Exhibit 10.1
SECOND AMENDMENT
TO
AMENDED AND RESTATED CREDIT
AGREEMENT
This SECOND
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (this
“Second Amendment”), effective as of October 19,
2007, is by and between GOLDEN OVAL EGGS, LLC, a limited liability
company organized under the laws of the State of Delaware, GOECA,
LP, a Delaware limited partnership, and MIDWEST INVESTORS OF IOWA,
COOPERATIVE, a cooperative organized under the laws of the State of
Iowa (individually each a “Borrower” and collectively
the “Borrowers”) the banks and other financial
institutions or entities which are signatories hereto (individually
each a “Lender” and collectively the
“Lenders”), COBANK, ACB, a federally charted
instrumentality under the Farm Credit Act of 1971, as amended, one
of the Lenders and as agent for the Lenders (in such capacity, the
“Administrative Agent”).
RECITALS
1.
The Lenders and the Borrowers entered into an Amended and Restated
Credit Agreement dated as of June 30, 2006 (the “Credit
Agreement”); and
2.
The Lenders and the Borrowers entered into a First Amendment to the
Amended and Restated Credit Agreement dated as of April 30, 2007
(the “First Amendment”; the Credit Agreement and First
Amendment together may be referred to as the “Amended Credit
Agreement”); and
3.
The Borrowers desire to amend certain provisions of the Amended
Credit Agreement to obtain additional lending commitments, among
other things, and the Lenders have agreed to make such amendments,
subject to the terms and conditions set forth in this Second
Amendment.
AGREEMENT
NOW, THEREFORE ,
for good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto hereby covenant
and agree to be bound as follows:
Section 1.
Capitalized Terms . Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to
them in the Amended Credit Agreement, unless the context shall
otherwise require.
Section 2.
First Amendment . This Second Amendment does not replace
or supplant the First Amendment, except as specifically provided
herein.
Section 3.
Supplemental Revolving Note . Borrowers will reaffirm
and restate the Total Revolving Outstandings, as defined in the
Credit Agreement, by execution of amended and restated notes, in
the form attached hereto as Exhibit A. CoBank, as a Lender and the
Administrative Agent, and Metropolitan Life Insurance Company
(“Met”) as a Lender, hereby agree to make
available to Borrowers an additional revolving credit facility in
the amount of Two Million Five Hundred Thousand Dollars
($2,500,000) available as loans to the Borrowers,
jointly and
severally, until December 14, 2007 (this facility to be referred to
hereafter as the “Short Term Revolving Note”) at which
time all amounts outstanding thereunder shall be due and payable.
The Short Term Revolving Note shall be governed by the provisions
of the Amended Credit Agreement as they apply to a Revolving Loan,
including those granting security interests, with the following
modifications and exceptions:
1.
The Termination Date as it applies to the Short Term Revolving Note
only is December 14, 2007. For avoidance of doubt, the Termination
Date (as amended by the First Amendment) as it applies to any other
Revolving Loans shall be unaffected by this Second Amendment.
2.
The Short Term Revolving Note is an “Obligation”,
“Revolving Note” and “Revolving Loan” as
defined and governed by the provisions of the Credit Agreement,
except to the extent that such definition or provisions are
inconsistent with a term included in this Second Amendment. All
representations, warranties, covenants and other undertakings of
the Borrowers set out in the Amended Credit Agreement shall apply
to the debt arising from the Short Term Revolving Note as if said
Short Term Revolving Note had been entered into by the parties at
the time of execution of the Credit Agreement.
3.
The Short Term Revolving Note shall be funded by the Lenders as
shown on the signature page of this Second Amendment.
4.
The Short Term Revolving Note will be funded immediately upon
execution of this Second Amendment and the Second Amendment
Documents, without further action by the Borrowers. To the extent
that the Borrowers do not direct application of the funds
otherwise, funds will be applied to the balance outstanding under
the Amended and Restated Revolving Note (Exhibit A-1). Any payments
made by Borrowers after the execution of this Second Amendment and
the Second Amendment Documents will first be applied to the
Existing Revolving Loans, as defined below.
5.
Provided that no Event of Default has resulted in the acceleration
of the indebtedness arising under the Short Term Revolving Note,
demand for repayment of the Short Term Revolving Note shall be
deemed to have been made on December 13, 2007. On that date, if the
Amended and Restated Revolving Note and the Amended and Restated
Swing Line Note (both reflected on Exhibits A-1 and A-2, and
cumulatively referred to hereafter as the “Existing Revolving
Loans”) have not been fully drawn, such funds as are
available and required shall be automatically advanced by the
Administrative Agent and applied to the Short Term Revolving Note.
The Lenders’ obligations (set forth in Section 2.6 (c) of the
Credit Agreement) to make their pro rata shares of Revolving Loans
available for repayment of Swing Line Loans shall also apply to the
repayment of the Short Term Revolving Note. To the extent that
there are insufficient funds available from the Existing Revolving
Loans to repay all of the Borrowers’ obligations arising
under the Short Term Revolving Note, each Revolving Lender will
share in repayment rights and obligations in accordance with each
Revolving Lender’s percentage of the then total Revolving
Loans (which term includes the Existing Revolving Loans and the
Short Term Revolving Note).
The Short Term
Revolving Note shall be in essentially the same form of Exhibit B
attached hereto.
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Section 4.
Deferral of Principal Payments under Tranche A and B
Loans . Principal payments due on October 20, 2007 and
November 20, 2007 for any Tranche A or B Loan shall be deferred
until the Maturity Date of the applicable Tranche Loan.
Section 5.
Amendments . The Amended Credit Agreement is hereby
further amended as follows:
5.1
Current Ratio . Section 6.16 of the Amended Credit Agreement is
amended to read in its entirety as follows:
6.16 Current
Ratio . Starting on December 15, 2007 , the
Borrower’s Agent shall not permit the ratio of its Current
Assets to its Current Liabilities to be less than 1.0 to 1.0 at
anytime, provided, however that from May 31, 2008 and
forward, the Borrower’s Agent shall not permit the ratio of
its Current Assets to its Current Liabilities to be less than 1.25
to 1.0.
5.2
Working Capital . Section 6.17 of the Amended Credit Agreement
is amended to read in its entirety as follows:
6.17 Working
Capital . Starting on December 15, 2007 , the
Borrower’s Agent will not permit its Working Capital to be
less than $0 at any time, provided, however, that from May 31, 2008
and forward, the Borrower’s Agent will not permit its Working
Capital to be less than $7,000,000.
5.3
Leverage Ratio . Section 6.18 of the Amended Credit Agreement
is amended to read in its entirety as follows:
6.18 Leverage
Ratio . Starting on December 15, 2007 , the
Borrower’s Agent will not permit the Leverage Ratio as of the
last day of any fiscal quarter for the four consecutive fiscal
quarters ending on that date, to be more than (a) for the periods
ending August 31, 2007, November 30, 2007, and February 28, 2008,
5.0 to 1.0; (b) for the period ending May 31, 2008, and each fiscal
quarter ending thereafter, 4.25 to 1.0, provided, however ,
that the Leverage Ratio shall be measured (x) for the quarter
ending on August 31, 2007, on the two consecutive fiscal quarters
ending on such date on an annualized basis; and (y) for the fiscal
quarter ending on November 30, 2007, on the three consecutive
fiscal quarters ending on such date on an annualized
basis.
5.4
Fixed Charge Coverage Ratio . Section 6.19 of the Amended
Credit Agreement is amended to read in its entirety as
follows:
6.19 Fixed
Charge Coverage Ratio . Starting on December 15, 2007 ,
the Borrower’s Agent will not permit the Fixed Charge
Coverage Ratio, as of the last day of any fiscal quarter for the
four consecutive fiscal quarters ending on that date, to be less
than (a) for the periods ending on August 31, 2007, November 30,
2007 and February 28, 2008, 1.0 to 1.0, and (b) for the period
ending on May 31, 2008 and each fiscal quarter ending thereafter,
1.25 to 1.0; provided, however that the Fixed Charge
Coverage Ratio shall be measured (x) for the quarter ending on
August 31, 2007, on the two consecutive fiscal quarters ending on
such date on an
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annualized basis; and
(y) for the fiscal quarter ending on November 30, 2007, on the
three consecutive fiscal quarters ending on such date on an
annualized basis.
