SECOND AMENDMENT TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the
"Amendment"), is entered into as of the 23rd day of May, 2003, by and among
NORTHLAND CRANBERRIES, INC. (the "Company"), U.S. BANK NATIONAL ASSOCIATION
("U.S. Bank"), ST. ▇▇▇▇▇▇▇ BANK, F.S.B. ("St. ▇▇▇▇▇▇▇ Bank") and ARK CLO 2000-1
LIMITED ("ARK"). U.S. Bank, St. ▇▇▇▇▇▇▇ Bank and ARK shall sometimes be referred
to individually herein as a "Bank" and collectively as the "Banks".
R E C I T A L S
The Company and the Banks are parties to that certain Amended and Restated
Credit Agreement dated as of November 6, 2001 as amended on March 27, 2003 (the
"Credit Agreement"). The Company has agreed with Cliffstar Corporation
("Cliffstar") to settle the lawsuit filed by the Company against Cliffstar in
the U.S. District Court for the Northern District of Illinois (the "Cliffstar
Litigation") and will receive $28,750,000 from Cliffstar in connection with such
settlement, of which $9,352,622.46 has been paid and the balance of
$19,397,377.54 is to be paid no later than May 30, 2003. The Banks have agreed
to accept from the settlement proceeds less than the full amount payable under
the Cliffstar Note as full payment if, but only if, the remaining settlement
proceeds are received in the Company's account designated below on or before May
30, 2003. The Company and the Banks wish to amend the Credit Agreement as
hereinafter described to reflect the application of such settlement proceeds to
various obligations of the Company, to agree upon the terms upon which the
Cliffstar Note shall be cancelled and to reaffirm the Banks' continuing security
interests in other amounts payable to the Company by Cliffstar.
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Capitalized Terms. All capitalized terms used in this Amendment and not
otherwise defined herein shall have the meaning given such terms in the Credit
Agreement.
2. Application of Settlement Amount. The Company warrants and represents
that a true and correct copy of the Settlement Agreement between Cliffstar and
the Company evidencing the settlement of the Cliffstar Litigation and the
Supplemental Agreement to such Settlement Agreement and any other modification
thereto is attached hereto as Exhibit A (the "Settlement Agreement"). The
Company covenants and agrees that the $28,750,000 settlement amount payable by
Cliffstar to the Company under the Settlement Agreement (the "Settlement
Proceeds") shall be applied by the Company to those outstanding obligations of
the Company as detailed in Exhibit B attached hereto and the Banks hereby
consent to such use of the Settlement Proceeds. Cliffstar has already wire
transferred $9,356,622.46 of the Settlement Proceeds into, and been directed to
wire transfer on or prior to May 30, 2003, the remaining $19,397,377.54 of the
Settlement Proceeds into, the Company's Account No. 199608340 for further credit
to Foothill Capital Corporation (in its capacity as agent, together with such
lenders from time to time parties to the Loan Agreement between Foothill Capital
Corporation and the Company
dated November 6, 2001, referred to as "Foothill"). The Company shall direct
Foothill to, within one (1) Business Day after receipt of the remaining
$19,397,377.54 of the Settlement Proceeds in such account, wire transfer the
amount of $9,750,000 to the Agent in accordance with the wire transfer
instructions set forth in Exhibit C attached hereto for the ratable benefit of
the Banks as a mandatory prepayment of the Term Loan. Such prepayment shall be
applied to installments of principal due under the Term Notes in the inverse
order of their installments as required under Section 3.3(b) of the Credit
Agreement. The Banks acknowledge and agree that, upon receipt by the Company of
a wire transfer from Cliffstar in the aggregate amount of $19,397,377.54 into
Company's Account No. 199608340 for further credit to Foothill on or before May
30, 2003, the Cliffstar Note shall be deemed paid in full and the same may be
delivered to the Company for cancellation. If, for any reason, payment of the
remaining $19,397,377.54 of the Settlement Proceeds is not paid as described
herein on or before May 30, 2003, the Banks' agreement to accept $9,750,000 as
full payment of its rights in and to the Cliffstar Note and to deliver the
Cliffstar Note for cancellation shall each be null and void and of no force and
effect for any purpose whatsoever.
3. Other Cliffstar Payments. Notwithstanding the cancellation of the
Cliffstar Note on the terms provided herein, the Company may at any time or
times after the date hereof receive other Cliffstar Payments consisting of (i)
an Earnout Termination Payment or (ii) a payment on the Earnout Amount
(including, without limitation, any Annual Earnout Amount). The Company
acknowledges and agrees that, in accordance with Section 3.3(b) of the Credit
Agreement, it shall, within one (1) Business Day after receipt by the Company of
each additional 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 Cliffstar
Payment then received by the Company. Such prepayments shall be applied to
installments of principal due under the Term Notes in the inverse order of their
installments.
4. Collateral. The Company and the Banks acknowledge and agree that the
term "Proceeds" as used in the Amended and Restated Collateral Pledge Agreement
dated as of November 6, 2001, by the Company in favor of the Agent (the "Pledge
Agreement") shall include, without limitation, $14,500,000 of the remaining
$19,397,377.54 of the Settlement Proceeds which is attributable to payment of
the Cliffstar Note (if the remaining $19,397,377.54 of the Settlement Proceeds
are paid to the Company as provided in Section 2 hereof on or before May 30,
2003), and the right to pursue collection under the Settlement Agreement
(provided that the Agent's right to pursue such collection shall be subject to
the terms and conditions of the Pledge Agreement). If the remaining
$19,397,377.54 of the Settlement Proceeds are paid to the Company as provided in
Section 2 hereof on or before May 30, 2003, the term "Proceeds" as used in the
Pledge Agreement shall not include $4,897,377.54 of the remaining $19,397,377.54
of the Settlement Proceeds. If the remaining $19,397,377.54 of the Settlement
Proceeds are not paid to the Company on or before May 30, 2003, as provided in
Section 2 hereof, then (i) the Company acknowledges and agrees that the term
"Proceeds" as used in the Pledge Agreement shall include, without limitation,
all Settlement Proceeds payable after May 30, 2003, if recovery is made under
the Settlement Agreement, and (ii) nothing contained in this Agreement or
otherwise shall be deemed to limit the Banks' rights in and to the full amount
of the Cliffstar Note and to pursue all rights and remedies available with
respect to the Cliffstar Note as provided in the Pledge Agreement (and subject
to the Intercreditor Agreement with Foothill) whether under the Settlement
Agreement or otherwise. The Company acknowledges and agrees
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that the obligations of the Company under the Credit Agreement shall continue to
be secured by, among other things, a valid and perfected priority lien in
certain amounts payable to the Company under the Cliffstar Purchase Agreement
pursuant to the terms of the Amended and Restated Security Agreement by the
Company in favor of Agent for itself and for the benefit of the Banks, as the
same may be further amended or restated from time to time. The Company warrants
and represents that a prior lien granted to Foothill in amounts payable under
the Cliffstar Purchase Agreement will be satisfied in full and terminated upon
receipt by Foothill of that portion of the Settlement Proceeds as detailed on
Exhibit B attached hereto.
5. Representations and Warranties. To induce the Banks to enter into this
Amendment, the Company represents and warrants to the Banks, which
representations and warranties shall survive the execution hereof, as follows:
(a) The execution, delivery and performance by the Company of this
Amendment are within its corporate powers, have been duly authorized by all
necessary corporate action and do not and will not contravene or conflict
with any provision of law applicable to the Company, or any charter or
Bylaw provision of the Company or any order, judgment or decree of any
court or other agency of government or any indenture or material agreement
of or affecting the Company or to any of its Properties; and
(b) The Credit Agreement as amended as of the date hereof is the
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms except as may be limited by (i)
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 (ii) any equitable
principles relating to or limiting the rights of creditors generally.
6. Conditions. The effectiveness of the amendments and the consents stated
in this Amendment are subject to each of the following conditions precedent or
concurrent:
(a) No Default. No Default or Event of Default under the Credit
Agreement, as amended hereby, shall have occurred or be continuing.
(b) Foothill Acknowledgment. Foothill shall have executed the
Acknowledgement and Agreement in the form attached hereto as Exhibit D, the
Company shall have executed the authorization at the end of such
Acknowledgment and Agreement and the same shall be in full force and effect
without any change or modification in the provisions thereof.
7. Miscellaneous.
(a) Costs and Expenses. As provided in Section 10.4 of the Credit
Agreement, the Company shall pay, on demand, all reasonable out-of-pocket
costs and expenses of the Agent and the Banks in connection with the
negotiation, preparation, execution and delivery of this Amendment and the
other instruments and documents to be delivered in connection herewith,
including the fees and expenses of counsel for the Agent with respect to
all of the foregoing.
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(b) Binding Nature. This Agreement shall be binding upon each of 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.
(c) Governing Law. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Wisconsin.
(d) Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original,
but all such counterparts together shall constitute but one and the same
document.
(e) References. Any reference to the Credit Agreement contained in any
notice, request, certificate or other document executed concurrently with
or after the execution and delivery of this Amendment shall be deemed to
include this Amendment unless the context shall otherwise require.
(f) Breach. A breach of this Amendment shall constitute a breach of
the Credit Agreement and the Bank shall be entitled to all rights and
remedies thereunder.
(g) Continued Effectiveness. The Credit Agreement, as amended hereby,
and each of the other Loan Documents remains in full force and effect and
shall continue to govern the parties thereto.
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IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date set forth above.
NORTHLAND CRANBERRIES, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, CEO
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice President
ST. ▇▇▇▇▇▇▇ BANK, F.S.B
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
ARK CLO 2000-1 LIMITED
By: Patriarch Partners, LLC
Its Collateral Manager
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Manager
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