FIRST AMENDMENT TO CREDIT AGREEMENT
THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is
made as of the 5th day of October, 2001, by and among XXXXXXX FURNITURE
INDUSTRIES, INCORPORATED, a Virginia corporation (the "Borrower"), BRANCH
BANKING AND TRUST COMPANY, as Agent, Issuing Bank and a Bank, COMPASS BANK,
FIFTH THIRD BANK and FIRST TENNESSEE BANK NATIONAL ASSOCIATION (collectively
referred to herein as the "Banks") and XXXXXXX FURNITURE INDUSTRIES OF NORTH
CAROLINA, INC., THE X.X. XXXXXX CORPORATION, BASSETT DIRECT STORES, INC.,
BASSETT DIRECT NC, LLC and BASSETT DIRECT SC, LLC (collectively referred to
herein as the "Guarantors").
R E C I T A L S:
The Borrower, the Agent, the Guarantors and the Banks have
entered into a certain Credit Agreement dated October 25, 2000 (the "Credit
Agreement"). Capitalized terms used in this Amendment which are not otherwise
defined in this Amendment shall have the respective meanings assigned to them in
the Credit Agreement.
The Borrower and Guarantors have requested the Agent and the
Banks to amend the Credit Agreement to modify certain provisions of the Credit
Agreement as more fully set forth herein. The Banks, the Agent, the Guarantors
and the Borrower desire to amend the Credit Agreement upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the Recitals and the mutual
promises contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Borrower, the
Guarantors, the Agent and the Banks, intending to be legally bound hereby, agree
as follows:
SECTION 1. Recitals. The Recitals are incorporated herein by
reference and shall be deemed to be a part of this Amendment.
SECTION 2. Amendments. The Credit Agreement is hereby amended as
set forth in this Section 2.
SECTION 2.01. Amendment to Section 1.01. (a) Section
1.01 of the Credit Agreement is hereby amended to include the following new
definitions:
"Availability Threshold" shall mean: (i) at all times
prior to the first day of Fiscal Year 2003, an amount equal to
$20,000,000; and (ii) commencing on the first day of Fiscal Year
2003 and continuing thereafter, an amount equal to zero.
"Licensee Loan" shall mean a loan made by the Licensee
Lender pursuant to Section 2.16 hereof.
"Licensee Lender" means BB&T.
"Licensee Loan Guaranty" means the Guaranty Agreement
executed by the Borrower substantially in the form of Exhibit O
hereto, evidencing the obligation of the Borrower to guarantee
the Licensee Loan referenced therein, together with all
amendments, consolidations, modifications, renewals and
supplements thereto. "Licensee Loan Guarantees" means
collectively each Licensee Loan Guaranty executed by the
Borrower and delivered to the Licensee Lender.
"Licensee Loan Documents" shall mean a loan agreement,
if any, pursuant to which a Licensee Loan is made by the
Licensee Lender, a promissory note and any and all other
documents evidencing, relating to or securing a Licensee Loan
and any other document or instrument delivered from time to time
in connection with the Licensee Loan, as such documents and
instruments may be amended or supplemented from time to time.
"Licensee Borrower" means a person that operates an
existing or future retail furniture store under the "Xxxxxxx
Furniture Direct" program of the Borrower or the "@ Home with
Bassett" program of the Borrower, as such programs are in effect
on the Closing Date.
"Liquidity Borrowing Base Certification Report" shall
mean a report in the form attached hereto as Exhibit P, and
otherwise satisfactory to the Agent, certified by the chief
financial officer or other authorized officer of the Borrower
and the Guarantors.
"Test Debt" shall mean the sum of: (1) the aggregate
outstanding principal amount of all Advances, Letter of Credit
Advances, Licensee Loans, Swing Line Advances and Undrawn
Amounts; plus (2) all Contingent BFD Liabilities; provided,
however, for the purposes of Section 5.35 Contingent BFD
Liabilities shall utilize an Applicable Percentage equal to (1)
37.5% if the Person whose obligations under the Guaranteed BFD
Lease are guaranteed is an Affiliate of the Borrower or any
Consolidated Subsidiary; and (2) 25% if the Person whose
obligations under the Guaranteed BFD Lease are guaranteed is not
an affiliate of the Borrower or any Consolidated Subsidiary.
"Test Assets" means as of any date, the sum of: (1) cash
and cash equivalents of the Borrower and Consolidated
Subsidiaries on such date, plus (2) the Contingent BFD Borrowing
Base.
(b) Section 1.01 of the Credit Agreement is hereby
amended to amend the following definitions:
"Annual Maintenance Capital Expenditures" shall mean,
with respect to any period of four fiscal quarters the greater
of: (1) the actual Capital Expenditures of the Borrower and its
Consolidated Subsidiaries during such period for maintenance
purposes of existing assets; or (2) fifty percent (50%) of
Depreciation and Amortization for such period.
"Borrowing Base" shall mean, based on the most recent
Borrowing Base Certification Report which as of the date of a
determination of the Borrowing Base has been received by the
Agent, an amount determined by deducting the Availability
Threshold applicable on the date of determination from the sum
of (i) an amount equal to 75% (or such lesser percentage as
shall be mutually agreed upon by the Agent and Borrower from
time to time) of the face dollar amount of Eligible Accounts as
at the date of determination; and (ii) an amount equal to: (A)
5% of the LIFO Reserve, as of the date of the determination of
the Borrowing Base, subtracted from (B) 40% (or such lesser
percentage as shall be mutually agreed upon by the Agent and
Borrower from time to time) of the dollar amount of the Eligible
Inventory, valued at the lower of its cost or market value (as
determined by the Agent in its sole discretion), as at the date
of determination. The Agent shall also be entitled to hold and
subtract any reserve against the Borrowing Base it deems
necessary as security for payment of the Notes, the obligations
of the Guarantors under Article X of this Agreement, and the
obligations of the Borrower under the Letter of Credit
Agreements and the Licensee Loan Guarantees.
