Exhibit 10.9
SECOND PROMISSORY NOTE EXTENSION AGREEMENT AND
AMENDMENT TO LOAN AND SECURITY AGREEMENT
THIS SECOND PROMISSORY NOTE EXTENSION AGREEMENT AND AMENDMENT TO LOAN
AND SECURITY AGREEMENT (this "Amendment") is made effective the 31st day of
October, 2006, by and among XXXXXXX FOODS, INC., an Oklahoma corporation
("Borrower"), XXXX X. XXXXXXX, an individual, and XXXXXX X. XXXXXX, XX., an
individual (collectively, the "Guarantors"), and BANK OF THE WEST, a California
banking corporation, successor by merger to Commercial Federal Bank, a Federal
Savings Bank (the "lender").
W I T N E S S E T H :
WHEREAS, Borrower, Guarantors and Lender entered into a Loan and
Security Agreement dated June 29, 2005 (the "Loan Agreement"), pursuant to which
Borrower executed its Promissory Note (Revolving) - Adjustable Interest Rate in
the principal amount of $4,000,000.00 (the "Note") and Guarantors executed their
Unconditional Guaranties of Payment (the "Guaranties"), all of even date with
the Loan Agreement (together with additional loan documents executed in
connection therewith, the "Original Loan Documents");
WHEREAS, Borrower, Guarantors and Lender entered into a Promissory Note
Extension Agreement dated effective as June 25, 2006 pursuant to which the Due
Date of the Note was extended from June 28, 2006 to October 31, 2006 (the "First
Amendment"); and
WHEREAS, Borrower and Guarantors have requested that the Due Date of the
Note be further extended to April 30, 2007, and Lender has agreed to such
requests upon the terms and conditions set forth in this Amendment for the
further amendment of the Original Loan Documents as amended by the First
Amendment (as amended, the "Loan Documents").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, Borrower, Guarantors and Lender agree as follows:
1. EXTENSION OF DUE DATE AND LOAN TERMINATION DATE. The Due Date,
as defined in the Note, and the Loan Termination Date, as defined in the Loan
Agreement, are extended and amended to April 30, 2007.
2. LOAN COMMITMENT; TERMINATION OF REVOLVING FEATURE. The Loan
Commitment, as defined in the Loan Agreement, is hereby reduced and amended to
$2,276,577.75. Borrower's right to borrow and re-borrow principal under the Note
as a revolving loan obligation is terminated, it being agreed that any principal
repaid on the Note shall not be available for readvancement by Lender to
Borrower.
3. INTEREST RATE AND PAYMENTS. The interest rate provisions of the
Loan Documents are amended to provide that the rate of interest prior to the
occurrence of an Event of Default under the Note shall be (i) prior to December
21, 2006, the sum of the Index plus three quarters of one percent (0.75%),
and (11) effective December 21, 2006, the sum of the Index plus two percent
(2%). Interest shall continue to be due and payable on the 28th day of each
month commencing November 28, 2006.
4. EXTENSION FEES. In consideration of the agreements of Lender set
forth in this Amendment, Borrower agrees to pay to Lender a fee of one percent
(1%) of the principal amount of the amended Loan Commitment, or $27,265.77, upon
its execution and delivery of this Amendment, and an additional fee of two
percent (2%) of the amended Loan Commitment, or $54,531.54, on the earlier to
occur of the Due Date under the Note or the date of closing on Borrower's
initial public offering described in SECTION 6.2.2 of this Amendment, all such
extension fees being earned as of the closing on this Amendment.
5. BORROWING BASE. The "Borrowing Base" provisions set forth in
paragraph 5 of Section I of the Loan Agreement and elsewhere in the Loan
Documents are hereby deleted in their entirety and of no further force or
effect.
6. ADDITIONAL AFFIRMATIVE COVENANTS. As additional affirmative
covenants of Borrower pursuant to Section VI of the Loan Agreement, Borrower
agrees to the following:
6.1 MONTHLY ACCOUNTS VALUATIONS. Borrower shall provide a
calculation of eighty percent (80%) of Eligible Accounts of Borrower,
less potential offsets for accounts to vendors under the Perishable
Agricultural Commodities Act (PACA), as of November 30, 2006 to Lender
together with such supporting documentation as Lender shall require (the
"Initial Accounts Valuation"), all certified by an officer of Borrower
as complete and accurate. Borrower will continue to prepare and provide
such certified calculations and supporting documentation to Lender on a
monthly basis by the tenth (10th) day of the month immediately following
the month for which such calculations are provided (the "Monthly
Accounts Valuation"). Borrower agrees to maintain the Monthly Accounts
Valuation at no less than ninety percent (90%) of the Initial Accounts
Valuation. In the event of the failure to comply with such covenant, an
Event of Default shall exist under the Loan Agreement and Note and
Borrower shall not be entitled to any opportunity to cure such Event of
Default.
