SECOND AMENDMENT TO LETTER OF CREDIT AND
REIMBURSEMENT AGREEMENT
This Second Amendment to Letter of Credit and Reimbursement Agreement
dated as of October 31, 1998 (the "Amendment"), between Xxxxxx Riverside, LLC
(the "Company") and NationsBank, N.A. (the "Bank").
RECITALS
The Bank agreed to issue a Letter of Credit on November 12, 1997 in the
amount of $11,000,000.00, for the benefit of certain trustees as set forth
therein, and for the account of the Company (the "Letter of Credit").
The obligation of the Company to repay the Letter of Credit is
evidenced by a Letter of Credit and Reimbursement Agreement dated November 1,
1997 (the "Agreement") as amended by that certain Amendment to Letter of Credit
and Reimbursement Agreement dated September 1, 1998.
The Company and the Bank wish to amend certain terms of the Agreement
as herein provided.
NOW THEREFORE, in consideration of the mutual agreements contained
herein and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as follows:
Section 1. Definitions. Unless otherwise defined herein, terms defined
in the Agreement shall have the same meanings when used herein.
Section 2. Amendments. Effective as provided in Section 3 hereof and
subject to the provisions of Section 3 hereof, the Agreement is hereby amended
as follows:
A. Section 5.12 hereby deleted in its entirety, with the following
being substituted in lieu thereof:
"Section 5.12 FINANCIAL COVENANTS.
Until the termination of this Reimbursement Agreement and the
expiration or cancellation of the Letter of Credit and the indefeasible
satisfaction and payment in full of all Obligations, the following
financial covenants will be maintained:
(i) TOTAL LIABILITIES TO TANGIBLE NET WORTH. The Company and
Xxxxxx Fixture Corporation, ("Fixture"), a wholly owned subsidiary of
Xxxxxx Industries, Inc., shall maintain on a combined basis a ratio of
Total Liabilities to Tangible Net Worth of not greater than 3.0 to 1.0,
quarterly, commencing October 31, 1998 and on each fiscal quarter-end
thereafter.
As used above, Tangible Net Worth shall be calculated
quarterly, commencing October 31, 1998 and on each fiscal quarter-end
thereafter and shall be defined (A) for Fixture as the sum of (i)
common stock, paid-in capital and retained earnings shown on the
Fixture's balance sheets, minus (ii) the intangible assets of the
Fixture as determined in accordance with generally accepted accounting
principles, which includes, but is not limited to, goodwill, covenants
not to compete, capitalized patents and trademarks, and (B) for the
Company as the sum of (i) common stock and paid-in capital shown on the
Company's balance sheets, minus (ii) the intangible assets of the
Company as determined in accordance with generally accepted accounting
principles, which includes, but is not limited to, goodwill, covenants
not to compete, capitalized patents and trademarks.
(ii) DEBT SERVICE COVERAGE RATIO. Xxxxxx Industries, Inc.
shall maintain a Debt Service Coverage Ratio of not less than 1.10 to
1.0 at the end of each fiscal quarter commencing April 30, 1998 and
ending April 30, 2000, and of not less than 1.15 to 1.0 at the end of
each fiscal quarter commencing July 31, 2000, based upon the present
fiscal quarter and the previous three quarters. Debt Service Coverage
shall be defined as earnings before interest, depreciation,
amortization and other non-cash expenses, less distributions or
dividends divided by the sum of interest expense plus current
maturities of long-term debt and capital leases."
B. Section 9.1 shall be amended by changing the address of the Company
to read as follows:
Xxxxxx Riverside, LLC
c/o Abrams Properties, Inc.
0000 Xxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Section 3. Effective Date. The amendments to the Agreement set forth in
Section 2 hereof shall be effective and binding on all the parties on and as of
October 31, 1998 (the "Effective Date"), provided that all the following
conditions precedent have been satisfied on such date:
(a) The Bank shall have received one or more counterparts of this Amendment
executed by each of the parties hereto.
(b) No Event of Default shall have occurred and be continuing and no status
or condition exists which with the giving of notice or the passage of time or
both would constitute an Event of Default, Section 5.12 (i) and (ii) of this
Amendment will not be maintained for the fiscal quarter ending January 31, 1999,
and the representations of the Company in Section 4 hereof shall be true on and
as of the Effective Date with the same force and effect as if made on and as of
the Effective Date; and no lawsuit or proceeding shall be pending (or, to the
knowledge of the Company, threatened) against the Company which is likely to
have a material adverse effect upon the financial condition of the Company or
upon the ability of the Company to carry out the transactions contemplated by
this Amendment and the Agreement as amended hereby.
Section 4. Representations, Etc. The Company represents, covenants and
warrants to the Bank that: (i) as of the date hereof no Event of Default has
occurred and is continuing and no status or condition exists which with the
giving of notice or the passage of time or both would constitute an Event of
Default, Section 5.12 (i) and (ii) of this Amendment will not be maintained for
the fiscal quarter ending January 31, 1999 and (ii) the representations and
warranties contained in Article 4 of the Agreement as amended hereby, with each
reference in such Article 4 to "this Agreement", "hereto", "hereof" and terms of
similar import taken as a reference to the Agreement as amended hereby.
Section 5. Agreement.
(a) Except as specifically amended hereby, the Agreement shall remain
unchanged and continue in full force and effect in accordance with the
provisions thereof as in existence on the date hereof. From and after the
Effective Date, each reference in the Agreement (including all Exhibits and
Schedules thereto) to "this Agreement," "hereto," "hereof" and terms of similar
import taken as a reference to the Agreement and all references to the Agreement
in any documents, instruments, certificates, notes, bonds or other agreements
executed in connection therewith shall be deemed to refer to the Agreement as
amended hereby.
(b) The Company agrees that all collateral given as security for the
Agreement secures, and shall continue to secure, the Agreement, as amended
hereby.
(c) The Company waives and releases the Bank from any and all claims and
defenses with respect to the Agreement and any and all documents, instruments,
certificates, notes, bonds or other agreements executed in connection therewith.
(d) This Amendment (i) is limited precisely as specified herein and does
not constitute nor shall be deemed to constitute a modification, acceptance or
waiver of any other provision of the Agreement, or any documents, instruments,
certificate, notes, bonds or agreements delivered in connection therewith and
(ii) shall not prejudice or be deemed to prejudice any right(s) the Bank may now
have or may in the future have under or in connection with the Agreement or any
documents, instruments, certificates, notes, bonds or agreements executed in
connection therewith.
Section 6. Applicable Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Georgia.
Section 7. Expenses. The Company will pay: (i) all out-of-pocket
expenses of the Bank in connection with the preparation, execution and delivery
of this Amendment; (ii) the reasonable fees of counsel to the Bank, including
the allocated cost of in-house counsel; and (iii) all taxes, if any, upon any
documents or transactions pursuant to this Amendment.
Section 8. Counterparts. This Amendment may be executed in any number
of counterparts, all of which taken together will constitute one agreement, and
any of the parties hereto may execute this Amendment by signing any such
counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the day and year first above written.
Xxxxxx Riverside, LLC
By: Xxxxxx Properties, Inc.,
Sole member
By: /s/ Xxxxxx X. Xxxxxxxx, XX
Title: PRESIDENT & CEO
Attest: /s/ Xxxxxxx X. Xxxxxxx
Title: SECRETARY
[SEAL]
NationsBank, N.A.
By: /s/ Xxxxx Xxxxx
Title: SENIOR VICE PRESIDENT
