SunTrust Bank, North Central Florida
Post Office Box 310
Ocala, FL 34478
Tel (000) 000-0000 Exhibit 10(c)
SunTrust
April 18, 2001
Xx. Xxxxx X. Xxxxxxx, President
Nobility Homes, Inc.
0000 X.X. 7th ST
Ocala, FL 34478
Dear Xx. Xxxxxxx:
The following agreement is provided in an effort to clarify the terms,
conditions and covenants relative to the $2,500,000 Line of Credit ("Line"),
which was provided your organization by SunTrust Bank, a Georgia state-chartered
bank. If requested by Nobility Homes, Inc., SunTrust Bank will increase the
line to $4,000,000.00, provided however, that Nobility Homes, Inc. is not in
default of any loan covenants. Nobility Homes, Inc. agrees to execute all
necessary documents relative to increasing the line of credit. This agreement
shall supersede the previous agreement dated March 4, 1998. The Line is offered
subject to the following terms, conditions and covenants.
A. TERMS OF LINE
1. Borrower: Advances under the line shall be made to Nobility Homes,
Inc. ("Borrower") which shall be responsible for the repayment of the
advances.
2. Amount of Line: The maximum amount of the Line shall be Two Million,
Five Hundred Thousand and No/100 Dollars ($2,500,000.00).
3. Purpose: Advances under the Line are to be used for general short-term
working capital requirements which occur in the normal course of
Borrower's business.
4. Term of Line: The Line shall be represented and evidenced by a
promissory note or notes, payable on demand of the Bank. The Bank's
obligation to advance under this Line of Credit Commitment shall expire
on demand and shall be subject to the Borrower's continued banking
relationship with the Bank, as well as the continued satisfactory
financial condition of the Borrower, in the opinion of the Bank.
5. Interest Rate: Advances under the Line shall bear and accrue interest
at a rate per annum which is defined as SunTrust Banks', Inc. Prime
Rate minus 1/2% (loan rate today would be 7.5%). Interest shall be due
and payable monthly. Rate basis is floating, with adjustments made the
day of change.
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5.1 Calculation of Interest: All interest under the Note or hereunder shall
be calculated on the basis of a 360-day year for the actual number of
days elapsed in an interest period (actual/360 method), unless the Bank
shall otherwise elect.
6. Advances: The sums contemplated to be advanced may be repaid and
re-advanced pursuant to the terms hereof, so long as this agreement
remains in effect. The advances may be repaid in whole or in part at
any time without prepayment premium, penalty, or fee whatsoever.
7. Line of Credit Paydown: During the term of this commitment, the
outstandings under the Line shall be paid down to a balance not to
exceed One and No/100 Dollars ($1.00) for thirty (30) consecutive days.
8. Loan Security: The advances shall be extended on an unsecured basis;
however the Borrower shall not, without the prior written consent of
the Bank, permit or suffer to exist any lien, charge, encumbrance, or
security interest in or upon the Borrower's business assets with the
exception of floor plan lines of credit occurring in the normal course
of business, in as much as they do not adversely impact the financial
covenants detailed in this agreement.
B. REQUIREMENTS AND CONDITIONS OF LINE
1. Financial Information: Borrower shall maintain books and records in
accordance with generally accepted accounting principles and shall
furnish to the Bank the following periodic financial information:
(a) Quarterly Reports: Within 45 days after the end of each calendar
quarter, an income statement and a balance sheet prepared in accordance
with generally accepted accounting principles, certified by the chief
financial officer or president of Borrower as being true and accurate;
(b) Annual Reports: Within 90 days after the end of each fiscal year, an
income statement and a reconciliation of surplus statement of the
Borrower for such year, and a balance sheet as of the end of such year,
prepared in accordance with generally accepted auditing standards
certified by independent certified public accountants of recognized
standing selected by the Borrower and satisfactory to the Bank; and
(c) No Default Certificates: Together with each report required by
Subsection (a) and (b), shall submit a certificate of its president or
chief financial officer that no Default or Event of Default exists, the
nature and duration thereof and the Borrower's intention with respect
thereto.
