EXHIBIT 10.29
CREDIT AGREEMENT
THIS AGREEMENT is entered into as of August 5, 1996, by and between
XXXXXX AND XXXXXXXXXX SALES, CO., a California corporation ("Borrower"), and
XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank").
RECITAL
Borrower has requested from Bank the credit accommodations described
below (each, a "Credit" and collectively, the "Credits"), and Bank has agreed
to provide the Credits to Borrower on the terms and conditions contained
herein.
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Bank and Borrower hereby agree as follows:
ARTICLE I
THE CREDITS
SECTION 1.1. LINE OF CREDIT.
(a) Line of Credit. Subject to the terms and conditions of this
Agreement, Bank hereby agrees to make advances to Borrower from time to time
up to and including July 5, 1997, not to exceed at any time the aggregate
principal amount of Six Million Five Hundred Thousand Dollars ($6,500,000.00)
("Line of Credit"), the proceeds of which shall be used for the purposes
described in the subfeatures thereunder, as set forth below. Borrower's
obligation to repay advances under the Line of Credit shall be evidenced by a
promissory note substantially in the form of Exhibit A attached hereto ("Line
of Credit Note"), all terms of which are incorporated herein by this
reference.
(b) Asset-based Line of Credit Subfeature. As a subfeature under the
Line of Credit, Bank hereby agrees to make cash advances to Borrower from time
to time during the term thereof to assist with working capital for Borrower's
fruit and vegetable brokerage business up to an aggregate principal amount of
Six Million Five Hundred Thousand Dollars ($6,500,000.00). Each such advance
under the Asset-based Line of Credit Subfeature shall be deemed an advance
under the Line of Credit and shall be repaid by Borrower in accordance with
the terms and conditions of this Agreement applicable to such advances.
Outstanding borrowings under the Asset-based Line of Credit Subfeature,
to a maximum of the principal amount set forth above, shall not at any time
exceed an aggregate of eighty percent (80%) of the total of Borrower's
eligible accounts receivable less grower payables plus fifty percent (50%) of
the value of Borrower's eligible inventory (exclusive of work in process and
inventory which is obsolete, unsalable or damaged) with inventory defined as
packing materials, processed fruit and produce, and items used in the final
stages of processing, and with value defined as the lower of cost or market
value. All of the foregoing shall be determined by Bank upon receipt and
review of all collateral reports required hereunder and such other documents
and collateral information as Bank may from time to time require. Borrower
acknowledges that said borrowing base was established by Bank with the
understanding that, among other items, the aggregate of all returns, rebates,
discounts, credits and allowances for the immediately preceding three (3)
months at all times shall be less than five percent (5%) of Borrower's gross
sales for said period. If such dilution of Borrower's accounts for the
immediately preceding three (3) months at any time exceeds five percent (5%)
of Borrower's gross sales for said period, or if there at any time exists any
other matters, events, conditions or contingencies which Bank reasonably
believes may affect payment of any portion of Borrower's accounts, Bank, in
its sole discretion, may reduce the foregoing advance rate against eligible
accounts receivable to a percentage appropriate to reflect such additional
dilution and/or establish additional reserves against Borrower's eligible
accounts receivable.
As used herein, "eligible accounts receivable" shall consist solely of
trade accounts created in the ordinary course of Borrower's business, upon
which Borrower's right to receive payment is absolute and not contingent upon
the fulfillment of any condition whatsoever, and in which Bank has a perfected
security interest of first priority, and shall not include:
(i) any account which is past due more than twice Borrower's
standard selling, except with respect to any account for which
Borrower has provided extended payment terms not to exceed one
hundred eighty (180) days, any such account which is more than
thirty (30) days past due;
(ii) that portion of any account for which there exists any
right of setoff, defense or discount (except regular discounts
allowed in the ordinary course of business to promote prompt
payment) or for which any defense or counterclaim has been asserted;
(iii) any account which represents an obligation of any state
or municipal government or of the United States government or any
political subdivision thereof (except accounts which represent
obligations of the United States government and for which Bank's
forms N-138 and N-139 have been duly executed and acknowledged);
(iv) any account which represents an obligation of an account
debtor located in a foreign country other than Mexico or an account
debtor located in the Canadian provinces of Alberta, British
Columbia, Manitoba, Ontario, Saskatchewan or the Yukon Territory so
long as, in Bank's determination, such Canadian jurisdictions
recognize Bank's first priority security interest in and right to
collect such account as a consequence of any security agreements and
UCC filings in favor of Bank, except to the extent any such account,
in Bank's determination, is supported by a letter of credit or
insured under a policy of foreign credit insurance, in each case in
form, substance and issued by a party acceptable to Bank;
(v) any account which arises from the sale or lease to or
performance of services for, or represents an obligation of, an
employee, affiliate, partner, member, parent or subsidiary of
Borrower;
(vi) that portion of any account which represents interim or
progress xxxxxxxx or retention rights on the part of the account
debtor;
(vii) any account which represents an obligation of any
account debtor when twenty percent (20%) or more of Borrower's
accounts from such account debtor are not eligible pursuant to (i)
above;
(viii) that portion of any account from an account debtor
which represents the amount by which Borrower's total accounts from
said account debtor exceeds twenty-five percent (25%) of Borrower's
total accounts;
(ix) any account deemed ineligible by Bank when Bank, in its
sole discretion, deems the creditworthiness or financial condition
of the account debtor, or the industry in which the account debtor
is engaged, to be unsatisfactory.
(c) Grower Line of Credit Subfeature. As a subfeature under the Line
of Credit, Bank hereby agrees to make cash advances to Borrower from time to
time during the term thereof to assist with Borrower's grower financing and
advances up to an aggregate principal amount of Two Million Five Hundred
Thousand Dollars ($2,500,000.00). Each such advance under the Grower Line of
Credit Subfeature shall be deemed an advance under the Line of Credit and
shall be repaid by Borrower in accordance with the terms and conditions of
this Agreement applicable to such advances.
Outstanding borrowings under the Grower Line of Credit Subfeature, to a
maximum of the principal amount set forth above, shall not at any time exceed
an aggregate of fifty percent (50%) of Borrower's eligible growers accounts
receivable. The foregoing shall be determined by Bank upon receipt and review
of all collateral reports required hereunder and such other documents and
collateral information as Bank may from time to time require.
As used herein, "eligible growers accounts receivable" shall consist
solely of trade accounts created in the ordinary course of Borrower's
business, upon which Borrower's right to receive payment is absolute and not
contingent upon the fulfillment of any condition whatsoever, and in which Bank
has a perfected security interest of first priority, and shall not include:
(i) that portion of any account for which there exists any
right of setoff, defense or discount (except regular discounts
allowed in the ordinary course of business to promote prompt
payment) or for which any defense or counterclaim has been asserted;
(ii) any account which arises from the sale or lease to or
performance of services for, or represents an obligation of, an
employee, affiliate, partner, member, parent or subsidiary of
Borrower;
(iii) the amount of Borrower's reserve against growers'
accounts receivable;
(iv) any account deemed ineligible by Bank when Bank, in its
sole discretion, deems the creditworthiness or financial condition
of the account debtor, or the industry in which the account debtor
is engaged, to be unsatisfactory.
(d) Letter of Credit Subfeature. As a subfeature under the Line of
Credit, Bank agrees from time to time during the term thereof to issue standby
letters of credit for the account of Borrower to finance secure sales
commitments for growers (each, a "Letter of Credit" and collectively, "Letters
of Credit"); provided however, that the form and substance of each Letter of
Credit shall be subject to approval by Bank, in its sole discretion; and
provided further, that the aggregate undrawn amount of all outstanding Letters
of Credit shall not at any time exceed One Million Dollars ($1,000,000.00).
Each Letter of Credit shall be issued for a term not to exceed one hundred
fifty (150) days, as designated by Borrower; provided however, that no Letter
of Credit shall have an expiration date subsequent to the maturity date of the
Line of Credit. The undrawn amount of all Letters of Credit shall be reserved
under the Line of Credit and shall not be available for borrowings thereunder.
Each Letter of Credit shall be subject to the additional terms and conditions
of the Letter of Credit Agreement and related documents, if any, required by
Bank in connection with the issuance thereof (each, a "Letter of Credit
Agreement" and collectively, "Letter of Credit Agreements"). Each draft paid
by Bank under a Letter of Credit shall be deemed an advance under the Line of
Credit and shall be repaid by Borrower in accordance with the terms and
conditions of this Agreement applicable to such advances; provided however,
that if advances under the Line of Credit are not available, for any reason,
at the time any draft is paid by Bank, then Borrower shall immediately pay to
Bank the full amount of such draft, together with interest thereon from the
date such amount is paid by Bank to the date such amount is fully repaid by
Borrower, at the rate of interest applicable to advances under the Line of
Credit. In such event Borrower agrees that Bank, in its sole discretion, may
debit any demand deposit account maintained by Borrower with Bank for the
amount of any such draft.
(e) Borrowing and Repayment. Borrower may from time to time during the
term of the Line of Credit borrow, partially or wholly repay its outstanding
borrowings, and reborrow, subject to all of the limitations, terms and
conditions contained herein or in the Line of Credit Note; provided however,
that the total outstanding borrowings under the Line of Credit shall not at
any time exceed the maximum principal amount available thereunder, as set
forth above.
SECTION 1.2. TERM LOAN.
(a) Term Loan. Bank has made a loan to Borrower in the original
principal amount of Two Hundred Fifty Three Thousand Five Hundred Dollars
($253,500.00) ("Term Loan"), on which the outstanding principal balance as of
the date hereof is $202,800.00. Borrower's obligation to repay the Term Loan
is evidenced by a promissory note substantially in the form of Exhibit B
attached hereto ("Term Note"), all terms of which are incorporated herein by
this reference. Subject to the terms and conditions of this Agreement, Bank
hereby confirms that the Term Loan remains in full force and effect. Any
reference in the Term Note to any prior loan agreement between Bank and
Borrower shall be deemed a reference to this Agreement.
(b) Repayment. The principal amount of the Term Loan shall continue to
be repaid in accordance with the provisions of the Term Note.
(c) Prepayment. Borrower may prepay principal on the Term Loan at any
time, in any amount and without penalty. All prepayments of principal shall
be applied on the most remote principal installment or installments then
unpaid.
SECTION 1.3. LOAN LIMIT.
(a) Loan Limit. Subject to the terms and conditions of this Agreement,
Bank hereby agrees to make advances to Borrower from time to time up to and
including July 5, 1997, not to exceed the aggregate principal amount of One
Hundred Fifty Thousand Dollars ($150,000.00) ("Loan Limit"), the proceeds of
which shall be used for the purchasing and financing of equipment. Borrower's
obligation to repay each advance under the Loan Limit shall be evidenced by a
promissory note executed at the time such advance is made, substantially in
the form of Exhibit C attached hereto (each, a "Loan Limit Note" and
collectively, "Loan Limit Notes"), all terms of which are incorporated herein
by this reference.
(b) Limitation on Borrowings. Each request for an advance under the
Loan Limit shall be accompanied by Borrower's written statement as to the use
of the proceeds of such advance and the source of repayment therefor. Each
such advance shall be subject to Bank's prior approval, which shall be at
Bank's sole discretion, of the stated purpose and source of repayment. Each
advance under the Loan Limit shall be available to a maximum of (80%) of the
cost of new equipment, or (75%) of the cost of used equipment.
(c) Borrowing and Repayment. Borrower may from time to time during the
term of the Loan Limit borrow and partially or wholly repay its outstanding
borrowings, and reborrow, subject to all the limitations, terms and conditions
contained herein; provided however, that Borrower shall repay each advance
under the Loan Limit as required herein; and provided further, that the total
outstanding borrowings under the Loan Limit shall not at any time exceed the
maximum principal amount available thereunder, as set forth above. The
principal amount of each advance under the Loan Limit shall be amortized over
a term of less than (60) months and shall be repaid in equal successive
monthly installments, at the times and in the amounts set forth in the Loan
Limit Note executed by Borrower to evidence such advance.
(d) Prepayment. Borrower may prepay principal on any advance under the
Loan Limit at any time, in any amount and without penalty. All prepayments
shall be applied on the most remote principal installment or installments then
unpaid on the advance being prepaid.
SECTION 1.4. INTEREST/FEES.
(a) Interest. The outstanding principal balance of the Line of
Credit, the Term Loan and the Loan Limit shall bear interest at the rate of
interest set forth in the Line of Credit Note, the Term Note and the Loan
Limit Note.
(b) Computation and Payment. Interest shall be computed on the basis
of a 360-day year, actual days elapsed. Interest shall be payable at the
times and place set forth in the Line of Credit Note, the Term Note and the
Loan Limit Note (collectively, the "Notes").
(c) Letter of Credit Fees. Borrower shall pay to Bank (i) fees upon
the issuance of each Letter of Credit equal to one and three-quarters percent
(1.75%) per annum (computed on the basis of a 360-day year, actual days
elapsed) of the face amount thereof, and (ii) fees upon the payment or
negotiation by Bank of each draft under any Letter of Credit and fees upon the
occurrence of any other activity with respect to any Letter of Credit
(including without limitation, the transfer, amendment or cancellation of any
Letter of Credit) determined in accordance with Bank's standard fees and
charges then in effect for such activity.
SECTION 1.5. COLLECTION OF PAYMENTS. Borrower authorizes Bank to
collect all principal, interest and fees due under each Credit by charging
Borrower's demand deposit account number 4160-085460 with Bank, or any other
demand deposit account maintained by Borrower with Bank, for the full amount
thereof. Should there be insufficient funds in any such demand deposit
account to pay all such sums when due, the full amount of such deficiency
shall be immediately due and payable by Borrower.
SECTION 1.6. COLLATERAL. As security for all indebtedness of
Borrower to Bank under the Line of Credit, Borrower grants to Bank security
interests of first priority in all Borrower's accounts receivable and other
rights to payment, general intangibles and inventory.
As security for all indebtedness of Borrower to Bank under the Term Loan,
Borrower grants to Bank a lien of not less than first priority on that certain
real property located at Traver, California, as more fully described on
Exhibit D attached hereto, all terms of which are incorporated herein by this
reference.
As security for all indebtedness of Borrower to Bank under the Loan
Limit, Borrower grants to Bank security interests of first priority in all
Borrower's equipment.
All of the foregoing shall be evidenced by and subject to the terms of
such security agreements, financing statements, deeds of trust and other
documents as Bank shall reasonably require, all in form and substance
satisfactory to Bank. Borrower shall reimburse Bank immediately upon demand
for all costs and expenses incurred by Bank in connection with any of the
foregoing security, including without limitation, filing and recording fees
and costs of appraisals, audits and title insurance.
SECTION 1.7. GUARANTIES. All indebtedness of Borrower to Bank shall
be guaranteed by Xxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxxxxxxx and
Xxxxx Xxxxxx (each, a "Guarantor") in the principal amount of Seven Million
Eight Hundred Twenty-Seven Thousand Dollars ($7,827,000.00) each, as evidenced
by and subject to the terms of guaranties in form and substance satisfactory
to Bank.
SECTION 1.8. SUBORDINATION OF DEBT. All obligations of Borrower to
Xxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxxxxxxx and Xxxxx Xxxxxx in the
minimum aggregate principal amount of $900,000.00 shall be subordinated in
right of repayment to all obligations of Borrower to Bank, as evidenced by and
subject to the terms of subordination agreements in form and substance
satisfactory to Bank.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Borrower makes the following representations and warranties to Bank,
which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the full and final
payment, and satisfaction and discharge, of all obligations of Borrower to
Bank subject to this Agreement.
SECTION 2.1. LEGAL STATUS. Borrower is a corporation, duly
organized and existing and in good standing under the laws of the State of
California, and is qualified or licensed to do business (and is in good
standing as a foreign corporation, if applicable) in all jurisdictions in
which such qualification or licensing is required or in which the failure to
so qualify or to be so licensed could have a material adverse effect on
Borrower.
SECTION 2.2. AUTHORIZATION AND VALIDITY. This Agreement, the Notes,
and each other document, contract and instrument required hereby or at any
time hereafter delivered to Bank in connection herewith (collectively, the
"Loan Documents") have been duly authorized, and upon their execution and
delivery in accordance with the provisions hereof will constitute legal, valid
and binding agreements and obligations of Borrower or the party which executes
the same, enforceable in accordance with their respective terms.
SECTION 2.3. NO VIOLATION. The execution, delivery and performance
by Borrower of each of the Loan Documents do not violate any provision of any
law or regulation, or contravene any provision of the Articles of
Incorporation or By-Laws of Borrower, or result in any breach of or default
under any contract, obligation, indenture or other instrument to which
Borrower is a party or by which Borrower may be bound.
SECTION 2.4. LITIGATION. There are no pending, or to the best of
Borrower's knowledge threatened, actions, claims, investigations, suits or
proceedings by or before any governmental authority, arbitrator, court or
administrative agency which could have a material adverse effect on the
financial condition or operation of Borrower other than those disclosed by
Borrower to Bank in writing prior to the date hereof.
