AMENDMENT AND WAIVER AGREEMENT
THIS AMENDMENT AND WAIVER AGREEMENT (this "Agreement"), dated as of
March 29, 1996, is entered into among LADD Furniture, Inc. (the "Company"),
NationsBank, N.A. f/k/a NationsBank, N.A. (Carolinas) f/k/a NationsBank of North
Carolina, N.A., as Agent (the "Agent"), the guarantors identified as such on the
signature pages attached hereto (the "Guarantors"), and the banks identified as
such on the signature pages hereto (the "Banks"). Terms used but not otherwise
defined herein shall have the meanings provided 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,
that certain First Amendment to Amended and Restated Credit Agreement dated as
of February 16, 1995, that certain Second Amendment to Amended and Restated
Credit Agreement dated as of March 30, 1995 and that certain Third Amendment to
Amended and Restated Credit Agreement (the "Third Amendment") dated as of August
15, 1995 (collectively, the "Credit Agreement").
B. The Company has informed the Agent that an Event of Default may
exist under the terms of the Credit Agreement due to the Company's failure to be
in compliance with Section 8.12 of the Credit Agreement for the Quarterly Date
ending closest to March 31, 1996 (the "March 31 Financial Covenant Default").
C. Pursuant to the terms of the Third Amendment, the Company and the
other Obligors (i) executed and delivered certain security agreements, pledge
agreements and UCC financing statements that were placed into escrow and (ii)
agreed, if the Term Loan was not reduced to $35,000,000 or less prior to March
31, 1996, to (a) allow the release of the documents set forth in (i) above and
(b) pledge to the Banks all of their interests in real estate, in each case to
secure their obligations under the Credit Agreement and the other Basic
Documents.
D. The Company has entered into a proposal letter with NationsBank,
N.A. (South) and Fleet Capital Corporation the terms of which would provide new
financing to the Obligors to enable them to pay the Loans under the Credit
Agreement in full.
E. The Company has requested that the Banks (i) waive their right to
enforce any of their rights and remedies under the Credit Agreement with respect
to the March 31 Financial Covenant Default and (ii) postpone the requirement
that the Obligors pledge their interests in real estate to the Banks.
F. The Company has leased equipment and other property (together with
all accessories, parts, repairs, replacements, substitutions, attachments,
modifications, additions, improvements, upgrades and accessions of, to or upon
said property, and all proceeds, including insurance proceeds, thereof and
therefrom, the "Leased Equipment") pursuant to certain Equipment Leasing
Agreements (together with any similar agreements executed subsequent to the date
of this Agreement, the "Equipment Leasing Agreements") with BOT Financial
Corporation ("BOT") and Unionbanc Leasing Corporation ("Unionbanc") and has
requested that the Banks acknowledge that (i) to the extent the Equipment
Leasing Agreements constitute leases of the Leased Equipment, the Company does
not have any ownership interest in the Leased Equipment and, therefore, the
Banks do not, and upon the fulfillment of the actions contemplated by paragraph
2(a) this Agreement will not, have a security interest in such Leased Equipment,
(ii) to the extent the Equipment Leasing Agreements constitute financings
secured by the Leased Equipment, any security interest that the Banks may now or
hereafter have in such Leased Equipment or any part thereof is and will be
junior and subordinated as to priority to that of BOT and Unionbanc, as
applicable, and (iii) in the event of any default by the Company under any of
the Equipment Leasing Agreements, BOT or Unionbanc, as applicable, may exercise
any and all of its remedies under said Equipment Leasing Agreements, or at law,
in equity or in bankruptcy, including the right to repossess and dispose of the
Leased Equipment, without notice to, or the consent of, the Banks or the Agent.
G. The Banks have agreed to execute and deliver this
Agreement on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Consent and Waiver. Subject to the provisions hereof, the Banks
hereby waive the rights and remedies which the Banks would otherwise have with
respect to the March 31 Financial Covenant Default. This is a limited one-time
waiver and does not (a) modify or amend Section 8.12 of the Credit Agreement,
(b) allow the Company to be in violation of Section 8.12 of the Credit Agreement
for any other Quarterly Date or (c) constitute a waiver of any other Default or
Event of Default that otherwise may exist under the terms of the Credit
Agreement.
2. Covenants and Agreements.
(a) Each Obligor agrees that, (i) pursuant to that Escrow
Agreement dated as of September 12, 1995 (the "Escrow Agreement") among
the Company, the Agent, the Guarantors identified as such on the
signature pages thereto and
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NationsBank, N.A. f/k/a NationsBank, N.A. (Carolinas), as escrow agent
(the "Escrow Agent"), instructions shall be given to the Escrow Agent
to deliver and release the Escrow Documents (as defined in the Escrow
Agreement) to the Agent on March 31, 1996 (or the first Business Day
thereafter), (ii) the Agent will file those Escrow Documents that
consist of UCC financing statements in the appropriate filing offices,
(iii) each Obligor will execute and deliver to the Agent all other
documents and take all further action as the Agent shall reasonably
request in order to grant a perfected lien to the Banks in all of the
personal property assets of each Obligor including all stock of any
Subsidiaries of any Obligor and (iv) any fees and expenses incurred in
connection with the foregoing shall be for the account of the Company.
