Gold Kist Inc – ‘10-Q’ for 12/31/99 – EX-7

On:  Monday, 2/14/00   ·   For:  12/31/99   ·   Accession #:  215994-0-2   ·   File #:  2-62681

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Quarterly Report   —   Form 10-Q
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-Q        Gk10Q                                                 16±    63K 
 2: EX-6        Ex B-10(I)(6)                                          4±    15K 
 3: EX-7        Ex B-10(I)(7)                                          8±    29K 
 4: EX-27       Ex B-27                                                1      6K 

EX-7   —   Ex B-10(I)(7)
Exhibit Table of Contents

SIXTH AMENDMENT TO                  
CREDIT AGREEMENT                  

This Sixth Amendment to Credit Agreement (this                        
"Amendment"), dated as of December 21, 1999, is made and                        
entered into by and among GOLD KIST INC., a cooperative                         
marketing association organized and existing under the laws of                  
the State of Georgia (the "Borrower"), the various banks and                    
other lending institutions parties hereto (collectively, the                    
"Lenders" and individually, a "Lender"), and COOPERATIEVE                       
CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND",                  
NEW YORK BRANCH ("Rabobank") as Agent for the Lenders.                          

W I T N E S S E T H:                

WHEREAS, the parties hereto are parties to that certain               
Credit Agreement, dated as of August 4, 1998, as amended by                     
the First Amendment dated September 30, 1998, as amended by                     
the Second Amendment dated October 13, 1998, as amended by the                  
Third Amendment dated December 3, 1998, as amended by the                       
Fourth Amendment dated as of April 30, 1999, and as amended by                  
the Fifth Amendment dated as of November 29, 1999 (the "Credit                  
Agreement"); and                                                                

WHEREAS, the Borrower has requested that the Lenders                  
reduce the Revolving Credit Commitment from $125,000,000 to                     
$100,000,000, reduce the 364-Day Line of Credit Commitment                      
from $125,000,000 to $100,000,000, modify certain of the                        
financial covenants, and make certain other changes to the                      
Credit Agreement;                                                               

NOW, THEREFORE, in consideration of the premises and for              
other good and valuable consideration, the receipt and                          
sufficiency of which is hereby acknowledged, the parties                        
hereto agree as follows:                                                        

Section  1.  Amendments.   The terms of the Credit                    
Agreement are hereby amended as follows:                                        

(a)  Amendments to Section 1.1.  Section 1.1 of the         
Credit Agreement is amended by deleting therefrom the defined                   
terms "Revolving Credit Commitment" and 364-Day Line of Credit                  
Commitment" and substituting the following therefor:                            

"Revolving Credit Commitment" shall mean, at      
any time for any Lender, the amount set forth opposite                
such Lender's name on the signature pages to the Sixth                
Amendment to Credit Agreement under the heading                       
"Revolving Credit Commitment", as the same may be                     
increased or decreased from time to time as a result of               
any reduction thereof pursuant to Section 3.3 of this                 
Agreement, any assignment thereof pursuant to Section                 
10.5 of this Agreement or any amendment thereof pursuant              
to Section 10.2 of this Agreement.                                    

"364-Day Line of Credit Commitment" shall mean,   
at any time for any Lender, the amount set forth opposite             
such Lender's name on the signature pages to the Sixth                
Amendment to Credit Agreement under the heading "364-Day              
Line of Credit Commitment", as the same may be increased              
or decreased from time to time as a result of any                     
reduction thereof pursuant to Section 3.3 of this                     
Agreement, any assignment thereof pursuant to Section                 
10.5 of this Agreement or any amendment thereof pursuant              
to Section 10.2 of this Agreement.                                    

