EXHIBIT 10.3
THIS SUPPLEMENTAL INDENTURE No. 3 (the "Supplemental Indenture")
dated as of November 4, 1999 among Xxxxx, Inc., a Delaware corporation
("Knoll"), as the Company, Xxxxx Overseas, Inc., a Delaware corporation, and
Spinneybeck Enterprises, Inc., a New York corporation, as Guarantors (the
"Guarantors"), and The Bank of New York (as successor to IBJ Whitehall Bank &
Trust Company (successor to IBJ Xxxxxxxx Bank & Trust Company)), as Trustee.
W I T N E S S E T H:
WHEREAS, there has previously been executed and delivered to the
Trustee an Indenture (the "Indenture") dated as of February 29, 1996 among
T.K.G. Acquisition Sub, Inc., a Delaware corporation ("Sub"), as the Company,
T.K.G. Acquisition Corp., a Delaware corporation ("TKG"), the Guarantors, The
Knoll Group, Inc., a Delaware corporation, and Knoll North America, Inc., a
Delaware corporation, as guarantors, and the Trustee, providing for the
issuance of 10 7/8% Senior Subordinated Notes due 2006 (the "Notes");
WHEREAS, there has previously been executed and delivered to the
Trustee Supplemental Indenture No. 1 dated as of February 29, 1996 among TKG,
Xxxxx, Inc., a Delaware corporation ("Old Knoll"), the Guarantors and the
Trustee pursuant to which Old Knoll succeeded Sub as the Company;
WHEREAS, there has previously been executed and delivered to the
Trustee Supplemental Indenture No. 2 dated as of March 14, 1997 among Knoll
(formerly TKG), Old Knoll, the Guarantors and the Trustee pursuant to which
Knoll succeeded Old Knoll as the Company;
WHEREAS, Knoll has entered into an Amended and Restated Agreement
and Plan of Merger, dated as of July 29, 1999, pursuant to which Xxxxx'x
controlling stockholders and certain members of management will take Knoll
private in a transaction (the "Merger") in which Knoll will be the surviving
corporation;
WHEREAS, in order to effect the Merger and related transactions,
Knoll has commenced a solicitation of consents from the registered holders
(the "Holders") of the Notes to certain amendments to the Indenture, the
particulars of which are more fully set forth herein (the "Amendments");
WHEREAS, the Holders of a majority in aggregate principal amount of
the outstanding Notes have consented to the Amendments in accordance with the
provisions of Section 902 of the Indenture; and
WHEREAS, The Bank of New York has succeeded IBJ Whitehall Bank &
Trust Company (successor to IBJ Xxxxxxxx Bank & Trust Company)), as Trustee.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual premises and covenants contained herein and for other good and valuable
consideration, the parties hereto agree, for the equal and proportionate
benefit of the respective Holders from time to time of the Notes, as follows:
ARTICLE ONE
AMENDMENT OF THE INDENTURE
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SECTION 1.01. Amendment of Section 1.01.
Section 1.01 of the Indenture is hereby amended as follows:
(a) The following definition is hereby amended and restated:
"Credit Facilities" means (a) prior to consummation of the
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1999 Merger, the Revolving Credit Facility and the Term Credit
Facility, and (b) from and after consummation of the 1999 Merger,
the credit facilities of the Company pursuant to that certain
Credit Agreement dated as of October 20, 1999 (the "Credit
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Agreement") among the Company, the other Credit Parties party
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thereto, the Lenders party thereto, Bank of America, N.A., as
Administrative Agent, The Chase Manhattan Bank, as Syndication
Agent, and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, as Documentation Agent, in each case of
clauses (a) and (b) above, including any related notes, guarantees,
collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified,
renewed, refunded, replaced, restated or refinanced from time to
time. A copy of the Credit Agreement as in effect on the 1999
Merger Date is attached to this Supplemental Indenture as
Exhibit A hereto.
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(b) The following definitions are hereby added in appropriate
alphabetical order:
"Funded Indebtedness" shall have the meaning ascribed to
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"Funded Debt" thereto in the Credit Agreement, except that the
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proviso at the end of such definition shall be ignored for the
purposes of the Indenture.
"1999 Merger" means the merger, effective as of the date of
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this Supplemental Indenture, of the Company and Knoll Acquisition
Corp., a Delaware corporation, in which the Company is the
surviving corporation.
"1999 Merger Date" means the date the 1999 Merger is
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consummated.
"Leverage Ratio" shall have the meaning ascribed thereto in
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the Credit Agreement.
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(c) The following clause (h) is hereby added to the end of
the definition of Exempt Affiliate Transactions:
"and (h) transactions pursuant to or in connection with the
1999 Merger, including any stockholders or registration rights
agreements, and including amendments thereto entered into after the
1999 Merger Date, provided that the terms of any such amendment are
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not, in the aggregate, less favorable to the Company than the terms
of such agreement prior to such amendment."
