EXHIBIT NO. 10.60
NINTH AMENDMENT AND CONSENT TO POSTPETITION
CREDIT AGREEMENT
THIS NINTH AMENDMENT AND CONSENT TO POSTPETITION CREDIT AGREEMENT, dated as
of March 5, 1999 (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, XXXXXX REINSURANCE CORPORATION, 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, Term Lender and
Overadvance Term Lender (defined herein) signatories hereto (collectively the
"LENDERS"), and BT COMMERCIAL CORPORATION, a Delaware corporation, acting in its
capacity as collateral agent and 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 to
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 Borrowers have requested that M.D. SASS CORPORATE RESURGENCE
PARTNERS, L.P. (together with any successors and permitted assigns, the
"OVERADVANCE TERM LENDER") extend credit by extending a term loan (the
"OVERADVANCE TERM LOAN") to the Borrowers in the original principal amount of
$10,000,000 to be evidenced by a promissory note (the "OVERADVANCE TERM NOTE"),
made by the Borrowers in favor of the Overadvance Term Lender.
C. The Borrowers, the Lenders and the Agent have agreed to amend the
Credit Agreement to, among other things, extend the Overadvance Term Loan on the
terms and subject to the conditions of this Amendment.
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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.
On the date each of the conditions set forth in SECTION 3 is satisfied by
the Borrowers (the "CLOSING Date"), the Credit Agreement is amended as follows:
1.1 The Credit Agreement is amended by adding Article 2C to the Credit
Agreement as follows:
ARTICLE 2C. OVERADVANCE 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, at any time prior to the Overadvance Maturity
Date and upon receipt of notice from the Agent that Excess Availability
is less than $12,000,000 (which amount shall include the amount set forth
in subsection (d) in the definition of Borrowing Base), the Overadvance
Term Lender will make a term loan (the "OVERADVANCE TERM LOAN") to the
Borrowers, as soon as reasonably practicable and in no event more than 10
Business Days after receiving notice from the Agent, in the original
principal amount of $10,000,000. The proceeds of the Overadvance Term
Loan will be immediately deposited with the Agent and, notwithstanding
the provisions of SECTION 4.11, will be applied by the Agent to pay down
the outstanding principal of the Revolving Loans on such date. The
Overadvance Term Loan shall be evidenced by an Overadvance 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 "BORROWING BASE" in its entirety and replacing it as follows:
BORROWING BASE means, at any time, the sum at such time of:
(a) the Fixed Asset Sublimit (which may be a negative number), PLUS
(b) eighty-five percent (85%) of Eligible Accounts Receivable, PLUS
(c) seventy-five percent (75%) of Eligible Inventory; provided that
the foregoing percentage may be adjusted by the Agent in the
exercise of its Permitted Discretion based upon appraisals of the
Borrowers' inventory prepared from time to time at the Agent's or
the Majority Lenders' direction, PLUS
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(d) solely for the purposes of accepting the borrowing of the
Overadvance Term Loan, $10,000,000 (the "OVERADVANCE TERM LOAN
AMOUNT"); provided, that, effective as of the earlier to occur of
(I) ten (10) Business Days after the date on which the
Overadvance Term Lender receives notice from the Agent that
Excess Availability is less than $12,000,000 or (II) the date on
which the proceeds of the Overadvance Term Loan are received by
the Agent for the account of the Debtors, the Overadvance Term
Loan Amount will be automatically and permanently reduced to zero
(-0-); and, provided, further, that, notwithstanding anything to
the contrary contained in this Agreement or any of the other
Credit Documents, (X) only the Overadvance Term Lender shall have
any obligation to fund the Overadvance Term Loan and (Y) prior to
the date on which the Overadvance Term Loan Amount is reduced to
zero pursuant to the foregoing proviso to this PARAGRAPH (D), the
Revolving Lenders shall have no obligation whatsoever to make any
Revolving Loan or other extension of credit under this Agreement
to the extent that, immediately before or after giving effect to
such Revolving Loan or extension of credit, Excess Availability
is less than $10,000,000, LESS
(e) the aggregate amount of the Borrowers' allowed professional fees
and disbursements to which the Postpetition Obligations and the
Prepetition Obligations may be subordinated pursuant to the
Interim Financing Order and the Permanent Financing Order
following a Default or an Event of Default;
PROVIDED, THAT so long as the LFC Funds Administrator has delivered a current
Borrowing Base Certificate to the Agent in accordance with the requirements of
SECTION 7.2, the Agent may rely on such Borrowing Base Certificate for
purposes of computing the amounts referred to in CLAUSES (B) and (C) above.
