Exhibit 10N
SECOND AMENDING AGREEMENT
Made as of December 15, 2003
Among
SUNOPTA INC.
STAKE TECH LP
SUNRICH FOOD GROUP, INC.
as Borrowers
- and -
EACH OF THE FINANCIAL INSTITUTIONS
AND OTHER ENTITIES
FROM TIME TO TIME PARTIES HERETO
as Lenders
- and -
CERTAIN AFFILIATES OF THE BORROWERS
as Obligors
- and -
BANK OF MONTREAL
as Agent
- and -
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
as US Security Agent
SECOND AMENDING AGREEMENT
This second amending agreement is made as of the 15th day of December, 2003
AMONG
SUNOPTA INC.
STAKE TECH LP
SUNRICH FOOD GROUP, INC.
as Borrowers
and
EACH OF THE FINANCIAL INSTITUTIONS
AND OTHER ENTITIES
FROM TIME TO TIME PARTIES HERETO
as Lenders
and
CERTAIN AFFILIATES OF THE BORROWERS
as Obligors
and
BANK OF MONTREAL
as Agent
and
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
as US Security Agent
WITNESSES THAT WHEREAS:
(a) the Lenders severally made credit facilities available to the
Borrowers on the terms and conditions set out in an amended and
restated credit agreement dated as of February 21, 2003 among the
Borrowers, the Lenders, certain affiliates of the Borrowers, as
Obligors, the Agent and the US Security Agent (the "Original
Agreement");
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(b) the parties entered into a first amending agreement dated as of May
16, 2003 (the "First Amending Agreement") pursuant to which the
Original Agreement was amended to provide, among other things, an
increase in the amount available under Facility A by an additional
$2,500,000; and
(c) the parties to the Original Agreement, as amended by the First
Amending Agreement (collectively, the "Credit Agreement"), have
agreed to further amend the Credit Agreement in the manner set forth
herein in order to, among other things, further supplement the
pricing grid under the Credit Agreement, approve various
acquisitions and divestitures, amend various financial covenants and
margins, extend the term of Facility C and acknowledge a corporate
reorganization that SunOpta Inc. (formerly, known as Stake
Technology Ltd.) and various Obligors either have undertaken or will
undertake.
NOW THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which are acknowledged, the parties covenant and
agree with each other as follows:
SECTION 1
INTERPRETATION
1.1 Definitions from Agreement. Capitalized terms defined in the Credit
Agreement have the same meanings in this Second Amending Agreement unless
otherwise defined herein or the context expressly or by necessary
implication requires otherwise. This Second Amending Agreement is
referenced herein as the "Second Amending Agreement". For greater
certainty, this Second Amending Agreement amends the Credit Agreement and
the term "Agreement", as defined in the Credit Agreement, includes (unless
the context expressly or by necessary implication requires otherwise) this
Second Amending Agreement to the extent of such amendments. For purposes
of this Second Amending Agreement, the term "Second Amending Closing Date"
means December 19, 2003.
1.2 New and Revised Definitions. Section 1.1 of the Agreement is hereby
amended as follows:
(a) paragraph (d) of the definition of "Facility B Borrowing Base" is
amended by adding the following text immediately after the word
"Opta" contained therein:
", except where the Eligible Inventory is commodity corn, soy beans,
sunflowers or any other grain product that is commodity in nature,
in which case the margin limit shall be increased from fifty percent
(50%) to seventy-five percent (75%) (and for greater certainty, such
seventy-five percent (75%) limit shall apply only to Eligible
Inventory which is commodity corn and soy beans)";
(b) the following sentence is added immediately at the end of the
definition of "Included Subsidiary":
"For greater certainty, the term "Included Subsidiary" shall not
include any Person which is designated as an Excluded Subsidiary in
accordance with the provisions of this Agreement."
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(c) the definition of "Maturity Date" is amended by deleting clause (b)
thereof in its entirety and replacing it with the following text:
"(b) with respect to Facility C, June 30, 2005.";
(d) the definition of "Obligor" is amended to include reference to "Pro
Organics, Pro Organics East, Sonne Labs, SunOpta Holdings and
SunOpta Financing" immediately after the word "Kettle US" contained
therein;
(e) the following definitions are inserted in the Agreement at the
appropriate alphabetical location:
"Excluded Subsidiary" means any Subsidiary of SunOpta Inc. now or
hereafter designated in writing by the Agent and the Lenders to be
an Excluded Subsidiary for purposes of this Agreement, and the name
of any Excluded Subsidiary shall be set out on Schedule "Y" from
time to time;
"Permitted Investments" means Investments by any Obligor in Persons
or assets principally related to the natural or organic food
business, provided that (i) each Investment shall not exceed a
maximum amount of US$5,000,000 (which amount shall include any Debt
assumed and any projected earn out payments required to be made as a
result of such Investment), (ii) the aggregate of all Investments
made by all Obligors in any fiscal year of SunOpta Inc. shall not
exceed an aggregate maximum amount of US$12,000,000, (iii) each
Investment in any such Person or assets shall be accretive to the
earnings of the relevant Obligor, (iv) each Investment in any such
Person shall be consented to by such Person or its shareholders or
directors, as applicable, and such Investment shall not be or
consist of a hostile takeover, and (v) if the Investment in whole or
in part is to be funded by the proceeds of Advances under Facility A
or Facility B, then after giving effect to the requested Advance
under either Facility A or Facility B, as applicable, there shall
remain available for borrowing under Facility A an amount of at
least $1,500,000 or there shall remain available for borrowing under
Facility B an amount of at least US$1,500,000. For greater
certainty, no separate Investment shall be permitted if such
Investment were to cause the foregoing US$12,000,000 aggregate limit
to be exceeded or the proposed Investment otherwise contravenes the
provisions of this Agreement;
"Pro Organics" means Pro Organics Marketing Inc., a corporation
continued under the laws of Canada, and its successors and permitted
assigns;
"Pro Organics East" means Pro Organics Marketing (East) Inc., a
corporation continued under the laws of Canada, and its successors
and permitted assigns;
"Sonne Labs" Sonne Labs, Inc., a corporation incorporated under the
laws of North Dakota, and its successors and permitted assigns;
"SunOpta Financing" means SunOpta Financing Inc., a corporation
incorporated under the laws of Delaware;
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"SunOpta Holdings" means SunOpta Holdings Inc., a corporation
incorporated under the laws of Delaware; and
"Sunrich Acquisition" means Sunrich Acquisition Inc., a corporation
incorporated under the laws of Delaware.