(d) Clause (i) of the definition of Permitted Indebtedness is
hereby amended and restated to read as follows:
"(i) Indebtedness of the Company under the Credit Facilities
(and of the Domestic Subsidiaries under the Guarantees thereof), or
any refinancing thereof, in an aggregate principal amount at any
time outstanding (with letters of credit being deemed to have a
principal amount equal to the maximum potential liability of the
Company and its Subsidiaries thereunder) not to exceed $675 million,
less the aggregate amount of all Net Proceeds of Asset Sales
applied, after the 1999 Merger Date, to permanently reduce the
outstanding amount or the commitments with respect to such
Indebtedness pursuant to Section 4.08 hereof;"
SECTION 1.02. Amendment of Section 4.10.
(a) The following is hereby added to the end of clause (i)
of the first paragraph of Section 4.10 of the Indenture: "and other than
payments to stockholders of the Company in connection with the 1999 Merger;"
(b) Clause (c) following the first paragraph of Section 4.10
of the Indenture is hereby amended and restated to read as follows:
"(c) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such
Restricted Payment were made at the end of the applicable
four-quarter period, have a Leverage Ratio, at the end of the
Company's most recently ended fiscal quarter for which internal
financial statements are available, of less than 2.5 to 1;"
(c) Clause (vi) of the penultimate paragraph of Section 4.10
of the Indenture is hereby amended and restated to read as follows:
"(vi) any payment by the Company or any of its
Subsidiaries directly or through any direct or indirect parent
company (a) in connection with the repurchase of outstanding
shares of Capital Stock of the Company or TKG following the
death, disability, termination of employment or retirement
(even if such employee is retained in a consulting capacity) of
Management Shareholders and (b) of amounts required to be paid
to participants or former
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participants in employee benefit plans upon any termination of
employment by such participants as provided in the documents
related thereto, in an aggregate amount (for both clauses (a)
and (b)) not to exceed $15 million in any fiscal year (up to a
maximum of $30 million) from and after the 1999 Merger Date;"
(d) The following clauses (xi) and (xii) are hereby added
following clause (x) of the penultimate paragraph of Section 4.10 of the
Indenture:
"and (xi) Restricted Payments made prior to the 1999
Merger Date in compliance with the Indenture as in effect at
the time of any such Restricted Payment;
and (xii) the making of Restricted Payments after
the 1999 Merger Date in an aggregate amount not to exceed
$20 million;"
(e) The following new paragraph is hereby added at the end
of Section 4.10 of the Indenture, as follows:
"The computation of the amount of Restricted Payments
that may be made by the Company after the 1999 Merger Date
shall be conducted in accordance with, and shall be subject to,
the terms and conditions of this Indenture as amended on the
1999 Merger Date, and it is understood and agreed that any
accrued availability to make Restricted Payments under this
Indenture prior to the date hereof is not available to the
Company or its Subsidiaries after the 1999 Merger Date unless
and except to the extent that such Restricted Payments are
allowed and availability exists under this Indenture as amended
on the 1999 Merger Date."
SECTION 1.03. Amendment of Section 5.01.
Section 5.01 of the Indenture is hereby amended by adding the
following sentence at the end of Section 5.01 of the Indenture: "The 1999
Merger need not comply with the provisions of this Section 5.01."
SECTION 1.04. Attachment of Exhibit.
The Indenture is hereby amended by attaching, as Exhibit L
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thereto, the text of Exhibit A of this Supplemental Indenture.
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ARTICLE TWO
MISCELLANEOUS
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SECTION 2.01. Effect. The provisions set forth in this Supplemental
Indenture shall be deemed to be, and shall be construed as part of, the
Indenture to the same extent as if set forth fully therein. All references
to the Indenture in the Indenture or in any other agreement, document or
instrument delivered in connection therewith or pursuant thereto shall be
deemed
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to refer to the Indenture as amended by this Supplemental Indenture. Except
as amended hereby, the Indenture shall remain in full force and effect.
SECTION 2.02. Trust Indenture Act Controls. If any provision of this
Supplemental Indenture limits, qualifies or conflicts with another provision
that is required by or deemed to be included in this Supplemental Indenture
by the Trust Indenture Act (as such term is defined in the Indenture), the
required or incorporated provision shall control.
SECTION 2.03. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
SECTION 2.04. Counterparts. This Supplemental Indenture may be
executed in any number of counterparts, each of which shall be original, but
such counterparts shall together constitute but one and the same instrument.
SECTION 2.05. Severability. In case any provision in this Supplemental
Indenture shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 2.06. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the day and year first above written.
XXXXX, INC.
By /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
XXXXX OVERSEAS, INC.
By /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
SPINNEYBECK ENTERPRISES, INC.
By /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
THE BANK OF NEW YORK (successor to
IBJ WHITEHALL BANK & TRUST
COMPANY (successor to IBJ XXXXXXXX
BANK & TRUST COMPANY)), as Trustee
By /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Vice President
EXHIBIT A
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CREDIT AGREEMENT
(See Exhibit 10.2 of this Form 10-Q for the period ended September 30,1999.)