In addition, the Agent, in the exercise of its Permitted
Discretion, may (I) establish and increase or decrease reserves against
Eligible Accounts Receivable and Eligible Inventory, (II) reduce the advance
rates provided for in this definition, or restore such advance rates to any
level equal to or below the advance rates in effect as of the date of this
Credit Agreement, and (III) impose additional restrictions (or eliminate the
same) to the standards of eligibility set forth in the definitions of
"ELIGIBLE ACCOUNTS RECEIVABLE" and "ELIGIBLE INVENTORY." Notwithstanding
anything herein to the contrary, on and subsequent to the close of the
Sale/Leaseback Transaction, the Agent will not increase the advance rates
without receiving prior consent of the Majority Term Lenders and the
Overadvance Term Lender.
1.3 SECTION 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
"EXCESS AVAILABILITY" means an amount equal to (i) the lesser of
(a) the Revolving Line of Credit and (b) the Borrowing Base minus, in
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each case, the aggregate outstanding Letter of Credit Obligations minus
(ii) the aggregate outstanding principal amount of Revolving Loans (which may
be a negative amount to account for credit balances of cash).
1.4 SECTION 1.1 of the Credit Agreement is further amended by deleting
the definition of "EXPIRATION DATE" in its entirety and replacing it as follows:
EXPIRATION DATE means the earlier of (i) June 7, 1999 and (ii) the
date on which this Credit Agreement is terminated pursuant to SECTION 9.2(B).
1.5 SECTION 1.1 of the Credit Agreement is further amended by deleting
the definition of "FIXED ASSET SUBLIMIT" in its entirety and replacing it as
follows:
FIXED ASSET SUBLIMIT means an amount equal to $43,606,713; provided,
that such amount shall be automatically and permanently reduced (and may
thereby become a negative number or a greater negative number) on each date
on which an Asset Disposition (other than the Sale/Leaseback Transaction)
occurs with respect to any real property, other fixed assets or any leasehold
interest in real property of any Borrower, in an amount equal to (i) in the
case of any Asset Disposition of or with respect to any real property or any
leasehold interest in real property, the greater of (a) the Appraised Value
and (b) the Net Cash Disposition Proceeds thereof; (other than any Asset
Disposition with respect to the Borrowers' properties located in Colorado
Springs, Colorado; Springdale, Ohio; Denver, Colorado; or San Diego,
California; in which case, the amount of such reduction to the Fixed Asset
Sublimit shall be to equal the average of the Appraised Value and the Net
Cash Disposition Proceeds with respect to each such property) and (ii) in the
case of any Asset Disposition of or with respect to any other fixed assets
(including without limitation fixtures, furniture and equipment), twenty-five
percent (25%) of the Appraised Value thereof, provided that, no reduction of
the Fixed Asset Sublimit pursuant to this clause (ii) shall occur as a result
of the Borrowers' selling, transferring or otherwise disposing of obsolete or
worn out fixed assets with an aggregate Appraised Value of up to $1,800,000;
provided, further, that upon payment of all Net Cash Disposition Proceeds
from the Sale/Leaseback Transaction to the Agent the Fixed Asset Sublimit
shall be a negative number such that Excess Availability as of the date of
such payment shall be $10,000,000 plus the amount set forth in subsection (d)
of the definition of Borrowing Base and shall thereafter continue to be
reduced in the manner described in the first proviso of this definition in
respect of all future asset dispositions.
1.6 SECTION 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
OVERADVANCE TERM LENDER means the person identified on ANNEX II as the
"Overadvance Term Lender."
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1.7 SECTION 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
OVERADVANCE TERM LOAN has the meaning set forth in ARTICLE 2C.
1.8 SECTION 1.1 of the Credit Agreement is further amended by deleting
the definition of "REVOLVING LINE OF CREDIT" in its entirety and replacing it as
follows:
REVOLVING LINE OF CREDIT means the aggregate revolving line of credit
extended pursuant to this Credit Agreement by the Revolving Lenders to the
Borrowers for Revolving Loans and Letters of Credit, in an aggregate
principal amount at any time of up to (i) on the Closing Date and through and
including the day prior to the Sale/Leaseback Transaction closing date,
$192,356,250 less the aggregate outstanding principal amount of the Original
Term Loan and the Second Term Loan, as such amount may be reduced from time
to time pursuant to the terms and provisions hereof and (ii) on and
subsequent to the Sale/Leaseback Transaction closing date, $148,356,250 less
the aggregate outstanding principal amount of the Original Term Loan and the
Second Term Loan, as such amount may be reduced from time to time pursuant to
the terms and provisions hereof.
