Document:

exv4w1

 

Exhibit 4.1

Execution Copy

 

JOHN B. SANFILIPPO & SON, INC.

 

LIMITED WAIVER

and

THIRD AMENDMENT

Dated as of May 31, 2007

to

Note Purchase Agreement

Dated as of December 16, 2004

 

Re: $65,000,000 Senior Notes

Due December 1, 2014

 

 

 

LIMITED WAIVER

and

THIRD AMENDMENT TO NOTE PURCHASE AGREEMENT

     This Limited Waiver and Third Amendment, dated as of May 31, 2007 (this “Amendment”), to the
Note Purchase Agreement, dated as of December 16, 2004, is between John B. Sanfilippo & Son, Inc.,
a Delaware corporation (the “Company”), and each of the institutions which is a signatory to this
Amendment (collectively, the “Noteholders”).

Recitals:

     A. The Company and certain of the Noteholders have heretofore entered into the Note Purchase
Agreement, dated as of December 16, 2004, as amended by the Limited Waiver and First Amendment to
Note Purchase Agreement, dated as of February 6, 2006, the Limited Waiver to Note Purchase
Agreement, dated as of May 5, 2006, the Limited Waiver and Second Amendment, dated as of July 25,
2006, the Limited Waiver, dated as of November 13, 2006, and the Limited Waiver, dated as of
November 28, 2006 (such Note Purchase Agreement, as so amended, the “Note Agreement”).
Capitalized terms used herein and not otherwise defined shall have the meaning given in the Note
Agreement.

     B. The Company has advised the Noteholders (a) that Events of Default have occurred and are
continuing under Section 11(c) of the Note Agreement as a result of (i) the default by the Company
in the compliance with the provisions of Section 10.1(e) of the Note Agreement as of the end of the
fiscal months ended February 2, 2007, March 1, 2007, March 29, 2007 and May 3, 2007, (ii) the
default by the Company in the compliance with the provisions of Section 10.1(d) of the Note
Agreement as of the end of the Fiscal Quarter ended March 29, 2007, and (b) that an Event of
Default will (absent this Amendment) occur under Section 11(c) of the Note Agreement as a result of
the default by the Company in the compliance with the provisions of Section 10.1(e) of the Note
Agreement as of the end of the fiscal month ending May 31, 2007 (the “Existing Note Agreement
Covenant Defaults”).

     C. The Company has further advised the Noteholders that Events of Default exist or will
(absent this Amendment) exist under
Section 10.1(f) of the Note Agreement (the “Existing
Cross-Defaults” and, together with the Existing Note Agreement Covenant Defaults, the “Existing
Defaults”) as a result of (a) Matured Defaults (as defined in the Credit Agreement) under the
Credit Agreement as a result of (i) the default by the Company in the compliance with the
provisions of Section 5.6(a) of the Credit Agreement as of the fiscal months ended February 2,
2007, March 1, 2007, March 29, 2007 and May 3, 2007, and (ii) the Existing Defaults and (b) a
Matured Default that will (absent the waiver under the Credit Agreement referred to in Section 5(b)
below) exist under the Credit Agreement as a result of the default by the Company in the compliance
with the provisions of Section 5.6(a) of the Credit Agreement as of the fiscal month ending May 31,
2007 (the “Credit Agreement Defaults”).

     D. The Existing Defaults and the Credit Agreement Defaults have caused a Sharing Period (as
defined in the Intercreditor Agreement) to commence under the Intercreditor Agreement (the
“Existing Sharing Period”) on March 19, 2007, the earliest Sharing Date (as

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defined in the Intercreditor Agreement) to occur as a result of any Existing Default or Credit
Agreement Default.

     E. The Company has requested that the Noteholders waive the Existing Defaults and agree that
the Existing Sharing Period, to the extent it was caused by the Existing Defaults and the Credit
Agreement Defaults, shall end as of its commencement date. Subject to the terms and conditions
hereof, and effective as provided herein, and provided that the Company agrees to the amendments to
the Note Agreement as set forth in this Amendment, the Noteholders are willing to agree to such
requests.

     F. All requirements of law have been fully complied with and all other acts and things
necessary to make this Amendment a valid, legal and binding instrument according to its terms for
the purposes herein expressed have been done or performed.

     NOW, THEREFORE, in consideration of good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Company and the Noteholders do hereby agree as
follows:

     SECTION 1. AMENDMENTS TO NOTE AGREEMENT. Effective as of May 31, 2007, the
Noteholders and the Company agree to amend the Note Agreement as follows:

     1.1. Section 1, Exhibit 1 and Schedule A of the Note Agreement are amended by changing each
reference therein from “5.67%” to “5.92%”.

     1.2. A new Section 9.10 is added to the Note Agreement as follows:

     “Section 9.10. Consulting Agreement. On or
before June 20, 2007, the
Company shall obtain, and shall
thereafter maintain the services
of a financial consultant
reasonably acceptable to the
Required Holders to assist the
Company with its business and
financial planning and with its
financial reporting to the Banks
and the holders of the Notes.

     SECTION 2. AMENDMENTS TO THE NOTES. Effective as of May 31, 2007, the Noteholders and the
Company agree that each outstanding Note shall be amended by changing each reference therein from
“5.67%” to “5.92%”.

     SECTION 3. LIMITED WAIVER AND AGREEMENT.

     Subject to the terms and conditions set forth herein, in reliance upon the representations and
warranties of the Company set forth herein, and effective as of May 31, 2007 upon and subject to
the satisfaction of the conditions set forth in Section 5 below, the Noteholders hereby (1) waive
the Existing Defaults and (2) agree that the Existing Sharing Period, to the extent it was caused
by the Existing Defaults or the Credit Agreement Defaults, shall end as of its commencement date.
The foregoing waiver and agreement shall be limited precisely as written and shall relate solely to
the Note Agreement and the Intercreditor Agreement, as applicable, in the manner and to the extent
described herein, and nothing in this Amendment shall be deemed to (a) constitute a waiver of
compliance by the Company with respect to or any modification of (i) Section 10.1 of the Note
Agreement as of the end of any other month or any other Fiscal

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Quarter, as applicable, or in any other instance or respect, or (ii) any other term, provision
or condition of the Note Agreement or the Intercreditor Agreement, (b) constitute an agreement to
end or waive any other Sharing Period (as defined in the Intercreditor Agreement) which has
commenced or which commences at any time hereafter, whether as a result of any Event of Default
under Section 10.1 of the Note Agreement as of the end of any other fiscal month or any other
Fiscal Quarter, as applicable, or otherwise, or in any other instance or respect, (c) constitute a
waiver of any Default or Event of Default other than the Existing Defaults, or (d) prejudice any
right or remedy that the any holder of Notes may now have (after giving effect to the foregoing
waiver) or may have in the future under or in connection with the Note Agreement, any Note or the
Intercreditor Agreement.

     SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     To induce the Noteholders to execute and deliver this Amendment, the Company represents and
warrants to the Noteholders that (a) except for the Existing Defaults, no Default or Event of
Default has occurred and is continuing and (b) the Company has not paid or agreed to pay, and will
not pay or agree to pay, any fee or other consideration for or with respect to the waiver to the
Credit Agreement and agreement of the Required Lenders referred to in Section 3(b) below, other
than a fee not in excess of the amount of $100,000 in the aggregate to all lenders under the
Credit Agreement.

     SECTION 5. CONDITIONS TO EFFECTIVENESS OF LIMITED WAIVER AND AMENDMENTS.

     The amendments in Section 1 of this Amendment and the limited waiver and agreement in Section
2 of this Amendment shall become effective as of May 31, 2007 if each and every one of the
following conditions shall have been satisfied:

     (a) Counterparts of this Amendment, duly executed by the Company and the holders of at
least a majority of the outstanding principal of the Notes, shall have been delivered to the
Noteholders;

     (b) The Noteholders shall have received a counterpart or, if satisfactory to the
Noteholders, certified or other copies of a waiver to the Credit Agreement waiving the
Credit Agreement Defaults and an agreement by the Required Lenders (as defined in the Credit
Agreement) that the Existing Sharing Period, to the extent it was caused by the Existing
Defaults or Credit Agreement Defaults, shall end as of its commencement date, duly executed
and delivered by the party or parties thereto, substantially in the forms attached hereto as
Exhibit A and Exhibit B, respectively, and in full force and effect with no event having
occurred and being then continuing that would constitute a default thereunder or constitute
or provide the basis for the termination thereof; and

     (c) The holders shall have received payment of the Amendment Fee described in Section 6
hereof.

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     SECTION 6. AMENDMENT FEE.

     In consideration of the execution and delivery of this Amendment by the Noteholders, the
Company hereby agrees to pay to the holders, pro rata in proportion to the outstanding principal
amount of the Notes held by each holder, a waiver fee (the “Amendment Fee”) in an aggregate amount
for all holders equal to $100,000.

     SECTION 7. MISCELLANEOUS.

     7.1. Reference to and Effect on Note Agreement and Notes; No Course of Dealing. Upon the
effectiveness of the amendments in Section 1 hereof and the limited waiver in Section 2 hereof,
each reference to the Note Agreement and the Notes in any other document, instrument or agreement
shall mean and be a reference to the Note Agreement and the Notes as modified by this Amendment.
Except as specifically set forth in Sections 1 and 2 hereof, each of the Note Agreement and the
Notes shall remain in full force and effect and is hereby ratified and confirmed in all respects.
The Company acknowledges and agrees that no holder is under any duty or obligation of any kind or
nature whatsoever to grant the Company any additional amendments or waivers of any type, whether
under the same or different circumstances, and no course of dealing or course of performance shall
be deemed to have occurred as a result of the amendments and wavier herein.

     7.2. Expenses. The Company hereby confirms its obligations under the Note Agreement, whether
or not the transactions hereby contemplated are consummated, to pay, promptly after request by any
Noteholder, all reasonable out-of-pocket costs and expenses, including attorneys’ fees and
expenses, incurred by the Noteholders in connection with this Amendment or the transactions
contemplated hereby, in enforcing any rights under this Amendment, or in responding to any subpoena
or other legal process or informal investigative demand issued in connection with this letter or
the transactions contemplated hereby. The obligations of the Company under this Section 7.2 shall
survive transfer by any Noteholder of any Note and payment of any Note.

     7.3. Governing Law. THIS AMENDMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND
THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF ILLINOIS (EXCLUDING ANY
CONFLICTS OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS AMENDMENT TO BE CONSTRUED OR ENFORCED IN
ACCORDANCE WITH, OR THE RIGHTS OF THE PARTIES TO BE GOVERNED BY, THE LAWS OF ANY OTHER
JURISDICTION).

     7.4. Counterparts; Section Titles. This Amendment may be executed in any number of
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. Delivery of an
executed counterpart of a signature page to this Amendment by facsimile shall be effective as
delivery of a manually executed counterpart of this Amendment. The section titles contained in
this Amendment 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.

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     7.5. Termination. This Limited Waiver shall terminate and cease to be in force and effect if
the conditions set forth in Section 3 hereof have not been satisfied by 5:00 p.m. Central Time on
June 6, 2007.

[signature page follows]

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	 	JOHN B. SANFILIPPO & SON, INC.

 	 
	 	By:  	/s/ Herbert J. Marros
 	 
	 	 	Its: 	 Controller 	 
	 	 	 	 
	 

	 	 	 	 
	Accepted and Agreed to:

THE PRUDENTIAL INSURANCE COMPANY

OF AMERICA

 	 
	By:  	/s/ Julia D. Buthman
 	 
	 	Vice President 	 
	 	 	 	 
	 
	PRUCO LIFE INSURANCE COMPANY

 	 
	By:  	/s/ Julia D. Buthman
 	 
	 	Vice President 	 
	 	 	 	 
	 
	AMERICAN SKANDIA LIFE ASSURANCE

CORPORATION

	By:  	Prudential Investment Management, Inc.,

as investment manager

 	 
	By:  	/s/ Julia D. Buthman
 	 
	 	 	Vice President 	 
	 	 	 	 

 

 

	 	 	 	 	 
	PRUDENTIAL RETIREMENT INSURANCE

   AND ANNUITY COMPANY

	By:  	Prudential Investment Management, Inc.,

as investment manager

 	 
	By:  	/s/ Julia D. Buthman
 	 
	 	Vice President 	 
	 	 	 	 
	 
	ING LIFE INSURANCE AND ANNUITY COMPANY

	By:  	Prudential Private Placement Investors, L.P.

(as Investment Advisor)

	By:  	Prudential Private Placement Investors, Inc.

(as its General Partner)

 	 
	By:  	/s/ Julia D. Buthman
 	 
	 	Vice President 	 
	 	 	 
	 
	FARMERS NEW WORLD LIFE INSURANCE COMPANY

	By:  	Prudential Private Placement Investors, L.P.

(as Investment Advisor)

	By:  	Prudential Private Placement Investors, Inc.

(as its General Partner)

 	 
	By:  	/s/ Julia D. Buthman
 	 
	 	Vice President 	 
	 	 	 	 

 

 

	 	 	 	 	 
	PHYSICIANS MUTUAL INSURANCE COMPANY

	By:  	
Prudential Private Placement Investors, L.P.

(as Investment Advisor)

	By:  	Prudential Private Placement Investors, Inc.

(as its General Partner)

 	 
	By:  	/s/ Julia D. Buthman
 	 
	 	Vice President 	 
	 	 	 	 
	 
	GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

 	 
	By:  	/s/ Eve Hampton
 	 
	 	Title: 	 VP, Investments 	 
	 
	 	 	 
	By:  	/s/ J.G. Lowery
 	 
	 	Title: 	 AVP, Investments 	 
	 	 	 	 
	 
	THE GREAT-WEST LIFE ASSURANCE COMPANY

 	 
	By:  	/s/ B.R. Allison
 	 
	 	Title: 	 Authorized Signatory 	 
	 
	 	 	 
	By:  	/s/ D.B.E. Ayers
 	 
	 	Title: 	 Authorized Signatory 	 
	 	 	 	 
	 
	UNITED OF OMAHA LIFE INSURANCE COMPANY

 	 
	By:  	/s/ Curtis R. Caldwell
 	 
	 	Title: 	 Vice President 	 
	 	 	 	 

 

 

	 	 	 	 	 
	JEFFERSON PILOT FINANCIAL INSURANCE COMPANY

 	 
	By:  	/s/ Frank G. LaTorraca
 	 
	 	Title: 	 Vice President 	 
	 	 	 	 

 

 

	 	 	 	 	 

EXHIBIT A

WAIVER AND CONSENT UNDER CREDIT AGREEMENT

(See attached)

 

 

EXHIBIT B

AGREEMENT TO END SHARING PERIOD

(See attached)exv10w1

 

Exhibit 10.1

FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

     This First Amendment (“Amendment”) is made as of May 31, 2007 to the Amended and Restated
Credit Agreement dated as of July 25, 2006 (as amended, supplemented, restated or otherwise
modified and in effect from time to time, the “Credit Agreement”), by and among JOHN B. SANFILIPPO
& SON, INC., a Delaware corporation (“Borrower"), the financial institutions party thereto
(collectively “Lenders” and individually a “Lender”) and U.S. BANK NATIONAL ASSOCIATION, a national
banking association, in its capacity as successor Agent for the Lenders to U.S. Bancorp Ag Credit,
Inc., a Colorado corporation (the “Agent”). This Amendment is made by the Lenders signatory hereto
(being at least the “Required Lenders,” as defined in the Credit Agreement).

