FIRST AMENDMENT AND CONSENT
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FIRST AMENDMENT AND CONSENT (this "Amendment"), dated as of April 13,
1998, among CAF HOLDINGS, INC. ("Holdings"), XXXXXXX & XXXXXX FLOORCOVERINGS,
INC. (the "Borrower"), the financial institutions party to the Credit Agreement
referred to below (each, a "Bank" and, collectively, the "Banks"), and BANKERS
TRUST COMPANY, as Agent for the Banks (in such capacity, the "Agent"). All
capitalized terms used herein and not otherwise defined herein shall have the
respective meanings provided such terms in the Credit Agreement.
WITNESSETH:
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WHEREAS, Holdings, the Borrower, the Banks and the Agent are parties to
a Credit Agreement, dated as of February 6, 1997 (the "Credit Agreement");
WHEREAS, the Borrower desires to acquire, through Xxxxxxx & Xxxxxx
Floorcoverings UK Limited, a registered company in England ("C&A UK") and a
Wholly-Owned Subsidiary of the Borrower, all of the capital stock of Advanced
Carpet Tiles Limited, a registered company in England ("ACT"), pursuant to, and
in accordance with the terms of an Agreement (as amended, modified or
supplemented to the date hereof, the "Stock Purchase Agreement"), among C&A UK,
Gradus Group Limited and Headlam Group PLC (the "ACT Acquisition"), which
acquisition, after giving effect to this Amendment, will constitute a Permitted
Acquisition effected in accordance with the requirements of the Credit
Agreement.
WHEREAS, the Borrower has requested certain amendments and consents to
the Credit Agreement in connection with the ACT Acquisition and a certain
proposed joint-venture transaction as described below; and
WHEREAS, subject to terms and conditions of this Amendment, this Banks
wish to grant certain consents to the Credit Agreement, and the parties hereto
wish to amend the Credit Agreement as herein provided;
NOW, THEREFORE, it is agreed:
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I. Amendments and Consents to Credit Agreement.
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1. The Banks hereby acknowledge and agree that the ACT Acquisition
may be effected as a Permitted Acquisition in accordance with all applicable
requirements of the Credit Agreement, including, without limitation, Section
8.02 thereof; provided that, notwithstanding anything to the contrary contained
in the Credit Agreement, the following deviations from the requirements of a
Permitted Acquisition under the Credit Agreement shall be permitted (and only
such deviations shall be permitted) in connection with the ACT Acquisition so
long as the same otherwise meets all applicable requirements for a Permitted
Acquisition pursuant to the Credit Agreement:
(i) upon the consummation of the ACT Acquisition, ACT may become a
Wholly-Owned Foreign Subsidiary of the Borrower; and
(ii) the consideration paid by C&A UK in connection with the ACT
Acquisition may include (x) unsecured Indebtedness of C&A UK or ACT
evidenced by a seller promissory note in an aggregate principal amount
not to exceed (Pounds)1,500,000, so long as (I) any such Indebtedness is
unguaranteed except as permitted by Section 8.04(n) of the Credit
Agreement, (II) such promissory note bears no interest and (III) such
promissory note shall otherwise be in form and substance satisfactory to
the Agent or (y) deferred compensation in an aggregate amount not to
exceed (Pounds)1,500,000 as provided in the Stock Purchase Agreement.
(2) Section 8.02 of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (q) of said Section, (ii)
redesigning clause (r) of said Section as (s) and (iii) inserting the following
new clause (r) immediately following clause (q) of said Section:
"(r) any Foreign Subsidiary may be merged with and into, or be
dissolved or liquidated into, or transfer any of its assets to, any
Wholly-Owned Foreign Subsidiary so long as (i) no Default or Event of
Default then exists or would result therefrom, (ii) such Wholly-Owned
Foreign Subsidiary is the surviving corporation of any such merger,
dissolution or liquidation and (iii) the security interest, if any,
granted to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Pledge Agreement (and any foreign equivalent thereof) in
the capital stock of such surviving Wholly-Owned Foreign Subsidiary
shall remain in full force and effect and perfected (at least to the
same extent as in effect immediately prior to such merger, consolidation
or liquidation); and"
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3. Section 8.04 of the Credit Agreement is hereby amended by (i)
redesigning clause (1) of said Section as clause (o) and (ii) inserting the
following new clauses (l), (m) and (n) immediately following clause (k) of said
Section:
"(l) unsecured indebtedness of C&A UK of ACT evidenced by a
seller promissory note in an aggregate principal amount not to exceed
(Pounds)1,500,000 (as reduced by any repayments of principal thereof),
so long as (I) any such indebtedness is unguaranteed except by C&A UK,
ACT or the Borrower, (II) such promissory note bears no interest and
(III) such promissory note shall otherwise be in form and substance
satisfactory to the Agent;
(m) Indebtedness of C&A UK and ACT under lines of credit in an
aggregate principal amount not to exceed (Pounds)1,000,000 at any time
outstanding, so long as the proceeds of such Indebtedness are used
solely for the working capital purposes of C&A UK and its Subsidiaries;
(n) Indebtedness of the Borrower, C&A UK and/or ACT consisting
of an unsecured guaranty of the Indebtedness permitted pursuant to
Section 8.04(l); and".
