Exhibit 10.1
WAIVER AND AMENDMENT NO. 1
TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS WAIVER AND AMENDMENT NO. 1 TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT ("Amendment") is dated as of March 11, 2004 and
is by and among FLEET CAPITAL CORPORATION, a Rhode Island corporation, and
the other parties identified as Lenders on the signature pages hereto
(collectively, "Lenders"), on the one hand, and FALCON PRODUCTS, INC., a
Delaware corporation, XXXXXX XXXXXXXX INDUSTRIES, INC., a Delaware
corporation and SELLERS & XXXXXXXXX INC., a New Jersey corporation
(collectively, "Borrowers"), on the other hand. Capitalized terms used
herein but not otherwise defined herein shall have the respective meanings
assigned to such terms in the Loan Agreement referred to below.
W I T N E S S E T H:
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WHEREAS, Lenders, Borrowers, Fleet Capital Corporation, as
Agent, and OCM Principal Opportunities Fund II, L.P., as Tranche B Agent,
are parties to an Amended and Restated Loan and Security Agreement, dated as
of January 15, 2004 (as the same has been and may be amended or modified
from time to time, the "Loan Agreement"), pursuant to which the Lenders have
agreed to make certain loans and other financial accommodations to or for
the account of Borrowers;
WHEREAS, Borrowers have informed Agent and Tranche B Agent
of the existence of the Events of Default listed on Exhibit A (the "Existing
Events of Default");
WHEREAS, Borrowers have requested that Lenders waive the
Existing Events of Default;
WHEREAS, Lenders have agreed to waive the Existing Events
of Default on the terms and subject to the conditions hereinafter set forth;
WHEREAS, Borrowers and Lenders have agreed to amend the
Loan Agreement on the terms and subject to the conditions hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises set forth
above, the terms and conditions contained herein, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the respective parties hereto hereby agree as follows:
1. Waivers. Subject to the satisfaction of the conditions
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set forth in Section 4 below, the undersigned Lenders waive the Existing
Events of Default. Other than as expressly set forth above, the foregoing
waivers shall not constitute waivers of any Events of Default or Defaults
that are now in existence or that may hereafter occur or any rights or
remedies that Agent, Tranche B Agent and Lenders may have under the Loan
Agreement, the
other Loan Documents or applicable law with respect thereto, all of which
rights and remedies Agent, Tranche B Agent and Lenders specifically reserve.
2. Amendments. Subject to the satisfaction of the
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conditions set forth in Section 4 below, and in reliance upon the
representations and warranties of Borrowers set forth herein, the Loan
Agreement is hereby amended as follows:
(a) Section 2.1.1(b) of the Loan Agreement is amended by
(i) deleting the reference to "15.0%" and inserting "16.0%" in its place,
(ii) by deleting the reference to "9.0%" and inserting "10.0%" in its place,
and (iii) inserting the following sentence at the end of such Section:
Upon the delivery of financial statements pursuant to
Section 8.1.3(ii) showing that EBITDA for the twelve (12) months
ended on the date of such financial statements was more than
$20,000,000, the interest rate applicable to Term Loan B PIK
Interest shall be reduced to 9% per annum with a resulting decrease
to 15% per annum in the overall interest rate applicable to Term
Loan B.
(b) Section 2.6(a) of the Loan Agreement is amended and
restated to read as follows:
(a) At the effective date of termination of this Agreement
for any reason, any prepayment of Term Loan A pursuant to
subsection 3.3.5 or any reduction of the Revolving Loan Commitments
pursuant to subsection 3.3.6, Borrowers shall jointly and severally
pay to Agent, for the ratable benefit of Revolving Credit and Term
Loan A Lenders (in addition to the then outstanding principal,
accrued interest and other charges then due and owing under the
terms of this Agreement and any of the other Loan Documents and any
amounts then due and owing pursuant to subsection 3.2.5), as
liquidated damages for the loss of the bargain and not as a
penalty, an amount equal to (i) 1.5% of the sum of the aggregate
amount of the Revolving Loan Commitments then being reduced or
terminated and the outstanding amount of Term Loan A then being
prepaid, if such termination, prepayment or reduction occurs during
the first 12 month period of the Term (January 15, 2004 through
January 14, 2005), (ii) 1.0% of the sum of the aggregate amount of
the Revolving Loan Commitments then being reduced or terminated and
the outstanding amount of Term Loan A then being prepaid, if such
termination, prepayment or reduction occurs during the second 12
month period of the Term (January 15, 2005 through January 14,
2006), and (iii) 0.5% of the sum of the aggregate amount of the
Revolving Loan Commitment then being reduced or terminated and the
outstanding amount of Term Loan A then being prepaid, if such
termination, prepayment or reduction occurs after January 14, 2006,
but prior to the scheduled end of the Term.
