SECOND AMENDMENT TOAMENDED AND RESTATED LOAN
AND SECURITYAGREEMENT, WAIVER, CONSENT AND RELEASE
SECONDAMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, WAIVER, CONSENT ANDRELEASE, dated as of February 22, 2005 (the Amendment), to the Amended andRestated Loan and Security Agreement, dated as of November 16, 2004, as amended by theFirst Amendment, dated as of December 22, 2004 (as the same now exists or may hereafter beamended, modified, supplemented, extended, renewed, restated or replaced, the LoanAgreement), between and among, on the one hand, Wells Fargo Foothill, Inc., aCalifornia corporation (WFF), and Ableco Finance, LLC, a Delaware limitedliability company (Ableco), and the other lenders identified on the signaturepages thereto (such lenders, together with their respective successors and assigns, eachindividually a Lender and collectively, the Lenders), WFF, as theadministrative agent for the Lenders (in such capacity, the AdministrativeAgent), Ableco, as the collateral agent for the Lenders (in such capacity, theCollateral Agent and together with the Administrative Agent, each anAgent and collectively, the Agents) and, on the other hand,Northland Cranberries, Inc., a Wisconsin corporation (Borrower), and theguarantors party thereto from time to time. Capitalized terms used herein but notspecifically defined herein shall have the meanings ascribed to them in the LoanAgreement.
WHEREAS,Borrower and NCI Foods LLC (NCI), a wholly owned subsidiary of the Borrowerand a guarantor under the Loan Agreement, have advised the Agents and the Lenders that,pursuant to the Asset Purchase Agreement, dated as of the date hereof (the NorthlandPurchase Agreement), by and between Apple & Eve, LLC, a Delaware limitedliability company, as buyer (the Buyer), and the Borrower and NCI, as sellers,a copy of which is attached hereto as Exhibit A, (i) Borrower desires to sell certain ofits assets as set forth on Exhibit B hereto (the Northland Purchased Assets)and assign certain of its liabilities to the Buyer and (ii) NCI desires to sell certain ofits assets as set forth as Exhibit C hereto (the NCI Purchased Assets) to theBuyer (such transaction, the Northland Asset Sale);
WHEREAS,Borrower and NCI have each requested (i) that the Lenders consent to the sale of theNorthland Purchased Assets and the NCI Purchased Assets, (ii) that Collateral Agentrelease the security interests that it holds for the benefit of the Lenders pursuant tothe Loan Agreement in the Northland Purchased Assets and the NCI Purchased Assets, and(iii) that the Lenders waive any Event of Default that may occur under the Loan Agreementas a result of the consummation of the Northland Asset Sale;
WHEREAS,Borrower has advised the Agents and the Lenders that Borrower desires to sell cranberryconcentrate (the Purchased Concentrate) pursuant to the Concentrate Sale andSupply Agreement (the Concentrate Agreement), dated as of the date hereof, byand between the Buyer, as purchaser, and the Borrower, as supplier, a copy of which isattached hereto as Exhibit D (the Concentrate Sale);
WHEREAS,Borrower has requested (i) that the Lenders consent to the sale of the PurchasedConcentrate, (ii) that Collateral Agent release the security interests that it holds forthe benefit of the Lenders pursuant to the Loan Agreement in the Purchased Concentrate,and (iii) that the Lenders waive any Event of Default that may occur under the LoanAgreement as a result of the consummation of the Purchased Concentrate Agreement;
WHEREAS,WFF has advised the other Lenders and the Borrower that it desires to terminate its TotalCommitment under the Loan Agreement;
WHEREAS,the Lenders and the Borrower desire to set forth the application of proceeds that Borrowerand NCI shall receive from the sale of the Northland Purchased Assets, the NCI PurchasedAssets and the Purchased Concentrate;
WHEREAS,WFF in its capacity as the Administrative Agent has advised the Collateral Agent, Lendersand Borrower that it desires to resign as Administrative Agent;
WHEREAS,Ableco has advised the Administrative Agent, the Lenders and Borrower that it will acceptappointment as successor to WFF as Administrative Agent;
Inconsideration of the foregoing and for other good and valuable consideration, the receiptand sufficiency of which are hereby acknowledged by the parties hereto, the parties heretohereby agree as follows:
SECTION1 Amendments to Loan Agreement.
