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SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

Loan Agreement

SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT | Document Parties: GOLDEN OVAL EGGS LLC | Denver, CO | GOEMCA, Inc | GOLDEN OVAL EGGS, LLC | Greenwood Village, CO | IOWA, COOPERATIVE You are currently viewing:
This Loan Agreement involves

GOLDEN OVAL EGGS LLC | Denver, CO | GOEMCA, Inc | GOLDEN OVAL EGGS, LLC | Greenwood Village, CO | IOWA, COOPERATIVE

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Title: SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
Governing Law: Colorado     Date: 10/25/2007

SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT, Parties: golden oval eggs llc , denver  co , goemca  inc , golden oval eggs  llc , greenwood village  co , iowa  cooperative
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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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