Exhibit 4.01
THIRD AMENDMENT TO NOTE
PURCHASE
AND PRIVATE SHELF
AGREEMENT
THIS THIRD
AMENDMENT TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENT
(this “
Amendment ”), is made and entered into as of
January 23, 2009, by and among Stanley Furniture Company, Inc. (the
“ Company ”), and The Prudential
Insurance Company of America (together with its successors and
assigns, “ PICA ”), Pruco Life Insurance
Company of New Jersey ( “Pruco” ),
Prudential Retirement Insurance and Annuity Company (
“PRIAC” ), Hartford Life Insurance
Company (“ Hartford ”), Mutual of Omaha
Insurance Company ( “Mutual” ) and Medica
Health Plans (“ Medica ” and, together
with PICA, Pruco, PRIAC, Hartford, Mutual and Medica, the “
Noteholders ”).
W
I T N
E S S E T H
:
WHEREAS, the Company, PICA, Hartford and Medica
are parties to that certain Private Shelf Facility, dated as of
September 8, 1999 as amended and restated pursuant to that certain
Amended and Restated Note Purchase and Private Shelf Agreement
dated January 26, 2007 among the Company, PICA, Pruco, PRIAC,
Hartford, Mutual and Medica, as amended by that certain Amendment
to Note Purchase and Private Shelf Agreement, dated as of October
12, 2007 and as amended by that certain Second Amendment to Note
Purchase and Private Shelf Agreement, dated as of December 30, 2008
(as amended, restated, supplemented or otherwise modified from time
to time the “ Note Agreement ”);
capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Note Agreement;
and
WHEREAS, PICA, Hartford and Medica are the
holders of the 6.94% Senior Notes, due May 3, 2011 (the “
2001 Notes ”) and PICA, Pruco, PRIAC and Mutual
are the holders of the Series AA Notes, due May 3, 2017 (the
“ 2007 Notes ”), each issued pursuant to
the Note Agreement;
WHEREAS, the Company has requested that the
Noteholders amend certain provisions of the Note Agreement, and
subject to the terms and conditions hereof, the Noteholders are
willing to do so;
NOW, THEREFORE, for good and valuable
consideration, the sufficiency and receipt of all of which are
acknowledged, the Company, PICA, Pruco, PRIAC, Hartford, Mutual and
Medica agree that the Note Agreement is amended as
follows:
(a) Section
5 of the Note Agreement is hereby amended by adding the following
section 5J:
5J.
Cash Balance . The Company covenants that
at all times during the period commencing January 23, 2009 through
and including March 30, 2010, it shall maintain unrestricted cash
on hand of at least $20,000,000.
(b) Subsection
6A(i) of the Note Agreement is hereby amended by replacing such
subsection in its entirety with the following:
(i) Consolidated Operating Income to
be less than 200% of Consolidated Fixed Charges; provided ,
however , that this subsection 6A(i) shall not apply at any
time during fiscal year 2009; or
(c) Subsection
6A(iv) of the Note Agreement is hereby amended by replacing such
subsection in its entirety with the following:
(iv) the ratio of Consolidated Debt
to Consolidated EBITDA to exceed 2.75:1.00; provided ,
however , that this subsection 6A(iv) shall not apply at any
time during fiscal year 2009.
(d) Section
6B of the Note Agreement is hereby amended by replacing such
section in its entirety with the following:
6B.
Minimum Earnings. The Company covenants
that it will not permit Consolidated EBIT to be less than
($10,000,000) for any four fiscal quarter period ending March 31,
2009, June 30, 2009, September 30, 2009 and December 31,
2009.
(e) Section
10B of the Note Agreement is hereby amended by adding the following
definition of “Consolidated EBIT” in the appropriate
alphabetical order:
“ Consolidated EBIT ”
shall mean, for the Company and its Subsidiaries on a Consolidated
basis, for the four fiscal quarters most recently ended,
Consolidated Net Earnings, or Consolidated Net Loss, as the case
may be, for such period, plus , to the extent deducted in
calculating such Consolidated Net Earnings or Consolidated Net
Loss, taxes, Consolidated Interest Charges and the 2008
Restructuri
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