Northland Cranberries, Inc.
Third Amendment to Credit Agreement
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of
August 31, 1994, as heretofore amended (the "Credit Agreement"), between
Northland Cranberries, Inc., a Wisconsin corporation (the "Company"), and
you (the "Bank"). All capitalized terms used herein without definition
shall have the same meanings herein as such terms have in the Credit
Agreement.
The Company has requested that the Bank increase the amount of the
Revolving Credit and make certain other amendments to the Credit
Agreement, and the Bank is willing to do so under the terms and conditions
set forth in this Amendment.
1. Amendments.
Upon the satisfaction of the conditions precedent set forth in
Section 2 of this Amendment, the Credit Agreement shall be and hereby is
amended as follows:
(a) Section 1.1(a) of the Credit Agreement shall be amended by
striking the amount "$21,000,000" appearing therein and substituting
therefor the amount "$45,000,000".
(b) The last sentence of Section 1.2(b) of the Credit Agreement
shall be amended in its entirety to read as follows:
"The Term Credit Note Two shall be expressed to mature in eight
(8) semi-annual installments of principal, commencing on
November 30, 1996 and continuing on the last day of each May and
November occurring thereafter to and including May 31, 2000,
with the first seven (7) installments to be in the amount of
$286,000 and with the final installment to be in the amount of
$1,998,000."
(c) Section 1.3(a) of the Credit Agreement shall be amended in its
entirety to read as follows:
"Section 1.3. The Acquisition Credit. (a) Subject to all
of the terms and conditions hereof, the Bank agrees to extend an
Acquisition Credit 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 Acquisition Credit Termination Date. The Acquisition Credit
may be utilized by the Company in the form of loans
(individually an "Acquisition Loan" and collectively the
"Acquisition Loans"), provided that the aggregate amount of the
Acquisition Loans outstanding at any one time shall not exceed
$10,000,000 (the "Acquisition Credit Commitment").
Notwithstanding any provision of this Agreement to the contrary,
each Acquisition Loan shall mature on the earlier of the date
that is one year after the date such Acquisition Loan is made or
September 1, 1999."
(d) Section 3.1(b) of the Credit Agreement shall be amended by
striking the phrase "1/4 of 1% per annum" appearing therein and
substituting therefor the phrase "1/8 of 1% per annum".
(e) Section 4 of the Credit Agreement shall be amended and restated
in its entirety to read as follows:
"Section 4. The Collateral.
The Revolving Credit Note, the Term Notes, the Acquisition
Credit Note and the other obligations of the Company hereunder
relating thereto shall be secured by (i) a valid and perfected
first priority liens on certain crops of the Company pursuant to
the terms of the Security Agreement Re: Crops, (ii) valid and
perfected first priority liens on the fixtures and real property
of the Company located in Juneau County, Wisconsin, consisting
of approximately 1,236.8 acres acquired by the Company from the
Yellow River Cranberry Company (the "Yellow River Xxxxx"), (iii)
valid and perfected first priority liens on the fixtures and
real property of the Company located in Price County, Wisconsin,
consisting of approximately 2,460 acres (the "Fifield Xxxxx"),
(iv) certain machinery and equipment of the Company located in
Wisconsin Rapids, Wisconsin pursuant to the terms of the
Security Agreement Re: Equipment, (v) valid and perfected first
priority liens on the fixtures and real property of the Company
located in Xxxxxx, Massachusetts, consisting of approximately
1,904 acres acquired by the Company from United Cape Cod Limited
Partnership (the "Xxxxxx Xxxxx"), (vi) valid and perfected first
priority liens on the fixtures and real property of the Company
located in Wood County, Wisconsin consisting of approximately
106 acres acquired from Xxxxx X. Xxxxx and Xxxxxx X. Xxxxx (the
"Xxxxx Xxxxx"), (vii) valid and perfected first priority liens
on the fixtures and real property of the Company located in the
Town of Armenia, Juneau County, Wisconsin, consisting of
approximately 469 acres acquired from the Yellow River Cranberry
Company (the "F Xxxxx") and (viii) valid and perfected first
priority liens on the fixtures and real properties of the
Xxxxxx, Nekoosa and a portion of the Xxxxx divisions of the
Company located in Wood and Xxxxxxx Counties, Wisconsin.
The Company agrees that it will from time to time at the
request of the Bank execute and deliver such documents and do
such acts and things as the Bank may reasonably request in order
to provide for or perfect such liens.
