conditions contained in Sections 5, 6
and 13.10(b) are met to the satisfaction of the Administrative Agent and the
Required Banks (determined immediately after the occurrence of the Fourth
Restatement Effective Date). Unless the Administrative Agent has received actual
notice from any Bank that the conditions contained in Sections 5 and 6 have not
been met to its satisfaction, upon the satisfaction of the condition described
in clause (i) of the immediately preceding sentence and upon the Administrative
Agent's good faith determination that the conditions described in clause (ii) of
the immediately preceding sentence have been met, then the Fourth Restatement
Effective Date shall have been deemed to have occurred, regardless of any
subsequent determination that one or more of the conditions thereto had not been
met (although the occurrence of the Fourth Restatement Effective Date shall not
release the Borrowers from any liability for failure to satisfy one or more of
the applicable conditions contained in Section 5 or 6). The Administrative Agent
will give the Borrowers and each Bank prompt written notice of the occurrence of
the Fourth Restatement Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
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shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected thereby in the case of following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note, or extend the
stated maturity of any Letter of Credit beyond the Revolving Loan Maturity Date,
or reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (except to the extent repaid in cash), (ii)
release all or substantially all of the Collateral under all the Security
Documents (except as expressly provided in the Credit Documents), (iii) amend,
modify or waive any provision of this Section 13.12, (iv) reduce the percentage
specified in the definition of Required Banks (it being understood that, with
the consent of the Required Banks, additional extensions of credit pursuant to
this Agreement may be included in the determination of the Required Banks on
substantially the same basis as the extensions of Term Loans and Revolving Loan
Commitments are included on the Fourth Restatement Effective Date) or (v)
consent to the assignment or transfer by the Borrowers of any of their rights
and obligations under this Agreement; provided further, that no such change,
waiver, discharge or termination shall (s) increase the Commitment of any Bank
over the amount thereof then in effect without the consent of such Bank (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitments shall not constitute an increase of the Commitment of any
Bank, and that an increase in the available portion of any Commitment of any
Bank shall not constitute an increase in the Commitment of such Bank), (t)
without the consent of the respective Issuing Bank or Issuing Banks, amend,
modify or waive any provision of Section 2 with respect to Letters of Credit
issued by it or alter its rights or obligations with respect to Letters of
Credit or Acceptances, (u) without the consent of BTCo, amend, modify or waive
any provision of Sections 1.01(c) and (d) or alter its rights and obligations
with respect to Swingline Loans, (v) without the consent of each Agent affected
thereby, amend, modify or waive any provision of Section 12 as same applies to
such Agent or any other provision as same relates to the rights or obligations
of such Agent, (w) without the consent of the Collateral Agent, amend, modify or
waive any provision relating to the rights or obligations of the Collateral
Agent, (x) without the consent of the Majority Banks of Term Loans, amend the
definition of Majority Banks or reallocate any amounts that would otherwise be
applied as a mandatory repayment of Term Loans hereunder to the permanent
reduction of the Total Revolving Loan Commitment or as a mandatory repayment of
Revolving Loans or Swingline Loans, (y) without the consent of the Supermajority
Banks of the respective Tranche of Revolving Loans (1) amend, modify or waive
any Scheduled Commitment Reduction, or (2) reduce the percentage specified in
the definition of Supermajority Banks with respect to such Tranche, and (z)
without the consent of the Required Supermajority Banks, (1) release any
significant portion of the Collateral under the Security Documents (except as
expressly provided in the Credit Documents) or release any significant
Subsidiary Guarantor from its obligations under the Subsidiary Guaranty (other
than in connection with a transaction permitted pursuant to Section 9.02);
provided that no Collateral shall constitute a significant portion of the
Collateral and no Subsidiary Guarantor shall constitute a significant Subsidiary
Guarantor if the fair market value of the Collateral to be released plus the
fair market value of the assets owned or held by such Subsidiary Guarantor is
$20 million or less in the aggregate (based on a certificate of the chief
financial officer of Furniture Brands taking into account all prior releases) or
(2) reduce the percentage specified in the definition of Required Supermajority
Banks.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Banks is obtained but the consent of one or more of
such other Banks whose consent is required is not obtained, then the Borrowers
shall have the right, so long as all non-consenting Banks whose individual
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consent is required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one or more
Replacement Banks pursuant to Section 1.13 so long as at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination or (B) terminate such non-consenting Bank's Commitment
in accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless the
Commitments are terminated, and Loans repaid, pursuant to the preceding clause
(B) are immediately replaced in full at such time through the addition of new
Banks or the increase of the Commitments and/or outstanding Loans of existing
Banks (who in each case must specifically consent thereto), then in the case of
any action pursuant to preceding clause (B) the Required Banks (determined