6.2 ADDITIONAL REPORTS. By not later than 5:00 p.m. Omaha,
Nebraska time on Monday of each week, Borrower shall provide to Lender
the following:
6.2.1 ROLLING CASH FLOW UPDATES. A sixteen (16) week
rolling cash flow update for the immediately preceding week and
access to such other financial information as Lender may
request, all certified by an officer of Borrower as complete and
accurate and to contain an explanation of any material
differences between actual results and previous projections, and
any material changes made in new projections; and
6.2.2 IPO UPDATES. A weekly status report from
Borrower's investment banker or other qualified representative
of Borrower on the progress being made toward closing on
Borrower's initial public offering.
Failure to timely comply with either of the reporting requirement in
this SECTION 6.2 shall be an Event of Default under the Loan Agreement
and Note.
7. CONDITIONS PRECEDENT. The provision to Lender of a satisfactory
certified calculation of the Initial Accounts Valuation pursuant to SECTION 6.1
and a satisfactory initial IPO update pursuant to SECTION 6.2.2 shall be
conditions precedent to the effectiveness of this Amendment.
8. DEFINITIONS. Except as specifically defined in this Amendment,
capitalized terms used in this Amendment shall have the same meanings ascribed
to them in the Loan Agreement prior to this Amendment.
9. RELEASE. In consideration of the agreements of Lender set forth
in or contemplated by this Amendment, Borrower and Guarantors hereby release and
forever discharge Lender, Lender's agents, servants, employees, officers,
attorneys, successors and assigns (collectively, the "Released Parties") from
all damage, loss, claims, demands, liabilities, obligations, actions and causes
of action whatsoever which Borrower and Guarantors might now have or claim to
have against the Released Parties, whether presently known or unknown, and of
every nature and extent whatsoever on account of or in any way concerning,
arising out of or founded on the Loan Documents, this Amendment or the Loan,
including, without implied limitation, all such loss or damage of any kind
heretofore sustained or that might arise as a consequence of the dealings
between the parties based on a theory of "lender liability," bad faith, breach
of contract, laches or estoppel, or any theory similar to any of the foregoing
based on or resulting from any action or inaction of Lender either directly or
indirectly, actively or passively, in connection with the Loans or other
dealings among the parties. This release will not extend to any claim arising
after the date of this Amendment to the extent such claim is based on acts or
omissions of Lender occurring after the date of this Amendment except that such
release is specifically intended by the parties to include the transactions
contemplated by this Amendment.
10. REAFFIRMATION OF OBLIGATIONS AND LIENS. Borrower and Guarantors
reaffirm their obligations under the Loan Documents, agree that the principal
amount outstanding under the Note is $2,276,577.75, agree to waive any and all
defenses and setoff against Lender in respect to the collection of the
obligations evidenced by the Loan Documents and this Amendment, and agree that
any security interest, mortgage, assignment, pledge, lien or other encumbrance
given to secure such obligations shall continue uninterrupted and remain in full
force and effect.
11. EFFECT OF AMENDMENT. To the extent that terms of this Amendment
are inconsistent with the terms of the Loan Documents, this Amendment shall
control and the Loan Documents shall be amended, modified or supplemented so as
to give full effect to the transaction contemplated by this Amendment.
12. COUNTERPARTS; FACSIMILE SIGNATURES. This Amendment may be
executed in one or more counterparts, each of which shall, for all purposes of
this Amendment, be deemed an original, but all of which shall constitute one and
the same agreement. A signature of any party to this Amendment may be
transmitted by facsimile and such signature shall be deemed to be, and to have
the legal effect of, an original signature.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and accepted the day and year first above written.
"BORROWER": XXXXXXX FOODS, INC., an Oklahoma
corporation
By:
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Xxxx X. Xxxxxxx, President
"GUARANTORS":
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Xxxx X. Xxxxxxx, an individual
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Xxxxxx X. Xxxxxx, Xx., an individual
"LENDER": BANK OF THE WEST, a California banking
corporation
By:
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Name:
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Title:
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