Notwithstanding anything herein to the contrary, (i) if the
Company reduces that amount of the Revolving Credit Commitment
to $25,000,000 pursuant to the terms of Section 3.5 hereof and
no Default or Event of Default then exists, the Bank shall
execute and deliver to the Company such releases and
satisfactions of mortgage as shall be necessary so that the
Yellow River Xxxxx and the Fifield Xxxxx are no longer subject
to any lien in favor of the Bank, (ii) if, after November 4,
1996, the Company either incurs long-term indebtedness or sells
equity securities issued by it, in each case, the net proceeds
of which are used to satisfy all indebtedness evidenced by Term
Note Three or if the Company satisfies such indebtedness out of
cash flow, the Bank shall execute and deliver to the Company
such releases and satisfactions of mortgage as shall be
necessary so that the Xxxxxx Xxxxx, the Xxxxx Xxxxx and the F
Xxxxx are no longer subject to any lien in favor of the Bank and
(iii) if, after November 4, 1996, the Company (a) either incurs
long-term indebtedness or sells equity securities issued by it,
in each case, the net proceeds of which are used to satisfy all
indebtedness evidenced by the Acquisition Credit Note or if the
Company satisfies such indebtedness out of cash flow, and (b)
terminates the Acquisition Credit Commitment in whole, the Bank
shall execute and deliver to the Company such releases and
satisfactions of mortgage as shall be necessary so that the real
properties of the Xxxxxx, Nekoosa and a portion of the Xxxxx
divisions of the Company located in Wood and Xxxxxxx Counties,
Wisconsin are no longer subject to any lien in favor of the
Bank. For purposes of the foregoing sentence, the phrase
"long-term indebtedness" shall mean indebtedness which matures
no earlier than five years after the date such indebtedness is
incurred and the phrase "net proceeds", when used in conjunction
with the issuance and sale of equity securities, shall mean
gross proceeds less reasonable costs directly incurred and
payable as a result thereof."
(f) Section 7.4 of the Credit Agreement shall be amended by (i)
deleting the period appearing after subsection (e) thereof and
substituting therefor a semicolon and (ii) adding the following new
subsections (f) and (g) immediately after subsection (e) as so amended:
"(f) as soon as available, and in any event within 30 days
after the close of each month, a copy of the consolidated
balance sheet of the Company and its Subsidiaries as of the last
day of such period and the consolidated statement of income for
the Company and its Subsidiaries for the month and the fiscal
year-to-date period then ended, each in reasonable detail,
prepared by the Company in accordance with generally accepted
accounting principles consistently applied and certified to by
its Vice President-Finance; and
(g) as soon as available, and in any event within 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, such plan to be in
reasonable detail prepared by the Company and in form reasonably
satisfactory to the Bank."
(g) Section 7.8 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Section 7.8. Shareholders' Equity. The Company will at all
times during the periods indicated below maintain Shareholders'
Equity in an amount not less than:
Shareholder's Equity
from and including to and including will not be less than
8/31/96 5/31/97 $60,000,000
6/01/97 5/31/98 $65,000,000
6/01/98 all times thereafter $70,000,000
(h) Section 7.9 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Section 7.9. Fixed Charge Coverage Ratio. The Company will
not, as of the last day of each fiscal quarter commencing with
the fiscal quarter ending August 31, 1997, permit the ratio of:
(a) the sum of Net Income plus the increase in Deferred Taxes
shown on the Company's audited balance sheet, if any, plus
Depreciation and Amortization expense, plus total Interest
Expense (in each case, for the four fiscal quarters then ended),
to (b) total Interest Expense (for the same four fiscal quarters
then ended) plus the scheduled payments of principal on long
term debt that will be payable in such period of four fiscal
quarters (not including the principal amount of the Loans
outstanding under this Agreement), to be less than 1.25 to 1 on
the last day of each fiscal quarter."
(i) Section 7.10 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Section 7.10. Funded Debt to Shareholders' Equity Ratio;. The
Company will not permit the ratio of its Funded Debt to
Shareholders' Equity to exceed 2.0 to 1 at any time."
(j) Section 7.11 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Section 7.11. Net Income;. The Company and its Subsidiaries
will not have a net loss of more than $2,000,000 for each of the
first three fiscal quarters of the Company's 1997 fiscal year
and will not have a net loss of more than $1,500,000 for any
fiscal quarter ending thereafter."
