EXECUTION COUNTERPART
AMENDMENT OF
1992 NOTE AGREEMENT
This Amendment of 1992 Note Agreement ("Amendment"), entered into as of
June 28, 2001, by and among CONE XXXXX CORPORATION (the "Company") and THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA ("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 a modification of, among other
things, the financial covenants under the Note Agreement;
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; 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 4A of the Note Agreement. Paragraph 4A is amended in
its entirety to read as follows:
4A. Required Prepayments. (i) Required Prepayments. Until the
Notes shall be paid in full, the Company shall apply to the prepayment
of the Notes, without premium, the sum of $10,714,285.00 on August 13
in each of the years 1996 to 1999, inclusive, and on August 7, 2000 an
amount equal to the Sharing Payment received by Prudential on August 7,
2000 and on November 7, 2001 the sum equal to (A) $10,714,285.00 plus
(B) the difference between $10,714,285.00 and the principal payment
made on August 7, 2000, and such principal amounts of the Notes,
together with interest thereon to the prepayment dates, shall become
due on such prepayment dates. The remaining principal amount of the
Notes, together with interest accrued thereon, shall become due on
August 7, 2002, the maturity date of the Notes.
(ii) Offer to Prepay. (A) The Company shall offer to prepay
each Note in an amount equal to (I) the Note Prepayment Amount (as
defined below) 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 the any holder of a Note from time
to time.
(B) The offer to prepay the Notes contemplated by the
foregoing clause, shall be made in writing to each holder of a Note at
least ten Business Days before the proposed date of prepayment
specifying such proposed date and the amount available for prepayment.
A holder of a Note may accept such offer to prepay by causing a notice
of such acceptance to be delivered to the Company within seven Business
Days after receipt of the notice required pursuant to this clause (B).
A failure by a holder of Notes to respond to an offer to prepay made
pursuant to this clause (B) within such seven Business Day period shall
be deemed to constitute an acceptance of such offer by such holder. The
amount of all prepayments pursuant to clause (A) above shall be made
(x) ratably to each holder of a Note accepting an offer to prepay and
(y) ratably to the agent under the Credit Agreement for the ratable
benefit of the lenders thereunder. For purposes of this clause (B),
each Note's pro rata share shall be a fraction, the numerator of which
is the sum of the unpaid principal balance of such Note on the date of
such prepayment plus the Yield-Maintenance Amount, if any, with respect
to such Note on such date and any other amounts then due and owing to
the holder of such Note (such amounts, collectively, the "Note
Prepayment Amount"), and the denominator of which is the sum of the
Note Prepayment Amount for such Note plus the Note Prepayment Amount
for each other Note to be prepaid on the date of prepayment plus all
obligations due under the Credit Agreement on the date of such
prepayment, which for purposes hereof shall be deemed to be the
Clawback Amount (as defined in the Senior Debt Intercreditor Agreement)
if no Event of Default has occurred and is continuing.
1B. Paragraph 5 of the Note Agreement. Paragraph 5L is amended in
it entirety to read as follows:
5L. Credit Facility. The Company shall maintain at all times a
revolving credit facility having a maturity date no earlier than
November 7, 2001 with at least $73,000,000 less any Sharing Payments or
Disposition Payments (as defined in the Senior Debt Intercreditor
Agreement) received by the lenders with respect to the Credit Agreement
under Section 3.4 of the Senior Debt Intercreditor Agreement in
aggregate commitments available thereunder and otherwise in form and
substance satisfactory to the Required Holders and on or prior to
September 28, 2001, the Company shall maintain at all times a revolving
credit facility (or a binding commitment therefore with an effective
date on or prior to November 7, 2001) having a maturity date no earlier
than November 7, 2003 with at least $67,000,000 in aggregate commitment
available thereunder and otherwise in form and substance satisfactory
to the Required Holders.
