THIRD AMENDMENT TO NOTE AGREEMENT
Reference is hereby made to the Note Agreement dated as of January 19
1990, as amended pursuant to a First Amendment to Note Agreement dated as of
April 8, 1992 and as further amended pursuant to a Second Amendment to Note
Agreement dated as of July 31, 1992 (together, the "Original Agreement"), and as
amended hereby (the "Agreement"), among Xxxxxx Industries Inc. (the "Company"),
Xxxxxx Industries Holdings Inc., formerly Day-Brite Lighting, Inc. ("Holdings"),
and the Purchasers listed on Schedule I hereto (collectively, the "Purchasers"
and with the Company and Holdings, the "Parties"). This Third Amendment to the
Original Agreement is hereinafter referred to as the "Third Amendment."
WHEREAS, the Company plans to exchange its lighting division assets for
a minority interest in a joint venture, as further described in Exhibit A hereto
(the "Restructuring"); and
WHEREAS, in connection with the Restructuring, the Company and the
Purchasers have negotiated certain amendments to, and waivers under the Original
Agreement, as hereinafter set forth, including the following: (i) amending
Section 7.4 (Debt) of the Original Agreement to limit the Debt which can be
incurred by the Company and its Restricted Subsidiaries by reference to
prescribed thresholds for operating cash flow, (ii) waiving compliance with
Sections 7.7 (Merger or Sale of Substantially All Assets) and 7.8 (Sale of
Assets) of the Original Agreement in connection with the transfer of the
lighting business of the Company pursuant to the Restructuring and (iii) making
certain other changes to the Original Agreement.
IT IS THEREFORE AGREED THAT:
1. Definitions.
(a) All defined terms used herein shall have the meanings assigned
to such terms in the Original Agreement except as noted
herein.
(b) The following definition of Priority Debt is added to the Original
Agreement:
"Priority Debt - has the meaning set forth in Section 7.4(b)."
(c) The following definition of EBITDA is added to the Original
Agreement.
"EBITDA - means, for any period, Adjusted Net Earnings plus
(to the extent deducted from, or not included in, Adjusted Net
Earnings for the relevant period) depreciation, amortization,
interest expense, taxes and cash distributions from minority
investments."
(d) The definition of Consolidated Earnings Before Fixed Charges
is amended by deleting from the phrase beginning with (i) the
words "Section 7.6 Net Earnings" and inserting in lieu thereof
"Adjusted Net Earnings."
(e) The definition of Consolidated Fixed Charges is amended by
deleting from its last sentence the words "Section 7.6 Net
Earnings" and inserting in lieu thereof "Adjusted Net
Earnings."
(f) The definition of Restricted Subsidiary is amended by deleting
from the last sentence the phrase "and immediately thereafter
the Company could incur additional Funded Debt pursuant to
Section 7.4(c) after giving effect to said designation" and
inserting in lieu thereof the following:
"and immediately thereafter the Company is in compliance with
Section 7.4(a) after giving effect to such designation."
(g) The following sentence is added at the end of the definition
of Restricted Subsidiary in the Original Agreement:
"At no time shall the entity resulting from the Restructuring
(as defined in the Third Amendment, dated July 7, 1998, to
this Agreement) be a Restricted Subsidiary."
(h) The definition of Unrestricted Subsidiary in the Original
Agreement is amended by deleting therefrom the phrase
beginning with (ii) and inserting in lieu thereof the
following:
"(ii) immediately thereafter, the Company is in compliance
with Section 7.4(a)."
(i) The definition of Section 7.6 Net Earnings is amended by
changing the name of such definition from "Section 7.6 Net
Earnings" to "Adjusted Net Earnings."
2. Amendments.
(a) The Original Agreement is amended by deleting from
subparagraph (g) of Section 7.3 the last words, which are
"Section 7.4(d)" and inserting in lieu thereof "Section
7.4(b)."
(b) The Original Agreement is amended by deleting therefrom
Section 7.4 in its entirety and inserting in lieu thereof the
following:
"7.4 Debt.
