Exhibit 10.1

 

AMENDMENT TO CREDIT AGREEMENT

 

This AMENDMENT TO CREDIT AGREEMENT, dated as of March 27, 2015 (this
“Agreement”), is entered into by and between LUMBER LIQUIDATORS, INC., a
Delaware corporation (the “Company”) and BANK OF AMERICA, N.A., a national
banking association (the “Bank”). Capitalized terms not otherwise defined herein
shall have the meaning ascribed to such terms in the Credit Agreement (defined
below).

 

RECITALS

 

A.           The Bank has extended credit to the Company pursuant to: (i) that
certain Amended and Restated Revolving Credit Agreement dated as of February 21,
2012, by and between the Company and the Bank (as amended, restated, or
otherwise modified from time to time, the “Credit Agreement”); and (ii) that
certain Amended and Restated Revolving Credit Note dated as of February 21, 2012
in the original principal amount of $50,000,000 executed by the Company in favor
of the Bank (as amended, restated or otherwise modified from time to time, the
“Revolving Credit Note”). The Credit Agreement, Revolving Credit Note and any
other documents, instruments or agreements executed in connection therewith are
collectively referred to herein as the “Loan Documents”.

 

B.           The parties hereto have agreed to amend the Credit Agreement,
subject to the terms and conditions set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

 

1.          Estoppel, Acknowledgement and Reaffirmation. The Company hereby
acknowledges and agrees that, as of March 27, 2015, the outstanding balance
under the Revolving Credit Facility was not less than $2,684,500 (composed of
$0.00 in principal, $0.00 in accrued interest and $2,684,500 in outstanding
Letters of Credit), which constitutes a valid and subsisting obligation of the
Company to the Bank that is not subject to any credits, offsets, defenses,
claims, counterclaims or adjustments of any kind. The Company hereby
acknowledges its obligations under the Loan Documents, reaffirms that each of
the liens and security interests created and granted pursuant to the Loan
Documents is valid and subsisting and agrees that this Agreement shall in no
manner impair or otherwise adversely affect such obligations, liens or security
interests, except as explicitly set forth herein.

 

2.          Amendments to Credit Agreement. Subject to the terms and conditions
set forth herein, effective as of the Effective Date (defined below), the Credit
Agreement is hereby amended as follows:

 

(a)         Section 1.1 of the Credit Agreement is hereby amended to add the
following terms in the appropriate alphabetical order:

 

“Amendment” means that certain Amendment to Credit Agreement dated as of March
27, 2015 between the Company and the Bank.

 

“Executive Officer” means any of the Company’s employees meeting the definition
of “executive officer” set forth in 17 CFR 240.3b-7.

 

 

 

 

“Material Dispute” means any dispute that could reasonably be expected to cause
a material adverse change in the financial condition or results of operations of
the Company.

 

“Material Litigation” means any litigation that could reasonably be expected to
cause a material adverse change in the financial condition or results of
operations of the Company.

 

“Revolving Loan Notice” means a notice in the form of Exhibit 2.2(e) to this
Agreement.

 

(b)          The first sentence of Section 1A.5 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

 

Upon satisfaction of the conditions set forth in Section 2.2 of this Agreement,
the Bank promptly (and in any event before 12:00 p.m. New York time on the later
of: (i) the Business Day immediately following the date on which the Revolving
Loan Notice is received by Bank or (ii) the Business Day on which the funds are
requested to be advanced per the applicable Revolving Loan Notice) shall advance
funds under the Revolving Credit Facility in U.S. Dollars in the amount
requested in the applicable Revolving Loan Notice by crediting the amount of
such advance to the general deposit account of the Company maintained at the
Bank.

 

(c)          Section 1A.8 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

 

Section 1A.8 Letters of Credit. The Company may from time to time apply to the
Bank for one or more letters of credit (each, a “Letter of Credit” and,
collectively, the “Letters of Credit”) pursuant to applications and such other
documentation as the Bank shall require (collectively, the “Letter of Credit
Documents”); provided, however, that (i) the aggregate stated amount of all
Letters of Credit issued by the Bank for the account of the Company shall not at
any time exceed the Letter of Credit Sublimit and (ii) the term of any Letter of
Credit shall not extend beyond the Revolving Credit Termination Date. Each
request submitted by the Company for a Letter of Credit shall constitute a
representation and warranty by the Company, as of the date of each such request
and as of the date of the issuance of such Letter of Credit, that the conditions
in Section 2.2(a) through (d) have been satisfied. Each Letter of Credit and any
related Letter of Credit Documents shall constitute Loan Documents hereunder.

