CREDIT AGREEMENT
among
FURNITURE BRANDS INTERNATIONAL, INC.,
BROYHILL FURNITURE INDUSTRIES, INC.,
LANE FURNITURE INDUSTRIES, INC.,
and
THOMASVILLE FURNITURE INDUSTRIES, INC.,
as BORROWERS,
VARIOUS LENDERS,
FIRST UNION NATIONAL BANK,
as DOCUMENTATION AGENT,
BANK OF AMERICA, N.A.,
as SYNDICATION AGENT,
DEUTSCHE BANK AG, NEW YORK BRANCH,
as ADMINISTRATIVE AGENT,
and
DEUTSCHE BANK SECURITIES INC.,
as LEAD ARRANGER and SOLE BOOK MANAGER
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Dated as of June 7, 2000
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<PAGE>
CREDIT AGREEMENT, dated as of June 7, 2000, among FURNITURE BRANDS
INTERNATIONAL, INC., a Delaware corporation ("Furniture Brands"), BROYHILL
FURNITURE INDUSTRIES, INC., a North Carolina corporation ("Broyhill"), LANE
FURNITURE INDUSTRIES, INC., a Delaware corporation ("Lane"), THOMASVILLE
FURNITURE INDUSTRIES, INC., a Delaware corporation ("Thomasville" and together
with Furniture Brands, Broyhill and Lane, each a "Borrower," and, collectively,
the "Borrowers"), the Lenders party hereto from time to time, FIRST UNION
NATIONAL BANK, as Documentation Agent (in such capacity, the "Documentation
Agent"), BANK OF AMERICA, N.A., as Syndication Agent (in such capacity, the
"Syndication Agent"), DEUTSCHE BANK AG, NEW YORK BRANCH, as Administrative Agent
(in such capacity, the "Administrative Agent"), and DEUTSCHE BANK SECURITIES
INC., as Lead Arranger and Sole Book Manager (in such capacities, the "Lead
Arranger") (all capitalized terms used herein and defined in Section 11 are used
herein as therein defined).
W I T N E S S E T H :
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WHEREAS, subject to the terms and conditions set forth herein, the Lenders
are willing to make available to the Borrowers the credit facility provided
herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and conditions set
forth herein (including, on and after the initial Additional Commitment Date,
Section 1.14), each Lender severally agrees, at any time and from time to time
on and after the Effective Date and prior to the Maturity Date, to make a
revolving loan or revolving loans (each, a "Revolving Loan" and, collectively,
the "Revolving Loans") to the Borrowers, which Revolving Loans (i) shall be the
joint and several obligations of each of the Borrowers, (ii) shall be
denominated in Dollars, (iii) shall, at the option of the Borrowers be incurred
and maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that (A) except as otherwise specifically provided in Section 1.10(b),
all Revolving Loans comprising the same Borrowing shall at all times be of the
same Type and (B) unless the Administrative Agent has otherwise determined in
its sole discretion that the Syndication Date has occurred (at which time this
clause (B) shall no longer be applicable), prior to the 90th day following the
Effective Date, Revolving Loans may only be incurred and maintained as, and/or
converted into, Eurodollar Loans so long as all such outstanding Eurodollar
Loans are subject to an Interest Period of one month which begins and ends on
the same day, (iv) may be repaid and reborrowed in accordance with the
provisions hereof, (v) shall not exceed for any Lender at any time outstanding
that aggregate principal amount which, when added to the product of (x) such
Lender's Percentage and (y) the sum of (I) the aggregate amount of all Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Commitment of such
Lender at such time and (vi) shall not exceed for all Lenders at any time
outstanding that aggregate principal amount which, when added to (x) the
aggregate amount of all Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans) at such time and
(y) the aggregate principal amount of all Swingline Loans (exclusive of
Swingline Loans which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Total Commitment at such time.
(b) Subject to and upon the terms and conditions herein set forth, the
Swingline Lender agrees to make at any time and from time to time on and after
the Effective Date and prior to the Swingline Expiry Date, a revolving loan or
revolving loans (each, a "Swingline Loan" and, collectively, the "Swingline
Loans") to the Borrowers, which Swingline Loans (i) shall be made and maintained
as Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed in aggregate principal amount at any
time outstanding, when combined with the aggregate principal amount of all
Revolving Loans then outstanding and the Letter of Credit Outstandings at such
time, an amount equal to the Total Commitment at such time, (iv) shall not
exceed at any time outstanding the Maximum Swingline Amount and (v) shall be the
joint and several obligations of each of the Borrowers. Notwithstanding anything
to the contrary contained in this Section 1.01(b), (i) the Swingline Lender
shall not be obligated to make any Swingline Loans at a time when a Lender
Default exists unless the Swingline Lender has entered into arrangements
satisfactory to it and the Borrowers to eliminate the Swingline Lender's risk
with respect to the Defaulting Lender's or Lenders' participation in such
Swingline Loans, including by cash collateralizing such Defaulting Lender's or
Lenders' Percentage of the outstanding Swingline Loans and (ii) the Swingline
Lender shall not make any Swingline Loan after it has received written notice
from the Borrowers or the Required Lenders stating that a Default or an Event of
Default exists and is continuing until such time as the Swingline Lender shall
have received written notice (A) of rescission of all such notices from the
party or parties originally delivering such notice or notices or (B) of the
waiver of such Default or Event of Default by the Required Lenders.
(c) On any Business Day, the Swingline Lender may, in its sole discretion,
give notice to the Lenders that its outstanding Swingline Loans shall be funded
with a Borrowing of Revolving Loans (provided that such notice shall be deemed
to have been automatically given upon the occurrence of a Default or an Event of
Default under Section 10.05 or upon the exercise of any of the remedies provided
in the last paragraph of Section 10), in which case a Borrowing of Revolving
Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by the
Lenders (without giving effect to any reductions thereto pursuant to the last
paragraph of Section 10) pro rata based on each Lender's Percentage (determined
before giving effect to any termination of the Commitments pursuant to the last
paragraph of Section 10) and the proceeds thereof shall be applied directly to
the Swingline Lender to repay the Swingline Lender for such outstanding
Swingline Loans. Each Lender hereby irrevocably agrees to make Revolving Loans
upon one Business Day's notice pursuant to each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the date
specified in writing by the Swingline Lender notwithstanding that (i) the amount
of the Mandatory Borrowing may not comply with the Minimum Borrowing Amount
otherwise required hereunder, (ii) whether any conditions specified in Section 6
are then satisfied, (iii) whether a Default or an Event of Default then exists,
(iv) the date of such Mandatory Borrowing and (v) the amount of the Total
Commitment at such time. In the event that any Mandatory Borrowing cannot for
any reason be made on the date otherwise required above (including, without
limitation, as a result of the commencement of a proceeding under the Bankruptcy
Code with respect to any of the Borrowers), then each Lender hereby agrees that
it shall forthwith purchase (as of the date the Mandatory Borrowing would
otherwise have occurred, but adjusted for any payments received from the
Borrowers on or after such date and prior to such purchase) from the Swingline
Lender such participations in the outstanding Swingline Loans as shall be
necessary to cause the Lenders to share in such Swingline Loans ratably based
upon their respective Percentages (determined before giving effect to any
termination of the Commitments pursuant to the last paragraph of Section 10),
provided that (x) all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date as of which the respective
participation is required to be purchased and, to the extent attributable to the
purchased participation, shall be payable to the participant from and after such
date and (y) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Lender shall be required to pay the
Swingline Lender interest on the principal amount of participation purchased for
each day from and including the day upon which the Mandatory Borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the overnight Federal Funds Rate for the first three days and
at the rate otherwise applicable to Revolving Loans maintained as Base Rate
Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing of Loans shall be not less than the Minimum Borrowing Amount
applicable thereto and, if greater, shall be in the applicable integral multiple
set forth in the definition of Minimum Borrowing Amount, provided that Mandatory
Borrowings shall be made in the amounts required by Section 1.01(c). More than
one Borrowing may occur on the same date, but at no time shall there be
outstanding more than twelve Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrowers desire to incur
Revolving Loans hereunder (excluding Borrowings of Swingline Loans and Revolving
Loans incurred pursuant to Mandatory Borrowings), an Authorized Representative
of the Borrowers shall give the Administrative Agent at the Notice Office at
least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Base Rate Loan and at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing) of
each Eurodollar Loan to be made hereunder, provided that any such notice shall
be deemed to have been given on a certain day only if given before 11:00 A.M.
(New York time) (or before 12:00 Noon (New York time) in the case of a Borrowing
of Base Rate Loans) on such day. Each such written notice or written
confirmation of telephonic notice (each a "Notice of Borrowing"), except as
otherwise expressly provided in Section 1.10, shall be irrevocable and shall be
given by the Borrowers in the form of Exhibit A, appropriately completed to
specify the aggregate principal amount of the Revolving Loans to be made
pursuant to such Borrowing, the date of such Borrowing (which shall be a
Business Day) and whether the Revolving Loans being made pursuant to such
Borrowing are to be initially maintained as Base Rate Loans or Eurodollar Loans
and, if Eurodollar Loans, the initial Interest Period to be applicable thereto.
The Administrative Agent shall promptly give each Lender notice of such proposed
Borrowing, of such Lender's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.
(b) (i) Whenever the Borrowers desire to make a Borrowing of Swingline
Loans hereunder, an Authorized Representative of the Borrowers shall give the
Swingline Lender not later than 12:00 Noon (New York time) on the date that a
Swingline Loan is to be made, written notice or telephonic notice promptly
confirmed in writing of each Swingline Loan to be made hereunder. Each such
notice shall be irrevocable and specify in each case (A) the date of Borrowing
(which shall be a Business Day) and (B) the aggregate principal amount of the
Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c), with the Borrowers irrevocably agreeing, by their incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(c).
(c) Without in any way limiting the obligation of the Borrowers to confirm
in writing any telephonic notice of any Borrowing, conversion or prepayment of
Loans, the Administrative Agent or the Swingline Lender, as the case may be, may
act without liability upon the basis of telephonic notice of such Borrowing,
conversion or prepayment, believed by the Administrative Agent or the Swingline
Lender, as the case may be, in good faith to be from an Authorized
Representative of any Borrower prior to receipt of written confirmation. In each
such case, each Borrower hereby waives the right to dispute the Administrative
Agent's record of the terms of such telephonic notice of such Borrowing,
conversion or prepayment.
1.04 Disbursement of Funds. Except as otherwise specifically provided in
the immediately succeeding sentence, no later than 12:00 Noon (New York time) on
the date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, not later than 2:00 P.M. (New York time) on the date specified pursuant
to Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (New York time) on the date specified in Section 1.01(c)), each
Lender will make available its pro rata portion of each Borrowing to be made on
such date (or in the case of Swingline Loans, the Swingline Lender shall make
available the full amount thereof). All such amounts shall be made available in
Dollars and in immediately available funds at the Payment Office, and the
Administrative Agent will make available to the Borrowers at the Payment Office
the aggregate of the amounts so made available by the Lenders (prior to 1:00
P.M. (New York time)) on such day, to the extent of funds actually received by
the Administrative Agent prior to 12:00 Noon (New York time) on such day. Unless
the Administrative Agent shall have been notified by any Lender prior to the
date of Borrowing that such Lender does not intend to make available to the
Administrative Agent such Lender's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrowers a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the Borrowers to immediately pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Lender or the Borrowers, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Administrative Agent to the
Borrowers until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to (i) if recovered from such
Lender, the overnight Federal Funds Rate for the first three days and at the
interest rate otherwise applicable to such Loans for each day thereafter and
(ii) if recovered from the Borrowers, the rate of interest applicable to the
respective Borrowing, as determined pursuant to Section 1.08. Nothing in this
Section 1.04 shall be deemed to relieve any Lender from its obligation to make
Loans hereunder or to prejudice any rights which the Borrowers may have against
any Lender as a result of any failure by such Lender to make Loans hereunder.
1.05 Notes. (a) Subject to the provisions of Section 1.05(e), the
Borrowers' obligation to pay the principal of, and interest on, the Loans made
by each Lender shall be evidenced (i) if Revolving Loans, by a promissory note
duly executed and delivered by the Borrowers substantially in the form of
Exhibit B-1, with blanks appropriately completed in conformity herewith (each a
"Revolving Note" and, collectively, the "Revolving Notes") and (ii) if Swingline
Loans, by a promissory note duly executed and delivered by the Borrowers
substantially in the form of Exhibit B-2, with blanks appropriately completed in
conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Lender shall (i) be executed by the
Borrowers, (ii) be payable to such Lender or its registered assigns and be dated
the Effective Date (or if issued thereafter, the date of issuance), (iii) be in
a stated principal amount equal to the Commitment of such Lender (or, if issued
after the termination thereof, be in a stated principal amount equal to the
outstanding Revolving Loans of such Lender at such time) and be payable in the
principal amount of the Revolving Loans evidenced thereby, (iv) mature on the
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the case
may be, evidenced thereby, (vi) be subject to voluntary prepayment as provided
in Section 4.01 and mandatory repayment as provided in Section 4.02 and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(c) The Swingline Note issued to the Swingline Lender shall (i) be executed
by the Borrowers, (ii) be payable to the Swingline Lender or its registered
assigns and be dated the Effective Date, (iii) be in a stated principal amount
equal to the Maximum Swingline Amount and be payable in the principal amount of
the outstanding Swingline Loans evidenced thereby from time to time, (iv) mature
on the Swingline Expiry Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans evidenced thereby, (vi)
be subject to voluntary prepayment as provided in Section 4.01 and mandatory
repayment as provided in Section 4.02 and (vii) be entitled to the benefits of
this Agreement and the other Credit Documents.
(d) Each Lender will note on its internal records the amount of each Loan
made by it and each payment in respect thereof and will prior to any transfer of
any of its Notes endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. Failure to make any such notation or any
error in any such notation or endorsement shall not affect the Borrowers'
obligations in respect of such Loans.
(e) Notwithstanding anything to the contrary contained above or elsewhere
in this Agreement, Notes shall only be delivered to Lenders which at any time
(or from time to time) specifically request the delivery of such Notes. No
failure of any Lender to request or obtain a Note evidencing its Loans to the
Borrowers shall affect or in any manner impair the joint and several obligations
of the Borrowers to pay the Loans (and all related Obligations) which would
otherwise be evidenced thereby in accordance with the requirements of this
Agreement, and shall not in any way affect the guaranties therefor provided
pursuant to the various Credit Documents. Any Lender which does not have a Note
evidencing its outstanding Loans shall in no event be required to make the
notations otherwise described in preceding clause (d) of this Section 1.05. At
any time when any Lender requests the delivery of a Note to evidence any of its
Loans, the Borrowers shall promptly execute and deliver to the respective Lender
the requested Note or Notes in the appropriate amount or amounts to evidence
such Loans.
1.06 Conversions. The Borrowers shall have the option to convert, on any
Business Day, all or a portion equal to at least the Minimum Borrowing Amount of
the outstanding principal amount of Revolving Loans made pursuant to one or more
Borrowings of one or more Types of Revolving Loans into a Borrowing of another
Type of Revolving Loan, provided that (i) except as otherwise provided in
Section 1.10(b), Eurodollar Loans may be converted into Base Rate Loans only on
the last day of an Interest Period applicable thereto and no partial conversion
of Eurodollar Loans shall reduce the outstanding principal amount of such
Eurodollar Loans made pursuant to a single Borrowing to less than the Minimum
Borrowing Amount applicable thereto, (ii) unless the Required Lenders otherwise
agree, Base Rate Loans may only be converted into Eurodollar Loans if no Default
or Event of Default is in existence on the date of the conversion, (iii) unless
the Administrative Agent has otherwise determined in its sole discretion that
the Syndication Date has occurred (at which time this clause (iii) shall no
longer be applicable), prior to the 90th day following the Effective Date,
conversions of Base Rate Loans into Eurodollar Loans shall be subject to the
provisions of clause (B) of the proviso in Section 1.01(a)(iii), (iv) no
conversion pursuant to this Section 1.06 shall result in a greater number of
Borrowings of Eurodollar Loans than is permitted under Section 1.02 and (v)
Swingline Loans may not be converted pursuant to this Section 1.06. Each such
conversion shall be effected by the Borrowers by giving the Administrative Agent
at the Notice Office prior to 12:00 Noon (New York time) at least three Business
Days' prior notice (each a "Notice of Conversion") specifying the Revolving
Loans to be so converted, the Borrowing or Borrowings pursuant to which such
Revolving Loans were made and, if to be converted into Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Administrative Agent
shall give each Lender prompt notice of any such proposed conversion.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under this
Agreement shall be incurred from the Lenders pro rata on the basis of their
Commitments. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make Revolving Loans hereunder
and that each Lender shall be obligated to make the Revolving Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to make
its Revolving Loans hereunder.
1.08 Interest. (a) The Borrowers jointly and severally agree to pay
interest in respect of the unpaid principal amount of each Base Rate Loan from
the date the proceeds thereof are made available to the Borrowers until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall be equal to the sum of
the Applicable Base Rate Margin plus the Base Rate in effect from time to time.
(b) The Borrowers jointly and severally agree to pay interest in respect of
the unpaid principal amount of each Eurodollar Loan from the date the proceeds
thereof are made available to the Borrowers until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and (ii)
the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to Section
1.06, 1.09 or 1.10, as applicable, at a rate per annum which shall, during each
Interest Period applicable thereto, be equal to the sum of the Applicable
Eurodollar Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue interest
in respect of each Loan shall, in each case, bear interest at a rate per annum
equal to the greater of (x) the rate which is 2% in excess of the rate then
borne by such Loans and (y) the rate which is 2% in excess of the rate otherwise
applicable to Base Rate Loans from time to time. Interest which accrues under
this Section 1.08(c) shall be payable on a joint and several basis by the
Borrowers on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan (x) quarterly in arrears on each Quarterly
Payment Date, (y) in the case of a repayment in full of all outstanding Base
Rate Loans, on the date of such repayment or prepayment, and (z) at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand, and
(ii) in respect of each Eurodollar Loan (x) on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (y) on any repayment or prepayment (on the
amount repaid or prepaid), at maturity (whether by acceleration or otherwise)
and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent shall
determine the Eurodollar Rate for the respective Interest Period or Interest
Periods and shall promptly notify the Borrowers and the Lenders thereof. Each
such determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
1.09 Interest Periods. At the time the Borrowers give any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Loan (in the case of any subsequent
Interest Period), the Borrowers shall have the right to elect, by having an
Authorized Representative of the Borrowers give the Administrative Agent notice
thereof, the interest period (each an "Interest Period") applicable to such
Eurodollar Loan, which Interest Period shall, at the option of the Borrowers, be
a one, two, three or six-month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Revolving Loan of a different Type)
and each Interest Period occurring thereafter in respect of such Eurodollar
Loan shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end on
the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for
a Eurodollar Loan would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) no Interest Period may be selected at any time when a Default or
an Event of Default is then in existence; and
(vi) no Interest Period in respect of any Borrowing of Eurodollar
Loans shall be selected which extends beyond the Maturity Date.
If upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrowers have failed to elect, or are not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrowers shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Lender
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the Effective Date affecting the interbank Eurodollar market,
adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar
Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the Effective Date in
any applicable law or governmental rule, regulation, order, guideline or
request (whether or not having the force of law) or in the interpretation
or administration thereof and including the introduction of any new law or
governmental rule, regulation, order, guideline or request, such as, for
example, but not limited to: (A) a change in the basis of taxation of
payment to any Lender of the principal of or interest on such Eurodollar
Loan or any other amounts payable hereunder (except for changes in the rate
of tax on, or determined by reference to, the net income or net profits of
such Lender, or any franchise tax based on the net income or net profits of
such Lender, in either case pursuant to the laws of the United States of
America, the jurisdiction in which it is organized or in which its
principal office or applicable lending office is located or any subdivision
thereof or therein), but without duplication of any amounts payable in
respect of Taxes pursuant to Section 4.04(a), or (B) a change in official
reserve requirements, but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Eurodollar
Rate and/or (y) other circumstances since the Effective Date affecting such
Lender or the interbank Eurodollar market or the position of such Lender in
such market (except as a result of a deterioration in the creditworthiness
of such Lender subsequent to the date hereof); or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by any Lender in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the Effective
Date which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed in
writing) to the Borrowers and, except in the case of clause (i) above, to the
Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders). Thereafter (x) in
the case of clause (i) above, Eurodollar Loans shall no longer be available
until such time as the Administrative Agent notifies the Borrowers and the
Lenders that the circumstances giving rise to such notice by the Administrative
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
by the Borrowers with respect to Eurodollar Loans which have not yet been
incurred (including by way of conversion) shall be deemed rescinded by the
Borrowers, (y) in the case of clause (ii) above, the Borrowers jointly and
severally agree to, subject to the provisions of Section 13.15 (to the extent
applicable), pay to such Lender, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Lender in its sole discretion shall
determine) as shall be required to compensate such Lender for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Lender, showing the basis for
the calculation thereof, submitted to the Borrowers by such Lender in good faith
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto) and (z) in the case of clause (iii) above, the Borrowers shall
take one of the actions specified in Section 1.10(b) as promptly as possible
and, in any event, within the time period required by law. Each of the
Administrative Agent and each Lender agrees that if it gives notice to the
Borrowers of any of the events described in clause (i) or (iii) above, it shall
promptly notify the Borrowers and, in the case of any such Lender, the
Administrative Agent, if such event ceases to exist. If any such event described
in clause (iii) above ceases to exist as to a Lender, the obligations of such
Lender to make Eurodollar Loans and to convert Base Rate Loans into Eurodollar
Loans on the terms and conditions contained herein shall be reinstated.
(b) At any time that any Eurodollar Loan is affected by the circumstances
described in Section 1.10(a)(ii) or (iii), the Borrowers may (and in the case of
a Eurodollar Loan affected by the circumstances described in Section
1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then being
made initially or pursuant to a conversion, cancel the respective Borrowing by
giving the Administrative Agent telephonic notice (confirmed in writing) on the
same date that the Borrowers were notified by the affected Lender or the
Administrative Agent pursuant to Section 1.10(a)(ii) or (iii) or (y) if the
affected Eurodollar Loan is then outstanding, upon at least three Business Days'
written notice to the Administrative Agent, require the affected Lender to
convert such Eurodollar Loan into a Base Rate Loan, provided that, if more than
one Lender is affected at any time, then all affected Lenders must be treated
the same pursuant to this Section 1.10(b).
(c) If at any time after the Effective Date any Lender determines that the
introduction of or any change in any applicable law or governmental rule,
regulation, order, guideline, directive or request (whether or not having the
force of law) concerning capital adequacy, or any change in interpretation or
administration thereof by any governmental authority, central bank or comparable
agency, will have the effect of increasing the amount of capital required or
expected to be maintained by such Lender or any corporation controlling such
Lender based on the existence of such Lender's Commitment hereunder or its
obligations hereunder, then the Borrowers jointly and severally agree, subject
to the provisions of Section 13.15 (to the extent applicable), to pay to such
Lender, upon its written demand therefor, such additional amounts as shall be
required to compensate such Lender or such other corporation for the increased
cost to such Lender or such other corporation or the reduction in the rate of
return to such Lender or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Lender will act reasonably
and in good faith and will use averaging and attribution methods which are
reasonable, provided that such Lender's reasonable good faith determination of
compensation owing under this Section 1.10(c) shall, absent manifest error, be
final and conclusive and binding on all the parties hereto. Each Lender, upon
determining that any additional amounts will be payable pursuant to this Section
1.10(c), will give written notice thereof to the Borrowers, which notice shall
show the basis for calculation of such additional amounts.
1.11 Compensation. The Borrowers jointly and severally agree, subject to
the provisions of Section 13.15 (to the extent applicable), to compensate each
Lender, upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Loans but excluding any loss of
anticipated profit) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrowers or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any repayment (including any repayment made pursuant to Section 4.02 or
as a result of an acceleration of the Loans pursuant to Section 10) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
of its Eurodollar Loans is not made on any date specified in a notice of
prepayment given by the Borrowers; or (iv) as a consequence of (x) any other
default by the Borrowers to repay its Loans when required by the terms of this
Agreement or any Note held by such Lender or (y) any election made pursuant to
Section 1.10(b).
