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[EXECUTION COPY]
AMENDMENT NO. 6 and CONSENT
to
LOAN AND SECURITY AGREEMENT
dated as of July 12, 1996
THIS AMENDMENT NO. 6 AND CONSENT dated as of May 15, 1998
(this "Amendment") is made by XXXX FURNITURE, INC., a North Carolina
corporation, AMERICAN FURNITURE COMPANY, INCORPORATED, a Virginia corporation,
XXXXXXX FURNITURE CO., a Mississippi corporation, XXXXXXX-XXXXXX COMPANY, INC.,
a North Carolina corporation, XXXX CONTRACT SALES CORPORATION, a North Carolina
corporation, XXXX INTERNATIONAL SALES CORP., a Barbados corporation, XXXX
TRANSPORTATION, INC., a North Carolina corporation, PENNSYLVANIA HOUSE, INC., a
North Carolina corporation, XXXXXXX FURNITURE, INC., a North Carolina
corporation (the "Borrowers"), NATIONSBANK, N.A., a national banking association
("NationsBank"), FLEET CAPITAL CORPORATION, a Rhode Island corporation ("Fleet",
and together with NationsBank, the "Co-Agents"), the financial institutions
parties to the Loan Agreement (as hereinafter defined) from time to time (the
"Lenders"), and NATIONSBANK as administrative agent for the Lenders (the
"Administrative Agent").
Preliminary Statements
The Borrowers, the Lenders, the Co-Agents and the
Administrative Agent are parties to a Loan and Security Agreement dated as of
July 12, 1996, as amended by Amendment No. 1 dated as of August 15, 1996,
Amendment No. 2 dated as of October 10, 1996, Amendment No. 3 dated as of
December 23, 1996, Amendment No. 4 dated as of July 24, 1997 and Amendment No. 5
dated as of October 1, 1997 (said Agreement, as so amended, the "Loan
Agreement"; terms defined therein and not otherwise defined herein being used
herein as therein defined).
The Borrowers have requested, and the Lenders and the
Administrative Agent have agreed, upon and subject to all of the terms,
conditions and provisions of this Amendment, to modify certain provisions of the
Loan Agreement as hereinafter set forth in order to extend the term of the Loan
Agreement, reduce certain rates of interest and commitment fees payable, modify
certain reporting and financial covenants, permit the sale of the stock of Xxxxx
Xxxxxx International, Inc. (formerly known as BJCL, Inc.) (the "BJII Stock")
which is pledged to the Administrative Agent as Collateral and to make certain
other modifications to the Loan Agreement.
Accordingly, in consideration of the Loan Agreement, the Loans
made by the Lenders and outstanding thereunder, the mutual promises hereinafter
set forth and other good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:
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Section 1. Amendments to Loan Agreement. The Loan Agreement is
hereby amended, subject to the provisions of Section 3 hereof, by
(a) amending Section 1.1 Definitions by
(i) amending the definition "Applicable Margin" appearing
therein by deleting the phrase "beginning after delivery of the audited
financial statements of Xxxx and its Consolidated Subsidiaries for
Fiscal Year 1996" appearing therein and substituting therefor the
phrase "beginning on the Amendment No. 6 Effective Date";
(ii) amending the definition "Termination Date" appearing
therein by deleting the date "July 12, 1999" appearing therein and
substituting therefor the date "July 12, 2000"; and
(iii) adding the following definitions to read in their
entirety as follows:
"Amendment No. 6 Effective Date" means the date on
which Amendment No. 6 and Consent dated as of May 15,
1998, to this Agreement became effective in
accordance with its terms.
"Collateral Availability" means the amount determined
pursuant to clause (b) of the definition "Borrowing
Base".
"Minimum Availability Requirement" means either
(i) Revolving Credit Availability in excess of
$15,000,000 or (ii) Revolving Credit Availability of
at least $7,500,000 and additional Collateral
Availability in excess of the Revolving Credit
Facility, which, when added to the Revolving Credit
Availability, exceeds $15,000,000.