1.3 Schedules. Section 1.9 of the Credit Agreement is hereby amended by adding
the following text at the end of the Section: "Y - Excluded Subsidiaries".
1.4 References to Stake. For greater certainty, all references to Stake or
Stake Technology Ltd. contained in the Credit Agreement and the Documents
are hereby amended and are now and shall for all purposes be deemed to be
references to SunOpta Inc., a corporation incorporated under the laws of
Canada and its successors and permitted assigns, as the corporate name of
the company was changed, effective as of October 31, 2003, from Stake
Technology Ltd. to SunOpta Inc.
1.5 Headings. The insertion of headings in this Second Amending Agreement is
for convenience of reference only and shall not affect the interpretation
of this Second Amending Agreement.
SECTION 2
INTEREST, FEES AND EXPENSES
2.1 Facility A and B Pricing Grid. The pricing grid contained at clause 4.7(a)
of the Credit Agreement is hereby deleted in its entirety and replaced
with the following pricing grid, being the "Facility A and B Pricing Grid"
as defined in clause 4.7(a):
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Pricing Funded Prime Rate, Libor Rate BA's/LC's/LG's
Level Debt/EBITDA US Base Rate Plus Fee
and Alternate
Base Rate Plus
----------------------------------------------------------------------------------
1. < 1.0:1.0 0.00% 1.00% 1.00%
----------------------------------------------------------------------------------
2. < 1.5:1.0 0.25% 1.25% 1.25%
----------------------------------------------------------------------------------
3. >/= 1.5:1.0 0.50% 1.50% 1.50%
----------------------------------------------------------------------------------
4. >/= 2.0:1.0 0.75% 1.75% 1.75%
----------------------------------------------------------------------------------
5. >/= 2.5:1.0 1.00% 2.00% 2.00%
----------------------------------------------------------------------------------
2.2 Facility C Pricing Grid. The pricing grid contained at clause 4.7(b) of
the Credit Agreement is hereby deleted in its entirety and replaced with
the following pricing grid, being the "Facility C Pricing Grid" as defined
in clause 4.7(b):
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Pricing Funded Debt/EBITDA Alternate Base Rate Libor Rate Plus
Level Plus
--------------------------------------------------------------------------
1. < 1.0:1.0 0.00% 1.00%
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2. < 1.5:1.0 0.75% 1.75%
--------------------------------------------------------------------------
3. >/= 1.5:1.0 1.00% 2.00%
--------------------------------------------------------------------------
4. >/= 2.0:1.0 1.25% 2.25%
--------------------------------------------------------------------------
5. >/= 2.5:1.0 1.50% 2.50%
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SECTION 3
SECURITY
3.1 Additional Obligor Security. Subject to what is stated below, the Agent
and the Lenders hereby waive the requirements set out in clauses 7.2(a)(i)
to (iv) of the Credit Agreement in respect of the provision of all of the
security documents referenced therein by each of Pro Organics, Pro
Organics East and Sonne Labs. Each of Pro Organics, Pro Organics East and
Sonne Labs will, however, each execute a separate guarantee of the
obligations of all of the Obligors owing to the Lenders. Notwithstanding
the foregoing, the Agent, or the Unanimous Lenders may, at any time and in
its or their sole and absolute discretion, as applicable, require that any
or all of such Obligors provide to the Agent or the US Security Agent, as
applicable, all or any of the security documents contemplated in clauses
7.2(a) (i) to (iv) of the Credit Agreement and, at the time of such
request, the waiver contained in this Section shall no longer be binding
as against the Agent and the Lenders and the Obligors shall provide such
agreements as the Agent, the US Security Agent or the Unanimous Lenders
require in the circumstances.
SECTION 4
COVENANTS
4.1 Dispositions. In respect of Section 9.2(b) of the Agreement, the Agent and
the Lenders hereby waive the requirement that the Permitted Proceeds from
the sale, in two parcels, by SunOpta Inc. to Amcan Consolidated
Technologies Corp. of the real property municipally known as ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "Hamilton Pecal Property") be applied in
accordance with Section 5.2 of the Original Agreement, provided, however,
that such Permitted Proceeds (i) in respect of the first parcel
(referenced as Part 3 and 4, Reference Plan 62R-16539 in Hamilton,
Ontario) are not in excess of Cdn.$230,000, and (ii) in respect of the
second parcel (referenced as Part 5 on Reference Plan 62R-16539 in
Hamilton, Ontario) are not in excess of Cdn.$1,325,000. SunOpta Inc. shall
be permitted to use the Permitted Proceeds from the disposition of the
Hamilton Pecal Property for general operating purposes. The foregoing
waiver shall only apply to Permitted Proceeds arising from the sale of the
real property which constitutes the Hamilton Pecal Property and shall not
extend to any Permitted Proceeds arising from the Inventory or any
equipment of any Obligor located at or on the Hamilton Pecal Property.
SunOpta Inc. hereby covenants and agrees in favour of the Lenders that it
will transfer, before the consummation of the sale of the Hamilton Pecal
Property to Amcan
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Consolidated Technologies Corp., all personal property located at or on
the Hamilton Pecal Property to other locations owned by SunOpta Inc. The
Agent and the Lenders will release and discharge their security interest
in the Hamilton Pecal Property at the time of the consummation of the sale
of such property from SunOpta Inc. to Amcan Consolidated Technologies
Corp.
