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PROMISSORY NOTE AND LOAN MODIFICATION AGREEMENT

Addendum or Modifications

PROMISSORY NOTE AND LOAN MODIFICATION AGREEMENT | Document Parties: AC Moore Arts  Crafts, Inc | AC Moore Incorporated | AC Moore Urban Renewal, LLC | Blackwood Assets, Inc | Moorestown Finance, Inc | Wachovia Bank, National Association You are currently viewing:
This Addendum or Modifications involves

AC Moore Arts Crafts, Inc | AC Moore Incorporated | AC Moore Urban Renewal, LLC | Blackwood Assets, Inc | Moorestown Finance, Inc | Wachovia Bank, National Association

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Title: PROMISSORY NOTE AND LOAN MODIFICATION AGREEMENT
Date: 3/12/2007
Industry: Retail (Specialty)     Sector: Services

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Exhibit 10.27

PROMISSORY NOTE AND LOAN MODIFICATION AGREEMENT

A.C. Moore Arts & Crafts, Inc.
130 A.C. Moore Drive
Berlin, NJ 08009

A.C. Moore Incorporated
130 A.C. Moore Drive
Berlin, NJ 08009

Moorestown Finance, Inc.
103 Foulk Road, Suite 200
Wilmington DE 19803

Blackwood Assets, Inc.
103 Foulk Road, Suite 200
Wilmington DE 19803

A.C. Moore Urban Renewal, LLC
130 A.C. Moore Drive
Berlin, NJ 08009
(Individually and collectively, " Borrower ")

Wachovia Bank, National Association
190 River Road
Summit, New Jersey 07901
(hereinafter referred to as the " Bank ")

THIS AGREEMENT is entered into on March 12, 2007 by and between Bank and Borrower.

RECITALS

Bank is the holder of the following notes: (i) a Promissory Note (the " $35MM Note ") executed and delivered by Borrower, dated October 28, 2003, as subsequently amended by a Promissory Note and Loan Modification Agreement, dated February 22, 2006, and Promissory Note and Loan Modification Agreement, dated May 1, 2006, (ii) a Promissory Note (the " $22.5MM Note ") executed and delivered by Borrower, dated October 28, 2003, as subsequently amended by Promissory Note and Loan Modification Agreement, dated May 1, 2006, (iii) a Promissory Note (the " $7.5MM Note "; executed and delivered by Borrower, dated October 28, 2003, as subsequently amended by a Promissory Note and Loan Modification Agreement, dated May 1, 2006, and certain other loan documents, including without limitation, a Loan Agreement, dated October 28, 2003 (the " Loan Agreement "), and a Security Agreement, dated October 28, 2003 (the " Security Agreement "); and

Borrower and Bank have agreed to modify the terms of the Loan Documents; and

In consideration of Bank’s continued extension of credit and the agreements contained herein, the parties agree as follows:

 

 

 

AGREEMENT

$35MM NOTE MODIFICATIONS. The following modifications shall apply only to the $35MM Note:

     1.  Maturity Date . The term of the $35,000,000.00 line of credit shall be extended to May 31, 2008 (the " Maturity Date ") with all outstanding principal and interest due on or before the Maturity Date.

     2.  Repayment Terms . The $35MM Note shall be due and payable in consecutive monthly payments of accrued interest only, commencing on April 1, 2007, and continuing on the same day of each month thereafter until fully paid. In any event, all principal and accrued interest shall be due and payable on the Maturity Date.

$35MM NOTE, $22.5MM NOTE AND $7.5MM NOTE MODIFICATIONS . The following modifications shall apply to the Loan Documents related to the $35MM Note, $22.5MM Note and the $7.5MM Note:

     1.  Interest Rate. The " Margin " means the applicable margin based upon the following Debt Service Coverage Ratio (" DSCR "), as defined in the Loan Agreement as amended herein below, as follows:

DEBT SERVICE COVERAGE RATIO — TRAILING 12 MONTHS

 

 

 

 

 

 

 

 

 

 

GREATER

 

LESS THAN

 

 

THAN

 

OR EQUAL TO

 

MARGIN

1.75

 

 

 

 

 

 

0.50

%

1.35

 

 

1.75

 

 

 

0.65

%

1.25

 

 

1.35

 

 

 

0.90

%



     2.  Negative Covenants.

          a. Change in Fiscal Year . Change its fiscal year without the written consent of Bank, not to be unreasonably withheld.

          b. Encumbrances . Create, assume, or permit to exist any mortgage, security deed, deed of trust, pledge, lien, charge or other encumbrance on any of its assets, whether now owned or hereafter acquired, other than: (i) security interests required by the Loan Documents; (ii) liens for taxes contested in good faith; (iii) liens accruing by law for employee benefits; (iv) Permitted Liens or (v) liens relating to capitalized lease obligations or purchase money financing not to exceed $2,000,000 in the aggregate.

          c. Default on Other Contracts or Obligations. Default on any contract with or obligation when due to a third party or default in the performance of any obligation to a third party incurred for borrowed money, the default of which could result in an uninsured liability in excess of $500,000.

     3.  Financial Covenants.

          a. Debt Service Coverage Ratio . Borrower shall maintain a Debt Service Coverage Ratio of not less than 1.25 to 1.00, to be calculated quarterly, on a rolling four quarters basis. " Debt Service Coverage Ratio " means the ratio of (i) the sum of net profit plus depreciation plus amortization plus interest expense plus operating lease (rent) expenses minus all cash dividends, withdrawals and/or other equity disbursements divided by (ii) the sum of the current portion of long term debt and capital lease obligations plus interest expenses plus operating lease (rent) expenses.

-2-

 

 

          b. Material Acquisitions . Borrower shall not acquire substantially all of the business or assets or more than 50% of the outstanding stock or voting power of any other entity or entities requiring a cash expenditure of more than $20,000,000 in the aggregate and providing that such acquisition shall not cause any condition or event which constitutes a Default (as defined in the Loan Documents executed by the Borrower) or any event which, upon the giving of notice or lapse of time or both, may become a Default.

          c. Limitation on Debt. Borrower shall not, directly or indirectly, create, incur, assume or become liable for any additional indebtedness, whether contingent or direct, if, giving effect to such additional debt on a pro forma basis causes the aggregate amount of Borrower’s debt, excluding obligations to Bank, to exceed $18,000,000.00. Notwithstanding this limitation on debt, Borrower shall be allowed to incur debt subordinated to Bank on terms and conditions satisfactory to Bank, providing that the repayment of such debt shall not cause any condition or event which constitutes a Default (as defined in the Loan Documents executed by the Borrower) or any event which, upon the giving of notice or lapse of time or both, may become a default. Debt in this paragraph shall mean indebtedness for borrowed money including capital leases and purchase money financing.

     4.  Default.

          a. Cross Default . At Bank’s option, (i) any default in payment or performance of any obligation under any other loans, contracts or agreements of Borrower, any Subsidiary of Borrower, any general partner of or the holder(s) of the majority ownership interests of Borrower (except holder(s) of the common stock of the Borrower) with Bank or its affiliates (" Affiliate " shall have the meaning as defined in 11 U.S.C. § 101, except that the term " Borrower " shall be substituted for the term " Debtor " therein; " Subsidiary " shall mea


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