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AMENDED AND RESTATED SECURED CREDIT AGREEMENT
Among
PILGRIM'S PRIDE CORPORATION
And
XXXXXX TRUST AND SAVINGS BANK
INDIVIDUALLY AND AS AGENT
AND
FBS Ag Credit, Inc.
COBANK, ACB
ING (U.S.) Capital Corporation
XXXXX FARGO BANK (TEXAS), X.X.
Xxxxxx Nationale de Credit Agricole, Chicago Branch
Dated as of August 11, 1997
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TABLE OF CONTENTS
Pilgrim's Pride Corporation
AMENDED AND RESTATED SECURED CREDIT AGREEMENT
Exhibit A Secured Revolving Credit Note
Exhibit B Application and Agreement for Letter of Credit
Exhibit C Environmental Disclosure
Exhibit D Permitted Liens
Exhibit E Form of Legal Opinion
Exhibit F Compliance Certificate
Exhibit G Borrowing Base Certificate
Exhibit H Subsidiaries
Exhibit I Accounts Receivable Aging Report
Exhibit JLabor Disputes
Exhibit K Intercreditor Agreement
Exhibit L Competitive Bid Request Confirmation
Exhibit M Confirmation of Notice of Competitive Bid Request
Exhibit N Confirmation of Competitive Bid
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Pilgrim's Pride Corporation
AMENDED AND RESTATED
Secured Credit Agreement
Xxxxxx Trust and Savings Bank
Chicago, Illinois
FBS Ag Credit, Inc.
Denver, Colorado
CoBank, ACB
Wichita, Kansas
ING (U.S.) Capital Corporation ("ING ")
New York, New York
Xxxxx Fargo Bank (Texas), N.A.
Dallas, Texas
Caisse Nationale de Credit Agricole, Chicago Branch
Chicago, Illinois
Ladies and Gentlemen:
The undersigned, PILGRIM'S PRIDE CORPORATION, a Delaware corporation
(the "COMPANY"), refers to the Secured Credit Agreement dated as of May 27,
1993, as amended and currently in effect between the Company and you (such
Secured Credit Agreement as so amended is hereinafter referred to as the
"CREDIT AGREEMENT") pursuant to which you agreed to make a revolving credit
(the "REVOLVING CREDIT") available to the Company, all as more fully set
forth therein. Each of you is hereinafter referred to individually as
"BANK" and collectively as "BANKS." Xxxxxx Trust and Savings Bank in its
individual capacity is sometimes referred to herein as "XXXXXX", and in its
capacity as Agent for the Banks is hereinafter in such capacity called the
"AGENT." The Company requests you to make certain further amendments to
the Credit Agreement and, for the sake of convenience and clarity, to
restate the Credit Agreement in its entirety as so amended. Accordingly,
upon your acceptance hereof in the space provided for that purpose below
and upon satisfaction of the conditions precedent to effectiveness
hereinafter set forth, Section 1 through 11 of the Credit Agreement and
Exhibits A through P thereto shall be amended and as so amended shall be
restated in their entirety to read as follows:
"1. THE REVOLVING CREDIT.
SECTION 1.1. THE REVOLVING CREDIT. (a) Subject to all of the terms and
conditions hereof, the Banks agree, severally and not jointly, to extend a
Revolving Credit to the Company which may be utilized by the Company in the
form of loans (individually a "REVOLVING CREDIT LOAN" and collectively the
"REVOLVING CREDIT LOANS"), and L/Cs (as hereinafter defined). The
aggregate principal amount of all Revolving Credit Loans under the
Revolving Credit plus the aggregate principal amount of all Bid Loans
outstanding under this Agreement plus the amount available for drawing
under all L/Cs and the aggregate principal amount of all unpaid
Reimbursement Obligations (as hereinafter defined) at any time outstanding
shall not exceed the lesser of (i) the sum of the Banks' Revolving Credit
Commitments (as hereinafter defined) in effect from time to time during the
term of this Agreement (as hereinafter defined) or (ii) the Borrowing Base
as determined on the basis of the most recent Borrowing Base Certificate.
The Revolving Credit shall be available to the Company, and may be availed
of by the Company from time to time, be repaid (subject to the restrictions
on prepayment set forth herein) and used again, during the period from the
date hereof to and including May 31, 2000 (the "TERMINATION DATE").
(b) At any time not earlier than 120 days prior to, nor later than 60
days prior to, the date that is two years before the Termination Date then
in effect (the "ANNIVERSARY DATE"), the Company may request that the Banks
extend the then scheduled Termination Date to the date one year from such
Termination Date. If such request is made by the Company each Bank shall
inform the Agent of its willingness to extend the Termination Date no later
than 20 days prior to such Anniversary Date. Any Bank's failure to respond
by such date shall indicate its unwillingness to agree to such requested
extension, and all Banks must approve any requested extension. At any time
more than 15 days before such Anniversary Date the Banks may propose, by
written notice to the Company, an extension of this Agreement to such later
date on such terms and conditions as the Banks may then require. If the
extension of this Agreement to such later date is acceptable to the Company
on the terms and conditions proposed by the Banks, the Company shall notify
the Banks of its acceptance of such terms and conditions no later than the
Anniversary Date, and such later date will become the Termination Date
hereunder and this Agreement shall otherwise be amended in the manner
described in the Banks' notice proposing the extension of this Agreement
upon the Agent's receipt of (i) an amendment to this Agreement signed by
the Company and all of the Banks, (ii) resolutions of the Company's Board
of Directors authorizing such extension and (iii) an opinion of counsel to
the Company equivalent in form and substance to the form of opinion
attached hereto as Exhibit E and otherwise acceptable to the Banks.
(c) The respective maximum aggregate principal amounts of the
Revolving Credit at any one time outstanding and the percentage of the
Revolving Credit available at any time which each Bank by its acceptance
hereof severally agrees to make available to the Company are as follows
(collectively, the "REVOLVING CREDIT COMMITMENTS" and individually, a
"REVOLVING CREDIT COMMITMENT"):
Xxxxxx Trust and Savings Bank $ 26,666,667 26.66666667%
FBS Ag Credit, Inc. $ 20,000,000 20%
CoBank, ACB $ 20,000,000 20%
ING (U.S.) Capital Corporation $ 13,333,333 13.33333334%
Xxxxx Fargo Bank (Texas), N.A. $ 10,000,000 10%
Caisse Nationale de Credit
Agricole, Chicago Branch $ 10,000,000 10%
Total $100,000,000 100%
Each Bank's Revolving Credit Commitment shall be reduced from time to time
by the aggregate outstanding principal amount of all Bid Loans made by such
Bank, and shall be increased (but in no event above the amount set forth
above for each Bank) by the aggregate principal amount of each principal
repayment of such Bid Loans made from time to time.
(d) Loans under the Revolving Credit may be Eurodollar Loans, CD Rate
Loans or Domestic Rate Loans. All Loans under the Revolving Credit shall
be made from each Bank in proportion to its respective Revolving Credit
Commitment as above set forth, as adjusted from time to time to reflect
outstanding Bid Loans. Each Domestic Rate Loan shall be in an amount not
less than $3,000,000 or such greater amount which is an integral multiple
of $500,000 and each Fixed Rate Loan shall be in an amount not less than
$3,000,000 or such greater amount which is an integral multiple of
$1,000,000.
SECTION 1.2. THE NOTES. All Revolving Credit Loans made by each Bank
hereunder shall be evidenced by a single Secured Revolving Credit Note of
the Company substantially in the form of Exhibit A hereto (individually, a
"REVOLVING NOTE" and together, the "REVOLVING NOTES") payable to the order
of each Bank. The aggregate principal amount of indebtedness evidenced by
such Revolving Note at any time shall be, and the same is to be determined
by, the aggregate principal amount of all Revolving Credit Loans and Bid
Loans made by such Bank to the Company pursuant hereto on or prior to the
date of determination less the aggregate amount of principal repayments on
such Revolving Credit Loans and Bid Loans received by or on behalf of such
Bank on or prior to such date of determination. Each Revolving Note shall
be dated as of the execution date of this Agreement, and shall be expressed
to mature on the Termination Date and to bear interest as provided in
Section 1.3 hereof. Each Bank shall record on its books or records or on a
schedule to its Revolving Note the amount of each Revolving Credit Loan and
Bid Loan made by it hereunder, whether each Revolving Credit Loan is a
Domestic Rate Loan, CD Rate Loan or Eurodollar Loan, and, with respect to
Fixed Rate Loans and Bid Loans, the interest rate and Interest Period
applicable thereto, and all payments of principal and interest and the
principal balance from time to time outstanding, provided that prior to any
transfer of such Revolving Note all such amounts shall be recorded on a
schedule to such Revolving Note. The record thereof, whether shown on such
books or records or on the schedule to the Revolving Note, shall be PRIMA
FACIE evidence as to all such amounts; provided, however, that the failure
of any Bank to record or any mistake in recording any of the foregoing
shall not limit or otherwise affect the obligation of the Company to repay
all Revolving Credit Loans and Bid Loans made hereunder together with
accrued interest thereon. Upon the request of any Bank, the Company will
furnish a new Revolving Note to such Bank to replace its outstanding
Revolving Note and at such time the first notation appearing on the
schedule on the reverse side of, or attached to, such Revolving Note shall
set forth the aggregate unpaid principal amount of Revolving Credit Loans
and Bid Loans then outstanding from such Bank, and, with respect to each
Fixed Rate Loan, the interest rate and Interest Period applicable thereto.
Such Bank will cancel the outstanding Revolving Note upon receipt of the
new Revolving Note.
SECTION 1.3. INTEREST RATES. (a) DOMESTIC RATE LOANS. Each Domestic
Rate Loan shall bear interest (computed on the basis of a year of 360 days
and actual days elapsed) on the unpaid principal amount thereof from the
date such Loan is made until maturity (whether by acceleration, upon
prepayment or otherwise) at a rate per annum equal to the lesser of (i) the
Highest Lawful Rate and (ii) the sum of the Applicable Margin plus the
Domestic Rate from time to time in effect, payable quarterly in arrears on
the last day of each calendar quarter, commencing on the first of such
dates occurring after the date hereof and at maturity (whether by
acceleration, upon prepayment or otherwise).
(b) EURODOLLAR LOANS. Each Eurodollar Loan under the Revolving
Credit shall bear interest (computed on the basis of a year of 360 days and
actual days elapsed) on the unpaid principal amount thereof from the date
such Loan is made until the last day of the Interest Period applicable
thereto or, if earlier, until maturity (whether by acceleration or
otherwise) at a rate per annum equal to the lesser of (i) the Highest
Lawful Rate and (ii) the sum of the Applicable Margin plus the Adjusted
Eurodollar Rate, payable on the last day of each Interest Period applicable
thereto and at maturity (whether by acceleration or otherwise) and, with
respect to Eurodollar Loans with an Interest Period in excess of three
months, on the date occurring every three months from the first day of the
Interest Period applicable thereto.
(c) CD RATE LOANS. Each CD Rate Loan under the Revolving Credit
shall bear interest (computed on the basis of a year of 360 days and actual
days elapsed) on the unpaid principal amount thereof from the date such
Loan is made until the last day of the Interest Period applicable thereto
or, if earlier, until maturity (whether by acceleration or otherwise) at a
rate per annum equal to the lesser of (i) the Highest Lawful Rate and (ii)
the sum of the Applicable Margin plus the Adjusted CD Rate, payable on the
last day of each Interest Period applicable thereto and at maturity
(whether by acceleration of otherwise) and, with respect to CD Rate Loans
with an Interest Period in excess of 90 days, on the date occurring every
90 days from the first day of the Interest Period applicable thereto.
(d) DEFAULT RATE. During the existence of an Event of Default all
Loans and Reimbursement Obligations shall bear interest (computed on the
basis of a year of 360 days and actual days elapsed) from the date of such
Event of Default until paid in full, payable on demand, at a rate per annum
equal to the sum of 2.5% plus the Domestic Rate from time to time in effect
plus the Applicable Margin.
SECTION 1.4. CONVERSION AND CONTINUATION OF REVOLVING CREDIT LOANS.
(a) Provided that no Event of Default or Potential Default has occurred and
is continuing, the Company shall have the right, subject to the other terms
and conditions of this Agreement, to continue in whole or in part (but, if
in part, in the minimum amount specified for Fixed Rate Loans in
Section 1.1 hereof) any Fixed Rate Loan made under the Revolving Credit
from any current Interest Period into a subsequent Interest Period,
provided that the Company shall give the Agent notice of the continuation
of any such Loan as provided in Section 1.7 hereof.
(b) In the event that the Company fails to give notice pursuant to
Section 1.7 hereof of the continuation of any Fixed Rate Loan under the
Revolving Credit or fails to specify the Interest Period applicable
thereto, or an Event of Default or Potential Default has occurred and is
continuing at the time any such Loan is to be continued hereunder, then
such Loan shall be automatically converted as (and the Company shall be
deemed to have given notice requesting) a Domestic Rate Loan, subject to
Sections 1.7(b), 8.2 and 8.3 hereof, unless paid in full on the last day of
the then applicable Interest Period.
(c) Provided that no Event of Default or Potential Default has
occurred and is continuing, the Company shall have the right, subject to
the terms and conditions of this Agreement, to convert Revolving Credit
Loans of one type (in whole or in part) into Revolving Credit Loans of
another type from time to time provided that: (i) the Company shall give
the Agent notice of each such conversion as provided in Section 1.7 hereof,
(ii) the principal amount of any Revolving Credit Loan converted hereunder
shall be in an amount not less than the minimum amount specified for the
type of Revolving Credit Loan in Section 1.1 hereof, (iii) after giving
effect to any such conversion in part, the principal amount of any Fixed
Rate Loan under the Revolving Credit then outstanding shall not be less
than the minimum amount specified for the type of Loan in Section 1.1
hereof, (iv) any conversion of a Revolving Credit Loan hereunder shall only
be made on a Banking Day, and (v) any Fixed Rate Loan may be converted only
on the last day of the Interest Period then applicable thereto.
SECTION 1.5. LETTERS OF CREDIT. Subject to all the terms and conditions
hereof, satisfaction of all conditions precedent to borrowing under this
Agreement and so long as no Potential Default or Event of Default is in
existence, at the Company's request Xxxxxx may in its discretion issue
letters of credit (an "L/C" and collectively the "L/Cs") for the account of
the Company subject to availability under the Revolving Credit, and the
Banks hereby agree to participate therein as more fully described in
Section 1.8 hereof. Each L/C shall be issued pursuant to an Application
for Letter of Credit (the "L/C Agreement") in the form of Exhibit B hereto.
The L/Cs shall consist of standby letters of credit in an aggregate face
amount not to exceed $20,000,000. Each L/C shall have an expiry date not
more than one year from the date of issuance thereof (but in no event later
than the Termination Date). The amount available to be drawn under each
L/C issued pursuant hereto shall be deducted from the credit otherwise
available under the Revolving Credit. In consideration of the issuance of
L/Cs the Company agrees to pay Xxxxxx a fee (the "L/C FEE") in the amount
per annum equal to (a) 1.0% of the face amount of each Performance L/C and
(b) the Applicable Margin for Eurodollar Loans of the stated amount of each
Financial Guarantee L/C (in each case computed on the basis of a 360 day
year and actual days elapsed) of the face amount for any L/C issued
hereunder. In addition the Company shall pay Xxxxxx for its own account an
issuance fee (the "L/C ISSUANCE FEE") in an amount equal to one-eighth of
one percent (0.125%) of the stated amount of each L/C issued by Xxxxxx
hereunder. All L/C Fees shall be payable quarterly in arrears on the last
day of each calendar quarter and on the Termination Date, and all L/C
Issuance Fees shall be payable on the date of issuance of each L/C
hereunder and on the date of each extension, if any, of the expiry date of
each L/C.
SECTION 1.6. REIMBURSEMENT OBLIGATION. The Company is obligated, and
hereby unconditionally agrees, to pay in immediately available funds to the
Agent for the account of Xxxxxx and the Banks who are participating in L/Cs
pursuant to Section 1.8 hereof the face amount of each draft drawn and
presented under an L/C issued by Xxxxxx hereunder not later than 11:00 a.m.
(Chicago Time) on the date such draft is presented for payment to Xxxxxx
(the obligation of the Company under this Section 1.7 with respect to any
L/C is a "REIMBURSEMENT OBLIGATION"). If at any time the Company fails to
pay any Reimbursement Obligation when due, the Company shall be deemed to
have automatically requested a Domestic Rate Loan from the Banks hereunder,
as of the maturity date of such Reimbursement Obligation, the proceeds of
which Loan shall be used to repay such Reimbursement Obligation. Such Loan
shall only be made if no Potential Default or Event of Default shall exist
and upon approval by all of the Banks, and shall be subject to availability
under the Revolving Credit. If such Loan is not made by the Banks for any
reason, the unpaid amount of such Reimbursement Obligation shall be due and
payable to the Agent for the pro rata benefit of the Banks upon demand and
shall bear interest at the rate of interest specified in Section 1.3(d)
hereof.
SECTION 1.7. MANNER OF BORROWING AND RATE SELECTION. (a) The Company
shall give telephonic, telex or telecopy notice to the Agent (which notice,
if telephonic, shall be promptly confirmed in writing) no later than (i)
11:00 a.m. (Chicago time) on the date the Banks are requested to make each
Domestic Rate Loan, (ii) 11:00 a.m. (Chicago time) on the date at least
three (3) Banking Days prior to the date of (A) each Eurodollar Loan which
the Banks are requested to make or continue, and (B) the conversion of any
CD Rate Loan or Domestic Rate Loan into a Eurodollar Loan and (iii) 11:00
a.m. (Chicago time) on the date at least one (1) Business Day prior to the
date of (A) each CD Rate Loan which the Banks are requested to make and (B)
the conversion of any Eurodollar Loan or Domestic Rate Loan into a CD Rate
Loan. Each such notice shall specify the date of the Revolving Credit Loan
requested (which shall be a Business Day in the case of Domestic Rate Loans
and CD Rate Loans and a Banking Day in the case of a Eurodollar Loan), the
amount of such Revolving Credit Loan, whether the Revolving Credit Loan is
to be made available by means of a Domestic Rate Loan, CD Rate Loan or
Eurodollar Loan and, with respect to Fixed Rate Loans, the Interest Period
applicable thereto; provided, that in no event shall the principal amount
of any requested Revolving Credit Loan plus the aggregate principal or face
amount, as appropriate, of all Revolving Credit Loans, L/Cs, and unpaid
Reimbursement Obligations outstanding hereunder exceed the amounts
specified in Section 1.1 hereof. The Company agrees that the Agent may
rely on any such telephonic, telex or telecopy notice given by any person
who the Agent believes is authorized to give such notice without the
necessity of independent investigation and in the event any notice by such
means conflicts with the written confirmation, such notice shall govern if
any Bank has acted in reliance thereon. The Agent shall, no later than
12:30 p.m. (Chicago time) on the day any such notice is received by it,
give telephonic, telex or telecopy (if telephonic, to be confirmed in
writing within one Business Day) notice of the receipt of notice from the
Company hereunder to each of the Banks, and, if such notice requests the
Banks to make, continue or convert any Fixed Rate Loans, the Agent shall
confirm to the Company by telephonic, telex or telecopy means, which
confirmation shall be conclusive and binding on the Company in the absence
of manifest error, the Interest Period and the interest rate applicable
thereto promptly after such rate is determined by the Agent.
(b) Subject to the provisions of Section 6 hereof, the proceeds of
each Revolving Credit Loan shall be made available to the Company at the
principal office of the Agent in Chicago, Illinois, in immediately
available funds, on the date such Revolving Credit Loan is requested to be
made, except to the extent such Revolving Credit Loan represents (i) the
conversion of an existing Revolving Credit Loan or (ii) a refinancing of a
Reimbursement Obligation, in which case each Bank shall record such
conversion on the schedule to its Revolving Note, or in lieu thereof, on
its books and records, and shall effect such conversion or refinancing, as
the case may be, on behalf of the Company in accordance with the provisions
of Section 1.4(a) hereof and 1.8 hereof, respectively. Not later than
2:00 p.m. Chicago time, on the date specified for any Revolving Credit Loan
to be made hereunder, each Bank shall make its portion of such Revolving
Credit Loan available to the Company in immediately available funds at the
principal office of the Agent, except (i) as otherwise provided above with
respect to converting or continuing any outstanding Revolving Credit Loans
and (ii) to the extent such Revolving Credit Loan represents a refinancing
of any outstanding Reimbursement Obligations.
(c) Unless the Agent shall have been notified by a Bank prior to
1:00 p.m. (Chicago time) on the date a Revolving Credit Loan is to be made
by such Bank (which notice shall be effective upon receipt) that such Bank
does not intend to make the proceeds of such Revolving Credit Loan
available to the Agent, the Agent may assume that such Bank has made such
proceeds available to the Agent on such date and the Agent may in reliance
upon such assumption (but shall not be required to) make available to the
Company a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Bank, the Agent shall be entitled
to receive such amount on demand from such Bank (or, if such Bank fails to
pay such amount forthwith upon such demand, to recover such amount,
together with interest thereon at the rate otherwise applicable thereto
under Section 1.3 hereof, from the Company) together with interest thereon
in respect of each day during the period commencing on the date such amount
was made available to the Company and ending on the date the Agent recovers
such amount, at a rate per annum equal to the effective rate charged to the
Agent for overnight Federal funds transactions with member banks of the
Federal Reserve System for each day, as determined by the Agent (or, in the
case of a day which is not a Business Day, then for the preceding Business
Day) (the "FED FUNDS RATE"). Nothing in this Section 1.7(c) shall be
deemed to permit any Bank to breach its obligations to make Loans under the
Revolving Credit or to limit the Company's claims against any Bank for such
breach.
SECTION 1.8. PARTICIPATION IN L/Cs. Each of the Banks will acquire a
risk participation for its own account, without recourse to or
representation or warranty from Xxxxxx, in each L/C upon the issuance
thereof ratably in accordance with its Commitment Percentage. In the event
any Reimbursement Obligation is not immediately paid by the Company
pursuant to Section 1.6 hereof, each Bank will pay to Xxxxxx funds in an
amount equal to such Bank's ratable share of the unpaid amount of such
Reimbursement Obligation (based upon its proportionate share relative to
its percentage of the Revolving Credit (as set forth in Section 1.1
hereof)). At the election of all of the Banks, such funding by the Banks
of the unpaid Reimbursement Obligations shall be treated as additional
Revolving Credit Loans to the Company hereunder rather than a purchase of
participations by the Banks in the related L/Cs held by Xxxxxx. The
availability of funds to the Company under the Revolving Credit shall be
reduced in an amount equal to any such L/C. The obligation of the Banks to
Xxxxxx under this Section 1.8 shall be absolute and unconditional and shall
not be affected or impaired by any Event of Default or Potential Default
which may then be continuing hereunder. Xxxxxx shall notify each Bank by
telephone of its proportionate share relative to its percentage of the
total Banks' Revolving Credit Commitments set forth in Section 1.1 hereof
(a "COMMITMENT PERCENTAGE") of such unpaid Reimbursement Obligation. If
such notice has been given to each Bank by 12:00 Noon, Chicago time, each
Bank agrees to pay Xxxxxx in immediately available and freely transferable
funds on the same Business Day. If such notice is received after 12:00
noon, Chicago time, each Bank agrees to pay Xxxxxx in immediately available
and freely transferable funds no later than the following Business Day.
