ACKNOWLEDGMENT OF AMENDMENT TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENT
Exhibit 10.159a
Execution Version
Execution Version
ACKNOWLEDGMENT OF AMENDMENT TO NOTE PURCHASE AND
PRIVATE SHELF AGREEMENT
PRIVATE SHELF AGREEMENT
This ACKNOWLEDGMENT OF AMENDMENT TO NOTE PURCHASE AND PRIVATE SHELF AGREEMENT (this
“Acknowledgment”) is dated as of September 30, 2010, by and among XXXXXXX & CO., a Delaware
corporation (the “Company”), and each of the holders of Notes (as defined below) on the signature
pages hereto (collectively, the “Noteholders”). Capitalized terms used herein which are not
otherwise defined herein shall have the meanings assigned to such terms in the Note Agreement (as
defined below).
RECITALS
WHEREAS, the Company and the Noteholders are parties to that certain Note Purchase and Private
Shelf Agreement, dated as of April 9, 2009 (as in effect prior to July 31, 2009, herein referred to
as the “Existing Note Agreement” and as from time to time amended, restated, supplemented or
otherwise modified, the “Note Agreement”), pursuant to which the Company authorized the issuance of
its (i) 10.0% Series A Senior Notes due April 9, 2018 in the aggregate principal amount of Fifty
Million Dollars ($50,000,000) (the “Series A
Notes”) and (ii) additional senior promissory notes in
the aggregate principal amount of One Hundred Million Dollars ($100,000,000) (the “Shelf Notes” and
together with the Series A Notes, collectively, and as may be amended or restated from time to
time, the “Notes”).
WHEREAS, the Company entered into a successor credit agreement, by and among the Company,
Xxxxxxx and Company, Xxxxxxx & Co. International, Xxxxxxx & Co. Japan Inc., the other subsidiary
borrowers parties thereto and The Bank of New York Mellon, as administrative agent, dated July 31,
2009 (the “Credit Agreement”), which contains certain revisions to affirmative and negative
covenants, defaults and events of default, some of which may constitute Credit Agreement
Modifications as defined in the Existing Note Agreement; and
WHEREAS, the Company and the Noteholders desire to acknowledge and confirm an amendment to the
Existing Note Agreement, as set forth herein, due to the existence of the Credit Agreement
Modifications caused by the execution and delivery of the Credit Agreement.
NOW THEREFORE, in consideration of the mutual execution hereof and other good and valuable
consideration, the parties hereto agree as follows:
SECTION 1. Amendments To Existing Note Agreement. The parties hereto acknowledge and
confirm that the Existing Note Agreement, pursuant to the second sentence of Section 10.7(a)
thereof, was deemed to have been amended on July 31, 2009 (the “Amendment”), as a result of the
Credit Agreement Modifications dated as of such date, as follows:
(a) Until a Credit Agreement Modification shall have occurred in respect of such term, the
following new term shall be added to Schedule B of this Agreement in proper alphabetical order:
“Consolidated Adjusted Net Worth” means, as of any date, (a) total stockholders’ equity of the
Company and its Subsidiaries on a Consolidated basis on such date as determined in accordance with
GAAP, plus (if negative) and minus (if positive) (b) accumulated other
comprehensive loss (gain), net of tax, plus (c) the cumulative amount for the period
commencing on February 1, 2009 and ending on such date (or, if such date is not a fiscal quarter
end date, the immediately preceding fiscal quarter end date) of non-recurring non-cash charges and
expenses added back to Adjusted EBIT, net of taxes (other than 2008 Restructuring Charges),
minus (d) the difference (if positive) between non-cash gains and non-cash losses for the
period commencing on February 1, 2009 and ending on such date (or, if such date is not a fiscal
quarter end date, the immediately preceding fiscal quarter end date).
(b) Until a Credit Agreement Modification shall have occurred in respect of such term, the
following new term shall be added to Schedule B of this Agreement in proper alphabetical order:
“Adjusted EBIT” means, for any four fiscal quarter period of the Company (the “calculation
period”), (a) the net earnings of the Company and its Subsidiaries on a Consolidated basis for such
calculation period as determined in accordance with GAAP, plus (b) to the extent deducted in the
calculation of such net earnings for such calculation period, the sum, without duplication, of the
following: (i) Interest Expense and financing costs, (ii) provision for income taxes, (iii)
commencing with the calculation period that includes the fiscal quarter of the Company ending
January 31, 2010, non-recurring non-cash charges and expenses in an aggregate amount not exceeding
$100,000,000 (provided that, in determining the amount of non-recurring non-cash charges and
expenses for any fiscal year, the amount thereof for such fiscal year shall be limited to an amount
not exceeding $100,000,000), and (iv) if such calculation period includes the fiscal quarter of the
Company ending January 31, 2009, the 2008 Restructuring Charges, minus (c) to the extent included
in the calculation of such net earnings for such calculation period, non-recurring non-cash gains.
(c) Until a Credit Agreement Modification shall have occurred in respect thereof, the
following definition shall be substituted for the definition of “Priority Debt” in Schedule B of
this Agreement:
“Priority Debt” means, at any time, without duplication, the sum of
(a) all then outstanding Debt of the Company or any Guarantor secured by any Lien on any
property of the Company or any Subsidiary, other than any such Debt secured by Liens permitted by
any one or more of clauses (a) through (f), (h) or (i), inclusive, of Section 10.4, plus
(b) all then outstanding Debt of Subsidiaries (other than Debt of any Guarantor or
Consignment/Leasing Indebtedness up to an aggregate outstanding amount for the Company and the
Subsidiaries on a Consolidated basis not exceeding at any time $10,000,000);
provided that Priority Debt shall not include (x) demand Debt of any Subsidiary owing solely
to the Company or another Subsidiary, (y) Debt of any Subsidiary under any Guaranty by a Subsidiary
which is a party to the Guaranty Agreement of the Debt of the
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Company or any other Subsidiary or (z) Debt of any Subsidiary under any of the agreements
listed in Schedule 10.3.
(d) Until a Credit Agreement Modification shall have occurred in respect of such term, the
following new term shall be added to Schedule B of this Agreement in proper alphabetical order::
“Adjusted Debt” means, as of any date, the sum of (i) all Adjusted Indebtedness of the Company
and its Subsidiaries on a Consolidated basis on such date and (ii) (x) Rent Expense for the four
consecutive fiscal quarter period ended immediately prior to such date or then ending in respect of
which financial statements have been delivered pursuant to Section 7.1(a) or 7.1(b) multiplied by
six (6).
(e) Until a Credit Agreement Modification shall have occurred in respect of such term, the
following new term shall be added to Schedule B of this Agreement in proper alphabetical order:
“Adjusted Indebtedness” means, as to any Person, at a particular time, all items of such
Person which constitute, without duplication, (a) indebtedness for borrowed money or the deferred
purchase price of Property (other than trade payables and accrued expenses incurred in the ordinary
course of business), (b) indebtedness evidenced by notes, bonds, debentures or similar instruments,
(c) obligations with respect to any conditional sale or other title retention agreement, (d)
indebtedness arising under acceptance facilities and the amount available to be drawn under all
letters of credit issued for the account of such Person and, without duplication, all drafts drawn
thereunder to the extent such Person shall not have reimbursed the issuer in respect of the
issuer’s payment of such drafts, (e) liabilities secured by any Lien on any Property owned by such
Person even though such Person shall not have assumed or otherwise become liable for the payment
thereof (other than carriers’, warehousemen’s, mechanics’, repairmen’s or other like nonconsensual
Liens arising in the ordinary course of business), (f) that portion of any obligation of such
Person, as lessee, which in accordance with GAAP is required to be capitalized on the balance sheet
of such Person, and (g) Guaranties of such Person of Adjusted Indebtedness of others.
(f) Until a Credit Agreement Modification shall have occurred in respect of such term, the
following new term shall be added to Schedule B of this Agreement in proper alphabetical order:
“Leverage Ratio” means, as of any date, the ratio of (i) Adjusted Debt on such date to (ii)
EBITDAR for the four consecutive fiscal quarter period ended immediately prior to such date or then
ending in respect of which financial statements have been delivered pursuant to Section 7.1(a) or
7.1(b).
(g) Until a Credit Agreement Modification shall have occurred in respect of such term, the
following new term shall be added to Schedule B of this Agreement in proper alphabetical order:
“Consignment/Leasing Indebtedness” means Indebtedness incurred in the ordinary course of
business of the Company or any Subsidiary to any Person resulting from the
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supplying by such Person to the Company or such Subsidiary with precious metals, precious gems
or jewelry on a consignment or leased basis, which Indebtedness, if secured, is secured by a Lien
only on such property.
(h) Until a Credit Agreement Modification shall have occurred in respect of such term, the
following new term shall be added to Schedule B of this Agreement in proper alphabetical order:
“EBITDAR” means, for any four fiscal quarter period of the Company (the “calculation period”),
(a) the net earnings of the Company and its Subsidiaries on a Consolidated basis for such
calculation period as determined in accordance with GAAP, plus (b) to the extent deducted in the
calculation of such net earnings for such calculation period, the sum, without duplication, of the
following: (i) Interest Expense and financing costs, (ii) provision for income taxes, (iii)
depreciation, (iv) amortization, (v) Rent Expense, (vi) commencing with the calculation period that
includes the fiscal quarter of the Company ending January 31, 2010, non-recurring non-cash charges
and expenses in an aggregate amount not exceeding $100,000,000 (provided that, in determining the
amount of nonrecurring non-cash charges and expenses for any fiscal year, the amount thereof for
such fiscal year shall be limited to an amount not exceeding $100,000,000), and (vii) if such
calculation period includes the fiscal quarter of the Company ending January 31, 2009, the 2008
Restructuring Charges, minus (c) to the extent included in the calculation of such net earnings for
such calculation period, non-recurring non-cash gains.
(i) Until a Credit Agreement Modification shall have occurred in respect of such term, the
following new term shall be added to Schedule B of this Agreement in proper alphabetical order:
“Adjusted Fixed Charge Coverage Ratio” means, as of any date, the ratio of (a)(i) Adjusted
EBIT for the four consecutive fiscal quarter period ended immediately prior to such date or then
ending in respect of which financial statements have been delivered pursuant to Section 7.1(a) or
7.1(b) plus (ii) Rent Expense for such period to (b)(i) Rent Expense for such period
plus (ii) Interest Expense for such period.
(j) Until a Credit Agreement Modification shall have occurred in respect thereof, the
following new Section 9.7 shall be added to this Agreement in the appropriate numerical order:
9.7 Leverage Ratio.
At all times the Company will maintain a Leverage Ratio of not greater than:
| Period | Leverage Ratio | |||
From and including July 31, 2009, to, but excluding,
January 31, 2011 |
3.25:1.00 | |||
From and including January 31, 2011, and all times
thereafter |
3.00:1.00 | |||
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(k) Until a Credit Agreement Modification shall have occurred in respect thereof, the
following new Section 9.8 shall be added to this Agreement in the appropriate numerical order:
9.8 Consolidated Adjusted Net Worth.
At all times the Company will maintain a Consolidated Adjusted Net Worth of not less than:
| Consolidated Adjusted | ||||
| Period | Net Worth | |||
From and including July 31, 2009, to, but excluding,
January 31, 2011 |
$ | 1,400,000,000 | ||
From and including January 31, 2011, and all times
thereafter |
$ | 1,500,000,000 | ||
(l) Until a Credit Agreement Modification shall have occurred in respect thereof, the
following new Section 9.9 shall be added to this Agreement in the appropriate numerical order:
9.9 Adjusted Fixed Charge Coverage Ratio.
At all times the Company will maintain an Adjusted Fixed Charge Coverage Ratio of not less
than:
| Adjusted Fixed Charge | ||||
| Period | Coverage Ratio | |||
From and including July 31, 2009, to, but excluding,
January 31, 2011 |
2.00 : 1.00 | |||
From and including January 31, 2011, and all times
thereafter |
2.25 : 1.00 | |||
(m) Until a Credit Agreement Modification shall have occurred in respect thereof, the
following new Sections 10.4(i) and 10.4(j) shall be substituted for Section 10.4(i) of this
Agreement in the appropriate numerical order:
(i) Consignment/Leasing Indebtedness Liens — Liens securing precious metals, precious gems or
jewelry consigned or leased to the Company or any Subsidiary securing Consignment/Leasing
Indebtedness up to an aggregate outstanding amount for the Company and the Subsidiaries on a
Consolidated basis not exceeding at any time $10,000,000; and
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(j) Other Liens — Liens securing Adjusted Debt of any Subsidiary and not otherwise permitted
by clauses (a) through (i) inclusive, of this Section 10.4 (other than Liens securing Debt under the Credit Agreement), but only to the extent that the aggregate principal
amount of Debt outstanding secured by such Liens does not exceed 10% of Consolidated Adjusted Net
Worth; provided that (i) such Debt is permitted to be incurred under Section 10.3(b) and (ii) to
the extent such Liens secure Debt in an aggregate amount in excess of 5% of Consolidated Adjusted
Net Worth, the Liens securing the amount of such Debt in excess of 5% of Consolidated Adjusted Net
Worth (but not the Liens securing the Debt of 5% or less of Consolidated Adjusted Net Worth) shall
also equally and ratably secure the Notes.
(n) Until a Credit Agreement Modification shall have occurred in respect thereof, Section
11(f)(ii) of this Agreement is amended to delete “$25,000,000” and replace it with “$20,000,000.”
SECTION 2. Reference To And Effect Upon The Note Agreement.
(a) Except as specifically modified above, the Existing Note Agreement and the other Financing
Documents shall remain in full force and effect and are hereby ratified and confirmed.
(b) The execution, delivery and effectiveness of this Acknowledgment shall not, and the
execution, delivery and effectiveness of the Amendment did not, (i) operate as a waiver of any
right, power or remedy of any Noteholder under the Existing Note Agreement or any Financing
Document, nor constitute a waiver of any provision of the Existing Note Agreement or any Financing
Document, except as specifically set forth herein or therein or (ii) apply to any other Credit
Agreement Modifications as may from time to time be entered into and which may give rise to
Incorporated Covenants. Each reference in the Note Agreement to “this Agreement”, “hereunder”,
“hereof,” “herein” or words of similar import shall mean and be a reference to the Note Agreement
as amended by the Amendment.
SECTION 3. Costs And Expenses. The Company agrees to reimburse the Noteholders for all
reasonable fees, costs and expenses, including the fees, costs and expenses of their counsel or
other advisors for advice, assistance, or other representation in connection with this
Acknowledgment and the Amendment.
SECTION 4. Governing Law. THIS ACKNOWLEDGMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF NEW
YORK.
SECTION 5. Headings. Section headings in this Acknowledgment are included herein for
convenience of reference only and shall not constitute a part of this Acknowledgment for any other
purposes.
SECTION 6. Counterparts. This Acknowledgment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each such counterpart shall
be deemed to be an original, but all such counterparts shall together constitute but one and the
same Acknowledgment. Any party hereto may execute and deliver a counterpart of this Acknowledgment
by delivering by facsimile or other electronic transmission a signature page of this Acknowledgment
signed by such party, and any such facsimile or other electronically
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transmitted signature shall be
treated in all respects as having the same effect as an original signature. Any party delivering
by facsimile or other electronic transmission a counterpart executed by it shall promptly thereafter also deliver a manually signed counterpart of the
Acknowledgment.
SECTION 7. Reaffirmation of Guaranty. Each Guarantor hereby consents to the terms of this
Acknowledgment and the Amendment and agrees and acknowledges that its obligations under the
Guaranty Agreement shall remain in full force and effect after giving effect to this Acknowledgment
and the Amendment.
(signature pages follow)
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IN WITNESS WHEREOF, the parties hereto have executed this Acknowledgment of Amendment to Note
Purchase and Private Shelf Agreement as of the date first written above.
| COMPANY: XXXXXXX & CO. |
||||
| By: | /s/ Xxxxx X. Xxxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxxx | |||
| Title: | Executive Vice President
and Chief Financial Officer |
|||
[Signature page to Acknowledgment of Amendment to Note Purchase Agreement and Private Shelf Agreement.]
| NOTEHOLDERS: METROPOLITAN LIFE INSURANCE COMPANY GENERAL AMERICAN LIFE INSURANCE COMPANY by Metropolitan Life Insurance Company, its Investment Manager METLIFE REINSURANCE COMPANY OF VERMONT by Metropolitan Life Insurance Company, its Investment Manager |
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| By: | /s/ Xxxxxx X. Xxxxxxx | |||
| Name: | Xxxxxx X. Xxxxxxx | |||
| Title: | Managing Director | |||
[Signature page to Acknowledgment of Amendment to Note Purchase and Private Shelf Agreement.]
| The foregoing is hereby acknowledged and agreed to as of the date thereof: | ||||||
| GUARANTORS: | ||||||
| XXXXXXX AND COMPANY | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxx | |||||
| Title: | Senior Vice President, General Counsel and Secretary | |||||
| XXXXXXX & CO. INTERNATIONAL | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxx | |||||
| Title: | Vice President and Secretary | |||||
| XXXXXXX & CO. JAPAN INC. | ||||||
| By: | /s/ Xxxxxxx X. Xxxxxx | |||||
| Name: | Xxxxxxx X. Xxxxxx | |||||
| Title: | Vice President and Secretary | |||||
[Signature page to Acknowledgment of Amendment to Note Purchase and Private Shelf Agreement.]
