EXECUTION COPY 3/31/98
NY3:#7155570v4
XXXX X. XXXXXXXXXX & SON, INC.
0000 Xxxxx Xxxx
Xxx Xxxxx Xxxxxxx, Xxxxxxxx 00000
New York, New York
As of March 31, 1998
Re: Amendment No. 3 to Note Purchase Agreement
dated as of August 30, 1995
Teachers Insurance and Annuity
Association of America
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Note Purchase Agreement dated
as of August 30, 1995 (as in effect on the date hereof, the
"Agreement") between Xxxx X. Xxxxxxxxxx & Son, Inc., a Delaware
corporation (the "Company"), and Teachers Insurance and Annuity
Association of America (the "Noteholder"), pursuant to which the
Noteholder purchased $10,000,000 aggregate principal amount of
the Company's 8.30% Senior Notes due 2005 (the "Senior Notes")
and $15,000,000 aggregate principal amount of the Company's
9.38% Senior Subordinated Notes due 2005 (the "Subordinated
Notes" and, together with the Senior Notes, the "Notes").
The Company has requested that the Noteholder agree,
and the Noteholder is willing, to amend various provisions of
the Agreement, all on the terms and conditions of this
Amendment.
Accordingly, in consideration of the premises and the
mutual agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Unless otherwise defined herein,
all terms used herein which are defined in the Agreement (as
amended hereby) shall have their respective meanings as therein
defined. In addition, as used herein, "Prudential Amendment"
means the amendment letter dated as of March 31, 1998 amending
the Amended and Restated Prudential Note Purchase Agreement.
2. Amendments to Agreement. Subject to the
satisfaction of the conditions to effectiveness specified in Section 5
below, the Agreement is amended as follows:
2.1. Deletion of 5.9. 5.9 of the Agreement is
deleted in its entirety and 5.10 of the Agreement is re-
numbered as the new 5.9 of the Agreement (and all references in
the Agreement to "5.10" shall be deemed to be references to
such new 5.9).
2.2. Amendment to 8.8. 8.8 of the Agreement is
amended to read in its entirety as follows:
"8.8. Subsidiary Debt. (a) The Company will
not permit any Subsidiary to create, assume, guarantee
or otherwise become liable in respect of any
Indebtedness (excluding any Indebtedness arising with
respect to any Guaranty or any guaranty or incurrence
of liability by such Subsidiary in respect of
obligations of the Company under the Existing
Indebtedness Documents (provided that such Subsidiary
has executed and delivered a Guaranty)) unless at the
time such Subsidiary becomes liable with respect
thereto Priority Debt shall not exceed 15% of Tangible
Net Worth.
(b) The Company shall not permit any
Subsidiary to create, assume, guarantee or otherwise
become liable in respect of any Indebtedness of the
Company (including without limitation any Indebtedness
of the Company under the Existing Indebtedness
Documents) unless such Subsidiary shall execute and
deliver a Guaranty to each holder of Senior Notes and
a Guaranty to each holder of Subordinated Notes on or
prior to the date of such creation, assumption,
guarantee or incurrence of other liability.".
2.3. Amendments to 9.3. 9.3(B) and (C) of the
Agreement are amended to read in their entirety as follows:
"(B) Indebtedness outstanding under or in respect
of the Amended and Restated Prudential Note Purchase
Agreement and the Existing Prudential Notes issued
thereunder in an aggregate original principal amount
not exceeding $33,750,000,
(C) Indebtedness represented by the Senior Notes
and the Subordinated Notes,"
2.4. Amendments to 9.6. 9.6(A) and (I) of the
Agreement are amended to read in their entirety as follows:
"(A) Liens existing on the date hereof securing
Indebtedness of the Company outstanding on the date
hereof, as specified in Exhibit C hereto;"
"(I) [Intentionally Omitted];".
2.5. Amendments to 9.7. 9.7 is amended by (i)
inserting the text "; Certain Amendments to Bank Agreement" to
the title thereof, (ii) inserting the text "(a)" immediately
prior to the first paragraph thereof and (iii) adding the
following new paragraph (b) at the end thereof:
"(b) Subject to the terms of 9.3, 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 Bank
Agreement if the effect thereof would be to increase
the principal amount of Indebtedness thereunder and,
at the time of such amendment, supplement or other
modification or immediately prior thereto, a Default
or Event of Default shall have occurred and be
continuing or a "Default" or a "Matured Default" (each
as defined in the Bank Agreement) shall have occurred
and be continuing under the Bank Agreement."
2.6. Amendments to 10.3. 10.3(B) and (C) of the
Agreement are amended to read in their entirety as follows:
"(B) Indebtedness outstanding under or in respect
of the Amended and Restated Prudential Note Purchase
Agreement and the Existing Prudential Notes issued
thereunder in an aggregate original principal amount
not exceeding $33,750,000,
(C) Indebtedness represented by the Senior Notes
and the Subordinated Notes,"
2.7. Amendments to 10.6. 10.6(A) and (I) of the
Agreement are amended to read in their entirety as follows:
"(A) Liens existing on the date hereof securing
Indebtedness of the Company outstanding on the date
hereof, as specified in Exhibit C hereto;"
"(I) [Intentionally Omitted];".
2.8. Amendments to 10.7. 10.7 is amended by (i)
inserting the text "(a)" immediately prior to the first
paragraph thereof and (ii) adding the following new paragraph
(b) at the end thereof:
"(b) Subject to the terms of 10.3, 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 Bank
Agreement if the effect thereof would be to increase
the principal amount of Indebtedness thereunder and,
at the time of such amendment, supplement or other
modification or immediately prior thereto, a Default
or Event of Default shall have occurred and be
continuing or a "Default" or a "Matured Default" (each
as defined in the Bank Agreement) shall have occurred
and be continuing under the Bank Agreement."
2.9. Amendments to 11. (A) The following
definitions in 11 of the Agreement are amended and restated to
read in their entirety as follows:
"'Bank Agreement' shall mean that certain Credit
Agreement dated as of March 31, 1998 by and among the
Company, Sunshine, Quantz and JBS International,
collectively as borrowers, U.S. Bancorp Ag Credit, Inc.,
Key Bank and LaSalle National Bank, as lenders, and U.S.
Bancorp Ag Credit, Inc., as agent for such lenders, and the
Notes referred to therein, as in effect on the date hereof
and as amended, modified and in effect from time to time.
The term 'Bank Agreement' shall continue to refer to the
foregoing Credit Agreement and other instruments following
any assignment by any such lender pursuant to the
provisions of Section 13.24 thereof or any resignation by
the agent thereunder pursuant to the provisions of Section
12.7 thereof so long as in effecting such assignment or
resignation such lender or agent is acting individually and
not in concert with the other lenders thereunder."
"'Banks' shall mean U.S. Bancorp Ag Credit, Inc., Key
Bank and LaSalle National Bank, and U.S. Bancorp Ag Credit,
Inc., in its capacity as agent under the Bank Agreement,
and their respective successors and assigns and any other
party that becomes a lender under the Bank Agreement."
"'EPA Matter' shall mean any event or condition in
respect of the environment or any environmental law, the
existence of which the Company or any of its Affiliates
would be required to notify any Lender or the Agent
pursuant to the Bank Agreement."
"'Guaranty' shall mean a Guaranty of the Senior Notes
from time to time or of the Subordinated Notes from time to
time by Sunshine, Quantz, JBS International or any other
Subsidiary of the Company, in each case substantially in
the form of Exhibit G (with such changes as may be agreed
by the Required Holders)."
"'Senior Indebtedness' shall mean (subject to the next
succeeding sentence) (i) all Liabilities (as such term is
defined in the Bank Agreement as in effect from time to
time or in any extension or renewal thereof, or the
equivalent obligations under any refunding or refinancing
thereof permitted pursuant to 10.3(B)(i)) and (ii) all
principal, interest and premium (if any) and fees and
expenses on or in respect of (x) the Amended and Restated
Prudential Note Purchase Agreement and the Existing
Prudential Notes issued thereunder, each as in effect from
time to time (collectively, the "Prudential Obligations"),
(y) this Agreement (as this Agreement relates to the Senior
Notes) and the Senior Notes and (z) any Senior Funded Debt
incurred in compliance with 9.3(D) and 10.3(D), provided
that (A) the aggregate outstanding principal amount (and
undrawn face amount in the case of letters of credit) of
the 'Liabilities' under the Bank Agreement included in
Senior Indebtedness (as so defined) shall not exceed
$70,000,000 and (B) the aggregate original principal amount
of the Prudential Obligations included in Senior
Indebtedness shall not exceed $33,750,000. With respect to
interest, the term "Senior Indebtedness" shall include any
interest accruing for a period of two years after the date
of any filing by or against the Company of any bankruptcy,
insolvency or similar proceeding, whether or not allowed as
a claim in any such proceeding.".
(B) 11 of the Agreement is further amended by adding
the definition in its appropriate alphabetic location:
"'JBS International' shall mean JBS International,
Inc., a Barbados corporation."
(C) 11 of the Agreement is further amended by
deleting the definitions of "Cash Management Liabilities",
"Collateral Agency Agreement", "Collateral Documents", "Security
Agreement" and "Specified Letter of Credit Fees".
(D) The definition of "Indebtedness" in 11 of the
Agreement is amended by deleting the last sentence thereof.
2.10. Amendment to 12.1. 12.1 of the Agreement is
amended by deleting the word "or" at the end of Subsection (P)
thereof, deleting Subsections (Q) and (R) thereof and amending
Subsection (O) thereof to read as follows:
"(O) a 'Matured Default' (as defined in the Bank
Agreement) shall occur under the Bank Agreement or an
'Event of Default' (as defined in the Amended and
Restated Prudential Note Purchase Agreement) shall
occur under the Amended and Restated Prudential Note
Purchase Agreement (whether or not any such 'Matured
Default' or 'Event of Default' shall be waived);"
2.11. Amendment to Exhibits A-1 and A-2. Each of
Exhibit A-1 and Exhibit A-2 of the Agreement is amended by
deleting the second sentence from the second paragraph thereof
and replacing said sentence with the following:
"Payment of the principal of, interest on and any
Make-Whole Amount with respect to this Note has been
guaranteed by (i) Sunshine Nut Co., Inc. pursuant to a
Guaranty Agreement dated as of August 30, 1995, (ii) Quantz
Acquisition Co., Inc. pursuant to a Guaranty Agreement
dated as of January 24, 1997 and (iii) JBS International,
Inc. pursuant to a Guaranty Agreement dated as of March 31,
1998, and may also be guaranteed by certain other
subsidiaries of the Company."
2.12. Amendment to Exhibit J. Exhibit J of the
Agreement is amended by deleting Section A therefrom and
replacing it with the following:
"A. Bank Agreement
Any Matured Default (as defined therein) arising
under the following clauses of the definition of
such term:
(a), (b), (c) or (d) (to the extent
such event arises from a breach of Sections
9.6, 10.1 through 10.6, inclusive, or 10.10
of the Bank Agreement)."
Section 3. Amendment to Outstanding Notes. Each outstanding
Series A Note is amended to reflect the changes made to Exhibit
A-1 to the Agreement as set forth in 2.11 above, and each
outstanding Series B Note is amended to reflect the changes made
to Exhibit A-2 to the Agreement as set forth in 2.11 above.
Section 4. Representations and Warranties. The Company
represents and warrants to the Noteholder on the date hereof and
as of the Effective Date as follows (and the parties hereto
agree that the following representations and warranties shall be
deemed to have been made pursuant to the Agreement for all
relevant purposes thereof):
4.1. Power and Authority. The Company has all
requisite corporate power and authority to execute and deliver
this Amendment and to perform the Agreement as amended hereby
(the "Amended Agreement") and this Amendment has been duly
authorized by all necessary corporate action on the part of the
Company.
