AMENDMENT NO. 2 OF
PURCHASE AND CONTRIBUTION AGREEMENT
AMENDMENT NO. 2, dated as of September 6, 1996, to the
Purchase and Contribution Agreement, dated as of November 15,
1994, as amended and restated as of December 29, 1995 and further
amended as of June 27, 1996 (the " Agreement"), among THE LANE
COMPANY, INCORPORATED, ACTION INDUSTRIES, INC., BROYHILL
FURNITURE INDUSTRIES, INC. and THOMASVILLE FURNITURE INDUSTRIES,
INC., as sellers (the " Sellers"), and INTERCO RECEIVABLES
CORP., as purchaser (the " Purchaser") (the " Amendment").
RECITALS
WHEREAS, the Sellers and the Purchaser have agreed subject
to the terms and conditions of this Amendment, to amend the
Agreement as hereinafter set forth.
Terms used herein but not defined herein shall have the
meaning assigned thereto in the Agreement.
NOW, THEREFORE, the parties agree as follows:
1. Amendment of Agreement. The Agreement shall be and is
hereby amended, as of the date hereof (subject to satisfaction of
the conditions precedent set forth in Section 2 hereof), as
follows:
(a) The definition of "Bank Credit Agreement" in Section
1.01 shall be amended to provide in its entirety as follows:
""Bank Credit Agreement" means the Credit Agreement
dated as of November 17, 1994, as amended and restated as of
December 29, 1995 and as further amended and restated as of
September 6, 1996, among Furniture Brands International,
Inc. (f/k/a Interco), Broyhill, Lane, Thomasville, the banks
named therein and Bankers Trust Company, as agent."
(b) The definition of "Cumulative Consolidated EBITDA" in
Section 1.01 shall be deleted in its entirety.
(c) The definition of "Daily Settlement Trigger" in
Section 1.01 shall be changed to "Weekly Settlement Trigger" and
amended to provide in its entirety as follows:
""Weekly Settlement Trigger" means the occurrence of
any of the following:
(a) The Consolidated Net Interest Coverage Ratio for
any period of four consecutive fiscal quarters, in each case
taken as one accounting period, ended on the last day of a
fiscal quarter set forth below, shall be less than the
amount set forth opposite such period below:
Fiscal Quarter Ratio
-------------- -----
December 31, 1996 3.00: 1.0
March 31, 1997 3.00: 1.0
June 30, 1997 3.00: 1.0
September 30, 1997 3.25: 1.0
December 31, 1997 3.25: 1.0
March 31, 1998 3.25: 1.0
June 30, 1998 3.25: 1.0
September 30, 1998 3.50: 1.0
December 31, 1998 3.50: 1.0
Thereafter 3.50: 1.0
(b) The Leverage Ratio at any time shall be greater
than the ratio set forth opposite the fiscal quarter most
recently ended as set forth below:
Fiscal Quarter Ratio
-------------- -----
December 31, 1996 4.25: 1.0
March 31, 1997 4.25: 1.0
June 30, 1997 4.25: 1.0
September 30, 1997 4.25: 1.0
December 31, 1997 4.25: 1.0
March 31, 1998 4.25: 1.0
June 30, 1998 4.25: 1.0
September 30, 1998 4.00: 1.0
December 31, 1998 4.00: 1.0
Thereafter 4.00: 1.0
(c) The Net Dilution Ratio shall be greater than 7%;
(d) The Default Ratio shall be greater than 7%;
(e) Any Event of Termination shall occur under Section
7.01(e) or (g) of this Agreement; or
(f) The Sellers shall have repurchased Receivables
(pursuant to indemnity provisions or otherwise) from the
Purchaser and/or the Purchaser s assignees in an aggregate
amount exceeding $17,500,000 in any Fiscal Year."
(d) All references in the Agreement to "Daily Settlement
Trigger" shall be amended to refer to "Weekly Settlement
Trigger".
(e) The definition of "Interco" in Section 1.01 shall be
amended to refer to "Furniture Brands International, Inc., a
Delaware corporation, formerly known as INTERCO INCORPORATED".
(f) In Section 1.02 (i) the reference to "Term Loans" shall
be deleted in its entirety and (ii) the reference to "Interco
Warrants" shall be amended to refer to "Furniture Brands
Warrants".
