AMENDMENT NO. 2 TO LOAN AGREEMENT
Exhibit 10.1
AMENDMENT NO. 2 TO LOAN AGREEMENT
This Amendment No. 2 (this “Amendment”) dated as of July 31, 2009, is between Bank of America,
N.A. (the “Bank”) and Calavo Growers, Inc., a California corporation (together, the “Borrower”).
RECITALS
A. The Bank and the Borrower entered into a certain Business Loan Agreement
dated as of October 15, 2007 (together with any previous amendments, the
“Agreement”).
B. The Bank and the Borrower desire to amend the Agreement.
AGREEMENT
1. Definitions. Capitalized terms used but not defined in this Amendment shall have
the meaning given to them in the Agreement.
2. Amendments. The Agreement is hereby amended as follows:
2.1 Section 1.1(a) of the Agreement is amended and restated as
follows:
| (a) | During the availability period described below, the Bank will provide a line of credit to the Borrower. The amount of the line of credit (the “Commitment”) is $15,000,000. |
2.2 The first sentence of Section 1.2 is amended and restated as
follows:
1.2 Availability Period. The line of credit is available between
the date of this Agreement and July 1, 2011 or such earlier date as the
availability may terminate as provided in this Agreement (the “Expiration
Date”).
2.3 Section 1.4 of the Agreement is amended and restated as follows:
1.4 Interest Rate.
| (a) | The interest rate is a rate per year equal to the sum of (i) the greater of the BBA LIBOR Daily Floating Rate or the Index Floor, plus (ii) 1.00 percentage point. For the purposes of this paragraph, “index Floor” means 1.00 percentage point. |
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| (b) | The BBA LIBOR Daily Floating Rate is a fluctuating rate of interest which can change on each banking day. The rate will be adjusted on each banking day to equal the British Bankers Association LIBOR Rate (“BBA LIBOR”) for U.S. Dollar deposits for delivery on the date in question for a one month term beginning on that date. The Bank will use the BBA LIBOR Rate as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time) as determined at approximately 11:00 a.m. London time two (2) London Banking Days prior to the date in question, as adjusted from time to time in the Bank’s sole discretion for reserve requirements, deposit insurance assessment rates and other regulatory costs. If such rate is not available at such time for any reason, then the rate will be determined by such alternate method as reasonably selected by the Bank. A “London Banking Day” is a day on which banks in London are open for business and dealing In offshore dollars. |
2.4 Section 1.5 of the Agreement is amended and restated as follows:
1.5 Optional interest Rates.
Instead of the interest rate based on the rate stated in the paragraph entitled “Interest
Rate” above, the Borrower may elect the optional interest rates listed below for this
Commitment during interest periods agreed to by the Bank and the Borrower. The optional
interest rates shall be subject to the terms and conditions described later in this
Agreement. Any principal amount bearing interest at an optional rate under this Agreement
is referred to as a “Portion.” The following optional interest rates are available:
| (a) | The sum of (i) the greater of the LIBOR Rate or the Index Floor, plus (ii) 1.00 percentage point. For the purposes of this paragraph, “Index Floor” means 1.00 percentage point. |
| 2.5 | Sections 2.2 and 2.3 of the Agreement are amended and restated as follows: |
