1
Exhibit 10.10
SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT
SECOND AMENDMENT to Note Purchase Agreement, dated as of January 26,
1999, among CRONOS EQUIPMENT (BERMUDA) LIMITED (the "Company"), THE CRONOS GROUP
(the "Guarantor"), DK ACQUISITION PARTNERS, L.P. ("DK") and XXXXXXX XXXXX CREDIT
PARTNERS L.P. ("GSW' and together with DK, the "Purchasers").
RECITALS
A. The Company, the Guarantor and the Purchasers (as assignees of Sun
Life Insurance Company of America) are parties to that certain Note Purchase
Agreement, dated as of December 29, 1994 (as amended through the date hereof,
the "Note Agreement"). Capitalized terms used but not defined herein have the
meanings given to them in the Note Agreement.
B. The Company, the Guarantor and the Purchasers wish to amend the Note
Agreement as provided herein.
AGREEMENT
Now, therefore, in consideration of the mutual covenants and agreements
set forth herein and other good and valuable consideration, the Company, the
Guarantor and the Purchasers agree as follows:
Section 1. Amendments to Note Agreement. Effective as of the time on
which all of the conditions set forth in Section 6 are satisfied (such time
being the "Effective Time"):
(a) Section 4. 1. Paragraphs (a) and (b) of Section 4. 1 of the Note
Agreement shall be amended in their entirety to read as follows:
(a) The principal amount of the Notes shall be due and payable
as follows (payable as to each Note based upon outstanding principal
balance):
Date Principal Amount To be Repaid
---- -----------------------------
April 30, 1999 $695,000
July 31, 1999 $695,000
September 30, 1999 All of the remaining outstanding
principal balance
To the extent during the period commencing January 1, 1999 and ending
April 29, 1999, the Company prepays a portion of the outstanding principal
amount of the Notes, the Company may reduce (dollar for dollar up to a maximum
amount of $695,000) the amount of the payment required to be made on April 30,
1999.
(b) The Company shall pay interest on the unpaid principal amount of
each Note, at a rate per annum equal to the Interest Rate (as defined
below), on the last day of each month, commencing on January 1, 1999, until
repayment in full of all amounts due under the Notes. For purposes of this
Agreement, the term "Interest Rate" shall mean, for the period from and
after January 1, 1999, a rate of interest equal to the greater of (A) the
sum of (i) the Prime Rate (as defined below), plus (ii) 2.5 %, and (B) the
rate of interest per annum that the Company is required to pay under that
certain Amended and Restated Credit Agreement, dated as of June 24, 1997, by
and among Cronos Containers N.V., Containers LTD, Cronos Equipment Ltd,
Cronos Containers Inc., Cronos Capital Corp., Cronos Equipment (Bermuda)
Limited, as joint and several borrowers, each of the Banks that is or may
become a party thereto, Fleet Bank, N. A., as agent for the
E-14
2
Banks, and The Cronos Group, as Guarantor (each of Fleet Bank, N.A. and the
other Banks are referred to herein as "Banks"); provided, HOWEVER, that if
an Event of Default shall occur and be continuing, the Interest Rate shall
be the sum of (i) the Interest Rate in effect at such time, plus (ii) 2%
(the " Default Rate"). For purposes of this Agreement, the "Prime Rate"
shall mean the rate of interest per annum publicly announced from time to
time by Citibank, N.A. as its prime lending rate in effect at its principal
office in New York, each change in the Prime Rate to be effective on the
date such change is publicly announced."
(b) Article-IV. Article IV of the Note Agreement shall be amended by
adding a new Section 4.6 immediately following Section 4.5 thereof, which
new Section 4.6 shall read as follows:
"SECTION 4.6. ADDITIONAL AGREEMENT. Notwithstanding any provision of
this Agreement, in the event that the Company shall modify any existing
arrangements, or enter into any new arrangements, with the Banks or any
other lender to the Company whose loan proceeds are used to pay, in full or
in part, the Banks (a "New Arrangement ") which arrangements shall contain
any terms or conditions (a "More Favorable Term") that are more favorable or
beneficial to the Banks or such lender than the terms set forth in this Note
Agreement, including without limitation, with respect to interest rate,
payment terms, fees, reimbursement of costs and expenses, maturity,
prepayments, additional security or collateral, or information, the Company
and the Guarantor agree that this Note Agreement shall be deemed to be
automatically amended (without any further action by any of the parties
hereto) effective as of the date of the effectiveness of the New
Arrangements (or retroactively, if such New Arrangements apply
retroactively) to provide the Purchasers with the same More Favorable Term;
provided, however, that with respect to new or additional security or
collateral, the Purchasers shall be entitled to a security interest in such
collateral or security that is pari passu with the Banks' or such other
lender's security interest; provided further, however, that with respect to
payments to the Banks or such other lender, the Purchasers shall be entitled
to a pro rata portion (calculated based on outstanding principal amounts of
the obligations owed to the Banks or such other lender and to the
Purchasers) of such amounts; provided further, however, that this Section
4.6 shall not apply to (i) specific arrangements agreed to prior to
September 30, 1998 (i.e. Transamerica shares to be pledged to the Banks) or
(ii) a prepayment to the Banks resulting from the sale of collateral granted
to the Banks on or prior to January 1, 1999. It shall be a condition to the
effectiveness of any such More Favorable Term to the Banks or such other
lender, that the Purchasers receive the benefit of such More Favorable Term
at the same time as the Banks or such other lender. The Company agrees to
promptly (but in no event later than five business days prior to the
effectiveness of such New Arrangements) notify each of the Purchasers in
writing of any New Arrangements and the specific provisions of the More
Favorable Terms."
(c) Section- 11.1 (iii). Section 11.1 (iii) of the Note Agreement is
hereby amended by inserting the phrase "or any indebtedness or obligation
owed to the Banks" immediately following the phrase " $5,000,000 or more" in
such Section 11.1 (iii).
Section 2. Amendment to Schedules to the Notes. At the Effective
Time, the Company, the Guarantor and the Purchasers agree that Schedule I to
each of the promissory notes shall be replaced with Schedule I attached to
this Agreement. The Company represents and warrants to the Purchasers that
the loans represented by the promissory notes are unaffected by the
amendment of such Schedule I, that the transactions contemplated by this
Agreement did not and do not constitute a discharge or payment of the
original loans represented by the promissory notes and that the Liens and
Collateral securing the original loans pursuant to the Security Agreement
continue to secure the loans represented by the promissory notes.
Section 3. Amendment Fee. In consideration of the Purchasers
agreeing to the amendments to the Note Agreement referred to above the
Guarantor shall pay an amount in cash equal to (a) to DK, $200,000.00, and
(b) to GSCP, $78,125.00, for an aggregate amendment fee of $278,125.00.
Section 4. Confirmation of Agreements.
E-15
3
(a) Confirmation of Note Agreement. Notwithstanding any other
provisions of this Agreement, each of the Company and the Guarantor
acknowledges and agrees that the Note Agreement, as amended hereby,
remains in full force and effect.
(b) Confirmation of Security Agreement. The Company has
heretofore executed and delivered for the benefit of the Purchasers the
Security Agreement and the Company hereby acknowledges and agrees that,
notwithstanding the execution and delivery of this Agreement, the
Security Agreement remains in full force and effect and the rights and
remedies of the Purchasers thereunder, the obligations of the Company
thereunder and the liens and security interests created and provided for
thereunder remain in full force and effect and shall not be affected,
impaired or discharged hereby. Nothing herein contained shall in any
manner affect or impair the priority of the liens and security interests
created and provided for by the Security Agreement as to the
indebtedness which would be secured thereby prior to giving effect to
this Agreement. Without limiting the foregoing, the Company acknowledges
and agrees that all of its indebtedness, obligations and liabilities to
the Purchasers pursuant to the Note Agreement as amended hereby and the
Notes, including without limitation, all principal of and interest on
the loans represented by the Notes, shall constitute indebtedness
secured by the Security Agreement and shall be secured by, and entitled
to all the benefits of, the liens and security interest created and
provided for under the Security Agreement.
(c) Confirmation of Guarantee
(i) The Guarantor hereby consents to the Amendment to the
Note Agreement and the Notes as set forth herein and confirms all of
its obligations as guarantor under the Note Agreement remain in full
force and effect, and that all of the Company's indebtedness,
obligations and liabilities to the Purchasers pursuant to the Note
Agreement as amended hereby and the Notes, including, without
limitation, all principal of and interest on the loans represented
by the Notes, shall constitute indebtedness guaranteed by the
Guarantor pursuant to the Note Agreement.
