Exhibit 99(c)
SECOND AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS SECOND AMENDMENT TO NOTE PURCHASE AGREEMENTS, dated as of the 6th
day of December, 2006 (this "Amendment"), is made by and between Xxxx, Inc., a
North Carolina corporation (the "Company"), and the holders of Notes (as defined
in the Note Purchase Agreements referred to below) listed on Schedule A (the
"Noteholders").
RECITALS
A. The Company and certain financial institutions or entities have heretofore
entered into separate and several Note Purchase Agreements, each dated as of
March 4, 1998, as amended by that certain First Amendment to Note Purchase
Agreements, dated as of January 31, 2002 (collectively, the "Note Purchase
Agreements"), pursuant to which the Company has issued its $20,000,000 7.76%
Series A Senior Notes due March 15, 2008 collectively (the "Series A Notes") and
its $55,000,000 7.76% Series B Senior Notes due March 15, 2010 (collectively,
the "Series B Notes", and together with the Series A Notes, the "Notes").
Capitalized terms used herein without definition shall have the meanings given
to them in the Note Purchase Agreements.
B. The Company has requested that the Noteholders amend the Note Purchase
Agreements as set forth herein, and the Noteholders have agreed to effect such
amendments upon the terms and conditions set forth herein.
STATEMENT OF AGREEMENT
The parties hereto agree as follows:
1. Interest Rate. Effective December 1, 2006, the principal amount of the
Notes will bear interest at a rate equal to 8.80% per annum. Accordingly, all
references in the Note Purchase Agreements to "7.76%" as the rate of interest
applicable to the Notes shall be deemed to read "8.80%," and all references in
the Note Purchase Agreements to "9.76%" as the rate of interest applicable to
overdue payments of principal, interest or any Make-whole Amount shall be deemed
to read "10.80%."
2. Amendment to Section 5.15. Section 5.15 of each of the Note Purchase
Agreements is amended by replacing the reference to "March 8, 1998" with "the
Second Amendment Effective Date".
3. Amendment to Section 8. Section 8 of each of the Note Purchase
Agreements is amended by adding a new Section 8.2A, immediately following
Section 8.2, as follows:
Section 8.2A Mandatory Offers of Prepayment.
(a) Within five (5) Business Days after any Asset Disposition (other than
(i) Asset Dispositions in any fiscal year of the Company with an aggregate
value not to exceed $250,000 and (ii) other Asset Dispositions made between
the Second Amendment Effective Date and the date of maturity of the Series
B Notes with an aggregate value not to exceed $1,000,000), the Company
shall give written notice of such Asset Disposition to each holder of
Notes, which notice shall contain and constitute an offer to prepay the
Notes as described in subparagraph (d) below in an amount equal to 100% of
the Net Cash Proceeds received by such Person in connection with such Asset
Disposition. Nothing contained in this subparagraph (a) shall permit the
Company or any of its Subsidiaries to make any Asset Disposition other than
in accordance with Section 10.5.
(b) Within five (5) Business Days after the issuance or incurrence by the
Company or any of its Subsidiaries of any Priority Debt (including Priority
Debt permitted under Section 10.2) or capital stock, the Company shall give
written notice of such issuance or incurrence of Debt or capital stock to
each holder of Notes, which notice shall contain and constitute an offer to
prepay the Notes as described in subparagraph (d) below in an amount equal
to 100% of the Net Cash Proceeds received by such Person in connection with
such issuance or incurrence. The provisions of this subsection shall not be
deemed to be implied consent to any such issuance or incurrence of Debt
otherwise prohibited by the terms and conditions of this Agreement.
(c) Within fifteen (15) Business Days after the end of each fiscal quarter
of the Company, the Company shall give written notice to each holder of
Notes of an offer to prepay the Notes as described in subparagraph (d)
below in an amount equal to the Excess Cash as of the last day of such
fiscal quarter, unless Excess Cash as of the last day of such fiscal
quarter does not exceed $250,000.