(g) Clause (j) of Section 5.01 shall be amended to provide
in its entirety as follows:
"(j) Weekly Settlement Trigger. From and after the
fifth day after the occurrence of a Weekly Settlement
Trigger, and so long as a Weekly Settlement Trigger is
continuing, on the same day of each week thereafter (or if
any such day is not a Business Day, on the immediately
following Business Day), (a) cause the Servicer to submit
weekly reports in form and substance satisfactory to the
Purchaser listing the aggregate Outstanding Balance of all
Receivables generated by each Seller on each Business Day
during the preceding week, (b) use its best efforts to cause
each Lock-Box Bank to submit weekly reports to the Purchaser
listing the aggregate amount of Collections received in the
Lock-Box Account(s) at such Lock-Box Bank on each Business
Day during the preceding week, and (c) cause all Collections
(and only Collections) to be deposited daily, from the Lock
-Box Accounts or other locations in which Collections are
received, into an account (the " Concentration Account")
maintained in a bank acceptable to the Purchaser in the name
of both the Purchaser and/or the Purchaser s assignee. No
funds in the Concentration Account shall be distributed to
or for the benefit of any Seller until the Purchaser and the
Purchaser s assignee (if any) each notifies the bank in
which the Concentration Account is located to release funds
therein to such persons. The funds in the Concentration
Account shall be invested in a manner acceptable to the
Purchaser and/or the Purchaser s assignee. If all events
constituting a Weekly Settlement Trigger shall have been
cured or shall no longer be continuing, and no Event of
Termination shall then exist, the Sellers and Servicer may
resume processing Collections and delivering reports as they
did immediately prior to the occurrence of a Weekly
Settlement Trigger."
2. Conditions Precedent. The effectiveness of this
Amendment is subject to the conditions precedent that the Agent
shall have received, on or before the date hereof, (i) a
certificate of the Secretary or Assistant Secretary of Lane,
Broyhill and Thomasville certifying that attached thereto is a
true and complete copy of the Bank Credit Agreement and the
Security Agreement referred to therein, each in form and
substance satisfactory to the Agent and each as amended and
restated as of September 6, 1996, (ii) the Intercreditor
Agreement as amended and restated as of September 6, 1996, in
form and substance satisfactory to the Agent, duly executed by
the parties thereto, and (iii) a confirmation as of September 6,
1996, in form and substance satisfactory to the Agent, of the
continued effectiveness of the Interco Agreement, duly executed
by Furniture Brands International, Inc. (f/k/a INTERCO
INCORPORATED).
3. Amendment of Bank Credit Agreement. Pursuant to clause
(f) of Section 5.03, the Purchaser hereby consents to the
amendment and restatement, as of the date hereof, of the Bank
Credit Agreement, in the form previously delivered to the
Purchaser. The reference in such clause (f) to clauses (a), (b),
(c) and (d) of the definition of Daily Settlement Trigger (now
Weekly Settlement Trigger) shall be amended to refer only to
clauses (a) and (b) of such definition.
4. Execution in Counterparts, Etc. This Amendment may be
executed in any number of counterparts, each of which when so
executed shall be deemed to be an original and all of which when
taken together shall constitute one and the same amendment. The
delivery of a signed signature page to this Amendment by telecopy
transmission shall constitute due execution and delivery of this
Amendment for all purposes.
5. Agreement in Full Force and Effect. Except as amended by
this Amendment, all of the provisions of the Agreement and all of
the provisions of all other documentation required to be
delivered with respect thereto shall remain in full force and
effect from and after the date hereof.
6. References to Agreement. From and after the date
hereof, (a) all references in the Agreement to "this Agreement",
"hereof", "herein", or similar terms and (b) all references to
the Agreement in each agreement, instrument and other document
executed or delivered in connection with the Agreement, shall
mean and refer to the Agreement, as amended by this Amendment.
7. Further Assurances. The parties hereto agree to execute
and deliver any and all further agreements, certificates and
other documents reasonably necessary to implement the provisions
of this Amendment.
8. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the law of the State of New York
without giving effect to the conflict of laws principles thereof.
IN WITNESS WHEREOF, the Sellers and the Purchaser have
caused this Amendment to be duly executed by their respective
officers thereunto duly authorized as of the day and year first
above written.
SELLERS: THE LANE COMPANY, INCORPORATED
By: Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
ACTION INDUSTRIES, INC.
By: Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
BROYHILL FURNITURE INDUSTRIES, INC.
By: Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
THOMASVILLE FURNITURE INDUSTRIES, INC.
By: Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Vice President
PURCHASER: INTERCO RECEIVABLES CORP.
By: Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: President
