As of March 31, 1998
Xxxx X. Xxxxxxxxxx & Son, Inc.
0000 Xxxxx Xxxx
Xxx Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, President
Ladies and Gentlemen:
Reference is made to that certain Second Amended and
Restated Note Agreement dated as of January 24, 1997 (as amended
from time to time, the "Note Agreement") between Xxxx X.
Xxxxxxxxxx & Son, Inc., a Delaware corporation (the "Company"),
and The Prudential Insurance Company of America ("Prudential"),
pursuant to which the Company issued and sold and Prudential
purchased the Company's Series A, B, C, D, E and F Senior Notes.
Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Note
Agreement.
Pursuant to the request of the Company and in accordance
with the provisions of paragraph 11C of the Note Agreement, the
parties hereto agree as follows:
SECTION 1. Amendment. From and after the date this letter
becomes effective in accordance with its terms, the Note
Agreement is amended as follows:
1.1 Paragraph 4A(2) of the Note Agreement is deleted in its
entirety and the following is hereby substituted therefor:
"4A(2). Prepayment with Yield-Maintenance Amount
under Certain Circumstances. If amounts are to be
applied to the principal of the Notes pursuant to
paragraph 6F(iii) or 11U, interest owing thereon and to
the prepayment date and the Yield-Maintenance Amount,
if any, with respect to each Note shall be due and
payable on such date. Any partial prepayment of the
Notes pursuant to this paragraph 4A(2) shall be applied
in satisfaction of required prepayments in the inverse
order of their scheduled maturity dates."
1.2 Clause (x) of paragraph 5A of the Note Agreement is
amended to (i) delete in its entirety the phrase "Sections 8.2.1,
8.2.2, 8.2.4, 8.2.6, 8.2.7, 8.2.10, 8.2.11, 8.2.12, 8.2.14,
8.2.15 and 8.2.16 of the Bank Agreement" appearing therein and to
substitute therefor the following:
"Sections 9 and 10 of the Bank Agreement",
and (ii) to delete in its entirety subclause (A) thereof and to
substitute the following therefor:
"(A) no "Matured Default" (as defined in the Bank
Agreement has occurred and is continuing under the Bank
Agreement,"
1.3 Clause (xi) of paragraph 5A of the Note Agreement is
amended to delete in its entirety the phrase "the borrowing base
certificate and" appearing therein.
1.4 Paragraph 5B of the Note Agreement is amended to delete
in its entirety the phrase "the Collateral or" appearing in the
parenthetical contained in such paragraph 5B.
1.5 Paragraph 5I of the Note Agreement is hereby deleted in
its entirety and the following is hereby substituted herefor:
"5I. [Intentionally Omitted];"
1.6 Clause (f) of paragraph 6A of the Note Agreement is
hereby deleted in its entirety and the following is hereby
substituted therefor:
"(f) [Intentionally Omitted];"
1.7 Clause (vi) of paragraph 6B(2) of the Note Agreement is
hereby deleted in its entirety and the following is hereby
substituted therefor:
"(vi) [Intentionally Omitted];"
1.8 Paragraph M of the Note Agreement is deleted in its
entirety and the following is hereby substituted therefor:
"6M. Amendments to Certain Documents. The
Company will not consent to or permit any amendment,
supplement or other modification of any of the terms or
provisions contained in, or applicable to the Teachers
Note Agreement, the Bank Agreement or any document or
instrument evidencing or applicable to any Subordinated
Debt other than any such amendment, supplement or other
modification which:
(i) extends the date or reduces the
amount of any required repayment or
redemption,
(ii) causes the terms and provisions of
such agreement, document or instrument to
conform to and in any case not conflict with
the terms and provisions of this Agreement,
or
(iii) solely with respect to the Bank
Agreement and subject to the terms of
paragraphs 6R and 6S, increases the principal
amount of Debt thereunder or pricing
applicable thereto if no default or event of
default shall be continuing hereunder or
under the Bank Agreement at the time (or
immediately prior to the time) such
amendment, supplement or modification is
entered into (or series of related
amendments, modifications or supplements
entered into in concert),
without, in all cases, the consent of the Required
Holder(s), which consent shall not be unreasonably
withheld or delayed. Without limiting the generality
of the foregoing, the Company will not consent to or
permit any amendment, supplement or other modification
which has the effect of (a) increasing the interest
rate or fees under such agreement (other than the Bank
Agreement to the extent permitted by the immediately
preceding sentence), (b) increasing the amount of
obligations of the Company or any Subsidiary under such
agreement (other than the Bank Agreement to the extent
permitted by the immediately preceding sentence), (c)
amending the financial covenants contained in such
agreement or (d) with respect to the Teachers Note
Agreement, permitting any prepayment of obligations
under such agreement.
