SECOND AMENDMENT
SECOND AMENDMENT dated as of September 30, 1997 (this
"Amendment") to the Amended and Restated Credit Agreement dated
as of February 17, 1995 (as in effect immediately prior to the
date hereof, the "Credit Agreement") among D 56, INC., a
Minnesota corporation (the "Company"), the several banks and
other financial institutions party thereto (the "Banks") and The
CHASE MANHATTAN BANK (as successor to Chemical Bank), a New York
banking corporation, as agent for the Banks (in such capacity,
the "Agent").
W I T N E S S E T H :
WHEREAS, the Company, the Banks, the Co-Agents named
therein and the Agent are parties to the Credit Agreement;
WHEREAS, the Company has requested that the Agent and
the Banks amend the Credit Agreement in certain respects; and
WHEREAS, the Agent and the Banks are willing to enter
into this Amendment on the terms and conditions hereof;
NOW, THEREFORE, in consideration of the premises and
the mutual covenants herein contained, the parties hereto agree
as follows:
1. Defined Terms. Unless otherwise defined herein,
capitalized terms used herein which are defined in the Credit
Agreement are used herein as so defined.
2. Amendment to Subsection 1.1. (a) Subsection 1.1
of the Credit Agreement is hereby amended by inserting, at the
end of clause (a) of the definition of "Net Proceeds", the
following new proviso:
"provided, further, that for the purposes of this clause
(a), Net Proceeds will include amounts that would otherwise
constitute Net Proceeds received as described in clause (ii)
of the definition of Aircraft Resale Transaction only to the
extent that such amounts are received by the Company or its
Subsidiaries on a date that is more than 180 days after the
first date on which a payment described in clause (i) of
such definition is made;"
(b) Subsection 1.1 of the Credit Agreement is hereby
further amended by inserting therein, in appropriate alphabetical
order, the following new definition:
"'Aircraft Resale Transaction": the transaction
comprising (i) the payment by the Company and/or its
Subsidiaries of an aggregate amount not in excess of
$6,000,000 to terminate the lease and receive title in
respect of the Gulfstream GII B S/N 257 and (ii) the
subsequent sale of such aircraft by the Company and/or its
Subsidiaries for net cash consideration of not less than the
amount of the payment referred to above."
3. Amendment to Subsection 8.5. Subsection 8.5 of the
Credit Agreement is hereby amended by (i) deleting the word "and"
appearing at the end of clause (e) thereof, (ii) replacing the
period at the end of clause (f) thereof with the phrase "; and"
and (iii) adding at the end of such subsection the following new
clause (g):
"(g) the Company and its Subsidiaries may consummate
the Aircraft Resale Transaction."
4. Amendment to Subsection 8.6. Subsection 8.6 of the
Credit Agreement is hereby amended by (i) deleting the word "and"
appearing at the end of clause (h) thereof, (ii) replacing the
period at the end of clause (i) thereof with the phrase "; and"
and (iii) adding at the end of such subsection the following new
clause (j):
"(j) the Company and its Subsidiaries may consummate
the Aircraft Resale Transaction."
5. Amendment to Subsection 8.8. Subsection 8.8 of the
Credit Agreement is hereby amended by deleting said subsection in
its entirety and substituting, in lieu thereof, the following new
subsection 8.8:
"8.8 Consolidated Net Worth. Permit Consolidated Net
Worth as at the last day of any fiscal quarter ending on or
after October 4, 1997 to be less than the sum of (i)
$130,000,000 plus (ii) 50% of Consolidated Net Income for
each fiscal quarter (if Consolidated Net Income for such
fiscal quarter is positive) that commences after January 3,
1998 and ends on or prior to such last day."
6. Amendment to Subsection 8.11. Subsection 8.11 of
the Credit Agreement is hereby amended by deleting clause (d) in
its entirety and substituting therefor the following new clause
(d):
"(d) so long as no Default or Event of Default has
occurred or would occur after giving effect to such
declaration or payment, the Company may, from time to time,
pay cash dividends to EBI and Intermediate Co., EBI may
declare and pay cash dividends to Intermediate Co. and
Intermediate Co. may declare and pay cash dividends to
Holding in an aggregate amount not to exceed the sum of (i)
$100,000,000 plus (ii) in any fiscal year ending on or after
January 2, 1999, an amount equal to the lesser of (A) 50%
(or, from and after the date of payment in full of the Term
Loans, 100%) of Excess Cash Flow for the immediately
preceding fiscal year and (B) 50% (or, from and after the
date of payment in full of the Term Loans, 75%) of
Consolidated Net Income for such immediately preceding
fiscal year; provided that (x) the amount of dividend
availability determined for any fiscal year pursuant to
clause (ii) above that is not paid as dividends thereunder
during such fiscal year may be carried forward and added to
such availability in any subsequent fiscal year, (y) no such
dividend may be paid if the proceeds thereof are used or are
intended to be used to pay principal of Indebtedness of
Holding unless at the time of such declaration or payment
the aggregate outstanding amount of the Revolving Credit
Loans and Acceptance Obligations, other than Revolving
Credit Loans used solely to support foreign currency xxxxxx,
is zero and (z) the Agent shall have received, with a
counterpart for each Bank, a certificate of the chief
financial officer of the Company setting forth a calculation
of the estimated Consolidated Net Income and Excess Cash
Flow for the immediately preceding fiscal year of the
Company and, if such dividend is paid in reliance on
Consolidated Net Income and Excess Cash Flow periods not
covered by audited financial statements of the Company
previously delivered to the Banks, stating that such
calculation constitutes a good faith reasonable estimate of
Consolidated Net Income and Excess Cash Flow for the period
not covered by such financial statements based on all facts
and circumstances then known."