Funds shall be so made available at the account designated by Xxxxxx in
such notice to the Banks. Upon the election by the Banks to treat such
funding as additional Revolving Credit Loans hereunder and payment by each
Bank, such Loans shall bear interest in accordance with Section 1.3(a)
hereof. Xxxxxx shall share with each Bank on a pro rata basis relative to
its Commitment Percentage a portion of each payment of a Reimbursement
Obligation (whether of principal or interest) and any L/C Fee (but not any
L/C Issuance Fee) payable by the Company. Any such amount shall be
promptly remitted to the Banks when and as received by Xxxxxx from the
Company.
SECTION 1.9. CAPITAL ADEQUACY. If, after the date hereof, any Bank or
the Agent shall have determined in good faith that the adoption of any
applicable law, rule or regulation regarding capital adequacy, or any
change therein (including, without limitation, any revision in the Final
Risk-Based Capital Guidelines of the Board of Governors of the Federal
Reserve System (12 CFR Part 208, Appendix A; 00 XXX Xxxx 000, Xxxxxxxx X)
or of the Office of the Comptroller of the Currency (12 CFR Part 3,
Appendix A), or in any other applicable capital rules heretofore adopted
and issued by any governmental authority), or any change in the
interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its Lending Office)
with any request or directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Bank's capital, or on the capital of any corporation controlling such Bank,
in each case as a consequence of its obligations hereunder to a level below
that which such Bank would have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount reasonably deemed by such Bank to be
material, then from time to time, within fifteen (15) days after demand by
such Bank (with a copy to the Agent), the Company shall pay to such Bank
such additional amount or amounts as will compensate such Bank for such
reduction.
2. THE COMPETITIVE BID FACILITY.
SECTION 2.1. AMOUNT AND TERM. The Company may from time to time before
the Termination Date request Competitive Bids from the Banks and the Banks
may make, at their sole discretion, Bid Loans to the Company on the terms
and conditions set forth in this Agreement. Notwithstanding any provision
to the contrary contained in this Agreement, (a) the aggregate principal
amount of all Bid Loans outstanding hereunder at any time may not exceed
$50,000,000, (b) no Bank may make Bid Loans in an aggregate principal
amount in excess of the maximum amount of such Bank's Revolving Credit
Commitment set forth in Section 1.1(b) of this Agreement, and (c) the
aggregate principal amount of all Bid Loans outstanding hereunder at any
time together with the aggregate principal amount of all Revolving Credit
Loans outstanding under the Revolving Credit shall not exceed the Banks'
Revolving Credit Commitments from time to time in effect. The Company may
request Competitive Bids and the Banks may, in their discretion, make such
Competitive Bids on the terms and conditions set forth in this Section 2.
SECTION 2.2. COMPETITIVE BID REQUESTS. In order to request Competitive
Bids, the Company shall give telephonic notice to be received by the Agent
no later than 11:00 A.M., Chicago time, one Business Day before the date,
which must be a Business Day, on which a proposed Bid Loan is to be made
(the "BORROWING DATE"), followed on the same day by a duly completed
Competitive Bid Request Confirmation in the form of Exhibit N hereto to be
received by the Agent not later than 11:30 A.M., Chicago time. Competitive
Bid Request Confirmations that do not conform substantially to the format
of Exhibit N may be rejected and the Agent shall give telephonic notice to
the Company of such rejection promptly after it determines (which
determination shall be conclusive) that a Competitive Bid Request
Confirmation does not substantially conform to the format of Exhibit L.
Competitive Bid Requests shall in each case refer to this Agreement and
specify (x) the proposed Borrowing Date (which shall be a Business Day),
(y) the aggregate principal amount thereof (which shall not be less than
$3,000,000 and shall be an integral multiple of $1,000,000), and (z) up to
3 Interest Periods with respect to the entire amount specified in such
Competitive Bid Request (which must be of no less than 30 and no more than
180 days duration and may not end after the Termination Date). Upon
receipt by the Agent of a Competitive Bid Request Confirmation which
conforms substantially to the format of Exhibit L attached hereto, the
Agent shall invite, by telephone promptly confirmed in writing in the form
of Exhibit M attached hereto, the Banks to bid, on the terms and conditions
of this Agreement, to make Bid Loans pursuant to the Competitive Bid
Request.
SECTION 2.3. SUBMISSION OF COMPETITIVE BIDS. Each Bank may, in its sole
discretion, make one or more Competitive Bids to the Company responsive to
the Competitive Bid Request. Each Competitive Bid by a Bank must be
received by the Agent by telephone not later than 8:45 A.M., Chicago time,
on the Borrowing Date, promptly confirmed in writing by a duly completed
Confirmation of Competitive Bid substantially in the form of Exhibit N
attached hereto to be received by the Agent no later than 9:00 A.M. on the
same day; PROVIDED, HOWEVER, that any Competitive Bid made by Xxxxxx must
be made by telephone to the Company no later than 8:30 A.M., Chicago time,
and confirmed by telecopier to the Company no later than 8:45 A.M., Chicago
time, on the Borrowing Date. Competitive Bids which do not conform
precisely to the terms of this Section 2.3 may be rejected by the Agent and
the Agent shall notify the Bank submitting such Competitive Bid of such
rejection by telephone as soon as practicable after determining that the
Competitive Bid does not conform precisely to the terms of this
Section 2.3. Each Competitive Bid shall refer to this Agreement and
specify (x) the maximum principal amount (which shall not be less than
$3,000,000 and shall be an integral multiple of $1,000,000) of the Bid Loan
that the Bank is willing to make to the Company (y) the Yield (which shall
be computed on the basis of a 360-day year and actual days elapsed and for
a period equal to the Interest Period applicable thereto) at which the Bank
is prepared to make the Bid Loan and (z) the Interest Period applicable
thereto. The Agent shall reject any Competitive Bid if such Competitive
Bid (i) does not specify all of the information specified in the
immediately preceding sentence, (ii) contains any qualifying, conditional,
or similar language, (iii) proposes terms other than or in addition to
those set forth in the Competitive Bid Request to which it responds, or
(iv) is received by the Agent later than 8:45 A.M. (Chicago time). Any
Competitive Bid submitted by a Bank pursuant to this Section 2.3 shall be
irrevocable and shall be promptly confirmed in writing in the form of
Exhibit P; PROVIDED THAT in all events the telephone Competitive Bid
received by the Agent shall be binding on the relevant Bank and shall not
be altered, modified, or in any other manner affected by any inconsistent
terms contained in, or terms missing from, the Bank's Confirmation of
Competitive Bid.
SECTION 2.4. NOTICE OF BIDS. The Agent shall give telephonic notice to
the Company no later than 9:15 A.M., Chicago time, on the proposed
Borrowing Date, of the number of Competitive Bids made, the Yield with
respect to each proposed Bid Loan, the Interest Period applicable thereto
and the maximum principal amount of each Bid Loan in respect of which a
Competitive Bid was made and the identity of the Bank making each bid. The
Agent shall send a summary of all Competitive Bids received by the Agent to
the Company as soon as practicable after receipt of a Competitive Bid from
each Bank that has made a Competitive Bid.
SECTION 2.5. ACCEPTANCE OR REJECTION OF BIDS. The Company may in its
sole and absolute discretion, subject only to the provisions of this
Section, irrevocably accept or reject, in whole or in part, any Competitive
Bid referred to in Section 2.4 above. No later than 9:45 A.M., Chicago
time, on the proposed Borrowing Date, the Company shall give telephonic
notice to the Agent of whether and to what extent it has decided to accept
or reject any or all the Competitive Bids referred to in Section 2.4 above,
which notice shall be promptly confirmed in a writing to be received by the
Agent on the proposed Borrowing Date; PROVIDED, HOWEVER, that (x) no bid
shall be accepted for a Bid Loan in a minimum principal amount of less than
$3,000,000, (y) the Company shall accept bids solely on the basis of
ascending Yields for each Interest Period, (z) if the Company declines to
borrow, or it is restricted by other conditions hereof from borrowing, the
maximum principal amount of Bid Loans in respect of which bids at such
Yield have been made, then the Company shall accept a pro rata portion of
each bid made at the same Yield, based as nearly as possible on the ratio
of the maximum aggregate principal amounts of Bid Loans for which each such
bid was made (provided that if the available principal amount of Bid Loans
to be so allocated is not sufficient to enable Bid Loans to be so allocated
to each such Bank in integral multiples of $1,000,000, the Company shall
select which Banks will be allocated such Bid Loans and will round
allocations up or down to the next higher or lower multiple of $1,000,000
as it shall deem appropriate but in no event shall any Bid Loan be
allocated in a principal amount of less than $3,000,000), and (w) the
aggregate principal amount of all Competitive Bids accepted by the Company
shall not exceed the amount contained in the related Confirmation of
Competitive Bid Request. A notice given by the Company pursuant to this
Section 2.5 shall be irrevocable and shall not be altered, modified, or in
any other manner affected by any inconsistent terms contained in, or terms
missing from, any written confirmation of such notice.
SECTION 2.6. NOTICE OF ACCEPTANCE OR REJECTION OF BID. The Agent shall
promptly (but in any event no later than 10:30 A.M., Chicago time) give
telephonic notice to the Banks whether or not their Competitive Bids have
been accepted (and if so, in what amount and at what Yield) on the proposed
Borrowing Date, and each successful bidder will thereupon become bound,
subject to Section 7 and the other applicable conditions hereof, to make
the Bid Loan in respect of which its bid has been accepted. Each Bank so
bound shall notify the Agent upon making the Bid Loan. As soon as
practicable on each Borrowing Date, the Agent shall notify each Bank of the
aggregate principal amount of all Bid Loans made pursuant to a Competitive
Bid Request on such Borrowing Date, the Interest Period(s) applicable
thereto and the highest and lowest Yields at which such Bid Loans were made
for each Interest Period.
SECTION 2.7. RESTRICTIONS ON BID LOANS. A Bid Loan shall not be made if
an Event of Default or Potential Default shall have occurred and be
continuing on the date on which such Bid Loan is to be made and the Company
may not obtain more than three Bid Loans in any calendar week.
SECTION 2.8. MINIMUM AMOUNT. Each Bid Loan made to the Company on any
date shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $3,000,000. Bid Loans shall be made in the amounts
accepted by the Company in accordance with Section 2.5.
SECTION 2.9. THE NOTES. The Bid Loans made by each Bank to the Company
shall be evidenced by the Revolving Note of the Company payable to the
order of such Bank as described in Section 1.2. The outstanding principal
balance of each Bid Loan, as evidenced by a Note, shall be payable at the
end of every Interest Period applicable to such Bid Loan. Each Bid Loan
evidenced by each Revolving Note shall bear interest from the date such Bid
Loan is made on the outstanding principal balance thereof as set forth in
Section 2.10 below.
SECTION 2.10. TERM OF AND INTEREST ON BID LOANS. Each Bid Loan shall
bear interest during the Interest Period applicable thereto at a rate per
annum equal to the rate of interest offered in the Competitive Bid therefor
submitted by the Bank making such Bid Loan and accepted by the Company
pursuant to Section 2.5 above. The principal amount of each Bid Loan,
together with all accrued interest thereon, shall be due and payable on the
last day of the Interest Period applicable thereto and at maturity (whether
by acceleration or otherwise) and, with respect to any Interest Period in
excess of three months, interest on the unpaid principal amount shall be
due on the date occurring every three months after the date the relevant
Bid Loan was made. If any payment of principal or interest on any Bid Loan
is not made when due, such Bid Loan shall bear interest (computed on the
basis of a year of 360 days and actual days elapsed) from the date such
payment was due until paid in full, payable on demand, at a rate per annum
equal to the sum of 2.5% plus the rate of interest in effect thereon at the
time of such default until the end of the Interest Period then applicable
thereto, and, thereafter, at a rate per annum equal to the sum of 2.5 plus
the Domestic Rate from time to time in effect.
SECTION 2.11. DISBURSEMENT OF BID LOANS. (a) Subject to the provisions
of Section 6 hereof, the proceeds of each Bid Loan shall be made available
to the Company by, at the Company's option, crediting an account maintained
by the Company at Xxxxxx Trust and Savings Bank or by wire transfer of such
proceeds to such account as the Company shall designate in writing to the
Agent from time to time, in immediately available funds. Not later than
12:00 Noon, Chicago time, on the date specified for any Bid Loan to be made
hereunder, each Bank which is bound to make such Bid Loan pursuant to
Section 2.6 hereof shall make its portion of such Bid Loan available to the
Company in immediately available funds at the principal office of the Agent
in Chicago, Illinois.
(b) Unless the Agent shall have been notified by a Bank no later than
the time the Agent gives such Bank a notice pursuant to Section 2.6 hereof
(which notice shall be effective upon receipt) that such Bank does not
intend to make the proceeds of such Bid Loan available to the Agent, the
Agent may assume that such Bank has made such proceeds available to the
Agent on such date and the Agent may in reliance upon such assumption (but
shall not be required to) make available to the Company a corresponding
amount. If such corresponding amount is not in fact made available to the
Agent by such Bank, the Agent shall be entitled to receive such amount on
demand from such Bank (or, if such Bank fails to pay such amount forthwith
upon such demand, to recover such amount from the Company) together with
interest thereon in respect of each day during the period commencing on the
date such amount was made available to the Company and ending on the date
the Agent recovers such amount, at a rate per annum equal to the effective
rate charged to the Agent for overnight Federal funds transactions with
member banks of the Federal Reserve System for each day, as determined by
the Agent (or, in the case of a day which is not a Business Day, then for
the preceding Business Day). Nothing in this Section 2.11(b) shall be
deemed to permit any Bank to breach its obligations to make Bid Loans
hereunder, or to limit the Company's claims against any Bank for such
breach.
SECTION 2.12. RELIANCE ON TELEPHONIC NOTICES; INDEMNITY. (a) The Company
agrees that the Agent may rely on any telephonic notice referred to in this
Section 2 and given by any person the Agent reasonably believes is
authorized to give such notice without the necessity of independent
investigation, and in the event any such telephonic notice conflicts with
any written notice relating thereto, or in the event no such written notice
is received by the Agent, such telephonic notice shall govern if the Agent
or any Bank has acted in reasonable reliance thereon. The Agent's books
and records shall be PRIMA FACIE evidence of all of the matters set forth
in Sections 2.2, 2.3, 2.4., 2.5 and 2.6 hereof.
(b) The Company hereby agrees to indemnify and hold the Agent
harmless from and against any and all claims, damages, losses, liabilities
and expenses, including court costs and legal expenses, paid or incurred by
the Agent in connection with any action the Agent may take, or fail to
take, in reasonable reliance upon and in accordance with any telephonic
notice received by the Agent as described in this Section 2.
(c) The Banks hereby agree to indemnify and hold the Agent harmless
from and against any and all claims, damages, losses, liabilities and
expenses, including court costs and legal expenses, paid or incurred by the
Agent in connection with any action the Agent may take, or fail to take, in
reasonable reliance upon and in accordance with any telephonic notice
received by the Agent as described in this Section 2, to the extent the
Agent is not promptly reimbursed therefor by the Company.
SECTION 2.13. TELEPHONIC NOTICE. Each Bank's telephonic notice to the
Agent of its Competitive Bid pursuant to Section 2.3, and the Company's
telephonic acceptance of any offer contained in a Bid pursuant to
Section 2.5, shall be irrevocable and binding on such Bank and the Company,
as applicable, and shall not be altered, modified, or in any other manner
affected by any inconsistent terms contained in, or missing from, any
written confirmation of such telephonic notice. It is understood and
agreed by the parties hereto that the Agent shall be entitled to act, or to
fail to act, hereunder in reliance on its records of any telephonic notices
provided for herein and that the Agent shall not incur any liability to any
Person in so doing if its records conflict with any written confirmation of
a telephone notice or otherwise, provided that any such action taken or
omitted by the Agent is taken or omitted reasonably and in good faith. It
is further understood and agreed by the parties hereto that each party
hereto shall in good faith endeavor to provide the notices specified herein
by the times of day as set forth in this Section 2 but that no party shall
incur any liability or other responsibility for any failure to provide such
notices within the specified times; PROVIDED, HOWEVER, that the Agent shall
have no obligation to notify the Company of any Competitive Bid received by
it later than 8:45 A.M. (Chicago time) on the proposed Borrowing Date, and
no acceptance by the Company of any offer contained in a Competitive Bid
shall be effective to bind any Bank to make a Bid Loan, nor shall the Agent
be under any obligation to notify any Person of an acceptance, if notice of
such acceptance is received by the Agent later than 9:45 A.M. (Chicago
time) on the proposed Borrowing Date.
3. FEES, PREPAYMENTS, TERMINATIONS AND PLACE AND APPLICATION OF
PAYMENTS.
SECTION 3.1. FACILITY FEE. For the period from the date hereof to and
including the Termination Date, the Company shall pay to the Agent for the
account of the Banks a facility fee with respect to the Revolving Credit at
the rate of three-eighths of one percent (0.375%) per annum if the
Company's Leverage Ratio is equal to or greater than 0.45 to 1 and one-
quarter of one percent (0.25%) per annum if the Company's Leverage Ratio is
less than 0.45 to 1 (in each case computed in each case on the basis of a
year of 360 days for the actual number of days elapsed) of the aggregate
maximum amount of the Banks' Revolving Credit Commitments hereunder in
effect from time to time and whether or not any credit is in use under the
Revolving Credit, all such fees to be payable quarterly in arrears on the
last day of each calendar quarter commencing on the last day of
September 30, 1997, and on the Termination Date, unless the Revolving
Credit is terminated in whole on an earlier date, in which event the
facility fee for the final period shall be paid on the date of such earlier
termination in whole.
SECTION 3.2. AGENT'S FEE. The Company shall pay to and for the sole
account of the Agent such fees as may be agreed upon in writing from time
to time by the Agent and the Company. Such fees shall be in addition to
any fees and charges the Agent may be entitled to receive under Section 10
hereunder or under the other Loan Documents.
SECTION 3.3. OPTIONAL PREPAYMENTS. The Company shall have the privilege
of prepaying without premium or penalty and in whole or in part (but if in
part, then in a minimum principal amount of $2,500,000 or such greater
amount which is an integral multiple of $100,000) any Domestic Rate Loan at
any time upon prior telex or telephonic notice to the Agent on or before
12:00 Noon on the same Business Day. The Company may not prepay any
Eurodollar Loan, CD Rate Loan or Bid Loan. Any amount prepaid under the
Revolving Credit may, subject to the terms and conditions of this
Agreement, be borrowed, repaid and borrowed again.
SECTION 3.4. MANDATORY PREPAYMENTS - BORROWING BASE. The Company shall
not permit the sum of the principal amount of all Loans plus the amount
available for drawing under all L/Cs and the aggregate principal amount of
all unpaid Reimbursement Obligations at any time outstanding to exceed the
lesser of (i) the sum of the Banks' Revolving Credit Commitments or (ii)
the Borrowing Base as determined on the basis of the most recent Borrowing
Base Certificate. In addition to the Company's obligations to pay any
outstanding Reimbursement Obligations as set forth in Section 1.6 hereof,
the Company will make such payments on any outstanding Loans and
Reimbursement Obligations (and, if any L/Cs are then outstanding, deposit
an amount equal to the aggregate amount available for drawing under all
L/Cs into an interest bearing account with the Agent which shall be held as
additional collateral security for such L/Cs) which are necessary to cure
any such excess within three Business Days after the occurrence thereof.
Any amount prepaid under the Revolving Credit may, subject to the terms and
conditions of this Agreement, be borrowed, prepaid and borrowed again.
SECTION 3.5. PLACE AND APPLICATION OF PAYMENTS. All payments of
principal and interest made by the Company in respect of the Notes and
Reimbursement Obligations and all fees payable by the Company hereunder,
shall be made to the Agent at its office at 000 Xxxx Xxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx 00000 and in immediately available funds, prior to 12:00
noon on the date of such payment. All such payments shall be made without
setoff or counterclaim and without reduction for, and free from, any and
all present and future levies, imposts, duties, fees, charges, deductions
withholdings, restrictions or conditions of any nature imposed by any
government or any political subdivision or taxing authority thereof.
Unless the Banks otherwise agree, any payments received after 12:00 noon
Chicago time shall be deemed received on the following Business Day. The
Agent shall remit to each Bank its proportionate share of each payment of
principal, interest and facility fees, and L/C fees received by the Agent
by 3:00 P.M. Chicago time on the same day of its receipt if received by the
Agent by 12:00 noon, Chicago time, and its proportionate share of each such
payment received by the Agent after 12:00 noon on the Business Day
following its receipt by the Agent. In the event the Agent does not remit
any amount to any Bank when required by the preceding sentence, the Agent
shall pay to such Bank interest on such amount until paid at a rate per
annum equal to the Fed Funds Rate. The Company hereby authorizes the Agent
to automatically debit its account with Xxxxxx for any principal, interest
and fees when due under the Notes, any L/C Agreement or this Agreement and
to transfer the amount so debited from such account to the Agent for
application as herein provided. All proceeds of Collateral shall be
applied in the manner specified in the Security Agreement.
4. DEFINITIONS.
SECTION 4.1. CERTAIN TERMS DEFINED. The terms hereinafter set forth
when used herein shall have the following meanings:
"ACCOUNT DEBTOR" shall mean the Person who is obligated on a
Receivable.
"ADJUSTED CD RATE" shall mean a rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined in accordance with the
following formula:
CD RATE Assessment
Adjusted CD Rate = 100% - CD Reserve Percentage + Rate
"ADJUSTED EURODOLLAR RATE" means a rate per annum determined pursuant
to the following formula:
Adjusted Eurodollar Rate = EURODOLLAR RATE
{ }100% - Reserve Percentage
"AFFILIATE" shall mean any person, firm or corporation which, directly
or indirectly controls, or is controlled by, or is under common control
with, the Company. As used in this definition the term "CONTROLS"
(including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH") shall
have the meaning given below.
"AGENT" is defined in the first paragraph of this Agreement.
"AGREEMENT" shall mean this Secured Credit Agreement as supplemented,
modified, restated and amended from time to time.
"ANNIVERSARY DATE" has the meaning specified in Section 1.1(b) hereof.
