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EXHIBIT 10.7
SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT dated as
of April __, 1998 (this "Amendment"), is entered into by and between HEALTH
VALLEY COMPANY, a Delaware corporation whose address is ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Borrower"), and LASALLE NATIONAL
BANK, a national banking association whose address is ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the "Bank").
WHEREAS, the Borrower and the Bank are parties to an Amended
and Restated Loan Agreement dated as of October 31, 1996 (as amended, the
"Credit Agreement"; capitalized terms use herein without definition shall have
the meanings set forth in the Credit Agreement); and
WHEREAS, the Borrower has requested (i) that the Credit
Agreement be amended to change certain financial covenants and (ii) that the
Bank agrees to waive a default existing as a result of financial covenant
breaches as of December 31, 1997, and the Bank has agreed, subject to the terms
and conditions contained herein, to so amend the Credit Agreement and waive such
defaults.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I - DEFAULTS AND WAIVER.
1.1 For purposes of this Amendment, the "Existing Default"
shall mean the Event of Default existing on this date under Section 8.10 of the
Credit Agreement for failure by the Borrower to maintain a Fixed Charge Coverage
Ratio for the twelve month period ending as of December 31, 1997 of at least
1.25:1.00.
1.2 Subject to and upon the terms and conditions hereof
(including, without limitation, the occurrence of the Effective Date), the Bank
hereby waives the Existing Default.
1.3 Nothing contained herein shall be deemed a waiver of (or
otherwise affect the Bank's ability to enforce) any other Default or Event of
Default, including without limitation (i) any Default or Event of Default as may
now or hereafter exist and arise from or otherwise be related to the Existing
Default (including without limitation any cross-default arising under the Credit
Agreement by virtue of any matters resulting from the Existing Default), and
(ii) any Default or Event of Default arising at any time after the Effective
Date and which is the same as any of the Existing Default.
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ARTICLE II - AMENDMENTS
In reliance on the Borrower's representations and warranties,
as of the date hereof the Bank hereby agrees to the following amendments to the
Credit Agreement:
2.1 Section 8.9 of the Credit Agreement is hereby deleted in
its entirety and the following is inserted in lieu thereof:
"Section 8.9 Minimum Current Ratio. The Borrower shall, at all
times during each of the periods specified below, maintain a Current Ratio of
not less:
Current Ratio Shall Not
From and Including To and Including Be Less Than:
January 1, 1007 December 31, 1997 0.70:1.0
January 1, 1998 December 31, 1998 0.80:1.0
January 1, 1999 December 31, 1999 1.00:1.0
January 1, 2000 the Term Loan A Termination 1.25:1.0"
Date
2.2 Section 8.10 of the Credit Agreement is hereby deleted in
its entirety and the following is inserted in lieu thereof:
"Section 8.10 Fixed Charge Coverage Ratio. The Borrower shall,
as of the last day of each calendar month for the then ending twelve month
periods described below, during each of the periods specified below, maintain
the ratio of (i) the difference of (a) EBITDA minus (i) the sum of (I) capital
expenditures expended plus (II) federal, state and local income taxes
(determined in each case for the twelve calendar months then ended) to (ii)
Fixed Charges for the same twelve month period then ended (the "Fixed Charge
Coverage Ratio") of (A) not less than 1.10 to 1.0, for the twelve calendar month
periods ending as of the last day of each calendar month commencing with the
month ending January 31, 1998 through and including the month ending May 31,
1998 (i.e., the twelve month period ending January 31, 1998, the twelve month
period ending February 28, 1998, etc...), (B) not less than 0.90 to 1.0, for the
twelve calendar month periods ending as of the last day of each calendar month
commencing with the month ending June 30, 1998 through and including the month
ending November 30, 1998, and (C) not less than 1.10 to 1.0, for each twelve
calendar month period ending as of the last day of each calendar month
thereafter through and including the Term Loan A Termination Date."
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ARTICLE III - REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Bank that:
3.1 Reaffirmation of Representations. Subject to the Existing
Default, the representations and warranties contained in Section 7 of the Credit
Agreement, as amended hereby, are true and correct in all material respects as
of the date hereof as though made on the date hereof and with the same effect as
though applied to the Credit Agreement as modified hereby.
3.2 Amendment. The Borrower is duly authorized to execute and
deliver this Amendment. The execution and delivery by the Borrower of this
Amendment does not and will not require any consents or approvals, and does not
conflict with, or result in a default under, any provision of law or of the
Borrower's charter or bylaws or of any agreement binding on the Borrower. This
Amendment is the legal, valid and binding obligation of the Borrower.
3.3 Default. After giving effect to this Amendment no Default
or Event of Default shall exist.
ARTICLE IV - GENERAL
4.1 Counterparts. This Amendment may be executed in any number
of counterparts and any party hereto may execute any counterpart, each of which
when executed and delivered will be deemed to be an original and all of which
counterparts of this Amendment when taken together will be deemed to be but one
and the same Amendment.
4.2 Effectiveness. Upon satisfaction of each of the following
conditions (the "Effective Date"), this Amendment shall become effective as of
the date hereof (provided, the amendment in Section 2.2 hereof shall be
retroactively effective to January 1, 1998) and the Bank shall so inform the
Borrower thereof:
(i) receipt by the Bank of counterparts of this Amendment
executed by the Borrower;
(ii) receipt by the Bank of an officer's certificate for the
Borrower attaching copies of the corporate resolutions adopted in
connection with the transactions contemplated hereby;
(iii) payment by the Borrower to the Bank of the costs and
expenses referred to in Section 4.7; and
(iv) such other documents which may be reasonably requested by
the Bank.
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4.3 Limited Amendments and Waivers. The amendments and waivers
contained herein are limited precisely to their terms and shall not constitute
an amendment or waiver generally or for any other purpose.
4.4 Reaffirmation. As herein modified, the Credit Agreement
shall remain in full force and effect and is hereby ratified, approved and
confirmed in all respects.
4.5 Reservation of Rights. The Borrower acknowledges and
agrees that neither the Bank's forbearance in exercising its rights and remedies
in connection with the Existing Default, nor the execution and delivery by the
Bank of this Amendment, shall be deemed (i) to create a course of dealing or
otherwise obligate the Bank to forbear or execute similar amendments or waivers
under the same or similar circumstances in the future, or (ii) to waive,
relinquish or impair any right of the Bank to receive any indemnity or similar
payment from any Person or entity as a result of any matter arising from or
relating to the Existing Default or this Amendment.
4.6 References. On and after the Effective Date, each
reference in the Credit Agreement, the Loan Documents and the related documents
to "Credit Agreement," "this Agreement" or words of like import, shall unless
the context otherwise requires, be deemed to refer to the Credit Agreement as
modified hereby.
4.7 Costs and Expenses. The Borrower agrees to pay all
reasonable fees and out-of-pocket costs and expenses of the Bank (including
reasonable attorneys fees and expenses of counsel to the Bank) in connection
with the preparation, execution and delivery of this Amendment.
4.8 Binding Agreement. This Amendment shall be binding upon
the Borrower and the Bank and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
HEALTH VALLEY COMPANY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Sr. VP-CFO
LASALLE NATIONAL BANK
By /s/ ▇▇▇▇▇ ▇. Thick
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Title: Officer
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