Document:

Letter of Credit Agreement between Sidney J. Silver

 Exhibit 10.3 
  
 LETTER OF CREDIT AGREEMENT 
  
 LETTER OF CREDIT AGREEMENT (this “Agreement”), dated as of January 27, 2006, between Sidney Silver (the “Account Party”), and
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as agent (in such capacity, herein the “Agent”) for certain lenders (the “Lenders”) under the Credit Agreement dated as of January 6, 2006 (as the
same may be amended, modified or supplemented from time to time, the “Credit Agreement”) among (a) Agent, (b) Lenders, (c) The Rowe Companies, Rowe Furniture, Inc. and Storehouse, Inc., as Borrowers (individually, a
“Borrower” and collectively, the “Borrowers”), and (d) the other credit parties signatory thereto. Unless otherwise defined all capitalized terms used herein shall have the meaning given to them in the Credit
Agreement. 
  
 RECITALS: 
  
 WHEREAS, the Account Party is a shareholder of The Rowe Companies, and, as
such, will derive direct and indirect economic benefits from the making of the Loans and other extensions of credit to the Borrower pursuant to the Credit Agreement (which benefits are hereby acknowledged); 
  
 WHEREAS, Agent and Lenders have agreed to make certain modifications to the
Credit Agreement which will result in additional Loans and other extensions of credit to the Borrowers, but only upon the condition, among others, that the Account Party (a) provide the limited guaranty contained herein and (b) cause to be
issued by Wachovia Bank, National Association, for its account and for the benefit of Agent a standby letter of credit having a face amount of $1,500,000 in the form of Exhibit A hereto (the “Letter of Credit”). 
  
 NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration receipt of which is hereby acknowledged, it is agreed as follows: 
  
 1. Guaranty. The Account Party hereby guarantees to the Lenders and the Agent the full and punctual payment when due (whether at stated maturity, by required pre-payment, by acceleration or otherwise), as well
as the performance, of, subject to the last sentence contained in this Section 1, all of the Obligations including all such which would become due but for the operation of the automatic stay pursuant to §362(a) of the Federal Bankruptcy
Code and the operation of §§502(b) and 506(b) of the Federal Bankruptcy Code. If for any reason any of the Borrowers has no legal existence or is under no legal obligation to discharge any of the Obligations, or if any of the Obligations
have become irrecoverable from any of the Borrowers by reason of any of the Borrowers’ insolvency, bankruptcy or reorganization or by other operation of law or for any other reason, this guaranty shall nevertheless be binding on the Account
Party to the same extent as if the Account Party at all times had been the principal obligor on all such Obligations. Notwithstanding anything to the contrary contained herein, (a) the Agent’s and each Lender’s remedies hereunder
shall be recourse only to the Letter of Credit, (b) the liability of the Account Party hereunder shall be limited to $1,500,000 and (c) the Agent will not demand payment under this guaranty except to the extent that the Agent is entitled
to draw on the Letter of Credit pursuant to Section 2 hereof. 

 2. Drawings on Letter of Credit. Agent hereby agrees that, notwithstanding any provisions of the
Letter of Credit to the contrary, Agent shall not be entitled to make drawings under the Letter of Credit unless and until: (a) (i) Agent has completed the disposition of substantially all the collateral securing the Obligations pursuant
to the exercise of any rights or remedies under the Loan Documents, as determined by Agent in its reasonable business judgment, or (ii) in any proceeding under the Bankruptcy Code in which any of the Borrowers are debtors, a court having
jurisdiction over such proceeding enters an order confirming a plan of reorganization that does not require payment in full in cash of all of the Obligations; provided that, the proceeds of such disposition (in the case of clause (a)(i)) or
payments under such plan of reorganization (in the case of clause (a)(ii)) are not sufficient to pay in full in cash all of the Obligations (such shortfall being the “Deficiency”), (b) 18 months after acceleration of the
Obligations pursuant to the terms of the Credit Agreement or the commencement of any proceeding under the Bankruptcy Code or any similar proceeding in which any of the Borrowers are debtors, (c) the failure by any Borrower to reasonably
cooperate with the Agent with respect to any enforcement action taken or proposed to be taken by the Agent pursuant to the terms of the Loan Documents (the events in clauses (a)(i), (a)(ii), (b) and (c) each being referred to herein
as a “Payment Event”), or (d) at any time after the date which is thirty (30) days prior to the stated expiry date of the Letter of Credit; provided, further that, with respect to (x) drawings pursuant
to clause (a) above, Agent shall not be entitled to make drawings under the Letter of Credit in an amount in excess of the Deficiency and (y) drawings pursuant to clauses (b) and (c) above, Agent shall not be
entitled to make drawings under the Letter of Credit in an amount in excess of the Obligations at such time. Except for drawings under clause (d) of this Section 2, the Agent hereby agrees that any drawing under the Letter of Credit
shall be made concurrently with a drawing in the same amount under that certain standby letter of credit issued for Gerald M. Birnbach’s account and for the benefit of Agent having a face amount of $1,500,000, to the extent such letter of
credit is valid and existing at such time. 
  
 3. Proceeds of
Letter of Credit. Agent shall apply (a) proceeds of any drawing under the Letter of Credit referred to in clause (a) of Section 2 hereof to satisfy any Deficiency and (b) proceeds of any drawing under the Letter of
Credit referred to in clauses (b) and (c) of Section 2 hereof to satisfy any Obligations. Agent shall deposit proceeds of any drawing under the Letter of Credit referred to in clause (d) of Section 2 hereof
into a cash collateral account (the “Cash Collateral Account”) maintained at a bank or financial institution acceptable to Agent until the occurrence, if any, of a Payment Event, at which time funds in the Cash Collateral Account
shall be used solely to satisfy, as applicable, (x) any Deficiency, pursuant to clause (a) of Section 2 hereof, or (y) the Obligations, pursuant to clause (b) and/or clause (c) of Section 2
hereof. Upon payment in full in cash of all of the Obligations and the termination of any commitments to make further extensions of credit under the Loan Documents, any funds remaining in the Cash Collateral Account shall be paid to Account Party at
c/o Barry Taff, Esq., Silver Freedman & Taff, LLP., 1700 Wisconsin Avenue N.W., Washington, D.C. 20007 or as otherwise required by law. The Cash Collateral Account shall be in the name of Agent and shall be subject to the control of Agent,
for the benefit of Agent and Lenders, in a manner satisfactory to Agent. Account Party hereby pledges and grants to Agent, on behalf of itself and Lenders, a security interest in all such funds held in the Cash Collateral Account from time to time
and all proceeds thereof, as security for the payment of all amounts due in respect of the Obligations, whether or not then due. This Agreement shall constitute a security agreement under applicable law. Any interest earned on deposits in the Cash
Collateral Account shall be deposited in the Cash Collateral Account and held as additional collateral, provided Agent shall be under no obligation to make any investments with such funds. 

 4. Cancellation. Agent agrees that Agent shall return the Letter of Credit to the Account Party
for cancellation upon the earlier of (a) Borrowers’ receipt of the Equity Contribution and (b) payment in full in cash of all of the Obligations and the termination of any commitments to make further extensions of credit under the
Loan Documents 
  
 5. Subordination, Fees, etc. The parties
hereto hereby agree that all fees, reimbursement obligations, interest and other consideration and other amounts owing to the Account Party with respect to or in connection with the issuance, any renewal or the drawing of the Letter of Credit shall
be and hereby are subordinated and the payment thereof is deferred until the full and final payment in cash of the Obligations, whether now or hereafter incurred or owed by the Credit Parties. Notwithstanding the immediately preceding sentence, the
Borrowers shall be permitted to pay, and the Account Party shall be permitted to receive, (a) any regularly scheduled payment of Fees so long as at the time of such payment, and after giving effect thereto, no Default or Event of Default would
exist and (b) reimbursement for all reasonable out-of-pocket expenses (including legal fees) incurred by the Account Party in connection with the issuance of the Letter of Credit and the related transactions and agreements. For purposes hereof,
“Fees” shall mean any fee required to be paid by the Borrowers to the Account Party in connection with the issuance and any renewal of the Letter of Credit; provided that (i) the aggregate of all Fees in connection with the
initial issuance of the Letter of Credit shall not exceed 2% of the face amount of the Letter of Credit, (ii) the aggregate of all Fees in connection with any renewal of the Letter of Credit during the initial year after issuance shall not
exceed 2% on the face amount of the Letter of Credit and (iii) the aggregate of all Fees in connection with each renewal of the Letter of Credit during any subsequent year shall not exceed 4% on the face amount of the Letter of Credit.

  
 6. Waivers. Until payment in full in cash of all of the
Obligations and the termination of any commitments to make further extensions of credit under the Loan Documents, the Account Party shall not: (a) exercise any right against any Credit Party, by way of subrogation, reimbursement, indemnity,
contribution, or the like; or (b) file any proof of any claim in competition with the Agent or any Lender in respect of the Letter of Credit or any drawing thereunder in any bankruptcy or insolvency proceedings of any nature with respect to any
Credit Party. Account Party hereby agrees that Agent and Lenders may exercise remedies against all or part of any collateral held as security for the Obligations, and apply any proceeds of such collateral to the Obligations, in such order as Agent
and Lenders, in their sole discretion, elect. Account Party agrees not to assert and hereby waives, to the fullest extent permitted by law, (a) any right to promptness, diligences, presentment, demand, protest, notice of acceptance, notice of
any Obligations incurred and all other notices of any kind, (b) any right to request, plead or otherwise assert or otherwise claim the benefit of, any marshaling, appraisement, valuation or other similar right of a creditor that may otherwise
be available under applicable law or any right to receive notice of Agent’s and Lenders’ intended disposition of such collateral (or a portion thereof), (c) all defenses which may be available by virtue of any valuation, stay,
moratorium law or other similar law now or hereafter in effect and (d) all suretyship defenses generally. Neither Agent nor any Lender nor any of their respective directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of such 

 collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any such
collateral upon the request of any Credit Party or Account Party or any other Person or to take any other action whatsoever with regard to any such collateral or any part thereof. Account Party hereby waives, releases and discharges any and all
rights, claims, causes of action, liabilities, claims and demands, in law or equity, which Account Party has had, now has, or may in the future have, arising out of or relating directly or indirectly to the taking or not taking of any act or
proceeding or not proceeding with any action which Agent or any Lender may take pursuant to the Loan Documents or any other documents or in an effort to collect in respect of the Obligations. 
  
 7. Changes In Obligations. The Account Party consents to, and agrees
that Agent and Lenders shall have no liability to Account Party as a result of (and agrees that none of the following shall require notice to or consent of the Account Party or affect any of the Account Party’s obligations hereunder),
(a) any consent, forbearance or waiver which the Agent or any Lender might grant or give any Credit Party and/or any other person liable or obligated for or on the Obligations, (b) any amendment, cancellation, termination or modification
of any provision of any Loan Document or the Obligations or any compromise, settlement, or release by the Agent or any Lender of the Obligations or of the obligations of any such other person (whether or not jointly liable with the Account Party),
or (c) any release of any collateral securing the Obligations or securing the obligations of any such other person. 
  
 8. Binding Effect, Amendments. This Agreement shall inure to the benefit of the parties and their respective successors and assigns and shall be
binding upon the heirs, successors, representatives, and assigns of parties. No amendment, modification, termination or waiver of any provision of this Agreement, or any consent to any departure by any party therefrom, shall in any event be
effective unless the same shall be in writing and signed by Agent and Account Party. All of the understandings, covenants, and agreements contained herein are solely for the benefit of the parties, their respective successors and assigns and there
are no other parties, including any Credit Party or any of their creditors, successors, or assigns, which are intended to be benefited, in any way, by this Agreement. 
  
 9. Counterparts; Headings. This Agreement may be executed in counterparts, each of which shall be an original and all
of which, taken together, shall constitute a single instrument. The headings in this Agreement are for convenience of reference only, and shall not alter or otherwise affect the meaning hereof. 
  
 10. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. THE PARTIES AGREE THAT ANY ACTIONS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED IN THE STATE AND FEDERAL
COURTS LOCATED IN THE COUNTY OF NEW YORK, IN THE STATE OF NEW YORK. THE PARTIES HERETO WANE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN AGENT
AND ACCOUNT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THIS AGREEMENT. 

 11. Severability; No Strict Construction. Wherever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement. 
  
 12. Transferability. The Account Party hereby agrees that the Agent may assign or otherwise transfer this Agreement and the Letter of Credit
pursuant to the provisions of Section 9 of the Credit Agreement. 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date
first herein above set forth. 
  

			
	 /s/ Sidney Silver

 Sidney Silver

	
	 GENERAL ELECTRIC CAPITAL
 CORPORATION, as
Agent

		
	By:	 	 /s/ Charles D. Chiodo

	Name:	 	 Charles D. Chiodo

	Title:	 	Duly Authorized SignatoryAgreement, dated as of January 26, 2006

 Exhibit 10.4 
  
 AGREEMENT 
  
 THIS AGREEMENT is made this 26th day of January 2006 by and among Sidney J. Silver (“Silver”), Gerald M. Birnbach (“Birnbach”), The Rowe Companies (“Rowe”), Rowe Furniture, Inc. (“RF”), Storehouse, Inc. (“SH”), Rowe
Diversified, Inc. (“RD”) and Rowe Properties, Inc. (“RP”). Silver and Birnbach may hereinafter be referred to collectively as the “Guarantors”, and Rowe, RF and SH may hereinafter be referred to collectively as the
“Borrowers”, and the Borrowers, RD and RP may hereinafter be referred to collectively as the “Credit Parties”). 
  
 WHEREAS, the Credit Parties are party to a certain Credit Agreement dated January 6, 2006 (“Credit Agreement”) with General Electric
Capital Corporation, a Delaware corporation (“GE Capital”), for itself as Lender and as Agent for Lenders, GE Capital Markets, Inc. and the other signatories thereto from time to time, and 
  
 WHEREAS, the Borrowers have requested GE Capital to amend certain provisions
of the Credit Agreement, but GE Capital is not willing to do so absent the delivery of a limited guaranty of the Borrowers’ obligations under the Credit Agreement to be secured by and limited to the face amount of irrevocable standby letters of
credit in favor of GE Capital in the aggregate amount of $3,000,000, and 
  
 WHEREAS, the Credit Parties have requested that the Guarantors assist the Borrowers in securing the modification of the Credit Agreement referenced above by furnishing to GE Capital the limited guaranty and letters of
credit that it has requested, and 
  
 WHEREAS, the Guarantors are
willing to so assist the Credit Parties, subject to the terms and conditions of this Agreement. 
  
 NOW THEREFORE, for and in consideration of the premises herein contained, the payments to be made hereunder by the Credit Parties to the Guarantors, and
for other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the parties, the parties hereto, intending to be bound, agree as follows: 
  

	 	1.	Recitals. The recitals set forth above are incorporated herein by reference and made a part of this Agreement. 

  

	 	2.	Limited Guaranty and Issuance of Letters of Credit. 

  

	 	a.	Silver agrees to provide in favor of GE Capital a limited guaranty of the Obligations of the Borrowers under the Credit Agreement, as more particularly described in the Letter of
Credit Agreement attached hereto as Exhibit I. Upon the later to occur of (i) the execution and delivery of this Agreement by all of the intended parties hereto, (ii) the approval of this Agreement by the audit committee of the
Board of Directors of each Credit Party and/or a committee of directors of each 

  

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 Credit Party meeting independence requirements of AMEX, and (iii) the approval of this
Agreement by the Board of Directors of the Credit Parties (excluding the Guarantors, who will not participate in the debate or vote of any of the foregoing directors meetings), Silver agrees to execute and deliver such Letter of Credit Agreement to
GE Capital. 
  

	 	b.	Birnbach agrees to provide in favor of GE Capital a limited guaranty of the Obligations of the Borrowers under the Credit Agreement, as more particularly described in the Letter of
Credit Agreement attached hereto as Exhibit II. Upon the later to occur of (i) the execution and delivery of this Agreement by all of the intended parties hereto, (ii) approval of this Agreement by the audit committee of the Board
of Directors of each Credit Party and/or a committee of directors of each Credit Party meeting independence requirements of AMEX, and (iii) the approval of this Agreement by the Board of Directors of the Credit Parties (excluding the
Guarantors, who will not participate in the debate or vote of any of the foregoing directors meetings), Birnbach agrees to execute and deliver such Letter of Credit Agreement to GE Capital. 

  

	 	c.	Following the execution and delivery of the Letter of Credit Agreements referred to above, each of the Guarantors shall cause Wachovia Bank, or such other commercial bank acceptable
to Agent, to issue letters of credit in the form attached as Exhibit III. 

  

	 	d.	The obligations of Silver and Birnbach set forth in this Section 2 are several and not joint. 

  

	 	3.	Payments to Guarantors. The Credit Parties, jointly and severally, agree to pay to each of the Guarantors a fee for providing his respective limited guaranty and
securing and delivering the letter of credit as contemplated under Section 2, as follows: 

  

	 	a.	Upon execution and delivery of this Agreement, an amount equal to two percent (2%) of the face amount of the letter of credit that the respective Guarantor will cause to be
issued in accordance with Section 2 above, which the parties stipulate to be $30,000.00 to each Guarantor. 

  

	 	b.	Upon the first renewal (or replacement) of the letter of credit (it is anticipated that the letters of credit will be renewed or replaced every six (6) months), an amount equal
to two percent (2%) of the face amount of the letter of credit that the respective Guarantor will cause to be issued in accordance with Section 2 above, which the parties stipulate to be $30,000.00 to each Guarantor.

  

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	 	c.	Upon each successive six-month renewal (or replacement) of the letter of credit, an amount equal to four percent (4%) of the face amount of the letter of credit, which the
parties stipulate to be $60,000.00 to each of the Guarantors at the time of each renewal or replacement. 

  

	 	d.	In addition to the payments contemplated under Subsections 3(a)-(c) above, if and to the extent a letter of credit is drawn upon, the Credit Parties shall pay to the Guarantor
whose letter of credit is drawn upon interest on the amount so drawn calculated at the annual rate equal to the Prime Rate of interest as quoted by Wachovia Bank from time to time, plus five percent (5%). 

  

	 	e.	The Credit Parties shall also pay all fees and costs (including actual attorneys fees) incurred by the Guarantors in connection with the transactions contemplated under this
Agreement, including without limitation, the modification of the Credit Agreement, the issuance of the letters of credit and the limited guaranty made in favor of Agent, as more particularly set forth in the Letter of Credit Agreements attached as
Exhibit I and Exhibit II. 

  

	 	4.	Covenants of Credit Parties. As a material inducement to the Guarantors to enter into this Agreement, the Credit Parties covenant and agree that for so long as the
limited guaranty and/or letters of credit remain outstanding, they shall: (a) not enter into any further modification of the Credit Agreement without the prior written consent of the Guarantors, (b) execute such documents as Guarantors may
from time to time request to secure the obligations of Credit Parties to Guarantors, provided however, in no event shall the Credit Parties be required to execute such instruments if such would breach any term of the Credit Agreement absent a
modification or waiver from GE Capital, (c) recognize any rights of subrogation reserved to or asserted by the Guarantors, if and to the extent permitted under the Letter of Credit Agreements attached as Exhibit I and Exhibit II,
(d) recognize and affirm the obligations to pay the amounts contemplated under this Agreement notwithstanding that the same may be greater than amounts payable under the Credit Agreement, (e) not violate any term or condition of the Credit
Agreement. 

  

	 	5.	Default. In the event of any default of any of the covenants or obligations under this Agreement by a Credit Party, the Guarantors shall have all rights and remedies
available under law or in equity, including the right of specific performance and injunctive relief. The Guarantors hereby agree that they shall participate on a pari passu basis with respect to any claims and rights they now or hereafter may
have against the Credit Parties. In no event shall any party hereto be liable to any other party for speculative, punitive, consequential or other damages. In case of a default of breach of an obligation on the part of a Guarantor hereunder, his
maximum liability shall not, in any event, exceed the face amount of the letter of credit. 

  

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	 	6.	Miscellaneous. This Agreement represents the entire agreement of the parties with respect to the subject matters covered hereby. This Agreement shall not be amended or
modified except by a written instrument signed by each of the Credit Parties and each of the Guarantors. This agreement shall be governed by the laws of the State of New York, or such other jurisdiction as may be provided for in the Credit Agreement
as amended from time to time. . The parties consent to the jurisdiction of the courts located in the State of New York, or such other jurisdiction as may be provided in the Credit Agreement as amended from time to time. Notices shall be sent by hand
or certified mail, return receipt requested or by overnight national courier and delivered against receipt. Notices to Credit Parties shall be sent in care of Rowe, attention: Garry Angle, Vice President-Treasurer, 2121 Gardner Street, Elliston,
Virginia 24087. Notices to Guarantors shall be sent as follows: if to Birnbach 5630 Wisconsin Avenue, Apartment 805, Chevy Chase, Maryland 20815, and if to Silver, 6605 Kenhill Road, Bethesda, Maryland, 20817, both with a copy to Barry P. Taff,
Esq., Silver, Freedman and Taff, LLP.1700 Wisconsin Avenue, N.W , Washington, D.C. 20007. Notices shall be deemed given when received or refused. 

  

IN WITNESS WHEREOF, the parties intending to be bound do hereby execute and deliver this Agreement as of the date and year first above written.

  

			
	THE ROWE COMPANIES
		
	BY:	 	 /s/ Garry W. Angle

	ITS:	 	 Vice President/Treasurer

	
	ROWE FURNITURE, INC.
		
	BY:	 	 /s/ Garry W. Angle

	ITS:	 	 Treasurer

	
	STOREHOUSE, INC
		
	BY:	 	 /s/ Garry W. Angle

	ITS:	 	 Treasurer

	
	ROWE DIVERSIFIED, INC.
		
	BY:	 	 /s/ Garry W. Angle

	ITS:	 	 Treasurer

	
	ROWE PROPERTIES, INC.
		
	BY:	 	 /s/ Garry W. Angle

	ITS:	 	 Treasurer

  

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	GUARANTORS:
	
	 /s/ Sidney J. Silver

 Sidney J. Silver

	
	 /s/ Gerald M. Birnbach

 Gerald M. Birnbach

  

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