CREDIT AGREEMENT
among
FURNITURE BRANDS INTERNATIONAL, INC.,
BROYHILL FURNITURE INDUSTRIES, INC.,
THE LANE COMPANY, INCORPORATED,
THOMASVILLE FURNITURE INDUSTRIES, INC.,
VARIOUS BANKS,
CREDIT LYONNAIS NEW YORK BRANCH,
as DOCUMENTATION AGENT,
NATIONSBANK, N.A.,
as SYNDICATION AGENT,
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
---------------------------------
Dated as of November 17, 1994
and
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
TABLE OF CONTENTS
SECTION 1. Amount and Terms of Credit
1.01 The Commitments
1.02 Minimum Amount of Each Borrowing
1.03 Notice of Borrowing
1.04 Disbursement of Funds
1.05 Notes
1.06 Conversions
1.07 Pro Rata Borrowings
1.08 Interest
1.09 Interest Periods
1.10 Increased Costs, Illegality, etc.
1.11 Compensation
1.12 Change of Lending Office
1.13 Replacement of Banks
SECTION 2. Letters of Credit
2.01 Letters of Credit
2.02 Minimum Stated Amount
2.03 Letter of Credit Requests
2.04 Letter of Credit Participations
2.05 Agreement to Repay Letter of Credit Drawings and
Acceptance Payments
2.06 Increased Costs
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment
3.01 Fees
3.02 Voluntary Termination of Unutilized Commitments
3.03 Mandatory Reduction of Commitments
SECTION 4. Prepayments; Payments; Taxes
4.01 Voluntary Prepayments
4.02 Mandatory Repayments, Cash Collateralizations and
Commitment Reductions
4.03 Method and Place of Payment
4.04 Net Payments
SECTION 5. Conditions Precedent to Initial Credit Events
5.01 Execution of Agreement; Notes
5.02 Fees, etc.
5.03 Opinions of Counsel
5.04 Corporate Documents; Proceedings; etc.
5.05 Shareholders' Agreements; Collective Bargaining
Agreements; Permitted Debt Agreements; Tax Sharing
Agreements
5.06 Solvency; Environmental Analyses; Insurance Matters
5.07 Subsidiary Guaranty
5.08 Pledge Agreement
5.09 Security Agreement
5.10 Mortgage Amendments; etc.
5.11 Consent Letter
5.12 Adverse Change; Governmental Approvals; etc.
5.13 Litigation
5.14 Pro Forma Balance Sheet; Financial Statements;
Projections
5.15 Refinancing; Existing Credit Agreement; etc.
5.16 Consummation of the Stock Repurchase
SECTION 6. Conditions Precedent to All Credit Events
6.01 No Default; Representations and Warranties
6.02 Notice of Borrowing; Letter of Credit Request
SECTION 7. Representations, Warranties and Agreements
7.01 Corporate Status
7.02 Corporate Power and Authority
7.03 No Violation
7.04 Governmental Approvals
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections; etc.
7.06 Litigation
7.07 True and Complete Disclosure
7.08 Use of Proceeds; Margin Regulations
7.09 Tax Returns and Payments
7.10 Compliance with ERISA
7.11 The Security Documents
7.12 Representations and Warranties in Other Documents
7.13 Properties
7.14 Capitalization
7.15 Subsidiaries
7.16 Compliance with Statutes, etc.
7.17 Investment Company Act
7.18 Public Utility Holding Company Act
7.19 Environmental Matters
7.20 Labor Relations
7.21 Patents, Licenses, Franchises and Formulas
7.22 Indebtedness
7.23 Transaction
7.24 Special Purpose Corporation
SECTION 8. Affirmative Covenants
8.01 Information Covenants
8.02 Books, Records and Inspections
8.03 Maintenance of Property; Insurance
8.04 Corporate Franchises
8.05 Compliance with Statutes, etc.
8.06 Compliance with Environmental Laws
8.07 ERISA
8.08 End of Fiscal Years; Fiscal Quarters
8.09 Performance of Obligations
8.10 Payment of Taxes
8.11 Additional Security; Further Assurances; Required
Appraisals
8.12 Interest Rate Protection
8.13 Ownership of Subsidiaries
8.14 Permitted Acquisitions
8.15 Maintenance of Corporate Separateness
8.16 Cash Management System
8.17 Margin Stock
SECTION 9. Negative Covenants
9.01 Liens
9.02 Consolidation, Merger, Purchase or Sale of Assets,
etc.
9.03 Dividends
9.04 Indebtedness
9.05 Investments; etc.
9.06 Transactions with Affiliates and Unrestricted
Subsidiaries
9.07 Capital Expenditures
9.08 Consolidated Net Interest Coverage Ratio
9.09 Maximum Leverage Ratio
9.10 Limitation on Modifications of and Payments on
Indebtedness and Qualified Preferred Stock;
Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; Surviving
Guaranty Payments, etc.
9.11 Limitation on Creation or Acquisition of
Subsidiaries and Restricted Subsidiaries
9.12 Limitation on Issuance of Capital Stock
9.13 Business
9.14 Limitation on Certain Restrictions on Subsidiaries
9.15 Limitation on Receivables and Receivables Facility
SECTION 10. Events of Default
10.01 Payments
10.02 Representations, etc.
10.03 Covenants
10.04 Default Under Other Agreements
10.05 Bankruptcy, etc.
10.06 ERISA
10.07 Security Documents
10.08 Subsidiary Guaranty
10.09 Judgments
10.10 Change of Control
10.11 Tax Sharing Agreement
10.12 Receivables Repurchases
SECTION 11. Definitions and Accounting Terms
11.01 Defined Terms
SECTION 12. The Agents
12.01 Appointment
12.02 Nature of Duties
12.03 Lack of Reliance on the Administrative Agent, the
Documentation Agent and the Syndication Agent
12.04 Certain Rights of the Administrative Agent, the
Documentation Agent and the Syndication Agent
12.05 Reliance
12.06 Indemnification
12.07 The Administrative Agent, the Documentation Agent
and the Syndication Agent in its Individual
Capacity
12.08 Holders
12.09 Resignation by the Agents
SECTION 13. Miscellaneous
13.01 Payment of Expenses, etc.
13.02 Right of Setoff
13.03 Notices
13.04 Benefit of Agreement
13.05 No Waiver; Remedies Cumulative
13.06 Payments Pro Rata
13.07 Calculations; Computations
13.08 GOVERNING LAW; SUBMISSION TO
JURISDICTION; VENUE; WAIVER OF JURY TRIAL
13.09 Counterparts
13.10 Effectiveness
13.11 Headings Descriptive
13.12 Amendment or Waiver; etc.
13.13 Survival
13.14 Domicile of Loans
13.15 Limitation on Additional Amounts, etc.
13.16 Confidentiality
13.17 Register
13.18 Addition of New Banks; Termination of Commitments
of Non-Continuing Banks; etc.
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Existing Mortgaged Properties
SCHEDULE IV Undisclosed Liabilities
SCHEDULE V Tax Matters
SCHEDULE VI Subsidiaries
SCHEDULE VII Existing Indebtedness
SCHEDULE VIII Insurance
SCHEDULE IX Existing Liens
SCHEDULE X Existing Investments
SCHEDULE XI Existing Transactions
SCHEDULE XII Existing Letters of Credit
SCHEDULE XIII Certain Restrictions on Subsidiaries
SCHEDULE XIV Excluded Assets
SCHEDULE XV Leases Guarantied Under Surviving
Guaranties
SCHEDULE XVI ERISA Matters
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Term Note
EXHIBIT B-2 Revolving Note
EXHIBIT B-3 Swingline Note
EXHIBIT C-1 Letter of Credit Service Agreement
EXHIBIT C-2 Trade Letter of Credit Request
EXHIBIT C-3 Standby Letter of Credit Request
EXHIBIT D Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Opinion of General Counsel of Credit
Parties
EXHIBIT E-2 Opinion of ▇▇▇▇▇ ▇▇▇▇ LLP, Special
Counsel to Credit Parties
EXHIBIT F Solvency Certificate
EXHIBIT G Third Amended and Restated Subsidiary
Guaranty
EXHIBIT H Third Amended and Restated Pledge Agreement
EXHIBIT I Third Amended and Restated Security
Agreement
EXHIBIT J Consent Letter
EXHIBIT K Assignment and Assumption Agreement
CREDIT AGREEMENT, dated as of November 17, 1994, as amended and
restated as of December 29, 1995, as further amended and restated as
of September 6, 1996, and as further amended and restated as of June
27, 1997, among FURNITURE BRANDS INTERNATIONAL, INC., a Delaware
corporation ("Furniture Brands"), BROYHILL FURNITURE INDUSTRIES, INC.,
a North Carolina corporation ("Broyhill"), THE LANE COMPANY,
INCORPORATED, a Virginia 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 Banks party hereto from time to
time, CREDIT LYONNAIS NEW YORK BRANCH ("Credit Lyonnais"), as
Documentation Agent, NATIONSBANK, N.A. ("NationsBank"), as Syndication
Agent, and BANKERS TRUST COMPANY, as Administrative Agent (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 :
WHEREAS, the Borrowers, the Existing Banks, the Documentation
Agent, the Syndication Agent and the Administrative Agent are party to
a Credit Agreement, dated as of November 17, 1994, as amended and
restated as of December 29, 1995, and as further amended and restated
as of September 6, 1996 (as in effect immediately prior to the Third
Restatement Effective Date, the "Existing Credit Agreement");
WHEREAS, parties hereto wish to amend and restate the Existing
Credit Agreement in the form of this Agreement;
NOW, THEREFORE, the parties hereto agree that the Existing Credit
Agreement shall be and hereby is amended and restated in its entirety
as follows:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank with a Term Loan Commitment
severally agrees to make, on the Third Restatement Effective Date, a
term loan or term loans (each a "Term Loan" and collectively the "Term
Loans") to the Borrower, which Term Loans (i) shall, at the option of
the Borrowers, be Base Rate Loans or Eurodollar Loans, provided that
(A) except as otherwise specifically provided in Section 1.10(b), all
Term Loans comprising the same Borrowing shall at all times be of the
same Type and (B) no more than one Borrowing of Term Loans to be
maintained as Eurodollar Loans may be incurred or maintained prior to
the 30th day after the Third Restatement Effective Date (which
Borrowing of Eurodollar Loans may only have an Interest Period of one
month, and may only be made on the Third Restatement Effective Date),
(ii) shall equal for each Bank, in initial aggregate principal amount,
an amount which equals the Term Loan Commitment of such Bank on the
Third Restatement Effective Date (before giving effect to any
reductions thereto on such date pursuant to Section 3.03(b)(i) but
after giving effect to any reductions thereto on or prior to such date
pursuant to Section 3.03(b)(ii)) and (iii) shall be joint and several
obligations of each of the Borrowers. Once repaid, Term Loans
incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth
herein, each Bank severally agrees, at any time and from time to time
after the Third Restatement Effective Date and prior to the Revolving
Loan 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, at the option of the
Borrowers, be 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) no more than five Borrowings of Revolving Loans
to be maintained as Eurodollar Loans may be incurred or maintained
prior to the 30th day after the Third Restatement Effective Date
(which Borrowings of Eurodollar Loans, except as set forth in Section
1.09(viii), may only have an Interest Period of one month, and may
only be made on the Third Restatement Effective Date) and, in the case
of any Existing Revolving Loans that continue as set forth in Section
5.15(ii), on the date the Interest Periods applicable thereto shall
end as set forth in Section 1.09(viii), (ii) may be repaid and rebor-
rowed in accordance with the provisions hereof, (iii) shall not exceed
for any Bank at any time outstanding that aggregate principal amount
which, when added to the product of (x) such Bank's Adjusted
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 simultane-
ously with the incurrence of, the respective incurrence of Revolving
Loans) then outstanding, equals the Revolving Loan Commitment of such
Bank at such time, (iv) shall not exceed for all Banks at any time
outstanding that aggregate principal amount which, when added to
(x) the aggregate amount of all Letter of Credit Outstandings (exclu-
sive 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 Revolving Loan Commitment at such time, (v) shall not exceed in
aggregate principal amount on the Third Restatement Effective Date,
when added to the aggregate principal amount of Swingline Loans
incurred on such date, an amount equal to $348,000,000 and (vi) shall
be the joint and several obligations of each of the Borrowers.
(c) Subject to and upon the terms and conditions herein set
forth, BTCo in its individual capacity agrees to make at any time and
from time to time on and after the Third Restatement 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 made by Non-
Defaulting Banks then outstanding and the Letter of Credit Outstand-
ings at such time, an amount equal to the Adjusted Total Revolving
Loan Commitment at such time (after giving effect to any reductions to
the Adjusted Total Revolving Loan Commitment on such date), (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.
(d) On any Business Day, BTCo may, in its sole discretion, give
notice to the Banks 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 Sec-
tion 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 all Banks with a
Revolving Loan Commitment (without giving effect to any reductions
thereto pursuant to the last paragraph of Section 10) pro rata based
on each Bank's Adjusted Percentage (determined before giving effect to
any termination of the Revolving Loan Commitments pursuant to the last
paragraph of Section 10) and the proceeds thereof shall be applied
directly to BTCo to repay BTCo for such outstanding Swingline Loans.
Each such Bank 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 BTCo notwithstanding that (i) the
amount of the Mandatory Borrowing may not comply with the minimum
amount for Borrowings 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 Revolving Loan
Commitment or the Adjusted Total Revolving Loan Commitment at such
time; provided that, in no event shall such Bank be required to make
Revolving Loans in excess of such Bank's Revolving Loan Commitment.
In the event that any Mandatory Borrowing cannot for any reason be
made on the date otherwise required above (including, without limita-
tion, as a result of the commencement of a proceeding under the Bank-
ruptcy Code with respect to any of the Borrowers), then each such Bank
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 BTCo such participations in the
outstanding Swingline Loans as shall be necessary to cause such Banks
to share in such Swingline Loans ratably based upon their respective
Adjusted Percentages (determined before giving effect to any termina-
tion of the Revolving Loan 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 BTCo 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 Bank shall be required to pay BTCo
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 princi-
pal amount of each Borrowing under a Tranche shall be not less than
the Minimum Borrowing Amount for such Tranche 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(d). More than one Bor-
rowing may occur on the same date, but at no time shall there be out-
standing more than twelve Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrowers desire
to incur Loans under any Tranche (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 its Notice Office at least one Business Day's
prior written (or telephonic notice promptly confirmed in writing)
notice of each Base Rate Loan and at least three Business Days' prior
written (or telephonic notice promptly confirmed in writing) notice 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 Loans to be made pursuant to
such Borrowing, the date of such Borrowing (which shall be a Business
Day) and whether the 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 Bank
notice of such proposed Borrowing, of such Bank'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 BTCo 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(d), with each Borrower irrevocably agreeing,
by its incurrence of any Swingline Loan, to the making of the
Mandatory Borrowings as set forth in Section 1.01(d).
(c) Without in any way limiting the obligation of the
Borrowers to confirm in writing any telephonic notice of any
Borrowing, the Administrative Agent may act without liability upon the
basis of telephonic notice of such Borrowing, believed by the
Administrative Agent in good faith to be from an Authorized Represen-
tative 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.
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 Bor-
rowing (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(d)),
each Bank will make available its pro rata portion of each such Bor-
rowing requested to be made on such date (or in the case of Swingline
Loans, BTCo 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 of the Administrative Agent, and
the Administrative Agent will make available to the Borrowers at the
Payment Office the aggregate of the amounts so made available by the
Banks (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 Bank prior to the date of Borrowing
that such Bank does not intend to make available to the Administrative
Agent such Bank's portion of any Borrowing to be made on such date,
the Administrative Agent may assume that such Bank 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 Bank, the Administrative Agent shall be
entitled to recover such corresponding amount on demand from such
Bank. If such Bank 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 Bank 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 Bank,
the overnight Federal Funds Rate and (ii) if recovered from the Bor-
rowers, 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 Bank from its obligation to make Loans
hereunder or to prejudice any rights which the Borrowers may have
against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Borrowers' obligation to pay the
principal of, and interest on, the Loans made by each Bank shall be
evidenced (i) if Term 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
"Term Note" and, collectively, the "Term Notes"), (ii) if Revolving
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 (each a "Revolving
Note" and, collectively, the "Revolving Notes") and (iii) if Swingline
Loans, by a promissory note duly executed and delivered by the
Borrowers substantially in the form of Exhibit B-3, with blanks appro-
priately completed in conformity herewith (the "Swingline Note").
(b) The Term Note issued to each Bank shall (i) be executed by
the Borrowers, (ii) be payable to such Bank or its registered assigns
and be dated the Third Restatement Effective Date, (iii) be in a
stated principal amount equal to the Term Loan made by such Bank on
such date and be payable in the principal amount of the Term Loans
evidenced thereby, (iv) mature on the Term Loan 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 Revolving Note issued to each Bank shall (i) be
executed by the Borrowers, (ii) be payable to such Bank or its
registered assigns and be dated the Third Restatement Effective Date,
(iii) be in a stated principal amount equal to the Revolving Loan
Commitment of such Bank and be payable in the principal amount of the
Revolving Loans evidenced thereby, (iv) mature on the Revolving Loan
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 repay-
ment as provided in Section 4.02 and (vii) be entitled to the benefits
of this Agreement and the other Credit Documents.
(d) The Swingline Note issued to BTCo shall (i) be executed by
the Borrowers, (ii) be payable to BTCo or its registered assigns and
be dated the Third Restatement 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 and (vi) be
entitled to the benefits of this Agreement and the other Credit Docu-
ments.
(e) Each Bank 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.
1.06 Conversions. The Borrowers shall have the option to
convert, on any Business Day occurring after the Third Restatement
Effective Date, all or a portion equal to at least the applicable
Minimum Borrowing Amount of the outstanding principal amount of Loans
made pursuant to one or more Borrowings (so long as of the same
Tranche) of one or more Types of Loans into a Borrowing (of the same
Tranche) of another Type of Loan, provided that (i) except as
otherwise provided in Section 1.10(b), Eurodollar Loans may be con-
verted 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) 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) prior to the 30th day
after the Third Restatement Effective Date, conversions of Base Rate
Loans into Eurodollar Loans may only be made if the conversion is
effective on the first day of an Interest Period referred to in clause
(B) of the respective provisos to Sections 1.01(a)(i) and 1.01(b)(i)
and so long as such conversion does not result in a greater number of
Borrowings of Eurodollar Loans prior to the 30th day after the Third
Restatement Effective Date, (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 its Notice Office prior to 12:00 Noon (New
York time) at least three Business Days' prior notice (each a "Notice
of Conversion") specifying the Loans to be so converted, the Borrowing
or Borrowings pursuant to which such 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 Bank
prompt notice of any such proposed conversion affecting any of its
Loans.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans and
Revolving Loans under this Agreement shall be incurred from the Banks
pro rata on the basis of their Term Loan Commitments and Revolving
Loan Commitments, as the case may be, provided that all Borrowings of
Revolving Loans made pursuant to a Mandatory Borrowing shall be
incurred from the Banks pro rata on the basis of their Adjusted
Percentages. It is understood that no Bank shall be responsible for
any default by any other Bank of its obligation to make Loans
hereunder and that each Bank shall be obligated to make the Loans
provided to be made by it hereunder, regardless of the failure of any
other Bank to make its 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 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 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
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 and any other overdue amount
payable hereunder shall, in each case, bear interest at a rate per
annum equal to the greater of (x) 2% per annum in excess of the rate
otherwise applicable to Base Rate Loans from time to time and (y) the
rate which is 2% in excess of the rate then borne by such Loans, in
each case with such interest to 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, quarterly in arrears on each
Quarterly Payment Date, (ii) in respect of each Eurodollar Loan, 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, (iii) in respect of each Eurodollar Loan, on any
repayment or prepayment (on the amount repaid or prepaid) and (iv) in
respect of each Loan, 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 Banks 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 Loan of a different Type)
and each Interest Period occurring thereafter in respect of such Euro-
dollar 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;
(vi) no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the respective
Maturity Date for such Tranche of Loans;
(vii) no Interest Period in respect of any Borrowing of
Revolving Loans shall be selected which extends beyond any date upon
which a Scheduled Commitment Reduction will be required to be made
under Section 3.03(d) if, after giving effect to the selection of such
Interest Period, the aggregate principal amount of Revolving Loans
maintained as Eurodollar Loans which have Interest Periods expiring
after such date would be in excess of the aggregate principal amount
of Loans permitted to be outstanding after such Scheduled Commitment
Reduction; and
(viii) it is understood that in respect of Existing Revolving
Loans that remain outstanding immediately after giving effect to the
Third Restatement Effective Date pursuant to Section 5.15(ii), the
Interest Periods applicable thereto shall continue to apply thereto
until the last day of such Interest Period.
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 Bank 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 date of this Agreement 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 Bank 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
date of this Agreement 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, regu-
lation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payment to any
Bank 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 Bank, or any franchise tax based on the net income or net profits
of such Bank, 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 circum-
stances since the date of this Agreement affecting such Bank or the
interbank Eurodollar market or the position of such Bank in such
market (except as a result of a deterioration in the creditworthiness
of such Bank 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 Bank 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 date of this Agreement which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Bank (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 deter-
mination (which notice the Administrative Agent shall promptly
transmit to each of the other Banks). 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
Banks 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 Bank, upon written demand therefor, such
additional amounts (in the form of an increased rate of, or a differ-
ent method of calculating, interest or otherwise as such Bank in its
sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received
or receivable hereunder (a written notice as to the additional amounts
owed to such Bank, showing the basis for the calculation thereof, sub-
mitted to the Borrowers by such Bank 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 Bank 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 Bank, the Administrative Agent, if such event ceases
to exist. If any such event described in clause (iii) above ceases to
exist as to a Bank, the obligations of such Bank 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 Bank 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 Bank to convert such Eurodollar Loan into a Base
Rate Loan, provided that, if more than one Bank is affected at any
time, then all affected Banks must be treated the same pursuant to
this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank
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 Bank or any corporation controlling
such Bank based on the existence of such Bank's Commitments 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 Bank, upon its written demand therefor,
such additional amounts as shall be required to compensate such Bank
or such other corporation for the increased cost to such Bank or such
other corporation or the reduction in the rate of return to such Bank
or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Bank will act reasonably and
in good faith and will use averaging and attribution methods which are
reasonable, provided that such Bank's reasonable good faith deter-
mination 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 Bank, 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 Bank, 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 Bank to fund its Eurodollar Loans but excluding any loss of
anticipated profit) which such Bank may sustain: (i) if for any rea-
son (other than a default by such Bank 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 Bank or (y) any election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank 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 Bank, it will, if requested by the Borrowers, use
reasonable efforts (subject to overall policy considerations of such
Bank) 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 Bank 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 Bank
provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a
Defaulting Bank 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 Bank which
results in such Bank charging to the Borrowers increased costs in
excess of those being generally charged by the other Banks or (z) as
provided in Section 13.12(b) in the case of certain refusals by a Bank
to consent to certain proposed changes, waivers, discharges or
terminations with respect to this Agreement which have been approved
by the Required Banks, 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 Bank (the "Replaced
Bank") with one or more other Eligible Transferee or Transferees, none
of whom shall constitute a Defaulting Bank at the time of such
replacement (collectively, the "Replacement Bank") reasonably
acceptable to the Administrative Agent, provided that (i) at the time
of any replacement pursuant to this Section 1.13, the Replacement Bank
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 Bank) pursuant to
which the Replacement Bank shall acquire all of the Commitments and
outstanding Loans of, and participations in Letters of Credit by, the
Replaced Bank and, in connection therewith, shall pay to (x) the
Replaced Bank 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 Loans of the Replaced Bank, (B) an amount equal to all
Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, 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 Bank pursuant to
Section 3.01 and (y) BTCo an amount equal to such Replaced Bank's
Adjusted Percentage (for this purpose, determined as if the adjustment
described in clause (y) of the immediately succeeding sentence had
been made with respect to such Replaced Bank) of (1) any Unpaid Draw-
ing (which at such time remains an Unpaid Drawing) and (2) any portion
of any Swingline Loan for which BTCo has given a notice of a Mandatory
Borrowing pursuant to Section 1.01(d) and such Replaced Bank has not
provided a Revolving Loan which it was obligated to provide to the ex-
tent such amount was not theretofore funded by such Replaced Bank, and
(ii) all obligations of the Borrowers owing to the Replaced Bank
(other than those (a) specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is concur-
rently being, paid or (b) relating to any Tranche of Loans and/or
Commitments of the respective Replaced Bank which will remain out-
standing after giving effect to the respective replacement) shall be
paid in full to such Replaced Bank 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 Bank, delivery to the
Replacement Bank of the appropriate Notes executed by the Borrowers,
(x) the Replacement Bank shall become a Bank hereunder and the
Replaced Bank shall cease to constitute a Bank 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 Bank and (y) in the case of a
replacement of a Defaulting Bank with a Non-Defaulting Bank, the
Adjusted Percentages of the Banks shall be automatically adjusted at
such time to give effect to such replacement (and to give effect to
the replacement of a Defaulting Bank with one or more Non-Defaulting
Banks).
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 Bank issue, at any time and from time to time on and after the
Third Restatement Effective Date and prior to the Revolving Loan
Maturity Date, for the joint and several account of the Borrowers, one
or more irrevocable letters of credit denominated in Dollars or, in
the case of Trade Letters of Credit, through the creation thereunder
by the respective Issuing Bank of acceptances or any other customary
agreement or method for providing for deferred payment under letters
of credit ("Acceptances"), and otherwise in a form customarily used by
such Issuing Bank or in such other form as has been approved by such
Issuing Bank (each such letter of credit, a "Letter of Credit") in
support of obligations described in the definitions of Standby Letter
of Credit or Trade Letter of Credit and any other obligations of the
Borrowers or any of their Restricted Subsidiaries that are reasonably
acceptable to the Administrative Agent and otherwise permitted to
exist pursuant to this Agreement. On the Third Restatement Effective
Date, all Existing Letters of Credit shall be deemed to have been
issued under this Agreement and shall for all purposes constitute
"Letters of Credit" hereunder.
(b) Each Issuing Bank may agree, in its sole discretion, and
BTCo hereby agrees that in the event a requested Letter of Credit is
not issued by one of the other Issuing Banks, it will (subject to the
terms and conditions contained herein), at any time and from time to
time on or after the Third Restatement Effective Date and prior to the
Revolving Loan 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 in support of such obligations described in
the definitions of Standby Letter of Credit and Trade Letter of Credit
of the Borrowers or any of their Restricted Subsidiaries 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 Bank 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 Bank from issuing such Letter of Credit or any requirement of
law applicable to such Issuing Bank or any request or directive
(whether or not having the force of law) from any governmental author-
ity with jurisdiction over such Issuing Bank shall prohibit, or
request that such Issuing Bank refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall
impose upon such Issuing Bank with respect to such Letter of Credit
any restriction or reserve or capital requirement (for which such
Issuing Bank 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 Bank as of the date
hereof and which such Issuing Bank in good ▇▇▇▇▇ ▇▇▇▇▇ material to it;
or
(ii) such Issuing Bank shall have received notice from any Bank
prior to the issuance of such Letter of Credit of the type described
in the penultimate 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) $60,000,000 or (y) when
added to the aggregate principal amount of all Revolving Loans made by
Non-Defaulting Banks and then outstanding and Swingline Loans then
outstanding, an amount equal to the Adjusted Total Revolving Loan
Commitment at such time, (ii) no Acceptance shall be created the
Stated Amount of which, when added to the amount of all Acceptances
outstanding at such time, would exceed $15,000,000 and (iii) each
Letter of Credit shall by its terms terminate or be terminable by the
Issuing Bank on such date that would result in all drawings
thereunder, or any Acceptances created thereunder, being funded
pursuant to the terms thereof prior to (x) (A) in the case of Standby
Letters of Credit, the date which occurs 12 months after the date of
the issuance thereof (although any such Letter of Credit may be
extendable for successive periods of up to 12 months, but not beyond
the Revolving Loan Maturity Date, on terms acceptable to the Issuing
Bank thereof) and (B) in the case of Trade Letters of Credit, the date
which occurs six months (or up to one year with the consent of the
respective Issuing Bank) after the date of the issuance thereof or (y)
(A) in the case of Standby Letters of Credit, the date which is five
Business Days prior to the Revolving Loan Maturity Date and (B) in the
case of Trade Letters of Credit, the date which is thirty Business
Days prior to the Revolving Loan Maturity Date.
2.02 Minimum Stated Amount. The Stated Amount of each Letter
of Credit shall be not less than $10,000 or such lesser amount as is
acceptable to the respective Issuing Bank.
2.03 Letter of Credit Requests. (a) Whenever any Borrower
desires that a Letter of Credit be issued by the Administrative Agent
as Issuing Bank for its account, 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 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 Trade Letter of Credit be issued by an
Issuing Bank other than the Administrative Agent for its account, it
shall have (x) executed and delivered to the respective Issuing Bank
(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 Bank), a Trade
Letter of Credit Request in the form of Exhibit C-2 attached hereto
(each a "Trade Letter of Credit Request") and (y) completed and exe-
cuted a letter of credit application in the form customarily used by
such Issuing Bank for Trade Letters of Credit or in such other form as
the Administrative Agent and the Issuing Bank shall request. Whenever
any Borrower desires that a Standby Letter of Credit be issued by an
Issuing Bank other than the Administrative Agent for its account it
shall have executed and delivered to the respective Issuing Bank (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 Bank), a Standby Letter of
Credit Request in the form of Exhibit C-3 attached hereto (each a
"Standby Letter of Credit Request"). Letter of Credit Requests shall
be given in writing, or in the case of requests of Trade Letters of
Credit, by telephone, if promptly confirmed in writing, or, if the
Administrative Agent is the Issuing Bank, 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 Letter of Credit Drawings 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 Bank has received notice from any Bank before it issues a
Letter of Credit that one or more of the conditions specified in
Section 6 are not then satisfied, or that the issuance of such Letter
of Credit would violate Section 2.01(c), then such Issuing Bank may
issue the requested Letter of Credit for the account of the Borrowers
in accordance with such Issuing Bank's usual and customary practices.
Upon its issuance of any Letter of Credit, such Issuing Bank shall
promptly notify each Bank of such issuance.
2.04 Letter of Credit Participations. (a) Immediately
upon the issuance by any Issuing Bank of any Letter of Credit, such
Issuing Bank shall be deemed to have sold and transferred to each
Bank, other than such Issuing Bank (each such Bank, 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 Bank, without recourse or warranty, an
undivided interest and participation, to the extent of such
Participant's Adjusted 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 Revolving Loan Commitments or Adjusted Percent-
ages of the Banks pursuant to Section 1.13 or 13.04 or as a result of
a Bank Default, it is hereby agreed that, with respect to all
outstanding Letters of Credit, Acceptances and Unpaid Drawings, there
shall be an automatic adjustment to the participations pursuant to
this Section 2.04 to reflect the new Adjusted Percentages of the
assignor and assignee Bank or of all Banks with Revolving Loan Commit-
ments, as the case may be.
(b) In determining whether to pay or create an Acceptance
under any Letter of Credit, such Issuing Bank shall have no obligation
relative to the other Banks 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 Bank under or in connection with
any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Issuing
Bank any resulting liability to the Borrowers or any Bank.