SECTION 2.5. CORRECTNESS OF FINANCIAL STATEMENT. The financial
statement of Borrower dated May 31, 1996, a true copy of which has been
delivered by Borrower to Bank prior to the date hereof, (a) is complete and
correct and presents fairly the financial condition of Borrower, (b) discloses
all liabilities of Borrower that are required to be reflected or reserved
against under generally accepted accounting principles, whether liquidated or
unliquidated, fixed or contingent, and (c) has been prepared in accordance
with generally accepted accounting principles consistently applied. Since the
date of such financial statement there has been no material adverse change in
the financial condition of Borrower, nor has Borrower mortgaged, pledged,
granted a security interest in or otherwise encumbered any of its assets or
properties except in favor of Bank or as otherwise permitted by Bank in
writing.
SECTION 2.6. INCOME TAX RETURNS. Borrower has no knowledge of any
pending assessments or adjustments of its income tax payable with respect to
any year.
SECTION 2.7. NO SUBORDINATION. There is no agreement, indenture,
contract or instrument to which Borrower is a party or by which Borrower may
be bound that requires the subordination in right of payment of any of
Borrower's obligations subject to this Agreement to any other obligation of
Borrower.
SECTION 2.8. PERMITS, FRANCHISES. Borrower possesses, and will
hereafter possess, all permits, franchises and licenses required and rights to
all trademarks, trade names, patents, and fictitious names, if any, necessary
to enable it to conduct the business in which it is now engaged in compliance
with applicable law.
SECTION 2.9. ERISA. Borrower is in compliance in all material
respects with all applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended or recodified from time to time ("ERISA");
Borrower has not violated any provision of any defined employee pension
benefit plan (as defined in ERISA) maintained or contributed to by Borrower
(each, a "Plan"); no Reportable Event as defined in ERISA has occurred and is
continuing with respect to any Plan initiated by Borrower; Borrower has met
its minimum funding requirements under ERISA with respect to each Plan; and
each Plan will be able to fulfill its benefit obligations as they come due in
accordance with the Plan documents and under generally accepted accounting
principles.
SECTION 2.10. OTHER OBLIGATIONS. Borrower is not in default on any
obligation for borrowed money, any purchase money obligation or any other
material lease, commitment, contract, instrument or obligation.
SECTION 2.11. ENVIRONMENTAL MATTERS. Except as disclosed by Borrower
to Bank in writing prior to the date hereof, Borrower is in compliance in all
material respects with all applicable Federal or state environmental,
hazardous waste, health and safety statutes, and any rules or regulations
adopted pursuant thereto, which govern or affect any of Borrower's operations
and/or properties, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, the Superfund
Amendments and Reauthorization Act of 1986, the Federal Resource Conservation
and Recovery Act of 1976, the Federal Toxic Substances Control Act and the
California Health and Safety Code, as any of the same may be amended, modified
or supplemented from time to time. None of the operations of Borrower is the
subject of any Federal or state investigation evaluating whether any remedial
action involving a material expenditure is needed to respond to a release of
any toxic or hazardous waste or substance into the environment. Borrower has
no material contingent liability in connection with any release of any toxic
or hazardous waste or substance into the environment.
SECTION 2.12. REAL PROPERTY COLLATERAL. Except as disclosed by
Borrower to Bank in writing prior to the date hereof, with respect to any real
property collateral required hereby:
(a) All taxes, governmental assessments, insurance premiums,
and water, sewer and municipal charges, and rents (if any) which
previously became due and owing in respect thereof have been paid as
of the date hereof.
(b) There are no mechanics' or similar liens or claims which
have been filed for work, labor or material (and no rights are
outstanding that under law could give rise to any such lien) which
affect all or any interest in any such real property and which are
or may be prior to or equal to the lien thereon in favor of Bank.
(c) None of the improvements which were included for purpose
of determining the appraised value of any such real property lies
outside of the boundaries and/or building restriction lines thereof,
and no improvements on adjoining properties materially encroach upon
any such real property.
(d) There is no pending, or to the best of Borrower's
knowledge threatened, proceeding for the total or partial
condemnation of all or any portion of any such real property, and
all such real property is in good repair and free and clear of any
damage that would materially and adversely affect the value thereof
as security and/or the intended use thereof.
ARTICLE III
CONDITIONS
SECTION 3.1. CONDITIONS OF INITIAL EXTENSION OF CREDIT. The
obligation of Bank to grant any of the Credits is subject to the fulfillment
to Bank's satisfaction of all of the following conditions:
(a) Approval of Bank Counsel. All legal matters incidental
to the granting of each of the Credits shall be satisfactory to
Bank's counsel.
(b) Documentation. Bank shall have received, in form and
substance satisfactory to Bank, each of the following, duly
executed:
(i) This Agreement and the Notes.
(ii) Articles of Incorporation.
(iii) Corporate Borrowing Resolution.
(iv) Articles of Incumbency.
(v) Continuing Guaranties as listed in
Section 1.7.
(vi) Subordination Agreements as listed in
Section 1.8.
(vii) Security Agreement: Equipment and
Fixtures.
(viii) Security Agreement: Crops.
(ix) Continuing Security Agreement: Rights to
Payment and Inventory.
(x) UCC-1 Financing Statements.
(xi) Deed of Trust executed by Borrower.
(xii) Loan Disbursement Order.
(xiii) Such other documents as Bank may require
under any other Section of this Agreement.
(c) Financial Condition. There shall have been no
material adverse change, as determined by Bank, in the financial
condition or business of Borrower or any guarantor hereunder, nor
any material decline, as determined by Bank, in the market value
of any collateral required hereunder or a substantial or material
portion of the assets of Borrower or any such guarantor.
(d) Insurance. Borrower shall have delivered to Bank
evidence of insurance coverage on all Borrower's property, in
form, substance, amounts, covering risks and issued by companies
satisfactory to Bank, and where required by Bank, with loss
payable endorsements in favor of Bank, including without
limitation, policies of fire and extended coverage insurance
covering all real property collateral required hereby, with
replacement cost and mortgagee loss payable endorsements, and such
policies of insurance against specific hazards affecting any such
real property as may be required by governmental regulation or
Bank.
(e) Appraisals. Bank shall have obtained, at Borrower's
cost, an appraisal of all real property collateral required
hereby, and all improvements thereon, issued by an appraiser
acceptable to Bank and in form, substance and reflecting values
satisfactory to Bank, in its discretion.
(f) Title Insurance. Bank shall have received an ALTA
Policy of Title Insurance, with such endorsements as Bank may
require, including without limitation, CLTA endorsements, issued
by a company and in form and substance satisfactory to Bank, in
such amount as Bank shall require, insuring Bank's lien on the
real property collateral required hereby to be of first priority,
subject only to such exceptions as Bank shall approve in its
discretion, with all costs thereof to be paid by Borrower.
(g) Tax Service Contract. Borrower shall have procured
and delivered to Bank, at Borrower's cost, such tax service
contract as Bank shall require for any real property collateral
required hereby, to remain in effect as long as such real property
secures any obligations of Borrower to Bank as required hereby.
SECTION 3.2. CONDITIONS OF EACH EXTENSION OF CREDIT. The
obligation of Bank to make each extension of credit requested by Borrower
hereunder shall be subject to the fulfillment to Bank's satisfaction of each
of the following conditions:
(a) Compliance. The representations and warranties
contained herein and in each of the other Loan Documents shall be
true on and as of the date of the signing of this Agreement and on
the date of each extension of credit by Bank pursuant hereto, with
the same effect as though such representations and warranties had
been made on and as of each such date, and on each such date, no
Event of Default as defined herein, and no condition, event or act
which with the giving of notice or the passage of time or both
would constitute such an Event of Default, shall have occurred and
be continuing or shall exist.
(b) Documentation. Bank shall have received all
additional documents which may be required in connection with such
extension of credit.
ARTICLE IV
AFFIRMATIVE COVENANTS
Borrower covenants that so long as Bank remains committed to extend
credit to Borrower pursuant hereto, or any liabilities (whether direct or
contingent, liquidated or unliquidated) of Borrower to Bank under any of the
Loan Documents remain outstanding, and until payment in full of all
obligations of Borrower subject hereto, Borrower shall, unless Bank otherwise
consents in writing:
SECTION 4.1. PUNCTUAL PAYMENTS. Punctually pay all principal,
interest, fees or other liabilities due under any of the Loan Documents at the
times and place and in the manner specified therein, and immediately upon
demand by Bank, the amount by which the outstanding principal balance of any
of the Credits at any time exceeds any limitation on borrowings applicable
thereto.
SECTION 4.2. ACCOUNTING RECORDS. Maintain adequate books and
records in accordance with generally accepted accounting principles
consistently applied, and permit any representative of Bank, at any reasonable
time, to inspect, audit and examine such books and records, to make copies of
the same, and to inspect the properties of Borrower.