(d) The offer to prepay Notes contemplated by subparagraphs (a) through (c)
above shall be an offer to prepay, in accordance with and subject to this
Section, scheduled principal installments of the Notes of both Series in
chronological order (first to principal installments due on March 15, 2007,
second to principal installments due on March 15, 2008, third to principal
installments due on March 15, 2009 and finally to principal installments
due on March 15, 2010) on a date specified in such offer (the "Proposed
8.2A Prepayment Date"), which Proposed 8.2A Prepayment Date shall be not
less than 15 days and not more than 30 days after the date of the offer
(and if the Proposed Prepayment Date is not specified in such offer, the
Proposed Prepayment Date shall be the first Business Day after the 30th day
after the date of such offer).
(e) A holder of Notes may accept the offer to prepay made pursuant to this
Section by causing a notice of such acceptance to be delivered to the
Company at least five days prior to the Proposed 8.2A Prepayment Date. If
the offer is rejected by any holder of Notes (either explicitly or through
the absence of an acceptance delivered in accordance with the preceding
sentence), the Company at least four days prior to the Proposed 8.2A
Prepayment Date shall give written notice to each holder of Notes that has
accepted the offer to prepay (the "Accepting Holders"), in which notice the
Company shall (i) state the aggregate outstanding principal amount of Notes
in respect of which the offer has been rejected (the "Rejected
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Prepayment"), and (ii) offer to increase the prepayment of the Notes of the
Accepting Holders by an amount equal to the Rejected Prepayment, such
further prepayment to be applied to scheduled principal installments of the
Notes held by the Accepting Holders in chronological order.
(f) Prepayment of the Notes to be prepaid pursuant to this Section shall be
made, together with interest accrued on the amount so prepaid, but without
Make-Whole Amount or other premium, on the applicable Proposed 8.2A
Prepayment Date.
4. Amendment to Section 8.4. Section 8.4 of each of the Note Purchase
Agreements is hereby replaced in its entirety with the following:
Section 8.4 Allocation of Partial Prepayments. In the case of partial
prepayment of the Notes (other than a prepayment pursuant to Section 8.2 or
Section 8.2A), the principal amount of the Notes to be prepaid shall be
allocated among all of the Notes of both Series at the time outstanding in
proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment. In the case of an
offer of partial prepayment of the Notes pursuant to Section 8.2A, the
principal amount of the Notes offered to be prepaid shall be allocated
among all of the Notes (or if the offer is made under Section 8.2A(e), all
of the Notes of the Accepting Holders) of both Series at the time
outstanding in proportion, as nearly as practicable, to the respective
scheduled principal installments on such Notes next due and payable in
chronological order, and with respect to each scheduled principal payment,
shall be allocated pro rata among the holders, or the Accepting Holders, as
appropriate, to whom such scheduled payment is due.
5. Amendment to Section 10.1. Section 10.1 of each of the Note Purchase
Agreements is hereby replaced in its entirety with the following:
Section 10.1. Certain Financial Limits. The Company shall not at any time
permit:
(a) Tangible Net Worth to be less than the sum of (i) $60,000,000, plus
(ii) an aggregate amount equal to 50% of its Consolidated Net Income (but,
in each case, only if a positive number) for each completed fiscal quarter
beginning with the fiscal quarter ended January 27, 2002, plus (iii) an
amount equal to Restructuring Charges for each completed fiscal quarter
beginning with the fiscal quarter ended January 28, 2007; or
(b) Capital Expenditures of the Company and its Subsidiaries to exceed (i)
$3,000,000 in the aggregate during the Company's 2007 fiscal year, (ii)
$4,000,000 in the aggregate during the Company's 2008 fiscal year and (iii)
for any fiscal year of the Company thereafter, the sum of (A) $4,000,000
and (B) such additional amount of Capital Expenditures that may be incurred
without causing the Company to have a Fixed Charge Coverage Ratio (measured
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for the most recently ended four fiscal quarters of the Company for which
financial statements have been delivered to the holders of the Notes and
giving pro forma effect to the incurrence of such additional Capital
Expenditures as if they had been incurred during such period) of less than
2.25:1.0.
