Exhibit 10.2

 

EXECUTION VERSION

 

January 10, 2020

 

Hillenbrand, Inc.

One Batesville Boulevard

Batesville, IN 47006

 

Re:        Amendment No. 6 to Private Shelf Agreement

 

Ladies and Gentlemen:

 

Reference is made to the Private Shelf Agreement, dated as of December 6, 2012
(as amended by Amendment No. 1 dated as of December 15, 2014, Amendment No. 2
dated as of December 19, 2014, Amendment No. 3 dated as of March 24, 2016,
Amendment No. 4 dated as of December 8, 2017 and Amendment No. 5 dated as of
September 4, 2019, the “Note Agreement”), by and among Hillenbrand, Inc., an
Indiana corporation (the “Company”), PGIM, Inc. (f/k/a Prudential Investment
Management, Inc.) (“Prudential”) and each Prudential Affiliate (as therein
defined) that has become or becomes bound thereby. Capitalized terms used herein
that are not otherwise defined herein shall have the meaning specified in the
Note Agreement.

 

The Company has requested that the Required Holders agree to amend the Note
Agreement, as more particularly described below. Subject to the terms and
conditions hereof, the Required Holders are willing to agree to such request.

 

Accordingly, in accordance with the provisions of Section 18.1 of the Note
Agreement, and in consideration of the foregoing and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

 

SECTION 1.  Amendments to the Note Agreement. Upon the occurrence of the
Effective Date (as defined below), the Note Agreement shall be amended as set
forth below:

 

1.1           Section 5.5 of the Note Agreement is hereby amended by deleting
the reference to “September 30” contained therein and inserting “the last day of
the Company’s fiscal year” in lieu thereof.

 

1.2           Section 9.10 of the Note Agreement is hereby amended and restated
in its entirety to read as follows:

 

 

 

 

Section 9.10.  Excess Leverage Fee.

 

(a)           Without limiting the Company’s obligations under Section 10.9(a)
hereof, if the Company’s Leverage Ratio is greater than 3.50 to 1.00 as of the
last day of any fiscal quarter as reflected on the compliance certificate for
such fiscal quarter (or, in the case of the fourth fiscal quarter of a fiscal
year, such fiscal year) required by Section 9.1(c), then, in addition to the
interest accruing on the Notes, the Company agrees to pay to each holder of a
Note a fee (an “Ratio Leverage Fee”) computed on the daily average outstanding
principal amount of such Notes during the fiscal quarter immediately succeeding
such fiscal quarter (such succeeding fiscal quarter, an “Applicable Quarter”) at
a rate of 0.75% per annum; provided that, the rate at which the Ratio Leverage
Fee is calculated shall be increased to 1.00% per annum for any fiscal quarter
for which the Company’s Leverage Ratio is greater than 4.00 to 1.00; provided,
further, for the avoidance of doubt, no Ratio Leverage Fee will accrue during
any fiscal quarter to the extent the Company’s Leverage Ratio as of the last day
of the immediately preceding fiscal quarter is less than or equal to 3.50 to
1.00. The Ratio Leverage Fee with respect to each Note for any period during
which such fee accrues shall be calculated on the same basis as interest on such
Note is calculated and shall be paid in arrears within three Business Days after
the last day of the Applicable Quarter. The payment and acceptance of any Ratio
Leverage Fee shall not constitute a waiver of any Default or Event of Default.
If for any reason the Company fails to deliver the financial statements required
by Section 9.1(a) or 9.1(b) hereof or the related compliance certificate
required by Section 9.1(c) hereof for a succeeding fiscal quarter or fiscal year
by the date such financial statements and compliance certificate are required to
be delivered, then the Company shall be deemed to have a Leverage Ratio as of
the end of such fiscal quarter or fiscal year of greater than 4.00 to 1.00
solely for the purposes of this Section 9.10.

