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Exhibit 10(p)
THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
This Amendment ("Amendment") is made as of the ______ day of July,
1999, (the "Third Amendment Agreement Date") by and between DMI FURNITURE, INC.,
a Delaware corporation (the "Company") and BANK ONE, INDIANA, N.A.
(the "Bank").
WHEREAS, the Company and the Bank entered into Amended and Restated
Credit Agreement dated October 3, 1997, as amended (collectively, the
"Agreement"); and
WHEREAS, the parties hereto desire to amend the Agreement as set forth
below:
NOW, THEREFORE, the parties hereto agree as follows:
1. Capitalized terms not defined herein shall have the meaning
ascribed in the Agreement.
2. The following new definition is added to Section 1.01 of the
Agreement to read as follows:
"THIRD AMENDMENT" means the Third Amendment to Amended and
Restated Credit Agreement, dated as of the Agreement Date,
executed by the Company, Guarantor and the Bank.
3. The definitions of "Borrowing Base" and "Maximum Availability"
under Section 1.01 of the Agreement is hereby amended and
restated to read as follows:
"BORROWING BASE" means, at any date a determination thereof
is to be made, an amount equal to the sum
of: (a) Eighty Percent (80%) of the net book value (as
determined in accordance with GAAP) of Eligible Accounts; (b)
Fifty Percent (50%) of the Eligible Finished Goods Inventory
Value and the Eligible Wood Stock Inventory Value; (c)
Twenty-Five Percent (25%) of the Eligible Miscellaneous
Inventory Value; and (d) strictly for the period from the
Third Amendment Agreement Date through February 27, 2000, the
sum of $2,000,000, all of the foregoing as determined on the
basis of the information contained in the most recent
Borrowing Base Certificate or as determined by the Bank upon
an inspection of the Company' s books and records and
inventory by the Bank or any other representative of the
Bank; provided, however, the Borrowing Base shall be $0
commencing five (5) calendar days after the Company's failure
to furnish to the Bank a monthly Borrowing Base Certificate
within the period of time required under Subsection
6.01(b)(9) of this Agreement, and continuing until the Bank
shall have received a properly completed certified Borrowing
Base Certificate.
"MAXIMUM AVAILABILITY" means, subject to the terms of Section
2.06: (i) from and after the Third Amendment Agreement Date to
and including February 27, 2000, $23,000,000; (ii) from and
after February 27, 2000 until the Scheduled Revolving Loan
Maturity Date, $20,000,000.
4. Section 6.01(g)(3) of the Agreement is hereby amended and
restated in its entirety to read as follows:
(3) RATIO OF TOTAL FUNDED DEBT TO EBITDA. As of the close of
each fiscal quarter of the Company ending after the Third
Amendment Agreement Date, the Company, for the period of the
four consecutive fiscal quarters shall have a Ratio of Total
Funded Debt to EBITDA of not greater than (i) 4.5 to 1.00 at
the close of each fiscal quarter ending at any time from
Third Amendment Agreement Date to February 28, 2000; (ii)
4.00 to 1.00 at the close of each fiscal quarter ending at
any time from March 1, 2000 to May 31, 2000, (iii) 3.75 to
1.00 at the close of each fiscal quarter ending at any time
from June 1, 2000 to August 31, 2000, (iv) 3.50 to 1.00 at
the close of each fiscal quarter ending at any time from
September 1, 2000 to August 31, 2001, and (v) 3.25 to 1.00 at
the close of each fiscal quarter ending at any time from
September 1, 2001 to August 31, 2002,
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and (vi) 3.00 to 1.00 at the close of each fiscal quarter
ending at any time from and after September 1, 2002.
5. The Company represents and warrants that (a) the representations and
warranties contained in the Agreement are true and correct in all material
respects as of the date of this Amendment, (b) no condition, act or event which
could constitute an Event of Default under the Agreement exists, and (c) no
condition, event, act or omission has occurred, which, with the giving of notice
or passage of time, would constitute an Event of Default under the Agreement.
6. The Company agrees to pay all fees and out-of-pocket disbursements
incurred by the Bank in connection with this Amendment, including legal fees
incurred by the Bank in the preparation, consummation, administration and
enforcement of this Amendment.
7. This Amendment shall become effective only after it is fully
executed by the Company and the Bank and the Bank shall have received from the
Company the following documents:
(a) Third Amendment to Amended and Restated Credit Agreement
(b) Modification to the Promissory Note
Except as amended by this Amendment, the Agreement shall remain in full force
and effect in accordance with its terms.
8. This Amendment is a modification only and not a novation. Except for
the above-quoted modification(s), the Agreement, any agreement or security
document, and all the terms and conditions thereof, shall be and remain in full
force and effect with the changes herein deemed to be incorporated therein. This
Amendment is to be considered attached to the Agreement and made a part thereof.
This Amendment shall not release or affect the liability of any guarantor,
surety or endorser of the Agreement or release any owner of collateral securing
the Agreement. The validity, priority and enforceability of the Agreement shall
not be impaired hereby. To the extent that any provision of this Amendment
conflicts with any term or condition set forth in the Agreement, or any
agreement or security document executed in conjunction therewith, the provisions
of this Amendment shall supersede and control. Company acknowledges that as of
the date of this Amendment it has no offsets with respect to all amounts owed by
Company to Bank and Company waives and releases all claims which it may have
against Bank arising under the Agreement on or prior to the date of this
Amendment.
9. 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. Company releases
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. 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 amendments, should any
be requested.
IN WITNESS WHEREOF, the parties have entered into this Amendment as of
the day and year first above written.
BANK ONE, INDIANA, N.A. DMI FURNITURE, INC.
By: _______________________________ By: _________________________
Xxxxx X. Little, Vice President Xxxxxx X. Xxxx, VP/CFO
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ACKNOWLEDGMENT AND AGREEMENT BY GUARANTOR AND/OR OWNER
OF COLLATERAL SECURING THE PROMISSORY NOTE
The undersigned (i) consent to the modification of the Agreement and all other
matters in the foregoing Amendment and, if a guarantor (ii) reaffirm the
Guaranty Agreement, dated June 9, 1994, and any other agreements, documents and
instruments securing or otherwise relating thereto ("Guarantor Documents"),
(iii) acknowledge that the Guarantor Documents continue in full force and
effect, remain unchanged, except as specifically modified hereby, and are valid,
binding and enforceable in accordance with their respective terms, (iv) agree
that all references, if any, in the Guarantor Documents to the Agreement are
modified to refer to that document as modified by the Amendment, and (v) agree
to be bound by the release of Bank set forth in the Amendment.
DMI MANAGEMENT, INC.
By: ____________________________
Xxxxxx X. Xxxx, CFO
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