"APPLICABLE MARGIN" shall mean, with respect to each type of Loan
described in Column A below, the rate of interest per annum shown in
Columns B, C, D and E below for the range of Leverage Ratio specified for
each Column:
A B C D E
Leverage Ratio <0.45 to 1 >.45 to 1 and >.50 to 1 and >.60 to 1 and
<0.5 to 1 <.60 to 1 <.70 to 1
Eurodollar Loans 0.75% 1.125% 1.375% 1.75%
Domestic Rate Loans 0.0% 0.125% 0.375% 0.75%
CD Rate Loans 0.875% 1.25% 1.50% 1.875%
Not later than 5 Business Days after receipt by the Agent of the financial
statements called for by Section 7.4 hereof for the applicable fiscal
quarter, the Agent shall determine the Leverage Ratio for the applicable
period and shall promptly notify the Company and the Banks of such
determination and of any change in the Applicable Margins resulting
therefrom. Any such change in the Applicable Margins shall be effective as
of the date the Agent so notifies the Company and the Banks with respect to
all Loans outstanding on such date, and such new Applicable Margins shall
continue in effect until the effective date of the next quarterly
redetermination in accordance with this Section. Each determination of the
Leverage Ratio and Applicable Margins by the Agent in accordance with this
Section shall be conclusive and binding on the Company and the Banks absent
manifest error. From the date hereof until the Applicable Margins are
first adjusted pursuant hereto, the Applicable Margins shall be those set
forth in column D above.
"ASSESSMENT RATE" shall mean the assessment rate (rounded upwards, if
necessary, to the nearest 1/100 of 1%) imposed by the Federal Deposit
Insurance Corporation or its successors for insuring the Agent's liability
for time deposits, as in effect from time to time.
"BANK" and "BANKS" shall have the meanings specified in the first
paragraph of this Agreement.
"BANKING DAY" shall mean a day on which banks are open for business in
Nassau, Bahamas, London, England, Dallas, Texas, Denver, Colorado, Wichita,
Kansas, New York, New York and Chicago, Illinois, other than a Saturday or
Sunday, and dealing in United States Dollar deposits in London, England and
Nassau, Bahamas.
"BORROWING BASE", as determined on the basis of the information
contained in the most recent Borrowing Base Certificate, shall mean an
amount equal to:
(a) 80% of the amount of Eligible Receivables, plus
(b) 65% of the Value of Eligible Inventory consisting of feed
grains, feed and ingredients, plus
(c) 65% percent of the Value of Eligible Inventory consisting of
live and dressed broiler chickens and commercial eggs, plus
(d) 65% of the Value of Eligible Inventory consisting of
prepared foods, plus
(e) 100% of the Value of Eligible Inventory consisting of
breeder hens, breeder pullets, commercial hens, commercial pullets and
hatching eggs, plus
(f) 40% of the Value of Eligible Inventory consisting of
packaging materials, vaccines, general supplies, and maintenance
supplies, minus
(g) the aggregate outstanding amount of all Grower Payables that
are more than 15 days past due.
"BORROWING BASE CERTIFICATE" shall mean the certificate in the form of
Exhibit G hereto which is required to be delivered to the Banks in
accordance with Section 7.4(d) hereof.
"BUSINESS DAY" shall mean any day except Saturday or Sunday on which
banks are open for business in Chicago, Illinois, Dallas, Texas, Denver,
Colorado, Wichita, Kansas and New York, New York.
"CAPITALIZED LEASE" shall mean, as applied to any Person, any lease of
any Property the discounted present value of the rental obligations of such
person as lessee under which, in accordance with generally accepted
accounting principles, is required to be capitalized on the balance sheet
of such Person.
"CAPITALIZED LEASE OBLIGATION" shall mean, as applied to any Person,
the discounted present value of the rental obligation, as aforesaid, under
any Capitalized Lease.
"CAPITAL STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock, whether or not outstanding on the date of this
Agreement, including, without limitation, any option, warrant or other
right relating to any such capital stock.
"CD RATE" shall mean, with respect to each Interest Period applicable
to a CD Rate Loan, the rate per annum determined by the Agent to be the
arithmetic average of the rate per annum determined by the Agent to be the
average of the bid rates quoted to the Agent at approximately 10:00 a.m.
Chicago time (or as soon thereafter as practicable) on the first day of
such Interest Period by at least two certificate of deposit dealers of
recognized national standing selected by the Agent for the purchase at face
value of certificates of deposit of the Agent having a term comparable to
such Interest Period and in an amount comparable to the principal amount of
the CD Rate Loan to be made by the Agent for such Interest Period. Each
determination of the CD Rate made by the Agent in accordance with this
paragraph shall be conclusive and binding on the Company except in the case
of manifest error or willful misconduct.
"CD RESERVE PERCENTAGE" shall mean the rate (as determined by the
Bank) of the maximum reserve requirement (including, without limitation,
any supplemental, marginal and emergency reserves) imposed on the Agent by
the Board of Governors of the Federal Reserve System (or any successor)
from time to time on non-personal time deposits having a maturity equal to
the applicable Interest Period and in an amount equal to the unpaid
principal amount of the relevant CD Rate Loan, subject to any amendments of
such reserve requirement by such Board or its successor, taking into
account any transitional adjustments thereto. The Adjusted CD Rate shall
automatically be adjusted as of the date of any change in the CD Reserve
Percentage.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended.
"CERCLIS" shall mean the CERCLA Information System.
"CHANGE IN CONTROL" means (a) a sale of all or substantially all the
assets of the Company to any Person or related group of Persons as an
entirety or substantially as an entirety in one transaction or series of
transactions, (b) the merger or consolidation of the Company with or into
another corporation or the merger of another corporation into the Company
with the effect that immediately after such transaction the stockholders of
the Company immediately prior to such transaction hold less than 50% of the
total voting power generally entitled to vote in the election of directors,
managers or trustees of the Person surviving such merger or consolidation,
(c) the Pilgrim Family shall cease to own more than 50% of the total voting
power generally entitled to vote in the election of directors, managers or
trustees of the Company or more than 50% of all non-voting classes of
Capital Stock of the Company, (d) during any period of two consecutive
years, individuals who at the beginning of such period constituted the
Board of Directors of the Company (together with any new directors whose
election by such Board or whose nomination for election by the stockholders
of the Company was approved by a vote of a majority of the directors then
still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved)
cease for any reason to constitute a majority of the Board of Directors of
the Company then in office, or (e) the stockholders of the Company shall
approve any plan for the liquidation or dissolution of the Company.
"CHANGE IN LAW" shall have the meaning specified in Section 9.3
hereof.
"COLLATERAL" shall mean the collateral security provided to the Agent
for the benefit of the Banks pursuant to the Security Agreement.
"COMMITMENT PERCENTAGE" shall have the meaning set forth in
Section 1.8 hereof.
"COMPANY" shall have the meaning specified in the first paragraph of
this Agreement.
"BID LOAN" shall mean an advance from a Bank to the Company pursuant
to the binding procedures described in Section 2 hereof.
"COMPETITIVE BID" shall mean an offer by a Bank to make a Bid Loan
pursuant to Section 2 hereof.
"COMPETITIVE BID REQUEST" shall mean a request made by the Company
pursuant to Section 2.2 hereof.
"CONTROL" or "CONTROLLED BY" or "UNDER COMMON CONTROL" shall mean
possession, directly or indirectly, of power to direct or cause the
direction of management or policies (whether through ownership of voting
securities, by contract or otherwise); provided that, in any event any
Person which beneficially owns, directly or indirectly, 10% or more (in
number of votes) of the securities having ordinary voting power for the
election of directors of a corporation shall be conclusively presumed to
control such corporation, and provided further that any Consolidated
Subsidiary shall be conclusively presumed to be controlled by the Company.
"CURRENT ASSETS" of any Person shall mean the aggregate amount of
assets of such Person which in accordance with generally accepted
accounting principles may be properly classified as current assets after
deducting adequate reserves where proper.
"CURRENT LIABILITIES" shall mean all items (including taxes accrued as
estimated) which in accordance with generally accepted accounting
principles may be properly classified as current liabilities, and including
in any event all amounts outstanding from time to time under this
Agreement.
"CURRENT RATIO" shall mean the ratio of Current Assets to Current
Liabilities of the Company and its Subsidiaries.
"DEBT" of any Person shall mean as of any time the same is to be
determined, the aggregate of:
(a) all indebtedness, obligations and liabilities of such Person
with respect to borrowed money (including by the issuance of debt
securities);
(b) all guaranties, endorsements and other contingent
obligations of such Person with respect to indebtedness arising from
money borrowed by others;
(c) all reimbursement and other obligations with respect to
letters of credit, bankers acceptances, customer advances and other
extensions of credit whether or not representing obligations for
borrowed money;
(d) the aggregate of the principal components of all leases and
other agreements for the use, acquisition or retention of real or
personal property which are required to be capitalized under generally
accepted accounting principles consistently applied;
(e) all indebtedness, obligations and liabilities representing
the deferred purchase price of property or services; and
(f) all indebtedness secured by a lien on the Property of such
Person, whether or not such Person has assumed or become liable for
the payment of such indebtedness.
"DOMESTIC RATE" means for any day the rate of interest announced by
Xxxxxx from time to time as its prime commercial rate in effect on such
day, with any change in the Domestic Rate resulting from a change in said
prime commercial rate to be effective as of the date of the relevant change
in said prime commercial rate (the "XXXXXX PRIME RATE"), provided that if
the rate per annum determined by adding 1/2 of 1% to the rate at which
Xxxxxx would offer to sell federal funds in the interbank market on or
about 10:00 a.m. (Chicago time) on any day (the "ADJUSTED FED FUNDS RATE")
shall be higher than the Xxxxxx Prime Rate on such day, then the Domestic
Rate for such day and for any succeeding day which is not a Business Day
shall be such Adjusted Fed Funds Rate. The determination of the Adjusted
Fed Funds Rate by Xxxxxx shall be final and conclusive except in the case
of manifest error or willful misconduct.
"DOMESTIC RATE LOAN" means a Revolving Credit Loan which bears
interest as provided in Section 1.3(a) hereof.
"EBITDA" shall mean, in any fiscal year of the Company, all earnings
(other than extraordinary items) of the Company before interest and income
tax obligations of the Company for said year and before depreciation and
amortization charges of the Company for said year, all determined in
accordance with generally accepted accounting principles, consistently
applied.
"ELIGIBLE INVENTORY" shall mean any Inventory of the Company in which
the Agent has a first priority perfected security interest, which the Banks
in their sole judgment deem to be acceptable for inclusion in the Borrowing
Base and which complies with each of the following requirements:
(a) it consists solely of feed grains, feed, ingredients, live
broiler chickens, dressed broiler chickens, commercial eggs, prepared
food products, breeder hens, breeder pullets, hatching eggs,
commercial hens, commercial pullets, packaging materials, vaccines,
general supplies and maintenance supplies;
(b) it is in first class condition, not obsolete, and is readily
usable or salable by the Company in the ordinary course of its
business;
(c) it substantially conforms to the advertised or represented
specifications and other quality standards of the Company, and has not
been determined by the Banks to be unacceptable due to age, type,
category, quality and/or quantity;
(d) all warranties as set forth in this Agreement and the
Security Agreement are true and correct with respect thereto;
(e) it has been identified to the Banks in the manner prescribed
pursuant to the Security Agreement;
(f) it is located at a location within the United States
disclosed to and approved by the Banks and, if requested by the Agent,
any Person (other than the Company) owning or controlling such
location shall have waived all right, title and interest in and to
such Inventory in a manner satisfactory to the Banks; and
(g) it is not subject to any other lien, security interest or
counterclaim.
"ELIGIBLE RECEIVABLES" shall mean any Receivable of the Company in
which the Agent has a first priority perfected security interest, which the
Banks, in their sole judgment deem to be acceptable for inclusion in the
Borrowing Base and which complies with each of the following requirements:
(a) It arises out of a bona fide rendering of services or sale
of goods sold and delivered by or on behalf of the Company to, or in
the process of being delivered by or on behalf of the Company to, the
Account Debtor on said Receivables;
(b) all warranties set forth in this Agreement and the Security
Agreement are true and correct with respect thereto;
(c) it has been identified to the Banks in a manner satisfactory
to the Banks;
(d) it is evidenced by an invoice (dated not later than five
days after the date of shipment or performance of services) rendered
to the Account Debtor thereunder;
(e) the invoice representing such Receivable shall have a due
date not more than 45 days following the invoice date for such
products;
(f) it is not owing by an Account Debtor who shall have failed
to pay 10% or more of all Receivables owed by such Account Debtor
within the period set forth in (g) below or who has become insolvent
or is the subject of any bankruptcy, arrangement, reorganization
proceedings or other proceedings for relief of debtors;
(g) it has not remained unpaid in whole or in part from and
after the due date thereof;
(h) it is payable in United States Dollars;
(i) it is not owing by the United States of America or any
department, agency or instrumentality thereof;
(j) it is not owing by any Account Debtor located outside of the
United States;
(k) it is net of any credit or allowance given by the Company to
such Account Debtor;
(l) the Receivable is not subject to any counterclaim or defense
asserted by the Account Debtor thereunder, nor is it subject to any
offset or contra account payable to the Account Debtor (in any case,
unless the amount of such Receivable is net of such counterclaim,
defense, offset or contra account); and
(m) it is not owing by an Account Debtor that is an Affiliate of
the Company other than Xxxxxx Xxxxxxx Midland.
"ENVIRONMENTAL LAWS" shall have the meaning specified in Section 5.10
hereof.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"EURODOLLAR LOAN" shall mean a Revolving Credit Loan which bears
interest as provided in Section 1.3(b) hereof.
"EURODOLLAR RATE" shall mean for each Interest Period applicable to a
Eurodollar Loan, (a) the LIBOR Index Rate for such Interest Period, if such
rate is available, and (b) if the LIBOR Index Rate cannot be determined,
the arithmetic average of the rate of interest per annum (rounded upwards,
if necessary, to nearest 1/100 of 1%) at which deposits in U.S. dollars in
immediately available funds are offered to the Agent at 11:00 a.m. (London,
England time) two (2) Business Days before the beginning of such Interest
Period by major banks in the interbank eurodollar market for a period equal
to such Interest Period and in an amount equal or comparable to the
principal amount of the Eurodollar Loan scheduled to be made by the Agent
during such Interest Period.
"EVENT OF DEFAULT" shall mean any event or condition identified as
such in Section 8.1 hereof.
"FED FUNDS RATE" shall have the meaning specified in Section 1.7(c)
hereof.
"FINANCIAL GUARANTEE L/C" shall mean an L/C issued hereunder that
constitutes a financial guaranty letter of credit under the capital
adequacy requirements applicable to any of the Banks.
"FISCAL YEAR" shall mean the 52 or 53 week period ending on the
Saturday closest to September 30 in each calendar year, regardless of
whether such Saturday occurs in September or October of any calendar year.
"FIXED CHARGE COVERAGE RATIO" shall mean the ratio of (a) the sum of
EBITDA and all amounts payable under all non-cancellable operating leases
(determined on a consolidated basis in accordance with generally accepted
accounting principles, consistently applied) for the period in question, to
(b) the sum of (without duplication) (i) Interest Expense for such period,
(ii) the sum of the scheduled current maturities (determined in accordance
with generally accepted accounting principles consistently applied) of
Funded Debt during the period in question, (iii) all amounts payable under
non-cancellable operating leases (determined as aforesaid) during such
period, and (iv) all amounts payable with respect to capitalized leases
(determined on a consolidated basis in accordance with generally accepted
accounting principles, consistently applied) for the period in question.
"FIXED RATE" shall mean either of the Eurodollar Rate or the Adjusted
CD Rate.
"FIXED RATE LOAN" shall mean a Eurodollar Loan, a CD Rate Loan or a
Bid Loan, and "FIXED RATE LOANS" shall mean any one or more of such types
of Loans.
"FUNDED DEBT," with respect to any Person shall mean all indebtedness
for borrowed money of such Person and with respect to the Company all
indebtedness for borrowed money of the Company, in each case maturing by
its terms more than one year after, or which is renewable or extendible at
the option of such Person for a period ending one year or more after, the
date of determination, and shall include indebtedness for borrowed money of
such maturity created, assumed or guaranteed by such Person either directly
or indirectly, including obligations of such maturity secured by liens upon
Property of such Person and upon which such entity customarily pays the
interest, all current maturities of all such indebtedness of such maturity
and all rental payments under capitalized leases of such maturity.
"GROWER PAYABLES" shall mean all amounts owed from time to time by the
Company to any Person on account of the purchase price of agricultural
products or services (including poultry and livestock) if the Agent
reasonably determines that such Person is entitled to the benefits of any
grower's lien, statutory trust or similar security arrangements to secure
the payment of any amounts owed to such Person.
"GUARANTY FEES" shall have the meaning specified in Section 7.30
hereof.
"XXXXXX" shall have the meaning specified in the first paragraph of
this Agreement.
"HIGHEST LAWFUL RATE" shall have the meaning specified in
Section 11.19 hereof.
"INTANGIBLE ASSETS" shall mean license agreements, trademarks, trade
names, patents, capitalized research and development, proprietary products
(the results of past research and development treated as long term assets
and excluded from Inventory) and goodwill (all determined on a consolidated
basis in accordance with generally accepted accounting principles
consistently applied).
"INTERCREDITOR AGREEMENT" shall mean the letter agreement dated as of
May 27, 1993 originally among the Agent, the Xxxxx, Xxxx Xxxxxxx Mutual
Life Insurance Company, Aetna Life Insurance Company, The Aetna Casualty
and Surety Company and Creditanstalt-Bankverein, individually and as agent.
"INTEREST EXPENSE" for any period shall mean all interest charges
during such period, including all amortization of debt discount and expense
and imputed interest with respect to capitalized lease obligations,
determined on a consolidated basis in accordance with generally accepted
accounting principles, consistently applied.
"INTEREST PERIOD" shall mean with respect to (a) the Eurodollar Loans,
the period used for the computation of interest commencing on the date the
relevant Eurodollar Loan is made, continued or effected by conversion and
concluding on the date one, two, three or six months thereafter and, (b) to
the CD Rate Loans, the period used for the computation of interest
commencing on the date the relevant CD Rate Loan is made, continued or
effected by conversion and concluding on the date 30, 60, 90 or 180 days
thereafter, and (c) the Bid Loans, the period used for the computation of
interest commencing on the date the relevant Bid Loan is made and ending on
the date such Bid Loan is scheduled to mature, but in no event may such
period have a duration of less than 30 days or more than 180 days;
PROVIDED, HOWEVER, that no Interest Period for any Fixed Rate Loan may
extend beyond the Termination Date. For purposes of determining an
Interest Period applicable to a Eurodollar Loan, a month means a period
starting on one day in a calendar month and ending on a numerically
corresponding day in the next calendar month; PROVIDED, HOWEVER, that if
there is no numerically corresponding day in the month in which an Interest
Period is to end or if an Interest Period begins on the last day of a
calendar month, then such Interest Period shall end on the last Banking Day
of the calendar month in which such Interest Period is to end.
"INVENTORY" shall mean all raw materials, work in process, finished
goods, and goods held for sale or lease or furnished or to be furnished
under contracts of service in which the Company or any Subsidiary now has
or hereafter acquires any right.
"IRB" shall mean tax-exempt industrial revenue bonds which may be
issued to finance the Company's Tenaha Feed Mill.
"L/C" shall have the meaning set forth in Section 1.5 hereof.
"L/C Agreement" shall have the meaning set forth in Section 1.5
hereof.
"L/C FEE" has the meaning specified in Section 1.5 hereof.
"L/C ISSUANCE FEE" has the meaning specified in Section 1.5 hereof.
"LEVERAGE RATIO" shall mean the ratio for the Company and its
Subsidiaries of (a) the aggregate outstanding principal amount of all Debt
(other than Debt consisting of reimbursement and other obligations with
respect to undrawn letters of credit) to (b) the sum of the aggregate
outstanding principal amount of all Debt included in clause (a) above plus
Net Worth.
"LIBOR INDEX RATE" shall mean, for any Interest Period applicable to a
Eurodollar Loan, the rate per annum (rounded upwards, if necessary, to the
next higher one hundred-thousandth of a percentage point) for deposits in
U.S. Dollars for a period equal to such Interest Period, which appears on
the Telerate Page 3750 as of 11:00 a.m. (London, England time) on the day
two Banking Days before the commencement of such Interest Period.
"LOAN" shall mean a Revolving Credit Loan or a Bid Loan, and "Loans"
shall mean any two or more Revolving Credit Loans and/or Bid Loans.
"LOAN DOCUMENTS" shall mean this Agreement and any and all exhibits
hereto, the Notes, the L/C Agreements and the Security Agreement.
"NET INCOME" shall mean the net income of the Company and its
Subsidiaries determined on a consolidated basis in accordance with
generally accepted accounting principles, consistently applied.
"NET TANGIBLE ASSETS" shall mean the excess of the value of the Total
Assets over the value of the Intangible Assets of the Company and its
Subsidiaries.
"NET WORKING CAPITAL" shall mean the excess for the Company of Current
Assets over Current Liabilities.
"NET WORTH" shall mean the Total Assets minus the Total Liabilities of
the Company and its Subsidiaries, all determined on a consolidated basis in
accordance with generally accepted accounting principles, consistently
applied.
"NOTES" shall mean the Revolving Notes, and "NOTE" means any of the
Notes.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PERFORMANCE L/C" shall mean any L/C issued hereunder that does not
constitute a Financial Guarantee L/C.
"PERSON" shall mean and include any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, institution, entity, party or government (whether
national, federal, state, county, city, municipal, or otherwise, including,
without limitation, any instrumentality, division, agency, body or
department thereof).
"PILGRIM FAMILY" means Xxxxxx X. "Bo" Pilgrim, his spouse, his issue,
his estate and any trust entirely for the benefit of his spouse and/or
issue.
"PLAN" shall mean any employee benefit plan covering any officers or
employees of the Company or any Subsidiary, any benefits of which are, or
are required to be, guaranteed by the PBGC.
"POTENTIAL DEFAULT" shall mean any event or condition which, with the
lapse of time, or giving of notice, or both, would constitute an Event of
Default.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed or tangible or intangible.
"RECEIVABLES" shall mean all accounts, contract rights, instruments,
documents, chattel paper and general intangibles in which the Company now
has or hereafter acquires any right.
"REIMBURSEMENT OBLIGATION" has the meaning specified in Section 1.6
hereof.
"REQUIRED BANKS" shall mean any Bank or Banks which in the aggregate
hold at least 66-2/3% of the aggregate unpaid principal balance of the
Loans and Reimbursement Obligations or, if no Loans are outstanding
hereunder, any Bank or Banks in the aggregate having at least 66-2/3% of
the Revolving Credit Commitments.
