EXHIBIT NO. 10.57
SEVENTH AMENDMENT AND CONSENT TO POSTPETITION
CREDIT AGREEMENT
THIS SEVENTH AMENDMENT AND CONSENT TO POSTPETITION CREDIT AGREEMENT,
dated as of September 4, 1998 (this "AMENDMENT"), is among XXXXXX FURNITURE
INCORPORATED, a Delaware corporation and a debtor and debtor in possession,
XXXXXX FURNITURE CORPORATION, a Florida corporation and a debtor and debtor in
possession ("LFC"), XXXXXX FURNITURE REALTY CORPORATION, a Florida corporation
and a debtor and debtor in possession, XXXXXX SHOPPING SERVICE, INC., a Florida
corporation and a debtor and debtor in possession, XXXXXX FURNITURE COMPANY OF
THE MIDWEST, INC., a Colorado corporation and a debtor and debtor in possession,
XXXXXX FURNITURE COMPANY OF THE PACIFIC, INC., a California corporation and a
debtor and debtor in possession, XXXXXX FURNITURE COMPANY OF WASHINGTON, INC., a
Washington corporation and a debtor and debtor in possession, XXXXXX FURNITURE
COMPANY OF THE MIDWEST REALTY, INC., a Colorado corporation and a debtor and
debtor in possession, XXXXXX FURNITURE COMPANY OF THE PACIFIC REALTY, INC., a
California corporation and a debtor and a debtor in possession, XXXXXX FURNITURE
COMPANY OF WASHINGTON REALTY, INC., a Washington corporation and debtor and a
debtor in possession, XXXX X. XXXXX COMPANY, an Illinois corporation and a
debtor and debtor in possession, and XXXX X. XXXXX REALTY COMPANY an Illinois
corporation and a debtor and debtor in possession (collectively, the
"BORROWERS"), each Revolving Lender and Term Lender signatories hereto
(collectively the "LENDERS"), and BT COMMERCIAL CORPORATION, a Delaware
corporation, acting in its capacity as agent for the Lenders (in such capacity,
together with its successors in such capacity, the "AGENT"). Capitalized terms
used in this Amendment and not otherwise defined have the meanings assigned such
terms in the Postpetition Credit Agreement dated as of September 5, 1997 (as
amended, restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among the Borrowers, the Lenders and the Agent.
PRELIMINARY STATEMENTS:
A. The Borrowers, the Lenders and the Agent are parties to the Credit
Agreement.
B. The Lenders have extended credit to the Borrowers under the Credit
Agreement by, among other things, the term loans (the "EXISTING TERM LOANS")
evidenced by the Term Note dated as of September 5, 1997, made by the Borrowers
in favor of the Term Lenders in the original principal amount of $36,356,250.
C. The Borrowers have requested that the Term Lenders and certain other
financial institutions (together with the Term Lenders, the "SECOND TERM
LENDERS") extend further credit by extending a new term loan (the "SECOND TERM
LOAN") to the Borrowers in the original principal amount of at least $20,000,000
and up to $30,000,000, to be evidenced by a promissory note (the "SECOND TERM
NOTE"), made by the Borrowers in favor of the Second Term Lenders, such
extension of credit to be secured by an interest in the Collateral PARI PASSU
and pro rata with the Existing Term Loans.
D. The Borrowers desire to establish a new private-label credit card
program as evidenced by the Merchant Agreement dated as of September 4, 1998
(the "HOUSEHOLD MERCHANT AGREEMENT"), among Household Bank (SB), N.A.
("HOUSEHOLD") and certain of the Borrowers. In connection with the establishment
of such a program, the Borrowers desire to terminate the GECC Account Purchase
Agreement pursuant to the terms a letter to be sent to GECC (the "LETTER").
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E. The Borrowers further desire to create a new wholly owned subsidiary
of LFC to be incorporated under the laws of the Turks and Caicos Islands
("NEWCO"), which subsidiary will provide reinsurance services for credit
insurance offered by the Borrowers to their customers in connection with the
private-label credit card program established with Household.
F. The Borrowers, the Lenders and the Agent have agreed to amend the
Credit Agreement to, among other things, (i) extend the Second Term Loan and
(ii) incorporate the Household Merchant Agreement, on the terms and subject to
the conditions of this Amendment.
G. The Borrowers have requested that the Lenders and the Agent consent
to (i) the extension of the Second Term Loan, (ii) the execution and delivery of
the Household Merchant Agreement and the Termination of the GECC Account
Purchase Agreement and (iii) the creation of Newco, on the terms and subject to
the conditions of this Amendment.
H. It is the intention of the Borrowers, the Lenders and the Agent that
this Amendment will become effective in whole or in part as provided in SECTION
5.
AGREEMENT:
In consideration of the premises and the mutual agreements contained in
this Amendment, the Borrowers, the Lenders and the Agent agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT (SECOND TERM LOAN).
On the date each of the conditions set forth in SECTION 5.1 is satisfied
by the Borrowers (the "SECOND TERM LOAN CLOSING DATE"), the Credit Agreement is
amended as follows:
1.1 The Credit Agreement is amended by adding Article 2B to the Credit
Agreement as follows:
ARTICLE 2B. SECOND TERM LOAN.
Subject to the terms and conditions set forth in this Credit
Agreement, and in reliance on the representations and warranties of the
Borrowers set forth herein, on September 4, 1998, the Second Term
Lenders agree to extend a term loan to the Borrowers in the original
principal amount of at least $20,000,000 and up to $30,000,000 (the
"SECOND TERM LOAN"). The Second Term Loan shall be evidenced by a Term
Note and shall be governed in all respects by the terms of this Credit
Agreement and the other Credit Documents.
1.2 Section 1.1 of the Credit Agreement is amended by deleting the
definition of "APPRAISED VALUE" in its entirety and replacing it as follows:
APPRAISED VALUE means (i) unless covered by an appraisal
described under clause (ii) below, with respect to the various parcels
of real property of the Borrowers for which a current appraisal dated
August 29, 1997 or later prepared by Ernst & Young L.L.P. has been
delivered to the Agent, the appraised liquidation value of each such
property as reflected in the applicable appraisal, (ii) with respect to
the Borrowers' leasehold interests in various parcels of real property
for which a current appraisal dated November 12, 1997, or later prepared
by Xxxxx & Xxxxx has been delivered to the Agent, the arithmetic mean of
the appraised liquidation value and the appraised fair market value of
each such property as reflected in the applicable appraisal, (iii) with
respect to any other leasehold interest of any Borrower in any real
property, the arithmetic mean of the appraised liquidation value and the
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appraised fair market value of such leasehold interest (assuming the
same to be freely assignable to the extent provided in section 365 of
the Bankruptcy Code), as determined by a nationally recognized real
estate appraisal firm retained by the Agent and reasonably acceptable to
the Majority Term Lenders for purposes of making such determination and
in an appraisal reasonably satisfactory to the Agent and the Majority
Term Lenders, as of the earlier of the date of the sale, transfer or
other disposition by any Borrower of such leasehold interest and any
date after the Closing Date used in any such appraisal and (iv) with
respect to any other fee interest of any Borrower in any real property,
the appraised liquidation value of such fee interest, as determined by a
nationally recognized real estate appraisal firm retained by the Agent
and reasonably acceptable to the Majority Term Lenders for purposes of
making such determination and in an appraisal reasonably satisfactory to
the Agent and the Majority Term Lenders, as of the earlier of the date
of the sale, transfer or other disposition by any Borrower of such fee
interest and any date after the Closing Date used in any such appraisal;
it being understood that, if any appraisal delivered to the Agent
pursuant to clause (i), (ii), (iii) or (iv) sets forth a range of values
for liquidation value or fair market value of the subject property, the
"appraised liquidation value" of such property shall be the arithmetic
mean of the high and low values of the liquidation value specified for
such property and the "appraised market value" of such property shall be
the arithmetic mean of the high and low values of the fair market value
specified for such property and if the appraisal sets forth a range of
values for the subject property, alone, the "Appraised Value" of such
property shall be the arithmetic mean of the high and low values
specified for such property, as determined by the Agent and (v) with
respect to any other fixed assets of any Borrower, (including without
limitation fixtures, furniture and equipment) the fair market value of
such assets as determined by the Agent in the exercise of its Permitted
Discretion.