1.9 Paragraph 6R of the Note Agreement is hereby amended to
add to a new clause (g) thereto at the end thereof as follows:
"(g) Total assets of the Company on an
unconsolidated basis to be less than 75% of total
assets of the Company and its Subsidiaries on a
consolidated basis at any time."
1.10 Paragraph 6S of the Note Agreement is deleted in its
entirety and the following is hereby substituted therefor:
"6S. Subsidiary Indebtedness. The Company will
not permit any Subsidiary to create, assume, guarantee
or otherwise become liable in respect of any
Indebtedness (excluding any Indebtedness arising under
the Guarantees or any Bank Obligations of Subsidiaries
or any guaranty by Sunshine of the Company described in
paragraph 6B(2)(ii)) unless at the time such Subsidiary
becomes liable with respect to such Indebtedness and
after giving effect thereto Priority Debt shall not
exceed 15% of Consolidated Net Worth."
1.11 Clause (iii) of paragraph 6Q of the Note Agreement is
amended to add at the beginning thereof the following phrase "the
Bank Agreement or".
1.12 Clause (xv) of paragraph 7A of the Note Agreement is
amended to delete in its entirety the phrase "an `Event of
Default' as defined in the Bank Agreement" and to substitute
therefor the phrase "a `Matured Default' as defined in the Bank
Agreement".
1.13 Clauses (xviii) and (xx) of paragraph 7A of the Note
Agreement are hereby deleted in their entirety and clause (xix)
of the Note Agreement is hereby renumbered to be clause (xviii)
of paragraph 7A of the Note Agreement.
1.14 Paragraph 10B of the Note Agreement is hereby amended
to:
(i) delete in their entirety the following defined
terms appearing therein: "Collateral Agent",
"Collateral Agency Agreement", "Collateral Documents",
and "Security Agreement", and
(ii) to amend and restate in their entirety the
defined terms listed below to read as set forth below:
"Ancillary Agreements" shall mean this Agreement,
the Notes, the Guaranties and the other agreements,
documents, certificates and instruments now or
hereafter executed or delivered by the Company, any
Subsidiary or any Affiliate (or any successor of such
Person) in connection with this Agreement."
"Bank Agent" shall mean U.S. Bancorp Ag Credit,
Inc., a Colorado corporation, in its capacity as agent
under the Bank Agreement.
"Bank Agreement" shall mean that certain Credit
Agreement dated as of March 31, 1998 among the Company,
Sunshine, Quantz and JBS International, Inc. as
borrowers, and U.S. Bancorp Ag Credit, Inc., LaSalle
National Bank and KeyBank National Association as
lenders and the Bank Agent as agent for such lenders,
together with the "Financing Agreements" (as defined
therein), all as amended, modified and in effect from
time to time with the consent of the Required
Holder(s)."
"Bank Obligations" shall mean the "Liabilities" as
defined in the Bank Agreement (which shall include
additional advances under the Bank Agreement as amended
from time to time whether or not permitted under the
Bank Agreement as of the date hereof but subject to the
restrictions set forth in paragraph 6M) as in effect on
the date hereof and with such amendments thereto as the
Required Holders may consent to in writing.
"Banks" shall mean U.S. Bancorp Ag Credit, Inc.,
LaSalle National Bank and KeyBank National Association
and the Bank Agent in its capacity as such under the
Bank Agreement, and their respective successor and
assigns and any other party that becomes a lender under
the Bank Agreement."
"Fiscal Year" shall mean any period of twelve
consecutive calendar months ending on the last Thursday
of June; references to a Fiscal Year with a number
corresponding to any calendar year (e.g., the "1995
Fiscal Year") refer to the Fiscal Year ending on the
date which is the last Thursday in June occurring
during such calendar year."
