Exhibit 10.17
FIRST AMENDMENT
TO
LOAN AND SECURITY AGREEMENT
This First Amendment to Loan and Security Agreement (the
"Amendment"), made as of the 23rd day of February, 2000, among FLOORING AMERICA,
INC., a Delaware corporation, 4 FLOORS, INC., an Ohio corporation, ADVANCE FLOOR
DECORATORS, INC., a Michigan corporation, BAILEY & ROBERTS CARPETMAX OF
TENNESSEE, INC., a Tennessee corporation, CARPETMAX OF UTAH, INC., a Utah
corporation, FLOORING AMERICA FRANCHISING, L.P. (f/k/a Carpetmax, L.P.), a
Georgia limited partnership, CARPETMAX RETAIL STORES, INC., a Delaware
corporation, MANASOTA CARPET, INC., a Florida corporation, WADSWORTH & OWENS
DECORATING CENTER, INC., a Florida corporation, CARPETSPLUS OF AMERICA, INC., a
Georgia corporation, GCO CARPET OUTLET, INC., an Alabama corporation, KAREN'S
INC., a Michigan corporation, MAXIM RETAIL GROUP, INC., a Georgia corporation,
MAXIM RETAIL STORES, INC., a Georgia corporation, C & S TEXTILES, INC., an Idaho
corporation, COLORADO CARPET & RUGS, INC., a Colorado corporation, TRI-R OF
ORLANDO, INC., a Georgia corporation, and GCO, INC., a Nevada corporation, as
borrowers ("Borrowers" and each "Borrower"), the LENDERS (as defined below), and
FOOTHILL CAPITAL CORPORATION, as agent for the Lenders (the "Agent"),
W I T N E S S E T H:
WHEREAS, the Borrowers, the financial institutions party thereto
(such financial institutions, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), and the Agent are parties to that certain Loan
and Security Agreement dated as of January 28, 2000 (the "Loan Agreement"); and
WHEREAS, the Agent has agreed to enter into a Blocked Account
Agreement (as defined in the Loan Agreement) with SunTrust Bank so long as the
Borrowers covenant and agree to replace such Blocked Account Agreement with an
acceptable Blocked Account Agreement as set forth in this Amendment; and
WHEREAS, the Borrowers have requested that certain other terms and
conditions of the Loan Agreement be amended; and
WHEREAS, the Agent and the Lenders have agreed to the requested
amendments on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree that all capitalized terms used but not otherwise defined herein
shall have the meanings ascribed thereto in the Loan Agreement, and further
agree as follows:
1. AMENDMENTS TO ARTICLE 3 OF THE LOAN AGREEMENT.
(a) Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete the reference to "February
7, 2000" in subsection (c) thereof and to substitute "March 1, 2000" therefor.
(b) Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete the reference to "February
14, 2000" in subsection (e) thereof and to substitute "March 1, 2000" therefor.
(c) Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete subsection (g) thereof in
its entirety and to substitute the following therefor:
"(g) on or before March 1, 2000, Borrowers shall
have delivered to Agent evidence that the Liens referenced on
Schedule 3.3 have been terminated. Prior to such date, such Liens
shall be deemed to be Permitted Liens;"
(d) Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete subsection (j) thereof in
its entirety and to substitute the following therefor:
"(j) on or before the date forty-five (45) days
following the Closing Date, Borrowers shall have delivered to
Agent a Blocked Account Agreement in form and substance reasonably
acceptable to Agent for a new Concentration Account and Credit
Card Concentration Account, evidence that the Concentration
Account and the Credit Card Concentration Account in existence on
the Closing Date have been closed, and all documentation necessary
to provide that all Collections deposited into any Blocked Account
(other than the new Concentration Account and the new Credit Card
Concentration Account) will thereafter be transferred to the new
Concentration Account or the new Credit Card Concentration
Account, as the case may be, on a daily basis as otherwise
provided for in the relevant Blocked Account Agreement;"
(d) Article 3 of the Loan Agreement, CONDITIONS
SUBSEQUENT, is hereby modified and amended to delete subsection (o) thereof in
its entirety and to substitute the following therefor:
"(o) on or before May 17, 2000, Borrowers shall
deliver to Agent a certificate of title for each vehicle owned by a Borrower."
