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EXHIBIT 4.5
/s/ UNION BANK
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Union Bank
TERM LOAN AGREEMENT
This Term Loan Agreement ("Agreement") is entered into as of November 3,
1993 between Union Bank ("Bank") and LA VICTORIA FOODS, INC. ("Borrower") with
respect to the following:
1. The Loan ("Loan")
1.1 Amount $5,500,000.00
1.2 Availability period: funding through 11/29/98.
1.3 Interest rate: The interest rate shall be calculated at that rate set
forth in the promissory note ("Note") required under Article 3.
1.4 Principal and interest payments: At the times set forth in the Note
required under Article 3.
1.5 Loan fee: Five thousand Dollars ($5,000.00) payable on funding.
1.6 Other fee: N/A
1.7 Balances: Borrower shall maintain all of its major accounts with Bank
during the term of the Loan, including any compensating balances as
set forth in Article 5.4.
1.8 Any prepayment fee and the calculation therefor shall be set forth in
the Note.
1.9 Borrower shall borrow the entire amount of the Loan within ten (10)
days of the date of this Agreement.
2. COLLATERAL
Security for the payment and performance of all sums and all other
obligations under this Agreement shall be evidenced by the documents
executed by Borrower and/or accommodation pledgor in connection with this
Loan.
3. CONDITIONS TO AVAILABILITY OF THE LOAN
Before Bank is obligated to disburse the Loan, Bank must receive all of
the following, each of which must be in form and substance satisfactory to
Bank:
3.1 The original, executed Note evidencing the Loan;
3.2 Original, executed security agreement(s) and deed(s) of trust covering
the collateral referenced in Article 2;
3.3 All collateral referenced in Article 2 in which Bank wishes to have a
possessory security interest;
3.4 Financing statement(s) executed by Borrower;
3.5 Evidence that the security interests and liens in favor of Bank are
valid, enforceable, and prior to the rights and interests of others
except those consented to in writing by Bank;
3.6 Continuing guaranty(ies) in favor of Bank, executed by: N/A;
Borrower shall cause each Guarantor to submit not later than _____
days after the end of each _____ year the Guarantor's financial
statement, confirmed as to its correctness by Guarantor's signature,
either on Bank's form therefor or prepared by an independent
certified public accountant as of the end of each _____ year, and a
copy of the federal income tax return for such previous _____ year;
3.7 Subordination agreement(s) in favor of Bank on its standard form
executed by: N/A;
3.8 Evidence that the execution, delivery, and performance by Borrower of
this Agreement and the execution, delivery, and performance by
Borrower and any corporate guarantor or corporate subordinating
creditor of any instrument or agreement required under this
Agreement, as appropriate, have been duly authorized.
4. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants (and the request for the Loan shall be
deemed a representation and warranty made on the date of such request)
that:
4.1 Borrower is a California Corporation duly organized and existing
under the laws of the state of its organization and the execution,
delivery and performance of this Agreement are within Borrower's
powers, have been duly authorized, and are not in conflict with the
terms of any charter, bylaw, or other organization papers of
Borrower;
4.2 The execution, delivery, and performance of this Agreement are not in
conflict with any law or any indenture, agreement, or undertaking to
which Borrower is a party or by which Borrower is bound or affected;
4.3 All financial information submitted by Borrower to Bank, whether
previously or in the future, is and will be true and correct in all
material respects upon submission and is and will be complete upon
submission insofar as may be necessary to give Bank a true and
accurate knowledge of the subject matter thereof;
4.4 Borrower is properly licensed and in good standing in each state in
which Borrower is doing business, and Borrower has qualified under,
and complied with, where required, the fictitious name statute of
each state in which Borrower is doing business;
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4.5 There is no event which is, or with notice or lapse of time or both
would be, an Event of Default (as defined in Article 6) under this
Agreement;
4.6 Borrower is not engaged in the business of extending credit for the
purpose of, and no part of the Loan will be used for, purchasing or
carrying margin stock within the meaning of the Federal Reserve Board
Regulation U; and
4.7 All defined benefit pension plans as defined in the Employees
Retirement Income Security Act of 1974, as amended ("ERISA"), of
Borrower meet, as of the date hereof, the minimum funding standards
of Section 302 of ERISA, and no Reportable Event or Prohibited
Transaction as defined in ERISA has occurred with respect to any such
plan.
5. COVENANTS
Borrower agrees, so long as credit granted under this Agreement is
available and until full and final payment of all sums outstanding under
this Agreement and the Note, Borrower will:
5.1 At all times maintain:
(a) A ratio of current assets to current liabilities of at least:
N/A;
Current assets are defined as cash and other assets reasonably
expected to be realized in cash, sold, or consumed within one
year, or during the operating cycle of the business of the
Borrower, whichever is longer. Current liabilities are defined
as those obligations whose liquidation is reasonably expected
to require the use of existing resources classified as current
assets, or the creation of other current liabilities.
(b) A quick ratio of cash, accounts receivable and marketable
securities to current liabilities of at least: N/A;
(c) Net working capital equal to at least $ N/A (Net working capital
shall mean the excess of current assets over current
liabilities);
(d) A minimum tangible net worth of $17,400,000 (Tangible net worth
shall mean net worth after deducting patents, trademarks,
goodwill and other similar intangible assets);
(e) A ratio of total liabilities to tangible net worth of not
greater than .65:1.0; and
(f) A net cash flow equal to at least 125% of debt service, to be
measured as of the end of each fiscal year for the twelve-month
period immediately preceding the date of calculation. (Debt
service shall mean that portion of long-term liabilities and
leases coming due within twelve months of the date of
calculation. Cash flow shall mean net profit after taxes,
exclusive of nonrecurring income, to which depreciation,
amortization and other non-cash expenses are added for the
twelve-month period immediately preceding the date of
calculation.)
5.2 Give written notice to Bank within fifteen (15) days of:
(a) All litigation affecting Borrower where the amount is N/A
Dollars ($______) or more;
(b) Any substantial dispute which may exist between Borrower and any
governmental regulatory body or law enforcement authority;
(c) Any Event of Default under this Agreement or any event which,
upon notice or a lapse of time or both, would become an Event of
Default;
(d) Any other matter which has resulted or might result in a
material adverse change in Borrower's financial condition or
operations; and
(e) Any change in Borrower's name or principal place of business.
5.3 Furnish to Bank:
(a) Within 30 days after the close of each of the first three fiscal
quarters, its financial statement as of the close of that
quarter prepared in accordance with generally accepted
accounting principles by [X] Borrower's chief financial officer;
[ ] a(n) __________ (independent/certified/public or applicable
combination thereof) accountant selected by Borrower and
reasonably satisfactory to Bank;
(b) Within 90 days after the close of each fiscal year, a copy of
its financial statement prepared on a(n) review (internal,
compilation, review, audited) basis in accordance with generally
accepted accounting principles applied on a basis consistent
with the previous year by [ ] Borrower's chief financial
officer; [X] a(n) certified public (independent/certified/public
or applicable combination thereof) accountant selected by
Borrower and reasonably satisfactory to Bank.
5.4 Maintain on deposit with Bank average daily collected demand deposit
balances equal to at least N/A % of the average daily outstanding
balance of the Loan and _____% of the committed amount of the Loan.
Balances shall be calculated by Bank in its sole discretion after
reduction for (a) uncollected funds, (b) reserve requirements of the
Federal Reserve Board, and (c) balances necessary to compensate Bank
for account activity charges and cost of all services provided by
Bank to the Borrower and not paid under a separate agreement. These
balances shall be computed __________ as of the last day of each
__________. Borrower shall be charged a fee for any deficiency for
such _____ equal to _____ of the per annum rate of ___% plus the
average Union Bank Reference Rate for the __________ multiplied by
the amount of average daily balances which Borrower would have had to
maintain on deposit with Bank to make up the deficiency. This fee
shall be due and payable ten (10) days after Bank notified Borrower
of the amount due and owing. Failure to maintain required balances
shall not be a default hereunder unless and until Borrower shall fail
to pay the fee when due.
5.5 Pay or reimburse Bank for any out-of-pocket expenses incurred by it
in connection with this Agreement or on any agreements or financing
statements or other instruments delivered under this Agreement.
5.6 Maintain and preserve all rights, privileges and franchises now
enjoyed, conduct Borrower's business in an orderly, efficient and
customary manner, keep all Borrower's properties in good working
order and condition, and from time to time make all needed repairs,
renewals or replacements so that the efficiency of Borrower's
properties shall be fully maintained and preserved.
5.7 Maintain and keep in force in adequate amounts such insurance as is
usual in the business carried on by Borrower.
