AMENDMENT NO. 5 TO NOTE AGREEMENT
THIS AMENDMENT NO. 5 TO NOTE AGREEMENT (this "Amendment"), is entered into
as of December 28, 1995, by and between THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA ("Prudential") and XXXXXX INDUSTRIES, INC. (the "Company").
WITNESSETH:
WHEREAS, the parties hereto have executed and delivered that certain Note
Agreement, dated as of December 20, 1988 (as heretofore amended, the "Note
Agreement"; capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Note Agreement);
WHEREAS, Prudential is the holder of the single Note issued to date under
the Note Agreement; and
WHEREAS, the Company has requested that, subject to the terms and
conditions set forth herein, the Note Agreement be amended to the effect and as
set forth herein and that a replacement Note be issued in accordance herewith;
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. Amendment of Paragraph 6C(1). Paragraph 6C(1) of the Note Agreement is
hereby amended by (i) deleting the word "and" at the end of clause (viii)
thereof, (ii) adding the word "and" at the end of clause (ix) thereof, and (iii)
adding a new clause (x) thereto, which shall read as follows:
"(x) any Liens on accounts receivable sold by the Company pursuant to sales
permitted by paragraph 6C(7),"
2. Amendment of Paragraph 6C(2)(a). Clause (vi) of paragraph 6C(2)(a) of
the Note Agreement is hereby amended and restated in its entirety as follows:
"(vi) Current Debt of the Company in an aggregate amount not to exceed (x)
at any time during the period commending on October 31, 1995 and ending on March
31, 1996, inclusive $35,000,000, and (y) at any other time, $25,000,000,"
3. Amendment of Paragraph 6C(7). Paragraph 6C(7) of the Note Agreement is
hereby amended by adding the following clause immediately before the period at
the end of said paragraph:
", except that after December 1, 1995, the Company may factor to SunTrust
Bank, Atlanta pursuant to that certain factoring Agreement dated December 27,
1995, between SunTrust Bank, Atlanta and the Company, specific accounts
receivable in return for up to $10,000,000 in the aggregate of factoring
advances at a minimum 90% factoring advance rate, provided that all such
factoring advances are repaid on or prior to the earlier of (i) the date on
which the Loan Agreement (as defined in paragraph 6E) is replaced on terms and
conditions satisfactory to Required Holders in their sole discretion, or (ii)
February 28, 1996."
4. Amendment of Paragraph 6E(4). Effective as of the date hereof, paragraph
6E(4) of the Note Agreement is hereby amended by amending and restating clause
(viii) thereof in its entirety as follows and adding new clauses (ix) and (x)
thereto, which shall read as follows, respectively:
"(viii) For the twelve month period ended on June 30, 1995 and on the last
day of the fiscal quarter of the Company ended on September 30, 1995, Debt
Service Coverage equal to less than 125%.
"(ix) On the last day of the fiscal quarter of the Company ending on
December 31, 1995 and on the last day of the fiscal quarter of the Company
ending on March 31, 1996, Debt Service Coverage equal to less than 40%.
"(x) On the last day of each fiscal quarter of the Company after march 31,
1996, Debt Service Coverage equal to less than 125%."
5. Amendment of Paragraph 6E(5). Effective as of the date hereof, clause
(ii) of paragraph 6E(5) of the Note Agreement is hereby amended and restated in
its entirety as follows:
"(ii) Fixed Charge Coverage Ratio for each period set forth below at less
than the respective ratios set forth below opposite each such period:
Period Minimum Fixed
Charge Coverage Ratio
Three months ended December 31, 1993 1.10:1.00
Six months ended March 31, 1994 1.50:1.00
Nine months ended June 30, 1994 1.40:1.00
Twelve months ended September 30, 1994 1.50:1.00
Twelve months ended December 31, 1994 1.50:1.00
Twelve months ended March 31, 1995 1.50:1.00
Twelve months ended June 30, 1995 1.75:1.00
Twelve months ended September 30, 1995 2.00:1.00
Twelve months ended December 31, 1995 0.01:1.00
Twelve months ended March 31, 1996 Not Applicable
On the last day of each fiscal quarter of the 2.00:1.00"
Company thereafter
6. Amendment of paragraph 6F. Effective as of the date hereof, paragraph 6F
of the Note Agreement is hereby amended and restated in its entirety as follows:
"6F. Reduction of Certain Debt. The Company covenants that it will not
permit the principal amount outstanding under the Loan Agreement (as defined in
paragraph 6E), or under the line of credit with First Union National Bank of
South Carolina, to be reduced at any time during the period commencing on
December 15, and ending when such agreement ans such line of credit are replaced
on terms and conditions satisfactory to Required Holders in their sole
discretion."