5.5
Minimum EBIDTA . Section 7.1 of the Amended Credit Agreement is
amended to add an additional subsection:
(o) Borrowers fail to
maintain a minimum monthly EBIDTA of Eight Hundred Fifty Thousand
Dollars and no cents ($ 850,000.00). By the 10 th day of
each month Borrowers shall certify to Lenders that the minimum
monthly EBIDTA requirement was met for the previous calendar
month.
5.6
Net Worth . Section 6.15 of the Amended Credit Agreement (as
set out in the First Amendment) is amended to read in its entirety
as follows:
6.15 Net
Worth . Starting on December 15, 2007 , the
Borrower’s Agent will not permit its Net Worth at any time to
be less than $28,000,000 plus forty percent (40%) of net earnings
(for purposes hereof exclusive of all net losses) accumulated after
August 31, 2006, plus one hundred percent (100%) of all equity
contributed after August 31, 2006.
5.7
Exhibit G . Exhibit G to the Credit Agreement is hereby amended
to read as set forth on Exhibit C attached to this Second
Amendment which is made part of the Credit Agreement as Exhibit G
thereto.
5.8
Additional Borrower Reporting Requirements . Section 5.1 of the
Amended Credit Agreement is amended to add an additional
subsection:
(p) On a weekly basis,
sales reports in a form acceptable to Lenders. Borrowers will
promptly respond to any requests for additional details. These
weekly sales reports will identify any variance from the
re-forecasted budget provided to Lenders by Borrowers on or about
September 19, 2007 (which document is commonly referred to by
Borrowers as the “Bank Budget”). Borrowers will also
furnish to Lenders, on a weekly basis, an aged accounts payable
report and a weekly cash flow report, both in a form acceptable to
the Lenders.
Section 6.
Green, Holcomb & Fisher Report . Borrowers have
retained the financial advisory firm of Green, Holcomb & Fisher
(“GHF”). Borrowers will furnish to the Lenders the
detailed report from GHF on or before November 30, 2007, setting
forth Borrowers’ long term business plan. Borrowers hereby
consent to communication with GHF by the Administrative Agent, and
covenant and agree to enter in to such agreement with GHF as may be
required by GHF to permit the tender of the above referenced report
to the Administrative Agent and Lenders.
Section 7.
Effectiveness of Amendments . This Second Amendment
shall become effective upon delivery by the Borrowers of, and
compliance by the Borrowers with, the following:
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7.1
This Second Amendment, including the documents substantially in the
same form as those set forth on Exhibits A, B, C and D, duly
executed by each Borrower, Borrowers’ Agent, the
Administrative Agent and Lenders.
7.2
A copy of the limited liability company or corporate resolutions of
each Borrower authorizing the execution, delivery and performance
of this Second Amendment certified as true and accurate by its
Secretary or Assistant Secretary (or other appropriate officer),
along with a certification by such Secretary, Assistant Secretary
or officer (a) certifying that there has been no amendment to such
Borrower’s organizational documents since true and accurate
copies of the same were delivered to the Administrative Agent with
a certificate of the Secretary of such Borrower dated April 30,
2007, and (b) identifying each officer of such Borrower authorized
to execute this Second Amendment and any other instrument or
agreement executed by such Borrower in connection with this Second
Amendment (collectively, the “Second Amendment
Documents”), and certifying as to specimens of such
officer’s signature and such officer’s incumbency in
such offices as such officer holds.
7.3
Certified copies of all documents evidencing any necessary company
action, consent or governmental or regulatory approval (if any)
with respect to this Second Amendment.
7.4
A certificate of good standing for each Borrower in the
jurisdiction of its formation or incorporation and each other
jurisdiction where the character of the properties owned or leased
by such Borrower makes such qualification necessary, certified by
the appropriate governmental officials as of a date acceptable to
the Administrative Agent.
7.5
Results of a recent lien search in each of the jurisdictions where
the assets of each Borrower and its Subsidiaries are located, and
such search shall reveal no Liens on any of the assets of such
Borrower or its Subsidiaries except for those Liens permitted by
Section 6.13 of the Credit Agreement or discharged on or prior to
date hereof pursuant to a document reasonably satisfactory to the
Administrative Agent.
7.6
Reaffirmation of Security Documents by each Borrower in
substantially the same form of Exhibit D attached hereto.
7.7
The Administrative Agent shall have received executed legal
opinions of counsel to the Borrowers in form and substance
reasonably satisfactory to the Lenders.
