Exhibit 10.18

 

Execution Copy

 

THIRD OMNIBUS AMENDMENT

 

This Third Omnibus Amendment, dated as of February 24, 2005 (this “Amendment”),
is among ROWE FURNITURE, INC., a Virginia corporation (“Rowe Furniture”), THE
ROWE COMPANIES, a Nevada corporation (“Rowe Companies”), ROWE PROPERTIES, INC.,
a California corporation, STOREHOUSE, INC., a Georgia corporation, ROWE
DIVERSIFIED, INC., a Delaware corporation, and ROWE FURNITURE WOOD PRODUCTS,
INC. (formerly known as The Wexford Collection, Inc.), a California corporation
(“Guarantors”), ATLANTIC FINANCIAL GROUP, LTD., a Texas limited partnership (the
“Lessor”), certain financial institutions parties hereto as a lender
(individually, a “Lender” and collectively, the “Lenders”) and SUNTRUST BANK (as
successor to Crestar Bank), a Georgia banking corporation, as agent for the
Lenders (in such capacity, the “Agent”).

 

BACKGROUND

 

1. Rowe Furniture, the Guarantors, The Mitchell Gold Co, (subsequently released
from its obligations thereunder), the Lessor, the Lenders and the Agent entered
into that certain Master Agreement, dated as of August 27, 1999, as amended by
the First Modification to Synthetic Lease Financing Operative Documents, dated
as of October 11, 2000, by the Omnibus Amendment, dated as of May 15, 2002, and
by the Second Omnibus Amendment, dated as of December 1, 2003 (the “Master
Agreement”).

 

2. The parties hereto desire to amend the Master Agreement and certain of the
other Operative Documents.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

SECTION 1 Definitions. Capitalized terms used in this Amendment and not
otherwise defined herein shall have the meanings assigned thereto in the Master
Agreement

 

SECTION 2. Covenants From Fleet Loan Agreement. The parties hereto hereby agree
that the covenants and continuing agreements set forth in Sections 9.2.9 and 9.3
of the Fleet Loan Agreement (as hereinafter defined), together with the defined
terms used therein, each as in effect on the date hereof, are hereby
incorporated by reference as if fully set forth herein. In the event that the
Fleet Loan Agreement is amended or terminated after the date hereof, Rowe
Furniture shall promptly notify the Agent thereof in writing, which notice shall
be accompanied by the form of such amendment or of any replacement loan or
credit agreement, as applicable. If requested by the Required Funding Parties,
those portions of the amendment to, or replacement of, the Fleet Loan Agreement
as are designated by the Required Funding Parties shall amend or replace the
covenants incorporated herein by reference. Unless amended or replaced pursuant
to the foregoing sentence, or otherwise with the written agreement of the
Required Funding Parties,

 

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the covenants and definitions incorporated herein by reference shall be those
covenants and definitions as they exist on the date of this Amendment, and shall
continue as such, notwithstanding any subsequent amendment or waiver thereof, or
any subsequent termination of the Fleet Loan Agreement.

 

SECTION 3 Projections. Notwithstanding any provision of the Master Agreement or
the Operative Documents to the contrary, the Lessee and the Guarantors shall
deliver to the Agent such financial projections and forecasts, and supporting
and related information, at times, and in form and content, as required to be
delivered pursuant to Section 9.1.5 of the Fleet Loan Agreement to the “Agent”
and “Lenders” thereunder.

 

SECTION 4 Definitions. The definition of each of “Applicable Margin” and “Fleet
Loan Agreement” set forth in Appendix A to the Master Agreement is hereby
deleted, and the following shall be substituted therefore, in appropriate
alphabetical order;

 

“Applicable Margin” means with respect to each day for each LIBOR Advance the
applicable percentage set forth below for the corresponding Consolidated
Leverage Ratio (as defined in the Fleet Loan Agreement) as most recently
determined based on Rowe Companies’ most recent audited annual or unaudited
quarterly consolidated financial statements, tested each quarter on a rolling
four quarter basis:

 

Applicable Margin for LIBOR Advances

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Consolidated Leverage Ratio

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Applicable Margin

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> 3.75   4.00% £ 3.75   3.75% £ 3.25   3.50% £ 2.75   3.25% £ 2.25   3.00% £
1.75   2.75%

 

Notwithstanding the foregoing, until receipt by the Agent of Rowe Companies’
audited financial statements for the 2005 fiscal year, the Applicable Margin
shall be 4.00%.

 

“Fleet Loan Agreement” means the Loan and Security Agreement, dated as of May
15, 2002, among The Rowe Companies, Rowe Diversified, Inc., Rowe Furniture Wood
Products, Inc., Rowe Properties, Inc., Storehouse, Inc., Rowe Furniture, Inc.,
The Mitchell Gold Co. (subsequently released from its obligations thereunder),
the various financial institutions party thereto and Fleet Capital Corporation,
as Agent, as amended by that certain letter amendment dated as of June 17, 2002,
the Second Amendment to Loan and Security Agreement dated October 10, 2002, the
Third Amendment to Loan and Security Agreement dated February 28, 2003, the
Fourth Amendment to Loan and Security Agreement dated April 2, 2003, the Fifth
Amendment to Loan and Security

 

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Agreement dated as of November 30, 2003, the Sixth Amendment to Loan and
Security Agreement dated as of September 23, 2004, and the Seventh Amendment to
Loan and Security Agreement dated as of February 24, 2005.

 

SECTION 5 Modification Fee. The Lessee shall pay to the Agent, for its own
account, a modification fee in the amount of $35,000 in immediately available
funds on the date hereof, and all other costs and expenses incurred by the Agent
in connection with the preparation, negotiation and execution of this Amendment,
including without limitation, legal expenses of counsel to the Agent.

 

SECTION 6 Document Deliveries. The Lessee shall deliver to the Agent the
following, each of which shall be satisfactory in form and substance to the
Agent, as of the date of this Amendment: (i) the certificate the secretary or an
assistant secretary of each of the Lessee and of the Guarantors certifying to
the incumbency of the officers executing this Amendment and attaching
resolutions of each of such Persons authorizing the execution and delivery
hereof (ii) an opinion of counsel to the Lessee and the Guarantors, and (iii) a
copy of the duly executed Seventh Amendment to Loan and Security Agreement dated
as of February 24, 2005, among the Lessee, the Guarantors, the various financial
institutions party thereto and Fleet Capital Corporation, as agent.

 

SECTION 7 Reaffirmation of Guaranty. Each Guarantor represents, warrants and
affirms that, after giving effect to this Amendment (i) the Guaranty remains in
full force and effect and guaranties all of the payment and performance
obligations of Rowe Furniture under the Operative Documents, and (ii) the
Guaranty continues to be secured by the collateral pledged in connection
therewith.

 

SECTION 8 Representations. The Lessee hereby represents, warrants and affirms
that, after giving effect to this Amendment, (i) no Event of Default or
Potential Event of Default has occurred and is continuing, (ii) the Operative
Documents remain in full force and effect and (iii) the deeds of trust executed
by Rowe Furniture and dated May 15, 2001 with respect to properties in
Christiansburg, Virginia, Salem, Virginia and Butler County, Missouri remain in
full force and effect and secure all of the obligations of the Lessee under the
Operative Documents.

 

SECTION 9 Miscellaneous. This Amendment shall be governed by, and construed in
accordance with, the laws of the Commonwealth of Virginia. This Amendment may be
executed by the parties hereto in separate counterparts (including by facsimile)
each of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same agreement. Each of the
Master Agreement, the Lease and the Loan Agreement, as amended hereby, remains
in full force and effect. Any reference to the Master Agreement, the Lease or
the Loan Agreement from and after the date hereof shall be deemed to refer to
the Master Agreement, the Lease or the Loan Agreement, as the case may be, as
amended hereby, unless otherwise expressly stated. Rowe Furniture shall promptly
pay, or shall reimburse the Agent for, all out-of-pocket costs and expenses
incurred by the Agent in connection with this

 

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Amendment, including, without limitation, reasonable legal fees and expenses,
appraisal costs and environmental assessment fees and expenses.

 

[signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective duly authorized officers as of the year first above written.

 

ROWE FURNITURE, INC., as Lessee

By:

 

/s/ Garry W. Angle

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Name Printed:

 

Garry W. Angle

Title:

 

Asst. Secretary

THE ROWE COMPANIES, as a Guarantor

By:

 

/s/ Garry W. Angle

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Name Printed:

 

Garry W. Angle

Title:

 

Vice President Treasury Mgmt.

ROWE PROPERTIES, INC., as a Guarantor

By:

 

/s/ Garry W. Angle

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Name Printed:

 

Garry W. Angle

Title:

 

Asst. Secretary

STOREHOUSE, INC., as a Guarantor

By:

 

/s/ Garry W. Angle

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Name Printed:

 

Garry W. Angle

Title:

 

Asst. Secretary

 

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ROWE DIVERSIFIED, INC., as a Guarantor

By:

 

/s/ Garry W. Angle

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Name Printed:

 

Garry W. Angle

Title:

 

Treasurer

ROWE FURNITURE WOOD PRODUCTS, INC., as a Guarantor

By:

 

/s/ Garry W. Angle

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Name Printed:

 

Garry W. Angle

Title:

 

Asst. Secretary

SUNTRUST BANK, as Lender and as Agent

By:

 

 

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Name Printed:

 

 

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Title:

 

 

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ATLANTIC FINANCIAL GROUP, LTD., as Lessor

By:

 

Atlantic Financial Managers, Inc., its General Partner

By:

 

 

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Name Printed:

 

 

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Title:

 

 

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ROWE DIVERSIFIED, INC., as a Guarantor

By:

 

 

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Name Printed:

 

 

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Title:

 

 

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ROWE FURNITURE WOOD PRODUCTS, INC., as a Guarantor

By:

 

 

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Name Printed:

 

 

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Title:

 

 

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SUNTRUST BANK, as Lender and as Agent:

By:

 

/s/ George W. Coleman, Jr.

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Name Printed:

 

GEORGE W. COLEMAN, JR.

Title:

 

SENIOR VICE PRESIDENT

ATLANTIC FINANCIAL GROUP, LTD.,

By:

  Atlantic financial Managers, Inc., its General Partner

By:

 

/s/ Stephen S. Brookshire

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Name Printed:

 

Stephen S. Brookshire

Title:

 

President

 

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