EXHIBIT 10.11
SECOND AMENDMENT TO CREDIT AGREEMENT
(TERM LOAN)
THIS SECOND AMENDMENT TO CREDIT AGREEMENT ("Second Amendment") is made
as of August 24, 2001 ("Effective Date"), by and between U.S. PREMIUM BEEF,
LTD., a marketing cooperative formed under the laws of the State of Kansas,
("Borrower"), whose mailing address is 12200 North Ambassador Drive, Kansas
City, Missouri 64163, and COBANK, ACB ("CoBank"), as agent for the benefit of
the Syndication Parties (in that capacity, "Agent"), whose mailing address is
5500 South Quebec Street, Greenwood Village, Colorado 80111.
RECITALS
A. CoBank, as Agent and as a Syndication Party (collectively, the
present and future Syndication Parties shall be referred to herein as the
"Syndication Parties" and, each, a "Syndication Party") and Borrower entered
into that certain Credit Agreement (Term Loan) dated as of November 25, 1997, as
amended by that certain First Amendment to Credit Agreement (Term Loan) dated
effective as of March 21, 2000 (as further amended, modified, supplemented,
restated or replaced from time to time, the "Credit Agreement") pursuant to
which the Syndication Parties agreed to make that certain term loan to Borrower
in an amount up to $65,000,000.00 under the terms and conditions set forth in
the Credit Agreement.
B. Borrower has requested that the Syndication Parties amend the
Credit Agreement in order to modify certain definitions and covenants contained
therein, which the Syndication Parties are willing to do under the terms and
conditions as set forth in this Second Amendment.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt of
which is hereby acknowledge, including the mutual promises and agreements
contained herein, the parties hereto hereby agree as follows:
1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is amended as of
the Effective Date as follows:
1.1 Section 1.26 is amended in its entirety to read as follows:
1.26 DEBT SERVICE COVERAGE RATIO: for any consecutive four
Fiscal Quarters (a) net income (as determined in accordance with GAAP),
(i) plus depreciation and amortization, (ii) plus the amount of all
Unit Retains, (iii) plus cash distributions received from affiliates,
and (iv) less retirements of equity (in the form of Unit Retains and
the return of the non-cash portion of patronage distributions), cash
patronage distributions, and earnings from affiliates, (b) divided by
the total principal payments made on all debt. For purposes of this
Section 1.26, cash distributions received from affiliates calculated
for each Fiscal Quarter shall include, but without duplication in the
following Fiscal Quarter, those distributions received from affiliates
up to and including the last day of the month in which such Fiscal
Quarter ends.
1.2 A new Section 1.40.5 is added to read as follows:
1.40.5 FISCAL QUARTER: the period of approximately three
months commencing on the day after the last Saturday of each of the
following months: August, November, February and May."
1.3 Subsection 12.2.2 is amended by changing each reference
therein to "Quarter" to read "Fiscal Quarter."
1.4 Section 12.19 is amended by changing the reference therein to
"Quarter" to read "Fiscal Quarter."
1.5 Section 13.12 is amended by changing the reference therein to
"August 31" to read "the last Saturday in the month of August."
1.6 Section 15.1(c) is amended by changing the reference therein
to "12.18" to read "12.19."
1.7 Subsection 17.4.1 is amended in its entirety to read as
follows:
17.4.1 BORROWER:
U.S. Premium Beef, Ltd.
12200 North Ambassador Drive
Kansas City, Missouri 64163
FAX: (816) 713-8810
Attention: Chief Executive Officer
2. CONDITIONS TO EFFECTIVENESS OF THIS SECOND AMENDMENT. The effectiveness
of this Second Amendment is subject to satisfaction, in the Agent's sole
discretion, of each of the following conditions precedent:
2.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Borrower shall be true and correct in all material respects on and
as of the Effective Date as though made on and as of such date.
2.2 NO EVENT OF DEFAULT. No Event of Default shall have occurred
and be continuing under the Credit Agreement as of the Effective Date of this
Second Amendment.
3. GENERAL PROVISIONS.
3.1 NO OTHER MODIFICATIONS. The Credit Agreement, as expressly
modified herein, shall continue in full force and effect and be binding upon the
parties thereto.
3.2 SUCCESSORS AND ASSIGNS. This Second Amendment shall be binding
upon and inure to the benefit of Borrower and Agent, and their respective
successors and assigns, except that Borrower may not assign or transfer its
rights or obligations hereunder.
2
3.3 DEFINITIONS. Capitalized terms used, but not defined, in this
Second Amendment shall have the meaning set forth in the Credit Agreement.
3.4 SEVERABILITY. Should any provisions of this Second Amendment
be deemed unlawful or unenforceable, said provision shall be deemed several and
apart from all other provisions of this Second Amendment and all remaining
provisions of this Second Amendment shall be fully enforceable.
3.5 GOVERNING LAW. To the extent not governed by federal law, this
Second Amendment and the rights and obligations of the parties hereto shall be
governed by, interpreted and enforced in accordance with the laws of the State
of Colorado.
3.6 HEADINGS. The captions or headings in this Second Amendment
are for convenience only and in no way defined, limit or describe the scope or
intent of any provision of this Second Amendment.
3.7 COUNTERPARTS. This Second Amendment may be executed by the
parties hereto in separate counterparts, each of which, when so executed and
delivered, shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a number
of copies hereof, each signed by less than all, but together signed by all, of
the parties hereto. Telefax copies of documents or signature pages bearing
original signatures, and executed documents or signature pages delivered by
telefax, shall, in each such instance, be deemed to be, and shall constitute and
be treated as, an original signed document or counterpart, as applicable.
[SIGNATURES FOLLOW ON NEXT PAGE]
3
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed as of the Effective Date.
BORROWER:
U.S. PREMIUM BEEF, LTD., a marketing
cooperative formed under the laws of the
State of Kansas
By: /s/ Steven D. Hunt
--------------------------------
Name: Steven D. Hunt
Title: Chief Executive Officer
AGENT:
COBANK, ACB
By: /s/ Joseph R. Slagle
--------------------------------
Name: Joseph R. Slagle
Title: Assistant Vice President
SYNDICATION PARTY:
COBANK, ACB
By: /s/ Joseph R. Slagle
--------------------------------
Name: Joseph R. Slagle
Title: Assistant Vice President
4