Exhibit 10.1
September 9, 2005
The Rowe Companies and
the other “Borrowers” party
hereto
1650 Tysons Boulevard, Suite 710
McLean, Virginia 22102
Ladies and Gentlemen:
Reference is made to that certain
Loan and Security Agreement dated May 15, 2002 (as at any time
amended, the “Loan Agreement”), among The Rowe
Companies, a Nevada corporation, Rowe Diversified, Inc., a Delaware
corporation, Rowe Furniture Wood Products, Inc., a California
corporation, Rowe Properties, Inc., a California corporation,
Storehouse, Inc., a Georgia corporation, and Rowe Furniture, Inc.,
a Virginia corporation (hereinafter referred to collectively as
“Borrowers” and individually as a
“Borrower”), the various financial institutions
(collectively, “Lenders”) named in the Loan Agreement,
and Bank of America, N.A. (as successor-in-interest to Fleet
Capital Corporation), in its capacity as collateral and
administrative agent for the Lenders (together with its successors
in such capacity, “Agent”). Capitalized terms used
herein and not otherwise defined herein shall have the meaning
ascribed to such terms in the Loan Agreement.
The parties hereto agree that the
Loan Agreement is hereby amended by deleting the definition of
“Inventory Formula Amount” in Appendix A to the Loan
Agreement and by substituting in lieu thereof the
following:
Inventory Formula
Amount - on any date of
determination thereof, an amount equal to the lesser of
(i) the lesser of (a) $24,000,000 during the period commencing
on September 9, 2005 and ending on October 31, 2005, and
$22,000,000 at all times thereafter or (b) 90% (or such lesser
percentage as Agent may in its reasonable credit judgment determine
from time to time) of the net liquidation value of Eligible
Inventory (as determined from time to time based upon appraisals
conducted by Ozer Valuation Services or such other independent
appraisers acceptable to Agent) or (ii) the sum of
(a) 16% (or such lesser percentage as Agent may in its
reasonable credit judgment determine from time to time) of the
Value of Eligible Inventory on such date consisting of raw
materials plus (b) the lesser of (1) $2,000,000 or
(2) 45% (or such lesser percentage as Agent may in its
reasonable credit judgment determine from time to time) of the
Value of Eligible Inventory on such date consisting of
work-in-process plus (c) 71% (or such lesser percentage
as Agent may in its reasonable credit judgment determine from time
to time) of the Value of Eligible Inventory on such date consisting
of retail and manufactured finished goods.
In consideration of Agent’s
and Lenders’ willingness to enter into this letter amendment,
Borrowers agree to pay to Agent, for the Pro Rata benefit of
Lenders, an amendment fee in the amount of $21,875 in immediately
available funds on the date hereof.
Each Borrower hereby:
(i) ratifies and reaffirms the Obligations, each of the Loan
Documents and all of such Borrower’s covenants, duties,
indebtedness and liabilities under the Loan Documents; (ii)
acknowledges and stipulates that (a) the Loan Agreement and
the other Loan Documents executed by such Borrower are legal, valid
and binding obligations of such Borrower that are enforceable
against such Borrower in accordance with the terms
