EXHIBIT 10.39
THIRD AMENDMENT TO CREDIT AGREEMENT
THIS THIRD AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is entered into
as of June 1, 1996, by and between PROVENA FOODS INC., a California corporation
("Borrower"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITALS
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WHEREAS, Borrower is currently indebted to Bank pursuant to the terms and
conditions of that certain Credit Agreement between Borrower and Bank dated as
of February 1, 1995, as amended from time to time ("Credit Agreement").
WHEREAS, Bank and Borrower have agreed to certain changes in the terms and
conditions set forth in the Credit Agreement and have agreed to amend the Credit
Agreement to reflect said changes.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree that the Credit
Agreement shall be amended as follows:
1. Section 1.1.(a) is hereby amended by deleting "June 1, 1996" as the last
day on which Bank will make advances under the Line of Credit, and by
substituting for said date "June 1, 1997," with such change to be effective upon
the execution and delivery to Bank of a promissory note substantially in the
form of Exhibit A attached hereto (which promissory note shall replace and be
deemed the Line of Credit Note defined in and made pursuant to the Credit
Agreement) and all other contracts,
instruments and documents required by Bank to evidence such change.
2. Section 4.9.(b) is hereby deleted in its entirety, and the following
substituted therefor:
"(b) Tangible Net Worth not at any time less than Six Million Seven Hundred
Ninety Thousand Dollars ($6,790,000.00), with "Tangible Net Worth" defined
as the aggregate of total stockholders' equity plus subordinated debt less
any intangible assets."
3. The following is hereby added to the Credit Agreement as Section 4.11.:
"Section 4.11. VIOLATION OF ANY FINANCIAL COVENANT. Provide to Bank a
security interest of first priority in all Borrower's accounts receivable,
other rights to payment and general intangibles, inventory and equipment
upon the violation of any financial covenant."
4. Except as specifically provided herein, all terms and conditions of the
Credit Agreement remain in full force and effect, without waiver or
modification. All terms defined in the Credit Agreement shall have the same
meaning when used in this Amendment. This Amendment and the Credit Agreement
shall be read together, as one document.
5. Borrower hereby remakes all representations and warranties contained in
the Credit Agreement and reaffirms all covenants set forth therein. Borrower
further certifies that as of the date of this Amendment there exists no Event of
Default as defined in the Credit Agreement, nor any condition, act or event
which with the giving of notice or the passage of time or both would constitute
any such Event of Default.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed as of the day and year first written above.
XXXXX FARGO BANK,
PROVENA FOODS INC. NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Title: CFO Vice President
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EXHIBIT A
XXXXX FARGO BANK REVOLVING LINE OF CREDIT NOTE
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$2,000,000.00 Irvine, California
June 1, 1996
FOR VALUE RECEIVED, the undersigned PROVENA FOODS INC. ("Borrower") promises
to pay to the order of XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank") at its
office at Orange Coast RCBO, 0000 Xxxx Xxxxxx Xxxxx 000, Xxxxxx, XX 00000, or at
such other place as the holder hereof may designate, in lawful money of the
United States of America and in immediately available funds, the principal sum
of $2,000.000.00, or so much thereof as may be advanced and be outstanding, with
interest thereon, to be computed on each advance from the date of its
disbursement as set forth herein.
INTEREST:
(a) Interest. The outstanding principal balance of this Note shall bear
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interest at a rate per annum (computed on the basis of a 360-day year, actual
days elapsed) .37500% above the Prime Rate in effect from time to time. The
"Prime Rate" is a base rate that Bank from time to time establishes and which
serves as the basis upon which effective rates of interest are calculated for
those loans making reference thereto. Each change in the rate of interest
hereunder shall become effective on the date each Prime Rate change is announced
within Bank.
(b) Payment of Interest. Interest accrued on this Note shall be payable on the
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1st day of each month, commencing July 1, 1996.
(c) Default Interest. From and after the maturity date of this Note, or such
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earlier date as all principal owing hereunder becomes due and payable by
acceleration or otherwise, the outstanding principal balance of this Note shall
bear interest until paid in full at an increased rate per annum (computed on the
basis of a 360-day year, actual days elapsed) equal to 4% above the rate of
interest from time to time applicable to this Note.
BORROWING AND REPAYMENT:
(a) Borrowing and Repayment. Borrower may from time to time during the term of
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this Note borrow, partially or wholly repay its outstanding borrowings, and
reborrow, subject to all of the limitations, terms and conditions of this Note
and of the Credit Agreement between Borrower and Bank defined below; provided
however, that the total outstanding borrowings under this Note shall not at any
time exceed the principal amount stated above. The unpaid principal balance of
this obligation at any time shall be the total amounts advanced hereunder by the
holder hereof less the amount of principal payments made hereon by or for any
Borrower, which balance may be endorsed hereon from time to time by the holder.
The outstanding principal balance of this Note shall be due and payable in full
on June 1, 1997.
(b) Advances. Advances hereunder, to the total amount of the principal sum
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available hereunder, may be made by the holder at the oral or written request of
(i) XXXXXX X. XXXXXXXX or XXXX X. XXXXXXXX, any one acting alone, who are
authorized to request advances and direct the disposition of any advances until
written notice of the revocation of such authority is received by the holder at
the office designated above, or (ii) any person, with respect to advances
deposited to the credit of any account of any Borrower with the holder, which
advances, when so deposited, shall be conclusively presumed to have been made to
or for the benefit of each Borrower regardless of the fact that persons other
than those authorized to request advances may have authority to draw against
such account. The holder shall have no obligation to determine whether any
person requesting an advance is or has been authorized by any Borrower.
(c) Application of Payments. Each payment made on this Note shall be credited
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first, to any interest then due and second, to the outstanding principal balance
hereof.
EVENTS OF DEFAULT:
This Note is made pursuant to and is subject to the terms and conditions of
that certain Credit Agreement between Borrower and Bank dated as of February 1,
1995, as amended from time to time (the "Credit Agreement"). Any default in the
payment or performance of any obligation under this Note, or any defined event
of default under the Credit Agreement, shall constitute an "Event of Default"
under this Note.
MISCELLANEOUS:
(a) Remedies. Upon the occurrence of any Event of Default as defined in the
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Credit Agreement, the holder of this Note, at the holder's option, may declare
all sums of principal and interest outstanding hereunder to be immediately due
and payable without presentment, demand, protest or notice of dishonor, all of
which are expressly waived by each Borrower, and the obligation, if any, of the
holder to extend any further credit hereunder shall immediately cease and
terminate. Each Borrower shall pay to the holder immediately upon demand the
full amount of all payments, advances, charges, costs and expenses, including
reasonable attorneys' fees (to include outside counsel fees and all allocated
costs of the holder's in-house counsel), incurred by the holder in connection
with the enforcement of the holder's rights and/or the collection of any amounts
which become due to the holder under this Note, and the prosecution or defense
of any action in any way related to this Note, including without limitation, any
action for declaratory relief, and including any of the foregoing incurred in
connection with any bankruptcy
Revolving Line of Credit Note, Page 1
proceeding relating to any Borrower.
(b) Obligations Joint and Several. Should more than one person or entity sign
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this Note as a Borrower, the obligations of each such Borrower shall be joint
and several.
(c) Governing Law. This Note shall be governed by and construed in accordance
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with the laws of the State of California, except to the extent Bank has greater
rights or remedies under Federal law, whether as a national bank or otherwise,
in which case such choice of California law shall not be deemed to deprive Bank
of any such rights and remedies as may be available under Federal law.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date
first written above.
PROVENA FOODS INC.
By:
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Title:
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Revolving Line of Credit Note, Page 2