"RESERVE PERCENTAGE" means the daily arithmetic average maximum rate
at which reserves (including, without limitation, any supplemental,
marginal and emergency reserves) are imposed on member banks of the Federal
Reserve System during the applicable Interest Period by the Board of
Governors of the Federal Reserve System (or any successor) under
Regulation D on "EUROCURRENCY LIABILITIES" (as such term is defined in
Regulation D), subject to any amendments of such reserve requirement by
such Board or its successor, taking into account any transitional
adjustments thereto. For purposes of this definition, the Eurodollar Loans
shall be deemed to be eurocurrency liabilities as defined in Regulation D
without benefit or credit for any prorations, exemptions or offsets under
Regulation D.
"REVOLVING CREDIT" shall have the meaning specified in the first
paragraph of this Agreement.
"REVOLVING CREDIT COMMITMENT" and "REVOLVING CREDIT COMMITMENTS" shall
have the meanings specified in Section 1.1(c) hereof.
"REVOLVING CREDIT LOAN" and "REVOLVING CREDIT LOANS" shall have the
meanings specified in Section 1.1(a) hereof.
"REVOLVING NOTE" or "REVOLVING NOTES" shall have the meanings
specified in Section 1.1(d) hereof.
"SECURITY AGREEMENT" shall mean that certain Security Agreement Re:
Accounts Receivable, Farm Products and Inventory, dated as of May 27, 1993,
from the Company to Xxxxxx, as Agent, as such agreement may be supplemented
and amended from time to time.
"SUBORDINATED DEBT" shall mean indebtedness for borrowed money of the
Company which is subordinate in right of payment to the prior payment in
full of the Company's indebtedness, obligations and liabilities to the
Banks under the Loan Documents pursuant to written subordination provisions
satisfactory in form and substance to the Banks.
"SUBSIDIARY" shall mean collectively any corporation or other entity
at least a majority of the outstanding voting equity interests (other than
directors' qualifying shares) of which is at the time owned directly or
indirectly by the Company or by one of more Subsidiaries or by the Company
and one or more Subsidiaries. The term "CONSOLIDATED SUBSIDIARY" shall
mean any Subsidiary whose accounts are consolidated with those of the
Company in accordance with generally accepted accounting principles.
"TANGIBLE NET WORTH" shall mean the Net Worth minus the amount of all
Intangible Assets of the Company and its Subsidiaries, determined on a
consolidated basis in accordance with generally accepted accounting
principles, consistently applied.
"TELERATE PAGE 3750" shall mean the display designated as "PAGE 3750"
on the Telerate Service (or such other page as may replace Page 3750 on
that service or such other service as may be nominated by the British
Bankers' Association as the information vendor for the purpose of
displaying British Bankers' Association Interest Settlement Rates for U.S.
Dollar deposits).
"TENAHA FEED MILL" shall mean a feed mill and related facilities and
equipment to be located in Tenaha, Shelby County, Texas.
"TERM LOANS" shall mean the term loans made pursuant to the Term Loan
Agreement.
"TERM LOAN AGREEMENT" shall mean the Secured Term Credit Agreement
dated as of June 5, 1997, among the Company, the Agent and the Banks, as
the same may be supplemented and amended from time to time.
"TERMINATION DATE" shall have the meaning set forth in Section 1.1(a)
hereof.
"TOTAL ASSETS" shall mean at any date, the aggregate amount of assets
of the Company and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles consistently
applied.
"TOTAL LIABILITIES" shall mean at any date, the aggregate amount of
all liabilities of the Company and its Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting
principles, consistently applied.
"VALUE OF ELIGIBLE INVENTORY" shall mean as of any given date with
respect to Eligible Inventory:
(a) With respect to Eligible Inventory consisting of feed
grains, feed, ingredients, dressed broiler chickens and commercial
eggs, an amount equal to the lower of (i) costs determined on a
first-in-first-out inventory basis (determined in accordance with
generally accepted accounting principles consistently applied), or
(ii) wholesale market value;
(b) With respect to Eligible Inventory consisting of live
broiler chickens, a price per pound equal to 75% of (i) the price
quoted on the Los Angeles Majority Market on the date of calculation
minus (ii) $0.085, rounded up to the nearest 1/4 cent;
(c) With respect to Eligible Inventory consisting of prepared
food products, the standard cost value;
(d) With respect to Eligible Inventory consisting of: breeder
hens, $1.50 per head; breeder pullets, $1.00 per head; commercial
hens, $0.70 per head; commercial pullets, $0.40 per head; and hatching
eggs, $1.25 a dozen; or in each case such other values as may be
agreed upon by the Company and the Required Banks; and
(e) With respect to Eligible Inventory consisting of packaging
materials, vaccines, general supplies and maintenance supplies, actual
costs.
SECTION 4.2. ACCOUNTING TERMS. Any accounting term or the character or
amount of any asset or liability or item of income or expense required to
be determined under this Agreement, shall be determined or made in
accordance with generally accepted accounting principles at the time in
effect, to the extent applicable, except where such principles are
inconsistent with the requirements of this Agreement.
5. Representations and Warranties.
The Company represents and warrants to the Banks as follows:
SECTION 5.1. ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized and existing and in good standing under the laws
of the State of Delaware, has full and adequate corporate power to carry on
its business as now conducted, is duly licensed or qualified in all
jurisdictions wherein the nature of its activities requires such licensing
or qualification except where the failure to be so licensed or qualified
would not have a material adverse effect on the condition, financial or
otherwise, of the Company, has full right and authority to enter into this
Agreement and the other Loan Documents, to make the borrowings herein
provided for, to issue the Notes in evidence thereof, to encumber its
assets as collateral security for such borrowings and to perform each and
all of the matters and things herein and therein provided for; and this
Agreement does not, nor does the performance or observance by the Company
of any of the matters or things provided for in the Loan Documents,
contravene any provision of law or any charter or by-law provision or any
covenant, indenture or agreement of or affecting the Company or its
Properties.
SECTION 5.2. SUBSIDIARIES. Each Subsidiary is duly organized and
existing under the laws of the jurisdiction of its incorporation, has full
and adequate corporate power to carry on its business as now conducted and
is duly licensed or qualified in all jurisdictions wherein the nature of
its business requires such licensing or qualification and the failure to be
so licensed or qualified would have a material adverse effect upon the
business, operations or financial condition of such Subsidiary and the
Company taken as a whole. The only Subsidiaries of the Company are set
forth on Exhibit H hereto.
SECTION 5.3. FINANCIAL REPORTS. The Company has heretofore delivered to
the Banks a copy of the Audit Report as of September 28, 1996 of the
Company and its Subsidiaries and unaudited financial statements (including
a balance sheet, statement of income and retained earnings, statement of
cash flows, footnotes and comparison to the comparable prior year period)
of the Company as of, and for the period ending May 24, 1997. Such audited
financial statements have been prepared in accordance with generally
accepted accounting principles on a basis consistent, except as otherwise
noted therein, with that of the previous fiscal year or period and fairly
reflect the financial position of the Company and its Subsidiaries as of
the dates thereof, and the results of its operations for the periods
covered thereby. The Company and its Subsidiaries have no material
contingent liabilities other than as indicated on said financial statements
and since said date of September 28, 1996 there has been no material
adverse change in the condition, financial or otherwise, of the Company or
any Subsidiary that has not been disclosed in writing to the Banks.
SECTION 5.4. LITIGATION; TAX RETURNS; APPROVALS. There is no litigation
or governmental proceeding pending, nor to the knowledge of the Company
threatened, against the Company or any Subsidiary which, if adversely
determined, is likely to result in any material adverse change in the
Properties, business and operations of the Company or any Subsidiary. All
income tax returns for the Company required to be filed have been filed on
a timely basis, all amounts required to be paid as shown by said returns
have been paid. There are no pending or, to the best of the Company's
knowledge, threatened objections to or controversies in respect of the
United States federal income tax returns of the Company for any fiscal
year. No authorization, consent, license, exemption or filing (other than
the filing of financing statements) or registration with any court or
governmental department, agency or instrumentality, is or will be necessary
to the valid execution, delivery or performance by the Company of the Loan
Documents.
SECTION 5.5. REGULATION U. Neither the Company nor any Subsidiary is
engaged in the business of extending credit for the purpose of purchasing
or carrying margin stock (within the meaning of Regulation U of the Board
of Governors of the Federal Reserve System) and no part of the proceeds of
any Loan made hereunder will be used to purchase or carry any margin stock
or to extend credit to others for such a purpose.
SECTION 5.6. NO DEFAULT. As of the date of this Agreement, the Company
is in full compliance with all of the terms and conditions of this
Agreement, and no Potential Default or Event of Default is existing under
this Agreement.
SECTION 5.7. ERISA. The Company and its Subsidiaries are in compliance
in all material respects with ERISA to the extent applicable to them and
have received no notice to the contrary from the PBGC or any other
governmental entity or agency.
SECTION 5.8. SECURITY INTERESTS AND DEBT. There are no security
interests, liens or encumbrances on any of the Property of the Company or
any Subsidiary except such as are permitted by Section 7.16 of this
Agreement, and the Company and its Subsidiaries have no Debt except such as
is permitted by Section 7.17 of this Agreement.
SECTION 5.9. ACCURATE INFORMATION. No information, exhibit or report
furnished by the Company to the Banks in connection with the negotiation of
the Loan Documents contained any material misstatement of fact or omitted
to state a material fact or any fact necessary to make the statements
contained therein not misleading in light of the circumstances in which
made. The financial projections furnished by the Company to the Banks
contain to the Company's knowledge and belief, reasonable projections as of
the date hereof of future results of operations and financial position of
the Company.
SECTION 5.10. ENVIRONMENTAL MATTERS. (a) Except as disclosed on EXHIBIT
C, the Company has not received any notice to the effect, or has any
knowledge, that its or any Subsidiary's Property or operations are not in
compliance with any of the requirements of applicable federal, state and
local environmental, health and safety statutes and regulations
("ENVIRONMENTAL LAWS") or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond
to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could have a material
adverse effect on the business, operations, Property, assets or conditions
(financial or otherwise) of the Company or any Subsidiary;
(b) there have been no releases of hazardous materials at, on or
under any Property now or previously owned or leased by the Company or any
Subsidiary that, singly or in the aggregate, have, or may reasonably be
expected to have, a material adverse effect on the financial condition,
operations, assets, business, Properties or prospects of the Company or
such Subsidiary;
(c) there are no underground storage tanks, active or abandoned,
including petroleum storage tanks, on or under any property now or
previously owned or leased by the Company or any Subsidiary that, singly or
in the aggregate, have, or may reasonably be expected to have, a material
adverse effect on the financial condition, operations, assets, business,
Properties or prospects of the Company or such Subsidiary;
(d) neither the Company nor any Subsidiary has directly transported
or directly arranged for the transportation of any hazardous material to
any location which is listed or proposed for listing on the National
Priorities List pursuant to CERCLA, on the CERCLIS or on any similar state
list or which is the subject of federal, state or local enforcement actions
or other investigations which may lead to material claims against the
Company or any Subsidiary thereof for any remedial work, damage to natural
resources or personal injury, including claims under CERCLA; and
(e) no conditions exist at, on or under any Property now or
previously owned or leased by the Company or any Subsidiary which, with the
passage of time, or the giving of notice or both, would give rise to any
material liability under any Environmental Law.
SECTION 5.11. ENFORCEABILITY. This Agreement and the other Loan
Documents are legal, valid and binding agreements of the Company,
enforceable against it in accordance with their terms, except as may be
limited by (a) bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium or other similar laws or judicial decisions for the relief of
debtors or the limitation of creditors' rights generally; and (b) any
equitable principles relating to or limiting the rights of creditors
generally.
SECTION 5.12. RESTRICTIVE AGREEMENTS. Neither the Company nor any
Subsidiary is a party to any contract or agreement, or subject to any
charge or other corporate restriction, which affects its ability to
execute, deliver and perform the Loan Documents to which it is a party and
repay its indebtedness, obligations and liabilities under the Loan
Documents or which materially and adversely affects or, insofar as the
Company can reasonably foresee, could materially and adversely affect, the
property, business, operations or condition (financial or otherwise) of the
Company or any of its Subsidiaries, or would in any respect materially and
adversely affect the Collateral, the repayment of the indebtedness,
obligations and liabilities under the Loan Documents, or any Bank's or the
Agent's rights under the Loan Documents.
SECTION 5.13. LABOR DISPUTES. Except as set forth on EXHIBIT J,
(a) there is no collective bargaining agreement or other labor contract
covering employees of the Company or any of its Subsidiaries; (b) no such
collective bargaining agreement or other labor contract is scheduled to
expire during the term of this Agreement; (c) no union or other labor
organization is seeking to organize, or to be recognized as, a collective
bargaining unit of employees of the Company or any of its Subsidiaries; and
(d) there is no pending or (to the best of the Company's knowledge)
threatened strike, work stoppage, material unfair labor practice claim or
other material labor dispute against or affecting the Company or any of its
Subsidiaries or their respective employees.
SECTION 5.14. NO VIOLATION OF LAW. Neither the Company nor any
Subsidiary is in violation of any law, statute, regulation, ordinance,
judgment, order or decree applicable to it which violation might in any
respect materially and adversely affect the Collateral, the repayment of
the indebtedness, obligations and liabilities under the Loan Documents, any
Bank's or the Agent's rights under the Loan Documents, or the Property,
business, operations or condition (financial or otherwise) of the Company
or such Subsidiary.
SECTION 5.15. NO DEFAULT UNDER OTHER AGREEMENTS. Neither the Company nor
any Subsidiary is in default with respect to any note, indenture, loan
agreement, mortgage, lease, deed, or other agreement to which it is a party
or by which it or its Property is bound, which default might materially and
adversely affect the Collateral, the repayment of the indebtedness,
obligations and liabilities under the Loan Documents, any Bank's or the
Agent's rights under the Loan Documents or the Property, business,
operations or condition (financial or otherwise) of the Company or any
Subsidiary.
SECTION 5.16. STATUS UNDER CERTAIN LAWS. Neither the Company nor any of
its Subsidiaries is an "INVESTMENT COMPANY" or a person directly or
indirectly controlled by or acting on behalf of an "INVESTMENT COMPANY"
within the meaning of the Investment Company Act of 1940, as amended, or a
"HOLDING COMPANY," or a "SUBSIDIARY COMPANY" of a "HOLDING COMPANY," or an
"AFFILIATE" of a "HOLDING COMPANY" or a "SUBSIDIARY COMPANY" of a "HOLDING
COMPANY," within the meaning of the Public Utility Holding Company Act of
1935, as amended.
SECTION 5.17. FEDERAL FOOD SECURITY ACT. The Company has received no
notice given pursuant to Section 1324(e)(1) or (3) of the Federal Food
Security Act and there has not been filed any financing statement or
notice, purportedly in compliance with the provisions of the Federal Food
Security Act, purporting to perfect a security interest in farm products
purchased by the Company in favor of a secured creditor of the seller of
such farm products. The Company has registered, pursuant to Section
1324(c)(2)(D) of the Federal Food Security Act, with the Secretary of State
of each State in which are produced farm products purchased by the Company
and which has established or hereafter establishes a central filing system,
as a buyer of farm products produced in such State; and each such
registration is in full force and effect.
Section 5.18. FAIR LABOR STANDARDS ACT. The Company and each Subsidiary
has complied in all material respects with, and will continue to comply
with, the provisions of the Fair Labor Standards Act of 1938, 29 U.S.C.
(section)201, ET SEQ., as amended from time to time (the "FLSA"), including
specifically, but without limitation, 29 U.S.C. (section)215(a). This
representation and warranty, and each reconfirmation hereof, shall
constitute written assurance from the Company, given as of the date hereof
and as of the date of each reconfirmation, that the Company and each
Subsidiary has complied with the requirements of the FLSA, in general, and
Section 15(a)(1), 29 U.S.C. (section>215(a)(1), thereof, in particular.
6. CONDITIONS PRECEDENT.
The obligation of the Banks to make any Loan pursuant hereto or to
issue any L/C shall be subject to the following conditions precedent:
SECTION 6.1. GENERAL. The Agent shall have received the notice of
borrowings and requests for L/Cs and the Notes hereinabove provided for.
SECTION 6.2. EACH EXTENSION OF CREDIT. As of the time of the making of
each Loan and the issuance of each L/C hereunder (including the initial
Loan or L/C, as the case may be):
(a) each of the representations and warranties set forth in
Section 5 hereof shall be and remain true and correct as of said time
as if made at said time, except that (i) the representations and
warranties made under Section 5.3 shall be deemed to refer to the most
recent financial statements furnished to the Banks pursuant to Section
7.4 hereof and (ii) with respect to the Company's Subsidiaries in
Mexico the representations and warranties made under Section 5.13(d)
shall be deemed to refer only to material strikes, work stoppages,
unfair labor practice claims or other material labor disputes;
(b) the Company shall be in full compliance with all of the
terms and conditions hereof, and no Potential Default or Event of
Default shall have occurred and be continuing; and
(c) after giving effect to the requested extension of credit and
to each Loan that has been made and L/C issued hereunder, the
aggregate principal amount of all Loans, the amount available for
drawing under all L/Cs and the aggregate principal amount of all
Reimbursement Obligations then outstanding shall not exceed the lesser
of (i) the sum of the Banks' Revolving Credit Commitments then in
effect and (ii) the Borrowing Base as determined on the basis of the
most recent Borrowing Base Certificate, except as otherwise agreed by
the Company and all of the Banks;
and the request by the Company for any Loan or L/C pursuant hereto shall be
and constitute a warranty to the foregoing effects.".
SECTION 6.3. LEGAL MATTERS. Legal matters incident to the execution and
delivery of the Loan Documents shall be satisfactory to each of the Banks
and their legal counsel; and prior to the initial Loan or L/C hereunder,
the Agent shall have received the favorable written opinion of Xxxxxx &
Xxxxxxx, counsel for the Company, substantially in the form of Exhibit E,
in substance satisfactory to each of the Banks and their respective legal
counsel.
SECTION 6.4. DOCUMENTS. The Agent shall have received copies (executed
or certified, as may be appropriate) of all documents or proceedings taken
in connection with the execution and delivery of the Loan Documents to the
extent any Bank or its respective legal counsel requests.
SECTION 6.5. LIEN SEARCHES. The Agent shall have received lien searches
showing that the Property of the Company is subject to no security interest
or liens except those permitted by Section 7.16 hereof.
7. COVENANTS.
It is understood and agreed that so long as credit is in use or
available under this Agreement or any amount remains unpaid on any Note,
Reimbursement Obligation or L/C, except to the extent compliance in any
case or cases is waived in writing by the Required Banks:
SECTION 7.1. MAINTENANCE. The Company will, and will cause each
Subsidiary to, maintain, preserve and keep its plant, Properties and
equipment in good repair, working order and condition and will from time to
time make all needful and proper repairs, renewals, replacements, additions
and betterments thereto so that at all times the efficiency thereof shall
be preserved and maintained in all material respects, normal wear and tear
excepted.
SECTION 7.2. TAXES. The Company will, and will cause each Subsidiary
to, duly pay and discharge all taxes, rates, assessments, fees and
governmental charges upon or against the Company or its Subsidiaries or
against their respective Properties in each case before the same become
delinquent and before penalties accrue thereon unless and to the extent
that the same are being contested in good faith and by appropriate
proceedings diligently conducted and for which adequate reserves in form
and amount reasonably satisfactory to the Required Banks have been
established, provided that the Company shall pay or cause to be paid all
such taxes, rates, assessments, fees and governmental charges forthwith
upon the commencement of proceedings to foreclose any lien which is
attached as security therefor, unless such foreclosure is stayed by the
filing of an appropriate bond in a manner satisfactory to the Required
Banks.
SECTION 7.3. MAINTENANCE OF INSURANCE. The Company will, and will cause
each Subsidiary to, maintain insurance coverage by good and responsible
insurance underwriters in such forms and amounts and against such risks and
hazards as are customary for companies engaged in similar businesses and
owning and operating similar Properties, provided that the Company and its
Subsidiaries may self-insure for workmen's compensation, group health risks
and their live chicken inventory in accordance with applicable industry
standards. In any event, the Company will insure any of its Property which
is insurable against loss or damage by fire, theft, burglary, pilferage and
loss in transit, all in amounts and under policies containing loss payable
clauses to the Agent as its interest may appear (and, if the Required Banks
request, naming the Agent as additional insured therein) and providing for
advance notice to the Agent of cancellation thereof, issued by sound and
reputable insurers accorded a rating of A-XII or better by A.M. Best
Company, Inc. or A or better by Standard & Poor's Corporation or Xxxxx'x
Investors Service, Inc. and all premiums thereon shall be paid by the
Company and certificates summarizing the same delivered to the Agent.
SECTION 7.4. FINANCIAL REPORTS. The Company will, and will cause each
Subsidiary to, maintain a standard and modern system of accounting in
accordance with sound accounting practice and will furnish to the Banks and
their duly authorized representatives such information respecting the
business and financial condition of the Company and its Subsidiaries as may
be reasonably requested and, without any request, will furnish to CoBank
and the Banks:
(a) as soon as available, and in any event within 45 days after
the close of each monthly fiscal period of the Company a copy of the
consolidated and consolidating balance sheet, statement of income and
retained earnings, statement of cash flows, and the results of
operations for each division of the Company, for such period of the
Company and its Subsidiaries, together with all such information for
the year to date, all in reasonable detail, prepared by the Company
and certified on behalf of the Company by the Company's chief
financial officer;
(b) as soon as available, and in any event within 90 days after
the close of each fiscal year, a copy of the audit report for such
year and accompanying financial statements, including a consolidated
balance sheet, a statement of income and retained earnings, and a
statement of cash flows, together with all footnotes thereto, for the
Company and its Subsidiaries, and unaudited consolidating balance
sheets, statement of income and retained earnings and statements of
cash flows for the Company and its Subsidiaries, in each case, showing
in comparative form the figures for the previous fiscal year of the
Company, all in reasonable detail, accompanied by an unqualified
opinion of Ernst & Young or other independent public accountants of
nationally recognized standing selected by the Company and
satisfactory to the Required Banks, such opinion to indicate that such
statements are made in accordance with generally accepted accounting
principles;
(c) each of the financial statements furnished to the Banks
pursuant to paragraph (a) and (b) above shall be accompanied by a
Compliance Certificate in the form of Exhibit F hereto signed on
behalf of the Company by its chief financial officer;
(d) within 30 days after the end of each month, a Borrowing Base
Certificate in the form of Exhibit G hereto, setting forth a
computation of the Borrowing Base as of that month's end date,
certified as correct on behalf of the Company by the Company's chief
financial officer and certifying that as of the last day of the
preceding monthly period the signer thereof has re-examined the terms
and provisions of this Agreement and the Security Agreement and that
to the best of his knowledge and belief, no Potential Default or Event
of Default has occurred or, if any such Potential Default or Event of
Default has occurred, setting forth the description of such Potential
Default or Event of Default and specifying the action, if any, taken
by the Company to remedy the same;
(e) with 30 Business Days after the end of each month, an
accounts receivable aging report in the form of Exhibit I hereto,
signed by the chief financial officer of the Company;
(f) promptly upon preparation thereof copies in the form
presented to the Company's Board of Directors of its annual budgets
and forecasts of operations and capital expenditures including
investments, a balance sheet, an income statement and a projection of
cash flow for each fiscal year;
(g) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any, which
the Company shall have filed with the Securities and Exchange
Commission or any governmental agency substituted therefor, or any
national securities exchange, including copies of the Company's form
10-K annual report, including financial statements audited by Ernst &
Young or other independent public accountants of nationally recognized
standing selected by the Company and satisfactory to the Bank, its
form 10-Q quarterly report to the Securities and Exchange Commission
and any Form 8-K filed by the Company with the Securities and Exchange
Commission;
(h) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and
proxy statements so mailed; and
(i) within 90 days of the last day of each Fiscal Year of the
Company, a summary of the capital expenditures made or incurred by the
Company and its Subsidiaries during such Fiscal Year, for the
applicable period and the year to date, all in reasonable detail,
prepared by the Company and certified on behalf of the Company by the
Company's chief financial officer.