1.12 Change of Lending Office. Each Lender agrees that upon the occurrence
of any event giving rise to the operation of Section 1.10(a)(ii) or (iii),
Section 1.10(c), Section 2.06 or Section 4.04 with respect to such Lender, it
will, if requested by the Borrowers, use reasonable efforts (subject to overall
policy considerations of such Lender) to designate another lending office for
any Loans or Letters of Credit affected by such event, provided that such
designation is made on such terms that such Lender and its lending office suffer
no economic, legal or regulatory disadvantage, with the object of avoiding the
consequence of the event giving rise to the operation of such Section. Nothing
in this Section 1.12 shall affect or postpone any of the obligations of the
Borrowers or the rights of any Lender provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Lenders. (x) If any Lender becomes a Defaulting Lender
or otherwise defaults in its obligations to make Loans or fund Unpaid Drawings,
(y) upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect
to any Lender which results in such Lender charging to the Borrowers increased
costs in excess of those being generally charged by the other Lenders or (z) as
provided in Section 13.12(b) in the case of certain refusals by a Lender to
consent to certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Lenders, the
Borrowers shall have the right, if no Default or Event of Default will exist
immediately after giving effect to the respective replacement, to replace such
Lender (the "Replaced Lender") with one or more other Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Lender at the time of
such replacement (collectively, the "Replacement Lender") reasonably acceptable
to the Administrative Agent, provided that (i) at the time of any replacement
pursuant to this Section 1.13, the Replacement Lender shall enter into one or
more Assignment and Assumption Agreements pursuant to Section 13.04(b) (and with
all fees payable pursuant to said Section 13.04(b) to be paid by the Replacement
Lender) pursuant to which the Replacement Lender shall acquire all of the
Commitments and outstanding Revolving Loans of, and participations in Letters of
Credit by, the Replaced Lender and, in connection therewith, shall pay to (x)
the Replaced Lender in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all outstanding
Revolving Loans of the Replaced Lender, (B) an amount equal to all Unpaid
Drawings that have been funded by (and not reimbursed to) such Replaced Lender,
together with all then unpaid interest with respect thereto at such time and (C)
an amount equal to all accrued, but theretofore unpaid, Fees owing to the
Replaced Lender pursuant to Section 3.01, (y) each Issuing Lender an amount
equal to such Replaced Lender's Percentage of any Unpaid Drawing (which at such
time remains an Unpaid Drawing) to the extent such amount was not theretofore
funded by such Replaced Lender to such Issuing Lender and (z) the Swingline
Lender an amount equal to such Replaced Lender's Percentage of any Mandatory
Borrowing to the extent such amount was not theretofore funded by such Replaced
Lender to the Swingline Lender, and (ii) all obligations of the Borrowers owing
to the Replaced Lender (other than those specifically described in clause (i)
above in respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreements, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Revolving Notes executed
by the Borrowers, the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions under this Agreement (including, without
limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06), which shall
survive as to such Replaced Lender.
1.14 Additional Commitments. (a) So long as the Additional Commitment
Requirements are satisfied at the time of the delivery of the written notice
referred to below and on the respective Additional Commitment Date, Furniture
Brands shall have the right, at any time and from time to time within one year
following the Effective Date, and upon at least 15 days prior written notice to
the Administrative Agent, to request on one or more occasions that one or more
Lenders (and/or one or more other Persons which will become Lenders as provided
below) provide Additional Commitments and subject to the applicable terms and
conditions contained in this Agreement and consistent with the amount of
Additional Commitments so provided, make Revolving Loans pursuant to Sections
1.01(a) and 1.01(c) and purchase participations in Letters of Credit pursuant to
Section 2.04, it being understood and agreed, however, that (i) no Lender shall
be obligated to provide an Additional Commitment, (ii) until such time, if any,
as (x) such Lender has agreed in its sole discretion to provide an Additional
Commitment and executed and delivered to the Administrative Agent an Additional
Commitment Agreement in respect thereof as provided in Section 1.14(b) and (y)
such other conditions set forth in Section 1.14(b) shall have been satisfied,
such Lender shall not be obligated to fund any Revolving Loans, or participate
in any Letters of Credit, in excess of the amounts provided for in Section
1.01(a), 1.01(c) and/or 2.01(c), as the case may be, before giving effect to
such Additional Commitments provided pursuant to this Section 1.14, (iii) any
Lender (or, in the circumstances contemplated by clause (vii) below, any other
Person which will qualify as an Eligible Transferee) may so provide an
Additional Commitment without the consent of any other Lender (other than, in
the circumstances contemplated by clause (viii) below, the Administrative Agent
and each Issuing Lender), (iv) each provision of Additional Commitments on a
given date pursuant to this Section 1.14 shall be in integral multiples (in the
aggregate for all Lenders (including, in the circumstances contemplated by
clause (vii) below, Eligible Transferees who will become Lenders)) of at least
$5,000,000, (v) the aggregate amount of all Additional Commitments permitted to
be provided pursuant to this Section 1.14 shall not exceed $70,000,000, (vi) the
fees payable to any Lender providing an Additional Commitment shall be as set
forth in the relevant Additional Commitment Agreement, (vii) if, after Furniture
Brands has requested the then existing Lenders (other than Defaulting Lenders)
to provide Additional Commitments pursuant to this Section 1.14 on the terms to
be applicable thereto, Furniture Brands has not received Additional Commitments
in an aggregate amount equal to that amount of the Additional Commitments which
Furniture Brands desires to obtain pursuant to such request (as set forth in the
notice provided by Furniture Brands to the Administrative Agent as provided
above), then Furniture Brands may request Additional Commitments from Persons
which would qualify as Eligible Transferees hereunder in aggregate amount equal
to such deficiency on terms which are no more favorable to such Eligible
Transferee in any respect than the terms offered to the Lenders, provided that
any such Additional Commitments provided by any such Eligible Transferee which
is not already a Lender shall be in integral multiples (for such Eligible
Transferee) of at least $1,000,000, (viii) no Person (including any existing
Lender and any Eligible Transferee which was not already a Lender) may provide
an Additional Commitment unless approved by each of the Administrative Agent and
each Issuing Lender, provided that such approval shall not be required with
respect to any Additional Commitment assumed by an existing Non-Defaulting
Lender, (ix) the interest rate applicable to Revolving Loans made pursuant to
such Additional Commitments shall be the same as the interest rate applicable at
such time to other Revolving Loans made pursuant to this Agreement and (x) all
actions taken by Furniture Brands pursuant to this Section 1.14(a) shall be done
in coordination with the Administrative Agent.
(b) At the time of any provision of Additional Commitments pursuant to this
Section 1.14, (i) Furniture Brands, the Administrative Agent and each such
Lender or other Eligible Transferee (each, an "Additional Lender") which agrees
to provide an Additional Commitment shall execute and deliver to the
Administrative Agent an Additional Commitment Agreement substantially in the
form of Exhibit I, subject to such modifications in form and substance
satisfactory to the Administrative Agent as may be necessary or appropriate
(with the effectiveness of such Additional Lender's Additional Commitment to
occur upon delivery of such Additional Commitment Agreement to the
Administrative Agent, the payment of any fees required in connection therewith
and the satisfaction of the other conditions in this Section 1.14(b) to the
satisfaction of the Administrative Agent), (ii) the Additional Commitment
Requirements shall have been satisfied, (iii) Furniture Brands shall, in
coordination with the Administrative Agent, repay all outstanding Revolving
Loans of the Lenders, and incur new Revolving Loans from the Lenders, in each
case so that the Lenders participate in each Borrowing of Revolving Loans pro
rata on the basis of their respective Commitments (after giving effect to any
increase in the Total Commitment pursuant to this Section 1.14) and with the
Borrowers being jointly and severally obligated to pay the respective Lenders
the costs of the type referred to in Section 1.11 in connection with any such
repayment and/or Borrowing and (iv) Furniture Brands shall deliver to the
Administrative Agent an opinion, in form and substance satisfactory to the
Administrative Agent, from counsel to Furniture Brands satisfactory to the
Administrative Agent and dated such date, covering such matters similar to those
set forth in the opinion of counsel delivered to the Administrative Agent on the
Effective Date pursuant to Section 5.03 and such other matters as the
Administrative Agent may reasonably request. The Administrative Agent shall
promptly notify each Lender as to the occurrence of each Additional Commitment
Date, and (w) on each such date, the Total Commitment under, and for all
purposes of, this Agreement shall be increased by the aggregate amount of such
Additional Commitments, (x) on each such date Schedule I shall be deemed
modified to reflect the revised Commitments of the affected Lenders, (y) upon
surrender of any old Revolving Notes by the respective Lender (or, if lost, a
standard lost note indemnity), to the extent requested by any Lender, a new
Revolving Note will be issued, at Furniture Brands' expense, to such Additional
Lender, to be in conformity with the requirements of Section 1.05 (with
appropriate modifications) to the extent needed to reflect the revised
Commitment of such Lender and (z) on such date with respect to all outstanding
Letters of Credit and all Unpaid Drawings with respect thereto, there shall be
an automatic adjustment to the participations by the Lenders in such Letters of
Credit and Unpaid Drawings to reflect the new Percentages of the Lenders.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and conditions
herein set forth, the Borrowers may request that any Issuing Lender issue, at
any time and from time to time on and after the Effective Date and prior to the
Maturity Date, for the joint and several account of the Borrowers and for the
benefit of (x) any holder (or any trustee, agent or other similar representative
for any such holders) of L/C Supportable Obligations of the Borrowers or any of
the respective Subsidiaries, an irrevocable standby letter of credit, in a form
customarily used by such Issuing Lender or in such other form as has been
approved by such Issuing Lender and (y) sellers of goods to the Borrowers or any
of their respective Subsidiaries, an irrevocable trade letter of credit, in a
form customarily used by such Issuing Lender or in such other form as has been
approved by such Issuing Lender (each such letter of credit, a "Letter of
Credit" and, collectively, the "Letters of Credit"). All Letters of Credit shall
be denominated in Dollars or an Alternate Currency and shall be issued on a
sight basis only; provided, however, trade Letters of Credit may also be issued
on an acceptance basis providing for drafts thereunder to be drawn on the
relevant Issuing Lender for any period of no less than 30 days and no more than
six months sight, by which a bankers' acceptance will be created. It is hereby
acknowledged and agreed that each of the letters of credit (and any bankers'
acceptances created thereunder) which were issued under the Existing Credit
Agreement prior to the Effective Date and which remain outstanding on the
Effective Date (in the case of such letters of credit, the "Existing Letters of
Credit" and, in the case of such bankers' acceptances, the "Existing
Acceptances") shall, from and after the Effective Date, constitute a "Letter of
Credit" or an "Acceptance", as the case may be, for purposes of this Agreement.
Each (x) Existing Letter of Credit and the Stated Amount and Expiration Date
thereof, together with the account party and beneficiary thereunder, and (y)
Existing Acceptance, and the Stated Amount and Expiration Date thereof, is set
forth on Schedule III.
(b) Each Issuing Lender may agree, in its sole discretion, and DBAG hereby
agrees that in the event a requested Letter of Credit is not issued by one of
the other Issuing Lenders, it will (subject to the terms and conditions
contained herein), at any time and from time to time on or after the Effective
Date and prior to the Maturity Date, following its receipt of the respective
Letter of Credit Request, issue for the account of the Borrowers one or more
Letters of Credit as is permitted to exist pursuant to this Agreement without
giving rise to a Default or Event of Default hereunder, provided that the
respective Issuing Lender shall be under no obligation to issue any Letter of
Credit of the types described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Lender from issuing such Letter of Credit or any requirement of law
applicable to such Issuing Lender or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Lender shall prohibit, or request that such
Issuing Lender refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuing
Lender with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Lender is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed loss,
cost or expense which was not applicable, in effect or known to such
Issuing Lender as of the date hereof and which such Issuing Lender in good
faith deems material to it; or
(ii) such Issuing Lender shall have received notice from any Lender
prior to the issuance of such Letter of Credit of the type described in the
second sentence of Section 2.03(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be issued
the Stated Amount of which, when added to the Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid on the date of, and prior to the
issuance of, the respective Letter of Credit) at such time would exceed either
(x) $150,000,000 or (y) when added to the aggregate principal amount of all
Revolving Loans then outstanding and Swingline Loans then outstanding, an amount
equal to the Total Commitment at such time, (ii) no Letter of Credit denominated
in an Alternate Currency shall be issued the Stated Amount of which, when added
to the Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid on the date of, and prior to the issuance of, the respective Letter of
Credit) at such time in respect of all other outstanding Letters of Credit
denominated in an Alternate Currency, would exceed $25,000,000 unless the
Administrative Agent and the respective Issuing Lender consents in writing prior
to the issuance thereof, (iii) no Acceptance shall be created the Stated Amount
of which, when added to the Stated Amounts of all Acceptances outstanding at
such time, would exceed $15,000,000 and (iv) each Letter of Credit shall by its
terms terminate on or before (A) in the case of standby Letters of Credit, the
earlier of (x) the date which occurs 24 months after the date of the issuance
thereof (although any such Letter of Credit may be extendible for successive
periods of up to 24 months, but not beyond the fifth Business Day prior to the
Maturity Date, on terms acceptable to the Issuing Lender thereof) and (y) the
fifth Business Day prior to the Maturity Date and (B) in the case of trade
Letters of Credit, the earlier of (x) the date which occurs 12 months after the
date of the issuance thereof and (y) the date which is thirty Business Days
prior to the Maturity Date. Additionally, no Issuing Lender will issue or amend
any Letter of Credit whereby the Expiration Date thereof, or of any Acceptance
to be created thereunder, by such Issuing Lender will occur after the Maturity
Date.
2.02 Minimum Stated Amount. The Stated Amount of each Letter of Credit
shall not be less than $10,000 or such lesser amount as is acceptable to the
respective Issuing Lender.
2.03 Letter of Credit Requests. (a) Whenever the Borrowers desire that a
Letter of Credit be issued by DBAG as Issuing Lender, it shall have (i) executed
and delivered the Letter of Credit Service Agreement in the form of Exhibit C-1
attached hereto (as amended, modified or supplemented from time to time, the
"Letter of Credit Service Agreement"), which Letter of Credit Service Agreement
shall be in full force and effect at the time of the issuance of such Letter of
Credit and (ii) made a request for the issuance of such Letter of Credit in
accordance with the terms of the Letter of Credit Service Agreement. Whenever
any Borrower desires that a Letter of Credit be issued by an Issuing Lender
other than DBAG, it shall have (x) executed and delivered to the respective
Issuing Lender (with copies having been sent to the Administrative Agent) at
least five Business Days prior to the issuance thereof (or such shorter period
as may be acceptable to the respective Issuing Lender), a Letter of Credit
Request in the form of Exhibit C-2 attached hereto (each a "Letter of Credit
Request") and (y) in the case of requests for the issuance of trade Letters of
Credit (and, to the extent requested by the respective Issuing Lender, standby
Letters of Credit), completed and executed a letter of credit application in the
form customarily used by such Issuing Lender for trade Letters of Credit or in
such other form as the Administrative Agent and the Issuing Lender shall
request. Letter of Credit Requests shall be given in writing (including, to the
extent consented to by the respective Issuing Lender, by electronic
transmission), or in the case of requests of trade Letters of Credit, by
telephone, if promptly confirmed in writing, or, if DBAG is the Issuing Lender,
as otherwise provided in the Letter of Credit Service Agreement, provided that
(I) if the express provisions of any letter of credit application conflict with
the express provisions of this Agreement, the provisions of this Agreement shall
control to the extent of such conflict and (II) no event (other than the failure
to reimburse any Drawing as provided for in Section 2.05) which constitutes a
default under any application shall constitute an Event of Default hereunder
solely by reason of any default provisions contained in such application.
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrowers that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(c). Unless the respective Issuing Lender has received notice from any
Lender before it issues a Letter of Credit that one or more of the conditions
specified in Section 5 or 6 are not then satisfied, or that the issuance of such
Letter of Credit would violate Section 2.01(c), then such Issuing Lender may
issue the requested Letter of Credit for the joint and several account of the
Borrowers in accordance with such Issuing Lender's usual and customary
practices. Upon its issuance of, or modification or amendment to, any Letter of
Credit, such Issuing Lender shall promptly notify the Borrowers, the
Administrative Agent and each Lender of such issuance, modification or
amendment. Notwithstanding anything to the contrary contained in this Agreement,
in the event that a Lender Default exists, no Issuing Lender shall be required
to issue any Letter of Credit unless such Issuing Lender has entered into
arrangements satisfactory to it and the Borrowers to eliminate such Issuing
Lender's risk with respect to the participation in Letters of Credit by the
Defaulting Lender or Lenders, including by cash collateralizing such Defaulting
Lender's or Lenders' Percentage or Percentages of the Letter of Credit
Outstandings.
2.04 Letter of Credit Participations. (a) Immediately upon the issuance by
any Issuing Lender of any Letter of Credit, such Issuing Lender shall be deemed
to have sold and transferred to each Lender, other than such Issuing Lender
(each such Lender, in its capacity under this Section 2.04, a "Participant"),
and each such Participant shall be deemed irrevocably and unconditionally to
have purchased and received from such Issuing Lender, without recourse or
warranty, an undivided interest and participation, to the extent of such
Participant's Percentage, in such Letter of Credit, each drawing made thereunder
and Acceptances created thereunder and the obligations of the Borrowers under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Commitments or Percentages of the
Lenders pursuant to Section 1.13, 1.14 or 13.04, it is hereby agreed that, with
respect to all outstanding Letters of Credit, Acceptances created thereunder and
Unpaid Drawings with respect thereto, there shall be an automatic adjustment to
the participations pursuant to this Section 2.04 to reflect the new Percentages
of the assignor and assignee Lender or of all Lenders, as the case may be.
(b) In determining whether to pay or create an Acceptance under any Letter
of Credit, such Issuing Lender shall have no obligation relative to the other
Lenders other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Lender under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct, as determined by a court of competent
jurisdiction in a final and non-appealable proceeding, shall not create for such
Issuing Lender any resulting liability to the Borrowers or any Lender.
(c) In the event that any Issuing Lender makes any payment under any Letter
of Credit issued by it or any Acceptance created thereunder and the Borrowers
shall not have reimbursed such amount in full to such Issuing Lender pursuant to
Section 2.05(a), such Issuing Lender shall promptly notify the Administrative
Agent, which shall promptly notify each Participant of such failure, and each
Participant shall promptly and unconditionally pay to such Issuing Lender the
amount of such Participant's Percentage of such unreimbursed payment in Dollars
and in same day funds. If the Administrative Agent so notifies, prior to 11:00
A.M. (New York time) on any Business Day, any Participant required to fund a
payment under a Letter of Credit or an Acceptance created thereunder, such
Participant shall make available to such Issuing Lender in Dollars such
Participant's Percentage of the amount of such payment (using the Dollar
Equivalent thereof in the case of any such payment in respect of a Letter of
Credit denominated in an Alternate Currency, determined on the date of such
payment) on such Business Day in same day funds. If and to the extent such
Participant shall not have so made its Percentage of the amount of such payment
available to such Issuing Lender, such Participant agrees to pay to such Issuing
Lender, forthwith on demand, such amount, together with interest thereon, for
each day from such date until the date such amount is paid to such Issuing
Lender at the overnight Federal Funds Rate for the first three days and at the
interest rate applicable to Revolving Loans maintained as Base Rate for each day
thereafter. The failure of any Participant to make available to such Issuing
Lender its Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
such Issuing Lender its Percentage of any payment with respect to any Letter of
Credit or Acceptance created thereunder on the date required, as specified
above, but no Participant shall be responsible for the failure of any other
Participant to make available to such Issuing Lender such other Participant's
Percentage of any such payment.
(d) Whenever any Issuing Lender receives a payment of a reimbursement
obligation as to which it has received any payments from the Participants
pursuant to clause (c) above, such Issuing Lender shall pay to each Participant
which has paid its Percentage thereof, in Dollars and in same day funds, an
amount equal to such Participant's share (based upon the proportionate aggregate
amount originally funded by such Participant to the aggregate amount funded by
all Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, the relevant Issuing Lender shall
deliver to such Participant copies of any Letter of Credit issued by it and such
other documentation as may be reasonably requested by such Participant.
(f) The obligations of the Participants to make payments to each Issuing
Lender with respect to Letters of Credit and Acceptances issued thereunder shall
be irrevocable and not subject to any qualification or exception whatsoever (the
respective Issuing Lender's only obligation being to confirm that any documents
required to be delivered under such Letter of Credit appeared to have been
delivered and that they appear to substantially comply on their face with the
requirements of such Letter of Credit) and shall be made in accordance with the
terms and conditions of this Agreement under all circumstances, including,
without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrowers or any of their Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), any
holder of an Acceptance, the Administrative Agent, any Participant, or any
other Person, whether in connection with this Agreement, any Letter of
Credit, any Acceptance, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between any
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings and Acceptance Payments.
(a) The Borrowers hereby jointly and severally agree to reimburse the respective
Issuing Lender, by making payment in Dollars (in an amount equal to the Dollar
Equivalent of any payments or disbursements in respect of Letters of Credit
denominated in an Alternate Currency determined on the date of such payment or
disbursement) to the Administrative Agent at the Payment Office in immediately
available funds for the account of such Issuing Lender for any payment or
disbursement made by such Issuing Lender under any Letter of Credit or
Acceptance created thereunder (each such amount (using the Dollar Equivalent of
any payment or disbursement with respect to Letters of Credit or Acceptances
denominated in an Alternate Currency determined on the date of such payment or
disbursement) so paid until reimbursed, an "Unpaid Drawing"), immediately after,
and in any event on the date of such payment or disbursement, with interest on
the amount so paid or disbursed by such Issuing Lender, to the extent not
reimbursed prior to 12:00 Noon (New York time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding the
date such Issuing Lender was reimbursed by the Borrowers therefor at a rate per
annum which shall be the Base Rate in effect from time to time plus the
Applicable Base Rate Margin, provided, however, to the extent such amounts are
not reimbursed prior to 12:00 Noon (New York time) on the second Business Day
following such payment or disbursement, interest shall thereafter accrue on the
amounts so paid or disbursed by such Issuing Lender (and until reimbursed by the
Borrowers) at a rate per annum which shall be the Base Rate in effect from time
to time plus the Applicable Base Rate Margin plus 2%, in each such case, with
interest to be payable by the Borrowers on demand. The respective Issuing Lender
shall give the Borrowers prompt notice of each Drawing under any Letter of
Credit or payment under any Acceptance created thereunder, provided that the
failure to give any such notice shall in no way affect, impair or diminish the
Borrowers' obligations hereunder.
(b) The obligations of the Borrowers under this Section 2.05 to reimburse
the respective Issuing Lender with respect to drawings on Letters of Credit and
payments under any Acceptance created thereunder (each, a "Drawing") (including
interest thereon) shall be joint and several and shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which any Borrower may have or have had
against any Lender (including in its capacity as issuer of the Letter of Credit
or as Participant), or any nonapplication or misapplication by the beneficiary
of the proceeds of such Drawing, the respective Issuing Lender's only obligation
to the Borrowers being to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and that they appear
to substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by any Issuing Lender under or
in connection with any Letter of Credit or any Acceptance created thereunder if
taken or omitted in the absence of gross negligence or willful misconduct, shall
not create for such Issuing Lender any resulting liability to the Borrowers.
2.06 Increased Costs. If at any time after the date of this Agreement, the
introduction of or any change in any applicable law, rule, regulation, order,
guideline or request or in the interpretation or administration thereof by any
governmental authority charged with the interpretation or administration
thereof, or compliance by any Issuing Lender or any Participant with any request
or directive by any such authority (whether or not having the force of law), or
any change in generally acceptable accounting principles, shall either (i)
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against Letters of Credit issued, or Acceptances created, by
any Issuing Lender or participated in by any Participant, or (ii) impose on any
Issuing Lender or any Participant any other conditions relating, directly or
indirectly, to this Agreement, any Letter of Credit or any Acceptance created
thereunder; and the result of any of the foregoing is to increase the cost to
any Issuing Lender or any Participant of issuing, maintaining or participating
in any Letter of Credit or any Acceptance created thereunder, or reduce the
amount of any sum received or receivable by any Issuing Lender or any
Participant hereunder or reduce the rate of return on its capital with respect
to Letters of Credit or Acceptances created thereunder (except for changes in
the rate of tax on, or determined by reference to, the net income or net profits
of such Issuing Lender or such Participant, or any franchise tax based on the
net income or net profits of such Lender or Participant, in either case pursuant
to the laws of the United States of America, the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), but without duplication of any
amounts payable in respect of Taxes pursuant to Section 4.04(a), then, upon
demand to the Borrowers by such Issuing Lender or any Participant (a copy of
which demand shall be sent by such Issuing Lender or such Participant to the
Administrative Agent) and subject to the provisions of Section 13.15 (to the
extent applicable), the Borrowers jointly and severally agree to pay to such
Issuing Lender or such Participant such additional amount or amounts as will
compensate such Lender for such increased cost or reduction in the amount
receivable or reduction on the rate of return on its capital. Any Issuing Lender
or any Participant, upon determining that any additional amounts will be payable
pursuant to this Section 2.06, will give prompt written notice thereof to the
Borrowers, which notice shall include a certificate submitted to the Borrowers
by such Issuing Lender or such Participant (a copy of which certificate shall be
sent by such Issuing Lender or such Participant to the Administrative Agent),
setting forth in reasonable detail the basis for the calculation of such
additional amount or amounts necessary to compensate such Issuing Lender or such
Participant. The certificate required to be delivered pursuant to this Section
2.06 shall, if delivered in good faith and absent manifest error, be final and
conclusive and binding on the Borrowers.