1.3 Section 1.1 of the Credit Agreement is further amended by adding the
following sentence to the end of the definition of "EXPENSES" as follows:
EXPENSES also means all reasonable costs and expenses of the Majority
Term Lenders incurred in connection with the Credit Documents and the
respective transactions contemplated therein, including, without
limitation, (I) the costs of conducting record searches and examining
collateral, (II) the reasonable fees and expenses of legal counsel and
paralegals, accountants, appraisers and other consultants, experts or
advisors retained by the Majority Term Lenders, including, without
limitation, consultants, experts or advisors retained in connection with
due diligence investigations and (III) the costs of reviewing and
preparing waivers, amendments and consents.
1.4 Section 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
MAKE-WHOLE PREMIUM means, in connection with any payment of the
principal amount of all or any portion of the principal amount of the
Second Term Loan at any time prior to March 5, 1999, for any reason
(whether upon voluntary prepayment, mandatory prepayment, acceleration
or otherwise), an amount equal to the Present Value (as hereinafter
defined) of the difference in the interest that would have been payable
on each interest payment date on the amount of such principal being
prepaid (assuming each payment of interest on the Second Term Loan would
have been timely paid when due) and the interest that would be earned on
the prepaid amount at 7.00%. For purposes of this definition, PRESENT
VALUE shall be determined in accordance with generally accepted
financial practice in the United States of America at a discount rate
equal to 7.00% per annum applied on a monthly basis.
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1.5 Section 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
ORIGINAL TERM LENDERS means each financial institution identified
on ANNEX II as an "Original Term Lender".
1.6 Section 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
ORIGINAL TERM LOAN has the meaning set forth in Article 2A.
1.7 Section 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
SECOND TERM LENDERS means each financial institution identified
on ANNEX II as a "Second Term Lender."
1.8 Section 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
SECOND TERM LOAN has the meaning set forth in Article 2B.
1.9 Section 1.1 of the Credit Agreement is further amended by deleting
the definition of "TERM LENDER" in its entirety and replacing it as follows:
TERM LENDERS means the Original Term Lenders and the Second
Term Lenders.
1.10 Section 1.1 of the Credit Agreement is further amended by deleting
the definition of "TERM LOAN" in its entirety and replacing it as follows:
TERM LOAN means the Original Term Loan and the Second Term Loan.
1.11 Section 1.1 of the Credit Agreement is further amended by deleting
the definition of "TERM NOTE" in its entirety and replacing it as follows:
TERM NOTE means, collectively, each promissory note of the
Borrowers payable to the order of any Term Lender, including, without,
limitation, the promissory note evidencing the Second Term Loan,
substantially in the form of EXHIBIT C-2 as amended, restated,
supplemented or otherwise modified from time to time, and including all
notes issued in replacement of, or in substitution or exchange for, any
of the foregoing.
1.12 Article 2A of the Credit Agreement is amended by deleting such
article in its entirety and replacing it as follows:
ARTICLE 2A. ORIGINAL TERM LOAN.
On each Business Day that Collections are to be applied to repay
the principal of the Prepetition Tranche A Term Loan pursuant to the
Postpetition Collateral Agency Agreement, then, unless an Actionable
Default has occurred and is continuing, each Original Term Lender shall
be deemed to fund a term loan to the Borrowers in an amount equal to its
Proportionate Share of the amount of the Collections so to be applied
(all term loans made in such manner by each Original Term Lender herein
collectively called the "Original Term Loan"). The Original Term Loan of
each Original Term Lender shall be evidenced by a Term Note and shall be
governed in all respects by the terms of this Credit Agreement and the
other Credit Documents. All Collections that would otherwise be applied
to repay the principal of the Prepetition Tranche A Term Loan
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under the Postpetition Collateral Agency Agreement shall be remitted to
the LFC Funds Administrator for the account of the Borrowers in
accordance with the deemed funding of the Original Term Loan under this
Article 2A so long as no Actionable Default has occurred and is
continuing.
1.13 Section 4.7A of the Credit Agreement is amended by deleting such
section in its entirety and replacing it as follows:
4.7A NO PERMITTED PREPAYMENT OF TERM LOANS.
Until payment in full of all Postpetition Obligations in respect
of Revolving Loans and Letter of Credit Obligations and termination of
the Revolving Commitments pursuant to the terms and provisions hereof,
the Borrowers may not prepay the Term Loans at any time in whole or in
part. After payment in full of all Postpetition Obligations in respect
of Revolving Loans and Letter of Credit Obligations and termination of
the Revolving Commitments pursuant to the terms and provisions hereof,
the Borrowers may prepay the Term Loans at any time in whole or in part;
PROVIDED, that any such prepayment shall be applied on a pro rata basis
against the then outstanding balances of both the Original Term Loan and
the Second Term Loan and must include all of the interest (including
default rate interest, to the extent applicable) accrued on the
principal amount of the Term Loans so repaid through and including the
relevant date of repayment. Each time any principal amount of the Second
Term Loan is paid in whole or in part at any time prior to March 5,
1999, for any reason (whether by a voluntary prepayment, a mandatory
prepayment, upon acceleration or otherwise), the Borrowers shall pay the
Make-Whole Premium to the Second Term Lenders.
1.14 Article 8 of the Credit Agreement is amended by adding a new
Section 8.19 to such article as follows:
8.19 LEASEHOLD COVENANTS. No Borrower shall, or shall permit any
of its Subsidiaries to, directly or indirectly, fail to pay when due any
postpetition obligation relating to, or arising in connection with, its
leasehold interest in any real property, including, without limitation,
rent or other payments due under the lease for such real property, any
postpetition real estate taxes owing on such real property and payable
by the Borrowers or any insurance premiums due in connection with such
real property. Without obtaining the prior written consent of the Agent
and the Majority Term Lenders, no Borrower shall, or shall permit any of
its Subsidiaries to, directly or indirectly, (i) reject or apply to the
Bankruptcy Court to reject any executory contract or unexpired lease or
(ii) assume or apply to the Bankruptcy Court to assume any executory
contract or unexpired lease unless such assumption is pursuant to an
order of the Bankruptcy Court, acceptable to the Agent and the Majority
Term Lenders in their reasonable discretion, that specifically reserves
for the Borrowers the right to subsequently assign such executory
contract or unexpired lease under section 365(f) of the Bankruptcy Code
without, among other things, the consent of the relevant counterparties
to such executory contract or unexpired lease.
1.15 Section 9.2 of the Credit Agreement is amended by adding new
subsections (e) and (f) to such section as follows:
(E) OTHER REMEDIES. If any Event of Default shall have occurred
and be continuing, the Agent or the Majority Term Lenders may direct the
Borrowers how and when to exercise all rights of the Borrowers under
section 365 of the Bankruptcy Code and the Borrowers shall fully comply
with such directions; PROVIDED, that notwithstanding the foregoing, the
Majority Term Lenders may not exercise any of such rights until all
Postpetition Obligations owing to the Revolving Lenders have been
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indefeasibly paid in full and the Revolving Commitments have been
terminated. Without in any manner limiting any right or remedy of the
Agent or any Lender under any other section or provision of this Credit
Agreement or any order related to or entered in connection therewith,
and unless the Borrowers and the Committee agree otherwise, no such
direction shall require any Borrower to assign any unexpired lease or
executory contract earlier than the earlier of (i) the expiration of
sixty days from the date of such direction and (ii) five Business Days
prior to (a) the day upon which the relevant lease or contract may be
deemed to be rejected under section 365 of the Bankruptcy Code (whether
by expiration of any relevant time period for assumption or rejection or
otherwise), (b) the scheduled hearing date on which the relevant
executory contract or unexpired lease may be assumed or rejected or (c)
the earliest day on which, in the good faith judgement of the Agent or
the Majority Term Lenders, a default not subject to cure could occur
with respect to that lease or contract. Unless the Borrowers and the
Committee agree otherwise, any such assignment pursuant to a Lender
direction described above shall be to the highest and best bidder at a
public auction held before the Bankruptcy Court or as the Bankruptcy
Court shall otherise direct. Notwithstanding anything to the contrary
contained herein, if the Borrowers do not fully honor and take all
actions requested in any such direction within three Business Days of
the delivery of such direction, the Agent or the Majority Term Lenders
may, on five days' notice to the Borrowers, the Committee and any
landlord or other counterparty to the relevant lease or contract, move
the Bankruptcy Court on behalf of the Borrowers for the relief specified
in the direction and such notice shall be due and sufficient notice of
such request under the circumstances.
(F) Without in any manner limiting any right or remedy of the
Agent or any Lender under any other section or provision of this Credit
Agreement or any order related to or entered in connection therewith,
and notwithstanding that a Default or Event of Default may not have
occurred and be continuing, the Agent or the Majority Term Lenders may
direct, no earlier than fifteen days prior to the day that any of the
events set forth in clause (i), (ii) or (iii) below could occur, the
Borrowers how and when to exercise all rights of the Borrowers under
section 365 of the Bankruptcy Code (and the Borrowers shall fully comply
with such direction(s)) with respect to any lease or executory contract
that (i) may be rejected or deemed to be rejected under section 365 of
the Bankruptcy Code (whether by expiration of any relevant time period
for assumption or rejection or otherwise), (ii) may be assumed or
rejected at a scheduled hearing date or (iii) in the good faith judgment
of the Agent or the Majority Term Lenders, a default not subject to cure
could occur. Unless the Borrowers and the Committee agree otherwise, any
such assignment pursuant to a Lender direction described above shall be
to the highest and best bidder at a public auction held before the
Bankruptcy Court or as the Bankruptcy Court shall otherwise direct.
Notwithstanding anything to the contrary contained herein, if the
Borrowers do not fully honor and take all actions requested in any such
direction within three Business Days of the delivery of such direction,
the Agent or the Majority Term Lenders may, on three days' notice to the
Borrowers, the Committee any landlord or other counterparty to the
relevant lease or contract, move the Bankruptcy Court on behalf of the
Borrowers for the relief specified in the direction and such notice
shall be due and sufficient notice of such request under the
circumstances.
1.16 Section 9.2A of the Credit Agreement is amended by adding the
following sentence to the end of the such section as follows:
Upon the acceleration of the Term Loans under this SECTION 9.2A, the
Borrowers will be required to pay the Make-Whole Premium (in respect of
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any principal amount of the Second Term Loans paid for any reason prior
to March 5, 1999) to the Second Term Lenders.
1.17 Section 11.8(c) of the Credit Agreement is amended by deleting the
first sentence from such section in its entirety and replacing it as follows:
Each Term Lender may assign to one or more Persons all or a portion of
its rights and obligations under this Credit Agreement, the Term Notes
and the other Credit Documents, with the consent of the Agent and the
Borrowers, which consents shall not be unreasonably withheld or delayed
(PROVIDED, that no consents shall be required (i) if an Event of Default
has occurred and is continuing or (ii) if the assignment is to an
Affiliate of a Term Lender or a fund or investment entity managed by a
Term Lender or an Affiliate of a Term Lender); and upon execution and
delivery to the Agent, for its acceptance and recording in the Register,
of an agreement in substantially the form of EXHIBIT G-2 (a "TERM
ASSIGNMENT AND ASSUMPTION AGREEMENT"), together with surrender of any
Term Note or Term Notes subject to such assignment and a processing and
recordation fee of $2,500, such assignment shall be effective, the
Borrowers shall issue a replacement Term Note or Term Notes to such
Person or Persons who thereupon shall be a Term Lender or Term Lenders
for all purposes hereunder to the extent of the Term Note or Term Notes
so issued and ANNEX II hereto shall be deemed to be modified
accordingly.
1.18 Section 11.11(b) of the Credit Agreement is amended by deleting
clause (iii) from such section in its entirety and replacing it as follows:
(iii) ARTICLE 2A or 2B and SECTION 2.7, 4.1A, 4.5, 4.7(D), 4.7A, 4.9(B),
4.11, 6.19 (AND ANY SIMILAR REPRESENTATION MADE IN ANY AMENDMENT TO THIS
CREDIT AGREEMENT), 6.7, 7.14., 8.6, 8.17(C), 8.19, 9.2A, 9.2(B) OR
11.8(C) or (E), of this Credit Agreement and
1.19 Annex II of the Credit Agreement is amended by replacing such annex
with the ANNEX II attached to this Amendment as EXHIBIT A.
2. AMENDMENTS TO CREDIT AGREEMENT (HOUSEHOLD).
On the date each of the conditions set forth in SECTION 5.2 is satisfied by the
Borrowers (the "HOUSEHOLD CLOSING DATE"), the Credit Agreement is amended as
follows:
2.1 Section 1.1 of the Credit Agreement is amended by adding the
following definition to such section as follows:
"HOUSEHOLD" means Household Bank (SB), N.A.
2.2 Section 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
"HOUSEHOLD MERCHANT AGREEMENT" means the Merchant Agreement dated
as of September 4, 1998, among Household and certain of the Borrowers.
2.3 Section 8.1 of the Credit Agreement is amended by deleting such
section in its entirety and replacing it as follows:
8.1 MINIMUM EBITDA. At the end of each period beginning on April
1, 1998, and ending on the last day of each month set forth below,
EBITDA for such period shall be an amount not less than the following:
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PERIOD FROM APRIL
1998 TO END OF AMOUNT
------------------------ ----------------
June 1998 ($3,209,000)
September 1998 ($8,000,000)
December 1998 ($1,750,000)
2.4 Section 8.3(f) of the Credit Agreement is amended by deleting such
subsection in its entirety and replacing it as follows:
(F) Indebtedness and other obligations under the GECC Account
Purchase Agreement (including those under the letter dated September 4,
1998, sent to GECC by certain of the Borrowers) and the Household
Merchant Agreement, without giving effect to any amendments or
modifications or restatements thereof, or supplements thereto;
2.5 Section 8.4(b) of the Credit Agreement is amended by deleting such
subsection in its entirety and replacing it as follows:
(B) Liens granted to GECC under the GECC Account Purchase
Agreement and Liens granted to Household under the Household Merchant
Agreement;
2.6 Section 8.12 of the Credit Agreement is amended by deleting cause
(b)(iii) from such section in its entirety and replacing it as follows:
(III) restrictions set forth in the GECC Account Purchase Agreement or
the Household Merchant Agreement,
2.7 Section 8.14 of the Credit Agreement is amended by deleting clause
(i) from such section in its entirety and replacing it as follows:
(I) the GECC Account Purchase Agreement (other than the amendment dated
October 7, 1997, and the letter dated September 4, 1998, sent to GECC by
the Borrowers) or the Household Merchant Agreement and
2.8 Section 9.1(g) of the Credit Agreement is amended by deleting such
subsection in its entirety and replacing it as follows:
(G) DEFAULT UNDER GECC ACCOUNT PURCHASE AGREEMENT OR HOUSEHOLD
MERCHANT AGREEMENT. (i) Any default or breach by any Borrower shall
occur and be continuing under the GECC Account Purchase Agreement or the
Household Merchant Agreement or (ii) the GECC Account Purchase Agreement
or the Household Merchant Agreement shall be terminated for any reason,
in each case unless consented to by the Majority Lenders.
