FIFTH AMENDMENT TO LINE OF CREDIT AND TERM LOAN AGREEMENT
This Fifth Amendment to Line of Credit and Term Loan Agreement ("Fifth
Amendment" or "Amendment") is made this 11th day of June, 1997, by and among
XXXXXXXX'X, INC. OF ALABAMA, an Alabama corporation ("Xxxxxxxx'x Alabama"),
XXXXXXXX'X, INC. OF FLORIDA, a Florida corporation ("Xxxxxxxx'x Florida")
(Xxxxxxxx'x Alabama and Xxxxxxxx'x Florida are sometimes herein together called
"Borrower"), and CORESTATES BANK, N.A., a national banking association ("Bank").
BACKGROUND
Xxxxxxxx'x Alabama and Bank have entered into various agreements,
documents and instruments, including, without limitation, a Line of Credit and
Term Loan Agreement dated April 8, 1993, an Amendment to Line of Credit and Term
Loan Agreement dated December 10, 1993, a Second Amendment to Line of Credit and
Term Loan Agreement dated November 10, 1994, and a Third Amendment to Line of
Credit and Term Loan Agreement dated December 11, 1995, and a Fourth Amendment
to Line of Credit and Term Loan Agreement dated February 28, 1996 under which
Fourth Amendment Xxxxxxxx'x Florida agreed to become jointly and severally
liable with Xxxxxxxx'x Alabama to the Bank under and with respect to the
Agreement, and various other documents providing for loans from Bank to Borrower
(all of which agreements, documents and instruments are hereinafter collectively
called the "Agreement"), with such loans being evidenced by a Third Amended and
Restated Term Loan Note dated February 28, 1996 (the "Note"). Xxxxxxxx'x
Alabama, Xxxxxxxx'x Florida and Bank desire to amend the Agreement, it being the
intention of the parties that this Fifth Amendment set forth such amendments, to
provide, among other things, for the establishment of a new line of credit
facility, to be evidenced by a New Line of Credit Note, and a new term loan
facility, to be evidenced by a New Term Loan Note, and each of which shall be
subject to the terms and conditions set forth in the Agreement as amended by
this Fifth Amendment.
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the parties hereto, intending to be legally bound, hereby agree as
follows:
1. Amendment to Agreement; Definition of Terms. This Fifth Amendment is
intended to amend the Agreement and the Agreement shall be so amended from and
after the date hereof. This Amendment does not constitute an extinguishment of
any debt evidenced by the Note nor does it affect or impair any Collateral which
may hereafter be held by Bank to secure payment by Xxxxxxxx'x Alabama or
Xxxxxxxx'x Florida of liabilities to Bank under the Agreement or the Note. All
terms used herein as
defined terms shall have the same meanings ascribed to them in the Agreement,
unless herein provided to the contrary.
2. Amendment to Agreement.
"(a) A new Section 2.07B is added to the Agreement to read in its
entirety as follows:
SECTION 2.07B.1. Line of Credit. The Bank agrees on the terms and
conditions hereinafter set forth to make available to the Borrower a line of
credit in the amount of Six Million Dollars ($6,000,000) (the "New Line") for
Advances by the Borrower in connection the acquisition by Xxxxxxxx'x, Inc., a
Pennsylvania corporation (Xxxxxxxx'x, Inc."), of shares of its capital stock
from time to time in connection with its issuer tender offer under Section 13e-3
under the Securities Exchange Act of 1934, as amended (the "Issue Tender Offer")
and thereafter up to and including July 15, 1997; provided, however, that no
Advances under the New Line may be made by the Borrower after July 15, 1997 and
the Borrower shall not request and the Bank shall not be required to grant, any
extension of credit under the New Line that would cause the total of outstanding
Advances at any time to exceed Six Million Dollars ($6,000,000).
