EXHIBIT 10.1

 

 

FOURTH AMENDMENT TO CREDIT AGREEMENT

AND THIRD AMENDMENT TO SECURITY AGREEMENT

 

This FOURTH AMENDMENT TO CREDIT AGREEMENT AND THIRD AMENDMENT TO SECURITY
AGREEMENT (this “Amendment”), dated as of April 3, 2008, is by and among CAYE
HOME FURNISHINGS, LLC, a Delaware limited liability company ("Caye Home"), CAYE
UPHOLSTERY, LLC, a Mississippi limited liability company ("Caye Upholstery"),
and CAYE INTERNATIONAL FURNISHINGS, LLC, a Mississippi limited liability company
(“Caye International" and together with the Caye Home and Caye Upholstery, each
individually as a "Vendor" and collectively as the "Vendors"), Caye Home, as
administrative agent for the Vendors (in such capacity, the "Agent"), and the
Customers, whose names are set forth on the signature pages hereto.  Capitalized
terms used herein and not otherwise defined shall have the meaning assigned such
term in the Credit Agreement (as defined below).

 

RECITALS:

 

                A.        The Customers, the Vendors and the Agent are parties
to that certain Credit Agreement, dated as of July 11, 2005 (as amended to the
date hereof, the “Credit Agreement”) and the related Security Agreement, dated
as of July 11, 2005 (as amended to the date hereof, the “Security Agreement”).

 

 

                B.        The parties hereto have agreed to amend the Credit
Agreement as set forth below.

 

        NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:

 

 

        SECTION 1.  Amendments to Credit Agreement.

 

    (a)        New Definitions.  The definitions for “Ashley Assets,”
“Metropolitan Area Liens”, and “Metropolitan Area Store” are hereby amended and
restated in their entirety as follows:

 

                “Ashley Assets” means and includes (i) the agreements among
Ashley and its Affiliates and Hartsdale Convertibles, Inc, JCI and its
Affiliates, (ii) the leases, fixtures, Inventory or other assets located on the
premises of the Metropolitan Area Store;  (iii) Inventory held for sale from the
Metropolitan Area Stores, whether or not on the premises of the Metropolitan
Area Stores, provided that it is segregated from Inventory held by the Customers
for use in locations other than the Metropolitan Area Stores, (iv) any websites
or URLs established specifically with respect to the Metropolitan Area Stores
and (v)operating manuals, software, advertising materials and other material
relating to the operations of the Metropolitan Area Stores.

 

                “Metropolitan Area Liens” means liens held by Ashley or its
Affiliates in inventory sold to any Metropolitan Area Store by Ashley for resale
at such location.

 

                “Metropolitan Area Store” means one of the Ashley stores to be
owned by Hartsdale Convertibles, Inc., which stores are to be located in the New
York metropolitan area at (i) 168 Glencove Road, Carl Place, New York, (ii)1995
Broadhollow Rd. ( Rte 110 ) Farmingdale, New York, and (iii) 700 Sunrise
Highway, Bayport, New York, or, in the event that any such store is moved, at
the store’s new address, provided, however, that Vendors must be given not less
than thirty (30) days prior written notice of the new address.

 

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    (b)        Amendment to Section 7.16.  Section 7.16 of the Agreement is
hereby amended and restated in its entirety as follows:

 

                7.16         Business Conducted.  No Customer shall engage
directly or indirectly, in any line of business other than the businesses in
which such Customer is engaged on the Closing Date, provided, however that the
foregoing shall not restrict or prohibit Customer from opening new stores or
from operating the Metropolitan Area Stores as Ashley Home Furniture Stores
under license from Ashley.

 

    (c)        Amendment to Section 7.26. Section 7.26 of the Agreement is
hereby amended and restated in its entirely as follows:

 

                7.26.     Metropolitan Area Stores.  No Inventory shall be
transferred from any Metropolitan Area Store to any other location of any
Customer (except for warehouse facilities in which the Inventory for the
Metropolitan Area Store is segregated from Inventory of Customers that may be
used for other locations), unless the Metropolitan Area Liens have been released
from such Inventory prior to the transfer.

   

    (d) Amended Section 7.21.  The Section 7.21 is hereby amended and restated
in its entirely as follows:

 

                7.21      Capital Expenditures No Customer shall make or incur
any Capital Expenditure if, after giving effect thereto, the aggregate amount of
all Capital Expenditures by the Customers as a group would exceed (a) $400,000
during Fiscal Year 2005 and (b) $1,000,000 during any Fiscal Year thereafter;
provided that Customers may make up to (i) $2 million of Capital Expenditures in
connection with the opening of the Metropolitan Area Store in Carl Place, New
York and (ii) $1,200,000 in connection with the opening  of the Metropolitan
Area Store in Farmingdale, New York and (iii) $250,000 in connection with the
opening  of the Metropolitan Area Store in Bayport, New York, and such Capital
Expenditures shall not be counted against the $1 million per Fiscal Year
referred to above.

 

    (e)        Schedule 6.13.   Schedule 6.13 is hereby amended to add “Ashley
Home Furniture Store” as a trade name used for the Metropolitan Area Stores in
Bayport and Farmingdale, New York, in addition to for the original Metropolitan
Area Store in Carl Place, New York.

 

    (f)        Exhibit A.  To the extent necessary, if at all, Exhibit A of the
Security Agreement is hereby amended to add the Ashley Assets related to the new
Metropolitan Area Stores Bayport and Farmingdale, New York.

 

        SECTION 2.     Representations and Warranties.  Each Customer hereby
represents and warrants to each Vendor and the Agent, on the Amendment Effective
Date (as hereinafter defined), as follows:

 

    (a)        After giving effect to this amendment, the representations and
warranties set forth in Article 6 of the Credit Agreement, and in each other
Credit Document, are true and correct in all material respects on and as of the
date hereof and on and as of the Amendment Effective Date (as defined in Section
3) with the same effect as if made on and as of the date hereof or the Amendment
Effective Date, as the case may be, except to the extent such representations
and warranties expressly relate solely to an earlier date.

 

    (b)        Each Customer is in compliance with all terms and conditions of
the Credit Agreement and the other Credit Documents on its part to be observed
and performed and no Default or Event of Default has occurred and is continuing.

 

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    (c)        The execution, delivery and performance by each Customer of this
Amendment have been duly authorized by each Customer, as applicable.

 

    (d)        This Amendment constitutes the legal, valid and binding
obligation of each Customer, enforceable against each Customer in accordance
with its terms, except to the extent that enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or other similar
laws affecting the enforcement of creditors' rights or by the effect of general
equitable principles.

 

    (e)        The execution, delivery and performance by each Customer of this
Amendment do not and will not conflict with, or constitute a violation or breach
of, or result in the imposition of any Lien upon the property of any Customer or
any of its Subsidiaries, by reason of the terms of (i) any contract, mortgage,
lease, agreement, indenture, or instrument to which any Customer is a party or
which is binding upon it, (ii) any Requirement of Law applicable to any
Customer, or (iii) the certificate or articles of incorporation or by-laws or
the limited liability company or limited partnership agreement of any Customer.

 

        SECTION 3.    Effectiveness.  This Amendment shall become effective only
upon satisfaction of the following conditions precedent (the first date upon
which each such condition has been satisfied being herein called the “Amendment
Effective Date”):

 

    (a)        The Agent shall have received duly executed counterparts of this
Amendment which, when taken together, bear the authorized signatures of the
Customers, the Agent and the Vendors.

 

    (b)        The Agent shall have received certified copies of resolutions or
other action, incumbency certificates and/or other certificates of duly
authorized officers of each Customer as the Administrative Agent may require
evidencing the identity, authority and capacity of each duly authorized officer
authorized to act on behalf of such Customer in connection with this Amendment;

 

    (c)        The Agent and the Vendors shall be satisfied that the
representations and warranties set forth in Section 3 of this Amendment are true
and correct on and as of the Amendment Effective Date and that no Default or
Event of Default has occurred and is continuing on and as of the Amendment
Effective Date.

 

    (d)        The Agent shall have received all fees and expenses to be paid by
the Customers pursuant to Section 4 of this Amendment.

 

    (e)        There shall not be any action pending or any judgment, order or
decree in effect which, in the judgment of the Agent or the Vendors, is likely
to restrain, prevent or impose materially adverse conditions upon the
performance by any Customer of its obligations under the Credit Agreement or the
other Credit Documents.

