1
EXHIBIT 10.15
INDEMNITY, SUBROGATION and CONTRIBUTION
AGREEMENT dated as of September 17, 1996, among
PREMIUM STANDARD FARMS, INC., a Delaware corporation
(the "Borrower"), each Subsidiary of the Borrower
listed on Schedule I hereto (the "Subsidiary
Guarantors") and THE CHASE MANHATTAN BANK, a New York
banking corporation ("Chase Manhattan Bank"), as
collateral agent (in such capacity, the "Collateral
Agent") for the Secured Parties (as defined in the
Credit Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of
September 17, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the PSF Holdings, L.L.C., the Borrower,
the Lenders (such term and each other capitalized term used but not defined
herein having the meaning assigned to it in the Credit Agreement), Chase
Manhattan Bank, as issuing bank (in such capacity, the "Issuing Bank"), as
administrative agent (in such capacity, the "Administrative Agent"), and as
Collateral Agent for the Lenders and (b) the Subsidiary Guarantee Agreement
dated as of September 17, 1996 (as amended, supplemented or otherwise modified
from time to time, the "Subsidiary Guarantee Agreement"), among the Subsidiary
Guarantors and the Collateral Agent.
The Lenders have agreed to make Loans to, and the Issuing Bank
has agreed to issue Letters of Credit for the account of, the Borrower,
pursuant to, and upon the terms and subject to the conditions specified in, the
Credit Agreement.
The Subsidiary Guarantors have each agreed to guarantee, among
other things, all the obligations of the Borrower under the Credit Agreement.
The obligations of the Lenders to make Loans and of the Issuing Bank to issue
Letters of Credit are conditioned upon, among other things, the execution and
delivery by the Borrower and the Subsidiary Guarantors of an agreement in the
form hereof.
Accordingly, the Borrower, each Subsidiary Guarantor and the
Collateral Agent agree as follows:
SECTION 1. Indemnity and Subrogation. In addition to all
such rights of indemnity and subrogation as the Subsidiary Guarantors may have
under applicable law (but subject to Section 3), the Borrower agrees that (a)
in the event a payment shall be made by any Subsidiary Guarantor under the
Subsidiary Guarantee Agreement, the Borrower shall indemnify such Subsidiary
Guarantor for the full amount of such payment and such Subsidiary Guarantor
shall be subrogated to the rights of the person to whom such payment shall have
been made to the extent of such payment and (b) in the event any assets of any
Subsidiary Guarantor shall be sold pursuant to any Security Document to satisfy
a claim of any Secured Party, the Borrower shall indemnify such Subsidiary
Guarantor in an amount equal to the greater of the book value or the fair
market value of the assets so sold.
2
2
SECTION 2. Contribution and Subrogation. Each Subsidiary
Guarantor (a "Contributing Guarantor") agrees (subject to Section 3) that, in
the event a payment shall be made by any other Subsidiary Guarantor under the
Subsidiary Guarantee Agreement or assets of any other Subsidiary Guarantor
shall be sold pursuant to any Security Document to satisfy a claim of any
Secured Party and such other Subsidiary Guarantor (the "Claiming Guarantor")
shall not have been fully indemnified by the Borrower as provided in Section 1,
each Contributing Guarantor shall indemnify the Claiming Guarantor in an amount
equal to the amount of such payment or the greater of the book value or the
fair market value of such assets, as the case may be, in each case multiplied
by a fraction of which the numerator shall be the net worth of such
Contributing Guarantor on the date hereof and the denominator shall be the
aggregate net worth of all the Subsidiary Guarantors on the date hereof (or, in
the case of any Subsidiary Guarantor becoming a party hereto pursuant to
Section 12, the date of the Supplement hereto executed and delivered by such
Subsidiary Guarantor). Any Contributing Guarantor making any payment to a
Claiming Guarantor pursuant to this Section 2 shall be subrogated to the rights
of such Claiming Guarantor under Section 1 to the extent of such payment.
SECTION 3. Subordination. Notwithstanding any provision of
this Agreement to the contrary, all rights of the Subsidiary Guarantors under
Sections 1 and 2 and all other rights of indemnity, contribution or subrogation
under applicable law or otherwise shall be fully subordinated to the
indefeasible payment in full in cash of the Obligations. No failure on the
part of the Borrower or any Subsidiary Guarantor to make the payments required
by Sections 1 and 2 (or any other payments required under applicable law or
otherwise) shall in any respect limit the obligations and liabilities of any
Subsidiary Guarantor with respect to its obligations hereunder, and each
Subsidiary Guarantor shall remain liable for the full amount of the obligations
of such Subsidiary Guarantor hereunder.
SECTION 4. Termination. This Agreement shall survive and be
in full force and effect so long as any Obligation is outstanding and has not
been paid in full in cash, and so long as the L/C Exposure has not been reduced
to zero or any of the Commitments under the Credit Agreement have not been
terminated, and shall continue to be effective or be reinstated, as the case
may be, if at any time payment, or any part thereof, of any Obligation is
rescinded or must otherwise be restored by any Secured Party or any Subsidiary
Guarantor upon the bankruptcy or reorganization of the Borrower, any Subsidiary
Guarantor or otherwise.
