EXHIBIT 10(E)
AMENDMENT NO. 4 TO LOAN AND SECURITY AGREEMENT
March 6, 1998
The Xxxx Company
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Gentlemen:
Reference is made to the Loan and Security Agreement (as heretofore amended,
the "Loan Agreement"), dated as of September 12, 1996, by and among Congress
Financial Corporation (Southern), as agent (the "Agent"), the Lenders parties
thereto and The Xxxx Company ("Borrower"), together with all other agreements,
documents and instruments at any time executed and/or delivered in connection
therewith or related thereto (as the same now exist, are being amended hereby
and may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, collectively, the "Financing Agreements"). All
capitalized terms used herein and not herein defined shall have the meanings
given to them in the Loan Agreement.
Borrower has requested that Agent and Lenders agree to (a) make an additional
term loan to Borrower in the principal amount of $9,344,137.17, consolidate the
principal amount of that term loan with the presently outstanding balance of
$11,913,862.83 of the existing Term Loan, and amend and restate the terms of
the Term Loan as so consolidated, (b) permit up to $4,000,000 of the proceeds
of the $9,344,137.17 additional term loan to be used for Capital Expenditures,
(c) reduce the Revolving Loan Limit from $75,000,000 to $60,000,000, (d) reduce
the amount of Tangible Net Worth required to be maintained by Borrower, (e)
consent to the proposed sale of certain Real Property of Borrower, (f) consent
to a sale and leaseback transaction with respect to certain Equipment of
Borrower, (g) reduce the Maximum Credit in connection with the amendments
referred to in clauses (a) and (c) above, and (h) extend the Renewal Date to
November 1, 2000. Agent and Lenders or Required Lenders, as applicable, are
willing to agree to such amendments and provide such consent, subject to the
terms and conditions set forth herein.
In consideration of the foregoing, the mutual agreements and covenants
contained herein and other good and valuable consideration, the parties hereto
agree as follows:
1. Definitions.
(a)Additional Definitions.
(i) "Original Congress Revolving Note" shall mean the Revolving Loan Note,
dated September 27, 1996, made by Borrower payable to the order of Congress in
the original principal amount of $61,043,481, as in effect on the date hereof
immediately prior to the effectiveness hereof.
(ii) "Original Congress Term Note" shall mean the Term Loan Note, dated
September 27, 1996, made by Borrower payable to the order of Congress in the
original principal amount of $16,956,522.50, as in effect on the date hereof
immediately prior to the effectiveness hereof.
(iii) "Original Transamerica Revolving Note" shall mean the Revolving Loan
Note, dated September 27, 1996, made by Borrower payable to the order of
Transamerica in the original principal amount of $28,956,519, as in effect on
the date hereof immediately prior to the effectiveness hereof.
(iv) "Original Transamerica Term Note" shall mean the Term Loan Note, dated
September 27, 1996, made by Borrower payable to the order of Transamerica in
the original principal amount of $8,043,477.50, as in effect on the date
hereof immediately prior to the effectiveness hereof.
(v) "Restated Congress Revolving Note" shall mean the Amended and Restated
Revolving Loan Note, dated of even date herewith, made by Borrower payable to
the order of Congress in the original principal amount of $40,695,654, as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
(vi) "Restated Congress Term Note" shall mean the Amended and Restated Term
Loan Note, dated of even date herewith, made by Borrower payable to the order
of Congress in the original principal amount of $14,418,470.21, as the same
now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
(vii) "Restated Revolving Notes" shall mean, individually and collectively,
the Restated Congress Revolving Note and the Restated Transamerica Revolving
Note.
(viii) "Restated Term Notes" shall mean, individually and collectively, the
Restated Congress Term Note and the Restated Transamerica Term Note.
(ix) "Restated Transamerica Revolving Note" shall mean the Amended and
Restated Revolving Loan Note, dated of even date herewith, made by Borrower
payable to the order of Transamerica in the original principal amount of
$19,304,346, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.
