Exhibit (4) a
Crestar Bank
P. O. Xxx 00000
Xxxxxxxx, XX 00000-0000
(804) 782-5000
March 17, 1999
Xx. Xxxxxx X. Xxxxxxx
Executive Vice President
Chief Financial Officer
S & K Famous Brands, Inc.
P. O. Xxx 00000
Xxxxxxxx, XX 00000
Dear Xxx:
I am writing to document the modifications to the Credit Agreement dated March
10, 1994, and the subsequent Amendment to the Credit Agreement dated April 30,
1997, between S & K Famous Brands, Inc. (the "Company"), and Crestar Bank (the
"Bank") related to the $16,000,000 Revolver offered to the Company. The
revisions to the above agreements in order to permit the Company to pursue the
repurchase of its stock are as follows:
1. Section 7.3.3 Investments. Subsection (h) is added to the Credit Agreement to
permit the repurchase of the Company's outstanding shares, if, after giving
effect thereto, there would not exist any Default hereunder. Any previous Event
of Default prior to the addition of this clause, as a result of the repurchase
of the Company's outstanding stock, is hereby waived, as long as the repurchase
meets the requirements of the above language. 2. Section 7.1.3 Minimum
Consolidated Tangible Net Worth in the Amendment to the Credit Agreement is
modified to require the Company to maintain at least $48,300,000 of Consolidated
Tangible Net Worth at January 30, 1999 and for each fiscal year thereafter, of
not less than $48,300,000 plus 80% of each successive year's net income.
However, during the fiscal year beginning February 1, 1999 and all periods
thereafter, upon approval of the Company's Board of Directors and notification
to Crestar, S & K Famous Brands may repurchase up to an additional $12,800,000
of its own stock. Any such repurchases shall reduce the minimum Consolidated
Tangible Net Worth requirement by 90% of the value of the stock repurchased. The
minimum Consolidated Net Worth will not be adjusted for any net loss reported by
the Company.
These revisions shall be incorporated into the Amendment to the Credit Agreement
dated April 30, 1997 and the Credit Agreement dated March 10, 1994. I hope these
modifications will give you the flexibility needed to implement your repurchase
strategy. Thanks for allowing Crestar to meet the banking requirements of S & K.
Please give me a call should you have any questions.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
Senior Vice President
Approved and accepted this 31 day of March, 1999 S & K Famous Brands, Inc.
By: /s/ Xxxxxx X. Xxxxxxx
Executive Vice President
