Exhibit 10.1
FIRST AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
("AMENDMENT") is executed as of the 3rd day of January, 2002 ("the EFFECTIVE
DATE"), by DMI FURNITURE, INC., a Delaware corporation (the "COMPANY"), and BANK
ONE, INDIANA, NATIONAL ASSOCIATION, a national banking association with its
principal office in Indianapolis, Indiana (the "BANK")).
RECITALS
1. The Company and the Bank are parties to a certain Amended and
Restated Credit Agreement, dated October 23, 2001 (the "Existing Agreement").
2. The Company has requested a waiver of a violation of Section
6.01(g)(2) and 6.01(g)(3) of the Existing Agreement, with respect to the Fixed
Charge Coverage Ratio and the Ratio of Total Funded Debt to EBITDA,
respectively, for the period of four (4) consecutive fiscal quarters ending on
December 1, 2001.
3. Subject to the amendment of the Existing Agreement in accordance
with the terms hereof, and subject to all other terms and conditions stated in
this Amendment, the Bank is willing to agree to such waiver in accordance with
the terms of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements herein, and each act performed and to be performed hereunder, the
Bank and the Company agree as follows:
1. DEFINITIONS. Except as otherwise expressly stated, all terms used in
the Recitals and in this Amendment that are defined in the Existing Agreement,
and that are not otherwise defined herein, shall have the same meanings in this
Amendment as are ascribed to them in the Existing Agreement.
2. WAIVER. The Bank hereby waives the violation of the provisions of
Section 6.01(g)(2) and 6.01(g)(3) of the Existing Agreement with respect to the
Fixed Charge Coverage Ratio and the Ratio of Total Funded Debt to EBITDA,
respectively, only for the period of four (4) consecutive quarters ending on
December 1, 2001.
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3. AMENDMENTS TO EXISTING AGREEMENT.
(A) AMENDMENTS TO DEFINITIONS. Each of the following definitions, as
set forth in Section 1.01 of the Existing Agreement, are amended and restated in
their respective entireties as of the Effective Date to read as follows:
"APPLICABLE CREDIT ENHANCEMENT LETTER OF CREDIT COMMISSION RATE" means
the rate per annum at which the commission due on each Commission Due
Date for each Credit Enhancement Letter of Credit will be calculated,
which rate shall be determined by reference to the Ratio of Total
Funded Debt to EBITDA in accordance with the following table:
Ratio of Total Applicable Credit
Funded Debt Enhancement Letter of
To EBITDA Credit Commission Rate
--------- ----------------------
5.01 and above 3 1/4%
4.51 to 5.00 3%
4.01 to 4.50 2 3/4%
3.50 to 4.00 2 1/2%
3.00 to 3.49 2 1/4%
2.50 to 2.99 2%
2.49 and less 1 3/4%
The Applicable Credit Enhancement Letter of Credit Commission Rate
shall be determined on the First Amendment Effective Date on the basis
of the Ratio of Total Funded Debt to EBITDA in effect on the First
Amendment Effective Date (which the Company and the Bank agree for
purposes of the Applicable Credit Enhancement Letter of Credit
Commission Rate was above 5.01 as of the First Amendment Effective
Date) and shall be redetermined and adjusted as of the close of each
fiscal quarter of the Company thereafter, concurrently with any
adjustment to the Ratio of Total Funded Debt to EBITDA (as provided in
the definition of Ratio of Total Funded Debt to EBITDA in this
Agreement), with such redetermined Applicable Credit Enhancement Letter
of Credit Commission Rate to be effective for the entire fiscal quarter
of the Company which immediately follows each such fiscal quarter.
"APPLICABLE SPREAD" means the percentage per annum to be taken into
account in determining the rate per annum at which interest will accrue
on the Revolving Loan, any Documentary Letter of Credit Loan, and the
Term Loan, which shall be determined by reference to the Ratio of Total
Funded Debt to EBITDA in accordance with the following table:
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Ratio of Total
Funded Debt If determining If determining
to EBITDA a LIBOR-based Rate a Prime-based Rate
--------- ------------------ ------------------
5.01 and above 3 1/4% 1/2%
4.51 to 5.00 3% 1/4%
4.01 to 4.50 2 3/4% 0%
3.50 to 4.00 2 1/2% 0%
3.00 to 3.49 2 1/4% 0%
2.50 to 2.99 2% 0%
2.49 and less 1 3/4% 0%
The Applicable Spread shall be determined on the First Amendment
Effective Date on the basis of the Ratio of Total Funded Debt to EBITDA
in effect on the First Amendment Effective Date (which the Company and
the Bank agree for purposes of determining the Applicable Spread was
above 5.01 as of the First Amendment Effective Date) and shall be
redetermined and adjusted as of the close of each fiscal quarter of the
Company thereafter, concurrently with any adjustment to the Ratio of
Total Funded Debt to EBITDA (as provided in the definition of Ratio of
Total Funded Debt to EBITDA in this Agreement), with such redetermined
Applicable Spread to be effective for the entire fiscal quarter of the
Company which immediately follows each such fiscal quarter.
