SECOND AMENDMENT TO NOTE PURCHASE
AGREEMENT
THIS SECOND
AMENDMENT , dated as of October 23, 2008 (this “
Amendment ”) to that certain Note Purchase Agreement,
dated as of May 27, 2004 (as amended by that certain First
Amendment to Note Purchase Agreement, dated as of May 31,
2007, and as in effect immediately prior to the effectiveness of
this Amendment, collectively, the “ Existing Note Purchase
Agreement ”), among The J. M. Smucker Company, an Ohio
corporation (the “ Company ”), and the
purchasers signatory thereto (together with their successors,
transferees and assigns, collectively, the “
Noteholders ”) pursuant to which the Company issued to
the Noteholders its 4.78% Senior Notes due June 1, 2014 in the
aggregate principal amount of $100,000,000 (collectively, the
“ Notes ”).
A. The
Noteholders are the holders of all of the outstanding
Notes.
B. Capitalized
terms used herein shall have the respective meanings ascribed
thereto in the Existing Note Purchase Agreement unless herein
defined or the context shall otherwise require.
C. The
Company and the Noteholders now desire to amend the Existing Note
Purchase Agreement in the respects, but only in the respects,
hereinafter set forth.
NOW
THEREFORE , for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Company and the
Noteholders do hereby agree as follows:
1.1.
Amendment to Section 9.7 (Financial Covenant
Standards).
Section 9.7
of the Existing Note Purchase Agreement is hereby deleted in its
entirety, and a new Section 9.7 is hereby inserted in its
place, to read as follows:
9.7 Financial
Covenant Standards.
If at any time and
from time to time on or after the Second Amendment Effective Date,
any Primary Senior Debt shall contain (whether on the Second
Amendment Effective Date or subsequent thereto as the result of an
amendment or modification thereof) one or more Financial Covenants
that are either not contained in this Agreement or are contained in
this Agreement but are more favorable to the lender or lenders
under such Primary Senior Debt than are the terms of this Agreement
to the holders of the Notes, this Agreement shall, without any
further action on the part of the Company or any of the holders of
the Notes, be deemed to be amended automatically (effective
simultaneously with the effectiveness of such Primary Senior Debt
or such modification) to include each such additional or more
favorable Financial Covenant, unless the Required Holders provide
written notice to the Company to the contrary within 30 days
after having received written notice from the Company of the
effectiveness of such additional or more favorable Financial
Covenant (in which event such Financial Covenant shall be deemed
not to
have been
included in this Agreement at any time). No modification or
amendment of any Primary Senior Debt that results in any Financial
Covenant becoming less restrictive on the Company shall be
effective as a modification, amendment or waiver under this
Agreement. The Company further covenants promptly to execute and
deliver at its expense (including, without limitation, the fees and
expenses of counsel for the holders of the Notes) an amendment to
this Agreement in form and substance satisfactory to the Required
Holders to reflect such additional or more favorable Financial
Covenant, provided that the execution and delivery of such
amendment shall not be a precondition to the effectiveness of such
additional or more favorable Financial Covenant as provided for in
this Section 9.7. The provisions of this Section 9.7
shall apply successively to each change in a Financial Covenant
contained in any Primary Senior Debt.
“
Financial Covenant ” means any covenant or equivalent
provision (including, without limitation, any default or event of
default provision and definitions of defined terms used therein)
requiring the Company:
(a) to maintain
any level of financial performance (including, without limitation,
a specified level of net worth, total assets, cash flow or net
income),
(b) not to exceed
any maximum level of indebtedness,
(c) to maintain
any relationship of any component of its capital structure to any
other component thereof (including, without limitation, the
relationship of indebtedness, senior indebtedness or subordinated
indebtedness to total capitalization or to net worth),
or
(d) to maintain
any measure of its ability to service its indebtedness (including,
without limitation, falling below any specified ratio of revenues,
cash flow or net income to interest expense, rental expense,
capital expenditures and/or scheduled payments of
indebtedness).
1.2.
Amendment to Section 10.3 (Consolidated Net
Worth).
Section 10.3
of the Existing Note Purchase Agreement is hereby deleted in its
entirety, and a new Section 10.3 is hereby inserted in its
place, to read as follows:
10.3
Consolidated Net Worth.
The Company will
not, at any time, permit Consolidated Net Worth to be less than
(a) prior to the Folgers Acquisition Date, One Billion Dollars
($1,000,000,000) and (b) on and after the Folgers Acquisition
Date, Three Billion Five Hundred Million Dollars
($3,500,000,000).
1.3.
Amendment to Section 10.4.
Section 10.4
of the Existing Note Purchase Agreement is hereby deleted in its
entirety, and a new Section 10.4 is hereby inserted in its
place, to read as follows:
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The Company will
not permit, as of the end of each fiscal quarter, Consolidated Debt
determined as of such date to exceed 55% of the sum of
(a) Consolidated Debt and (b) Consolidated Net Worth,
each determined as of such date.
1.4.