2. WAIVER. Any Defaults with respect to Section 3.3(c), (e)
or (g) existing on the date hereof immediately prior to the effectiveness of
this Amendment and the Events of Default existing on the date hereof immediately
prior to the effectiveness of this Amendment under Section 8.2 arising out of
Borrowers' failure to satisfy the conditions set forth in Section 3.3(c), (e)
and (g) are hereby waived.
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3. NO OTHER AMENDMENT OR WAIVER. The execution, delivery and
effectiveness of this Amendment shall not, except as expressly provided above,
operate as a waiver of any right, power or remedy of the Agent or the Lenders
under the Loan Agreement or any of the other Loan Documents, nor constitute a
waiver of any provision of the Loan Agreement or any of the other Loan
Documents. Except for the amendments and waiver expressly set forth above, the
text of the Loan Agreement and all other Loan Documents shall remain unchanged
and in full force and effect and the Borrowers hereby ratify and confirm their
obligations thereunder, including without limitation their obligations under
Section 3.3 of the Loan Agreement, as amended hereby. This Amendment shall not
constitute a modification of the Loan Agreement or a course of dealing with the
Agent or the Lenders at variance with the Loan Agreement such as to require
further notice by the Agent or the Lenders to require strict compliance with the
terms of the Loan Agreement and the other Loan Documents in the future, except
as expressly set forth herein. The Borrowers acknowledge and expressly agree
that the Agent and the Lenders reserve the right to, and do in fact, require
strict compliance with all terms and provisions of the Loan Agreement and the
other Loan Documents, including without limitation Section 3.3 of the Loan
Agreement, as amended hereby. The Borrowers have no knowledge of any challenge
to the Agent's or the Lenders' claims arising under the Loan Documents or the
effectiveness of the Loan Documents.
4. CONDITIONS OF EFFECTIVENESS.
This Amendment shall become effective as of the date
hereof when, and only when, the Agent, on behalf of the Lenders, shall have
received, in form and substance satisfactory to it:
(a) counterparts of this Amendment executed by the
Borrowers, the Agent and each of the Lenders; and
(b) such other information, documents, instruments or
approvals as the Agent, the Lenders or the Agent's counsel may require.
5. REPRESENTATIONS AND WARRANTIES OF THE BORROWERS.
Each Borrower represents and warrants as follows:
(a) Such Borrower is a corporation or limited
partnership, as the case may be, organized, validly existing and in good
standing under the laws of the jurisdiction indicated at the beginning of this
Amendment;
(b) The execution, delivery and performance by such
Borrower of this Amendment and the Loan Documents, as amended hereby, are within
such Borrower's corporate powers, have been duly authorized by all necessary
corporate action and do not contravene (i) such Borrower's articles or
certificate of incorporation, or (ii) law or any contractual restriction binding
on or affecting such Borrower;
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(c) Except for approvals which have been obtained, no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body, is required for the due execution,
delivery and performance by such Borrower of this Amendment or any of the Loan
Documents, as amended hereby, to which such Borrower is or will be a party;
(d) This Amendment and each of the other Loan
Documents, as amended hereby, to which such Borrower is a party, constitute
legal, valid and binding obligations of such Borrower, enforceable against such
Borrower in accordance with their respective terms; and
(e) Except for the Defaults and Events of Default
waived as set forth in Section 3 hereof, no Default or Event of Default is
existing.
6. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS. Upon the
effectiveness of this Amendment, on and after the date hereof each reference in
the Loan Agreement to "this Agreement," "hereunder," "hereof" or words of like
import referring to the Loan Agreement, and each reference in the other Loan
Documents to "the Loan Agreement," "thereunder," "thereof" or words of like
import referring to the Loan Agreement, shall mean and be a reference to the
Loan Agreement as amended hereby.
7. COSTS, EXPENSES AND TAXES. Each Borrower, jointly and
severally, agrees to pay on demand all reasonable costs and expenses in
connection with the preparation, execution, delivery, administration,
modification and amendment of this Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel for the Agent with respect
thereto and with respect to advising the Agent as to its rights and
responsibilities hereunder and thereunder.
8. GOVERNING LAW. This Amendment shall be governed by and
construed in accordance with the laws of the State of Georgia, without regard to
conflict of laws principles of such state.
9. LOAN DOCUMENT. This Amendment shall be deemed to be a Loan
Document for all purposes.
10. COUNTERPARTS. This Amendment may be executed by one or
more of the parties hereto on any number of separate counterparts, each of which
shall be deemed an original and all of which, taken together, shall be deemed to
constitute one and the same instrument. Delivery of an executed counterpart of
this Amendment by facsimile transmission shall be as effective as delivery of a
manually executed counterpart hereof.
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IN WITNESS WHEREOF, the parties hereto have caused their
respective duly authorized officers or representatives to execute and deliver
this Amendment as of the day and year first written above.
FLOORING AMERICA, INC.,
a Delaware corporation
By:
Name: Thomas Leahey
Title: Executive Vice President
4 FLOORS, INC.,
an Ohio corporation
By:
Name: Thomas Leahey
Title: Vice President
ADVANCE FLOOR DECORATORS, INC.,
a Michigan corporation
By:
Name: Thomas Leahey
Title: Vice President
BAILEY & ROBERTS CARPETMAX OF
TENNESSEE, INC.,
a Tennessee corporation
By:
Name: Thomas Leahey
Title: Vice President
CARPETMAX OF UTAH, INC.,
a Utah corporation
By:
Name: Thomas Leahey
Title: Vice President
FLOORING AMERICA FRANCHISING, L.P.,
a Georgia limited partnership
By: Flooring America, Inc., its
general partner
By:
Name: Thomas Leahey
Title: Executive Vice President
CARPETMAX RETAIL STORES, INC.,
a Delaware corporation
By:
Name: Thomas Leahey
Title: Vice President
MANASOTA CARPET, INC.,
a Florida corporation
By:
Name: Thomas Leahey
Title: Vice President
WADSWORTH & OWENS DECORATING
CENTER, INC.,
a Florida corporation
By:
Name: Thomas Leahey
Title: Vice President
CARPETSPLUS OF AMERICA, INC.,
a Georgia corporation
By:
Name: Thomas Leahey
Title: Vice President
GCO CARPET OUTLET, INC.,
an Alabama corporation
By:
Name: Thomas Leahey
Title: Vice President
KAREN'S INC.,
a Michigan corporation
By:
Name: Thomas Leahey
Title: Vice President
MAXIM RETAIL GROUP, INC.,
a Georgia corporation
By:
Name: Thomas Leahey
Title: Vice President
MAXIM RETAIL STORES, INC.,
a Georgia corporation
By:
Name: Thomas Leahey
Title: Vice President
C&S TEXTILES, INC.,
an Idaho corporation
By:
Name: Thomas Leahey
Title: Vice President
COLORADO CARPET & RUGS, INC.,
a Colorado corporation
By:
Name: Thomas Leahey
Title: Vice President
TRI-R OF ORLANDO, INC.,
a Georgia corporation
By:
Name: Thomas Leahey
Title: Vice President
GCO, INC.,
a Nevada corporation
By:
Name: Thomas Leahey
Title: Vice President
FOOTHILL CAPITAL CORPORATION,
a California corporation with an office
in Atlanta, Georgia, as Agent and as a
Lender
By:
Name: Todd Colpitts
Title: Vice President