SECTION 2.07B.2 New Line of Credit Note. Concurrently with the
execution of this Fifth Amendment, the Borrower shall execute and deliver to the
Bank a note in the form attached hereto as Exhibit "A" (the "New Line of Credit
Note") as evidence of Advances under the New Line. The provisions of the New
Line of Credit Note are incorporated herein. The total amount of the Advances
and of each payment of principal, if any, and interest received by the Bank on
account of the New Line shall be evidenced by the Bank's records, which shall,
in the absence of manifest error, be conclusive as to the outstanding balance
under the New Line and interest thereon. Any principal amount of any Advance
under the New Line repaid by the Borrower to the Bank shall not again be subject
to any subsequent Advance, it being the intention of the Borrower and the Bank
that the New Line shall not be a revolving credit facility.
SECTION 2.07B.3 Notice and Manner of Borrowing. The Borrower shall
give the Bank written or telecopier notice (effective upon receipt) of an
Advance under this Section 2.07B on the date of the Advance. Not later than
12:00 p.m Philadelphia time on the date of such request for an Advance and upon
fulfillment of any applicable conditions, the Bank will make such Advance
available to the Borrower in immediately available funds by crediting the amount
thereof on the Borrower's account with the Bank.
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SECTION 2.07B.4 Mandatory and Optional Prepayments. If at any time
the aggregate unpaid principal balance of all Advances under the New Line
exceeds $6,000,000, the Borrower shall immediately prepay such portion of the
principal amount outstanding in an amount sufficient to reduce the aggregate
unpaid principal balance to an amount which is not greater than $6,000,000.
Subject to Section 2.06A.2, the Borrower at its option, upon at least one (1)
Business Day's notice to the Bank, prepay the New Line of Credit Note in whole
or in part with accrued interest to the date of such prepayment on the amount
prepaid.
SECTION 2.07B.5 Termination of New Line; Conversion to New Term
Loan. The New Line shall terminate on July 15, 1997, and the Borrower shall not
request and the Bank shall not be required to grant, any extension of credit
under the New Line after July 15, 1997. So long as no Event of Default has
occurred and is continuing, on July 15, 1997, without any further action on the
part of the Bank and the Borrower, the New Line shall be automatically converted
into and become, and the Bank shall be deemed to have extended to the Borrower,
a term loan (the "New Term Loan") in the principal amount equal to the unpaid
principal amount outstanding on the New Line at July 15, 1997, to be repaid as
provided in the New Term Loan Note.
SECTION 2.07B.6 Substitution of New Term Loan Note for New Credit
Line Note. On July 15, 1997, the Borrower shall execute and deliver to the Bank
a note in the form attached hereto as Exhibit "B" (the "New Term Loan Note") as
evidence of Term Loan. The New Term Loan Note shall be issued in substitution of
the New Line of Credit Note, and from and after July 15, 1997, the payment of
the unpaid principal amount outstanding under the New Line shall be governed by
the terms of the New Term Loan Note; provided, however, that the substitution of
the New Term Loan Note for the New Line of Credit Note as aforesaid shall not be
intended to repay the New Line of Credit Note or constitute an extinguishment of
any debt evidenced by the New Line of Credit Note. The provisions of the New
Term Loan Note are incorporated herein by reference.
SECTION 2.07B.7. Interest on the New Line of Credit Note and the New
Term Loan Note.
(a) Commencing on the date of the first Advance under the New
Line, the Advance shall be a Prime-Based Advance. Immediately thereafter,
Borrower may elect from time to time to convert all or a portion of the
principal amount outstanding under the New Line and New Term Loan into
Prime-Based Advances or LIBOR-Based Rate Advances; provided, however, that (i)
no more than four (4) portions (tranches) of principal of
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LIBOR-Based Rate Advances may be outstanding at any one time; (ii) if Borrower
fails to elect to convert a LIBOR-Based Rate Advance prior to the end of the
Interest Period applicable to such LIBOR-Based Rate Advance, such LIBOR-Based
Rate Advance shall be automatically converted into a Prime-Based Advance; and
(iii) no Interest Period for any LIBOR-Based Rate Advance may end beyond the
Maturity Date of the New Term Loan Note.
(b) The Borrower shall give the Bank notice of its election to
convert any principal portion of the New Line or New Term Loan into a
Prime-Based Rate Advance or LIBOR-Based Rate Advance no later than 12:00 noon
(Philadelphia, Pennsylvania time) on the date which is one Business Day prior to
the date on which any selection is to become effective stating (i) the Advance
or Advances selected; (ii) the principal amount of each Advance and (iii) the
Interest Period of each LIBOR Based-Rate Advance.
(c) Interest on the unpaid principal amount under the New Line
shall commence to accrue on the date of the first Advance and shall be due and
payable on July 15, 1997; provided, however, that interest on any LIBOR-Based
Rate Advance shall be due and payable at the end of the Interest Period
applicable to such LIBOR-Based Rate Advance, but if the applicable Interest
Period expires after July 15, 1997, then on July 15, 1997.
(d) Interest on the New Term Loan shall be due and payable on a
quarter annual basis commencing September 1, 1997; provided, however, that
interest on any LIBOR-Based Rate Advance shall be due and payable at the end of
the Interest Period applicable to such LIBOR-Based Rate Advance, and if the
applicable Interest Period is greater than ninety (90) days, then on the day
which is ninety days after the first day of such Interest Period.
(e) The provisions of Section 2.06A.2, as amended by this Fifth
Amendment, shall apply to LIBOR-Based Rate Advances under the New Line and the
New Term Loan."
(b) Section 2.06A.2 of the Agreement shall be amended (i) by adding the
phrase "or Section 2.07B.7" after the term "Section 2.06A.1 in subsection
2.06A.2(a)(i) thereof, and (ii) by adding the phrase "or the New Line or the New
Term Loan" after the words "Term Loan" wherever used therein.
3. Representations, Warranties and Covenants. All representations,
warranties and covenants of Borrower contained in the Agreement are hereby
ratified and confirmed without
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condition as if made anew upon the execution of this Fifth Amendment and are
hereby incorporated by reference.
4. Certification of No Default. Borrower hereby represents and warrants
to Bank that, as to the date of the execution of the Fifth Amendment, no Event
of Default under the Agreement and no event, which with the giving of notice or
passage of time, or both, could become such an Event of Default has occurred.
5. Reaffirmation of Guaranty. Xxxxxxxx'x, Inc. has executed and
delivered to Bank its Guaranty, dated February 28, 1996, guarantying the payment
and performance of the liabilities of Borrower to Bank. Xxxxxxxx'x, Inc. hereby
acknowledges that Borrower's liabilities to Bank, as defined in said Guaranty,
shall mean and include all liabilities of Borrower to Bank under the Agreement
and Fifth Amendment and the New Line of Credit Note and New Term Loan Note
delivered in connection herewith.
6. Miscellaneous. Except as modified by the terms hereof, all terms,
provisions, and conditions of the Agreement are hereby ratified and confirmed
without condition, shall continue in full force and effect, and are hereby
incorporated herein by reference. This Fifth Amendment and the Agreement shall
be deemed as complementing one another and not restricting Bank's rights
hereunder or thereunder. If there is any conflict or discrepancy between the
provisions of this Fifth Amendment and those of the Agreement, the terms and
provisions of this Fifth Amendment shall control and prevail.
7. Effectiveness of Amendment. Anything to the contrary contained in
this Fifth Amendment notwithstanding, the provisions hereof shall not be
effective until this Fifth Amendment is: (a) duly executed, sealed and delivered
by authorized officers of Borrower to Bank's office in Philadelphia,
Pennsylvania; and (b) duly signed by an authorized officer of Bank.
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IN WITNESS WHEREOF, the parties hereto have caused this Fifth Amendment
to be executed and delivered by the proper and duly authorized officers as of
the day and year first written above.
XXXXXXXX'X, INC. OF ALABAMA
By: /s/ Xxxxxx X. Xxxxxxx
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Title: Vice President-Finance
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XXXXXXXX'X INC. OF FLORIDA
By: /s/ Xxxxxx X. Xxxxxxx
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Title: Vice President-Finance
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CORESTATES BANK, N.A.
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
Vice President
Guarantor Acknowledgement: (affix corporate seal)
XXXXXXXX'X, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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Title: Vice President-Finance
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