 

(b)           Without limiting the Company’s obligations under Section 9.9
hereof, in addition to the interest accruing on the Notes, the Company agrees to
pay to each holder of a Note a fee (a “Rating Fee”; the Rating Fee together with
any Ratio Leverage Fee are collectively referred to as the “Excess Leverage
Fee”) computed on the daily average outstanding principal amount of such Notes
during each fiscal quarter during which the Company has a Below Investment Grade
Rating from two or more nationally recognized statistical rating agencies at the
rate of 1.00% per annum; provided that, in no event shall a Ratio Leverage Fee
be payable during any period for which a Rating Fee is payable. The Rating Fee
with respect to each Note for each fiscal quarter for which such fee accrues
shall be calculated on the same basis as interest on such Note is calculated and
shall be paid in arrears within three Business Days after the last day of each
fiscal quarter during which the Company had a Below Investment Grade Rating from
two or more nationally recognized statistical rating agencies.

 

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1.3          Section 10.9(a) of the Note Agreement is hereby amended and
restated in its entirety to read as follows, with retroactive effect as of
December 31, 2019:

 

(a)           Maximum Leverage Ratio. The Company will not permit the ratio (the
“Leverage Ratio”), determined as of the last day of each of its fiscal quarters
ending on and after December 31, 2019, of (i) (x) Consolidated Indebtedness
minus (y) the Liquidity Amount, in each case as of the last day of such fiscal
quarter to (ii) Consolidated EBITDA for the period of four (4) consecutive
fiscal quarters ending with the last day of such fiscal quarter, all calculated
for the Company and its Subsidiaries on a consolidated basis, to be greater than
(A) 4.50 to 1.00 for the fiscal quarters ending December 31, 2019 and March 31,
2020, (B) 4.25 to 1.00 for the fiscal quarter ending June 30, 2020, (C) 4.00 to
1.00 for the fiscal quarter ending September 30, 2020, (D) 3.75 to 1.00 for the
fiscal quarter ending December 31, 2020 and (E) 3.50 to 1.00 for the fiscal
quarter ending March 31, 2021 and each fiscal quarter ending thereafter;
provided that the Company may, on or after January 1, 2021, by written notice to
the holders of Notes (which notice may be in a compliance certificate delivered
pursuant to Section 9.1(c) with respect to an applicable fiscal quarter) and not
more than once during the term of this Agreement, elect to increase the maximum
Leverage Ratio to 4.00 to 1.00 for a period of three (3) consecutive fiscal
quarters in connection with an acquisition that involves the payment of
consideration by the Company and/or its Subsidiaries in excess of $75,000,000
occurring during the first of such three fiscal quarters. For purposes of
calculations under this Section 10.9(a), Consolidated Indebtedness shall not
include 75% of the principal amount of any mandatorily convertible unsecured
bonds, debentures, preferred stock or similar instruments in a principal amount
not to exceed $500,000,000 in the aggregate during the term of this Agreement
which are payable in no more than three years (whether by redemption, call
option or otherwise) solely in common stock or other common equity interests.

 

For purposes of calculations under this Section 10.9(a), prior to the
consummation of the Bengal Acquisition (or during the period from the Amendment
No. 5 Effective Date until the date that is 90 days after the termination of the
Bengal Acquisition Agreement), Consolidated Indebtedness shall not include
Specified Senior Notes Indebtedness; provided that (a) the release of the
proceeds of the Specified Senior Note Indebtedness to the Company and its
Subsidiaries is contingent upon the consummation of the Bengal Acquisition and,
pending such release, such proceeds are held in escrow (and, if the Bengal
Acquisition Agreement is terminated prior to the consummation of the Bengal
Acquisition or if the Bengal Acquisition is otherwise not consummated by the
date specified in the Specified Senior Notes Indenture, such proceeds shall be
promptly applied to satisfy and discharge all obligations of the Company and its
Subsidiaries in respect of the Specified Senior Notes Indebtedness) or (b) the
Specified Senior Notes Indenture contains a “special mandatory redemption”
provision (or other similar provision) or otherwise permits the Specified Senior
Notes Indebtedness to be redeemed or prepaid if the Bengal Acquisition is not
consummated by the date specified in the Specified Senior Notes Indenture (and
if the Bengal Acquisition Agreement is terminated in accordance with its terms
prior to the consummation of the Bengal Acquisition or the Bengal Acquisition is
otherwise not consummated by the date specified in the Specified Senior Notes
Indenture, the Specified Senior Notes Indebtedness is so redeemed or prepaid
within 90 days of such termination or such specified date, as the case may be).