1.1 Section 1.1 of the Loan Agreement is hereby amended by deleting the definitions of eachof the following terms: Maximum Credit Line, Maximum Revolver A Amount,and Maximum Revolver B Amount and replacing each such definition to read inits entirety, respectively, as follows:
MaximumCredit Line means the amount set forth as the Total Commitment for all Lenderson Schedule C-1.
MaximumRevolver A Amount means the amount set forth as the Revolver A Commitment forall Lenders on Schedule C-1, which is zero.
MaximumRevolver B Amount means the amount set forth as the Revolver B Commitment forall Lenders on Schedule C-1.
1.2 Section 1.1 of the Loan Agreement is hereby amended by inserting the definition of theterms: Fixed Charges and Fixed Charge Coverage Ratio in theircorrect alphabetical position to read as follows:
|FixedCharges means with respect to Borrower and its Subsidiaries for any period, thesum, without duplication, of (a) cash Interest Expense, (b) principal payments requiredto be paid during such period in respect of Indebtedness, and (c) all federal, state, andlocal income taxes actually paid in cash during such period.|
|FixedCharge Coverage Ratio means, with respect to Borrower and its Subsidiaries forany period, the ratio of (i) EBITDA for such period minus unfinanced capitalexpenditures made (to the extent not already incurred in a prior period) or incurredduring such period, to (ii) Fixed Charges for such period.|
1.3 Section 3.4 Term of the Loan Agreement is hereby amended by deleting the firstsentence thereof in its entirety and replacing such sentence with the following:
|ThisAgreement shall become effective upon the execution and delivery hereof by Borrower,Agents, and the Lenders and shall continue in full force and effect for a term ending onOctober 31, 2005 (the Maturity Date).|
1.4 Section 7.20 Financial Covenants of the Loan Agreement is hereby amended bydeleting clauses subsections (a) and (b) thereof and replacing such subsections with thefollowing:”
|(a) FixedCharge Coverage Ratio. Fail to maintain or achieve a Fixed Charge Coverage Ratio, measured on a month-end basis, of at least the applicableratio set forth in the following table for the cumulative periodcommencing on March 1, 2005 and ending on the date set forth oppositethereto:|
|1.2 to 1.0
1.2 to 1.0
1.2 to 1.0
1.2 to 1.0
1.2 to 1.0
1.2 to 1.0
1.2 to 1.0
1.2 to 1.0
| March 31, 2005
April 30, 2005
May 31, 2005
June 30, 2005
July 31, 2005
August 31, 2005
September 30, 2005
October 31, 2005
1.5 On the Amendment Effective Date, no Letters of Credit are outstanding and the Letter ofCredit Usage is zero. On and after the Amendment Effective Date, the Borrower shall notbe entitled to request a Letter of Credit and no Lender or Agent shall have theobligation to arrange for or issue a Letter of Credit.
1.6 Schedule C-1 of the Loan Agreement is hereby amended by deleting such schedule in itentirety and replacing such schedule with the revised Schedule C-1 to Loan Agreement, acopy of which is attached hereto as Exhibit E.
SECTION2 Consent and Waiver.
(a) Notwithstanding anything else to the contrary in the Loan Agreement or any other LoanDocument, pursuant to the requests by the Borrower and by NCI, but subject tosatisfaction of the conditions set forth in subsection (b) below and in Section 9 hereof,and in reliance upon the representations and warranties of the Borrower and theGuarantors set forth herein and in the Loan Agreement, the Required Revolver A Lendersand the Required Lenders hereby consent to the Northland Asset Sale and the ConcentrateSale (collectively, the Asset Sales) and waive any Event of Default thatwould otherwise arise under Section 8.2(c) of the Loan Agreement as a result of a breachof Sections 5.11, 7.3(c), 7.4 and 8.3 of the Loan Agreement, by reason of the AssetSales.
