FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
Exhibit 10.1
EXECUTION COPY
FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as of
May ___, 2010, by and among MOHAWK INDUSTRIES, INC., a Delaware corporation (the “Company”),
the Subsidiaries of the Company identified as “Borrowers” on the signature pages hereto (together
with the Company, the “Borrowers”), the Subsidiaries of the Company identified as
“Guarantors” on the signature pages hereto (collectively, the “Guarantors”), the Lenders
signatory hereto, and XXXXX FARGO BANK, NATIONAL ASSOCIATION (successor by merger to Wachovia Bank,
National Association), a national banking association, as administrative agent for the Lenders
(“Administrative Agent”).
STATEMENT OF PURPOSE
WHEREAS, the Borrowers, the Guarantors party thereto, the Lenders party thereto and the
Administrative Agent are parties to that certain Loan and Security Agreement dated as of September
2, 2009 (as amended, restated, supplemented or otherwise modified from time to time, the “Loan
Agreement”).
WHEREAS, the Borrowers have requested certain amendments and modifications to and under the
Loan Agreement as more particularly described herein.
WHEREAS, the Administrative Agent and the Lenders are willing to consent to such requests and
have agreed to make such amendments and modifications to and under the Loan Agreement as provided
herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
SECTION 1 Capitalized Terms. All capitalized undefined terms used in this Amendment
(including, without limitation, in the Statement of Purpose hereto) shall have the meanings
assigned thereto in the Loan Agreement.
SECTION 2 Amendments. Subject to and in accordance with the terms and conditions set
forth herein, and effective on and after the First Amendment Effective Date (as defined in
Section 3 below), the Loan Agreement is hereby amended as follows:
(a) Amended Definitions. The following definitions set forth in Section
1.1 of the Loan Agreement are hereby amended as follows:
(i) “Applicable Margin” is hereby amended by deleting the pricing grid in such
definition in its entirety and replacing it with the following:
| Applicable Margin | ||||||||||||
| for Eurodollar Rate | ||||||||||||
| Loans and Swingline | Applicable Margin | |||||||||||
| Level | Average Excess Availability | Loans | for Base Rate Loans | |||||||||
1 |
Less than $200,000,000 | 3.25 | % | 1.75 | % | |||||||
2 |
Greater than or equal to | |||||||||||
| $200,000,000 but less | ||||||||||||
| than $400,000,000 | 3.00 | % | 1.50 | % | ||||||||
3 |
Greater than or equal | |||||||||||
| to $400,000,000 | 2.75 | % | 1.25 | % | ||||||||
(ii) “Commitment Fee Rate” is hereby amended and restated in its entirety as
follows:
“Commitment Fee Rate” means, on any date of calculation, (a)
if Average Excess Availability during the immediately preceding calendar
quarter (or part thereof) is equal to or greater than fifty percent (50%) of
the Aggregate Commitment then in effect, 0.65% per annum or (b) if Average
Excess Availability during the immediately preceding calendar quarter (or
part thereof) is less than fifty percent (50%) of the Aggregate Commitment
then in effect, 0.50% per annum.”
(iii) “Consolidated Indebtedness Payments” is hereby amended and
restated in its entirety as follows:
“Consolidated Indebtedness Payments” means, for any applicable
period of computation, the sum of all (a) scheduled payments of principal on
Consolidated Indebtedness for such period (including the principal component
of payments due on Capital Leases or under any synthetic lease, tax
retention operating lease, off-balance sheet loan or similar off-balance
sheet financing product during such period) and (b) (i) scheduled payments
of principal of the Existing Senior Notes (or any Permitted Refinancing
Indebtedness in respect thereof) made during such period and (ii) any
payment of the Existing Senior Notes (or any Permitted Refinancing
Indebtedness in respect thereof) made from proceeds of the Loans during such
period; provided that Consolidated Indebtedness Payments shall not
include (i) voluntary prepayments or mandatory prepayments of Loans
hereunder or (ii) any payment pursuant to which such Consolidated
Indebtedness is refinanced or repaid in whole or in part (A) through an
incurrence of Indebtedness expressly permitted by Section 10.1, (B)
with the proceeds of an issuance of Capital Stock of the Company or (C) with
the proceeds of a disposition of assets (other than Collateral) expressly
permitted pursuant to Section 10.5.”