(x) "Restated Transamerica Term Note" shall mean the Amended and Restated Term
Loan Note, dated of even date herewith, made by Borrower payable to the order
of Transamerica in the original principal amount of $6,839,529.79, as the same
now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.
(b) Amendments to Definitions.
(i) Commitments.
(A) Effective as of the date hereof, the Commitment of Congress, as set forth
on the signature page of the Loan Agreement, is hereby amended by replacing
the figure $67,826,090" and replacing it with "$55,114,124.21".
(B) Effective as of the date hereof, the Commitment of Transamerica, as set
forth on the signature page of the Loan Agreement, is hereby amended by
replacing the figure "$32,173,910" with "$26,143,875.79".
(ii) Maximum Credit. Effective as of the date hereof, Section 1.61 of the Loan
Agreement is hereby deleted in its entirety and replaced with the following:
"1.61 "Maximum Credit" shall mean the amount equal to (a) $81,258,000 less
(b) the aggregate amount of payments and prepayments applied to the Term
Loan after the Closing Date."
(ii) Revolving Loan Limit. Effective as of the date hereof, Section 1.87 of
the Loan Agreement is hereby deleted in its entirety and replaced with the
following:
"1.87 "Revolving Loan Limit" shall mean the amount of $60,000,000."
(iv) Revolving Notes. All references to the "Revolving Notes" in the Loan
Agreement and the other Financing Agreements shall be deemed and each such
reference is hereby amended to mean, individually and collectively, the
Restated Congress Revolving Note and the Restated Transamerica Revolving Note.
2
(v) Term Notes. All references to the "Term Notes" in the Loan Agreement and
the other Financing Agreements shall be deemed and each such reference is
hereby amended to mean, individually and collectively, the Restated Congress
Term Note and the Restated Transamerica Term Note.
(vi) Term Loans. All references to the "Term Loans" herein and in the Loan
Agreement and the other Financing Agreements shall mean, individually and
collectively, the Obligations evidenced by the Restated Congress Term Note and
the Restated Transamerica Term Note.
2. Term Loan.
(a) Borrower hereby acknowledges, confirms and agrees that, as of the date
hereof and immediately before giving effect to this Amendment, the unpaid
balance of the Obligations evidenced by the Original Term Notes is the
principal amount of $11,913,862.83 (such principal amount, the "Existing Term
Loan Principal Balance"), plus interest accrued and accruing thereon and the
other costs and expenses payable under such note. On the date hereof, subject
to the terms and conditions contained herein, Agent, for the ratable account
of Lenders, is making an additional term loan to Borrower in the amount of
$9,344,137.17 (the "Additional Term Advance"), which (i) shall be consolidated
with the Existing Term Loan Principal Balance, and (ii) as so consolidated,
shall be evidenced by and, together with interest accrued and accruing thereon
and other costs and expenses, be payable pursuant to the terms of the Restated
Term Notes, the Loan Agreement and the other Financing Agreements, and shall
be secured by all of the Collateral.
(b) Neither the execution and delivery hereof, nor the consolidation of the
Existing Term Loan Principal Balance with the Additional Term Advance, nor the
amendment and restatement of the Original Term Notes pursuant to the
respective Restated Term Notes shall, in any manner, be construed to
constitute payment of, or impair, limit, cancel or extinguish, or constitute a
novation in respect of, any of the Obligations evidenced by or arising under
the Original Term Notes or any other Financing Agreements, and the liens and
security interests securing such Obligations shall not in any manner be
impaired, limited, terminated, waived or released.
(c) Borrower hereby requests that Lender credit the proceeds of the Additional
Term Advance to the Revolving Loan account of Borrower. Revolving Loans
hereafter made to Borrower by virtue of the availability arising from so
crediting such proceeds of the Additional Term Advance may, to the extent of
$4,000,000 thereof, be used by Borrower for Capital Expenditures, in addition
to any other amounts that may be used by Borrower to make Capital Expenditures
pursuant to the Loan Agreement. The balance of such Revolving Loan
availability so created with the proceeds of the Additional Term Advance shall
be used for working capital of Borrower or other proper corporate purposes of
Borrower not prohibited by the terms of the Financing Agreements.
3. Revolving Notes. In connection with the amendment reducing the Revolving
Loan Limit set forth in Section 1(b)(iii) hereof, Borrower shall execute and
deliver to the Lenders the Restated Revolving Notes. Neither the execution and
delivery hereof, nor the execution and delivery of the Restated Revolving
Notes, nor the amendment and restatement of the Original Revolving Notes
pursuant to the respective Restated Revolving Notes shall, in any manner, be
construed to constitute payment of, or impair, limit, cancel, or extinguish,
or constitute a novation in respect of, any of the Obligations evidenced by or
arising under the Original Revolving Notes or any other Financing Agreements,
and the liens and security interests securing such Obligations shall not in
any manner be impaired, limited, terminated, waived or released.
4. Tangible Net Worth Amendment. Effective as of December 31, 1997, Section
9.14 of the Loan Agreement is hereby deleted in its entirety and replaced with
the following:
"9.14 Tangible Net Worth. Borrower shall, at all times, maintain Tangible
Net Worth of not less than $50,000,000."
3
5. Term.
(a) The first sentence of Section 13.1(a) of the Loan Agreement is hereby
deleted in its entirety and replaced with the following:
"(a) This Agreement and the other Financing Agreements shall become
effective as of the date hereof and shall continue in full force and effect
for a term ending on November 1, 2000 (the "Renewal Date"), and from year-
to-year thereafter, unless sooner terminated in accordance with the terms
hereof."
(b) The first sentence of Section 13.1(c) of the Loan Agreement is hereby
amended by replacing the table appearing in such sentence with the following
table:
"Amount Period
------- ------
$862,500 September 13, 1997 to and
including September 12, 1998
$300,000 September 13, 1998 to and
including September 12, 1999
$150,000 September 13, 1999 to but not
including November 1, 2000"
6. Consents to Proposed Sales of Certain Real Property.
(a) Borrower has informed Agent and Lenders that it proposes to sell certain
of its Real Property as follows: Borrower's Real Property located in
Abbeville, South Carolina as described in Exhibit A hereto (the "Abbeville
Property"), Borrower's Real Property located in Juliette, Georgia as described
on Exhibit B hereto (the "Camellia Property"), and Borrower's Real Property
located in Rockingham, North Carolina as described on Exhibit C hereto (the
"Xxxxxx Xxxxxxx Property"; and together with the Abbeville Property and the
Camellia Property, the "Subject Properties") pursuant to purchase contracts to
be entered into between Borrower and the purchaser (each a "Proposed Property
Sale").
(b) Agent and Lenders hereby consent to the Proposed Property Sales and agree
that, upon the closing of each such Proposed Property Sale, Agent shall
execute and deliver release or termination instruments or documents to
evidence the release of the lien and security interest in the Real Property
with respect to the respective Real Property so sold; provided, that:
(i) notwithstanding anything to the contrary set forth herein or in the Loan
Agreement or any of the other Financing Agreements,
(A) all of the net proceeds of the sale of the Abbeville Property and of the
sale of the Camellia Property shall be remitted to Agent for application to
the Obligations as follows: (1) in the case of the Abbeville Property, the
first $1,200,000 thereof, and, in the case of the Camellia Property, the first
$5,000,000 thereof, shall be applied to the unpaid principal installments
under the Term Loan in the inverse order of the maturities thereof, and (2)
the balance of the net proceeds of the sale of each of the Abbeville Property
and Camellia Property shall be applied to the Obligations in respect of
Revolving Loans of Borrower; and
(B) all of the net proceeds of the sale of the Xxxxxx Xxxxxxx Property shall
be remitted to Agent for application to the Obligations in respect of
Revolving Loans of Borrower;
(ii) the net proceeds of the sale of the Subject Properties shall be not less
than the following amounts: (A) in the case of the Abbeville Property, an
amount not less than $600,000, (B) in the case of the Camellia Property, an
amount not less than $5,000,000 , and (C) in the case of the Xxxxxx Xxxxxxx
Property, an amount not less than $350,000;
(iii) contemporaneously with the delivery of the release instruments for each
Proposed Property Sale, arrangements satisfactory to Agent shall be made for
all of the net proceeds of each Proposed Property Sale to be paid to Agent by
wire transfer of immediately available funds to the Payment Account;
4
(iv) the closing of each of the Proposed Property Sales shall occur by no
later than December 31, 1998, and no Event of Default, or event or condition
that would with notice or passage of time, or both, constitute an Event of
Default, shall exist or have occurred and be continuing, as of the date of
each such closing;
(v) the security interests in and the liens upon the Subject Property held by
Agent for itself and the ratable benefit of Lenders shall, upon closing of
each respective Proposed Property Sale, and notwithstanding the execution and
delivery by Agent of any release instruments or documents, continue in the net
proceeds of such Proposed Property Sale, until their application to the
Obligations as provided herein;
(vi) Agent shall have received, at least fifteen (15) days prior to the
applicable proposed closing date, written notice thereof, together with true,
correct and complete copies of all agreements, documents and instruments to be
executed and/or delivered in connection with each Proposed Property Sale, each
in form and substance satisfactory to Agent, and, upon the closing, copies
each of such agreements, documents and instruments duly authorized, executed
and delivered by the parties thereto; and
(vii) Arrangements satisfactory to Agent shall be made prior to the closing of
each Proposed Property Sale with respect to any Inventory, Equipment or other
personal Property of Borrower ("Personal Property") proposed to remain on the
respective Subject Property after the closing of the sale of such Subject
Property, and also with respect to any Personal Property that is proposed,
subject to Agent's prior written consent, to be removed therefrom or otherwise
disposed of in connection with such Proposed Property Sale; such arrangements
shall, at Agent's option, include, without limitation, the delivery to Agent
of written acknowledgments, access agreements and lien waivers in favor of
Agent and Lenders, duly authorized and executed by the buyers, lessees,
mortgagees, any warehouseman or other third parties having an interest in or
possession of the Subject Property or having possession of any of the Personal
Property, as may be required by Agent or Lenders to ensure that Agent will
have access to the Personal Property (and the Subject Property or other
premises while the Personal Property is located thereon), to protect and
preserve the security interests and liens of Agent and Lenders in the Personal
Property and to facilitate the exercise by Agent and Lenders of their rights
and remedies against the Personal Property.
7. Sale and Leaseback Equipment; Equipment Use Agreement.
(a) Borrower has informed Agent and Lenders that it proposes to enter into a
sale and leaseback transaction with MDFC Equipment Leasing Corporation
("MDFC") with respect to certain Equipment presently owned by Borrower, as
more fully described on Exhibit D annexed hereto. Agent and Lenders hereby
consent to such sale and leaseback, subject to the agreement by MDFC to permit
Agent and Lender access to, and the right to use and/or permit Borrower to use
the subject leased Equipment for a period of at least sixty (60) days
following (and notwithstanding) termination of the lease after notice to
Agent, upon such payment and other terms and conditions and in such form as
shall be satisfactory to Agent and Lenders.
(b) With respect to all Equipment used in the operations of Borrower and first
leased by Borrower after the date hereof, whether by MDFC as lessor or any
other lessor, whether in the form of a true lease or a Capital Lease or
otherwise, and also with respect to all Equipment used in the operations of
Borrower that is acquired after the date hereof and financed through a
purchase money security interest (in each case, to the extent otherwise
permitted under the Loan Agreement), Borrower agrees to cause the Equipment
lessor or holder of such purchase money security interest to enter into an
equipment use agreement in favor of Agent and Lenders as described in Section
7(a) hereof, upon such payment and other terms and conditions and in such form
as shall be satisfactory to Agent and Lenders.
8. Change of Chief Executive Office. Borrower's chief executive office has
been changed, and the address for giving notices to Borrower pursuant to
Section 13.2 of the Loan Agreement or any similar provision of any of the
other Financing Agreements is hereby amended to be the following:
The Xxxx Company
000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
5
Notwithstanding the foregoing, the giving of any notice to Borrower at 000
Xxxxxxxx Xxxxxx, Xxxxx, Xxxxxxx 00000, as previously specified for notices in
the Loan Agreement or any other Financing Agreement, shall nevertheless
constitute an alternative means of giving sufficient notice to Borrower so
long as Borrower maintains an office or facility at such other address.
9. Representations, Warranties and Covenants. Borrower represents, warrants
and covenants with and to Lender as follows, which representations, warranties
and covenants are continuing and shall survive the execution and delivery
hereof, the truth and accuracy of, or compliance with each, together with the
representations, warranties and covenants in the other Financing Agreements,
being a condition of the effectiveness of this Amendment and a continuing
condition of making or providing the Additional Term Advance and any Revolving
Loans or Letter of Credit Accommodations by Agent on behalf of Lenders as
provided in the Loan Agreement:
(a) This Amendment and each other agreement or instrument to be executed and
delivered by Borrower hereunder has been duly authorized, executed and
delivered by all necessary action on the part of Borrower, and is in full
force and effect as of the date hereof, and the agreements and obligations of
Borrower contained herein and therein constitute legal, valid and binding
obligations of Borrower enforceable against it in accordance with their terms.
(b) Neither the execution and delivery of this Amendment or any of the
agreements, documents or instruments to be delivered pursuant to this
Agreement (i) has violated or shall violate any law or regulation or any order
or decree of any court or governmental instrumentality in any respect, or (ii)
does or shall conflict with or result in the breach of, or constitute a
default in any respect under any mortgage, deed to secure debt, deed of trust,
security agreement, agreement or instrument to which Borrower is a party or
may be bound, or (iii) shall violate any provision of the Certificate of
Incorporation or By-Laws of Borrower.
(c) No action of, or filing with, or consent of any governmental or public
body or authority, other than the recording of the Mortgages executed and
delivered to Agent pursuant to this Amendment, and no approval or consent of
any other party, is required to authorize, or is otherwise required in
connection with, the execution, delivery and performance of this Amendment and
each other agreement or instrument to be executed and delivered pursuant to
this Amendment.
(d) All of the representations and warranties set forth in the Loan Agreement,
as amended hereby, and in the other Financing Agreements, are true and correct
in all material respects after giving effect to the provisions of this
Amendment, except to the extent any such representation or warranty is made as
of a specified date, in which case such representation or warranty shall have
been true and correct as of such date.
(e) After giving effect to the provisions of this Amendment, no Event of
Default, or event or condition that would with notice or passage of time, or
both, constitute an Event of Default, exists or has occurred and is
continuing.
