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EXHIBIT 10.10(C)
THE TIMBERLAND COMPANY
200 DOMAIN DRIVE
STRATHAM, NEW HAMPSHIRE 03885
SECOND AMENDMENT
Dated as of
June 28, 1995
Re: Amended and Restated
Note Agreements dated as of April 1, 1994
$35,000,000 9.70% Senior Notes
Due December 1, 1999
To the Holder named in Schedule I
hereto which is a signatory of this
Agreement
Ladies and Gentlemen:
The undersigned, The Timberland Company, a corporation duly organized
and validly existing under the laws of the State of Delaware, (the "Company"),
agrees with you as follows:
SECTION 1. INTRODUCTION.
Reference is made to the separate Amended and Restated Note Agreements,
each dated as of April 1, 1994, as amended by the separate First Amendments
thereto, each dated as of April 15, 1995 collectively, (the "Original Note
Agreements"), between the Company and the Purchasers named in Schedule I
thereto, respectively. Unless otherwise herein defined or the context hereof
otherwise requires, the capitalized terms in this Second Amendment shall have
the respective meanings specified in the Original Note Agreements. The holders
of the Notes at the time of reference are referred to herein as the "Holders".
Reference is also made to that certain Amendment No. 2 to Amended and
Restated Credit Agreement dated as of June 28, 1995 (the "Credit Agreement
Amendment") among the Company, the Banks listed on the signature pages thereof
and Morgan Guaranty Trust Company of New York, as Agent, which is being executed
and delivered concurrently herewith.
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The Timberland Company Second Amendment
The Company has requested that, subject to the satisfaction of the
conditions set forth herein, the Original Note Agreements be amended as of June
28, 1995 (the "Effective Date") in the respects, but only in the respects,
hereinafter set forth, and, by your execution hereof, you hereby agree to such
amendments on the terms hereinafter set forth.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to you as follows:
(a) After giving effect to this Second Amendment and the Credit
Agreement Amendment and the transactions contemplated hereby and thereby, no
Default or Event of Default has occurred and is continuing, and no event has
occurred and no condition exists which with the lapse of time or the giving of
notice, or both, would constitute an event of default under any indenture,
agreement, or other instrument under which any Indebtedness of the Company or
any Restricted Subsidiary for borrowed money in an aggregate principal amount in
excess of $1,000,000 is outstanding.
(b) The Company has no Unrestricted Subsidiaries.
SECTION 3. CONDITIONS PRECEDENT.
The effectiveness of this Second Amendment shall be subject to the
following conditions precedent:
Section 3.1. Execution of the Credit Agreement Amendment. The
Company, the Agent named therein and the Required Banks (as defined in the
Credit Agreement) shall have duly executed and delivered the Credit Agreement
Amendment, which shall be a legal, valid, binding and enforceable agreement of
the Company.
Section 3.2. Warranties and Representations True. The warranties
and representations of the Company set forth in Section 2 hereof shall be true
and correct in all material respects on the Effective Date with the same effect
as though made on and as of the Effective Date.
Section 3.3. Payment of Closing Fees. In consideration of your
execution and delivery of this Second Amendment, the Company shall have paid to
each Holder a closing fee in an amount equal to .375% of the outstanding
principal amount of the Notes held by such Holder on the Effective Date.
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The Timberland Company Second Amendment
Section 3.4. Proceedings Satisfactory;. All proceedings taken in
connection with the transactions contemplated or provided for in this Second
Amendment and all documents and papers relating thereto shall be satisfactory to
you and your special counsel. You and your special counsel shall have received
copies of such documents and papers as you or they may reasonably request in
connection therewith, all in form and substance satisfactory to you and your
special counsel.
SECTION 4. AMENDMENTS.
The following amendments to the Original Note Agreements shall become
effective on the Effective Date and shall terminate and be of no further force
and effect on February 28, 1997:
Section 4.1. Amendment to Section 5.7. Section 5.7 of the Original
Note Agreements shall be, and the same is hereby amended in its entirety as
follows:
"Section 5.7. Minimum Consolidated Tangible Net Worth.
