SECOND AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of July 31, 1995,
between
PILGRIM'S PRIDE CORPORATION,
as Borrower,
THE BANKS PARTY HERETO, and
CREDITANSTALT-BANKVEREIN,
as Agent
SECOND AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (the "Agreement") is made and entered into the as
of the 31st day of July, 1995, by and among PILGRIM'S PRIDE
CORPORATION, a Delaware corporation (hereinafter referred to as
"Borrower"), each of the Banks signatory hereto (hereinafter referred
to individually as a "Bank" and collectively as the "Banks"), and
CREDITANSTALT-BANKVEREIN, as agent for the Banks (in such capacity,
together with its successors and assigns in such capacity, hereinafter
referred to as the "Agent");
W I T N E S S E T H:
WHEREAS, Borrower, the Banks and the Agent are
parties to that certain Loan and Security Agreement, dated as of June
3, 1993 (the "Original Loan Agreement"), which provided for a term
loan (the "Original Facility") in the original principal amount of
Twenty-Eight Million Dollars ($28,000,000.00);
WHEREAS, by that certain Amended and Restated Loan
and Security Agreement dated July 29, 1994 (the "Amended and Restated
Loan Agreement"), the Borrower, the Banks and the Agent amended and
restated the Original Loan Agreement (a) to continue the Original
Facility at its then current outstanding balance of $21,700,000.00;
(b) to make a standby/term loan (the "Existing Standby/Term Facility")
to borrower to be utilized on or before June 20, 1995 (the "Conversion
Date"); and (c) to make certain other changes as more fully set forth
herein;
WHEREAS, by letter agreement of the parties dated
June 19, 1995, the Amended and Restated Loan Agreement was amended to
extend the Conversion Date to September 20, 1995;
WHEREAS, Xxxx Xxxxxxx Mutual Life Insurance
Company, a Massachusetts corporation ("Xxxxxxx") or its assignee has
heretofore released its Lien on the Mortgaged Property, evidenced by
(i) that certain promissory note dated February 1, 1988, executed by
the Borrower and payable to Xxxxxxx'x order in the original principal
amount of $20,000,000, secured by that certain Deed of Trust, Mortgage
and Security Agreement dated February 1, 1988, executed by the
Borrower for the benefit of Xxxxxxx, and recorded in Volume 182, Page
315, aforesaid Records, amended by instruments recorded in Volume 656,
page 163, aforesaid Records and Volume 698, page 77, assigned to
Agriculture Production Credit Association ("APCA") by instrument
recorded at file number 2798, aforesaid Records, and (ii) that certain
promissory note dated April 25, 1991, executed by the Borrower and
payable to Xxxxxxx'x order in the original principal amount of
$5,000,000 (collectively the "Xxxxxxx Indebtedness"), secured by that
certain Deed of Trust, Assignment of Rents and Security Agreement
dated April 25, 1991, executed by the Borrower for the benefit of
Xxxxxxx, and recorded in Volume 656, Page 168, Deed of Trust Records,
Xxxxx County, Texas, amended by instrument recorded in Volume 698,
page 77, aforesaid Records, assigned to APCA by instrument recorded at
file number 2798, aforesaid Records.
WHEREAS, the Borrower, the Banks and the Agent
wish to further amend the Amended and Restated Loan Agreement (a) to
continue the Original Facility at its current outstanding balance of
$15,400,000.00; (b) to continue the Existing Standby/Term Facility at
its current outstanding balance of $10,000,000.00; (c) to make an
additional standby/term loan to Borrower to be utilized on or before
June 20, 1996; and (d) to make certain other changes as more fully set
forth herein;
WHEREAS, for the sake of convenience, Borrower,
the Banks and the Agent desire to restate in its entirety the Amended
and Restated Loan Agreement; and
WHEREAS, this Agreement represents a continuation
of the Existing Facility and the Existing Standby/Term Facility, as
amended hereby, and not a replacement of the Existing Facility or the
Existing Standby/Term Facility;
NOW, THEREFORE, in consideration of the foregoing
premises, to induce the Banks to extend the financing provided for
herein, and for other good and valuable consideration, the sufficiency
and receipt of all of which are acknowledged by Borrower, Borrower,
the Banks and Agent agree as follows:
1. DEFINITIONS, TERMS AND REFERENCES
a. Certain Definitions. When used herein, the
following terms shall have the following meanings:
"Affiliate" shall mean, as to any Person, any other Person
which, directly or indirectly, owns or controls, on an aggregate
basis, including all beneficial ownership and ownership or control as
a trustee, guardian or other fiduciary, at least ten percent (10%) of
the outstanding shares of capital stock having ordinary voting power
to elect a majority of the board of directors (irrespective of
whether, at the time, stock of any other class or classes of such
corporation shall have or might have voting power by reason of the
happening of any contingency) of such Person; or which controls, is
controlled by or is under common control with such Person. For the
purposes of this definition, "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of
management and policies, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall mean this Second Amended and Restated Loan
and Security Agreement, as amended or supplemented from time to time.
"Applicable Law" shall mean all provisions of statutes, rules,
regulations and orders of any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality or any court, in each case, whether of the United
States or foreign, applicable to a Person, and all orders and decrees
of all courts and arbitrators in proceedings or actions in which the
Person in question is a party.
"Assignee" shall mean any bank or other entity to which a Bank
assigns all or any part of any Loan pursuant to Section 13.4(c) and
"Assignees" shall mean, collectively, all banks and other entities to
which any Bank assigns all or any part of any Loan pursuant to Section
13.4(c) hereof.
"Bankruptcy Code" shall mean the Bankruptcy Reform Act of
1978, as may be amended from time to time.
"Base Rate" shall mean an interest rate per annum, fluctuating
daily, equal to the higher of (a) the rate announced by Creditanstalt
from time to time at its principal office in New York, New York, as
its prime rate for domestic (United States) commercial loans in effect
on such day; and (b) the Federal Funds Rate in effect on such day plus
one-half percent (1/2%). (Such Base Rate is not necessarily intended
to be the lowest rate of interest charged by Creditanstalt in
connection with extensions of credit.) Each change in the Base Rate
shall result in a corresponding change in the interest rate hereunder
with respect to a Base Rate Loan and such change shall be effective on
the effective date of such change in the Base Rate.
"Base Rate Loan" shall mean a Loan bearing interest at a rate
based on the Base Rate.
"Business Day" shall mean any day for dealings by and between
banks in U.S. dollar deposits in the interbank Eurodollar market in
New York City, New York, and London, England, other than a Saturday,
Sunday or any day which shall be in London, England or New York City,
New York or Atlanta, Georgia, a legal holiday or a day on which
banking institutions are authorized by law to close.
"Capital Lease" shall mean, as to any Person, any lease of (or
other agreement conveying the right to use) real and/or personal
property which is required to be classified and accounted for as a
capital lease on a balance sheet of such Person under GAAP (including
Statement of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board).
"Closing Date" shall mean the date that this Agreement has
been signed by Borrower, the Banks and the Agent and has become
effective in accordance with Section 11 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder from
time to time.
"Collateral" shall mean the property of Borrower described in
Section 4.1, or any part thereof, as the context shall require, in
which Agent has, or is to have, a Lien pursuant thereto, as security
for payment of the Obligations.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 3.4 hereof as a Eurodollar Loan from
one Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 3.4 hereof of a Base Rate Loan into a
Eurodollar Loan or of a Eurodollar Loan into a Base Rate Loan.
"Creditanstalt" shall mean Creditanstalt-Bankverein, an
Austrian banking corporation, and its successors and assigns.
"Current Assets" of any Person shall mean the aggregate amount
of assets of such Person which in accordance with GAAP may be property
classified as current assets after deducting adequate reserves where
proper.
"Current Liabilities" shall mean all items (including taxes
accrued as estimated) which in accordance with GAAP may be properly
classified as current liabilities, including in any event all current
portions of the amounts outstanding from time to time under this
Agreement, but excluding any current liability under the Working
Capital Credit Agreement.
"Current Ratio" shall mean the ratio of Current Assets to
Current Liabilities of the Borrower and its Subsidiaries.
"Deed of Trust" shall mean the Deed of Trust, Assignment of
Rents and Security Agreement dated June __, 1993, filed for record
June 3, 1993, recorded in Volume 775, page 1, Xxxxx County, Texas Deed
Records, executed by Borrower, conveying the Mortgaged Property to
secure the repayment of the Loans and performance of the Obligations,
and all amendments thereto, recorded or to be recorded in the Xxxxx
County, Texas Deed Records.
"Default" shall mean the occurrence of any event or condition
which, after satisfaction of any requirement for the giving of notice
or the lapse of time, or both, would become an Event of Default.
"Default Rate" shall mean (a) with respect to the unpaid
portion of any Loan, an interest rate per annum equal to two percent
(2%) above the interest rate set forth for such Loan in Section 3.1(a)
hereof or (b) with respect to any portion of the Obligations other
than Loans, two percent (2%) above the rate set forth in Section
3.1(a)(ii) hereof.
"Equipment" shall mean all of Borrower's equipment, as such
term is defined in Section 9-109(2) of the UCC, now or hereafter
located on or based at the Land, whether now owned or existing or
hereafter acquired or manufactured and whether or not subsequently
removed from the Land, including, but not limited to, all equipment
described in or covered by that certain Appraisal of Broiler
Processing and Related Facilities in Mt. Pleasant, Texas, dated as of
April 30, 1993, prepared for Borrower by Xxx X. Xxxxxxxxxx, ARA, ASA,
together with any and all accessories, accessions, parts and
appurtenances thereto, replacements thereof and substitutions
therefor.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended from time to time, and all rules and regulations
from time to time promulgated thereunder.
"ERISA Affiliate" shall mean each trade or business (whether
or not incorporated) which, together with Borrower, is treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code.
"Eurodollar Loan" shall mean a Loan bearing interest at a rate
based on a Quoted Rate.
"Event of Default" shall mean any of the events or conditions
described in Article 9 hereof.
"Facility B Term Loans" shall mean, collectively, the loans
made pursuant to Section 2.1(c) hereof, and "Facility B Term Loan"
shall mean any loan made pursuant to Section 2.1(c) hereof.
"Facility B Term Note" or "Facility B Term Notes" shall have
the meanings given to such terms in Section 2.1(c) hereof.
"Federal Funds Rate" shall mean, for any day, the overnight
federal funds rate in New York City, as published for such day (or, if
such day is not a Business Day, for the next preceding Business Day)
in the Federal Reserve Statistical Release H.15 (519) or any successor
publication, or if such rate is not so published for any day which is
a Business Day, the average of the quotations for such day on
overnight federal funds transactions in New York City received by
Agent from three federal funds brokers of recognized standing selected
by Agent.
"Fiscal Year" shall mean, for any year, the 52 or 53 week
period ending on the Saturday closest to September 30 of such year,
regardless of whether such Saturday occurs in September or October of
such year.
"Fixed Charge Coverage Ratio" shall mean, for any fiscal
period, the ratio of (a) the sum of (i) net income before income taxes
for such fiscal period plus (ii) interest expense for such fiscal
period plus (iii) depreciation and amortization for financial
reporting purposes for such fiscal period plus (iv) the aggregate
amount payable during such fiscal period under Operating Leases to (b)
the sum of (i) interest expense for such fiscal period plus (ii)
current maturities for long term debt plus (iii) the aggregate amount
payable during such fiscal period under Operating Leases, in each case
calculated for Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.