4.2. Enforceability. This Amendment has been duly
executed and delivered by the Company, and the Amended Agreement
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 transfers or similar laws of general
application relating to creditors' rights.
4.3. No Conflicts. Neither the execution nor
delivery of this Amendment, nor fulfillment of nor compliance
with the terms and provisions hereof and of the Amended
Agreement will conflict with, or result in the breach of the
terms, conditions or provisions of, or constitute a default
under, or result in any violation of, or result in the creation
of any Lien upon any of the properties or assets of the Company
pursuant to, the charter or by-laws of the Company, any award of
any arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which the Company is subject.
4.4. Governmental Authorizations. No consent,
approval or authorization of, or registration, filing or
declaration with, any Governmental Body is required for the
validity of the execution and delivery of this Amendment or for
the performance by the Company of the Amended Agreement.
4.5. 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 Amended and
Restated Prudential Note Purchase Agreement.
4.6. No Misstatement. This Amendment does not contain
any misstatement of a material fact or fail to state a material
fact necessary to make the statement or statements of the
Company contained herein not misleading, and the Company has
disclosed to the Noteholder 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 Amendment and/or the
consummation of the terms and conditions hereof.
4.7. No Change. Since June 30, 1997, there has been
no material adverse change in the assets or the financial
condition of the Company and its Subsidiaries taken as a whole.
4.8. Other Documents. The Company has provided the
Noteholder with true and correct copies of the Bank Agreement,
the Amended and Restated Prudential Note Purchase Agreement and
the Prudential Amendment, each as in effect on the date hereof.
5. Conditions to Effectiveness. This Amendment
shall become effective as of the date (the "Effective Date")
when the following conditions shall have been satisfied:
5.1. Amendment. This Amendment shall have been duly
executed and delivered by the Company and the Noteholder, and
duly acknowledged by Sunshine and Quantz.
5.2 Other Documents. The Noteholder shall have
received (a) a Guaranty in favor of the holders of the Senior
Notes from time to time and a Guaranty in favor of the holders
of the Subordinated Notes from time to time, in each case duly
executed and delivered by JBS International, (b) each of the
documents specified as Items 10 and 11 in Exhibit 8A to the Bank
Agreement and (c) a legal opinion addressed to the Noteholder
and in form and substance satisfactory to the Noteholder
covering the matters stated in the second sentence of Section
3.2 and in the second sentence of Section 3.3 (as to applicable
laws) of the Guaranties referred to above.
6. Consent. As of the Effective Date the Noteholder
hereby consents to (a) the amendment of the Amended and Restated
Prudential Note Purchase Agreement as provided by the Prudential
Amendment, (b) the entry by the Company and its Subsidiaries
into the Bank Agreement and (c) the termination of the
Collateral Agency Agreement (as defined in the Agreement
immediately prior to the Effective Date) and the release of all
collateral and Liens thereunder.
7. Miscellaneous.
7.1. Ratification; Waiver. The Agreement, except as
amended pursuant hereto, is in all respects ratified and
confirmed, and the terms, covenants and agreements thereof shall
remain in full force and effect.
7.2. References to Agreement and Notes. From and
after the Effective Date, all references to the Agreement in the
Agreement and in the Notes shall be deemed to be references to
the Agreement as amended by this Amendment.
7.3. Governing Law. This Amendment shall be
construed in accordance with and governed by the laws of the
State of New York.
7.4. Execution in Counterparts. This Amendment may
be executed in counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the
same instrument.
If you are in agreement with the foregoing, please
sign the form of acceptance in the space provided below
whereupon this Amendment shall become a binding agreement
between you and the Company.
Very truly yours,
XXXX X. XXXXXXXXXX & SON, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------
Title: Executive Vice President,
Finance and Chief Financial
Officer
---------------------------
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By: /s/ Xxxxx X. Xxxxxx
--------------------------
Title: Associate Director
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ACKNOWLEDGED AND AGREED:
SUNSHINE NUT CO.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Title: Assistant Secretary
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QUANTZ ACQUISITION CO., INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Title: Assistant Secretary
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