 

(d)          Section 2.2 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

 

Section 2.2           Conditions to All Borrowings. The obligation of the Bank
to advance or re-advance any funds under the Revolving Credit Facility is
subject to the satisfaction of the following conditions precedent on the date of
such borrowing request:

 

(a)          Loan Documents. The Company shall have complied and shall then be
in compliance with all of the terms, covenants and conditions of this Agreement,
the Security Agreement and all other documents, instruments or agreements to
which the Company is a party that evidence, secure or otherwise relate to the
Revolving Credit Facility (all documents described in this paragraph (a) being
collectively referred to herein as the “Loan Documents”), as the same may be
modified and amended from time to time;

 

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(b)          No Material Adverse Change. There shall not have occurred any
material adverse change in the financial condition or results of operations of
the Company, and the prospect of payment or performance of the Revolving Credit
Facility has not been materially impaired;

 

(c)          No Default. There shall exist no Event of Default and no event
shall have occurred or condition exist which, with the giving of notice or the
lapse of time, or both, would constitute an Event of Default;

 

(d)          Representations and Warranties. The representations and warranties
contained in Article 3 hereof shall be true as of the date hereof; and

 

(e)          Notice of Borrowing. The Bank shall have received a Revolving Loan
Notice, which notice must be received by the Bank prior to 10:00 a.m. (New York,
New York time) on the date which is the requested date of each advance or
re-advance under the Revolving Credit Facility.

 

Each Revolving Loan Notice submitted by the Company hereunder shall constitute a
representation and warranty by the Company, as of the date of each such notice
and as of the date of each such advance, that the conditions in this Section 2.2
have been satisfied.         

 

(e)          Section 3.5 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

 

Section 3.5           Litigation.

 

(a)          Except as specifically set forth in a written disclosure provided
to the Bank by the Company on or before the Effective Date (as defined in the
Amendment), there exists no action, suit, investigation or proceeding pending
or, to the knowledge of any Executive Officer, threatened, in any court or
before an arbitrator or governmental authority that could reasonably be expected
to cause any material adverse change in the financial condition or results of
operations of the Company; and

 

(b)           No injunction, writ, temporary restraining order or any order of
any nature has been issued by any court or other governmental authority
purporting to enjoin or restrain the execution, delivery or performance of this
Agreement or any other Loan Document, or directing that the transactions
provided for herein or therein not be consummated as herein or therein provided.

 

(f)          The second sentence of Section 3.7 of the Credit Agreement is
hereby amended and restated in its entirety to read as follows:

 

Except as specifically set forth in a written disclosure provided to the Bank by
the Company on or before the Effective Date (as defined in the Amendment), there
are no liabilities, direct or indirect, fixed or contingent, that would
reasonably be expected to materially adversely affect the Company’s financial
condition or operations.

 

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(g)          Section 4.10 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

 

Section 4.10         Compliance with Applicable Laws. Comply with all applicable
laws, rules, regulations and orders of any governmental authority having
jurisdiction over it, including without limitation all Environmental Laws,
except where non-compliance would not materially adversely affect (i) its
financial condition or operations or (ii) its ability to execute, deliver or
perform the terms of the Loan Documents.

 

(h)          Section 4.11 of the Credit Agreement is hereby amended and restated
in its entirety to read as follows:

 

Section 4.11         Notice of Liabilities. Notify the Bank promptly in writing
of (i) any condition, event, claim or act that would reasonably be expected to
materially adversely affect its financial condition or operations, or any of the
Bank's rights or remedies under the Loan Documents, or that would reasonably be
expected to result in a material fixed or contingent liability, (ii) any
Material Litigation filed by or against it, (iii) the occurrence of any event
that, with the giving of notice or the lapse of time, or both, would constitute
an event of default under any of the Loan Documents, (iv) the occurrence of any
uninsured or partially insured loss by it resulting from fire, theft, liability
or property damage if such loss is in excess of $5,000,000, (v) the assumption,
guarantee, endorsement or other act causing it to become surety for or upon any
material obligation of any Person, except by the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business, (vi)
any Material Dispute between the Company and any governmental authority or
agency, and (vii) any change in the Company's name, legal structure,
jurisdiction of incorporation, place of business or chief executive office.