Consolidated Tangible Net Worth will at no time during any period
set forth below be less than the sum of (i) the amount set forth
below opposite such period and (ii) 80% of the net cash proceeds of
all issuances by the Company of shares of its capital stock after
the Second Amendment Effective Date:
PERIOD
AMOUNT
Second Amendment Effective Date
through the next to last day of
the third fiscal quarter of 1996 $100,000,000
Last day of the third fiscal quarter
of 1996 through the next to last
day of the fourth fiscal quarter
of 1996 $120,000,000
Last day of the fourth fiscal quarter
of 1996 and thereafter $125,000,000
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The Timberland Company Second Amendment
"The following terms shall have the following meanings solely for
purposes of this ss.5.7:
"'Consolidated Net Worth' means at any date the consolidated
stockholders' equity of the Company and its Consolidated Subsidiaries
(without giving effect to (i) any write-ups or write-downs resulting
from foreign currency translations after December 31, 1994 or (ii) up
to $17,000,000 (calculated on a pre-tax basis) of certain extraordinary
items that may be booked after April 19, 1995) as of such date.
"'Consolidated Subsidiary' means at any date any Subsidiary
or other entity the accounts of which would be consolidated with those
of the Company in its consolidated financial statements if such
statements were prepared as of such date.
"'Consolidated Tangible Net Worth' means at any date
Consolidated Net Worth less the consolidated Intangible Assets of the
Company and its Consolidated Subsidiaries, all determined as of such
date. For purposes of this definition "Intangible Assets" means the
amount (to the extent reflected in determining such Consolidated Net
Worth) of (i) all write-ups (other than write-ups of assets of a going
concern business made within twelve months after the acquisition of
such business) subsequent to December 31, 1993 in the book value of any
asset owned by the Company or a Consolidated Subsidiary, (ii) all
Investments in unconsolidated Subsidiaries and all equity investments
in Persons which are not Subsidiaries and (iii) all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, anticipated future benefit of
tax loss carry-forwards, copyrights, organization or developmental
expenses and other intangible assets.
"'Investment' means any investment in any Person, whether by
means of share purchase, capital contribution, loan, time deposit or
otherwise."
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Section 4.2. Amendments to Section 5.8. Section 5.8 of the Original
Note Agreements shall be, and the same is hereby amended as follows:
(a) Section 5.8(a)(3) is amended in its entirety to read as follows:
"(3) [Intentionally Reserved]".
(b) Section 5.8(a)(5) is amended in its entirety to read as follows:
"(5) Current Debt or Funded Debt of a Restricted
Subsidiary, other than that permitted by ss.5.8(a)(4), provided
that at the time of incurrence thereof and after giving effect
thereto and to the application of the proceeds thereof,
Specified Debt does not exceed 15% of Consolidated Tangible Net
Worth."
Section 4.3. Amendment to Section 5.9. Section 5.9 of the Original
Note Agreements shall be, and the same is hereby amended in its entirety as
follows:
"Section 5.9. Fixed Charge Coverage Ratio. The
Fixed Charge Coverage Ratio for any period of four consecutive
fiscal quarters ending during any period set forth below will not
be less than the ratio set forth opposite such period:
PERIOD RATIO
First day of the second fiscal quarter
of 1995 through the last day of such
quarter
1.35 to 1
First day of the third fiscal quarter
of 1995 through the last day of the
second fiscal quarter of 1996
0.75 to 1
First day of the third fiscal quarter
of 1996 and thereafter
1.50 to 1"
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"The following terms shall have the following meanings solely for
purposes of this Section 5.9:
"'Consolidated EBITR' means, for any period, the
sum of (i) consolidated net income of the Company and its
Consolidated Subsidiaries for such period plus (ii) to the
extent deducted in determining such consolidated net
income, the sum of (A) Consolidated Interest Expense, (B)
Consolidated Rental Expense (C) consolidated taxes of the
Company and its Consolidated Subsidiaries for such period
and (D) up to $17,000,000 (calculated on a pre-tax basis)
of certain extraordinary items that may be booked after
April 19, 1995.
"'Consolidated Interest Expense' means, for any
period, the interest expense (less interest income) of the
Company and its Consolidated Subsidiaries determined on a
consolidated basis for such period.