(b) The consent and waiver set forth in subsection (a) above are conditioned upon the effectiveness of the Amendment pursuant to Section 9 and the following conditions related to the Northland Asset Sale:
|(i) theAsset Sales shall have been consummated on the Amendment Effective Date;|
|(ii) theconsideration paid by Buyer to Borrower on the Closing Date in connection withthe Asset Sales shall be no less than an amount equal to the sum of (A) $8,500,000 (exclusive of $500,000 to be held in escrow for adjustments to be paid to Buyer) and (B) the Preliminary Adjustment (as defined in the Northland Purchase Agreement), if any, paid by Buyer to Borrower on the Closing Date;such amount (net of closing costs including broker fees, consulting fees,attorneys fees and taxes, the Net Sale Proceeds) shall in no eventbe less than $9,000,000 and shall be delivered directly to the AdministrativeAgent in cash or other immediately available funds; and|
|(iii) priorto or concurrently with the consummation of the Asset Sales, the Borrower shalldeliver to each Lender a true and correct copy of (A) the fully executed Northland Purchase Agreement, together with all schedules and exhibits thereto, (B) the fully executed Concentrate Agreement, together with all schedules and exhibits thereto and (C) the fully executed Transition Services Agreement (the Transition Services Agreement) dated the date hereof by and between the Borrower and Buyer, together with all schedules and exhibits thereto, each of (A), (B) and (C) shall be certified by an officer of the Borrower, and (D) each other material agreement, instrument or other documentto be executed and delivered in connection therewith.|
(c) Theconsents and waivers in this Section 2 shall be effective only in this specificinstance and for the specific purposes set forth herein and do not allow forany other or further departure from the terms and conditions of the LoanAgreement or any other Loan Documents, which terms and conditions shall remainin full force and effect. For the avoidance of doubt, the Excluded Assets (asdefined in the Northland Purchase Agreement) of the Borrower and NCI shall continue to be owned by Borrower and NCI, respectively, and subject to the security interest of the Collateral Agent for benefit of the Lenders in such Excluded Assets.
SECTION3 Termination and Release. Subject to the satisfaction of the conditions set forthin Section 2(b) hereof and in Section 9 hereof, the Lenders hereby agree as follows:
(a) uponthe consummation of the Asset Sales, in accordance with the Northland PurchaseAgreement and the Concentrate Agreement (collectively, the Sales Agreements), any and all Liens or other charges or encumbrances on, and all security interests in, the Northland Purchased Assets, the NCI Purchased Assets and the Purchased Concentrate (collectively, the Purchased Assets) in favor of Collateral Agent for the benefit of the Lenders or in favor of any Lender arising under the Loan Agreement and the other Loan Documents, but excluding any Liens or other charges or encumbrances on, and any security interests in the Excluded Assets in favor of Collateral Agent for the benefitof the Lenders or in favor of any Lender, are automatically released andterminated without any further action on the part of the Lenders;
(b) uponthe consummation of the Asset Sales in accordance with the Sales Agreements,the Collateral Agent and the Lenders authorize the Borrower and/or the Buyer tofile UCC-3 Financing Statement Amendments in the form of Exhibit F hereto,for the limited purpose of releasing the Lien of the Lenders on the PurchasedAssets (but not any Excluded Assets), but without representation, warranty orrecourse of any kind to the Agents or the Lenders and at the sole cost andexpense of the Borrower;
(c) uponthe consummation of the Northland Asset Sale in accordance with the NorthlandPurchase Agreement, the Collateral Agent and the Lenders authorize the Borrowerand/or the Buyer to file the releases of security interests in trademarks inthe form of Exhibit G hereto, for the limited purpose of releasing thesecurity interests of the Lenders on the Northland Purchased Assets consistingof trademark rights and the NCI Purchased Assets consisting of trademark rights(but not any Excluded Assets), but without representation, warranty or recourseof any kind to the Agents or the Lenders and at the sole cost and expense ofthe Borrower; and
(d) theLenders will, at the request of the Borrower or Buyer, authorize and/or executesuch additional instruments and other writings, and take such other actions asthe Borrower or Buyer may reasonably request to effect or evidence, to theextent set forth herein, the termination of the liens and other charges andencumbrances on, and security interests in, the Purchased Assets (but not anyExcluded Assets), but at the sole cost and expense of the Borrower or Buyer andwithout representation, warranty or recourse of any kind to the Agents or theLenders.
