UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): January 9, 2004
BROWN JORDAN INTERNATIONAL, INC.
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(Exact Name of Registrant as Specified in its Charter)
Florida
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(State or Other Jurisdiction of Incorporation)
0-25246 63-1127982
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(Commission File Number) (IRS Employer Identification No.)
1801 North Andrews Avenue, Pompano Beach, Florida 33069
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(Address of Principal Executive Offices) (Zip Code)
(954) 960-1100
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. Other Events.
In March 2003, as previously reported, Brown Jordan International, Inc.
("Brown Jordan") entered into a one year amendment of its senior credit
facility, which included a guarantee of up to $13.4 million by Trivest Fund III,
L.P. ("Trivest"), to pay interest on the Company's subordinate debentures. Brown
Jordan is obligated to reimburse Trivest for any funds paid pursuant to the
guarantee. Trivest and its affiliates own approximately 86% of Brown Jordan.
In November 2003, Brown Jordan presented its 2003 and 2004 forecasts to the
bank group for the senior credit facility and a term sheet, similar to that of
the previous amendment and guaranty. The senior banks presented a counter
proposal which was unacceptable to Brown Jordan and Trivest Partners, and Brown
Jordan and Trivest Partners withdrew the offer to enter into a similar amendment
and guaranty. In addition, the bank group informed the Company that a financial
advisor and collateral auditor needed to be hired by the bank group's attorneys
to review the Company's projections and to audit the receivables and inventory.
The adviser and auditor have been selected and the evaluations have started.
As of January 9, 2004, Brown Jordan entered into a forbearance agreement
with its senior bank group with respect to Brown Jordan's compliance with
certain covenants and Trivest entered into a related Acknowledgment Agreement
with the senior bank group. A copy of these documents is attached to this Report
on Form 8-K as exhibits. In addition, Brown Jordan is finalizing an agreement to
hire a new Chief Administrative Officer with extensive experience in financial
restructuring who will be responsible for finance, human resources and legal.
ITEM 7. Financial Statements and Exhibits.
EXHIBIT NO. DOCUMENT
4.1 Forbearance Agreement dated January 9, 2004 by and among Brown
Jordan International, Inc., WLFI Holdings, Inc., certain
subsidiary guarantors, the lenders party thereto and Canadian
Imperial Bank of Commerce, as Administrative Agent.
4.2 Acknowledgement Agreement dated as of January 9, 2004 between
Trivest Fund II, L.P. and Canadian Imperial Bank of Commerce,
as Administrative Agent.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BROWN JORDAN INTERNATIONAL, INC.
Date: January 15, 2004 By: /s/ Vincent A. Tortorici, Jr.
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Vincent A. Tortorici, Jr.
Chief Financial Officer
EXHIBIT INDEX
EXHIBIT NO. DOCUMENT
4.1 Forbearance Agreement dated January 9, 2004 by and among
Brown Jordan International, Inc., WLFI Holdings, Inc.,
certain subsidiary guarantors, the lenders party thereto
and Canadian Imperial Bank of Commerce, as Administrative
Agent.
4.2 Acknowledgement Agreement dated as of January 9, 2004
between Trivest Fund II, L.P. and Canadian Imperial Bank
of Commerce, as Administrative Agent.
FORBEARANCE AGREEMENT
This FORBEARANCE AGREEMENT, dated as of January 9, 2004 (this "Agreement"),
is entered into by and among Brown Jordan International, Inc. (f/k/a WinsLoew
Furniture, Inc.), a Florida corporation ("Borrower"), WLFI Holdings, Inc.
("Holdings"), the Subsidiary Guarantors listed on the signature pages hereto
("Subsidiary Guarantors" and collectively with Holdings, "Guarantors"), the
Lenders party hereto and Canadian Imperial Bank of Commerce, as Administrative
Agent for Lenders ("Administrative Agent").
This Agreement is made with reference to that certain Credit Agreement
dated as of May 8, 2001 by and among Borrower, Lenders, CIBC Inc., as swing line
lender, Administrative Agent and CIBC World Markets Corp., as lead arranger and
bookrunner, as amended to date (as amended, the "Credit Agreement"). Capitalized
terms used herein without definition shall have the same meanings herein as set
forth in the Credit Agreement.