4.2 Limitation on Debt. Section 9.2(d) of the Agreement is hereby amended as
follows:
(a) the reference to "$500,000" is deleted and replaced with reference
to "US$500,000";
(b) the reference to the word "and" contained in clause (vii) of Section
9.2(d) is deleted and replaced with referenced to a ";" and
(c) the following text is inserted immediately at the end of clause
(viii) of Section 9.2(d):
"; and (ix) unsecured Debt owing by Sunrich Food Group to Oracle
Credit Corporation (and its successors and assigns) in an amount not
exceeding US$1,053,933.11 pursuant to a Payment Plan Agreement and a
Payment Schedule entered or to be entered into between Sunrich Food
Group and Oracle Credit Corporation (a true executed copy of which
has been or will be provided to the Agent);"
4.3 Investments. Pursuant to Section 9.2(n) of the Agreement, the Agent and
the Lenders hereby consent to each of the following:
(a) the incorporation by SunOpta Inc. of SunOpta Holdings Inc., a
corporation incorporated or to be incorporated under the laws of
Delaware, all of the common shares of which are or will be owned by
SunOpta Inc.;
(b) the incorporation by SunOpta Holdings Inc. of SunOpta Financing
Inc., a corporation incorporated or to be incorporated under the
laws of Delaware, all of the common shares and preference shares of
which shall be owned by either SunOpta Holdings Inc. or SunOpta
Inc.;
(c) the incorporation by Sunrich of Sunrich Acquisition, a corporation
incorporated or to be incorporated under the laws of Delaware, all
of the common shares of which are or will be owned by Sunrich;
(d) the acquisition by Sunrich Acquisition, for a purchase price of
approximately US$12,200,000, of certain assets of Sigco Sunplant,
Inc. and the assumption by Sunrich Acquisition of certain Debt in
connection therewith, provided that such Debt is non-recourse to any
of the Obligors and provided that only the following Liens are
assumed by Sunrich Acquisition in connection with such asset
acquisition:
(i) Liens in favour of GMAC Commercial Mortgage Corporation, as
attorney in fact for U.S. Bank Trust National Association, as
trustee, over real property owned by Sunrich Acquisition in
Richland County, North Dakota, ▇▇▇▇▇▇ County, Minnesota and
▇▇▇▇▇▇▇ County, Kansas, securing an amount not in excess of
US$2,440,000; and
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(ii) Liens in favour of the Minnesota Department of Transport over
certain equipment owned by Sunrich Acquisition, securing an
amount not in excess of US$132,000;
(e) the acquisition by SunOpta Inc. on or about October 31, 2003, for a
purchase price of approximately Cdn.$6,531,000, all of the issued
and outstanding shares of each of Pro Organics Marketing Inc. (a
corporation incorporated under the laws of British Columbia), Pro
Organics Marketing East Inc. (a corporation incorporated under the
laws of Ontario) and Pro Organics Marketing (Quebec) Inc. (a
corporation incorporated under the laws of Quebec); and
(f) the acquisition by Sunrich Food Group, Inc. on or about October 31,
2003, for a purchase price of approximately US$1,800,000, of all of
the issued and outstanding shares of Sonne Labs, Inc., a corporation
incorporated under the laws of North Dakota and operating as "Dakota
Gourmet".
4.4 Permitted Investments. Section 9.2(n) of the Credit Agreement is hereby
amended by deleting the word "and" that appears immediately before "(C)"
and by adding the following text to the end of such clause:
"; and (D) except for Permitted Investments."
4.5 Excluded Subsidiaries. Section 9.2 of the Credit Agreement is hereby
amended such that new clauses (s) and (t) are added thereto as follows:
"(s) Excluded Subsidiaries. It will not, without the prior written
approval of the Agent and the Lenders, allow or cause any Excluded
Subsidiary to (i) incur any Debt, other than Debt secured by or which
could by secured by Permitted Liens or Debt for amounts payable to
suppliers in the ordinary course of business, (ii) grant, incur or suffer
any Lien other than a Permitted Lien, (iii) purchase or acquire, or make
any commitment to purchase or acquire, any capital stock, equity interest,
or any obligations or other securities of, or any interest in, any Person,
including, without limitation, the establishment or creation of a
Subsidiary, (iv) make or commit to make any acquisition of all or
substantially all of the assets of another Person, or of any business or
division of any Person, including without limitation, by way of merger,
consolidation, amalgamation or other combination or (v) make or commit to
make any advance, loan, extension of credit or capital contribution to or
any other investment in, any Person including any Affiliate or make any
payments in respect thereof.
(t) Debt of Sunrich Acquisition. It will not at any time allow, agree to
or cause the holders of Debt of Sunrich Acquisition (and any related
security in respect thereof) to have recourse to it, either directly or
indirectly, for any such Debt of Sunrich Acquisition. For greater
certainty and without limiting the generality of the foregoing, no Obligor
shall guarantee the obligations or Debt of Sunrich Acquisition or provide
any other financial assistance of whatsoever nature or kind in respect of
the obligations or Debt of Sunrich Acquisition."
4.6 Financial Covenants. Section 9.3(e) of the Credit Agreement is hereby
amended by deleting reference to "US $25,000,000" and by replacing it with
reference to "US$80,000,000".
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4.7 Financial Information. Section 9.4(a) of the Credit Agreement is hereby
amended such that the text "and each Excluded Subsidiary" is inserted
immediately after the word "Obligor" contained in the eighth line of such
Section.
4.8 Pro Organics Marketing (Quebec) Inc. Section 9.1 of the Credit Agreement
is hereby amended by adding the following as clause (v) thereto:
"(v) Pro Organics Marketing (Quebec) Inc. SunOpta will ensure that Pro
Organics Marketing (Quebec) Inc. is and will at all times remain an
inactive corporation and that it will acquire no assets."
SECTION 5
MISCELLANEOUS
5.1 Excluded Subsidiaries. Section 14 of the Credit Agreement is amended by
adding a new Section 14.12 thereto as follows:
"14.12 Excluded Subsidiaries.
The parties hereto acknowledge and agree that each Excluded Subsidiary is
not an Obligor for purposes of this Agreement or any of the Documents. For
greater certainty and without limiting the generality of the foregoing,
each Excluded Subsidiary and its assets shall not at any time be
considered part of the Consolidated Borrower."