(c) In the event that any Issuing Bank 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 Bank pursuant to Section 2.05(a), such Issuing Bank 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 Bank the amount of such
Participant's Adjusted Percentage of such unreimbursed payment in
Dollars and in same day funds. If the Administrative Agent so noti-
fies, 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, such
Participant shall make available to such Issuing Bank in Dollars such
Participant's Adjusted Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such
Participant shall not have so made its Adjusted Percentage of the
amount of such payment available to such Issuing Bank, such
Participant agrees to pay to such Issuing Bank, 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 Bank at the
overnight Federal Funds Rate. The failure of any Participant to make
available to such Issuing Bank its Adjusted 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 Bank its
Adjusted Percentage of 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 Bank such other
Participant's Adjusted Percentage of any such payment.
(d) Whenever any Issuing Bank receives a payment of a ▇▇▇▇-
bursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, such Issuing Bank shall
pay to each Participant which has paid its Adjusted 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) (i) In the case of Standby Letters of Credit, the Agent
shall deliver to each Participant copies of each Standby Letter of
Credit upon issuance and any amendments thereto as they occur, as
furnished to the Administrative Agent by the Issuing Bank.
(ii) In the case of Trade Letters of Credit, when the
Administrative Agent is not the Issuing Bank, then the Issuing Bank is
to send to the Agent, promptly on the first business day of each week,
by telefax, their daily outstanding Trade Letters of Credit balances
for the previous week. The Administrative Agent shall deliver to each
Bank upon each calendar month end and upon each Letter of Credit fee
payment a report setting forth for such period the aggregate daily
amount available to be drawn under Trade Letters of Credit issued by
all Issuing Banks that were outstanding during such period.
(f) The obligations of the Participants to make payments to
each Issuing Bank with respect to Letters of Credit and Acceptances
issued thereunder shall be irrevocable and not subject to any qualifi-
cation or exception whatsoever 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 Bank, by making
payment to the Administrative Agent in immediately available funds at
the Payment Office, for any payment or disbursement made by such
Issuing Bank under any Letter of Credit or Acceptance created
thereunder (each such amount, 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 dis-
bursed by such Issuing Bank, to the extent not reimbursed prior to
12:00 Noon (New York time) on the date of such payment or disburse-
ment, from and including the date paid or disbursed to but excluding
the date such Issuing Bank 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 Margin for Base Rate Loans, 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 Bank (and until ▇▇▇▇-
bursed by the Borrowers) at a rate per annum which shall be the Base
Rate in effect from time to time plus the Applicable Margin for Base
Rate Loans plus 2%, in each such case, with interest to be payable by
the Borrowers on demand. The respective Issuing Bank 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 Bank 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 Bank
(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
Bank'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 Bank 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 Bank 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 Bank 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 Bank or participated in by any
Participant, or (ii) impose on any Issuing Bank 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
Bank 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 Bank or
any Participant hereunder or reduce the rate of return on its capital
with respect to Letters of Credit and 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 Bank or such
Participant, or any franchise tax based on the net income or net
profits of such Bank 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
Bank or any Participant (a copy of which demand shall be sent by such
Issuing Bank 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 Bank
or such Participant such additional amount or amounts as will compen-
sate such Bank for such increased cost or reduction in the amount re-
ceivable or reduction on the rate of return on its capital. Any
Issuing Bank 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 Bank
or such Participant (a copy of which certificate shall be sent by such
Issuing Bank 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 Bank
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 Commit-
ment.
3.01 Fees. (a) The Borrowers jointly and severally agree
to pay to the Administrative Agent for distribution to each Non-
Defaulting Bank with a Revolving Loan Commitment a commitment
commission (the "Commitment Commission") for the period from the Third
Restatement Effective Date to but excluding the Revolving Loan
Maturity Date (or such earlier date as the Total Revolving Loan
Commitment shall have been terminated), computed at a rate for each
day equal to 1/2 of 1% (reduced by the then applicable Commitment
Commission Reduction Percentage) per annum on the daily average
Unutilized Revolving Loan Commitment of such Non-Defaulting Bank.
Accrued Commitment Commission shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the Revolving Loan
Maturity Date or such earlier date upon which the Total Revolving Loan
Commitment is terminated.
(b) The Borrowers jointly and severally agree to pay to the
Administrative Agent for pro rata distribution to each Non-Defaulting
Bank 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 to the termination of such
Letter of Credit, computed at a rate per annum equal to the Applicable
Margin for Revolving Loans maintained as Eurodollar Loans as in effect
from time to time on the daily Stated Amount of such Letter of Credit
and (y) each Acceptance (the "Acceptance Fee") for the period from and
including the date of creation of such Acceptance to and including the
maturity of such Acceptance, computed at a rate per annum equal to the
Applicable Margin for Revolving Loans maintained as Eurodollar Loans
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
Revolving Loan Commitment upon which no Letters of Credit or
Acceptances remain outstanding.
(c) The Borrowers jointly and severally agree to pay to the
respective Issuing Bank, 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 termination 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, provided that in any event the minimum
amount of the Letter of Credit Facing Fee payable in any 12 month
period for any Standby Letter of Credit shall be $500 (it being agreed
that, on each anniversary of the issuance of any Standby Letter of
Credit or upon any earlier termination or expiration of a Standby
Letter of Credit, if $500 exceeds the amount of Letter of Credit
Facing Fees theretofore paid or then accrued with respect to such
Standby Letter of Credit, in either case after the date of the
issuance thereof or, if later, after the date of the last anniversary
of the issuance thereof (but excluding any amounts paid after such
anniversary with respect to periods ending on or prior to such
anniversary, including, without limitation, as a result of the
operation of this parenthetical), the amount of such excess shall be
payable on the next date upon which accrued Letter of Credit Facing
Fees are otherwise payable with respect to Standby Letters of Credit
as provided in the following sentence) 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
maturity 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 Revolving Loan
Commitment has been terminated and all 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,
such amount as shall at the time of such event be the administrative
charge and out-of-pocket expenses which the respective Issuing Bank is
generally imposing in connection with such occurrence with respect to
letters of credit.
(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.
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 its
Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks), the Borrowers shall have the right, at
any time or from time to time, without premium or penalty, to termi-
nate the Total Unutilized Revolving Loan 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
Revolving Loan Commitment of each Bank with such a Commitment, (ii)
the reduction to the Total Unutilized Revolving Loan Commitment shall
in no case be in an amount which would cause the Revolving Loan Com-
mitment of any Bank to be reduced (as required by preceding clause
(i)) by an amount which exceeds the remainder of (x) the Unutilized
Revolving Loan Commitment of such Bank as in effect immediately before
giving effect to such reduction minus (y) such Bank's Adjusted
Percentage of the aggregate principal amount of Swingline Loans then
outstanding and (iii) such reduction shall be applied to reduce the
then remaining Scheduled Commitment Reductions in the direct order of
maturity after giving effect to all prior reductions thereto.
(b) In the event of certain refusals by a Bank 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 Banks, 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 its
Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks) terminate all of the Revolving Loan
Commitment of such Bank so long as all Loans, together with accrued
and unpaid interest, Fees and all other amounts, owing to such Bank
(other than amounts owing in respect of any Term Loans maintained by
such Bank, if such Term Loans are not being repaid pursuant to Section
13.12(b)) 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 Bank shall no
longer constitute a "Bank" 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 Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total
Commitment (and the Term Loan Commitment and Revolving Loan Commitment
of each Bank) shall terminate in its entirety on July 7, 1997 unless
the Third Restatement 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 Term Loan Commitment (and the
Term Loan Commitment of each Bank) shall (i) terminate in its entirety
on the Third Restatement Effective Date (after giving effect to the
making of the Term Loans on such date) and (ii) prior to the
termination of the Total Term Loan Commitment as provided in clause
(i) above, be reduced from time to time to the extent required by
Section 4.02.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment
(and the Revolving Loan Commitment of each Bank) shall terminate in
its entirety on the Revolving Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date set forth below, the Total
Revolving Loan Commitment shall be permanently reduced by the amount
set forth opposite such date (each such reduction, as same may be
further reduced in accordance with Sections 3.02 and 3.03(f), a
"Scheduled Commitment Reduction"):
Scheduled Commitment Reduction Date Amount
Last Business Day in September, 1999 $ 75,000,000
Last Business Day in September, 2000 $ 100,000,000
Revolving Loan Maturity Date $ 300,000,000
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Third
Restatement Effective Date upon which a mandatory prepayment of Term
Loans pursuant to Section 4.02(A)(b), (c) or (d) is required (and
exceeds in amount the aggregate principal amount of Term Loans then
outstanding) or would be required if Term Loans were then outstanding,
the Total Revolving Loan Commitment shall be permanently reduced by
the amount, if any, by which the amount required to be applied
pursuant to said Section (determined as if an unlimited amount of Term
Loans were actually outstanding) exceeds the aggregate principal
amount of Term Loans then outstanding.
(f) Any amount required to be applied to reduce the Total
Revolving Loan Commitment pursuant to this Section 3.03 (other than
Scheduled Commitment Reductions pursuant to Section 3.03(d)) shall be
applied to reduce the then remaining Scheduled Commitment Reductions
on a pro rata basis (based upon the then remaining principal amounts
of Scheduled Commitment Reductions after giving effect to all prior
reductions thereto).
(g) Each reduction to the Total Revolving Loan Commitment
pursuant to this Section 3.03 shall be applied proportionately to
reduce the Revolving Loan Commitment of each Bank.
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
its 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 Term Loans, 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
Banks; (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; (iii) at the time of any prepayment of
Eurodollar Loans pursuant to this Section 4.01 on any date other than
the last day of the Interest Period applicable thereto, the Borrowers
shall pay the amounts required pursuant to Section 1.11; and (iv) each
prepayment in respect of any Loans made pursuant to a Borrowing shall
be applied pro rata among such Loans, provided that at the Borrowers'
election in connection with any prepayment of Loans, such prepayment
shall not be applied to the prepayment of Loans of a Defaulting Bank.
(b) In the event of certain refusals by a Bank 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 Banks, the Borrowers may, upon five
Business Days' written notice by an Authorized Representative of the
Borrowers to the Administrative Agent at its Notice Office (which
notice the Administrative Agent shall promptly transmit to each of the
Banks) repay all Loans, together with accrued and unpaid interest,
Fees, and other amounts owing to such Bank in accordance with, and
subject to the requirements of, said Section 13.12(b) so long as (A)
the Commitments of such Bank 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 Sec-
tion 13.12(b) in connection with the repayment pursuant to this
clause (b) have been obtained.
4.02 Mandatory Repayments, Cash Collateralizations and
Commitment Reductions.
(A) Requirements:
(a) (i) On any day on which the sum of the aggregate out-
standing principal amount of the Revolving Loans made by Non-
Defaulting Banks, Swingline Loans and the Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Loan Commitment as
then in effect, the Borrowers jointly and severally agree to prepay
principal of Swingline Loans and, after the Swingline Loans have been
repaid in full, Revolving Loans of Non-Defaulting Banks in an amount
equal to such excess. If, after giving effect to the prepayment of
all outstanding Swingline Loans and Revolving Loans of Non-Defaulting
Banks, the aggregate amount of the Letter of Credit Outstandings
exceeds the Adjusted Total Revolving Loan 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 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 or Cash Equivalents to be held as security for all
obligations of the Borrowers to Non-Defaulting Banks hereunder in a
cash collateral account to be established by the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal
amount of the Revolving Loans made by any Defaulting Bank exceeds the
Revolving Loan Commitment of such Defaulting Bank, the Borrowers
jointly and severally shall prepay principal of Revolving Loans of
such Defaulting Bank in an amount equal to such excess.
(b) (i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date
after the Third Restatement Effective Date upon which Furniture Brands
or any of its Restricted Subsidiaries receives any cash proceeds from
any incurrence by Furniture Brands or any of its Restricted Subsidi-
aries of Indebtedness for borrowed money ((w) including Permitted
Subordinated Indebtedness, but excluding, so long as no Default or
Event of Default then exists (I) an amount of Permitted Subordinated
Indebtedness incurred and simultaneously used to repay, refinance or
otherwise replace the Receivables Facility in accordance with the
terms hereof and (II) subject to compliance with the proviso to
Section 9.04(ii) on the date of the incurrence of such Indebtedness,
up to $50,000,000 of Permitted Subordinated Indebtedness issued
pursuant to Section 9.04(ii)(x), less the sum of the aggregate
principal amount of Permitted Subordinated Indebtedness issued after
the Second Restatement Effective Date as consideration in connection
with Permitted Acquisitions and the aggregate amount of Disqualified
Preferred Stock issued on or prior to the date of the incurrence of
such Permitted Subordinated Indebtedness pursuant to Section
9.12(b)(i) and issued as consideration in connection with one or more
Permitted Acquisitions, to the extent such proceeds of the incurrence
of Permitted Subordinated Indebtedness are or were used to effect
Permitted Acquisitions or so long as an Authorized Representative of
the Borrowers has delivered a certificate to the Administrative Agent
on or prior to such date stating that such proceeds shall be committed
to be used to make such Permitted Acquisitions within six months
following the date of such incurrence of Permitted Subordinated
Indebtedness, and so long as such proceeds are so used within such
time frame, it being understood and agreed that any amount of proceeds
not so used within such time frame shall at the end of such six month
period be required to be applied as otherwise provided in this clause
(b), (x) subject to compliance with the proviso to Section 9.04(iii)
on the date of the incurrence of such Indebtedness, excluding up to
$25,000,000 of proceeds of Permitted Unsecured Indebtedness incurred
pursuant to Section 9.04(iii), minus the aggregate amount of
Disqualified Preferred Stock issued on or prior to the date of the
incurrence of such Permitted Unsecured Indebtedness pursuant to
Section 9.12(b)(ii), (y) including Attributed Receivables Facility
Indebtedness incurred pursuant to the Receivables Facility which in
aggregate principal amount exceeds $240,000,000 outstanding at any
time (but excluding other Attributed Receivables Facility
Indebtedness) and (z) excluding any other Indebtedness for borrowed
money permitted to be incurred pursuant to Section 9.04 (excluding,
however, clauses (ii), (iii) and (xi) thereof) as such Section is in
effect on the Third Restatement Effective Date), an amount equal to
100% (or (x) 50% if the Leverage Ratio, after giving effect to the
respective debt incurrence, is less than 4.0:1.0 but greater than or
equal to 2.75:1.0 or (y) 0% if the Leverage Ratio, after giving effect
to the respective debt incurrence, is less than 2.75:1.0, in each case
so long as no Default or Event of Default exists on the date of the
respective incurrence of debt) of the Net Cash Proceeds of the
respective incurrence of Indebtedness shall be applied as a mandatory
repayment of principal of the then outstanding Term Loans.
(ii) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date
after the Third Restatement Effective Date upon which Furniture Brands
or any of its Restricted Subsidiaries receives any cash proceeds from
any issuance of Disqualified Preferred Stock ((y) excluding any amount
of equity proceeds actually used, at the time of the receipt thereof,
to make Guaranty Payments pursuant to Section 9.10(b)(ii)(y)(C) and
(z) excluding, so long as no Default or Event of Default then exists
(I) proceeds of Disqualified Preferred Stock issued pursuant to
Section 9.12(b)(iii) which are used to repay or otherwise replace the
Receivables Facility in accordance with the terms hereof, (II) subject
to compliance with the proviso to Section 9.12(b) on the date of the
respective issuance of Disqualified Preferred Stock, up to $50,000,000
of proceeds received from the issuance of Disqualified Preferred Stock
pursuant to Section 9.12(b)(i), minus the sum of the aggregate
liquidation preference or amount of Disqualified Preferred Stock
directly issued after the Second Restatement Effective Date as
consideration in connection with Permitted Acquisitions and the
aggregate principal amount of Permitted Subordinated Indebtedness
incurred on or prior to the date of the issuance of such Disqualified
Preferred Stock pursuant to Section 9.04(ii)(x) and issued as
consideration in connection with one or more Permitted Acquisitions or
otherwise not required to be used to reduce commitments as a result of
clause (b)(i)(w)(II) above, to the extent all such proceeds from the
issuance of Disqualified Preferred Stock are or were used to effect
Permitted Acquisitions or so long as an Authorized Representative of
the Borrowers has delivered a certificate to the Administrative Agent
on or prior to such date stating that such proceeds shall be committed
to be used to make Permitted Acquisitions within six months following
the date of such issuance of Disqualified Preferred Stock, and so long
as such proceeds are so used in such time frame, it being understood
and agreed that any amount of proceeds not so used within such time
frame shall at the end of such six month period be required to be
applied as otherwise provided in this clause (d) and (III) subject to
compliance with the proviso to Section 9.12(b) on the date of the
respective issuance of Disqualified Preferred Stock, up to $25,000,000
of proceeds of Disqualified Preferred Stock issued pursuant to Section
9.12(b)(ii), minus the aggregate principal amount of Permitted
Unsecured Indebtedness incurred on or prior to such date of issuance
pursuant to Section 9.04(iii)), an amount equal to 100% (or (x) 50% if
the Leverage Ratio, on the date of the respective issuance, is less
than 4.0:1.0 but greater than or equal to 2.75:1.0 or (y) 0% if the
Leverage Ratio, on the date of the respective issuance, is less than
2.75:1.0, in each case so long as no Default or Event of Default
exists on the date of the respective issuance) of the Net Cash Pro-
ceeds of the respective issuance shall be applied as a mandatory
repayment of principal of the then outstanding Term Loans.
(c) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date
after the Third Restatement Effective Date upon which Furniture Brands
or any of its Restricted Subsidiaries (other than the Receivables
Subsidiary) receives proceeds from any sale or other disposition of
assets (including capital stock and securities held thereby, but ex-
cluding (i) sales or transfers of inventory in the ordinary course of
business, (ii) sales or transfers of assets with a fair market value
less than (A) $100,000 per such sale or disposition (or in a series of
related sales or dispositions) and (B) with respect to any sale or
transfer in an amount in excess of the amount referred to in clause
(A) above, $1,000,000 in the aggregate for all such transfers in any
Fiscal Year, (iii) sales or transfers of assets permitted pursuant to
Sections 9.02 (v) and (vi), and (iv) sales of Excluded Assets, the Net
Sale Proceeds of which do not exceed $7,000,000), an amount equal to
75% of the Net Sale Proceeds therefrom shall be applied as a mandatory
repayment of principal of the then outstanding Term Loans.
(d) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, within 10 days
following each date after the Third Restatement Effective Date on
which Furniture Brands or any of its Restricted Subsidiaries receives
any proceeds from any Recovery Event (other than proceeds from
Recovery Events in an amount less than (A) $100,000 per each Recovery
Event and (B) with respect to any Recovery Event with proceeds in
excess of the amount referred to in clause (A) above, $1,000,000 in
the aggregate for all such Recovery Events in any Fiscal Year), an
amount equal to 100% of the proceeds of such Recovery Event (net of
reasonable costs including, without limitation, legal costs and ex-
penses, and taxes incurred in connection with such Recovery Event)
shall be applied as a mandatory repayment of principal of the then
outstanding Term Loans, provided that (x) so long as no Default or
Event of Default then exists and such proceeds do not exceed
$5,000,000, such proceeds shall not be required to be so applied on
such date to the extent that an Authorized Representative of the
Borrowers has delivered a certificate to the Administrative Agent on
or prior to such date stating that such proceeds shall be used or
shall be committed to be used to replace or restore any properties or
assets in respect of which such proceeds were paid within one year
following the date of such Recovery Event (which certificate shall set
forth the estimates of the proceeds to be so expended) and (y) so long
as no Default or Event of Default then exists and to the extent that
(a) the amount of such proceeds exceeds $5,000,000, (b) the amount of
such proceeds, together with other cash available to the Borrowers and
permitted to be spent by them or their Restricted Subsidiaries on
Capital Expenditures during the relevant period pursuant to Section
9.07, equals at least 100% of the cost of replacement or restoration
of the properties or assets in respect of which such proceeds were
paid as determined by the Borrowers and as supported by such estimates
or bids from contractors or subcontractors or such other supporting
information as the Administrative Agent may reasonably request, (c) an
Authorized Representative of the Borrower has delivered to the
Administrative Agent a certificate on or prior to the date the
application would otherwise be required pursuant to this Section
4.02(A)(d) in the form described in clause (x) above and also
certifying its determination as required by preceding clause (b) and
certifying the sufficiency of business interruption insurance as
required by succeeding clause (d), and (d) an Authorized
Representative of the Borrower has delivered to the Administrative
Agent such evidence as the Administrative Agent may reasonably request
in form and substance reasonably satisfactory to the Administrative
Agent establishing that the Borrowers have sufficient business
interruption insurance and that the Borrowers will receive payment
thereunder in such amounts and at such times as are necessary to
satisfy all obligations and expenses of the Borrowers (including,
without limitation, all debt service requirements, including pursuant
to this Agreement) without any delay or extension thereof, for the
period from the date of the respective casualty, condemnation or other
event giving rise to the Recovery Event and continuing through the
completion of the replacement or restoration of respective properties
or assets, then the entire amount of the proceeds of such Recovery
Event and not just the portion in excess of $5,000,000 shall be
deposited with the Administrative Agent pursuant to a cash collateral
arrangement reasonably satisfactory to the Administrative Agent
whereby such proceeds shall be disbursed to the Borrowers from time to
time as needed to pay actual costs incurred by them in connection with
the replacement or restoration of the respective properties or assets
(pursuant to such certification requirements as may be established by
the Administrative Agent), provided further, that at any time while an
Event of Default has occurred and is continuing, the Required Banks
may direct the Administrative Agent (in which case the Administrative
Agent shall, and is hereby authorized by the Borrowers to, follow said
directions) to apply any or all proceeds then on deposit in such
collateral account to the repayment of Obligations hereunder in the
same manner as proceeds would be applied pursuant to the Security
Agreement, and provided further, that if all or any portion of such
proceeds not required to be applied as a mandatory repayment pursuant
to the second preceding proviso (whether pursuant to clause (x) or (y)
thereof) are either (A) not so used or committed to be so used within
one year after the date of the respective Recovery Event or (B) if
committed to be used within one year after the date of receipt of such
Net Sale Proceeds and not so used within 18 months after the date of
respective Recovery Event then, in either such case, such remaining
portion not used or committed to be used in the case of preceding
clause (A) and not used in the case of preceding clause (B) shall be
applied on the date which is the first anniversary of the date of the
respective Recovery Event in the case of clause (A) above or the date
occurring 18 months after the date of the respective Recovery Event in
the case of clause (B) above as a mandatory repayment of principal of
the then outstanding Term Loans.
(B) Application:
(a) With respect to each repayment of Loans required by this
Section 4.02, the Borrowers may designate the Types of 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 this Section 4.02 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 Loans required by this Section 4.02
shall, except as otherwise expressly set forth in Section 4.02(A)(a),
be applied pro rata among such 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.
(b) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, (i) all the outstanding Term Loans shall
be repaid in full on the Term Loan Maturity Date, (ii) all then
outstanding Revolving Loans shall be repaid in full on the Revolving
Loan Maturity Date and (iii) all then outstanding Swingline Loans
shall be repaid on the Swingline Expiry Date.
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
Bank or Banks 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 of the Administrative Agent.
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 Bank
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 Bank 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 sen-
tence, the Borrowers agree to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net
income or net profits of such Bank pursuant to the laws of the
jurisdiction in which the principal office or applicable lending
office of such Bank is located or under the laws of any political
subdivision or taxing authority of any such jurisdiction in which the
principal office or applicable lending office of such Bank is located
and for any withholding of income or similar taxes imposed by the
United States of America as such Bank shall determine are payable by,
or withheld from, such Bank in respect of such amounts so paid to or
on behalf of such Bank pursuant to the preceding sentence and in
respect of any amounts paid to or on behalf of such Bank 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 Bank, and reimburse such Bank upon
its written request, for the amount of any Taxes so levied or imposed
and paid by such Bank.
(b) Each Bank 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 Third
Restatement Effective Date, or in the case of a Bank that is an
assignee or transferee of an interest under this Agreement pursuant to
Section 1.13 or 13.04 (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), on the
date of such assignment or transfer to such Bank, (i) two accurate
and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying to such Bank'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 Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 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-8 (or successor form) certifying to such Bank'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 Bank agrees that from time to
time after the Third Restatement 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 4224 or 1001,
or Form W-8 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 Bank 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. 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 Bank
which is not a United States person (as such term is defined in Sec-
tion 7701(a)(30) of the Code) for U.S. Federal income tax purposes to
the extent that such Bank 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 Bank in respect of income or similar taxes imposed by the
United States if (I) such Bank 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 Bank described in clause (ii)
above, to the extent that such forms do not establish a complete
exemption from with-holding 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 Bank
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 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 Initial Credit Events.
The obligation of each Bank to make Loans, and the obligation of each
Issuing Bank to issue Letters of Credit, on the Third Restatement
Effective Date, is subject at the time of the making of such Loans or
the issuance of such Letters of Credit to the satisfaction of the
following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Third
Restatement 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 Banks the appropriate Term Note and/or Revolving Note executed by
the Borrowers, and to BTCo the Swingline Note executed by the Bor-
rowers, in each case in the amount, maturity and as otherwise provided
herein.
5.02 Fees, etc. On the Third Restatement Effective Date, all
costs, fees and expenses (including, without limitation, legal fees
and expenses) payable to the Agents and the Banks shall have been paid
to the extent then due.
5.03 Opinions of Counsel. On the Third Restatement Effective
Date, the Administrative Agent shall have received (i) from the
General Counsel to Furniture Brands and its Restricted Subsidiaries,
an opinion addressed to the Agents and each of the Banks and dated the
Third Restatement Effective Date covering the matters set forth in
Exhibit E-1 and (ii) from ▇▇▇▇▇ ▇▇▇▇ LLP, special counsel to Furniture
Brands and its Restricted Subsidiaries, an opinion addressed to the
Agents and each of the Banks and dated the Third Restatement Effective
Date covering the matters set forth in Exhibit E-2.
5.04 Corporate Documents; Proceedings; etc. (a) On the
Third Restatement Effective Date, the Administrative Agent shall have
received bring-down certificates of all Credit Parties (x) certifying
that there were no changes, or providing the text of any changes, to
the Certificate of Incorporation and By-Laws of such Credit Parties as
delivered pursuant to Section 5.04 of the Original Credit Agreement,
Section 5.04 of the First Restated Credit Agreement or Section 5.04 of
the Existing Credit Agreement, as the case may be and (y) to the
effect that each such Credit Party is in good standing in its
respective state of incorporation and in those states where each such
Credit Party conducts business.
(b) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by
this Agreement and the other Documents shall be reasonably
satisfactory in form and substance to the Administrative Agent and the
Administrative Agent shall have received all information and copies of
all documents and papers, including records of corporate proceedings,
governmental approvals, good standing certificates and bring-down
telegrams, if any, which the Administrative Agent reasonably may have
requested in connection therewith, such documents and papers where
appropriate to be certified by proper corporate or governmental
authorities.
5.05 Shareholders' Agreements; Collective Bargaining Agree-
ments; Permitted Debt Agreements; Tax Sharing Agreements. On or prior
to the Third Restatement Effective Date, the Administrative Agent
shall have received (i) a certification from an Authorized
Representative of Furniture Brands that all agreements and plans
referenced in Section 5.05(a) of the Original Credit Agreement,
Section 5.05(a) of the First Restated Credit Agreement and Section
5.05(a) of the Existing Credit Agreement, as the case may be,
previously delivered to the Administrative Agent by each Credit Party,
remain in full force and effect (or specifying which of such
agreements and plans do not remain in full force and effect) and (ii)
any amendments thereto or additional such agreements.
5.06 Solvency; Environmental Analyses; Insurance Matters. On
or prior to the Third Restatement Effective Date, the Borrowers shall
cause to be delivered to the Administrative Agent (i) a solvency
certificate from the Chief Financial Officer of Furniture Brands, in
the form of Exhibit F hereto, setting forth his conclusions that,
after giving effect to the Transaction and the incurrence of all the
financings contemplated herein, Furniture Brands and its Subsidiaries
(on a consolidated basis), is not insolvent, and has not been rendered
insolvent by the Indebtedness in connection therewith, will not be
left with unreasonably small capital with which to engage in its
and/or their businesses and will not have incurred debts beyond its
and/or their ability to pay such debts as they mature, (ii) such
environmental updates as may have been requested by the Administrative
Agent, the results of which will be in scope, form and substance
acceptable to the Agents, and (iii) evidence of insurance complying
with the requirements of Section 8.03 for the business and properties
of Furniture Brands and its Restricted Subsidiaries, in scope, form
and substance reasonably satisfactory to the Agents and naming the
Collateral Agent as an additional insured and/or loss payee, and stat-
ing that such insurance shall not be cancelled or revised without 30
days' prior written notice by the insurer to the Administrative Agent.
5.07 Subsidiary Guaranty. On or prior to the Third
Restatement Effective Date, each Subsidiary Guarantor shall have duly
authorized, executed and delivered the Third Amended and Restated
Subsidiary Guaranty in the form of Exhibit G hereto (as modified,
supplemented or amended from time to time, the "Subsidiary Guaranty").
5.08 Pledge Agreement. On or prior to the Third Restatement
Effective Date, each Credit Party shall have duly authorized, executed
and delivered the Third Amended and Restated Pledge Agreement in the
form of Exhibit H (as modified, supplemented or amended from time to
time, the "Pledge Agreement") and shall have delivered to the Collat-
eral Agent, as Pledgee, all the Pledged Securities referred to therein
then owned by such Credit Party, (x) endorsed in blank in the case of
promissory notes constituting Pledged Securities and (y) together with
executed and undated stock powers, in the case of capital stock
constituting Pledged Securities.
5.09 Security Agreement. On or prior to the Third
Restatement Effective Date, each Credit Party shall have duly
authorized, executed and delivered the Third Amended and Restated
Security Agreement in the form of Exhibit I (as modified, supplemented
or amended from time to time, the "Security Agreement") covering all
of such Credit Party's present and future Security Agreement Collat-
eral, together with:
(a) proper Financing Statements or amendments thereto (Form
UCC-1 or UCC-3, respectively) fully executed for filing under the UCC
or other appropriate filing offices of each jurisdiction as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect (or maintain the perfection of) the security
interests purported to be created (or maintained) by the Security
Agreement and evidence satisfactory to the Collateral Agent that such
Financing Statements shall be filed prior to any UCC-1 Financing
Statements filed pursuant to the Receivables Facility;
(b) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing
statements that name any Credit Party as debtor and that are filed in
the jurisdictions referred to in clause (a) above, together with
copies of such other financing statements (none of which shall cover
the Collateral except to the extent evidencing Permitted Liens or in
respect of which the Collateral Agent shall have received termination
statements (Form UCC-3) or such other termination statements as shall
be required by local law) fully executed for filing;
(c) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect (or maintain the perfection of) the security
interests intended to be created (or maintained) by the Security
Agreement;
(d) lockbox agreements and other agreements from deposit banks
utilized pursuant to the Cash Management System, recognizing the
security interests granted pursuant thereto and directing payments
from deposit accounts to be made to the Concentration Account; and
(e) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect (or maintain the perfection of) the security interests
purported to be created (or maintained) by the Security Agreement have
been taken.
5.10 Mortgage Amendments; etc. On or prior to the Third
Restatement Effective Date, the Collateral Agent shall have received:
(i) fully executed counterparts of amendments (the "Mortgage
Amendments"), in form and substance satisfactory to the Administrative
Agent and the Required Banks, to each of the Existing Mortgages,
together with evidence that counterparts of each of the Mortgage
Amendments have been delivered to the title company insuring the Lien
of the Existing Mortgages for recording in all places to the extent
necessary or desirable, in the judgment of the Collateral Agent,
effectively to maintain a valid and enforceable first priority ▇▇▇▇-
▇▇▇▇ lien (subject to Permitted Encumbrances relating thereto) on the
Existing Mortgaged Properties in favor of the Collateral Agent (or
such other trustee as may be required or desired under local law) for
the benefit of the Secured Creditors; and
(ii) endorsements reasonably satisfactory to the Collateral
Agent to each Existing Mortgage Policy assuring the Collateral Agent
that each Existing Mortgage is a valid and enforceable first priority
mortgage lien on the respective Existing Mortgaged Properties, free
and clear of all defects and encumbrances except Permitted Encum-
brances.
5.11 Consent Letter. On or prior to the Third Restatement
Effective Date, the Administrative Agent shall have received a letter
from CT Corporation System, presently located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, substantially in the form of Exhibit J, indi-
cating its consent to its appointment by each Credit Party as its
agent to receive service of process as specified in Section 13.08 or
in the respective Security Document.
5.12 Adverse Change; Governmental Approvals; etc. (a) On
the Third Restatement Effective Date, nothing shall have occurred (and
the Banks shall have become aware of no facts, conditions or other
information not previously known) which the Agents reasonably believe
could have a material adverse effect on the rights or remedies of the
Administrative Agent or the Banks, or on the ability of the Credit
Parties to perform their respective obligations to the Administrative
Agent and the Banks or which the Agents reasonably believe would have
a material adverse effect on the operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrowers taken as a whole or the Borrowers and their Restricted
Subsidiaries taken as a whole.
(b) On the Third Restatement Effective Date, there shall not
have occurred and be continuing material adverse change to the
syndication market for credit facilities similar in nature to this
Agreement and there shall not have occurred and be continuing a
material disruption of or a material adverse change in financial,
banking or capital markets that would have a material adverse effect
on the syndication, in each case as determined by the Administrative
Agent in its sole discretion.
(c) On or prior to the Third Restatement Effective Date, all
necessary and material governmental (domestic and foreign) and third
party approvals in connection with the Transaction 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 Transaction. 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 Transaction.
5.13 Litigation. On the Third Restatement Effective Date, no
litigation by any entity (private or governmental) shall be pending or
threatened with respect to the Transaction or any documentation
executed in connection therewith (including any Credit Document), or
which the Administrative Agent or the Required Banks shall reasonably
believe could have a materially adverse effect on the Transaction or
the business, property, assets, nature of assets, liabilities, con-
dition (financial or otherwise) or prospects of the Borrowers taken as
a whole or the Borrowers and their Restricted Subsidiaries taken as a
whole.
5.14 Pro Forma Balance Sheet; Financial Statements;
Projections. (a) On or prior to the Third Restatement Effective Date,
there shall have been delivered to the Administrative Agent an un-
audited pro forma consolidated and consolidating balance sheet of
Furniture Brands and its Subsidiaries as of March 31, 1997 and after
giving effect to the Transaction and prepared in accordance with
generally accepted accounting principles, together with (x) historical
consolidated and consolidating statements of income and consolidated
statements of cash flow of Furniture Brands and its Subsidiaries, in
each case, for the three-month period ended March 31, 1997 and (y)
historical consolidated and consolidating statements of income and
consolidated statements of cash flow of Furniture Brands and its
Subsidiaries for the five Fiscal Years ended December 31, 1996, which
historical statements shall (i) be audited, in the case of the income
and cash flow statements for the three most recent Fiscal Years and in
the case of the balance sheets for the two most recent Fiscal Years
and (ii) be certified by an officer of either Furniture Brands or the
other Borrowers, as the case may be, in the case of the five most
recent Fiscal Years.
(b) On or prior to the Third Restatement Effective Date there
shall have been delivered to the Administrative Agent "management
case" projected financial statements of Furniture Brands and its
Restricted Subsidiaries after giving effect to the Transaction, as set
forth in the Confidential Memorandum dated June 1997, for the period
from January 1, 1997 to December 31, 2001 (the "Projections"), which
Projections (x) shall reflect the forecasted financial conditions and
income and expenses of Furniture Brands and its Restricted
Subsidiaries after giving effect to the Transaction and the related
financing thereof and the other transactions contemplated hereby and
(y) shall be satisfactory in form and substance to the Administrative
Agent.
5.15 Refinancing; Existing Credit Agreement; etc. On the
Third Restatement Effective Date, (i) unless otherwise agreed by the
Administrative Agent and Furniture Brands, each Existing Bank shall
have surrendered to the Administrative Agent for cancellation the
promissory notes issued to it pursuant to the Existing Credit
Agreement in respect of its Existing Revolving Loans and Existing
Swingline Loans, (ii) all Existing Swingline Loans shall be repaid in
full and all outstanding Existing Revolving Loans shall continue to be
outstanding on, and immediately after giving effect to, the Third
Restatement Effective Date, (iii) each Existing Bank shall have
received payment in full of all amounts then due and owing to it under
the Existing Credit Agreement, (iv) the Borrowers shall have paid all
accrued and unpaid interest and fees owing under the Existing Credit
Agreement through the Third Restatement Effective Date, and (v) the
Administrative Agent shall have received evidence in form, scope and
substance satisfactory to it that the matters set forth in this
Section 5.15 have been satisfied on such date.
5.16 Consummation of the Stock Repurchase. (a) On or prior
to the Third Restatement Effective Date, there shall have been
delivered to the Banks true and correct copies of the Stock Repurchase
Agreement, and all terms of the Stock Repurchase Agreement and the
other Stock Repurchase Documents shall be satisfactory in form and
substance to the Administrative Agent and the Required Banks. The
Stock Repurchase Agreement (and the transactions contemplated thereby)
shall have been duly approved by the board of directors and (if
required by applicable law) the stockholders of Furniture Brands, and
all Stock Repurchase Documents shall have been duly executed and
delivered by the parties thereto and shall be in full force and
effect. Each of the conditions precedent to the obligation of the
parties to consummate the Stock Repurchase as set forth in the Stock
Repurchase Documents shall have been satisfied, or waived, all to the
satisfaction of the Administrative Agent, and concurrently with the
making of the Term Loans on the Third Restatement Effective Date, the
Stock Repurchase shall have been consummated in accordance with the
Stock Repurchase Documents delivered to and as approved by the
Administrative Agent and the Required Lenders and all applicable laws,
rules and regulations.
(b) On or prior to the Third Restatement Effective Date the
Borrower shall have purchased 10,842,299 shares of Furniture Brands
Common Stock and warrants to purchase 290,821 shares of Furniture
Brands Common Stock for an aggregate purchase price of $173,300,000 in
accordance with the terms and conditions of the Stock Repurchase
Agreement and the other Stock Repurchase Documents delivered to and as
approved by the Administrative Agent and the Required Lenders executed
in connection therewith (collectively, the "Stock Repurchase").
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Loans (including Loans made on the
Third Restatement Effective Date but excluding Mandatory Borrowings
made thereafter, which shall be made as provided in Section 1.01(d)),
and the obligation of an Issuing Bank 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 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 under-
stood 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).
6.02 Notice of Borrowing; Letter of Credit Request. (a)
Prior to the making of each 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, BTCo
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 Bank 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 Banks that all the conditions specified in
Section 5 and in this Section 6 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 Bank, the Required Banks and/or the Administrative
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 Banks and,
except for the Notes, in sufficient counterparts or copies for each of
the Banks and shall be in form and substance reasonably satisfactory
to the Banks.
SECTION 7. Representations, Warranties and Agreements. In
order to induce the Banks 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
Transaction consummated on the Third Restatement 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
Third Restatement Effective Date being deemed to constitute a repre-
sentation and warranty that the matters specified in this Section 7
are true and correct in all material respects on and as of the Third
Restatement 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. Furniture Brands and each of its
Restricted Subsidiaries (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, (ii) has the corporate power and authority 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 qualifi-
cations, 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 power and authority to execute, deliver and perform the
terms and provisions of each of the Documents to which it is party and
has taken all necessary corporate action to authorize the execution,
delivery and performance by it of each of such Documents. Each Credit
Party has duly executed and delivered each of the Documents to which
it is party, and each of such 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 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 crea-
tion or imposition of (or the obligation to create or impose) any Lien
(except pursuant to the Security Documents) upon any of the material
properties or assets of Furniture Brands or any of its Restricted
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 Restricted 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 of Furniture Brands or any of its Restricted Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or
registration with (except (i) as have been obtained or made prior to
the Third Restatement Effective Date and (ii) other than UCC-1 or UCC-
3 filings and recordings of Assignments of Security Interests in U.S.
Patents and Trademarks, in each case, performed pursuant to Section
5.09, which filings and/or recordings, as the case may be, if this
representation is being made on a date which is more than ten days
after the Third Restatement Effective Date, have been made), or exemp-
tion by, any governmental or public body or authority, or any sub-
division thereof, is required to authorize, or is required in
connection with, (i) the execution, delivery and performance of any
Document or (ii) the legality, validity, binding effect or enforce-
ability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) (i) The consolidated and
consolidating statements of financial condition of Furniture Brands
and its Subsidiaries at December 31, 1996 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 Year ended on such date, and furnished
to the Banks prior to the Third Restatement Effective Date and (ii)
the consolidated and consolidating statements of financial condition
of Furniture Brands and its Subsidiaries as of the end of each fiscal
quarter of Furniture Brands ended after December 31, 1996, and the
related consolidated and consolidating statements of income and
consolidated statements of cash flow of Furniture Brands and its
Subsidiaries for such quarterly periods, and furnished to the Banks
prior to the Third Restatement Effective Date, in each case, present
fairly the financial condition of Furniture Brands and its Subsi-
diaries (or Furniture Brands and its Restricted Subsidiaries, as the
case may be) at the date of such statements of financial condition and
the results of the operations of Furniture Brands and its Subsidiaries
(or Furniture Brands and its Restricted Subsidiaries as the case may
be) for the respective Fiscal Year or fiscal quarter, as the case may
be (subject, in the case of unaudited financial statements, to normal
year-end adjustments). All such financial statements have been pre-
pared in accordance with generally accepted accounting principles and
practices consistently applied, except, in the case of the quarterly
financial statements, for the omission of footnotes, and certain
reclassifications and ordinary end of period adjustments and accruals
(all of which are of a recurring nature and none of which
individually, or in the aggregate, would be material).
(b) Since December 31, 1996, there has been no material
adverse change in the business, operations, property, assets, liabil-
ities, condition (financial or otherwise) or prospects of the
Borrowers taken as a whole or of the Borrowers and their Restricted
Subsidiaries taken as a whole, it being understood that any
determination of whether such material adverse change has occurred
shall take into account, inter alia, (x) any available indemnities and
(y) the timing and likelihood of payment thereunder.
(c) (i) On and as of the Third Restatement Effective Date,
after giving effect to the Transaction and to all Indebtedness
(including the Loans) being incurred or assumed and Liens created (or
maintained) by the Credit Parties in connection therewith (assuming
the full utilization of all Revolving Loan Commitments on the Third
Restatement Effective Date), (a) the sum of the assets, at a fair
valuation, of each Borrower, individually, each Borrower and its
Subsidiaries, (each of the foregoing, as to itself or as to itself and
its Subsidiaries, a "Solvent Entity") will exceed its or their debts;
(b) each Solvent Entity has not incurred and does not intend to incur,
and does not believe that it will incur, debts beyond its ability to
pay such debts as such debts mature; and (c) each Solvent Entity will
have sufficient capital with which to conduct its businesses. For
purposes of this Section 7.05(c), "debt" means any liability on a
claim, and "claim" means (i) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contin-
gent, matured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured or (ii) right to an equitable remedy for breach
of performance if such breach gives rise to a right to payment, whe-
ther or not such right to an equitable remedy is reduced to judgment,
fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(d) Except as fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) or (b) or in Schedule IV, there
were as of the Third Restatement 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 in-
dividually or in aggregate, is reasonably likely to have a Material
Adverse Effect. As of the Third Restatement Effective Date, none of
the Borrowers knows of any basis for the assertion against it of any
liability or obligation of any nature whatsoever that is not fully
disclosed in the financial statements delivered pursuant to Section
7.05(a) or (b) or as disclosed in Schedule IV hereto which, either in-
dividually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(e) On and as of the Third Restatement Effective Date, the
Projections previously delivered to the Administrative Agent and the
Banks have been prepared on a basis consistent with the financial
statements referred to in Section 7.05(a) (other than as set forth or
presented in such Projections), and there are no statements or conclu-
sions in any of the Projections which are based upon or include
information known to the Borrowers to be misleading in any material
respect or which fail to take into account material information
regarding the matters reported therein. On the Third Restatement
Effective Date, the Borrowers believed that the Projections were
reasonable and attainable.
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 Document or (ii) 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 the Administrative Agent or any
Bank (including, without limitation, all factual information contained
in the 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 the Administrative Agent or any
Bank 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 Term Loans shall be used by the Borrowers to (x) consummate the
Transaction and (y) pay fees and expenses related thereto.
(b) All proceeds of the Revolving Loans and Swingline Loans
shall be used for the Borrowers' and their Subsidiaries' ongoing
general corporate purposes; provided that not more than $348,000,000
in aggregate principal amount of Revolving Loans and Swingline Loans
shall be outstanding on the Third Restatement Effective Date.
(c) The value of the Margin Stock at any time owned by the
Borrowers and their respective Subsidiaries does not, and will not,
exceed 25% of the value of the assets of the Borrowers and their
Subsidiaries taken as a whole. 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 Regula-
tion G, T, U or X of the Board of Governors of the Federal Reserve
System.
7.09 Tax Returns and Payments. (a) Each of Furniture
Brands and its Restricted Subsidiaries have 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 Restricted Subsidiaries. The Returns accur-
ately reflect in all material respects all liability for taxes of
Furniture Brands and its Restricted Subsidiaries for the periods
covered thereby other than Taxes for which adequate reserves have been
established in accordance with generally accepted accounting
principles. Each of Furniture Brands and its Restricted Subsidiaries
have 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) or (b) and except
as disclosed on Schedule V, there is, as of the Third Restatement Ef-
fective 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 Restricted Subsidiaries. As of the Third
Restatement Effective Date, except as set forth on Schedule V, none of
Furniture Brands or its Restricted Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or
waiver extending any statute of limitations relating to the payment or
collection of taxes of Furniture Brands or its Restricted Subsi-
diaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of Furniture Brands or its Restricted
Subsidiaries not to be subject to the normally applicable statute of
limitations. As of the Third Restatement Effective Date, none of
Furniture Brands or its Restricted Subsidiaries has provided, with
respect to themselves or property held by them, any consent under
Section 341 of the Code. Except for amounts specifically set forth in
Schedule V, none of Furniture Brands or its Restricted Subsidiaries
has incurred, or will incur, any material tax liability in connection
with the Transaction and the other transactions contemplated hereby.
Additionally, all of the foregoing representations are true and
correct as to all Unrestricted Subsidiaries of Furniture Brands (to
the same extent they were Restricted Subsidiaries) except to the
extent any and all failures to be true and correct could not
reasonably be expected to have a Material Adverse Effect.
Notwithstanding anything to the contrary contained above, to the
extent the foregoing representations contained in this Section 7.09
relate to Thomasville and its Subsidiaries for periods prior to the
First Restatement Effective Date, such representations shall be deemed
untrue only if the aggregate effect of all such failures and
noncompliances of the types described above with respect to
Thomasville and its Subsidiaries for periods prior to the First
Restatement Effective Date would reasonably be expected to have a
Material Adverse Effect.
(b) Furniture Brands' tax basis in the shares of capital stock
of (x) Converse spun-off in connection with the Converse Disposition
was an amount not less than $165,000,000 at the time of the
consummation thereof and (y) Florsheim spun-off in connection with the
Florsheim Disposition was an amount not less than $50,000,000.
7.10 Compliance with ERISA. (a) Each Plan is in sub-
stantial 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, and to the best
knowledge of the Borrowers, no Spunoff 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; all
contributions required to be made by the Borrowers, any of their
respective Restricted Subsidiaries or any ERISA Affiliate with respect
to a Plan, a Spunoff Plan, a Multiemployer Plan, and/or a Foreign
Pension Plan have been timely made; none of the Borrowers or any of
their respective Restricted Subsidiaries nor any ERISA Affiliate has
incurred any liability to or on account of a Plan, a Spunoff Plan,
and/or a Multiemployer Plan pursuant to Section 409, 502(i), 502(1),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971, 4975 or 4980 of the Code or reasonably expects to
incur any liability (including any indirect, contingent or secondary
liability) under any of the foregoing Sections with respect to any
Plan, a Spunoff Plan, and/or a Multiemployer Plan; no proceedings have
been instituted to terminate or appoint a trustee to administer any
Plan and, to the best knowledge of the Borrowers, any Spunoff Plan; no
condition exists which presents a risk to the Borrowers or any of
their respective Restricted Subsidiaries or any ERISA Affiliate of
incurring a liability to or on account of a Plan, or to the best
knowledge of the Borrowers a Spunoff 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 respective Restricted Subsidiaries and their ERISA
Affiliates to all Multiemployer Plans in the event of a complete with-
drawal 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, would not exceed $50,000; no lien imposed under
the Code or ERISA on the assets of the Borrowers or any of their
respective Restricted Subsidiaries or any ERISA Affiliate exists on
account of any Plan, a Spunoff Plan, and/or a Multiemployer Plan or is
likely to arise on account of any Plan, or to the best knowledge of
the Borrowers, is likely to arise on account of any Spunoff Plan
and/or Multiemployer Plan; and the Borrowers and their respective
Restricted Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which
provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee pen-
sion benefit plan (as defined in Section 3(2) of ERISA) the
obligations with respect to which could reasonably be expected to have
a Material Adverse Effect. For purposes of this Section 7.10(a) "to
the best knowledge of the Borrowers" with respect to any Spunoff Plan
means (x) actual knowledge or (y) knowledge acquired through written
or oral notice provided directly to a Borrower by any governmental
agency, court, or Spunoff Plan administrator.
(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 Restricted 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 The Security Documents. (a) The provisions of the
Security Agreement are effective to create (or maintain) in favor of
the Collateral Agent for the benefit of the Secured Creditors a legal,
valid and enforceable security interest in all right, title and
interest of the Credit Parties in the Security Agreement Collateral
described therein, and the Security Agreement, upon the filing of Form
UCC-1 or UCC-3 financing statements or the appropriate equivalent
(which filings, if this representation is being made more than 10 days
after the Third Restatement Effective Date, have been made), create
(or maintain) a fully perfected first lien on, and security interest
in, all right, title and interest in all of the Security Agreement
Collateral described therein, to the extent that a security interest
may be perfected therein by filing a financing statement under the
UCC, subject to no other Liens other than Permitted Liens. The
recordation of the Assignment of Security Interest in U.S. Patents and
Trademarks in the form attached to the Security Agreement in the
United States Patent and Trademark Office together with filings on
Form UCC-1 or UCC-3 made pursuant to the Security Agreement will be
effective, under applicable law, to perfect the security interest
granted to the Collateral Agent in the trademarks and patents covered
by the Security Agreement. Each of the Credit Parties party to the
Security Agreement has good and valid title to all Security Agreement
Collateral owned by such Credit Party described therein, free and
clear of all Liens except those described above in this clause (a).
(b) The security interests created in favor of the Collateral
Agent, as Pledgee, for the benefit of the Secured Creditors under the
Pledge Agreement constitute first priority perfected security
interests in the Pledged Securities described in the Pledge Agreement,
subject to no security interests of any other Person. No filings or
recordings are required in order to perfect (or maintain the
perfection or priority of) the security interests created in the
Pledged Securities and the proceeds thereof under the Pledge Agree-
ment.
(c) The Mortgages create, as security for the obligations
purported to be secured thereby, a valid and enforceable perfected
security interest in and mortgage lien on all of the Mortgaged
Properties in favor of the Collateral Agent (or such other trustee as
may be required or desired under local law) for the benefit of the
Secured Creditors, superior to and prior to the rights of all third
persons (except that the security interest and mortgage lien created
in the Mortgaged Properties may be subject to the Permitted
Encumbrances related thereto) and subject to no other Liens (other
than Permitted Liens). Schedule III contains a true and complete list
of each parcel of Real Property owned or leased by Furniture Brands
and its Restricted Subsidiaries on the Third Restatement Effective
Date, and the type of interest therein held by Furniture Brands or
such Restricted Subsidiary. Furniture Brands and each of its
Restricted Subsidiaries have good and indefeasible title to all fee-
owned Mortgaged Properties and valid leasehold title to all Leaseholds
material to its business, in each case free and clear of all Liens
except those described in the first sentence of this subsection (c).
7.12 Representations and Warranties in Other Documents. All
representations and warranties set forth in the Documents other than
this Agreement were true and correct in all material respects at the
time as of which such representations and warranties were made (or
deemed made) and shall be true and correct in all material respects as
of the Third Restatement Effective Date as if such representations and
warranties were made on and as of such date, unless stated to relate
to a specific earlier date, in which case such representations and
warranties shall be true and correct in all material respects as of
such earlier date. Notwithstanding anything to the contrary contained
above, to the extent that the representations and warranties set forth
in the Documents other than this Agreement were made by parties other
than Furniture Brands and its Subsidiaries, such representations and
warranties shall be deemed untrue only if the aggregate effect of all
inaccuracies in such representations and warranties would reasonably
be expected to have a Material Adverse Effect.
7.13 Properties. Furniture Brands and each of its Restricted
Subsidiaries have 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) and (b) and in the pro forma balance
sheet referred to in Section 5.14 (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 (i) as referred to in the balance sheet
or in the notes thereto or in the pro forma balance sheet or (ii)
Permitted Liens otherwise permitted by Section 9.01.
7.14 Capitalization. (a) On the Third Restatement Ef-
fective Date, the authorized capital stock of Furniture Brands
consists of 100,000,000 shares of Furniture Brands Common Stock, $1.00
stated value per share, 61,517,707 shares of which are issued and
outstanding as of May 31, 1997. As of the Third Restatement Effective
Date, Furniture Brands does not have outstanding any securities con-
vertible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options for the
purchase of, or any agreement providing for the issuance (contingent
or otherwise) of, or any calls, commitments or claims of any character
relating to, its capital stock, in each case other than the options
outstanding pursuant to the Employee Stock Option Plan and the
Furniture Brands Warrants.
(b) On the Third Restatement Effective Date, the authorized
capital stock of Broyhill consists of 5,296,178 shares of common
stock, no par value per share, 100 shares of which are issued and
outstanding and have been delivered for pledge pursuant to the Pledge
Agreement. All such outstanding shares of common stock have been duly
and validly issued, are fully paid and nonassessable. As of the Third
Restatement Effective Date, Broyhill does not have outstanding any
securities convertible into or exchangeable for its capital stock or
outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of
any character relating to, its capital stock.
(c) On the Third Restatement Effective Date, the authorized
capital stock of Lane consists of 1,000 shares of common stock, no par
value per share, all of which are issued and outstanding and have been
delivered for pledge pursuant to the Pledge Agreement. All such
outstanding shares of common stock have been duly and validly issued,
are fully paid and nonassessable. As of the Third Restatement
Effective Date, Lane does not have outstanding any securities convert-
ible into or exchangeable for its capital stock or outstanding any
rights to subscribe for or to purchase, or any options for the
purchase of, or any agreements providing for the issuance (contingent
or otherwise) of, or any calls, commitments or claims of any character
relating to, its capital stock.
(d) On the Third Restatement Effective Date, the authorized
capital stock of Thomasville consists of 50,000,000 shares of common
stock, $1.00 par value per share, 7,500,000 shares of which are issued
and outstanding and have been delivered for pledge pursuant to the
Pledge Agreement. All such outstanding shares of common stock have
been duly and validly issued, are fully paid and nonassessable. As of
the Third Restatement Effective Date, Thomasville does not have out-
standing any securities convertible into or exchangeable for its
capital stock or outstanding any rights to subscribe for or to pur-
chase, or any options for the purchase of, or any agreements providing
for the issuance (contingent or otherwise) of, or any calls, commit-
ments or claims of any character relating to, its capital stock.
7.15 Subsidiaries. (a) On the Third Restatement Effective
Date, Furniture Brands has no Subsidiaries other than the other
Borrowers, their respective Subsidiaries and the Receivables
Subsidiary (which is owned by Broyhill, Lane, Action and Thomasville).
(b) After the Third Restatement Effective Date, Furniture
Brands will have no Subsidiaries other than (i) those Subsidiaries
listed on Schedule VI and (ii) new Subsidiaries created in compliance
with this Agreement.
7.16 Compliance with Statutes, etc. Furniture Brands and
each of its Subsidiaries are 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
(including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
7.17 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.
7.18 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.
7.19 Environmental Matters. (a) Furniture Brands and
each of its Subsidiaries have complied with all applicable Environ-
mental Laws and the requirements of any permits issued under such
Environmental Laws. There are no pending or, to the best knowledge of
the Borrowers after due inquiry, threatened Environmental Claims
against Furniture Brands, or any of its Subsidiaries or any Real
Property owned or operated by Furniture Brands or any of its
Subsidiaries. There are no facts, circumstances, conditions or
occurrences on any Real Property owned or operated by Furniture Brands
or any of its Subsidiaries or, to the best knowledge of Furniture
Brands or the Borrowers after due inquiry, on any property adjoining
or in the vicinity of any such Real Property that, to the best knowl-
edge of the Borrowers after due inquiry, could reasonably be expected
(i) to form the basis of an Environmental Claim against Furniture
Brands or any of its Subsidiaries or any such Real Property or (ii) to
cause any such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property by
Furniture Brands or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real
Property owned or operated by Furniture Brands or any of its
Subsidiaries except in compliance with all applicable Environmental
Laws and so as not to give rise to an Environmental Claim. Hazardous
Materials have not at any time been Released on or from any Real
Property owned or operated by Furniture Brands or any of its
Subsidiaries except in compliance with all applicable Environmental
Laws and so as not to give rise to an Environmental Claim.
(c) Notwithstanding anything to the contrary in this Section
7.19, the representations made in this Section 7.19 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.
7.20 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.
7.21 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.
7.22 Indebtedness. Schedule VII sets forth a true and
complete list of all Indebtedness for borrowed money of Furniture
Brands and its Restricted Subsidiaries as of the Third Restatement
Effective Date and which is to remain outstanding after giving effect
to the Transaction (excluding the Loans and the Letters of Credit and
the Attributed Receivables Facility Indebtedness, the "Existing
Indebtedness"), in each case showing the aggregate principal amount
thereof and the name of the respective borrower and any other entity
which directly or indirectly guaranteed such debt all of which
Existing Indebtedness is or shall be evidenced by the Permitted Debt
Agreements.
7.23 Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in all respects in accordance
with the terms of the respective Documents and all applicable laws.
At the time of consummation of the Transaction, all consents and
approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the
Transaction will have been obtained, given, filed or taken and are or
will be in full force and effect (or effective judicial relief with
respect thereto has been obtained), except where the failure to so
obtain, give, file or take would not have 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 of the Borrowers and their Restricted Subsidiaries taken as a
whole. All applicable waiting periods with respect thereto have or,
prior to the time when required, will have, expired without, in all
such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the
Transaction. Additionally, there does not exist any judgment, order
or injunction prohibiting or imposing material adverse conditions upon
the Transaction or the occurrence of any Credit Event or the
performance by the Credit Parties of their obligations under the
respective Documents. All actions taken by the Credit Parties
pursuant to or in furtherance of the Transaction have been taken in
material compliance with the respective Documents and all applicable
laws.
7.24 Special Purpose Corporation. The Receivables Subsidiary
was formed for the purpose of purchasing, and receiving contributions
of, receivables from each of the Borrowers (other than Furniture
Brands) and their respective Restricted Subsidiaries, and selling such
receivables to, or obtaining secured loans from, the Receivables
Purchasers, pursuant to the Receivables Facility and except in
connection with the foregoing (and activities reasonably incidental
thereto), the Receivables Subsidiary engages in no business activities
and has no significant assets or liabilities and shall in no event
purchase receivables from any Unrestricted Subsidiary.
SECTION 8. Affirmative Covenants. Each of the Borrowers
hereby covenants and agrees that on and after the Third Restatement
Effective Date and until the Total Commitment and all Letters of
Credit and Acceptances have terminated and the Loans, Notes and Unpaid
Drawings, together with interest, 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 Bank:
(a) Monthly Reports. Within 30 days after the end of each
calendar month of Furniture Brands (within 45 days after the end of
the last month of each Fiscal Year), the consolidated and
consolidating balance sheets of Furniture Brands and its Subsidiaries,
in each case, as at the end of such month, and the related con-
solidated and consolidating statements of income and the consolidated
statement of cash flow for such month and for the elapsed portion of
the calendar year ended with the last day of such month, in each case
setting forth comparative figures for the corresponding month in the
prior calendar year and the budgeted figures for such month as set
forth in the respective budget delivered pursuant to Section 8.01(e).
(b) 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
and consolidating balance sheets of Furniture Brands and its
Subsidiaries, in each case, as at the end of such quarterly period and
the related consolidated and consolidating statements of income and
the consolidated statement of 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.
(c) 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 (A) certified,
in the case of such consolidated financial statements and (B)
confirmed by a letter, in the case of the consolidating statements,
delivered in substantially the form of the auditor's letter delivered
to Furniture Brands on January 28, 1997, in each case by KPMG Peat
Marwick 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 9.02 through 9.15, inclusive,
has occurred and is continuing, a statement as to the nature thereof
and (ii) management's discussion and analysis of the important opera-
tional and financial developments during such Fiscal Year.
(d) Management Letters. Promptly after the receipt thereof
by Furniture Brands or any of its Restricted Subsidiaries, a copy of
any "management letter" received by such Person from their certified
public accountants and the management's responses thereto.
(e) Budgets. No later than 30 days following the
commencement of the first day of each Fiscal Year, a budget in form
satisfactory to the Administrative Agent (including budgeted
statements of income and sources and uses of cash and balance sheets)
prepared by Furniture Brands for (x) each of the twelve months of such
Fiscal Year prepared in detail and (y) each of the four Fiscal Years
immediately following such Fiscal Year prepared in summary form, in
each case, of Furniture Brands and its Restricted Subsidiaries, accom-
panied by the statement of an Authorized Representative of Furniture
Brands to the effect that, to the best of his knowledge, the budget is
a reasonable estimate for the period covered thereby.
(f) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Section 8.01(a), (b) and (c),
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, in the case of any such financial statements
delivered in respect of a period ending on the last day of a fiscal
quarter or year of Furniture Brands, (x) set forth the calculations
required to establish whether the Borrowers were in compliance with
the provisions of Sections 4.02(A) (excluding Section 4.02(A)(d),
9.02, 9.03, 9.04, 9.05 and 9.07 through 9.09, inclusive, and 9.15 at
the end of such fiscal quarter or year, as the case may be, and (y)
set forth the calculation of the Leverage Ratio and Senior Debt
Leverage Ratio and the amount of the Available $25 Million Dividend
Basket Amount, Available $10 Million Acquisition/Investment Basket
Amount, Available Debt Proceeds Amount, Available Unrestricted
Proceeds Amount, Available Net Income Amount, Consolidated Cumulative
25% Net Income Amount, Available Permitted Acquisition Amount,
Returned Investment Amount and Available Returned Investment Amount at
the end of the period covered by such financial statements, and all
sources and uses of proceeds relating to the calculation thereof
changing during the period covered by such statements.
(g) 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 and (ii) any
litigation or governmental investigation or proceeding pending (x)
against Furniture Brands or any of its Subsidiaries which could
reasonably be expected to materially and adversely affect the busi-
ness, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of the Borrowers taken as a whole or the
Borrowers and their Restricted Subsidiaries taken as a whole, (y) with
respect to any material Indebtedness of Furniture Brands and its
Restricted Subsidiaries taken as a whole or (z) with respect to any
Document.
(h) 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 Restricted
Subsidiaries shall file with the Securities and Exchange Commission or
any successor thereto (the "SEC") or deliver to holders of its
Indebtedness pursuant to the terms of the documentation governing such
Indebtedness (or any trustee, agent or other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event
within ten Business Days after, an executive officer of Furniture
Brands or any of its Restricted Subsidiaries obtains knowledge
thereof, notice of one or more of the following environmental matters,
unless such environmental matters could not, individually or when
aggregated with all other such environmental matters, be reasonably
expected to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrowers taken as a whole or of the Borrowers and
their Restricted Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim against
Furniture Brands or any of its Subsidiaries or any Real Property owned
or operated by Furniture Brands or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any Real
Property owned or operated by Furniture Brands or any of its Subsidi-
aries that (a) results in noncompliance by Furniture Brands or any of
its Subsidiaries with any applicable Environmental Law or (b) could
reasonably be expected to form the basis of an Environmental Claim
against Furniture Brands or any of its Subsidiaries or any such Real
Property;
(iii) any condition or occurrence on any Real Property owned or
operated by Furniture Brands or any of its Subsidiaries that could
reasonably be expected to cause such Real Property to be subject to
any restrictions on the ownership, occupancy, use or transferability
by Furniture Brands or any of its Subsidiaries of such Real Property
under any Environmental Law; and
(iv) the taking of any removal or remedial action in response to
the actual or alleged presence of any Hazardous Material on any Real
Property owned or operated by Furniture Brands or any of its Subsidi-
aries as required by any Environmental Law or any governmental or
other administrative agency; provided that in any event the Borrowers
shall deliver to each Bank all notices received by them or any of
their respective Subsidiaries from any government or governmental
agency under, or pursuant to, CERCLA.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action, and the Borrowers' or such Subsidiary's response thereto. In
addition, the Borrowers will provide the Banks with copies of all
material communications with any government or governmental agency
relating to Environmental Laws, all communications with any Person
(other than its attorneys) relating to any Environmental Claim of
which notice is required to be given pursuant to this Section
8.01(i), and such detailed reports of any such Environmental Claim as
may reasonably be requested by the Banks.
(j) Annual Meetings with Banks. At the request of the
Administrative Agent, Furniture Brands shall within 120 days after the
close of each Fiscal Year hold a meeting at a time and place selected
by Furniture Brands and reasonably acceptable to the Administrative
Agent with all of the Banks at which meeting shall be reviewed the
financial results of the previous Fiscal Year and the financial condi-
tion of Furniture Brands and the budgets presented for the current
Fiscal Year.
(k) 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 Bank may reasonably
request in writing.
8.02 Books, Records and Inspections. The Borrowers will, and
will cause each of their respective Restricted 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 transac-
tions in relation to its business and activities. The Borrowers will,
and will cause each of their respective Restricted Subsidiaries to,
permit officers and designated representatives of the Agents or the
Required Banks to visit and inspect, after reasonable notice during
regular business hours and under guidance of officers of the Borrowers
or such Restricted Subsidiary, any of the properties of the Borrowers
or such Restricted Subsidiary, and to examine the books of account of
the Borrowers or such Restricted Subsidiary and discuss the affairs,
finances and accounts of the Borrowers or such Restricted 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 Bank may request.
8.03 Maintenance of Property; Insurance. (a) Schedule VIII
sets forth a true and complete listing of all insurance (including
self-insurance programs) maintained by Furniture Brands and its
Restricted Subsidiaries as of the Third Restatement Effective Date.
The Borrowers will, and will cause each of their respective Restricted
Subsidiaries to, (i) keep all property necessary in its business in
good working order and condition (ordinary wear and tear excepted),
(ii) maintain insurance on all its property in at least such amounts
and against at least such risks as is consistent and in accordance
with industry practice and (iii) furnish to the Administrative Agent,
upon written request, full information as to the insurance carried.
In addition to the requirements of the immediately preceding sentence,
the Borrowers will at all times cause insurance of the types described
in Schedule VIII to be maintained (with the same scope of coverage as
that described in Schedule VIII) at levels which are at least as great
as the respective amount described opposite the respective type of
insurance on Schedule VIII under the column headed "Minimum Amount
Required to be Maintained."
(b) Except with respect to self-insurance programs listed on
Schedule VIII, the Borrowers will, and will cause their respective
Restricted Subsidiaries to, at all times keep their respective prop-
erty insured in favor of the Collateral Agent, and all policies
(including Mortgage Policies) or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance
maintained by the Borrowers or any of their respective Restricted Sub-
sidiaries) (i) shall be endorsed to the Collateral Agent's
satisfaction for the benefit of the Collateral Agent (including,
without limitation, by naming the Collateral Agent as loss payee or as
an additional insured (provided that Furniture Brands and its
Restricted Subsidiaries shall be permitted to settle claims in an
amount less than $10,000,000 per claim, so long as the proceeds from
such claims are applied in accordance with Section 4.02(A)(d)), (ii)
shall state that such insurance policies shall not be cancelled
without 30 days' prior written notice thereof by the respective
insurer to the Collateral Agent, (iii) shall provide that the
respective insurers irrevocably waive any and all rights of
subrogation with respect to the Collateral Agent and the Secured
Creditors, (iv) shall contain the standard non-contributory mortgagee
clause endorsement in favor of the Collateral Agent with respect to
hazard insurance coverage, (v) shall, except in the case of public
liability insurance and workers' compensation insurance, provide that
any losses shall be payable notwithstanding (A) any act or neglect of
the Borrowers or any of their respective Restricted Subsidiaries, (B)
the occupation or use of the properties for purposes more hazardous
than those permitted by the terms of the respective policy if such
coverage is obtainable at commercially reasonable rates and is of the
kind from time to time customarily insured against by Persons owning
or using similar property and in such amounts as are customary, (C)
any foreclosure or other proceeding relating to the insured properties
if such coverage is available at commercially reasonable rates or (D)
any change in the title to or ownership or possession of the insured
properties and (vi) shall be deposited with the Collateral Agent if
such coverage is available at commercially reasonable rates.
(c) If the Borrowers or any of their respective Restricted
Subsidiaries shall fail to maintain all insurance in accordance with
this Section 8.03, or if the Borrowers or any of their respective
Restricted Subsidiaries shall fail to so endorse and deposit all
policies or certificates with respect thereto, the Administrative
Agent and/or the Collateral Agent shall have the right (but shall be
under no obligation) after giving notice to Furniture Brands (but not
requiring any consent from Furniture Brands) to procure such insurance
and the Borrowers agree to jointly and severally reimburse the
Administrative Agent or the Collateral Agent, as the case may be, for
all costs and expenses of procuring such insurance.
8.04 Corporate Franchises. The Borrowers will, and will
cause each of their respective Restricted 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 Restricted Subsidiaries in
accordance with Section 9.02 or (ii) (x) the withdrawal by Furniture
Brands or any of the Restricted 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 Banks, 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 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 Compliance with Environmental Laws. (a) The
Borrowers will comply, and will cause each of their respective Subsid-
iaries to comply, in all material respects with all Environmental Laws
applicable to the ownership or use of its Real Property now or
hereafter owned or operated by Furniture Brands or any of its
Subsidiaries, will within a reasonable time period pay or cause to be
paid all costs and expenses incurred in connection with such compli-
ance, and will keep or cause to be kept all such Real Property free
and clear of any Liens on such Real Property imposed pursuant to such
Environmental Laws; provided that, none of Furniture Brands nor any of
its Subsidiaries shall be required to remove any such Liens, so long
as the aggregate amount of obligations purported to be secured by such
Liens does not exceed $1,000,000, and such Liens are 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. None of Furniture Brands nor any of its
Subsidiaries will generate, use, treat, store, release or dispose of,
or permit the generation, use, treatment, storage, release or disposal
of Hazardous Materials on any Real Property now or hereafter owned or
operated by Furniture Brands or any of its Subsidiaries, or transport
or permit the transportation of Hazardous Materials to or from any
such Real Property except for Hazardous Materials used or stored at
any such Real Properties in material compliance with all applicable
Environmental Laws and reasonably required in connection with the
operation, use and maintenance of any such Real Property.
(b) At the written request of the Administrative Agent or the
Required Banks, which request shall specify in reasonable detail the
basis therefor, at any time and from time to time, the Borrowers will
provide, at the Borrowers' joint and several cost and expense, an
environmental site assessment report concerning any Real Property now
or hereafter owned or operated by Furniture Brands or any of its
Subsidiaries, prepared by an environmental consulting firm approved by
the Administrative Agent, indicating the presence or absence of
Hazardous Materials and the potential cost of any removal or remedial
action in connection with any Hazardous Materials on such Real
Property; provided, that such request may be made only if (i) there
has occurred and is continuing an Event of Default, (ii) the
Administrative Agent reasonably believes that Furniture Brands, any of
its Subsidiaries or any such Real Property is not in material com-
pliance with Environmental Law, or (iii) circumstances exist that
reasonably could be expected to form the basis of a material Environ-
mental Claim against Furniture Brands, any of its Subsidiaries or any
such Real Property. If the Borrowers fail to provide the same within
90 days after such request was made, the Administrative Agent may
order the same, and the Borrowers shall grant and hereby grant to the
Administrative Agent and the Banks and their agents access to such
Real Property and specifically grant the Administrative Agent and the
Banks an irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment, all at the Borrowers' joint
and several expense.
8.07 ERISA. As soon as possible and, in any event, within
20 days after the Borrowers or any of their respective Restricted
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 Bank 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 Restricted 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 Restricted 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 modi-
fication of the minimum funding standard (including any required in-
stallment payments) or an extension of any amortization period under
Section 412 of the Code with respect to a Plan, Multiemployer Plan
and/or a Spunoff Plan; that a contribution required to be made to a
Plan, Multiemployer Plan and/or Foreign Pension Plan has not been
timely made; that a Plan, Multiemployer Plan and/or a Spunoff Plan has
been or is reasonably expected to be terminated, reorganized, parti-
tioned or declared insolvent under Title IV of ERISA; that a Plan,
Multiemployer Plan and/or a Spunoff Plan has an Unfunded Current
Liability giving rise to a lien under ERISA or the Code; that proceed-
ings are likely to be or have been instituted or notice has been given
to terminate or appoint a trustee to administer a Plan, Multiemployer
Plan and/or a Spunoff 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 Restricted 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, Multiemployer
Plan and/or a Spunoff Plan under Section 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or with respect to a Plan, Multiemployer Plan
and/or a Spunoff Plan under Section 401(a)(29), 4971, 4975 or 4980 of
the Code or Section 409 or 502(i) or 502(l) of ERISA; or except as
disclosed on Schedule XVI, that the Borrowers or any Restricted
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 Banks a complete copy of the
annual report (Form 5500) of each Plan (including, to the extent
required to be filed with the Internal Revenue Service in connection
with such annual report, the related financial and actuarial state-
ments and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal
Revenue Service. In addition to any certificates or notices delivered
to the Banks pursuant to the first sentence hereof, copies of such
annual reports and any material notices received by the Borrowers or
any of their respective Restricted Subsidiaries or any ERISA Affiliate
with respect to any Plan, Multiemployer Plan, Spunoff Plan and/or
Foreign Pension Plan shall be delivered to the Banks no later than 20
days after the date such report has been requested or such notice has
been received by the Borrowers, the Restricted Subsidiary or the ERISA
Affiliate, as applicable. For purposes of this Section 8.07 "knows or
has reason to know" with respect to any Spunoff Plan means knowledge
acquired through written or oral notice provided directly to a
Borrower by any governmental agency, court, or Spunoff Plan
administrator.
8.08 End of Fiscal Years; Fiscal Quarters. Furniture Brands
shall cause (i) each of its Fiscal Years to end on December 31, and
each of its fiscal quarters to end on the last day of each March,
June, September and December and (ii) each of its Restricted
Subsidiaries' (x) fiscal years to end on the closest Saturday to
December 31 and (y) fiscal quarters to end on the closest Saturday to
the last day of each March, June, September and December.
8.09 Performance of Obligations. Each of the Borrowers will,
and will cause each of its Subsidiaries to, perform all of its
obligations under the terms of each mortgage, indenture, security
agreement and other debt instrument by which it is bound, except such
non-performances as could not, individually or in the aggregate, rea-
sonably be expected to have 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 of the
Borrowers and the Restricted Subsidiaries taken as a whole.
8.10 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 belong-
ing 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 Restricted 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.
8.11 Additional Security; Further Assurances; Required
Appraisals. (a) The Borrowers will, and will cause each of their
respective Restricted Subsidiaries to, grant to the Collateral Agent
security interests and mortgages (an "Additional Mortgage") in such
Real Property (other than Real Property encumbered by (i) liens
incurred by a Restricted Subsidiary at a time when it was an
Unrestricted Subsidiary, to the extent such Liens are otherwise
permitted by this Agreement and (ii) Liens securing Indebtedness
permitted pursuant to Section 9.04 (vii), but only until such time as
such Indebtedness is repaid) of the Borrowers or any of their
respective Restricted Subsidiaries as are not covered by the original
Mortgages, to the extent such Real Property is acquired after the
Third Restatement Effective Date and either (x) the cost (including
assumed Indebtedness) of such Real Property is in excess of $2,500,000
or (y) the respective Additional Mortgage has been requested by the
Required Banks (each such Real Property, an "Additional Mortgaged
Property"). All such Additional Mortgages shall be granted pursuant
to documentation substantially in the form of the Mortgages delivered
to the Administrative Agent on the Original Effective Date or the
First Restatement Effective Date or in such other form as is rea-
sonably satisfactory to the Administrative Agent and shall constitute
valid and enforceable perfected Liens superior to and prior to the
rights of all third Persons and subject to no other Liens except as
are permitted by Section 9.01 at the time of perfection thereof. The
Additional Mortgages or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are
required by law to establish, perfect, preserve and protect the Liens
in favor of the Collateral Agent required to be granted pursuant to
the Additional Mortgages and all taxes, fees and other charges payable
in connection therewith shall have been paid in full.
(b) The Borrowers will, and will cause each of their
respective Restricted Subsidiaries to, at the joint and several
expense of the Borrowers, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, powers of attorney,
certificates, real property surveys, reports and other assurances or
instruments and take such further steps relating to the Collateral
covered by any of the Security Documents as the Collateral Agent may
reasonably require pursuant to this Section 8.11. Furthermore, the
Borrowers shall cause to be delivered to the Collateral Agent such
opinions of counsel, title insurance and other related documents as
may be requested by the Collateral Agent to assure itself that this
Section 8.11 has been complied with.
(c) Each Borrower agrees to cause each Restricted Subsidiary
established or created in accordance with Section 9.11 to execute and
deliver a guaranty of all Obligations and all obligations under
Interest Rate Protection Agreements in substantially the form of the
Subsidiary Guaranty, or by becoming a party to the Subsidiary
Guaranty.
(d) Each Borrower agrees to pledge all of the capital stock of
each new Subsidiary (other than any Subsidiary of an Unrestricted
Subsidiary) created in accordance with Section 9.11 to the Collateral
Agent for the benefit of the Secured Creditors pursuant to the Pledge
Agreement.
(e) Each Borrower will cause each Restricted Subsidiary
established or created in accordance with Section 9.11 to grant to the
Collateral Agent a first priority Lien on all property (tangible and
intangible) of such Subsidiary upon terms similar to those set forth
in the Security Documents as appropriate, and satisfactory in form and
substance to the Administrative Agent and Required Banks. Each
Borrower shall cause each of its respective Restricted Subsidiaries,
at its own expense, to execute, acknowledge and deliver, or cause the
execution, acknowledgement and delivery of, and thereafter register,
file or record in any appropriate governmental office, any document or
instrument reasonably deemed by the Collateral Agent to be necessary
or desirable for the creation and perfection of the foregoing Liens.
Each Borrower will cause each of its respective Restricted
Subsidiaries to take all actions requested by the Administrative Agent
(including, without limitation, the filing of UCC-1s) in connection
with the granting of such security interests.
(f) The security interests required to be granted pursuant to
this Section 8.11 shall be granted pursuant to security documentation
(which shall be substantially similar to the Security Documents
already executed and delivered by Furniture Brands and its Restricted
Subsidiaries, as applicable) or otherwise satisfactory in form and
substance to the Administrative Agent and shall constitute valid and
enforceable perfected security interests prior to the rights of all
third Persons and subject to no other Liens except such Liens as are
permitted by Section 9.01. The Additional Security Documents and
other instruments related thereto shall be duly recorded or filed in
such manner and in such places and at such times as are required by
law to establish, perfect, preserve and protect the Liens, in favor of
the Collateral Agent for the benefit of the respective Secured
Creditors, required to be granted pursuant to the Additional Security
Documents and all taxes, fees and other charges payable in connection
therewith shall be paid, jointly and severally, in full by the
Borrowers. At the time of the execution and delivery of the
Additional Security Documents, the Borrowers shall cause to be deliv-
ered to the Collateral Agent such opinions of counsel, Mortgage
Policies, title surveys, real estate appraisals and other related
documents as may be reasonably requested by the Administrative Agent
or the Required Banks to assure themselves that this Section 8.11 has
been complied with.
(g) In the event that the Administrative Agent or the Required
Banks at any time after the Effective Date determine in its or their
good faith discretion that real estate appraisals satisfying the
requirements of FIRREA (any such appraisal a "Required Appraisal") are
or were required to be obtained, or should be obtained, in connection
with any Mortgaged Property or Mortgaged Properties, then, within 120
days after receiving written notice thereof from the Administrative
Agent or the Required Banks, as the case may be, such Required
Appraisal shall be delivered, at the expense of the Borrowers, to the
Administrative Agent which Required Appraisal, and the respective
appraiser, shall be satisfactory to the Administrative Agent.
(h) Each of the Borrowers agrees that each action required
above by Section 8.11 (a) or (b) shall be completed as soon as
possible, but in no event later than 60 days after such action is
requested to be taken by the Administrative Agent or the Required
Banks. Each of the Borrowers further agrees that each action required
by Section 8.11(c), (d), (e) and (f) with respect to the Additional
Collateral shall be completed contemporaneously with the creation of
such new Subsidiary.
8.12 Interest Rate Protection. The Borrowers shall
maintain, for a period of at least three years after the Third
Restatement Effective Date, interest rate protection pursuant to one
or more Interest Rate Protection Agreements which establish a fixed or
maximum interest rate (whether through swaps, caps, collars, or
otherwise) acceptable to the Administrative Agent in respect of at
least (i) $300,000,000 notional principal amount of Indebtedness
through February 22, 1999, and (ii) $100,000,000 notional principal
amount of Indebtedness during the period from February 22, 1999
through the third anniversary of the Third Restatement Effective Date.
The Administrative Agent has approved the Interest Rate Protection
Agreements which are in effect on the Third Restatement Effective
Date, one of which established a fixed or maximum interest rate in
respect of $170,000,000 notional principal amount of Indebtedness
through December 31, 1997, and the others of which established fixed
or maximum interest rates in respect of $300,000,000 notional
principal amount of Indebtedness through February 22, 1999,
respectively.
8.13 Ownership of Subsidiaries. Furniture Brands shall at
all times own 100% of the outstanding capital stock of the other
Borrowers. Except to the extent otherwise expressly consented in
writing by the Required Banks and except as set forth in Schedule VI,
the Borrowers shall directly or indirectly own 100% of the capital
stock of each of their Subsidiaries (other than as permitted pursuant
to the definition of Permitted Acquisition).
8.14 Permitted Acquisitions. Subject to the provisions of
this Section 8.14, Section 9.02(vii) and the requirements contained in
the definition of Permitted Acquisition, the Borrowers and their
Restricted Subsidiaries may from time to time after the Third
Restatement Effective Date effect Permitted Acquisitions, so long as
(i) the Borrowers shall have given the Administrative Agent and the
Banks at least 10 Business Days' prior written notice of any Permitted
Acquisition, (ii) based on calculations made by the Borrowers on a Pro
Forma Basis after giving effect to the respective Permitted
Acquisition and any Indebtedness (including without limitation
Permitted Acquired Debt) or Disqualified Preferred Stock incurred,
issued or assumed in connection with the respective Permitted
Acquisition or to finance same, (x) no Default or Event of Default
will exist under, or would have existed during the periods covered by,
the financial covenants contained in Sections 9.08 and 9.09 of this
Agreement and (y) if any Indebtedness or Disqualified Preferred Stock
is being incurred, issued or assumed in connection with the respective
Permitted Acquisition or to finance same (excluding, however,
Permitted Acquired Debt in connection with any Permitted Acquisition
where the only Indebtedness or Disqualified Preferred Stock being
incurred, issued or assumed in connection therewith or to finance same
is Permitted Acquired Debt), the Senior Debt Leverage Ratio shall not
exceed 3.5:1.0, (iii) based on good faith projections prepared by the
Borrowers for the period from the date of the consummation of the
Permitted Acquisition to the date which is one year thereafter, the
level of financial performance measured by the covenants set forth in
Sections 9.08 and 9.09 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 9.08 and
9.09 of this Agreement as compliance with such covenants would be
required through the date which is one year from the date of the
consummation of the respective Permitted Acquisition, (iv) the
Administrative Agent shall have been satisfied in its reasonable dis-
cretion that the proposed Permitted Acquisition could not reasonably
be expected to result in materially increased tax, ERISA or
environmental liabilities with respect to Furniture Brands or any of
its Restricted Subsidiaries, it being understood that any deter-
mination of whether the proposed Permitted Acquisition could
reasonably be expected to result in such materially increased tax,
ERISA or environmental liabilities shall take into account, inter
alia, (x) any available indemnities and (y) the timing and likelihood
of payment thereunder and (v) the Borrowers shall have delivered to
the Administrative Agent an officer's certificate executed by an
Authorized Representative of the Borrowers, certifying (A) to the best
of his knowledge, compliance with the requirements of preceding
clauses (i), (ii) and (iii) and containing the calculations required
by the preceding clauses (ii) and (iii) and (B) compliance with the
requirements of Section 9.02(vii).
8.15 Maintenance of Corporate Separateness. Furniture Brands
will, and will cause each of its Subsidiaries to, satisfy customary
corporate formalities, including the holding of regular board of
directors' and shareholders' meetings or action by directors or
shareholders without a meeting and the maintenance of corporate
offices and records. None of the Borrowers nor any of their
respective Restricted Subsidiaries shall make any payment to a
creditor of any Unrestricted Subsidiaries in respect of any liability
of any Unrestricted Subsidiaries, and no bank account of any
Unrestricted Subsidiary shall be commingled with any bank account of
any of the Borrowers or any of their respective Restricted Subsidi-
aries. Any financial statements distributed to any creditors of any
Unrestricted Subsidiaries shall clearly establish or indicate the
corporate separateness of such Unrestricted Subsidiary from the Bor-
rowers and their respective Restricted Subsidiaries. Finally, neither
Furniture Brands nor any of its Subsidiaries shall take any action, or
conduct its affairs in a manner, which is likely to result in the cor-
porate existence of Furniture Brands or any of its Subsidiaries being
ignored, or in the assets and liabilities of the Borrowers or any of
their respective Restricted Subsidiaries being substantively ▇▇▇▇▇▇▇-
dated with those of any Unrestricted Subsidiaries in a bankruptcy,
reorganization or other insolvency proceeding.
8.16 Cash Management System. The Borrowers will, and will
cause each of their respective Restricted Subsidiaries to, utilize and
maintain the Cash Management System for all deposits made by any of
them (including the concentration of all such deposits in the
Concentration Account). The Cash Management System shall be operated
solely for the business of the Borrowers and their respective
Restricted Subsidiaries.
8.17 Margin Stock. The Borrowers will, and will cause each
of their respective Subsidiaries to, take any and all actions as may
be required to ensure that no capital stock pledged, or required to be
pledged, pursuant to any Security Document shall constitute Margin
Stock.
SECTION 9. Negative Covenants. The Borrowers covenant and
agree that on and after the Third Restatement Effective Date and until
the Commitments and all Letters of Credit and Acceptances have termi-
nated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder and there-
under, are paid in full:
9.01 Liens. The Borrowers will not, and will not permit any
of their respective Restricted 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 Restricted 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 Restricted 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, in-
▇▇▇▇▇▇▇▇, 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 Restricted 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 aggre-
gate materially detract from the value of the Borrowers' or such
Restricted Subsidiary's property or assets or materially impair the
use thereof in the operation of the business of the Borrowers or such
Restricted Subsidiary or (y) which are being contested in good faith
by appropriate proceedings, which proceedings have the effect of pre-
venting the forfeiture or sale of the property or assets subject to
any such Lien;
(iii) Liens in existence on the Third Restatement Effective Date
which are listed, and the property subject thereto described, in
Schedule IX, but only to the respective date, if any, set forth in
such Schedule IX for the removal and termination of any such Liens,
plus renewals and extensions of such Liens to the extent set forth on
Schedule IX, provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase from
that amount outstanding 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 Restricted
Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) 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 Restricted
Subsidiaries taken as a whole;
(vii) Liens upon assets subject to Capitalized Lease Obligations
of the Borrowers and their Restricted Subsidiaries to the extent
permitted by Section 9.04(vii), 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 Restricted Subsidiary of the
Borrowers;
(viii) Liens placed upon assets used in the ordinary course of
business of the Borrowers or any of their Restricted Subsidiaries at
the time of acquisition or new construction thereof by the Borrowers
or any such Restricted 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, or Liens securing Permitted Acquired Debt, 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 (viii) shall not at any time exceed the
amount permitted by Section 9.04(vii) 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 Restricted
Subsidiary;
(ix) 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 Restricted Subsidiaries;
(x) Liens arising from precautionary UCC financing statement
filings regarding operating leases entered into by the Borrowers or
any of their Restricted Subsidiaries in the ordinary course of
business;
(xi) 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 following clause (xiv));
(xii) Liens, and the filing of financing statements in
connection therewith, created by, and as set forth in, the Receivables
Documents;
(xiii) statutory and contractual landlords' liens under leases
to which the Borrowers or any of their Restricted Subsidiaries are a
party;
(xiv) Liens (other than any Lien imposed by ERISA) (x) incurred
or deposits made in the ordinary course of business of the Borrowers
and their respective Restricted Subsidiaries in connection with
workers' compensation, unemployment insurance and other types of
social security, (y) to secure the performance by the Borrowers and
their respective Restricted Subsidiaries of tenders, statutory obliga-
tions (other than excise taxes), surety, stay, customs and appeal
bonds, statutory bonds, bids, leases, government contracts, trade con-
tracts, performance and return of money bonds and other similar
obligations (exclusive of obligations for the payment of borrowed
money) or (z) to secure the performance by the Borrowers and their
respective Restricted 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 deposits at
any time pursuant to sub-clause (y) and sub-clause (z) shall not
exceed $5,000,000 in the aggregate;
(xv) any interest or title of a lessor, sublessor, licensee or
licensor under any lease or license agreement permitted by this
Agreement;
(xvi) 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 and deposits made to secure
statutory obligations in the form of excise taxes 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 the First
Restatement Effective Date, 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 ▇▇▇▇▇▇▇▇▇
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;
(xvii) 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 Restricted Subsidiaries in the
ordinary course of business in accordance with the past practices of
the Borrowers and their Restricted Subsidiaries prior to the Effective
Date; and
(xviii) Liens not otherwise permitted by the foregoing clauses
(i) through (xvii) to the extent attaching to properties and assets
with an aggregate fair value not in excess of, and securing
liabilities not in excess of, $10,000,000 in the aggregate at any time
outstanding.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
The Borrowers will not, and will not permit any of their respective
Restricted Subsidiaries to, wind up, liquidate or dissolve its affairs
or enter into any transaction of merger or consolidation, or convey,
sell, lease or otherwise dispose of (or agree to do any of the fore-
going at any future time) all or any part of its property or assets
(other than the liquidation of Cash Equivalents in the ordinary course
of business), or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related trans-
actions) any part of the property or assets (other than purchases or
other acquisitions of inventory, materials, equipment, furniture,
fixtures, and intangible assets in the ordinary course of business) of
any Person, except that:
(i) Capital Expenditures by the Borrowers and their Restricted
Subsidiaries shall be permitted to the extent not in violation of
Section 9.07;
(ii) each of the Borrowers and their Restricted Subsidiaries may
(x) in the ordinary course of business, sell, lease or otherwise
dispose of any assets which, in the reasonable judgment of such
Person, are obsolete, worn out or otherwise no longer useful in the
conduct of such Person's business, (y) sell, lease or otherwise
dispose of any other assets, provided that each such sale, lease or
disposition shall be for fair market value (other than with respect to
sales, leases or dispositions in an aggregate amount not to exceed
$100,000 per calendar year) and at least 75% of the consideration
therefor shall be in the form of cash, and provided further, that (A)
except as provided in following clause (B), the aggregate Net Sale
Proceeds of all assets subject to sales or other dispositions pursuant
to clauses (x) and (y) shall not exceed $15,000,000 in the aggregate
in any Fiscal Year and (B) in addition to sales effected pursuant to
preceding clause (A), additional assets may be sold pursuant to this
Section 9.02(ii) so long as at least 90% of the aggregate
consideration for any such asset sale shall be in the form of cash and
so long as the aggregate Net Sale Proceeds of all assets sold pursuant
to this clause (B) after the Second Restatement Effective Date do not
exceed $75,000,000, and (z) enter into transactions permitted under
Section 9.01(vi);
(iii) Investments may be made to the extent permitted by
Section 9.05;
(iv) each of the Borrowers and their Restricted Subsidiaries may
lease (as lessee) real or personal property (so long as any such lease
does not create a Capitalized Lease Obligation except to the extent
permitted by Section 9.04);
(v) each of the Borrowers and their Restricted Subsidiaries may
make sales or transfers of inventory (x) in the ordinary course of
business or (y) to any other Borrower or any Domestic Wholly-Owned
Subsidiary of Furniture Brands which is a Subsidiary Guarantor;
(vi) sales and contributions of accounts receivable to the
Receivables Subsidiary and sales of accounts receivable by the
Receivables Subsidiary to the Receivables Purchasers, and purchases
and acquisitions of accounts receivable by the Receivables Subsidiary,
in each case pursuant to the Receivables Facility shall be permitted;
(vii) the Borrowers and their respective Restricted Subsidiaries
shall be permitted to make Permitted Acquisitions so long as (A) such
Permitted Acquisitions are effected in accordance with the
requirements of Section 8.14, (B) after giving effect to any
Permitted Acquisition, the aggregate amount paid (including for the
purpose of this clause (vii) all cash consideration paid, the amount
of all Indebtedness and/or Disqualified Preferred Stock directly
issued as consideration, the face amount of all Permitted Acquired
Debt incurred or assumed and the fair market value of any merger con-
sideration, but excluding the fair market value of all Furniture
Brands Common Stock and/or Qualified Preferred Stock issued as
consideration therefor, in each case in connection with such Permitted
Acquisition) by the Borrowers and their Restricted Subsidiaries in
connection with such Permitted Acquisition shall not exceed the
Available Permitted Acquisition Amount at such time (after giving
effect to all prior and contemporaneous adjustments thereto, except as
a result of such Permitted Acquisition); provided that in no event
shall such aggregate amount paid in connection with Permitted
Acquisitions effected after the Second Restatement Effective Date
(calculated in accordance with the first parenthetical contained in
preceding clause (B)), when added to the amount of Investments made
after the Second Restatement Effective Date pursuant to Section
9.05(vii), exceed $75,000,000 plus the Returned Investment Amount as
calculated on the date any determination is being made pursuant to
this proviso, and (C) with respect to each Permitted Acquisition, no
Default or Event of Default is in existence at the time of the
consummation of such Permitted Acquisition or would exist after giving
effect thereto;
(viii) Furniture Brands may sell or otherwise dispose of any
shares of capital stock of any Unrestricted Subsidiaries owned by it;
(ix) so long as no Default or Event of Default then exists or
would result therefrom, the Borrowers or any Domestic Wholly-Owned
Subsidiary which is a Restricted Subsidiary (other than the
Receivables Subsidiary) of Furniture Brands may be merged into or
consolidated with any Borrower (so long as such Borrower is the
surviving corporation of such merger) or any other Domestic Wholly-
Owned Subsidiary which is a Restricted Subsidiary (other than the
Receivables Subsidiary) of the Borrowers;
(x) the Borrowers and their respective Restricted Subsidiaries
(other than the Receivables Subsidiary) shall be permitted to merge
with another Person (so long as such Borrower or Restricted Subsidiary
is the surviving corporation), so long as such merger is used to
effect a Permitted Acquisition in compliance with Section 9.02(vii);
and
(xi) the Borrowers may sell or otherwise dispose of Excluded
Assets.
