EXHIBIT 4.c.i.
EXHIBIT
[Execution Copy]
AMENDMENT NO. 2
October 8, 1997
The Prudential Insurance Company
of America
Pruco Life Insurance Company
c/o Prudential Capital Group
0000 Xxxx Xxxxxx, Xxxxx 0000X
Xxxxxx, Xxxxx 00000
Ladies and Gentlemen:
We refer to the Note Agreement dated as of October 24, 1995, as amended
by Amendment No. 1 dated January 17, 1997 (the "Agreement"), among the
undersigned, Xxxxx Group, Inc. (the "Company") and you. Unless otherwise
defined herein, the terms defined in the Agreement shall be used herein as
therein defined.
The Company plans to take a special charge against earnings and has
requested the holders of the Notes amend certain covenants in the Agreement.
The Company and the holders of the Notes have agreed to amend the Agreement.
Accordingly, it is hereby agreed as follows:
Section 1. Amendments to Agreement. The Agreement is, effective the date
first above written, hereby amended as follows:
Section 1.01. Xxxxxxxxx 0X. Consolidated Leverage Ratio. Paragraph 6A
is amended in full to read as follows:
"6A. Consolidated Leverage Ratio. The Company will not permit, at any
time, the Consolidated Leverage Ratio to be greater than:
From the Closing Date through August 2, 1997 .55 to 1.0
From August 3, 1997 through the last day of the second
fiscal quarter of 1998 .60 to 1.0
From the first day of the third fiscal quarter of 1998
through the last day of the first fiscal quarter of 1999 .575 to 1.0
From the first day of the second fiscal quarter of 1999
and thereafter .55 to 1.0"
Section 1.02. Paragraph 6C. Consolidated Tangible Net Worth.
Paragraph 6C is amended in full to read as follows:
"6C. Consolidated Tangible Net Worth. The Company will not permit, at
any time and on any date of determination, Consolidated Tangible Net Worth less
than the sum of (i) $150,000,000 plus (ii) an amount equal to 50% of cumulative
Consolidated Net Income (with no deduction for cumulative losses), from and
including the fiscal quarter beginning August 4, 1996 through and including the
Company's fiscal quarter then most recently ended on or prior to such date of
determination plus (iii) an amount equal to 100% of the Net Proceeds from any
Equity Transaction occurring after January 9, 1997."
Section 1.03. Paragraph 6D. Restricted Payments. Paragraph 6D is
amended in full to read as follows:
"6D. Restricted Payments. The Company will not make or permit any
Restricted Payment to occur, except that so long as no Default or Event of
Default shall exist immediately prior to or after giving effect thereto, the
Company may make Restricted Payments in an aggregate amount not to exceed the
sum of
(A) $35,000,000 plus
(B) an amount equal to 50% of cumulative Consolidated Net Income
(but only to the extent positive) accrued quarterly from the beginning of
the Company's fiscal quarter beginning August 4, 1996 as reduced by the
cumulative amount of Restricted Payments made since August 4, 1996."
Section 1.04. Xxxxxxxxx 00X. Other Terms. Paragraph 10 is amended by
amending the definition of Consolidated Net Income in full to read as follows:
"'Consolidated Net Income' shall mean for any period, the net income of
the Company and its Subsidiaries on a consolidated basis determined in
accordance with GAAP applied on a consistent basis, but excluding for purposes
of determining the Consolidated Fixed Charge Coverage Ratio (i) any extra-
ordinary gains or losses, and any non-recurring non-cash gains and losses, and
(ii) any taxes on such excluded gains and losses and any tax deductions or
credits on account of any such excluded gains and losses. As related to items
(i) and (ii) above, net losses and restructuring charges in the third and fourth
quarters of fiscal year 1997 related to the decision to restructure the Pagoda
International Division and income tax expense attributable to the repatriation
of certain cash used to support the operations of the Pagoda International
Division shall, in the aggregate, be limited to $25,000,000."
Section 2. Conditions to Effectiveness. This Amendment shall become
effective, when and only when,
(a) each of the holders of the Notes shall have received
counterparts of this Amendment which shall have been executed by the Company,
each Guarantor, and each of the holders of the Notes; and
(b) the Company shall have paid to you by wire transfer
immediately available funds an amendment fee of $25,000 to be wired to the
following account:
The Bank of New York
New York, New York
ABA # 000-000-000
For the Account of The Prudential
Insurance Company of America
Account # 000-0000-000
Reference: Xxxxx Group
Section 3. Representations and Warranties. Each Credit Party hereby
represents and warrants that the representations and warranties contained in
paragraph 8 of the Agreement are true and correct on the date hereof as of
made on such date, except that the references to "this Agreement" shall mean the
Agreement as amended by this Amendment.
Section 4. Miscellaneous.
4.01. Effect of Amendment. On and after the effective date of this
Amendment, each reference in the Agreement to "this Agreement", "hereunder",
"hereof", or words of like import referring to the Agreement, and each reference
in the Notes to "the Agreement", "thereunder", "thereof", or words of like
import referring to the Agreement, shall mean the Agreement as amended by this
Amendment. The 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. The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy under the Agreement nor constitute a waiver of any provision of
the Agreement.
4.02. Counterparts. 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 Amendment.
If you agree to the terms and provisions hereof, please evidence your
agreement by executing and returning at least a counterpart of this Amendment
to the Company at its address at 0000 Xxxxxxxx Xxx., Xx. Xxxxx, Xxxxxxxx 00000,
Attention: Treasurer.
Very truly yours,
XXXXX GROUP, INC.
By: /s/ Xxxxx X. Xxxx
Title: Executive Vice President &
Chief Financial Officer
GUARANTORS
XXXXX GROUP INTERNATIONAL, INC.
XXXXX GROUP RETAIL, INC.
PAGODA TRADING COMPANY, INC.
XXXXXX XXXX ASSOCIATES, INC.
By: /s/ Xxxxx X. Xxxx
Title: Vice President
Agreed as of the date
first above written:
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Xxx Xxxxxxx
Vice President
PRUCO LIFE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxx
Vice President
