EXHIBIT 10.4
FIRST AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
This First Amendment to Amended and Restated Credit Agreement
(this "First Amendment"), dated as of February 16, 1995, is entered
into by and among LADD FURNITURE, INC. (the "Company"), the
guarantors identified as such on the signature pages attached
hereto (the "Guarantors"), the banks identified as such on the
signature pages attached hereto (the "Banks") and NATIONSBANK, N.A.
(Carolinas) f/k/a NATIONSBANK OF NORTH CAROLINA, N.A., as agent for
the Banks (in such capacity, the "Agent"). All capitalized terms
used herein and not otherwise defined shall have the meanings
ascribed to such terms in the Credit Agreement (as defined below).
RECITALS
A. The Company, the Guarantors, the Banks and the Agent
entered into that certain Amended and Restated Credit Agreement
dated as of October 19, 1994 (the "Credit Agreement").
B. The Company has requested that the Credit Agreement be
amended to (i) modify the Debt Service Coverage Ratio financial
covenant contained therein and (ii) to add a Swing Line
Subfacility.
C. The Banks have agreed to such modifications pursuant to
the terms set forth below.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. New Definitions. The following definitions shall be added to
Section 1.01 of the Credit Agreement as follows:
(a) "NationsBank" shall mean NationsBank, N.A. (Carolinas)
f/k/a NationsBank of North Carolina, N.A.
(b) "Swing Line Loans" shall mean the loans provided for by
Section 2.01(e) hereof.
(c) "Swing Line Loan Commitment" shall mean Five Million
Dollars ($5,000,000).
(d) "Swing Line Loan Request" shall mean a request by the
Company for a Swing Line Loan in a form agreed to between
the Company and NationsBank.
(e) "Swing Line Loan Note" shall have the meaning described
thereto in Section 2.07(e).
2. Amendment to Existing Definitions. The following definitions
set forth in Section 1.01 of the Credit Agreement shall be
modified as follows:
(a) The definition of Commitment shall be amended in its
entirety to read as follows:
"Commitment" shall mean, collectively, the Revolving
Credit Commitment, the Term Loan Commitment and the Swing
Line Loan Commitment.
(b) The definition of Loans shall be amended in its entirety
to read as follows:
"Loans" shall mean the loans provided for by Section 2.01
hereof and shall include Revolving Credit Loans, the Term
Loan, Competitive Bid Loans and the Swing Line Loans.
3. Section 2.01(a). Section 2.01(a) of the Credit Agreement is
amended in its entirety to read as follows:
(a) Revolving Credit Loans. Each Bank severally agrees, on
the terms of this Agreement, to make revolving loans to the Company
in Dollars, at any time and from time to time during the period
from and including the Effective Date to but not including the
Revolving Credit Commitment Termination Date (each a "Revolving
Loan and collectively the "Revolving Loans"); provided, however,
that (i) the sum of the aggregate amount of Revolving Loans
outstanding plus the aggregate amount of Competitive Bid Loans
outstanding plus the aggregate amount of Swing Line Loans
outstanding shall not exceed the Revolving Credit Commitment and
(ii) with respect to each individual Bank, the Bank's pro rata
share of outstanding Revolving Loans shall not exceed such Bank's
Revolving Credit Commitment Percentage of the Revolving Credit
Commitment. Subject to the terms of this Agreement, the Company
may borrow, repay and reborrow the amount of the Revolving Credit
Commitment.
4. Section 2.01(b)(i). Section 2.01(b)(i) of the Credit
Agreement is amended in its entirety to read as follows:
(i) Competitive Bid Loans. Subject to the terms and
conditions hereof, the Company may, from time to time during
the period from and including the Effective Date to but not
including the Revolving Credit Commitment Termination Date,
request and each Bank may, in its sole discretion, agree to
make Competitive Bid Loans to the Company; provided, however,
that (x) the sum of the aggregate amount of Revolving Credit
Loans outstanding plus the aggregate amount of Competitive Bid
Loans outstanding plus the aggregate amount of the Swing Line
Loans outstanding shall not exceed the Revolving Credit
Commitment and (y) if a Bank does make a Competitive Bid Loan
it shall not reduce such Bank's obligation to make its pro
rata share of any Revolving Credit Loan or its obligation to
purchase a pro rata participation in any Swing Line Loan.