To the extent the Required Banks (or, the Required Supermajority Banks
to the extent required by Section 13.12(a)) waive the provisions of
this Section 9.02 with respect to the sale of any Collateral, or any
Collateral is sold as permitted by this Section 9.02, such Collateral
(unless sold to Furniture Brands or a Subsidiary of Furniture Brands)
shall be sold free and clear of the Liens created by the Security
Documents, and the Administrative Agent and Collateral Agent shall be
authorized to take any actions deemed appropriate in order to effect
the foregoing.
9.03 Dividends. Furniture Brands shall not, and shall not
permit any of its Restricted Subsidiaries to, authorize, declare or
pay any Dividends with respect to Furniture Brands or any of its
Restricted Subsidiaries, except that:
(i) any Restricted Subsidiary of any Borrower may pay Dividends
to such Borrower or any Wholly-Owned Subsidiary which is a Restricted
Subsidiary of the Borrowers;
(ii) so long as no Default or Event of Default exists or would
result therefrom, Furniture Brands shall be permitted to pay Dividends
(including, without limitation, Dividends on Qualified Preferred Stock
and payments made to repurchase or redeem Furniture Brands Warrants or
outstanding capital stock of Furniture Brands) in an amount not to
exceed (A) the Available $25 Million Dividend Basket Amount on such
date (after giving effect to all prior and contemporaneous reductions
thereto, except as a result of such Dividend), plus (B) the Available
Net Income Amount on such date (after giving effect to all prior and
contemporaneous adjustments thereto, except as a result of such
Dividend) plus (C) the then Available Unrestricted Proceeds Amount
(after giving effect to all prior and contemporaneous adjustments
thereto, except as a result of such Dividend), minus (D) all Guaranty
Payments made by Furniture Brands pursuant to Section
9.10(b)(ii)(y)(A) and (B);
(iii) so long as no Default or Event of Default exists or would
result therefrom, Furniture Brands may pay regularly accruing cash
Dividends on Disqualified Preferred Stock in accordance with the terms
of the certificate of designation therefor; and
(iv) the Stock Repurchase may be consummated within 5 Business
Days after the Third Restatement Effective Date.
9.04 Indebtedness. Furniture Brands will not, and will not
permit any of its Restricted 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) Permitted Subordinated Indebtedness not to exceed (x) in an
aggregate principal amount of $150,000,000 at any time outstanding,
minus the aggregate liquidation preference or amount of all
Disqualified Preferred Stock issued on or prior to the date of the
incurrence of such Permitted Subordinated Indebtedness pursuant to
Section 9.12(b)(i), provided that to the extent Permitted Subordinated
Indebtedness is incurred under this clause (ii)(x) and (1) any portion
of such Permitted Subordinated Indebtedness is being issued as con-
sideration in connection with a Permitted Acquisition or (2) there is
not a mandatory repayment pursuant to Section 4.02(A)(b) in an amount
equal to 100% of the Net Cash Proceeds thereof, such incurrence shall
only be permitted if the Administrative Agent has received a certi-
ficate from, and signed by an Authorized Representative of, Furniture
Brands showing that immediately after the incurrence of such Permitted
Subordinated Indebtedness, the Senior Debt Leverage Ratio, calculated
on a Pro Forma Basis after giving effect to the incurrence of such
Indebtedness, shall not exceed 3.5:1.0, plus (y) an amount of
Permitted Subordinated Indebtedness incurred and simultaneously used
to repay, refinance or otherwise replace the Receivables Facility in
accordance with the terms hereof, in each case shall be permitted on
terms and conditions set forth in the definition of Permitted
Subordinated Indebtedness and on other terms and conditions reasonably
satisfactory to the Administrative Agent and the Required Banks
(provided that such other terms and conditions shall be deemed satis-
factory to the Required Banks unless objected to by the Required Banks
in writing on or prior to the date which is twenty Business Days after
the documentation therefor is delivered to the Banks);
(iii) Permitted Unsecured Indebtedness not to exceed in
aggregate principal amount $25,000,000 at any time outstanding minus
the aggregate liquidation preference or amount of all Disqualified
Preferred Stock issued on or prior to the date of the incurrence of
such Permitted Unsecured Indebtedness pursuant to Section 9.12(b)(ii),
shall be permitted on terms and conditions set forth in the definition
of Permitted Unsecured Indebtedness and on other terms and conditions
reasonably satisfactory to the Administrative Agent; provided that to
the extent Permitted Unsecured Indebtedness is incurred under this
clause (iii) and (1) any portion of such Permitted Unsecured
Indebtedness is being issued as consideration in connection with a
Permitted Acquisition or (2) there is not a mandatory repayment
pursuant to Section 4.02(A)(b) in an amount equal to 100% of the Net
Cash Proceeds thereof, such incurrence shall only be permitted if the
Administrative Agent has received a certificate from, and signed by an
Authorized Representative of, Furniture Brands showing that
immediately after the incurrence of such Permitted Unsecured
Indebtedness, the Senior Debt Leverage Ratio, calculated on a Pro
Forma Basis after giving effect to the incurrence of such Indebted-
ness, shall not exceed 3.5:1.0;
(iv) Existing Indebtedness shall be permitted to the extent the
same is listed on Schedule VII, but no refinancings or renewals
thereof, except as expressly permitted on such Schedule VII;
(v) accrued expenses and current trade accounts payable incurred
in the ordinary course of business;
(vi) Indebtedness under Interest Rate Protection Agreements
entered into in compliance with Section 8.12;
(vii) Indebtedness of the Borrowers and their Restricted
Subsidiaries evidenced by Capitalized Lease Obligations to the extent
permitted pursuant to Section 9.01(vii), and Indebtedness secured by
Liens permitted under Section 9.01(viii) and Permitted Acquired Debt;
provided that in no event shall the aggregate principal amount of
Capitalized Lease Obligations and Indebtedness permitted by this
clause (vii) exceed $20,000,000;
(viii) Indebtedness under Currency Hedging Agreements entered
into in compliance with Section 9.05(ix);
(ix) Contingent Obligations (a) of the Borrowers or any
Restricted Subsidiary as a guarantor of the lessee under any lease pur-
suant to which the Borrowers or a Restricted 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 in the ordinary course of business by its Restricted
Subsidiaries and (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 as referenced in
Section 9.01(xvi)(y);
(x) Contingent Obligations of Furniture Brands pursuant to (x)
the Surviving Guaranties; provided that the making of any payments
thereunder, and any renewals or extensions of such Surviving
Guaranties, shall be subject to restrictions set forth in Section
9.10(b) and (y) the Tax Sharing Agreements;
(xi) Indebtedness (a) consisting of Attributed Receivables
Facility Indebtedness of the Receivables Subsidiary so long as the Net
Cash Proceeds of Attributed Receivables Facility Indebtedness in
excess of $240,000,000 shall be applied to make mandatory repayments
in accordance with Section 4.02(A)(b) and (b) consisting of the
Contingent Obligations of Furniture Brands in respect of certain of
its Restricted Subsidiaries (other than the Receivables Subsidiary)
with respect to certain limited obligations under the Receivables
Facility as set forth in the Receivables Documents; and
(xii) Indebtedness among the Borrowers and their Restricted
Subsidiaries to the extent permitted pursuant to Section 9.05(v).
In furtherance of the foregoing and in no way in limitation
thereof, Furniture Brands shall not permit any Unrestricted Subsidiary
to incur any Indebtedness having any element of recourse to Furniture
Brands or its Restricted Subsidiaries or to any of their assets or
property.
9.05 Investments; etc. The Borrowers will not, and will not
permit any of their respective Restricted Subsidiaries to, directly or
indirectly, lend money or credit or make advances to any Person, or
purchase or acquire any stock, obligations or securities of, or any
other interest in, or make any capital contribution to, any other
Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a
future date in the nature of a futures contract, or hold any cash or
Cash Equivalents (any of the foregoing, an "Investment"), except that
the following shall be permitted:
(i) the Borrowers and their Restricted Subsidiaries may acquire
and hold accounts receivables owing to any of them, if created or
acquired in the ordinary course of business and payable or discharge-
able in accordance with customary terms;
(ii) the Borrowers and their Restricted Subsidiaries may acquire
and hold cash and Cash Equivalents (including cash and Cash
Equivalents held by Furniture Brands on behalf of its Restricted
Subsidiaries pursuant to the Cash Management System);
(iii) Furniture Brands and its Restricted Subsidiaries may make
loans and advances in the ordinary course of business to their
respective employees so long as the aggregate principal amount thereof
at any time outstanding (determined without regard to any write-downs
or write-offs of such loans and advances) shall not exceed $1,000,000;
(iv) the Borrowers may enter into Interest Rate Protection
Agreements to the extent permitted in Section 9.04(vi);
(v) any Credit Party or the Receivables Subsidiary may make
intercompany loans and advances to any other Credit Party;
(vi) the Borrowers may (x) establish Subsidiaries in compliance
with Section 9.11 and (y) make Investments therein as otherwise
provided in this Section 9.05;
(vii) so long as no Default or Event of Default exists, or would
result therefrom, the Borrowers and their Restricted Subsidiaries may
make Investments at any time in an amount not to exceed the sum of (A)
the Available $10 Million Acquisition/Investment Basket Amount at such
time (after giving effect to all prior and contemporaneous reductions
thereto, except as a result of such Investment), plus (B) the then
Available Unrestricted Proceeds Amount at such time (after giving
effect to all prior and contemporaneous adjustments thereto, except as
a result of such Investment), plus (C) the Available Net Income Amount
(after giving effect to all prior and contemporaneous adjustments
thereto, except as a result of such Investment), plus (D) the
Available Returned Investment Amount (after giving effect to all prior
and contemporaneous adjustments thereto, except as a result of such
Investment); provided that in no event shall the aggregate amount of
Investments made pursuant to this clause (vii) after the Second
Restatement Effective Date, when added to the aggregate amount paid in
connection with Permitted Acquisitions effected after the Second
Restatement Effective Date (calculated in accordance with the first
parenthetical contained in Section 9.02(vii)(B)), exceed $75,000,000
plus the Returned Investment Amount as calculated on the date any
determination is being made pursuant to this clause (vii);
(viii) the Borrowers and their Restricted Subsidiaries may
retain cash consideration plus purchase money notes derived from asset
sales permitted pursuant to Section 9.02(ii);
(ix) the Borrowers may enter into and perform their obligations
under Currency Hedging Agreements entered into in the ordinary course
of business and consistent with past practices so long as (i) any such
Currency Hedging Agreement is related to income derived from foreign
operations of the Borrowers or any Restricted Subsidiary (or any
Foreign Sales Corporation which is a Restricted Subsidiary) or
otherwise related to purchases 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;
(x) the Borrowers and their Restricted Subsidiaries may acquire
and own investments (including notes or other debt obligations or
securities) received in connection with the bankruptcy or
reorganization of their suppliers and customers and in settlement of
delinquent obligations of, or disputes with, their customers or
suppliers in the ordinary course of business;
(xi) existing Investments by the Borrowers and their Restricted
Subsidiaries shall be permitted to the extent listed on Schedule X;
(xii) the Restricted Subsidiaries of Furniture Brands may
contribute accounts receivable to the Receivables Subsidiary in
accordance with the provisions of the Receivables Documents;
(xiii) Furniture Brands shall be permitted to make capital
contributions to Foreign Sales Corporations in an amount not to exceed
$100,000 in the aggregate; and
(xiv) Permitted Acquisitions shall be permitted in compliance
with Sections 8.14 and 9.02(vii).
9.06 Transactions with Affiliates and Unrestricted
Subsidiaries. The Borrowers will not, and will not permit any of
their respective Restricted Subsidiaries to, enter into any
transaction or series of related transactions with any Affiliate of
Furniture Brands or any of its Subsidiaries or any of its Unrestricted
Subsidiaries, other than in the ordinary course of business and on
terms and conditions substantially as favorable to the Borrowers or
such Restricted Subsidiary as would reasonably be obtained by the
Borrowers or such Restricted Subsidiary at that time in a comparable
arm's-length transaction with a Person other than an Affiliate, except
that:
(i) Dividends may be paid to the extent provided in Section
9.03;
(ii) Investments may be made to the extent permitted by Section
9.05;
(iii) the transactions entered into between the Borrowers and
their Subsidiaries shall be permitted to the extent expressly
permitted by Section 9.02;
(iv) customary fees may be paid to non-officer directors of the
Borrowers and their Restricted Subsidiaries;
(v) Furniture Brands and its Restricted 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;
(vi) the Borrowers and their respective Restricted Subsidiaries
may make (x) capital contributions to any of their respective
Restricted Subsidiaries which is a Credit Party or (y) capital
contributions of accounts receivable to the Receivables Subsidiary in
accordance with the Receivables Documents;
(vii) existing transactions between Furniture Brands and its
Subsidiaries and their Affiliates shall be permitted to the extent
listed on Schedule XI;
(viii) Furniture Brands may sell or issue Furniture Brands
Common Stock and Qualified Preferred Stock to its Affiliates (other
than its Subsidiaries);
(ix) Furniture Brands may modify the Tax Sharing Agreement as
provided in Section 9.10(c); and
(x) the Stock Repurchase may be consummated within 5 Business
Days after the Third Restatement Effective Date.
Except as specifically provided above, no management or similar
fees shall be paid or payable by Furniture Brands or any of its
Restricted Subsidiaries to any Affiliate (other than Furniture
Brands).
Notwithstanding anything contained in the foregoing to the
contrary, any transactions between and among Furniture Brands and/or
Restricted Subsidiaries on the one hand and any of their respective
Affiliates (excluding Furniture Brands and its Restricted
Subsidiaries) on the other hand, shall be arm's-length transactions
and on terms and conditions at least as favorable to Furniture Brands
and/or such Restricted Subsidiaries as the terms and conditions which
would apply to a similar transaction on an arm's-length basis with a
Person that is not an Affiliate; provided, that, any transaction
(other than as described in clauses (i), (ii), (iii) and (vi) above)
between and among the aforementioned parties with a value in excess of
$1,000,000 shall only be permitted if a majority of the disinterested
directors of Furniture Brands approve the transaction.
9.07 Capital Expenditures. (a) The Borrowers will not, and
will not permit any of their respective Restricted Subsidiaries to,
make any Capital Expenditures, except that the Borrowers and their
Restricted Subsidiaries may make Capital Expenditures so long as the
aggregate amount of such Capital Expenditures made pursuant to this
clause (a) does not exceed $60,000,000 in any Fiscal Year (beginning
with the Fiscal Year ended in 1997).
(b) Notwithstanding anything to the contrary contained above, to
the extent that $60,000,000 exceeds the aggregate amount of Capital
Expenditures made by the Borrowers, and their Restricted Subsidiaries
pursuant to Section 9.07(a) during any Fiscal Year (beginning with the
Fiscal Year ended in 1997), such excess may be carried forward and
used by the Borrowers and their respective Restricted Subsidiaries to
make additional Capital Expenditures during subsequent Fiscal Years;
provided that the maximum amount carried forward pursuant to this
clause (b) into any Fiscal Year shall be $20 million, with any amounts
otherwise permitted to be carried forward to lapse and terminate at
such time, if any, as they are not permitted to be carried forward
into a subsequent Fiscal Year by virtue of this proviso.
(c) In addition to the Capital Expenditures permitted pursuant
to preceding clauses (a) and (b), the Borrowers and their respective
Restricted Subsidiaries shall be permitted to make additional Capital
Expenditures to the extent consisting of the reinvestment of proceeds
of Recovery Events not required to be applied as a mandatory repayment
pursuant to the provisions of Section 4.02(A)(d).
9.08 Consolidated Net Interest Coverage Ratio. The Borrowers
will not permit the Consolidated Net Interest Coverage Ratio for any
period of four consecutive fiscal quarters, in each case taken as one
accounting period, ended on the last day of a fiscal quarter set forth
below to be less than the amount set forth opposite such period below:
Fiscal Quarter
Ended Closest to Ratio
June 30, 1997 3.00:1.00
September 30, 1997 3.00:1.00
December 31, 1997 3.00:1.00
March 31, 1998 3.00:1.00
June 30, 1998 3.00:1.00
September 30, 1998 3.25:1.00
December 31, 1998 3.25:1.00
March 31, 1999 3.50:1.00
and the last day of
each fiscal quarter thereafter
9.09 Maximum Leverage Ratio. The Borrowers will not permit
the Leverage Ratio at any time to be greater than the ratio set forth
opposite the fiscal quarter most recently ended as set forth below:
Fiscal Quarter
Ended Closest to Ratio
June 30, 1997 4.65:1.00
September 30, 1997 4.65:1.00
December 31, 1997 4.65:1.00
March 31, 1998 4.50:1.00
June 30, 1998 4.50:1.00
September 30, 1998 4.35:1.00
December 31, 1998 4.25:1.00
March 31, 1999 4:00:1.00
and the last day of each
fiscal quarter thereafter
9.10 Limitation on Modifications of and Payments on
Indebtedness and Qualified Preferred Stock; Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements;
Surviving Guaranty Payments, etc. (a) The Borrowers will not, and
will not permit any of their respective Restricted Subsidiaries to,
(i) make (or give any notice in respect of) any voluntary or optional
payment or prepayment on or redemption, repurchase or acquisition for
value of any of the Existing Indebtedness, or after the incurrence
thereof, any Permitted Unsecured Indebtedness, Permitted Subordinated
Indebtedness or Disqualified Preferred Stock (any such payment,
prepayment, redemption or acquisition, a "Restricted Junior Payment"),
if at such time (x) a Default or Event of Default then exists or
arises therefrom or (y) such Restricted Junior Payment shall exceed an
amount equal to the sum of (A) the then Available Unrestricted
Proceeds Amount (after giving effect to all prior or contemporaneous
adjustments thereto, except as a result of such Restricted Junior
Payment) and (B) the then Available Net Income Amount (after giving
effect to all prior and contemporaneous adjustments thereto, except as
a result of such Restricted Junior Payment), (ii) amend or modify, or
permit the amendment or modification of, any provision of the Existing
Indebtedness or the Receivables Documents or, after the incurrence or
issuance thereof, any Permitted Unsecured Indebtedness, Permitted
Subordinated Indebtedness, Qualified Preferred Stock or Disqualified
Preferred Stock or of any agreement (including, without limitation,
any purchase agreement, indenture, loan agreement, security agreement
or certificate of designation) relating thereto, other than any amend-
ments or modifications to the Existing Indebtedness, the Receivables
Documents, any Permitted Unsecured Indebtedness, any Permitted
Subordinated Indebtedness, any Qualified Preferred Stock and any
Disqualified Preferred Stock which (A) do not make any term or
condition thereof more restrictive than the previously existing terms
and conditions with respect thereto, (B) do not in any way materially
adversely affect the interests of the Banks and (C) do not increase
the interest or dividend rates applicable thereunder, reduce the
maturity date thereunder or change any pay-in-kind mechanics or
requirements or any subordination provision thereof or (iii) amend or
modify its Certificate of Incorporation (including, without
limitation, by the filing or modification of any certificate of
designation, other than any certificate of designation relating to
Qualified Preferred Stock or Disqualified Preferred Stock) or By-Laws,
or any agreement entered into by it, with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new
agreement with respect to its capital stock if the foregoing would in
any way materially and adversely affect the Banks.
(b) Furniture Brands will not (i) amend, extend, renew or
modify, or permit the amendment, extension, renewal or modification
of, any provision of the Surviving Guaranties (or any lease obligation
guarantied thereby) or any agreement relating thereto, other than any
renewal or extension of a lease obligation guarantied by any Surviving
Guaranty pursuant to the renewal and/or extension provisions contained
therein as in effect on the Original Effective Date which (a) creates
a continuing guaranty obligation with respect to such existing lease
(without any amendments thereto which would increase the lessee's
obligations thereunder), (b) is exercised (x) not more than 30 days
prior to the last day on which such extension or renewal may be
exercised in accordance with the terms of the lease relating thereto
and (y) at a time when no Default or Event of Default then exists or
arises therefrom and (c) creates future fixed payment obligations with
respect thereto which, when combined with all future fixed payment
obligations under renewals and/or extensions made in compliance with
this Section 9.10(b)(i), would not exceed $10,000,000 or (ii) make any
payment whatsoever, whether voluntary, mandatory or otherwise, in
respect of the Surviving Guaranties (any such payment, a "Guaranty
Payment") if at such time (x) a Default or Event of Default then
exists or arises therefrom or (y) such payment shall exceed an amount
equal to the sum of (A) $5,000,000 less the amount of all Guaranty
Payments theretofore made after the Second Restatement Effective Date
pursuant to this clause (A), plus (B) at any time, the aggregate
amount of Dividends which could be made pursuant to (1) Section
9.03(ii)(A), (2) Section 9.03(ii)(B) and (3) Section 9.03(ii)(C), in
each case at such time (without including the amount of such Guaranty
Payment contemplated to be included in the calculation pursuant to
Section 9.03(ii)(D) at such time), plus (C) the amount of any such
Guaranty Payment made with the cash proceeds of issuance of equity by
Furniture Brands after the Second Restatement Effective Date.
(c) The Borrowers will not, and will not permit any of their
respective Restricted Subsidiaries to, amend, modify or change any
provision of any Tax Sharing Agreement other than any amendment,
modification or change deemed immaterial by the Administrative Agent
or as otherwise consented to by the Required Banks.
9.11 Limitation on Creation or Acquisition of Subsidiaries
and Restricted Subsidiaries. The Borrowers will not, and will not
permit any of their respective Restricted Subsidiaries to, establish,
create or acquire after the Third Restatement Effective Date any
Subsidiary, unless (x) if such Subsidiary is an Unrestricted
Subsidiary (other than a Foreign Sales Corporation), (i) it is
established, created or acquired by Furniture Brands or another
Unrestricted Subsidiary, (ii) if owned by Furniture Brands, 100% of
the capital stock of such new Unrestricted Subsidiary owned by
Furniture Brands shall be pledged pursuant to the Pledge Agreement and
the certificates representing such stock, together with stock powers
duly executed in blank, shall be delivered to the Collateral Agent and
(iii) such Unrestricted Subsidiary shall, at the request of the
Administrative Agent, become a party to a Tax Sharing Agreement, (y)
if such Subsidiary is a Restricted Subsidiary (other than a Foreign
Sales Corporation), (i) at least 10 Business Days' prior written
notice thereof is given to the Administrative Agent and the Banks,
(ii) 100% of the capital stock of such new Subsidiary is pledged
pursuant to the Pledge Agreement and the certificates representing
such stock, together with stock powers duly executed in blank, are
delivered to the Collateral Agent and (iii) such new Restricted
Subsidiary executes a counterpart of the Subsidiary Guaranty, the
Security Agreement and the Pledge Agreement or (z) if such Subsidiary
is a Foreign Sales Corporation, any Investment therein is made in
accordance with Section 9.05(xiii). In addition, each new Restricted
Subsidiary shall execute and deliver, or cause to be executed and
delivered, all other relevant documentation of the type described in
Section 5 as such new Restricted Subsidiary would have had to deliver
if such new Restricted Subsidiary were a Restricted Subsidiary and/or
a Subsidiary Guarantor on the Third Restatement Effective Date.
9.12 Limitation on Issuance of Capital Stock. (a)
Furniture Brands shall not issue (i) any Preferred Stock (other than
Qualified Preferred Stock and Disqualified Preferred Stock issued
pursuant to clause (b) below) or (ii) any redeemable common stock
unless, in either case, all terms thereof are satisfactory to the
Required Banks in their sole discretion.
(b) Furniture Brands may issue Disqualified Preferred Stock
not to exceed in aggregate liquidation preference or amount (i)
$150,000,000 minus the aggregate principal amount of all Permitted
Subordinated Indebtedness issued pursuant to Section 9.04(ii)(x), plus
(ii) $25,000,000 minus the aggregate principal amount of all Permitted
Unsecured Indebtedness issued pursuant to Section 9.04(iii), plus
(iii) any amount of Disqualified Preferred Stock the proceeds of which
are used to repay, refinance or otherwise replace the Receivables
Facility in accordance with the terms hereof, on terms and conditions
set forth in the definition of Disqualified Preferred Stock and on
other terms and conditions reasonably satisfactory to the
Administrative Agent; provided that to the extent Disqualified
Preferred Stock is issued pursuant to preceding clauses (i) and/or
(ii) and (1) any portion of such Disqualified Preferred Stock is being
issued as consideration in connection with a Permitted Acquisition or
(2) 100% of the Net Cash Proceeds therefrom are not immediately used
to repay Loans pursuant to Section 4.02(A)(b), such issuance shall
only be permitted if the Administrative Agent has received a
certificate from, and signed by an Authorized Representative of,
Furniture Brands showing that immediately after the issuance of such
Disqualified Preferred Stock, the Senior Debt Leverage Ratio,
calculated on a Pro Forma Basis after giving effect to such issuance,
shall not exceed 3.5:1.0. Notwithstanding anything to the contrary
contained above, all Disqualified Preferred Stock issued pursuant to
Section 9.12(b) shall be issued only where 100% of the consideration
received for the issuance of such Disqualified Preferred Stock is
cash, except that Disqualified Preferred Stock may be issued in
accordance with Section 9.12(b)(i) and (ii) directly as consideration
in connection with Permitted Acquisitions; provided that to the extent
Disqualified Preferred Stock is issued pursuant to Section 9.12(b)(i)
directly as consideration in connection with a Permitted Acquisition,
the aggregate liquidation preference or amount of all Disqualified
Preferred Stock issued after the Second Restatement Effective Date
pursuant to said Section 9.12(b)(i) as consideration in connection
with Permitted Acquisitions, when added to the sum of (x) the
aggregate principal amount of all Permitted Subordinated Indebtedness
so issued after the Second Restatement Effective Date as consideration
in connection with Permitted Acquisitions pursuant to Section
9.04(ii), (y) the aggregate principal amount of all Permitted
Subordinated Indebtedness issued or incurred after the Second
Restatement Effective Date but not issued as consideration in
connection with Permitted Acquisitions and (z) the aggregate
liquidation preference or amount of all Disqualified Preferred Stock
issued after the Second Restatement Effective Date pursuant to Section
9.12(b)(i) but not issued in consideration with Permitted
Acquisitions, shall not exceed $50,000,000.
(c) No Restricted Subsidiary of Furniture Brands shall issue,
or permit any of their Restricted 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 Restricted Subsidiaries in any class of
the capital stock of such Restricted Subsidiaries, (iii) to qualify
directors to the extent required by applicable law, and (iv)
Restricted Subsidiaries formed after the Third Restatement Effective
Date pursuant to Section 9.11 may issue capital stock to the Borrowers
or the respective Restricted Subsidiary of the Borrowers which is to
own such stock in accordance with the requirements of Section 9.11.
All capital stock issued in accordance with this Section 9.12(c)
shall, to the extent required by the Pledge Agreement, be delivered to
the Collateral Agent for pledge pursuant to the Pledge Agreement.
9.13 Business. The Borrowers will not, and will not permit
any of their Restricted Subsidiaries to, engage (directly or
indirectly) in any business other than substantially the same lines of
business in which they are engaged on the Third Restatement Effective
Date and reasonable extensions thereof. No Restricted Subsidiary of
Furniture Brands will, or will permit any of their Restricted
Subsidiaries to, create or own any Unrestricted Subsidiaries. The
Foreign Sales Corporation will not engage in any business other than
the sale of goods and/or services outside of the United States and any
business reasonably incidental to the foregoing.
9.14 Limitation on Certain Restrictions on Subsidiaries. (a)
The Borrowers will not, and will not permit any of their respective
Restricted Subsidiaries to, directly or indirectly, create or other-
wise cause or suffer to exist or become effective, except as set forth
on Schedule XIII, any encumbrance or restriction on the ability of any
such Restricted Subsidiary to (x) pay dividends or make any other dis-
tributions on its capital stock or any other interest or participation
in its profits owned by Furniture Brands or any Restricted Subsidiary
of Furniture Brands, or pay any Indebtedness owed to Furniture Brands
or a Restricted Subsidiary of Furniture Brands, (y) make loans or
advances to Furniture Brands or any of Furniture Brands's Restricted
Subsidiaries or (z) transfer any of its properties or assets to
Furniture Brands, except for such encumbrances or restrictions exist-
ing under or by reason of (i) applicable law, (ii) this Agreement and
the other Credit Documents, (iii) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest
of the Borrowers or a Restricted Subsidiary of the Borrowers, (iv)
customary provisions restricting assignment of any licensing agreement
entered into by the Borrowers or any Restricted Subsidiary of the
Borrowers in the ordinary course of business and (v) restrictions on
the Receivables Subsidiary set forth in the Receivables Documents.
(b) Furniture Brands will not permit any of its Unrestricted
Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any restriction whatsoever on the
operations of Furniture Brands and/or its Restricted Subsidiaries.
9.15 Limitation on Receivables and Receivables Facility.
(a) The Receivables Subsidiary shall engage in no business activities
other than the purchase, acquisition, sale and pledge of receivables
(or interests therein) pursuant to the Receivables Facility and
borrowings thereunder and any business activities reasonably
incidental thereto, all in accordance with the Receivables Facility,
and shall have no assets or liabilities, other than receivables
purchased from each of the Borrowers and their Restricted
Subsidiaries, cash collections therefrom, any investments of such cash
collections and other assets and liabilities reasonably incidental to
the foregoing activities, and shall in no event purchase any
receivables from an Unrestricted Subsidiary.
