August 22, 2007
Twin Disc, Incorporated
1328 Racine Street
Racine, Wisconsin 5340311208
Attention: Mr. Christopher J. Eperjesy
Re: Amendment No. 2 to Note Agreement
Ladies and Gentlemen:
This letter amendment (this “Letter”) makes reference to that certain Note Agreement, dated as of April 10, 2006 (as amended by Amendment No. 1 thereto dated March 1, 2007, the “Note Agreement”), among The Prudential Insurance Company of America, Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, Security Benefit Life Insurance Company, Inc., American Skandia Life Assurance Corporation, Mutual of Omaha Insurance Company (collectively, the “Holders” and each, a “Holder”) and Twin Disc, Incorporated, a Wisconsin corporation (the “Company”). Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Note Agreement, as amended hereby.
The Company has requested that the Holders amend the Note Agreement as set forth below. Subject to the terms and conditions hereof, the Holders are willing to agree to such requests.
Accordingly, and in accordance with the provisions of paragraph 11C of the Note Agreement, the parties hereto agree as follows:
SECTION 1.Amendments. Effective upon the Effective Date (as defined in Section 2 below), the Holders party hereto and the Company agree that the Note Agreement is amended as follows:
1.1 Paragraph 6F of the Note Agreement is amended and restated as follows
“6F. Restricted Payments.The Company covenants that it will not, and will not permit any Subsidiary to, (i) declare or pay any non-cash dividends; or (ii) purchase, redeem, retire, or otherwise acquire for value any of its capital stock now or hereafter outstanding; or (iii) make any distribution of assets to its stockholders as such, whether in assets or in obligations of the Company; or (iv) allocate or otherwise set apart any sum for the purchase, redemption, or retirement of any shares of its capital stock; or (v) make any other distribution by reduction of capital or otherwise in respect of any shares of its capital stock, or (vi) declare or pay any cash dividends to any stockholders; provided, however, so long as no Default or Event of Default then exists or would be created thereby, the Company may (a) pay cash dividends and (b) purchase, redeem, retire or
otherwise acquire for value any of its capital stock now or hereafter outstanding.”
1.2 Paragraph 6I of the Note Agreement is amended and restated as follows
“6I.[Intentionally Omitted]”
SECTION 2.Effectiveness.The amendments in Section 1 of this Letter shall become effective on the date (the “Effective Date”) of satisfaction of the following:
(a) Receipt by each Holder party hereto of counterparts of this Letter executed by the Company and the Required Holders;
(b) Receipt by each Holder party hereto of a copy of an amendment under the Credit Agreement, amending the Credit Agreement consistent with the amendments set forth herein and otherwise in form and substance satisfactory to the Required Holders, duly executed by the Company and the Bank, and such amendment shall be in full force and effect; and
(c) All corporate and other proceedings in connection with the transactions contemplated by this Letter shall be satisfactory to the Required Holders, and each Holder party hereto shall have received all such counterpart originals or certified or other copies of such documents as it may reasonably request.
SECTION 3.Representations and Warranties.The Company represents and warrants to the Holders that, after giving effect hereto (a) each representation and warranty set forth in paragraph 8 of the Note Agreement is true and correct as of the date of the execution and delivery of this Letter by the Company with the same effect as if made on such date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they were true and correct as of such earlier date), (b) no Event of Default or Default exists and (c) neither the Company nor any of its Subsidiaries has paid or agreed to pay, and neither the Company nor any of its Subsidiaries will pay or agree to pay, any fees or other consideration to any Person in connection with the amendment referenced in Section 2(b) hereof.
SECTION 4.Reference to and Effect on Note Agreement. Upon the effectiveness of the amendments made in this Letter, each reference to the Note Agreement in any other document, instrument or agreement shall mean and be a reference to the Note Agreement as modified by this Letter. Except as specifically set forth in Section 1 hereof, the Note Agreement shall remain in full force and effect and is hereby ratified and confirmed in all respects. The Company hereby represents and warrants that all necessary or required consents to this Letter have been obtained and are in full force and effect. Except as specifically stated in Section 1 of this Letter, the execution, delivery and effectiveness of this Letter shall not (a) amend the Note Agreement or any Note, (b) operate as a waiver of any right, power or remedy of the holder of any Note, or (c) constitute a waiver of, or consent to any departure from, any provision of the Note Agreement or any Note at any time. The execution, delivery and effectiveness of this Letter shall not be construed as a course of dealing or other implication that any Holder has agreed to or is prepared to grant any amendments to the Note Agreement or any Note in the future, whether or not under similar circumstances.
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SECTION 5.Expenses. The Company hereby confirms its obligations under the Note Agreement, whether or not the transactions hereby contemplated are consummated, to pay, promptly after request by any Holder, all reasonable out-of-pocket costs and expenses, including attorneys’ fees and expenses, incurred by the Holders in connection with this Letter or the transactions contemplated hereby, in enforcing any rights under this Letter, or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Letter or the transactions contemplated hereby. The obligations of the Company under this Section 5 shall survive transfer by any Holder of any Note and payment of any Note.
SECTION 6.Governing Law. THIS LETTER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS OF SUCH STATE WHICH WOULD OTHERWISE CAUSE THIS LETTER TO BE CONSTRUED OR ENFORCED OTHER THAN IN ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.
SECTION 7.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 taken together shall constitute but one and the same instrument. Delivery of an executed counterpart of a signature page to this Letter by facsimile or electronic transmission shall be effective as delivery of a manually executed counterpart of this Letter. The section titles contained in this Letter are and shall be without substance, meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.
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Very truly yours,
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: ___________________________________
Vice President
PRUCO LIFE INSURANCE COMPANY
By: ___________________________________
Vice President
PRUCO LIFE INSURANCE COMPANY OF NEW JERSEY
By: ___________________________________
Vice President
SECURITY BENEFIT LIFE INSURANCE COMPANY, INC.
| By: | | Prudential Private Placement Investors, |
| | | L.P. (as Investment Advisor) |
| |
| By: | | Prudential Private Placement Investors, Inc. |
| | | (as its General Partner) |
| By: _________________________________ |
| Vice President |
| | | |
| |
| |
| Signature Page to | | |
| Amendment No. 2 | | |
AMERICAN SKANDIA LIFE ASSURANCE CORPORATION
| By: | | Prudential Investment Management, Inc., |
| | | as investment manager |
| |
| |
| By: ______________________________ |
| | | Vice President |
MUTUAL OF OMAHA INSURANCE COMPANY
| By: | | Prudential Private Placement Investors, |
| | | L.P. (as Investment Advisor) |
| |
| By: | | Prudential Private Placement Investors, Inc. |
| | | (as its General Partner) |
| |
| |
| By: ______________________________ |
| | | Vice President |
Signature Page to Amendment No. 2
THE LETTER IS AGREED TO AND ACCEPTED BY:
TWIN DISC, INCORPORATED
By: ______________________________
Name: ___________________________
Title: ____________________________
Signature Page to Amendment No. 2