(k) Section 7.13(f) of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"(f) indebtedness incurred to refinance Term Loan Three and/or
the Acquisitions Loans made hereunder; and"
(l) Section 7.16 of the Credit Agreement shall be amended and
restated in its entirety to read as follows:
"Section 7.16. Distributions. The Company will not, directly
or indirectly, (a) declare, make or incur any liability to pay
any dividend on or make any other distribution in respect of any
class or series of its capital stock (other than dividends
payable solely in its capital stock) or (b) purchase, repurchase
or otherwise acquire or retire any of its capital stock;
provided, however, that so long as no Default or Event of
Default shall have occurred and be continuing the Company may
(i) repurchase its capital stock provided the aggregate amount
expended for such repurchases does not exceed $2,000,000, (ii)
pay dividends in an amount not to exceed $0.07 per share during
each of the first three fiscal quarters of the Company's 1996
fiscal year, and (iii) pay dividends in an amount not to exceed
$0.08 per share during the fourth fiscal quarter of the
Company's 1996 fiscal year and (iv) during each fiscal year of
the Company after the 1996 fiscal year, pay dividends in an
amount not to exceed 50% of the Company's Net Income for the
fiscal year immediately preceding the fiscal year in which such
dividend is to be paid."
(m) Section 7.21 of the Credit Agreement shall amended and restated
in its entirety to read as follows:
"Section 7.21. Intentionally Omitted."
(n) The definition of the terms "Acquisition Credit Termination
Date" and "Termination Date" appearing in Section 9 of the Credit
Agreement shall each be amended in their entirety to read, respectively,
as follows:
""Acquisition Credit Termination Date" shall mean September 1,
1999, any later date to which such date may be extended from
time to time pursuant to Section 1.3(b) hereof, or such earlier
date on which the Acquisition Credit Commitment is terminated in
whole pursuant to Sections 3.5, 8.2 or 8.3 hereof.
"Revolving Credit Termination Date" shall mean September 1,
1999, any later date to which such date may be extended from
time to time pursuant to Section 1.1(b) hereof, or such earlier
date on which the Revolving Credit Commitment is terminated in
whole pursuant to Sections 3.5, 8.2 or 8.3 hereof."
(o) The definition of the term "Applicable LIBOR Rate Margin"
appearing in Section 9 of the Credit Agreement shall be amended in its
entirety to read as follows:
""Applicable LIBOR Rate Margin" shall mean (a) with respect to
the Revolving Credit Loans and the Revolving Credit Note, 1.25%
per annum on the first $25,000,000 of principal amount
outstanding under the Revolving Credit and 2.00% on any
principal amount in excess of $25,000,000 outstanding under the
Revolving Credit, (b) with respect to the Acquisition Loans,
Term Loan One, Term Loan Two, the Acquisition Credit Note, Term
Credit Note One and Term Credit Note Two, 2% per annum, and (c)
with respect to Term Loan Three and Term Credit Note Three, 2.5%
per annum."
(p) Exhibit A-1 to the Credit Agreement and the Revolving Credit
Note shall each be amended by (i) replacing the amount "$21,000,000"
appearing in the upper left corner thereof with the amount "$45,000,000"
and (ii) replacing the phrase "Twenty-One Million Dollars ($21,000,000)"
appearing in the first paragraph thereof with the phrase "Forty-Five
Million Dollars ($45,000,000)".
(q) The first paragraph of Exhibit B-2 to the Credit Agreement and
of the Term Credit Note Two shall each be amended in their entirety to
read as follows:
"For value received, the undersigned, Northland Cranberries,
Inc., a Wisconsin corporation (the "Company"), promises to pay
to the order of Xxxxxx Trust and Savings Bank (the "Bank"), at
the principal office of Xxxxxx Trust and Savings Bank in
Chicago, Illinois, the principal sum of Four Million Dollars
($4,000,000), in eight (8) consecutive semi-annual installments,
commencing on November 30, 1996 and continuing on the last day
of each November and May occurring thereafter to and including
May 31, 2000, with the first seven (7) such installments to each
be in the amount of $286,000 and the final such installment to
be in the amount of $1,998,000."
(r) The Bank shall type the following legend on Revolving Credit
Note:
"This Note has been amended by a Third Amendment to Credit
Agreement dated as of November 4, 1996 between the Company and
the Bank, including a change in the principal amount hereof, to
which Amendment reference is hereby made for a statement of the
terms thereof."
(s) The Bank shall type the following legend on Term Credit Note
Two:
"This Note has been amended by a Third Amendment to Credit
Agreement dated as of November 4, 1996 between the Company and
the Bank, including a change in the amortization hereof, to
which Amendment reference is hereby made for a statement of the
terms thereof."
2. CONDITIONS PRECEDENT.
The effectiveness of this Amendment is subject to the satisfaction of
all of the following conditions precedent:
(a) The Company and the Bank shall have executed and delivered this
Amendment.
(b) The Bank shall have received the following (each to be properly
executed and completed) and the same shall have been approved as to form
and substance by the Bank:
(i) supplements to the existing Collateral Documents to confirm
and assure that the same secure the various obligations of the
Company under the Credit Agreement as amended hereby;
(ii) endorsements (or binding commitments therefor) to each
existing policy of title insurance insuring the liens of those
existing Collateral Documents creating liens on real property to
confirm that such policy insures that such Collateral Documents, as
supplemented and contemplated by this Amendment, secure the various
obligations of the Company under the Credit Agreement as amended
hereby
(iii) a Mortgage and Security Agreement with Assignment of
Rents from the Company covering the Fifield Xxxxx and a Mortgage and
Security Agreement with Assignment of Rents from the Company covering
the F Xxxxx (the "New Wisconsin Mortgages");
(iv) such financing statements relating to the New Wisconsin
Mortgages as the Bank may require;
(v) a mortgagee's policy of title insurance (or a binding
commitment therefor) in the amount of $12,000,000, with a waiver of
coinsurance insuring the liens of the New Wisconsin Mortgages to be a
valid first liens subject to no defects or objections which are
unacceptable to the Bank, together with such direct access
reinsurance agreements and endorsements (including without limitation
a revolving credit endorsement and doing business, usury and zoning
endorsements) as the Bank may require;
(vi) copies (executed or certified, as may be appropriate) of
all legal documents or proceedings taken in connection with the
execution and delivery of this Amendment and the other instruments
and documents contemplated hereby to the extent the Bank or its
counsel may reasonably request.
(c) The Bank shall have received from the Company a non-refundable
closing fee in an amount agreed to by the Bank and the Company.
(d) Legal matters incident to the execution and delivery of this
Amendment and the other instruments and documents contemplated hereby
shall be satisfactory to the Bank and its counsel; and the Bank shall have
received the favorable written opinion of counsel for the Company in form
and substance satisfactory to the Bank and its counsel.
In the event that all of the foregoing conditions are satisfied
except for condition (b)(ii) with respect to the Xxxxxx Xxxxx, then in
that event, this Amendment shall become effective but the Company shall,
not later than November 30, 1996, provide to the Bank the endorsement
which will satisfy such condition.
3. REPRESENTATIONS.
In order to induce the Bank to execute and deliver this Amendment,
the Company hereby represents to the Bank that as of the date hereof, the
representations and warranties set forth in Section 5 of the Credit
Agreement are and shall be and remain true and correct in all material
respects (except that the representations contained in Section 5.3 shall
be deemed to refer to the most recent financial statements of the Company
delivered to the Bank) and no Default or Event of Default has occurred and
is continuing under the Credit Agreement or shall result after giving
effect to this Amendment.
4. MISCELLANEOUS.
(a) Except as specifically amended herein, the Credit Agreement
shall continue in full force and effect in accordance with its original
terms. Reference to this specific Amendment need not be made in the
Credit Agreement, the Notes, or any other instrument or document executed
in connection therewith, or in any certificate, letter or communication
issued or made pursuant to or with respect to the Credit Agreement, any
reference in any of such items to the Credit Agreement being sufficient to
refer to the Credit Agreement as amended hereby.
(b) The Company agrees to pay on demand all costs and expenses of or
incurred by the Bank in connection with the negotiation, preparation,
execution and delivery of this Amendment, including the fees and expenses
of counsel for the Bank.
(c) This Amendment may be executed in any number of counterparts,
and by the different parties on different counterpart signature pages, 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.
Dated as of this 4th day of November, 1996.
Northland Cranberries, Inc.
By /s/ Xxxx Xxxxxxxxxxx
Its President
Accepted and agreed to in Chicago, Illinois as of the date and year
last above written.
Xxxxxx Trust and Savings Bank
By /s/
Its Vice President
Consented and agreed to as of the date and year last above written.
Mercantile bank of St. Louis,
National Association
By /s/
Its
Norwest Bank Minnesota,
National Association
By /s/
Its Vice President
