Filed by Bowne Pure Compliance





Exhibit 10.1




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

(Hereinafter referred to as “Borrower”)




Wachovia Bank, National Association

Summit, New Jersey 07901

(Hereinafter referred to as “Bank”)




THIS AGREEMENT is entered into as of September 18, 2008 by and between Bank and Borrower.



RECITALS




Bank is the holder of the following notes: (i) an Amended & Restated Promissory Note executed
and delivered by Borrower, dated as of May 31, 2008, in the original principal amount of
$30,000,000.00 (the “$30MM Note”); (ii) a Promissory Note executed and delivered by Borrower, dated
October 28, 2003, in the original principal amount of $22,500,000.00, as subsequently amended by
Promissory Note and Loan Modification Agreement, dated March 12, 2007, Promissory Note and Loan
Modification Agreement, dated January 24, 2008, and an Amendment to Loan Documents dated as of May
31, 2008 (the “$22.5MM Note”); and (iii) a Promissory Note executed and delivered by Borrower,
dated October 28, 2003, in the original principal amount of $7,500,000.00, as subsequently amended
by Promissory Note and Loan Modification Agreement, dated March 12, 2007, Promissory Note and Loan
Modification Agreement, dated January 24, 2008, and an Amendment to Loan Documents dated as of May
31, 2008 (the “$7.5MM Note”, and collectively with the $30MM Note and the $22.5MM Note, the
“Notes”), and certain other loan documents, including without limitation, an Amended and Restated
Loan Agreement, dated May 31, 2008 (the “Loan Agreement”), a Security Agreement, dated October 28,
2003 (the “Security Agreement”), and a Mortgage, Assignment of Rents and Security Agreement and
Financing Statement dated as of October 28, 2003 (the “Mortgage”); 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




ACKNOWLEDGMENT OF BALANCE. Borrower acknowledges that the most recent Commercial Loan Invoice
sent to Borrower with respect to the Obligations under each of the Notes is correct.




MODIFICATIONS.



1. Interest Rate. The Notes are hereby modified by deleting the definition of “Margin”, and
substituting the following in its place and stead:



The “Margin” means the applicable margin based upon the following Debt Service Coverage Ratio
as defined in the Loan Agreement, as follows:



	 	 	 	 	 
	DEBT SERVICE COVERAGE RATIO — TRAILING 12 MONTHS
	GREATER	 	LESS THAN	 	 
	THAN	 	OR EQUAL TO	 	MARGIN
	1.75
	 	 	 	0.65%
	1.50
	 	1.75
	 	0.85%
	1.35
	 	1.50
	 	1.10%
	1.25
	 	1.35
	 	1.35%






2. Financial Covenants. Notwithstanding anything in the section entitled FINANCIAL COVENANTS
of the Loan Agreement to the contrary, for purposes of calculating the Debt Service Coverage Ratio,
Leverage Ratio, Current Ratio and Limitation on Debt covenants:



(a) Borrower and Bank agree that for fiscal quarters ending September 30, 2008, January 3,
2009, April 4, 2009, and July 4, 2009, the Bank shall calculate the Borrower’s income
notwithstanding the provisions of FAS 144 “Accounting for the Impairment or Disposal of Long-Lived
Assets.” in an amount not to exceed Two Million and 00/100 Dollars ($2,000,000.00).



(b) Borrower and Bank agree that for fiscal quarters ending September 30, 2008, January 3,
2009, April 4, 2009, July 4, 2009 and October 3, 2009, the Bank shall calculate the Borrower’s
income notwithstanding the provisions of FAS 146 “Accounting for Costs Associated With Exit or
Disposal Activities.” in an amount not to exceed Seven Million and 00/100 Dollars ($7,000,000.00).



3. ISDA Master Agreement. Pursuant to subpart (ii) of the definition of Financial Agreement
as set forth in the ISDA Master Agreement dated as of October 18, 2006 (including the Schedule and
all confirmations relating to any transaction thereunder), among Bank and Borrower, as amended by
an ISDA Amendment dated as of January 29, 2008, and an Amendment to Loan Documents dated as of May
31, 2008, Bank hereby consents to amend the definition of Financial Agreement to include and refer
to this Agreement.



ACKNOWLEDGMENTS AND REPRESENTATIONS. Borrower acknowledges and represents that the Notes and
other Loan Documents, as amended hereby, are in full force and effect without any defense,
counterclaim, right or claim of set-off; that, after giving effect to this Agreement, no default or
event that with the passage of time or giving of notice would constitute a default under the Loan
Documents has occurred, all representations and warranties contained in the Loan Documents are true
and correct as of this date (except to the extent that such representations or warranties relate to
an earlier date or have been updated by Borrower with Bank in the ordinary course), all necessary
action to authorize the execution and delivery of this Agreement has been taken; and this Agreement
is a modification of an existing obligation and is not a novation.


 


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COLLATERAL. Borrower acknowledges and confirms that there have been no changes in the
ownership of any collateral pledged to secure the Obligations (the “Collateral”) since the
Collateral was originally pledged; Borrower acknowledges and confirms that the Bank has existing,
valid first priority security interests and liens in the Collateral; and that such security
interests and liens shall secure Borrower’s Obligations, including any modification of any Note or
Loan Agreement, if any, and all future modifications, extensions, renewals and/or replacements of
the Loan Documents.



MISCELLANEOUS. This Agreement shall be construed in accordance with and governed by the laws
of the applicable state as originally provided in the Loan Documents, without reference to that
state’s conflicts of law principles. This Agreement and the other Loan Documents constitute the
sole agreement of the parties with respect to the subject matter thereof and supersede all oral
negotiations and prior writings with respect to the subject matter thereof. No amendment of this
Agreement, and no waiver of any one or more of the provisions hereof shall be effective unless set
forth in writing and signed by the parties hereto. The illegality, unenforceability or
inconsistency of any provision of this Agreement shall not in any way affect or impair the
legality, enforceability or consistency of the remaining provisions of this Agreement or the other
Loan Documents. This Agreement and the other Loan Documents are intended to be consistent.
However, in the event of any inconsistencies among this Agreement and any of the Loan Documents,
the terms of this Agreement, and then the Notes, shall control. This Agreement may be executed in
any number of counterparts (including by facsimile or PDF) and by the different parties on separate
counterparts. Each such counterpart shall be deemed an original, but all such counterparts shall
together constitute one and the same agreement. Terms used in this Agreement which are capitalized
and not otherwise defined herein shall have the meanings ascribed to such terms in the Notes.
LIMITATION ON LIABILITY; WAIVER OF PUNITIVE DAMAGES. EACH OF THE PARTIES HERETO, INCLUDING BANK BY
ACCEPTANCE HEREOF, AGREES THAT IN ANY JUDICIAL, MEDIATION OR ARBITRATION PROCEEDING OR ANY CLAIM OR
CONTROVERSY BETWEEN OR AMONG THEM THAT MAY ARISE OUT OF OR BE IN ANY WAY CONNECTED WITH THIS
AGREEMENT, THE LOAN DOCUMENTS OR ANY OTHER AGREEMENT OR DOCUMENT BETWEEN OR AMONG THEM OR THE
OBLIGATIONS EVIDENCED HEREBY OR RELATED HERETO, IN NO EVENT SHALL ANY PARTY HAVE A REMEDY OF, OR BE
LIABLE TO THE OTHER FOR, (1) INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES OR (2) PUNITIVE OR
EXEMPLARY DAMAGES. EACH OF THE PARTIES HEREBY EXPRESSLY WAIVES ANY RIGHT OR CLAIM TO PUNITIVE OR
EXEMPLARY DAMAGES THEY MAY HAVE OR WHICH MAY ARISE IN THE FUTURE IN CONNECTION WITH ANY SUCH
PROCEEDING, CLAIM OR CONTROVERSY, WHETHER THE SAME IS RESOLVED BY ARBITRATION, MEDIATION,
JUDICIALLY OR OTHERWISE. Final Agreement. This 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 agreements of the parties. There are no unwritten agreements between
the parties.



WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH BORROWER BY EXECUTION
HEREOF AND BANK BY ACCEPTANCE HEREOF, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT
EACH MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON, OR ARISING OUT OF, UNDER OR
IN CONNECTION WITH THIS AGREEMENT, THE LOAN DOCUMENTS OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED
IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY WITH RESPECT HERETO. THIS PROVISION IS A MATERIAL
INDUCEMENT TO BANK TO ACCEPT THIS AGREEMENT. EACH OF THE PARTIES AGREES THAT THE TERMS HEREOF
SHALL SUPERSEDE AND REPLACE ANY PRIOR AGREEMENT RELATED TO ARBITRATION OF DISPUTES BETWEEN THE
PARTIES CONTAINED IN ANY LOAN DOCUMENT OR ANY OTHER DOCUMENT OR AGREEMENT HERETOFORE EXECUTED IN
CONNECTION WITH, RELATED TO OR BEING REPLACED, SUPPLEMENTED, EXTENDED OR MODIFIED BY, THIS
AGREEMENT.



[Signature Page to Follow Immediately Hereafter]




 


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IN WITNESS WHEREOF, the undersigned have duly signed and sealed this Agreement the day and
year first above written.



	 	 	 	 	 
	 	A.C. MOORE ARTS & CRAFTS, INC.,

a Pennsylvania corporation

Taxpayer Identification Number: 22-3527763

 	 
	 	By:  	/s/ Rodney B. Schriver
 	 
	 	 	Rodney B. Schriver 	 
	 	 	Vice President/Controller 	 
	 
	 	A.C. MOORE INCORPORATED,

a Virginia corporation

Taxpayer Identification Number: 22-2546111

 	 
	 	By:  	/s/ Rodney B. Schriver
 	 
	 	 	Rodney B. Schriver 	 
	 	 	Vice President/Controller 	 
	 
	 	MOORESTOWN FINANCE, INC.

a Delaware corporation

Taxpayer Identification Number: 52-2066272

 	 
	 	By:  	/s/ Rodney B. Schriver
 	 
	 	 	Rodney B. Schriver 	 
	 	 	Vice President/Controller 	 
	 
	 	BLACKWOOD ASSETS, INC.,

a Delaware corporation

Taxpayer Identification Number: 52-2066271

 	 
	 	By:  	/s/ Rodney B. Schriver
 	 
	 	 	Rodney B. Schriver 	 
	 	 	Vice President/Controller 	 



 


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	 	A.C. MOORE URBAN RENEWAL, LLC,

a New Jersey limited liability company

Taxpayer Identification Number: 56-2388590

 	 
	 	By:  	/s/ Rodney B. Schriver
 	 
	 	 	Rodney B. Schriver 	 
	 	 	Authorized Signatory 	 
	 
	 	WACHOVIA BANK, NATIONAL ASSOCIATION

 	 
	 	By:  	 	 
	 	 	Dante Bucci,  	 
	 	 	Senior Vice President 	 




 


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