(iv) “Maturity Date” is hereby amended and restated in its entirety as
follows:
“Maturity Date” means the earlier to occur of (a) September 2,
2013; provided that such date shall be accelerated to: (i) if the
2011 Notes have not been repaid, refinanced, defeased or, in the reasonable
determination of the Administrative Agent, the payment in full thereof
adequately collateralized or reserved for by the Borrowers prior to October
15, 2010, October 15, 2010 and (ii) if the Maturity Date has not been
modified pursuant to clause (i) above and the 2012 Notes have not been
repaid, refinanced, defeased or, in the reasonable determination of the
Administrative Agent, the payment in full thereof adequately collateralized
or reserved for by the Borrowers prior to January 15, 2012, January 15,
2012, (b) the date of termination of the entire Aggregate Commitment by the
Administrative Borrower pursuant to Section 2.6 or (c) the
date on which the Obligations have been accelerated pursuant to
Section 11.2(b) and in connection therewith, the Obligations have
become immediately due and
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payable and the Aggregate Commitment has been
terminated. For purposes hereof, the Administrative Agent shall deem the
payment in full of the applicable Existing Senior Notes to be adequately
collateralized or reserved for if, at the time of determination, (x) the
Company have arranged for the following (individually or a through a
combination of the following) in an amount greater than or equal to the
amount necessary to fully repay the principal of, premium, if any, and
interest on the applicable Existing Senior Notes, on the respective maturity
dates thereof, as required pursuant to the 2011 Indenture and/or 2012
Indenture, as applicable (such amount, the “Refinancing Amount”):
(A) such amount shall be deposited into and held in the Collateral Account
(such deposit amount with the Administrative Agent, the “Maturity Date
Deposit Amount”) and/or (B) the Administrative Agent (at the written
direction of the Company) shall have established Reserves (in addition to
any other Reserves established pursuant to the terms of this Agreement) in
such amount (such Reserve amount, the “Maturity Date Reserve
Amount”) (provided that the Maturity Date Reserve Amount, once
so established, shall constitute a Reserve until the applicable Existing
Senior Notes are no longer outstanding) or (y) the Company shall have
defeased the applicable Existing Senior Notes in accordance with Section
10.4 of the 2011 Indenture or Section 8.4 of the 2012 Indenture, as
applicable.”
(v) “Permitted Acquisition” is hereby amended by replacing the amount
“$300,000,000” with “$200,000,000” in clauses (d)(ii)(A), (f) and (g) thereof.
(b) New Definition. The following definitions are hereby added to Section
1.1 in the appropriate alphabetical location:
“Collateral Account” means a deposit account or securities
account under the exclusive dominion and control of the Administrative Agent
which the Loan Parties shall not be permitted to access except as permitted
under Section 6.4.”
“Maturity Date Deposit Amount” has the meaning given such term
in the definition of Maturity Date.
“Maturity Date Reserve Amount” has the meaning given such term
in the definition of Maturity Date.
(c) Amendments to Article VI. Article VI is amended by adding the following
new Section 6.4 to the end of such Article:
“Section 6.4 Collateral Account. So long as no Default or Event of
Default shall have occurred and be continuing: (a) amounts on deposit in the
Collateral Account shall be invested in cash or such Cash Equivalents as the Company
may elect; (b) if at any time the amount on deposit in the Collateral Account
exceeds the applicable Refinancing Amount, upon the written request of the Company,
the Administrative Agent will withdraw the amount of such excess from the Collateral
Account and return such amount to the Company; (c) if at any time the applicable
Refinancing Amount exceeds the amount on deposit in the Collateral Account, upon the
written request of the Administrative Agent, the Company will deposit an amount
equal to such excess into the Collateral Account; and (d) upon the written request
and direction of the Company, the Administrative Agent will withdraw amounts on
deposit in the Collateral Account for
payment to the trustee of the applicable Existing Senior Notes for the purpose
of paying, prepaying, redeeming or otherwise acquiring for value the applicable
Existing Senior
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Notes, so long as after giving effect to any such payment,
prepayment, redemption or acquisition for value, the remaining amount on deposit in
the Collateral Account will equal or exceed the applicable Refinancing Amount
(determined after taking into account such payment, prepayment, redemption or
acquisition for value). Any request from the Company to withdraw amounts from the
Collateral Account pursuant to clause (b) or (d) above will be accompanied by a
certification by the Company of the applicable Refinancing Amount as of such date.