"Funded Debt" shall mean, collectively, (a) the aggregate
principal amount of Indebtedness for borrowed money which would, in
accordance with GAAP, be classified as long-term debt, together with
the current maturities thereof; (b) all Indebtedness outstanding under
any revolving credit, line of credit or similar agreement providing
for borrowings (and any extensions or renewals thereof),
notwithstanding that any such Indebtedness is created within one year
of the expiration of such agreement; (c) the principal component of
obligations under Capital Lease; and (d) any other Indebtedness
bearing interest or carrying a similar payment requirement (including
any Indebtedness issued at a discount to its face amount), calculated
in all case for Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.
"GAAP" shall mean generally accepted accounting principles
consistently applied and maintained throughout the period indicated
and consistent with the prior financial practice of Borrower and any
of its predecessors, as reflected in the financial information
referred to in Section 5.11 hereof.
"Indebtedness" shall mean, as applied to any Person at any
time, (a) all indebtedness, obligations or other liabilities of such
Person (i) for borrowed money or evidenced by debt securities,
debentures, acceptances, notes or other similar instruments, and any
accrued interest, fees and charges relating thereto; (ii) under profit
payment agreements or similar agreement; (iii) with respect to letters
of credit issued for such Person's account; (iv) to pay the deferred
purchase price of property or services, except unsecured accounts
payable and accrued expenses arising in the ordinary course of
business; or (v) in respect of Capital Leases; (b) all indebtedness,
obligations or other liabilities of such Person or others secured by a
Lien on any property of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by such Person, all as of such
time; (c) all indebtedness, obligations or other liabilities of such
Person in respect of any foreign exchange contract, interest rate
protection agreement, interest rate future, interest rate option,
interest rate swap, interest rate cap or other interest rate hedge
arrangement, net of liabilities owed to such Person by the
counterparties thereon; (d) all preferred stock subject (upon the
occurrence of any contingency or otherwise) to mandatory redemption;
(e) Indebtedness of others guaranteed by such Person.
"Intangible Assets" shall mean license agreements, trademarks,
trade names, patents, capitalized research and development,
proprietary products (the results of past research and development
treated as long term assets and excluded from Inventory) and goodwill
(all determined on a consolidated basis in accordance with GAAP).
"Interest Period" shall mean, in connection with any
Eurodollar Loan, the period beginning on the date such Eurodollar Loan
is made and continuing for one, two, three or six months as selected
by Borrower in its notice of Conversion or Continuation.
Notwithstanding the foregoing, however, (a) any applicable Interest
Period which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day,
(b) with respect to Eurodollar Loans, any applicable Interest Period
which begins on a day for which there is no numerically corresponding
day in the calendar month during which such Interest Period is to end
shall (subject to clause (a) above) end on the last day of such
calendar month, and (c) no Interest Period shall extend beyond any
date as would interfere with the repayment obligations of Borrower
hereunder.
"Land" shall mean the real estate or interest therein
described in Exhibit "A" attached hereto and incorporated herein by
this reference, all fixtures or other improvements situated thereon
and all rights, titles and interests appurtenant thereto.
"Leases" shall mean any and all leases, subleases, licenses,
concessions or other agreements (written or oral, now or hereafter in
effect), whether an Operating Lease or a Capital Lease, which grant a
possessory interest in and to, together with and all security and
other deposits made in connection therewith and all other agreements,
such as architect's contracts, engineer's contracts, utility
contracts, maintenance agreements and service contracts, which in any
way relate to the design, use, occupancy, operation, maintenance,
enjoyment or ownership of the Equipment or the Mortgaged Property.
"Leverage Ratio" shall mean, on any date, the ratio of (a)
Funded Debt, as of such date, to (b) the sum of (i) Net Worth as of
such date, and (ii) Funded Debt, as of such date, in each case
computed for the Borrower and its Subsidiaries on a consolidated basis
in accordance with GAAP.
"Lien" means any mortgage, deed of trust, deed to secure debt,
pledge, hypothecation, assignment for security, security interest,
encumbrance, lien or charge of any kind, whether voluntarily incurred
or arising by operation of law, by statute, by contract, or otherwise,
affecting any property, including any agreement to grant any of the
foregoing, any conditional sale or other title retention agreement,
any lease in the nature of a security interest, and/or the filing of
or agreement to give any financing statement (other than a precaution-
ary financing statement with respect to a lease that is not in the na-
ture of a security interest) under the UCC or comparable law of any
jurisdiction with respect to any property.
"Loan" shall mean either a Term Loan, a Standby/Term Loan or a
Facility B Term Loan, and "Loans" shall mean, collectively, all Term
Loans, Standby/Term Loans and Facility B Term Loans. Loans may be
either Eurodollar Loans or Base Rate Loans, each of which is a "type"
of Loan.
"Loan Documents" shall mean this Agreement, the Deed of Trust,
the Second Deed of Trust, the Third Deed of Trust, the Notes, any
financing statements covering portions of the Collateral and any and
all other instruments, documents, and agreements now or hereafter
executed and/or delivered by Borrower or its Subsidiaries in
connection herewith, or any one, more, or all of the foregoing, as the
context shall require, and "Loan Document" shall mean any one of the
Loan Documents.
"Loan Percentage" shall mean, as to each Bank, that amount,
expressed as a percentage, equal to the ratio of the outstanding
principal amount of such Bank's Loans to the aggregate outstanding
principal amount of the Loans, provided that the Loan Percentage of
each Bank shall be increased or decreased, as appropriate, to reflect
any assignments made pursuant to Sections 13.4, 13.4(c) hereof.
"Majority Banks" shall mean, at any time, Banks holding at
least sixty-seven percent (67%) of the aggregate outstanding principal
amount of the Loans.
"Material Adverse Effect" shall mean any event or condition
which, alone or when taken with other events or conditions occurring
or existing concurrently therewith (a) has or is reasonably expected
to have a material adverse effect on the business, operations,
condition (financial or otherwise), assets, liabilities, properties or
prospects of Borrower or any of its Subsidiaries or of the industry in
which Borrower operates; (b) has or is reasonably expected to have any
material adverse effect whatsoever on the validity or enforceability
of this Agreement, the Deed of Trust, the Second Deed of Trust, the
Third Deed of Trust or any other Loan Document; (c) materially impairs
or is reasonably expected to materially impair either the ability of
Borrower to pay and perform the Obligations; (d) materially impairs or
is reasonably expected to materially impair the ability of the Banks
to enforce their rights and remedies under this Agreement and the Loan
Documents; or (e) has or is reasonably expected to have any material
adverse effect on the Collateral, the Liens of the Banks in the
Collateral or the priority of such Liens.
"Maturity Date" shall mean June 30, 2000.
"Mortgaged Property" shall mean the Land, Leases, Equipment
and all other property (real, personal or mixed) which is conveyed by
the Deed of Trust, the Second Deed of Trust, the Third Deed of Trust
or any other Loan Document in which a Lien is therein created and all
other property (real, personal or mixed) on which a Lien is placed or
granted to secure the repayment or the performance of the Obligations.
"MPPAA" shall mean the Multiemployer Pension Plan Amendments
Act of 1980, amending Title IV of ERISA.
"Multiemployer Plan" shall have the same meaning as set forth
in Section 4001(a)(3) of ERISA.
"Net Worth" shall mean the excess of Borrower's total assets
over Total Liabilities, excluding, however, from the definition of
assets the amount of (a) any write-up in the book value of any asset
resulting from a revaluation thereof subsequent to the later to occur
of (1) the Closing Date and the date Borrower acquired such
asset; (b) treasury stock; (c) receivables from
Affiliates of Borrower; and (d) unamortized original
issue debt discount, all determined on a consolidated
basis for Borrower and its Subsidiaries in accordance
with GAAP.
"Notes" shall mean, collectively, the Term Notes, the
Standby/Term Notes and the Facility B Term Notes.
"Obligations" shall mean the Loans and any and all other
indebtedness, liabilities and obligations of Borrower and its
Subsidiaries, or any of them, to any Bank of every kind and nature
(including, without limitation, interest, charges, expenses,
attorneys' fees and other sums chargeable to Borrower by Agent or any
Bank and future advances made to or for the benefit of Borrower),
arising under this Agreement, the Deed of Trust, the Second Deed of
Trust, the Third Deed of Trust or the other Loan Documents, whether
direct or indirect, absolute or contingent, primary or secondary, due
or to become due, now existing or hereafter acquired.
"Operating Leases" shall mean all leases of (or other
agreements, conveying the right to use) real and/or personal property
(other than short term leases which are cancelable at any time by the
lessee) which are not required to be classified and accounted for as
capital leases on a balance sheet under GAAP (including Statement of
Financial Accounting Standards No. 13 of the Financial Accounting
Standards Board) and "Operating Lease" shall mean any one of the
Operating Leases.
"Participant" shall mean any bank or other entity to which a
Bank sells a participating interest in any Loan or Loans pursuant to
Section 13.4(b) hereof and "Participants" shall mean, collectively,
all banks or other entities to which any Bank sells a participating
interest in any Loan or Loans pursuant to Section 13.4(b) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established under ERISA.
"Permitted Liens" shall mean: (a) Liens existing on the date
hereof with respect to the Mortgaged Property and which the Agent and
the Banks permit to be listed on Schedule B of the Title Insurance;
(b) Liens in favor of Agent; (c) the interest of lessors under
Operating Leases permitted hereunder; (d) Liens for (i) property taxes
not delinquent, (ii) taxes not yet due, (iii) pledges or deposits made
under Workmen's Compensation, Unemployment Insurance, Social Security
and similar legislation, or in connection with appeal or surety bonds
incident to litigation, or to secure statutory obligations, and
(iv) mechanics' and materialmen's Liens with respect to liabilities
which are not yet due or which are being contested in good faith and
not listed on Schedule B of the Title Insurance; and (e) purchase
money Liens on Equipment; provided, however, that (i) such Lien is
created within 120 days of the acquisition of such Equipment;
(ii) such Lien attaches only to the specific items of Equipment so
acquired; (iii) such Lien secures only the Indebtedness incurred to
acquire such Equipment; and (iv) the aggregate principal amount of
Indebtedness secured by such Liens does not exceed $10,000,000 at any
one time outstanding.
"Person" shall mean and include any individual, sole
proprietorship, partnership, joint venture, trust, unincorporated
organization, association, corporation, institution, entity, party or
government (whether national, federal, state, county, city, municipal,
or otherwise, including, without limitation, any instrumentality,
division, agency, body or department thereof).
"Plan" shall mean any employee benefit plan, program,
arrangement, practice or contract, maintained by or on behalf of the
Borrower or an ERISA Affiliate, which provides benefits or
compensation to or on behalf of employees or former employees, whether
formal or informal, whether or not written, including but not limited
to the following types of plans:
(i) Executive Arrangements - any bonus, incentive
compensation, stock option, deferred compensation, commission,
severance, "golden parachute," "rabbi trust," or other
executive compensation plan, program, contract, arrangement or
practice ("Executive Arrangements");
(ii) ERISA Plans - any "employee benefit plan", except
any Multiemployer Plan, as defined in Section 3(3) of ERISA,
whether maintained by or for a single employee or by or for
multiple employees, including, but not limited to, any defined
benefit pension plan, profit sharing plan, money purchase
plan, savings or thrift plan, stock bonus plan, employee stock
ownership plan, or any plan, fund, program, arrangement or
practice providing for medical (including post-retirement
medical), hospitalization, accident, sickness, disability, or
life insurance benefits ("ERISA Plans");
(iii) Other Employee Fringe Benefits - any stock
purchase, vacation, scholarship, day care, prepaid legal
services, severance pay or other fringe benefit plan, program,
arrangement, contract or practice ("Fringe Benefit Plans");
and
(iv) Multiemployer Plan - any Multiemployer Plan.
