SECOND AMENDED AND RESTATED SECURED CREDIT AGREEMENT
Among
PILGRIM'S PRIDE CORPORATION
And
▇▇▇▇▇▇ TRUST AND SAVINGS BANK
INDIVIDUALLY AND AS AGENT
AND
The Lenders from time to time Parties Hereto
AS LENDERS
Dated as of November 5, 1999
TABLE OF CONTENTS
Pilgrim's Pride Corporation
SECOND AMENDED AND RESTATED SECURED CREDIT AGREEMENT
SECTION 1.1. THE REVOLVING CREDIT
Section 1.2. The Notes
SECTION 1.3. INTEREST RATES
Section 1.4. Conversion and Continuation of Revolving Credit
Loans
SECTION 1.5. LETTERS OF CREDIT
Section 1.6. Reimbursement Obligation
SECTION 1.7. MANNER OF BORROWING AND RATE SELECTION
Section 1.8. Participation in L/Cs
SECTION 1.9. CAPITAL ADEQUACY
Section 1.10. The Bond Letter of Credit
SECTION 1.11. BOND REIMBURSEMENT OBLIGATION
Section 1.12. Participation in the Bond L/C
SECTION 1.13. REDUCTIONS AND REINSTATEMENTS
Section 1.14. Liability of ▇▇▇▇▇▇
SECTION 1.15. RELIANCE BY ▇▇▇▇▇▇
Section 1.16. Notice of Default
SECTION 1.17. INDEMNIFICATION
Section 1.18. Documents and Reports
SECTION 1.19. AMENDMENTS
Section 2. The Competitive Bid Facility
SECTION 2.1. AMOUNT AND TERM
Section 2.2. Competitive Bid Requests
SECTION 2.3. SUBMISSION OF COMPETITIVE BIDS
Section 2.4. Notice of Bids
SECTION 2.5. ACCEPTANCE OR REJECTION OF BIDS
Section 2.6. Notice of Acceptance or Rejection of Bid
SECTION 2.7. RESTRICTIONS ON BID LOANS
Section 2.8. Minimum Amount
SECTION 2.9. THE NOTES
Section 2.10. Term of and Interest on Bid Loans
SECTION 2.11. DISBURSEMENT OF BID LOANS
Section 2.12. Reliance on Telephonic Notices; Indemnity
SECTION 2.13. TELEPHONIC NOTICE
Section 3. Fees, Prepayments, Terminations and Place and
Application of Payments.
SECTION 3.1. FACILITY FEE
Section 3.2. Agent's Fee
SECTION 3.3. OPTIONAL PREPAYMENTS
Section 3.4. Mandatory Prepayments - Borrowing Base
SECTION 3.5. PLACE AND APPLICATION OF PAYMENTS
Section 4. Definitions
SECTION 4.1. CERTAIN TERMS DEFINED
Section 4.2. Accounting Terms
SECTION 5. REPRESENTATIONS AND WARRANTIES.
Section 5.1. Organization and Qualification
SECTION 5.2. SUBSIDIARIES
Section 5.3. Financial Reports
SECTION 5.4. LITIGATION; TAX RETURNS; APPROVALS
Section 5.5. Regulation U
SECTION 5.6. NO DEFAULT
Section 5.7. ERISA
SECTION 5.8. SECURITY INTERESTS AND DEBT
Section 5.9. Accurate Information
SECTION 5.10. ENVIRONMENTAL MATTERS
Section 5.11. Enforceability
SECTION 5.12. RESTRICTIVE AGREEMENTS
Section 5.13. Labor Disputes
SECTION 5.14. NO VIOLATION OF LAW
Section 5.15. No Default Under Other Agreements
SECTION 5.16. STATUS UNDER CERTAIN LAWS
Section 5.17. Federal Food Security Act
SECTION 5.18. FAIR LABOR STANDARDS ACT
Section 5.19. Organization and Qualification of the Guarantor
SECTION 6. CONDITIONS PRECEDENT
Section 6.1. General
SECTION 6.2. EACH EXTENSION OF CREDIT
Section 7. Covenants
SECTION 7.1. MAINTENANCE
Section 7.2. Taxes
SECTION 7.3. MAINTENANCE OF INSURANCE
Section 7.4. Financial Reports
SECTION 7.5. INSPECTION AND REVIEWS
Section 7.6. Consolidation and Merger
SECTION 7.7. TRANSACTIONS WITH AFFILIATES
Section 7.8. Leverage Ratio
SECTION 7.9. TANGIBLE NET WORTH
Section 7.10. Current Ratio
SECTION 7.11. NET TANGIBLE ASSETS TO TOTAL LIABILITIES
Section 7.12. Fixed Charge Coverage Ratio
SECTION 7.13. MINIMUM NET WORKING CAPITAL
Section 7.14. Intentionally Omitted
SECTION 7.15. DIVIDENDS AND CERTAIN OTHER RESTRICTED PAYMENTS
Section 7.16. Liens
SECTION 7.17. BORROWINGS AND GUARANTIES
Section 7.18. Investments, Loans and Advances
SECTION 7.19. SALE OF PROPERTY
Section 7.20. Notice of Suit, Adverse Change in Business or
Default
SECTION 7.21. ERISA
Section 7.22. Use of Loan Proceeds
SECTION 7.23. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE
Section 7.24. Additional Information
SECTION 7.25. SUPPLEMENTAL PERFORMANCE
Section 7.26. Intentionally Omitted
SECTION 7.27. COMPLIANCE WITH LAWS, ETC.
Section 7.28. Environmental Covenant
SECTION 7.29. NEW SUBSIDIARIES
Section 7.30. Guaranty Fees
SECTION 7.31. KEY MAN LIFE INSURANCE
Section 7.32. Sale and Leasebacks
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1. Definitions
SECTION 8.2. REMEDIES FOR NON-BANKRUPTCY DEFAULTS
Section 8.3. Remedies for Bankruptcy Defaults
SECTION 8.4. L/CS
Section 8.5. Remedies under the Bond Documents
SECTION 9. CHANGE IN CIRCUMSTANCES REGARDING FIXED RATE LOANS
Section 9.1. Change of Law
SECTION 9.2. UNAVAILABILITY OF DEPOSITS OR INABILITY TO
ASCERTAIN THE ADJUSTED EURODOLLAR RATE OR
ADJUSTED CD RATE
Section 9.3. Taxes and Increased Costs
SECTION 9.4. FUNDING INDEMNITY
Section 9.5. Lending Branch
SECTION 9.6. DISCRETION OF BANK AS TO MANNER OF FUNDING
Section 10. The Agent
SECTION 10.1. APPOINTMENT AND POWERS
Section 10.2. Powers
SECTION 10.3. GENERAL IMMUNITY
Section 10.4. No Responsibility for Loans, Recitals, etc
SECTION 10.5. RIGHT TO INDEMNITY
Section 10.6. Action Upon Instructions of Banks.
SECTION 10.7. EMPLOYMENT OF AGENTS AND COUNSEL
Section 10.8. Reliance on Documents; Counsel
SECTION 10.9. MAY TREAT PAYEE AS OWNER
Section 10.10. Agent's Reimbursement
SECTION 10.11. RIGHTS AS A LENDER
Section 10.12. Bank Credit Decision
SECTION 10.13. RESIGNATION OF AGENT
Section 10.14. Duration of Agency
SECTION 11. MISCELLANEOUS.
Section 11.1. Amendments and Waivers
SECTION 11.2. WAIVER OF RIGHTS
Section 11.3. Several Obligations
SECTION 11.4. NON-BUSINESS DAY
Section 11.5. Survival of Indemnities
SECTION 11.6. DOCUMENTARY TAXES
Section 11.7. Representations
SECTION 11.8. NOTICES
Section 11.9. Costs and Expenses; Indemnity
SECTION 11.10. COUNTERPARTS
Section 11.11. Successors and Assigns
SECTION 11.12. NO JOINT VENTURE
Section 11.13. Severability
SECTION 11.14. TABLE OF CONTENTS AND HEADINGS
Section 11.15. Participants
SECTION 11.16. ASSIGNMENT OF COMMITMENTS BY BANK
Section 11.17. Sharing of Payments
SECTION 11.18. JURISDICTION; VENUE
Section 11.19. Lawful Rate
SECTION 11.20. GOVERNING LAW
Section 11.21. Limitation of Liability
SECTION 11.22. NONLIABILITY OF LENDERS
Section 11.23. No Oral Agreements.
SIGNATURE PAGE
Exhibit A Secured Revolving Credit Note
Exhibit B Application and Agreement for Letter of Credit
Exhibit C Environmental Disclosure
Exhibit D Permitted Liens
Exhibit E Form of Legal Opinion
Exhibit F Compliance Certificate
Exhibit G Borrowing Base Certificate
Exhibit H Subsidiaries
Exhibit I Intentionally Omitted
Exhibit J Labor Disputes
Exhibit K Existing Investments
Exhibit L Competitive Bid Request Confirmation
Exhibit M Confirmation of Notice of Competitive Bid Request
Exhibit N Confirmation of Competitive Bid
Pilgrim's Pride Corporation
SECOND AMENDED AND RESTATED
Secured Credit Agreement
▇▇▇▇▇▇ Trust and Savings Bank
Chicago, Illinois
The lenders from time to time
parties hereto
Ladies and Gentlemen:
The undersigned, PILGRIM'S PRIDE CORPORATION, a Delaware corporation
(the "COMPANY"), refers to the Amended and Restated Secured Credit
Agreement dated as of August 11, 1997, as amended and currently in effect
between the Company and you (such Secured Credit Agreement as so amended is
hereinafter referred to as the "CREDIT AGREEMENT") pursuant to which you
agreed to make a revolving credit (the "REVOLVING CREDIT") available to the
Company, all as more fully set forth therein. Each of you is hereinafter
referred to individually as "BANK" and collectively as "BANKS." ▇▇▇▇▇▇
Trust and Savings Bank in its individual capacity is sometimes referred to
herein as "▇▇▇▇▇▇", and in its capacity as Agent for the Banks is
hereinafter in such capacity called the "AGENT." The Company requests you
to make certain further amendments to the Credit Agreement and, for the
sake of convenience and clarity, to restate the Credit Agreement in its
entirety as so amended. Accordingly, upon your acceptance hereof in the
space provided for that purpose below and upon satisfaction of the
conditions precedent to effectiveness hereinafter set forth, Section 1
through 11 of the Credit Agreement and Exhibits A through N thereto shall
be amended and as so amended shall be restated in their entirety to read as
follows:
SECTION 1. THE REVOLVING CREDIT.
SECTION 1.1. THE REVOLVING CREDIT. (a) Subject to all of the terms and
conditions hereof, the Banks agree, severally and not jointly, to extend a
Revolving Credit to the Company which may be utilized by the Company in the
form of loans (individually a "REVOLVING CREDIT LOAN" and collectively the
"REVOLVING CREDIT LOANS"), and L/Cs (as hereinafter defined). The
aggregate principal amount of all Revolving Credit Loans under the
Revolving Credit plus the aggregate principal amount of all Bid Loans
outstanding under this Agreement plus the amount available for drawing
under all L/Cs and the aggregate principal amount of all unpaid
Reimbursement Obligations (as hereinafter defined) at any time outstanding
shall not exceed the lesser of (i) the sum of the Banks' Revolving Credit
Commitments (as hereinafter defined) in effect from time to time during the
term of this Agreement (as hereinafter defined) or (ii) the Borrowing Base
as determined on the basis of the most recent Borrowing Base Certificate.
The Revolving Credit shall be available to the Company, and may be availed
of by the Company from time to time, be repaid (subject to the restrictions
on prepayment set forth herein) and used again, during the period from the
date hereof to and including May 31, 2004 (the "TERMINATION DATE").
(b) At any time not earlier than 120 days prior to, nor later than 60
days prior to, the date that is two years before the Termination Date then
in effect (the "ANNIVERSARY DATE"), the Company may request that the Banks
extend the then scheduled Termination Date to the date one year from such
Termination Date. If such request is made by the Company each Bank shall
inform the Agent of its willingness to extend the Termination Date no later
than 20 days prior to such Anniversary Date. Any Bank's failure to respond
by such date shall indicate its unwillingness to agree to such requested
extension, and all Banks must approve any requested extension. At any time
more than 15 days before such Anniversary Date the Banks may propose, by
written notice to the Company, an extension of this Agreement to such later
date on such terms and conditions as the Banks may then require. If the
extension of this Agreement to such later date is acceptable to the Company
on the terms and conditions proposed by the Banks, the Company shall notify
the Banks of its acceptance of such terms and conditions no later than the
Anniversary Date, and such later date will become the Termination Date
hereunder and this Agreement shall otherwise be amended in the manner
described in the Banks' notice proposing the extension of this Agreement
upon the Agent's receipt of (i) an amendment to this Agreement signed by
the Company and all of the Banks, (ii) resolutions of the Company's Board
of Directors authorizing such extension and (iii) an opinion of counsel to
the Company equivalent in form and substance to the form of opinion
attached hereto as Exhibit E and otherwise acceptable to the Banks.
(c) The respective maximum aggregate principal amounts of the
Revolving Credit at any one time outstanding and the percentage of the
Revolving Credit available at any time which each Bank by its acceptance
hereof severally agrees to make available to the Company are as follows
(collectively, the "REVOLVING CREDIT COMMITMENTS" and individually, a
"REVOLVING CREDIT COMMITMENT"):
▇▇▇▇▇▇ Trust and Savings Bank $14,285,714 28.57144%
U.S. Bancorp Ag Credit, Inc. $10,714,286 21.42857%
CoBank, ACB $10,714,286 21.42857%
SunTrust Bank, Atlanta $7,142,857 14.28571%
Credit Agricole Indosuez, Chicago Branch $7,142,857 14.28571%
Total $50,000,000 100%
Each Bank's Revolving Credit Commitment shall be reduced from time to time
by the aggregate outstanding principal amount of all Bid Loans made by such
Bank, and shall be increased (but in no event above the amount set forth
above for each Bank) by the aggregate principal amount of each principal
repayment of such Bid Loans made from time to time.
(d) Loans under the Revolving Credit may be Eurodollar Loans, CD Rate
Loans or Domestic Rate Loans. All Loans under the Revolving Credit shall
be made from each Bank in proportion to its respective Revolving Credit
Commitment as above set forth, as adjusted from time to time to reflect
outstanding Bid Loans. Each Domestic Rate Loan shall be in an amount not
less than $3,000,000 or such greater amount which is an integral multiple
of $500,000 and each Fixed Rate Loan shall be in an amount not less than
$3,000,000 or such greater amount which is an integral multiple of
$1,000,000.
SECTION 1.2. THE NOTES. All Revolving Credit Loans made by each Bank
hereunder shall be evidenced by a single Secured Revolving Credit Note of
the Company substantially in the form of Exhibit A hereto (individually, a
"REVOLVING NOTE" and together, the "REVOLVING NOTES") payable to the order
of each Bank. The aggregate principal amount of indebtedness evidenced by
such Revolving Note at any time shall be, and the same is to be determined
by, the aggregate principal amount of all Revolving Credit Loans and Bid
Loans made by such Bank to the Company pursuant hereto on or prior to the
date of determination less the aggregate amount of principal repayments on
such Revolving Credit Loans and Bid Loans received by or on behalf of such
Bank on or prior to such date of determination. Each Revolving Note shall
be dated as of the execution date of this Agreement, and shall be expressed
to mature on the Termination Date and to bear interest as provided in
Section 1.3 hereof. Each Bank shall record on its books or records or on a
schedule to its Revolving Note the amount of each Revolving Credit Loan and
Bid Loan made by it hereunder, whether each Revolving Credit Loan is a
Domestic Rate Loan, CD Rate Loan or Eurodollar Loan, and, with respect to
Fixed Rate Loans and Bid Loans, the interest rate and Interest Period
applicable thereto, and all payments of principal and interest and the
principal balance from time to time outstanding, provided that prior to any
transfer of such Revolving Note all such amounts shall be recorded on a
schedule to such Revolving Note. The record thereof, whether shown on such
books or records or on the schedule to the Revolving Note, shall be PRIMA
FACIE evidence as to all such amounts; provided, however, that the failure
of any Bank to record or any mistake in recording any of the foregoing
shall not limit or otherwise affect the obligation of the Company to repay
all Revolving Credit Loans and Bid Loans made hereunder together with
accrued interest thereon. Upon the request of any Bank, the Company will
furnish a new Revolving Note to such Bank to replace its outstanding
Revolving Note and at such time the first notation appearing on the
schedule on the reverse side of, or attached to, such Revolving Note shall
set forth the aggregate unpaid principal amount of Revolving Credit Loans
and Bid Loans then outstanding from such Bank, and, with respect to each
Fixed Rate Loan, the interest rate and Interest Period applicable thereto.
Such Bank will cancel the outstanding Revolving Note upon receipt of the
new Revolving Note.
SECTION 1.3. INTEREST RATES. (a) DOMESTIC RATE LOANS. Each Domestic Rate
Loan shall bear interest (computed on the basis of a year of 360 days and
actual days elapsed) on the unpaid principal amount thereof from the date
such Loan is made until maturity (whether by acceleration, upon prepayment
or otherwise) at a rate per annum equal to the lesser of (i) the Highest
Lawful Rate and (ii) the sum of the Applicable Margin plus the Domestic
Rate from time to time in effect, payable quarterly in arrears on the last
day of each calendar quarter, commencing on the first of such dates
occurring after the date hereof and at maturity (whether by acceleration,
upon prepayment or otherwise).
(b) EURODOLLAR LOANS. Each Eurodollar Loan under the Revolving Credit
shall bear interest (computed on the basis of a year of 360 days and actual
days elapsed) on the unpaid principal amount thereof from the date such
Loan is made until the last day of the Interest Period applicable thereto
or, if earlier, until maturity (whether by acceleration or otherwise) at a
rate per annum equal to the lesser of (i) the Highest Lawful Rate and (ii)
the sum of the Applicable Margin plus the Adjusted Eurodollar Rate, payable
on the last day of each Interest Period applicable thereto and at maturity
(whether by acceleration or otherwise) and, with respect to Eurodollar
Loans with an Interest Period in excess of three months, on the date
occurring every three months from the first day of the Interest Period
applicable thereto.
(c) CD RATE LOANS. Each CD Rate Loan under the Revolving Credit shall
bear interest (computed on the basis of a year of 360 days and actual days
elapsed) on the unpaid principal amount thereof from the date such Loan is
made until the last day of the Interest Period applicable thereto or, if
earlier, until maturity (whether by acceleration or otherwise) at a rate
per annum equal to the lesser of (i) the Highest Lawful Rate and (ii) the
sum of the Applicable Margin plus the Adjusted CD Rate, payable on the last
day of each Interest Period applicable thereto and at maturity (whether by
acceleration of otherwise) and, with respect to CD Rate Loans with an
Interest Period in excess of 90 days, on the date occurring every 90 days
from the first day of the Interest Period applicable thereto.
(d) DEFAULT RATE. During the existence of an Event of Default all
Loans and Reimbursement Obligations shall bear interest (computed on the
basis of a year of 360 days and actual days elapsed) from the date of such
Event of Default until paid in full, payable on demand, at a rate per annum
equal to the sum of 2.5% plus the Domestic Rate from time to time in effect
plus the Applicable Margin.
SECTION 1.4. CONVERSION AND CONTINUATION OF REVOLVING CREDIT LOANS.
(a) Provided that no Event of Default or Potential Default has occurred and
is continuing, the Company shall have the right, subject to the other terms
and conditions of this Agreement, to continue in whole or in part (but, if
in part, in the minimum amount specified for Fixed Rate Loans in
Section 1.1 hereof) any Fixed Rate Loan made under the Revolving Credit
from any current Interest Period into a subsequent Interest Period,
provided that the Company shall give the Agent notice of the continuation
of any such Loan as provided in Section 1.7 hereof.
(b) In the event that the Company fails to give notice pursuant to
Section 1.7 hereof of the continuation of any Fixed Rate Loan under the
Revolving Credit or fails to specify the Interest Period applicable
thereto, or an Event of Default or Potential Default has occurred and is
continuing at the time any such Loan is to be continued hereunder, then
such Loan shall be automatically converted as (and the Company shall be
deemed to have given notice requesting) a Domestic Rate Loan, subject to
Sections 1.7(b), 8.2 and 8.3 hereof, unless paid in full on the last day of
the then applicable Interest Period.
(c) Provided that no Event of Default or Potential Default has
occurred and is continuing, the Company shall have the right, subject to
the terms and conditions of this Agreement, to convert Revolving Credit
Loans of one type (in whole or in part) into Revolving Credit Loans of
another type from time to time provided that: (i) the Company shall give
the Agent notice of each such conversion as provided in Section 1.7 hereof,
(ii) the principal amount of any Revolving Credit Loan converted hereunder
shall be in an amount not less than the minimum amount specified for the
type of Revolving Credit Loan in Section 1.1 hereof, (iii) after giving
effect to any such conversion in part, the principal amount of any Fixed
Rate Loan under the Revolving Credit then outstanding shall not be less
than the minimum amount specified for the type of Loan in Section 1.1
hereof, (iv) any conversion of a Revolving Credit Loan hereunder shall only
be made on a Banking Day, and (v) any Fixed Rate Loan may be converted only
on the last day of the Interest Period then applicable thereto.
SECTION 1.5. LETTERS OF CREDIT. Subject to all the terms and conditions
hereof, satisfaction of all conditions precedent to borrowing under this
Agreement and so long as no Potential Default or Event of Default is in
existence, at the Company's request ▇▇▇▇▇▇ may in its discretion issue
letters of credit (an "L/C" and collectively the "L/Cs") for the account of
the Company subject to availability under the Revolving Credit, and the
Banks hereby agree to participate therein as more fully described in
Section 1.8 hereof. Each L/C shall be issued pursuant to an Application
for Letter of Credit (the "L/C Agreement") in the form of Exhibit B hereto.
The L/Cs shall consist of standby letters of credit in an aggregate face
amount not to exceed $20,000,000. Each L/C shall have an expiry date not
more than one year from the date of issuance thereof (but in no event later
than the Termination Date). The amount available to be drawn under each
L/C issued pursuant hereto shall be deducted from the credit otherwise
available under the Revolving Credit. In consideration of the issuance of
L/Cs the Company agrees to pay ▇▇▇▇▇▇ a fee (the "L/C FEE") in the amount
per annum equal to (a) 1.0% of the face amount of each Performance L/C and
(b) the Applicable Margin for Eurodollar Loans MINUS one-half of one
percent of the stated amount of each Financial Guarantee L/C (in each case
computed on the basis of a 360 day year and actual days elapsed) of the
face amount for any L/C issued hereunder. In addition the Company shall
pay ▇▇▇▇▇▇ for its own account an issuance fee (the "L/C ISSUANCE FEE") in
an amount equal to one-eighth of one percent (0.125%) of the stated amount
of each L/C issued by ▇▇▇▇▇▇ hereunder. All L/C Fees shall be payable
quarterly in arrears on the last day of each calendar quarter and on the
Termination Date, and all L/C Issuance Fees shall be payable on the date of
issuance of each L/C hereunder and on the date of each extension, if any,
of the expiry date of each L/C.
SECTION 1.6. REIMBURSEMENT OBLIGATION. The Company is obligated, and
hereby unconditionally agrees, to pay in immediately available funds to the
Agent for the account of ▇▇▇▇▇▇ and the Banks who are participating in L/Cs
pursuant to Section 1.8 hereof the face amount of each draft drawn and
presented under an L/C issued by ▇▇▇▇▇▇ hereunder not later than 11:00 a.m.
(Chicago Time) on the date such draft is presented for payment to ▇▇▇▇▇▇
(the obligation of the Company under this Section 1.7 with respect to any
L/C is a "REIMBURSEMENT OBLIGATION"). If at any time the Company fails to
pay any Reimbursement Obligation when due, the Company shall be deemed to
have automatically requested a Domestic Rate Loan from the Banks hereunder,
as of the maturity date of such Reimbursement Obligation, the proceeds of
which Loan shall be used to repay such Reimbursement Obligation. Such Loan
shall only be made if no Potential Default or Event of Default shall exist
and upon approval by all of the Banks, and shall be subject to availability
under the Revolving Credit. If such Loan is not made by the Banks for any
reason, the unpaid amount of such Reimbursement Obligation shall be due and
payable to the Agent for the pro rata benefit of the Banks upon demand and
shall bear interest at the rate of interest specified in Section 1.3(d)
hereof.
