AMENDED & RESTATED LOAN AGREEMENT
Exhibit 10.1
AMENDED & RESTATED
Wachovia Bank, National Association
000 Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
(Hereinafter referred to as the “Bank”)
000 Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
(Hereinafter referred to as the “Bank”)
X.X. Xxxxx Arts & Crafts, Inc.
130 X.X. Xxxxx Xxxxx
Xxxxxx, XX 00000
130 X.X. Xxxxx Xxxxx
Xxxxxx, XX 00000
X.X. Xxxxx Incorporated
130 X.X. Xxxxx Xxxxx
Xxxxxx, XX 00000
130 X.X. Xxxxx Xxxxx
Xxxxxx, XX 00000
Moorestown Finance, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx XX 00000
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx XX 00000
Xxxxxxxxx Assets, Inc.
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx XX 00000
000 Xxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx XX 00000
X.X. Xxxxx Urban Renewal, LLC
130 X.X. Xxxxx Xxxxx
Xxxxxx, XX 00000
(Individually and collectively, “Borrower”)
130 X.X. Xxxxx Xxxxx
Xxxxxx, XX 00000
(Individually and collectively, “Borrower”)
This Loan Agreement (“Agreement”) is entered into as of May 31, 2008, by and between Bank and
Borrower.
This Agreement amends and restates in its entirety that certain Loan Agreement dated as of October
28, 2003, as subsequently amended by a Promissory Note and Loan Modification Agreement, dated
February 22, 2006, a Promissory Note and Loan Modification Agreement, dated May 1, 2006, a
Promissory Note and Loan Modification Agreement, dated March 12, 2007, and a Promissory Note and
Loan Modification Agreement dated January 24, 2008, and applies to the loan or loans (individually
and collectively, the “Loan”) evidenced by one or more promissory notes, of even date, or other
notes subject hereto, as modified from time to time (whether one or more, the “Note”), the
commercial letters of credit and standby letters of credit issued hereunder (each, a “Letter of
Credit” and collectively, the “Letters of Credit”) and all Loan Documents.
Relying upon the covenants, agreements, representations and warranties contained in this Agreement,
Bank is willing to extend credit to Borrower upon the terms and subject to the conditions set forth
herein, and Bank and Borrower agree as follows:
DEFINITIONS. Loan Documents. The term “Loan Documents”, as used in this Agreement and the other
Loan Documents, refers to all documents executed in connection with the loans evidenced by (i) a
$30,000,000 Amended & Restated Promissory Note of even date, (ii) a $7,500,000 Promissory Note
dated as of October 28, 2003, as amended from time to time, and (iii) a $22,500,000 Promissory
Note, dated as of October 28, 2003, as amended from time to time, and any letters of credit issued
pursuant to this Agreement, any applications for such letters of credit and any other documents
executed in connection therewith, and may include, without limitation, a commitment letter that
survives closing, this
Agreement, the Note, guaranty agreements, security agreements, security instruments, financing
statements, mortgage instruments, any renewals or modifications, whenever any of the foregoing are
executed, but does not include swap agreements (as defined in 11 U.S.C. § 101). Obligations. The
term “Obligations”, as used in this Agreement and the other Loan Documents, refers to any and all
indebtedness and other obligations under the Note, and any additional or replacement notes, all
other obligations under any other Loan Document(s), and all obligations under any swap agreements
(as defined in 11 U.S.C. § 101) between Borrower and Bank whenever executed. Certain Other Terms.
All terms that are used but not otherwise defined in any of the Loan Documents shall have the
definitions provided in the Uniform Commercial Code.
LETTERS OF CREDIT. Upon the request of Borrower, Bank shall issue commercial letters of credit and
standby letters of credit, provided, the aggregate amount available to be drawn under all
commercial Letters of Credit and standby Letters of Credit plus the aggregate amount of
unreimbursed drawings under all commercial Letters of Credit and standby Letters of Credit at any
one time does not exceed $12,500,000.00, and further provided, no commercial letter of credit shall
expire more than 180 days after the date it is issued and no standby letter of credit shall expire
more than 365 days after the date it is issued, except that upon Borrower’s request, Bank shall
issue letters of credit with auto-renewal clauses. Notwithstanding anything to the contrary
contained herein, the aggregate outstanding principal balance of Advances (as defined in the line
of credit Amended & Restated Promissory Note in the amount of $30,000,000.00, of even date), plus
the aggregate amount available to be drawn under all Letters of Credit plus the aggregate amount of
unreimbursed drawings under all Letters of Credit plus the aggregate face amount of all outstanding
banker’s acceptances created by Bank in its sole discretion at the request of Borrower at any one
time shall not exceed $30,000,000.00. Bank’s obligation to issue Letters of Credit shall terminate
if Borrower is in default (however denominated) under the Note or the other Loan Documents, or in
any case, if not sooner terminated, on May 30, 2009.
LETTER OF CREDIT FEES. Borrower shall pay to Bank, at such times as Bank shall require, Bank’s
standard fees in connection with Letters of Credit, as in effect from time to time, and with
respect to standby Letters of Credit, an additional fee equal to 1.00% per annum on the face amount
of each standby Letter of Credit, payable annually, in advance, for so long as such Letter of
Credit is outstanding.
REPRESENTATIONS. Borrower represents that from the date of this Agreement and until final payment
in full of the Obligations: Accurate Information. All information now and hereafter furnished to
Bank is and will be true, correct and complete in all material respects. Any such information
relating to Borrower’s financial condition will accurately reflect in all material respects,
Borrower’s financial condition as of the date(s) thereof subject to year end audit adjustment,
(including all contingent liabilities of every type (to the extent that such liability would
otherwise be required to be reflected in such financial statements under GAAP)), and Borrower
further represents that its financial condition has not changed materially or adversely since the
date(s) of such documents. Authorization; Non-Contravention. The execution, delivery and
performance by Borrower and any guarantor, as applicable, of this Agreement and other Loan
Documents to which it is a party are within its power, have been duly authorized as may be required
and, if necessary, by making appropriate filings with any governmental agency or unit and are the
legal, binding, valid and enforceable obligations of Borrower and any guarantors, except as such
enforceability may be limited by bankruptcy, insolvency, moratorium or similar laws relating to or
limiting creditors’ rights generally or by equitable principles related thereto; and do not (i)
contravene, or constitute (with or without the giving of notice or lapse of time or both) a
material violation of any provision of applicable law, a violation of the organizational documents
of Borrower or any guarantor, or a default under any material agreement, judgment, injunction,
order, decree or other instrument binding upon or affecting Borrower or any guarantor, (ii) result
in the creation or imposition of any lien (other than the lien(s) created by the Loan Documents) on
any of Borrower’s or any guarantor’s assets, or (iii) give cause for the acceleration of any
material obligations of Borrower or any guarantor to any other creditor. Asset Ownership.
Borrower has good and marketable title to all of the properties and assets reflected on the balance
sheets and financial statements supplied Bank by Borrower, and all such properties and assets are
free and clear of mortgages, security deeds, pledges, liens, charges, and all other encumbrances,
except as otherwise described on Exhibit A, attached hereto and made a part hereof and otherwise
permitted pursuant to the
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“Negative Covenants, Encumbrances” section hereof (the “Permitted
Liens”). To Borrower’s knowledge,
no default has occurred under any Permitted Liens and no claims or interests adverse to Borrower’s
present rights in its properties and assets have arisen. Discharge of Liens and Taxes. Borrower
has duly filed, paid and/or discharged all taxes or other claims that may become a lien on any of
its property or assets, except those not yet due and payable and except to the extent that such
items are being appropriately contested in good faith and an adequate reserve for the payment
thereof is being maintained. Sufficiency of Capital. Borrower is not, and after consummation of
this Agreement and after giving effect to all indebtedness incurred and liens created by Borrower
in connection with the Note and any other Loan Documents, will not be, insolvent within the meaning
of 11 U.S.C. § 101(32). Compliance with Laws. Borrower is in compliance in all material respects
with all federal, state and local laws, rules and regulations applicable to its properties,
operations, business, and finances, including, without limitation, any federal or state laws
relating to liquor (including 18 U.S.C. § 3617, et seq.) or narcotics (including 21 U.S.C. § 801,
et seq.) and/or any commercial crimes; all applicable federal, state and local laws and regulations
intended to protect the environment; and the Employee Retirement Income Security Act of 1974, as
amended (“ERISA”), if applicable. Organization and Authority. Each corporation, partnership or
limited liability company Borrower and/or guarantor, as applicable, is duly created, validly
existing and in good standing under the laws of the state of its organization, and has all powers,
governmental licenses, authorizations, consents and approvals required to operate its business as
now conducted, except where the failure to do so would not have a material adverse effect on the
business, operations or properties of Borrower or any guarantor Each corporation, partnership or
limited liability company Borrower and/or guarantor, as applicable, is duly qualified, licensed and
in good standing in each jurisdiction where qualification or licensing is required by the nature of
its business or the character and location of its property, business or customers, and in which the
failure to so qualify or be licensed, as the case may be, in the aggregate, could have a material
adverse effect on the business, financial position, results of operations, or properties of
Borrower or any such guarantor. No Litigation. As of the date hereof and as of the date of each
Advance under the Loan Documents, there are no pending or threatened suits, claims or demands
against Borrower or any guarantor in excess of $250,000 in the aggregate and not covered by
insurance that have not been disclosed to Bank by Borrower in writing, and approved by Bank.
Regulation U. None of the proceeds of the credit extended pursuant to this Agreement shall be used
directly or indirectly for the purpose of purchasing or carrying any margin stock in violation of
any of the provisions of Regulation U of the Board of Governors of the Federal Reserve System
(“Regulation U”), or for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry margin stock or for any other purchase which might render the Loan a
"Purpose Credit” within the meaning of Regulation U. ERISA. Each employee pension benefit plan,
as defined in ERISA, maintained by Borrower meets, as of the date hereof, the minimum funding
standards of ERISA and all applicable regulations thereto and requirements thereof, and of the
Internal Revenue Code of 1986, as amended. No “Prohibited Transaction” or “Reportable Event” (as
both terms are defined by ERISA) has occurred with respect to any such plan.
AFFIRMATIVE COVENANTS. Borrower agrees that from the date hereof and until final payment in full
of the Obligations, unless Bank shall otherwise consent in writing, Borrower will: Access to Books
and Records. Allow Bank, or its agents, upon reasonable prior notice and during normal business
hours, access to the books, records and such other documents of Borrower as Bank shall reasonably
require, and allow Bank, at Bank’s expense, to inspect, audit and examine the same and to make
extracts therefrom and to make copies thereof, provided that upon the occurrence and during the
continuation of any Default, as defined in the Loan Documents, such inspection, audit, examination,
extracts and copies shall be at Borrower’s expense. Business Continuity. Conduct its business in
substantially the same manner as such business is now and has previously been conducted.
Compliance with Other Agreements. Comply with all terms and conditions contained in this
Agreement, and any other Loan Documents, and swap agreements, if applicable, as defined in the 11
U.S.C. § 101. Estoppel Certificate. Furnish, within 15 days after written request by Bank, a
written statement duly acknowledged of the amount due under the Loans and identifying each
outstanding Letter of Credit, if any, and whether offsets or defenses exist against the
Obligations. Insurance. Maintain adequate insurance coverage with respect to its properties and
business against loss or damage of the kinds and in the amounts customarily insured against by
companies of established reputation engaged in the same or similar businesses including, without
limitation, commercial general liability insurance,
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workers compensation insurance, and business
interruption insurance; all acquired in such amounts and from such companies
as Bank may reasonably require. Management Letter. Borrower shall deliver to Bank within 90 days
after the close of each fiscal year, its Management Letter, if any, in the same form and substance
as is provided to Borrower and prepared by Borrower’s independent certified public accountant.
Maintain Properties. Maintain, preserve and keep its property in good repair, working order and
condition, making all needed replacements, additions and improvements thereto, to the extent
allowed by this Agreement. Non-Default Certificate From Borrower. Deliver to Bank, with the
Financial Statements required below, a certificate signed by Borrower, in the form attached hereto
as Exhibit B, if Borrower is an individual, or by a principal financial officer of Borrower
warranting that no “Default” as specified in the Loan Documents nor any event which, upon the
giving of notice or lapse of time or both, would constitute such a Default, has occurred and
demonstrating Borrower’s compliance with the financial covenants contained herein. Notice of
Default and Other Notices. (a) Notice of Default. Furnish to Bank immediately upon becoming aware
of the existence of any condition or event which constitutes a Default (as defined in the Loan
Documents) or any event which, upon the giving of notice or lapse of time or both, may become a
Default, written notice specifying the nature and period of existence thereof and the action which
Borrower is taking or proposes to take with respect thereto. (b) Other Notices. Promptly notify
Bank in writing of (i) any material adverse change in its financial condition or its business; (ii)
any default under any material agreement, contract or other instrument to which it is a party or by
which any of its properties are bound, or any acceleration of the maturity of any material
indebtedness owing by Borrower; (iii) any material adverse claim against or affecting Borrower or
any part of its properties; (iv) the commencement of, and any material determination in, any
litigation with any third party or any proceeding before any governmental agency or unit affecting
Borrower or the Project (as defined in the Construction Loan Agreement, of even date), which could
result in an uninsured liability in excess of $250,000; and (v) at least 30 days prior thereto, any
change in Borrower’s name or address as shown above, and/or any change in Borrower’s legal
structure other than changes in share ownership of any Borrower that is publicly traded. Other
Financial Information. Deliver promptly such other information regarding the operation, business
affairs, and financial condition of Borrower which Bank may reasonably request. Payment of Debts.
Pay and discharge when due, and before subject to penalty or further charge, and otherwise satisfy
before maturity or delinquency, all obligations, debts, taxes, and liabilities of whatever nature
or amount, except those which Borrower in good faith disputes. Reports and Proxies. Deliver to
Bank, promptly, a copy of all financial statements, reports, notices, and proxy statements, sent by
Borrower to stockholders, and all regular or periodic reports required to be filed by Borrower with
any governmental agency or authority.
NEGATIVE COVENANTS. Borrower agrees that from the date of this Agreement and until final payment
in full of the Obligations, unless Bank shall otherwise consent in writing, Borrower will not:
Change in Fiscal Year. Change its fiscal year without the written consent of Bank, not to be
unreasonable withheld. Change of Control. Make or suffer a change in the ownership of any
publicly traded Borrower in excess of 50% of the outstanding stock or voting power of or in any
such entity in a single transaction or a series of transactions. Encumbrances. Create, assume, or
permit to exist any mortgage, security deed, deed of trust, pledge, lien, charge or other
encumbrance on any of its assets, whether now owned or hereafter acquired, other than: (i) security
interests required by the Loan Documents; (ii) liens for taxes contested in good faith or not yet
due and payable; (iii) liens accruing by law for employee benefits, workers’ compensation or other
similar laws; (iv) Permitted Liens (v) liens relating to capitalized lease obligations or purchase
money financing not to exceed $2,000,000 in the aggregate; (vi) cash deposits or pledges to secure
bids, tenders, contracts, stay, customs and appeal bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of business for which deposits are customary;
(vii) carriers’, warehouse men’s, mechanics, materialmen’s, repairmen’s or other like liens arising
by operation of law for which the obligations are not delinquent; or (viii) judgment liens not
constituting a Default. Guarantees. Guarantee or otherwise become responsible for obligations of
any other person or persons, other than the endorsement of checks and drafts for collection in the
ordinary course of business. Investments. Purchase any stock, securities, or evidence of
indebtedness of any other person or entity except investments in (i) direct obligations of the
United States Government and certificates of deposit of United States commercial banks having a
tier 1 capital ratio of not less than 6% and then in an amount not exceeding 10% of the issuing
bank’s unimpaired capital and surplus and (ii) investment grade securities with a rating,
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or
effective rating, of at least A1 or P1. Default on Other Contracts or Obligations. Default on any
contract with or obligation when due to a third party or default
in the performance of any obligation to a third party incurred for borrowed money, the default of
which could result in an uninsured liability in excess of $500,000. Government Intervention.
Permit the assertion or making of any seizure, vesting or intervention by or under authority of any
governmental entity, as a result of which the management of Borrower or any guarantor is displaced
of its authority in the conduct of its respective business or such business is materially curtailed
or materially impaired. Judgment Entered. Permit the entry of any monetary judgment or the
assessment against, the filing of any tax lien against, or the issuance of any writ of garnishment
or attachment against any property of or debts due Borrower in an amount in excess of
$1,000,000.00, in the aggregate, which is not discharged or execution is not stayed within 30 days
of entry. Prepayment of Other Debt. Retire any long-term debt entered into prior to the date of
this Agreement at a date in advance of its legal obligation to do so; provided that Borrower may
repay such long-term debt if such repayment shall not cause any condition or event which
constitutes a Default (as defined in the Loan Documents executed by the Borrower) or any event
which, upon the giving of notice or lapse of time or both, may become a Default. Retire or
Repurchase Capital Stock. Retire or otherwise acquire any of its capital stock; provided that
Borrower may retire or repurchase capital stock if such retirement or repurchase shall not cause
any condition or event which constitutes a Default (as defined in the Loan Documents executed by
the Borrower) or any event which, upon the giving of notice or lapse of time or both, may become a
Default.
FINANCIAL REPORTING REQUIREMENTS. Borrower shall deliver to the Bank within 90 days after the
close of each fiscal year a copy of its 10K report as required to be filed under the Securities and
Exchange Act of 1934 (“Act”) (and any amendments and modifications to the Act thereto). The 10K
shall contain the audited annual consolidated financial statement for the fiscal year, including
all notes and schedules, prepared in accordance with generally accepted accounting principles
(“GAAP”).
Borrower shall deliver to the Bank within 45 days after the close of each fiscal quarter a copy of
its 10Q report as required to be filed under the Securities and Exchange Act of 1934 (and any
amendments and modifications to the Act thereto). The 10Q shall contain the consolidated financial
statement for the fiscal quarter, including all notes and schedules as required by the 10Q report.
Borrower shall provide to Bank copies of all other reports required to be filed by the Borrower
under the Securities and Exchange Act of 1934 (and any amendments and modifications to the Act
thereto).
Borrower shall deliver promptly such other information regarding the operation, business affairs,
and financial condition of Borrower which Bank may reasonably request.
FINANCIAL COVENANTS. Borrower agrees to the following provisions from the date hereof until final
payment in full of the Obligations, unless Bank shall otherwise consent in writing, and the Debt
Service Coverage Ratio, Leverage Ratio, and Current Ratio covenants shall be calculated on a
consolidated basis, using the financial information for Borrower, its subsidiaries, affiliates and
its holding or parent company, as applicable:
Debt Service Coverage Ratio. Borrower shall maintain a Debt Service Coverage Ratio of not less
than 1.25 to 1.00, to be calculated quarterly, on a rolling four quarters basis. “Debt Service
Coverage Ratio” means the ratio of (i) the sum of net profit plus depreciation plus amortization
plus interest expense plus operating lease (rent) expenses minus all cash dividends, withdrawals
and/or other equity disbursements divided by (ii) the sum of the current portion of long term debt
and capital lease obligations plus interest expenses plus operating lease (rent) expenses.
Leverage Ratio. Borrower shall maintain a Leverage Ratio not greater than .40 to 1.00, to be
calculated quarterly. “Leverage Ratio” means the ratio of (i) Funded Debt divided by (ii) the sum
of Funded Debt plus Tangible Net Worth. “Funded Debt” shall mean, as applied to any person or
entity, the sum of, (a) all indebtedness for borrowed money, including, without limitation, capital
lease obligations, subordinated debt (including debt subordinated to the Bank), and unreimbursed
drawings under letters of credit, or any other monetary obligation evidenced by a note, bond,
debenture or other agreement of that person or entity, (b) letters of credit issued on behalf of
the Borrower,
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(c) Synthetic Lease obligations of Borrower and that portion of any obligation of
Borrower, as lessee, which in accordance with generally accepted
accounting principles is required to be capitalized on the balance sheet of Borrower, and (d) any
contingent obligations of Borrower of indebtedness of others. “Tangible Net Worth” shall mean
total assets minus Total Liabilities. For purposes of this computation, the aggregate amount of
any intangible assets of Borrower including, without limitation, goodwill, franchises, licenses,
patents, trademarks, trade names, copyrights, service marks, and brand names, shall be subtracted
from total assets. “Total Liabilities” shall mean all liabilities of Borrower, including
capitalized leases and all reserves for deferred taxes, debt fully subordinated to Bank on terms
and conditions acceptable to Bank, and other deferred sums appearing on the liabilities side of a
balance sheet and all obligations as lessee under off-balance sheet synthetic leases of Borrower,
all in accordance with generally accepted accounting principles applied on a consistent basis.
Current Ratio. Borrower shall maintain a Current Ratio at each fiscal quarter and each fiscal year
end of not less than 2.00 to 1.00, to be calculated quarterly. “Current Ratio” shall mean Current
Assets divided by Current Liabilities. “Current Assets” shall mean all assets which are so
classified in accordance with generally accepted accounting principles (“GAAP”) and shall also
include Marketable Securities classified as non-current according to GAAP for purposes of this
ratio calculation. “Current Liabilities” shall mean all liabilities which are so classified in
accordance with GAAP.
Deposit Relationship. Borrower shall maintain its primary depository account with Bank.
Loans and Advances. Borrower shall not, during any fiscal year, make loans or advances to any
person or entity, which total more than $1,000,000 in the aggregate, excepting (i) ordinary course
of business travel and expense advances, (ii) payments made on a split-dollar life insurance policy
in the amount of $514,000 and (iii) loans to any other Borrower.
Material Acquisitions. Borrower shall not acquire substantially all of the business or assets or
more than 50% of the outstanding stock or voting power of any other entity or entities requiring a
cash expenditure of more than $20,000,000 in the aggregate and providing that such acquisition
shall not cause any condition or event which constitutes a Default (as defined in the Loan
Documents executed by the Borrower) or any event which, upon the giving of notice or lapse of time
or both, may become a Default.
Limitation on Debt. Borrower shall not, directly or indirectly, create, incur, assume or become
liable for any additional indebtedness, whether contingent or direct, if, giving effect to such
additional debt on a pro forma basis causes the aggregate amount of Borrower’s debt, excluding
obligations to Bank, to exceed $18,000,000. Notwithstanding this limitation on debt, Borrower
shall be allowed to incur debt subordinated to Bank on terms and conditions satisfactory to Bank,
providing that the repayment of such debt shall not cause any condition or event which constitutes
a Default (as defined in the Loan Documents executed by the Borrower) or any event which, upon the
giving of notice or lapse of time or both, may become a Default. Debt in this paragraph shall mean
indebtedness for borrowed money including capital leases and purchase money financing.
Notwithstanding anything in this Financial Covenant section to the contrary, for purposes of
calculating the Debt Service Coverage Ratio, Leverage Ratio, Current Ratio and Limitation on Debt
covenants, the Bank shall calculate the Borrower’s income notwithstanding the provisions of EITF
Issue No. 02-16 “Accounting by a Customer (Including a Reseller) for Certain Consideration Received
from a Vendor” and Financial Accounting Standards No. 123 (revised 2004) “Share-Based Payment”.
CONDITIONS PRECEDENT. The obligations of Bank to make the loan and any advances and to issue any
Letters of Credit pursuant to this Agreement are subject to the following conditions precedent:
Letter of Credit Documents. Receipt by Bank of all documents required by Bank in connection with
Letters of Credit, including without limitation, applications therefor, all in form satisfactory to
Bank. Additional Documents. Receipt by Bank of such additional supporting documents as Bank or
its counsel may reasonably request.
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CURE PERIOD. Except as provided below, a Default based upon Nonpayment, as defined herein, may be
cured within 5 days of the date such payment is due and any other Default may be cured within 30
days (or such longer period not to exceed 90 days if the default is incapable of cure within 30
days and provided that Borrower diligently pursues such cure) after written notice thereof is
mailed to the Borrower by Bank. The Borrower’s right to cure shall be applicable only to curable
defaults and shall not apply, without limitation, to Defaults based upon False Warranty, Cessation
or Bankruptcy. After three (3) defaults requiring mailing of notice during any 12 month period,
Borrower shall no longer have the right to cure such subsequent Default. Bank shall not exercise
its remedies to collect the Obligations except as Bank reasonably deems necessary to protect its
interest in collateral securing the Obligations during a cure period.
DEFAULT. If any of the following occurs and is not cured within the applicable Cure Period, a
default (“Default”) under Loan Documents shall exist: Nonpayment; Nonperformance. The failure of
timely payment or performance of the Obligations or Default, however denominated, under this
Agreement or any other Loan Documents. False Warranty. A warranty or representation made or
deemed made in the Loan Documents or furnished Bank in connection with the loan evidenced by this
Agreement proves materially false, or if of a continuing nature, becomes materially false. Cross
Default. At Bank’s option, (i) any default in payment or performance of any obligation under any
other loans, contracts or agreements of Borrower, any Subsidiary of Borrower, any general partner
of or the holder(s) of the majority ownership interests of Borrower (except holder(s) of the common
stock of the Borrower) with Bank or its affiliates (“Affiliate” shall have the meaning as defined
in 11 U.S.C. § 101, except that the term “Borrower” shall be substituted for the term “Debtor”
therein; “Subsidiary” shall mean any business in which Borrower holds, directly or indirectly, a
controlling interest), or (ii) any default in payment or performance of any obligation under any
other loans aggregating more than $2,500,000 of Borrower, any Subsidiary of Borrower. Cessation;
Bankruptcy. The death of, appointment of a guardian for, dissolution of, termination of existence
of, appointment of a receiver for, assignment for the benefit of creditors of, or commencement of
any bankruptcy or insolvency proceeding by or against Borrower or its Subsidiaries, or any party to
the Loan Documents. Material Business Alteration. Without prior written consent of Bank, a
material alteration in the kind or type of Borrower’s business or that of Borrower’s Subsidiaries,
if any. Material Capital Structure or Business Alteration. Without prior written consent of Bank,
(ii) the sale of substantially all of the business or assets of Borrower, any of Borrower’s
Subsidiaries or any guarantor, or a material portion (10% or more) of such business or assets if
such a sale is outside the ordinary course of business of Borrower, or any of Borrower’s
Subsidiaries or any guarantor, or more than 50% of the outstanding stock or voting power of or in
any such entity in a single transaction or a series of transactions; (ii) the acquisition of
substantially all of the business or assets of any entity, which acquisition has a total cost,
singly or in the aggregate, in excess of $20,000,000; or (iii) should any Borrower or any of
Borrower’s Subsidiaries or any guarantor enter into any merger or consolidation if Borrower, such
subsidiary or guarantor is not the surviving entity; or (iv) should Borrower be delisted from the
NASDAQ, unless Borrower is being listed on another recognized United States stock exchange. ERISA
Liabilities. Borrower incurs unpaid ERISA liabilities in excess of $1,000,000.
REMEDIES UPON DEFAULT. If a Default occurs under the Loan Documents, upon notice to Borrower
(provided that, if Default is due to bankruptcy, no notice to Borrower shall be required), Bank
may, simultaneously with such notice or at any time thereafter, take the following actions: Bank
Lien. Foreclose its security interest or lien against Borrower’s accounts without notice.
Acceleration Upon Default. Accelerate the maturity of any Note and, at Bank’s option, any or all
other Obligations, other than Obligations under any swap agreements (as defined in 11 U.S.C. § 101)
between Borrower and Bank, which shall be governed by the default and termination provisions of
said swap agreements; whereupon such Note and the accelerated Obligations shall be immediately due
and payable; provided, however, if the Default is based upon a bankruptcy or insolvency proceeding
commenced by or against Borrower or any guarantor or endorser of any Note, all Obligations (other
than Obligations under any swap agreement as referenced above) shall automatically and immediately
be due and payable. Cumulative. Exercise any rights and remedies as provided under the Note and
other Loan Documents, or as provided by law or equity.
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WAIVERS AND AMENDMENTS. No waivers, amendments or modifications of any Loan Documents shall be
valid unless in writing and signed by an officer of Bank. No waiver by Bank of any Default shall
operate as a waiver of any other Default or the same Default on a future occasion. Neither the
failure nor any delay on the part of Bank in exercising any right, power, or remedy under the Loan
Documents shall operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other right, power or remedy.
Each Borrower or any person liable under the Notes waives presentment, protest, notice of dishonor,
demand for payment, notice of intention to accelerate maturity, notice of acceleration of maturity,
notice of sale and all other notices of any kind. Further, each agrees that Bank may extend,
modify or renew any Note or make a novation of the loan evidenced by any Note for any period, and
grant any releases, compromises or indulgences with respect to any collateral securing any Note, or
with respect to any other Borrower or any other person liable under the Loan Documents, all without
notice to or consent of each Borrower or each person who may be liable under any Loan Document and
without affecting the liability of Borrower or any person who may be liable under the Loan
Documents.
MISCELLANEOUS PROVISIONS. Assignment. The Loan Documents shall inure to the benefit of and be
binding upon the parties and their respective heirs, legal representatives, successors and assigns.
Bank’s interests in and rights under this Agreement and the other Loan Documents are freely
assignable, in whole or in part, by Bank. In addition, nothing in the Loan Documents shall
prohibit Bank from pledging or assigning any Loan Document or any interest therein to any Federal
Reserve Bank. Borrower shall not assign its rights and interest hereunder without the prior
written consent of Bank, and any attempt by Borrower to assign without Bank’s prior written consent
is null and void. Any assignment shall not release Borrower from the Obligations. Applicable Law;
Conflict Between Documents. Unless otherwise provided in any other Loan Document, the Loan
Documents shall be governed by and construed under the laws of the state named in Bank’s address on
the first page hereof without regard to that state’s conflict of laws principles. If the terms of
any Note should conflict with the terms of any loan agreement or any commitment letter that
survives closing, the terms of such Note shall control. Borrower’s Accounts. Except as prohibited
by law, Borrower grants Bank a security interest in all of Borrower’s accounts with Bank and any of
its affiliates. Jurisdiction. Borrower irrevocably agrees to non-exclusive personal jurisdiction
in the state named in Bank’s address on the first page hereof. Severability. If any provision of
the Loan Documents shall be prohibited or invalid under applicable law, such provision shall be
ineffective but only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of such document. Notices. Any notices to
Borrower shall be sufficiently given, if in writing and mailed or delivered to the Borrower’s
address shown above or such other address as provided hereunder, and to Bank, if in writing and
mailed or delivered to Wachovia Bank, National Association, Mail Code VA7391, P. O. Xxx 00000,
Xxxxxxx, XX 00000 or Wachovia Bank, National Association, Mail Code VA7391, 00 Xxxxx Xxxxxxxxx
Xxxxxx, Xxxxxxx, XX 00000 or such other address as Bank may specify in writing from time to time.
Notices to Bank must include the mail code. In the event that Borrower changes Borrower’s address
at any time prior to the date the Obligations are paid in full, Borrower agrees to promptly give
written notice of said change of address by registered or certified mail, return receipt requested,
all charges prepaid. Plural; Captions. All references in the Loan Documents to Borrower,
guarantor, person, document or other nouns of reference mean both the singular and plural form, as
the case may be, and the term “person” shall mean any individual, person or entity. The captions
contained in the Loan Documents are inserted for convenience only and shall not affect the meaning
or interpretation of the Loan Documents. Advances. Bank may, in its sole discretion, make other
advances which shall be deemed to be advances under the Loan Documents, even though the stated
principal amount of any Note may be exceeded as a result thereof. Posting of Payments. All
payments received during normal banking hours after 2:00 p.m. local time at the office of Bank
first shown above shall be deemed received at the opening of the next banking day. Fees and Taxes.
Borrower shall promptly pay all documentary, intangible recordation and/or similar taxes on this
transaction whether assessed at closing or arising from time to time.
[Signature Page to Follow Immediately Hereafter]
Page 8
IN WITNESS WHEREOF, Borrower and Bank, on the day and year first written above, have caused this
Agreement to be executed under seal.
| X.X. XXXXX ARTS & CRAFTS, INC., a Pennsylvania corporation Taxpayer Identification Number: 00-0000000 |
||||
| By: | ||||
| Xxxx Xxxx | ||||
| Executive Vice President and
Chief Financial Officer |
||||
| X.X. XXXXX INCORPORATED, a Virginia corporation Taxpayer Identification Number: 00-0000000 |
||||
| By: | /s/ Xxxx Xxxx | |||
| Xxxx Xxxx | ||||
| Executive Vice President and
Chief Financial Officer |
||||
| MOORESTOWN FINANCE, INC. a Delaware corporation Taxpayer Identification Number: 00-0000000 |
||||
| By: | /s/ Xxxx Xxxx | |||
| Xxxx Xxxx | ||||
| Executive Vice President and
Chief Financial Officer |
||||
| XXXXXXXXX ASSETS, INC., a Delaware corporation Taxpayer Identification Number: 00-0000000 |
||||
| By: | /s/ Xxxx Xxxx | |||
| Xxxx Xxxx | ||||
| Executive Vice President and
Chief Financial Officer |
||||
Page 9
| X.X. XXXXX URBAN RENEWAL, LLC, a New Jersey limited liability company Taxpayer Identification Number: 00-0000000 |
||||
| By: | /s/ Xxxx Xxxx | |||
| Xxxx Xxxx | ||||
| Authorized Person | ||||
| WACHOVIA BANK, NATIONAL ASSOCIATION |
||||
| By: | /s/ Xxxxx Xxxxx | |||
| Xxxxx Xxxxx, Senior Vice President | ||||
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