5.2 Consent. The Agent and the Lenders hereby consent to the corporate
re-organization of SunOpta Inc. and the Obligors described in Exhibit "I"
hereto. The consent provided herein is conditional upon, with reference to
paragraph 14 of Exhibit "I", SunOpta Inc. causing such existing secured
creditors of Pro Organics and Pro Organics East as may be identified by
the Agent from time to time, to either be paid out in full or to
subordinate and postpone their existing security interests, to the
satisfaction of the Agent, to the security interests of the Agent and the
Lenders in all of the assets of the proposed amalgamated company. The
Obligors hereby represent and warrant that the corporate re-organization
described in Exhibit "I" is true and correct in all respects and that
there is no misstatement in, or omission of information from, Exhibit "I".
SunOpta Inc. hereby covenants that it will advise the Agent in writing of
each step of the corporate re-organization when it occurs or is completed,
promptly upon such occurrence or completion. In addition, SunOpta Inc.
hereby agrees that, at the request of the Agent and the Lenders, it will,
and it will cause the Obligors to, take such action, and execute and
deliver such further documents as may be reasonably necessary or
appropriate to give effect to the provisions and intent of the Credit
Agreement and the Documents.
5.3 Bedford Property Clarification. Pursuant to Section 7 of the First
Amending Agreement, each of the Agent, the US Security Agent and the
Lenders consented to the sale of the real property municipally known as ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ (the "Bedford Property") to Toxikon
Corporation. SunOpta subsequently advised the Lenders that the transaction
with Toxikon Corporation in respect of the Bedford Property was not
consummated and that another purchaser in respect of the Bedford Property
has been located. Given that the transaction which was consented to by the
Agent, the US Security Agent and the Lenders as described in Section 7 of
the First Amending Agreement did not occur, the parties wish to update and
clarify the consent now provided by the Agent, the US Security Agent and
the
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Lenders in respect of the currently proposed sale of the Bedford Property
by Opta Food Ingredients, Inc. to ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("▇▇▇▇▇") whereby
▇▇▇▇▇ has been granted, pursuant to an option agreement, a one year option
to purchase the Bedford Property at a price of approximately US$4,850,000.
The option has been granted over a period of one year and expires
September 22, 2004. As per the terms of the option agreement, SunOpta has
received a US$500,000 non-refundable initial option payment which may be
applied to the sale price at closing. SunOpta will also receive
non-refundable monthly option payments of US$30,000 which will not be
applied to the purchase price at closing. An option deposit in the amount
of US$700,000 is due by ▇▇▇▇▇ on or before December 15, 2003 and SunOpta
will also receive monthly option deposits of US$20,000, all of which
deposits may be applied to the purchase price at closing in respect of the
Bedford Property. The Agent, the US Security Agent and the Lenders hereby
consent to the proposed sale of the Bedford Property as described above
and, upon the consummation of the sale of the Bedford Property, will
release all Liens in respect thereof upon the following conditions being
met to the satisfaction of the Lenders: (a) the Bedford Proceeds are in a
minimum amount of at least US$4,400,000 (as certified by SunOpta to the
Agent); and (b) the Bedford Proceeds are applied in accordance with the
provisions of the Credit Agreement.
SECTION 6
SCHEDULES
6.1 Schedules. The information contained in Exhibit "II" hereto is added to
the Credit Agreement as Schedule Y - Excluded Subsidaries. Schedule R to
the Credit Agreement is hereby deleted and replaced with the updated
Schedule R which is attached as Exhibit "III" hereto. SunOpta Inc. agrees
in favour of the Agent and the Lenders that it will, promptly upon the
completion of the re-organization contemplated in Section 5.2 hereof,
update and provide each of Schedules B, C, G and I to the Credit
Agreement.
SECTION 7
CONDITIONS PRECEDENT
7.1 Conditions Precedent. The effectiveness of this Second Amending Agreement
is subject to and conditional upon the satisfaction of the following
conditions:
(a) Delivery of Documents. The Agent or the US Security Agent, as
applicable, shall have received Sufficient Copies, in form and
substance satisfactory to the Agent or the US Security Agent, as
applicable, of the following:
(i) an Additional Obligor Counterpart duly executed by each of Pro
Organics, Pro Organics East, Sonne Labs, SunOpta Holdings and
SunOpta Financing;
(ii) this Second Amending Agreement duly executed by all of the
parties hereto;
(iii) an Ontario law guarantee from Pro Organics of the obligations
of all Obligors (other than Pro Organics) owing to the
Lenders, an Ontario law guarantee from Pro Organics East of
the obligations of all Obligors (other than Pro Organics East)
owing to the Lenders and an Illinois law guarantee from Sonne
Labs of the obligations of all Obligors (other than Sonne
Labs) owing to the Lenders;
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(iv) from SunOpta Holdings (i) Illinois law guarantee of the
obligations of all Obligors (other than SunOpta Holdings)
owing to the Lenders; (ii) a general security agreement
creating a security interest in all of the personal property,
assets and undertaking of SunOpta Holdings, including
securities (or the equivalent) registered in every location
where SunOpta Holdings has assets; (iii) a certificate in
respect of all insurance policies, including but not limited
to fire and all perils insurance on real property and policies
insuring the assets of SunOpta Holdings, indicating the US
Security Agent and/or Lenders as loss payee; (iv) an offset
agreement regarding cash balances; and (v) a stock transfer
power of attorney.
(v) from SunOpta Financing (i) Illinois law guarantee of the
obligations of all Obligors (other than SunOpta Financing)
owing to the Lenders, (ii) a general security agreement
creating a security interest in all of the personal property,
assets and undertaking of SunOpta Financing, including
securities (or the equivalent) registered in every location
where SunOpta Financing has assets; (iii) a certificate in
respect of all insurance policies, including but not limited
to fire and all perils insurance on real property and policies
insuring the assets of SunOpta Financing, indicating the US
Security Agent and/or the Lenders as loss payee; and (iv) an
offset agreement regarding cash balances.
(vi) a Certificate of each of Pro Organics, Pro Organics East,
Sonne Labs, SunOpta Holdings and SunOpta Financing dated as of
the date hereof certifying that:
A. its constating documents and the by-laws, which shall be
attached thereto, are complete and correct copies and
are in full force and effect;
B. all resolutions and all other authorizations necessary
to authorize the execution and delivery of and the
performance by it of its obligations under the
Additional Obligor Counterpart, the Credit Agreement,
this Second Amending Agreement and the other Documents
to which it is a party and all the transactions
contemplated thereby; and
C. all representations and warranties contained in the
Credit Agreement and in the Second Amending Agreement
are true and correct as if made on the date of the
Certificate.