SECTION 5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. No Waiver; Amendment. (a) No failure on the part
of the Collateral Agent or any Subsidiary Guarantor to exercise, and no delay
in exercising, any right, power or remedy hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy by the Collateral Agent or any Subsidiary Guarantor preclude any other
or further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder are cumulative and are not exclusive of any
other remedies provided by
3
3
law. None of the Collateral Agent and the Subsidiary Guarantors shall be
deemed to have waived any rights hereunder unless such waiver shall be in
writing and signed by such parties.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to a written agreement entered into
between the Borrower, the Subsidiary Guarantors and the Collateral Agent, with
the prior written consent of the Required Lenders (except as otherwise provided
in the Credit Agreement).
SECTION 7. Notices. All communications and notices hereunder
shall be in writing and given as provided in the Subsidiary Guarantee Agreement
and addressed as specified therein.
SECTION 8. Binding Agreement; Assignments. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the successors and assigns of such party; and all covenants,
promises and agreements by or on behalf of the parties that are contained in
this Agreement shall bind and inure to the benefit of their respective
successors and assigns. Neither the Borrower nor any Subsidiary Guarantor may
assign or transfer any of its rights or obligations hereunder (and any such
attempted assignment or transfer shall be void) without the prior written
consent of the Lenders to the extent required by the Credit Agreement for the
release of the Borrower or the applicable Subsidiary Guarantor from its
obligations under the Subsidiary Guarantee Agreement. Notwithstanding the
foregoing, at the time any Subsidiary Guarantor is released from its
obligations under the Subsidiary Guarantee Agreement in accordance with the
Subsidiary Guarantee Agreement and the Credit Agreement, such Subsidiary
Guarantor will cease to have any rights or obligations under this Agreement.
SECTION 9. Survival of Agreement; Severability. (a) All
covenants and agreements made by the Borrower and each Subsidiary Guarantor
herein and in the certificates or other instruments prepared or delivered in
connection with this Agreement or the other Loan Documents shall be considered
to have been relied upon by the Collateral Agent, the other Secured Parties and
each Subsidiary Guarantor and shall survive the making by the Lenders of the
Loans and the issuance of the Letters of Credit by the Issuing Bank, and shall
continue in full force and effect as long as the principal of or any accrued
interest on any Loans or any other Fee or amount payable under the Credit
Agreement or this Agreement or under any of the other Loan Documents is
outstanding and unpaid or the L/C Exposure does not equal zero and as long as
the Commitments have not been terminated.
(b) In case any one or more of the provisions contained in
this Agreement should be held invalid, illegal or unenforceable in any respect,
no party hereto shall be required to comply with such provision for so long as
such provision is held to be invalid, illegal or unenforceable, but the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby. The parties shall
endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
4
4
SECTION 10. Counterparts. This Agreement may be executed in
counterparts (and by different parties hereto on different counterparts), each
of which shall constitute an original, but all of which when taken together
shall constitute a single contract. This Agreement shall be effective with
respect to any Subsidiary Guarantor when a counterpart bearing the signature of
such Subsidiary Guarantor shall have been delivered to the Collateral Agent.
Delivery of an executed signature page to this Agreement by facsimile
transmission shall be as effective as delivery of a manually signed counterpart
of this Agreement.
SECTION 11. Rules of Interpretation. The rules of
interpretation specified in Section 1.02 of the Credit Agreement shall be
applicable to this Agreement.
SECTION 12. Additional Guarantors. Pursuant to Section 5.12
of the Credit Agreement, each Subsidiary (other than any Inactive Subsidiary)
of the Borrower that was not in existence or not such a Subsidiary on the date
of the Credit Agreement is required to enter into the Subsidiary Guarantee
Agreement as a Subsidiary Guarantor upon becoming such a Subsidiary (or upon
ceasing to be an Inactive Subsidiary). Upon execution and delivery, after the
date hereof, by the Collateral Agent and such a Subsidiary of an instrument in
the form of Annex 1 hereto, such Subsidiary shall become a Subsidiary Guarantor
hereunder with the same force and effect as if originally named as a Subsidiary
Guarantor hereunder. The execution and delivery of any instrument adding an
additional Subsidiary Guarantor as a party to this Agreement shall not require
the consent of any Subsidiary Guarantor hereunder. The rights and obligations
of each Subsidiary Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Subsidiary Guarantor as a party to this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers as of the date first
appearing above.
PREMIUM STANDARD FARMS, INC.,
by /s/ X.X. Xxxxxxxxx
-----------------------------
Name:
Title:
5
5
PRINCETON DEVELOPMENT CORP., as
a Subsidiary Guarantor,
by /s/ X.X. Xxxxxxxxx
------------------------------
Name:
Title: Authorized Officer
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
------------------------------
Name:
Title:
6
Annex 1 to
the Indemnity, Subrogation and
Contribution Agreement
SUPPLEMENT NO. dated as of [ ],
to the Indemnity, Subrogation and Contribution
Agreement dated as of September 17, 1996 (as the same
may be amended, supplemented or otherwise modified
from time to time, the "Indemnity, Subrogation and
Contribution Agreement"), among PREMIUM STANDARD
FARMS, INC., a Delaware corporation (the "Borrower"),
each Subsidiary of the Borrower party thereto (the
"Subsidiary Guarantors"), and THE CHASE MANHATTAN
BANK, a New York banking corporation ("Chase
Manhattan Bank"), as collateral agent (the
"Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement referred to below).