"Comprehensive Fixed Charge Coverage Ratio" shall be
determined as of the end of each Fiscal Quarter and: (1) for
each Fiscal Quarter ending in Fiscal Year 2002, shall mean the
ratio of: (A)(i) Consolidated Comprehensive EBITDA for the
Fiscal Quarter then ending and the preceding Fiscal Quarters, if
any during Fiscal Year 2002, plus all obligations of the
Borrower or any of its Consolidated Subsidiaries as lessee under
operating leases, for the Fiscal Quarter then ending and the
preceding Fiscal Quarters, if any during Fiscal Year 2002, less
(ii) the sum of the aggregate taxes on income paid by the
Borrower and its Consolidated Subsidiaries during the Fiscal
Quarter then ending and the preceding Fiscal Quarters, if any
during Fiscal Year 2002, all Dividends paid or declared by the
Borrower and its Consolidated Subsidiaries during such period,
plus Annual Maintenance Capital Expenditures during such period,
to (B) the sum of: (i) Consolidated Fixed Charges for the Fiscal
Quarter then ending and the preceding Fiscal Quarters, if any
during Fiscal Year 2002, plus (ii) all payments during such
period by the Borrower or any of its Consolidated Subsidiaries
under Guaranteed BFD Leases; and (2) for each Fiscal Quarter
ending in Fiscal Year 2003 and thereafter, shall mean the ratio
of: (A)(i) Consolidated Comprehensive EBITDA for the period of
four consecutive Fiscal Quarters most recently ended on or prior
to such date, plus all obligations of the Borrower or any of its
Consolidated Subsidiaries as lessee under operating leases, for
the period of four consecutive Fiscal Quarters most recently
ended on or prior to such date, less (ii) the sum of the
aggregate taxes on income paid by the Borrower and its
Consolidated Subsidiaries during such period of four consecutive
Fiscal Quarters most recently
ended on or prior to such date, all Dividends paid or declared
by the Borrower and its Consolidated Subsidiaries during such
period, plus Annual Maintenance Capital Expenditures during such
period, to (B) the sum of: (i) Consolidated Fixed Charges for
the period of four consecutive fiscal quarters most recently
ended on or prior to such date, plus (ii) all payments during
such period by the Borrower or any of its Consolidated
Subsidiaries under Guaranteed BFD Leases.
"Consolidated Comprehensive EBITDA" shall be determined
as of the end of each Fiscal Quarter and (A) for each Fiscal
Quarter ending in Fiscal Year 2002, shall mean: (1) EBITDA, of
the Borrower and its Consolidated Subsidiaries, for the Fiscal
Quarter then ending and the preceding Fiscal Quarters, if any,
during Fiscal Year 2002, minus (2) non-cash income of the
Borrower and its Consolidated Subsidiaries; all determined for
the Fiscal Quarter then ending and the preceding Fiscal
Quarters, if any, during Fiscal Year 2002, in accordance with
GAAP. In the event earnings of any Person that is not a
Consolidated Subsidiary of the Borrower are remitted to the
Borrower or any Consolidated Subsidiary of the Borrower such
earnings shall not be included in Consolidated Comprehensive
EBITDA until actually paid to the Borrower or such Consolidated
Subsidiary and upon such payment shall be allocated among the
Fiscal Quarter then ended and the preceding Fiscal Quarters, if
any, during Fiscal Year 2002, on the basis that such earnings
were reported by the Borrower and its Consolidated Subsidiary;
and (B) for each Fiscal Quarter ending in Fiscal Year 2003 and
thereafter, shall mean: (1) EBITDA, of the Borrower and its
Consolidated Subsidiaries, for the Fiscal Quarter then ending
and the immediately preceding three Fiscal Quarters, minus (2)
non-recurring or non-cash income of the Borrower and its
Consolidated Subsidiaries for the Fiscal Quarter then ending and
the immediately preceding three Fiscal Quarters, all as
determined in accordance with GAAP. For purposes of
clarification and not in limitation of the foregoing, subitem
(B)(2) shall include (and thereby the following shall be
subtracted from EBITDA) without limitation to the extent the
following were included in computing Consolidated Net Income for
such period: (i) non-recurring capital gains realized by the
Borrower or any Subsidiary of the Borrower from Investments or
the Bassett Asset Fund; and (ii) any other amounts realized by
the Borrower or any Subsidiary that exceeds the actual,
recurring earnings arising from any Investment including without
limitation the Bassett Asset Fund or IHFC. In the event earnings
of any Person that is not a Consolidated Subsidiary of the
Borrower are remitted to the Borrower or any Consolidated
Subsidiary of the Borrower such earnings shall not be included
in Consolidated Comprehensive EBITDA until actually paid to the
Borrower or such Consolidated Subsidiary and upon such payment
shall be allocated among the Fiscal Quarter then ended and the
immediately preceding three Fiscal Quarters on the basis that
such earnings were reported by the Borrower and its Consolidated
Subsidiary.
"Consolidated Net Income" means, for any period, the Net
Income of the Borrower and its Consolidated Subsidiaries
determined on a consolidated basis, but excluding (i)
extraordinary gains; (ii) extraordinary non-cash losses and
(iii) any
equity interests of the Borrower or any Subsidiary of the
Borrower in the unremitted earnings of any Person that is not a
Subsidiary of the Borrower.
"Guaranteed Obligations" means any and all liabilities,
indebtedness and obligations of any and every kind and nature,
heretofore, now or hereafter owing, arising, due or payable from
the Borrower to the Banks (including, without limitation, the
Swing Line Lender and the Licensee Lender), the Issuing Bank,
the Agent or any of them, arising under or evidenced by this
Agreement, the Notes, the Letter of Credit Agreements, the
Licensee Loan Guaranties, the Collateral Documents or any other
Loan Document.
"Loan Documents" means this Agreement, the Notes, the
Licensee Loan Documents, the Licensee Loan Guaranty, the
Collateral Documents, the Letter of Credit Agreements, the
Letters of Credit, any other document evidencing, relating to or
securing the Loan, the Swing Line Advances or the Letters of
Credit, and any other document or instrument delivered from time
to time in connection with this Agreement, the Notes, the Letter
of Credit Agreements, the Swing Line Advances, the Licensee Loan
Documents, the Licensee Loan Guaranty, the Letters of Credit,
the Collateral Documents or the Loan, as such documents and
instruments may be amended or supplemented from to time;
provided, however, in connection with Articles IV and V of this
Agreement, the term "Loan Documents" shall not include the
Licensee Loan Documents executed by the Licensee Borrower or any
Person other than the Borrower or any Guarantor.
"Obligations" means the collective reference to all
indebtedness, obligations and liabilities to the Agent, the
Issuing Bank, the Licensee Lender, the Swing Line Lender and the
Banks, existing on the date of this Agreement or arising
thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or
otherwise, of the Loan Parties under this Agreement, the Letter
of Credit Agreement, the Licensee Loan Guarantees or any other
Loan Document.
"Required Banks" means at any time Banks having at least
66 2/3% of the aggregate amount of the Commitments or, if the
Commitments are no longer in effect, Banks holding at least 66
2/3% of the aggregate outstanding principal amount of the Notes,
Letter of Credit Advances, Licensee Loans and Undrawn Amounts.
"Total Unused Commitments" means at any date, an amount
equal to: (A) the aggregate amount of the Commitments of all of
the Banks at such time, less (B) the sum of: (i) the aggregate
outstanding principal amount of the Advances of all of the Banks
at such time; (ii) the aggregate outstanding principal amount of
all Letter of Credit Advances; (iii) the aggregate outstanding
principal amount of all Swing Line Advances; (iv) the aggregate
outstanding principal amount of all Licensee Loans; and (v) the
aggregate Undrawn Amounts.
