EXHIBIT 10.1
LETTER AMENDMENT NO. 2
Dated as of November 17, 2004
M&I Marshall & Ilsley Bank
651 Nicollet Mall
Minneapolis, Minnesota 55402-1611
Ladies/Gentlemen:
We refer to the Revolving Credit Agreement dated as of December 18, 2002,
as amended (the "Credit Agreement") between you and us. Unless otherwise defined
in this letter amendment, terms defined in the Credit Agreement are used in this
letter amendment as defined in the Credit Agreement.
It is hereby agreed by you and us as follows:
The Credit Agreement is, effective the date first above written, hereby
amended as follows:
(a) A new Section 1.1(gg) is added after Section 1.1(g) with text
as follows:
(gg) "LIBOR" means the annual rate equal to the rate at which
one-month U.S. dollar deposits are offered on the first day of
each calendar month on or about 9:00 a.m., Milwaukee,
Wisconsin time (rounded upwards, if necessary, to the nearest
1/16 of 1%) as determined by the British Bankers Association
(BBA LIBOR) and reported by a major news service selected by
the Bank (such as Reuters, Bloomberg or Moneyline Telerate).
If BBA LIBOR for the one month period is not provided or
reported on the first day of a month because, for example, it
is a weekend or holiday or for another reason, the LIBOR shall
be established as of the preceding day on which a BBA LIBOR
rate is provided for a one month period and reported by the
selected news service.
(b) Section 2.1 is amended by changing the Termination Date to be
December 31, 2006.
(c) Section 2.4 is amended in full to read as follows:
The Borrower shall repay, and shall pay interest on, the
aggregate unpaid principal amount of all Advances in
accordance with the Note. The Borrower may at any time and
from time to time elect to have interest accrue under the Note
at a fluctuating annual rate equal to either (i) Prime Rate
minus 0.50% or (ii) LIBOR plus 2.25%. Each change in the
fluctuating interest rate under the Note shall take effect
simultaneously with the corresponding change in the Prime Rate
or in LIBOR, as applicable. The Borrower shall notify the Bank
in writing of its interest rate election. If the Borrower
shall fail to elect an interest rate in writing for any time
period, the interest rate under the Note shall be Prime Rate
minus 0.50% during that time period. After and during the
continuance of an Event of Default the Borrower shall pay
interest at an annual rate equal to 2.0% in excess of the rate
of interest otherwise provided under this Section. All
payments of principal, interest and fees under this Agreement
shall be made when due to the Bank in immediately available
funds. All computations of interest shall be made by the Bank
on the basis of the actual number of days elapsed in a year of
360 days. Whenever any such payment shall be due on a
non-Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall be
included in the computation of interest. The Bank is expressly
authorized to charge any principal or interest payment, when
due, to the Borrower's demand deposit account maintained at
the Bank, or, if that account shall not contain sufficient
funds, to any other account maintained by the Borrower at the
Bank.
(d) Section 5.1(f) is amended in full to read as follows:
(f) Tangible Net Worth. Maintain as of the end of each fiscal
year Tangible Net Worth of not less than the Minimum Tangible
Net Worth Amount. Maintain as of the end of each fiscal
quarter a ratio of Total Liabilities to Tangible Net Worth of
not more than 0.50 to 1. "Minimum Tangible Net Worth Amount"
shall mean the sum of (i) $42,000,000.00 and (ii) 35% of the
net income (but not net loss) in each fiscal year beginning
with the fiscal year ending June 30, 2005.
(e) Section 5.1(g) is amended in full to read as follows:
Net Income. Obtain a net income of not less than $250,000.00
in each fiscal quarter.
On and after the effective date of this letter amendment, each reference
in the Credit Agreement to "this Agreement", "hereunder", "hereof", or words of
like import referring to the
2
Credit Agreement, and each reference in the Note and the Security Agreement to
"the Credit Agreement", "thereunder", "thereof", or words of like import
referring to the Credit Agreement, shall mean and be a reference to the Credit
Agreement as amended by this letter amendment. The Credit Agreement, as amended
by this letter amendment, is and shall continue to be in full force and effect
and is hereby in all respects ratified and confirmed.
This letter amendment may be executed in any number of counterparts and by
any combination of the parties hereto in separate counterparts, each of which
counterparts shall be an original and all of which taken together shall
constitute one and the same letter amendment.
If you agree to the terms and provisions hereof, please evidence your
agreement by executing and returning one counterpart of this letter amendment to
us. This letter amendment shall become effective as of the date first above
written when and if counterparts of this letter amendment shall have been
executed by you and us.
Very truly yours,
LifeCore Biomedical, Inc.
By /s/ David M. Noel
-----------------------------------
Its VP of Finance and CFO
Agreed as of the date
first above written:
M&I Marshall & Ilsley Bank
By /s/ Steve Nolander
----------------------
Its Officer
By /s/ Sam S. Pepper Jr.
----------------------
Its Vice President
3