SECTION 4.3. FINANCIAL STATEMENTS. Provide to Bank all of the
following, in form and detail satisfactory to Bank:
(a) not later than 90 days after and as of the end of each
fiscal year, an audited financial statement of Borrower, prepared
by a certified public accountant acceptable to Bank, to include a
balance sheet, income statement, statement of cash flow and all
footnotes;
(b) not later than 30 days after and as of the end of each
fiscal quarter, a financial statement of Borrower, prepared by
Borrower, to include balance sheet and income statement;
(c) not later than 15 days after and as of the end of each
month, an aged listing of accounts receivable and accounts
payable, and a reconciliation of accounts, and not later than 30
days after and as of the end of each February, a list of the names
and addresses of all Borrower's account debtors;
(d) not later than 15 days after and as of the end of each
month, a grower accounts receivable borrowing base certificate in
the form of Exhibit 1 attached hereto, and a listing of grower
accounts receivable and accounts payable satisfactory to Bank;
(e) not later than May 15th of each year, a financial
statement of each guarantor hereunder, prepared by each such
guarantor, to include a balance sheet, and copies of each such
guarantor's filed Federal income tax returns for such year;
(f) from time to time such other information as Bank may
reasonably request.
SECTION 4.4. COMPLIANCE. Preserve and maintain all licenses,
permits, governmental approvals, rights, privileges and franchises necessary
for the conduct of its business; and comply with the provisions of all
documents pursuant to which Borrower is organized and/or which govern
Borrower's continued existence and with the requirements of all laws, rules,
regulations and orders of any governmental authority applicable to Borrower
and/or its business.
SECTION 4.5. INSURANCE. Maintain and keep in force insurance of
the types and in amounts customarily carried in lines of business similar to
that of Borrower, including but not limited to fire, extended coverage, public
liability, flood, property damage and workers' compensation, with all such
insurance carried with companies and in amounts satisfactory to Bank, and
deliver to Bank from time to time at Bank's request schedules setting forth
all insurance then in effect.
SECTION 4.6. FACILITIES. Keep all properties useful or necessary
to Borrower's business in good repair and condition, and from time to time
make necessary repairs, renewals and replacements thereto so that such
properties shall be fully and efficiently preserved and maintained.
SECTION 4.7. TAXES AND OTHER LIABILITIES. Pay and discharge when
due any and all indebtedness, obligations, assessments and taxes, both real or
personal, including without limitation Federal and state income taxes and
state and local property taxes and assessments, except such (a) as Borrower
may in good faith contest or as to which a bona fide dispute may arise, and
(b) for which Borrower has made provision, to Bank's satisfaction, for
eventual payment thereof in the event Borrower is obligated to make such
payment.
SECTION 4.8. LITIGATION. Promptly give notice in writing to Bank
of any litigation pending or threatened against Borrower with a claim in
excess of $250,000.00.
SECTION 4.9. FINANCIAL CONDITION. Maintain Borrower's financial
condition as follows using generally accepted accounting principles
consistently applied and used consistently with prior practices (except to the
extent modified by the definitions herein):
(a) Working Capital not at any time less than
$1,700,000.00, with "Working Capital" defined as total current
assets minus total current liabilities.
(b) Tangible Net Worth not at any time less than
$2,250,000.00 with "Tangible Net Worth" defined as the aggregate
of total stockholders' equity plus subordinated debt less any
intangible assets.
SECTION 4.10. NOTICE TO BANK. Promptly (but in no event more than
five (5) days after the occurrence of each such event or matter) give written
notice to Bank in reasonable detail of: (a) the occurrence of any Event of
Default, or any condition, event or act which with the giving of notice or the
passage of time or both would constitute an Event of Default; (b) any change
in the name or the organizational structure of Borrower; (c) the occurrence
and nature of any Reportable Event or Prohibited Transaction, each as defined
in ERISA, or any funding deficiency with respect to any Plan; or (d) any
termination or cancellation of any insurance policy which Borrower is required
to maintain, or any uninsured or partially uninsured loss through liability or
property damage, or through fire, theft or any other cause affecting
Borrower's property.
ARTICLE V
NEGATIVE COVENANTS
Borrower further covenants that so long as Bank remains committed to
extend credit to Borrower pursuant hereto, or any liabilities (whether direct
or contingent, liquidated or unliquidated) of Borrower to Bank under any of
the Loan Documents remain outstanding, and until payment in full of all
obligations of Borrower subject hereto, Borrower will not without Bank's prior
written consent:
SECTION 5.1. USE OF FUNDS. Use any of the proceeds of any of the
Credits except for the purposes stated in Article I hereof.
SECTION 5.2. CAPITAL EXPENDITURES. Make any additional investment
in fixed assets in any fiscal year in excess of an aggregate of $150,000.00.
SECTION 5.3. OTHER INDEBTEDNESS. Create, incur, assume or permit
to exist any indebtedness or liabilities resulting from borrowings, loans or
advances, whether secured or unsecured, matured or unmatured, liquidated or
unliquidated, joint or several, except (a) the liabilities of Borrower to
Bank, and (b) any other liabilities of Borrower existing as of, and disclosed
to Bank prior to, the date hereof.
SECTION 5.4. MERGER, CONSOLIDATION, TRANSFER OF ASSETS. Merge into
or consolidate with any other entity; make any substantial change in the
nature of Borrower's business as conducted as of the date hereof; acquire all
or substantially all of the assets of any other entity; nor sell, lease,
transfer or otherwise dispose of all or a substantial or material portion of
Borrower's assets except in the ordinary course of its business.
SECTION 5.5. GUARANTIES. Guarantee or become liable in any way as
surety, endorser (other than as endorser of negotiable instruments for deposit
or collection in the ordinary course of business), accommodation endorser or
otherwise for, nor pledge or hypothecate any assets of Borrower as security
for, any liabilities or obligations of any other person or entity, except any
of the foregoing in favor of Bank.
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.1. The occurrence of any of the following shall
constitute an "Event of Default" under this Agreement:
(a) Borrower shall fail to pay when due any principal,
interest, fees or other amounts payable under any of the Loan
Documents.
(b) Any financial statement or certificate furnished to
Bank in connection with, or any representation or warranty made by
Borrower or any other party under this Agreement or any other Loan
Document shall prove to be incorrect, false or misleading in any
material respect when furnished or made.
(c) Any default in the performance of or compliance with
any obligation, agreement or other provision contained herein or
in any other Loan Document (other than those referred to in
subsections (a) and (b) above), and with respect to any such
default which by its nature can be cured, such default shall
continue for a period of twenty (20) days from its occurrence.
(d) Any default in the payment or performance of any
obligation, or any defined event of default, under the terms of
any contract or instrument (other than any of the Loan Documents)
pursuant to which Borrower or any guarantor hereunder has incurred
any debt or other liability to any person or entity, including
Bank.
(e) The filing of a notice of judgment lien against
Borrower or any guarantor hereunder; or the recording of any
abstract of judgment against Borrower or any guarantor hereunder
in any county in which Borrower or such guarantor has an interest
in real property; or the service of a notice of levy and/or of a
writ of attachment or execution, or other like process, against
the assets of Borrower or any guarantor hereunder; or the entry of
a judgment against Borrower or any guarantor hereunder.
(f) Borrower or any guarantor hereunder shall become
insolvent, or shall suffer or consent to or apply for the
appointment of a receiver, trustee, custodian or liquidator of
itself or any of its property, or shall generally fail to pay its
debts as they become due, or shall make a general assignment for
the benefit of creditors; Borrower or any guarantor hereunder
shall file a voluntary petition in bankruptcy, or seeking
reorganization, in order to effect a plan or other arrangement
with creditors or any other relief under the Bankruptcy Reform
Act, Title 11 of the United States Code, as amended or recodified
from time to time ("Bankruptcy Code"), or under any state or
Federal law granting relief to debtors, whether now or hereafter
in effect; or any involuntary petition or proceeding pursuant to
the Bankruptcy Code or any other applicable state or Federal law
relating to bankruptcy, reorganization or other relief for debtors
is filed or commenced against Borrower or any guarantor hereunder,
or Borrower or any such guarantor shall file an answer admitting
the jurisdiction of the court and the material allegations of any
involuntary petition; or Borrower or such guarantor shall be
adjudicated a bankrupt, or an order for relief shall be entered
against Borrower or any Guarantor by any court of competent
jurisdiction under the Bankruptcy Code or any other applicable
state or Federal law relating to bankruptcy, reorganization or
other relief for debtors.
(g) There shall exist or occur any event or condition
which Bank in good faith believes impairs, or is substantially
likely to impair, the prospect of payment or performance by
Borrower of its obligations under any of the Loan Documents.
(h) The death or incapacity of Borrower or any guarantor
hereunder. The dissolution or liquidation of Borrower; or
Borrower, or any of its directors, stockholders or members, shall
take action seeking to effect the dissolution or liquidation of
Borrower.
(i) Any change in ownership during the term of this
Agreement of an aggregate of twenty-five percent (25%) or more of
the common stock of Borrower.
(j) The sale, transfer, hypothecation, assignment or
encumbrance, whether voluntary, involuntary or by operation of
law, without Bank's prior written consent, of all or any part of
or interest in any real property collateral required hereby.
SECTION 6.2. REMEDIES. Upon the occurrence of any Event of
Default: (a) all indebtedness of Borrower under each of the Loan Documents,
any term thereof to the contrary notwithstanding, shall at Bank's option and
without notice become immediately due and payable without presentment, demand,
protest or notice of dishonor, all of which are hereby expressly waived by
Borrower; (b) the obligation, if any, of Bank to extend any further credit
under any of the Loan Documents shall immediately cease and terminate; and
(c) Bank shall have all rights, powers and remedies available under each of
the Loan Documents, or accorded by law, including without limitation the right
to resort to any or all security for any of the Credits and to exercise any or
all of the rights of a beneficiary or secured party pursuant to applicable
law. All rights, powers and remedies of Bank may be exercised at any time by
Bank and from time to time after the occurrence of an Event of Default, are
cumulative and not exclusive, and shall be in addition to any other rights,
powers or remedies provided by law or equity.
ARTICLE VII
MISCELLANEOUS
SECTION 7.1. NO WAIVER. No delay, failure or discontinuance of
Bank in exercising any right, power or remedy under any of the Loan Documents
shall affect or operate as a waiver of such right, power or remedy; nor shall
any single or partial exercise of any such right, power or remedy preclude,
waive or otherwise affect any other or further exercise thereof or the
exercise of any other right, power or remedy. Any waiver, permit, consent or
approval of any kind by Bank of any breach of or default under any of the Loan
Documents must be in writing and shall be effective only to the extent set
forth in such writing.
SECTION 7.2. NOTICES. All notices, requests and demands which any
party is required or may desire to give to any other party under any provision
of this Agreement must be in writing delivered to each party at the following
address:
BORROWER: XXXXXX AND XXXXXXXXXX SALES, CO.
0000 Xxxxxxx Xxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
BANK: XXXXX FARGO BANK, NATIONAL ASSOCIATION
Bakersfield Regional Commercial Banking Xxxxxx
0000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxxx 00000
or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit
in the U.S. mail, first class and postage prepaid; and (c) if sent by
telecopy, upon receipt.
SECTION 7.3. COSTS, EXPENSES AND ATTORNEYS' FEES. Borrower shall
pay to Bank 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 Bank's in-house counsel),
incurred by Bank in connection with (a) the negotiation and preparation of
this Agreement and the other Loan Documents, Bank's continued administration
hereof and thereof, and the preparation of any amendments and waivers hereto
and thereto, (b) the enforcement of Bank's rights and/or the collection of any
amounts which become due to Bank under any of the Loan Documents, and (c) the
prosecution or defense of any action in any way related to any of the Loan
Documents, including without limitation, any action for declaratory relief,
and including any of the foregoing incurred in connection with any bankruptcy
proceeding relating to Borrower.
SECTION 7.4. SUCCESSORS, ASSIGNMENT. This Agreement shall be
binding upon and inure to the benefit of the heirs, executors, administrators,
legal representatives, successors and assigns of the parties; provided
however, that Borrower may not assign or transfer its interest hereunder
without Bank's prior written consent. Bank reserves the right to sell,
assign, transfer, negotiate or grant participations in all or any part of, or
any interest in, Bank's rights and benefits under each of the Loan Documents.
In connection therewith, Bank may disclose all documents and information which
Bank now has or may hereafter acquire relating to any of the Credits, Borrower
or its business, any guarantor hereunder or the business of such guarantor, or
any collateral required hereunder.
SECTION 7.5. ENTIRE AGREEMENT; AMENDMENT. This Agreement and the
other Loan Documents constitute the entire agreement between Borrower and Bank
with respect to the Credits and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only by a written
instrument executed by each party hereto.
SECTION 7.6. NO THIRD PARTY BENEFICIARIES. This Agreement is made
and entered into for the sole protection and benefit of the parties hereto and
their respective permitted successors and assigns, and no other person or
entity shall be a third party beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or any other of
the Loan Documents to which it is not a party.
SECTION 7.7. TIME. Time is of the essence of each and every
provision of this Agreement and each other of the Loan Documents.
SECTION 7.8. SEVERABILITY OF PROVISIONS. If any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or any
remaining provisions of this Agreement.
SECTION 7.9. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.
SECTION 7.10. ARBITRATION.
(a) Arbitration. Upon the demand of any party, any Dispute shall be
resolved by binding arbitration (except as set forth in (e) below) in
accordance with the terms of this Agreement. A "Dispute" shall mean any
action, dispute, claim or controversy of any kind, whether in contract or
tort, statutory or common law, legal or equitable, now existing or hereafter
arising under or in connection with, or in any way pertaining to, any of the
Loan Documents, or any past, present or future extensions of credit and other
activities, transactions or obligations of any kind related directly or
indirectly to any of the Loan Documents, including without limitation, any of
the foregoing arising in connection with the exercise of any self-help,
ancillary or other remedies pursuant to any of the Loan Documents. Any party
may by summary proceedings bring an action in court to compel arbitration of a
Dispute. Any party who fails or refuses to submit to arbitration following a
lawful demand by any other party shall bear all costs and expenses incurred by
such other party in compelling arbitration of any Dispute.
(b) Governing Rules. Arbitration proceedings shall be administered by
the American Arbitration Association ("AAA") or such other administrator as
the parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States
Code), notwithstanding any conflicting choice of law provision in any of the
Loan Documents. The arbitration shall be conducted at a location in
California selected by the AAA or other administrator. If there is any
inconsistency between the terms hereof and any such rules, the terms and
procedures set forth herein shall control. All statutes of limitation
applicable to any Dispute shall apply to any arbitration proceeding. All
discovery activities shall be expressly limited to matters directly relevant
to the Dispute being arbitrated. Judgment upon any award rendered in an
arbitration may be entered in any court having jurisdiction; provided however,
that nothing contained herein shall be deemed to be a waiver by any party that
is a bank of the protections afforded to it under 12 U.S.C. Section 91 or any
similar applicable state law.
(c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary
remedies, including without limitation injunctive relief, sequestration,
attachment, garnishment or the appointment of a receiver, from a court of
competent jurisdiction before, after or during the pendency of any arbitration
or other proceeding. The exercise of any such remedy shall not waive the
right of any party to compel arbitration or reference hereunder.
(d) Arbitrator Qualifications and Powers; Awards. Arbitrators must be
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to
make effective any award, and (iii) shall have the power to award recovery of
all costs and fees, to impose sanctions and to take such other actions as they
deem necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the California Rules of Civil Procedure or other
applicable law. Any Dispute in which the amount in controversy is $5,000,000
or less shall be decided by a single arbitrator who shall not render an award
of greater than $5,000,000 (including damages, costs, fees and expenses). By
submission to a single arbitrator, each party expressly waives any right or
claim to recover more than $5,000,000. Any Dispute in which the amount in
controversy exceeds $5,000,000 shall be decided by majority vote of a panel of
three arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations.
(e) Judicial Review. Notwithstanding anything herein to the contrary,
in any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations (A) the arbitrators shall not have
the power to make any award which is not supported by substantial evidence or
which is based on legal error, (B) an award shall not be binding upon the
parties unless the findings of fact are supported by substantial evidence and
the conclusions of law are not erroneous under the substantive law of the
state of California, and (C) the parties shall have in addition to the grounds
referred to in the Federal Arbitration Act for vacating, modifying or
correcting an award the right to judicial review of (1) whether the findings
of fact rendered by the arbitrators are supported by substantial evidence, and
(2) whether the conclusions of law are erroneous under the substantive law of
the state of California. Judgment confirming an award in such a proceeding
may be entered only if a court determines the award is supported by
substantial evidence and not based on legal error under the substantive law of
the state of California.
(f) Real Property Collateral; Judicial Reference. Notwithstanding
anything herein to the contrary, no Dispute shall be submitted to arbitration
if the Dispute concerns indebtedness secured directly or indirectly, in whole
or in part, by any real property unless (i) the holder of the mortgage, lien
or security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or
benefits that might accrue to them by virtue of the single action rule statute
of California, thereby agreeing that all indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
indebtedness and obligations, shall remain fully valid and enforceable. If
any such Dispute is not submitted to arbitration, the Dispute shall be
referred to a referee in accordance with California Code of Civil Procedure
Section 638 et seq., and this general reference agreement is intended to be
specifically enforceable in accordance with said Section 638. A referee with
the qualifications required herein for arbitrators shall be selected pursuant
to the AAA's selection procedures. Judgment upon the decision rendered by a
referee shall be entered in the court in which such proceeding was commenced
in accordance with California Code of Civil Procedure Sections 644 and 645.