6. Amendment to Section 10.2(a). Section 10.2(a) of each of the Note
Purchase Agreements is hereby amended by (a) replacing the reference to "10% of
Consolidated Net Worth" in subparagraph (3)(ii) thereof with "15% of
Consolidated Net Worth" and (b) replacing subparagraph (4) thereof in its
entirety with the following:
(4) Notwithstanding the foregoing, (i) Consolidated Funded Debt shall not
at any time exceed: (A) 65% of Tangible Capitalization during the period
from the Effective Date of the First Amendment (as defined therein) through
April 30, 2003; (B) 57% of Tangible Capitalization during the period from
May 1, 2003 through April 30, 2004; and (C) 50% of Tangible Capitalization
at any time thereafter; and (ii) from and after the Effective Date of the
First Amendment (as defined therein), the Company will not, and will not
permit any Subsidiaries to, declare or make, or incur any liability to
declare or make, any Restricted Payment, unless the Fixed Charge Coverage
Ratio (measured for the most recently ended four fiscal quarters of the
Company for which financial statements have been delivered to the holders
of the Notes and giving pro forma effect to such Restricted Payment as if
it had been paid during such period) is at least equal to 2.25:1.00.
7. Addition of New Sections 10.2(c) and 10.2(d). Section 10.2 of each of
the Note Purchase Agreements is further amended by inserting the following
paragraphs (c) and (d) at the end of such Section:
(c) Without limitation of the foregoing restrictions, the Company shall not
at any time permit Priority Debt to exceed 15% of Consolidated Net Worth.
(d) The Net Cash Proceeds of the issuance or incurrence of any Priority
Debt shall be applied in accordance with Section 8.2A(b).
8. Amendment to Section 10.3. Section 10.3 of each of the Note Purchase
Agreements is amended by replacing subparagraph (k) of such Section in its
entirety with the following:
(k) other Liens not otherwise permitted by paragraphs (a) through (j)
securing Debt other than the principal credit facilities of the Company and
its Subsidiaries from time to time; provided that after giving effect to
the imposition of such Lien and the incurrence of the obligation secured
thereby, Priority Debt shall not exceed 15% of Consolidated Net Worth.
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9. Amendment to Section 10.5. Section 10.5 of each of the Note Purchase
Agreements is amended by replacing such Section in its entirety with the
following:
Section 10.5 Sale of Assets, etc. Except as permitted under Section 10.4,
the Company will not, and will not permit any of its Subsidiaries to, make
any Asset Disposition unless:
(a) in the good faith opinion of the Company, the Asset Disposition is in
exchange for consideration having a Fair Market Value at least equal to
that of the property exchanged and is in the best interest of the Company
or such Subsidiary; and
(b) immediately prior to and after giving effect to the Asset Disposition,
no Default or Event of Default would exist; and
(c) immediately after giving effect to the Asset Disposition, the
Disposition Value of all property that was the subject of any Asset
Disposition occurring in the then current fiscal year of the Company would
not exceed 15% of Consolidated Assets as of the end of the then most
recently ended fiscal quarter of the Company; and
(d) the Net Cash Proceeds from the Asset Disposition are applied in
accordance with Section 8.2A(a).
10. Amendment to Section 10. Section 10 of each of the Note Purchase
Agreements is amended by adding the following as new Sections 10.7 through
10.11:
Section 10.7. Sale and Lease-Back. The Company will not, and will not
permit any Subsidiary to, enter into or permit to remain in effect any Sale
and Leaseback Transaction with any Person.
Section 10.8. Sale or Discount of Receivables. The Company will not, and
will not permit any Subsidiary to, sell with recourse, or discount or
otherwise sell for less than the face value thereof, any of its notes or
accounts receivable.
Section 10.9. Change in Business. The Company will not, and will not permit
any Subsidiary to, enter into any business other than the business
presently conducted by the Company and its Subsidiaries and businesses
reasonably related thereto.
