EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
Dated as of December 18, 2002
LifeCore Biomedical, Inc., a Minnesota corporation (the "Borrower"),
located at 0000 Xxxxx Xxxxxxxxx, Xxxxxx, XX 00000 and M&I Xxxxxxxx and Ilsley
Bank, a Wisconsin state banking corporation (the "Bank"), located at 000
Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000-0000, agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. Definitions. As used in this Agreement the
following terms shall have the following meanings (such meanings to be equally
applicable to singular and plural forms of the terms defined):
(a) "Affiliate" means any of the following Persons:
(i) any director, officer or employee of the
Borrower;
(ii) any person who, individually or with his
immediate family, beneficially owns or holds 5% or more of
voting interest of the Borrower; or
(iii) any Subsidiary and any company in which any
Person described above owns a 5% or greater equity interest.
(b) "Borrowing Base" means an amount equal to the sum of the
following:
(i) 80% of the Value of Eligible Accounts; and
(ii) 50% of the Value of Eligible Inventory, provided
that the portion of the Borrowing Base attributable to this
factor shall not at any time exceed $1,000,000.00.
(c) "Borrowing Base Certificate" means a certificate signed by
the chief financial officer of the Borrower that shows as of the date
of determination the Value of Eligible Accounts and the Value of
Eligible Inventory and is delivered to the Bank pursuant to Section
5.1(a).
(d) "Business Day" means any day other than a Saturday, Sunday
or a public holiday or the equivalent under the laws of the State of
Minnesota or the United States of America.
(e) "Debt" means (i) indebtedness for borrowed money or for
the deferred purchase price of property or services, (ii) obligations
as lessee under leases that have been or should be, in accordance with
generally accepted accounting principles, recorded as capital leases,
(iii) obligations under direct or indirect guaranties in respect of,
and obligations (contingent or otherwise) to purchase or otherwise
acquire, or otherwise to assure a creditor against loss in respect of,
indebtedness or obligations of others of the kinds referred to in
clause (i) or (ii) above, and (iv) liabilities in respect of unfunded
vested benefits under plans covered by Title IV of ERISA.
(f) "Event of Default" means one of the events specified in
Section 6.1.
(g) "Inventory" means the Borrower's finished goods and raw
materials held for sale or use in the ordinary course of business, but
excluding work-in-process.
(h) "Loan Documents" means this Agreement, the Note, the
Security Agreement, and all other documents to be executed in
connection with this Agreement.
(i) "Loan Party" means any Person obligated under any Loan
Document.
(j) "Note" means the Revolving Note described in Section 2.2.
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(k) "Person" means an individual, corporation, partnership,
joint venture, trust or unincorporated organization or governmental
agency or political subdivision thereof.
(l) "Prime Rate" means the rate established by the Bank from
time to time as its prime rate.
(m) "Subsidiary" means any entity of which more than 50% of
the outstanding equity interests having ordinary voting power to elect
a majority of the Board of Directors, Board of Governors or comparable
governing body of such entity (irrespective of whether or not at the
time equity interests of such entity shall or might have voting power
upon the occurrence of any contingency) is at the time directly or
indirectly owned by the Borrower, by the Borrower and one or more other
Subsidiaries, or by one or more other Subsidiaries.
(n) "Tangible Net Worth" means the aggregate of the capital
stock, paid in surplus and retained earnings of the Borrower (excluding
stock of the Borrower held by the Borrower), determined and computed in
accordance with generally accepted accounting principles consistently
applied from year to year, less the book value of all assets of the
Borrower that would be treated as intangibles under generally accepted
accounting principles including without limitation, such items as
goodwill, trademarks, tradenames, service marks, copyrights, patents,
licenses, internet domain names, uniform resource locators, and website
contracts and registration rights and less the book value of all
obligations owed to the Borrower by any of its Affiliates.
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(o) "Total Liabilities" means the aggregate of the liabilities
of the Borrower determined and computed in accordance with generally
accepted accounting principles consistently applied from year to year.
(p) "Value of Eligible Accounts" means the aggregate net
unpaid amount then due and owing under all domestic accounts receivable
of the Borrower that: (i) arise from the provision of service or the
sale of finished goods constituting part of Inventory in the ordinary
course of business of the Borrower; (ii) are not dated more than 30
days after delivery or performance and not more than 60 days past due;
(iii) are not owed by an Affiliate of the Borrower; (iv) are subject to
a perfected security interest in favor of only the Bank as required by
this Agreement; (v) are not subject to dispute by the account debtor,
provided that this exclusion shall not apply to the value of any
portion of an account that is not subject to dispute; (vi) are not owed
by an account debtor as to which any bankruptcy, receivership or
similar insolvency proceeding is pending; and (vii) are not owed by the
United States government or an agency of the United States government;
provided, however, that no obligations of any account debtor to the
Borrower shall be included in this computation if more than 10% of such
account debtor's obligations to the Borrower are more than 60 days past
due.
(q) "Value of Eligible Inventory" means an amount equal to the
lesser of cost or fair market value of the Borrower's Inventory that is
subject to a perfected security interest in favor of only the Bank as
required by this Agreement as determined and computed in accordance
with generally accepted accounting principles.
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Section 1.2. Accounting and Other Terms. All accounting terms not
specifically defined in this Agreement shall be construed in accordance with
generally accepted accounting principles consistently applied as such principles
may change from time to time. Other terms defined herein shall have the meanings
ascribed to them herein.
ARTICLE II.
REVOLVING LOAN
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, 2005 (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"); provided, however, that (i) the aggregate
amount of Advances outstanding shall not at any time exceed the lesser of (A)
the Commitment or (B) the Borrowing Base and (ii) the Commitment shall expire on
December 31, 2003 if the Borrower fails to pay a facility fee of $12,500.00 to
the Bank on or before December 31, 2003. Each Advance shall be in an amount of
not less than $50,000.00. Within the limits of the Commitment the Borrower may
borrow, prepay pursuant to Section 2.5 and reborrow under this Section 2.1.
Section 2.2. The Note. The Advances made by the Bank shall be evidenced
by a promissory note (the "Note") that is in substantially the form of Exhibit A
attached hereto and is delivered to the Bank pursuant to Article III.
