Exhibit 10.76
MODIFICATION AND EXTENSION
AGREEMENT
(Long Form)
This Modification and Extension
Agreement (the “Agreement”) is dated for reference
purposes as of March 21, 2011, between INVENTURE
FOODS, INC. , a Delaware corporation f/k/a THE INVENTURE
GROUP, INC. (the “Borrower”) and U.S. BANK
NATIONAL ASSOCIATION , a national banking association, its
successors and assigns (the “Bank”).
Unless defined elsewhere in this
Agreement, terms used herein have the meanings given them in the
Definitions Section hereof.
Factual
Background
A.
Bank and Borrower are parties to
that certain Loan Agreement (Revolving Line of Credit Loan and Term
Loan) dated as of May 16, 2007 (as amended, restated,
replaced, supplemented or otherwise modified from time to time, the
“RLOC/Term Loan Agreement”). The
RLOC/Term Loan Agreement establishes (1) a revolving line
of credit loan (“RLOC Loan” or “Facility
1”) to Borrower in the maximum principal amount of Fifteen
Million and No/100 Dollars ($15,000,000.00) (the “RLOC Loan
Maximum Committed Amount”), and (2) a term loan
(“Term Loan” or “Facility 2”) to Borrower
in the principal amount of Six Million and No/100 Dollars
($6,000,000.00) (the “Term Loan Amount”). Bank
also made a term loan (the “RE Loan”) to Borrower in
the principal amount of Four Million and No/100 Dollars
($4,000,000.00) (the “RE Loan Amount”), pursuant
to that certain Term Loan Agreement dated as of June 28, 2007
(as amended, restated, replaced, supplemented or otherwise modified
from time to time, the “RE Loan Agreement”).
The RLOC Loan, the Term Loan, and the RE Loan are hereinafter
collectively, referred to as the “Credit Facilities” or
“Loans” as applicable, each, individually, a
“Credit Facility,” or “Loan,” as
applicable). All capitalized terms used herein and not
defined shall have the meanings set forth in the
RLOC/Term Loan Documents or the RE Loan Documents (as
such term is defined below), as applicable.
B.
The RLOC Loan is evidenced by a
Promissory Note Secured by Deed of Trust (Revolving Line of Credit
Loan) made payable to Bank in the RLOC Loan Maximum Committed
Amount (as amended, restated, renewed, replaced, supplemented or
otherwise modified from time to time, the “RLOC Loan
Note”). The Term Loan is evidenced by a Promissory Note
Term Loan - Interim Draw Period Converting to Term (Term Loan -
Interim Draw Period Converting to Term) made payable to Bank in the
Term Loan Amount (as amended, restated, renewed, replaced,
supplemented or otherwise modified from time to time, the
“Term Loan Note”). The RE Loan is evidenced by a
Promissory Note Secured by Deed of Trust (Term Loan) made payable
to Bank in the RE Loan Amount (as amended, restated, renewed,
replaced, supplemented or otherwise modified from time to time, the
“RE Loan Note”). The RLOC Loan Note, the Term
Loan Note, and the RE Loan Note, as amended, restated, renewed,
replaced, supplemented or otherwise modified from time to time, are
hereinafter collectively, referred to as the “Notes,”
each, individually, a “Note,” as applicable.
C.
The Notes are secured by, among
other things, (i) that certain Business Security Agreement
(Blanket - All Business Assets) dated as of May 16, 2007,
covering all business assets of the Obligated Group (as amended,
restated, replaced, supplemented or otherwise modified from time to
time, the “Business Security Agreement”),
(ii) that certain Leasehold Deed of Trust with Assignment of
Rents, Security Agreement, and Fixture Filing (Washington) by
RADER FARMS, INC. , a Delaware corporation
(“Rader”), as grantor, and CHICAGO TITLE INSURANCE
COMPANY , as trustee, and Bank, as beneficiary and secured
party dated as of June 28, 2007, and recorded July 2,
2007, as Recording Number 2070700138 in the Official Records of
Whatcom County, Washington (the “Deed of Trust”)
covering certain real and personal property, as therein described
(all collectively, the “Property”). The Property
encumbered by the Deed of Trust includes, without limitation,
Rader’s Lessee’s Rights under the Ground
Lease.
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D.
The following parties have each agreed to guarantee all or certain
of Borrower’s obligations to Bank in accordance with one or
more Guaranties:
(1)
BN FOODS INC. , a Colorado corporation (“BN
Foods”);
(2)
BOULDER NATURAL FOODS, INC. , an Arizona corporation
(“Boulder”);
(3)
LA COMETA PROPERTIES, INC. , an Arizona corporation
(“La Cometa”);
(4)
POORE BROTHERS - BLUFFTON,
LLC , a Delaware limited
liability company (the “PBC”);
(5)
RADER FARMS, INC., a Delaware corporation
(“Rader”); and
(6)
TEJAS PB DISTRIBUTING, INC ., an Arizona corporation
(“Tejas”);
Each of the Guarantors described above is an
Obligated Group Party (as such term is defined below). It is
intended (i) that each Obligated Group Party shall be liable
for the Credit Facilities, directly or indirectly, as a Borrower or
as a Guarantor, (ii) that all business assets of each
Obligated Group Party shall be pledged to Bank as collateral for
the Credit Facilities, (iii) that the financial statements and
other information required of Borrower under this Agreement shall
be prepared on a consolidated basis to include all Obligated Group
Parties, (iv) that all covenants of Borrower shall be
covenants of the Obligated Group Parties as applicable to the
appropriate Obligated Group Party(ies), and (v) that all
representations and warranties of Borrower shall be representations
and warranties of the Obligated Group Parties as applicable to the
appropriate Obligated Group Party(ies). Borrower is a holding
company for several affiliated entities, and each of the Obligated
Group Parties (other than Borrower) is an Affiliate, and a wholly
owned subsidiary, of Borrower.
E.
U.S. BANCORP EQUIPMENT FINANCE, INC. (“USBEF”), and Borrower are parties
to that certain Master Lease Agreement dated April 19, 2010
(as amended, restated, replaced, supplemented or otherwise modified
from time to time, the “Lease”). All of the Lease
documents which evidence, guarantee, secure, or otherwise pertain
to the Lease are hereinafter collectively referred to as the
“Lease Documents”).
F.
The RLOC Loan is due and payable on June 30, 2011 (the
“RLOC Maturity Date”). The Term Loan is due
and payable on May 31, 2014 (the “Term Loan
Maturity Date”). The RE Loan is due and payable on
July 1, 2017 (the “RE Maturity
Date”).
G.
As of March 16, 2011, Borrower
was indebted to Bank (1) under the RLOC Loan Note in the total
principal amount of Seven Million Eight Hundred Six Thousand Six
Hundred Ninety-One and 50/100 Dollars ($7,806,691.50), plus
accrued interest; (2) under the Term Loan Note in the total
principal amount of Two Million Seven Hundred Eighty-Five Thousand
Seven Hundred Fourteen and 35/100 Dollars ($2,785,714.35), plus
accrued interest, and (3) under the RE Loan Note in the total
principal amount of Three Million Three Hundred Eighty-Three
Thousand One Hundred Seventy-One and 78/100 Dollars
($3,383,171.78), plus accrued interest (these amounts are
collectively referred to herein as the “Present
Debt”). The Present Debt is calculated without regard
to any principal payments which are required or allowed under this
Agreement, if any.
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H.
Borrower has requested that Bank modify and extend the RLOC Loan as
set forth below. Bank, although under no obligation to do so,
is willing to so modify the RLOC Loan, subject to the terms and
conditions set forth below.
THEREFORE , Bank and Borrower agree as follows:
Definitions : The following capitalized words and
terms shall have the following meanings when used in this
Agreement. All references to dollar amounts shall mean
amounts in lawful money of the United States of America.
Words and terms used in the singular shall include the plural, and
the plural shall include the singular, as the context may
require. The terms “Guarantor” as used in this
Agreement and the other the RLOC/Term Loan Documents and the RE
Loan Documents shall apply only if any such parties exist, and
should be ignored if inapplicable. Capitalized terms used and
not defined herein have the meanings given in the Loan
Agreement.
“ Affiliate of ” or “
affiliated with ” means in control of, controlled by
or under common control with.
“ Agreement ” means this
modification agreement between Borrower and Bank.
“ Bank ” has the meaning set
forth in the introductory paragraph to this Agreement.
“ BN Foods ” has the meaning
set forth in Recital D above.
“ Borrower ” has the meaning
set forth in the introductory paragraph to this
Agreement.
“ Boulder ” has the meaning
set forth in Recital D above.
“ Business Security Agreement
” has the meaning set forth in Recital C
above.
“ Continuing Guaranty ” and
“ Continuing Guaranties ” have the meanings set
forth in Section 3.11 below.
“ Credit Facility ” and
“ Credit Facilities ” have the meanings set
forth in Recital A above.
“ Deed of Trust ” has the
meaning set forth in Recital C above.
“ Facility 1 ” have the
meanings set forth in Recital A
above.
“ Facility 2 ” have the
meanings set forth in Recital A
above.
“ Facility Fee ” has the
meaning set forth in Section 4.2 .
“ Ground Lease ” means that
certain Ground Lease wherein Lyle Rader, Sue Rader, Brad Rader and
Julie Newell (formerly known as Julie Rader) are the current
lessors (collectively, “Ground Lessor”) and RADER
FARMS, INC. , a Delaware corporation, is the current
ground lessee, dated May 15, 2007. The Ground Lease is
also described in that certain Memorandum of Lease and Purchase
Agreement, and recorded May 17, 2007, as Instrument
No. 2070502840, Official Records of Whatcom County,
Washington.
“ Ground Lessor’s Consent
” means that certain Ground Lessor’s Consent Agreement
between Ground Lessor, Rader, Borrower, and Bank dated May 17,
2007 as Instrument No. 2070700139, Official Records of Whatcom
County, Washington.
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“ Guarantor ” means, each
person or entity guaranteeing all or any portion of
Borrower’s obligations under the RLOC/Term Loan Documents
and/or the RE Loan Documents, or all or any portion of any other
party’s obligations under the RLOC/Term Loan Documents and/or
the RE Loan Documents, pursuant to a Guaranty, including those
parties described in Recital D above (collectively,
the “Guarantor” or
“Guarantors”).
“ Guaranty ” means, each
guaranty executed or required to be executed in favor of Bank in
connection with any Loan, including each continuing guaranty,
payment guaranty, payment and performance guaranty, completion
guaranty, completion agreement, or indemnity agreement
(collectively, the “Guaranty” or
“Guaranties”).
“ La Cometa ” has the meaning
set forth in Recital D above.
“ Lease ” has the meaning set
forth in Recital E above.
“ Lease Documents ” has the
meaning set forth in Recital E above.
“ Lessee’s Rights ”
means all of the Rader’s right, title, and interest under the
Ground Lease, including all possessory rights to the land, and all
rights and interests of the Rader in all improvements now existing
or hereafter located on the land.
“ Note ” and “
Notes ” have the meanings set forth in Recital
B above.
“ Obligated Group ” and
“ Obligated Group Parties ” shall mean,
collectively, (a) Borrower, (b) La Cometa, (c) PBC,
(d) Tejas, (e) Boulder, (f) BN Foods, and
(g) Rader (each, individually, an “Obligated Group
Party”).
“ PBC ” has the meaning set
forth in Recital D above.
“ Present Debt ” has the
meaning set forth in Recital F above.
“ Property ” means all or any
part of the property affected by the Deed of Trust, or any interest
in all or any part of it, as the context requires, which includes
but is not limited to all of the Lessee’s Rights and all now
existing or hereafter acquired interests of Rader in and to the
land described therein, together with all improvements now or
hereafter located on it.
“ Rader ” has the meaning set
forth in Recital D above.
“ RE Loan ” has the meaning
set forth in Recital A above.
“ RE Loan Agreement ” has the
meaning set forth in Recital A above.
“ RE Loan Amount ” has the
meaning set forth in Recital A above.
“ RE Loan Documents ” means
all documents which evidence, guarantee, secure, or otherwise
pertain to the RE Loan, including but not limited to the RE Loan
Agreement, the RE Loan Note, the Business Security Agreement, the
Deed of Trust, and any other security instrument or agreement
securing the RE Loan.
“ RE Loan Note ” has the
meaning set forth in Recital B above.
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“ Restated Business Security
Agreement ” has the meaning set forth in
Section 3.10 below.
“ Restated RLOC Loan Note ”
has the meaning set forth in Section 3.8
below.
“ RLOC Loan ” has the meaning
set forth in Recital A above. The RLOC Loan is
referred to in the RLOC/Term Loan Agreement as “Facility
1.”
“ RLOC Loan Amount ” has the
meaning set forth in Recital A above.
“ RLOC Loan Maximum Committed
Amount ” has the meaning set forth in Recital
A above.
“ RLOC Loan Note ” has the
meaning set forth in Recital B above. The RLOC
Loan Note will be amended, restated, and replaced in connection
with the modification contemplated hereunder in accordance with
Section 3.9 above
“ RLOC/Term Loan Agreement ”
has the meaning set forth in Recital A
above.
“ RLOC/Term Loan Documents ”
means all documents which evidence, guarantee, secure, or otherwise
pertain to the RLOC/Term Loans, including but not limited to the
RLOC/Term Loan Agreement, the Business Security Agreement, the Deed
of Trust, and any other security instrument or agreement securing
the RLOC/Term Loans.
“ RLOC/Term Loans ” means,
collectively, RLOC Loan and Term Loan, which Credit Facilities were
made available by Bank to Borrower pursuant to and as described in
the RLOC/Term Loan Agreement. The RLOC Loan, the Term Loan
and the RE Term Loans are and shall remain be cross-collateralized
and cross-defaulted .
“ RLOC Loan Maximum Committed
Amount ” has the meaning set forth in Recital
A above.
“ Tejas ” has the meaning set
forth in Recital D above.
“ Term Loan ” has the meaning
set forth in Recital A above. The Term Loan is
referred to in the RLOC/Term Loan Agreement as “Facility
2.”
“ Term Loan Amount ” has the
meaning set forth in Recital A above.
“ Term Loan Note ” has the
meaning set forth in Recital C above.
“ Title Company ” means
CHICAGO TITLE INSURANCE COMPANY , its successors and
assigns, and/or any title company that provides title insurance in
favor of Bank in connection with the Loan.
“ Title Policy ” means Title
Policy No. 301980 issued on July 2, 2007, by the Title
Company insuring the Deed of Trust for the benefit of
Bank.
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Agreement
1.
Recitals .
The recitals set forth above in the Factual Background are true,
accurate and correct.
2.
Reaffirmation/No Impairment . Borrower reaffirms all of its
obligations under the RLOC/Term Loan Documents and the RE Loan
Documents and under the Loans. Except as specifically hereby
amended or restated, the RLOC/Term Loan Documents and the RE Loan
Documents shall each remain in full force and effect.
Borrower’s payment and performance obligations pursuant to
the RLOC/Term Loan Documents and the RE Loan Documents, including
all extensions, amendments, renewals or replacements thereof, shall
continue to be secured by the security interests and liens arising
under the RLOC/Term Loan Documents and the RE Loan
Documents.
3.
Modification of Loan Documents . The RLOC/Term Loan Documents and the RE
Loan Documents are hereby modified and amended as described below,
certain RLOC/Term Loan Documents and certain RE Loan Documents are
required to be modified, amended, and or restated as described
below, and certain additional documents or items are required as
set forth below. In the event of a conflict between the terms
of the RLOC/Term Loan Documents or the RE Loan Documents and the
terms of this Agreement, this Agreement shall control.
3.1
Maturity Date of Loan . The maturity date of the RLOC Loan is
hereby extended to July 31, 2014 (the “Extended
Maturity Date”). All sums owing on the RLOC Loan shall
be due and payable no later than this Extended Maturity Date.
Borrower acknowledges that concurrently with the execution of this
Agreement, Borrower shall execute and/or cause Guarantor to
execute, as applicable, certain other documents as may be required
by Bank. The Extended Maturity Date of the RLOC Loan is
reflected in the Restated RLOC Loan Note being executed by Borrower
pursuant to Section 3.9 below.