(b) Furniture Brands and its Restricted Subsidiaries shall not
cause, permit, or suffer to exist (including as a result of actions
taken by the Receivables Purchasers) (i) unless the Receivables
Facility has been terminated, refinanced or replaced as otherwise
permitted under the provisions of this Agreement, the Receivables
Subsidiary to cease selling receivables pursuant to the Receivables
Facility for a period in excess of five consecutive Business Days
(excluding any Business Day on which (x) none of Broyhill, Lane,
Thomasville or Action generate any receivables or (y) no Term Loans,
Swingline Loans and no Revolving Loans of Non-Defaulting Banks are
outstanding), (ii) the Receivables Facility to be terminated on any
date prior to the date which is five years after the Third Restatement
Effective Date except, in the event the Receivables Facility is
repaid, refinanced or otherwise replaced in accordance with the terms
hereof by Permitted Subordinated Indebtedness and/or Disqualified
Preferred Stock and/or a replacement facility, (iii) an Event of
Termination (as defined in either Receivables Purchase Agreement) to
have occurred and be continuing and which shall not have been cured or
waived for a period in excess of five consecutive Business Days or
(iv) the sum of the Yield Reserve, the Loss Reserve, the Service Fee
Reserve and the Dilution Reserve (each as defined in the Receivables
Documents) to exceed 30% at any time.
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 (including, without limitation, the
certificates delivered pursuant to Section 5.21 of the Original Credit
Agreement) 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(g)(i), 8.08, 8.11, 8.15, 8.16 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
Bank; or
10.04 Default Under Other Agreements. The Borrowers or any
of their respective Restricted 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
Restricted 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
$5,000,000; 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 re-
mains 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 proceed-
ing is entered; or the Borrowers or any of their respective Subsidi-
aries 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, Multiemployer Plan, and/or
Spunoff 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, Multiemployer Plan and/or
Spunoff Plan shall have had or is likely to have a trustee appointed
to administer such Plan, Multiemployer Plan and/or Spunoff Plan
pursuant to Section 4042 of ERISA, any Plan, Multiemployer Plan and/or
Spunoff 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, Multiemployer Plan and/or Spunoff
Plan shall have an Unfunded Current Liability, a contribution required
to be made to a Plan, Multiemployer Plan, Spunoff Plan and/or Foreign
Pension Plan has not been timely made, the Borrowers or any their
respective Restricted Subsidiaries or any ERISA Affiliate has incurred
or is reasonably expected to incur a liability to or on account of a
Plan, Multiemployer Plan and/or Spunoff 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, the Bor-
rowers or any of their respective Restricted Subsidiaries has incurred
or is 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, and/or in the aggregate, in the opinion of
the Required Banks, will have a Material Adverse Effect; or
10.07 Security Documents. At any time after the execution
and delivery thereof, any of the Security Documents shall cease to be
in full force and effect, or shall cease in any material respect to
give the Collateral Agent for the benefit of the Secured Creditors the
Liens, rights, powers and privileges purported to be created thereby
(including, without limitation, a perfected security interest in, and
Lien on, all of the Collateral), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as
permitted by Section 9.01), and subject to no other Liens (except as
permitted by Section 9.01), or any Credit Party shall default in the
due performance or observance of any term, covenant or agreement on
its part to be performed or observed pursuant to any of the Security
Documents and such default shall continue beyond any grace period
specifically applicable thereto pursuant to the terms of such Security
Document; or
10.08 Subsidiary Guaranty. The Subsidiary 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 Subsidiary 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 Subsidiary Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be
entered against the Borrowers or any of their respective Restricted
Subsidiaries involving in the aggregate for the Borrowers and their
respective Restricted Subsidiaries a liability (not paid or fully
covered by a reputable and solvent insurance company) and such judg-
ments 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 $5,000,000; or
10.10 Change of Control. A Change of Control shall occur; or
10.11 Tax Sharing Agreement. One or more parties to a Tax
Sharing Agreement (other than Borrowers or any of their respective
Restricted Subsidiaries) shall have defaulted in its or their payment
obligations (other than reimbursement obligations in respect of
payments made under the Surviving Guaranties) in an aggregate amount
equal to or greater than $2,500,000 thereunder and such default or
defaults shall remain unremedied for a period in excess of ten
consecutive Business Days; or
10.12 Receivables Repurchases. The Borrowers and/or their
respective Restricted Subsidiaries shall have repurchased accounts
receivables (pursuant to indemnity provisions or otherwise) from the
Receivables Subsidiary and/or the Receivables Purchasers in an
aggregate amount exceeding $20,000,000 in any Fiscal Year;
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 Banks, shall by written notice to
the Borrowers, take any or all of the following actions, without
prejudice to the rights of any Agent, any Bank 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 re-
spect to the Borrowers, the result of which would occur upon the giv-
ing 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 Bank 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 Collateral Agent at
the Payment Office such additional amount of cash, to be held as
security by the Collateral 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; (v) enforce, as
Collateral Agent, all of the Liens and security interests created
pursuant to the Security Documents; and (vi) apply any cash collateral
held for the benefit of the Banks 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 have the meaning provided in Section 2.01(a).
"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).
"Action" shall mean Action Industries, Inc., a Virginia
corporation.
"Additional Collateral" shall mean all property (whether real or
personal) in which security interests are granted (or have been
purported to be granted) (and continue to be in effect at the time of
determination) pursuant to Section 8.11.
"Additional Mortgage" shall have the meaning provided in Section
8.11(a).
"Additional Mortgaged Property" shall have the meaning provided
in Section 8.11(a).
"Additional Security Documents" shall mean all mortgages, pledge
agreements, security agreements and other security documents entered
into pursuant to Section 8.11 with respect to Additional Collateral.
"Adjusted Certificate of Deposit Rate" shall mean, on any day,
the sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained
by dividing (x) the most recent weekly average dealer offering rate
for negotiable certificates of deposit with a three-month maturity in
the secondary market as published in the most recent Federal Reserve
System publication entitled "Select Interest Rates," published weekly
on Form H.15 as of the date hereof, or if such publication or a
substitute containing the foregoing rate information shall not be
published by the Federal Reserve System for any week, the weekly
average offering rate determined by the Administrative Agent on the
basis of quotations for such certificates received by it from three
certificate of deposit dealers in New York of recognized standing or,
if such quotations are unavailable, then on the basis of other sources
reasonably selected by the Administrative Agent, by (y) a percentage
equal to 100% minus the stated maximum rate of all reserve require-
ments as specified in Regulation D applicable on such day to a three-
month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any
marginal, emergency, supplemental, special or other reserves), plus
(2) the then daily net annual assessment rate as estimated by the
Administrative Agent for determining the current annual assessment
payable by the Administrative Agent to the Federal Deposit Insurance
Corporation for insuring three-month certificates of deposit.
"Adjusted Percentage" shall mean (x) at a time when no Bank
Default exists, for each Bank, such Bank's Percentage and (y) at a
time when a Bank Default exists (i) for each Bank that is a Defaulting
Bank, zero and (ii) for each Bank that is a Non-Defaulting Bank, the
percentage determined by dividing such Bank's Revolving Loan
Commitment at such time by the Adjusted Total Revolving Loan
Commitment at such time, it being understood that all references
herein to Revolving Loan Commitments and the Adjusted Total Revolving
Loan Commitment at a time when the Total Revolving Loan Commitment or
Adjusted Total Revolving Loan Commitment, as the case may be, has been
terminated shall be references to the Revolving Loan Commitments or
Adjusted Total Revolving Loan Commitment, as the case may be, in
effect immediately prior to such termination, provided that (A) no
Bank's Adjusted Percentage shall change upon the occurrence of a Bank
Default from that in effect immediately prior to such Bank Default, to
the extent such change after giving effect to such Bank Default, and
any repayment of Revolving Loans and Swingline Loans at such time
pursuant to Section 4.02(a) or otherwise, would cause the sum of (i)
the aggregate outstanding principal amount of Revolving Loans of all
Non-Defaulting Banks plus (ii) the aggregate outstanding principal
amount of Swingline Loans plus (iii) the Letter of Credit
Outstandings, to exceed the Adjusted Total Revolving Loan Commitment;
(B) any changes to the Adjusted Percentage that would have become
effective upon the occurrence of a Bank Default but that did not
become effective as a result of the preceding clause (A) shall become
effective on the first date after the occurrence of the relevant Bank
Default on which the sum of (i) the aggregate outstanding principal
amount of the Revolving Loans of all Non-Defaulting Banks plus (ii)
the aggregate outstanding principal amount of Swingline Loans plus
(iii) the Letter of Credit Outstandings is equal to or less than the
Adjusted Total Revolving Loan Commitment; and (C) if (i) a Non-
Defaulting Bank's Adjusted Percentage is changed pursuant to the
preceding clause (B) and (ii) any repayment of such Bank's Revolving
Loans, or of Unpaid Drawings with respect to Letters of Credit or of
Swingline Loans, that were made during the period commencing after the
date of the relevant Bank Default and ending on the date of such
change to its Adjusted Percentage must be returned to the Borrowers as
a preferential or similar payment in any bankruptcy or similar
proceeding of the Borrowers, then the change to such Non-Defaulting
Bank's Adjusted Percentage effected pursuant to said clause (B) shall
be reduced to that positive change, if any, as would have been made to
its Adjusted Percentage if (x) such repayments had not been made and
(y) the maximum change to its Adjusted Percentage would have resulted
in the sum of the outstanding principal of Revolving Loans made by
such Bank plus such Bank's new Adjusted Percentage of the outstanding
principal amount of Swingline Loans and of Letter of Credit
Outstandings equalling such Bank's Revolving Loan Commitment at such
time.
"Adjusted Total Revolving Loan Commitment" shall mean at any time
the Total Revolving Loan Commitment less the aggregate Revolving Loan
Commitments of all Defaulting Banks.
"Administrative Agent" shall mean Bankers Trust Company, in its
capacity as Administrative Agent for the Banks 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 9.06 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
9.06, 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 securi-
ties, by contract or otherwise.
"Agents" shall mean any of the Administrative Agent, the
Collateral Agent, the Documentation Agent and the Syndication Agent.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed or replaced from
time to time.
"Alternate Receivables Purchase Agreement" shall mean that
Receivables Purchase Agreement, dated as of November 15, 1994, among
the Receivables Subsidiary, as Seller, and Credit Lyonnais, as
Purchaser and Agent, as amended and restated as of December 29, 1995,
as same may be further amended, modified or supplemented from time to
time in compliance with Section 9.10, or as replaced in compliance
with the definition of Receivables Facility.
"Apollo Group" shall mean Apollo Advisors, L.P., Lion Advisors,
L.P., Apollo Investment Fund, L.P. and Apollo Advisors II, L.P., all
Delaware limited partnerships.
"Apollo Management Agreement" shall mean the consulting
agreement, dated September 23, 1992, between Apollo Advisors, L.P. and
Furniture Brands.
"Applicable Margin" shall mean (A) in the case of Revolving
Loans, a percentage per annum equal to (i) in the case of Base Rate
Loans, 0.125% and (ii) in the case of Eurodollar Loans, 1.125%, in
each case reduced (but not below zero) by the then applicable
Reduction Percentage, if any, and (B) in the case of Term Loans, a
percentage per annum equal to (i) in the case of Base Rate Loans,
0.75% and (ii) in the case of Eurodollar Loans, 1.75%.
"▇▇▇▇▇▇▇▇▇ Stock Purchase Agreement" shall mean the Stock
Purchase Agreement, dated as of November 18, 1995, by and among
▇▇▇▇▇▇▇▇▇ World Industries, Inc., ▇▇▇▇▇▇▇▇▇ Enterprises, Inc. and
Furniture Brands.
"Assignment and Assumption Agreement" shall mean the Assignment
and Assumption Agreement substantially in the form of Exhibit K
(appropriately completed).
"Atlantic" shall mean Atlantic Asset Securitization Corp., a
Delaware corporation.
"Atlantic Receivables Purchase Agreement" shall mean the
Receivables Purchase Agreement, dated as of November 15, 1994, among
the Receivables Subsidiary, Atlantic, as Purchaser, and Credit
Lyonnais, as Agent, as amended and restated as of December 29, 1995 as
same may be further amended, modified or supplemented from time to
time in compliance with Section 9.10, or as replaced in compliance
with the definition of Receivables Facility.
"Attributed Receivables Facility Indebtedness" at any time shall
mean the sum of (i) the aggregate Invested Amount of Receivables
Interests (as defined in the Receivables Documents) under the
Receivables Purchase Agreements (it being the intent of the parties
that the amount of Attributed Receivables Facility Indebtedness at any
time outstanding approximate as closely as possible the principal
amount of indebtedness which would be outstanding at such time under
the Receivables Facility if same were structured as a secured lending
agreement rather than a purchase agreement) plus (ii) the outstanding
principal amount of Indebtedness under the Subordinated Loan
Agreement.
"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,
BTCo and each Issuing Bank; (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.
"Available Debt Proceeds Amount" shall mean, on any date of
determination, an amount equal to zero, plus (i) all Net Cash Proceeds
received by the Borrowers after the Second Restatement Effective Date
from the issuance of Permitted Subordinated Indebtedness pursuant to
Section 9.04(ii)(x) and/or Permitted Unsecured Indebtedness pursuant
to Section 9.04(iii) retained by any of the Borrowers on or prior to
such date and not required to be used to repay Loans on or prior to
such date pursuant to Section 4.02(A)(b), minus (ii) any amounts used
to effect Permitted Acquisitions pursuant to clause (C) of the
definition of Available Permitted Acquisition Amount on or prior to
such date; provided that, at the time of the consummation of any
Permitted Acquisition, the Available Debt Proceeds Amount shall be
increased by the face amount of Permitted Acquired Debt (not being
issued in return for Net Cash Proceeds) being incurred pursuant
thereto and by the aggregate principal amount of Permitted
Subordinated Indebtedness and/or Permitted Unsecured Indebtedness
being directly issued as consideration in respect of such Permitted
Acquisition (so long as no Net Cash Proceeds are received in
connection therewith) (with the resultant increase in the Available
Permitted Acquisition Amount, as provided in clause (C) of the
definition thereof, for purposes of the consummation of the respective
Permitted Acquisition), which increase in the Available Debt Proceeds
Amount (and resultant increase in the Available Permitted Acquisition
Amount) shall be reduced to zero immediately upon the consummation of
the respective Permitted Acquisition.
"Available Net Income Amount" shall mean on any date of
determination an amount equal to zero, plus or minus (i) an amount
equal to the Consolidated Cumulative 25% Net Income Amount on such
date, minus (ii) any Dividend payments made by Furniture Brands
pursuant to Section 9.03(ii)(B) on or prior to such date, minus (iii)
any Investments made by the Borrowers or their Restricted Subsidiaries
pursuant to Section 9.05(vii)(C), minus (iv) any Restricted Junior
Payments made by Furniture Brands or its Restricted Subsidiaries
pursuant to Section 9.10(a)(i)(y)(B), minus (v) any amount paid in
connection with a Permitted Acquisition pursuant to clause (D) of the
definition of Available Permitted Acquisition Amount, minus (vi) any
Guaranty Payment made by Furniture Brands pursuant to Section
9.10(b)(ii)(y)(B)(2) on or prior to such date.
"Available Permitted Acquisition Amount" shall mean, at the time
of determination thereof, an amount equal to the sum of (A) the
Available $10 Million Acquisition/Investment Basket Amount on such
date (after giving effect to all prior and contemporaneous reductions
thereto), plus (B) the Available Unrestricted Proceeds Amount on such
date (after giving effect to all prior and contemporaneous reductions
thereto), plus (C) the Available Debt Proceeds Amount on such date
(after giving effect to all prior and contemporaneous reductions
thereto), plus (D) the Available Net Income Amount on such date (after
giving effect to all prior and contemporaneous reductions thereto).
"Available Returned Investment Amount" shall mean on any date of
determination an amount equal to (i) the Returned Investment Amount as
calculated on such date, minus (ii) any amounts used to make
Investments pursuant to Section 9.05(vii)(D) after the Second
Restatement Effective Date and on or prior to such date.
"Available $10 Million Acquisition/Investment Basket Amount"
shall mean on any date of determination an amount equal to (i)
$10,000,000, minus (ii) any amounts used to make Investments pursuant
to Section 9.05(vii)(A) after the Second Restatement Effective Date
and on or prior to such date, minus (iii) any amounts used to make
Permitted Acquisitions pursuant to clause (A) of the definition of
Available Permitted Acquisition Amount after the Second Restatement
Effective Date and on or prior to such date.
"Available $25 Million Dividend Basket Amount" shall mean on any
date of determination an amount equal to (i) $25,000,000, minus (ii)
any amounts used to pay Dividends pursuant to Section 9.03(ii)(A)
after the Second Restatement Effective Date and on or prior to such
date.
"Available Unrestricted Proceeds Amount" shall mean, on any date
of determination, an amount equal to zero, plus (i) all Net Cash
Proceeds received by Furniture Brands from issuances of equity by
Furniture Brands (including pursuant to any exercise of the Furniture
Brands Warrants any exercise of stock options and the issuance of any
Qualified Preferred Stock or Disqualified Preferred Stock of Furniture
Brands) after the Second Restatement Effective Date and on or prior to
such date, minus (ii) any amounts used to effect Permitted Acquisi-
tions pursuant to clause (B) of the definition of Available Permitted
Acquisition Amount after the Second Restatement Effective Date and on
or prior to such date, minus (iii) any Dividend payments made by
Furniture Brands pursuant to Section 9.03(ii)(C) after the Second
Restatement Effective Date and on or prior to such date, minus (iv)
any Investments by the Borrowers or their Restricted Subsidiaries pur-
suant to Section 9.05(vii)(B) after the Second Restatement Effective
Date and on or prior to such date, minus (v) any Restricted Junior
Payments made by Furniture Brands or its Restricted Subsidiaries after
the Second Restatement Effective Date and on or prior to such date
pursuant to Section 9.10(a)(i)(y)(A), minus (vi) Guaranty Payments
made by the Borrowers or their Restricted Subsidiaries after the
Second Restatement Effective Date and on or prior to such date
pursuant to Section 9.10(b)(ii)(y)(B)(3); provided that, at the time
of the consummation of any Permitted Acquisition, the Available
Unrestricted Proceeds Amount shall be increased by the aggregate
liquidation preference or amount of Disqualified Preferred Stock being
directly issued as consideration in connection with such Permitted
Acquisition (where no Net Cash Proceeds are received in connection
therewith) (with the resultant increase in the Available Permitted
Acquisition Amount, as provided in clause (B) of the definition
thereof, for purposes of a consummation of the respective Permitted
Acquisition), which increase in the Available Unrestricted Proceeds
Amount (and resultant increase in the Available Permitted Acquisition
Amount) shall be reduced to zero immediately upon the consummation of
the respective Permitted Acquisition.
"Bank" shall mean each financial institution listed on Schedule
I, as well as any Person which becomes a "Bank" hereunder pursuant to
13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank, 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 2.03(c) or (ii) a Bank 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.
"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 Adjusted Certificate of Deposit Rate and (ii) the Prime
Lending Rate.
"Base Rate Loan" shall mean each Loan designated or deemed desig-
nated 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 Borrower from BTCo on a given date or (ii) one Type of Loan of a
single Tranche by the Borrower from all of the Banks having
Commitments of the respective Tranche 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.
"BTCo" shall mean Bankers Trust Company in its individual
capacity.
"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.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in
accordance with generally accepted accounting principles, including
all such expenditures with respect to fixed or capital assets (in-
cluding, without limitation, expenditures for maintenance and repairs
which should be capitalized in accordance with generally accepted
accounting principles) and the amount of Capitalized Lease Obligations
incurred by such Person.
"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 Standard
& Poor's Rating Services or at least P-1 or the equivalent thereof by
▇▇▇▇▇'▇ Investors Service, Inc. 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.
"Cash Management System" shall mean the "Cash Management System"
as defined in the Original Credit Agreement.
"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. Subsection 9601 et seq.
"Change of Control" shall mean (i) Furniture Brands shall at any
time cease to own 100% of the capital stock of any of Broyhill, Lane
or Thomasville, (ii) the board of directors of Furniture Brands shall
cease to consist of a majority of Continuing Directors and (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.
"Collateral" shall mean all property (whether real or personal)
with respect to which any security interests have been granted (or
purported to be granted) pursuant to any Security Document, including,
without limitation, all Pledge Agreement Collateral (which shall
include all capital stock of, and promissory notes issued by, the
Receivables Subsidiary, to the extent held by any Credit Party), all
Security Agreement Collateral (which shall exclude all assets of the
Receivables Subsidiary), all Mortgaged Properties, all cash and Cash
Equivalents delivered as collateral pursuant to Section 4.02 or 10
hereof and all Additional Collateral, if any.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security
Documents.
"Collective Bargaining Agreements" shall have the meaning
provided in the Existing Credit Agreement.
"Commitment" shall mean any of the commitments of any Bank, i.e.,
whether the Term Loan Commitment or the Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided in
Section 3.01(a).
"Commitment Commission End Date" shall have the meaning provided
in the definition of Commitment Commission Reduction Percentage'.
"Commitment Commission Reduction Percentage" shall mean .125% on
and from the Third Restatement Effective Date through July 30, 1997
(or such earlier date on which the Borrowers deliver to the
Administrative Agent a certificate containing the calculations of
Leverage Ratio for the fiscal quarter ended June 30, 1997, and
thereafter shall mean, from and after each day of delivery of any
certificate delivered in accordance with the following sentence
indicating an entitlement to a Commitment Commission Reduction
Percentage other than zero (each, a "Commitment Commission Start
Date") to and including the applicable Commitment Commission End Date
described below, the percentage set forth below opposite the Leverage
Ratio indicated to have been achieved in any certificate delivered in
accordance with the following sentence:
Leverage Commitment Commission
Ratio Reduction Percentage
---------- -----------------------
Equal to or 0%
greater than 4.00:1
Equal to or .125%
greater than
3.50:1 but less
than 4.00:1
Equal to or .250%
greater than
2.50:1 but less
than 3.50:1
Less than 2.50:1 .375%
From and after the date of the delivery of the certificate referenced
above for the fiscal quarter ended June 30, 1997, the Leverage Ratio
shall be determined based on the delivery of a certificate of the
Borrowers by an Authorized Representative of the Borrowers to the
Administrative Agent, within 30 days of the last day of any fiscal
quarter of Furniture Brands (beginning after the fiscal quarter ended
on June 30, 1997, based on calculations made at the end of each fiscal
quarter commencing with the fiscal quarter ended June 30, 1997), which
certificate shall set forth the calculation of the Leverage Ratio for
the fiscal quarter ended immediately prior to the relevant Commitment
Commission Start Date and the Commitment Commission Reduction
Percentage which shall be thereafter applicable (until same is changed
or ceases to apply in accordance with the following sentences). The
Commitment Commission Reduction Percentage so determined shall apply,
except as set forth in the succeeding sentence, from the Commitment
Commission Start Date to the earlier of (x) the date on which the next
certificate is delivered to the Administrative Agent and (y) the date
which is 30 days following the last day of the fiscal quarter in which
the previous Commitment Commission Start Date occurred (the
"Commitment Commission End Date"), at which time, if no certificate
has been delivered to the Administrative Agent indicating an entitle-
ment to a Commitment Commission Reduction Percentage other than zero
(and thus commencing a new Commitment Commission Start Date), the
Commitment Commission Reduction Percentage shall be reduced to zero.
Notwithstanding anything to the contrary contained above in this
definition, the Commitment Commission Reduction Percentage shall be
reduced to zero at all times during which there shall exist an Event
of Default.
"Commitment Commission Start Date" shall have the meaning
provided in the definition of `Commitment Commission Reduction
Percentage'.
"Concentration Account" shall have the meaning provided in the
Security Agreement.
"Consolidated Cumulative Net Income Period" shall mean each
period consisting of a fiscal quarter of Furniture Brands ending after
the Second Restatement Effective Date and for which the related
financial statements required to be delivered pursuant to Section
8.01(b) or (c) of this Agreement or of the Existing Credit Agreement,
as the case may be, have theretofore been delivered.
"Consolidated Cumulative 25% Net Income Amount" shall mean, at
any date an amount determined on a cumulative basis equal to (i) the
sum of 25% of Consolidated Net Income for all Consolidated Cumulative
Net Income Periods ending after the Second Restatement Effective Date
and prior to such date of determination for which Consolidated Net
Income was a positive number, minus (ii) 100% of Consolidated Net
Income for all Consolidated Cumulative Net Income Periods ending after
the last day of the Second Restatement Effective Date and prior to
such date of determination for which Consolidated Net Income was a
negative number.
"Consolidated Debt" shall mean all Indebtedness of Furniture
Brands and its Restricted Subsidiaries (including, without limitation,
the amount of Attributed Receivables Facility Indebtedness) determined
on a combined basis with respect to borrowed money or other
obligations of such Persons which would appear on the balance sheet of
such Persons as indebtedness (including unreimbursed drawings under
Letters of Credit and unreimbursed payments under Acceptances, but ex-
cluding Consolidated Current Liabilities and deferred tax and pension
liabilities), plus (i) all Contingent Obligations of such Persons
incurred after the Third Restatement Effective Date (excluding obliga-
tions resulting from extensions or renewals of the leases guaranteed
by the Surviving Guarantees made in compliance with this Agreement),
plus (ii) all Contingent Obligations with respect to any Surviving
Guaranty on and after the date on which Furniture Brands made any
payment in respect of such Surviving Guaranty, plus (iii) an amount
equal to the greater of the liquidation preference and the maximum
fixed repurchase price (excluding accrued Dividends) of any
outstanding Disqualified Preferred Stock, minus (iv) the cash in
excess of $10,000,000 as shown on the consolidated balance sheet of
Furniture Brands and its Restricted Subsidiaries as of the date of
determination.
"Consolidated EBIT" shall mean, for any period, the Consolidated
Net Income of Furniture Brands and its Restricted 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 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.
"Consolidated Net Income" shall mean, for any period, the net
after tax income of Furniture Brands and its Restricted Subsidiaries
determined on a consolidated basis, minus cash Dividends paid in
respect of Disqualified Preferred Stock, without giving effect to any
extraordinary gains or losses.
"Consolidated Net Interest Coverage Ratio" for any period shall
mean the ratio of Consolidated EBITDA to Consolidated Net Interest
Expense for such period.
"Consolidated Net Interest Expense" shall mean, for any period,
the total consolidated interest expense of Furniture Brands and its
Restricted Subsidiaries for such period (calculated without regard to
any limitations on the payment thereof) plus, without duplication,
that portion of Capitalized Lease Obligations of Furniture Brands and
its Restricted Subsidiaries representing the interest factor for such
period, and capitalized interest expense, plus, (i) all cash fees,
service charges and other costs, as well as all collections or other
amounts retained by the Receivables Purchasers which are in excess of
amounts paid to Furniture Brands and its Restricted Subsidiaries under
the Receivables Facility by it for the purchase of receivables
pursuant to the Receivables Facility and (ii) the product of (x) the
amount of all cash Dividend requirements (whether or not declared or
paid) on Disqualified Preferred Stock paid, accrued or scheduled to be
paid or accrued during such period times (y) a fraction, the numerator
of which is one and the denominator of which is one minus the then
current effective consolidated Federal, state, local and foreign tax
rate (expressed as a decimal number between one and zero) of Furniture
Brands as reflected in the audited consolidated financial statements
of Furniture Brands for its most recently completed Fiscal Year, which
amounts described in the preceding clauses (i) and (ii) shall be
treated as interest expense of Furniture Brands and its Restricted
Subsidiaries for purposes of this definition regardless of the
treatment of such amounts under generally accepted accounting princi-
ples, in each case net of the total consolidated cash interest income
of Furniture Brands and its Restricted Subsidiaries for such period,
but excluding the amortization of any deferred financing costs and all
amounts in respect of the Interest Rate Protection Agreements, all
determined on a consolidated basis.
"Consolidated Senior Debt" at any time shall mean Consolidated
Debt on such date, adjusted by excluding therefrom the amount of
Permitted Subordinated Indebtedness and Disqualified Preferred Stock
reflected in Consolidated Debt on 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 pur-
chase 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 en-
dorsements 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 Bank" shall mean each Existing Bank with a Commitment
under this Agreement (immediately upon giving effect to the Third
Restatement Effective Date).
"Continuing Directors" shall mean the Directors of Furniture
Brands on the Third Restatement Effective Date (and immediately after
giving effect to the Transaction) 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.
"Controlled Account" shall mean any account managed by the Apollo
Group for so long as the Apollo Group exercises sole power of
disposition and voting with respect thereto.
"Converse" shall mean Converse Inc., a Delaware corporation.
"Converse Disposition" shall mean the "Converse Disposition" as
such term is defined in the Original Credit Agreement.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this
Agreement, each Note, each Security Document and the Subsidiary
Guaranty and, after the execution and delivery thereof, each
additional guaranty or security document executed pursuant to Section
8.11.
"Credit Event" shall mean the making of any Loan or the issuance
of any Letter of Credit.
"Credit Lyonnais" shall have the meaning provided in the first
paragraph of this Agreement.
"Credit Party" shall mean the Borrowers 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.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of
Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Disqualified Preferred Stock" means any Preferred Stock of
Furniture Brands which would be Qualified Preferred Stock except that
regular accruing dividends thereon are required to be paid in cash,
and so long as, (i) based on calculations made by Furniture Brands on
a Pro Forma Basis after giving effect to the issuance of such Disqual-
ified Preferred Stock, no Default or Event of Default will exist
under, or would have existed under the periods covered by, the
financial covenants contained in Sections 9.08 and 9.09 of this
Agreement, (ii) based on good faith projections prepared by Furniture
Brands for the period from the date of the issuance of such
Disqualified Preferred Stock to the date which is one year thereafter,
the level of financial performance measured by the covenants set forth
in Sections 9.08 and 9.09 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 9.08
and 9.09 of this Agreement as compliance with such covenants would be
required through the date which is one year from the date of the
issuance of such Disqualified Preferred Stock, (iii) Furniture Brands
shall furnish to the Administrative Agent for distribution to each of
the Banks an officer's certificate by the chief financial officer or
treasurer of Furniture Brands certifying to the best of his knowledge
as to compliance with the requirements of the preceding clauses (i)
and (ii) and containing the pro forma calculations and projections
required by the preceding clauses (i) and (ii), and (iv) such
Disqualified Preferred Stock shall not contain any provision in the
documents governing or evidencing the same which, in the opinion of
the Administrative Agent, are more restrictive than the provisions in
the Credit Documents.
"Dividend" with respect to any Person shall mean that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or
delivery of property (other than common stock of such Person or
Qualified Preferred Stock of Furniture Brands paid as a pay-in-kind
Dividend on any Qualified Preferred Stock of Furniture Brands) or cash
to its stockholders as such, or redeemed, retired, purchased or other-
wise acquired, directly or indirectly, for a consideration any shares
of any class of its capital stock outstanding on or after the Third
Restatement Effective Date (or any options or warrants issued by such
Person with respect to its capital stock), or set aside any funds for
any of the foregoing purposes, or shall have permitted any of its Sub-
sidiaries to purchase or otherwise acquire for a consideration any
shares of any class of the capital stock of such Person outstanding on
or after the Third Restatement Effective Date (or any options or war-
rants issued by such Person with respect to its capital stock).
Without limiting the foregoing, "Dividends" with respect to any Person
shall also include all payments made or required to be made during any
period by such Person with respect to any stock appreciation rights,
plans, equity incentive or achievement plans or any similar plans or
setting aside of any funds for the foregoing purposes, except to the
extent such payments have reduced Consolidated EBITDA during the
respective period.
"Documentation Agent" shall mean Credit Lyonnais, in its capacity
as Documentation Agent for the Banks hereunder.