(g) Miscellaneous. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose
the existence, content or results thereof, except for disclosures of
information by a party required in the ordinary course of its business, by
applicable law or regulation, or to the extent necessary to exercise any
judicial review rights set forth herein. If more than one agreement for
arbitration by or between the parties potentially applies to a Dispute, the
arbitration provision most directly related to the Loan Documents or the
subject matter of the Dispute shall control. This arbitration provision shall
survive termination, amendment or expiration of any of the Loan Documents or
any relationship between the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.
XXXXX FARGO BANK,
XXXXXX AND XXXXXXXXXX SALES, CO. NATIONAL ASSOCIATION
By: Xxxx X. Xxxxxx By: Xxxxxx X. Del Papa
Title: Secretary Title: Vice President
EXHIBIT A
REVOLVING LINE OF CREDIT NOTE
$6,500,000.00 Bakersfield, California
August 5, 1996
FOR VALUE RECEIVED, the undersigned XXXXXX AND XXXXXXXXXX SALES, CO.
("Borrower") promises to pay to the order of XXXXX FARGO BANK, NATIONAL
ASSOCIATION ("Bank") at its office at Bakersfield RCBO, 5401 California
Avenue, 2nd Floor, Bakersfield, California, 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 Six Million Five
Hundred Thousand Dollars ($6,500,000.00), 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 (computed on the basis of a 360-day
year, actual days elapsed) either (i) at a fluctuating rate per annum
one-half percent (.50%) above the Prime Rate in effect from time to time, or
(ii) at a fixed rate per annum determined by Bank to be two and
three-quarters percent (2.75%) above Bank's LIBOR in effect on the first day
of the applicable Fixed Rate Term. When interest is determined in relation to
the Prime Rate, each change in the rate of interest hereunder shall become
effective on the date each Prime Rate change is announced within Bank. With
respect to each LIBOR option selected hereunder, Bank is hereby authorized to
note the date, principal amount, interest rate and Fixed Rate Term applicable
thereto and any payments made thereon on Bank's books and records (either
manually or by electronic entry) and/or on any schedule attached to this Note,
which notations shall be prima facie evidence of the accuracy of the
information noted.
A. DEFINITIONS:
As used herein, the following terms shall have the meanings set forth
after each:
1. "Business Day" means any day except a Saturday, Sunday or any
other day designated as a holiday under Federal or California statute or
regulation.
2. "Fixed Rate Term" means a period commencing on a Business Day and
continuing for one (1) month, as designated by Borrower, during which all or a
portion of the outstanding principal balance of this Note bears interest
determined in relation to Bank's LIBOR; provided however, that no Fixed Rate
Term may be selected for a principal amount less than Two Hundred Fifty
Thousand Dollars ($250,000.00); and provided further, that no Fixed Rate Term
shall extend beyond the scheduled maturity date hereof. If any Fixed Rate
Term would end on a day which is not a Business Day, then such Fixed Rate Term
shall be extended to the next succeeding Business Day.
3. "LIBOR" means the rate per annum (rounded upward, if necessary, to
the nearest whole 1/8 of 1%) and determined pursuant to the following formula:
LIBOR = Base LIBOR
-------------------------------
100% - LIBOR Reserve percentage
(a) "Base LIBOR" means the rate per annum for United States dollar
deposits quoted by Bank as the Inter-Bank Market Offered Rate, with the
understanding that such rate is quoted by Bank for the purpose of calculating
effective rates of interest for loans making reference thereto, on the first
day of a Fixed Rate Term for delivery of funds on said date for a period of
time approximately equal to the number of days in such Fixed Rate Term and in
an amount approximately equal to the principal amount to which such Fixed Rate
Term applies. Borrower understands and agrees that Bank may base its
quotation of the Inter-Bank Market Offered Rate upon such offers or other
market indicators of the Inter-Bank Market as Bank in its discretion deems
appropriate including, but not limited to, the rate offered for U.S. dollar
deposits on the London Inter-Bank Market.
(b) "LIBOR Reserve percentage" means the reserve percentage prescribed
by the Board of Governors of the Federal Reserve System (or any successor) for
"Eurocurrency Liabilities" (as defined in Regulation D of the Federal Reserve
Board, as amended), adjusted by Bank for expected changes in such
reserve percentage during the applicable Fixed Rate Term.
4. "Prime Rate" means at any time the rate of interest most recently
announced within Bank at its principal office in San Francisco as its Prime
Rate, with the understanding that the Prime Rate is one of Bank's base rates
and serves as the basis upon which effective rates of interest are calculated
for those loans making reference thereto, and is evidenced by the recording
thereof after its announcement in such internal publication or publications as
Bank may designate.
B. INTEREST:
1. Payment of Interest. Interest accrued on this Note shall be
payable on the fifth day of each month, commencing September 5, 1996.
2. Selection of Interest Rate Options. At any time any portion of
this Note bears interest determined in relation to Bank's LIBOR, it may be
continued by Borrower at the end of the Fixed Rate Term applicable thereto so
that all or a portion thereof bears interest determined in relation to the
Prime Rate or in relation to Bank's LIBOR for a new Fixed Rate Term designated
by Borrower. At any time any portion of this Note bears interest determined
in relation to the Prime Rate, Borrower may convert all or a portion thereof
so that it bears interest determined in relation to Bank's LIBOR for a Fixed
Rate Term designated by Borrower. At the time each advance is requested
hereunder or Borrower wishes to select the LIBOR option for all or a portion
of the outstanding principal balance hereof, and at the end of each Fixed Rate
Term, Borrower shall give Bank notice specifying (a) the interest rate option
selected by Borrower, (b) the principal amount subject thereto, and (c) if the
LIBOR option is selected, the length of the applicable Fixed Rate Term. Any
such notice may be given,by telephone so long as, with respect to each LIBOR
selection, (i) Bank receives written confirmation from Borrower not later than
three (3) Business Days after such telephone notice is given, and (ii) such
notice is given to Bank prior to 10:00 a.m., California time, on the first day
of the Fixed Rate Term. For each LIBOR option requested hereunder, Bank will
quote the applicable fixed rate to Borrower at approximately 10:00 a.m.,
California time, on the first day of the Fixed Rate Term. If Borrower does
not immediately accept the rate quoted by Bank, any subsequent acceptance by
Borrower shall be subject to a redetermination by Bank of the applicable fixed
rate; provided however, that if Borrower fails to accept any such rate by
11:00 a.m., California time, on the Business Day such quotation is given, then
the quoted rate shall expire and Bank shall have no obligation to permit a
LIBOR option to be selected on such day. If no specific designation of
interest is made at the time any advance is requested hereunder or at the end
of any Fixed Rate Term, Borrower shall be deemed to have made a Prime Rate
interest selection for such advance or the principal amount to which such
Fixed Rate Term applied.
3. Additional LIBOR Provisions.
(a) If Bank at any time shall determine that for any reason adequate
and reasonable means do not exist for ascertaining Bank's LIBOR, then Bank
shall promptly give notice thereof to Borrower. If such notice is given and
until such notice has been withdrawn by Bank, than (i) no new LIBOR option may
be selected by Borrower, and (ii) any portion of the outstanding principal
balance hereof which bears interest determined in relation to Bank's LIBOR,
subsequent to the end of the Fixed Rate Term applicable thereto, shall bear
interest determined in relation to the Prime Rate.
(b) If any law, treaty, rule, regulation or determination of a court
or governmental authority or any change therein or in the interpretation or
application thereof (each, a "Change in Law") shall make it unlawful for Bank
(i) to make LIBOR options available hereunder, or (ii) to maintain interest
rates based on Bank's LIBOR, then in the former event, any obligation of Bank
to make available such unlawful LIBOR options shall immediately be canceled,
and in the latter event, any such unlawful LIBOR-based interest rates then
outstanding shall be converted, at Bank's option, so that interest on the
portion of the outstanding principal balance subject thereto is determined in
relation to the Prime Rate; provided however, that if any such Change in Law
shall permit any LIBOR-based interest rates to remain in effect until the
expiration of the Fixed Rate Term applicable thereto, then such permitted
LIBOR-based interest rates shall continue in effect until the expiration of
such Fixed Rate Term. Upon the occurrence of any of the foregoing events,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any fines, fees, charges, penalties or other
costs incurred or payable by Bank as a result thereof and which are
attributable to any LIBOR options made available to Borrower hereunder, and
any reasonable allocation made by Bank among its operations shall be
conclusive and binding upon Borrower.