 

(i)           Section 6.1(i) of the Credit Agreement is hereby amended by
replacing reference to the amount of “$1,000,000” therein with “$5,000,000”.

 

(j)           A new Exhibit 2.2(e) in the form attached hereto as Exhibit 2.2(e)
is hereby added to the Credit Agreement and incorporated therein.

 

3.           Effectiveness; Conditions Precedent. This Agreement shall become
effective as of the date hereof (the “Effective Date”) when, and only when, each
of the following conditions shall have been satisfied or waived, in the sole
discretion of the Bank:

 

(a)          The Bank shall have received counterparts of this Agreement duly
executed by each of the Company and the Bank;

 

(b)          The Bank shall have received reimbursement from the Company for all
reasonable fees and expenses incurred through the Effective Date in connection
with the Credit Agreement, the Loan Documents and this Agreement and invoiced to
the Company on or before the date of this Agreement; and

 

(c)          The Bank shall have received and approved the written disclosures
described in (a) Section 3.5(a) of the Credit Agreement and (b) Section 3.7 of
the Credit Agreement, which receipt and approval shall be evidenced by the
Bank’s release of its signature page to this Agreement.

 

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4.           Ratification. Except as specifically modified herein, the terms of
the Loan Documents shall remain in full force and effect. The execution,
delivery and effectiveness of this Agreement shall not operate as a waiver of
any right, power or remedy of the Bank under the Loan Documents, or constitute a
waiver or amendment of any provision of the Loan Documents, except as expressly
set forth herein. This Agreement shall constitute a Loan Document, and the
breach in any material respect of any provision or representation by the Company
under this Agreement shall constitute an Event of Default under Section 6.1 of
the Credit Agreement.

 

5.           Representations of the Company. The Company represents and warrants
to the Bank as follows:

 

(a)          It has taken all necessary action to authorize the execution,
delivery and performance of this Agreement and any other documents delivered by
it in connection herewith.

 

(b)          This Agreement and each other document delivered by it in
connection herewith has been duly executed and delivered by the Company and
constitutes the Company’s legal, valid and binding obligation, enforceable in
accordance with its terms, except as such enforceability may be subject to
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting creditors’ rights generally.

 

(c)          No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or third
party is required in connection with the execution, delivery or performance by
the Company of this Agreement.

 

(d)          The execution and delivery of this Agreement or any other document
delivered by it in connection herewith does not (i) violate, contravene or
conflict with any provision of its organizational documents or (ii) materially
violate, contravene or conflict with any applicable laws affecting the Company.

 

(e)          After giving effect to this Agreement, (i) the representations and
warranties of the Company set forth in Article 3 of the Credit Agreement are
true, accurate and complete in all material respects on and as of the date
hereof to the same extent as though made on and as of such date except to the
extent such representations and warranties specifically relate to an earlier
date and (ii) no event has occurred and is continuing which constitutes a
default or an Event of Default.

 

(f)          As of the date hereof, the Company has no knowledge of any actions,
causes of action, claims, demands, damages and liabilities of whatever kind or
nature, in law or in equity, against the Bank or the Bank’s respective officers,
employees, representatives, agents, counsel or directors arising from any action
by such persons, or failure of such persons to act under the Credit Agreement or
under any other agreement between the Bank and the Company, either written or
oral, on or prior to the date hereof.

 

6.           Release. In consideration of the Bank entering into this Agreement,
the Company hereby releases and forever discharges the Bank and each of the
Bank’s predecessors, successors, assigns, officers, managers, directors,
employees, agents, attorneys, representatives, and affiliates (hereinafter all
of the above collectively referred to as the “Bank Group”), from any and all
claims, counterclaims, demands, damages, debts, suits, liabilities, actions and
causes of action of any nature whatsoever through the date of this Agreement,
whether arising at law or in equity, whether known or unknown, whether liability
be direct or indirect, liquidated or unliquidated, whether absolute or
contingent, foreseen or unforeseen, and whether or not heretofore asserted,
which the Company may have or claim to have against any of the Bank Group;
provided, that nothing herein will constitute a release or discharge of the
agreements set forth herein or of the effectiveness of the Loan Documents from
and after the date hereof.