The Collateral Account, and all amounts on deposit therein, shall constitute
Collateral and the Company shall take, at the Company’s expense, all such necessary
actions as the Administrative Agent may reasonably request to create and perfect the
Administrative Agent’s security interest therein. At the time of the deposit of any
amounts into the Collateral Account, the Company shall certify in writing to the
Administrative Agent the amount of funds being provided from the proceeds of Loans
and the amount of funds being provided from other cash or Cash Equivalents of the
Company, as applicable.”
(d) Amendments to Section 10.3.
(i) Section 10.3(p)(ii)(A) is hereby amended by replacing the amount
“$300,000,000” with “$200,000,000” in such Section.
(ii) Section 10.3(q) is hereby amended by replacing each occurrence of
the amount “$300,000,000” with “$200,000,000” in such Section.
(e) Amendments to Section 10.9.
(i) Section 10.9(b) is amended by deleting the introductory clause
thereof in its entirety and replacing it as follows:
“make any payment or prepayment on, or redeem or acquire for value
(including, without limitation, (x)(i) by way of depositing with any trustee
with respect thereto money or securities before due for the purpose of
paying such when due or (ii) by depositing the Maturity Date Deposit Amount
into the Collateral Account and/or establishing a Reserve in the amount of
the Maturity Date Reserve Amount, and (y) at the maturity thereof) any
Subordinated Indebtedness or the Existing Senior Notes (or any Permitted
Refinancing Indebtedness in respect thereof), except:”
(ii) Section 10.9(b)(iii) is hereby amended and restated in its
entirety as follows:
“(iii) prepayments, repurchases and repayments of the Existing Senior
Notes (or any Permitted Refinancing Indebtedness in respect thereof)
(including, without limitation, (x) by way of depositing with any trustee
with respect thereto money or securities before due for the purpose of
paying such when due or (y) by depositing the Maturity Date Deposit Amount
into the Collateral Account and/or establishing a Reserve in the amount of
the Maturity Date Reserve Amount, as described in the definition of Maturity
Date, so long as (A) in the case of any optional prepayment, repurchase or
repayment, no Default or Event of Default shall have occurred and be
continuing or would result therefrom and (B) such prepayment, repurchase or
repayment is made from the proceeds of (x) any Permitted Refinancing
Indebtedness expressly permitted pursuant to Section
10.1(l), (y) an issuance of Capital Stock by the Company or
(z) a disposition of assets (other than Collateral) expressly permitted
pursuant to Section 10.5;
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provided that if any such
prepayment, repurchase or repayment is made from any source not described in
clause (iii)(B) above, then the making of such prepayment, repurchase or
repayment shall be a breach of this Section unless:
(A) both 30-Day Excess Availability and Excess Availability on
the date of such prepayment, repurchase or repayment (calculated on a
pro forma basis after giving effect to such
prepayment, repurchase or repayment) equal or exceed $200,000,000; or
(B) (1) both 30-Day Excess Availability and Excess Availability
on the date of such prepayment, repurchase or repayment (calculated
on a pro forma basis after giving effect to such
prepayment, repurchase or repayment) equal or exceed twenty-five
percent (25%) of the Aggregate Commitment and (2) the Company shall
have a Fixed Charge Coverage Ratio equal to or greater than 1.10 to
1.00 (calculated on a pro forma basis after giving
effect to such prepayment, repurchase or repayment);
provided that if a repayment of the Existing Senior Notes
under this clause (iii) is effected by the making of a Maturity Date
Deposit Amount and/or reserving the Maturity Date Reserve Amount, the
applicable test under subclause (A) or (B) herein shall be measured
only at the time such deposit is made and/or reserve is established,
provided further that, notwithstanding the foregoing,
no payment of the Existing Senior Notes shall be permitted to be made
from amounts held in the Collateral Account or from the proceeds of
Revolving Loans if a Default or Event of Default shall have occurred
and be continuing or would result therefrom; and”
Except as so amended, the Loan Agreement and all other Loan Documents shall continue in full
force and effect.