(vii) on or before January 15, 2004, proforma consolidated financial
statements of SunOpta Inc. for the remainder of 2003 after
giving effect to the acquisition of Pro Organics, Pro Organics
East, Pro Organics Marketing (Quebec) Inc. and Sonne Labs,
together with financial projections for fiscal years 2004 and
2005, prepared in good faith and based upon reasonable
assumptions and consistent with SunOpta Inc.'s due diligence
review in connection with the acquisition of Pro Organics, Pro
Organics East, Pro Organics Marketing (Quebec) Inc. and Sonne
Labs;
(viii)opinions of counsel to Pro Organics, Pro Organics East, Sonne
Labs, SunOpta Holdings and SunOpta Financing, addressed to the
Agent and each Lender and counsel to the Agent with respect
to, inter alia, corporate existence, capacity,
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due authorization, execution, delivery and enforceability of
the Documents executed by, as applicable, each of Pro
Organics, Pro Organics East, Sonne Labs, SunOpta Holdings and
SunOpta Financing;
(ix) a duly completed Environmental Checklist in the Agent's
standard form, or if available Phase I environmental reports,
in respect of each of Pro Organics, Pro Organics East and
Sonne Labs;
(x) duly executed certificates of insurance evidencing the
insurance required under the Credit Agreement in respect of
each Pro Organics, Pro Organics East, Sonne Labs, SunOpta
Holdings and SunOpta Financing, together with those policies
each showing loss payable to the Agent or US Security Agent,
as applicable;
(xi) a Certificate of an officer of SunOpta Inc. certifying that
its purchases of all of the shares of each of Pro Organics,
Pro Organics East, Pro Organics Marketing (Quebec) Inc. and
Sonne Labs have been completed, on terms satisfactory to the
Lenders, and attaching thereto a true copy of the executed
share purchase agreements entered into between SunOpta Inc.
and the vendors, as applicable, all of the shares of each of
Pro Organics, Pro Organics East, Pro Organics Marketing
(Quebec) Inc. and Sonne Labs;
(xii) SunOpta Inc. shall provide to the Agent the original share
certificates issued in its name in respect of the shares it
holds in the capital of each of Pro Organics, Pro Organics
East, Pro Organics Marketing (Quebec) Inc. and SunOpta
Holdings, along with duly executed stock transfer powers of
attorney, in form and substance satisfactory to Agent;
(xiii) SunOpta Holdings shall provide to the US Security Agent the
original share certificates issued in its name in respect of
the shares that it holds in the capital of each of Sunrich
Food Group and SunOpta Financing, along with duly executed
stock transfer powers of attorney, in form and substance
satisfactory to the US Security Agent; and
(xiv) Sunrich Food Group, Inc. shall provide to the US Security
Agent the original share certificate issued in its name in
respect of the shares it holds in the capital of Sonne Labs,
along with a duly executed stock transfer power of attorney,
in form and substance satisfactory to US Security Agent.
(b) Fees. All fees payable in accordance with this Second Amending
Agreement on or before the Second Amending Closing Date (including
legal fees and expenses of the Agent and the US Security Agent)
shall have been paid to the Agent, including, without limitation,
the payment to Agent, for and on behalf of the Lenders, of an
amendment fee of Cdn.$7,500 and an amendment fee of US$29,324.
(c) Due Diligence. The Agent and the Lenders shall have completed their
business, legal and accounting due diligence with results
satisfactory to them.
(d) Material Adverse Change. No Material Adverse Change shall have
occurred with respect to the Obligors.
-12-
(e) Sigco Sunplant, Inc. The Agent and the Lenders shall be satisfied
with the terms and conditions upon which Sunrich Acquisition
acquires certain assets of Sigco Sunplant, Inc. In particular, the
Agent and the Lenders shall be satisfied that any Debt or Liens
assumed by Sunrich Acquisition in connection with such transaction
are non-recourse to the Obligors.
(f) Pro Organics Creditors. The existing Creditors of Pro Organics and
Pro Organics East indicated in Exhibit "IV" shall, on or before
December 31, 2003, discharge their respective security registrations
or have subordinated and postponed such security registrations to
the satisfaction of the Agent.
7.2 Waiver. The conditions stated in Section 7.1 immediately above are
inserted for the sole benefit of the Agent, the US Security Agent and the
Lenders and may only be waived by the Unanimous Lenders, in whole or in
part, with or without terms or conditions.
SECTION 8
ASSUMPTION AND CONFIRMATION
8.1 Continuance of 632100 B.C. Ltd. SunOpta Inc. represents and warrants to
the Agent, the US Security Agent and each Lender that 632100 B.C. Ltd.,
previously a British Columbia corporation, was continued under the Canada
Business Corporation Act as 4198000 Canada Ltd. effective as of October
23, 2003 (the "Continuance"). Attached as Exhibit "V" hereto is a true and
complete copy of the Articles of Continuance and Certificate of
Continuance dated October 23, 2003 in respect of 419800 Canada Ltd. ▇▇▇▇▇▇
▇▇▇▇▇▇ Ltd. hereby confirms and acknowledges that, as the continuing
corporation from the Continuance, it has succeeded, by operation of law,
to all of the business, undertaking, property, assets, rights,
entitlements, franchises, licences and permits of 632100 B.C. Ltd. and to
all of the covenants, agreements, debts, liabilities and obligations of
632100 B.C. Ltd. under the Credit Agreement and all Documents to which
632100 B.C. Ltd. is a party. In furtherance of, and without limiting the
effect of such provisions of law, 4198000 Canada Ltd. hereby irrevocably
and unconditionally (a) assumes, confirms and agrees to perform, observe,
comply with and be bound by each and every covenant, agreement, term,
condition, debt, liability, obligation, security interest, undertaking,
appointment, duty and liability of 632100 B.C. Ltd. contained in, existing
under or created by any agreement entered into by 632100 B.C. Ltd. in
favour of the Agent, the US Security Agent or the Lenders and under any
document or instrument executed and delivered or furnished by 632100 B.C.
Ltd. in connection therewith (collectively, the "Financing Agreements"),
and (b) confirms and agrees that from and after the effective time of the
Continuance all references to 632100 B.C. Ltd. in the Financing Agreements
shall be, and shall be deemed for all purposes to be, references to
4198000 Canada Ltd., all with the same force and effect as if 4198000
Canada Ltd. were a signatory to such Financing Agreements and the
Financing Agreements are in all respects ratified and confirmed and shall
remain in full force and effect.
8.2 Continuance of Kettle Valley Dried Fruits Ltd. SunOpta Inc. represents and
warrants to the Agent, the US Security Agent and each Lender that Kettle
Valley Dried Fruits Ltd., previously a British Columbia corporation, was
continued under the Canada Business Corporation Act as Kettle Valley Dried
Fruits Ltd. ("Kettle Canada") effective as of October 23, 2003 (the
"Kettle Continuance"). Attached as Exhibit "VI" hereto is a true and
complete copy of the Articles of
-13-
Continuance and Certificate of Continuance dated October 23, 2003 in
respect of Kettle Canada. Kettle Canada hereby confirms and acknowledges
that, as the continuing corporation from the Kettle Continuance, it has
succeeded, by operation of law, to all of the business, undertaking,
property, assets, rights, entitlements, franchises, licences and permits
of Kettle Valley Dried Fruits Ltd. and to all of the covenants,
agreements, debts, liabilities and obligations of Kettle Valley Dried
Fruits Ltd. under the Credit Agreement and all Documents to which Kettle
Valley Dried Fruits Ltd. is a party. In furtherance of, and without
limiting the effect of such provisions of law, Kettle Canada hereby
irrevocably and unconditionally (a) assumes, confirms and agrees to
perform, observe, comply with and be bound by each and every covenant,
agreement, term, condition, debt, liability, obligation, security
interest, undertaking, appointment, duty and liability of Kettle Valley
Dried Fruits Ltd. contained in, existing under or created by any agreement
entered into by Kettle Valley Dried Fruits Ltd. in favour of the Agent,
the US Security Agent or the Lenders and under any document or instrument
executed and delivered or furnished by Kettle Valley Dried Fruits Ltd. in
connection therewith (collectively, the "Kettle Financing Agreements"),
and (b) confirms and agrees that from and after the effective time of the
Kettle Continuance all references to Kettle Valley Dried Fruits Ltd. in
the Kettle Financing Agreements shall be, and shall be deemed for all
purposes to be, references to Kettle Canada, all with the same force and
effect as if Kettle Canada were a signatory to such Kettle Financing
Agreements and the Kettle Financing Agreements are in all respects
ratified and confirmed and shall remain in full force and effect.
8.3 Continuance of Integrated Drying Systems Inc. SunOpta Inc. represents and
warrants to the Agent, the US Security Agent and each Lender that
Integrated Drying Systems Inc., previously a British Columbia corporation,
was continued under the Canada Business Corporation Act as Integrated
Drying Systems Inc. ("Integrated Canada") effective as of October 23, 2003
(the "Integrated Continuance"). Attached as Exhibit "VII" hereto is a true
and complete copy of the Articles of Continuance and Certificate of
Continuance dated October 23, 2003 in respect of Integrated Canada.
Integrated Canada hereby confirms and acknowledges that, as the continuing
corporation from the Integrated Continuance, it has succeeded, by
operation of law, to all of the business, undertaking, property, assets,
rights, entitlements, franchises, licences and permits of Integrated
Drying Systems Inc. and to all of the covenants, agreements, debts,
liabilities and obligations of Integrated Drying Systems Inc. under the
Credit Agreement and all Documents to which Integrated Drying Systems Inc.
is a party. In furtherance of, and without limiting the effect of such
provisions of law, Integrated Canada hereby irrevocably and
unconditionally (a) assumes, confirms and agrees to perform, observe,
comply with and be bound by each and every covenant, agreement, term,
condition, debt, liability, obligation, security interest, undertaking,
appointment, duty and liability of Integrated Drying Systems Inc.
contained in, existing under or created by any agreement entered into by
Integrated Drying Systems Inc. in favour of the Agent, the US Security
Agent or the Lenders and under any document or instrument executed and
delivered or furnished by Integrated Drying Systems Inc. in connection
therewith (collectively, the "Integrated Financing Agreements"), and (b)
confirms and agrees that from and after the effective time of the
Integrated Continuance all references to Integrated Drying Systems Inc. in
the Integrated Financing Agreements shall be, and shall be deemed for all
purposes to be, references to Integrated Canada, all with the same force
and effect as if Integrated Canada were a signatory to such Integrated
Financing Agreements and the Integrated Financing Agreements are in all
respects ratified and confirmed and shall remain in full force and effect.
-14-
SECTION 9
REPRESENTATIONS AND WARRANTIES
9.1 Representations. Each of the Obligors represent and warrant to the Agent,
the US Security Agent and the Lenders that:
(a) the Credit Agreement, as amended by this Second Amending Agreement,
is its legal, valid and binding obligation, enforceable against each
of the Obligors in accordance with its terms, subject to (i)
applicable bankruptcy, reorganization, moratorium or similar laws
affecting creditors' generally, (ii) the fact that specific
performance and injunctive relief may only be given at the
discretion of the courts, and (iii) the equitable or statutory
powers of the courts to stay proceedings before them and to stay the
execution of judgments;
(b) the Credit Agreement, as amended by this Second Amending Agreement,
does not conflict with any constating document, agreement,
instrument or undertaking binding upon any Obligor or any of its
properties;
(c) no Default or Event of Default now exists under the Credit Agreement
or will exist after giving effect to this Second Amending Agreement;
(d) all Debt now assumed or to be assumed by Sunrich Acquisition in
connection with the acquisition of certain assets of Sigco Sunplant,
Inc. is and shall at all times be and remain non-recourse to the
Obligors; and
(e) all Debt of Sonne Labs is non-recourse to the Obligors other than
Sonne Labs. For greater certainty, SunOpta represents and warrants
that the Debt owing by Sonne Labs to First Community Bank is in an
amount not in excess of US$350,000 and that such Debt is secured by
certain real property of Sonne Labs and not any other assets of
Sonne Labs. If the Lien granted by Sonne Labs in favour of First
Community Bank is more extensive than that described above, then
SunOpta, at the request of the Agent and the Lenders, will promptly
cause the Debt owing by Sonne Labs to First Community Bank to be
paid out in full and will cause the Lien previously granted in
favour of First Community Bank to be released and discharged.