RECITALS
A. Administrative Agent and Lenders contend that as of the date hereof
Borrower has failed to comply with certain of the provisions of the Second
Amendment dated as of March 19, 2003 among Borrower, Lenders, CIBC Inc., as
swing line lender, and Administrative Agent (the "Second Amendment") and the
Credit Agreement, which failures have created Events of Default and Potential
Events of Default as of the date hereof (any and all Events of Default and
Potential Events of Default existing as of the date hereof and any Events of
Default subsequently arising from any Potential Event of Default existing as of
the date hereof, are herein called the "Existing Asserted Defaults"). Borrower
reserves the right to contend that none of the events underlying the Existing
Asserted Defaults are presently Events of Default or Potential Events of Default
under the Credit Agreement.
B. Borrower has requested that Administrative Agent and Requisite Lenders
forbear from exercising certain remedies based on the Existing Asserted Defaults
through February 11, 2004, and the Lenders consenting to this Agreement are
willing to so agree subject to the terms and conditions set forth below.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, Borrower,
Guarantors, Lenders and Administrative Agent covenant and agree as follows:
I. ACKNOWLEDGEMENTS; REPRESENTATIONS; ADDITIONAL AGREEMENTS.
A. Borrower and Guarantors acknowledge and agree that the terms of the Loan
Documents to which each is a party are the valid and binding obligations of
Borrower and each such Guarantor, as applicable, in full force and effect,
enforceable in accordance with their terms, except as enforceability may be
limited by applicable bankruptcy, insolvency and other similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability, and as of the date hereof are not subject to any claims,
offsets, defenses or
B. counterclaims. Borrower and the each Guarantor further expressly
acknowledge and agree that Administrative Agent, for its benefit and
the benefit of Lenders, has a valid, duly perfected and fully
enforceable security interest in and First Priority Lien against the
Collateral as collateral security for the Obligations. Borrower and
each Guarantor agree that they shall not (i) dispute the validity or
enforceability of the Credit Agreement and other Loan Documents or any
of their respective obligations thereunder, or the validity, priority,
enforceability or extent of Administrative Agent's security interest in
or lien against any item of Collateral or (ii) assist or otherwise
support any challenge to, or contest of, the validity or enforceability
of any Loan Document or the validity, priority, enforceability or
extent of Administrative Agent's security interest in or lien against
any item of Collateral by a third party with respect to any Prior Event
(as defined below).
C. Borrower and Guarantors represent that the representations and
warranties made in the Loan Documents are true and correct in all
material respects as of the date hereof as though made at and as of the
date hereof, except for such representations and warranties that relate
to a particular date, such representations and warranties being true,
correct and complete in all material respects on and as of such
particular date.
D. Each of Borrower and the Guarantors agrees that it is jointly and
severally obligated to reimburse on a monthly basis upon presentation
of invoices the reasonable fees and expenses (including, without
limitation, fees and costs of (i) counsel to Administrative Agent and
Lenders, (ii) the financial advisor, Crossroads, LLC, retained by
counsel to Administrative Agent and (iii) the collateral audit firm
Evergreen Collateral Consulting, LLC, retained by counsel to
Administrative Agent) of Administrative Agent and Lenders incurred in
connection with the Credit Agreement and this Agreement.
E. Each of Borrower and the Guarantors represents that:
1. It has all requisite corporate power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and
perform its obligations hereunder.
2. The execution, delivery and performance of this Agreement by it have
been duly authorized by all necessary corporate action on its part, and
this Agreement constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency and
other similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
3. The execution, delivery and performance by it of this Agreement does
not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to it, its Certificate or
Articles of Incorporation or Bylaws or any order, judgment or decree of
any court or other agency of government binding on it, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any of its Contractual Obligations, (iii)
result in or require the creation or imposition of any Lien upon any of
its properties or assets, or (iv) require any approval of its
stockholders or any approval or consent of any Person under any of its
Contractual Obligations.
4. The execution and delivery by it of this Agreement does not and will
not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
F. Each of Borrower and the Guarantors agrees to deliver to Administrative
Agent prompt notice by facsimile of any communication, written or oral,
related to defaults under, the actual or threatened exercise of
remedies under or possible restructuring of the Subordinated
Indebtedness, from or on behalf of a holder of or representative of
(including, without limitation, a trustee) any Subordinated
Indebtedness, together with a copy of any such written communication
received by Borrower or any Guarantor. Each Borrower and Guarantor
further agrees to deliver to Administrative Agent prompt notice by
facsimile of any communication, written or oral, related to defaults
under, the actual or threatened exercise of remedies under or possible
restructuring of the Subordinated Indebtedness, originated by Borrower
or any Guarantor to a holder of or representative of a holder of
(including, without limitation, a trustee) any Subordinated
Indebtedness in such person's capacity as such a holder or
representative, together with a copy of any such written notice or
legal process sent by Borrower or any Guarantor.