"Quoted Rate" shall mean, when used with respect to an
Interest Period for a Eurodollar Loan, the quotient of (i) the offered
rate quoted by Agent in the interbank Eurodollar market in New York
City, New York or London, England on or about 11:00 a.m. (New York or
London time, as the case may be) two Business Days prior to such
Interest Period for U.S. dollar deposits of an aggregate amount
approximately comparable to the Eurodollar Loan to which the quoted
rate is to be applicable and for a period comparable to such Interest
Period, divided by (ii) one minus the Reserve Percentage. For
purposes of this definition, (a) "Reserve Percentage" shall mean with
respect to any Interest Period, the percentage which is in effect on
the first day of such Interest Period under Regulation D as the
maximum reserve requirement for member banks of the Federal Reserve
System in New York City with deposits comparable in amount to those of
Agent against Eurocurrency Liabilities. (The Quoted Rate for the
applicable period shall be adjusted automatically on and as of the
effective date of any change in the applicable Reserve Percentage);
and (b) "Eurocurrency Liabilities" has the meaning assigned to that
term in Regulation D, as in effect from time to time.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System, as it may be amended from
time to time.
"Regulatory Change" shall mean, with respect to any Bank, the
adoption on or after the date hereof of any applicable federal, state,
or foreign law, rule or regulation or any change after such date in
any such federal, state or foreign law, rule or regulation (including,
without limitation, Regulation D), or any adoption or change in the
interpretation or administration thereof by any court, governmental
authority, central bank or comparable agency or monetary authority
charged with the interpretation or administration thereof, or
compliance by such Bank with any request or directive made after such
date (whether or not having the force of law) of any such court,
authority, central bank or comparable agency or monetary authority.
"Reportable Event" shall have the meaning set forth in Section
4043 of ERISA.
"Second Deed of Trust" shall mean the Deed of Trust,
Assignment of Rents and Security Agreement dated July 29, 1994,
recorded in Volume 853, Page 75 Xxxxx County, Texas Records, executed
by Borrower conveying a second Lien security interest in the Mortgaged
Property to secure repayment of the Standby/Term Loans and performance
of certain of the Obligations, and all amendments thereto, recorded or
to be recorded in the Xxxxx County, Texas Deed Records.
"Standby/Term Loans" shall mean, collectively, the loans made
pursuant to Section 2.1(b) hereof, and "Standby/Term Loan" shall mean
any loan made pursuant to Section 2.1(b) hereof.
"Standby/Term Note" or "Standby/Term Notes" shall have the
meanings given to such terms in Section 2.1(b) hereof.
"Subordinated Notes" shall mean the $100,000,000 Pilgrim's
Pride Corporation Senior Subordinated Notes Due 2003, issued under the
Subordinated Notes Indenture.
"Subordinated Notes Indenture" shall mean that certain
Indenture dated as of June 3, 1993, between Borrower, as Issuer, and
Texas Commerce Bank, National Association, successor to Ameritrust
Texas National Association, as Trustee providing for the issuance of
Borrower's Senior Subordinated Notes Due 2003, in an aggregate
principal amount not to exceed $100,000,000.
"Subsidiary" shall mean, as to any Person, any other Person,
of which more than fifty percent (50%) of the outstanding shares of
capital stock or other ownership interest having ordinary voting power
to elect a majority of the board of directors of such corporation or
similar governing body of such other Person (irrespective of whether
or not at the time stock or other ownership interests of any other
class or classes of such other Person shall have or might have voting
power by reason of the happening of any contingency) is at the time
directly or indirectly owned or controlled by such Person or by one or
more "Subsidiaries" of such Person.
"Tangible Net Worth" shall mean the Net Worth minus the amount
of all Intangible Assets of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP.
"Term Loans" shall mean, collectively, the loans made pursuant
to Section 2.1(a) hereof and "Term Loan" shall mean any loan made
pursuant to Section 2.1(a) hereof.
"Term Note" and "Term Notes" shall have the meanings given to
such terms in Section 2.1(a) hereof.
"Third Deed of Trust" shall mean the Deed of Trust, Assignment
of Rents and Security Agreement of even date herewith, executed by
Borrower conveying a third Lien security interest in the Mortgaged
Property to secure repayment of the Facility B Term Loans and
performance of certain of the Obligations, and all amendments thereto,
recorded or to be recorded in the Xxxxx County, Texas Deed Records.
"Title Company" shall mean the issuer of the Title Insurance.
"Title Insurance" shall mean the mortgagee's policy(ies) of
title insurance, all in form and substance satisfactory to the Agent
and Banks and containing no exceptions (printed or otherwise) which
are unacceptable to the Agent and Banks, in the full amount(s),
securing such interest(s) and issued by a title company (or, if the
Agent or the Banks so require, by several title companies on a re-insured or
co-insured basis, at the Agent or the Banks' option)
acceptable to the Agent and Banks.
"Total Liabilities" shall mean all obligations, indebtedness
or other liabilities of any kind or nature, fixed or contingent, due
or not due, which, in accordance with GAAP, would be classified as a
liability on the balance sheet of Borrower.
"Transferee" shall mean any Participant or Assignee under this
Agreement and "Transferees" shall mean all Participants and Assignees
under this Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect in
the State of New York.
"Working Capital Credit Agreement" shall mean that certain
Secured Credit Agreement, dated as of May 27, 1993, among the
Borrower, Xxxxxx Trust and Savings Bank, individually and as Agent,
and the other banks party thereto, as hereafter amended, modified or
supplemented from time to time, together with any agreement governing
Indebtedness incurred to refinance in its entirety the Indebtedness
and commitments then outstanding or permitted to be outstanding under
such Working Capital Credit Agreement.
b. Use of Defined Terms. All terms defined in this
Agreement and the Exhibits hereto shall have the same
defined meanings when used in any other Loan Document,
unless the context shall require otherwise.
c. Accounting Terms; Calculations. All accounting
terms not specifically defined herein shall have the
meanings generally attributed to such terms under
GAAP. Calculations hereunder shall be made and
financial data required hereby shall be prepared, both
as to classification of items and as to amounts, in
accordance with GAAP, consistently applied (except as
otherwise specifically required herein).
d. Other Terms. All other terms used in this
Agreement which are not specifically defined herein
but which are defined in the UCC shall have the
meanings set forth therein.
e. Terminology. All personal pronouns used in this
Agreement, whether used in the masculine, feminine or
neuter gender, shall include all other genders; the
singular shall include the plural, and the plural
shall include the singular. Titles of Articles and
Sections in this Agreement are for convenience only,
and neither limit nor amplify the provisions of this
Agreement, and all references in this Agreement to
Articles, Sections, Subsections, paragraphs, clauses,
subclauses, Exhibits or Schedules shall refer to the
corresponding Article, Section, Subsection, paragraph,
clause, subclause of, Exhibit or Schedule attached to,
this Agreement, unless specific reference is made to
the articles, sections or other subdivisions of,
Exhibits or Schedules to, another document or
instrument.
f. Exhibits. All Exhibits and Schedules attached
hereto are by reference made a part hereof.
2. THE LOANS
a. Loans.
i. Term Loans.
(1) The Banks have heretofore made "Term Loans" under,
and as such term is defined in, the Original Loan
Agreement, to Borrower in the aggregate original
principal amount of Twenty-Eight Million Dollars
($28,000,000.00), continued as the "Term Loans" under
the Amended and Restated Loan Agreement. Borrower
acknowledges and agrees that the Term Loans
outstanding on the date hereof under the Amended and
Restated Loan Agreement shall be Term Loans under this
Agreement and are hereinafter referred to individually
as a "Term Loan" and collectively as the "Term
Loans"). Contemporaneously with the execution with
this Agreement, Borrower has executed amended and
restated term notes in the aggregate amount of
$15,400,000.00, the current aggregate outstanding
principal balance of the Term Loans, substantially in
the form of Exhibit B attached hereto, payable to each
Bank in the principal face amount of such Bank's Loan
Percentage of the Term Loans (together with any and
all amendments, modifications and supplements thereto,
and any renewals, replacements or extensions thereof
(including, but not limited to, pursuant to Sections
13.4 and 13.4(e) hereof), in whole or in part,
individually a "Term Note" and, collectively, the
"Term Notes").
(2) The aggregate principal amount of the Term Loans
shall be repaid in twenty (20) quarterly installments
of principal, payable on March 31, June 30, September
30 and December 31 of each year, commencing September
30, 1995, with the first nineteen (10) such quarterly
installments being in the amount of Seven Hundred
Thousand and No/100 Dollars ($700,000) each and with
the twentieth (20th) and final such quarterly
installment being in an amount equal to the
then-outstanding aggregate principal amount of the
Term Loans, together with all accrued but unpaid
interest thereon.
ii. Standby/Term Loans.
(1) The Banks have heretofore agreed to make
"Standby/Term Loans" up to the aggregate principal
amount of Ten Million Dollars ($10,000,000.00) under,
and as such term is defined in, the Amended and
Restated Loan Agreement, to Borrower as requested by
Borrower in accordance with the provisions of Section
2.3 thereof, from time to time on and after the date
thereof and up to, but not including, September 20,
1995. Borrower acknowledges that the current
aggregate outstanding principal balance of the
Standby/Term Loans is $10,000,000.00, the maximum
amount of the Commitment (as defined in the Amended
and Restated Loan Agreement) which is hereby reduced
to zero of the date hereof rather than on September
20, 1995 by agreement of the parties hereto. Borrower
acknowledges and agrees that the Standby/Term Loans
outstanding on the date hereof under the Amended and
Restated Loan Agreement shall be Standby/Term Loans
under this Agreement and are hereinafter referred to
individually as a "Standby/Term Loan" and collectively
as the "Standby/Term Loans"). Contemporaneously with
the execution with this Agreement, Borrower has
executed amended and restated standby/term notes in
the aggregate amount of $10,000,000.00, the current
aggregate outstanding principal balance of the
Standby/Term Loans, substantially in the form of
Exhibit C-1 attached hereto, payable to each Bank in
the principal face amount of such Bank's Loan
Percentage of the Standby/Term Loans, (together with
any and all amendments, modifications and supplements
thereto, and any renewals, replacements or extensions
thereof (including, but not limited to, pursuant to
Sections 13.4 and 13.4(e) hereof), in whole or in
part, individually a "Standby/Term Note" and
collectively the "Standby/Term Notes"). Standby/Term
Loans, once borrowed and repaid, may not be
reborrowed.
(2) The aggregate principal amount of the Standby/Term
Loans shall be repaid in twenty (20) quarterly
installments of principal, payable on March 31, June
30, September 30 and December 31 of each year,
commencing September 30, 1995, with the first nineteen
(19) such installments each being in an amount equal
to One Hundred Sixty-Seven Thousand and No/100 Dollars
($167,000.00) and the final such quarterly installment
being in an amount equal to the then-outstanding
unpaid aggregate principal amount of the Standby/Term
Loans, together with all accrued but unpaid interest
thereon.
iii. Facility B Term Loans.