"'Consolidated Rental Expense' means, for any
period, the rental expense of the Company and its
Consolidated Subsidiaries (other than with respect to
capital leases) determined on a consolidated basis for
such period.
"'Consolidated Subsidiary' is defined in
Section 5.7.
"'Fixed Charge Coverage Ratio' means, for any
period, the ratio of (i) Consolidated EBITR for such
period to (ii) the sum of (A) Consolidated Interest
Expense for such period, (B) Consolidated Rental Expense
for such period and (C) dividends on preferred stock of
the Company and its Consolidated Subsidiaries for such
period (other than any such dividends paid to the Company
or its Consolidated Subsidiaries)."
Section 4.4. Amendment to Section 5.10. Section 5.10(j) of the
Original Note Agreements shall be, and the same is hereby amended in its
entirety as follows:
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"(j) provided that no Default or Event of Default
exists at the time of creation thereof, other Liens on fixed
assets (in addition to those permitted by the foregoing
provisions of this Section 5.10) if, after giving effect
thereto (and to the application of the proceeds thereof), the
aggregate amount of Specified Debt would not exceed 15% of
Consolidated Tangible Net Worth; and"
Section 4.5. Amendment to Section 5.11. Section 5.11 of the
Original Note Agreements shall be, and the same is hereby amended in its
entirety as follows:
"Section 5.11. Restricted Payments. Neither the
Company nor any Subsidiary will declare or make any Restricted
Payment unless, after giving effect thereto, the aggregate of
all Restricted Payments declared or made subsequent to
December 31, 1990 does not exceed 25% of consolidated net
income (less consolidated net loss, if any) of the Company and
its Consolidated Subsidiaries for the period from January 1,
1991 through the end of the Company's then most recent fiscal
quarter (treated for this purpose as a single accounting
period). Nothing in this Section 5.11 shall prohibit the
payment of any dividend or distribution within 60 days after
the declaration thereof if such declaration was not prohibited
by this Section 5.11.
"The following term shall have the following meaning
solely for purposes of this Section 5.11:
"'Restricted Payment' means (i) any dividend
or other distribution on any shares of the Company's
capital stock (except dividends payable solely in
shares of its capital stock) or (ii) any payment (other
than payments for the repurchase of shares of the
Company's common stock from employees or former
employees of the Company or any of its Subsidiaries
pursuant to the 1987 Employee Stock Purchase Plan, the
1991 Employee Stock Purchase Plan or the 1987 Employee
Stock Option Plan, in each case as amended (other than
to change in any material respect any provisions
relating to repurchases of any such shares) from time
to time (or any successor plans with substantially
similar provisions), in an aggregate amount not to
exceed the proceeds received by the Company after the
date hereof
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The Timberland Company Second Amendment
of sales of shares of the Company's common stock to
employees of the Company and its Subsidiaries) on
account of the purchase, redemption, retirement or
acquisition of (a) any shares of the Company's capital
stock or (b) any option, warrant or other right to
acquire shares of the Company's capital stock."
