EXHIBIT 10.27
▇▇▇▇▇▇▇▇▇ FARMS, INC.
THIRD AMENDMENT TO CREDIT AGREEMENT
▇▇▇▇▇▇ Trust and Savings Bank
Chicago, Illinois
SunTrust Bank, Atlanta
Atlanta, Georgia
First American National Bank,
d/b/a Deposit Guaranty National Bank
Jackson, Mississippi
Credit Agricole Indosuez, Chicago Branch
(formerly known as Caisse Nationale de Credit
Agricole, Chicago Branch)
Chicago, Illinois
Trustmark National Bank
Jackson, Mississippi
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of
July 31, 1996, as amended (the "Credit Agreement") among the undersigned,
▇▇▇▇▇▇▇▇▇ Farms, Inc., a Mississippi corporation (the "Company"), you (the
"Banks") and ▇▇▇▇▇▇ Trust and Savings Bank, as agent for the Banks (the
"Agent"). All defined terms used herein shall have the same meaning as in the
Credit Agreement unless otherwise defined herein.
The Credit Agreement provides for a $130,000,000 Revolving Credit to be
made available to the Company. The Company now applies to the Banks to amend the
Credit Agreement to extend the Termination Date thereof from July 31, 2001 to
July 31, 2002, reduce the amount of the Revolving Credit to $100,000,000,
provide for the termination of First American National Bank, d/b/a Deposit
Guaranty National Bank ("First American") as a member of the bank group, and
amend certain covenants contained in the Credit Agreement, all in the manner and
on the terms and conditions set forth herein.
1. AMENDMENTS.
Upon satisfaction of all of the conditions precedent set forth in
Section 2 hereof, the Credit Agreement shall be amended as follows:
1.1. The date "July 31, 2001" appearing in the last sentence of Section
1.1(a) of the Credit Agreement shall be replaced with the date "July 31, 2002",
and the Revolving Credit Termination Date under the Credit Agreement shall be
July 31, 2002.
1.2. Section 1.1(c) of the Credit Agreement shall be amended to read as
follows:
"(c) The respective maximum aggregate principal amounts of the
Revolving Credit at any one time outstanding and the percentage of the
Revolving Credit available at any time which each Bank by its
acceptance hereof severally agrees to make available to the Company are
as follows (collectively, the "Revolving Credit Commitments" and
individually, a "Revolving Credit Commitment"):
▇▇▇▇▇▇ Trust and Savings Bank $33,333,333 33.333333%
SunTrust Bank, Atlanta $30,476,191 30.476191%
Credit Agricole Indosuez $19,047,619 19.047619%
Trustmark National Bank $17,142,857 17.142857%
Total $100,000,000 100%"
1.3. Section 7.8 of the Credit Agreement shall be amended to read as
follows:
"Section 7.8. Consolidated Net Working Capital. The Company
will maintain at all times Consolidated Net Working Capital in an
amount not less than the amount indicated below during each fiscal year
of the Company indicated below:
FISCAL YEAR ENDING MINIMUM REQUIRED AMOUNT
October 31, 1996 $42,000,000
October 31, 1997 $45,000,000
October 31, 1998 $48,000,000
October 31, 1999 $50,000,000
October 31, 2000 $50,000,000
October 31, 2001 $50,000,000
October 31, 2002 $50,000,000
October 31, 2003 $50,000,000
October 31, 2004 $50,000,000
October 31, 2005 $50,000,000
October 31, 2006 $50,000,000."
1.4. Section 7.10 of the Credit Agreement shall be amended to read as
follows:
"Section 7.10. Consolidated Indebtedness for Borrowed Money to
Total Capitalization. The Company will not permit the ratio of its
Consolidated Indebtedness for Borrowed Money to its Total
Capitalization (the "Funded Debt Ratio") at any time to exceed the
percentage indicated below during each fiscal year of the Company
specified below:
FISCAL YEAR ENDING MAXIMUM PERCENTAGE
October 31, 1996 55%
October 31, 1997 65%
October 31, 1998 65%
October 31, 1999 55%
October 31, 2000 55%
October 31, 2001 50%
October 31, 2002 45%
October 31, 2003 40%
October 31, 2004 40%
October 31, 2005 40%
October 31, 2006 40%."
1.5. Section 7.11 of the Credit Agreement shall be amended by replacing
the phrase "3.0 to 1" appearing therein with the phrase "2.5 to 1".