SECTION 1.7. MANNER OF BORROWING AND RATE SELECTION. (a) The Company
shall give telephonic, telex or telecopy notice to the Agent (which notice,
if telephonic, shall be promptly confirmed in writing) no later than (i)
11:00 a.m. (Chicago time) on the date the Banks are requested to make each
Domestic Rate Loan, (ii) 11:00 a.m. (Chicago time) on the date at least
three (3) Banking Days prior to the date of (A) each Eurodollar Loan which
the Banks are requested to make or continue, and (B) the conversion of any
CD Rate Loan or Domestic Rate Loan into a Eurodollar Loan and (iii) 11:00
a.m. (Chicago time) on the date at least one (1) Business Day prior to the
date of (A) each CD Rate Loan which the Banks are requested to make and (B)
the conversion of any Eurodollar Loan or Domestic Rate Loan into a CD Rate
Loan. Each such notice shall specify the date of the Revolving Credit Loan
requested (which shall be a Business Day in the case of Domestic Rate Loans
and CD Rate Loans and a Banking Day in the case of a Eurodollar Loan), the
amount of such Revolving Credit Loan, whether the Revolving Credit Loan is
to be made available by means of a Domestic Rate Loan, CD Rate Loan or
Eurodollar Loan and, with respect to Fixed Rate Loans, the Interest Period
applicable thereto; provided, that in no event shall the principal amount
of any requested Revolving Credit Loan plus the aggregate principal or face
amount, as appropriate, of all Revolving Credit Loans, L/Cs, and unpaid
Reimbursement Obligations outstanding hereunder exceed the amounts
specified in Section 1.1 hereof. The Company agrees that the Agent may
rely on any such telephonic, telex or telecopy notice given by any person
who the Agent believes is authorized to give such notice without the
necessity of independent investigation and in the event any notice by such
means conflicts with the written confirmation, such notice shall govern if
any Bank has acted in reliance thereon. The Agent shall, no later than
12:30 p.m. (Chicago time) on the day any such notice is received by it,
give telephonic, telex or telecopy (if telephonic, to be confirmed in
writing within one Business Day) notice of the receipt of notice from the
Company hereunder to each of the Banks, and, if such notice requests the
Banks to make, continue or convert any Fixed Rate Loans, the Agent shall
confirm to the Company by telephonic, telex or telecopy means, which
confirmation shall be conclusive and binding on the Company in the absence
of manifest error, the Interest Period and the interest rate applicable
thereto promptly after such rate is determined by the Agent.
(b) Subject to the provisions of Section 6 hereof, the proceeds of
each Revolving Credit Loan shall be made available to the Company at the
principal office of the Agent in Chicago, Illinois, in immediately
available funds, on the date such Revolving Credit Loan is requested to be
made, except to the extent such Revolving Credit Loan represents (i) the
conversion of an existing Revolving Credit Loan or (ii) a refinancing of a
Reimbursement Obligation, in which case each Bank shall record such
conversion on the schedule to its Revolving Note, or in lieu thereof, on
its books and records, and shall effect such conversion or refinancing, as
the case may be, on behalf of the Company in accordance with the provisions
of Section 1.4(a) hereof and 1.8 hereof, respectively. Not later than
2:00 p.m. Chicago time, on the date specified for any Revolving Credit Loan
to be made hereunder, each Bank shall make its portion of such Revolving
Credit Loan available to the Company in immediately available funds at the
principal office of the Agent, except (i) as otherwise provided above with
respect to converting or continuing any outstanding Revolving Credit Loans
and (ii) to the extent such Revolving Credit Loan represents a refinancing
of any outstanding Reimbursement Obligations.
(c) Unless the Agent shall have been notified by a Bank prior to
1:00 p.m. (Chicago time) on the date a Revolving Credit Loan is to be made
by such Bank (which notice shall be effective upon receipt) that such Bank
does not intend to make the proceeds of such Revolving Credit Loan
available to the Agent, the Agent may assume that such Bank has made such
proceeds available to the Agent on such date and the Agent may in reliance
upon such assumption (but shall not be required to) make available to the
Company a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Bank, the Agent shall be entitled
to receive such amount on demand from such Bank (or, if such Bank fails to
pay such amount forthwith upon such demand, to recover such amount,
together with interest thereon at the rate otherwise applicable thereto
under Section 1.3 hereof, from the Company) together with interest thereon
in respect of each day during the period commencing on the date such amount
was made available to the Company and ending on the date the Agent recovers
such amount, at a rate per annum equal to the effective rate charged to the
Agent for overnight Federal funds transactions with member banks of the
Federal Reserve System for each day, as determined by the Agent (or, in the
case of a day which is not a Business Day, then for the preceding Business
Day) (the "FED FUNDS RATE"). Nothing in this Section 1.7(c) shall be
deemed to permit any Bank to breach its obligations to make Loans under the
Revolving Credit or to limit the Company's claims against any Bank for such
breach.
SECTION 1.8. PARTICIPATION IN L/Cs. Each of the Banks will acquire a risk
participation for its own account, without recourse to or representation or
warranty from ▇▇▇▇▇▇, in each L/C upon the issuance thereof ratably in
accordance with its Commitment Percentage. In the event any Reimbursement
Obligation is not immediately paid by the Company pursuant to Section 1.6
hereof, each Bank will pay to ▇▇▇▇▇▇ funds in an amount equal to such
Bank's ratable share of the unpaid amount of such Reimbursement Obligation
(based upon its proportionate share relative to its percentage of the
Revolving Credit (as set forth in Section 1.1 hereof)). At the election of
all of the Banks, such funding by the Banks of the unpaid Reimbursement
Obligations shall be treated as additional Revolving Credit Loans to the
Company hereunder rather than a purchase of participations by the Banks in
the related L/Cs held by ▇▇▇▇▇▇. The availability of funds to the Company
under the Revolving Credit shall be reduced in an amount equal to any such
L/C. The obligation of the Banks to ▇▇▇▇▇▇ under this Section 1.8 shall be
absolute and unconditional and shall not be affected or impaired by any
Event of Default or Potential Default which may then be continuing
hereunder. ▇▇▇▇▇▇ shall notify each Bank by telephone of its proportionate
share relative to its percentage of the total Banks' Revolving Credit
Commitments set forth in Section 1.1 hereof (a "COMMITMENT PERCENTAGE") of
such unpaid Reimbursement Obligation. If such notice has been given to
each Bank by 12:00 Noon, Chicago time, each Bank agrees to pay ▇▇▇▇▇▇ in
immediately available and freely transferable funds on the same Business
Day. If such notice is received after 12:00 noon, Chicago time, each Bank
agrees to pay ▇▇▇▇▇▇ in immediately available and freely transferable funds
no later than the following Business Day. Funds shall be so made available
at the account designated by ▇▇▇▇▇▇ in such notice to the Banks. Upon the
election by the Banks to treat such funding as additional Revolving Credit
Loans hereunder and payment by each Bank, such Loans shall bear interest in
accordance with Section 1.3(a) hereof. ▇▇▇▇▇▇ shall share with each Bank
on a pro rata basis relative to its Commitment Percentage a portion of each
payment of a Reimbursement Obligation (whether of principal or interest)
and any L/C Fee (but not any L/C Issuance Fee) payable by the Company. Any
such amount shall be promptly remitted to the Banks when and as received by
▇▇▇▇▇▇ from the Company.
SECTION 1.9. CAPITAL ADEQUACY. If, after the date hereof, any Bank or the
Agent shall have determined in good faith that the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any
change therein (including, without limitation, any revision in the Final
Risk-Based Capital Guidelines of the Board of Governors of the Federal
Reserve System (12 CFR Part 208, Appendix A; ▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇ ▇)
or of the Office of the Comptroller of the Currency (12 CFR Part 3,
Appendix A), or in any other applicable capital rules heretofore adopted
and issued by any governmental authority), or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office)
with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Bank's capital, or on the capital of any corporation controlling such Bank,
in each case as a consequence of its obligations hereunder to a level below
that which such Bank would have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount reasonably deemed by such Bank to be
material, then from time to time, within fifteen (15) days after demand by
such Bank (with a copy to the Agent), the Company shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
reduction.
SECTION 1.10. THE BOND LETTER OF CREDIT. Subject to all the terms and
conditions hereof, ▇▇▇▇▇▇ has issued a standby letter of credit (as amended
(including any amendments increasing the amount thereof) and reinstated
from time to time, the "BOND L/C") in an original stated amount of up to
$25,239,727.00 (the "BOND L/C COMMITMENT") for the account of the Company.
The Bond L/C Commitment shall be separate and apart from, and in addition
to, the Revolving Credit Commitments. The Bond L/C was issued pursuant to
a Reimbursement Agreement (the "REIMBURSEMENT AGREEMENT" ) for the purpose
of supporting the Company's obligations relating to the Bonds. The Bond
L/C shall have an expiry date not later than the Termination Date, subject
to extension as provided in the Reimbursement Agreement. Nothing contained
in this Agreement shall be deemed to require the Company to cause the Bonds
to be issued, it being agreed that the issuance of Bonds shall be within
the Company's sole discretion. The Company shall pay ▇▇▇▇▇▇ for its own
account an annual issuance fee (the "BOND L/C ISSUANCE FEE") in an amount
equal to one-eighth of one percent (0.125%) of the stated amount of the
Bond L/C, payable on the date the Bond L/C is issued by ▇▇▇▇▇▇ and on each
annual anniversary thereof.
SECTION 1.11. BOND REIMBURSEMENT OBLIGATION. The Company will pay in
immediately available funds to ▇▇▇▇▇▇ the amount of each demand for payment
made under the Bond L/C immediately upon payment by ▇▇▇▇▇▇ of each amount
so demanded and on the date of each such payment by ▇▇▇▇▇▇ (the obligation
of the Company under this Section 1.11 is hereinafter referred to as a
"BOND REIMBURSEMENT OBLIGATION").
SECTION 1.12. PARTICIPATION IN THE BOND L/C. Each of the Banks will
acquire a risk participation for its own account, without recourse to or
representation or warranty from ▇▇▇▇▇▇, in the Bond L/C upon the issuance
thereof ratably in accordance with its Commitment Percentage. In the event
any Bond Reimbursement Obligation is not immediately paid by the Company
pursuant to Section 1.11 hereof, each Bank will pay to ▇▇▇▇▇▇ funds in an
amount equal to such Bank's Commitment Percentage of the unpaid amount of
such Bond Reimbursement Obligation. The obligation of the Banks to ▇▇▇▇▇▇
under this Section 1.12 shall be absolute and unconditional and shall not
be affected or impaired by any Event of Default or Potential Default which
may then be continuing hereunder. ▇▇▇▇▇▇ shall notify each Bank by
telephone of its Commitment Percentage of such unpaid Bond Reimbursement
Obligation. If such notice has been given to each Bank by 1:00 p.m.,
Chicago time, each Bank agrees to pay ▇▇▇▇▇▇ in immediately available and
freely transferable funds on the same Business Day. If such notice is
received after 1:00 p.m., Chicago time, each Bank agrees to pay ▇▇▇▇▇▇ in
immediately available and freely transferable funds no later than the
following Business Day. Funds shall be so made available at the account
designated by ▇▇▇▇▇▇ in such notice to the Banks. ▇▇▇▇▇▇ shall share with
each Bank on a pro rata basis relative to its Commitment Percentage a
portion of each payment of a Bond Reimbursement Obligation (whether of
principal or interest) and any Bond L/C Fee (but not the Bond L/C Issuance
Fee or any Bond L/C Administration Fee) payable by the Company. Any such
amount shall be promptly remitted to the Banks when and as received by
▇▇▇▇▇▇ from the Company.
SECTION 1.13. REDUCTIONS AND REINSTATEMENTS. The Company and the Banks
recognize, acknowledge and agree that (i) the Bond L/C provides for
automatic reductions and reinstatements as set forth in the provisions of
such Bond L/C, and (ii) the Bond L/C provides for the beneficiary thereof
to reduce from time to time the amounts available to be drawn thereon.
Each Bank acknowledges that, because the interest component of the Bond L/C
may be reinstated at a time when the Company has not reimbursed ▇▇▇▇▇▇ in
full for an interest drawing under the Bond L/C, the total may exceed the
Bond L/C Commitment pursuant to Section 1.10 hereof and each Bank agrees to
pay ▇▇▇▇▇▇ its pro rata share of any drawing under the Bond L/C
notwithstanding that any such payment may result in the aggregate principal
amount owing such Bank hereunder exceeding the Bond L/C Commitment of such
Bank.
SECTION 1.14. LIABILITY OF ▇▇▇▇▇▇. None of the ▇▇▇▇▇▇-Related Persons
shall (i) be liable for any action taken or omitted to be taken by any of
them under or in connection with the Reimbursement Agreement or any Bond
Document (except for its own gross negligence or willful misconduct), or
(ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Affiliate
of the Company, or any officer thereof, contained in the Reimbursement
Agreement or any Bond Document, or in any certificate, report, statement or
other document referred to or provided for in, or received by ▇▇▇▇▇▇ under
or in connection with, the Reimbursement Agreement or any Bond Document, or
for the validity, effectiveness, genuineness, enforceability or sufficiency
of the Reimbursement Agreement or any Bond Document, or for any failure of
the Company or any other party to the Reimbursement Agreement or any Bond
Document to perform its obligations thereunder (other than for the gross
negligence or willful misconduct of ▇▇▇▇▇▇). No ▇▇▇▇▇▇-Related Person
shall be under any obligation to any Bank to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, the Reimbursement Agreement or any Bond Document, or to
inspect the properties, books or records of the Company or any of its
Affiliates.
SECTION 1.15. RELIANCE BY ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Company). ▇▇▇▇▇▇ shall be fully justified in
failing or refusing to take any action under the Reimbursement Agreement or
any Bond Document which would otherwise require the consent of the Required
Banks or all of the Banks unless it shall first receive such advice or
concurrence of the Required Banks (or, if required by this Agreement, all
Banks) as it deems appropriate and, if it so requests, it shall first be
indemnified to its satisfaction by the Banks against any and all liability
and expense which may be incurred by it by reason of taking or continuing
to take any such action. ▇▇▇▇▇▇ shall in all cases be fully protected in
acting, or in refraining from acting, under the Reimbursement Agreement or
any Bond Document in accordance with a request or consent of the Required
Banks (or, if required by this Agreement, all Banks) and such request and
any action taken or failure to act pursuant thereto shall be binding upon
all of the Banks.
SECTION 1.16. NOTICE OF DEFAULT. ▇▇▇▇▇▇ shall not be deemed to have
knowledge or notice of the occurrence of any Potential Default or Event of
Default under Section 8.1(1) hereof, unless ▇▇▇▇▇▇ shall have received
written notice from the Company or any other party to a Bond Document.
▇▇▇▇▇▇ shall take such action with respect to such Potential Default or
Event of Default under the Reimbursement Agreement and the Bond Documents
as shall be required pursuant to Section 8 hereof; PROVIDED that unless and
until ▇▇▇▇▇▇ shall have received direction under Section 8, ▇▇▇▇▇▇ may (but
shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Potential Default or Event of Default as it
shall deem advisable and in the best interest of the Banks, except any
action resulting in the acceleration or redemption of any Bonds.
SECTION 1.17. INDEMNIFICATION. The Banks shall indemnify upon demand the
▇▇▇▇▇▇-Related Persons (to the extent not reimbursed by or on behalf of the
Company and without limiting the obligation of the Company to do so),
ratably according to such Bank's Commitment Percentage from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind whatsoever
which may at any time (including at any time following the termination of
the Bond L/C) be imposed on, incurred by or asserted against any such
Person and which are in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein or the
transactions contemplated hereby or thereby or any action taken or omitted
by any such Person under or in connection with any of the foregoing;
PROVIDED that no Bank shall be liable for the payment to the ▇▇▇▇▇▇-Related
Persons of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from such Person's gross negligence or willful misconduct
or for the fees and expenses of counsel in connection with the preparation,
execution, delivery, administration, or modification of the Reimbursement
Agreement or any Bond Document or any amendments thereto. The obligation
of the Banks in this Section shall survive the payment of all amounts owing
by the Company hereunder.
SECTION 1.18. DOCUMENTS AND REPORTS. ▇▇▇▇▇▇ agrees to deliver to the Banks
promptly upon receipt thereof copies of all documents and reports delivered
to ▇▇▇▇▇▇ pursuant to the Reimbursement Agreement or any Bond Document.
SECTION 1.19. AMENDMENTS. ▇▇▇▇▇▇ may enter into any amendment or
modification of, or may waive compliance with the terms of any Bond
Document (other than an Indenture) without the consent of any Bank;
PROVIDED (a) that without the consent of the Required Banks, ▇▇▇▇▇▇ shall
not execute any instrument agreeing to any amendment or modification of, or
waiver of compliance with the Reimbursement Agreement or any Bond Document,
which would waive any "EVENT OF DEFAULT" arising under the Reimbursement
Agreement or any Bond Document, and (b) without the consent of all of the
Banks, ▇▇▇▇▇▇ shall not execute any instrument agreeing to any amendment or
modification of, or waiver of compliance with the Reimbursement Agreement
or any Bond Document, (i) which would (A) reduce the principal of, or
interest on, any Bond Reimbursement Obligation, (B) postpone the due date
for any payment of principal of, or interest on, any Bond Reimbursement
Obligation, (C) extend the stated expiration date of the Bond L/C, (D)
increase in any material manner (in the reasonable opinion of ▇▇▇▇▇▇) the
obligations of the Banks, or (E) release or otherwise adversely affect the
interests of the Banks in any collateral granted under the Reimbursement
Agreement or any Bond Document, or (ii) after the occurrence of a Potential
Default or Event of Default.
SECTION 2. THE COMPETITIVE BID FACILITY.
SECTION 2.1. AMOUNT AND TERM. The Company may from time to time before
the Termination Date request Competitive Bids from the Banks and the Banks
may make, at their sole discretion, Bid Loans to the Company on the terms
and conditions set forth in this Agreement. Notwithstanding any provision
to the contrary contained in this Agreement, (a) the aggregate principal
amount of all Bid Loans outstanding hereunder at any time may not exceed
$50,000,000, (b) no Bank may make Bid Loans in an aggregate principal
amount in excess of the maximum amount of such Bank's Revolving Credit
Commitment set forth in Section 1.1(b) of this Agreement, and (c) the
aggregate principal amount of all Bid Loans outstanding hereunder at any
time together with the aggregate principal amount of all Revolving Credit
Loans outstanding under the Revolving Credit shall not exceed the Banks'
Revolving Credit Commitments from time to time in effect. The Company may
request Competitive Bids and the Banks may, in their discretion, make such
Competitive Bids on the terms and conditions set forth in this Section 2.
SECTION 2.2. COMPETITIVE BID REQUESTS. In order to request Competitive
Bids, the Company shall give telephonic notice to be received by the Agent
no later than 11:00 A.M., Chicago time, one Business Day before the date,
which must be a Business Day, on which a proposed Bid Loan is to be made
(the "BORROWING DATE"), followed on the same day by a duly completed
Competitive Bid Request Confirmation in the form of Exhibit L hereto to be
received by the Agent not later than 11:30 A.M., Chicago time. Competitive
Bid Request Confirmations that do not conform substantially to the format
of Exhibit L may be rejected and the Agent shall give telephonic notice to
the Company of such rejection promptly after it determines (which
determination shall be conclusive) that a Competitive Bid Request
Confirmation does not substantially conform to the format of Exhibit L.
Competitive Bid Requests shall in each case refer to this Agreement and
specify (x) the proposed Borrowing Date (which shall be a Business Day),
(y) the aggregate principal amount thereof (which shall not be less than
$3,000,000 and shall be an integral multiple of $1,000,000), and (z) up to
3 Interest Periods with respect to the entire amount specified in such
Competitive Bid Request (which must be of no less than 30 and no more than
180 days duration and may not end after the Termination Date). Upon
receipt by the Agent of a Competitive Bid Request Confirmation which
conforms substantially to the format of Exhibit L attached hereto, the
Agent shall invite, by telephone promptly confirmed in writing in the form
of Exhibit M attached hereto, the Banks to bid, on the terms and conditions
of this Agreement, to make Bid Loans pursuant to the Competitive Bid
Request.
SECTION 2.3. SUBMISSION OF COMPETITIVE BIDS. Each Bank may, in its sole
discretion, make one or more Competitive Bids to the Company responsive to
the Competitive Bid Request. Each Competitive Bid by a Bank must be
received by the Agent by telephone not later than 8:45 A.M., Chicago time,
on the Borrowing Date, promptly confirmed in writing by a duly completed
Confirmation of Competitive Bid substantially in the form of Exhibit N
attached hereto to be received by the Agent no later than 9:00 A.M. on the
same day; PROVIDED, HOWEVER, that any Competitive Bid made by ▇▇▇▇▇▇ must
be made by telephone to the Company no later than 8:30 A.M., Chicago time,
and confirmed by telecopier to the Company no later than 8:45 A.M., Chicago
time, on the Borrowing Date. Competitive Bids which do not conform
precisely to the terms of this Section 2.3 may be rejected by the Agent and
the Agent shall notify the Bank submitting such Competitive Bid of such
rejection by telephone as soon as practicable after determining that the
Competitive Bid does not conform precisely to the terms of this
Section 2.3. Each Competitive Bid shall refer to this Agreement and
specify (x) the maximum principal amount (which shall not be less than
$3,000,000 and shall be an integral multiple of $1,000,000) of the Bid Loan
that the Bank is willing to make to the Company (y) the Yield (which shall
be computed on the basis of a 360-day year and actual days elapsed and for
a period equal to the Interest Period applicable thereto) at which the Bank
is prepared to make the Bid Loan and (z) the Interest Period applicable
thereto. The Agent shall reject any Competitive Bid if such Competitive
Bid (i) does not specify all of the information specified in the
immediately preceding sentence, (ii) contains any qualifying, conditional,
or similar language, (iii) proposes terms other than or in addition to
those set forth in the Competitive Bid Request to which it responds, or
(iv) is received by the Agent later than 8:45 A.M. (Chicago time). Any
Competitive Bid submitted by a Bank pursuant to this Section 2.3 shall be
irrevocable and shall be promptly confirmed in writing in the form of
Exhibit N; PROVIDED THAT in all events the telephone Competitive Bid
received by the Agent shall be binding on the relevant Bank and shall not
be altered, modified, or in any other manner affected by any inconsistent
terms contained in, or terms missing from, the Bank's Confirmation of
Competitive Bid.
SECTION 2.4. NOTICE OF BIDS. The Agent shall give telephonic notice to
the Company no later than 9:15 A.M., Chicago time, on the proposed
Borrowing Date, of the number of Competitive Bids made, the Yield with
respect to each proposed Bid Loan, the Interest Period applicable thereto
and the maximum principal amount of each Bid Loan in respect of which a
Competitive Bid was made and the identity of the Bank making each bid. The
Agent shall send a summary of all Competitive Bids received by the Agent to
the Company as soon as practicable after receipt of a Competitive Bid from
each Bank that has made a Competitive Bid.
SECTION 2.5. ACCEPTANCE OR REJECTION OF BIDS. The Company may in its sole
and absolute discretion, subject only to the provisions of this Section,
irrevocably accept or reject, in whole or in part, any Competitive Bid
referred to in Section 2.4 above. No later than 9:45 A.M., Chicago time,
on the proposed Borrowing Date, the Company shall give telephonic notice to
the Agent of whether and to what extent it has decided to accept or reject
any or all the Competitive Bids referred to in Section 2.4 above, which
notice shall be promptly confirmed in a writing to be received by the Agent
on the proposed Borrowing Date; PROVIDED, HOWEVER, that (x) no bid shall be
accepted for a Bid Loan in a minimum principal amount of less than
$3,000,000, (y) the Company shall accept bids solely on the basis of
ascending Yields for each Interest Period, (z) if the Company declines to
borrow, or it is restricted by other conditions hereof from borrowing, the
maximum principal amount of Bid Loans in respect of which bids at such
Yield have been made, then the Company shall accept a pro rata portion of
each bid made at the same Yield, based as nearly as possible on the ratio
of the maximum aggregate principal amounts of Bid Loans for which each such
bid was made (provided that if the available principal amount of Bid Loans
to be so allocated is not sufficient to enable Bid Loans to be so allocated
to each such Bank in integral multiples of $1,000,000, the Company shall
select which Banks will be allocated such Bid Loans and will round
allocations up or down to the next higher or lower multiple of $1,000,000
as it shall deem appropriate but in no event shall any Bid Loan be
allocated in a principal amount of less than $3,000,000), and (w) the
aggregate principal amount of all Competitive Bids accepted by the Company
shall not exceed the amount contained in the related Confirmation of
Competitive Bid Request. A notice given by the Company pursuant to this
Section 2.5 shall be irrevocable and shall not be altered, modified, or in
any other manner affected by any inconsistent terms contained in, or terms
missing from, any written confirmation of such notice.
SECTION 2.6. NOTICE OF ACCEPTANCE OR REJECTION OF BID. The Agent shall
promptly (but in any event no later than 10:30 A.M., Chicago time) give
telephonic notice to the Banks whether or not their Competitive Bids have
been accepted (and if so, in what amount and at what Yield) on the proposed
Borrowing Date, and each successful bidder will thereupon become bound,
subject to Section 7 and the other applicable conditions hereof, to make
the Bid Loan in respect of which its bid has been accepted. Each Bank so
bound shall notify the Agent upon making the Bid Loan. As soon as
practicable on each Borrowing Date, the Agent shall notify each Bank of the
aggregate principal amount of all Bid Loans made pursuant to a Competitive
Bid Request on such Borrowing Date, the Interest Period(s) applicable
thereto and the highest and lowest Yields at which such Bid Loans were made
for each Interest Period.
SECTION 2.7. RESTRICTIONS ON BID LOANS. A Bid Loan shall not be made if
an Event of Default or Potential Default shall have occurred and be
continuing on the date on which such Bid Loan is to be made and the Company
may not obtain more than three Bid Loans in any calendar week.
SECTION 2.8. MINIMUM AMOUNT. Each Bid Loan made to the Company on any
date shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $3,000,000. Bid Loans shall be made in the amounts
accepted by the Company in accordance with Section 2.5.
SECTION 2.9. THE NOTES. The Bid Loans made by each Bank to the Company
shall be evidenced by the Revolving Note of the Company payable to the
order of such Bank as described in Section 1.2. The outstanding principal
balance of each Bid Loan, as evidenced by a Note, shall be payable at the
end of every Interest Period applicable to such Bid Loan. Each Bid Loan
evidenced by each Revolving Note shall bear interest from the date such Bid
Loan is made on the outstanding principal balance thereof as set forth in
Section 2.10 below.
SECTION 2.10. TERM OF AND INTEREST ON BID LOANS. Each Bid Loan shall bear
interest during the Interest Period applicable thereto at a rate per annum
equal to the rate of interest offered in the Competitive Bid therefor
submitted by the Bank making such Bid Loan and accepted by the Company
pursuant to Section 2.5 above. The principal amount of each Bid Loan,
together with all accrued interest thereon, shall be due and payable on the
last day of the Interest Period applicable thereto and at maturity (whether
by acceleration or otherwise) and, with respect to any Interest Period in
excess of three months, interest on the unpaid principal amount shall be
due on the date occurring every three months after the date the relevant
Bid Loan was made. If any payment of principal or interest on any Bid Loan
is not made when due, such Bid Loan shall bear interest (computed on the
basis of a year of 360 days and actual days elapsed) from the date such
payment was due until paid in full, payable on demand, at a rate per annum
equal to the sum of 2.5% plus the rate of interest in effect thereon at the
time of such default until the end of the Interest Period then applicable
thereto, and, thereafter, at a rate per annum equal to the sum of 2.5 plus
the Domestic Rate from time to time in effect.
SECTION 2.11. DISBURSEMENT OF BID LOANS. (a) Subject to the provisions of
Section 6 hereof, the proceeds of each Bid Loan shall be made available to
the Company by, at the Company's option, crediting an account maintained by
the Company at ▇▇▇▇▇▇ Trust and Savings Bank or by wire transfer of such
proceeds to such account as the Company shall designate in writing to the
Agent from time to time, in immediately available funds. Not later than
12:00 Noon, Chicago time, on the date specified for any Bid Loan to be made
hereunder, each Bank which is bound to make such Bid Loan pursuant to
Section 2.6 hereof shall make its portion of such Bid Loan available to the
Company in immediately available funds at the principal office of the Agent
in Chicago, Illinois.
(b) Unless the Agent shall have been notified by a Bank no later than
the time the Agent gives such Bank a notice pursuant to Section 2.6 hereof
(which notice shall be effective upon receipt) that such Bank does not
intend to make the proceeds of such Bid Loan available to the Agent, the
Agent may assume that such Bank has made such proceeds available to the
Agent on such date and the Agent may in reliance upon such assumption (but
shall not be required to) make available to the Company a corresponding
amount. If such corresponding amount is not in fact made available to the
Agent by such Bank, the Agent shall be entitled to receive such amount on
demand from such Bank (or, if such Bank fails to pay such amount forthwith
upon such demand, to recover such amount from the Company) together with
interest thereon in respect of each day during the period commencing on the
date such amount was made available to the Company and ending on the date
the Agent recovers such amount, at a rate per annum equal to the effective
rate charged to the Agent for overnight Federal funds transactions with
member banks of the Federal Reserve System for each day, as determined by
the Agent (or, in the case of a day which is not a Business Day, then for
the preceding Business Day). Nothing in this Section 2.11(b) shall be
deemed to permit any Bank to breach its obligations to make Bid Loans
hereunder, or to limit the Company's claims against any Bank for such
breach.
SECTION 2.12. RELIANCE ON TELEPHONIC NOTICES; INDEMNITY. (a) The Company
agrees that the Agent may rely on any telephonic notice referred to in this
Section 2 and given by any person the Agent reasonably believes is
authorized to give such notice without the necessity of independent
investigation, and in the event any such telephonic notice conflicts with
any written notice relating thereto, or in the event no such written notice
is received by the Agent, such telephonic notice shall govern if the Agent
or any Bank has acted in reasonable reliance thereon. The Agent's books
and records shall be PRIMA FACIE evidence of all of the matters set forth
in Sections 2.2, 2.3, 2.4., 2.5 and 2.6 hereof.
(b) The Company hereby agrees to indemnify and hold the Agent harmless
from and against any and all claims, damages, losses, liabilities and
expenses, including court costs and legal expenses, paid or incurred by the
Agent in connection with any action the Agent may take, or fail to take, in
reasonable reliance upon and in accordance with any telephonic notice
received by the Agent as described in this Section 2.
(c) The Banks hereby agree to indemnify and hold the Agent harmless
from and against any and all claims, damages, losses, liabilities and
expenses, including court costs and legal expenses, paid or incurred by the
Agent in connection with any action the Agent may take, or fail to take, in
reasonable reliance upon and in accordance with any telephonic notice
received by the Agent as described in this Section 2, to the extent the
Agent is not promptly reimbursed therefor by the Company.
SECTION 2.13. TELEPHONIC NOTICE. Each Bank's telephonic notice to the
Agent of its Competitive Bid pursuant to Section 2.3, and the Company's
telephonic acceptance of any offer contained in a Bid pursuant to
Section 2.5, shall be irrevocable and binding on such Bank and the Company,
as applicable, and shall not be altered, modified, or in any other manner
affected by any inconsistent terms contained in, or missing from, any
written confirmation of such telephonic notice. It is understood and
agreed by the parties hereto that the Agent shall be entitled to act, or to
fail to act, hereunder in reliance on its records of any telephonic notices
provided for herein and that the Agent shall not incur any liability to any
Person in so doing if its records conflict with any written confirmation of
a telephone notice or otherwise, provided that any such action taken or
omitted by the Agent is taken or omitted reasonably and in good faith. It
is further understood and agreed by the parties hereto that each party
hereto shall in good faith endeavor to provide the notices specified herein
by the times of day as set forth in this Section 2 but that no party shall
incur any liability or other responsibility for any failure to provide such
notices within the specified times; PROVIDED, HOWEVER, that the Agent shall
have no obligation to notify the Company of any Competitive Bid received by
it later than 8:45 A.M. (Chicago time) on the proposed Borrowing Date, and
no acceptance by the Company of any offer contained in a Competitive Bid
shall be effective to bind any Bank to make a Bid Loan, nor shall the Agent
be under any obligation to notify any Person of an acceptance, if notice of
such acceptance is received by the Agent later than 9:45 A.M. (Chicago
time) on the proposed Borrowing Date.
SECTION 3. FEES, PREPAYMENTS, TERMINATIONS AND PLACE AND APPLICATION OF
PAYMENTS.
SECTION 3.1. FACILITY FEE. For the period from the date hereof to and
including the Termination Date, the Company shall pay to the Agent for the
account of the Banks a facility fee with respect to the Revolving Credit at
the rate of three-eighths of one percent (0.375%) per annum if the
Company's Leverage Ratio is equal to or greater than 0.45 to 1 and one-
quarter of one percent (0.25%) per annum if the Company's Leverage Ratio is
less than 0.45 to 1 (in each case computed in each case on the basis of a
year of 360 days for the actual number of days elapsed) of the aggregate
maximum amount of the Banks' Revolving Credit Commitments hereunder in
effect from time to time and whether or not any credit is in use under the
Revolving Credit, all such fees to be payable quarterly in arrears on the
last day of each calendar quarter commencing on December 31, 1999, and on
the Termination Date, unless the Revolving Credit is terminated in whole on
an earlier date, in which event the facility fee for the final period shall
be paid on the date of such earlier termination in whole.
SECTION 3.2. AGENT'S FEE. The Company shall pay to and for the sole
account of the Agent such fees as may be agreed upon in writing from time
to time by the Agent and the Company. Such fees shall be in addition to
any fees and charges the Agent may be entitled to receive under Section 10
hereunder or under the other Loan Documents.
SECTION 3.3. OPTIONAL PREPAYMENTS. The Company shall have the privilege
of prepaying without premium or penalty and in whole or in part (but if in
part, then in a minimum principal amount of $2,500,000 or such greater
amount which is an integral multiple of $100,000) any Domestic Rate Loan at
any time upon prior telex or telephonic notice to the Agent on or before
12:00 Noon on the same Business Day. The Company may not prepay any
Eurodollar Loan, CD Rate Loan or Bid Loan. Any amount prepaid under the
Revolving Credit may, subject to the terms and conditions of this
Agreement, be borrowed, repaid and borrowed again.
SECTION 3.4. MANDATORY PREPAYMENTS - BORROWING BASE. The Company shall
not permit the sum of the principal amount of all Loans plus the amount
available for drawing under all L/Cs and the aggregate principal amount of
all unpaid Reimbursement Obligations at any time outstanding to exceed the
lesser of (i) the sum of the Banks' Revolving Credit Commitments or (ii)
the Borrowing Base as determined on the basis of the most recent Borrowing
Base Certificate. In addition to the Company's obligations to pay any
outstanding Reimbursement Obligations as set forth in Section 1.6 hereof,
the Company will make such payments on any outstanding Loans and
Reimbursement Obligations (and, if any L/Cs are then outstanding, deposit
an amount equal to the aggregate amount available for drawing under all
L/Cs into an interest bearing account with the Agent which shall be held as
additional collateral security for such L/Cs) which are necessary to cure
any such excess within three Business Days after the occurrence thereof.
Any amount prepaid under the Revolving Credit may, subject to the terms and
conditions of this Agreement, be borrowed, prepaid and borrowed again.
SECTION 3.5. PLACE AND APPLICATION OF PAYMENTS. All payments of principal
and interest made by the Company in respect of the Notes, Bond
Reimbursement Obligations and Reimbursement Obligations and all fees
payable by the Company hereunder, shall be made to the Agent at its office
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and in immediately
available funds, prior to 12:00 noon Chicago time on the date of such
payment. All such payments shall be made without setoff or counterclaim
and without reduction for, and free from, any and all present and future
levies, imposts, duties, fees, charges, deductions withholdings,
restrictions or conditions of any nature imposed by any government or any
political subdivision or taxing authority thereof. Unless the Banks
otherwise agree, any payments received after 12:00 noon Chicago time shall
be deemed received on the following Business Day. The Agent shall remit to
each Bank its proportionate share of each payment of principal, interest
and facility fees, and L/C fees received by the Agent by 3:00 P.M. Chicago
time on the same day of its receipt if received by the Agent by 12:00 noon,
Chicago time, and its proportionate share of each such payment received by
the Agent after 12:00 noon on the Business Day following its receipt by the
Agent. In the event the Agent does not remit any amount to any Bank when
required by the preceding sentence, the Agent shall pay to such Bank
interest on such amount until paid at a rate per annum equal to the Fed
Funds Rate. The Company hereby authorizes the Agent to automatically debit
its account with ▇▇▇▇▇▇ for any principal, interest and fees when due under
the Notes, any L/C Agreement or this Agreement and to transfer the amount
so debited from such account to the Agent for application as herein
provided. All proceeds of Collateral shall be applied in the manner
specified in the Security Agreement.
SECTION 4. DEFINITIONS.
SECTION 4.1. CERTAIN TERMS DEFINED. The terms hereinafter set forth when
used herein shall have the following meanings:
"ACCOUNT DEBTOR" shall mean the Person who is obligated on a
Receivable.
"ADJUSTED CD RATE" shall mean a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined in accordance with the
following formula:
CD RATE Assessment
Adjusted CD Rate = 100% - CD Reserve Percentage + Rate
"ADJUSTED EURODOLLAR RATE" means a rate per annum determined pursuant
to the following formula:
Adjusted Eurodollar Rate = EURODOLLAR RATE
{ }100% - Reserve Percentage
"AFFILIATE" shall mean any person, firm or corporation which, directly
or indirectly controls, or is controlled by, or is under common control
with, the Company. As used in this definition the term "CONTROLS"
(including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall
have the meaning given below.
"AGENT" is defined in the first paragraph of this Agreement.
"AGREEMENT" shall mean this Second Amended and Restated Secured Credit
Agreement as supplemented, modified, restated and amended from time to
time.
"ALTERNATIVE CREDIT FACILITY" shall mean any irrevocable letter of
credit, surety bond, insurance policy or other similar instruments, other
than the Bond L/C, issued by any Person to support the Company's
obligations with respect to the Bonds.
"ANNIVERSARY DATE" has the meaning specified in Section 1.1(b) hereof.
"APPLICABLE MARGIN" shall mean, with respect to each type of Loan
described in Column A below, the rate of interest per annum shown in
Columns B, C, D, E and F below for the range of Leverage Ratio specified
for each Column:
0.35 to 1 >0.45 to 1 >0.50 to 1 >0.60 to 1
and and and and
<0.45 to 1 <0.5 to 1 <0.60 to 1 <0.70 to 1
Eurodollar Loans 0.625% 1.00% 1.375% 1.625% 2.0%
Domestic Rate Loans 0.0% 0.0% 0.125% 0.375% 0.75%
CD Rate Loans 0.75% 1.125% 1.50% 1.75% 2.125%
Not later than 5 Business Days after receipt by the Agent of the financial
statements called for by Section 7.4 hereof for the applicable fiscal
quarter, the Agent shall determine the Leverage Ratio for the applicable
period and shall promptly notify the Company and the Banks of such
determination and of any change in the Applicable Margins resulting
therefrom. Any such change in the Applicable Margins shall be effective as
of the date the Agent so notifies the Company and the Banks with respect to
all Loans outstanding on such date, and such new Applicable Margins shall
continue in effect until the effective date of the next quarterly
redetermination in accordance with this Section. Each determination of the
Leverage Ratio and Applicable Margins by the Agent in accordance with this
Section shall be conclusive and binding on the Company and the Banks absent
manifest error. From the date hereof until the Applicable Margins are
first adjusted pursuant hereto, the Applicable Margins shall be those set
forth in column C above.
"ASSESSMENT RATE" shall mean the assessment rate (rounded upwards, if
necessary, to the nearest 1/100 of 1%) imposed by the Federal Deposit
Insurance Corporation or its successors for insuring the Agent's liability
for time deposits, as in effect from time to time.
"BANK" and "BANKS" shall have the meanings specified in the first
paragraph of this Agreement.
"BANKING DAY" shall mean a day on which banks are open for business in
Nassau, Bahamas, London, England, Atlanta, Georgia, Denver, Colorado,
Wichita, Kansas, Dallas, Texas and Chicago, Illinois, other than a Saturday
or Sunday, and dealing in United States Dollar deposits in London, England
and Nassau, Bahamas.
"BID LOAN" shall mean an advance from a Bank to the Company pursuant
to the biding procedures described in Section 2 hereof.
"BONDS" shall mean the $25,000,000 aggregate principal amount of the
Issuer's Environmental Facilities Reserve Bonds (Pilgrim's Pride
Corporation Project), Series 1999.
"BOND DOCUMENTS" shall mean the Indenture and any other instrument and
documents relating to the issuance and sale of the Bonds.
"BOND L/C" shall have the meaning specified in Section 1.10 hereof.
"BOND L/C ADMINISTRATIVE FEES" shall mean the fees payable by the
Company pursuant to Sections 2.4(b) and (c) of the Reimbursement Agreement.
"BOND L/C COMMITMENT" shall have the meaning specified in Section 1.10
hereof.
"BOND L/C EXPOSURE" shall mean, as of any date of determination, the
sum of (a) the unused amount of the Bond L/C Commitment, if any, (b) the
aggregate principal amount of all outstanding Bond Reimbursement
Obligations, if any, and (c) the maximum amount available to be drawn under
the Bond L/C (after giving effect to any reductions thereof as provided in
the Bond L/C), each determined on such date.
"BOND L/C FEE" shall mean the fee payable by the Company pursuant to
Section 2.4(a) of the Reimbursement Agreement.
"BOND REIMBURSEMENT OBLIGATION" shall have the meaning specified in
Section 1.11 hereof.
"BORROWING BASE", as determined on the basis of the information
contained in the most recent Borrowing Base Certificate, shall mean an
amount equal to:
(a) 65% of the Value of Eligible Inventory consisting of feed
grains, feed and ingredients, plus
(b) 65% percent of the Value of Eligible Inventory consisting of
live and dressed broiler chickens and commercial eggs, plus
(c) 65% of the Value of Eligible Inventory consisting of prepared
foods, plus
(d) 100% of the Value of Eligible Inventory consisting of breeder
hens, breeder pullets, commercial hens, commercial pullets and
hatching eggs, plus
(e) 40% of the Value of Eligible Inventory consisting of
packaging materials, vaccines, general supplies, and maintenance
supplies, minus
(f) the aggregate outstanding amount of all Grower Payables that
are more than 15 days past due, minus
(g) the Bond L/C Exposure.
"BORROWING BASE CERTIFICATE" shall mean the certificate in the form of
Exhibit G hereto which is required to be delivered to the Banks in
accordance with Section 7.4(d) hereof.
"BUSINESS DAY" shall mean any day except Saturday or Sunday on which
banks are open for business in Chicago, Illinois, Dallas, Texas, Atlanta,
Georgia, Denver, Colorado and Wichita, Kansas.
"CAPITALIZED LEASE" shall mean, as applied to any Person, any lease of
any Property the discounted present value of the rental obligations of such
person as lessee under which, in accordance with generally accepted
accounting principles, is required to be capitalized on the balance sheet
of such Person.
"CAPITALIZED LEASE OBLIGATION" shall mean, as applied to any Person,
the discounted present value of the rental obligation, as aforesaid, under
any Capitalized Lease.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock, whether or not outstanding on the date of this
Agreement, including, without limitation, any option, warrant or other
right relating to any such capital stock.
"CASH EQUIVALENT" shall mean any short-term investments that are
classified as cash equivalents on the Company's consolidated balance sheet
in accordance with generally accepted accounting principles, consistently
applied.
"CD RATE" shall mean, with respect to each Interest Period applicable
to a CD Rate Loan, the rate per annum determined by the Agent to be the
arithmetic average of the rate per annum determined by the Agent to be the
average of the bid rates quoted to the Agent at approximately 10:00 a.m.
Chicago time (or as soon thereafter as practicable) on the first day of
such Interest Period by at least two certificate of deposit dealers of
recognized national standing selected by the Agent for the purchase at face
value of certificates of deposit of the Agent having a term comparable to
such Interest Period and in an amount comparable to the principal amount of
the CD Rate Loan to be made by the Agent for such Interest Period. Each
determination of the CD Rate made by the Agent in accordance with this
paragraph shall be conclusive and binding on the Company except in the case
of manifest error or willful misconduct.
"CD RESERVE PERCENTAGE" shall mean the rate (as determined by the
Bank) of the maximum reserve requirement (including, without limitation,
any supplemental, marginal and emergency reserves) imposed on the Agent by
the Board of Governors of the Federal Reserve System (or any successor)
from time to time on non-personal time deposits having a maturity equal to
the applicable Interest Period and in an amount equal to the unpaid
principal amount of the relevant CD Rate Loan, subject to any amendments of
such reserve requirement by such Board or its successor, taking into
account any transitional adjustments thereto. The Adjusted CD Rate shall
automatically be adjusted as of the date of any change in the CD Reserve
Percentage.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CERCLIS" shall mean the CERCLA Information System.
"CHANGE IN CONTROL" means (a) a sale of all or substantially all the
assets of the Company to any Person or related group of Persons as an
entirety or substantially as an entirety in one transaction or series of
transactions, (b) the merger or consolidation of the Company with or into
another corporation or the merger of another corporation into the Company
with the effect that immediately after such transaction the stockholders of
the Company immediately prior to such transaction hold less than 51% of the
total voting power generally entitled to vote in the election of directors,
managers or trustees of the Person surviving such merger or consolidation,
(c) the Guarantor or the Pilgrim Family shall cease to own legally or
beneficially more than 51% of the total voting power generally entitled to
vote in the election of directors, managers or trustees of the Company,
(d) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Company
(together with any new directors whose election by such Board or whose
nomination for election by the stockholders of the Company was approved by
a vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute
a majority of the Board of Directors of the Company then in office, or
(e) the stockholders of the Company shall approve any plan for the
liquidation or dissolution of the Company.
"CHANGE IN LAW" shall have the meaning specified in Section 9.3
hereof.
"COLLATERAL" shall mean the collateral security provided to the Agent
for the benefit of the Banks pursuant to the Security Agreement.
"COMMITMENT PERCENTAGE" shall have the meaning set forth in
Section 1.8 hereof.
"COMPANY" shall have the meaning specified in the first paragraph of
this Agreement.
"COMPETITIVE BID" shall mean an offer by a Bank to make a Bid Loan
pursuant to Section 2 hereof.
"COMPETITIVE BID REQUEST" shall mean a request made by the Company
pursuant to Section 2.2 hereof.
"CONTROL" or "CONTROLLED BY" or "UNDER COMMON CONTROL" shall mean
possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of voting
securities, by contract or otherwise); provided that, in any event any
Person which beneficially owns, directly or indirectly, 10% or more (in
number of votes) of the securities having ordinary voting power for the
election of directors of a corporation shall be conclusively presumed to
control such corporation, and provided further that any Consolidated
Subsidiary shall be conclusively presumed to be controlled by the Company.
"CURRENT ASSETS" of any Person shall mean the aggregate amount of
assets of such Person which in accordance with generally accepted
accounting principles may be properly classified as current assets after
deducting adequate reserves where proper.
"CURRENT LIABILITIES" shall mean all items (including taxes accrued as
estimated) which in accordance with generally accepted accounting
principles may be properly classified as current liabilities, and including
in any event all amounts outstanding from time to time under this
Agreement.
"CURRENT RATIO" shall mean the ratio of Current Assets to Current
Liabilities of the Company and its Subsidiaries.
"DEBT" of any Person shall mean as of any time the same is to be
determined, the aggregate of:
(a) all indebtedness, obligations and liabilities of such Person
with respect to borrowed money (including by the issuance of debt
securities);
(b) all guaranties, endorsements and other contingent obligations
of such Person with respect to indebtedness arising from money
borrowed by others;
(c) all reimbursement and other obligations with respect to
letters of credit, bankers acceptances, customer advances and other
extensions of credit whether or not representing obligations for
borrowed money;
(d) the aggregate of the principal components of all leases and
other agreements for the use, acquisition or retention of real or
personal property which are required to be capitalized under generally
accepted accounting principles consistently applied;
(e) all indebtedness, obligations and liabilities representing
the deferred purchase price of property or services (excluding trade
payables incurred in the ordinary course of business); and
(f) all indebtedness secured by a lien on the Property of such
Person, whether or not such Person has assumed or become liable for
the payment of such indebtedness.
"DOMESTIC RATE" means for any day the rate of interest announced by
▇▇▇▇▇▇ from time to time as its prime commercial rate in effect on such
day, with any change in the Domestic Rate resulting from a change in said
prime commercial rate to be effective as of the date of the relevant change
in said prime commercial rate (the "▇▇▇▇▇▇ PRIME RATE"), provided that if
the rate per annum determined by adding 1/2 of 1% to the rate at which
▇▇▇▇▇▇ would offer to sell federal funds in the interbank market on or
about 10:00 a.m. (Chicago time) on any day (the "ADJUSTED FED FUNDS RATE")
shall be higher than the ▇▇▇▇▇▇ Prime Rate on such day, then the Domestic
Rate for such day and for any succeeding day which is not a Business Day
shall be such Adjusted Fed Funds Rate. The determination of the Adjusted
Fed Funds Rate by ▇▇▇▇▇▇ shall be final and conclusive except in the case
of manifest error or willful misconduct.
"DOMESTIC RATE LOAN" means a Revolving Credit Loan which bears
interest as provided in Section 1.3(a) hereof.
"EBITDA" shall mean, in any fiscal year of the Company, all earnings
(other than extraordinary items) of the Company before interest and income
tax obligations of the Company for said year and before depreciation and
amortization charges of the Company for said year, all determined in
accordance with generally accepted accounting principles, consistently
applied.
"ELIGIBLE INVENTORY" shall mean any Inventory of the Company in which
the Agent has a first priority perfected security interest, which the Banks
in their sole judgment deem to be acceptable for inclusion in the Borrowing
Base and which complies with each of the following requirements:
(a) it consists solely of feed grains, feed, ingredients, live
broiler chickens, dressed broiler chickens, commercial eggs, prepared
food products, breeder hens, breeder pullets, hatching eggs,
commercial hens, commercial pullets, packaging materials, vaccines,
general supplies and maintenance supplies;
(b) it is in first class condition, not obsolete, and is readily
usable or salable by the Company in the ordinary course of its
business;
(c) it substantially conforms to the advertised or represented
specifications and other quality standards of the Company, and has not
been determined by the Banks to be unacceptable due to age, type,
category, quality and/or quantity;
(d) all warranties as set forth in this Agreement and the
Security Agreement are true and correct with respect thereto;
(e) it has been identified to the Banks in the manner prescribed
pursuant to the Security Agreement;
(f) it is located at a location within the United States
disclosed to and approved by the Banks and, if requested by the Agent,
any Person (other than the Company) owning or controlling such
location shall have waived all right, title and interest in and to
such Inventory in a manner satisfactory to the Banks; and
(g) it is not subject to any other lien, security interest or
counterclaim.
"ENVIRONMENTAL LAWS" shall have the meaning specified in Section 5.10
hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EURODOLLAR LOAN" shall mean a Revolving Credit Loan which bears
interest as provided in Section 1.3(b) hereof.
"EURODOLLAR RATE" shall mean for each Interest Period applicable to a
Eurodollar Loan, (a) the LIBOR Index Rate for such Interest Period, if such
rate is available, and (b) if the LIBOR Index Rate cannot be determined,
the arithmetic average of the rate of interest per annum (rounded upwards,
if necessary, to nearest 1/100 of 1%) at which deposits in U.S. dollars in
immediately available funds are offered to the Agent at 11:00 a.m. (London,
England time) two (2) Business Days before the beginning of such Interest
Period by major banks in the interbank eurodollar market for a period equal
to such Interest Period and in an amount equal or comparable to the
principal amount of the Eurodollar Loan scheduled to be made by the Agent
during such Interest Period.