(1) Subject to the terms and conditions hereof and
provided there exists no Default or Event of Default,
each Bank severally agrees to make on the Closing Date
loans (each a "Facility B Term Loan" and collectively
the "Facility B Term Loans"), as requested by Borrower
in accordance with the provisions of Section 2.3
hereof, to Borrower in an aggregate amount of Five
Million and No 100 Dollars ($5,000,000.00). The
Facility B Term Loans made by each Bank shall be
evidenced by a promissory note, substantially in the
form of Exhibit C-2 attached hereto, payable to such
Bank in the principal face amount of such Bank's Loan
Percentage of the Facility B Term Loans (together with
any and all amendments, modifications and supplements
thereto, and any renewals, replacements or extensions
thereof (including, but not limited to, pursuant to
Sections 13.4 and 13.4(e) hereof), in whole or in
part, individually a "Facility B Term Note" and
collectively the "Facility B Term Notes"). Facility B
Term Loans, once borrowed and repaid, may not be
reborrowed.
(2) The aggregate principal amount of the Facility B
Term Loans shall be repayable in sixteen (16)
quarterly installments of principal, payable on March
31, June 30, September 30 and December 31 of each
year, commencing September 30, 1996, with the first
fifteen (15) such installments each being in an amount
equal to Eighty Three Thousand Five Hundred and No/100
Dollars ($83,500.00) and the final such quarterly
installment being in an amount equal to the then-outstanding
unpaid aggregate principal amount of the
Facility B Term Loans, together with all accrued but
unpaid interest thereon.
b. Borrowing Procedures. Borrower shall give the
Agent notice of Borrower's request for the funding of
the Loans in accordance with Section 2.8 hereof. Not
later than 11:00 a.m (New York time), on the date
specified for each borrowing hereunder, each Bank
shall make available to the Agent the amount of the
Loan to be made by such Bank, in immediately available
funds at an account with Creditanstalt designated by
the Agent. The Agent shall, subject to the terms and
conditions of this Agreement, not later than 1:00 p.m.
(New York time) on the Business Day specified for such
borrowing, make such amount available to Borrower at
the Agent's office in New York, New York.
c. Loan Account; Statements of Account. The Banks
will maintain one or more loan accounts for Borrower
to which such Bank will charge all amounts advanced to
or for the benefit of Borrower hereunder or under any
of the other Loan Documents and to which such Bank
will credit all amounts collected under each such
credit facility from or on behalf of such Borrower.
The Banks will account to Borrower periodically with a
statement of charges and payments made pursuant to
this Agreement, and each such account statement shall
be deemed final, binding and conclusive, absent
manifest error, unless such Bank is notified by
Borrower in writing to the contrary within thirty (30)
days of the date of each account statement. Any such
notice shall only be deemed an objection to those
items specifically objected to therein. The unpaid
principal amount of the Loans, the unpaid interest
accrued thereon, the interest rate or rates applicable
to such unpaid principal amount, and the accrued and
unpaid fees, premiums and other amounts due hereunder
shall at all times be ascertained from the records of
the Banks and such records shall constitute prima
facie evidence of the amounts so due and payable.
d. Use of Proceeds. The proceeds of the Loans shall
be used for Borrower's general working capital needs;
expenditures incurred under any Capital Leases;
acquisitions permitted by Section 7.3 hereof; and in
the case of any proceeds of the Standby/Term Loans to
repay the Indebtedness under the Subordinated Notes
Indenture. No portion of the proceeds of any Loan may
be used to "purchase" or "carry" any "margin stock,"
as such terms are defined in Regulations G, T, U or X
of the Board of Governors of the Federal Reserve
System, or to extend credit for the purpose of
purchasing or carrying margin stocks.
e. Several Obligations of the Banks; Remedies
Independent. The failure of any Bank to make any Loan
to be made by it on the date specified therefor shall
not relieve any other Bank of its obligation to make
its Loan on such date, but neither any Bank nor the
Agent shall be responsible for the failure of any
other Bank to make a Loan to be made by such other
Bank. The amounts payable by the Borrower at any time
hereunder and under the Notes to each Bank shall be a
separate and independent debt and each Bank shall be
entitled to protect and enforce its rights arising out
of this Agreement and the Notes, and it shall not be
necessary for any other Bank or the Agent to consent
to, or be joined as an additional party in, any
proceeding for such purposes.
f. Payments.
i. Each payment by the Borrower to Agent pursuant to any
of the Notes shall be made prior to 1:00 p.m. (New York
time) on the date due and shall be made without set-off or
counterclaim to the Agent at the address set forth in
Section 13.8 below or at such other place or places as
Agent may designate from time to time in writing to
Borrower and in such amounts as may be necessary in order
that all such payments (after withholding for or on
account of any present or future taxes, levies, imposts,
duties or other similar charges of whatsoever nature
imposed on any Bank by any government or any political
subdivision or taxing authority thereof, other than any
tax on or measured by the net income of any such Bank
pursuant to the income tax laws of the jurisdiction where
such Bank's principal or lending office is located) shall
not be less than the amounts otherwise specified to be
paid under the Notes. Each such payment shall be in
lawful currency of the United States of America and in
immediately available funds. If the due date of any
payment hereunder or under any of the Notes would
otherwise fall on a day which is not a Business Day, then
such payment shall be due on the next succeeding Business
Day and interest shall be payable on the principal amount
of such payment for the period of such extension.
ii. Except to the extent otherwise provided herein: the
funding of the Loans by the Banks under Section 2.1 hereof
shall be made by the relevant Banks pro rata according to
their respective Loan Percentages; the Conversion and
Continuation of Loans of a particular type shall be made
pro rata among the relevant Banks according to their Loan
Percentage of the Loans and the then current Interest
Period for each Eurodollar Loan shall be coterminous; and
each payment or prepayment of principal of Loans and each
payment of interest by Borrower shall be made for the
account of relevant Banks prorata in accordance with their
Loan Percentage.
g. Prepayment.
i. Upon written notice to the Agent in accordance with
Section 2.8, Borrower may, at its option, prepay the
Loans, in whole or in part, in integral multiples of
$100,000, on the date specified in such notice, without
premium or penalty.
ii. All prepayments shall be applied first to the
aggregate outstanding principal amount of the Term Loans,
so long as any Term Loans are outstanding, and then to the
Standby/Term Loans, so long as any Standby/Term Loans are
outstanding and then to the Facility B Term Loans.
iii. All prepayments of the Loans shall be applied to
the principal installments thereof in the inverse
order of their maturities.
iv. Borrower may not prepay any Loan which is a Eurodollar
Loan prior to the last day of the Interest Period
applicable to such Eurodollar Loan unless Borrower pays to
the Bank, concurrently with such prepayment, all amounts
payable to the Bank pursuant to Sections 3.6 and 3.7
hereof.
h. Certain Notices. All notices given by Borrower to
the Agent of Conversions, Continuations or prepayments
of Loans hereunder and the request by Borrower for the
funding of the Loans shall either be oral, with prompt
written confirmation by telecopy, or in writing, with
such written confirmation or writing, in the case of a
Conversion or Continuation, to be substantially in the
form of Exhibit D attached hereto; shall be
irrevocable; shall be effective only if received by
Agent prior to 10:00 a.m. (New York time): not later
than the date such Loan is to be Converted or
Continued as a Base Rate Loan; three (3) Business
Days prior to the date such Loan is to be Converted or
Continued as a Eurodollar Loan; fifteen (15) days
prior to any such prepayment, in the case of a
prepayment of any Loans; or four (4) Business Days
prior to the date any Loans are to be funded. Each
such notice to prepay any Loans shall specify the
Loans to be prepaid, the amount of the Loans to be
prepaid and the date of such prepayment. Each such
notice of Conversion or Continuation shall specify:
the amount of such Conversion or Continuation (which
shall be an integral multiple of $100,000 and, if a
Eurodollar Loan, shall be in a minimum principal
amount of $1,000,000); whether such Loan will be
Converted or Continued as a Eurodollar Loan or as a
Base Rate Loan; the date such Loan is to be Converted
or Continued (which shall be a Business Day and, if
such Loan is to Convert or Continue a Eurodollar Loan
then outstanding, shall not be prior to the then
current Interest Period for such outstanding Loan);
and if such Loan is a Eurodollar Loan, the duration
of the Interest Period with respect thereto. The
request for the funding of the Loans and each request
for a Conversion or Continuation of a Loan or for any
other financial accommodation by Borrower pursuant to
this Agreement or the other Loan Documents shall
constitute (x) an automatic warranty and
representation by Borrower to each Bank that there
does not then exist a Default or Event of Default or
any event or condition which, with the making of such
Loan, would constitute a Default or Event of Default
and (y) an affirmation that as of the date of said
request all of the representations and warranties of
Borrower contained in this Agreement and the other
Loan Documents are true and correct in all material
respects, both before and after giving effect to the
application of the proceeds of the Loans. If on the
last day of the Interest Period of any Eurodollar Loan
hereunder, Agent has not received a notice hereunder
to Convert, Continue or prepay such Loan, Borrower
shall be deemed to have submitted a notice to convert
such Loan to a Base Rate Loan, if such Loan was a
Eurodollar Loan, or to continue such Loan as a Base
Rate Loan, if such Loan was a Base Rate Loan.
3. INTEREST
a. Interest. Borrower, the Banks and the Agent agree
that, effective as of July 31, 1995, the following
shall apply:
i. Subject to modification pursuant to Subsection (b)
below and Section 10.1 hereof, the average daily
outstanding principal amount of the Loans and all other
sums payable by Borrower hereunder shall bear interest
from July 31, 1995 until paid in full at the following
rates:
(1) the outstanding principal amount of each
Eurodollar Loan shall bear interest at a fixed rate of
interest per annum equal to the Quoted Rate for the
then-current Interest Period for such Loan plus one
and eight-tenths percent (1.8%), calculated daily on
the basis of a 360-day year and actual days elapsed;
(2) the outstanding principal amount of each Base Rate
Loan and all other sums payable by Borrower hereunder
shall bear interest at a fluctuating rate per annum
equal to the Base Rate plus one-fourth percent (1/4%),
calculated daily on the basis of a 360-day year and
actual days elapsed; and
(3) the outstanding principal amount of any payment on
any Loan or other Obligations which is not paid in
full when due, together with accrued and unpaid
interest thereon (to the extent permitted by law),
shall bear interest at the Default Rate.
ii. Accrued interest shall be payable in the case of Base
Rate Loans, monthly on the first day of each month
hereafter for the previous month, commencing with the
first such day following the date hereof; in the case of
a Eurodollar Loan, on the last day of each Interest Period
provided, however, that if any Interest Period in respect
of a Eurodollar Loan is longer than three (3) months, such
interest prior to maturity shall be paid on the last
Business Day of each three (3) month interval within such
Interest Period as well as on the last day of such
Interest Period; in the case of any Loan, upon the
payment or prepayment thereof; in the case of any other
sum payable hereunder as set forth elsewhere in this
Agreement or, if not so set forth, on demand; and in the
case of interest payable at the Default Rate, on demand.
b. Interest Period. The Interest Period for any
Eurodollar Loan shall commence on the date such Loan
is made as specified in the notice of Conversion or
Continuation applicable thereto and shall continue for
a period of one (1), two (2), three (3) or six (6)
months, in the case of a Eurodollar Loan, as specified
in the notice of Conversion or Continuation for such
Eurodollar Loan. If Borrower fails to specify the
duration of the Interest Period for any Eurodollar
Loan in the notice of Conversion or Continuation
therefor, such Loan shall instead be Converted to, or
Continued as, as the case may be, a Base Rate Loan.
c. Limitations on Interest Periods. Borrower may
not select any Interest Period which extends beyond
the first day of any succeeding calendar quarter,
unless, giving effect to such Loan, the aggregate
outstanding principal amount of Eurodollar Loans
having Interest Periods extending beyond the first day
of each such calendar quarter is not greater than the
aggregate principal amount of the Loans scheduled to
be outstanding immediately following such first day of
the calendar quarter. Borrower shall not have in
effect at any given time during the term of this
Agreement more than three (3) different interest rates
for Loans (whether Base Rate Loans or Eurodollar
Loans).
d. Conversions and Continuations. Borrower shall have
the right, from time to time, to Convert Loans of one
type to Loans of the other type and to Continue Loans
of one type as Loans of the same type provided that
Eurodollar Loans may not be Converted to Base Rate
Loans prior to the end of the Interest Period
applicable thereto.
e. Illegality. Notwithstanding any other provision
of this Agreement to the contrary, in the event that
it shall become unlawful for any Bank to obtain funds
in the London interbank market or for such Bank to
maintain a Eurodollar Loan, then such Bank shall
promptly notify Borrower whereupon the right of
Borrower to request any Eurodollar Loan shall
thereupon terminate and any Eurodollar Loan then
outstanding shall commence to bear interest at the
rate applicable to Base Rate Loans on the last day of
the then applicable Interest Period or at such earlier
time as may be required by law.
f. Increased Costs and Reduced Return.
i. If any Regulatory Change shall:
(1) subject any Bank to any tax, duty or other charge
with respect to any Eurodollar Loan, or shall change
the basis of taxation of payments to such Bank of the
principal of or interest on any Eurodollar Loan
(except for changes in the rate of tax on the overall
net income of such Bank imposed by the jurisdiction in
which such Bank's principal office is located); or
(2) impose, modify or deem applicable any reserve,
special deposit or similar requirement (including,
without limitation, any such requirement imposed by
the Board of Governors of the Federal Reserve System)
against assets of, deposits with or for the account
of, or credit extended by, any Bank; or
(3) impose on any Bank or on the London interbank
market any other condition or expense with respect to
this Agreement, the Notes or their making, issuance or
maintenance of any Eurodollar Loan;
and the result of any such Regulatory Change is, in such Bank's
reasonable judgment, to increase the costs which such Bank determines
are attributable to its making or maintaining any Loan, or its
obligation to make available any Loan, or to reduce the amount of any
sum received or receivable by such Bank under this Agreement or the
Notes with respect to any Loan, then, within ten (10) days after
demand by such Bank, Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank for such increased cost
or reduction.
ii. In addition to any amounts payable pursuant to
subsection (a) above, if any Bank shall have determined
that the applicability of any law, rule, regulation or
guideline adopted pursuant to or arising out of the July
1988 report of the Basle Committee on Banking Regulations
and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards,"
or the adoption after the date hereof of any other law,
rule, regulation or guideline regarding capital adequacy,
or any change in any of the foregoing or in the
enforcement or interpretation or administration of any of
the foregoing by any court or any governmental authority,
central bank or comparable agency charged with the
enforcement or interpretation or administration thereof,
or compliance by such Bank (or any lending office of such
Bank) or such Bank's holding company with any request or
directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of
reducing the rate of return on such Bank's capital or on
the capital of such Bank's holding company, if any, as a
consequence of its making or maintaining any Loan or its
obligations under this Agreement to a level below that
which such Bank or such Bank's holding company could have
achieved but for such applicability, adoption, change or
compliance (taking into consideration such Bank's policies
and the policies of such Bank's holding company with
respect to capital adequacy) by an amount deemed by such
Bank to be material, then, upon demand by such Bank, the
Borrower shall pay to such Bank from time to time such
additional amount or amounts as will compensate such Bank
or such Bank's holding company for any such reduction
suffered. Each demand for compensation pursuant to this
paragraph (b) shall be accompanied by a certificate of
such Bank in reasonable detail setting forth the
computation of such compensation (including the reason
therefor), which certificate shall be conclusive, absent
manifest error.
g. Indemnity. Borrower hereby indemnifies and
agrees to hold harmless the Agent and each Bank from
and against any and all losses or expenses which it
may sustain or incur as a consequence of failure by
Borrower to consummate any notice of funding,
prepayment, Conversion or Continuation made by
Borrower, including, without limitation, any such loss
or expense arising from interest or fees payable by
any Bank to lenders of funds obtained by it in order
to maintain any Eurodollar Loan. Borrower hereby
further indemnifies and agrees to hold harmless the
Agent and each Bank from and against any and all
losses or expenses which it may sustain or incur as a
consequence of prepayment of any Eurodollar Loan on
other than the last day of the Interest Period for
such Loan (including, without limitation, any
prepayment pursuant to Sections 2.7 and 3.5 hereof).
Borrower's obligations under this Section shall
survive the termination of this Agreement and the
repayment of the Obligations.
h. Notice of Amounts Payable to Banks. If any Bank
shall seek payment of any amounts from Borrower
pursuant to Section 3.6 hereof it shall notify
Borrower of the amount payable by Borrower to such
Bank thereunder. A certificate of such Bank seeking
payment pursuant to Section 3.6 hereof, setting forth
in reasonable detail the factual basis for and the
computation of the amounts specified, shall be
conclusive, absent manifest error, as to the amounts
owed. Borrower's obligations under this Section shall
survive the termination of this Agreement and the
repayment of the Obligations.
i. Inability to Determine Quoted Rate. In the event
that Agent determines (which determination shall be
conclusive absent manifest error) that, by reason of
circumstances affecting the London interbank market,
quotation of interest rates for the relevant deposits
referred to in the definition of the "Quoted Rate"
herein are not being provided in the relevant amounts
or for the relevant maturities for the purpose of
determining rates of interest for a Eurodollar Loan,
Agent will give notice of such determination to
Borrower and at least one day prior to the date
specified in such notice of Conversion or Continuation
for such Loan to be made. If any such notice is
given, no Bank shall have any obligation to make
available, maintain, Convert or Continue Eurodollar
Loans. Until the earlier of the date any such notice
has been withdrawn by Agent or the date when Agent and
Borrower have mutually agreed upon an alternate method
of determining the rates of interest payable on a
Eurodollar Loan, as the case may be, Borrower shall
not have the right to have or maintain any Eurodollar
Loan.
j. Interest Savings Clause. It is expressly
stipulated and agreed to be the intent of Borrower,
the Agent and the Banks at all times to comply with
applicable law governing the maximum rate or amount of
interest payable on the Indebtedness (or applicable
United States federal law to the extent that it
permits any Bank to contract for, charge, take,
reserve or receive a greater amount of interest). If
the applicable law is ever judicially interpreted so
as to render usurious any amount called for under this
Agreement, the Notes or under any of the other Loan
Documents, or contracted for, charged, taken, reserved
or received with respect to the Obligations, or if
Agent's exercise of the option to accelerate the
maturity of the Notes or if any prepayment by Borrower
results in Borrower having paid any interest in excess
of that permitted by applicable law, then it is
Borrower's, the Agent's and the Banks' express intent
that all excess amounts theretofore collected by the
Agent and/or the Banks be credited on the principal
balance of the Notes (or, if the Notes and all other
Obligations have been or would thereby be paid in
full, refunded to Borrower), and the provisions of the
Notes and the other Loan Documents immediately be
deemed reformed and the amounts thereafter collectible
hereunder and thereunder reduced, without the
necessity of the execution of any new documents, so as
to comply with the applicable law, but so as to permit
the recovery of the fullest amount otherwise called
for hereunder or thereunder, not exceeding the highest
lawful amount of interest on the Obligations. All
sums paid or agreed to be paid to the Agent and/or the
Banks for the use, forbearance or detention of the
Obligations shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and
spread throughout the full term of the Notes until
payment in full so that the rate or amount of interest
on account of the Obligations does not exceed the
usury ceiling from time to time in effect and
applicable to the Notes for so long as the Obligations
are outstanding. Notwithstanding anything to the
contrary contained herein or in any of the other Loan
Documents, it is not the intention of the Agent or any
Bank to accelerate the maturity or demand payment of
any interest that has not accrued at the time of such
acceleration or to collect unearned interest at the
time of such acceleration.
4. SECURITY INTEREST - COLLATERAL
a. Security Interest. As security for the
Obligations, Borrower hereby grants to Agent, for the
benefit of the Banks, a continuing Lien on and
security interest in and to the following described
property, whether now owned or existing or hereafter
acquired or arising or in which Borrower now has or
hereafter acquires any rights (sometimes herein
collectively referred to as "Collateral"):
i. Leases;
ii. Equipment;
iii. all books and records (including, without
limitation, computer programs, print-outs and other
computer materials and records) of Borrower pertaining
to any of the foregoing; and
iv. all accessions to, substitutions for and all
replacements, products and proceeds of the foregoing,
including, without limitation, proceeds of insurance
policies insuring the Collateral.
b. Mortgaged Property. As additional security for
the Obligations, Borrower has heretofore granted to
Agent, for the benefit of the Banks, a first (except
for prior liens expressly permitted thereby) priority
lien on and security interest in the Mortgaged
Property, evidenced by the Deed of Trust, and a second
(except for prior Liens expressly permitted thereby)
priority Lien on and security interest in the
Mortgaged Property, evidenced by the Second Deed of
Trust, and Borrower has of even date herewith granted
to Agent, for the benefit of the Banks, a third
(except for prior Liens expressly permitted thereby)
priority Lien on and security interest in the
Mortgaged Property, evidenced by the Third Deed of
Trust, recorded or to be recorded in the Xxxxx County,
Texas Deed Records.
c. Perfection of Liens. Until the payment and
satisfaction in full of all Obligations, Agent's Liens
in the Collateral and all products and proceeds
thereof, shall continue in full force and effect.
Borrower shall perform any and all steps requested by
Agent or the Majority Banks to perfect, maintain and
protect Agent's Liens in the Collateral including,
without limitation, executing and filing financing or
continuation statements, or amendments thereof, in
form and substance satisfactory to Agent. Agent may
file one or more financing statements disclosing
Agent's Liens under this Agreement without Borrower's
signature appearing thereon and Borrower shall pay the
costs of, or incidental to, any recording or filing of
any financing statements concerning the Collateral.
Borrower agrees that a carbon, photographic,
photostatic, or other reproduction of this Agreement
or of a financing statement is sufficient as a
financing statement.
d. Right to Inspect. Agent and each Bank (or any
person or persons designated by it), in its sole
discretion, shall have the right to call at the
Mortgaged Property or any place of business or
property location of Borrower at any reasonable time,
and, without hindrance or delay, to inspect the
Collateral and to inspect, review, check and make
extracts from Borrower's books, records, journals,
orders, receipts and any correspondence and other data
relating to the Collateral, to Borrower's business or
to any other transactions between the parties hereto
and to discuss any of the foregoing with any of
Borrower's employees, officers and directors and with
its independent accountants.
5. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and to
make Loans hereunder, Borrower hereby makes the following
representations and warranties to the Agent and the Banks which shall
be true and correct on the date hereof and shall continue to be true
and correct at the time of the making of any Loan and until the Loans
have been repaid in full:
a. Corporate Existence and Qualification. Each of
Borrower and its Subsidiaries is a corporation duly
organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation.
Borrower is duly qualified as a foreign corporation in
good standing in the State of Texas and in each other
state wherein the conduct of its business or the
ownership of its property requires such qualification
and each Subsidiary is duly qualified as a foreign
corporation in good standing in each state wherein the
conduct of its business or the ownership of its
property requires such qualification.
b. Chief Executive Office; Collateral Locations.
Borrower's and each Subsidiary's principal place of
business, chief executive office and office where it
keeps all of its books and records is located at 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx 00000, and except
as set forth on Schedule 5.2 attached hereto neither
Borrower nor any of its respective predecessors has
had any other chief executive office or principal
place of business outside the State of Texas during
the preceding four (4) months. Schedule 5.2 attached
hereto and incorporated herein by reference sets forth
a true, correct and complete list of all places of
business and all locations at which Collateral is
located.
c. Corporate Authority. Borrower has the corporate
power and authority to execute, deliver and perform
under this Agreement and the Loan Documents to which
it is a party, and to borrow hereunder, and has taken
all necessary and appropriate corporate action to
authorize the execution, delivery and performance of
this Agreement and such Loan Documents.
d. No Consents; Validity and Binding Effect. The
execution, delivery and performance of this Agreement,
the Deed of Trust, the Second Deed of Trust, the Third
Deed of Trust and the other Loan Documents are not in
contravention of any provisions of law or any
agreement or indenture by which Borrower is bound or
of the Articles of Incorporation or By-laws of
Borrower or any of its Subsidiaries and do not require
the consent or approval of any governmental body,
agency, authority or other Person which has not been
obtained and a copy thereof furnished to Agent. This
Agreement and the other Loan Documents to which
Borrower is a party constitute the valid and legally
binding obligations of Borrower, enforceable against
Borrower in accordance with their respective terms.
e. No Material Litigation. Except as set forth on
Schedule 5.5 hereof, there are no proceedings pending
or threatened before any court or administrative
agency which might have a Material Adverse Effect.
f. Corporate Organization. The Articles of
Incorporation and By-laws of Borrower and each of its
Subsidiaries are in full force and effect under the
laws of their respective states of incorporation and
all amendments to said Articles of Incorporation and
By-laws have been duly and properly made under and in
accordance with all applicable laws.
g. Solvency. Giving effect to the execution and
delivery of the Loan Documents and the consummation of
the transactions contemplated hereby, including, but
not limited to, the making and/or continuing, as the
case may be, of the Loans hereunder, the issuance of
the Subordinated Notes and the making of the initial
loans under the Working Capital Credit Agreement,
Borrower (a) has capital sufficient to carry on its
business and transactions and all business and
transactions in which it is about to engage, (b) is
able to pay its debts as they mature and (c) owns
property whose fair saleable value is greater than the
amount required to pay its debts.
h. Adequacy of Intangible Assets. Borrower and its
Subsidiaries possess all Intangible Assets reasonably
necessary to continue to conduct their respective
businesses as heretofore conducted by them.
i. Taxes. Borrower and each of its Subsidiaries has
filed all federal, state, local and foreign tax
returns, reports and estimates which are required to
be filed, and all taxes (including penalties and
interest, if any) shown on such returns, reports and
estimates which are due and not yet delinquent or
which are otherwise due and payable have been fully
paid. Such tax returns properly and correctly reflect
the income and taxes of Borrower and its Subsidiaries
for the periods covered thereby except for such
amounts which in the aggregate are immaterial.
j. ERISA. Except as disclosed on Schedule 5.10
attached hereto and incorporated herein by reference:
i. Identification of Plans. Neither the Borrower, any of
its Subsidiaries nor any ERISA Affiliate maintains or
contributes to, or has maintained or contributed to, any
Plan or Multiemployer Plan that is subject to regulation
by Title IV of ERISA;
ii. Compliance. Each Plan has at all times been
maintained, by its terms and in operation, in accordance
with all applicable laws, except for such noncompliance
(when taken as a whole) that will not have a Material
Adverse Effect on Borrower or any of its Subsidiaries;
iii. Liabilities. Neither the Borrower, any of its
Subsidiaries nor any ERISA Affiliate is currently or
to the best knowledge of Borrower or any ERISA
Affiliate will become subject to any liability
(including withdrawal liability), tax or penalty
whatsoever to any person whomsoever with respect to
any Plan including, but not limited to, any tax,
penalty or liability arising under Title I or Title IV
of ERISA or Chapter 43 of the Code;
iv. Funding. The Borrower, its Subsidiaries and each
ERISA Affiliate have made full and timely payment of all
amounts required to be contributed under the terms of
each Plan and applicable law and all material amounts
required to be paid as expenses of each Plan. No Plan has
any "amount of unfunded benefit liabilities" (as defined
in Section 4001(a)(18) of ERISA); and
v. Insolvency; Reorganization. No Plan is insolvent
(within the meaning of Section 4245 of ERISA) or in
reorganization (within the meaning of Section 4241 of
ERISA).
k. Financial Information.
(a) The consolidated financial statements of Borrower and its
Subsidiaries for fiscal year ended October 1, 1994 disclosed in the
Borrower's Form 10-K certified by Ernst & Young, and the consolidated
interim financial statements of Borrower and its Subsidiaries for the
six-month period ended April 1, 1995, each consisting of a
consolidated balance sheet, consolidated statement of income (loss),
consolidated statement of changes in stockholders equity and
consolidated statement of cash flows, copies of which have been
delivered by Borrower to each Bank, are true and correct in all
material respects and contain no material misstatement or omission,
and fairly present the consolidated financial position, assets and
liabilities of Borrower and its Subsidiaries as of the date thereof
and the consolidated results of operations of Borrower and its
Subsidiaries for the period then ended, and as of the date thereof
there are no liabilities of Borrower or any of its Subsidiaries, fixed
or contingent, which are material that are not reflected in such
financial statements.
(b) Since the date of the financial statements referred to in
subsection (a), there has been no material adverse change in the
assets, liabilities, financial position or results of operations of
Borrower or any of its Subsidiaries, and neither Borrower nor any of
its Subsidiaries has (i) incurred any obligation or liability, fixed
or contingent, which would have a Material Adverse Effect, (ii)
incurred any Indebtedness or obligations under Capital Leases, other
than the Obligations, and trade payables and other liabilities arising
in the ordinary course of the Borrower's or such Subsidiary's
business, or (iii) guaranteed the obligations of any other Person.
l. Title to Assets. Borrower has good and marketable
title to and ownership of the Collateral, including,
but not limited to, the Mortgaged Property, and
Borrower and its Subsidiaries have good and marketable
title to and ownership of all of their other assets,
free and clear of all Liens except for Permitted Liens
or as otherwise expressly permitted by this Agreement.
m. Violations of Law. Neither Borrower nor any of
its Subsidiaries is in violation of any applicable
statute, regulation or ordinance of any governmental
entity, or of any agency thereof, which violation
could have a Material Adverse Effect.
n. No Default. Neither Borrower nor any of its
Subsidiaries is in default with respect to (a) any
note, indenture, loan agreement, mortgage, lease, deed
or other similar agreement relating to Indebtedness to
which Borrower or such Subsidiary is a party or by
which Borrower or such Subsidiary is bound or (b) any
other instrument, document or agreement to which
Borrower or such Subsidiary is a party or by which
Borrower or such Subsidiary or any of their respective
properties are bound, which other instrument, document
or agreement is material to the operations or
condition, financial or otherwise, of Borrower or such
Subsidiary.
o. Corporate and Trade or Fictitious Names. During
the five (5) years immediately preceding the date of
this Agreement, neither Borrower nor any of its
Subsidiaries nor any of their respective predecessors
has been known as or used any corporate, trade or
fictitious name other than its current corporate name
and except as disclosed on Schedule 5.15 hereto.
p. Equipment. The Equipment is and shall remain in
good condition, normal wear and tear excepted, meets
all standards imposed by any governmental agency, or
department or division thereof having regulatory
authority over such material and its use and is
currently usable in the normal course of Borrower's
business.
q. Investments. Except as set forth in Schedule 5.17
hereof, Borrower has no Subsidiaries and has no
interest in any partnership or joint venture with, or
any investment in, any Person.
r. Trade Relations. There exists no actual or, to
the best of Borrower's knowledge, threatened
termination, cancellation or limitation of, or any
modification or change in, the business relationship
of Borrower with any material supplier or with any
company whose contracts with Borrower individually or
in the aggregate are material to the operations of
Borrower; after the consummation of the transactions
contemplated by this Agreement, the Subordinated Notes
Indenture and the Working Capital Credit Agreement, to
the best knowledge of Borrower, all such companies and
suppliers will continue a business relationship with
Borrower on a basis materially no less favorable to
Borrower than that heretofore conducted; and there
exists no condition or state of facts or
circumstances which would have a Material Adverse
Effect on Borrower or prevent Borrower from conducting
its business after the consummation of the
transactions contemplated by this Agreement in
essentially the same manner in which it has heretofore
been conducted by Borrower.
s. Broker's or Finder's Fees. No broker's or
finder's fees or commissions have been incurred or
will be payable by Borrower or any of its
Subsidiaries, or any of its predecessors, to any
Person in connection with the transactions
contemplated by this Agreement. Notwithstanding the
foregoing, Borrower acknowledges that MONY Capital
Markets, Inc. has been paid that certain broker's
commission contemplated in the Original Loan
Agreement.
t. Security Interest. This Agreement creates a valid
security interest in the Collateral securing payment
of the Obligations, subject only to Permitted Liens,
and all filings and other actions necessary or
desirable to perfect and protect such security
interest have been taken, and, Agent has a valid and
perfected first priority security interest in the
Collateral, subject only to Permitted Liens.
u. Regulatory Matters. Borrower is not subject to
regulation under the Investment Company Act of 1940,
as amended, the Public Utility Holding Company Act of
1935, as amended, the Federal Power Act, the
Interstate Commerce Act or any other federal or state
statue or regulation which materially limits its
ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby.
v. Disclosure. Neither this Agreement nor any other
instrument, document, agreement, financial statement
or certificate furnished to the Agent or any of the
Banks by or on behalf of Borrower in connection with
this Agreement or the Working Capital Credit Agreement
contains an untrue statement of a material fact or
omits to state any material fact necessary to make the
statements therein, in light of the circumstances
under which they were made, not misleading or omits to
state any fact which, insofar as Borrower can now
foresee, may in the future materially and adversely
affect the condition (financial or otherwise),
business, operations or properties of Borrower and its
Subsidiaries which has not been set forth in this
Agreement or in an instrument, document, agreement,
financial statement or certificate furnished to the
Agent and the Banks in connection herewith.
i. Registration Statement. Borrower has heretofore
furnished to the Agent and each Bank a true, correct and
complete copy, including all amendments thereto, of the
Registration Statement, on Form S-1, in respect to the
Subordinated Notes and all other materials filed with the
Securities and Exchange Commission in connection with the
issuance of the Subordinated Notes. No portion of the
Registration Statement, the prospectus relating thereto,
nor any other written material filed with the Securities
and Exchange Commission with respect thereto, relating to
the Borrower or its Subsidiaries or their respective
businesses, does or will contain any statement which is
false or misleading with respect to any material fact, or
does or will omit to state a material fact necessary in
order to make the statements therein not false or
misleading, or otherwise violate any state or federal
securities laws.