1.6. Section 7.12 of the Credit Agreement shall be amended to read as
follows:
"Section 7.12. Capital Expenditures. The Company will not, and
will not permit any Subsidiary to, be obligated to spend during any
fiscal year for capital expenditures (as defined and classified in
accordance with generally accepted accounting principles consistently
applied, including without limitation any such capital expenditures in
respect of Capitalized Leases but excluding any acquisition permitted
by Section 7.14(d) which might constitute such a capital expenditure)
an aggregate amount for the Company and its Subsidiaries in excess of
the amount indicated below for each fiscal year of the Company plus an
amount (the "Carryover Amount") permitted to be spent in the preceding
fiscal year but not actually spent therein (the "Maximum Carryover
Amount to the Next Fiscal Year"):
MAXIMUM MAXIMUM CARRYOVER AMOUNT
FISCAL YEAR ENDING LIMITATION AMOUNT TO THE NEXT FISCAL YEAR
October 31, 1996 $65,000,000 Unlimited
October 31, 1997 $45,000,000 Unlimited
October 31, 1998 $25,000,000 $ 7,500,000
October 31, 1999 Prior Year's $ 7,500,000
Depreciation
October 31, 2000 Prior Year's $ 7,500,000
Depreciation
October 31, 2001 Prior Year's $ 7,500,000
Depreciation
October 31, 2002 Prior Year's $ 7,500,000
Depreciation
October 31, 2003 Prior Year's $ 7,500,000
Depreciation
October 31, 2004 Prior Year's $ 7,500,000
Depreciation
October 31, 2005 Prior Year's $7,500,000
Depreciation
October 31, 2006 Prior Year's $7,500,000
Depreciation
1.7. The terms "Revolving Note" and "Revolving Notes" shall mean the
Revolving Credit Notes executed and delivered by the Company in satisfaction of
the condition precedent contained in Section 2.2 of this Amendment.
2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
2.1. The Company and each of the Banks shall have executed this
Amendment.
2.2. The Company shall have executed and delivered to each Bank a
Revolving Credit Note in the form attached to this Amendment as Exhibit B
payable to the order of such Bank in the principal amount of such Bank's
Revolving Credit Commitment after giving effect to this Amendment.
2.3. Each Guarantor Subsidiary shall have executed the Guarantors'
Acknowledgment attached hereto.
2.4. The Agent shall have received the favorable written opinion of
counsel for the Company in the form of Exhibit A attached hereto.
2.5. The Agent shall have received a Certificate of the Treasurer of the
Company and each of the Guarantor Subsidiaries with respect to (a) resolutions
of their respective Board of Directors authorizing the transactions contemplated
hereby, and (b) incumbency and signature of the President, Treasurer and
Secretary of the Company and each Guarantor Subsidiary.
3. REPRESENTATIONS AND WARRANTIES.
3.1. Each of the representations and warranties set forth in Section
5 of the Credit Agreement are true and correct.
3.2. The Company is in full compliance with all of the terms and
conditions of the Credit Agreement and no Event of Default or Potential Default
has occurred and is continuing thereunder or shall result after giving effect to
this Amendment.
4. MISCELLANEOUS.
4.1. Upon satisfaction of the conditions precedent set forth above, the
Company shall be deemed to have requested from the Banks other than First
American loans in an aggregate principal amount equal to the unpaid principal
amount of the Revolving Credit Note dated July 31, 1996 payable to the order of
First American (the "First American Note"), and such Banks will make such loans
if all conditions set forth in Section 6.3 of the Credit Agreement are
satisfied. The proceeds of such loans shall be used exclusively to pay the
outstanding principal balance of the First American Note, and the Company will
pay all accrued interest thereon and all other fees and other amounts due to
First American, including without limitation accrued and unpaid commitment fees,
letter of credit fees and all amounts, if any, payable under Section 9.4 of the
Credit Agreement with respect to such prepayment. Upon payment in full of all
principal of and accrued interest on such First American Note, and all such
other amounts, all participations in L/Cs and Reimbursement Obligations by First
American shall terminate and First American shall cease to be a party to the
Credit Agreement and shall have no rights or obligations thereunder except for
its rights under Sections 9.3, 9.4, 11.6 and 11.9 which shall continue
unaffected by this Amendment.
4.2. Reference to this specific Amendment need not be made in any note,
document, letter, certificate, the Credit Agreement itself, the Revolving Notes,
or any communication issued or made pursuant to or with respect to the Credit
Agreement or the Revolving Notes, any reference to the Credit Agreement being
sufficient to refer to the Credit Agreement as amended hereby.
4.3. This Amendment may be executed in any number of counterparts, and
by the different parties on different counterparts, all of which taken together
shall constitute one and the same agreement. Any of the parties hereto may
execute this Amendment by signing any such counterpart and each of such
counterparts shall for all purposes be deemed to be an original. This Amendment
shall be governed by the internal laws of the State of Illinois.
4.4. The Company hereby requests that ▇▇▇▇▇▇ extend the Stated
Expiration Date of its Letter of Credit Number SPL 34947 dated November 16, 1995
which ▇▇▇▇▇▇ has issued for the Company's account to First Trust National
Association, as trustee (the "Trustee") under the Indenture of Trust dated as of
November 1, 1995 between ▇▇▇▇▇▇▇▇▇ County Industrial Development Corporation and
the Trustee from July 31, 2000, to July 31, 2001. The Banks hereby consent and
agree to such extension.
Upon acceptance hereof by the Agent and the Banks in the manner
hereinafter set forth, this Amendment shall be a contract between us for the
purposes hereinabove set forth.
Dated as of July 29, 1999.
▇▇▇▇▇▇▇▇▇ FARMS, INC.