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(c) Section 8.1 of the Loan Agreement is amended by
inserting the following new subsection 8.1.13 as follows:
8.1.13. Consultant. Borrowers shall, within thirty (30)
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days after written request by the Agent to do so, retain and
thereafter shall continue to retain, at Borrowers' joint and
several expense, a third party consultant reasonably satisfactory
to Agent. Borrowers shall cause such consultant to provide to
Borrowers, Agent and Tranche B Agent a comprehensive review of
Borrowers' cash flows and pro-forma financial statements, review
and assist in Borrowers' cash management (liquidity management),
review Borrowers' general operating procedures, make
recommendations as necessary, assist Borrowers' management in
preparing and developing reports to Agent and Lenders and to
perform such other advisory functions as are reasonably requested
by Agent. Borrowers shall provide Agent, Tranche B Agent and
Lenders with access to such consultant and shall cause such
consultant to provide Agent and Lenders with such reports as shall
be reasonably requested by Agent. Notwithstanding the foregoing,
upon the delivery of financial statements pursuant to Section
8.1.3(ii) showing that EBITDA for the twelve (12) months ended on
the date of such financial statements was more than $25,000,000,
Borrowers' shall no longer be required to retain such consultant
(to the extent such consultant was ever required by the Agent).
(d) The definition of Term Loan B Prepayment Fee in
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Appendix to the Loan Agreement is amended and restated in its entirety to
read as follows:
Term Loan B Prepayment Fee - (a) with respect to any
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prepayment of Term Loan B that is made on or prior to the date
which is eighteen (18) months after the Closing Date, an amount
equal to 10% of the amount prepaid, (b) with respect to any
prepayment of Term Loan B that is made after the date which is
eighteen (18) months after the Closing Date but on or prior to the
date which is thirty-six (36) months after the Closing Date, an
amount equal to 5% of the amount prepaid, and (c) with respect to
any prepayment of Term Loan B that is made after the date which is
thirty-six (36) months after the Closing Date, zero.
(e) Section I (Fixed Charge Coverage) of Exhibit 8.3 to
the Loan Agreement is amended by (i) deleting "0.60" appearing opposite "4
fiscal quarter period ended on or about 4/30/04" and inserting "0.50" in its
place and (ii) deleting "0.70" appearing opposite "4 fiscal quarter period
ended on or about 7/31/04" and inserting "0.60" in its place.
(f) Section II (EBITDA) of Exhibit 8.3 to the Loan
Agreement is amended by (i) deleting "$15,000,000" appearing opposite "4
fiscal quarter period ended on or about 4/30/04" and inserting "$14,000,000"
in its place and (ii) deleting "$19,000,000" appearing opposite "4 fiscal
quarter period ended on or about 7/31/04" and inserting "$17,000,000" in its
place.
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(g) Section III (Consolidated Secured Funded Debt to
Consolidated EBITDA) of Exhibit 8.3 to the Loan Agreement is amended by (i)
deleting "4.25" appearing opposite "Period ended 4/30/04" and inserting
"5.10" in its place and (ii) deleting "4.00" appearing opposite "Period
ended 7/31/04" and inserting "4.20" in its place.
(h) Section IV (Minimum Domestic EBITDA) of Exhibit 8.3 to
the Loan Agreement is deleted.
3. Scope of Amendment. Subject to the satisfaction of the
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conditions set forth in Section 4 below and in reliance upon the
representations and warranties of Borrowers set forth therein, this
Amendment shall have the effect of amending the Loan Agreement as
appropriate to express the agreements contained herein. In all other
respects, the Loan Agreement and the other Loan Documents shall remain in
full force and effect in accordance with their respective terms.
4. Conditions to Effectiveness. The effectiveness of the
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waiver contained in Section 1 hereof and the amendments contained in Section
2 hereof are subject to the satisfaction of the condition precedent that
Agent shall have received counterparts of this Amendment executed by each
Borrower and each Lender and each Guarantor.
5. Representations, Warranties and Covenants. To induce
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Lenders to execute and deliver this Amendment, Borrowers hereby represent
and warrant to Lenders that, after giving effect to this Amendment:
(a) All representations and warranties contained in the
Loan Agreement and the other Loan 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 remain true and correct in all material respects on and as of
such earlier date).
(b) No Default or Event of Default has occurred which is
continuing.
(c) This Amendment, and the Loan Agreement, as amended
hereby, constitute legal, valid and binding obligations of Borrowers and are
enforceable against Borrowers in accordance with their respective terms.
(d) The execution and delivery by Borrowers of this
Amendment does not require the consent or approval of any Person, except
such consents and approvals as have been obtained.
6. Governing Law. THE VALIDITY, INTERPRETATION AND
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ENFORCEMENT OF THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE INTERNAL LAWS AND DECISIONS OF THE STATE OF ILLINOIS,
WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
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7. Headings. Section headings in this Amendment are
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included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose.
8. Counterparts. This Amendment may be executed in any
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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. Any such counterpart which may be delivered by facsimile
transmission shall be deemed the equivalent of an originally signed
counterpart and shall be fully admissible in any enforcement proceedings
regarding this Amendment.
9. Guarantor Reaffirmation. Each Guarantor hereby
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reaffirms that the Loan Documents and such Guarantor's obligations
thereunder shall continue in full force and effect after giving effect to
this Amendment.
10. Expenses. Borrowers shall pay all reasonable expenses
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(including reasonable legal fees and expenses) incurred by Agent and Tranche
B Agent in connection with this Amendment.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their proper and duly
authorized officers as of the date first set forth above.
LENDERS:
FLEET CAPITAL CORPORATION
As Agent and as sole Revolving Credit and
Term Loan A Lender
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Title: Senior Vice President
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OCM PRINCIPAL OPPORTUNITIES FUND II,
L.P., as sole Term Loan B Lender and as
Tranche B Agent
By: Oaktree Capital Management, LLC
Its General Partner
By: /s/ Xxxxxxxxxxx X. Brothers
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Title: Managing Director
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By: /s/ Xxxxxxx X. Xxxxxx
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Title: Senior Vice President
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BORROWERS:
FALCON PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: President
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XXXXXX XXXXXXXX INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: President
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SELLERS & XXXXXXXXX INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: Vice President
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GUARANTORS:
XXXX FURNITURE CORPORATION
By: /s/ Xxxxx X. Xxxxxx
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Title: President
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FALCON HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: President
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THE FALCON COMPANIES INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: President
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MADISON FURNITURE INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: President
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XXXXXXX INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: President
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EPIC FURNITURE GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx
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Title: Vice President
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EXHIBIT A
EXISTING DEFAULTS
1. Borrowers' permitting the Fixed Charge Coverage Ratio, determined
as of January 31, 2004, for the period of four consecutive fiscal
quarters then ending, to be less than .60 to 1.0.
2. Borrowers' failure to have Consolidated EBITDA of at least
$15,000,000 for the 4 fiscal quarter period ended on or about
January 31, 2004.
3. Borrowers' failure to have a ratio of Consolidated Secured Funded
Debt as of January 31, 2004 to Consolidated EBITDA for the period
of four consecutive fiscal quarters ended January 31, 2004 of not
more than 4.60x.
4. Borrowers' permitting the EBITDA directly generated by Borrowers
and their Domestic Subsidiaries for the fiscal quarter period ended
January 31, 2004, to be less than 87.5% of the EBITDA of Borrowers
and their Subsidiaries for such fiscal quarter period.