7.8
The Borrowers shall have paid to the Administrative Agent an
amendment fee in the amount of $ 42,560.00.
7.9
The Borrowers shall have satisfied such other conditions as
specified by the Administrative Agent, including payment of all
unpaid legal fees and expenses incurred by the Administrative Agent
through the date of this Amendment in connection with the Credit
Agreement and the Second Amendment Documents.
Section 8.
No Waiver . Nothing herein shall be deemed a waiver by
the Lenders of any term, condition, representation or covenant
applicable to the Borrowers under the Amended Credit Agreement or
any of the other agreements, documents or instruments executed
and
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delivered in
connection therewith, or of the covenants described therein.
Borrowers shall comply with any reporting requirements set out
under the Amended Credit Agreement.
Section 9.
Representations, Warranties, Authority, No Adverse Claim
.
9.1
Reassertion of Representations and Warranties, No
Default . Each Borrower hereby represents that on and as of
the date hereof and after giving effect to this Second Amendment
(a) all of the representations and warranties contained in the
Amended Credit Agreement are true, correct and complete in all
respects as of the date hereof as though made on and as of such
date, except for changes permitted by the terms of the Amended
Credit Agreement, and (b) there will exist no Default or Event of
Default under the Credit Agreement as amended by the First and
Second Amendments on such date which has not been waived by the
Lenders.
9.2
Authority, No Conflict, No Consent Required . Each
Borrower represents and warrants that such Borrower has the power
and legal right and authority to enter into the Second Amendment
Documents and has duly authorized as appropriate the execution and
delivery of the Second Amendment Documents and other agreements and
documents executed and delivered by such Borrower in connection
herewith or therewith by proper company action, and none of the
Second Amendment Documents nor the agreements contained herein or
therein contravenes or constitutes a default under any agreement,
instrument or indenture to which such Borrower is a party or a
signatory or a provision of such Borrower’s articles of
organization, bylaws or any other agreement or requirement of law,
or result in the imposition of any Lien on any of its property
under any agreement binding on or applicable to such Borrower or
any of its property except, if any, in favor of the Lenders. Each
Borrower represents and warrants that no consent, approval or
authorization of or registration or declaration with any Person,
including but not limited to any governmental authority, is
required in connection with the execution and delivery by
such Borrower of the Second Amendment Documents or other agreements
and documents executed and delivered by such Borrower in
connection therewith or the performance of obligations of
such Borrower therein described, except for those which the
Borrower has obtained or provided and as to which the Borrower has
delivered certified copies of documents evidencing each such
action to the Administrative Agent.
9.3
No Adverse Claim . Each Borrower warrants, acknowledges
and agrees that no events have been taken place and no
circumstances exist at the date hereof which would give such
Borrower a basis to assert a defense, offset or counterclaim to any
claim of any Lender with respect to the Obligations.
Section 10.
Affirmation of Credit Agreement, Further References, Affirmation
of Security Interest . The Lenders and each Borrower
acknowledge and affirm that the Credit Agreement, as previously and
hereby amended, is hereby ratified and confirmed in all respects
and all terms, conditions and provisions of the Credit Agreement,
except as amended by the First Amendment and Second Amendment,
shall remain unmodified and in full force and effect. All
references in any document or instrument to the Credit Agreement
are hereby amended and shall refer to the Credit Agreement as
amended by the First Amendment and further modified by this Second
Amendment. Each Borrower confirms to the Administrative Agent and
the Lenders that the Obligations are and continue to be secured by
the security interests granted by the Borrowers
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in favor of
the Administrative Agent for the benefit of the Administrative
Agent and the Lenders under the Security Documents, and all of the
terms, conditions, provisions, agreements, requirements, promises,
obligations, duties, covenants and representations of the Borrowers
under such documents and any and all other documents and agreements
entered into with respect to the obligations under the Credit
Agreement are incorporated herein by reference and are hereby
ratified and affirmed in all respects by each Borrower.
Section 11.
Merger and Integration, Superseding Effect . This Second
Amendment, from and after the date hereof, embodies the entire
agreement and understanding between the parties hereto and
supersedes and has merged into this Second Amendment all prior oral
and written agreements on the same subjects by and between the
parties hereto, occu
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