(a) The Company will not permit at any time the ratio of
Funded Debt of the Company and its Restricted Subsidiaries to
EBITDA to exceed (i) 3.5 to 1.0 for the period commencing the
date hereof through September 30, 1999, and (ii) 3.0 to 1.0
subsequent to September 30, 1999. For purposes of this Section
7.4(a), Current Debt of the Company and its Restricted
Subsidiaries shall be deemed to constitute Funded Debt of the
Company and its Restricted Subsidiaries unless, for a period
of forty-five (45) consecutive days (which period shall be
determined by the Company) during each fiscal year, there
shall have been outstanding no Current Debt of the Company and
its Restricted Subsidiaries. For purposes of calculating the
amount of Current Debt which will be deemed to constitute
Funded Debt pursuant to the previous sentence, the amount of
such Funded Debt will equal the average amount of Current Debt
outstanding during each forty-five (45) day period of
determination.
(b) The Company will not permit at any time Debt of its
Restricted Subsidiaries (other than Debt owed to the Company
or another Restricted Subsidiary) and Secured Debt (together,
"Priority Debt") to be incurred, unless after giving effect
thereto, (i) such Priority Debt would be permitted to be
outstanding under paragraph (a) of this Section 7.4, and (ii)
the aggregate amount of such Priority Debt at any time
outstanding would not exceed the sum of $10,000,000 plus 15%
of Consolidated Net Tangible Assets. If the Company or a
Restricted Subsidiary purchases or acquires 75% or more of the
assets or capital stock of a Person that has outstanding
Funded Debt and such acquired Person is thereupon designated a
Restricted Subsidiary, then, notwithstanding clause (ii) of
this paragraph (b), such Funded Debt of such acquired Person
may remain outstanding if after giving effect thereto, the
Company could incur additional Funded Debt pursuant to
paragraph (a) of this Section 7.4."
(c) The Original Agreement is amended by deleting from Section
7.7(b) the phrase beginning with (iii) and inserting in lieu
thereof the following:
"(iii) after giving effect to such merger, consolidation,
sale, lease or conveyance of assets the surviving, corporation
would be in compliance with Section 7.4(a)."
(d) The Original Agreement is amended by deleting from Section
7.10 the phrase beginning with (iii) and inserting in lieu
thereof the following:
"(iii) after giving effect thereto, the Company would be in
compliance with Section 7.4(a)."
3. Agreement.
The Purchasers hereby agree that the Company's transfer of its lighting
assets and related liabilities to a joint venture, as contemplated by the
Restructuring, shall not:
(a) constitute a sale or conveyance of substantially all of the
Company's assets to another Person under Section 7.7 of the
Original Agreement; and
(b) constitute a Disposition under Section 7.8 of the Original
Agreement, provided, however, that such transfer of the
Company's lighting, assets and related liabilities, as
contemplated by the Restructuring, does not exceed the sum of
(i) the book value of $140,000,000, plus (ii) an aggregate
amount of working capital not to exceed $30,000,000.
4. Representations and Warranties.
(a) Each of the Company and Holdings confirms that (i) except as
otherwise set forth in the Schedules attached hereto, each of
the representations and warranties set forth in the Original
Agreement and the information set forth in Exhibit A is true
and correct in all material respects as of the date hereof,
except that to the extent any such representation, warranty
or information is stated to relate solely to an earlier date,
each of the Company and Holdings confirms that such
representation, warranty or information was true and correct
in all material respects as of such earlier date and (ii) no
Default or Event of Default (which has not been cured
pursuant to amendments made hereunder) has occurred and is
continuing.
(b) Each of the Company and Holdings represents and warrants that
it has the requisite corporate power and authority to enter
into this Third Amendment and to otherwise carry out the
transactions contemplated by this Third Amendment.
(c) Each of the Company and Holdings represents and warrants that
this Third Amendment has been duly authorized by all
necessary corporate action on the part of the Company and
Holdings and that this Third Amendment has been executed and
delivered by the Company and Holdings and constitutes the
legal, valid and binding obligation of each of the Company
and Holdings, enforceable against each of them in accordance
with its terms, except to the extent that enforcement hereof
may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws of general
application relating to or affecting the enforcement of the
rights of creditors or by equitable principles regardless of
whether enforcement is sought in equity or at law.