 

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1.4           Schedule B to the Note Agreement is hereby amended to delete the
following definitions in their entirety:

 

“Acquisition”

 

“Leverage Holiday Period”

 

“Significant Acquisition”

 

“Significant Acquisition Election”

 

SECTION 2.  Representations and Warranties. Each of the Company and each
Guarantor represents and warrants that (a) the execution and delivery of this
letter has been duly authorized by all requisite corporate action on behalf of
the Company and such Guarantor, this letter has been duly executed and delivered
by an authorized officer of the Company and such Guarantor, and the Company and
such Guarantor has obtained all authorizations, consents, and approvals
necessary for the execution, delivery and performance of this letter and such
authorizations, consents and approvals are in full force and effect, (b) each
representation and warranty set forth in Section 5 of the Note Agreement (after
giving effect to the amendments in Section 1) and the other Transaction
Documents is true and correct in all material respects as of the date of
execution and delivery of this letter by the Company and such Guarantor 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 in all material respects as of such earlier date), (c) after giving
effect to the amendments in Section 1, no Event of Default or Default exists and
(d) concurrently with the effectiveness of this letter, each of the amendments
to Section 6.10(a) contained in the Primary Credit Facility that are conditioned
on amendments to the Note Agreement and the “LG Facility” will be effective.

 

SECTION 3.  Conditions to Effectiveness. The amendments described in Section 1
above shall become effective on the date (the “Effective Date”) when each of the
following conditions has been satisfied:

 

3.1          Documents. Each holder of a Note shall have received original
counterparts or, if reasonably satisfactory to the Required Holders, certified
or other copies of all of the following, each duly executed and delivered by the
party or parties thereto, in form and substance reasonably satisfactory to the
Required Holders, dated the date hereof unless otherwise indicated, and on the
date hereof in full force and effect:

 

(i)            counterparts of this letter executed by the Company, the
Guarantors and the Required Holders; and

 

(ii)           an Officer’s Certificate of the Company, in form and substance
reasonably satisfactory to the Required Holders, attaching a true and complete
copy of (a) an amendment No. 3 to the Third Amended and Restated Credit
Agreement, executed by the Company, the subsidiary borrowers party thereto,
JPMorgan Chase Bank, N.A., as administrative agent, and the financial
institutions party thereto as lenders and (b) the amendment to the “LG Facility
Agreement” (as defined in the Company’s most recent filings with the SEC).

 

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3.2          Amendment Fee. The Company shall have paid an amendment fee to each
holder of Notes equal to five basis points of the aggregate outstanding
principal amount of Notes held by each such holder as of the Effective Date,
which payment shall be made in the same manner and to the same accounts as for
payments of interest pursuant to the Note Agreement.

 

3.3           Proceedings. All corporate and other proceedings taken or to be
taken in connection with the transactions contemplated by this letter shall be
reasonably satisfactory to Prudential, and Prudential shall have received all
such counterpart originals or certified or other copies of such documents as it
may reasonably request.

 

SECTION 4.  Reference to and Effect on Note Agreement and Notes; Ratification of
Transaction Documents. Upon the effectiveness of the amendments in Section 1 of
this letter, each reference to the Note Agreement in any other Transaction
Document 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, the Notes and each other Transaction Document shall remain in full
force and effect and are hereby ratified and confirmed in all respects. Except
as specifically stated in this letter, the execution, delivery and effectiveness
of this letter shall not (a) amend the Note Agreement, any Note or any other
Transaction Document, (b) operate as a waiver of any right, power or remedy of
Prudential or any holder of the Notes, or (c) constitute a waiver of, or consent
to any departure from, any provision of the Note Agreement, any Note or any
other Transaction Document at any time. The execution, delivery and
effectiveness of this letter shall not be construed as a course of dealing or
other implication that Prudential or any holder of the Notes has agreed to or is
prepared to grant any consents or agree to any amendment to the Note Agreement
in the future, whether or not under similar circumstances.