II. FORBEARANCE AND OTHER AGREEMENTS.
A. Subject to the terms hereof and in reliance on the representations,
warranties, and agreements of Borrower and Guarantors herein contained,
Administrative Agent and Lenders consenting to this Agreement agree to
forbear from accelerating the Obligations, exercising a right of
setoff, exercising collection rights, foreclosing against the
Collateral, demanding or collecting any default interest (provided,
however, that default interest may accrue as set forth in section II.D
of this Agreement), or exercising any other remedies set forth in the
Loan Documents or at law or in equity with respect to the Obligations,
in each case arising out of the Existing Asserted Defaults, except for
the right to deliver a Blockage Notice (as defined in the Subordinated
Note Indenture) and the right to retain financial advisors as described
above, until the earlier of (x) 10:00 a.m. New York City time on
February 11, 2004, (y) the date upon which any of the Forbearance
Conditions set forth in Section III hereof is not satisfied or ceases
to continue to be satisfied, and (z) or upon the failure to perform any
of the provisions of, or the breach of any representation, warranty or
other covenant set forth in, this Agreement (each, a "Forbearance
Default") (the earliest of clauses (x), (y) and (z) being referred to
as the "Forbearance Termination Date"); provided, however, that nothing
herein shall be deemed to excuse satisfaction of any condition in the
Credit Agreement based on any Event of Default or Potential Event of
Default or any Forbearance Default, other than the Existing Asserted
Defaults.
B. Through the Forbearance Termination Date, the Borrower shall be
entitled to borrow and repay Revolving Loans pursuant to the Revolving
Loan Commitment, to convert or to continue the applicable basis for
determining the interest rate with respect to Loans, and to request the
issuance of Letters of Credit, subject to satisfaction of the
conditions to a conversion or continuance contained in subsection 2.2D
of the Credit Agreement and the conditions to the extensions of credit
contained in Section 4 of the Credit Agreement, in each case other than
conditions that are not satisfied because of the Existing Asserted
Defaults.
C. This agreement to forbear is limited strictly to the Existing Asserted
Defaults, so that on the Forbearance Termination Date or prior thereto
upon the occurrence of any Event of Default or Potential Event of
Default under the Credit Agreement (other than an Existing Asserted
Default), Administrative Agent and Lenders consenting to this Agreement
shall immediately be free to exercise any remedies set forth in the
Credit Agreement, the other Loan Documents or at law or equity. There
shall be no grace or cure period under this Agreement for any
Forbearance Default.
D. If Borrower failed to satisfy the financial covenants set forth in
subsection 7.6 of the Credit Agreement for the 4th Fiscal Quarter of
Fiscal Year 2003, effective as of January 1, 2004 interest shall be
deemed to have accrued at the rate set forth in subsection 2.2.E of the
Credit Agreement, with such default interest payable on demand at any
time on or after the Forbearance Termination Date.
E. This Agreement is an agreement of forbearance only and not an agreement
of waiver. Without limiting the generality of the foregoing, this
Agreement does not in any manner, either expressly or by implication,
constitute a waiver, rescission, release, or a modification of, or any
agreement to waive, rescind, release or modify, by Administrative Agent
or any Lender, of any Event of Default or Potential Event of Default
currently existing under the Credit Agreement or any of the other Loan
Documents, whether or not constituting a part of the Existing Asserted
Defaults, and whether known or unknown, or (except as otherwise
expressly provided herein) any right or remedy which Administrative
Agent or any Lender may have by or pursuant to the Credit Agreement or
any of the other Loan Documents, under applicable law or principles of
equity, or otherwise.
III. FORBEARANCE CONDITIONS.
The agreement to forbear set forth in Section II hereof is subject to the
satisfaction and continuation of the following conditions (the "Forbearance
Conditions"):
A. Other than any Existing Asserted Default, no Event of Default, Potential
Event of Default or Forbearance Default shall occur.
B. Borrower shall have satisfied and be in compliance with each term,
condition, and representation set forth in this Agreement.
C. Borrower or any Guarantor or any of their respective affiliates shall
not have commenced litigation against any Lender or Administrative Agent in
connection with or related to any of the transactions contemplated by the Loan
Documents, this Agreement, the Senior Subordinated Notes, or any other
documents, agreements, or instruments executed in connection with this
Agreement.