By /s/D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its Treasurer and Chief Financial Officer
Accepted and agreed to as of the day and year last above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
individually and as Agent
By /s/▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its Vice President
SUNTRUST BANK, ATLANTA
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Vice President
By /s/F. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Its Vice President
FIRST AMERICAN NATIONAL BANK, D/B/A DEPOSIT GUARANTY
NATIONAL BANK
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Senior Vice President
CREDIT AGRICOLE INDOSUEZ, CHICAGO BRANCH (formerly known
as Caisse Nationale de Credit Agricole, Chicago
Branch)
By /s/▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its First Vice President
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Its Vice President, Manager
TRUSTMARK NATIONAL BANK
By /s/W. H. ▇▇▇▇▇▇
Its Vice President
-3-
GUARANTORS' ACKNOWLEDGMENT
The undersigned, each of which has executed and delivered to the Banks
a Guaranty Agreement dated as of July 31, 1996 (the "Guaranty Agreement"),
hereby acknowledges the amendment of the Credit Agreement as set forth above and
agrees that all of the Company's indebtedness, obligations and liabilities to
the Banks and the Agent under the Credit Agreement and the Notes as amended by
the foregoing Amendment shall continue to be entitled to the benefits of said
Guaranty Agreement. The undersigned further agree that the Acknowledgment or
consent of the undersigned to any further amendments of the Credit Agreement
shall not be required as a result of this Acknowledgment having been obtained,
except to the extent, if any, required by the Guaranty Agreement.
Dated as of July 29, 1999.
▇▇▇▇▇▇▇▇▇ FARMS, INC. (FOODS DIVISION)
By /s/D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its Treasurer and Chief Financial Officer
▇▇▇▇▇▇▇▇▇ FARMS, INC. (PRODUCTION DIVISION)
By /s/D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its Treasurer and Chief Financial Officer
▇▇▇▇▇▇▇▇▇ FARMS, INC. (PROCESSING DIVISION)
By /s/D. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Its Treasurer and Chief Financial Officer
-2-
EXHIBIT A
FORM OF OPINION OF COUNSEL
EXHIBIT B
▇▇▇▇▇▇▇▇▇ FARMS, INC.
REVOLVING CREDIT NOTE
______________, 1999
FOR VALUE RECEIVED, the undersigned, ▇▇▇▇▇▇▇▇▇ FARMS, INC., a
Mississippi corporation (the "Company") promises to pay to the order of
_________________________ (the "Lender") on the Revolving Credit Termination
Date (as defined in the Credit Agreement referred to below) at the principal
office of ▇▇▇▇▇▇ Trust and Savings Bank in Chicago, Illinois, the principal sum
of ____________________________________________ or, if less, the aggregate
unpaid principal amount of all Revolving Credit Loans made by the Lender to the
Company under the Revolving Credit provided for under the Credit Agreement
hereinafter mentioned and remaining unpaid on the Revolving Credit Termination
Date together with interest on the principal amount of each Revolving Credit
Loan from time to time outstanding hereunder at the rates, and payable in the
manner and on the dates, specified in said Credit Agreement.
The Lender shall record on its books or records or on the schedule to
this Note which is a part hereof the principal amount of each Revolving Credit
Loan made under the Revolving Credit, all payments of principal and interest and
the principal balances from time to time outstanding; provided that prior to the
transfer of this Note all such amounts shall be recorded on the schedule
attached to this Note. The record thereof, whether shown on such books or
records or on the schedule to this Note, shall be prima facie evidence as to all
such amounts; provided, however, that the failure of the Lender to record, or
any mistake in recording, any of the foregoing shall not limit or otherwise
affect the obligation of the Company to repay all Revolving Credit Loans made
under the Revolving Credit, together with accrued interest thereon.
This Note is one of the Revolving Notes referred to in and issued under
that certain Credit Agreement dated as of July 31, 1996, as amended, among the
Company, ▇▇▇▇▇▇ Trust and Savings Bank, as Agent, and the banks named therein,
as amended from time to time (the "Credit Agreement"), and this Note and the
holder hereof are entitled to all of the benefits and security provided for
thereby or referred to therein. Payment of this Note has been guaranteed
pursuant to that certain Guaranty Agreement dated as of July 31, 1996 from the
Guarantor Subsidiaries to the Banks, to which reference is hereby made for a
statement of the terms thereof. All defined terms used in this Note, except
terms otherwise defined herein, shall have the same meaning as such terms have
in said Credit Agreement.
Prepayments may be made on any Revolving Credit Loan evidenced hereby
and this Note (and the Revolving Credit Loans evidenced hereby) may be declared
due prior to the expressed maturity thereof, all in the events, on the terms and
in the manner as provided for in said Credit Agreement.
This Note is issued in substitution and replacement of, and in part
evidences indebtedness formerly evidenced by, the Revolving Credit Note dated
July 31, 1996, of the Company payable to the order of the Lender issued pursuant
to the Credit Agreement.
The Company hereby waives presentment for payment and demand.
This Note is governed by and shall be construed in accordance with the
internal laws of the State of Illinois.
▇▇▇▇▇▇▇▇▇ FARMS, INC.
By
Its________________________________________________