(b) Notwithstanding the provisions of the Third Amendment, the
Banks agree that the Obligors shall not be required, at this time, to
pledge their interests in real estate to the Banks to secure their
obligations under the Credit Agreement and the other Basic Documents.
If, however, by May 15, 1996, the Obligors have not repaid the Loans in
full and satisfied all of their obligations under or with respect to
the Credit Agreement and the other Basic Documents, then each Obligor
shall within 30 days after requested (i) execute and deliver to the
Agent mortgages, deeds of trusts, deeds to secure debt or such other
documents as are necessary to provide the Banks with a perfected lien
on each parcel of real estate owned by such Obligor, (ii) execute and
deliver to the Agent (to the extent permitted) leasehold mortgages on
all material real property leased by such Obligor, (iii) provide such
appraisals, environmental reports, title insurance and other documents
or information regarding its real property as reasonably requested by
the Agent and (iv) assist in obtaining legal opinions from local
counsel in each state where the real property of such Obligor is
located as to the enforceability of such mortgage documents. It is
understood that failure of the Agent and the Banks to timely obtain
(i), (ii), (iii) and (iv) above shall constitute an Event of Default.
3. Acknowledgement. The Banks acknowledge that (i) to the extent the
Equipment Leasing Agreements constitute leases of the Leased Equipment, the
Company does not have any ownership interest in the Leased Equipment and,
therefore, the Banks do not, and upon the fulfillment of the actions
contemplated by paragraph 2(a) of this Agreement will not, have a security
interest in such Leased Equipment, (ii) to the extent the Equipment Leasing
Agreements constitute financings secured by the Leased Equipment, any security
interest that the Banks may now or hereafter have in such Leased Equipment or
any part thereof is and will be junior and subordinated as to priority to that
of BOT and Unionbanc, as applicable, and (iii) in the event of any default by
the Company under any of the Equipment Leasing
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Agreements, BOT or Unionbanc, as applicable, may exercise any and all of its
remedies under said Equipment Leasing Agreements, or at law, in equity or in
bankruptcy, including the right to repossess and dispose of the Leased
Equipment, without notice to, or the consent of, the Banks or the Agent. The
Banks (A) authorize the Agent to acknowledge in writing to BOT and Unionbanc, as
applicable, the terms of this paragraph 3 and (B) agree that the Agent may
execute and deliver all further instruments and documents and take such further
reasonable action that may be necessary to carry out the intent of this
paragraph.
4. Condition Precedent. This Agreement shall not be effective until the
Agent has received copies of this Agreement duly executed by the Obligors and
the Majority Banks.
5. Liens. The Company and the Guarantors, as applicable, affirm the
liens and security interests created and granted in the Credit Agreement and the
other Basic Documents and agree that this Agreement shall in no manner adversely
affect or impair such liens and security interests.
6. Representations and Warranties. The Company hereby represents and
warrants to the Banks and the Agent that (a) no Default or Event of Default
exists and is continuing under the Credit Agreement except as is being waived
pursuant to paragraph 1 above; (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, the same are hereby waived, relinquished and released in
consideration of the Banks' execution and delivery of this Agreement; (c) since
the date of the last financial statements of the Company delivered to the 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 and (d)
the Company has sold, and no longer has any ownership interest in, the Leased
Equipment described in the Equipment Leasing Agreements, including, without
limitation, the Leased Equipment described on Schedules A1 and A2 hereto.
7. Acknowledgment of Guarantors. The Guarantors acknowledge and consent
to all of the terms and conditions of this Agreement and agree that this
Agreement 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 Agreement.
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8. No Other Changes. Except as expressly modified and amended in this
Agreement, all of the terms, provisions and conditions of the Basic Documents
shall remain unchanged.
9. Counterparts. This Agreement 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.
10. ENTIRETY. THIS AGREEMENT, THE CREDIT AGREEMENT 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.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
COMPANY
ATTEST: LADD FURNITURE, INC.
By:____________________ By:_____________________________
Assistant Secretary William S. Creekmuir
Executive 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: 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)
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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)
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BANKS
NATIONSBANK, N.A. f/k/a
NATIONSBANK, N.A. (CAROLINAS) f/k/a
NATIONSBANK OF NORTH CAROLINA, N.A.
as Agent and as a Bank
By:_____________________________
Richard G. Parkhurst, Jr.
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:__________________________
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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:__________________________
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