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5. Section 2.01(e). A new subsection (e) is added to Section
2.01 of the Credit Agreement to read as follows:
(e) Swing Line Loans Subfacility.
(i) Swing Line Loans. NationsBank hereby
agrees, on the terms of this Agreement and only if the
Company is in compliance with all the conditions set
forth in Section 6, to make revolving loans to the
Company in Dollars, at any time and from time to time
during the period from and including the Effective Date
to but not including the Revolving Credit Commitment
Termination Date (each a "Swing Line Loan" and
collectively, the "Swing Line Loans"); provided , however
that (i) the sum of the aggregate amount of Swing Line
Loans outstanding at any one time shall not exceed the
Swing Line Loan Commitment and (ii) the sum of the
aggregate amount of Swing Line Loans outstanding plus the
aggregate principal amount of Revolving Loans outstanding
plus the aggregate amount of Competitive Bid Loans
outstanding shall not exceed the Revolving Credit
Commitment. Subject to the terms of this Agreement, the
Company may borrow, repay and reborrow the amount of the
Revolving Credit Commitment.
(ii) Swing Line Borrowings. By no later than
11:00 a.m. (Charlotte, North Carolina time), on the date
of the request, the Company shall submit a Swing Line
Loan Request to NationsBank setting forth the amount of
the requested Swing Line Loan and complying in all
respects with Section 6.
(iii) Additional Swing Line Loan Provisions.
The Company agrees to repay all Swing Line Loans then
outstanding within one Business Day of demand therefor by
NationsBank. Each repayment of a Swing Line Loan may be
accomplished by requesting Revolving Credit Loans. In
the event that the Company shall fail to repay any Swing
Line Loan within three Business Days after demand
therefor by NationsBank, and in any event upon (A) a
request by NationsBank, (B) the occurrence of an Event of
Default described in Section 9 or (C) the acceleration of
any Loan or termination of any Commitment pursuant to
Section 9, each other Bank shall, within three (3)
Business Days after demand therefore by NationsBank,
irrevocably and unconditionally purchase from
NationsBank, without recourse or warranty, an undivided
interest and participation in such Swing Line Loan in an
amount equal to such other Bank's Revolving Credit
Commitment Percentage thereof, by directly purchasing a
participation in such Swing Line Loan in such amount
(regardless of whether the conditions precedent thereto
set forth in Section 6.02 hereof are then satisfied,
whether or not the Borrower has made an Advance Request
and whether or not the Revolving Credit Commitments are
then in effect, any Event of Default exists or all the
Loans have been accelerated) and paying the proceeds
thereof to NationsBank at the address provided in Section
12.02, or at such other address as NationsBank may
designate, in Dollars and in immediately available funds.
NationsBank agrees to notify each Bank that is obligated
to purchase a participation
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in Swing Line Loans hereunder of the occurrence of any
event described in clause (B) or (C) above promptly after
NationsBank becomes aware thereof, but the failure to give
such notice will not affect the obligation of any such Bank
to purchase any such participation. If such amount is not
in fact made available to NationsBank by any Bank,
NationsBank shall be entitled to recover such amount on
demand from such Bank, together with accrued interest
thereon for each day from the date of demand thereof, at
the Federal Funds Rate. If such Bank does not pay such
amount forthwith upon NationsBank's demand therefor, and
until such time as such Bank makes the required payment,
NationsBank shall be deemed to continue to have outstanding
Swing Line Loans in the amount of such unpaid participation
obligation for all purposes of the Basic Documents other
than those provisions requiring the other Banks to
purchase a participation therein. Further, such Bank
shall be deemed to have assigned any and all payments
made of principal and interest on its Loans, and any
other amounts due to it hereunder to NationsBank to fund
Swing Line Loans in the amount of the participation in
Swing Line Loans that such Bank failed to purchase
pursuant to this Section 2.01(e) until such amount has
been purchased (as a result of such assignment or
otherwise). Upon the purchase of a participation in
respect of such Swing Line Loan by a Bank pursuant to
this Section 2.01(e), the amount so funded shall become a
Revolving Credit Loan by the purchasing Bank hereunder
and shall no longer be a Swing Line Loan. On the date
that the Banks are required to purchase participations in
Swing Line Loans under this Section 2.01(e),
NationsBank's pro rata share of such Swing Line Loans
shall no longer be a Swing Line Loan hereunder but shall
be a Revolving Credit Loan.