D. Borrower shall continue to operate its business on substantially the
same basis as it has through the date hereof.
E. Other than the Existing Asserted Defaults, no event or circumstance
shall hereafter occur, or shall heretofore have occurred but is hereafter
discovered by Lenders that has a Material Adverse Effect, regardless of whether
such event or circumstance would constitute an Event of Default.
F. Neither Borrower nor any of its Affiliates shall have made or set aside
any payments on account of any Subordinated Indebtedness (including the Senior
Subordinated Notes). No Subordinated Indebtedness (including the Senior
Subordinated Notes) shall have been accelerated and neither any representative
(including any trustee) nor the holders thereof shall have taken action to
enforce any of their remedies under such Subordinated Indebtedness.
IV. RESERVATION OF RIGHTS.
A. The agreement to forbear set forth above in Section II shall be limited
precisely as written and relates solely to the Existing Asserted Defaults
through the Forbearance Termination Date in the manner and to the extent above
set forth.
B. Except as expressly provided in this Agreement, nothing in this
Agreement shall be deemed to:
1. constitute a waiver of compliance by Borrower or any
Guarantor with respect to the sections of the Credit Agreement that are
the subject of the Existing Asserted Defaults in any other instance or
any other term, provision or condition of the Credit Agreement or any
Loan Document or any other instrument or agreement referred to therein;
2. constitute a waiver of compliance with respect to the
Trivest Guaranty, including, without limitation any payment
obligations, or
3. prejudice any right or remedy that Administrative Agent or
any Lender may now have (except, solely until the Forbearance
Termination Date, to the extent such right or remedy was based upon the
Existing Asserted Defaults as set forth herein) or may have in the
future under or in connection with the Credit Agreement, any other Loan
Document or any other instrument or agreement referred to therein.
C. Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents and the Trivest
Guaranty shall remain unchanged and in full force and effect and in all other
respects are hereby ratified and confirmed.
D. Without limiting the generality of the foregoing, neither Borrower nor
any Guarantor will claim that this Agreement or any prior action or course of
conduct by Administrative Agent or any of the Lenders constitutes an agreement
or obligation to continue such action or course of conduct in the future, except
as expressly provided herein. Borrower and Guarantors acknowledge that, except
as expressly provided in this Agreement, Administrative Agent and the Lenders
have made no commitment as to how or if the Existing Asserted Defaults will be
resolved upon the Forbearance Termination Date or otherwise.
E. Subject only to the terms of this Agreement, and subject to any
applicable notice, grace or cure periods, Administrative Agent and Lenders may
exercise any right or remedy available to them pursuant to the Loan Documents or
by applicable law or in equity, including, without limitation, as the result of
an Event of Default other than an Existing Asserted Default, as a result of a
Potential Event of Default, as a result of any Forbearance Default or upon the
Forbearance Termination Date, and nothing herein shall operate to restrict,
inhibit or prohibit Administrative Agent or Lenders from exercising any such
right or remedy or from the prosecution or continued prosecution of any action
or proceeding in furtherance of the foregoing.
F. The Loan Documents are in full force and effect, and shall remain in
full force and effect, unless and until an agreement modifying the Loan
Documents is executed and delivered by the applicable parties, and then only to
the extent such an agreement actually modifies such Loan Documents.
G. At any time on or after the Forbearance Termination Date, Administrative
Agent and Lenders shall be entitled to exercise all their rights and remedies
(including rights and remedies based on the Existing Asserted Defaults), whether
under the Loan Documents or at law or in equity, without further notice or
demand.
H. Borrower, Guarantors, Administrative Agent and Lenders may, from time to
time, engage in negotiations concerning the Obligations, which may be lengthy
and complex. None of Administrative Agent or Lenders shall have any obligation
to modify, amend and/or restructure the Obligations or any of the Loan Documents
in connection with such negotiations or otherwise. Each of Administrative Agent
and Lenders may terminate such negotiations at any time, in its sole discretion,
with or without notice, and without liability of any kind. None of
Administrative Agent or Lenders shall have any obligation or liability by virtue
of the commencement, prosecution or termination of negotiations concerning any
possible amendment. None of Administrative Agent or Lenders shall waive any
rights or incur any liability by negotiation or by the passage of time
associated therewith.
V. CONDITIONS TO EFFECTIVENESS.
This Agreement shall be effective upon the satisfaction of the following
conditions:
A. Administrative Agent shall have received executed signature pages to
this Agreement by the Requisite Lenders.