3.2
Increase in RLOC Loan Amount . The RLOC Loan Amount is hereby increased
from Fifteen Million and No/100 Dollars ($15,000,000.00)
to Twenty-Five Million and No/100 Dollars
($25,000,000.00).
3.3
Name Changes .
(a)
Effective May 20, 2010, Borrower changed its name from “
THE INVENTURE GROUP, INC. , a Delaware
corporation” to “ INVENTURE FOODS, INC. , a
Delaware corporation.” Any and all references to
“Borrower” under the RLOC/Term Loan Documents and the
RE Loan Documents shall mean “ INVENTURE
FOODS, INC. , a Delaware corporation.”
(b)
Effective May 11, 2007, RFAC changed its name from “
RADER FARMS ACQUISITION CORP. , a Delaware
corporation” to “ RADER FARMS, INC. , a
Delaware corporation.” Any and all references to
“RFAC” or “RDI” or “RFI”
under the RLOC/Term Loan Documents and the RE Loan Documents
shall now mean “Rader,” which shall hereafter refer to
RADER FARMS, INC. , a Delaware corporation.
3.4
Modifications to Section 2.2 of RLOC Loan
Agreement .
(a)
The expiration date of the RLOC Loan being hereby modified to be
July 31, 2014 . Therefore,
Section 2.2(a) of the RLOC/Term Loan
Agreement is hereby amended and modified to read as
follows:
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“(a)
Availability; Borrowing Base . Availability under the
Facility 1 line of credit will be governed by a borrowing base
formula, and is available between the date of this Agreement and
July 31, 2014 (the “Facility 1 Expiration
Date”) unless Borrower is in default. The outstanding
principal balance of Facility 1 plus the outstanding amounts of any
letters of credit, including amounts drawn on letters of credit and
not yet reimbursed under Facility 1, shall not exceed the Borrowing
Base. Borrower will provide Bank with information regarding
the Borrowing Base in such form and at such times as Bank may
request.”
(b)
The maturity date of the RLOC Loan being hereby modified to be
July 31, 2014 . Therefore,
Section 2.2(c) of the RLOC/Term Loan
Agreement is hereby amended and modified to read as
follows:
“(c)
Maturity Date . The maturity date of Facility 1 is
July 31, 2014 (the “Facility 1 Maturity
Date”). All sums owing under Facility 1 shall be due
and payable no later than the Facility 1 Maturity
Date.”
(c)
The Unused Commitment Fee for the RLOC Loan is being hereby
modified, and therefore. Section 2.2(f)
of the RLOC/Term Loan Agreement is hereby amended and
modified to read as follows:
“(f)
Unused Commitment Fee . Borrower shall pay to Bank an
unused commitment fee (the “Unused Commitment Fee”) on
the average daily unused portion of Facility 1 at the rate of
twenty-five hundredths of one percent (0.25%) (25 basis points) per
annum, such fee calculated quarterly and payable in arrears by
Borrower, in immediately available funds, within fifteen (15) days
after the end of each calendar quarter for which the fee is
owing.”
(d)
The Fee and Rate Schedule attached as Exhibit C
of the RLOC/Term Loan Agreement (i) is no longer applicable to
the RLOC Loan, and (ii) will continue to be applicable to the
Term Loan.
(e)
Subsection (iii) of as Section 2.2(h)
of the RLOC/Term Loan Agreement is hereby deleted and in
it’s stead, the following is added:
(iii)
For each letter of credit issued hereunder, Borrower shall pay to
Bank annual non-refundable letter of credit fees, payable quarterly
in advance, calculated at the beginning of each calendar quarter
and based upon (1) the then existing per annum Note Rate (as
such term is defined in the RLOC Loan Note), and (2) the face
amount of the applicable letter of credit.
3.5
Definitions Modified or Added to, or Deleted from
RLOC/Term Loan
Documents .
