AMENDED AND RESTATED
SECURITY AGREEMENT
THIS AMENDED AND RESTATED SECURITY AGREEMENT (the "Agreement"), dated as of
September 5, 2000, is entered into by and between XXXXXXXXX FOODS VENTURE, L.P.,
a Texas limited partnership (the "Borrower"), and PNC BANK, NATIONAL
ASSOCIATION, a national banking association (the "Agent"), as Agent for the
Banks (the Agent and the Banks will be collectively referred to as the "Banks");
WITNESSETH THAT:
WHEREAS, the Borrower is (or will be with respect to after-acquired
property)the legal and beneficial owner and the holder of the Collateral (as
defined in Section 1 hereof); and
WHEREAS, pursuant to that certain Amended and Restated Credit Agreement (as
it may hereafter from time to time be restated, amended, modified or
supplemented, the "Credit Agreement")of even date herewith between the Banks and
the Borrower, the Banks have agreed to make certain loans to the Borrower; and
WHEREAS, the obligation of the Banks to make loans under the Credit
Agreement is subject to the condition, among others, that the Borrower secure
its obligations to the Banks under the Credit Agreement in the manner set forth
herein.
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
covenant and agree as follows:
1. Terms which are defined in the Credit Agreement and not otherwise defined
herein are used herein as defined therein. The following words and terms
shall have the following meanings, respectively, unless the context hereof
otherwise clearly requires:
1.1 "Code" means the Uniform Commercial Code of each state as in effect on
the date hereof and as the same may subsequently be amended from time
to time, the substantive provisions of which are applicable to any of
the property of the Borrower in which the Agent, for the benefit of
the Banks, are granted a security interest pursuant to this Agreement.
1.2 "Collateral" means all of the Borrower's right, title and interest in,
to and under the following described property of the Borrower (each
capitalized term used in this Section 1.2 shall have in this Agreement
the meaning given to it by Article 9 of the Code as in effect in
Ohio):
1.2.1 all now existing and hereafter acquired and arising Accounts,
General Intangibles, Chattel Paper, Documents, Instruments,
Letters of Credit, Advices of Credit, Equipment, and Inventory,
all Products of and Accessions to the foregoing and all Proceeds
of all of the foregoing
(including without limitation all insurance policies and proceeds
thereof);
1.2.2 to the extent, if any, not included in clause (i)above, each and
every other item of personal property and fixtures, both those
that are now owned and those that hereafter arise or are
acquired, regardIess of whether Article 9 of the Code is
applicable to any extent to the creation, perfection or
enforcement of Liens thereon or therein.
Without limiting the foregoing, Collateral includes all business
records and information, including computer tapes and other
storage media containing the same and computer programs and
software (including without limitation, source code, object code
and related manuals and documentation and all licenses to use
such software)for accessing and manipulating such information.
1.3 "Debt" means, collectively, all now existing and hereafter arising
Indebtedness of the Borrower to any of the Banks under the Credit
Agreement and other Loan Documents, including without limitation, all
Indebtedness, whether of principal, interest, fees, expenses or
otherwise, of the Borrower to any of the Banks now existing or
hereafter incurred under the Credit Agreement or the Notes, or any of
the other Loan Documents referred to therein as any of the same or any
one or more of them may from time to time be amended, restated,
modified or supplemented, together with any and all extensions,
renewals, refinancings or refundings thereof in whole or in part.
1.4 "Receivables" means all of the Collateral except Equipment and
Inventory.
