EXHIBIT 10.44
AMENDED AND RESTATED LOAN REPAYMENT AGREEMENT
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This Amended and Restated Loan Repayment Agreement ("Agreement"), is
entered into as of August 10, 2000, among Xxxxxxx Xxxxx Xxxxxx Inc. ("SSB")
whose principal place of business is located at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
XX 00000, Xxxxxx.xxx Inc. ("Company"), whose principal place of business is
located at 0000 Xxxxx Xxxx Xxxxxxxxx, Xxxxx 0000, Xxxxx Xxxxxx, XX 00000, and
Xxxx Xxxxx ("Xxxxx"), who resides at 000 Xxxxxx Xxxxxx, Xxxxxx Xxxxx, XX 00000.
WHEREAS, SSB has previously extended credit to Xxxxx in the amount of $10.2
million pursuant to the requirements of Federal Reserve Board Regulation T and
other applicable rules and regulations for margin accounts ("Margin Loan"), and
such Margin Loan is collateralized by the shares of the Company's common stock
("Stock"), as well as other property (and the proceeds thereof) contained in a
margin account maintained by Xxxxx at SSB ("Margin Account"); and
WHEREAS, the parties previously had entered into that certain Loan Repayment
Agreement dated as of April 13, 2000 (the "Prior Agreement"), which agreement
shall be superseded in its entirety by this Agreement; and
WHEREAS, as of August 4, 2000, the Margin Account contained an outstanding debit
of $7,020,431.70 (the "Current Margin Amount"); and
WHEREAS, Xxxxx is the Company's Chairman and Chief Executive Officer; and
WHEREAS, At SSB's request, the Company has deposited ten million dollars into an
account at SSB in the Company's name ("Company Account") in order to provide SSB
with additional security for the repayment of the Margin Loan (including accrued
interest); and
WHEREAS, the parties wish to establish the obligations of the Company and Xxxxx
with respect to the repayment of the Margin Loan;
NOW, THEREFORE, in consideration of the parties' covenants contained herein, and
intending to be legally bound by the terms and conditions of this Agreement, the
parties agree as follows:
1.) The securities, cash, and other property contained in the Company Account,
and the proceeds of such property (collectively, "Property"), shall be owned
exclusively by the Company (and not by Xxxxx) but may, under the circumstances
described in Sections 2 and 4 of this Agreement, be used to repay all or part of
the Margin Loan (including accrued interest, if any). While the Margin Loan
remains outstanding, the Company may not withdraw any Property from the Company
Account, or substitute securities or other property for the Property, without
SSB's prior written consent. The Property may be invested only in a money
market fund or overnight repurchase agreements relating to securities issued or
guaranteed by the U.S.
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2.) a) If at the close of trading on Nasdaq on any business day on which the
Margin Loan remains outstanding, the market value of the securities, cash and
other property contained in the Margin Account and the Company Account combined
falls below sixty (60) percent of the margin amount the Client is required by
applicable law or SSB policy to maintain (the "Margin Maintenance Level")
while the Margin Loan is outstanding, the Company shall on the next business
daydeposit a sufficient amount of additional Property in the Company Account to
restore the Margin Account and the Company Account combined to the Margin
Maintenance Level.
b.) In the event the closing price on Nasdaq of the Stock is equal to or
less than six (6) dollars per share in any three consecutive trading days, the
Company may in its sole discretion, upon commencement of trading on the next
business day and without prior notice to or demand upon Xxxxx, direct SSB to
liquidate and sell any or all of the property in the Margin Account (including
the Stock) and apply the proceeds of such sale to the payment of the Margin
Loan. The only officers of the Company authorized to direct SSB to liquidate and
sell any or all of the property in the Margin Account (including the Stock)
shall be the Company's Chief Financial Officer, Controller or Secretary (each an
"Authorized Officer").
c.) Commencing with the third fiscal quarter of 2000 and until such time
as the Margin Loan is repaid in its entirety, Xxxxx agrees to sell a minimum of
100,000 shares of Stock per fiscal quarter (the Company's fiscal year runs from
January 1 to December 31), the proceeds of which must be applied to the
repayment of the Margin Loan. The sale of the Stock must occur on or before the
last trading day of the second month of each fiscal quarter (the "Required Sale
Date"). In the event Xxxxx does not direct the sale of the Stock prior to such
Required Sale Date, SSB shall automatically sell 100,000 shares of Stock on the
Required Sale Date without prior notice to or demand upon Xxxxx and apply the
proceeds of such sale solely to the payment of the Margin Loan. Nothing in this
Section 2(c) shall impair SSB's right at any time while the Margin Loan is
outstanding to demand for any reason the immediate repayment of the Margin Loan
(including accrued interest) in whole or in part. In the event the Margin Loan
is not immediately repaid after a demand by SSB, SSB will be entitled as a
creditor under a loan in default to exercise the remedies described in Section
4(c) and to withdraw, liquidate or sell the stock and other property in the
Margin Account.
d.) SSB shall have no recourse to any assets of the Company other than the
Property in the Company Account in the event such proceeds (together with the
proceeds from the sale of securities, cash and other property in the Margin
Account) are not sufficient to repay the Margin Loan (including accrued
interest, if any) in full. Nothing herein shall prevent SSB from having full
recourse to all of
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Xxxxx'x personal assets to repay any unpaid amount of the Margin Loan (together
with accrued interest, if any, and all costs of collection).
e.) If at the close of trading on Nasdaq on any business day on which
the Margin Loan remains outstanding, the price per share of the Stock equals or
exceeds thirty (30) dollars, the Company shall be permitted to:
(i.) withdraw from the Company Account up to (50) percent of the market value
of the Property and such withdrawn amount shall cease to be security for the
repayment of the Margin Loan; provided, however, that SSB may require the
Company (no later than the next business day) to deposit additional Property
into the Company Account in the event the market value of the securities, cash
and other property in the Margin Account, and the market value of the property
then remaining in the Company Account subsequently falls below the Margin
Maintenance Level. Notwithstanding the foregoing, the Company may not be
required to re-deposit into the Company Account an amount that exceeds its
previous withdrawal[s] from the Company Account; and
(ii.) in its sole discretion, upon commencement of trading on the next business
day and without prior notice to or demand upon Xxxxx, direct SSB to liquidate
and sell any or all of the property in the Margin Account (including the Stock)
and apply the proceeds of such sale to the payment of the Margin Loan. The only
officers of the Company authorized to direct SSB to liquidate and sell any or
all of the property in the Margin Account (including the Stock) shall be the
Authorized Officers.
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f.) Each party hereto agrees that the Margin Loan will solely consist of
the Current Margin Amount, plus any interest that has accrued or may accrue
thereon. Xxxxx may not use any credit previously extended by SSB (except solely
for purposes of accruing interest on the Current Margin Amount), nor will SSB
extend Xxxxx any additional credit, without the prior consent of the Board of
Directors of the Company.
3.) Each party represents and warrants to the other two parties that it has
full authority to enter into this Agreement and to perform its obligations
hereunder. In addition, the Company represents and warrants to SSB that while
the Margin Loan is outstanding, (a) the Property in the Company Account is not
subject to any lien, encumbrance or impediment to transfer, (b) it will not
pledge or hypothecate the Property in the Company Account or grant a security
interest in such Property to a third party, or permit the Property to be sold,
transferred or become subject to any lien or encumbrance, and (c) in the event
SSB liquidates and sells any Property in the Company Account consisting of
securities, the Property will be readily transferable into "street name" in good
deliverable form.
4.) a.) Any of the following events will be considered a "default" by the
Company and/or Xxxxx under this Agreement: (i) any representation or warranty
hereunder by the Company and/or Xxxxx is incorrect in any material respect; (ii)
the Company fails to perform any of its obligations hereunder in any material
respect; (iii) the Company fails to comply with any applicable law, rule or
regulation that prevents it from performing its obligations hereunder in any
material respect; and (iv) a liquidator, receiver or trustee is appointed with
respect to all or
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substantially all of the assets of Xxxxx and/or the Company, or a bankruptcy
petition is filed by or against Xxxxx and/or the Company and in the case of a
petition filed against Xxxxx and/or the Company, the petition is not dismissed
within sixty (60) business days after it is filed.
b.) In the event a default occurs, SSB is authorized, in its sole
discretion, to declare the Margin Loan to be immediately due and payable. In
addition, in the event of a default by the Company under Section 4(a)(iv), SSB
is authorized to liquidate, withdraw or sell the Property in the Company Account
and apply it to the Margin Loan without prior notice to, or demand upon SSB's
the Company or Xxxxx. In addition, any sale may be made in SSB's sole discretion
on the exchange or market where such business is then usually transacted, at
public auction or private sale. All rights and remedies under this Agreement are
cumulative and are in addition to all other rights and remedies that SSB may
have at law or equity. Notwithstanding the foregoing and to the extent permitted
by law, the Company and Xxxxx expressly waive compliance with the provisions of
Section 202 of the New York Lien Law.
5.) None of the parties shall be liable to the other parties for (a) any loss
caused directly or indirectly by causes that are not within the party's
reasonable control, including government restrictions, exchange or market
rulings, suspension of trading, war, strikes or other conditions commonly known
as "Acts of God", or (b) any consequential, incidental, indirect or special
damages, even if such damages are reasonably foreseeable.
6.) This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York, without regard to the conflict of laws rules
of such State.
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7.) This Agreement may not be assigned by Xxxxx or the Company without
SSB's written consent and shall be binding upon the heirs, executors,
administrators, successors and permitted assigns (whichever is applicable) of
the Company and/or Xxxxx. SSB may assign this Agreement without the other
parties' consent or prior notice to the other parties, to any of its affiliates
or subsidiaries that are authorized by law to make margin loans, and this
Agreement shall inure to the benefit of SSB's successors and assigns
(whether by merger, consolidation or otherwise).
8.) a.) Whenever the Margin Loan is repaid in full (including accrued
interest, if any), the Company may withdraw any Property remaining in the
Company Account that is not applied by SSB to such repayment. This
Agreement will terminate upon the repayment of the Margin Loan and such
withdrawal of Property from the Company Account.
b.) This Agreement may be amended only in writing among the parties. If
any provision of this Agreement is held to be invalid, illegal or unenforceable
by reason of any law, rule, administrative order or judicial decision, such
determination shall not affect the validity of the remaining provisions of this
Agreement.
9.) This Agreement (including all exhibits) reflects the entire agreement
between the parties concerning the subject matter of this Agreement and
supersedes any other agreement (including, but not limited to, the Agreement of
Guaranty and Cross Guaranty between the Company and SSB executed on April 13,
2000 and the Prior Agreement), promise, representation or undertaking, whether
written or oral, concerning the subject matter of this Agreement. In the event
of a conflict between the
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provisions of this Agreement and any other agreement among the parties, this
Agreement will govern.
10.) Without the necessity of a judicial determination, and whether or not
litigation occurs, Xxxxx and the Company hereby agree jointly and severally to
indemnify and hold harmless SSB and its directors, officers, employees,
agents and affiliates from any and all claims (whether or not meritorious),
liabilities, judgments, damages, losses, costs and expenses of any nature
whatsoever (including reasonable attorneys' fees and expenses) in any way
related to or arising out of or in connection with a.) the obligations of Xxxxx
and the Company under this Agreement, and b.) the representations and warranties
of Xxxxx and/or the Company in this Agreement. This indemnification shall
survive the termination of this Agreement and the payment of the Margin Loan.
11.) ARBITRATION
. Arbitration is final and binding on the parties.
. The parties are waiving their right to seek remedies in court, including the
right to jury trial.
. Pre-arbitration discovery is generally more limited than and different from
court proceedings.
. The arbitrators' award is not required to include factual findings or legal
reasoning, and any party's rights to appeal or to seek modification of
rulings by the arbitrators is strictly limited.
. The panel of arbitrators will typically include a minority of arbitrators who
were or are affiliated with the securities industry.
The Company and Xxxxx agree that all claims or controversies, whether such
claims or controversies arose prior, on or subsequent to the date hereof,
between the Company and Xxxxx
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and SSB and/or any of its present or former officers, directors, or employees
concerning or arising from (i) the Margin Loan and any other transaction
involving SSB or any predecessor firms by merger, acquisition or other business
combination, whether or not such transaction occurred in the Margin or Company
Account, or (ii) the construction, performance or breach of this Agreement or
any other agreement between the Company, Xxxxx and SSB, or any duty arising from
the business of SSB or otherwise, shall be determined by binding arbitration
before, and only before, any self-regulatory organization or exchange of which
SSB is a member. The Company and Xxxxx may elect which of these arbitration
forums shall hear the matter by sending a registered letter or telegram
addressed to Xxxxxxx Xxxxx Xxxxxx Inc. at 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, XX
00000-0000, Attn: Law Department. If the Company and Xxxxx fail to make such
election and agree upon a single forum before the expiration of five (5) days
after receipt of a written request from SSB to make such election, SSB shall
have the right to choose the forum.
No person shall bring a putative or certified class action to arbitration, nor
seek to enforce any pre-dispute arbitration agreement against any person who has
initiated in court a putative class action; or who is a member of a putative
class who has not opted out of the class with respect to any claims encompassed
by the putative class action until: (i) the class certification is denied, (ii)
the class is decertified, or (iii) the customer is excluded from the class by
the court.
Such forbearance to enforce an agreement to arbitrate shall not constitute a
waiver of any rights under this Agreement except to the extent stated herein.
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BY SIGNING BELOW, THE COMPANY AND XXXXX AGREE TO BE BOUND BY THE TERMS AND
CONDITIONS OF THIS AGREEMENT. THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION
CLAUSE AT SECTION 11.
/s/ Xxxx X. XxXxxxx /s/ Xxxx Xxxxx
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XXXXXX.XXX INC. XXXX XXXXX
By: Xxxx X. XxXxxxx, EVP and CFO
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[Print Name and Title of Authorized Official]
XXXXXXX XXXXX BARNEY INC.
By: /s/ Xxxxxxx Xxxxx Xxxxxx
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[Print Name and Title of Authorized Official]
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