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrowers jointly and severally agree to pay to the
Administrative Agent for distribution to each Non-Defaulting Lender a commitment
commission (the "Commitment Commission") for the period from the Effective Date
to but excluding the Maturity Date (or such earlier date as the Total Commitment
shall have been terminated), computed at a rate per annum equal to the
Applicable Commitment Commission Percentage on the Unutilized Commitment of such
Non-Defaulting Lender as in effect from time to time. Accrued Commitment
Commission shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the Maturity Date or such earlier date upon which the Total
Commitment is terminated.
(b) The Borrowers jointly and severally agree to pay to the Administrative
Agent for pro rata distribution to each Non-Defaulting Lender a fee in respect
of (x) each Letter of Credit issued hereunder (the "Letter of Credit Fee"), for
the period from and including the date of issuance of such Letter of Credit (or,
in the case of the Existing Letters of Credit, from the Effective Date) to the
Expiration Date of such Letter of Credit, computed at a rate per annum equal to
the Applicable Eurodollar Margin as in effect from time to time on the Stated
Amount of such Letter of Credit as in effect from time to time and (y) each
Acceptance (the "Acceptance Fee") for the period from and including the date of
creation of such Acceptance to and including the Expiration Date of such
Acceptance, computed at a rate per annum equal to the Applicable Eurodollar
Margin as in effect from time to time on the daily Stated Amount of such
Acceptance. Accrued Letter of Credit Fees and Acceptance Fees shall be due and
payable quarterly in arrears on each Quarterly Payment Date and upon the first
day on or after the termination of the Total Commitment upon which no Letters of
Credit or Acceptances remain outstanding.
(c) The Borrowers jointly and severally agree to pay to the respective
Issuing Lender, for its own account, a facing fee in respect of (x) each standby
Letter of Credit issued for its account hereunder (the "Letter of Credit Facing
Fee") for the period from and including the date of issuance of such standby
Letter of Credit to and including the Expiration Date of such standby Letter of
Credit, computed at a rate equal to 1/8 of 1% per annum of the daily Stated
Amount of such standby Letter of Credit and (y) each Acceptance created by it
(the "Acceptance Facing Fee," and together with the Letter of Credit Facing
Fees, the "Facing Fees") for the period from and including the date of creation
of such Acceptance to and including the Expiration Date of such Acceptance,
computed at a rate equal to 1/8 of 1% per annum of the daily Stated Amount of
such Acceptance. Accrued Facing Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the date upon which the Total
Commitment has been terminated and all standby Letters of Credit and Acceptances
have been terminated in accordance with their terms.
(d) The Borrowers jointly and severally agree to pay, upon each drawing
under, issuance of, or amendment to any Letter of Credit or Acceptance, such
amount as shall at the time of such event be the administrative charge and
out-of-pocket expenses which the respective Issuing Lender is generally imposing
in connection with such occurrence with respect to letters of credit or
acceptances, as the case may be.
(e) The Borrowers jointly and severally agree to pay to the Agents, for
their own account, such other fees as have been agreed to in writing by the
Borrowers and the Agents.
(f) Furniture Brands agrees to pay to the Administrative Agent for
distribution to each Additional Lender such fees and other amounts, if any, as
are specified in the relevant Additional Commitment Agreement, with the fees and
other amounts, if any, to be payable at the times set forth in such Additional
Commitment Agreement.
3.02 Voluntary Termination of Unutilized Commitments. (a) Upon at least two
Business Days' prior notice from an Authorized Representative of the Borrowers
to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), the
Borrowers shall have the right, at any time or from time to time, without
premium or penalty, to terminate the Total Unutilized Commitment, in whole or in
part, in integral multiples of $1,000,000, provided that (i) each such reduction
shall apply proportionately to permanently reduce the Commitment of each Lender,
and (ii) the reduction to the Total Unutilized Commitment shall in no case be in
an amount which would cause the Commitment of any Lender to be reduced (as
required by preceding clause (i)) by an amount which exceeds the remainder of
(x) the Unutilized Commitment of such Lender as in effect immediately before
giving effect to such reduction minus (y) such Lender's Percentage of the
aggregate principal amount of Swingline Loans then outstanding.
(b) In the event of certain refusals by a Lender as provided in Section
13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Lenders, the Borrowers may, subject to their compliance with the
requirements of said Section 13.12(b), upon five Business Days' written notice
to the Administrative Agent at the Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders) terminate
the Commitment of such Lender so long as all Loans, together with accrued and
unpaid interest, Fees and all other amounts, owing to such Lender are repaid
concurrently with the effectiveness of such termination (at which time Schedule
I shall be deemed modified to reflect such changed amounts), and at such time,
such Lender shall no longer constitute a "Lender" for purposes of this
Agreement, except with respect to indemnifications under this Agreement
(including, without limitation, Sections 1.10, 1.11, 2.06, 4.04, 13.01 and
13.06), which shall survive as to such repaid Lender.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and the
Commitment of each Lender) shall terminate in its entirety on June 30, 2000
unless the Effective Date shall have occurred on or prior to such date.
(b) In addition to any other mandatory commitment reductions pursuant to
this Section 3.03, the Total Commitment (and the Commitment of each Lender)
shall terminate in its entirety on the earlier of (i) the date on which a Change
of Control occurs and (ii) the Maturity Date.
(c) Each reduction to the Total Commitment pursuant to this Section 3.03
shall be applied proportionately to reduce the Commitment of each Lender.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrowers shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) an Authorized
Representative of the Borrowers shall give the Administrative Agent prior to
12:00 Noon (New York time) at the Notice Office (x) at least one Business Day's
prior written notice (or telephonic notice promptly confirmed in writing) of the
Borrowers' intent to prepay Base Rate Loans (or same day notice in the case of
Swingline Loans provided such notice is given prior to 11:00 A.M. (New York
time)) and (y) at least three Business Days' prior written notice (or telephonic
notice promptly confirmed in writing) of their intent to prepay Eurodollar
Loans, whether Revolving Loans or Swingline Loans shall be prepaid, the amount
of such prepayment and the Types of Loans to be prepaid and, in the case of
Eurodollar Loans, the specific Borrowing or Borrowings pursuant to which made,
which notice the Administrative Agent shall promptly transmit to each of the
Lenders; (ii) each prepayment shall be in an aggregate principal amount of at
least $1,000,000 (or $500,000 in the case of Swingline Loans), provided that if
any partial prepayment of Eurodollar Loans made pursuant to any Borrowing shall
reduce the outstanding Eurodollar Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto, then such
Borrowing may not be continued as a Borrowing of Eurodollar Loans and any
election of an Interest Period with respect thereto given by the Borrowers shall
have no force or effect; and (iii) each prepayment in respect of any Revolving
Loans made pursuant to a Borrowing shall be applied pro rata among such
Revolving Loans, provided that at the Borrowers' election in connection with any
prepayment of Revolving Loans pursuant to this Section 4.01(a), such prepayment
shall not, so long as no Default or Event of Default then exists, be applied to
the prepayment of Revolving Loans of a Defaulting Lender.
(b) In the event of certain refusals by a Lender as provided in Section
13.12(b) to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved by the
Required Lenders, the Borrowers may, upon five Business Days' written notice by
an Authorized Representative of the Borrowers to the Administrative Agent at the
Notice Office (which notice the Administrative Agent shall promptly transmit to
each of the Lenders) repay all Revolving Loans, together with accrued and unpaid
interest, Fees, and other amounts owing to such Lender in accordance with, and
subject to the requirements of, said Section 13.12(b) so long as (A) the
Commitment of such Lender is terminated concurrently with such repayment (at
which time Schedule I shall be deemed modified to reflect the changed
Commitments) and (B) the consents required by Section 13.12(b) in connection
with the repayment pursuant to this clause (b) have been obtained.
4.02 Mandatory Repayments and Cash Collateralizations. (a) On any day on
which the sum of (I) the aggregate outstanding principal amount of all Revolving
Loans (after giving effect to all other repayments thereof on such date), (II)
the aggregate principal amount of all Swingline Loans (after giving effect to
all other repayments thereof on such date) and (III) the aggregate amount of all
Letter of Credit Outstandings (after giving effect to all other repayments
thereof on such date) exceeds Total Commitment as then in effect, the Borrowers
jointly and severally agree to prepay on such day the principal of Swingline
Loans and, after the Swingline Loans have been repaid in full, Revolving Loans
in an amount equal to such excess. If, after giving effect to the prepayment of
all outstanding Swingline Loans and Revolving Loans, the aggregate amount of the
Letter of Credit Outstandings exceeds the Total Commitment as then in effect,
the Borrowers jointly and severally agree to pay to the Administrative Agent at
the Payment Office on such date an amount of cash and/or Cash Equivalents equal
to the amount of such excess (up to a maximum amount equal to the Letter of
Credit Outstandings at such time), such cash and/or Cash Equivalents to be held
as security for all obligations of the Borrowers to Lenders hereunder in a cash
collateral account to be established by the Administrative Agent on terms
reasonably satisfactory to the Administrative Agent.
(b) With respect to each repayment of Revolving Loans required by Section
4.02(a), the Borrowers may designate the Types of Revolving Loans which are to
be repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, provided that: (i) repayments of Eurodollar
Loans pursuant to Section 4.02(a) may only be made on the last day of an
Interest Period applicable thereto unless all Eurodollar Loans with Interest
Periods ending on such date of required repayment and all Base Rate Loans have
been paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, then such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of Base Rate Loans; and (iii) each repayment of
Revolving Loans required by Section 4.02(a) shall be applied pro rata among such
Revolving Loans. In the absence of a designation by the Borrowers as described
in the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion with a view, but no obligation, to
minimize breakage costs owing under Section 1.11.
(c) In addition to any other mandatory repayments required pursuant to this
Section 4.02, (i) all then outstanding Revolving Loans shall be repaid in full
on the Maturity Date and (ii) all then outstanding Swingline Loans shall be
repaid in full on the Swingline Expiry Date.
(d) In addition to any other mandatory repayments required pursuant to this
Section 4.02, all Loans shall be required to be repaid in full on the date on
which a Change of Control occurs.
4.03 Method and Place of Payment. Except as otherwise specifically provided
herein, all payments under this Agreement or any Note shall be made to the
Administrative Agent for the account of the Lender or Lenders entitled thereto
not later than 12:00 Noon (New York time) on the date when due and shall be made
in Dollars in immediately available funds at the Payment Office. Any payments
received by the Administrative Agent after such time shall be deemed to have
been received on the next Business Day. Whenever any payment to be made
hereunder or under any Note shall be stated to be due on a day which is not a
Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrowers hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income or net profits of a Lender pursuant to the laws
of the jurisdiction in which it is organized or the jurisdiction in which the
principal office or applicable lending office of such Lender is located or any
subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imports,
duties, fees, assessments or other charges being referred to collectively as
"Taxes"). If any Taxes are so levied or imposed, the Borrowers jointly and
severally agree to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Note, after withholding or deduction for or on account of
any Taxes, will not be less than the amount provided for herein or in such Note.
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrowers agree to reimburse each Lender, upon the written request
of such Lender, for taxes imposed on or measured by the net income or net
profits of such Lender pursuant to the laws of the jurisdiction in which such
Lender is organized or in which the principal office or applicable lending
office of such Lender is located or under the laws of any political subdivision
or taxing authority of any such jurisdiction in which such Lender is organized
or in which the principal office or applicable lending office of such Lender is
located and for any withholding or similar taxes as such Lender shall determine
are payable by, or withheld from, such Lender in respect of such amounts so paid
to or on behalf of such Lender pursuant to the preceding sentence and in respect
of any amounts paid to or on behalf of such Lender pursuant to this sentence.
The Borrowers will furnish to the Administrative Agent within 45 days after the
date the payment of any Taxes is due pursuant to applicable law certified copies
of tax receipts evidencing such payment by the Borrowers. The Borrowers jointly
and severally agree to indemnify and hold harmless each Lender, and reimburse
such Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term is defined
in Section 7701(a)(30) of the Code) agrees to deliver to the Borrowers and the
Administrative Agent on or prior to the Effective Date, or in the case of a
Lender that is an assignee or transferee of an interest under this Agreement
pursuant to Section 1.13 or 13.04 (unless the respective Lender was already a
Lender hereunder immediately prior to such assignment or transfer), on the date
of such assignment or transfer to such Lender, (i) two accurate and complete
original signed copies of Internal Revenue Service Form W-8ECI or Form W-8BEN
(with respect to a complete exemption under an income tax treaty) (or successor
forms) certifying to such Lender's entitlement to a complete exemption from
United States withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Lender is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form W-8ECI or Form W-8BEN (with respect to a complete exemption
under an income tax treaty) pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8BEN (with respect to the portfolio
interest exemption) (or successor form) certifying to such Lender's entitlement
to a complete exemption from United States withholding tax with respect to
payments of interest to be made under this Agreement and under any Note. In
addition, each Lender agrees that from time to time after the Effective Date,
when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrowers and the Administrative Agent two new accurate and complete
original signed copies of Internal Revenue Service Form W-8ECI, Form W-8BEN
(with respect to the benefits of any income tax treaty), or Form W-8BEN (with
respect to the portfolio interest exemption) and a Section 4.04(b)(ii)
Certificate, as the case may be, and such other forms as may be required in
order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Borrowers and the Administrative Agent of its inability to deliver any such Form
or Certificate, in which case such Lender shall not be required to deliver any
such Form or Certificate pursuant to this Section 4.04(b). Notwithstanding
anything to the contrary contained in Section 4.04(a), but subject to Section
13.04(b) and the immediately succeeding sentence, (x) the Borrowers shall be
entitled, to the extent they are required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Lender which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Lender has not provided
to the Borrowers U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrowers shall not be
obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to
a Lender in respect of income or similar taxes imposed by the United States if
(I) such Lender has not provided to the Borrowers the Internal Revenue Service
Forms required to be provided to the Borrowers pursuant to this Section 4.04(b)
or (II) in the case of a payment, other than interest, to a Lender described in
clause (ii) above, to the extent that such forms do not establish a complete
exemption from withholding of such taxes. Notwithstanding anything to the
contrary contained in the preceding sentence or elsewhere in this Section 4.04
and except as set forth in Section 13.04(b), the Borrowers agree to pay
additional amounts and to indemnify each Lender in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
that are effective after the Effective Date in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof, relating to the deducting or withholding of income or similar Taxes.
(c) The provisions of this Section 4.04 are subject to the provisions of
Section 13.15 (to the extent applicable).
SECTION 5. Conditions Precedent to the Effective Date. The occurrence of
the Effective Date pursuant to Section 13.10 is subject to the satisfaction of
the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Effective Date (i)
this Agreement shall have been executed and delivered as provided in Section
13.10 and (ii) there shall have been delivered to the Administrative Agent for
the account of each of the Lenders that has requested same the appropriate
Revolving Note executed by the Borrowers and to the Swingline Lender, to the
extent the Swingline Lender has requested same, the Swingline Note executed by
the Borrowers, in each case, in the amount, maturity and as otherwise provided
herein.
5.02 Officer's Certificate. On the Effective Date, the Administrative Agent
shall have received a certificate, dated the Effective Date, and signed on
behalf of the Borrowers by an Authorized Representative, stating that all
conditions in Sections 5.05, 5.07, 5.08 and 6.02 have been satisfied on such
date.
5.03 Opinions of Counsel. On the Effective Date, the Administrative Agent
shall have received from the General Counsel to the Credit Parties, an opinion
addressed to the Agents and each of the Lenders and dated the Effective Date
covering the matters set forth in Exhibit E and such other matters incident to
the transactions contemplated herein as the Administrative Agent may reasonably
request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Effective Date, the
Administrative Agent shall have received a certificate, dated the Effective
Date, signed by an Authorized Representative of each Credit Party, and attested
to by another Authorized Representative of such Credit Party, in the form of
Exhibit F with appropriate insertions, together with copies of the certificate
of incorporation and by-laws (or equivalent organizational documents) of such
Credit Party, and the resolutions of such Credit Party referred to in such
certificate, and the foregoing shall be in form and substance reasonably
acceptable to the Agents.
(b) All corporate, partnership, limited liability company and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Credit Documents shall
be reasonably satisfactory in form and substance to the Agents and the Agents
shall have received all information and copies of all documents and papers,
including records of corporate, partnership and limited liability company
proceedings, governmental approvals, good standing certificates and bring-down
telegrams, if any, which the Agents reasonably may have requested in connection
therewith, such documents and papers where appropriate to be certified by proper
corporate or governmental authorities.
5.05 Existing Credit Agreement. On the Effective Date, the total
commitments in respect of the Existing Credit Agreement shall have been
terminated, and all loans and notes (together with interest thereon) with
respect thereto shall have been repaid in full, all letters of credit (or
acceptances created thereunder) issued thereunder shall have been terminated (or
either (i) incorporated herein as a Letter of Credit or an Acceptance or (ii)
fully supported with Letters of Credit issued hereunder) and all other amounts
(including premiums) owing pursuant to the Existing Credit Agreement shall have
been repaid in full and all documents in respect of the Existing Credit
Agreement and all guarantees with respect thereto shall have been terminated
(except as to indemnification and similar provisions, which may survive to the
extent provided therein) and be of no further force and effect. In addition, the
creditors in respect of the Existing Credit Agreement shall have terminated and
released (or shall have delivered documentation reasonably satisfactory to the
Administrative Agent providing for the termination and release of) all security
interests in and Liens on the assets of the Borrowers and their respective
Subsidiaries created pursuant to any security documentation relating to the
Existing Credit Agreement, and such creditors shall have returned all such
assets to the Borrowers or such respective Subsidiary. The Administrative Agent
shall have received evidence that the matters set forth in this Section 5.05
have been satisfied on such date.
5.06 Subsidiaries Guaranty. On or prior to the Effective Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered the
Subsidiaries Guaranty in the form of Exhibit G hereto (as modified, supplemented
or amended from time to time, the "Subsidiaries Guaranty") and the Subsidiaries
Guaranty shall be in full force and effect.
5.07 Adverse Change; Governmental Approvals; etc. (a) On the Effective
Date, nothing shall have occurred (and neither the Agents nor the Lenders shall
have become aware of any facts, conditions or other information not previously
known) which any Agent or the Required Lenders reasonably determine could
reasonably be expected to have a material adverse effect on the rights or
remedies of any Agent or the Lenders, or on the ability of the Credit Parties to
perform their respective obligations to the Agents and the Lenders or which the
Agents reasonably determine has had, or could reasonably be expected to have, a
Material Adverse Effect.
(b) On or prior to the Effective Date, all necessary governmental (domestic
and foreign) and material third party approvals in connection with the
transactions contemplated by the Credit Documents shall have been obtained and
remain in effect, and all applicable waiting periods shall have expired without
any action being taken by any competent authority which restrains, prevents or
imposes materially adverse conditions upon the consummation of the transactions
contemplated by the Credit Documents. Additionally, there shall not exist any
judgment, order, injunction or other restraint issued or filed or a hearing
seeking injunctive relief or other restraint pending or notified prohibiting or
imposing materially adverse conditions upon the making of any Loan, issuance of
any Letter of Credit or the consummation of the transactions contemplated by the
Credit Documents.
5.08 Litigation. On the Effective Date, no litigation by any entity
(private or governmental) shall be pending or threatened with respect to this
Agreement, any other Credit Document or any other documentation executed in
connection herewith and therewith or the transactions contemplated hereby and
thereby, or which any Agent or the Required Lenders shall reasonably determine
has had, or could reasonably be expected to have, a Material Adverse Effect.
5.09 Financial Statements; Projections. On or prior to the Effective Date,
the Administrative Agent shall have received true and correct copies of the
historical financial statements referred to in Section 7.05(a), which historical
financial statements shall be in form and substance satisfactory to the Agents
and the Required Lenders.
5.10 Fees, etc. On the Effective Date, all costs, fees and expenses
(including, without limitation, legal fees and expenses) payable to the Agents
and the Lenders shall have been paid to the extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The obligation of
each Lender to make Loans (including Loans made on the Effective Date but
excluding Mandatory Borrowings made thereafter, which shall be made as provided
in Section 1.01(c)), and the obligation of an Issuing Lender to issue any Letter
of Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
6.01 Effective Date. The Effective Date shall have occurred.
6.02 No Default; Representations and Warranties. At the time of each such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein or in any other Credit Document shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event (it
being understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and correct in
all material respects only as of such specified date).
6.03 Notice of Borrowing; Letter of Credit Request. (a) Prior to the making
of each Revolving Loan (excluding Swingline Loans), the Administrative Agent
shall have received the notice required by Section 1.03(a). Prior to the making
of each Swingline Loan, the Swingline Lender shall have received the notice
required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and the respective Issuing Lender shall have received a Letter of Credit
Request meeting the requirements of Section 2.03.
The acceptance of the benefit of each Credit Event shall constitute a
representation and warranty by the Borrowers to the Agents and each of the
Lenders that all the conditions specified in Section 5 and in this Section 6
(with respect to Credit Events to occur on or after the Effective Date) and
applicable to such Credit Event exist as of that time (except to the extent that
any of the conditions specified in Section 5 are required to be satisfactory to
or determined by any Lender, the Required Lenders and/or any Agent). All of the
Notes, certificates, legal opinions and other documents and papers referred to
in Section 5 and in this Section 6, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the account of
each of the Lenders and, except for the Notes, in sufficient counterparts or
copies for each of the Lenders and shall be in form and substance reasonably
satisfactory to the Lenders.
SECTION 7. Representations, Warranties and Agreements. In order to induce
the Lenders to enter into this Agreement and to make the Loans, and issue (or
participate in) the Letters of Credit as provided herein, each of the Borrowers
makes the following representations, warranties and agreements, in each case
after giving effect to the occurrence of the Effective Date, all of which shall
survive the execution and delivery of this Agreement and the Notes and the
making of the Loans and issuance of the Letters of Credit, with the occurrence
of each Credit Event on or after the Effective Date being deemed to constitute a
representation and warranty that the matters specified in this Section 7 are
true and correct in all material respects on and as of the Effective Date and on
the date of each such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
7.01 Corporate Status. Each of Furniture Brands and each of its
Subsidiaries (i) is a duly organized and validly existing corporation, limited
liability company or partnership, as the case may be, in good standing under the
laws of the jurisdiction of its organization, (ii) has the corporate, limited
liability company or partnership power and authority, as the case may be, to own
its property and assets and to transact the business in which it is engaged and
presently proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the conduct of its
business requires such qualifications, except for failures to be so qualified
which, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
7.02 Corporate Power and Authority. Each Credit Party has the corporate,
limited liability company or partnership power and authority, as the case may
be, to execute, deliver and perform the terms and provisions of each of the
Credit Documents to which it is party and has taken all necessary corporate,
limited liability company or partnership action, as the case may be, to
authorize the execution, delivery and performance by it of each of such Credit
Documents. Each Credit Party has duly executed and delivered each of the Credit
Documents to which it is party, and each of such Credit Documents constitutes
the legal, valid and binding obligation of such Credit Party enforceable in
accordance with its terms, except to the extent that the enforceability thereof
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by any
Credit Party of the Credit Documents to which it is a party, nor compliance by
it with the terms and provisions thereof, (i) will contravene any provision of
any applicable law, statute, rule or regulation or any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict with or result in any breach of any of the terms, covenants, conditions
or provisions of, or constitute a default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
material properties or assets of Furniture Brands or any of its Subsidiaries
pursuant to the terms of any indenture, mortgage, deed of trust, credit
agreement or loan agreement, or any other material agreement, contract or
instrument, to which Furniture Brands or any of its Subsidiaries is a party or
by which it or any of its property or assets is bound or to which it may be
subject or (iii) will violate any provision of the Certificate of Incorporation
or By-Laws (or equivalent organizational documents) of Furniture Brands or any
of its Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Credit Document or (ii) the legality,
validity, binding effect or enforceability of any such Credit Document.
