Exhibit 10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered
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into as of December 20, 2000 among KNOLL, INC., a Delaware corporation (the
"Borrower"), each of the Domestic Subsidiaries of the Borrower (individually
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a "Guarantor" and collectively the "Guarantors"), the Lenders party hereto,
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and BANK OF AMERICA, N.A., as Administrative Agent for the Lenders (in such
capacity, the "Administrative Agent"). Capitalized terms used herein and not
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otherwise defined shall have the meanings ascribed thereto in the Credit
Agreement (as defined below).
R E C I T A L S
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WHEREAS, the Borrowers, the Guarantors, the Lenders and the Agents entered
into that certain Credit Agreement, dated as of October 20, 1999 (as amended
or modified from time to time, the "Credit Agreement");
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WHEREAS, the Borrowers have requested that the Required Lenders agree to
certain changes to the Credit Agreement; and
WHEREAS, the Required Lenders are willing to agree to certain changes to
the Credit Agreement as more fully set forth below.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
A G R E E M E N T
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1. Interest Coverage Ratio. The definition of "Interest Coverage
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Ratio" in Section 1.1 of the Credit Agreement is amended in its entirety to
read as follows:
"Interest Coverage Ratio" means, as of the end of each fiscal
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quarter of the Credit Parties, for the twelve month period ending on such
date, with respect to the Credit Parties and its Subsidiaries on a
consolidated basis, the ratio of (a) EBITDA for the applicable period to
(b) cash Interest Expense for the applicable period.
2. Release of Collateral Event. Clause (b) of the definition of
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"Release of Collateral Event" in Section 1.1 of the Credit Agreement is
amended in its entirety to read as follows:
(b) the Credit Parties shall have maintained for two successive
fiscal quarters (at least one of which must be the fiscal quarter ending
on December 31) a Leverage Ratio,
as of the end of each such fiscal quarter, of less than 2.0 to 1.0;
provided that for the purposes of calculating the Leverage Ratio for this
clause (b), any dividend declared during a fiscal quarter (and the Funded
Debt to be incurred in connection therewith) shall be deemed to have
occurred during that fiscal quarter whether or not such dividend is
actually paid (and the Funded Debt incurred) during such fiscal quarter.
3. Restricted Payments. Clause (b)(iv) of Section 8.7 of the Credit
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Agreement is amended in its entirety to read as follows:
(iv) the Borrower may pay dividends or repurchase or redeem its
Capital Stock so long as (A) after giving effect to such dividend,
repurchase or redemption on a pro forma basis, as if such dividend,
repurchase or redemption had occurred on the last day of the twelve month
period ending on the last day of the Borrower's most recently completed
fiscal quarter for which internal financial statements are available
(1) if the Collateral has not been released pursuant to Section 11.17,
the Leverage Ratio is less than 2.5 to 1.0, (2) if the Collateral has
been released pursuant to Section 11.17, the Leverage Ratio is less than
2.0 to 1.0 and (3) the ratio of (x) EBITDA to (y) the sum of cash Interest
Expense for the applicable period plus amounts used to pay dividends or
repurchase or redeem Capital Stock pursuant to this Section 8.7 during
the applicable period is greater than or equal to 1.0 to 1.0, and the
Borrower shall have delivered to the Administrative Agent a certificate
of its chief financial officer to such effect setting forth in reasonable
detail the computation necessary to make such determination of the ratios
set forth above and (B) at the time of such dividend, repurchase or
redemption and after giving effect thereto, no Default or Event of Default
shall exist or be continuing.
4. Release of Collateral. The first sentence of Section 11.17 of the
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Credit Agreement is amended in its entirety to read as follows:
Upon the occurrence of a Release of Collateral Event, the Lenders
agree, upon the request and the expense of the Borrower, to take such
action as is necessary to release all Collateral securing the Credit
Party Obligations; provided, however, that the Borrower may not request
the release of the Collateral if the Borrower has declared or paid a
dividend and the effect of such dividend is to cause the Leverage Ratio,
as of the end of the fiscal quarter in which such dividend is declared or
paid, to be greater than or equal to 2.0 to 1.0.
5. Conditions Precedent. This Amendment shall not be effective until
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the following conditions have been satisfied or waived by the Required Lenders:
(a) Receipt by the Administrative Agent of copies of this
Amendment duly executed by the Borrower and the Required Lenders.
(b) The payment by the Borrower of an amendment fee to each
Lender who executes and delivers this Amendment to the Administrative
Agent (or its designee) on or
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before Wednesday, December 20, 2000, in an amount equal to .15% of each
such Lender's total Commitment.
The Administrative Agent agrees to inform the Borrower and the
Lenders in writing when the conditions set forth above have been
satisfied.
6. Ratification of Credit Agreement. The term "Credit Agreement" as
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used in each of the Credit Documents shall hereafter mean the Credit Agreement
as amended by this Amendment. Except as herein specifically agreed, the
Credit Agreement is hereby ratified and confirmed and shall remain in full
force and effect according to its terms. The Credit Parties hereby reaffirm
the Liens granted in favor of the Lenders pursuant to the Collateral Documents.
7. Authority/Enforceability. Each of the Credit Parties, the Agents
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and the Lenders party hereto represents and warrants as follows:
(a) It has taken all necessary action to authorize the execution,
delivery and performance of this Amendment.