(b) amending Section 5.2(d) Letter of Credit Fees by deleting the
figure "1%" appearing therein and substituting therefor the figure "1/2 of 1%".
(c) amending Section 5.10 Prepayment Fee in its entirety to read
as follows:
SECTION 5.10. Prepayment Fee. If the Borrowers prepay the
Loans in whole and terminate this Agreement prior to the Termination
Date, the Borrowers shall pay to the Administrative Agent for the
Ratable benefit of the Lenders on such date of termination, as
liquidated damages and compensation for the costs of making funds
available to the Borrowers under this Agreement, and not as a penalty,
an amount equal to the percentage amount specified below for the Loan
Year in which such prepayment is made multiplied by the average total
principal amount of Loans outstanding during the 12 Consecutive Fiscal
Months next preceding such early termination date:
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Loan Year Percent
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1 2%
2 1%
3 1/4 of 1%
4 1/8 of 1%
PROVIDED, that for any termination made by the Borrowers in the fourth
Loan Year, the prepayment fee determined as set forth above shall be
reduced by the ratio (expressed as a percentage) of the number of whole
months then elapsed in said Loan Year to 12.
(d) amending Section 11.1 Financial Statements by amending clause
(b) appearing therein by inserting the phrase "AND PROVIDED FURTHER, that, for
so long as the Borrowers maintain the Minimum Availability Requirement, the
Borrowers shall be required to furnish only quarterly financial statements"
immediately before the period at the end thereof.
(e) amending Section 12.1(a) Minimum Net Worth by inserting the
following proviso at the end thereof:
PROVIDED, that, from and after the Amendment No. 6 Effective
Date, so long as the Borrowers maintain the Minimum Availability
Requirement, the Borrowers shall not be required to comply with the
provisions of this SECTION 12.1(a).
(f) adding a new Section 16.11(e) to read in its entirety as
follows:
(e) without limiting the foregoing, if at any time the
Borrowers shall fail to maintain the Minimum Availability Requirement,
the Administrative Agent and the Required Lenders may, by notice to the
Borrowers, reinstate the provisions of SECTIONS 11.1(b) with respect to
monthly financial reports for months other than the last month of any
Fiscal Quarter and 12.1(a).
(g) deleting therefrom Annex B attached thereto and substituting
therefor a new Annex B in the form attached hereto as EXHIBIT 1.
Section 2. Sale of Stock. The Lenders hereby agree to permit
the sale by the Borrowers of the BJII Stock for an amount not less than
$2,000,000. The Borrowers have informed the Administrative Agent that it is
anticipated that Capital Expenditures during the six-month period following the
expected date of closing of such sale will exceed such sale price for the BJII
Stock. Accordingly, the proceeds of such sale shall be paid to the
Administrative Agent, for the Ratable benefit of the Lenders, and shall be
applied to repay outstanding Revolving Credit Loans and an additional reserve in
the same amount shall be established and maintained against the Borrowing Base
as provided for in Section 5.9(a) of the Loan Agreement and in accordance with
the provisions thereof, and the stock shall be released from the Security
Interest and delivered to the purchaser against payment therefor.