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc. (a) The consolidated and consolidating statements of financial
condition of Furniture Brands and its Subsidiaries for the Fiscal Years ended
December 31, 1997, 1998 and 1999 and the related consolidated and consolidating
statements of income and consolidated statements of cash flow and changes in
shareholders' equity of Furniture Brands and its Subsidiaries for the Fiscal
Years ended on such dates, and furnished to the Lenders prior to the Effective
Date in each case, present fairly the financial condition of Furniture Brands
and its Subsidiaries at the date of such balance sheets and the results of the
operations of Furniture Brands and its Subsidiaries for the Fiscal Years covered
thereby. All of the foregoing financial statements have been prepared in
accordance with generally accepted accounting principles and practices
consistently applied.
(b) Since December 31, 1999 there has been no Material Adverse Effect.
(c) Except as fully disclosed in the financial statements referred to in
Section 7.05(a), there were as of the Effective Date no liabilities or
obligations with respect to Furniture Brands or any of its Subsidiaries of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, could reasonably
be expected to have a Material Adverse Effect.
7.06 Litigation. There are no actions, suits or proceedings pending or, to
the best knowledge of the Borrowers, threatened (i) with respect to any Credit
Document, (ii) that could reasonably be expected to have a material adverse
effect on the rights or remedies of the Agents or the Lenders or on the ability
of any Credit Party to perform its obligations to them hereunder and under the
other Credit Documents to which it is a party or (iii) that could reasonably be
expected to have a Material Adverse Effect.
7.07 True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of Furniture Brands or any of its Subsidiaries
in writing to any Agent or any Lender (including, without limitation, all
factual information contained in the Credit Documents) for purposes of or in
connection with this Agreement, the other Credit Documents or any transaction
contemplated herein or therein is, and all other such factual information (taken
as a whole) hereafter furnished by or on behalf of Furniture Brands or any of
its Subsidiaries in writing to any Agent or any Lender will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (taken as a whole) not misleading in any material respect
at such time in light of the circumstances under which such information was
provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Loans
shall be used (i) to repay all outstanding Indebtedness under the Existing
Credit Agreement, (ii) to pay fees and expenses incurred in connection with this
Agreement and (iii) for the Borrowers' and their Subsidiaries' ongoing general
corporate purposes, including acquisitions of third Persons (or assets of such
Persons).
(b) Neither the making of any Loan nor the use of the proceeds thereof nor
the occurrence of any other Credit Event will violate or be inconsistent with
the provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System. At the time of each Credit Event and after giving effect thereto
(including after giving effect to the application of proceeds therefrom), no
more than 25% of the value of the assets of the Borrowers, or of the Borrowers
and their Subsidiaries taken as a whole, will constitute Margin Stock.
7.09 Tax Returns and Payments. Each of Furniture Brands and each of its
Subsidiaries has timely filed or caused to be timely filed, on the due dates
thereof or within applicable grace periods (inclusive of any permitted
extensions), with the appropriate taxing authority, all Federal, state and other
material returns, statements, forms and reports for taxes (the "Returns")
required to be filed by or with respect to the income, properties or operations
of Furniture Brands and its Subsidiaries. Each of Furniture Brands and each of
its Subsidiaries has paid all material taxes payable by them other than taxes
which are not delinquent, and other than those contested in good faith and for
which adequate reserves have been established in accordance with generally
accepted accounting principles. Except as disclosed in the financial statements
referred to in Section 7.05(a) and except as disclosed on Schedule IV, there is,
as of the Effective Date, no material action, suit, proceeding, investigation,
audit, or claim now pending or, to the best knowledge of the Borrowers,
threatened by any authority regarding any taxes relating to Furniture Brands or
its Subsidiaries.
7.10 Compliance with ERISA. (a) Each Plan is in substantial compliance with
ERISA and the Code; no Reportable Event has occurred with respect to a Plan; to
the best knowledge of the Borrowers, no Multiemployer Plan is insolvent or in
reorganization; no Plan has an Unfunded Current Liability; no Plan has an
accumulated or waived funding deficiency, or has applied for an extension of any
amortization period within the meaning of Section 412 of the Code; none of the
Borrowers or any of their respective Subsidiaries nor any ERISA Affiliate has
incurred any liability to or on account of a Plan and/or a Multiemployer Plan
pursuant to Section 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Plan; no condition exists which presents a risk to the Borrowers or any of
their respective Subsidiaries or any ERISA Affiliate of incurring a liability to
or on account of a Plan and/or a Multiemployer Plan pursuant to the foregoing
provisions of ERISA and the Code; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of the Borrowers, their Subsidiaries and their ERISA Affiliates to
all Multiemployer Plans in the event of a complete withdrawal therefrom, as of
the close of the most recent fiscal year of each such Multiemployer Plan ended
prior to the date of the most recent Credit Event, could not reasonably be
expected to have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial compliance
with its terms and with the requirements of any and all applicable laws,
statutes, rules, regulations and orders and has been maintained, where required,
in good standing with applicable regulatory authorities. None of the Borrowers
nor any of their respective Subsidiaries has incurred any obligation in
connection with the termination of or withdrawal from any Foreign Pension Plan.
The present value of the accrued benefit liabilities (whether or not vested)
under each Foreign Pension Plan, determined as of the end of each Borrower's
most recently ended fiscal year on the basis of actuarial assumptions, each of
which is reasonable, did not exceed the current value of the assets of such
Foreign Pension Plan allocable to such benefit liabilities.
(c) Notwithstanding anything to the contrary in this Section 7.10, the
representations made in this Section 7.10 shall only be untrue if the aggregate
effect of all failures and noncompliances of the types described above could
reasonably be expected to have a Material Adverse Effect.
7.11 Properties. Each of Furniture Brands and each of its Subsidiaries has
good and valid title to all material properties owned by them, including all
property reflected in the balance sheets referred to in Sections 7.05(a) (except
as sold or otherwise disposed of since the date of such balance sheet in the
ordinary course of business or otherwise as permitted hereunder), free and clear
of all Liens other than Permitted Liens.
7.12 Subsidiaries. As of the Effective Date, Furniture Brands has no
Subsidiaries other than those Subsidiaries listed on Schedule V. Schedule V
correctly sets forth, as of the Effective Date, the percentage ownership (direct
and indirect) of Furniture Brands in each class of corporate stock or other
equity of each of its Subsidiaries and also identifies the direct owner thereof.
7.13 Compliance with Statutes, etc. Each of Furniture Brands and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of their business and the
ownership of their property, except such noncompliances as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
7.14 Investment Company Act. None of Furniture Brands nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.15 Public Utility Holding Company Act. None of Furniture Brands nor any
of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
7.16 Environmental Matters. Except to the extent that any matter described
below in this Section 7.16, either individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, Furniture Brands and
each of its Subsidiaries is in compliance with all applicable Environmental Laws
and the requirements of any permits issued under such Environmental Laws, and
there are no pending or, to the knowledge of the Borrowers, threatened
Environmental Claims against Furniture Brands or any of its Subsidiaries or any
Real Property presently or formerly owned, leased or operated by Furniture
Brands or any of its Subsidiaries.
7.17 Labor Relations. None of Furniture Brands nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a Material Adverse Effect. There is (i) no unfair labor practice complaint
pending against Furniture Brands or any of its Subsidiaries or, to the best
knowledge of the Borrowers, threatened against any of them, before the National
Labor Relations Board, and no material grievance or material arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against Furniture Brands or any of its Subsidiaries or, to the best
knowledge of the Borrowers, threatened against any of them, (ii) no strike,
labor dispute, slowdown or stoppage pending against Furniture Brands or any of
its Subsidiaries or, to the best knowledge of the Borrowers, threatened against
Furniture Brands or any of its Subsidiaries and (iii) to the best knowledge of
the Borrowers, no union representation proceeding pending with respect to the
employees of Furniture Brands or any of its Subsidiaries, except (with respect
to any matter specified in clause (i), (ii) or (iii) above, either individually
or in the aggregate) such as could not reasonably be expected to have a Material
Adverse Effect.
7.18 Patents, Licenses, Franchises and Formulas. Furniture Brands and its
Subsidiaries own all material patents, trademarks, permits, service marks, trade
names, copyrights, licenses, franchises and formulas, or rights with respect to
the foregoing, and have obtained assignments of all leases and other rights of
whatever nature, reasonably necessary for the present conduct of their business,
without any known conflict with the rights of others which, or the failure to
obtain which, as the case may be, could reasonably be expected to result in a
Material Adverse Effect.
7.19 Indebtedness. Schedule VII sets forth a true and complete list of all
Indebtedness of Furniture Brands and its Subsidiaries as of the Effective Date
(excluding the Loans, the Letters of Credit and Acceptances, the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any Credit Party or any of its
Subsidiaries which directly or indirectly guarantees such Indebtedness.
7.20 Tax Sharing Agreement. Neither Furniture Brands nor any of its
Subsidiaries has any liabilities or obligations arising pursuant to the Tax
Sharing Agreement which, either individually or in aggregate, could reasonably
be expected to have a Material Adverse Effect.
SECTION 8. Affirmative Covenants. Each of the Borrowers hereby covenants
and agrees that on and after the Effective Date and until the Total Commitment
and all Letters of Credit and Acceptances have terminated and the Loans, Notes
and Unpaid Drawings (in each case together with interest thereon), Fees and all
other Obligations incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. The Borrowers will furnish to the
Administrative Agent, and the Administrative Agent will promptly forward to each
Lender:
(a) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the close of each of the first three quarterly
accounting periods in each Fiscal Year, (i) the consolidated balance sheets
of Furniture Brands and its Subsidiaries, in each case, as at the end of
such quarterly period and the related consolidated statements of income and
cash flow for such quarterly period and for the elapsed portion of the
Fiscal Year ended with the last day of such quarterly period and (ii)
management's discussion and analysis of the important operational and
financial developments during such quarterly period.
(b) Annual Financial Statements. Within 95 days after the close of
each Fiscal Year, (i) the consolidated and consolidating balance sheets of
Furniture Brands and its Subsidiaries, in each case, as at the end of such
Fiscal Year and the related consolidated and consolidating statements of
income and consolidated statements of shareholders' equity and cash flow
for such Fiscal Year setting forth comparative figures for the preceding
Fiscal Year and certified by KPMG LLP or such other independent certified
public accountants of recognized national standing reasonably acceptable to
the Administrative Agent, together with a report of such accounting firm
stating that in the course of its regular audit of the financial statements
of Furniture Brands and its Subsidiaries, which audit was conducted in
accordance with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or Event of Default which has occurred
and is continuing or, if in the opinion of such accounting firm such a
Default or Event of Default with respect to the covenants set forth in
Sections 9.01 through 9.11, inclusive, has occurred and is continuing, a
statement as to the nature thereof and (ii) management's discussion and
analysis of the important operational and financial developments during
such Fiscal Year.
(c) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 8.01(a) and (b), a certificate
of an Authorized Representative of Furniture Brands to the effect that, to
the best of such Authorized Representative's knowledge, no Default or Event
of Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and extent
thereof, which certificate shall set forth the calculations required to
establish whether the Borrowers were in compliance with the provisions of
Sections 9.01, 9.02, 9.03, 9.05, 9.06 and 9.07 at the end of such fiscal
quarter or year, as the case may be.
(d) Notice of Default or Litigation. Promptly, and in any event within
three Business Days after an executive officer of any Borrower obtains
knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or Event of Default, (ii) any litigation or
governmental investigation or proceeding pending against Furniture Brands
or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or a material adverse effect on the ability of any
Credit Party to perform its obligations hereunder or under any other Credit
Document or (iii) any other development that has had, or could reasonably
be expected to have, a Material Adverse Effect.
(e) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and other information and reports, if any,
which Furniture Brands or any of its Subsidiaries shall file with the
Securities and Exchange Commission or any successor thereto (the "SEC") or
deliver to holders of its Indebtedness (or any trustee, agent or other
representative therefor) pursuant to the terms of the documentation
governing such Indebtedness.
(f) Debt Rating. Promptly upon, and in any event within three Business
Days after, an Authorized Representative of any Borrower obtains knowledge
of any change by Moody's or S&P in the Debt Rating, notice of such change.
(g) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to Furniture Brands or any
of its Subsidiaries as any Agent or Lender may reasonably request in
writing.
8.02 Books, Records and Inspections. The Borrowers will, and will cause
each of their respective Subsidiaries to, keep proper books of record and
account in which full, true and correct entries in conformity with generally
accepted accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. The
Borrowers will, and will cause each of their respective Subsidiaries to, permit
officers and designated representatives of any Agent or the Required Lenders to
visit and inspect, after reasonable notice during regular business hours and
under guidance of officers of the Borrowers or such Subsidiary, any of the
properties of the Borrowers or such Subsidiary, and to examine the books of
account of the Borrowers or such Subsidiary and discuss the affairs, finances
and accounts of the Borrowers or such Subsidiary with, and be advised as to the
same by, its and their officers and independent accountants, all at such
reasonable times and intervals and to such reasonable extent as such Agent or
such Lender may request.
8.03 Maintenance of Insurance. The Borrowers will, and will cause each of
their respective Subsidiaries to, maintain insurance on all its property in at
least such amounts and against at least such risks and with such deductibles or
self-insured retentions as is consistent and in accordance with industry
practice.
8.04 Corporate Franchises. The Borrowers will, and will cause
each of their respective Subsidiaries to, do or cause to be done, all things
necessary to preserve and keep in full force and effect its existence and its
material rights, franchises, licenses and patents; provided, however, that
nothing in this Section 8.04 shall prevent (i) sales of assets, mergers or other
transactions by or among Furniture Brands or any of its Subsidiaries in
accordance with Section 9.02 or (ii) (x) the withdrawal by Furniture Brands or
any of the Subsidiaries of its qualification as a foreign corporation or the
failure to qualify as a foreign corporation in any jurisdiction or (y) the
amendment of the Certificate of Incorporation or By-Laws of Furniture Brands or
any of its Subsidiaries, in each case which would not in any way materially and
adversely affect the Lenders, and where such withdrawal or failure or amendment,
as the case may be, could not reasonably be expected to have a Material Adverse
Effect.
8.05 Compliance with Statutes, etc. The Borrowers will, and will cause each
of their respective Subsidiaries to, comply with all applicable statutes,
regulations and orders (including, without limitation, any Environmental Laws)
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
8.06 ERISA. As soon as possible and, in any event, within 20 days after the
Borrowers or any of their respective Subsidiaries or any ERISA Affiliate knows
or has reason to know of the occurrence of any of the following, the Borrowers
will deliver to the Administrative Agent, and the Administrative Agent shall
promptly forward to each Lender, a certificate of an Authorized Representative
of the Borrowers setting forth details as to such occurrence and the action, if
any, that the Borrowers, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by the Borrowers, such Subsidiary, the ERISA Affiliate, the
PBGC, or a Plan participant or the Plan administrator with respect thereto: that
a Reportable Event has occurred; that an accumulated funding deficiency has been
incurred or an application is likely to be or has been made to the Secretary of
the Treasury for a waiver or modification of the minimum funding standard
(including any required installment payments) or an extension of any
amortization period under Section 412 of the Code with respect to a Plan and/or
a Multiemployer Plan; that a Plan and/or Multiemployer Plan has been or is
reasonably expected to be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that a Plan and/or a Multiemployer Plan has
an Unfunded Current Liability giving rise to a lien under ERISA or the Code;
that proceedings are likely to be or have been instituted or notice has been
given to terminate or appoint a trustee to administer a Plan and/or a
Multiemployer Plan; that a proceeding has been instituted pursuant to Section
515 of ERISA to collect a delinquent contribution to a Multiemployer Plan if
material in amount; that the Borrowers, any of their respective Subsidiaries or
any ERISA Affiliate will or is reasonably expected to incur any material
liability (including any indirect, contingent or secondary liability) to or on
account of the termination of or withdrawal from a Plan and/or Multiemployer
Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan and/or Multiemployer Plan under Section 401(a)(29) of the
Code; or that the Borrowers or any Subsidiary is reasonably expected to incur
any liability pursuant to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA) which
liability, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. Upon request, the Borrowers will deliver to each
of the Lenders a complete copy of the annual report (Form 5500) of each Plan
required to be filed with the Internal Revenue Service. In addition to any
certificates or notices delivered to the Lenders pursuant to the first sentence
hereof, copies of such annual reports and any material notices received by the
Borrowers or any of their respective Subsidiaries or any ERISA Affiliate with
respect to any Plan and/or Multiemployer Plan and/or Foreign Pension Plan shall
be delivered to the Lenders no later than 20 days after the date such report has
been requested or such notice has been received by the Borrowers, the Subsidiary
or the ERISA Affiliate, as applicable.
8.07 End of Fiscal Years; Fiscal Quarters. Furniture Brands will cause (i)
each of its Fiscal Years to end on December 31 of each year, and each of its
fiscal quarters to end on each March 31, June 30, September 30 and December 31
and (ii) each of its Subsidiaries' (x) fiscal years to end on the Saturday
closest to December 31 and (y) fiscal quarters to end on the Saturday closest to
the last day of each March, June, September and December, provided, that any of
the foregoing may be changed if the Borrowers shall have first given the Agents
at least 45 days' prior written notice thereof and the Borrowers, to the extent
requested by the Agents, shall have entered into an appropriate amendment to
this Agreement, in form and substance reasonably satisfactory to the
Administrative Agent, to ensure that the financial covenants contained in
Sections 9.05 and 9.06 are measured on substantially the same basis as such
covenants are measured on the Effective Date.
8.08 Payment of Taxes. Each of the Borrowers will pay and discharge, or
cause to be paid and discharged, and will cause each of their respective
Subsidiaries to pay and discharge, all material taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any material properties belonging to it, in each case on a timely basis,
and all lawful claims which, if unpaid, might become a lien or charge upon any
properties of Furniture Brands or any of its Subsidiaries; provided that none of
Furniture Brands nor any of its Subsidiaries shall be required to pay any such
tax, assessment, charge, levy or claim which is being contested in good faith
and by proper proceedings if it has maintained adequate reserves with respect
thereto in accordance with generally accepted accounting principles.
8.09 Additional Subsidiary Guarantors. Unless the Required Lenders
otherwise agree, each Borrower agrees to cause each of its Wholly-Owned Domestic
Subsidiaries that are acquired or created after the Effective Date to promptly
(and in any event within 10 Business Days of such acquisition or creation)
execute and deliver a counterpart of the Subsidiaries Guaranty.
SECTION 9. Negative Covenants. The Borrowers covenant and agree that on and
after the Effective Date and until the Total Commitment and all Letters of
Credit and Acceptances have terminated and the Loans, Notes and Unpaid Drawings
(in each case together with interest thereon), Fees and all other Obligations
incurred hereunder and thereunder, are paid in full:
9.01 Liens. The Borrowers will not, and will not permit any of their
respective Subsidiaries to, create, incur, assume or suffer to exist any Lien
upon or with respect to any property or assets (real or personal, tangible or
intangible) of Furniture Brands or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such property
or assets (including sales of accounts receivable with recourse to Furniture
Brands or any of its Subsidiaries), or assign any right to receive income or
permit the filing of any financing statement under the UCC or any other similar
notice of Lien under any similar recording or notice statute; provided that the
provisions of this Section 9.01 shall not prevent the creation, incurrence,
filing, assumption or existence of the following (Liens described below are
herein referred to as "Permitted Liens"):
(i) incipient Liens for taxes, assessments or governmental charges or
levies not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been established
in accordance with generally accepted accounting principles in the United
States (or the equivalent thereof in any country in which a Foreign Sales
Corporation or a Foreign Subsidiary is doing business, as applicable);
(ii) Liens in respect of property or assets of the Borrowers or any of
their Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such
as carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of the Borrowers' or
such Subsidiary's property or assets or materially impair the use thereof
in the operation of the business of the Borrowers or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are listed, and
the property subject thereto described, in Schedule VI, plus renewals and
extensions of such Liens to the extent set forth on Schedule VI, provided
that (x) the aggregate principal amount of the Indebtedness, if any,
secured by such Liens does not increase from that amount outstanding on the
Effective Date or, if less, at the time of any such renewal or extension
and (y) any such renewal or extension does not encumber any additional
assets or properties of Furniture Brands or any of its Subsidiaries;
(iv) (a) licenses, leases or subleases granted to other Persons in the
ordinary course of business not materially interfering with the conduct of
the business of Furniture Brands and its Subsidiaries taken as a whole, (b)
Liens arising from precautionary UCC financing statements regarding
operating leases and (c) statutory and common law landlords' liens under
leases to which any of the Borrower and its Subsidiaries is a party;
(v) Liens upon assets subject to Capitalized Lease Obligations of the
Borrowers and their Subsidiaries to the extent permitted by Section
9.03(vi), provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y) the
Lien encumbering the asset giving rise to the Capitalized Lease Obligation
does not encumber any other asset of the Borrowers or any of their
Subsidiaries;
(vi) Liens placed upon assets used in the ordinary course of business
of the Borrowers or any of their Subsidiaries at the time of acquisition or
new construction thereof by the Borrowers or any such Subsidiary or within
180 days thereafter to secure Indebtedness incurred to pay all or a portion
of the purchase price and/or construction costs thereof, plus renewals or
extensions of such Liens, provided that (x) the aggregate outstanding
principal amount of all Indebtedness secured by Liens permitted by this
clause (vi) shall not at any time exceed the amount of Indebtedness
permitted to be outstanding pursuant to Section 9.03(vi) and (y) in all
events, the Lien encumbering the assets so acquired or newly constructed
does not encumber any other asset of the Borrowers or such Subsidiary;
(vii) Liens existing on specific tangible assets at the time acquired
by Furniture Brands or any of its Subsidiaries or on assets of a Person at
the time such Person is acquired by Furniture Brands or any of its
Subsidiaries (together with Liens securing any extensions, renewals or
refinancings of the Indebtedness secured thereby to the extent not
increasing the outstanding principal amount thereof or extending to any
other asset of Furniture Brands or its Subsidiaries), provided that (i) no
such Liens were created at the time of or in contemplation of the
acquisition of such assets or Person by Furniture Brands and/or its
Subsidiaries, (ii) in the case of any such acquisition of a Person, any
Lien attaches only to a specific tangible asset of such Person and not
assets of such Person generally and (iii) the Indebtedness secured by any
such Lien does not exceed 100% of the fair market value of the asset to
which such Lien attaches, determined at the time of the acquisition of such
asset or Person in good faith by the Borrower or the respective Subsidiary;
(viii) easements, rights-of-way, restrictions (including zoning
restrictions), encroachments, protrusions and other similar charges or
encumbrances, and minor title deficiencies, in each case whether now or
hereafter in existence, not securing Indebtedness and not materially
interfering with the conduct of the business of the Borrowers or any of
their respective Subsidiaries;
(ix) Liens arising out of the existence of judgments or awards not
constituting an Event of Default under Section 10.09, provided that no cash
or property is deposited or delivered to secure the respective judgment or
award (or any appeal bond in respect thereof, except as permitted by clause
(xii) of this Section 9.01);
(x) any interest or title of a lessor, sublessor, licensee or licensor
under any lease or license agreement permitted by this Agreement;
(xi) Liens (other than any Lien imposed by ERISA) incurred in the
ordinary course of business of the Borrowers and their respective
Subsidiaries in connection with workers' compensation, unemployment
insurance and other social security legislation;
(xii) Liens (x) to secure the performance by the Borrowers and their
respective Subsidiaries of tenders, statutory obligations, surety, stay,
customs and appeal bonds, statutory bonds, bids, leases, government
contracts, trade contracts, performance and return of money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money) or (y) to secure the performance by the Borrowers and their
respective Subsidiaries of leases of Real Property, to the extent incurred
or made in the ordinary course of business consistent with past practices,
provided that the aggregate amount of cash deposits, and fair market value
of all other property subject to Liens, at any time pursuant to this clause
(xii) shall not exceed $12,500,000 in the aggregate;
(xiii) Liens (x) in favor of customs and revenue authorities arising
as a matter of law to secure the payment of customs duties in connection
with the importation of goods or (y) in respect of property or assets of
Thomasville or any of its Subsidiaries imposed by law or governmental
action which arise out of actual or potential claims under any
Environmental Law disclosed in the environmental report furnished to the
Administrative Agent prior to November 17, 1994, in each case so long as
the Liens described in this clause (y) are being contested in good faith
(or Furniture Brands or its respective Subsidiaries are in good faith
pursuing indemnities in respect thereof pursuant to the Armstrong Stock
Purchase Agreement) pursuant to appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property
subject to any such Lien and so long as adequate reserves (if necessary)
have been established in accordance with generally accepted accounting
principles with respect to the liability or liabilities secured by such
Liens;
(xiv) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by
the Borrowers or any of their Subsidiaries in the ordinary course of
business consistent with the past practices; or
(xv) Liens not otherwise permitted by the foregoing clauses (i)
through (xiv) to the extent attaching to properties and assets with an
aggregate fair value not in excess of, and securing liabilities not in
excess of, $20,000,000 in the aggregate at any time outstanding.
