EXHIBIT A
PROMISSORY NOTE
New York, New York January 28, 1994
FOR VALUE RECEIVED, the undersigned unconditionally
promises to pay to the order of THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION) (the "Bank"), at its principal office, One
Chase Manhattan Plaza, New York, New York 10081 (the "Principal
Office"), for the account of the Lending Office (as hereinafter
defined), the principal amount of each loan endorsed on the
schedule attached hereto and made a part hereof (including any
continuations, the "Schedule") on the maturity date of such loan
as shown on the Schedule, and to pay interest on the unpaid
balance of the principal amount of such loan from and including
the date of such loan (as shown on the Schedule) to such maturity
date at a rate per annum equal to: (a) a variable rate equal to:
the higher of (i) the Federal Funds Rate plus 1/2 of 1% and (ii)
the Prime Rate (such higher rate being the "Variable Rate" and
such loan a "Variable Rate Loan"); or (b) a fixed rate 1 and 1/8%
above the Eurodollar Rate applicable to such loan (such loan a
"Eurodollar Loan"); or (c) a fixed rate as the Bank may in its
discretion offer to the undersigned and the undersigned amy
accept (such loan an "Offered Rate Loan"). Any principal not
paid when due shall bear interest from maturity until paid in
full at a rate per annum equal to the Default Rate (as defined
below). Interest shall be payable on the relevant Interest
Payment Date (as defined below). Interest shall be calculated on
the basis of a year of 365 or 366 days (in the case of Variable
Rate Loans) and 360 days (in the case of the Eurodollar Rate and
Offered Rate Loans) and, in each case, for the actual days
elapsed. All payments hereunder shall be made in lawful money of
the United States and in immediately available funds. Any
extension of time for the payment of the principal of this note
resulting from the due date falling on a non-Banking Day shall be
included in the computation of interest. The date, and Interest
Periods (as defined in the Letter Agreement) of, and the interest
rates with respect to, the loans and any payments of principal
shall be recorded by the Bank on its books and prior to any
transfer of this note (or, at the discretion of the Bank, at any
other time) endorsed by the Bank on the Schedule, which shall be
conclusive in the absence of manifest error; provided, however,
that the Bank's failure to endorse the Schedule shall not affect
the undersigned's obligations hereunder.
1. Certain Definitions. As used herein, the
following terms shall have the corresponding meanings:
(a) "Banking Day" means any day on which
commercial banks are not authorized or required to close in New
York City and, where such term is used in the definition of
"Eurodollar Rate" or refers to the Eurodollar Rate, which is also
a day on which dealings in U.S. dollar deposits are carried out
in the London interbank market.
(b) "Default Rate" means, in respect of any
amount not paid when due, a rate per annum during the period
commencing on the due date until such amount is paid in full
equal to: (a) if a Variable Rate Loan, a floating rate 2% above
the rate of interest thereon (including any margin); (b) if an
Offered Rate Loan or Eurodollar Loan, a fixed rate 2% above the
rate of interest in effect thereon (including the margin) at the
time of default until the end of the then current Interest Period
(as defined in the Letter Agreement) therefor and, thereafter, a
floating rate 2% above the Variable Rate (including any margin).
(c) "Eurodollar Rate" means (i) the rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of 1%)
quoted by the Bank at approximately 11:00 a.m. London time (or as
soon thereafter as practicable) two Banking Days prior to the
first day of an Interest Period (as defined in the Letter
Agreement) during which the Eurodollar Rate will accrue for the
offering by the Bank to leading banks in the London interbank
market of U.S. dollar deposits having a term comparable to such
loan and in an amount comparable to the principal amount of such
loan divided by (ii) 1 minus the Reserve Requirement.
(d) "Federal Funds Rate" means, for any day, the
rate per annum (expressed on a 365/366 basis of calculation, if
the rate hereunder is so calculated) equal to the weighted
average of the rates on overnight Federal funds transactions as
published by the Federal Reserve Bank of New York for such day
(or for any day that is not a Banking Day, for the immediately
preceding Banking Day).
(e) "Interest Payment Date" means for any loan
hereunder, the first day commencing after such loan as follows:
(i) for any Variable Rate Loan, the last Banking Day of each
March, June, September and December; (ii) for any Offered Rate
Loan, at 90-day intervals; (iii) for any Eurodollar Loan, at
three month intervals; (iv) for any amount accruing interest at
the Default Rate, on demand; and (v) for any amount, upon
maturity and any repayment.
(f) "Lending Office" means the Principal Office
or such other office (or affiliate) as the Bank may from time to
time specify.
(g) "Prime Rate" means that rate of interest from
time to time announced by the Bank at the Principal Office as its
prime commercial lending rate.
(h) "Regulatory Change" means any change after
the date hereof in United States federal, state or foreign laws
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or regulations (including Regulation D) or the adoption or making
after such date of any interpretations, directives or requests
applying to a class of banks including the Bank of or under any
United States federal or state, or any foreign, laws or
regulations (whether or not having the force of law) by any court
or governmental or monetary authority charged with the
interpretation or administration thereof.
(i) "Reserve Requirement" means, for any
Eurodollar Loan, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are
required to be maintained during the term of such Loan under
Regulation D of the Board of Governors of the Federal Reserve
System as amended or supplemented from time to time ("Regulation
D") by member banks of the Federal Reserve System in New York
City with deposits exceeding one billion U.S. dollars against
"Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be
maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes
deposits by reference to which the Eurodollar Rate is to be
determined or (ii) any category of extensions of credit or other
assets which include Eurodollar Loans.
2. Related Letter Agreement. Loans evidenced hereby
are made pursuant to that certain letter agreement dated January
28, 1994, between the Bank and the undersigned (the "Letter
Agreement").
3. Additional Costs, Etc. (a) If as a result of any
Regulatory Change, the Bank determines that the cost to the Bank
of making or maintaining any Eurodollar Loan evidenced hereby is
increased, or any amount received or receivable by the Bank
hereunder is reduced, or the Bank is required to make any payment
in connection with an transaction contemplated hereby, then the
undersigned shall pay to the Bank on demand such additional
amount or amounts as the Bank determines will compensate the Bank
for such increased cost, reduction or payment.
(b) If it becomes unlawful for the Bank or its
Lending Office to maintain a Eurodollar Loan, the Bank shall
promptly notify, the Borrower, and such Loan shall be thereby
converted into a Variable Rate Loan on the date specified by the
Bank.
(c) If there is any payment of a Eurodollar Loan
prior to its stated maturity (by reason of acceleration or
otherwise), the undersigned will promptly pay the Bank on demand
an amount determined by the Bank in good faith sufficient to
compensate it for such payment.
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4. Events of Default. If any of the following events
shall occur and be continuing: (a) the undersigned shall fail to
pay the principal of, or interest on, this note, or any other
amount payable under this note, as and when due and payable; (b)
any representation or warranty made or deemed made by the
undersigned in this note or the Letter Agreement (or otherwise
executed in connection with this note) (this note and the Letter
Agreement of the undersigned being the, "Facility Documents") or
which is contained in any certificate, document, opinion,
financial or other statement furnished at any time under or in
connection with any Facility Documents, shall prove to have been
incorrect in any material respect on or as of the date made or
deemed made; (c) the undersigned shall fail to perform or observe
any term, covenant or agreement contained in any Facility
Document on its part to be performed or observed; (d) the
undersigned shall fail to pay when due any indebtedness
(including but not limited to indebtedness for borrowed money) or
if any such indebtedness shall become due and payable, or shall
be capable of becoming due and payable at the option of any
holder thereof, by acceleration of its maturity; or if there
shall be any default by the undersigned under any agreement
relating to such indebtedness; provided that this subsection (d)
shall not apply to that certain Credit Agreement (the "Credit
Agreement") dated as of January 15, 1993 among the undersigned,
the Bank, as agent, and the banks signatory, thereto, (e) the
undersigned shall fail to pay when due any indebtedness under the
Credit Agreement or if any such indebtedness shall become due and
payable by acceleration of its maturity; or (f) the undersigned:
(i) shall generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as its debts become due;
(ii) shall make an assignment for the benefit of creditors; (iii)
shall file a petition in bankruptcy or for any relief under any
law of any jurisdiction relating to reorganization, arrangement,
readjustment of debt, dissolution or liquidation; (iv) shall have
any such petition filed against it in which an adjudication is
made or order for relief is entered or which shall remain
undismissed for a period of 30 days or shall consent or acquiesce
thereto; (v) shall have had a receiver, custodian or trustee
appointed for all or a substantial part of its property; in any
such case, if the Bank shall elect by notice to the undersigned,
the unpaid principal amount of this note, together with accrued
interest, shall become forthwith due and payable; provided that
in the case of an event of default under clause (f) above, the
unpaid principal amount of this note, together with accrued
interest, shall immediately become due and payable without any
notice or other action by the Bank.
5. Miscellaneous. (a) The undersigned waives
presentment, notice of dishonor, protest and any other formality
with respect to this note.
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(b) The undersigned agrees to reimburse the Bank
on demand for all costs, expenses and charges (including without
limitation, fees and charges of external legal counsel for the
Bank and costs allocated by its internal legal department) in
connection with the preparation, interpretation, performance or
enforcement of this note and the Letter Agreement.
(c) This note shall be binding on the undersigned
and its successors and assigns and shall inure to the benefit of
the Bank and its successors and assigns, except that the
undersigned may not delegate any obligations hereunder without
the prior written consent of the Bank.
(d) The undersigned consents to the nonexclusive
jurisdiction and venue of the state and federal courts located in
the City of New York. Service of process by the Bank in
connection with any dispute shall be binding on the undersigned
if sent to the undersigned by registered mail at the address
specified below. The undersigned waives any right the
undersigned may have to jury trial.
(e) This note shall be governed by and
interpreted and construed in accordance with the law of the State
of New York, provided that the foregoing is not intended to limit
the maximum rate of interest which may be charged or collected by
the Bank hereon if, under the law applicable to it, the Bank may
charge or collect such interest at a higher rate than is
permissible under the law of said State. In no case shall the
interest hereon exceed the maximum amount which the Bank may
charge or collect under such law applicable to it.
LADD FURNITURE INC.
By
Name: William S. Creekmuir
Title: Senior Vice President,
Chief Financial Officer,
Secretary and Treasurer
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Loan Number, Maturity Amount of Balance
Amount and Date of Payment and Remaining Notation
Date Interest Rate Loan Loan Number Unpaid Made By
EXHIBIT B
(Letterhead of counsel to the Borrower)
[Closing Date]
The Chase Manhattan Bank, N.A.
1 Chase Manhattan Plaza
New York, New York 10081
Ladies and Gentlemen:
We have acted as counsel to Ladd Furniture Inc. (the
"Borrower") in connection with the execution and delivery of that
certain Letter Agreement (the "Letter Agreement") dated as of
[January 28, 1994] between the Borrower and The Chase Manhattan
Bank, N.A. (the "Lender") and the Note (as defined in the Letter
Agreement) executed by the Borrower in connection with the Letter
Agreement. Except as otherwise defined herein, all terms used
herein and defined in the Letter Agreement, the Note or any
agreement delivered thereunder shall have the meanings assigned
to them therein.
In connection with this opinion, we have examined
executed copies of the Facility Documents and such other
documents, records, agreements and certificates as we have deemed
appropriate. We have also reviewed such matters of law as we
have considered relevant for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its assets and to transact the business in which
it is now engaged or proposed to be engaged, and is duly
qualified as a foreign corporation and in good standing under the
laws of each other jurisdiction in which such qualification is
required.
2. The execution, delivery and performance by the
Borrower of the Facility Documents have been duly authorized by
all necessary corporate action and do not and will not: (a)
contravene the Borrower's charter or bylaws or any applicable law
or any contractual provision binding on or affecting the
Borrower.
3. Each Facility Document is, or when delivered under
the Letter Agreement will be, a legal, valid and binding
obligation of the Borrower, enforceable against the Borrower in
accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally.
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4. To the best of our knowledge (after due inquiry),
there are no pending or threatened actions, suits or proceedings
against or affecting the Borrower before any court, governmental
agency or arbitrator, which may, in any one case or in the
aggregate, materially adversely affect the financial condition,
operations, properties or business of the Borrower or the ability
of the Borrower to perform its obligations under the Facility
Documents.
Very truly yours,
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