SECTION 3 Effectiveness. This Amendment shall become effective (including any
resulting changes to the Applicable Margin and the Commitment Fee Rate) on the date upon which each
of the following conditions is satisfied (such date, the “First Amendment Effective Date”):
(a) Execution of Counterparts of Amendment. The Administrative Agent shall
have received counterparts of this Amendment duly executed by the Borrowers, the Guarantors,
the Lenders and the Administrative Agent.
(b) Amendment Fee. The Borrowers shall have paid to the Administrative Agent
(or its applicable affiliates), for the account of the Lenders (including the Administrative
Agent in its capacity as a Lender) an amendment fee in an aggregate amount equal to 5.0
basis points times the Aggregate Commitment.
(c) Other Documents. The Administrative Agent shall have received any other
documents or instruments reasonably requested by the Administrative Agent in connection with
the execution of this Amendment.
SECTION 4 Limited Effect. Except as expressly provided herein, the Loan Agreement and
the other Loan Documents shall remain unmodified and in full force and effect. This Amendment
shall
not be deemed (a) to be a waiver of, or consent to, or a modification or amendment of, any
other term or condition of the Loan Agreement or any other Loan Document or a waiver of any Default
or Event of
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Default, (b) to prejudice any right or rights which Administrative Agent or Lenders may
now have or may have in the future under or in connection with the Loan Agreement or the other Loan
Documents or any of the instruments or agreements referred to therein, as the same may be amended,
restated, supplemented or modified from time to time, or (c) to be a commitment or any other
undertaking or expression of any willingness to engage in any further discussion with any Borrower
or any other Person with respect to any waiver, amendment, modification or any other change to the
Loan Agreement or the Loan Documents or any rights or remedies arising in favor of Lenders or
Administrative Agent, or any of them, under or with respect to any such documents.
SECTION 5 Representations and Warranties. Each Loan Party represents and warrants
that (a) it has the corporate power and authority to make, deliver and perform this Amendment, (b)
it has taken all necessary corporate or other action to authorize the execution, delivery and
performance of this Amendment, (c) this Amendment has been duly executed and delivered on behalf of
such Loan Party, (d) this Amendment constitutes a legal, valid and binding obligation of such Loan
Party, enforceable against such Loan Party in accordance with its terms; provided, that the
enforceability hereof is subject to general principles of equity and to bankruptcy, insolvency and
similar laws affecting the enforcement of creditors’ rights generally, (e) each of the
representations and warranties made by such Loan Party in or pursuant to the Loan Documents is true
and correct in all material respects on and as of the date hereof as if made on and as of the date
hereof, except for any representation and warranty made as of an earlier date, which representation
and warranty shall remain true and correct as of such earlier date and (f) no Default or Event of
Default has occurred and is continuing as of the date hereof or after giving effect hereto.
SECTION 6 Acknowledgement and Reaffirmation. By its execution hereof, each Loan Party
hereby expressly (a) acknowledges and agrees to the terms and conditions of this Amendment, (b)
reaffirms all of its respective covenants, representations, warranties and other obligations set
forth in the Loan Agreement and the other Loan Documents to which it is a party and (c)
acknowledges that its respective covenants, representations, warranties and other obligations set
forth in the Loan Agreement and the other Loan Documents to which it is a party remain in full
force and effect.
SECTION 7 Costs and Expenses. The Borrowers agree to pay in accordance with
Section 14.3 of the Loan Agreement all reasonable costs and expenses of the Administrative
Agent in connection with the preparation, execution and delivery of this Amendment and the other
instruments and documents to be delivered hereunder, including, without limitation, the reasonable
fees and out-of-pocket expenses of counsel for the Administrative Agent with respect thereto and
with respect to advising the Administrative Agent as to its rights and responsibilities hereunder
and thereunder.
SECTION 8 Execution in Counterparts. This Amendment may be executed by one or more of
the parties to this Amendment on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. Delivery of an executed
signature page of this Amendment by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof.
SECTION 9 Governing Law. The validity, interpretation and enforcement of this
Amendment shall be governed by the internal laws of the State of New York but excluding any
principles of conflicts of law or other rule of law that would cause the application of the law of
any jurisdiction other than the laws of the State of New York.
