SECOND AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
This Second Amendment to Amended and Restated Credit
Agreement (this "Second Amendment"), dated as of March 30, 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 and that certain First Amendment to
Amended and Restated Credit Agreement dated as of February 16,
1995 (collectively, the "Credit Agreement").
B. The Company has requested that the Credit Agreement be
amended to accommodate the creation of a new subsidiary and to
allow such subsidiary to purchase and sell certain of the
Company's trade receivables.
C. The Banks have agreed to such amendment 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. 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 Material Subsidiary shall be amended
in its entirety to read as follows:
"Material Subsidiary" shall mean, as at any date of
determination thereof, any Subsidiary of the Company
whose net sales (for the rolling four Quarterly Periods
ending on the Quarterly Date falling on or immediately
preceding such date of determination) exceed
$20,000,000 or whose assets exceed $15,000,000 as at
such date; provided that each of Cherry Grove, Inc.,
LFI Capital
Management Inc. and LADD Funding Corp.
shall not be deemed to be a Material Subsidiary; and
provided further that, notwithstanding the foregoing,
each Guarantor (as of the date hereof) shall be deemed
to be a "Material Subsidiary" and once a Subsidiary
becomes a Guarantor it shall remain a Guarantor
regardless if it still meets the definition of a
Material Subsidiary.
(b) The definition of Pledgor shall be amended in its
entirety to read as follows:
"Pledgor" shall mean each holder of outstanding shares
of capital stock of any Special Subsidiary other than
LADD Funding Corp.
(c) The definition of Special Subsidiary shall be amended
in its entirety to read as follows:
"Special Subsidiary" shall mean, each of Cherry Grove,
Inc., a Delaware corporation, LFI Capital Management,
Inc., a Delaware corporation and LADD Funding Corp., a
Delaware corporation.
(d) The definition of Special Subsidiary Events of Default
shall be amended in its entirety to read as follows:
"Special Subsidiary Events of Default" shall mean the
occurrence of any of the following:
(a) Prohibition of Fundamental Change; Capitalization.
Any Special Subsidiary enters into any transaction of merger
or consolidation or amalgamation, or liquidates, winds up or
dissolves itself (or suffers any liquidation or
dissolution); or any Special Subsidiary acquires any
business or assets from, or acquires capital stock of, or is
a party to any acquisition of, any Person; or any Special
Subsidiary conveys, sells, leases, transfers or otherwise
disposes of, in one transaction or a series of transactions,
all or any material part of its business or assets, whether
now owned or hereafter acquired; or any Special Subsidiary
authorizes any equity capital (other than equity capital
issued by LADD Funding Corp. to the Company); or any Special
Subsidiary or the issuer of the Pledged Stock fails to note
on its record books the beneficial ownership interest of the
Pledgors and, as collateral assignee of the Pledgors, the
Agent in its capital stock; provided however, that the
foregoing shall not include (i) any acquisition by Cherry
Grove, Inc. of intellectual property assets from any Obligor
or any issuance of equity securities in connection
therewith; (ii) any acquisition by LFI Capital Management,
Inc. of the Indebtedness of any Obligor or any other
Subsidiary of the Company or the acquisition of any note
executed by LADD Funding Corp. in
favor of the Company; or (iii) any purchase of receivables
by LADD Funding Corp. from the Company or any Receivables Sale
by LADD Funding Corp.
(b) Limitation on Liens. Any Special Subsidiary
creates, incurs, assumes or suffers to exist any Lien upon
any of its property, assets or revenues, whether now owned
or hereafter acquired, except (i) Liens imposed by any
governmental authority for taxes, assessments or charges not
yet due or which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect
thereto are maintained on the books of such Special
Subsidiary in accordance with GAAP or (ii) Liens on the
assets of LADD Funding Corp. in connection with a
Receivables Sale.
(c) Indebtedness. Any Special Subsidiary creates,
incurs or suffers to exist any Indebtedness except for (i)
Indebtedness owing to any other Special Subsidiary or to the
Company or (ii) unsecured Indebtedness of LADD Funding Corp.
not to exceed, in the aggregate, $4,750 at any one time.
(d) Investments. Subject to the proviso in respect of
LFI Capital Management, Inc. contained in clause (a) above,
any Special Subsidiary makes or permits to remain
outstanding any Investments other than short term
Investments of excess working capital.
(e) Capital Expenditures. Any Special Subsidiary
makes any capital expenditures in excess of $10,000 (in the
aggregate) during any fiscal year of such Special
Subsidiary.
(f) Lines of Business. Any Special Subsidiary engages
in any line or lines of business activity other than the
business of (i) in the case of Cherry Grove, Inc., owning
and licensing intellectual property, (ii) in the case of LFI
Capital Management, Inc., holding Indebtedness of the
Obligors or any other Subsidiary of the Company and (iii) in
the case of LADD Funding Corp., the purchase of receivables
generated by the Company and the sale of receivables.
(g) Business Operations. Any Special Subsidiary:
(i) pays any salary or any other form of
compensation for services to any Person, except (I) as
necessary in the ordinary course of conducting its
business, (II) the reasonable fees and expenses of its
outside counsel and auditors, and (III) payments to
members of its board of directors not exceeding
customary levels of similarly situated companies;
(ii) incurs any obligation, contractually or
otherwise, to any Person other than as is related or
incidental to the activities contemplated by clauses
(a) and (f) above; or
(iii) creates or maintains any Plan, is or
becomes a participant in any Multiemployer Plan or
incurs any liability to the PBGC.
(h) Capital Stock. (i) All of the issued and
outstanding capital stock of Cherry Grove, Inc. and LFI
Capital Management, Inc. is (A) not owned by the Pledgors
executing the Pledge Agreement or (B) is not subject to a
first priority and perfected security interest in favor of
the Agent, for the benefit of the Banks, (ii) any of the
capital stock of Cherry Grove, Inc. or LFI Capital
Management, Inc. is subject to a Lien other than a Lien
under the Pledge Agreement or (iii) any of the capital stock
of LADD Funding Corp. is subject to a Lien or is owned by
any Person other than the Company.
2. 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 Second Amendment shall in no manner adversely
affect or impair such liens and security interests.
3. 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 Second 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.
4. Acknowledgment of Guarantors. The Guarantors acknowledge
and consent to all of the terms and conditions of this
Second Amendment and agree that this Second 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 Second Amendment.
5. No Other Changes. Except as expressly modified and amended
in this Second Amendment, all of the terms, provisions and
conditions of the Basic Documents shall remain unchanged.
6. Counterparts. This Second 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.
7. ENTIRETY. THIS SECOND AMENDMENT AND THE OTHER BASIC
DOCUMENTS EMBODY THE ENTIRE AGREEMENT BETWEEN THE PARTIES
AND SUPERSEDE 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.
This Second 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)
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)
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)
[signatures continued]
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:__________________________
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:__________________________
[signatures continued]
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA
By:_____________________________
Name:___________________________
Title:__________________________
PNC BANK, NATIONAL ASSOCIATION
By:_____________________________
Name:___________________________
Title:__________________________
NBD BANK f/k/a NBD BANK, N.A.
By:_____________________________
Name:___________________________
Title:__________________________