SECTION 7.5. INSPECTION AND REVIEWS. The Company shall, and shall cause
each Subsidiary to, permit the Agent and the Banks, by their
representatives and agents, to inspect any of the properties, corporate
books and financial records of the Company and its Subsidiaries, to review
and make copies of the books of accounts and other financial records of the
Company and its domestic Subsidiaries, and to discuss the affairs, finances
and accounts of the Company and its Subsidiaries with, and to be advised as
to the same by, its officers at such reasonable times and intervals as the
Agent or the Banks may designate. In addition to any other compensation or
reimbursement to which the Agent and the Banks may be entitled under the
Loan Documents, after the occurrence of an Event of Default and during the
continuation thereof the Company shall pay to the Agent from time to time
upon demand the amount necessary to compensate it for all fees, charges and
expenses incurred by the Agent or its designee in connection with the
audits of Collateral, or inspections or review of the books, records and
accounts of the Company or any domestic Subsidiary conducted by the Agent
or its designee or any of the Banks.
SECTION 7.6. CONSOLIDATION AND MERGER. The Company will not, and will
not permit any Subsidiary to, consolidate with or merge into any Person, or
permit any other Person to merge into it, or acquire (in a transaction
analogous in purpose or effect to a consolidation or merger) all or
substantially all the Property of the other Person, or acquire
substantially as an entirety the business of any other Person, without the
prior written consent of the Required Banks; PROVIDED, HOWEVER, that if no
Potential Default or Event of Default shall have occurred and be continuing
the Company may acquire all or substantially all the Property of the other
Person, or acquire substantially as an entirety the business of any other
Person if the aggregate fair market value of all consideration paid or
payable by the Company in all such acquisitions made in any Fiscal Year
does not exceed $10,000,000.
SECTION 7.7. TRANSACTIONS WITH AFFILIATES. The Company will not, and
will not permit any Subsidiary to, enter into any transaction, including
without limitation, the purchase, sale, lease or exchange of any Property,
or the rendering of any service, with any Affiliate of the Company or such
Subsidiary except (a) in the ordinary course of and pursuant to the
reasonable requirements of the Company's or such Subsidiary's business and
upon fair and reasonable terms not materially less favorable to the Company
than would be obtained in a comparable arm's-length transaction with a
Person not an Affiliate of the Company or such Subsidiary, and (b) on-going
transactions with Affiliates of the type disclosed in the Company's proxy
statement for its Fiscal Year ended September 28, 1996.
SECTION 7.8. LEVERAGE RATIO. The Company will not permit the ratio of
its Leverage Ratio at any time during each period specified below to exceed
the ratio specified below for such period:
(a) from the date hereof through the next to last day of Fiscal
Year 1997, 0.70 to 1;
(b) from the last day of Fiscal Year 1997 through the next to
last day of Fiscal Year 1998, 0.675 to 1;
(c) from the last day of Fiscal Year 1998 through the next to
last day of Fiscal Year 1999, 0.65 to 1; and
(d) on the last day of Fiscal Year 1999 and thereafter, 0.625 to
1.
SECTION 7.9. TANGIBLE NET WORTH. The Company shall maintain its
Tangible Net Worth at all times during the periods specified below in an
amount not less than the minimum required amount for each period set forth
below:
(a) from the date hereof through the next to last day in Fiscal
Year 1997, $125,308,829; and
(b) from the last day of Fiscal Year 1997 and at all times
during each Fiscal Year thereafter, an amount in any Fiscal Year equal
to the minimum amount required to be maintained during the preceding
Fiscal Year plus an amount equal to 75% of the Company's Net Income
(but not less than zero) during such Fiscal Year, if the Company's
Leverage Ratio for such Fiscal Year is equal to or greater than 0.5 to
1, or 50% of the Company's Net Income (but not less than zero) if the
Company's Leverage Ratio for such Fiscal Year is less than 0.5 to 1.
SECTION 7.10. CURRENT RATIO. The Company will maintain at all times and
measured as of the last day of each monthly fiscal accounting period a
Current Ratio of not less than (a) from and after the date hereof through
Fiscal Year 1997, 1.25 to 1, (b) during Fiscal Year 1998, 1.3 to 1 and (c)
during each Fiscal Year thereafter, 1.35 to 1.
SECTION 7.11. NET TANGIBLE ASSETS TO TOTAL LIABILITIES. The Company will
not permit the ratio of its Net Tangible Assets to its Total Liabilities at
any time to be less than 1.3 to 1.
SECTION 7.12. FIXED CHARGE COVERAGE RATIO. The Company will not permit,
as of the last day of each fiscal quarter of the Company, its Fixed Charge
Coverage Ratio in the eight consecutive fiscal quarters of the Company then
ended to be less than 1.5 to 1 on the last day of each fiscal quarter of
the Company.
SECTION 7.13. MINIMUM NET WORKING CAPITAL. The Company will maintain Net
Working Capital at all times during each period specified below (measured
as of the last day of each monthly fiscal accounting period) in an amount
not less than the amount specified below for each period:
(a) during Fiscal Year 1997, $45,000,000;
(b) during Fiscal Year 1998, $50,000,000;
(c) during Fiscal Year 1999, $50,000,000; and
(d) during each Fiscal Year thereafter, $55,000,000.
SECTION 7.14. CAPITAL EXPENDITURES. The Company will not, and will not
permit any Subsidiary to, make or commit to make any capital expenditures
(as defined and classified in accordance with generally accepted accounting
principles consistently applied;) PROVIDED, HOWEVER, that if no Event of
Default or Potential Default shall exist before and after giving effect
thereto, the Company and its Subsidiaries may make (a) capital expenditures
during each Fiscal Year in an aggregate amount in each Fiscal Year not to
exceed the sum of (i) an amount equal to 115% of the Company's depreciation
and amortization charges for the preceding Fiscal Year and (ii) the amount,
if any, by which such capital expenditures made by the Company in the
immediately preceding Fiscal Year was less than the maximum amount of
capital expenditures the Company was permitted to make under this
Section 7.14 during such Fiscal Year, determined without regard to any
carryover amount from any prior Fiscal Year, but not to exceed $5,000,000
in any Fiscal Year, and (b) additional capital expenditures in an aggregate
amount not to exceed $48,000,000 in Fiscal Years 1997 and 1998 in
connection with the acquisition and expansion of the fixed assets,
inventory and operations of Green Acre Foods, Inc.
SECTION 7.15. DIVIDENDS AND CERTAIN OTHER RESTRICTED PAYMENTS. The
Company will not (a) declare or pay any dividends or make any distribution
on any class of its capital stock (other than dividends payable solely in
its capital stock) or (b) directly or indirectly purchase, redeem or
otherwise acquire or retire any of its capital stock (except out of the
proceeds of, or in exchange for, a substantially concurrent issue and sale
of capital stock) or (c) make any other distributions with respect to its
capital stock; PROVIDED, HOWEVER, that if no Potential Default or Event of
Default shall exist before and after giving effect thereto, the Company may
pay (i) dividends in an aggregate amount not to exceed $1,700,000 in any
Fiscal Year, and (ii) dividends permitted under Section 7.15(i) during the
immediately preceding Fiscal Year that were declared but not paid in the
immediately preceding Fiscal Year.
SECTION 7.16. LIENS. The Company will not, and will not permit any
Subsidiary to, pledge, mortgage or otherwise encumber or subject to or
permit to exist upon or be subjected to any lien, charge or security
interest of any kind (including any conditional sale or other title
retention agreement and any lease in the nature thereof), on any of its
Properties of any kind or character other than:
(a) liens, pledges or deposits for workmen's compensation,
unemployment insurance, old age benefits or social security
obligations, taxes, assessments, statutory obligations or other
similar charges, good faith deposits made in connection with tenders,
contracts or leases to which the Company or a Subsidiary is a party or
other deposits required to be made in the ordinary course of business,
provided in each case the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate proceedings
and adequate reserves have been provided therefor in accordance with
generally accepted accounting principles and that the obligation is
not for borrowed money, customer advances, trade payables or
obligations to agricultural producers;
(b) the pledge of Property for the purpose of securing an appeal
or stay or discharge in the course of any legal proceedings, provided
that the aggregate amount of liabilities of the Company and its
Subsidiaries so secured by a pledge of Property permitted under this
subsection (b) including interest and penalties thereon, if any, shall
not be in excess of $1,000,000 at any one time outstanding;
(c) liens, pledges, mortgages, security interests, or other
charges granted to the Agent to secure the Notes, L/Cs or the
Reimbursement Obligations;
(d) liens, pledges, security interests or other charges now or
hereafter created under the Security Agreement;
(e) security interests or other interests of a lessor in
equipment leased by the Company or any Subsidiary as lessee under any
financing lease, to the extent such security interest or other
interest secures rental payments payable by the Company thereunder;
(f) liens on the Collateral securing the Company's indebtedness
described in Section 7.17(e) hereof created in accordance with the
Intercreditor Agreement, PROVIDED such liens are subordinated to the
Agent's liens therein and provided that the Agent is concurrently
granted a lien in the collateral security for the Company's
indebtedness described in Section 7.17(e) hereof;
(g) liens of carriers, warehousemen, mechanics and materialmen
and other like liens, in each case arising in the ordinary course of
the Company's or any Subsidiary's business to the extent they secure
obligations that are not past due;
(h) such minor defects, irregularities, encumbrances, easements,
rights of way, and clouds on title as normally exist with respect to
similar properties which do not materially impair the Property
affected thereby for the purpose for which it was acquired;
(i) liens, pledges, mortgages, security interests or other
charges granted by any of the Company's Subsidiaries in Mexico in such
Subsidiary's Inventory and certain fixed assets located in Mexico and
such Subsidiary's accounts receivable, in each case securing only
indebtedness in an aggregate principal amount of up to $10,000,000
incurred by such Subsidiaries for working capital purposes;
(j) statutory landlord's liens under leases;
(k) existing liens described on Exhibit D hereto;
(l) liens on the cash surrender value of the life insurance
policy maintained by the Company on the life of Xx. Xxxxxx X. Xxxxxxx,
to the extent such liens secure loans in an aggregate principal amount
not to exceed $900,000;
(m) liens, security interests, pledges, mortgages or other
charges in any Property other than the Collateral securing obligations
in an aggregate amount not exceeding $1,000,000 at any time;
(n) liens, mortgages and security interests in the Company's
real estate, buildings, machinery and equipment securing indebtedness
permitted only by Section 7.17(k) of this Agreement; and
(o) liens and security interests securing the Term Loans and the
IRB.
SECTION 7.17. BORROWINGS AND GUARANTIES. The Company will not, and will
not permit any Subsidiary to, issue, incur, assume, create or have
outstanding any indebtedness for borrowed money (including as such all
indebtedness representing the deferred purchase price of Property) or
customer advances, nor be or remain liable, whether as endorser, surety,
guarantor or otherwise, for or in respect of any liability or indebtedness
of any other Person, other than:
(a) indebtedness of the Company arising under or pursuant to
this Agreement or the other Loan Documents;
(b) the liability of the Company arising out of the endorsement
for deposit or collection of commercial paper received in the ordinary
course of business;
(c) trade payables of the Company arising in the ordinary course
of the Company's business;
(d) indebtedness disclosed on the audited financial statements
referred to in Section 5.3 hereof, except (i) indebtedness to the
Existing Lenders under the Existing Agreement;
(e) indebtedness in an aggregate principal amount not to exceed
$43,000,000 owed to Creditenstalt-Bankverein;
(f) Subordinated Debt in an aggregate principal amount not to
exceed $100,000,000 maturing no earlier than August 1, 2003;
(g) indebtedness in an aggregate principal amount of up to
$10,000,000 incurred by the Company's Subsidiaries in Mexico for
working capital purposes;
(h) Debt arising from sale/leaseback transactions permitted by
Section 7.32 hereof and under Capitalized Lease Obligations;
(i) indebtedness of any Mexican Subsidiary to any other Mexican
Subsidiary;
(j) loans in an aggregate principal amount of up to $900,000
against the cash surrender value of the life insurance policy
maintained on the life of Xx. Xxxxxx X. Xxxxxxx;
(k) Funded Debt incurred to finance capital expenditures
permitted by Section 7.14 hereof;
(l) in addition to the indebtedness permitted by Section 7.17(g)
hereof, unsecured indebtedness of the Company or its Mexican
Subsidiaries in an aggregate principal amount not to exceed
$20,000,000 outstanding at any time incurred to finance the Company's
or its Mexican Subsidiaries working capital needs;
(m) the Term Loans;
(n) the IRB;
(o) indebtedness in an aggregate principal amount not to exceed
$35,000,000 owed to Agricultural PCA; at an interest rate
approximating LIBOR plus 1.65%, payable in equal monthly installments
including interests through April 1, 2003; and
(p) indebtedness in an aggregate principal amount not to exceed
$85,000,000, which includes $15,000,000 currently unfunded at
principal and interest payments yet to be determined, owed to Xxxx
Xxxxxxx Mutual Life; notes payable with interest rates at 7.21%,
9.39%, 9.45% and LIBOR plus 2.0%, payable in monthly installments of
$455,305, $61,839, $23,863 and a principal payment of $70,899 with
interest, respectively, plus balloon payments at maturity on
February 28, 2006 for the 7.21% notes and March 1, 2003 for the
remaining notes.
SECTION 7.18. INVESTMENTS, LOANS AND ADVANCES. The Company will not, and
will not permit any Subsidiary to, make or retain any investment (whether
through the purchase of stock, obligations or otherwise) in or make any
loan or advance to, any other Person, other than:
(a) investments in certificates of deposit having a maturity of
one year or less issued by any United States commercial bank having
capital and surplus of not less than $50,000,000;
(b) investments in an aggregate amount of up to $8,000,000 in
deposits maintained with the Pilgrim Bank of Pittsburg;
(c) investments in commercial paper rated P1 by Xxxxx'x
Investors Service, Inc. or A1 by Standard & Poor's Ratings Group
maturing within 180 days of the date of issuance thereof;
(d) marketable obligations of the United States;
(e) marketable obligations guaranteed by or insured by the
United States, or those for which the full faith and credit of the
United States is pledged for the repayment of principal and interest
thereof; provided that such obligations have a final maturity of no
more than one year from the date acquired by the Company;
(f) repurchase, reverse repurchase agreements and security
lending agreements collateralized by securities of the type described
in subsection (c) and having a term of no more than 90 days, PROVIDED,
HOWEVER, that the Company shall hold (individually or through an
agent) all securities relating thereto during the entire term of such
arrangement;
(g) loans, investments (excluding retained earnings) and
advances by the Company to its Subsidiaries located in Mexico in an
aggregate outstanding amount not to exceed $145,000,000 at any time,
PROVIDED, HOWEVER, that the Company may make loans, investments
(excluding retained earnings) and advances to its Subsidiaries located
in Mexico in an aggregate amount equal to the aggregate amount of any
capital withdrawn from its Mexican Subsidiaries after the date hereof
but not to exceed an aggregate amount of $25,000,000 in any Fiscal
Year of the Company, PROVIDED FURTHER that any such investments
(excluding retained earnings), loans and advances shall not cause the
aggregate outstanding amount of all such loans, investments (excluding
retained earnings) and advances to exceed $145,000,000 at any time;
(h) loans and advances to employees and contract growers (other
than executive officers and directors of the Company) for reasonable
expenses incurred in the ordinary course of business;
(i) loans and advances from one Mexican Subsidiary to another
Mexican Subsidiary;
(j) investments in an aggregate amount not to exceed $1,000,000
in Southern Hens, Inc.; and
(k) investments in and loans and advances to each of PPC
Delaware Business Trust, Pilgrim's Pride International, Inc. and PPC
Marketing, Ltd. in an aggregate amount not to exceed $1,000,000 for
each such entity.
SECTION 7.19. SALE OF PROPERTY. The Company will not, and will not
permit any Subsidiary to, sell, lease, assign, transfer or otherwise
dispose of (whether in one transaction or in a series of transactions) all
or a material part of its Property to any other Person in any Fiscal Year
of the Company; PROVIDED, HOWEVER, that this Section shall not prohibit:
(a) sales of Inventory by the Company in the ordinary course of
business;
(b) sales or leases by the Company of its surplus, obsolete or
worn-out machinery and equipment; and
(c) sales of approximately 16,500 acres of farm land in Xxxxx
and Xxxxxx Counties, Texas.
For purposes of this Section 7.19, "MATERIAL PART" shall mean 5% or more of
the lesser of the book or fair market value of the Property of the Company.
SECTION 7.20. NOTICE OF SUIT, ADVERSE CHANGE IN BUSINESS OR DEFAULT. The
Company shall, as soon as possible, and in any event within fifteen (15)
days after the Company learns of the following, give written notice to the
Banks of (a) any proceeding(s) that, if determined adversely to the Company
or any Subsidiary could have a material adverse effect on the Properties,
business or operations of the Company or such Subsidiary being instituted
or threatened to be instituted by or against the Company or such Subsidiary
in any federal, state, local or foreign court or before any commission or
other regulatory body (federal, state, local or foreign); (b) any material
adverse change in the business, Property or condition, financial or
otherwise, of the Company or any Subsidiary; and (c) the occurrence of a
Potential Default or Event of Default.
SECTION 7.21. ERISA. The Company will, and will cause each Subsidiary
to, promptly pay and discharge all obligations and liabilities arising
under ERISA of a character which if unpaid or unperformed might result in
the imposition of a lien against any of its Property and will promptly
notify the Agent of (i) the occurrence of any reportable event (as defined
in ERISA) which might result in the termination by the PBGC of any Plan
covering any officers or employees of the Company or any Subsidiary any
benefits of which are, or are required to be, guaranteed by PBGC, (ii)
receipt of any notice from PBGC of its intention to seek termination of any
Plan or appointment of a trustee therefor, and (iii) its intention to
terminate or withdraw from any Plan. The Company will not, and will not
permit any Subsidiary to, terminate any Plan or withdraw therefrom unless
it shall be in compliance with all of the terms and conditions of this
Agreement after giving effect to any liability to PBGC resulting from such
termination or withdrawal.
SECTION 7.22. USE OF LOAN PROCEEDS. The Company will use the proceeds of
all Loans and L/Cs made or issued hereunder solely to refinance existing
Debt and for general corporate purposes.
SECTION 7.23. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. The
Company will, and will cause each Subsidiary to, continue to engage in
business of the same general type as now conducted by it, and the Company
will, and will cause each Subsidiary to, preserve, renew and keep in full
force and effect its corporate existence and its rights, privileges and
franchises necessary or desirable in the normal conduct of business.
SECTION 7.24. ADDITIONAL INFORMATION. Upon request of the Agent, the
Company shall provide any reasonable additional information pertaining to
any of the Collateral.
SECTION 7.25. SUPPLEMENTAL PERFORMANCE. The Company will at its own
expense, register, file, record and execute all such further agreements and
documents, including without limitation financing statements, and perform
such acts as are necessary and appropriate, or as the Agent or any Bank may
reasonably request, to effect the purposes of the Loan Documents.
SECTION 7.26. COMPANY CHATTEL PAPER - DELIVERY TO BANK. The Company will
keep in its exclusive possession all components of its respective
Receivables which constitute chattel paper. The Agent may request in its
sole discretion, and the Company agrees to deliver to the Agent upon such
request, any or all of such Receivables constituting chattel paper.
SECTION 7.27. COMPLIANCE WITH LAWS, ETC. The Company will, and will
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include
(without limitation) (a) the maintenance and preservation of its corporate
existence and qualification as a foreign corporation, (b) the registration
pursuant to the Food Security Act of 1985, as amended, with the Secretary
of State of each State in which are produced any farm products purchased by
the Company and which has established a central filing system, as a buyer
of farm products produced in such state, and the maintenance of each such
registration, (c) compliance with the Packers and Stockyard Act of 1921, as
amended, (d) compliance with all applicable rules and regulations
promulgated by the United States Department of Agriculture and all similar
applicable state rules and regulations, and (e) compliance with all rules
and regulations promulgated pursuant to the Occupational Safety and Health
Act of 1970, as amended.
SECTION 7.28. ENVIRONMENTAL COVENANT. The Company will, and will cause
each of its Subsidiaries to:
(a) use and operate all of its facilities and Properties in
material compliance with all Environmental Laws, keep all
necessary permits, approvals, certificates, licenses and other
authorizations relating to environmental matters in effect and
remain in material compliance therewith, and handle all hazardous
materials in material compliance with all applicable
Environmental Laws;
(b) immediately notify the Agent and provide copies upon
receipt of all material written claims, complaints, notices or
inquiries relating to the condition of its facilities and
Property or compliance with Environmental Laws, and shall
promptly cure and have dismissed, to the reasonable satisfaction
of the Required Banks, any actions and proceedings relating to
compliance with Environmental Laws unless and to the extent that
the same are being contested in good faith and by appropriate
proceedings diligently conducted and for which adequate reserves
in form and amount reasonably satisfactory to the Required Banks
have been established, provided that no proceedings to foreclose
any lien which is attached as security therefor shall have been
commenced unless such foreclosure is stayed by the filing of an
appropriate bond in a manner satisfactory to the Required Banks;
and
(c) provide such information and certifications which the
Agent may reasonably request from time to time to evidence
compliance with this Section 7.28.
