EXHIBIT (4)(a)(2)
February 1, 1996
Xxxx Manufacturing Co.
One Commerce Square
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
RE: Credit Agreement dated as of December 19, 1995 (the
"Credit Agreement") among Xxxx Manufacturing Co. (the
"Borrower"), the Guarantors party thereto and
NationsBank, N.A., as the sole Lender and as Agent
("NationsBank")
Gentlemen:
Reference is made to the Credit Agreement described above. All of the defined
terms in the Credit Agreement are incorporated herein by reference.
NationsBank agrees with the Borrower and the Subsidiary Guarantors to amend the
Credit Agreement in the following respects:
1. Section 7.11(a) to the Credit Agreement is amended in its
entirety to read as follows:
7.11 Financial Covenants.
(a) Consolidated Net Worth. Consolidated Net Worth at all
times shall be no less than $115,000,000, reduced on and after the date
of the Stock Repurchase by the amount of the reduction (not to exceed
$93,000,000), as determined in accordance with GAAP, in the net worth
of the Borrower and its consolidated Subsidiaries resulting from the
Stock Repurchase and increased on a cumulative basis by (i) as of the
last day of each fiscal year commencing with the last day of fiscal
year 1996 by an amount equal to the greater of (A) $0 or (B) 50% of the
excess of (1) Consolidated Net Income for the fiscal year then ended
over (2) dividends and other distributions to shareholders by the
Borrower and its consolidated Subsidiaries for the fiscal year then
ended and (ii) upon the consummation of any Equity Transaction on or
after the Closing Date, an amount equal to 85% of the Net Proceeds of
such Equity Transaction.
2. Section 8.4(c) to the Credit Agreement is amended in its
entirety to read as follows:
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc.
The Borrower will not, nor will it permit any of its Subsidiaries
to:
* * * * *
(c) except as otherwise permitted by Section 8.4(a) and
subject to the terms of Section 8.8, acquire all or any portion of the
capital stock or securities of any other Person or purchase, lease or
otherwise acquire (in a single transaction or a series of related
transactions) all or any substantial part of the Property of any other
Person if after giving effect on a Pro Forma Basis to such transaction,
the Consolidated Leverage Ratio shall not be greater than 3.00 to 1.00.
3. Section 11.3(b) to the Credit Agreement is amended in its
entirety to read as follows:
11.3 Benefit of Agreement.
* * * * *
(b) Assignments. Each Lender may assign all or a portion of
its rights and obligations hereunder pursuant to an assignment
agreement substantially in the form of Schedule 11.3(b) to one or more
Eligible Assignees, provided that any such assignment shall be in a
minimum aggregate amount of $5,000,000 of the Commitments and in
integral multiples of $1,000,000 above such amount. Any assignment
hereunder shall be effective upon delivery to the Agent of written
notice of the assignment together with a transfer fee of $3,500 payable
to the Agent for its own account. The assigning Lender will give prompt
notice to the Agent and the Borrower of any such assignment. Upon the
effectiveness of any such assignment (and after notice to the Borrower
as provided herein), the assignee shall become a "Lender" for all
purposes of this Credit Agreement and the other Credit Documents and,
to the extent of such assignment, the assigning Lender shall be
relieved of its obligations hereunder to the extent of the Loans and
Commitment components being assigned. Along such lines the Borrower
agrees that upon notice of any such assignment and surrender of the
appropriate Note or Notes, it will promptly provide to the assigning
Lender and to the assignee separate promissory notes in the amount of
their respective interests substantially in the form of the original
Note (but with notation thereon that it is given in substitution for
and replacement of the original Note or any replacement notes thereof).
By executing and delivering an assignment agreement in accordance with
this Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Lender warrants
that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim; (ii) except as
set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto
or thereto, or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Credit Agreement, any of the
other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto or the financial condition of any Credit
Party or the performance or observance by any Credit Party of any of
its obligations under this Credit Agreement, any of the other Credit
Documents or any other instrument or document furnished pursuant hereto
or thereto; (iii) such assignee represents and warrants that it is
legally authorized to enter into such assignment agreement; (iv) such
assignee confirms that it has received a copy of this Credit Agreement,
the other Credit Documents and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision
to enter into such assignment agreement; (v) such assignee will
independently and without reliance upon the Agent, such assigning
Lender or any other Lender, and based on such documents and information
as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Credit
Agreement and the other Credit Documents; (vi) such assignee appoints
and authorizes the Agent to take such action on its behalf and to
exercise such powers under this Credit Agreement or any other Credit
Document as are delegated to the Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with
their terms all the obligations which by the terms of this Credit
Agreement and the other Credit Documents are required to be performed
by it as a Lender.
All references in the Credit Agreement and the other Credit Documents to the
"Credit Agreement" shall be deemed to refer to the Credit Agreement as amended
hereby.
NationsBank and the Borrower hereby agree that the foregoing amendments shall be
effectuated by inserting appropriate replacement pages into the Credit Agreement
as originally executed.
Except as modified hereby, all of the terms and provisions of the Credit
Agreement and the other Credit Documents shall remain in full force and effect.
This letter agreement shall be governed by and construed in accordance with the
laws of the State of North Carolina.
This letter agreement may be executed in one or more counterparts, each of which
constitute an original, and all of which taken together shall constitute a
single document.
Sincerely,
NATIONSBANK, N.A.,
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
[Signatures Continued]
Read and agreed to this 1st
day of February, 1996
XXXX MANUFACTURING CO.
By____________________________
Title_________________________
Read and consented to this 1st
day of February, 1996
XXXXX CUSTOM FURNITURE, INC.
By____________________________
Title_________________________
XXXX DATA PRODUCTS, INC.
By____________________________
Title_________________________
XXXX HOLDINGS, INC.
By____________________________
Title_________________________
XXXX X-ACTO, INC.
By____________________________
Title_________________________
SEAL PRODUCTS, INC.
By____________________________
Title_________________________