2.2 LlBOR Rate.
The election of LIBOR Rates shall be subject to the following terms and
requirements:
| (a) | The interest period during which the LIBOR Rate will be in effect will be one or two weeks, or one, two, three, four, five, six, seven, eight, nine, ten, eleven, or twelve months. The first day of the interest period must be a day other than a Saturday or a Sunday on which banks are open for business in New York and London and dealing in offshore dollars (a “LIBOR Banking Day”). The last day of the interest period and the actual number of days during the interest period will be determined by the Bank using the practices of the London inter-bank market. | ||
| (b) | Each LIBOR Rate Portion will be for an amount not less than One Hundred Thousand Dollars ($100,000). | ||
| (c) | The “LIBOR Rate” means the interest rate determined by the following formula. (All amounts in the calculation will be determined by the Bank as of the first day of the interest period.) |
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| LIBOR Rate = | London Inter-Bank Offered Rate | |||||
| (1.00 - Reserve Percentage) |
Where,
| (i) | “London Inter-Bank Offered Rate” means, for any applicable interest period, the rate per annum equal to the British Bankers Association LIBOR Rate (“BBA LIBOR”), as published by Reuters (or other commercially available source providing quotations of BBA LIBOR as selected by the Bank from time to time) at approximately 11:00 a.m. London time two (2) London Banking Days before the commencement of the interest period, for U.S. Dollar deposits (for delivery on the first day of such interest period) with a term equivalent to such interest period. If such rate is not available at such time for any reason, then the rate for that interest period will be determined by such alternate method as reasonably selected by the Bank. A “London Banking Day” is a day on which banks in London are open for business and dealing in offshore dollars. | ||
| (ii) | “Reserve Percentage” means the total of the maximum reserve percentages for determining the reserves to be maintained by member banks of the Federal Reserve System for Eurocurrency Liabilities, as defined in Federal Reserve Board Regulation D, rounded upward to the nearest 1/100 of one percent. The percentage will be expressed as a decimal, and will include, but not be limited to, marginal, emergency, supplemental, special, and other reserve percentages. |
| (d) | The Borrower shall irrevocably request a LIBOR Rate Portion no later than 12:00 noon California time on the LIBOR Banking Day preceding the day on which the London Inter-Bank Offered Rate will be set, as specified above. For example, if there are no intervening holidays or weekend days in any of the relevant locations, the request must be made at least three days before the LIBOR Rate takes effect. | ||
| (e) | The Bank will have no obligation to accept an election for a LIBOR Rate Portion if any of the following described events has occurred and is continuing: |
| (i) | Dollar deposits in the principal amount, and for periods equal to the interest period, of a LIBOR Rate Portion are not available in the London inter-bank market; or | ||
| (ii) | the LIBOR Rate does not accurately reflect the cost of a LIBOR Rate Portion. |
| (f) | Each prepayment of a LIBOR Rate Portion, whether voluntary, by reason of acceleration or otherwise, will be accompanied by the amount of accrued interest on the amount prepaid and a prepayment fee as described below. A “prepayment” is a payment of an amount on a date earlier than the scheduled payment date for such amount as required by this Agreement. | ||
| (g) | The prepayment fee shall be in an amount sufficient to compensate the Bank for any loss, cost or expense incurred by it as a result of the prepayment, including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained |
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| by it to maintain such Portion or from fees payable to terminate the deposits from which such funds were obtained. The Borrower shall also pay any customary administrative fees charged by the Bank in connection with the foregoing. For purposes of this paragraph, the Bank shall be deemed to have funded each Portion by a matching deposit or other borrowing in the applicable interbank market, whether or not such Portion was in fact so funded. |
2.6 Section 3.1(a) of the Agreement is amended by replacing the
phrase “0.15% per year” with the phrase “0.375% per year.”
2.7 Section 4.6 of the Agreement is amended by replacing the phrase
“2.0 percentage point(s)” with the phrase “6.0 percentage points”.
2.8 Section 7.19 of the Agreement is amended and restated as follows:
7.19 Tangible Net Worth. Prior to October 31, 2010, to maintain
on a consolidated basis Tangible Net Worth equal to at least Fifty-Nine
Million Dollars ($59,000,000) and, on and after October 31, 2010, to
maintain on a consolidated basis Tangible Net Worth equal to at least
Sixty-Four Million Dollars ($64,000,000), in each case, measured on a
quarterly basis.
“Tangible Net Worth” means the value of total assets (Including
leaseholds and leasehold improvements and reserves against assets but
excluding goodwill, patents, trademarks, trade names, organization
expense, unamortized debt discount and expense, capitalized or
deferred research and development costs, deferred marketing expenses,
and other like intangibles, and monies due from affiliates, officers,
directors, employees, shareholders, members or managers) less total
liabilities, including but not limited to accrued and deferred income
taxes, but excluding the non-current portion of Subordinated
Liabilities.