"EVENT OF DEFAULT" shall mean any event or condition identified as
such in Section 8.1 hereof.
"FED FUNDS RATE" shall have the meaning specified in Section 1.7(c)
hereof.
"FINANCIAL GUARANTEE L/C" shall mean an L/C issued hereunder that
constitutes a financial guaranty letter of credit under the capital
adequacy requirements applicable to any of the Banks.
"FISCAL YEAR" shall mean the 52 or 53 week period ending on the
Saturday closest to September 30 in each calendar year, regardless of
whether such Saturday occurs in September or October of any calendar year.
"FIXED CHARGE COVERAGE RATIO" shall mean the ratio of (a) the sum of
EBITDA and all amounts payable under all non-cancellable operating leases
(determined on a consolidated basis in accordance with generally accepted
accounting principles, consistently applied) for the period in question, to
(b) the sum of (without duplication) (i) Interest Expense for such period,
(ii) the sum of the scheduled current maturities (determined in accordance
with generally accepted accounting principles consistently applied) of
Funded Debt during the period in question, (iii) all amounts payable under
non-cancellable operating leases (determined as aforesaid) during such
period, and (iv) all amounts payable with respect to capitalized leases
(determined on a consolidated basis in accordance with generally accepted
accounting principles, consistently applied) for the period in question.
"FIXED RATE" shall mean either of the Eurodollar Rate or the Adjusted
CD Rate.
"FIXED RATE LOAN" shall mean a Eurodollar Loan, a CD Rate Loan or a
Bid Loan, and "FIXED RATE LOANS" shall mean any one or more of such types
of Loans.
"FUNDED DEBT," with respect to any Person shall mean all indebtedness
for borrowed money of such Person and with respect to the Company all
indebtedness for borrowed money of the Company, in each case maturing by
its terms more than one year after, or which is renewable or extendible at
the option of such Person for a period ending one year or more after, the
date of determination, and shall include indebtedness for borrowed money of
such maturity created, assumed or guaranteed by such Person either directly
or indirectly, including obligations of such maturity secured by liens upon
Property of such Person and upon which such entity customarily pays the
interest, all current maturities of all such indebtedness of such maturity
and all rental payments under capitalized leases of such maturity.
"FUNDING CORP." shall mean Pilgrim's Pride Funding Corporation, a
Delaware corporation.
"GROWER PAYABLES" shall mean all amounts owed from time to time by the
Company to any Person on account of the purchase price of agricultural
products or services (including poultry and livestock) if the Agent
reasonably determines that such Person is entitled to the benefits of any
grower's lien, statutory trust or similar security arrangements to secure
the payment of any amounts owed to such Person.
"GUARANTOR" shall mean Pilgrim Interests, Ltd., a Texas limited
partnership.
"GUARANTY FEES" shall have the meaning specified in Section 7.30
hereof.
"▇▇▇▇▇▇" shall have the meaning specified in the first paragraph of
this Agreement.
"▇▇▇▇▇▇ - RELATED PERSONS" shall mean ▇▇▇▇▇▇, together with its
Affiliates, and the officers, directors, employees, agents and attorneys-
in-fact of ▇▇▇▇▇▇ and such Affiliates.
"HIGHEST LAWFUL RATE" shall have the meaning specified in
Section 11.19 hereof.
"INDENTURE" shall mean the Trust Indenture dated as of June 15, 1999
between the Issuer and the Trustee, relating to the Bonds, as amended.
"INTANGIBLE ASSETS" shall mean license agreements, trademarks, trade
names, patents, capitalized research and development, proprietary products
(the results of past research and development treated as long term assets
and excluded from Inventory) and goodwill (all determined on a consolidated
basis in accordance with generally accepted accounting principles
consistently applied).
"INTEREST EXPENSE" for any period shall mean all interest charges
during such period, including all amortization of debt discount and expense
and imputed interest with respect to capitalized lease obligations,
determined on a consolidated basis in accordance with generally accepted
accounting principles, consistently applied.
"INTEREST PERIOD" shall mean with respect to (a) the Eurodollar Loans,
the period used for the computation of interest commencing on the date the
relevant Eurodollar Loan is made, continued or effected by conversion and
concluding on the date one, two, three or six months thereafter and, (b) to
the CD Rate Loans, the period used for the computation of interest
commencing on the date the relevant CD Rate Loan is made, continued or
effected by conversion and concluding on the date 30, 60, 90 or 180 days
thereafter, and (c) the Bid Loans, the period used for the computation of
interest commencing on the date the relevant Bid Loan is made and ending on
the date such Bid Loan is scheduled to mature, but in no event may such
period have a duration of less than 30 days or more than 180 days;
PROVIDED, HOWEVER, that no Interest Period for any Fixed Rate Loan may
extend beyond the Termination Date. For purposes of determining an
Interest Period applicable to a Eurodollar Loan, a month means a period
starting on one day in a calendar month and ending on a numerically
corresponding day in the next calendar month; PROVIDED, HOWEVER, that if
there is no numerically corresponding day in the month in which an Interest
Period is to end or if an Interest Period begins on the last day of a
calendar month, then such Interest Period shall end on the last Banking Day
of the calendar month in which such Interest Period is to end.
"INVENTORY" shall mean all raw materials, work in process, finished
goods, and goods held for sale or lease or furnished or to be furnished
under contracts of service in which the Company or any Subsidiary now has
or hereafter acquires any right.
"ISSUER" shall mean the Camp County Industrial Development
Corporation, a nonstock, nonprofit industrial development corporation
existing under the laws of the State of Texas.
"L/C" shall have the meaning set forth in Section 1.5 hereof.
"L/C Agreement" shall have the meaning set forth in Section 1.5
hereof.
"L/C FEE" has the meaning specified in Section 1.5 hereof.
"L/C ISSUANCE FEE" has the meaning specified in Section 1.5 hereof.
"LEVERAGE RATIO" shall mean the ratio for the Company and its
Subsidiaries of (a) an amount equal to the sum of the aggregate outstanding
principal amount of all Debt (other than (i) Debt consisting of
reimbursement and other obligations with respect to undrawn letters of
credit, and (ii) the outstanding principal amount of the Company's Senior
Subordinated Notes, so long as the trustee for the Senior Subordinated
Notes shall hold cash in an amount sufficient to repay the Senior
Subordinated Notes in full) minus the aggregate principal amount of all
cash and Cash Equivalents reflected on the Company's balance sheet that is
not restricted to secure the payment of off-balance sheet liabilities of
the Company or any Subsidiary, to (b) the amount included in clause (a)
above plus Net Worth.
"LIBOR INDEX RATE" shall mean, for any Interest Period applicable to a
Eurodollar Loan, the rate per annum (rounded upwards, if necessary, to the
next higher one hundred-thousandth of a percentage point) for deposits in
U.S. Dollars for a period equal to such Interest Period, which appears on
the Telerate Page 3750 as of 11:00 a.m. (London, England time) on the day
two Banking Days before the commencement of such Interest Period.
"LOAN" shall mean a Revolving Credit Loan or a Bid Loan, and "Loans"
shall mean any two or more Revolving Credit Loans and/or Bid Loans.
"LOAN DOCUMENTS" shall mean this Agreement and any and all exhibits
hereto, the Notes, the L/C Agreements, the Reimbursement Agreement and the
Security Agreement.
"NET INCOME" shall mean the net income of the Company and its
Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles, consistently applied.
"NET TANGIBLE ASSETS" shall mean the excess of the value of the Total
Assets over the value of the Intangible Assets of the Company and its
Subsidiaries.
"NET WORKING CAPITAL" shall mean as to any Person in the excess for
such Person of current assets over current liabilities, each as determined
in accordance with generally accepted accounting principles in the
jurisdiction of such Person (or residence, in the case of an individual).
"NET WORTH" shall mean the Total Assets minus the Total Liabilities of
the Company and its Subsidiaries, all determined on a consolidated basis in
accordance with generally accepted accounting principles, consistently
applied.
"NOTES" shall mean the Revolving Notes, and "NOTE" means any of the
Notes.
"PAR CAPITAL" shall mean Pooled Accounts Receivable Capital
Corporation.
"PARTNERSHIP GUARANTY" shall mean the Guaranty Agreement from the
Guarantor to the Banks, as the same may be supplemented and amended from
time to time.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PERFORMANCE L/C" shall mean any L/C issued hereunder that does not
constitute a Financial Guarantee L/C.
"PERSON" shall mean and include any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (whether
national, federal, state, county, city, municipal, or otherwise, including,
without limitation, any instrumentality, division, agency, body or
department thereof).
"PILGRIM FAMILY" means ▇▇▇▇▇▇ ▇. "Bo" Pilgrim, his spouse, his issue,
his estate and any trust, partnership or other entity primarily for the
benefit of his spouse and/or issue.
"PLAN" shall mean any employee benefit plan covering any officers or
employees of the Company or any Subsidiary, any benefits of which are, or
are required to be, guaranteed by the PBGC.
"POTENTIAL DEFAULT" shall mean any event or condition which, with the
lapse of time, or giving of notice, or both, would constitute an Event of
Default.
"PPAHC" shall mean Pilgrim's Pride Affordable Housing Corp., a Nevada
corporation.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed or tangible or intangible.
"RECEIVABLES" shall mean all accounts, contract rights, instruments,
documents, chattel paper and general intangibles in which the Company now
has or hereafter acquires any right.
"RECEIVABLES SECURITIZATION PROGRAM" shall mean any receivables
securitization program to which the Company is a party which provides for
the sale by the Company, without recourse, of its Receivables for a cash
consideration of not less than 70% of the unpaid value of such Receivables,
and including in any event the receivables securitization program pursuant
to which the Company will sell to Funding Corp. all or substantially all of
the Company's receivables and Funding Corp. will in turn sell an undivided
interest in all of such Receivables to PAR Capital.
"REIMBURSEMENT AGREEMENT" shall have the meaning specified in Section
1.10 hereof.
"REIMBURSEMENT OBLIGATION" has the meaning specified in Section 1.6
hereof.
"REQUIRED BANKS" shall mean any Bank or Banks which in the aggregate
hold at least 66-2/3% of the aggregate unpaid principal balance of the
Loans, Bond Reimbursement Obligations and Reimbursement Obligations or, if
no Loans are outstanding hereunder, any Bank or Banks in the aggregate
having at least 66-2/3% of the Revolving Credit Commitments.
"RESERVE PERCENTAGE" means the daily arithmetic average maximum rate
at which reserves (including, without limitation, any supplemental,
marginal and emergency reserves) are imposed on member banks of the Federal
Reserve System during the applicable Interest Period by the Board of
Governors of the Federal Reserve System (or any successor) under
Regulation D on "EUROCURRENCY LIABILITIES" (as such term is defined in
Regulation D), subject to any amendments of such reserve requirement by
such Board or its successor, taking into account any transitional
adjustments thereto. For purposes of this definition, the Eurodollar Loans
shall be deemed to be eurocurrency liabilities as defined in Regulation D
without benefit or credit for any prorations, exemptions or offsets under
Regulation D.
"REVOLVING CREDIT" shall have the meaning specified in the first
paragraph of this Agreement.
"REVOLVING CREDIT COMMITMENT" and "REVOLVING CREDIT COMMITMENTS" shall
have the meanings specified in Section 1.1(c) hereof.
"REVOLVING CREDIT LOAN" and "REVOLVING CREDIT LOANS" shall have the
meanings specified in Section 1.1(a) hereof.
"REVOLVING NOTE" or "REVOLVING NOTES" shall have the meanings
specified in Section 1.1(d) hereof.
"SECURITY AGREEMENT" shall mean that certain Security Agreement Re:
Accounts Receivable, Farm Products and Inventory, dated as of May 27, 1993,
from the Company to ▇▇▇▇▇▇, as Agent, as such agreement may be supplemented
and amended from time to time.
"SUBORDINATED DEBT" shall mean indebtedness for borrowed money of the
Company which is subordinate in right of payment to the prior payment in
full of the Company's indebtedness, obligations and liabilities to the
Banks under the Loan Documents pursuant to written subordination provisions
satisfactory in form and substance to the Banks.
"SUBSIDIARY" shall mean collectively any corporation or other entity
at least a majority of the outstanding voting equity interests (other than
directors' qualifying shares) of which is at the time owned directly or
indirectly by the Company or by one of more Subsidiaries or by the Company
and one or more Subsidiaries. The term "CONSOLIDATED SUBSIDIARY" shall
mean any Subsidiary whose accounts are consolidated with those of the
Company in accordance with generally accepted accounting principles. The
term "FOREIGN SUBSIDIARY" shall mean any Subsidiary substantially all of
whose assets, operations and business are located outside of the United
States and the term "MEXICAN SUBSIDIARY" shall mean a Foreign Subsidiary
substantially all of whose assets, business and operations are located in
the Republic of Mexico. The term "MATERIAL SUBSIDIARY" shall mean any
Subsidiary whose assets total 5% or more of the Total Assets of the
Company.
"TANGIBLE NET WORTH" shall mean the Net Worth minus the amount of all
Intangible Assets of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting
principles, consistently applied.
"TELERATE PAGE 3750" shall mean the display designated as "PAGE 3750"
on the Telerate Service (or such other page as may replace Page 3750 on
that service or such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits).
"TERMINATION DATE" shall have the meaning set forth in Section 1.1(a)
hereof.
"TOTAL ASSETS" shall mean at any date, the aggregate amount of assets
of the Company and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles consistently
applied.
"TOTAL LIABILITIES" shall mean at any date, the aggregate amount of
all liabilities of the Company and its Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting
principles, consistently applied.
"TRUSTEE" shall mean ▇▇▇▇▇▇ Trust and Savings Bank, as Trustee under
the Indenture, and any successor trustee thereunder.
"VALUE OF ELIGIBLE INVENTORY" shall mean as of any given date with
respect to Eligible Inventory:
(a) With respect to Eligible Inventory consisting of feed grains,
feed, ingredients, dressed broiler chickens and commercial eggs, an
amount equal to the lower of (i) costs determined on a
first-in-first-out inventory basis (determined in accordance with
generally accepted accounting principles consistently applied), or
(ii) wholesale market value;
(b) With respect to Eligible Inventory consisting of live broiler
chickens, a price per pound equal to 75% of (i) the price quoted on
the Los Angeles Majority Market on the date of calculation minus (ii)
$0.085, rounded up to the nearest 1/4 cent;
(c) With respect to Eligible Inventory consisting of prepared
food products, the standard cost value;
(d) With respect to Eligible Inventory consisting of: breeder
hens, $1.50 per head; breeder pullets, $1.00 per head; commercial
hens, $0.70 per head; commercial pullets, $0.40 per head; and hatching
eggs, $1.25 a dozen; or in each case such other values as may be
agreed upon by the Company and the Required Banks; and
(e) With respect to Eligible Inventory consisting of packaging
materials, vaccines, general supplies and maintenance supplies, actual
costs.
SECTION 4.2. ACCOUNTING TERMS. Any accounting term or the character or
amount of any asset or liability or item of income or expense required to
be determined under this Agreement, shall be determined or made in
accordance with generally accepted accounting principles at the time in
effect, to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
SECTION 5. Representations and Warranties.
The Company represents and warrants to the Banks as follows:
SECTION 5.1. ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly organized and existing and in good standing under the laws of the
State of Delaware, has full and adequate corporate power to carry on its
business as now conducted, is duly licensed or qualified in all
jurisdictions wherein the nature of its activities requires such licensing
or qualification except where the failure to be so licensed or qualified
would not have a material adverse effect on the condition, financial or
otherwise, of the Company, has full right and authority to enter into this
Agreement and the other Loan Documents, to make the borrowings herein
provided for, to issue the Notes in evidence thereof, to encumber its
assets as collateral security for such borrowings and to perform each and
all of the matters and things herein and therein provided for; and this
Agreement does not, nor does the performance or observance by the Company
of any of the matters or things provided for in the Loan Documents,
contravene any provision of law or any charter or by-law provision or any
covenant, indenture or agreement of or affecting the Company or its
Properties.
SECTION 5.2. SUBSIDIARIES. Each Subsidiary is duly organized and existing
under the laws of the jurisdiction of its incorporation or organization,
has full and adequate corporate or other organizational power to carry on
its business as now conducted and is duly licensed or qualified in all
jurisdictions wherein the nature of its business requires such licensing or
qualification and the failure to be so licensed or qualified would have a
material adverse effect upon the business, operations or financial
condition of such Subsidiary and the Company taken as a whole. As of the
date hereof, the only Subsidiaries of the Company are set forth on
Exhibit H hereto.
SECTION 5.3. FINANCIAL REPORTS. The Company has heretofore delivered to
the Banks a copy of the Audit Report as of September 26, 1998 of the
Company and its Subsidiaries and unaudited financial statements (including
a balance sheet, statement of income and retained earnings, statement of
cash flows, footnotes and comparison to the comparable prior year period)
of the Company as of, and for the period ending July 3, 1999. Such audited
financial statements have been prepared in accordance with generally
accepted accounting principles on a basis consistent, except as otherwise
noted therein, with that of the previous fiscal year or period and fairly
reflect in all material respects the consolidated financial position of the
Company and its Subsidiaries as of the dates thereof, and the consolidated
results of its operations for the periods covered thereby. The Company and
its Subsidiaries have no material contingent liabilities other than as
indicated on said financial statements and since said date of September 26,
1998 there has been no material adverse change in the condition, financial
or otherwise, of the Company and its Subsidiaries, taken as a whole that
has not been disclosed in writing to the Banks.
SECTION 5.4. LITIGATION; TAX RETURNS; APPROVALS. There is no litigation
or governmental proceeding pending, nor to the knowledge of the Company
threatened, against the Company or any Subsidiary which, if adversely
determined, is likely to result in any material adverse change in the
Properties, business and operations of the Company and its Subsidiaries,
taken as a whole. All income tax returns for the Company required to be
filed have been filed on a timely basis, all amounts required to be paid as
shown by said returns have been paid except where the failure to make such
filing or payment could not reasonably be expected to have a material
adverse effect on the business, operations, Property or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole. There are no pending or, to the best of the Company's knowledge,
threatened objections to or controversies in respect of the United States
federal income tax returns of the Company for any fiscal year except such
objection or controversies that could not reasonably be expected to have a
material adverse effect on the business, operations, Property or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole or are being contested in good faith by appropriate proceedings and
adequate reserves have been provided therefor in accordance with generally
accepted accounting principles consistently applied. No authorization,
consent, license, exemption or filing (other than the filing of financing
statements) or registration with any court or governmental department,
agency or instrumentality, is or will be necessary to the valid execution,
delivery or performance by the Company of the Loan Documents.
SECTION 5.5. REGULATION U. Neither the Company nor any Subsidiary is
engaged in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System) and no part of the proceeds of
any Loan made hereunder will be used to purchase or carry any margin stock
or to extend credit to others for such a purpose.
SECTION 5.6. NO DEFAULT. As of the date of this Agreement, the Company is
in full compliance with all of the terms and conditions of this Agreement,
and no Potential Default or Event of Default is existing under this
Agreement.
SECTION 5.7. ERISA. The Company and its Subsidiaries are in compliance in
all material respects with ERISA to the extent applicable to them and have
received no written notice to the contrary from the PBGC or any other
governmental entity or agency.
SECTION 5.8. SECURITY INTERESTS AND DEBT. There are no security
interests, liens or encumbrances on any of the Property of the Company or
any Subsidiary except such as are permitted by Section 7.16 of this
Agreement, and the Company and its Subsidiaries have no Debt except such as
is permitted by Section 7.17 of this Agreement.
SECTION 5.9. ACCURATE INFORMATION. No information, exhibit or report
furnished by the Company to the Banks in connection with the negotiation of
the Loan Documents contained any misstatement of material fact or omitted
to state a material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which
made.
SECTION 5.10. ENVIRONMENTAL MATTERS. (a) Except as disclosed on EXHIBIT C,
the Company has not received any written notice to the effect, or has any
knowledge, that its or any Subsidiary's Property or operations are not in
compliance with any of the requirements of applicable federal, state and
local environmental, health and safety statutes and regulations
("ENVIRONMENTAL LAWS") or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond
to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a material adverse effect on the business, operations,
Property, assets or conditions (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole;
(b) there have been no releases of hazardous materials at, on or under
any Property now or previously owned or leased by the Company or any
Subsidiary that, singly or in the aggregate, have, or may reasonably be
expected to have, a material adverse effect on the financial condition,
operations, assets, business or Properties of the Company and its
Subsidiaries, taken as a whole;
(c) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Company or any Subsidiary that, singly or
in the aggregate, have, or may reasonably be expected to have, a material
adverse effect on the financial condition, operations, assets, business or
Properties of the Company and its Subsidiaries, taken as a whole;
(d) neither the Company nor any Subsidiary has directly transported or
directly arranged for the transportation of any hazardous material to any
location which is listed or proposed for listing on the National Priorities
List pursuant to CERCLA, on the CERCLIS or on any similar state list or
which is the subject of federal, state or local enforcement actions or
other investigations which could reasonably be expected to lead to material
claims against the Company or any Subsidiary thereof for any remedial work,
damage to natural resources or personal injury, including claims under
CERCLA; and
(e) no conditions exist at, on or under any Property now or previously
owned or leased by the Company or any Subsidiary which, with the passage of
time, or the giving of notice or both, would give rise to any material
liability under any Environmental Law.
SECTION 5.11. ENFORCEABILITY. This Agreement and the other Loan Documents
are legal, valid and binding agreements of the Company, enforceable against
it in accordance with their terms, except as may be limited by (a)
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 (b) any equitable principles
relating to or limiting the rights of creditors generally.
SECTION 5.12. RESTRICTIVE AGREEMENTS. Neither the Company nor any
Subsidiary is a party to any contract or agreement, or subject to any
charge or other corporate restriction, which adversely affects its ability
to execute, deliver and perform the Loan Documents to which it is a party
and repay its indebtedness, obligations and liabilities under the Loan
Documents or which materially and adversely affects or, insofar as the
Company can reasonably foresee, could reasonably be expected to materially
and adversely affect, the property, business, operations or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole, or would in any respect materially and adversely affect the
Collateral, the repayment of the indebtedness, obligations and liabilities
under the Loan Documents, or any Bank's or the Agent's rights under the
Loan Documents.
SECTION 5.13. LABOR DISPUTES. Except as set forth on EXHIBIT J, (a) as of
the date hereof, there is no collective bargaining agreement or other labor
contract covering employees of the Company or any of its Subsidiaries;
(b) no such collective bargaining agreement or other labor contract is
scheduled to expire during the term of this Agreement; (c) no union or
other labor organization is seeking to organize, or to be recognized as, a
collective bargaining unit of employees of the Company or any of its
Subsidiaries; and (d) there is no pending or (to the best of the Company's
knowledge) threatened strike, work stoppage, material unfair labor practice
claim or other material labor dispute against or affecting the Company or
any of its Subsidiaries or their respective employees.
SECTION 5.14. NO VIOLATION OF LAW. Neither the Company nor any Subsidiary
is in violation of any law, statute, regulation, ordinance, judgment, order
or decree applicable to it which violation could reasonably be expected to
in any respect materially and adversely affect the Collateral, the
repayment of the indebtedness, obligations and liabilities under the Loan
Documents, any Bank's or the Agent's rights under the Loan Documents, or
the Property, business, operations or condition (financial or otherwise) of
the Company and its Subsidiaries, taken as a whole.
SECTION 5.15. NO DEFAULT UNDER OTHER AGREEMENTS. Neither the Company nor
any Subsidiary is in default with respect to any note, indenture, loan
agreement, mortgage, lease, deed, or other agreement to which it is a party
or by which it or its Property is bound, which default could reasonably be
expected to materially and adversely affect the Collateral, the repayment
of the indebtedness, obligations and liabilities under the Loan Documents,
any Bank's or the Agent's rights under the Loan Documents or the Property,
business, operations or condition (financial or otherwise) of the Company
and its Subsidiaries, taken as a whole.
SECTION 5.16. STATUS UNDER CERTAIN LAWS. Neither the Company nor any of
its Subsidiaries is an "INVESTMENT COMPANY" or a person directly or
indirectly controlled by or acting on behalf of an "INVESTMENT COMPANY"
within the meaning of the Investment Company Act of 1940, as amended, or a
"HOLDING COMPANY," or a "SUBSIDIARY COMPANY" of a "HOLDING COMPANY," or an
"AFFILIATE" of a "HOLDING COMPANY" or a "SUBSIDIARY COMPANY" of a "HOLDING
COMPANY," within the meaning of the Public Utility Holding Company Act of
1935, as amended.
SECTION 5.17. FEDERAL FOOD SECURITY ACT. The Company has received no
written notice given pursuant to Section 1324(e)(1) or (3) of the Federal
Food Security Act and there has not been filed any financing statement or
notice, purportedly in compliance with the provisions of the Federal Food
Security Act, purporting to perfect a security interest in farm products
purchased by the Company in favor of a secured creditor of the seller of
such farm products. The Company has registered, pursuant to Section
1324(c)(2)(D) of the Federal Food Security Act, with the Secretary of State
of each State in which are produced farm products purchased by the Company
and which has established or hereafter establishes a central filing system,
as a buyer of farm products produced in such State; and each such
registration is in full force and effect.