Section 2.3. Making of Advances. The Borrower may request Advances
under this Agreement by giving notice to the Bank, specifying the date of the
requested Advance and the amount thereof. Any request for an Advance shall be
deemed to be a representation that the
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Borrower's representations and warranties contained in Section 4.1 are true and
correct as of the date of the Advance as though made on and as of such date and
that no event has occurred and is continuing, or will result from such Advance,
that constitutes an Event of Default or would constitute an Event of Default but
for the requirement that notice be given or time elapse or both. The Bank may
disburse each requested Advance by crediting immediately available funds in the
amount of the Advance to the Borrower's demand deposit account maintained with
the Bank.
Section 2.4. Interest and Payments. The Borrower shall repay, and shall
pay interest on, the aggregate unpaid principal amount of all Advances in
accordance with the Note, except that after and during the continuance of an
Event of Default the Borrower shall pay interest at an annual rate equal to 2.0%
in excess of the rate of interest otherwise provided under the Note. All
payments of principal, interest and fees under this Agreement shall be made when
due to the Bank in immediately available funds. All computations of interest
shall be made by the Bank on the basis of the actual number of days elapsed in a
year of 360 days. Whenever any such payment shall be due on a non-Business Day,
such payment shall be made on the next succeeding Business Day, and such
extension of time shall be included in the computation of interest. The Bank is
expressly authorized to charge any principal or interest payment, when due, to
the Borrower's demand deposit account maintained at the Bank, or, if that
account shall not contain sufficient funds, to any other account maintained by
the Borrower at the Bank.
Section 2.5. Voluntary Prepayment. The Borrower may prepay the Note in
whole or in part; provided, however, that each partial prepayment shall be in a
principal amount of not less than $50,000.00.
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Section 2.6. Mandatory Prepayment. In the event that the aggregate
outstanding principal amount of the Note shall exceed the Borrowing Base as
shown on the Borrowing Base Certificate most recently delivered to the Bank
pursuant to Section 5.1(a), the Borrower shall pay to the Bank the amount of
such excess together with the amount of accrued interest to the date of such
prepayment on the amount prepaid. In addition, the Borrower shall re-pay the
Note in full for a period of not less than 30 consecutive days during each
fiscal year of the Borrower.
Section 2.7. Use of Proceeds. The proceeds of the Advances from the
Bank shall be used for working capital purposes.
ARTICLE III.
CONDITIONS OF LENDING
Section 3.1. Conditions Precedent to Initial Advance. The Bank shall
have no obligation to make the initial Advance hereunder unless the Bank shall
have received on or before the date of such Advance the following documents
along with an initial facility fee of $12,500.00:
(a) The Note, properly executed and delivered on behalf of the
Borrower.
(b) A security agreement (the "Security Agreement"), in a form
acceptable to the Bank properly executed and delivered on behalf of the
Borrower, granting to the Bank a security interest in all of the
Borrower's inventory, accounts, equipment, general intangibles and
other property described therein as security for the performance of the
Borrower's obligations under this Agreement and the Note, together with
any UCC-1 Financing Statement or other document deemed necessary or
desirable by the Bank to perfect the security interest granted by the
Security Agreement.
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(c) A certified copy of the resolutions of the Board of
Directors of the Borrower, approving the execution and delivery of the
Loan Documents to which it is a party and approving all other matters
contemplated by this Agreement.
(d) A certificate by the Secretary or any Assistant Secretary
of the Borrower certifying the names of the officer or officers of the
Borrower authorized to sign the Loan Documents to which it is a party,
together with a sample of the true signature of such officer.
Section 3.2. Conditions Precedent to Each Advance. The obligation of
the Bank to make each Advance (including the initial Advance) shall be subject
to the further conditions precedent, that on the date of such Advance:
(a) The representations and warranties contained in Section
4.1 of this Agreement are correct on and as of the date of such Advance
as though made on such date; and
(b) No event has occurred and is continuing, or will result
from such Advance, that constitutes an Event of Default or would
constitute an Event of Default but for the requirement that notice be
given or time elapse or both.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of the Borrower. To induce
the Bank to make Advances, the Borrower represents and warrants as follows:
(a) Existence of Borrower. The Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of
the state indicated at the beginning of this Agreement. The Borrower
has not, in the past five years, operated
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under any name, including any trade name or assumed name, other than
the name indicated at the beginning of this Agreement.
(b) Authority to Execute. The execution, delivery and
performance by the Borrower of the Loan Documents to which it is a
party are within the Borrower's corporate powers, have been duly
authorized by all necessary corporate action, do not and will not
conflict with any provision of law or of the articles of incorporation
or bylaws of the Borrower or of any agreement or contractual
restriction binding upon or affecting the Borrower or any of its
property, and need no further shareholder or creditor consent.
(c) Binding Obligation. This Agreement is, and the other Loan
Documents when delivered hereunder will be, legal, valid and binding
obligations of the Loan Parties enforceable against such Persons in
accordance with their respective terms.
(d) Governmental Approval. No consent of, or filing with, any
governmental authority is required on the part of any Loan Party in
connection with the execution, delivery or performance of any Loan
Documents.
(e) Financial Statements. The audited financial statements of
the Borrower as of June 30, 2001 and the audited financial statements
as of June 30, 2002, copies of which have been furnished to the Bank,
have been prepared in conformity with generally accepted accounting
principles consistently applied and present fairly the financial
condition of the Borrower as of such dates, and the results of the
operations of the Borrower for the financial periods then ended, and
since such dates, there has been no materially adverse change in such
financial condition.
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(f) Litigation. No litigation or governmental proceeding is
pending or threatened against the Borrower that may have a materially
adverse effect on the financial condition or operations of the
Borrower, except for the existing litigation known as the "Straumann
Litigation" previously disclosed to the Bank.
(g) Title to Assets. The Borrower has good and marketable
title to all assets used in connection with its trades or businesses,
and none of such assets is subject to any mortgage, pledge, lien,
security interest or encumbrance of any kind, except for current taxes
not delinquent, and except for Permitted Liens.
(h) Taxes. The Borrower has filed all federal and state income
tax returns that are required to be filed, and has paid all taxes shown
on such returns to be due and all other tax assessments received by it
to the extent that such assessments have become due.
(i) ERISA. No plan (as that term is defined in the Employee
Retirement Income Security Act of 1974 ("ERISA")) of the Borrower (a
"Plan") that is subject to Part 3 of Subtitle B of Title 1 of ERISA had
an accumulated funding deficiency (as such term is defined in ERISA) as
of the last day of the most recent fiscal year of such Plan ended prior
to the date hereof, or would have had such an accumulated funding
deficiency on such date if such year were the first year of such Plan,
and no material liability to the Pension Benefit Guaranty Corporation
has been, or is expected by the Borrower to be, incurred with respect
to any such Plan. No Reportable Event (as defined in ERISA) has
occurred and is continuing in respect to any such Plan.
(j) Defaults. The Borrower is not in default in the payment of
principal or interest on any indebtedness for borrowed money and is not
in default under any
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instrument or agreement under or subject to which any indebtedness for
borrowed money has been issued, and no event has occurred and is
continuing that, with or without the lapse of time or the giving of
notice, or both, constitutes or would constitute an event of default
under any such instrument or agreement or an Event of Default
hereunder.
(k) Subsidiaries. The Borrower has no Subsidiaries.
(l) Burdensome Contracts. The Borrower is not subject to any
contracts or agreements the terms of which, if enforced, would
materially adversely affect the financial condition or operations of
the Borrower.
(m) Patents, Trademarks, Etc. The Borrower has good and
marketable title to all patents, trademarks, processes, copyrights,
franchises and licenses title to which is necessary for the operation
of the Borrower's businesses.
(n) Use of Proceeds For Securities Transactions. No proceeds
of any Advance will be used to acquire any security in any transaction
that is subject to Section 12 of the Securities Exchange Act of 1934.
(o) Regulation U. The Borrower is not engaged in the business
of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U issued by the Board of
Governors of the Federal Reserve System), and no proceeds of any
Advance will be used to purchase or carry any margin stock or to extend
credit to others for the purpose of purchasing or carrying any margin
stock.
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ARTICLE V.
COVENANTS OF THE BORROWER
Section 5.1. Affirmative Covenants. So long as the Note shall remain
unpaid or the Bank shall have a Commitment hereunder, the Borrower will, unless
the Bank shall give its prior written consent:
(a) Financial Reporting. Furnish to the Bank: (i) as soon as
available and in any event within 45 days after the end of each quarter
of each fiscal year of the Borrower, unaudited balance sheets of the
Borrower as of the end of such quarter and unaudited statements of
income and retained earnings of the Borrower for the period commencing
at the end of the previous fiscal year and ending with the end of such
quarter, certified by the chief financial officer of the Borrower; (ii)
as soon as available and in any event within 120 days after the end of
each fiscal year of the Borrower, (A) a copy of the annual report for
such year for the Borrower, containing financial statements for such
year certified in a manner acceptable to the Bank by Xxxxx Xxxxxxxx,
LLP or other independent public accountants acceptable to the Bank and
(B) a budget and projections prepared by the Borrower in a form
reasonably acceptable to the Bank for the following fiscal year; (iii)
promptly upon the sending or filing thereof copies of all public
reports issued by the Borrower to any of its security holders, to the
Securities and Exchange Commission or to any national securities
exchange; (iv) promptly upon the filing or receiving thereof, copies of
all reports that the Borrower files under ERISA or that the Borrower
receives from the Pension Benefit Guaranty Corporation if such report
shows any material violation or potential violation by the Borrower of
its obligations under ERISA; (v) such other information concerning the
conditions or operations, financial or
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otherwise, of the Borrower as the Bank from time to time may reasonably
request; (vi) within 30 days after the end of each month, a Borrowing
Base Certificate, together with an accounts receivable and accounts
payable aging, for such month.
(b) Visitation Rights. At any reasonable time and from time to
time, permit the Bank or any agents or representatives thereof, to
examine and make copies of and abstracts from the records and books of
account of, and visit the properties of, the Borrower, and to discuss
the affairs, finances and accounts of the Borrower with any of its
officers or directors. The Borrower will reimburse the Bank for its
reasonable costs and expenses of conducting such periodic examinations,
provided that so long as no Event of Default has occurred and is
continuing, the Borrower shall not be required to reimburse the Bank
for more than one such examination in each fiscal year.
(c) Notification of Default, Etc. Notify the Bank as promptly
as practicable (but in any event not later than 5 Business Days) after
the Borrower obtains knowledge of: (i) the occurrence of any event
which constitutes an Event of Default or which would constitute an
Event of Default with the passage of time or the giving of notice or
both; or (ii) the commencement of any litigation or governmental
proceedings of any type that could materially adversely affect the
financial condition or business operations of the Borrower.
(d) Compliance Certificate. At the time any financial
statement is required to be provided to Bank under this Agreement, the
Borrower will provide to Bank a certificate of the chief financial
officer of the Borrower substantially in the form of Exhibit B attached
hereto (appropriately completed). If that certificate shows that an
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Event of Default or any event that would constitute an Event of Default
with the passage of time or the giving of notice or both, has occurred,
the certificate shall state in reasonable detail the circumstances
surrounding such event and action proposed by the Borrower to cure such
event.
(e) Keeping of Financial Records and Books of Account.
Maintain proper financial records in accordance with generally accepted
accounting principles consistently applied that fully and correctly
reflect all financial transactions and all assets and liabilities of
the Borrower.
(f) Tangible Net Worth. Maintain as of the end of each fiscal
quarter (a) Tangible Net Worth of not less than $42,000,000.00 and (b)
a ratio of Total Liabilities to Tangible Net Worth of not more than
0.50 to 1.
(g) Net Income. Obtain a positive net income in each fiscal
year.
(h) Maintenance of Insurance. Maintain such insurance with
reputable insurance carriers as is normally carried by companies
engaged in similar businesses and owning similar property, and name the
Bank as loss payee on all policies insuring personal property in which
the Bank has a security interest and provide the Bank with certificates
of insurance evidencing its status as a loss payee. The loss payee
endorsement shall provide for payment to the Bank notwithstanding any
acts or omissions of the Borrower and shall require notice to the Bank
30 days prior to the expiration or cancellation of the insurance.
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(i) Maintenance of Properties, Etc. Maintain and preserve all
of its properties, necessary or useful in the proper conduct of its
business, in good working order and condition, ordinary wear and tear
excepted.
