WAIVER AND FIRST AMENDMENT dated as of February 20, 2001 (this
"Amendment"), among XXXXXXXX FINANCIAL INC., a Delaware
corporation ("Xxxxxxxx" or a "Borrower"), JANUS CAPITAL
CORPORATION, a Colorado corporation ("Janus" or a "Borrower," and
together with Xxxxxxxx, the "Borrowers"), the lenders party
hereto (the "Lenders"), CITIBANK, N.A., as Administrative Agent
for the Lenders (in such capacity, the "Agent") and as Swingline
Lender.
A. Reference is made to the Credit Agreement dated as of December 7, 2000
(as amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among the Borrowers, the Lenders party thereto, Xxxxx Fargo Bank
West, N.A., as Documentation Agent for the Lenders, The Chase Manhattan Bank, as
Syndication Agent for the Lenders and the Agent. Capitalized terms used but not
otherwise defined herein have the meanings assigned to them in the Credit
Agreement.
X. Xxxxxxxx has requested the Lenders to waive compliance with Section 6.01
of the Credit Agreement in order to permit Xxxxxxxx to issue up to $690 million
of Liquid Yield Option Notes due 2031 (the "XXXXx") for the purpose of funding
the purchase of certain shares of Janus' common stock.
C. In consideration for the Lenders' agreement to such waiver, and as a
condition thereto, the Borrowers are willing to amend certain provisions of the
Credit Agreement as set forth herein.
D. The Lenders are willing to agree to Xxxxxxxx'x request for such waiver
on the terms and subject to the conditions of this Amendment.
Accordingly, in consideration of the mutual agreements herein contained and
other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Amendments to Article I of the Credit Agreement. Article I of
the Credit Agreement is hereby amended by:
(a) adding in the proper alphabetical order the following new
definitions:
"'Liquid Assets' shall mean cash, cash equivalents and other readily
marketable securities, the value of which shall be deemed to be the amount
of cash which would be realized upon prompt liquidation of such securities
as reasonably determined by Xxxxxxxx.
`XXXXx' shall mean those certain Liquid Yield Option Notes due 2031 to
be issued by Xxxxxxxx under the Indenture dated February 2001."
(b) deleting the period after the definition of "Change of Control"
and adding the following new clause:
"or (iii) a "change of control" in the indenture under which the XXXXx
are issued shall occur."
SECTION 2. Amendment to Article V of the Credit Agreement. Article V of the
Credit Agreement is hereby amended by adding the following new Section 5.08:
"SECTION 5.08. Unencumbered Liquidity. Xxxxxxxx and its Consolidated
Subsidiaries shall at all times maintain Liquid Assets having an aggregate
fair market value greater than or equal to the sum of the issue price plus
all accrued original issue discount at such time of all outstanding XXXXx."
SECTION 3. Amendment to Exhibit D to the Credit Agreement Exhibit D to the
Credit Agreement is hereby amended by adding to the certification in paragraph 3
thereof after the word "including" a reference to "Section 5.08".
SECTION 4. Correction to Schedule 3.07 to the Credit Agreement. Schedule
3.07 to the Credit Agreement is hereby corrected to indicate that the direct
owner of DST Systems, Inc. is Xxxxxxxx Management, Inc., a wholly-owned
subsidiary of Xxxxxxxx. Upon the effectiveness of this Amendment, the parties
agree that such correction shall be effective as of the date of the Credit
Agreement and no breach of any representation or warranty under the Credit
Agreement shall be deemed to have occurred as a result of the inadvertent
misidentification of the direct owner of DST Systems, Inc. on Schedule 3.07
prior to the date hereof.
SECTION 5. Waiver. Subject to and upon the effectiveness of this Amendment,
the Lenders hereby waive Xxxxxxxx'x compliance with Section 6.01 of the Credit
Agreement solely in order to permit Xxxxxxxx to issue XXXXx with an aggregate
gross issue price of up to $690 million and as accretion of original issue
discount to principal at a rate to be determined at the time of pricing,
provided that the XXXXx are issued by Xxxxxxxx on the other terms and conditions
set forth on Exhibit A to this Amendment and that prior to such issuance and
after giving effect thereto (after taking this Waiver into account), no Default
or Event of Default shall exist.
SECTION 6. Representations, Warranties and Agreements. Each Borrower hereby
represents and warrants to and agrees with each Lender and the Agent that:
(a) The representations and warranties of each Borrower set forth in
Article III of the Credit Agreement are true and correct in all material
respects with the same effect as if made on the Amendment Effective Date
(as defined below), except to the extent such representations and
warranties expressly relate to an earlier date.
(b) Such Borrower has the requisite power and authority to execute,
deliver and perform its obligations under this Amendment and to perform its
obligations under the Credit Agreement as amended by this Amendment.
(c) The execution, delivery and performance by each Borrower of this
Amendment and the performance by each Borrower of the Credit Agreement, as
amended by this Amendment, (i) have been duly authorized by all requisite
action and (ii) will not (A) violate (x) any provision of law, statute,
rule or regulation, or of the certificate or articles of incorporation or
other constitutive documents or by-laws of either
Borrower, (y) any order of any Governmental Authority or (z) any provision
of any indenture, agreement or other instrument to which either Borrower is
a party or by which either of them or any of their property is or may be
bound, (B) be in conflict with, result in a breach of or constitute (alone
or with notice or lapse of time or both) a default under any such
indenture, agreement for borrowed money or other agreement or instrument or
(C) result in the creation or imposition of any Lien upon or with respect
to any property or assets now owned or hereafter acquired either Borrower.
(d) This Amendment has been duly executed and delivered by each
Borrower. Each of this Amendment and the Credit Agreement, as amended by
this Amendment, constitutes a legal, valid and binding obligation of each
Borrower, enforceable against each Borrower in accordance with its terms,
except as enforceability may be limited by (i) any applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and (ii) general principals of
equity,
(e) As of the Amendment Effective Date, no Event of Default or Default
has occurred and is continuing.
SECTION 7. Conditions to Effectiveness. This Amendment shall become
effective on the date of the satisfaction in full of the
following conditions precedent (the "Amendment Effective Date"):
(a) The Agent shall have received duly executed counterparts hereof
which, when taken together, bear the authorized signatures of each
Borrower, the Agent and the Required Lenders.
(b) All legal matters incident to this Amendment shall be satisfactory
to the Required Lenders, the Agent and Cravath, Swaine & Xxxxx, counsel for
the Agent.
(c) The Agent shall have received such other documents, instruments
and certificates as it or its counsel shall reasonably request.
SECTION 8. Credit Agreement. Except as specifically stated herein, the
Credit Agreement shall continue in full force and effect in accordance with the
provisions thereof. As used therein, the terms "Agreement," "herein,"
"hereunder," "hereto," "hereof" and words of similar import shall, unless the
context otherwise requires, refer to the Credit Agreement as modified hereby.
The execution, delivery and effectiveness of this Amendment shall not operate as
a waiver of any right, power or remedy of the Agent or any Lender under the
Credit Agreement nor constitute a waiver of any provision of the Credit
Agreement except as specifically set forth in Section 5 hereof and relates only
to the specific transaction described therein.
SECTION 9. Applicable Law. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 10. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be an original but all of which, when taken
together, shall
constitute but one instrument. Delivery of an executed counterpart of a
signature page of this Amendment by facsimile shall be effective as delivery of
a manually executed counterpart of this Amendment.
SECTION 11. Expenses. Xxxxxxxx agrees to reimburse the Agent for its
out-of-pocket expenses in connection with this Amendment, including the
reasonable fees, charges and disbursements of Cravath, Swaine & Xxxxx, counsel
for the Agent.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed by their respective authorized officers as of the date first above
written.
XXXXXXXX FINANCIAL INC.,
by: /s/ Xxxxxxx X. XxXxxxxx
-------------------------------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Vice President
JANUS CAPITAL CORPORATION,
by: /s/ Xxxxxx X. Early
--------------------------------------------------
Name: Xxxxxx X. Early
Title: Vice President and General Counsel
CITIBANK, N.A., individually and as Administrative
Agent and as Swingline Lender,
by: /s/ Xxxxxxx Xxxxxxxx
--------------------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
XXXXX FARGO BANK WEST, N.A., individually
and as Documentation Agent,
by: /s/ Xxxx X. Xxxxxxx
-------------------------------------------------
Name: Xxxx X. Xxxxxxx /s/
Title: Vice President
THE CHASE MANHATTAN BANK, individually
and as Syndication Agent,
by: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
BANK OF AMERICA, N.A.,
by:
--------------------------------------------------
Name:
Title:
THE GOVERNOR AND COMPANY OF THE
BANK OF IRELAND,
by: /s/ Xxxxxxx X. Xxxxx
--------------------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Authorised signatory
by: /s/ Xxxxxx Xxxxxx
--------------------------------------------------
Name: Xxxxxx Xxxxxx
Title: Authorised signatory
BANK OF NEW YORK,
by: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
CREDIT SUISSE FIRST BOSTON,
by:
--------------------------------------------------
Name:
Title:
by:
--------------------------------------------------
Name:
Title:
FIRSTAR BANK N.A.,
by: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
FLEET NATIONAL BANK,
by:
-------------------------------------------------
Name:
Title:
HSBC,
by:
-------------------------------------------------
Name:
Title:
THE ROYAL BANK OF SCOTLAND plc,
by: /s/ Xxxxx XxXxxx
-------------------------------------------------
Name: Xxxxx XxXxxx
Title: Senior Vice President
STATE STREET BANK AND TRUST COMPANY,
by: /s/ Xxxx X. Xxxxxxxx
-------------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
UMB, N.A.,
by: /s/ Xxxxx Xxxxxx
-------------------------------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
--------------------------------------------------------------------------------
EXHIBIT A
The Offering
XXXXx...............
$ aggregate principal amount --------- at maturity
($ aggregate principal amount --------- at maturity if
Xxxxxxx Xxxxx exercises its over-allotment option in full)
of XXXXx due February , 2031. We will not pay interest on
the XXXXx prior to maturity unless contingent interest
becomes payable. Each LYON will be issued at a price of
$------ per LYON and a principal amount of $1,000.
Maturity of XXXXx...
February ___, 2031.
Yield to Maturity
of XXXXx...........
% per year, computed on a semiannual --- bond equivalent
basis, calculated from February , 2001, excluding any --
contingent interest.
Conversion Rights...
For each LYON surrendered for conversion, a holder will
receive shares of common stock. The conversion rate will be
adjusted for certain reasons specified in the indenture, but
will not be adjusted for accrued original issue discount.
Upon conversion, a holder will not receive any cash payment
representing accrued original issue discount. Instead,
accrued original issue discount will be deemed paid by the
shares of common stock received by the holder on conversion.
Holders may surrender XXXXx for conversion into shares of
common stock in any calendar quarter commencing after March
31, 2001, if, as of the last day of the preceding calendar
quarter, the closing sale price of our common stock for at
least 20 trading days in a period of 30 consecutive trading
days ending on the last trading day of such preceding
calendar quarter is more than a specified percentage,
beginning at 135% and declining 0.2083% per quarter
thereafter, of the accreted conversion price per share of
common stock on the last trading day of such preceding
calendar quarter. The accreted conversion price per share as
of any day will equal the issue price of a LYON plus the
accrued original issue discount to that day, divided by the
number of shares of common stock issuable upon a conversion
of a LYON on that day.
On the date the XXXXx are originally issued, the XXXXx will
not have a credit rating assigned to them. After the date on
which either Xxxxx'x or Standard & Poor's assigns an initial
credit rating to the XXXXx, holders may also surrender a
LYON for conversion during any period in which the credit
rating assigned to the XXXXx by either Xxxxx'x or Standard &
Poor's is more than three rating subcategories below the
initial credit rating assigned to
the XXXXx.
XXXXx or portions of XXXXx in integral multiples of $1,000
principal amount at maturity that have been called for
redemption may be surrendered for conversion until the close
of business on the second business day prior to the
redemption date. In addition, if we make a significant
distribution to our stockholders or if we are a party to
certain consolidations, mergers or binding share exchanges,
XXXXx may be surrendered for conversion. The ability to
surrender XXXXx for conversion for any reason will expire at
the close of business on February ---- , 2031.
Ranking.............
The XXXXx will be unsecured and unsubordinated obligations
and will rank equal in right of payment to all our existing
and future unsecured and unsubordinated indebtedness.
However, the XXXXx will be effectively subordinated to all
existing and future obligations of our subsidiaries,
including Janus.
Original Issue
Discount...........
We are offering our XXXXx at an issue price significantly
below the principal amount at maturity of the XXXXx. This
original issue discount will accrue daily at a rate of ---%
per year beginning on the date of issuance of such LYON,
calculated on a semi-annual bond equivalent basis, using a
360-day year comprised of twelve 30-day months. The accrual
of imputed interest income on the XXXXx, as calculated for
United States federal income tax purposes, also referred
herein to as tax original issue discount, is expected to
exceed the accrued original issue discount.
Contingent
Interest...........
We will pay contingent interest to the holders of XXXXx
during any six-month period from February --- to August ---
, 2006, if the average market price of a LYON for the five
trading days ending on the second trading day immediately
preceding the relevant six-month period equals 120% or more
of the sum of the issue price and accrued original issue
discount for such LYON to the day immediately preceding the
relevant six-month period.
The amount of contingent interest payable per LYON in
respect of any quarterly period within a six-month period in
which contingent interest is payable will equal the greater
of (a) the amount of regular cash dividends paid by us per
share on our common stock during that quarterly period
multiplied by the number of shares of common stock issuable
upon conversion of a LYON or (b) 0.0625% of such average
market price of a LYON for the five trading day period
referred to above, except that if we have declare a dividend
for which the record date falls prior to the first day of a
six-month period but the payment date falls within such six-
month period, then the five trading day period for
determining the average market price of a LYON to calculate
the amount of contingent interest will be the five trading
days ending on the second trading day immediately preceding
such record date.
Contingent interest, if any, will accrue and be payable to
holders of XXXXx as of the record date for the related
common stock dividend or, if no cash dividend is paid by us
during a quarter within the relevant six-month period, to
holders of XXXXx as of the fifteenth day preceding the last
day of the relevant six-month period. Such payments will be
paid on the payment date of the related common stock
dividend or, if no cash dividend is paid by us during a
quarter within the relevant six-month period, on the last
day of the relevant six-month period. The original issue
discount will continue to accrue at the yield to maturity
whether or not contingent interest is paid.
Contingent
Rating.............
After the issuance of the XXXXx, we will endeavor to obtain
the Required Credit Rating for the XXXXx from Xxxxx'x or
Standard & Poor's. The Required Credit Rating means a rating
that is equal to or higher than Baa2 by Xxxxx'x or BBB by
Standard & Poor's. If we fail to obtain such a rating within
150 days after the issuance of the XXXXx, then we will pay
interest in cash to the holders of the XXXXx at the rate of
0.50% of the original issue price of the XXXXx per annum,
payable semiannually on the last day of each six-month
period, commencing with the six month period ending August
--, 2001. Such interest, if any, will be payable to the
holders of XXXXx as of the fifteenth day preceding the last
day of the relevant six-month period.
Tax Original Issue
Discount...........
The XXXXx will be debt instruments subject to the contingent
payment debt regulations. Imputed interest, also referred to
herein as tax original issue discount, will accrue at a rate
currently estimated at 7.61% per year, computed on a
semiannual bond equivalent basis, which represents the
assumed yield on our noncontingent, nonconvertible,
fixed-rate debt with terms otherwise similar to the XXXXx.
The rate at which the tax original issue discount will
accrue for United States federal income tax purposes will
exceed the stated yield of ---% for the accrued original
issue discount.
Sinking Fund........
None.
Redemption of XXXXx
at the Option of
Xxxxxxxx...........
We may redeem all or a portion of the XXXXx for cash at any
time on or after February __, 2006, at the redemption prices
set forth in the Indenture.
Purchase of XXXXx
by Xxxxxxxx at
the Option of the
Holder.............
Holders may require us to purchase all or a portion of their
XXXXx:
on February --,. 2002 at a price of $--- per LYON;
on February --,. 2004 at a price of $--- per LYON;
on February --,. 2006 at a price of $--- per LYON;
on February --,. 2011 at a price of $--- per LYON;
on February --,. 2016 at a price of $--- per LYON;
on February --,. 2021 at a price of $--- per LYON;
on February --,. 2026 at a price of $--- per LYON;
We may choose to pay the purchase price in cash, shares of
common stock or a combination of cash and shares of common
stock.
Change in Control...