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Section 3. Effectiveness of Amendment. This Amendment shall
become effective (the "Amendment Effective Date") as of the date hereof, on the
date on which the Administrative Agent shall have received the following:
(a) this Amendment duly executed and delivered by each
Borrower and each Lender;
(b) a certificate of the Secretary of each Borrower as to the
articles of incorporation and by-laws of each Borrower, all corporate action,
including shareholder approval, if necessary, taken by each Borrower or its
shareholders to authorize the transactions contemplated by this Amendment and
the incumbency of officers of each Borrower, each as in effect on the Amendment
Effective Date;
(c) a certificate of the President or Executive Vice President
of XXXX and of the President or a Vice President of each other Borrower stating
that, to the best of his knowledge and based on an examination sufficient to
enable him to make an informed statement, (a) both with and without giving
effect to Amendment, all of the representations and warranties made or deemed to
be made under the Loan Agreement are true and correct in all material respects
as of the Amendment Effective Date, and (b) both with and without giving effect
to this Amendment, no Default or Event of Default exists;
(d) a Borrowing Base Certificate prepared as of the last day
of the Fiscal Month immediately preceding the Amendment Effective Date, duly
executed and delivered by the chief financial officer of XXXX, demonstrating
Collateral Availability (as defined in the Loan Agreement, as amended by this
Amendment) in excess of the aggregate principal amount of Revolving Credit Loans
then outstanding of not less than $15,000,000, together with such additional
evidence of such Collateral Availability as the Administrative Agent shall
require;
(e) a signed opinion of Xxxxxxxxxx Xxxxxxxx, LLP, counsel for
the Borrowers, opining as to such matters in connection with this Amendment as
the Administrative Agent or its counsel or any Lender may reasonably request;
and
(f) such other documents, agreements, certificates or other
instruments in connection with this Amendment as the Administrative Agent may
reasonably request.
Section 4. Effect of Amendment. From and after the
effectiveness of this Amendment, all references in the Loan Agreement and in any
other Loan Document to "this Agreement," "the Loan Agreement," "hereunder,"
"hereof" and words of like import referring to the Loan Agreement, shall mean
and be references to the Loan Agreement as amended by this Amendment. Except as
expressly amended hereby, the Loan Agreement and all terms, conditions and
provisions thereof remain in full force and effect and are hereby ratified and
confirmed. The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender or the Administrative Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
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Section 5. Representations and Warranties. The Borrowers each
hereby represent and warrant to the Lender that each of the representations and
warranties set forth in the Loan Documents is true and correct in all material
respects as of the date hereof both before and after giving effect to this
Amendment, and shall survive the delivery of this Amendment.
Section 6. Counterpart Execution; Governing Law.
(a) Execution in Counterparts. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
(b) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Georgia.
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their respective officers thereunto duly authorized,
as of the date first above written.
BORROWERS:
XXXX FURNITURE, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Executive Vice President
AMERICAN FURNITURE COMPANY,
INCORPORATED
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXXXXX FURNITURE CO.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXXXXX-XXXXXX COMPANY, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXX CONTRACT SALES CORP.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
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PENNSYLVANIA HOUSE, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXXXXX FURNITURE, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
XXXX TRANSPORTATION, INC.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
President
XXXX INTERNATIONAL SALES CORP.
By:___________________________
Xxxxxxx X. Xxxxxxxxx
Vice President
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AGENTS/LENDERS:
NATIONSBANK, N.A., as Administrative
Agent, a Co-Agent and as a Lender
By:___________________________
Xxxxxx X. Xxxxxxxx, Xx.
Vice President
FLEET CAPITAL CORPORATION, as a
Co-Agent and as a Lender
By:___________________________
Name:
Title:
BANKAMERICA BUSINESS CREDIT, INC.,
as a Lender
By:___________________________
Name:
Title:
THE CIT GROUP/BUSINESS CREDIT,
INC., as a Lender
By:___________________________
Name:
Title:
SANWA BUSINESS CREDIT CORPORATION,
as a Lender
By:___________________________
Name:
Title:
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BANKBOSTON, N.A., as a Lender
By:___________________________
Name:
Title:
CREDITANSTALT CORPORATE FINANCE,
INC., as a Lender
By:___________________________
Name:
Title:
By:___________________________
Name:
Title:
BRANCH BANKING AND TRUST COMPANY,
as a Lender
By:___________________________
Name:
Title:
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EXHIBIT 1
to Amendment
ANNEX B
APPLICABLE MARGINS
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Eurodollar
Total Debt Rate Eurodollar Prime Rate
Coverage Revolving Rate Term Revolving Prime Rate Commitment
Rate Credit Loans Loans Credit Loans Term Loans Fee
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>5 250 250 150 150 .50
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>4.253.53
