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EXHIBIT 10.1
[EXECUTION COPY]
AMENDMENT NO. 7 and CONSENT
to
LOAN AND SECURITY AGREEMENT
dated as of July 12, 1996
THIS AMENDMENT NO. 7 AND CONSENT dated as of August 28, 1998 (this
"Amendment") is made by XXXX FURNITURE, INC., a North Carolina corporation,
AMERICAN FURNITURE COMPANY, INCORPORATED, a Virginia corporation, XXXXXXX
FURNITURE CO., a Mississippi corporation, XXXXXXX-XXXXXX COMPANY, INC., a North
Carolina corporation, XXXX CONTRACT SALES CORPORATION, a North Carolina
corporation, XXXX INTERNATIONAL SALES CORP., a Barbados corporation, XXXX
TRANSPORTATION, INC., a North Carolina corporation, PENNSYLVANIA HOUSE, INC., a
North Carolina corporation, XXXXXXX FURNITURE, INC., a North Carolina
corporation (the "Borrowers"), NATIONSBANK, N.A., a national banking association
("NationsBank"), FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Fleet",
and together with NationsBank, the "Co-Agents"), the financial institutions
parties to the Loan Agreement (as hereinafter defined) from time to time (the
"Lenders"), and NATIONSBANK as administrative agent for the Lenders (the
"Administrative Agent").
Preliminary Statements
The Borrowers, the Lenders, the Co-Agents and the Administrative Agent
are parties to a Loan and Security Agreement dated as of July 12, 1996, as
amended by Amendment No. 1 dated as of August 15, 1996, Amendment No. 2 dated as
of October 10, 1996, Amendment No. 3 dated as of December 23, 1996, Amendment
No. 4 dated as of July 24, 1997, Amendment No. 5 dated as of October 1, 1997 and
Amendment No. 6 dated as of May 15, 1998 (said Agreement, as so amended, the
"Loan Agreement"; terms defined therein and not otherwise defined herein being
used herein as therein defined).
The Borrowers have requested, and the Lenders and the Administrative
Agent have agreed, upon and subject to all of the terms, conditions and
provisions of this Amendment, to consent to (i) the merger of Xxxxxxx with and
into Xxxxxxx-Xxxxxx, with Xxxxxxx-Xxxxxx as the surviving entity (the "Merger")
and (ii) the $5,000,000 industrial development authority bond financing to be
entered into between American and the Industrial Development Authority of Xxxxx,
County Virginia (the "Chilhowie IRBs") for the purpose of financing building
renovations and the purchase of equipment for American's Chilhowie, Virginia
facility, and to modify certain provisions of the Loan Agreement as hereinafter
set forth in order to accommodate said merger and bond transaction.
Accordingly, in consideration of the Loan Agreement, the Loans made by
the Lenders and outstanding thereunder, the mutual promises hereinafter set
forth and other good and
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valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
Section 1. Amendments to Loan Agreement. The Loan Agreement is hereby
amended, subject to the provisions of Section 3 hereof, by
(a) amending Section 1.1 Definitions by
(i) amending the definition "Xxxxxxx" in its entirety to read as
follows:
"Xxxxxxx" means Xxxxxxx-Xxxxxx.
(ii) amending the definition "Borrower" by deleting therefrom
"Xxxxxxx,"
(iii) amending the definition "Xxxxxxx-Xxxxxx" by inserting before the
period at the end thereof the phrase "and the surviving corporation of
the merger with Xxxxxxx Furniture Co., a Mississippi corporation," and
(iv) inserting the following definitions in the appropriate
alphabetical order to read in its entirety as follows:
"Chilhowie IRBs" means Industrial Revenue Bonds to be issued
by the Industrial Development Authority of Xxxxx County, Virginia in
the original principal amount of up to $5,000,000, pursuant to the
Chilhowie IRB Documents, in connection with the renovation of certain
facilities of American in Chilhowie, Xxxxx County, Virginia and the
purchase of the Chilhowie IRB Equipment. Repayment of the loan made to
American from the proceeds of the Chilhowie IRBs will be repayable over
not less than 10 years (except as provided in the Chilhowie IRB
Documents), will be guaranteed by XXXX, and will be secured by a letter
of credit issued by Wachovia Bank, N.A. and a Lien on the Chilhowie IRB
Equipment in favor of the issuer of the Chilhowie IRBs and/or the
issuer of the letter of credit.
"Chilhowie IRB Documents" means the loan agreement, trust
indenture, and any other agreement, document, certificate or instrument
to be delivered in connection with the issuance of the Chilhowie IRBs.
"Chilhowie IRB Equipment" means the Equipment acquired by
American with the proceeds of the Chilhowie IRBs and located at
American's premises in Xxxxx County, Virginia.
"Chilhowie IRB Transaction" means, collectively, the
transactions contemplated by the Chilhowie IRB Documents.
