<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) June 30, 1997
STANLEY FURNITURE COMPANY, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-14938 54-1272589
(State or other (Commission (IRS Employer
jurisdiction File Number) Identification No.)
of incorporation)
1641 Fairystone Park Highway, Stanleytown, Virginia 24168
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(540)627-2000
<PAGE>
ITEM 5. OTHER EVENTS
On June 30, 1997, the Company repurchased 750,000 shares of
its Common Stock, $.02 par value, from the ML-Lee Acquisition Fund,
L.P. and certain affiliates (the "Lee Fund Shares") at a purchase
price of $20 per share. The Company's press release announcing the
approval by the Company's Board of Directors of the purchase is
included as Exhibit 99.1 hereto and is incorporated herein by
reference.
In connection with the repurchase of the Lee Fund Shares, the
Thomas H. Lee Company agreed to reduce the fees payable to it under
its existing management agreement with the Company from $180,000 to
$90,000 per year. Also the Lee Fund and affiliated parties agreed
to eliminate one of the demand registrations available to them
under their existing registration rights agreement with the
Company.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
The following exhibits are filed as a part of this
report.
4.1 Letter Agreement, dated June 16, 1997, to Note
Agreements, dated February 15, 1994 and June
29, 1995, between the Registrant and The
Prudential Insurance Company of America.
99.1 Press release dated June 24, 1997.
99.2 Stock Purchase Agreement, dated as of June 27,
1997 among the Registrant and the Selling
Stockholders named therein.
99.3 Amendment No. 1, dated as of June 27, 1997, to
Registration Rights Agreement, dated as of
November 9, 1992, by and among the Registrant,
ML-Lee Acquisition Fund, L.P., ML-Lee
Acquisition Fund II, L.P., ML-Lee Acquisition
Fund (Retirement Accounts) II, L.P., Lee Stock-
holders (as defined therein) and Management
Stockholders (as defined therein).
99.4 Amendment No. 3, dated as of June 27, 1997,
between the Company and the Thomas H. Lee
Company to the Management Agreement, dated
September 29, 1988, among the Company's
predecessors and the Thomas H. Lee Company.
99.5 Third Amendment, dated as of June 24, 1997, to
the Second Amended and Restated Revolving
Credit Facility and Term Loan Agreement dated
February 15, 1994 between the Registrant,
National Canada Finance Corp., and the National
Bank of Canada.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
STANLEY FURNITURE COMPANY, INC.
July 9, 1997 By:/s/Albert L. Prillaman
Date Albert L. Prillaman
President, Chief Executive Officer,
and Chairman of the Board
<PAGE>
Exhibit 4.1
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
c/o Prudential Capital Group
One Gateway Center
7-45 Raymond Boulevard West
Newark, New Jersey 07102
June 16, 1997
Stanley Furniture Company, Inc.
P. O. Box 30
Stanleytown, VA 24168
Attention: Douglas I. Payne, Vice President of Finance
Re: 7.28% Senior Notes due 2004 and 7.57% Series A Senior
Notes due 2005
Gentlemen:
Reference is made to the Note Agreements dated February 15, 1994
and June 29, 1995 (the "Note Agreements") between Stanley Furniture
Company, Inc. (the "Company") and The Prudential Insurance Company
of America ("Prudential"). Capitalized terms used herein without
definition have the meanings ascribed to such terms in the Note
Agreement.
Pursuant to the Company's request, Prudential hereby agrees as
follows:
1. The definition of "Cumulative Amounts Available For
Restricted Payment" shall be amended to read in its entirety
as follows:
"'Cumulative Amounts Available For Restricted Payments'
shall mean for the period (taken as one accounting period)
beginning on January 1, 1997, and ending as of the last
day of the most recently completed fiscal quarter before
any proposed Restricted Payment:
(1) $25,000,000; plus
(2) 50% of the Consolidated Net Earnings or 100% of the
Consolidated Net Loss, as the case may be, during such
period; plus
(3) the total net cash proceeds received by the Company
from the sale of its stock during such period; less
(4) the aggregate amount of all Restricted Payments
made during such period."
2. Notwithstanding anything to the contrary contained in
paragraph 6C(6), the Company may purchase shares of its common
stock from Thomas H. Lee Company and affiliates.
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this letter and return it
to the undersigned, whereupon this letter shall become a binding
agreement between the Company and Prudential.
Very truly yours,
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By:/s/Robert Derrick
Vice President
Acknowledged and agreed to this
24th day of June, 1997.
STANLEY FURNITURE COMPANY, INC.
By:/s/Douglas I. Payne
Douglas I. Payne, Vice President
of Finance
<PAGE>
Exhibit 99.1
FOR IMMEDIATE RELEASE: CONTACT: DOUGLAS I. PAYNE
June 24, 1997 SR.V.P.-Finance &
Administration
(540)627-2157
STANLEY FURNITURE ANNOUNCES STOCK REPURCHASE FROM LEE FUND
STANLEYTOWN, VA., June 24, 1997 -- Stanley Furniture Company, Inc.
(Nasdaq-NNM:STLY) today announced that its Board of Directors has
approved the repurchase of 750,000 shares of its Common Stock from
the M.L. Lee Acquisition Fund, L.P. and its affiliates at a
purchase price of $20 per share. The Lee Fund, which currently
owns approximately 34% of the Company's outstanding stock, will own
22% after this repurchase, which is expected to close by June 30,
1997.
Albert L. Prillaman, president and chief executive officer of
Stanley Furniture Company, stated, "We believe that a repurchase of
our shares is an attractive investment at this time. This
repurchase reflects the Company's strong financial position as well
as our confidence in the Company's future. In addition, this
repurchase is expected to be accretive to earnings per share and
will reduce the overhang caused by the Lee Fund's large holding."
The Company plans to finance the $15 million repurchase with
available cash and borrowings under its bank credit facility. On
a pro forma basis this transaction would add $.06 to earnings per
share for the three month period ended March 30, 1997.
Established in 1924, Stanley Furniture Company is a leading
manufacturer of furniture targeted at the upper-medium price range
of the residential market. Manufacturing facilities are located in
Stanleytown, VA, and Robbinsville, Lexington and West End, NC. Its
Common Stock is traded on the NASDAQ stock market under the symbol
STLY.
Certain statements made in this release are not based on historical
facts, but are forward-looking statements. These statements can be
identified by the use of forward-looking terminology such as
"believes," "expects," "may," "will," "should," or "anticipates" or
the negative thereof or other variations thereon or comparable
terminology. These statements reflect the Company's reasonable
judgment with respect to future events and are subject to risks and
uncertainties that could cause actual results to differ materially
from those in the forward-looking statements. Such risks and
uncertainties include the cyclical nature of the furniture
industry, fluctuations in the price for lumber which is the most
significant raw material used by the Company, competition in the
furniture industry, capital costs and general economic conditions.
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of
June 27, 1997, is among Stanley Furniture Company, Inc., a Delaware
corporation (the "Company"), and the Selling Stockholders listed on
Schedule 1 hereto.
A. The Selling Stockholders own an aggregate of
1,576,402 shares of common stock, $.02 par value,
of the Company (the "Common Stock");
B. The Selling Stockholders desire to sell 750,000
shares of Common Stock (the Redemption
Shares) to the Company, and the Company
desires to purchase the Redemption Shares from
the Selling Stockholders, all on the terms set forth
herein.
In consideration of the mutual promises, representations,
warranties, covenants and conditions set forth in this Agreement,the
parties to this Agreement mutually agree as follows:
1. Purchase and Sale of Redemption Shares. Subject to the
terms and conditions herein provided, the Company hereby agrees to
purchase and pay for, and each of the Selling
Stockholders hereby agrees to sell and transfer the number of
Redemption Shares as set forth opposite the name of such Selling
Stockholder on Schedule 1 hereto. The consideration for the saleand
transfer of the Redemption Shares shall be $20.00 per share. Theclosing
of the foregoing transactions (the "Closing") shall occur on June27, 1997
at such location as is mutually agreeable to the parties or at suchother
time and location as are mutually agreeable to the parties. TheSelling
Stockholders shall make delivery of the Redemption Shares to the
Company at the Closing by delivering to the Company, or itsauthorized
representative, the certificates representing the Redemption Shares
duly endorsed or with stock powers attached thereto duly signed,
against payment of the purchase price in cash, check or by wire
transfer.
2. Representations and Warranties of the SellingStockholders.
(A) Each of the Selling Stockholders represents and warrants to the
Company as follows:
a. The execution and delivery of this Agreement andthe
performance by such Selling Stockholder of such SellingStockholder's
obligations hereunder have been duly authorized by all necessary action binding
agreement of such Selling Stockholder, enforceable against such
Selling Stockholder in accordance with its terms.
b. The Redemption Shares set forth opposite suchSelling
Stockholder in Schedule 1 hereto are owned beneficially and ofrecord
by such Selling Stockholder, there exist no liens, options,charges,
adverse claims or encumbrances of any kind, including any marginloans,
affecting such Redemption Shares and upon delivery of suchRedemption
Shares, the Company will own such Redemption Shares free and clearof
any lien, option, charge, adverse claim or encumbrance of any kind.
c. The consummation by such Selling Stockholder of the
transactions contemplated by this Agreement will not, asapplicable,
violate any provision of the charter or governing documents of such
Selling Stockholder, or violate any provision of, or constitute adefault
under, any mortgage, deed of trust, indenture, or other agreementor
instrument, to which such Selling Stockholder is a party or bywhich any
of its assets are bound, or violate or conflict with any existinglaw,
order, rule, regulation, writ, injunction, judgment or decree ofany
government, governmental instrumentality, agency or body,arbitration
tribunal, or court, domestic or foreign, having jurisdiction oversuch
Selling Stockholder or such Selling Stockholder's property.
(B) Each of the ML-Lee Acquisition Fund, L.P., ML-Lee
Acquisition Fund II,
L.P. and ML-Lee Acquisition Fund (Retirement Accounts) II, L.P.
represents that it has elected to operate as a "BusinessDevelopment
Company" within the meaning of the Investment Company Act of 1940,as
amended.
3. Representations and Warranties of the Company. The
Company represents and warrants to the Selling Stockholders asfollows:
a. The execution and delivery of this Agreement andthe
performance by the Company of its obligations hereunder have been
duly authorized by all necessary
action by the Company and this Agreement is a legal, valid and binding terms.
b. The consummation by the Company of the transactions
contemplated by this Agreement will not violate any provision ofthe
Certificate of Incorporation or Bylaws of the Company, or violateany
provision of, or constitute a default under, any mortgage, deed oftrust,
indenture, or other agreement or instrument, to which the Companyis a
party or by which any of its assets are bound, or violate orconflict with
any existing law, order, rule, regulation, writ, injunction,judgment or
decree of any government, governmental instrumentality, agency or
body, arbitration tribunal, or court, domestic or foreign, having
jurisdiction over the Company or the Company's property.
4. Conditions. In addition to the other conditionscontained
herein, the obligation of the Selling Stockholders to sell andtransfer,
and the obligation of the Company to purchase and pay for, the
Redemption Shares is subject to the meeting of each of thefollowing
conditions at or prior to the Closing:
a. With respect to the obligations of the Company,each of
the representations and warranties of the Selling Stockholders
contained in this Agreement shall be true and correct in allrespects as
of the date of this Agreement and as of the Closing.
b. With respect to the obligations of the Selling
Stockholders, each of the representations and warranties of the
Company contained in this Agreement shall be true and correct inall
respects as of the date of this Agreement and as of the Closing.
c. Neither the Company nor the Selling Stockholdersshall
be prohibited by any action, order, judgment or injunction of acourt of
competent jurisdiction from purchasing or selling the RedemptionShares
under this Agreement.
5. Registration Rights. As an additional consideration tothe
Company to redeem the Redemption Shares in accordance with theterms
of this Agreement, all of the Selling Stockholders who are partiesto the
Registration Rights Agreement have this day entered into anAmendment
No. 1 to Registration Rights Agreement pursuant to they have agreed registration
upon the request of such Selling Stockholders.
6. Termination. Either the Company or the SellingStockholders
may elect to terminate this Agreement if the Redemption Sharesshall not
have been redeemed on or before July 2, 1997.
7. Amendment. This Agreement may be amended at any time
prior to the Closing provided that any such amendment is approvedin
writing by each of the parties. All representations and warrantiesof the
Company and the Selling Stockholders which are true and correct as
modified and approved in any such amendment shall be deemed trueand
correct for the purposes of Sections 2 and 3.
8. Extension; Waiver. At any time prior to the Closingeither
party to this Agreement may (i) extend the time for the performanceof
any of the obligations of the other party, (ii) waive a breach ofa
representation or warranty of the other party, or (iii) waivecompliance
by the other party with any of the agreements or conditionscontained
herein. Any such extension or waiver shall be valid if set forthin a
written instrument signed by the party giving the extension orwaiver.
9. Notices. All notices and other communications given
hereunder shall be in writing. Notices shall be effective whendelivered,
if delivered personally. Otherwise, they shall be effective whensent to
the parties at the addresses or numbers listed below, as follows:(i) on
the business day delivered (or the next business day followingdelivery
if not delivered on a business day) if sent by a local or longdistance
courier, prepaid telegram, telefax or other facsimile means, or(ii) three
days after mailing if mailed by registered or certified U.S. mail,postage
prepaid and return receipt requested.
If to the Company to:
Stanley Furniture Company
P.0. Box 30
Highway 57 West
Stanleytown, Virginia 24168
Attention: Albert L. Prillaman
Telefax No.: (540) 627-5114
David W. Robertson, Esquire
McGuire, Woods, Battle & Boothe, L.L.P.
One James Center
901 East Cary Street
Richmond, Virginia 23219-4030
Telefax No.: (804) 775-1061
If to a Selling Stockholder to:
the address set forth for such Selling Stockholder in Schedule1 hereto,
with a copy to:
James Westra, Esquire
Hutchins, Wheeler & Dittmar
101 Federal Street
Boston, Massachusetts 02110
Telefax No.: (617) 951-1295
or to such other address or number as a party may designate bygiving
notice of the change in the manner set forth above.
10. Miscellaneous. This Agreement (i) constitutes theentire
agreement and supersedes all other prior agreements and
understandings, both written and oral, among the parties withrespect to
the subject matter hereof; (ii) is not intended to and shall notconfer
upon any person or entity, other than the parties hereto, anyrights or
remedies with respect to the subject matter hereof; and (iii) shallnot be
assigned by operation of law or otherwise.
11. Section Headings. Section headings are included solelyfor
convenience and are not to be considered to be part of thisAgreement
and are not intended to be accurate descriptions of the contentsthereof.
12. Assignment. This Agreement shall be binding upon andinure
to the benefit of the parties thereto and their respectivetransferees,
successors and assigns; provided, however, no party may assign this
Agreement without the written consent of the other parties to this
Agreement.
13. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original,but
all of which together shall constitute one instrument.
14. Choice of Law. All questions as to the interpretationand of Delaware
, excluding the choice of law principles thereof.
[Remainder of Page Intentionally Left Blank]
Agreement to be executed on and as of the date first written above.
STANLEY FURNITURE COMPANY, INC.
Albert L. Prillaman
President
ML-LEE ACQUISITION FUND L.P.
By: Mezzanine Investments, L.P.
Its Managing General
Partner
By: ML Mezzanine Inc.
Its General Partner
By:
Name:
Title:
ML-LEE ACQUISITION FUND II, L.P.
By: Mezzanine Investments II,
L.P.
Its Managing General
Partner
By: ML Mezzanine II Inc.
Its General Partner
By:_________________________________
Name:
Title:
ML-LEE ACQUISITION FUND
(RETIREMENT ACCOUNTS) II, L.P.
By: Mezzanine Investments II,
L.P.
Its Managing General
Partner
By: ML Mezzanine II Inc.
Its General Partner
By:_______________________________
Name:
Title:
STATE STREET BANK AND TRUST
COMPANY OF CONNECTICUT, N.A., NOT
'
THE 1989 THOMAS H. LEE NOMINEE
TRUST, DATED 9/29/89
By:______________________________
Name:
Title:
PAXMAN & CO.
By:_______________________________
Name:
Title:
_________________________________
David V. Harkins C/F Jessica
Harkins
__________________________________
David V. Harkins C/f Jason Harkins
_________________________________
Anthony J. DiNovi
Schedule 1
Name of Selling Stockholders No. of Shares
ML-Lee Acquisition Fund, L.P. 727,344
ML-Lee Acquisition Fund II, L.P. 6,281
ML-Lee Acquisition Fund
(Retirement Accounts) II, L.P. 5,032
David V. Harkins C/F Jessica Harkins 272
David V. Harkins C/F Jason Harkins 272
State Street Bank & Trust Company of
Connecticut, N.A., Not Individually, But as
Trustee for the 1989 Thomas H. Lee Nominee
Trust, Dated 9/29/89 10,089
Paxman & Co. 438
Anthony J. DiNovi 272
TOTAL: 750,000
193880-1
<PAGE>
Exhibit 99.3
AMENDMENT NO. 1 TO REGISTRATION RIGHTS AGREEMENT
AMENDMENT NO. 1 (the "Amendment") to the REGISTRATION RIGHTS
AGREEMENT, dated as of November 9, 1992 (the "Agreement"), made
by and among Stanley Furniture Company, Inc., a Delaware
corporation (the "Company"), ML-Lee Acquisition Fund II, L.P., a
Delaware limited partnership, ML-Lee Acquisition Fund (Retirement
Accounts) II, L.P., a Delaware limited partnership, ML-Lee
Acquisition Fund, L.P., a Delaware limited partnership
(collectively, the "ML-Lee Funds"), and the persons listed on
Schedule 1 thereto (the "Lee Stockholders", and together with the
ML-Lee Funds, the "Lee Group"), and Schedule 2 thereto (the
"Management Stockholders") is entered into as of June 27, 1997
between the Company, the Lee Group and the Management
Stockholders.
The ML-Lee Funds and certain other stockholders of the
Company (the "Selling Stockholders") desire to sell shares of
common stock, $.02 par value, of the Company (the "Shares") to
the Company and the Company desires to purchase such Shares
pursuant to a Stock Purchase Agreement to be entered between the
Selling Stockholders and the Company (the "Stock Purchase
Agreement"). The Company, the Lee Group and the Management
Stockholders desire to amend the Agreement as set forth below in
connection with the execution of the Stock Purchase Agreement and
the transactions contemplated thereby.
The parties hereby agree to amend the Agreement as follows:
1. Effective as of the Closing Date pursuant to the Stock
Purchase Agreement (the "Closing Date"), Section 2.1(a) of the
Agreement shall be amended by deleting the clause "provided,
however, that the Lee Group and their successors, transferees and
successive transferees shall be entitled to initiate only three
Share Demand Registrations" in the first sentence thereof and by
inserting "provided, however, that after the date of Amendment
No. 1 to this Agreement, the Lee Group and their successors,
transferees and successive transferees shall be entitled to
initiate only one Share Demand Registration" in its place.
2. Except as expressly set forth in this Amendment, all other
terms and conditions of the Agreement shall remain in full force
and effect. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to such terms in the
Agreement.
3. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original but all
of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed as of the day and year first above
written.
STANLEY FURNITURE COMPANY, INC.
By: s/Albert L. Prillaman
Albert L. Prillaman
President
THOMAS H. LEE, as the Lee Group
Representative
s/Thomas H. Lee
ALBERT L. PRILLAMAN, as the
Management Representative
s/Albert L. Prillaman
<PAGE>
Exhibit 99.4
AMENDMENT NO. 3 TO MANAGEMENT AGREEMENT
AMENDMENT NO. 3 (the "Amendment") to the MANAGEMENT
AGREEMENT, dated as of September 29, 1988 (the "Agreement"), made
by and among the Thomas H. Lee Company, a Massachusetts sole
proprietorship owned by Thomas H. Lee with its principal place of
business at One Boston Place, Boston, Massachusetts (the
"Consultant"), and Stanley Holding Corporation, a Delaware
corporation ("Holding"), Stanley Acquisition Corporation, a
Delaware corporation ("Acquisition") and Interiors Acquisition
Corporation, a Delaware corporation ("Interiors") as amended by
Amendment No. 1 thereto dated as of November 1, 1996 and
Amendment No. 2 thereto dated as of November 13, 1996 is entered
into as of June 27, 1997 between the Consultant and Stanley
Furniture Company, Inc., a Delaware corporation and successor to
Holding, Acquisition and Interiors (the "Company").
The Fund and certain other stockholders of the Company (the
"Selling Stockholders") desire to sell shares of common stock,
$.02 par value, of the Company (the "Shares") to the Company and
the Company desires to purchase such Shares pursuant to a Stock
Purchase Agreement to be entered between the Selling Stockholders
and the Company (the "Stock Purchase Agreement"). The Consultant
and the Company desire to amend the Agreement as set forth below
in connection with the execution of the Stock Repurchase
Agreement and the transactions contemplated thereby.
The parties hereby agree to amend the Agreement as follows:
1. Effective as of the later of July 1, 1997 or the Closing
Date pursuant to the Stock Purchase Agreement, Section 5(b) of
the Agreement shall be amended by deleting "One Hundred Eighty
Thousand Dollars ($180,000)" and by inserting "Ninety Thousand
Dollars ($90,000)" in its place.
2. Except as expressly set forth in this Amendment, all other
terms and conditions of the Agreement shall remain in full force
and effect. Capitalized terms used herein and not otherwise
defined shall have the meaning assigned to such terms in the
Agreement.
3. This Amendment may be executed in any number of
counterparts, each of which shall be deemed an original but all
of which together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed by their duly authorized officers
as of the day and year first above written.
THOMAS H. LEE COMPANY
By: s/C. Hunter Boll
Name:
Title:
STANLEY FURNITURE COMPANY, INC.
By: s/Albert L. Prillaman
Albert L. Prillaman
President
<PAGE>
Exhibit 99.5
THIRD AMENDMENT TO SECOND AMENDED
AND RESTATED REVOLVING CREDIT AGREEMENT
This THIRD AMENDMENT TO SECOND AMENDED AND RESTATED REVOLVING
CREDIT FACILITY dated as of June 24, 1997 (the "Third Amendment")
is by and between
STANLEY FURNITURE COMPANY, INC., a Delaware corporation (the
"Borrower"); and
NATIONAL BANK OF CANADA, a Canadian chartered bank (the
"Lender" or "NBC").
RECITALS
A. National Canada Finance Corp., a Delaware corporation
("NCFC"), and the Lender made a certain credit facility available
to the Borrower pursuant to the terms and conditions contained in
that certain Second Amended and Restated Revolving Credit Agreement
dated as of February 15, 1994 among the Borrower, NCFC and the
Lender, as amended by a First Amendment to Second Amended and
Restated Credit Agreement dated as of August 21, 1995 and a Second
Amendment to Second Amended and Restated Credit Agreement dated as
of October 14, 1996 (as amended, the "Loan Agreement").
B. The Lender has been assigned the rights of NCFC under the
Loan Agreement and the documents related thereto pursuant to the
terms of an Agreement and Transfer Agreement.
C. The Borrower has requested that the Lender make certain
changes to the Loan Agreement.
D. The Lender has agreed to make these changes to the Loan
Agreement as set forth herein.
NOW, THEREFORE, the Borrower and the Lender hereby agree as
follows:
A. The Loan Agreement is amended as follows:
1. Section 8.01(j) is deleted in its entirety and
replaced with the following:
"(j) Restricted Payments. Make any Restricted Payment;
provided, however, Borrower may pay dividends or make payments to
redeem, repurchase or otherwise acquire shares of its stock in an
amount up to $25,000,000.00 plus (A) 50% of Borrower's net income
during the period from January 1, 1997 through the end of the most
recently completed fiscal quarter and (B) the total net cash
proceeds received by the Borrower from the sale of its stock during
such period less (C) the aggregate amount of cash dividends paid or
cash payments made to redeem, repurchase or otherwise acquire
shares of its stock during such period."
2. The Lender acknowledges that Restricted Payments made
in accordance with Section 8.01(j) will not violate Section
8.01(f).
B. The Borrower represents and warrants that, as of the date
hereof, it is not in default of the terms of the Loan Agreement, as
amended hereby, or any of the other documents executed between the
Borrower and the Lender in connection therewith.
C. This Third Amendment may be executed in any number of
counterparts, each of which when so executed and delivered shall be
deemed an original.
D. This Third Amendment and the Loan Agreement, as amended
hereby, shall be deemed to be contracts made under, and for all
purposes shall be construed in accordance with the laws of the
State of North Carolina.
IN WITNESS WHEREOF, the parties hereto have executed or caused
this instrument to be executed under seal as of the day and year
first above written.
STANLEY FURNITURE COMPANY, INC.
ATTEST
By/s/R.Gary Armbrister By/s/Douglas I. Payne
TitleAsst. Treas/Secretary TitleSr.V.P.-Finance & Administration
(CORPORATE SEAL)
NATIONAL BANK OF CANADA
By/s/CCollie
TitleVP & Mgr.
By/s/Alex M. Council,IV
TitleVice President