(b) This Amendment has been duly executed and delivered by such
Person and constitutes such Person's legal, valid and binding obligations,
enforceable in accordance with its terms, except as such enforceability
may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance or transfer, moratorium or similar laws affecting creditors'
rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding at law or in
equity).
(c) No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or
third party is required in connection with the execution, delivery or
performance by such Person of this Amendment.
8. No Default. Each Credit Party represents and warrants to the
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Lenders that (a) the representations and warranties of the Credit Parties set
forth in Section 6 of the Credit Agreement are true and correct as of the date
hereof, unless they specifically refer to an earlier date, (b) no event has
occurred and is continuing which constitutes a Default or an Event of Default,
and (c) it has no claims, counterclaims, offsets, credits or defenses to its
obligations under the Credit Documents or to the extent it has any they are
hereby released in consideration of the Required Lenders entering into this
Amendment.
9. No Conflicts. Neither the execution and delivery of this Amendment,
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nor the consummation of the transactions contemplated herein, nor performance
of and compliance with the terms and provisions hereof by the Credit Parties
will (a) violate, contravene or conflict with any provision of its respective
articles or certificate of incorporation, bylaws or other organizational or
governing document, (b) violate, contravene or conflict with any law, rule,
regulation, order, writ, judgment, injunction, decree or permit applicable to
any Credit Party, (c) violate, contravene or conflict with contractual
provisions of, or cause an event of default under,
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any indenture, loan agreement, mortgage, deed of trust, contract or other
agreement or instrument to which a Credit Party is a party or by which it or
its properties may be bound or (d) result in or require the creation of any
Lien upon or with respect to a Credit Party's properties.
10. Counterparts/Telecopy. This Amendment may be executed in any
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number of counterparts, each of which when so executed and delivered shall be
an original, but all of which shall constitute one and the same instrument.
Delivery of executed counterparts by telecopy shall be effective as an original
and shall constitute a representation that an original will be delivered if
requested.
11. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF
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THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
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Each of the parties hereto has caused a counterpart of this Amendment to
be duly executed and delivered as of the date first above written.
BORROWER:
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KNOLL, INC.,
a Delaware corporation
By: /s/ Barry L. McCabe
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Name: Barry L. McCabe
Title: Senior Vice President
GUARANTORS:
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KNOLL OVERSEAS, INC.,
a Delaware corporation
By: /s/ Barry L. McCabe
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Name: Barry L. McCabe
Title: Senior Vice President
SPINNEYBECK ENTERPRISES, INC.,
a New York corporation
By: /s/ Barry L. McCabe
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Name: Barry L. McCabe
Title: Senior Vice President
LENDERS:
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BANK OF AMERICA, N.A.,
in its capacity as Administrative Agent
By: /s/ Kathleen M. Carry
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Name: Kathleen M. Carry
Title: Vice President
BANK OF AMERICA, N.A., individually
in its capacity as a Lender
By: /s/ David H. Strickert
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Name: David H. Strickert
Title: Principal
THE CHASE MANHATTAN BANK
By: /s/ William J. Caggiano
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Name: William J. Caggiano
Title: Managing Director
THE BANK OF NEW YORK
By: /s/ Walter C. Parelli
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Name: Walter C. Parelli
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ Brian S. Allen
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Name: Brian S. Allen
Title: Managing Director
CIBC INC.
By: /s/ Patricia Schaupp
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Name: Patricia Schaupp
Title: Executive Director
CREDIT AGRICOLE INDOSUEZ
By: /s/ Michael Fought
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Name: Michael Fought
Title: Vice President
By: /s/ Michael G. Haggarty
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Name: Michael G. Haggarty
Title: Vice President
THE DAI-ICHI KANGYO BANK, LTD.
By: /s/ Andreas Panteli
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Name: Andreas Panteli
Title: Senior Vice President
BANK ONE, NA
By: /s/ Steven F. Smith
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Name: Steven F. Smith
Title: First Vice President
FIRST UNION NATIONAL BANK
By: /s/ David J.C. Silander
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Name: David J.C. Silander
Title: Vice President
IKB DEUTSCHE INDUSTRIEBANK AG
LUXEMBOURG BRANCH
By: /s/ Albrecht Perrin
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Name: Albrecht Perrin
Title: Manager
By: /s/ Manfred Ziwey
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Name: Manfred Ziwey
Title: Director
MERITA BANK Plc
By: /s/ Michael J. Maher
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Name: Michael J. Maher
Title: Senior Vice President
By: /s/ Garry Weiss
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Name: Garry Weiss
Title: Vice President
THE SUMITOMO BANK, LIMITED
By: /s/ Edward D. Henderson, Jr.
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Name: Edward D. Henderson, Jr.
Title: Senior Vice President
SUMMIT BANK
By: /s/ Karen D. Budniak
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Name: Karen D. Budniak
Title: Vice President
SUNTRUST BANK, ATLANTA
By: /s/ Jeffrey A. Howard
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Name: Jeffrey A. Howard
Title: Director
CHANG HWA COMMERCIAL BANK, LTD.,
NEW YORK BRANCH
By: /s/ Wan-Tu Yeh
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Name: Wan-Tu Yeh
Title: Senior Vice President &
General Manager