SECTION 7.29. NEW SUBSIDIARIES. The Company will not, directly or
indirectly, create or acquire any Subsidiary unless (a) after giving effect
to any such creation or acquisition, the total assets (determined in
accordance with generally accepted accounting principles, consistently
applied) of all such Subsidiaries would not exceed 5% of the Total Assets
of the Company and its Subsidiaries, and (b) all Inventory and Receivables
of such Subsidiaries are pledged to the Agent for the benefit of the Banks
pursuant to a security agreement substantially identical to the Security
Agreement.
SECTION 7.30. GUARANTY FEES. The Company will not, and it will not
permit any Subsidiary to, directly or indirectly, pay to Mr. and/or Xxx.
Xxxxxx X. Xxxxxxx or any other guarantor of any of the Company's
indebtedness, obligations and liabilities, any fee or other compensation,
but excluding salary, bonus and other compensation for services rendered as
an employee (collectively the "GUARANTY FEES") in an aggregate amount in
excess of $1,400,000 in any Fiscal Year of the Company. For purposes of
this Section 7.30, any Guaranty Fees paid within 45 days after the last day
of any Fiscal Year shall be deemed to have been paid during such Fiscal
Year.
SECTION 7.31. KEY MAN LIFE INSURANCE. The Company shall continuously
maintain a policy of insurance on the life of Xx. Xxxxxx X. Xxxxxxx in the
amount of $1,500,000.00, of which the Company shall be the beneficiary,
such policy to be maintained with a good and responsible insurance company
acceptable to the Required Banks.
SECTION 7.32. SALE AND LEASEBACKS. The Company will not, and will not
permit any Subsidiary to, enter into any arrangement with any lender or
investor providing for the leasing by the Company or any Subsidiary of any
real or personal property previously owned by the Company or any
Subsidiary, except:
(a) any such sale and leaseback transaction, PROVIDED that (i)
such transactions may be entered into only in the year, or in the year
immediately preceding the year, in which net operating losses, credits
or other tax benefits would otherwise expire unutilized and the
Company delivers on officer's certificate to the Agent to the effect
that such expiration of such net operating losses, credits or other
tax benefits would occur but for entering into the sale/leaseback
transaction; (ii) the Company shall be completely discharged with
respect to any Debt of the Company or such Subsidiary assumed by the
purchaser/lessor in such sale/leaseback transaction; (iii) the Company
shall deliver to the Agent an opinion of counsel that the sale of
assets and related lease will be treated as a sale and lease,
respectively, for federal income tax purposes; and (iv) the proceeds
of such transactions are applied to the payment of Debt; and
(b) such transactions in which the aggregate consideration
received by the Company upon the sale of such property does not exceed
$6,000,000 in any Fiscal Year.
8. EVENTS OF DEFAULT AND REMEDIES.
SECTION 8.1. DEFINITIONS. Any one or more of the following shall
constitute an Event of Default:
(a) Default in the payment when due of any interest on or
principal of any Note or Reimbursement Obligation, whether at the
stated maturity thereof or as required by Section 3.4 hereof or
at any other time provided in this Agreement, or of any fee or
other amount payable by the Company pursuant to this Agreement;
(b) Default in the observance or performance of any
covenant set forth in Sections 7.4, 7.5, 7.6, 7.7, 7.15, 7.17,
7.19 and 7.20, inclusive, hereof, or of any provision of any
Security Document requiring the maintenance of insurance on the
Collateral subject thereto or dealing with the use or remittance
of proceeds of such Collateral;
(c) Default in the observance or performance of any
covenant set forth in Sections 7.8, 7.9, 7.10, 7.11, 7.12, 7.13,
7.14, 7.16, 7.18, 7.21, 7.23 and 7.31, inclusive, hereof and such
default shall continue for 10 days after written notice thereof
to the Company by any Bank;
(d) Default in the observance or performance of any other
covenant, condition, agreement or provision hereof or any of the
other Loan Documents and such default shall continue for 30 days
after written notice thereof to the Company by any Bank;
(e) Default shall occur under any evidence of indebtedness
in a principal amount exceeding $1,000,000 issued or assumed or
guaranteed by the Company, or under any mortgage, agreement or
other similar instrument under which the same may be issued or
secured and such default shall continue for a period of time
sufficient to permit the acceleration of maturity of any
indebtedness evidenced thereby or outstanding or secured
thereunder;
(f) Any representation or warranty made by the Company
herein or in any Loan Document or in any statement or certificate
furnished by it pursuant hereto or thereto, proves untrue in any
material respect as of the date made or deemed made pursuant to
the terms hereof;
(g) Any judgment or judgments, writ or writs, or warrant or
warrants of attachment, or any similar process or processes in an
aggregate amount in excess of $2,000,000 shall be entered or
filed against the Company or any Subsidiary or against any of
their respective Property or assets and remain unbonded, unstayed
and undischarged for a period of 30 days from the date of its
entry;
(h) Any reportable event (as defined in ERISA) which
constitutes grounds for the termination of any Plan or for the
appointment by the appropriate United States District Court of a
trustee to administer or liquidate any such Plan, shall have
occurred and such reportable event shall be continuing thirty
(30) days after written notice to such effect shall have been
given to the Company by any Bank; or any such Plan shall be
terminated; or a trustee shall be appointed by the appropriate
United States District Court to administer any such Plan; or the
Pension Benefit Guaranty Corporation shall institute proceedings
to administer or terminate any such Plan;
(i) The Company or any Subsidiary shall (i) have entered
involuntarily against it an order for relief under the Bankruptcy
Code of 1978, as amended, (ii) admit in writing its inability to
pay, or not pay, its debts generally as they become due or
suspend payment of its obligations, (iii) make an assignment for
the benefit of creditors, (iv) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian, trustee,
conservator, liquidator or similar official for it or any
substantial part of its property, (v) file a petition seeking
relief or institute any proceeding seeking to have entered
against it an order for relief under the Bankruptcy Code of 1978,
as amended, to adjudicate it insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, marshalling
of assets, adjustment or composition of it or its debts under any
law relating to bankruptcy, insolvency or reorganization or
relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed
against it, or (vi) fail to contest in good faith any appointment
or proceeding described in Section 8.1(j) hereof;
(j) A custodian, receiver, trustee, conservator, liquidator
or similar official shall be appointed for the Company, any
Subsidiary or any substantial part of its respective Property, or
a proceeding described in Section 8.1(i)(v) shall be instituted
against the Company or any Subsidiary and such appointment
continues undischarged or any such proceeding continues
undismissed or unstayed for a period of 60 days;
(k) The existence of an "EVENT OF DEFAULT" as defined in
the Security Agreement;
(l) Any shares of the capital stock of the Company owned
legally or beneficially by Mr. and/or Xxx. Xxxxxx X. Xxxxxxx
shall be pledged, assigned or otherwise encumbered for any
reason, other than the pledge of up to 2,000,000 shares to secure
personal obligations of Mr. and Xxx. Xxxxxx X. Xxxxxxx or such
other personal obligations incurred by any Person so long as such
obligations are not related to the financing of the Company of
any of its Subsidiaries;
(m) Mr. and Xxx. Xxxxxx X. Xxxxxxx and their descendants
and heirs shall for any reason cease to have legal and/or
beneficial ownership of no less than 51% of the issued and
outstanding shares of all classes of capital stock of the
Company;
(n) Either Mr. or Xxx. Xxxxxx X. Xxxxxxx shall terminate,
breach, repudiate or disavow his or her guaranty of the Company's
indebtedness, obligations and liabilities to the Banks under the
Loan Documents or any part thereof, or any event specified in
Sections 8.1(i) or (j) shall occur with regard to either or both
of Mr. and Xxx. Xxxxxx X. Xxxxxxx;
(o) The Required Banks shall have determined that one or
more conditions exist or events have occurred which may result in
a material adverse change in the business, operations, Properties
or condition (financial or otherwise) of the Company or any
Subsidiary; or
(p) The occurrence of a Change in Control.
SECTION 8.2. REMEDIES FOR NON-BANKRUPTCY DEFAULTS. When any Event of
Default, other than an Event of Default described in subsections (i) and
(j) of Section 8.1 hereof, has occurred and is continuing, the Agent, if
directed by the Required Banks, shall give notice to the Company and take
any or all of the following actions: (i) terminate the remaining Revolving
Credit Commitments hereunder on the date (which may be the date thereof)
stated in such notice, (ii) declare the principal of and the accrued
interest on the Notes and unpaid Reimbursement Obligations to be forthwith
due and payable and thereupon the Notes and unpaid Reimbursement
Obligations including both principal and interest, shall be and become
immediately due and payable without further demand, presentment, protest or
notice of any kind, and (iii) proceed to foreclose against any Collateral
under any of the Security Documents, take any action or exercise any remedy
under any of the Loan Documents or exercise any other action, right, power
or remedy permitted by law. Any Bank may exercise the right of set off
with regard to any deposit accounts or other accounts maintained by the
Company with any of the Banks.
SECTION 8.3. REMEDIES FOR BANKRUPTCY DEFAULTS. When any Event of
Default described in subsections (i) or (j) of Section 8.1 hereof has
occurred and is continuing, then the Notes and all Reimbursement
Obligations shall immediately become due and payable without presentment,
demand, protest or notice of any kind, and the obligation of the Banks to
extend further credit pursuant to any of the terms hereof shall immediately
terminate.
SECTION 8.4. L/Cs. Promptly following the acceleration of the maturity
of the Notes pursuant to Section 8.2 or 8.3 hereof, the Company shall
immediately pay to the Agent for the benefit of the Banks the full
aggregate amount of all outstanding L/Cs. The Agent shall hold all such
funds and proceeds thereof as additional collateral security for the
obligations of the Company to the Banks under the Loan Documents. The
amount paid under any of the L/Cs for which the Company has not reimbursed
the Banks shall bear interest from the date of such payment at the default
rate of interest specified in Section 1.3(c)(i) hereof.
9. CHANGE IN CIRCUMSTANCES REGARDING FIXED RATE LOANS.
SECTION 9.1. CHANGE OF LAW. Notwithstanding any other provisions of
this Agreement or any Note to the contrary, if at any time after the date
hereof with respect to Fixed Rate Loans, any Bank shall determine in good
faith that any change in applicable law or regulation or in the
interpretation thereof makes it unlawful for such Bank to make or continue
to maintain any Fixed Rate Loan or to give effect to its obligations as
contemplated hereby, such Bank shall promptly give notice thereof to the
Company to such effect, and such Bank's obligation to make, relend,
continue or convert any such affected Fixed Rate Loans under this Agreement
shall terminate until it is no longer unlawful for such Bank to make or
maintain such affected Loan. The Company shall prepay the outstanding
principal amount of any such affected Fixed Rate Loan made to it, together
with all interest accrued thereon and all other amounts due and payable to
the Banks under Section 9.4 of this Agreement, on the earlier of the last
day of the Interest Period applicable thereto and the first day on which it
is illegal for such Bank to have such Loans outstanding; provided, however,
the Company may then elect to borrow the principal amount of such affected
Loan by means of another type of Loan available hereunder, subject to all
of the terms and conditions of this Agreement.
SECTION 9.2. UNAVAILABILITY OF DEPOSITS OR INABILITY TO ASCERTAIN THE
ADJUSTED EURODOLLAR RATE OR ADJUSTED CD RATE. Notwithstanding any other
provision of this Agreement or any Note to the contrary, if prior to the
commencement of any Interest Period any Bank shall determine (i) that
deposits in the amount of any Fixed Rate Loan scheduled to be outstanding
are not available to it in the relevant market or (ii) by reason of
circumstances affecting the relevant market, adequate and reasonable means
do not exist for ascertaining the Adjusted Eurodollar Rate or the Adjusted
CD Rate, then such Bank shall promptly give telephonic or telex notice
thereof to the Company, the Agent and the other Banks (such notice to be
confirmed in writing), and the obligation of the Banks to make, continue or
convert any such Fixed Rate Loan in such amount and for such Interest
Period shall terminate until deposits in such amount and for the Interest
Period selected by the Company shall again be readily available in the
relevant market and adequate and reasonable means exist for ascertaining
the Adjusted Eurodollar Rate or the Adjusted CD Rate, as the case may be.
Upon the giving of such notice, the Company may elect to either (i) pay or
prepay, as the case may be, such affected Loan or (ii) reborrow such
affected Loan as another type of Loan available hereunder, subject to all
terms and conditions of this Agreement.
SECTION 9.3. TAXES AND INCREASED COSTS. With respect to the Fixed Rate
Loans, if any Bank shall determine in good faith that any change in any
applicable law, treaty, regulation or guideline (including, without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) or any new law, treaty, regulation or guideline, or any
interpretation of any of the foregoing by any governmental authority
charged with the administration thereof or any central bank or other
fiscal, monetary or other authority having jurisdiction over such Bank or
its lending branch or the Fixed Rate Loans contemplated by this Agreement
(whether or not having the force of law) ("CHANGE IN LAW") shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirements against assets held by, or
deposits in or for the account of, or Loans by, or any other
acquisition of funds or disbursements by, such Bank (other than
reserves included in the determination of the Adjusted Eurodollar
Rate or the Adjusted CD Rate);
(ii) subject such Bank, any Fixed Rate Loan or any Note to
any tax (including, without limitation, any United States
interest equalization tax or similar tax however named applicable
to the acquisition or holding of debt obligations and any
interest or penalties with respect thereto), duty, charge, stamp
tax, fee, deduction or withholding in respect of this Agreement,
any Fixed Rate Loan or any Note except such taxes as may be
measured by the overall net income of such Bank or its lending
branch and imposed by the jurisdiction, or any political
subdivision or taxing authority thereof, in which such Bank's
principal executive office or its lending branch is located;
(iii) change the basis of taxation of payments of principal
and interest due from the Company to such Bank hereunder or under
any Note (other than by a change in taxation of the overall net
income of such Bank); or
(iv) impose on such Bank any penalty with respect to the
foregoing or any other condition regarding this Agreement, any
Fixed Rate Loan or any Note;
and such Bank shall determine that the result of any of the foregoing is to
increase the cost (whether by incurring a cost or adding to a cost) to such
Bank of making or maintaining any Fixed Rate Loan hereunder or to reduce
the amount of principal or interest received by such Bank, then the Company
shall pay to such Bank from time to time as specified by such Bank such
additional amounts as such Bank shall reasonably determine are sufficient
to compensate and indemnify it for such increased cost or reduced amount.
If any Bank makes such a claim for compensation, it shall provide to the
Company a certificate setting forth such increased cost or reduced amount
as a result of any event mentioned herein specifying such Change in Law,
and such certificate shall be conclusive and binding on the Company as to
the amount thereof except in the case of manifest error. Upon the
imposition of any such cost, the Company may prepay any affected Loan,
subject to the provisions of Sections 3.3 and 9.4 hereof.
SECTION 9.4. FUNDING INDEMNITY. (a) In the event any Bank shall incur
any loss, cost, expense or premium (including, without limitation, any loss
of profit and any loss, cost, expense or premium incurred by reason of the
liquidation or re-employment of deposits or other funds acquired by such
Bank to fund or maintain any Fixed Rate Loan or the relending or
reinvesting of such deposits or amounts paid or prepaid to such Bank) as a
result of:
(i) any payment or prepayment of a Fixed Rate Loan on a
date other than the last day of the then applicable Interest
Period;
(ii) any failure by the Company to borrow, continue or
convert any Fixed Rate Loan on the date specified in the notice
given pursuant to Section 1.7 hereof; or
(iii) the occurrence of any Event of Default;
then, upon the demand of such Bank, the Company shall pay to such Bank such
amount as will reimburse such Bank for such loss, cost or expense.
(b) If any Bank makes a claim for compensation under this Section
9.4, it shall provide to the Company a certificate setting forth the amount
of such loss, cost or expense in reasonable detail and such certificate
shall be conclusive and binding on the Company as to the amount thereof
except in the case of manifest error.
SECTION 9.5. LENDING BRANCH. Each Bank may, at its option, elect to
make, fund or maintain its Eurodollar Loans hereunder at the branch or
office specified opposite its signature on the signature page hereof or
such other of its branches or offices as such Bank may from time to time
elect, subject to the provisions of Section 1.7(b) hereof.
SECTION 9.6. DISCRETION OF BANK AS TO MANNER OF FUNDING.
Notwithstanding any provision of this Agreement to the contrary, each Bank
shall be entitled to fund and maintain its funding of all or any part of
its Loans in any manner it sees fit, it being understood however, that for
the purposes of this Agreement all determinations hereunder shall be made
as if the Banks had actually funded and maintained each Fixed Rate Loan
during each Interest Period for such Loan through the purchase of deposits
in the relevant interbank market having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Adjusted
Eurodollar Rate or Adjusted CD Rate, as the case may be, for such Interest
Period.
10. THE AGENT.
SECTION 10.1. APPOINTMENT AND POWERS. Xxxxxx Trust and Savings Bank is
hereby appointed by the Banks as Agent under the Loan Documents, including
but not limited to the Security Agreement, wherein the Agent shall hold a
security interest for the benefit of the Banks, solely as the Agent of the
Banks, and each of the Banks irrevocably authorizes the Agent to act as the
Agent of such Bank. The Agent agrees to act as such upon the express
conditions contained in this Agreement.
SECTION 10.2. POWERS. The Agent shall have and may exercise such powers
hereunder as are specifically delegated to the Agent by the terms of the
Loan Documents, together with such powers as are incidental thereto. The
Agent shall have no implied duties to the Banks, nor any obligation to the
Banks to take any action under the Loan Documents except any action
specifically provided by the Loan Documents to be taken by the Agent.
SECTION 10.3. GENERAL IMMUNITY. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Banks or
any Bank for any action taken or omitted to be taken by it or them under
the Loan Documents or in connection therewith except for its or their own
gross negligence or willful misconduct.
SECTION 10.4. NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. The Agent
shall not (i) be responsible to the Banks for any recitals, reports,
statements, warranties or representations contained in the Loan Documents
or furnished pursuant thereto, (ii) be responsible for the payment or
collection of or security for any Loans or Reimbursement Obligations
hereunder except with money actually received by the Agent for such
payment, (iii) be bound to ascertain or inquire as to the performance or
observance of any of the terms of the Loan Documents, or (iv) be obligated
to determine or verify the existence, eligibility or value of any
Collateral, or the correctness of any Borrowing Base Certificate or
compliance certificate. In addition, neither the Agent nor its counsel
shall be responsible to the Banks for the enforceability or validity of any
of the Loan Documents or for the existence, creation, attachment,
perfection or priority of any security interest in the Collateral.
SECTION 10.5. RIGHT TO INDEMNITY. The Banks hereby indemnify the Agent
for any actions taken in accordance with this Section 10, and the Agent
shall be fully justified in failing or refusing to take any action
hereunder, unless it shall first be indemnified to its satisfaction by the
Banks pro rata against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action,
other than any liability which may arise out of Agent's gross negligence or
willful misconduct.
SECTION 10.6. ACTION UPON INSTRUCTIONS OF BANKS. The Agent agrees, upon
the written request of the Required Banks, to take any action of the type
specified in the Loan Documents as being within the Agent's rights, duties,
powers or discretion. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with written
instructions signed by the Required Banks, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of
the Banks and on all holders of the Notes. In the absence of a request by
the Required Banks, the Agent shall have authority, in its sole discretion,
to take or not to take any action, unless the Loan Documents specifically
require the consent of the Required Banks or all of the Banks.
SECTION 10.7. EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute
any of its duties as Agent hereunder by or through agents (other than
employees) and attorneys-in-fact and shall not be answerable to the Banks,
except as to money or securities received by it or its authorized agents,
for the default or misconduct of any such agents or attorneys-in-fact
selected by it in good faith and with reasonable care. The Agent shall be
entitled to advice and opinion of legal counsel concerning all matters
pertaining to the duties of the agency hereby created.
SECTION 10.8. RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine
and correct and to have been signed or sent by the proper person or
persons, and, in respect to legal matters, upon the opinion of legal
counsel selected by the Agent.
SECTION 10.9. MAY TREAT PAYEE AS OWNER. The Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment or transfer thereof shall have
been filed with the Agent. Any request, authority or consent of any
person, firm or corporation who at the time of making such request or
giving such authority or consent is the holder of any such Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of
such Note or of any Note issued in exchange therefor.
SECTION 10.10. AGENT'S REIMBURSEMENT. Each Bank agrees to reimburse the
Agent pro rata in accordance with its Commitment Percentage for any
reasonable out-of-pocket expenses (including fees and charges for field
audits) not reimbursed by the Company (a) for which the Agent is entitled
to reimbursement by the Company under the Loan Documents and (b) for any
other reasonable out-of-pocket expenses incurred by the Agent on behalf of
the Banks, in connection with the preparation, execution, delivery,
administration and enforcement of the Loan Documents and for which the
Agent is entitled to reimbursement by the Company and has not been
reimbursed.
SECTION 10.11. RIGHTS AS A LENDER. With respect to its commitment, Loans
made by it, L/Cs issued by it and the Notes issued to it, Xxxxxx shall have
the same rights and powers hereunder as any Bank and may exercise the same
as though it were not the Agent, and the term "BANK" or "BANKS" shall,
unless the context otherwise indicates, include Xxxxxx in its individual
capacity. Xxxxxx and each of the Banks may accept deposits from, lend
money to, and generally engage in any kind of banking or trust business
with the Company as if it were not the Agent or a Bank hereunder, as the
case may be.
SECTION 10.12. BANK CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and
based on the financial statements referred to in Section 5.3 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into the Loan Documents. Each Bank also
acknowledges that it will, independently and without reliance upon the
Agent or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents.
SECTION 10.13. RESIGNATION OF AGENT. Subject to the appointment of a
successor Agent, the Agent may resign as Agent for the Banks under this
Agreement and the other Loan Documents at any time by sixty days' notice in
writing to the Banks. Such resignation shall take effect upon appointment
of such successor. The Required Banks shall have the right to appoint a
successor Agent who shall be entitled to all of the rights of, and vested
with the same powers as, the original Agent under the Loan Documents. In
the event a successor Agent shall not have been appointed within the sixty
day period following the giving of notice by the Agent, the Agent may
appoint its own successor. Resignation by the Agent shall not affect or
impair the rights of the Agent under Sections 10.5 and 10.10 hereof with
respect to all matters preceding such resignation. Any successor Agent
must be a Bank, a national banking association, a bank chartered in any
state of the United States or a branch of any foreign bank which is
licensed to do business under the laws of any state or the United States.
SECTION 10.14. DURATION OF AGENCY. The agency established by Section 10.1
hereof shall continue, and Sections 10.1 through and including Section
10.15 shall remain in full force and effect, until the Notes and all other
amounts due hereunder and thereunder, including without limitation all
Reimbursement Obligations, shall have been paid in full and the Banks'
commitments to extend credit to or for the benefit of the Company shall
have terminated or expired.