(j) Payment of Taxes. Pay all taxes, assessments and
governmental charges of any kind payable by it as such taxes,
assessments and charges become due and before any penalty shall be
imposed, except as the Borrower shall contest in good faith and by
appropriate proceedings providing such reserves as are required by
generally accepted accounting principles.
(k) Compliance with ERISA. Cause each Plan to comply and be
administered in accordance with those provisions of ERISA that are
applicable to such Plan.
(l) Maintenance of Accounts. Maintain its corporate bank
accounts at the Bank except for such incidental accounts that
reasonable business judgment requires to be maintained elsewhere, and
either (i) keep collected demand deposit balances in such accounts in
the amount necessary to compensate the Bank for applicable activity
charges in such accounts, as calculated by the Bank and applied to such
balances in a manner consistent with all similar accounts or (ii) pay
such activity charges on a monthly basis.
(m) Preservation of Corporate Existence, Etc. Preserve and
maintain its corporate existence, rights, franchises and privileges in
the jurisdiction of its incorporation, and qualify and remain
qualified, as a foreign corporation in each jurisdiction in which such
qualification is necessary or desirable in view of its business and
operations or the ownership of its properties.
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Section 5.2. Negative Covenants. So long as the Note shall remain
unpaid or the Bank shall have a Commitment hereunder, the Borrower will not,
unless the Bank shall give its prior written consent:
(a) Liens. Create or suffer to exist any mortgage, pledge,
lien, security interest or other encumbrance with respect to any assets
now owned or hereafter acquired by the Borrower except (i) encumbrances
made in favor of the Bank, (ii) existing encumbrances, (iii) purchase
money liens on, or leases of, equipment, (iv) deposits or pledges to
secure payment of workers' compensation, unemployment insurance, old
age pensions or other social security obligations, in the ordinary
course of business of the Borrower; (v) liens for taxes, fees,
assessments and governmental charges not delinquent or to the extent
that payment therefor shall not at the time be required to be made in
accordance with the provisions of Section 5.1(j); (vi) liens of
carriers, warehousemen, mechanics and materialmen, and other like liens
arising in the ordinary course of business, for sums not due or to the
extent that payment therefor shall not at the time be required to be
made; (vii) liens incurred or deposits or pledges made or given in
connection with, or to secure payment of, indemnity, performance or
other similar bonds; and (viii) encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use
of real property and landlord's liens under leases on the premises
rented, which do not materially detract from the value of such property
or impair the use thereof in the business of the Borrower ("Permitted
Liens").
(b) Merger, Etc. Merge or consolidate with any other Person;
sell, transfer, convey, lease or otherwise dispose of (whether in one
transaction or in a series of
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transactions) all or a substantial portion of its assets (whether now
owned or hereafter acquired) to any other Person.
(c) Transactions with Affiliates. Engage in any transaction
(including, without limitation, loans or financial accommodations of
any kind) with any Affiliate provided that such transactions are
permitted if they are on terms no less favorable to the Borrower than
would be obtainable if no such relationship existed.
(d) Investments in Other Persons. Make any loan or advance to
any Person; or purchase or otherwise acquire the capital stock, assets,
or obligations of, or any interest in, any other Person other than (i)
readily marketable direct obligations of the United States of America
or any agency thereof, (ii) certificates of deposits, bankers'
acceptances or deposits in commercial banks of recognized standing
operating in the United States of America, (iii) investments existing
on the date of this Agreement and disclosed in the financial statements
previously provided to the Bank; (iv) travel advances to management
personnel and employees in the ordinary course of business; (v)
commercial paper given the highest rating by a nationally recognized
rating service; (vi) other readily marketable Investments in debt
securities which are reasonably acceptable to the Bank; and (vii) other
investments in an aggregate amount outstanding at any time not in
excess of $1,000,000.00.
(e) Change in Nature of Business. Make any material change in
the nature of the business of the Borrower, taken as a whole, as
carried on at the date hereof.
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ARTICLE VI.
DEFAULT
Section 6.1. Events of Default. "Events of Default" in this Agreement
means any of the following events:
(a) Failure of the Borrower to pay the principal of the Note
when due;
(b) Failure of the Borrower to pay any interest or fees
required to be paid hereunder or under the Note when due;
(c) Any representation or warranty made by, or on behalf of,
any Loan Party in, or pursuant to, any Loan Document shall prove to
have been incorrect in any material respect when made or the Borrower
shall dispose of any collateral described in the Security Agreement in
violation of the Security Agreement;
(d) Default in performance of any other covenant or agreement
of any Loan Party in, or pursuant to, any Loan Document and continuance
of such default or breach for a period of 30 days after written notice
thereof to such Person by the Bank;
(e) Any Loan Party shall generally not pay its or his debts as
such debts become due, or shall admit in writing its or his inability
to pay its or his debts generally, or shall make a general assignment
for the benefit of creditors; or any proceeding shall be instituted by
or against any Loan Party seeking to adjudicate it or him a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, custodianship, protection, relief, or
composition of it or him or its or his debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief, or the appointment of a
receiver, custodian, trustee, or other similar official for it or him
or for any substantial part of its or his property; or any
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Loan Party shall take any corporate action to authorize any of the
actions set forth above in this subsection; and in the case of a
proceeding of the type described in this paragraph commenced against
any Loan Party, that proceeding shall not be dismissed within 60 days
or that Loan Party shall consent to that proceeding;
(f) The Borrower shall fail to pay any material Debt (but
excluding Debt evidenced by the Note) of the Borrower or any interest
or premium thereon, when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure shall
continue after the applicable grace period, if any, specified in the
agreement or instrument relating to such material Debt; or any other
default under any agreement or instrument relating to any such material
Debt, or any other event, shall occur and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to accelerate, or
to permit the acceleration of, the maturity of such material Debt; or
any such material Debt shall be declared to be due and payable, or
required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(g) The entry against any Loan Party of a final judgment,
decree or order for the payment of money in excess of $250,000.00 and
the continuance of such judgment, decree or order unsatisfied for a
period of 30 days without a stay of execution;
(h) Any Reportable Event (as defined in ERISA) shall have
occurred and continue for 30 days; or any Plan shall have been
terminated by the Borrower not in compliance with ERISA, or a trustee
shall have been appointed by a court to administer
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any Plan, or the Pension Benefit Guaranty Corporation shall have
instituted proceedings to terminate any Plan or to appoint a trustee to
administer any Plan.
