EXECUTION COPY
THIRD AMENDMENT TO CREDIT AGREEMENT
AND LIMITED WAIVER
FIRSTAR BANK, N. A., as Agent
(formerly known as Firstar Bank Milwaukee, N. A.)
Milwaukee, Wisconsin
and The Financial Institutions Identified Herein
Ladies and Gentlemen:
The undersigned, NORTHLAND CRANBERRIES, INC., a Wisconsin corporation (the
"Company") hereby requests that the undersigned financial institutions (together
with their respective successors and assigns, collectively, the "Banks") agree
to further amend the Credit Agreement dated as of March 15, 1999, as amended as
of May 1, 1999 and December 29, 1999 (the "Credit Agreement"), among the
Company, certain of the Banks and Firstar Bank, N. A., as agent, and to waive
certain defaults, all on the terms and conditions set forth below. Capitalized
terms used herein and not defined shall have the meanings assigned thereto in
the Credit Agreement.
1. Amendment to Section 1.1. Section 1.1 of the Credit Agreement shall be
amended to read as follows:
Section 1.1. The Revolving Credit. Subject to all of the terms and
conditions hereof, each Bank, severally and for itself alone, agrees to
extend such Bank's Percentage of a revolving credit facility to the Company
which may be availed of by the Company in its discretion from time to time,
be repaid and used again, during the period from the date hereof to and
including the Revolving Credit Termination Date. The revolving credit
facility may be utilized by the Company in the form of (i) revolving credit
loans (individually a "Revolving Credit Loan" and collectively the
"Revolving Credit Loans") from the Banks according to their respective
Percentages, (ii) swing line loans (individually a "Swing Line Loan" and
collectively, the "Swing Line Loans") from the Swing Line Lender, pursuant
to Section 1.2 hereof, and (iii) L/Cs issued by the Issuer upon request of
the Company and in which each Bank shall have purchased a participation,
provided that the aggregate amount of the Revolving Credit Loans, Swing
Line Loans, Reimbursement Obligations and the maximum amount available to
be drawn under all L/Cs outstanding at any one time shall not exceed One
Hundred Fifty Five Million Dollars ($155,000,000), which amount shall be
reduced by Five Million Dollars ($5,000,000) on the last day of each of the
first and third fiscal quarters of the Company commencing with the fiscal
quarters ending November 30, 2000 and May 31, 2001 and continuing
thereafter until the Revolving Credit Termination Date (as so reduced at
any time, the "Revolving Credit Commitment"). All Revolving Credit Loans
shall be evidenced by Revolving Credit Notes of the Company (the "Revolving
Credit Notes") payable to the order of each of the Banks in the amounts of
their respective Percentages
of the Revolving Credit Commitment (prior to giving any effect to any
reduction in the amount thereof), such Revolving Credit Notes to be in
substantially the form attached hereto as Exhibit 1.1. Without regard to
the face principal amounts of each of the Revolving Credit Notes, the
actual principal amount at any time outstanding and owing by the Company on
account thereof during the period ending on the Revolving Credit
Termination Date shall be the sum of all Revolving Credit Loans then or
theretofore made thereon less all principal payments actually received
thereon during such period.
2. Amendment to Section 3.3. Section 3.3 of the Credit Agreement shall be
amended to add the following sentence at the end of such Section:
In the event Cliffstar Corporation ("Cliffstar") shall at any time prepay
in the case of clause (a) or pay in the case of clause (b) (a "Cliffstar
Prepayment") all or any portion of (a) that certain Promissory Note dated
March 8, 2000 in the original principal amount of $28,000,000 payable by
Cliffstar to the Company (the "Cliffstar Note"), or (b) the "Earnout
Termination Payment" (as defined in that certain Asset Purchase Agreement
dated January 5, 2000 by and between Cliffstar and the Company, as amended
by that certain First Amendment to Asset Purchase Agreement dated as of
March 8, 2000 (as so amended, the "Asset Purchase Agreement")), in each
case other than in connection with regularly scheduled payments of
principal and/or interest, as the case may be, and in the case of clause
(a) regular payments of the "Earnout Amount" (as defined in the Asset
Purchase Agreement) that are applied against the principal due under the
Cliffstar Note, the Company shall, not later than 5:00 p.m. (Milwaukee
time) on the Business Day following a Cliffstar Prepayment, pay to the
Agent for the pro rata account of the Banks as and for a mandatory
prepayment on the Revolving Credit Notes, the amount of the Cliffstar
Prepayment.
3. Amendment to Section 3.4. Section 3.4 of the Credit Agreement shall be
amended to add the following sentence at the end of such Section:
In the event of any Cliffstar Prepayment, the Revolving Credit Commitment
shall be reduced, without any action by or notice on the part of the
Company, to the difference between (a) the Revolving Credit Commitment and
(b) the sum of the aggregate amount of any partial terminations of the
Revolving Credit Commitment pursuant to this Section prior to the date
hereof and the amount of the Cliffstar Prepayment.
4. Amendment to Section 7.4. Section 7.4 of the Credit Agreement shall be
amended to read as follows:
Section 7.4. Financial Reports. The Company will maintain a standard
and modern system of accounting in accordance with sound accounting
practice and will furnish with reasonable promptness to the Agent and its
duly authorized representatives such information respecting the business
and financial condition of the Company and its Subsidiaries as may be
reasonably requested and, without any request, will furnish to the Agent:
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(a) as soon as available, and in any event within thirty (30)
days after the close of each monthly fiscal period of the Company, an
unaudited, consolidated balance sheet and consolidated statements of
income of the Company as at the end of and for such month and for the
year-to-date period then ended, in reasonable detail and, in the case
of the quarterly financial statements, stating in comparative form the
figures for the corresponding date and periods in the previous fiscal
year, all prepared in accordance with general accepted accounting
principles, subject to year-end audit adjustments and the absence of
footnotes; and
(b) as soon as available, and in any event within forty five (45)
days after the close of each quarterly fiscal period of the Company, a
copy of the Quarterly Report on Form 10-Q filed with the Securities
and Exchange Commission (the "SEC"); and
(c) as soon as available, and in any event within ninety (90)
days after the close of each fiscal year, a copy of the audit report
for such year and accompanying consolidated financial statements,
including balance sheet, reconciliation of change in stockholders'
equity, profit and loss statement and statement of source and
application of funds for the Company and its Subsidiaries showing in
comparative form the figures for the previous fiscal year of the
Company, all in reasonable detail, prepared and certified by Deloitte
& Touche or other independent public accountants of nationally
recognized standing selected by the Company and reasonably acceptable
to the Agent; and
(d) each of the consolidated financial statements furnished to
the Agent pursuant to paragraphs (a), (b) and (c) above shall be
accompanied by a Compliance Certificate in the form of Exhibit 7.4
attached hereto signed by its Vice President-Finance; and
(e) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which
the Company shall have filed with the SEC or any governmental agency
substituted therefor, or any national securities exchange, including
copies of the Company's Annual Report on Form 10-K, including
financial statements audited by Deloitte & Touche or other independent
public accountants of nationally recognized standing selected by the
Company and reasonably acceptable to the Agent; and
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all consolidated financial statements,
reports (including the Company's Annual Report to Shareholders) and
proxy statements so mailed; and
(g) as soon as available, and in any event within thirty (30)
days prior to the end of each fiscal year of the Company, a copy of
the Company's consolidated business plan and operating projections for
the following fiscal year,
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such plan to be in reasonable detail prepared by the Company and in
form reasonably satisfactory to the Agent.
5. Amendment to Section 7.6. Section 7.6 of the Credit Agreement shall be
amended to read as follows:
Section 7.6 Consolidation and Merger. Neither the Company nor any
Subsidiary will consolidate with or merge into or sell all or substantially
all of their respective assets to any Person, without the prior written
consent of the Banks.
6. Amendment to Section 7.8. Section 7.8 of the Credit Agreement shall be
amended to read as follows:
Section 7.8. Minimum Tangible Net Worth. The Company will continuously
maintain Tangible Net Worth (i) as of March 31, 2000 and through August 30,
2000 of not less than One Hundred Twenty Million Dollars ($120,000,000),
and (ii) as of August 31, 2000 and thereafter of not less than One Hundred
Twenty Five Million Dollars ($125,000,000).
7. Amendment to Section 7.9. Section 7.9 of the Credit Agreement shall be
amended to read as follows:
Section 7.9. Fixed Charge Coverage Ratio. The Company will not, as of
the last day of each fiscal quarter during the term hereof, permit its
Fixed Charge Coverage Ratio to be less than the following ratios:
Minimum Fixed Charge
--------------------
Period Coverage Ratio
------ --------------
April 1, 2000 to August 31, 2000 1.25 : 1.0
September 1, 2000 to February 27, 2001 1.50 : 1.0
February 28, 2001 and thereafter 1.75 : 1.0
8. Amendment to Section 7.10. Section 7.10 of the Credit Agreement shall be
amended to read as follows:
Section 7.10. Funded Debt to Capitalization. The Company will not, as
of the last day of each fiscal quarter during the term hereof, permit the
ratio of its (i) Funded Debt to (ii) the sum of Funded Debt plus Net Worth,
to exceed the following:
Maximum Funded Debt to
Period Capitalization Ratio
------ --------------------
April 1, 2000 to August 31, 2000 .55 : 1.0
September 1, 2000 and thereafter .50 : 1.0
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9. Amendment to Section 8.1. Section 8.1 of the Credit Agreement shall be
amended by deleting the word "or" at the end of subsection (g) and the period at
the end of subsection (h) and inserting in lieu thereof "; or" and adding the
following subsection (i):
(i) There shall occur a "Change in Control" with respect to the
Company. For this purpose, a "Change in Control" means any one of the
following:
(A) Any person or group of persons (as defined in Rule
13d-5 under the Securities Exchange Act of 1934),
together with its affiliates become the beneficial
owner, directly or indirectly, of more than 50% of the
then outstanding Common Stock of the Company or more
than 50% of the then outstanding securities of the
Company entitled generally to vote for the election of
directors ("Voting Securities");
(B) The Company merges with or into any Person, or any
Person merges with or into the Company in a transaction
in which the outstanding Voting Securities are
converted into or exchanged for cash, securities or
other property other than a transaction where the
Voting Securities outstanding immediately prior to such
transaction are converted into or exchanged for voting
stock of the surviving or transferee Person and such
voting stock constitutes a majority of the outstanding
shares of voting stock of such surviving or transferee
Person (immediately after giving effect to such
issuance); or
(C) All or substantially all of the assets of the Company
and its Subsidiaries, on a consolidated basis, are sold
or disposed of.
10. Amendment to Section 8.2. The first clause of Section 8.2 shall be
amended to read as follows:
When any Event of Default, other than an Event of Default described in
subsections (g), (h) or (i) of Section 8.1 hereof, has occurred and is
continuing, the Agent upon instruction of the Required Banks shall, by
notice to the Company, take either or both of the following actions:...
11. Amendment to Section 8.3. The first clause of Section 8.3 shall be
amended to read as follows:
When any Event of Default described in subsections 8.1(g), 8.1.(h) or
8.1(i) has occurred and is continuing,...
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12. Amendment to Section 9. Section 9 of the Credit Agreement shall be
amended by amending the definition of "Net Income" to read as follows:
"Net Income" shall mean consolidated net income determined in
accordance with generally accepted accounting principles, consistently
applied; provided, however, that for purposes of Section 7.9 of this
Agreement, Net Income will be calculated without giving effect to the
Company's February 29, 2000 $30,000,000 pre-tax extraordinary charge.
13. Defaults and Limited Waiver. The Company hereby acknowledges and agrees
that prior to giving any effect to the amendments to the Credit Agreement
contained herein, certain Events of Default have occurred under the Credit
Agreement on account of the Borrower's failure to comply with the provisions of
Sections 7.8, 7.9 and 7.10 for the fiscal period ending February 29, 2000. Upon
the effectiveness of this Amendment in accordance with Paragraph 13, below, the
Banks agree to waive the Events of Default described above as of February 29,
2000. This waiver shall not apply to any other Events of Default under the
Credit Agreement whether now existing or occurring after the date hereof.
14. Consent to Sale of Private Label Juice Business. Pursuant to Paragraph
8 of the Second Amendment to Credit Agreement and Consent dated as of December
29, 1999, the Banks consented to the sale of the Company's "private label" juice
business substantially on the terms outlined on Exhibit A to that Amendment.
Subsequent to the date of such Amendment, and in the process of finalizing the
terms of the sale, certain terms outlined in such Exhibit A were changed and the
sale was consummated on the terms set forth on Exhibit A hereto. The Company has
delivered the original Cliffstar Note to the Agent and concurrently with the
execution hereof will enter into a Collateral Pledge Agreement in favor of the
Agent with respect to the Cliffstar Note. The definition of "Loan Documents" in
the Credit Agreement shall be amended to include the Collateral Pledge Agreement
as one of the Loan Documents. Subject to the terms and conditions of this
Amendment the undersigned Banks hereby ratify and confirm their consent to the
sale by the Company of those assets comprising the Company's private label juice
business on the revised terms.
15. Field Exam. The Banks hereby reserve the right to require the Agent, on
their behalf, to conduct a field exam of the Company and the Company hereby
acknowledges such reservation and agrees to cooperate with the Agent in its
conduct of such an exam. The Company further agrees that such an exam would be
at the expense of the Company.
16. Fees.
(a) Amendment and Waiver Fee. In consideration of the Banks entering
into this Amendment and providing the waivers set forth herein, the Company
shall pay to the Agent for the pro rata account of the Banks a fully
earned, non-refundable fee in the amount of Three Hundred Eighty Seven
Thousand Five Hundred Dollars ($387,500), which fee shall be payable upon
execution of this Amendment.
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(b) Change of Control Fee. In the event of a sale of substantially all
of the assets of the Company or a majority of the outstanding stock of the
Company in one transaction or a series of related transactions, the Company
agrees to pay to the Agent, for the pro-rata account of the Banks a fully
non-refundable fee in an amount equal to three fourths percent (.75%) of
the Revolving Credit Commitment. The provision in this Amendment for
payment of such fees shall not constitute consent to such an action where
required pursuant to the Credit Agreement.
17. Effectiveness. This Amendment shall become effective as of April 13,
2000 upon the Agent's receipt of a copy of this Amendment duly executed by the
Company and the Banks, together with the following:
(a) a Collateral Pledge Agreement executed by the Company with respect
to the Note to the Company from the Buyer of its private label juice
business;
(b) a certificate of the Secretary of the Company as to the continued
effectiveness, without amendment, of the Articles of Incorporation and
Bylaws of the Company delivered to the Agent on March 14, 1999, the
signatures of officers of the Company authorized to execute this Amendment
and the attached resolutions authorizing the transactions contemplated by
this Amendment; and
(c) Payment of the amendment and waiver fee described in Paragraph
16(a), above.
18. Representations and Warranties of the Company. In order to induce the
Banks to enter into this Amendment and in recognition of the fact that the Banks
are acting in reliance thereupon, the Company represents and warrants to the
Banks as follows:
(a) The Company has the corporate power and authority to enter into,
deliver and issue this Amendment and to continue to borrow under the Credit
Agreement, as amended hereby. Each of the Credit Agreement, as amended
hereby, and this Amendment when duly executed on behalf of the Company,
constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms; and
(b) The execution and delivery of this Amendment and the prospective
borrowing and performance by the Company of its obligations under the
Credit Agreement, as amended hereby, have been authorized by all necessary
action on the part of the Company; and
(c) The representations and warranties of the Company contained in the
Credit Agreement, as amended hereby, are true and correct in all material
respects as of the date of this Amendment as though made on and as of the
date of this Amendment; and
(d) Except as provided in Paragraph 13, above, as of the date of this
Amendment no Event of Default, or default which with the passage of time
would
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constitute an Event of Default under the Credit Agreement, has occurred and
is continuing; and
(e) The Company is liable, without offset, counterclaim or other
defense, for all obligations of the Company to the Banks; and
(f) No information, financial statement, exhibit or report furnished
by the Company to the Agent in connection with the negotiation of, or
pursuant to, this Amendment, contains any material misstatement of fact, or
omits to state a material fact, or omits any fact necessary to make the
statements contained therein, in light of the circumstances in which they
were made, not misleading as of the date when made.
19. Counterparts. This Amendment may be executed in any number of
counterparts, and by different parties hereto on separate counterparts, and all
such counterparts taken together shall be deemed to constitute one and the same
instrument.
20. Miscellaneous.
(a) Each reference in the Credit Agreement to "this Agreement" shall
be deemed a reference to the Credit Agreement as amended by this Amendment.
(b) In accordance with Section 10.4 of the Credit Agreement, the
Company shall pay or reimburse the Agent for all of its expenses, including
reasonable attorneys' fees and expenses, incurred in connection with this
Amendment, for the preparation, examination and approval of documents in
connection herewith, the preparation hereof and expenses incurred in
connection herewith.
(c) This Amendment is being delivered and is intended to be performed
in the State of Wisconsin and shall be construed and enforced in accordance
with the laws of that state without regard for the principals of conflicts
of laws.
(d) Except as expressly modified or amended herein, the Credit
Agreement shall continue in effect and shall continue to bind the parties
hereto. This Amendment is limited to the terms and conditions hereof and
shall not constitute a modification, acceptance or waiver of any other
provision of the Credit Agreement.
[Signatures on next page]
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If this Third Amendment to Credit Agreement and Limited Waiver is
satisfactory to you, please sign the form of acceptance below. Dated and
effective as of the 13th day of April, 2000.
Very truly yours,
NORTHLAND CRANBERRIES, INC.
By: /s/ Xxxx Xxxxxxxxxxx
------------------------------------
Chairman and Chief Executive Officer
Accepted and agreed to as of the day and year last above written.
FIRSTAR BANK, N. A.
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Address:
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, Senior Vice
President
NORWEST BANK MINNESOTA, N. A.
By:____________________________________
Its:___________________________________
Address:
Sixth Street and Marquette Avenue
MAC N9305-114
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxx,
Assistant Vice President
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U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Address:
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx Xxxxxxx, Senior
Vice President
BANK OF AMERICA, NATIONAL
ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxx III
-----------------------------------
Address:
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx III, Senior
Vice President
ST. XXXXXXX BANK, F.S.B.
By: /s/ Xxxx Tans
-----------------------------------
Address:
00000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxx Tans, Vice President/
Commercial Banking
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M&I XXXXXXXX & ILSLEY BANK
By: /s/
-----------------------------------
and
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Address:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Vice
President
FLEET CAPITAL CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------
Address:
00000 Xxxxxxx Xxxxx, Xxxxx 000
Post Office Box 1641
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Vice
President
BANK ONE, NA
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Address:
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx,
Managing Director
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LaSALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
-----------------------------------
Address:
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx, First Vice
President
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