FIRST AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS FIRST AMENDMENT TO NOTE PURCHASE AGREEMENTS, dated as of the 31st
day of January, 2002 (this "Amendment" or this "First 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 (collectively, the "Note Purchase Agreements"),
pursuant to which the Company has issued its $20,000,000 6.76% Series A
Senior Notes due March 15, 2008 and its $55,000,000 6.76% Series B Senior
Notes due March 15, 2010 (collectively, 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 February 1, 2002 (but subject to
Section 7.2), the principal amount of the Notes will bear interest at a rate
equal to 7.76% per annum. Accordingly, all references in the Note Purchase
Agreements to "6.76%" as the rate of interest applicable to the Notes shall
be deemed to read "7.76%," and all references in the Note Purchase Agreements
to "8.76%" as the rate of interest applicable to overdue payments of
principal, interest or any Make-whole Amount shall be deemed to read
"9.76%." Contemporaneously with the execution and delivery of this
Amendment, the Company will execute and deliver to each holder an amended and
restated Note (in exchange for the return by such holder to the Company of
such holder's original Note for cancellation by the Company), 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.
The execution and delivery of each amended and restated Note in favor of a
holder will be a condition precedent to such holder's becoming bound in
respect of this Amendment.
2. Amendment to Section 9. A new Section 9.6 is hereby added to
each of the Note Purchase Agreements as follows:
Section 9.6. Liens. The Company will exercise its reasonable
best efforts to cause the Liens that have been granted to the lenders
under that certain Credit Agreement, dated April 23, 1997 between the
Company, Wachovia Bank, N.A. (as agent and as lender) and certain other
financial institutions party thereto (as amended, restated, modified,
replaced or refinanced from time to time, the "Credit Agreement") to be
released (the "Lien Release"). The Company agrees that, upon the
completion of any Lien Release, the references in clause (a)(3)(ii) of
Section 10.2 and paragraph (k) of Section 10.3 to '15% of Consolidated
Net Worth" shall be amended to read "10% of Consolidated Net Worth."
The Company further agrees that, in the event the Company is unable, by
May 5, 2003, to cause the Lien Release, the Company will promptly
thereafter grant, for the benefit of the holders of Notes, Liens on
assets having a book value equal to no less than $25,000,000, securing
repayment obligations in respect of the Notes of an amount equal to the
amount so secured under the Credit Agreement (which, as of the date
hereof, equals $15,177,554), pursuant to documentation reasonably
acceptable to the Required Holders and the Company; provided, however,
that in the event of any such grant of Liens for the benefit of such
holders (and only in such event), the Required Holders hereby waive
compliance with Sections 10.2(a)(3) and 10.3(k) hereof in respect of
(and only in respect of) any deemed incurrence of Priority Debt arising
by virtue of any such grant of Liens in favor of the holders of Notes
(it being understood that the calculation of Priority Debt shall not
include indebtedness under the Notes).
3. Amendment to Section 10.1. Section 10.1 of each of the Note
Purchase Agreements is hereby deleted in its entirety and is replaced with
the following:
Section 10.1. Tangible Net Worth. The Company will not at any
time permit 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.
4. Amendment to Section 10.2(a). The following is hereby inserted
as new clause (4) of Section 10.2(a) of each of the Note Purchase Agreements:
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 shall not pay any dividends to its stockholders in respect
of the capital stock of the Company unless and until Consolidated
Funded Debt is less than 50% of Tangible Capitalization.
5. 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:
"First Amendment" means the First Amendment to Note Purchase
Agreements, dated as of January 31, 2002, between the Company and the
Noteholders (as defined therein), which amends this Agreement.
"Tangible Capitalization" means, at any time, Consolidated Total
Capitalization, less the amount of any intangible items as determined
in accordance with GAAP, at such time.
"Tangible Net Worth" means, at any time, Consolidated Net Worth,
less the amount of any intangible items as determined in accordance
with GAAP, at such time.
6. Representation and Warranty. The Company hereby represents and
warrants to the Noteholders that after giving effect to this Amendment, no
Default or Event of Default has occurred and is continuing.
7. Miscellaneous.
7.1 Amendment Fee. As a condition to the effectiveness of this
Amendment and in consideration of the amendments effected hereby, the
Company shall have paid to each holder of Notes, on or prior to the
Effective Date (as defined in Section 7.2), a fee equal to 0.250% of
the aggregate principal amount of the Notes held by such holder.
7.2 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 (the "Effective Date")
upon which (i)-each of the Company and the Required Holders shall have
executed and delivered a counterpart hereof, (ii) the Company shall
have executed and delivered the amended and restated Notes as
contemplated by Section-1 hereof, and (iii)-the Company shall have paid
to each holder of Notes the fee required by Section-7.1.
7.3 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.
7.4 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.
7.5 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.
7.6 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).
7.7 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.
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:
Name:
Title:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By CIGNA Investments, Inc.
By:
Name:
Title:
LIFE INSURANCE COMPANY OF NORTH
AMERICA
By CIGNA Investments, Inc.
By:
Name:
Title:
ACE PROPERTY AND CASUALTY INSURANCE
COMPANY
By CIGNA Investments, Inc.
By:
Name:
Title:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of one or more
separate accounts
By CIGNA Investments, Inc.
By:
Name:
Title:
J. ROMEO & CO.
By:
Name:
Title:
UNITED OF OMAHA LIFE INSURANCE
COMPANY
By:
Name:
Title:
MUTUAL OF OMAHA INSURANCE COMPANY
By:
Name:
Title:
THE PRUDENTIAL INSURANCE COMPANY OF
AMERICA
By:
Name:
Title:
ALLSTATE LIFE INSURANCE COMPANY
By:
Name:
Title: Authorized Signatory
By:
Name:
Title: Authorized Signatory