Amendment to Section 10.5 (Incurrence of Current
Debt).
Section 10.5
of the Existing Note Purchase Agreement is hereby deleted in its
entirety, and a new Section 10.5 is hereby inserted in its
place, to read as follows:
10.5
Intentionally Omitted.
1.5.
Amendment to Section 10.6 (Priority Debt).
Section 10.6
of the Existing Note Purchase Agreement is hereby deleted in its
entirety, and a new Section 10.6 is hereby inserted in its
place, to read as follows:
The Company will
not, at any date, permit Priority Debt to exceed (a) prior to
the last day of the fiscal quarter in which the Folgers Acquisition
Date occurs, 25% of Consolidated Total Capitalization (determined
as of the last day of the then most recently ended fiscal quarter
of the Company) and (b) thereafter, 15% of Consolidated Total
Capitalization (determined as of the last day of the then most
recently ended fiscal quarter of the Company or determined as of
such date if such date shall be the last day of a fiscal quarter of
the Company); provided, however, that no Lien created pursuant to
Section 10.7(g) shall secure any Primary Senior Debt unless
the Notes are equally and ratably secured by all property subject
to such Lien and no Subsidiary shall guaranty or otherwise become
obligated in respect of any Primary Senior Debt unless such
Subsidiary guaranties, or becomes similarly obligated in respect
of, the Notes and such Debt is subject to the terms of the
Intercreditor Agreement (or an intercreditor agreement in form and
substance reasonably satisfactory to the Required Holders), in each
case all pursuant to documentation reasonably satisfactory to the
Required Holders; provided, further, however, that notwithstanding
anything contained in this Section 10.6 to the contrary, the
Company shall be under no obligation to (but may in its sole
discretion) require any Foreign Subsidiary to guaranty the Debt
under this Agreement and the Notes to the extent such Foreign
Subsidiary’s obligations under all Primary Senior Debt
consist solely of direct borrowings solely to such Foreign
Subsidiary or a group of Foreign Subsidiaries (a “ Foreign
Borrowing ”) or guaranties of a Foreign Borrowing by
another Foreign Subsidiary.
1.6.
Amendment to Section 10.7 (Liens)
Section 10.7(g)
of the Existing Note Purchase Agreement is hereby deleted in its
entirety, and a new Section 10.7(g) is hereby inserted in its
place, to read as follows:
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(g) other
Liens not otherwise permitted by paragraphs (a) through
(f) of this Section 10.7, so long as the Debt secured
thereby can be
(i) incurred and
remain outstanding in accordance with the requirements of
Section 10.4, and
(ii) incurred and
remain outstanding in accordance with the requirements of
Section 10.6.
1.7.
Amendment to Section 11 (Events of Default).
Section 11(f)
of the Existing Note Purchase Agreement is hereby deleted in its
entirety, and a new Section 11(f) is hereby inserted in its place,
to read as follows:
(f) the
Company or any Significant Subsidiary
(i) is in default
(as principal or as guarantor or other surety) in the payment of
any principal of or premium or Make-Whole Amount or interest on any
Indebtedness (other than Indebtedness under this Agreement and the
Notes) that is outstanding in an aggregate principal amount of at
least $5,000,000 beyond any period of grace provided with respect
thereto (after giving effect to any consents or waivers in respect
thereof); or
(ii) is in default
in the performance of or compliance with any term of any evidence
of any Indebtedness under the Bank Credit Agreement or the Folgers
Bank Credit Agreement or any other Indebtedness with an outstanding
principal amount of at least $40,000,000 individually or, together
with other Indebtedness, with an aggregate principal amount of at
least $75,000,000 or of any mortgage, indenture or other agreement
relating thereto or any other condition exists, and as a
consequence of such default or condition such Indebtedness has
become, or has been declared (or one or more Persons are entitled
at such time to declare such Indebtedness to be), due and payable
before its stated maturity or before its regularly scheduled dates
of payment; or
(iii) as a
consequence of the occurrence or continuation of any event or
condition (other than the passage of time or the right of the
holder of Indebtedness to convert such Indebtedness into equity
interests), (x) the Company or such Significant Subsidiary has
become obligated to purchase or repay Indebtedness under the Bank
Credit Agreement or the Folgers Bank Credit Agreement or any other
Indebtedness with an outstanding principal amount of at least
$40,000,000 individually or, together with other Indebtedness, with
an aggregate principal amount of at least $75,000,000 before its
regular maturity or before its regularly scheduled dates of
payment, or (y) one or more Persons have the right at such
time to require the Company or such Significant Subsidiary so to
purchase or repay such Indebtedness; or
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1.8.
Deletion of Defined Terms.
The definitions of
“Consolidated Current Debt”, “Consolidated Senior
Funded Debt”, “Current Debt”, “Current
Maturities of Funded Debt”, and “2007 Note
Agreement”, are each hereby deleted from Schedule B to
the Existing Note Purchase Agreement.
1.9.
Amendments to Schedule B.
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