2.9 Schedule B, Part 6.9 of the Credit Agreement is amended by replacing
such schedule in its entirety with the information on EXHIBIT E.
2.A. AMENDMENT TO CREDIT AGREEMENT (LOCATION).
2A.1 Schedule B, Part 6.9(a) of the Credit Agreement is amended by
replacing such schedule with Schedule B, Part 6.9(a) attached to this Amendment
as Schedule I.
2A.2 Schedule B, Part 6.9(b) of the Credit Agreement is amended by
replacing such schedule with Schedule B, Part 6.9(b) attached to this Amendment
as Schedule II.
3. CONSENT.
3.1 SECOND TERM LOAN. On the Second Term Loan Closing Date, the Agent
and each Lender consents to the extension of the Second Term Loan by the
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Second Term Lenders in accordance with the terms of the Credit Agreement, as
amended by this Amendment. The Agent and each Lender acknowledge that the Second
Term Loan shall be secured by an interest in the Collateral PARI PASSU and pro
rata with the Existing Term Loan and the term "Secured Obligations" as used in
the Postpetition Collateral Agency Agreement shall include the obligations of
the Borrowers under the Credit Agreement with respect to the Second Term Loan.
The obligations of the Borrowers under the Credit Agreement with respect to the
Second Term Loan will be secured by the Collateral without having to amend the
Collateral Documents. The Agent and each Lender agree that at any time and from
time to time, at the cost and expense of the Borrowers, they will execute and
deliver all further instruments and documents, and take such further actions,
that may be reasonably necessary to so secure the Second Term Loan.
3.2 HOUSEHOLD TRANSACTION. On the Household Closing Date, the Agent and
the Majority Lenders consent to the termination of the GECC Account Purchase
Agreement and agree that such termination (or the filing of an application with
the Bankruptcy Court for such termination) will not constitute a breach of
Section 8.14 or Section 8.17 of the Credit Agreement or an Event of Default
under Section 9.1(g) the Credit Agreement. On the Household Closing Date, the
Agent and the Majority Lenders further consent to the entry of certain Borrowers
into the Household Merchant Agreement and agree that such entry will not
constitute an Event of Default under the Credit Agreement.
3.3 NEWCO. On the date each of the conditions set forth in SECTION 5.3
is satisfied by the Borrowers (the "NEWCO CLOSING DATE"), the Agent and the
Majority Lenders consent to the creation of Newco and agree that such creation
will not constitute a breach of Section 8.13 of the Credit Agreement or an Event
of Default under the Credit Agreement.
3.4 OTHER. Nothing in this Amendment should in any way be deemed (i) a
waiver of any Event of Default (other than as specifically set forth above) or
(ii) an agreement to forbear from exercising any remedies with respect to any
such Event of Default.
4. AGREEMENTS OF THE BORROWERS.
4.1 USE OF PROCEEDS. The proceeds from the Second Term Loan will be used
only to prepay outstanding Revolving Loans under the Credit Agreement. The
Borrowers acknowledge that the Revolving Line of Credit will be permanently
reduced in an amount equal to the original principal amount of the Second Term
Loan.
4.2 FURTHER ASSURANCES. The Borrowers acknowledge that the Second Term
Loan shall be secured by an interest in the Collateral PARI PASSU and pro rata
with the Existing Term Loan and the term "Secured Obligations" as used in the
Postpetition Collateral Agency Agreement shall include the obligations of the
Borrowers under the Credit Agreement with respect to the Second Term Loan. The
obligations of the Borrowers under the Credit Agreement with respect to the
Second Term Loan will be secured by the Collateral without having to amend the
Collateral Documents. The Borrowers agree that at any time and from time to
time, at their cost and expense, they will execute and deliver all further
instruments and documents, and take such further actions, that may be reasonably
necessary to so secure the Second Term Loan.
4.3 FAILURE TO COMPLY. The Borrowers agree that a breach of the
agreements in this SECTION 3 will constitute an Event of Default under the
Credit Agreement.
5. CONDITIONS PRECEDENT.
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This Amendment becomes effective on the date set forth above other than
with respect to SECTIONS 1, 2, 3.1, 3.2 AND 3.3 of this Amendment, which become
effective as described below:
5.1 SECOND TERM LOAN. With respect to SECTIONS 1 AND 3.1 of this
Amendment, this Amendment becomes effective upon satisfaction of the following
conditions:
(A) The representations and warranties of the Borrowers contained
in this Amendment are true and correct as of the Second Term Loan
Closing Date.
(B) This Amendment has been approved by the Bankruptcy Court
pursuant to an order (the "AMENDMENT APPROVAL ORDER") in form attached
as EXHIBIT B, which order is in full force and effect and has not been
reversed, modified, amended, appealed or stayed. The Agent and the
Second Term Lenders shall have been reasonably satisfied with the form
and timing or the notice of the motion for the entry of the Amendment
Approval Order and such notice and motion shall have been properly
served upon each lessor of property to any Borrower. Unless the Agent
and the Second Term Lenders agree otherwise, the Amendment Approval
Order shall have become final and non-appealable.
(C) The Borrowers have obtained an order of the Bankruptcy Court
extending the Borrowers' time to assume or reject executory contracts
and unexpired leases, pursuant to section 365(d)(4) of the Bankruptcy
Code, through March 31, 1999.
(D) The Second Term Lenders have completed their due diligence
review of the Borrowers and their properties and are satisfied, in their
sole and absolute discretion, with the results of such investigation.
Such due diligence investigation includes, without limitation, (i)
review of the Borrowers' financial statements, (ii) review of leases for
each of 32 properties selected by the Second Term Lenders, (iii) review
of the terms and provisions of the Borrowers' real estate holdings
(including leasehold documentation relating to such holdings) and (iv)
receipt and review of a report prepared by Keen Realty Consultants, such
report to be acceptable to the Second Term Lenders in their sole and
absolute discretion.
(E) The Agent and the Second Term Lenders have been reimbursed
for all fees and expenses (including reasonable attorneys' fees and
expenses) incurred in connection with the preparation of this Amendment
and the Second Term Loan.
(F) The Agent has received all of the following, each duly
executed and dated as of the Second Term Loan Closing Date (or such
other date as is satisfactory to the Agent) in form and substance
satisfactory to the Agent:
(1) SEVENTH AMENDMENT. Ten copies of this Amendment executed
by the LFC Funds Administrator, the Borrowers, the Agent
and all Lenders;
(2) SECOND TERM NOTES. Second Term Notes, substantially in the
form of Exhibit C-2 to the Credit Agreement (dated as of
the Second Term Loan Closing Date), made by the Borrowers
in favor of the Second Term Lenders;
(3) AMENDMENT APPROVAL ORDER. A copy of the Amendment Approval
Order; and
10
(4) OTHER. Such other documents as the Agent or the Second
Term Lenders may reasonably request.
5.2 HOUSEHOLD. With respect to Sections 2 and 3.2, this Amendment
becomes effective upon satisfaction of the following conditions:
(A) The representations and warranties of the Borrowers contained
in SECTIONS 6.1 through and including 6.4 of this Amendment are true and
correct as of the Household Closing Date.
(B) The Agent has received ten copies of this Amendment, duly
executed by the LFC Funds Administrator, the Borrowers, the Agent and
the Majority Lenders.
(C) The Agent has received an executed copy of an agreement among
the Agent, Household and the Borrowers, in form and substance
satisfactory to the Agent.
(D) The Household Merchant Agreement and the Letter have been
approved by the Bankruptcy Court.
(E) (i) The Household Merchant Agreement has closed, (ii)
Household has purchased a substantial portion of the portfolio of the
Borrowers' customer accounts held by GECC under the GECC Account
Purchase Agreement and (iii) the GECC Account Purchase Agreement has
been terminated.
(F) The Agent has received such other documents as it may
reasonably request prior to the date of this Amendment.