before giving effect to the proposed action) shall specifically consent thereto,
provided further, that in any event the Borrowers shall not have the right to
replace a Bank, terminate its Commitment or repay its Loans solely as a result
of the exercise of such Bank's rights (and the withholding of any required
consent by such Bank) pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06 shall, subject
to Section 13.15 (to the extent applicable), survive the execution, delivery and
termination of this Agreement and the Notes and the making and repayment of the
Loans.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans at, to
or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Bank prior to such transfer, then the
Borrowers shall not be obligated to pay such increased costs (although the
Borrowers shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Limitation on Additional Amounts, etc. Notwithstanding anything to
the contrary contained in Sections 1.10, 1.11, 2.06 or 4.04 of this Agreement,
unless a Bank gives notice to the Borrowers that it is obligated to pay an
amount under any such Section within one year after the later of (x) the date
the Bank incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital or (y) the date such Bank has actual knowledge of its incurrence of the
respective increased costs, Taxes, loss, expense or liability, reductions in
amounts received or receivable or reduction in return on capital, then such Bank
shall only be entitled to be compensated for such amount jointly and severally
by the Borrowers pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case
may be, to the extent the costs, Taxes, loss, expense or liability, reduction in
amounts received or receivable or reduction in return on capital are incurred or
suffered on or after the date which occurs one year prior to such Bank giving
notice to the Borrowers that it is obligated to pay the respective amounts
pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the case may be. This
Section 13.15 shall have no applicability to any Section of this Agreement other
than said Sections 1.10, 1.11, 2.06 and 4.04.
13.16 Confidentiality. (a) Subject to the provisions of clause (b) of this
Section 13.16, each Bank agrees that it will use its best efforts not to
disclose without the prior consent of the Borrowers (other than to its
employees, auditors, advisors or counsel or to another Bank if the Bank or such
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Bank's holding or parent company in its sole discretion determines that any such
party should have access to such information, provided such Persons shall be
subject to the provisions of this Section 13.16 to the same extent as such Bank)
any information with respect to Furniture Brands or any of its Subsidiaries
which is now or in the future furnished pursuant to this Agreement or any other
Credit Document and which is designated by Furniture Brands to the Banks in
writing as confidential, provided that any Bank may disclose any such
information (a) as has become generally available to the public, (b) as may be
required or appropriate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or appropriate
in respect to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to such
Bank, (e) to any Agent or the Collateral Agent, (f) to any prospective or actual
transferee or participant in connection with any contemplated transfer or
participation of any of the Notes or Commitments or any interest therein by such
Bank, provided, that such prospective transferee agrees to maintain the
confidentiality contained in this Section and (g) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about such Bank's investment
portfolio in connection with ratings issued to such Bank.
(b) Each of the Borrowers hereby acknowledges and agrees that each Bank may
share with any of its Affiliates any information related to Furniture Brands or
any of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of Furniture Brands and its
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 13.16 to the same extent as such Bank.
13.17 Register. The Borrowers hereby designate the Administrative Agent to
serve as the Borrowers' agent, solely for purposes of this Section 13.17, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Banks, the Loans made by each of the Banks and
each repayment in respect of the principal amount of the Loans of each Bank.
Failure to make any such recordation, or any error in such recordation shall not
affect the Borrowers' obligations in respect of such Loans. With respect to any
Bank, the transfer of the Commitments of such Bank and the rights to the
principal of, and interest on, any Loan made pursuant to such Commitments shall
not be effective until such transfer is recorded on the Register maintained by
the Administrative Agent with respect to ownership of such Commitments and Loans
and prior to such recordation all amounts owing to the transferor with respect
to such Commitments and Loans shall remain owing to the transferor. The
registration of assignment or transfer of all or part of any Commitments and
Loans shall be recorded by the Administrative Agent on the Register only upon
the acceptance by the Administrative Agent of a properly executed and delivered
Assignment and Assumption Agreement pursuant to Section 13.04(b). Coincident
with the delivery of such an Assignment and Assumption Agreement to the
Administrative Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrowers jointly and
severally agree to indemnify the Administrative Agent from and against any and
all losses, claims, damages and liabilities of whatsoever nature which may be
imposed on, asserted against or incurred by the Administrative Agent in
performing its duties under this Section 13.17, provided that the Borrowers
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shall have no obligation to indemnify the Administrative Agent for any loss,
claim, damage, liability or expense which resulted primarily from the gross
negligence or willful misconduct of the Administrative Agent.