SECTION 10
GENERAL
10.1 Severability. Any provision of this Second Amending Agreement which is
prohibited by the laws of any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition without invalidating the
remaining terms and provisions hereof.
10.2 Costs, Expenses and Taxes. The Obligors agree to pay, on demand, all
reasonable costs and expenses of the Agent, the US Security Agent and the
Lenders in connection with the preparation, execution, delivery, operation
or enforcement of this Second Amending Agreement and the Credit Agreement
including, without limitation, the reasonable fees and out-of-pocket
expenses of third parties, the Lenders' counsel and other professionals
engaged by the Lenders with respect to the preparation, negotiation and
documentation of this Second Amending Agreement, the Security Documents,
if any, and the related closing documents with respect thereto and with
-15-
respect to advising the Agent, the US Security Agent and the Lenders of
their rights and responsibilities in connection with the continuing
operation of the Credit Agreement, as may be amended by this Credit
Agreement.
10.3 Form of Documents. All documents delivered under or in connection with
this Second Amending Agreement or under or in connection with the Credit
Agreement shall be in form and substance satisfactory to the Agent, the US
Security Agent, the Lenders and their counsel.
10.4 Governing Law. This Second Amending Agreement shall be governed by and
construed in accordance with the laws of the Province of Ontario and of
Canada applicable therein and shall be treated in all respects as an
Ontario contract. The Obligors irrevocably attorn to the non-exclusive
jurisdiction of the courts of the Province of Ontario.
10.5 Governing Documents. The Credit Agreement as amended by this Second
Amending Agreement and all other Documents delivered pursuant to or
referenced in the Credit Agreement as amended by this Second Amending
Agreement constitute the complete agreement of the parties hereto with
respect to the subject matter hereof and supersede any other agreements or
understandings between each of the Obligors, the Agent, the US Security
Agent and the Lenders. Save as expressly amended by this Second Amending
Agreement, all other terms and conditions of the Credit Agreement remain
in full force and effect unamended.
10.6 Time of the Essence. Time shall be of the essence of this Second Amending
Agreement.
10.7 Acknowledgement of Obligors. By signing this Second Amending Agreement,
each of the Obligors, as applicable, confirms that the guarantees given by
each of them to the Agent, the US Security Agent and the Lenders and all
Security Documents given by each of them as collateral security for their
respective obligations, direct, indirect, absolute and/or contingent,
remain in full force and effect and continue to support all of the
Borrowers' indebtedness and liabilities, present and future, to, the
Agent, the US Security Agent and the Lenders including, without
limitation, each Borrower's indebtedness and liabilities under the Credit
Agreement and the Security Documents granted by each such Borrower.
10.8 Counterparts. This Second Amending Agreement may be executed and delivered
in any number of counterparts, each of which when executed and delivered
is an original but all of which taken together constitute one and the same
instrument.
IN WITNESS WHEREOF the parties hereto have caused this Second Amending Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
SUNOPTA INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
▇▇▇▇ ▇▇▇ ▇ ----------------------------
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ LOP 1KO Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: Chief Financial Officer Title: Chairman & CEO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
STAKE TECH LP By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
By: 1510146 Ontario Inc., its General Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Partner Title: Chairman & CEO
-16-
SUNRICH FOOD GROUP, INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
TEMISCA, INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
OPTA FOOD INGREDIENTS CANADA, LTD. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
1510146 ONTARIO INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
3060385 NOVA SCOTIA COMPANY By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
DRIVE ORGANICS CORPORATION By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
SUNRICH, INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
-17-
NORTHERN FOOD AND DAIRY INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
NORDIC ASEPTIC, INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
STAKE TECHNOLOGY LLC By: "▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title:
VIRGINIA MATERIALS INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
INTERNATIONAL MATERIALS & SUPPLIES INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
4157648 CANADA INC. By: "▇▇▇▇▇▇ ▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chairman & CEO
CANADA HARVEST PROCESS LTD. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
4198000 CANADA LTD. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
-18-
OPTA FOOD INGREDIENTS, INC. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
INTEGRATED DRYING SYSTEMS INC. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
KETTLE VALLEY DRIED FRUITS LTD. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
KETTLE VALLEY DRIED FRUIT INC. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
PRO ORGANICS MARKETING INC. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
PRO ORGANICS MARKETING (EAST) INC. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
SONNE LABS, INC. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
SUNOPTA HOLDINGS INC. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
SUNOPTA FINANCING INC. By: "▇▇▇▇ ▇▇▇▇▇▇▇▇"
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: VP & CFO
-19-
BANK OF MONTREAL By: "▇. ▇. ▇▇▇▇▇▇▇"
in its capacity as Agent ----------------------------
Name: ▇. ▇. ▇▇▇▇▇▇▇
Title: Senior Manager, Syndications
Corporate Finance
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ By:
▇▇▇▇ ▇▇▇▇▇ ----------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Name:
▇▇▇ ▇▇▇ Title:
Attention: Senior Manager
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇ TRUST AND SAVINGS BANK By: "▇▇▇▇▇ ▇▇▇▇▇▇"
in its capacity as US Security Agent ----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By:
----------------------------
Name:
Title:
BANK OF MONTREAL By: "▇▇▇▇▇ ▇▇▇▇▇"
in its capacity as Lender ----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Financing Manager
By:
----------------------------
Name:
Title:
BANK OF MONTREAL By: "▇▇▇▇▇ ▇▇▇▇▇▇"
(Chicago Branch) ----------------------------
in its capacity as Lender Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By:
----------------------------
Name:
Title:
-20-
▇▇▇▇▇▇ TRUST AND SAVINGS BANK By: "▇▇▇▇▇ ▇▇▇▇▇▇"
in its capacity as Lender --------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
By:
----------------------------
Name:
Title:
CANADIAN IMPERIAL BANK OF COMMERCE By: "▇▇▇▇▇ ▇▇▇▇▇▇▇▇"
in its capacity as Lender ----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Manager, Commercial Credit
By: "▇. ▇. ▇▇▇▇▇"
----------------------------
Name: ▇. ▇. ▇▇▇▇▇
Title: Manager, Commercial Credit
CIBC New York Agency By: "▇▇▇▇▇▇▇▇▇ ▇▇▇▇"
in its capacity as Lender ----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Executive Director
By:
----------------------------
Name:
Title:
EXHIBIT "I"
Corporate Reorganization Step Plan
1. Stake Technology Ltd. changed its name to SunOpta Inc. effective October
31, 2003.
2. SunOpta Holdings Inc. is or will be incorporated under the laws of
Delaware and it will, pursuant to the implementation of the provisions of
a US Financing and Restructuring Plan prepared by PriceWaterhouseCoopers
for Stake Technology Ltd./SunOpta Inc. (a copy of which has been provided
by SunOpta Inc. to the Agent and the Lenders), become the primary holding
company for the US operating subsidiaries of SunOpta Inc. SunOpta Holdings
Inc. will be wholly-owned by SunOpta Inc.
3. SunOpta Financing Inc. is or will be incorporated under the laws of
Delaware and it will, pursuant to the implementation of the provisions of
a US Financing and Restructuring Plan prepared by PriceWaterhouseCoopers
for Stake Technology Ltd./SunOpta Inc. (a copy of which has been provided
by SunOpta Inc. to the Agent and the Lenders), be owed a significant
amount of intercorporate debt from certain US operating companies, namely
Sunrich Food Group, Inc. and Virginia Materials Inc. The common shares of
SunOpta Financing Inc. will be owned by SunOpta Holdings Inc. and the
preference shares of SunOpta Financing Inc. will, at least temporarily, be
owned by SunOpta Inc.
4. SunOpta Inc. has acquired all of the outstanding shares of each of
Pro-Organics Marketing Inc., Pro-Organics Marketing (East) Inc. and
Pro-Organics Marketing (Quebec) Inc.
5. Sunrich Food Group, Inc. has acquired all of the shares of Sonne Labs,
Inc.
6. Sunrich Acquisition Inc., a wholly owned subsidiary of Sunrich, Inc., will
acquire certain assets of Sigco Sun Products Inc.
7. Stake Tech LP will change its name to SunOpta LP.
8. Stake Tech LLC will change its name to SunOpta LLC.
9. Each of Integrated Drying Systems Inc. (a British Columbia corporation),
Kettle Valley Dried Fruit Ltd. (a British Columbia corporation) and 632100
B.C. Limited (a British Columbia corporation) are or will be continued
under the laws of Canada into federal corporations.
10. Each of Pro-Organics Marketing Inc. and Pro-Organics Marketing (East) Inc.
are to be continued under the laws of Canada into federal corporations.
11. Nordic Aseptic Inc. will change its name to SunOpta Aseptic Inc.
12. Opta Food Ingredients, Inc. will change its name to SunOpta Ingredients,
Inc.
13. Opta Food Ingredients Canada, Ltd. and Canadian Harvest Process Ltd. will
amalgamate and the amalgamated company will be called SunOpta Ingredients
Canada, Ltd.
-2-
14. There will be an amalgamation of each of Integrated Drying Systems Inc.,
Kettle Valley Dried Fruits Ltd., Pro-Organics Marketing Inc., Pro-Organics
Marketing (East) Inc., 4157658 Canada Inc. (formerly Simply Organic Co.
Ltd.), 632100 B.C. Ltd. and Sunrich Valley Inc. into SunOpta Inc.
15. Midwestern Coal Slag Co. LLC will be dissolved.
16. There will be an amalgamation of Northern Food and Dairy Inc. into Sunrich
Food Group, Inc.
EXHIBIT "II"
SCHEDULE Y
EXCLUDED SUBSIDIARIES
Sunrich Acquisition Inc., a corporation incorporated under the laws of Delaware,
all of the issued and outstanding shares of which are owned by Sunrich, Inc.
EXHIBIT "III"
[Updated Schedule R to be provided by SunOpta Inc.]
EXHIBIT "IV"
REQUIRED DISCHARGE/SUBORDINATION AGREEMENTS
---------------------------------------------------------------------------------------------------------------------------
Debtor Creditor Registration Type File No. Action Required
---------------------------------------------------------------------------------------------------------------------------
1. Pro Organics East Vancity Capital Corporation PPSA (BC) 8546733 Discharge
---------------------------------------------------------------------------------------------------------------------------
2. Pro Organics East The Bank of Nova Scotia PPSA (BC) 305934A Discharge
---------------------------------------------------------------------------------------------------------------------------
3. Pro Organics Paccar Leasing PPSA (Ontario) 872844768 Subordination
---------------------------------------------------------------------------------------------------------------------------
4. Pro Organics Vancity Capital Corporation PPSA (BC) 8546726 Discharge
---------------------------------------------------------------------------------------------------------------------------
5. Pro Organics Vancity Capital Corporation PPSA (BC) 8546733 Discharge
---------------------------------------------------------------------------------------------------------------------------
6. Pro Organics CIBC Equipment Finance Limited PPSA (BC) 8598234 Subordination
---------------------------------------------------------------------------------------------------------------------------
7. Pro Organics The Bank of Nova Scotia PPSA (BC) 305939A Discharge
---------------------------------------------------------------------------------------------------------------------------
8. Pro Organics East The Bank of Nova Scotia PPSA (Ontario) ▇▇▇▇▇▇▇▇▇ Discharge
---------------------------------------------------------------------------------------------------------------------------
9. Pro Organics East Vancity Capital Corporation PPSA (Ontario) 855608391 Discharge
---------------------------------------------------------------------------------------------------------------------------
EXHIBIT "V"
See the attached Articles of Continuance in respect of 4198000 Canada Ltd.
EXHIBIT "VI"
See the attached Articles of Continuance in respect of Kettle Valley Dried
Fruits Ltd.
EXHIBIT "VII"
See the attached Articles of Continuance in respect of Integrated Drying Systems
Inc.