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5.8 Maintain adequate books, accounts and records and prepare all financial
statements required hereunder in accordance with generally accepted
accounting principles and practices consistently applied, and in
compliance with the regulations of any governmental regulatory body
having jurisdiction over Borrower or Borrower's business and permit
employees or agents of Bank at any reasonable time to inspect Borrower's
properties, and to examine or audit Borrower's books, accounts and
records and make copies and memoranda thereof.
5.9 At all times meet, for all Borrower's defined benefit pension plans as
defined in the Employees Retirement Income Security Act of 1974, as
amended ("ERISA"), the minimum funding standards of Section 302 of
ERISA, and no Reportable Event or Prohibited Transaction as defined in
ERISA will occur with respect to any such plan.
5.10 At all times comply with, or cause to be complied with, all laws,
statutes, rules, regulations, orders and directions of any governmental
authority having jurisdiction over Borrower or Borrower's business.
5.11 Except as provided in this Agreement, or in the ordinary course of
business as currently conducted, not make any loans or advances, become
a guarantor or surety, pledge its credit or properties in any manner,
extend credit.
5.12 Not purchase the debt or equity of another person or entity except for
savings accounts and certificates of deposit of Bank, direct U.S.
Government obligations and commercial paper issued by corporations with
top ratings of Moody's or Standard & Poor's, provided all such permitted
investments shall mature within one year of purchase.
5.13 Not create, assume or suffer to exist any mortgage, encumbrance,
security interest, pledge, or other lien (including the lien of an
attachment, judgment, or execution), securing a charge or obligation,
on or in any of Borrower's property, real or personal, whether now owned
or hereafter acquired, except to Bank and as set forth in Articles 5.17
and 5.18.
5.14 Not sell or discount any receivables or evidence of indebtedness,
except to Bank, borrow any money, incur directly or indirectly, any
liabilities for borrowed money, except pursuant to agreements made with
the Bank.
5.15 Neither liquidate, dissolve, enter into any consolidation, merger,
partnership, or other combination; nor convey, sell or lease all or the
greater part of its assets or business; nor purchase or lease all or the
greater part of the assets or business of another.
5.16 Not engage in any business activities or operations substantially
different from or unrelated to present business activities and
operations.
5.17 Not, in any single fiscal year of Borrower, expend or incur obligations
of more than N/A Dollars ($_______) for the acquisition of fixed
or capital assets.
5.18 Not, in any single fiscal year of Borrower, enter into the lease of any
personal property which would cause Borrower's aggregate annual
obligations under all such leases to exceed N/A Dollars ($_______).
6. EVENTS OF DEFAULT
The occurrence of any of the following events ("Events of Default")
shall terminate any obligation on the part of Bank to make or continue
the Loan and, at the option of Bank, shall make all sums of interest
and principal outstanding under the Loan immediately due and payable,
without notice of default, presentment or demand for payment, protest
or notice of nonpayment or dishonor, or other notices or demands of any
kind or character:
6.1 Borrower shall default in the due and punctual payment of the principal
of or the interest on the Note or any renewal thereof, and such default
shall not be cured within ten (10) business days after the occurrence
thereof; or
6.2 Any representation or warranty made by Borrower herein or in any
certificate or financial or other statement heretofore or hereafter
furnished by Borrower or its officers or any Guarantor shall prove to be
in any material respect false and misleading; or
6.3 Default shall be made by Borrower in the due performance or observance
of any covenant or condition of this Agreement and such default shall
not, within ten (10) days after Borrower has knowledge thereof, have
been cured; or
6.4 The filing by Borrower of any petition under the bankruptcy,
reorganization, arrangement, insolvency, or other debtor's relief laws,
or the filing against Borrower of any such petition or the appointment
of a receiver, trustee or liquidator of all or a substantial part of
Borrower's assets if the filing against Borrower is not dismissed within
thirty (30) days thereafter; or
6.5 The making by Borrower of an assignment for the benefit of creditors; or
6.6 The voluntary suspension of business by Borrower; or
6.7 Any guarantee or subordination agreement required hereunder is breached
or becomes ineffective, or any Guarantor, or subordinating creditor
disavows or attempts to terminate such guarantee or subordination
agreement; or
6.8 If, in the opinion of Bank, there is a materially adverse change in the
financial condition of Borrower or any Guarantor, or for any reason Bank
believes that the prospect of payment or performance pursuant to the
Note, any other indebtedness of Borrower to Bank, this Agreement or any
other agreement or instrument required by Bank in connection with the
Loan has been impaired; or
6.9 Borrower shall commit or do, or fail to commit or do, any act or thing
which would constitute an event of default under any of the terms of any
other agreement, document, or instrument executed, or to be executed by
it and concerning this obligation to pay money. Notwithstanding the
foregoing, Bank shall have no duty to make any advance to Borrower
during any cure period provided for in Sections 6.1, 6.3 and/or 6.4.
7. MISCELLANEOUS
7.1 This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, provided, however, that
Borrower shall not assign this Agreement or any of the rights, duties or
obligations of Borrower hereunder without the prior written consent of
the Bank.
7.2 No consent or waiver under this Agreement shall be effective unless in
writing and signed by an officer of the Bank. No waiver of any breach
or default shall be deemed a waiver of any breach or default thereafter
occurring.
7.3 All documents executed in connection with this Agreement shall be Bank's
standard form or a form acceptable to Bank.
7.4 This Agreement, and any instrument or agreement required under this
Agreement, shall be governed by and construed under the laws of the
State of California.
7.5 The obligations of the parties signing this Agreement as Borrower are
joint and several.
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7.5 Litigation and Attorneys' Fees. Borrower will pay promptly to Bank, without
demand, reasonable attorneys' fees (including but not limited to the
reasonable estimate of the allocated costs and expenses of in-house
legal counsel and legal staff) and all costs and other expenses paid or
incurred by Bank in collecting or compromising the Loan or in enforcing
or exercising its rights and remedies created by, connected with or
provided in this Agreement or any other agreement or instrument required
by Bank in connection with the Loan, whether or not suit is filed. If
suit is filed, only the prevailing party shall be entitled to attorneys'
fees and court costs.
7.6 Borrower agrees that at all times it shall have positive net profits
after tax on a year-to-date basis.
7.7 Borrower shall not make any dividend payments in any one fiscal year
exceeding $500,000.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
BORROWER
UNION BANK, a California banking corporation LA VICTORIA FOODS, INC.
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By: /s/ XXX XXXXXXX By: /s/ XXXXXX X. XXXXXXXX
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Title Vice President Title President
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By: /s/ XXXXXXX X. FETCH By:
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Title A.V.P. Title
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ADDRESS WHERE NOTICES TO BANK ARE TO BE SENT ADDRESS WHERE NOTICES TO BORROWER
ARE TO BE SENT
00000 Xxxxxxxxx Xxxxxx 000 X. 0xx Xxxxxx
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Xxxx xx Xxxxxxxx, XX 00000 City of Xxxxxxxx, XX 00000
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FOURTH AMENDMENT TO
TERM LOAN AGREEMENT
This Fourth Amendment to Term Loan Agreement (this "Fourth Amendment") dated as
of June 20, 1997, is made and entered into by and between La Victoria Foods,
Inc. ("Borrower"), and Union Bank of California, N.A. ("Bank").
RECITALS:
A. Borrower and Bank are parties to that certain Term Loan Agreement dated
November 3, 1993 ("Agreement"), pursuant to which Bank agreed to extend credit
to Borrower.
B. Borrower and Bank desire to amend the Agreement subject to the terms and
conditions of this Fourth Amendment.
AGREEMENT:
In consideration of the above recitals and of the mutual covenants and
conditions contained herein, Borrower and Bank agree as follows:
1. Defined Terms. Initially capitalized terms used herein which are not
otherwise defined shall have the meanings assigned thereto in the Agreement.
2. Amendments to the Agreement.
(a) Section 5.1(d) Tangible Net Worth, line one of the Agreement is hereby
amended by sustituting the amount $11,500,000 for the amount $15,400,000.
(b) Section 5.1(e) A ratio of total liabilities to Tangible Net Worth,
line one of the Agreement is hereby amended by substituting the ratio 1.0 to
1.0 for the ratio .75 to 1.0.
(c) Section 7.7 is hereby deleted in its entirety.
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RATIFICATION:
Except as specifically amended hereinabove, the Agreement shall remain in full
force and effect and is hereby ratified and confirmed.
WITNESS the due execution hereof as of the date first above written.
LA VICTORIA FOODS, INC. UNION BANK OF CALIFORNIA, N.A.
By: By: /s/ XXX XXXXXXX
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Title: Title: Vice President
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