11. MISCELLANEOUS.
SECTION 11.1. AMENDMENTS AND WAIVERS. Any term, covenant, agreement or
condition of this Agreement may be amended only by a written amendment
executed by the Company, the Required Banks and, if the rights or duties of
the Agent are affected thereby, the Agent, or compliance therewith only may
be waived (either generally or in a particular instance and either
retroactively or prospectively), if the Company shall have obtained the
consent in writing of the Required Banks and, if the rights or duties of
the Agent are affected thereby, the Agent, provided, however, that without
the consent in writing of the holders of all outstanding Notes and unpaid
Reimbursement Obligations and the issuer of any L/C, or all Banks if no
Notes or L/Cs are outstanding, no such amendment or waiver shall (i) change
the amount or postpone the date of payment of any scheduled payment or
required prepayment of principal of the Notes or reduce the rate or extend
the time of payment of interest on the Notes, or reduce the amount of
principal thereof, or modify any of the provisions of the Notes with
respect to the payment or prepayment thereof, (ii) give to any Note any
preference over any other Notes, (iii) amend the definition of Required
Banks, (iv) alter, modify or amend the provisions of this Section 11.1,
(v) change the amount or term of any of the Banks' Revolving Credit
Commitments or the fees required under Section 3.1 hereof, (vi) alter,
modify or amend the provisions of Sections 1.9, 6 or 9 of this Agreement,
(vii) alter, modify or amend any Bank's right hereunder to consent to any
action, make any request or give any notice, (viii) change the advance
rates under the Borrowing Base or the definitions of "ELIGIBLE INVENTORY"
or "ELIGIBLE RECEIVABLES," (ix) release any Collateral under the Security
Documents or release or discharge any guarantor of the Company's
indebtedness, obligations and liabilities to the Banks, in each case,
unless such release or discharge is permitted or contemplated by the Loan
Documents, or (x) alter, amend or modify any subordination provisions of
any Subordinated Debt. Any such amendment or waiver shall apply equally to
all Banks and the holders of the Notes and Reimbursement Obligations and
shall be binding upon them, upon each future holder of any Note and
Reimbursement Obligation and upon the Company, whether or not such Note
shall have been marked to indicate such amendment or waiver. No such
amendment or waiver shall extend to or affect any obligation not expressly
amended or waived.
SECTION 11.2. WAIVER OF RIGHTS. No delay or failure on the part of the
Agent or any Bank or on the part of the holder or holders of any Note or
Reimbursement Obligation in the exercise of any power or right shall
operate as a waiver thereof, nor as an acquiescence in any Potential
Default or Event of Default, nor shall any single or partial exercise of
any power or right preclude any other or further exercise thereof, or the
exercise of any other power or right, and the rights and remedies hereunder
of the Agent, the Banks and of the holder or holders of any Notes are
cumulative to, and not exclusive of, any rights or remedies which any of
them would otherwise have.
SECTION 11.3. SEVERAL OBLIGATIONS. The commitments of each of the Banks
hereunder shall be the several obligations of each Bank and the failure on
the part of any one or more of the Banks to perform hereunder shall not
affect the obligation of the other Banks hereunder, provided that nothing
herein contained shall relieve any Bank from any liability for its failure
to so perform. In the event that any one or more of the Banks shall fail
to perform its commitment hereunder, all payments thereafter received by
the Agent on the principal of Loans and Reimbursement Obligations
hereunder, whether from any Collateral or otherwise, shall be distributed
by the Agent to the Banks making such additional Loans ratably as among
them in accordance with the principal amount of additional Loans made by
them until such additional Loans shall have been fully paid and satisfied.
All payments on account of interest shall be applied as among all the Banks
ratably in accordance with the amount of interest owing to each of the
Banks as of the date of the receipt of such interest payment.
SECTION 11.4. NON-BUSINESS DAY. (a) If any payment of principal or
interest on any Domestic Rate Loan shall fall due on a day which is not a
Business Day, interest at the rate such Loan bears for the period prior to
maturity shall continue to accrue on such principal from the stated due
date thereof to and including the next succeeding Business Day on which the
same is payable.
(b) If any payment of principal or interest on any Eurodollar Loan
shall fall due on a day which is not a Banking Day, the payment date
thereof shall be extended to the next date which is a Banking Day and the
Interest Period for such Loan shall be accordingly extended, unless as a
result thereof any payment date would fall in the next calendar month, in
which case such payment date shall be the next preceding Banking Day.
SECTION 11.5. SURVIVAL OF INDEMNITIES. All indemnities and all
provisions relative to reimbursement to the Banks of amounts sufficient to
protect the yield to the Banks with respect to Eurodollar Loans, including,
but not limited to, Sections 9.3 and 9.4 hereof, shall survive the
termination of this Agreement and the payment of the Notes for a period of
one year.
SECTION 11.6. DOCUMENTARY TAXES. Although the Company is of the opinion
that no documentary or similar taxes are payable in respect of this
Agreement or the Notes, the Company agrees that it will pay such taxes,
including interest and penalties, in the event any such taxes are assessed
irrespective of when such assessment is made and whether or not any credit
is then in use or available hereunder.
SECTION 11.7. REPRESENTATIONS. All representations and warranties made
herein or in certificates given pursuant hereto shall survive the execution
and delivery of this Agreement and of the Notes, and shall continue in full
force and effect with respect to the date as of which they were made and as
reaffirmed on the date of each borrowing or request for L/C and as long as
any credit is in use or available hereunder.
SECTION 11.8. NOTICES. Unless otherwise expressly provided herein, all
communications provided for herein shall be in writing or by telex and
shall be deemed to have been given or made when served personally, when an
answer back is received in the case of notice by telex or 2 days after the
date when deposited in the United States mail (registered, if to the
Company) addressed if to the Company to 000 Xxxxx Xxxxx, Xxxxxxxxx, Xxxxx
00000 Attention: Xxxxxxx X. Xxxxxxx; if to the Agent or Xxxxxx at 000 Xxxx
Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, Attention: Agribusiness Division;
and if to any of the Banks, at the address for each Bank set forth under
its signature hereon; or at such other address as shall be designated by
any party hereto in a written notice to each other party pursuant to this
Section 11.8.
SECTION 11.9. COSTS AND EXPENSES; INDEMNITY. The Company agrees to pay
on demand all costs and expenses of the Agent, in connection with the
negotiation, preparation, execution and delivery of this Agreement, the
Notes and the other instruments and documents to be delivered hereunder or
in connection with the transactions contemplated hereby, including the fees
and expenses of Messrs. Xxxxxxx and Xxxxxx, special counsel to the Agent;
all costs and expenses of the Agent (including attorneys' fees) incurred in
connection with any consents or waivers hereunder or amendments hereto, and
all costs and expenses (including attorneys' fees), if any, incurred by the
Agent, the Banks or any other holders of a Note or any Reimbursement
Obligation in connection with the enforcement of this Agreement or the
Notes and the other instruments and documents to be delivered hereunder.
The Company agrees to indemnify and save harmless the Banks and the Agent
from any and all liabilities, losses, costs and expenses incurred by the
Banks or the Agent in connection with any action, suit or proceeding
brought against the Agent or any Bank by any Person which arises out of the
transactions contemplated or financed hereby or by the Notes, or out of any
action or inaction by the Agent or any Bank hereunder or thereunder, except
for such thereof as is caused by the gross negligence or willful misconduct
of the party indemnified. The provisions of this Section 11.9 shall
survive payment of the Notes and Reimbursement Obligations and the
termination of the Revolving Credit Commitments hereunder.
SECTION 11.10. COUNTERPARTS. This Agreement may be executed in any number
of counterparts and all such counterparts taken together shall be deemed to
constitute one and the same instrument. One or more of the Banks may
execute a separate counterpart of this Agreement which has also been
executed by the Company, and this Agreement shall become effective as and
when all of the Banks have executed this Agreement or a counterpart thereof
and lodged the same with the Agent.
SECTION 11.11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon each of the Company and the Banks and their respective successors and
assigns, and shall inure to the benefit of the Company and each of the
Banks and the benefit of their respective successors and assigns, including
any subsequent holder of any Note or Reimbursement Obligation. The Company
may not assign any of its rights or obligations hereunder without the
written consent of the Banks.
SECTION 11.12. NO JOINT VENTURE. Nothing contained in this Agreement
shall be deemed to create a partnership or joint venture among the parties
hereto.
SECTION 11.13. SEVERABILITY. In the event that any term or provision
hereof is determined to be unenforceable or illegal, it shall deemed
severed herefrom to the extent of the illegality and/or unenforceability
and all other provisions hereof shall remain in full force and effect.
SECTION 11.14. TABLE OF CONTENTS AND HEADINGS. The table of contents and
section headings in this Agreement are for reference only and shall not
affect the construction of any provision hereof.
SECTION 11.15. PARTICIPANTS. Each Bank shall have the right at its own
cost to grant participations (to be evidenced by one or more agreements or
certificates of participation) in the Loans made, and/or Revolving Credit
Commitment and participations in L/Cs and Reimbursement Obligations held,
by such Bank at any time and from time to time, and to assign its rights
under such Loans, participations in L/Cs and Reimbursement Obligations or
the Notes evidencing such Loans to one or more other Persons; provided that
no such participation shall relieve any Bank of any of its obligations
under this Agreement, and any agreement pursuant to which such
participation or assignment of a Note or the rights thereunder is granted
shall provide that the granting Lender shall retain the sole right and
responsibility to enforce the obligations of the Company under the Loan
Documents, including, without limitation, the right to approve any
amendment, modification or waiver of any provision thereof, except that
such agreement may provide that such Bank will not agree without the
consent of such participant or assignee to any modification, amendment or
waiver of this Agreement that would (A) increase any Revolving Credit
Commitment of such Lender, or (B) reduce the amount of or postpone the date
for payment of any principal of or interest on any Loan or Reimbursement
Obligation or of any fee payable hereunder in which such participant or
assignee has an interest or (C) reduce the interest rate applicable to any
Loan or other amount payable in which such participant or assignee has an
interest or (D) release any collateral security for or guarantor for any of
the Company's indebtedness, obligations and liabilities under the Loan
Documents, and provided further that no such assignee or participant shall
have any rights under this Agreement except as provided in this
Section 11.15, and the Agent shall have no obligation or responsibility to
such participant or assignee, except that nothing herein provided is
intended to affect the rights of an assignee of a Note to enforce the Note
assigned. Any party to which such a participation or assignment has been
granted shall have the benefits of Section 1.10, Section 9.3 and
Section 9.4 hereof but shall not be entitled to receive any greater payment
under any such Section than the Bank granting such participation or
assignment would have been entitled to receive with respect to the rights
transferred.
SECTION 11.16. ASSIGNMENT OF COMMITMENTS BY BANK. Each Bank shall have
the right at any time, with the prior consent of the Company and the Agent
(which consent will not be unreasonably withheld), to sell, assign,
transfer or negotiate all or any part of its Revolving Credit Commitment to
one or more commercial banks or other financial institutions; provided that
such assignment is in an amount of at least $5,000,000 (or, if less than
$5,000,000, the amount of its entire Revolving Credit Commitment), provided
further that no Bank may so assign more than one-half of its original
Revolving Credit Commitment hereunder unless it is assigning all of its
interest hereunder, and provided further that any Bank may assign all of
its interest hereunder to any of its subsidiaries or affiliates without the
Company's or the Agent's consent. Upon any such assignment, and its
notification to the Agent, the assignee shall become a Bank hereunder, all
Loans and the Revolving Credit Commitment it thereby holds shall be
governed by all the terms and conditions hereof, and the Bank granting such
assignment shall have its Revolving Credit Commitment and its obligations
and rights in connection therewith, reduced by the amount of such
assignment. Upon each such assignment the Bank granting such assignment
shall pay to the Agent for the Agent's sole account a fee of $2,500.
SECTION 11.17. SHARING OF PAYMENTS. Each Bank agrees with each other Bank
that if such Bank shall receive and retain any payment, whether by set-off
or application of deposit balances or otherwise ("SET-OFF"), on any Loan,
Reimbursement Obligation or other amount outstanding under this Agreement
in excess of its ratable share of payments on all Loans, Reimbursement
Obligations and other amounts then outstanding to the Banks, then such Bank
shall purchase for cash at face value, but without recourse, ratably from
each of the other Banks such amount of the Loans and Reimbursement
Obligations held by each such other Bank (or interest therein) as shall be
necessary to cause such Bank to share such excess payment ratably with all
the other Banks; PROVIDED, HOWEVER, that if any such purchase is made by
any Bank, and if such excess payment or part thereof is thereafter
recovered from such purchasing Bank, the related purchases from the other
Banks shall be rescinded ratably and the purchase price restored as to the
portion of such excess payment so recovered, but without interest. Each
Bank's ratable share of any such Set-Off shall be determined by the
proportion that the aggregate principal amount of Loans and Reimbursement
Obligations then due and payable to such Bank bears to the total aggregate
principal amount of Loans and Reimbursement Obligations then due and
payable to all the Banks.
SECTION 11.18. JURISDICTION; VENUE. THE COMPANY HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF ILLINOIS AND OF ANY ILLINOIS COURT SITTING IN CHICAGO
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE COMPANY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN
SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 11.19. LAWFUL RATE. All agreements between the Company, the Agent
and each of the Banks, whether now existing or hereafter arising and
whether written or oral, are expressly limited so that in no contingency or
event whatsoever, whether by reason of demand or acceleration of the
maturity of any of the indebtedness hereunder or otherwise, shall the
amount contracted for, charged, received, reserved, paid or agreed to be
paid to the Agent or each Bank for the use, forbearance, or detention of
the funds advanced hereunder or otherwise, or for the performance or
payment of any covenant or obligation contained in any document executed in
connection herewith (all such documents being hereinafter collectively
referred to as the "CREDIT DOCUMENTS"), exceed the highest lawful rate
permissible under applicable law (the "HIGHEST LAWFUL RATE"), it being the
intent of the Company, the Agent and each of the Banks in the execution
hereof and of the Credit Documents to contract in strict accordance with
applicable usury laws. If, as a result of any circumstances whatsoever,
fulfillment by the Company of any provision hereof or of any of such
documents, at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable usury
law or result in the Agent or any Bank having or being deemed to have
contracted for, charged, reserved or received interest (or amounts deemed
to be interest) in excess of the maximum, lawful rate or amount of interest
allowed by applicable law to be so contracted for, charged, reserved or
received by the Agent or such Bank, then, IPSO FACTO, the obligation to be
fulfilled by the Company shall be reduced to the limit of such validity,
and if, from any such circumstance, the Agent or such Bank shall ever
receive interest or anything which might be deemed interest under
applicable law which would exceed the Highest Lawful Rate, such amount
which would be excessive interest shall be refunded to the Company or, to
the extent (i) permitted by applicable law and (ii) such excessive interest
does not exceed the unpaid principal balance of the Notes and the amounts
owing on other obligations of the Company to the Agent or any Bank under
any Loan Document applied to the reduction of the principal amount owing on
account of the Notes or the amounts owing on other obligations of the
Company to the Agent or any Bank under any Loan Document and not to the
payment of interest. All interest paid or agreed to be paid to the Agent
or any Bank shall, to the extent permitted by applicable law, be amortized,
prorated, allocated, and spread throughout the full period of the
indebtedness hereunder until payment in full of the principal of the
indebtedness hereunder (including the period of any renewal or extension
thereof) so that the interest on account of the indebtedness hereunder for
such full period shall not exceed the highest amount permitted by
applicable law. This paragraph shall control all agreements between the
Company, the Agent and the Banks.
SECTION 11.20. GOVERNING LAW. (a) THIS AGREEMENT AND THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE CONSTRUED AND DETERMINED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, EXCEPT TO THE
EXTENT PROVIDED IN SECTION 11.20(b) HEREOF AND TO THE EXTENT THAT THE
FEDERAL LAWS OF THE UNITED STATES OF AMERICA MAY OTHERWISE APPLY.
(b) NOTWITHSTANDING ANYTHING IN SECTION 11.20(a) HEREOF TO THE
CONTRARY, NOTHING IN THIS AGREEMENT, THE NOTES, OR THE OTHER LOAN DOCUMENTS
SHALL BE DEEMED TO CONSTITUTE A WAIVER OF ANY RIGHTS WHICH THE COMPANY, THE
AGENT OR ANY OF THE BANKS MAY HAVE UNDER THE NATIONAL BANK ACT OR OTHER
APPLICABLE FEDERAL LAW.
SECTION 11.21. LIMITATION OF LIABILITY. NO CLAIM MAY BE MADE BY THE
COMPANY, ANY SUBSIDIARY OR ANY GUARANTOR AGAINST ANY BANK OR ITS
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS FOR ANY
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR
WRONGFUL CONDUCT (WHETHER THE CLAIM THEREFOR IS BASED ON CONTRACT, TORT OR
DUTY IMPOSED BY LAW) IN CONNECTION WITH, ARISING OUT OF OR IN ANY WAY
RELATED TO THE TRANSACTIONS CONTEMPLATED AND RELATIONSHIPS ESTABLISHED BY
THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY ACT, OMISSION OR
EVENT OCCURRING IN CONNECTION THEREWITH. THE COMPANY, EACH SUBSIDIARY AND
EACH GUARANTOR HEREBY WAIVE, RELEASE AND AGREE NOT TO XXX UPON SUCH CLAIM
FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR
SUSPECTED TO EXIST IN ITS FAVOR.
SECTION 11.22. NONLIABILITY OF LENDERS. The relationship between the
Company and the Banks is, and shall at all times remain, solely that of
borrower and lenders, and the Banks and the Agent neither undertake nor
assume any responsibility or duty to the Company to review, inspect,
supervise, pass judgment upon, or inform the Company of any matter in
connection with any phase of the Company's business, operations, or
condition, financial or otherwise. The Company shall rely entirely upon
its own judgment with respect to such matters, and any review, inspection,
supervision, exercise of judgment, or information supplied to the Company
by any Bank or the Agent in connection with any such matter is for the
protection of the Bank and the Agent, and neither the Company nor any third
party is entitled to rely thereon.
SECTION 11.23. NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS EXECUTED CONTEMPORANEOUSLY HEREWITH, REPRESENT THE
FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES."
Exhibits A through P, inclusive of the Credit Agreement shall each be
amended, and as so amended shall be restated in their entirety to read as
set forth in Exhibits A through P hereto, respectively.
The amendments reflected in the above and foregoing Amended and
Restated Secured Credit Agreement shall not become effective unless and
until the following conditions precedent have been satisfied:
(a) The Company and each of the Banks shall have executed this
Amended and Restated Secured Credit Agreement (such execution may be in
several counterparts and the several parties hereto may execute on separate
counterparts).
(b) Mr. and Xxx. Xxxxxx X. Xxxxxxx shall have executed and delivered
to the Banks the Guarantors' Consent in the form set forth below.
(c) Each of the representations and warranties set forth in Section 5
of the Credit Agreement shall be true and correct.
(d) The Company shall be in full compliance with all of the terms and
conditions of the Credit Agreement and no Event of Default or Potential
Default shall have occurred and be continuing thereunder or shall result
after giving effect to this Amended and Restated Secured Credit Agreement.
(e) All legal matters incident to the execution and delivery hereof
and the instruments and documents contemplated hereby shall be satisfactory
to the Banks.
(f) The Agent shall have received (in sufficient counterparts for
distribution to each of the Banks) all of the following in a form
satisfactory to the Agent, the Banks and their respective counsel:
(i) a Secured Revolving Credit Note in the form attached hereto
as Exhibit A payable to the order of each Bank in the principal amount
of its Revolving Credit Commitment;
(ii) copies (executed or certified as may be appropriate) of all
legal documents or proceedings taken in connection with the execution
and delivery of this Amended and Restated Secured Credit Agreement,
and the other instruments and documents contemplated hereby; and
(iii) an opinion of counsel to the Company substantially in a form
as set forth in Exhibit E hereto and satisfactory to the Agent, the
Banks and their respective counsel.
(g) The Company shall at the time all other conditions precedent to
the effectiveness of the above and foregoing amendments have been satisfied
be able to comply with the conditions precedent to borrowing set forth in
Section 6 hereof.
The Company, by its execution of this Amended and Restated
Secured Credit Agreement, hereby represents and warrants the
following:
(a) each of the representations and warranties set forth in
Section 5 of the Credit Agreement is true and correct as of the date
hereof, except that the representations and warranties made under
Section 5.3 shall be deemed to refer to the most recent annual report
furnished to the Banks by the Company; and
(b) the Company is in full compliance with all of the terms and
conditions of the Credit Agreement and no Event of Default or
Potential Default has occurred and is continuing thereunder.
The Company agrees to pay all costs and expenses incurred by the
Agent and the Banks in connection with the preparation, execution and
delivery of this Amended and Restated Secured Credit Agreement and the
documents and transactions contemplated hereby including the fees and
expenses of Messrs. Xxxxxxx and Xxxxxx with respect to the foregoing.
No reference to this Amended and Restated Secured Credit Agreement need
be made in any note, security agreement, instrument or other documents
making reference to the Credit Agreement, any reference to the Credit
Agreement in any of such to be deemed to be a reference to the Credit
Agreement as amended and restated hereby. This Amended and Restated
Secured Credit Agreement may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which
when so executed shall be deemed an original, but all of which to
constitute but one and the same instrument.
The Company has heretofore executed and delivered to the Agent that
certain Security Agreement Re: Accounts Receivable, Farm Products and
Inventory dated as of May 27, 1993 (the "SECURITY AGREEMENT"), and the
Company hereby agrees that notwithstanding the execution and delivery
hereof, the Security Agreement shall be and remain in full force and effect
and that any rights and remedies of the Agent thereunder, obligations of
the Company thereunder and any liens or security interests created or
provided for thereunder shall be and remain in full force and effect, shall
not be affected, impaired or discharged thereby and shall secure all of the
Company's indebtedness, obligations and liabilities to the Agent and the
Banks under the Credit Agreement as amended and restated hereby. Nothing
herein contained shall in any manner affect or impair the priority of the
liens and security interests created and provided for by the Security
Agreement as to the indebtedness which would be secured thereby prior to
giving effect hereto. Without limiting the foregoing, the Company
acknowledges and agrees that all of its indebtedness, obligations and
liabilities to the Agent and the Banks pursuant to the Credit Agreement as
amended and restated hereby, including without limitation, all principal of
and interest on the Revolving Notes (as defined in the Credit Agreement as
amended and restated hereby), whether presently existing or hereafter
arising, shall constitute "Secured Obligations" as defined in the Security
Agreement and shall be secured by, and entitled to all of the benefits of,
the liens and security interest created and provided for under the Security
Agreement. In furtherance of the foregoing, the Company hereby grants to
the Agent for the benefit of the Banks, and hereby agrees that the Agent
for the benefit of the Banks shall continue to have a continuing security
interest in, all and singular of the Company's receivables, farm products,
inventory, books and records, documents, accessions and additions to all of
the foregoing and all products and proceeds of each of the foregoing, and
all proceeds or collection of any of the foregoing and all of the other
collateral described or referred to in the granting clauses of the Security
Agreement, each and all of which granting clauses are hereby incorporated
by reference herein in their entirety. The foregoing grant shall be in
addition to and supplemental of and not in substitution for the grant by
the Company under the Security Agreement, and shall not affect or impair
the lien or priority of the Security Agreement in the collateral subject
thereto or the indebtedness secured thereby.