B. Administrative Agent shall have received counterparts of this Agreement
executed by Borrower and Guarantors and an Acknowledgement Agreement from
Trivest Fund III, L.P., substantially in the form of Exhibit A to this
Agreement..
C. Administrative Agent shall have received, in form and substance
reasonably satisfactory to Administrative Agent and its counsel, such other
documents, certificates and instruments as Administrative Agent shall reasonably
require.
D. All fees and expenses billed through the date hereof owing to
Administrative Agent and Lenders, including, without limitation, outstanding
fees and expenses of O'Melveny & Myers LLP, shall have been paid.
VI. GUARANTORS' ACKNOWLEDGEMENTS.
A. By signing below, each Guarantor: (a) acknowledges, consents and agrees
to the execution, delivery and performance by Borrower of this Agreement, and
(b) acknowledges and agrees that its obligations with respect to its guaranty
under the Subsidiary Guaranty or the Holdings Guaranty , as the case may be, or
any other Loan Documents executed by it are (i) not released, diminished,
waived, modified, impaired or affected in any manner by this Agreement, (ii)
hereby ratified and confirmed, and (iii) not subject to any claims, offsets,
defenses or counterclaims.
B. By signing below, each Guarantor acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Agreement,
Guarantors acknowledge that they are not required under the terms of the
Holdings Guaranty or the Subsidiary Guaranty , as the case may be, or any other
Loan Document to consent to the terms of this Agreement and (ii) nothing in this
Agreement or any of the Loan Documents shall be deemed to require the consent of
Guarantors to any future amendments to or modifications of or waivers with
respect to the Credit Agreement or any of the other Loan Documents, or shall
diminish or release Guarantors' guarantee of the Obligations or the force and
effect of the other Loan Documents , if such consent is not obtained.
VII. OTHER MATTERS. A. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AFFECTED
BY THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT
AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
B. This Agreement shall be governed by, and interpreted in accordance with,
New York law without regard to principles of conflicts of law.
C. JURY TRIAL WAIVERS. BORROWER, EACH GUARANTOR, ADMINISTRATIVE AGENT, AND
LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY LOAN DOCUMENT OR ANY MATTER
ARISING FROM THE RELATIONSHIPS ESTABLISHED HEREIN OR THEREIN AND FOR ANY
COUNTERCLAIM THEREIN.
D. Release. Borrower and each Guarantor on behalf of themselves and any
Person claiming by, through, or under any Borrower and any Guarantor, and each
Subsidiary of Borrower and each Guarantor (if any), on behalf of themselves and
Persons claiming by, through, or under such Subsidiary, respectively,
acknowledges that they have no claim, counterclaim, setoff, action or cause of
action of any kind or nature whatsoever ("Claims") against all or any of the
Administrative Agent, the Lenders or any of the Administrative Agent's or the
Lenders' Affiliates, directors, officers, employees, agents, attorneys,
financial advisors, legal representatives, successors and assigns (the
Administrative Agent, the Lenders and their Affiliates, directors, officers,
employees, agents, attorneys, financial advisors, legal representatives,
successors and assigns are jointly and severally referred to as the "Lender
Group"), that directly or indirectly arise out of or are based upon or in any
manner connected with any "Prior Event" (as defined below), and Borrower and
each Guarantor and each Subsidiary of Borrower or any Guarantor hereby release
the Lender Group from any liability whatsoever should any Claims with respect to
any Prior Events that nonetheless exist. As used herein the term "Prior Event"
means any transaction, event, circumstance, action, failure to act or occurrence
of any sort or type, whether known or unknown, which occurred, existed or was
taken prior to the execution of this Agreement and occurred, existed or was
taken in accordance with, pursuant to or by virtue of any terms of this
Agreement, the transactions referred to herein, the Credit Agreement and any
Loan Document or oral or written agreement relating to any of the foregoing,
including without limitation any approval or acceptance given or denied.
E. Waiver of Civil Code ss. 1542. To the extent that the foregoing Release
is a release as to which Section 1542 of the California Civil Code or similar
provisions of other applicable law applies, it is the intention of the Releasing
Parties that the foregoing Release shall be effective as a bar to any and all
causes of action of whatsoever character, nature in kind, known or unknown,
suspected or unsuspected, herein and above specified to be so barred. In
furtherance of this intention, the Releasing Parties hereby expressly waive any
and all rights and benefits conferred upon them by the provisions of Section
1542 of the California Civil Code or similar provisions of other applicable law,
and acknowledge that Section 1542 of the California Civil Code provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
F. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all which taken
together shall constitute but one and the same instrument.