 

SECTION 5.  Reaffirmation. Each Guarantor hereby consents to the foregoing
amendments to the Note Agreement and hereby ratifies and reaffirms all of its
payment and performance obligations, contingent or otherwise, under the Guaranty
Agreement and each other Transaction Document, after giving effect to such
amendments. Each Guarantor hereby acknowledges that, notwithstanding the
foregoing amendments, the Guaranty Agreement and each other Transaction Document
remains in full force and effect and is hereby ratified and confirmed. Without
limiting the generality of the foregoing, each Guarantor agrees and confirms
that the Guaranty Agreement continues to guaranty the Guaranteed Obligations (as
defined in the Guaranty Agreement) arising under or in connection with the Note
Agreement, as amended by this letter agreement, or any of the Notes.

 

SECTION 6.  Expenses. The Company hereby confirms its obligations under Section
16.1 of the Note Agreement in connection with the transactions hereby
contemplated, whether or not such transactions are consummated.

 

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SECTION 7.  Governing Law. THIS LETTER SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK EXCLUDING CHOICE OF LAW PRINCIPLES OF THE LAW OF SUCH
STATE THAT WOULD PERMIT THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN
SUCH STATE.

 

SECTION 8.  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 when 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.

 

[signature page follows]

 

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  Very truly yours,       PGIM, INC.       By: /s/ Dave Quackenbush        Vice
President       THE PRUDENTIAL INSURANCE
COMPANY   OF AMERICA       By: /s/ Dave Quackenbush        Vice President      
THE GIBRALTAR LIFE INSURANCE
CO.,   LTD.       By: Prudential Investment Management Japan     Co., Ltd. (as
Investment Manager)       By: PGIM, Inc.     (as Sub-Adviser)         By: /s/
Dave Quackenbush          Vice President       PAR U HARTFORD LIFE &
ANNUITY   COMFORT TRUST       By: Prudential Arizona Reinsurance Universal  
Company (as Grantor)       By: PGIM, Inc.     (as Investment Manager)        
By: /s/ Dave Quackenbush          Vice President

 

Amendment No. 6 to Private Shelf Agreement

 

 

 

  THE LINCOLN NATIONAL LIFE INSURANCE     COMPANY   FARMERS INSURANCE EXCHANGE  
MID CENTURY INSURANCE COMPANY   THE INDEPENDENT ORDER OF FORESTERS       By:
Prudential Private Placement Investors, L.P.     (as Investment Advisor)      
By: Prudential Private Placement Investors, Inc.     (as its General Partner)  
      By: /s/ Dave Quackenbush          Vice President

 

Amendment No. 6 to Private Shelf Agreement

 

 

 

The foregoing letter is

hereby accepted as of the

date first above written:

 

HILLENBRAND, INC.       By: /s/ Theodore S. Haddad, Jr.   Name: Theodore S.
Haddad, Jr.   Title: Vice President and Treasurer  

  

Amendment No. 6 to Private Shelf Agreement

 

 

 

BATESVILLE CASKET COMPANY, INC.   BATESVILLE MANUFACTURING, INC.   BATESVILLE
SERVICES, INC.       By: /s/ Theodore S. Haddad, Jr.   Name: Theodore S. Haddad,
Jr.   Title: Vice President and Treasurer       COPERION K-TRON PITMAN, INC.  
ROTEX GLOBAL, LLC   K-TRON INVESTMENT CO.   TERRASOURCE GLOBAL CORPORATION   RED
VALVE COMPANY, INC.       By: /s/ Theodore S. Haddad, Jr.   Name: Theodore S.
Haddad, Jr.   Title: Assistant Treasurer       COPERION CORPORATION       By:
/s/ Theodore S. Haddad, Jr.   Name: Theodore S. Haddad, Jr.   Title: Vice
President and Assistant Treasurer       PROCESS EQUIPMENT GROUP, INC.       By:
/s/ Theodore S. Haddad, Jr.   Name: Theodore S. Haddad, Jr.   Title: Treasurer  

  

Amendment No. 6 to Private Shelf Agreement