AMENDMENT TO CREDIT AGREEMENT
This Amendment to Credit Agreement, dated April 30, 1997, is made by and between
S&K Famous Brands, Inc., a Virginia corporation (the "Company") and Crestar
Bank, a Virginia corporation (the "Bank").
The Bank and the Company are parties to a Credit Agreement (the "Agreement"),
dated as of March 10, 1994. The Company has asked the Bank to extend the
maturity of the Revolving Loans, increase the commitment amount and make other
changes to the Agreement, as hereinafter provided.
Now, therefore, for good and valuable consideration, the Company and the Bank
agree as follows:
Section 1. Definitions and Confirmation. Unless otherwise specifically defined
herein, each term used will have the meaning defined in the Agreement. Except as
amended herein, all of the terms of the Agreement shall remain and continue in
full force and effect and are hereby confirmed in all respects.
Section 2. Amendments to the Credit Agreement. The following Sections of the
Agreement are deleted in their entirety and are substituted therefor to read in
full as follows:
2.1 Commitment to Lend. Subject to the terms and conditions of this
Agreement, the Bank agrees to make Revolving Loans ("Revolving Loans") to the
Company from time to time until maturity of the Revolving Note as defined in
Section 2.4, up to the maximum outstanding principal amount at any one time
outstanding of Sixteen Million Dollars ($16,000,000) from the date hereof to and
including May 31, 2000, such amount being hereafter called the "Commitment."
Revolving Loans may be designated as Floating Rate Loans (Section 2.5) or
Negotiated Rate Loans (Section 2.2). The Company may borrow, repay, and reborrow
the maximum annual permitted principal amount of the Commitment.
2.3 Maturity of Loans. Each Revolving Loan shall mature, and the
principal amount thereof shall be due and payable on the last day of the
Interest Period applicable thereto, but in no event shall a Revolving Loan
mature later than May 31, 2000, when the Commitment expires in accordance with
the terms of the Revolving Note as defined in Section 2.4.
2.4 Revolving Note; Interest Payments. The Revolving Loans shall be
evidenced by a single note in the form of Exhibit A attached hereto (the
"Revolving Note") maturing on May 31, 2000. The Company agrees to deliver to the
Bank the Revolving Note in the principal amount of Sixteen Million Dollars
($16,000,000) , representing the obligation of the Company to pay the aggregate
unpaid principal amount of all Revolving Loans from time to time made by the
Bank. Accrued interest on the Revolving Note shall be paid monthly on the last
day of the month, regardless of the Interest Period or Interest Periods
selected, or at maturity, whichever is sooner.
2.5(a). Interest Rate Option A. For a Federal Funds Rate Loan at a rate
per annum equal to the Federal Funds Rate plus 0.75%.
2.7. Commitment Fee. The Company shall pay to the Bank an annual
commitment fee in an amount equal to the product of the annual Commitment amount
multiplied by .125% (.00125). The commitment fee shall be paid in equal
quarterly installments on the last day of each quarter commencing June 30, 1997
through maturity. For the purpose of prorating the amount of commitment fee due,
a quarter shall be deemed to consist of 91 days.
3.1 Amount. The Bank agrees to make a Term Loan (the "Term Loan") to
the Company on May 31, 2000, in a principal amount equal to the principal amount
of the Revolving Note outstanding on such date, or any part thereof as specified
by the Company.
3.3 Term Note. On May 31, 2000, the Company shall deliver to the Bank a
note in the form of Exhibit B attached hereto (the "Term Note") dated such date
and in a principal amount equal to the principal amount of the Term Loan to be
made by the Bank. The principal of the Term Note shall be paid in forty-seven
consecutive equal monthly installments each payable on the last day of each
month commencing June 30, 2000 with a final installment due on May 31, 2004,
when the unpaid principal amount and the accrued and unpaid interest on the Term
Note shall be payable in full.
3.4 Interest. The Term Note shall bear interest calculated in
accordance with Section 9.5 from the date thereof on the unpaid principal
balance from time to time outstanding at an interest rate per annum equal to the
Company's option of: (a) a rate floating at the Prime Rate with any change in
such interest rate being effective as of the date the Prime Rate is changed, (b)
a rate floating at the Interest Rate Option A as defined in Section 2.5(a), or
(c) at the following fixed interest rates: (i) if the Ratio calculated in
Section 7.1.5 is lesser than or equal to .75 then at the interest rate per annum
equal to the Index, as hereafter defined, plus 1.00%, (ii) if the Ratio
calculated in Section 7.1.5 is greater than .75 but less than or equal to 1.00
then at a interest rate per annum equal to the Index plus 1.25% and (iii) if the
Ratio calculated in Section 7.1.5 is greater than 1.00 but less than or equal to
1.25 then at an interest rate per annum equal to the Index plus 1.50%. The Ratio
calculated in accordance with Section 7.1.5 as used in this Section shall be
determined as of the most recent fiscal year end of the Company prior to the
execution date of the Term Note. The "Index" is defined as the interest rate
prevailing as of the execution date of the Term Note for a U. S. Government
security with a maturity of 30 months. Accrued interest on the Term Note shall
be paid monthly on the last day of each month commencing June 30, 2000 and at
its maturity.
6.5 Financial Statements. The financial statements of the Company
contained in the Company's Form 10-K Annual Report for the fiscal year ended
January 30, 1997 and in the Company's 10-Q Quarterly Report for the fiscal
quarter ended October 30, 1996 filed with the Securities and Exchange
Commission, copies of which have been heretofore delivered to the Bank, were
prepared in accordance with generally accepted accounting principles in effect
on the dates such statements were prepared and fairly present the financial
condition of the Company at the dates of such statements and the results of its
operations for the periods then ended. No material adverse change in the
condition of the Company as shown on such financial statements has occurred
since the dates thereof.
7.1.3 Minimum Consolidated Tangible Net Worth. Maintain minimum
Consolidated Tangible Net Worth at all times in an amount that is not less than
90% of the Consolidated Tangible Net Worth as of the end of the fiscal year
ended January 25, 1997. The minimum Consolidated Tangible Net Worth is to be
increased on each fiscal year end thereafter by an amount equal to 80% of the
Company's positive net income for the fiscal years ended after January 25, 1997.
The minimum Consolidated Tangible Net Worth will not be adjusted for any net
loss reported by the Company.
7.2.5 Inspection. Permit the Bank by its representatives and agents and
at its expense, to inspect any of the properties, corporate books and financial
records of the Company and each Subsidiary, to examine and make copies of the
books of accounts and other financial records of the Company and each
Subsidiary, and to discuss the affairs, finances and accounts of the Company and
each Subsidiary with, and to be advised as to the same by, its officers at such
reasonable times and intervals as the Bank may designate.
9.16 Additional Banks/Loan Agreements. The Bank understands that the
Company also maintains a $14,000,000 revolving credit facility with Signet
Bank/Virginia. The Bank further understands that the terms and conditions of the
$14,000,000 loan agreement do not conflict with those in this Agreement and that
all loan proceeds from any Signet loans are used for working capital and general
corporate purposes. During the term of this Agreement, the Company agrees that
it shall not enter into any other loan agreements which would cause its
Indebtedness to exceed $30,000,000 (excluding loans under the Bond Purchase
Agreement).
Section 3. Amendments to the Credit Agreement, Exhibits. Exhibits A and B
attached to the Agreement are both hereby deleted in their entirety and Exhibits
A and B attached hereto are substituted therefor. All references in the
Agreement to Exhibits A and B shall be deemed to refer to the exhibits attached
hereto.
Section 4. Completeness and Modification. This amendment constitutes the entire
agreement between the Company and the Bank and supersedes all prior discussions,
understandings or agreements.
Section 5. Effectiveness. This amendment shall become effective as of April 30,
1997, on the date (the "Effective Date") when the following conditions shall
have been satisfied:
(a) this amendment shall have been executed by each of the parties
hereto, and the Company shall have delivered executed counterparts to the Bank;
(b) the representations and warranties of the Company contained in the
Agreement shall be true as of the Effective Date;
(c) the Company shall have executed and delivered to the Bank the
Revolving Note in the form of Exhibit A attached hereto; and
(d) the Company has satisfied the conditions of Section IV of the
Agreement.
On and after the Effective Date the rights and obligations of the
Company and the Bank shall be governed by the Agreement as amended herein;
provided that any rights with respect to the period prior to the Effective Date
shall continue to governed by the terms of the Credit Agreement.
WITNESS the following signatures, as of the date first written above.
S&K FAMOUS BRANDS, INC.
By ____________________________________
Title ___________________________________
Address: 00000 Xxxx Xxxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxxx 00000-0000
Attn.: Executive Vice President and
Chief Financial Officer
Crestar Bank
By ____________________________________
Title ___________________________________
Address: 000 Xxxx Xxxx Xxxxxx
X.X. Xxx 00000
Xxxxxxxx, Xxxxxxxx 00000
Attn.: Xxxxx X. Xxxxxx
EXHIBIT A
REVOLVING NOTE
$16,000,000.00 Richmond, Virginia
April 30, 1997
FOR VALUE RECEIVED, on May 31, 2000, S&K FAMOUS BRANDS, INC., a
Virginia corporation (the "Borrower"), hereby promises to pay to the order of
Crestar Bank (the "Payee" or the "Bank") at its main office, in Richmond,
Virginia, in lawful money of the United States, the principal of Sixteen Million
and no/100 Dollars ($16,000,000) or the aggregate unpaid principal amount of all
Revolving Loans made by the Payee to the Borrower pursuant to the Credit
Agreement hereinafter referred to, whichever is less (the "Principal"). The
Borrower further promises to pay interest on the last day of each month during
the term hereof, commencing May 31, 1997, and on the last day of each month
thereafter and on May 31, 2000, on the amount of the Principal from time to time
outstanding during the period beginning on the date hereof and continuing until
this Note is paid in full at a rate or rates provided for in the Credit
Agreement. Interest payable hereunder shall be calculated on the basis of a
365-day year and paid for the actual number of days for which due.
This Note is issued pursuant to the provision of a certain Credit
Agreement dated as of March 10, 1994 between the Borrower and the Bank (herein,
as the same may from time to time be amended, referred to as the "Credit
Agreement").
This Note is subject to prepayment, in whole or in part, as specified
in the Credit Agreement. In case a Default, as defined in the Credit Agreement,
shall occur and be continuing, this Note may become or may be declared to be due
and payable in the manner and with the effect provided in the Credit Agreement,
and the Borrower hereby agrees to pay all costs and expenses in connection
therewith, including reasonable attorney's fees, as provided in the Credit
Agreement.
The Borrower and all guarantors, endorsers and pledgors hereof hereby
waive presentment, demand, notice of dishonor, protest, and all other demands
and notices in connection with the delivery, acceptance and performance of this
Note.
This Note shall be governed by and interpreted in accordance with the
laws of the Commonwealth of Virginia.
In Witness Whereof, the Borrower has caused its corporate name to be
signed by its duly authorized officer as of the day and first above written.
S&K FAMOUS BRANDS, INC.
By ____________________________________
Title ___________________________________
EXHIBIT B
TERM NOTE
$_______________ Richmond, Virginia
May 31, 2000
FOR VALUE RECEIVED, S&K FAMOUS BRANDS, INC., a Virginia corporation
(the "Borrower"), hereby promises to pay to the order of Crestar Bank (the
"Payee" or the "Bank") at its main office, in Richmond, Virginia, in lawful
money of the United States, the principal of _______________ Dollars
($_______________) (the "Principal"), in forty-seven consecutive equal monthly
installments of principal of _____________________ Dollars ($_______________)
each, commencing on June 30, 2000, and continuing on the last day of each month
thereafter and one final payment of principal of _____________ Dollars
($_______________) on May 31, 2004 when the entire unpaid Principal and accrued
interest thereon shall be paid in full. The Borrower hereby further promises to
pay interest from the date hereof on the amount of Principal from time to time
outstanding at a rate or rates as provided for in the Credit Agreement. Interest
shall be payable on the last day of each month during the term hereof,
commencing on June 30, 2000, and on the last day of the month thereafter and on
May 31, 2004. Interest shall continue to accrue on this Note after maturity at
the rate set forth above and shall then be payable on demand of the holder of
this Note. Interest payable hereunder shall be calculated on the basis of a
365-day year and paid for the actual number of days for which due.
This Note is issued pursuant to and subject to the provisions of a
certain Credit Agreement dated as of March 10, 1994 between the Borrower and the
Payee (herein, as the same may from time to time be amended, referred to as the
"Credit Agreement"); but neither this reference to the Credit Agreement nor any
provision thereof shall affect or impair the absolute and unconditional
obligation of the Borrower to pay the Principal of and interest on this Note as
herein provided.
This Note is subject to prepayment, in whole or in part, as specified
in the Credit Agreement. In case a Default, as defined in the Credit Agreement,
shall occur and be continuing, this Note may become or may be declared to be due
and payable in the manner and with the effect provided in the Credit Agreement,
and the Borrower hereby agrees to pay all costs and expenses in connection
therewith, including reasonable attorney's fees, as provided in the Credit
Agreement.
The Borrower and all guarantors, endorsers and pledgors hereof hereby
waive presentment, demand, notice of dishonor, protest and all other demands and
notices in connection with the delivery, acceptance, performance and enforcement
of this Note. This Note shall be governed by and interpreted in accordance with
the laws of the Commonwealth of Virginia. IN WITNESS WHEREOF, the Borrower has
caused its corporate name to be signed by its duly authorized officer as of the
day and year first above written.
S&K FAMOUS BRANDS, INC.
By ____________________________________
Title ___________________________________
