EXECUTION COUNTERPART
AMENDMENT OF
1992 NOTE AGREEMENT AND WAIVER
This Amendment of 1992 Note Agreement and Waiver ("Amendment"), entered
into as of April 23, 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 5 of the Note Agreement. Paragraph 5 is amended by the
addition of new paragraph 5Q, as follows:
5Q. Financial Advisors. The Company shall pay upon demand all
costs and expenses incurred in connection with the hiring and retaining
of PricewaterhouseCoopers LLP ("PWC") as financial advisors to the
Noteholder and the lenders under the Credit Agreement. The Company
further agrees to fully cooperate with PWC and to permit PWC complete
access to its books and records and any other information and to allow
PWC to discuss the affairs, finances and accounts of the Company with
its officers and its independent public accountants, all on a timely
basis and as requested from time to time, including, without
limitation, such access and cooperation as is necessary for PWC to
begin its work on a part-time basis prior to May 9, 2001 and on a
full-time basis on and after May 9, 2001. The Company further agrees to
provide copies of its cost reduction liquidity plan and its balance
sheet recapitalization plan to the Noteholder and PWC on or before May
9, 2001.
1B. Paragraph 6A of the Note Agreement. 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) $138,000,000 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:
Period Leverage Ratio
Must Not Exceed
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Four Quarter Period ended April 1, 2001 7.50 to 1.00
Four Quarter Period ending July 1, 2001 8.50 to 1.00
Each Four Quarter Period ending 5.00 to 1.00
September 30, 2001 through December
30, 2001
Four Quarter Period ending March 31, 4.50 to 1.00
2002 through June 30, 2002 and
thereafter
(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:
Period Interest Coverage Ratio
Must Exceed
------------------------------------ -----------------------
Twelve Month Period ending April 1, 1.25 to 1.00
2001
Twelve Month Period ending July 1, 1.25 to 1.00
2001
Each Twelve Month Period ending 2.20 to 1.00
September 30, 2001 through December
30, 2001
Each Twelve Month Period ending 2.25 to 1.00
thereafter
(iv) Consolidated EBITDA. Consolidated EBITDA for each period set
forth below to be less than the amount set forth opposite such period:
Period Ending Consolidated EBITDA
Must Exceed
------------------------------------- -------------------
Four Fiscal Quarters ending April $35,000,000
1, 2001
Four Fiscal Quarters ending July 1, $28,000,000
2001
Each Four Quarter Period ending $50,000,000
September 30, 2001 through December
30, 2001
Each Four Quarter Period ending $52,000,000
thereafter
1C. Paragraph 7 of the Note Agreement. Clause (v) of paragraph 7 of the
Note Agreement is amended by adding the punctuation and reference ", 5Q" after
the reference to 5N in such clause (v).
2. Conditions of Effectiveness. Upon satisfaction of the following,
the effective date of this Amendment shall be April 1, 2001 (the "Effective
Date"). This Amendment shall become effective when, and only when, i) 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 Securitization Amendment (as defined in
Section 4 hereof) in form and substance satisfactory to the Noteholder
and under which all conditions have been satisfied and that is in full
force and effect and the Assignment Agreement referred to in Section 4
shall be in full force and effect.
(b) The Company shall have paid in immediately available funds, the
nonrefundable restructuring fee to the Noteholder;
(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; 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. Waiver. Subject to the terms and conditions of this Amendment,
including without limitation the fulfillment of the conditions precedent
specified in Section 2 above, the Noteholder hereby waives any Default or Event
of Default occurring directly or indirectly due to the failure of the Company
and its Subsidiaries to comply with the Minimum Fixed Charge Coverage Ratio
covenant set forth in paragraph (a) of Annex G to the Receivables Purchase
Agreement for the Fiscal Quarter ending April 1, 2001; provided that this waiver
relates solely to the covenant and period specified above, and nothing in this
Amendment is intended, or shall be construed, to waive any other Default or
Event of Default under the Note Agreement; provided, further however the
Receivables Purchase Agreement and the Receivables Transfer Agreement and shall
remain in full force and effect without amendment to the provisions thereof
except for the amendments contained in that certain Seventh Amendment to
Securitization Agreements dated and as in effect on the date hereof (the
"Securitization Amendment") and the Assignment Agreement dated April 23, 2001
between General Electric Capital Corporation and Redwood Receivables Corporation
shall be effective.
5. Miscellaneous.
5A. Reference to and Effect on the Note Agreement. b) 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.
(a) 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.
(b) 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.
5B. 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 5B.
5C. 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.
5D. Governing Law. This Amendment shall be governed by, and construed
in accordance with, the laws of the State of New York.
5E. 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. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President,
General Counsel & Secretary
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By /s/Xxxxxx X. Xxxxxx
Name: Xxxxxx 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/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
CONE FOREIGN TRADING LLC
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Vice President
