Exhibit 10.1
MOHAWK INDSUTRIES, INC.
ALADDIN MANUFACTURING CORPORATION
000 XXXXX XXXXXXXXXX XXXXXXXXX
XXXXXXX, XXXXXXX 00000
As of October 17, 1997
The Prudential Insurance Company of America
c/o The Prudential Capital Group
Xxx Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Re: Sixth Modification to Consolidated Note Agreement
Ladies and Gentlemen:
Each of the undersigned, MOHAWK INDUSTRIES, INC. (together with its
successor and assigns, "INDUSTRIES"), and ALADDIN MANUFACTURING CORPORATION
(f/k/a Mohawk Manufacturing Corporation and f/k/a Mohawk Carpet Corporation,
together with its successor and assigns, "MANUFACTURING" and together with
Industries, the "COMPANIES") and you entered into a Consolidated, Amended and
Restated Note Agreement dated as of September 3, 1993, as modified by letter
agreements dated as of February 24, 1994, September 16, 1994, July 19, 1995,
September 29, 1995 and March 12, 1996 (as modified, the "CONSOLIDATED NOTE
AGREEMENT").
Pursuant to paragraph 11C of the Consolidated Note Agreement and
subject to your written acceptance as hereinafter provided, the undersigned
request your agreement to the following amendment to the Consolidated Note
Agreement. Capitalized terms used herein but not defined herein have the
meanings ascribed to them in the Consolidated Note Agreement, as amended hereby.
The date of effectiveness of this modification is October 17, 1997 (as
used in this Sixth Modification, the "AMENDMENT DATE").
Each of the undersigned, Industries and Manufacturing, hereby agrees
with you as follows:
A. MODIFICATION OF THE CONSOLIDATED NOTE AGREEMENT. Each of the
undersigned, Manufacturing and Industries, and you agree to hereby amend the
Consolidated Note Agreement as follows:
1. Xxxxxxxxx 0X. XXXXXXXXX 5D SHALL BE AMENDED BY DELETING THE
SECOND SENTENCE THEREOF.
1. Xxxxxxxxx 0X. XXXXXXXXX 6B(IV) SHALL BE DELETED IN ITS ENTIRETY
AND THE FOLLOWING SHALL BE INSERTED IN LIEU THEREOF:
"(iv) enter into any Permitted Affiliate Transaction (other than any
Permitted Affiliate Transaction permitted under paragraph 6C(3)(v) or
6C(5)(ii));"
1. Paragraph 6C(1). PARAGRAPH 6C(1)(V) SHALL BE DELETED IN ITS
ENTIRETY AND THE FOLLOWING SHALL BE INSERTED IN LIEU THEREOF:
"(v) Any common law right of setoff or banker's lien arising in
connection with ordinary course of business deposit arrangements maintained
by any of the Companies or its Subsidiaries with its banks or other
financial institutions so long as any such bank or other financial
institution (A) shall not at any time make loans or otherwise extend credit
pursuant to any credit facility to Industries, Carpet, any other Guarantor
or any other Restricted Subsidiary; (B) does not maintain accounts (for the
deposit of cash or otherwise) for the benefit of any such Company or
Subsidiary other than those which have in the aggregate monthly balances
less than $100,000; (C) shall have delivered to each holder of a Note a
Sharing Agreement substantially in the form of Exhibit I attached hereto or
shall be a party to the Bank Agreement and the Intercreditor Agreement; or
(D) shall have waived in writing such common law right of setoff or
banker's lien;"
1. Paragraph 6C(3). PARAGRAPH 6C(3)(V) SHALL BE DELETED IN ITS
ENTIRETY AND THE FOLLOWING SHALL BE INSERTED IN LIEU THEREOF:
"(v) make loans or advances to its employees in the ordinary course
of business and consistent with the practices of Industries or Carpet, as
the case may be, existing on the Date of Closing; provided, however, that
Industries and/or Carpet may make loans or advances in an aggregate amount
not to exceed $10,000,000 at any time outstanding to its officers, with
such proceeds being used for the purposes of purchasing capital stock of
Industries or Carpet, as the case may be, under any stock option plan
sponsored by Industries and paying any tax liabilities incurred by such
officers in connection with the exercise of their rights pursuant to any
such stock option plan and in which such capital stock the officer has
granted a security interest to Industries or Carpet, as the case may be, to
secure such loan or advance;"
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1. Paragraph 6C(8). THE FIRST WORD OF PARAGRAPH 6C(8) SHALL BE
DELETED AND THE FOLLOWING SHALL BE INSERTED IN LIEU THEREOF:
"Except as otherwise provided in Paragraph 6C(3)(v), effect"
1. Xxxxxxxxx 0X. XXXXXXXXX 6D SHALL BE AMENDED BY DELETING THEREFROM
THE WORDS "IF SUCH STOCK IS NOT OTHERWISE PLEDGED PURSUANT TO A SECURITY
AGREEMENT".
