LIMITED WAIVER REGARDING FINANCIAL COVENANTS
October 12, 2001
WinsLoew Furniture, Inc.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxx, Xx.
Chief Financial Officer
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of May 8, 2001 (the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among WinsLoew Furniture, Inc., a Florida corporation ("Company"), the
financial institutions listed therein ("Lenders"), Canadian Imperial Bank of
Commerce, as administrative agent for Lenders (in such capacity, "Administrative
Agent"), CIBC, INC., as Swing Line Lender, Antares Capital Corporation and
Xxxxxx Financial, Inc., as Co-Syndication Agents and General Electric Capital
Corporation, as Documentation Agent for Lenders.
Company has informed Administrative Agent and Lenders that Company does not
expect to be in compliance with the Consolidated Total Leverage Ratio covenant
set forth in subsection 7.6A for the Third Fiscal Quarter 2001. At the request
of Company the Lenders, constituting Requisite Lenders under the Credit
Agreement, have authorized Administrative Agent pursuant to subsection 10.6 of
the Credit Agreement to waive compliance during the period from the date this
Limited Waiver becomes effective through and including November 30, 2001 (the
"Waiver Period") with the provisions of subsection 7.6A of the Credit Agreement
for the Third Fiscal Quarter 2001; provided however that (i) the Company's
Consolidated Total Leverage Ratio determined in accordance with subsection 7.6A
of the Credit Agreement for the Third Fiscal Quarter 2001 is not greater than
4.90:1.00; (ii) during the Waiver Period and notwithstanding anything otherwise
provided for in the Credit Agreement, in no event shall the Total Utilization of
Revolving Loan Commitments at any time exceed the lesser of (A) $20,000,000 for
the week commencing October 15, 2001, which sum shall be increased by $2,500,000
on each Monday thereafter, commencing on October 22, 2001, up to a maximum
increase of $15,000,000 (for an aggregate maximum of $35,000,000), (B) the
Revolving Loan Commitments then in effect and (C) the sum of (a) $20,000,000 and
(b) 50% of the aggregate face amount of the net accounts receivable of Company
in excess of $42,000,000; (iii) commencing on October 15, 2001, and on each
Monday thereafter during the Waiver Period, Company shall deliver to
Administrative Agent a Borrowing Base Certificate, attaching thereto an
Attachment No.1 in the form attached to this Limited Waiver as Annex I,
establishing the amount of Revolving Loans and/or Letters of Credit available to
Company pursuant to the preceding clause (ii) during such week; and (iv) Company
shall pay the actual costs and expenses incurred by Administrative Agent in
connection with the negotiation and preparation of this Limited Waiver and the
fees, expenses and disbursements of counsel to Administrative Agent in
connection with the negotiation and preparation of this Limited Waiver.
Compliance with the preceding clauses (i)-(iv) shall be a condition to the
commencement and continuation of the effectiveness of this Limited Waiver.
Without limiting the generality of the provisions of subsection 10.6 of the
Credit Agreement, the waiver set forth herein shall be limited precisely as
written and relates solely to the noncompliance by Company with the provisions
of subsection 7.6A of the Credit Agreement for the Third Fiscal Quarter 2001
during the Waiver Period, and nothing in this Limited Waiver shall be deemed to
(a) constitute a waiver of compliance by Company with respect to (i) subsection
7.6A of the Credit Agreement in any other instance or (ii) any other term,
provision or condition of the Credit Agreement or any other instrument or
agreement referred to therein (whether in connection with this Limited Waiver or
otherwise) or (b) prejudice any right or remedy that Administrative Agent or any
Lender may now have (except to the extent such right or remedy was based upon
existing defaults that will not exist after giving effect to this Limited
Waiver) or may have in the future under or in connection with the Credit
Agreement or any other instrument or agreement referred to therein. Except as
expressly set forth herein, the terms, provisions and conditions of the Credit
Agreement and the other Loan Documents shall remain in full force and effect and
in all other respects are hereby ratified and confirmed.
In order to induce Lenders to enter into this Limited Waiver, Company, by its
execution of a counterpart of this Limited Waiver, represents and warrants that
after giving effect to this Limited Waiver (a) no Event of Default or Potential
Event of Default exists under the Credit Agreement, (b) all representations and
warranties contained in the Credit Agreement and the other Loan Documents are
true, correct and complete in all material respects on and as of the date hereof
except to the extent such representations and warranties specifically relate to
an earlier date, in which case they were true, correct and complete in all
material respects on and as of such earlier date, and (c) Company has performed
all agreements to be performed on its part as set forth in the Credit Agreement.
This Limited Waiver 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 an original, but all such counterparts
together shall constitute but one and the same instrument. The limited waiver
set forth herein shall become effective as of the date hereof upon the execution
of counterparts hereof by Company and Administrative Agent on behalf of Lenders
constituting Requisite Lenders.
THIS LIMITED WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION
5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
CANADIAN IMPERIAL BANK OF COMMERCE,
as Administrative Agent and on
behalf of Lenders constituting
Requisite Lenders
By: _____________________________
Xxxx X. Xxxxxx
Managing Director
CIBC World Markets Corp., AS AGENT
CIBC INC., as a Lender and as Swing Line Lender
By: _____________________________
Xxxx X. Xxxxxx
Managing Director
CIBC World Markets Corp., AS AGENT
By signing below, the undersigned Xxxxxx xxxxxx (i) authorizes Canadian Imperial
Bank of Commerce, in its capacity as Administrative Agent pursuant to that
certain Credit Agreement dated as of May 8, 2001, among WinsLoew Furniture,
Inc., a Florida corporation, Canadian Imperial Bank of Commerce, as
administrative agent for the financial institutions listed therein (in such
capacity, "Administrative Agent") to execute and deliver that certain Limited
Waiver Regarding Financial Covenants dated as of October 12, 2001, on such
Xxxxxx's behalf, (ii) approves such Limited Waiver Regarding Financial Covenants
and (iii) agrees that such Limited Waiver Regarding Financial Covenants shall be
binding upon such Lender.
----------------------------------,
as a Lender
By: ____________________________
Name:
Title:
COMPANY:
WINSLOEW FURNITURE, INC.
By:
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Title:
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ANNEX I
ATTACHMENT NO. 1
TO BORROWING BASE CERTIFICATE
A. Available Amount
1. Week of October 15, 2001: $20,000,000
2. Week of __________ (Add $2,500,000
for each Monday after 10/15/01 not to
exceed $15,000,000 in the aggregate): $__________
3. Total Availability (A1 + A2): $__________
B. Revolving Loan Commitments: $__________
C. Borrowing Base:
1. Aggregate Net Accounts Receivable of Company: $__________
2. Base Amount Adjustment (50% of the
greater of (a) C1 - $42,000,000
and (b) $0): $__________
3. Available Borrowing Base (C2 + $20,000,000): $__________
D. Available Revolving Credit (lesser of A3 or B or C3): $__________
E. Total Utilization of Revolving Credit
Commitment (outstanding principal amount of
Loans plus Letter of Credit Usage): $__________
F. Excess Availability (D-E): $__________
