EXHIBIT 10.19
MLA No. RIE089
MASTER LOAN AGREEMENT
THIS MASTER LOAN AGREEMENT is entered into as of February 23, 2004,
between CoBANK, ACB ("CoBank") and DIAMOND WALNUT GROWERS, INC., Stockton,
California (the "Company").
BACKGROUND
CoBank and the Company are parties to a Master Loan Agreement dated March
12, 2001, as amended (the "Existing Agreement"). Pursuant to the terms of the
Existing Agreement, the panics entered into one or more Supplements thereto.
CoBank and the Company now desire to amend and restate the existing Agreement
and to apply such new agreement to the existing Supplements, as well as any new
Supplements that may be issued thereunder. For that reason and for valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
CoBank and the Company hereby agree that the Existing Agreement shall be amended
and restated to read as follows:
SECTION 1. SUPPLEMENTS. In the event the Company desires to borrow from
CoBank and CoBank is willing to lend to the Company, or in the event CoBank and
the Company desire to consolidate any existing loans hereunder, the parties will
enter into a Supplement to this agreement (a "Supplement"). Each Supplement will
set forth the amount of the loan, the purpose of the loan, the interest rate or
rate options applicable to that loan, the repayment terms of the loan, and any
other terms and conditions applicable to that particular loan. Each loan will be
governed by the terms and conditions contained in this agreement and in the
Supplement relating to the loan. As of the date hereof, the following
Supplements are outstanding hereunder and shall be governed by the terms and
conditions hereof: (a) the Revolving Credit Supplement dated February 23, 2004,
and numbered RIE089S01; and (b) the Revolving Term Loan Supplement dated
February 23, 2004 and numbered RIE089T04.
SECTION 2. AVAILABILITY. Loans will be made available on any day on which
CoBank and the Federal Reserve Banks are open for business upon the telephonic
or written request of the Company. Requests for loans must be received no later
than 12:00 Noon Company's local time on the date the loan is desired. Loans will
be made available by wire transfer of immediately available funds to such
account or accounts as may be authorized by the Company. The Company shall
furnish to CoBank a duly completed and executed copy of a CoBank Delegation and
Wire and Electronic Transfer Authorization Form, and CoBank shall be entitled to
rely on (and shall incur no liability to the Company in acting on) any request
or direction furnished in accordance with the terms thereof.
SECTION 3. REPAYMENT. The Company's obligation to repay each loan shall be
evidenced by the promissory note set forth in the Supplement relating to that
loan or by such replacement note as CoBank shall require. CoBank shall maintain
a record of all loans, the interest accrued thereon, and all payments made with
respect thereto, and such record shall, absent proof of manifest error, be
conclusive evidence of the outstanding principal and interest on the loans. All
payments shall be made by wire transfer of immediately available funds, by
check, or by automated clearing house or other similar cash handling processes
as specified by separate agreement between the Company and CoBank. Wire
transfers shall be made to ABA
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No. 307088754 for advice to and credit of CoBank (or to such other account as
CoBank may direct by notice). The Company shall give CoBank telephonic notice no
later than 12:00 Noon Company's local time of its intent to pay by wire and
funds received after 3:00 p.m. Company's local time shall be credited on the
next business day. Checks shall be mailed to XxXxxx, Xxxxxxxxxx 000, Xxxxxx,
Xxxxxxxx 00000-0000 (or to such other place as CoBank may direct by notice).
Credit for payment by check will not be given until the later of: (a) the day on
which CoBank receives immediately available funds; or (b) the next business day
after receipt of the check.
SECTION 4. CAPITALIZATION. The Company agrees to purchase such equity in
CoBank as CoBank may from time to time require in accordance with its Bylaws.
However, the maximum amount of equity which the Company shall be obligated to
purchase in connection with any loan may not exceed the maximum amount permitted
by the Bylaws at the time the Supplement relating to that loan is entered into
or such loan is renewed or refinanced by CoBank.
SECTION 5. SECURITY. The Company's obligations under this agreement, all
Supplements (whenever executed), and all instruments and documents contemplated
hereby or thereby, shall be secured by a statutory first lien on all equity
which the Company may now own or hereafter acquire in CoBank. Except for
CoBank's lien on the Company's equity in CoBank, the Company's obligations
hereunder and under each Supplement shall be unsecured.
SECTION 6. CONDITIONS PRECEDENT.
(A) CONDITIONS TO INITIAL SUPPLEMENT. CoBank's obligation to
extend credit under the initial Supplement hereto is subject to the conditions
precedent that CoBank receive, in form and content satisfactory to CoBank, each
of the following:
(i) THIS AGREEMENT, ETC. A duly executed copy of this
agreement and all instruments and documents contemplated hereby.
(B) CONDITIONS TO EACH SUPPLEMENT. CoBank's obligation to extend
credit under each Supplement, including the initial Supplement, is subject to
the conditions precedent that CoBank receive, in form and content satisfactory
to CoBank, each of the following:
(i) SUPPLEMENT. A duly executed copy of the Supplement and
all instruments and documents contemplated thereby.
(ii) EVIDENCE OF AUTHORITY. Such certified board resolutions,
certificates of incumbency, and other evidence that CoBank may require that the
Supplement, all instruments and documents executed in connection therewith, and,
in the case of initial Supplement hereto, this agreement and all instruments and
documents executed in connection herewith, have been duly authorized and
executed.
(iii) FEES AND OTHER CHARGES. All fees and other charges
provided for herein or in the Supplement.
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(iv) EVIDENCE OF PERFECTION, ETC. Such evidence as CoBank may
require that CoBank has a duly perfected first priority lien on all security for
the Company's obligations, and that the Company is in compliance with Section
8(D) hereof.
(C) CONDITIONS TO EACH LOAN. CoBank's obligation under each
Supplement to make any loan to the Company thereunder is subject to the
condition that no "Event of Default" (as defined in Section 11 hereof) or event
which with the giving of notice and/or the passage of time would become an Event
of Default hereunder (a "Potential Default"), shall have occurred and be
continuing.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
(A) THIS AGREEMENT. The Company represents and warrants to CoBank
that as of the date of this agreement:
(i) COMPLIANCE. The Company and, to the extent contemplated
hereunder, each "Subsidiary" (as defined below), is in compliance with all of
the terms of this agreement, and no Event of Default or Potential Default exists
hereunder.
(ii) SUBSIDIARIES. The Company has the following
"Subsidiary-(ies)" (as defined below): Diamond Walnut Capital Trust, Diamond of
Europe, and Diamond Nut Company of California, Inc. For purposes hereof, a
"Subsidiary" shall mean a corporation of which shares of stock having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation are owned, directly or indirectly, by the Company.
(B) EACH SUPPLEMENT. The execution by the Company of each
Supplement hereto shall constitute a representation and warranty to CoBank that:
(i) APPLICATIONS. Each representation and warranty and all
information set forth in any application or other documents submitted in
connection with, or to induce CoBank to enter into, such Supplement, is correct
in all material respects as of the date of the Supplement.
(ii) CONFLICTING AGREEMENTS, ETC. This agreement, the Supplements,
and all security and other instruments and documents relating hereto and thereto
(collectively, at any time, the "Loan Documents"), do not conflict with, or
require the consent of any party to, any other agreement to which the Company is
a party or by which it or its property may be bound or affected, and do not
conflict with any provision of the Company's bylaws, articles of incorporation,
or other organizational documents.
(iii) COMPLIANCE. The Company and, to the extent contemplated
hereunder, each Subsidiary, is in compliance with all of the terms of the Loan
Documents (including, without limitation, Section 8(A) of this agreement on
eligibility to borrow from CoBank).
(iv) BINDING AGREEMENT. The Loan Documents create legal, valid, and
binding obligations of the Company which are enforceable in accordance with
their terms, except to the extent that enforcement may be limited by applicable
bankruptcy, insolvency, or similar laws affecting creditors' rights generally.
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SECTION 8. AFFIRMATIVE COVENANTS. Unless otherwise agreed to in writing by
CoBank while this agreement is in effect, the Company agrees to and with respect
to Subsections 8(B) through 8(G) and 8(I-I)(vii) hereof, agrees to cause each
Subsidiary to:
(A) ELIGIBILITY. Maintain its status as an entity eligible to
borrow from CoBank.
(B) CORPORATE EXISTENCE, LICENSES, ETC. (i) Preserve and keep in
full force and effect its existence and good standing in the jurisdiction of its
incorporation or formation; (ii) qualify and remain qualified to transact
business in all jurisdictions where such qualification is required; and (iii)
obtain and maintain all licenses, certificates, permits, authorizations,
approvals, and the like which are material to the conduct of its business or
required by law, rule, regulation, ordinance, code, order, and the like
(collectively, "Laws").
(C) COMPLIANCE WITH LAWS. Comply in all material respects with all
applicable Laws, including, without limitation, all Laws relating to
environmental protection and any patron or member investment program that it may
have. In addition, the Company agrees to cause all persons occupying or present
on any of its properties, and to cause each Subsidiary to cause all persons
occupying or present on any of its properties, to comply in all material
respects with all environmental protection Laws.
(D) INSURANCE. Maintain insurance with insurance companies or
associations acceptable to CoBank in such amounts and covering such risks as are
usually carried by companies engaged in the same or similar business and
similarly situated, and make such increases in the type or amount of coverage as
CoBank may request. All such policies insuring any collateral for the Company's
obligations to CoBank shall have mortgagee or lender loss payable clauses or
endorsements in form and content acceptable to CoBank. At CoBank's request, all
policies (or such other proof of compliance with this Subsection as may be
satisfactory to CoBank) shall be delivered to CoBank.
(E) PROPERTY MAINTENANCE. Maintain all of its property that is
necessary to or useful in the proper conduct of its. business in good working
condition, ordinary wear and tear excepted.
(F) BOOKS AND RECORDS. Keep adequate records and books of account
in which complete entries will be made in accordance with generally accepted
accounting principles ("GAAP") consistently applied.
(G) INSPECTION. Permit CoBank or its agents, upon reasonable
notice and during normal business hours or at such other times as the parties
may agree, to examine its properties, books, and records, and to discuss its
affairs, finances, and accounts, with its respective officers, directors,
employees, and independent certified public accountants.
(H) REPORTS AND NOTICES. Furnish to CoBank:
(i) ANNUAL FINANCIAL STATEMENTS. As soon as available, but
in no event more than 120 days after the end of each fiscal year of the Company
occurring during the term hereof, annual consolidated and consolidating
financial statements of the Company and its consolidated Subsidiaries, if any,
prepared in accordance with GAAP consistently applied. Such
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financial statements shall: (a) be audited by independent certified public
accountants selected by the Company and acceptable to CoBank; be accompanied by
a report of such accountants containing an opinion thereon acceptable to CoBank;
be prepared in reasonable detail and in comparative form; and (d) include a
balance sheet, a statement of income, a statement of retained earnings, a
statement of cash flows, and all notes and schedules relating thereto.
(ii) INTERIM FINANCIAL STATEMENTS. As soon as available, but
in no event more than 45 days after the end of each fiscal quarter of the
Company (other than the last quarter in each fiscal year of the Company), a
consolidated balance sheet of the Company and its consolidated Subsidiaries, if
any, as of the end of such fiscal quarter, a consolidated statement of income
for the Company and its consolidated Subsidiaries, if any, for such period and
for the period year to date, and such other interim statements as CoBank may
specifically request, all prepared in reasonable detail and in comparative form
in. accordance with GAAP consistently applied and if required by written notice
from CoBank, certified by an authorized officer or employee of the Company
acceptable to CoBank.
(iii) NOTICE OF DEFAULT. Promptly after becoming aware
thereof, notice of the occurrence of an Event of Default or a Potential Default.
(iv) NOTICE OF NON-ENVIRONMENTAL LITIGATION. Promptly after
the commencement thereof, notice of the commencement of all actions, suits or
proceedings before any court, arbitrator, or governmental department,
commission, board, bureau, agency, or instrumentality affecting the Company or
any Subsidiary which, if determined adversely to the Company or any such
Subsidiary, could have a material adverse effect on the financial condition,
properties, profits, or operations of the Company or any such Subsidiary.
(v) NOTICE OF ENVIRONMENTAL LITIGATION, ETC. Promptly after
receipt thereof, notice of the receipt of all pleadings, orders, complaints,
indictments, or any other communication alleging a condition that may require
the Company or any Subsidiary to undertake or to contribute to a cleanup or
other response under environmental Laws, or which seek penalties, damages,
injunctive relief or criminal sanctions related to alleged violations of such
Laws, or which claim personal injury or property damage to any person as a
result of environmental factors or conditions.
(vi) BYLAWS AND ARTICLES. Promptly after any change in the
Company's bylaws or articles of incorporation (or like documents), copies of all
such changes, certified by the Company's Secretary.
(vii) COMPLIANCE CERTIFICATE. Together with each set of
financial statements furnished to CoBank pursuant to Section 8(H) hereof, a
certificate of an officer or employee of the Company acceptable to CoBank
setting forth calculations showing compliance with the financial covenants set
forth in Section 10 hereof.
(viii) OTHER INFORMATION. Such other information regarding the
condition or operations, financial or otherwise, of the Company or any
Subsidiary as CoBank may from time to time reasonably request, including but not
limited to copies of all pleadings, notices, and communications referred to in
Subsections 8(H)(iv) and (v) above.
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(I) GUARANTEE AND RELATED DOCUMENTS. The Company agrees that on or
before April 15, 2004, it will provide to CoBank the following items: (1) A
guarantee of payment from. Diamond Nut Company of California, Inc. in a form and
with such content agreeable to CoBank in its sole discretion; and (2) certified
board resolutions, evidence of incumbency, and other evidence as CoBank may
require that the guarantee and all instruments and documents executed in
connection therewith have been duly authorized and executed.
