EXHIBIT (4l)
AMENDMENT TO 9.96% SENIOR SUBORDINATED
NOTES DUE FEBRUARY 1, 2010
This shall constitute an amendment to the 9.96% Senior Subordinated
Notes due February 1, 2010, by and between New York Life Insurance Company,
or registered assigns, and Xxxxx Yarns, Inc. dated February 6, 1990, in the
aggregate principal amount of $50,000,000 and the related Loan Agreement
dated February 6, 1990, by and between the same parties, which is
incorporated therein by reference (together the "NYL Notes"). All defined
terms herein shall have the same meaning as in the NYL Notes unless a
different meaning is clearly set forth herein.
Whereas, Xxxxx Yarns, Inc. (the "Company"), whose name has been
changed to The Xxxxx Group, Inc., and New York Life Insurance Company or
registered assigns (the "holders") have agreed to certain amendments to
the terms of the NYL Notes as set forth herein; and
Whereas, the parties hereto desire to amend the NYL Notes to reflect
the amendments agreed upon by them.
Now, Therefore, for and in consideration of the mutual promises
contained herein and other valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending
to be bound hereby, agree as follows:
1. Section 9, paragraph (F) of the NYL Notes is hereby deleted in its
entirety and the following is substituted therefor:
(F) DIVIDENDS. The Company will not declare or pay, or set apart any
funds for the payment of, any dividends (other than dividends paid or
payable in capital stock of the Company) on any shares of capital stock of
the Company, by reduction of the Company's capital surplus or otherwise, or
make any other distribution in respect of any shares of capital stock of
the Company ("Dividend Action"), if immediately after giving effect to
such Dividend Action (i) the sum of the amounts declared and paid or
payable as, or set apart for, dividends (other than dividends paid or
payable in capital stock of the Company) on, or distribution (taken at cost
to the Company or fair value at time of distribution, whichever is higher)
in respect of, all shares of capital stock of the Company subsequent to
December 31, 1997, would be in excess of $1,000,000 plus 50% of aggregate
cumulative Consolidated net income as defined in the NYL Notes for all
periods subsequent thereto, determined as of the first day of the fiscal
quarter in which a Dividend Action is declared by the Board of Directors of
the Company; or (ii) if the Company's Interest Coverage Ratio for the
fiscal period consisting of the four fiscal quarters immediately preceding
such Dividend Action is less than the ratio set forth below:
Four Quarter Fiscal Period Ending In Ratio
Fiscal year 1998 1.25 to 1
Fiscal year 1999 and thereafter 1.50 to 1
For the purpose of determining the Company's compliance with this
obligation, Interest Coverage Ratio shall mean, with respect to the
applicable period, the ratio of (i) Consolidated net income as defined in
the NYL Notes plus, to the extent deducted in determining such Consolidated
net income, interest expense of the Company and its subsidiaries for the
applicable period and any provision for taxes for such period (whether paid
or deferred), exclusive of any non-cash gains or losses associated with
restructuring or consolidations and gains or non-cash losses from sales of
assets other than inventory sold in the ordinary course of business, to
(ii) interest expense, of the Company and its subsidiaries, for the
applicable period.
2. Section 9, paragraph (G) of the NYL Notes is hereby deleted in its
entirety and the following is substituted therefor:
(G) MINIMUM NET WORTH. The Company will not permit its
consolidated Net Worth, measured at the end of each fiscal quarter,
(exclusive of any amount previously written down for the property,
machinery and related assets of the Tarboro manufacturing facility located
in Tarboro, North Carolina, adjusted for any subsequent gain or non-cash
losses on the sale of such property) to be at any time less than
$115,000,000 plus fifty percent (50%) of the aggregate cumulative
Consolidated net income (excluding losses) as defined in the NYL Notes, for
any fiscal quarter from and after the beginning of the 1998 fiscal year;
provided however, that net losses for any quarter during a fiscal year may
be offset to the extent of net income during another quarter in the same
fiscal year, but net losses for any fiscal year shall not be offset against
net income for any other fiscal year and shall not reduce the amount of the
minimum net worth requirements at the beginning of such fiscal year.