(d) No written statement or document furnished by or on behalf of
the Company or Holdings in connection with this Third
Amendment contains any untrue statement of a material fact or
omits a material fact necessary to make the statements
contained therein, in light of the circumstances under which
made, not misleading.
(e) The execution, delivery and performance by the Company and
Holdings of this Third Amendment will not violate any
provision of any law, rule, regulation or ordinance or any
order, judgment, decree or ruling of any court, arbitrator,
governmental authority or agency applicable to the Company or
Holdings and will not result in any breach of any of the
provisions of, or constitute a default under, or result in
the creation of any Lien on any property of the Company or
Holdings under the provisions of, any charter document,
by-law, loan, agreement or any other material agreement or
material instrument to which it is a party or by which it or
its property may be bound or affected.
5. Covenants.
The Company and Holdings hereby agree that, within 45 days of the date
hereof, each shall deliver to the Purchasers copies of the resolutions adopted
by their respective Board of Directors authorizing the execution and delivery of
this Third Amendment.
6. Counterparts.
This Third Amendment may be executed by the parties hereto
individually, or in any combination of the parties hereto in several
counterparts, all of which taken together shall constitute one and the same
Third Amendment.
7. Conditions to Effectiveness.
The effectiveness of the Purchasers' agreement to this Third Amendment
is subject to the satisfaction on or prior to the date hereof of each of the
following conditions:
(a) Delivery to the Purchasers of copies of this Third Amendment
executed by the Company.
(b) Payment of fees and expenses of counsel to the Purchasers.
(c) Delivery by the Company of evidence satisfactory to the
Purchasers that the Restructuring has been consummated.
8. Ratification and Acknowledgment.
All of the representations, warranties, provisions, covenants, terms
and conditions of the Original Agreement not amended herein shall remain
unaltered and in full force and effect. The Original Agreement, as amended
hereby, is in all respects agreed to, ratified and confirmed by the Company.
Each of the Company and Holdings acknowledges and agrees that the amendments and
agreements contained herein shall not be construed as establishing a course of
conduct on the part of the Purchasers upon which the Company and Holdings may
rely at any time in the future.
9. Reference to and Effect on the Agreement.
Upon the effectiveness of this Third Amendment, each reference in the
Original Agreement and in other documents describing or referencing the Original
Agreement to "this Agreement," "hereunder," "hereof," "herein," or words of like
import referring to the Original Agreement, shall mean and be a reference to the
Original Agreement, as amended hereby.
Dated as of this 7th day of July, 1998.
XXXXXX INDUSTRIES HOLDINGS INC. XXXXXX INDUSTRIES INC.
By: By:
Its: Its:
ALLSTATE LIFE INSURANCE COMPANY AID ASSOCIATION FOR LUTHERANS
By: By:
Its:
By:
Authorized Signature
THE MINNESOTA MUTUAL LIFE WOODMEN ACCIDENT AND LIFE
INSURANCE COMPANY COMPANY
By: By:
Its: Its:
AMERICAN FAMILY LIFE GUARANTEE LIFE INSURANCE
INSURANCE COMPANY COMPANY
By: By:
Its: Its:
NATIONAL LIFE INSURANCE AMERICAN UNITED LIFE INSURANCE
COMPANY COMPANY
By: By:
Its: Its:
GENERAL AMERICAN LIFE
INSURANCE COMPANY
By:
Its:
THE AMERICAN FRANKLIN LIFE
INSURANCE COMPANY
By:
Its:
MODERN WOODMEN OF AMERICA
By:
Its:
PAN-AMERICAN LIFE INSURANCE
COMPANY
By:
Its:
FIRST COLONY LIFE INSURANCE
COMPANY
By:
Its:
SCHEDULE I
Allstate Life Insurance Company
Aid Association for Lutherans
The Minnesota Mutual Life Insurance Company American Family Life Insurance
Company National Life Insurance Company American United Life Insurance Company
General American Life Insurance Company The American Franklin Life Insurance
Company Guarantee Life Insurance Company Modern Woodmen of America Woodmen
Accident and Life Company Pan-American Life Insurance Company GE Financial
Assurance First Colony Life Insurance Company