"Documents" shall mean the Credit Documents, the Receivables
Documents and the Stock Repurchase Documents.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" with respect to any Person shall mean a
Subsidiary thereof other than a Foreign Subsidiary thereof.
"Domestic Wholly-Owned Subsidiary" of any Person shall mean each
Wholly-Owned Subsidiary of such Person which is also a Domestic
Subsidiary.
"Drawing" shall have the meaning provided in Section 2.05(b).
"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).
"Employee Stock Option Plan" shall mean the Furniture Brands
Incorporated 1992 Stock Option Plan.
"End Date" shall have the meaning provided in the definition of
Reduction Percentage.
"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. Section 1251 et seq.;
the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; the
Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water
Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq., the Hazardous
Material Transportation Act, 49 U.S.C. Section 1801 et seq. and the
Occupational Safety and Health Act, 29 U.S.C. Section 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 (a) the offered quotation to first-
class banks in the New York interbank Eurodollar market by BTCo for
Dollar deposits of amounts in immediately available funds comparable
to the outstanding principal amount of the Eurodollar Loan of BTCo
with maturities comparable to the Interest Period applicable to such
Eurodollar Loan commencing two Business Days thereafter as of 10:00
A.M. (New York time) on the date which is two Business Days prior to
the commencement of such Interest Period, divided (and rounded off to
the nearest 1/16 of 1%) by (b) 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).
"Event of Default" shall have the meaning provided in Section 10.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Assets" shall mean each of the assets listed on
Schedule XIV.
"Existing Banks" shall mean each Person which was a Bank under,
and as defined in, the Existing Credit Agreement.
"Existing Credit Agreement" shall have the meaning provided in
the recitals to this Agreement.
"Existing Indebtedness" shall have the meaning provided in
Section 7.22.
"Existing IRBs" shall mean $8,000,000 Industrial Development
Authority of Fluvanna County, Virginia Floating Rate Demand Industrial
Development Revenue Bonds (Thomasville Furniture Industries, Inc.
Project) Series 1986.
"Existing Letters of Credit" shall mean the letters of credit
listed on Schedule XII and previously issued under the Existing Credit
Agreement.
"Existing Loans" shall mean the Existing Revolving Loans and the
Existing Swingline Loans.
"Existing Mortgage Policies" shall mean each mortgage insurance
policy issued with respect to an Existing Mortgage under the Original
Credit Agreement, the First Restated Credit Agreement or the Existing
Credit Agreement.
"Existing Mortgaged Properties" shall mean all Real Property of
the Borrowers and their respective Subsidiaries listed on Schedule
III.
"Existing Mortgages" shall mean all Mortgages granted by the
Borrowers pursuant to the Original Credit Agreement, the First
Restated Credit Agreement or the Existing Credit Agreement and which
have not been released by the lenders thereunder prior to the Third
Restatement Effective Date.
"Existing Receivables Facility" shall mean the Receivables
Facility as defined in the Existing Credit Agreement.
"Existing Revolving Loans" shall mean the "Revolving Loans"
under, and as defined in, the Existing Credit Agreement.
"Existing Swingline Loans" shall mean the "Swingline Loans"
under, and as defined in, the Existing Credit Agreement.
"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.
"FIRREA" shall mean Financial Institution Reform, Recovery and
Enforcement Act of 1989.
"First Restated Credit Agreement" shall mean the "Existing Credit
Agreement" under, and as defined in, the Existing Credit Agreement.
"First Restatement Effective Date" shall mean the "Restatement
Effective Date" as defined in the First Restated Credit Agreement.
"Fiscal Year" shall mean each fiscal year of Furniture Brands
ending on December 31 of each calendar year.
"Florsheim" shall mean The Florsheim Shoe Company, a Delaware
corporation.
"Florsheim Disposition" shall mean the "Florsheim Disposition" as
such term is defined in the Original Credit Agreement.
"Fluvanna Letter of Credit" shall mean a letter of credit issued
by NationsBank pursuant to the Existing Agreement on or after the
First Restatement Effective Date in support of the Existing IRBs.
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America 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 of America, 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 Restricted Subsidiaries
created for the purpose of effecting sales of goods and/or services in
foreign countries.
"Foreign Subsidiary" with respect to any Person shall mean each
Subsidiary thereof that is incorporated under the laws of any juris-
diction other than the United States of America, any State thereof,
the United States Virgin Islands or Puerto Rico.
"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.
"Furniture Brands Warrants" shall mean warrants to purchase
shares of Furniture Brands Common Stock pursuant to the Warrant
Agreement, dated August 3, 1992, between Furniture Brands and The Bank
of New York, as Warrant Agent.
"Guaranty Payments" shall have the meaning provided in Section
9.10(b).
"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 or under
any similar type of agreement. In addition to the foregoing, all
Attributed Receivables Facility Indebtedness shall constitute
Indebtedness.
"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.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean BTCo and any Bank 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
Bank's sole discretion, to become an Issuing Bank for the purpose of
issuing Letters of Credit pursuant to Section 2. On the Third
Restatement Effective Date the sole Issuing Banks are (x) BTCo and (y)
NationsBank with respect to the Fluvanna Letter of Credit.
"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 Restricted 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 obligations customarily supported by Standby Letters of Credit
and satisfactory to the Administrative Agent.
"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.
"Letter of Credit" shall have the meaning provided in Section
2.01(a) and shall include Trade Letters of Credit and Standby Letters
of Credit.
"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), including Trade Letter of Credit Requests and Standby
Letter of Credit Requests.
"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 Term Loan, each Revolving Loan and each
Swingline Loan.
"Majority Banks" of any Tranche shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined
in, this Agreement if all outstanding Obligations of the other
Tranches under this Agreement were repaid in full and all Commitments
with respect thereto were terminated.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(d).
"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 Restricted 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, (x) any available indemnities and (y) the timing and likelihood
of payments thereunder.
"Maturity Date" shall mean, with respect to any Tranche of Loans,
the Term Loan Maturity Date, the Revolving Loan Maturity Date or the
Swingline Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $15,000,000.
"Minimum Borrowing Amount" shall mean (i) for Revolving Loans
$1,000,000 and, if greater, in an integral multiple of $500,000; (ii)
for Term Loans $1,000,000 and, if greater, in an integral multiple of
$1,000,000; and (iii) for Swingline Loans, $500,000 and, if greater,
in an integral multiple of $100,000.
"Mortgage" shall mean and include each Existing Mortgage, as
amended pursuant to the respective Mortgage Amendment, and, after the
execution and delivery thereof, each Additional Mortgage, in each case
as same may be amended, modified or supplemented from time to time.
"Mortgage Amendments" shall have the meaning provided in Section
5.10.
"Mortgage Policies" shall mean and include each Existing Mortgage
Policy and, after the execution and delivery thereof, each mortgage
insurance policy issued with respect to an Additional Mortgaged
Property.
"Mortgaged Property" shall mean each Existing Mortgaged Property
and, after the execution and delivery of any Additional Mortgage,
shall include the respective Additional Mortgaged Property.
"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, except for
a Spunoff Plan, 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.
"NationsBank" shall have the meaning provided in the first
paragraph of this Agreement.
"Net Cash Proceeds" shall mean for any event requiring a
mandatory repayment pursuant to Section 4.02, the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when
received) received from such event, net of reasonable transaction
costs (including, as applicable, any underwriting, brokerage or other
customary commissions and reasonable legal, advisory and other fees
and expenses associated therewith) received from any such event.
"Net Sale Proceeds" shall mean for any sale of assets, the gross
cash proceeds (including any cash received by way of deferred payment
pursuant to a promissory note, receivable or otherwise, but only as
and when received) received from any sale of assets, net of reasonable
transaction costs (including, without limitation, any underwriting,
brokerage or other customary selling commissions and reasonable legal,
advisory and other fees and expenses, including title and recording
expenses, associated therewith) and payments of unassumed liabilities
relating to the assets sold at the time of, or within 30 days after,
the date of such sale, the amount of such gross cash proceeds required
to be used to repay any Indebtedness (other than Indebtedness of the
Banks pursuant to this Agreement) which is secured by the respective
assets which were sold, and the estimated marginal increase in income
taxes which will be payable by Furniture Brands's consolidated group
with respect to the fiscal year in which the sale occurs as a result
of such sale; but excluding any portion of any such gross cash pro-
ceeds which Furniture Brands determines in good faith should be
reserved for post-closing adjustments (to the extent Furniture Brands
delivers to the Banks a certificate signed by its chief financial
officer, controller or chief accounting officer as to such determina-
tion), it being understood and agreed that on the day that all such
post-closing adjustments have been determined, (which shall not be
later than six months following the date of the respective asset
sale), the amount (if any) by which the reserved amount in respect of
such sale or disposition exceeds the actual post-closing adjustments
payable by Furniture Brands or any of its Restricted Subsidiaries
shall constitute Net Sale Proceeds on such date received by Furniture
Brands and/or any of its Restricted Subsidiaries from such sale,
lease, transfer or other disposition.
"New Bank" shall mean each of the Persons listed on Schedule I
that is not a Continuing Bank.
"Non-Continuing Bank" shall have the meaning provided in Section
13.18(b).
"Non-Defaulting Bank" shall mean and include each Bank other than
a Defaulting Bank.
"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 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 the Administrative
Agent, the Collateral Agent, any Issuing Bank or any Bank pursuant to
the terms of this Agreement or any other Credit Document.
"Original Credit Agreement" shall mean the "Original Credit
Agreement" as defined in the First Restated Credit Agreement.
"Original Effective Date" shall mean the Effective Date as
defined in, the Original Credit Agreement.
"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 ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving
Loan Commitment of such Bank at such time and the denominator of which
is the Total Revolving Loan Commitment at such time, provided that if
the Percentage of any Bank is to be determined after the Total
Revolving Loan Commitment has been terminated, then the Percentages of
the Banks shall be determined immediately prior (and without giving
effect) to such termination.
"Permitted Acquired Debt" shall mean Indebtedness (other than
Permitted Subordinated Indebtedness and Permitted Unsecured
Indebtedness incurred pursuant to Sections 9.04(ii) and (iii)) assumed
or acquired in connection with a Permitted Acquisition as permitted
under this Agreement.
"Permitted Acquisition" shall mean the acquisition by the
Borrowers or any of their Restricted Subsidiaries of assets
constituting part of or an entire business or division of any Person
not already a Subsidiary of the Borrowers or of 100% of the capital
stock of any such Person which Person shall, as a result of such
acquisition, become a Restricted Subsidiary, provided that (A) the
consideration paid by the Borrowers and/or their Restricted
Subsidiaries consists solely of cash or Furniture Brands Common Stock
or Qualified Preferred Stock or Disqualified Preferred Stock permitted
pursuant to Section 9.12(b), the issuance of Indebtedness otherwise
permitted in Section 9.04 and the assumption/acquisition of any
Permitted Acquired Debt (calculated at face value) relating to such
business, division or Person, (B) the assets acquired, or the business
of the Person whose stock is acquired, shall be in the same line of
business in which the Borrowers and their Restricted Subsidiaries are
already engaged, and (C) in the case of the acquisition of 100% of the
capital stock of any Person, such Person shall own no capital stock of
any other Person unless either (x) such Person owns 100% of the
capital stock of such other Person or (y) (1) such Person and/or its
Wholly-Owned Subsidiaries own 80% of the consolidated assets or
capital stock of such Person and its Subsidiaries and (2) any non-
Wholly Owned Subsidiary of such Person was non-Wholly Owned prior to
the date of such Permitted Acquisition of such Person (it being under-
stood and agreed that investments by Subsidiaries shall be permitted
in accordance with the provisions of Section 9.05). Notwithstanding
anything to the contrary contained in the immediately preceding
sentence, any acquisition shall be a Permitted Acquisition only if all
requirements of Sections 8.14 and 9.02(vii) applicable to Permitted
Acquisitions are met with respect thereto.
"Permitted Debt Agreements" shall have the meaning provided in
the Existing Credit Agreement.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title
insurance policy or title commitment delivered with respect thereto,
all of which exceptions must be acceptable to the Administrative Agent
in its reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Permitted Subordinated Indebtedness" shall mean any Indebtedness
(including, without limitation, any Permitted Subordinated
Indebtedness incurred in connection with the creation of a replacement
Receivables Facility) which is subordinated on terms reasonably
satisfactory to the Administrative Agent and the Required Banks to all
Obligations hereunder and any other obligations secured pursuant to
the Security Documents and incurred by the Borrowers, 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 under the
periods covered by, the financial covenants contained in Sections 9.08
and 9.09 of this Agreement, (ii) based on good faith projections pre-
pared 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 9.08 and 9.09 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 9.08 and
9.09 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 Banks an
officer's certificate by the chief financial officer or treasurer of
Furniture Brands certifying to the best of his knowledge as to
compliance with the requirements of the preceding clauses (i) and (ii)
and containing the pro forma calculations and projections required by
the preceding clauses (i) and (ii), (iv) such Indebtedness shall
require no amortization, sinking fund payment or any other scheduled
maturity of the principal amount thereof on any date which is earlier
than the date occurring one year after the Term Loan Maturity Date and
(v) all other provisions of such Indebtedness (including, without
limitation, covenants, defaults and remedies) in the documents
governing or evidencing the same are reasonably satisfactory to the
Administrative Agent and the Required Banks. To the extent the
preceding sentence requires terms of Permitted Subordinated
Indebtedness to be satisfactory to the Required Banks, such terms
shall be deemed satisfactory to the Required Banks unless objected to
by the Required Banks in writing on or prior to the date which is 20
Business Days after the documentation therefor is delivered to the
Banks. Notwithstanding anything to the contrary contained above in
the definition of "Permitted Subordinated Indebtedness", all Permitted
Subordinated Indebtedness shall be required to constitute Indebtedness
for borrowed money (where 100% of the consideration received for the
issuance of such Indebtedness is cash), except that Permitted
Subordinated Indebtedness may be issued directly as consideration in
connection with a Permitted Acquisition so long as (i) the proviso to
Section 9.04(ii)(x) has been complied with and (ii) the aggregate
principal amount of all Permitted Subordinated Indebtedness issued
after the Second Restatement Effective Date as consideration in con-
nection with Permitted Acquisitions, when added to the sum of (x) the
aggregate liquidation preference or amount of all Disqualified
Preferred Stock so issued after the Second Restatement Effective Date
as consideration in connection with Permitted Acquisitions pursuant to
Section 9.12(b)(i), (y) the aggregate principal amount of all
Permitted Subordinated Indebtedness issued or incurred after the
Second Restatement Effective Date but not issued as consideration in
connection with Permitted Acquisitions to the extent an amount equal
to the Net Cash Proceeds therefrom has not been required to be applied
to repay Loans as a result of clause (u)(ii) of the parenthetical
contained in Section 4.02(A)(b), and (z) the aggregate liquidation
preference or amount of all Disqualified Preferred Stock issued after
the Second Restatement Effective Date pursuant to Section 9.12(b)(i)
but not issued as consideration in connection with Permitted
Acquisitions, to the extent an amount equal to the Net Cash Proceeds
therefrom has not been required to be used to repay Loans as a result
of clause (z)(ii) of the parenthetical to Section 4.02(A)(b), does not
exceed $50,000,000.
"Permitted Unsecured Indebtedness" shall mean any general
unsecured Indebtedness incurred by the Borrowers, 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 under the
periods covered by, the financial covenants contained in Sections 9.08
and 9.09 of this Agreement, (ii) based on good faith projections pre-
pared 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 9.08 and 9.09 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 9.08 and
9.09 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 Banks an
officer's certificate by the chief financial officer or treasurer of
Furniture Brands certifying to the best of his 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 average life of such Indebtedness at
the time of the incurrence thereof shall be at least one year beyond
the Term Loan Maturity Date (assuming maximum utilization thereof) and
(v) such Indebtedness shall not contain any provision (including,
without limitation, covenants, defaults and remedies) in the documents
governing or evidencing the same which, in the opinion of the
Administrative Agent, are more restrictive than the provisions in the
Credit Documents. Notwithstanding anything to the contrary contained
above in the definition of "Permitted Unsecured Indebtedness", all
Permitted Unsecured Indebtedness shall be required to constitute
indebtedness for borrowed money where 100% of the consideration
received for the issuance for such Indebtedness is cash, except that
Permitted Unsecured Indebtedness may be issued directly as
consideration in connection with Permitted Acquisitions so long as the
proviso to Section 9.04(iii) has been complied with.
"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 except for a
Spunoff Plan, 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.
"Pledge Agreement" shall have the meaning provided in Section
5.08.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledged Securities" shall mean "Pledged Securities" as defined
in the Pledge Agreement.
"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 and
Disqualified Preferred Stock.
"Prime Lending Rate" shall mean the rate which BTCo 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. BTCo may make com-
mercial 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 or issuance of any Disqualified
Preferred Stock during the Reference Period or subsequent to the
Reference Period and on or prior to the date of the transaction refer-
enced in clause (i) above (the "Transaction Date"), (w) all
Indebtedness or Disqualified Preferred Stock (including the
Indebtedness or Disqualified Preferred Stock 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, (x)
Consolidated Net Interest Expense of such Person attributable to
interest or dividends on any Indebtedness or Disqualified Preferred
Stock, as the case may be, bearing floating interest rates should be
computed on a pro forma basis as if the rate in effect on the
Transaction Date had been the applicable rate for the entire period,
(y) Consolidated Net Interest Expense of such Person attributable to
interest on any Indebtedness under any revolving credit facility which
was in effect during the respective Reference Period shall be computed
on a pro forma basis based upon the average daily balance of such
Indebtedness outstanding during the applicable period (or, if shorter,
the portion of the period during which the revolving credit facility
was in effect) and (z) Consolidated Net Interest Expense will be
increased or reduced by the net cost (including amortization of
discount) or benefit (after giving effect to amortization of discount)
associated with the Interest Rate Protection Agreements, which will
remain in effect for the twelve-month period after the Transaction
Date and which shall have the effect of fixing the interest rate on
the date of computation, and
(iii) in making any determination of Consolidated EBITDA, pro
forma effect shall be given to any Permitted Acquisition or
Significant Divestiture which occurred during the Reference Period or
subsequent to the Reference Period and prior to the Transaction Date,
Consolidated EBITDA shall be determined as if such Permitted
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.
"Projections" shall have the meaning provided in Section 5.14(b).
"Purchase and Contribution Agreement" shall mean the Purchase and
Contribution Agreement, dated as of November 15, 1994 as amended and
restated as of December 29, 1995, among Broyhill, Lane, Action and
Thomasville and the Receivables Subsidiary, as same may be further
amended, modified or supplemented from time to time in compliance with
Section 9.10, or as replaced in compliance with the definition of
Receivables Facility.
"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 (and any
refinancings, replacements or extensions hereof) 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 Term Loan
Maturity Date.
"Quarterly Payment Date" shall mean the last Business Day of each
June, September, December and March, occurring after the Third
Restatement 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. Section 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.
"Receivables Documents" shall mean the Receivables Purchase
Agreements, the Purchase and Contribution Agreement and any related
documentation entered into by the Borrowers and their Restricted
Subsidiaries, the Receivables Subsidiary and/or the Receivables
Purchasers in connection with the Receivables Facility.
"Receivables Facility" shall mean the arrangement pursuant to
which (x) each of Broyhill, Lane, Action and Thomasville and its
respective Subsidiaries will from time to time sell accounts
receivable to the Receivables Subsidiary and (y) the Receivables
Subsidiary shall sell interests in the receivables to the Receivables
Purchasers, or obtain subordinated loans secured by the receivables
from the Receivables Purchasers, as more fully set forth in the
Receivables Documents; provided, that the Receivables Facility may be
replaced after the date hereof so long as the Administrative Agent is
reasonably satisfied that the terms and conditions of any replacement
facility are as favorable or more favorable to Furniture Brands and
its Restricted Subsidiaries and to the Banks (and in any event
contains no greater degree of recourse to Furniture Brands and its
Restricted Subsidiaries (other than the Receivables Subsidiary)) than
the terms and conditions of the current Receivables Facility (in which
event such replacement facility shall be deemed to be the Receivables
Facility hereunder).
"Receivables Purchase Agreements" shall mean and include the
Atlantic Receivables Purchase Agreement, the Alternate Receivables
Purchase Agreement and the Subordinated Loan Agreement.
"Receivables Purchaser" shall mean and include (i) with respect
to the Alternate Receivables Purchase Agreement, Credit Lyonnais and
(ii) with respect to the Atlantic Receivables Purchase Agreement,
Atlantic and Credit Lyonnais and (iii) with respect to the
Subordinated Loan Agreement, Credit Lyonnais and their respective
successors and assigns (in the event that the Receivables Facility is
replaced, any replacement receivables purchasers shall be deemed to be
the Receivables Purchasers hereunder).
"Receivables Subsidiary" shall mean Interco Receivables Corp.,
the special purpose subsidiary formed by Broyhill, Lane and Action and
owned by Broyhill, Lane, Action and Thomasville to purchase and
receive contributions of receivables from each of Broyhill, Lane,
Action and Thomasville and their respective other Restricted
Subsidiaries pursuant to the Receivables Facility.
"Recovery Event" shall mean the receipt by Furniture Brands or
any of its Restricted Subsidiaries of any cash insurance proceeds or
condemnation award payable (i) by reason of theft, loss, physical
destruction or damage or any other similar event with respect to any
property or assets of the Borrowers or any of its Subsidiaries and
(ii) under any policy of insurance required to be maintained under
Section 8.03.
"Reduction Percentage" shall mean .125% on and from the Third
Restatement Effective Date through July 30, 1997 (or such earlier date
on which the Borrowers deliver to the Administrative Agent a
certificate containing the calculations of Leverage Ratio for the
fiscal quarter ended June 30, 1997), and thereafter shall mean, from
and after each day of delivery of any certificate delivered in
accordance with the following sentence indicating an entitlement to a
Reduction Percentage other than zero (each, a "Start Date") to and in-
cluding the applicable End Date described below, the percentage set
forth below opposite the Leverage Ratio indicated to have been
achieved in any certificate delivered in accordance with the following
sentence:
Leverage Interest
Ratio Reduction Discount
----------- ------------------
Equal to or
greater than 4.00:1 0%
Equal to or .125%
greater than
3.50:1 but less
than 4.00:1
Equal to or .250%
greater than
3.00:1 but less
than 3.50:1
Equal to or .375%
greater than
2.50:1 but less
than 3.00:1
Less than 2.50:1 .625%
From and after the date of the delivery of the certificate referenced
above for the fiscal quarter ended June 30, 1997, the Leverage Ratio
shall be determined based on the delivery of a certificate of the
Borrowers by an Authorized Representative of the Borrowers to the
Administrative Agent, within 30 days of the last day of any fiscal
quarter of Furniture Brands (beginning after the fiscal quarter ended
on June 30, 1997, based on calculations made at the end of each fiscal
quarter commencing with the fiscal quarter ended June 30, 1997, which
certificate shall set forth the calculation of the Leverage Ratio for
the fiscal quarter ended immediately prior to the relevant Start Date
and the Reduction Percentage which shall be thereafter applicable
(until same is changed or ceases to apply in accordance with the
following sentences). The Reduction Percentage so determined shall
apply, except as set forth in the succeeding sentence, from the Start
Date to the earlier of (x) the date on which the next certificate is
delivered to the Administrative Agent and (y) the date which is 30
days following the last day of the fiscal quarter in which the
previous Start Date occurred (the "End Date"), at which time, if no
certificate has been delivered to the Administrative Agent indicating
an entitlement to a Reduction Percentage other than zero (and thus
commencing a new Start Date), the Reduction Percentage shall be
reduced to zero. Notwithstanding anything to the contrary contained
above in this definition, the Reduction Percentage shall be reduced to
zero at all times during which there shall exist an Event of Default.
"Refinancing" shall mean all repayments and refinancings of
Indebtedness under the Existing Credit Agreement in connection with
the Transaction.
"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 G" shall mean Regulation G 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 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 Bank" shall have the meaning provided in Section 1.13.
"Replacement Bank" 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 Appraisal" shall have the meaning provided in Section
8.11(g).
"Required Banks" shall mean Non-Defaulting Banks, the sum of
whose outstanding Term Loans (or, if prior to the Third Restatement
Effective Date, Term Loan Commitments) and Revolving Loan Commitments
(or after the termination thereof, outstanding Revolving Loans and
Adjusted Percentage of Swingline Loans and Letter of Credit Outstand-
ings) represent greater than 50% of the sum of all outstanding Term
Loans (or, if prior to the Third Restatement Effective Date, Term Loan
Commitments) and the Adjusted Total Revolving Loan Commitment (or
after the termination thereof, the sum of the then total outstanding
Revolving Loans of Non-Defaulting Banks and the aggregate Adjusted
Percentages of all Non-Defaulting Banks of the total outstanding
Swingline Loans and Letter of Credit Outstandings at such time).
"Required Supermajority Banks" shall mean those Non-Defaulting
Banks which would constitute the Required Banks under, and as defined
in, this Agreement if the term "50%" contained therein were changed to
"66-2/3%."
"Restricted Junior Payment" shall have the meaning provided in
Section 9.10.
"Restricted Subsidiaries" shall mean, (x) all of the Subsidiaries
of the Borrowers and their respective Subsidiaries in existence on the
Third Restatement Effective Date and (y) any Subsidiary (other than an
Unrestricted Subsidiary) that is created, established or acquired
after the Third Restatement Effective Date.
"Returned Investment Amount" shall mean, with respect to all
Investments made pursuant to Section 9.05(vii) after the Second
Restatement Effective Date in Persons which are Unrestricted
Subsidiaries or are not Restricted Subsidiaries, the aggregate amount
of cash received by Furniture Brands and its Restricted Subsidiaries
which are Wholly-Owned Subsidiaries of Furniture Brands representing a
return of capital of such Investment, in each case to the extent the
amount of capital so returned is not, and will not be, included in
Consolidated Net Income.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section
1.01(b).
"Revolving Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I hereto directly
below the column entitled "Revolving Loan Commitment," as same may be
(x) reduced from time to time pursuant to Sections 3.02, 3.03, 4.02
and/or 10 or (y) adjusted from time to time as a result of assign-
ments to or from such Bank pursuant to Section 1.13 or 13.04(b).
"Revolving Loan Maturity Date" shall mean September 15, 2001.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"Scheduled Commitment Reduction" shall have the meaning provided
in Section 3.03(d).
"Scheduled Commitment Reduction Date" shall mean each date upon
which any Scheduled Commitment Reduction is to occur.
"SEC" shall have the meaning provided in Section 8.01(h).
"Second Restatement Effective Date" shall mean the Second
Restatement Effective Date under and as defined in the Existing Credit
Agreement.
"Section 4.04(b)(ii) Certificate" shall have the meaning provided
in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term in
the Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Security Agreement" shall have the meaning provided in Section
5.09.
"Security Agreement Collateral" shall mean all "Collateral" as
defined in the Security Agreement (which shall exclude all assets of
the Receivables Subsidiary).
"Security Document" shall mean the Pledge Agreement, the Security
Agreement, each Mortgage and, after the execution and delivery
thereof, each Additional Mortgage and each Additional Security
Document.
"Senior Debt Leverage Ratio" shall mean on any date a ratio
calculated as provided in the definition of Leverage Ratio contained
herein; provided that the term "Consolidated Senior Debt" shall be
deemed inserted in lieu of the term "Consolidated Debt" in clause (i)
of the definition of Leverage Ratio.
"Shareholders' Agreements" shall have the meaning provided in the
Existing Credit Agreement.
"Significant Divestiture" shall mean any sale or other
disposition of assets by Furniture Brands and/or its Restricted
Subsidiaries, the fair market value of which exceeds $500,000 for any
transaction (or series of related transactions).
"Solvent Entity" shall have the meaning provided in Section
7.05(c).
"Spunoff Plan" shall mean any employee benefit plan as defined in
Section 3(3) of ERISA which Furniture Brands ceased to maintain or
contribute to pursuant to the Distribution and Services Agreement
dated as of November 17, 1994.
"Standby Letter of Credit" shall mean any Standby Letter of
Credit or similar instrument issued or deemed issued for the account
of any Borrower pursuant to Section 2.01 for the purpose of supporting
L/C Supportable Obligations.
"Standby Letter of Credit Request" shall have the meaning
provided in Section 2.03(a).
"Start Date" shall have the meaning provided in the definition of
`Reduction Percentage.'
"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) and (y) each Acceptance shall mean the amount of each
such Acceptance.
"Stock Repurchase" shall have the meaning provided in Section
5.16(b).
"Stock Repurchase Agreement" shall mean the Stock Repurchase
Agreement dated as of May 27, 1997 by and among Furniture Brands and
Apollo Group.
"Stock Repurchase Documents" shall mean the Stock Repurchase
Agreement and all other documents entered into or delivered in
connection with the Stock Repurchase Agreement.
"Subordinated Loan Agreement" shall mean the Subordinated Loan
Agreement in the form annexed to the Atlantic Receivables Purchase
Agreement on the First Restatement Effective Date.
"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. As used
in this Agreement, the term "Subsidiary" shall include or apply to any
Restricted Subsidiary and any Unrestricted Subsidiary.
"Subsidiary Guarantor" shall mean Broyhill Transport, Inc., a
North Carolina corporation, Lane Advertising, Inc., a Virginia
corporation, Action Industries, Inc., a Virginia corporation, Action
Transport, Inc., a Delaware corporation, Fayette Enterprises, Inc., a
Mississippi corporation, ▇▇▇▇▇▇'▇, Inc., a Delaware corporation,
Thomasville Chair Company, a North Carolina corporation, Thomasville
Home Furnishings, Inc., a Delaware corporation, Thomasville
Upholstery, Inc., a Delaware corporation, and Action U.K., Inc., a
Delaware corporation, and any Restricted Subsidiary of any Borrower
which executes a guarantee after the Third Restatement Effective Date
pursuant to Section 8.11, but shall in any event exclude the
Receivables Subsidiary and Thomasville Furniture Latin America, S.A.
"Subsidiary Guaranty" shall have the meaning provided in Section
5.07.
"Supermajority Banks" of any Tranche shall mean those Non-
Defaulting Banks which would constitute the Required Banks under, and
as defined in, this Agreement if (x) all outstanding Obligations of
the other Tranches under this Agreement were repaid in full and all
Commitments with respect thereto were terminated and (y) the term
"50%" contained therein were changed to "66-2/3%."
"Surviving Guaranties" shall mean the guarantee obligations of
Furniture Brands with respect to the leases described in Schedule XV
hereto.
"Swingline Expiry Date" shall mean the date which is two Business
Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(c).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Agent" shall mean NationsBank, in its capacity as
Syndication Agent for the Banks hereunder.
"Tax Sharing Agreement" shall mean any tax sharing,
disaffiliation or tax allocation agreement entered into among the
Borrowers, Converse and Florsheim, as amended.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Term Loan" shall have the meaning provided in Section 1.01(a).
"Term Loan Commitment" shall mean for each Bank, the amount set
forth opposite such Bank's name in Schedule I hereto directly below
the column entitled "Term Loan Commitment," as same may be (x) reduced
from time to time pursuant to Sections 3.03, 4.02 and/or 10 or (y)
adjusted from time to time as a result of assignments to or from such
Bank pursuant to Sections 1.13 and 13.04(b).
"Term Loan Maturity Date" shall mean June 27, 2007.
"Term Note" shall have the meaning provided in Section 1.05(a).
"Third Restatement Effective Date" shall have the meaning
provided in Section 13.10.