SECTION4 Application of Net Sale Proceeds and Reduction of Commitments. Notwithstandinganything to the contrary in the Loan Agreement (including, without limitation, Section2.4(d))or any other Loan Document, the Administrative Agent, the Collateral Agent, theRequired Revolver A Lenders, the Required Lenders and the Borrower and NCI hereby agreethat Borrower and NCI shall deliver, or cause to be delivered, to the AdministrativeAgent payment in cash or cash equivalents of the Net Sale Proceeds and the AdministrativeAgent shall apply such proceeds, for application as follows:
(a) first,to the outstanding principal amount of the A Advances until paid in full, together with the accrued and unpaid interest thereon and all costs, fees and charges of the Lenders with a Revolver A Commitment, and simultaneously therewith, the Revolver A Commitment of WFF shall be reduced to zero and terminated;
(b) second,to the outstanding costs, fees, charges and expenses of the AdministrativeAgent in connection with its duties as Administrative Agent;
(c) third,to outstanding principal amount of the B Advances until paid in full, togetherwith the accrued and unpaid interest thereon, and simultaneously therewith, theRevolver B Commitment of Ableco shall be reduced to $2,500,000; and
(d) fourth,to the outstanding principal amount of the Term Loan, until the outstandingprincipal amount of the Term Loan shall be equal to or less than $12,000,000,such payments to be applied to the scheduled amortization payments of the TermLoan in the order of maturity.
Theremainder, if any, of the Net Sale Proceeds may be retained by Borrower for workingcapital purposes.
SECTION5 Application of Final Adjustment to Purchase Price. Notwithstanding anything tothe contrary in the Loan Agreement (including, without limitation, Section 2.4(c)(iv))orany other Loan Document, on the earlier of the Settlement Date (as defined in theNorthland Purchase Agreement) or August 31, 2005, Borrower shall deliver, or cause to bedelivered, to the Administrative Agent payment in cash or cash equivalents of an amountequal to the sum of (A) $500,000 less any amount paid by Borrower to Buyer as a FinalAdjustment (as defined in the Northland Purchase Agreement) and (B) the amount, if any,paid by the Buyer to the Borrower as a Final Adjustment (as defined in the NorthlandPurchase Agreement), such payment to be applied to the outstanding principal amount ofthe Term Loan in the order of maturity.
SECTION6 Termination and Release of WFF as Lender.
(a) Upon the payment in full of the A Advances, together with the accrued and unpaid interestthereon pursuant to Section 4(a) hereof, (i)the financing arrangements as between WFF andBorrower pursuant to the Loan Agreement and the other Loan Documents are herebyterminated, canceled and of no further force and effect, except for those provisions ofthe Loan Documents which by their respective terms survive termination, and (ii) WFFshall have no further obligation to make any Advance, provide any Letters of Credit,loans, advances or other financial accommodations or have any other duties orresponsibilities in connection with the Loan Documents.
(b) Borrowerand Guarantors hereby release, discharge and acquit WFF, and its officers,directors, attorneys, agents and employees and its successors and assigns, fromall obligations to Borrower and Guarantors (and their respective successors andassigns) and from any and all claims, demands, debts, accounts, contracts,liabilities, actions and causes of actions, whether in law or in equity, thatBorrower or any Guarantor at any time had or has, or that its successors andassigns hereafter can or may have against WFF, its officers, directors,attorneys, agents or employees and its and their respective successors andassigns.
SECTION7 Resignation of Administrative Agent; Appointment of Administrative Agent. WFFhereby gives notice to the Lenders, Borrower and Guarantors of its resignation asAdministrative Agent as of the Amendment Effective Date. Ableco hereby agrees to acceptappointment as Administrative Agent as of the Amendment Effective Date. The CollateralAgent, Lenders, Borrower and Guarantors hereby (a) waive the 45-prior-day notice requiredin connection with the resignation of an agent pursuant to the Loan Agreement and (b)agree that as of the Amendment Effective Date, (i) Ableco is hereby appointedAdministrative Agent and shall succeed to and become vested with all the rights, powers,privileges and duties that WFF had as Administrative Agent and (ii) WFF is herebydischarged from its duties and obligations under the Loan Documents as AdministrativeAgent.
SECTION8 Representations, Warranties and Covenants. In addition to the continuingrepresentations, warranties and covenants heretofore or hereafter made by Borrower andGuarantors to the Agents and Lenders pursuant to the Loan Agreement and the other LoanDocuments, Borrower hereby represents, warrants and covenants with and to the Agents andLenders as follows (which representations, warranties and covenants are continuing andshall survive the execution and delivery hereof and shall be incorporated into and made apart of the Loan Documents):
(a) NoEvent of Default or act, condition or event, which with notice or passage of time or both, would constitute and Event of Default, exists on the date of this Amendment (after giving effect to the amendments to the Loan Agreement setforth herein); and
(b) ThisAmendment has been duly executed and delivered by Borrower and each Guarantorand is in full force and effect as of the date hereof, and the agreements andobligations of Borrower and each Guarantor contained herein constitute itslegal, valid and binding obligations, enforceable against it in accordance withthe terms hereof.
(c) Theexecution, delivery and performance by Borrower of the Sales Agreements and theTransition Services Agreement do not and will not conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any Ocean Spray Document including, without limitation, the Ocean Spray Toll Processing Agreement.
SECTION9 Conditions to Effectiveness. The effectiveness of this Amendment shall besubject to the following, the satisfaction of which shall be determined by the Agents ineach of their sole judgments (the first date upon which all such conditions shall havebeen satisfied being herein called the Amendment Effective Date):
(a) thereceipt by the Agents of an original or faxed executed copy of this Amendment,duly authorized, executed and delivered by Borrower, each Guarantor, theAdministrative Agent, the Collateral Agent and each Lender;
(b) aftergiving effect to the amendments to the Loan Agreement contained herein, no Default or Event of Default shall have occurred and be continuing; and
(c) alllegal matters incident to this Amendment shall be satisfactory to the Lendersand their counsel.
Notwithstandingthe above, if at any time, it shall be determined that the condition set forth in clause(b) above has not been satisfied, the termination and release of WFF as a Lender pursuantto Section 6 and all other provisions thereof in favor of or for the benefit of any Agentor any Lender and the resignation of WFF as Administrative Agent pursuant to Section 7and all other provisions thereof in favor of or for the benefit of any Agent or anyLender shall remain in effect. Further, if at any time, it shall be determined that thecondition set forth in clause (b) above has not been satisfied, the Agents, Lender andBorrower hereby agree that (i) the termination and reduction of commitments pursuant toSection 4 and all other provisions thereof in favor of or for the benefit of any Agent orany Lender remain effective and (ii) no Agent or Lender shall be required to disgorge anypayment made by Borrower to such Agent or Lender, all such payments shall be final,unconditional and non-refundable in accordance with the priorities of payments set forthin Section 4.
SECTION10 Deposit Account and Blocked Account Control Agreement.
(a) Borrower hereby agrees to make its best effort to, if not on the date hereof, promptlythereafter and in any event no later than four (4) Business Days after the date hereof,(i) provide confirmation in writing that Borrower has (A) established a deposit account(the Deposit Account) in Borrowers name with U.S. Bank NationalAssociation (the Bank) into which account all payments mailed to the existinglockbox at the Bank shall be deposited daily and (B) executed and delivered to the Bankan Automated Standing Transfer Authorization directing the Bank to transfer daily allcleared deposits to such account as Ableco may direct and (ii) with the consent of theBank, enter into a Blocked Account Control Agreement (with Lockbox Services) with Ableco,granting sole control of the Deposit Account to Ableco as Agent (the BlockedAccount Agreement).
(b) WFFhereby agrees, at the request of Ableco, to deliver to the Bank a terminationand release sufficient to effect the termination of the Lockbox and OperatingProcedural Agreement, dated November 5, 2001 (Original Lockbox Agreement),between the Bank, WFF and the Borrower. If Ableco shall not have made such arequest on or prior to the third (3rd) Business day hereafter, WFFshall on the fourth (4th) Business Day hereafter deliver such atermination and release to the Bank. WFF further agrees that until thetermination of the Original Lockbox Agreement, subject to Section 4 hereof, WFFshall transfer all deposits subject the Original Lockbox Agreement to suchaccount as Ableco may direct.
SECTION11 Effect of this Amendment. Except as modified pursuant hereto, no other changesor modifications to the Loan Agreement and the other Loan Documents are intended orimplied and in all other respects the Loan Agreement and the other Loan Documents arehereby specifically ratified, restated and confirmed by the Borrower and Guarantors as ofthe effective date hereof. To the extent of any conflict between the terms of thisAmendment and any of the Loan Documents, the terms of this Amendment shall control. EachBorrower and Guarantor confirms and agrees that (a) the Loan Agreement, as amendedhereby, the other Loan Documents and this Amendment shall be read and be construed as oneagreement and all references in any Loan Document to the Loan Agreement,thereto, thereof, thereunder or words of like importreferring to the Loan Agreement shall mean the Loan Agreement as amended by thisAmendment, and (b) confirms and agrees that to the extent that any Loan Document purportsto assign or pledge to the Agent or any Lender, or to grant to the Agent or any Lender aLien on any collateral as security for the Obligations of such Borrower from time to timeexisting in respect of the Loan Agreement and the Loan Documents, such pledge, assignmentand/or grant of a Lien is hereby ratified and confirmed in all respects.
SECTION12 Further Assurances. The parties hereto shall execute and deliver suchadditional documents and take such additional actions as may be necessary or desirable toeffectuate the provisions and purposes of this Amendment.
SECTION13 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS AMENDMENTAND ANY DISPUTE ARISING OUT OF THE RELATIONSHIP BETWEEN THE PARTIES HERETO, WHETHER INCONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE GOVERNED BY THE INTERNAL LAWS OF THE STATEOF NEW YORK (WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW).
SECTION14 Binding Effect. This Amendment shall be binding upon and inure to the benefitof each of the parties hereto and their respective successors and assigns.
15.1 This Amendment may be executed in any number of counterparts and by different partieshereto in separate counterparts, each of which shall be deemed to be an original, but allof which taken together shall constitute one and the same agreement.
15.2 Section and paragraph headings herein are included for convenience of reference only andshall not constitute a part of this Amendment for any other purpose.
15.3 Borrower and Guarantors hereby acknowledge and agree that this Amendment constitutes aLoan Document under the Loan Agreement. Accordingly, it shall be an Event ofDefault under the Loan Agreement if (i) any representation or warranty made by Borrowerunder or in connection with this Amendment shall have been untrue, false or misleading inany material respect when made, or (ii) Borrower shall fail to perform or observe anyterm, covenant or agreement contained in this Amendment.
15.4 The Borrower will pay on demand all reasonable out-of-pocket costs and expenses of theAgents and the Lenders in connection with the preparation, execution and delivery of thisAmendment and all actions after the date hereof related to this Amendment and the LoanDocuments including, without limitation, the reasonable fees, disbursements and othercharges of Otterbourg, Steindler, Houston & Rosen, P.C., counsel to theAdministrative Agent and WFF and Schulte Roth & Zabel LLP, counsel to the CollateralAgent and Ableco.
Northland Cranberries, Inc.
|By:||/s/ John Swendrowski
|Title: Chief Executive Officer and Treasurer|
NCI Foods, LLC
|By:||/s/ John Swendrowski
|Northland Insurance Center, Inc.|
|By:||/s/ John Swendrowski
|Title: Vice President|
|By:||/s/ John Swendrowski
|Title: Vice President|
[SIGNATURES CONTINUEDON NEXT PAGE]
[SIGNATURES CONTINUEDFROM PREVIOUS PAGE]
|AGENTS AND LENDERS:
Wells Fargo Foothill Inc., as
|By:||/s/ Dennis Rebman
|Title: Vice President|
|Ableco Finance LLC, as Collateral
Agent, Lender, Required Lender, and
newly appointed Administrative Agent
|By:||/s/ Eric Miller
|Title: Senior Vice President|