FOURTH AMENDMENT TO NOTE PURCHASE AGREEMENTS
Exhibit 10.3
FOURTH AMENDMENT TO NOTE PURCHASE AGREEMENTS
THIS FOURTH AMENDMENT, dated as of October 23, 2008 (this “Amendment”) to those certain
separate Note Purchase Agreements, each dated as of August 23, 2000 (as amended by that certain
First Amendment to Note Purchase Agreements, dated as of November 30, 2001, that certain Second
Amendment to Note Purchase Agreements, dated as of May 27, 2004, and that certain Third Amendment
to Note Purchase Agreements, dated as of May 31, 2007, and as in effect immediately prior to the
effectiveness of this Amendment, collectively, the “Existing Note Purchase Agreement”), among The
X. X. Xxxxxxx Company, an Ohio corporation (the “Company”), and the purchasers signatory thereto
(together with their successors, transferees and assigns, collectively, the “Noteholders”) pursuant
to which the Company issued to the Noteholders its (i) 7.70% Series A Senior Notes due September 1,
2005 in the aggregate principal amount of $17,000,000, (ii) 7.87% Series B Senior Notes due
September 1, 2007 in the aggregate principal amount of $33,000,000, and (iii) 7.94% Series C Senior
Notes due September 1, 2010 in the aggregate principal amount of $10,000,000 (collectively, the
“Notes”).
RECITALS:
A. The Noteholders are the holders of all of the outstanding Notes.
B. Capitalized terms used herein shall have the respective meanings ascribed thereto in the
Existing Note Purchase Agreement unless herein defined or the context shall otherwise require.
C. The Company and the Noteholders now desire to amend the Existing Note Purchase Agreement in
the respects, but only in the respects, hereinafter set forth.
NOW THEREFORE, for good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Company and the Noteholders do hereby agree as follows:
1. AMENDMENTS.
1.1. Amendment to Section 9.7 (Financial Covenant Standards).
Section 9.7 of the Existing Note Purchase Agreement is hereby deleted in its entirety, and a
new Section 9.7 is hereby inserted in its place, to read as follows:
9.7 Financial Covenant Standards.
If at any time and from time to time on or after the Fourth Amendment Effective Date, any
Primary Senior Debt shall contain (whether on the Fourth Amendment Effective Date or subsequent
thereto as the result of an amendment or modification thereof) one or more Financial Covenants that
are either not contained in this Agreement or are contained in this Agreement but are more
favorable to the lender or lenders under such Primary Senior Debt than are the terms of
this Agreement to the holders of the Notes, this Agreement shall, without any further action
on the part of the Company or any of the holders of the Notes, be deemed to be amended
automatically (effective simultaneously with the effectiveness of such Primary Senior Debt or
such modification) to include each such additional or more favorable Financial Covenant, unless the
Required Holders provide written notice to the Company to the contrary within 30 days after having
received written notice from the Company of the effectiveness of such additional or more favorable
Financial Covenant (in which event such Financial Covenant shall be deemed not to have been
included in this Agreement at any time). No modification or amendment of any Primary Senior Debt
that results in any Financial Covenant becoming less restrictive on the Company shall be effective
as a modification, amendment or waiver under this Agreement. The Company further covenants promptly
to execute and deliver at its expense (including, without limitation, the fees and expenses of
counsel for the holders of the Notes) an amendment to this Agreement in form and substance
satisfactory to the Required Holders to reflect such additional or more favorable Financial
Covenant, provided that the execution and delivery of such amendment shall not be a precondition to
the effectiveness of such additional or more favorable Financial Covenant as provided for in this
Section 9.7. The provisions of this Section 9.7 shall apply successively to each change in a
Financial Covenant contained in any Primary Senior Debt.
“Financial Covenant” means any covenant or equivalent provision (including, without
limitation, any default or event of default provision and definitions of defined terms used
therein) requiring the Company:
(a) to maintain any level of financial performance (including, without limitation, a
specified level of net worth, total assets, cash flow or net income),
(b) not to exceed any maximum level of indebtedness,
(c) to maintain any relationship of any component of its capital structure to any other
component thereof (including, without limitation, the relationship of indebtedness, senior
indebtedness or subordinated indebtedness to total capitalization or to net worth), or
(d) to maintain any measure of its ability to service its indebtedness (including,
without limitation, falling below any specified ratio of revenues, cash flow or net income
to interest expense, rental expense, capital expenditures and/or scheduled payments of
indebtedness).
1.2. Amendment to Section 10.3 (Consolidated Net Worth).
Section 10.3 of the Existing Note Purchase Agreement is hereby deleted in its entirety, and a
new Section 10.3 is hereby inserted in its place, to read as follows:
10.3 Consolidated Net Worth.
The Company will not, at any time, permit Consolidated Net Worth to be less than (a) prior to
the Folgers Acquisition Date, One Billion Dollars ($1,000,000,000) and (b) on and after the Folgers
Acquisition Date, Three Billion Five Hundred Million Dollars ($3,500,000,000).
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1.3. Amendment to Section 10.4.
Section 10.4 of the Existing Note Purchase Agreement is hereby deleted in its entirety, and a
new Section 10.4 is hereby inserted in its place, to read as follows:
10.4 Leverage Ratio.
The Company will not permit, as of the end of each fiscal quarter, Consolidated Debt
determined as of such date to exceed 55% of the sum of (a) Consolidated Debt and (b) Consolidated
Net Worth, each determined as of such date.
1.4. Amendment to Section 10.5 (Incurrence of Current Debt).
Section 10.5 of the Existing Note Purchase Agreement is hereby deleted in its entirety, and a
new Section 10.5 is hereby inserted in its place, to read as follows:
10.5 Intentionally Omitted.
1.5. Amendment to Section 10.6 (Priority Debt).
Section 10.6 of the Existing Note Purchase Agreement is hereby deleted in its entirety, and a
new Section 10.6 is hereby inserted in its place, to read as follows:
10.6 Priority Debt.
The Company will not, at any date, permit Priority Debt to exceed (a) prior to the last day of
the fiscal quarter in which the Folgers Acquisition Date occurs, 25% of Consolidated Total
Capitalization (determined as of the last day of the then most recently ended fiscal quarter of the
Company) and (b) thereafter, 15% of Consolidated Total Capitalization (determined as of the last
day of the then most recently ended fiscal quarter of the Company or determined as of such date if
such date shall be the last day of a fiscal quarter of the Company); provided, however, that no
Lien created pursuant to Section 10.7(g) shall secure any Primary Senior Debt unless the Notes are
equally and ratably secured by all property subject to such Lien and no Subsidiary shall guaranty
or otherwise become obligated in respect of any Primary Senior Debt unless such Subsidiary
guaranties, or becomes similarly obligated in respect of, the Notes and such Debt is subject to the
terms of the Intercreditor Agreement (or an intercreditor agreement in form and substance
reasonably satisfactory to the Required Holders), in each case all pursuant to documentation
reasonably satisfactory to the Required Holders; provided, further, however, that notwithstanding
anything contained in this Section 10.6 to the contrary, the Company shall be under no obligation
to (but may in its sole discretion) require any Foreign Subsidiary to guaranty the Debt under this
Agreement and the Notes to the extent such Foreign Subsidiary’s obligations under all Primary
Senior Debt consist solely of direct borrowings solely to such Foreign
Subsidiary or a group of Foreign Subsidiaries (a “Foreign Borrowing”) or guaranties of a
Foreign Borrowing by another Foreign Subsidiary.
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1.6. Amendment to Section 10.7 (Liens)
Section 10.7(g) of the Existing Note Purchase Agreement is hereby deleted in its entirety, and
a new Section 10.7(g) is hereby inserted in its place, to read as follows:
(g) other Liens not otherwise permitted by paragraphs (a) through (f) of this
Section 10.7, so long as the Debt secured thereby can be
(i) incurred and remain outstanding in accordance with the requirements of
Section 10.4, and
(ii) incurred and remain outstanding in accordance with the requirements of
Section 10.6.
1.7. Amendment to Section 11 (Events of Default).
Section 11(f) of the Existing Note Purchase Agreement is hereby deleted in its entirety, and a
new Section 11(f) is hereby inserted in its place, to read as follows:
(f) the Company or any Significant Subsidiary
(i) is in default (as principal or as guarantor or other surety) in the payment
of any principal of or premium or Make-Whole Amount or interest on any Indebtedness
(other than Indebtedness under this Agreement and the Notes) that is outstanding in
an aggregate principal amount of at least $5,000,000 beyond any period of grace
provided with respect thereto (after giving effect to any consents or waivers in
respect thereof); or
(ii) is in default in the performance of or compliance with any term of any
evidence of any Indebtedness under the Bank Credit Agreement or the Folgers Bank
Credit Agreement or any other Indebtedness with an outstanding principal amount of
at least $40,000,000 individually or, together with other Indebtedness, with an
aggregate principal amount of at least $75,000,000 or of any mortgage, indenture or
other agreement relating thereto or any other condition exists, and as a consequence
of such default or condition such Indebtedness has become, or has been declared (or
one or more Persons are entitled at such time to declare such Indebtedness to be),
due and payable before its stated maturity or before its regularly scheduled dates
of payment; or
(iii) as a consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the holder of Indebtedness
to convert such Indebtedness into equity interests), (x) the Company or such
Significant Subsidiary has become obligated to purchase or repay Indebtedness under
the Bank Credit Agreement or the Folgers Bank Credit Agreement or any
other Indebtedness with an outstanding principal amount of at least $40,000,000
individually or, together with other Indebtedness, with an aggregate principal
amount of at least $75,000,000 before its regular maturity or before its regularly
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scheduled dates of payment, or (y) one or more Persons have the right at such time
to require the Company or such Significant Subsidiary so to purchase or repay such
Indebtedness; or
1.8. Deletion of Defined Terms.
The definitions of “Consolidated Current Debt”, “Consolidated Senior Funded Debt”, “Current
Debt”, “Current Maturities of Funded Debt”, “1999 Note Agreement”, “2004 Note Agreement”, and “2007
Note Agreement”, are each hereby deleted from Schedule B to the Existing Note Purchase Agreement.
1.9. Amendments to Schedule B.
Schedule B to the Existing Note Purchase Agreement is hereby amended by inserting the
following new definitions into such Schedule, in their proper alphabetical order, to read as
follows:
“Consolidated Debt” means, as of any date of determination, the total of all Debt of the
Company and its Subsidiaries outstanding on such date, after eliminating all offsetting debits and
credits between the Company and its Subsidiaries and all other items required to be eliminated in
the course of the preparation of consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP.
“Consolidated Funded Debt” means, as of any date of determination, the total of all Funded
Debt of the Company and its Subsidiaries outstanding on such date, after eliminating all offsetting
debits and credits between the Company and its Subsidiaries and all other items required to be
eliminated in the course of the preparation of consolidated financial statements of the Company and
its Subsidiaries in accordance with GAAP.
“Folgers Acquisition Date” means the date on which The Folgers Coffee Company becomes a
Subsidiary of the Company pursuant to that certain Transaction Agreement dated as of June 4, 2008
among The Xxxxxxx & Xxxxxx Company, The Folgers Coffee Company, the Company and Moon Merger Sub,
Inc.
“Folgers Bank Credit Agreement” means that certain Credit Agreement by and among The Folgers
Coffee Company, Bank of Montreal as administrative agent, Bank of America, N.A. as syndication
agent and the lenders party thereto to be entered into on or prior to the Folgers Acquisition Date,
as such agreement may be amended or restated from time to time.
“Foreign Subsidiary” means any Subsidiary of the Company which is not organized under the laws
of the United States of America, any State thereof or the District of Columbia.
“Fourth Amendment” means that certain Fourth Amendment to Note Purchase Agreement, dated as of
the Fourth Amendment Effective Date, among the Company and each of the holders of Notes signatory
thereto, amending certain provisions of this Agreement.
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“Fourth Amendment Effective Date” means the date upon which the Fourth Amendment is executed
and delivered by the Company and the holders of Notes and becomes effective pursuant to the terms
thereof.
“Primary Senior Debt” means (a) the Bank Credit Agreement and (b) any other credit, loan or
borrowing facility or note purchase agreement by the Company or any Subsidiary providing, in each
case, for the incurrence of Senior Funded Debt in a principal amount equal to or greater than
$120,000,000, in each case under clauses (a) and (b) as amended, restated, supplemented or
otherwise modified and together with increases, refinancings and replacements thereof; provided
that for purposes of compliance with Section 9.7 only, “Primary Senior Debt” shall exclude the
Folgers Bank Credit Agreement (but it shall include any refinancings, extensions or replacements of
the Folgers Bank Credit Agreement).
2. NO OTHER MODIFICATIONS; CONFIRMATION.
All the provisions of the Notes, and, except as expressly amended, modified and supplemented
hereby, all the provisions of the Existing Note Purchase Agreement, are and shall remain in full
force and effect. As of the Effective Date (defined below), all references in the Notes to the
“Note Purchase Agreements” shall be references to the Existing Note Purchase Agreement, as modified
by this Amendment and as hereafter amended, modified or supplemented in accordance with its terms.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
To induce the Noteholders to execute and deliver this Amendment (which representations shall
survive such execution and delivery), the Company represents and warrants to the Noteholders that:
(a) all of the representations and warranties contained in Section 5 of the Existing
Note Purchase Agreement are correct with the same force and effect as if made by the Company
on the date hereof (or, if any representation or warranty is expressly stated to have been
made as of a specific date, as of such date);
(b) Xxxxxxx LLC is a limited liability company duly organized, validly existing and in
good standing under the laws of the state of Ohio;
(c) this Amendment and the Guaranty Agreement of Xxxxxxx LLC have been duly authorized,
executed and delivered by the Company and Xxxxxxx LLC, respectively, and this Amendment and
the Guaranty Agreement of Xxxxxxx LLC each constitute a legal, valid and binding obligation,
contract and agreement of the Company and Xxxxxxx LLC, respectively, enforceable against it
in accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or limiting creditors’
rights generally;
(d) the Existing Note Purchase Agreement, as amended by this Amendment, constitutes the
legal, valid and binding obligation, contract and agreement of the
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Company enforceable
against it in accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors’ rights generally;
(e) the execution, delivery and performance by each of the Company and Xxxxxxx LLC of
this Amendment, and the Guaranty Agreement of Xxxxxxx LLC, respectively, (i) have been duly
authorized by all requisite corporate or limited liability company, as applicable, action
and, if required, shareholder action, (ii) does not require the consent or approval of any
governmental or regulatory body or agency or registration, filing or declaration with, any
Governmental Authority, and (iii) will not (A) violate (1) any provision of law, statute,
rule or regulation or its certificate of incorporation, bylaws or operating agreement, (2)
any order of any court or any rule, regulation or order of any other agency or government
binding upon it, or (3) any provision of any material indenture, agreement or other
instrument to which it is a party or by which its properties or assets are or may be bound,
or (B) result in a breach of or constitute (alone or with due notice or lapse of time or
both) a default under any indenture, agreement or other instrument referred to in clause
(iii)(A)(3) of this paragraph (e);
(f) as of the date hereof, no Default or Event of Default has occurred which is
continuing;
(g) neither the Company nor any Subsidiary (i) is a Person described or designated in
the Specially Designated Nationals and Blocked Persons List of the Office of Foreign Assets
Control or in Section 1 of the Anti-Terrorism Order or (ii) engages in any dealings or
transactions with any such Person; and
(h) neither the Company nor any Subsidiary is in violation of the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct
Terrorism (USA PATRIOT ACT) Act of 2001 of the United States of America.
4. EFFECTIVENESS.
The amendments set forth in this Amendment shall become effective only upon the date of the
satisfaction in full of the following conditions precedent (which date shall be the “Effective
Date”).
4.1. Execution and Delivery of this Amendment.
The Company shall have delivered to each Noteholder a counterpart hereof, duly executed and
delivered by the Company, Xxxxxxx LLC and the Required Holders.
4.2. Representations and Warranties.
The representations and warranties of the Company made in Section 3 of this Amendment and of
Xxxxxxx LLC in the Guaranty Agreement shall remain true and correct in all respects as of the
Effective Date.
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4.3. No Injunction, Etc.
No injunction, writ, restraining order or other order of any nature prohibiting, directly or
indirectly, the consummation of the transactions contemplated herein shall have been issued and
remain in force by any Governmental Authority.
4.4. Amendment to 1999 Note Purchase Agreements.
The Company shall have delivered to the Noteholders a fully executed copy of that certain
Fourth Amendment to Note Purchase Agreements, dated as of October 23, 2008, by and among the
Company and each of the Persons signatory thereto with respect to those certain separate Note
Purchase Agreements, each dated as of June 16, 1999, together with each of the other instruments
and agreements executed and/or delivered in connection therewith, each certified as true and
correct by a Responsible Officer.
4.5. Amendment to 2004 Note Purchase Agreement.
The Company shall have delivered to the Noteholders a fully executed copy of that certain
Second Amendment to Note Purchase Agreement, dated as of October 23, 2008, by and among the Company
and each of the Persons signatory thereto with respect to that certain Note Purchase Agreement,
dated as of May 27, 2004, together with each of the other instruments and agreements executed
and/or delivered in connection therewith, each certified as true and correct by a Responsible
Officer.
4.6. Amendment to 2007 Note Purchase Agreement.
The Company shall have delivered to the Noteholders a fully executed copy of that certain
First Amendment to Note Purchase Agreement, dated as of October 23, 2008, by and among the Company
and each of the Persons signatory thereto with respect to that certain Note Purchase Agreement,
dated as of May 31, 2007, together with each of the other instruments and agreements executed
and/or delivered in connection therewith, each certified as true and correct by a Responsible
Officer.
4.7. 2008 Note Purchase Agreement.
The Company shall have delivered to the Noteholders a fully executed copy of that certain Note
Purchase Agreement, dated as of October 23, 2008, by and among the Company and each of the Persons
listed on Schedule A thereto, pursuant to which the Company has issued to such Persons its (a)
6.63% Senior Notes due November 1, 2018 in the aggregate principal amount of $376,000,000 and (b)
its 6.12% Senior Notes due November 1, 2015 in the aggregate principal amount of $24,000,000,
together with each of the other instruments and agreements executed and/or delivered in connection
therewith, each certified as true and correct by a Responsible Officer.
4.8. Amendment and Restatement of Intercreditor Agreement.
The Company shall have delivered to each Noteholder a fully-executed original of a Second
Amended and Restated Intercreditor Agreement, dated as of October 23, 2008, by and
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among the Noteholders, the 1999 Noteholders, the 2004 Noteholders, the 2007 Noteholders, the 2008 Noteholders
and the Agent (each as defined therein) and acknowledged and agreed to by the Company and Xxxxxxx
LLC.
4.9. Payment of Special Counsel Fees.
The Company shall have paid on or before the Effective Date the reasonable fees, charges and
disbursements of Xxxxxxx XxXxxxxxx LLP, the Noteholders’ special counsel, to the extent reflected
in a statement of such counsel rendered to the Company at least one Business Day prior to the
Effective Date.
5. EXPENSES.
Whether or not this Amendment shall become effective, the Company will promptly (and in any
event within thirty (30) days of receiving any statement or invoice therefor) pay all fees,
expenses and costs relating to this Amendment, including, but not limited to, the reasonable fees
of the Noteholders’ special counsel, Xxxxxxx XxXxxxxxx LLP, incurred in connection with the
preparation, negotiations and delivery of this Amendment and any other documents related thereto.
In addition, the Company will pay all such fees, expenses and costs set forth in any subsequent
statement within 30 days of its receipt thereof. Nothing in this Section 5 shall limit the
Company’s obligations pursuant to Section 15.1 of the Existing Note Purchase Agreement.
6. MISCELLANEOUS.
6.1. This Amendment constitutes a contract between the Company and the Noteholders for the
uses and purposes hereinabove set forth, and may be executed in any number of counterparts, each
executed counterpart constituting an original, but all together only one agreement. Each
counterpart may consist of a number of copies hereof, each signed by less than all, but together
signed by all, of the parties hereto. Delivery of an executed signature page by facsimile
transmission shall be effective as delivery of a manually signed counterpart of this Amendment.
6.2. Whenever any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party, and all the promises and agreements contained in
this Amendment by or on behalf of the Company and the Noteholders shall bind and inure to the
benefit of the respective successors and assigns of such parties, whether so expressed or not.
6.3. This Amendment constitutes the final written expression of all of the terms hereof and is
a complete and exclusive statement of those terms.
6.4. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE
PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK EXCLUDING CHOICE-OF-LAW PRINCIPLES
OF THE LAW OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER
THAN SUCH STATE.
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IN WITNESS WHEREOF, the parties hereto have caused the execution of this Amendment by duly
authorized officers of each as of the date hereof.
| THE X. X. XXXXXXX COMPANY |
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| By: | /s/ Xxxx X. Xxxxxx | |||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | Vice President and Treasurer | |||
Accepted and Agreed to:
| METLIFE INSURANCE COMPANY OF CONNECTICUT |
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| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Managing Director | |||
| MODERN WOODMEN OF AMERICA |
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| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxxx X. Xxxxxxx | |||
| Title: | Portfolio Manager — Private Placements | |||
GUARANTOR ACKNOWLEDGEMENT
The undersigned hereby acknowledges and agrees to the terms of the Fourth Amendment to Note
Purchase Agreements, dated as of October 23, 2008 (the “Fourth Amendment”), amending those certain
separate Note Purchase Agreements, each dated as of August 23, 2000 as amended by that certain
First Amendment to Note Purchase Agreements, dated as of November 30, 2001, that certain Second
Amendment to Note Purchase Agreements, dated as of May 27, 2004, and that certain Third Amendment
to Note Purchase Agreements, dated as of May 31, 2007 (as amended, the “Note Purchase Agreement”),
among The X.X. Xxxxxxx Company, an Ohio corporation, and the holders of Notes party thereto. The
undersigned hereby confirms that the Guaranty Agreement to which the undersigned is a party remains
in full force and effect after giving effect to the Fourth Amendment and continues to be the valid
and binding obligation of the undersigned, enforceable against the undersigned in accordance with
its terms, subject to any applicable bankruptcy, insolvency, reorganization, moratorium or similar
laws affecting the enforcement of creditor’s rights generally or by equitable principles.
Capitalized terms used herein but not defined are used as defined in the Note Purchase
Agreement.
Dated as of October 23, 2008
| X.X. XXXXXXX LLC |
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| By: | ||||
| Name: | ||||
| Title: | ||||