"APPLICABLE UNUSED COMMITMENT FEE PERCENTAGE" means the percentage per
annum determined by reference to the Ratio of Total Funded Debt to
EBITDA in accordance with the following table:
Ratio of Total Applicable
Funded Debt Unused Commitment
To EBITDA Percentage Fee
--------- --------------
4.01 and above 1/2%
3.00 to 4.00 3/8%
less than 3.00 1/4%
The Applicable Unused Commitment Fee Percentage shall be determined on
the First Amendment Effective Date on the basis of the Ratio of Total
Funded Debt to EBITDA in effect on the First Amendment Effective Date
(which the Company and the Bank agree for purposes of determining the
Applicable Unused Commitment Fee Percentage was above 4.01 as of the
First Amendment Effective Date) and shall be redetermined and adjusted
as of the close of each fiscal quarter of the Company thereafter,
concurrently with any adjustment to the Ratio of Total Funded Debt to
EBITDA (as provided in the definition of Ratio of Total Funded Debt to
EBITDA in this Agreement), with such
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redetermined Applicable Unused Commitment Fee Percentage to be
effective for the entire fiscal quarter of the Company which
immediately follows each such fiscal quarter.
(b) NEW DEFINITIONS. Section 1.01 of the Existing Agreement is amended,
as of the Effective Date, by adding thereto the following definitions:
"FIRST AMENDMENT" means the First Amendment to Amended Restated Credit
Agreement, dated as of the First Amendment Effective Date, executed by
the Company, the Guarantor, and the Bank.
"FIRST AMENDMENT EFFECTIVE DATE" means January 3, 2002.
(c) NEW SECTIONS 9.11 AND 9.12. Article IX of the Existing Agreement is
amended, as of the Effective Date, by adding thereto the following sections:
Section 9.11. PARTICIPATIONS. The Bank may grant
participations in its extensions of credit hereunder to other lending
institutions, provided that no sale of a participation in such
extensions of credit shall in any manner relieve the Bank of its
obligations hereunder.
Section 9.12. ASSIGNMENTS. The Bank (including its successors
and assigns) may, from time to time, assign to other lending
institutions part of its rights and obligations under this Agreement
(including without limitation the indebtedness evidenced by the Notes,
together with an equivalent proportion of its Commitments to make Loans
hereunder) pursuant to written agreements executed by such assigning
lender, such assignee lender or lenders, and the Company, which
agreements shall specify in each instance the portion of the
indebtedness evidenced by the Notes which is to be assigned to each
such assignee lender and the portion of the Commitments of the
assigning lender to be assumed by it (the "ASSIGNMENT AGREEMENTS").
Upon the execution of the Assignment Agreement, the Bank or other
assigning lender shall have no further liability for funding the
portion of its Commitments assumed by such assignee lender.
Concurrently with the execution and delivery of such Assignment
Agreement, (i) this Agreement shall be amended to provide that the Bank
and each assignee lender shall be a "Lender" under this Agreement with
Commitments in the amounts set forth in such Assignment Agreement and
with all the rights, powers and obligations afforded to the Bank
hereunder, and to provide that the Bank and/or one or more of the
assignee lenders shall be appointed as agent for all of the "Lenders"
for such purposes provided therein, and shall be further amended as the
Bank may reasonably require in connection with such assignment; and
(ii) the Company shall execute and deliver Notes to the assignee lender
in the respective amounts of its Commitments and new Notes to the Bank
or other assigning lender in the respective amounts of its Commitments
after giving effect to the reduction occasioned by such assignment, all
such Notes to constitute "Notes" for all purposes of this Agreement and
of the other Loan Documents.
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4. REPRESENTATIONS AND WARRANTIES. The Company represents and warrants
to the Bank that:
(a) (i) The execution, delivery and performance by the Company of this
Amendment and all agreements and documents delivered pursuant hereto have been
duly authorized by all necessary corporate action and do not and will not
violate any provision of any law, rule, regulation, order, judgment, injunction,
or award presently in effect applying to the Company or any Subsidiary, or any
of their respective articles of incorporation or by-laws, or result in a breach
of or constitute a default under any material agreement, lease or instrument to
which the Company or any Subsidiary is a party or by which any of them or any of
their property may be bound or affected; (ii) no authorization, consent,
approval, license, exemption or filing of a registration with any court or
governmental department, agency or instrumentality is or will be necessary to
the valid execution, delivery, or performance by the Company or any Subsidiary
of this Amendment and all agreements and documents delivered pursuant hereto;
(iii) this Amendment and all agreements and documents delivered pursuant hereto
by the Company and any Subsidiary are legal, valid and binding obligations of
the Company and each Subsidiary, as applicable to each of them, as signatories
thereto and enforceable against each of them as signatories thereto in
accordance with the terms thereof.
