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EXHIBIT 10(X)
AMENDMENT AGREEMENT
This AMENDMENT AGREEMENT (as amended, restated or otherwise modified from
time to time, this "Amendment Agreement") dated as of August 8, 1997, is among
Thorn Apple Valley, Inc. (the "Company"), COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., NEW YORK BRANCH ("Rabobank"), Old Kent Bank &
Trust Co. ("Old Kent"), National City Bank ("National City"), Xxxxxx Trust and
Savings Bank ("Xxxxxx Bank") (each of such banks, a "Bank" and such banks
collectively, the "Banks"), Allstate Life Insurance Company ("Allstate"),
Principal Mutual Life Insurance Company ("Principal Mutual") and Great-West
Life & Annuity Insurance Company ("Great-West") (each of such insurance
companies, a "Noteholder," and such insurance companies collective, the
"Noteholders").
RECITALS
WHEREAS, the Company is party to an Amended and Restated Credit Agreement
(the "Credit Agreement") dated as of September 11, 1996 with the Banks, as the
Lenders, and Rabobank, as the Agent for the Lenders, pursuant to which the
Banks agreed to provide the Company with a $90,000,000 revolving credit
facility;
WHEREAS, the Company is party to a Senior Secured Seasonal Line of Credit
Agreement dated as of August 5, 1997 (the "Seasonal Line of Credit Agreement")
with the Banks pursuant to which the Banks agreed to provide the Company with a
$15,000,000 seasonal line of credit facility;
WHEREAS, the Company is party to a Note Agreement dated as of April 1, 1994,
as amended pursuant to an Amendment Agreement dated as of September 11, 1996
(as amended, the "April 1 Note Agreement"), with Allstate pursuant to which
Allstate purchased an aggregate of $15,000,000 of senior notes of the Company;
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WHEREAS, the Company is party to a Note Agreement dated as of October 1,
1994, as amended pursuant to an Amendment Agreement dated as of September 11,
1996 (as amended, the "October 1 Note Agreement"), with Allstate pursuant to
which Allstate purchased an aggregate of $8,000,000 of senior notes of the
Company;
WHEREAS, the Company is party to a Note Agreement dated as of May 15,
1995, as amended pursuant to an Amendment Agreement dated as of September 11,
1996 (as amended, the "May 15 Note Agreement" and together with the April 1
Note Agreement and the October 1 Note Agreement, the "Note Agreements"), with
the Noteholders pursuant to which the Noteholders purchased an aggregate of
$42,500,000 of senior notes of the Company;
WHEREAS, the Company is party to a Reimbursement Agreement dated as of
December 1, 1993, as amended on September 11, 1996 (as amended, the "Old Kent
IRB Reimbursement Agreement"), with Old Kent relating to that certain
Irrevocable Transferable Letter of Credit No. 8934 dated December 8, 1993,
issued by Old Kent to PNC Bank, Ohio, National Association, as trustee;
WHEREAS, the Company is party to Reimbursement Agreements dated as of
August 25, 1995, May 25, 1995, July 25, 1995 and July 28, 1988, respectively,
as each such Reimbursement Agreement was amended on September 11, 1996 (as
amended, collectively, the "Old Kent Workers Compensation Reimbursement
Agreements"), with Old Kent relating to that certain Irrevocable Transferable
Letter of Credit No. 10064 dated August 28, 1995, issued by Old Kent to United
Pacific Insurance Company, that certain Irrevocable Transferable Letter of
Credit No. 9911 dated May 26, 1995, issued by Old Kent to the Louisiana
Department of Labor Office of Worker's Compensation, that certain Irrevocable
Transferable Letter of Credit No. 10009 dated July 26, 1995, issued by Old Kent
to United Pacific Insurance Company, and that certain
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Irrevocable Transferable Letter of Credit No. 5993 dated September 21, 1988,
issued by Old Kent to the Bureau of Worker's Disability Compensation, Office of
the Director;
WHEREAS, the Company, as assignee of the rights and obligations of Xxxxxxxx
Companies, Incorporated, is party to a Production Agreement (as amended on May
17, 1996), an Agreement to Supply Boneless Ham Muscles and an Equipment
Agreement, each dated October 14, 1993 (collectively, the "IBP Agreements"),
with IBP, Inc. ("IBP"), pursuant to which (i) IBP constructed a ham processing
facility in Council Bluffs, Iowa (the "Council Bluffs Facility"), (ii) the
Company furnished all of the production equipment used in such facility, (iii)
IBP became obligated to produce at such facility, on an exclusive basis, all
boneless ham products which the Company may require, and (iv) the Company
agreed to pay and/or reimburse IBP for all operating and fixed costs incurred
at the Council Bluffs Facility and to pay IBP an annual management fee;
WHEREAS, the Company has determined that it is in its best interest to
discontinue operations at the Council Bluffs Facility and to terminate the IBP
Agreements as of the fourth quarter of the Company's 1997 fiscal year (the
"Fourth Quarter");
WHEREAS, in connection with the discontinuation of operations at the
Council Bluffs Facility and the termination of the IBP Agreements, the Company
incurred a restructuring charge during the Fourth Quarter in an amount not to
exceed $5,000,000 (the "Restructuring Charge");
WHEREAS, the incurrence of the Restructuring Charge by the Company has
caused the Company to fail to comply with certain covenants contained in the
Credit Agreement, the Seasonal Line of Credit Agreement, the Note Agreements,
the Old Kent IRB Reimbursement Agreement, the Old Kent Workers Compensation
Reimbursement Agreements (collectively, the "Loan Agreements") and may cause