Upon a change in control of Xxxxxxxx occurring on or before
February --, 2006, each holder may require us to purchase
all or a portion of such holder's XXXXx for cash at a price
equal to the issue price of such XXXXx plus accrued original
issue discount to the date of purchase. Under the Indenture,
a "change in control" of Xxxxxxxx is deemed to have occurred
at such time as:
o any person, including its affiliates and associates,
other than us, our subsidiaries or our or their
employee benefit plans, files a Schedule 13D or
Schedule TO (or any successor schedule, form or report
under the Exchange Act) disclosing that such person has
become the beneficial owner of 50% or more of the
voting power of Xxxxxxxx'x common stock is reclassified
or changed, with certain exceptions; or
o there shall be consummated any share exchange,
consolidation or merger of Xxxxxxxx pursuant to which
Xxxxxxxx'x common stock would be converted into cash,
securities or other property, in each case other than a
share exchange, consolidation or merger of Xxxxxxxx in
which the holders of our common stock immediately prior
to the share exchange, consolidation or merger have,
directly or indirectly, continue to hold at least a
majority of the total voting power in the aggregate of
all classes of capital stock of the continuing or
surviving corporation immediately after the share
exchange, consolidation or merger.
Optional Conversion
to Semiannual Coupon
Notes Upon Tax
Event..............
From and after the occurrence of a Tax Event, as described
in Indenture, at the option of Xxxxxxxx, interest instead of
future original issue discount shall accrue on each LYON
from the option exercise date at -----% per year on the
restated principal amount and shall be payable semiannually
on each interest payment date to holders of record at the
close of business on cash regular record date immediately
preceding such interest payment date. Interest will be
computed on the basis of a 360-day year comprised of twelve
30-day months and will accrue from the most recent date to
which interest has been paid or, if no interest has been
paid, the option exercise date. In such event, the
redemption price, purchase price and change in control
purchase price shall be adjusted, and
no future contingent interest will be paid on the XXXXX
other than interest payable as a result of a failure to
obtain the Required Credit Rating for the XXXXx or to timely
file or make effective a shelf registration statement.
However, there will be no changes in the holder's conversion
rights.
Events of Default...
If there is an event of default on the XXXXx, the issue
price of the XXXXx plus the accrued original issue discount
may be declared immediately due and payable. These amounts
automatically become due and payable in the case of our
bankruptcy or insolvency. Events of Default include
non-payment, failure to comply with agreements under the
Indenture for 60 days after notice, the non-payment or
acceleration of other indebtedness in excess of $10,000,000,
or bankruptcy, insolvency or similar proceedings are
commenced by or against us.
Use of Proceeds.....
The net proceeds of this offering will be used to purchase a
total of ------ shares of Janus common stock, of which
600,000 shares are being sold by Xxxxxx X. Xxxxxx to us
pursuant to his put rights under the Janus Stock Purchase
Agreement and the remaining shares are being sold by certain
other minority stockholders of Janus pursuant to their put
rights under their respective stock purchase agreements. The
total purchase price for these ----- shares of Janus common
stock will be approximately $------- million. After the
purchase of these shares, we may use any remaining net
proceeds of this offering for general corporate purposes,
including acquisitions.
DTC Eligibility.....
The XXXXx will be issued in book-entry form and will be
represented by one or more permanent global certificates
deposited with a custodian for and registered in the name of
a nominee of DTC in New York, New York. Beneficial interests
in any such securities will be shown on, and transfers will
be effected only through, records maintained by DTC and its
direct and indirect participants and any such interest may
not be exchanged for certificated securities, except in
limited circumstances.
Transfer
Restrictions.......
The XXXXx and the common stock issuable upon conversion of
the XXXXx have not been registered under the Securities Act
or any state securities law. Unless they are registered, the
XXXXx and such common stock may not be offered or sold
except pursuant to an exemption from or in transaction not
subject to the registration requirements of the Securities
Act and applicable state laws.
Registration
Rights.............
We will, for the benefit of holders, file with the SEC as
soon as practicable, but in any event within 90 days after
the date of the original issuance of the XXXXx, a shelf
registration statement covering resales of the XXXXx and the
shares of common stock issuable upon conversion of the
XXXXx. We will use reasonable efforts to cause the shelf
registration statement to become effective as promptly as
practicable after filing, but in any event within 210
days after the date of original issuance of the XXXXx, and
keep such shelf registration statement effective until the
earlier of (i) the sale pursuant to the shelf registration
statement of all the XXXXx and the shares of common stock
issuable upon conversion of the XXXXx and (ii) the
expiration of the holding period applicable to such
securities held b y our non-affiliates under Rule 144(k) of
the Securities Act, or any successor provision, subject to
certain permitted exceptions.
Trading.............
The XXXXx will not be listed on any securities exchange or
included in any automated quotation system.
