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Exhibit 10.10
PROMISSORY NOTE
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BORROWER: Citi Trends, Inc.
LENDER: Bank of
America, N.A.
102 Fahm Street
CCS-Commercial Banking
Savannah, GA 31401
FL9-100-03-15
600 Peachtree St. NE
Atlanta, GA 30308
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PRINCIPAL AMOUNT: $3,000,000.00
DATE OF NOTE: JUNE 21,2004
PROMISE TO PAY. Citi Trends, Inc.
("Borrower") promises to pay to Bank of
America, N.A. ("Lender"), or order, in
lawful money of the United States of
America, the principal amount of Three
Million & 00/100 Dollars ($3,000,000.00)
or so much as may be outstanding, together
with interest on the unpaid
outstanding principal balance of each
advance. Interest shall be calculated from
the date of each advance until repayment of
each advance.
PAYMENT. Borrower will pay this loan in one
payment of all outstanding principal
plus all accrued unpaid interest on June
30, 2005. In addition, Borrower will
pay regular monthly payments of all accrued
unpaid interest due as of each
payment date, beginning July 26,2004, with
all subsequent interest payments to
be due on the same day of each month after
that. Unless otherwise agreed or
required by applicable law, payments will
be applied first to any accrued unpaid
interest; then to principal; then to any
late charges; and then to any unpaid
collection costs. The annual interest rate
for this Note is computed on a
365/360 basis; that is, by applying the
ratio of the annual interest rate over a
year of 360 days, multiplied by the
outstanding principal balance, multiplied by
the actual number of days the principal
balance is outstanding. Borrower will
pay Lender at Lender's address shown above
or at such other place as Lender may
designate in writing.
VARIABLE INTEREST RATE. The interest rate
on this Note is subject to change from
time to time based on changes in an
independent index which is the "LIBOR Daily
Floating Rate" which is the fluctuating
rate of interest (rounded upwards, if
necessary to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any
successor page) as the 1 month London
interbank offered rate for deposits in
United States Dollars at approximately
11:00 a.m. (London time) on the second
preceding business day, as adjusted from
time to time in Lender's sole
discretion for then-applicable reserve
requirements, deposit insurance
assessment rates and other regulatory
costs; if for any reason such rate is not
available, the term "LIBOR Daily Floating
Rate" shall mean the fluctuating rate
of interest equal to the rate of interest
(rounded upwards, if necessary to the
nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the 1 month London
interbank offered rate for deposits in
United States Dollars at approximately
11:00 a.m. (London time) on the second
preceding day, as adjusted from time to
time in Lender's sole discretion for
then-applicable reserve requirements,
deposit insurance assessment rates and
other regulatory costs; provided,
however, if more than one rate is specified
on Reuters Screen LIBO page, the
applicable rate shall be the arithmetic
mean of all such rates (the "Index").
The Index is not necessarily the lowest
rate charged by Lender on its loans. If
the Index becomes unavailable during the
term of this loan, Lender may designate
a substitute index after notice to
Borrower. Lender will tell Borrower the
current Index rate upon Borrower's request.
The interest rate change will not
occur more often than each date of such
change in the Index. Borrower
understands that Lender may make loans
based on other rates as well. The
interest rate to be applied to the unpaid
principal balance of this Note will be
at a rate of 2.000 percentage points over
the Index. NOTICE: Under no
circumstances will the interest rate on
this Note be more than the maximum rate
allowed by applicable law.
PREPAYMENT. Borrower may pay without
penalty all or a portion of the amount owed
earlier than it is due. Early payments will
not, unless agreed to by Lender in
writing, relieve Borrower of Borrower's
obligation to continue to make payments
of accrued unpaid interest. Rather, early
payments will reduce the principal
balance due. Borrower agrees not to send
Lender payments marked "paid in full",
"without recourse", or similar language. If
Borrower sends such a payment,
Lender may accept it without losing any of
Lender's rights under this Note, and
Borrower will remain obligated to pay any
further amount owed to Lender. All
written communications concerning disputed
amounts, including any check or other
payment instrument that indicates that the
payment constitutes "payment in full"
of the amount owed or that is tendered with
other conditions or limitations or
as full satisfaction of a disputed amount
must be mailed or delivered to: Bank
of America, N.A.; CCS-Commercial Banking;
FL9-100-03-15; 600 Peachtree St. NE;
Atlanta, GA 30308.
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LATE CHARGE. If a payment is 15 days or
more late, Borrower will be charged
4.000% of the unpaid portion of the
regularly scheduled payment, regardless of
any partial payments Lender has
received.
