EXHIBIT 10.10 (k)
LOAN AGREEMENT
BETWEEN: AMERICAN WOODMARK CORPORATION, a Virginia corporation ("Borrower"),
whose principal place of business and address is 0000 Xxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000.
AND: XXXXXX' CABINET CORPORATION, a Virginia corporation ("Lender"),
whose principal place of business and address is 0000 Xxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000.
DATE: December 31, 2001
RECITAL
A. Borrower has or intended to expand an industrial facility located in
Xxxxxxxxxx, Xxxxx County, Kentucky, for the purpose of manufacturing component
parts for kitchen cabinets and other uses (the "Project") at a cost in excess of
$6,370,000.
B. The Project constitutes an "economic development project" under
Kentucky law and, as such, the Project will enable Borrower to receive certain
tax credits (the "Incentives"), if certain conditions are met. These conditions
include (i) execution of this Agreement and (ii) execution of a financing
agreement (the "Financing Agreement") among Borrower, Lender, and the Kentucky
Economic Development Finance Authority ("KEDFA").
C. Borrower has asked Lender and Lender has agreed (i) to loan Borrower
the sum of Four Million Dollars ($4,000,000.00) to finance a portion of the
Project and (ii) to enter into the Financing Agreement to enable the Borrower to
receive the Incentives so that Borrower will be better able to repay such loan,
subject to the terms and conditions set forth herein.
NOW, THEREFORE, FOR VALUABLE CONSIDERATION, the receipt and sufficiency
of which are hereby acknowledged, Borrower and Lender hereby agree as follows:
1. Terms of Loan.
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1.1 Amount; Use of Proceeds. Lender shall loan Four Million Dollars
($4,000,000) (the "Loan") to Borrower upon execution and delivery of a
promissory note by Borrower in favor of Lender in the form of the attached
Exhibit A (the "Promissory Note"). Borrower shall use the Loan to pay for, or
reimburse Borrower for, costs incurred in connection with the Project.
1.2 Repayment. Borrower shall repay the Loan, together with interest
theron, in accordance with the terms set forth in the Promissory Note.
2. Representation and Warranties.
Borrower makes the following representations and warranties to induce
Lender to enter into this Agreement:
2.1 Authorization. Borrower has the power and authority to enter
into and perform this Agreement and the Promissory Note and has taken all action
necessary to authorize the execution, delivery, and performance of the Agreement
and the Promissory Note.
2.2 Enforceability. This Agreement and the Promissory Note when
executed and delivered will be the valid and binding obligations of Borrower
enforceable in accordance with their respective terms.
2.3 Consent. No consent or approval of any trustee or holder of any
debt or obligation of Borrower, and no consent, permission, authorization, order
or license of any governmental authority is necessary in connection with the
execution, delivery, and performance of this Agreement or the Promissory Note.
2.4 Conflicts. The consummation of the transactions herein provided
for, and compliance by Borrower with the provisions of this Agreement and the
Promissory Note, will not result in breach of the terms of, or constitute a
default under any indenture, agreement or other instrument to which Borrower is
a party or by which Borrower may be bound.
2.5 Payment Default. Borrower is not now in default in the payment
of the principal or interest of any debt for borrowed money.
2.6 Violations of Law. Borrower is not in default under or in
violation of or with respect to any law, rule, regulations, order, writ,
injunction, or decree or any court, arbitrator, governmental commission, bureau,
or other regulatory authority.
2.7 Absence of Litigation. There is no litigation pending which
could materially adversely affect Borrower, its properties or assets, or entry
into or performance of the terms of this Agreement or the Promissory Note.
3. KEDFA Financing Agreement.
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Lender agrees to enter into the Financing Agreement with KEDFA to
enable Borrower to receive the Incentives so that Borrower is better able to
repay the Loan.
4. Condition Precedent.
The execution and performance of this Agreement by Lender is subject
to the following conditions precedent:
4.1 Agreement. Authorization, execution and delivery by Borrower of
this Agreement and the Promissory Note.
4.2 No Default. The non-existence of an Event of Default under the
terms of this Agreement.
5. Affirmative Covenants.
Borrower hereby covenants and agrees to:
5.1 Notice of Liens, Etc. Give prompt notice to Lender of any liens,
judgments, regulatory proceedings, or litigation arising after the date hereof
affecting Borrower or Borrower's properties.
5.2 Additional Instruments. Execute promptly, upon Lender's request,
all additional instruments deemed by Lender necessary or desirable to carry out
the purposes of this Agreement.
5.3 Compliance with Law. Comply with all statutes, laws and
governmental rules, regulations and orders applicable to the business and
property of Borrower, provided that nothing herein shall require compliance with
any statute or governmental rule, regulation or order if the administering
governmental authority has granted formal extension of time for compliance
therewith, or if the validity of such statute, rule, regulation or order, as
applied to Borrower, is being contested in good faith and by appropriate means.
5.4 Notice of Default or Material Change. Promptly notify lender of
the violation by Borrower of any term, promise, covenant or agreement of
Borrower to or with Lender, any material change in the property, business or
affairs of Borrower and any other event or matter which may have a material
effect on the debts, liabilities or obligations of Borrower to Lender.
5.5 Environmental Laws. Borrower shall conduct its business so as to
comply in all material respects with all environmental laws and regulations in
effect in all jurisdictions in which it may at any time be doing business,
including, without limitations, the federal Resource Conservation and Recovery
Act, the federal Comprehensive Environmental Response, Compensation and
Liability Act, the federal Clean Water Act,
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the federal Clean Air Act, and the federal Occupation Safety and Health Act. If
Borrower shall (a) receive notice that any violation of any federal, state, or
local environmental law or regulation may have been committed or is about to be
committed by Borrower, (b) receive notice that any administrative or judicial
compliant or order has been filed or is about to be filed against Borrower
alleging violations of any federal, state, or local environmental law or
regulation or requiring Borrower to take any action in connection with the
release of toxic or hazardous substances into the environment, (c) receive any
notice from a federal, state, or local governmental agency or private party
alleging that Borrower may be liable or responsible for costs associated with a
response to or cleanup of a release of a toxic or hazardous substance into the
environment or any damages caused thereby, or (d) receive notice that Borrower's
properties, or any site which includes Borrower's properties, has been listed as
a "Superfund" site and placed on the Nations Properties List for cleanup, then
Borrower shall provide Lender with a copy of such notice within three days of
Borrower's receipt thereof. Within ten days of Borrower having learned of the
enactment or promulgation of any federal, state, or local environmental law or
regulation which may result in a material adverse change in the condition,
financial or otherwise, of Borrower, Borrower shall provide Lender with notice
thereof.
5.6 Authorization. Borrower will take all action necessary to
authorize the performance of its obligations under this Agreement and the
Promissory Note.
6. Negative Covenants.
Borrower will not, directly or indirectly, unless approved in writing
by Lender in advance:
6.1 Liquidation. Cease business operations, dissolve, or liquidate.
6.2 Sale of Assets. Sell, transfer, lease, or otherwise dispose of
all or substantially all of Borrower's assets to any other person or entity (or
take or permit to be taken any other action which would have substantially the
same effect as any of the foregoing).
6.3 Untrue Documents. Furnish any document to Lender that contains
any untrue statement of material fact or that omits to state a material fact
necessary to make it not misleading in light of the circumstances under which it
was furnished.
7. Events of Default.
Time being of essence, any of the following events shall constitute
an Event of Default by Borrower:
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7.1 Failure to Pay. Failure of borrower to pay when due any debt to
Lender arising under this Agreement or any notes given pursuant to this
Agreement, or any installment thereof.
7.2 Failure to Perform. Failure of Borrower to perform when due any
other obligation of Borrower to Lender under this Agreement or any note given
pursuant hereto; or to timely comply with any other covenant, term or condition
stated in any other instrument given by Borrower to Lender.
7.3 Misrepresentations and Breach of Warranty. Any representation or
warranty made by or on behalf of Borrower herein or otherwise in connection with
transactions contemplated hereby shall prove to have been false or incorrect in
any material respect on the date made.
8. Remedies.
8.1 Acceleration and Other Rights. Upon the occurrence of an Event
of Default as above described, Lender may provide notice thereof to Borrower. If
Borrower fails to cure any Event of Default under Section 7.1 within 10 days
after giving notice or fails to cure any other default within 30 days after the
giving of notice, then Borrower shall be in default under this Agreement and
Lender may declare the entire amount owed by Borrower to Lender hereunder and
under any notes given pursuant to this agreement immediately due and payable,
and Lender may thereafter proceed to exercise all rights conferred upon it by
this agreement or any other instrument, or otherwise available at law or in
equity.
9. Miscellaneous.
9.1 Notices. Any notice required or permitted hereunder shall be in
writing and shall be effective when actually delivered or, if mailed, when
deposited as registered or certified mail directed to the other party at the
address stated at the start of the Agreement. Either party may change the
address for notices to that party by written notice thereof to the other party.
9.2 Survival. All covenants, representations and warranties made by
Borrower herein shall survive the execution and delivery of this Agreement.
9.3 Applicable Law. This Agreement has been executed and delivered
to Lender in the Commonwealth of Virginia but the facilities to be improved with
the proceeds of the Loan are located in the Commonwealth of Kentucky. Borrower
agrees that the law of the Commonwealth of Kentucky shall be applicable for the
purpose of construing this Agreement and determining the validity hereof.
9.4 Payments. All payments of principal and interest and any other
amounts due hereunder shall be made in U.S. Dollars and shall be deemed made
only
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when received by Lender in immediately available funds in the form of a check or
wire transfer.
9.5 No Waiver. No delay or omission to exercise any right, power or
remedy accruing to Lender upon any breach or default of Borrower shall impair
such rights, powers or remedies of Lender, nor shall it be construed to be a
waiver of any such breach of default, or any acquiescence therein, or of any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of Lender of any breach or default must be in
writing and shall be effective only to the extent in such writing specifically
set forth. All remedies shall be cumulative and not in the alternative.
9.6 Captions. Captions applied to the sections of this Agreement are
for convenience only and shall not control or affect the meaning or construction
of any of the provisions of this Agreement.
9.7 Severability. If any term, condition or provision of this
Agreement, or any other document required hereunder, shall be held invalid for
any reason, such offending term, condition or provision shall be stricken
therefrom, and the remainder thereof shall not be affected thereby.
9.8 No Assignment. Borrower may not assign any right nor delegate
any duty under this agreement without consent of Lender.
9.9 Entire Agreement. This Agreement and the additional documents
referred to and provided for herein constitute the entire agreement between the
parties pertaining to the subject matter hereof and supersede all prior and
contemporaneous agreement and understanding between the parties. This Agreement
may be amended only by a written instrument signed by both of the parties
hereto.
9.10 Counterparts. This Agreement may be executed in any number of
counterparts with the same effect as if the signatures thereto and hereto were
upon the same instrument.
9.11 No Third Party Beneficiaries. Each party hereto intends that
this Agreement shall not benefit or create any right or cause of action in or on
behalf of any person or entity other than the parties hereto and their
respective successors and permitted assigns.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
as of the date first hereinabove written.
"Borrower" "Lender"
AMERICAN WOODMARK CORPORATION, XXXXXX' CABINET CORPORATION,
A Virginia corporation a Virginia corporation
By:_____________________________ By:_________________________________
Printed Name: Xxxx Xxxxxxxx Printed Name: Xxxxx Xxxxx
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Title: V.P. - Finance & CFO Title: Secretary/Treasurer
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Exhibit A
PROMISSORY NOTE
$4,000,000 December 31, 2001
For value received AMERICAN WOODMARK CORPORATION, a Virginia
corporation ("Payor"), promises to pay to the order of XXXXXX' CABINET
CORPORATION, a Virginia Corporation, at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxx, XX
00000, (or at such other address as the holder of this note may designate in
writing), the principal sum of Four Million Dollars ($4,000,000), together with
interest thereon at the rate of seven percent (7%) per annum from the date
hereof until fully paid.
1. Maturity. January 1, 2018 is the maturity date of this note when
the entire balance, including accrued but unpaid interest, shall be immediately
due and payable.
2. Payment of Principal. Principal shall be paid at maturity, January
1, 2018.
3. Payment of Interest. Accrued interest shall be paid on the first
day of February, 2002, and on the same day every year thereafter prior to
maturity, and at maturity.
4. Prepayment. All or any portion of principal may be prepaid at any
time without penalty. All payments should be applied first to interest accrued
to the date of payment and then to principal.
5. No Waiver of Holder's Rights. The failure of the holder of this
note promptly to exercise the holder's rights hereunder in the event of any
default shall not constitute a waiver of such rights while such default
continues nor a waiver of such rights in connection with any future default.
6. Waiver of Payor. Payor hereby waives notice of acceptance,
presentment, demand, dishonor, notice of dishonor, and protest.
7. Attorney Fees. In the event this note is placed in the hands of an
attorney for collection, Payor agrees to pay holder's reasonable attorney fees
and collection costs, even though no civil action is filed on this note. If an
action is filed, Payor agrees to pay such additional sum as the trial judge and
any appellate court may adjudge reasonable as attorney fees in the action,
including any appeal, along with statutory costs and disbursements and together
with interest on said sums at the above-
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stated rate from the date of such judgement.
"Payor"
AMERICAN WOODMARK CORPORATION, a
Virginia Corporation
By: ______________________________________
Printed Name: Xxxx Xxxxxxxx
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Title: V.P. - Finance & CFO
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