Section 4.6. Amendment to Section 5.19. Section 5.19(f) of the
Original Note Agreements shall be, and the same is hereby amended in its
entirety as follows:
"(f) Officers Certificates. Within the periods
provided in paragraphs (a) and (b) above, a certificate of an
authorized financial officer of the Company stating that he has
reviewed the provisions of this Agreement and setting forth:
(i) the information and computations (in sufficient detail)
required in order to establish whether the Company was in
compliance with the requirements of Section 5.5 through
Section 5.21, inclusive, at the end of the period covered by
the financial statements then being furnished, (ii) whether
there existed as of the date of such financial statements and
whether, to the best of his knowledge, there exists on the
date of the certificate or existed at any time during the
period covered by such financial statements any Default or
Event of Default and, if any such condition or event exists
on the date of the certificate, specifying the nature and
period of existence thereof and the action the Company is
taking and proposes to take with respect thereto and (iii) the
information and computations (in sufficient detail) required
in order to establish whether the Company was in compliance
with the requirements of Section 5.6 through Section 5.14,
inclusive, and Section 5.17 (as such Sections were in effect
immediately prior to the Second Amendment Effective Date) at
the end of the period covered by the financial statements then
being furnished, and the amount, if any, of the Credit Fee (as
defined in the Second Amendment) to be paid to the holders of
the Notes pursuant to Section 5 of the Second Amendment;"
Section 4.7. Additional Covenants of the Company. The following
Sections 5.20 through 5.24 shall be added to the Original Note Agreements
immediately following Section 5.19, to read in their respective entireties as
follows:
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"Section 5.20. Debt. Without limiting the provisions of
Section 5.8 the Company will not, and will not permit any of its
Subsidiaries to, incur or at any time be liable with respect to any
Debt except:
"(a) Debt outstanding under the Credit Agreement as in
effect on the date hereof giving effect to Amendment No. 2
thereto, provided that the sum of (i) the aggregate principal
amount of Loans outstanding under the Credit Agreement and (ii)
the aggregate principal amount of Permitted Short-Term Debt
shall not exceed (A) for a minimum of thirty consecutive days in
the period between December 1, 1995 and March 1, 1996,
$20,000,000 and (B) on any day, the Limitation Amount for such
day; and
"(b) Other Debt permitted by Section 5.08 of the
Credit Agreement as in effect on the date hereof giving effect
to Amendment No. 2 thereto.
"The following terms shall have the following meanings solely
for purposes of this Section 5.20:
"'Debt' of any Person means at any date, without
duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (iii) all
obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable arising in
the ordinary course of business, (iv) all obligations of such
Person as lessee which are capitalized in accordance with
generally accepted accounting principles, (v) all non-contingent
obligations (and, for purposes of Section 5.10 and the
definitions of Material Debt and Material Financial
Obligations, all contingent obligations) of such Person to
reimburse or prepay any bank or other Person in respect of
amounts paid under a letter of credit, banker's acceptance or
similar instrument, whether drawn or undrawn, (vi) all Debt of
others secured by a Lien on any asset of such Person, whether
or not such
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Debt is assumed by such Person, and (vii) all Debt of others
guaranteed by such Person.
"'Derivatives Obligations' of any Person means all
obligations of such Person in respect of any rate swap
transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or
equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction
(including any option with respect to any of the foregoing
transactions) or any combination of the foregoing transactions.
"'Limitation Amount' means, for any day set forth, or
for any day during any period set forth, below, the amount set
forth below opposite such day or period:
DAY OR PERIOD LIMITATION
AMOUNT
Second Amendment Effective Date
through the last day of the
second fiscal quarter of 1995 $100,000,000
First day of the third fiscal
quarter of 1995 through the
next to last day of such
quarter $125,000,000
Last day of the third fiscal
quarter of 1995 through the
next to last day of the fourth
fiscal quarter of 1995 $115,000,000
Last day of the fourth fiscal
quarter of 1995 $ 20,000,000
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First day of the first fiscal
quarter of 1996 through the
last day of such quarter $ 30,000,000
First day of the second fiscal
quarter of 1996 through the
last day of such quarter $ 65,000,000
First day of the third fiscal
quarter of 1996 through the
next to last day of the fourth
fiscal quarter of 1996 $100,000,000
Last day of the fourth fiscal
quarter of 1996 and thereafter $ 20,000,000
"'Loan' means a Domestic Loan, a Euro-Dollar
Loan or a Money Market Loan (each as defined in the
Credit Agreement) and "Loans" means Domestic Loans,
Euro-Dollar Loans or Money Market Loans or any
combination of the foregoing.
"'Material Debt' means Debt (other than the
Loans) of the Company and/or one or more of its
Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal
amount exceeding $1,000,000.
"'Material Financial Obligations' means a
principal or face amount of Debt and/or payment
obligations in respect of Derivatives Obligations of
the Company and/or one or more of its Subsidiaries,
arising in one or more related or unrelated
transactions, exceeding in the aggregate $2,500,000
(or, in the case of foreign exchange transactions,
$5,000,000).