Section 5.18. FAIR LABOR STANDARDS ACT. The Company and each Subsidiary
has complied in all material respects with, and will continue to comply
with, the provisions of the Fair Labor Standards Act of 1938, 29 U.S.C.
section201, ET SEQ., as amended from time to time (the "FLSA"), including
specifically, but without limitation, 29 U.S.C. section215(a). This
representation and warranty, and each reconfirmation hereof, shall
constitute written assurance from the Company, given as of the date hereof
and as of the date of each reconfirmation, that the Company and each
Subsidiary has complied in all material respects with the requirements of
the FLSA, in general, and Section 15(a)(1), 29 U.S.C. section 215(a)(1),
thereof, in particular.
SECTION 5.19. ORGANIZATION AND QUALIFICATION OF THE GUARANTOR. The
Guarantor is a limited partnership duly organized and existing and in good
standing under the laws of the State of Texas, has full and adequate
partnership power to carry on its business as now conducted, is duly
licensed or qualified in all jurisdictions wherein the nature of its
activities requires such licensing or qualification except where the
failure to be so licensed or qualified would not have a material adverse
effect on the condition, financial or otherwise, of the Guarantor, has full
right and authority to enter into the Partnership Guaranty, to guaranty the
payment when due of the Company's indebtedness, obligations and liabilities
to the Banks under the Loan Documents pursuant to the Partnership Guaranty
and to perform each and all of the matters and things therein provided for;
and the Partnership Guaranty does not, nor does the performance or
observance by the Guarantor of any of the matters or things provided for in
the Partnership Guaranty, contravene any provision of law or any provision
of the Guarantor's certificate of limited partnership or its limited
partnership agreement or any covenant, indenture or agreement of or
affecting the Guarantor or its Properties.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of the Banks to make any Loan pursuant hereto or to
issue any L/C shall be subject to the following conditions precedent:
SECTION 6.1. GENERAL. The Agent shall have received the notice of
borrowings and requests for L/Cs and the Notes hereinabove provided for.
SECTION 6.2. EACH EXTENSION OF CREDIT. As of the time of the making of
each Loan and the issuance of each L/C hereunder (including the initial
Loan or L/C, as the case may be):
(a) each of the representations and warranties set forth in
Section 5 hereof shall be and remain true and correct as of said time
as if made at said time, except that (i) the representations and
warranties made under Section 5.3 shall be deemed to refer to the most
recent financial statements furnished to the Banks pursuant to Section
7.4 hereof and (ii) with respect to the Company's Foreign Subsidiaries
the representations and warranties made under Section 5.13(d) shall be
deemed to refer only to material strikes, work stoppages, unfair labor
practice claims or other material labor disputes;
(b) the Company shall be in full compliance with all of the terms
and conditions hereof, and no Potential Default or Event of Default
shall have occurred and be continuing;
(c) after giving effect to the requested extension of credit and
to each Loan that has been made and L/C issued hereunder, the
aggregate principal amount of all Loans, the amount available for
drawing under all L/Cs and the aggregate principal amount of all
Reimbursement Obligations then outstanding shall not exceed the lesser
of (i) the sum of the Banks' Revolving Credit Commitments then in
effect and (ii) the Borrowing Base as determined on the basis of the
most recent Borrowing Base Certificate, except as otherwise agreed by
the Company and all of the Banks; and
(d) no change shall have occurred in the condition or operation
of the Company or any Subsidiary since the date of the financial
statements (quarterly or annual, as applicable) most recently provided
by the Company to the Banks pursuant to Sections 7.4(a) or (b), as
applicable, which, when considered in the aggregate, could reasonably
be expected to have a material adverse effect on the business,
operations, Property or condition (financial or otherwise) of the
Company and its Subsidiaries taken as a whole;
and the request by the Company for any Loan or L/C pursuant hereto shall be
and constitute a warranty to the foregoing effects.
SECTION 7. COVENANTS.
It is understood and agreed that so long as credit is in use or
available under this Agreement or any amount remains unpaid on any Note,
Reimbursement Obligation, L/C, Bond Reimbursement Obligation or Bond L/C,
except to the extent compliance in any case or cases is waived in writing
by the Required Banks:
SECTION 7.1. MAINTENANCE. The Company will, and will cause each
Subsidiary to, maintain, preserve and keep its plant, Properties and
equipment in good repair, working order and condition and will from time to
time make all needful and proper repairs, renewals, replacements, additions
and betterments thereto so that at all times the efficiency thereof shall
be preserved and maintained in all material respects, normal wear and tear
excepted.
SECTION 7.2. TAXES. The Company will, and will cause each Subsidiary to,
duly pay and discharge all taxes, rates, assessments, fees and governmental
charges upon or against the Company or its Subsidiaries or against their
respective Properties in each case before the same become delinquent and
before penalties accrue thereon unless and to the extent that the same are
being contested in good faith and by appropriate proceedings diligently
conducted and for which adequate reserves in form and amount reasonably
satisfactory to the Required Banks have been established or where the
failure to make such payment could not reasonably be expected to have a
material adverse effect on the business, operations, Property or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole, provided that the Company shall pay or cause to be paid all such
taxes, rates, assessments, fees and governmental charges forthwith upon the
commencement of proceedings to foreclose any lien which is attached as
security therefor, unless such foreclosure is stayed by the filing of an
appropriate bond in a manner satisfactory to the Required Banks.
SECTION 7.3. MAINTENANCE OF INSURANCE. The Company will, and will cause
each Subsidiary to, maintain insurance coverage by good and responsible
insurance underwriters in such forms and amounts and against such risks and
hazards as are customary for companies engaged in similar businesses and
owning and operating similar Properties, provided that the Company and its
Subsidiaries may self-insure for workmen's compensation, group health risks
and their live chicken inventory in accordance with applicable industry
standards. In any event, the Company will insure any of its Property which
is insurable against loss or damage by fire, theft, burglary, pilferage and
loss in transit, all in amounts and under policies containing loss payable
clauses to the Agent as its interest may appear (and, if the Required Banks
request, naming the Agent as additional insured therein) and providing for
advance notice to the Agent of cancellation thereof, issued by sound and
reputable insurers accorded a rating of A-XII or better by A.M. Best
Company, Inc. or A or better by Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Service, Inc. and all premiums thereon shall be paid by the
Company and certificates summarizing the same delivered to the Agent.
SECTION 7.4. FINANCIAL REPORTS. The Company will, and will cause each
Subsidiary to, maintain a standard and modern system of accounting in
accordance with sound accounting practice and will furnish to the Banks and
their duly authorized representatives such information respecting the
business and financial condition of the Company and its Subsidiaries as may
be reasonably requested and, without any request, will furnish to the
Banks:
(a) as soon as available, and in any event within 45 days after
the close of each quarterly fiscal period of the Company a copy of the
consolidated balance sheet, statement of income and retained earnings,
statement of cash flows, and the results of operations of the Company
and its Subsidiaries, for such period of the Company and its
Subsidiaries, and unaudited consolidating balance sheets, statement of
income and retained earnings and the results of operations for the
Company and its Material Subsidiaries, in each case, together with all
such information for the year to date, all in reasonable detail,
prepared by the Company and certified on behalf of the Company by the
Company's chief financial officer;
(b) as soon as available, and in any event within 90 days after
the close of each fiscal year, a copy of the audit report for such
year and accompanying financial statements, including a consolidated
balance sheet, a statement of income and retained earnings, and a
statement of cash flows, together with all footnotes thereto, for the
Company and its Subsidiaries, and unaudited consolidating balance
sheets, statement of income and retained earnings and statements of
cash flows for the Company and its Material Subsidiaries, in each
case, showing in comparative form the figures for the previous fiscal
year of the Company, all in reasonable detail, accompanied by an
unqualified opinion of Ernst & Young or other independent public
accountants of nationally recognized standing selected by the Company
and reasonably satisfactory to the Required Banks, such opinion to
indicate that such statements are prepared in accordance with
generally accepted accounting principles;
(c) each of the financial statements furnished to the Banks
pursuant to paragraph (a) and (b) above shall be accompanied by a
Compliance Certificate in the form of Exhibit F hereto signed on
behalf of the Company by its chief financial officer;
(d) within 30 days after the end of each month, a Borrowing Base
Certificate in the form of Exhibit G hereto, setting forth a
computation of the Borrowing Base as of that month's end date,
certified as correct on behalf of the Company by the Company's chief
financial officer and certifying that as of the last day of the
preceding monthly period the signer thereof has re-examined the terms
and provisions of this Agreement and the Security Agreement and that
to the best of his knowledge and belief, no Potential Default or Event
of Default has occurred or, if any such Potential Default or Event of
Default has occurred, setting forth the description of such Potential
Default or Event of Default and specifying the action, if any, taken
by the Company to remedy the same;
(e) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which
the Company shall have filed with the Securities and Exchange
Commission or any governmental agency substituted therefor, or any
national securities exchange, including copies of the Company's form
10-K annual report, including financial statements audited by Ernst &
Young or other independent public accountants of nationally recognized
standing selected by the Company and reasonably satisfactory to the
Bank, its form 10-Q quarterly report to the Securities and Exchange
Commission and any Form 8-K filed by the Company with the Securities
and Exchange Commission; and
(f) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and
proxy statements so mailed.
SECTION 7.5. INSPECTION AND REVIEWS. The Company shall, and shall cause
each Subsidiary to, permit the Agent and the Banks, by their
representatives and agents, to inspect any of the properties, corporate
books and financial records of the Company and its Subsidiaries, to review
and make copies of the books of accounts and other financial records of the
Company and its domestic Subsidiaries, and to discuss the affairs, finances
and accounts of the Company and its Subsidiaries with, and to be advised as
to the same by, its officers at such reasonable times and intervals as the
Agent or the Banks may designate. In addition to any other compensation or
reimbursement to which the Agent and the Banks may be entitled under the
Loan Documents, after the occurrence of an Event of Default and during the
continuation thereof the Company shall pay to the Agent from time to time
upon demand the amount necessary to compensate it for all fees, charges and
expenses incurred by the Agent or its designee in connection with the
audits of Collateral, or inspections or review of the books, records and
accounts of the Company or any domestic Subsidiary conducted by the Agent
or its designee or any of the Banks.
SECTION 7.6. CONSOLIDATION AND MERGER. The Company will not, and will not
permit any Subsidiary to, consolidate with or merge into any Person, or
permit any other Person to merge into it, or acquire (in a transaction
analogous in purpose or effect to a consolidation or merger) all or
substantially all the Property of the other Person, or acquire
substantially as an entirety the business of any other Person, without the
prior written consent of the Required Banks; PROVIDED, HOWEVER, that (a) if
no Potential Default or Event of Default shall have occurred and be
continuing or shall result therefrom (including compliance on a pro forma
basis with Sections 7.8, 7.9, 7.10, 7.11, 7.12 and 7.13) the Company may
acquire all or substantially all the Property of the other Person, or
acquire substantially as an entirety the business of any other Person if
the aggregate fair market value of all consideration paid or payable by the
Company in all such acquisitions made in any Fiscal Year does not exceed
$50,000,000 and (b) a Subsidiary or the Company may acquire, merge with or
into or consolidate with another Subsidiary so long as, in the case of an
acquisition, a merger or a consolidation involving the Company, the Company
is the surviving or resulting entity.
SECTION 7.7. TRANSACTIONS WITH AFFILIATES. The Company will not, and will
not permit any Subsidiary to, enter into any transaction, including without
limitation, the purchase, sale, lease or exchange of any Property, or the
rendering of any service, with any Affiliate of the Company or such
Subsidiary except (a) in the ordinary course of and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and
upon fair and reasonable terms not materially less favorable to the Company
than would be obtained in a comparable arm's-length transaction with a
Person not an Affiliate of the Company or such Subsidiary; PROVIDED, that
in the case of any such transaction involving the Company or a Subsidiary,
on the one hand, and another Subsidiary, on the other hand, such
transaction is in the ordinary course and pursuant to the reasonable
requirements of the Company's or such Subsidiary's business, (b) on-going
transactions with Affiliates of the type disclosed in the Company's proxy
statement for its Fiscal Year ended September 26, 1998; (c) the sale of all
or substantially all of the Company's Receivables pursuant to a Receivables
Securitization Program; and (d) the guaranties and environmental
indemnities described in Section 7.17(o) hereof.
SECTION 7.8. LEVERAGE RATIO. The Company will not permit its Leverage
Ratio at any time to exceed 0.625 to 1.
SECTION 7.9. TANGIBLE NET WORTH. The Company shall maintain its Tangible
Net Worth at all times during the periods specified below in an amount not
less than the minimum required amount for each period set forth below:
(a) from the date hereof through the next to last day in Fiscal
Year 1999, $181,091,000; and
(b) from the last day of Fiscal Year 1999 and at all times during
each Fiscal Year thereafter, an amount in any Fiscal Year equal to the
minimum amount required to be maintained during the preceding Fiscal
Year plus an amount equal to 75% of the Company's Net Income (but not
less than zero) during such Fiscal Year, if the Company's Leverage
Ratio for such Fiscal Year is equal to or greater than 0.5 to 1, or
50% of the Company's Net Income (but not less than zero) if the
Company's Leverage Ratio for such Fiscal Year is less than 0.5 to 1.
SECTION 7.10. CURRENT RATIO. The Company will maintain at all times and
measured as of the last day of each quarterly fiscal accounting period a
Current Ratio of not less than 1.35 to 1.
SECTION 7.11. NET TANGIBLE ASSETS TO TOTAL LIABILITIES. The Company will
not permit the ratio of its Net Tangible Assets to its Total Liabilities at
any time but measured as of the last day of each quarterly fiscal
accounting period to be less than 1.3 to 1.
SECTION 7.12. FIXED CHARGE COVERAGE RATIO. The Company will not permit, as
of the last day of each fiscal quarter of the Company, its Fixed Charge
Coverage Ratio in the eight consecutive fiscal quarters of the Company then
ended to be less than 1.5 to 1 on the last day of each fiscal quarter of
the Company.
SECTION 7.13. MINIMUM NET WORKING CAPITAL. The Company will maintain Net
Working Capital at all times during each period specified below (measured
as of the last day of each monthly fiscal accounting period) in an amount
not less than the amount specified below for each period:
(a) during Fiscal Year 1999, $50,000,000;
(b) during Fiscal Year 2000, $55,000,000; and
(c) during each Fiscal Year thereafter, $60,000,000.
SECTION 7.14. INTENTIONALLY OMITTED.
SECTION 7.15. DIVIDENDS AND CERTAIN OTHER RESTRICTED PAYMENTS. The Company
will not (a) declare or pay any dividends or make any distribution on any
class of its capital stock (other than dividends payable solely in its
capital stock) or (b) directly or indirectly purchase, redeem or otherwise
acquire or retire any of its capital stock (except out of the proceeds of,
or in exchange for, a substantially concurrent issue and sale of capital
stock) or (c) make any other distributions with respect to its capital
stock; PROVIDED, HOWEVER, that if no Potential Default or Event of Default
shall exist before and after giving effect thereto, the Company may (i) pay
dividends in an aggregate amount not to exceed $3,400,000 in any Fiscal
Year, (ii) pay dividends permitted under Section 7.15(i) during the
immediately preceding Fiscal Year that were declared but not paid in the
immediately preceding Fiscal Year, and (iii) repurchase the Company's
capital stock in an aggregate amount not to exceed $25,000,000.
SECTION 7.16. LIENS. The Company will not, and will not permit any
Subsidiary to, pledge, mortgage or otherwise encumber or subject to or
permit to exist upon or be subjected to any lien, charge or security
interest of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof), on any of its
Properties of any kind or character other than:
(a) liens, pledges or deposits for workmen's compensation,
unemployment insurance, old age benefits or social security
obligations, taxes, assessments, statutory obligations or other
similar charges, good faith deposits made in connection with tenders,
contracts or leases to which the Company or a Subsidiary is a party or
other deposits required to be made in the ordinary course of business,
provided in each case the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate proceedings
and adequate reserves have been provided therefor in accordance with
generally accepted accounting principles and that the obligation is
not for borrowed money, customer advances, trade payables or
obligations to agricultural producers;
(b) the pledge of Property for the purpose of securing an appeal
or stay or discharge in the course of any legal proceedings, provided
that the aggregate amount of liabilities of the Company and its
Subsidiaries so secured by a pledge of Property permitted under this
subsection (b) including interest and penalties thereon, if any, shall
not be in excess of $5,000,000 at any one time outstanding;
(c) liens, pledges, mortgages, security interests, or other
charges granted to the Agent to secure the Notes, L/Cs, or the
Reimbursement Obligations;
(d) liens, pledges, security interests or other charges now or
hereafter created under the Security Agreement;
(e) security interests or other interests of a lessor in
equipment leased by the Company or any Subsidiary as lessee under any
financing lease, to the extent such security interest or other
interest secures rental payments payable by the Company thereunder;
(f) liens of carriers, warehousemen, mechanics and materialmen
and other like liens, in each case arising in the ordinary course of
the Company's or any Subsidiary's business to the extent they secure
obligations that are not past due or, if past due, which do not exceed
an aggregate at any one time of $5,000,000 or are being contested in
good faith by appropriate proceedings and adequate reserves have been
provided therefor in accordance with generally accepted accounting
principals;
(g) such minor defects, irregularities, encumbrances, easements,
rights of way, and clouds on title as normally exist with respect to
similar properties which do not materially impair the Property
affected thereby for the purpose for which it was acquired;
(h) liens, pledges, mortgages, security interests or other
charges granted by any of the Company's Foreign Subsidiaries in such
Foreign Subsidiary's Inventory, fixed assets and accounts receivable,
in each case securing only indebtedness in an aggregate principal
amount of up to 75% of the Net Working Capital of such Foreign
Subsidiaries incurred by such Subsidiaries for working capital
purposes;
(i) statutory landlord's liens under leases;
(j) existing liens described on Exhibit D hereto;
(k) liens on the cash surrender value of the life insurance
policy maintained by the Company on the life of ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
to the extent such liens secure loans in an aggregate principal amount
not to exceed $900,000;
(l) liens, security interests, pledges, mortgages or other
charges in any Property other than the Collateral securing obligations
in an aggregate amount not exceeding $1,000,000 at any time;
(m) liens, mortgages and security interests in the Company's real
estate, buildings, machinery and equipment securing indebtedness
permitted only by Section 7.17(j) of this Agreement;
(n) the interest of any purchaser of the Company's Receivables
purchased by it pursuant to a Receivables Securitization Program in
such Receivables;
(o) liens and security interests granted by PPAHC on its real
estate and all buildings and improvements thereon and all rents,
issues and profits thereof securing indebtedness permitted by
Sections 7.17(n) and (o) hereof;
(p) (i) liens, pledges, mortgages, security interests, or other
charges granted to the Agent to secure the Bond L/C or the Bond
Reimbursement Obligations, and (ii) liens, pledges, mortgages,
security interests or other charges in Property other than the
Collateral granted to the issuer of an Alternate Credit Facility to
secure the Company's obligations to such issuer with respect to the
Alternate Credit Facility;
(q) liens, pledges, mortgages and security interests on assets
(other than the Collateral) of the Company and its Subsidiaries to
secure indebtedness permitted by Section 7.17(u) hereof; and
(r) liens of Agricultural Production Credit Association on equity
interests in Agricultural Production Credit Association.
SECTION 7.17. BORROWINGS AND GUARANTIES. The Company will not, and will
not permit any Subsidiary to, issue, incur, assume, create or have
outstanding any indebtedness for borrowed money (including as such all
indebtedness representing the deferred purchase price of Property) or
customer advances, nor be or remain liable, whether as endorser, surety,
guarantor or otherwise, for or in respect of any liability or indebtedness
of any other Person, other than:
(a) indebtedness of the Company arising under or pursuant to this
Agreement or the other Loan Documents;
(b) the liability of the Company arising out of the endorsement
for deposit or collection of commercial paper received in the ordinary
course of business;
(c) trade payables of the Company arising in the ordinary course
of the Company's business;
(d) indebtedness disclosed on the audited financial statements
referred to in Section 5.3 hereof;
(e) Subordinated Debt in an aggregate principal amount not to
exceed $100,000,000 maturing no earlier than August 1, 2003;
(f) indebtedness in an aggregate principal amount of up to 75% of
each Foreign Subsidiary's working capital incurred by the Company's
Foreign Subsidiaries for working capital purposes;
(g) Debt arising from sale/leaseback transactions permitted by
Section 7.32 hereof and under Capitalized Lease Obligations;
(h) indebtedness of any Foreign Subsidiary to any other Foreign
Subsidiary;
(i) loans in an aggregate principal amount of up to $900,000
against the cash surrender value of the life insurance policy
maintained on the life of ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇;
(j) Funded Debt incurred to finance capital expenditures;
(k) in addition to the indebtedness permitted by Section 7.17(f)
hereof, unsecured indebtedness of the Company or its Foreign
Subsidiaries in an aggregate principal amount not to exceed
$20,000,000 outstanding at any time incurred to finance the Company's
or its Foreign Subsidiaries working capital needs;
(l) indebtedness in an aggregate principal amount not to exceed
$85,000,000, which includes $15,000,000 currently unfunded at
principal and interest payments yet to be determined, owed to ▇▇▇▇
▇▇▇▇▇▇▇ Mutual Life Insurance Company and Signature 1A (Cayman), Ltd.;
notes payable with interest rates at 7.21%, 9.39%, 9.45%, 7.11% and
7.07%, payable in monthly installments of $455,305, $61,839, $23,860,
$134,750 and $135,412, respectively, plus balloon payments at maturity
on February 28, 2006 and any indebtedness incurred to refinance such
indebtedness; PROVIDED such refinancing does not exceed the greater of
the original principal amount of the indebtedness being refinanced and
75% of the appraised value (as shown in an appraisal performed by an
appraiser satisfactory to the Agent; PROVIDED that the Agent shall be
deemed to have approved any appraiser that has prepared an appraisal
on or before the date hereof for any assets pledged on or before the
date hereof to ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company and
Signature 1A (Cayman), Ltd., pursuant to the terms of that certain
Amended and Restated Note Purchase Agreement among the Company, ▇▇▇▇
▇▇▇▇▇▇▇ Mutual Life Insurance Company and Signature 1A (Cayman), Ltd.,
so long as such appraiser prepares the appraisal or update to such
appraisal for the same assets referenced above on or before
October 31, 2001) of the collateral securing such indebtedness;
(m) indebtedness of the Company and its Subsidiaries pursuant to
Receivables Securitization Programs;
(n) indebtedness of PPAHC to ▇▇▇▇▇▇ in an aggregate principal
amount not to exceed $1,820,000 incurred to finance the construction
by PPAHC of an apartment building in Camp County, Texas, and any
indebtedness incurred to refinance such indebtedness;
(o) indebtedness of the Company under its guaranty of payment to
▇▇▇▇▇▇, and any refinancing lender or lenders, of PPAHC's indebtedness
described in subsection (n) above and its environmental indemnity
given to ▇▇▇▇▇▇, and any refinancing lender or lenders, in connection
with PPAHC's indebtedness described in subsection (n) above;
(p) indebtedness of the Company relating to the Bonds, the Bond
L/C and any Alternate Credit Facility;
(q) unsecured indebtedness of the Company evidenced by its senior
notes due no earlier than August 1, 2009 in an original aggregate
principal amount not to exceed $150,000,000 (the "ORIGINAL SENIOR
NOTES"), PROVIDED that concurrently with the issuance of the Original
Senior Notes the Company shall deposit, or cause to be deposited, with
the trustee for the Company's 10-7/8% Senior Subordinated Notes Due
2003 (the "SENIOR SUBORDINATED NOTES") proceeds of the Original Senior
Notes in an amount sufficient to repay the Senior Subordinated Notes
in full;
(r) additional unsecured indebtedness of the Company in an
original aggregate principal amount not to exceed $75,000,000
evidenced by additional senior notes of the Company having identical
terms as the Original Senior Notes, PROVIDED that after giving effect
to the incurrence of such indebtedness the Company shall be in
compliance on a PRO FORMA basis with the financial requirements of
Sections 7.8, 7.9, 7.10, 7.11, 7.12 and 7.13 of this Agreement;
(s) unsecured indebtedness of any Subsidiary to any other
Subsidiary and unsecured indebtedness of the Company to any
Subsidiary, PROVIDED that any such indebtedness of the Company is
expressly subordinated to the prior payment in full in cash of all of
the Company's indebtedness, obligations and liabilities to the Agent
and the Banks under this Agreement and the other Loan Documents;
(t) guarantee by any Subsidiary of the indebtedness of the
Company permitted under subsections (q) and (r) of this Section 7.17;
PROVIDED that such Subsidiary guarantees all of the Company's
indebtedness, obligations and liabilities to the Agent and the Banks
under this Agreement and the other Loan Documents; and
(u) senior secured indebtedness of the Company under credit
facilities agented by CoBank, ACB or other lenders in an aggregate
principal amount not to exceed the greater of (i) $200,000,000, or
(ii) 75% of the appraised value (as shown in an appraisal performed by
an appraiser satisfactory to the Agent; PROVIDED that the Agent shall
be deemed to have approved any appraiser that has prepared an
appraisal on or before the date hereof for any assets pledged to
CoBank, ACB, as agent, on or before December 31, 1999 pursuant to the
terms of that certain Credit Agreement among the Company, CoBank, ACB,
and certain lenders a party thereto, so long as such appraiser
prepares the appraisal or update to such appraisal for the same assets
referenced above on or before October 31, 2001) of the assets of the
Company and its Subsidiaries incurred to finance the expansion of the
Company's production and processing facilities, fixture acquisitions,
repayment of existing indebtedness and for general corporate purposes.
