Exhibit 10.10 (h)
CREDIT AGREEMENT
Between
American Woodmark Corporation
and
▇▇▇▇▇ Fargo Bank, National Association
Dated: March 23, 1999
$2,500,000 Term Loan
TABLE 0F CONTENTS
This Table of Contents is not part of the Agreement to which
it is attached but is for convenience of reference.
ARTICLE I DEFINITIONS 1
Section 1.1 Definitions. 1
ARTICLE II THE LOAN 5
Section 2.1 Loan 5
Section 2.2 Repayment of Note 5
Section 2.3 Interest 5
Section 2.4 Prepayment 6
Section 2.5 Use of Proceeds 6
Section 2.6 Computations 7
Section 2.7 Payments 7
ARTICLE III CHANGE IN CIRCUMSTANCES 7
Section 3.1 Increased Cost and Reduced Return 7
Section 3.2 Limitation on Eurodollar Rates 8
Section 3.3 Illegality 8
Section 3.4 Compensation 9
Section 3.5 Taxes 9
ARTICLE IV CONDITIONS 10
Section 4.1 Conditions Precedent 10
ARTICLE V REPRESENTATIONS AND WARRANTIES 10
Section 5.1 Existence 10
Section 5.2 Financial Statements 10
Section 5.3 Authorization; No Breach 11
Section 5.4 Litigation 11
Section 5.5 Enforceability 11
Section 5.6 Approvals 11
Section 5.7 Disclosure 11
Section 5.8 Year 2000 11
ARTICLE VI COVENANTS 12
Section 6.1 Information 12
Section 6.2 Obligations 13
Section 6.3 Financial 13
Section 6.4 Liens 13
Section 6.5 Investments 14
Section 6.6 Dividends 15
Section 6.7 Consolidation and Merger 15
ARTICLE VII DEFAULT 15
Section 7.1 Events of Default 15
i
Section 7.2 Remedies 17
ARTICLE VIII MISCELLANEOUS 17
Section 8.1 Expenses 17
Section 8.2 Indemnification 17
Section 8.3 Right of Set-off 18
Section 8.4 No Waiver, Cumulative Remedies 18
Section 8.5 Successors and Assigns 18
Section 8.6 Amendment 18
Section 8.7 Notices 19
Section 8.8 Counterparts 19
Section 8.9 Severability 19
Section 8.10 Controlling Agreement 19
Section 8.11 Survival 19
Section 8.12 Governing Law 19
Section 8.13 Consent to Jurisdiction 20
Section 8.14 WAIVER OF JURY TRIAL 20
Section 8.15 Entire Agreement 20
ii
CREDIT AGREEMENT
This Agreement is entered into as of the 23rd day
of March, 1999 by and between American Woodmark Corporation,
a Virginia corporation (the "Borrower"), and ▇▇▇▇▇ Fargo
Bank, National Association, a national banking association
(the "Bank").
The parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement,
the following terms have the following meanings:
"Applicable Margin" means an amount determined
pursuant to Section 2.3(c) that is added to other
amounts to determine the interest rates applicable
hereunder.
"Adjusted Eurodollar Rate" means, for any Interest
Period, the rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%)
equal to the sum of (i) the quotient obtained
by dividing (A) the Eurodollar Rate for such
Interest Period for an amount approximately
equivalent to the then-outstanding principal
balance of the Note, by (B) 1 minus the
Reserve Requirement for such principal
balance for such Interest Period, and (ii)
the Applicable Margin.
"Base Rate" means the rate of interest publicly
announced from time to time by the Bank as its "prime"
or "base" rate or, if the Bank ceases to announce a rate
so designated, any similar successor rate designated by
the Bank.
"Business Day" means any day except a Saturday,
Sunday, or other day on which banks in Minnesota or
California are authorized by law to close.
"Change of Control" means, with respect to any
corporation, either (i) the acquisition by any "person"
or "group" (as those terms are used in Sections 13(d)
and 14(d) of the Exchange Act) other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
of beneficial ownership (as defined in Rules 13d-3 and
13d-5 of the Securities and Exchange Commission, except
that a Person shall be deemed to have beneficial
ownership of all securities that such Person has the
right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly
or indirectly, of 50% or more of the then-outstanding
voting capital stock of such corporation; (ii) a change
in the composition of the board of directors of such
corporation or any corporate parent of such corporation
such that continuing directors cease to constitute more
than 50% of such board of directors; or (iii) the
cessation of public trading of the stock of such
corporation. As used in this definition, "continuing
directors" means, as of any date, (i) those members of
the board of directors of the applicable corporation who
assumed office prior to such date, and (ii) those
members of the board of directors of the applicable
corporation who assumed office after such date and whose
appointment or nomination for election by that
corporation's shareholders was approved by a vote of at
least 50% of the directors of such corporation in office
immediately prior to such appointment or nomination.
"Compliance Certificate" means a certificate in the
form of Exhibit B hereto or in such other form as the
Bank and the Borrower may agree, executed by the chief
financial officer of the Borrower, stating (i) that any
financial statements delivered therewith have been
prepared in accordance with generally accepted
accounting principles applied on a basis consistent with
the accounting practices reflected in the Financial
Statements, subject (if applicable) to year-end
adjustments, (ii) whether or not such officer has
knowledge of the occurrence of any Default hereunder not
theretofore reported and remedied and, if so, stating in
reasonable detail the facts with respect thereto and
(iii) all relevant facts in reasonable detail to
evidence, and the computations as to, whether or not the
Borrower is in compliance with the covenants set forth
in Section 6.3.
"Consolidated Funded Debt" means all indebtedness
for borrowed money, all indebtedness which has been
incurred in connection with the acquisition of assets,
and all capital lease obligations, all determined with
respect to the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"Consolidated Leverage Ratio" means, as of any
date, the ratio of Consolidated Funded Debt on that date
to EBITDA as of that date, all determined with respect
to the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP.
"Consolidated Total Capitalization" means the sum
of Consolidated Funded Debt plus total stockholders'
equity for the Borrower and its Subsidiaries in
accordance with GAAP.
"Debtor Relief Laws" means the Bankruptcy Code of
the United States of America and all other applicable
liquidation, conservatorship, bankruptcy, moratorium,
rearrangement, receivership, insolvency, reorganization,
suspension of payments, or similar debtor relief laws
from time to time in effect affecting the rights of
creditors generally.
"Default" means an Event of Default or the
occurrence of an event or condition that with notice or
lapse of time or both would become an Event of Default.
"Dollars" and "$" mean lawful money of the United
States of America.
"EBITDA" means, as of any date, pre-tax net income
during the one-year period ending on that date, excluding
extraordinary and non-cash items, together with all interest
expense, depreciation and amortization recognized with
respect to that period and deducted in determining net
income, all determined with respect to the Borrower and its
Subsidiaries on a consolidated basis in accordance with
generally accepted accounting principles consistently
applied.
"Eurodollar Business Day" means a Business Day on
which commercial banks in London are open for
international business (including dealings in Dollar
deposits in the London interbank market).
"Eurodollar Rate" means, for any Interest period,
the rate (rounded up to the nearest 1/8 of 1%)
determined by the Bank to be the average rate at which
U.S. dollar deposits are offered to the Bank by major
banks in the London interbank market for funds to be
made available on the first day of any Interest Period
in an amount approximately equal to the then-outstanding
principal balance of the Note and maturing on or about
the end of such Interest Period. The applicable
Eurodollar Rate for each Interest Period shall be
determined by the Bank between the opening of business
and 12:00 noon (Minneapolis time) on the second
Eurodollar Business Day prior to the beginning of such
Interest Period. Each such determination of the
applicable Eurodollar Rate shall be conclusive and
binding upon the parties hereto, in the absence of
demonstrable error.
"Event of Default" has the meaning specified in
Section 7.1.
"Federal Funds Rate" means, for any day the rate
per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve
Bank of New York on the Business Day next succeeding
such day; provided that (a) if such day is not a
Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding
Business Day, and (b) if no such rate is so published on
such next succeeding Business Day, the Federal Funds
Rate for such day shall be the average rate charged to
the Bank on such day on such transactions as determined
by the Bank.
"Financial Statements" means the financial
statements of the Borrower and the Subsidiaries most
recently furnished to the Bank prior to the date of this
Agreement.
"Floating Rate" means, for any day, the rate per
annum equal to the higher of (a) the Federal Funds Rate
for such day plus one percent (1.00%), and (b) the Base
Rate for such day. Any change in the Floating Rate due
to a change in the Base Rate or the Federal Funds Rate
shall be effective on the effective date of such change
in the Base Rate or Federal Funds Rate.
"GAAP" means generally accepted accounting
principles applied on a basis consistent with the
accounting practices reflected in the Financial
Statements.
"Governmental Authority" means any nation or
government, any state or political subdivision thereof,
any central bank (or similar monetary or regulatory
authority), and any entity exercising executive,
legislative, judicial, regulatory, or administrative
functions of or pertaining to government.
"Interest Period" means (i) the Period commencing
on the date on which the Loan is made and ending on the
first Quarterly Date after the date hereof; and (ii)
each subsequent period commencing on a Quarterly Date
and ending on the next succeeding Quarterly Date.
"Loan" means the advance to be made by the Bank to
the Borrower pursuant to Section 2.1.
"Loan Documents" means this Agreement, the Note,
and all other documents, instruments, and
agreements executed or delivered pursuant to
or in connection with this Agreement, as the
same may be amended, modified, renewed,
extended, or supplemented.
"Loan Party" means the Borrower or any Person that
guaranties or secures any or all of the Borrower's
obligations under the Loan Documents.
"Material Adverse Effect" means a material adverse
effect on (a) the properties, prospects,
business, operations, financial condition,
liabilities, or capitalization of the
Borrower and the Subsidiaries taken as a
whole, (b) the ability of any Loan Party to
pay and perform its obligations under any
Loan Document, or (c) the validity or
enforceability of any Loan Document or the
rights and remedies of the Bank thereunder.
"Note" means the Borrower's promissory note in the
form of Exhibit A hereto, together with all amendments,
modifications and restatements thereof and any note or
notes issued in substitution therefor or replacement
thereof.
"Person" means any individual, corporation,
company, joint venture, association, partnership, trust,
unincorporated organization, Governmental Authority, or
other entity.
"Quarterly Date" means the last day of each
March, June, September, and December of each year, the
first of which shall be the first such day after the
date of this Agreement; provided, however, that if such
day falls on a day that is not a Eurodollar Business
Day, then the applicable Quarterly Date shall be the
Eurodollar Business Day immediately preceding such day.
"Regulation D" means Regulation D of the Board of
Governors of the Federal Reserve System, as in effect
from time to time.
"Reserve Requirement" means, at any time, the
maximum rate at which reserves (including any marginal,
special, supplemental; or emergency reserves) are
required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of
the Federal Reserve System in New York City with deposits
exceeding one billion 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 with respect to
(i) any category of liabilities which includes
deposits by reference to which the Adjusted
Eurodollar Rate is to be determined, or (ii)
any category of extensions of credit or other
assets which include loans bearing interest
at a rate based on the Eurodollar Rate. The
Adjusted Eurodollar Rate shall be adjusted
automatically on and as of the effective date
of any change in the Reserve Requirement.
"Subsidiary" means, any corporation or other entity
of which securities or other ownership interests having
ordinary voting power to elect a majority of the board
of directors or other Persons performing similar
functions are at the time directly or indirectly owned
or controlled by the Borrower.
ARTICLE II
THE LOAN
Section 2.1 Loan. On or about the date hereof, the
Bank shall make a single advance to the Borrower in the
principal amount of $2,500,000. The proceeds of such advance
shall be used by the Borrower (i) first, to repay the
Borrower's promissory notes dated December 28, 1992 and April
29, 1997, payable to the order of Norwest Bank Minnesota,
National Association ("Norwest") in the original principal
amounts of $1,292,629.74 and $350,000, respectively (the
"Norwest Notes"), and (ii) second, for the Borrower's general
corporate purposes. The Bank will make such advance by
remitting to Norwest an amount equal to the principal balance
of and interest on the Norwest Notes, and by depositing the
remainder of such advance in an account of the Borrower
(designated by the Borrower) maintained with Norwest or the
Bank, or as otherwise directed by the Borrower. The
Borrower's obligation to repay such advance shall be
evidenced by the Note. The Note shall bear interest on the
unpaid principal amount thereof from the date of such advance
until paid as set forth in Section 2.3.
Section 2.2 Repayment of Note. The principal
balance of the Note shall be due and payable in 20 equal
quarterly installments of $125,000 each, due and payable on
the last day of each March, June, September and December,
commencing June 30, 1999.
Section 2.3 Interest.
(a) Generally. Except as set forth in Sections 3.2
and 3.3, the Note shall bear interest from
and including the date on which the Loan is
made to but excluding the date the Note is
paid in full, at a rate that shall at all
times be equal to the Adjusted Eurodollar
Rate.
(b) Default Rate. From and after the occurrence of
any Default and continuing thereafter until such Default
has been remedied to the written satisfaction of the
Bank, the outstanding principal balance of the Note
shall bear interest, until paid in full, at an annual
rate equal to the sum of (i) the interest rate otherwise
in effect with respect thereto, and (ii) 200 basis
points (2.00%) (the "Default Rate"). Calculation of
interest at the Default Rate shall not be deemed a
waiver or excuse of any such Default.
(c) Applicable Margin. The Applicable Margin
through and including the first adjustment occurring as
specified below shall be eight tenths of one percent
(0.80%). The Applicable Margin shall be adjusted each
fiscal quarter of the Borrower on the basis of the
Consolidated Leverage Ratio of the Borrower as at the
end of the previous fiscal quarter, in accordance with
the following table:
Consolidated Leverage Ratio Applicable Margins
--------------------------- ------------------
2.00 to 1 or more 1.20%
1.00 to 1 or more, but less than 2.00 to 1 1.00%
Less than 1.00 to 1 0.80%
Reductions and increases in the Applicable Margin will
be made quarterly within five calendar days following
receipt of the Borrower's financial statements and
Compliance Certificates required under Section 6.1.
Notwithstanding the foregoing, (i) if the Borrower fails
to deliver any financial statements or Compliance
Certificates when required under Section 6.l, the Bank
may, by notice to the Borrower, increase the Applicable
Margin to the highest rate set forth above until such
time as the Bank has received all such financial
statements and Compliance Certificates, and (ii) no
reduction in the Applicable Margins will be made if a
Default or an Event of Default has occurred and is
continuing at the time that such reduction would
otherwise be made.
(d) Payment of Interest. Accrued interest on the
Note shall be due and payable on each Quarterly Date;
provided that interest payable at the Default Rate shall
be payable from time to time on demand.
Section 2.4 Prepayment. The Borrower may prepay the
Note in full (but not in part) on any Quarterly Date without
premium or penalty, provided that (i) such prepayment shall
be made only upon three Business Days' notice to the Bank,
and (ii) such prepayment shall be accompanied by all accrued
interest thereon.
Section 2.5 Use of Proceeds. The proceeds of the
Loan shall be used by the Borrower for working capital in the
ordinary course of business. The Borrower will not, directly
or indirectly, use any part of such proceeds for the purpose
of purchasing or carrying any margin stock within the meaning
of Regulations G, U, T, or X of the Board of Governors of the
Federal Reserve System.
Section 2.6 Computations. Interest and fees payable
by the Borrower hereunder and under the other Loan Documents
shall be computed on the basis of a year of 360 days and the
actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which
payable.
Section 2.7 Payments. All payments of principal,
interest, and other amounts to be made by the Borrower under
this Agreement and other Loan Documents shall be made to the
Bank at such office as the Bank may designate in Dollars and
in immediately available funds, without setoff, deduction, or
counterclaim. Whenever any payment under this Agreement or
any other Loan Document shall be stated to be due on a day
that is not a Business Day, such payment may be made on the
next succeeding Business Day, and such extension of time in
such case shall be included in the computation of interest
and fees, as applicable and as the case may be. The Borrower
agrees that the amount shown on the books and records of the
Bank as being the principal balance of and interest on the
Note shall be conclusive absent demonstrable error.
ARTICLE III
CHANGE IN CIRCUMSTANCES
Section 3.1 Increased Cost and Reduced Return.
(a) If, after the date hereof, the adoption of
any applicable law, rule, or regulation, or any change
in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof
by any Governmental Authority charged with the
interpretation or administration thereof, or compliance
by the Bank with any request or directive (whether or
not having the force of law) of any such Governmental
Authority:
(i) shall subject the Bank to any tax,
duty, or other charge with respect to the Note, or
change the basis of taxation of any amounts payable
to the Bank under this Agreement or the Note (other
than taxes imposed on the overall net income of the
Bank);
(ii) shall impose or modify, any reserve,
special deposit, or similar requirement (other than
the Reserve Requirement utilized in the
determination of the Adjusted Eurodollar Rate)
relating to any extensions of credit or other
assets of, or any deposits with or other
liabilities or commitments of, the Bank; or
(iii) shall impose on the Bank or on the
United States market for certificates of deposit or
the London interbank market any other condition
affecting this Agreement or the Note or any of such
extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to
increase the cost to the Bank of making or maintaining the
Note or to reduce, any sum received or receivable by the
Bank under this Agreement or the Note, then the Borrower
shall pay to the Bank on demand such amount or amounts as
will compensate the Bank for such increased cost or
reduction.
(b) If the Bank shall have determined that
the adoption of any applicable law, rule, or regulation
regarding capital adequacy or any change therein or in the
interpretation or administration thereof by any Governmental
Authority charged with the interpretation or administration
thereof, or any request or directive regarding capital
adequacy (whether or not having the force of law) of any
such Governmental Authority, has or would have the effect of
reducing the rate of return on the capital of the Bank or
any corporation controlling the Bank as a consequence of the
Bank's obligations hereunder to a level below that which the
Bank or such corporation could have achieved but for such
adoption, change, request, or directive (taking into
consideration its policies with respect to capital adequacy)
by an amount deemed by the Bank to be material, then from
time to time upon demand the Borrower shall pay to the Bank
such additional amount or amounts as will compensate the
Bank for such reduction.
(c) A certificate of the Bank claiming
compensation under this Section and setting forth the
additional amount or amounts to be paid to it hereunder
shall be conclusive in the absence of clearly
demonstrable error. In determining such amount, the Bank
may use any reasonable averaging and attribution
methods.
Section 3.2 Limitation on Eurodollar Rates. If at
any time:
(a) the Bank determines (which determination shall
be conclusive) that be reason of circumstances affecting
the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate; or
(b) the Bank determines (which determination shall
be conclusive) that the Adjusted Eurodollar Rate will
not adequately and fairly reflect the cost to the Bank
of funding or maintaining the Note;
then the Bank may, at its option, give the Borrower prompt
notice thereof, and, at the option of the Bank, so long as
such condition remains in effect, the Note shall bear
interest at the Floating Rate.
Section 3.3 Illegality. Notwithstanding any other
provision of this Agreement, in the event that it becomes
unlawful of the Bank to make, maintain, or fund the Note
while collecting interest thereon based on the Adjusted
Eurodollar Rate, then the Bank may, at its option, give the
Borrower prompt notice thereof, and, at the option of the
Bank, so long as such condition remains in effect, the Note
shall bear interest at the Floating Rate.
Section 3.4 Compensation. Upon the request of the
Bank, the Borrower shall pay to the Bank such amount or
amounts as shall be sufficient (in the reasonable opinion of
the Bank) to compensate it for any loss, cost, or expense
incurred by it as a result of:
(a) any conversion of the interest rate applicable
on the Note to the Floating Rate for any reason
(including, without limitation, a conversion required by
the Bank pursuant to Section 7.2) on a date other than
the last day of an Interest Period; or
(b) any failure by the Borrower for any reason
(including, without limitation, the failure of any
conditions precedent specified in Article IV to be
satisfied) to borrow or maintain the Note as
contemplated hereunder.
Without limiting the effect of the preceding sentence, such
compensation shall include any loss, cost, or expense
incurred in obtaining, liquidating, or employing deposits
from third parties (including loss of margin).
Section 3.5 Taxes.
(a) Any and all payments by the Borrower to or for
the account of the Bank hereunder or under any other
Loan Document shall be made free and clear of and
without deduction for any and all present or future
taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto,
excluding, in the case of the Bank, taxes imposed on its
income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which the Bank is
organized or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions,
charges, withholdings, and liabilities being hereinafter
referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect
of any sum payable hereunder or under any Loan Documents
to the Bank, (i) the sum payable shall be increased as
necessary so that after making all required deductions
(including deductions applicable to additional sums
payable under this Section 3.5) the Bank receives an
amount equal to the sum it would have received had no
such deductions been made, (ii) the Borrower shall make
such deductions, (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or
other authority in accordance with applicable law, and
(iv) the Borrower shall furnish to the Bank, at its
address referred to in Section 8.7, the original or a
certified copy of a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any
and all present or future stamp or documentary taxes and
any other excise or property taxes or charges or similar
levies which arise from any payment made hereunder or
under any other Loan Document or from, the execution or
delivery of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter
referred to as "Other Taxes").
ARTICLE IV
CONDITIONS
Section 4.1 Conditions Precedent. The obligation
of the Bank to make the Loan is subject to the satisfaction
of the following conditions:
(a) Receipt by the Bank of the duly executed Note
and such other Loan Documents as the Bank may reasonably
request.
(b) Receipt by the Bank of all documents that the
Bank may request relating to the existence of the Loan
Parties, the authorization for and the validity of the
Loan Documents, and any other matters relevant thereto,
all in form and substance satisfactory to the Bank.
(c) Receipt by the Bank of current searches of
appropriate filing offices showing that (i) no state or
federal tax liens have been filed and remain in effect
against the Borrower or any Subsidiary, and (ii) no
financing statements have been filed and remain in
effect, against the Borrower or any Subsidiary except
financing statements perfecting only liens permitted
under Section 6.4.
(d) The fact that, immediately before and after
the Loan, no Default shall have occurred and be
continuing.
(e) The fact that the representations and
warranties of the Borrower contained in this
Agreement and the other Loan Documents shall
be true and correct on and as of the date of
the Loan.
(f) Payment by the Borrower to the Bank of an
upfront fee in the amount of $10,000.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Agreement,
the Borrower represents and warrants to the Bank that:
Section 5.1 Existence. The Borrower and each
Subsidiary (a) is duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its
organization; and (b) has the requisite power and authority
with legal right to own its assets and carry on its business
as now being or as proposed to be conducted. The Borrower has
the power, authority, and legal right to execute, deliver,
and perform its obligations under the Loan Documents.
Section 5.2 Financial Statements. The Financial
Statements are complete and correct, have been prepared in
accordance with generally accepted accounting principles, and
fairly and accurately present the financial condition of the
Borrower and the Subsidiaries as of the respective dates
indicated therein and the results of operations for the
respective periods indicated therein. Since the effective
date of the Financial Statements, no event or condition has
occurred that could have a Materials Adverse Effect.
Section 5.3 Authorization; No Breach. The
execution, delivery, and performance by the Borrower of the
Loan Documents to which it is a party and compliance with the
terms and provisions thereof have been duly authorized by all
requisite action on the part of the Borrower and do not and
will not (a) violate or conflict with, or result in a breach
of, or require any consent under (i) the articles of
incorporation, bylaws, or other organizational documents of
the Borrower or any of the Subsidiaries, (ii) any applicable
law, rule, or regulation or any order, writ, injunction, or
decree of any Governmental Authority or arbitrator, or (iii)
any agreement or instrument to which the Borrower or any of
the Subsidiaries is a party or by which any of them or any of
their property is bound or subject, or (b) constitute a
default under any such agreement or instrument.
Section 5.4 Litigation. There is no action, suit,
investigation, or proceeding before or by any Governmental
Authority or arbitrator pending, or to the knowledge of the
Borrower, threatened against or affecting the Borrower or any
Subsidiary, that could, if adversely determined, have a
Material Adverse Effect.
Section 5.5 Enforceability. This Agreement
constitutes, and the other Loan Documents when executed and
delivered by the Borrower shall constitute, the legal, valid,
and binding obligations of the Borrower, enforceable against
the Borrower in accordance with their respective terms,
except as limited by applicable Debtor Relief Laws and
general principles of equity.
Section 5.6 Approval. No authorization, approval,
or consent of, and no filing or registration with, any
Governmental Authority or third party is or will be necessary
for the execution, delivery, or performance by the Borrower
of any of the Loan Documents to which it is a party or for
the validity or enforceability thereof.
Section 5.7 Disclosure. No statement, information,
report, representation, or warranty made by the Borrower in
any Loan Document or furnished to the Bank in connection with
any Loan Document contains any untrue statement of a material
fact or omits to state any material fact necessary to make
the statements herein or therein not misleading.
Section 5.8 Year 2000. The Borrower has (i)
initiated a review and assessment of all areas within its and
each of the Subsidiaries' business and operations (including
those affected by customers and vendors) that could be
adversely affected by the "Year 2000 Problem" (that is, the
risk that computer applications used by the Borrower or any
of the Subsidiaries (or their respective customers and
vendors) may be unable to recognize and perform properly date-
sensitive functions involving certain dates prior to and any
date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely
basis, and (iii) to date, implemented that plan in accordance
with that timetable. Based on the foregoing, the Borrower
believes that all computer applications (including those of
its and the Subsidiaries' customers and vendors) that are
material to its or any of the Subsidiaries' business and
operations are reasonably expected on a timely basis to be
able to perform properly date-sensitive functions for all
dates before and after January 1, 2000 (that is, be "Year
2000 compliant"), except to the extent that a failure to do
so could not reasonably be expected to have Material Adverse
Effect.
ARTICLE VI
COVENANTS
The Borrower agrees that, so 1ong as the Note
remains unpaid:
Section 6.1. Information. The Borrower shall
deliver to the Bank:
(a) As soon as available and in any event within
90 days after the end of each fiscal year of the
Borrower a consolidated balance sheet of the Borrower
and the Subsidiaries as of the end of such fiscal year
and the related consolidated statements of income and
cash flows for such fiscal year, setting forth in each
case in comparative form the figures for the previous
fiscal year, all prepared in accordance with generally
accepted accounting principles and certified with an
unqualified opinion by independent public accountants of
nationally recognized standing.
(b) As soon as available and in any event within
45 days after the end of each of the first three
quarters of each fiscal year of the Borrower a
consolidated balance sheet of the Borrower and the
Subsidiaries as of the end of such quarter and the
related consolidated statements of income and cash flows
for such quarter and for the portion of the Borrower's
fiscal year ended at the end of such quarter, setting
forth in each case in comparative form the figures for
the corresponding quarter and the corresponding portion
of the Borrower's previous fiscal year, all in
reasonable detail and duly certified (subject to normal
year-end adjustments) by the chief financial officer of
the Borrower as having been prepared in accordance with
generally accepted accounting principles.
(c) Concurrent with the delivery of any financial
statements under paragraph (a) or (b), a Compliance
Certificate, duly executed by the chief financial
officer of the Borrower.
(d) Within three (3) days after any officer of the
Borrower obtains knowledge of any Default, a certificate
of the chief financial officer of the Borrower setting
forth the details thereof and any action that the
Borrower is taking or proposes to take with respect
thereto.
(e) From time to time such additional information
regarding the financial condition or business of the
Borrower and the Subsidiaries as the Bank may reasonably
request.
Section 6.2 Obligations. The Borrower shall, and
shall cause each of the Subsidiaries to:
(a) Preserve and maintain all of its rights,
privileges, and franchises necessary or desirable in the
normal conduct of its business.
(b) Comply with the requirements of all applicable
laws, rules, regulations, and orders of Governmental
Authorities.
(c) Pay and discharge when due all taxes,
assessments, and governmental charges or
levies imposed on it or on its income or
profits or any of its property, except for
any such tax, assessment, charge, or levy the
payment of which is being contested in good
faith and by proper proceedings and against
which adequate reserves are being maintained.
(d) Maintain all of its properties owned or used
in its business in good working order and condition
ordinary wear and tear excepted.
(e) Permit representatives of the Bank, during
normal business hours, to examine, copy, and make
extracts from its books and records, to inspect its
properties, and to discuss its business and affairs with
its officers, directors, and accountants.
(f) Maintain insurance in such amounts, with such
deductibles, and against such risks as is customary for
similarly situated businesses.
Section 6.3 Financial. The Borrower shall:
(a) Maintain a ratio of Consolidated Funded
Debt to Consolidated Total Capitalization of no more than
.40.
(b) Maintain its Consolidated Leverage Ratio at
not more than 3.00 to 1.
Section 6.4 Liens. The Borrower will not, and will
not permit any Subsidiary to, create, incur, assume or suffer
to exist any mortgage, lease, deed of trust, pledge, lien,
security interest, or other charge or encumbrance of any
nature on any of its assets, whether now owned or hereafter
acquired, except:
(a) Liens on any property of the Borrower or
any Subsidiary (other than those described elsewhere in this
Section) securing any indebtedness for borrowed money in
existence on the date hereof and listed in Schedule 6.4
hereto.
(b) Liens, charges and encumbrances incurred in
the ordinary course of such party's business
as conducted in the last five years which
were not incurred in connection with the
borrowing of money and which do not in the
aggregate materially detract from the value
of its property or materially impair the use
thereof in its business.
(c) Liens granted in connection with the
acquisition of property by such party
provided that (i) such liens secure payment
of part of the purchase price of the property
subject to such liens, and (ii) no such lien
extends or shall extend to or cover any
property of the Borrower or such Subsidiary,
as the case may be, other than the property
then being acquired and fixed improvements
then or thereafter erected thereon.
(d) Liens imposed by law for taxes, assessments
or charges of any governmental authority for
claims not yet due or which are being
contested in good faith by appropriate
proceedings diligently conducted.
(e) Statutory liens of landlords and liens of
carriers, warehousemen, mechanics, materialmen and other
liens imposed by law or created in the ordinary course
of business and in existence less than ninety days from
the date of creation thereof for amounts not yet due or
which are being contested in good faith by appropriate
proceedings diligently conducted and with respect to
which adequate reserves or other appropriate provisions
are being maintained in accordance with GAAP.
(f) Liens incurred or deposits made in the
ordinary course of business in connection
with workers' compensation, unemployment
insurance and other types of social security
benefits.
(g) Easements, rights-of-way, covenants,
consents, reservations, encroachments, variances and zoning
and other charges or encumbrances which do not materially
interfere with the ordinary conduct of the business of the
Borrower or any Subsidiary and which do not materially
detract from the value of the property to which they attach
or materially impair the use thereof to the Borrower or any
Subsidiary.
(h) Liens (other than those described
elsewhere in this Section), securing indebtedness in an
amount not to exceed $5,000,000 in the aggregate.
Section 6.5 Investments. The Borrower will not,
and will not permit any Subsidiary to, purchase or hold
beneficially any stock or other securities or evidence of
indebtedness of, make or permit to exist any loans or
advances to, or make any investment or acquire any interest
whatsoever in, any other Person, except:
(a) Investments in direct obligations of the
United States of America or any agency or
instrumentality thereof whose obligations
constitute full faith and credit obligations
of the United States of America having a
maturity of one year or less, commercial
paper issued by U.S. corporations rated "A-1"
or "A-2" by Standard & Poors Corporation or
"P-I" or "P-2" by ▇▇▇▇▇'▇ Investors Service
or certificates of deposit or bankers'
acceptances having a maturity of one year or
less issued by members of the Federal Reserve
System having deposits in excess of
$100,000,000.
(b) Any existing investment by the Borrower
or any other Subsidiary in the stock of any Subsidiary.
(c) Advances in the form of progress payments,
prepaid rent or security deposits.
Section 6.6 Dividends. The Borrower will not,
during any fiscal year of the Borrower, pay any dividend
(other than dividends or distributions payable solely in
stock of the Borrower) on any shares of any class of stock of
the Borrower or make any payment on account of the purchase,
redemption or other retirement of any shares of such stock or
make any distribution in respect thereof, either directly or
indirectly, if, after giving effect to such payment or
distribution, the aggregate amount of such payments and
distributions made during such fiscal year would exceed the
consolidated net income (determined in accordance with GAAP)
of the Borrower and its Subsidiaries during the fiscal year
immediately preceding the year in which such payment or
distribution is made.
Section 6.7 Consolidation and Merger. The Borrower
will not, and will not permit any Subsidiary to, consolidate
with or merge into any Person, or permit any other Person to
merge into it, or acquire (in a transaction analogous in
purpose or effect to a consolidation or merger) all or
substantially all of the assets any other Person; provided,
however, that the restrictions contained in this Section
shall not apply to or prevent the consolidation or merger of
any Person with, or a conveyance or transfer of any Person's
assets to, the Borrower so long as (i) the Borrower shall be
the continuing or surviving entity, and (ii) no Default has
occurred and is continuing or would result from such
consolidation, merger or acquisition.
ARTICLE VII
DEFAULT
Section 7.1 Events of Default. Each of the
following shall constitute an "Event of Default":
(a) The Borrower shall fail to pay when due any
principal of or interest on the Loan, or any
Loan Party shall fail to pay when due any
other amount payable under any Loan Document.
(b) Any representation, warranty, certification,
or statement made or deemed made by any Loan
Party (or any of its officers) in any Loan
Document or in any certificate, financial
statement, or other document delivered
pursuant thereto shall be false, misleading,
or incorrect in any material respect when
made or deemed made.
(c) The Borrower shall fail to perform, observe,
or comply with any covenant, agreement, or
term contained in Section 6.1 or 6.3 of this
Agreement.
(d) Any Loan Party shall fail to perform,
observe, or comply with any other covenant,
agreement, or term contained in any Loan
Document (other than a failure covered
elsewhere in this Section 7.1) and such
failure shall continue for a period of thirty
(30) days after notice thereof to such Loan
Party by the Bank.
(e) Any Loan Party or any Subsidiary shall admit
in writing its inability to, or be generally unable to,
pay its debts as such debts become due.
(f) Any voluntary proceeding under any Debtor
Relief Law shall be commenced by any Loan
Party or any Subsidiary; or any involuntary
proceeding under any Debtor Relief Law shall
be commenced by or against any Loan Party or
any Subsidiary or any of their respective
assets, and such proceeding shall not be
dismissed within thirty (30) days after the
commencement thereof; or an order for relief
shall be entered against any Loan Party or
any Subsidiary in any case under the United
States Bankruptcy Code.
(g) Any Loan Party or any Subsidiary shall
fail to pay when due any principal of or interest on any
indebtedness for borrowed money (other than the Note) having
an outstanding principal amount greater than $100,000,
whether as principal obligor, guarantor, or otherwise, or
the maturity of any such indebtedness shall have been
accelerated, or any event shall have occurred that permits
(or, with the giving of notice or lapse of time or both,
would permit) any holder or holders of such indebtedness or
any Person acting on behalf of such holder or holders to
accelerate the maturity thereof.
(h) Any judgment or order for the payment of money
in excess of $100,000 shall be rendered against any Loan
Party or any Subsidiary where either (i) enforcement
proceedings shall have been commenced by any creditor upon
such judgment or order or (ii) there shall be any period of
10 consecutive days during which a stay of enforcement of
such judgment or order, by reason of pending appeal or
otherwise, shall not be in effect.
(i) Any Loan Party shall dissolve, liquidate,
or terminate its legal existence or shall convey, transfer,
lease, or dispose of (whether in one transaction or a series
of transactions) all or substantially all of its assets to
any Person.
(j) Any event or condition shall occur that could
reasonably be expected to have a Material Adverse Effect.
(k) A Change of Control shall occur with respect to the
Borrower.
Section 7.2 Remedies. If any Event of Default shall
occur and be continuing, the Bank may do any one or more of
the following:
(a) Acceleration. Declare all outstanding
principal of and accrued and unpaid interest on the Note
and all other amounts payable by the Borrower under the
Loan documents immediately due and payable, and the same
shall thereupon become immediately due and payable,
without presentment, demand, protest, notice of
acceleration, notice of intent to accelerate, or other
notices or formalities of any kind, all of which are
hereby expressly waived by the Borrower.
(b) Interest Rate Adjustment. By notice to
the Borrower, declare that the Note shall bear interest at
the Floating Rate, in which case the Note shall thereafter
bear interest at the Floating Rate (or the Default Rate
based on such Floating Rate) from and after the date
specified in such notice.
(c) Rights. Exercise any and all rights and
remedies afforded by applicable law or otherwise.
Notwithstanding the foregoing, upon the occurrence of an
Event of Default under Section 7.1(f), the outstanding
principal of and accrued and unpaid interest on the Notes and
all other amounts, payable by .the Borrower under the Loan
Documents shall thereupon become immediately due and payable
without presentment, demand, protest, notice of acceleration,
notice of intent to accelerate, or other notices of
formalities of any kind, all of which are hereby expressly
waived by the Borrower.
ARTICLE VIII
MISCELLANEOUS
Section 8.1 Expenses. The Borrower shall on demand
pay or reimburse the Bank for paying (a) all reasonable costs
and expenses of the Bank, including the fees and
disbursements of counsel for the Bank (including the
allocated cost of internal counsel), in connection with the
negotiation, preparation, execution and administration of the
Load Documents, the preparation of any waiver or consent
thereunder or any amendment thereof or any Default or alleged
Default, and (b) if an Event of Default occurs, all costs and
expenses incurred by the Bank, including the fees and
disbursements of counsel (including the allocated cost of
internal counsel), in connection with such Event of Default
and any collection, bankruptcy, insolvency, and other
enforcement proceedings resulting therefrom.
Section 8.2 Indemnification. The Borrower agrees
to indemnify the Bank and each affiliate thereof and their
respective officers, directors, employees, attorneys, and
agents (each an "Indemnified Person") from, and hold each of
them harmless against all losses, liabilities, claims,
damages, penalties, judgments, disbursements, costs, and
expenses, including all fees and disbursements of counsel
(including the allocated cost of internal counsel)
(collectively the "Indemnified Liabilities"), which directly
or indirectly arise from or relate to any Loan Document or
any of the transactions contemplated thereby, but excluding
any of the foregoing to the extent caused by the gross
negligence or willful misconduct of the Indemnified Person.
Without limiting any provision of any Load Document, it is
the express intention of the parties hereto that each
Indemnified Person shall be indemnified from and held
harmless against any and all Indemnified Liabilities arising
out of or resulting from the sole or contributory negligence
of the Indemnified Person.
Section 8.3 Right of Set-off. Upon the occurrence
and during the continuance of any Event of Default, the Bank
is hereby authorized at any time and from time to time, to
the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness
at any time owing by the Bank (or any of its affiliates) to
or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter
existing under the Loan Documents, irrespective of whether
the Bank shall have made any demand under the Loan Documents
and although such obligations may be unmatured. The Bank
agrees promptly to notify the Borrower after any such set-off
and application made by the Bank; provided, however, that the
failure to give such notice shall not affect the validity of
such set-off and application. The rights of the Bank under
this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that
the Bank may have.
Section 8.4 No Waiver, Cumulative Remedies. Not
failure on the part of the Bank to exercise and no delay in
exercising, and no course of dealing with respect to, any
right, power, or privilege under any Loan Document shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege under any Loan
Document preclude any other or further exercise thereof or
the exercise of any other right, power, or privilege. The
rights and remedies provided for in the Loan Documents are
cumulative and not exclusive of any rights and remedies
provided by law.
Section 8.5 Successors and Assigns. This Agreement
shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except
that the Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written
consent of the Bank. The Bank may at any time and from time
to time (a) grant participating interests in the Note and
this Agreement to any Persons, and (b) assign all or any
portion of its rights and/or obligations under the Loan
Documents to any Persons. All information provided by the
Borrower to the Bank may be furnished by the Bank to its
affiliates and to any actual or proposed assignee or
participant.
Section 8.6 Amendment. No amendment or waiver of
any provision of any Loan Document to which the Borrower is a
party, nor any consent to any departure by the Borrower
therefrom, shall be effective unless the same shall be agreed
or consented to in writing by the Bank and the Borrower, and
each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which
given.
Section 8.7 Notices. All notices, requests, and
other communications to either party hereunder shall be in
writing (including facsimile transmission) and shall be given
to such party at its address or facsimile number set forth on
the signature pages hereof. Each such notice, request, or
other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile
number referred to in this Section and confirmation of
receipt is received, (ii) if given by mail, three (3)
Business Days after such communication is deposited in the
mails with first class postage prepaid, addressed as
aforesaid, or (iii) if given by any other means, when
delivered at the address referred to in this Section;
provided that notices to the Bank shall not be effective
until received.
Section 8.8 Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall
constitute one and the same instrument.
Section 8.9 Severability. Any provision of this
Agreement held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the
remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 8.10 Controlling Agreeement.
Notwithstanding anything to the contrary contained in any
Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate
of non-usurious interest permitted by applicable law (the
"Maximum Rate"). If the Bank shall receive interest in an
amount that exceeds the Maximum Rate, the excessive
interest shall be applied to the principal of the Note or,
if it exceeds the unpaid principal, refunded to the
Borrower. In determining whether the interest contracted
for, charged, or received by the Bank exceeds the Maximum
Rate, the Bank may, to the extent permitted by applicable
law, (a) characterize any payment that is not principal as
an expense, fee, or premium rather than interest, (b)
exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the
contemplated term of the Note.
Section 8.11 Survival. All representations and
warranties made or deemed made by the Borrower in the Loan
Documents shall survive the execution and delivery thereof
and the making of the Loan, and no investigation by the Bank
or any closing shall affect the representations and
warranties by the Borrower or the right of the Bank to rely
upon them. Without prejudice to the survival of any other
obligation of the Borrower hereunder, the obligations of the
Borrower under Article III and Sections 8.1 and 8.2 shall
survive repayment of the Note.
Section 8.12 Governing Law. This Agreement and the
Note shall be governed by and construed in accordance with,
the laws of the State of Minnesota and the applicable laws of
the State of Minnesota and the applicable laws of the United
States of America.
Section 8.13 Consent to Jurisdiction. The Borrow
irrevocably (i) agrees that any suit, action or other legal
proceeding arising out of or relating to this Agreement or
any other Loan Document may be brought in a court of record
in Hennepin County in the State of Minnesota or in the Courts
of the United States located in such State, (ii) consents to
the jurisdiction of each such court in any suit, action or
proceeding, (iii) waives any objection which it may have to
the laying of venue of any such suit, action or proceeding in
any such courts and any claim that any such suit, action or
proceeding has been brought in an inconvenient forum, and
(iv) agrees that a final judgment in any such suit, action or
proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgement or in any other manner
provided by law.
Section 8.14 WAIVER OF JURY TRAIL. TO THE FULLEST
EXTEST PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT
OF OR RELATING TO ANY LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE BANK
IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
Section 8.15 Entire Agreement. This written
Agreement and the other Loan Documents represent the final
agreement between the parties and may not be contradicted by
evidence of prior, contemporaneous, or subsequent oral
agreements of the parties. There are no unwritten oral
agreements between the parties
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first above
written.
Notice Address: AMERICAN
WOODMARK
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
Telecopier: 540-665-9176
By ▇▇▇▇▇ ▇▇▇▇▇
Its Treasurer
Notice Address: ▇▇▇▇▇ FARGO BANK, NATIONAL
Norwest Center, Third Floor ASSOCIATION
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇
Telecopier: ▇▇▇-▇▇▇-▇▇▇▇
By ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Its Assistant
Vice President
M1:464170.05
Schedule 6.4
▇▇▇▇▇
Secured Party Covered Property Secured Amount
West Virginia Real Estate at our Hardy Original $4,656,701
Economic County Plant At 3/16/99 $5,026,237
Development As defined in Deed of Lease
Authority dated July 9, 1992 and subsequently
amended
West Virginia Specific Equipment as listed Original $500,000
Economic in loan At 3/16/99 $490,342
Development Between American Woodmark
Authority Corporation and West Virginia
Economic Development Authority dated
11/20/98
NationsBank Real Estate and Personal Original $4,000,000
Property as At 3/16/99 $ 925,000
Defined in the Industrial Revenue Bonds
Loan documents for the County
of Mohave Arizona and American Woodmark
Corporation dated 12/9/86
NationsBank Real Estate and Personal Original $8,000,000
Property as At 3/16/99 $4,000,000
Defined in the Industrial Revenue Bonds
Loan documents for ▇▇▇▇▇▇▇▇
County Georgia and American Woodmark
Corporation dated 12/17/87
Exhibit A
PROMISSORY NOTE
$2,500,000 March 23, 1999
For value received, American Woodmark Corporation,
a Virginia corporation, promises to pay to the order of ▇▇▇▇▇
Fargo Bank, National Association, a national banking
association (the "Bank"), at its main office in San
Francisco, California, or at such other place as the holder
hereof may hereafter from time to time designate in writing,
in lawful money of the United States of America and in
immediately available funds, the principal sum of Two Million
Five Hundred Thousand ($2,500,000), and to pay interest on
the principal balance of this Note outstanding from time to
time at the rate or rates determined pursuant to the Credit
Agreement of even date herewith between the Borrower and the
Bank (together with all amendments, modifications and
restatements thereof, the "Credit Agreement").
This Note is issued pursuant to, and is subject to,
the Credit Agreement, which provides (among other things) for
the amount and date of payments of principal and interest
required hereunder and for the acceleration of the maturity
hereof upon the occurrence of an Event of Default (as defined
therein).
The Borrower shall pay all costs of collection,
including reasonable attorneys' fees and legal expenses, if
this Note is not paid when due, whether or not legal
proceedings are commenced.
Presentment or other demand for payment, notice of
dishonor and protest are expressly waived.
AMERICAN WOODMARK
CORPORATION
By___________________
Its__________________
M1:464170.05
Exhibit B
COMPLIANCE CERTIFICATE
,
▇▇▇▇▇ Fargo Bank, National Association
c/o Norwest Bank Minnesota, National Association
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇.▇▇▇▇▇-▇▇▇▇
Compliance Certificate
Ladies and Gentlemen:
Reference is made to the Credit Agreement (the
"Credit Agreement") dated March 23, 1999, entered into
between ▇▇▇▇▇ Fargo Bank, National Association and American
Woodmark Corporation (the "Borrower").
All terms defined in the Credit Agreement and not
otherwise defined herein shall have the meanings given them
in the Credit Agreement.
This is a Compliance Certificate submitted in
connection with the Borrower's
financial statements (the "Statements") as of
, __________ (the "Effective Date").
I hereby certify to you as follows:
1. I am the chief financial office of the Borrower, and I
am familiar with the
financial statements and financial affairs of the
Borrower.
2. The Statements, and the computations below, have been
prepared in accordance with generally accepted accounting
principles applied on a basis that is consistent with the
accounting practices reflected in the annual financial
statements of the Borrower previously delivered to you.
3. The following computations set forth the Borrower's
compliance or non-compliance with the requirements set forth
in Sections 6.3 of the Credit Agreement as of the Effective
Date:
Section 6.3(b) Consolidate Funded Debt to Consolidated Total
Capitalization
Interest-bearing Funded Debt $
Capital lease obligations $
Consolidated Funded Debt $
Consolidated Shareholders Equity $
Consolidate Total Capitalization $
Consolidated Debt to Total Capitalization Ratio ____ to 1
Maximum Consolidated Debt to Total Capitalization Ratio 0.40 to 1
Section 6.3(b) Consolidated Leverage Ratio
Consolidated Pretax Income $
Interest Expense $
Depreciation $
Amortization $
Extraordinary items $
Non-cash items $
EBITDA $
Consolidated Leverage Ratio
Consolidated Funded Debt to EBITDA ____ to 1
Maximum Consolidated Leverage Ratio 3.00 to 1
Attached hereto are all relevant facts in
reasonable detail to evidence,
and the computations of, the
financial covenants referred to above.
4. I have no knowledge of the occurrence of any
Default under the Credit Agreement, except as
set forth in the attachments, if any, hereto.
Very truly yours,
AMERICAN WOODMARK
CORPORATION
By _________________________
Its _____________________
M1:464170.05