2. As security for the due and punctual payment and performance of the Debt in
full, the Borrower hereby agrees that the Agent, for the benefit of the
Banks, shall have, and the Borrower hereby grants to and creates in favor
of the Agent, for the benefit of the Banks, a first priority security
interest under the Code in and to the Collateral subject only to Permitted
Liens. Without limiting the generality of Section 4 below, the Borrower
further agrees that with respect to each item of Collateral as to which
(i)the creation of a valid and enforceable security interest is not
governed exclusively by the Code or (ii)the perfection of a valid and
enforceable security interest therein under the Code cannot be accomplished
either by the Agent taking possession thereof or by the filing in
appropriate locations of appropriate Code financing statements executed by
the Borrower, the Borrower will at its expense execute and deliver to the
Agent such documents, agreements, notices, assignments and instruments and
take such further actions as may be requested by the Agent from time to
time for the purpose of creating a valid and perfected first priority Lien
on such item, subject only to Permitted Liens, enforceable against the
Borrower and all third parties to secure the Debt.
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3. The Borrower represents and warrants to the Agent that (a)the Borrower has
good and marketable title to the Collateral, and (b)except for the security
interest granted to and created in favor of the Agent, for the benefit of
the Banks, hereunder and Permitted Liens, all the Collateral is free and
clear of any Lien.
4. The Borrower will faithfully preserve and protect the security interest
granted to the Agent, for the benefit of the Banks, in the Collateral as a
prior perfected security interest under the Code, superior and prior to the
rights of all third Persons, except for Permitted Liens, and will do all
such other acts and things and will, upon reasonable request therefor by
the Agent, execute, deliver, file and record all such other documents and
instruments, including, without limitation, financing statements, security
agreements, assignments and documents and powers of attorney with respect
to the Collateral, and pay all filing fees and taxes related thereto, as
the Agent, in its reasonable discretion, may deem necessary or advisable
from time to time in order to attach, continue, preserve, perfect and
protect said security interest; and the Borrower hereby irrevocably
appoints the Agent, its officers, employees and agents, or any of them, as
attorneys-in-fact for the Borrower to execute, deliver, tile and record
such items for the Borrower and in the Borrower's name, place and stead.
This power of attorney, being coupled with an interest, shall be
irrevocable for the life of this Agreement. The Borrower also authorizes
the Agent to file one or more financing statements, as deemed necessary or
desirable by the Agent, for the benefit of the Banks, which financing
statements lists or otherwise describes the Collateral as consisting of all
of the Borrower's assets or words to that effect, regardless of the actual
description of the Collateral set forth in this Agreement.
5. The Borrower covenants and agrees that:
5.1 it will defend the Agent's right, title and security interest in and
to the Collateral, held by the Agent for the benefit of the Banks, and
the proceeds thereof against the claims and demands of all Persons
whomsoever, other than any Person claiming a right in the Collateral
pursuant to an agreement between such Person and any of the Banks;
5.2 it will not suffer or permit to exist on any Collateral any Lien
except for Permitted Liens;
5.3 it will not take or omit to take any action, the taking or the
omission of which might result in a material alteration or impairment
of the Collateral or of the Agent's rights under this Agreement;
5.4 it will not sell, assign or otherwise dispose of any portion of the
Collateral;
5.5 it will (i)obtain and maintain sole and exclusive possession of the
Collateral, (ii)keep the Collateral and all records pertaining thereto
at the locations specified on the Security Interest Data Summary
attached as Schedule A hereto, unless it shall have given the Agent
prior notice and taken any action reasonably requested
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by the Agent to maintain its security interest, held for the benefit
of the Banks, therein, (iii)upon the occurrence of an Event of
Default, deliver to the Agent upon the Agent's request therefor all
Collateral consisting of Instruments as soon as practicable upon the
Borrower's receipt of a request therefor provided that such
Instruments required by applicable state law to stay on site will
remain on site, and (iv)keep materially accurate and complete books
and records concerning the Collateral and such other books and records
as the Agent may from time to time reasonably require;
5.6 upon the occurrence of an Event of Default, it will furnish to the
Agent as soon as practicable such information and documents relating
to the Collateral as the Agent may reasonably request, including,
without limitation, all invoices, Documents, contracts, Chattel Paper,
Instruments and other writings pertaining to the Borrower's contracts
or the performance thereof, provided that any Instruments required by
applicable state law to stay on site will remain on site; all of the
foregoing to be certified upon request of the Agent by an Authorized
Officer of the Borrower;
6. The Borrower assumes full responsibility for taking any and all necessary
steps to preserve the Agent's rights with respect to the Collateral, held
for the benefit of the Banks, against all Persons other than anyone
asserting rights in respect of a Permitted Lien. The Agent shall be deemed
to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Agent takes such action for that
purpose as the Borrower shall request in writing, provided that such
requested action will not, in the judgment of the Agent, impair the
security interest in the Collateral created hereby or the Agent's rights
in, or the value of, the Collateral, and provided further that such written
request is received by the Agent in sufficient time to permit the Agent to
take the requested action.
