Attached files
| file | filename |
|---|---|
| EX-32.2 - LANDEC CORP \CA\ | v193349_ex32-2.htm |
| EX-31.2 - LANDEC CORP \CA\ | v193349_ex31-2.htm |
| EX-32.1 - LANDEC CORP \CA\ | v193349_ex32-1.htm |
| EX-31.1 - LANDEC CORP \CA\ | v193349_ex31-1.htm |
| EX-23.1 - LANDEC CORP \CA\ | v193349_ex23-1.htm |
| 10-K - LANDEC CORP \CA\ | v193349_10k.htm |
Execution
Copy
First
Amendment To Credit Agreement
This
First Amendment To Credit Agreement (this “Amendment”) is entered into
as of August 9, 2010, by and between Lifecore Biomedical, LLC, a Minnesota
limited liability company (“Borrower”), and Wells Fargo
Bank, National Association (“Bank”).
Recitals
Whereas,
Borrower is currently indebted to Bank pursuant to the terms and conditions of
that certain Credit Agreement, dated and made as of April 30, 2010, by and
between Borrower and Bank (as amended, restated, modified and/or supplemented
from time to time, the “Credit
Agreement”).
Whereas,
Bank and Borrower have agreed to certain changes in the terms and conditions set
forth in the Credit Agreement and have agreed to amend the Credit Agreement to
reflect such changes.
Now,
Therefore, for valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree that the Credit Agreement shall be
amended as follows:
1.
Definitions. Each
capitalized term used and not otherwise defined herein has the meaning ascribed
thereto in the Credit Agreement.
2.
Amendments
to Credit Agreement. Subject to Section 5 hereof, the
Credit Agreement is hereby as follows:
(a)
Section 1.1 of the Credit Agreement is hereby amended by amending and
restating in their entirety each of the following definitions as
follows:
“Net Income” means fiscal
year-to-date after-tax net income from continuing operations of the Companies,
as determined in accordance with GAAP; provided, however, that any amounts
deducted in arriving at Borrower’s Net Income shall be determined exclusive of
(i) non-recurring fees and expenses incurred in connection with the Acquisition
in an aggregate amount not to exceed $2,537,000, (ii) expenses incurred during
the month ended April 30, 2010 relating to a one-time reserve for Accounts and
Inventory in an amount not to exceed $600,000 in the aggregate in connection
with Borrower’s contract with a customer previously disclosed to the Bank, (iii)
expenses incurred during the two months ended April 30, 2010 relating to a
one-time reserve for Inventory in an amount not to exceed $200,000 in the
aggregate, and (iv) expenses related to the one-time adjustment to Inventory in
an aggregate amount not to exceed $1,500,000 as required by GAAP in connection
with the Acquisition and the Warburg Acquisition.
“Quick Ratio” means, as of
the last day of each fiscal quarter of Borrower, the ratio of (i) the
aggregate of unrestricted cash, unrestricted marketable securities and
receivables convertible into cash of the Companies as of the last day of such
fiscal quarter to (b) the aggregate of total current liabilities and,
without duplication, Contingent Purchase Price Payments payable of the Companies
as of the last day of the same fiscal quarter.
(b) Section 1.1
of the Credit Agreement is hereby amended by adding each of the following
definitions thereto in such as manner as to retain proper alphabetic order of
the terms defined therein:
“Code” means the IRC, as
defined herein.
“Warburg Acquisition” means
the acquisition, prior to the Closing Date, by Seller of all the issuing and
outstanding equity interests of Holdings.
(c) Section 6.3(a)(i)
of the Credit Agreement is hereby amended by amending and restating in its
entirety the last paragraph thereof as follows:
For
purposes of this Section 6.3(a)(i) Net Income After Taxes shall be determined
for all fiscal periods ending on or before April 30, 2010, as reported in
Borrower’s audited financial statements for such periods (i.e., since for such
periods Borrower was a “disregarded entity” for tax purposes, as if Borrower was
a C-Corporation under the IRC), and for all fiscal periods ending after
April 30, 2010, to the extent that Borrower is treated as a pass through
entity for tax purposes, by calculating Net Income before taxes for the four
fiscal quarters then ended minus dividends and other distributions paid during
the same four fiscal quarters to each of Holdings and any other member of the
Borrower in connection with its federal income tax liability (and, if
applicable, state income tax liability) attributable to its share of Borrower’s
taxable income (determined in accordance with the IRC) (including estimated tax
payments determined in good faith by Borrower which are required to be made by
its members with respect thereto).
(d) Section 6.3(a)(iii)
of the Credit Agreement is hereby amended and restated in its entirety as
follows:
(iii)Fixed Charge Coverage
Ratio. As of the last day of each fiscal quarter of Borrower
ending during the relevant period set forth below (commencing with the fiscal
quarter ending November 30, 2010), Borrower, together with the other Companies,
will maintain a Fixed Charge Coverage Ratio of not less than the corresponding
ratio set forth opposite such period:
- 2
-
|
Period(s) Ending
|
Fixed Charge Coverage
Ratio shall not be less
than:
|
|
Fiscal
quarters ending
November
30, 2010 through
and
including May 31, 2011
|
1.20
to 1.0
|
|
August 31,
2011
|
1.30
to 1.0
|
|
November
30, 2011
|
1.40
to 1.0
|
|
February 29,
2012 and each
fiscal
quarter ending
thereafter
|
1.50
to
1.0
|
(e) “Exhibit
B-1” to the Credit Agreement is hereby deleted in its entirety and
Exhibit A attached hereto is substituted therefor and shall be deemed for
all purposes the “Exhibit B-1” referred to in the Credit Agreement.
(f) “Exhibit
B-2” to the Credit Agreement is hereby deleted in its entirety and
Exhibit B attached hereto is substituted therefor and shall be deemed for
all purposes the “Exhibit B-2” referred to in the Credit Agreement.
(g) All
references in the Credit Agreement and other Loan Documents to the term “Note”
shall be deemed to mean and refer to the Note as supplemented by the Addendum to
Promissory Note (Swap Agreement Adjustments) executed in connection with this
amendment, a form of which is attached hereto as Exhibit C and incorporated
herein by this reference.
3.
Survival of Terms;
Interpretation. Except as specifically provided herein, all
terms and conditions of the Credit Agreement remain in full force and effect,
without waiver or modification. This Amendment and the Credit
Agreement shall be read together, as one document. The Recitals
hereto, including the terms defined therein, are incorporated herein by this
reference and acknowledged by Borrower to be true, correct and
accurate.
4.
Representations, Warranties
and Covenants. Borrower remakes all representations and
warranties contained in the Credit Agreement (except to the extent that such
representations and warranties relate solely to an earlier date, in which case
Borrower confirms that such representations and warranties were correct as of
the date made) and reaffirm all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Default
or Event of Default, in each case, as defined in the Credit
Agreement.
5.
Effective
Date. This Amendment will become effective as of the date
first set forth above (the “Effective Date”), provided
that all of the following conditions precedent have been satisfied on or before
August 13, 2010:
- 3
-
(a) Bank
shall have received a duly executed original (or, if elected by Bank, an
executed facsimile copy, to be followed promptly by delivery of an executed
original) of each of the following, duly executed by each party thereto and in
form and substance satisfactory to Bank:
(i)
this Amendment;
(ii) the
General Consent and Reaffirmation attached hereto;
(iii)
the Addendum to Promissory Note attached hereto as Exhibit C;
and
(iv)
Such other documents as Bank may require under any other
Section of this Amendment.
(b) All
of the representations and warranties contained herein (or incorporated herein
by reference) are true and correct as of the Effective Date.
(c) All
legal matters incidental hereto shall be reasonably satisfactory to Bank’s
counsel.
6.
Counterparts. This
Amendment may be executed in two or more counterparts, each of which shall be
deemed to be an original but all of which together shall constitute one and the
same instrument. Delivery of an executed counterpart of a signature
page to this Amendment by telefacsimile shall be as effective as delivery of a
manually executed counterpart of this Amendment.
7.
Severability. If
any term or provision of this Amendment shall be deemed prohibited by or invalid
under any applicable law, such provision shall be invalidated without affecting
the remaining provisions of this Amendment or the Credit Agreement.
8.
Governing
Law. This Amendment shall be governed by and construed in
accordance with the internal laws of the State of California.
9.
Non-Impairment. Except
as expressly provided herein, nothing in this Agreement shall alter or affect
any provision, condition, or covenant contained in the Loan Documents or affect
or impair any rights, powers, or remedies of Bank, it being the intent of the
parties hereto that the provisions of the Loan Documents shall continue in full
force and effect except as expressly modified hereby.
[Signatures
on Next Page]
- 4
-
In Witness Whereof, the parties hereto
have caused this Amendment to be executed as of the day and year first written
above.
|
Lifecore
Biomedical, LLC,
a
Minnesota limited liability company
|
Wells
Fargo Bank,
National
Association
|
||||
|
By:
|
/s/
Dennis J. Allingham
|
By:
|
/s/
Tim Palmer
|
||
|
Dennis
J. Allingham
|
Name:
|
Tim
Palmer
|
|||
|
President
and Chief Executive Officer
|
Title:
|
Vice President | |||
Signature
Page to First Amendment To Credit Agreement
General
Consent and Reaffirmation
Each of
the undersigned guarantors of, and/or third party pledgors having pledged
property securing, all indebtedness of Lifecore Biomedical, LLC
hereby: (i) consents to the foregoing First Amendment to Credit
Agreement dated as of August 9, 2010; (ii) reaffirms its obligations
under its respective guaranty, security agreement and/or pledge agreement;
(iii) reaffirms its waivers of each and every one of the defenses to such
obligations as set forth in its respective guaranty, security agreement and/or
pledge agreement; and (iv) reaffirms that its obligations under its
respective guaranty, security agreement and/or pledge agreement are separate and
distinct from the obligations of any other party under such First Amendment to
Credit Agreement, the Credit Agreement referred to therein and the other Loan
Documents (as defined in the Credit Agreement).
Agreed
and Acknowledged as of August 9, 2010:
|
Lifecore
Biomedical, Inc.
|
Apio,
Inc.
|
||||
|
By:
|
/s/ Dennis J. Allingham |
By:
|
/s/
Gary T. Steele
|
||
|
Dennis
J. Allingham
|
Gary
T. Steele
|
||||
|
President/Secretary
|
Secretary
|
||||
|
Cal
Ex Trading Company
|
Landec
AG, LLC
|
||||
|
By:
|
/s/
Gary T. Steele
|
By:
|
/s/
Gary T. Steele
|
||
|
Gary
T. Steele
|
Gary
T. Steele
|
||||
|
Secretary
|
President/Chief
Executive Officer
|
||||
|
Landec
Corporation
|
|
||||
|
By:
|
/s/
Gary T. Steele
|
||||
|
Gary
T. Steele
|
|||||
|
President/Chief
Executive Officer/
Chairman
of the Board
|
|||||
Signature
Page to General Consent and Reaffirmation
|
Exhibit
A
|
|
to
First Amendment to Credit Agreement
|
Exhibit
B-1
Form
of Compliance Certificate
(Lifecore
Biomedical, LLC)
|
To:
|
Caroline
Peyton
|
Wells Fargo Bank, National
Association
|
Date:
|
__________________,
201__
|
|
Subject:
|
Lifecore
Biomedical, LLC
|
Financial
Statements
In
accordance with our Credit Agreement, dated as of April 30, 2010 (the “Credit Agreement”), attached
are the financial statements of Lifecore Biomedical (the “Borrower”) as of and for
________________, 20___ (the “Reporting Date”) and the
year-to-date period then ended (the “Current
Financials”). All terms used in this certificate have the
meanings given in the Credit Agreement.
I certify
that the Current Financials have been prepared in accordance with GAAP, subject
to year-end audit adjustments, and fairly present the Companies’ financial
condition as of the date thereof.
Events of
Default. (Check one):
|
|
o
|
The
undersigned does not have knowledge of the occurrence of a Default or
Event of Default under the Credit Agreement except as previously reported
in writing to Bank.
|
|
|
o
|
The
undersigned has knowledge of the occurrence of a Default or Event of
Default under the Credit Agreement not previously reported in writing to
Bank and attached hereto is a statement of the facts with respect to
thereto. Borrower acknowledges that Bank may impose the Default
Rate at any time during the resulting Default
Period.
|
Financial
Covenants. I further hereby certify as follows:
1.
Minimum Net Income After
Taxes. Pursuant to
Section 6.3(a)(i)(A) of the Credit Agreement, as of the Reporting Date, the
Companies’ Net Income After Taxes, measured on a trailing four quarter basis
(other than the four quarters ending August 31, 2010), was $___________ which
o
satisfies o does
not satisfy the requirement that such amount be not less than $1.00 for the four
fiscal quarters then ended.
- A-1
-
2.
Minimum Net Income After
Taxes. Pursuant to
Section 6.3(a)(i)(B) of the Credit Agreement, as of the Reporting Date, the
Companies’ Net Income After Taxes, measured for the fiscal quarter ended August
31, 2010, was $___________ which o
satisfies o does
not satisfy the requirement that such amount be not less than $500,000 for the
fiscal quarter then ended.