“Subordinated Liabilities” means liabilities subordinated to the
Borrower’s obligations to the Bank in a manner acceptable to the Bank
in its sole discretion.
2.9 Section 7.21 of the Agreement is amended and restated as
follows:
7.21 Funded Debt to EBITDA Ratio.
To maintain on a consolidated basis a ratio of Funded Debt to EBITDA
not exceeding 3.00:1.0.
“Funded Debt” means all outstanding liabilities for borrowed money and other
interest-bearing liabilities, including current and long term debt, less the
non-current portion of Subordinated Liabilities.
“EBITDA” means net income, less income or plus loss from discontinued
operations and extraordinary items, plus income taxes, plus interest
expense, plus depreciation, depletion, and amortization. This ratio will be
calculated at the end of each reporting period for which the Bank requires
financial statements, using the results of the twelve-month period ending
with that reporting period.
“Subordinated Liabilities” means liabilities subordinated to the Borrower’s
obligations to the Bank in a manner acceptable to the Bank in its sole
discretion.
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3. Representations and Warranties. When the Borrower signs this
Amendment, the Borrower represents and warrants to the Bank that: (a) there is no
event which is, or with notice or lapse of time or both would be, a default under the
Agreement except those events, if any, that have been disclosed in writing to the Bank
or waived in writing by the Bank, (b) the representations and warranties in the
Agreement are true as of the date of this Amendment as if made on the date of this
Amendment, (c) this Amendment does not conflict with any law, agreement, or
obligation by which the Borrower is bound, and (d) if the Borrower is a business entity or
a trust, this Amendment is within the Borrower’s powers, has been duly authorized, and
does not conflict with any of the Borrower’s organizational papers.
4. Conditions. This Amendment will be effective when the Bank receives the
following items, in form and content acceptable to the Bank:
4.1 A copy of this Amendment executed by Borrower.
4.2 If the Borrower or any guarantor is anything other than a natural
person, evidence that the execution, delivery and performance by the Borrower
and/or such guarantor of this Amendment and any instrument or agreement
required under this Amendment have been duly authorized.
4.3 Payment by the Borrower of all costs, expenses and attorneys’ fees
(including allocated costs for in-house legal services) incurred by the Bank in
connection with this Amendment.
5. Effect of Amendment. Except as provided in this Amendment, all of the terms
and conditions of the Agreement shall remain in full force and effect.
6. Counterparts. This Amendment may be executed in counterparts, each of
which when so executed shall be deemed an original, but all such counterparts together
shall constitute but one and the same instrument.
7. FINAL AGREEMENT. BY SIGNING THIS DOCUMENT EACH PARTY
REPRESENTS AND AGREES THAT: (A) THIS DOCUMENT REPRESENTS THE
FINAL AGREEMENT BETWEEN PARTIES WITH RESPECT TO THE SUBJECT
MATTER HEREOF, (B) THIS DOCUMENT SUPERSEDES ANY COMMITMENT
LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS AND
CONDITIONS RELATING TO THE SUBJECT MATTER HEREOF, UNLESS SUCH
COMMITMENT LETTER, TERM SHEET OR OTHER WRITTEN OUTLINE OF TERMS
AND CONDITIONS EXPRESSLY PROVIDES TO THE CONTRARY, (C) THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES, AND (D) THIS
DOCUMENT MAY NOT BE CONTRADICTED BY EVIDENCE OF ANY PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
UNDERSTANDINGS OF THE PARTIES.
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This Amendment is executed as of the date stated at the beginning of this Amendment.
| Bank of America, N.A. | ||||
By
|
/s/ Xxxxx Xxxxxx
|
|||
| Name: Xxxxx Xxxxxx | ||||
| Title: Assistant Vice President | ||||
Borrower: Calavo Growers, Inc., a California corporation
By
|
/s/ Xxxxx Xxxxxx
|
|||
| Name: Xxxxx Xxxxxx | ||||
| Title: Corporate Controller | ||||
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