"Unused Commitment" means at any date, with respect to
any Bank, an amount equal to its Commitment less the sum of: (i)
the aggregate outstanding principal amount of its Advances; (ii)
such Bank's Pro Rata Share of the aggregate outstanding
principal amount of all Letter of Credit Advances; (iii) such
Bank's Pro Rata Share of the aggregate outstanding principal
amount of all Swing Line Advances; (iv) such Bank's Pro Rata
Share of the Licensee Loans; and (v) such Bank's Pro Rata Share
of the Undrawn Amounts.
SECTION 2.02. Amendment to Section 2.01. Section 2.01 of
the Credit Agreement is hereby amended and restated to read in its entirety as
follows:
SECTION 2.01. Commitments to Make Advances. Each Bank severally
agrees, on the terms and conditions set forth herein, to make Advances
to the Borrower from time to time before the Termination Date; provided
that, immediately after each such Advance is made, the aggregate
outstanding principal amount of Advances by such Bank together with such
Bank's Pro Rata Share of the aggregate outstanding principal amount of
all Letter of Credit Advances, Licensee Loans, Swing Line Advances and
Undrawn Amounts shall not exceed the amount of its Commitment, provided
further that the aggregate principal amount of all Advances, together
with the aggregate principal amount of all Letter of Credit Advances,
Swing Line Advances, Licensee Loans and Undrawn Amounts, shall not
exceed the lesser of: (a) the aggregate amount of the Commitments of all
of the Banks at such time, and (b) the Borrowing Base. Except as
otherwise provided in an ACL Agreement, each Borrowing under this
Section shall be in an aggregate principal amount of $1,000,000 or any
larger multiple of $500,000 (except that any such Borrowing may be in
the aggregate amount of the Unused Commitments less the amount of any
outstanding Swing Line Advances) and shall be made from the several
Banks ratably in proportion to their respective Commitments. Within the
foregoing limits, the Borrower may borrow under this Section, repay or,
to the extent permitted by Section 2.10, prepay Advances and reborrow
under this Section at any time before the Termination Date.
SECTION 2.03. Amendment to Section 2.03(e). Section
2.03(e) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(e) The Issuing Bank shall furnish: (A) to the Agent
and each Bank on the tenth Domestic Business Day of each April,
July, October and January, a written report summarizing the
issuance and expiration dates of Letters of Credit issued during
the preceding calendar quarter; and (B) to the Agent and each
Bank upon request a written report setting forth the aggregate
Undrawn Amounts.
SECTION 2.04. Amendment to Section 2.06(a). Section
2.06(a) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
SECTION 2.06. Interest Rates. (a) "Applicable Margin" shall
mean: (1) prior to the first Rate Determination Date occurring in Fiscal
Year 2003, 1.625%; and (2) commencing on the first Rate Determination
Date occurring in Fiscal Year 2003 and continuing thereafter a
percentage determined quarterly based upon the ratio of Consolidated
Total Debt (calculated as of the last day of each Fiscal Quarter) to
Consolidated Comprehensive EBITDA (calculated as of the last day of each
Fiscal Quarter for the Fiscal Quarter then ended and the immediately
preceding three Fiscal Quarters), as follows::
Ratio of Consolidated Total
Debt to Consolidated Euro-Dollar Loans and
Comprehensive EBITDA Letters of Credit
-------------------- -----------------
Greater than 2.5 but equal
To or less than 3.00 1.375%
Greater than 2.0 but
Equal to or less than 2.5 1.125%
Greater than 1.5 but
Equal to or less than 2.0 .875%
Less than or equal to 1.5 .625%
The Applicable Margin shall be effective as of the date (herein, the
"Rate Determination Date") which is the first day of the first calendar
month after the day the Agent receives the quarterly financial
statements for the Fiscal Quarter which the foregoing ratio is being
determined shall remain effective from such Rate Determination Date
until the date which is the first day of the first calendar month after
the day the Agent receives the quarterly financial statements for the
Fiscal Quarter in which such Rate Determination Date falls (which latter
date shall be a new Rate Determination Date); provided that (i) for the
period from and including the Closing Date to but excluding the Rate
Determination Date next following the Closing Date, the Applicable
Margin shall be 1.375% for a Euro-Dollar Loan and Letters of Credit,
(ii) in the case of any Applicable Margin determined for the fourth and
final Fiscal Quarter of a Fiscal Year, such Applicable Margin shall be
redetermined based upon the annual audited financial statements for the
Fiscal Year ending on the last day of such final Fiscal Quarter, and if
such Applicable Margin as so redetermined shall be different from the
Applicable Margin for such date determined on the Rate Determination
Date for such fourth Fiscal Quarter, such redetermined Applicable Xxxxxx
shall be effective retroactive to the Rate Determination Date, and the
Borrower, the Agent and the Banks, as applicable, shall within 10 days
of such redetermination, make a payment (in the case of amounts owing by
the Borrower to the Banks) or provide a credit applicable to future
amounts payable by the Borrower hereunder (in the case of amounts owing
by the Banks to the Borrower) equal to the difference between the
interest and letter of credit fees actually paid under this Agreement
and the interest and fees that would have been paid under this Agreement
had the Applicable Margin as originally determined been equal to the
Applicable Margin as redetermined, and (iii) if on any Rate
Determination Date the Borrower shall have failed to deliver to the Bank
the financial statements required to be delivered pursuant to Section
5.01(a) or Section 5.01(b) with respect to the Fiscal Year or Fiscal
Quarter, as the case may be, most recently ended prior to such Rate
Determination Date, then for the period beginning on such Rate
Determination Date and ending on the earlier of (A) the date on which
the Borrower shall deliver to the Bank the
financial statements to be delivered pursuant to Section 5.01(b) with
respect to such Fiscal Quarter or any subsequent Fiscal Quarter, or (B)
the date on which the Borrower shall deliver to the Bank annual
financial statements required to be delivered pursuant to Section
5.01(a) with respect to the Fiscal Year which includes such Fiscal
Quarter or any subsequent Fiscal Year, the Loan shall bear interest at a
rate per annum equal to the Default Rate at all times during such
period. Any change in the Applicable Margin on any Rate Determination
Date shall result in a corresponding change, effective on and as of such
Rate Determination Date, in the interest rate applicable to the Loan and
in the fees applicable to each Letter of Credit outstanding on such Rate
Determination Date; provided; that no Applicable Margin shall be
decreased pursuant to this Section 2.06 if a Default is in existence on
the Rate Determination Date.
SECTION 2.05. Amendment to Section 2.11. Section 2.11 of
the Credit Agreement is hereby amended and restated to read in its entirety as
follows:
SECTION 2.11. Mandatory Prepayments. (a) On each date on
which the Commitments are reduced or terminated pursuant to
Section 2.08 or Section 2.09, the Borrower shall repay or prepay
such principal amount of the outstanding Advances and Swing Line
Advances, if any (together with interest accrued thereon and any
amounts due under Section 8.05(a)), as may be necessary so that
after such payment the aggregate unpaid principal amount of the
Advances, together with the aggregate principal amount of all
Swing Line Advances, Letter of Credit Advances, Licensee Loans
and Undrawn Amounts does not exceed the aggregate amount of the
Commitments as then reduced. Each such payment or prepayment
shall be applied to repay or prepay first to Swing Line Advances
outstanding on the date of such prepayment and then, ratably to
the Advances of the several Banks.