SECTION 7.18. INVESTMENTS, LOANS AND ADVANCES. The Company will not, and
will not permit any Subsidiary to, make or retain any investment (whether
through the purchase of stock, obligations or otherwise) in or make any
loan or advance to, any other Person, other than:
(a) investments in certificates of deposit having a maturity of
one year or less issued by any United States commercial bank having
capital and surplus of not less than $50,000,000;
(b) investments in an aggregate amount of up to $8,000,000 in
deposits maintained with the Pilgrim Bank of Pittsburg;
(c) investments in commercial paper rated P1 by ▇▇▇▇▇'▇ Investors
Service, Inc. or A1 by Standard & Poor's Ratings Group maturing within
180 days of the date of issuance thereof;
(d) marketable obligations of the United States;
(e) marketable obligations guaranteed by or insured by the United
States, or those for which the full faith and credit of the United
States is pledged for the repayment of principal and interest thereof;
provided that such obligations have a final maturity of no more than
one year from the date acquired by the Company;
(f) repurchase, reverse repurchase agreements and security
lending agreements collateralized by securities of the type described
in subsection (c) and having a term of no more than 90 days, PROVIDED,
HOWEVER, that the Company shall hold (individually or through an
agent) all securities relating thereto during the entire term of such
arrangement;
(g) loans, investments (excluding retained earnings) and advances
by the Company to its Subsidiaries located in Mexico in an aggregate
outstanding amount not to exceed $145,000,000 at any time, PROVIDED,
HOWEVER, that the Company may make loans, investments (excluding
retained earnings) and advances to its Subsidiaries located in Mexico
in an aggregate amount equal to the aggregate amount of any capital
withdrawn from its Mexican Subsidiaries after the date hereof but not
to exceed an aggregate amount of $25,000,000 in any Fiscal Year of the
Company, PROVIDED FURTHER that any such investments (excluding
retained earnings), loans and advances shall not cause the aggregate
outstanding amount of all such loans, investments (excluding retained
earnings) and advances to exceed $145,000,000 at any time;
(h) loans and advances to employees and contract growers (other
than executive officers and directors of the Company) for reasonable
expenses incurred in the ordinary course of business;
(i) loans and advances from any Subsidiary to any another
Subsidiary or to the Company;
(j) investments in an aggregate amount not to exceed $1,000,000
in Southern Hens, Inc.;
(k) investments in and loans and advances to each of PPC Delaware
Business Trust, Pilgrim's Pride International, Inc. and PPC Marketing,
Ltd. in an aggregate amount not to exceed $1,000,000 for each such
entity;
(l) an initial capital contribution to Funding Corp. in an amount
of up to $1,000 and investments, if any, arising from the sale of
Receivables at a discount pursuant to Receivables Securitization
Programs;
(m) loans and advances to officers and employees of the Company
and its Subsidiaries made in connection with such officer's and
employee's for housing related expenses or loans associated with the
procurement or sale of personal residences or necessary for the moving
of key personnel, in an aggregate outstanding amount not to exceed
$3,000,000 at any time;
(n) investments in Subsidiaries to the extent permitted by
Section 7.29 hereof;
(o) investments permitted by Section 7.6;
(p) investments made prior to the date hereof in Persons, which
are not Subsidiaries, identified on Exhibit K hereto;
(q) investments existing on the date of this Agreement in
Subsidiaries listed on Exhibit H; and
(r) investments not covered by subsections (a) through (q) above,
in an amount not to exceed at any time an aggregate of $25,000,000.
SECTION 7.19. SALE OF PROPERTY. The Company will not, and will not permit
any Subsidiary to, sell, lease, assign, transfer or otherwise dispose of
(whether in one transaction or in a series of transactions) all or a
material part of its Property to any other Person in any Fiscal Year of the
Company; PROVIDED, HOWEVER, that this Section shall not prohibit:
(a) sales of Inventory by the Company in the ordinary course of
business;
(b) sales or leases by the Company of its surplus, obsolete or
worn-out machinery and equipment;
(c) the sale by the Company of all or substantially all of its
Receivables pursuant to Receivables Securitization Programs; and
(d) transfers of assets from any Subsidiary to any other
Subsidiary or to the Company.
For purposes of this Section 7.19, "MATERIAL PART" shall mean 5% or more of
the lesser of the book or fair market value of the Property of the Company.
SECTION 7.20. NOTICE OF SUIT, ADVERSE CHANGE IN BUSINESS OR DEFAULT. The
Company shall, as soon as possible, and in any event within fifteen (15)
days after the Company learns of the following, give written notice to the
Banks of (a) any proceeding(s) that, if determined adversely to the Company
or any Subsidiary could reasonably be expected to have a material adverse
effect on the Properties, business or operations of the Company and its
Subsidiaries, taken as a whole, being instituted or threatened to be
instituted by or against the Company or such Subsidiary in any federal,
state, local or foreign court or before any commission or other regulatory
body (federal, state, local or foreign); (b) any material adverse change in
the business, Property or condition, financial or otherwise, of the Company
and its Subsidiaries, taken as a whole; and (c) the occurrence of a
Potential Default or Event of Default.
SECTION 7.21. ERISA. The Company will, and will cause each Subsidiary to,
promptly pay and discharge all obligations and liabilities arising under
ERISA of a character which if unpaid or unperformed might result in the
imposition of a lien against any of its Property and will promptly notify
the Agent of (a) the occurrence of any reportable event (as defined in
ERISA) which could reasonably be expected to result in the termination by
the PBGC of any Plan covering any officers or employees of the Company or
any Subsidiary any benefits of which are, or are required to be, guaranteed
by PBGC, (b) receipt of any notice from PBGC of its intention to seek
termination of any Plan or appointment of a trustee therefor, and (c) its
intention to terminate or withdraw from any Plan. The Company will not,
and will not permit any Subsidiary to, terminate any Plan or withdraw
therefrom unless it shall be in compliance with all of the terms and
conditions of this Agreement after giving effect to any liability to PBGC
resulting from such termination or withdrawal.
SECTION 7.22. USE OF LOAN PROCEEDS. The Company will use the proceeds of
all Loans and L/Cs made or issued hereunder solely to refinance existing
Debt and for general corporate purposes.
SECTION 7.23. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Company will, and will cause each Subsidiary to, continue to engage in
business of the same general type as now conducted by it and, in the case
of PPAHC, to engage in no business other than the construction, acquisition
and renting, as landlord, an apartment building in Camp County, Texas, and
the Company will, and will cause each Subsidiary to, preserve, renew and
keep in full force and effect the Company's corporate existence and the
Company's and each Subsidiary's rights, privileges and franchises necessary
or desirable in the normal conduct of business; except where the failure to
preserve, renew and keep in full force and effect such rights, privileges
and licenses could not reasonably be expected to have a material adverse
effect on the business, operations, Property or condition (financial or
otherwise) of the Company and its Subsidiaries, taken as a whole.
SECTION 7.24. ADDITIONAL INFORMATION. Upon request of the Agent, the
Company shall provide any reasonable additional information pertaining to
any of the Collateral.
SECTION 7.25. SUPPLEMENTAL PERFORMANCE. The Company will at its own
expense, register, file, record and execute all such further agreements and
documents, including without limitation financing statements, and perform
such acts as are necessary and appropriate, or as the Agent or any Bank may
reasonably request, to effect the purposes of the Loan Documents.
SECTION 7.26. Intentionally Omitted.
SECTION 7.27. COMPLIANCE WITH LAWS, ETC. The Company will, and will cause
each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include
(without limitation) (a) in the case of the Company, the maintenance and
preservation of its corporate existence, (b) qualification as a foreign
corporation wherein the nature of its activities requires such
qualification except where the failure to be so qualified would not have a
material adverse effect on the business, operations, Property or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole, (c) the registration pursuant to the Food Security Act of 1985, as
amended, with the Secretary of State of each State in which are produced
any farm products purchased by the Company and which has established a
central filing system, as a buyer of farm products produced in such state,
and the maintenance of each such registration, (d) compliance with the
Packers and Stockyard Act of 1921, as amended, (e) compliance with all
applicable rules and regulations promulgated by the United States
Department of Agriculture and all similar applicable state rules and
regulations, and (f) compliance with all rules and regulations promulgated
pursuant to the Occupational Safety and Health Act of 1970, as amended;
PROVIDED that the failure of the Company to comply with this Section 7.27
in any instance not directly involving the Agent and the Banks or adversely
affecting the Agent's security interest in the Collateral shall not
constitute an Event of Default unless such failure would have a material
adverse effect on the business, operations, Property or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a
whole.
SECTION 7.28. ENVIRONMENTAL COVENANT. The Company will, and will cause
each of its Subsidiaries to:
(a) use and operate all of its facilities and Properties in
material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and
remain in material compliance therewith, and handle all hazardous
materials in material compliance with all applicable
Environmental Laws;
(b) immediately notify the Agent and provide copies upon
receipt of all material written claims, complaints, notices or
inquiries relating to the condition of its facilities and
Property or compliance with Environmental Laws, and shall
promptly cure and have dismissed, to the reasonable satisfaction
of the Required Banks, any actions and proceedings relating to
compliance with Environmental Laws unless and to the extent that
the same are being contested in good faith and by appropriate
proceedings diligently conducted and for which adequate reserves
in form and amount reasonably satisfactory to the Required Banks
have been established, provided that no proceedings to foreclose
any lien which is attached as security therefor shall have been
commenced unless such foreclosure is stayed by the filing of an
appropriate bond in a manner satisfactory to the Required Banks;
and
(c) provide such information and certifications which the
Agent may reasonably request from time to time to evidence
compliance with this Section 7.28.
SECTION 7.29. NEW SUBSIDIARIES. The Company will not, directly or
indirectly, create or acquire in any Fiscal Year any Subsidiary unless
(a) after giving effect to any such creation or acquisition, the total
assets (determined in accordance with generally accepted accounting
principles, consistently applied) of all such Subsidiaries would not exceed
5% of the Total Assets of the Company and its Subsidiaries, and (b) all
Inventory of such Subsidiaries are pledged to the Agent for the benefit of
the Banks pursuant to a security agreement substantially identical to the
Security Agreement.
SECTION 7.30. GUARANTY FEES. The Company will not, and it will not permit
any Subsidiary to, directly or indirectly, pay to the Guarantor or any
other guarantor of any of the Company's indebtedness, obligations and
liabilities, any fee or other compensation, but excluding salary, bonus and
other compensation for services rendered as an employee (collectively the
"GUARANTY FEES") in an aggregate amount in excess of $3,600,000 in any
Fiscal Year of the Company. For purposes of this Section 7.30, any
Guaranty Fees paid within 45 days after the last day of any Fiscal Year
shall be deemed to have been paid during such Fiscal Year.
SECTION 7.31. KEY MAN LIFE INSURANCE. The Company shall continuously
maintain a policy of insurance on the life of ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ in the
amount of $1,500,000.00, of which the Company shall be the beneficiary,
such policy to be maintained with a good and responsible insurance company
acceptable to the Required Banks.
SECTION 7.32. SALE AND LEASEBACKS. The Company will not, and will not
permit any Subsidiary to, enter into any arrangement with any lender or
investor providing for the leasing by the Company or any Subsidiary of any
real or personal property previously owned by the Company or any
Subsidiary, except:
(a) any such sale and leaseback transaction, PROVIDED that (i)
such transactions may be entered into only in the year, or in the year
immediately preceding the year, in which net operating losses, credits
or other tax benefits would otherwise expire unutilized and the
Company delivers on officer's certificate to the Agent to the effect
that such expiration of such net operating losses, credits or other
tax benefits would occur but for entering into the sale/leaseback
transaction; (ii) the Company shall be completely discharged with
respect to any Debt of the Company or such Subsidiary assumed by the
purchaser/lessor in such sale/leaseback transaction; (iii) the Company
shall deliver to the Agent an opinion of counsel that the sale of
assets and related lease will be treated as a sale and lease,
respectively, for federal income tax purposes; and (iv) the proceeds
of such transactions are applied to the payment of Debt; and
(b) such transactions in which the aggregate consideration
received by the Company upon the sale of such property does not exceed
$6,000,000 in any Fiscal Year.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
SECTION 8.1. DEFINITIONS. Any one or more of the following shall
constitute an Event of Default:
(a) Default in the payment when due of any interest on or
principal of any Note, Bond Reimbursement Obligation or
Reimbursement Obligation, whether at the stated maturity thereof
or as required by Section 3.4 hereof or at any other time
provided in this Agreement, or of any fee or other amount payable
by the Company pursuant to this Agreement;
(b) Default in the observance or performance of any covenant
set forth in Sections 7.4, 7.5, 7.6, 7.15, 7.17, 7.19 and 7.20,
inclusive, hereof, or of any provision of any Security Document
requiring the maintenance of insurance on the Collateral subject
thereto or dealing with the use or remittance of proceeds of such
Collateral;
(c) Default in the observance or performance of any covenant
set forth in Sections 7.7, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13,
7.14, 7.16, 7.18, 7.21, 7.23 and 7.31, inclusive, hereof and such
default shall continue for 15 days after written notice thereof
to the Company by any Bank;
(d) Default in the observance or performance of any other
covenant, condition, agreement or provision hereof or any of the
other Loan Documents and such default shall continue for 30 days
after written notice thereof to the Company by any Bank;
(e) Default shall occur under any evidence of indebtedness
in a principal amount exceeding $10,000,000 issued or assumed or
guaranteed by the Company, or under any mortgage, agreement or
other similar instrument under which the same may be issued or
secured and such default shall continue for a period of time
sufficient to permit the acceleration of maturity of any
indebtedness evidenced thereby or outstanding or secured
thereunder;
(f) Any representation or warranty made by the Company
herein or in any Loan Document or in any statement or certificate
furnished by it pursuant hereto or thereto, proves untrue in any
material respect as of the date made or deemed made pursuant to
the terms hereof;
(g) Any judgment or judgments, writ or writs, or warrant or
warrants of attachment, or any similar process or processes in an
aggregate amount in excess of $10,000,000 shall be entered or
filed against the Company or any Subsidiary or against any of
their respective Property or assets and remain unbonded, unstayed
and undischarged for a period of 30 days from the date of its
entry;
(h) Any reportable event (as defined in ERISA) which
constitutes grounds for the termination of any Plan or for the
appointment by the appropriate United States District Court of a
trustee to administer or liquidate any such Plan, shall have
occurred and such reportable event shall be continuing thirty
(30) days after written notice to such effect shall have been
given to the Company by any Bank; or any such Plan shall be
terminated; or a trustee shall be appointed by the appropriate
United States District Court to administer any such Plan; or the
Pension Benefit Guaranty Corporation shall institute proceedings
to administer or terminate any such Plan;
(i) The Company or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the Bankruptcy
Code of 1978, as amended, (ii) admit in writing its inability to
pay, or not pay, its debts generally as they become due or
suspend payment of its obligations, (iii) make an assignment for
the benefit of creditors, (iv) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
conservator, liquidator or similar official for it or any
substantial part of its property, (v) file a petition seeking
relief or institute any proceeding seeking to have entered
against it an order for relief under the Bankruptcy Code of 1978,
as amended, to adjudicate it insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, marshalling
of assets, adjustment or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed
against it, or (vi) fail to contest in good faith any appointment
or proceeding described in Section 8.1(j) hereof;
(j) A custodian, receiver, trustee, conservator, liquidator
or similar official shall be appointed for the Company, any
Subsidiary or any substantial part of its respective Property, or
a proceeding described in Section 8.1(i)(v) shall be instituted
against the Company or any Subsidiary and such appointment
continues undischarged or any such proceeding continues
undismissed or unstayed for a period of 90 days;
(k) The existence of an "EVENT OF DEFAULT" as defined in the
Security Agreement;
(l) Any shares of the capital stock of the Company owned
legally or beneficially by the Guarantor or Mr. and/or ▇▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ shall be pledged, assigned or otherwise
encumbered for any reason, other than the pledge of up to
2,000,000 shares to secure personal obligations of Mr. and ▇▇▇.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ or such other personal obligations incurred by
any Person so long as such obligations are not related to the
financing of the Company of any of its Subsidiaries;
(m) the Guarantor shall terminate, breach, repudiate or
disavow the Partnership Guaranty or any part thereof, or any
event specified in Sections 8.1(i) or (j) shall occur with regard
to the Guarantor;
(n) The occurrence of a Change in Control; or
(o) The existence of any condition or the occurrence of any
event specified as an "Event of Default" under the Reimbursement
Agreement.
SECTION 8.2. REMEDIES FOR NON-BANKRUPTCY DEFAULTS. When any Event of
Default, other than an Event of Default described in subsections (i) and
(j) of Section 8.1 hereof, has occurred and is continuing, the Agent, if
directed by the Required Banks, shall give notice to the Company and take
any or all of the following actions: (i) terminate the remaining Revolving
Credit Commitments and the Bond L/C Commitment, if any, hereunder on the
date (which may be the date thereof) stated in such notice, (ii) declare
the principal of and the accrued interest on the Notes, unpaid Bond
Reimbursement Obligations and unpaid Reimbursement Obligations to be
forthwith due and payable and thereupon the Notes, unpaid Bond
Reimbursement Obligations and unpaid Reimbursement Obligations including
both principal and interest, shall be and become immediately due and
payable without further demand, presentment, protest or notice of any kind,
and (iii) proceed to foreclose against any Collateral under any of the
Security Documents, take any action or exercise any remedy under any of the
Loan Documents or exercise any other action, right, power or remedy
permitted by law. Any Bank may exercise the right of set off with regard
to any deposit accounts or other accounts maintained by the Company with
any of the Banks.
SECTION 8.3. REMEDIES FOR BANKRUPTCY DEFAULTS. When any Event of Default
described in subsections (i) or (j) of Section 8.1 hereof has occurred and
is continuing, then the Notes, unpaid Bond Reimbursement Obligations and
all Reimbursement Obligations shall immediately become due and payable
without presentment, demand, protest or notice of any kind, and the
obligation of the Banks to extend further credit pursuant to any of the
terms hereof shall immediately terminate.
SECTION 8.4. L/Cs. Promptly following the acceleration of the maturity of
the Notes pursuant to Section 8.2 or 8.3 hereof, the Company shall
immediately pay to the Agent for the benefit of the Banks the full
aggregate amount of all outstanding L/Cs and the Bond L/C. The Agent shall
hold all such funds and proceeds thereof as additional collateral security
for the obligations of the Company to the Banks under the Loan Documents.
The amount paid under any of the L/Cs or the Bond L/C for which the Company
has not reimbursed the Banks shall bear interest from the date of such
payment at the default rate of interest specified in Section 1.3(d) hereof.
SECTION 8.5. REMEDIES UNDER THE BOND DOCUMENTS. In addition to the
foregoing, ▇▇▇▇▇▇ shall have all of the remedies provided to ▇▇▇▇▇▇ in the
Bond Documents upon the occurrence of an Event of Default.
SECTION 9. CHANGE IN CIRCUMSTANCES REGARDING FIXED RATE LOANS.
SECTION 9.1. CHANGE OF LAW. Notwithstanding any other provisions of this
Agreement or any Note to the contrary, if at any time after the date hereof
with respect to Fixed Rate Loans, any Bank shall determine in good faith
that any change in applicable law or regulation or in the interpretation
thereof makes it unlawful for such Bank to make or continue to maintain any
Fixed Rate Loan or to give effect to its obligations as contemplated
hereby, such Bank shall promptly give notice thereof to the Company to such
effect, and such Bank's obligation to make, relend, continue or convert any
such affected Fixed Rate Loans under this Agreement shall terminate until
it is no longer unlawful for such Bank to make or maintain such affected
Loan. The Company shall prepay the outstanding principal amount of any
such affected Fixed Rate Loan made to it, together with all interest
accrued thereon and all other amounts due and payable to the Banks under
Section 9.4 of this Agreement, on the earlier of the last day of the
Interest Period applicable thereto and the first day on which it is illegal
for such Bank to have such Loans outstanding; provided, however, the
Company may then elect to borrow the principal amount of such affected Loan
by means of another type of Loan available hereunder, subject to all of the
terms and conditions of this Agreement.
SECTION 9.2. UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN THE
ADJUSTED EURODOLLAR RATE OR ADJUSTED CD RATE. Notwithstanding any other
provision of this Agreement or any Note to the contrary, if prior to the
commencement of any Interest Period any Bank shall determine (i) that
deposits in the amount of any Fixed Rate Loan scheduled to be outstanding
are not available to it in the relevant market or (ii) by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Adjusted Eurodollar Rate or the Adjusted
CD Rate, then such Bank shall promptly give telephonic or telex notice
thereof to the Company, the Agent and the other Banks (such notice to be
confirmed in writing), and the obligation of the Banks to make, continue or
convert any such Fixed Rate Loan in such amount and for such Interest
Period shall terminate until deposits in such amount and for the Interest
Period selected by the Company shall again be readily available in the
relevant market and adequate and reasonable means exist for ascertaining
the Adjusted Eurodollar Rate or the Adjusted CD Rate, as the case may be.
Upon the giving of such notice, the Company may elect to either (i) pay or
prepay, as the case may be, such affected Loan or (ii) reborrow such
affected Loan as another type of Loan available hereunder, subject to all
terms and conditions of this Agreement.
SECTION 9.3. TAXES AND INCREASED COSTS. With respect to the Fixed Rate
Loans, if any Bank shall determine in good faith that any change in any
applicable law, treaty, regulation or guideline (including, without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) or any new law, treaty, regulation or guideline, or any
interpretation of any of the foregoing by any governmental authority
charged with the administration thereof or any central bank or other
fiscal, monetary or other authority having jurisdiction over such Bank or
its lending branch or the Fixed Rate Loans contemplated by this Agreement
(whether or not having the force of law) ("CHANGE IN LAW") shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirements against assets held by, or
deposits in or for the account of, or Loans by, or any other
acquisition of funds or disbursements by, such Bank (other than
reserves included in the determination of the Adjusted Eurodollar
Rate or the Adjusted CD Rate);
(ii) subject such Bank, any Fixed Rate Loan or any Note to
any tax (including, without limitation, any United States
interest equalization tax or similar tax however named applicable
to the acquisition or holding of debt obligations and any
interest or penalties with respect thereto), duty, charge, stamp
tax, fee, deduction or withholding in respect of this Agreement,
any Fixed Rate Loan or any Note except such taxes as may be
measured by the overall net income of such Bank or its lending
branch and imposed by the jurisdiction, or any political
subdivision or taxing authority thereof, in which such Bank's
principal executive office or its lending branch is located;
(iii) change the basis of taxation of payments of principal
and interest due from the Company to such Bank hereunder or under
any Note (other than by a change in taxation of the overall net
income of such Bank); or
(iv) impose on such Bank any penalty with respect to the
foregoing or any other condition regarding this Agreement, any
Fixed Rate Loan or any Note;
and such Bank shall determine that the result of any of the foregoing is to
increase the cost (whether by incurring a cost or adding to a cost) to such
Bank of making or maintaining any Fixed Rate Loan hereunder or to reduce
the amount of principal or interest received by such Bank, then the Company
shall pay to such Bank from time to time as specified by such Bank such
additional amounts as such Bank shall reasonably determine are sufficient
to compensate and indemnify it for such increased cost or reduced amount.
If any Bank makes such a claim for compensation, it shall provide to the
Company a certificate setting forth such increased cost or reduced amount
as a result of any event mentioned herein specifying such Change in Law,
and such certificate shall be conclusive and binding on the Company as to
the amount thereof except in the case of manifest error. Upon the
imposition of any such cost, the Company may prepay any affected Loan,
subject to the provisions of Sections 3.3 and 9.4 hereof.
SECTION 9.4. FUNDING INDEMNITY. (a) In the event any Bank shall incur any
loss, cost, expense or premium (including, without limitation, any loss of
profit and any loss, cost, expense or premium incurred by reason of the
liquidation or re-employment of deposits or other funds acquired by such
Bank to fund or maintain any Fixed Rate Loan or the relending or
reinvesting of such deposits or amounts paid or prepaid to such Bank) as a
result of:
(i) any payment or prepayment of a Fixed Rate Loan on a date
other than the last day of the then applicable Interest Period;
(ii) any failure by the Company to borrow, continue or
convert any Fixed Rate Loan on the date specified in the notice
given pursuant to Section 1.7 hereof; or
(iii) the occurrence of any Event of Default;
then, upon the demand of such Bank, the Company shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense.
(b) If any Bank makes a claim for compensation under this Section 9.4,
it shall provide to the Company a certificate setting forth the amount of
such loss, cost or expense in reasonable detail and such certificate shall
be conclusive and binding on the Company as to the amount thereof except in
the case of manifest error.
SECTION 9.5. LENDING BRANCH. Each Bank may, at its option, elect to make,
fund or maintain its Eurodollar Loans hereunder at the branch or office
specified opposite its signature on the signature page hereof or such other
of its branches or offices as such Bank may from time to time elect,
subject to the provisions of Section 1.7(b) hereof.
SECTION 9.6. DISCRETION OF BANK AS TO MANNER OF FUNDING. Notwithstanding
any provision of this Agreement to the contrary, each Bank shall be
entitled to fund and maintain its funding of all or any part of its Loans
in any manner it sees fit, it being understood however, that for the
purposes of this Agreement all determinations hereunder shall be made as if
the Banks had actually funded and maintained each Fixed Rate Loan during
each Interest Period for such Loan through the purchase of deposits in the
relevant interbank market having a maturity corresponding to such Interest
Period and bearing an interest rate equal to the Adjusted Eurodollar Rate
or Adjusted CD Rate, as the case may be, for such Interest Period.
SECTION 10. THE AGENT.
