AMENDMENT TO LOAN AGREEMENT
This AMENDMENT TO LOAN AGREEMENT (this "Amendment"), dated as of February
24, 1996, is by and among XXXXX MEAT INC., an Illinois corporation ("RMI"),
XXXXX INTERNATIONAL SEAFOOD INC., an Illinois corporation ("RISI"), XXXXX FOODS
INC., a Delaware corporation ("RFI") and LASALLE NATIONAL BANK, a national
banking association ("LASALLE"). RMI and RISI are sometimes hereinafter
collectively referred to as "BORROWERS" and individually, each as a "BORROWER").
R E C I T A L S
X. XXXX, RMI, RFI (as guarantor) and LaSalle entered into that certain
Loan And Security Agreement dated as of April 7, 1995 (as amended prior to the
date hereof, the "Loan Agreement"), pursuant to which Lenders agreed, among
other things, to make revolving loans and other financial accommodations to
Borrowers.
X. XXXX, RMI, RFI (as guarantor) and LaSalle entered into that certain
Forbearance Agreement and Amendment dated as of January 5, 1996 (as amended, the
"Forbearance Agreement and Amendment") pursuant to which, among other things:
(i) the parties thereto agreed to amend the Loan Agreement; and (ii) LaSalle
agreed temporarily to forbear from exercising certain rights with respect to the
"Specified Events of Default" (as defined in such Forbearance Agreement and
Amendment).
C. Each Borrower and RFI has requested that LaSalle agree to amend the
Loan Agreement as provided herein.
X. XxXxxxx, as Agent and Lender, is willing to agree to such request, but
only subject to the terms and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the recitals set forth above, the
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
all parties hereto, and subject to the terms and conditions hereof, Borrower and
LaSalle agree as follows:
1. INCORPORATION OF RECITALS. The Recitals set forth above are
incorporated herein, are acknowledged by each Borrower and RFI to be true and
correct and are made a part hereof.
2. DEFINITIONS. All capitalized terms used but not elsewhere defined
herein shall have the respective meanings ascribed to such terms in the Loan
Agreement, as amended by this Agreement.
3. INDUCEMENT. To induce LaSalle to enter into this Amendment:
(a) COMPLIANCE WITH LOAN DOCUMENTS. Each Borrower represents and
warrants that on the date hereof after giving effect to this Amendment (and
other than
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such Events of Default which are the Specified Events of Default or are
acknowledged by LaSalle in that certain letter dated as of February __,
1996 from LaSalle to the Borrower (collectively, the "Previously Disclosed
Events of Default")), it is in compliance with all of the terms and
provisions set forth in the Loan Agreement and no Event of Default and no
event which, upon notice or lapse of time, or both, would constitute an
Event of Default, has occurred and is continuing.
(b) REPRESENTATIONS AND WARRANTIES. Each Borrower represents and
warrants that: (i) on the date hereof, the representations and warranties
set forth in the Loan Agreement are true and correct, with the same effect
as though such representations and warranties had been made on the date
hereof, except to the extent that such representations and warranties are
limited by their terms to an earlier date; and (ii) except for the
Previously Disclosed Events of Default, Borrower is in compliance with all
of the terms and provisions of the Loan Agreement and no other Event of
Default has occurred and is continuing.
(c) AUTHORITY. Each Borrower and RFI represents and warrants that it
has full power and authority to enter into this Amendment, and has full
power and authority to incur and perform the obligations provided for under
this Amendment, all of which have been duly authorized by all proper and
necessary action, and that no consent or approval of any of Borrowers' or
RFI's directors, shareholders, creditors or of any public authority or
regulatory body is required as a condition to the validity or
enforceability of this Amendment.
(d) AMENDMENT AS BINDING AGREEMENT. Each Borrower and RFI represents
and warrants that this Amendment constitutes the valid and legally binding
obligation of it, fully enforceable against it in accordance with this
Amendment's terms.
(e) NO CONFLICTING AGREEMENTS. Each Borrower and RFI represents and
warrants that the execution and performance by it of this Amendment will
not: (i) violate any provision of law, any order of any court or other
agency of government, or the articles of incorporation or bylaws of it;
(ii) violate any indenture (including, without limitation, the Senior Note
Indenture), contract, agreement or other instrument to which it is a party,
or by which any of its property is bound, or be in conflict with, result in
a breach of or constitute (with due notice and/or lapse of time) a default
under, any such indenture, contract, agreement or other instrument; or
(iii) result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any of its respective property or
assets, other than in favor of LaSalle.