(a)
The definition of “Borrowing Base” in the RLOC/Term
Loan Documents is hereby modified and amended to read as
follows:
““ Borrowing Base
” means an amount equal to:
(a)
the sum of (i) eighty five percent (85%) of Net
Eligible Accounts, plus (ii) sixty percent
(60%) of the applicable Obligated Group
Party’s(ies’) cost (determined on a lower of cost or
market basis or on such other basis as may be designated by Bank
from time to time) of Eligible Raw Material Inventory, as such cost
may be diminished as a result of any event causing loss or
depreciation in value of Eligible Raw Material
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Inventory, plus (iii)
sixty-five percent (65%) of the applicable Obligated Group
Party’s(ies’) cost (determined on a lower of cost or
market basis or on such other basis as may be designated by Bank
from time to time) of Eligible Finished Goods Inventory, as such
cost may be diminished as a result of any event causing loss or
depreciation in value of Eligible Finished Goods Inventory;
provided , however , that in no event shall total
Eligible Inventory exceed fifty percent (50%) of the
Borrowing Base (excepting, at the request of Borrower, a seasonal
adjustment of sixty percent (60%) will be allowed for the
period of August through January), less
(b)
the Rent Reserve Amount, less
(c)
undrawn amounts of outstanding letters of credit issued by Bank or
any Affiliate thereof.”
(b)
The introductory portion of the definition of “Eligible
Finished Goods Inventory” in the RLOC/Term Loan Documents is
hereby modified and amended to read as follows:
““ Eligible Finished
Goods Inventory ” means, collectively, the value of each
Obligated Group Party’s, finished goods inventory so long as
it meets the following conditions:…”
(c)
The definition of “Eligible Inventory” in the RLOC/Term
Loan Documents is hereby modified and amended to read as
follows:
““ Eligible
Inventory ” means, collectively, all Eligible Raw
Materials Inventory and all Eligible Finished Goods
Inventory.”
(d)
The introductory portion of the definition of “Eligible Raw
Materials” in the RLOC/Term Loan Documents is hereby modified
and amended to read as follows:
““ Eligible Raw
Materials Inventory ” means, collectively, the value of
each Obligated Group Party’s raw materials inventory so long
as it meets the following conditions:…”
(e)
The definition of “Rent Reserve Amount” in the
RLOC/Term Loan Documents is hereby added as follows:
““ Rent Reserve
Amount ” means One Hundred Fourteen Thousand and No/100
Dollars ($114,000.00).”
(f)
Subparagraphs (ix) and (x) within the definition of
“Eligible Accounts” in the RLOC/Term Loan Documents
under are hereby modified and amended to read as
follows:
“(ix)
Receivables Concentration . “Eligible
Accounts” shall not include (a) that portion of the
account(s) due from any single account debtor, other than
Costco, Kroger, Safeway, Target, or Walmart/Sam’s Club, which
exceeds ten percent (10%) of such Obligated Group Party’s
aggregate accounts, or (b) that portion of the
account(s) due from Costco which exceeds fifty percent (50%)
of such Obligated Group Party’s aggregate accounts, or
(c) that portion of the account(s) due from Kroger,
Safeway, Target, or Walmart/Sam’s Club which exceeds twenty
percent (20%) of such Obligated Group Party’s aggregate
accounts.
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(x)
Cross-Age . If the dollar amount of accounts of an
account debtor, other than Costco, Walmart/Sam’s Club Kroger,
Safeway, or Target, which are not Eligible Accounts under
subparagraph (ii) above exceeds ten percent (10%) of the total
dollar amount due from such account debtor (which percentage
limitation may change from time to time at Bank’s
discretion), all of such account debtor’s accounts shall be
excluded from Eligible Accounts.”
3.6
Definitions Modified or Added to or Deleted from the
RLOC/Term Loan
Documents AND the RE Loan Documents .
(a)
The definitions set forth in the RLOC/Term Loan Documents and the
RE Loan Documents is hereby modified, amended, and/or added to read
as follows:
““ Base Rate
” shall mean the greater of (a) the Prime Rate, and
(b) the Federal Funds Rate plus one half of one percent
(0.5%).
“ Base Rate Loan
” shall mean a Loan that bears interest at the Base
Rate.
“ Federal Funds Rate
” shall mean, for any day, the rate of interest per annum
(rounded upward, if necessary, to the nearest whole multiple of
1/100th of 1%) equal to the weighted average of the rates on
overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on such day, or
if no such rate is so published on such day, on the most recent day
preceding such day on which such rate is so published.
“ Governmental
Authority ” shall mean any nation or government, any
state or other politi
