EXHIBIT 10.1
AMENDMENT NO. 5
TO
CREDIT AND SECURITY AGREEMENT
THIS AMENDMENT NO. 5 TO CREDIT AND SECURITY AGREEMENT
("Amendment") is made and entered into this 7th day of November, 2002, by and
between LIFECORE BIOMEDICAL, INC., a Minnesota corporation (the "Borrower"), and
U.S. BANK NATIONAL ASSOCIATION, a national banking association (the "Lender").
RECITALS:
A. The Borrower and the Lender are parties to that certain
Credit and Security Agreement dated as of December 29, 1998, as amended by
Amendment No. 1 to Credit and Security Agreement dated as of February 7, 2000,
as further amended by Amendment No. 2 to Credit and Security Agreement dated as
of July 21, 2000, as further amended by Amendment No. 3 to Credit and Security
Agreement dated August 21, 2001, and as further amended by Amendment No. 4 to
Credit and Security Agreement dated January 25, 2002 (as so amended, and as may
be hereafter amended from time to time, the "Credit Agreement").
B. The Borrower and the Lender desire to amend certain
provisions of the Credit Agreement, and to provide for a waiver of certain
financial covenants under the Credit Agreement, all on the terms and conditions
set forth herein.
AGREEMENTS:
NOW, THEREFORE, in consideration of the foregoing recitals and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:
1. Definitions. All capitalized terms used herein shall have
the meanings given such terms in the Credit Agreement.
2. Waivers.
(a) The Borrower agreed, pursuant to Section 7.1 of
Supplement A to the Credit Agreement, not to permit the Tangible Net
Worth of Borrower to be less than $43,000,000 as of July 31, 2002,
August 31, 2002 and September 30, 2002. The Borrower has advised the
Lender that the Tangible Net Worth of the Borrower on such dates was
less than the minimum Tangible Net Worth requirement for the periods
ending on such dates.
(b) The Borrower has requested that the Lender waive
the Borrower's noncompliance with Section 7.1 of Supplement A to the
Credit Agreement by reason of the events and circumstances described in
subparagraph 2(a) above and, in reliance upon the accuracy of the
description set forth in subparagraph 2(a) above of the events and
circumstances necessitating the requested waiver, the Lender hereby
waives the Borrower's noncompliance with Section 7.1 of Supplement A to
the Credit Agreement by reason of the events and circumstances
described in subparagraph 2(a) above.
(c) The Borrower agreed, pursuant to Section 7.5 of
Supplement A to the Credit Agreement, not to permit the EBITDA of the
Borrower to be less than ($300,000) as of July 31, 2002 and August 31,
2002. The Borrower has advised the Lender that the EBITDA of the
Borrower on such dates was less than the minimum EBITDA requirement for
the periods ending on such dates.
(d) The Borrower has requested that the Lender waive
the Borrower's noncompliance with Section 7.5 of Supplement A to the
Credit Agreement by reason of the events and circumstances described in
subparagraph 2(c) above and, in reliance upon the accuracy of the
description set forth in subparagraph 2(c) above of the events and
circumstances necessitating the requested waiver, the Lender hereby
waives the Borrower's noncompliance with Section 7.5 of Supplement A to
the Credit Agreement by reason of the events and circumstances
described in subparagraph 2(c) above.
(e) In consideration of the waivers provided for in
subparagraphs 2(b) and 2(d) above, the Borrower acknowledges and agrees
that (i) except as expressly provided herein, the Credit Agreement and
the other Loan Documents remain in full force and effect, (ii) the
obligations of the Borrower and the other Obligors to the Lender under
the Credit Agreement and the other Loan Documents are not, as of the
date hereof, subject to any offset, counterclaim or defense of any type
or kind, (iii) the waivers provided for herein extend and apply only to
the provisions of the Credit Agreement specifically referred to above,
and such waiver does not extend or apply to any other term, covenant or
provision of the Credit Agreement or any other Loan Document, or any
document, instrument, agreement or certificate relating thereto, (iv)
the waivers provided for herein extends and applies only to the events
and/or circumstances specifically described herein, and such waiver
does not extend or apply to any other event or circumstance, whether
known or unknown to the Lender and whether now existing or hereafter
arising or occurring, and (v) no failure or delay on the part of the
Lender in exercising any right or power or privilege under the Credit
Agreement or any other Loan Document shall operate as a waiver thereof.
3. Amendments.
(a) Supplement A to the Credit Agreement is hereby
amended and restated in its entirety to conform to Supplement A
(Amended 10/2002) attached hereto.
(b) Attachment No. 1 to the Compliance Certificate
attached as Exhibit B to the Credit Agreement is hereby amended and
restated in its entirety to conform to Attachment No. 1 to Compliance
Certificate attached to this Amendment as Exhibit B.
4. Conditions Precedent. The amendments contained in this
Amendment shall become effective upon delivery by the Borrower of the following:
Supplement A - page 2
(a) This Amendment duly executed by the Borrower.
(b) A copy of the resolutions of the Board of
Directors of the Borrower authorizing the execution, delivery and
performance of this Amendment certified as true and accurate by its
Secretary or Assistant Secretary, along with a certificate of such
Secretary or Assistant Secretary which (i) certifies that there has
been no amendment to the Articles of Incorporation or Bylaws of the
Borrower since true and accurate copies of the same were delivered to
the Lender with a certificate of the Secretary of the Borrower dated
December 29, 1998, (ii) identifies each officer of the Borrower
authorized to execute this Amendment and any other instrument or
agreement executed by the Borrower in connection with this Amendment,
and (iii) sets forth specimen signatures of each officer of the
Borrower referred to above and identifies the office or offices held by
such officer.
