EXHIBIT B-4(i)(8)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
PRUCO LIFE INSURANCE COMPANY
c/o Prudential Capital Group
One Gateway Center, 11th Floor
Newark, New Jersey 07102
October 13, 1998
GOLD KIST INC.
244 Perimeter Center Parkway, N.E.
Atlanta, Georgia 30346
Attention: Mr. Steven O. West,
Treasurer
Ladies and Gentlemen:
Reference is made to each of the following agreements:
(i) that certain Note Purchase and Private Shelf
Agreement (the "Shelf Agreement") dated as of February
11, 1997 between Gold Kist, Inc. (the "Company") and The
Prudential Insurance Company of America ("Prudential"),
as previously amended;
(ii) those certain Note Agreements dated as of
November 4, 1988, between the Company and Prudential, and
the Company and Pruco Life Insurance Company ("Pruco"),
as previously amended; and
(iii) that certain Note Agreement dated as of
June 3, 1991 (the "1991 Agreement"), between the Company
and Prudential, as previously amended. All of the
foregoing agreements being hereinafter referred to
collectively as the "Note Agreements". Pursuant to
paragraph 11C of each of the Note Agreements:
A. The Company, Prudential and Pruco hereby agree that
paragraph 1 of the 1991 Agreement and paragraph 1A of the
Shelf Agreement, shall be amended by changing the reference
to "July 31, 1998" to "July 1, 1998" in the last sentence of
paragraph 1 of the 1991 Agreement and paragraph 1A of the
Shelf Agreement.
B. The Company has requested that Purchasers waive the
prohibition contained in Paragraph 6D of the Note Agreements,
in order to permit the Company to provide a $100 million
irrevocable letter of credit (the "Letter of Credit") to
Southern States Cooperative ("SSC"), as collateral for its
obligation to purchase $100 million shares of SSC preferred
stock ("Preferred Stock") upon the terms described in Annex 1
hereto. The Purchasers hereby waive the provisions of
paragraph 6D of the Note Agreements so as to permit the
Company to (i) provide the Letter of Credit to SSC and (ii) if
required, purchase the Preferred Stock, all substantially upon
the terms described in Annex 1.
C. The amendments set forth in paragraph A shall be
effective as of July 1, 1998, and all other amendments set
forth herein shall become effective as of the date hereof upon
the full execution and delivery to the Purchasers of this
letter by the Company.
D. This amendment shall not be deemed to amend, modify or
waive any other provision of the Note Agreements and shall not
serve as an amendment, modification or waiver of any other
terms and conditions of the Note Agreements. All of the terms
and conditions of the Note Agreements shall remain in full
force and effect, except as and to the extent amended above.
If the foregoing accurately sets forth our understanding,
please sign each copy of this letter enclosed and return one
to Prudential, whereupon this letter shall be a binding
agreement between Prudential, Pruco and the Company, with
respect to the 1988 Agreements and Prudential and the Company,
with respect to all of the other Note Agreements.
Very truly yours,
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ Robert R. Derrick
Name: Robert R. Derrick
Title: Vice President
PRUCO LIFE INSURANCE
COMPANY
By:/s/ Robert R. Derrick
Name: Robert R. Derrick
Title: Vice President
Agreed and accepted
this 13 day of October, 1998
GOLD KIST, INC
By:/s/ Stephen O. West
Name: Stephen O. West
Title: Treasurer
ANNEX I
To partially finance the $230 million acquisition of Gold Kist
Inc.'s ("Gold Kist") Agri-services business by Southern States
Cooperative ("SSC"), Gold Kist has accepted an obligation to
purchase $100 million in Southern States preferred stock
through a put option which allows Southern State to put up to
$100 million of preferred stock to Gold Kist if Southern
States fails to place the preferred stock in the market within
six months. To collateralize Gold Kist's obligation under the
put, Gold Kist will provide Southern States with a $100
million direct pay, irrevocable, letter of credit issued by
Rabobank for an initial period of six months. The letter of
credit may be renewed at Southern States option for an
additional six months. If Southern States issues the
preferred securities to another party in whole or in part
before exercising the put option, the letter of credit will
expire immediately. Southern States will finance the entire
purchase price of the transaction with a bridge financing
until the preferred securities are sold in the market or put
to Gold Kist.
The preferred stock issue is comprised of two security
classes: 1) $40 million perpetual redeemable cumulative
preferred stock with a 10 year bullet maturity and a 7.50%
initial dividend rate that increase to 8.00% after nine
months, and increases to 8.25% after twelve months from the
closing date; and 2) $60 million in trust preferred
certificates with a 30 year bullet maturity and an initial
dividend rate of 8.00% which increases to 8.50% after nine
months and 8.75% after twelve months from the closing date.
Both of these preferred securities have a fifteen month
transferability block. S&P and Moody's have reviewed Southern
States for the foregoing transaction and have rated the
company's senior debt BBB- and Ba1, and the preferred stock
issue BB+ and Ba3, respectively.
[12743]