 

    (f)        The Agent shall have received such other documents, legal
opinions, instruments and certificates relating to this Amendment as it shall
reasonably request and such other documents, legal opinions, instruments and
certificates that shall be reasonably satisfactory in form and substance to the
Agent and the Vendors.  All corporate or limited liability proceedings taken or
to be taken in connection with this Amendment and documents incidental thereto
whether or not referred to herein shall be reasonably satisfactory in form and
substance to the Agent and the Vendors.

 

        SECTION 4      Expenses.  The Customers shall pay all reasonable
out-of-pocket expenses incurred by Agent in connection with the preparation,
negotiation, execution and delivery of this Amendment, including, but not
limited to, the reasonable fees and disbursements of counsel to the Agent.

 

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        SECTION 5      Cross-References.  References in this Amendment to any
Section are, unless otherwise specified, to such Section of this Amendment.

 

        SECTION 6      Instrument Pursuant to Credit Agreement.  This Amendment
is a Credit Document executed pursuant to the Credit Agreement and shall (unless
otherwise expressly indicated herein) be construed, administered and applied in
accordance with the terms and provisions of the Credit Agreement.

 

        SECTION 7      Further Acts.  Each of the parties to this Amendment
agrees that at any time and from time to time upon the written request of any
other party, it will execute and deliver such further documents and do such
further acts and things as such other party may reasonably request in order to
effect the purposes of this Amendment.

 

        SECTION 8      Counterparts.  This Amendment may be executed in any
number of counterparts and by the different parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. 

 

        SECTION 9      Severability.  In case any provision in or obligation
under this Amendment or the other Credit Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.

 

        SECTION 10    Benefit of Agreement.  This Amendment shall be binding
upon and inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that no Customer may assign or
transfer any of its interest hereunder without the prior written consent of the
Vendors.

 

        SECTION 11    Integration.  This Amendment represents the agreement of
the Customers, each other Credit Party, the Agent and each of the Vendors
signatory hereto with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties relative to the subject
matter hereof not expressly set forth or referred to herein or in the other
Credit Documents.

 

        SECTION 12    Confirmation.  Except as expressly amended by the terms
hereof, all of the terms of the Credit Agreement and the other Credit Documents
shall continue in full force and effect and are hereby ratified and confirmed in
all respects.

 

        SECTION 13    Credit Documents.  Except as expressly set forth herein,
the amendments provided herein shall not by implication or otherwise limit,
constitute a waiver of, or otherwise affect the rights and remedies of the
Vendors or the Agent under any Credit Document, nor shall they constitute a
waiver of any Event of Default, nor shall they alter, modify, amend or in any
way affect any of the terms, conditions, obligations, covenants or agreements
contained in the any Credit Document.  Each of the amendments provided herein
shall apply and be effective only with respect to the provisions of the Credit
Agreement specifically referred to by such amendments.  Except as expressly
amended herein, the Credit Agreement and the other Credit Documents shall
continue in full force and effect in accordance with the provisions thereof.  As
used in the Credit Agreement, the terms “Agreement”, “herein”, “hereinafter”,
“hereunder”, “hereto” and words of similar import shall mean, from and after the
date hereof, the Credit Agreement as amended hereby.

 

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

                                                                                                                                    
VENDORS:

 

                                                                                                                                    
CAYE HOME FURNISHINGS, LLC, as a Vendor

 

                                                                                                                                     
By:       /s/ Karl W. Leo                                                 

                                                                                                                                     
Name:   Karl W. Leo

                                                                                                                                     
Title:     Chairperson of Board of Managers

 

                                                                                                                                     
CAYE UPHOLSTERY, LLC, as a Vendor

 

                                                                                                                                      
By:       /s/ Karl W. Leo                                                 

                                                                                                                                      
Name:   Karl W. Leo

                                                                                                                                      
Title:     Chairperson of Board of Managers

 

                                                                                                                                       
CAYE INTERNATIONAL FURNISHINGS, LLC, as a Vendor

 

                                                                                                                                       
By:       /s/ Karl W. Leo                                                 

                                                                                                                                       
Name:   Karl W. Leo

                                                                                                                                       
Title:     Chairperson of Board of Managers

                                                                                                                                       
ADMINISTRATIVE AGENT:

 

                                                                                                                                       
CAYE HOME FURNISHINGS, LLC, as Agent

                                                                                                                                       
By:       /s/ Karl W. Leo                                                 

                                                                                                                                       
Name:   Karl W. Leo

                                                                                                                                       
Title:     Chairperson of Board of Managers

 

                                                                                                                                       
CUSTOMERS:

 

                                                                                                                                       
JENNIFER CONVERTIBLES, INC.