1. Xxxxxxxxx 0X. PARAGRAPH 6I(5) SHALL BE AMENDED BY DELETING
THEREFROM THE WORDS "OR TO RELEASE ANY COLLATERAL FROM THE LIEN OF ANY SECURITY
AGREEMENT".
1. Paragraph 7A. PARAGRAPH 7A(XVI) SHALL BE DELETED IN ITS ENTIRETY
AND THE FOLLOWING SHALL BE INSERTED IN LIEU THEREOF:
"(xvi) [Intentionally Omitted]; or".
1. Paragraph 10B. XXXXXXXXX 00X XXXXX XX AMENDED BY DELETING
THEREFROM THE DEFINITIONS OF THE TERMS "COLLATERAL", "COLLATERAL AGENT", AND
"SECURITY AGREEMENT".
1. Paragraph 10B. XXXXXXXXX 00X XXXXX XX AMENDED BY DELETING
THEREFROM THE DEFINITION OF THE TERM "RELATED DOCUMENTS" AND SUBSTITUTING IN ITS
PLACE THE FOLLOWING:
"RELATED DOCUMENTS" shall mean this Agreement (and each Modification
thereof), any Note, each Guaranty Agreement, the Intercreditor Agreement
and any document or instrument executed in connection with any of the
foregoing."
1. Paragraph 10B. XXXXXXXXX 00X XXXXX XX AMENDED BY DELETING
THEREFROM THE DEFINITION OF THE TERM "TOTAL SUBSIDIARY DEBT" AND SUBSTITUTING IN
ITS PLACE THE FOLLOWING:
"TOTAL SUBSIDIARY DEBT" shall mean, at any time, without duplication,
the aggregate principal amount of all unsecured Indebtedness of any
Restricted Subsidiary (other than, (i) subject to compliance with paragraph
5E hereof, Indebtedness under Guarantees by such Restricted Subsidiary of
Indebtedness of either Company or another Restricted Subsidiary and (ii)
Indebtedness owing by a Restricted Subsidiary to any other Restricted
Subsidiary or either Company) and any Preferred Stock of any Restricted
Subsidiary (other than Preferred Stock issued to Industries, Carpet or a
Restricted Subsidiary)."
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a. CONDITIONS PRECEDENT.
Your obligation to enter into, execute and deliver this Sixth
Modification and the effectiveness of paragraph 1 is subject to the
satisfaction, on or before the Amendment Date, of the following conditions, as
determined in your sole judgment:
2. Related Documents. YOU SHALL HAVE RECEIVED THIS SIXTH
MODIFICATION DULY EXECUTED AND DELIVERED BY THE PARTIES THERETO.
2. Representations and Warranties; No Default. THE REPRESENTATIONS
AND WARRANTIES CONTAINED IN PARAGRAPH 8 OF THE CONSOLIDATED NOTE AGREEMENT SHALL
BE TRUE ON AND AS OF THE AMENDMENT DATE, ANY REFERENCE IN SUCH PARAGRAPH 8 TO
THE "DATE OF CLOSING" SHALL FOR PURPOSES HEREOF BE DEEMED TO BE A REFERENCE TO
THE "AMENDMENT DATE" AND ANY REFERENCE TO THE "NOTE AGREEMENT", "THIS AGREEMENT"
OR WORDS OF LIKE IMPORT SHALL MEAN AND BE A REFERENCE TO THE CONSOLIDATED NOTE
AGREEMENT AS AMENDED HEREBY; THERE SHALL EXIST ON THE AMENDMENT DATE NO EVENT OF
DEFAULT OR DEFAULT; AND EACH OF THE COMPANIES SHALL HAVE DELIVERED TO YOU AN
OFFICER'S CERTIFICATE, DATED THE AMENDMENT DATE, REGARDING THE FOREGOING.
2. Proceedings. EACH OF INDUSTRIES, MANUFACTURING AND EACH
GUARANTOR SHALL DELIVER TO YOU CERTIFIED COPIES (CERTIFIED BY ITS SECRETARY OR
ASSISTANT SECRETARY) OF ALL CORPORATE ACTION TAKEN BY IT TO AUTHORIZE THE
EXECUTION, DELIVERY AND PERFORMANCE OF THIS SIXTH MODIFICATION.
2. Amendment of Other Agreements. YOU SHALL RECEIVE AN EXECUTED
COPY OF THE AMENDMENT AND RESTATEMENT OF THE BANK AGREEMENT AND AMENDMENT TO
EACH OF THE 8.46% NOTE AGREEMENT, THE 9.5% NOTE AGREEMENT AND THE SERIES NOTE
AGREEMENT, AMENDING EACH SUCH AGREEMENT IN THE MANNER SUBSTANTIALLY SIMILAR AS
PROVIDED HEREIN, IN FORM AND SUBSTANCE SATISFACTORY TO THE PURCHASERS.
2. Expenses. ALL YOUR FEES AND DISBURSEMENTS (INCLUDING WITHOUT
LIMITATION SPECIAL COUNSEL TO YOU) SHALL HAVE BEEN PAID IN FULL.
2. Other Documents. YOU SHALL HAVE RECEIVED SUCH OTHER
CERTIFICATES, LEGAL OPINIONS AND DOCUMENTS AS YOU OR YOUR SPECIAL COUNSEL MAY
REASONABLY REQUEST, ALL IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO YOU.
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Notwithstanding the foregoing, the effectiveness of paragraphs 1F
through 1J is subject to receipt by the Collateral Agent of written direction
from all of the Lenders (as defined in the Intercreditor Agreement) to release
the Collateral from the Lien held by the Collateral Agent.
a. MISCELLANEOUS.
3. Successors and Assigns. ALL COVENANTS AND OTHER AGREEMENTS IN
THIS SIXTH MODIFICATION CONTAINED BY OR ON BEHALF OF EITHER OF THE PARTIES
HERETO SHALL BIND AND INURE TO THE BENEFIT OF THE RESPECTIVE SUCCESSORS AND
ASSIGNS OF THE PARTIES HERETO (INCLUDING, WITHOUT LIMITATION, ANY TRANSFEREE)
WHETHER SO EXPRESSED OR NOT.
3. Governing Law. THIS SIXTH MODIFICATION SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY,
THE LAW OF THE STATE OF NEW YORK.
3. Severability. ANY PROVISION OF THIS SIXTH MODIFICATION WHICH IS
PROHIBITED OR UNENFORCEABLE IN ANY JURISDICTION SHALL, AS TO SUCH JURISDICTION,
BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR UNENFORCEABILITY WITHOUT
INVALIDATING THE REMAINING PROVISIONS HEREOF, AND ANY SUCH PROHIBITION OR
UNENFORCEABILITY IN ANY JURISDICTION SHALL NOT INVALIDATE OR RENDER
UNENFORCEABLE SUCH PROVISION IN ANY OTHER JURISDICTION.
3. Descriptive Headings. THE DESCRIPTIVE HEADINGS OF THE SEVERAL
PARAGRAPHS OF THIS SIXTH MODIFICATION ARE INSERTED FOR CONVENIENCE ONLY AND DO
NOT CONSTITUTE A PART OF THIS SIXTH MODIFICATION.
3. Counterparts. THIS SIXTH MODIFICATION MAY BE EXECUTED IN ANY
NUMBER OF COUNTERPARTS, EACH OF WHICH SHALL BE DEEMED AN ORIGINAL, BUT ALL OF
WHICH TOGETHER SHALL CONSTITUTE ONE INSTRUMENT.
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If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return the same to the
Companies, whereupon this letter shall become a binding agreement among the
Companies and you.
Very truly yours,
MOHAWK INDUSTRIES, INC.
By: _______________________________
Title:
ALADDIN MANUFACTURING CORPORATION
(f/k/a Mohawk Manufacturing and
f/k/a Mohawk Carpet Corporation)
By: _____________________________
Title:
The foregoing Sixth Modification
is hereby accepted as of the date
first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: ___________________________
Title:
Agreed and Consented to as Guarantor:
MOHAWK INDUSTRIES, INC.
By: ___________________________
Title:
MOHAWK MARKETING, INC.
By: ___________________________
Title:
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MOHAWK CARPET CORPORATION
By: ___________________________
Title:
MOHAWK XXXXX, INC.
By: ___________________________
Title:
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