I. Section headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose.
[remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
BROWN JORDAN INTERNATIONAL, INC
(f/k/a WinsLoew Furniture, Inc.), as Borrower
By: /s/ Vincent A. Tortorici, Jr.
Title: EVP & Chief Financial Officer
WLFI HOLDINGS, INC. as a Guarantor
By: /s/ Vincent A. Tortorici, Jr.
Title: EVP & Chief Financial Officer
Each of the entities listed on Schedule A
annexed hereto, as a Guarantor
By: /s/ Vincent A. Tortorici, Jr.
On behalf of each of the entities listed on
Schedule A annexed hereto
Title: VP, Chief Financial Officer
CANADIAN IMPERIAL BANK OF COMMERCE, Individually
and as Administrative Agent
By: /s/ Robert Greer
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Title: Authorized Officer
CIBC Inc., as a Lender
By: /s/ Robert Novack
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Title: Authorized Officer
____________________, as a Lender
By: /s/
----------------------------------------
Title: Authorized Officer
SCHEDULE A
SUBSIDIARY GUARANTORS
Loewenstein, Inc.
Winston Furniture Company of Alabama, Inc.
Texacraft, Inc.
Tropic Craft, Inc.
Winston Properties, Inc.
Pompeii Furniture Co., Inc.
Wabash Valley Manufacturing, Inc.
Charter Furniture Corporation
Lodging by Loewenstein, Inc.
Southern Wood Products, Inc.
The Woodsmiths Company
BJCLW Holdings, Inc. (f/k/a Brown Jordan International, Inc.)
Brown Jordan Company
Casual Living Worldwide, Inc.
BJ Mexico IV, Inc.
BJ Mexico V, Inc.
BJIP, Inc.
ACKNOWLEDGMENT AGREEMENT
This ACKNOWLEDGMENT AGREEMENT, dated as of January 9, 2004 (this
"Agreement"), is entered into between Trivest Fund III, L.P. ("Trivest Fund")
and Canadian Imperial Bank of Commerce, as Administrative Agent ("Administrative
Agent") for the Lenders party to that certain Credit Agreement dated as of May
8, 2001 by and among Borrower, Lenders, CIBC Inc., as swing line lender,
Administrative Agent and CIBC World Markets Corp., as lead arranger and
bookrunner, as amended to date (as amended, the "Credit Agreement").
RECITALS
A. Borrower, Guarantors, Administrative Agent and Lenders are entering into
a Forbearance Agreement dated as of January 9, 2004 (the "Forbearance
Agreement;" capitalized terms used herein without definition have the respective
meanings assigned to such terms in the Credit Agreement or the Forbearance
Agreement).
B. It is a condition to the Administrative Agent and Lenders entering into
the Forbearance Agreement that Trivest Fund enter into this Agreement and
Trivest Fund has agreed to enter into this Agreement on the terms and conditions
set forth below.
NOW, THEREFORE, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are all hereby acknowledged, Trivest Fund and
Administrative Agent covenant and agree as follows:
VIII. ACKNOWLEDGMENTS; REPRESENTATIONS; ADDITIONAL AGREEMENTS.
A. Trivest Fund agrees that it shall not (i) dispute the validity or
enforceability of the Credit Agreement and other Loan Documents or any of the
Borrower' or the Guarantors' respective obligations thereunder, or the validity,
priority, enforceability or extent of Administrative Agent's security interest
in or lien against any item of Collateral or (ii) assist or otherwise support
any challenge to, or contest of, the validity or enforceability of any Loan
Document or the validity, priority, enforceability or extent of Administrative
Agent's security interest in or lien against any item of Collateral by a third
party with respect to any Prior Event (as defined below). Trivest Fund
acknowledges and agrees that the terms of the Trivest Guaranty is the valid and
binding obligations of Trivest Fund, in full force and effect, enforceable in
accordance with their terms, except as enforceability may be limited by
applicable bankruptcy, insolvency and other similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability, and as of the date hereof are not subject to any claims,
offsets, defenses or counterclaims. Trivest Fund agrees that it shall not (i)
dispute the validity or enforceability of the Trivest Guaranty or any of its
obligations thereunder, or (ii) assist or otherwise support any challenge to, or
contest of, the validity or enforceability of the Trivest Guaranty with respect
to any Prior Event (as defined below).