Section 6.2. Rights and Remedies. If any Event of Default shall occur
and be continuing, the Bank may exercise any or all of the following rights and
remedies:
(a) By written notice to the Borrower, suspend or terminate
the Commitment, whereupon the same shall forthwith be suspended or
terminated;
(b) Declare the Note, all interest thereon, and all other
obligations under, or pursuant to, any Loan Document to be immediately
due and payable, and upon such declaration such Note, interest and
other obligations shall immediately be due and payable, without
presentment, demand, protest or any notice of any kind, all of which
are expressly waived;
(c) Exercise any right or remedy under the Security Agreement,
or any other right or remedy of a secured party under the Uniform
Commercial Code as in effect in Minnesota;
(d) Exercise any other right or remedy available to the Bank
at law or in equity.
ARTICLE VII.
MISCELLANEOUS
Section 7.1. No Waiver; Cumulative Remedies. No failure or delay on the
part of the Bank in exercising any right or remedy under, or pursuant to, any
Loan Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy or power preclude other or further exercise
thereof, or the exercise of any other right, remedy or power.
C-20
The remedies in the Loan Documents are cumulative and are not exclusive of any
remedies provided by law.
Section 7.2. Amendments and Waivers. No amendment or waiver of any
provision of any Loan Document shall be effective unless such amendment or
waiver is in writing and is signed by the Bank, and such amendment or waiver
shall be effective only in the specific instance and for the specific purpose
for which it was given.
Section 7.3. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier communication)
and mailed or telecopied or delivered, if to the Borrower, at its address stated
in the preamble hereof, Attention: Xxxxx Xxxx; and if to the Bank, at its
address stated in the preamble hereof, Attention: Xxxx Xxx; or, as to each
party, at such other address as shall be designated by such party in a written
notice to the other party. All such notices and communications shall, when
mailed or telecopied, be effective when deposited in the mails or transmitted by
telecopier, respectively, addressed as provided above, except that notices to
the Bank pursuant to the provisions of Article II shall not be effective until
received by the Bank.
Section 7.4. Costs and Expenses. The Borrower agrees to pay on demand
all costs and expenses of the Bank in connection with the preparation of the
Loan Documents, including reasonable attorneys fees and legal expenses, as well
as all costs and expenses of the Bank, including reasonable attorneys fees and
expenses, in connection with the administration and enforcement of the Loan
Documents (whether suit is commenced or not).
Section 7.5. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default the Bank is hereby authorized at any time
and from time to time, to the fullest
C-21
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Bank to or for the credit or the account
of the Borrower against any and all of the obligations of the Borrower now or
hereafter existing under any Loan Document, irrespective of whether or not the
Bank shall have made any demand under any Loan Document and although such
obligations may be unmatured. The Bank agrees promptly to notify the Borrower
after any such set-off and application, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Bank under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) that the Bank may have.
Section 7.6. Governing Law. All Loan Documents shall be governed by the
laws of the State of Minnesota. Any term used in this Agreement and not
otherwise defined shall have the definition given that term in the Uniform
Commercial Code as in effect in the State of Minnesota from time to time, and
such definition automatically shall change on the effective date of any
amendment to the Uniform Commercial Code that changes such definition. If any
term in this Agreement shall be held to be illegal or unenforceable, the
remaining portions of this Agreement shall not be affected, and this Agreement
shall be construed and enforced as if this Agreement did not contain the term
held to be illegal or unenforceable. The Borrower hereby irrevocably submits to
the jurisdiction of the Minnesota District Court, Fourth District, and the
Federal District Court, District of Minnesota, Fourth Division, over any action
or proceeding arising out of or relating to this Agreement and agrees that all
claims in respect of such action or proceeding may be heard and determined in
any such court.
C-22
Section 7.7. Binding Effect; Assignment. All Loan Documents shall be
binding upon and inure to the benefit of the Loan Parties and the Bank and their
respective successors and assigns. No Loan Party shall have the right to assign
its rights or interest under any such agreement without the prior written
consent of the Bank.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers as of the date first above written.
LifeCore Biomedical, Inc.
By /s/ Xxxxxx X. Xxxxxxxxx
------------------------------------------
Its Exec. Vice President and CFO
-------------------------------------
M&I Xxxxxxxx and Ilsley Bank
By /s/ Xxxxx Xxxxxxx
------------------------------------------
Its Senior Vice President
-------------------------------------
By /s/ Xxxxxx Droemueller
------------------------------------------
Its Vice President
-------------------------------------
C-23
EXHIBIT 10.1
SECURITY AGREEMENT
DATED: December 18, 2002
DEBTOR: SECURED PARTY:
LifeCore Biomedical, Inc. M&I Xxxxxxxx and Xxxxxx Bank
0000 Xxxxx Xxxxxxxxx 000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000-0000
State of Formation: Minnesota
State Organizational No.: 1J-75
1. Security Interest and Collateral. To secure the payment and
performance of each and every debt, liability and obligation of every type and
description that Debtor may now or at any time hereafter owe to Secured Party
under the Credit Agreement (as defined herein), including the Debtor's
obligation on any promissory note or notes under the Credit Agreement and any
note or notes hereafter issued in substitution or replacement thereof (whether
such debt, liability or obligation now exists or is hereafter created or
incurred, and whether it is or may be direct or indirect, due or to become due,
absolute or contingent, primary or secondary, liquidated or unliquidated, or
joint, several or joint and several; all such debts, liabilities and obligations
collectively referred to as the "Obligations"), Debtor hereby grants Secured
Party a security interest (the "Security Interest") in the following property
(the "Collateral"):
(a) INVENTORY:
All inventory of Debtor, whether now owned or hereafter
acquired and wherever located;
(b) EQUIPMENT:
All equipment of Debtor, whether now owned or hereafter
acquired, including but not limited to all present and future
machinery, vehicles, furniture, fixtures,
manufacturing equipment, shop equipment, office and recordkeeping
equipment, parts and tools, and the goods described in any equipment
schedule or list herewith or hereafter furnished to Secured Party by
Debtor (but no such schedule or list need be furnished in order for the
security interest granted herein to be valid as to all of Debtor's
equipment); provided that no Security Interest is granted in equipment
to the extent that doing so would cause a default under any equipment
lease or other purchase money financing;
(c) ACCOUNTS AND OTHER RIGHTS TO PAYMENT:
Each and every right of Debtor to the payment of money,
whether such right to payment now exists or hereafter arises, whether
such right to payment arises out of a sale, lease or other disposition
of goods or other property by Debtor, out of a rendering of services by
Debtor, out of a loan by Debtor, out of the overpayment of taxes or
other liabilities of Debtor, or otherwise arises under any contract or
agreement, whether such right to payment is or is not already earned by
performance, and howsoever such right to payment may be evidenced,
together with all other rights and interests (including all liens and
security interests) that Debtor may at any time have by law or
agreement against any account debtor or other obligor obligated to make
any such payment or against any of the property of such account debtor
or other obligor; all including but not limited to all present and
future payment intangibles, debt instruments, chattel papers, accounts,
loans and obligations receivable and tax refunds;
(d) INTANGIBLES:
All intangibles of Debtor, whether now owned or hereafter
acquired, including but not limited to, general intangibles, investment
property, software, applications for patents, patents, copyrights,
trademarks, trade secrets, goodwill, tradenames, customers lists,
2
permits and franchises, internet domain names, uniform resource
locators (URL's),
website contracts and registration rights and the right to use Debtor's
name; together with all substitutions and replacements for and products of any
of the foregoing property and together with proceeds of any and all of the
foregoing property and, in the case of all tangible Collateral, together with
all accessions and together with (i) all accessories, attachments, parts,
equipment and repairs now or hereafter attached or affixed to or used in
connection with any such goods, and (ii) all warehouse receipts, bills of lading
and other documents of title now or hereafter covering such goods.
2. Representations, Warranties and Agreements. Debtor represents,
warrants and agrees that:
(a) Debtor is a corporation.
(b) The Collateral will be used primarily for business
purposes.
(c) Debtor's chief executive office is located at the address
of Debtor shown at the beginning of this Agreement.
3. Additional Representations, Warranties and Agreements. Debtor
represents, warrants and agrees that:
(a) Debtor has (or will have at the time Debtor acquires
rights in Collateral hereafter arising) absolute title to each item of
Collateral free and clear of all security interests, liens and
encumbrances, except the Security Interest and Permitted Liens (as
defined in the Credit Agreement), and will defend the Collateral
against all claims or demands of all persons other than Secured Party.
Any such security interests, liens or encumbrances not permitted under
this Agreement shall be void. Debtor will not sell or otherwise dispose
of the Collateral or any interest therein without the prior written
3
consent of Secured Party, except that, until the occurrence of an Event
of Default and the revocation by Secured Party of Debtor's right to do
so, Debtor may (i) sell any inventory constituting Collateral to buyers
in the ordinary course of business; (ii) dispose of used, worn-out or
surplus equipment in the ordinary course of business; and (iii) sell
equipment to the extent that such equipment is exchanged for credit
against the purchase price of similar replacement equipment, or the
proceeds of such sale are applied with reasonable promptness to the
purchase price of such replacement equipment. This Agreement has been
duly and validly authorized by all necessary corporate action.
(b) Debtor will not permit any tangible Collateral to be
located in any state (and, if county filing is required, in any county)
in which a financing statement covering such Collateral is required to
be, but has not in fact been, filed in order to perfect the Security
Interest.
(c) Each right to payment and each instrument, document,
chattel paper and other agreement constituting or evidencing Collateral
is (or will be when arising or issued) the valid, genuine and legally
enforceable obligation, subject to no defense, set-off or counterclaim
(other than those arising in the ordinary course of business) of the
account debtor or other obligor named therein or in Debtor's records
pertaining thereto as being obligated to pay such obligation. Debtor
will neither agree to any material modification or amendment nor agree
to any cancellation of any material obligation without Secured Party's
prior written consent, and will not subordinate any material right to
claims of other creditors of such account debtor or other obligor.
(d) Debtor will:
4
(i) keep all tangible Collateral in good repair,
working order and condition, normal
depreciation excepted, and, exercising
reasonable business judgment, will, from
time to time, replace any worn, broken or
defective parts thereof;
(ii) promptly pay all taxes and other
governmental charges levied or assessed upon
or against any Collateral or upon or against
the creation, perfection or continuance of
the Security Interest except as Debtor shall
contest in good faith and by appropriate
proceedings providing such reserves as are
required by generally accepted accounting
principles;
(iii) keep all Collateral free and clear of all
security interests, liens and encumbrances
except the Security Interest and Permitted
Liens;
(iv) at all reasonable times, permit Secured
Party or its representatives to examine or
inspect any Collateral, wherever located,
and to examine, inspect and copy Debtor's
books and records pertaining to the
Collateral and its business and financial
condition and, upon the occurrence and
during the continuance of an Event of
Default, to send and discuss with account
debtors and other obligors requests for
verifications of amounts owed to Debtor;
(v) keep accurate and complete records
pertaining to the Collateral and pertaining
to Debtor's business and financial condition
and submit to Secured Party such periodic
reports concerning the Collateral and
Debtor's business and financial condition as
Secured Party may from time to time
reasonably request;
(vi) promptly notify Secured Party of any loss of
or material damage to any Collateral or of
any adverse change, known to Debtor, in the
prospect of payment of any sums due on or
under any instrument, chattel paper, or
account constituting Collateral;
(vii) if Secured Party at any time so requests
(whether the request is made before or after
the occurrence of an Event of Default),
promptly deliver to Secured Party any
instrument, document or chattel paper
constituting Collateral, duly endorsed or
assigned by Debtor;
(viii) at all times keep all tangible Collateral
insured against risks of fire (including
so-called extended coverage), theft,
collision (in case of Collateral consisting
of motor vehicles) and such other risks as
provided in the Credit Agreement;
5
(ix) from time to time authorize such financing
statements as Secured Party may reasonably
require in order to perfect the Security
Interest and, if any Collateral consists of
an asset subject to a certificate of title,
execute such documents as may be required to
have the Security Interest properly noted on
a certificate of title;
(x) pay when due or reimburse Secured Party on
demand for all costs of collection of any of
the Obligations and all other out-of-pocket
expenses (including in each case all
reasonable attorneys' fees) incurred by
Secured Party in connection with the
creation, perfection, satisfaction,
protection, defense or enforcement of the
Security Interest or the creation,
continuance, protection, defense or
enforcement of this Agreement or any or all
of the Obligations, including expenses
incurred in any litigation or bankruptcy or
insolvency proceedings;
(xi) execute, deliver or endorse any and all
instruments, documents, assignments,
security agreements and other agreements and
writings that Secured Party may at any time
reasonably request in order to secure,
protect, perfect or enforce the Security
Interest and Secured Party's rights under
this Agreement;
(xii) not use or keep any Collateral, or permit it
to be used or kept, for any unlawful purpose
or in violation of any federal, state or
local law, statute or ordinance;
(xiii) not permit any tangible Collateral to become
part of or to be affixed to any real
property without first assuring to the
reasonable satisfaction of Secured Party
that the Security Interest will be prior and
senior to any interest, or lien then held or
thereafter acquired by any mortgagee of such
real property or the owner or purchaser of
any interest therein; and
(xiv) inform Secured Party of any change to
Debtor's name, address or state of formation
prior to the effective date of such change
and authorize and deliver to Secured Party
any financing statement that is necessary as
a result of that change to maintain the
perfected status of the Security Interest.
