June 16, 2000
Xxxxx Corporation
River Place
000 Xxxx Xx.
Xxx 0000
Xxxxxxx, XX 00000-0000
Re: Amendment to Note Purchase and Private Shelf Agreement
dated as of May 12, 1994
------------------------------------------------------
Ladies and Gentlemen:
Reference is made to that certain Note Purchase and Private Shelf Agreement
dated as of May 12, 1994 (as amended from time to time, the "Agreement") between
Xxxxx Corporation (the "Company") and The Prudential Insurance Company of
America ("Pricoa") and each "Prudential Affiliate" which becomes a party thereto
in accordance with the terms thereof (together with Pricoa, collectively
referred to as "Prudential"), pursuant to which the Company issued and sold, and
Prudential purchased the following Notes:
(i) 7.62% Series A Notes in the original aggregate principal amount of
$25,000,000, due May 13, 2009;
(ii) 7.98% Series B Notes in the original aggregate principal amount of
$25,000,000, due March 7, 2010; and
(iii) 7.38% Series C Notes in the original aggregate principal amount of
$15,000,000, due May 24, 2015.
Capitalized terms used herein and not otherwise defined herein shall have the
meaning assigned to such terms in the Agreement.
The Company now proposes to issue and Prudential has agreed to purchase the
Company's 8.05% Series D Notes in the original aggregate principal amount of
$50,000,000, due June 16, 2005 (the "Series D Notes"). Consequently, in order
to, among other things, facilitate the issuance of the Series D Notes, the
Company and Prudential desire to amend the Agreement in accordance with
paragraph 11C of the Agreement, subject to the satisfaction of the conditions
precedent described below. The parties therefore hereby agrees as follows:
Xxxxx Corporation
June 16, 2000
Page 2
SECTION 1. Amendment. From and after the date this letter becomes effective
in accordance with its terms, the Agreement is amended as follows:
1.1 The cover page to the Agreement and paragraph 1B of the Agreement
is each hereby amended to delete in its entirety the amount "$40,000,000"
appearing therein and to substitute therefor the amount "$115,000,000".
1.2 Paragraph 2B(2) of the Agreement is amended to delete in its
entirety clause (i) thereof and to substitute therefor the following
clause: "(i) June 16, 2003, and".
1.3 The Company and Prudential expressly agree and acknowledge that as
of the date hereof (after giving effect to the issuance of the Series D
Notes) the Available Facility Amount is $25,000,000. NOTWITHSTANDING THE
FOREGOING, THIS AMENDMENT AND THE AGREEMENT HAVE BEEN ENTERED INTO ON THE
EXPRESS UNDERSTANDING THAT NEITHER PRUDENTIAL NOR ANY PRUDENTIAL AFFILIATE
SHALL BE OBLIGATED TO MAKE OR ACCEPT OFFERS TO PURCHASE SHELF NOTES, OR TO
QUOTE RATES, SPREADS OR OTHER TERMS WITH RESPECT TO SPECIFIC PURCHASES OF
SHELF NOTES, AND THE FACILITY SHALL IN NO WAY BE CONSTRUED AS A COMMITMENT
BY PRUDENTIAL OR ANY PRUDENTIAL AFFILIATE.
1.4 Paragraph 2B(8)(i) of the Agreement is hereby deleted in its
entirety and the following is hereby substituted therefor:
"2B(8)(i) Facility Fee. The Company agrees to pay to Prudential
in immediately available funds a fee (herein called the `Facility
Fee') on each Private Shelf Closing Day in an amount equal to 0.15% of
the aggregate principal amount of the Notes sold on such Closing Day,
unless the Company shall have requested pursuant to its Request for
Purchase that such fee be included in the rate quotes Prudential may
provide pursuant to paragraph 2B(4) and such fee is in fact so
included. Notwithstanding the foregoing, Prudential and the Company
acknowledge and agree that (i) the Facility Fee for the Series A
Notes, Series B Notes and Series C Notes has been paid in full by the
Company and (ii) a $75,000 structuring fee shall be payable in
connection with the Series D Notes and no other issuance fee of any
kind (whether a Facility Fee, shelf draw fee, etc.) shall be payable
by the Company in connection with the issuance of the Series D Notes."