(ii) Without limiting the foregoing, the Guarantor
acknowledges and agrees that all of the Company's and the
Guarantor's indebtedness, obligations and liabilities to the
Purchasers pursuant to the Note Agreement as amended hereby
including without limitation, all principal of and interest on loans
represented by the Notes shall constitute indebtedness secured by
the Security Agreement and shall be secured by, and entitled to all
of the benefits of, the liens and the security interest created and
provided for under the Security Agreement.
Section 5. Representations and Warranties of the Company and the
Guarantor. The Guarantor and the Company, jointly and severally, represent
and warrant to the Purchasers as of the date of this Agreement and as of the
Effective Time as follows:
(a) Power. Each of the Guarantor and the Company is a
corporation duly incorporated, validly existing and in good standing
under the laws of the jurisdiction of its incorporation. Each of the
Guarantor and the Company has the necessary corporate power and
authority, to execute and deliver this Agreement, the Amended and
Restated Notes and the other agreements executed in connection herewith
(together, the "Amendment Documents"), to perform its obligations
hereunder and thereunder and to consummate the transactions contemplated
hereby and thereby.
(b) Binding Effect. Each of the Amendment Documents has been
duly executed and delivered by the Guarantor and the Company, and each
of the Amendment Documents to which the Guarantor or the Company is or
may become a party is, or when executed and delivered in accordance with
this Agreement will be, legal, valid and binding obligations of the
Guarantor or the Company, as the case may be, enforceable against it in
accordance with its terms.
(c) Contravention. Neither the execution, delivery and
performance of this Agreement or the other Amendment Documents nor the
consummation of the transactions contemplated hereby or thereby will
(with or without notice or lapse of time or both) (i) violate any law,
rule or regulation by which the Guarantor, the Company or any of their
properties may be bound or affected, or (ii) conflict with or result in
a default under any material contract or other material agreement to
which the Guarantor or the Company is a party or by which they or any of
their properties may be bound or affected.
E-16
4
(d) Approvals. No authorization, consent, order or approval of,
notice to or registration or filing with, or any other action by any
governmental authority or other person or entity is required or
advisable in connection with (i) the due execution and delivery by the
Guarantor or the Company of any of the Amendment Documents to which
either of them is or may become a party, or (ii) the performance by
either the Guarantor or the Company of its obligations under the
Amendment Documents to which they are or may become parties to.
(e) Misstatements. No information, certificate, schedule or
report furnished or to be furnished by the Guarantor or the Company (or
by their affiliates, shareholders, employees, partners, representatives
or professionals) to the Purchasers (whether in connection with the
transactions contemplated by this Agreement or the satisfaction of any
conditions contained in this Agreement or otherwise) and no
representation or warranty contained in this Agreement or any of the
Amendment Documents, contained or will contain, as the case may be, any
material misstatement of fact or omitted or will omit, as the case may
be, to state a material fact or any fact necessary to make the statement
contained therein not materially misleading.
(f) Representations and Warranties Contained in Article V1 of
Note Agreement. The representations and warranties contained in Sections
6.1, 6.2, 6.3, 6.4, 6.6, 6.9, 6.10, 6.11, 6.13 and 6.14 of the Note
Agreement are true and correct on the date hereof and on the Amendment
Closing Date with the same force and effect as though such
representations and warranties were made on and as of the date hereof
and on and as of the Effective Time.
(g) Free Will. Each of the Company and the Guarantor
acknowledges that it has executed this Agreement and the other Amendment
Documents of its own free will and after consultation with such legal,
financial and other advisors as it considers appropriate under the
circumstances.
(h) Reaffirmation-of-Indebtedness. The Company reaffirms and
reiterates that the loans and other indebtedness owing to the Purchasers
under the Notes is absolutely and unconditionally owing without defense,
offset or counterclaim.
(i) No Election of Remedies. Nothing contained herein nor any
negotiations or other actions undertaken pursuant to or in connection
with this Agreement or the other Amendment Documents shall (i) be deemed
to constitute an election of remedies with respect to any defaults
presently existing or which may hereafter exist with respect to the Note
Agreement, the Security Agreement or the Notes or (ii) constitute a
waiver of the Purchasers' rights or remedies under the Note Agreement
the Security Agreement or the Notes
(j) No Defaults. Except as set forth on Schedule II hereto, no
Event of Default or event (with or without notice or lapse of time or
both) that might constitute an Event of Default, currently exists, and
all Events of Default that may have existed have been waived by the
appropriate third parties or been cured by the Company.