SECTION 10.1. APPOINTMENT AND POWERS. ▇▇▇▇▇▇ Trust and Savings Bank is
hereby appointed by the Banks as Agent under the Loan Documents, including
but not limited to the Security Agreement, wherein the Agent shall hold a
security interest for the benefit of the Banks, solely as the Agent of the
Banks, and each of the Banks irrevocably authorizes the Agent to act as the
Agent of such Bank. The Agent agrees to act as such upon the express
conditions contained in this Agreement.
SECTION 10.2. POWERS. The Agent shall have and may exercise such powers
hereunder as are specifically delegated to the Agent by the terms of the
Loan Documents, together with such powers as are incidental thereto. The
Agent shall have no implied duties to the Banks, nor any obligation to the
Banks to take any action under the Loan Documents except any action
specifically provided by the Loan Documents to be taken by the Agent.
SECTION 10.3. GENERAL IMMUNITY. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Banks or
any Bank for any action taken or omitted to be taken by it or them under
the Loan Documents or in connection therewith except for its or their own
gross negligence or willful misconduct.
SECTION 10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. The Agent shall
not (i) be responsible to the Banks for any recitals, reports, statements,
warranties or representations contained in the Loan Documents or furnished
pursuant thereto, (ii) be responsible for the payment or collection of or
security for any Loans, Bond Reimbursement Obligations or Reimbursement
Obligations hereunder except with money actually received by the Agent for
such payment, (iii) be bound to ascertain or inquire as to the performance
or observance of any of the terms of the Loan Documents, or (iv) be
obligated to determine or verify the existence, eligibility or value of any
Collateral, or the correctness of any Borrowing Base Certificate or
compliance certificate. In addition, neither the Agent nor its counsel
shall be responsible to the Banks for the enforceability or validity of any
of the Loan Documents or for the existence, creation, attachment,
perfection or priority of any security interest in the Collateral.
SECTION 10.5. RIGHT TO INDEMNITY. The Banks hereby indemnify the Agent for
any actions taken in accordance with this Section 10, and the Agent shall
be fully justified in failing or refusing to take any action hereunder,
unless it shall first be indemnified to its satisfaction by the Banks pro
rata against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action, other than any
liability which may arise out of Agent's gross negligence or willful
misconduct.
SECTION 10.6. ACTION UPON INSTRUCTIONS OF BANKS. The Agent agrees, upon
the written request of the Required Banks, to take any action of the type
specified in the Loan Documents as being within the Agent's rights, duties,
powers or discretion. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with written
instructions signed by the Required Banks, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of
the Banks and on all holders of the Notes. In the absence of a request by
the Required Banks, the Agent shall have authority, in its sole discretion,
to take or not to take any action, unless the Loan Documents specifically
require the consent of the Required Banks or all of the Banks.
SECTION 10.7. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any
of its duties as Agent hereunder by or through agents (other than
employees) and attorneys-in-fact and shall not be answerable to the Banks,
except as to money or securities received by it or its authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact
selected by it in good faith and with reasonable care. The Agent shall be
entitled to advice and opinion of legal counsel concerning all matters
pertaining to the duties of the agency hereby created.
SECTION 10.8. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled
to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons,
and, in respect to legal matters, upon the opinion of legal counsel
selected by the Agent.
SECTION 10.9. MAY TREAT PAYEE AS OWNER. The Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have
been filed with the Agent. Any request, authority or consent of any
person, firm or corporation who at the time of making such request or
giving such authority or consent is the holder of any such Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of
such Note or of any Note issued in exchange therefor.
SECTION 10.10. AGENT'S REIMBURSEMENT. Each Bank agrees to reimburse the
Agent pro rata in accordance with its Commitment Percentage for any
reasonable out-of-pocket expenses (including fees and charges for field
audits) not reimbursed by the Company (a) for which the Agent is entitled
to reimbursement by the Company under the Loan Documents and (b) for any
other reasonable out-of-pocket expenses incurred by the Agent on behalf of
the Banks, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents and for which the
Agent is entitled to reimbursement by the Company and has not been
reimbursed.
SECTION 10.11. RIGHTS AS A LENDER. With respect to its commitment, Loans
made by it, L/Cs issued by it and the Notes issued to it, ▇▇▇▇▇▇ shall have
the same rights and powers hereunder as any Bank and may exercise the same
as though it were not the Agent, and the term "BANK" or "BANKS" shall,
unless the context otherwise indicates, include ▇▇▇▇▇▇ in its individual
capacity. ▇▇▇▇▇▇ and each of the Banks may accept deposits from, lend
money to, and generally engage in any kind of banking or trust business
with the Company as if it were not the Agent or a Bank hereunder, as the
case may be.
SECTION 10.12. BANK CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and
based on the financial statements referred to in Section 5.3 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into the Loan Documents. Each Bank also
acknowledges that it will, independently and without reliance upon the
Agent or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents.
SECTION 10.13. RESIGNATION OF AGENT. Subject to the appointment of a
successor Agent, the Agent may resign as Agent for the Banks under this
Agreement and the other Loan Documents at any time by sixty days' notice in
writing to the Banks. Such resignation shall take effect upon appointment
of such successor. The Required Banks shall have the right to appoint a
successor Agent who shall be entitled to all of the rights of, and vested
with the same powers as, the original Agent under the Loan Documents. In
the event a successor Agent shall not have been appointed within the sixty
day period following the giving of notice by the Agent, the Agent may
appoint its own successor. Resignation by the Agent shall not affect or
impair the rights of the Agent under Sections 10.5 and 10.10 hereof with
respect to all matters preceding such resignation. Any successor Agent
must be a Bank, a national banking association, a bank chartered in any
state of the United States or a branch of any foreign bank which is
licensed to do business under the laws of any state or the United States.
SECTION 10.14. DURATION OF AGENCY. The agency established by Section 10.1
hereof shall continue, and Sections 10.1 through and including Section
10.14 shall remain in full force and effect, until the Notes and all other
amounts due hereunder and thereunder, including without limitation all Bond
Reimbursement Obligations or Reimbursement Obligations, shall have been
paid in full and the Banks' commitments to extend credit to or for the
benefit of the Company shall have terminated or expired.
SECTION 11. MISCELLANEOUS.
SECTION 11.1. AMENDMENTS AND WAIVERS. Any term, covenant, agreement or
condition of this Agreement may be amended only by a written amendment
executed by the Company, the Required Banks and, if the rights or duties of
the Agent are affected thereby, the Agent, or compliance therewith only may
be waived (either generally or in a particular instance and either
retroactively or prospectively), if the Company shall have obtained the
consent in writing of the Required Banks and, if the rights or duties of
the Agent are affected thereby, the Agent, provided, however, that without
the consent in writing of the holders of all outstanding Notes, unpaid Bond
Reimbursement Obligations and unpaid Reimbursement Obligations and the
issuer of any L/C or Bond L/C, or all Banks if no Notes or L/Cs or Bond
L/Cs are outstanding, no such amendment or waiver shall (i) change the
amount or postpone the date of payment of any scheduled payment or
required prepayment of principal of the Notes or reduce the rate or extend
the time of payment of interest on the Notes, or reduce the amount of
principal thereof, or modify any of the provisions of the Notes with
respect to the payment or prepayment thereof, (ii) give to any Note any
preference over any other Notes, (iii) amend the definition of Required
Banks, (iv) alter, modify or amend the provisions of this Section 11.1,
(v) change the amount or term of any of the Banks' Revolving Credit
Commitments or the fees required under Section 3.1 hereof, (vi) alter,
modify or amend the provisions of Sections 1.9, 6 or 9 of this Agreement,
(vii) alter, modify or amend any Bank's right hereunder to consent to any
action, make any request or give any notice, (viii) change the advance
rates under the Borrowing Base or the definitions of "ELIGIBLE INVENTORY,"
(ix) release any Collateral under the Security Documents or release or
discharge any guarantor of the Company's indebtedness, obligations and
liabilities to the Banks, in each case, unless such release or discharge is
permitted or contemplated by the Loan Documents, or (x) alter, amend or
modify any subordination provisions of any Subordinated Debt. Any such
amendment or waiver shall apply equally to all Banks and the holders of the
Notes, Bond Reimbursement Obligations and Reimbursement Obligations and
shall be binding upon them, upon each future holder of any Note, Bond
Reimbursement Obligation and Reimbursement Obligation and upon the Company,
whether or not such Note shall have been marked to indicate such amendment
or waiver. No such amendment or waiver shall extend to or affect any
obligation not expressly amended or waived; and PROVIDED FURTHER, that (x)
any amendments of the Reimbursement Agreement or the Bond Documents by
▇▇▇▇▇▇ shall be subject to the provisions of Section 1.19 of this
Agreement, and (y) Sections 1.10 through 1.19, both inclusive, of this
Agreement may only be amended, modified or waived with the consent of
▇▇▇▇▇▇.
SECTION 11.2. WAIVER OF RIGHTS. No delay or failure on the part of the
Agent or any Bank or on the part of the holder or holders of any Note, Bond
Reimbursement Obligation or Reimbursement Obligation in the exercise of any
power or right shall operate as a waiver thereof, nor as an acquiescence in
any Potential Default or Event of Default, nor shall any single or partial
exercise of any power or right preclude any other or further exercise
thereof, or the exercise of any other power or right, and the rights and
remedies hereunder of the Agent, the Banks and of the holder or holders of
any Notes are cumulative to, and not exclusive of, any rights or remedies
which any of them would otherwise have.
SECTION 11.3. SEVERAL OBLIGATIONS. The commitments of each of the Banks
hereunder shall be the several obligations of each Bank and the failure on
the part of any one or more of the Banks to perform hereunder shall not
affect the obligation of the other Banks hereunder, provided that nothing
herein contained shall relieve any Bank from any liability for its failure
to so perform. In the event that any one or more of the Banks shall fail
to perform its commitment hereunder, all payments thereafter received by
the Agent on the principal of Loans, Bond Reimbursement Obligations and
Reimbursement Obligations hereunder, whether from any Collateral or
otherwise, shall be distributed by the Agent to the Banks making such
additional Loans ratably as among them in accordance with the principal
amount of additional Loans made by them until such additional Loans shall
have been fully paid and satisfied. All payments on account of interest
shall be applied as among all the Banks ratably in accordance with the
amount of interest owing to each of the Banks as of the date of the receipt
of such interest payment.
SECTION 11.4. NON-BUSINESS DAY. (a) If any payment of principal or
interest on any Domestic Rate Loan shall fall due on a day which is not a
Business Day, interest at the rate such Loan bears for the period prior to
maturity shall continue to accrue on such principal from the stated due
date thereof to and including the next succeeding Business Day on which the
same is payable.
(b) If any payment of principal or interest on any Eurodollar Loan
shall fall due on a day which is not a Banking Day, the payment date
thereof shall be extended to the next date which is a Banking Day and the
Interest Period for such Loan shall be accordingly extended, unless as a
result thereof any payment date would fall in the next calendar month, in
which case such payment date shall be the next preceding Banking Day.
SECTION 11.5. SURVIVAL OF INDEMNITIES. All indemnities and all provisions
relative to reimbursement to the Banks of amounts sufficient to protect the
yield to the Banks with respect to Eurodollar Loans, including, but not
limited to, Sections 9.3 and 9.4 hereof, shall survive the termination of
this Agreement and the payment of the Notes for a period of one year.
SECTION 11.6. DOCUMENTARY TAXES. Although the Company is of the opinion
that no documentary or similar taxes are payable in respect of this
Agreement or the Notes, the Company agrees that it will pay such taxes,
including interest and penalties, in the event any such taxes are assessed
irrespective of when such assessment is made and whether or not any credit
is then in use or available hereunder.
SECTION 11.7. REPRESENTATIONS. All representations and warranties made
herein or in certificates given pursuant hereto shall survive the execution
and delivery of this Agreement and of the Notes, and shall continue in full
force and effect with respect to the date as of which they were made and as
reaffirmed on the date of each borrowing or request for L/C and as long as
any credit is in use or available hereunder.
SECTION 11.8. NOTICES. Unless otherwise expressly provided herein, all
communications provided for herein shall be in writing or by telex and
shall be deemed to have been given or made when served personally, when an
answer back is received in the case of notice by telex or 2 days after the
date when deposited in the United States mail (registered, if to the
Company) addressed if to the Company to ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇ Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇; if to the Agent or ▇▇▇▇▇▇ at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Agribusiness Division;
and if to any of the Banks, at the address for each Bank set forth under
its signature hereon; or at such other address as shall be designated by
any party hereto in a written notice to each other party pursuant to this
Section 11.8.
SECTION 11.9. COSTS AND EXPENSES; INDEMNITY. The Company agrees to pay on
demand all costs and expenses of the Agent, in connection with the
negotiation, preparation, execution and delivery of this Agreement, the
Notes and the other instruments and documents to be delivered hereunder or
in connection with the transactions contemplated hereby, including the fees
and expenses of Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel to the Agent;
all costs and expenses of the Agent (including attorneys' fees) incurred in
connection with any consents or waivers hereunder or amendments hereto, and
all costs and expenses (including attorneys' fees), if any, incurred by the
Agent, the Banks or any other holders of a Note or any Bond Reimbursement
Obligation or any Reimbursement Obligation in connection with the
enforcement of this Agreement or the Notes and the other instruments and
documents to be delivered hereunder. The Company agrees to indemnify and
save harmless the Banks and the Agent from any and all liabilities, losses,
costs and expenses incurred by the Banks or the Agent in connection with
any action, suit or proceeding brought against the Agent or any Bank by any
Person which arises out of the transactions contemplated or financed hereby
or by the Notes, or out of any action or inaction by the Agent or any Bank
hereunder or thereunder, except for such thereof as is caused by the gross
negligence or willful misconduct of the party indemnified. The provisions
of this Section 11.9 shall survive payment of the Notes, Bond Reimbursement
Obligations and Reimbursement Obligations and the termination of the
Revolving Credit Commitments hereunder.
SECTION 11.10. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and all such counterparts taken together shall be deemed to
constitute one and the same instrument. One or more of the Banks may
execute a separate counterpart of this Agreement which has also been
executed by the Company, and this Agreement shall become effective as and
when all of the Banks have executed this Agreement or a counterpart thereof
and lodged the same with the Agent.
SECTION 11.11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon each of the Company and the Banks and their respective successors and
assigns, and shall inure to the benefit of the Company and each of the
Banks and the benefit of their respective successors and assigns, including
any subsequent holder of any Note, Bond Reimbursement Obligation or
Reimbursement Obligation. The Company may not assign any of its rights or
obligations hereunder without the written consent of the Banks.
SECTION 11.12. NO JOINT VENTURE. Nothing contained in this Agreement shall
be deemed to create a partnership or joint venture among the parties
hereto.
SECTION 11.13. SEVERABILITY. In the event that any term or provision
hereof is determined to be unenforceable or illegal, it shall deemed
severed herefrom to the extent of the illegality and/or unenforceability
and all other provisions hereof shall remain in full force and effect.
SECTION 11.14. TABLE OF CONTENTS AND HEADINGS. The table of contents and
section headings in this Agreement are for reference only and shall not
affect the construction of any provision hereof.
SECTION 11.15. PARTICIPANTS. Each Bank shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made, and/or Revolving Credit
Commitment and participations in L/Cs, Bond L/Cs, Bond Reimbursement
Obligations and Reimbursement Obligations held, by such Bank at any time
and from time to time, and to assign its rights under such Loans,
participations in L/Cs, Bond L/Cs, Bond Reimbursement Obligations and
Reimbursement Obligations or the Notes evidencing such Loans to one or more
other Persons; provided that no such participation shall relieve any Bank
of any of its obligations under this Agreement, and any agreement pursuant
to which such participation or assignment of a Note or the rights
thereunder is granted shall provide that the granting Lender shall retain
the sole right and responsibility to enforce the obligations of the Company
under the Loan Documents, including, without limitation, the right to
approve any amendment, modification or waiver of any provision thereof,
except that such agreement may provide that such Bank will not agree
without the consent of such participant or assignee to any modification,
amendment or waiver of this Agreement that would (A) increase any Revolving
Credit Commitment of such Lender, or (B) reduce the amount of or postpone
the date for payment of any principal of or interest on any Loan, Bond
Reimbursement Obligation or Reimbursement Obligation or of any fee payable
hereunder in which such participant or assignee has an interest or (C)
reduce the interest rate applicable to any Loan or other amount payable in
which such participant or assignee has an interest or (D) release any
collateral security for or guarantor for any of the Company's indebtedness,
obligations and liabilities under the Loan Documents, and provided further
that no such assignee or participant shall have any rights under this
Agreement except as provided in this Section 11.15, and the Agent shall
have no obligation or responsibility to such participant or assignee,
except that nothing herein provided is intended to affect the rights of an
assignee of a Note to enforce the Note assigned. Any party to which such a
participation or assignment has been granted shall have the benefits of
Section 1.10, Section 9.3 and Section 9.4 hereof but shall not be entitled
to receive any greater payment under any such Section than the Bank
granting such participation or assignment would have been entitled to
receive with respect to the rights transferred.
SECTION 11.16. ASSIGNMENT OF COMMITMENTS BY BANK. Each Bank shall have the
right at any time, with the prior consent of the Company and the Agent
(which consent will not be unreasonably withheld), to sell, assign,
transfer or negotiate all or any part of its Revolving Credit Commitment to
one or more commercial banks or other financial institutions; provided that
such assignment is in an amount of at least $5,000,000 (or, if less than
$5,000,000, the amount of its entire Revolving Credit Commitment), provided
further that no Bank may so assign more than one-half of its original
Revolving Credit Commitment hereunder unless it is assigning all of its
interest hereunder, and provided further that any Bank may assign all of
its interest hereunder to any of its subsidiaries or affiliates without the
Company's or the Agent's consent. Upon any such assignment, and its
notification to the Agent, the assignee shall become a Bank hereunder, all
Loans and the Revolving Credit Commitment it thereby holds shall be
governed by all the terms and conditions hereof, and the Bank granting such
assignment shall have its Revolving Credit Commitment and its obligations
and rights in connection therewith, reduced by the amount of such
assignment. Upon each such assignment the Bank granting such assignment
shall pay to the Agent for the Agent's sole account a fee of $2,500.
SECTION 11.17. SHARING OF PAYMENTS. Each Bank agrees with each other Bank
that if such Bank shall receive and retain any payment, whether by set-off
or application of deposit balances or otherwise ("SET-OFF"), on any Loan,
Bond Reimbursement Obligation, Reimbursement Obligation or other amount
outstanding under this Agreement in excess of its ratable share of payments
on all Loans, Bond Reimbursement Obligations, Reimbursement Obligations and
other amounts then outstanding to the Banks, then such Bank shall purchase
for cash at face value, but without recourse, ratably from each of the
other Banks such amount of the Loans, Bond Reimbursement Obligations and
Reimbursement Obligations held by each such other Bank (or interest
therein) as shall be necessary to cause such Bank to share such excess
payment ratably with all the other Banks; PROVIDED, HOWEVER, that if any
such purchase is made by any Bank, and if such excess payment or part
thereof is thereafter recovered from such purchasing Bank, the related
purchases from the other Banks shall be rescinded ratably and the purchase
price restored as to the portion of such excess payment so recovered, but
without interest. Each Bank's ratable share of any such Set-Off shall be
determined by the proportion that the aggregate principal amount of Loans,
Bond Reimbursement Obligations and Reimbursement Obligations then due and
payable to such Bank bears to the total aggregate principal amount of
Loans, Bond Reimbursement Obligations and Reimbursement Obligations then
due and payable to all the Banks.
SECTION 11.18. JURISDICTION; VENUE. THE COMPANY HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS COURT SITTING IN CHICAGO
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 11.19. LAWFUL RATE. All agreements between the Company, the Agent
and each of the Banks, whether now existing or hereafter arising and
whether written or oral, are expressly limited so that in no contingency or
event whatsoever, whether by reason of demand or acceleration of the
maturity of any of the indebtedness hereunder or otherwise, shall the
amount contracted for, charged, received, reserved, paid or agreed to be
paid to the Agent or each Bank for the use, forbearance, or detention of
the funds advanced hereunder or otherwise, or for the performance or
payment of any covenant or obligation contained in any document executed in
connection herewith (all such documents being hereinafter collectively
referred to as the "CREDIT DOCUMENTS"), exceed the highest lawful rate
permissible under applicable law (the "HIGHEST LAWFUL RATE"), it being the
intent of the Company, the Agent and each of the Banks in the execution
hereof and of the Credit Documents to contract in strict accordance with
applicable usury laws. If, as a result of any circumstances whatsoever,
fulfillment by the Company of any provision hereof or of any of such
documents, at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable usury
law or result in the Agent or any Bank having or being deemed to have
contracted for, charged, reserved or received interest (or amounts deemed
to be interest) in excess of the maximum, lawful rate or amount of interest
allowed by applicable law to be so contracted for, charged, reserved or
received by the Agent or such Bank, then, IPSO FACTO, the obligation to be
fulfilled by the Company shall be reduced to the limit of such validity,
and if, from any such circumstance, the Agent or such Bank shall ever
receive interest or anything which might be deemed interest under
applicable law which would exceed the Highest Lawful Rate, such amount
which would be excessive interest shall be refunded to the Company or, to
the extent (i) permitted by applicable law and (ii) such excessive interest
does not exceed the unpaid principal balance of the Notes and the amounts
owing on other obligations of the Company to the Agent or any Bank under
any Loan Document applied to the reduction of the principal amount owing on
account of the Notes or the amounts owing on other obligations of the
Company to the Agent or any Bank under any Loan Document and not to the
payment of interest. All interest paid or agreed to be paid to the Agent
or any Bank shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full period of the
indebtedness hereunder until payment in full of the principal of the
indebtedness hereunder (including the period of any renewal or extension
thereof) so that the interest on account of the indebtedness hereunder for
such full period shall not exceed the highest amount permitted by
applicable law. This paragraph shall control all agreements between the
Company, the Agent and the Banks.
SECTION 11.20. GOVERNING LAW. (a) THIS AGREEMENT AND THE RIGHTS AND DUTIES
OF THE PARTIES HERETO, SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH
THE INTERNAL LAWS OF THE STATE OF ILLINOIS, EXCEPT TO THE EXTENT PROVIDED
IN SECTION 11.20(b) HEREOF AND TO THE EXTENT THAT THE FEDERAL LAWS OF THE
UNITED STATES OF AMERICA MAY OTHERWISE APPLY.
(b) NOTWITHSTANDING ANYTHING IN SECTION 11.20(a) HEREOF TO THE
CONTRARY, NOTHING IN THIS AGREEMENT, THE NOTES, OR THE OTHER LOAN DOCUMENTS
SHALL BE DEEMED TO CONSTITUTE A WAIVER OF ANY RIGHTS WHICH THE COMPANY, THE
AGENT OR ANY OF THE BANKS MAY HAVE UNDER THE NATIONAL BANK ACT OR OTHER
APPLICABLE FEDERAL LAW.
SECTION 11.21. LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY THE
COMPANY, ANY SUBSIDIARY OR ANY GUARANTOR AGAINST ANY BANK OR ITS
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS FOR ANY
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR
DUTY IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY
RELATED TO THE TRANSACTIONS CONTEMPLATED AND RELATIONSHIPS ESTABLISHED BY
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY ACT, OMISSION OR
EVENT OCCURRING IN CONNECTION THEREWITH. THE COMPANY, EACH SUBSIDIARY AND
EACH GUARANTOR HEREBY WAIVE, RELEASE AND AGREE NOT TO ▇▇▇ UPON SUCH CLAIM
FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR
SUSPECTED TO EXIST IN ITS FAVOR.
SECTION 11.22. NONLIABILITY OF LENDERS. The relationship between the
Company and the Banks is, and shall at all times remain, solely that of
borrower and lenders, and the Banks and the Agent neither undertake nor
assume any responsibility or duty to the Company to review, inspect,
supervise, pass judgment upon, or inform the Company of any matter in
connection with any phase of the Company's business, operations, or
condition, financial or otherwise. The Company shall rely entirely upon
its own judgment with respect to such matters, and any review, inspection,
supervision, exercise of judgment, or information supplied to the Company
by any Bank or the Agent in connection with any such matter is for the
protection of the Bank and the Agent, and neither the Company nor any third
party is entitled to rely thereon.
SECTION 11.23. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS EXECUTED CONTEMPORANEOUSLY HEREWITH, REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Exhibits A through N, inclusive of the Credit Agreement shall each be
amended, and as so amended shall be restated in their entirety to read as
set forth in Exhibits A through N hereto, respectively, and Exhibits O and
P of the Credit Agreement are deleted.
The amendments reflected in the above and foregoing Second Amended and
Restated Secured Credit Agreement shall not become effective unless and
until the following conditions precedent have been satisfied:
(a) The Company and each of the Banks shall have executed this Second
Amended and Restated Secured Credit Agreement (such execution may be in
several counterparts and the several parties hereto may execute on separate
counterparts).
(b) Each of the representations and warranties set forth in Section 5
of the Credit Agreement shall be true and correct.
(c) The Company shall be in full compliance with all of the terms and
conditions of the Credit Agreement and no Event of Default or Potential
Default shall have occurred and be continuing thereunder or shall result
after giving effect to this Second Amended and Restated Secured Credit
Agreement.
(d) All legal matters incident to the execution and delivery hereof
and the instruments and documents contemplated hereby shall be satisfactory
to the Banks.