(c) If any Change in Law or compliance by Bank with any request or
directive (whether or not having the force of law) from any central bank or
other governmental authority shall:
(i) subject Bank to any tax, duty or other charge with
respect to any LIBOR options, or change the basis of
taxation of payments to Bank of principal, interest,
fees or any other amount payable hereunder (except for
changes in the rate of tax on the overall net income
of Bank); or
(ii) impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities
in or for the account of, advances or loans by, or any
other acquisition of funds by any office of Bank; or
(iii) impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank of
making, renewing or maintaining any LIBOR options hereunder and/or to reduce
any amount receivable by Bank in connection therewith, then in any such case,
Borrower shall pay to Bank immediately upon demand such amounts as may be
necessary to compensate Bank for any additional costs incurred by Bank and/or
reductions in amounts received by Bank which are attributable to such LIBOR
options. In determining which costs incurred by Bank and/or reductions in
amounts received by Bank are attributable to any LIBOR options made available
to Borrower hereunder, any reasonable allocation made by Bank among its
operations shall be conclusive and binding upon Borrower.
4. Default Interest. From and after the maturity date of this Note,
or such 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
four percent (4%) above the rate of interest from time to time applicable to
this Note.
C. BORROWING AND REPAYMENT:
1. Borrowing and Repayment. Borrower may from time to time during
the term of 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 any document executed in connection with or
governing this Note; 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 July 5, 1997.
2. Advances. Advances hereunder, to the total amount of the
principal sum stated above, may be made by the holder at the oral or written
request of (a) Xxxx X. Xxxxxx or Xxxx X. Xxxxxxxxxx or Xxxx Xxxxxx or Xxx
Xxxxxxx, 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
(b) 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.
3. Application of Payments. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof. All payments credited to principal shall be applied
first, to the outstanding principal balance of this Note which bears interest
determined in relation to the Prime Rate, if any, and second, to the
outstanding principal balance of this Note which bears interest determined in
relation to Bank's LIBOR, with such payments applied to the oldest Fixed Rate
Term first.
4. Prepayment.
(a) Prime Rate. Borrower may prepay principal on any portion of this
Note which bears interest determined in relation to the Prime Rate at any
time, in any amount and without penalty.
(b) LIBOR. Borrower may prepay principal on any portion of this Note
which bears interest determined in relation to Bank's LIBOR at any time and in
the minimum amount of One Hundred Thousand Dollars ($100,000.00); provided
however, that if the outstanding principal balance of such portion of this
Note is less than said amount, the minimum prepayment amount shall be the
entire outstanding principal balance thereof. In consideration of Bank
providing this prepayment option to Borrower, or if any such portion of this
Note shall become due and payable at any time prior to the last day of the
Fixed Rate Term applicable thereto by acceleration or otherwise, Borrower
shall pay to Bank immediately upon demand a fee which is the sum of the
discounted monthly differences for each month from the month of prepayment
through the month in which such Fixed Rate Term matures, calculated as follows
for each such month:
(i) Determine the amount of interest which would have
accrued each month on the amount prepaid at the
interest rate applicable to such amount had it
remained outstanding until the last day of the Fixed
Rate Term applicable thereto.
(ii) Subtract from the amount determined in (i) above the
amount of interest which would have accrued for the
same month on the amount prepaid for the remaining
term of such Fixed Rate Term at Bank's LIBOR in effect
on the date of prepayment for new loans made for such
term and in a principal amount equal to the amount
prepaid.
(iii) If the result obtained in (ii) for any month is
greater than zero, discount that difference by Bank's
LIBOR used in (ii) above.
Each Borrower acknowledges that prepayment of such amount may result in Bank
incurring additional costs, expenses and/or liabilities, and that it is
difficult to ascertain the full extent of such costs, expenses and/or
liabilities. Each Borrower, therefore, agrees to pay the above-described
prepayment fee and agrees that said amount represents a reasonable estimate of
the prepayment costs, expenses and/or liabilities of Bank. If Borrower fails
to pay any prepayment fee when due, the amount of such prepayment fee shall
thereafter bear interest until paid at a rate per annum four percent (4*)
above the Prime Rate in effect from time to time (computed on the basis of a
360-day year, actual days elapsed).
D. 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
August 5, 1996, 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.
E. MISCELLANEOUS:
1. Remedies. Upon the occurrence of any Event of Default, 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 proceeding relating to any Borrower.
2. Obligations Joint and Several. Should more than one person or
entity sign this Note as a Borrower, the obligations of each such Borrower
shall be joint and several.
3. Governing Law. This Note shall be governed by and construed in
accordance 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.
XXXXXX AND XXXXXXXXXX SALES, CO.
By: -------------------------------
Title: -------------------------------
EXHIBIT B
Bakersfield Regional
Commercial Banking Xxxxxx
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
April 19, 1996
Xxxxxx & Xxxxxxxxxx Sales, Co.
0000 Xxxxxxx Xx.
Xxx Xxxxx, XX 00000
Re: Your $253,500.00 credit accommodation evidenced by promissory note
dated as of March 18, 1993 (the "Note")
Dear Sirs:
This letter is to advise you that, effective as of April 19, 1996, the
variable rate of interest applicable to the above-described credit
accommodation from Xxxxx Fargo Bank, National Association ("Bank") is hereby
reduced to one-half percent (0.50%) above the Prime Rate in effect from time
to time. The Note is hereby deemed modified by this letter to reflect said
interest rate reduction. Except as expressly set forth herein, all terms and
conditions of the Note remain in full force and effect, without waiver or
modification.
Sincerely,
XXXXX FARGO BANK,
NATIONAL ASSOCIATION
By: ----------------------------
Xxxx X. Xxxxxx
Vice President
Acknowledged and agreed as of 5/6/96:
XXXXXX AND XXXXXXXXXX SALES, CO.
By: Xxxx X. Xxxxxx
Title: Secretary
EXHIBIT B
XXXXX FARGO BANK PROMISSORY NOTE
$253,500.00 Bakersfield, California
March 18, 1993
FOR VALUE RECEIVED, the undersigned XXXXXX AND XXXXXXXXXX SALES, CO.
("Borrower") promises to pay to the order of XXXXX FARGO BANK, NATIONAL
ASSOCIATION ("Bank"), at its office at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxxx,
Xxxxxxxxxx, 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 Two Hundred Fifty-Three Thousand Five Hundred and
No/100 Dollars ($253,500.00), with interest thereon at a rate per annum
(computed on the basis of a 360-day year, actual days elapsed) 1.25% above the
Prime Rate in effect from time to time. The "Prime Rate" is a base rate that
the 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 the Bank.
Interest accrued on this Note shall be payable on the fifth day of each
month, commencing April 5, 1993.
Principal shall be payable in installments as follows:
Principal shall be payable annually on the fifth day of each March
in four (4) equal successive installments of Sixteen Thousand Nine
Hundred and No/100 Dollars ($16,900.00) each, commencing March 5,
1994, and continuing up to and including March 5, 1997,
with a final installment consisting of all remaining unpaid principal due and
payable in full on March 5, 1998. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.
From and after the maturity date of this Note, or such 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 four percent (4%) above the rate
of interest from time to time applicable to this Note.
The occurrence of any of the following shall constitute an "Event of
Default" under this Note:
1. The failure to pay any principal, interest, fees or other charges
when due under this Note or any contract, instrument or document executed in
connection with this Note.
2. The filing of a petition by or against any Borrower, any guarantor
of this Note or any general partner or joint venturer in any Borrower which is
a partnership or a joint venture (with each such guarantor, general partner
and/or joint venturer referred to herein as a "Third Party Obligor") under any
provisions of the Bankruptcy Reform Act, Title 11 of the United States Code,
as amended or recodified from time to time, or under any similar or other law
relating to bankruptcy, insolvency, reorganization or other relief for
debtors; the appointment of a receiver, trustee, custodian or liquidator of or
for any part of the assets or property of any Borrower or Third Party Obligor;
any Borrower or Third Party Obligor becomes insolvent, makes a general
assignment for the benefit of creditors or is generally not paying its debts
as they become due; or any attachment or like levy on any property of any
Borrower or Third Party Obligor.
3. The death or incapacity of any individual Borrower or Third Party
Obligor, or the dissolution or liquidation of any Borrower or Third Party
Obligor which is a corporation, partnership, joint venture or any other type
of entity.
4. Any default in the payment or performance of any obligation, or
any defined event of default, under any provisions of any contract, instrument
or document pursuant to which any Borrower or Third Party Obligor has incurred
any obligation for borrowed money, any purchase obligation or any other
liability of any kind to any person or entity including the holder.