Xxxxx Corporation
June 16, 2000
Page 3
1.5 The Agreement is hereby amended to delete in its entirety
paragraph 6A of the Agreement and to substitute the following therefor:
6A. Most Favored Lender. Unless otherwise specified in writing by
the Required Holder(s), from and after June 1, 2000, the Company will
not, and will not permit any Subsidiary to, agree to, with or for the
benefit of the holder of any other Indebtedness of the Company or any
Subsidiary, any financial or restrictive covenants or events of
default which are more restrictive than, or in addition to, the
financial or negative covenants or Events of Default contained in this
Agreement, unless the Company has entered into, or has caused such
Subsidiary to enter into, an agreement with the holders of the Notes,
in form and substance reasonably satisfactory to the holders of the
Notes, whereby such financial or negative covenants or events of
default are added to this Agreement for the benefit of the Notes, and
any conditions precedent to the effectiveness of such agreement have
been satisfied; provided, however, that this paragraph 6A shall not
apply to (i) an amendment made to Indebtedness which is outstanding on
June 1, 2000 unless such amendment constitutes a refinancing or
extension of such Indebtedness and (ii) previously existing
Indebtedness of another Person which Indebtedness is either assumed by
the Company in connection with an acquisition, or becomes part of the
Company's consolidated Indebtedness by virtue of such other Person
becoming a Subsidiary of the Company as a result of such acquisition
provided that (x) such Indebtedness was not incurred in contemplation
of such acquisition or assumption and (y) the aggregate principal
amount of such Indebtedness per acquisition or assumption does not
exceed $10,000,000.
1.6 Paragraph 6C(2) of the Agreement is deleted in its entirety and
the following is hereby substituted therefor:
"6C(2) Debt. Create, incur, assume or suffer to exist any Debt
except:
(i) Debt represented by the Notes,
(ii) Debt of any Subsidiary to the Company or another Subsidiary,
and
(iii) additional Debt of the Company (other than to a Subsidiary)
and of Subsidiaries,
Xxxxx Corporation
June 16, 2000
Page 4
provided that (a) Consolidated Debt shall at no time (except as stated in
the next sentence) exceed an amount equal to 60% of Total Capitalization
and (b) Priority Debt shall at no time exceed the lesser of (1) 25% of
Consolidated Net Worth and (2) 10% of Consolidated Net Worth plus Debt
described in clause (iv) of paragraph 6C(1). In the event that the Company
incurs Debt in connection with an acquisition which causes Consolidated
Debt to exceed 60% of Total Capitalization, then no Default or Event of
Default shall exist under this Agreement for the 120 day period following
such acquisition if and only if (x) the ratio of Consolidated Debt to
EBITDA (determined as of the end of each fiscal quarter for the rolling
four quarter period then ending) does not exceed 2.50 to 1.00 at any time
during such 120 day period and (y) Consolidated Debt does not exceed 65% of
Total Capitalization at any time during such 120 day period."
1.7 Paragraph 10B of the Agreement is amended to delete in their
entirety the defined terms "Consolidated Tangible Net Worth" and "Tangible
Capitalization" appearing therein and to add to such paragraph 10B of the
Agreement the following defined terms in appropriate alphabetical order:
"Consolidated Debt" shall mean, without duplication, Current Debt
and Funded Debt of the Company and its Subsidiaries determined in
accordance with generally accepted accounting principles consistently
applied.
"Consolidated Net Income" shall mean, with respect to any period,
consolidated net income of the Company and its Subsidiaries for such
period determined in accordance with generally accepted accounting
principles consistently applied.
"Consolidated Net Worth" shall mean, as of any time of
determination thereof, the excess of (i) the sum of (a) the par value
(or value stated on the books of the Company) of the outstanding
capital stock of all classes of the Company, plus (or minus in the
case of a surplus deficit) (b) the amount of the consolidated surplus,
whether capital or earned, of the Company and its Subsidiaries, over
(ii) the sum of treasury stock, minority interests and any other
contra-equity accounts other than Intangible Assets.
