Limoneira Company (NASDAQ:LMNR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01
| Entry into a Material Definitive Agreement |
On June 20, 2017, Limoneira Company (the Company) entered into a
Master Loan Agreement (the Loan Agreement) with Farm Credit West,
FLCA (Lender) dated June 19, 2017, together with a Revolving
Credit Facility Supplement (the Revolving Credit Supplement) and
a Non-revolving Credit Facility Supplement (the Non-Revolving
Credit Supplement, and together with the Revolving Credit
Supplement, the Supplements). The Loan Agreement governs the
terms of the Supplements.
The Supplements provide aggregate borrowing capacity of
$100,000,000 comprised of $60,000,000 under the Revolving Credit
Supplement and $40,000,000 under the Non-Revolving Credit
Supplement. For amounts outstanding under both Supplements
interest will begin to be charged on the date the Lender
disburses principal and will continue until the outstanding
indebtedness under the Supplements is paid in full with interest.
The initial interest rate in effect under each of the Supplements
is 2.89% per annum, which rate will be automatically adjusted
commencing July 1, 2017 and on the first day of each month
thereafter. The interest rate for any amount outstanding under
the Supplements will be based on the one month LIBOR rate plus an
applicable margin. The applicable margin will range from 1.60% to
2.35% depending on the ratio of current assets plus the remaining
available commitment divided by current liabilities. On July 1,
2018, and on each one year anniversary thereafter, the Company
has the option to convert the interest rate in use under each
Supplement from the preceding LIBOR-based calculation to a
variable interest rate, or the reverse, as applicable. Any
amounts outstanding under the Supplements are due and payable in
full on July 1, 2022. The Company may prepay any amounts
outstanding under the Supplements without penalty.
All indebtedness under the Loan Agreements, including any
indebtedness under the Supplements, is secured by a first lien on
certain of the Companys agricultural properties in Tulare and
Ventura counties in California and certain of the Companys
building fixtures and improvements and investments in mutual
water companies associated with the pledged agricultural
properties. The Loan Agreement includes customary default
provisions that provide should an event of default occur, the
Lender, at its option, may declare all or any portion of the
indebtedness under the Loan Agreement to be immediately due and
payable without demand, notice of non-payment, protest or prior
recourse to collateral, and terminate or suspend the Companys
right to draw or request funds on any loan or line of credit.
Proceeds from the Supplements were used to pay down all the
remaining outstanding indebtedness under the revolving credit
facility (the Prior Credit Facility) the Company had with
Rabobank, N.A.
The Loan Agreement subjects the Company to affirmative and
restrictive covenants including, among other customary covenants,
financial reporting requirements, requirements to maintain and
repair any collateral, restrictions on the sale of assets,
restrictions on the use of proceeds, prohibitions on the
incurrence of additional debt and restrictions on the purchase or
sale of major assets of the Companys business. The Company is
also subject to a covenant that it will maintain a debt service
coverage ratio greater than 1.25:1.00 measured annually at
October 31.
The foregoing summary of the Loan Agreement, and the related
Supplements, is qualified in its entirety by reference to the
text of the Loan Agreement, the Revolving Credit Supplement and
the Non-Revolving Credit Supplement, copies of which are filed
hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and
incorporated herein by reference.
| Section 2 | Financial Information |
| Item 2.03 |
Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant |
The information set forth above under Item 1.01 of this Current
Report on Form 8-K is incorporated herein by reference.
| Section 8 | Other Events |
| Item 8.01 | Other Events |
In connection with the paydown of the Prior Credit Facility, on
June 19, 2017, the Company entered into a Novation Agreement (the
Novation Agreement) with Coperatieve Centrale
Raiffeisen-Boerenleenbank B.A. Rabobank International (the
Transferor) and CoBank, ACB (the Transferee). The Novation
Agreement provides for the prior interest rate swap agreement
with the Transferor, which fixed the interest rate at 4.30%
utilizing an interest rate swap on $40,000,000 of the Prior
Credit Facility, to now be in place with the Transferee.
| Section 9 | Financial Statements and Exhibits |
| Item 9.01 | Financial Statements and Exhibits |
| (d) | Exhibits |
| 10.1 |
Master Loan Agreement, dated June 19, 2017, between Limoneira Company and Farm Credit West, FLCA. |
| 10.2 |
Revolving Credit Facility Supplement, dated June 19, 2017, between Limoneira Company and Farm Credit West, FLCA. |
| 10.3 |
Non-revolving Credit Facility Supplement, dated June 19, 2017, between Limoneira Company and Farm Credit West, FLCA. |
Limoneira CO ExhibitEX-10.1 2 v469385_ex10-1.htm EXHIBIT 10.1 Exhibit 10.1 Filing Ref. Limoneira Company Customer Number: 0005229057 MASTER LOAN AGREEMENT This Master Loan Agreement is established as of June 19,…To view the full exhibit click here About Limoneira Company (NASDAQ:LMNR)
Limoneira Company is an agribusiness and real estate development company. The Company’s operations consist of fruit production, sales and marketing, rental operations, real estate development and capital investment activities. The Company’s three business divisions are agribusiness, rental operations and real estate development. The Company’s agribusiness division consists of two segments, namely lemon operations and other agribusiness, and includes its farming, harvesting, lemon packing and lemon sales operations. The Company’s rental operations business division includes its residential and commercial rentals, leased land operations and organic recycling. The Company’s real estate development business division includes its real estate projects and development. The Company operates its packinghouses in Santa Paula, California and Yuma, Arizona. The Company’s water resources include water rights, usage rights and pumping rights to the water in aquifers.