B. Trivest Fund represents that:
1. It has all requisite partnership power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby, and
perform its obligations hereunder.
2. The execution, delivery and performance of this Agreement by it have
been duly authorized by all necessary corporate action on its part, and
this Agreement constitutes its legal, valid and binding obligation
enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency and
other similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
3. The execution, delivery and performance by it of this Agreement does
not and will not (i) violate any provision of any law or any
governmental rule or regulation applicable to it, its partnership
agreement or any order, judgment or decree of any court or other agency
of government binding on it, (ii) conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default
under any of its Contractual Obligations, (iii) result in or require
the creation or imposition of any Lien upon any of its properties or
assets, or (iv) require any approval of its stockholders or any
approval or consent of any Person under any of its Contractual
Obligations.
4. The execution and delivery by it of this Agreement does not and will
not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
C. Trivest Fund agrees to deliver to Administrative Agent prompt notice by
facsimile of any communication, written or oral, related to defaults
under, the actual or threatened exercise of remedies under or possible
restructuring of any Subordinated Indebtedness, from or on behalf of a
holder of or representative of (including, without limitation, a
trustee) any Subordinated Indebtedness, together with a copy of any
such written communication received by Trivest Fund or any of its
affiliates to the extent such communication was delivered by such
holder to Trivest Fund or any of its affiliates in the context of
Trivest Fund or any of its affiliates being a holder of any
Subordinated Indebtedness (and not in a capacity as a director, officer
or employee of the Borrower, Trivest Fund or any of their respective
affiliates). Trivest Fund further agrees to deliver to Administrative
Agent prompt notice by facsimile of any communication, written or oral,
related to defaults under, the actual or threatened exercise of
remedies under or possible restructuring of any Subordinated
Indebtedness, originated by Trivest Fund or any of its affiliates to a
holder of or representative of (including, without limitation, a
trustee) any Subordinated Indebtedness, together with a copy of any
such written notice or legal process sent by Trivest Fund or any of its
affiliates to the extent such communication was delivered by Trivest
Fund or any of its affiliates in the context of being a holder of any
Subordinated Indebtedness (and not in a capacity as a director, officer
or employee of the Borrower, Trivest Fund or any of their respective
affiliates). Nothing in this Section 1.C shall in any way limit (i) the
ability of Trivest Fund and/or its affiliates from engaging in
negotiations for the purchase or sale of the notes evidencing any
Subordinated Indebtedness or any interest therein or (ii) the
Borrower's and Guarantors' obligations under the Forbearance Agreement.
D. Trivest Fund will not claim that this Agreement or the Forbearance
Agreement or any prior action or course of conduct by Administrative
Agent or any of the Lenders constitutes an agreement or obligation to
continue any of the agreements in the Forbearance Agreement or any
course of conduct in the future, except as expressly provided therein.
Trivest Fund acknowledges that, except as expressly provided in the
Forbearance Agreement, Administrative Agent and the Lenders have made
no commitment as to how or if the Existing Asserted Defaults will be
resolved upon the Forbearance Termination Date or otherwise.
E. Borrower, Guarantors, Trivest Fund, Administrative Agent and Lenders
may, from time to time, engage in negotiations concerning the
Obligations, which may be lengthy and complex. None of Administrative
Agent or Lenders shall have any obligation to modify, amend and/or
restructure the Obligations or any of the Loan Documents in connection
with such negotiations or otherwise. Each of Administrative Agent and
Lenders may terminate such negotiations at any time, in its sole
discretion, with or without notice, and without liability of any kind.
None of Administrative Agent or Lenders shall have any obligation or
liability by virtue of the commencement, prosecution or termination of
negotiations concerning any possible amendment. None of Administrative
Agent or Lenders shall waive any rights or incur any liability by
negotiation or by the passage of time associated therewith.
IX. CONDITIONS TO EFFECTIVENESS.
This Agreement shall be effective upon the satisfaction of the following
conditions:
A. Administrative Agent and Trivest Fund shall have executed this Agreement
and Administrative Agent shall have received executed signature pages to this
Agreement by Trivest Fund.
B. The conditions to effectiveness of the Forbearance Agreement shall have
been satisfied and the Forbearance Agreement shall have become effective.