7. Effective Date. Each of Sections 1 through 6 (inclusive) of this
Amendment shall become effective on the date hereof (the"Effective Date"),
subject in all cases to the following having occurred to the satisfaction of
Prudential:
(a) receipt by Prudential of executed copies of (i) the Factoring Agreement
dated December 27, 1995 between Sun Trust Bank, Atlanta and the Company (the
"Factoring Agreement") and all financing statements related thereto, and (ii)
Amendment No. 3 to the Loan Agreement (as defined in paragraph 6E of the Note
Agreement), in each case, in form and substance satisfactory to Prudential in
its sole discretion and certified by a senior officer of the Company as being a
true and complete document which is in full force and effect with all conditions
therein having been fully satisfied;
(b) receipt by Prudential of an Officer's Certificate (i) stating that
immediately after the Effective Date, there exists no Event of Default or
Default or any "Default", "Event of Default" or other default (or event which
with the passage of time or the giving of notice or both would constitute a
default) under any Debt agreement of the Company or any of its Subsidiaries and
(ii) demonstrating compliance, in reasonable detail, with the covenants
contained in paragraph 6 of the Note Agreement, as of, and for the period ended,
September 30, 1995;
(c) receipt by Prudential of a $50,000 modification fee, paid by wire
transfer of immediately available funds to Prudential's Account No. 000-00-000
at Xxxxxx Guaranty Trust Company of New York, 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 (ABA No.: 021-000-238); and
(d) receipt by Prudential of an executed replacement Note in the form of
Exhibit A attached hereto.
8. Representations and Warranties. The Company represents and warrants as
follows:
(a) Organization. Each of the Company and each Subsidiary is a corporation
duly organized and existing in good standing under the laws of the state of its
incorporation.
(b) Power and Authority. The Company has all requisite corporate power to
execute, deliver and perform its obligations under this Amendment, the Note
Agreement, as amended, and the replacement Note delivered hereunder
(collectively, the "Transaction Documents"). The execution, delivery and
performance by the Company of the Transaction Documents have been duly
authorized by all requisite corporate action on the part of the Company. The
Company has duly executed and delivered each of the Transaction Documents
constitutes the legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
(c) No Conflicts. Neither the execution and delivery of the Transaction
Documents by the Company, nor the consummation of the transactions contemplated
thereby, nor fulfillment of nor compliance with the terms and
provisions thereof will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of or result in the creation of any security interest, lien or other
encumbrance upon any of the properties or assets of the Company or any
Subsidiary pursuant to, the charter or by-laws of the Company or any Subsidiary,
any award of any arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute, law, rule or
regulation to which the Company or any Subsidiary is subject.
(d) Consents. Neither the nature of the business conducted by the Company
or any Subsidiary, nor any of their respective properties, nor any relationship
between the company or any Subsidiary and any other Person, nor any circumstance
in connection with the transactions contemplated by this Amendment is such as to
require any authorization, consent, approval, exemption or other action by or
notice to or filing with any court or administrative or governmental body or any
other Person in connection with the execution and delivery of this Amendment or
any other Transaction Document or fulfillment of or compliance with the terms
and provisions hereof or thereof.
(e) No Material Adverse Change. Except as previously disclosed to
Prudential in writing, there has been no material adverse change to the
business, operations, affairs, financial condition, assets, properties, profits
or prospects of the Company and its Subsidiaries taken as a whole since June 30,
1995.
(f) First Union National Bank of South Carolina. No default or event of
default has occurred and is continuing, or will occur upon the execution and
delivery of the Factoring Agreement or the consummation of the transactions
contemplated thereby, under the documents governing the company's line of credit
with First Union National Bank of South Carolina, and no amendment to any of
such documents or waiver of any provision thereof is necessary or desirable, or
will be necessary or desirable upon execution and delivery of the Factoring
Agreement or the consummation of the transactions contemplated thereby.
9. Miscellaneous.
(a) Upon and after the Effective Date, each reference to the Note Agreement
in the Note Agreement and each Note shall mean and be a reference to the Note
Agreement as amended by this Amendment.