SECTION 10 Entire Agreement. This Amendment is the entire agreement, and supersedes
any prior agreements and contemporaneous oral agreements, of the parties concerning its subject
matter.
SECTION 11 Successors and Assigns. This Amendment shall be binding on and inure to
the benefit of the parties and their respective heirs, beneficiaries, successors and permitted
assigns.
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[Signature Pages Follow]
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EXECUTION COPY
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their duly
authorized officers, all as of the day and year first written above.
| BORROWERS: | MOHAWK INDUSTRIES, INC. |
|||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Vice President & Treasurer | |||
| ALADDIN MANUFACTURING CORPORATION |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Vice President & Treasurer | |||
| MOHAWK FACTORING, INC. |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Vice President & Treasurer | |||
| DAL-TILE CORPORATION DAL-TILE DISTRIBUTION, INC. MOHAWK CARPET DISTRIBUTION, INC. UNILIN FLOORING NC, LLC |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Vice President & Treasurer | |||
| WAYN-TEX LLC |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Vice President & Treasurer | |||
Mohawk Industries, Inc.
First Amendment
Signature Page
First Amendment
Signature Page
| GUARANTORS: | DAL-ELIT, LLC DAL-TILE GROUP INC. MOHAWK CARPET TRANSPORTATION OF GEORGIA, LLC MOHAWK ESV, INC. MOHAWK SERVICING, LLC |
|||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Vice President & Treasurer | |||
| DAL-TILE INTERNATIONAL INC. DAL-TILE SERVICES, INC. MOHAWK CARPET, LLC |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Vice President & Treasurer | |||
| DAL-TILE SHARED SERVICES, INC. MOHAWK RESOURCES, LLC |
||||
| By: | /s/ Xxxxx X. Xxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxx | |||
| Title: | Vice President & Treasurer | |||
Mohawk Industries, Inc.
First Amendment
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First Amendment
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ADMINISTRATIVE AGENT:
| XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Issuing Bank and Swingline Lender |
||||
| By: | /s/ Xxx Xxxxxx | |||
| Name: | Xxx Xxxxxx | |||
| Title: | ||||
Mohawk Industries, Inc.
First Amendment
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First Amendment
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LENDERS:
| XXXXX FARGO BANK, NATIONAL ASSOCIATION, as Lender |
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| By: | /s/ Xxx Xxxxxx | |||
| Name: | Xxx Xxxxxx | |||
| Title: | ||||
Mohawk Industries, Inc.
First Amendment
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First Amendment
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| JPMORGAN CHASE BANK, N.A., as Lender |
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| By: | /s/ X.X. Xxxxx | |||
| Name: | X.X. Xxxxx | |||
| Title: | Vice President | |||
Mohawk Industries, Inc.
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First Amendment
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| SUNTRUST BANK, as Lender |
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| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Director | |||
Mohawk Industries, Inc.
First Amendment
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| BANK OF AMERICA, N.A., as Lender |
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| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Senior Vice President | |||
Mohawk Industries, Inc.
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| REGIONS BANK, as Lender |
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| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Senior Vice President | |||
Mohawk Industries, Inc.
First Amendment
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First Amendment
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| DEUTSCHE BANK TRUST COMPANY AMERICAS, as Lender |
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| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxx | |||
| Title: | Vice President | |||
| By: | /s/ Xxxx X’Xxxxx | |||
| Name: | Xxxx X’Xxxxx | |||
| Title: | Director | |||
Mohawk Industries, Inc.
First Amendment
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First Amendment
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| BARCLAYS BANK PLC, as Lender |
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| By: | /s/ Xxxx Xxxxxx | |||
| Name: | Xxxx Xxxxxx | |||
| Title: | Assistant Vice President | |||
Mohawk Industries, Inc.
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First Amendment
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| ING BELGIUM SA/NV, as Lender |
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| By: | /s/ Xxxxxx Xxxxx | |||
| Name: | Xxxxxx Xxxxx | |||
| Title: | Director | |||
| By: | /s/ Xxxxxxx Xxxxxx | |||
| Name: | Xxxxxxx Xxxxxx | |||
| Title: | Head of Lending — Structured Finance | |||
Mohawk Industries, Inc.
First Amendment
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First Amendment
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