Section 6. Conditions Precedent to the Obligations of the
Purchasers. The obligations of the Purchasers under this Agreement are
subject to the fulfilment of each of the following conditions, unless waived
by the Purchasers in writing, at or before the Effective Time:
(a) Representations and Warranties. The representations and
warranties of the Guarantor and the Company contained in this Agreement
and in each other Amendment Document shall be true on and as of the
Effective Time with the same force and affect as though made on and as
of the Effective Time.
(b) Performance of Agreements. The Guarantor and the Company
shall have performed and complied with all of its covenants and other
obligations contained in this Agreement and in each other Amendment
Document required to be performed or complied with at or before the
Effective Time.
(c) Amendment Fee, Interest and Fees. The Purchasers shall have
received the Amendment Fee, all accrued and unpaid interest on the Notes
as of Effective Time and reimbursement of their legal fees and expenses
incurred in connection with this Agreement.
E-17
5
(d) Legal Matters. All legal matters incident to the execution,
delivery and enforceability of this Agreement and the other Amendment
Documents shall be satisfactory to the Purchasers and their respective
counsel.
(e) Legal Opinions. The Purchasers shall have received the
opinions of counsel to the Guarantor and the Company, in the form of
Exhibit B.
Section 7. Other Agreements.
(a) No Waiver. Except as set forth in Section 7(b), the Company,
the Guarantor and the Purchasers hereby agree that this Agreement, the
other Amendment Documents and the agreements contained herein and
therein do not in any manner constitute a waiver, limitation or
alteration by the Purchasers of any rights, interests or Events of
Default now existing or hereafter occurring or events (with or without
notice or lapse of time or both) that might constitute an Event of
Default nor shall they be deemed to be a waiver by the Purchasers of any
claims or causes of action they may have against the Company, the
Guarantor or any other person or entity.
(b) Default Interest. The Purchasers agree that the Company
shall not be required to pay interest on the Amended and Restated Notes
at the Default Rate due to Events of Default that may have occurred
through the date of this Agreement, provided, however, that the
Purchasers expressly reserve the right to require the Company to pay
interest on the Amended and Restated Notes at the Default Rate from and
after the date of this Agreement due to Events of Default now existing
or hereafter occurring or events (with or without notice or lapse of
time or both) that might constitute an Event of Default.
Section 8. Miscellaneous.
(a) Note Agreement. Sections 12.5, 12.7, 12.8, 12.9, 12.10,
12.11, 12.12, and 12.13 of the Note Agreement are hereby incorporated
into this Agreement as if such Sections were herein specifically set
forth.
(b) Expenses. The Company agrees to pay or reimburse the
Purchasers for all of their respective out-of-pocket costs and expenses
incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, the Amendment
Documents and any other documents prepared in connection herewith or
therewith, and the consummation of the transactions contemplated hereby
and thereby, including, without limitation, the fees and disbursements
of counsel and other professional advisors to the Purchasers.
E-18
6
IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of the
date first written above.
CRONOS EQUIPMENT (BERMUDA) LIMITED
By: /s/ X X XXXXXXX
--------------------------------------
Name. Xxxxx X Xxxxxxx
Title. Director
THE CRONOS GROUP
By: /s/ X X XXXXX
--------------------------------------
Name. Xxxxxx X Xxxxx
Title. Chief Executive Officer
XXXXXXX SACHS CREDIT PARTNERS LP.
By: /s/ XXXX XXXXX
--------------------------------------
Name. Xxxx Xxxxx
Title. Authorised Signatory
DK ACQUISITION PARTNERS L.P.
By:/s/ XXXXXXX X XXXXXXX
--------------------------------------
Name. Xxxxxxx X Xxxxxxx
Title. General Partner
E-19
7
SCHEDULE I
to
AMENDMENT TO NOTE PURCHASE AGREEMENT
SCHEDULE I
to
NOTE
Amortisation-Schedule
---------------------
Date Principal Amount To be Repaid
---- -----------------------------
April 30, 1999 $695,000*
July 31, 1999 $695,000
September 30, 1999 All of the remaining outstanding
principal balance
*Subject to reduction as set forth in Section 4. 1 (a) of the Note Agreement.
E-20
8
EXHIBIT B
to
AMENDMENT AGREEMENT
Form of legal Opinion
---------------------
E-21
