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EXHIBIT 10.13
PARENT GUARANTEE AGREEMENT dated as of September 17, 1996,
between PSF HOLDINGS, L.L.C., a Delaware limited liability
company (the "Guarantor") and THE CHASE MANHATTAN BANK, a New
York banking corporation, as collateral agent (the "Collateral
Agent") for the Secured Parties (as defined in the Credit
Agreement referred to below).
Reference is made to the Credit Agreement dated as of September 17,
1996, (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Guarantor, Premium Standard Farms, Inc., a
Delaware corporation and a wholly owned subsidiary of the Guarantor (the
"Borrower"), the lenders from time to time party thereto (the "Lenders"), The
Chase Manhattan Bank, as administrative agent (in such capacity, the
"Administrative Agent"), as Collateral Agent and as issuing bank (in such
capacity, the "Issuing Bank"). Capitalized terms used herein and not defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The Lenders have agreed to make Loans to and the Issuing Bank has
agreed to issue Letters of Credit for the account of the Borrower, pursuant to,
and upon the terms and subject to the conditions specified in, the Credit
Agreement. The Guarantor owns all the Capital Stock of the Borrower and will
derive substantial benefit from the making of the Loans by the Lenders and the
issuance of the Letters of Credit by the Issuing Bank. The obligations of the
Lenders to make Loans and of the Issuing Bank to issue Letters of Credit are
conditioned upon, among other things, the execution and delivery by the
Guarantor of a Parent Guarantee Agreement in the form hereof. As consideration
therefor and in order to induce the Lenders to make Loans and the Issuing Bank
to issue Letters of Credit, the Guarantor is willing to execute this Agreement.
Accordingly, the parties hereto agree as follows:
SECTION 1. Guarantee. The Guarantor unconditionally guarantees, as a
primary obligor and not merely as a surety, (a) the due and punctual payment of
(i) the principal of and premium, if any, and interest (including interest
accruing during the pendency of any bankruptcy, insolvency, receivership or
other similar proceeding, regardless of whether allowed or allowable in such
proceeding) on the Loans, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the Borrower under the Credit Agreement in
respect of any Letter of Credit, when and as due, including payments in respect
of reimbursement of disbursements, interest thereon and obligations to provide
cash collateral and (iii) all other monetary obligations, including fees,
costs, expenses and indemnities, whether primary, secondary, direct,
contingent, fixed or otherwise (including monetary obligations incurred during
the pendency of any bankruptcy, insolvency, receivership or other similar
proceeding, regardless of whether allowed or allowable in such proceeding), of
the Loan Parties to the Secured Parties under the Credit Agreement and the
other Loan Documents and (b) the due and punctual performance of all covenants,
agreements, obligations and liabilities of the Loan Parties under or pursuant
to the Credit
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Agreement and the other Loan Documents (all the monetary and other obligations
referred to in the preceding clauses (a) and (b) being collectively called the
"Obligations"). The Guarantor further agrees that the Obligations may be
extended or renewed, in whole or in part, without notice to or further assent
from it, and that it will remain bound upon its guarantee notwithstanding any
extension or renewal of any Obligation.
SECTION 2. Obligations Not Waived. To the fullest extent permitted by
applicable law, the Guarantor waives presentment to, demand of payment from and
protest to the Borrower of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment. To the
fullest extent permitted by applicable law, the obligations of the Guarantor
hereunder shall not be affected by (a) the failure of the Collateral Agent or
any other Secured Party to assert any claim or demand or to enforce or exercise
any right or remedy against the Borrower or any other guarantor of the
Obligations under the provisions of the Credit Agreement, any other Loan
Document or otherwise, (b) any rescission, waiver, amendment or modification
of, or any release from any of the terms or provisions of this Agreement, any
other Loan Document, any Guarantee or any other agreement, including with
respect to any other guarantor of the Obligations or (c) the failure to perfect
any security interest in, or the release of, any of the security held by or on
behalf of the Collateral Agent or any other Secured Party.
SECTION 3. Security. The Guarantor authorizes the Collateral Agent
and each of the other Secured Parties to (a) take and hold security for the
payment of this Guarantee and the Obligations and exchange, enforce, waive and
release any such security, (b) apply such security and direct the order or
manner of sale thereof as they in their sole discretion may determine and (c)
release or substitute any one or more endorsees, other guarantors or other
obligors.
SECTION 4. Guarantee of Payment. The Guarantor further agrees that
its guarantee constitutes a guarantee of payment when due and not of
collection, and waives any right to require that any resort be had by the
Collateral Agent or any other Secured Party to any of the security held for
payment of the Obligations or to any balance of any deposit account or credit
on the books of the Collateral Agent or any other Secured Party in favor of the
Borrower or any other person.
SECTION 5. No Discharge or Diminishment of Guarantee. The obligations
of the Guarantor hereunder shall not be subject to any reduction, limitation,
impairment or termination for any reason (other than the payment in full in
cash of the Obligations), including any claim of waiver, release, surrender,
alteration or compromise of any of the Obligations, and shall not be subject to
any defense or setoff, counterclaim, recoupment or termination whatsoever by
reason of the invalidity, illegality or unenforceability of the Obligations or
otherwise. Without limiting the generality of the foregoing, the obligations
of the Guarantor hereunder shall not be discharged or impaired or otherwise
affected by the failure of the Collateral Agent or any other Secured Party to
assert any claim or demand or to enforce any remedy under the Credit Agreement,
any other Loan Document or any other agreement, by any waiver or modification
of any provision of any thereof, by any default, failure or delay, wilful or
otherwise, in the
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performance of the Obligations, or by any other act or omission that may or
might in any manner or to any extent vary the risk of the Guarantor or that
would otherwise operate as a discharge of the Guarantor as a matter of law or
equity (other than the payment in full in cash of all the Obligations).