Reference is made to (a) the Credit Agreement dated as of
September 17, 1996 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among PSF Holdings, L.L.C., a Delaware limited
liability company, the Borrower, the Lenders (such term and each other
capitalized term used but not defined herein having the meaning assigned to it
in the Credit Agreement), Chase Manhattan Bank, as issuing bank (in such
capacity, the "Issuing Bank"), as administrative agent (in such capacity, the
"Administrative Agent") and as Collateral Agent for the Lenders and (b) the
Subsidiary Guarantee Agreement dated as of September 17, 1996 (as amended,
supplemented or modified from time to time, the "Subsidiary Guarantee
Agreement") among the Subsidiary Guarantors and the Collateral Agent.
The Borrower and the Subsidiary Guarantors have entered into
the Indemnity, Subrogation and Contribution Agreement in order to induce the
Lenders to make Loans and the Issuing Bank to issue Letters of Credit.
Pursuant to Section 5.12 of the Credit Agreement, each Subsidiary (other than
any Inactive Subsidiary) of the Borrower that was not in existence or not such
a Subsidiary on the date of the Credit Agreement is required to enter into the
Guarantee Agreement as a Subsidiary Guarantor upon becoming such a Subsidiary
(or upon ceasing to be an Inactive Subsidiary). Section 12 of the Indemnity,
Subrogation and Contribution Agreement provides that additional Subsidiaries of
the Borrower may become Subsidiary Guarantors under the Indemnity, Subrogation
and Contribution Agreement by the execution and delivery of an instrument in
the form of this Supplement. The undersigned Subsidiary of the Borrower (the
"New Subsidiary Guarantor") is executing this Supplement in accordance with the
requirements of the Credit Agreement to become a Subsidiary Guarantor under the
Indemnity, Subrogation and Contribution Agreement in order to induce the
Lenders to make additional Loans and the Issuing Bank to issue additional
Letters of Credit and as consideration for Loans previously made and Letters of
Credit previously issued.
7
2
Accordingly, the Collateral Agent and the New Subsidiary
Guarantor agree as follows:
SECTION 1. In accordance with Section 12 of the Indemnity,
Subrogation and Contribution Agreement, the New Subsidiary Guarantor by its
signature below becomes a Subsidiary Guarantor under the Indemnity, Subrogation
and Contribution Agreement with the same force and effect as if originally
named therein as a Subsidiary Guarantor and the New Subsidiary Guarantor hereby
agrees to all the terms and provisions of the Indemnity, Subrogation and
Contribution Agreement applicable to it as a Subsidiary Guarantor thereunder.
Each reference to a " Subsidiary Guarantor" in the Indemnity, Subrogation and
Contribution Agreement shall be deemed to include the New Subsidiary Guarantor.
The Indemnity, Subrogation and Contribution Agreement is hereby incorporated
herein by reference.
SECTION 2. The New Subsidiary Guarantor represents and
warrants to the Collateral Agent and the other Secured Parties that this
Supplement has been duly authorized, executed and delivered by it and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms.
SECTION 3. This Supplement may be executed in counterparts
(and by different parties hereto on different counterparts), each of which
shall constitute an original, but all of which when taken together shall
constitute a single contract. This Supplement shall become effective when the
Collateral Agent shall have received counterparts of this Supplement that, when
taken together, bear the signatures of the New Subsidiary Guarantor and the
Collateral Agent. Delivery of an executed signature page to this Supplement by
facsimile transmission shall be as effective as delivery of a manually signed
counterpart of this Supplement.
SECTION 4. Except as expressly supplemented hereby, the
Indemnity, Subrogation and Contribution Agreement shall remain in full force
and effect.
SECTION 5. THIS SUPPLEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 6. In case any one or more of the provisions
contained in this Supplement should be held invalid, illegal or unenforceable
in any respect, neither party hereto shall be required to comply with such
provision for so long as such provision is held to be invalid, illegal or
unenforceable, but the validity, legality and enforceability of the remaining
provisions contained herein and in the Indemnity, Subrogation and Contribution
Agreement shall not in any way be affected or impaired. The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7. All communications and notices hereunder shall be
in writing and given as provided in Section 7 of the Indemnity, Subrogation and
Contribution Agreement. All
8
3
communications and notices hereunder to the New Subsidiary Guarantor shall be
given to it at the address set forth under its signature.
IN WITNESS WHEREOF, the New Subsidiary Guarantor and the
Collateral Agent have duly executed this Supplement to the Indemnity,
Subrogation and Contribution Agreement as of the day and year first above
written.
[Name Of New Guarantor],
by
________________________________________
Name:
Title:
Address:
THE CHASE MANHATTAN BANK, as
Collateral Agent,
by
________________________________________
Name:
Title:
