EXHIBIT NO. 10.58
EIGHTH AMENDMENT AND CONSENT TO POSTPETITION
CREDIT AGREEMENT
THIS EIGHTH AMENDMENT AND CONSENT TO POSTPETITION CREDIT AGREEMENT,
dated as of September 18, 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"), AG CAPITAL FUNDING PARTNERS, L.P. (together with
any successors and permitted assigns, the "TERM 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 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 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 AG CAPITAL FUNDING PARTNERS, L.P.
(together with any successors and permitted assigns, 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 $22,000,000 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, the Lenders and the Agent have agreed to amend the
Credit Agreement to extend the Second Term Loan on the terms and subject to the
conditions of this Amendment.
1
E. The Borrowers have requested that the Lenders and the Agent consent
to the extension of the Second Term Loan on the terms and subject to the
conditions of this Amendment.
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 4 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 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 24, 1998, the Second Term
Lenders agree to extend a term loan to the Borrowers in the original
principal amount of $22,000,000 (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
September 1, 1997 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 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
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
2
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; PROVIDED, that no Appraised Value shall be less than zero.
1.3 Section 1.1 of the Credit Agreement is further amended by adding the
following terms after the term "exchange" and immediately preceding the term
"liquidation" in the definition of "ASSET DISPOSITION":
lease, sublease, rejection under Section 365 of the Bankruptcy
Code of any lease or sublease,
1.4 Section 1.1 of the Credit Agreement is further amended by adding the
following parenthetical immediately after the term "Fixed Asset Sublimit" in
clause (a) of the definition of "BORROWING BASE":
(which may be a negative number)
1.5 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.
1.6 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 $90,000,000;
provided, that such amount shall be automatically and permanently
reduced (and may thereby become a negative number) on each date on which
an Asset Disposition 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 Appraised Value thereof, 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.
3
1.7 Section 1.1 of the Credit Agreement is further amended by adding the
term "sublease," after the term "lease" and immediately preceding the term
"conditional sale" in the definition of "LIEN".
1.8 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 Sates of America at a discount rate
equal to 7.00% per annum applied on a monthly basis.
1.9 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."
1.10 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.
1.11 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."
1.12 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.
1.13 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.
1.14 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.
1.15 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
4
notes issued in replacement of, or in substitution or exchange for, any
of the foregoing.
1.16 Article 2A of the Credit Agreement is amended by deleting such
article in its entirety and replacing it as follows:
ARTICLE 2A. ORIIGINAL 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 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.
1.17 Section 4.7(d) of the Credit Agreement is amended by deleting such
subsection in its entirety and replacing it as follows:
(d) Upon any Asset Disposition, the Fixed Asset Sublimit shall be
reduced by the amount prescribed in the definition of "Fixed Asset
Sublimit" set forth in Article 1 and may thereby be reduced below zero
(-0-) to a negative number. In addition, after the Fixed Asset Sublimit
has been reduced to zero (-0-), the Revolving Commitment of each
Revolving Lender shall be reduced upon any Asset Disposition by such
Revolving Lender's Proportionate Share of the amount by which the Fixed
Asset Sublimit has been reduced below zero (-0-) under the definition of
"Fixed Asset Sublimit." After all the Revolving Commitments have been
reduced to zero (-0-) and all Letter of Credit Obligations have been
cash collateralized in the manner set forth in Section 9.2(c), the Net
Disposition Proceeds of any Asset Disposition shall be applied to repay
the outstanding Postpetition Obligations relating to the Term Loan.
1.18 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
5
prepayment, upon acceleration or otherwise), the Borrowers shall pay the
Make-Whole Premium to the Second Term Lenders.
1.19 Section 8.6 of the Credit Agreement is amended by (i) adding the
term "sublease," after the term "lease" and immediately preceding the term
"assign" and (ii) deleting the term "dispositions" in clause (iii) of such
section and replacing such term with the term "assignments."
1.20 Section 8.18(a) of the Credit Agreement is amended by (i) deleting
the term "of" after the term "Interim Financing Order" and replacing such term
with "," and (ii) adding 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."
1.21 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 (in each case, other than a lease that has
an Appraised Value equal to zero or other than a contract whose
assumption or rejection will not effect the value of any Collateral)
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.
1.22 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
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
6
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 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 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. Such notice shall be due and sufficient notice of such
request under the circumstances unless the landlord agrees to extend the
period for curing the default or assuming the lease for any longer
period reasonably requested by the landlord to oppose the relief
requested in the direction. Notwithstanding anything to the contrary
contained herein, this Section 9.2(e) shall not apply to any lease that
has an Appraised Value of zero or to any contract whose assumption or
rejection will not effect the value of any Collateral.
(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 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. Such notice shall
be due and sufficient notice of such request under the circumstances
unless the landlord agrees to extend the period for curing the default
or assuming the lease for any longer period reasonably requested by the
landlord to oppose the relief requested in the direction.
Notwithstanding anything to the contrary contained herein, this Section
9.2(f) shall not apply to any lease that has an Appraised Value of zero
or to any contract whose assumption or rejection will not effect the
value of any Collateral.
1.23 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
any principal amount of the Second Term Loans paid for any reason prior
to March 5, 1999) to the Second Term Lenders.
7
1.24 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.
1.25 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), (E) or
(F) or 11.8(C) or (E), of this Credit Agreement and
1.26 Annex II of the Credit Agreement is amended by replacing such annex
with the ANNEX II attached to this Amendment as EXHIBIT A.