 

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7.          No Third Party Beneficiaries. This Agreement and the rights and
benefits hereof shall inure to the benefit of each of the parties hereto and
their respective successors and assigns. No other party shall have or be
entitled to assert rights or benefits under this Agreement.

 

8.          Entirety. This Agreement and the other Loan Documents embody the
entire agreement among the parties hereto as to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, if any,
relating to the subject matter hereof. This Agreement and the other Loan
Documents represent the final agreement among the parties hereto as to the
subject matter hereof and may not be contradicted by evidence of prior,
contemporaneous or subsequent oral agreements of the parties.

 

9.          Confidentiality. The Bank agrees to take normal and reasonable
precautions to maintain the confidentiality of any information designated in
writing as confidential and provided to it by, or on behalf of, Company or any
Subsidiary, except that such information may be disclosed (i) to affiliates of
the Bank and the respective directors, officers, employees, agents and advisors
of the Bank and the Bank’s affiliates (each, a, “Related Party”), including
without limitation accountants, legal counsel and other advisors, (ii) to the
extent required by applicable laws or regulations or by any subpoena or similar
legal process, (iii) to the extent requested by any regulatory agency or
authority, (iv) to the extent that such information becomes publicly available
other than as a result of a breach of this paragraph, or which becomes available
to the Bank on a non-confidential basis from a source other than the Company,
(v) in connection with the exercise of any remedy hereunder or any suit, action
or proceeding relating to this Agreement or the enforcement of rights hereunder,
and (ix) subject to provisions substantially similar to this paragraph, to any
actual or prospective assignee or participant, or (vi) with the consent of the
Company. Any Person, including but not limited to any Related Party, required to
maintain the confidentiality of any information as provided for in this
paragraph shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such information as such Person would accord its own
confidential information.

 

10.         Counterparts; Electronic Delivery. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed an original, and it shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart. Delivery of
an executed counterpart of this Agreement by facsimile or other electronic means
shall be effective as an original.

 

11.         Governing Law. This Agreement and the rights and obligations of the
parties hereunder shall be governed by and interpreted in accordance with the
laws of the Commonwealth of Virginia.

 

12.         Further Assurances. Each of the parties hereto agrees to execute and
deliver, or to cause to be executed and delivered, all such instruments as may
reasonably be requested to effectuate the intent and purposes, and to carry out
the terms, of this Agreement.

 

13.         Miscellaneous.

 

(a)          Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose.

 

(b)          Wherever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.

 

[Signature Pages Follow]

 

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

 

COMPANY: LUMBER LIQUIDATORS, INC.,   a Delaware corporation

 

  By: /s/ Daniel Terrell     Name: Daniel Terrell   Title: Chief Financial
Officer

 

[Signature Pages Continue]

 

 

 

 

BANK: BANK OF AMERICA, N.A.,

 

  By: /s/ Greg L. Richards     Name: Greg L. Richards   Title: Senior Vice
President

 

[Signature Pages End]

 

 

 

 

Exhibit 2.2(e)

 

Form of Revolving Loan Notice

 

REVOLVING LOAN NOTICE

 

Date: __________, 20__

 

To: Bank of America, N.A.

 

Re:Amended and Restated Revolving Credit Agreement (as amended, modified,
supplemented, increased and extended from time to time, the “Credit Agreement”)
dated as of February 21, 2012 by and between LUMBER LIQUIDATORS, INC., a
Delaware corporation (the “Company”), and BANK OF AMERICA, N.A., a national
banking association.

 

Ladies and Gentlemen:

 

Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.

 

The undersigned hereby requests an advance under the Revolving Credit Facility:

 

1.On __________, ____ [which shall be a Business Day]

2.In the amount of $_____

 

With respect to any advance requested herein, the Company hereby represents and
warrants that each of the conditions set forth in Section 2.2 of the Credit
Agreement have been satisfied on and as of the date of such advance.

 

  LUMBER LIQUIDATORS, INC.,   a Delaware corporation

 

  By:       Name:   Title: