8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: December 19, 2006
(Date of earliest event reported)

LIFECORE BIOMEDICAL, INC.

(Exact name of registrant as specified in its charter)

Commission File Number: 0-4136

Minnesota	41-0948334
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

3515 Lyman Boulevard, Chaska, Minnesota 55318
(Address of principal executive offices, including zip code)

(952) 368-4300
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Amendment No. 3 to the Revolving Credit and Security Agreement

Item 1.01 Entry into a Material Definitive Agreement.

In December 2002, Lifecore Biomedical, Inc. (the “Company”), entered into a Revolving Credit and Security Agreement (the “Agreement”) with M&I Marshall & Ilsley Bank (the “Bank”). Under the Agreement, the Bank agreed to make advances (the “Advances”) to the Company until December 31, 2005 (the “Termination Date”) or until an earlier termination date in accordance with in the Agreement, in an aggregate amount not to exceed $5,000,000. The Agreement allowed for Advances against eligible accounts receivable and inventories, subject to a borrowing base certificate. The terms of the Agreement required the Company to comply with various financial covenants, including minimum tangible net worth, liabilities to tangible net worth ratio and net income (loss).

In June 2003, certain covenants in the Agreement relating to the required borrowing base and net income levels were amended (“Amendment No. 1”). In November 2004, the Agreement was further amended in order to extend the Termination Date until December 31, 2006 and to amend certain covenants regarding tangible net worth and net income (“Amendment No. 2”). Amendment No. 2 also amended the interest rate provisions of the Agreement to provide that interest will accrue at a fluctuating annual rate equal to either (1) prime rate minus 0.50% or (2) LIBOR plus 2.25%, as elected by the Company.

On December 19, 2006, the Agreement was further amended in order to extend the Termination Date until December 31, 2008, to delete the requirement that the Company furnish to the Bank a borrowing base certificate (together with an accounts receivable and accounts payable aging) after the end of each month, and to delete the net income restrictive covenant (“Amendment No. 3”). Amendment No. 3 also amended the interest rate provisions of the Agreement to provide that interest will accrue at a fluctuating annual rate equal to either (1) prime rate minus 1.00% or (2) LIBOR plus 1.75%, as elected by the Company. At December 19, 2006, there was no balance outstanding under the line of credit and the Company was in compliance with all covenants under the Agreement.

The foregoing description of Amendment No. 3 to the Agreement is not complete and is qualified in its entirety by reference to Amendment No. 3, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference. A copy of the Agreement was filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarterly period ended December 31, 2002, a copy of Amendment No. 1 to the Agreement was filed as Exhibit 10.21 to the Company’s Form 10-K for the fiscal year ended June 30, 2003, and a copy of Amendment No. 2 to the Agreement was filed as Exhibit 10.1 to the Company’s Form 10-Q for the quarterly period ending December 31, 2004.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

10.1 Amendment No. 3 dated as of December 19, 2006 to the Revolving Credit and Security Agreement between the Company and M&I Marshall & Ilsley Bank.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LIFECORE BIOMEDICAL, INC.
By:	/s/ Dennis J. Allingham
	Dennis J. Allingham
	President and Chief Executive Officer

Date: December 21, 2006

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EXHIBIT INDEX

Exhibit
Number	Description
10.1	Amendment No. 3 dated as of December 19, 2006 to the Revolving Credit and Security Agreement between the Company and M&I Marshall & Ilsley Bank.

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EX-10.1

Exhibit 10.1

LETTER AMENDMENT NO. 3

Dated as of December 19, 2006

M&I Marshall & Ilsley Bank
651 Nicollet Mall
Minneapolis, Minnesota 55402-1611

Ladies/Gentlemen:

     We refer to the Revolving Credit Agreement dated as of December 18, 2002, as amended (the “Credit Agreement”) between you and us. Unless otherwise defined in this letter amendment, terms defined in the Credit Agreement are used in this letter amendment as defined in the Credit Agreement.

     It is hereby agreed by you and us as follows:
     The Credit Agreement is, effective the date first above written, hereby amended as follows:

(a)

The first sentence of Section 2.1 is amended in full to read as follows:

Section 2.1. Commitment for Revolving Loan. The Bank agrees, in accordance with the terms of this Agreement, to make advances (the “Advances”) to the Borrower from time to time from the date hereof to and including December 31, 2008 (the “Termination Date”) or the earlier termination of the Commitment under the terms of this Agreement, in an aggregate amount not to exceed $5,000,000.00 (the “Commitment”).

(b)	Section 2.4 is amended by changing the phrase “Prime Rate minus 0.50%” both places it appears to be “Prime Rate minus 1.0%” and by changing the phrase “LIBOR plus 2.25%” the one place it appears to be “LIBOR plus 1.75%.”
(c)	Section 5.1(a) (vi) [Borrowing Base and aging reporting] is deleted in its entirety.

(d) Section 5.1(g) [Net Income] is amended in full to read as follows:

[Intentionally Deleted]

     On and after the effective date of this letter amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, or words of like import referring to the Credit Agreement, and each reference in the Note and the Security Agreement 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 by this letter amendment. The Credit Agreement, as amended by this letter amendment, is and shall continue to be in full force and effect and is hereby in all respects ratified and confirmed.

     This letter amendment may be executed in any number of counterparts and by any combination of the parties hereto in separate counterparts, each of which counterparts shall be an original and all of which taken together shall constitute one and the same letter amendment.

     If you agree to the terms and provisions hereof, please evidence your agreement by executing and returning one counterpart of this letter amendment to us. This letter amendment shall become effective as of the date first above written when and if counterparts of this letter amendment shall have been executed by you and us.

Very truly yours,

LifeCore Biomedical, Inc.

By	/s/ David M. Noel
Its	VP of Finance and CFO

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Agreed as of the date
first above written:

M&I Marshall & Ilsley Bank

By	/s/ Sam S. Pepper Jr.
Its	Vice President
By	/s/ Stacy A. Voves
Its	Assistant Vice President

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