Document:

Unassociated Document

    THIRD AMENDMENT TO CREDIT
AGREEMENT

     

    

     

    THIS
THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) dated as of
February 19, 2009, is by and among HOOKER
FURNITURE COMPANY (the “Borrower”), THE
PERSONS IDENTIFIED AS LENDERS ON THE SIGNATURE PAGE HERETO (whether one
or more, the “Lenders”) and BANK OF
AMERICA, N.A., as agent for the Lenders (the “Agent”). 

     

    WHEREAS,
the Borrower, the Lenders and the Agent are parties to a Credit Agreement dated
as of April 30, 2003, as amended by a First Amendment to Credit Agreement dated
as of February 18, 2005, and a Second Amendment to Credit Agreement dated as of
February 27, 2008 (such credit agreement and amendments, the “Existing Credit
Agreement”); and 

     

    WHEREAS,
the Borrower has requested that the Lenders make certain amendments to the
Existing Credit Agreement; and 

     

    WHEREAS,
the Lenders are willing to do so, as more fully set forth below, but only on the
terms and conditions set forth herein.  

     

    NOW,
THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties agree as follows: 

     

    1. Definitions.  “Amended
Credit Agreement” means the Existing Credit Agreement as amended by this
Amendment.  Capitalized terms used in this Amendment and not otherwise
defined shall have the meanings ascribed to them in the Existing Credit
Agreement.   

     

    2.
Amendment
of Certain Definitions.

     

     (a)
Effective
as of January 1, 2009, the definition of “Applicable Rate” in Section

    1.1 of
the Existing Credit Agreement is amended by deleting the first sentence thereof
and replacing it with the following:

     

    “Applicable Rate”
means, from time to time, the following percentages per annum, based upon the
Funded Debt to EBITDA ratio (the “Financial Covenant”) as set forth in the most
recent Compliance Certificate received by Agent pursuant to Section 6.02(b):

     

    
      
        
          	
                  Pricing
      

                  Level

                	
                  Funded
      Debt to 

                  EBITDA
      Ratio

                	
                  Commitment
      Fee

                	
                  LIBOR
      Loans 

                  and
      Letters of 

                  Credit

                
	
                  1

                	
                  <
      0.75:1

                	
                  0.200%

                	
                  1.25%

                
	
                  2

                	
                  >0.75:1
      but < 1.25:1

                	
                  0.250%

                	
                  1.50%

                
	
                  3

                	
                  >1.25:1
      but < 1.50:1

                	
                  0.250%

                	
                  1.75%

                
	
                  4

                	
                  >1.50:1

                	
                  0.375%

                	
                  2.00%

                

        

      

    

    

    (b) Effective
as of January 1, 2009, the definition of “Cash Flow” in Section 1.1 of
the Existing Credit Agreement is amended to read in its entirety as follows:

    “Cash Flow” means, for
any period (a) net income, after income taxes, (b) less income or plus loss from
discontinued operations and extraordinary items, (c) plus depreciation,
depletion, amortization and other non-cash charges, (d) plus interest expense
on all obligations, and (e) minus dividends,
withdrawals, and other distributions, in each case for such period.

     

    1    References
in Other Credit Documents.  All references in the Existing
Credit Agreement to the "Credit Agreement" and all references in the other Loan
Documents to the "Credit Agreement" shall be deemed to refer to the Amended
Credit Agreement. 

    2    Representations
and Warranties.  The Borrower hereby represents and warrants
that (a) the representations and warranties contained in Article V of the
Existing Credit Agreement (as amended by this Amendment) are correct in all
material respects on and as of the date hereof as though made on and as of such
date and after giving effect to the amendments contained herein, except to the
extent that such representations and warranties specifically refer to an earlier
date, in which case they shall be true and correct in all material respects as
of such earlier date, and except that for purposes of this Section, the
representations and warranties contained in subsections (a) and (b) of Section
5.05 of the Existing Credit Agreement shall be deemed to refer to the most
recent statements furnished pursuant to clauses (a) and (b), respectively, of
Section 6.01, and (b) no Default or Event of Default exists under the Existing
Credit Agreement on and as of the date hereof and after giving effect to the
amendments contained herein. 

    3    Ratification
and Reaffirmation.  Each Loan Party hereby ratifies the Loan
Documents to which it is a party and acknowledges and reaffirms (a) that it is
bound by all terms of such Loan Documents (as amended hereby) applicable to it
and (b) that it is responsible for the observance and full performance of its
respective Obligations under such Loan Documents.  

    4    Instrument
Pursuant to Existing Credit Agreement.  This Amendment is a
Loan Document executed pursuant to the Existing Credit Agreement and shall
(unless otherwise expressly indicated therein) be construed, administered and
applied in accordance with the terms and provisions of the Amended Credit
Agreement. 

    5    No
Other Changes.  Except as expressly modified and amended by
this Amendment, the Existing Credit Agreement and all other Loan Documents shall
continue in full force and effect and all the terms, provisions and conditions
of the Loan Documents shall remain unchanged. 

    6    Severability.  Any
provision of this Amendment held to be invalid, illegal or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability without affecting the validity,
legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not
invalidate such provision in any other jurisdiction. 

    7    Counterparts.  This
Amendment may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.  Delivery of executed
counterparts of this Amendment by telecopy shall be effective as an original and
shall constitute a representation that an original shall be
delivered.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    8    Governing
Law.  This Amendment shall be governed by, and construed and
interpreted in accordance with, the laws of the Commonwealth of Virginia,
without giving effect to the conflict of law principles thereof. 

    9    Successors
and Assigns.  This
Amendment shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and permitted assigns. 

    10    Fees
and Expenses.  The
Borrower shall pay to the Lenders and Agent upon demand the full amount of all
costs and expenses, including reasonable attorneys’ fees, incurred by the
Lenders and Agent in the negotiation and preparation of this Amendment.

    

    

    

    IN
WITNESS WHEREOF, the Borrower, Agent and the Lenders have caused this
Amendment to be executed under seal by their duly authorized officers as of the
date first above written. 

     

    [Remainder
of Page Intentionally Left Blank – Signature Page Follows]

     

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    

    

    

    

    

    

    SIGNATURE PAGE TO THIRD
AMENDMENT TO CREDIT AGREEMENT

     

    
      
        
          
            	
                    Borrower:

                  	
                    HOOKER
      FURNITURE CORPORATION

                  
	 	 
	 	 
	 
      	
                    By:
       /s/Paul B. Toms,
      Jr

                  
	 
      	
                    Name:  Paul
      B. Toms, Jr.

                  
	 
      	
                    Title:    Chairman,
      President and Chief Executive Officer 

                  
	 
      	 
      
	 
      	
                    By:
       /s/ Edwin L.
      Ryder 

                  
	 
      	
                    Name:  Edwin
      L. Ryder 

                  
	 
      	
                    Title:    EVP-
      Finance and Administration 

                  
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                    Agent:

                  	
                    BANK
      OF AMERICA, N.A.

                  
	 
      	 
      
	 
      	 
      
	 
      	
                    By:
      /s/ Greg L.
      Richards

                  
	 
      	
                    Name:
      Greg L. Richards

                  
	 
      	
                    Title:   Senior
      Vice President

                  
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
                    Lenders:

                  	
                    BANK
      OF AMERICA, N.A.

                  
	 
      	 
      
	 
      	 
      
	 
      	
                    By:
      /S/ Greg L.
      Richards

                  
	 
      	
                    Name:  Greg
      L. Richards

                  
	 
      	
                    Title:
      Senior Vice
PresidentNOTICE
OF GRANT OF [INCENTIVE/NON-QUALIFIED] STOCK OPTION AWARD

       

      HONG
KONG HIGHPOWER TECHNOLOGY, INC.

      2008
OMNIBUS INCENTIVE PLAN

       

      FOR GOOD
AND VALUABLE CONSIDERATION, Hong Kong Highpower Technology, Inc. (the “Company”)
hereby grants, pursuant to the provisions of the Company’s 2008 Omnibus
Incentive Plan (the “Plan”), to the Participant designated in this Notice of
Grant of [Incentive/Non-Qualified]
Stock Option Award (the “Notice”) an option to purchase the number of shares of
the common stock of the Company set forth in the Notice (the “Shares”), subject
to certain restrictions as outlined below in this Notice and the additional
provisions set forth in the attached Terms and Conditions of Stock Option Award
(collectively, the “Agreement”).  Also enclosed is a copy of the
information statement describing important provisions of the Plan.

       

      Optionee:               [__________]

       

      
        	
                 

                Date of
      Grant:               ____________

                 

              	
                 

                Type of
      Option:  [Incentive/Non-Qualified]
      Stock Option

                 

              
	
                 

                Exercise Price per
      Share:           $____

                 

              	
                 

                Expiration
      Date:                ____________

                 

              
	
                 

                Total
      Number of

                Shares
      Granted:                      _______

                 

              	
                 

                Total Exercise
      Price:                              $______

              
	
                 

                Vesting
      Schedule:    [1/4 vesting on each of the
      first, second, third and fourth anniversaries of the date of the
      grant]

                 

              
	
                 

                Exercise After Termination of
      Service:

                 

                Termination of Service for any
      reason: any non-vested portion of the Option expires
      immediately;

                 

                Termination of Service due to
      death or Disability: vested portion of the Option is exercisable by
      the Optionee (or, in the event of the Optionee’s death, the Optionee’s
      Beneficiary) for one year after the Optionee’s Termination;

                 

                Termination of Service for any
      reason other than death or Disability: vested portion of the Option
      is exercisable for a period of ninety days following the Optionee’s
      Termination.

                 

                In no event may this Option be
      exercised after the Expiration Date as provided above.

                 

              

      

       

      By
signing below, the Optionee agrees that this [Incentive/Non-Qualified]
Stock Option Award is granted under and governed by the terms and conditions of
the Company’s 2008 Omnibus Incentive Plan and the attached Terms and
Conditions.

      

      
        
          
            
              
                
                  
                    
                      	
                              Participant

                            	 
      	
                              Hong
      Kong Highpower Technology, Inc.

                            
	 
      	 
      	 
      
	 
      	 
      	
                              By:

                            	 
      
	 
      	 
      	
                              Title:

                            	 
      
	
                              Date:

                            	 
      	 
      	
                              Date:

                            	 
      

                    

                  

                

              

            

          

        

      

       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                TERMS
      AND CONDITIONS OF STOCK OPTION
AWARD

              

      

       

      1.           Grant of
Option.  The Option granted to the Optionee and described in
the Notice of Grant is subject to the terms and conditions of the Plan, which is
incorporated by reference in its entirety into these Terms and Conditions of
Stock Option Award.

       

      The Board
of Directors of the Company has authorized and approved the 2008 Omnibus
Incentive Plan (the “Plan”), which has been approved by the stockholders of the
Company.  The Committee has approved an award to the Optionee of a
number of shares of the Company’s common stock, conditioned upon the
Participant’s acceptance of the provisions set forth in the Notice and these
Terms and Conditions within 60 days after the Notice and these Terms and
Conditions are presented to the Optionee for review.  For purposes of
the Notice and these Terms and Conditions, any reference to the Company shall
include a reference to any Affiliate.

       

      If
designated in the Notice of Grant as an Incentive Stock Option (“ISO”), this
Option is intended to qualify as an Incentive Stock Option as defined in Section
422 of the Code.  Nevertheless, to the extent that the Option fails to
meet the requirements of an ISO under Section 422 of the Code, this Option shall
be treated as a Non-Qualified Stock Option (“NSO”).

       

      The
Company intends that this Option not be considered to provide for the deferral
of compensation under Section 409A of the Code and that this Agreement shall be
so administered and construed.  Further, the Company may modify the
Plan and this Award to the extent necessary to fulfill this intent.

       

      2.           Exercise of
Option.

       

      (a)           Right to
Exercise.  This Option shall be exercisable, in whole or in
part, during its term in accordance with the Vesting Schedule set out in the
Notice of Grant and with the applicable provisions of the Plan and this Option
Agreement.  No Shares shall be issued pursuant to the exercise of an
Option unless the issuance and exercise comply with applicable
laws.  Assuming such compliance, for income tax purposes the Shares
shall be considered transferred to the Optionee on the date on which the Option
is exercised with respect to such Shares.  The Committee may, in its
discretion, (i) accelerate vesting of the Option, or (ii) extend the applicable
exercise period to the extent permitted under Section 6.03 of the
Plan.

       

      (b)           Method of
Exercise.  The Optionee may exercise the Option by delivering
an exercise notice in a form approved by the Company (the “Exercise Notice”)
which shall state the election to exercise the Option, the number of Shares with
respect to which the Option is being exercised, and such other representations
and agreements as may be required by the Company.  The Exercise Notice
shall be accompanied by payment of the aggregate Exercise Price as to all Shares
exercised.  This Option shall be deemed to be exercised upon receipt
by the Company of such fully executed Exercise Notice accompanied by the
aggregate Exercise Price.

       

      (c)           Acceleration of Vesting on
Change in Control.  Unless otherwise specified in the Notice of
Grant, in the event of a Change in Control, no accelerated vesting of any
Options outstanding on the date of such Change in Control shall
occur.

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      3.           Method of
Payment.  If the Optionee elects to exercise the Option by
submitting an Exercise Notice under Section 2(b) of this Agreement, the
aggregate Exercise Price (as well as any applicable withholding or other taxes)
shall be paid by cash or check; provided, however, that the
Committee may consent, in its discretion, to payment in any of the following
forms, or a combination of them:

       

      (a)           cash
or check;

       

      (b)           a
“net exercise” (as described in the Plan or such other consideration received by
the Company under a cashless exercise program approved by the Company in
connection with the Plan;

       

      (c)           surrender
of other Shares owned by the Optionee which have a Fair Market Value on the date
of surrender equal to the aggregate Exercise Price of the Exercised Shares and
any applicable withholding; or

       

      (d)           any
other consideration that the Committee deems appropriate and in compliance with
applicable law.

       

      4.           Restrictions on
Exercise.  This Option may not be exercised until such time as
the Plan has been approved by the stockholders of the Company, or if the
issuance of the Shares upon exercise or the method of payment of consideration
for those shares would constitute a violation of any applicable law or
regulation.

       

      5.           Non-Transferability of
Option.  This Option may not be transferred in any manner
otherwise than by will or by the laws of descent or distribution and may be
exercised during the lifetime of the Optionee only by the Optionee [IF THE OPTION IS A NSO, THE
FOLLOWING LANGUAGE MAY BE INCLUDED PERMITTING LIMITED TRANSFER OF THE OPTION] [;
provided, however, that the Optionee may transfer the Options (i) pursuant to a
qualified domestic relations order (as defined by the Code or the rules
thereunder) or (ii) to any member of the Optionee’s Immediate Family or to a
trust, limited liability company, family limited partnership or other equivalent
vehicle, established for the exclusive benefit of one or more members of his
Immediate Family by delivering to the Company a Notice of Assignment in a form
acceptable to the Company.  No transfer or assignment of the Option to
or on behalf of an Immediate Family member under this Section 5 shall be
effective until the Company has acknowledged such transfer or assignment in
writing.  “Immediate Family” means the Optionee’s parents, spouse,
children, siblings, and grandchildren.  Following transfer, the
Options shall continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer.  In the event an Option is
transferred as contemplated in this Section 5, such Option may not be
subsequently transferred by the transferee except by will or the laws of descent
and distribution.]  The terms of the Plan and this Option
Agreement shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.

       

      6.           Term of
Option.  This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option Agreement.

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      7.           Withholding.

       

      (a)           The
Committee shall determine the amount of any withholding or other tax required by
law to be withheld or paid by the Company with respect to any income recognized
by the Optionee with respect to the Option Award.

       

      (b)           The
Optionee shall be required to meet any applicable tax withholding obligation in
accordance with the provisions of Section 11.05 of the Plan.

       

      (c)           Subject
to any rules prescribed by the Committee, the Optionee shall have the right to
elect to meet any withholding requirement (i) by having withheld from this Award
at the appropriate time that number of whole shares of common stock whose fair
market value is equal to the amount of any taxes required to be withheld with
respect to such Award, (ii) by direct payment to the Company in cash of the
amount of any taxes required to be withheld with respect to such Award or (iii)
by a combination of shares and cash.

       

      8.           Defined
Terms.  Capitalized terms used but not defined in the Notice
and these Terms and Conditions shall have the meanings set forth in the Plan,
unless such term is defined in any Employment Agreement between the Optionee and
the Company or an Affiliate.  Any terms used in the Notice and these
Terms and Conditions, but defined in the Optionee’s Employment Agreement are
incorporated herein by reference and shall be effective for purposes of the
Notice and these Terms and Conditions without regard to the continued
effectiveness of the Employment Agreement.

       

      9.           Optionee
Representations.  The Optionee hereby represents to the Company
that the Optionee has read and fully understands the provisions of the Notice,
these Terms and Conditions and the Plan and the Optionee’s decision to
participate in the Plan is completely voluntary.  Further, the
Optionee acknowledges that the Optionee is relying solely on his or her own
advisors with respect to the tax consequences of this stock option
award.

       

      10.           Regulatory Limitations on
Exercises.  Notwithstanding the other provisions of this Option
Agreement, no option exercise or issuance of shares of Common Stock pursuant to
this Option Agreement shall be effective if (i) the shares reserved under the
Plan are not subject to an effective registration statement at the time of such
exercise or issuance, or otherwise eligible for an exemption from registration,
or (ii) the Company determines in good faith that such exercise or issuance
would violate any applicable securities or other law or regulation.

       

      11.           Miscellaneous.

       

      (a)           Notices.  All
notices, requests, deliveries, payments, demands and other communications which
are required or permitted to be given under these Terms and Conditions shall be
in writing and shall be either delivered personally or sent by registered or
certified mail, or by private courier, return receipt requested, postage prepaid
to the parties at their respective addresses set forth herein, or to such other
address as either shall have specified by notice in writing to the
other.  Notice shall be deemed duly given hereunder when delivered or
mailed as provided herein.

       

      (b)           Waiver.  The
waiver by any party hereto of a breach of any provision of the Notice or these
Terms and Conditions shall not operate or be construed as a waiver of any other
or subsequent breach.

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      (c)           Entire
Agreement.  These Terms and Conditions, the Notice and the Plan
constitute the entire agreement between the parties with respect to the subject
matter hereof.

       

      (d)           Binding Effect;
Successors.  These Terms and Conditions shall inure to the
benefit of and be binding upon the parties hereto and to the extent not
prohibited herein, their respective heirs, successors, assigns and
representatives.  Nothing in these Terms and Conditions, express or
implied, is intended to confer on any person other than the parties hereto and
as provided above, their respective heirs, successors, assigns and
representatives any rights, remedies, obligations or liabilities.

       

      (e)           Governing
Law.  The Notice and these Terms and Conditions shall be
governed by and construed in accordance with the laws of the State of
Delaware.

       

      (f)           Headings.  The
headings contained herein are for the sole purpose of convenience of reference,
and shall not in any way limit or affect the meaning or interpretation of any of
the terms or provisions of these Terms and Conditions.

       

      (g)           Conflicts;
Amendment.  The provisions of the Plan are incorporated in
these Terms and Conditions in their entirety.  In the event of any
conflict between the provisions of these Terms and Conditions and the Plan, the
provisions of the Plan shall control.  The Agreement may be amended at
any time by written agreement of the parties hereto.

       

      (h)           No Right to Continued
Employment.  Nothing in the Notice or these Terms and
Conditions shall confer upon the Optionee any right to continue in the employ or
service of the Company or affect the right of the Company to terminate the
Optionee’s employment or service at any time.

       

      (i)           Further
Assurances.  The Optionee agrees, upon demand of the Company or
the Committee, to do all acts and execute, deliver and perform all additional
documents, instruments and agreements which may be reasonably required by the
Company or the Committee, as the case may be, to implement the provisions and
purposes of the Notice and these Terms and Conditions and the Plan.

      

      
        
          
          

        

        
          5

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