"Consolidated Tangible Net Worth" shall mean, as of any time of
determination thereof, Consolidated Net Worth minus, to the extent
included therein, Intangible Assets.
Xxxxx Corporation
June 16, 2000
Page 5
"EBITDA" shall mean, with respect to any period, Consolidated Net
Income for such period, plus, to the extent deducted in determining
Consolidated Net Income for such period, without duplication, (i)
interest expense, (ii) depreciation expense, (iii) amortization
expense, and (iv) income tax expense; provided that, in the event the
Company or any Subsidiary shall acquire greater than 50% of the Voting
Stock of a Person which was not previously a Subsidiary or owned by
the Company (a "Non-Affiliate"), or acquire all or substantially all
of the assets of a Non-Affiliate, in either case, through a single
transaction or a series of related transactions, then the historical
financial results of such Non-Affiliate (without any adjustment for
cost savings or other synergies) shall be included in the calculation
of EBITDA for such period as through such acquisition had been
consummated immediately prior to the beginning of such period.
"Intangible Assets" shall mean, as of any time of determination
thereof, the intangible assets of the Company and its Subsidiaries
determined on a consolidated basis, including, without limitation,
goodwill, trademarks, trade names, patents, deferred charges and any
write-up of the value of any assets after January 1, 1994.
"Tangible Capitalization" shall mean, as of any time of
determination thereof, the sum of Consolidated Debt and Consolidated
Tangible Net Worth.
"Total Capitalization" shall mean, as of any time of
determination thereof, the sum of Consolidated Debt plus Consolidated
Net Worth.
1.8 Notwithstanding anything to the contrary in the Agreement and
solely for purposes of determining the Yield-Maintenance Amount for the
Series D Notes and any later Series of Private Shelf Notes issued after the
date hereof, the phrase "0.50% over" shall be deemed inserted into the
definition of "Reinvestment Yield" which appears in paragraph 10A of the
Agreement immediately after the phrase "the yield to maturity implied by
(i)" and before the immediately following phrase "the yields reported, as
of 10:00 A.M.".
1.9 The Information Schedule attached to the Agreement is hereby
deleted in its entirety and the Information Schedule attached to this
letter is hereby substituted therefor.
Xxxxx Corporation
June 16, 2000
Page 6
SECTION 2. Representation and Warranty. The Company hereby represents and
warrants that no Default or Event of Default exists under the Agreement as of
the date hereof after giving effect to this Amendment.
SECTION 3. Conditions Precedent. This letter shall be deemed effective as
of May 17, 2000 upon (i) the return on or before June 16, 2000 by the Company to
Prudential of a counterpart hereof duly executed by the Company and Prudential,
and (ii) the payment of a $75,000 non-refundable structuring fee to The
Prudential Insurance Company of America which is due in connection with the
issuance of the Series D Notes. Upon execution hereof by the Company, this
letter should be returned to: Prudential Capital Group, Xxx Xxxxxxxxxx Xxxxx,
Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000, Attention: Wiley X. Xxxxx.
SECTION 4. Reference to and Effect on Agreement. Upon the effective-ness of
this letter, each reference to the Agreement in any other document, instrument
or agreement shall mean and be a reference to the Agreement as modified by this
letter. Except as specifically set forth in Section 1 hereof, the Agreement
shall remain in full force and effect and is hereby ratified and confirmed in
all respects.
SECTION 5. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
The remainder of this page is intentionally left blank.
Xxxxx Corporation
June 16, 2000
Page 7
SECTION 6. Counterparts; Section Titles. This letter 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 when taken together shall constitute but one and the same
instrument. The section titles contained in this letter are and shall be without
substance, meaning or content of any kind whatsoever and are not part of the
agreement between the parties hereto.
Very truly yours,
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By:
--------------------------------
Vice President
PRUCO LIFE INSURANCE COMPANY
By:
--------------------------------
Vice President
U.S. PRIVATE PLACEMENT FUND
By: Prudential Private Placement
Investors, L.P., Investment Advisor
By: Prudential Private Placement
Investors, Inc., its General Partner
By:
--------------------------------
Vice President
Agreed and accepted:
XXXXX CORPORATION
By:________________________
Title:_____________________