1.9 SECTION 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
SALE/LEASEBACK TRANSACTION means that certain transaction described in
the Side Letter dated as of March 2, 1999 from the Borrowers to the Agent.
1.10 SECTION 1.1 of the Credit Agreement is further amended by adding the
following definition to such section as follows:
OVERADVANCE TERM NOTE means the promissory note evidencing the
Overadvance Term Loan, substantially in the form of EXHIBIT C-3 as amended,
restated, supplemented or otherwise modified from time to time, and including
all notes issued in replacement or in substitution of the foregoing.
1.11 SECTION 1.1 of the Credit Agreement is amended by deleting the
definition of "LENDERS" in its entirety and replacing it as follows:
"LENDERS" means the Revolving Lenders and the Term Lenders (except, for
purposes of Section 9.3, Article 10 and Sections 11.2, 11.4, 11.5, 11.6, 11.7,
11.8, 11.9, 11.10, 11.14, 11.15 and 11.16, the term "Lenders" means the
Revolving Lenders, the Term Lenders and the Overadvance Term Lender).
1.12 SECTION 1.1 of the Credit Agreement is amended by adding the term
"Overadvance Term Note," immediately after the term "Notes" in the definition of
"CREDIT DOCUMENTS".
1.13 SECTION 1.1 of the Credit Agreement is amended by adding (i) the
term "Overadvance Term Loan" immediately after the term "Term Loan
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and (ii) the words "or the Overadvance Term Lender" immediately after the term
"Lenders", in each case appearing in the definition of "POSTPETITION
OBLIGATIONS".
1.14 SECTION 1.1 of the Credit Agreement is amended by adding the
following definition to such section as follows:
"OVERADVANCE MATURITY DATE" means the earlier of (i) September 30, 1999
or (ii) the Expiration Date.
1.15 SECTION 4.7(d) of the Credit Agreement is hereby amended by adding
the following sentence to such section as follows:
All cash not permitted under the Credit Agreement to be held by the
Borrowers shall be held by the Agent on behalf of the Borrowers and
distributed pursuant to the terms hereof. The Borrowers shall only be
permitted to use excess cash to the extent of any Excess Availability.
1.16 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.
1.17 The following Section 4.7B is hereby added to the Credit Agreement
as follows:
4.7B NO PERMITTED PREPAYMENT OF OVERADVANCE TERM LOAN.
Until payment in full of all Postpetition Obligations in respect of
Revolving Loans, Term Loans and Letter of Credit Obligations and termination
of the Revolving Commitments pursuant to the provisions hereof, the Borrowers
may not prepay or make any other payment or distribution of any kind (in
cash, securities or otherwise but excluding payments of accrued and unpaid
interest, fees and expenses) in respect of or in connection with the
Overadvance Term Loan at any time in whole or in part and all such principal
amounts otherwise distributable in respect of or in connection with the
Overadvance Term Loan shall be paid to the Agent for allocation to the
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Postpetition Obligations in respect of Revolving Loans, Letters of Credit
Obligations and Term Loans as provided herein until all such obligations are
indefeasibly paid in full in cash and the Revolving Commitments are fully
terminated.
1.18 SECTION 4.11 of the Credit Agreement is amended by deleting such
section in its entirety and replacing it as follows:
4.11 DISTRIBUTION AND APPLICATION OF COLLECTIONS AND OTHER AMOUNTS.
(a) So long as no Actionable Default has occurred and is continuing,
all amounts distributed to the Agent pursuant to SECTION 4 of the
Postpetition Collateral Agency Agreement for application to the
Postpetition Obligations shall be applied by the Agent in the
following order: FIRST, to the payment of any Fees, Expenses or
other Postpetition Obligations due and payable to the Agent under
any of the Credit Documents, including Agent Revolving Advances
and any other amounts advanced by the Agent on behalf of the
Revolving Lenders; SECOND, to the payment of any Fees, Expenses or
other Postpetition Obligations due and payable to the Issuing Bank
under any of the Credit Documents; THIRD, to the ratable payment
of any Fees, Expenses or other Postpetition Obligations due and
payable to the Revolving Lenders under any of the Credit Documents
other than those Postpetition Obligations specifically referred to
in this Section 4.11(A); FOURTH, to the ratable payment of any
Fees, Expenses or other Postpetition Obligations due and payable
to the Original Term Lenders and the Second Term Lenders under any
of the Credit Documents other than those Postpetition Obligations
specifically referred to in this Section 4.11(A); FIFTH, to the
ratable payment of interest due and payable on the Revolving Loans
to the Revolving Lenders; SIXTH, to the ratable payment of
principal due on the Revolving Loans to the Revolving Lenders;
SEVENTH, to the payment of interest due and payable on the
Original Term Loan and the Second Term Loan to the Original Term
Lenders and the Second Term Lenders; EIGHTH, to the payment of
principal due on the Original Term Loan and the Second Term Loan
to the Original Term Lenders and the Second Term Lenders; NINTH,
to the payment of any Fees, Expense or other Postpetition
Obligations due and payable to the Overadvance Term Lender under
any of the Credit Documents other than those Postpetition
Obligations specifically referred to in this SECTION 4.11(A);
TENTH, to the payment of interest due and payable on the
Overadvance Term Loan to the Overadvance Term Lender; and
ELEVENTH, to the payment of principal due on the Overadvance Term
Loan to the Overadvance Term Lender, it being understood and
agreed that, notwithstanding any acceleration of the maturity of
the Postpetition Obligations in respect of (i) the Original Term
Loan and the Second Term Loan pursuant to SECTION 9.2A or any
other provision of this Credit Agreement or any
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other Credit Document, no amounts shall be distributed to the Term
Lenders pursuant to the foregoing clause eighth if no Actionable
Default has occurred and is continuing until all Postpetition
Obligations owing to the Revolving Lenders have been indefeasibly
paid in full and the Revolving Commitments have been terminated
and (ii) the Overadvance Term Loan pursuant to SECTION 9.213 or
any other provision of this Credit Agreement or any other Credit
Document, no amounts shall be distributed to the Overadvance Term
Lender pursuant to the foregoing clause eleventh until all
Postpetition Obligations owing to the Revolving Lenders and the
Term Lenders have been indefeasibly paid in full and the Revolving
Commitments have been terminated.
(b) After an Actionable Default has occurred and is continuing, all
amounts distributed to the Agent pursuant to SECTION 4 of the
Postpetition Collateral Agency Agreement for application to the
Postpetition Obligations and the Prepetition Obligations shall be
applied by the Agent to the payment of the Postpetition
Obligations in the order prescribed in SECTION 4.11(A), except
that in such circumstance no payments shall be made pursuant to
(i) clauses fourth, seventh or eighth of SECTION 4.11(A) until all
Postpetition Obligations owing to the Revolving Lenders have been
indefeasibly paid in full and the Revolving Commitments have been
terminated and (ii) clauses ninth, tenth or eleventh of SECTION
4.11(A) until all Postpetition Obligations owing to the Revolving
Lenders and the Term Lenders have been indefeasibly paid in full
and the Revolving Commitments have been terminated.
1.19 SECTION 5.2 of the Credit Agreement is amended by adding a new
subsection (d) as follows:
(d) The Borrowers will have Excess Availability of at least
$10,000,000 after giving effect to such Revolving Loan or Letter
of Credit; provided, that if the Overadvance Term Loan is funded
on such date by the Overadvance Term Lender as set forth in
ARTICLE 2C, then the representation and warranty set forth in this
subsection (d) will not be applicable.
1.20 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 the period beginning on April 1, 1999 and ending on
the last day of April 1999, MINIMUM for such period shall be an amount
not less than negative (-)$500,000. For purposes herein, such MINIMUM
covenant shall be tested on May 18, 1999.
1.21 SECTION 8.2 of the Credit Agreement is amended by deleting such
section in its entirety and replacing it as follows:
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8.2 CAPITAL EXPENDITURES.
The Borrowers shall not make payments for Capital Expenditures in
the aggregate for all Borrowers in excess of $2,500,000 during the period
from March 5, 1999 to and including May 31, 1999.
1.22 SECTION 8.2A of the Credit Agreement is amended by deleting such
section in its entirety.
1.23 SECTION 8.18(a) of the Credit Agreement is amended by deleting the
terms "or the Bankruptcy Court order approving the amendment to this Credit
Agreement incorporating the Second Term Loan" after the terms "Permanent
Financing Order" and replacing such terms with the following: "or the Bankruptcy
Court orders approving any amendments to this Credit Agreement."
1.24 SECTION 9.1(1) of the Credit Agreement is amended by adding the
following terms "or the Bankruptcy Court orders approving any amendments to this
Credit Agreement" after the terms "Permanent Financing Order" wherever appearing
in such section.
1.25 SECTION 9.2A is hereby amended by deleting the terms "and by
delivery of written notice" appearing on the seventh and eighth lines thereof
and by deleting the term "from" and replacing such term with the term "and"
appearing on the eighth line thereof.
1.26 The following SECTION 9.2B is hereby added to the Credit Agreement
as follows:
9.2B ACCELERATION OF POSTPETITION OBLIGATIONS IN RESPECT OF OVERADVANCE
TERM LOAN
Upon the earlier of (i) the Overadvance Maturity Date or (ii) the
occurrence and during the continuance of any Event of Default under
SECTION 9.1(a), by reason of the Borrowers' failure to make any payment
of interest on the Overadvance Term Loan when the same shall become
payable, then, without prejudice to the rights of the Agent or
Overadvance Term Lender to enforce its claims against the Borrowers, upon
notice from the Overadvance Term Lender to the LFC Funds Administrator
and the Agent, all Postpetition Obligations in respect of the Overadvance
Term Loan shall be immediately due and payable without presentment,
demand, protest or any other action or obligation of the Agent or
Overadvance Term Lender; PROVIDED, THAT, notwithstanding the foregoing,
the Overadvance Term Lender may not accelerate the maturity of the
Overadvance Term Loan pursuant to this SECTION 9.2B nor exercise any
rights or remedies with respect hereto nor cause the Agent to exercise
any rights or remedies on behalf of the Overadvance Term Lender with
respect hereto (other than to enforce its rights under Section 4.11(a) in
accordance with the terms thereof) until all Postpetition Obligations
owing to the Revolving Lenders and the Term Lenders have been
indefeasibly paid in full and the Revolving Commitments and Term
Commitments have been terminated. In addition, the Overadvance Term
Lender, acting in its capacity as Overadvance Term Lender agrees that it
shall be bound by all, and shall not object to any, modifications,
extensions of maturity and
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amendments to the Credit Agreement executed by the Agent, Lenders,
Majority Lenders and/or Majority Term Lenders (as applicable) and that
none of the same shall require advance notice to, or the consent of, any
Overadvance Term Lender; provided, however, that no such modification,
extension, waiver or amendment shall (a) extend the maturity date of any
portion of the principal amount of or interest or fees payable to the
Overadvance Term Lender, provided that the principal maturity date may
be so extended to the earlier of (i) September 30, 1999 and (ii) the
date on which the Revolving Loans and the Terms Loans become due in
full, (b) reduce the principal amount of or the rate of interest or fees
payable on the Overadvance Term Loan, (c) release all or substantially
all of the Collateral, (d) alter, amend or otherwise impair the lien
granted hereunder to the Overadvance Term Lender or the priority thereof
or any priority granted to the Overadvance Term Lender under section 364
of the Bankruptcy Code or the Amendment Approval Order, (e) alter, amend
or otherwise impair the Overadvance Term Lender's rights under the
Amendment Approval Order, (f) increase the principal amount of the Term
Loans to an amount greater than $58,356,250 or (g) amend Article 2C or
this Section 9.2(B).
1.27 SECTION 10.6 of the Credit Agreement is amended by deleting such
section in its entirety and replacing it as follows:
10.6 INDEMNIFICATION OF AGENT.
To the extent the Agent is not reimbursed and indemnified by
the Borrowers, each Revolving Lender and Term Lender will reimburse and
indemnify the Agent, in proportion to its voting percentage from time to
time as a Revolving Lender and Term Lender hereunder, for and against all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in performing its duties
hereunder, in any way relating to or arising out of this Credit
Agreement. In addition, to the extent the Agent is not reimbursed and
indemnified by the Borrowers, the Overadvance Term Lender will reimburse
and indemnify the Agent, in an amount equal to a percentage of the total
amount sought by the Agent, the numerator of which, is the amount of the
Overadvance Term Loan at such time and the denominator of which, is the
amount of the Overadvance Term Loan at such time plus the amount of the
Revolving Commitments and the Term Loans at such time, for and against
all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses (including counsel fees and
disbursements) or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Agent in
performing its duties hereunder, in any way relating to or arising out of
this Credit Agreement; PROVIDED, THAT no Revolving Lender, Term Lender
shall be liable for any portion of such liabilities' obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the Agent's gross negligence or willful
misconduct.
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1.28 SECTION 11.11(B) of the Credit Agreement is amended by adding the
following term to clause (iii) "8.2" immediately after "7.14".
1.29 ANNEX I of the Credit Agreement is amended by replacing such annex
with the ANNEX I attached to this Amendment as EXHIBIT A.
1.30 ANNEX II of the Credit Agreement is amended by replacing such annex
with the ANNEX II attached to this Amendment as EXHIBIT B.
1A. AMENDMENT TO SECOND TERM NOTE.
The Second Term Note is hereby amended by deleting the terms
"and all Make-Whole Premiums payable to the Second Term Lenders,"
appearing in the second paragraph thereof.
2. CONSENT.
2.1 OVERADVANCE TERM LOAN. On the Closing Date, the Agent and each Lender
consents to the extension of the Overadvance Term Loan by the Overadvance Term
Lender in accordance with the terms of the Credit Agreement, as amended by this
Amendment. The Agent and each Lender acknowledge that the Overadvance Term Loan
and all interest, fees, costs and expenses in respect thereof shall be secured
by an interest in the Collateral PARI passu and pro rata with the Term Loans and
the term "Secured Obligations" as used in the Postpetition Collateral Agency
Agreement and the Postpetition Security Agreement shall include the obligations
of the Borrowers under the Credit Agreement with respect to the Overadvance Term
Loan and all interest, fees, costs and expenses in respect thereof PROVIDED,
however, that, notwithstanding anything to the contrary contained herein or in
the Credit Agreement, no principal payment or other distribution of any kind (in
cash, securities or otherwise but excluding payments of accrued and unpaid
interest, fees and expenses) shall be made in respect of or in connection with
the Overadvance Term Loan at any time in whole or in part, and all such
principal amounts otherwise distributable in respect of or in connection with
the Overadvance Term Loan shall be paid to the Agent for allocation to the
Postpetition Obligations in respect of Revolving Loans, Letters of Credit
Obligations and Term Loans as provided herein, until all such Postpetition
Obligations owing are indefeasibly paid in full in cash and the Revolving
Commitments are fully terminated. The obligations of the Borrowers under the
Credit Agreement with respect to the Overadvance Term Loan and all interest,
fees, costs and expenses in respect thereof 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 in the opinion
of the Overadvance Term Lender to so secure the Overadvance Term Loan and all
interest, fees, costs and expenses in respect thereof.
0 2.2 UNEXPIRED LEASES. On the Closing Date, the Agent and each Lender
consents to extending the Borrowers' time to assume or reject unexpired leases,
pursuant to section 365(d)(4) of the Bankruptcy Code, through July 7, 1999.
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2.3 SALE/LEASEBACK TRANSACTION. On or prior to the date of the hearing at
which the Borrowers will seek approval of the Bankruptcy Court to enter into the
Sale/Leaseback Transaction the Borrowers shall request the Agent and the
Majority Term Lenders to consent to the Borrowers entering into such
transaction, such consent shall not be unreasonably withheld. At such time that
the Agent and the Majority Term Lenders provide the Borrowers with consent to
enter into the Sale/Leaseback Transaction, no further action will be required
under the Credit Agreement.
2.4 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.
3. CONDITIONS PRECEDENT.
This Amendment becomes effective upon satisfaction of the
following conditions:
3.1 AMENDMENT APPROVAL ORDER. This Amendment has been approved by the
Bankruptcy Court pursuant to an order (the "AMENDMENT APPROVAL ORDER"), which
order is in full force and effect and has not been reversed, modified, amended,
appealed or stayed. The Agent, the Majority Term Lenders and the Overadvance
Term Lender shall have been satisfied with the form and substance (and the
timing of the notice) of the motion for the entry of the Amendment Approval
Order. In addition, the Agent, the Majority Term Lenders and the Overadvance
Term Lender shall have been satisfied with the form and substance of the
Amendment Approval Order.
3.2 365(d)(4) APPROVAL ORDER. The Borrowers have obtained an order of the
Bankruptcy Court (the "365(d)(4) APPROVAL ORDER") extending the Borrowers' time
to assume or reject unexpired leases, pursuant to section 365(d)(4) of the
Bankruptcy Code, through July 7, 1999, which order is in full force and effect
and has not been reversed, modified, amended, appealed or stayed provided,
however that such order need to apply to (I) any unexpired lease that has an
Appraised Value equal to or less than zero; (II) any unexpired lease that has
been assumed 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 a Debtor the right to subsequently assign such
unexpired lease under section 365(f) of the Bankruptcy Code without, among other
things, the consent of the relevant counterparties to such unexpired lease; or
(III) leases with respect to the following locations of the respective Debtors:
South San Francisco, California, San Leandro, California, Garden City (Roosevelt
Field), New York (Ground Lease), Springdale, Ohio, Langhorne, Pennsylvania,
Falls Church (Fairfax), Virginia and Manchester (South St. Louis), Missouri,
provided, that the Debtors shall have moved to assume such leases no later than
March 2, 1999, the motion seeks an order of the Bankruptcy Court (in a form
similar to comparable orders previously entered) which specifically reserves for
the Debtors the right to subsequently assign such unexpired leases under SECTION
365(F) of the Bankruptcy Code, without, among other things, the consent of the
relevant counterparties to such unexpired leases. The Agent and the Majority
Term Lenders shall have been satisfied with the form and substance (and the
12
timing of the notice) of the motion for the entry of the 365(d)(4) Approval
Order. Furthermore, the Agent and the Majority Term Lenders shall have been
satisfied with the form and substance of the 365(d)(4) Order. Unless the Agent
and the Majority Term Lenders agree otherwise, the 365(d)(4) Approval Order
shall have become final and non-appealable.
3.3 FEES AND EXPENSES. The Agent and the Lenders shall have been paid a
closing fee in the amount of $150,000. The Majority Term Lenders shall have been
paid such fees in such amounts and on such terms as provided for in a side
letter from the Borrowers to the Majority Term Lenders. For all purposes under
the Credit Agreement, as amended by this Amendment, any deferred portion of such
fees shall constitute Postpetition Obligations owed to the Term Lenders pursuant
to the Credit Agreement, as amended by this Amendment. Furthermore, the Agent,
the Revolving Lenders, the Term Lenders and the Overadvance Term Lender shall
have been reimbursed for all fees and expenses (including reasonable attorneys'
fees and expenses) incurred in connection with the preparation of this
Amendment. On and after the Closing Date of this Amendment, the Borrowers will
reimburse only the expenses of the Overadvance Term Lender that relate to the
negotiation, documentation, administration and enforcement of this Amendment.
3.4 DOCUMENTS. The Agent has received all of the following, each duly
executed and dated as of the Closing Date (or such other date as is satisfactory
to the Agent) in form and substance satisfactory to the Agent:
(a) NINTH AMENDMENT. Ten copies of this Amendment executed by
the LFC Funds Administrator, the Borrowers, the Agent and
all Lenders;
(b) OVERADVANCE TERM NOTE. The Overadvance Term Note,
substantially in the form of Exhibit C-2 to the Credit
Agreement (to be dated the date of funding of the
Overadvance Term Loan), made by the Borrowers in favor of
the Overadvance Term Lender;
(c) AMENDMENT APPROVAL ORDER AND 365(D)(4) APPROVAL ORDER. A
copy of the Amendment Approval Order and the 365(d)(4)
Approval Order;
(d) REVOLVING ASSIGNMENT AND ASSUMPTION AGREEMENTS. The
Revolving Assignments and Assumption Agreements,
substantially in the form of Exhibit G-I to the Credit
Agreement (dated as of the Closing Date), made by such
applicable Revolving Lenders; and
(e) OTHER. Such other documents as the Agent may reasonably
request.
4. 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:
13
4.1 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).
4.2 EVENTS OF DEFAULT. No Default or Event of 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.
4.3 ENFORCEABILITY. Upon approval by the Bankruptcy Court (as
contemplated by SECTIONS 3.1 AND 3.2), 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.
4.4 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
SECTIONS 3.1 AND 3.2), except such consents and approvals as have been obtained.
5. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER CREDIT
DOCUMENTS.
5.1 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 a
reference to the Credit Agreement as amended by this Amendment or any part of
this Amendment.
5.2 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.
6. 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.
14
7. 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]
15
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
-----------------------------------
16
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 X. 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
-----------------------------------
17
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: Principal
-----------------------------------
18
REVOLVING LENDERS:
BT COMMERCIAL CORPORATION, a Delaware
corporation in its respective capacities
as Revolving Lender and Collateral Agent
By: /s/ XXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------------
Title: Principal
-----------------------------------
FINOVA CAPITAL CORPORATION, in its
capacity as Revolving Lender
By: /s/ XXXXX XXXXXXXX
--------------------------------------
Name: Xxxxx Xxxxxxxx
------------------------------------
Title: AVP
-----------------------------------
XXXXXX FINANCIAL, INC., in its capacity
as Revolving Lender
By: /s/ XXXX XXXX
--------------------------------------
Name: Xxxx Xxxx
------------------------------------
Title: SVP
-----------------------------------
LASALLE NATIONAL BANK, in its capacity as
Revolving Lender
By: /s/ XXXXXXXXXXX X. XXXXXXXX
--------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxxxx
------------------------------------
Title: Sr. VP
-----------------------------------
CONGRESS FINANCIAL CORPORATIONN
(CENTRAL), in its capacity as
Revolving Lender
By: /s/ XXXXXX XXXXXXXXX
--------------------------------------
Name: Xxxxxx Xxxxxxxxx
------------------------------------
Title: Vice President
-----------------------------------
19
TRANSAMERICA BUSINESS CREDIT CORPORATION,
in its capacity as Revolving Lender
By: /s/ X. X. XXXXX
--------------------------------------
Name: X. X. Xxxxx
------------------------------------
Title: SVP
-----------------------------------
TERM LENDERS:
AG CAPITAL FUNDING PARTNERS, L.P., in its
capacity as Second Term Lender
By: Xxxxxx Xxxxxx & Co., L.P., as
Investment Advisor
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Authorized Signatory
-----------------------------------
SILVER OAK CAPITAL L.L.C., in its
capacity as Term Lender
By: /s/ XXXXXXX X. XXXXXXX
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Authorized Signatory
------------------------------------
M.D. SASS CORPORATE RESURGENCE PARTNERS,
L.P., as Overadvance Term Lender
By: /s/ XXXXXX X. XXXXXXXXX
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
------------------------------------
Title: Senior Vice President
-----------------------------------
20
EXHIBIT A
ANNEX I
TO
POSTPETITION CREDIT AGREEMENT
DATED AS OF SEPTEMBER 5, 1997
LIST OF REVOLVING LENDERS/REVOLVING COMMITMENT
AMOUNTS; AND APPLICABLE LENDING OFFICES
1. BT COMMERCIAL CORPORATION
000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
REVOLVING COMMITMENT AMOUNT: $23,517,311
DOMESTIC LENDING OFFICE: 000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
LIBOR LENDING OFFICE: 000 Xxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
2. LA SALLE NATIONAL BANK
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
REVOLVING COMMITMENT AMOUNT: $23,489,818
DOMESTIC LENDING OFFICE: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
LIBOR LENDING OFFICE: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
3. CONGRESS FINANCIAL CORPORATION
000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
REVOLVING COMMITMENT AMOUNT: $20,318,469
DOMESTIC LENDING OFFICE: 000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
LIBOR LENDING OFFICE: 000 Xxxxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
21
4. XXXXXX FINANCIAL, INC.
000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
REVOLVING COMMITMENT AMOUNT: $22,300,000
DOMESTIC LENDING OFFICE: 000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
LIBOR LENDING OFFICE: 000 Xxxx Xxxxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
5. TRANSAMERICA BUSINESS CREDIT CORPORATION
0000 X. Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
REVOLVING COMMITMENT AMOUNT: $16,374,402
DOMESTIC LENDING OFFICE: 0000 X. Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
LIBOR LENDING OFFICE: 0000 X. Xxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
6. FINOVA CAPITAL CORPORATION
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
REVOLVING COMMITMENT AMOUNT: $23,000,000
DOMESTIC LENDING OFFICE: 000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
LIBOR LENDING OFFICE: 000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
22
7. SILVER OAK CAPITAL L.L.C.
c/o Xxxxxx, Xxxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
REVOLVING COMMITMENT AMOUNT: $5,000,000
DOMESTIC LENDING OFFICE: c/o Xxxxxx, Xxxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
LIBOR LENDING OFFICE: c/o Xxxxxx, Xxxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
23
ANNEX II
TO
POSTPETITION CREDIT AGREEMENT
DATED AS OF SEPTEMBER 5, 1997
LIST OF TERM LENDERS AND TERM COMMITMENTS 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. AG CAPITAL FUNDING PARTNERS, L.P.
c/o Xxxxxx, Xxxxxx & Company
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Term Commitment Amount: $22,000,000
OVERADVANCE TERM LENDER:
1. M.D. SASS CORPORATE RESURGENCE
PARTNERS, L.P.
00 Xxx Xxxx Xxxxxx
Xxxxx Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Term Commitment Amount: $10,000,000
24