7. Representations and Warranties. The Company hereby
confirms that, after giving effect to the amendments provided for
herein, the representations and warranties contained in Section 5
of the Credit Agreement are true and correct in all material
respects on and as of the date hereof and no Default or Event of
Default has occurred and is continuing.
8. No Other Amendments. Except as expressly amended
hereby, the Credit Agreement shall continue to be, and shall
remain, in full force and effect in accordance with its terms.
9. Counterparts. This Amendment may be executed by
the parties hereto in any number of separate counterparts and all
of such counterparts taken together shall be deemed to constitute
one and the same instrument.
10. Conditions to Effectiveness. This Amendment shall
become effective as of the date first written above when each of
the following conditions to effectiveness shall have been
satisfied:
(i) the Agent shall have received counterparts to this
Amendment, duly executed by the Company, the Required Banks
and the Agent; and
(ii) the Agent shall have received the Acknowledgement
and Consent, attached to each counterpart hereof, duly
executed by each of the Credit Parties (other than the
Company).
11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and
duly authorized officers as of the date set forth above.
D 56, INC.
By: /s/ XXXXXXX X. XXXXXXX
Title: Vice President
THE CHASE MANHATTAN BANK, as Agent
and as a Bank
By: /s/ XXXXXXXX XXXXXXXX
Title: Authorized Signatory
BANK OF AMERICA NT & SA
By: /s/ J. XXXXX XXXXXXXX
Title: Assistant Vice President
FIRST BANK NATIONAL ASSOCIATION
By: /s/ XXXXXXX XXXXXXX
Title: Vice President
XXXXXX TRUST AND SAVINGS BANK
By: /s/ XXXXXX X. XXXXX
Title: Authorized Signatory
BANK OF NOVA SCOTIA
By:
Title:
SUMITOMO BANK, LIMITED
By: /s/ XXXX X. XXXXXX, XX.
Title: Vice President & Manager
By: /s/ XXXX XXXXXX
Title: Vice President
NBD BANK
By: /s/ XXXXXXXXXX X. XXXXX
Title: Vice President
SOCIETE GENERALE
By:
Title:
ABN-AMRO BANK N.V.
By: /s/ XXXXX X. XXXXXXXX
Title: Managing Director and Group
Vice President
By: /s/ XXXX X. XXXXXXXXXX
Title: Assistant Vice President
THE LONG-TERM CREDIT BANK OF JAPAN,
LIMITED
By: /s/ XXXXX X. XXXXX
Title: Senior Vice President
ACKNOWLEDGEMENT AND CONSENT
Each of the undersigned Credit Parties (as defined in
the Amended and Restated Credit Agreement dated as of February
17, 1995; as amended, supplemented and otherwise modified prior
to the execution and delivery of the Amendment, the "Credit
Agreement") among D 56, INC., a Minnesota corporation (the
"Company"), the banks and other financial institutions parties
thereto (collectively, the "Banks") and THE CHASE MANHATTAN BANK
(as successor to Chemical Bank), a New York banking corporation,
as agent for the Banks (in such capacity, the "Agent") hereby
acknowledges, and consents to, the execution and delivery of the
Second Amendment dated as of September 30, 1997 to the Credit
Agreement, and agrees to remain bound by each Credit Document to
which it is a party.
DEPARTMENT 56, INC.
By: /s/ XXXXXXX X. XXXXXXX
Title: Vice President
FL 56 INTERMEDIATE CORP.
By: /s/ XXXXXXX X. XXXXXXX
Title: Vice President
xx xxxxxxx international, inc.
By: /s/ XXXXXXX X. XXXXXXX
Title: Vice President
DEPARTMENT 56 TRADING CO., LTD.
By: /s/ XXXXXXX X. XXXXXXX
Title: Vice President