10. Conditions Precedent. The effectiveness of the amendments and consent
contained herein shall be subject to the satisfaction of each of the following
conditions:
(a) the receipt by Agent of an original of this Amendment, duly authorized,
executed and delivered by Borrower and each of Lenders:
(b) Borrower shall have delivered to Agent, in form and substance satisfactory
to Lenders, each of the following agreements, duly authorized, executed and
delivered by the parties thereto:
(i) an original of each of the Restated Congress Term Note, the Restated
Transamerica Term Note, the Restated Congress Revolving Note and the Restated
Transamerica Revolving Note;
6
(ii) an original Mortgage Modification Agreement, dated of even date herewith,
between Borrower and Agent with respect to the Mortgages covering the Real
Property of Borrower located in the State of South Carolina;
(iii) an original Amendment No. 1 to Deed of Trust, Assignment of Rents and
Leases and Security Agreement, dated of even date herewith, between Borrower
and Agent with respect to each of the Mortgage covering the Real Property of
Borrower located in the Commonwealth of Virginia;
(iv) an original Amendment No. 1 to Deed of Trust and Security Agreement,
dated of even date herewith, among Borrower, Xxxxxxx X. Xxxxxx, as trustee,
and Agent with respect to the Mortgages covering the Real Property located in
the State of North Carolina; and
(v) an original Amendment No. 1 to Deed to Secure Debt and Security Agreement,
dated of even date herewith, between Borrower and Agent with resect to
Mortgages covering the Real Property of Borrower located in the State of
Georgia;
(c) Agent shall have received, in form and substance satisfactory to Agent,
Secretary's Certificates of Directors' Resolutions evidencing the adoption and
subsistence of corporate resolutions approving the execution, delivery and
performance by Borrower of this Amendment and the agreements, documents and
instruments to be delivered pursuant to this Amendment;
(d) Agent shall have received, in form and substance satisfactory to Agent, at
Borrower's expense, updated endorsements to the existing title insurance
policies or new title insurance policies issued by Lawyers Title Insurance
Corporation or other title insurance company acceptable to Agent and Lenders
(i) insuring the priority, amount and sufficiency of the Mortgages made by
Borrower, as amended, and (ii) containing any legally available endorsements,
assurances or affirmative coverage requested by Agent or Lenders for
protection of the interests of Agent and Lenders; and
(e) Borrower and Guarantors shall deliver, or cause to be delivered, to
Lenders a true and correct copy of each consent, waiver or approval with
respect to this Amendment or any of the instruments or agreements executed and
delivered pursuant to this Amendment, that Borrower obtains from any other
Person, and which such consent, approval or waiver shall be in form and
substance acceptable to Lenders.
11. Effect of this Amendment.
(a) Entire Agreement; Ratification and Confirmation of the Financing
Agreements. This Amendment contains the entire agreement of the parties with
respect to the subject matter hereof and supersedes all prior or
contemporaneous term sheets, proposals, discussions, negotiations,
correspondence, commitments and communications between or among the parties
concerning the subject matter hereof. This Amendment may not be modified or
any provision waived, except in writing signed by the party against whom such
modification or waiver is sought to be enforced. No Events of Default have
been or are being waived hereby and, except as specifically amended pursuant
hereto, the Financing Agreements are hereby ratified, restated and confirmed
by the parties hereto as of the effective date hereof. To the extent of
conflict between the terms of this Amendment and the other Financing
Agreements, the terms of this Amendment shall control.
(b) Governing Law. This Amendment and the rights and obligations hereunder of
each of the parties hereto shall be governed by and interpreted and determined
in accordance with the laws of the State of Georgia.
(c) Binding Effect. This Amendment shall be binding upon and inure to the
benefit of each of the parties hereto and their respective successors and
assigns.
7
(d) Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one
and the same agreement. In making proof of this Amendment it shall not be
necessary to produce or account for more than one counterpart thereof signed
by each of the parties hereto.
By the signatures hereto of their duly authorized officers, each of the
parties hereto covenants and agrees as set forth herein.
Very truly yours,
CONGRESS FINANCIAL CORPORATION (SOUTHERN),
as Agent and Lender
/s/ Xxxxxx X. Xxxxxxxx
By: ________________________________________
Xxxxxx X. Xxxxxxxx
Title: First Vice President
TRANSAMERICA BUSINESS CREDIT CORPORATION,
as Lender
/s/ Xxx Xxxxxx
By: ________________________________________
Xxx Xxxxxx
Title: Senior Account Executive
AGREED AND ACCEPTED:
THE XXXX COMPANY
/s/ Xxxxxxx X.Xxxxxxxx
By: _____________________________
Xxxxxxx X. Xxxxxxxx
Title: Vice President
8