If the Borrower has Subsidiaries, the financial statements required
above shall be consolidated and, if required by the Bank, consolidating
form for the Borrower and all Subsidiaries required by generally
accepted accounting principles to be consolidated for financial
reporting purposes, and/or,
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(d) Other Information: In addition to the financial statements required
herein, the bank reserves the right to require other or additional
financial or other information concerning the Borrower and/or its
Subsidiaries.
2. Conditions Precedent to Borrowing: Prior to any Advance of the
proceeds of any Loan, the following conditions shall have been
satisfied, in the sole opinion of the Bank and its counsel;
2.1 Conditions Precedent to Each Advance: The following conditions shall
have been satisfied prior to any advance, in the sole opinion of the
Bank and its counsel:
(a) Advance Request: Automatic advances under the line of credit to
cover cash shortfalls in the Borrower's depository accounts with Bank
as provided under the automatic sweep service currently in place with
Bank are permitted. In the event of the need for a manual advance under
the line, the Borrower shall deliver to the Bank a written request for
Advance signed by an authorized officer of the firm as stated in the
corporate resolutions.
(b) No Default: No default shall have occurred and be continuing or
will occur upon the making of the Advance in question.
(c) No Adverse Change: There shall have been no material adverse
change in the condition, financial or otherwise, of the Borrower or any
Subsidiary from such condition as it existed on the date of the most
recent financial statements of Xxxxxxxx delivered prior to date hereof.
C. COVENANTS OF THE BORROWER
The Borrower covenants and agrees that from the date hereof and until payment in
full of the Indebtedness and the formal termination of this Agreement, unless
the Bank shall otherwise consent in writing, the Borrower and each Subsidiary:
1. Use of Loan Proceeds: Shall use the proceeds of the Loan only for the
commercial purposes permitted herein or otherwise permitted by the Bank
and furnish the bank all evidence that it may reasonably require with
respect to such use.
2. Insurance: Shall maintain such liability insurance, workers'
compensation insurance, and casualty insurance as may be required by
law, customary and usual for prudent businesses in its industry or as
may be reasonably required by the Bank.
3. Payment of Taxes. Etc.: Shall pay before delinquent all of its debts
and taxes except that the Bank shall not unreasonably withhold its
consent to nonpayment of taxes being actively contested in accordance
with law (provided that the Bank may require bonding or other
assurances).
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4. Compliance: Hazardous Materials: Shall strictly comply with all laws,
regulations, ordinances and other legal requirements, specifically
including, without limitation. ERISA, all securities laws and all laws
relating to hazardous materials and the environment. Unless approved in
writing by the Bank, neither the Borrower nor any Subsidiary shall
engage in the storage, manufacture, disposition, processing, handling,
use or transportation of any hazardous or toxic materials, whether or
not in compliance with applicable laws and regulations.
5. Change in Business: Shall not enter into any business which is
substantially different from the business or businesses in which it is
presently engaged.
6. Sale of Business: Shall maintain its corporate existence, good standing
and necessary qualifications to do business and shall not sell, lease,
assign or otherwise dispose of any substantial portion of its assets
(other than sales of obsolete or worn-out equipment and sales of
inventory in the ordinary course of business). Change in the principal
ownership of the Firm will cause the Line to become immediately due and
payable.
7. Events of Default: Each of the following shall constitute an Event of
Default along with any events of default as contained with the
promissory note:
(a) Any representation or warranty made by the Borrower or any other
party to any Loan Document (other than the Bank) herein or therein or
in any certificate or report furnished in connection herewith or
therewith shall prove to have been untrue or incorrect in any material
respect when made; or
(b) There shall occur any default by the Borrower in the payment, when
due, of any principal of or interest on the Note, any amounts due
hereunder or any other Loan Document or any other indebtedness (not
cured within the grace period provided in such Note or in the document
or instrument evidencing such Indebtedness);
(c) There shall occur any default by the Borrower to any Loan Document
(other than the Bank) in the performance of any agreement, covenant or
obligation contained in this Agreement or such Loan Document not
provided for elsewhere and such default is not cured within any grace
period provided in this Agreement or such other loan Document; or
(d) The Borrower or any Subsidiary shall (i) voluntarily liquidate or
terminate operations or apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or
liquidator or such Person or of all or of a substantial part of its
assets, (ii) admit in writing its inability, or be generally unable, to
pay its debts as the debts become due, (iii) make a general assignment
for the benefit of its creditors, (iv) commence a voluntary case under
the federal Bankruptcy Code ( as now or hereafter in effect), (v) file
a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency;
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(e) Without its application, approval or consent, a proceeding shall
be commenced, in any court of competent jurisdiction, seeking in
respect of such Person any remedy under the federal Bankruptcy Code,
the liquidation, reorganization, dissolution, winding-up, or composi-
tion or readjustment of debt, the appointment of a trustee, receiver,
liquidator or the like of such Person, or of all or any substantial
part of the assets of such Person, or other like relief under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts.
8. Remedies: If any Default shall occur, the Bank may, without notice to
the Borrower, at its option, withhold further Advances to the Borrower
of proceeds of the Loans. Should any Event of Default occur and not be
cured upon demand following delivery of written notice from the bank to
the Borrower complete upon hand or overnight delivery or upon facsimile
delivery or mailing by certified mail, return receipt requested, the
Bank may declare any or all indebtedness to be immediately due and
payable, bring suit against the Borrower to collect the indebtedness,
exercise any remedy available to the Bank hereunder and take any action
or exercise any remedy provided herein or in any other Loan Document or
under applicable law. No remedy shall be exclusive of other remedies
or impair the right of the Bank to exercise any other remedies.
9. Severability: No failure on the part of the Bank to exercise, and no
delay in exercising, any right hereunder or under any other Loan
Document shall operate as a waiver thereof nor shall any single or
partial exercise of any right hereunder preclude any other or further
exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and are in addition to any other
remedies provided by law, any Loan Document or otherwise.
9.3 Notices: Any notice or other communication hereunder to any party
hereto shall be by hand delivery, overnight delivery, facsimile,
telegram, telex or registered certified mail and unless otherwise
provided herein shall be deemed to have been given or made when
delivered, telegraphed, telexed, faxed or deposited in the mails,
postage prepaid, addressed to the party at its address specified below
(or at any other address that the party may hereafter specify to the
other parties in writing):
The Bank: SunTrust Bank, a Georgia state-chartered bank
Corporate Lending Division
000 X. Xxxxxx Xxxxxxx Xxxx.
Ocala, FL 34470
The Borrower: Nobility Homes, Inc.
0000 X. X. 7th Street
Ocala, FL 34474
9.4 Valid Existence and Power: The Borrower and each subsidiary is a
corporation duly organized validly existing and in good standing under
the laws of the State of Florida and is duly qualified or licensed to
transact business in all places where the failure to be
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so qualified would have a material adverse effect on it. The Borrower
and each other Entity which is a party to any Loan Document (other than
the Bank) has the power to make and perform the Loan Documents executed
by it and all such instruments will constitute the legal, valid and
binding obligations of such Entity, enforceable in accordance with
their respective terms, subject only to bankruptcy and similar laws
affecting creditors' rights generally.
10. Survival of Representations: All representations and warranties made
herein shall survive the making of the loans hereunder and the delivery
of the Notes, and shall continue in full force and effect so long as
any indebtedness is outstanding, there exists any commitment by the
Bank to the Borrowers and until this Agreement is formally terminated
in writing.
11. Commitment Expiration: This commitment shall expire unless it has been
accepted in writing and the acceptance received by the undersigned on
or before April 30, 2001.
Please indicate your acceptance of this commitment and the terms and conditions
contained herein by executing your acceptance immediately below and returning
one executed copy of the Commitment Letter and Agreement to the Bank.
We would like to express our appreciation for the opportunity you have given us
to meet your financial needs and look forward to an ongoing mutually
satisfactory relationship.
Sincerely,
/s/ Xxxxx X. Xxxxxxxx
Xxxxx X. Xxxxxxxx
Vice President
LMT/lr
XXXXXXXX'S ACCEPTANCE OF COMMITMENT AND AGREEMENT
The above Revolving Credit Agreement is hereby accepted on the terms and
conditions outlined therein.
Nobility Homes, Inc.
By: /s/ Xxxxx X. Xxxxxxx 4-19-01
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Xxxxx X. Xxxxxxx, President Date