7. At any time and from time to time whether or not an Event of Default then
exists and without prior notice to or consent of the Borrower, the Agent
may at its option take such actions as the Agent deems appropriate (i)to
attach, perfect, continue, preserve and protect the Agent's prior security
interest in the Collateral, and/or (ii)inspect, audit and verify the
Collateral, including reviewing all of the Borrower's books and records and
copying and making excerpts therefrom, provided that prior to an Event of
Default or a Potential Default, the same is done with advance notice during
normal business hours to the extent access to the Borrower's premises is
required, and to add all liabilities, obligations, costs and expenses
reasonably incurred in connection with the foregoing clauses (i)and (ii)to
the Debt, to be paid by the Borrower to the Agent, for the benefit of the
Banks, upon demand;
8. At any time and from time to time after an Event of Default exists and is
continuing and without prior notice to or consent of the Borrower, the
Agent may at its option take such action as the Agent deems appropriate
(i)to maintain, repair, protect and insure the Collateral, and/or (ii)to
perform, keep, observe and render true and correct any and all
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covenants, agreements, representations and warranties of the Borrower
hereunder, and to add all liabilities, obligations, costs and expenses
reasonably incurred in connection with the foregoing clauses (i)and (ii)to
the Debt, to be paid by the Borrower to the Agent, for the benefit of the
Banks, upon demand.
9. After there exists any Event of Default under the Credit Agreement:
9.1 The Agent shall have and may exercise all the rights and remedies
available to a secured party under the Code in effect at the time, and
such other rights and remedies as may be provided by Law and as set
forth below, including without limitation to take over and collect all
the Borrower's Receivables and all other Collateral, and to this end
the Borrower hereby appoints the Agent, its officers, employees and
agents, as its irrevocable, true and lawful attorneys-in-fact with all
necessary power and authority to (i)take possession immediately, with
or without notice, demand, or legal process, of any of or all of the
Collateral wherever found, and for such purposes, enter upon any
premises upon which the Collateral may be found and remove the
Collateral therefrom, (ii)require the Borrower to assemble the
Collateral and deliver it to the Agent or to any place designated by
the Agent at the Borrower's expense, (iii)receive, open and dispose of
all mail addressed to the Borrower and notify postal authorities to
change the address for delivery thereof to such address as the Agent
may designate, (iv)subject to the written terms and conditions of the
agreements between Borrower's Subsidiaries and its customers, demand
payment of the Receivables, (v)enforce payment of the Receivables by
legal proceedings or otherwise, (vi)exercise all of the Borrower's
rights and remedies with respect to the collection of the Receivables,
(vii)subject to the written terms and conditions of the agreements
between Borrower's Subsidiaries and its customers, settle, adjust,
compromise, extend or, where permitted by law, renew the Receivables,
(viii)settle, adjust or compromise any legal proceedings brought to
collect the Receivables, (ix)to the extent permitted by applicable
Law, sell or assign the Receivables upon such terms, for such amounts
and at such time or times as the Agent deems advisable, (x)discharge
and release the Receivables, (xi)take control, in any manner, of any
item of payment or proceeds from any account debtor, (xii)prepare,
file and sign the Borrower's name on any Proof of Claim in Bankruptcy
or similar document against any account debtor, (xiii)prepare, file
and sign the Borrower's name on any notice of Lien, assignment or