(b) After giving effect to the amendments contained in this Amendment,
the representations and warranties contained in Article IV of the Existing
Agreement are true and correct on and as of the Effective Date with the same
force and effect as if made on and as of the Effective Date, except that the
representations in Section 4.01(d) of the Existing Agreement shall be deemed to
refer to the consolidated Financial Statements most recently delivered to the
Bank prior to the Effective Date.
(c) No Event of Default has occurred and is continuing or will exist
under the Existing Agreement, as amended by this Amendment, as of the Effective
Date.
5. CONDITIONS. The waiver and amendments contained herein are expressly
subject to and shall be effective only upon the satisfaction of the following
conditions precedent on or before the Effective Date:
(a) Copies, certified as of the Effective Date, of such corporate
documents of the Company and the Guarantor as the Bank may request, including
articles of incorporation and by-laws (or certifying as to the continued
accuracy of the articles of incorporation and by-laws previously delivered to
the Bank), and incumbency certificates, and such documents evidencing necessary
corporate action by the Company and the Guarantor with respect to this Amendment
and all other agreements or documents delivered pursuant hereto as the Bank may
request.
(b) This Amendment shall have been duly executed by the Company and
acknowledged by the Guarantor.
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(c) All accrued, unpaid interest on the Loans outstanding as of the
Effective Date shall have been paid in full.
(d) The Bank shall have been paid a waiver fee in the amount of Fifteen
Thousand and 00/100 Dollars ($15,000.00).
(e) The Company shall have paid all costs and expenses incurred by the
Bank in connection with the negotiation, preparation and closing of this
Amendment and any other documents and agreements delivered pursuant hereto,
including the reasonable fees and out-of-pocket expenses of Baker & Daniels,
special counsel to the Bank.
(f) As of the date of execution of this Amendment, no Event of Default
shall exist and be continuing.
(g) The representations and warranties of the Company referred to in
Section 4 hereof shall be true and complete in all material respects.
(h) The Company and the Guarantor shall have executed and delivered to
the Bank such additional agreements, documents and certifications, fully
executed by the Company and the Guarantor, as may be reasonably requested by the
Bank.
6. MISCELLANEOUS. Neither the provisions of this Amendment nor any
action taken or not taken in accordance with the terms of this Amendment shall
constitute a novation, termination, extinguishment, release or discharge of any
of the Obligations or provide a defense, setoff or counterclaim to the Company,
the Guarantor, or any other party with respect to any of their obligations under
any of the Loan Documents. The Company acknowledges and agrees that this
Amendment is limited to the terms outlined above, and shall not be construed as
an amendment of any other terms or provisions of the Agreement. The Company
hereby specifically ratifies and affirms the terms and provisions of the
Agreement. This Amendment shall not establish a course of dealing or be
construed as evidence of any willingness on the Bank's part to grant other or
future waivers or amendments, should any be requested.
7. RELEASE OF BANK. The Company acknowledges that as of the date of
this Amendment it has no defense, setoff or counterclaim with respect to amounts
owed by the Company to the Bank. The Company releases the Bank from any and all
claims which may have arisen, known or unknown, in connection with the Agreement
on or prior to the date hereof.
8. BINDING ON SUCCESSORS AND ASSIGNS. All of the terms and provisions
of this Amendment shall be binding upon and inure to the benefit of the parties
hereto, their respective successors, assigns and legal representatives, provided
that the Company's rights under the Agreement shall not be assignable without
the prior written consent of the Bank.
9. GOVERNING LAW. This Amendment is a contract made under, and shall be
governed by and construed in accordance with, the laws of the State of Indiana
applicable to
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contracts made and to be performed entirely within such state and without
giving affect to the choice of law principles of such state.
10. ENTIRE AGREEMENT. This Amendment constitutes and expresses the
entire understanding between the parties hereto with respect to the subject
matter hereof, and supersedes all prior agreements and understandings,
commitments, inducements or conditions, whether expressed or implied, oral or
written.
11. SURVIVAL. All covenants, agreements, undertakings, representations
and warranties made in this Amendment shall survive the execution and delivery
of this Amendment, and shall not be affected by any investigation made by any
party.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered as of the Effective Date.
DMI FURNITURE, INC.,
a Delaware corporation
By:
------------------------------------
Printed: Phillip J. Keller
Title: Vice President - Finance and
Chief Financial Officer
(the "Company")
BANK ONE, INDIANA, NATIONAL
ASSOCIATION
By:
------------------------------------
Printed: Steven P. Clemens
Title: First Vice President
(the "Bank")
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