1C. Paragraph 6 of the Note Agreement. Paragraph 6 of the Note
Agreement is amended as follows:
(i) Paragraph 6A of the Note Agreement is amended in its entirety
to read as follows:
6A. Financial Limitations. The Company covenants that it will
not permit at any time:
(i) Consolidated Net Worth. Consolidated Net Worth to be less
than (a) $120,000,000 from the Effective Date until through September
30, 2001 and (b)(I) commencing with October 1, 2001 for each Fiscal
Quarter, $145,000,000 plus 50% of Consolidated Net Income for each such
Fiscal Quarter since October 1, 2000, and (II) as at the last day of
each Fiscal Quarter of the Company commencing with October 1, 2001 and
until (but excluding) the last day of the next following Fiscal Quarter
of the Company, the sum of (x) the amount of Consolidated Net Worth
required to be maintained pursuant to this paragraph 6A(i)(b)(I) as at
the end of the immediately preceding Fiscal Quarter, plus (y) 100% of
the aggregate amount of all increases in the stated capital and
additional paid-in capital accounts of the Company resulting from the
issuance of equity securities or other capital investments since
October 1, 2000.
(ii) Consolidated Leverage Ratio. As of the end of each Four-
Quarter Period set forth below the Consolidated Leverage Ratio to be
more than that set forth opposite each such period:
Leverage Ratio
Period Must Not Exceed
---------------------------------- -----------------------
Four Quarter Period ending July 1, 2001 8.75 to 1.00
Four Quarter Period ending September 30, 2001 9.90 to 1.00
Four Quarter Period ending December 30, 2001 5.00 to 1.00
Each Four Quarter Period ending March 31, 2002
through June 30, 2002 and thereafter 4.50 to 1.00
(iii) Consolidated Interest Coverage Ratio. As of the end of
each month for the Twelve-Month Periods set forth below the
Consolidated Interest Coverage Ratio to be less than that set forth
opposite each such period:
Interest Coverage Ratio
Period Must Exceed
---------------------------------- -----------------------
Twelve Month Period ending July 1, 2001 1.25 to 1.00
Twelve Month Period ending September 30, 2001 1.10 to 1.00
Twelve Month Period ending December 30, 2001 2.20 to 1.00
Each Twelve Month Period ending thereafter 2.25 to 1.00
(iv) Consolidated EBITDA. Consolidated EBITDA for each period
set forth below to be less than the amount set forth opposite such
period:
Consolidated EBITDA
Period Ending Must Exceed
---------------------------------- -----------------------
Four Fiscal Quarters ending July 1, 2001 $25,000,000
Four Quarter Period ending September 30, 2001 $23,500,000
Four Quarter Period ending December 30, 2001 $50,000,000
Each Four Quarter Period ending thereafter $52,000,000
(ii) Paragraph 6B of the Note Agreement is amended in its entirety
to read as follows:
6B. Capital Expenditures. (a) Make or become committed to make
U.S. Capital Expenditures which exceed $10,000,000 in Fiscal Year 2001.
(b) 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 Fiscal Year 2001.
(iii) Paragraph 6C(2)(e) is hereby amended by deleting the Dollar amount
"$10,000,000" and inserting in lieu thereof the Dollar amount "$0".
(iv) Deleting the Dollar amount "$5,000,000" and inserting in lieu
thereof the Dollar amount "$0" hereby amends paragraph 6C(2)(f).
1D. Paragraph 10B of the Note Agreement. The following revisions
shall be made to paragraph 10B of the Note Agreement:
(i) Subsection (vii) of the definition of the term "Consolidated
EBITDA" is amended in its entirety to read as follows:
(vii) Non-cash Restructuring Charges not to exceed $35,000,000
in Fiscal Year 2001.
(ii) The following new definitions shall be added to paragraph 10B:
"Assets Dispositions" shall have the meaning set forth in the
Credit Agreement, without giving effect to any amendments or waivers
thereto.
"Capital Market Transaction" shall have the meaning set forth
in the Credit Agreement, without giving effect to any amendments or
waivers thereto.