satisfaction of Lien or similar document in connection with the
Receivables, (xiv)do all acts and things necessary, in the Agent's
sole discretion, to fulfill the Borrower's obligations under the Loan
Documents, (xv)endorse the name of the Borrower upon any check,
Chattel Paper, Document, Instrument, invoice, freight xxxx, xxxx of
lading or similar document or agreement relating to the Receivables or
Inventory; (xvi)use the Borrower's stationery and sign the Borrower's
name to verifications of the Receivables and notices thereof to
account debtors; (xvii)access and use the information recorded on or
contained in any data processing equipment or computer hardware or
software relating to the Receivables, Inventory, or other
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Collateral or proceeds thereof to which the Borrower has access,
(xviii)demand, xxx for, collect, compromise and give acquittances for
any and all Collateral, (xix)prosecute, defend or compromise any
action, claim or proceeding with respect to any of the Collateral, and
(xx)take such other action as the Agent may deem appropriate,
including extending or modifying the terms of payment of the
Borrower's debtors. This power of attorney, being coupled with an
interest, shall be irrevocable for the life of this Agreement. To the
extent permitted by Law, the Borrower hereby waives all claims of
damages due to or arising from or connected with any of the rights or
remedies exercised by the Agent pursuant to this Agreement, except
claims for physical damage to the Collateral arising from gross
negligence or willful misconduct by the Agent.
9.2 The Agent shall have the right to lease, sell or otherwise dispose of
all or any of the Collateral at public or private sale or sales for
cash, credit or any combination thereof, with such notice as may be
required by Law (it being agreed by the Borrower that, in the absence
of any contrary requirement of Law, ten (10)days' prior notice of a
public or private sale of Collateral shall be deemed reasonable
notice), in lots or in bulk, for cash or on credit, all as the Agent,
in its sole discretion, may deem advisable. Such sales may be
adjourned from time to time with or without notice. The Agent shall
have the right to conduct such sales on the Borrower's premises or
elsewhere and shall have the right to use the Borrower's premises
without charge for such sales for such time or times as the Agent may
see fit. The Agent may purchase all or any part of the Collateral at
public or, if permitted by Law, private sale and, in lieu of actual
payment of such purchase price, may set off the amount of such price
against the Debt.
10. The security interest in the Borrower's Collateral granted to and created
in favor of the Agent, for the benefit of the Banks, by this Agreement
shall be for the benefit of the Banks. Each of the rights, privileges, and
remedies provided to the Agent hereunder or otherwise by Law with respect
to the Borrower's Collateral shall be exercised by the Agent only for the
benefit of the Banks, and any of the Borrower's Collateral or proceeds
thereof held or realized upon at any time by any of the Banks shall be
applied as set forth in Section 10.13 of the Credit Agreement. The Borrower
shall remain liable to the Banks for and shall pay to the Agent, for the
benefit of the Banks, any deficiency which may remain after such sale or
collection.
11. If the Agent repossesses or seeks to repossess any of the Collateral
pursuant to the terms hereof because of the occurrence of an Event of
Default, then to the extent it is commercially reasonable for the Agent to
store any Collateral on any of the Borrower's premises, the Borrower hereby
agrees to lease to the Agent on a month-to-month tenancy for a period not
to exceed one hundred twenty (120)days at the Agent's election, at a rental
of One Dollar ($1.00)per month, the premises on which the Collateral is
located, provided it is located on premises owned or leased by the
Borrower.