13.18 Addition of New Banks; etc. On and as of the occurrence of the Fourth
Restatement Effective Date in accordance with Section 13.10, (x) each New Bank
shall become a "Bank" under, and for all purposes of, this Agreement and the
other Credit Documents and (y) each Existing Bank shall remain a "Bank" under,
and for all purposes of, this Agreement and the other Credit Documents.
13.19 Post Closing Actions. Notwithstanding anything to the contrary
contained in this Agreement or the other Credit Documents, the parties hereto
acknowledge and agree that:
(a) Title Endorsements. The Borrowers will deliver, or cause to be
delivered, within thirty (30) Business Days after the Fourth Restatement
Effective Date, endorsements reasonably satisfactory to the Collateral Agent to
each Existing Mortgage Policy assuring the Collateral Agent that each Existing
Mortgage is a valid and enforceable first priority mortgage lien on the
respective Existing Mortgaged Properties, free and clear of all defects and
encumbrances except Permitted Encumbrances; and
(b) Confirmatory UCC Searches. The Borrowers will deliver, or cause to be
delivered, within thirty (30) Business Days after the Fourth Restatement
Effective Date, certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements that
name any Credit Party as debtor and that are filed in the jurisdictions referred
to in Section 5.09(a), together with copies of such other financing statements
(none of which shall cover the collateral except to the extent evidencing
Permitted Liens or in respect of which the Collateral Agent shall have received
termination statements (Form UCC-3) or such other termination statements as
shall be required by local law) fully executed for filing.
(c) Insurance Certificates. The Borrowers will deliver, or cause to be
delivered, within thirty (30) Business Days after the Fourth Restatement
Effective Date, evidence of insurance complying with the requirements of Section
8.03 for the business and properties of Furniture Brands and its Restricted
Subsidiaries, in scope, form and substance reasonably satisfactory to the Agents
and naming the Collateral Agent as an additional insured and/or loss payee, and
stating that such insurance shall not be canceled or revised without 30 days'
prior written notice by the insurer to the Administrative Agent.
All conditions precedent and representations contained in this Agreement
and the other Credit Documents shall be deemed modified to the extent necessary
to effect the foregoing (and to permit the taking of the actions described above
within the time periods required above, rather than as elsewhere provided in the
Credit Documents); provided, that (x) to the extent any representation and
warranty would not be true because the foregoing actions were not taken on the
Fourth Restatement Effective Date, the respective representation and warranty
shall be required to be true and correct in all material respects at the time
the respective action is taken (or was required to be taken) in accordance with
the foregoing provision of this Section 13.19 and (y) all representations and
warranties relating to the Security Documents shall be required to be true
immediately after the actions required to be taken by Section 13.19 have been
taken (or were required to be taken). The acceptance of the benefits of each
Credit Event shall constitute a representation, warranty and covenant by the
-108-
Borrowers to each of the Banks that the actions required pursuant to this
Section 13.19 and that, at such time, all representations and warranties
contained in this Agreement and the other Credit Documents shall then be true
and correct without any modification pursuant to this Section 13.19.
13.20 Release of Mortgages. On any date upon which no Default or Event of
Default then exists, and so long as the Leverage Ratio for the fiscal quarter of
Furniture Brands most recently ended on or prior to the date upon which the
respective release is to occur is less than or equal to 2.5:1.00, then all
Mortgages shall be released (such date, the "Mortgage Release Date") (and the
Collateral Agent shall, and is hereby directed to, execute and deliver such
terminations and other documentation with respect to the Mortgages as may be
reasonably requested by Furniture Brands to effectuate such releases) so long as
the following conditions are met to the satisfaction of the Administrative
Agent:
(i) the financial statements for the fiscal quarter most recently
ended on or prior to the date the respective release is requested shall
have been delivered to the Administrative Agent and the respective
officer's certificate delivered pursuant to Section 8.01(f) shall establish
that the Leverage Ratio is less than or equal to 2.5:1.00;
(ii) Furniture Brands shall have delivered to the Administrative Agent
an officer's certificate certifying that the Leverage Ratio is less than or
equal to 2.5:1.00 and stating that no Default or Event of Default is in
existence on the date the respective release is requested pursuant to this
Section 13.20;
(iii) on the date the respective release is requested pursuant to this
Section 13.20, the Borrowers shall represent and warrant (and are hereby
deemed to represent and warrant) that the release of all Mortgages does not
constitute a release of all or substantially all of the Collateral as then
in effect; and
(iv) Furniture Brands shall have delivered to the Administrative Agent
an opinion of counsel (which counsel shall be reasonably satisfactory to
the Administrative Agent, and may be internal counsel for Furniture Brands)
to the effect that the release of Mortgages does not constitute a release
of all or substantially all of the Collateral at such time.
