Exhibit 10.30
FIRST AMENDMENT TO
NOTE PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT is entered into as of
June 25, 1996 among XXXX LABORATORIES, INC., a Pennsylvania corporation (the
"Company"), XXXXXX FIDUCIARY TRUST COMPANY ("Xxxxxx"), in its capacity as
successor Trustee (the "Trustee") of The Xxxx Laboratories, Inc. Employee Stock
Ownership and 401(k) Trust (the "ESOT") of the Xxxx Laboratories, Inc. Employee
Stock Ownership and 401(k) Plan (the "Plan"), and THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA ("Prudential").
W I T N E S S E T H:
WHEREAS, the Company adopted the Xxxx Laboratories, Inc. Employee Stock
Ownership Plan (the "Plan") effective January 1, 1989, changed the name of the
Plan to the name shown above effective January 1, 1990, and most recently
amended and restated the Plan effective January 1, 1994; and
WHEREAS, pursuant to the Plan and effective January 1, 1989, the
Company entered into an Agreement of Trust, with Mellon Bank, N.A. ("Mellon") as
trustee ("Trustee"), thereby establishing the ESOT; and
WHEREAS, as of June 19, 1989, the ESOT and the Company entered into a
Note Purchase Agreement ("Note Agreement") with Prudential whereby the ESOT sold
and Prudential purchased $100,000,000 principal amount of the ESOT's Notes
(guaranteed by the Company), all of which are still held by Prudential; and
WHEREAS, as of October 1, 1992, the Company removed Mellon as Trustee,
appointed Xxxxxx as successor Trustee and amended and restated the foregoing
Agreement of Trust, retitling it as "Trust Agreement for Xxxx Laboratories, Inc.
Employee Stock Ownership and 401(k) Plan," and continued the ESOT with the
successor Trustee; and
WHEREAS, the Company desires to acquire certain assets of X.X. Xxxxx &
Co.-Xxxx. and its affiliates pursuant to the Xxxxx Xxxxxxxx Worldwide Purchase
and Sale Agreement, dated as of March 11, 1996, between the Company and X.X.
Xxxxx & Co.-Xxxx. (the "Acquisition Agreement"); and
WHEREAS, the Company desires to obtain a $750 million credit facility
pursuant to a Credit Agreement, dated as of June 20, 1996 among the Company,
Xxxx Canada Inc., the banks parties thereto (the "Banks") and Xxxxxx Guaranty
Trust Company of New York, as Agent for the Banks (the "Credit Agreement"); and
WHEREAS, the consummation of the transactions contemplated by the
Acquisition Agreement and the Credit Agreement may cause the Company to be in
breach of certain covenants contained in the Note Agreement; and
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WHEREAS, in connection with the consummation of the transactions
contemplated by the Acquisition Agreement and the Credit Agreement, the parties
hereto desire to amend certain provisions of the Note Agreement, as provided for
herein.
NOW, THEREFORE, in consideration of the foregoing premises and mutual
covenants and agreements contained herein, the parties hereto agree as follows:
1. Amendments to Note Agreement
(a) Paragraph 5A of the Note Agreement is amended by deleting the
phrase "paragraphs 6A, 6B and 6C" from the second sentence thereof and replacing
it with the phrase "paragraphs 6A, 6B(b), 6C(g), (h) and (i), 6D, 6E, 6F and
6G."
(b) Paragraph 6 of the Note Agreement is hereby deleted in its
entirety, and the following is hereby inserted in lieu hereof:
6. NEGATIVE COVENANTS. The provisions of this paragraph 6
shall remain in effect only so long as any Note shall remain
outstanding.
6A. Minimum Consolidated Net Worth. Consolidated Net Worth
will at no time during any fiscal period set forth below be less than
an amount equal to the sum of (i) $270,000,000 plus (ii) an amount
equal to 25% of Consolidated Net Income for each fiscal quarter of the
Company ending after June 30, 1996 and on or prior to the date of
determination, in each case, for which Consolidated Net Income is
positive (but with no deduction on account of negative Consolidated Net
Income for any fiscal quarter of the Company) plus (iii) 50% of the
aggregate net proceeds, including the fair market value of property
other than cash (as determined in good faith by the Board of Directors
of the Company), received by the Company from the issuance and sale
after the date hereof of any capital stock of the Company (other than
the proceeds of any issuance and sale of any capital stock (x) to a
Subsidiary of the Company of (y) which is required to be redeemed, or
is redeemable at the option of the holder, at any time) or in
connection with the conversion or exchange of any Debt of the Company
into capital stock of the Company after December 31, 1995 (such sum
being the "Minimum Permissible Consolidated Net Worth"); provided that
the Minimum Permissible Consolidated Net Worth shall be reduced by an
amount not to exceed $15,000,000 for the after-tax effect of
restructuring charges actually taken by the Company in relation to its
acquisition of the Dearborn Business.
6B. Mergers and Sales of Assets.
(a) The Company will not consolidate or merge with or
into any other Person; provided that the Company may merge
with another Person if (x) the Company is the corporation
surviving such merger and (y) after giving effect to such
merger, no Default shall have occurred and be continuing.
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(b) The Company will not sell, lease or otherwise
transfer, directly or indirectly, assets (exclusive of assets
transferred in the ordinary course of business and any
Permitted Receivables Disposition) if after giving effect to
such transfer the aggregate book value of assets so
transferred subsequent to June 20, 1996 would exceed 25% of
Consolidated Assets of the day preceding the date of such
transfer.
6C. Negative Pledge. Neither the Company nor any Subsidiary
will create, assume or suffer to exist any Mortgage upon any asset now
owned or hereafter acquired by it, except:
(a) Mortgages existing on the date of the acquisition
by the Company of the Dearborn Business securing Debt
outstanding on such date in an aggregate principal or face
amount not exceeding $15,000,000;
(b) any Mortgage existing on any asset of any Person
at the time such Person becomes a Subsidiary and not created
in contemplation of such event;
(c) any Mortgage on any asset securing Debt incurred
or assumed for the purpose of financing all or any part of the
cost of acquiring or constructing such asset, provided that
such Mortgage attaches to such asset concurrently with or
within 90 days after the acquisition or completion of
construction thereof;
(d) any Mortgage on any asset of any Person existing
at the time such Person is merged or consolidated with or into
the Company or a Subsidiary and not created in contemplation
of such event;
(e) any Mortgage existing on any asset prior to the
acquisition thereof by the Company or a Subsidiary and not
created in contemplation of such acquisition;
(f) any Mortgage arising out of the refinancing,
extension, renewal or refunding of any Debt secured by any
Mortgage permitted by any of the foregoing clauses of this
paragraph, provided that the proceeds of such Debt are used
solely for the foregoing purpose and to pay financing costs
and such Debt is not secured by any additional assets;
(g) Mortgages arising in the ordinary course of its
business which (i) do not secure Debt or Derivatives
Obligations (ii) do not secure any obligation in an amount
exceeding $25,000,000 and (iii) do not in the aggregate
materially detract from the value of its assets or materially
impair the use thereof in the operation of its business;
(h) Mortgages on cash and cash equivalents securing
Derivatives Obligations, provided that the aggregate amount of
cash and
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cash equivalents subject to such Mortgages may at no time
exceed $25,000,000;
(i) Mortgages for current taxes, assessments and
other governmental charges not yet due and payable or being
contested in good faith and as to which adequate reserves in
accordance with generally accepted accounting principles have
been established;
(j) Mechanics, materialmen's carrier's,
warehousemen's or similar Mortgages for sums not yet due and
owing or being contested in good faith and as to which
adequate reserves in accordance with generally accepted
accounting principles have been established;
(k) Mortgages created in connection with Permitted
Securitization Transactions; provided that, except for the
assets transferred pursuant to Permitted Receivables
Dispositions made in connection with such Permitted
Securitization Transactions, no such Mortgage may extend to
any assets of the Company or any Subsidiary of the Company
that is not a Bankruptcy Remote Subsidiary; and
(l) Mortgages not otherwise permitted by the
foregoing clauses of this paragraph 6C securing Debt in an
aggregate principal or face amount at any date not to exceed
10% of Consolidated Net Worth.
6D. Debt to Total Capital. The ratio of Consolidated Debt to
Total Capital shall not exceed during any period set forth below the
applicable ratio set forth below for such period.
Period Ratio
------ -----
June 28, 1996 - December 30, 1996 72%
December 31, 1996 - December 30, 1997 70%
December 31, 1997 - December 30, 1998 65%
December 31, 1998 - December 30, 1999 57%
December 31, 1999 and thereafter 50%
6E. Debt of Subsidiaries. Total Debt of all Subsidiaries
(excluding Debt (i) of a Subsidiary to the Company and (ii) of a
Subsidiary to a wholly owned Subsidiary) will at no time exceed 30% of
Total Capital. For purposes of this paragraph 6E any preferred stock of
a Consolidated Subsidiary held by a Person other than the Company or a
Wholly-Owned Consolidated Subsidiary shall be included, at the higher
of its voluntary or involuntary liquidation value, in "Consolidated
Debt" and in the "Debt" of such Consolidated Subsidiary.
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6F. Interest Coverage Ratio. As of the last day of each fiscal
quarter of the Company ending during each period set forth below, the
Interest Coverage Ratio at such last day will not be less than the
ratio set forth below opposite such period:
Period Ratio
------ -----
Quarter ending December 31, 1996 through quarter 3.00 to 1.00
ending June 30, 1997
Quarter ending September 30, 1997 through quarter 3.25 to 1.00
ending December 31, 1997
Quarter ending March 31, 1998 through quarter ending 3.50 to 1.00
September 30, 1998
Quarter ending December 31, 1998 and all quarters 4.00 to 1.00
thereafter
6G. Sale-Leaseback Transactions. Neither the Company nor any
of its Subsidiaries will engage in any Sale-Leaseback Transactions
unless the Company or such Subsidiary would be entitled, pursuant to
the provisions of paragraph 6C, to incur Debt with a principal amount
equal to or exceeding the Value of such Sale-Leaseback Transaction
secured by a Mortgage on the property to be leased (after giving
similar effect to all other Sale-Leaseback Transactions in effect at
such time). For purposes of this paragraph 6G, "Value" means, with
respect to a Sale-Leaseback Transaction, at any time, the amount equal
to the greater of (i) the net proceeds of the sale or transfer of the
property leased pursuant to such Sale-Leaseback; and (ii) the fair
value in the opinion of the Board of Directors of the Company of such
property at the time of entering into such Sale-Leaseback Transaction,
in either case divided first by the number of full years of the term of
the lease and then multiplied by the number of full years of such term
remaining at the time of determination, without regard to any renewal
or extension options contained in the lease.
6H. Transactions with Affiliates. The Company will not, and
will not permit any Subsidiary to, directly or indirectly, pay any
funds to or for the account of, make any investment (whether by
acquisition of stock or indebtedness, by loan, advance, transfer of
property, guarantee or other agreement to pay, purchaser or service,
directly or indirectly, any Debt, or otherwise) in, lease, sell,
transfer or otherwise dispose of any assets, tangible or intangible,
to, or participate in, or effect, any transaction with, any Affiliate
except on an arms-length basis on terms at least as favorable to the
Company or such Subsidiary as could have been obtained from a third
party who was not an Affiliate; provided that the foregoing provisions
of this Section shall not prohibit any such Person from declaring or
paying any lawful dividend or other payment ratably in respect of all
of its capital stock, from paying reasonable compensation to its
directors and officers or from
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entering into other transactions that the Company determines are in its
best interests and having a cost to such Person not in excess of
$5,000,000.
(c) Paragraph 7A(a)(i) of the Note Agreement is amended by inserting
after the phrase "Gross-up Rate" the phrase "plus the Additional Interest then
applicable."
(d) The first sentence of paragraph 7D of the Note Agreement is amended
by inserting after the phrase "Gross-up Rate" and after the phrase "Fully Tax
Exempt Rate" the phrase "plus the Additional Interest then applicable."
(e) Clause (v) of paragraph 9A of the Note Agreement is hereby amended
in its entirety to read as follows:
(v) any representation, warranty, certification or statement
made by the Company or, in the event the Company Notes are not
outstanding, the ESOT in this Agreement or in any certificate,
financial statement or other document delivered pursuant to this
Agreement shall be false in any material respect on the date as of
which made; or
(f) The following definitions set forth in paragraph 12A of the Note
Agreement are hereby deleted:
Cash Equivalents
Consolidated Funded Debt
Consolidated Tangible Gross Worth
Consolidated Tangible Net Worth
Cumulative Net Income Amount
Fixed Charges
Funded Debt
Interest Expense
Rent Expense
Tax Expense
(g) The following definitions set forth in paragraph 12A of the Note
Agreement are hereby modified in their entirety so that such definitions, as so
modified, shall read as follows:
"CONSOLIDATED NET INCOME" means, for any fiscal period, the net income
of the Company and its Consolidated Subsidiaries, determined on a consolidated
basis for such period, exclusive of the effect of any extraordinary or other
non-recurring gain or loss (such as non-recurring restructuring and/or
integration costs arising as a result of the acquisition to the Dearborn
business).
"MORTGAGES" means, with respect to any asset, any mortgage, lien,
pledge, charge or security interest, or any other type of preferential
arrangement that has the practical effect of creating a security interest, in
respect of such asset. For the purposes of this Agreement, the Company or any
Subsidiary shall be deemed to own subject to a Mortgage any asset which it has
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acquired or holds subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title retention agreement
relating to such asset.
"QUALIFIED TAX-EXEMPT RATE" shall mean 8.15% plus the Additional
Interest then applicable.
(h) The following definitions are hereby added to paragraph 12A of the
Note Agreement, to be inserted in the appropriate alphabetical order:
"ACQUISITION AGREEMENT" means the Xxxxx Xxxxxxxx Worldwide Purchase and
Sale Agreement, dated as of March 11, 1996, between the company and X.X. Xxxxx &
Co.-Conn., and any and all amendments thereto.
"ADDITIONAL INTEREST" means the quotient of (a) the percentage rate
determined in accordance with Schedule X hereto, divided by (b) the Adjustment
Fraction in effect as of June 28, 1996.
"AFFILIATE" means (i) any Person that directly, or indirectly through
one or more intermediaries, controls the Company (a "Controlling Person") or
(ii) any Person (other than the Company or a Subsidiary) which is controlled by
or is under common control with a Controlling Person. As used herein, the term
"control" means possession, directly or indirectly, of the power to vote 10% or
more of any class of voting securities of a Person or to direct or cause the
direction of the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"BANKRUPTCY REMOTE SUBSIDIARY" means any Subsidiary of the Company
created in connection with a Permitted Securitization Transaction whose only
material creditors are the purchaser or lender related to such Permitted
Securitization Transaction and the Company or any Subsidiary of the Company that
is the originator and seller or contributor of accounts receivable to such
Subsidiary in connection with a Permitted Securitization Transaction.
"CONSOLIDATED ASSETS" means at any date the assets of the Company and
its Consolidated Subsidiaries, determined on a consolidated basis as of such
date.
"CONSOLIDATED DEBT" means at any date the Debt of the Company and its
Consolidated Subsidiaries, determined on a consolidated basis as of such date.
"CONSOLIDATED EBIT" means, for any fiscal period, Consolidated Net
Income for such period, excluding the effect of foreign currency translation
gains and losses arising out of operations of hyperinflationary economies, plus,
to the extent deducted in determining Consolidated Net Income for such period,
the aggregate amount of (i) Consolidated Interest Expense and (ii) income tax
expense.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the interest
expense of the Company and its Consolidated Subsidiaries determined on a
consolidated basis for such period (excluding amortization of deferred financing
costs).
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"CONSOLIDATED NET WORTH" means at any date the consolidated
stockholders' equity of the Company and its Consolidated Subsidiaries determined
as of such date (other than any amount attributable to stock which is required
to be redeemed or is redeemable at the option of the holder, if certain events
or conditions occur or exist or otherwise), excluding the effect thereon of
foreign currency translation gains and losses arising after June 30, 1996 out of
operations in hyperinflationary economics.
"CONSOLIDATED SUBSIDIARY" means at any date any Subsidiary or other
entity the accounts of which would be consolidated with those of the Company in
its consolidated financial statements if such statements were prepared as of
such date.
"CREDIT AGREEMENT" means the Credit Agreement, dated as of June 20,
1996 among the Company, Xxxx Canada Inc., the banks parties thereto (the
"Banks") and Xxxxxx Guaranty Trust Company of New York, as Agent for the Banks.
"DEARBORN BUSINESS" has the meaning set forth in the Acquisition
Agreement.
"DEBT" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable, construction retentions and similar
items arising in the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with generally accepted
accounting principles, (v) all noncontingent obligations (and, for purposes of
paragraph 6C, all contingent obligations) of such Person to reimburse any bank
or other Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) all Debt secured by a Mortgage on any asset of such Person up
to the greater of fair market value or book value of such asset, whether or not
such Debt is otherwise an obligation of such Person and (vii) all Debt of others
Guaranteed by such Person.
"DERIVATIVES OBLIGATIONS" of any Person means all obligations of such
Person in respect of any rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
the foregoing transactions) or any combination of the foregoing transactions.
"GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such person directly or indirectly guaranteeing any Debt of any
other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt (whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to take-or-pay, or
to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the holder of such Debt of the
payment thereof or to protect such holder against loss in respect thereof (in
whole or in part), provided that the term Guarantee shall not include
endorsements for
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collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"INTEREST COVERAGE RATIO" means at the end of any fiscal quarter of the
Company the ratio of (i) Consolidated EBIT for the four consecutive fiscal
quarters of the Company and its Consolidated Subsidiaries ending of such date to
(ii) Consolidated Interest Expense for such period; provided that for the
periods ended December 31, 1996 and March 31, 1997, such ratio shall be
calculated from July 1, 1996 through the fiscal quarter then ended.
"PERMITTED RECEIVABLES DISPOSITION" means any transfer (by way of sale,
pledge or otherwise) by the Company or any Subsidiary to any other Person
(including a Bankruptcy Remote Subsidiary) of accounts receivable and other
rights to payment (whether constituting accounts, chattel paper, instruments,
general intangibles or otherwise and including the right to payment of interest
or finance charges) and related contract and other rights and property
(including all general intangibles, collections and other proceeds relating
thereto, all security therefor (and the property subject thereto), all
guarantees and other agreements or arrangements of whatsoever character from
time to time supporting such right to payment, and all other right, title and
interest in goods relating to a sale which gave rise to such right of payment)
in connection with a Permitted Securitization Transaction.
"PERMITTED SECURITIZATION TRANSACTION" means any receivables purchase
or financing transaction pursuant to which the Company or a Subsidiary
(including a Bankruptcy Remote Subsidiary) sells or grants a security interest
in its accounts receivable or its Subsidiaries (and related rights and property
as described in the definition of Permitted Receivables Disposition) or an
undivided interest therein, provided that (i) the aggregate principal or
invested amount outstanding at any one time under all such facilities shall not
exceed $100,000,000 and (ii) the recourse of the purchaser or lender with
respect to such transaction for losses resulting from an obligor's failure to
pay a receivable due to credit problems is limited to such accounts receivable
or an interest therein, and the collections thereof.
"SALE-LEASEBACK TRANSACTION" means any arrangement with any Person
providing for the leasing by the Company or any Subsidiary of any property that,
or of any property similar to and used for substantially the same purposes as
any other property that, has been or is to be sold, assigned, transferred or
otherwise disposed of by the Company or any of its Subsidiaries to such Person
with the intention of entering into such a lease.
"TOTAL CAPITAL" means, at any date, the sum of (x) Consolidated Debt
plus (y) consolidated shareholders' equity of the Company and its Consolidated
Subsidiaries (including for this purpose any amount attributable to stock which
is required to be redeemed or is redeemable at the option of the holder, if
certain events or conditions occur or exist or otherwise), excluding the effect
thereon of foreign currency translation gains and losses arising after June 30,
1996 out of operations in hyperinflationary economies, in each case determined
at such date.
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"WHOLLY-OWNED CONSOLIDATED SUBSIDIARY" means any Consolidated
Subsidiary all of the shares of capital stock or other ownership interests of
which (except directors' qualifying shares) are at the time directly or
indirectly owned by the Company.
(i) The Note Agreement is hereby amended by adding as Schedule X
thereto Schedule X as annexed to this Amendment.
2. Representations and Warranties of the Company
The Company hereby incorporates the representations and warranties
contained in Article 4 of the Credit Agreement (together with all related
defined terms) as in effect on the date hereof by reference herein to the same
extent as if set forth at length herein (the "Incorporated Provisions") and
hereby makes such representations and warranties (to the knowledge of the
Company, when applicable under the Credit Agreement) for the benefit of
Prudential in connection with the execution and delivery of this amendment;
provided, that references in the Incorporated Provisions to "this Agreement" and
"Notes" shall be taken as references to the Note Agreement as amended hereby and
to the Notes outstanding thereunder and references to "Agent," "Bank" and
"Banks" shall be taken as references to Prudential as Holder of the Notes under
the Note Agreement. The Company has heretofore delivered to Prudential true and
correct copies of the Information Memorandum (as defined in the Incorporated
Provisions) and the financial statements and information referred to in Section
4.4 and Section 4.12 of the Incorporated Provisions.
3. Effectiveness of Agreement
This Amendment shall become effective upon the delivery to Prudential
of an Officer's Certificate certifying: (i) there exists no Default or Event of
Default under the Note Agreement (after giving effect to the provisions of this
Amendment amending the Note Agreement); (ii) the Company has acquired the
Dearborn Business on terms in all material respects as set forth in the
Acquisition Agreement; (iii) the representations and warranties of the Company,
made in Section 2 of this Amendment are true and correct with the same effect as
if made on and as of the date of such Certificate; and (iv) the Initial Funding
Date has occurred under the Credit Agreement.