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12. Upon indefeasible payment in full of the Debt and termination of the Credit
Agreement, this Agreement shall terminate and be of no further force and
effect, and the Agent shall thereupon promptly return to the Borrower such
of the Collateral and such other documents delivered by the Borrower
hereunder as may then be in the Agent's possession. Until such time,
however, this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
13. No failure or delay on the part of any of the Banks in exercising any
right, remedy, power or privilege hereunder shall operate as a waiver
thereof or of any other right, remedy, power or privilege of the Banks
hereunder; nor shall any single or partial exercise of any such right,
remedy, power or privilege preclude any other or further exercise thereof
or the exercise of any other right, remedy, power or privilege. No waiver
of a single Event of Default shall be deemed a waiver of a subsequent Event
of Default. All waivers under this Agreement must be in writing. The rights
and remedies of the Agent under this Agreement are cumulative and in
addition to any rights or remedies which they may otherwise have, and the
Agent may enforce any one or more remedies hereunder successively or
concurrently at their option.
14. All notices, statements, requests and demands given to or made upon either
party hereto in accordance with the provisions of this Agreement shall be
given or made as provided in Section 11.6 of the Credit Agreement.
15. The Borrower agrees that as of the date hereof, all information contained
on the Security Interest Data Schedule attached hereto as Schedule A is
accurate and complete and contains no omission or misrepresentation. The
Borrower shall promptly notify the Agent of any changes in the information
set forth thereon.
16. The Borrower acknowledges that the provisions hereof giving the Agent
rights of access to books, records and information concerning the
Collateral and the Borrower's operations and providing the Agent access to
the Borrower's premises are intended to afford the Agent with immediate
access to current information concerning the Borrower and its activities,
including without limitation, the value, nature and location of the
Collateral so that the Agent can, among other things, make an appropriate
determination after the occurrence of an Event of Default, whether and when
to exercise their other remedies hereunder and at Law, including without
limitation, instituting a replevin action should the Borrower refuse to
turn over any Collateral to the Agent. The Borrower further acknowledges
that should the Borrower at any time fail to promptly provide such
information and access to the Agent, the Borrower acknowledges that the
Agent would have no adequate remedy at Law to promptly obtain the same. The
Borrower agrees that the provisions hereof may be specifically enforced by
the Agent and waives any claim or defense in any such action or proceeding
that the Agent has an adequate remedy at Law.
17. This Agreement shall be binding upon and inure to the benefit of the Agent,
the Banks and their respective successors and assigns, and the Borrower and
its successors and
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assigns, except that the Borrower may not assign or transfer the Borrower's
obligations hereunder or any interest herein.
18. This Agreement shall be deemed to be a contract under the laws of the State
of Ohio and for all purposes shall be governed by and construed in
accordance with the laws of said State excluding its rules relating to
conflicts of law.
19. Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall not invalidate the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other
jurisdiction.
20. This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed will be deemed to be an original and all of which taken together
will constitute one and the same agreement. Any party so executing this
Agreement by facsimile transmission shall promptly deliver a manually
executed counterpart, provided that any failure to do so shall not affect
the validity of the counterpart executed by facsimile transmission.
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed and delivered this Agreement as of the day and year
first above set forth.
XXXXXXXXX FOODS VENTURE, L. P.
By: G/W Foods, Inc., a Texas corporation,
its general partner,
By:/s/Xxxxxx X. Xxxxxxxxx
-------------------------
Xxxxxx X. Xxxxxxxxx
President
PNC BANK, NATIONAL ASSOCIATION,
as Agent
By:/s/Xxxxxxx X. Xxxxx
----------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
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SCHEDULE A
TO
SECURITY AGREEMENT
SECURITY INTEREST DATA SUMMARY
1. The chief executive office of Xxxxxxxxx Foods Venture, L. P. (the
"Debtor")is located at 000 X. Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx 00000.
2. The Debtor's true, full and corporate name is Xxxxxxxxx Foods Venture,
L. P. The Debtor uses no trade names or fictitious names except as specified on
the Disclosure Schedule.
3. All of the Debtor's personal property which has not been delivered to
the Agent pursuant to the terms of this Agreement or the Credit Agreement is
now, and will be at all future times, located at the Debtor's chief executive
office as described in Paragraph 1 above, except as specified on the Disclosure
Schedule.