SECTION 6. Defenses of Borrower Waived. To the fullest extent
permitted by applicable law, the Guarantor waives any defense based on or
arising out of any defense of the Borrower or the unenforceability of the
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower, other than the final payment in full in cash
of the Obligations. The Collateral Agent and the other Secured Parties may, at
their election, foreclose on any security held by one or more of them by one or
more judicial or nonjudicial sales, accept an assignment of any such security
in lieu of foreclosure, compromise or adjust any part of the Obligations, make
any other accommodation with the Borrower or any other guarantor or exercise
any other right or remedy available to them against the Borrower or any other
guarantor, without affecting or impairing in any way the liability of the
Guarantor hereunder except to the extent the Obligations have been fully and
finally paid in cash. To the fullest extent permitted by applicable law, the
Guarantor waives any defense arising out of any such election even though such
election operates, pursuant to applicable law, to impair or to extinguish any
right of reimbursement or subrogation or other right or remedy of the Guarantor
against the Borrower or any other guarantor, as the case may be, or any
security.
SECTION 7. Agreement to Pay; Subrogation. In furtherance of the
foregoing and not in limitation of any other right that the Collateral Agent or
any other Secured Party has at law or in equity against the Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, the Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Collateral
Agent or such other Secured Party as designated thereby in cash the amount of
such unpaid Obligations. Upon payment by the Guarantor of any sums to the
Collateral Agent or any Secured Party as provided above, all rights of the
Guarantor against the Borrower arising as a result thereof by way of right of
subrogation, contribution, reimbursement, indemnity or otherwise shall in all
respects be subordinate and junior in right of payment to the prior payment in
full in cash of all the Obligations. In addition, any indebtedness of the
Borrower now or hereafter held by the Guarantor is hereby subordinated in right
of payment to the prior payment in full of the Obligations. If any amount
shall erroneously be paid to the Guarantor on account of (i) such subrogation,
contribution, reimbursement, indemnity or similar right or (ii) any such
indebtedness of the Borrower, such amount shall be held in trust for the
benefit of the Secured Parties and shall forthwith be paid to the Collateral
Agent to be credited against the payment of the Obligations, whether matured or
unmatured, in accordance with the terms of the Loan Documents.
SECTION 8. Information. The Guarantor assumes all responsibility for
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Obligations and the nature, scope and extent of the risks that the
Guarantor assumes and incurs hereunder, and agrees that none of the
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Collateral Agent or the other Secured Parties will have any duty to advise the
Guarantor of information known to it or any of them regarding such
circumstances or risks.
SECTION 9. Termination. The Guarantee made hereunder (a) shall
terminate when all the Obligations have been paid in full in cash and the
Lenders have no further commitment to lend under the Credit Agreement, the L/C
Exposure has been reduced to zero and the Issuing Bank has no further
obligation to issue Letters of Credit under the Credit Agreement and (b) shall
continue to be effective or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any Obligation is rescinded or must otherwise
be restored by any Secured Party or the Guarantor upon the bankruptcy or
reorganization of the Borrower, the Guarantor or otherwise.
SECTION 10. Binding Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the Guarantor that are contained in
this Agreement shall bind and inure to the benefit of each party hereto and
their respective successors and assigns. This Agreement shall become effective
when a counterpart hereof executed on behalf of the Guarantor shall have been
delivered to the Collateral Agent and a counterpart hereof shall have been
executed on behalf of the Collateral Agent, and thereafter shall be binding
upon the Guarantor and the Collateral Agent and their respective successors and
assigns, and shall inure to the benefit of the Guarantor, the Collateral Agent
and the other Secured Parties, and their respective successors and assigns,
except that the Guarantor shall not have the right to assign its rights or
obligations hereunder or any interest herein (and any such attempted assignment
shall be void).
SECTION 11. Waivers; Amendment. (a) No failure or delay of the
Collateral Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. The rights and remedies of the Collateral Agent
hereunder and of the other Secured Parties under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure by the Guarantor therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on the Guarantor in any case shall entitle the
Guarantor to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to a written agreement entered into between
the Guarantor and the Collateral Agent, with the prior written consent of the
Required Lenders (except as otherwise provided in the Credit Agreement).
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SECTION 12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 13. Notices. All communications and notices hereunder shall
be in writing and given as provided in Section 9.01 of the Credit Agreement.
SECTION 14. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Guarantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Collateral Agent and the other Secured Parties and
shall survive the making by the Lenders of the Loans and the issuance of the
Letters of Credit by the Issuing Bank regardless of any investigation made by
the Secured Parties or on their behalf, and shall continue in full force and
effect as long as the principal of or any accrued interest on any Loan or any
other fee or amount payable under this Agreement or any other Loan Document is
outstanding and unpaid or the L/C Exposure does not equal zero and as long as
the Commitments and the L/C Commitment have not been terminated.
SECTION 15. Counterparts. This Agreement may be executed in
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute a single contract, and shall become effective
as provided in Section 10. Delivery of an executed signature page to this
Agreement by facsimile transmission shall be as effective as delivery of a
manually executed counterpart of this Agreement.
SECTION 16. Rules of Interpretation. The rules of interpretation
specified in Section 1.02 of the Credit Agreement shall be applicable to this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PSF HOLDINGS, L.L.C., as Guarantor,
by
/s/ X.X. Xxxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK, as Collateral Agent,
by
/s/ Xxxxxxxx Xxxxxx
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Name: Xxxxxxxx Xxxxxx
Title: Vice President
