AMENDMENT NUMBER 2 TO
TRANSFER AND ADMINISTRATION AGREEMENT
AMENDMENT NUMBER 2 TO TRANSFER AND ADMINISTRA-
TION AGREEMENT (this "Amendment"), dated as of May 11,
1994, between LADD FURNITURE, INC., a North Carolina
corporation, as transferor (in such capacity, the "Trans-
feror") and as collection agent (in such capacity, the
"Collection Agent"), CLAYTON-MARCUS COMPANY, INC., a
North Carolina corporation, BARCLAY FURNITURE CO., a
Mississippi corporation, LADD TRANSPORTATION, INC., a
North Carolina corporation (together, the "Designated
Subsidiaries"), PILLIOD FURNITURE, INC., a North Carolina
corporation ("Pilliod") and ENTERPRISE FUNDING CORPORA-
TION, a Delaware corporation (the "Company") amending
that certain Transfer and Administration Agreement dated
as of January 28, 1994 among the Transferor, the Desig-
nated Subsidiaries and the Company, as amended or supple-
mented to the date hereof (the "Transfer and Administra-
tion Agreement").
WHEREAS, the Transferor has requested that the
Company agree to add Pilliod as a "Designated Subsidiary"
under and as defined in the Transfer and Administration
Agreement;
WHEREAS, the Transferor has requested that the
Company agree to an increase in the Maximum Net Invest-
ment; and
WHEREAS, on the terms and conditions set forth
herein, the Company is willing to amend the Transfer and
Administration Agreement to provide for the addition of
Pilliod as a "Designated Subsidiary" under and as defined
in the Transfer and Administration Agreement and to
increase the Maximum Net Investment.
NOW, THEREFORE, the parties hereby agree as
follows:
SECTION 1. Defined Terms. As used in this
Amendment capitalized terms have the same meanings as-
signed thereto in the Transfer and Administration Agree-
ment.
SECTION 2. Addition of Pilliod as a Designat-
ed Subsidiary. The Transfer and Administration Agreement
is hereby amended to add Pilliod as a party thereto as a
Designated Subsidiary. Pilliod agrees to perform each
and every obligation under the Transfer and Administra-
tion Agreement required to be performed thereunder by a
Designated Subsidiary, either individually or jointly and
severally, whether such obligations relate to Pilliod as
a Designated Subsidiary per se or to Receivables origi-
nated by Pilliod. The Company hereby consents to the
addition of Pilliod as a Designated Subsidiary.
SECTION 3. Increase of Maximum Net Investment.
The Maximum Net Investment is hereby increased to
$40,000,000.
SECTION 4. Representations and Warranties.
The Transferor hereby makes to the Company, on and as of
the date hereof, all of the representations and warran-
ties set forth in Section 3.1 of the Transfer and Admin-
istration Agreement.
SECTION 5. Conditions Precedent. This amend-
ment shall not become effective until the Company shall
have received the following:
(a) a copy of a fully executed
amendment to the Purchase Agreement adding Pilliod
as a Designated Subsidiary thereunder;
(b) a copy of the resolutions of the
Board of Directors of Pilliod, certified by its
Secretary, approving this Amendment and the other
documents to be delivered by it hereunder;
(c) the charter of Pilliod, certi-
fied by the Secretary of State or other similar
official of its jurisdiction of incorporation.
(d) a Good Standing Certificate for
Pilliod, issued by the Secretary of State of its
jurisdiction of incorporation and certificates of
qualification as a foreign corporation issued by the
Secretaries of State or other similar officials of
each jurisdiction where such qualification is mate-
rial to the transaction contemplated by the Transfer
and Administration Agreement;
(e) Copies of proper financing
statements (Form UCC-1), dated a date reasonably
near to the date of this Amendment naming Pilliod as
debtor and the Transferor as secured party and show-
ing the Company as assignee of the secured party or
other similar instruments or documents as may be
necessary or in the reasonable opinion of the Compa-
ny desirable under the UCC of all appropriate juris-
dictions or any comparable law to perfect the Trans-
feror's ownership interest in all Receivables origi-
nated by Pilliod;
(f) a Certificate of the Secretary
of Pilliod, certifying, among other things, (i) the
names and signatures of the officers authorized on
its behalf to execute this Amendment and any other
documents to be delivered by it hereunder (on which
Certificate the Company may conclusively rely until
such time as the Company shall receive from Pilliod
a revised Certificate meeting the requirements of
this clause (f)(i)) and (ii) a copy of Pilliod's By-
Laws;
(g) An opinion of counsel to each of
the Transferor, each Designated Subsidiary and
Pilliod with respect to certain corporate matters
and the enforceability of the Agreement as amended
hereby in form and substance acceptable to the
Company;
(h) A computer tape setting forth
all Receivables originated by Pilliod and the Out-
standing Balances thereon as of the close of busi-
ness on May 9, 1994 and such other information as
the Administrative Agent may reasonably request; and
(i) Receipt by the Administrative
Agent of the upfront commitment fee described in the
Fee Letter.