"'Permitted Short-Term Debt' means Debt
(other than Loans or Debt permitted under Section
5.08(g) of the Credit Agreement) of the Company or
any of its Subsidiaries having a maturity, at the
time such Debt is
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incurred, of not more than one year from the date
such Debt is incurred.
"Section 5.21. Leverage Ratio. The Leverage Ratio
will at no time during any period or on any day set forth below
exceed the ratio set forth below opposite such period or day:
PERIOD OR DAY LEVERAGE
RATIO
First day of the second fiscal
quarter of 1995 through the
last day of such quarter 2.25 to 1.00
First day of the third fiscal
quarter of 1995 through the next
to last day of such quarter 2.30 to 1.00
Last day of the third fiscal
quarter of 1995 through the
next to last day of the fourth
fiscal quarter of 1995 2.25 to 1.00
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Last day of fourth fiscal quarter
of 1995 1.50 to 1.00
First day of the first fiscal
quarter of 1996 through the last
day of such quarter 1.60 to 1.00
First day of the second fiscal
quarter of 1996 through the
next to last day of the third
fiscal quarter of 1996 1.90 to 1.00
Last day of the third fiscal
quarter of 1996 through the
next to last day of the fourth
fiscal quarter of 1996 1.80 to 1.00
Last day of the fourth fiscal
quarter of 1996 1.25 to 1.00
First day of the first fiscal
quarter of 1997 and thereafter 1.45 to 1.00
"The following terms shall have the following
meanings solely for purposes of this Section 5.21:
"'Consolidated Debt' means at any date the
Debt of the Company and its Consolidated
Subsidiaries, determined on a consolidated basis as
of such date.
"'Consolidated Subsidiaries' is defined in
Section 5.7.
"'Debt' is defined in Section 5.20.
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"'Leverage Ratio' means, for any date, the ratio of
(i) Consolidated Debt on such date to (ii) Consolidated Net
Worth (as defined in Section 5.7) on such date.
"'Loan' is defined in Section 5.20.
"Section 5.22. No Unrestricted Subsidiaries. The Company
shall not designate any Subsidiary as an Unrestricted Subsidiary.
"Section 5.23. Payments with Respect to Credit Agreement.
The Company will not, without the prior written consent of Holders
holding not less than 51% of the unpaid principal amount of the
Notes, directly or indirectly pay or extend, or enter into any
agreement with any of the other Persons party to the Credit Agreement
which provides for the payment or extension by the Company of, any
form of additional compensation or security to any such Person in
consideration for any amendment of, waiver of the requirements of, or
consent to a modification of, Sections 2.13, 5.11, 5.12, 5.13 or 5.14
of the Credit Agreement (or related definitions of terms), as amended
to the date hereof.
"Section 5.24. Restrictive Agreements. (a) The Company
will not, and will not permit any Subsidiary to, enter into any
agreement after the Second Amendment Effective Date which shall
further limit (i) the ability of the Company or any Subsidiary to
amend or otherwise modify this Agreement or any Note, (ii) the
ability of any Subsidiary to make any payments, directly or
indirectly, to the Company, (iii) the ability of any Subsidiary to
guarantee any obligation of the Company under the Agreement or any
Note or (iv) the ability of the Company or any Subsidiary to grant
any Lien on any or all of its property to secure its obligations
under this Agreement, the Notes or any such guarantee; provided that
(x) the agreements and instruments entered into in connection with
the refinancing of any Debt of the Company or any Subsidiary
outstanding on the Second Amendment Effective Date (or on the date
such Subsidiary becomes a Subsidiary) may contain any such
limitations that were contained in the agreements and instruments
governing the Debt so refinanced and (y) it is understood that the
imposition by any governmental entity of any restriction of the
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kind set forth in this Section shall not be deemed to be a Default
under this Section.
"(b) The Company will not, and will not permit any
Subsidiary to, enter, after the Second Amendment Effective Date, into
any agreement (including, without limitation, any amendment or
modification of, or supplement to, any outstanding agreement) with
respect to any Debt of the Company or any Subsidiary that contains
conditions, covenants or events of default that are more burdensome
or restrictive to the Company or such Subsidiary than those contained
in the Credit Agreement are to the Company on the Second Amendment
Effective Date.