X. TRIVEST FUND ACKNOWLEDGMENTS.
A. Trivest Fund : (a) acknowledges, consents and agrees to the execution,
delivery and performance by Borrower and the Guarantors of the Forbearance
Agreement, and (b) acknowledges and agrees that its obligations with respect to
the Trivest Guaranty are (i) not released, diminished, waived, modified,
impaired or affected in any manner by the Forbearance Agreement , (ii) hereby
ratified and confirmed, and (iii) not subject to any claims, offsets, defenses
or counterclaims.
B. By signing below, Trivest Fund acknowledges and agrees that (i)
notwithstanding the conditions to effectiveness set forth in this Agreement or
the Forbearance Agreement, Trivest Fund is not required under the terms of the
Trivest Guaranty to consent to the terms of the Forbearance Agreement and (ii)
nothing in the Forbearance Agreement or the Trivest Guaranty or any of the Loan
Documents shall be deemed to require the consent of Trivest Fund to any future
amendments to or modifications of or waivers with respect to the Credit
Agreement or any of the other Loan Documents, or shall diminish or release the
obligations of Trivest Fund under the Trivest Guaranty, if such consent is not
obtained.
XI. OTHER MATTERS.
A. ENTIRE AGREEMENT. THE CREDIT AGREEMENT, AS AFFECTED BY THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS BETWEEN OR AMONG THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
B. This Agreement shall be governed by, and interpreted in accordance with,
New York law without regard to principles of conflicts of law.
C. JURY TRIAL WAIVERS. TRIVEST FUND AND ADMINISTRATIVE AGENT HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR
PROCEEDING RELATING TO THIS AGREEMENT, ANY LOAN DOCUMENT OR ANY MATTER ARISING
FROM THE RELATIONSHIPS ESTABLISHED HEREIN OR THEREIN AND FOR ANY COUNTERCLAIM
THEREIN.
D. Release. Trivest Fund on behalf of itself and any Person claiming by,
through, or under Trivest Fund, acknowledges that it has no claim, counterclaim,
setoff, action or cause of action of any kind or nature whatsoever ("Claims")
against all or any of the Administrative Agent, the Lenders or any of the
Administrative Agent's or the Lenders' Affiliates, directors, officers,
employees, agents, attorneys, financial advisors, legal representatives,
successors and assigns (the Administrative Agent, the Lenders and their
Affiliates, directors, officers, employees, agents, attorneys, financial
advisors, legal representatives, successors and assigns are jointly and
severally referred to as the "Lender Group"), that directly or indirectly arise
out of or are based upon or in any manner connected with any "Prior Event" (as
defined below), and Trivest Fund hereby releases the Lender Group from any
liability whatsoever should any Claims with respect to any Prior Events that
nonetheless exist. As used herein the term "Prior Event" means any transaction,
event, circumstance, action, failure to act or occurrence of any sort or type,
whether known or unknown, which occurred, existed or was taken prior to the
execution of this Agreement and occurred, existed or was taken in accordance
with, pursuant to or by virtue of any terms of this Agreement, the transactions
referred to herein, the Forbearance Agreement, the Credit Agreement and any Loan
Document or oral or written agreement relating to any of the foregoing,
including without limitation any approval or acceptance given or denied.
E. Waiver of Civil Code ss. 1542. To the extent that the foregoing Release
is a release as to which Section 1542 of the California Civil Code or similar
provisions of other applicable law applies, it is the intention of the Releasing
Parties that the foregoing Release shall be effective as a bar to any and all
causes of action of whatsoever character, nature in kind, known or unknown,
suspected or unsuspected, herein and above specified to be so barred. In
furtherance of this intention, the Releasing Parties hereby expressly waive any
and all rights and benefits conferred upon them by the provisions of Section
1542 of the California Civil Code or similar provisions of other applicable law,
and acknowledge that Section 1542 of the California Civil Code provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR
DOES NOT KNOW OR SUSPECT TO EXIST IN ITS FAVOR AT THE TIME OF
EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.
F. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all which taken
together shall constitute but one and the same instrument.
I. Section headings in this Agreement are included herein for convenience
of reference only and shall not constitute a part of this Agreement for any
other purpose.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first above written.
CANADIAN IMPERIAL BANK OF COMMERCE, as Administrative Agent
By: /s/ Robert Greer
----------------------------------------
Title: Authorized Officer
Title: Authorized Officer
TRIVEST FUND III, L.P.
By: Trivest III, General Partner, L.P., its General Partner
By: Trivest III, Inc., its General Partner
By: /s/ David Gershman
Title: Director and General Counsel