3.
Minimum Net Income After
Taxes. Pursuant to Section 6.3(a)(i)(C) of the Credit
Agreement, as of the Reporting Date, the Companies’ o did
not have o had
Net Income After Taxes less than or equal to $1.00 for two (2) consecutive
fiscal quarters during the four fiscal quarters then ended.
4.
Minimum Quick
Ratio. Pursuant to
Section 6.3(a)(ii) of the Credit Agreement, as of the Reporting Date, the
Companies’ Quick Ratio was _____ : 1.0 which o
satisfies o does
not satisfy the requirement that ratio must not be less than (i) 1.1 to 1.0 for
each fiscal quarter ending from the Closing Date through and including the
fiscal quarter ending May 31, 2011 and (ii) 1.25 to 1.0 for each fiscal
quarter ending thereafter.
5.Fixed Charge Coverage
Ratio. Pursuant to
Section 6.3(a)(iii) of the Credit Agreement, the Companies’ Fixed Charge
Coverage Ratio for the four fiscal quarters ending on the Reporting Date, was
____ : 1.0, which o
satisfies o does
not satisfy the requirement that such ratio be not less than _____ : 1.0 during
such period as set forth in table below:
|
Period(s) Ending
|
Fixed Charge Coverage
Ratio shall not be less
than:
|
|
Fiscal
quarters ending
November
30, 2010 through
and
including May 31, 2011
|
1.20
to 1.0
|
|
August 31,
2011
|
1.30
to 1.0
|
|
November
30, 2011
|
1.40
to 1.0
|
|
February 29,
2012 and each
fiscal
quarter ending
thereafter
|
1.50
to
1.0
|
6.
Capital
Expenditures. Pursuant to
Section 6.3(a)(iv) of the Credit Agreement, the Companies have expended
$__________________ in the aggregate during the last full fiscal year, ending
May 31, 201___, for Capital Expenditures, which o
satisfies o does
not satisfy the requirement that such expenditures not exceed $3,000,000 in the
aggregate during such year.
- A-2
-
Attached
hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These
computations were made in accordance with GAAP (except for the computation of
Net Income to the extent Net Income is determined without giving effect to the
amounts deducted arriving in such Net Income as set forth in the proviso of such
definition).
|
Lifecore
Biomedical, LLC
|
|||
|
By
|
|||
|
Its
|
Chief
Financial Officer
|
||
- A-3
-
|
Exhibit
B
|
|
to
First Amendment to Credit Agreement
|
Exhibit
B-2
Form
of Compliance Certificate
(Landec
Corporation)
|
To:
|
Caroline
Peyton
|
Wells Fargo Bank, National
Association
|
Date:
|
__________________,
201__
|
|
Subject:
|
Lifecore
Biomedical, LLC
|
Financial
Statements
In
accordance with that certain Credit Agreement, dated as of April 30, 2010
(the “Credit
Agreement”) between Lifecore Biomedical, LLC (the “Borrower” and Wells Fargo
Bank, National Association (“Bank”), attached are the
consolidated financial statements of Landec Corporation (the “Parent”) as of and for
________________, 20___ (the “Reporting Date”) and the
year-to-date period then ended (the “Current
Financials”). All terms used in this certificate have the
meanings given in the Credit Agreement.
I certify
that the Current Financials have been prepared in accordance with GAAP, subject
to year-end audit adjustments, and fairly present Parent’s consolidated
financial condition as of the date thereof.
Financial Covenants.
I further hereby certify as follows:
1.
Minimum Net Income After
Taxes. Pursuant to
Section 6.3(b)(i) of the Credit Agreement, as of the Reporting Date, the
Net Income after taxes of Parent and its Subsidiaries, measured on a trailing
four quarter basis, was $___________ which o
satisfies o does
not satisfy the requirement that such amount be not less than $1.00 for the four
fiscal quarters then ended.
2.
Leverage
Ratio. Pursuant to Section 6.3(b)(ii) of the Credit
Agreement, as of the Reporting Date, the ratio of Funded Debt of Parent and its
Subsidiaries as of the Reporting Date to EBITDA of Parent and its Subsidiaries
for the four fiscal quarters of Parent and its Subsidiaries ending on the
Reporting Date, was ____ : 1.0, which o
satisfies o does
not satisfy the requirement that such ratio be not greater than 2.0 to
1.0.
- B-1
-
Attached
hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP.
|
Landec
Corporation
|
|||
|
By
|
|||
|
Its
|
Chief
Financial Officer
|
||
- B-2
-
|
Exhibit
C
|
|
to
First Amendment to Credit Agreement
|
|
Form
of
|
|
Addendum
to Promissory Note (Swap Agreement
Adjustments)
|
Execution
Copy
ADDENDUM
TO PROMISSORY NOTE
(SWAP
AGREEMENT ADJUSTMENTS)
THIS ADDENDUM is attached to and made a
part of that certain promissory note executed by LIFECORE BIOMEDICAL, LLC
(“Borrower”) and payable to WELLS FARGO BANK, NATIONAL ASSOCIATION (“Bank”), or
order, dated April 30, 2010, in the original principal amount of Twenty
Million Dollars ($20,000,000.00) (the “Note”).
The following provisions are hereby
incorporated into the Note to reflect the interest rate adjustments agreed to by
Bank and Borrower in connection with any interest rate swap agreement entered
into in connection with this Note:
SWAP
AGREEMENT PROVISIONS:
Notwithstanding
anything to the contrary set forth herein, at any time during which an interest
rate swap confirmation between Borrower and Bank (a “Swap Confirmation”) is in
effect with respect to all or a portion of the principal balance outstanding
under this Note, the following revisions to this Note shall be in effect with
respect to that portion of the principal balance outstanding under this Note
which is subject to the Swap Confirmation (the “Swap Portion”), but not with
respect to any portion of the principal balance outstanding under this Note
which is not subject to the Swap Confirmation:
|
(a)
|
With
respect to the Swap Portion, no Daily Three Month LIBOR Rate interest
option shall be available
hereunder.
|
|
(b)
|
With
respect to the Swap Portion, the definition of “Fixed Rate Term” shall be
amended and restated to read as
follows:
|
“Fixed Rate Term” means a period of one
(1) month during which the Swap Portion bears interest determined in relation to
LIBOR, with the understanding that (i) the initial Fixed Rate Term shall
commence on the later of (A) the effective date stated on the Swap Confirmation
and (B) the date this Note is initially disbursed and shall continue up to, but
shall not include, the first day of the next occurring calculation period
designated in the Swap Confirmation, (ii) there shall be successive Fixed Rate
Terms thereafter, each of which shall commence automatically, without notice to
or consent from Borrower, and run concurrently with the calculation period
designated in the Swap Confirmation and (iii) if, on the first day of the last
Fixed Rate Term applicable hereto the remaining term of this Note is less than
one (1) month, said Fixed Rate Term shall be in effect only until the scheduled
maturity date hereof, except that if the scheduled maturity date hereof is not a
Business Day, then such Fixed Rate Term shall be extended to the next succeeding
Business Day.
- C-1
-
|
(c)
|
The
Swap Portion shall be in an amount equal to or greater than Two Hundred
Fifty Thousand Dollars
($250,000.00).
|
Borrower
understands and acknowledges that each Swap Confirmation constitutes an
independent agreement between Borrower and Bank and that nothing contained in
this Note shall be construed as amending or modifying any such Swap Confirmation
or be interpreted in any way as inferring or creating an obligation on the part
of Bank to amend or modify such Swap Confirmation, based on any action that may
be taken by Borrower in respect of this Note. Further, Borrower
acknowledges that Borrower is responsible for verifying the terms of any Swap
Confirmation into which it enters; understands the effect of a Swap Confirmation
having payment dates that do not concur exactly with the payment dates of this
Note; and agrees that any Swap Confirmation may still be considered in effect
with respect to any principal portion of this Note even if the payment dates
thereon do not concur exactly with the payment dates of this Note.
[Signatures
on Next Page]
- C-2
-
IN WITNESS WHEREOF, this Addendum has
been executed as of August 9, 2010.
|
LIFECORE
BIOMEDICAL, LLC,
a
Minnesota limited liability company
|
||
|
By:
|
/s/ Dennis J. Allingham | |
|
Dennis
J. Allingham
|
||
|
President
and Chief Executive Officer
|
||
ACCEPTED
AND AGREED:
|
WELLS
FARGO BANK,
NATIONAL
ASSOCIATION
|
|||
|
By:
|
/s/ Tim Palmer | ||
|
Name:
|
Tim Palmer | ||
|
Title:
|
Vice President | ||
Signature
Page to Addendum To Promissory Note
(Swap
Agreement Adjustments)
- C-3
-