(e) The Agent shall have received (in sufficient counterparts for
distribution to each of the Banks) all of the following in a form
satisfactory to the Agent, the Banks and their respective counsel:
(i) a Secured Revolving Credit Note in the form attached hereto
as Exhibit A payable to the order of each Bank in the principal amount
of its Revolving Credit Commitment;
(ii) copies (executed or certified as may be appropriate) of all
legal documents or proceedings taken in connection with the execution
and delivery of this Second Amended and Restated Secured Credit
Agreement, and the other instruments and documents contemplated
hereby; and
(iii) an opinion of counsel to the Company substantially in a form
as set forth in Exhibit E hereto and satisfactory to the Agent, the
Banks and their respective counsel.
(f) The Agent shall have received for its account and the account of
the Banks all fees payable by the Company to the Agent and the Banks in
connection with this Second Amended and Restated Secured Credit Agreement.
(g) The Company shall at the time all other conditions precedent to
the effectiveness of the above and foregoing amendments have been satisfied
be able to comply with the conditions precedent to borrowing set forth in
Section 6 hereof.
The Company, by its execution of this Second Amended and Restated
Secured Credit Agreement, hereby represents and warrants the following:
(a) each of the representations and warranties set forth in
Section 5 of the Credit Agreement is true and correct as of the date
hereof, except that the representations and warranties made under
Section 5.3 shall be deemed to refer to the most recent annual report
furnished to the Banks by the Company; and
(b) the Company is in full compliance with all of the terms and
conditions of the Credit Agreement and no Event of Default or
Potential Default has occurred and is continuing thereunder.
The Company agrees to pay all costs and expenses incurred by the
Agent and the Banks in connection with the preparation, execution and
delivery of this Second Amended and Restated Secured Credit Agreement
and the documents and transactions contemplated hereby including the
fees and expenses of Messrs. ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ with respect to the
foregoing. No reference to this Second Amended and Restated Secured
Credit Agreement need be made in any note, security agreement,
instrument or other documents making reference to the Credit Agreement,
any reference to the Credit Agreement in any of such to be deemed to be
a reference to the Credit Agreement as amended and restated hereby.
This Second Amended and Restated Secured Credit Agreement may be
executed in any number of counterparts and by different parties hereto
on separate counterparts, each of which when so executed shall be deemed
an original, but all of which to constitute but one and the same
instrument.
The Company has heretofore executed and delivered to the Agent that
certain Security Agreement Re: Accounts Receivable, Farm Products and
Inventory dated as of May 27, 1993, as amended (the "SECURITY AGREEMENT"),
and the Company hereby agrees that notwithstanding the execution and
delivery hereof, the Security Agreement shall be and remain in full force
and effect and that any rights and remedies of the Agent thereunder,
obligations of the Company thereunder and any liens or security interests
created or provided for thereunder shall be and remain in full force and
effect, shall not be affected, impaired or discharged thereby and shall
secure all of the Company's indebtedness, obligations and liabilities to
the Agent and the Banks under the Credit Agreement as amended and restated
hereby. Nothing herein contained shall in any manner affect or impair the
priority of the liens and security interests created and provided for by
the Security Agreement as to the indebtedness which would be secured
thereby prior to giving effect hereto. Without limiting the foregoing, the
Company acknowledges and agrees that all of its indebtedness, obligations
and liabilities to the Agent and the Banks pursuant to the Credit Agreement
as amended and restated hereby, including without limitation, all principal
of and interest on the Revolving Notes (as defined in the Credit Agreement
as amended and restated hereby), all Reimbursement Obligations and all Bond
Reimbursement Obligations, in each case whether presently existing or
hereafter arising, shall constitute "Secured Obligations" as defined in the
Security Agreement and shall be secured by, and entitled to all of the
benefits of, the liens and security interest created and provided for under
the Security Agreement. In furtherance of the foregoing, the Company
hereby grants to the Agent for the benefit of the Banks, and hereby agrees
that the Agent for the benefit of the Banks shall continue to have a
continuing security interest in, all and singular of the Company's farm
products, inventory, books and records, documents, accessions and additions
to all of the foregoing and all products and proceeds of each of the
foregoing, and all proceeds or collection of any of the foregoing and all
of the other collateral described or referred to in the granting clauses of
the Security Agreement, each and all of which granting clauses are hereby
incorporated by reference herein in their entirety. The foregoing grant
shall be in addition to and supplemental of and not in substitution for the
grant by the Company under the Security Agreement, and shall not affect or
impair the lien or priority of the Security Agreement in the collateral
subject thereto or the indebtedness secured thereby.
THIS SECOND AMENDED AND RESTATED SECURED CREDIT AGREEMENT AND THE
RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE CONSTRUED AND DETERMINED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, EXCEPT TO
THE EXTENT PROVIDED IN THE NEXT PARAGRAPH HEREOF AND TO THE EXTENT THAT THE
FEDERAL LAWS OF THE UNITED STATES OF AMERICA MAY OTHERWISE APPLY.
NOTWITHSTANDING ANYTHING IN THE IMMEDIATELY PRECEDING PARAGRAPH HEREOF
TO THE CONTRARY, NOTHING IN THIS SECOND AMENDED AND RESTATED SECURED CREDIT
AGREEMENT, THE CREDIT AGREEMENT, THE NOTES, OR THE OTHER LOAN DOCUMENTS
SHALL BE DEEMED TO CONSTITUTE A WAIVER OF ANY RIGHTS WHICH THE COMPANY, THE
AGENT OR ANY OF THE BANKS MAY HAVE UNDER THE NATIONAL BANK ACT OR OTHER
APPLICABLE FEDERAL LAW.
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set
forth.
Dated as of November 5, 1999.
PILGRIM'S PRIDE CORPORATION
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By
Its Chief Financial Officer
Accepted and Agreed to as of the day and year last above written.
▇▇▇▇▇▇ TRUST AND SAVINGS BANK individually
and as Agent
By
Its Vice President
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Agribusiness Division
U.S. BANCORP AG CREDIT, INC.
By
Its
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
COBANK, ACB
By
Its
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
SUNTRUST BANK, ATLANTA
By
Its
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: _______________________
CREDIT AGRICOLE INDOSUEZ
By
Its
By
Its
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
EXHIBIT A
Pilgrim's Pride Corporation
SECURED REVOLVING CREDIT NOTE
November 5, 1999
FOR VALUE RECEIVED, the undersigned, PILGRIM'S PRIDE CORPORATION, a
Delaware corporation (the "COMPANY"), promises to pay to the order of
________________ (the "LENDER") on the Termination Date (as defined in the
Credit Agreement referred to below), at the principal office of ▇▇▇▇▇▇
Trust and Savings Bank in Chicago, Illinois, the aggregate unpaid principal
amount of all Revolving Credit Loans and Bid Loans made by the Lender to
the Company under the Revolving Credit provided for under the Credit
Agreement hereinafter mentioned and remaining unpaid on the Termination
Date, together with interest on the principal amount of each Revolving
Credit Loan and Bid Loan from time to time outstanding hereunder at the
rates, and payable in the manner and on the dates specified in said Credit
Agreement.
The Lender shall record on its books or records or on the schedule to
this Note which is a part hereof the principal amount of each Revolving
Credit Loan and Bid Loan made under the Revolving Credit, whether each Loan
is a Domestic Rate Loan or a Eurodollar Loan and, with respect to Fixed
Rate Loans, the interest rate and Interest Period applicable thereto, and
all payments of principal and interest and the principal balances from time
to time outstanding; provided that prior to the transfer of this Note all
such amounts shall be recorded on a schedule attached to this Note. The
record thereof, whether shown on such books or records or on the schedule
to this Note, shall be PRIMA FACIE evidence as to all such amounts;
provided, however, that the failure of the Lender to record or any mistake
in recording any of the foregoing shall not limit or otherwise affect the
obligation of the Company to repay all Revolving Credit Loans and Bid Loans
made under the Credit Agreement, together with accrued interest thereon.
This Note is one of the Revolving Notes referred to in and issued
under that certain Second Amended and Restated Secured Credit Agreement
dated as of November 5, 1999, among the Company, ▇▇▇▇▇▇ Trust and Savings
Bank, as Agent, and the banks named therein, as amended from time to time
(the "CREDIT AGREEMENT"), and this Note and the holder hereof are entitled
to all of the benefits and security provided for thereby or referred to
therein, including without limitation the collateral security provided
pursuant to the Security Agreement (as defined in the Credit Agreement), to
which Credit Agreement and Security Agreement reference is hereby made for
a statement thereof and a statement of the terms and conditions upon which
the Agent may exercise rights with respect to such collateral. All defined
terms used in this Note, except terms otherwise defined herein, shall have
the same meaning as such terms have in said Credit Agreement.
Prepayments may be made on any Revolving Credit Loan evidenced hereby
and this Note (and the Revolving Credit Loans evidenced hereby) may be
declared due prior to the expressed maturity thereof, all in the events, on
the terms and in the manner as provided for in said Credit Agreement and
the Security Agreement.
All agreements between the Company, the Agent (as defined in the
Credit Agreement) and each of the Banks (as defined in the Credit
Agreement), whether now existing or hereafter arising and whether written
or oral, are expressly limited so that in no contingency or event
whatsoever, whether by reason of demand or acceleration of the maturity of
any of the indebtedness hereunder or otherwise, shall the amount contracted
for, charged, received, reserved, paid or agreed to be paid to the Agent or
each Bank for the use, forbearance, or detention of the funds advanced
hereunder or otherwise, or for the performance or payment of any covenant
or obligation contained in any document executed in connection herewith
(all such documents being hereinafter collectively referred to as the
"CREDIT DOCUMENTS"), exceed the highest lawful rate permissible under
applicable law (the "HIGHEST LAWFUL RATE"), it being the intent of the
Company, the Agent and each of the Banks in the execution hereof and of the
Credit Documents to contract in strict accordance with applicable usury
laws. If, as a result of any circumstances whatsoever, fulfillment by the
Company of any provision hereof or of any of such documents, at the time
performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by applicable usury law or result in the Agent
or any Bank having or being deemed to have contracted for, charged,
reserved or received interest (or amounts deemed to be interest) in excess
of the maximum, lawful rate or amount of interest allowed by applicable law
to be so contracted for, charged, reserved or received by the Agent or such
Bank, then, IPSO FACTO, the obligation to be fulfilled by the Company shall
be reduced to the limit of such validity, and if, from any such
circumstance, the Agent or such Bank shall ever receive interest or
anything which might be deemed interest under applicable law which would
exceed the Highest Lawful Rate, such amount which would be excessive
interest shall be refunded to the Company or, to the extent (i) permitted
by applicable law and (ii) such excessive interest does not exceed the
unpaid principal balance of the Notes (as defined in the Credit Agreement)
and the amounts owing on other obligations of the Company to the Agent or
any Bank under any Loan Document (as defined in the Credit Agreement)
applied to the reduction of the principal amount owing on account of the
Notes or the amounts owing on other obligations of the Company to the Agent
or any Bank under any Loan Document and not to the payment of interest.
All interest paid or agreed to be paid to the Agent or any Bank shall, to
the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full period of the indebtedness hereunder until
payment in full of the principal of the indebtedness hereunder (including
the period of any renewal or extension thereof) so that the interest on
account of the indebtedness hereunder for such full period shall not exceed
the highest amount permitted by applicable law. This paragraph shall
control all agreements between the Company, the Agent and the Banks.
The undersigned hereby expressly waives diligence, presentment,
demand, protest, notice of protest, notice of intent to accelerate, notice
of acceleration, and notice of any other kind.
IT IS AGREED THAT THIS NOTE AND THE RIGHTS AND REMEDIES OF THE HOLDER
HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF ILLINOIS, PROVIDED, HOWEVER, THAT NOTHING IN THIS NOTE
SHALL BE DEEMED TO CONSTITUTE A WAIVER OF ANY RIGHTS WHICH THE COMPANY, THE
AGENT OR ANY OF THE BANKS MAY HAVE UNDER THE NATIONAL BANK ACT OR OTHER
APPLICABLE FEDERAL LAW.
PILGRIM'S PRIDE CORPORATION
By
Its Chief Financial Officer
EXHIBIT B
L/C AGREEMENT
EXHIBIT C
ENVIRONMENTAL DISCLOSURE
1.
EXHIBIT D
PERMITTED LIENS
LIEN DATE LIEN HOLDER COLLATERAL
EXHIBIT E
LEGAL OPINION
(To Be Retyped On Letterhead Of Counsel
And Dated As Of Date Of Closing)
EXHIBIT F
Pilgrim's Pride Corporation
COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished to ▇▇▇▇▇▇ Trust and Savings
Bank, as agent (the "AGENT"), pursuant to that certain Second Amended and
Restated Secured Credit Agreement dated as of November 5, 1999 by and among
Pilgrim's Pride Corporation (the "COMPANY"), ▇▇▇▇▇▇ Trust and Savings Bank
and the other Banks parties thereto (the "AGREEMENT"). Unless otherwise
defined herein, the terms used in this Compliance Certificate have the
meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________________________________ of the
Company;
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Company during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Potential Default or Event of Default during or at the end of
the accounting period covered by the attached financial statements or as of
the date of this Certificate, except as set forth below; and
4. If attached financial statements are being furnished pursuant to
Section 7.4(a) or (b) of the Agreement, Schedule I attached hereto sets
forth financial data and computations, evidencing the Company's compliance
with certain covenants of the Agreement, all of which data and computations
are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it
has existed and the action which the Company has taken, is taking or
proposes to take with respect to each such condition or event:
_______________________________________________________
_______________________________________________________
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this ________ day of
______________________, 19___.
PILGRIM'S PRIDE CORPORATION
By
Its
SCHEDULE I
TO COMPLIANCE CERTIFICATE
PILGRIM'S PRIDE CORPORATION
Compliance Calculations for Second Amended and Restated Secured
Credit Agreement Dated as of November 5, 1999
SECTION 7.8 LEVERAGE RATIO
(a) Funded Debt ..................................$________
(b) Funded Debt ..................................$________
Net Worth ....................................$________
TOTAL..........................$________
(a)/(b)..............________*
*Required to not exceed 0.625 to 1.
Compliance Yes_______ No________
SECTION 7.9 TANGIBLE NET WORTH
(a) Net Worth ....................................$________
(b) Intangible Assets ............................$________
(a) - (b)............________*
Tangible Net Worth .................................$_______*
*Required to be no less than $___________ during this compliance period.
Compliance Yes_______ No________
SECTION 7.10 CURRENT RATIO
(a) Current Assets ...............................$________
(b) Current Liabilities ..........................$________
(a)/(b)..............________*
*Required to be no less than ____ to 1 during this compliance period.
Compliance Yes_______ No________
SECTION 7.11 NET TANGIBLE ASSETS TO TOTAL LIABILITIES
(a) Net Tangible Assets ..........................$________
(b) Total Liabilities.............................$________
(a)/(b)..............________*
*Required to be no less than 1.3 to 1.
Compliance Yes_______ No________
SECTION 7.12 FIXED CHARGE COVERAGE RATIO
(a) EBITDA .......................................$________
(b) Operating Leases (determined in accordance
with generally accepted accounting principles,
consistently applied).........................$________
(c) (a) + (b).....................................$________
(d) Interest Expense..............................$________
(e) Current Maturities of Long Term Debt..........$________
(f) Non-Cancellable Operating Lease Payments......$________
(g) Capital Lease Payments (determined in accordance
with generally accepted accounting principles,
consistently applied).........................$________
(h) (d) + (e) + (f) + (g).........................$________
(c)/(h) $________*
* Required to be no less than 1.5 to 1.
Compliance Yes_______ No________
SECTION 7.13 MINIMUM NET WORKING CAPITAL
(a) Current Assets ...............................$________
(b) Current Liabilities ..........................$________
(a)-(b)..............________*
*Required to be no less than __________________________ during this
compliance period.
Compliance Yes_______ No________
EXHIBIT G
Pilgrim's Pride Corporation
BORROWING BASE CERTIFICATE
as of _____________________
($000's omitted)
This Borrowing Base Certificate is furnished to ▇▇▇▇▇▇ Trust and
Savings Bank, as agent (the "AGENT"), pursuant to that certain Second
Amended and Restated Secured Credit Agreement dated as of November 5, 1999,
as amended, by and among Pilgrim's Pride Corporation (the "COMPANY"),
▇▇▇▇▇▇ Trust and Savings Bank and the other Bank parties thereto (the
"AGREEMENT"). Unless otherwise defined herein, the terms used in this
Borrowing Base Certificate have the meanings ascribed thereto in the
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected Chief Financial Officer of the Company.
2. I have reviewed the terms of the Agreement and I have made,
or have caused to be made under my supervision, the attached
computation of the Borrowing Base as defined in Section 4.1 of the
Agreement.
3. No change of name, corporate identity or address of the chief
executive office of the Company has occurred.
4. I have reviewed the terms of the Agreement and, pursuant to
such review, I have no knowledge of the existence of any condition or
event which would constitute a Potential Default or Event of Default,
except as set forth below (detailing the nature of the condition or
event, the period during which it has existed and the action which the
Company has taken, is taking or proposes to take with respect to each
such condition or event):
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
5. The information above and any attached exhibits do not
contain any untrue statement of material fact or omit a material fact,
either individually or in aggregate, that would make the information
or any attached exhibits misleading.
PILGRIM'S PRIDE CORPORATION
By
Its
SUMMARY OF COLLATERAL POOL
Dated as of ___________, 199__
INVENTORY ADVANCE
UNITS VALUE VALUE
1.)
Live Broilers __________ $_________ $__________
2.) Breeder Hens __________ $_________ $__________
3.) Breeder Pullets __________ $_________ $__________
4.) Commercial Hens __________ $_________ $__________
5.) Commercial Pullets __________ $_________ $__________
6.) Grain Feed (Field) __________ $_________ $__________
7.) Eggs (Hatching/
In Transit) __________ $_________ $__________
8.) Dressed Broilers __________ $_________ $__________
9.) Prepared Foods __________ $_________ $__________
10.) Eggs (Commercial) __________ $_________ $__________
11.) Grain (Feedmills) __________ $_________ $__________
12.) Branch Inventory
of Packaged Items $_________ $__________
13.) Packaging, Vaccines,
Supplies $_________ $__________
SUBTOTAL(lines 1-13)__________ $_________ $__________
14.) Less Grower Payables Greater ($__________)
than 15 days
15.) Less Bond L/C Exposure ($__________)
TOTAL COLLATERAL POOL $_________ $__________
Less O/S Indebtedness
as of: _________ $__________
TOTAL AVAILABLE CREDIT: $__________
COLLATERAL VALUE COMPUTATIONS
Dated as of __________, 199__
COLLATERAL POOL:
GROSS VALUE COMPUTATION ADVANCE VALUE
1) Live Broiler Value:
Number of Head __________ Head
(-) Death/Reject Rate (4%) __________ Head
(x) Avg. Weight per Bird (2 __________ Lbs.
Lbs.)
(x) _______ _______ cents/lb.
as of ___________ __________ x 65% ____________
2) Breeder Hen Value:
Number of Head __________ Head
(x) Loan Value @ $1.50/bird ________ @ 100% ____________
3) Breeder Pullet Value:
Number of Head __________ Head
(x) Loan Value @ $1.00/bird ________ @ 100% ____________
4) Commercial Hen Value:
Number of Head __________ Head
(x) Loan Value @ $0.70/bird ________ @ 100% ____________
5) Commercial Pullet Value:
Number of Head __________ Head
(x) Loan Value @ $0.40/bird ________ @ 100% ____________
6) Grain Feed Value (Field):
Number of Head (NET) __________ Head
(x) 0.75 Lbs/day (/) 2,000 __________ Tons
(x) Feed Cost/Ton ____________ __________ x 65% ____________
7) Eggs (Hatching & In Transit):
Number of Dozens __________ Dozen
(x) $1.25/Doz ________ @ 100% ____________
8) Dressed Broilers (All Locations):
Number of pounds __________ Lbs
(x) Price/Lb. computed_________ __________ x 65% ____________
9) Prepared Foods (All Locations)
Number of pounds ___________ Lbs.
(x) Price/Lb. computed_________ __________ x 65% ____________
10) Eggs (Commercial)
Number of Dozens __________ Dozen
(x) ____________/dozen __________ x 65% ____________
11) Grain Value (Feedmills):
Corn: ______ x ______ __________ x 65% ____________
Cost/Ton
Soybean Meal: ______ x ______ __________ x 65% ____________
Cost/Ton
Feed Supplements: ______ x ______ __________ x 65% ____________
Cost/Ton
Finished Feeds: ______ x ______ __________ x 65% ____________
Cost/Ton
Total Tons: ______ __________ x 65% ____________
12) Branch Inventory of Packaged Items
(@ Cost) __________ x 65% ____________
13) Packaging, Vaccines, Supplies
(@ Cost) __________ x 40% ____________
Total Collateral Pool __________ ____________
EXHIBIT H
PILGRIM'S PRIDE CORPORATION
SUBSIDIARIES AND AFFILIATES
EXHIBIT I
INTENTIONALLY OMITTED
EXHIBIT J
LABOR DISPUTES
EXHIBIT K
EXISTING INVESTMENTS
EXHIBIT L
COMPETITIVE BID REQUEST CONFIRMATION
[Date]
▇▇▇▇▇▇ Trust and Savings Bank as Agent for the Banks parties to the Second
Amended and Restated Secured Credit Agreement referred to below
Attention:
Ladies and Gentlemen:
The undersigned, PILGRIM'S PRIDE CORPORATION (the "COMPANY") refers to the
Second Amended and Restated Secured Credit Agreement dated as of November 5,
1999 (the "CREDIT AGREEMENT"), among the Company, the Banks named therein and
▇▇▇▇▇▇ Trust and Savings Bank, as Agent for the Banks. Capitalized terms used
herein and not defined shall have the meanings assigned to such terms in the
Credit Agreement. The Company hereby confirms that it has, on the date hereof,
given you notice pursuant to Section 2.2 of the Credit Agreement that it
requests a Bid Loan under the Credit Agreement, and in that connection sets
forth below the terms on which such Bid Loan is requested to be made:
(A) Date of Bid Loans {1}
(B) Aggregate Principal Amount of Bid Loan {2}
(C) Interest Periods{3}
Upon acceptance of any or all of the Bid Loans offered by Banks in
response to this request, the Company shall be deemed to affirm as of such date
the representations and warranties made in the Credit Agreement to the extent
specified in Section 6 thereof.
Very truly yours,
PILGRIM'S PRIDE CORPORATION
By
Its
**FOOTNOTES**
{1} The Competitive Bid Request Confirmation must be received on a Business
Day by the Agent not later than 11:30 A.M., Chicago time, one Business
Day before the date of the proposed Bid Loan (which must be a Business
Day).
{2} Not less than $3,000,000 and in integral multiples of $1,000,000.
{3} Which shall be no more than 180 days or less than 7 days and shall end not
later than the Termination Date.
EXHIBIT M
CONFIRMATION OF NOTICE OF COMPETITIVE BID REQUEST
[Name of Bank] [Date]
[Address]
Attention:
Ladies and Gentlemen:
Reference is made to the Second Amended and Restated Secured Credit
Agreement, dated as of November 5, 1999 (the "CREDIT AGREEMENT") among
PILGRIM'S PRIDE CORPORATION (the "COMPANY"), the Banks named therein and ▇▇▇▇▇▇
Trust and Savings Bank, as Agent for the Banks. Capitalized terms used herein
and not defined shall have the meanings assigned to such terms in the Credit
Agreement. The Company made a Competitive Bid Request on _____________, 19__
pursuant to Section 2.2 of the Credit Agreement, and in that connection you are
invited to submit a Competitive Bid by [DATE] .{4}
Your Competitive Bid must comply with Section 2.3 of the Credit
Agreement and the terms set forth below on which the Competitive Bid Request
was made.
(A) Date of Bid Loan ___________
(B) Aggregate principal amount
of Bid Loan ___________
(C) Interest Periods ___________
Very truly yours,
▇▇▇▇▇▇ TRUST AND SAVINGS BANK, as Agent for
the Banks
By
Its
**FOOTNOTES**
{4} The Competitive Bid must be received by the Agent not later than
8:45 A.M., Chicago time, on the proposed Borrowing Date.
EXHIBIT N
CONFIRMATION OF COMPETITIVE BID
[Date]
▇▇▇▇▇▇ Trust and Savings Bank,
as Agent for the Banks
parties to the Second Amended and
Restated Secured Credit Agreement
referred to below
Attention:
Ladies and Gentlemen:
The undersigned, [NAME OF BANK], refers to the Second Amended and Restated
Secured Credit Agreement dated as of November 5, 1999 (the "CREDIT AGREEMENT")
among PILGRIM'S PRIDE CORPORATION (the "COMPANY"), the Banks named therein and
▇▇▇▇▇▇ Trust and Savings Bank, as Agent for the Banks. Capitalized terms used
herein and not defined shall have the meanings assigned to such terms in the
Credit Agreement. The undersigned hereby confirms that on the date hereof it
has made a Competitive Bid pursuant to Section 2.3 of the Credit Agreement, in
response to the Competitive Bid Request made by the Company on ,
19 , and in that connection sets forth below the terms on which such
Competitive Bid is made:
Date of Borrowing: {5}
PRINCIPAL AMOUNT{6} INTEREST PERIOD{7} YIELD{8}
Very truly yours,
______________________________________
By
Its
**FOOTNOTES**
{5} As specified in the related Confirmation of Notice of Competitive Bid
Request.
{6} Principal amount bid for each Interest Period may not exceed the principal
amount requested by the Company. Bids must be made in a minimum amount
of $3,000,000 and in integral multiples of $1,000,000.
{7} Up to 180 days and not less than 30 days, as specified in the related
Confirmation of Notice of Competitive Bid Request.
{8} Specify rate of interest per annum computed on the basis of a year of 360
days and actual days elapsed.