Exhibit 4.2.21
AMENDMENT OF
1992 NOTE AGREEMENT
This Amendment of 1992 Note Agreement ("Amendment"), entered into as of
November 9, 2001, by and among CONE XXXXX CORPORATION (the "Company") and THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA (the "Noteholder").
WHEREAS, the parties hereto have executed and delivered that certain Note
Agreement dated as of August 13, 1992 (as previously amended and as it may be
further amended, modified or supplemented, the "Note Agreement");
WHEREAS, the Company has requested that certain amendments be made to the
Note Agreement and the Notes;
WHEREAS, Noteholder is willing to enter into this Amendment subject to the
satisfaction of conditions and terms set forth herein;
WHEREAS, capitalized terms used herein and not otherwise defined shall
have the meanings set forth in the Note Agreement (as amended by this
Amendment); and
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Amendments to Note Amendment.
1A. Paragraph 1 of the Note Agreement. Paragraph 1 of the Note Agreement
is amended by replacing the words "the rate of 8.00% per annum" with the words
"the Applicable Rate".
1B. Paragraph 4A of the Note Agreement.
(a) The last sentence of subparagraph (i) of Paragraph 4A of the Note
Agreement is amended in its entirety to read as follows:
"The remaining principal amount of the Notes, together with
interest accrued thereon, shall become due on January 15, 2003, the
maturity date of the Notes."
(b) Subparagraph (ii) of Paragraph 4A of the Note Agreement is amended in
its entirety to read as follows:
2
"(ii) Certain Proceeds. (A) The Company shall prepay each Note
in an amount equal to (I) such Note's pro rata share of (x) the Net
Proceeds of each Capital Market Transaction of the Company or any
Subsidiary (other than securities issued to the Company or another
Subsidiary) permitted hereunder, (y) the Net Proceeds of any Asset
Dispositions described in clause (vii) of the definition of
"Permitted Asset Dispositions" and (z) the Net Proceeds of any Asset
Dispositions described in clause (viii) of the definition of
"Permitted Asset Dispositions", and (II) 100% of the proceeds of any
other Sharing Payment (as defined in the Senior Debt Intercreditor
Agreement) received by any holder of a Note from time to time, in
any case together with Yield-Maintenance Amount.
(B) The amount of all prepayments pursuant to clause (A) above
shall be made (x) ratably to each holder of a Note and (y) ratably
to the agent under the Credit Agreement for the ratable benefit of
the lenders thereunder. For purposes of this subparagraph (ii), each
Note's pro rata share shall equal such Note's Senior Pro Rata Share
(as defined in the Intercreditor Agreement)."
(c) A new subparagraph (iii) is added to Paragraph 4A of the Note
Agreement, stating in its entirety as follows:
"(iii) Revolving Credit Commitment Reductions. (A) The Company
shall prepay, without any Yield-Maintenance Amount, each Note in an
amount equal to such Note's pro rata share of the following amounts
on the following dates (such dates and amounts representing
scheduled mandatory prepayments of principal under Section 2.1(g) of
the Credit Agreement):
Date Amount
---- ------
November 9, 2001 $1,000,000
May 15, 2002 $2,500,000
June 30, 2002 $2,500,000
August 15, 2002 $2,500,000
September 30, 2002 $2,500,000.
(B) The amount of all prepayments pursuant to clause (A)
above shall be made (x) ratably to each holder of a Note and (y)
ratably to the agent under the Credit Agreement for the ratable
benefit of the lenders thereunder. For purposes of this subparagraph
(iii), each Note's pro rata share shall equal such Note's Senior Pro
Rata Share (as defined in the Intercreditor Agreement)."
(d) A new subparagraph (iv) is added to Paragraph 4A of the Note
Agreement, stating in its entirety as follows:
3
"(iv) Excess Cash Flow. (A) Within three Business Days after
the actual date of delivery to the Noteholder (or, if earlier,
within three Business Days after the required date of delivery to
the Noteholder hereunder) of the financial statements of the Company
and its Subsidiaries (and the related Compliance Certificate) as at
(I) the end of any Fiscal Year ending after November 9, 2001 (a
"Year-End Date") or (II) the end of the second Fiscal Quarter of any
Fiscal Year ending after November 9, 2001 (a "Second-Quarter End
Date"), the Company shall prepay, without any Yield-Maintenance
Amount, each Note in an amount equal to 75% multiplied by such
Note's pro rata share of Excess Cash Flow for the Two-Quarter Period
ended on such Year-End Date or Second-Quarter End Date (as the case
may be).
(B) The amount of all prepayments pursuant to clause (A)
above shall be made (x) ratably to each holder of a Note and (y)
ratably to the agent under the Credit Agreement for the ratable
benefit of the lenders thereunder. For purposes of this subparagraph
(iv), each Note's pro rata share each Note's pro rata share shall
equal such Note's Senior Pro Rata Share (as defined in the
Intercreditor Agreement)."
1C. Paragraph 5A of the Note Agreement. The following subparagraphs
(vii), (viii), and (ix) are added to Paragraph 5A of the Note Agreement:
"(vii) not later than the 15 days after the last Business Day
of the Fiscal Year ended December 30, 2001, deliver to the
Noteholder a capital and operating expense budget and consolidated
financial projections for the Company and its Subsidiaries for the
next Fiscal Year, prepared in accordance with GAAP applied on a
Consistent Basis;
(viii) at any time or times requested by the Noteholder, permit
the Noteholder (or any other Person satisfactory to the Noteholder
in its sole discretion) to conduct a field examination and prepare a
written business audit of all inventory, accounts receivables,
accounts payable, controls and systems of the Company and its
Subsidiaries, in each case such field examination and audit to be
performed and prepared at the expense of the Company, provided,
however, that, during any period when no Event of Default has
occurred and is continuing, the Noteholder (and its representatives)
shall not perform and prepare such a field examination and audit
more than three (3) times during any Fiscal Year, but provided
further that upon the occurrence and during the continuation of any
Event of Default, the Noteholder (or its representatives) may
perform and prepare such field examinations and audits as often and
as many times as the Noteholder (in its sole discretion) shall
determine; and
4
(ix) the Company authorizes the Collateral Agent, at the
Noteholder's request, to obtain a written appraisal or appraisals of
all real property, improvements and equipment of the Company and its
Subsidiaries (including without limitation the real property
identified on Exhibit H attached hereto), such appraisals to be
prepared (at the expense of the Company) by an appraiser
satisfactory to the Noteholder and such appraisals to be in form and
substance satisfactory to the Noteholder."
1D. Paragraph 5R of the Note Agreement. The following Paragraph 5R is
added to the Note Agreement:
"5R. Account Control Agreements. The Company shall deliver,
within 30 days following November 9, 2001, duly executed Account
Control Agreements from financial institutions acting as depositary
for (as with respect to) the deposit accounts of the Company and the
Guarantors (other than the Securitization Deposit Accounts (as
defined in the Credit Agreement)) and other than the Imprest/Payroll
Accounts (provided that the aggregate amount deposited in the
Imprest/Payroll Accounts does not exceed the amounts allowed under
this Agreement), in form and substance acceptable to the Required
Holders;"
1E. Paragraph 6A of the Note Agreement.
(a) Subparagraph (i) of Paragraph 6A is amended in its entirety to read
as follows:
"(i) Consolidated Net Worth. Consolidated Net Worth to be less
than (a) $90,000,000 until through September 30, 2001, (b)
$70,000,000 from September 30, 2001 until through December 30, 2001,
(c) $67,000,000 from December 30, 2001 until through Xxxxx 00, 0000,
(x) $67,000,000 from March 31, 2002 until through June 30, 2002, (e)
$68,000,000 from June 30, 2002 until through September 29, 2002, and
(f) $68,500,000 from September 29, 2002 until through December 29,
2002."
(b) Subparagraph (ii) of Paragraph 6A is deleted in its entirety
(c) Subparagraph (iii) of Paragraph 6A is amended in its entirety to read
as follows:
"(iii) Consolidated Interest Coverage Ratio. As of the end of
each Four-Quarter Period set forth below the Consolidated Interest
Coverage Ratio to be less than that set forth opposite each such
period:
5
Consolidated Interest
Four-Quarter Period Ending Coverage Ratio Must Exceed
-------------------------- --------------------------
September 30, 2001 0.96 to 1.00
December 30, 2001 0.73 to 1.00
March 31, 2002 0.71 to 1.00
June 30, 2002 1.15 to 1.00
September 29, 2002 1.34 to 1.00
December 29, 2002 1.74 to 1.00"
(d) Subparagraph (iv) of Paragraph 6A is amended in its entirety to read
as follows:
"(iv) Consolidated EBITDA. As of the end of each Four-Quarter
Period set forth below the Consolidated EBITDA to be less than that
set forth opposite each such period:
Four-Quarter Period Ending Consolidated EBITDA
-------------------------- -------------------
September 30, 2001 $20,500,000
December 30, 2001 $15,500,000
March 31, 2002 $15,000,000
June 30, 2002 $23,500,000
September 29, 2002 $29,500,000
December 29, 2002 $38,000,000"
1F. Paragraph 6B of the Note Agreement. Paragraph 6B is amended in its
entirety to read as follows:
"6B. Capital Expenditures. (i) Make or become committed to
make U.S. Capital Expenditures which exceed $10,000,000 in any
Fiscal Year (on a non-cumulative basis, with the effect that amounts
expended in any Fiscal Year may not be carried forward to a
subsequent period).
6
(ii) Make or become committed to make Mexican Capital
Expenditures unless (i) no Default or Event of Default has occurred
and is continuing, (ii) such Mexican Capital Expenditures are only
for the purpose of purchasing the certain real property in Altamira,
Mexico and making certain improvements thereto and (iii) such
Mexican Capital Expenditures do not exceed $200,000 in any Fiscal
Year (on a non-cumulative basis, with the effect that amounts
expended in any Fiscal Year may not be carried forward to a
subsequent period)."
1G. Paragraph 6C(2) of the Note Agreement. Subparagraph (h) of Paragraph
6C(2) of the Note Agreement is amended by deleting the semicolon at the end
there of and inserting the following:
", and provided further that this clause (h) shall not be
deemed to permit any Contingent Obligation (other than Contingent
Obligations arising under the Equity Appreciation Rights Agreement
and the equity appreciation rights agreement dated as of November 9,
2001 between the Company and the lenders party to the Credit
Agreement);"
1H. Paragraph 6C(3) of the Note Agreement. The Company and the Noteholder
agree that each amendment to Sections 10.2 and 10.6 through 10.20, inclusive, of
the Credit Agreement, together with amendments to any relevant definitions,
contained in the Credit Agreement Amendment (as defined below) shall be
incorporated herein by this reference as if set forth herein and shall be in
full force and effect.
1I. Paragraph 6I of the Note Agreement. The following new Paragraph 6I is
added to the Note Agreement:
"6I. Imprest/Payroll Accounts. Permit at any time the aggregate
amount on deposit in (a) all Payroll Accounts of the Company and its
Subsidiaries to exceed the amount required to pay the next scheduled
payroll of such Persons, or (b) all Imprest/Payroll Accounts (other
than Payroll Accounts) of the Company and its Subsidiaries to exceed
$40,000."
1J. Paragraph 7A of the Note Agreement. Subparagraph (v) of Paragraph 7A
is amended in its entirety to read as follows:
"(v) the Company fails to perform or observe any agreement
contained in paragraphs 5D, 5E, 5L 5M, 5N, 5P, 5Q, 5R or 6 or in the
Letter Agreement, dated November 9, 2001, between the Company and
you; or"
1K. Paragraph 10A of the Note Agreement. Paragraph 10A of the Note
Agreement is amended by inserting the following defined terms in the appropriate
alphabetical in substitution of the corresponding defined terms set forth
therein:
7
"Called Premium" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph
4B or subparagraph (ii) of paragraph 4A or is declared to be
immediately due and payable pursuant to paragraph 7A, as the context
requires.
"Settlement Date" shall mean, with respect to the Called
Principal of any Note, the date on which such Called Principal is to
be prepaid pursuant to paragraph 4B or subparagraph (ii) of
paragraph 4A or is declared to be immediately due and payable
pursuant to paragraph 7A, as the context requires.
1L. Paragraph 10B of the Note Agreement.
(a) Paragraph 10B to the Note Agreement is amended by inserting the
following defined terms in the appropriate alphabetical order and, if
applicable, in substitution of the corresponding defined terms set forth
therein:
"Account Control Agreements" means, collectively, agreements as
shall be in form and substance acceptable to the Noteholder in its
sole discretion among the relevant Credit Party, the Priority
Collateral Agent (or the General Collateral Agent and the Designated
Collateral Subagent, as applicable) and each depositary bank in
which Deposit Accounts (as defined in the Security Agreements) of
any Credit Party are located conferring upon the Collateral Agents
control (within the meaning of such term as defined in the Article 9
of the UCC) of such Deposit Accounts (other than the Securitization
Deposit Accounts and the Imprest/Payroll Accounts) and containing
such other terms as shall be acceptable to the Noteholder in its
sole discretion, as the same may be amended, supplemented or
restated from time to time.
"Actual Non-Cash LIFO Adjustments" means, with respect to any
period, the Non-Cash LIFO Adjustments to income (or loss) of the
Company and its Subsidiaries (as determined on a consolidated basis
in accordance with GAAP applied on a Consistent Basis), to the
extent such adjustments are reflected in the computation of
Consolidated EBITDA for such period.
"Actual PBGC Payments" means, with respect to the Two-Quarter
Period ended June 30, 2002, the minimum amount of payments during
such period by the Company and its Subsidiaries to their respective
pension plans, as required by the PBGC pursuant to the PBGC
Agreement.
"Applicable Rate" means 13.70% per annum, provided, that unless
the Company shall have entered into an irrevocable Recapitalization
Agreement by June 30, 2002 that remains in full force and effect
with a Person who was and remains at all relevant times a Permitted
Equity Holder, the Applicable Rate at all times after June 30, 2002
shall be 14.20%.
8
"Consolidated Net Worth" means, as of any date on which the
amount thereof is to be determined, the shareholders' equity of the
Company and its Subsidiaries as of that date (excluding from the
calculation thereof minimum pension liabilities as determined in
accordance with FASB No. 87), determined on a consolidated basis, as
reflected on the financial statements of the Company most recently
delivered to the Noteholder pursuant to paragraph 5A hereof,
provided that Consolidated Net Worth shall be computed and
determined in accordance with GAAP applied on a Consistent Basis.
"Contingent Obligation" means, as to any Person, any direct or
indirect liability of that Person with respect to any Indebtedness,
lease, dividend, guaranty, letter of credit or other obligation
(each a "primary obligation") of another Person (the "primary
obligor"), whether or not contingent, (i) to purchase, repurchase or
otherwise acquire any such primary obligation or any property
constituting direct or indirect security therefor, or (ii) to
advance or provide funds (a) for the payment or discharge of any
such primary obligation, or (b) to maintain working capital or
equity capital of the primary obligor in respect of any such primary
obligation or otherwise to maintain the net worth or solvency or any
balance sheet item, level of income or financial condition of such
primary obligor, or (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
primary obligation of the ability of the primary obligor thereof to
make payment of such primary obligation, or (iv) otherwise to assure
or hold harmless the owner of any such primary obligation against
loss or failure or inability to perform in respect thereof. The
amount of any Contingent Obligation, to the extent not expressly
limited, shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which
such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in
respect thereof.
"Designated Collateral Subagent" means Bank of America, N.A.,
not individually but solely in its capacity as designated collateral
subagent on behalf of the General Secured Parties hereunder with
respect to the General Collateral, pursuant to the terms of the
General Collateral Agency Agreement, and its agents, successors and
permitted assigns.
"Equity Appreciation Rights Agreement" means that certain
Equity Appreciation Rights Agreement dated as of November 9, 2001,
between the Company and the Noteholder, as the same may be amended,
supplemented or restated from time to time.
"Excess Cash Flow" means, with respect to the Company and its
Subsidiaries for each Two-Quarter Period ended December 30, 2001,
June 30, 2002 and December 29, 2002, the result (if positive) of the
following calculation:
9
(a) the difference of (i) Consolidated EBITDA for such
period minus (ii) Projected Consolidated EBITDA for such
period, plus
----
(b) (in the case of the Two-Quarter Period ended June
30, 2002) the difference of (i) Projected PBGC Payments for
such period minus (ii) Actual PBGC Payments for such period,
plus
----
(c) the difference of (i) Projected Non-Cash LIFO
Adjustments for such period minus (ii) Actual Non-Cash LIFO
Adjustments for such period.
"FASB No. 87" means Statement of Financial Standards No. 87.
"Imprest/Payroll Accounts" means, collectively, the deposit
accounts identified on Exhibit F.
"Maturity Date" means January 15, 2003.
"Non-Cash LIFO Adjustments" means non-cash adjustments to
income (reflected as a negative amount if a charge, or as a positive
amount if a credit) resulting from the use of the "last in-first
out" inventory method (as opposed to the "first in-first out"
inventory method) in determining the cost of goods sold, all as
determined in accordance with GAAP applied on a Consistent Basis.
"Note Prepayment Amount" means, with respect to any Note at the
time any amount thereunder is being prepaid, the unpaid principal
balance of such Note on the date of such prepayment and any other
amounts then due and owing to the holder of such Note.
"Payroll Accounts" means, collectively, the Imprest/Payroll
Accounts that are identified as payroll accounts in Exhibit F.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor thereto.
"PBGC Agreement" means (i) initially, the Memorandum of
Understanding dated January 3, 2000 between the Company and the PBGC
concerning certain of the Company's Pension Plans and (ii) from and
after the execution of definitive documentation thereafter entered
into between the Company on substantially the same terms as set
forth in such Memorandum of Understanding, such definitive
documentation.
"Permitted Equity Holder" means a Person that (a) in the good
faith judgment of the Required Holders has sufficient financial
means to perform the terms of a Recapitalization Agreement and (b)
is otherwise acceptable to the Required Holders in their sole
discretion.
10
"Projected Consolidated EBITDA" means, with respect to any
Two-Quarter Period, the projected amount of Consolidated EBITDA for
such period, as set forth in Exhibit G.
"Projected Non-Cash LIFO Adjustments" means, with respect to
any Two-Quarter Period, the projected amount of Non-Cash LIFO
Adjustments for such period, as set forth in Exhibit G.
"Projected PBGC Payments" means, with respect to the
Two-Quarter Period ended June 30, 2002, the projected amount of
payments during such period by the Company and its Subsidiaries into
their respective pensions plans pursuant to the PBGC Agreement, as
such projected amount is set forth in Exhibit G.
"Recapitalization Agreement" means a written agreement (in form
and substance satisfactory to the Required Holders in their sole
discretion) between the Company and a Permitted Equity Holder, which
agreement requires the Permitted Equity Holder to make a cash equity
contribution to the Company on or before January 15, 2003, in an
amount sufficient (in the judgment of the Required Holders) to
ensure the effective recapitalization of the Company and its
Subsidiaries, including the payment all other amounts owed to the
Holder of any Note and the amounts owed to the lenders under the
Credit Agreement on such date.
"Related Documents" shall mean the Notes, the Facility Guaranty
Agreements, the Security Documents, the Equity Appreciation Rights
Agreement, the Account Control Agreements, and any other agreement,
instrument or other document executed in connection therewith.
"Two-Quarter Period" means a period of two full consecutive
Fiscal Quarters of the Company and its Subsidiaries, taken together
as one accounting period.
(b) The definition of "Consolidated EBITDA" is amended by deleting the
period at the end thereof and adding the following:
", all determined on a consolidated basis in accordance with
GAAP applied on a Consistent Basis."
(c) The definition of "Xxxxxx Swap Agreement" is amended by deleting the
period at the end thereof and adding the following:
", and as terminated on October 4, 2001."
1M. Exhibit F to the Note Agreement. A new Exhibit F is added to the Note
Agreement in the form attached as Exhibit A to this Amendment.
11
1N. Exhibit G to the Note Agreement. A new Exhibit G is added to the Note
Agreement in the form attached as Exhibit B to this Amendment.
1O. Exhibit H to the Note Agreement. A new Exhibit H is added to the Note
Agreement in the form attached as Exhibit B to this Amendment.
2. Conditions of Effectiveness. Upon satisfaction of the following, the
effective date of this Amendment shall be November 9, 2001 (the "Effective
Date"). This Amendment shall become effective when, and only when, (a) the
Noteholder shall have received all of the following documents, each (unless
otherwise indicated) being dated the date hereof, in form and substance
satisfactory to the Noteholder:
(i) executed originals of each of this Amendment and the Consent
of Guarantors, attached hereto;
(ii) a duly executed Credit Agreement Amendment in form and
substance acceptable to the Noteholder under which all conditions have
been satisfied and that is in full force and effect;
(iii) an executed allonge to the Note in the form of Exhibit D
hereto, and otherwise acceptable to the Noteholder;
(iv) executed originals of the Equity Appreciation Rights
Agreement, in the form of Exhibit E hereto;
(v) executed originals of the Letter Agreement, in form and
substance satisfactory to the Noteholder, between the Company and the
Noteholder;
(vi) executed originals of an amendment to the Senior Debt
Intercreditor Agreement, in form and substance acceptable to the
Noteholder;
(vii) a duly executed letter from General Electric Capital
Corporation, in form and substance acceptable to the Noteholder,
confirming that the conditions set forth in the securitization agreement
with the Company have been satisfied;
(viii) certified copies of the resolutions of the Board of Directors
of the Company authorizing this Amendment and the transactions
contemplated thereby;
(ix) a certificate of the Secretary or an Assistant Secretary of
the Company certifying the names and true signatures of the officers
authorized to sign this Amendment on behalf of the Company and any other
documents to be delivered by the Company hereunder;
(x) the opinions of counsel to the Company and the Guarantors
containing such opinions and in form and substance acceptable to the
Noteholder and its counsel; and
12
(xi) such other documents, instruments, approvals or opinions as
the Noteholder may reasonably request.
(b) The Company shall have paid to the Noteholder an amendment fee equal
to 0.75% of the outstanding principal amount of the Notes.
(c) The Company shall have paid all costs and expenses (including legal
fees) incurred by the Noteholder.
(d) The representations and warranties contained herein shall be true on
and as of the date hereof, and there shall exist on the date hereof no Event of
Default or Default; except as disclosed in writing to the Noteholder, there
shall exist no material adverse change in the financial condition, business
operation or prospects of the Company or its Subsidiaries since December 31,
2000; and the Company shall have delivered to the Noteholder an Officer's
Certificate to such effect.
3. Representations and Warranties.
(a) The Company hereby repeats and confirms each of the representations
and warranties made by it in (i) the Credit Agreement (it being understood that
any reference therein to (1) Lender includes the Noteholder, and (2) Loan
Documents includes the Note Agreement and the Notes (as amended hereby) and (ii)
paragraph 8H of the Note Agreement, as amended hereby, as though made on and as
of the date hereof, with each reference therein to "this Agreement", "hereof",
"hereunder", "thereof", "thereunder" and words of like import being deemed to be
a reference to the Note Agreement as amended hereby.
(b) The Company further represents and warrants as follows:
(i) The execution, delivery and performance by the Company of this
Amendment are within its corporate powers, have been duly authorized by
all necessary corporate action and do not contravene (A) its charter or
by-laws, (B) law or (C) any legal or contractual restriction binding on or
affecting the Company; and such execution, delivery and performance do not
or will not result in or require the creation of any Lien upon or with
respect to any of its properties.
(ii) No governmental approval is required for the due execution,
delivery and performance by the Company of this Amendment, except for such
governmental approvals as have been duly obtained or made and which are in
full force and effect on the date hereof and not subject to appeal.
(iii) This Amendment constitutes the legal, valid and binding
obligations of the Company enforceable against the Company in accordance
with its terms.
13
(iv) There are no pending or threatened actions, suits or
proceedings affecting the Company or any of its Subsidiaries or the
properties of the Company or any of its Subsidiaries before any court,
governmental agency or arbitrator, that may, if adversely determined,
materially adversely affect the financial condition, properties, business,
operations or prospects of the Company and it Subsidiaries, considered as
a whole, or affect the legality, validity or enforceability of the Note
Agreement, as amended by this Amendment.
(v) Other than as disclosed by the Company to the Noteholder in
writing, neither the Company nor any of its Subsidiaries is paying or has
paid any fee to the banks party to the Credit Agreement or to any other
party in connection with the Credit Agreement Amendment.
4. Consent to Amendment of Credit Agreement. The Required Holders hereby
consent to the amendment of the Credit Agreement as set forth in Amendment No. 8
to Credit Agreement dated November 9, 2001 (the "Credit Agreement Amendment").
5. Miscellaneous.
5A. Reference to and Effect on the Note Agreement. (a) Upon the
effectiveness of this Amendment, on and after the date hereof each reference in
the Note Agreement to "this Agreement", "hereunder", "hereof" or words of like
import referring to the Note Agreement, and each reference in any other document
to "the Note Agreement", "thereunder", "thereof" or words of like import
referring to the Note Agreement, shall mean and be a reference to the Note
Agreement, as amended hereby.
(b) Except as specifically amended and waived above, the Note Agreement,
and all other related documents, are and shall continue to be in full force and
effect and are hereby in all respects ratified and confirmed.
(c) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of any holder of a Note under
the Note Agreement or the Notes, nor constitute a waiver of any provision of any
of the foregoing.
5B. Costs and Expenses. The Company agrees to pay on demand all costs and
expenses incurred by any holder of a Note in connection with the preparation,
execution and delivery of this Amendment, including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel. The Company further
agrees to pay on demand all costs and expenses, if any (including, without
limitation, reasonable counsel fees and expenses of counsel), incurred by any
holder of a Note in connection with the enforcement (whether through
negotiations, legal proceedings or otherwise) of this Amendment, including,
without limitation, counsel fees and expenses in connection with the enforcement
of rights under this paragraph 5B.
5C. Execution in Counterparts. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.
14
5D. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
5E. Estoppel. To induce the Noteholder to enter into this Amendment, the
Company hereby acknowledges and agrees that, as of the date hereof, there exists
no right of offset, defense or counterclaim in favor of the Company against any
holder of the Notes with respect to the obligations of the Company to any such
holder, either with or without giving effect to this Amendment.
[Signatures on Next Page]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be executed by their respective officers thereunto duly authorized, as of the
date first above written.
CONE XXXXX CORPORATION
By /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: EVP & CFO
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By /s/ Xxxxxxxxx X. Xxxxxx
Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President
Signature page to November, 2001 Amendment of 1992 Note Agreement
CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Amendment of 1992 Note Agreement, dated as of November 9, 2001 (the
"Amendment"), (ii) consents to the execution and delivery of the Amendment by
the parties thereto, and (iii) reaffirms all of its obligations and covenants
under the Guaranty Agreement dated as of January 28, 2000, and agrees that none
of such obligations and covenants shall be affected by the execution and
delivery of the Amendment. This Consent and Reaffirmation may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which counterparts, taken together, shall constitute but one and the
same instrument.
CIPCO S.C., INC.
By /s/ W. Xxxxx Xxxxxxx
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
CONE FOREIGN TRADING LLC
By Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
EXHIBIT A TO AMENDMENT
EXHIBIT F
Imprest/Payroll Accounts
Account Name Bank Type A/C Number State
------------ ---- ---- ---------- -----
Cone Xxxxx Corporation Xxxxxx State Bank Imprest Account 95113064 SC
Cone Xxxxx Corporation First Citizens Bank Imprest Account 4451203280 NC
Cone Xxxxx Corporation European American Bank Imprest Account 29029063 NY
Cone Xxxxx Corporation Mutual Community Savings Imprest Account 20069412 NC
Cone Xxxxx Hourly Payroll First Union ZBA Account for Hourly 2079900014206 NC
Payroll
Cone Xxxxx Insurance Account First Union ZBA Account for Blue Cross 2072087403180 NC
Cone Xxxxx Salary Payroll Bank of America Payroll Account TBD TX
EXHIBIT B TO AMENDMENT
EXHIBIT G
Projected EBITDA, PBGC Payments and LIFO Adjustments
1. Two-Quarter
Period Ended Projected EBITDA
------------ ----------------
12/30/2001 $ 12,410
6/30/2002 17,062
12/29/2002 24,706
2. Two-Quarter
Period Ended Projected PBGC Payment
------------ ----------------------
12/30/2001 $ -
6/30/2002 1,200
12/29/2002 -
3. Two-Quarter Projected Non-Cash
Period Ended LIFO Adjustment
------------ ------------------
12/30/2001 $ 1,600
6/30/2002 -
12/29/2002 (31)
EXHIBIT C TO AMENDMENT
EXHIBIT H
Real Properties to be Appraised
EXHIBIT D TO AMENDMENT
[Form of Allonge]
ALLONGE
to SENIOR NOTE
Attached and affixed to, and made a part of, that certain Senior Note
dated July 14, 2000 (the "Note") executed by Cone Xxxxx Corporation, as Payee
(the "Company"), in favor of The Prudential Insurance Company of America.
The Company confirms, renews and restates its obligations pursuant to the
terms of the Note; provided that clause (a) of the first paragraph of such Note
is substituted in its entirety with the following:
"(a) at the Applicable Rate per annum from the date hereof
subject to the immediately following paragraph, payable monthly on
the 7th day of each month, commencing with the first such date,
until such the principal hereof shall have become due and payable,"
Except as expressly provided above, the Note is not modified or amended in
any respect and remains in full, force and effect.
IN WITNESS WHEREOF, intending to be legally bound, the Company has caused
this Allonge to be executed and delivered on this ___ day of November, 2001.
CONE XXXXX CORPORATION
By:____________________________
Title:
Acknowledged and agreed:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By:____________________________
Title:
C-2
EXHIBIT D TO AMENDMENT
EQUITY APPRECIATION RIGHTS AGREEMENT
THIS AGREEMENT made and entered into as of this 9th day of November, 2001
by and between CONE XXXXX CORPORATION, a North Carolina corporation (herein
called the "Company"), and THE PRUDENTIAL INSURANCE COMPANY OF AMERICA (together
with any successors and assigns, the "Noteholder").
PRELIMINARY STATEMENTS
1. The Company and the Noteholder are parties to that certain Note
Agreement dated August 13, 1992 (as it has been and may be amended, modified or
supplemented from time to time, the "Note Agreement").
2. In order to induce the Noteholder to enter into the Amendment of 1992
Note Agreement, dated as of the date hereof (the "Amendment"), the Company has
agreed to grant to the Noteholder the equity appreciation rights described
herein.
NOW, THEREFORE, in consideration of the entering into of the Amendment by
the Noteholder, the Company does hereby agree as follows:
6. ARTICLE I
DEFINITIONS
6A. Section 1.01 Definitions. For purposes of this Agreement, the
following words and terms shall have the following meanings, respectively,
unless the context clearly requires otherwise:
"Agent" means Bank of America, N.A., as Agent under the Credit Agreement.
"Agreement" means this Equity Appreciation Rights Agreement, as the same
may be modified, amended or supplemented from time to time.
"Consolidated Group" means the Company and its Subsidiaries.
"Credit Agreement" means that Credit Agreement dated January 28, 2000 by
and among Company, the Agent, and the lenders party thereto, as modified,
amended or supplemented from time to time.
"Credit Agreement Rights Agreement" has the meaning set forth in the
preamble hereof.
C-3
"EBITDA" means for the Consolidated Group, for the four most recent fiscal
quarters ending prior to the date of determination, the aggregate amount of
earnings from continuing operations on a consolidated basis before interest
expense, taxes, depreciation, amortization, any other nonrecurring or
restructuring charges (other than any nonrecurring or restructuring charges
representing expenses or charges incurred in the ordinary course of business)
and without giving effect to any extraordinary gain or loss or gains or losses
from asset sales outside of the ordinary course of business. EBITDA shall be
determined in accordance with generally accepted accounting principles.
"Exercise Date" means the date of the giving of the Exercise Notice.
"Exercise Notice" means the notice of the exercise of the Noteholder's
right to receive the Rights Fee pursuant to Section 2.01 hereof
"Exercise Period" means the period beginning on (i) the earlier to occur
of (A) January 16, 2003 or (B) occurrence of an Event of Default which is
continuing under either the Note Agreement or the Credit Agreement and (ii)
ending on January 16, 2005.
"Fair Market Value" means the value of the Consolidated Group determined
by an Independent Financial Expert, using a multiple of EBITDA which shall
represent the average multiples used in valuations of comparable entities (that
is entities that are engaged in textile manufacturing) for the twelve month
period prior to the date of determination of Fair Market Value (or such shorter
period for which such information shall be available). In determining such
average multiple, the Independent Financial Expert shall be directed to make
appropriate adjustments, if necessary, to reflect any variations used in such
valuations from the factors taken into account in calculating EBITDA hereunder.
Notwithstanding the foregoing, if the capital stock of the Company is registered
under the Securities and Exchange Act of 1934, as amended, and traded on a
national stock exchange (including NASDAQ National Market System), "Fair Market
Value" shall be the product of (i) the average closing bid price of such stock
for the forty-five (45) day period preceding the Exercise Date and (ii) the
number of shares of capital stock of Company outstanding on the Exercise Date.
"Independent Financial Expert" means a nationally recognized investment
banking firm reasonably acceptable to the Company (i) which does not (and whose
directors, officers and affiliates do not) have a direct or indirect financial
interest in any of the Consolidated Group, (ii) which has not been, and, at the
time it is called upon to give independent financial advice to any of the
Consolidated Group, is not (and none of whose directors, officers, employees or
affiliates is) a promoter, director or officer of any of the Consolidated Group
or any of its affiliates, or an underwriter with respect to any of the
Consolidated Group's securities and (iii) which does not provide any advice or
opinions to the Company or any of its affiliates except as an independent
financial expert. An Independent Financial Expert may be compensated by the
Company for opinions or services it provides as an Independent Financial Expert.
"Note Agreement" has the meaning set forth in the Preliminary Statements.
"Noteholder" has the meaning set forth in the introductory paragraph
hereof.
C-4
"Notes" means the Notes issued by Company pursuant to the Note Agreement.
"Rights" means the equity appreciation right granted to the Noteholder
pursuant to this Agreement.
"Rights Fee" means the value of the Rights as at the date of determination
as provided in Section 2.02 hereof.
7. Article II
RIGHTS
7A. Section 2.01 Grant. The Company hereby grants, transfers, conveys and
assigns to the Noteholder the right to receive, at the Noteholder's option, the
Rights Fee. The Noteholder shall exercise its rights hereunder by the giving to
the Company, at any time during the Exercise Period, an Exercise Notice in the
manner provided in Section 3.01 hereof. Such Exercise Notice shall be dated the
Exercise Date and shall set forth the name of an Independent Financial Expert
selected by the Noteholder, if the Noteholder shall require that an Independent
Financial Expert determine the Fair Market Value.
7B. Section 2.02 Rights Fee.
(a) (a) Except as provided in Sections 2.03 and 2.05, the Rights Fee
shall equal the greater of:
(i) (i) the product of 3% times the Fair Market Value; or
(ii) (ii) $300,000.00.
(b) (b) In the event the Company has paid indefeasibly in full all
amounts that are due or may be due under the Note Agreement or any Related
Document not later than January 15, 2003, the Rights Fee shall equal $0.
7C. Section 2.03 Computation.
(a) (a) If the Company's capital stock is traded on a national stock
exchange the Fair Market Value shall be determined in the manner set forth in
the definition of such term based on the price of such capital stock. If the
Company's capital stock is not traded on a national stock exchange, the
Noteholder may (in its sole discretion) require that Company promptly, upon
receipt of the Exercise Notice, retain at Company's expense the Independent
Financial Expert specified in the Exercise Notice to determine the amount of the
Rights Fee. The Company shall furnish to the Independent Financial Expert all
financial information and such other information regarding the Consolidated
Group, the Independent Financial Expert shall request from time to time. The
Company further agrees that it will permit the Independent Financial Expert to
examine the corporate books and financial records of the Consolidated Group and
make copies thereof or extracts therefrom and to discuss the affairs, finances
and accounts of
C-5
any of such corporations with the principal officers of the Company and its
independent public accountants, all at such reasonable times and as often as the
Independent Financial Expert may reasonably request. The Company acknowledges
and agrees that the prompt engagement of the Independent Financial Expert and
furnishing of requested information is necessary for the determination of the
Rights Fee. The Independent Financial Expert shall deliver to the Noteholder its
report, in scope and detail reasonably satisfactory to the Noteholder, not later
than sixty (60) days following the Exercise Date.
(b) (b) In the event the Company fails to engage such Independent
Financial Expert within 20 days following the Exercise Date or fails at any time
to furnish promptly information requested under clause (a) of this Section 2.03,
then the Rights Fee shall equal $1,500,000.00 and shall be immediately due and
payable to the Noteholder upon demand.
7D. Section 2.04 Payment. Within 3 days of the establishment of the
Rights Fee and in no event later than the 90th day after the Exercise Date, the
Company shall pay the Rights Fee in immediately available funds.
7E. Section 2.05 Financial Information. The Company hereby covenants and
agrees to furnish to the Noteholder the financial information set forth in
Paragraph 5A of the Note Agreement by the date required under the Note Agreement
whether or not the Note Agreement shall then be in full force and effect or any
obligations remain unpaid thereunder. In the event the Company shall fail at any
time during the Exercise Period to furnish such information, and such failure
continues for thirty (30) days following notice of such failure from the
Noteholder, no Exercise Notice shall be required hereunder and the Rights Fee
shall equal $1,500,000.00 and shall become immediately due and payable. Such
Rights Fee shall be paid immediately to the Noteholder without further demand or
notice.
8. ARTICLE III
MISCELLANEOUS
8A. Section 3.01 Notice. Any notice or communication shall be in writing
and delivered by telecopy or in person or mailed by first-class mail or
overnight courier addressed as follows:
If to the Company: Cone Xxxxx Corporation
0000 Xxxxx Xxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
C-6
if to the Noteholder: The Prudential Insurance Company of America
c/o Prudential Capital Corporation
Three Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Managing Director
The Company or the Noteholder by notice may designate additional or
different addresses for subsequent notices or communications.
8B. Section 3.02 GOVERNING LAW; SEVERABILITY. THE LAW OF THE STATE OF NEW
YORK SHALL GOVERN THIS AGREEMENT BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. IF ONE OR MORE PROVISIONS OF
THIS AGREEMENT ARE HELD TO BE UNENFORCEABLE UNDER APPLICABLE LAW, SUCH
PROVISIONS SHALL BE SEVERED FROM THIS AGREEMENT AS IF SUCH PROVISIONS WERE NOT
INCLUDED AND THE BALANCE OF THIS AGREEMENT SHALL BE ENFORCEABLE IN ACCORDANCE
WITH ITS TERMS.
8C. Section 3.03 Jurisdiction; Consent to Service of Process.
(a) (a) The Company hereby irrevocably and unconditionally submits, for
itself and its property, to the jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York, New York, and
any Appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement or any related documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in New York or, to the extent permitted
by law, in such Federal court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law.
(b) (b) The Company hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection that it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any New York State or
Federal court. Each of the parties hereto hereby irrevocably waives, to the
fullest extent permitted by law, the defense or any inconvenient forum to the
maintenance of such action or proceeding in any such court.
C-7
(c) (c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 3.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
[Signature page follows]
C-8
IN WITNESS WHEREOF, the Company and the Noteholder have caused this
Agreement to be executed by their duly authorized officers as of the day and
year first above written.
CONE XXXXX CORPORATION
By /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: EVP & CFO
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By_______________________________
Name:
Title:
C-9
ACKNOWLEDGMENT AND AGREEMENT
Each of the undersigned hereby acknowledges and agrees to the terms and
conditions of Equity Appreciation Rights Agreement (the "Agreement") dated as of
the date hereof and attached hereto and confirms that the Agreement is a
guaranteed obligation under the Facility Guaranty Agreement. Each of the
undersigned shall execute and deliver such other documents and instruments, in
form and substance reasonably satisfactory to Prudential, and shall take such
other action as Prudential may reasonably request to effectuate and carry out
the provisions of the foregoing Agreement.
IN WITNESS WHEREOF, the party below has caused this Acknowledgment and
Agreement to be duly executed as of the date of the Agreement.
CIPCO S.C, INC.
By /s/X. Xxxxx Wehnold
Name: W. Xxxxx Xxxxxxx
Title: Treasurer
CONE FOREIGN TRADING LLC
By /s/Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
C-10