4. Section 8.05 of the Credit Agreement is hereby amended by (i)
deleting the word "and" appearing at the end of clause (q) of said Section, (ii)
redesignating clause (r) of said Section as clause(s) and (iii) inserting the
following new clause (r) immediately following clause (q) of said Section:
"(r) the Borrower may make cash capital contributions to Xxxxxxx
& Xxxxxx Floorcoverings Asia PTE. Ltd., so long as the aggregate amount
of all such contributions at any one time outstanding (without giving
effect to any write-downs or write-offs thereof) does not exceed
$500,000; and".
5. Notwithstanding anything to the contrary contained in Sections
8.15(a) and (b) of the Credit Agreement, the Borrower shall be permitted to form
Xxxxxxx & Xxxxxx Floorcoverings Asia PTE, Ltd. as a 51%-owned joint venture, so
long as after the formation of such joint venture, the Borrower and such joint
venture, to the extent requested by the Agent or the Required Banks, comply with
the requirements of clauses (ii), (iii) and (iv) of the proviso to Section
8.15(a) of the Credit Agreements.
6. Section 8.08(a) of the Credit Agreement is hereby amended by deleting
the table appearing in said Section in its entirety and inserting the following
new table in lieu thereof:
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Fiscal Year Ending Amount
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January, 1998 $5,200,000
January, 1999 $7,400,000
January, 2000 $6,300,000
January, 2001 $5,500,000
January, 2002 $5,000,000
January, 2003 $5,000,000
7. Section 10 of the Credit Agreement is hereby amended by
inserting in the appropriate alphabetical order the following new definitions:
"C&A UK" shall mean Xxxxxxx & Xxxxxx Floorcoverings UK Limited,
a registered company in England.
"ACT" shall mean Advanced Carpet Tiles Limited, a registered
company in England.
II. Miscellaneous Provisions.
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1. In order to induce the Banks to enter into this Amendment,
each of Holdings and the Borrower hereby represents and warrants that:
(a) no Default or Event of Default exists as of the First
Amendment Effective Date, both before and after giving effect to this
Amendment; and
(b) all of the representations and warranties contained in the
Credit Agreement or the other Credit Documents are true and correct in
all material respects on the First Amendment Effective Date both before
and after giving effect to this Amendment, with the same effect as
though such representations and warranties had been made on and as of
the First Amendment Effective Date (it being understood that any
representation or warranty made as of a specific date shall be true and
correct in all material respects as of such specific date).
2. This Amendment is limited as specified and shall not
constitute a modification, acceptance or waiver of any other provision of the
Credit Agreement or any other Credit Document.
3. This Amendment may be executed in any number of counterparts
and by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one
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and the same instrument. A complete set of counterparts shall be lodged with the
Borrower and the Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. This Amendment shall become effective on the date (the "First
Amendment Effective Date") when each of Holdings, the Borrower and the Required
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered (including by way of facsimile
transmission) the same to the Agent at its Notice Office.
6. From and after the First Amendment Effective Date, all references in
the Credit Agreement and each of the other Credit Documents to the Credit
Agreement shall be deemed to be references to the Credit Agreement as modified
hereby.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Amendment as of the date first above
written.
CAF HOLDINGS, INC.
By__________________________
Title:
XXXXXXX & XXXXXX
FLOORCOVERINGS, INC.
By__________________________
Title:
BANKERS TRUST COMPANY,
Individually and as Agent
By__________________________
Title:
FIRST SOURCE FINANCIAL LLP
By__________________________
Title:
XXXXXX FINANCIAL, INC.
By__________________________
Title:
LASALLE NATIONAL BANK
By__________________________
Title:
THE FIRST NATIONAL BANK OF
BOSTON
By__________________________
Title:
CORESTATES BANK, N.A.
By__________________________
Title:
LTCB TRUST COMPANY
By__________________________
Title:
SANWA BUSINESS CREDIT
CORPORATION
By__________________________
Title:
SENIOR DEBT PORTFOLIO
By__________________________
Title:
WACHOVIA BANK, N.A.
By__________________________
Title:
