Exhibit 10.45
LIBOR
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Addendum To Loan and Security Agreement
This Addendum to Loan and Security Agreement (this 'Addendum') is entered
into as of this 12 day of June, 2003, by and between COMERICA BANK-CALIFORNIA, a
California banking corporation ("Bank") and SPECTRUM ORGANIC PRODUCTS, INC., a
California corporation ("Borrower"). This Addendum supplements the terms of the
Loan and Security Agreement of even date herewith.
1. Definitions.
a. Advance. As used herein, "Advance" means a borrowing requested by
Borrower and made by Bank under the Note, including a LIBOR Option Advance
and/or a Base Rate Option Advance.
b. Business Day. As used herein, "Business Day" means any day except a
Saturday, Sunday or any other day designated as a holiday under Federal or
California statute or regulation.
c. LIBOR. As used herein, "LIBOR" means the rate per annum (rounded upward
if necessary, to the nearest whole 1/8 of l%) and determined pursuant to the
following formula:
LIBOR = Base LIBOR
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100% - LIBOR Reserve Percentage
(1) "Base LIBOR" means the rate per annum determined by Bank at which
deposits for the relevant LIBOR Period would be offered to Bank in the
approximate amount of the relevant LIBOR Option Advance in the
inter-bank LIBOR market selected by Bank, upon request of Bank at
10:00 am. California time, on the day that is the first day of such
LIBOR Period.
(2) "LIBOR Reserve Percentage" means the reserve percentage prescribed by
the Board of Governors of the Federal Reserve System (or any
successor) for "Eurocurrency Liabilities" (as defined in Regulation D
of the Federal Reserve Board, as amended), adjusted by Bank for
expected changes in such reserve percentage during the applicable
LIBOR Period.
d. LIBOR Business Day. As used herein, "LIBOR Business Day" means a
Business day on which dealings in Dollar deposits may be carried out in the
interbank LIBOR market.
e. LIBOR Period. As used herein, "LIBOR Period" means, with respect to a
LIBOR Option Advance:
(1) initially, the period commencing on, as the case may be, the date the
Advance is made or the date on which the Advance is converted to a
LIBOR Option Advance, and continuing for, in every case, a thirty
(30), sixty (60), ninety (90), one hundred eighty (180), two hundred
seventy (270), or three hundred sixty (360) day period thereafter so
long as the LIBOR Option is quoted for such period in the applicable
interbank LIBOR market, as such period is selected by Borrower in the
notice of Advance as provided in the Note or in the notice of
conversion as provided in this Addendum; and
(2) thereafter, each period commencing on the last day of the next
preceding LIBOR Period applicable to such LIBOR Option Advance and
continuing for, in every case, a thirty (30), sixty (60), ninety (90),
one hundred eighty (180), two hundred seventy (270), or three hundred
sixty (360) day period thereafter so long as the LIBOR Option is
quoted for such period in the applicable interbank LIBOR market, as
such period is selected by Borrower in the notice of continuation as
provided in this Addendum.
f. Note. As used herein, "Note" means the Loan and Security Agreement of
even date herewith.
g. Regulation D. As used herein, "Regulation D' means Regulation D of the
Board of Governors of the Federal Reserve System as amended or supplemented from
time to time.
h. Regulatory Development. As used herein, "Regulatory Development" means
any or all of the following: (i) any change in any law, regulation or
interpretation thereof by any public authority (whether or not having the force
of law); (ii) the application of any existing law, regulation or the
interpretation thereof by any public authority (whether or not having the force
of law); and (iii) compliance by Bank with any request or directive (whether or
not having the force of law) of any public authority.
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2. Interest Rate Options. Borrower shall have the following options regarding
the interest rate to be paid by Borrower on Advances under the Note:
a. A rate equal to two and one quarter of one percent (2.25%) above
Bank's LIBOR, (the "LIBOR Option"), which LIBOR Option shall be in effect during
the relevant LIBOR Period; or
b. A rate equal to zero percent (0.00%) above the "Base Rate" as referenced
in the Note and quoted from time to time by Bank as such rate may change from
time to time (the "Base Rate Option").
3. LIBOR Option Advance. The minimum LIBOR Option Advance will not be less
than Five Hundred Thousand and 00/100 Dollars ($500,000.00) for any LIBOR Option
Advance.
4. Payment of Interest on LIBOR Option Advances. Interest on each LIBOR Option
Advance shall be payable pursuant to the terms of the Note. Interest on such
LIBOR Option Advance shall be computed on the basis of a 360-day year and shall
be assessed for the actual number of days elapsed from the first day of the
LIBOR Period applicable thereto but not including the last day thereof.
5. Bank's Records Re: LIBOR Option Advances. With respect to each LIBOR Option
Advance, Bank is hereby authorized to note the date, principal amount, interest
rate and LIBOR Period applicable thereto and any payments made thereon on Bank's
books and records (either manually or by electronic entry) and/or on any
schedule attached to the Note, which notations shall be prima facie evidence of
the accuracy of the information noted.
6. Selection/Conversion of Interest Rate Options. At the time any Advance is
requested under the Note and/or Borrower wishes to select the LIBOR Option for
all or a portion of the outstanding principal balance of the Note, and at the
end of each LIBOR Period, Borrower shall give Bank notice specifying (a) the
interest rate option selected by Borrower; (b) the principal amount subject
thereto; and (c) if the LIBOR Option is selected, the length of the applicable
LIBOR Period. Any such notice may be given by telephone so long as, with respect
to each LIBOR Option selected by Borrower, (i) Bank receives written
confirmation from Borrower not later than three (3) LIBOR Business Days after
such telephone notice is given; and (ii) such notice is given to Bank prior to
10:00 a.m., California time, on the first day of the LIBOR Period. For each
LIBOR Option requested hereunder, Bank will quote the applicable fixed LIBOR
Rate to Borrower at approximately 10:00 a.m., California time, on the first day
of the LIBOR Period. If Borrower does not immediately accept the rate quoted by
Bank, any subsequent acceptance by Borrower shall be subject to a
redetermination of the rate by Bank; provided, however, that if Borrower fails
to accept any such quotation given, then the quoted rate shall expire and Bank
shall have no obligation to permit a LIBOR Option to be selected on such day. If
no specific designation of interest is made at the time any Advance is requested
under the Note or at the end of any LIBOR Period, Borrower shall be deemed to
have selected the Base Rate Option for such Advance or the principal amount to
which such LIBOR Period applied. At any time the LIBOR Option is in effect,
Borrower may, at the end of the applicable LIBOR Period, convert to the Base
Rate Option. At any time the Base Rate Option is in effect, Borrower may convert
to the LIBOR OPTION, and shall designate a LIBOR Period.
7. Default Interest Rate. From and after the maturity date of the Note, or
such earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of the Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to three percent (3.00%)
above the rate of interest from time to time applicable to the Note.
8. Prepayment. In the event that the LIBOR Option is the Applicable Interest
Rate for all or any part of the outstanding principal balance of the Note, and
any payment or prepayment of any such outstanding principal balance of the Note
shall occur on any day other than the last day of the LIBOR Period then
applicable thereto (whether voluntarily, by acceleration, required payment, or
otherwise), or if Borrower elects the LIBOR Option as the Applicable Interest
Rate for all or any part of the outstanding principal balance of the Note in
accordance with the terms and conditions hereof, and, subsequent to such
election, but prior to the commencement of the LIBOR Period applicable thereto,
Borrower revokes such election for any reason whatsoever, or if the Applicable
Interest Rate in respect of any outstanding principal balance of the Note
hereunder shall be changed, for any reason whatsoever, from the LIBOR Option to
the Base Rate Option prior to the last day of the LIBOR Period applicable
thereto, or if Borrower shall fail to make any payment of principal or interest
hereunder at any time that the LIBOR Option is the Applicable Interest Rate
hereunder in respect of such outstanding principal balance of the Note, Borrower
shall reimburse Bank, on demand, for any resulting loss, cost or expense
incurred by Bank as a result thereof, including, without limitation, any such
loss, cost or expense incurred in obtaining, liquidating, employing or
redeploying deposits from third parties. Such amount payable by Borrower to
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Bank may include, without limitation, an amount equal to the excess, if any, of
(a) the amount of interest which would have accrued on the amount so prepaid, or
not so borrowed, refunded or converted, for the period from the date of such
prepayment or of such failure to borrow, refund or convert, through the last day
of the relevant LIBOR Period, at the applicable rate of interest for such
outstanding principal balance of the Note, as provided under this Note, over (b)
the amount of interest (as reasonably determined by Bank) which would have
accrued to Bank on such amount by placing such amount on deposit for a
comparable period with leading banks in the interbank eurodollar market.
Calculation of any amounts payable to Bank under this paragraph shall be made as
though Bank shell have actually funded or committed to fund the relevant
outstanding principal balance of the Note hereunder through the purchase of an
underlying deposit in an amount equal to the amount of such outstanding
principal balance of the Note and having a maturity comparable to the relevant
LIBOR Period; provided, however, that Bank may fund the outstanding principal
balance of the Note hereunder in any manner it deems fit and the foregoing
assumptions shall be utilized only for the purpose of the calculation of amounts
payable under this paragraph. Upon the written request of Borrower, Bank shall
deliver to Borrower a certificate setting forth the basis for determining such
losses, costs and expenses, which certificate shall be conclusively presumed
correct, absent manifest error. Any prepayment hereunder shall also be
accompanied by the payment of all accrued and unpaid interest on the amount so
prepaid. Any outstanding principal balance of the Note which is bearing interest
at such time at the Base Rate Option may be prepaid without penalty or premium.
Partial prepayments hereunder shall be applied to the installments hereunder in
the inverse order of their maturities.
9. Hold Harmless and Indemnification. Borrower agrees to indemnify Bank and to
hold Bank harmless from, and to reimburse Bank on demand for, all losses and
expenses which Bank sustains or incurs as a result of (i) any payment of a LIBOR
Option Advance prior to the last day of the applicable LIBOR Period for any
reason, including, without imitation, termination of the Note, whether pursuant
to this Addendum or the occurrence of an Event of Default; (ii) any termination
of a LIBOR Period prior to the date it would otherwise end in accordance with
this Addendum; or (iii) any failure by Borrower, for any reason, to borrow any
portion of a LIBOR Option Advance.
10. Funding Losses. The indemnification and hold harmless provisions set forth
in this Addendum shall include, without limitation, all losses and expenses
arising from interest and fees that Bank pays to lenders of funds it obtains in
order to fund the loans to Borrower on the basis of the LIBOR Option(s) and all
losses incurred in liquidating or re-deploying deposits from which such funds
were obtained and loss of profit for the period after termination. A written
statement by Bank to Borrower of such losses and expenses shall be conclusive
and binding, absent manifest error, for all purposes. This obligation shall
survive the termination of this Addendum and the payment of the Note.
11. Regulatory Developments Or Other Circumstances Relating To Illegality or
Impracticality of LIBOR. If any Regulatory Development or other circumstances
relating to the interbank Euro-dollar markets shall, at any time, in Bank's
reasonable determination, make it unlawful or impractical for Bank to fund or
maintain, during any LIBOR Period, to determine or charge interest rates based
upon LIBOR, Bank shall give notice of such circumstances to Borrower and:
(i) In the case of a LIBOR Period in progress, Borrower shall, if
requested by Bank, promptly pay any interest which had accrued prior
to such request and the date of such request shall be deemed to be the
last day of the term of the LIBOR Period; and
(ii) No LIBOR Period may be designated thereafter until Bank determines
that such would be practical.
12. Additional Costs. Borrower shall pay to Bank from time to time, upon Bank's
request, such amounts as Bank determines are needed to compensate Bank for any
costs it incurred which are attributable to Bank having made or maintained a
LIBOR Option Advance or to Bank's obligation to make a LIBOR Option Advance, or
any reduction in any amount receivable by Bank hereunder with respect to any
LIBOR Option or such obligation (such increases in costs and reductions in
amounts receivable being herein called "Additional Costs"), resulting from any
Regulatory Developments, which (i) change the basis of taxation of any amounts
payable to Bank hereunder with respect to taxation of any amounts payable to
Bank hereunder with respect to any LIBOR Option Advance (other than taxes
imposed on the overall net income of Bank for any LIBOR Option Advance by the
jurisdiction where Bank is headquartered or the jurisdiction where Bank extends
the LIBOR Option Advance; (ii) impose or modify any reserve, special deposit, or
similar requirements relating to any extensions of credit or other assets of, or
any deposits with or other liabilities of, Bank (including any LIBOR Option
Advance or any deposits referred to in the definition of LIBOR); or (iii) impose
any other condition affecting this Addendum (or any of such extension of credit
or liabilities). Bank shall notify Borrower of any event occurring after the
date hereof which entitles Bank to compensation pursuant to this paragraph as
promptly as practicable after it obtains knowledge thereof and determines to
request such compensation. Determinations by. Bank for purposes of this
paragraph, shall be conclusive, provided that such determinations are made on a
reasonable basis.
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13. Legal Effect. Except as specifically modified hereby, all of the terms and
conditions of the Note remain in full force and effect.
IN WITNESS WHEREOF, the parties have agreed to the foregoing as of the date
first set forth above.
SPECTRUM ORGANIC PRODUCTS, INC., COMERICA BANK-CALIFORNIA,
a California corporation a California banking corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
Title: CFO Title: Vice President
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By:
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Title:
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