 

                                                                                                                                       
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                       
Name:   Harley J. Greenfield                                          

                                                                                                                                       
Title:     Chief Executive Officer

                                     

                                                                                                                                       
JENNIFER CONVERTIBLES BOYLSTON MA, INC.

 

                                                                                                                                       
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                       
Name:   Harley J. Greenfield                                          

                                                                                                                                       
Title:     Chief Executive Officer                                     

 

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JENNIFER CHICAGO LTD

 

                                                                                                                                       
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                       
Name:   Harley J. Greenfield                                          

                                                                                                                                       
Title:     Chief Executive Officer                                     

 

                                                                                                                                       
ELEGANT LIVING MANAGEMENT, LTD.

 

                                                                                                                                       
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                       
Name:   Harley J. Greenfield                                          

                                                                                                                                       
Title:     Chief Executive Officer                                     

                                                                                                                                       
HARTSDALE CONVERTIBLES, INC.

 

                                                                                                                                       
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                       
Name:   Harley J. Greenfield                                          

                                                                                                                                       
Title:     Chief Executive Officer                                     

                                                                                                                                       
JENNIFER ACQUISITION CORP.

 

                                                                                                                                       
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                       
Name:   Harley J. Greenfield                                          

                                                                                                                                       
Title:     Chief Executive Officer                                     

                                                                                                                                       
JAMAICA AVENUE CONVERTIBLES, INC.

 

                                                                                                                                       
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                       
Name:   Harley J. Greenfield                                          

                                                                                                                                       
Title:     Chief Executive Officer                                     

                                                                                                                                       

                                                                                                                                       
JENNIFER MANAGEMENT III CORP.

 

                                                                                                                                       
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                       
Name:   Harley J. Greenfield                                          

                                                                                                                                       
Title:     Chief Executive Officer                                     

                                                                                                                                       
JENNIFER MEDIA CORP.

 

                                                                                                                                       
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                       
Name:   Harley J. Greenfield                                          

                                                                                                                                       
Title:     Chief Executive Officer                                     

 

 

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JENNIFER PURCHASING CORP.

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                         

                                                                                                                                   
Name:   Harley J. Greenfield                                          

                                                                                                                                   
Title:     Chief Executive Officer 

                                    

                                                                                                                                   
JENNIFER CONVERTIBLES LICENSING CORP

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                   
Name:   Harley J. Greenfield                                          

                                                                                                                                   
Title:     Chief Executive Officer

                                     

                                                                                                                                   
JENNIFER MANAGEMENT II CORP

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                   
Name:   Harley J. Greenfield                                          

                                                                                                                                   
Title:     Chief Executive Officer                                     

 

                                                                                                                                   
JENNIFER MANAGEMENT V LTD.

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                   
Name:   Harley J. Greenfield                                          

                                                                                                                                   
Title:     Chief Executive Officer                                     

 

                                                                                                                                   
JENNIFER CONVERTIBLES NATICK, INC.

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                   
Name:   Harley J. Greenfield                                          

                                                                                                                                   
Title:     Chief Executive Officer                                     

 

                                                                                                                                   
NICOLE CONVERTIBLES, INC.

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                   
Name:   Harley J. Greenfield                                          

                                                                                                                                   
Title:     Chief Executive Officer                                     

 

                                                                                                                                   
NICHOLSON LANE CONVERTIBLES, INC.

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                   
Name:   Harley J. Greenfield                                              

                                                                                                                                   
Title:     Chief Executive Officer                                     

 

 

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STEWART STREET CONVERTIBLES, INC.

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                   
Name:   Harley J. Greenfield                                          

                                                                                                                                   
Title:     Chief Executive Officer                                     

 

                                                                                                                                   
VALLEY STREAM CONVERTIBLES, INC.

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                   
Name:   Harley J. Greenfield                                          

                                                                                                                                   
Title:     Chief Executive Officer                                     

   

                                                                                                                                    
WASHINGTON HEIGHTS CONVERTIBLES, INC.

 

                                                                                                                                   
By:       /s/ Harley J. Greenfield                                      

                                                                                                                                   
Name:   Harley J. Greenfield                                          

                                                                                                                                   
Title:     Chief Executive Officer                                     

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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