EXHIBIT 10.2*
▇▇▇▇▇▇▇▇▇ FARMS, INC.
NINTH AMENDMENT TO CREDIT AGREEMENT
▇▇▇▇▇▇ Trust and Savings Bank
Chicago, Illinois
SunTrust Bank
Atlanta, Georgia
Trustmark National Bank
Jackson, Mississippi
AmSouth 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 Revolving Credit to be made available
to the Company through July 31, 2006. The Company now applies to the Banks to
amend the Credit Agreement to extend the Termination Date thereof from July 31,
2006, to July 31, 2009, to change the definitions of the terms "Applicable
Domestic Rate Margin" and "Applicable Eurodollar Margin" and to amend certain
other provisions of 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, 2006" appearing in the last sentence of Section
1.1(a) of the Credit Agreement shall be replaced with the date "July 31, 2009",
and the Revolving Credit Termination Date under the Credit Agreement shall be
July 31, 2009.
1.2. The eighth sentence of Section 1.6 of the Credit Agreement shall be
amended to read as follows:
"In consideration of the issuance of L/Cs the Company agrees to pay ▇▇▇▇▇▇
a commission fee in the amount of the rate per annum (computed on the
basis of a 360 day year and actual days elapsed) equal to the Applicable
Eurodollar Margin of the face
amount of each standby L/C (other than the Bond Letter of Credit) issued
hereunder payable quarterly in arrears on the last day of each calendar
quarter, commencing June 30, 2004, and on the Termination Date, and
one-quarter of one percent (0.25%) per annum (computed as aforesaid) of
the face amount of each trade letter of credit issued hereunder, payable
upon negotiation thereof".
1.3. The definitions of the terms "Applicable Domestic Rate Margin" and
"Applicable Eurodollar Margin" appearing in Section 4 of the Credit Agreement
shall be amended to read as follows:
" "Applicable Domestic Rate Margin" with respect to Domestic Rate
Loans "Applicable Eurodollar Margin" with respect to Eurodollar Loans and
"Applicable Commitment Fee Margin" with respect to the commitment fee
payable under Section 2.1 hereof, shall each mean the rate specified for
such obligation below in Levels I, II, III and IV for the range of Funded
Debt Ratio specified for each Level:
FUNDED DEBT APPLICABLE APPLICABLE APPLICABLE
RATIO EURODOLLAR DOMESTIC RATE COMMITMENT FEE
MARGIN MARGIN MARGIN
------------------- ---------- ------------- --------------
LEVEL I <35% 1.00% 0.00% 0.20%
LEVEL II > or = 35% and <45% 1.25% 0.00% 0.20%
LEVEL III > or = 45% and <55% 1.50% 0.00% 0.25%
LEVEL IV > or = 55% 2.00% 0.00% 0.30%
Not later than ten (10) Business Days after receipt by the Banks of the
Compliance Certificate called for by Section 7.4(c) hereof for the
applicable fiscal quarter, the Agent shall determine the Funded Debt Ratio
for the applicable period and shall promptly notify the Company of such
determination and of any change in the Applicable Eurodollar Margin and
Applicable Commitment Fee Margin (collectively, "Applicable Margins")
resulting therefrom. Any such change in the Applicable Margins shall be
effective as of the date the Agent so notifies the Company with respect to
all Eurodollar Loans and Eurodollar Portions outstanding, and commitment
fees payable, on such date, and such new Applicable Margins shall continue
in effect until the effective date of the next quarterly redetermination
in accordance with this Section. Each determination of the Funded Debt
Ratio and Applicable Margins by the Agent in accordance with this Section
shall be conclusive and binding on the Company absent manifest error. From
May 18, 2004, until the Applicable Margins are first adjusted pursuant
hereto, the Applicable Margins shall be those set forth in Level I above."
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1.4. Section 4.1 of the Credit Agreement shall be amended by adding the
following definition thereto in the appropriate alphabetical order:
"Change of Control" means any of (a) the acquisition by any "person"
or "group" (as such terms are used in sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended) at any time of beneficial
ownership of a majority of the voting power in the elections of directors,
other than acquisitions of such interests by the estate of ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, deceased, the direct lineal descendents of ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, deceased, the direct lineal descendants of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
deceased, their spouses, any trusts for the benefit of any of the
foregoing, and any employee stock option plan established by the Company,
(b) the failure of individuals who are members of the board of directors
(or similar governing body) of the Company on May 18, 2004 (together with
any new or replacement directors whose initial nomination for election was
approved by a majority of the directors who were either directors on such
date or previously so approved) to constitute a majority of the board of
directors (or similar governing body) of the Company, or (c) any "Change
of Control" (or words of like import), as defined in any agreement or
indenture relating to any issue of Indebtedness for Borrowed Money or any
equity securities of the Company shall occur.