INTEREST AFTER DEFAULT. Upon default,
including failure to pay upon final
maturity, Lender, at its option, may, if
permitted under applicable law,
increase the variable interest rate on this
Note to 8.000 percentage points over
the Index. The interest rate will not
exceed the maximum rate permitted by
applicable law.
DEFAULT. Each of the following shall
constitute an event of default ("Event of
Default") under this Note:
PAYMENT
DEFAULT. Borrower fails to make any payment when due under this
Note.
OTHER
DEFAULTS. Borrower fails to comply with or to perform any other
term,
obligation, covenant or condition contained in this Note or in
any
of the
related documents or to comply with or to perform any term,
obligation, covenant or condition contained in any other agreement
between
Lender and
Borrower.
DEFAULT IN
FAVOR OF THIRD PARTIES. Borrower or any Grantor defaults under
any loan,
extension of credit, security agreement, purchase or sales
agreement,
or any other agreement, in favor of any other creditor or
person
that may materially affect any of Borrower's property or
Borrower's
ability to
repay this Note or perform Borrower's obligations under this
Note or
any of the related documents.
FALSE
STATEMENTS. Any warranty, representation or statement made or
furnished
to Lender by Borrower or on Borrower's behalf under this Note
or
the
related documents is false or misleading in any material
respect,
either now
or at the time made or furnished or becomes false or misleading
at any
time thereafter.
INSOLVENCY. The dissolution or termination of Borrower's existence
as a
going
business, the insolvency of Borrower, the appointment of a
receiver
for any
part of Borrower's property, any assignment for the benefit of
creditors,
any type of creditor workout, or the commencement of any
proceeding
under any bankruptcy or insolvency laws by or against Borrower.
CREDITOR
OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture
proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Borrower or by
any
governmental agency against any collateral securing the loan.
This
includes a
garnishment of any of Borrower's accounts, including deposit
accounts,
with Lender. However, this Event of Default shall not apply if
there is a
good faith dispute by Borrower as to the validity or
reasonableness of the claim which is the basis of the creditor
or
forfeiture
proceeding and if Borrower gives Lender written notice of the
creditor
or forfeiture proceeding and deposits with Lender monies or a
surety
bond for the creditor or forfeiture proceeding, in an amount
determined
by Lender, in its sole discretion, as being an adequate reserve
or bond
for the dispute.
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PROMISSORY NOTE
(Continued)
Page 2
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EVENTS AFFECTING
GUARANTOR. Any of the preceding events occurs with
respect to
any guarantor, endorser, surety, or accommodation party of any
of the
indebtedness or any guarantor, endorser, surety, or
accommodation
party dies
or becomes incompetent, or revokes or disputes the validity of,
or
liability under, any guaranty of the indebtedness evidenced by
this
Note.
CHANGE IN
OWNERSHIP. Any change in ownership of twenty-five percent (25%)
or more of
the common stock of Borrower.
ADVERSE
CHANGE. A material adverse change occurs in Borrower's
financial
condition,
or Lender believes the prospect of payment or performance of
this Note
is impaired.
INSECURITY. Lender in good faith believes itself insecure.
LENDER'S RIGHTS. Upon default, Lender may
declare the entire unpaid principal
balance on this Note and all accrued unpaid
interest immediately due, and then
Borrower will pay that amount.
ATTORNEYS' FEES; EXPENSES. Lender may hire
or pay someone else to help collect
this Note if Borrower does not pay.
Borrower will pay Lender that amount. This
includes, subject to any limits under
applicable law, Lender's costs of
collection, including court costs and
fifteen percent (15%) of the principal
plus accrued interest as attorneys' fees,
if any sums owing under this Note are
collected by or through an attorney at law,
whether or not there is a lawsuit,
and legal expenses for bankruptcy
proceedings (including efforts to modify or
vacate any automatic stay or injunction),
and appeals. If not prohibited by
applicable law, Borrower also will pay any
court costs, in addition to all other
sums provided by law.
GOVERNING LAW. This Note will be governed
by, construed and enforced in
accordance with federal law and the laws of
the State of Georgia. This Note has
been accepted by Lender in the State of
Georgia.
CHOICE OF VENUE. If there is a lawsuit,
Borrower agrees upon Lender's request to
submit to the jurisdiction of the courts of
any County, State of Georgia.
RIGHT OF SETOFF. To the extent permitted by
applicable law, Lender reserves a
right of setoff in all Borrower's accounts
with Lender (whether checking,
savings, or some other account). This
includes all accounts Borrower holds
jointly with someone else and all accounts
Borrower may open in the future.
However, this does not include any IRA or
Keogh accounts, or any trust accounts
for which setoff would be prohibited by
law. Borrower authorizes Lende
