AMENDED AND RESTATED
CREDIT AGREEMENT
among
NORTHLAND CRANBERRIES, INC.,
VARIOUS FINANCIAL INSTITUTIONS
and
U.S. BANK NATIONAL ASSOCIATION
as Agent
Dated as of November 6, 2001
NORTHLAND CRANBERRIES, INC.
AMENDED AND RESTATED
CREDIT AGREEMENT
U.S. Bank National Association, as Agent
Minneapolis, Minnesota
and
The Financial Institutions Identified Herein
Gentlemen:
Northland Cranberries, Inc. ("the Company"), the undersigned financial
institutions (together with their respective successors and assigns,
collectively, the "Banks"), and the Other Lenders entered into a Credit
Agreement dated as of March 15, 1999 (said Credit Agreement, as amended from
time to time prior to the date hereof, the "Original Credit Agreement").
Simultaneous with the transactions contemplated hereby, the Banks have entered
into the Assignment, Assumption and Release Agreement and the Other Lenders have
entered into the Exiting Bank Agreement pursuant to which the Banks and the
Other Lenders have transferred to Sun Northland, LLC a percentage of their
Revolving Credit Loans (as defined in the Original Credit Agreement) and L/C
participations, interest accrued thereon and certain collateral securing such
Revolving Credit Loans and L/C participations. Sun Northland, LLC has entered
into an Assignment Agreement with the Company (the "Assignment Agreement")
pursuant to which Sun Northland, LLC has agreed to assign all rights received
under the Assignment, Assumption and Release Agreement and the Exiting Bank
Agreement to the Company and the same will thereupon be cancelled and discharged
and will no longer be obligations or liabilities of the Company under the
Original Credit Agreement. The Banks have retained Revolving Credit Loans in the
aggregate principal amount of $25,714,000 and certain collateral securing the
same. The Company and the Banks desire to amend and restate the Original Credit
Agreement to set forth the terms and conditions under which the Banks will
continue to advance the principal amount of $25,714,000 to the Company.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned thereto in Section 9, below.
ARTICLE I
THE CREDIT
1.1. Conversion to Term Loan. As of the date hereof, the outstanding
principal amount of the Revolving Credit Loans retained by the Banks under the
Original Credit Agreement is $25,714,000. On the Effective Date, this
$25,714,000 in Revolving Credit Loans shall be converted into a new term loan
(the "Term Loan") in the initial principal amount $25,714,000. Each Bank's pro
rata share of the Term Loan shall be the amount set forth below such Bank's name
on the signature pages hereof. The Term Loan shall be evidenced by promissory
notes to be executed and delivered by the Company to the Banks on the Effective
Date, the form of which is attached hereto and made a part hereof as Exhibit 1.1
(the "Term Note(s)"), shall bear interest as specified in Section 2.1 hereof and
shall be repayable as set forth in Article III hereof.
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1.2. Release of Rights. Each Bank agrees that, as of the Effective Date
and receipt of the consideration specified in the Assignment, Assumption and
Release Agreement, it shall have no rights or claims against the Company, any of
its Subsidiaries or any of their shareholders, officers, employees, directors or
advisors (collectively, the "Releasees") with respect to the Original Credit
Agreement or any document executed in connection therewith or any transaction
relating thereto and hereby waives its rights to sue, make any claim or take any
action against any Releasee with respect to any right, claim or liability
occurring under the Original Credit Agreement or any transaction relating
thereto that arose or occurred prior to the Effective Date; provided, however,
that it is specifically acknowledged and agreed that nothing contained herein
shall be deemed to be a release of, or otherwise deemed to limit the Banks'
rights under, this Agreement and the Loan Documents executed in connection
herewith.
ARTICLE II
INTEREST
2.1. Interest.
(a) Rate of Interest. Interest shall accrue on the principal amount
of the Term Loan outstanding at the end of each day at a fluctuating rate
per annum equal to one percent (1.0%) plus the Base Rate as in effect from
time to time.
(b) Default Rate of Interest. At the option of Agent or Required
Banks, upon the occurrence and during the continuation of an Event of
Default, the principal amount of the Term Loan shall bear interest at a
rate per annum equal to two percent (2.0%) plus the interest rate
otherwise applicable thereto (the "Default Rate").
(c) Maximum Interest. In no event whatsoever shall the aggregate of
all amounts deemed interest hereunder or under the Term Notes and charged
or collected pursuant to the terms of this Agreement or pursuant to the
Term Notes exceed the highest rate permissible under any law which a court
of competent jurisdiction shall, in a final determination, deem applicable
hereto. If any provisions of this Agreement or the Term Notes are in
contravention of any such law, such provisions shall be deemed amended to
conform thereto.
2.2. Computation. All interest on the indebtedness evidenced by the Term
Notes and all fees, charges and commissions due hereunder shall be computed on
the basis of a year of three hundred sixty (360) days for the actual number of
days elapsed.
2.3. Taxes and Increased Costs. With respect to this Agreement and the
Term Loan, if any Bank shall determine in good faith that any change after the
date hereof in any applicable law, treaty, regulation or guideline (including,
without limitation, Regulation D of the Board of Governors of the Federal
Reserve System) or any new law, treaty, regulation or guideline, or any
interpretation of any of the foregoing by any governmental authority charged
with the administration thereof or any central bank or other fiscal, monetary or
other authority having jurisdiction over such Bank or its lending branch or the
Term Loan contemplated by this Agreement (whether or not having the force of
law) shall:
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(a) impose, increase, or deem applicable any reserve, special
deposit or similar requirement against assets held by, or deposits in or
for the account of, or loans by, or any other acquisition of funds or
disbursements by, such Bank which is not in any instance already accounted
for in computing the interest rate applicable to any such Term Note;
(b) subject such Bank or any Term Note to any tax (including,
without limitation, any United States of America interest equalization tax
or similar tax however named applicable to the acquisition or holding of
debt obligations and any interest or penalties with respect thereto),
duty, charge, stamp tax, fee, deduction or withholding in respect of this
Agreement or any Term Note, except such taxes as may be measured by the
overall net income or gross receipts of such Bank or its lending branches
and imposed by the jurisdiction, or any political subdivision or taxing
authority thereof, in which such Bank's principal executive office or its
lending branch is located;
(c) change the basis of taxation of payments of principal or
interest due from the Company to such Bank hereunder under a Term Note
(other than by a change in taxation of the overall net income or gross
receipts of such Bank); or
(d) impose on such Bank any penalty with respect to the foregoing or
any other condition regarding this Agreement or any Term Note;
and such Bank shall determine that the result of any of the foregoing is to
increase the cost (whether by incurring a cost or adding to a cost) to such Bank
of creating or maintaining any Term Note or to reduce the amount of principal or
interest received or receivable by such Bank (without benefit of, or credit for,
any prorations, exemption, credits or other offsets available under any such
laws, treaties, regulations, guidelines or interpretations thereof), then the
Company shall pay on demand to such Bank from time to time as specified by such
Bank such additional amounts as such Bank shall reasonably determine are
sufficient to compensate and indemnify it for such increased cost or reduced
amount; provided, however, that (i) such Bank shall promptly notify the Company
of an event which might cause it to seek compensation, and the Company shall be
obligated to pay only such compensation which is incurred or which arises after
the date sixty (60) days prior to the date such notice is given, and (ii) the
Company shall have no obligation to pay any amount that would otherwise be
payable under this Section solely as a result of such Bank being in a regulatory
classification that is lower than such Bank's regulatory classification on the
date of this Agreement. If such Bank makes such a claim for compensation, it
shall provide to the Company a written explanation of the circumstances giving
rise to such claim and a certificate setting forth the computation of the
increased cost or reduced amount as a result of any event mentioned herein in
reasonable detail and such certificate shall be conclusive if reasonably
determined.
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ARTICLE III
FEES, PAYMENTS, REDUCTIONS AND APPLICATIONS
3.1. Payments. The Term Loan shall be payable as follows:
(a) Principal. The principal balance of the Term Loan shall be
payable in installments as follows:
(i) On the one (1) year anniversary of the Effective Date, an
installment in the amount of $1,700,000 shall be paid;
(ii) Commencing on December 1, 2002 and continuing on the
first day of each month thereafter until and including October 1,
2006, installments in an amount equal to the Monthly Installment
Amount in effect on the payment date shall be paid; and
(iii) The remaining outstanding principal balance, and all
interest accrued thereon, shall be due and payable in full on
November 1, 2006.
Principal payable on account of the Term Loan shall be payable by the
Company to Agent for the ratable benefit of the Banks.
(b) Interest. Interest accrued on the Term Loan shall be payable by
the Company to Agent for the ratable benefit of the Banks upon the first
calendar day of each month (for the immediately preceding month), computed
through the last calendar day of the preceding month.
The outstanding principal and interest accrued under the Term Note may become,
or may be declared, immediately due and payable upon an Event of Default as
provided in Article VIII hereof.
3.2. Voluntary Prepayments. Subject to the further provisions of this
Section 3.2, the Company shall have the privilege of prepaying the Term Notes in
whole or in part (but if in part then in an aggregate minimum amount of Fifty
Thousand Dollars ($50,000)) at any time upon notice to the Agent (such notices,
if received subsequent to 11:00 a.m. (Minneapolis time) on a given day, to be
treated as though received at the opening of business on the next Business Day),
by paying to the Agent (i) the principal amount to be prepaid, and (ii) if such
prepayment prepays the Term Notes in full, accrued interest thereon to the date
fixed for prepayment. Any such optional prepayment shall be applied to
installments of principal due under the Term Notes in the inverse order of their
installments.
3.3. Mandatory Prepayments.
(a) Sale of Certain Collateral. If the Company at any time or times
sells, transfers, conveys or otherwise disposes of any of the Liquidating
Assets, the Company shall pay the Agent, for the ratable benefit of the
Banks, within seven (7) days after such disposition and as a mandatory
prepayment of the Term Loan, a sum equal to the
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proceeds received by the Company from such disposition net of fees and
expenses actually incurred in connection therewith. Notwithstanding the
foregoing, if prior to the date on which the Company disposes of
Liquidating Assets associated with the Bridgeton, New Jersey facility, the
Company has paid the outstanding property taxes, interest and penalties as
contemplated pursuant to Section 7.18 hereof, the Company shall be
entitled to reduce the proceeds payable to the Bank upon the sale of such
Liquidating Assets by the amount of such property taxes so paid by the
Company. The applicable prepayments under this Section 3.3(a) shall be
applied to installments of principal due under the Term Notes in the
inverse order of their installments.
(b) Cliffstar Note. After the Company has received Adjusted
Cliffstar Payments aggregating Ten Million Dollars ($10,000,000), the
Company shall thereafter, within one (1) Business Day after receipt by the
Company of each Cliffstar Payment, pay the Agent for the ratable benefit
of the Banks, as a mandatory prepayment of the Term Loan, a sum equal to
the amount of the Adjusted Cliffstar Payment then received by the Company.
The applicable prepayments shall be applied to installments of principal
due under the Term Notes in the inverse order of their installments.
3.4. Agent Fee. On the Effective Date and on each annual anniversary
thereof during which this Agreement is in effect, the Company shall pay to Agent
an Agent fee in an amount equal to one-quarter percentage (.25%) of the
aggregate principal amount of the Term Notes outstanding as of such payment
date.
3.5. Place and Application. All payments of principal, interest, fees and
other amounts due hereunder shall be made to the Agent at its office at 601
Second Avenue South, Minneapolis, Minnesota (or at such other place within the
continental United States of America as the Agent may specify) in immediately
available and freely transferable funds at the place of payment. All such
payments shall be made without setoff or counterclaim and without reduction for,
and free from, any and all present or future taxes, levies, imposts, duties,
fees, charges, deductions, withholdings, restrictions or conditions of any
nature imposed by any government or political subdivision or taxing authority
thereof. Payments received by the Agent after 11:00 a.m. (Minneapolis time)
shall be deemed received as of the opening of business on the next Business Day.
3.6. Capital Adequacy. If any Bank shall determine that the adoption
after the date hereof of any applicable law, rule or regulation regarding
capital adequacy, or any change in any existing law, rule or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the interpretation or
administration thereof or compliance by such Bank (or its lending office) with
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on such Bank's capital as a
consequence of its obligations hereunder or credit extended by it hereunder to a
level below that which such Bank could have achieved but for such adoption,
change or compliance (taking into consideration such Bank's policies with
respect to capital adequacy) by an amount deemed by such Bank to be material,
then from time to time as specified by such Bank the Company shall pay such
additional amount or amounts as will compensate such Bank for such reduction;
provided, however, that (i) such Bank shall promptly
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notify the Company of an event which might cause it to seek compensation, and
the Company shall be obligated to pay only such compensation which is incurred
or which arises after the date sixty (60) days prior to the date such notice is
given, and (ii) the Company shall have no obligation to pay any amount that
would otherwise be payable under this Section solely as a result of such Bank
being in a regulatory classification that is lower than such Bank's regulatory
classification on the date of this Agreement. A certificate of such Bank
claiming compensation under this Section 3.5 and setting forth the additional
amount or amounts to be paid to it hereunder in reasonable detail shall be
conclusive if reasonably determined. In determining such amount, such Bank may
use any reasonable averaging and attribution methods.
ARTICLE IV
THE COLLATERAL
4.1. Collateral. The Term Notes and the other obligations of the Company
hereunder shall be secured by (i) valid and perfected first priority liens
(subject to any Permitted Liens) on the real properties of the Company described
on Schedule 4.1(a) attached hereto and all fixtures thereto pursuant to the
terms of Amended and Restated Mortgages of even date herewith by the Company in
favor of Agent for itself and for the benefit of the Banks, as the same be
further amended and restated from time to time; (ii) valid and perfected first
priority liens (subject only to any Permitted Liens) on the equipment described
on Schedule 4.1(b) attached hereto and any equipment now or hereafter located on
the real property described on Schedule 4.1(a) attached hereto and on the farm
products and crops grown or to be grown on the real property described on
Schedule 4.1(a) attached hereto and the Company's interest in the Environmental
Indemnity Agreement with Michael A. Morello pursuant to the terms of an Amended
and Restated Security Agreement of even date herewith by and between the Company
and the Agent for itself and for the benefit of the Banks, as the same may be
further amended or restated from time to time; and (iii) a valid and perfected
priority lien (subject only to a prior lien granted to Foothill Capital under
the Foothill Agreement which shall be limited to the extent set forth in the
Intercreditor Agreement) in the Cliffstar Note and certain amounts payable to
the Company under the Cliffstar Purchase Agreement pursuant to the terms of an
Amended and Restated Collateral Pledge Agreement by the Company in favor of
Agent for itself and for the benefit of the Banks and the Amended and Restated
Security Agreement described above, as the same may be further amended or
restated from time to time.
4.2. Further Assurances. The Company agrees that it will from time to
time at the request of the Agent or the Banks execute and deliver such documents
and do such acts and things as the Agent or the Banks may reasonably request in
order to provide for or perfect such liens.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into the Agreement and the
Assignment, Assumption and Release Agreement, the Company represents and
warrants to the Agent and the Banks on the Effective Date as follows:
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5.1. Organization; Authority; Non-Contravention. Each of the Company and
its Subsidiaries is a corporation duly organized and validly existing under the
laws of the jurisdiction of its incorporation, has full and adequate power to
carry on its business as now conducted, is duly licensed or qualified in all
jurisdictions wherein the nature of its activities requires such licensing or
qualifying and where the failure to be so licensed or qualified would have a
material adverse effect on the Properties, business or operations of the Company
and its Subsidiaries taken as a whole. The Company has full right and authority
to enter into the Loan Documents, to encumber its assets as collateral security
therefor, and to perform each and all of the matters and things herein and
therein provided for and to make the borrowing herein provided for and to issue
the Term Notes in evidence thereof. This Agreement does not, nor does the
performance or observance by the Company of any of the matters or things
provided for in the Loan Documents, contravene any provision of law or any
charter or by-law provision or any indenture or material agreement of or
affecting the Company or any of its Properties.
5.2. Subsidiaries. The Company has no Subsidiaries except Wildhawk, Inc.,
a Wisconsin corporation, W.S.C. Water Management Corp., a Wisconsin corporation,
Northland Cranberries Sales Corp., a Virgin Islands corporation, Northland
Insurance Center Inc., a Wisconsin corporation, NCI Foods, LLC, a Wisconsin
limited liability company, Potomac Foods of Virginia, Inc., and PVFA Acquisition
Corp., a Virginia corporation.
5.3. Financial Statements. The Company has heretofore delivered to the
Agent a copy of the audit report of the Company and its Subsidiaries as of
August 31, 2000, of the Company and unaudited consolidated financial statements
(including a balance sheet and profit and loss statement) and its Subsidiaries
as of, and for the period ending August 31, 2001. Such consolidated financial
statements have been prepared in accordance with generally accepted accounting
principles on a basis consistent, except as otherwise noted therein and except
that the interim consolidated financial statements are subject to audit and
year-end adjustments and for the absence of footnotes, with that of the previous
fiscal year or period and fairly reflect the financial position of the Company
as of the dates thereof, and the results of their operations for the periods
covered thereby. The Company has no significant contingent liabilities other
than as disclosed to the Agent or as indicated on said consolidated financial
statements and since said date of August 31, 2001 and, except as disclosed on
Schedule 5.3, there has been no Material Adverse Change of the Company or its
Subsidiaries taken as a whole.
5.4. Litigation; Taxes; Consents. Except as disclosed on Schedule 5.4,
there is no litigation or governmental proceeding pending, nor to the knowledge
of the Company, threatened against the Company or any Subsidiary which if
adversely determined would result in any material adverse change in the
Properties, business or operations of the Company and its Subsidiaries taken as
a whole. All United States of America federal income tax returns for the Company
and its Subsidiaries required to be filed have been filed on a timely basis
(after giving effect to any extensions), and all amounts required to be paid as
shown by said returns have been paid. There are no pending or threatened
objections to or controversies in respect of the United States of America
federal income tax returns of the Company for any fiscal year which, if
adversely determined, would have a material adverse effect on the Company's
condition, financial or otherwise. No authorization, consent, license, exemption
or filing or registration with any court or governmental department, agency or
instrumentality, is or will be necessary to
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the valid execution, delivery or performance by the Company of the Loan
Documents to which they are a party, except for filings required to perfect the
Agent's liens in the Collateral.
5.5. Regulation U. Neither the Company nor any Subsidiary is engaged in
the business of extending credit for the purpose of purchasing or carrying
"margin stock" (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System) and no part of the proceeds of any loan hereunder
will be used to purchase or carry any margin stock or to extend credit to others
for such a purpose.
5.6. No Default. No Event of Default is existing under this Agreement.
5.7. ERISA. Each of the Company and its Subsidiaries is in compliance in
all material respects with ERISA to the extent applicable to it and has received
no notice to the contrary from the PBGC or any other governmental entity or
agency.
5.8. Security Interests. After giving effect to the transactions
contemplated by this Agreement, the Sun Northland Purchase Agreement, the
Assignment, Assumption and Release Agreement, the Exiting Bank Agreement and the
Foothill Agreement, there are no security interests, liens or encumbrances on
any of the Collateral except such as are permitted by Section 7.11 of this
Agreement.
5.9. Accurate Information. No information, exhibit or report furnished by
the Company or any Subsidiary to the Agent or any Bank in connection with the
negotiation of the Loan Documents contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which made.
The financial projections furnished by the Company to the Agent and the Banks
contain to the Company's knowledge and belief, reasonable projections as of the
date thereof of future results of consolidated operations and financial position
of the Company after giving effect to the transactions contemplated by this
Agreement, the Sun Northland Purchase Agreement, the Assignment, Assumption and
Release Agreement, the Exiting Bank Agreement and the Foothill Agreement.
5.10. Enforceability. This Agreement and the other Loan Documents are
legal, valid and binding agreements of the Company, enforceable against it in
accordance with their terms, except as may be limited by (a) bankruptcy,
insolvency, reorganization, fraudulent transfer, moratorium or other similar
laws or judicial decisions for the relief of debtors or the limitation of
creditors' rights generally; and (b) any equitable principles relating to or
limiting the rights of creditors generally.
5.11. No Default Under Other Agreements. After giving effect to the
transactions contemplated by this Agreement, the Assignment, Assumption and
Release Agreement, the Exiting Bank Agreement and the Foothill Agreement, and
except with respect to payment defaults under the Nantucket and Cranberry Hill
leases, neither the Company nor any Subsidiary is in default with respect to any
note, indenture, loan agreement, mortgage, lease, deed, or other agreement to
which it is a party or by which it or its Property is bound, which default would
reasonably be expected to materially and adversely affect the Collateral, the
repayment of the indebtedness, obligations and liabilities under the Loan
Documents, the Agent's and the Banks'
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rights under the Loan Documents or the Property, business, operations or
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole.
5.12. Status Under Certain Laws. Neither the Company nor any of its
Subsidiaries is an "investment company" or a person directly or indirectly
controlled by or acting on behalf of an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or a "holding company," or a
"subsidiary company" of a "holding company," or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company," within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
5.13. Compliance with Laws. Except as set forth in Schedule 5.13 with
respect to certain outstanding environmental matters, the Company and its
Subsidiaries each are in compliance with the requirements of all federal, state
and local laws, rules and regulations applicable to or pertaining to their
Properties or business operations (including, without limitation, the
Occupational Safety and Health Act of 1970, the Americans with Disabilities Act
of 1990, and laws and regulations establishing quality criteria and standards
for air, water, land and toxic or hazardous wastes and substances),
non-compliance with which would reasonably be expected to have a material
adverse effect on the financial condition, Properties, business or operations of
the Company and its Subsidiaries taken as a whole. Except as set forth in
Schedule 5.13 with respect to certain outstanding environmental matters, neither
the Company nor any Subsidiary has received written notice to the effect that
its operations are not in compliance with any of the requirements of applicable
federal, state or local environmental, health and safety statutes and
regulations or, to the Company's knowledge, are the subject of any governmental
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
noncompliance or remedial action would have a material adverse effect on the
financial condition, Properties, business or operations of the Company and its
Subsidiaries taken as a whole.
5.14. Proforma Balance Sheet. After giving effect to the transactions
contemplated by this Agreement, the Sun Northland Purchase Agreement, the
Assignment, Assumption and Release Agreement, the Exiting Bank Agreement and the
Foothill Agreement, the proforma balance sheet of the Company will be
substantially in the form of Schedule 5.14 attached hereto.
5.15. Bank Stock. With respect to the 7,618,987 shares of the Class A
common stock of the Company to be issued to the Banks pursuant to the
Assignment, Assumption and Release Agreement (the "Bank Stock"), the Company
hereby warrants and represents as follows:
(a) All action on the part of the Company, its Board of Directors
and its shareholders necessary for the authorization, issuance and
delivery of the Bank Stock has been taken.
(b) The Bank Stock will, when issued in accordance with the
Assignment, Assumption and Release Agreement, be duly and validly issued,
fully paid and non-assessable (except as provided in Section
180.0622(2)(b) of the Wisconsin Statues) and free and clear of all liens
and restrictions on transfer other than as provided in the Stockholders
Agreement.
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(c) All consents, approvals, qualifications, orders or
authorizations of, or filings with, any governmental authority, and all
consents under any contracts, agreements or instruments by which the
Company is bound or to which it is subject, and required in connection
with its valid issuance and delivery of the Bank Stock, have been obtained
or made.
5.16. Capitalization. After giving effect to the transactions contemplated
by the Sun Northland Purchase Agreement, the Foothill Agreement, the Exiting
Bank Agreement and the Assignment, Assumption and Release Agreement, the Company
will have: (i) 49,827,788 shares of $.01 par value Class A common stock issued
and outstanding, (ii) 1,668,885 shares of $.01 par value Class A Preferred Stock
issued and outstanding, and (iii) 100 shares of $.01 par value Class B Preferred
Stock issued and outstanding, all of which are owned of record and beneficially
by the persons and in the amounts set forth in Schedule 5.16. Except as set
forth in Schedule 5.16 and in the Stockholders Agreement, there are no
outstanding preemptive, conversion, voting or other rights, options, warrants or
agreements granted or issued by or binding upon the Company for the purchase or
acquisition of any of its shares or other equity interests or otherwise
providing for the "put" or "call" of any of its shares or other equity
interests. Except as set forth in Schedule 5.16, there are no outstanding
options to purchase, or any rights or warrants to subscribe for, or any
commitments or agreements to issue or sell, or any securities or obligations
convertible into, shares of the capital stock of the Company.
5.17. Acknowledgment of Cancellation and Discharge of Indebtedness. After
giving effect to the transactions contemplated by the Exiting Bank Agreement and
the Assignment, Assumption and Release Agreement, Sun Northland, LLC will have
acquired rights in and to a percentage of the Revolving Credit Loans and L/C
participations under the Original Credit Agreement, interest accrued thereon and
collateral securing such Revolving Credit Loans and L/C participations. After
giving effect to the transactions contemplated by the Sun Northland Purchase
Agreement and the Assignment Agreement, (i) the Company will have acquired all
rights in and to the Revolving Credit Loans and L/C participations, interest
accrued thereon and collateral securing such Revolving Credit Loans and L/C
participations transferred to Sun Northland, LLC under the Assignment,
Assumption and Release Agreement and the Exiting Bank Agreement and such
obligations will have been fully cancelled and discharged and no longer
constitute liabilities or obligations of the Company under the Original Credit
Agreement, and (ii) the Company has no rights as a lender or a "Bank" under the
Original Credit Agreement with respect to the rights assigned under the
Assignment, Assumption and Release Agreement and the Exiting Bank Agreement.
ARTICLE VI
CONDITIONS PRECEDENT
This Agreement shall not become effective unless and until the following
conditions precedent have been satisfied:
6.1. Credit Agreement. The Company, the Agent and each of the Banks which
are a party hereto as of the date hereof shall have executed this Credit
Agreement (such execution may be in several counterparts and the several parties
hereto may execute on separate counterparts).
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6.2. Other Loan Documents. The Agent shall have received the following
(each to be properly executed and completed) and the same shall have been
approved as to form and substance by the Agent:
(a) the Term Notes;
(b) each of the Collateral Documents described in Section 4.1,
hereof;
(c) commitments for mortgagees' policies of title insurance for each
of the real properties of the Company listed on Schedule 4.1(a) attached
hereto in minimum amounts acceptable to the Agent;
(d) such mortgages, deeds of trust, assignments and financing
statements as the Agent may require with respect to the Collateral;
(e) copies, certified by the Secretary of the Company, of (i) the
Articles of Incorporation and By-laws of the Company, and (ii) resolutions
of the Board of Directors of the Company authorizing the issuance,
execution and delivery of this Agreement and the other Loan Documents and
the Bank Stock, and a certification of the names and titles of the
representatives of the Company authorized to sign this Agreement and the
other Loan Documents, together with true signatures of such
representatives; and
(f) copies (executed or certified, as may be appropriate) of all
legal documents or proceedings taken in connection with the execution and
delivery of this Credit Agreement and the other instruments and documents
contemplated hereby to the extent the Agent or its counsel may reasonably
request.
6.3. Opinion Letter. Legal matters incident to the execution and delivery
of this Credit Agreement and the other instruments and documents contemplated
hereby shall be satisfactory to the Agent and its counsel; and the Agent shall
have received the favorable written opinion of counsel for the Company in form
and substance satisfactory to the Agent and its counsel.
6.4. Representations True and Correct. Each of the representations and
warranties set forth in Section 5 of this Agreement and in the other Loan
Documents shall be true and correct in all material respects.
6.5. Insurance. The Company shall have purchased all insurance required by
the Loan Documents and the Agent shall have received certificates of insurance
naming the Agent as lender's loss payee and additional insured with respect to
the Collateral for the insurance policies required pursuant to the terms of the
Loan Documents, and evidence of the payment of all premiums therefor.
6.6. Good Standing Certificates. The Agent shall have received good
standing certificates or certificates of status, as the case may be, certified
by the appropriate secretaries of state or other appropriate parties relating to
the Company for each of the states in which the Company is incorporated or
qualified to do business.
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6.7. Payment of Outstanding Fees/Expenses. The Company shall have paid all
outstanding reasonable fees and expenses incurred by Agent and Banks on or prior
to the date hereof including, without limitation reasonable fees and expenses
incurred under the Original Credit Agreement and all reasonable costs and
expenses of Agent and Banks in connection with the negotiation, preparation,
execution, delivery and recording of this Agreement, the Term Notes, the
Collateral Documents and the other instruments and documents to be delivered
hereunder or in connection herewith.
6.8. No Default. The Company shall be in full compliance with all of the
terms and conditions of this Credit Agreement and no Event of Default or Default
shall have occurred and be continuing thereunder or shall result after giving
effect to this Credit Agreement.
6.9. Foothill Agreement. The transactions contemplated by the Foothill
Agreement shall have been consummated simultaneously with the closing of the
transactions contemplated hereby.
6.10. Sun Northland Purchase Agreement; Assignment Agreement. The
transactions contemplated by Sun Northland Purchase Agreement and the Assignment
Agreement shall have been consummated simultaneously with the closing of the
transactions contemplated hereby.
6.11. Assignment, Assumption and Release Agreement; Exiting Bank
Agreement. The Banks, LaSalle Bank National Association and Sun Northland LLC
shall have executed the Assignment, Assumption and Release Agreement and the
transactions contemplated thereby shall have been consummated simultaneously
with the closing of the transactions contemplated hereby including, without
limitation, the delivery of the cash and the Bank Stock contemplated thereunder.
The Other Lenders and Sun Northland LLC shall have executed the Exiting Bank
Agreement and the transactions contemplated thereby shall have been consummated
simultaneously with the closing of the transactions contemplated hereby.
6.12. Registration Agreement; Stockholders Agreement. The Company, the
Banks, Sun Northland, LLC and Foothill Capital Corporation shall have executed a
Stockholders Agreement and Registration Agreement in a form acceptable to the
Banks.
6.13. Intercreditor Agreement. Foothill Capital Corporation, the Company
and the Banks shall have entered into an Intercreditor Agreement setting forth
the terms and conditions under which Foothill Capital Corporation will take a
prior lien position in the Cliffstar Note until such time as the Company has
received Adjusted Cliffstar Payments aggregating $10,000,000 and then shall
release its lien on the Cliffstar Note, in a form acceptable to the Banks and
Foothill Capital Corporation (the "Intercreditor Agreement").
6.14. Copies of Agreements. The Company shall have received copies of the
Sun Northland Purchase Agreement, the Foothill Agreement, the Exiting Bank
Agreement, the Assignment Agreement and the Equitable Agreement and all
agreements executed in connection therewith, duly executed by all parties
thereto and certified as true, complete and correct copies by the Secretary of
the Company.
6.15. Taxes. The Company shall have provided to the Agent evidence
reasonably satisfactory to the Agent that all taxes upon the Collateral
(including, without limitation, real
13
property taxes) have been paid in full except for unpaid real estate taxes on
the Bridgeton, New Jersey property in the amount of $320,000 plus interest and
penalties (which are estimated at $70,000).
6.16. Agent Fee. The Company shall have paid Agent the Agent fee
contemplated under Section 3.4 hereof which is payable on the Effective Date.
The date on which all of the conditions precedent listed above are either
satisfied or waived is hereinafter referred to as the "Effective Date."
ARTICLE VII
COMPANY COVENANTS
The Company agrees that, so long as any Term Note is outstanding, except
to the extent compliance in any case or cases is waived in writing by the
Required Banks:
7.1. Maintenance of Property. The Company shall and shall cause each of
its Subsidiaries to keep and maintain all of their Properties necessary or
useful in their businesses in good condition, and make all necessary renewals,
replacements, additions, betterments and improvements thereto; provided,
however, that nothing in this sentence shall prevent the Company or any
Subsidiary from discontinuing the operation and maintenance of any of their
Properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of their business and not disadvantageous in any material respect
to the Banks as holders of the Term Notes. In addition to the foregoing, the
Company shall keep, maintain and operate all cranberry bogs constituting
Collateral on a basis consistent with past practices including, without
limitation, the cultivation and harvesting of cranberries on such bogs on a
basis consistent with past practice.
7.2. Taxes. The Company shall and shall cause each of its Subsidiaries to
duly pay and discharge all taxes, rates, assessments, fees and governmental
charges upon or against the Company or any Subsidiary or against their
respective Properties in each case before the same becomes delinquent and before
penalties accrue thereon unless and to the extent that the same is being
contested in good faith and by appropriate proceedings.
7.3. Maintenance of Insurance. The Company shall and shall cause each of
its Subsidiaries to maintain insurance with insurers recognized as financially
sound and reputable by prudent business persons in such forms and amounts and
against such risks as is usually carried by companies engaged in similar
business and owning similar Properties in the same general areas in which the
Company and the Subsidiaries operate. The Agent, for itself and the benefit of
the Banks, shall be named as lender's loss payee and mortgagee under any
insurance policies which relate to the Collateral and additional insured with
respect to the Company's and its Subsidiaries' liability insurance policies. The
Company shall, at the Agent's request, provide copies to the Agent of all
insurance policies and other material related thereto maintained by the Company
or any Subsidiary from time to time with respect to the Collateral and liability
insurance policies.
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7.4. Financial Reports. The Company will maintain a standard and modern
system of accounting in accordance with sound accounting practice and will
furnish with reasonable promptness to the Agent and its duly authorized
representatives such information respecting the business and financial condition
of the Company and its Subsidiaries as may be reasonably requested and, without
any request, will furnish to the Agent:
(a) as soon as available, and in any event within thirty (30) days
after the close of each monthly fiscal period of the Company (or, in the
case of the November, 2001 monthly financials and in the case of any month
which constitutes the last month of any fiscal quarter, forty-five (45)
days after the close of such month), an unaudited, consolidated balance
sheet and consolidated statements of income of the Company as at the end
of and for such month and for the year to date period then ended, in
reasonable detail, and, in the case of the quarterly financial statements,
stating in comparative form the figures for the corresponding date and
periods in the previous fiscal year, all prepared in accordance with
generally accepted accounting principles, subject to year-end audit
adjustments and the absence of footnotes; and
(b) as soon as available, and in any event within forty five (45)
days after the close of each quarterly fiscal period of the Company a copy
of the Quarterly Report on Form 10-Q filed with the Securities and
Exchange Commission (the "SEC"); and
(c) as soon as available, and in any event within one hundred twenty
(120) days after the close of each fiscal year, a copy of the audit report
for such year and accompanying consolidated financial statements,
including balance sheet, reconciliation of change in stockholders' equity,
profit and loss statement and statement of source and application of funds
for the Company and its Subsidiaries showing in comparative form the
figures for the previous fiscal year of the Company, all in reasonable
detail, prepared and certified by Deloitte & Touche or other independent
public accountants of nationally recognized standing selected by the
Company and reasonably acceptable to the Agent; and
(d) each of the consolidated financial statements furnished to the
Agent pursuant to paragraphs (a), (b) and (c) above shall be accompanied
by a Compliance Certificate in the form of Exhibit 7.4 attached hereto
signed by its Chief Financial Officer; and
(e) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which the
Company shall have filed with the SEC or any governmental agency
substituted therefor, or any national securities exchange, including
copies of the Company's Annual Report on Form 10-K, including financial
statements audited by Deloitte & Touche or other independent public
accountants of nationally recognized standing selected by the Company and
reasonably acceptable to the Agent; and
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all consolidated financial statements,
reports (including the Company's Annual Report to Shareholders) and proxy
statements so mailed; and
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(g) as soon as available, and in any event within thirty (30) days
prior to the end of each fiscal year of the Company, a copy of the
Company's consolidated business plan and operating projections for the
following fiscal year, such plan to be in reasonable detail prepared by
the Company and in form reasonably satisfactory to the Agent; and
(h) as soon as available, and in any event within thirty (30) days
after the close of each monthly fiscal period of the Company, a statement
of sources and uses of funds by the Company for such month in a form
reasonably acceptable to Agent; and
(i) from time to time, as reasonably requested by Agent, reports
regarding the accounts receivable and inventory of the Company as
reasonably requested by Agent but in any event no different than similar
reports then being provided by the Company to Foothill Capital Corporation
under the Foothill Agreement.
7.5. Inspection. The Company shall permit the Agent, by its
representatives and agents, and during an Event of Default, any of the Banks, to
inspect any of its Properties and those of the Subsidiaries, corporate books and
financial records of the Company, to examine and make copies of the books of
accounts and other financial records of the Company, and to discuss the affairs,
finances and accounts of the Company with, and to be advised as to the same by,
its officers at such reasonable times and intervals as the Agent (or any of the
Banks, after an Event of Default) may designate upon reasonable advance notice
to the Company. Notwithstanding the foregoing, as long as there is no Event of
Default, the Company shall not be obligated to permit Agent to make more than
four (4) of such inspections in any calendar year (but shall allow unlimited
inspections during an Event of Default). The Company shall only be obligated to
pay the fees and expenses incurred by Agent or any Bank in connection with
inspections conducted pursuant to this Section 7.5 during an Event of Default.
7.6. Consolidation and Merger. Neither the Company nor any Subsidiary
will consolidate with or merge into any Person, without the prior written
consent of the Required Banks, unless in the case of a consolidation or merger
involving the Company or a Subsidiary (a) the Company or the Subsidiary, as the
case may be, is the surviving entity, (b) the other party to such transaction is
in the same or a related line of business as the Company, and (c) both before
and after giving effect to such merger or consolidation, no Default or Event of
Default shall have occurred and be continuing, and except that any Subsidiary
may consolidate with or merge into the Company (provided that the Company shall
be the continuing or surviving corporation) and except for any Permitted
Acquisitions.
7.7. Transactions with Affiliates. Except for fees payable to Sun Capital
Partners Management LLC not to exceed $1,000,000 in any fiscal year under the
Management Services Agreement dated November 5, 2001, between the Company and
Sun Capital Partners Management, LLC as in effect on the Effective Date, and the
Company's guaranty of the obligations of Richard Teske to M&I Marshall & Ilsley
Bank in the principal amount of $1,000,000, the Company will not enter into any
transaction, including without limitation, the purchase, sale, lease or exchange
of any Property, or the rendering of any service, with any Affiliate of the
Company except in the ordinary course of and pursuant to the reasonable
requirements of the Company's business and upon fair and reasonable terms no
less favorable to the Company than would be obtained in a comparable
arm's-length transaction with a Person not
16
an Affiliate of the Company; provided that no payment shall be made to Sun
Capital Partners Management LLC under the foregoing Management Services
Agreement unless the Company is in compliance with Section 7.10 hereof both
before and after giving effect to such payment.
7.8. [Intentionally Deleted]
7.9. Interest Coverage Ratio. The Company shall maintain, (i) for the
twelve (12) month period ending February 28, 2003, an Interest Coverage Ratio of
not less than 1.2 to 1.0, and (ii) for each twelve (12) month period ending as
of the last day of each fiscal quarter thereafter, an Interest Coverage Ratio of
not less than 1.50 to 1.0.
7.10. Minimum EBITDA. The Company shall maintain EBITDA of not less than
the required amount set forth in the following table for the applicable period
set forth opposite thereto:
Applicable Amount Applicable Period
$ (987,028) For the 3 month period ending January 31, 2002
$ 386,998 For the 4 month period ending February 28, 2002
$ (373,332) For the 5 month period ending March 31, 2002
$ (317,848) For the 6 month period ending April 30, 2002
$ (322,906) For the 7 month period ending May 31, 2002
$ (623,186) For the 8 month period ending June 30, 2002
$ 940,486 For the 9 month period ending July 31, 2002
$ 1,919,009 For the 10 month period ending August 31, 2002
$ 2,198,273 For the 11 month period ending September 30, 2002
$ 2,663,940 For the 12 month period ending October 31, 2002
$ 2,544,056 For the 12 month period ending November 30, 2002
$ 5,123,200 For the 12 month period ending December 31, 2002
$ 6,100,983 For the 12 month period ending January 31, 2003
$ 5,849,227 For the 12 month period ending February 28, 2003
$ 7,689,471 For the 12 month period ending March 31, 2003
$ 8,576,212 For the 12 month period ending April 30, 2003
$ 9,776,655 For the 12 month period ending May 31, 2003
$ 11,480,678 For the 12 month period ending June 30, 2003
$ 10,993,723 For the 12 month period ending July 31, 2003
$ 11,260,402 For the 12 month period ending August 31, 2003
$ 12,518,959 For the12 month period ending September 30, 2003
$ 12,600,000 For the 12 month period ending October 31, 2003 and
each rolling twelve month period (measured at the
end of each fiscal month) thereafter
7.11. Liens. Neither the Company nor any Subsidiary will pledge, mortgage
or otherwise encumber or subject to or permit to exist upon or be subjected to
any lien, charge or security interest of any kind (including any conditional
sale or other title retention agreement and any lease in the nature thereof
excluding operating leases), on any Collateral at any time owned
17
by the Company or any Subsidiary other than the following (all of the following
being hereinafter referred to as "Permitted Liens"):
(a) liens, pledges, mortgages, security interests, or other charges
granted to the Agent for the benefit of the Agent and the Banks;
(b) liens, pledges, mortgages, security interests or other charges
existing on real property or fixtures to the extent they secure
indebtedness incurred to finance the purchase or construction of
improvements;
(c) mortgages, pledges, security interests or other encumbrances
existing on the date hereof and disclosed in Schedule 7.11 attached
hereto;
(d) liens for taxes, assessments or governmental charges and liens
incident to construction, which are either not delinquent or are being
contested in good faith by appropriate proceedings which prevent
foreclosure of such liens and for which adequate reserves have been
provided, and easements, restrictions, minor title irregularities and
similar matters which have no adverse effect upon the ownership and use of
the affected Property by the Company or any Subsidiary;
(e) purchase money liens or the interest of lessors under
capitalized leases to the extent that such liens or security interests
secure only the payment of all or a part of the purchase price of the
property being acquired or purchased and do not extend to any other
property or secure any other obligations;
(f) the lien granted to Foothill Capital Corporation in the
Cliffstar Note and the Cliffstar Purchase Agreement to the limited extent
set forth in the Intercreditor Agreement; and
(g) with respect to liens described in the foregoing clauses (b),
(c) and (e), liens resulting from the refinancing of the related
indebtedness, provided that the indebtedness secured thereby shall not be
increased over the amount outstanding at the time of refinancing and the
liens shall not cover additional assets of the Company or any Subsidiary.