the Company to fail to comply in the future with other covenants and agreements
contained in the Loan Agreements;
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WHEREAS, the Company, the Banks and the Noteholders desire to make an
agreement that the Restructuring Charge shall not be taken into account in
determining the Company's compliance with the terms, conditions and covenants
contained in the various Loan Agreements;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the sufficiency and receipt of which are hereby
acknowledged, the parties to this Amendment Agreement hereby agree as follows:
1. Exclusion of Restructuring Charge. Notwithstanding anything in any of
the Loan Agreements to the contrary, from and after the Effective Date (as
defined below) the Restructuring Charge shall not be taken into account in
determining the Company's compliance with any of the covenants contained in the
Loan Agreements, and calculations necessary to determine the Company's
compliance with any applicable financial covenants contained in the Loan
Agreements shall exclude the Restructuring Charge. If the Company incurs any
restructuring charge in excess of the Restructuring Charge, such additional
restructuring charge shall be included in connection with such determination.
2. Conditions Precedent. This Amendment Agreement shall become effective
when all of the conditions set forth below have been satisfied:
(a) Each of the Banks and the Noteholders shall have received all of
the following, each duly executed and dated the date of its delivery and in
form and substance satisfactory to each of the Banks and the Noteholders, and
each in sufficient number of signed counterparts to provide one for each of the
Banks and Noteholders;
(i) Counterpart originals of this Amendment Agreement, duly
executed by the Company, the Banks and the Noteholders; and
(ii) a certificate from an officer of the Company certifying
that, other than as a result of the Restructuring Charge, no Event of Default
or Default has occurred and is
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continuing under any of the Loan Agreements and that the representations and
warranties contained in the Loan Agreements are true and correct as of the date
hereof, after giving effect to the transactions contemplated hereby.
(b) The Company shall have provided to each of the Noteholders a
copy of the fully executed and effective Seasonal Line of Credit Agreement.
(c) The Company shall have provided to each of the Noteholders a
calculation of the prepayment premium owed to each of the Noteholders under
Section 2.1(c) of each of the Note Agreements arising from the payment of the
Scheduled Amount (as defined in the applicable Note Agreements).
3. Effectiveness of this Amendment Agreement. Upon satisfaction of the
conditions precedent set forth in Section 2 hereof, this Amendment Agreement
shall be deemed to be effective as of the date of the Restructuring Charge (the
"Effective Date").
4. Miscellaneous. This Amendment Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Illinois. This
Amendment Agreement may be executed in counterparts, and by different parties
on different counterparts, each of which shall constitute one and the same
agreement. Any reference to any Loan Agreement after the date hereof shall be
deemed to refer to such Loan Agreement, as amended hereby, unless expressly
stated otherwise. The Loan Agreements, as amended hereby, shall remain in full
force and effect.
This Amendment Agreement constitutes the final entire agreement by the
parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, and discussions, whether written or
oral.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment
Agreement to be executed by their duly authorized officers as of the date first
above written.
THORN APPLE VALLEY, INC.
By: /s/ Xxxxx Xxxxxxx
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Title: Vice President Finance and
Administration
COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., NEW YORK BRANCH
By: /s/ Xxxxxxxx X. Xxxx
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Title:Vice President
By: /s/ W. Xxxxxxx Xxxxxxx
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Title:Vice President, Manager
OLD KENT BANK & TRUST CO.
By: /s/ Xxxxxxx X'Xxxxxx
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Title:Vice President
NATIONAL CITY BANK
By: /s/ Xxxxxxxx X. Xxxx
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Title:Vice President
XXXXXX TRUST AND SAVINGS BANK
By: /s/ Xxxx X. Xxxxxxxx
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Title:Vice President
[signatures continued on next page]
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[signatures continued from previous page]
ALLSTATE LIFE INSURANCE COMPANY
By: /s/ Authorized Signature
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Title:
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By: /s/ Authorized Signature
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Title:
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PRINCIPAL MUTUAL LIFE INSURANCE
COMPANY
By: /s/ Xxxxx Xxxxx
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Title:Counsel
By: /s/ Xxxxxxxxxxx Xxxxxxxxx
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Title:Counsel
GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY
By: /s/ Xxxxx X. Xxxxxxx
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Title:Assistant Vice President
By: /s/ X. X. Xxxx
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Title:Assistant Vice President
AMENDMENT AGREEMENT
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