(c) Such other documents, instruments and agreements
as the Lender may require, and payment of all unpaid legal fees and
expenses incurred by the Lender through the date of this Amendment in
connection with the Credit Agreement and this Amendment.
(d) Payment to the Lender of a wholly earned,
non-refundable amendment fee of $3,000.00.
5. Representations; No Default. The Borrower represents and
warrants that: (a) the Borrower has the power and legal right and authority to
enter into this Amendment and has duly authorized the execution and delivery of
this Amendment and other agreements and documents executed and delivered by the
Borrower in connection herewith, (b) neither this Amendment nor the agreements
contained herein contravene or constitute a default under any agreement,
instrument or indenture to which the Borrower is a party or a signatory, or any
provision of the Borrower's Articles of Incorporation, Bylaws or, to the best of
the Borrower's knowledge, any other agreement or requirement of law, or result
in the imposition of any lien or other encumbrance on any of its property under
any agreement binding on or applicable to the Borrower or any of its property
except, if any, in favor of the Lender, (c) no consent, approval or
authorization of or registration or declaration with any party, including but
not limited to any governmental authority, is required in connection with the
execution and delivery by the Borrower of this Amendment or other agreements and
documents executed and delivered by the Borrower in connection herewith or the
performance of obligations of the Borrower herein described, except for those
which the Borrower has obtained or provided and as to which the Borrower has
delivered certified copies of documents evidencing each such action to the
Lender, and (d) no events have been taken place and no circumstances exist at
the date hereof which would give the Borrower grounds to assert a defense,
offset or counterclaim to the obligations of the Borrower under the Credit
Agreement or the other Loan Documents.
6. Affirmation, Further References. The Lender and the
Borrower each acknowledge and affirm that the Credit Agreement, as hereby
amended, is hereby ratified and confirmed in all respects and all terms,
conditions and provisions of the Credit Agreement, except as amended by this
Amendment, shall remain unmodified and in full force and effect. All
Supplement A - page 3
references in any document or instrument to the Credit Agreement are hereby
amended and shall refer to the Credit Agreement as amended by this Amendment.
7. Merger and Integration, Superseding Effect. This Amendment,
from and after the date hereof, embodies the entire agreement and understanding
between the parties hereto and supersede and have merged into them all prior
oral and written agreements on the same subjects by and between the parties
hereto with the effect that this Amendment, shall control with respect to the
specific subjects hereof and thereof.
8. Severability. Whenever possible, each provision of this
Amendment and any other statement, instrument or transaction contemplated hereby
or thereby or relating hereto or thereto shall be interpreted in such manner as
to be effective, valid and enforceable under the applicable law of any
jurisdiction, but, if any provision of this Amendment or any other statement,
instrument or transaction contemplated hereby or thereby or relating hereto or
thereto shall be held to be prohibited, invalid or unenforceable under the
applicable law, such provision shall be ineffective in such jurisdiction only to
the extent of such prohibition, invalidity or unenforceability, without
invalidating or rendering unenforceable the remainder of such provision or the
remaining provisions of this Amendment or any other statement, instrument or
transaction contemplated hereby or thereby or relating hereto or thereto in such
jurisdiction, or affecting the effectiveness, validity or enforceability of such
provision in any other jurisdiction.
9. Successors. This Amendment shall be binding upon the
Borrower and the Lender and their respective successors and assigns, and shall
inure to the benefit of the Borrower and the Lender and the successors and
assigns of the Lender.
10. Legal Expenses. The Borrower agrees to reimburse the
Lender, upon execution of this Amendment, for all reasonable out-of-pocket
expenses (including attorneys' fees and legal expenses of Xxxxxx and Xxxxxx,
P.A., counsel for the Lender) incurred in connection with the Credit Agreement,
including in connection with the negotiation, preparation and execution of this
Amendment and all other documents negotiated, prepared and executed in
connection with this Amendment, and in enforcing the obligations of the Borrower
under this Amendment, and to pay and save the Lender harmless from all liability
for, any stamp or other taxes which may be payable with respect to the execution
or delivery of this Amendment, which obligations of the Borrower shall survive
any termination of the Credit Agreement.
11. Headings. The headings of various sections of this
Amendment have been inserted for reference only and shall not be deemed to be a
part of this Amendment.
12. Counterparts. This Amendment may be executed in several
counterparts as deemed necessary or convenient, each of which, when so executed,
shall be deemed an original, provided that all such counterparts shall be
regarded as one and the same document, and either party to this Amendment may
execute any such agreement by executing a counterpart of such agreement.
13. Governing Law. This Amendment shall be governed by the
internal laws of the State of Minnesota, without giving effect to conflict of
law principles thereof.
Supplement A - page 4
IN WITNESS WHEREOF, the parties hereto have entered into this
Amendment as of the date first above written.
BORROWER: LIFECORE BIOMEDICAL, INC.,
a Minnesota corporation
By /s/ Xxxxx X. Xxxxxx
-------------------------------------
Its President and Chief Executive Officer
LENDER: U.S. BANK NATIONAL ASSOCIATION,
a national banking association
By /s/ Xxxxxxxxxx Xxxx
-------------------------------------
Its Vice President
Supplement A - page 5