Section 10.10. Loans, Advances and Investments. The Company will not, and
will not permit any Subsidiary to, make or permit to remain outstanding any
loan or advance to, or own, purchase or acquire any stock, obligations or
securities of, or all or a substantial portion of the assets of, or any
other interest in, or make any capital contribution to, any Person (each,
an "Investment"), except that the Company or any Subsidiary may:
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(i) make or permit to remain outstanding Investments in or to any
Wholly-Owned Subsidiary and Investments outstanding on the Second
Amendment Effective Date and listed on Schedule 10.10 or any
Investments in new Wholly-Owned Subsidiaries not in excess of
$2,000,000 in the aggregate;
(ii) acquire and own stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing
to the Company or any Subsidiary;
(iii) own, purchase or acquire (A) prime commercial paper of, and time
deposits and certificates of deposit in, United States commercial
banks (having capital, surplus and undivided profits in excess of
$100,000,000) and whose long-term unsecured debt obligations (or the
long-term unsecured debt obligations of the bank holding company
owning all of the capital stock of such bank) are rated in one of the
top three rating classifications by at least one nationally recognized
rating agency (a "Qualifying Bank"), in each case to the extent due
within one year from the date of purchase and payable in the United
States in United States dollars, direct obligations of, or obligations
guaranteed by the United States of America, or any agency acting as an
instrumentality of the United States of America pursuant to authority
granted by the Congress of the United States of America, so long as
such obligation or guarantee shall have the benefit of the full faith
and credit of the United States of America which shall have been
pledged pursuant to authority granted by the Congress of the United
States of America and (B) money market accounts with any Qualifying
Banks, which accounts invest solely in assets of the type described in
clause (A);
(iv) make or permit to remain outstanding travel and other like
advances to officers and employees in the ordinary course of business;
(v) Capital Expenditures permitted to be made pursuant to Section
10.1(c); and
(vi) make or permit to remain outstanding other Investments in an
aggregate amount not in excess of $1,000,000 at any time.
Section 10.11. Restrictive Agreements. The Company will not permit any
Subsidiary to enter into or otherwise be bound by or subject to any
contract or agreement (including, without limitation, any provision of its
certificate or articles of incorporation or bylaws) that restricts its
ability (i) to pay dividends or other distributions on account of its
stock, (ii) to create, grant or permit to exist any Liens securing the
Notes or guarantees thereof or (iii) to guaranty the obligations of the
Company under the Notes and this Agreement; provided, however, that
Subsidiaries of the Company incorporated under the laws of China may agree
to the foregoing restrictions in credit facilities with Chinese financial
institutions so long as the aggregate amount committed and lent under such
credit facilities does not exceed $5,000,000.
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11. Amendment to Section 11.
(a) Section 11 is amended by replacing subparagraph (c) in its entirety
with the following:
(c) the Company defaults in the performance of or compliance with any
term contained in Section 10 or Section 7.1(d); or
(b) Section 11 is further amended by replacing references to
"$5,000,000" in subparagraph (f) with "$1,000,000".
12. Amendment to Schedule B. Schedule B is amended by replacing the
definitions of "Asset Disposition", "Default Rate" "Consolidated Net Worth" and
"Funded Debt" with the following:
"Asset Disposition" means any Transfer except:
(a) any Transfer from a Subsidiary to the Company or a Wholly-Owned
Subsidiary so long as immediately before and immediately after the
consummation of any such Transfer and after giving effect thereto, no
Default or Event of Default exists;
(b) any sale of real estate, machinery and equipment in connection
with the closure of the Company's upholstery fabric plants located in
Graham, North Carolina, Anderson, South Carolina and Lincolnton, North
Carolina; (ii) the sale of the Company's corporate headquarters
located in High Point, North Carolina; and (iii) the disposition of
assets described (as of the Second Amendment Effective Date) on the
Company's balance sheet as "Assets Held For Sale"; and
(c) any Transfer made in the ordinary course of business and involving
only property that is inventory held for sale.
"Consolidated Net Worth" means, at any time,
(a) the sum of (i) the par value (or value stated on the books of the
corporation) of the capital stock (but excluding Redeemable Preferred
Stock, treasury stock and capital stock subscribed but unissued) of
the Company and its Subsidiaries plus (ii) the amount of paid-in
capital and retained earnings of the Company and its Subsidiaries,
plus (iii) the amount equal to all Restructuring Charges for all
completed fiscal quarters, commencing with the fiscal quarter ended
January 28, 2007, in each case as such amounts would be shown on
consolidated financial statements of the Company and its Subsidiaries
as prepared in accordance with GAAP, minus
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(b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus
of Subsidiaries.
