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First Union National Bank
of Georgia
0000 Xxxxxxx Xxxxxxxx Xxxx
Xxxxxxx Xxxxxxx 00000
000 000-0000
Fax 000 000-0000
EXHIBIT 10 (r)
LETTER AGREEMENT
December 8, 1995
Xxxxx Enterprises, Inc.
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, XX 3009
Attention: Xx. Xxxxx X. Xxxxxxxx, Xx.
Vice President-Finance Treasurer and Chief Financial Officer
Dear Xxxx:
First Union National Bank of Georgia (the "Issuer") has agreed to issue the
letter of credit described below for the account of Xxxxx Enterprises, Inc., a
Delaware corporation (the "Applicant"), pursuant to the terms and conditions
of that certain Application and Agreement for Standby Letter of Credit dated as
of even date herewith (the "Application"), as supplemented by the terms and
conditions of this letter agreement (this "Letter Agreement"). By your
execution below, you acknowledge that the Issuer is issuing the letter of
credit described below in express reliance on the terms hereof which are in
addition to, and not in lieu of the terms of the Application.
The terms of the letter of credit are as follows:
Facility: Irrevocable Standby Letter of Credit, issued in the form
attached as Exhibit "A" (the "Letter of Credit");
Amount: $11,803,914.56 (Eleven million, eight hundred and three
thousand, nine hundred and fourteen dollars and 56/100);
Issuer: First Union National Bank of Georgia;
Applicant: Xxxxx Enterprises, lnc.
Term: The letter of credit will expire at the counters of First
Union National Bank of Georgia, Two First Union Center,
T-7, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, XX 00000 on January
1, 1997;
Participation: A risk participation in the letter of credit may be made to
SunTrust Bank, Atlanta, Wachovia Bank of Georgia, N.A., and
Fleet Bank of Maine at the Applicant's request (prior to or
simultaneous with issuance), in an aggregate amount not to
exceed $6 million;
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L/C Fee: The letter of credit fee shall be 0.5% per annum, payable in
advance upon issuance, for the entire term of the letter of
credit, calculated upon an actual/actual day count. In the
event risk participations are made as contemplated above, the
participating banks (and the Issuer, on its participating
portion) shall receive 0.45% on the face amount of the
participation, calculated as above, and the Issuer shall
receive 0.05% on the amount of the letter of credit.
Reimbursement Obligation:
The reimbursement obligation of the Applicant shall be governed
by the Application.
Documentation:
As a condition precedent to Issuer's obligation to issue the Letter of Credit,
the Applicant shall deliver the following documents prior to such issuance,
duly executed by the parties thereto:
The Application (Section 7, Security Agreement to be deleted).
Participation Agreement(s) in a form satisfactory to the
Applicant, the Issuer and the participating banks (Form
attached as Exhibit "B").
Opinion of Applicant's counsel that Applicant has the right,
power, and authority to enter into this transaction and
perform all obligations hereunder, that Applicant is duly
authorized, and the documents executed by Applicant as a part
of this transaction are valid, binding, and legally
enforceable in accordance with their respective terms.
This Letter Agreement executed by Applicant.
Financial Covenants:
As long as the Letter of Credit shall remain outstanding or the Applicant shall
have any obligation to the Issuer under the Application or this Letter
Agreement, the Applicant shall:
Maintain a ratio of Consolidated Funded Debt to Total
Capitalization equal to or less than 0.6:1.0, measured as of
the last day of each fiscal quarter of the Applicant.
Maintain an lnterest Coverage Ratio equal to or greater
than 2.0:1.0, measured as of the last day of each fiscal quarter
of Applicant for the immediately preceding four fiscal
quarters ending on such date.
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Maintain a ratio of (i) Consolidated Funded Debt to
(ii) Consolidated EBITDA equal to or less than 3.5:1.0,
measured as of the last day of each fiscal quarter of the
Applicant, and in the case of Consolidated EBITDA, calculated
for the immediately preceding four fiscal quarters ending on
such date.
All capitalized terms used in these Financial Covenants shall have the meaning
ascribed to such terms in that certain Credit Agreement, dated as of November 6,
1995 (the "SunTrust Agreement"), by and among Applicant, SunTrust Bank,
Atlanta, as Agent, and the lenders party thereto (the "Lenders").
Financial Reporting:
As long as the Letter of Credit shall remain outstanding or the Applicant shall
have any obligation to the Issuer under the Application or this Letter
Agreement, the Applicant shall:
Furnish to the Issuer all documents, reports, filings,
and certificates required under Section 6.07 (Financial
Reporting) of the SunTrust Agreement, as and when furnished to
the Lenders thereunder.
Events of Default:
In addition to the Events of Default set forth in the
Application, the Applicant and the Issuer expressly agree that
the following events shall also constitute "Events of Default"
pursuant to the Application:
(a) the occurrence of an "Event of Default" pursuant to
the terms of the SunTrust Agreement; and
(b) the failure of the Applicant to comply with the
terms and conditions of this Letter Agreement.
Remedies:
Upon the occurrence and during the continuance of an
Event of Default under the Application, as supplemented by this
Letter Agreement, in addition to the rights and remedies
afforded pursuant to the Application, at law or in any other
document related hereto, the parties expressly agree that the
Letter of Credit shall be deemed to have been drawn in full,
and the Applicant shall immediately reimburse to the lssuer the
full amount of such deemed drawing, together with any other
amounts owing
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hereunder or pursuant to the Applications in U.S.
Dollars, which amount shall be held by the Issuer as cash
collateral for Applicant's obligations pursuant to the
Application and this Letter Agreement. Such collateral shall be
held by Issuer for the pro-rata benefit of the Issuer and
participating banks. In the event that the Letter of Credit
expires or terminates without draw, such amount shall be
immediately returned to the Applicant, together with the
interest thereon.
Miscellaneous:
(a) This Letter Agreement shall be governed by the laws
of the State of Georgia.
(b) This Letter Agreement is incorporated into the
Application and expressly made a part thereof.
(c) All references to the SunTrust Agreement refer to
such agreement as of the date hereof. The portions of the
SunTrust Agreement referenced herein are expressly incorporated
into this Agreement by such reference and shall survive the
termination and repayment of the SunTrust Agreement.
(d) This Letter Agreement may only be amended or
modified by a writing signed by both parties, and in accordance
with the terms of any Participation Agreement then in effect.
(e) This Letter Agreement shall be binding upon the
successors and assigns of the Applicant and inure to the
benefit of the successors and assigns of the Issuer.
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If these terms and conditions are acceptable to you, please indicate your
acceptance by executing a copy of this Letter Agreement in the space below, and
return a copy to me.
Sincerely,
FIRST UNION NATIONAL BANK OF GEORGIA
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Senior Vice President
First Union National Bank of Georgia
ACCEPTED AND AGREED TO
BY:
XXXXX ENTERPRISES, INC.
By: /s/ Xxxx X. Xxxxx, Xx.
---------------------------------
Its: Executive Vice President &
Chief Operating Officer
---------------------------------
Date: 12-3-95
---------------------------------
Attest: /s/ Xxxxx X. Xxxxxxxx, Xx.
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Its: V.P. Finance, Treasurer, CFO
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Date: 2-8-95
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