Exhibit 10(b)

May 30, 2002

WD-40 COMPANY

1061 Cudahy Place

San Diego, CA 92110

 

  Re:    First Amendment/Consent-Private Shelf Agreement dated as of October 18,
2001

Gentlemen:

Reference is made to the Note Purchase and Private Shelf Agreement, dated as of
October 18, 2001 (as amended from time to time, the “Agreement”), by and between
WD-40 Company (the “Company”), on the one hand, and The Prudential Insurance
Company of America (“Prudential”) and each Prudential Affiliate which may become
bound by certain provisions of the Agreement, on the other hand. Capitalized
terms used and not otherwise defined herein shall have the meanings provided in
the Agreement.

Pursuant to the request of the Company and paragraph 11C of the Agreement, and
notwithstanding the requirement in paragraph 6C(3) that a Permitted Acquisition
shall be limited, among other things, to acquisitions in which the consideration
does not exceed $10,000,000, Prudential hereby consents to the Company’s paying
consideration with a fair market value in excess of $10,000,000 for the
acquisition (the “Heartland Acquisition”) of all of the capital stock of
Heartland Corporation, a Kansas corporation (“Heartland”); provided that such
consent is subject to the fair market value of such consideration not exceeding
$47,000,000, as such amount may be adjusted on a dollar-for-dollar basis based
on any increase or decrease in the net book value of Heartland’s total assets
between its fiscal year ended December 31, 2001 and May 31, 2002.

Pursuant to the request of the Company and paragraph 11C of the Agreement,
Prudential agrees with the Company that:

1. Solely for purpose of calculating the ratio of Total Debt to Consolidated
EBITDA set forth in paragraph 6A(1), and notwithstanding anything to the
contrary contained in the definition of “Consolidated EBITDA” in paragraph 10B
of the Agreement (and in the definitions for the other defined terms used in the
definition of “Consolidated EBITDA”), Consolidated EBITDA will be adjusted to
add thereto an amount equal to the Heartland Adjustment. The “Heartland
Adjustment” means (a) from the closing of the Heartland Acquisition through
August 30, 2002, 100% of the Heartland EBITDA, (b) from August 31, 2002 through
November 29, 2002, 75% of the Heartland EBITDA, (c) from November 30, 2002
through February 27, 2003, 50% of the Heartland EBITDA, (d) from February 28,
2003 through May 30, 2003, 25% of the Heartland EBITDA, and (e) at all times
prior to the closing of the Heartland Acquisition and at all times from and
after May 31, 2003, zero. The “Heartland EBITDA” shall mean an amount equal to
Consolidated EBITDA, as defined in paragraph 10B of the Agreement except that
such amount shall be calculated solely for Heartland and its Subsidiaries based
on their audited financial statements for their fiscal year ended December 31,
2001.

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WD-40 COMPANY

May 30, 2002

Page 2

 

2. Paragraph 6A(2) of the Agreement is amended and restated, as follows:

“6A(2) Consolidated Net Worth. Consolidated Net Worth at any time to be less
than the sum of (I) $45,000,000 plus (ii) on a cumulative basis, 25% of
Consolidated Net Income (only if positive) for each fiscal quarter of the
Company, commencing with the fiscal quarter beginning September 1, 2001 plus
(iii) 100% of the cash proceeds received by the Company (or 100% of the fair
market value of any other property received by the Company) as consideration for
the Company’s issue and sale of equity securities (except to employees or former
employees of the Company pursuant to an employee stock option plan maintained by
the Company) subsequent to the date of this Agreement; and”

Each of the consent and amendments set forth in this letter shall be limited
precisely as written and shall not be deemed to be (a) an amendment, consent or
waiver or other modification of any other terms or conditions of the Agreement
or any other document related to the Agreement or (b) a consent to any future
amendment, consent, waiver or other modification. Except as expressly set forth
in this letter, the Agreement and the documents related to the Agreement shall
continue in full force and effect.

In order to induce Prudential to enter into this letter agreement, the Company
hereby represents and warrants to Prudential that, after giving effect to the
consent and amendments provided in this letter agreement, (a) each of the
representations and warranties set forth in paragraph 8 of the Agreement is
true, correct and complete as of the date hereof (except to the extent such
representations and warranties expressly relate to another date, in which case
such representations and warranties are true, correct and complete as of such
other date) and (b) no Default or Event of Default is in existence.

The foregoing shall become effective upon the receipt by Prudential of a fully
executed counterpart of this letter (including the reaffirmations by the
Guarantors of their obligations under the Multiparty Guaranty). This document
may be executed in multiple counterparts, which together shall constitute a
single document.

The continued effectiveness of the consent and amendments contained in this
letter agreement shall be contingent upon the satisfaction, concurrent with or
prior to the consummation of the Heartland Acquisition, of the following:
(i) Heartland shall have executed and delivered to Prudential (or to the
Collateral Agent and Prudential in the case of clause (b) below) joinders
causing Heartland to become (a) a Guarantor under the Multiparty Guaranty, (b) a
grantor under the Security Agreement, the Patent Security Agreement and the
Trademark Security Agreement and (c) an Affiliate Guarantor under the
Intercreditor Agreement; (ii) the Company shall have pledged to the Collateral
Agent, for the benefit of the holders from time to time of the Notes the share
certificates representing all of the capital stock of Heartland, together with
undated stock powers executed in blank; (iii) Heartland shall have executed and
delivered such other documents or instruments as are necessary or desirable for
the Collateral Agent, for the benefit of the holders from time to time of the
Notes, to obtain a fully perfected security interest in the personal property of
Heartland that constitutes Collateral; and (iv) Prudential shall have received
evidence satisfactory to it of the effectiveness of (A) the consent by the
requisite lenders under the Credit Agreement to the Heartland Acquisition and
(B) amendments, consented to by the requisite lenders under the Credit
Agreement, of Section 6.11 of the Credit Agreement (Leverage Ratio) and
Section 6.13 of the Credit Agreement (Net Worth), on a basis consistent with the
amendments to paragraphs 6A(1) and 6A(2), respectively, set forth in this letter
agreement.

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WD-40 COMPANY

May 30, 2002

Page 3

 

If you are in agreement with the foregoing, please sign the enclosed counterpart
of this letter in the space indicated below and return it to Prudential at the
above address whereupon shall become a binding agreement between the Company and
Prudential.

 

Sincerely,

THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA,

By:  

/s/ JOSEPH Y. ALOUF

Its:   Vice President

Accepted and agreed to

effective the date first

appearing above:

WD-40 COMPANY,

a Delaware corporation

 

By:  

/s/ MICHAEL J. IRWIN

Its:   Senior Vice President, Chief Financial Officer and Treasurer

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WD-40 COMPANY

May 30, 2002

Page 4

 

The undersigned Guarantors of the obligations

of the Company under the Agreement and

with respect to the Notes hereby consent to

the foregoing amendments effective the date

first appearing above:

 

WD-40 MANUFACTURING COMPANY, a California corporation By:  

/s/ MICHAEL J. IRWIN

Name:  

Michael J. Irwin

Title:  

Treasurer

HPD HOLDINGS CORP.,

a Delaware corporation

By:  

/s/ MICHAEL J. IRWIN

Name:  

Michael J. Irwin

Title:  

Treasurer

HPD LABORATORIES, INC.,

a Delaware corporation

By:  

/s/ MICHAEL J. IRWIN

Name:  

Michael J. Irwin

Title:  

Treasurer