3. Section 9, paragraph (A) of the NYL Notes is hereby deleted in its
entirety and the following is substituted therefor:
(A) FUNDED INDEBTEDNESS OF THE COMPANY. The Company will not
borrow or incur additional Funded Indebtedness if, immediately after giving
effect thereto, the aggregate principal amount of Funded Indebtedness would
exceed the percentage ratio set forth in the table below of the
Capitalization of the Company; except that nothing in this paragraph (A)
shall prohibit the renewal or refinancing of any Funded Indebtedness
heretofore or hereafter incurred or assumed in compliance with this
paragraph (A), provided such renewal or refinancing shall not result in an
increase in the outstanding principal amount of such Funded Indebtedness.
Period Ratio
Fiscal year 1998 72.5%
Fiscal year 1999 70.0%
Fiscal year 2000 and thereafter 67.5%
For the purpose of this paragraph only, Funded Indebtedness shall mean as
of any date of determination the sum of all indebtedness, whether senior or
subordinated indebtedness, (including the 7% Convertible Subordinated
Debentures due 2012), which would in accordance with generally accepted
accounting principles constitute long term or short term debt, any amount
of off-balance sheet financing that is not shown on the balance sheet as
debt,(including the 6.08% Trade Receivable-Backed Certificates, Series
1993-1), all reimbursement obligations under any letters of credit or
acceptances (excluding letters of credit incurred in the ordinary course by
another person other than with respect to Indebtedness of such person for
money borrowed, including, without limitation, letters of credit issued for
workers compensation and other insurance liabilities and trade letters of
credit), all guarantees of obligations of another person, whether direct or
indirect, contingent or otherwise, including but not limited to an
obligation of such other person to purchase or otherwise acquire, or
otherwise insure any creditor against loss in respect of, Indebtedness of
any other person for borrowed money, and any amount representing mandatory
dividend rights on capital stock or other equity of the Company.
Capitalization shall mean as of any date of determination the sum of Funded
Indebtedness plus Stockholders Equity (Net Worth) as reflected on the
consolidated balance sheet of the Company plus an amount not to exceed
$31,400,000 relating to the write-down of assets of T-C Threads, Inc. and
its Subsidiaries.
4. As consideration for the amendments herein provided for, the
Company agrees to pay to the holders, to be divided ratably between them,
an additional fee in the amount of $250,000.
5. Notwithstanding the provisions of Section 9(B) and (D) of the NYL
Notes, all wholly owned subsidiaries of the Company that have assets of
$1,000,000 or more, except for Xxxxx Funding, Inc., shall guarantee the
NYL Notes and shall be permitted to guarantee the Senior Indebtedness of
the Company. All such guarantees of such Subsidiaries of the Company of
the NYL Notes shall be subordinated to the obligations of the subsidiaries
under the guarantee of the Senior Indebtedness in the same manner and to
the same extent as the NYL Notes are subordinated to the Senior
Indebtedness, and such subordination provisions shall be expressly set
forth in any such guarantees of the NYL Notes.
6. The Company shall provide calculations of and a certificate of
compliance with the Dividends, Minimum Net Worth and Funded Indebtedness
requirements set forth herein as soon as reasonably possible, and in any
event within 60 days after the close of each of the first three fiscal
quarters of the Company in each fiscal year and within 90 days after the
close of each fiscal year of the Company.
In all other respects except as specifically amended herein, the NYL
Notes shall remain in effect as on the date hereof unchanged. This
amendment has been approved in accordance with the provisions of Section 10
of NYL Notes and has been approved by 66-2/3% of the NYL Note holders as
evidenced by their signatures hereto.
The Xxxxx Group, Inc., formerly
Xxxxx Yarns, Inc.
By: Xxxx X. Xxxxxx
Its: Treasurer
New York Life Insurance New York Life Insurance
Company and Annuity Corporation
By: New York Life Insurance
Company
By: Xxxxxx X. Xxxxxxxxx By: Xxxxxx X. Xxxxxxxxx
Its: Investment Manager Its: Investment Manager