4. Miscellaneous
(a) Capitalized terms not otherwise defined herein shall have the
meanings ascribed thereto in the Note Agreement.
(b) On and after the effective date of this Amendment, each reference
in the Note Agreement and the Notes shall mean and be a reference to the Note
Agreement as amended by this Amendment.
(c) The Note Agreement, as amended by this Amendment, is and shall
continue to be in full force and effect and is hereby in all respects ratified
and confirmed.
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(d) This Amendment may be executed in any number of counterparts and by
any combination of the parties hereto in separate counterparts, each of which
counterparts shall be an original and all of which taken together shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
XXXX LABORATORIES, INC. EMPLOYEE
STOCK OWNERSHIP AND 401(K) TRUST
ESTABLISHED BY THE XXXX
LABORATORIES, INC. EMPLOYEE STOCK
OWNERSHIP AND 501(K) PLAN
By: XXXXXX FIDUCIARY TRUST COMPANY
as Trustee
By:
---------------------------------------
Title:
XXXX LABORATORIES, INC.
By:
---------------------------------------
Title:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By:
---------------------------------------
Title:
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SCHEDULE X
PRICING LEVELS
"Additional Interest" means, for any date, the rate set forth below in
the column corresponding to the "Pricing Level" that applies at such date:
Xxxxx X Xxxxx XX Xxxxx XXX Xxxxx XX Level V
0.00% 0.08% 0.28% 0.38% 0.48%
"Level I Pricing" applies to any date if, on any Determination Date
prior thereto (x) the Company's Interest Coverage Ratio equalled or exceeded
6.5:1 and its FFO/Debt Ratio equalled or exceeded 0.55:1 or (y) the Company's
long-term debt was rated A+ or higher by S&P or A1 or higher by Moody's.
"Level II Pricing" applies at any date if, on any Determination Date
prior thereto (i)(x) the Company's Interest Coverage Ratio equalled or exceeded
5.5:1 and its FFO/Debt Ratio equalled or exceeded 0.50:1 or (y) the Company's
long-term debt was rated A or higher by S&P or A2 or higher by Moody's and (ii)
Level I pricing does not apply.
"Level III Pricing" applies at any date if, on any Determination Date
prior thereto (i)(x) the Company's Interest Coverage Ratio equaled or exceeded
4.0:1 and its FFO/Debt Ratio equalled or exceeded 0.40:1 or (y) the Company's
long-term debt was rated BBB+ or higher by S&P or Baal or higher by Moody's and
(ii) neither Level I Pricing nor Level II Pricing applies.
"Level IV Pricing" applies at any date if, on any Determination Date
prior thereto (i)(x) the Company's Interest Coverage Ratio equalled or exceeded
3.0:1 and its FFO/Debt Ratio equalled or exceeded 0.30:1 or (y) the Company's
long-term debt was rated BBB or higher by S&P or Baa2 or higher by Moody's and
(ii) none of the Level I Pricing, Level II Pricing and Level III Pricing
applies.
"Level V Pricing" applies at any date if, at any such date, no other
Pricing Level applies.
"Pricing Level" refers to the determination of which Xxxxx X, Xxxxx XX,
Xxxxx XXX, Xxxxx XX or Level V applies at any date.
"Determination Date" means any date after June 30, 1996 in respect of
determining a Pricing Level.
"FFO/Debt Ratio" means at the end of any fiscal quarter of the Company
the ratio of (x) Funds from Operations for the four fiscal quarters of the
Company and its Consolidated Subsidiaries ending on such date to (y)
Consolidated Debt as of such date.
"Funds from Operations" for any period means consolidated net income
from continuing operations of the Company and its Consolidated Subsidiaries for
such period plus, to the extent
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deducted in determining such consolidated net income for such period, the
aggregate amount of depreciation and amortization expense and deferred income
taxes, and plus (to the extent deducted in determining such consolidated net
income for such period) or minus (to the extent added in determining such
consolidated net income for such period) other non-cash operating items
excluding changes in operating assets and liabilities.
"Moody's" means Xxxxx'x Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Services.
In connection with the determination of Pricing Levels, the
following shall apply:
(a) The credit ratings to be utilized for purposes of
this Schedule are those assigned to the senior unsecured
long-term debt securities of the company without third-party
credit enhancement, whether or not any such debt securities
are actually outstanding, and any rating assigned to any other
debt security of the Company shall be disregarded. The rating
in effect at any date is that in effect at the close of
business on such date.
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