4. AMENDMENT OF THE LOAN AGREEMENT. The Loan Agreement is amended as set
forth below:
4.1 The definition of "TANGIBLE NET WORTH" set forth in Section 1.1
of the Loan Agreement is hereby amended by deleting such
definition in its entirety and inserting the following in lieu
thereof:
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"TANGIBLE NET WORTH - as of any date of determination
thereof, (A) (i) Net Worth PLUS (ii) the outstanding
principal balance of the Senior Notes MINUS (B) (i) the book
value of all intangible assets PLUS (ii) any LIFO reserve
MINUS (C) such adjustments as determined solely by LaSalle.
All such amounts shall be calculated on a consolidated basis
and all such amounts (other than those calculated pursuant
to (C)) shall be determined pursuant to GAAP, applied on a
basis consistent with the Borrower's previous financial
statements."
4.2 Section 1.1 of the Loan Agreement is hereby amended by inserting
the following new definition in the appropriate alphabetical
order:
"NET INCOME (OR NET DEFICIT) - as of any date of
determination thereof, the net income (or, if applicable,
net deficit) of RFI and its Subsidiaries (including, without
limitation, RMI and RISI), all as determined in accordance
with GAAP."
4.3 The definition of "BORROWING BASE" set forth in Section 1.1 of
the Loan Agreement is hereby amended by adding the following
sentence to the end of such definition:
"Notwithstanding anything in this Agreement to the contrary:
(i) at no time shall the amount of the Borrowing Base with
respect to Eligible Inventory of RMI exceed or be deemed to
exceed $4,750,000 (whether or not calculated pursuant to
(b)(ii)(x) or (b)(ii)(y) above); and (ii) upon the sale of
all or a material portion of the stock or assets of RISI, a
reserve shall be automatically made to permanently reduce
the otherwise available Borrowing Base as follows: The
otherwise available Borrowing Base shall be deemed
permanently reduced by an amount equal to $100,000 on each
of June 1, 1996, July 1, 1996, August 1, 1996, September 1,
1996 and October 1, 1996 (such that as of October 1, 1996,
the reserve made against the otherwise available Borrowing
Base shall be in the aggregate amount of $500,000 and shall
cause the otherwise available Borrowing Base to be
permanently reduced by such $500,000)."
4.4 Section 9.2(L) of the Loan Agreement is hereby amended by
deleting same in its entirety and inserting the following in lieu
thereof:
"(L) Make Capital Expenditures (including, without
limitation, by way of capitalized leases) which in the
aggregate, as to Borrowers and their Subsidiaries, exceed
$600,000.00 during any fiscal year."
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4.5 Section 9.3(A) of the Loan Agreement is hereby amended by (i)
deleting such Section (.3(A) in its entirety and inserting the
following in lieu thereof:
"(A) MINIMUM TANGIBLE NET WORTH. RFI shall have, as of
each of the dates listed below, a Consolidated Tangible Net
Worth of not less than the amount set forth opposite such
dates in the following schedule:
Date Amount
---- ------
February 24, 1996 $2,750,000
April 27, 1996 $1,450,000
July 27, 1996 $5,750,000
October 26, 1996 $7,000,000
The last day of each fiscal
quarter thereafter $7,000,000"
4.6 Sections 9.3(B), (C), (D) and (E) of the Loan Agreement are
hereby amended by deleting each of the same in its entirety.
4.7 Section 9.3 of the Loan Agreement is hereby amended by adding as
Section 9.3(B) thereto the following:
"(B) MINIMUM CONSOLIDATED NET INCOME. RFI shall have as of
each of the dates listed below for the respective periods
indicated, a Consolidated Net Income of not less than the
amount set forth opposite such dates in the following
schedules:
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Date Amount
---- ------
For the month ended
February 24, 1996 $(1,050,000)
For the fiscal quarter ended
April 27, 1996 $(2,400,000)
For the fiscal quarter ended
July 27, 1996 $ 15,000
For the fiscal quarter ended
October 26, 1996 $1,125,000
For each fiscal quarter
end thereafter $500,000.
Provided, further, that RFI shall not have: (i) as of any
date prior to the end of its fiscal year ending October 26,
1996, a Consolidated Net Deficit for such fiscal year
through such date of greater than ($4,900,000); and (ii) for
the fiscal year ending October 26, 1996, a Consolidated Net
Deficit for such fiscal year of greater than ($3,300,000)."
4.8 Section 13 of the Agreement is hereby amended by adding thereto
the following Section 13.20:
"13.20 READJUSTMENT OF FINANCIAL COVENANTS. Borrower and
RFI each agrees that the financial covenants set forth in
Section 9.3 hereof shall be subject to adjustment by LaSalle
at any time that RISI's operations or the results thereof
are required by GAAP or deemed by RFI to be characterized as
continuing operations of RFI."
4.9 From and after the effective date hereof: (i) all references in
the Loan Amendment and the other Loan Documents to the Loan
Agreement shall be deemed to refer to the Loan Agreement, as
amended hereby; and (ii) all references in the Loan Documents to
a term defined in the Loan Agreement shall be deemed to refer to
such defined term, as amended hereby.
5. NO WAIVER OF SPECIFIED EVENTS OF DEFAULT. Nothing in this Amendment
shall be deemed to waive the Specified Events of Default, or, except as
expressly provided herein, limit or impair LaSalle's rights or remedies under
the Loan Agreement, the other Loan Documents, or applicable law, all of which
are hereby expressly reserved.
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6. CERTAIN AFFIRMATIONS BY BORROWERS AND RFI. Each Borrower and RFI
hereby agrees and acknowledges that LaSalle has performed all obligations and
duties owed to Borrowers and RFI, if any, as of the date hereof.
7. EVENT OF DEFAULT. Borrower hereby acknowledges and agrees that a
breach by Borrower of any term, provision, covenant or condition herein set
forth or herein required of Borrower to be kept or performed, shall constitute
an Event of Default under the Loan Documents.
8. COUNTERCLAIMS AND RELEASE. Each Borrower and RFI hereby represents
and warrants to, and covenants with, LaSalle that as of the date hereof: (a) it
has no actions, defenses, offsets or counterclaims of any kind or nature
whatsoever against LaSalle with respect to the Loan Agreement or any of the Loan
Documents, any amount owed to LaSalle or the performance or observance by
LaSalle of any warranty or covenant contained therein or any action previously
taken or not taken by LaSalle with respect thereto or with respect to any
security interest, encumbrance, lien or collateral in connection therewith to
secure the liabilities of Borrowers or RFI; and (b) LaSalle has fully performed
all obligations to Borrowers and RFI, if any, which it may have had or have on
and of the date hereof. Without limiting the generality of the foregoing, each
Borrower and RFI: (a) on its own behalf and on behalf of its representatives,
agents, employees, servants, officers, and directors, (b) to the extent such
claims could be made by the following parties claiming through such Borrower or
RFI and to the fullest extent permitted by applicable law, on behalf of partners
and shareholders and subsidiary, affiliated and related companies, and (c) on
behalf of successors and assigns (together, the "BORROWING GROUP") waives,
releases and forever discharges LaSalle, each Lender and its respective
officers, directors, subsidiary, affiliated and related companies, agents,
servants, employees, shareholders, representatives, successors, assigns,
attorneys, accountants, assets and properties, as the case may be (the "LENDER
GROUP") from and against all manner of actions, cause and causes of action,
suits, debts, sums of money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises, obligations,
liabilities, costs, expenses, losses, damages, judgments, executions, claims and
demands, of whatsoever kind or nature, in law or in equity, whether known or
unknown, whether or not concealed or hidden, arising out of or relating to any
matter, cause or thing whatsoever, that any of the Borrowing Group, whether
individually and/or jointly or severally, may have had, or now have or that may
subsequently accrue against the Lender Group by reason of any matter or thing
whatsoever through the date hereof arising out of or in any way connected to,
directly, or indirectly, the Loan Agreement, this Amendment and/or any of the
other Loan Documents. Each Borrower and RFI hereby acknowledges and agrees that
LaSalle is specifically relying upon the representations, warranties, covenants
and agreements contained herein and that such representations, warranties,
covenants and agreements constitute a material inducement to enter into this
Amendment.
9. COSTS. Each Borrower, jointly and severally, shall pay or cause to be
paid to LaSalle all fees and expenses of LaSalle relating to this Amendment and
the transactions contemplated herein, including, without limitation, fees and
expenses of LaSalle's counsel (the "COSTS").
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10. NO CUSTOM; SECTION HEADINGS. This Amendment shall not establish a
custom or course of dealing, or waive, limit or condition the rights, defenses
and remedies of LaSalle under the Loan Agreement or the other Loan Documents,
all of which rights, defenses and remedies are expressly reserved. The section
headings and captions herein are for convenience of reference only and shall not
be deemed to limit, impair or affect the interpretation and construction of the
terms hereof.
11. REPRESENTATION BY COUNSEL. Each Borrower and RFI hereby represents
and warrants to LaSalle that throughout the negotiations, preparation and
execution of this Amendment and the closing hereunder, it has been represented
by competent legal counsel of its own choosing and that this Amendment was
entered into by its free will and pursuant to arm's-length negotiations.
12. SEVERABILITY. If any provision of this Amendment or the application
thereof to any party or circumstance is held invalid or unenforceable, the
remainder of this Amendment and the application of such provision or provisions
to the other parties and circumstances will not be affected thereby, the
provisions of this Amendment being severable in any such instance.
13. FULL FORCE AND EFFECT. Except as may be expressly set forth herein to
the contrary, the Loan Documents remain unmodified and all other terms and
conditions of the Loan Documents remain in full force and effect. Each Borrower
and RFI hereby reaffirms its respective obligations to fulfill and comply with
each of its covenants, duties and obligations under the Loan Agreement, the
Guaranty Agreement and each of the other Loan Documents, all in accordance with
the terms thereof.
14. COUNTERPARTS. This Amendment may be signed in counterparts, each of
which shall be deemed an original and all of which shall be deemed to constitute
one agreement.
15. MERGER; MODIFICATION. This Amendment embodies the entire agreement
between the parties hereto with respect to the matters addressed herein and
supersedes all prior oral and written and all contemporaneous oral
communications with respect to such matters. This Amendment shall not be
modified or amended or extended except in a writing signed by the parties
hereto.
16. DELIVERIES BY BORROWER/FURTHER ASSURANCES. Each Borrower and RFI
shall deliver the following to LaSalle, each in form and substance satisfactory
to LaSalle: (i) certified copies of resolutions adopted by its respective board
of directors authorizing the execution and delivery of this Amendment; and (ii)
such other instruments, documents, certificates, consents, waivers and opinions
as LaSalle reasonably may request.
17. CHOICE OF LAW. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND GOVERNED BY THE LAWS AND DECISIONS OF THE STATE OF ILLINOIS, WITHOUT REGARD
TO ANY CONFLICT OF LAW PROVISIONS. FOR PURPOSES OF THIS SECTION 17, THIS
AMENDMENT SHALL BE DEEMED TO BE PERFORMED AND MADE IN THE STATE OF ILLINOIS.
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18. WAIVERS BY BORROWERS AND RFI. EACH BORROWER AND RFI HEREBY WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT PROCEEDING OR COUNTERCLAIM OF ANY
KIND ARISING OUT OF OR RELATED TO THIS AMENDMENT.
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IN WITNESS WHEREOF, this Amendment has been executed and delivered by each
of the parties hereto by a duly authorized officer of each such party on the
date first set forth above.
XXXXX MEAT INC.
("Borrower")
/s/ Xxxxxx X. Xxxxxx
----------------------------
By: Xxxxxx X. Xxxxxx
---------------------
Title: V.P. Finance
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XXXXX INTERNATIONAL SEA FOOD INC.
("Borrower")
/s/ Xxxxxx X. Xxxxxx
----------------------------
By: Xxxxxx X. Xxxxxx
---------------------
Title: V.P. Finance
-------------------
XXXXX FOODS INC.
("Guarantor")
/s/ Xxxxxx X. Xxxxxx
----------------------------
By: Xxxxxx X. Xxxxxx
---------------------
Title: V.P. Finance
-------------------
LASALLE NATIONAL BANK ("Agent" and
"Lender")
/s/ Xxxxxx Xxxxxxxxxx
---------------------------
By: Xxxxxx Xxxxxxxxxx
---------------------
Title: SVP
------------------
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