9.02 Fundamental Changes. Furniture Brands will not, and will not permit
any of its Subsidiaries to, consolidate with, merge into, or sell all or
substantially all of the assets of Furniture Brands and its Subsidiaries taken
as a whole (whether in a single transaction or in a series of related
transactions) to any other Person or permit any other Person to merge into it or
any of its Subsidiaries, except that the following shall be permitted:
(i) any Subsidiary of Furniture Brands may merge or consolidate with
another Subsidiary of Furniture Brands or with Furniture Brands so long as
(x) in the case of a merger or consolidation involving a Borrower, the
Borrower is the surviving Person (it being understood and agreed that none
of the Borrowers may be merged or consolidated out of existence without the
prior written consent of the Required Lenders) and (y) in the case of a
merger or consolidation involving a Subsidiary Guarantor (unless the
respective Subsidiary Guarantor is merging into or consolidating with a
Borrower which will be the survivor thereof), the Subsidiary Guarantor is
the surviving Person;
(ii) any Person (not already a Borrower or Subsidiary thereof) may
merge or consolidate with any Subsidiary of Furniture Brands (other than a
Borrower) so long as (x) the surviving Person is, or as a result of such
merger or consolidation becomes, a Subsidiary of Furniture Brands in which
Furniture Brands has direct and indirect ownership interests at least as
great as those (in terms of percentages of economic interests and voting
interests) held by it in the Subsidiary with which the respective Person
merged or consolidated immediately before giving effect to the respective
merger or consolidation, (y) if such surviving Person is a Wholly-Owned
Domestic Subsidiary of Furniture Brands, such Wholly-Owned Domestic
Subsidiary takes all action required pursuant to Section 8.09 and (z) both
before and immediately after giving effect to such merger or consolidation,
no Default or Event of Default shall have occurred and be continuing; and
(iii) any Person (not already a Borrower or Subsidiary thereof) may
merge or consolidate with a Borrower so long as (x) the respective Borrower
is the surviving corporation, and (y) both before and immediately after
giving effect to such merger or consolidation, no Default or Event of
Default shall have occurred and be continuing.
9.03 Indebtedness. Furniture Brands will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) so long as no Default or Event of Default then exists or would
result therefrom, Permitted Indebtedness shall be permitted on terms and
conditions set forth in the definition of Permitted Indebtedness;
(iii) Indebtedness outstanding on the Effective Date shall be
permitted to the extent the same is listed on Schedule VII, together with
any refinancings or renewals thereof, in each case so long as no additional
obligors or guarantors, or security, is provided in connection with the
respective such renewal or refinancing and so long as the principal amount
is not increased as a result thereof;
(iv) accrued expenses and current trade accounts payable incurred in
the ordinary course of business;
(v) Indebtedness under Interest Rate Protection Agreements entered
into with respect to other Indebtedness permitted under this Section 9.03
so long as the entering into of such Interest Rate Protection Agreements
are bona fide hedging activities and are not for speculative purposes;
(vi) Indebtedness of the Borrowers and their Subsidiaries evidenced by
Capitalized Lease Obligations to the extent permitted pursuant to Section
9.01(v), and Indebtedness secured by Liens permitted under Section
9.01(vi); provided that in no event shall the aggregate principal amount of
Capitalized Lease Obligations and other Indebtedness permitted by this
clause (vi) exceed $20,000,000;
(vii) Indebtedness under Currency Hedging Agreements so long as (i)
any such Currency Hedging Agreement is reasonably related to income (in
currencies other than Dollars) derived from foreign operations of the
Borrowers or any Subsidiary (or any Foreign Sales Corporation) or otherwise
related to purchases (in currencies other than Dollars) permitted hereunder
from foreign suppliers and (ii) such Currency Hedging Agreements do not
exceed a notional amount equal to $15,000,000 in the aggregate at any one
time;
(viii) intercompany Indebtedness among the Borrowers and their
Subsidiaries;
(ix) Indebtedness of a Subsidiary existing at the time of acquisition
thereof by Furniture Brands or a Subsidiary thereof (or Indebtedness
assumed at the time of such an acquisition of an asset securing such
Indebtedness), provided that (a) such Indebtedness was not incurred in
connection with, or in contemplation of, such acquisition and (b) any Lien
securing such Indebtedness is permitted under Section 9.01(vii);
(x) Indebtedness in respect of bid, performance, advance payment or
surety bonds entered into in the ordinary course of business consistent
with past practices;
(xi) Contingent Obligations (a) of the Borrowers or any of their
Subsidiaries as a guarantor of the lessee under any lease pursuant to which
the Borrowers or a Subsidiary is the lessee so long as such lease is
otherwise permitted hereunder, (b) of Furniture Brands constituting
guarantees by Furniture Brands of trade payables owing by its Subsidiaries
in their ordinary course of business, (c) of Furniture Brands and/or
Thomasville consisting of guarantees (with the maximum amount guaranteed at
any time pursuant to this clause (c) not to exceed $7,500,000 in the
aggregate) of actual or potential claims under Environmental Laws referred
to in Section 9.01(xiii)(y) and (d) of the Borrowers or any Subsidiary as a
guarantor of the lessee under any lease pursuant to which a third party is
the lessee in an aggregate amount not to exceed $135,000,000; and
(xii) Contingent Obligations of Furniture Brands pursuant to the Tax
Sharing Agreements.
9.04 Transactions with Affiliates. The Borrowers will not, and will not
permit any of their respective Subsidiaries to, enter into any transaction or
series of related transactions with any Affiliate of Furniture Brands or any of
its Subsidiaries, other than in the ordinary course of business and on terms and
conditions substantially as favorable to the Borrowers or such Subsidiary as
would reasonably be obtained by the Borrowers or such Subsidiary at that time in
a comparable arm's-length transaction with a Person other than an Affiliate,
except:
(i) transactions between or among the Borrowers and/or one or more
Subsidiaries of Furniture Brands and not involving any other Affiliate of
Furniture Brands shall be permitted;
(ii) customary fees may be paid to non-officer directors of the
Borrowers and their Subsidiaries;
(iii) Furniture Brands and its Subsidiaries may enter into employment
arrangements with respect to the procurement of services with their
respective officers and employees in the ordinary course of business;
(iv) Furniture Brands may sell or issue Furniture Brands Common Stock
and Qualified Preferred Stock to its Affiliates (other than its
Subsidiaries); and
(v) Furniture Brands may modify the Tax Sharing Agreement as provided
in Section 9.08(b).
9.05 Maximum Leverage Ratio. The Borrowers will not permit the Leverage
Ratio at any time to be greater than 2.75:1.00.
9.06 Minimum Consolidated Net Worth. The Borrowers will not permit
Consolidated Net Worth at any time during a period set forth below to be less
than the amount set forth opposite such period:
Period Amount
------ ------
From September 30, 2000 to
December 30, 2000 $450,000,000
From December 31, 2000 to
March 30, 2001 $465,000,000
From March 31, 2001
to June 29, 2001 $480,000,000
From June 30, 2001
to September 29, 2001 $495,000,000
From September 30, 2001 to
December 30, 2001 $515,000,000
From December 31, 2001
to March 30, 2002 $540,000,000
From March 31, 2002
to June 29, 2002 $560,000,000
From June 30, 2002
to September 29, 2002 $580,000,000
From September 30, 2002
to December 30, 2002 $610,000,000
From December 31, 2002
to March 30, 2003 $640,000,000
From March 31, 2003
to June 29, 2003 $660,000,000
From June 30, 2003
to September 29, 2003 $680,000,000
From September 30, 2003
to December 30, 2003 $715,000,000
From December 31, 2003
to March 30, 2004 $750,000,000
From March 31, 2004
to June 29, 2004 $770,000,000
From June 30, 2004
to September 29, 2004 $790,000,000
From September 30, 2004
to December 30, 2004 $820,000,000
From December 31, 2004
to March 30, 2005 $850,000,000
Thereafter $880,000,000
9.07 Ownership of Assets by the Borrowers and the Subsidiary Guarantors.
The Borrowers will not at any time allow the assets directly owned by the
Borrowers and the Subsidiary Guarantors to constitute less than 80% of the
aggregate fair market value (as determined in good faith by Furniture Brands) of
the consolidated assets of Furniture Brands and all of its Subsidiaries.
9.08 Limitation on Modifications of Certificate of Incorporation, By-Laws
and Certain Other Agreements; etc. (a) The Borrowers will not, and will not
permit any of their respective Subsidiaries to, amend or modify its Certificate
of Incorporation (including, without limitation, by the filing or modification
of any certificate of designation) or By-Laws (or equivalent organizational
documents), or any agreement entered into by it, with respect to its capital
stock or enter into any new agreement with respect to its capital stock if the
foregoing would in any way materially and adversely affect the Lenders.
(b) The Borrowers will not, and will not permit any of their respective
Subsidiaries to, amend, modify or change any provision of any Tax Sharing
Agreement other than any amendments, modifications and changes which
(individually and in the aggregate) would not in any way materially and
adversely affect the Lenders or are consented to in writing by the Required
Lenders.
9.09 Business. The Borrowers will not, and will not permit any of their
Subsidiaries, to engage (directly or indirectly) in any business other than
substantially the same lines of business in which they are engaged on the
Effective Date and reasonable extensions thereof and other businesses that are
complimentary or reasonably related thereto.
9.10 Limitation on Certain Restrictions on Subsidiaries. The Borrowers will
not, and will not permit any of their respective Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective,
except as set forth on Schedule VIII, any encumbrance or restriction on the
ability of any such Subsidiary to (x) pay dividends or make any other
distributions on its capital stock or any other interest or participation in its
profits owned by any Borrower or any of its Subsidiaries, or pay any
Indebtedness owed to any Borrower or any of its Subsidiaries, (y) make loans or
advances to any Borrower or any of its Subsidiaries or (z) transfer any of its
properties or assets to any Borrower or any of its Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (i) applicable law,
(ii) this Agreement and the other Credit Documents, (iii) other Indebtedness
permitted pursuant to Section 9.03, in each case so long as the encumbrances and
restrictions contained therein are not more restrictive than those contained in
this Agreement, (iv) holders of Permitted Liens may restrict the transfer of any
assets subject thereto, (v) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrowers or of
any Subsidiary of the Borrowers, and (vi) customary provisions restricting
assignment of any licensing agreement entered into by the Borrowers or any of
their Subsidiaries in the ordinary course of business.
9.11 Limitation on Issuance of Capital Stock. (a) Furniture Brands will not
issue (i) any Preferred Stock other than Qualified Preferred Stock (so long as
no Event of Default pursuant to Section 10.09 will result therefrom) or (ii) any
redeemable common stock other than common stock that is redeemable at the sole
option of Furniture Brands; it being understood that Furniture Brands may from
time to time issue Furniture Brands Common Stock pursuant to the exercise of
options therefor.
(b) Furniture Brands shall not permit any of its Subsidiaries to issue, any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except (i)
for transfers and replacements of then outstanding shares of capital stock, (ii)
for stock splits, stock dividends and additional issuances which do not decrease
the percentage ownership of Furniture Brands or any of its Subsidiaries in any
class of the capital stock of such Subsidiaries, (iii) to qualify directors to
the extent required by applicable law, and (iv) for issuances by newly created
or acquired Subsidiaries in accordance with the terms of this Agreement.
SECTION 10. Events of Default. Upon the occurrence of any of the following
specified events (each an "Event of Default"):
10.01 Payments. The Borrowers shall (i) default in the payment when due of
any principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for three or more Business Days, in the payment when due of
any Unpaid Drawings or interest on any Loan or Note, or any Fees or any other
amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or statement made
by any Credit Party herein or in any other Credit Document or in any certificate
delivered pursuant hereto or thereto shall prove to be untrue in any material
respect on the date as of which made or deemed made; or
10.03 Covenants. The Borrowers shall (i) default in the due performance or
observance by it of any term, covenant or agreement contained in Section
8.01(d)(i), 8.07, 8.09 or Section 9 or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement and such default shall continue unremedied for a period of 30 days
after written notice to the Borrowers by the Administrative Agent or any Lender;
or
10.04 Default Under Other Agreements. The Borrowers or any of their
respective Subsidiaries shall (i) default in any payment of any Indebtedness
(other than the Obligations) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or (ii)
default in the observance or performance of any agreement or condition relating
to any Indebtedness (other than the Obligations) or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (iii) any Indebtedness (other than
the Obligations) of the Borrowers or any of their respective Subsidiaries shall
be declared to be due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that (x) it shall not be a Default or Event of Default under this
Section 10.04 unless the aggregate principal amount of all Indebtedness as
described in preceding clauses (i) through (iii), inclusive, is at least
$10,000,000; or
10.05 Bankruptcy, etc. The Borrowers or any of their respective
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy" as now or hereafter in effect, or
any successor thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Borrowers or any of their respective Subsidiaries and the
petition is not controverted within 30 days, or is not dismissed within 60 days,
after commencement of the case; or a custodian (as defined in the Bankruptcy
Code) is appointed for, or takes charge of, all or substantially all of the
property of the Borrowers or any of their respective Subsidiaries, or the
Borrowers or any of their respective Subsidiaries commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Borrowers or any of their
respective Subsidiaries, or there is commenced against the Borrowers or any of
their respective Subsidiaries any such proceeding which remains undismissed for
a period of 60 days, or the Borrowers or any of their respective Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or the Borrowers or any of
their respective Subsidiaries suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or the Borrowers or any of their respective
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by the Borrowers or any of their respective
Subsidiaries for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) Any Plan and/or Multiemployer Plan shall fail to satisfy
the minimum funding standard required for any plan year or part thereof or a
waiver of such standard or extension of any amortization period is sought or
granted under Section 412 of the Code, any Plan and/or Multiemployer Plan shall
have had or is likely to have a trustee appointed to administer such Plan and/or
Multiemployer Plan pursuant to Section 4042 of ERISA, any Plan and/or
Multiemployer Plan shall have been or is reasonably expected to be terminated or
to be the subject of termination proceedings under Section 4042 of ERISA, any
Plan and/or Multiemployer Plan shall have an Unfunded Current Liability, a
contribution required to be made to a Plan, Multiemployer Plan and/or Foreign
Pension Plan has not been timely made, the Borrowers or any of their respective
Subsidiaries or any ERISA Affiliate have incurred or is reasonably expected to
incur a liability to or on account of a Plan and/or Multiemployer Plan under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code, or the Borrowers or
any of their respective Subsidiaries have incurred or are reasonably expected to
incur liabilities pursuant to one or more employee welfare benefit plans (as
defined in Section 3(1) of ERISA) which provide benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or
employee pension benefit plans (as defined in Section 3(2) of ERISA) or Foreign
Pension Plans; (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability or a
material risk of incurring a liability; (c) and in each case in clauses (a) and
(b) above, such lien, security interest or liability, individually, or in the
aggregate, has had or could reasonably be expected to have a Material Adverse
Effect; or
10.07 Subsidiaries Guaranty. The Subsidiaries Guaranty or any provision
thereof shall cease to be in full force or effect as to any Subsidiary
Guarantor, or any Subsidiary Guarantor or Person acting by or on behalf of such
Subsidiary Guarantor shall deny or disaffirm such Subsidiary Guarantor's
obligations under the Subsidiaries Guaranty, or any Subsidiary Guarantor shall
default in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed pursuant to the Subsidiaries Guaranty;
or
10.08 Judgments. One or more judgments or decrees shall be entered against
the Borrowers or any of their respective Subsidiaries involving in the aggregate
for the Borrowers and their respective Subsidiaries a liability (not paid or
fully covered by a reputable and solvent insurance company) and such judgments
and decrees either shall be final and non-appealable or shall not be vacated,
discharged or stayed or bonded pending appeal for any period of 60 consecutive
days, and the aggregate amount of all such judgments exceeds $10,000,000;
10.09 Change of Control. A Change of Control shall occur; or
10.10 Tax Sharing Agreement. One or more parties to a Tax Sharing Agreement
(other than Borrowers or any of their respective Subsidiaries) shall have
defaulted in its or their payment obligations in an aggregate amount equal to or
greater than $5,000,000 thereunder and such default or defaults shall remain
unremedied for a period in excess of ten consecutive Business Days;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrowers, take any or all
of the following actions, without prejudice to the rights of any Agent, any
Lender or the holder of any Note to enforce its claims against any Credit Party
(provided that, if an Event of Default specified in Section 10.05 shall occur
with respect to the Borrowers, the result of which would occur upon the giving
of written notice by the Administrative Agent to the Borrowers as specified in
clauses (i) and (ii) below shall occur automatically without the giving of any
such notice): (i) declare the Total Commitment terminated, whereupon the
Commitment of each Lender shall forthwith terminate immediately and any
Commitment Commission and other Fees shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal of and any
accrued interest in respect of all Loans and the Notes and all Obligations owing
hereunder and thereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Credit Party; (iii) terminate any Letter
of Credit which may be terminated in accordance with its terms; (iv) direct the
Borrowers to pay (and the Borrowers agree that upon receipt of such notice, or
upon the occurrence of an Event of Default specified in Section 10.05 with
respect to the Borrowers, they will pay) to the Administrative Agent at the
Payment Office such additional amount of cash, to be held as security by the
Administrative Agent, as is equal to the aggregate Stated Amount of all Letters
of Credit issued for the account of the Borrowers and all Acceptances then
outstanding; and (v) apply any cash collateral held for the benefit of the
Lenders pursuant to Section 4.02 to repay outstanding Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Acceptance" shall mean a draft under a Letter of Credit drawn on and
accepted by the relevant Issuing Lender unconditionally ordering payment in
Dollars or any Alternate Currency of a sum certain to the order of the
beneficiary with respect to such Letter of Credit at a specified future time.
"Acceptance Facing Fee" shall having the meaning provided in Section
3.01(c).
"Acceptance Fee" shall have the meaning provided in Section 3.01(b).
"Additional Commitment" shall mean, for each Lender (or such other Person
who will become a Lender as contemplated in clause (vii) of Section 1.14(a)),
any commitment to make Revolving Loans pursuant to Section 1.14, in such amount
as agreed to by such Lender (or such other Person) in the respective Additional
Commitment Agreement; provided that on the Additional Commitment Date upon which
an Additional Commitment of any Lender becomes effective, such Additional
Commitment of such Lender shall be added to (and thereafter become a part of)
the Commitment of such Lender for all purposes of this Agreement as contemplated
by Section 1.14.
"Additional Commitment Agreement" shall mean an Additional Commitment
Agreement substantially in the form of Exhibit I (appropriately completed).
"Additional Commitment Date" shall mean each date upon which an Additional
Commitment under an Additional Commitment Agreement becomes effective as
provided in Section 1.14(b)(i).
"Additional Commitment Requirements" shall mean, with respect to any
request for an Additional Commitment made pursuant to Section 1.14 or any
provision of an Additional Commitment on any Additional Commitment Date, the
satisfaction of each of the following conditions: (i) no Default or Event of
Default then exists or would result therefrom (for purposes of such
determination, assuming the relevant Revolving Loans in an aggregate principal
amount equal to the full amount of Additional Commitments then requested or
provided had been incurred, on such date of request or Additional Commitment
Date, as the case may be), (ii) calculations are made by Furniture Brands
demonstrating compliance with the covenants contained in Sections 9.05 and 9.06
for the Reference Period most recently ended prior to the date of the respective
request for Additional Commitments or the relevant Additional Commitment Date,
as the case may be, on a Pro Forma Basis, (iii) Furniture Brands certifies (and,
if requested by the Administrative Agent, delivers to it satisfactory opinions
of counsel (including in-house counsel) and such other supporting information as
may be reasonably requested) to the Administrative Agent that the Total
Commitment (as increased by the Additional Commitments) may be fully utilized
through the incurrence of loans pursuant to this Agreement without causing a
violation of any then existing Indebtedness or other material agreements of
Furniture Brands and its Subsidiaries and (iv) the delivery by Furniture Brands
of officer's certificates to the Administrative Agent certifying as to
compliance with preceding clauses (i), (ii) and (iii) and containing the
calculations required by clause (ii).
"Additional Lender" shall have the meaning provided in Section 1.14(b).
"Administrative Agent" shall mean DBAG, in its capacity as Administrative
Agent for the Lenders hereunder, and shall include any successor to the
Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other Person
(including, for purposes of Section 9.04 only, all directors, officers and
partners of such Person) directly or indirectly controlling, controlled by, or
under direct or indirect common control with, such Person; provided, however,
that for purposes of Section 9.04, an Affiliate of Furniture Brands shall
include any Person that directly or indirectly owns more than 5% of any class of
the capital stock of Furniture Brands and any officer or director of Furniture
Brands or any such Person. A Person shall be deemed to control another Person if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agents" shall mean and include the Administrative Agent, the Documentation
Agent and the Syndication Agent and, for purposes of Sections 12, 13.01, 13.12
and 13.16 only, the Lead Arranger.
"Agreement" shall mean this Credit Agreement, as modified, supplemented,
amended, restated, extended, renewed or replaced from time to time.
"Alternate Currency" shall mean each of Euros, Deutsche Marks, Japanese
Yen, Canadian Dollars, French Francs and British Pounds Sterling and such other
currencies which are readily convertible into Dollars.
"Applicable Base Rate Margin", "Applicable Commitment Commission
Percentage" and "Applicable Eurodollar Margin" shall mean (i) with respect to
Commitment Commission, the respective percentage per annum set forth below under
the column "Applicable Commitment Commission Percentage" and opposite the
respective Level (i.e., Level 1, Level 2, Level 3, Level 4, Level 5 or Level 6,
as the case may be) that is currently then in effect based on the Debt Rating,
and (ii) with respect to Loans, the respective percentage per annum set forth
below under the column for the respective Type of Loans and opposite the
respective Level (i.e., Level 1, Level 2, Level 3, Level 4, Level 5 or Level 6,
as the case may be) that is currently then in effect based on the Debt Rating:
<TABLE>
<CAPTION>
Higher Debt Rating
(or, in the case of Applicable
Level 4 Pricing, Applicable Applicable Commitment
Pricing required Debt Base Rate Eurodollar Commission
Level Ratings) Margin Margin Percentage
----- -------- ------ ------ ----------
<S> <C> <C> <C> <C> <C>
1 A- or A3 or higher 0.000% 0.500% 0.100%
2 BBB+ or Baa1 0.000% 0.625% 0.125%
3 BBB or Baa2 0.000% 0.750% 0.150%
4 both BBB- and Baa3 0.000% 1.000% 0.200%
5 BBB- or Baa3, but 0.125% 1.125% 0.250%
not both
6 BB+ or Ba1 or below 0.300% 1.300% 0.300%
or unrated
</TABLE>
; provided that (A) Level 6 pricing shall apply at all times when (i) no Debt
Rating is available or (ii) any Default or Event of Default is in existence and
(B) in making the foregoing determinations, in the case of a split Debt Rating
where the higher Debt Rating is two or more Debt Rating levels (treating pluses,
non-pluses, minuses and non-minuses as different levels and treating a failure
to be rated by either Moody's or S&P (but not both) as if the Debt Rating so
provided by Moody's or S&P, as the case may be, is the higher Debt Rating for
the purpose of the table above) above the lower Debt Rating, the higher Debt
Rating for purposes of determining the Pricing Levels as described above shall
be deemed to be one Debt Rating level below the Debt Rating actually
constituting the higher Debt Rating. Any change in the Applicable Base Rate
Margin, the Applicable Commitment Commission or the Applicable Eurodollar Margin
due to a change in the Debt Rating shall be effective on the effective date of
such change in the applicable Debt Rating.
"Armstrong Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated as of November 18, 1995, by and among Armstrong World
Industries, Inc., Armstrong Enterprises, Inc. and Furniture Brands.
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit H (appropriately
completed).
"Authorized Representative" shall mean, with respect to (i) delivering
Notices of Borrowing, Notices of Conversion, Letter of Credit Requests and
similar notices, any person or persons that has or have been authorized by the
respective boards of the Borrowers to deliver such notices pursuant to this
Agreement and that has or have appropriate signature cards on file with the
Administrative Agent, the Swingline Lender and each Issuing Lender; (ii)
delivering financial information and officer's certificates pursuant to this
Agreement, any financial officer of Furniture Brands and (iii) any other matter
in connection with this Agreement or any other Credit Document, any officer (or
a person or persons so designated by any two officers) of Furniture Brands.
"Bank of America" means Bank of America, N.A. in its individual capacity.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in excess of
the overnight Federal Funds Rate and (ii) the Prime Lending Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) each Revolving
Loan designated or deemed designated as such by the Borrowers at the time of the
incurrence thereof or conversion thereto.