7.12. Distributions. The Company will not make any distributions or
declare or pay any dividends (in cash or other property, other than in common
stock of the Company) on, or purchase, acquire, redeem or retire any of the
Company's capital stock, of any class, whether now or hereafter outstanding,
provided that so long as (i) no Event of Default exists or has occurred and is
continuing, and (ii) Agent receives not less than ten (10) days' advance written
notice, the Company may redeem employee-owned stock of the Company in an
aggregate amount not to exceed $350,000 in any fiscal year upon such employee's
termination of employment or death. The Company will not make any
indemnification payment under Section 6 of the Sun Northland Purchase Agreement
except pursuant to a promissory note subordinated to the Banks in a form, and
with terms and conditions acceptable to, the Agent and any payment made by the
Company's insurers or otherwise on behalf of the Company shall be advanced back
to the Company pursuant to a Promissory Note subordinated to the Banks in a form
and with terms and conditions acceptable to the Agent.
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7.13. Investments, Loans, Advances and Acquisitions. Neither the Company
nor any Subsidiary will make or retain any investment (whether through the
purchase of stock, obligations or otherwise) in or make any loan or advance to,
any other Person or acquire substantially as an entirety the Property or
business of any other Person, other than:
(a) investments in certificates of deposit having a maturity of one
year or less issued by any of the Banks;
(b) investments, loans and advances in or to any existing Subsidiary
or Beaver Valley Cranberry Growers Association, provided that the
respective amounts thereof shall not exceed the amounts disclosed to the
Banks in the August 31, 2001 financial statements referred to in Section
5.3 hereof;
(c) travel advances, entertainment and moving expenses and directors
fees to officers, directors and employees of the Company or any Subsidiary
in the ordinary course of business;
(d) receivables arising in the ordinary course of the Company's and
the Subsidiaries' businesses;
(e) full faith and credit obligations of the United States of
America and securities the payment of principal of and interest on is
unconditionally guaranteed by the United States of America; provided that
all such obligations and securities shall have a maturity of one year or
less;
(f) acquisitions of Cranberry Businesses, provided, that such
acquisition has the effective written consent or prior approval of the
board of directors (or equivalent governing body) of the Person being
acquired;
(g) loans and advances to Wildhawk, Inc. in an aggregate principal
amount outstanding at any time not to exceed Five Hundred Thousand Dollars
($500,000);
(h) investments in entities engaged in the Cranberry Business (other
than a Permitted Acquisition which shall be governed by Section 7.13(f))
provided that the aggregate amount of such investments outstanding at any
one time does not exceed Five Million Dollars ($5,000,000); and
(i) other investments in an aggregate amount not to exceed Three
Million Dollars ($3,000,000) at any one time outstanding.
7.14. Sale of Property. Neither the Company nor any Subsidiary will sell,
lease, assign, transfer or otherwise dispose of (whether in one transaction or
in a series of transactions) any Collateral to any other Person; provided,
however, that so long as no Event of Default has occurred and is continuing,
this Section shall not prohibit:
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(a) sales of Liquidating Assets;
(b) sales of inventory (including crops and severed vines) in the
ordinary course of business; and
(c) sales or leases of surplus, obsolete or worn-out machinery and
equipment.
7.15. Notice of Suit or Adverse Change in Business. The Company shall, as
soon as possible, and in any event within five (5) Business Days after an
executive officer of the Company learns of the following, give written notice to
the Agent of (a) any material proceeding(s) being instituted by or against the
Company or any Subsidiary in any federal, state, local or foreign court or
before any commission or other regulatory body (federal, state, local or
foreign), (b) any Material Adverse Change, and (c) the occurrence of any Event
of Default hereunder or any event of default under, and as defined in, the
Foothill Agreement.
7.16. ERISA. The Company and each Subsidiary will promptly pay and
discharge all obligations and liabilities arising under ERISA of a character
which if unpaid or unperformed would result in the imposition of a lien against
any of their respective Properties and will promptly notify the Agent of (a) the
occurrence of any "reportable event" (as defined in ERISA) which might result in
the termination by the PBGC of any Plan, (b) receipt of any notice from the PBGC
of its intention to seek termination of any such Plan or appointment of a
trustee therefor, and (c) its intention to terminate or withdraw from any Plan.
Neither the Company nor any Subsidiary will terminate any such Plan or withdraw
therefrom unless the Company shall be in compliance with all of the terms and
conditions of this Agreement after giving effect to any liability to the PBGC
resulting from such termination or withdrawal.
7.17. Compliance with Laws. The Company shall comply with the requirements
of all applicable laws, rules, ordinances, regulations, orders and decrees of
any governmental authority other than laws, rules, ordinances, regulations,
orders and decrees the non-compliance with which, individually or in the
aggregate, would not result in a Material Adverse Change.
7.18. Bridgeton, New Jersey Taxes. The Company acknowledges and agrees
that there are past due real estate taxes outstanding as of the date hereof at
the Bridgeton, New Jersey facility in the amount of $390,000 and that such taxes
will be paid in full by the Company and evidence of payment of such real estate
taxes delivered to Agent on or before February 5, 2002.
7.19. Zoning Letters. The Company shall use commercially reasonable
efforts to provide Agent, within six (6) months from the date hereof, provide
Agent zoning letters executed by the respective governing municipality of each
of those parcels of real property constituting Collateral for which the Company
executed Amended and Restated Mortgages in favor of Agent for itself and for the
benefit of the Banks. Each zoning letter shall be in form and content reasonably
acceptable to Agent and shall state (i) the subject premises, or some portion
thereof, lies within the boundaries of the respective governing municipality's
zoning district, if such a zoning district exists (and if the subject premises
lie within more than one zoning district, the Company shall provide a letter
from each zoning district); (ii) the zoning designation, if any, applicable to
the subject premises; (iii) the use of the subject premises as a cranberry bog
is permitted under the applicable zoning designation (or is a legal
nonconforming use, a conditional
20
use, or is otherwise permitted under the applicable provisions of the zoning
code); and (iv) the use of the subject premises as a cranberry bog complies with
all zoning and use codes, ordinances, rules and regulations. If any information
provided to Agent hereunder indicates that the use of the subject premises as a
cranberry bog is not permitted as contemplated in clause (iii) hereof, the
Company shall, within thirty (30) days, remedy such problem and provide evidence
to Agent that such problem has been remedied and the subject premises may be
used as a cranberry bog as contemplated in said clause (iii).
7.20. Special Assessments. Within thirty (30) days after the Effective
Date, the Company shall deliver to Agent evidence of payment of all special
assessments at the real properties described on Schedule 4.1(a) attached hereto
or other documentation in a form which will enable Chicago Title Insurance to
delete all special assessment exceptions from the title policies to be issued to
Agent.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES.
8.1. Events of Default. Any one or more of the following shall constitute
an Event of Default:
(a) Default in the payment within three (3) days when due of any
principal of or interest on any Term Note, or in the payment within five
(5) days when due of any costs, expenses or fees under this Agreement or
any of the other Loan Documents, whether on demand or at the stated due
date thereof or at any other time provided in this Agreement;
(b) Default in the observance or performance of any covenant,
condition, agreement or provision in Sections 7.6, 7.9, 7.10, 7.11, 7.12,
7.13, 7.14 or 7.18 of this Agreement, or of any provision of the
Collateral Documents requiring the maintenance of insurance on the
Collateral subject thereto or dealing with the use or remittance of
proceeds of such Collateral;
(c) Default in the observance or performance of any covenant,
condition, agreement or provision in Sections 7.2, 7.3, 7.4 or 7.15 of
this Agreement and such default shall continue for five (5) days after
written notice thereof to the Company by the Agent;
(d) Default in the observance or performance of any other covenant,
condition, agreement or provision in this Agreement or in any of the other
Loan Documents and such default shall continue for thirty (30) days after
written notice thereof to the Company by the Agent;
(e) Any default under the Foothill Agreement or the Equitable
Agreement shall occur and be continuing and, as a result of such default,
the obligations under the Foothill Notes, the Foothill Agreement or the
Equitable Agreement shall have become or shall have been declared due and
payable prior to the maturity thereof;
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(f) Default shall occur under any evidence of indebtedness for
borrowed money in an aggregate principal amount in excess of Two Million
Five Hundred Thousand Dollars ($2,500,000) issued or assumed or guaranteed
by the Company or any Subsidiary (other than indebtedness under the
Foothill Agreement) or under any mortgage, agreement or other similar
instrument under which the same may be issued or secured and such default
shall continue for a period of time sufficient to permit the acceleration
of maturity of any indebtedness evidenced thereby or outstanding
thereunder;
(g) Any representation or warranty made by the Company herein or in
any of the other Loan Documents or in any statement or certificate
furnished by it pursuant hereto or thereto proves untrue in any material
respect as of the date of the issuance or making thereof;
(h) Any judgment or judgments, writ or writs, or warrant or warrants
of attachment, or any similar process or processes in an aggregate amount
in excess of Five Hundred Thousand Dollars ($500,000) shall be entered or
filed against the Company, any Subsidiary or against any of their
respective Property or assets and remains unpaid, unvacated, unbended or
unstayed for a period of thirty (30) days from the date of its entry;
(i) The Company or any Subsidiary (other than Wildhawk, Inc. and
W.S.C. Water Management Corp.) shall (i) have entered involuntarily
against it an order for relief under the Bankruptcy Code of 1978, as
amended, (ii) not pay, or admit in writing its inability to pay, its debts
generally as they become due or suspend payment of its obligations, (iii)
make an assignment for the benefit of creditors, (iv) apply for, seek,
consent to, or acquiesce in, the appointment or a receiver, custodian,
trustee, conservator, liquidator or similar official for it or any
substantial part of its Property, (v) institute any proceeding seeking to
have entered against it an order for relief under the Bankruptcy Code of
1978, as amended, to adjudicate it insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, marshalling of
assets, adjustment or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors
or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (vi) fail to contest
in good faith any appointment or proceeding described in Section 8.1(j)
hereof, or (vii) take any action in furtherance of any of the foregoing
purposes; or
(j) A custodian, receiver, trustee, conservator, liquidator or
similar official shall be appointed for the Company, any Subsidiary (other
than Wildhawk, Inc. and W.S.C. Water Management Corp.) or any substantial
part of their respective Property, or a proceeding described in Section
8.1(i)(v) shall be instituted against the Company and such appointment
continues undischarged or any such proceeding continues undismissed or
unstayed for a period of sixty (60) days.
