SIXTH AMENDMENT AND WAIVER, dated as of November 7, 1995 (the "Amendment and
Waiver"), to the Credit Agreement, dated as of November 27, 1991 (as heretofore
amended, supplemented or otherwise modified, the "Credit Agreement"; capitalized
terms used but not defined herein shall have the respective meanings set forth
in the Credit Agreement), among Color Tile, Inc., a Delaware corporation (the
"Company"), the financial institutions party thereto (collectively, the "Banks")
and Chemical Bank, as agent for the Banks (in such capacity, the "Agent").
W I T N E S S E T H :
WHEREAS, pursuant to a Fifth Amendment, dated as of September 19, 1995, to
the Credit Agreement, the Agent and the Banks consented to certain waivers and
amendments requested by the Company;
WHEREAS, the Company has again requested that the Agent and the Banks
consent to waive and amend certain provisions of the Credit Agreement; and
WHEREAS, the Agent and the Banks are willing to consent to the requested
waivers and amendments, but only on the terms and subject to the conditions
contained herein;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agrees
as follows:
I. WAIVERS.
1. Waiver of Subsections 8.1 and 8.2. The Banks hereby waive compliance by
the Company with subsections 8.1 and 8.2 of the Credit Agreement with respect to
the Company's failure to timely deliver the financial and other information and
related certificates required to be delivered on or before October 30, 1995 (for
the period ended on September 30, 1995), provided that such non-compliance is
cured on or before November 14, 1995.
2. Waiver of Subsection 9.8. The Banks hereby waive compliance by the
Company with subsection 9.8 of the Credit Agreement with respect to Fifth
Amendment Consolidated Net Worth for the third and fourth fiscal quarters of
1995 and the first fiscal quarter of 1996.
3. Waiver of Subsection 9.9. The Banks hereby waive compliance by the
Company with subsection 9.9 of the Credit Agreement with respect to Fifth
Amendment Consolidated Adjusted Operating Profit as of the end of the third and
fourth fiscal quarters of 1995 and the first fiscal quarter of 1996, provided
that the waiver with respect to the first fiscal quarter of 1996 is subject
to the requirement that Fifth Amendment Consolidated Adjusted Operating Profit
for the single fiscal quarter ending on such date shall be greater than zero.
4. Waiver of Subsection 9.10. The Banks hereby waive compliance by the
Company with subsection 9.10 of the Credit Agreement with respect to Fifth
Amendment Interest Coverage Ratio as of the end of the third and fourth fiscal
quarters of 1995 and the first fiscal quarter of 1996.
5. Waiver of Section 10. The Banks hereby waive the occurrence and
continuance of an Event of Default under paragraph (e) of Section 10 of the
Credit Agreement by reason of any failure by the Company to pay interest due on
December 15, 1995 under the Indenture, dated as of December 15, 1993, made by
the Company in favor of U.S. Trust Company of Texas, N.A., as trustee (as in
effect on the date hereof, the "Indenture"); or any failure by the Company to
pay interest due on December 31, 1995 or March 31, 1996 under the Promissory
Note, dated September 28, 1995, made by the Company in favor of Chemical Bank;
including any such Event of Default which occurs and continues because any such
failure to pay interest under the Indenture or such Promissory Note constitutes
a default under any other Indebtedness or Contingent Obligation.
II. AMENDMENTS.
1. Conversion of Eurodollar Loans. Notwithstanding anything to the contrary
contained in the Credit Agreement, including without limitation, subsection 5.2,
from and after the Effective Date (as defined in Article III below), (a) each
outstanding Eurodollar Loan shall, at the end of the then-current Interest
Period, convert automatically and without need for compliance with the
conditions for conversion set forth in subsection 5.2 of the Credit Agreement to
an MHTC Rate Loan and (b) subject to the conversion set forth in (a) above, all
Loans shall be MHTC Rate Loans.
2. New Loans and Letters of Credit. Notwithstanding anything to the
contrary contained in the Credit Agreement, including without limitation,
Section 4, the aggregate amount outstanding at any one time during the period
from November 6, 1995 through and including November 17, 1995 of all new
Revolving Credit Loans (exclusive of any conversion of any Eurodollar Loan to an
MHTC Rate Loan), new Swing Line Loans and the face amount of any new Letters of
Credit shall not exceed $5,000,000.
3. Interest Deferral. Notwithstanding anything to the contrary contained in
the Credit Agreement, including without limitation, subsection 5.5, the Company
shall, subject to the terms set forth in this Section 3, be permitted to defer
the payment of interest on the Loans otherwise scheduled to be made on the March
31, 1996 Interest Payment Date if (a) the Company fails to make the interest
payment due under the Indenture on December 15, 1995 and such failure is
continuing on March 31, 1996, and (b) the sum of the balance of funds on deposit
in the
Company's bank accounts, including its concentration account maintained
with Chemical Bank, plus the Available Revolving Credit Commitment
(collectively, the "Available Cash"), on March 31, 1996 would be less than
$5,000,000 after giving effect to the payment of interest otherwise scheduled to
be paid on such date. The Company represents, warrants and covenants that it
shall continue to maintain and utilize its concentration account at Chemical
Bank in accordance with its past practices. Notwithstanding any such deferral of
interest, the Company shall be required to make a partial interest payment on
the March 31, 1996 Interest Payment Date in an amount equal to the amount, if
any, by which the Available Cash on such date exceeds $5,000,000. Any interest
deferred pursuant to this Section 3 shall accrue interest at the non-default
rate and such deferred interest (and interest accrued thereon) shall be due and
payable on June 30, 1996 (or any such earlier date on which the Company pays the
interest due on December 15, 1995 under the Indenture), provided that on Friday
of each calendar week, commencing with the first such day to occur after March
31, 1996, the Company shall deliver to the Agent a certificate setting forth the
calculation of Available Cash as of such day, and the Company shall make a
payment on such day on account of such deferred interest (and interest accrued
thereon) in the amount, if any, by which Available Cash on such day exceeds
$5,000,000.
4. Amendment to Section 6. Subsection 6.2 of the Credit Agreement is hereby
amended by deleting said subsection in its entirety and by substituting therefor
the following:
"6.2 No Change. Since November 7, 1995, other than any non-cash charges or
reserves taken by the Company on or before December 31, 1995, there has been no
change, and no development or event involving a prospective change, which has
had or could reasonably be expected to have a material adverse effect on the
business, assets, condition (financial or otherwise) or results of operations of
the Company and its Subsidiaries taken as a whole."
III. MISCELLANEOUS.
1. Conditions to Effectiveness. This Amendment and Waiver shall become
effective (the "Effective Date") as of the date first above written upon receipt
by the Agent of (a) an original executed copy of this Amendment and Waiver duly
executed and delivered by a duly authorized officer of the Company, the Agent
and each Bank and (b) a consent duly executed and delivered by a duly authorized
officer of Holdings and each Subsidiary party to the Subsidiary Guarantee,
pursuant to which Holdings and each such Subsidiary shall have consented to this
Amendment and Waiver and reaffirmed its obligations under the Guarantee executed
by it.
2. Limited Effect; No Default. The waivers and amendments contained herein
shall be limited precisely as drafted and shall not constitute a waiver or
amendment of any other terms of the Credit Agreement or otherwise constitute a
waiver by the
Banks of any of their rights under applicable law with respect to the facts
or events giving rise to any "Default" or "Event of Default" waived herein, and
the provisions of the Credit Agreement, the Notes and the other Credit Documents
are and shall remain in full force and effect in accordance with their
respective terms. The Company hereby represents and warrants to the Agent and
each Bank that, after giving effect to this Amendment and Waiver, (a) each of
the representations and warranties made by the Company, Holdings and the
Company's Subsidiaries set forth in the Credit Agreement and the other Credit
Documents shall be true and correct in all material respects on and as of the
Effective Date as if 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), and (b)
no Default or Event of Default shall have occurred and be continuing.
3. Costs and Expenses. The Company hereby agrees to pay on demand all costs
and expenses incurred in connection with the preparation, execution and delivery
of this Amendment and Waiver, including without limitation, the attorney's fees
and expenses incurred with respect thereto by Agent's counsel and counsel to
each Bank, including Bank group counsel.
4. Affirmation of Guarantees. Each of Holdings and each Subsidiary party to
the Subsidiaries Guarantee hereby consents to the execution and delivery of this
Amendment and Waiver and reaffirms its obligations under the Guarantee executed
by such Person.
5. Counterparts. This Amendment and Waiver may be executed by the parties
hereto on any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. This
Amendment and Waiver may be delivered by facsimile transmission of the relevant
signature pages hereof.
6. GOVERNING LAW. THIS AMENDMENT AND WAIVER SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned have caused this Amendment and Waiver
to be executed and delivered by their duly authorized officers as of the date
first above written.
COLOR TILE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title: Chief Executive Officer and President
CHEMICAL BANK, as Agent and as a Bank
By: /s/ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
THE BANK OF TOKYO TRUST COMPANY
By: /s/ ▇▇▇▇▇▇ Bulzaccehello
Title: Vice President
BANQUE FRANCAISE DU COMMERCE EXTERIEUR
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Vice President and Regional Manager
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Title: First Vice President
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
CREDIT LYONNAIS NEW YORK BRANCH
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
FIRST SOURCE FINANCIAL LLP
By First Source Financial, Inc.,
its agent and manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
SOCIETE GENERALE
By: /s/ Philippe ▇▇▇▇▇
Title: First Vice President
BANQUE PARIBAS
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Senior Vice President
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇
& ▇▇▇▇▇, INC.
By: /s/
Title:
UBS MORTGAGE FINANCE, INC.
By: /s/
Title:
NATIONSBANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
PILGRIM PRIME RATE TRUST
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Assistant Portfolio Manager
PROSPECT STREET SENIOR PORTFOLIO, L.P.
By: Prospect Street Senior Loan Corp.,
as Managing General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Jr.
Title: Vice President
VAN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ PRIME RATE
INCOME TRUST
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
FIRST INTERSTATE BANK OF TEXAS, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
THE DAIWA BANK LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇
Title: Vice President and Manager
By: /s/
Title: Vice President
Each of the following guarantors hereby confirms that it has duly executed
and delivered a Guarantee, consents to the execution and delivery of the
foregoing Amendment and Waiver and reaffirms its obligations under the Guarantee
executed by it.
COLOR TILE HOLDINGS, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title:Chief Executive Officer and
President
COLOR TILE FRANCHISING, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title:Chief Executive Officer and
President
COLOR TILE MANUFACTURING, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title:Chief Executive Officer and
President
C. TILE TRANSPORTATION, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title:Chief Executive Officer and
President
AMERICAN BLIND AND WALLPAPER
FACTORY, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
Title:Chief Executive Officer