(b) Except as specifically amended herein, the Note Agreement shall remain
in full force and effect, and is hereby 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 Prudential, nor constitute
a waiver of any provision of the Note Agreement, the Note or any other
document, instrument or agreement executed and delivered in connection with
the Note Agreement.
(d) The Company confirms its agreement, pursuant to paragraph 11B of the
Note Agreement, to pay promptly all expenses of Prudential related to this
Amendment and all matters contemplated hereby, including without limitation all
fees and expenses of Prudential's special counsel.
(e) THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW
YORK.
(f) This Amendment may be executed in counterparts, each of which shall be
deemed an original and all of which taken together shall constitute one and the
same document. Delivery of this Amendment may be made by telecopy of a duly
executed counterpart copy hereof.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute this Amendment as of the day and year first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Title: Senior Vice President
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Vice President
EXHIBIT A
XXXXXX INDUSTRIES, INC.
SENIOR NOTE DUE OCTOBER 31, 1998
No. A-1
$20,000,000 Original Issue Date: December 20, 1988
FOR VALUE RECEIVED, the undersigned, XXXXXX INDUSTRIES, INC., (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Delaware, hereby promises to pay to THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, or registered assigns, the principal sum of TWENTY MILLION
DOLLARS on October 31, 1998 with interest (computed on the basis of a 360-day
year -- 30-day month) (a) on the unpaid balance hereof at the "Specified Rate"
(as defined below) from the original issue date hereof, payable semi-annually on
the final day of October and April in each year, commencing with October 31, or
April 30 next succeeding the original issue date hereof, until the principal
hereof shall have become due and payable, and (b) on any overdue payment
(including any overdue prepayment) of principal, any overdue payment of premium
and, to the extent permitted by applicable law, any overdue payment of interest,
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) the Specified Rate plus 1.00% or (ii) the rate of interest publicly
announced by Xxxxxx Guaranty Trust Company of New York from time to time in New
York City as its Prime Rate.
Payments of principal, premium if any, and interest are to be made at the
main office of Xxxxxx Guaranty Trust Company of New York in New York City or at
such other place as the holder hereof shall designate to the Company in writing,
in lawful money of the United State of America.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to a Note Agreement, dated as of December 20, 1988 (as amended
or otherwise modified, herein called the "Agreement"), between the Company and
The Prudential Insurance Company of America and is entitled to the benefits
thereof. As provided in the Agreement, this Note is subject to prepayment, in
whole or from time to time in part, in certain cases without premium and in
other cases with a premium as specified in the Agreement.
This Note is a registered Note and as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or such
holders attorney duly authorized in writing a new Note for a like principal
amount will be issued to, and registered in the name of, the transferee. Prior
to due presentment for registration of transfer, the company may treat the
person to whose name this Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
The Company agrees to make prepayments of principal on the dates and in the
amounts specified in the Agreement.
"Specified Rate" means 10.84% prior to May 16, 1994, and 11.34% on and
after May 16, 1994.
In case an Event of Default, as defined in the Agreement, shall occur and
be continuing, the principal of this Note may be declared or otherwise become
due and payable in the manner and with the effect provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE.
The unpaid balance of the indebtedness evidenced by the Note in the
original amount of $20,000,000 (the "1994 Note"), dated May 16, 1994, issued by
the company in favor of The Prudential Insurance Company of America (which 1994
Note (i) re-evidenced the indebtedness theretofore evidenced by, (ii) was given
in substitution for, and not as payment of the indebtedness evidenced by, and
(iii) was in no way intended to constitute a novation or discharge of, the
indebtedness evidenced by the Note in the original amount of $20,000,000 (the
"Original Note"), dated December 20, 1988, issued by the Company in favor of The
Prudential Insurance Company of America) remains outstanding as of the date
hereof. This Note (i) merely re-evidences the indebtedness theretofore evidenced
by the 1994 Note (including the indebtedness evidenced by the Original Note),
(ii) is given in substitution for, and not as payment of the indebtedness
evidenced by the 1994 Note), (ii) is given in substitution for, and not as
payment of the indebtedness evidenced by the 1994 Note (including the
indebtedness evidenced by the Original Note) and (iii) is in no way intended to
constitute a novation or discharge of the indebtedness evidenced by the 1994
Note (including the indebtedness evidenced by the Original Note).
Dated: December 28, 1995 XXXXXX INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: Vice President