(b)  Amendment to Section 6.1(a).  Section 6.1(a) of        
the Credit Agreement is amended by deleting it in its entirety                  
and substituting the following therefor:                                        

"(a) As soon as practicable and in any event      
within 45 days after the end of each of the first eleven              
months of each fiscal year, (i) unaudited consolidated                
and consolidating and business segment statements of                  
sales and margins of the Borrower and its Subsidiaries                
for such month and for the period from the beginning of               
the current fiscal year to the end of such month and (ii)             
an unaudited consolidated and consolidating balance sheet             
of the Borrower and its Subsidiaries as at the end of                 
such month, setting forth, with respect to such                       
consolidated statements of sales and margins and such                 
consolidated balance sheet, in comparative form, figures              
for the corresponding period in the preceding fiscal                  
year,  and, as soon as practicable and in any event                   
within 45 days after the end of each of the first three               
fiscal quarters of each fiscal year (iii)  unaudited                  
consolidated and consolidating statements of income and               
cash flow of the Borrower and its Subsidiaries for such               
quarter and for the period from the beginning of the                  
current fiscal year to the end of such quarter and (iv)               
an unaudited consolidated and consolidating balance sheet             
of the Borrower and its Subsidiaries as at the end of                 
such quarter, setting forth, with respect to such                     
consolidated statements of income and cash flow and such              
consolidated balance sheet, in comparative form, figures              
for the corresponding period in the preceding fiscal year             
all in reasonable detail and certified by the chief                   
financial officer or Treasurer of the Borrower as having              
been prepared in accordance with GAAP;"                               

(c)  Amendment to Section 7.1(b).  Section 7.1(b) of        
the Credit Agreement is amended by deleting it in its entirety                  
and substituting the following therefor:                                        

"(b) Minimum Consolidated Tangible Net Worth.     
The Borrower's Consolidated Tangible Net Worth (less any              
gain or loss as a result of accumulated other                         
comprehensive income, as defined by GAAP, or any  amount              
shown as "unrealized gain on marketable equity                        
securities" on the Borrower's financial statements                    
delivered pursuant to Section 6.1)  will at no time be                
less than $255,000,000 plus the sum of (i) 50% of the                 
cumulative Reported Net Income of the Borrower and its                
Consolidated Subsidiaries during the period commencing                
with Borrower's third quarter, 2000 (taken as one                     
accounting period), calculated quarterly at the end of                
each Fiscal Quarter, and (ii) 100% of the cumulative Net              
Proceeds of Capital Stock received during any period                  
after the Closing Date, but excluding from such                       
calculations of Reported Net Income for purposes of this              
clause any Fiscal Quarter in which the Reported Net                   
Income of the Borrower and its Consolidated Subsidiaries              
is negative."                                                         

(d)  Amendment to Section 7.1(d).  Section 7.1(d) of        
the Credit Agreement is amended by deleting it in its entirety                  
and substituting the following therefor:                                        

"(d) Fixed Charge Coverage. The Borrower shall    
not permit the ratio of (a) EBIT plus Consolidated          
Lease Expense to (b) Consolidated Interest Expense          
plus Consolidated Lease Expense for each fiscal             
quarter set forth below, calculated (x) for the             
first three fiscal quarters of fiscal year 1999,            
quarterly for the fiscal quarter then ending, (y)           
for the last fiscal quarter of fiscal year 1999 and         
the first three fiscal quarters of fiscal year 2000,        
quarterly for the fiscal quarter then ending and the        
preceding three fiscal quarters, and (z) for the            
last fiscal quarter of fiscal year 2000 and                 
thereafter, quarterly for the fiscal quarter then           
ending and the preceding seven fiscal quarters, to          
be less than the ratio set forth opposite the               
relevant fiscal quarter in the following table:             

Fiscal Quarter                    Ratio           

First Quarter, 1999                1.80           

Second Quarter, 1999                .50           

Third Quarter, 1999                 .75           

Fourth Quarter, 1999 through                      
Second Quarter, 2000             1.45         

Third Quarter, 2000                1.35           

Fourth Quarter, 2000 and                          
thereafter                         1.75"          

(e)  Amendment to Section 7.1(e).  Section 7.1(e) of        
the Credit Agreement is amended by deleting it in its entirety                  
and substituting the following therefor:                                        

"(e) Senior Debt Coverage.  The Borrower shall    
not permit the ratio of (a) Consolidated Senior Debt to               
(b) EBITDA, for each fiscal quarter set forth below,                  
calculated for the fiscal quarter then ending and the                 
preceding three fiscal quarters, to be more than the                  
ratio set forth opposite the relevant fiscal quarter in               
the following table:                                                  

Fiscal Quarter                     Ratio          

First Quarter, 1999 through                       
Third Quarter, 1999           3.00      

Fourth Quarter, 1999 through                      
First Quarter, 2000           2.75      

Second Quarter, 2000 through                      
Fourth Quarter 2000           3.50      

First Quarter 2001 and                            
thereafter                    3.00      

provided that, for purposes of computing the ratio as of              
the end of the First Quarter, 1999, EBITDA shall be                   
EBITDA for such quarter and for the preceding two                     
quarters, plus $3,400,000."                                           

(f)  Amendment to Section 7.4.  Section 7.4 of the          
Credit Agreement is amended by deleting therefrom subsections                   
(u) and (v) and substituting the following therefor:                            

"(u) purchase the assets described in Section     
7.3(i) hereof;                                                                  

(v)  the purchase of the SSC Securities; and      

(w)  make or permit to remain outstanding         
investments in any money           market fund that invests                     
only in investments described in subsections (c), (d), (e),                     
(f), (g), or (h) of this Section 7.4."                                          

(g)  Amendment to Section 7.11.  Section 7.11 of the        
Credit Agreement is amended by deleting it in its entirety and                  
substituting the following therefor:                                            

"Section 7.11.   Capital Expenditures.  The       
Borrower and its Subsidiaries shall not, on a                         
consolidated basis, directly or indirectly, make Capital              
Expenditures in the aggregate in fiscal year 1998                     
exceeding $84,000,000, in fiscal year 1999 exceeding                  
$45,000,000, in fiscal year 2000 exceeding $75,000,000,               
in fiscal year 2001 exceeding $45,000,000 plus the amount             
(if any) by which the Borrower's Capital Expenditures                 
were less than $75,000,000 in fiscal year 2000, in fiscal             
year 2002 exceeding $45,000,000 plus the amount (if any)              
by which the Borrower's Capital Expenditures in fiscal                
year 2001 were less than the amount available for Capital             
Expenditures in fiscal year 2001, and in any fiscal year              
thereafter exceeding $45,000,000 plus an amount up to                 
$15,000,000 of any funds available but not expended in                
the previous fiscal year; provided that, the Borrower's               
permitted Capital Expenditures in fiscal year 1999 shall              
be reduced dollar for dollar by the amount that                       
Borrower's Capital Expenditures in 1998 exceed                        
$70,000,000."                                                         

Section 2.  Conditions Precedent.  This Sixth Amendment               
and the obligations of the Lenders evidenced hereunder shall                    
not be effective until the Administrative Agent shall have                      
received a Certificate executed by the Chief Executive Officer                  
or Chief Financial Officer of the Borrower stating that, to                     
the best of his knowledge and based upon an examination                         
sufficient to enable him to make an informed statement, (i)                     
all of the representations and warranties made or deemed to be                  
made under the Credit Agreement are materially true and                         
correct as of the date of this Sixth Amendment to Credit                        
Agreement, and (ii) no Default or Event of Default exists.                      

Section 3.  Reference to and Effect on the Credit                     
Agreement and the Other Loan Documents.                                         

(a)  On and after the date hereof, each reference in the              
Credit Agreement to "this Agreement," "hereunder," "hereof,"                    
"herein" or words of like import referring to the Credit                        
Agreement, and each reference in the other Loan Documents to                    
the "Credit Agreement," "thereunder," "thereof" or words of                     
like import referring to the Credit Agreement shall mean and                    
be a reference to the Credit Agreement as amended hereby.                       

(b)  Except as specifically amended by this Amendment,                
the Credit Agreement and the other Loan Documents shall remain                  
in full force and effect and are hereby ratified and                            
confirmed.                                                                      

(c)  The execution, delivery and performance of this                  
Amendment shall not, except as expressly provided herein,                       
constitute a waiver of any provision of, or operate as a                        
waiver of any right, power or remedy of the Administrative                      
Agent or any Lender under the Credit Agreement or any of the                    
other Loan Documents.                                                           

Section 4.  Miscellaneous.                                            

(a)  Section and Subsection Headings.   Section and                   
Subsection headings in this Amendment are included herein for                   
convenience of reference only and shall not constitute a part                   
of this Amendment for any other purpose or be given any                         
substantive effect.                                                             

(b)  Governing Law.   This Amendment and the rights and               
obligations of the parties hereunder shall be governed by, and                  
shall be construed and enforced in accordance with, the laws                    
of the State of Georgia.                                                        

(c)  Counterparts; Effectiveness.  This Amendment may be              
executed in any number of counterparts and by different                         
parties hereto and separate counterparts, each of which when                    
so executed and delivered shall be deemed an original, but all                  
such counterparts taken together shall constitute but one and                   
the same instrument; signature pages may be detached from                       
multiple separate counterparts and attached to a single                         
counterpart so that all signature pages are physically                          
attached to the same document.  This Amendment shall become                     
effective upon the execution of a counterpart hereof by the                     
Borrower and the Required Lenders and receipt by the Borrower                   
and the Administrative Agent of written or telephonic                           
notification of such execution and authorization or delivery                    
thereof.                                                                        

IN WITNESS WHEREOF, the parties hereto have caused this               
Amendment to be duly executed and delivered by their                            
respective officers thereunto duly authorized as of the date                    
first above written.                                                            

GOLD KIST INC.      
   By: /s/ Stephen O. West
 Name: Stephen O. West
          Title: Chief Financial Officer
             and Treasurer

[Signatures continued on following page]                  

       COOPERATIEVE CENTRALE
RAIFFEISEN-   
Revolving Credit Commitment:      BOERENLEENBANK B.A.,                          
$20,000,000                       "Rabobank Nederland",                         
364-Day Line of Credit Commitment NEW YORK BRANCH,                              
$20,000,000                       individually and as Agent                     

      By:/s/ Edward Peyser
     Name: Edward Peyser
       Title: Vice President

       By: /s/ Linda Walther
     Name: Linda Walther
       Title: Vice President

Revolving Credit Commitment:     SUNTRUST BANK, ATLANTA                         
$18,000,000                                                                     
364-Day Line of Credit Commitment                                               
$18,000,000                                                                     
            By: /s/ Michel A. Odermatt
          Name: Michel A. Odermatt
       Title: Vice President

       By: /s/ Kim S. Martin
     Name: Kim S. Martin
       Title: Vice President

Revolving Credit Commitment:     WACHOVIA BANK, N.A.                            
$16,000,000                                                                     
364-Day Line of Credit Commitment                                               
$16,000,000                                                                     
           By: /s/ Thomas L. Gleason
         Name: Thomas L. Gleason
              Title: Senior Vice President

[Signatures continued on following page]                  

Revolving Credit Commitment:     COBANK, ACB                                    
$16,000,000                                                                     
364-Day Line of Credit Commitment                                               
$16,000,000                                                                     
      By: /s/ Casey Garten
    Name: Casey Garten
       Title: Vice President

Revolving Credit Commitment:     HARRIS TRUST AND SAVINGS BANK                  
$10,000,000                                                                     
364-Day Line of Credit Commitment                                               
$10,000,000                      By: /s/ John R. Carley                         
      Name: John R. Carley
       Title: Vice President

Revolving Credit Commitment:     U.S. BANCORP AG CREDIT, INC.                   
$10,000,000                                                                     
364-Day Line of Credit Commitment                                               
$10,000,000                      By: /s/ Scott Trauth                           
    Name: Scott Trauth
  Title: President

By:           
Name:         
Title:        

Revolving Credit Commitment:     DG BANK DEUTSCHE                               
$10,000,000                      GENOSSENCHAFTSBANK AG,                         
364-Day Line of Credit Commitment  CAYMAN ISLANDS BRANCH                        
$10,000,000                                                                     

        By: /s/ Kurt A. Morris
      Name: Kurt A. Morris
       Title: Vice President

           By: /s/ Eric K. Zimmerman
         Name: Eric K. Zimmerman
             Title: Asst. Vice President

[Final page of signatures]                  

Dates Referenced Herein

This ‘10-Q’ Filing		Date		Other Filings
Filed on:		2/14/00		None on these Dates
For Period End:		12/31/99
		12/21/99
		11/29/99
		4/30/99
		12/3/98
		10/13/98
		9/30/98
		8/4/98
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