5. Any financial statement provided by any Borrower or Third Party
Obligor to Bank proves false.
6. Any sale or transfer of all or a substantial or material part of
the assets of any Borrower or Third Party Obligor other than in the ordinary
course of business.
7. Any violation or breach of any provision of, or any defined event
of default under, any addendum to this Note or any loan agreement, guaranty,
security agreement, deed of trust or other document executed in connection
with or securing this Note.
Upon the occurrence of any Event of Default, 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. Each Borrower shall pay to the holder immediately upon demand
the full amount of all 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.
Should more than one person or entity sign this Note as a Borrower, the
obligations of each such Borrower shall be joint and several.
This Note shall be governed by and construed in accordance 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.
See Addendum to Promissory Note attached hereto, all terms of which are
incorporated herein by this reference.
XXXXXX AND XXXXXXXXXX SALES CO. This Note is secured by a Deed of
Trust of even date herewith.
By: ------------------------------- --------------------------------
Xxxx X. Xxxxxx, Secretary
------------------------------- --------------------------------
ADDENDUM TO PROMISSORY NOTE
THIS ADDENDUM is attached to and made a part of that certain promissory
note executed by XXXXXX AND XXXXXXXXXX SALES, CO. ("Borrower") and payable to
XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank"), or order, dated as of
March 18, 1993, in the principal amount of Two Hundred Fifty-Three Thousand
Five Hundred Dollars ($253,500.00) (the "Note").
The following provisions are hereby incorporated into the Note:
1. So long as Bank remains committed to extend credit to Borrower
under this Note and until payment in full of all obligations of Borrower
hereunder, Borrower shall unless Bank otherwise consents in writing:
(a) Provide to Bank all of the following, in form and
detail satisfactory to Bank:
(i) not later than 90 days after and as of the end
of each fiscal year, a reviewed financial statement of
Borrower, prepared by a certified public accountant
acceptable to Bank, to include a balance sheet, income
statement, statement of retained earnings, cash flow and
accompanying footnotes;
(ii) not later than 20 days after and as of the end
of each quarter, a compiled financial statement of Borrower,
prepared by Borrower, to include a balance sheet and income
statement;
(iii) not later than each May 15, a financial
statement of each Guarantor, dated not more than 12
months after the date of the most recent financial
statement received by Bank from each Guarantor,
prepared by each Guarantor, to include a balance
sheet, and within 30 days after filing, but in no
event later than each May 15, a copy of each
Guarantor's filed federal income tax return for such
year;
(iv) from time to time such other information
as Bank may reasonably request.
(b) Maintain its financial condition as follows using
generally accepted accounting principles consistently applied and
used consistently with prior practices, except to the extent
modified by the following definitions:
(i) Working Capital (defined as total current
assets, excluding prepaids, less total current
liabilities) not at any time less than $450,000.00.
(ii) Tangible Net Worth (defined as the
aggregate of total stockholders' equity plus
subordinated debt less the aggregate of any treasury
stock, any intangible assets and any obligations due
from stockholders, employees and/or affiliates) not at
any time less than $1,100,000.00 on an annual basis,
determined as of each fiscal year end.
(iii) Cash Flow Coverage Ratio (defined as the
aggregate of net income after taxes plus depreciation
and other non-cash expenses, less gain on sale of
assets, dividends, withdrawals and treasury stock
purchases divided by the aggregate of the current
portion of long-term debt) not less than 1.5 to 1.0 on
an annual basis, determined as of each fiscal year
end.
(iv) not make any additional investment in
fixed assets in any fiscal year in excess of an
aggregate of $150,000.00.
(v) not declare or pay any dividend or
distribution either in cash, stock or any other
property on Borrower's stock now or hereafter
outstanding; nor redeem, retire, repurchase or
otherwise acquire any shares of any class of
Borrower's stock now or hereafter outstanding;
provided however, that so long as Borrower maintains
its valid election as an S corporation, Borrower may
pay cash dividends or distributions to its
shareholders in any fiscal year to cover its
shareholders' federal income tax liability for the
immediately preceding fiscal year arising as a direct
result of Borrower's reported income for such fiscal
year, but not to exceed the minimum amount so
required, and Borrower shall provide to Bank, upon
request, any documentation required by Bank to
substantiate the appropriateness of amounts paid or to
be paid.
(vi) give notice in writing to Bank of any
litigation pending or threatened against Borrower in
excess of $50,000.00.
2. All obligations of Borrower to Xxxx X. Xxxxxxxxxx and Xxxx X.
Xxxxxx shall be subordinated in right of repayment to all obligations of
Borrower to Bank, up to an aggregate of $460,000.00, as evidenced by and
subject to the terms of subordination agreements in form and substance
satisfactory to Bank.
3. Borrower shall pay to Bank a non-refundable commitment fee for the
Note in the amount of $3,802.50, which commitment fee shall be due and payable
in full upon execution of loan documents.
IN WITNESS WHEREOF, this Addendum has been executed as of the same date
as the Note.
XXXXXX AND XXXXXXXXXX SALES, CO.
By: --------------------------
Xxxx X. Xxxxxx, Secretary
EXHIBIT C
(Form of Promissory Note)
XXXXX FARGO BANK PROMISSORY NOTE
$__________________ ______________, California
March 18, 19__
FOR VALUE RECEIVED, the undersigned _____________________________
("Borrower") promises to pay to the order of XXXXX FARGO BANK, NATIONAL
ASSOCIATION ("Bank"), at its office at ______________________, California, or
at such other place as the holder hereof may designate, in lawful money of the
United States of America and in immediately available funds, the principal sum
of _______________________ ________________________________ Dollars
($___________), with interest thereon at a rate per annum (computed on the
basis of a ___-day year, actual days elapsed) 1.25% 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.
Interest accrued on this Note shall be payable on the ________ day of
each ________ commencing ___________________.
Principal shall be payable in installments as follows:
with a final installment consisting of all remaining unpaid principal due and
payable in full on _____________. Each payment made on this Note shall be
credited first, to any interest then due and second, to the outstanding
principal balance hereof.
From and after the maturity date of this Note, or such 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
___-day year, actual days elapsed) equal to four percent (4%) above the rate
of interest from time to time applicable to this Note.
This note is made pursuant to and is subject to the terms of that
certain Credit Agreement between Borrower and Bank dated as of August 5, 1996,
as amended from time to time (the "Credit Agreement"). Upon the occurrence of
any Event of Default as defined in the 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. 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 proceeding
relating to any Borrower.
Should more than one person or entity sign this Note as a Borrower, the
obligations of each such Borrower shall be joint and several.
This Note shall be governed by and construed in accordance 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.
----------------------------------- ------------------------------------
----------------------------------- ------------------------------------
EXHIBIT D
Exhibit A to Deed of Trust executed by XXXXXX AND XXXXXXXXXX SALES, CO., as
Trustor, to AMERICAN SECURITIES COMPANY, as Trustee, for the benefit of XXXXX
FARGO BANK, NATIONAL ASSOCIATION, as Beneficiary, dated as of March 18, 1993.
DESCRIPTION OF PROPERTY
The land referred to in this report is situated in the State of
California, County of Tulare and is described as follows:
The South half of the West half of the Norwest quarter and the East half of
the Norwest quarter of the Norwest quarter, Section 22, Township 17 South,
Range 23 East, Mount Diablo Base and Meridian, according to the official plat
thereof.
EXCEPTING from the North half of the Southwest quarter of the Norwest quarter
all oil and mineral rights in and to said property as reserved from Xxxxx X.
Xxxxxxxx to X.X. Xxxx, dated December 1, 1933, recorded December 8, 1933, in
Book 533, Page 371, Official Records.
EXHIBIT 1
Xxxxxx & Xxxxxxxxxx Sales Co.
Grower Accounts Receivable Borrowing Base Certificate for
Period End ----------------
Thousands
Total Grower Accounts Receivable --------
Less: Grower Reserve --------
Less: Other Ineligibles --------
Net Eligible Grower Receivables --------
Maximum Advance on Grower Receivables 50% --------
(not to exceed $2,500M)
Maximum Borrowing Base --------
Total Outstanding-Grower Line of Credit Subfeature --------
Available (Overadvance) --------
The above accounts and inventory are assigned to XXXXX FARGO BANK, N.A. and a
security interest granted in accordance with the terms and conditions of the
existing Continuing Security Agreement between undersigned and XXXXX FARGO
BANK, N.A. to which reference is made. We hereby certify that the foregoing
is true and correct in all particulars and the accounts described above as
collateral for loans represent accounts which conform to all representations
and warranties set forth in said Agreement.
Xxxxxx & Xxxxxxxxxx Sales Co.
--------------------------------- Date:--------------------
Authorized Signature/Title