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(b) amending Section 12.2 Debt by amending clause (c) in its entirety
to read as follows:
(c) Permitted Purchase Money Debt and Capitalized Lease
Obligations incurred after the Agreement Date and Debt represented by
the Chilhowie IRBs, not to exceed $10,000,000 at any time outstanding,
(c) amending Section 12.9 Liens by inserting the phrase "and the Lien
on the Chilhowie IRB Equipment securing the Debt represented by the Chilhowie
IRBs and/or American's reimbursement obligations in respect of the Wachovia
Bank, N.A.-issued letter of credit securing the Chilhowie IRBs, as the case may
be," immediately before the period at the end thereof.
(d) deleting Schedules 7.1(a), 7.1(b), 7.1(c), 7.1(e), 7.1(f), 7.1(h),
7.1(i), 7.1(t), 7.1(u), 7.1(v), 7.1(w), 7.1(bb) and 7.1(dd) to the Loan
Agreement delivered by the Borrowers as of March 15, 1998, and substituting
therefor the Schedules attached hereto as Exhibit A.
Section 2. Consent. The Lenders hereby consent, subject to the
provisions of Section 3, (i) to the Merger and waive compliance and the effect
of non-compliance by the Borrowers with the provisions of Sections 12.4, 12.7
and 12.8 to the extent any thereof would be breached by consummation of the
Merger, (ii) to the Chilhowie IRB Transaction (as such term and other
capitalized terms used herein are defined in the Loan Agreement as amended by
this Amendment), and (iii) to the subordination of the Security Interest in the
Chilhowie IRB Equipment to the Lien of the holders of the Chilhowie IRBs (the
"IRB Holders") or to Wachovia Bank, N.A. ("Wachovia"), as issuer of the letter
of credit securing the Chilhowie IRBs, as the case may be, on the Chilhowie IRB
Equipment, on terms acceptable to the Administrative Agent in its reasonable
business judgment.
Section 3. Effectiveness of Amendment. This Amendment shall become
effective on the date (the "Amendment Effective Date") on which the
Administrative Agent shall have received the following, each in form and
substance acceptable to the Administrative Agent and in sufficient copies for
each Lender:
(a) this Amendment duly executed and delivered by each Borrower and
each Lender;
(b) a certificate of the Secretary of each Borrower having attached
thereto the articles or certificate of incorporation and bylaws of such Borrower
as in effect on the Amendment Effective Date (or containing the certification of
such Secretary that no amendment or modification of such articles or certificate
or bylaws has become effective since the last date on which such documents were
delivered to the Administrative Agent pursuant to the Loan Agreement), having
attached thereto a copy of the corporate action of Xxxxxxx-Xxxxxx and the other
relevant Borrowers authorizing the Merger, and to the further effect that the
incumbency
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certificate and corporate action delivered in connection with the occurrence of
the Effective Date remain in effect, unchanged, or certifying any changes
thereto;
(c) a certificate of the President or Executive Vice President of XXXX
and of the President or a Vice President of each other Borrower stating that, to
the best of his knowledge and based on an examination sufficient to enable him
to make an informed statement, after giving effect to this Amendment,
(i) all of the representations and warranties made or deemed
to be made under the Loan Agreement are true and correct in all
material respects as of the Amendment Effective Date, having attached
thereto any revised Schedules necessary to permit such certification,
including but not limited to Schedules 7.1(a), 7.1(b), 7.1(c), 7.1(e),
7.1(f), 7.1(h), 7.1(i), 7.1(t), 7.1(u), 7.1(v), 7.1(w), 7.1(bb) and
7.1(dd) to the Loan Agreement, and
(ii) no Default or Event of Default exists,
and such statements shall be true;
(d) such additional Financing Statements as are necessary or desirable
to maintain the Security Interest in compliance with the provision of Article 8
of the Loan Agreement, or as the Administrative Agent may request, duly executed
and delivered by the relevant Borrower(s), and evidence satisfactory to the
Administrative Agent that the said Financing Statements have been filed in each
jurisdiction where such filing may be necessary or appropriate; and
(e) such other documents, agreements, certificates or other instruments
in connection with this Amendment as the Administrative Agent may reasonably
request.
Section 4. Effect of Amendment. From and after the effectiveness of
this Amendment,
(a) Xxxxxxx Furniture Co., a Mississippi corporation, shall no longer
be a "Borrower." Each of the Borrowers expressly acknowledges, consistent with
the provisions of Sections 5.19, 5.20 and 5.21 of the Loan Agreement, that the
merger of Xxxxxxx with and into Xxxxxxx-Xxxxxx does not impair or otherwise
affect such Borrower's liability in respect of the Secured Obligations, and
(b) all references in the Loan Agreement and in any other Loan Document
to "this Agreement," "the Loan Agreement," "hereunder," "hereof" and words of
like import referring to the Loan Agreement, shall mean and be references to the
Loan Agreement as amended by this Amendment.
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Except as expressly amended hereby, the Loan Agreement and all terms, conditions
and provisions thereof remain in full force and effect and are hereby ratified
and confirmed. The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
Section 5. Representations, Warranties and Covenants.
(a) Representations and Warranties. The Borrowers each hereby represent
and warrant to the Lenders that each of the representations and warranties set
forth in the Loan Documents is true and correct in all material respects as of
the date hereof both before and after giving effect to this Amendment, and shall
survive the delivery of this Amendment.
(b) Covenants. The Borrowers each hereby covenant with the Lenders,
which covenant shall survive the delivery of this Amendment, that the Borrowers
shall deliver to the Administrative Agent:
(i) as soon as possible and in no event later than thirty days
after the Amendment Effective Date evidence satisfactory to the
Administrative Agent that (A) the Merger has been consummated in
accordance with the Agreement and Plan of Merger of Xxxxxxx Furniture
Co. and Xxxxxxx-Xxxxxx Company, Inc. dated July 23, 1998, furnished to
the Administrative Agent by XXXX, and (B) fee title to the Xxxxxxx and
Myrtle, Mississippi plants is held by a Borrower, that such Real Estate
continues to be subject to the Lien of the Mortgage affecting such Real
Estate and to no other Lien or exception to title that the
Administrative Agent has not approved in writing, with priority from
the original date of recording of the relevant Mortgage, which evidence
may include paid endorsements (or commitments to issue the same,
satisfactory to the Administrative Agent in its sole discretion) to the
existing policies of mortgagee title insurance in respect of such Real
Estate; and
(ii) evidence satisfactory to the Administrative Agent of the
consummation of the Chilhowie IRB Transaction within thirty days of
such consummation, including (A) certified executed copies of Chilhowie
IRB Documents (defined herein as defined in the Loan Agreement as
amended by this Amendment) and any other documents, agreements,
certificates or other instruments executed in connection with the
Chilhowie IRB Transaction, (B) a certificate of the President or
Executive Vice President of XXXX and of the President or a Vice
President of each other Borrower that each of the representations and
warranties set forth in the Loan Documents is true and correct in all
material respects and that no Default or Event of Default exists, in
each case as of the date of consummation of the Chilhowie IRB
Transaction, (C) a reliance letter entitling the Lenders to rely upon
the opinion of Xxxxxxxxxx Xxxxxxxx LLP delivered in connection
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with the Chilhowie IRB Transaction, and (D) such other documents,
agreements, certificates or other instruments as the Administrative
Agent may reasonably request.
(c) Year 2000 Compliance. The Borrowers each hereby (i) represent and
warrant to the Lenders, which representations and warranties shall survive the
delivery of this Amendment, that such Borrower has (A) initiated a review and
assessment of all areas within its and each of its Subsidiaries' business and
operations (including those affected by suppliers, vendors and customers) that
could be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by the Borrowers or any of their Subsidiaries (or
suppliers, vendors and customers) may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999), (B) developed a plan and timeline for addressing the
Year 2000 Problem on a timely basis, and (C) to date, implemented that plan in
accordance with that timetable, and (ii) covenanted with the Lenders, which
covenant shall survive the delivery of this Amendment, that XXXX will promptly
notify the Administrative Agent in the event XXXX discovers or determines that
any computer application (including those of its suppliers, vendors and
customers) that is material to its or any other Borrower's business and
operations, on a consolidated basis, will not be Year 2000 Compliant (as
hereinafter defined). Based on the foregoing, each Borrower believes that all
computer applications (including those of suppliers, vendors (other than the
Lenders) and customers) that are material to the business and operations of XXXX
and each other Borrower, on a consolidated basis, are reasonably expected on a
timely basis to be able to perform properly date-sensitive functions for all
dates before and after January 1, 2000 (that is, be "Year 2000 Compliant").
Section 6. Counterpart Execution; Governing Law.
(a) Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
(b) Governing Law. This Amendment shall be governed by and construed in
accordance with the laws of the State of Georgia.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWERS:
XXXX FURNITURE, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Executive Vice President
AMERICAN FURNITURE COMPANY, INCORPORATED
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXXXXX FURNITURE CO.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXXXXX-XXXXXX COMPANY, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXX CONTRACT SALES CORP.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
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PENNSYLVANIA HOUSE, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXXXXX FURNITURE, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXX TRANSPORTATION, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
President
XXXX INTERNATIONAL SALES CORP.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
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AGENTS/LENDERS:
NATIONSBANK, N.A., as Administrative Agent,
a Co-Agent and as a Lender
By:___________________________
Xxxxxx X. Xxxxxxxx, Xx.
Vice President
FLEET CAPITAL CORPORATION, as a Co-Agent
and as a Lender
By:___________________________
Name:
Title:
BANKAMERICA BUSINESS CREDIT, INC.,
as a Lender
By:___________________________
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT,
INC., as a Lender
By:___________________________
Name:
Title:
SANWA BUSINESS CREDIT CORPORATION,
as a Lender
By:___________________________
Name:
Title:
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BANKBOSTON, N.A., as a Lender
By:___________________________
Name:
Title:
CREDITANSTALT CORPORATE FINANCE,
INC., as a Lender
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
BRANCH BANKING AND TRUST COMPANY,
as a Lender
By:___________________________
Name:
Title:
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