2. CONSENT.
2.1 SECOND TERM LOAN. On the Closing Date, the Agent and each Lender
consents to the extension of the Second Term Loan by the 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.
2.2 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. AGREEMENTS OF THE BORROWERS.
3.1 USE OF PROCEEDS. The proceeds from the Second Term Loan will be used
only to prepay outstanding Revolving Loans under the Credit Agreement.
8
3.2 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.
3.3 SEVENTH AMENDMENT. The Borrowers and the Lenders agree that Sections
1 and 2.1 of the Seventh Amendment and Consent to Postpetition Credit Agreement
dated as of September 3, 1998, among the Borrowers, the Lenders and the Agent
are superceded by this Amendment and will have no further force and effect.
3.4 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.
4. CONDITIONS PRECEDENT.
This Amendment becomes effective upon satisfaction of the following
conditions:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Borrowers contained in this Amendment are true and correct as of the
Closing Date.
4.2 AMENDMENT APPROVAL ORDER. 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.
4.3 BANKRUPTCY COURT ORDER. 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.
4.4 DUE DILIGENCE. 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.
4.5 FEES AND EXPENSES. 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.
9
4.6 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) EIGHTH AMENDMENT. Ten copies of this Amendment executed by the LFC
Funds Administrator, the Borrowers, the Agent and all Lenders;
(B) SECOND TERM NOTES. Second Term Notes, substantially in the form of
Exhibit C-2 to the Credit Agreement (dated as of the Closing Date),
made by the Borrowers in favor of the Second Term Lenders;
(C) AMENDMENT APPROVAL ORDER. A copy of the Amendment Approval Order;
and
(D) OTHER. Such other documents as the Agent or the Second Term Lenders
may reasonably request.
5. 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:
5.1 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).
5.2 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.
5.3 ENFORCEABILITY. Upon approval by the Bankruptcy Court (as
contemplated by SECTION 4.1(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.
5.4 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 4.1(B)), except such consents and approvals as have been obtained.
5.5 NO PREPETITION OBLIGATIONS OUTSTANDING. As of the Closing Date,
there are no Prepetition Obligations outstanding under the Credit Agreement.
5.6 MATERIAL CONTRACTS. SCHEDULE B, PART 6.19, as amended by the
information contained on EXHIBIT C to this Amendment, contains a true, correct
and complete list of all the Material Contracts in effect on the Closing Date.
Except as described on SCHEDULE B, PART 6.19, as amended by the information
contained on EXHIBIT C 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 Closing Date. As of the 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 C to this Amendment, no defaults currently exist thereunder by any
Borrower or Subsidiary of a Borrower that is a party
10
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 5.6 will survive the Closing Date and that if such
representations and warranties are false or misleading in any material respect
on the Closing Date, an Event of Default will have occurred under Section 9.1(c)
of the Credit Agreement.
6. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER CREDIT
DOCUMENTS.
6.1 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.
6.2 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.
7. 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.
8. 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]
11
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. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
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. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE INCORPORATED, a Delaware corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE REALTY CORPORATION, a Florida corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: President
------------------------------------------
12
XXXXXX SHOPPING SERVICE, a Florida corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE COMPANY OF THE MIDWEST, INC., a Colorado
corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE COMPANY OF THE PACIFIC, INC., a California
corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE COMPANY OF WASHINGTON, INC., a Washington
corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXXXX FURNITURE COMPANY OF THE MIDWEST REALTY, INC., a
Colorado corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: President
------------------------------------------
XXXXXX FURNITURE COMPANY OF THE PACIFIC REALTY, INC., a
California corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: President
------------------------------------------
13
XXXXXX FURNITURE COMPANY OF WASHINGTON REALTY, INC., a
Washington corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: President
------------------------------------------
XXXX X. XXXXX COMPANY, an Illinois corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: Vice President
------------------------------------------
XXXX X. XXXXX REALTY COMPANY, an Illinois corporation
By: /s/ XXXXXX X. XXXXXX
------------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------------
Title: 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: /s/ XXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxx X. Xxxxxxx
------------------------------------------
Title: Sr. V.P.
------------------------------------------
14
FINOVA CAPITAL CORPORATION, it 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/ XXXXXXX XXXXXX
------------------------------------------
Name: Xxxxxxx Xxxxxx
------------------------------------------
Title: VP
------------------------------------------
15
SILVER OAK CAPITAL L.L.C., it its capacity as Revolving
Lender
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------------
Title: Authorized Signatory
------------------------------------------
AG CAPITAL FUNDING PARTNERS, L.P., it its capacity as
Revolving Lender
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------------
Title: Authorized Signatory
------------------------------------------
NATIONSCREDIT COMMERCIAL CORPORATION, THROUGH ITS
NATIONSCREDIT COMMERCIAL FUNDING DIVISION, it its capacity
as Revolving Lender
By: /s/ XXXXX X. XXXXX
------------------------------------------
Name: Xxxxx X. Xxxxx
------------------------------------------
Title: Authorized Signatory
------------------------------------------
TERM LENDERS:
SILVER OAK CAPITAL L.L.C., it its capacity as Term Lender
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------------
Title: Authorized Signatory
------------------------------------------
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
------------------------------------------
16
EXHIIBIT 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:
2. 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
17
EXHIBIT B
FORM OF AMENDMENT APPROVAL ORDER
18