SECTION 6. Post Closing Conditions. (a)
Within 30 days of the date hereof, the Transferor shall
deliver to the Company, with respect to Pilliod, either
(i) a certificate of qualification as a foreign corpora-
tion issued by the Secretary of State or other similar
official of Illinois or (ii) a legal opinion, reasonably
acceptable to the Company, of counsel admitted to prac-
tice in such state substantially to the effect that such
qualification is not required.
(b) Within 16 days of the date hereof,
the Transferor shall deliver to the Company certified
copies of request for information or copies (Form UCC-11)
(or a similar search report certified by parties accept-
able to the Company) dated a date reasonably near the
date of this Amendment listing all effective financing
statements which name Pilliod (under its present name and
any previous name) as debtor and which are filed in
jurisdictions in which the filings were made pursuant to
item (e) of Section 5 above together with copies of such
financing statements. In the event that any of such
financing statements shall cover any Receivables origi-
nated by Pilliod, the date such request for information
or similar report is delivered or, if such Request or
report is not delivered by the opening of business on the
17th day after the date hereof, on such 17th day, the Net
Receivable Balance shall be automatically reduced by the
aggregate Outstanding Balance of the Receivables origi-
nated by Pilliod, and the Transferor shall, on such date,
pay to the Company an amount equal to the reduction in
the Net Investment required in order to cause the Per-
centage Factor to be equal to 95% after giving effect to
such payment. If such financing statement (and any lien
or interest evidenced thereby) is released or terminated
and the Receivables originated by Pilliod are otherwise
eligible to be included in the Net Receivable balance
thereafter, such Receivables may be included in the Net
Receivable Balance.
SECTION 7. Ratios and Reserves. Loss, dilu-
tion and delinquency data with respect to Receivables
originated by Pilliod with respect to periods prior to
May 1, 1994 will not be included, and from and after May
1, 1994 will be included, in the calculation of the Dilu-
tion Reserve or the Loss Reserve under the Transfer and
Administration Agreement or taken into account in deter-
mining whether a Termination Event under Section 7.1(l)
(Dilution Ratio), 7.1(m) (Loss to Liquidation Ratio) or
7.1(n) (Delinquency Ratio) of the Transfer and Adminis-
tration Agreement has occurred.
SECTION 8. Accuracy of Information. Pilliod
and the Transferor, jointly and severally, hereby repre-
sent and warrant to the Company that all information
heretofore furnished by the Transferor or Pilliod to the
Company or the Administrative Agent for purposes of or in
connection with this Amendment, the Receivables originat-
ed by Pilliod, Pilliod's credit and collection policies
or any transaction contemplated hereby is true and accu-
rate in every material respect on and as of the date such
information is stated or certified.
SECTION 9. Costs and Expenses. The Transferor
shall pay all of the Company's and the Administrative
Agent's cost and expenses (including out of pocket ex-
penses and reasonable attorneys fees and disbursements)
incurred by them in connection with the preparation,
execution and delivery of this Amendment, not to exceed
$4,000.
SECTION 10. Governing Law. THIS AMENDMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NORTH CAROLINA.
SECTION 11. Severability; Counterparts. This
Amendment may be executed in any number of counterparts
and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an
original and all of which when taken together shall
constitute one and the same instrument. Any provisions
of this Amendment which are prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenfo-
rceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unen-
forceable such provision in any other jurisdiction.
SECTION 12. Captions. The captions in this
Amendment are for convenience of reference only and shall
not define or limit any of the terms or provisions here-
of.
SECTION 13. Ratification. Except as expressly
affected by the provisions hereof, the Transfer and
Administration Agreement as amended shall remain in full
force and effect in accordance with its terms and rati-
fied and confirmed by the parties hereto. On and after
the date hereof, each reference in the Transfer and
Administration Agreement to "this Agreement", "hereun-
der", "herein" or words of like import shall mean and be
a reference to the Transfer and Administration Agreement
as amended by this Amendment.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Amendment as of the date
first written above.
ENTERPRISE FUNDING CORPORATION,
as Company
By:
Name:
Title:
LADD FURNITURE, INC.,
as Transferor and Collection
Agent
By:
Name:
Title:
CLAYTON-MARCUS COMPANY, INC.
By:
Name:
Title:
BARCLAY FURNITURE CO.
By:________________________
Name:
Title:
LADD TRANSPORTATION, INC.
By:
Name:
Title:
PILLIOD FURNITURE, INC.
By:
Name:
Title: