Exhibit 10.1
FIRST AMENDMENT dated as of November 9, 2000 to the Amended
and Restated Credit Agreement (the "Credit Agreement") dated as of
March 10, 2000, among Sotheby's Holdings, Inc., a Michigan
corporation ("Holdings"), Sotheby's, Inc., a New York corporation,
Oatshare Limited, a company registered in England, and Sotheby's, a
company registered in England (each referred to individually as a
"Borrower" and collectively as the "Borrowers"); the lenders party
thereto (the "Lenders"); and The Chase Manhattan Bank, a New York
banking corporation, as administrative agent (in such capacity, the
"Administrative Agent") and as collateral agent (in such capacity,
the "Collateral Agent") for the Lenders and as the issuing bank (in
such capacity, the "Issuing Bank").
WHEREAS, the Borrowers (such term and each other capitalized term
used but not otherwise defined herein having the meaning assigned to it in the
Credit Agreement) have requested that the Lenders approve amendments to certain
provisions of the Credit Agreement;
WHEREAS, the undersigned Lenders are willing, on the terms and
subject to the conditions set forth herein, to approve such amendments to the
Credit Agreement;
NOW, THEREFORE, in consideration of these premises, the Borrowers and
the undersigned Lenders hereby agree as follows:
SECTION 1. AMENDMENTS. Effective as of the Amendment Effective Date
(as defined in Section 4 hereof), the Credit Agreement is hereby amended as
follows:
(a) The following definitions are inserted in appropriate
alphabetical positions into Section 1.01:
"AMENDMENT EFFECTIVE DATE" shall have the meaning assigned to
such term in the First Amendment dated as of November 9, 2000 to this
Agreement.
"EUROPEAN CLAIMS" shall mean (a) any claims that may arise out
of an inquiry by the European Commission regarding commissions charged by
Sotheby's in auctions in the European Union and (b) claims asserted in
antitrust lawsuits alleging violations of Federal or state antitrust laws
in connection with auctions outside the United States.
"SETTLEMENT AGREEMENTS" shall mean (a) the Sotheby's Settlement
Agreement entered into by Holdings and Sotheby's, Inc. in the matter of IN
RE AUCTION HOUSES ANTITRUST LITIGATION, which relates to allegations of
violations of Federal antitrust laws in connection with auctions in the
United States, (b) the Memorandum of Understanding entered into by
Holdings and Sotheby's, Inc. in the matter of IN RE SOTHEBY'S HOLDINGS,
INC. SECURITIES LITIGATION, which relates to allegations of violations of
Federal securities laws, (c) the Plea Agreement between Holdings and the
United States of America relating to an investigation of possible
antitrust violations by the United States Department of Justice and (d)
the Memorandum of Agreed Terms of Settlement dated September 24, 2000
among Holdings, Sotheby's, Inc. and A. Xxxxxx Xxxxxxx.
(b) Each of the following definitions in Section 1.01 is amended and
restated in its entirety as follows:
"ADJUSTED CONSOLIDATED NET WORTH" shall mean at any date
Consolidated Net Worth at such date minus, to the extent not reflected in
Consolidated Net Worth and without duplication, the aggregate amount of
(a) all payments made by Holdings and the Subsidiaries in respect of
Litigation Liabilities, (b) all accounting reserves established by
Holdings and the Subsidiaries in respect of anticipated Litigation
Liabilities, (c) all amounts escrowed or otherwise segregated from the
general assets of Holdings and the Subsidiaries to provide for Litigation
Liabilities and (d) all amounts that Holdings and the Subsidiaries have
agreed to or become obligated to pay, but have not yet paid, pursuant to
fines, judgments, settlements or agreements entered into in respect of
Litigation Liabilities, plus, to the extent reflected in Consolidated Net
Worth or subtracted from Consolidated Net Worth under the foregoing
clauses (a) through (d), up to $25,000,000 in payments made by Holdings
and the Subsidiaries to settle the European Claims.
"CONSOLIDATED EBITDA" with respect to Holdings and its
consolidated subsidiaries for any period shall mean the sum, without
duplication, of (a) Consolidated Net Income for such period, (b)
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Consolidated Interest Expense for such period, (c) all Federal, state,
local and foreign income taxes deducted in determining such Consolidated
Net Income, (d) depreciation, amortization and other non-cash charges
deducted in determining such Consolidated Net Income, (e) payments and
reserves in respect of obligations under the Settlement Agreements
deducted in determining such Consolidated Net Income, PROVIDED that (i)
such payments and reserves shall not at any time exceed US$205,200,000 and
(ii) at least US$40,000,000 of such payments and reserves shall be paid in
equity securities of Holdings, (f) if such period is the fiscal year
ending December 31, 2000, restructuring and other non-recurring charges
not in excess of US$30,800,000 deducted in determining Consolidated Net
Income for such period, and (g) payments to settle the European Claims
deducted in determining Consolidated Net Income for such period, PROVIDED
that the aggregate cumulative amount of all such payments made during all
periods shall not exceed $25,000,000.
"TRANCHE B LOAN" shall mean a Loan made pursuant to the
requirements of Section 5.11(b).
(c) Section 3.13 is amended and restated in its
entirety as follows:
SECTION 3.13. USE OF PROCEEDS. The Borrowers will use the
proceeds of the Loans only (a) for the purposes specified in the preamble
to this Agreement and (b) to pay amounts due under the Settlement
Agreements or otherwise in respect of Litigation Liabilities.
(d) A new Section 3.15 is inserted immediately following Section 3.14
which shall read as follows:
SECTION 3.15. SETTLEMENT AGREEMENTS. The terms of the Settlement
Agreements are consistent in all material respects with the summary of the
terms of the Settlement Agreements provided by Holdings to the Lenders
prior to the Amendment Effective Date.
(e) A new Section 5.11(c) is inserted following Section 5.11(b) which
shall read as follows:
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(c) The Borrowers agree that in the event that a Tranche B
Borrowing is made at any time after the aggregate principal amount of all
outstanding Tranche B Loans has been reduced to less than $75,000,000 as a
result of prepayments pursuant to Section 2.12, they shall, as a condition
to any subsequent borrowing, take all further actions that may be required
or requested by the Collateral Agent in order to preserve, protect and
perfect the continuing validity and first priority of the mortgage granted
to the Collateral Agent on the York Avenue Property (including without
limitation the payment of applicable recording taxes). The Borrowers agree
that they shall at all times cause the Subsidiary holding title to the
York Avenue Property to have no operations, business, assets or
liabilities other than incidental to the holding of the York Avenue
Property and the granting of the mortgage thereon to the Collateral Agent
as contemplated hereunder.
(f) Section 6.07 is amended and restated in its
entirety as follows:
SECTION 6.07. CONSOLIDATED LEVERAGE RATIO. Permit the
Consolidated Leverage Ratio at any time to exceed .60 to 1.0.
(g) Section 6.08 is amended and restated in its
entirety as follows:
SECTION 6.08. ADJUSTED CONSOLIDATED NET WORTH. Permit Adjusted
Consolidated Net Worth to be less than (a) $160,000,000 at any time prior
to Xxxxx 00, 0000, (x) $175,000,000 at any time during the period from and
including March 31, 2001 to and including June 29, 2001 and (c)
$200,000,000 at any time on or after June 30, 2001.
(h) Section 6.09 is amended and restated in its
entirety as follows:
SECTION 6.09. CONSOLIDATED COVERAGE RATIO. Permit the
Consolidated Coverage Ratio for any period of four consecutive financial
quarters ending after the date hereof to be less than 3.0 to 1.0.
(i) Article VII is amended by deleting the word "or" at the end of
clause (n) of such Article, inserting the word "or" at the end of clause (o) of
such Article and inserting a new clause (p) immediately after clause (o) of such
Article which shall read as follows:
(p) (i) any of the Settlement Agreements shall be terminated,
rejected by an applicable court of
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law (or, in the case of Settlement Agreements relating to class
actions, by requisite class members) or materially modified, in each
case if such termination, rejection or modification could reasonably
be expected, in the judgment of the Required Lenders, to result in a
material adverse effect on the business, assets, operations or
financial condition of Holdings and the Subsidiaries, taken as a
whole, (ii) Holdings shall breach or fail to perform any of its
material obligations under the Settlement Agreements or (iii) Xxxxxx
Xxxxxxx shall fail to pay when and as due any amount for which he is
responsible under the Settlement Agreements.
SECTION 2. WAIVER. Any Default prior to the Amendment Effective Date
resulting from a failure to perform any of the covenants contained in Sections
6.07, 6.08 or 6.09 of the Credit Agreement is hereby waived effective as of the
Amendment Effective Date; PROVIDED that such Default would not have occurred if
the amendments provided for herein to Sections 6.07, 6.08 and 6.09 and the
definitions used in such Sections had been in effect at the time of such
Default.
SECTION 3. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers
represents and warrants to each of the Lenders that, after giving effect to the
amendments and waiver contemplated hereby, (a) the representations and
warranties of the Borrowers set forth in the Credit Agreement are true and
correct in all material respects on and as of the date of this Amendment, except
to the extent such representations and warranties expressly relate to an earlier
date (in which case such representations and warranties shall be true and
correct in all material respects as of the earlier date) and (b) no Default or
Event of Default has occurred and is continuing.
SECTION 4. EFFECTIVENESS. This Amendment shall become effective as of
the date (the "Amendment Effective Date") when the following conditions are
satisfied:
(a) The Administrative Agent (or its counsel) shall have received
copies hereof that, when taken together, bear the signatures of the Borrowers
and the Required Lenders.
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(b) The Administrative Agent shall have received the favorable
written opinions of Weil, Gotshal & Xxxxxx LLP and Xxxxx, Day, Xxxxxx & Xxxxx,
counsel for the Borrowers, and Xx. Xxxxxxxxx X. Xxxxxxxxx, General Counsel of
Sotheby's Holdings, Inc. dated the Amendment Effective Date and addressed to the
Lenders, the Administrative Agent and the Issuing Bank in form and substance
satisfactory to Administrative Agent; the Borrowers hereby instruct such counsel
to deliver such opinions to the Administrative Agent.
(c) All legal matters incidental to the Credit Agreement and this
Amendment shall be satisfactory to the Required Lenders and to counsel for the
Administrative Agent.
(d) The Administrative Agent shall have received a certificate of
Holdings, dated the Amendment Effective Date and signed by a Financial Officer
of Holdings, confirming compliance, after giving effect to the amendment and
waiver contemplated hereby with the conditions precedent set forth in paragraphs
(b), (c) and (d) of Section 4.01 of the Credit Agreement.
(e) The Settlement Agreements (i) shall have been executed and
delivered by all parties thereto, (ii) shall provide for cash payments not in
excess of $281,000,000 in the aggregate, of which Xxxxxx Xxxxxxx shall have
agreed to pay $186,000,000, and (iii) shall be consistent in all material
respects with the summary of the terms thereof previously provided to the
Lenders by Holdings.
(f) There shall have occurred no material increase in the anticipated
liabilities associated with the antitrust, securities and other investigations
and proceedings pending with respect to Holdings and its subsidiaries and not
covered by the Settlement Agreements.
SECTION 5. AMENDMENT FEE. Holdings agrees to pay to the undersigned
Lenders such amendment fees, and at such times, as have been separately agreed
upon.
SECTION 6. APPLICABLE LAW. THIS AMENDMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
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SECTION 7. NO OTHER AMENDMENTS. Except as expressly set forth herein,
this Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, or otherwise affect the rights and remedies of any party under, the
Credit Agreement, or alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect. This Amendment shall apply and be effective
only with respect to the provisions of the Credit Agreement specifically
referred to herein.
SECTION 8. COUNTERPARTS. This Amendment may be executed in two or
more counterparts, each of which shall constitute an original, but all of which
when taken together shall constitute but one contract. Delivery of an executed
counterpart of a signature page of this Amendment by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of this
Amendment.
SECTION 9. HEADINGS. Section headings used herein are for convenience
of reference only, are not part of this Amendment and are not to affect the
construction of, or to be taken into consideration in interpreting, this
Amendment.
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IN WITNESS WHEREOF, the Borrowers and the undersigned Lenders have
caused this Amendment to be duly executed by their duly authorized officers, all
as of the date first above written.
SOTHEBY'S HOLDINGS, INC.,
by /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior VP and CFO
SOTHEBY'S, INC.,
by /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior VP and CFO
OATSHARE LIMITED,
by /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Director
SOTHEBY'S,
by /s/ Xxxxxxx X. Xxxxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Director
THE CHASE MANHATTAN BANK,
N.A., individually and
as Administrative Agent,
Collateral Agent, and Issuing
Bank,
by /s/ Xxxxxxxx Xxxx
------------------------
Name: Xxxxxxxx Xxxx
Title: Vice President
THE BANK OF NEW YORK,
by /s/ Xxxxx X. Xxxxx
--------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
BANK ONE, NA (Main Office Chicago),
by /s/ Xxxxxxx Xxxx
---------------------------
Name: Xxxxxxx Xxxx
Title: Commercial Banking Officer
BARCLAYS BANK PLC,
by /s/ Xxxxxxx Xxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President
COMERICA BANK,
by /s/Xxxxxx X. Xxxxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxxxx
Title: Vice President
BAYERISCHE HYPO-UND VEREINSBANK AG,
New York Branch,
by /s/ Xxxxxxxx Xxxxxxxxxx
----------------------------
Name: Xxxxxxxx Xxxxxxxxxx
Title: Director
by /s/ Xxxxxxxxx X. Xxxxx
----------------------------
Name: Xxxxxxxxx X. Xxxxx
Title: Director
BANCA MONTE DEI PASCHI DI SIENA S.P.A.,
by /s/ Giulio Natalicchi
--------------------------
Name: Giulio Natalicchi
Title: Senior Vice President & General
Manager
by /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA,
by /s/ Xxxx X. Xxxxxx
--------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
THE FUJI BANK, LTD.,
by /s/ Xxxx Xxxxxx
--------------------------
Name: Xxxx Xxxxxx
Title: Vice President & Manager
BANCA COMMERCIALE ITALIANA
NEW YORK BRANCH,
by /s/ Xxxxxxx Xxxxxxxxx
--------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
by /s/ X. Xxxxxxxxx
--------------------------
Name: X. Xxxxxxxxx
Title: Vice President
BBL INTERNATIONAL (U.K.) LIMITED,
by /s/ X.X. Xxxxxx
-------------------------
Name: X.X. Xxxxxx
Title: Manager
by /s/ X-X Xxxxxxx
-------------------------
Name: X-X Xxxxxxx
Title: Senior Manager
BANK HAPOALIM B.M.,
by /s/ Xxxxx X. Xxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
by /s/ Xxxxx Xxxx Xxxxx
-------------------------
Name: Xxxxx Xxxx Xxxxx
Title: First Vice President
& Corporate Manager
