EX-10.12






Exhibit 10.12




AMENDMENT NO. 1 TO CREDIT AGREEMENT




     This AMENDMENT NO. 1 TO CREDIT AGREEMENT (this “Amendment”) is entered into as of
November 6, 2008, by and among THE FOLGERS COFFEE COMPANY, a Delaware corporation (the
“Borrower”), BANK OF MONTREAL, individually and as administrative agent (the
“Administrative Agent”), and the other lenders signatory hereto.



RECITALS




     A. The Borrower, the Administrative Agent and the Lenders are party to that certain Credit
Agreement dated as of October 31, 2008 (the “Credit Agreement”). Unless otherwise
specified herein, capitalized terms used in this Amendment shall have the meanings ascribed to them
by the Credit Agreement.



     B. The Borrower, the Administrative Agent and the undersigned Lenders wish to amend the Credit
Agreement on the terms and conditions set forth below.



     In consideration of the mutual execution hereof and other good and valuable consideration, the
parties hereto agree as follows:



          1. Amendments to Credit Agreement. Upon the “Amendment No. 1 Effective Date” (as
defined below), the Credit Agreement shall be amended as follows:




          (A) The following definitions in Article I are amended in their entirety to read as follows:





     “Applicable Rate” means (a) from the Closing Date to the Amendment No.
1 Effective Date, 1.250% per annum, (b) from and including the Amendment No. 1
Effective Date to but excluding the date on which the Administrative Agent receives
a Guarantor Compliance Certificate for the fiscal quarter ending January 31, 2009,
1.375% per annum and (c) thereafter the applicable percentage per annum set forth
below determined by reference to the Guarantor Consolidated Leverage Ratio as
calculated on the last day of the immediately preceding fiscal quarter:



	 	 	 	 	 	 	 
	Applicable Rate
	 	 	Guarantor	 	 
	Pricing	 	Consolidated	 	Eurodollar
	Level	 	Leverage Ratio	 	Rate
	1

	 	<1.50:1
	 	 	1.250	%
	2

	 	31.50:1
but £2.25:1
	 	 	1.375	%
	3

	 	>2.25:1
	 	 	1.750	%






 









 







     Any increase or decrease in the Applicable Rate resulting from a change in the
Guarantor Consolidated Leverage Ratio shall become effective as of the first
Business Day immediately following the date the applicable Guarantor Compliance
Certificate is delivered. Notwithstanding anything to the contrary contained in
this definition, the determination of the Applicable Rate for any period shall be
subject to the provisions of Section 2.10(b).




     “Loan Documents” means, collectively, (a) this Agreement (including any
amendment hereto), (b) the Notes, (c) the Guaranty, (d) the Fee Letter and (e) each
other document delivered by the Loan Parties to or in favor of the Administrative
Agent or the Lenders pursuant hereto.




     “Loan Parties” means, collectively, the Borrower, and after the Merger,
the Guarantors.



          (B) New definitions are added to Article I in appropriate alphabetical order reading as
follows:





     “Amendment No. 1” means the Amendment No. 1 to Credit Agreement dated
as of November 6, 2008, by and among, the Borrower, the Administrative Agent and the
Lenders signatory thereto.




     “Amendment No. 1 Effective Date” has the meaning set forth in the
Amendment No. 1.




     “Guarantor Compliance Certificate” means a certificate substantially in
the form of Exhibit A attached to the Obligations Guaranty to which Smucker is a
party.




     “Guarantor Consolidated Leverage Ratio” means, as of any date of
determination, the ratio of (a) Consolidated Total Indebtedness as of such date to
(b) Consolidated EBITDA for the period of the four fiscal quarters most recently
ended; provided, however, for purposes hereof, all references to
“the Borrower and its Subsidiaries” in definitions directly or indirectly comprising
a portion of the definition of “Consolidated Total Indebtedness” and “Consolidated
EBITDA” shall be deemed references to “Smucker and its Subsidiaries.”




     “Guarantors” means, collectively, after the Merger, Smucker and J.M.
Smucker LLC.




     “Guaranty” means the Guaranty dated as of October 31, 2008 made by the
Guarantors in favor of the Administrative Agent and the Lenders, which Guaranty
became effective upon consummation of the Merger.




     “Smucker Credit Agreement” means the Credit Agreement dated as of June
18, 2004, among Smucker, J.M. Smucker (Canada) Inc., the lenders party thereto and
KeyBank National Association, as administrative agent, as amended through October
31, 2008.



          (C) Section 7.05 is amended by adding a new clause (i) and restating the proviso at
the end thereof as follows:




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     (i) following the Merger, Dispositions of property by the Borrower or any
Subsidiary to Smucker or any Subsidiary thereof that are permitted by Section
5.12(c), (d) or (e) of the Smucker Credit Agreement as in effect
on October 31, 2008.




     provided, however, that any Disposition pursuant to clauses (c) and
(h) shall be for fair value.




     (D) Section 7.08 is amended by adding a new clause (iii) as follows:




     (iii) after the consummation of the Merger, among the Borrower and/or its
Subsidiaries and Smucker and/or its Subsidiaries (a) to the extent permitted by
Section 7.05(i) or (b) where the Borrower reasonably determines in
good faith such transaction is beneficial to the Borrower and such transaction is
not entered into for the purpose of hindering the exercise by the Administrative
Agent or the Lenders of their rights and remedies under this Agreement.




     (E) Section 7.09 is amended by restating clause (b) thereof as follows:




     (b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person (except any Contractual
Obligation arising pursuant to the Note Purchase Agreement (as defined in the
Smucker Credit Agreement)).




     (F) Article VII is amended by restating the final paragraph thereof as follows:




     Notwithstanding anything herein to the contrary, from and after the Merger,
nothing in this Article VII shall directly or indirectly encumber or restrict the
ability of the Borrower or any Subsidiary to (a) make, directly or indirectly, any
Capital Distribution (as defined in the Smucker Credit Agreement) to any Borrower
(as defined in the Smucker Credit Agreement) or Guarantor of Payment (as defined in
the Smucker Credit Agreement), (b) make, directly or indirectly, loans or advances
or capital contributions to any Borrower (as defined in the Smucker Credit
Agreement) or Guarantor of Payment (as defined in the Smucker Credit Agreement) or
(c) transfer, directly or indirectly, any of the properties or assets of the
Borrower or any Subsidiary to any Borrower (as defined in the Smucker Credit
Agreement) or Guarantor of Payment (as defined in the Smucker Credit Agreement);
except, with respect to (a), (b) or (c), for such encumbrances or restrictions
existing under or by reason of (i) applicable law, (ii) customary non-assignment
provisions in leases or other agreements entered in the ordinary course of business
and consistent with past practices, or (iii) customary restrictions in security
agreements or mortgages securing Indebtedness of a Company (as defined in the
Smucker Credit Agreement), or capital leases, of a Company (as defined in the
Smucker Credit Agreement) to the extent such restrictions shall only restrict the
transfer of the property subject to such security agreement, mortgage or lease.




     (G) A new Section 8.01(l) is added as follows:




     (l) Guaranty Default. Any “Guarantor Event of Default” (under and as
defined in the Guaranty) shall occur.




     (H) Section 8.01(e) is amended by deleting clause (iii) thereof.



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     (I) Section 10.01 is amended by adding a new clause (f) as follows:




     (f) release any Guarantor from the Guaranty (or any other Guarantee of the
Obligations) without the written consent of each Lender.



          2. Representations and Warranties of the Borrower. The Borrower represents and
warrants that:





          (a) The execution, delivery and performance by the Borrower of this Amendment have been
duly authorized by all necessary corporate action, have received all approvals, consents,
exemptions, authorizations or other action by or notice to or filing with any Governmental
Authority or any other Person, and do not and will not (i) contravene the terms of the
Borrower’s Organization Documents; (ii) conflict with or result in any breach or
contravention of, or the creation of any Lien under, or require any payment to be made under
(x) any material Contractual Obligation to which the Borrower is a party or affecting the
Borrower or the properties of the Borrower or any of its Subsidiaries or (y) any material
order, injunction, writ or decree of any Governmental Authority or any arbitral award to
which the Borrower or its property is subject; or (iii) violate any provision of any Law
except to the extent such violation could not reasonably be expected to have a Material
Adverse Effect.




          (b) This Amendment constitutes a legal, valid and binding obligation of the Borrower,
enforceable against the Borrower in accordance with its terms.




          (c) Each of the representations and warranties contained in the Credit Agreement is
true and correct on and as of the date hereof as if made on the date hereof, except to the
extent any such representation or warranty is stated to relate solely to an earlier date, in
which case such representation or warranty was true and correct on and as of such earlier
date.




          (d) After giving effect to this Amendment, no Default or Event of Default has occurred
and is continuing.



          3. Amendment No. 1 Effective Date. This Amendment shall become effective upon (a) the
consummation of the Merger, (b) the execution and delivery hereof by the Borrower, the
Administrative Agent and each of the Lenders and (c) the receipt by the Administrative Agent from
Jones Day of a written legal opinion (addressed to the Administrative Agent and the Lenders) in
form and substance satisfactory to the Administrative Agent (the “Amendment No. 1 Effective
Date”) (and prior to such consummation, execution and delivery and receipt, this Amendment
shall not be effective).




          4. Reference to and Effect Upon the Credit Agreement.





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




          (b) The execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any right, power or remedy of the Administrative Agent or any Lender under the
Credit Agreement or any Loan Document, nor constitute a waiver of any provision of the
Credit Agreement or any Loan Document, except as specifically set forth herein. Upon the
effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”,
“hereunder”, “hereof”, “herein” or words of similar import shall mean and be a reference to
the Credit Agreement as amended hereby.



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          5. Costs and Expenses. The Borrower hereby affirms its obligation under Section
10.04 of the Credit Agreement to reimburse the Administrative Agent for all reasonable
out-of-pocket expenses incurred by the Administrative Agent in connection with the preparation,
negotiation, execution and delivery of this Amendment, including but not limited to the reasonable
fees, charges and disbursements of attorneys for the Administrative Agent with respect thereto.




          6. Governing Law. This Amendment shall be governed by and construed in accordance
with the laws of the State of New York.




          7. Headings. Section headings in this Amendment are included herein for convenience
of reference only and shall not constitute a part of this Amendment for any other purposes.




          8. Counterparts. This Amendment may be executed in any number of counterparts, each
of which when so executed shall be deemed an original but all such counterparts shall constitute
one and the same instrument.



[Signature pages follow]




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     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first
above written.



	 	 	 	 	 	 	 	 	 
	THE FOLGERS COFFEE COMPANY	 	BANK OF MONTREAL,	 	 
	 	 	 	 	individually and as Administrative Agent	 	 
	 
	 	 	 	 	 	 	 	 
	By:   

	 	/s/ Mark R. Belgya
	 	By:   
	 	/s/ Betzaida Erdelyi	 	 
	 

	 	 

	 	 	 	 

	 	 
	Name:   

	 	Mark R. Belgya
 

	 	Name:    
	 	Betzaida Erdelyi
 

	 	 
	 
	 	 	 	 	 	 	 	 
	Its:   

	 	Vice President & Chief Financial Officer
	 	Its:   
	 	  Director	 	 
	 

	 	 

	 	 	 	 

	 	 
	 	 	 	 	BANK OF AMERICA, N.A.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:   
	 	/s/ J. Casey Cosgrove	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Name:  
	 	   J. Casey Cosgrove	 	 
	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	Its:   
	 	  Vice President