If Debtor at any time fails to perform or observe any agreement
contained in this Section 3(d), and if such failure shall continue for
a period of ten calendar days after Secured Party gives Debtor written
notice thereof (or, in the case of the agreements contained in
6
clauses (viii) and (ix) of this Section 3(d), immediately upon the
occurrence of such failure, without notice or lapse of time), Secured
Party may (but need not) perform or observe such agreement on behalf
and in the name, place and stead of Debtor (or, at Secured Party's
option, in Secured Party's own name) and may (but need not) take any
and all other actions that Secured Party may reasonably deem necessary
to cure or correct such failure (including, without limitation, the
payment of taxes, the satisfaction of security interests, liens, or
encumbrances, the performance of obligations under contracts or
agreements with account debtors or other obligors, the procurement and
maintenance of insurance, the execution of financing statements, the
endorsement of instruments, and the procurement of repairs,
transportation or insurance); and, except to the extent that the effect
of such payment would be to render any loan or forbearance of money
usurious or otherwise illegal under any applicable law, Debtor shall
thereupon pay Secured Party on demand the amount of all moneys expended
and all costs and expenses (including reasonable attorneys' fees)
incurred by Secured Party in connection with or as a result of Secured
Party's performing or observing such agreements or taking such actions,
together with interest thereon from the date expended or incurred by
Secured Party at the highest rate then applicable to any of the
Obligations. To facilitate the performance or observance by Secured
Party of such agreements of Debtor, upon the occurrence and during the
continuance of an Event of Default, Debtor hereby irrevocably appoints
(which appointment is coupled with an interest) Secured Party, or its
delegate, as the attorney-in-fact of Debtor with the right (but not the
duty) from time to time to create, prepare, complete, execute, deliver,
endorse or file, in the name and on behalf of Debtor, any and all
instruments, documents, financing statements, termination statements
for filings not
7
permitted under this Agreement held by other secured parties,
applications for insurance and other agreements and writings required
to be obtained, executed, delivered or endorsed by Debtor under this
Section 3 and Section 4.
4. Lock Box, Collateral Account. If Secured Party so requests at any
time after the occurrence and during the continuance of an Event of Default,
Debtor will direct each of its account debtors to make payments due under the
relevant account or chattel paper directly to a special lockbox to be under the
control of Secured Party. Debtor hereby authorizes and directs Secured Party to
deposit into a special collateral account to be established and maintained with
Secured Party all checks, drafts and cash payments, received in such lockbox.
All deposits in such collateral account shall constitute proceeds of Collateral
and shall not constitute payment of any Obligations. At its option, Secured
Party may at any time, apply finally collected funds on deposit in such
collateral account to the payment of the Obligations in such order of
application as Secured Party may determine, or permit Debtor to withdraw all or
any part of the balance on deposit in such collateral account. If a collateral
account is so established, Debtor agrees that it will promptly deliver to
Secured Party, for deposit into such collateral account all payments on accounts
and chattel paper received by it. All such payments shall be delivered to
Secured Party in the form received (except for Debtor's endorsement where
necessary). Until so deposited, all payments on accounts and chattel paper
received by Debtor shall be held in trust by Debtor for and as the property of
Secured Party and shall not be commingled with any funds or property of Debtor.
5. Account Verification and Collection Rights of Secured Party. Secured
Party shall have the right to verify any accounts in the name of Debtor or in
its own name as provided herein; and Debtor, whenever requested, shall furnish
Secured Party with duplicate statements of
8
the accounts, which statements may be mailed or delivered by Secured Party for
that purpose, provided that such verification occurs only in writing and on a
"blind" basis. Notwithstanding Secured Party's rights under Section 4 with
respect to any and all debt instruments, chattel papers, accounts, and other
rights to payment constituting Collateral (including proceeds), Secured Party
may at any time after the occurrence and during the continuation of an Event of
Default, notify any account debtor, or any other person obligated to pay any
amount due, that such chattel paper, account, or other right to payment has been
assigned or transferred to Secured Party for security and shall be paid directly
to Secured Party. If Secured Party so requests at any such time, Debtor will so
notify such account debtors and other obligors in writing and will indicate on
all invoices to such account debtors or other obligors that the amount due is
payable directly to Secured Party. At any time after Secured Party or Debtor
gives such notice to an account debtor or other obligor, Secured Party may (but
need not), in its own name or in Debtor's name, demand, xxx for, collect or
receive any money or property at any time payable or receivable on account of,
or securing, any such chattel paper, account, or other right to payment, or
grant any extension to, make any compromise or settlement with or otherwise
agree to waive, modify, amend or change the obligations (including collateral
obligations) of any such account debtor or other obligor.
6. Assignment of Insurance. Debtor hereby assigns to Secured Party, as
additional security for the payment of the Obligations, any and all moneys
(including but not limited to proceeds of insurance and refunds of unearned
premiums) due or to become due under and all other rights of Debtor under or
with respect to, any and all policies of insurance covering the Collateral, and
Debtor hereby directs the issuer of any such policy to pay any such moneys
directly to Secured Party. Both before and after the occurrence of an Event of
Default, Secured
9
Party may (but need not), in its own name or in Debtor's name, execute and
deliver proofs of claim, receive all such moneys, endorse checks and other
instruments representing payment of such moneys, and adjust, litigate,
compromise or release any claim against the issuer of such policy.