(k) There shall occur a "Change in Control" with respect to the
Company. For this purpose, a "Change in Control" means any of the
following:
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(i) Sun Capital Partners II LP shall cease to be the managing
member of Sun Northland, LLC;
(ii) Sun Northland, LLC shall cease to own, on a fully-diluted
basis, more than fifty percent (50%) of the outstanding securities
of the Company entitled generally to vote for the election of
directors ("Voting Securities");
(iii) The Company merges with or into any Person, or any
Person merges with or into the Company in a transaction in which the
outstanding Voting Securities are converted into or exchanged for
cash, securities or other property other than a transaction where
the Voting Securities outstanding immediately prior to such
transaction are converted into or exchanged for voting stock of the
surviving or transferee Person and such voting stock constitutes a
majority of the outstanding shares of voting stock of such surviving
or transferee Person (immediately after giving effect to such
issuance); or
(iv) All or substantially all of the assets of the Company and
its Subsidiaries, on a consolidated basis, are sold or disposed of.
(l) Foothill Capital Corporation (or its successors or assigns)
shall send a Foothill Notice (as defined in the Intercreditor Agreement)
to Agent under Section 2.6(d) of the Intercreditor Agreement.
Notwithstanding the provisions of 8.1(i), hereof, the liquidation and
dissolution of Northland Cranberries Sales Corp., Potomac Foods of Virginia,
Inc. and/or PVFA Acquisition Corp. shall not be deemed to be an Event of Default
hereunder.
8.2. Remedies for Non-Bankruptcy Defaults. When any Event of Default,
other than an Event of Default described in subsections (i) or (j) of Section
8.1 hereof, has occurred and is continuing, the Agent upon instruction of the
Required Banks shall, by notice to the Company, declare the principal of and the
accrued interest on the Term Notes then outstanding to be forthwith due and
payable and thereupon said Term Notes, including both principal and interest,
shall be and become immediately due and payable together with all other amounts
payable under this Agreement without further demand, presentment, protest or
notice of any kind.
8.3. Remedies for Bankruptcy Defaults. When any Event of Default described
in subsections 8.1(i) or 8.1(j) has occurred and is continuing, then the then
unpaid balance of the Term Notes, including both principal and interest, and all
fees, charges and commissions payable hereunder, shall immediately become due
and payable without presentment, demand, protest or notice of any kind, the
obligation of the Banks to extend further credit pursuant to any of the terms
hereof shall immediately terminate and the Bank may exercise all remedies
available to it under the Collateral Documents.
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ARTICLE IX
DEFINITIONS.
The following terms when used herein shall have the following meanings;
such terms to be equally applicable to both the singular and plural of the terms
defined (capitalized terms defined elsewhere in this Agreement to have the
meanings so ascribed to them in all provisions of this Agreement).
"Adjusted Cliffstar Payments" means all Cliffstar Payments other than
payments attributable to interest accrued under the Cliffstar Note.
"Adjustment Date" shall have the meaning set forth in Section 10.14
hereof.
"Affiliate" shall mean any person, firm, corporation or entity (herein
collectively called a "Person") directly or indirectly controlling or controlled
by, or under direct or indirect common control with, another Person. A Person
shall be deemed to control another Person for the purposes of this definition if
such first Person possesses, directly or indirectly, the power to direct, or
cause the direction of, the management and policies of the second Person,
whether through the ownership of voting securities, common directors, trustees
or officers, by contract or otherwise.
"Agreement" shall mean this Amended and Restated Credit Agreement, as the
same may be further supplemented and amended from time to time.
"Annual Earnout Amount" has the meaning set forth in the Cliffstar
Purchase Agreement.
"Assignment Agreement" has the meaning set forth in the first paragraph of
this Agreement.
"Assignment, Assumption and Release Agreement" shall mean the Assignment,
Assumption and Release Agreement by and between the Banks, LaSalle Bank National
Association and Sun Northland, LLC dated as of the date hereof.
"Assignment Certificate" shall have the meaning set forth in Section 10.14
hereof.
"Average Total Debt" shall mean the arithmetic average of the Total Debt
outstanding at the end of each of the fifteen (15) Business Days following, and
each of the fifteen (15) days preceding (or such fewer number of days to the
date hereof) the Funded Debt Determination Date.
"Bank Stock" shall the meaning set forth in Section 5.15 hereof.
"Base Rate" shall mean a fluctuating interest rate per annum at all times
equal to the rate of interest announced by the Agent from time to time as its
prime commercial rate with any change in such rate resulting from a change in
said prime commercial rate to be effective as of the date of the relevant change
in said prime commercial rate. The Agent may lend at rate higher or lower than
or the same as the Base Rate.
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"Business Day" shall mean any day (other than a Saturday or Sunday) on
which banks are generally open for business in Minneapolis, Minnesota.
"Cliffstar Note" means the Promissory Note dated March 8, 2000, issued by
Cliffstar Corporation to the Company in the original principal amount of
$28,000,000.
"Cliffstar Payment" means any amount received by the Company after the
date hereof (i) as a payment under the Cliffstar Note (whether for principal,
interest or otherwise and whether as a regularly scheduled payment, a mandatory
or voluntary prepayment, upon default or otherwise), (ii) as an Earnout
Termination Payment, or (iii) as a payment on the Earnout Amount (including,
without limitation, any Annual Earnout Amount).
"Cliffstar Purchase Agreement" shall mean that certain Asset Purchase
Agreement dated January 5, 2000, by and between Cliffstar Corporation and the
Company, as amended by that certain first Amendment to Asset Purchase Agreement
dated as of March 8, 2000.
"Collateral" shall mean all property and rights that may from time to time
secure the payment of any of the Company's indebtedness, obligations and
liabilities to the Bank under any of the Loan Documents.
"Collateral Documents" shall mean all mortgages, deeds of trust, security
agreements, collateral pledge agreements, assignments, financing statements and
other documents as shall from time to time secure any of the Term Notes and
other obligations of the Company to the Bank.
"Cranberry Businesses" shall mean the operation of cranberry bogs (and the
development thereof) and the production, distribution, processing, marketing and
brokering of cranberries, cranberry products and other fresh fruit or juice
products.
"Default Rate" shall have the meaning set forth in Section 2.1(b) hereof.
"Earnout Amount" has the meaning set forth in the Cliffstar Purchase
Agreement.
"Earnout Termination Payment" has the meaning set forth in the Cliffstar
Purchase Agreement.
"EBITDA" shall mean, with respect to any fiscal period, the Company's and
its Subsidiaries' consolidated net earnings (or loss), minus extraordinary gains
and interest income, plus interest expense, income taxes, non-cash nonrecurring,
unusual or extraordinary losses and depreciation and amortization for such
period, as determined in accordance with generally accepted accounting
principles consistently applied.
"Effective Date" shall have the meaning set forth in Article VI hereof.
"Equitable Agreement" shall mean the Intercreditor Agreement between the
Company and Equitable Life Assurance Society of the United States.
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"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may, from time to time, be supplemented or amended.
"Event of Default" shall mean any event or condition specified as such in
Section 8.1 hereof and "Default" shall mean any event or condition which with
the lapse of time, the giving of notice or both would constitute an Event of
Default.
"Exiting Bank Agreement" means that certain Assignment, Assumption and
Release Agreement between the Other Lenders and Sun Northland LLC pursuant to
which the Other Lenders assign to Sun/Northland LLC all of their Revolving
Credit Loans and L/C participations under the Original Credit Agreement, all
interest accrued thereon and certain collateral securing the same in a form
acceptable to the Banks.
"Foothill Agreement" means the Loan and Security Agreement between the
Company and Foothill Capital Corporation dated the Effective Date.
"Foothill Liens" means the liens and security interests granted in favor
of Foothill Capital Corporation under the Foothill Agreement or pursuant to any
other documents and agreements executed in connection therewith as in effect on
the Effective Date.
"Foothill Notes" means the promissory notes issued by the Company in favor
of Foothill Capital Corporation under the Foothill Agreement.
"Funded Debt" shall mean as of the date of determination, the Average
Total Debt during the twelve (12) month period ending on the date of
determination.
"Funded Debt Determination Date" shall mean the date during the
twelve-month period preceding the date of determination of Funded Debt on which
Total Debt was the lowest.
"Intercreditor Agreement" shall mean the Intercreditor Agreement described
in Section 6.13 hereof.
"Interest Coverage Ratio" shall mean, for any twelve (12) month period,
the relationship, expressed as a numerical ratio, between (i) EBITDA for such
period, and (ii) Interest Expense for such period.
"Interest Expense" shall mean for any period all consolidated interest
expense (whether paid or accrued) during such period (including that
attributable to capitalized losses), all determined in accordance with generally
accepted accounting principles consistently applied.
"Liquidating Assets" means the real estate, fixtures and the equipment
located thereon which is located in Plymouth County, Massachusetts, Eau Claire,
Michigan and/or Bridgeton, New Jersey, which is included among the Collateral
granted to the Banks.
"Loan Documents" shall mean this Agreement, the Collateral Documents, the
Term Notes, the Intercreditor Agreement, the Stockholders Agreement and the
Registration Agreement.
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"Material Adverse Change" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of the Company, (b) a material impairment of
the Company's ability to perform its obligations under the Loan Documents or of
the Banks' ability to enforce the Obligations or realize upon the Collateral, or
(c) a material impairment of the enforceability or priority of the liens granted
to Banks in the Collateral as a result of an action or failure to act on the
part of the Company.
"Monthly Installment Amount" shall mean $133,411.11; provided, however,
that at such time as (a) the Company sells or otherwise disposes of all of the
Liquidating Assets and timely applies the proceeds thereof to prepayment of the
Term Notes as required under Section 3.3(a) hereof, and (b) the Company timely
pays the installment due on the one (1) year anniversary of the Effective Date
under Section 3.1(a) hereof, then the Monthly Installment Amount shall thereupon
be decreased to an amount equal to the quotient of (i) the then outstanding
principal balance of the Term Notes, divided by (ii) one hundred eighty (180)
less the number of months elapsed since the Effective Date.
"Other Lenders" shall mean Wells Fargo Bank Minnesota, N.A., Bank One, NA,
M&I Marshall & Ilsley Bank and Bank of America, National Association.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Percentage" shall mean, as to any Bank, the percentage set forth below
such Bank's name on the signature pages hereof, as adjusted by assignments
pursuant to Section 10.14 hereof.
"Permitted Liens" shall have the meaning specified in Section 7.11 hereof.
"Permitted Property" shall mean all Property except receivables, crops,
inventory and the Collateral.
"Person" shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (whether
national, federal, state, provincial, county, city, municipal or otherwise,
including, without limitation, any instrumentality, division, agency, body or
department thereof).
"Plan" shall mean any employee benefit plan covering any officers or
employees of the Company, any benefits of which are, or are required to be,
guaranteed by the PBGC.
"Property" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Registration Agreement" means the Registration Agreement dated as of the
date hereof by and among Sun Northland, LLC, the Banks other than LaSalle Bank
National Association, the Company and Foothill Capital Corporation.
"Required Banks" shall mean, as of any date of determination, Banks
holding at least sixty-six and 2/3 percent (66-2/3%) of the Percentages.
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"SEC" shall have the meaning specified in Section 7.4 hereof.
"Set-off" shall have the meaning set forth in Section 10.13 hereof.
"Stockholders Agreement" means the Stockholders Agreement dated as of the
date hereof by and among Sun Northland, LLC, the Banks, the Company and Foothill
Capital Corporation as contemplated under Section 6.12 hereof.
"Subsidiary" shall mean collectively any corporation or other entity at
least a majority of the outstanding voting shares or other equity interests of
which is at the time owned directly or indirectly by the Company and/or its
Subsidiaries.
"Sun Northland Purchase Agreement" shall mean the Stock Purchase Agreement
between the Company and Sun Northland, LLC dated the Effective Date.
"Term Loan" shall have the meaning specified in Section 1.1 hereof.
"Term Notes" shall have the meaning specified in Section 1.1 hereof.
"Total Debt" shall mean (without duplication) all consolidated
indebtedness for borrowed money of the Company and its Subsidiaries, and shall
include indebtedness for borrowed money created, assumed or guaranteed by the
Company either directly or indirectly, including the Foothill Notes and all
amounts outstanding under this Agreement, including the aggregate principal
amount of Term Notes outstanding.
"UCC" shall mean the Uniform Commercial Code as the same may from time to
time be in effect in the State of Wisconsin.
ARTICLE X
MISCELLANEOUS.
10.1. Holidays. If any principal of any of the Term Notes shall fall due
on a Saturday, Sunday or on another day which is a legal holiday for lenders in
the State of Minnesota, interest at the rates such Term Notes bear for the
period prior to maturity shall continue to accrue on such principal from the
stated due date thereof to and including the next succeeding Business Day on
which the same is payable.
10.2. No Waiver, Cumulative Remedies. No delay or failure on the part of
the Agent or the Banks in the exercise of any power or right shall operate as a
waiver thereof, nor as an acquiescence in any Default or Event of Default nor
preclude any other or further exercise thereof, or the exercise of any other
power or right, and the rights and remedies hereunder of the Agent and the Banks
are cumulative to, and not exclusive of, any rights or remedies which any of
them would otherwise have.
10.3. Waivers, Modifications and Amendments. The Required Banks and the
Company may, from time to time, enter into written amendments, supplements or
modifications hereto for the purpose of adding provisions to any Loan Document
or for the purpose of changing in any
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manner the rights of the Banks or of the Company thereunder, and the Required
Banks may execute and deliver to the Company a written instrument waiving, on
such terms and conditions as the Required Banks may specify in such instrument,
any of the requirements of any Loan Document or any Default or Event of Default
and its consequences; provided, however, that no amendment, modification,
termination, waiver or consent shall do any of the following unless the same
shall be in writing and signed by all Banks: (a) reduce the amount of any
payment of principal of or interest on any loan payable to the Banks hereunder;
(b) postpone any date fixed for any payment of principal of or interest on any
outstanding loan payable to the Banks hereunder; (c) change the definition of
"Required Banks;" (d) amend this Section 10.3 or any other provision of this
Agreement requiring the consent or other action of the Required Banks or all of
the Banks; (e) release any guaranty; (f) release all or substantially all of the
Collateral except the Liquidating Assets; or (g) consent to the assignment or
transfer by the Company of any of its rights and obligations under this
Agreement (provided that none of the foregoing shall be deemed to prohibit
Required Banks, without the consent of all Banks, from agreeing to forbear from
pursuing rights and remedies against the Company in the event of a default
hereunder). In the case of any waiver, the Company and the Banks shall be
restored to their former position and rights under the Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing. However, no waiver of a Default or Event of Default shall extend to
any subsequent or other Default or Event of Default, or impair any right
consequent thereon. No amendment, supplement, modification, or waiver shall be
effective except if in writing and duly executed by the Required Banks or each
Bank, as applicable, the Agent and the Company.
10.4. Costs and Expenses. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent and the Banks in
connection with the negotiation, preparation, execution, delivery, recording
and/or filing and/or release of this Agreement, the Term Notes and the
Collateral Documents and the other instruments and documents to be delivered
hereunder or thereunder or in connection with the transactions contemplated
hereby or thereby or in connection with any consents hereunder or thereunder or
waivers or amendments hereto or thereto, (excluding fees and expenses incurred
in connection with any inspection conducted under Section 7.5 hereof unless such
inspection is performed during an Event of Default), including the fees and
expenses of counsel for the Agent with respect to all of the foregoing, and all
recording, filing, title insurance or other fees, costs and taxes incident to
perfecting a lien upon the collateral security for the Term Notes, and all
reasonable costs and expenses (including reasonable attorneys' fees), incurred
by the Agent, any security trustee for the Banks or any of the Banks in
connection with a Default or the enforcement of this Agreement, the Term Notes
or the Collateral Documents and the other instruments and documents to be
delivered hereunder or thereunder. The Company agrees to indemnify and save the
Agent and the Banks and any security trustee for the Banks harmless from any and
all liabilities, losses, costs and expenses incurred by the Banks in connection
with any action, suit or proceeding brought against the Banks or security
trustee by any person which arises out of the transactions contemplated or
financed hereby or by the Term Notes or Collateral Documents or out of any
action or inaction by any of the Banks or any security trustee hereunder or
thereunder, except for such thereof as is caused by the gross negligence or
willful misconduct of the party indemnified. All amounts chargeable to the
Company under this Section 10.4 shall be obligations secured by the Collateral.
The provisions of this Section 10.4 hereof shall survive payment of the Notes.
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10.5. Survival of Representations. All representations and warranties made
herein or in the Collateral Documents or in certificates given pursuant hereto
shall survive the execution and delivery of this Agreement, the Collateral
Documents and the Term Notes, and shall continue in full force and effect with
respect to the Effective Date.
10.6. Construction. The parties hereto acknowledge and agree that this
Agreement shall not be construed more favorably in favor of one than the other
based upon which party drafted the same, it being acknowledged that all parties
hereto contributed substantially to the negotiation and preparation of this
Agreement.
10.7. Accounting Principles. All computations of compliance with the terms
hereof shall be made on the basis of generally accepted principles of accounting
applied in a manner consistent with those used in the preparation of the audit
report of the Company referred to in the first sentence of Section 5.3 hereof.
10.8. Addresses for Notices. All communications provided for herein shall
be in writing and shall be deemed to have been given or made when served
personally, where delivered using a reputable overnight courier service or three
days after being deposited in the United States of America mail addressed, if to
the Company, at 800 First Avenue South, Wisconsin Rapids, Wisconsin 54495-8020,
Attention: John Swendrowski; if to the Agent at U.S. Bank National Association,
601 Second Avenue South, Minneapolis, Minnesota 55402-4302, Attention: Stephen
Tornio; or, if to any of the Banks, at their addresses set forth on the
signature pages hereto, or at such other address as shall be designated by any
party hereto in a written notice given to each party pursuant to this Section
10.8.
10.9. Headings. Article and Section headings used in this Agreement are
for convenience of reference only and are not a part of this Agreement for any
other purpose.
10.10. Severability of Provisions. Any provision of this Agreement which
is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. All rights, remedies and powers provided in
this Agreement and the Term Notes may be exercised only to the extent that the
exercise thereof does not violate any applicable mandatory provisions of law,
and all the provisions of this Agreement and the Term Notes are intended to be
subject to all applicable mandatory provisions of law which may be controlling
and to be limited to the extent necessary so that they will not render this
Agreement or the Term Notes invalid or unenforceable.
10.11. Counterparts. This Agreement may be executed in any number of
counterparts, and by different parties hereto on separate counterparts, and all
such counterparts taken together shall be deemed to constitute one and the same
instrument.
10.12. Binding Nature, Governing Law, Etc. This Agreement shall be binding
upon the Company and its successors and assigns, and shall inure to the benefit
of the Agent and each of the Banks and the benefit of their respective
successors and assigns, including any subsequent holder of an interest in the
Term Notes. This Agreement, together with the Term Notes and Collateral
Documents constitutes the entire understanding of the parties with respect to
the
30
subject matter hereof and any prior agreements, whether written or oral, with
respect thereto are superseded hereby except for prior understandings related to
fees payable to the Banks. This Agreement, the Loan Documents and the rights and
obligations of the parties thereto shall be governed by, and construed and
interpreted in accordance with the internal laws of the State of Wisconsin.
Venue for the settlement of disputes under this Agreement shall be in the United
States District Court for the Eastern District of Wisconsin or the Circuit Court
of Milwaukee County, Wisconsin. The Company consents to the exercise of
jurisdiction by these courts and the vesting of venue therein. THE COMPANY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS TO ALL SUCH
SERVICE OF PROCESS MADE BY MAIL OR BY MESSENGER DIRECTED TO IT AT THE ADDRESS
SPECIFIED IN SECTION 10.8 HEREOF.
10.13. Rights of Banks.
(a) The Company authorizes the Agent to disclose to any Bank any
financial or other information pertaining to the Company.
(b) If any Bank (each, a "Replaceable Bank") requests compensation
pursuant to Sections 2.3 or 3.6 at a rate materially in excess of that
requested by any other Bank, the Company may, with the consent of the
Agent, which consent shall not be unreasonably withheld, propose that
another lender (a "Replacement Bank") which lender may be an existing
Bank, be substituted for and replace the Replaceable Bank for purposes of
this Agreement. In the event a Replacement Bank is so substituted for the
Replaceable Bank, then such substitution shall take place on a date
acceptable to the Company, the Replaceable Bank and the Replacement Bank,
as the case may be, but in no event later than the latest maturity date of
any financial accommodations then outstanding hereunder, and such
substitution shall take place through the execution of such instruments
and documents as are required under Section 10.14(a) and (b) hereof. All
expenses of the Bank incurred in connection with the foregoing shall be
paid by the Company.
(c) In the event the Bank or any Participant shall receive and
retain any payment, whether by set-off or application of deposit balances
or otherwise ("Set-off"), on or in respect of any loan or other obligation
outstanding under this Agreement or the other Loan Documents in excess of
its ratable share of payments on the Term Loan and other obligations then
outstanding, then such Bank shall purchase for cash at face value, but
without recourse, ratably from each of the other Banks such amount of such
loan and other obligations held by each such other party (or interest
therein) as shall be necessary to cause such Bank to share such excess
payment ratably with all the other Banks; provided, however, that if any
such purchase is made by any Bank, and if such excess payment or part
thereof is thereafter recovered from such purchasing party, the related
purchases from the other Banks shall be rescinded ratably and the purchase
price restored as to the portion of such excess payment so recovered, but
without interest.