"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 Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of
the Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at any
time, an amount equal to the remainder of (x) the then Total Revolving
Loan Commitment, less (y) the sum of the aggregate principal amount of
Revolving Loans and Swingline Loans outstanding plus the then
aggregate amount of Letter of Credit Outstandings.
"Trade Letter of Credit" shall mean any Letter of Credit or
similar instrument issued for the account of any Borrower pursuant to
Section 2.01 for the purpose of providing the primary payment
mechanism in connection with the purchase of any materials, goods or
services by the Borrowers or their Restricted Subsidiaries in the
ordinary course of business of the Borrowers or their Restricted
Subsidiaries.
"Trade Letter of Credit Request" shall have the meaning provided
in Section 2.03(a).
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being three separate
Tranches, i.e., Term Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean (i) the amendment and restatement of the
Existing Credit Agreement in the form of this Agreement as provided
herein, (ii) the incurrence of the Loans hereunder on the Third
Restatement Effective Date, (iii) the consummation of the Stock
Repurchase and (iv) the consummation of the Refinancing.
"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).
"Unrestricted Subsidiary" shall mean any Wholly-Owned Subsidiary
of Furniture Brands that is acquired or created after the Third
Restatement Effective Date and designated by Furniture Brands as an
Unrestricted Subsidiary hereunder by written notice to the
Administrative Agent; provided that Furniture Brands shall only be
permitted to so designate a new Unrestricted Subsidiary after the
Third Restatement Effective Date and so long as (i) no Default or
Event of Default exists or would result therefrom and (ii) 100% of the
capital stock of such newly-designated Unrestricted Subsidiary is
owned by Furniture Brands or another Unrestricted Subsidiary and all
of the provisions of Section 9.11 shall have been complied with in
respect of such newly-designated Unrestricted Subsidiary and such
Unrestricted Subsidiary is capitalized (to the extent capitalized by
Furniture Brands or any of its Restricted Subsidiaries) through
Investments as permitted by, and in compliance with, Section
9.05(vii), with any assets owned by such Unrestricted Subsidiary at
the time of the initial designation thereof to be treated as
Investments made pursuant to Section 9.05(vii), provided that at the
time of the initial Investments by Furniture Brands in such Subsidiary
(x) Furniture Brands shall designate such entity as an Unrestricted
Subsidiary in a written notice to the Administrative Agent and (y)
such entity and the Borrowers shall have entered into tax sharing and
management services agreements on a basis reasonably satisfactory to
the Administrative Agent. Additionally, Furniture Brands may not
designate any Credit Party, the Receivables Subsidiary or any
Subsidiary created or acquired pursuant to a Permitted Acquisition as
an Unrestricted Subsidiary.
"Unutilized Revolving Loan Commitment" with respect to any Bank,
at any time, shall mean such Bank's Revolving Loan Commitment at such
time less the sum of (i) the aggregate outstanding principal amount of
Revolving Loans made by such Bank and (ii) such Bank's Adjusted
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 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 Banks hereby designate BTCo as
Administrative Agent (for purposes of this Section 12, the term
"Administrative Agent" shall include BTCo in its capacity as
Collateral Agent pursuant to the Security Documents), Credit Lyonnais
as Documentation Agent and NationsBank as Syndication Agent, in each
case to act as specified herein and in the other Credit Documents.
Each Bank hereby irrevocably authorizes, and each holder of any Note
by the acceptance of such Note shall be deemed irrevocably to author-
ize, the Administrative Agent, the Documentation Agent and the
Syndication Agent to take such action on its behalf under the provi-
sions 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 the
Administrative Agent, the Documentation Agent or the Syndication Agent
by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. Each of the Administrative Agent, the
Documentation Agent and the Syndication Agent may perform any of its
duties hereunder by or through its respective officers, directors,
agents, employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not
have any duties or responsibilities except those expressly set forth
in this Agreement and the Security Documents. The Documentation Agent
and the Syndication Agent, as such, shall not have any duties or
responsibilities under this Agreement or any Security Document or any
other document or matter related thereto. None of the Administrative
Agent, the Documentation Agent or the Syndication Agent nor any of its
respective 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 the Administrative Agent, the Documentation
Agent and the Syndication Agent shall be mechanical and administrative
in nature; the Administrative Agent, the Documentation Agent and the
Syndication Agent shall not have by reason of this Agreement or any
other Credit Document a fiduciary relationship in respect of any Bank
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 the Administrative Agent, the
Documentation Agent and the Syndication 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 Administrative Agent, the
Documentation Agent and the Syndication Agent. Independently and
without reliance upon the Administrative Agent, the Documentation
Agent and the Syndication Agent, each Bank 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 Sub-
sidiaries and, except as expressly provided in this Agreement, the
Administrative Agent, the Documentation Agent and the Syndication
Agent shall not have any duty or responsibility, either initially or
on a continuing basis, to provide any Bank 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. None of the Administrative Agent, the
Documentation Agent or the Syndication Agent or any of their
respective affiliates nor any of their respective officers, directors,
agents, or employees shall be responsible to any Bank 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 Administrative Agent, the
Documentation Agent and the Syndication Agent. If the Administrative
Agent, the Documentation Agent or the Syndication Agent shall request
instructions from the Required Banks with respect to any act or
action (including failure to act) in connection with this Agreement or
any other Credit Document, such Administrative Agent, Documentation
Agent or Syndication Agent shall be entitled to refrain from such act
or taking such action unless and until the Administrative Agent shall
have received instructions from the Required Banks; and such
Administrative Agent, Documentation Agent or Syndication Agent shall
not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Bank or holder of any Note shall have any
right of action whatsoever against the Administrative Agent, the
Documentation Agent or the Syndication Agent as a result of the
Administrative Agent acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of
the Required Banks.
12.05 Reliance. The Administrative Agent, the Documentation
Agent and the Syndication 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 Administrative Agent,
Documentation Agent or Syndication 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 Administrative
Agent, Documentation Agent or Syndication Agent (which may be counsel
for the Credit Parties).
12.06 Indemnification. To the extent each of the
Administrative Agent, the Documentation Agent or the Syndication Agent
is not reimbursed and indemnified by the Borrowers, the Banks will
reimburse and indemnify such Administrative Agent, Documentation Agent
or Syndication Agent, in proportion to their respective "percentages"
as used in determining the Required Banks (determined as if there were
no Defaulting Banks), for and against any and all liabilities, obli-
gations, 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 Administrative
Agent, Documentation Agent or Syndication Agent in performing its
respective 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 Bank shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from such
Administrative Agent's, Documentation Agent's or Syndication Agent's
gross negligence or willful misconduct.
12.07 The Administrative Agent, the Documentation Agent and
the Syndication Agent in its Individual Capacity. With respect to its
obligation to make Loans and participate in Letters of Credit under
this Agreement, each of the Administrative Agent, the Documentation
Agent and the Syndication Agent shall have the rights and powers
specified herein for a "Bank" and may exercise the same rights and
powers as though it were not performing the duties specified herein;
and the term "Banks," "Required Banks," "holders of Notes" or any
similar terms shall, unless the context clearly otherwise indicates,
include the Administrative Agent, the Documentation Agent and the
Syndication Agent in their individual capacity. Each of the
Administrative Agent, the Documentation Agent and the Syndication
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 Banks.
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
indorsee, 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
Banks. 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 Banks
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 Banks 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
Banks 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 Banks appoint a successor Administrative
Agent as provided above.
(e) The Documentation Agent, as such, may resign at any time
by giving 5 Business Days' prior written notice to the Banks. Such
resignation shall take effect at the end of such five Business Day
period.
(f) The Syndication Agent, as such, may resign at any time by
giving 5 Business Days' prior written notice to the Banks. Such
resignation shall take effect at the end of such five Business Day
period.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrowers jointly and
severally shall: (i) whether or not the transactions herein contem-
plated are consummated, pay all reasonable out-of-pocket costs and
expenses of the Administrative Agent (including, without limitation,
the reasonable fees and disbursements of White & Case and local
counsel) 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 the Agents in connection
with their respective syndication efforts with respect to this
Agreement and of the Administrative Agent and, following and during
the continuation of an Event of Default, each of the Banks 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 the Administrative Agent and, following
and during the continuation of an Event of Default, for each of the
Banks); (ii) pay and hold each of the Banks 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 Banks
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 Bank) to pay such taxes; and (iii) indemnify the
Agents and each Bank (including in its capacity as an Issuing Bank),
and each of their respective officers, directors, employees, represen-
tatives, 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, judg-
ments, 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 Bank 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
(including, without limitation, the Transaction) 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, dam-
ages or expenses to the extent incurred by reason of the gross
negligence or willful misconduct of the Person to be indemnified). To
the extent that the undertaking to indemnify, pay or hold harmless any
Agent or any Bank 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 of an Event of
Default, each Bank 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 Bank (including, without limitation, by branches
and agencies of such Bank 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 Bank under
this Agreement or under any of the other Credit Documents, including,
without limitation, all interests in Obligations purchased by such
Bank 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 Bank 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 its signature below; if to any other Credit Party, at such
Credit Party's address set forth in any Credit Document; if to any
Bank, at its address specified opposite its name on Schedule II below;
and if to the Administrative Agent, at its 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 Bank, at such other address as shall be
designated by such Bank 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 Banks and, provided
further, that although any Bank may transfer, assign or grant partici-
pations in its rights hereunder, such Bank shall remain a "Bank" 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 "Bank" hereunder and, provided further,
that no Bank 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 Loan or Note or extend the expiry date of any Letter of Credit in
which such participant is participating beyond the Revolving Loan
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 Revolving Loan Commitment shall not constitute
a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any
participant if the participant's participation is not increased as a
result thereof), (ii) consent to the assignment or transfer by the
Borrowers of any of their rights and obligations under this Agreement
or (iii) release all or substantially all of the Collateral under all
of the Security Documents (except as expressly provided in the Credit
Documents) supporting the Loans and/or Letters of Credit hereunder in
which such participant is participating. 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 Bank in respect of such participation to be those
set forth in the agreement executed by such Bank in favor of the
participant relating thereto) and all amounts payable by the Borrowers
hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion
of its Revolving Loan Commitment (and related outstanding Obligations
hereunder) and/or its outstanding Term Loans (or if prior to the Third
Restatement Effective Date, Term Loan Commitment) to (i) its parent
company and/or any affiliate of such Bank which is at least 50% owned
by such Bank or its parent company or to one or more Banks or (ii) in
the case of any Bank 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 Bank 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, assign
all, or if less than all, a portion equal to at least $10,000,000 in
the aggregate for the assigning Bank or assigning Banks, of such
Revolving Loan Commitments (or, if the Revolving Loan Commitments have
terminated, its outstanding obligations) and/or its outstanding Term
Loans (or if prior to the Third Restatement Effective Date, Term Loan
Commitment) hereunder to one or more Eligible Transferees, each of
which assignees shall become a party to this Agreement as a Bank by
execution of an Assignment and Assumption Agreement, provided that,
(i) at such time Schedule I shall be deemed modified to reflect the
Commitment and/or outstanding Term Loans, as the case may be, of such
new Bank and of the existing Banks, (ii) upon surrender of the old
Notes, new Notes will be issued, at the Borrowers' expense, to such
new Bank and to the assigning Bank, such new Notes to be in conformity
with the requirements of Section 1.05 (with appropriate modifications)
to the extent needed to reflect the revised Commitments and/or
outstanding Term Loans, as the case may be, (iii) the consent of the
Administrative Agent and any Issuing Bank shall be required in connec-
tion with any such assignment of a Bank's Commitment and/or
outstanding Term Loans, as the case may be (which consent shall not be
unreasonably withheld or delayed), and (iv) the Administrative Agent
shall receive at the time of each such assignment (other than in
connection with an assignment by a Bank to an affiliate of such Bank),
from the assigning or assignee Bank, 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 Bank 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 Bank 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 Bank 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 Bank'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 or
1.11 greater than those being charged by the respective assigning Bank
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
Bank from pledging its Loans and Notes hereunder to a Federal Reserve
Bank in support of borrowings made by such Bank from such Federal
Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent or any Bank 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 the Administrative Agent or
any Bank 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
the Administrative Agent or any Bank 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 the Administrative Agent or any Bank 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 Banks (other than any Bank 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 Banks 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 pay-
ment 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 Banks is in a greater
proportion than the total of such Obligation then owed and due to such
Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving
such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the
respective Credit Party to such Banks in such amount as shall result
in a proportional participation by all the Banks in such amount;
provided that if all or any portion of such excess amount is there-
after recovered from such Bank, 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 Banks as
opposed to Defaulting Banks.
13.07 Calculations; Computations. (a) The financial
statements to be furnished to the Banks 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, (i) except as otherwise specifically provided herein,
all computations of Available $25 Million Dividend Basket Amount,
Available $10 Million Acquisition/Investment Basket Amount, Available
Debt Proceeds Amount, Available Unrestricted Proceeds Amount,
Available Net Income Amount, Consolidated Cumulative 25% Net Income
Amount, Returned Investment Amount and Available Returned Investment
Amount and all computations determining compliance with Sections 9.02
through 9.09, inclusive, shall utilize accounting principles and
policies in conformity with those used to prepare the historical
financial statements delivered to the Banks pursuant to Sections
7.05(a), (ii) for all purposes of this Agreement, all Attributed
Receivables Facility Indebtedness of the Receivables Subsidiary shall
be included in the consolidated financial statements of Furniture
Brands and its Restricted Subsidiaries, and shall be considered
Indebtedness of a Restricted Subsidiary of Furniture Brands hereunder,
regardless of any differing treatment pursuant to generally acceptable
accounting principles and (iii) for purposes of calculating financial
terms, all covenants and related definitions, all such calculations
based on the operations of Furniture Brands and its Restricted
Subsidiaries on a consolidated basis shall be made without giving
effect to the operations of any Unrestricted Subsidiaries.
(b) All computations of interest, Commitment Commission and
other Fees hereunder shall be made on the basis of a year of 360 days
for the actual number of days (including the first day but excluding
the last day) occurring in the period for which such interest,
Commitment Commission 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, EXCEPT AS OTHERWISE PROVIDED IN CERTAIN OF THE
MORTGAGES, 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, 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
IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM,
WITH OFFICES ON THE DATE HEREOF AT ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇ AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE AND ACCEPT FOR
AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND
ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED
IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE,
APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
CREDIT PARTY AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT
IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
SATISFACTORY TO THE ADMINISTRATIVE AGENT UNDER THIS AGREEMENT. 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 ANY CREDIT PARTY AT ITS ADDRESS SET FORTH
OPPOSITE ITS 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 BANK 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 CREDIT
PARTY 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 IRRE-
VOCABLY 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. (a) This Agreement shall become
effective on the date (the "Third Restatement Effective Date") on
which (i) each Borrower, each Continuing Bank, each New Bank, the
Required Banks (determined immediately before the occurrence of the
Third Restatement Effective Date) and each Agent 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 its Notice Office and (ii) the
conditions contained in Sections 5, 6 and 13.10(b) are met to the
satisfaction of the Administrative Agent and the Required Banks
(determined immediately after the occurrence of the Third Restatement
Effective Date). Unless the Administrative Agent has received actual
notice from any Bank that the conditions contained in Sections 5 and 6
have not been met to its 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 Third Restatement 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 Third Restatement
Effective Date shall not release the Borrowers from any liability for
failure to satisfy one or more of the applicable conditions contained
in Section 5 or 6). The Administrative Agent will give the Borrowers
and each Bank prompt written notice of the occurrence of the Third
Restatement Effective Date.
(b) On the Third Restatement Effective Date, each Bank shall
have delivered to the Administrative Agent for the account of the
Borrowers an amount equal to the Revolving Loans and Term Loans to be
made by such Bank on the Third Restatement Effective Date.
Notwithstanding anything to the contrary contained in this Section
13.10(b), in satisfying the foregoing condition, unless the
Administrative Agent shall have been notified by any Bank prior to the
occurrence of the Third Restatement Effective Date that such Bank does
not intend to make available to the Administrative Agent such Bank's
Revolving Loans and/or Term Loans required to be made by it on such
date, then the Administrative Agent may, in reliance on such
assumption, make available to the Borrower the corresponding amounts
in accordance with the provisions of Section 1.04 of this Agreement,
and the making available by the Administrative Agent of such amounts
shall satisfy the condition contained in this Section 13.10(b).
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 Banks, provided that no such
change, waiver, discharge or termination shall, without the consent of
each Bank (other than a Defaulting Bank) (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 any Letter of Credit beyond the Revolving Loan
Maturity Date, or reduce the rate or extend the time of payment of
interest or Fees thereon, or reduce the principal amount thereof
(except to the extent repaid in cash), (ii) release all or substanti-
ally all of the Collateral under all the Security Documents (except as
expressly provided in the Credit Documents), (iii) amend, modify or
waive any provision of this Section 13.12, (iv) reduce the percentage
specified in the definition of Required Banks (it being understood
that, with the consent of the Required Banks, additional extensions of
credit pursuant to this Agreement may be included in the determination
of the Required Banks on substantially the same basis as the exten-
sions of Term Loans and Revolving Loan Commitments are included on the
Third Restatement Effective Date) or (v) consent to the assignment or
transfer by the Borrowers of any of their rights and obligations under
this Agreement; provided further, that no such change, waiver,
discharge or termination shall (s) increase the Commitment of any Bank
over the amount thereof then in effect without the consent of such
Bank (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 Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase
in the Commitment of such Bank), (t) without the consent of the
respective Issuing Bank or Issuing Banks, amend, modify or waive any
provision of Section 2 with respect to Letters of Credit issued by it
or alter its rights or obligations with respect to Letters of Credit
or Acceptances, (u) without the consent of BTCo, amend, modify or
waive any provision of Sections 1.01(c) and (d) or alter its rights
and obligations with respect to Swingline Loans, (v) 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,
(w) without the consent of the Collateral Agent, amend, modify or
waive any provision relating to the rights or obligations of the
Collateral Agent, (x) without the consent of the Majority Banks of
Term Loans, amend the definition of Majority Banks or reallocate any
amounts that would otherwise be applied as a mandatory repayment of
Term Loans hereunder to the permanent reduction of the Total Revolving
Loan Commitment or as a mandatory repayment of Revolving Loans or
Swingline Loans, (y) without the consent of the Supermajority Banks of
the respective Tranche of Revolving Loans (1) amend, modify or waive
any Scheduled Commitment Reduction, or (2) reduce the percentage
specified in the definition of Supermajority Banks with respect to
such Tranche, and (z) without the consent of the Required
Supermajority Banks, (1) release any significant portion of the
Collateral under the Security Documents (except as expressly provided
in the Credit Documents) or release any significant Subsidiary
Guarantor from its obligations under the Subsidiary Guaranty (other
than in connection with a transaction permitted pursuant to Section
9.02); provided that no Collateral shall constitute a significant
portion of the Collateral and no Subsidiary Guarantor shall constitute
a significant Subsidiary Guarantor if the fair market value of the
Collateral to be released plus the fair market value of the assets
owned or held by such Subsidiary Guarantor is $20 million or less in
the aggregate (based on a certificate of the chief financial officer
of Furniture Brands taking into account all prior releases) or (2)
reduce the percentage specified in the definition of Required
Supermajority Banks.
(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 Banks is
obtained but the consent of one or more of such other Banks whose
consent is required is not obtained, then the Borrowers shall have the
right, so long as all non-consenting Banks whose individual consent is
required are treated as described in either clauses (A) or (B) below,
to either (A) replace each such non-consenting Bank or Banks with one
or more Replacement Banks pursuant to Section 1.13 so long as at the
time of such replacement, each such Replacement Bank consents to the
proposed change, waiver, discharge or termination or (B) terminate
such non-consenting Bank'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 Banks or the increase of the Commitments and/or outstanding Loans
of existing Banks (who in each case must specifically consent
thereto), then in the case of any action pursuant to preceding clause
(B) the Required Banks (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
Bank, terminate its Commitment or repay its Loans solely as a result
of the exercise of such Bank's rights (and the withholding of any
required consent by such Bank) 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 Bank may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or
Affiliate of such Bank. 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 Bank 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 Bank 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 Bank
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 Bank 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 Bank 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 Bank 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 Bank 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 Bank if the Bank or such Bank'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 Bank) 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 Banks in writing as confidential, provided
that any Bank may disclose any such information (a) as has become
generally available to the public, (b) as may be required or appro-
priate in any report, statement or testimony submitted to any
municipal, state or Federal regulatory body having or claiming to have
jurisdiction over such Bank 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 Bank, (e)
to any Agent or the Collateral 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 Bank, 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 Bank's investment portfolio
in connection with ratings issued to such Bank.
(b) Each of the Borrowers hereby acknowledges and agrees that
each Bank 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 Bank.
13.17 Register. The Borrowers hereby designate the
Administrative Agent to serve as the Borrowers' agent, solely for pur-
poses 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 Banks, the Loans made by each of the Banks and each repayment in
respect of the principal amount of the Loans of each Bank. Failure to
make any such recordation, or any error in such recordation shall not
affect the Borrowers' obligations in respect of such Loans. With re-
spect to any Bank, the transfer of the Commitments of such Bank and
the rights to the principal of, and interest on, any 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 Loans and
prior to such recordation all amounts owing to the transferor with
respect to such Commitments and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part
of any Commitments and 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 Loan, or as soon thereafter as practicable, the assigning
or transferor Bank shall surrender the Note evidencing such Loan, and
thereupon one or more new Notes in the same aggregate principal amount
shall be issued to the assigning or transferor Bank and/or the new
Bank. 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 wilful misconduct of the Administrative Agent.
13.18 Addition of New Banks; Termination of Commitments of
Non-Continuing Banks; etc. (a) On and as of the occurrence of the
Third Restatement Effective Date in accordance with Section 13.10,
each New Bank shall become a "Bank" under, and for all purposes of,
this Agreement and the other Credit Documents.
(b) The parties hereto acknowledge that each Existing Bank has
been offered the opportunity to participate in this Agreement, after
the occurrence of the Third Restatement Effective Date, as a
Continuing Bank hereunder, but that no Existing Bank is obligated to
be a Continuing Bank. By their execution and delivery hereof, the
Borrower and the Required Banks (determined immediately before the
occurrence of the Third Restatement Effective Date) consent to the
voluntary repayment by the Borrower of all outstanding Existing Loans
and other Obligations owing to each Existing Bank which has not
elected to become a Continuing Bank (each such Bank, a "Non-Continuing
Bank") and to the voluntary termination by the Borrower of the
Revolving Loan Commitment (under, and as defined in, the Existing
Credit Agreement) of each Non-Continuing Bank, in each case to be
effective on, and contemporaneously with the occurrence of, the Third
Restatement Effective Date, in each case in accordance with the provi-
sions of Section 13.18(c).
(c) Notwithstanding anything to the contrary contained in the
Existing Credit Agreement or any Credit Document, the Borrower and
each of the Banks hereby agrees that on the Third Restatement
Effective Date, (i) each Bank with a Commitment as set forth on
Schedule I (after giving effect to the Third Restatement Effective
Date) shall make that principal amount of Term Loans and/or Revolving
Loans to the Borrower as is required by Section 1.01, and (ii) in the
case of each Non-Continuing Bank, all of such Non-Continuing Bank's
Existing Loans outstanding on the Third Restatement Effective Date
shall be repaid in full on such date, together with interest thereon
and all accrued Fees (and any other amounts) owing to such Non-
Continuing Bank, and the Revolving Loan Commitment (under, and as
defined in, the Existing Credit Agreement) of such Non-Continuing
Bank, if any, shall be terminated, effective upon the occurrence of
the Third Restatement Effective Date. Notwithstanding anything to the
contrary contained in the Existing Credit Agreement, this Agreement or
any other Credit Document, the parties hereto hereby consent to the
repayments and reductions required above, and agree that in the event
that any Existing Bank shall fail to execute a counterpart of this
Agreement prior to the occurrence of the Third Restatement Effective
Date, such Existing Bank shall be deemed to be a Non-Continuing Bank
and, concurrently with the occurrence of the Third Restatement
Effective Date, the Revolving Loan Commitment (under, and as defined
in, the Existing Credit Agreement) of such Existing Bank, if any,
shall be terminated, all Existing Loans of such Existing Bank out-
standing on the Third Restatement Effective Date shall be repaid in
full, together with interest thereon and all accrued Fees (and any
other amounts) owing to such Existing Bank, and concurrently with the
occurrence of the Third Restatement Effective Date, such Existing Bank
shall no longer constitute a "Bank" under this Agreement and the other
Credit Documents, provided that all indemnities of the Credit Parties
under the Existing Credit Agreement and the other Credit Documents (as
in effect prior to the Third Restatement Effective Date) for the
benefit of such Existing Bank shall survive in accordance with the
terms thereof.
13.19 Post Closing Actions. Notwithstanding anything to the
contrary contained in this Agreement or the other Credit Documents,
the parties hereto acknowledge and agree that:
(a) Corporate Documents. The Borrowers will deliver, or cause
to be delivered, (i) within thirty (30) Business Days after the Third
Restatement Effective Date, a certified copy of the Certificate of
Incorporation of each of Lane, Lane Advertising, Inc. and Action and
(ii) within sixty (60) Business Days after the Third Restatement
Effective Date, a good standing certificate issued by the Secretary of
State of Tennessee in respect of ▇▇▇▇▇▇'▇, Inc.;
(b) Insurance Certificates. The Borrowers will deliver, or
cause to be delivered, within thirty (30) Business Days after the
Third Restatement Effective Date, evidence of insurance complying with
the requirements of Section 8.03 for the business and properties of
Furniture Brands and its Restricted Subsidiaries, in scope, form and
substance reasonably satisfactory to the Agents and naming the
Collateral Agent as an additional insured and/or loss payee, and
stating that such insurance shall not be cancelled or revised without
30 days' prior written notice by the insurer to the Administrative
Agent;
(c) Title Endorsements. The Borrowers will deliver, or cause
to be delivered, within thirty (30) Business Days after the Third
Restatement Effective Date, endorsements reasonably satisfactory to
the Collateral Agent to each Existing Mortgage Policy assuring the
Collateral Agent that each Existing Mortgage is a valid and
enforceable first priority mortgage lien on the respective Existing
Mortgaged Properties, free and clear of all defects and encumbrances
except Permitted Encumbrances; and
(d) Confirmatory UCC Searches. The Borrowers will deliver,
or cause to be delivered, within thirty (30) Business Days after the
Third Restatement Effective Date, certified copies of Requests for
Information or Copies (Form UCC-11), or equivalent reports, listing
all effective financing statements that name any Credit Party as
debtor and that are filed in the jurisdictions referred to in Section
5.09(a), together with copies of such other financing statements (none
of which shall cover the Collateral except to the extent evidencing
Permitted Liens or in respect of which the Collateral Agent shall have
received termination statements (Form UCC-3) or such other termination
statements as shall be required by local law) fully executed for
filing.
All conditions precedent and representations contained in this
Agreement and the other Credit Documents shall be deemed modified to
the extent necessary to effect the foregoing (and to permit the taking
of the actions described above within the time periods required above,
rather than as elsewhere provided in the Credit Documents); provided,
that (x) to the extent any representation and warranty would not be
true because the foregoing actions were not taken on the Third
Restatement Effective Date, the respective representation and warranty
shall be required to be true and correct in all material respects at
the time the respective action is taken (or was required to be taken)
in accordance with the foregoing provisions of Section 13.19 and (y)
all representations and warranties relating to the Security Documents
shall be required to be true immediately after the actions required to
be taken by Section 13.19 have been taken (or were required to be
taken). The acceptance of the benefits of each Credit Event shall
constitute a representation, warranty and covenant by the Borrowers to
each of the Banks that the actions required pursuant to this Section
13.19 will be taken within the relevant time periods referred to in
this Section 13.19 and that, at such time, all representations and
warranties contained in this Agreement and the other Credit Documents
shall then be true and correct without any modification pursuant to
this Section 13.19.
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.
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ BROYHILL FURNITURE INDUSTRIES, INC.
Tel: (▇▇▇) ▇▇▇-▇▇▇▇ THE LANE COMPANY, INCORPORATED
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ THOMASVILLE FURNITURE INDUSTRIES, INC.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President, Treasurer
and Chief Financial Officer
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
On behalf of each of the above
Borrowers
One Bankers Trust Plaza BANKERS TRUST COMPANY,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Individually and as
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Administrative Agent
Tel: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Title: Vice President
NATIONSBANK, N.A.,
Individually and as Syndication Agent
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
Title: Sr. Vice President
CREDIT LYONNAIS CHICAGO BRANCH,
Individually and as Documentation
Agent
By ▇▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------------
Title: Vice President
ALLIED IRISH BANK PLC,
acting through its
CAYMAN ISLAND BRANCH
By ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Vice President
BANK OF MONTREAL
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Title: Director
THE BANK OF NEW YORK
By ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
------------------------------------
Title: Vice President
THE BANK OF NOVA SCOTIA
By F.C.H. ▇▇▇▇▇
-----------------------------------
Title: Senior Manager Loan
Opeartions
BANK OF SCOTLAND
By ▇▇▇▇▇ ▇▇▇▇ Tat
-----------------------------------
Title: Vice President
THE BANK OF TOKYO - MITSUBISHI,
LIMITED
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Deputy General Manager
BANQUE PARIBAS
By ▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
Title: Vice President
By ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Title: Vice President
CAISSE NATIONALE DE CREDIT
AGRICOLE
By ▇▇▇▇▇ ▇▇▇▇▇, F.V.P.
----------------------------------
Title: Head of Corporate
Banking Chicago
▇▇▇▇▇ ▇▇▇▇ BANK
By ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇
----------------------------------
Title: SVP & GM
CIBC, INC
By ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------------
Title: Director
CITIBANK, N.A.
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
CITY NATIONAL BANK
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
FIRST AMERICAN NATIONAL BANK
By ▇▇▇▇▇▇▇ ▇. Brothers
----------------------------------
Title: Vice President
FIRST UNION NATIONAL BANK
(F/K/A FIRST UNION NATIONAL BANK OF
NORTH CAROLINA)
By ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Title: Sr. Vice President
THE FUJI BANK LIMITED
By ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: Joint General Manager
THE INDUSTRIAL BANK OF JAPAN,
LIMITED
By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Joint General Manager
KZH-ING-I CORPORATION
By ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
Title:
THE LONG TERM CREDIT BANK OF
JAPAN, LTD
By ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-----------------------------------
Title: Senior Vice President
and Joint General Manager
MERCANTILE BANK NATIONAL
ASSOCIATION
By ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Vice President
▇▇▇▇▇▇▇ ▇▇▇▇▇ SENIOR FLOATING
RATE FUND, INC.
By ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Authorized Signatory
DEBT STATEGIES FUND, INC.
By ▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Authorized Signatory
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------------
Title: Chief Manager
OCTAGON CREDIT INVESTORS LOAN
PORTFOLIO (a unit of The Chase
Manhattan Bank)
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Title: Managing Director
THE SANWA BANK, LTD.,
CHICAGO BRANCH
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------
Title: First Vice President and
Assistant General Manager
THE SUMITOMO BANK, LIMITED,
CHICAGO BRANCH
By ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
Title: Senior Vice President
UNITED STATES NATIONAL BANK
OF OREGON
By ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
▇▇▇ ▇▇▇▇▇▇ AMERICAN CAPITAL
PRIME RATE INCOME TRUST
By ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: Vice President
THE YASUDA TRUST AND BANKING
CO., LTD., CHICAGO BRANCH
By ▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
Title: Deputy General Manager