RECITAL

     Except as defined herein, all capitalized terms used in this Amendment shall have meaning
assigned to them in the Credit Agreement.

     Borrower and the Lenders desire that certain Defaults and Matured Defaults under the Credit
Agreement be waived and that the Credit Agreement be amended in certain respects.

     NOW, THEREFORE, in consideration of the foregoing and of the terms and conditions contained in
the Credit Agreement and this Amendment, and of any loans or extensions of credit or other
financial accommodations at any time made to or for the benefit of the Borrower by Lenders, the
Borrower, the Agent and the Lenders agree as follows:

     1. As of February 2, 2007, March 1, 2007, March 29, 2007 and May 3, 2007 Borrower failed to
maintain minimum Working Capital, as required by Section 5.6 of the Credit Agreement and Section
10.1(e) of the Note Purchase Agreement, as of March 29, 2007 Borrower failed to maintain minimum
EBITDA, as required by Section 10.1(d) of the Note Purchase Agreement, and as of May 31, 2007
Borrower will fail to maintain minimum Working Capital, as required by Section 5.6 of the Credit
Agreement and Section 10.1(e) of the Note Purchase Agreement (collectively, the “Financial Covenant
Defaults”). The Financial Covenant Defaults under the Credit Agreement have resulted or would
(absent this waiver) result in the occurrence of Matured Defaults as set forth in Subsection (o) of
the definition of Matured Default as set forth in the Credit Agreement, and the Financial Covenant
Defaults under the Note Purchase Agreement have resulted or would (absent this waiver) result in
the occurrence of Matured Defaults as set forth in Subsection (l) of the definition of Matured
Default as set forth in the Credit Agreement (collectively, the “Subject Matured Defaults”). The
Lenders hereby consent to the Subject Matured Defaults, and waive their rights powers and remedies
with respect to the Subject Matured Defaults (the “Waiver and Consent”). Notwithstanding the
foregoing Waiver and Consent, it is expressly understood and agreed that the Lenders shall have the
right at all times hereafter to require strict performance by Borrower of all terms of the Credit
Agreement or any other Financing Agreement, that the Lenders do not waive, affect or diminish any
right, power or remedy of the Lenders under the Credit Agreement or any other Financing

Page 1 of 4

 

Agreement except as expressly set forth herein and that except as expressly set forth herein, the
Credit Agreement and each other Financing Agreement shall continue in full force and effect in
accordance with their respective terms.

     2. The definition of “Applicable Margin” set forth in Section 1.1 of the Credit
Agreement, General Definitions, shall be amended to read as follows:

     "Applicable Margin” shall mean with respect to Swing Line Loans or Line
of Credit Advances that are Prime Rate Loans or LIBOR Rate Loans, or with respect to
Non-Use Fees and Letter of Credit Fees the rates per annum set forth below for the
then applicable Financial Performance Level:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Swing Line Loans,	 	 
	Financial	 	 	 	 	 	LIBOR Rate Loans	 	 
	Performance	 	 	 	 	 	and Letter of	 	 
	Level	 	Prime Rate Loans	 	Credit Fees	 	Non-Use Fees
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	Level 1