10.14. Addition of Banks. Any Bank, at any time upon at least two (2)
Business Days prior written notice to the Agent and the Company, may assign all
or a portion (provided such portion is not less than One Million Dollars
($1,000,000) in the aggregate) of such Bank's Notes
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and loans to a domestic or foreign bank (having a branch office in the United
States of America), an insurance company or other financial institution (an
"Applicant") on any date (the "Adjustment Date") selected by such Bank, but only
so long as the Agent shall have provided its prior written approval of such
proposed Applicant, which prior written approval will not be unreasonably
withheld. Upon receipt of such approval and to confirm the status of each
additional Bank as a party to this Agreement and to evidence the assignment in
accordance herewith:
(a) The Agent, the Company, the assigning bank and such Applicant
shall, on or before the Adjustment Date, execute and deliver to the Agent
an Assignment Certificate in substantially the form of Exhibit 10.14 (an
"Assignment Certificate");
(b) The assigning bank or the Applicant shall pay the Agent a
processing fee of Three Thousand Five Hundred Dollars ($3,500);
(c) The Company will execute and deliver to the Agent, for delivery
by the Agent in accordance with the terms of the Assignment Certificate,
(i) a new Term Note payable to the order of the Applicant in amounts
corresponding to the Percentage of the Term Note acquired by such
Applicant, and (ii) a new Term Note payable to the order of the assigning
Bank in an amount corresponding to the retained Percentage of the Term
Loan. Such new Term Notes shall be in aggregate principal amounts equal to
the aggregate principal amounts of the Term Note to be replaced, shall be
dated the effective date of such assignment and shall otherwise be in the
form of the Term Note to be replaced thereby. Such new Term Notes shall be
issued in substitution for, but not in satisfaction or payment of, the
Term Notes being replaced thereby and such new Term Note shall be treated
as a Term Note for purposes of this Agreement.
Upon the execution and delivery of such Assignment Certificate and such
new Term Notes and the payment of the processing fee: (a) this Agreement shall
be deemed to be amended to the extent, and only to the extent, necessary to
reflect the addition of such additional Bank and the resulting adjustment of the
Percentages arising therefrom; (b) the assigning Bank shall be relieved of all
obligations hereunder to the extent of a reduction of the assigning Bank's
Percentage; and (c) the additional Bank shall become a party hereto and shall be
entitled to all rights, benefits and privileges accorded to a Bank herein and in
each other Loan Document or other document or instrument executed pursuant
hereto and subject to all obligations of a Bank hereunder, including, without
limitation, the right to approve or disapprove actions which, in accordance with
the terms hereof, require the approval of the Required Banks or all Banks.
Promptly after the execution of any Assignment Certificate, a copy thereof shall
be delivered by the Agent to each Bank and to the Company. In order to
facilitate the addition of additional Banks hereto, the Company and the Banks
shall cooperate fully with the Agent in connection therewith and shall provide
all reasonable assistance requested by the Agent relating thereto, including,
without limitation, the furnishing of such written materials and financial
information regarding the Company as the Agent may reasonably request, the
execution of such documents as the Agent may reasonably request with respect
thereto, and the participation by officers of the Company, and the Banks in a
meeting or teleconference call with any Applicant upon the request of the Agent.
32
10.15. WAIVER OF JURY TRIAL. THE COMPANY AND THE BANKS HEREBY IRREVOCABLY
WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY LOAN DOCUMENT OR ANY
INSTRUMENT OR DOCUMENT DELIVERED HEREUNDER.
10.16. Confidentiality. Each of the Agent and the Banks agrees to keep
confidential all non-public information provided to it by the Company or any
Subsidiary pursuant to this Agreement that is designated by the Company or any
Subsidiary as confidential; provided; however, that nothing contained herein
shall prevent the Agent or any Bank from disclosing any such information (a) to
the Agent, any other Bank or any affiliate of any Bank which agrees to comply
with the provisions of this Section, (b) to any Applicant or prospective
Applicant which agrees to comply with the provisions of this Section, (c) any of
its employees, directors, agents, attorneys, accountants and other professional
advisors, (d) upon request or demand of any governmental authority having
jurisdiction over it, (e) in response to any order of any court or other
governmental authority or as may otherwise be required pursuant to any law, rule
or regulation, (f) if requested or required to do so in connection with any
litigation or similar proceeding, (g) which has been publicly disclosed other
than in breach of this Section, or (h) in connection with the exercise of any
remedy hereunder or under any other Loan Document.
ARTICLE XI
THE AGENT.
11.1. Appointment and Authorization. Each Bank hereby irrevocably appoints
U.S. Bank as Agent for the Banks under this Agreement and hereby authorizes the
Agent to take such action as Agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms hereof, together
with such powers as are reasonably incident thereto. The relationship between
the Agent and the Banks is and shall be that of Agent and principal only, and
nothing contained in this Agreement or any other Loan Document shall be
construed to constitute the Agent as a trustee or fiduciary for any Bank or the
Company.
11.2. Agent and Affiliates. In its capacity as a Bank hereunder, the Agent
shall have the same rights and powers under this Agreement as any other Bank and
may exercise or refrain from exercising the same as though it were not an Agent,
and the agent and its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with the Company or any Subsidiary or
Affiliate of the Company as if it were not the Agent hereunder. The terms Bank
and Banks as used in the Loan Documents, unless the context otherwise clearly
requires, include the Agent in its individual capacity as a Bank.
11.3. Action by Agent. Except for action expressly required of the Agent
hereunder, the Agent shall in all cases be fully justified in failing or
refusing to act hereunder unless the Agent shall be indemnified to its
reasonable satisfaction by the Banks against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. In all cases in which this Agreement does not require the Agent to take
certain actions, the Agent shall be fully justified in using its discretion in
failing to take or in taking any action hereunder. Without limiting the
generality of the foregoing, the Agent shall not be required to
33
take any action with respect to any Event of Default, except as expressly
provided in Section 8.2. The Agent shall be acting as an independent contractor
hereunder and nothing herein shall be deemed to impose on the Agent any
fiduciary obligations to the Banks or the Company.
11.4. Consultation with Experts. The Agent may consult with legal counsel,
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
11.5. Liability of Agent. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or not taken
by it in connection herewith (i) with the consent or at the request of the
Required Banks or (ii) in the absence of its own gross negligence or willful
misconduct. Neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into
or verify (i) any statement, warranty or representation made in connection with
this Agreement or any borrowing hereunder; (ii) the performance or observance of
any of the covenants or agreements of the Borrowers; (iii) the satisfaction of
any condition specified in Section 6, except receipt of items required to be
delivered to the Agent; or (iv) the validity, effectiveness or genuineness of
this Agreement, the Term Notes or any other instrument or writing furnished in
connection herewith. The Agent shall not incur any liability by acting in
reliance upon any notice, consent, certificate, request or statement (whether
written or oral) or other document believed by it to be genuine or to be signed
or sent by the proper party or parties and, in the case of legal matters, in
relying on the advice of counsel (including counsel for the Company). The Agent
may treat the Banks that are named herein as the holders of the Term Notes and
the indebtedness contemplated herein unless and until the Agent receives notice
of the assignment of the Term Note and the indebtedness held by a Bank hereunder
pursuant to an assignment contemplated by Section 10.14 hereof.
11.6. Indemnification. Each Bank shall, ratably in accordance with its
Percentage, indemnify the Agent (to the extent not reimbursed by the Company)
against any cost, expenses (including reasonable counsels' fees and
disbursements) , claims, demands, actions, losses, obligations, damages,
penalties, judgments, suits or liability (except such as result from the Agent's
gross negligence or willful misconduct) that the Agent may suffer or incur in
connection with this Agreement or any action taken or omitted by the Agent
hereunder.
11.7. Credit Decision. Each Bank acknowledges that it has, independently
and without reliance upon the Agent or any other Bank, and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance upon the Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
any action under this Agreement.
11.8. Resignation or Removal of Agent and Successor Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Banks and the Company
at any time. Upon any such resignation of the Agent, the Required Banks shall
have the right to appoint, with the
34
consent of the Company, a successor Agent. If no successor Agent shall have been
so appointed by the Required Banks, and shall have accepted such appointment,
within thirty (30) days after, as the case may be, the retiring Agent's giving
of notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized under the
laws of the United States of America or of any state thereof that has a combined
capital and surplus of at least Two Hundred Million Dollars ($200,000,000). Upon
the acceptance of its appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the rights
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 11 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent.
[Signatures on next page]
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Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of November 6, 2001.
NORTHLAND CRANBERRIES, INC.
By: /s/ John Swendrowski
-----------------------------------------
John Swendrowski, Chief Executive Officer
Accepted and agreed to as of the day and year last above written.
U.S. BANK NATIONAL ASSOCIATION
By: /s/
-----------------------------------------
Its:
----------------------------------------
Term Loan: $16,013,000
Percentage: 62.273470%
Address:
MPFP2516
601 Second Avenue South
Minneapolis, Minnesota 55402-4302
Attention: Stephen Tornio, Vice President
ST. FRANCIS BANK, F.S.B.
By: /s/
-----------------------------------------
Its:
----------------------------------------
Term Loan: $2,857,000
Percentage: 11.110679%
Address:
13400 Bishops Lane, Suite 190
Brookfield, Wisconsin 53005-6203
Attention: John Tans,
Vice President/Commercial Banking
36
ARK CLO 2000-1 LIMITED
By: /s/
-----------------------------------------
Its:
----------------------------------------
Term Loan: $6,844,000
Percentage: 26.615851%
Address: c/o Patriarch Partners, LLC
40 Wall Street, 25th Floor
New York, NY 10005
Attention: Dennis Dolan/Lynn Tilton
and
Address: c/o Woodside Capital
36 Bay State Road
Cambridge, Massachusetts 02138
Attention: David Ray
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LIST OF EXHIBITS
Exhibit 1.1 Form of Term Note
Exhibit 7.4 Form of Compliance Certificate
Exhibit 10.14 Form of Assignment Certificate
38
LIST OF SCHEDULES
Schedule 4.1(a) Company Real Property and Improvements
Schedule 4.1(b) Equipment List
Schedule 5.3 Material Adverse Change Since August 31, 2001
Schedule 5.4 Litigation; Taxes; Consents
Schedule 5.13 Environmental Disclosures
Schedule 5.14 Pro Forma Balance Sheet
Schedule 5.16 Capitalization
Schedule 7.11 Existing Liens
39