1.15 Paragraph 11U of the Note Agreement is amended to
delete therefrom all references to "the Collateral Agent" and to
delete the reference to the "Collateral Agency Agreement"
appearing therein and substitute therefor a reference to
"paragraph 4A(2) of this Agreement".
1.16 Exhibit M to the Note Agreement is hereby amended and
restated in the form of the Exhibit M attached hereto.
SECTION 2. Release of Collateral; Consent. Prudential
hereby authorizes Bank of America Illinois, in its capacity as
Collateral Agent under the Intercreditor and Collateral Agency
Agreement dated as of January 24, 1997, to release any Liens held
by it for the benefit of Prudential securing the Notes and
obligations under the Note Agreement simultaneously with the
release and termination of all "Collateral Documents" (as defined
in the Note Agreement prior to the effectiveness of this letter).
Upon the effectiveness of this letter, Prudential consents to
(a) the amendment dated as of the date hereof to the Teachers
Note Agreement in the form of Attachment B hereto and (b) the
entry by the Company and its Subsidiaries into the Bank Agreement
in the form of Attachment D hereto.
SECTION 3. Conditions Precedent. This letter shall become
effective as of the date first above written upon the last to
occur of (i) the return by the Company to Prudential of a
counterpart hereof duly executed by the Company, the other
signatories listed below and Prudential, (ii) the execution and
delivery of a guaranty of the Notes by JBS International, Inc., a
Barbados corporation, in the form attached hereto as Attachment C
together with a favorable legal opinion from Jenner & Block
addressed to Prudential and in form and substance satisfactory to
Prudential covering the matters stated in the second sentence of
Sections 3.2 and 3.3 (as to applicable laws) of such guaranty,
and (iii) the effectiveness of the Credit Agreement attached
hereto as Attachment D. The letter should be returned to:
Prudential Capital Group, Xxx Xxxxxxxxxx Xxxxx, Xxxxx 0000,
Xxxxxxx, Xxxxxxxx 00000, Attention: Wiley X. Xxxxx.
SECTION 4. Representations and Warranties. The Company
represents and warrants to Prudential on the date hereof and as
of the date this letter becomes effective in accordance with its
terms (and the parties hereto agree that the following
representations and warranties shall be deemed to have been made
pursuant to the Note Agreement for all relevant purposes hereof):
4.1 Enforceability. This letter has been duly executed and
delivered by the Company, and the Note Agreement (before and
after the effectiveness of this letter) constitutes a legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms except as such
enforcement may be limited by bankruptcy, insolvency, fraudulent
transfer or similar laws of general application relating to
creditors' rights.
4.2 No Defaults. No Default or Event of Default has
occurred and is continuing, and no default has occurred and is
continuing under the Bank Agreement or under the Teachers Note
Agreement.
4.3 No Misstatement. This letter does not contain any
misstatement of a material fact necessary to make the statement
or statements of the Company contained herein not misleading, and
the Company has disclosed to Prudential all facts or
circumstances of which the Company is aware following due and
diligent inquiry which are material to, or could adversely affect
in any way, the purpose or subject matter of this letter and/or
the consummation of the terms and conditions hereof.
4.4 Other Documents. The Company has provided Prudential
with true and correct copies of the Bank Agreement and the
amendment dated as of the date hereof to the Teachers Note
Agreement both as in effect on the date hereof.
SECTION 5. Reference to and Effect on Note Agreement. Upon
the effectiveness of 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.
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.
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. 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.
Very truly yours,
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Xxxx Xxxxxxxxxxx
-----------------
Senior Vice President
cc: Xxxxxxx X. Xxxxxxx ---------------------
Jenner & Block
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
AGREED AND ACCEPTED:
XXXX X. XXXXXXXXXX & SON, INC.
By: Xxxx X. Xxxxxx
---------------
Title: Executive Vice President,
Finance and Chief Financial
Officer
---------------------------
The guaranties of the Notes executed
by the undersigned are hereby
ratified and confirmed in all respects:
SUNSHINE NUT CO., INC.
By: Xxxxxxx X. Xxxxxxxxx
---------------------
Title: Assistant Secretary
-------------------
QUANTZ ACQUISITION CO., INC.
By: Xxxxxxx X. Xxxxxxxxx
---------------------
Title: Assistant Secretary
-------------------