SECTION 9. NEGATIVE COVENANTS. Unless otherwise weed to in writing by
CoBank, while this agreement is in effect the Company will not and, with respect
to Subsections 9(B) through 9(G) hereof, will not permit its Subsidiaries to:
(A) BORROWINGS. Create, incur, assume, or allow to exist, directly
or indirectly, any indebtedness or liability for borrowed money (including trade
or bankers' acceptances), letters of credit, or the deferred purchase price of
property or services (including capitalized leases), except for: (i) debt to
CoBank; (ii) accounts payable to trade creditors incurred in the ordinary course
of business; (iii) current operating liabilities (other than for borrowed money)
incurred in the ordinary course of business; (iv) debt of the Company to other
lenders maturing within one year of the date created, provided that not more
than $25,000,000.00 of such debt is outstanding at any time and that the maximum
amount of all short-term indebtedness that may be outstanding at any one time to
such lenders and to CoBank, may not exceed $75,000,000.00; and (v) debt of the
Company to other lenders or finance companies in an aggregate amount not to
exceed $ 10,000,000.00.
(B) LIENS. Create, incur, assume, or allow to exist any mortgage,
deed of trust, pledge, lien (including the lien of an attachment, judgment, or
execution), security interest, or other encumbrance of any kind upon any of its
property, real or personal (collectively, "Liens"). The foregoing restrictions
shall not apply to: (i) Liens in favor of CoBank; (ii) Liens for taxes,
assessments, or governmental charges that are not past due; (iii) Liens and
deposits under workers' compensation, unemployment insurance, and social
security Laws; (iv) Liens and deposits to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), and like
obligations arising in the ordinary course of business as conducted on the date
hereof; (v) Liens imposed by Law in favor of mechanics, materialmen,
warehousemen, and like persons that secure obligations that are not past due;
and (vi) easements, rights-of-way, restrictions, and other similar encumbrances
which, in the aggregate, do not materially interfere with the occupation, use,
and enjoyment of the property or assets encumbered thereby in the normal course
of its business or materially impair the value of the property subject thereto.
(C) MERGERS, ACQUISITIONS, ETC. Merge or consolidate with any
other entity or acquire all or a material part of the assets of any person or
entity, or faun or create any new Subsidiary or affiliate, or commence
operations under any other name, organization, or entity, including any joint
venture.
(D) TRANSFER OF ASSETS. Sell, transfer, lease, or otherwise
dispose of any of its assets, except in the ordinary course of business.
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(E) LOANS. Lend or advance money, credit, or property to any
person or entity, except for: (i) trade credit extended in the ordinary course
of business; and (ii) loans or advances by the Company to its Subsidiaries.
(F) CONTINGENT LIABILITIES. Assume, guarantee, become liable as a
surety, endorse, contingently agree to purchase, or otherwise be or become
liable, directly or indirectly (including, but not limited to, by means of a
maintenance agreement, an asset or stock purchase agreement, or any other
agreement designed to ensure any creditor against loss), for or on account of
the obligation of any person or entity, except by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of the Company's business.
(G) CHANGE IN BUSINESS. Engage in any business activities or
operations substantially different from or unrelated to the Company's present
business activities or operations.
(H) OPERATING LEASES. Create, incur, assume, or permit to exist
any obligation as lessee under operating leases for the rental or hire of any
real or personal property except railroad leases and except leases which do not
in the aggregate require the Company to make scheduled payments to the lessors
in any fiscal year of the Company in excess of $3,500,000.00.
(I) PAYMENTS TO MEMBERS. Make, directly or indirectly. any payment
(in cash or kind) to any of Its grower members unless, after giving effect
thereto, the Company in the exercise of sound business judgment reasonably
believes that the Company will be able to make timely payment of all principal,
interest or other obligation under the terms of this Agreement and any
Supplements hereto.
SECTION 10. FINANCIAL COVENANTS. Unless otherwise agreed to in writing,
while this agreement is in effect:
(A) WORKING CAPITAL. The Company and its consolidated Subsidiaries
will have at the end of each fiscal quarter of the Company an excess of
consolidated current assets over consolidated current liabilities (both as
determined in accordance with GAAP consistently applied) of not less than
S40,000,000.00.
(B) NET WORTH. The Company and its consolidated Subsidiaries will
have at the end of each fiscal quarter an excess of consolidated total assets
over consolidated total liabilities (both as determined in accordance with GAAP
consistently applied) of not less than $35,000,000.00. For purposes of
calculating net worth under this Subsection 10(B), CoBank and the Company agree
that Cumulative Recourse Offered Preferred Securities ("CROPS") will not be
deemed liabilities.
(C) LONG-TERM DEBT TO NET WORTH. The Company and its consolidated
Subsidiaries will have a ratio of consolidated long-term debt (less the current
portion thereof) to consolidated net worth (both as determined in accordance
with GAAP consistently applied) of not more than: (i) .70 to 1 at the end of
each fiscal quarter of the Company through the quarters ending July 31, 2005;
and (ii) .65 to 1 at the end of each fiscal quarter thereafter. The definition
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of net worth for purposes of the Section 10(C) shall be as modified by the last
sentence of Section 10(B) above.
SECTION 11. EVENTS OF DEFAULT. Each of the following shall constitute an
"Event of Default" under this agreement:
(A) PAYMENT DEFAULT. The Company should fail to make any payment
to, or to purchase any equity in, CoBank when due.
(B) REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made or deemed made by the Company herein or in any Supplement, application,
agreement, certificate, or other document related to or furnished in connection
with this agreement or any Supplement, shall prove to have been false or
misleading in any material respect on or as of the date made or deemed made.
(C) CERTAIN AFFIRMATIVE COVENANTS. The Company or, to the extent
required hereunder, any Subsidiary should fail to perform or comply with
Sections 8(A) through 8(H)(ii), 8(H)(vi), 8(H)(vii), 8(I) or any reporting
covenant set forth in any Supplement hereto, and such failure continues for 15
days after written notice thereof shall have been delivered by CoBank to the
Company.
(D) OTHER COVENANTS AND AGREEMENTS. The Company or, to the extent
required hereunder, any Subsidiary should fail to perform or comply with any
other covenant or agreement contained herein or in any other Loan Document or
shall use the proceeds of any loan for an unauthorized purpose.
(E) CROSS-DEFAULT. The Company should, after any applicable grace
period, breach or be in default under the terms of any other agreement between
the Company and CoBank.
(F) OTHER INDEBTEDNESS. The Company or any Subsidiary should fail
to pay when due any material indebtedness to any other person or entity for
borrowed money or any long-term obligation for the deferred purchase price of
property (including any capitalized lease), or any other event occurs which,
under any agreement or instrument relating to such indebtedness or obligation,
has the effect of accelerating or permitting the acceleration of such
indebtedness or obligation, whether or not such indebtedness or obligation is
actually accelerated or the right to accelerate is conditioned on the giving of
notice, the passage of time, or otherwise.
(G) JUDGMENTS. A judgment, decree, or order for the payment of
money shall be rendered against the Company or any Subsidiary and either: (i)
enforcement proceedings shall have been commenced; (ii) a Lien prohibited under
Section 9(B) hereof shall have been obtained; or (iii.) such judgment, decree,
or order shall continue unsatisfied and in effect for a period of 20 consecutive
days without being vacated, discharged, satisfied, or stayed pending appeal.
(H) INSOLVENCY, ETC. The Company or any Subsidiary shall: (i)
become insolvent or shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they come due; or (ii) suspend its
business operations or a material part thereof or make an assignment for the
benefit of creditors; or (iii) apply for, consent to, or acquiesce in the
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appointment of a trustee, receiver, or other custodian for it or any of its
property or, in the absence of such application, consent, or acquiescence, a
trustee, receiver, or other custodian is so appointed; or (iv) commence or have
commenced against it any proceeding under any bankruptcy, reorganization,
arrangement, readjustment of debt, dissolution, or liquidation Law of any
jurisdiction.
(I) MATERIAL ADVERSE CHANGE. Any material adverse change occurs,
as reasonably determined by CoBank, in the Company's financial condition,
results of operation, or ability to perform its obligations hereunder or under
any instrument or document contemplated hereby.
(J) GUARANTEES, ETC. Any guarantee, suretyship, subordination
agreement, maintenance agreement, or other agreement furnished in connection
with the Company's obligations hereunder and under any Supplement (including the
Continuing Guarantee of Diamond Nut Company of California, Inc. dated February
23. 2004) shall, at any time, cease to be in full force and effect, or shall be
revoked or declared null and void, or the validity or enforceability thereof
shall be contested by the guarantor, surety or other maker thereof (the
"Guarantor"), or the Guarantor shall deny any further liability or obligation
thereunder, or shall fail to perform its obligations thereunder, or any
representation or warranty set forth therein shall be breached, or the Guarantor
shall breach or be in default under the terms of any other agreement with CoBank
(including any loan agreement or security agreement) or a default set forth in
Subsections (F) through (I) hereof shall occur with respect to the Guarantor.
SECTION 12. REMEDIES. Upon the occurrence and during the continuance of an
Event of Default or any Potential Default, CoBank shall have no obligation to
continue to extend credit to the Company and may discontinue doing so at any
time without prior notice. For all purposes hereof, the term "Potential Default"
means the occurrence of any event which with the passage of time or the giving
of notice or both would become an Event of Default. In addition, upon the
occurrence and during the continuance of any Event of Default, CoBank may, upon
notice to the Company, terminate any commitment and declare the entire unpaid
principal balance of the loans, all accrued interest thereon, and all other
amounts payable under this agreement, all Supplements, and the other Loan
Documents to be immediately due and payable. Upon such a declaration, the unpaid
principal balance of the loans and all such other amounts shall become
immediately due and payable, without protest, presentment, demand, or further
notice of any kind, all of which are hereby expressly waived by the Company. In
addition, upon such an acceleration:
(A) ENFORCEMENT. CoBank may proceed to protect, exercise, and
enforce such rights and remedies as may be provided by this agreement, any other
Loan Document or under Law. Each and every one of such rights and remedies shall
be cumulative and may be exercised from time to time, and no failure on the part
of CoBank to exercise, and no delay in exercising, any right or remedy shall
operate as a waiver thereof, and no single or partial exercise of any right or
remedy shall preclude any other or future exercise thereof, or the exercise of
any other right. Without limiting the foregoing. CoBank may hold anchor set off
and apply against the Company's obligations to CoBank the proceeds of any equity
in CoBank, any cash collateral held by CoBank, or any balances held by CoBank
for the Company's account (whether or not such balances are then due).
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(B) APPLICATION OF FUNDS. CoBank may apply all payments received
by it to the Company's obligations to CoBank in such order and manner as CoBank
may elect in its sole discretion.
In addition to the rights and remedies set forth above: (i) if the Company fails
to purchase any equity in CoBank when required or fails to make any payment to
CoBank when due, then at CoBank's option in each instance, such payment shall
bear interest from the date due to the date paid at 4% per annum in excess of
the rate(s) of interest that would otherwise be in effect on that loan; and (ii)
after the maturity of any loan (whether as a result of acceleration or
otherwise), the unpaid principal balance of such loan (including without
limitation, principal, interest, fees and expenses) shall automatically bear
interest at 4% per annum in excess of the rate(s) of interest that would
otherwise be in effect on that loan. All interest provided for herein shall be
payable on demand and shall be calculated on the basis of a year consisting of
360 days.
SECTION 13. BROKEN FUNDING SURCHARGE. Notwithstanding any provision
contained in any Supplement giving the Company the right to repay any loan prior
to the date it would otherwise be due and payable, the Company agrees to provide
three Business Days' prior written notice for any prepayment of a fixed rate
balance and that in the event it repays any fixed rate balance prior to its
scheduled due date or prior to the last day of the fixed rate period applicable
thereto (whether such payment is made voluntarily, as a result of an
acceleration, or otherwise), the Company will pay to CoBank a surcharge in an
amount equal to the greater of: (i) an amount which would result in CoBank being
made whole (on a present value basis) for the actual or imputed funding losses
incurred by CoBank as a result thereof; or (ii) $300.00. Notwithstanding the
foregoing, in the event any fixed rate balance is repaid as a result of the
Company refinancing the loan with another lender or by other means, then in lieu
of the foregoing, the Company shall pay to CoBank a surcharge in an amount
sufficient (on a present value basis) to enable CoBank to maintain the yield it
would have earned during the fixed rate period on the amount repaid. Such
surcharges will be calculated in accordance with methodology established by
CoBank (a copy of which will be made available to the Company upon request).
SECTION 14. COMPLETE AGREEMENT, AMENDMENTS. This agreement, all
Supplements, and all other instruments and documents contemplated hereby and
thereby, are intended by the parties to be a complete and final expression of
their agreement. No amendment, modification, or waiver of any provision hereof
or thereof and no consent to any departure by the Company herefrom or therefrom,
shall be effective unless approved by CoBank and contained in a writing signed
by or on behalf of CoBank, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. In
the event this agreement is amended or restated, each such amendment or
restatement shall be applicable to all Supplements hereto.
SECTION 15. OTHER TYPES OF CREDIT. From time to time, CoBank may issue
letters of credit or extend other types of credit to or for the account of the
Company. In the event the parties desire to do so under the terms of this
agreement, such extensions of credit may be set forth in any Supplement hereto
and this agreement shall be applicable thereto.
SECTION 16. APPLICABLE LAW. Except to the extent governed by applicable
federal law, this agreement and each Supplement shall be governed by and
construed in accordance with the laws of the State of Colorado, without
reference to choice of law doctrine.
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SECTION 17. NOTICES. All notices hereunder shall he in writing and shall
be deemed to be duly given upon delivery if personally delivered or sent by
telegram or facsimile transmission, or three days after mailing if sent by
express, certified or registered mail, to the parties at the following addresses
(or such other address for a party as shall be specified by like notice):
If to CoBank, as follows: If to the Company, as follows:
For general correspondence purposes: Diamond Walnut Growers, Inc.
X.X. Xxx 0000 X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000-0000 Xxxxxxxx, Xxxxxxxxxx 00000-0000
For direct delivery purposes, when desired:
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Credit Information Services Attention: Vice President/CFO
Fax No. (000) 000-0000 Fax No. (000) 000-0000
SECTION 18. TAXES AND EXPENSES. To the extent allowed by law, the Company
agrees to pay all reasonable out-of-pocket costs and expenses (including the
fees and expenses of counsel retained or employed by CoBank) incurred by CoBank
and any participants from CoBank in connection with the origination,
administration, collection, and enforcement of this agreement and the other Loan
Documents, including, without limitation, all costs and expenses incurred in
perfecting, maintaining, determining the priority of, and releasing any security
for the Company's obligations to CoBank, and any stamp, intangible, transfer, or
like tax payable in connection with this agreement or any other Loan Document.
SECTION 19. EFFECTIVENESS AND SEVERABILITY. This agreement shall continue
in effect until: (i) all indebtedness and obligations of the Company under this
agreement, all Supplements, and all other Loan Documents shall have been paid or
satisfied; (ii) CoBank has no commitment to extend credit to or for the account
of the Company under any Supplement; and (iii) either party sends written notice
to the other terminating this agreement. Any provision of this agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or unenforceability without invalidating the remaining provisions hereof or
thereof.
SECTION 20. SUCCESSORS AND ASSIGNS. This agreement, each Supplement, and
the other Loan Documents shall be binding upon and inure to the benefit of the
Company and CoBank and their respective successors and assigns, except that the
Company may not assign or transfer its rights or obligations under this
agreement, any Supplement or any other Loan Document without the prior written
consent of CoBank.
SECTION 21. PARTICIPATIONS, ETC. From time to time, CoBank may sell to one
or more banks, financial institutions or other lenders a participation in one or
more of the loans or other extensions of credit made pursuant to this agreement.
However, no such participation shall relieve CoBank of any commitment made to
the Company under any Supplement hereto. In connection with the foregoing,
CoBank may disclose information concerning the Company and its Subsidiaries to
any participant or prospective participant, provided that such participant or
Master Loan Agreement RIE089 - 12 -
prospective participant agrees to keep such information confidential. CoBank
agrees that all Loans that are made by CoBank and that are retained for its own
account and are not included in a sale of participation interest shall be
entitled to patronage distributions in accordance with the bylaws of CoBank and
its practices and procedures related to patronage distribution. Accordingly, all
Loans that are included in a sale of participation interest shall not be
entitled to patronage distributions. A sale of participation interest may
include certain, voting rights of the participants regarding the loans hereunder
(including without limitation the administration, servicing and enforcement
thereof). CoBank agrees to give written notification to the Company of any sale
of participation interests.
SECTION 22. FOREIGN EXCHANGE. At the Company's request, CoBank may, but
shall not be obligated to, purchase from and sell to the Company foreign
currency in such amounts and with such settlement dates (including dates
extending beyond the term of the Commitment) as may be agreeable to CoBank in
its sole discretion in each instance (a "TX Transaction"). Each FX Transaction
shall be evidenced by such documentation as CoBank and the Company may Agree and
shall reduce the amount available under the Commitment by 20% of the face amount
of the FX Transaction. If on any settlement date, the Company fails to remit
sufficient funds to CoBank to meet its obligations, the Company shall be deemed
to have requested a loan (in the U.S. dollar equivalent) from CoBank bearing
interest at the variable rate option, as of the settlement date, the proceeds of
which shall be used to pay such obligations. Such requested loan shall only be
made upon approval of CoBank in its sole discretion in each instance. If such
loan is not made by CoBank for any reason, the unpaid amount of such obligations
(together with any damages incurred by CoBank) shall be and remain immediately
due and payable to CoBank and shall bear interest until paid at the variable
rate option plus 4% per annum.
IN WITNESS WHEREOF, the parties have caused this agreement to be executed
by their duly authorized officers as of the date shown above.
COBANK, ACB DIAMOND WALNUT GROWERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxx
----------------------------- -----------------------------------
Title: Assistant Corporate Title: V.P. CFO
-------------------------- --------------------------------
Secretary
--------------------------
Amendment No. R1E089A
AMENDMENT
THIS AMENDMENT is entered into as of November 23, 2004, between COBANK,
ACB ("CoBank") and DIAMOND WALNUT GROWERS, INC., STOCKTON, CALIFORNIA (the
"Company").
BACKGROUND
CoBank and the Company are parties to a Master Loan Agreement dated
February 23, 2004 (such agreement, as previously amended, is hereinafter
referred to as the "MLA"). CoBank and the Company now desire to amend the MLA.
For that reason, and for valuable consideration (the receipt and sufficiency of
which are hereby acknowledged), CoBank and the Company agree as follows:
1. Subsection 9(A) of the MLA is hereby amended and restated to read as
follows:
SECTION 9. NEGATIVE COVENANTS. Unless otherwise agreed to in writing by
CoBank, while this agreement is in effect the Company will not and, with
respect to Subsections 9(B) through 9(G) hereof, will not permit its
Subsidiaries to:
(A) BORROWINGS. Create, incur, assume, or allow to exist, directly
or indirectly, any indebtedness or liability for borrowed money (including
trade or bankers' acceptances), letters of credit, or the deferred
purchase price of property or services (including capitalized leases),
except for: (i) debt to CoBank; (ii) accounts payable to trade creditors
incurred in the ordinary course of business; (iii) current operating
liabilities (other than for borrowed money) incurred in the ordinary
course of business; (iv) debt of the Company to other lenders maturing
within one year of the date created, provided that not more than
$35,000,000.00 of such debt is outstanding at any time and that the
maximum amount of all short term indebtedness that may be outstanding at
any one time to such lenders and to CoBank, may not exceed $95,000,000.00;
and (v) debt of the Company to other lenders or finance companies in an
aggregate amount not to exceed $10,000,000.00.
2. Except as set forth in this amendment, the MLA, including all amendments
thereto, shall continue in full force and effect as written.
IN WITNESS WHEREOF, the parties have caused this amendment to be executed
by their duly authorized officers as of the date shown above.
DIAMOND WALNUT GROWERS, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------
Title: V.P. Finance / Controller
--------------------------
CONTINUING GUARANTEE
1. ABSOLUTE GUARANTEE. For valuable consideration and to induce CoBank,
ACB ("CoBank") to extend a loan or loans to DIAMOND WALNUT GROWERS, INC.
("Borrower"), of which the undersigned, DIAMOND NUT COMPANY OF CALIFORNIA, INC.
("Guarantor") is a wholly-owned subsidiary, the Guarantor unconditionally and
absolutely guarantees and promises to pay to CoBank, or order, on demand, in
lawful money of the United States, any and all Indebtedness of Borrower to
CoBank. The word "Indebtedness" is used herein in its more comprehensive sense,
and includes any and all advances, debts, obligations and liabilities of
Borrower, including but not limited to all principal, interest, fees, expenses
and stock subscription charges, heretofore, now or hereafter made, incurred or
created, whether voluntary or involuntary and however arising, whether due or
not due, absolute or contingent, liquidated or unliquidated, determined or
undetermined, and whether Borrower may be liable individually or jointly with
others, or whether recovery upon such Indebtedness may be or hereafter become
barred by any statute of limitation, or whether such Indebtedness may be or
hereafter become otherwise unenforceable.
2. CONTINUING GUARANTEE. No termination by Guarantor shall be effective
except by notice sent to CoBank by registered mail naming a termination date
effective not less than ninety (90) days after the receipt of such notice by
CoBank. No such termination shall affect (i) any Indebtedness of Borrower
incurred prior to the effective date of termination or (ii) any Indebtedness for
interest, fees, expenses and/or stock subscription charges incurred after
termination related to any Indebtedness outstanding on the effective date of
termination.
3. GUARANTEE OF PAYMENT. This continuing guarantee is a guarantee of
payment and not of collection. The obligations hereunder are joint and several,
and independent upon the Indebtedness of Borrower, and a separate action or
actions may be brought and prosecuted against Guarantor whether action is
brought against Borrower or whether Borrower be joined in any such action or
actions; and Guarantor waives the benefit of any statutes of limitations
affecting its liability hereunder or the enforcement thereof.
4. AUTHORITIES OF COBANK. Guarantor authorizes CoBank, without notice
or demand and without affecting liability hereunder, from time to time, to (a)
grant additional credit to Borrower, and renew, compromise, extend, accelerate
or otherwise change the time for payment of, or otherwise change the terms of,
the Indebtedness or any part thereof, including increase or decrease of the rate
of interest thereon; (b) take and held security for the payment of this
Guarantee or the Indebtedness guaranteed, and exchange, enforce, waive and
release any such security; (c) apply such security and direct the order or
manner of sale thereof as CoBank in its discretion may determine; and (d)
release or substitute any one or more endorsers or guarantors of the
Indebtedness.
5. WAIVERS. Guarantor waives any right to require CoBank, as a
condition to proceeding against Guarantor, to (a) proceed against Borrower or
any other person; (b) proceed against or exhaust any security held from Borrower
or Guarantor; or (c) pursue any other remedy in CoBank's power whatsoever.
Guarantor waives any defense arising by reason of any disability or other
defense or counter-claim that the Borrower may assert on the underlying debt,
including but not limited to failure of consideration, breach of warranty,
fraud, statute of frauds,
bankruptcy, statute of limitations, lender liability, accord and satisfaction,
and usury or by reason of the cessation from any cause whatsoever of the
liability of Borrower. Guarantor waives the pleading or assertion of any defense
based on the failure of CoBank to keep Guarantor informed of the financial and
business status of Borrower, it being expressly acknowledged by Guarantor that
it is Guarantor's responsibility to keep so informed. Until all Indebtedness of
Borrower to CoBank shall have been paid in full, Guarantor shall have no right
of subrogation, and waives any right to enforce any remedy which CoBank now has,
or may hereafter have against Borrower, and waives any benefit of and any right
to participate in any security now or hereafter held by CoBank. Guarantor waives
all setoffs and counterclaims, and all presentments, demands for performance,
notices of nonperformance, protests, notices of dishonor, notices of sale of
foreclosure of any security for the payment of the Indebtedness, and notices of
acceptance of this Guarantee and of the existence, creation, or incurring or new
or additional Indebtedness.
GUARANTOR WARRANTS AND AGREES THAT EACH OF THE WAIVERS SET FORTH IN TIES
AGREEMENT IS MADE WITH GUARANTOR'S FULL KNOWLEDGE OF ITS SIGNIFICANCE AND
CONSEQUENCES AND THAT, UNDER THE CIRCUMSTANCES, THE WAIVERS ARE REASONABLE AND
NOT CONTRARY TO PUBLIC POLICY OR LAW. IF ANY SUCH WAIVER IS DETERMINED TO BE
CONTRARY TO ANY APPLICABLE LAW OR PUBLIC POLICY, SUCH WAIVER SHALL BE EFFECTIVE
ONLY TO THE EXTENT PERMITTED BY LAW OR PUBLIC POLICY.
6. LIEN; RIGHT OF SETOFF. In addition to all liens upon, and all rights
of setoff against the monies, securities or other property of Guarantor given to
CoBank by law or by contract, CoBank shall have a lien upon and a right to
setoff against all monies securities and other property of Guarantor now or
hereafter in the possession of or on deposit with CoBank, whether held in a
general or special account of deposit, or for safekeeping or otherwise; and
every such lien and right of setoff may be exercised without demand upon or
notice to Guarantor. No lien or right of setoff shall be deemed to have been
waived by any act or conduct on the part of CoBank, or by any neglect to
exercise such right of setoff or to enforce such lien, or by any delay in so
doing, and every right of setoff and lien shall continue in full force and
effect until such right of setoff or lien is specifically waived or released by
an instrument in writing executed by CoBank.
7. NO WAIVER. No exercise or nonexercise of any right hereby given
CoBank, no dealing by CoBank with Borrower or any other Guarantor, no change,
impairment, or suspension of any of CoBank's rights or remedies, shall in any
way affect any of the obligations of Guarantor hereunder or any security
furnished by Guarantor or give Guarantor any recourse against CoBank. The
Guarantor represents to CoBank that he is now and will be completely familiar
with the business, operation, and condition of Borrower, and Guarantor waives
any right to require CoBank to notify Guarantor of any facts concerning
Borrower, unknown to Guarantor, material or otherwise, which might affect the
relationship of CoBank, Guarantor, and Borrower, or which might cause Guarantor
to give CoBank notice of termination of this Guarantee as herein provided.
8. SUBORDINATION. Any Indebtedness of Borrower to Guarantor now or
hereafter held by Guarantor is hereby subordinated to the Indebtedness of
Borrower to CoBank; and such Indebtedness of Borrower to Guarantor, if CoBank so
requests, shall be collected, enforced and received by Guarantor as trustee for
CoBank and be paid over to CoBank on account of the
Indebtedness of Borrower to CoBank but without reducing or affecting in any
manner the liability of Guarantor under the other provisions of this Guarantee.
9. CORPORATE AUTHORITY. Although Borrower is a corporation, it is not
necessary for CoBank to inquire into the powers of Borrower, or the officers,
directors, or agents acting or purporting to act on its behalf, and any
Indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
10. ATTORNEYS' FEES. Guarantor agrees to pay the attorneys' fees of CoBank
and all other costs and expenses which may be incurred by CoBank in the
enforcement of this Guarantee. This Guarantee shall be interpreted and enforced
in accordance with the laws of the State of Colorado.