6. Section 2.04. The second sentence of Section 2.04 of the
Credit Agreement is amended in its entirety to read as
follows:
For the purpose of calculating the Commitment Fee, the amount
outstanding as Competitive Bid Loans and as Swing Line Loans
shall not be included in the amount used under the Revolving
Credit Commitment (notwithstanding the fact that the amount of
Competitive Bid Loans and Swing Line Loans outstanding reduces
availability under the Revolving Credit Commitment).
7. Section 2.07(e). A new subsection (e) is added to Section
2.07 of Credit Agreement to read as follows:
(e) Swing Line Loan Notes. The Swing Line Loan Notes made by
NationsBank shall be evidenced by a single promissory note of the
Company to NationsBank in substantially the form of Exhibit A-4
hereto (the "Swing Line Loan Note"), dated the Effective Date,
payable to NationsBank in a principal amount equal to the amount of
its Swing Line Loan Commitment and otherwise duly completed. The
date and amount of each Swing Line Loan made by NationsBank to the
Company, and each payment made on account of the principal thereof,
shall be recorded by NationsBank on its books and, prior to any
transfer of the Swing Line Loan Note held by it, endorsed by
NationsBank on the schedule attached to such Note or any
continuation thereof;
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provided that the failure of NationsBank to make any such recordation
or endorsement shall not effect the obligations of the Company to make
a payment when due of any amount owing hereunder or under such Note in
respect of the Swing Line Loans to be evidenced by such Note, and each
such recordation or endorsement shall be conclusive and binding absent
manifest error.
8. Section 2.08(b)(ii). Section 2.08(b)(ii) of the Credit
Agreement is amended in its entirety to read as follows:
(ii) Overadvance. If, at any time, the sum of Revolving
Credit Loans outstanding plus Competitive Bid Loans
outstanding plus Swing Line Loans outstanding exceeds the
Revolving Credit Commitment, then the Company shall
immediately make a payment in the amount of the deficiency.
9. Section 2.08. The last paragraph of Section 2.08 of the
Credit Agreement is amended in its entirety to read as
follows:
Mandatory prepayments shall be applied: first, (A) if
pursuant to subsection (i) above, pro rata to the remaining
installments of the Term Loan on the basis provided in Section
2.08(a) hereof, or (B) if pursuant to Subsection (iii) above,
to the remaining installments of the Term Loan in the inverse
order of maturity; second, to the Revolving Credit Loans;
provided that, upon any such prepayment of the Revolving
Credit Loans under Subsection (i) or (iii) above, the
Revolving Credit Commitment shall automatically be reduced on
such date by the amount of such prepayment and, if the amount
available for prepayment as aforesaid exceeds the amount of
Revolving Credit Loans outstanding plus Competitive Bid Loans
outstanding plus Swing Line Loans outstanding on such date,
the Revolving Credit Commitment shall be further reduced on
such date by such excess amount; and third, if the Term Loan
is paid in full and the Revolving Credit Loans have been paid
in full, then to the Swing Line Loans and then to the
Competitive Bid Loans on a pro rata basis to each Bank holding
Competitive Bid Loans.