1.5. Section 7.9 of the Credit Agreement shall be amended to read as
follows:
"Section 7.9. Consolidated Tangible Net Worth. The Company will
maintain at all times Consolidated Tangible Net Worth during each fiscal
year of the Company in an amount not less than:
(a) during each of the last two fiscal quarters of the fiscal year
ending October 31, 2004, $180,000,000 plus any Net Proceeds of Stock
issued during either quarter or quarters of such fiscal year plus 60% of
an amount (but not less than zero) equal to (i) the Company's Consolidated
Net Income through the preceding quarter-end in such fiscal year, minus
(ii) the lesser of (x) $2,500,000 for each completed fiscal quarter in
such fiscal year and (y) the aggregate amount of all dividends actually
paid during such fiscal year through the last day of such fiscal quarter
rounded to the next highest $100,000; and
(b) during each fiscal quarter of each fiscal year of the Company
thereafter, an amount equal to the sum of the minimum amount required to
be maintained on the last day of the preceding fiscal year of the Company
plus the Net Proceeds of Stock issued in the last quarter of the preceding
fiscal year and any preceding quarter or quarters of the then current
fiscal year plus 60% of an amount (but not less than zero) equal to (i)
the Company's Consolidated Net Income, if any, through the immediately
preceding fiscal quarter end of such fiscal year minus (ii) the lesser of
(x) $2,500,000 for each completed fiscal quarter in such fiscal year and
(y) the aggregate amount of all dividends actually paid during such fiscal
year through the last day of such fiscal quarter rounded to the next
highest $100,000."
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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, 2004 $ 40,000,000 Unlimited
October 31, 2005 $ 120,000,000 Unlimited
October 31, 2006 $ 30,000,000 $7,500,000
October 31, 2007 Prior Year's $7,500,000
Depreciation
October 31, 2008 Prior Year's $7,500,000
Depreciation
October 31, 2009 Prior Year's $7,500,000
Depreciation
Thereafter Prior Year's $7,500,000
Depreciation
1.7. The Credit Agreement shall be amended by adding the following
provision thereto as Section 7.22 thereof:
"Section 7.22. No Guaranty of Estate Indebtedness. The Company shall
not, and shall not permit any Subsidiary to, directly or indirectly
guaranty the payment or collection of any Indebtedness for Borrowed Money
of the Estate of ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, deceased, or of the executors,
co-executors, or any of them, of such estate."
1.8. Section 8.1(c) of the Credit Agreement shall be amended by adding
the phrase "and 7.22" immediately after the phrase "and 7.19" appearing therein.
1.9. Section 8.1 of the Credit Agreement shall be amended by replacing
the period at the end of subsection (1) thereof with "; or" and by adding the
following provision thereto as subsection(m):
"(m) a Change of Control shall occur."
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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. Each Guarantor Subsidiary shall have executed the Guarantors'
Acknowledgment attached hereto.
2.3. The Agent shall have received the favorable written opinion of
counsel for the Company in the form of Exhibit A attached hereto.
2.4. 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.
2.5. The Agent shall have received for the ratable account of the Banks a
non-refundable front-end fee in an amount of $200,000.
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. 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.
4.2. 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.
[SIGNATURE PAGES TO FOLLOW]
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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 herein above set forth.
Dated as of May 18, 2004.
▇▇▇▇▇▇▇▇▇ FARMS, INC.
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its CFO
Accepted and agreed to as of the day and year last above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
individually and as Agent
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Its Vice President
SUNTRUST BANK
By /s/ ▇▇▇▇▇▇▇ Ladrey
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Its Managing Director
By______________________
Its___________________
TRUSTMARK NATIONAL BANK
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Its First Vice President
AMSOUTH BANK
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its Vice President
Signature Page
▇▇▇▇▇▇▇▇▇ Farms, Inc.
Ninth Amendment to Credit Agreement
▇▇▇▇▇▇ TRUST
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 May 18, 2004.
▇▇▇▇▇▇▇▇▇ FARMS, INC. (FOODS DIVISION)
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its CFO
▇▇▇▇▇▇▇▇▇ FARMS, INC. (PRODUCTION
DIVISION)
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its CFO
▇▇▇▇▇▇▇▇▇ FARMS, INC. (PROCESSING
DIVISION)
By /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
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Its CFO
EXHIBIT A
FORM OF OPINION OF COUNSEL