11. REMEDIES CUMULATIVE. CoBank's rights under this Guarantee are
cumulative and not alternative, and shall not be exhausted by CoBank's exercise
of any one or more rights hereunder, or otherwise, or by any number of
successive actions, unless and until all obligations of Borrower and Guarantor
have been paid or performed. The liability under this Guarantee shall continue
notwithstanding the incapacity or disability of Guarantor, and its benefits
shall inure to CoBank's successors and assigns. CoBank may assign this
Guarantee, in whole or in part, without notice to Guarantor. Guarantor waives
all exemptions and all setoffs and counterclaims. Only to the extent that this
Guarantee is inconsistent with any prior guarantee given by Guarantor to CoBank,
or contains additional provisions, does this Guarantee supersede such prior
guarantees; otherwise, such prior guarantees remain in full force and effect.
12. REINSTATEMENT OF PAYMENT. If any payment received by CoBank and
applied to the Indebtedness is subsequently set aside, recovered, rescinded, or
required to be returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of Borrower), the Indebtedness to which
such payment was applied shall for the purposes of this continuing guarantee be
deemed to have continued in existence, and this continuing guarantee shall be
enforceable as to such Indebtedness as fully as if such applications had never
been made.
13. INDEMNIFICATION. Guarantor expressly waives any and all rights of
subrogation, reimbursement, indemnity, exoneration, contribution or any other
claim which it may now or hereafter have against Borrower or any other person
directly or contingently liable for the Indebtedness guaranteed hereunder, or
against or with respect to Borrower's property, including without limitation,
any property securing its Indebtedness to CoBank, arising from the existence or
performance of this Guarantee. In furtherance, and not in limitation, of the
preceding waiver, Guarantor agrees that any payment to CoBank by guarantor
pursuant to this Guarantee shall be deemed to be a contribution to the capital
of Borrower or other obligated party and such payment shall not cause Guarantor
to be a creditor of Borrower or any other obligated party. In addition to, and
not in substitution for, any other rights granted to CoBank by this Guarantee,
including but not limited to any rights set forth in Paragraph 11 above, in the
event that a bankruptcy court determines that any monies paid by Borrower to
CoBank are avoidable preferences because they were made for the benefit of
Guarantor, then Guarantor shall indemnify and hold CoBank harmless from any
losses, including, but not limited to all costs and expenses, including
reasonable attorneys' fees, which CoBank may incur as a result of such
determination.
14. RIGHT OF FORECLOSURE. The Guarantor agrees that if all or a portion of
the Indebtedness is, at any time, secured by a deed of trust or mortgage
covering interests in real property, CoBank, in its sole discretion, without
notice or demand, and without affecting the liability of the Guarantor, may
foreclose the deed of trust or mortgage, and the interest in real property,
secured thereby by nonjudicial sale; and the Guarantor hereby waives any defense
to the recovery by CoBank against the Guarantor of any deficiency after a
nonjudicial sale, and the undersigned expressly waive any defense or benefit
that may be derived from California Code of Civil Procedure Section 580a or
580d, or similar statute in another jurisdiction.
15. AMENDMENT. Neither this Agreement, nor any provision hereof, may be
amended, modified, waived, or discharged except by an instrument in writing duly
signed by, or on behalf of, CoBank.
16. SEVERABILITY. In case any right of CoBank herein shall be held to be
invalid, illegal, or unenforceable, such invalidity, illegality and/or
unenforceability shall not affect any other right granted hereby.
17. GUARANTOR'S REPRESENTATIONS. Guarantor represents and warrants that:
(a) no representations or agreements of any kind have been made to the Guarantor
which would limit or qualify in any way the terms of this Guarantee; (b) the
Guarantor has not and will not, without CoBank's prior written consent, sell,
lease, assign, encumber, hypothecate, transfer or otherwise dispose of any of
the Guarantor's assets, or any interest therein, other than in the ordinary
course of business; (c) CoBank has made no representation to the Guarantor as to
the creditworthiness of the Borrower; (d) the Guarantor will provide to CoBank
financial and credit information in form acceptable to CoBank, including balance
sheets and income statements no less frequently than annually, as soon as they
become available, not later than 120 days after each fiscal year end or at such
other times as CoBank may request.
IN WITNESS WHEREOF, the undersigned Guarantor has executed this Guarantee
this 13th day of April, 2004.
DIAMOND NUT COMPANY OF
CALIFORNIA, INC.
By: /s/ Xxxxxxx X. Xxxxxx
__________________________
Xxxxxxx X. Xxxxxx
Title: President/CEO
By: /s/ Xxxxxxx X. Xxxxx
__________________________
Xxxxxxx X. Xxxxx
Title: Vice President/CFO
CORPORATE RESOLUTION AUTHORIZING EXECUTION OF GUARANTEE
Whereas, CoBank, ACB ("CoBank") is unwilling to extend certain financial
accommodations to DIAMOND WALNUT GROWERS, INC., a California corporation
("Borrower"), unless such obligations be guaranteed in whole or part by this
corporation; and
Whereas, it is of a business benefit to this corporation that the said financial
accommodations be extended and the required Guarantee be executed, in that this
corporation is a wholly-owned subsidiary;
Now, therefore, be it resolved that this corporation guarantee any and all
indebtedness of DIAMOND WALNUT GROWERS, INC., a corporation, to CoBank which
indebtedness may be from time to time outstanding, and that the officers of this
corporation, be and each of them is hereby, jointly and severally authorized and
empowered to execute the said Guarantee, said Guarantee to be in such form as
may be agreed upon by said officers of this corporation and CoBank, and the
signature of said officer of this corporation to said Guarantee shall evidence
such agreement.
Resolved further that the said bank is authorized to act upon this resolution
until written notice of its revocation is delivered to said bank, and. that the
authority hereby granted shall apply with equal force and effect to the
successor in office of the officer named herein.
I, Xxxxxx X. Xxxxxx, Secretary of DIAMOND NUT COMPANY OF CALIFORNIA, INC., a
corporation incorporated under the laws of the State of California, do hereby
certify that the foregoing is a full, true and correct copy of a resolution of
the Board of Directors of said corporation, duly and regularly passed and
adopted at a meeting of the Board of Directors of said corporation which was
duly and regularly called and held in all respects as required by law, and by
the bylaws of said corporation., at the office thereof on the 14th day of March,
2004, at which meeting a majority of the Board of Directors of said corporation
was present and voted in favor of said resolution.
I further certify that said resolution is still in full force and effect and has
not been amended or revoked, and that the specimen signature appearing below is
the signature of the officer authorized to sign for this corporation by virtue
of said resolution.
IN WITNESS WHEREOF, I have hereunto set my hand as such Secretary and affixed
the corporate seal of said corporation this 13th day of April, 2004.
DIAMOND NUT COMPANY OF
CALIFORNIA, INC.
By: /s/ Xxxxxx X. Xxxxxx
_______________________________________
Title: []Secretary or []Assistant Secretary
AUTHORIZED SIGNATURES:
/s/ Xxxxxxx X. Xxxxxx
_____________________________
Xxxxxxx X. Xxxxxx
Title: President/CEO
/s/ Xxxxxxx X. Xxxxx
_____________________________
Xxxxxxx X. Xxxxx
Title: Vice President/CEO
RESOLUTION OF THE BOARD OF DIRECTORS
OF
DIAMOND WALNUT GROWERS, INC.
STOCKTON, CALIFORNIA
WHEREAS, the above named borrower ("Borrower"), under its articles of
incorporation, bylaws, or other organizational documents has full power and
authority to borrow money and to secure the same with its own property and
property delivered to it for marketing or otherwise; and
WHEREAS, all prerequisite acts and proceedings preliminary to the adoption
of this Resolution have been taken and done in due and proper form, time and
manner.
NOW, THEREFORE, BE IT RESOLVED, that each of the following officers or positions
(line out any not to be authorized under this Resolution) President, Vice
President, Chairman, Vice Chairman, Treasurer, Chief Financial Officer,
Secretary, Secretary Treasurer, General Manager, Manager and any others to be
authorized under this Resolution (insert titles only) Controller ("Officers") of
the Borrower are jointly and severally authorized and empowered to obtain for
and on behalf of the Borrower from time to time, from CoBank, ACB ("CoBank"), a
loan or loans or other financial accommodations (including, without limitation,
letters of credit, note purchase agreements and bankers acceptances)
(collectively, a "Loan") under this Resolution; and for such purposes: (1) to
execute such application or applications (including exhibits, amendments and/or
supplements thereto) as may be required for all borrowings; (2) to obligate the
Borrower to pay such rate or rates of interest as the Officers so acting shall
deem proper, and in connection therewith to purchase such interest rate risk
management products as may be offered from time to time by CoBank; (3) to
obligate the Borrower to such other terms and conditions as the Officers so
acting shall deem proper; (4) to obligate the Borrower to make such investments
in CoBank as required by CoBank; (5) to execute and deliver to CoBank or its
nominee all such written loan agreements, documents and instruments as may be
required by CoBank in regard to or as evidence of any Loan made pursuant to the
terms of this Resolution; (6) to pledge, grant a. security interest or lien in,
or assign property of the Borrower or property of others an which it is entitled
to borrow, of any kind and in any amount as security for any or all obligations
(past, present and/or future) of the Borrower to CoBank; (7) from time to time
extend, amend, renew or refinance any such Loan; (8) to reborrow from time to
time, subject to the provisions of this Resolution, all or any part of the
amounts repaid to CoBank on any Loan made pursuant hereto (whether for the same
or a different purpose); (9) to execute and deliver to CoBank an Electronic
Commerce Master Service Agreement, a separate Service Agreement for each
different service requested by the Borrower, and such other agreements, addenda,
documents or instruments as may be required by CoBank in the event that the
Borrower elects to use CoBank's electronic banking system (the "System"); (10)
to execute and deliver to CoBank any agreements, addenda, authorization forms
and other documents or instruments as may be required by CoBank in the event
that the Borrower elects to use any services or products related to the Loan
that are offered by CoBank now or in the future, including without limitation an
automated clearing house (ACH) service (11) to direct and delegate to designated
employees of the Borrower the authority to direct, by written or telephonic
instructions or electronically, if the Borrower has agreed to use
the System for such purpose, the disposition of the proceeds of any Loan
authorized herein or any property of the Borrower at any time held by CoBank;
and (12) to delegate to designated employees of the Borrower the authority to
request by telephonic or written means or electronicallty, if the Borrower has
agreed to use the System for such purpose, loan advances and/or other financial
accommodations, and in connection therewith, to fix rates and agree to pay fees.
In the absence of any direction or delegation authorized in (11) or (12) above,
all existing directions and/or delegations shall remain in full force and effect
and shall be applicable to any Loan authorized herein.
RESOLVED FURTHER, That each of the Officers are hereby jointly and
severally authorized to: (1) establish a Cash Investment Services Account at
CoBank (2) make such investments therein as any Officer shall deem proper; (3)
direct by written or telephonic instructions or electronically, if the Borrower
has agreed to use the System for such purposes, the disposition of the proceeds
therein; (4) delegate to designated employees of the Company the authority set
forth in (2) and (3) above; and (5) execute and deliver all documents and
agreements necessary to catty out this authority.
RESOLVED FURTHER, That each of the Officers are hereby jointly and
severally authorized and directed to do and/or cause to be done, from time to
time, all things which may be necessary and/or proper for the carrying out of
the terms of these Resolutions.
RESOLVED FURTHER, That all prior acts by the Officers or other employees
or agents of the Borrower to accomplish the purposes of these Resolutions are
hereby approved and ratified.
RESOLVED FURTHER, That any Officer of the Borrower is hereby authorized
and directed to cast the ballot of the Borrower in any and all proceedings in
which the Borrower is entitled to vote for the selection of a member of CoBank's
board of directors or for any other propose.
RESOLVED FURTHER, That these Resolutions shall remain in full force and
effect until a certified copy of a duly adopted resolution effecting a
revocation or amendment, as the case may be, shall have bean received by CoBank.
The authority hereby granted shall apply with equal farce and effect to the
successors in office of the Officers herein named.
RESOLVED FURTHER, That effective on the date when the Loan under these
Resolutions becomes available, the following listed Resolutions are hereby
revoked:
ALL PRIOR RESOLUTIONS
No such revocation shall affect the validity of any satire or action, made or
taken in reliance on such resolution(s) prior to the effective date of
revocation.
RESOLVED FURTHER, That the Secretary or any Assistant Secretary of the
Borrower is hereby authorized and directed to certify to CoBank a copy of these
Resolutions, the names and specimen signatures of the present Officers above
referred to, and if and when any change is made in the personnel of any said
Officers, the fact of such change and the name and specimen signatures of the
new Officers. CoBank shall be entitled to rely on any such certification until a
new certification is actually received by CoBank.
CERTIFICATE
The undersigned, a Secretary or Assistant Secretary of the Borrower, hereby,
certifies that the Board of Directors, at a meeting duly called, noticed,
convened and held on the 24th day of November, 2004, at which a quorum was
present, did adopt the foregoing resolutions and that said resolutions have not
been revoked or amended in any way.
Dated this 24th day of November, 2004
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------------
Title: Secretary
---------------------------------------
[X] Secretary or [] Assistant Secretary
Loan No. RIE089T04
REVOLVING TERM LOAN SUPPLEMENT
THIS SUPPLEMENT to the Master Loan Agreement dated February 23, 2004 (the
"MLA"), is entered into as of February 23, 2004, between COBANK, ACB ("CoBank")
and DIAMOND WALNUT GROWERS, INC., STOCKTON, CALIFORNIA (the "Company"), and
amends and restates the Supplement dated December 10, 2003, and numbered
E089T04A.
SECTION 1. THE REVOLVING TERM LOAN COMMITMENT. On the terms and conditions
set forth in the MLA and this Supplement, CoBank agrees to make loans to the
Company during the period set forth below in an aggregate principal amount not
to exceed $20,000,000.00 at any one time outstanding (the "Commitment"). Within
the limits of the Commitment, the Company may borrow, repay and reborrow.
SECTION 2. PURPOSE. The purpose of the Commitment is to finance the
operating needs of the Company.
SECTION 3. TERM. The term of the Commitment shall be from the date hereof,
up to and including November 10, 2008, or such later date as CoBank may, in its
sole discretion, authorize in writing.
SECTION 4. INTEREST. The Company agrees to pay interest on the unpaid
balance of the loans in accordance with one or more of the following interest
rate options, as selected by the Company:
(A) COBANK BASE RATE. At a rate per annum equal at all times to the
rate of interest established by CoBank from time to time as its "CoBank Base
Rate", which Rate is intended by CoBank to be a reference rate and not its
lowest rate. The CoBank Base Rate will change on the date established by CoBank
as the effective date of any change therein and CoBank agrees to notify the
Company of any such change.
(B) QUOTED RATE. At a fixed rate per annum to be quoted by CoBank in
its sole discretion in each instance. Under this option, rates may be fixed on
such balances and for such periods, as may be agreeable to CoBank in its sole
discretion in each instance, provided that: (1) the minimum fixed period shall
be 30 days; (2) amounts may be fixed in increments of $100,000.00 or multiples
thereof; and (3) the maximum number of fixes in place at any one time shall be
5.
(C) LIBOR. At a fixed rate per annum equal to "LIBOR" (as
hereinafter defined), plus the Performance Pricing Adjustments, if any, set
forth in Section 4(D) below. Under this option: (1) rates maybe fixed for
"Interest Periods" (as hereinafter defined) of 1, 2, 3, 6, 9 or 12 months, as
selected by the Company; (2) amounts may be fixed in increments of $100,000.00
or multiples thereof; (3) the maximum number of fixes in place at any one time
shall be 5; and (4) rates may only be fixed on a "Banking Day" (as hereinafter
defined) on 3 Banking Days' prior written notice. For purposes hereof: (a)
"LIBOR" shall mean the rate (rounded upward to the nearest sixteenth and
adjusted for reserves required on "Eurocurrency
Revolving Term Loan Supplement RIE089T04 -2-
Liabilities" (as hereinafter defined) for banks subject to "FRB Regulation D"
(as herein defined) or required by any other federal law or regulation) quoted
by the British Bankers Association (the "BBA") at 11:00 a.m. London time 2
Banking Days before the commencement of the Interest Period for the offering of
U.S. dollar deposits in the London interbank market for the Interest Period
designated by the Company, as published by Bloomberg or another major
information vendor listed on BBA's official website; (b) "Banking Day" shall
mean a day on which CoBank is open for business, dealings in U.S. dollar
deposits are being carried out in the London interbank market, and banks are
open for business in New York City and London, England; (c) "Interest Period"
shall mean a period commencing on the date this option is to take effect and
ending on the numerically corresponding day in the next calendar month or the
month that is 2, 3, 6, 9 or 12 months thereafter, as the case may be; provided,
however, that: (i) in the event such ending day is not a Banking Day, such
period shall be extended to the next Banking Day unless such next Banking Day
falls in the next calendar month, in which case it shall end on the preceding
Banking Day; and (ii) if there is no numerically corresponding day in the month,
then such period shall end on the last Banking Day in the relevant month; (d)
"Eurocurrency Liabilities" shall have meaning as set forth in "FRB Regulation
D"; and (e) "FRB Regulation D" shall mean Regulation D as promulgated by the
Board of Governors of the Federal Reserve System, 12 CFR Part 204, as amended.
(D) PERFORMANCE PRICING ADJUSTMENTS. The interest rate spread
parameters set forth in Subsection (C) above shall be either increased or
decreased in accordance with the following schedule:
PERFORMANCE PRICING GUIDELINES
------------------------------
LONG TERM DEBT TO NET WORTH LIBOR SPREAD (IN BASIS POINTS)
--------------------------- ------------------------------
< 67.5% 80
> or = 67.5% 95
The applicable interest rate adjustment shall: (i) be considered as of each
fiscal quarter end based on interim financial information provided by the
Company within 45 working days of quarter end; (ii) become effective as of the
first day of the month following receipt of such information by CoBank, and
(iii) shall be effective on a prospective basis only and shall not affect
existing fixed rate pricing. (The term Long Term Debt to Net Worth is defined in
Section 10(C) of the MLA.)
The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options. Upon the expiration of any fixed rate period, interest shall
automatically accrue at the variable rate option unless the amount fixed is
repaid or fixed for an additional period in accordance with the terms hereof.
Notwithstanding the foregoing, rates may not be fixed in such a manner as to
cause the Company to have to break any fixed rate balance in order to pay any
installment of principal. All elections provided for herein shall be made
electronically (if applicable), telephonically or in writing and must be
received by CoBank not later than 12:00 Noon Company's local time in order to be
considered to have been received on that day; provided, however, that in the
ease of LIBOR rate loans, all such elections must be confirmed in writing upon
CoBank's request Interest shall be calculated on the actual number of days each
loan is outstanding on the basis of a year consisting of 360
Revolving Term Loan Supplement RIE089T04 -3-
days and shall be payable quarterly in arrears by the 20th day of the following
month or on such other day in such month as CoBank shall require in a written
notice to the Company; provided, however, in the event the Company elects to fix
all or a portion of the indebtedness outstanding under the LIBOR interest rate
option above, at CoBank's option upon written notice to the Company, interest
shall be payable at the maturity of the Interest Period and if the LIBOR
interest rate fix is for a period longer than 3 months, interest on that portion
of the indebtedness outstanding shall be payable quarterly in arrears on each
three-month anniversary of the commencement date of such Interest Period, and at
maturity.
SECTION 5. PROMISSORY NOTE. The Company promises to repay the loans that
are outstanding at the time the Commitment expires on November 10, 2008. If any
installment due date is not a day on which CoBank is open for business, then
such payment shall be made on the next day on which CoBank is open for business.
In addition to the above, the Company promises to pay interest on the unpaid
principal balance hereof at the times and in accordance with the provisions set
forth in Section 4 hereof. This note replaces and supersedes, but does nor
constitute payment of the indebtedness evidenced by, the promissory note set
forth in the Supplement being amended and restated hereby.
SECTION 6. PREPAYMENT. Subject to the broken funding surcharge provision
of the MLA, the Company may on one Business Day's prior written notice prepay
all or any portion of the loan(s). During the term of the Commitment,
prepayments shall be applied to such balances, fixed or variable, as the Company
shall specify. After the expiration of the term of the Commitment, prepayments
shall, unless CoBank otherwise agrees, be applied to principal installments in
the inverse order of their maturity and to such balances, fixed or variable, as
CoBank shall specify.
SECTION 7. COMMITMENT FEE. In consideration of the Commitment, the Company
agrees to pay to CoBank a commitment fee on the average daily unused portion of
the Commitment at the rate of 3/20 of 1% per annum (calculated on a 360 day
basis), payable quarterly in arrears by the 20th day following each calendar
quarter. Such fee shall be payable for each quarter (or portion thereof)
occurring during the original or any extended term of the Commitment.
SECTION 8. LETTERS OF CREDIT. If agreeable to CoBank in its sole
discretion in each instance, in addition to loans, the Company may utilize up to
$2,500,000.00 of the Commitment to open irrevocable letters of credit for its
account. Each letter of credit will be issued within a reasonable period of time
after receipt of a duly completed and executed copy of CoBank's then current
form of application or, if applicable, in accordance with the terms of any
CoTrade Agreement between the parties, and shall reduce the amount available
under the Commitment by the maximum amount capable of being drawn thereunder.
Any draw under any letter of credit issued hereunder shall be deemed an advance
under the Commitment. Each letter of credit must be in form and content
acceptable to CoBank and must expire no later than the maturity date of the
loans. The fee for issuing each letter of credit shall be .75 percent of the
face amount of each letter of credit.
Revolving Term Loan Supplement RIE089T04 -4-
IN WITNESS WHEREOF, the parties have caused this Supplement to be executed
by their duly authorized officers as of the date shown above.
COBANK, ACB DIAMOND WALNUT GROWERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxx
________________________________ By: __________________________
Title: Assistant Corporate Secretary V.P. - CFO
_____________________________ Title: _______________________
Loan No. RIE089S01
REVOLVING CREDIT SUPPLEMENT
THIS SUPPLEMENT to the Master Loan Agreement dated February 23, 2004 (the
"MLA"), is entered into as of February 23, 2004, between COBANK, ACB ("CoBank")
and DIAMOND WALNUT GROWERS, INC., STOCKTON, CALIFORNIA (the "Company"), and
amends and restates the Supplement dated December 10, 2003, and numbered EO89SOI
I.
SECTION 1. THE REVOLVING CREDIT FACILITY. On the terms and conditions set
forth in the MLA and this Supplement, CoBank agrees to make loans to the Company
during the period set forth below in an aggregate principal amount not to exceed
$50,000.000.00 at any one time outstanding (the "Commitment"). Within the limits
of the Commitment, the Company may borrow, repay and reborrow.
SECTION 2. PURPOSE. The purpose of the Commitment is to finance the
operating needs of the Company.
SECTION 3. TERM. The term of the Commitment shall be from the date hereof,
up to and including March 1, 2005, or such later date as CoBank may, in its sole
discretion, authorize in writing.
SECTION 4. INTEREST. The Company agrees to pay interest on the unpaid
balance of the loans in accordance with one or more of the following interest
rate options, as selected by the Company:
(A) OVERNIGHT VARIABLE RATE. At a daily rate equal at all times to
LIBOR (as hereinafter defined) plus 3/4 of I% per annum, Under this option
"LIBOR" shall mean the rate indicated by Telerate (rounded upward to the nearest
thousandth) as having been quoted by the British Bankers Association at 1.1:00
a.m. London time each day for the offering of U.S. dollar deposits in the London
interbank market for a period of one week. This interest rate option shall be
available until CoBank shall give written notification to the Company that this
provision is either (i) cancelled or (ii) suspended for a period of time
specified in such notification.
(B) QUOTED RATE. At a fixed rate per annum to be quoted by CoBank in
its sole discretion in each instance. Under this option, rates may be fixed on
such balances and for such periods, as may be agreeable to CoBank in its sole
discretion in each instance, provided that: (1) the minimum fixed period shall
be 30 days; (2) amounts may be fixed in increments of $500,000.00 or multiples
thereof; and (3) the maximum number of fixes in place at any one time shall be
10.
(C) LIBOR. At a fixed rate per annum equal to "LIBOR" (as
hereinafter defined) plus 3/4 of 1%. Under this option: (1) rates may be fixed
for "Interest Periods" (as hereinafter defined) of 1, 2, 3, or 6 months as
selected by the Company; (2) amounts may be fixed in increments of $100,000.00
or multiples thereof; (3) the maximum number of fixes in place at any one time
shall be 10; and (4) rates may only be fixed on a "Banking Day" (as hereinafter
Revolving Credit Supplement RIE089S01 -2-
defined) on 3 Banking Days' prior written notice. For purposes hereof: (a)
"LIBOR" shall mean the rate (rounded upward to the nearest sixteenth and
adjusted for reserves required on "Eurocurrency Liabilities" (as hereinafter
defined) for banks subject to "FRB Regulation D" (as herein defined) or required
by any other federal law or regulation) quoted by the British Bankers
Association (the "BBA") at 11:00 a.m. London time 2 Banking Days before the
commencement of the Interest Period for the offering of U.S. dollar deposits in
the London interbank market for the Interest Period designated by the Company;
as published by Bloomberg or another major information vendor listed on BBA's
official website; (b) "Banking Day" shall mean a day on which CoBank is open for
business, dealings in U.S. dollar deposits are being carried out in the London
interbank market, and banks are open for business in New York City and London,
England; (c) "Interest Period" shall mean a period commencing on the date this
option is to take effect and ending on the numerically corresponding day in. the
next calendar month or the month that is 2, 3, or 6 months thereafter, as the
case may be; provided, however, that: (i) in the event such ending day is not a
Banking Day, such period shall be extended to the next Banking Day unless such
next Banking Day falls in the next calendar month, in which case it shall end on
the preceding Banking Day; and (ii) if there is no numerically corresponding day
in the month, then such period shall end on the last Banking Day in the relevant
month; (d) "Eurocurrency Liabilities" shall have meaning as set forth in "FRB
Regulation D"; and (e) "FRB Regulation D" shall mean Regulation D as promulgated
by the Board of Governors of the Federal Reserve System, 12 CFR Part 204, as
amended.
The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options. Upon the expiration of any fixed rate period, interest shall
automatically accrue at the variable rate option unless the amount fixed is
repaid or fixed for an additional period in accordance with the terms hereof.
Notwithstanding the foregoing, rates may not be fixed for periods expiring after
the maturity date of the loans. All elections provided for herein shall be made
electronically (if applicable), telephonically or in writing and must be
received by CoBank not later than 12:00 Noon Company's local time in order to be
considered to have been received on that day; provided, however, that in the
case of LIBOR rate loans, all such elections must be confirmed in writing upon
CoBank's request. Interest shall be calculated on the actual number of days each
loan is outstanding on the basis of a year consisting of 360 days and. shall be
payable quarterly in arrears by the 20th day of the following month or on such
other day in such month as CoBank shall require in a written notice to the
Company: provided, however, in the event the Company elects to fix all or a
portion of the indebtedness outstanding under the LIBOR interest rate option
above, at CoBank's option upon written notice to the Company, interest shall be
payable at the maturity of the Interest Period and if the LIBOR interest rate
fix is for a period longer than 3 months, interest on that portion of the
indebtedness outstanding shall be payable quarterly in arrears on each
three-month anniversary of the commencement date of such Interest Period, and at
maturity.
SECTION 5. PROMISSORY NOTE. The Company promises to repay the unpaid
principal balance of the loans on the last day of the term of the Commitment. In
addition to the above, the Company promises to pay interest on the unpaid
principal balance of the loans at the times and in accordance with the
provisions set forth in Section 4 hereof. This note replaces and supersedes, but
does not constitute payment of the indebtedness evidenced by, the promissory
note set forth in the Supplement being amended and restated hereby.
Revolving Credit Supplement RIE089S01 -3-
SECTION 6. COMMITMENT Fee. In consideration of the Commitment, the Company
agrees to pay to CoBank a commitment fee on the average daily unused portion of
the Commitment at the rate of 1/8 of 1% per annum (calculated on a 360 day
basis), payable quarterly in arrears by the 20th day following each calendar
quarter. Such fee shall be payable for each quarter (or portion thereof)
occurring during the original or any extended term of the Commitment.
IN WITNESS WHEREOF, the parties have caused this Supplement to be executed
by their duly authorized officers as of the date shown above.
COBANK, ACB DIAMOND WALNUT GROWERS, INC.
By: /s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Xxxxx
________________________________ By: __________________________
Title: Assistant Corporate Secretary V.P. - CFO
_____________________________ Title: _______________________
Loan No. RIE089S01A
REVOLVING CREDIT SUPPLEMENT
THIS SUPPLEMENT to the Master Loan Agreement dated February 23, 2004, as
amended (the "MLA"), is entered into as of November 23, 2004, between COBANK,
ACB ("CoBank") and DIAMOND WALNUT GROWERS, INC., STOCKTON, CALIFORNIA (the
"Company"), and amends and restates the Supplement dated February 23, 2004, and
numbered RIE089S01.
SECTION 1. THE REVOLVING CREDIT FACILITY. On the terms and conditions set
forth in the MLA and this Supplement, CoBank agrees to make loans to the Company
during the period set forth below in an aggregate principal amount not to exceed
$57,500,000.00 at any one time outstanding (the "Commitment"). Within the limits
of the Commitment, the Company may borrow, repay and reborrow.
SECTION 2. PURPOSE. The purpose of the Commitment is to finance the
operating needs of the Company.
SECTION 3. TERM. The term of the Commitment shall be from the date hereof,
up to and including March 1, 2005, or such later date as CoBank may, in its sole
discretion, authorize in writing.
SECTION 4. INTEREST. The Company agrees to pay interest on the unpaid
balance of the loans in accordance with one or more of the following interest
rate options, as selected by the Company:
(A) OVERNIGHT VARIABLE RATE. At a daily rate equal at all times to
LIBOR (as hereinafter defined) plus 3/4 of 1% per annum. Under this option
"LIBOR" shall mean the rate indicated by Telerate (rounded upward to the nearest
thousandth) as having been quoted by the British Bankers Association at 11:00
a.m. London time each day for the offering of U.S. dollar deposits in the London
interbank market for a period of one week. This interest rate option shall be
available until CoBank shall give written notification to the Company that this
provision is either (i) cancelled or (ii) suspended for a period of time
specified in such notification.
(B) QUOTED RATE. At a fixed rate per annum to be quoted by CoBank in
its sole discretion in each instance. Under this option, rates may be fixed on
such balances and for such periods, as may be agreeable to CoBank in its sole
discretion in each instance, provided that: (1) the minimum fixed period shall
be 30 days; (2) amounts may be fixed in increments of $500,000.00 or multiples
thereof; and (3) the maximum number of fixes in place at any one time shall be
10.
(C) LIBOR At a fixed rate per annum equal to "LIBOR" (as hereinafter
defined) plus 3/4 of 1%. Under this option: (1) rates may be fixed for "Interest
Periods" (as hereinafter defined) of 1, 2, 3, or 6 months as selected by the
Company; (2) amounts may be fixed in increments of $100,000.00 or multiples
thereof; (3) the maximum number of fixes in
Revolving Credit Supplement RIE089S01A -2-
place at any one time shall be 10; and (4) rates may only be fixed on a "Banking
Day" (as hereinafter defined) on 3 Banking Days' prior written notice. For
purposes hereof: (a) "LIBOR" shall mean the rate (rounded upward to the nearest
sixteenth and adjusted for reserves required on "Eurocurrency Liabilities" (as
hereinafter defined) for banks subject to "FRB Regulation D" (as herein defined)
or required by any other federal law or regulation) quoted by the British
Bankers Association (the "BBA") at 11:00 a.m. London time 2 Banking Days before
the commencement of the Interest Period for the offering of U.S. dollar deposits
in the London interbank market for the Interest Period designated by the
Company; as published by Bloomberg or another major information vendor listed on
BBA's official website; (b) "Banking Day" shall mean a day on which CoBank is
open for business, dealings in U.S. dollar deposits are being carried out in the
London interbank market, and banks are open for business in New York City and
London, England; (c) "Interest Period" shall mean a period commencing on the
date this option is to take effect and ending on the numerically corresponding
day in the next calendar month or the month that is 2, 3, or 6 months
thereafter, as the case may be; provided, however, that: (i) in the event such
ending day is not a Banking Day, such period shall be extended to the next
Banking Day unless such next Banking Day falls in the next calendar month, in
which case it shall end on the preceding Banking Day; and (ii) if there is no
numerically corresponding day in the month, then such period shall end on the
last Banking Day in the relevant month; (d) "Eurocurrency Liabilities" shall
have meaning as set forth in "FRB Regulation D"; and (e) "FRB Regulation D"
shall mean Regulation D as promulgated by the Board of Governors of the Federal
Reserve System, 12 CPR Part 204, as amended.
The Company shall select the applicable rate option at the time it requests a
loan hereunder and may, subject to the limitations set forth above, elect to
convert balances bearing interest at the variable rate option to one of the
fixed rate options. Upon the expiration of any fixed rate period, interest shall
automatically accrue at the variable rate option unless the amount fixed is
repaid or fixed for an additional period in accordance with the terms hereof.
Notwithstanding the foregoing, rates may not be fixed for periods expiring after
the maturity date of the loans. All elections provided for herein shall be made
electronically (if applicable), telephonically or in writing and must be
received by CoBank not later than 12:00 Noon Company's local time in order to be
considered to have been received on that day; provided, however, that in the
case of LIBOR rate loans, all such elections must be confirmed in writing upon
CoBank's request. Interest shall be calculated on the actual number of days each
loan is outstanding on the basis of a year consisting of 360 days and shall be
payable quarterly in arrears by the 20th day of the following month or on such
other day in such month as CoBank shall require in a written notice to the
Company; provided, however, in the event the Company elects to fix all or a
portion of the indebtedness outstanding under the LIBOR interest rate option
above, at CoBank's option upon written notice to the Company, interest shall be
payable at the maturity of the Interest Period and if the LIBOR interest rate
fix is for a period longer than 3 months, interest on that portion of the
indebtedness outstanding shall be payable quarterly in arrears on each
three-month anniversary of the commencement date of such Interest Period, and at
maturity.
SECTION 5. PROMISSORY NOTE. The Company promises to repay the unpaid
principal balance of the loans on the last day of the term of the Commitment. In
addition to the above, the Company promises to pay interest on the unpaid
principal balance of the loans at the times and in accordance with the
provisions set forth in Section 4 hereof. This note replaces and supersedes, but
does not constitute payment of the indebtedness evidenced by, the promissory
note set forth in the Supplement being amended and restated hereby.
Revolving Credit Supplement RIE089S01A -3-
SECTION 6. COMMITMENT FEE. In consideration of the Commitment, the Company
agrees to pay to CoBank a commitment fee on the average daily unused portion of
the Commitment at the rate of 1/8 of 1% per annum (calculated on a 360 day
basis), payable quarterly in arrears by the 20th day following each calendar
quarter. Such fee shall be payable for each quarter (or portion thereof)
occurring during the original or any extended term of the Commitment.
IN WITNESS WHEREOF, the parties have caused this Supplement to be executed
by their duly authorized officers as of the date shown above.
COBANK, ACB DIAMOND WALNUT GROWERS, INC.
By: By: /s/ Xxxx Xxxxxxx
__________________________ _________________________
Title: Title: VP Finance-Controller
_______________________ ______________________
MLA No. RIE089C
MASTER LOAN AGREEMENT
THIS MASTER LOAN AGREEMENT is entered into as of March 21, 2005, between
COBANK, ACB ("CoBank") and DIAMOND WALNUT GROWERS, INC. STOCKTON, CALIFORNIA
(the "Company"), and amends and restates that Master Loan Agreement dated
February 23, 2004.
BACKGROUND
CoBank and the Company are parties to a Master Loan Agreement dated
February 23, 2004 (as amended, the "Existing Agreement"). Pursuant to the terms
of the Existing Agreement, the parties entered into one or more Supplements
thereto. CoBank and the Company now desire to amend and restate the Existing
Agreement and to apply such new agreement to the existing Supplements, as well
as any new Supplements that may be issued thereunder. For that reason and for
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), CoBank and the Company hereby agree that the Existing Agreement
stall be amended and restated to read as follows:
SECTION 1. SUPPLEMENTS. In the event the Company desires to borrow from
CoBank and CoBank is willing to lend to the Company, or in the event CoBank and
the Company desire to consolidate any existing loans hereunder, the parties will
enter into a Supplement to this agreement (a "Supplement"). Each Supplement will
set forth the amount of the loan, the purpose of the loan, the interest rate or
rate options applicable to that loan, the repayment terms of the loan, and any
other terms and conditions applicable to that particular loan. Each loan will be
governed by the terms and conditions contained in this agreement and in the
Supplement relating to the loan. As of the date hereof, the following
Supplements are outstanding hereunder and shall be governed by the terms and
conditions hereof: (a) the Revolving Credit Supplement dated November 23, 2004,
and numbered RIE089S0IA; and (b) the Revolving Term Loan Supplement dated
February 23, 2004 and numbered RIE089T04.
SECTION 2. AVAILABILITY. Loans will be made available on any day on which
CoBank and the Federal Reserve Banks are open for business upon the telephonic
or written request of the Company. Request for loans must be received no later
than 12:00 Noon Company's local time on the date the loan is desired. Loans will
be made available by wire transfer of immediately available funds to such
account or accounts as may be authorized by the Company. The Company shall
furnish to CoBank a duly completed and executed copy of a CoBank Delegation and
Wire and Electronic Transfer Authorization Form, and CoBank shall be entitled to
rely on (and shall incur no liability to the Company in acting on) any request
of direction furnished in accordance with the terms thereof.
SECTION 3. REPAYMENT. The Company's obligation to repay each loan shall be
evidenced by the promissory note set forth in the Supplement relating to that
loan or by such replacement note as CoBank shall require. CoBank shall maintain
a record of all loans, the interest accrued thereon and all payments made with
respect thereto, and such record shall, absent proof of manifest error, be
conclusive evidence of the outstanding principal and interest
Master Loan Agreement No. RIE089C -2-
on the loans. All payments shall be made by wire transfer of immediately
available funds, by check, or by automated clearing house or other similar cash
handling processes as specified by separate agreement between the Company and
CoBank. Wire transfers shall be made for advice to and credit of CoBank (or to
such other account as CoBank may direct by notice). The Company shall give
CoBank telephonic notice no later than 12:00 Noon Company's local time of its
intent to pay by wire and funds received after 3:00 p.m. Company's local time
shall be credited on the next business day. Checks shall be mailed to XxXxxx,
Xxxxxxxxxx 000, Xxxxxx, Xxxxxxxx 00000-0000 (or to such other place as CoBank
may direct by notice). Credit for payment by check will not be given until the
later of (a) the day on which CoBank receives immediately available fiords; or
(b) the next business day crane receipt of the check.
SECTION 4. CAPITALIZATION. The Company agrees to purchase such equity in
CoBank as Citibank may from time to time require in accordance with its Bylaws.
However, the maximum amount of equity which the Company shall be obligated to
purchase in connection with any loan Inv may not exceed the maximum amount
permitted by the Bylaws at the time the Supplement relating to that loan is
entered into or such loan is renewed or refinanced by CoBank.
SECTION 5. SECURITY. The Company's obligations under this agreement, all
Supplements (whenever executed), and all instruments and documents hereby or
thereby, shall be secured by a statutory first lien on all equity which the
Company may now own or hereafter acquire in CoBank. Except for CoBank's lien on
the Company's equity in CoBank, the Company's obligations hereunder and under
each Supplement shall be unsecured.
SECTION 6. CONDITIONS PRECEDENT.
(A) CONDITIONS TO INITIAL SUPPLEMENT. CoBank's obligation to extend
credit under the initial Supplement hereto in subject to the conditions
precedent that CoBank receive, in form and content satisfactory to CoBank, each
of the following:
(i) THIS AGREEMENT, ETC. A duly executed copy of this
agreement and all instruments and documents contemplated hereby.
(B) CONDITIONS TO EACH SUPPLEMENT. CoBank's obligations to extend
credit under each Supplement, including the initial Supplement, is subject to
the conditions precedent that CoBank receive, in form and content satisfactory
to CoBank, each of the following:
(i) SUPPLEMENT. A duly executed copy of the Supplement and all
instruments and documents contemplated thereby.
(ii) EVIDENCE OF AUTHORITY. Such certified board resolutions,
certificates of incumbency, and other evidence that CoBank may require that the
Supplement, all instruments and documents executed in connection therewith, and,
in the case of initial Supplement hereto, this agreement and all instruments and
documents executed in connection herewith, have been duly authorized and
executed.