"Default Rate" means that rate of interest that is the greater of (i)
10.80% per annum or (ii) 2% over the rate of interest publicly announced
from time to time by JPMorgan Chase Bank, N.A. in New York, New York, as
its "base" or "prime" rate.
"Funded Debt" means, with respect to any Person, all Debt of such Person
which by its terms or by the terms of any instrument or agreement relating
thereto matures, or which is otherwise payable or unpaid, one year or more
from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more (including,
without limitation, an option of such obligor under a revolving credit or
similar agreement obligating the lender or lenders to extend credit over a
period of one year or more) from, the date of the creation thereof;
provided that Funded Debt shall include, as at any date of determination,
Current Maturities of Funded Debt. In the case of the Company "Funded Debt"
shall exclude that portion of the proceeds of the issuance of Funded Debt
of the Company consisting of industrial development revenue bonds which is
held by the trustee for such bonds pending withdrawal and application by
the Company.
13. New Definitions. The following defined terms and definitions are hereby
inserted in appropriate alphabetical order in Schedule B to each of the Note
Purchase Agreements:
"Capital Expenditures" means, as applied to any Person, all expenditures by
such Person which, in accordance with GAAP, would be classified as capital
expenditures, including without limitation Capital Leases.
"Consolidated EBITDAR" means, with reference to any period, the sum of (i)
all Consolidated Net Income, (ii) interest expense, income tax expense,
depreciation and amortization expense of the Company and its Subsidiaries
for such period (taken as a cumulative whole), as determined in accordance
with GAAP, after eliminating all offsetting debits and credits between the
Company and its Subsidiaries and all other items required to be eliminated
in the course of the preparation of consolidated financial statements of
the Company and its Subsidiaries in accordance with GAAP, and (iii)
Operating Lease Rentals, in each case for such period.
"Consolidated Fixed Charges" means, with reference to any period, the sum
of (i) (A) the Current Maturities of Funded Debt of the Company and its
Subsidiaries for such period (taken as a cumulative whole) and (B) the
interest expense of the Company and its Subsidiaries for such period (taken
as a cumulative whole), in each case as determined in accordance with GAAP,
after eliminating all offsetting debits and credits between the Company and
its Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the
Company and its Subsidiaries in accordance with GAAP, (ii) Operating Lease
Rentals and (iii) Restricted Payments, in each case for such period.
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"Excess Cash" means, as of the last day of any fiscal quarter of the
Company, the amount by which (x) the aggregate cash and cash equivalents of
the Company on hand as of the last day of such fiscal quarter exceeds (y)
$8,000,000.
"Fixed Charge Coverage Ratio" means, for any period for the Company and its
Subsidiaries measured on a consolidated basis, the ratio of (i) (A)
Consolidated EBITDAR minus (B) Capital Expenditures and income taxes paid
in cash to (ii) Consolidated Fixed Charges, in each case for such period.
"Investment" shall have the meaning set forth in Section 10.10.
"Net Cash Proceeds" means (i) with respect to any Asset Disposition, the
amount of all cash, checks, notes, instruments, and other items of payment
received (directly or indirectly) from time to time (whether as initial
consideration or through the payment of deferred consideration) by or on
behalf of such Person, in connection therewith after deducting therefrom
only (A) reasonable expenses related thereto incurred by such Person in
connection therewith and (B) taxes paid or payable to any taxing
authorities by such Person in connection therewith and (C) amounts
necessary to satisfy in full any Indebtedness secured by the assets that
are the subject of such Asset Disposition and (ii) with respect to the
issuance or incurrence of any Debt or capital stock by the Company or any
of its Subsidiaries, the aggregate amount of cash received (directly or
indirectly) from time to time (whether as initial consideration or through
the payment or disposition of deferred compensation) by or on behalf of
such Person in connection therewith, after deducting therefrom only (A)
reasonable expenses related thereto incurred by such Person in connection
therewith and (B) taxes paid to any taxing authorities by such Person in
connection therewith, to the extent, but only to the extent, that the
amounts so deducted are (1) actually paid to a Person that, except in the
case of reasonable out-of-pocket expenses, is not an Affiliate of such
Person or any of its Subsidiaries and (2) properly attributable to such
transaction or to the asset that is the subject thereof.
