1
Exhibit 10.4
Promissory Note
(Term Loan)
$2,000,000 New York, New York
November 10, 1997
FOR VALUE RECEIVED, RIVER OAKS FURNITURE, INC., a Mississippi
corporation having its principal place of business located in Xxxxxx,
Mississippi R O. WEST, INC., a Mississippi corporation having its principal
place of business in Xxxxxx, Mississippi, R. O. EAST, INC., a Mississippi
corporation having its principal place of business in Xxxxxx, Mississippi, and
XXXXXX MANUFACTURING COMPANY, a Tennessee corporation having its principal place
of business in Xxxxxx, Mississippi (collectively, the "Borrowers"), jointly and
severally, hereby promise to pay to the order of BNY FINANCIAL CORPORATION (the
"Lender"), in its individual capacity as Lender, at its office located at 0000
Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (or at such other place or
places as the Lender may designate in writing) in lawful money of the United
States of America, in immediately available funds, the principal amount of TWO
MILLION DOLLARS ($2,000,000) on January 1, 1999. The entire unpaid principal
balance hereof, together with all interest accrued thereon, shall be payable on
January 1, 1999 or such earlier date as may be required pursuant to the terms of
this Note or that certain Revolving Credit and Term Loan Agreement dated as of
July 26, 1996 among the Borrowers, the financial institutions party thereto and
BNY Financial Corporation, in its capacity as Agent (as from time to time
amended, supplemented or replaced, the "Agreement" -- all capitalized terms not
otherwise defined herein shall have the respective meanings set forth in the
Agreement), and to pay interest in arrears on the last business day of this
month and each month hereafter, in like money, at said office.
The Lender may at any time, in its sole discretion, require the
creation of a reserve account for cash collateral (the "Reserve Account") to be
in the name, possession and control of the Lender, which Reserve Account is to
be funded monthly in an amount of $100,000 per month (the "Monthly Funding
Amount"), the Monthly Funding Amount to be adjustable at any time in the sole
discretion of the Lender. Upon creation thereof, the Lender may fund the Reserve
Account with Advances under the Revolving Credit Facility of the Agreement, such
Advances to be Base Rate Loans. The Borrowers grant to the Lender a security
interest in the Reserve Account and all monies contained therein, to secure the
Borrowers' obligations under this Note, all Obligations under the Agreement and
all other obligations of the Borrowers, or any of them, due and owing to the
Lender now or at any time hereafter.
The Borrowers agree that all Collateral that serves as security for
the Obligations under the Agreement, whether granted by the Agreement, the
Security Agreement, the Guaranties, any other Security Instrument, or any other
Loan Document, shall secure the obligations created under this Term Note.
2
If payment of any sums due under this Term Note or under the
Agreement or any Loan Document is accelerated under the terms of the Agreement
or under the terms of the other Loan Documents executed in connection with the
Agreement, the then remaining principal amount hereof and accrued but unpaid
interest thereon shall bear interest which shall be payable on demand at the
rate of fourteen percent (14%) per annum, or the maximum rate permitted by
applicable law, if lower. If any principal payment, interest payment or other
amount due under this Term Note is not paid when due hereunder, the Lender may
declare all amounts of principal, interest and other amounts hereunder
immediately due and payable or, in the event of any acceleration of the
Agreement or any Loan Document, this Term Note shall become immediately due and
payable, in each case without presentation, demand, protest or notice of any
kind, all of which are hereby waived by the Borrowers.
In the event this Term Note is not paid when due at any stated or
accelerated maturity, the Borrowers agree, jointly and severally, to pay, in
addition to the principal and interest due hereunder, all costs of collection,
including reasonable attorneys'fees, and interest thereon at the rate set forth
in the immediately preceding paragraph.
Reference is hereby made to that certain Term Note of even date
herewith in the principal amount of $1,000,000 by the Borrowers in favor of the
Lender (the "Second Term Note"). The Borrowers agree that no payments made to
the Lender by the Borrowers, or any other amounts received by the Lender on
behalf of any of the Borrowers' Obligations from any source whatsoever, may be
applied to reduce the principal amount of the Second Term Note until all
interest, principal and any other fees or costs under this Term Note are paid in
full and satisfied.
Interest shall accrue on the outstanding principal amount under this
Term Note from the date hereof at a rate of twelve percent (12%) per annum.
All Persons bound on this obligation, whether primarily or
secondarily liable as principals, sureties, guarantors, endorsers or otherwise,
hereby waive to the full extent permitted by law the benefits of all provisions
of law for stay or delay of execution or sale of property or other satisfaction
of 'udgment against any of them on account of liability hereon until judgment be
obtained and execution issues against any other of them and returned satisfied
or until it can be shown that the maker or any other party hereto had no
property available for the satisfaction of the debt evidenced by this
instrument, or until any other proceedings can be had against any of them, also
their right, if any, to require the holder hereof to hold as security for this
Term Note any collateral deposited by any of said Persons as security. Protest,
notice of protest, notice of dishonor, diligence or any other formality are
hereby waived by all parties bound hereon.
2
3
IN WITNESS WHEREOF, the Borrowers have caused this Term Note to be
made, executed and delivered by its duly authorized representative as of the
date and year first above written, all pursuant to authority duly granted.
RIVER OAKS FURNITURE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxx
-----------------------------
Title: Chairman and CEO
----------------------------
R.O. WEST, INC.
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
-----------------------------
Title: Vice President and CFO
----------------------------
R.O. EAST, INC.
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
-----------------------------
Title: Vice President and CFO
----------------------------
XXXXXX MANUFACTURING COMPANY
By: /s/ Xxxxxx Xxxxxx
-------------------------------
Name: Xxxxxx Xxxxxx
-----------------------------
Title: Vice President and CFO
----------------------------
3