Master Loan Agreement No. RIE089C -3-
(iii) FEES AND OTHER CHARGES. All fees and other charges
provided for herein or in the Supplement
(iv) EVIDENCE OF PERFECTION, ETC. Such evidence as CoBank may
require that CoBank has a duly perfected first priority lien on all security for
the Company's obligations, and that the Company is in compliance with Section
8(D) hereof.
(C) CONDITIONS IN EACH LOAN. CoBank's obligation under each
Supplement to make any loan to the Company thereunder is subject to the
condition that no "Event of Default" (as defined in Section 11 hereof) or event
which with the giving of notice and/or the passage of time would become an Event
of Default hereunder (a "Potential Default"), shall have occurred and be
continuing.
SECTION 7. REPRESENTATIONS AND WARRANTIES.
(A) THIS AGREEMENT. The Company represents and warrants to CoBank
that as of the date of this agreement:
(i) COMPLIANCE. The Company and, to the extent contemplated
hereunder, each "Subsidiary" (as defined below), is in compliance with all of
the teams of this agreement, and no Event of Default or Potential Default exists
hereunder.
(ii) SUBSIDIARIES. The Company has the following
"Subsidiary(ies")" (as defined below):-Diamond Walnut Capital Trust, Diamond of
Europe GmbH, Diamond Nut Company of California, Inc., and Diamond Foods, Inc.
For purposes hereof, a "Subsidiary" shall mean a corporation of which shares of
stock having ordinary voting power to elect a majority of the board of directors
or other managers of such corporation are owned, directly or indirectly, by the
Company.
(B) EACH SUPPLEMENT. The execution by the Company of each Supplement
hereto shall constitute a representation and warranty to CoBank that:
(i) APPLICATIONS. Each representation and warranty and all
information set forth in any application or other document submitted in
connection with, or to induce CoBank to enter into, such Supplement is correct
in all material respects as of the date of the Supplement.
(ii) CONFLICTING AGREEMENTS, ETC. This agreement, the
Supplements, and all security and other instruments and documents relating
hereto and thereto (collectively, at any time, the "Loan Documents"), do not
conflict with, or require the consent of any party to, any other agreement to
which the Company is a party or by which it or its property maybe bound or
affected, and do not conflict with any provision of the Company's bylaws,
articles of incorporation, or other organizational documents.
(iii) COMPLIANCE. The Company and, to the extent contemplated
hereunder each Subsidiary, is in compliance with all of the terms of the Loan
Documents (including, without limitation, Section 8(A) of this agreement on
eligibility to borrow from CoBank).
Master Loan Agreement No. RIE089C -4-
(iv) BINDING AGREEMENT. The Loan Documents create legal,
valid, and binding obligations of the Company which are enforceable in
accordance with their terms, except to the extent that enforcement may be
limited by applicable bankruptcy, insolvency, or similar laws affecting
creditors rights generally.
SECTION 8. AFFIRMATIVE COVENANTS. Unless otherwise agreed to in writing by
CoBank while this agreement is in effect, the Company agrees to and with respect
to Subsections 8(B) through 8(G) and 8(H)(vii) hereof, agrees to cause each
Subsidiary to:
(A) [RESERVED]
(B) CORPORATE EXISTENCE, LICENSES, ETC. (i) Preserve and keep in
full force and effect its existence and xxxx standing in the jurisdiction of its
incorporation or formation; (ii) qualify and remain qualified to transact
business is all jurisdictions where such qualification is required; and (iii)
obtain and maintain all licenses, certificates, permits, authorizations,
approvals, and the like which arc material to the conduct of its business or
required by law, rule, regulation, ordinance, code, order, and the like
(collectively, "Laws").
(C) COMPLIANCE WITH LAWS. Comply in all material respects with all
applicable Laws, including, without limitation, all Laws relating to
environmental protection and any patron or member investment program that it may
have. In addition, the Company agrees to cause all persons occupying or present
on any of its properties, and to cause each Subsidiary to cause all persons
occupying or present on any of its properties, to comply in all material
respects with all environmental protection Laws.
(D) INSURANCE. Maintain insurance with insurance companies or
associations acceptable to CoBank in such amounts and covering such risk as are
usually carried by companies engaged in the same or similar business and
similarly situated, and make such increase in the type or amount of coverage as
CoBank may request. All such policies insuring any collateral for the Company's
obligations to CoBank shall have mortgagee or lender loss payable clauses or
endorsements in form and content acceptable to CoBank. At CoBank's request, all
policies (or such other proof of compliance with this Subsection as may be
satisfactory to CoBank) shall be delivered to CoBank.
(E) PROPERTY MAINTENANCE. Maintain all of its property that is
necessary to or useful in the proper conduct of its business in good working
condition, ordinary wear and tear excepted.
(F) BOOKS AND RECORDS. Keep adequate records and books of account in
which complete entries will be made in accordance with generally accepted
accounting principles ("GAAP") consistently applied.
(G) INSPECTION. Permit CoBank, or its agents, upon reasonable notice
and during normal business hours or at such other times as the parties may
agree, to examine its properties, books, and records, and to discuss its
affairs, finances, and accounts, with its respective officers, directors,
employees, and independent certified public accountants.
Master Loan Agreement No. RIE089C -5-
(H) REPORTS AND NOTICES. Furnish to CoBank:
(i) ABOUT FINANCIAL STATEMENTS. As soon as available, but in
no event more than 120 days after the end of each fiscal year of the Company
occurring during the term hereof, annual consolidated and consolidating
financial statements of the Company and its consolidated Subsidiaries, if any,
prepared in accordance with GAAP consistently applied. Such financial statements
shall: (a) be audited by independent certified public accountants selected by
the Company and acceptable to CoBank, (b) be accompanied by a report of such
accountants containing an opinion thereon acceptable to CoBank (c) be prepared
in reasonable detail and in comparative form, and (d) include a balance sheet, a
statement of operations, a statement of retained earnings, a statement of cash
flows, and all notes and schedules relating therein.
(ii) INTERIM FINANCIAL STATEMENTS. As soon as available, but
in no event more than 45 days after the end of each fiscal quarter of the
Company (other than the last quarter in each fiscal year of the Company), a
consolidated balance sheet of the Company and its consolidated Subsidiaries, if
any, as of the end of such fiscal quarter, a consolidated statement of
operations for the Company and its consolidated Subsidiaries, if any, for such
period and for the period year to date, and such other interim statements as
CoBank may specifically request, all prepared in reasonable detail and in
comparative form in accordance with GAAP consistently applied and, if required
by written notice from CoBank, certified by an authorized officer or employee of
the Company acceptable to CoBank.
(iii) NOTICE OF DEFAULT. Promptly after becoming aware
thereof, notice of the occurrence of an Event of Default or a Potential Default.
(iv) NOTICE OF NON-ENVIRONMENTAL LITIGATION. Promptly after
the commencement thereof, notice of the commencement of all actions, suits, or
proceedings before any court, arbitrator, or governmental department,
commission, board, bureau, agency, or instrumentality affecting the Company or
any Subsidiary which, if determined adversely to the Company or any such
Subsidiary, could have a material adverse effect on the financial condition,
properties, profits, or operations of the Company or any such Subsidiary.
(v) NOTICE OF ENVIRONMENTAL LITIGATION, ETC. Promptly after
receipt thereof, notice of the receipt of all pleadings, orders, complaints,
indictments, or any other communication alleging a condition that may require
the Company or any Subsidiary to undertake or to contribute to a cleanup or
other response under environmental Laws, or which seek penalties damages,
injunctive relief, or criminal sanctions related to alleged violations of such
Laws, or which claim personal injury or property damage to any person as a
result of environmental factors or conditions.
(vi) BYLAWS AND ARTICLES. Promptly after any change in the
Company's bylaws or articles of incorporation (or like documents), copies of all
such changes, certified by the Company's Secretary.
(vii) COMPLIANCE CERTIFICATE. Together with each set of
financial statements furnished to CoBank pursuant to Section 8(H) hereof, a
certificate of an office or
Master Loan Agreement No. RIE089C -6-
employee of the Company acceptable to CoBank setting forth calculations showing
compliance with the financial covenants set forth in Section 10 hereof.
(viii) OTHER INFORMATION. Such other information regarding the
condition or operations, financial or otherwise, of the Company or any
Subsidiary as CoBank may from time to time reasonably request, including but not
limited to copies of all pleadings, notices, and communications referred to in
Subsections 8(H)(iv) and (v) above.
(I) GUARANTEE AND RELATED DOCUMENTS. The Company agrees that on or
before April 15, 2004, it will provide to CoBank the following items: (1) A
guarantee of payment from Diamond Nut Company of California, Inc. in a form and
with such content agreeable to CoBank in its sole discretion; and (2) certified
board resolutions, evidence of incumbency, and other evidence as CoBank may
require that the guarantee and al instruments and documents executed in
connection therewith have been duly authorized and executed.
SECTION 9. NEGATIVE COVENANTS. Unless otherwise agreed to in writing by
CoBank, while this agreement is in effect the Company will not and, with respect
to Subsections 9(B) through 9(G) hereof, will not permit is Subsidiaries to:
(A) BORROWINGS. Create, incur, assume, or allow to exist, directly
or indirectly, any indebtedness or liability for borrowed money (including trade
or bankers' acceptances), letters of credit, or the deferred purchase price of
property or services (including capitalized leases), except for: (i) debt to
CoBank; (ii) accounts payable to trade creditors incurred in the ordinary course
of business; (iii) current operating liabilities (other than for borrowed money)
incurred in the ordinary course of business; (iv) debt of the Company to other
lenders maturing within one year of the date created, provided that not more
than $35,000,000.00 of such debt is outstanding at any time and that the maximum
amount of all shore term indebtedness that may be outstanding at any one time to
such lenders and to CoBank, may not exceed $95,000,000.00; and (v) debt of the
Company to other lenders or finance companies in an aggregate amount not to
exceed $10,000,000.00.
(B) LIENS. Create, incur, assume, or allow to exist any mortgage,
deed of trust, pledge, lien (including the lien of an attachment, judgment, or
execution), security interest, or other encumbrance of any kind upon any of its
property, real or personal (collectively, "Liens"). The foregoing restrictions
shall not apply to: (i) Liens in favor of CoBank; (ii) Liens for taxes,
assessments, or governmental charges that are not past due; (iii) Liens and
deposits under workers' compensation, unemployment insurance, and social
security Laws; (iv) Liens and deposits to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), and like
obligations arising in the ordinary course of business as conducted on the date
hereof; (v) Liens imposed by Law in favor of mechanics, materialman,
warehousemen, and like persons that secure obligations that are not past due;
and (vi) easements, right-of-way, restrictions, and other similar encumbrances
which, in the aggregate, do not materially interfere with the occupation, use,
and enjoyment of the property or assets encumbered thereby in the normal course
of its business or materially impair the value of the property subject thereto.
Master Loan Agreement No. RIE089C -7-
(C) MERGERS, ACQUISITIONS, ETC. Merge or consolidate with any other
entity or acquire all or a material part of the assets of any person or entity,
or from or create any new Subsidiary or affiliate, or commence operations under
any other name, organization, or entity, including any joint venture, provided,
however, the Company may merge with any other company provided that (a) the
Company or Diamond Foods, Inc. is the surviving corporation, (b) the
consideration for such merger shall consist (i) solely of common stock, (ii) of
cash, not to exceed $30,000,000.00, or (iii) a combination of cash and stock not
to exceed $30,000,000.00, and (c) the merger will not result in a violation of
any applicable financial covenants after giving effect to the merger.
(D) TRANSFER OF ASSETS. Sell, transfer, lease, or otherwise dispose
of any of its assets, except in the ordinary course of business.
(E) LOANS. Lend or advance money, credit, on property to any person
or entity, except for: (i) trade credit extended in the ordinary course of
business; and (ii) loans on advances by the Company to its Subsidiaries.
(F) CONTINGENT LIABILITIES. Assume, guarantee, become liable as a
surety, endorse, contingently agree to purchase, or otherwise be or become
liable, directly or indirectly (including, but not limited to, by means of a
maintenance agreement, an asset or stock purchase agreement, or any other
agreement designed to ensure any creditor against loss), for or on account of
the obligation of any person or entity, except by the endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary
course of the Company's business.
(G) CHANGE IN BUSINESS. Engage in any business activities or
operations substantially different from or unrelated to the Company's present
business activities or operations.
(H) OPERATING LEASES. Create, incur, assume, or permit to exist any
obligation as lessee under operating leases for the rental or hire of any real
or personal property except railroad leases and except leases which do not in
the aggregate require the Company to make scheduled payments to the lessors in
any fiscal year of the Company in excess of $3,500,000.00.
(I) PAYMENTS TO MEMBERS. For any period in which the Company has
grower members, make, directly or indirectly, any payment (in cash or kind) to
any of its grower members unless, after giving effect thereto, the Company in
the exercise of sound business judgment, reasonably believes that the Company
will be able to make timely payment of all principal, interest or other
obligation under the terms of this Agreement and any Supplements hereto.
SECTION 10. FINANCIAL COVENANTS. Unless otherwise agreed to in writing,
while this agreement is in effect:
(A) WORKING CAPITAL. The Company and its consolidated Subsidiaries
will have at the end of each fiscal quarter of the Company an excess of
consolidated current assets
Master Loan Agreement No. RIE089C -8-
over consolidated current liabilities (both as determined in accordance with
GAAP consistently applied) of not less than $40,000,000.00.
(B) NET WORTH. The Company and its consolidated Subsidiaries will
have at the end of each fiscal quarter an excess of consolidated total assets
over consolidated total liabilities (both as determined in accordance with GAAP
consistently applied) of not less than $35,000,000.00. For purpose of
calculating net worth under this Subsection 10(B), CoBank and the Company agree
that Cumulative Recourse Offered Preferred Securities ("CROPS") will not be
deemed liabilities.
