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Exhibit 4.8
MODIFICATION AGREEMENT
This modification agreement is dated as of October 16, 1995,
and is among XXXX & XXXXXX, INC., a Delaware corporation ("Borrower"), UNITED
STATES NATIONAL BANK OF OREGON ("U.S. Bank"), CIBC, INC. ("CIBC"), ABN AMRO
BANK N.V. ("ABN"), BANK OF AMERICA ILLINOIS ("BofA"), and WACHOVIA BANK OF
GEORGIA, N.A. ("Wachovia").
Recitals
A. U.S. Bank, CIBC, ABN, BofA, and Wachovia
(individually "Bank" and collectively "Banks") are parties to a credit
agreement dated as of May 6, 1992, as modified (the "Credit Agreement"). All
of the capitalized terms used in this modification agreement are defined by the
Credit Agreement.
B. Borrower has notified U.S. Bank as agent for Banks
that Borrower may not be in compliance with the Interest Coverage Ratio
specified in section 5.01(h)(iv) of the Credit Agreement as of September 30,
1995.
C. Borrower and Banks desire to enter into this
modification agreement to modify the Credit Agreement.
NOW, THEREFORE, for value, Borrower and Banks agree that:
1. Temporary Change in Interest Coverage Ratio. The minimum Interest
Coverage Ratio that Borrower must maintain will be:
a. 2.80 to 1 for the four-quarter period ending on September 30,
1995;
b. 2.45 to 1 for the four-quarter period ending on December 31,
1995;
c. 2.75 to 1 for the four-quarter period ending on March 31, 1996;
and
d. 3.50 to 1 for each rolling four-quarter period ending on June
30, 1996, and on the last day of each calendar quarter
thereafter.
2. Change in Pricing. Effective immediately and continuing until
Borrower meets or exceeds an Interest Coverage Ratio of 3.5 to 1, the
pricing on existing and future advances will be the highest provided
in the pricing grid (the Interbank Margin on existing and future
advances = 75.00 basis points ("bps"), the Commitment Fee = 25.00 bps,
and the Unused Fee = 10.00 bps). The foregoing pricing will continue
in effect even if Borrower is in compliance with the Leverage Ratio
which might, except for this paragraph, result in lower pricing.
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3. Modification Fee. Borrower promises to pay a modification fee of
$50,000 to Banks in care of Agent. Agent will distribute each Bank's
prorata share of such fee to each Bank.
4. Reduction in Revolving Line of Credit. The Aggregate Commitment will
be reduced from $100 million to $85 million effective as of March 31,
1996, and from $85 million to $75 million as of June 30, 1996. Each
such reduction will be prorata among Banks. Borrower will pay to
Banks without notice or demand on a prorata basis all outstanding
advances that exceed the Aggregate Commitment on the effective date of
each such reduction in the Aggregate Commitment.
5. Financial Reporting. Section 5.01(i) of the Credit Agreement is
modified to also require Borrower to deliver:
a. Monthly company-prepared Financial Statements within 30 days
following the end of each calendar month; and
b. Quarterly company-prepared, consolidating Financial Statements
within 45 days following the end of each of the first three
calendar quarters of each Fiscal Year and within 90 days
following the end of each Fiscal Year.
6. Negative Covenants. Section 5.02(a) of the Credit Agreement is
modified to prohibit a transfer by Borrower or any of its Subsidiaries
of more than 5% of such organization's assets except for sales of
inventory and surplus or obsolete equipment and collection of accounts
in the ordinary course of business and for acquisition of Subsidiaries
or assets subject to existing encumbrances, security interests or
liens.
A new negative covenant is added as section 5.04 as follows:
"5.04 Additional Debt. Except for trade debt incurred in the ordinary
course of business and a guaranty to be issued to Wachovia to support
the $19,552,000 reimbursement liability of Xxxx & Talbot, Wis., Inc.
under a reimbursement and security agreement dated as of November 1,
1994 (the "P&T, Wis Liability"), Borrower will not allow its Canadian
Subsidiary, Xxxx & Xxxxxx, Ltd., a British Columbia corporation ("P&T
Canada"), to borrow money from any person (individual, organization, or
governmental unit) except Borrower or to otherwise incur debt
(liability on a claim) for borrowed money without the prior written
consent of Majority Banks."
7. Guaranties by Significant Subsidiaries. Borrower promises and agrees
to cause each "Significant Subsidiary" (a Subsidiary contributing 5%
or more of Borrower's consolidated assets) to unconditionally
guarantee payment of the Loans and performance of the P&T, Wis
Liability on a prorata basis in a form acceptable to Banks within 30
days following the date of this agreement.
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All such guaranties will include, among other terms, (a) a waiver of
claims and defenses based on recoupment, any disability or defense of
Borrower other than payment (including claims such as failure of
consideration, duress, lack of capacity, illegality, fraud, statute of
limitations, accord and satisfaction, impairment of recourse,
discharge of Borrower through insolvency proceedings or otherwise, the
manner, order, or timing of any foreclosure or disposition rights, or
the forbearance by Bank of or with respect to any right or remedy that
it may have against Borrower, the collateral, or any other guarantor),
and/or suretyship (including extension of due dates, material
modifications, and impairment of rights of recourse and/or of
collateral) and (b) an agreement for mandatory arbitration of
disputes.
Notwithstanding the foregoing, P&T Canada and any other Significant
Subsidiaries which are not incorporated in the United States (a
"foreign Significant Subsidiary") will not issue such a guaranty but
will, instead, either (a) subordinate their claims against Borrower to
the claims of Banks against Borrower to assure Banks that their claims
against Borrower will be fully satisfied by payment before any foreign
Significant Subsidiary receives any payment on account of its claims
against Borrower or (b) provide such other financial assurances or
accommodations as Banks may consider reasonable under the
circumstances.
The failure of Borrower to obtain and deliver such guaranties and
subordinations within such 30-day period will constitute an event of
Default under the Loan Documents.
8. Subordination. Effective upon an event of Default under the Loan
Documents, Borrower hereby subordinates its present and future claims
against and equity interests in the non-foreign Significant
Subsidiaries to the present and future claims of Banks against the
non-foreign Significant Subsidiaries under the guaranties required by
section 7 of this agreement to assure Banks that their claims against
the non-foreign Significant Subsidiaries will be fully satisfied by
payment before Borrower receives any payment or distribution on
account of its claims and/or equity interests after such event of
Default.
9. Miscellaneous. The parties agree to issue any additional documents
and instruments reasonably necessary to effectuate the objectives of
this modification agreement. The Loan Documents will continue in full
force and effect as modified by this modification agreement. This
modification agreement may be signed in one or more counterparts but
all such counterparts will constitute but one agreement. The Loan
Documents, as modified by this modification agreement, are intended to
be the complete, final, and exclusive statement of the terms upon
which Banks make their Individual Commitments to Borrower and Borrower
promises to repay Loans.
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10. Effective Date. This modification agreement will become effective
only when U.S. Bank, in its capacity as administrative agent for
Banks, has received (a) by facsimile the signature page signed by
Borrower and the signature page(s) signed by Majority Banks and (b)
the modification fee.
If Borrower or a Bank delivers a facsimile of its signature, such
delivery will constitute the promise of such person to deliver
sufficient copies of the manually signed signature page for
distribution to each other party to the Credit Agreement.
XXXX & TALBOT, INC. UNITED STATES NATIONAL BANK
OF OREGON
By
/s/ Xxxxx X. Xxxx By /s/ Xxxxxx X. Xxxxx
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Xxxxx X. Xxxx Xxxxxx X. Xxxxx
Chairman of the Board Vice President
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CIBC INC. ABN AMRO BANK N.V.
By /s/ Xxx Xxxxxxx By /s/ Xxxx X. Xxxxxx
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Xxx Xxxxxxx Xxxx X. Xxxxxx
Vice President Group Vice President
By /s/ Xxxxx XxXxxxxx
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Xxxxx XxXxxxxx
Vice President
BANK OF AMERICA ILLINOIS WACHOVIA BANK OF GEORGIA,
NATIONAL ASSOCIATION
By /s/ Xxxxxxx X. Xxxxx By /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxxx
Vice President Senior Vice President
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