(b) In the event that: (1) the aggregate principal
amount of all Advances, together with the aggregate principal
amount of the Swing Line Advances, Licensee Loans, Letter of
Credit Advances and Undrawn Amounts at any one time outstanding
shall at any time exceed the Borrowing Base; or (2) the
aggregate principal amount of all Advances, together with the
aggregate principal amount of the Swing Line Advances, Licensee
Loans, Letter of Credit Advances and Undrawn Amounts at any one
time outstanding shall at any time exceed the aggregate amount
of the Commitments of all of the Banks at such time, the
Borrowers shall immediately repay so much of the Advances and
Swing Line Advances as is necessary in order that: (1) the
aggregate principal amount of the Advances thereafter
outstanding, together with the aggregate principal amount of the
Swing Line Advances, Licensee Loans, Letter of Credit Advances
and Undrawn Amounts shall not exceed the Borrowing Base; and (2)
the aggregate principal amount of the Advances thereafter
outstanding, together with the aggregate principal amount of the
Swing Line Advances, Licensee Loans, Letter of Credit Advances
and Undrawn Amounts shall not exceed the aggregate amount of the
Commitments of all of the Banks at such time.
SECTION 2.06. Amendment to Section 2.15. Section 2.15(a)
of the Credit Agreement is hereby amended and restated to read in its entirety
as follows:
SECTION 2.15. Swing Line Advances. (a) The Borrower may prior to
the Termination Date, as set forth in this Section, request the Swing
Line Lender to make, and the Swing Line Lender may in its sole and
absolute discretion prior to the Termination Date make, Swing Line
Advances to the Borrower, in an aggregate principal amount at any one
time outstanding, not exceeding $5,000,000 (the "Swing Line Cap"),
provided that the aggregate principal amount of all Swing Line Advances,
together with the aggregate principal amount of all outstanding
Advances, Undrawn Amounts, Licensee Loans and Letter of Credit Advances,
at any one time outstanding shall not exceed the aggregate amount of the
Commitments of all of the Banks at such time.
SECTION 2.07. Addition of Section 2.16. The Credit
Agreement is hereby amended to include a new Section 2.16 to read as follows:
SECTION 2.16 Licensee Loans.
(a) Each Licensee Loan shall be subject to the
provisions of this Agreement and to the provisions set forth in the
Licensee Loan Documents and the Licensee Loan Guaranty executed in
connection with such Licensee Loan. The Borrower and Guarantors agree to
promptly perform and comply with the terms and conditions of each
Licensee Loan Guaranty Agreement, this Agreement and the other Loan
Documents.
(b) The Licensee Lender may, from time to time upon
request of the Borrower, in its sole discretion disburse a Licensee
Loan, subject to satisfaction of the following conditions:
(i) the fact that, immediately before and
after the disbursement of such Licensee Loan, no Default shall
have occurred and be continuing hereunder;
(ii) the fact that the representations and
warranties of the Loan Parties contained in Article IV of this
Agreement shall be true, in all material respects, on and as of
the date following disbursement of such Licensee Loan, except to
the extent explicitly relating to a specified date;
(iii) the fact that, immediately after the
disbursement of such Licensee Loan: (i) the sum of (A) the
entire outstanding principal amount of the Advances, (B) the
aggregate outstanding principal amount of the Letter of Credit
Advances, (C) the aggregate outstanding principal amount of
Swing Line Advances, (D) the aggregate Undrawn Amounts, and (E)
the aggregate outstanding principal amount of the Licensee
Loans, will not exceed the lesser of: (1) the aggregate amount
of the Commitments of all of the Banks at such time; and (2) the
Borrowing Base;
(iv) the fact that immediately after the
disbursement of such Licensee Loan the aggregate outstanding
principal amount of the Licensee Loans will not exceed
$10,000,000; and
(v) each Licensee Loan shall be on the
following terms and conditions: (1) the maturity date of the
Licensee Loan shall be on or before the date thirty six months
after the date of disbursement of such Licensee Loan; (2) the
Licensee Loan shall bear interest at an annual rate equal to the
Prime Rate; (3) except as may otherwise be agreed upon by
Borrower and Agent, the principal amount of the Licensee Loan
shall not exceed: (i) $400,000 in the case of a Licensee Loan
for a BFD Store; or (ii) $150,000 in the case of a Licensee Loan
for an "@ Home Store"; (4) except as may otherwise be agreed
upon by Borrower and Agent, the Licensee Loan shall amortize as
follows: (i) in the case of a Licensee Loan for a BFD Store, the
Licensee Loan shall provide for six months interest only
followed by a thirty month amortization of principal and
interest subject to the limitations set forth in (1) above; and
(ii) in the case of a Licensee Loan for an "@ Home Store", the
Licensee Loan shall provide for a twenty four month amortization
of principal and interest subject to the limitations set forth
in (1) above.
Each request by the Borrower to disburse a
Licensee Loan hereunder shall be deemed to be a representation
and warranty by the Borrower on the date of such Licensee Loan
as to the truth and accuracy of the facts specified in the
clauses (b)(i), (b)(ii) and (b)(iii) of this Section.
(c) Upon written demand by the Licensee Lender, with
a copy to the Agent, each Bank shall purchase from the Licensee Lender,
and the Licensee Lender shall sell to each Bank, a participation
interest in the Licensee Loan specified in such demand equal to such
Bank's Pro Rata Share of such Licensee Loan as of the date of such
purchase, by making available to the Agent for the account of the
Licensee Lender, in Federal or other funds immediately available an
amount equal to such Bank's Pro Rata Share of the outstanding principal
amount of such Licensee Loan. Promptly after receipt thereof, the Agent
shall transfer such funds to the Licensee Lender. The Borrower and
Guarantors hereby agree to each such sale and purchase of participation
interests in the Licensee Loans outstanding from time to time. Each Bank
agrees to purchase its participation interest in an outstanding Licensee
Loan on (i) the Domestic Business Day on which demand therefor is made
by the Licensee Lender, provided notice of such demand is given not
later than 1:00 P.M. (Winston-Salem, North Carolina time) on such
Domestic Business Day or (ii) the first Domestic Business Day next
succeeding the date of such demand if notice of such demand is given
after 1:00 P.M. (Winston-Salem, North Carolina time) on any Domestic
Business Day. The Licensee Lender makes no representation or warranty
and assumes no responsibility with respect to any sale and purchase of a
participation interest in any Licensee Loan. If and to the extent that
any Bank shall not have so made the amount available to the Agent in
connection with its purchase of a participation interest in any Licensee
Loan, such Bank agrees to pay to the Agent forthwith on demand such
amount together with interest thereon, for each day from the date of
demand by the Licensee Lender, until the date such amount is paid to the
Agent, at the Federal Funds Rate for the account of the Licensee Lender.
(d) The obligation of each Bank to purchase a
participation interest in any Licensee Loan pursuant to Section 2.16(c)
shall be unconditional and shall not be affected by the existence of any
Default or Event of Default, the failure to satisfy any condition set
forth in Section 2.16(b), Section 3.1, 3.2 or 3.3 or the termination of
the Commitments (whether by the Borrower pursuant to Section 2.8 or by
the Agent pursuant to Section 6.1 or otherwise).
(e) The Licensee Lender shall furnish (A) to the
Agent and each Bank, on the tenth Domestic Business Day of each April,
July, October and January, a written report setting forth the principal
amounts and maturity dates of the Licensee Loans made during the
preceding calendar quarter and (B) to the Agent and each Bank upon
request a written report setting forth the aggregate outstanding
principal amount of the Licensee Loans. As of October 5, 2001, the
existing Licensee Loans are set forth on Schedule 2.16 attached hereto.
(f) The failure of any Bank to purchase a
participation interest in any Licensee Loan shall not relieve any other
Bank of its obligation hereunder to purchase its participation interest
in any Licensee Loan on such date, but no Bank shall be responsible for
the failure of any other Bank to so purchase a participation interest on
such date.
(g) The Borrower shall pay to the Agent for the
account of each Bank that has purchased a participation interest in a
Licensee Loan the outstanding principal and accrued unpaid interest of
such Licensee Loan in accordance with the terms of the applicable
Licensee Loan Guaranty. The Agent will distribute to each Bank its
ratable share of any payment of principal of or interest on any Licensee
Loan received by the Agent; provided, however, that: (1) the Agent shall
make such distribution to the Banks once each calendar quarter; and (2)
in the event that such payment received by the Agent is required to be
returned, such Bank will return to the Agent any portion thereof
previously distributed by the Agent to it.
(h) The Licensee Lender will notify the Agent
promptly of the occurrence of an event of default under the Licensee
Loan Guaranty which is not cured within 5 days of the occurrence
thereof, and the Agent promptly will notify the Banks of such matters.
The Licensee Lender shall have no obligation to notify the Agent or any
Bank of the occurrence of an event of default under a Licensee Loan
unless such event of default is deemed to be a Guaranty Trigger Event
under the Licensee Loan Guaranty which is not cured within five (5) days
of the occurrence thereof.
(i) In the event the Licensee Lender receives
payment in full of the accrued unpaid interest with respect to a
Licensee Loan, Licensee Lender shall pay to the Agent for the ratable
account of each Bank, with respect to such Licensee Loan, a per annum
fee (the "Licensee Loan Fee") equal to the product of: (i) the aggregate
of the daily average amounts of the outstanding principal amount of the
Licensee Loan, times (ii) a per annum percentage equal to: (A) for the
period between October 5, 2001 and the first
Rate Determination Date occurring in Fiscal Year 2003, 1.625%; and (B)
for the period between the first Rate Determination Date occurring in
Fiscal Year 2003 through the Termination Date, 1.375%. Such Licensee
Loan Fee shall be payable in arrears for each Licensee Loan during the
term of each respective Licensee Loan once each calendar quarter after
Licensee Lender receives payment in full of the accrued unpaid interest
with respect to the date of such payment.
(j) The Licensee Lender may receive from the
Licensee Borrower, for its own account, commitment fees, facility fees
and such other fees and charges as may be provided for in any Licensee
Loan Document or otherwise charged by the Licensee Lender. No Bank shall
be entitled to any portion of the fees payable by the Licensee Borrower
to the Licensee Lender pursuant to this Section 2.16(j).
(k) (1) Licensee Lender's Liability. Licensee Lender
shall not be liable for any error of judgment or for any action taken or
omitted to be taken by Licensee Lender in connection with any Licensee
Loan except for gross negligence or willful misconduct. Licensee Lender
may consult with legal counsel (including its own counsel and counsel
for the Borrower), independent public accountants and other experts
selected by Licensee Lender and shall not be liable for any action taken
or omitted to be taken in good faith in accordance with the advice of
such counsel, accountants or experts. Licensee Lender makes no warranty
or representation and shall not be responsible for any statement,
warranty or representation made in connection with any Licensee Loan or
any document relative thereto, or for the financial condition or legal
status of any Licensee Borrower or any other obligor on any Licensee
Loan, or for any credit or other information furnished by it to any
Bank, or for the value or condition of any assets of the Licensee
Borrower; shall not be responsible for the performance or observance of
any of the terms, covenants or conditions of any Licensee Loan or any
documents relative thereto; shall not have any duty to inspect the
property (including the books and records) of any Licensee Borrower; and
makes no representation concerning and shall not be responsible for the
due execution, legality, validity, enforceability, genuineness,
sufficiency or collectability of any Licensee Loan or any document
relative thereto or the effectiveness, perfection or priority of any
lien or security interest securing any Licensee Loan. Licensee Lender
shall incur no liability under or in respect of any Licensee Loan or any
documents relative thereto by acting upon any notice, consent,
certificate or other instrument or writing believed by it to be genuine
and signed by or sent by the proper party.
(2) Bank's Independent Decision. Each Bank acknowledges
that: (1) it has, independently and without reliance upon Licensee
Lender, the Agent or any other Bank and based upon such documents and
information as such Bank has deemed appropriate, made its own credit
analysis and decision to purchase each participation under this Section
2.16; and (2) its decision to purchase a participation under this
Section 2.16 has been made exclusively on the basis of such Bank's
credit analysis of the Licensee Loan Guaranty and the Borrower.
(3) Duties of Licensee Lender. Licensee Lender shall: (i)
use its best efforts to enforce the terms and provisions of each
Licensee Loan Guaranty and documents relative thereto, subject to the
provisions of subsection (4) hereof but shall have no obligation to
enforce any other Licensee Loan Document; (ii) keep full and complete
records and accounts of each Licensee Loan and of all payments on such
Licensee Loan and upon the written request of a Bank furnish such Bank
with copies thereof at no charge; (iii) promptly furnish each Bank
without charge with copies of credit information furnished by Licensee
Borrower including financial statements and collateral information, if
any, (but Licensee Lender assumes no responsibility with respect to the
authenticity, validity, accuracy or completeness thereof); and (v) make
suitable entries in Licensee Lender's books and records to evidence the
participation under this Section 2.16.
(4) Management by Licensee Lender. Licensee Lender shall
have the exclusive right in its name alone to enforce all rights,
privileges and powers accruing to Licensee Lender by reason of any
Licensee Loan or any documents relative thereto and all other claims
given to Licensee Lender in connection with any Licensee Loan, all in
Licensee Lender's sole discretion and in the exercise of Licensee
Lender's business judgment. Each Bank acknowledges that Licensee Lender
shall not handle the transactions relating to the Licensee Loans in
accordance with its usual practices and Licensee Lender shall not adhere
to the same standards of conduct as would be the case if each Licensee
Loan had been made exclusively by it. Licensee Lender may, in its sole
discretion and in the exercise of its business judgment, both before and
after any Guaranty Trigger Event (as defined in the Licensee Loan
Guaranty), consent to any action or failure to act by the Licensee
Borrower or any other obligor on any Licensee Loan, amend or modify the
Licensee Loan Documents, release or substitute the collateral, if any,
for any Licensee Loan; provided that Agent shall comply with the terms
of Section 9.05(a)(vii) in the event such collateral, if any, secures
the Obligations, and exercise or refrain from exercising any rights,
privileges or powers Licensee Lender may have under any Licensee Loan or
any documents relative thereto and vote the full amount of any Licensee
Loan (including the participation) in any bankruptcy case or insolvency
proceeding or with respect to any waiver, modification, amendment or
alteration of such Licensee Loan or any documents relative thereto.
However, Licensee Lender will not, without each Bank's prior written
consent, exercise any right or take any action relative to any Licensee
Loan which would reduce principal, interest or premium, if any, or
postpone any date fixed for any payment of principal, interest or
premiums, if any, or release any guaranty or collateral, if any, except
as shall be otherwise provided in any document relative thereto. The
Borrower and Guarantors acknowledge and agree that the decision of the
Licensee Lender to make the Licensee Loan and the decision of the Banks
to purchase a participation in each Licensee Loan under this Section
2.16 has been made exclusively on the basis of the credit analysis by
the Licensee Lender and the credit analysis by the Banks of the Licensee
Loan Guaranty and the Borrower.
(5) Expenses. Each Bank will promptly reimburse Licensee
Lender to the extent of its ratable share for any and all costs,
expenses and disbursements which may be incurred or made by Licensee
Lender in connection with any Licensee Loan and any action which may be
taken by Licensee Lender to collect such Licensee Loan and enforce the
documents relative to such Licensee Loan for which Licensee Lender is
not promptly reimbursed by Borrower, including any costs, expenses, fees
or disbursements incurred by outside agencies and attorneys retained by
Licensee Lender.
If Licensee Lender shall be sued or threatened with suit by any
Licensee Borrower as debtor in possession or any receiver, trustee in
bankruptcy, creditors' committee or other person on account of any
alleged performance or fraudulent transfer alleged to have been received
as the result of any transaction hereunder or under any Licensee Loan,
or if any action, claim or demand of any kind shall be asserted by any
person against Licensee Lender directly or indirectly relating to such
transactions or the enforcement of any Licensee Loan or the collection
of Licensee Borrower's indebtedness under any Licensee Loan, then
Licensee Lender shall be entitled to compromise and settle any such
claim or demand in its sole discretion in the exercise of its business
judgment and any monies paid in satisfaction or compromise of such suit,
claim, action or demand and any expenses, costs and attorney's fees paid
or incurred in connection therewith, as well as any costs, expenses,
fees or disbursements incurred by outside agencies and attorneys
retained by Licensee Lender, shall be borne and shared by Licensee
Lender and Bank pro rata (based upon the aggregate of the Licensee
Lender's share of such Licensee Loan and the Bank's ratable share).
(6) No Third Party Beneficiary. None of the provisions of
this Section 2.16 shall inure to the benefit of the Borrower, any
Guarantor, any Licensee Borrower or any person other than Licensee
Lender, the Agent and the Banks. Consequently, no Borrower, Guarantor or
Licensee Borrower and no person other than Licensee Lender, the Agent
and Bank shall be entitled to rely upon or raise as a defense, in any
manner whatsoever, the failure of Licensee Lender, the Agent or Bank to
comply with the provisions of this Section 2.16.
SECTION 2.08. Amendment to Section 3.02(d). Section
3.02(d) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(d) the fact that, immediately after such Borrowing (i) the
aggregate outstanding principal amount of the Advances of each Bank
together with such Bank's Pro Rata Share of the aggregate outstanding
principal amount of all Swing Line Advances, Licensee Loans, Letter of
Credit Advances and Undrawn Amounts, will not exceed the amount of its
Commitment and (ii) the aggregate outstanding principal amount of the
Advances together with the aggregate outstanding principal amount of all
Swing Line Advances, Licensee Loans, Letter of Credit Advances and
Undrawn Amounts, will not exceed the lesser of: (A) the aggregate amount
of the Commitments of all of the Banks as of such date; and (B) the
Borrowing Base.
SECTION 2.09. Amendment to Section 3.03(c). Section
3.03(c) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(c) the fact that, immediately after the issuance of such
Letter of Credit: (i) the sum of (A) the entire outstanding principal
amount of the Advances, (B) the aggregate outstanding principal amount
of the Letter of Credit Advances, (C) the aggregate outstanding
principal amount of Swing Line Advances, (D) the aggregate outstanding
principal amount of the Licensee Loans, and (E) the aggregate Undrawn
Amounts, will not exceed the lesser of: (1) the aggregate amount of the
Commitments of all of the Banks at such time; and (2) the Borrowing
Base;
SECTION 2.10. Amendment to Section 5.01(d). Section
5.01(d) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(d) simultaneously with the delivery of each set of
financial statements referred to in clauses (a) and (b) above, a
certificate, substantially in the form of Exhibit I (a "Compliance
Certificate"), of the Vice President - Chief Accounting Officer or the
Vice President - Finance of the Borrower (i) setting forth in reasonable
detail the calculations required to establish whether the Borrower was
in compliance with the requirements of Sections 5.03 through 5.14,
inclusive, 5.17, 5.32 and 5.34 on the date of such financial statements,
(ii) setting forth in reasonable detail the calculations establishing
the identities of the Material Subsidiaries on the date of such
certificate and, (iii) stating whether any Default exists on the date of
such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Loan Parties are taking or
propose to take with respect thereto;
SECTION 2.11. Amendment to Section 5.01(m). Section
5.01(m) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(m) as soon as available and in any event by the 15th
Domestic Business Day of each succeeding month, a Borrowing Base
Certification Report, a Liquidity Borrowing Base Certification Report
(during the period Section 5.35 is applicable) and a Contingent BFD
Liabilities Borrowing Base Certification Report, in form and content
reasonably satisfactory to the Agent, dated as of the last day the
immediately preceding month, the statements which, in each instance,
shall be certified as to truth and accuracy by the Vice President -
Chief Accounting Officer, Vice President - Finance or other authorized
officer of the Borrower and each Guarantor;
SECTION 2.12. Amendment to Sections 5.03 and 5.04.
Sections 5.03 and 5.04 of the Credit Agreement are hereby amended and restated
to read in their entirety as follows:
SECTION 5.03. Ratio of Consolidated Total Debt to Consolidated
Comprehensive EBITDA. At the end of each Fiscal Quarter during the
periods commencing with the Fiscal Quarter ending November 25, 2000 and
ending on the last day of the Second Fiscal Quarter of Fiscal Year 2001
and commencing with the first day of the First Fiscal Quarter of Fiscal
Year 2003 and continuing through the Termination Date, the ratio of
Consolidated Total Debt to Consolidated Comprehensive EBITDA for the
Fiscal Quarter then ending and the immediately preceding three Fiscal
Quarters will not at any time exceed 3.00 to 1.00.
SECTION 5.04. Ratio of Consolidated Total Debt to Consolidated
Operating EBITDA. At the end of each Fiscal Quarter during the period
set forth below, commencing with the Fiscal Quarter ending November 25,
2000, the ratio of Consolidated Total Debt to Consolidated Operating
EBITDA for the Fiscal Quarter then ending and the immediately preceding
three Fiscal Quarters shall at no time be more than the ratio
corresponding to such Fiscal Quarter in the following table:
---------------------------------------------------------------------------------
Consolidated Total Debt to
Consolidated Operating
EBITDA Period
---------------------------------------------------------------------------------
<=4.25 Closing Date through the last day of
Fiscal Year 2000
---------------------------------------------------------------------------------
<=4.0 The first day of the First
Fiscal Quarter of Fiscal Year
2001 through the last day of the
Second Fiscal Quarter of Fiscal
Year 2001
---------------------------------------------------------------------------------
<=3.0 The first day of the First Fiscal
Quarter of Fiscal Year 2003 through the
Termination Date
---------------------------------------------------------------------------------
SECTION 2.13. Amendment to Section 5.10. Section 5.10 of
the Credit Agreement is hereby amended and restated to read in its entirety as
follows:
SECTION 5.10. Fixed Charge Coverage. At the end of each
Fiscal Quarter set forth below, the Comprehensive Fixed Charge Coverage
Ratio shall not be less than the ratio corresponding to such Fiscal
Quarter in the following table:
-----------------------------------------------------------------------------
Comprehensive Fixed
Charge Coverage Ratio Period
-----------------------------------------------------------------------------
>=1.0 The first day of the first
Fiscal Quarter of Fiscal Year
2002 through the last day of the
first Fiscal Quarter of Fiscal
Year 2002
-----------------------------------------------------------------------------
>=1.15 The first day of the second
Fiscal Quarter of Fiscal Year
2002 through the last day of the
second Fiscal Quarter of Fiscal
Year 2002
-----------------------------------------------------------------------------
>=1.30 The first day of the third
Fiscal Quarter of Fiscal Year
2002 through the last day of the
third Fiscal Quarter of Fiscal
Year 2002
-----------------------------------------------------------------------------
>=1.50 The first day of the fourth
Fiscal Quarter of Fiscal Year
2002 through the last day of the
fourth Fiscal Quarter of Fiscal
Year 2002
-----------------------------------------------------------------------------
>=3.00 The first day of the first
Fiscal Quarter of Fiscal Year
2003 through the termination
Date
-----------------------------------------------------------------------------
SECTION 2.14. Addition of Section 5.35. The Credit
Agreement is hereby amended to include a new Section 5.35 to read as follows:
SECTION 5.35 Liquidity Borrowing Base. At the end of
each fiscal month commencing with the fiscal month beginning on
September 30, 2001 and continuing through the last day of Fiscal Year
2002, the ratio of Test Debt to Test Assets shall not be greater than
1.0.
SECTION 2.15. Amendment to Section 6.01(n). Section
6.01(n) of the Credit Agreement is hereby amended and restated to read in its
entirety as follows:
(n) a default or event of default shall occur and be
continuing under any of the Collateral Documents, Licensee Loan
Guarantees or Letter of Credit Agreements or any Borrower, Pledgor
Subsidiary or Guarantor shall fail to observe or perform any obligation
to be observed or performed by it under any Collateral Document,
Licensee Loan Guaranty or Letter of Credit Agreements, and such default,
event of default or failure to perform or observe any obligation
continues beyond any applicable cure or grace period provided in such
Collateral Document, Licensee Loan Guaranty or Letter of Credit
Agreement; or
SECTION 2.16. Amendment to Sections 6.05(c) through (h)
and addition of Section 6.05(i). Sections 6.05 (c) through (h) of the Credit
Agreement are hereby amended and restated to read in their entirety, together
with a new Section 6.05(i) as follows:
(c) payments of interest on Advances, Swing Line
Advances, Licensee Loans and Letter of Credit Advances, to be
applied for the ratable benefit of the Banks (with amounts
payable in respect of Swing Line Advances and Licensee Loans
being included in such calculation and paid to the Swing Line
Lender or Licensee Lender, as the case may be);
(d) payments of principal of Advances, Swing Line
Advances, Licensee Loans and Letter of Credit Advances, to be
applied for the ratable benefit of the Banks (with amounts
payable in respect of Swing Line Advances and Licensee Loans
being included in such calculation and paid to the Swing Line
Lender or Licensee Lender, as the case may be);
(e) payments of cash amounts to the Agent in respect
of outstanding Letters of Credit pursuant to Section 6.03;
(f) payments of cash amounts to the Licensee Lender
in respect of Licensee Loans, pursuant to Section 2 of the
Licensee Loan Guaranty;
(g) amounts due to the Issuing Bank, the Agent and
the Banks pursuant to Sections 7.05 and 9.03(b) and (c);
(h) payments of all other amounts due under any of
the Loan Documents, if any, to be applied for the ratable
benefit of the Secured Parties;
(i) any surplus remaining after application as
provided for herein, to the Borrower or otherwise as may be
required by applicable law.
SECTION 2.17. Addition of Exhibit P. The Credit Agreement is
hereby amended to include a new Exhibit P to read as set forth on Exhibit P
attached hereto.
SECTION 3. Amendment to Security Agreement. The second paragraph
in the section "Recitals" of the Security Agreement is amended and restated to
read in its entirety as follows: Each of the Guarantors has agreed to guarantee,
among other things, all the obligations of the Borrower under the Credit
Agreement, the Letter of Credit Agreement, the Licensee Loan Guarantees and the
other Loan Documents. The obligations of the Banks to extend credit and of the
Issuing Bank to issue the Letters of Credit under the Credit Agreement and the
other Loan Documents are conditioned upon, among other things, the execution and
delivery by the Grantors of a security agreement in the form hereof to secure
(a) the due and punctual payment by the Borrower of (i) the principal of and
interest on the Notes, when and as due, whether at maturity, by acceleration,
upon one or more dates set for prepayment or otherwise, and any renewals,
modifications or extensions hereof, in whole or in part; (ii) each payment
required to be made by the Borrower under the Letter of Credit Agreements in
respect of any of the Letters of Credit, when and as due, including payments in
respect of reimbursement of disbursements, interest thereon and obligations, if
any, to provide cash collateral and any renewals, modification or extensions
thereof, in whole or in part; (iii) each payment required to be made by the
Borrower under the Licensee Loan Guaranties, when and as due, including, without
limitation, payments in respect of repayment of Licensee Loans, interest thereon
and obligations, if any, to provide cash collateral, purchase any Licensee Loan,
and any renewals, modifications or extensions thereof in whole or in part; and
(iv) all other monetary obligations of the Borrower to the Secured Parties under
the Credit Agreement and the other Loan Documents to which the Borrower is or is
to be a party, and any renewals, modifications or extensions thereof, in whole
or in part; (b) the due and punctual performance of all other obligations of the
Borrower under the Credit Agreement and the other Loan Documents to which the
Borrower is or is to be a party, and any renewals, modifications or extensions
thereof, in whole or in part; and (c) the due and punctual payment and
performance of all obligations of each of the Guarantors under the Credit
Agreement and the other Loan Documents to which it is or is to be a party and
any renewals, modifications or extensions thereof, in whole or in part (all the
foregoing indebtedness, liabilities and obligations being collectively called
the "Obligations").
SECTION 4. Conditions to Effectiveness. The effectiveness of
this Amendment and the obligations of the Banks hereunder are subject to the
following conditions, unless the Banks waive such conditions:
(a) receipt by the Agent from each of the parties hereto of
a duly executed counterpart of this Amendment signed by such party; and
(b) the fact that the representations and warranties of the
Borrower and Guarantors contained in Section 6 of this Amendment shall be true
on and as of the date hereof.
SECTION 5. No Other Amendment. Except for the amendments set
forth above, the text of the Credit Agreement shall remain unchanged and in full
force and effect. This Amendment is not intended to effect, nor shall it be
construed as, a novation. The Credit Agreement and this Amendment shall be
construed together as a single agreement. Nothing herein
contained shall waive, annul, vary or affect any provision, condition, covenant
or agreement contained in the Credit Agreement, except as herein amended, nor
affect nor impair any rights, powers or remedies under the Credit Agreement as
hereby amended. The Banks and the Agent do hereby reserve all of their rights
and remedies against all parties who may be or may hereafter become secondarily
liable for the repayment of the Notes. The Borrower and Guarantors promise and
agree to perform all of the requirements, conditions, agreements and obligations
under the terms of the Credit Agreement, as heretofore and hereby amended and
the other Loan Documents, the Credit Agreement, as amended, and the other Loan
Documents being hereby ratified and affirmed. The Borrower and the Guarantors
hereby expressly agree that the Credit Agreement, as amended, and the other Loan
Documents are in full force and effect.
SECTION 6. Representations and Warranties. The Borrower and
Guarantors hereby represent and warrant to each of the Banks as follows:
(a) No Default or Event of Default, nor any act, event,
condition or circumstance which with the passage of time or the giving of
notice, or both, would constitute an Event of Default, under the Credit
Agreement or any other Loan Document has occurred and is continuing unwaived
hereby or otherwise by the Banks on the date hereof.
(b) The Borrower and Guarantors have the power and authority
to enter into this Amendment and to do all acts and things as are required or
contemplated hereunder, or thereunder, to be done, observed and performed by
them.
(c) This Amendment has been duly authorized, validly
executed and delivered by one or more authorized officers of the Borrower and
Guarantors and constitutes legal, valid and binding obligations of the Borrower
and Guarantors enforceable against them in accordance with its terms, provided
that such enforceability is subject to general principles of equity.
(d) The execution and delivery of this Amendment and the
performance hereunder by the Borrower and Guarantors do not and will not require
the consent or approval of any regulatory authority or governmental authority or
agency having jurisdiction over the Borrower or any Guarantor, nor be in
contravention of or in conflict with the articles of incorporation, bylaws or
other organizational documents of the Borrower or any Guarantor, or the
provision of any statute, or any judgment, order or indenture, instrument,
agreement or undertaking, to which the Borrower or any Guarantor is party or by
which the assets or properties of the Borrower or any Guarantor are or may
become bound.
SECTION 7. Counterparts. This Amendment may be executed in
multiple counterparts, each of which shall be deemed to be an original and all
of which, taken together, shall constitute one and the same agreement.
SECTION 8. Governing Law. This Amendment shall be construed in
accordance with and governed by the laws of the State of North Carolina.
SECTION 9. Effective Date. Sections 2.12 and 2.13 of this
Amendment shall be effective as of May 27, 2001 (the "Effective Date").
SECTION 10. Licensee Loan Guaranty. The Borrower hereby
acknowledges and agrees that a termination of the Commitments under the Credit
Agreement (whether on the Termination Date or at any time prior to the
Termination Date for any reason) shall constitute termination of the Credit
Agreement for purposes of subsection (f) of the definition of "Guaranty Trigger
Event" set forth in the Licensee Loan Guarantees.
SECTION 11. Reduction of Commitment. Effective October 9, 2001,
the Borrower hereby proportionately reduces the Commitments by an aggregate
amount of $10,000,000. After giving effect to such reduction, the respective
Commitments of the Banks are as follows: (1) Branch Banking and Trust Company:
$35,000,000.00; (2) Compass Bank: $13,000,000.00 (3) Fifth Third Bank:
$6,000,000.00; and (4) First Tennessee National Association: $6,000,000.00.
SECTION 12. Fee. The Borrower hereby agrees to pay to each Bank
an amendment fee in an amount equal to such Bank's Commitment (after giving
effect to the reduction set forth in Section 11) multiplied by .050%.
[The remainder of this page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have executed and
delivered, or have caused their respective duly authorized officers or
representatives to execute and deliver, this Amendment as of the day and year
first above written.
XXXXXXX FURNITURE INDUSTRIES,
INCORPORATED
By: (SEAL)
---------------------------------------
Title:
------------------------------------
XXXXXXX FURNITURE INDUSTRIES OF
NORTH CAROLINA, INC.
By: (SEAL)
---------------------------------------
Title:
------------------------------------
THE X.X. XXXXXX CORPORATION
By: (SEAL)
---------------------------------------
Title:
------------------------------------
BASSETT DIRECT STORES, INC.
By: (SEAL)
---------------------------------------
Title:
------------------------------------
BASSETT DIRECT NC, LLC
By: (SEAL)
---------------------------------------
Title:
------------------------------------
BASSETT DIRECT SC, LLC
By: (SEAL)
---------------------------------------
Title:
------------------------------------
BRANCH BANKING AND TRUST COMPANY, as
Agent, Issuing Bank and as a Bank
By: (SEAL)
-----------------------------------------------
Title:
--------------------------------------------
COMPASS BANK
By: (SEAL)
---------------------------------------
Title:
------------------------------------
FIFTH THIRD BANK
By: (SEAL)
---------------------------------------
Title:
------------------------------------
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: (SEAL)
---------------------------------------
Title:
------------------------------------