(C) LONG-TERM DEBT TO NET WORTH. The Company and its consolidated
Subsidiaries will have a ratio of consolidated long-term debt (less the current
portion thereof) to consolidated net worth (both as determined in accordance
with GAAP consistently applied) of not more than: (i) .70 to 1 at the end of
each fiscal quarter of the Company through the quarters ending July 31, 2005;
and (ii) .65 to 1 at the end of each fiscal quarter thereafter. The definition
of net worth for purposes of the Section 10(C), shall be as modified by the last
sentence of Section 10(B) above.
SECTION 11. EVENTS OF DEFAULT. Each of the following shall constitute an
"Event of Default" under this agreement:
(A) PAYMENT DEFAULT. The Company should fail to make any payment to,
or to purchase any equity in, CoBank when due.
(B) REPRESENTATIONS AND WARRANTIES. Any representation or warranty
made or deemed made by the Company herein or in any Supplement, application,
agreement, certificate, or other document related to or furnished in connection
with this agreement or any Supplement shall prove to have been false or
misleading in any material respect on or as of the date made or deemed made.
(C) CERTAIN AFFIRMATIVE COVENANTS. The Company or, to the extent
required hereunder, any Subsidiary should fail to perform or comply with
Sections 8(A) through 8(H)(ii), 8(H)(vi), 8(H)(vii), 8(J) or any reporting
covenant set forth in any Supplement hereto, and such failure continues for 15
days after written notice thereof shall have been delivered by CoBank to the
Company.
(D) OTHER COVENANTS AND AGREEMENTS. The Company or, to the extent
required hereunder, any Subsidiary should fail to perform or comply with any
other covenant or agreement continued herein or in any other Loan Document or
shall use the proceeds of any loan for an unauthorized purpose.
(E) CROSS-DEFAULT. The Company should, after any applicable grace
period, breach or be in default under the terms of any other agreement between
the Company and CoBank.
(F) OTHER INDEBTEDNESS. The Company or any Subsidiary should fail to
pay when due any material indebtedness to any other person or entity for
borrowed money or any
Master Loan Agreement No. RIE089C -9-
long-term obligation for the deferred purchase price of property (including any
capitalized lease), or any other event occurs which, under any agreement or
instrument relating to such indebtedness or obligation, has the effect of
accelerating or permitting the acceleration of such indebtedness or obligation,
whether or not such indebtedness or obligation is actually accelerated or the
right to accelerate is conditioned on the giving of notice, the passage of time,
or otherwise.
(G) JUDGMENTS. A judgment, decree, or order for the payment of money
shall be rendered against the Company or any Subsidiary and either: (i)
enforcement proceedings shall have been commenced; (ii) a Lien prohibited under
Section 9(B) hereof shall have been obtained; or (iii) such judgment, decree,
order shall continue unsatisfied and in effect for a period of 20 consecutive
days without being vacated, discharged, satisfied, or stayed pending appeal.
(H) INSOLVENCY, ETC. The Company or any Subsidiary shall: (i) become
insolvent or shall generally not, or shall be unable to, or shall admit in
writing its inability to, pay its debts as they come due; or (ii) suspend its
business operations or a material part thereof or make an assignment for the
benefit of creditors; or (iii) apply for, consent to, or acquiesce in the
appoint of a trustee, receiver, or other custodian for it or any of its property
or, in the absence of such application, consent, or acquiescence, a trustee,
receiver, or other custodian is so appointed; or (iv) commence or have commenced
against it any proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution, or liquidation Law of any jurisdiction.
(I) MATERIAL ADVERSE CHANGE. Any material adverse change occurs, as
reasonably determined by CoBank, in the Company's financial condition, results
of operations, or ability to perform its obligations hereunder or under any
instrument or document contemplated hereby.
(J) GUARANTEES, ETC. Any guarantee, suretyship, subordination
agreement, maintenance agreement, or other agreement furnished in connection
with the Company's obligations hereunder and under any Supplement (including the
Continuing Guarantee of Diamond Nut Company of California, Inc. dated February
23, 2004) shall, at any time, cease to be in full force and effect, or shall be
revoked or declared null and void, or the validity or enforceability thereof
shall be contested by the guarantor, surety or other maker thereof (the
"Guarantor"), or the Guarantor shall deny any further liability or obligation
thereunder, or shall fail to perform its obligations thereunder, or any
representation or warranty set forth therein shall be breached, or the Guarantor
shall breach or be in default under the terms of any other agreement with CoBank
(including any loan agreement or security agreement), or a default set forth in
Subsections (F) through (I) hereof shall occur with respect to the Guarantor.
SECTION 12. REMEDIES. Upon the occurrence and during the continuance of an
Event of Default or any Potential Default, CoBank shall have no obligation to
continue to extend credit to the Company and may discontinue doing so at any
time without prior notice. For all purposes hereof, the term "Potential Default"
means the occurrence of any event which, with the passage of time or the giving
of notice or both would become an Event of Default. In addition, upon the
occurrence and during the continuance of any Event of Default, CoBank may, upon
notice to the Company, terminate any commitment and declare the entire unpaid
principal balance of the loans, all accrued interest thereon, and all other
amounts payable under this agreement, all
Master Loan Agreement No. RIE089C -10-
Supplements, and the other Loan Documents to be immediately due and payable.
Upon such a declaration, the unpaid principal balance of the loans and all such
other amounts shall become immediately due and payable, without protest,
presentation, demand, or further notice of any kind, all of which are hereby
expressly waived by the Company. In addition, upon such an acceleration:
(A) ENFORCEMENT. CoBank may proceed to protect, exercise, and
enforce such rights and remedies as may be provided by this agreement, any other
Loan Document or under Law. Each and every one of such rights and remedies shall
be cumulative and may be exercised from time to time, and no failure on the part
of CoBank to exercise, and no delay in exercising, any right or remedy shall
operate as a waiver thereof, and no single or partial exercise of any right or
remedy shall preclude any other or future exercise thereof, or the exercise of
any other right. Without limiting the foregoing, CoBank may hold and/or set off
and apply against the Company's obligations to CoBank the proceeds of any equity
in CoBank, any cash collateral held by CoBank, or any balances held by CoBank
for the Company's account (whether or not such balances are then due).
(B) APPLICATION OF FUNDS. CoBank may apply all payments received by
it to the Company's obligations to CoBank in such order and manner as CoBank may
elect in its sole discretion.
In addition to the rights and remedies set forth above: (i) if the Company fails
to purchase any equity in CoBank when required or fails to make any payment to
CoBank when due, then at CoBank's option in each instance, such payment shall
bear interest from the date due to the date paid at 4% per annum in excess of
the rate(s) of interest that would otherwise be in effect on that loan; (and
(ii) after the maturity of any loan (whether as a result of acceleration or
otherwise), the unpaid principal balance of such loan (including without
limitation, principal, interest, fees and expenses) shall automatically bear
interest at 4% per annum in excess of the rate(s) of interest that would
otherwise be in effect on that loan. All interest provided for herein shall be
payable on demand and shall be calculated on the basis of a year consisting of
360 days.
SECTION 13. BROKEN FUNDING SURCHARGE. Notwithstanding any provision
contained in any Supplement giving the Company the right to repay any loan prior
to the date it would otherwise be due any payable, the Company agrees to provide
three Business Days' prior written notice for any prepayment of a fixed rate
balance and that in the event it repays any fixed rate balance prior to its
scheduled due date or prior to the last day of the fixed rate period applicable
thereto (whether such payment is made voluntarily, as a result of an
acceleration, or otherwise), the Company will pay to CoBank a surcharge in an
amount equal to the greater of: (i) an amount which would result in CoBank being
made whole (on a present value basis) for the actual or inputted funding losses
incurred by CoBank as a result thereof; or (ii) $300.00. Notwithstanding the
foregoing, in the event any fixed rate balance is repaid as a result of the
Company refinancing the loan with another lender or by other means, than in lieu
of the foregoing, the Company shall pay to CoBank a surcharge in an amount
sufficient (on a present value basis) to enable CoBank to maintain the yield it
would have earned during the fixed rate period on the amount repaid. Such
surcharges will be calculated in accordance with methodology established by
CoBank (a copy of which will be made available to the Company upon request).
Master Loan Agreement No. RIE089C -11-
SECTION 14. COMPLETE AGREEMENT, AMENDMENTS. This agreement, all
Supplements, and all other instruments and documents contemplated hereby and
thereby, are intended by the parties to be a complete and final expression of
their agreement. No amendment, modification, or waiver of any provision hereof
or thereof, and no consent to any departure by the Company herefrom or
therefrom, shall be effective unless approved by CoBank and contained in a
writing signed by or on behalf of CoBank, and then such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given. In the event this agreement is amended or restated, each such
amendment or restatement shall be applicable to all Supplements hereto.
SECTION 15. OTHER TYPES OF CREDIT. From time to time, CoBank may issue
letters of credit or extend other types of credit to or for the account of the
Company. In the event the parties desire to do so under the terms of this
agreement, such extensions of credit may be set forth in any Supplement hereto
and this agreement shall be applicable thereto.
SECTION 16. APPLICABLE LAW. Except to the extent governed by applicable
federal law, this agreement and each Supplement shall be governed by and
construed in accordance with the laws of the State of Colorado, without
reference to choice of law doctrine.
SECTION 17. NOTICES. All notices hereunder shall be in writing and shall
be deemed to be duly given upon delivery if personally delivered or sent by
telegram or facsimile transmission, or three days after mailing if sent by
express, certified or registered mail, to the parties at the following addresses
(or such other address for a party as shall be specified by like notice):
If to CoBank, as follows: If to the Company, as follows:
For general correspondence purposes: Diamond Walnut Growers, Inc.
X.X. Xxx 0000 X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000-0000 Xxxxxxxx, Xxxxxxxxxx 00000-0000
For direct delivery purposes, when
desired:
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Credit Information Services Attention: Vice President/CFO
Fax No.: (000) 000-0000 Fax No.: (000) 000-0000
SECTION 18. TAXES AND EXPENSES. To the extent allowed by law, the Company
agrees to pay all reasonable out-of-pocket costs and expenses (including the
fees and expenses of counsel retained or employed by CoBank) incurred by CoBank
and any participants from CoBank in connection with the origination,
administration, collection, and enforcement of this agreement and the other Loan
Documents, including, without limitation, all costs and expenses incurred in
perfecting, maintaining, determining the priority of, and releasing any security
for the Company's obligations to: CoBank, and any stamp, intangible, transfer,
or like tax payable in connection with this agreement or any other Loan
Document.
Master Loan Agreement No. RIE089C -12-
SECTION 19. EFFECTIVENESS AND SEVERABILITY. This agreement shall continue
in effect until: (i) all indebtedness and obligations of the Company under this
agreement, all Supplements, and all other Loan Documents shall have been paid or
satisfied; (ii) CoBank has no commitments to extend credit to or for the account
of the Company under any Supplement; and (iii) either party sends written notice
to the other terminating this agreement. Any provision of this agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or thereof.
SECTION 20. SUCCESSORS AND ASSIGNS. This agreement, each Supplement, and
the other Loan Documents shall be binding upon and inure to the benefit of the
Company and CoBank and their respective successors and assigns, except that the
Company may not assign or transfer its rights or obligations under this
agreement, any Supplement or any other Loan Document without the prior written
consent of CoBank.
SECTION 21. PARTICIPATIONS, ETC. From time to time, CoBank may sell to one
or more banks, financial institutions or other lenders a participation in one or
more of the loans or other extensions of credit made pursuant to this agreement.
However, no such participation shall relieve CoBank of any commitment made to
the Company under any Supplement hereto. In connection with the foregoing,
CoBank may disclose information concerning the Company and its Subsidiaries to
any participant or prospective participant, provided that such participant or
prospective participant agrees to keep such information confidential. CoBank
agrees that all Loans that are made by CoBank and that are retained for its own
account and are not included in a sale of participation interest shall be
entitled to patronage distributions in accordance with the bylaws of CoBank and
its practices and procedures related to patronage distribution. Accordingly, all
Loans that are included in a sale of participation interest shall not be
entitled to patronage distributions. A sale of participation interest may
include certain voting rights of the participants regarding the loans hereunder
(including without limitation the administration, servicing and enforcement
thereof). CoBank agrees to give written notification to the Company of any sale
of participation interests.
SECTION 22. FOREIGN EXCHANGE. At the Company's request, CoBank may, but
shall not be obligated to, purchase from and sell to the Company foreign
currency in such amounts and with such settlement dates (including dates
extending beyond the term of the Commitment) as may be agreeable to CoBank in
its sole discretion in each instance (a "FX Transaction"). Each FX Transaction
shall be evidence by such documentation as CoBank and the Company may agree and
shall reduce the amount available under the Commitment by 20% of the face amount
of the FX Transaction. If on any settlement date, the Company fails to remit
sufficient funds to CoBank to meet its obligations, the Company shall be deemed
to have requested a loan (in the U.S. dollar equivalent) from CoBank bearing
interest at the variable rate option, as of the settlement date, the proceeds of
which shall be used to pay such obligations. Such requested loan shall only be
made upon approval of CoBank in its sole discretion in each instance. If such
loan is not made by CoBank for any reason, the unpaid amount of such obligations
(together with any damages incurred by CoBank) shall be and remain immediately
due and payable to CoBank and shall bear interest until paid at the variable
rate option plus 4% per annum.
Master Loan Agreement No. RIE089C -13-
IN WITNESS WHEREOF, the parties have caused this agreement to be executed
by their duly authorized officers as of the date shown above.
COBANK, ACB DIAMOND WALNUT GROWERS, INC.
By: /s/ Xxxxxx Xxxxxx By: /s/ Xxxx Xxxxxxx
-------------------------------- --------------------------------
Title: Ass't Corporate Secretary Title: Vice President - Controller
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