Exhibit 10.1
LOAN AGREEMENT
Wachovia Bank, National Association
000 Xxxxx Xxxx
Xxxxxx, Xxx Xxxxxx 00000
(Hereinafter referred to as the "Bank")
X.X. Xxxxx Arts & Crafts, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
X.X. Xxxxx Incorporated
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Moorestown Finance, Inc.
000 Xxxxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxxxx Assets, Inc.
000 Xxxxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
X.X. Xxxxx Urban Renewal, LLC
000 Xxxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
(Individually and collectively "Borrower")
This Loan Agreement ("Agreement") is entered into as of October 28, 2003, by and
between Bank and Borrower.
This Agreement amends and restates in its entirety that certain Loan Agreement
dated July 9, 2002 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 $25,000,000 Promissory Note, (ii) a
$22,500,000 Promissory Note, and (iii) a $7,500,000 Promissory Note, all of even
date, 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 Notes, 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. ss. 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 Notes, 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. ss. 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 $7,500,000.00, 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.
Notwithstanding anything to the contrary contained herein, the aggregate
outstanding principal balance of Advances (as defined in the line of credit
Promissory Note in the amount of $25,000,000.00, 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
$25,000,000.00. The Letters of Credit are to be used by Borrower solely for
inventory purchases. 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 July 1, 2004.
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. Any such information relating to Borrower's financial condition will
accurately reflect Borrower's financial condition as of the date(s) thereof,
(including all contingent liabilities of every type), 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; and do not (i) contravene, or constitute (with or without the
giving of notice or lapse of time or both) a violation of any provision of
applicable law, a violation of the organizational documents of Borrower or any
guarantor, or a default under any 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 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 (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 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. ss. 101(32). Compliance
with Laws. Borrower is in compliance in all respects with all federal, state and
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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. ss. 3617, et seq.) or narcotics
(including 21 U.S.C. ss. 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. 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, properties or
prospects 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. ss. 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, 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
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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 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. 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; (iii) liens accruing by law for employee benefits; or (iv) Permitted
Liens. 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, 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 $250,000. 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 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.
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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 1.35 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, (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.
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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, excepting (i) ordinary course of business travel and expense advances
and (ii) payments made on a split-dollar life insurance policy in the amount of
$514,000.00, to any person or entity, which total more than $1,000,000.00 in the
aggregate.
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
$10,000,000.00 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 $8,000,000.00. 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.
Optional Hedge. Borrower may, in Borrower's discretion, hedge any of the
$7,500,000 and $22,500,000 Loans' floating interest expense for the full term of
such Loans by maintaining an interest rate swap, cap or collar with Bank or
other counterparty acceptable to Bank in a notional amount equal to the then
principal balance of the Loans and providing for a fixed rate satisfactory to
Bank, and containing such other items and conditions as shall be reasonably
acceptable to Bank.
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. Opinion of Counsel. On or prior to
the date hereof, Bank shall have received a written opinion of the counsel of
Borrower acceptable to Bank that includes confirmation of the following: (a) The
accuracy, to such counsel's knowledge, of the representations set forth in this
Agreement in the Representations Subparagraphs entitled "Authorization;
Non-Contravention"; "Compliance with Laws", and "Organization and Authority".
(b) This Agreement and other Loan Documents have been duly executed and
delivered by Borrower and constitute the legal, valid and binding obligations of
Borrower, enforceable in accordance with their terms, subject to general
principles of bankruptcy and equity. (c) No registration with, consent of,
approval of, or other action by, any federal, state or other governmental
authority or regulatory body is required by law in connection with the execution
and delivery of this Agreement and the other Loan Documents, or the extension of
credit under this Agreement or the other Loan Documents, or, if so required,
such registration has been made, and such consent or approval given or such
other appropriate action taken.
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
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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 or Affiliate 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. ss. 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 or Affiliate 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,
its Subsidiaries or Affiliates, if any, or the holder(s) of the majority
ownership interests of Borrower, 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. Material Capital
Structure or Business Alteration. Without prior written consent of Bank, (i) a
material alteration in the kind or type of Borrower's business or that of
Borrower's Subsidiaries or Affiliates, if any; (ii) the sale of substantially
all of the business or assets of Borrower, any of Borrower's Subsidiaries or
Affiliates 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 Affiliates 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; (iii) 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 $10,000,000; or (iv)
should any Borrower or any of Borrower's Subsidiaries or Affiliates or any
guarantor enter into any merger or consolidation; or (v) should Borrower be
delisted from the NASDAQ, unless Borrower is being listed on another recognized
United States stock exchange. Material Adverse Change. Bank determines in good
faith, in its sole discretion, that the prospects for payment or performance of
the Obligations are impaired or there has occurred a material adverse change in
the business or prospects of Borrower, financial or otherwise. 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. ss. 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.
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
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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.
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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.
By: Xxxxxx X. Xxxxxx
-----------------------------------------(SEAL)
Xxxxxx X. Xxxxxx, Chief Financial Officer
X.X. Xxxxx Incorporated
By: Xxxxxx X. Xxxxxx
-----------------------------------------(SEAL)
Xxxxxx X. Xxxxxx, Chief Financial Officer
Moorestown Finance, Inc.
By: Xxxxxx X. Xxxxxx
-----------------------------------------(SEAL)
Xxxxxx X. Xxxxxx, Chief Financial Officer
Xxxxxxxxx Assets, Inc.
By: Xxxxxx X. Xxxxxx
-----------------------------------------(SEAL)
Xxxxxx X. Xxxxxx, Chief Financial Officer
X.X. Xxxxx Urban Renewal, LLC
By: Xxxxxx X. Xxxxxx
-----------------------------------------(SEAL)
Xxxxxx X. Xxxxxx, Member
Wachovia Bank, National Association
By: Xxxxx Xxxxx
-----------------------------------------(SEAL)
Xxxxx Xxxxx, Vice President
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