January 28, 1994
LADD Furniture, Inc.
1 Plaza Center
Box HP3
High Point, North Carolina 27261-1500
Attn: Mr. William S. Creekmuir
Senior Vice President and Chief Financial Officer
Ladies and Gentlemen:
The Chase Manhattan Bank, N.A. ("Lender") is pleased to
confirm that it is prepared to make funds available to LADD
Furniture Inc. ("Borrower") for general corporate purposes,
including acquisitions, subject to the terms and conditions
outlined below.
Commitment Lender agrees to make loans ("Loans") in an
aggregate principal amount not to exceed at any
one time $20,000,000, as such amount may be
reduced in part or in whole by three business
days' written notice to Lender (the "Commit-
ment"). Borrower may borrow, repay and prepay
Loans and reborrow at any time from January 28,
1994 to but excluding January 27, 1995 (the
"Availability Period"), subject to the limita-
tions set forth herein and in a promissory note
(the "Note"), which shall evidence the Loans
and be substantially in the form of Exhibit A
attached hereto.
Termination/ Borrower, may upon at least three business
Reduction of days' notice to Lender, terminate at any time,
Commitment or reduce from time to time, the unused amount
of the Commitment. All accrued commitment fees
shall be payable on the effective date of such
reduction or termination.
Commitment A commitment fee shall accrue on the daily
Fee average unused Commitment during the Avail-
ability Period at a rate per annum equal to 3/8
of 1%, calculated on the basis of a 365/366 day
year, for the actual number of days elapsed,
and payable quarterly in arrears on the last
business day of each calendar quarter.
Interest Each Loan shall bear interest as selected by
Rate Borrower and provided in the Note.
Interest Eurodollar Loans (defined in the Note) shall be
Periods and available for interest periods ("Interest
Maturity Periods"), of, at Borrower's selection, one,
two, three or six months. Offered Rate Loans
(defined in the Note) shall be available for
Interest Periods offered by Lender in its sole
discretion and accepted by Borrower. No Inter-
est Period may extend beyond January 27, 1995,
the date on which all Loans shall finally
mature.
Payments and All payments and prepayments of principal and
Prepayments interest made on the terms and conditions
specified in the Note.
Drawdowns Borrower may borrow under the Commitment by
giving Lender notice by 12:00 noon New York
City time, on the same business day of a Vari-
able Rate Loan or an Offered Rate Loan, as the
case may be, and at least three business days
prior to a Eurodollar Loan.
Conditions The obligation of Lender to make Loans to
of Lending Borrower is subject to the conditions precedent
that: (a) in the case of the initial Loan,
Lender shall have received (i) the Note duly
executed and delivered by Borrower, (ii) corpo-
rate borrowing resolution certified by Borrow-
er's Secretary or Assistant Secretary, (iii) an
incumbency certificate of Borrower's Secretary
or Assistant Secretary setting forth the names,
titles and true signatures of Borrower's offi-
cers authorized to sign this Agreement and the
Note, (iv) an opinion of counsel to the Borrow-
er substantially in the form of Exhibit B
hereto, (v) in the case of the initial Loan, a
certificate signed by a duly authorized officer
of Borrower, dated the date of such Loan,
certifying that since October 2, 1993, there
has been no material adverse change in the
condition (financial or otherwise), business,
operations or prospects of Borrower or any of
its subsidiaries and (b) in the case of any
Loans, (i) the fact that the statement referred
to in clause (a)(v) above is true on the date
of such Loan, and (ii) no default or Event of
Default under this Agreement or the Note has
occurred and is continuing, or would result
from the making of such Loan.
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Representa- Borrower hereby represents and warrants that:
tions and (a) this Agreement and the Note when delivered
Warranties will be the legal, valid and binding obliga-
tions of Borrower enforceable against Borrower
in accordance with their terms, except to the
extent that such enforcement may be limited by
applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights gener-
ally, and (b) the execution, delivery and per-
formance by Borrower of this Agreement and the
Note have been authorized by all necessary
corporate action and do not and will not con-
travene the Borrower's charter or by-laws or
any applicable law or any contractual provision
binding on or affecting the Borrower.
Default Events which may cause the acceleration of the
maturity of any Loan ("Events of Default") are
as specified in the Note. Lender may terminate
the Commitment upon the occurrence of any Event
of Default, but it shall terminate immediately
upon the occurrence of any "bankruptcy" or
"insolvency" Event of Default.
Participations Lender may sell to one or more entities a par-
ticipation in all or any part of a Loan, but
such participant shall not have any rights or
benefits under this Agreement or the Note and
Lender shall in no event be obligated to such
participant under their participation agreement
to take or refrain from taking any action here-
under or under the Note, except that Lender may
agree in the participation agreement that it
will not, without the consent of such partici-
pant, agree to (i) extend any stated payment
date for any principal or interest or (ii)
reduce the principal of or the interest rate on
any participated Loan below the rate at which
such participant is entitled to receive inter-
est thereon. Lender may furnish information
concerning Borrower or any of its subsidiaries
to prospective participants provided that such
persons agree to maintain the confidentiality
of such information which is not public.
Governing Law THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK.
Please evidence your acceptance of the foregoing by signing
and returning to us the enclosed copy of this Agreement on or
before January 27, 1994, the date on which our commitment to
enter into this Agreement (if not accepted prior thereto) will
expire.
Very truly yours,
THE CHASE MANHATTAN BANK, N.A.
By
Name: Thomas P. Durney
Title: Vice President
Agreed and Accepted:
LADD FURNITURE INC.
By s/William S. Creekmuir
Name: William S. Creekmuir
Title: Senior Vice President,
Chief Financial Officer,
Secretary and Treasurer
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