So long as the foregoing conditions are met to the satisfaction of the
Administrative Agent, the Collateral Agent shall ( and is hereby directed to)
release all of the Mortgages and to take such action in connection therewith as
may be reasonably requested by the Borrowers. All actions taken pursuant to this
Section 13.20 shall be taken at the joint and several expense of the Borrowers.
Furthermore, neither the Administrative Agent nor the Collateral Agent shall
have any liability whatsoever for any actions taken by them in accordance with
the provision of this Section 13.20 (or which any Agent believed, in the absence
of gross negligence or willful misconduct (on its part) were permitted pursuant
to the provisions of this Section 13.20. Furthermore, each of the Agents shall
be entitled to rely on the certificates furnished pursuant to this Section 13.20
and shall have no obligation whatsoever to inquire as to the underlying facts
covered thereby.
-109-
13.21 Judgment Currency. (a) The Credit Parties' obligations hereunder and
under the other Credit Documents to make payments in Dollars shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than Dollars, except to the
extent that such tender or recovery results in the effective receipt by the
Administrative Agent, the Collateral Agent or the respective Bank of the full
amount of Dollars expressed to be payable to the Administrative Agent, the
Collateral Agent or such Bank under this Agreement or the other Credit
Documents. If for the purpose of obtaining or enforcing judgment against any
Credit Party in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than Dollars (such other currency being
hereinafter referred to as the "Judgment Currency") an amount due in Dollars,
the conversion shall be made, at the Dollar Equivalent thereof determined, in
each case, on the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Borrowers jointly and severally covenant and agree to pay, or cause to
be paid, such additional amounts, if any (but in any event not a lesser amount)
as may be necessary to ensure that the amount paid in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of payment, will
produce the amount of Dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial award at the rate or
exchange prevailing on the Judgment Currency Conversion Date.
(c) For purposes of determining the Dollar Equivalent or any other rate of
exchange for this Section, such amounts shall include any premium and costs
payable in connection with the purchase of Dollars.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address:
c/o Furniture Brands International, Inc. FURNITURE BRANDS INTERNATIONAL, INC.
101 South Hanley Road BROYHILL FURNITURE INDUSTRIES, INC.
St. Louis, MO 63105 LANE FURNITURE INDUSTRIES, INC.
Tel: (314) 863-1100 THOMASVILLE FURNITURE INDUSTRIES,
Attention: David P. Howard INC.
Vice President, Treasurer Fax: (314) 863-5306
and Chief Financial Officer
By: /s/ David P. Howard
----------------------
Name: David P. Howard
Title: Vice President
BANKERS TRUST COMPANY, Individually
and as Administrative Agent
By: /s/ James Reilly
-------------------
Name: James Reilly
Title: Vice President
NATIONSBANK, N.A., Individually
and as Syndication Agent
By: /s/ Michael F. Murphy
------------------------
Name: Michael F. Murphy
Title: Vice President
CREDIT LYONNAIS CHICAGO BRANCH,
Individually and as
Documentation Agent
By: /s/ Julie T. Kanak
---------------------
Name: Julie T. Kanak
Title: Vice President
ALLIED IRISH BANK PLC, acting
through its CAYMAN ISLAND BRANCH
By: /s/ Marcia Meeker
------------------
Name: Marcia Meeker
Title: Vice Presdient
By: /s/ William J. Strickland
-------------------------
Name: William J. Strickland
Title: Senior Vice Presdient
BANK OF MONTREAL
By: /s/ Leon H. Sinclair
-----------------------
Name: Leon H. Sinclair
Title: Director
THE BANK OF NEW YORK
By: /s/ Steven Wilson
--------------------
Name: Steven Wilson
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA
By: /s/ F.C.H. Ashby
------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan
Operations
BANK OF SCOTLAND
By: /s/ Annie Chin Tat
---------------------
Name: Annie Chin Tat
Title: Senior Vice President
THE BANK OF TOKYO - MITSUBISHI,
LTD., CHICAGO BRANCH
By: /s/ Ryo Nakata
---------------
Name: Ryo Nakata
Title: General Manager
BANKBOSTON, N.A.
By: /s/ Randall L. Wehling
-------------------------
Name: Randall L. Wehling
Title: Vice President
CHIAO TUNG BANK CO., LTD.
NEW YORK AGENCY
By: /s/ Kuang Si Shiu
--------------------
Name: Kuang Si Shiu
Title: SVP & GM
CIBC INC.
By: /s/ Elizabeth Fischer
------------------------
Name: Elizabeth Fischer
Title: Executive Director
CIBC Oppenheimer Corp,
AS AGENT
GCB INVESTMENT PORTFOLIO
By: CITIBANK, N.A.
By: /s/ Steven Kaufman
---------------------
Name: Steven Kaufman
Title: Vice President
CITY NATIONAL BANK
By: /s/ Patrick M. Cassidy
-------------------------
Name: Patrick M. Cassidy
Title: Vice President
CREDIT AGRICOLE INDOSUEZ
By: /s/ David Bouhl, F.V.P.
-------------------------
Name: David Bouhl. F.V.P.
Title: Head of Corporate
Banking Chicago
By: /s/ Dean Balice
------------------
Name: Dean Balice
Title: Senior Vice President/
Branch Manager
DELANO COMPANY
By Pacific Investment Management
Company, as its Investment Advisor
By: /s/ Raymond Kennedy
----------------------
Name: Raymond Kennedy
Title: Senior Vice President
DEEPROCK & CO.
By: Eaton Vance Management
as Investment Advisor
By: /s/ Payson F. Swaffield
-------------------------
Name: Payson F. Swaffield
Title: Vice President
SENIOR DEBT PORTFOLIO
By: Boston Management and Research
as Investment Advisor
By: /s/ Payson F. Swaffield
-------------------------
Name: Payson F. Swaffield
Title: Vice President
FC CBO LTD.
By: /s/ E. John Thompson
----------------------
Name: E. John Thompson
Title: Secretary
FIRST AMERICAN NATIONAL BANK
By: /s/ Jerry J. Watterworth
---------------------------
Name: Jerry J. Watterworth
Title: Senior Vice President
FIRST COMMERCIAL BANK
(Incorporated in Taiwan, R.O.C.)
Los Angeles Branch
By: /s/ Guey Fang Wu
-----------------
Name: Guey Fang Wu
Title: AVP & Deputy General
Manager
FIRST UNION NATIONAL BANK (F/K/A
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA)
By: /s/ Roger Pelz
-----------------
Name: Roger Pelz
Title: Senior Vice President
FLEET NATIONAL BANK
By: /s/ Jeffrey C. Lynch
-----------------------
Name: Jeffrey C. Lynch
Title: Vice President
THE FUJI BANK LIMITED
By: /s/ Tetsuo Kamatsu (K-219)
---------------------------
Name: Tetsuo Kamatsu (K-219)
Title: Joint General Manager
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ Walter Wolff
------------------
Name: Walter Wolff
Title: Joint General Manager
KZH HOLDING CORPORTAION III
By: /s/ Virginia Conway
---------------------------
Name: Virginia Conway
Title: Authorized Agent
KZH-ING-I CORPORATION
By: /s/ Virginai Conway
----------------------
Name: Virgina Conway
Title: Authorized Agent
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD.
By: /s/ Armund J. Schoen, Jr.
---------------------------
Name: Armund J. Schoen, Jr.
Title: Senior Vice President
MERCANTILE BANK NATIONAL ASSOCIATION
By: /s/ Stephen M. Reese
-----------------------
Name: Stephen M. Reese
Title: Vice President
MERRILL LYNCH DEBT STRATEGIES
PORTFOLIO
By: Merrill Lynch Asset Management,
L.P., as Investment Advisor
By: /s/ John M. Johnson
----------------------
Name: John M. Johnson
Title: Authorized Signatory
DEBT STRATEGIES FUND, INC.
By: /s/ John M. Johnson
----------------------
Name: John M. Johnson
Title: Authorized Signatory
MERRILL LYNCH SENIOR FLOATING RATE
FUND, INC.
By: /s/ John M. Johnson
----------------------
Name: John M. Johnson
Title: Authorized Signatory
MERRILL LYNCH PRIME RATE PORTFOLIO
By: Merrill Lynch Asset Management,
L.P., as Investment Advisor
By: /s/ John M. Johnson
-------------------------
Name: John M. Johnson
Title: Authorized Signatory
SENIOR HIGH INCOME PORTFOLIO, INC.
By: /s/ John M. Johnson
-------------------------
Name: John M. Johnson
Title: Authorized Signatory
MERRILL LYNCH GLOBAL INVESTMENT
SERIES: INCOME STRATEGIES PORTFOLIO
By: Merrill Lynch Asset Management,
L.P., as Investment Advisor
By: /s/ John M. Johnson
---------------------
Name: John M. Johnson
Title: Authorized Signatory
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By: /s/ Nobuo Tominaga
-------------------------
Name: Nobuo Tominaga
Title: Chief Manager
OCTAGON LOAN TRUST, by Octagon
Credit Investors, as Manager
By: /s/ Richard W. Stewart
-------------------------
Name: Richard W. Stewart
Title: Managing Director
PARIBAS
By: /s/ Karen E. Coons
--------------------
Name: Karen E.Coons
Title: Vice President
By: /s/ Ann B. McAloon
--------------------
Name: Ann B. McAloon
Title: Vice President
THE SANWA BANK, LTD., CHICAGO BRANCH
By: /s/ Kenneth C. Eichwald
--------------------------
Name: Kenneth C. Eichwald
Title: Assistant General Manager
THE SUMITOMO BANK, LIMITED, CHICAGO
BRANCH
By: /s/ Ken-Ichior Kobayashi
---------------------------
Name: Ken-Ichiro Kobayashi
Title: Joint General Manager
SUMITOMO TRUST AND BANKING CO., LTD.
NEW YORK BRANCH
By: /s/ Mr. Naoya Takeuchi
---------------------------
Name: Mr. Naoya Tekeuchi
Title: Deputy General Manager
SUNTRUST BANK, ATLANTA
By: /s/ Linda L. Dash
--------------------
Name: Linda L. Dash
Title: Vice President
By: /s/ Margaret A. Jaketic
------------------------
Name: Margaret A. Jaketic
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
By: (did not execute)
---------------------------
Name:
Title:
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: (did not execute)
---------------------------
Name:
Title:
VAN KAMPEN CLO I, LIMITED
By: Van Kampen American Capital
Management, Inc. as Collateral
Manager
By: (did not execute)
---------------------------
Name:
Title:
Schedule I
OUTSTANDING PRINCIPAL OF TERM LOANS/REVOLVING LOAN COMMITMENTS1
- ----------------------------------------------------------- -------------------
Bank Outstanding Revolving Loan
Principal Amount Commitment
of Term Loans
- ------------------------------------------------------------------------------
Bankers Trust Company $ 3,000,000 $45,000,000
- ------------------------------------------------------------------------------
Credit Lyonnais Chicago Branch 10,000,000 27,000,000
==============================================================================
NationsBank, N.A. 0 27,000,000
==============================================================================
Allied Irish Bank PLC 0 8,000,000
==============================================================================
Bank of Montreal 0 39,430,000
==============================================================================
The Bank of Nova Scotia 0 31,420,000
==============================================================================
The Bank of New York 0 28,000,000
==============================================================================
Bank of Scotland 9,000,000 19,250,000
==============================================================================
The Bank of Tokyo-Mitsubishi 0 18,000,000
==============================================================================
BankBoston, N.A. 5,000,000 0
==============================================================================
Chiao Tung Bank Co., Ltd. New York Agency 0 10,000,000
==============================================================================
CIBC Inc. 0 20,000,000
==============================================================================
GCB Investment Portfolio (By: Citibank, N.A.) 13,000,000 0
==============================================================================
City National Bank 0 10,000,000
==============================================================================
Credit Agricole Indosuez 0 18,000,000
==============================================================================
Delano Company 5,000,000 0
==============================================================================
Eaton Vance Deeprock 2,000,000 0
==============================================================================
Eaton Vance Senior Debt 37,000,000 0
==============================================================================
Chase Bank of Texas, N.A. (FC CBO Limited) 9,000,000 0
==============================================================================
First American National Bank 0 19,250,000
==============================================================================
First Commercial Bank 0 10,000,000
==============================================================================
First Union National Bank 0 29,430,000
==============================================================================
Fleet National Bank 0 11,430,000
==============================================================================
The Fuji Bank Limited 0 31,430,000
==============================================================================
The Industrial Bank of Japan, Limited 0 27,500,000
==============================================================================
KZH Holding Corporation III 5,000,000 0
==============================================================================
KZH - ING - I Corporation 9,000,000 0
==============================================================================
The LTCB of Japan, Ltd. 0 26,000,000
==============================================================================
Mercantile Bank National Association 0 18,000,000
==============================================================================
Merrill Lynch Debt Strategies Portfolio 5,000,000 0
==============================================================================
Debt Strategies Fund, Inc. 5,000,000 0
==============================================================================
Merrill Lynch Global Investment Series: Income 10,000,000 0
Strategies Portfolio
==============================================================================
Merrill Lynch Prime Rate Portfolio 5,000,000 0
==============================================================================
Merrill Lynch Senior Floating Rate Fund, Inc. 10,000,000 0
==============================================================================
Senior High Income Portfolio, Inc. 5,000,000 0
==============================================================================
Mitsubishi Trust and Banking 0 18,000,000
==============================================================================
Schedule I
Page 2
Octagon Loan Trust 9,000,000 0
==============================================================================
Paribas 0 23,000,000
==============================================================================
The Sanwa Bank, Ltd., Chicago Branch 0 18,000,000
==============================================================================
The Sumitomo Bank, Limited, Chicago Branch 0 26,000,000
==============================================================================
Sumitomo Trust and Banking Co., Ltd. New York
Branch 0 11,430,000
==============================================================================
SunTrust Bank 0 11,430,000
==============================================================================
U.S. Bank National Association 0 18,000,000
==============================================================================
Van Kampen American Capital Prime Rate Trust 34,000,000 0
==============================================================================
Van Campen CLO I 10,000,000 0
==============================================================================
Total $200,000,000 $600,000,000
==============================================================================
BANK ADDRESSES
BANKERS TRUST COMPANY
130 Liberty Street, 30th Floor
New York, NY 10006
Tel: (212) 250-4886
(212) 250-1661
Fax: (212) 250-7218
Attention: Anthony LoGrippo
Diane Rolfe
ALLIED IRISH BANK
405 Park Avenue
New York, NY 10022
Tel.: (212) 339-8018
Fax: (212) 339-8008
Attention: Marcia Meeker
BANK OF MONTREAL
115 South LaSalle Street, 12th Floor
Chicago, IL 60603
Tel.: (312) 750-3860
Fax: (312) 750-6057
Attention: Leon Sinclair
THE BANK OF NEW YORK
One Wall Street, 19th Floor
New York, NY 10286
Tel.: (212) 635-8204
Fax: (212) 635-1208
Attention: John Lambert
BANKBOSTON, N.A.
100 Federal Street
MS: 01-11-06
Boston, MA 02110-2016
Tel.: (617) 434-0896
Fax: (617) 434-6046
Attention: Randy Wehling
BANK OF NOVA SCOTIA
181 West Madison Street, Suite 3700
Chicago, IL 60602
Tel.: (312) 201-4112
Fax: (312) 201-4108
Attention: David J. Vishny
BANK OF SCOTLAND
181 West Madison Street, Suite 3525
Chicago, IL 60602
Tel.: (312) 263-4054
Fax: (312) 263-1143
Attention: Alison Divney
PACIFIC INVESTMENT MANAGEMENT COMPANY
840 Newport Center Drive
Newport Beach, CA 92658
Tel.: (949) 717-7363
Fax: (949) 640-3419
Attention: Ray Kennedy
BANK OF TOKYO MITSUBISHI LTD.
227 West Monroe Street, Suite 2300
Chicago, IL 60606
Tel.: (312) 696-4662
Fax: (312) 696-4535
Attention: Alex Lam
BANQUE PARIBAS
227 West Monroe Street, Suite 3300
Chicago, IL 60606
Tel.: (312) 853-6000
Fax: (312) 853-6020
Attention: Karen Coons
CANADIAN IMPERIAL BANK OF COMMERCE
200 West Monroe Street, Suite 2300
Chicago, IL 60606
Tel.: (312) 750-8731
Fax: (312) 236-8810
Attention: David Quon
CHANCELLOR
1166 Avenue of the Americas, 27th Floor
New York, NY 10036
Tel.: (212) 278-9673
Fax: (212) 278-9619
Attention: Chris Bondy
CHIAO TUNG BANK
200 Liberty Street
New York, NY 10281
Tel.: (212) 285-2666
Fax: (212) 285-2922
Attention: Ifen Lee
CITIBANK GLOBAL ASSET MANAGEMENT
599 Lexington Avenue
26th Floor, Zone 10
New York, NY 10043
Tel.: (212) 559-4786
Fax: (212) 793-1871
Attention: Hans Christensen
ING CAPITAL ADVISORS
233 W. Wacker Drive, Suite 5200
Chicago, IL 60606
Tel.: (312) 496-7606
Fax: (312) 496-7611
Attention: Jane Nelson
CITY NATIONAL BANK
400 North Roxbury Drive
Beverly Hills, CA 90210
Tel.: (310) 888-6132
Fax: (310) 888-6152
Attention: Kim R. Bingham
CREDIT LYONNAIS CHICAGO BRANCH
227 W. Monroe Street, Suite 3800
Chicago, IL 60606
Tel.: (312) 220-7302
Fax: (312) 641-0527
Attention: Julie Kanak
CREDIT AGRICOLE INDOSUEZ
55 East Monroe Street, Suite 4700
Chicago, IL 60603
Tel.: (312) 917-7573
Fax: (312) 372-3724
Attention: Paul Dytrych
EATON VANCE
24 Federal Street
Boston, MA 02110
Tel.: (617) 654-8484
Fax: (617) 695-9594
Attention: Payson Swaffield
CHASE BANK OF TEXAS
(FC CBO LTD.)
600 Travis Street
Houston, TX 77002-8039
Tel.: (713) 216-4780
Fax: (713) 216-2101
Attention: Mike Flores
FIRST AMERICAN NATIONAL
315 Deaderick Street
Nashville, TN 37237-0314
Tel.: (615) 748-2720
Fax: (615) 748-2485
Attention: Jerry Watterworth
FIRST COMMERCIAL
515 South Flower Street, Suite 1050
Los Angeles, CA 90071
Tel.: (213) 362-0200
Fax: (213) 362-0219
Attention: Jonathan Kuo
FIRST UNION NATIONAL BANK
301 S. College Street, DC-5
Charlotte, NC 28288-0737
Tel.: (704) 374-6060
Fax: (704) 374-3300
Attention: Roger Pelz
FLEET BANK
Mail Stop: MA OF D07L
1 Federal Street
Boston, MA 02211
Tel.: (617) 346-5061
Fax: (617) 346-0145
Attention: Jeffrey C. Lynch
THE FUJI BANK, LTD.
225 West Wacker Drive, Suite 2000
Chicago, IL 60606
Tel.: (312) 621-0397
Fax: (312) 621-0539
Attention: James R. Fayen
THE INDUSTRIAL BANK OF JAPAN, LIMITED
227 West Monroe Street, Suite 2600
Chicago, IL 60606
Tel.: (312) 855-1111
Fax: (312) 855-8200
Attention: Tim Avendt
THE LONG-TERM CREDIT BANK OF JAPAN, LIMITED
190 South LaSalle Street, Suite 800
Chicago, IL 60603
Tel.: (312) 704-5479
Fax: (312) 704-8505
Attention: Armund Schoen
MERRILL LYNCH
800 Scudders Mill Road
Plainsboro, NJ 08536
Tel.: (609) 282-3001
Fax: (609) 282-2756
Attention: John M. Johnson
MERCANTILE BANK OF ST. LOUIS
Mercantile Tower, Tram 10-6
7th & Washington Street, 12th Floor
St. Louis, MO 63101
Tel.: (314) 425-2459
Fax: (314) 425-2203
Attention: Stephen M. Reese
MITSUBISHI TRUST & BANKING CORP.
311 West Wacker Drive, Suite 6300
Chicago, IL 60606
Tel.: (312) 408-6051
Fax: (312) 663-0863
Attention: John Pastore
NATIONSBANK
Mail Code M01-800-12-08
NationsBank Plaza
800 Market Street
St. Louis, Missouri 63101
Tel.: (314) 466-6695
Fax: (314) 466-7783
Attention: Michael F. Murphy
OCTAGON
380 Madison Avenue, 12th Floor
New York, NY 10017
Tel.: (212) 622-3070
Fax: (212) 622-3797
Attention: Jim Ferguson
THE SANWA BANK, LIMITED
10 South Wacker Drive, 31st Floor
Chicago, IL 60606
Tel.: (312) 368-3006
Fax: (312) 346-6677
Attention: Kenneth C. Eichwald
THE SUMITOMO BANK
233 South Wacker Drive, Suite 4800
Chicago, IL 60606
Tel.: (312) 879-7673
Fax: (312) 876-6436
Attention: Thomas Hanzel
THE SUMITOMO TRUST & BANKING CO., LTD., NEW YORK BRANCH
527 Madison Avenue
New York, NY 10022
Tel.: (212) 326-0600
Fax: (212)
Attention: Suraj P. Bhatia
SUNTRUST BANK, ATLANTA
25 Park Place, 24th Floor
Mail Code 118
Atlanta, Georgia 30303
Tel.: (404) 658-4923
Fax: (404) 658-4905
Attention: Linda L. Dash
U.S. BANK NATIONAL ASSOCIATION
U.S. Bank Place (MPFP0607)
601 Second Avenue South
Minneapolis, MN 55402-4302
Tel.: (612) 973-0848
Fax: (612) 973-0824
Attention: Erik P. Dove
VAN KAMPEN
One Parkview Plaza
Oakbrook Terrace, IL 60181
Tel.: (630) 684-6438
Fax: (630) 684-6740
Attention: Jeffrey Maillet