"Operating Lease Rentals" means, with reference to any period, all fixed
rents or charges (including as such all payments which the lessee is
obligated to make on termination of the lease or surrender of the property)
payable by the Company and its Subsidiaries (as lessee, sublessee, license,
franchisee or the like) under all leases, licenses, or other agreements for
the use or possession of real or personal property, tangible or intangible
(except Capital Leases) having a term of more than one year (whether as an
initial term or any extension or renewal thereof and including options to
renew or extend any term, whether or not exercised), during such period, of
the Company and its Subsidiaries for such period (taken as a cumulative
whole), as determined in accordance with GAAP, after eliminating all
offsetting debits and credits between the Company and its Subsidiaries and
all other items required to be eliminated in the course of the preparation
of consolidated financial statements of the Company and its Subsidiaries in
accordance with GAAP.
"Proposed Prepayment Date" shall have the meaning set forth in Section
8.2A(e).
"Rejected Prepayment" shall have the meaning set forth in Section 8.2A(f).
"Restricted Payments" means (a) dividends or other distributions or
payments on capital stock or other equity interests of the Company or any
Subsidiary (except (i) distributions in such stock or other equity
interests and (ii) dividends, distributions and payments on capital stock
of any Subsidiary paid to the Company or on a pro rata basis to all
shareholders of such Subsidiary) and (b) the redemption or acquisition of
such stock or other equity interests of the Company or any Subsidiary
(except when solely in exchange for such stock or other equity interests or
when made by any Wholly-Owned Subsidiary).
"Restructuring Charges" means, collectively, (i) all cash and non-cash
restructuring expenses and restructuring-related costs directly related to
(A) the closing of the Company's upholstery fabric plants in Graham, North
Carolina, Anderson, South Carolina and Lincolnton, North Carolina, (B) the
previous closing of the Company's upholstery fabrics plant in Chattanooga,
Tennessee, (C) the closing of the Company's upholstery prints plant in
Burlington, North Carolina, and (D) the sale of the Company's corporate
headquarters located in High Point, North Carolina and the related costs
associated with moving such headquarters to a new location, so long as the
foregoing restructuring expenses and restructuring-related costs paid in
cash do not exceed $4,000,000 in the aggregate during the term of this
Agreement, and (ii) non-cash write-downs of deferred tax assets of the
Company accounted for as "valuation allowances."
"Sale and Leaseback Transaction" shall mean any arrangement with any Person
or to which such Person is a party providing for the leasing by the Company
or any Subsidiary of real or personal property which has been or is to be
sold or transferred by the Company or any Subsidiary to any Person to which
funds have been or are to be advanced on the security of such property or
rental obligations of the Company or any Subsidiary.
"Second Amendment" means the Second Amendment to Note Purchase Agreements,
dated as of the Second Amendment Effective Date, among the Company and the
Noteholders (as defined therein), which amends this Agreement.
"Second Amendment Effective Date" means December 6, 2006.
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14. Amendment to Schedules. Schedules 5.4 and 5.15 of the Note Purchase
Agreements are hereby amended by replacing such Schedules in their entirety with
Schedules 5.4 and 5.15 attached hereto. The Note Purchase Agreements are further
amended by adding Schedule 10.10 attached hereto as Schedule 10.10 to each Note
Purchase Agreement.