"Net Proceeds" (a) from any public or private offering of any
security (including securities evidencing Indebtedness and any Capital
Market Transaction) means cash payments received by the Company or any
Subsidiary therefrom as and when received, net of all legal,
accounting, banking and underwriting fees and expenses, commissions,
discounts and other issuance expenses incurred in connection therewith
and all taxes required to be paid or accrued as a consequence of such
issuance; and (b) from any Asset Disposition means cash payments
received by the Company or any Subsidiary therefrom (including any cash
payments received pursuant to any note or other debt security received
in connection with any Asset Disposition) as and when received, net of
(i) all legal fees and expenses and other fees and expenses paid to
third parties and incurred in connection therewith, (ii) all taxes
required to be paid or accrued as a consequence of such disposition,
(iii) all amounts applied to repayment of Indebtedness (other than
under the Notes and the Credit Agreement) secured by a Lien on the
asset or property disposed.
"Senior Debt Intercreditor Agreement" means that certain
Intercreditor Agreement dated as of January 28, 2000 among Bank of
America, N.A., as Priority Collateral Agent; Wilmington Trust Company,
as General Collateral Agent; each lender a party to the Credit
Agreement; the Noteholder and certain other parties thereto, as
amended, supplemented or restated from time to time.
"Permitted Asset Dispositions" shall have the meaning set
forth in the Credit Agreement, without giving effect to any amendments
or waivers thereto.
2. Conditions of Effectiveness. Upon satisfaction of the following, the
effective date of this Amendment shall be June 28, 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) the favorable written opinion of Xxxx Xxxxxx, Esq.,
counsel to the Company, addressed to the Noteholder and satisfactory to
its counsel;
(iii) a duly executed amendment to the Credit Agreement
containing substantially the same amendments and waiver as are contained
herein and otherwise in form and substance acceptable to the Noteholder
and under which all conditions have been satisfied and that is in full
force and effect; and
(iv) a duly executed letter from General Electric Capital
Corporation, in form and substance are satisfactory to the Noteholder,
confirming that the conditions set forth in the securitization agreement
with the Company have been satisfied.
(b) The Company shall have paid in immediately available funds, the
nonrefundable amendment fee to the Noteholder in the amount of $28,945;
(c) The Company shall have paid all costs and expenses (including
legal fees) incurred by the Noteholder;
(d) Such other documents, instruments, approvals or opinions as the
Noteholder may reasonably request; and
(e) The representations and warranties contained herein shall be
true on and as of the date hereof, 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 the Credit Agreement (it being
understood that any reference to (i) Lender includes the Noteholder, and (ii)
Loan Documents includes the Note Agreement and the Notes, as amended hereby) and
in 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.
(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.
4. Consent to Amendment of Credit Agreement. The Required Holders
hereby consent to the amendment of Section 10.2 of the Credit Agreement as set
forth in Amendment No. 4 to Credit Agreement dated June 28, 2001 and hereby
agree that such amendment shall be incorporated into paragraph 6C(3) of the Note
Agreement by this reference.
5. Request for Information. The Purchaser hereby requests, and by
Paragraph 5A(iv) of the Note Agreement, the Company shall, on the last Business
Day of each week, deliver to each Significant Holder (i) projected cash flow
statements of the Company and its Subsidiaries for the 13 week period beginning
on such date and (ii) a comparison of the week most recently ended with the
amount projected for such week in the statements delivered pursuant to clause
(i) above, with an explanation of any material variances (10% or greater)
between actual and projected cash flow.
6. Miscellaneous.
6A. 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 is 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.
6B. 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 6B.
6C. 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.
6D. Governing Law. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
6E. 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: Exec Vice President & CFO
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By /s/ Xxxxxxxxx X. Xxxxxx
Name: Xxxxxxxxx X. Xxxxxx
Title: Vice President
A-2
CONSENT AND REAFFIRMATION OF GUARANTORS
Each of the undersigned (i) acknowledges receipt of the foregoing
Amendment of 1992 Note Agreement (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/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Vice President
CONE FOREIGN TRADING LLC
By: /s/ Xxxx X. Xxxxx
Name: Xxxx X. Xxxxx
Title: Exec Vice President & CFO