	 	 	1.75	%	 	 	3.50	%	 	 	0.25	%
	Level 2

	 	 	1.25	%	 	 	3.00	%	 	 	0.25	%
	Level 3

	 	 	0.75	%	 	 	2.50	%	 	 	0.20	%
	Level 4

	 	 	0.25	%	 	 	2.00	%	 	 	0.20	%
	Level 5

	 	 	0.25	%	 	 	1.50	%	 	 	0.15	%

     The initial Financial Performance Level shall be Level 2. The Agent will
review Borrower’s financial performance as of each fiscal quarter end, beginning
with the fiscal quarter end on June 28, 2007, after its receipt of Borrower’s
financial statements and Compliance Certificate as of the end of such fiscal
quarter, and will confirm Borrower’s determination as to Borrower’s Financial
Performance Level based on such fiscal quarter. As so confirmed by the Agent,
Borrower’s Financial Performance Level will determine the Applicable Margin
effective for Prime Rate Loans and LIBOR Rate Loans, and with respect to Letter of
Credit Fees and Non-Use Fees for the three month period beginning on the fifteenth
day of the second month following the end of such fiscal quarter. If the Agent does
not receive such quarter end statements on or before the date they are due in
accordance with Section 5.1, Borrower’s Financial Performance Level shall be
deemed to be Level 1 beginning with the fifteenth day of the second month following
the end of such fiscal quarter and shall remain at Level 1 until the 15th
Business Day after such financial statements are received by the Agent and a
determination by the Agent that a different Financial Level shall apply during the
remainder of the three month period.

Page 2 of 4

 

     3. A
new Section 5.11 of the Credit Agreement, Consulting Agreement, shall be
amended to read as follows:

     5.11 Consulting Agreement. On or before June 20, 2007 Borrower shall
obtain, and shall thereafter maintain the services of a financial consultant
reasonably acceptable to the Required Lenders to assist Borrower with its business
and financial planning and with its financial reporting to the Lenders and the
holders of the Notes.

     4. This Amendment shall be effective as of its date, conditioned on the execution and delivery
to the Agent in form and substance reasonably acceptable to the Agent of: (a) this Amendment, (b) a
waiver under the Note Purchase Agreement by the Required Holders (as defined in the Note Purchase
Agreement) of the Notes of the Financial Covenant Defaults and related cross defaults; and (c) An
agreement or agreements to end the Sharing Period (as defined in the Intercreditor Agreement) by
the Required Senior Lenders (as defined in the Intercreditor Agreement).

     5. On the date this Amendment becomes effective, Borrower agrees to pay to the Agent for
distribution to the Lenders (based on their respective Pro Rata Percentages), including the Agent,
an amendment fee in the amount of $100,000. The foregoing fee shall be fully earned and, at the
option of the Agent, shall be paid by an Advance pursuant to Section 2.1, without prior
demand by the Agent.

     6. This Amendment shall be an integral part of the Credit Agreement, as amended, and all of
the terms set forth therein are hereby incorporated in this Amendment by reference, and all terms
of this Amendment are hereby incorporated into said Credit Agreement, as if made an original part
thereof. All of the terms and provisions of the Agreement, as amended, which are not modified in
this Amendment, shall remain in full force and effect.

{SIGNATURE PAGE FOLLOWS}

Page 3 of 4

 

     IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above
written.

	 	 	 	 	 
	 
	 	JOHN B. SANFILIPPO & SON, INC., a 

Delaware corporation

 	 
	 	By  	/s/ Herbert J. Marros
 	 
	 	 	Its 	 Controller 	 
	 	 	 	 
	 
	 	U.S. BANK NATIONAL ASSOCIATION

as Agent and as a Lender

 	 
	 	By  	/s/ Dale Welke
 	 
	 	 	Its 	 Vice President 	 
	 	 	 	 
	 
	 	LASALLE BANK NATIONAL

ASSOCIATION, as a Lender

 	 
	 	By  	/s/ Emily Eigel
 	 
	 	 	Its 	 Assistant Vice President 	 
	 	 	 	 
	 
	 	ING CAPITAL LLC, as a Lender

 	 
	 	By  	/s/ William B. Redmond
 	 
	 	 	Its 	 Managing Director 	 
	 	 	 	 
	 

[Signature Page to First Amendment to Amended and Restated Credit Agreement dated as of May
31, 2007]

Page 4 of 4

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