"Borrowers" shall have the meaning provided in the first paragraph of this
Agreement.
"Borrowing" shall mean the incurrence of (i) Swingline Loans by the
Borrowers from the Swingline Lender on a given date or (ii) one Type of
Revolving Loan by the Borrowers from all of the Lenders on a pro rata basis on a
given date (or resulting from conversions on a given date), having in the case
of Eurodollar Loans the same Interest Period; provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of any related
Borrowing of Eurodollar Loans.
"Broyhill" shall have the meaning provided in the first paragraph of this
Agreement.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one
year from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company organized under the laws of the United
States, any State thereof, the District of Columbia or any foreign jurisdiction
having capital, surplus and undivided profits aggregating in excess of
$200,000,000, with maturities of not more than one year from the date of
acquisition by such Person, (iii) repurchase obligations with a term of not more
than 90 days for underlying securities of the types described in clause (i)
above entered into with any bank meeting the qualifications specified in clause
(ii) above, (iv) commercial paper issued by any Person incorporated in the
United States rated at least A-1 or the equivalent thereof by S&P or at least
P-1 or the equivalent thereof by Moody's and in each case maturing not more than
one year after the date of acquisition by such Person, (v) investments in money
market funds substantially all of whose assets are comprised of securities of
the types described in clauses (i) through (iv) above and (vi) demand deposit
accounts maintained in the ordinary course of business not in excess of $100,000
in the aggregate.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, as the same may be amended from time to time, 42
U.S.C. ss. 9601 et seq.
"Change of Control" shall mean the occurrence of any of the following: (i)
Furniture Brands shall at any time cease to own 100% of the capital stock of any
of Broyhill, Lane or Thomasville, (ii) the first date upon which a majority of
the Persons on the board of directors of Furniture Brands are not Continuing
Directors or (iii) any Person, entity or "group" (as such term is defined in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) is or
becomes the beneficial owner of an amount of outstanding Voting Stock of
Furniture Brands in excess of 25% of the total amount of fully diluted shares of
outstanding Voting Stock of Furniture Brands.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Commitment" shall mean, for each Lender, the amount set forth opposite
such Lender's name in Schedule I hereto directly below the column entitled
"Commitment," as same may be (x) reduced from time to time pursuant to Sections
3.02, 3.03 and/or 10, (y) adjusted from time to time as a result of assignments
to or from such Lender pursuant to Section 1.13 or 13.04(b) or (z) adjusted
pursuant to Section 1.14, it being understood that on each Additional Commitment
Date, the Additional Commitment of any Lender becoming effective on such date
shall be added to (and thereafter become all or a part of) the Commitment of
such Lender for all purposes of this Agreement as contemplated by Section 1.14.
"Commitment Commission" shall have the meaning provided in Section 3.01(a).
"Consolidated Current Liabilities" shall mean, at any time, the amounts
that would be classified as consolidated current liabilities of Furniture Brands
and its Subsidiaries at such time in accordance with generally accepted
accounting principles in a consolidated balance sheet, but excluding the current
portion of any Indebtedness under this Agreement and any other Indebtedness
which would otherwise be included therein.
"Consolidated Debt" shall mean, at any time, the remainder of (i) all
Indebtedness of Furniture Brands and its Subsidiaries at such time determined on
a consolidated basis with respect to borrowed money or other obligations of such
Persons which at such time would appear on the balance sheet of such Persons as
indebtedness (including unreimbursed drawings under Letters of Credit and
unreimbursed payments under Acceptances, but excluding Consolidated Current
Liabilities and deferred tax and pension liabilities) less (ii) the amount of
cash in excess of $5,000,000 shown on the consolidated balance sheet of
Furniture Brands and its Subsidiaries at such time.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net Income
of Furniture Brands and its Subsidiaries, determined on a consolidated basis,
before Consolidated Net Interest Expense (to the extent deducted in arriving at
Consolidated Net Income) and provision for taxes or gains or losses from sales
of assets other than inventory sold in the ordinary course of business, in each
case that were included in arriving at Consolidated Net Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by (i) adding thereto the amount of all amortization of intangibles and
depreciation, in each case that were deducted in arriving at Consolidated EBIT
for such period and (ii) giving effect on a Pro Forma Basis to any Significant
Acquisition or Significant Divestiture during such period.
"Consolidated Net Income" shall mean, for any period, the net after tax
income of Furniture Brands and its Subsidiaries determined on a consolidated
basis, without giving effect to any extraordinary gains or losses; provided that
(without duplication of exclusions) (i) the net income (to the extent positive)
of any Person that is not a Subsidiary of Furniture Brands or that is accounted
for by the equity method of accounting shall be included only to the extent of
the amount of dividends or distributions paid in cash to Furniture Brands or a
Wholly-Owned Subsidiary thereof, (ii) to the extent Consolidated Net Income
reflects amounts attributable to minority interests in Subsidiaries that are not
Wholly-Owned Subsidiaries of Furniture Brands, Consolidated Net Income shall be
reduced by the amounts attributable to such minority interests, (iii) the net
income of any Subsidiary shall be excluded to the extent that the declaration or
payment of dividends and distributions by that Subsidiary of net income is not
at the date of determination permitted without any prior governmental approval
(that has not been obtained) or, directly or indirectly, by operation of the
terms of its charter or any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation applicable to that Subsidiary or its
stockholders, (iv) the net income of any Person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded and (v) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" shall mean, as at any date of determination, the
stockholders' equity of Furniture Brands determined in accordance with generally
accepted accounting principles and as would be reflected on a consolidated
balance sheet of Furniture Brands prepared as of such date.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
"Continuing Directors" shall mean the directors of Furniture Brands on the
Effective Date and each other director if such director's nomination for
election to the board of directors of Furniture Brands is recommended by a
majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement and, after the execution and
delivery thereof pursuant to the terms of this Agreement, each Revolving Note,
the Swingline Note and the Subsidiaries Guaranty and, after the execution and
delivery thereof, each additional guaranty executed pursuant to Section 8.09.
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit.
"Credit Party" shall mean each Borrower and each Subsidiary Guarantor.
"Currency Hedging Agreements" shall mean any foreign exchange contracts,
currency swap agreements or other similar agreements or arrangements designed to
protect against the fluctuations in currency values.
"DBAG" shall mean Deutsche Bank AG, New York Branch, in its individual
capacity.
"Debt Rating" shall mean and include, on any date, each of the ratings of
Furniture Brands' (or the Borrowers' joint and several) senior unsecured
long-term Indebtedness, as most recently publicly announced by Moody's and S&P.
"Default" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a Lender
Default is in effect.
"Documentation Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Dollar Equivalent" shall mean, with respect to any currency
other than Dollars, the amount of Dollars into which such currency could be
converted at the Exchange Rate.
"Dollars" and the sign "$" shall each mean freely transferable lawful money
of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of Furniture Brands that
is incorporated under the laws of the United States or any State thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank, mutual
fund, financial institution or other "accredited investor" (as defined in
Regulation D of the Securities Act) but in any event excluding Furniture Brands
and its Subsidiaries.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Law" means any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, binding and enforceable
guideline, binding and enforceable written policy and rule of common law now or
hereafter in effect and in each case as amended, and any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent decree or judgment, to the extent binding on the Borrowers or any
of their respective Subsidiaries, relating to the environment, employee health
and safety or Hazardous Materials, including, without limitation, CERCLA; RCRA;
the Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.; the Toxic
Substances Control Act, 15 U.S.C. ss. 2601 et seq.; the Clean Air Act, 42 U.S.C.
ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.C. ss. 3803 et seq.; the
Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq.; the Emergency Planning
and the Community Right-to-Know Act of 1986, 42 U.S.C. ss. 11001 et seq.; the
Hazardous Material Transportation Act, 49 U.S.C. ss. 1801 et seq.; the
Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq. (to the extent it
regulates occupational exposure to Hazardous Materials); and any state and local
or foreign counterparts or equivalents, in each case as amended from time to
time.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrowers or any Subsidiary of the Borrowers
would be deemed to be a "single employer" (i) within the meaning of Section
414(b), (c), (m) or (o) of the Code or (ii) as a result of the Borrowers or any
Subsidiary of the Borrowers being or having been a general partner of such
person.
"Eurodollar Loan" shall mean each Loan designated as such by the Borrowers
at the time of the incurrence thereof or conversion thereto.
"Eurodollar Rate" shall mean for any Interest Determination Date with
respect to an Interest Period for a Eurodollar Loan, the rate per annum obtained
by dividing (i)(a) the per annum rate for deposits in Dollars for a period
corresponding to the duration of the relevant Interest Period which appears on
Telerate Page 3750 at approximately 11:00 A.M. (London time) on such Interest
Determination Date or (b) if such rate does not appear on Telerate Page 3750 on
such Interest Determination Date, the per annum rate (rounded upward to the
nearest 1/16 of one percent) at which deposits in Dollars are offered by DBAG to
first-class banks in the New York interbank market, in the approximate amount of
DBAG's relevant Eurodollar Loan and having a maturity approximately equal to
such Interest Period, at approximately 11:00 A.M. (New York time) on such
Interest Determination Date by (ii) a percentage equal to 100% minus the then
stated maximum rate of all reserve requirements (including, without limitation,
any marginal, emergency, supplemental, special or other reserves required by
applicable law) applicable to any member bank of the Federal Reserve System in
respect of Eurocurrency funding or liabilities as defined in Regulation D (or
any successor category of liabilities under Regulation D). The reference to
Telerate Page 3750 in this definition shall be construed to be a reference to
the relevant page or any other page that may replace such page on the Telerate
service or any other service that may be nominated by the British Bankers'
Association as the information vendor for the purpose of displaying British
Bankers' Association Interest Settlement Rates for deposits in Dollars.
"Event of Default" shall have the meaning provided in Section 10.
"Exchange Rate" shall mean, when converting any amount denominated in a
currency other than Dollars into Dollars, the rate determined in good faith by
DBAG at the opening of business (or close of business in the case of
determinations of reimbursement obligations with respect to Letters of Credit or
Acceptances) in New York, on the date as to which any determination thereof is
to be made, as the spot rate at which such currency is offered for sale to DBAG
against delivery of Dollars by DBAG. If for any reason the Exchange Rate for any
currency cannot be calculated as provided above, DBAG shall calculate the
Exchange Rate on such basis as it deems fair and equitable. In determining the
Stated Amount of any Letter of Credit (A) for purposes of Sections 1.01(a),
1.01(b), 2.01(c) and 4.02(a), the Exchange Rate shall be calculated (x) on the
Effective Date, (y) on the first Business Day of each calendar month thereafter
and (z) on such other day as DBAG may, in its sole discretion, consider
appropriate and (B) for purposes of Section 3.01, the Exchange Rate shall be
calculated on the Effective Date and the first Business Day of each calendar
month thereafter. The Exchange Rate for all reimbursement obligations with
respect to Letters of Credit and Acceptances (including, without limitation,
pursuant to Sections 2.04 and 2.05) shall be determined by using the Exchange
Rate as in effect on the date the respective Unpaid Drawing was paid by such
Issuing Lender.
"Existing Acceptances" shall have the meaning provided in Section 2.01(a).
"Existing Credit Agreement" shall mean the Credit Agreement, dated as of
November 17, 1994, as amended and restated as of December 29, 1995, and further
amended and restated as of September 6, 1996, and further amended and restated
as of June 27, 1997, and further amended and restated as of July 14, 1998, among
the Borrowers, the Banks party thereto from time to time, Credit Lyonnais
Chicago Branch, as Documentation Agent, NationsBank, N.A., as Syndication Agent,
and Bankers Trust Company, as Administrative Agent.
"Existing Letters of Credit" shall have the meaning provided in Section
2.01(a).
"Expiration Date" shall mean (x) with respect to each Letter of Credit, the
final stated expiration date thereof or such earlier date on which such Letter
of Credit was canceled and returned to the Issuing Lender and (y) with respect
to each Acceptance, the date on which such Acceptance matures as provided by the
terms of the draft under the Letter of Credit related thereto.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating interest rate
equal for each day during such period to the weighted average of the rates on
overnight Federal Funds transactions with members of the Federal Reserve System
arranged by Federal Funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal Funds brokers of
recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in Section
3.01.
"First Union" shall mean First Union National Bank in its individual
capacity.
"Fiscal Year" shall mean each fiscal year of Furniture Brands ending on
December 31 of each calendar year.
"Foreign Pension Plan" means any plan, fund (including, without limitation,
any superannuation fund) or other similar program established or maintained
outside the United States by any Borrower or any one or more of their respective
Subsidiaries primarily for the benefit of employees of such Borrower or such
Subsidiary residing outside the United States, which plan, fund or other similar
program provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Sales Corporation" shall mean a Wholly-Owned Foreign Subsidiary of
Furniture Brands and/or its Subsidiaries created for the purpose of effecting
sales of goods and/or services in foreign countries.
"Foreign Subsidiary" shall mean, as to any Person, each Subsidiary of such
Person which is not a Domestic Subsidiary.
"Furniture Brands" shall have the meaning provided in the first paragraph
of this Agreement.
"Furniture Brands Common Stock" shall mean the common stock of Furniture
Brands.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing any level of polychlorinated biphenyls, and radon
gas; (b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, exposure to which is prohibited, limited or
regulated by any governmental authority under Environmental Laws.
"Indebtedness" shall mean, as to any Person, without duplication, (i) all
indebtedness (including principal, interest, fees and charges) of such Person
for borrowed money or for the deferred purchase price of property or services,
(ii) the maximum amount available to be drawn under all letters of credit issued
for the account of such Person and all unpaid drawings in respect of such
letters of credit, (iii) all Indebtedness of the types described in clause (i),
(ii), (iv), (v), (vi) or (vii) of this definition secured by any Lien on any
property owned by such Person, whether or not such Indebtedness has been assumed
by such Person (to the extent of the value of the respective property), (iv) the
aggregate amount required to be capitalized under leases under which such Person
is the lessee, (v) all obligations of such person to pay a specified purchase
price for goods or services, whether or not delivered or accepted, i.e.,
take-or-pay and similar obligations, (vi) all Contingent Obligations of such
Person and (vii) all obligations under any Interest Rate Protection Agreement,
Currency Hedging Agreement or under any similar type of agreement.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Loan, the second Business Day prior to the commencement of any Interest Period
relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement, interest rate floor agreement or other similar agreement or
arrangement.
"Issuing Lender" shall mean DBAG (which for purposes of this definition
also shall include any banking affiliate of DBAG which has agreed to issue
Letters of Credit under this Agreement) and any other Lender which at the
request of the Borrowers and with the consent of the Administrative Agent (which
shall not be unreasonably withheld or delayed) agrees, in such Lender's sole
discretion, to become an Issuing Lender for the purpose of issuing Letters of
Credit pursuant to Section 2. On the Effective Date the sole Issuing Lender is
DBAG.
"Judgment Currency" shall have the meaning provided in Section 13.18.
"Judgment Currency Conversion Date" shall have the meaning provided in
Section 13.18.
"Lane" shall have the meaning provided in the first paragraph of this
Agreement.
"L/C Supportable Obligations" shall mean obligations of Furniture Brands or
its Subsidiaries incurred in the ordinary course of business with respect to
insurance obligations and workers' compensation, surety bonds and other similar
statutory obligations, and all other obligations otherwise permitted to exist
pursuant to the terms of this Agreement, customarily supported by Letters of
Credit and satisfactory to the Administrative Agent.
"Lead Arranger" shall have the meaning provided in the first paragraph of
this Agreement.
"Leaseholds" of any Person means all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Lender" hereunder pursuant to Section 1.13,
1.14 or 13.04(b).
"Lender Default" shall mean (i) the refusal (which has not been retracted)
of a Lender, in violation of this Agreement, to make available its portion of
any Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Lender having notified in
writing the Borrowers and/or the Administrative Agent that it does not intend to
comply with its obligations under Section 1.01 or Section 2 in the case of
either clause (i) or (ii), as a result of any takeover of such bank by any
regulatory authority or agency.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Facing Fee" shall have the meaning provided in Section
3.01(c).
"Letter of Credit Fee" shall have the meaning provided in Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit which have not
terminated and Acceptances which have not matured or been prepaid and (ii) the
amount of all Unpaid Drawings.
"Letter of Credit Request" shall mean any request for the issuance of a
Letter of Credit made by the Borrowers pursuant to Section 2.03(a).
"Letter of Credit Service Agreement" shall have the meaning provided in
Section 2.03(a).
"Leverage Ratio" shall mean on any date the ratio of (i) Consolidated Debt
on such date to (ii) Consolidated EBITDA for the period of four consecutive
fiscal quarters most recently ended on or prior to such date.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), preference, priority or
other security agreement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the UCC or any other
similar recording or notice statute, and any lease having substantially the same
effect as any of the foregoing).
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Mandatory Borrowing" shall have the meaning provided in Section 1.01(c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrowers taken as a whole or the Borrowers and
their Subsidiaries taken as a whole, it being understood that any determination
of whether a Material Adverse Effect has occurred shall take into account, inter
alia, any available indemnities and the timing and likelihood of payments
thereunder.
"Maturity Date" shall mean June 7, 2005.
"Maximum Swingline Amount" shall mean $50,000,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans $1,000,000
and, if greater, in an integral multiple of $500,000; and (ii) for Swingline
Loans, $500,000 and, if greater, in an integral multiple of $100,000.
"Moody's" shall mean Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a multiemployer plan as defined in Section
4001(a)(3) of ERISA, which is maintained or contributed to by (or to which there
is an obligation to contribute of) the Borrowers or a Subsidiary of the
Borrowers or an ERISA Affiliate and each such plan for the five year period
immediately following the latest date on which the Borrowers, any Subsidiaries
of the Borrowers or any ERISA Affiliates maintained, contributed to or had an
obligation to contribute to such plan.
"Non-Defaulting Lender" shall mean and include each Lender other than a
Defaulting Lender.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice Office" shall mean the office of the Administrative Agent located
at 31 West 52nd Street, New York, New York 10019, Attention: Christopher
Dibiase, or such other office as the Administrative Agent may hereafter
designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to any Agent, any Issuing Lender
or any Lender pursuant to the terms of this Agreement or any other Credit
Document.
"Participant" shall have the meaning provided in Section 2.04(a).
"Pay-In-Kind Preferred Stock" means any Preferred Stock where all dividends
with respect thereto may, at the option of the issuer thereof, be paid through
the issuance of additional shares of preferred stock of the same series.
"Payment Office" shall mean the office of the Administrative Agent located
at 31 West 52nd Street, New York, New York 10019, or such other office as the
Administrative Agent may hereafter designate in writing as such to the other
parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Lender at any time shall mean a fraction (expressed as
a percentage) the numerator of which is the Commitment of such Lender at such
time and the denominator of which is the Total Commitment at such time, provided
that if the Percentage of any Lender is to be determined after the Total
Commitment has been terminated, then the Percentages of the Lenders shall be
determined immediately prior (and without giving effect) to such termination.
"Permitted Indebtedness" shall mean any unsecured Indebtedness for borrowed
money incurred by the Borrowers (which may, but shall not be required to be,
guaranteed on an unsecured basis by one or more Guarantors), so long as (i)
based on calculations made by the Borrowers on a Pro Forma Basis after giving
effect to the incurrence of such Indebtedness, no Default or Event of Default
will exist under, or would have existed during the respective Reference Period
under, the financial covenants contained in Sections 9.05 and 9.06 of this
Agreement, (ii) based on good faith projections prepared by the Borrowers for
the period from the date of the incurrence of such Indebtedness to the date
which is one year thereafter, the level of financial performance measured by the
covenants set forth in Sections 9.05 and 9.06 shall be better than or equal to
such level as would be required to provide that no Default or Event of Default
would exist under the financial covenants contained in Sections 9.05 and 9.06 of
this Agreement as compliance with such covenants would be required through the
date which is one year from the date of the incurrence of such Indebtedness,
(iii) Furniture Brands shall furnish to the Administrative Agent for
distribution to each of the Lenders an officer's certificate from the chief
financial officer or treasurer of Furniture Brands certifying to the best of
such officer's knowledge as to compliance with the requirements of the preceding
clauses (i) and (ii) and containing the pro forma calculations required by the
preceding clauses (i) and (ii), (iv) the maturity of such Indebtedness at the
time of the incurrence thereof shall be at least one year beyond the Maturity
Date and (v) such Indebtedness (and any guarantees thereof) shall rank pari
passu or junior to the Obligations hereunder and under the Subsidiaries
Guaranty, as the case may be.
"Permitted Liens" shall have the meaning provided in Section 9.01.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any single-employer plan, as defined in Section 4001 of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of), the Borrowers or a Subsidiary of the Borrowers or
an ERISA Affiliate and each such plan for the five year period immediately
following the latest date on which the Borrowers, a Subsidiary of the Borrowers
or an ERISA Affiliate maintained, contributed or had an obligation to contribute
to such plan.
"Preferred Stock," as applied to the capital stock of any Person, means
capital stock of such Person (other than common stock of such Person) of any
class or classes (however designed) that ranks prior, as to the payment of
dividends or as to the distribution of assets upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person, to shares of capital
stock of any other class of such Person, and shall include any Qualified
Preferred Stock.
"Prime Lending Rate" shall mean the rate which DBAG announces from time to
time as its prime lending rate, the Prime Lending Rate to change when and as
such prime lending rate changes. The Prime Lending Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. DBAG may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, as to any Person, for any of the following
events which occur subsequent to the commencement of a period for which the
financial effect of such event is being calculated, and giving effect to the
event for which such calculation is being made, such calculation as will give
pro forma effect to such event as if same had occurred at the beginning of such
period of calculation, and
(i) for purposes of the foregoing calculation, the transaction giving
rise to the need to calculate the pro forma effect to any of the following
events shall be assumed to have occurred on the first day of the four
fiscal quarter period last ended before the occurrence of the respective
event for which such pro forma effect is being determined (the "Reference
Period"), and
(ii) in making any determination with respect to the incurrence or
assumption of any Indebtedness during the Reference Period or subsequent to
the Reference Period and on or prior to the date of the transaction
referenced in clause (i) above (the "Transaction Date"), all Indebtedness
(including the Indebtedness incurred or assumed and for which the financial
effect is being calculated) incurred or permanently repaid during the
Reference Period shall be deemed to have been incurred or repaid at the
beginning of such period, and
(iii) in making any determination of Consolidated EBITDA on a Pro
Forma Basis, pro forma effect shall be given to any Significant Acquisition
or Significant Divestiture which occurred during the Reference Period, with
such Consolidated EBITDA to be determined as if such Significant
Acquisition or Significant Divestiture occurred on the first day of the
Reference Period, taking into account cost savings and expenses which would
otherwise be accounted for as an adjustment pursuant to Article 11 of
Regulation S-X under the Securities Act, as if such cost savings or
expenses were realized on the first day of the Reference Period.
"Qualified Preferred Stock" means any Pay-In-Kind Preferred Stock of
Furniture Brands, or any other Preferred Stock of Furniture Brands, the express
terms of which shall provide that dividends thereon shall not be required to be
paid in cash at any time that such cash payment would be prohibited by the terms
of this Agreement or result in a Default or Event of Default hereunder, and in
either case which, by its terms (or by the terms of any security into which it
is convertible or for which it is exchangeable), or upon the happening of any
event (including an event which would constitute a Change of Control), cannot
mature (excluding any maturity as the result of an optional redemption by the
issuer thereof) and is not mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, and is not redeemable, or required to be repurchased,
at the sole option of the holder thereof (including, without limitation, upon
the occurrence of an event which would constitute a Change of Control), in whole
or in part, on or prior to the first anniversary of the Maturity Date.
"Quarterly Payment Date" shall mean the last Business Day of each June,
September, December and March, occurring after the Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the same
may be amended from time to time, 42 U.S.C.ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and interest
of such Person in and to land, improvements and fixtures, including Leaseholds.
"Reference Period" shall have the meaning provided in the definition of
"Pro Forma Basis" appearing in this Section 11.01.
"Register" shall have the meaning provided in Section 13.17.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of
ERISA with respect to a Plan other than those events as to which the 30-day
notice period is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC
Regulation Section 2615.
"Required Lenders" shall mean Non-Defaulting Lenders, the sum of whose
outstanding Commitments (or after the termination thereof, outstanding Revolving
Loans and Percentage of Swingline Loans and Letter of Credit Outstandings)
represent greater than 50% of the Total Commitment less the Revolving Loan
Commitments of all Defaulting Lenders (or after the termination thereof, the sum
of the then total outstanding Revolving Loans of Non-Defaulting Lenders and the
aggregate Percentages of all Non-Defaulting Lenders of the total outstanding
Swingline Loans and Letter of Credit Outstandings at such time).
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(a).
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"S&P" shall mean Standard & Poor's Rating Services.
"SEC" shall have the meaning provided in Section 8.01(e).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b)(ii).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Significant Acquisition" shall mean any acquisition by Furniture Brands or
any of its Subsidiaries of another Person (not already a Borrower or a
Subsidiary thereof), or the assets constituting a business, division or product
line of any such Person, the fair market value (determined in good faith by
Furniture Brands) of which exceeds $10,000,000 for any such transaction (or
series of related transactions).
"Significant Divestiture" shall mean any sale or other disposition of
assets by Furniture Brands or any of its Subsidiaries to any other Person (not
already a Borrower or a Subsidiary thereof), the fair market value (determined
in good faith by Furniture Brands) of which exceeds $10,000,000 for any such
transaction (or series of related transactions).
"Stated Amount" of (x) each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met); provided that
the "Stated Amount" of each Letter of Credit denominated in an Alternate
Currency shall be, on any date of calculation, the Dollar Equivalent of the
maximum amount available to be drawn in such Alternate Currency thereunder
(determined without regard to whether any conditions to drawing could then be
met) and (y) each Acceptance shall mean the amount of each such Acceptance;
provided that the "Stated Amount" of any Acceptance denominated in an Alternate
Currency shall be, on any date of calculation, the Dollar Equivalent thereof.
"Subsidiaries Guaranty" shall have the meaning provided in Section 5.06.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Wholly-Owned Domestic Subsidiary of
Furniture Brands.
"Supermajority Lenders" shall mean those Non-Defaulting Lenders which would
constitute the Required Lenders under, and as defined in, this Agreement if the
percentage "50%" contained therein were changed to "66-2/3%".
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the Maturity Date.
"Swingline Lender" shall mean DBAG.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall have the meaning provided in the first paragraph
of this Agreement.
"Syndication Date" shall mean that date upon which the Administrative Agent
determines in its sole discretion (and notifies the Borrower) that the primary
syndication (and resultant addition of Persons as Lenders pursuant to Section
13.04(b)) has been completed.
"Tax Sharing Agreement" shall mean that certain tax sharing agreement
entered into among the Borrowers and certain other Persons, and previously
delivered to the Administrative Agent.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Thomasville" shall have the meaning provided in the first paragraph of
this Agreement.
"Total Commitment" shall mean, at any time, the sum of the Commitments of
each of the Lenders.
"Total Unutilized Commitment" shall mean, at any time, an amount equal to
the remainder of (i) the then Total Commitment, less (ii) the sum of the
aggregate principal amount of Revolving Loans and Swingline Loans outstanding
plus the then aggregate amount of Letter of Credit Outstandings.
"Type" shall mean the type of Loan determined with regard to the interest
option applicable thereto, i.e., whether a Base Rate Loan or a Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in effect
in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by which
the actuarial present value of the accumulated benefits under the Plan as of the
close of its most recent plan year each exceeds the fair market value of the
assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 87, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
"United States" and "U.S." shall each mean the United States of America.
"Unpaid Drawing" shall have the meaning provided for in Section 2.05(a).
"Unutilized Commitment" with respect to any Lender, at any time, shall mean
such Lender's Commitment at such time less the sum of (i) the aggregate
outstanding principal amount of Revolving Loans made by such Lender and (ii)
such Lender's Percentage of the Letter of Credit Outstandings at such time.
"Voting Stock" shall mean, as to any Person, any class or classes of
capital stock of such Person pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority
of the Board of Directors of such Person.
"Wholly-Owned Domestic Subsidiary" of any Person shall mean each
Wholly-Owned Subsidiary of such Person which is also a Domestic Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any corporation
100% of whose capital stock (other than director's qualifying shares) is at the
time owned by such Person and/or one or more Wholly-Owned Subsidiaries of such
Person and (ii) any partnership, association, joint venture or other entity in
which such Person and/or one or more Wholly-Owned Subsidiaries of such Person
has a 100% equity interest at such time.
SECTION 12. The Agents.
12.01 Appointment. The Lenders hereby designate DBAG as Administrative
Agent, First Union as Documentation Agent, Bank of America as Syndication Agent
and Deutsche Bank Securities Inc., as Lead Arranger, in each case to act as
specified herein and in the other Credit Documents. Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, each Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of such Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. Each Agent
may perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.
12.02 Nature of Duties. No Agent shall have any duties or responsibilities
except those expressly set forth in this Agreement and in the other Credit
Documents. No Agent nor any of its officers, directors, agents, employees or
affiliates shall be liable for any action taken or omitted by it or them
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their gross negligence or willful misconduct.
The duties of each Agent shall be mechanical and administrative in nature; no
Agent shall have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Lender or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon any Agent any obligations
in respect of this Agreement or any other Credit Document except as expressly
set forth herein or therein.
12.03 Lack of Reliance on the Agents. Independently and without reliance
upon any Agent, each Lender and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of Furniture Brands and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of Furniture Brands and its Subsidiaries and,
except as expressly provided in this Agreement, no Agent shall have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. No Agent nor any of its affiliates or any of its
officers, directors, agents, or employees shall be responsible to any Lender or
the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of Furniture Brands and its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of Furniture Brands and its Subsidiaries or the existence or
possible existence of any Default or Event of Default.
12.04 Certain Rights of the Agents. If any Agent shall request instructions
from the Required Lenders with respect to any act or action (including failure
to act) in connection with this Agreement or any other Credit Document, such
Agent shall be entitled to refrain from such act or taking such action unless
and until such Agent shall have received instructions from the Required Lenders;
and such Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender or holder of any Note
shall have any right of action whatsoever against any Agent as a result of such
Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Lenders.
12.05 Reliance. Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by any Person that
such Agent believed to be the proper Person, and, with respect to all legal
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by such Agent
(which may be counsel for the Credit Parties).
12.06 Indemnification. To the extent any Agent is not reimbursed and
indemnified by the Borrowers, the Lenders will reimburse and indemnify such
Agent, in proportion to their respective "percentages" as used in determining
the Required Lenders (determined as if there were no Defaulting Lenders), for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever kind
or nature which may be imposed on, asserted against or incurred by such Agent in
performing its duties hereunder or under any other Credit Document, in any way
relating to or arising out of this Agreement or any other Credit Document;
provided that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from such Agent's gross negligence or
willful misconduct (as determined by a court of competent jurisdiction in a
final and non-appealable decision).
12.07 The Agent in its Individual Capacity. With respect to its obligation
to make Loans and participate in Letters of Credit under this Agreement, each
Agent shall have the rights and powers specified herein for a "Lender" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Lenders," "Required Lenders," "Supermajority
Lenders," "holders of Notes" or any similar terms shall, unless the context
clearly otherwise indicates, include such Agent in its individual capacity. Each
Agent may accept deposits from, lend money to, and generally engage in any kind
of banking, trust or other business with any Credit Party or any Affiliate of
any Credit Party as if they were not performing the duties specified herein, and
may accept fees and other consideration from the Borrowers or any other Credit
Party for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.
12.08 Holders. The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or endorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Agents. (a) The Administrative Agent may resign
from the performance of all its functions and duties hereunder and/or under the
other Credit Documents at any time by giving 15 Business Days' prior written
notice to the Borrowers and the Lenders. Such resignation shall take effect upon
the appointment of a successor Administrative Agent pursuant to clauses (b) and
(c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall appoint
a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrowers.
(c) If a successor Administrative Agent shall not have been so appointed
within such 15 Business Day period, the Administrative Agent, with the consent
of the Borrowers, shall then appoint a commercial bank or trust company with
capital and surplus of not less than $500 million as successor Administrative
Agent who shall serve as Administrative Agent hereunder or thereunder until such
time, if any, as the Required Lenders appoint a successor Administrative Agent
as provided above.
(d) If no successor Administrative Agent has been appointed pursuant to
clause (b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Lenders shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any other Credit
Document until such time, if any, as the Required Lenders appoint a successor
Administrative Agent as provided above.
(e) Each of the Syndication Agent, the Documentation Agent and the Lead
Arranger may resign at any time by giving five Business Days' prior written
notice to the Borrowers, the Administrative Agent and the Lenders. Such
resignation shall be effective five days after such notice.
12.10 Documentation Agent, Syndication Agent and Arranger. Notwithstanding
anything to the contrary contained herein, nothing in this Agreement shall
impose on the Documentation Agent, the Syndication Agent or the Arranger, in
each case in such capacity, any duties or obligations.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrowers jointly and severally shall:
(i) whether or not the transactions herein contemplated are consummated, pay all
reasonable out-of-pocket costs and expenses of each Agent (including, without
limitation, the reasonable fees and disbursements of White & Case LLP) in
connection with the preparation, execution and delivery of this Agreement and
the other Credit Documents and the documents and instruments referred to herein
and therein and any amendment, waiver or consent relating hereto or thereto, of
each Agent in connection with its syndication efforts with respect to this
Agreement and of each Agent and, following and during the continuation of an
Event of Default, each of the Lenders in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the reasonable
fees and disbursements of counsel for each Agent and, following and during the
continuation of an Event of Default, for each of the Lenders); (ii) pay and hold
each of the Lenders harmless from and against any and all present and future
stamp, excise and other similar taxes with respect to the foregoing matters and
hold each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and (iii) indemnify each Agent
and each Lender (including in its capacity as an Issuing Lender), and each of
their respective officers, directors, employees, representatives, affiliates and
agents from and hold each of them harmless against any and all liabilities,
obligations (including removal or remedial actions), losses, damages, penalties,
claims, actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants' fees and disbursements) incurred by,
imposed on or assessed against any of them as a result of, or arising out of, or
in any way related to, or by reason of, (a) any investigation, litigation or
other proceeding (whether or not any Agent or any Lender is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder or the consummation of any transactions contemplated herein or in any
other Credit Document or the exercise of any of their rights or remedies
provided herein or in the other Credit Documents, or (b) the actual or alleged
presence of Hazardous Materials in the air, surface water or groundwater or on
the surface or subsurface of any Real Property owned or at any time operated by
Furniture Brands or any of its Subsidiaries, the generation, storage,
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned or operated by Furniture Brands or any of its Subsidiaries,
the non-compliance of any Real Property with foreign, federal, state and local
laws, regulations, and ordinances (including applicable permits thereunder)
applicable to any Real Property, or any Environmental Claim asserted against
Furniture Brands, any of its Subsidiaries, or any Real Property owned or at any
time operated by Furniture Brands or any of its Subsidiaries, including, in each
case, without limitation, the reasonable fees and disbursements of counsel and
other consultants incurred in connection with any such investigation, litigation
or other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified (as determined by a court of
competent jurisdiction in a final and non-appealable decision)). To the extent
that the undertaking to indemnify, pay or hold harmless any Agent or any Lender
set forth in the preceding sentence may be unenforceable because it is violative
of any law or public policy, the Borrowers shall make the maximum contribution
to the payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
each Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the Borrowers or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special) and any other
Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of any Credit Party against and on account of the
Obligations and liabilities of all Credit Parties to such Lender under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Lender pursuant to
Section 13.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to the Borrowers, at the Borrowers'
address specified opposite their signature below; if to any other Credit Party,
at such Credit Party's address set forth in any Credit Document; if to any
Lender, at its address specified on Schedule II below; and if to the
Administrative Agent, at the Notice Office; or, as to any Credit Party or the
Administrative Agent, at such other address as shall be designated by such party
in a written notice to the other parties hereto and, as to each Lender, at such
other address as shall be designated by such Lender in a written notice to the
Borrowers and the Administrative Agent. All such notices and communications
shall, when mailed, telegraphed, telexed, telecopied, or cabled or sent by
overnight courier, be effective when deposited in the mails, delivered to the
telegraph company, cable company or overnight courier, as the case may be, or
sent by telex or telecopier, except that notices and communications to the
Administrative Agent and the Borrowers shall not be effective until received by
the Administrative Agent or the Borrowers, as the case may be.
13.04 Benefit of Agreement. (a) This Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, no Borrower may assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of all of the Lenders and,
provided further, that although any Lender may transfer, assign or grant
participations in its rights hereunder, such Lender shall remain a "Lender" for
all purposes hereunder (and may not transfer or assign all or any portion of its
Commitment hereunder except as provided in Section 13.04(b)) and the transferee,
assignee or participant, as the case may be, shall not constitute a "Lender"
hereunder and, provided further, that no Lender shall transfer or grant any
participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Revolving Loan or Note or extend the expiry date of any Letter
of Credit beyond the Maturity Date, or reduce the rate or extend the time of
payment of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that
waivers or modifications of conditions precedent, covenants, Defaults or Events
of Default or of a mandatory reduction in the Total Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment shall be permitted without the consent of any participant if the
participant's participation is not increased as a result thereof) or (ii)
consent to the assignment or transfer by the Borrowers of any of their rights
and obligations under this Agreement. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrowers hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together with
one or more other Lenders) may (x) assign all or a portion of its Commitment and
related outstanding Obligations hereunder (or, if the Commitments have
terminated, its outstanding Obligations) to (i) its parent company and/or any
affiliate of such Lender which is at least 50% owned by such Lender or its
parent company or to one or more other Lenders or (ii) in the case of any Lender
that is a fund that invests in bank loans, any other fund that invests in bank
loans and is managed by the same investment advisor of such Lender or by an
Affiliate of such investment advisor or (y) after providing at least two
Business Days' prior notice to (but without requiring the consent of) Furniture
Brands (except that no such notice shall be required if any Default or Event of
Default then exists pursuant to Section 10.05), assign all, or if less than all,
a portion equal to at least $5,000,000 in the aggregate for the assigning Lender
or assigning Lenders, of such Commitments and related outstanding Obligations
hereunder (or, if the Commitments have terminated, its outstanding Obligations)
to one or more Eligible Transferees, each of which assignees shall become a
party to this Agreement as a Lender by execution of an Assignment and Assumption
Agreement, provided that, (i) at such time Schedule I shall be deemed modified
to reflect the Commitment of such new Lender and of the existing Lenders, (ii)
at the request of the assignee Lender, and upon surrender of the respective old
Revolving Notes (if theretofore issued) or the provision of a typical lost note
indemnification agreement (in respect of the respective Revolving Note, if
theretofore issued and subsequently lost or misplaced) from the assignor or
assignee Lender, new Revolving Notes will be issued, at the Borrowers' expense,
to such new Lender and to the assigning Lender, such new Revolving Notes to be
in conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments, (iii)
the consent of the Administrative Agent and any Issuing Lender shall be required
in connection with any such assignment pursuant to clause (y) above, and (iv)
the Administrative Agent shall receive at the time of each such assignment
(other than in connection with an assignment by a Lender to its parent company
and/or an affiliate of such Lender), from the assigning or assignee Lender, the
payment of a non-refundable fee of $3,500 and, provided further, that such
transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 13.17 hereof. To the
extent of any assignment pursuant to this Section 13.04(b), the assigning Lender
shall be relieved of its obligations hereunder with respect to its assigned
Commitments. At the time of each assignment pursuant to this Section 13.04(b) to
a Person which is not already a Lender hereunder and which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
Federal income tax purposes, the respective assignee Lender shall provide to the
Borrowers and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a Section 4.04(b)(ii) Certificate) described in
Section 4.04(b). To the extent that an assignment of all or any portion of a
Lender's Commitments and related outstanding Obligations pursuant to Section
1.13 or this Section 13.04(b) would, at the time of such assignment, result in
increased costs under Section 1.10, 1.11 or 4.04 greater than those being
charged by the respective assigning Lender prior to such assignment, then the
Borrowers shall not be obligated to pay such greater increased costs (although
the Borrowers shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank and, with the
consent of the Administrative Agent, any Lender which is a fund may pledge all
or any portion of its Notes or Loans to its trustee in support of its
obligations to its trustee. No pledge pursuant to this clause (c) shall release
the transferor Lender from any of its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
any Agent or any Lender or any holder of any Note in exercising any right, power
or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrowers or any other Credit Party and any Agent or any
Lender or the holder of any Note shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, power or privilege hereunder or
under any other Credit Document preclude any other or further exercise thereof
or the exercise of any other right, power or privilege hereunder or thereunder.
The rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which any Agent or any Lender or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of any Agent or any Lender or the holder of
any Note to any other or further action in any circumstances without notice or
demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrowers in respect of any Obligations
hereunder, it shall distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its pro rata share of any such
payment) pro rata based upon their respective shares, if any, of the Obligations
with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or other Fees, of a sum
which with respect to the related sum or sums received by other Lenders is in a
greater proportion than the total of such Obligation then owed and due to such
Lender bears to the total of such Obligation then owed and due to all of the
Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Credit Party to
such Lenders in such amount as shall result in a proportional participation by
all the Lenders in such amount; provided that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
13.07 Calculations; Computations. (a) The financial statements to be
furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with generally accepted accounting principles in the United States
(or the equivalent thereof in any country in which a Foreign Sales Corporation
is doing business, as applicable) consistently applied throughout the periods
involved, provided that, except as otherwise specifically provided herein, all
computations determining compliance with Sections 9.02 through 9.06, inclusive,
shall utilize accounting principles and policies in conformity with those used
to prepare the historical financial statements delivered to the Lenders pursuant
to Sections 7.05(a).
(b) All computations of interest and other Fees hereunder shall be made on
the basis of a year of 360 days (or 365/366 days in the case of interest on Base
Rate Loans and Commitment Commission) for the actual number of days (including
the first day but excluding the last day) occurring in the period for which such
interest or other Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, IN EACH CASE WHICH ARE LOCATED IN THE
CITY OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
BORROWERS HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF
THE BORROWERS HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS
LACK PERSONAL JURISDICTION OVER IT, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENTS BROUGHT IN ANY OF THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK
PERSONAL JURISDICTION OVER IT. EACH OF THE BORROWERS FURTHER IRREVOCABLY CONSENT
TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE BORROWERS AT THEIR ADDRESS SET FORTH OPPOSITE
THEIR SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT UNDER
THIS AGREEMENT, ANY LENDER OR THE HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE
PROCEED AGAINST ANY BORROWER IN ANY OTHER JURISDICTION.
(b) EACH OF THE BORROWERS HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrowers and the
Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the date (the
"Effective Date") on which (i) each Borrower, each Lender, each Agent and the
Lead Arranger shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered (including by way of facsimile
device) the same to the Administrative Agent at the Notice Office or, in the
case of the Lenders, shall have given the Administrative Agent telephonic
(confirmed in writing), written or telex notice (actually received) at such
office that same has been signed and mailed to it and (ii) the conditions
contained in Section 5 are met to the satisfaction of the Agents and the
Required Lenders. Unless the Administrative Agent has received actual notice
from any Lender that the conditions contained in Section 5 have not been met to
its reasonable satisfaction, upon the satisfaction of the condition described in
clause (i) of the immediately preceding sentence and upon the Administrative
Agent's good faith determination that the conditions described in clause (ii) of
the immediately preceding sentence have been met, then the Effective Date shall
have been deemed to have occurred, regardless of any subsequent determination
that one or more of the conditions thereto had not been met (although the
occurrence of the Effective Date shall not release any Borrower from any
liability for failure to satisfy one or more of the applicable conditions
contained in Section 5). The Administrative Agent will give the Borrowers and
each Lender prompt written notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Lenders, provided that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender) (with
Obligations being directly affected thereby in the case of following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note, or extend the
stated maturity of, or any reimbursement obligation under, any Letter of Credit
beyond the Maturity Date, or reduce the rate or extend the time of payment of
interest or Fees, or reduce the principal amount thereof (except to the extent
repaid in cash), or reduce any reimbursement obligations under any Letter of
Credit, (ii) release all or substantially all of the Subsidiary Guarantors from
the Subsidiaries Guaranty (except in connection with a sale of such Subsidiary
Guarantor in accordance with the terms of this Agreement), (iii) amend, modify
or waive any provision of this Section 13.12 (except for technical amendments
with respect to additional extensions of credit under this Agreement of the type
which afford the protections to such additional extensions of credit provided to
the Commitments on the Effective Date), (iv) reduce the percentage specified in
the definition of Required Lenders (it being understood that, with the consent
of the Required Lenders, additional extensions of credit pursuant to this
Agreement may be included in the determination of the Required Lenders on
substantially the same basis as the extensions of Commitments are included on
the Effective Date) or (v) consent to the assignment or transfer by any Borrower
of any of its rights and obligations under this Agreement, except mergers and/or
consolidations involving one or more Borrowers and another Person (not already a
Borrower or a Subsidiary thereof) shall be permitted with the prior written
consent of the Required Lenders, provided that the survivor of such merger or
consolidation (to the extent not a Borrower) is organized under the laws of the
United States or a State thereof and executes and delivers to the Administrative
Agent agreements in form and substance satisfactory to the Agents and providing
for the assumption by such Person of the obligations of the respective Borrower
or Borrowers under this Agreement and the Notes; provided further, that no such
change, waiver, discharge or termination shall (1) increase the Commitment of
any Lender over the amount thereof then in effect without the consent of such
Lender (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the Total Commitments shall not constitute an increase of the Commitment of
any Lender, and that an increase in the available portion of any Commitment of
any Lender shall not constitute an increase in the Commitment of such Lender),
(2) without the consent of the Supermajority Lenders, decrease the percentage
set forth in Section 9.07 (as in effect on the Effective Date) or amend the
definition of Supermajority Lenders (it being understood that, pursuant to
Section 1.14 or with the consent of the Required Lenders, as the case may be,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Supermajority Lenders on substantially the same basis
as Revolving Loan Commitments are included on the Effective Date) without the
consent of the Supermajority Lenders, (3) without the consent of the respective
Issuing Lender or Issuing Lenders, amend, modify or waive any provision of
Section 2 with respect to Letters of Credit issued by it (or Acceptances created
thereunder) or alter its rights or obligations with respect to Letters of Credit
or Acceptances, (4) without the consent of the Swingline Lender, amend, modify
or waive any provision of Sections 1.01(b) and (c) or alter its rights and
obligations with respect to Swingline Loans or (5) without the consent of each
Agent affected thereby, amend, modify or waive any provision of Section 12 as
same applies to such Agent or any other provision as same relates to the rights
or obligations of such Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clauses (i) through (v), inclusive, of the first proviso to Section 13.12(a),
the consent of the Required Lenders is obtained but the consent of one or more
of such other Lenders whose consent is required is not obtained, then the
Borrowers shall have the right, so long as all non-consenting Lenders whose
individual consent is required are treated as described in either clauses (A) or
(B) below, to either (A) replace each such non-consenting Lender or Lenders with
one or more Replacement Lenders pursuant to Section 1.13 so long as at the time
of such replacement, each such Replacement Lender consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Lender's Commitment in accordance with Sections 3.02(b) and/or 4.01(b), provided
that, unless the Commitments are terminated, and Loans repaid, pursuant to the
preceding clause (B) are immediately replaced in full at such time through the
addition of new Lenders or the increase of the Commitments and/or outstanding
Loans of existing Lenders (who in each case must specifically consent thereto),
then in the case of any action pursuant to preceding clause (B) the Required
Lenders (determined before giving effect to the proposed action) shall
specifically consent thereto, provided further, that in any event the Borrowers
shall not have the right to replace a Lender, terminate its Commitment or repay
its Loans solely as a result of the exercise of such Lender's rights (and the
withholding of any required consent by such Lender) pursuant to the second
proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 13.01 and 13.06 shall, subject
to Section 13.15 (to the extent applicable), survive the execution, delivery and
termination of this Agreement and the Notes and the making and repayment of the
Loans.
13.14 Domicile of Loans. Each Lender may transfer and carry its Loans at,
to or for the account of any office, Subsidiary or Affiliate of such Lender.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Lender prior to such transfer, then the
Borrowers shall not be obligated to pay such increased costs (although the
Borrowers shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Limitation on Additional Amounts, etc. Notwithstanding anything to
the contrary contained in Sections 1.10, 1.11, 2.06 or 4.04 of this Agreement,
unless a Lender gives notice to the Borrowers that it is obligated to pay an
amount under any such Section within one year after the later of (x) the date
the Lender incurs the respective increased costs, Taxes, loss, expense or
liability, reduction in amounts received or receivable or reduction in return on
capital or (y) the date such Lender has actual knowledge of its incurrence of
the respective increased costs, Taxes, loss, expense or liability, reductions in
amounts received or receivable or reduction in return on capital, then such
Lender shall only be entitled to be compensated for such amount jointly and
severally by the Borrowers pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as
the case may be, to the extent the costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital
are incurred or suffered on or after the date which occurs one year prior to
such Lender giving notice to the Borrowers that it is obligated to pay the
respective amounts pursuant to said Section 1.10, 1.11, 2.06 or 4.04, as the
case may be. This Section 13.15 shall have no applicability to any Section of
this Agreement other than said Sections 1.10, 1.11, 2.06 and 4.04.
13.16 Confidentiality. (a) Subject to the provisions of clause (b) of this
Section 13.16, each Lender agrees that it will use its best efforts not to
disclose without the prior consent of the Borrowers (other than to its
employees, auditors, advisors or counsel or to another Lender if the Lender or
such Lender's holding or parent company in its sole discretion determines that
any such party should have access to such information, provided such Persons
shall be subject to the provisions of this Section 13.16 to the same extent as
such Lender) any information with respect to Furniture Brands or any of its
Subsidiaries which is now or in the future furnished pursuant to this Agreement
or any other Credit Document and which is designated by Furniture Brands to the
Lenders in writing as confidential, provided that any Lender may disclose any
such information (a) as has become generally available to the public, (b) as may
be required or appropriate in any report, statement or testimony submitted to
any municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (c) as may be required or appropriate
in respect to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to such
Lender, (e) to any Agent, (f) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of any
of the Notes or Commitments or any interest therein by such Lender, provided,
that such prospective transferee agrees to maintain the confidentiality
contained in this Section and (g) to the National Association of Insurance
Commissioners or any similar organization or any nationally recognized rating
agency that requires access to information about such Lender's investment
portfolio in connection with ratings issued to such Lender.
(b) Each of the Borrowers hereby acknowledges and agrees that each Lender
may share with any of its Affiliates any information related to Furniture Brands
or any of its Subsidiaries (including, without limitation, any nonpublic
customer information regarding the creditworthiness of Furniture Brands and its
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 13.16 to the same extent as such Lender.
13.17 Register. The Borrowers hereby designate the Administrative Agent to
serve as the Borrowers' agent, solely for purposes of this Section 13.17, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lender. Failure to make any such recordation, or any error in such recordation
shall not affect the Borrowers' obligations in respect of such Loans. With
respect to any Lender, the transfer of the Commitments of such Lender and the
rights to the principal of, and interest on, any Revolving Loan made pursuant to
such Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to ownership of
such Commitments and Revolving Loans and prior to such recordation all amounts
owing to the transferor with respect to such Commitments and Revolving Loans
shall remain owing to the transferor. The registration of assignment or transfer
of all or part of any Commitments and Revolving Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Administrative Agent for
acceptance and registration of assignment or transfer of all or part of a
Revolving Loan, or as soon thereafter as practicable, the assigning or
transferor Lender shall surrender the Note evidencing such Revolving Loan, and
thereupon one or more new Revolving Notes in the same aggregate principal amount
shall be issued to the assigning or transferor Lender and/or the new Lender. The
Borrowers jointly and severally agree to indemnify the Administrative Agent from
and against any and all losses, claims, damages and liabilities of whatsoever
nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.17, provided
that the Borrowers shall have no obligation to indemnify the Administrative
Agent for any loss, claim, damage, liability or expense which resulted primarily
from the gross negligence or willful misconduct of the Administrative Agent (as
determined by a court of competent jurisdiction in a final and non-appealable
decision).
13.18 Judgment Currency. (a) The Credit Parties' obligations hereunder and
under the other Credit Documents to make payments in Dollars shall not be
discharged or satisfied by any tender or recovery pursuant to any judgment
expressed in or converted into any currency other than Dollars, except to the
extent that such tender or recovery results in the effective receipt by the
Administrative Agent or the respective Lender of the full amount of Dollars
expressed to be payable to the Administrative Agent or such Lender under this
Agreement or the other Credit Documents. If for the purpose of obtaining or
enforcing judgment against any Credit Party in any court or in any jurisdiction,
it becomes necessary to convert into or from any currency other than Dollars
(such other currency being hereinafter referred to as the "Judgment Currency")
an amount due in Dollars, the conversion shall be made, at the Dollar Equivalent
thereof determined, in each case, on the day on which the judgment is given
(such Business Day being hereinafter referred to as the "Judgment Currency
Conversion Date").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Borrowers jointly and severally covenant and agree to pay, or cause to
be paid, such additional amounts, if any (but in any event not a lesser amount)
as may be necessary to ensure that the amount paid in the Judgment Currency,
when converted at the rate of exchange prevailing on the date of payment, will
produce the amount of Dollars which could have been purchased with the amount of
Judgment Currency stipulated in the judgment or judicial award at the rate or
exchange prevailing on the Judgment Currency Conversion Date.
(c) For purposes of determining the Dollar Equivalent or any other rate of
exchange for this Section, such amounts shall include any premium and costs
payable in connection with the purchase of Dollars.
SECTION 14. Nature of Borrowers' Obligations.
14.01 Nature of Obligations. Notwithstanding anything to the contrary
contained elsewhere in this Agreement, it is understood and agreed by the
various parties to this Agreement that all Obligations to repay principal of,
interest on, and all other amounts with respect to, all Revolving Loans,
Swingline Loans and Letter of Credit Outstandings and all other Obligations
pursuant to this Agreement and under any Note (including, without limitation,
all fees, indemnities, taxes and other Obligations in connection therewith or in
connection with the related Commitments) shall constitute the joint and several
obligations of Furniture Brands, Broyhill, Lane and Thomasville. In addition to
the direct (and joint and several) obligations of the Borrowers with respect to
Obligations as described above, all such Obligations shall be guaranteed
pursuant to, and in accordance with the terms of, the Subsidiaries Guaranty.
14.02 Independent Obligation. The obligations of each Borrower with respect
to the Obligations are independent of the obligations of the other Borrower or
any guarantor, and a separate action or actions may be brought and prosecuted
against each Borrower, whether or not any other Borrower or any guarantor is
joined in any such action or actions. Each Borrower waives, to the fullest
extent permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by any Borrower or
other circumstance which operates to toll any statute of limitations as to any
Borrower shall, to the fullest extent permitted by law, operate to toll the
statute of limitations as to each Borrower.
14.03 Authorization. Each of the Borrowers authorizes the Administrative
Agent and the Lenders without notice or demand (except as shall be required by
applicable statute and cannot be waived), and without affecting or impairing its
liability hereunder, from time to time to:
(a) exercise or refrain from exercising any rights against any other
Borrower or any guarantor or others or otherwise act or refrain from
acting;
(b) release or substitute any other Borrower, endorsers, guarantors or
other obligors;
(c) settle or compromise any of the Obligations of any other Borrower
or any other Credit Party, any security therefor or any liability
(including any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and may subordinate the payment of all or any
part thereof to the payment of any liability (whether due or not) of any
Borrower to its creditors other than the Lenders;
(d) apply any sums paid by any other Borrower or any other Person,
howsoever realized to any liability or liabilities of such other Borrower
or other Person regardless of what liability or liabilities of such other
Borrower or other Person remain unpaid; and/or
(e) consent to or waive any breach of, or act, omission or default
under, this Agreement or any of the instruments or agreements referred to
herein, or otherwise, by any other Borrower or any other Person.
14.04 Reliance. It is not necessary for the Administrative Agent or any
other Lender to inquire into the capacity or powers of any Borrower or any of
its Subsidiaries or the officers, directors, members, partners or agents acting
or purporting to act on its behalf, and any Obligations made or created in
reliance upon the professed exercise of such powers shall constitute the joint
and several obligations of the Borrowers hereunder.
14.05 Contribution; Subrogation. No Borrower shall have any rights of
contribution or subrogation with respect to any other Borrower as a result of
payments made by it hereunder, in each case unless and until the Total
Commitment has been terminated and all Obligations have been paid in full.
14.06 Waiver. Each Borrower waives any right to require the Administrative
Agent or the other Lenders to (i) proceed against any other Borrower, any
guarantor or any other party, (ii) proceed against or exhaust any security held
from any Borrower, any guarantor or any other party or (iii) pursue any other
remedy in the Administrative Agent's or the Lenders' power whatsoever. Each
Borrower waives any defense based on or arising out of suretyship or any
impairment of security held from any Borrower, any guarantor or any other party
or on or arising out of any defense of any other Borrower, any guarantor or any
other party other than payment in full in cash of the Obligations, including,
without limitation, any defense based on or arising out of the disability of any
other Borrower, any guarantor or any other party, or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of any other Borrower, in each case other than as a result of
the payment in full in cash of the Obligations.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
Address:
--------
c/o Furniture Brands International, Inc. FURNITURE BRANDS INTERNATIONAL, INC.
101 South Hanley Road BROYHILL FURNITURE INDUSTRIES, INC.
St. Louis, MO 63105 LANE FURNITURE INDUSTRIES, INC.
Tel: (314) 863-1100 THOMASVILLE FURNITURE INDUSTRIES, INC.
Fax: (314) 863-5306
Attention: David P. Howard
Vice President, Treasurer
and Chief Financial Officer
By /s/ David Howard
-------------------
Title: Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH,
as Administrative Agent
By:/s/ Alexander Karow
----------------------
Title: Vice President
By:/s/ Mathias Pulster
----------------------
Title: Vice President
BANK OF AMERICA, N.A., Individually
and as Syndication Agent
By:/s/ Gretchen Spoo
--------------------
Title: Vice President
FIRST UNION NATIONAL BANK,
Individually and as Documentation
Agent
By:/s/ Stephen R. B. Rixham
---------------------------
Title: Assistant Vice President
DEUTSCHE BANK SECURITIES INC.,
as Lead Arranger
By:/s/ Alexander Karow
----------------------
Title: Vice President
By:/s/ Thoams A. Foley
----------------------
Title: Vice President
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By:/s/ Alexander Karow
----------------------
Title: Vice President
By:/s/ Mathias Pulster
----------------------
Title: Vice President
Banca Nazionale Del Lavoro S.P.A. -
New York Branch
By:/s/ Giulio Giovine
---------------------
Title: Vice President
By:/s/ Leonardo Valentini
-------------------------
Title: First Vice President
Allied Irish Banks PLC.,
New York Branch
By:/s/ William J. Strickland
----------------------------
Title: Executive Vice President
By:/s/ Germaine Reusch
----------------------
Title: Vice President
Bank Austria Creditanstalt Corporate
Finance, Inc.
By:/s/ John T. Murphy
---------------------
Title: Senior Vice President
By:/s/ Diane B. Vaccaro
-----------------------
Title: Vice President
The Bank of New York
By:/s/ David Shedd
------------------
Title: Vice President
The Bank of Tokyo-Mitsubishi, Ltd.,
Chicago Branch
By:/s/ Hisashi Miyashiro
------------------------
Title: Deputy General Manager
Bank One, N.A.
By:/s/ Nathan L. Bloch
----------------------
Title: First Vice President
Branch Banking and Trust Company
By:/s/ Cory Boyte
-----------------
Title: Vice President
The Dai-Ichi Kangyo Bank, Ltd.
By:/s/ Nobuyasu Fukatsu
-----------------------
Title: General Manager
Firstar Bank, N.A.
By:/s/ Amanda Smith
-------------------
Title: Banking Officer
The Fuji Bank, Limited
By:/s/ Peter L. Chinnici
------------------------
Title: Senior Vice President
The Industrial Bank of Japan, Limited
By:/s/ Walter R. Wolff
----------------------
Title: Joint General Manager
Michigan National Bank
By:/s/ Draga Palincas
---------------------
Title: Vice President
The Mitsubishi Trust and
Banking Corporation
By:/s/ Nobuo Tominaga
---------------------
Title: Chief Manager
The Sanwa Bank, Limited
By:/s/ Lee E. Prewitt
---------------------
Title: Vice President
The Sumitomo Bank, Ltd.
By:/s/ John H. Kemper
---------------------
Title: Senior Vice President
SunTrust Bank
By:/s/ Jeff Howard
-------------------
Title: Director
Wachovia Bank, N.A.
By:/s/ Walter R. Gillikin
-------------------------
Title: Senior Vice President
<PAGE>
<TABLE>
<CAPTION>
Schedule I
----------
COMMITMENTS
-----------
Bank Commitment
---- ----------
<S> <C>
Deutsche Bank AG, New York Branch and/or $90,000,000
Cayman Islands Branch
Bank of America, N.A. $62,500,000
First Union National Bank $62,500,000
The Bank of Tokyo-Mitsubishi, Ltd., $40,000,000
Chicago Branch
The Dai-Ichi Kangyo Bank, Ltd. $40,000,000
The Industrial Bank of Japan, Limited $40,000,000
SunTrust Bank $40,000,000
Bank Austria Creditanstalt $25,000,000
Corporate Finance, Inc.
The Bank of New York $25,000,000
Bank One, N.A. $25,000,000
The Fuji Bank, Limited $25,000,000
The Mitsubishi Trust and Banking Corporation $25,000,000
The Sanwa Bank, Limited $25,000,000
The Sumitomo Bank, Ltd. $25,000,000
Wachovia Bank, N.A. $25,000,000
Michigan National Bank $15,000,000
Allied Irish Banks Plc., New York Branch $10,000,000
Banca Nazionale del Lavoro S.p.A. - $10,000,000
New York Branch
Branch Banking and Trust Company $10,000,000
Firstar Bank, N.A. $10,000,000
-----------
Total $630,000,000
============
</TABLE>
<PAGE>
SCHEDULE II
-----------
LENDER ADDRESSES
----------------
DEUTSCHE BANK AG, NEW YORK BRANCH
31 West 52nd Street
New York, NY 10019
Tel: (212) 469-8215
Fax: (212) 469-8212
Attention: Frederick Laird
BANK OF AMERICA, N.A.
231 South LaSalle Street
Chicago, IL 60697
Tel: (312) 828-6654
Fax: (312) 987-0303
Attention: Gretchen Spoo
FIRST UNION NATIONAL BANK
301 S. College Street
Charlotte, NC 28288-0737
Tel: (704) 715-1040
Fax (704) 374-3300
Attention: Stephen R. B. Rixham
ALLIED IRISH BANKS PLC.,
NEW YORK BRANCH
405 Park Avenue
New York, NY 10022
Tel: (212) 339-8913
Fax (212) 339-8007/8
Attention: Germaine Reusch
BANCA NAZIONALE DEL LAVORO S.P.A. - NEW YORK BRANCH
25 West 51st Street
New York, NY 10019
Tel: (212) 314-0239
Fax: (212) 765-2978
Attention: Giulio Giovine
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
Two Greenwich Plaza
Greenwich, CT 06830
Tel: (203) 861-1502
Fax: (203) 861-1532
Attention: Diane Vaccaro
THE BANK OF NEW YORK
48 Wall Street
New York, NY 10005
Tel: (212) 635-8448
Fax: (212) 635-1208
Attention: David G. Shedd
THE BANK OF TOKYO-MITSUBISHI, LTD.,
CHICAGO BRANCH
227 West Monroe Street, Suite 2300
Chicago, IL
Tel: (312) 696-4662
Fax: (312) 696-4530
Attention: Alex Lam
BANCO NACIONAL ULTRAMARINO
22 e 38, Av, Almeida Ribeiro
P.O. Box 465
Macau
Tel: (853) 712752
Fax" (853) 710136
Attention: Teresa M. Jesus dos Santos
BANK ONE, N.A.
1 Bank One Plaza
Mail Code IL1-0173
Chicago, IL 60670
Tel: (312) 732-2243
Fax: (312) 732-1117
Attention: Nathan L. Bloch
BRANCH BANKING AND TRUST COMPANY
Corporate Accounting Division
P.O. Box 15008
Winston-Salem, NC 27118-5008
Tel: (336) 733-3259
Fax: (336) 733-3254
Attention: Cory Boyte
THE DAI-ICHI KANGYO BANK, LTD.
Chicago Branch
10 South Wacker Drive
Chicago, IL 60606
Tel: (312) 715-6364
Fax: (312) 876-2011
Attention: Brian Riley
FIRSTAR BANK, N.A.
1 Firstar Plaza
St. Louis, MO 63160
Tel: (314) 418-3638
Fax: (314) 418-1963
Attention: Amanda Smith
THE FUJI BANK, LIMITED
Chicago Branch
225 West Wacker Drive, Suite 3000
Chicago, IL 60606
Tel: (312) 621-0534
Fax: (312) 621-0583
Attention: Takeyuki Kuroki
THE INDUSTRIAL BANK OF JAPAN, LIMITED
Chicago Branch
227 West Monroe Street, Suite 2600
Chicago, IL 60606
Tel: (312) 855-8254
Fax: (312) 855-8200
Attention: Koichi Zaiki
MICHIGAN NATIONAL BANK
27777 Inksler Road
P.O. Box 9065
Farmington Hills, Michigan 48333-9065
Tel: (248) 473-4330
Fax: (248) 473-4345
Attention: Draga B. Palincas
THE MITSUBISHI TRUST AND BANKING CORPORATION
Chicago Branch
311 South Wacker Drive, Suite 0300
Chicago, IL 60606-6622
Tel: (312) 408-5000
Fax: (312) 663-0863
Attention: John Pastore
THE SANWA BANK, LIMITED
Chicago Branch
10 Wacker Drive, Suite 1825
Chicago, IL 60606
Tel: (312) 368-3020
Fax: (312) 848-8677
Attention: Lee E. Prewitt
THE SUMITOMO BANK, LTD.
Chicago Branch
233 South Wacker Drive, Suite 4010
Chicago, IL 60606-6378
Tel: (312) 876-7797
Fax: (312) 876-6436
Attention: John H. Kemper
SUNTRUST BANK
303 Peachtree Street
Mail Code 1904, 3rd Floor
Atlanta, Georgia 30308
Tel: (404) 658-4226
Fax: (404) 575-2594
Attention: Jeffrey A. Howard
WACHOVIA BANK, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 80803
Tel: (404) 332-5747
Fax: (404) 332-6898
Attention: Walter R. Gillikin
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
SECTION 1. Amount and Terms of Credit.........................................2
1.01 The Commitments.................................................2
1.02 Minimum Amount of Each Borrowing................................3
1.03 Notice of Borrowing.............................................3
1.04 Disbursement of Funds...........................................4
1.05 Notes...........................................................5
1.06 Conversions.....................................................6
1.07 Pro Rata Borrowings.............................................6
1.08 Interest........................................................7
1.09 Interest Periods................................................7
1.10 Increased Costs, Illegality, etc................................8
1.11 Compensation...................................................10
1.12 Change of Lending Office.......................................11
1.13 Replacement of Lenders.........................................11
1.14 Additional Commitments.........................................12
SECTION 2. Letters of Credit.................................................14
2.01 Letters of Credit..............................................14
2.02 Minimum Stated Amount..........................................15
2.03 Letter of Credit Requests......................................15
2.04 Letter of Credit Participations................................16
2.05 Agreement to Repay Letter of Credit Drawings and Acceptance
Payments....................................................18
2.06 Increased Costs................................................19
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.............20
3.01 Fees...........................................................20
3.02 Voluntary Termination of Unutilized Commitments................21
3.03 Mandatory Reduction of Commitments.............................22
SECTION 4. Prepayments; Payments; Taxes......................................22
4.01 Voluntary Prepayments..........................................22
4.02 Mandatory Repayments and Cash Collateralizations...............23
4.03 Method and Place of Payment....................................24
4.04 Net Payments...................................................24
SECTION 5. Conditions Precedent to the Effective Date........................26
5.01 Execution of Agreement; Notes..................................26
5.02 Officer's Certificate..........................................26
5.03 Opinions of Counsel............................................26
5.04 Corporate Documents; Proceedings; etc..........................26
5.05 Existing Credit Agreement......................................27
5.06 Subsidiaries Guaranty..........................................27
5.07 Adverse Change; Governmental Approvals; etc....................27
5.08 Litigation.....................................................28
5.09 Financial Statements; Projections..............................28
5.10 Fees, etc......................................................28
SECTION 6. Conditions Precedent to All Credit Events.........................28
6.01 Effective Date.................................................28
6.02 No Default; Representations and Warranties.....................28
6.03 Notice of Borrowing; Letter of Credit Request..................28
SECTION 7. Representations, Warranties and Agreements........................29
7.01 Corporate Status...............................................29
7.02 Corporate Power and Authority..................................29
7.03 No Violation...................................................29
7.04 Governmental Approvals.........................................30
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc................................30
7.06 Litigation.....................................................30
7.07 True and Complete Disclosure...................................30
7.08 Use of Proceeds; Margin Regulations............................31
7.09 Tax Returns and Payments.......................................31
7.10 Compliance with ERISA..........................................31
7.11 Properties.....................................................32
7.12 Subsidiaries...................................................32
7.13 Compliance with Statutes, etc..................................32
7.14 Investment Company Act.........................................32
7.15 Public Utility Holding Company Act.............................32
7.16 Environmental Matters..........................................33
7.17 Labor Relations................................................33
7.18 Patents, Licenses, Franchises and Formulas.....................33
7.19 Indebtedness...................................................33
7.20 Tax Sharing Agreement..........................................33
SECTION 8. Affirmative Covenants.............................................34
8.01 Information Covenants..........................................34
8.02 Books, Records and Inspections.................................35
8.03 Maintenance of Insurance.......................................35
8.04 Corporate Franchises...........................................35
8.05 Compliance with Statutes, etc..................................36
8.06 ERISA..........................................................36
8.07 End of Fiscal Years; Fiscal Quarters...........................37
8.08 Payment of Taxes...............................................37
8.09 Additional Subsidiary Guarantors...............................37
SECTION 9. Negative Covenants................................................37
9.01 Liens..........................................................37
9.02 Fundamental Changes............................................40
9.03 Indebtedness...................................................41
9.04 Transactions with Affiliates...................................42
9.05 Maximum Leverage Ratio.........................................43
9.06 Minimum Consolidated Net Worth.................................43
9.07 Ownership of Assets by the Borrowers and the Subsidiary Guarantors......44
9.08 Limitation on Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc.....................44
9.09 Business.......................................................45
9.10 Limitation on Certain Restrictions on Subsidiaries.............45
9.11 Limitation on Issuance of Capital Stock........................45
SECTION 10. Events of Default................................................45
10.01 Payments......................................................45
10.02 Representations, etc..........................................46
10.03 Covenants.....................................................46
10.04 Default Under Other Agreements................................46
10.05 Bankruptcy, etc...............................................46
10.06 ERISA.........................................................47
10.07 Subsidiaries Guaranty.........................................47
10.08 Judgments.....................................................47
10.09 Change of Control.............................................47
10.10 Tax Sharing Agreement.........................................47
SECTION 11. Definitions and Accounting Terms.................................48
11.01 Defined Terms.................................................48
SECTION 12. The Agents.......................................................67
12.01 Appointment...................................................67
12.02 Nature of Duties..............................................68
12.03 Lack of Reliance on the Agents................................68
12.04 Certain Rights of the Agents..................................68
12.05 Reliance......................................................69
12.06 Indemnification...............................................69
12.07 The Agent in its Individual Capacity..........................69
12.08 Holders.......................................................69
12.09 Resignation by the Agents.....................................70
12.10 Documentation Agent, Syndication Agent and Arranger...........70
SECTION 13. Miscellaneous....................................................70
13.01 Payment of Expenses, etc......................................70
13.02 Right of Setoff...............................................71
13.03 Notices.......................................................72
13.04 Benefit of Agreement..........................................72
13.05 No Waiver; Remedies Cumulative................................74
13.06 Payments Pro Rata.............................................74
13.07 Calculations; Computations....................................75
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL........................................75
13.09 Counterparts..................................................76
13.10 Effectiveness.................................................76
13.11 Headings Descriptive..........................................76
13.12 Amendment or Waiver; etc......................................77
13.13 Survival......................................................78
13.14 Domicile of Loans.............................................78
13.15 Limitation on Additional Amounts, etc.........................78
13.16 Confidentiality...............................................79
13.17 Register......................................................79
13.18 Judgment Currency.............................................80
SECTION 14. Nature of Borrowers'Obligations..................................80
14.01 Nature of Obligations.........................................81
14.02 Independent Obligation........................................81
14.03 Authorization.................................................81
14.04 Reliance......................................................82
14.05 Contribution; Subrogation.....................................82
14.06 Waiver........................................................82
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SCHEDULE I Commitments
SCHEDULE II Lender Addresses
SCHEDULE III Existing Letters of Credit and Existing Acceptances
SCHEDULE IV Tax Matters
SCHEDULE V Subsidiaries
SCHEDULE VI Existing Liens
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Certain Restrictions on Subsidiaries
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Revolving Note
EXHIBIT B-2 Swingline Note
EXHIBIT C-1 Letter of Credit Service Agreement
EXHIBIT C-2 Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E Opinion of General Counsel of Credit Parties
EXHIBIT F Officers' Certificate
EXHIBIT G Subsidiaries Guaranty
EXHIBIT H Assignment and Assumption Agreement
EXHIBIT I Additional Commitment Agreement