10. Section 3.01(a). Section 3.01(a) of the Credit Agreement is
amended in its entirety to read as follows:
(a) Revolving Loans and Competitive Bid Loans. On the
Revolving Credit Commitment Termination Date, the entire
outstanding principal balance of Revolving Loans, Competitive Bid
Loans and Swing Line Loans, together with accrued but unpaid
interest and all other sums owing thereon, shall be due and payable
in full.
11. Section 3.02(a)(iv). A new subsection (iv) is added to
Section 3.02 of the Credit Agreement to read as follows:
(iv) Swing Line Loans. All Swing Line Loans shall
accrue interest at the Base Rate (as in effect from time to
time) or at such other rate as agreed to between the Company
and
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NationsBank. All interest accrued on Swing Line Loans
shall be solely for the benefit of NationsBank unless and
until the other Banks purchase a participation therein.
12. Section 3.02(b)(i). Section 3.02(b)(i) of the Credit
Agreement is amended in its entirety to read as follows:
(i) In the case of a Base Rate Loan (other than a Swing
Line Loan), quarterly on the first Business Day following each
Quarterly Date, and in the case of a Swing Line Loan on the
last Business Day of each month.
13. Section 4.03. Section 4.03 of the Credit Agreement is amended
in its entirety to read as follows:
4.03 Computations. (a) Interest on Eurodollar Loans,
Competitive Bid Loans, the Commitment Fee and on all other amounts
owing by the Company (other than Base Rate Loans and Swing Line
Loans) shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the last
day) occurring in the period for which payable and (b) interest on
Base Rate Loans and Swing Line Loans shall be computed on the basis
of a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day)
occurring in the period for which payable.
14. Section 4.04. A new subsection (d) to Section 4.04 of the
Credit Agreement is added to the Credit Agreement to read as
follows:
(d) In the case of Swing Line Loans, $250,000 and in integral
multiples of $100,000 in excess of such amount.
15. Section 8.12. Section 8.12 of the Credit Agreement is hereby
amended in its entirety to read as follows:
8.12 Debt Service Coverage Ratio. The Company will not permit
the Debt Service Coverage Ratio to be less than (a) for the
rolling four Quarterly Periods ending on the Quarterly Date
nearest December 31, 1994, 1.4 to 1.0; (b) for the rolling
four Quarterly Periods ending on the Quarterly Date nearest
March 31, 1995, 1.25 to 1.0; (c) for the rolling four
Quarterly Periods ending on the Quarterly Date nearest June
30, 1995, 1.30 to 1.00; (d) for the rolling four Quarterly
Periods ending on the Quarterly Date nearest September 30,
1995, 1.45 to 1.0; and (e) for each rolling four Quarterly
Periods ending on any Quarterly Date thereafter, 2.0 to 1.0.
16. Exhibit A-4. A new Exhibit A-4 is added to the Credit
Agreement in the form attached to this First Amendment.
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17. Swing Line Loan Note. Simultaneously with the execution and
delivery of this First Amendment, the Company shall deliver a
Swing Line Loan Note in favor of NationsBank in the original
principal amount of $5 million.
18. Fees. In consideration of the Banks entering into this First
Amendment, the Company shall pay to each Bank a fee equal to
.05% of such Bank's pro rata share of the Commitment.
19. Liens. The Company and the Guarantors, as applicable, affirm
the liens and security interests created and granted in the
Credit Agreement and the Basic Documents and agree that this
First Amendment shall in no manner adversely affect or impair
such liens and security interests.
20. Representations and Warranties. The Company hereby represents
and warrants to the Banks and the Agent that (a) no Event of
Default exists and is continuing under the Credit Agreement;
(b) the Company has no claims, counterclaims, offsets, credits
or defenses to the Basic Documents and the performance of its
obligations thereunder, or if the Company has any such claims,
counterclaims, offsets, credits or defenses to the Basic
Documents or any transaction related to the Basic Documents,
same are hereby waived, relinquished and released in
consideration of the Banks' execution and delivery of this
First Amendment; and (c) since the date of the last financial
statements of the Company delivered to Banks, no material
adverse change has occurred in the business, financial
condition or prospects of the Company other than as previously
disclosed to the Banks.
21. Acknowledgment of Guarantors. The Guarantors acknowledge and
consent to all of the terms and conditions of this First
Amendment and agree that this First Amendment and all
documents executed in connection herewith do not operate to
reduce or discharge the Guarantors' obligations under the
Credit Agreement or the other Basic Documents. The Guarantors
acknowledge and agree that the Guarantors have no claims,
counterclaims, offsets, credits or defenses to the Basic
Documents and the performance of the Guarantors' obligations
thereunder, or if Guarantors did have any such claims,
counterclaims, offsets, credits or defenses to the Basic
Documents or any transaction related to the Basic Documents,
the same are hereby waived, relinquished and released in
consideration of the Banks' execution and delivery of this
First Amendment.
22. No Other Changes. Except as expressly modified and amended in
this First Amendment, all of the terms, provisions and
conditions of the Basic Documents shall remain unchanged.
23. Counterparts. This First Amendment may be executed in any
number of counterparts and by the parties hereto in separate
counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken
together shall constitute one and the same instrument.
24. ENTIRETY. THIS FIRST AMENDMENT AND THE OTHER BASIC DOCUMENTS
EMBODY THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDE
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ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO
THE SUBJECT MATTER HEREOF. THESE BASIC DOCUMENTS REPRESENT
THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
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This First Amendment is executed as of the day and year first
written above.
BORROWER
ATTEST: LADD FURNITURE, INC.
By:____________________ By:_____________________________
Assistant Secretary William S. Creekmuir
Senior Vice President and
Chief Financial Officer
(corporate seal)
GUARANTORS
ATTEST: PENNSYLVANIA HOUSE, INC.
By:_____________________ By:________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: BROWN JORDAN COMPANY
By:_____________________ By:________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: CLAYTON-MARCUS COMPANY, INC.
By:____________________ By:________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
[signatures continued]
ATTEST: LADD CONTRACT SALES CORPORATION
By:_____________________ By:_______________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: FOURNIER FURNITURE, INC.
By:_____________________ By:_________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: BARCLAY FURNITURE CO.
By:______________________ By:_________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: AMERICAN FURNITURE COMPANY,
INCORPORATED
By:_____________________ By:_________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
[signature continued]
ATTEST: PILLIOD FURNITURE, INC.
By:_____________________ By:_________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
ATTEST: LEA INDUSTRIES, INC.
(a North Carolina corporation)
By:_____________________ By:_________________________________
Assistant Secretary William S. Creekmuir
Vice President
(corporate seal)
BANKS
NATIONSBANK, N.A. (CAROLINAS) f/k/a
NATIONSBANK BANK OF NORTH CAROLINA, N.A.
as Agent and as a Bank
By:_____________________________
Gregory W. Powell
Senior Vice President
CIBC INC.
By:_____________________________
Name:___________________________
Title:__________________________
CREDITANSTALT CORPORATE FINANCE, INC.
By:_____________________________
Name:___________________________
Title:__________________________
[signatures continued]
WACHOVIA BANK OF NORTH CAROLINA, N.A.
By:_____________________________
Name:___________________________
Title:__________________________
ABN AMRO BANK N.A.
By:_____________________________
Name:___________________________
Title:__________________________
BRANCH BANK AND TRUST COMPANY
By:_____________________________
Name:___________________________
Title:__________________________
COMMONWEALTH BANK, a division of
MERIDIAN BANK
By:_____________________________
Name:___________________________
Title:__________________________
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By:_____________________________
Name:___________________________
Title:__________________________
PNC BANK, NATIONAL ASSOCIATION
By:_____________________________
Name:___________________________
Title:__________________________
[signatures continued]
NBD BANK f/k/a NBD BANK, N.A.
By:_____________________________
Name:___________________________
Title:__________________________