5.3 NEWCO. With respect to SECTION 3.3, this Amendment becomes effective
upon satisfaction of the following conditions:
(A) The representations and warranties of the Borrowers contained
in SECTIONS 6.1 through and including 6.4 of this Amendment are true and
correct as of the Newco Closing Date.
(B) The Agent has received ten copies of this Amendment, duly
executed by the LFC Funds Administrator, the Borrowers, the Agent and
the Majority Lenders.
(C) The Agent has received a secretary certificate of Newco,
substantially in the form as the secretary certificates provided to the
Agent in connection with the closing of the Credit Agreement, with all
appropriate attachments thereto.
(D) The Agent has received an assumption agreement executed by
Newco, substantially in the form of EXHIBIT C.
(E) The Agent has received an updated Schedule B, Part 8.10 to
the Credit Agreement reflecting all accounts of Newco.
(F) The Agent has received a legal opinion from counsel to the
Borrowers in a form and substance acceptable to the Agent.
(G) The Agent has received such other documents as it may
reasonably request and such other conditions as the Agent may reasonably
request have been satisfied and, upon the request of the Borrowers, the
Agent will give the Borrowers written notice when this condition has
been satisfied.
11
6. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers represents and warrants to the Agent and each
Lender that, after giving effect to this Amendment or any part of this
Amendment:
6.1 REPRESENTATIONS AND WARRANTIES. All representations and warranties
contained in the Credit Agreement and the other Credit Documents are true and
correct in all material respects on and as of the date of this Amendment, in
each case as if then made, other than representations and warranties that
expressly relate solely to an earlier date (in which case such representations
and warranties were true and accurate on and as of such earlier date).
6.2 EVENTS OF DEFAULT. No Default or Event or Default has occurred which
has not been waived (or, in the case of an Event of Default, cured) under the
terms of the Credit Agreement.
6.3 ENFORCEABILITY. Upon approval by the Bankruptcy Court (as
contemplated by Section 5.1(B)), this Amendment and the Credit Agreement, as
amended by this Amendment, will constitute legal, valid and binding obligations
of the LFC Funds Administrator and each of the Borrowers and will be enforceable
against such Persons in accordance with their respective terms.
6.4 CONSENTS. The execution and delivery by the LFC Funds Administrator
and each of the Borrowers of this Amendment does not require the consent or
approval of any Person other than the Bankruptcy Court (as contemplated by
SECTION 5.1(B)), except such consents and approvals as have been obtained.
6.5 NO PREPETITION OBLIGATIONS OUTSTANDING. As of the Second Term Loan
Closing Date, there are no Prepetition Obligations outstanding under the Credit
Agreement.
6.6 MATERIAL CONTRACTS. SCHEDULE B, PART 6.19, as amended by the
information contained on EXHIBIT D to this Amendment, contains a true, correct
and complete list of all the Material Contracts in effect on the Second Term
Loan Closing Date. Except as described on SCHEDULE B, PART 6.19, as amended by
the information contained on EXHIBIT D to this Amendment, no Material Contract
contains any burdensome restrictions on any Borrower or any Subsidiary of any
Borrower or any of their respective properties that could prevent such Borrower
or Subsidiary from conducting its business as conducted on the Second Term Loan
Closing Date. As of the Second Term Loan Closing Date, all of the Material
Contracts are in full force and effect and, except as described on SCHEDULE B,
PART 6.19, as amended by the information contained on EXHIBIT D to this
Amendment, no defaults currently exist thereunder by any Borrower or Subsidiary
of a Borrower that is a party thereto (other than defaults that need not be
cured under section 365(b)(2) of the Bankruptcy Code), or to the knowledge of
the Borrowers, any other party thereto. The Borrowers agree that the
representations and warranties set forth in this SECTION 5.7 will survive the
Second Term Loan Closing Date and that if such representations and warranties
are false or misleading in any material respect on the Second Term Closing Date,
an Event of Default will have occurred under Section 9.1(c) of the Credit
Agreement.
7. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER CREDIT
DOCUMENTS.
7.1 REFERENCES. Upon the effectiveness of this Amendment, or any part of
this Amendment, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import, and each reference in
each of the other Credit Documents to the "Credit Agreement" shall mean and be
12
a reference to the Credit Agreement as amended by this Amendment or any part of
this Amendment.
7.2 RATIFICATION. Except as expressly set forth in this Amendment, all
of the terms and conditions of the Credit Agreement and the other Credit
Documents remain in full force and effect and are ratified and confirmed in all
respects. The execution and delivery of this Amendment by the Agent and each of
the Lenders in no way obligates the Agent or any of the Lenders at any time
hereafter to consent to any other amendment or modification of any term or
provision of the Credit Agreement or any of the other Credit Documents, whether
of a similar or different nature.
8. GOVERNING LAW.
THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AMENDMENT IS
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS AND DECISIONS OF THE
STATE OF NEW YORK.
9. HEADINGS: COUNTERPARTS.
Section headings in this Amendment are included for convenience of
reference only and do not constitute a part of this Amendment for any other
purpose. This Amendment may be executed in any number of counterparts and by the
different parties hereto in 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.
[The remainder of this page is intentionally left blank]
13
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed and delivered by their duly authorized officers as of the date first
set forth above.
LFC FUNDS ADMINISTRATOR
XXXXXX FURNITURE CORPORATION, a Florida corporation, in
its capacity as LFC Funds Administrator
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
BORROWERS:
XXXXXX FURNITURE CORPORATION, a Florida corporation, in
its individual capacity and it its capacity as the LFC
Funds Administrator
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE INCORPORATED, a Delaware corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Treasurer
------------------------------------------
XXXXXX FURNITURE REALTY CORPORATION, a Florida
corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
14
XXXXXX SHOPPING SERVICE, a Florida corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE COMPANY OF THE MIDWEST, INC., a Colorado
corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE COMPANY OF THE PACIFIC, INC., a
California corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE COMPANY OF WASHINGTON, INC., a Washington
corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE COMPANY OF THE MIDWEST REALTY, INC., a
Colorado corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE COMPANY OF THE PACIFIC REALTY, INC., a
California corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
15
XXXXXX FURNITURE COMPANY OF WASHINGTON REALTY, INC., a
Washington corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXX X. XXXXX COMPANY, an Illinois corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXX X. XXXXX REALTY COMPANY, an Illinois corporation
By: /s/ XXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
AGENT:
BT COMMERCIAL CORPORATION, in its capacity as Agent
By: /s/ XXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------------------
Title: Sr. V.P.
------------------------------------------
REVOLVING LENDERS:
BT COMMERCIAL CORPORATION, a Delaware corporation in its
respective capacities as Revolving Lender and Collateral
Agent
By:
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
16
WAYLAND INVESTMENT FUND, LLC, in its capacity as Revolving
Lender
By:
------------------------------------------
Name:
------------------------------------------
Title:
------------------------------------------
FINOVA CAPITAL CORPORATION, in its capacity as Revolving
Lender
By: /s/ XXXXX XXXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxxx
------------------------------------------
Title: AVP
------------------------------------------
XXXXXX FINANCIAL, INC., it its capacity as Revolving
Lender
By: /s/ XXXXX XXXXXX
------------------------------------------
Name: Xxxxx Xxxxxx
------------------------------------------
Title: AVP-Relationship Manager
------------------------------------------
LASALLE NATIONAL BANK, it its capacity as Revolving Lender
By: /s/ XXXXXXXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
------------------------------------------
Title: Sr. VP
------------------------------------------
CONGRESS FINANCIAL CORPORATIONN (CENTRAL), it its capacity
as Revolving Lender
By: /s/ XXXXXX XXXXXXXXX
------------------------------------------
Name: Xxxxxx Xxxxxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
TRANSAMERICA BUSINESS CREDIT CORPORATION, it its capacity
as Revolving Lender
By: /s/ XXXXXX XXXXX
------------------------------------------
Name: Xxxxxx Xxxxx
------------------------------------------
Title: SVP
------------------------------------------
17
EXHIBIT A
ANNEX II
TO
POSTPETITION CREDIT AGREEMENT
DATED AS OF SEPTEMBER 5, 1997
LIST OF TERM LENDERS AND TERM COMMITMENT AMOUNTS
ORIGINAL TERM LENDERS:
1. SILVER OAK CAPITAL L.L.C.
c/o Xxxxxx, Xxxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Term Commitment Amount: $36,356,250
SECOND TERM LENDERS:
1. SILVER OAK CAPITAL L.L.C.
c/o Xxxxxx, Xxxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Term Commitment Amount: $___________
2. [OTHERS TO COME]
18
EXHIBIT B
FORM OF AMENDMENT APPROVAL ORDER
[ATTACHED]
19
EXHIBIT C
FORM OF ASSIGNMENT AGREEMENT
ASSUMPTION AGREEMENT
Reference is made to the Postpetition Credit Agreement dated as of
September 5, 1997 (as amended, waived or otherwise modified from time to time,
the "Credit Agreement"), among Xxxxxx Furniture Incorporated and its affiliates,
as borrowers (collectively, the "Borrowers"), the financial institutions party
thereto, as lenders (collectively, the "Lenders"), and BT Commercial
Corporation, as agent for the Lenders (in such capacity, the "Agent").
Capitalized terms used in this assumption agreement and not otherwise defined
have the meanings assigned to such terms in the Credit Agreement.
The undersigned certifies to the Lenders and the Agent that it is a
wholly owned Subsidiary of _________, a Borrower under the Credit Agreement. By
its execution and delivery of this assumption agreement, the undersigned becomes
a party to the Credit Agreement and the other Credit Documents as (i) a Borrower
under the Credit Agreement, the Postpetition Collateral Agency Agreement and any
Note and (ii) a Grantor under the Postpetition Security Agreement, and by this
assumption agreement expressly and jointly and severally assumes all obligations
and liabilities of a Borrower or Grantor under the Credit Agreement and the
other Credit Documents. By its execution and delivery of this assumption
agreement, the undersigned makes each of the representations and warranties of
the Borrowers contained in the Loan Agreement on the date of this assumption
agreement, after giving effect to this assumption agreement.
This assumption agreement is governed by and interpreted in accordance
with the internal laws of the State of New York.
[NEWCO]
By:_________________________
Title:
Accepted:
BT COMMERCIAL CORPORATION, as Agent
By:_______________________________
Title:
20
EXHIBIT D
SCHEDULE B - PART 6.19
1. Indenture dated as of March 1, 1996 between Xxxxxx Furniture
Corporation, as Issuer, and American Bank National Association, as
Trustee, concerning 13-3/8% Senior Notes due 1998.
2. Indenture dated as of July 12, 1993 between Xxxxxx Furniture
Corporation, as Issuer, and Norwest Bank Minnesota, National
Association, as Trustee, concerning 9-5/8% Senior Subordinated Notes due
2003.
3. Account Purchase and Credit Card Program Agreement dated as of May 2,
1994 by and among Xxxxxx Furniture Corporation, General Electric Capital
Corporation et al.
4. Indenture dated as of December 1, 1992 between Xxxxxx Furniture
Incorporated (formerly known as LFC Holding Corporation), as Issuer, and
First Bank National Association, as Trustee, concerning Senior Deferred
Coupon Debentures due 2002.
5. Merchant Agreement, dated as of the 4th day of September, 1998, between
Household Bank (SB), N.A., Xxxxxx Furniture Corporation, Xxxxxx
Furniture Company of the Midwest, Inc., Xxxxxx Furniture Company of the
Pacific, Inc., and Xxxxxx Furniture Company of Washington, Inc.
21
EXHIBIT E
SCHEDULE B - PART 6.9(A)
Locations of Offices, Records and Inventory
(a) Principal place of business for all Borrowers:
0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000
(Executive Office)
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
(Accounting Office)
(b) (See attached list)
22
SCHEDULE B, PART 6.9(B)
XXXXXX FURNITURE CORPORATION
OWNED REAL PROPERTY WAREHOUSE
------------------- ---------
CONNECTICUT
1. 00 Xxxxxx Xxxxx X
Southington, Connecticut 06489-1594
Hartford County
FLORIDA
2. 00000 Xxxxx Xxxxx Xxxxx X
Xxxxxx Xxxxx, Xxxxxxx 00000-0000
Dade County
3. 0000 Xxxxx Xxxxxxxxx Xxxxxx X
Xxxx Xxxxx, Xxxxxxx 00000-0000
Xxx County
4. 0000 XX 0xx Xxxxxx X
Xxxxxxxxxx, Xxxxxxx 00000-0000
Broward County
5. 0000 Xxxxx Xxxxxxxxx X
Xxxxx, Xxxxxxx 00000-0000
Hillsborough County
6. 0000 Xxxxxxxxxx Xxxxxxxxx X
Xxxx Xxxx Xxxxx, Xxxxxxx 00000-0000
Palm Beach County
NEW JERSEY
7. 000 X.X. Xxxxx 0 Xxxxx X
Xxxxxx, Xxx Xxxxxx 00000-0000
Middlesex County
23
8. 000 Xxxxx 00
Xxxxxxx, Xxx Xxxxxx 00000-0000
Bergen County
PENNSYLVANIA
9. 000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Xxxxxxxxxx Xxxxxx
(ACTG)
TEXAS
10. 0000 Xxxx Xxxxxxx Xxxxxxx X
Xxxxxxxxx, Xxxxx 00000-0000
Tarrant County
11. 00000 XXX Xxxxxxx X
Xxxxxxxx, Xxxxx 00000-0000
Xxxxxx Xxxxxx
LEASED REAL PROPERTY
CONNECTICUT
12. 000 Xxx Xxxxxx X
Stateline Plaza, #200
Enfield, Connecticut 06082-3885
Hartford County
13. 0000 Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxxxxx 00000-0000
New Haven County
DELAWARE
14. 000 Xxxxxxx Xxxx X
Xxxxxxxx, Xxxxxxxx 00000-0000
Xxxxxxxxx Xxxxxx
24
FLORIDA
15. 0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxx Xxxxx, Xxxxxxx 00000-0000
Palm Beach County
16. 00000 X.X. 00 Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Pinellas County
17. 0000 Xxxxxxxxx Xxxx X
Xx. Xxxxxxxxxx, Xxxxxxx 00000-0000
Broward County
18. 0000 X.X. 000 Xxxxxx X
Xxxxx, Xxxxxxx 00000-0000
Dade County
19. 0000 X.X. 00 Xxxxx
Xxx Xxxx Xxxxxx, Xxxxxxx 00000-0000
Pasco County
20. 0000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Orange County
21. 0000 Xxxxxxx Xxxxxxxxx X
Xxxxxx Xxxx, Xxxxxxx 00000-0000
Seminole County
GEORGIA
22. 0000 Xxxxxxxx Xxxx X
Xxxxxxx Xxxx, Xxxxxxx 00000-0000
Xxxxxx County
INDIANA
23. 0000 Xxxx Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Xxxxxx County
24. 0000 Xxxx 00xx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Xxxxxx Xxxxxx
LOUISIANA
25. 0000 Xxxxx Xxxxxxxxx Xxxxxxx X
Xxxxxxxxx, Xxxxxxxxx 00000-0000
County of Xxxxxxxxx Xxxxxx
MARYLAND
26. 0000 Xxxxxxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
Xxxxxxxxx Xxxxxx
27. 0000 Xxxxxxxxx Xxxxxxxxx X
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxxxxxx Xxxxxx
25
28. 00 Xxxxxxx Xxxx X
Xxxx Xxxxxx, Xxxxxxxx 00000-0000
Xxxx Arundel County
29. 00000 Xxxxxxxxx Xx. X
Xxxxxxxxx, Xxxxxxxx 00000-0000
Xxxxxxxxxx County
30. 0000 Xxxxxxxxx Xxxx X
Xxxxxxxx, Xxxxxxxx 00000-0000
Prince George's County
MASSACHUSETTS
31. Xxxxxxx Xxxx Xxxx X
Xxxxxxx, Xxxxxxxxxxxxx 00000-0000
Xxxxx Xxxxxx
32. 000 Xxxxxxxxxx Xxxxxxx X
Xxxxxx, Xxxxxxxxxxxxx 00000-0000
Xxxxxxx Xxxxxx
33. 000 Xxxxxxxx Xxxx X
Xxxxxxxx, Xxxxxxxxxxxxx 00000-0000
Worcester County
NEW HAMPSHIRE
34. 168 Xxxxxx Xxxxxxx Highway
Nashua, New Hampshire 03060-5502
Hillsborough County
NEW JERSEY
35. 0000 Xxxxxx Xxxx X
Cherry Hill, New Jersey 08002-1299
Camden County
36. 000 Xxxxx #00 X
Xxxxxxxxx, Xxx Xxxxxx 00000-0000
Xxxxx Xxxxxx
NEW YORK
37. 00 Xxxxx Xxxxxxx X
Xxxxxxxxxxx, Xxx Xxxx 00000-0000
Xxxxxxx Xxxxxx
38. 0 Xxxxxx Xxxxx X
0000 Xxxxxxxxxxxx Xxxxxx
Xxxxxx Xxxxxxx, Xxxxxx, Xxx Xxxx 00000
Queens County
39. 0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Xxxxxxx Xxxxxx
OHIO
40. 000 Xxxx Xxxxxx Xxxx X
Xxxxxxxxxx, Xxxx 00000-0000
Xxxxxxxx County
26
PENNSYLVANIA
41. 000 Xxxxxxxxx Xxxx
Xxxx xx Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Xxxxxxxxxx County
42. 0000 Xxxx Xxxxxxx Xxxxxxx X
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Bucks County
43. 0000 XxxXxxxxx Xxxx X
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Xxxxxx Xxxxxx
44. 000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Xxxxx Xxxxxx
TEXAS
45. 0000 Xxxxxxxx Xxxxxxxxx X
Xxxxxx, Xxxxx 00000-0000
Xxxxxx County
46. 0000 Xxxxxxxx Xxxxxxx X
Xxxxxx, Xxxxx 00000-0000
Xxxxxx Xxxxxx
47. 0000 Xxxxxx Xxxxxxxxx X
Xx Xxxx, Xxxxx 00000-0000
El Paso County
48. 0000 Xxxx Xxxxx Xxxxxxxxx X
Xxxx Xxxxx, Xxxxx 00000-0000
Tarrant County
49. 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxxxxxx Xxxxx, Xxxxx 00000
Tarrant County
50. 0000 Xxxxxx X X
Xxxxx, Xxxxx 00000-0000
Xxxxxx Xxxxxx
51. 0000 Xxxxx Xxxx Xxxxx X
Xxx Xxxxxxx, Xxxxx 00000-0000
Bexar County
52. 0000 X.X. Xxxx #000
Xxx Xxxxxxx, Xxxxx 00000-0000
Bexar County
VIRGINIA
53. 0000 Xxxxxxx Xxxx X
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Fairfax County
27
GROUND LEASE
NEW YORK
54. 000 Xxxx Xxxx Xxxxxxxxx X
Garden City East, New York 11530-2199
Nassau County
XXXXXX FURNITURE COMPANY OF THE MIDWEST, INC.
OWNED REAL PROPERTY
COLORADO
55. 0000 Xxxxx Xxxxxxx Xxxx.
Xxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000
El Paso County
56. 00000 Xxxx 0xx Xxxxxx X
Xxxxxxxx, Xxxxxxxx 00000-0000
Jefferson County
57. 0000 Xxxx 00xx Xxxxxx X
Xxxxxxxxxxx, Xxxxxxxx
Xxxxxxxxx Xxxxxx
MINNESOTA
58. 0000 Xxxxxxx Xxxxx X
Xx. Xxxx, Xxxxxxxxx 00000-0000
Xxxxxx County, Minnesota
MISSOURI
59. 0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000-0000
Xxxxxxx County
60. 0000 Xxxxxxxx Xxxx X
Xxxxxxxxx, Xxxxxxxx 00000-0000
St. Louis County
LEASED REAL PROPERTY
ARIZONA
61. 0000 Xxxx Xxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Maricopa County
62. 000 Xxxxx Xxxxxx Xxxx X
Xxxx, Xxxxxxx 00000-0000
Maricopa County
63. 0000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000-0000
Maricopa County
64. 0000 Xxxx Xxxxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000-0000
Xxxxxxxx Xxxxxx
28
65. 0000 Xxxxx Xxxxxx Xxxxx
Xxxxx, Xxxxxxx 00000
Maricopa County
66. 0000 Xxxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxx
Xxxxxxxx Xxxxxx
COLORADO
67. 0000 Xxxxx Xxxxxxx Xxxxxxx
Xxxxxx, Xxxxxxxx 00000-0000
Denver County
KANSAS
68. 0000 Xxxx Xxxx Xxxx X
Xxxxxx, Xxxxxx 00000-0000
Xxxxxxx Xxxxxx
MINNESOTA
69. 0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxxx 00000-0000
Hennepin County
70. 00000 XxXxxx Xxxxxx Xxxxx X
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
Dakota County
MISSOURI
71. 0000 Xxxxxxxx Xxxxxxx Xxx
Xxxxx Xxxxxx Xxxx, Xxxxxxxx 00000-0000
Xxxxxxx County
72. 00000 Xxxx Xxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
St. Louis County
XXXXXX FURNITURE COMPANY OF THE PACIFIC, INC.
OWNED REAL PROPERTY
CALIFORNIA
73. 0000 Xxx Xxxxxxxx Xxxx, Xxxx X
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Los Angeles County
74. 0000 Xxxx Xxxx X
Xxxxxxx, Xxxxxxxxxx 00000-0000
Stanislaus County
75. 0000 Xxxxx Xxxxxx Xxxxxxxxx X
Xxxxxx, Xxxxxxxxxx 00000-0000
Ventura County
76. 000 Xxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000-0000
San Diego County
29
OREGON
77. 00000 Xxxxxxxxx Xxxxxxx Xxxx X
Xxxxxxxxx, Xxxxxx 00000-0000
Clackamas County
78. 0000 XX Xxxxxxx Xxxxx Xxxx
Xxxxxx, Xxxxxx 00000-0000
Xxxxxxxxxx Xxxxxx
LEASED REAL PROPERTY
CALIFORNIA
79. 0000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000-0000
Orange County
80. 0000 Xxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx, Xxxxxxxxxx 00000
San Xxxx Obispo County
81. 0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxxx 00000-0000
Xxxx Xxxxxx
82. 00000 Xxxx Xxxx Xxxxx
Xxxxxxxxx Xxxx, Xxxxxxxxxx 00000
Riverside county
83. 00000 Xxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Los Angeles County
84. 0000 Xxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000
San Diego County
85. 0000 Xxxxxx Xxxx Xxxx X
Xxxxxxx, Xxxxxxxxxx 00000-0000
Contra Costa County
86. 000 XxXxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Xxxxxxxxx Xxxxxx
87. 00000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Alameda County
88. 0000 Xxxx Xxxx Xxxxxx X
Xxxxxx, Xxxxxxxxxx 00000-0000
Fresno County
89. 0000 Xxxxxxx Xxxxxx X
Xxxxxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Orange County
90. 00000 Xxxxxxx xx xx Xxxxxxx
Xxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Orange County
30
91. 0000 Xxxx Xxxxxx X
Xxxxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Sacramento County
92. 00000 Xxxxxxxx Xxxxxx X
Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
Los Angeles County
93. 0000 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Contra Costa County
94. 0000 Xxxxxxxx Xxxxx, Xxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
Alameda County
95. 0000 Xxxxxxxxx Xxxxxx X
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Los Angeles County
96. 0000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Sonoma County
97. 000 Xxxxxx Xxxxxx Xxxxx X
Xxx Xxxxxxxxxx, Xxxxxxxxxx 00000-0000
San Bernardino County
98. 0000 Xxxxxxxxxx Xxxx
Xxx Xxxxxx, Xxxxxxxxxx 00000-0000
San Mateo County
99. 0000 Xxxx Xxxxxx Xxxxxxxxx X
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
San Diego County
100. 000 Xxxx Xxxxxx Xxxxxx X
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Los Angeles County
101. 0000 Xxxxxxxx Xxxxxx X
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Alameda County
102. 0000 Xxxxxxxxxx Xxxx X
Xxxxx Xxxxx, Xxxxxxxxxx 00000-0000
Santa Xxxxx County
103. 000 Xxxxxxx Xxxxxx X
X. Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
San Mateo County
104. 0000 Xxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000-0000
San Xxxxxxx County
105. 00000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxxx 00000
San Bernardino County
31
NEVADA
106. 00 Xxxxx Xxxxxx X. Xxxx Xxxxxxxxx X
Xxx Xxxxx, Xxxxxx 00000-0000
Xxxxx County
GROUND LEASE
107. 00000 Xxxx Xxxxxxxxx Xxxxxx
Xxxx xx Xxxxxxxx, Xxxxxxxxxx 00000 (GROUND LEASE)
Los Angeles County
XXXXXX FURNITURE COMPANY OF WASHINGTON, INC.