THIS AMENDED AND RESTATED SECURED CREDIT AGREEMENT AND THE RIGHTS AND
DUTIES OF THE PARTIES HERETO, SHALL BE CONSTRUED AND DETERMINED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, EXCEPT TO THE
EXTENT PROVIDED IN THE NEXT PARAGRAPH HEREOF AND TO THE EXTENT THAT THE
FEDERAL LAWS OF THE UNITED STATES OF AMERICA MAY OTHERWISE APPLY.
NOTWITHSTANDING ANYTHING IN THE IMMEDIATELY PRECEDING PARAGRAPH HEREOF
TO THE CONTRARY, NOTHING IN THIS AMENDED AND RESTATED SECURED CREDIT
AGREEMENT, THE CREDIT AGREEMENT, THE NOTES, OR THE OTHER LOAN DOCUMENTS
SHALL BE DEEMED TO CONSTITUTE A WAIVER OF ANY RIGHTS WHICH THE COMPANY, THE
AGENT OR ANY OF THE BANKS MAY HAVE UNDER THE NATIONAL BANK ACT OR OTHER
APPLICABLE FEDERAL LAW.
-3-
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set
forth.
Dated as of August 11, 1997.
PILGRIM'S PRIDE CORPORATION
By \s\ Xxxxxxxx X. Xxxxxx
____________Its Executive President
Accepted and Agreed to as of the day and year last above written.
XXXXXX TRUST AND SAVINGS BANK
individually and as Agent
By \s\ Xxxx Xxxxxxxx
_________________Its Vice President
Address: 000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Agribusiness Division
FBS AG CREDIT, INC.
By \s\ Xxxxxx X xxx Xxxxx
________________________________Its
Address: 000 Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxx xxx Xxxxx
COBANK, ACB
By \s\ Xxxxxx Xxxxx
________________________________Its
Address: X.X. Xxx 0000
000 Xxxxx Xxxx
Xxxxxxx, Xxxxxx 00000-0000
Attention:
ING (U.S.) CAPITAL CORPORATION
By \s\ Xxxxxx Xxxxxxxx
________________________________Its
Address: 000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attenti _______________________
XXXXX FARGO BANK (TEXAS), N.A.
By \s\ Xxxx X. Xxxxxx
________________________________Its
Address: 0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention:
CAISSE NATIONALE DE CREDIT AGRICOLE,
CHICAGO BRANCH
By \s\ W. Xxxxx Xxxxxx
________________________________Its
Address: 00 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention:
-2-
GUARANTORS' CONSENT
The undersigned, Xxxxxx X. Xxxxxxx and Xxxxx X. Xxxxxxx, have executed
and delivered a Guaranty Agreement dated as of May 27, 1993 (the
"GUARANTY") to the Banks. As an additional inducement to and in
consideration of the Banks' acceptance of the foregoing Amended and
Restated Secured Credit Agreement (the "AMENDED CREDIT AGREEMENT"), the
undersigned hereby agree with the Banks as follows:
1. Each of the undersigned consents to the execution of the
foregoing Amended Credit Agreement by the Company and acknowledges that
this consent is not required under the terms of the Guaranty and that the
execution hereof by the undersigned shall not be construed to require the
Banks to obtain the undersigneds' consent to any future amendment,
modification or waiver of any term of the Amended Credit Agreement except
as otherwise provided in said Guaranty. Each of the undersigned hereby
agrees that the Guaranty shall apply to all indebtedness, obligations and
liabilities of the Company to the Banks, the Agent and under the Credit
Agreement, as amended and restated pursuant to the foregoing Amended Credit
Agreement. Each of the undersigned further agrees that the Guaranty shall
be and remain in full force and effect.
2. All terms used herein shall have the same meaning as in the
foregoing Amended Credit Agreement, unless otherwise expressly defined
herein.
Dated as of August 11, 1997.
Xxxxxx X. Xxxxxxx
\s\ Xxxxxx X. Xxxxxxx
Xxxxx X. Xxxxxxx
\s\ Xxxxx X. Xxxxxxx
-2-
EXHIBIT A
Pilgrim's Pride Corporation
SECURED REVOLVING CREDIT NOTE
August 11, 1997
FOR VALUE RECEIVED, the undersigned, PILGRIM'S PRIDE CORPORATION, a
Delaware corporation (the "COMPANY"), promises to pay to the order of
________________ (the "LENDER") on the Termination Date (as defined in the
Credit Agreement referred to below), at the principal office of Xxxxxx
Trust and Savings Bank in Chicago, Illinois, the aggregate unpaid principal
amount of all Revolving Credit Loans and Bid Loans made by the Lender to
the Company under the Revolving Credit provided for under the Credit
Agreement hereinafter mentioned and remaining unpaid on the Termination
Date, together with interest on the principal amount of each Revolving
Credit Loan and Bid Loan from time to time outstanding hereunder at the
rates, and payable in the manner and on the dates specified in said Credit
Agreement.
The Lender shall record on its books or records or on the schedule to
this Note which is a part hereof the principal amount of each Revolving
Credit Loan and Bid Loan made under the Revolving Credit, whether each Loan
is a Domestic Rate Loan or a Eurodollar Loan and, with respect to Fixed
Rate Loans, the interest rate and Interest Period applicable thereto, and
all payments of principal and interest and the principal balances from time
to time outstanding; provided that prior to the transfer of this Note all
such amounts shall be recorded on a schedule attached to this Note. The
record thereof, whether shown on such books or records or on the schedule
to this Note, shall be PRIMA FACIE evidence as to all such amounts;
provided, however, that the failure of the Lender to record or any mistake
in recording any of the foregoing shall not limit or otherwise affect the
obligation of the Company to repay all Revolving Credit Loans and Bid Loans
made under the Credit Agreement, together with accrued interest thereon.
This Note is one of the Revolving Notes referred to in and issued
under that certain Amended and Restated Secured Credit Agreement dated as
of August 11, 1997, among the Company, Xxxxxx Trust and Savings Bank, as
Agent, and the banks named therein, as amended from time to time (the
"CREDIT AGREEMENT"), and this Note and the holder hereof are entitled to
all of the benefits and security provided for thereby or referred to
therein, including without limitation the collateral security provided
pursuant to the Security Agreement (as defined in the Credit Agreement), to
which Credit Agreement and Security Agreement reference is hereby made for
a statement thereof and a statement of the terms and conditions upon which
the Agent may exercise rights with respect to such collateral. All defined
terms used in this Note, except terms otherwise defined herein, shall have
the same meaning as such terms have in said Credit Agreement.
Prepayments may be made on any Revolving Credit Loan evidenced hereby
and this Note (and the Revolving Credit Loans evidenced hereby) may be
declared due prior to the expressed maturity thereof, all in the events, on
the terms and in the manner as provided for in said Credit Agreement and
the Security Agreement.
All agreements between the Company, the Agent (as defined in the
Credit Agreement) and each of the Banks (as defined in the Credit
Agreement), whether now existing or hereafter arising and whether written
or oral, are expressly limited so that in no contingency or event
whatsoever, whether by reason of demand or acceleration of the maturity of
any of the indebtedness hereunder or otherwise, shall the amount contracted
for, charged, received, reserved, paid or agreed to be paid to the Agent or
each Bank for the use, forbearance, or detention of the funds advanced
hereunder or otherwise, or for the performance or payment of any covenant
or obligation contained in any document executed in connection herewith
(all such documents being hereinafter collectively referred to as the
"CREDIT DOCUMENTS"), exceed the highest lawful rate permissible under
applicable law (the "HIGHEST LAWFUL RATE"), it being the intent of the
Company, the Agent and each of the Banks in the execution hereof and of the
Credit Documents to contract in strict accordance with applicable usury
laws. If, as a result of any circumstances whatsoever, fulfillment by the
Company of any provision hereof or of any of such documents, at the time
performance of such provision shall be due, shall involve transcending the
limit of validity prescribed by applicable usury law or result in the Agent
or any Bank having or being deemed to have contracted for, charged,
reserved or received interest (or amounts deemed to be interest) in excess
of the maximum, lawful rate or amount of interest allowed by applicable law
to be so contracted for, charged, reserved or received by the Agent or such
Bank, then, IPSO FACTO, the obligation to be fulfilled by the Company shall
be reduced to the limit of such validity, and if, from any such
circumstance, the Agent or such Bank shall ever receive interest or
anything which might be deemed interest under applicable law which would
exceed the Highest Lawful Rate, such amount which would be excessive
interest shall be refunded to the Company or, to the extent (i) permitted
by applicable law and (ii) such excessive interest does not exceed the
unpaid principal balance of the Notes (as defined in the Credit Agreement)
and the amounts owing on other obligations of the Company to the Agent or
any Bank under any Loan Document (as defined in the Credit Agreement)
applied to the reduction of the principal amount owing on account of the
Notes or the amounts owing on other obligations of the Company to the Agent
or any Bank under any Loan Document and not to the payment of interest.
All interest paid or agreed to be paid to the Agent or any Bank shall, to
the extent permitted by applicable law, be amortized, prorated, allocated,
and spread throughout the full period of the indebtedness hereunder until
payment in full of the principal of the indebtedness hereunder (including
the period of any renewal or extension thereof) so that the interest on
account of the indebtedness hereunder for such full period shall not exceed
the highest amount permitted by applicable law. This paragraph shall
control all agreements between the Company, the Agent and the Banks.
The undersigned hereby expressly waives diligence, presentment,
demand, protest, notice of protest, notice of intent to accelerate, notice
of acceleration, and notice of any other kind.
IT IS AGREED THAT THIS NOTE AND THE RIGHTS AND REMEDIES OF THE HOLDER
HEREOF SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF ILLINOIS, PROVIDED, HOWEVER, THAT NOTHING IN THIS NOTE
SHALL BE DEEMED TO CONSTITUTE A WAIVER OF ANY RIGHTS WHICH THE COMPANY, THE
AGENT OR ANY OF THE BANKS MAY HAVE UNDER THE NATIONAL BANK ACT OR OTHER
APPLICABLE FEDERAL LAW.
PILGRIM'S PRIDE CORPORATION
By \s\ Xxxxxxxx X. Xxxxxx
____________Its Executive President
-2-
EXHIBIT B
L/C AGREEMENT
-2-
EXHIBIT C
ENVIRONMENTAL DISCLOSURE
1. Pilgrim's Pride Corporation previously leased a facility located at
0000 Xxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxxx for use as a storage and
distribution center. When Pilgrim's Pride initial occupied the
facility there were underground storage tanks that had been installed
by others. Pilgrim's Pride Corporation subsequently had the tanks
removed in accordance with Texas Natural Resource Conversation
Commission regulations. Testing of soil from the tank holes indicated
some elevated levels of petroleum based compounds. Pilgrim's Pride
Corporation is working with the TNRCC to further investigate this
situation and take remedial action as deemed appropriate. The
majority of any remediation costs will be covered by funds from the
TNRCC remediation fund, with the financial exposure to Pilgrim's Pride
Corporation being relatively minimal, i.e. estimated at less than
$25,000.
-2-
EXHIBIT D
PERMITTED LIENS
LIEN DATE LIEN HOLDER COLLATERAL
10/05/90 State Street Bank
& Trust Company
of Connecticut, N.A. Real Property and Personal Property located
in and around Nacogdoches and Lufkin, Texas,
DeQueen and Nashville, Arkansas and Camp and
Upshur Counties more fully described in a Note
Purchase Agreement dated 9/21/90, as amended.
11/05/86 State Street Bank
& Trust Company
of Connecticut, N.A. Real Property and Personal Property located in
and around Nacogdoches and Lufkin, Texas,
DeQueen and Nashville, Arkansas and Camp and
Upshur Counties more fully described in a Note
Purchase Agreement dated 9/21/90, as amended.
05/01/88 Ameritrust Real Property and Personal Property described
in a Deed of Trust dated 10/4/90, as amended,
from Pilgrim's Pride Corporation to
Ameritrust.
08/09/80 Ameritrust First lien on Feed Mill located in
Nacogdoches, Texas.
10/05/90 State Street Bank
& Trust Company of
Connecticut, N.A. Real Property and Personal Property located in
and around Nacogdoches and Lufkin, Texas,
DeQueen and Nashville, Arkansas and Camp and
Upshur Counties more fully described in a Note
Purchase Agreement dated 9/21/90, as amended.
1/23/88 Connecticut Mutual
Life Real Property located in Xxxxxx County and
known as Riverby Farm.
10/28/89 Federal Land Bank Real Property located in Xxxxx County and known
as Chicota and Slate Shoals Farms.
10/28/87 Federal Land Bank Real Property located in Xxxxx County and known
as Chicota and Slate Shoals Farms.
2/26/88 Federal Land Bank Real Property located in Xxxxx County and known
as Chicota and Slate Shoals Farms.
7/28/80 Xxxx Xxxxxxx Xxx.Xxxx Insurance Policy on the Life of
Xxxxxx X. Xxxxxxx
2/01/88 Xxxx Xxxxxxx Xxx.Xxxx Real Property and Personal Property described
in a Deed of Trust dated 2/1/88, as amended,
from Pilgrim's Pride Corporation to Xxxx
Xxxxxxx Mutual Life.
05/24/91 Xxxx Xxxxxxx Xxx.Xxxx Real Property and Personal Property described
in a Deed of Trust dated 2/1/88 as amended,
from Pilgrim's Pride Corporation to Xxxx
Xxxxxxx Mutual Life.
09/26/90 Hibernia National Bank Real Property and Personal Property described
in a Deed of Trust dated 9/20/90 as amended,
from Pilgrim's Pride Corporation to Hibernia
National Bank.
10/16/90 North Texas P.C.A. Real Property and Personal Property described
in a Deed of Trust dated 10/16/90, as amended,
from Pilgrim's Pride Corporation to The North
Texas P.C.A.
10/03/85 Creditanstalt Real Property and Personal Property described
in a Deed of Trust dated 9/24/85 as amended,
from Pilgrim's Pride Corporation to RaboBank
Nederland.
12/03/87 Creditanstalt Real Property and Personal Property described
in a Deed of Trust dated 9/24/85 as amended,
from Pilgrim's Pride Corporation to RaboBank
Nederland.
06/01/90 Creditanstalt Real Property and Personal Property described
in a Deed of Trust dated 9/24/85 as amended,
from Pilgrim's Pride Corporation to RaboBank
Nederland.
06/02/86 Xxxxxx X. Xxxxxxx Real Property located in Camp County and known
as part of "Lake" Property.
09/22/89 NCNB-Kerrville Real Property and Personal Property described
in a Deed of Trust dated 9/21/88 from Pilgrim's
Pride Corporation to Xxxxxxx Xxxxxxxxx Bank.
10/11/91 XL Data Comp Capitalized Lease-Master Lease dated 10/11/91.
6/2/89 Xxxx Commercial Capitalized Lease-Master Lease dated 6/20/89.
4/08/93 Welco, LTD. Capitalized Lease-Master Lease dated 4/08/93.
2/16/96 Xxxx Xxxxxxx Xxx.Xxxx Real and Personal Property described in a Deed
of Trust dated 2/16/96, as amended, from
Pilgrim's Pride Corporation to Xxxx Xxxxxxx
Mutual Life.
4/13/97 Xxxx Xxxxxxx Xxx.Xxxx Real and Personal Property described in a Deed
of Trust dated 4/13/97, as amended, from
Pilgrim's Pride Corporation to Xxxx Xxxxxxx
Mutual Life.
3/28/95 Agricultural PCA Real and Personal Property described in a Deed
of Trust dated 3/28/97, as amended, from
Pilgrim's Pride Corporation to Agricultural
PCA.
4/13/97 City of Nacogdoches,
Texas Capitalized Lease-Master Lease dated 1/1/96;
acquired in Green Acre Foods, Inc. Acquisition.
4/13/97 Various Leases Security interest or other interest of lessors
in equipment acquired in Green Acre Foods, Inc.
Acquisition.
-2-
EXHIBIT E
LEGAL OPINION
(To Be Retyped On Letterhead Of Counsel
And Dated As Of Date Of Closing)
__________________, 0000
Xxxxxx Xxxxx xxx Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxxx
FBS Ag Credit, Inc.
Denver, Colorado
CoBank, ACB
Wichita, Kansas
ING (U.S.) Capital Corporation ("ING")
New York, New York
Xxxxx Fargo Bank (Texas), N.A.
Dallas, Texas
Caisse Nationale de Credit Agricole, Chicago Branch
Chicago, Illinois
Ladies and Gentlemen:
We have served as counsel to Pilgrim's Pride Corporation, a Texas
corporation (the "BORROWER"), in connection with a revolving credit
facility being made available by you to the Borrower. As such counsel, we
have supervised the taking of the corporate proceedings necessary to
authorize the execution and delivery of, and have examined executed
originals of, the instruments and documents identified on Exhibit A to this
letter (collectively the "LOAN DOCUMENTS", individual Loan Documents and
other capitalized terms used below being hereinafter referred to by the
designations appearing on Exhibit A). As counsel to the Borrower, we are
familiar with the articles of incorporation, charter, by-laws and any other
agreements under which the Borrower is organized. We have also examined
such other instruments and records and inquired into such other factual
matters and matters of law as we deem necessary or pertinent to the
formulation of the opinions hereinafter expressed.
Based upon the foregoing and upon our examination of the articles of
incorporation, charter and by-laws of the Borrower, we are of the opinion
that:
1. The Borrower is a corporation duly organized and validly existing
and in good standing under the laws of the State of Texas with full and
adequate corporate power and authority to carry on its business as now
conducted and is duly licensed or qualified and in good standing in
jurisdiction wherein the conduct of its business or the assets and
properties owned or leased by it require such licensing or qualification.
2. The Borrower has full right, power and authority to borrow from
you, to mortgage, pledge, assign and otherwise encumber its assets and
properties as collateral security for such borrowings, to execute and
deliver the Loan Documents executed by it and to observe and perform all
the matters and things therein provided for. The execution and delivery of
the Loan Documents executed by the Borrower does not, nor will the
observance or performance of any of the matters or things therein provided
for, contravene any provision of law or of the respective articles of
incorporation, charter or by-laws of the Borrower (there being no other
agreements under which the Borrower is organized) or, to the best of our
knowledge after due inquiry, of any covenant, indenture or agreement
binding upon or affecting the Borrower or any of its properties or assets.
3. The Loan Documents executed by the Borrower have been duly
authorized by all necessary corporate action (no stockholder approval being
required), have been executed and delivered by the proper officers of the
Borrower and constitute valid and binding agreements of the Borrower
enforceable against it in accordance with their respective terms, subject
to bankruptcy, insolvency and other similar laws affecting creditors'
rights generally and to general principles of equity.
4. No order, authorization, consent, license or exemption of, or
filing or registration with, any court or governmental department, agency,
instrumentality or regulatory body, whether local, state or federal, is or
will be required in connection with the lawful execution and delivery of
the Loan Documents or the observance and performance by the Borrower of any
of the terms thereof.
5. To the best of our knowledge after due inquiry, there is no
action, suit, proceeding or investigation at law or in equity before or by
any court or public body pending or threatened against or affecting the
Borrower or any of its assets and properties which, if adversely
determined, could result in any material adverse change in the properties,
business, operations or financial condition of the Borrower or in the value
of the collateral security for your loans and other credit accommodations
to the Borrower.
6. The rates of interest provided for under the Loan Documents and
any other amounts payable thereunder that would constitute interest would
not violate any usury law of the State of Texas should such laws apply to
any of the Loan Documents or any of the indebtedness, obligations and
liabilities of the Borrower or Mr. and Xxx. Xxxxxx X. Xxxxxxx thereunder.
____________Respectfully submitted,
-3-
Exhibit A
THE LOAN DOCUMENTS
(All Loan Documents are dated as of August 11, 997. Xxxxxx Trust
and Savings Bank ("XXXXXX") in its capacity as agent under the Amended
and Restated Secured Credit Agreement is referred to below as the "AGENT"
and Xxxxxx in its individual capacity, together with the other lenders
party to the Amended and Restated Secured Credit Agreement are referred
to below as the "BANKS".)
1. Amended and Restated Secured Credit Agreement by and among the
Borrower, the Agent and the Banks.
2. Secured Revolving Credit Note of the Borrower payable to the
order of Xxxxxx in the principal amount of $26,666,667.
3. Secured Revolving Credit Note of the Borrower payable to the
order of FBS Ag Credit, Inc. in the principal amount of
$20,000,000.
4. Secured Revolving Credit Note of the Borrower payable to the
order of CoBank, ACB in the principal amount of $20,000,000.
5. Secured Revolving Credit Note of the Borrower payable to the
order of ING (U.S.) Capital Corporation in the principal amount
of $13,333,333.
6. Secured Revolving Credit Note of the Borrower payable to the
order of Xxxxx Fargo Bank (Texas), N.A. in the principal amount
of $10,000,000.
7. Secured Revolving Credit Note of the Borrower payable to the
order of Caisse Nationale de Credit Agricole, Chicago Branch.
-4-
EXHIBIT F
Pilgrim's Pride Corporation
COMPLIANCE CERTIFICATE
This Compliance Certificate is furnished to Xxxxxx Trust and Savings
Bank, as agent (the "AGENT"), pursuant to that certain Amended and
Restated Secured Credit Agreement dated as of August 11, 1997 by and
among Pilgrim's Pride Corporation (the "COMPANY"), Xxxxxx Trust and
Savings Bank and the other Banks parties thereto (the "AGREEMENT").
Unless otherwise defined herein, the terms used in this Compliance
Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _____________________________________ of
the Company;
2. I have reviewed the terms of the Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Company during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and
I have no knowledge of, the existence of any condition or event which
constitutes a Potential Default or Event of Default during or at the end
of the accounting period covered by the attached financial statements or
as of the date of this Certificate, except as set forth below; and
4. If attached financial statements are being furnished pursuant
to Section 7.4(a) or (b) of the Agreement, Schedule I attached hereto
sets forth financial data and computations, evidencing the Company's
compliance with certain covenants of the Agreement, all of which data and
computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by
listing, in detail, the nature of the condition or event, the period
during which it has existed and the action which the Company has taken,
is taking or proposes to take with respect to each such condition or
event:
_______________________________________________________
_______________________________________________________
The foregoing certifications, together with the computations set
forth in Schedule I hereto and the financial statements delivered with
this Certificate in support hereof, are made and delivered this ________
day of ______________________, 19___.
PILGRIM'S PRIDE CORPORATION
By
________________________________
Its