"The following terms shall have the following meanings
solely for purposes of this Section 5.24:
"'Debt' is defined in Section 5.20.
"'Loan' is defined in Section 5.20."
Section 4.8. Amendment to Section 6.1. Section 6.1(f) of the
Original Note Agreements shall be, and the same is hereby amended in its
entirety as follows:
"(f) Default shall occur in the observance or
performance of any covenant or agreement contained in ss.5.6 through
Section 5.15, inclusive, Section 5.17, Section 5.20, Section 5.21, or
Section 5.23; or"
Section 4.9. Amendments to Section 8.1. The following definitions
shall be added to Section 8.1 of the Original Note Agreements in alphabetical
order and shall read as follows:
"'Credit Agreement' shall mean that certain Amended
and Restated Credit Agreement dated as of March 14, 1995, among the
Company, the Banks listed on the signature pages thereof and Morgan
Guaranty Trust Company of New York, as Agent, as amended to date.
'Second Amendment' shall mean the Second Amendment to
this Agreement dated as of June 28, 1995 between the Company and
you.
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'Second Amendment Effective Date' shall mean the date
on which the Second Amendment becomes effective."
SECTION 5. CREDIT FEE.
If, on any interest payment date, the Company is not in compliance
(determined as of the end of the then most recent fiscal quarter of the Company)
with Sections 5.6 through 5.14, inclusive, or Section 5.17 of the Original Note
Agreements (as in effect immediately prior to the Effective Date), the Company
shall pay to each Holder a fee (the "Credit Fee") in an amount equal to .125% of
the outstanding principal amount of the Notes held by such Holder on such
interest payment date (each a "Non-Compliance Date"), before giving effect to
any payment of principal made on the Notes on such Non-Compliance Date.
Each Credit Fee shall be due and payable 10 days following the
delivery to the Holders of the Company's financial statements for the fiscal
quarter immediately preceding the applicable Non-Compliance Date or, if earlier,
on the date such financial statements are required to be delivered to the
holders of the Notes pursuant to Section 5.19 of the Original Note Agreements,
as amended hereby.
In the event that the Company has not delivered the required financial
statements by the date provided in said Section 5.19 for any financial reporting
period ending immediately prior to an interest payment date, such interest
payment date shall be deemed to be a Non-Compliance Date hereunder, and the
Credit Fee relating to such Non-Compliance Date shall become immediately due and
payable.
SECTION 6. MISCELLANEOUS.
Section 6.1. Waiver of Default. Any Default or Event of Default
which might have existed under the Original Note Agreements prior to giving
effect to this Second Amendment but which would not constitute such a Default or
Event of Default under the Original Note Agreements as amended by this Second
Amendment is hereby waived.
Section 6.2. Notices. Any and all notices, requests, certificates
and other instruments executed and delivered after the effective date of this
Second Amendment may refer to the "Note Agreements dated as of April 1, 1994"
without making specific reference to this Second Amendment, but nevertheless all
such references shall be deemed to include this Second Amendment unless the
context shall otherwise require.
Section 6.3. Expenses. The Company will pay all expenses relating to
this Second Amendment in accordance with Section 9.4 of the Original Note
Agreements.
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Section 6.4. Construction. This Second Amendment shall be construed
in connection with and as part of the Original Note Agreements, and all terms,
conditions and covenants contained in the Original Note Agreements, except as
herein modified, shall be and remain in full force and effect.
Section 6.5. Counterparts. This Second Amendment may be executed in
any number of counterparts, each executed counterpart constituting an original
but altogether one and the same instrument.
Section 6.6. Governing Law. This Second Amendment shall be governed
by and construed in accordance with the laws of the State of Illinois.
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Upon the acceptance of this Second Amendment by Holders holding at least
51% in aggregate unpaid principal amount of all outstanding Notes, this
agreement shall become effective and the Original Note Agreements shall be
amended as herein set forth, such amendment to be effective as of June 28, 1995.
THE TIMBERLAND COMPANY
By
Its
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Accepted as of June 28, 1995
[Variation]
By
Its
------------------------------
By
Its
------------------------------
Holding $[Variation] unpaid principal
amount of the Notes.
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