15. Conditions to Effectiveness of this Amendment. Notwithstanding any
other provision of this Amendment and without affecting in any manner the rights
of the Noteholders hereunder, it is understood and agreed that this Amendment
shall not become effective, and the Company shall have no rights under this
Amendment, until (i) the Company has prepaid the principal amount of the Series
B Notes by an amount equal to $3,000,000, together with accrued and unpaid
interest on such principal prepayment, such principal and interest to be
allocated to the Series B Notes in proportion to the respective unpaid principal
amounts thereof and such principal amount to be applied to the scheduled
principal installments of the Series B Notes due on March 15, 2007, (ii) the
Company shall have paid the fees, charges and disbursements of counsel to the
Noteholders, incurred in connection with this Amendment and (iii) the
Noteholders shall have received each of the following documents:
(a) executed counterparts to this Amendment from the Company and each of
the Noteholders;
(b) an amended and restated Note for each Noteholder, which amended and
restated Note will provide for such increased interest rate and otherwise
be in form and substance equivalent to the Notes delivered at the Closing;
(c) a certificate certifying as to articles of incorporation, bylaws and
resolutions of the Company attached thereto and other corporate proceedings
relating to the authorization, execution and delivery of the First
Amendment, this Amendment and the Notes contemplated pursuant to
subparagraph (b) above;
(d) an opinion related to the Company and this Amendment, covering such
matters and otherwise in form and substance reasonably satisfactory to the
Noteholders; and
(e) a copy of the principal credit facility of the Company, together with
all amendments thereto.
16. Representations and Warranties. To induce the Noteholders to enter into
this Amendment, the Company represents and warrants to the Noteholders that:
(a) the execution, delivery and performance by the Company of this
Amendment (i) are within its corporate power and authority; (ii) have been
duly authorized by all necessary corporate action; (iii) will not
contravene, result in a breach of, or constitute any default under, or
result in the creation of any Lien in any property of the Company or any
Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other
agreement or instrument to which the Company or any Subsidiary is bound or
by which the Company or any Subsidiary or any of their respective
properties may be bound or by which the Company or any Subsidiary or any of
its respective properties may be bound or affected, (ii) conflict with or
result in a breach of any of the terms, conditions or provisions of any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary;
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(b) this Amendment has been duly executed and delivered for the benefit of
or on behalf of the Company and constitutes a legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms;
(c) after giving effect to this Amendment, the representations and
warranties contained in Section 5 of each of the Note Purchase Agreements
are true and correct in all material respects (except for any
representations or warranties that speak only as of a specific earlier
date), and no Default or Event of Default has occurred and is continuing as
of the date hereof; and
(d) the Lien Release has been consummated.
17. Miscellaneous.
17.1 Counterparts; Effectiveness. This Amendment may be executed in any
number of counterparts and by different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. Delivery of an executed signature page to this Amendment by
facsimile or electronic mail transmission shall be effective as delivery of
a manually executed counterpart thereof. This Amendment shall become
effective on the date on which all conditions set forth in Section 16 above
have been satisfied.
17.2 Effect of Amendment. From and after the Effective Date, all references
in any Note Purchase Agreement to "this Agreement," "hereunder," "hereof,"
"herein" or words of like import referring to such Note Purchase Agreement
shall mean and be a reference to such Note Purchase Agreement as amended by
this Amendment. This Amendment is limited as specified and shall not
constitute or be deemed to constitute an amendment, modification or waiver
of any provision of any Note Purchase Agreement except as expressly set
forth herein. Except as expressly amended hereby, the Note Purchase
Agreements shall remain in full force and effect in accordance with their
terms.
17.3 Governing Law. This Amendment shall be governed by and construed and
enforced in accordance with the laws of the State of New York, excluding
choice-of-law principles of such laws that would require the application of
the laws of a jurisdiction other than the State of New York.
17.4 Severability. To the extent any provision of this Amendment is
prohibited by or invalid under the applicable law of any jurisdiction, such
provision shall be ineffective only to the extent of such prohibition or
invalidity and only in any such jurisdiction, without prohibiting or
invalidating such provision in any other jurisdiction or the remaining
provisions of this Amendment in any jurisdiction.
12
17.5 Successors and Assigns. This Amendment shall be binding upon, inure to
the benefit of and be enforceable by the respective successors and
permitted assigns of the parties hereto and of all other holders of Notes
(including, without limitation, any subsequent holder of a Note).
17.6 Construction. The headings of the various sections and subsections of
this Amendment have been inserted for convenience only and shall not in any
way affect the meaning or construction of any of the provisions hereof.
13
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their duly authorized officers as of the date first above written.
XXXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: VP Finance, Treasurer
------------------------------------
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------
Title: Authorized Signatory
By: /s/ Xxxxx Xxxxx
------------------------------------
Name: Xxxxx Xxxxx
------------------------------------
Title: Authorized Signatory
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
------------------------------------
Title: Vice President
------------------------------------
Signature Page to Second Amendment
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA INVESTMENTS, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
------------------------------------
Title: Vice President
------------------------------------
CONNECTICUT GENERAL LIFE INSURANCE COMPANY,
on behalf of one or more separate accounts
By: CIGNA INVESTMENTS, INC.
By: /s/ Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
------------------------------------
Title: Vice President
------------------------------------
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: /s/ Xxx Xxxxx
------------------------------------
Name: Xxx Xxxxx
------------------------------------
Title: Vice President
------------------------------------
J. ROMEO & CO.
By: /s/ Xxxxxx Xxxxxx
------------------------------------
Name: Xxxxxx Xxxxxx
------------------------------------
Title: Vice President
------------------------------------
Signature Page to Second Amendment
HARE & CO.
By: /s/ Xxx Xxxx
------------------------------------
Name: Xxx Xxxx
------------------------------------
Title: Authorized Representative
ACE PROPERTY AND CASUALTY
INSURANCE COMPANY
By: COLUMBIA MANAGEMENT ADVISORS, INC.
By: /s/ Xxxxxxx X.Xxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxx
------------------------------------
Title: Director
------------------------------------
Signature Page to Second Amendment
UNITED OF OMAHA LIFE INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
------------------------------------
Title: Authorized Representative
MUTUAL OF OMAHA INSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxx
------------------------------------
Title: Authorized Representative
Signature Page to Second Amendment
PRUDENTIAL RETIREMENT INSURANCE ANNUITY
COMPANY
By: Prudential Investment Management, Inc.,
as Investment Manager
By: /s/ Xxx Xxxxx
------------------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ Xxx Xxxxx
------------------------------------
Vice President
Signature Page to Second Amendment
Schedule 5.4
------------
Subsidiaries, etc.
------------------
List of Subsidiaries
Name of Subsidiary Jurisdiction of Incorporation
------------------ -----------------------------
Culp International Holdings Ltd. Cayman Islands
Culp Fabrics (Shanghai) Co., Ltd. People's Republic of China
Culp Fabrics (Shanghai) International
Trading Co., Ltd. People's Republic of China
Rayonese Textile Inc. Canada
3096726 Canada Inc. Canada
Executive Officers and Directors and Affiliates
Executive Officers and Directors:
Xxxxxx X. Xxxx, III Chairman of the Board of Directors and Chief
Executive Officer
Xxxxxxxx X. Xxxxx Director, President and Chief Operating Officer
Xxxxxx X. Xxxx, XX President, Xxxx Home Fashions
Xxxxxxx X. Xxxxxx Senior VP- Human Resources; Corporate Secretary
Xxxxxxx X. Xxxxxxx VP - Finance, Treasurer
Xxxx X.X. Xxxxxx Director
Xxxxxx X. Xxxx Director
Xxxxxxx X. Xxxxxx Director
Xxxxxxx X. Xxxxxx Director
Xxxxxxx X. XxXxxxxxxx Director
Holder of ten percent (10%) or more of the Company's capital stock:
The Xxxxxx X. Xxxx, Xx. Family Trust.
Schedule 5.15
-------------
Indebtedness
------------
o $75,000,000 Senior Notes
Series A Senior Notes $ 12,300,000
Series B Senior Notes $ 30,140,000
Real Estate Loan - Wachovia Bank $ 4,242,000
Canadian Government Loan $ 714,000
Revolving Line of Credit $ 8,000,00 (1)
o Vendor-Financed Equipment Purchases
Staubli $ 425,044
Picanol $ 1,261,403
o Letters of Credit
Workers Compensation $ 2,725,000
Inventory Purchases $ 219,000
Interest Rate Swap - Wachovia Real Estate Loan $ 2,170,000 (2)
(1) There were no borrowings outstanding under this agreement as of October 29,
2006.
(2) This amount represents the notional amount under this agreement.
Schedule 10.10
--------------
Investments
-----------
See list of Subsidiaries set forth in Schedule 5.4.