OWNED REAL PROPERTY
WASHINGTON
108. 20111 00xx Xxxxxx Xxxx X
Xxxxxxxx, Xxxxxxxxxx 00000-0000
Xxxxxxxxx Xxxxxx
LEASED REAL PROPERTY
WASHINGTON
109. 0000 00xx Xxxxxx, Xxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Xxxxxx County
110. 00000 Xxxxx Xxxxxx Xxxxxxx X
Xxxxxxx, Xxxxxxxxxx 00000-0000
King County
32
SCHEDULE B - PART 6.18
1. Relative to the Washington Business and Occupation Tax audit for the
period January 1992 through June 1996, additional tax estimated at
$10,620 is due on petitioned issues for which partial relief was
granted. Thus audit is closed for all other purposes. The State of
Washington has sent bills for the remainder of the tax, but the amounts
computed were inconsistent with the settlement terms. As of September 4,
1998, the Borrowers are waiting for another revised billing statement.
2. The State of Connecticut delivered audit workpapers that propose
additional sales and use tax of approximately $25,400. The Borrowers are
seeking adjustments that could reduce the additional tax to
approximately $22,000. A portion of this additional tax (approximately
$3,000-$5,000) is attributable to construction contractors who were not
registered for sales/use tax with the State. Xxxxxx anticipates billing
the contractors for their share of the additional tax.
3. The cities of Denver and New Orleans are currently auditing Xxxxxx for
sales and/or use tax. Of the two, the Denver audit is further progressed
and an assessment is expected shortly; the amount thereof is currently
unknown. New Orleans, which is auditing the Xxxxxxxxx Xxxxxx store for
sales into New Orleans, is still trying to decide on sample periods for
the audit. Both of these audits are correspondence audits (being handled
through the mail).
4. A sales/use tax audit by the State of California is scheduled to begin
September 21, 1998. The audit will cover the period April 1995 through
June 1998. No other audits are scheduled at this time.
5. Attached is a schedule prepared on September 3, 1998 concerning open tax
years.
6. There are tax sharing agreements between Xxxxxx Furniture Incorporated
and Xxxxxx Furniture Corporation and among Xxxxxx Furniture Corporation
and the remaining Borrower subsidiaries.
33
SCHEDULE B - PART 6.18 (CONT.)
OPEN TAX YEARS AS OF SEPTEMBER 3, 1998
Xxxxxx Furniture Incorporated (the "Parent") has executed or filed with the IRS
an agreement extending the period of assessment or collection of income taxes as
follows:
DATE STATUTE IS
EXTENDED TO THE
EXTENT OF NOL/
FISCAL YEAR NORMAL STATUTE CREDIT CARRYBACKS
ENDING EXPIRES OR WAIVERS
------ ------- ----------
March 31, 1990 December 15, 1993 June 15, 1999 (1) (7)
March 31, 1991 December 15, 1994 October 31, 1998 (2) (7)
March 31, 1992 December 15, 1995 June 15, 1999 (3) (7)
March 31, 1993 December 15, 1996 June 15, 1999 (4) (7)
March 31, 1994 July 22, 1997 October 31, 1998 (6) (7)
March 31, 1995 December 15, 1998 June 15, 1999 (5) (7)
March 31, 1996 June 15, 1999 (7)
March 31, 1997 June 2, 2000 (7)
March 31, 1998 December 15, 2001
(1) Statute for March 31, 1990 remains open only to the extent of the refund
generated from the carryback of the targeted jobs tax credit from March 31, 1993
(total exposure for carryback is $92,409). See Footnote (7).
(2) Statute for March 31, 1991 remains open only to the extent of the refund
generated from the carryback of the net operating loss (NOL) from March 31, 1994
(total exposure for carryback is $5,500,739). See Footnote (6).
(3) Statute for March 31, 1992 remains open to the extent of the refunds
generated from the carrybacks of the targeted jobs credit from March 31, 1995
(total exposure for carrybacks $186,220 = $137,349 and $48,871). See Footnote
(7).
(4) Statute for March 31, 1993 remains open only to the extent of the NOL from
March 31, 1996 (total exposure $4,875,054). See Footnote (7).
34
SCHEDULE B - PART 6.18 (CONT.)
(5) Statute for March 31, 1995 remains open to the extent of the NOL from March
31, 1996 (total exposure $64,258). Statute for March 31, 1997 remains open to
the extent of the NOL from March 31, 1997 (total exposure $2,383,342). See
Footnote (7).
(6) Waiver signed on January 16, 1997. On June 3, 1997, Xxxxxx Furniture Inc.
and Subsidiaries received notice of no exception from IRS Joint Committee on
Taxation for its FYE March 31, 1994 and FYE March 31, 1991 income tax returns.
(7) On May 28, 1998, Xxxxxx Furniture, Inc. and Subsidiaries received clearance
from the Joint Committee on Taxation for its March 31 FYE for 1990, 1992, 1993,
1995, 1996 and 1997.
The extensions also extend to all applicable statuses of limitations for
state income tax assessments for the Parent and its Operating Subsidiaries. The
following Operating Subsidiaries have State Waivers extending the period of
assessment or collection of taxes:
Xxxxxx Furniture Co. of the Pacific, Inc.
TAX TAXING EXTENDED WAIVER
TYPE AUTHORITY PERIOD EXPIRES
---- --------- ------ -------
Sales/Use California 4/1/95 - 9/30/95 1/31/99
Xxxxxx Furniture Corporation
TAX TAXING EXTENDED WAIVER
TYPE AUTHORITY PERIOD EXPIRES
---- --------- ------ -------
Sales/Use Connecticut 5/1/95 - 9/30/98 60 days after
assessment sent by
Connecticut
Department of
Revenue. No such
assessment has been
prepared by the
Department to date.
Parent and all operating subsidiaries with the exception of Xxxx X.
Xxxxx Company have agreed or been requested to make adjustments under IRC
Section 481(a) by reason of a change in accounting method for the following:
Recognition of Income on Ordered and Undelivered Sales at the
time of Delivery (Xxxx X. Xxxxx Company already employed this
method of accounting, and therefore, did not require a change of
accounting method under IRC Section 3115).