Notwithstanding any of the foregoing, so long as no Event of Default exists, the
Debtor shall be entitled to all insurance proceeds with respect to equipment or
inventory included in Collateral provided that such proceeds are applied to the
cost of replacement equipment or inventory to be included in Collateral.
7. Events of Default. An Event of Default under the Revolving Credit
Agreement (the "Credit Agreement") between Debtor and Secured Party dated as of
the date hereof shall be an Event of Default hereunder.
8. Remedies upon Event of Default. Upon the occurrence of an Event of
Default under Section 7 and at any time thereafter, Secured Party may exercise
any one or more of the following rights and remedies: (i) declare all unmatured
Obligations to be immediately due and payable, and the same shall thereupon be
immediately due and payable, without presentment of other notice or demand; (ii)
exercise and enforce any or all rights and remedies available upon default to a
secured party under the Uniform Commercial Code, including but not limited to
the right to take possession of any Collateral, proceeding without judicial
process or by judicial process (without a prior hearing or notice thereof, which
Debtor hereby expressly waives), and the right to sell, lease or otherwise
dispose of any or all of the Collateral, and in connection therewith, Secured
Party may require Debtor to make the Collateral available to Secured Party at a
place to be designated by Secured Party that is reasonably convenient to both
parties, and if notice to Debtor of any intended disposition of Collateral or
any other intended action is required by law in a particular instance, such
notice shall be deemed commercially reasonable if given (in
10
the manner specified in Section 10) at least 10 calendar days prior to the date
of intended disposition or other action; (iii) exercise or enforce any or all
other rights or remedies available to Secured Party by law or agreement against
the Collateral, against Debtor or against any other person or property. Upon the
occurrence and during the continuance of an Event of Default, Secured Party is
hereby granted a nonexclusive, worldwide and royalty-free license to use or
otherwise exploit all trademarks, trade secrets, franchises, copyrights and
patents of Debtor that Secured Party deems necessary or appropriate to the
disposition of any Collateral.
9. Other Personal Property. Unless at the time Secured Party takes
possession of any tangible Collateral, or within seven days thereafter, Debtor
gives written notice to Secured Party of the existence of any goods, papers or
other property of Debtor, not affixed to or constituting a part of such
Collateral, but that are located or found upon or within such Collateral,
describing such property, Secured Party shall not be responsible or liable to
Debtor for any action taken or omitted by or on behalf of Secured Party with
respect to such property without actual knowledge of the existence of any such
property or without actual knowledge that it was located or to be found upon or
within such Collateral.
10. Miscellaneous. This Agreement does not contemplate a sale of
accounts, payment intangibles or chattel paper. This Agreement can be waived,
modified, amended, terminated or discharged and the Security Interest can be
released, only explicitly in a writing signed by Secured Party; provided,
however, that upon payment in full of the Obligations and the expiration of any
obligation of the Secured Party to extend credit accommodations to the Debtor,
the Security Interest granted hereby shall terminate. Upon any such termination,
the Secured Party will return to the Debtor such of the Collateral then in the
possession of the Secured Party as shall not have been sold or otherwise applied
pursuant to the terms hereof and execute and
11
deliver to the Debtor such documents as the Debtor shall reasonably request to
evidence such termination. A waiver signed by Secured Party shall be effective
only in a specific instance and for the specific purpose given. Mere delay or
failure to act shall not preclude the exercise or enforcement of any of Secured
Party's rights or remedies. All rights and remedies of Secured Party shall be
cumulative and may be exercised singularly or concurrently, at Secured Party's
option, and the exercise or enforcement of any one such right or remedy shall
neither be a condition to nor bar the exercise or enforcement of any other. All
notices to be given to Debtor shall be deemed sufficiently given if delivered or
mailed by registered or certified mail, postage prepaid, to Debtor at its
address set forth above or at the most recent address shown on Secured Party's
records. Secured Party's duty of care with respect to Collateral in its
possession (as imposed by law) shall be deemed fulfilled if Secured Party
exercises reasonable care in physically safekeeping such Collateral or, in the
case of Collateral in the custody or possession of a bailee or other third
person, exercises reasonable care in the selection of the bailee or other third
person, and Secured Party need not otherwise preserve, protect, insure or care
for any Collateral. Secured Party shall not be obligated to preserve any rights
Debtor may have against prior parties, to realize on the Collateral at all or in
any particular manner or order, or to apply any cash proceeds of Collateral in
any particular order of application and Secured Party may disclaim any and all
implied warranties (as imposed by law) in connection with the disposition of
Collateral. This Agreement shall be binding upon and inure to the benefit of
Debtor and Secured Party and their respective heirs, representatives, successors
and assigns and shall take effect when signed by Debtor and delivered to Secured
Party, and Debtor waives notice of Secured Party's acceptance hereof. Secured
Party may execute this Agreement if appropriate for the purpose of filing, but
the failure of Secured Party to execute this Agreement shall not affect or
impair the
12
validity or effectiveness of this Agreement. A carbon, photographic or other
reproduction of this Agreement or of any financing statement signed by Debtor
shall have the same force and effects as the original for all purposes of a
financing statement. This Agreement shall be governed by the internal laws of
the State of Minnesota. If any provision or application of this Agreement is
held unlawful or unenforceable in any respect, such illegality or
unenforceability shall not affect other provisions or applications that can be
given effect and this Agreement shall be construed as if the unlawful or
unenforceable provision or application had never been contained herein or
prescribed hereby. All representations and warranties contained in this
Agreement shall survive the execution, delivery and performance of this
Agreement and the creation and payment of the Obligations. Debtor hereby
irrevocably submits to the jurisdiction of the Minnesota District Court, Fourth
District, and the Federal District Court, District of Minnesota, Fourth
Division, over any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of such action or proceeding may
be heard and determined in any such court.
M&I Xxxxxxxx and Xxxxxx Bank LifeCore Biomedical, Inc.
By /s/ Xxxxx Xxxxxxx By /s/ Xxxxxx X. Xxxxxxxxx
------------------------------ ---------------------------------------
Its Senior Vice President Its Exec. Vice President and CFO
------------------------------- -----------------------------------
By /s/ Xxxxxx Xxxxxxxxxxxxx
---------------------------------
Its Vice President
----------------------
13