6. AFFIRMATIVE COVENANTS
Borrower covenants to the Agent and the Banks that from and after
the date hereof, and until the satisfaction in full of the
Obligations, it will and it shall cause each of its Subsidiaries to,
unless the Majority Banks otherwise consent in writing:
a. Records Respecting Collateral. Keep all records
with respect to the Collateral at its office set forth
in Section 5.2 hereof and not remove such records from
such address without the prior written consent of the
Majority Banks.
b. Reporting Requirements. Furnish or cause to be
furnished to the Agent and each Bank:
i. As soon as practicable, and in any event within 45
days after the end of each fiscal quarter, consolidated
interim unaudited financial statements, including a
balance sheet, income statement and statement of cash
flow, for the quarter and year-to-date period then ended,
prepared in accordance with GAAP, consistent with the past
practice or Borrower and its Subsidiaries, and certified
as to truth and accuracy thereof by the chief financial
officer of Borrower;
ii. As soon as available, and in any event within 90 days
after the end of each fiscal year, consolidated audited
annual financial statements, including a consolidated
balance sheet, consolidated statement of income,
consolidated statement of shareholders' equity and
consolidated statement of cash flow for the fiscal year
then ended, prepared in accordance with GAAP, in
comparative form and accompanied by the unqualified
opinion of a nationally recognized firm of independent
certified public accountants regularly retained by
Borrower and its Subsidiaries and acceptable to the
Majority Banks;
iii. Together with the annual financial statements
referred to in clause (b) above, a statement from such
independent certified public accountants that, in
making their examination of such financial statements,
they obtained no knowledge of any Default or Event of
Default or, in lieu thereof, a statement specifying
the nature and period of existence of any such Default
or Event of Default disclosed by their examination;
iv. Together with the annual or interim financial
statements referred to in clauses (a) and (b) above, a
certificate of the chief financial officer of Borrower
certifying that, to the best of his knowledge, no Default
or Event of Default has occurred and is continuing or, if
a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the
action which is proposed to be taken with respect thereto;
v. Promptly after the sending or filing thereof, as the
case may be, copies of any definitive proxy statements,
financial statements or reports which Borrower or any
Subsidiary sends to its shareholders and copies of any
regular periodic and special reports or registration
statements which Borrower or any Subsidiary files with the
Securities and Exchange Commission (or any governmental
agency substituted therefor), including, but not limited
to, all Form 10-K and Form 10-Q reports, or any report or
registration statement which Borrower or any Subsidiary
files with any national securities exchange;
vi. At least fifteen (15) Business Days prior to the time
any consent by the Majority Banks will be necessary,
Borrower and any Subsidiary shall furnish to the Agent and
the Banks all pertinent information regarding any proposed
acquisition by Borrower or any Subsidiary to which the
consent of the Majority Banks is required hereunder which
is reasonably necessary or appropriate to permit the Banks
to evaluate such acquisitions in a manner consistent with
prudent banking standards;
vii. Together with the annual and, if requested by the
Agent, interim financial statements referred to in
clauses (a) and (b) above, a certificate of the chief
financial officer of Borrower certifying as to the
items of Equipment subject to purchase money Liens
permitted by clause (e) of the definition of
"Permitted Liens" and the principal amount of
Indebtedness secured by each such Lien; and
viii. Such other information respecting the condition or
operations, financial or otherwise, of Borrower and
its Subsidiaries as the Agent or the Banks may from
time to time reasonably request.
c. Tax Returns. File all federal, state and local
tax returns and other reports that Borrower and its
Subsidiaries are required by law to file, maintain
adequate reserves for the payment of all taxes,
assessments, governmental charges and levies imposed
upon them, their respective incomes, or their
respective profits, or upon any property belonging to
them, and pay and discharge all such taxes,
assessments, governmental charges and levies prior to
the date on which penalties attach thereto.
d. Compliance With Laws. Comply with all laws,
statutes, rules, regulations and ordinances of any
governmental entity, or of any agency thereof,
applicable to Borrower or any Subsidiary, a violation
of which, in any respect, might have a Material
Adverse Effect, including, without limitation, any
such laws, statutes, rules, regulations or ordinances
regarding the collection, payment, and deposit of
employees' income, unemployment, and Social Security
taxes and with respect to pension liabilities.
e. ERISA.
i. At all times make prompt payment of contributions
required to meet the minimum funding standards set forth
in Section 302 and 305 of ERISA with respect to each Plan
and otherwise comply with ERISA and all rules and
regulations promulgated thereunder in all material
respects;
ii. Promptly after the occurrence thereof with respect to
any Plan, or any trust established thereunder, notify the
Agent and the Banks of (i) a "reportable event" described
in Section 4043 of ERISA and the regulations issued from
time to time thereunder (other than a "reportable event"
not subject to the provisions for 30-day notice to the
PBGC under such regulations), or (ii) any other event
which could subject the Borrower, any of its Subsidiaries
or any ERISA Affiliate to any tax, penalty or liability
under Title I or Title IV of ERISA or Chapter 43 of the
Code which, in the aggregate, would have a Material
Adverse Effect on the Borrower, any of its Subsidiaries or
upon their respective financial condition, assets,
business operations, liabilities or property;
iii. At the same time and in the same manner as such
notice must be provided to the PBGC, or to a Plan
participant, beneficiary or alternative payee, give
the Agent and the Banks any notice required under
Section 101(d), 302(f)(4), 303, 307, 4041(b)(1)(A) or
4041(c)(1)(A) or ERISA or under Section 401(a)(29) or
412 of the Code with respect to any Plan;
iv. Furnish to the Agent or any Bank, promptly upon the
request of the Agent or such Bank, (i) true and complete
copies of any and all documents, government reports and
determination or opinion letters for any Plan; and (ii) a
current statement of withdrawal liability, if any, for
each Multiemployer Plan; and
v. Furnish to the Agent or any Bank, promptly upon the
request of the Agent or such Bank therefor, such
additional information concerning any Plan that relates to
the ability of Borrower to make any payments hereunder, as
may be reasonably requested.
f. Books and Records. Keep adequate records and
books of account with respect to its business
activities in which proper entries are made in
accordance with GAAP reflecting all its financial
transactions.
g. Notifications to the Agent and the Banks. Notify
the Agent and the Banks by telephone within ten (10)
Business Days (with each such notice to be confirmed
in writing within twelve (12) Business Days following
such telephone notice): upon Borrower's learning
thereof, of any litigation affecting Borrower or any
of its Subsidiaries claiming damages of $5,000,000 or
more, individually or when aggregated with other
litigation pending against Borrower or any of its
Subsidiaries, whether or not covered by insurance, and
of the threat or institution of any suit or
administrative proceeding against Borrower or any of
its Subsidiaries which may have a Material Adverse
Effect on Borrower or any of its Subsidiaries, or
Agent's Lien in the Collateral or the Mortgaged
Property, and establish such reasonable reserves with
respect thereto as the Majority Banks may request;
upon learning thereof, of any Default or Event of
Default hereunder; upon occurrence thereof, of any
change to the operations, financial condition or
business of Borrower or any of its Subsidiaries which
would have a Material Adverse Effect; upon the
occurrence thereof, of any amendment or modification
of the Working Capital Credit Agreement; and upon the
occurrence thereof, of Borrower's or any Subsidiary's
default under (i) any note, indenture, loan agreement,
mortgage, lease, deed or other similar agreement
relating to any indebtedness of Borrower or any of its
Subsidiaries or (ii) any other instrument, document or
agreement material to the operations or condition,
financial or otherwise, of Borrower or any of its
Subsidiaries to which Borrower or any of its
Subsidiaries is a party or by which Borrower or any of
its Subsidiaries or any of their respective property
is bound.
h. Insurance.
i. Keep all of the Collateral, whether now owned or
hereafter acquired, insured by insurance companies (i)
reasonably acceptable to the Majority Banks or having an A
or better rating according to Best's Insurance Reports;
Property-Casualty and (ii) licensed to do business in the
State of Texas against loss or damage by fire or other
risk usually insured against under extended coverage
endorsement and theft, burglary, and pilferage, together
with such other hazards as the Majority Banks may from
time to time reasonably request, in amounts reasonably
satisfactory to the Majority Banks and naming Agent as
loss payee thereon pursuant to a lender's loss payee
clause satisfactory to the Majority Banks;
ii. Keep all of its property other than the Collateral and
the Mortgaged Property, whether now owned or hereafter
acquired, insured by insurance companies (i) reasonably
acceptable to the Majority Banks or having an A or better
rating according to Best's Insurance Reports; Property-Casualty
and (ii) licensed to do business in the State of
Texas and in all jurisdictions in which such Borrower does
business against such risks and in such amounts as are
customarily maintained by others in similar businesses;
iii. Maintain at all times liability insurance coverage
against such risks and in such amounts as are
customarily maintained by others in similar
businesses, such insurance to be carried by insurance
companies (i) reasonably acceptable to the Majority
Banks or having an A or better rating according to
Best's Insurance Reports; Property-Casualty and (ii)
licensed to do business in the State of Texas and in
all jurisdictions in which such Borrower does
business; and
iv. Deliver certificates of insurance for such policy or
policies to Agent, containing endorsements, in form
satisfactory to the Majority Banks, providing that the
insurance shall not be cancelable, except upon thirty (30)
days' prior written notice to Agent.
i. Preservation of Corporate Existence. Except as
permitted by Section 7.4 hereof, preserve and maintain
its corporate existence, rights, franchises and
privileges in the jurisdiction of its incorporation.
j. Equipment. Keep and maintain the Equipment in
good operating condition, reasonable wear and tear
excepted, shall repair and make all necessary
replacements thereof so that the operating efficiency
thereof shall at all times be maintained and preserved
and, shall not permit any item of Equipment to become
a fixture to real estate or accession to other
personal property unless Agent has a first priority
Lien on or in such real estate or other personal
property. Borrower shall, immediately on demand
therefor by Agent, deliver to Agent any and all
evidence of ownership of any of the Equipment
(including, without limitation, certificates of title
and applications for title, together with any
necessary applications to have Agent's lien noted
thereon, in the case of vehicles).
k. Additional Collateral. Intentionally deleted.
7. NEGATIVE COVENANTS
Borrower covenants with the Agent and the Banks that from and
after the date hereof and until the termination of this Agreement and
the payment and satisfaction in full of the Obligations, it will not,
and it will not permit its Subsidiaries to, without the prior written
consent of the Majority Banks:
a. No Encumbrances. Create, assume, or suffer to
exist any Lien of any kind in any of the Collateral or
the Mortgaged Property except for Permitted Liens and
a Lien on the Equipment and the Mortgaged Property,
expressly subordinated to the Lien in favor of the
Agent, in favor of the agent under the Working Capital
Credit Agreement (the "Working Capital Agent"), as
security for the Obligations under the Working Capital
Credit Agreement; provided, however, that concurrently
with the granting of such Lien in favor of the Working
Capital Agent, Borrower grants to the Agent, as
security for the Obligations, a Lien, subordinate only
to the Lien of the Working Capital Agent, in the
current assets of Borrower as provided for in Section
6.11 hereof.
b. Asset Sales.
i. Sell, lease or dispose of any of the Collateral or any
interest therein except for the sale of Equipment no
longer used or useful in the business of Borrower or any
Subsidiary having an aggregate value not in excess of
$1,000,000 during any Fiscal Year or an aggregate value
not in excess of $5,000,000 during any Fiscal Year;
provided that any Equipment sold, leased or otherwise
disposed of pursuant to this clause (ii) is replaced
within 90 days after such sale, trade-in or other
disposition by replacement Equipment which is in good
operating condition and which has a value and utility at
least equal to that of the Equipment sold, traded in or
disposed of and the Agent receives, for the benefit of the
Banks, a valid perfected first Lien with respect to such
replacement Equipment, subject only to Permitted Liens; or
ii. Sell, lease or otherwise transfer any of its assets
other than the Collateral except: in the ordinary course
of business; as permitted by Section 7.9; transfers to
the Borrower or a Subsidiary; worn or obsolete property;
or any other sale or transfer of assets, which, together
with all other assets sold or transferred during the
preceding 12 month period (other than in accordance with
the preceding clauses (i), (ii), (iii) or (iv)), does not
exceed 15% of the Borrower's total consolidated tangible
assets as computed at the time of such sale or transfer.
c. Loans and Investments. Make or retain any loan or
investment (whether through the purchase of stock,
obligations or otherwise) in or make any loan or
advance to, any other Person, whether by acquisition
of stock indebtedness, other obligations or security
or by loan, advance, capital contribution, or
otherwise ("Restricted Investments") other than:
i. investments in certificates of deposit having a
maturity of one year or less issued by any United States
commercial bank having capital and surplus of not less
than $50,000,000;
ii. investments in an aggregate amount of up to $8,000,000
in deposits maintained with the First State Bank of
Pittsburg, Texas;
iii. investments in commercial paper rated P1 by
Xxxxx'x Investors Service, Inc. or A1 by Standard &
Poor's Corporation maturing within 180 days of the
date of issuance thereof;
iv. investments in mutual funds composed of either money
market securities or marketable obligations of the United
States or guaranteed by or insured by the United States,
or those for which the full faith and credit of the United
States is pledged for the repayment or principal and
interest thereof; provided that such obligations have a
final maturity of no more than three years from the date
acquired by the Borrower;
v. investments existing prior to the Closing Date; and
vi. investments in a corporate Subsidiary of the Borrower
provided that such Subsidiary is consolidated with
Borrower for financial reporting purposes;
unless, immediately after giving effect thereto, the aggregate
Restricted Investments of the Borrower and its Subsidiaries made since
the Closing Date does not exceed 5% of the Borrower's total assets.
d. Corporate Structure. Dissolve or otherwise
terminate its corporate status; enter into any merger,
reorganization or consolidation; issue any shares of
any class of capital stock of any Subsidiary or any
securities or other instruments for or which are
convertible into any shares of any class of capital
stock of any Subsidiary; or make any substantial
change in the basic type of business conducted by
Borrower or any Subsidiary as of the date hereof,
provided that the Borrower may merge with another
corporation, if the surviving corporation is the
Borrower and a Subsidiary may merge or consolidate
with or sell, lease or otherwise transfer all or
substantially all of its assets to: the Borrower or
another Subsidiary; or, another Person if immediately
after giving effect to the transaction no Default or
Event of Default would exist.
e. Fiscal Year. Change its fiscal year.
f. ERISA. Take, or fail to take, or permit any ERISA
Affiliate to take, or fail to take, any action with
respect to a Plan including, but not limited to,
establishing any Plan, amending any Plan,
terminating or withdrawing from any Plan, or
incurring an amount of unfunded benefit liabilities,
as defined in Section 4001(a)(18) of ERISA, where such
action or failure could have a material adverse effect
on the Borrower or any Subsidiary, result in a lien on
the property of the Borrower or any Subsidiary, or
require the Borrower or any Subsidiary to provide any
security.
g. Relocations; Use of Name. Relocate its executive
office; maintain any Collateral at any location other
than the Mortgaged Property or maintain records with
respect to Collateral at any locations other than the
Mortgaged Property or at the location of its chief
executive office set forth in Section 5.2 hereto; or
use any corporate name (other than its own) or any
fictitious name except upon thirty (30) days prior
written notice to Agent and after the delivery to
Agent of financing statements, if required by Agent,
in form satisfactory to Agent.
h. Arm's-Length Transactions. The Borrower will not,
and will not permit any Subsidiary to, enter into any
transaction, including without limitation, the
purchase, sale, lease or exchange of any Collateral,
or the rendering of any service, with any Affiliate of
the Borrower or such Subsidiary or any Person except
in the ordinary course of and pursuant to the
reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable
terms not materially less favorable to the Borrower
than would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate of the
Company or such Subsidiary and which would be subject
to approval by the Borrower's Audit Committee of the
Board of Directors.
i. Dividends. Declare or pay any dividends on, or
make any distribution with respect to, its shares of
any class of capital stock, redeem or retire any
capital stock, or take any action having an effect
equivalent to the foregoing (in any fiscal year of
Borrower or any Subsidiary) except for the
declaration and payment of cash dividends by a
Subsidiary and payable to Borrower and the
declaration and payment of cash dividends on the
capital stock of the Borrower not in excess of $0.08
per share of the issued and authorized common stock
plus twenty-five percent (25%) of the net income of
Borrower, as set forth in the audited financial
statements for the fiscal year of Borrower immediately
preceding the year during which such declaration and
payment of dividends is made; provided, however, that
at the time such dividend is paid there does not exist
any Default or Event of Default hereunder or any event
or condition which, with the payment of such dividend
would constitute a Default or Event of Default.
j. Subordinated Notes. Neither the Borrower or any
of its Subsidiaries shall, directly or indirectly:
i. purchase, redeem, retire or otherwise acquire for value,
set apart any money for a sinking, defeasance or other
analogous fund for, the purchase, redemption, retirement
or other acquisition of, or make any voluntary payment or
prepayment of the principal of or interest on, where any
other amount owing in respect of, the Subordinated Notes
other than regularly scheduled payments of interest
thereon; or
ii. agree to any amendment, modification or waiver of any
of the provisions of the Subordinated Notes Indenture.
k. Guaranty Fees. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly,
pay to Mr. and/or Xxx. Xxxxxx X. Xxxxxxx or any other
guarantor of any of the Borrower's Indebtedness,
obligations and liabilities, any fee or other
compensation, but excluding salary, bonus and other
compensation for services rendered as an employee
(collectively the "Guaranty Fees") except that, so
long as there is not Default or Event of Default nor
any event or condition which, with the payment of such
fee would constitute a Default or Event of Default,
Borrower may pay Guarantee Fees not to exceed
$2,000,000 in the aggregate during any fiscal year of
the Borrower.
8. FINANCIAL COVENANTS
Borrower covenants with the Agent and the Banks that from and
after the date hereof and until the termination of this Agreement and
the payment and satisfaction in full of the Obligations, unless the
Majority Banks otherwise consent in writing:
a. Leverage Ratio. The Borrower will not permit the
ratio of its Leverage Ratio at any time during each
period specified below to exceed the ratio specified
below for such period:
PERIOD MAXIMUM RATIO
Closing Date through the penultimate
day of Fiscal Year 1995 0.675:1.000
At all times thereafter 0.650:1.000
b. Tangible Net Worth. The Borrower shall maintain a
Tangible Net Worth at all times during each period
specified below of not less than the amount specified
below for such period:
i. Closing Date through the penultimate day of Fiscal
Year 1995, $100,000,000, plus 25% of Borrower's
consolidated net income (but not less than zero) for
Borrower's Fiscal Year 1995; and
ii. For the successive periods commencing on the last day
of each Fiscal Year thereafter and ending on the
penultimate day of next succeeding Fiscal Year, with the
first such period commencing on the last day of Fiscal
Year 1996, an amount equal to the minimum required
Tangible Net Worth in effect under this Section 8.2 during
the immediately preceding period plus 25% of Borrower's
consolidated net income (but not less than zero) for
Borrower's Fiscal Year ending on the date the applicable
period commences.
c. Current Ratio. The Borrower will maintain at all
times during each period specified below and measured
as of the last day of each fiscal year a Current Ratio
of not less than the amount specified below for such
period:
PERIOD CURRENT RATIO
Closing Date through the 1.15 to 1.00
last day of Fiscal Year 1998
At all times thereafter 1.20 to 1.00
d. Fixed Charge Coverage Ratio. The Borrower will
not permit its Fixed Charge Coverage Ratio to be less
than 1.35 to 1.00 as of the last day of each fiscal
period specified below:
i. the eight fiscal quarters of Borrower
ending September 30, 1995; and
ii. the eight fiscal quarters of Borrower
ending on the last day of each fiscal quarter
thereafter commencing with the fiscal quarter
ending December 30, 1995.
9. EVENTS OF DEFAULT
The occurrence of any of the following events or
conditions shall constitute an Event of Default hereunder:
a. Obligations. Borrower shall
fail to make any payments of principal or
interest of the Obligations when due;
b. Misrepresentations. Borrower
shall make any representations or
warranties in any of the Loan Documents
or in any certificate or statement
furnished at any time hereunder or in
connection with any of the Loan Documents
which proves to have been untrue or
misleading in any material respect when
made or furnished and which continues to
be untrue or misleading in any material
respect.
c. Certain Covenants. Borrower
shall default in the observance or
performance of any covenant or agreement
contained in Sections 6 (other than
Sections 6.7 or 6.11), 7 or 8 of this
Agreement and such default continues for
more than thirty (30) days after the
earlier of the date of notice thereof to
such Borrower by the Agent or the date
Borrower knew or should have known of
such default.
d. Other Covenants. Either
Borrower shall default in the observance
or performance of any other covenant or
agreement contained in this Agreement or
under any of the other Loan Documents.
e. Other Debts. Either Borrower
or any Subsidiary shall default in the
payment when due of any Indebtedness
under any guaranty, note, indenture or
other agreement relating to or evidencing
Indebtedness having a principal balance
of $1,000,000 or more, including, but not
limited to, the Subordinated Notes and
the Indebtedness under the Working
Capital Credit Agreement, or any event
specified in any guaranty, note,
indenture or other agreement relating to
or evidencing any such Indebtedness shall
occur if the effect of such event is to
cause or to permit (giving effect to any
grace or cure period applicable thereto)
the holder or holders of such
Indebtedness to cause such Indebtedness
to become due, or to be prepaid in full
(whether by redemption, purchase or
otherwise), prior to its stated maturity.
f. Tax Lien. A notice of Lien,
levy or assessment is filed of record
with respect to all or any of any
Borrower's or any Subsidiary's assets by
the United States, or any department,
agency or instrumentality thereof, or by
any state, county, municipal or other
governmental agency, including, without
limitation, the PBGC, which in the
opinion of the Majority Banks, adversely
affects the priority of the Liens granted
to Agent hereunder under the Deed of
Trust or under the other Loan Documents.
g. ERISA. The occurrence of any
of the following events: (i) the
happening of a Reportable Event with
respect to any Plan which Reportable
Event could result in a material
liability for Borrower, any of its
Subsidiaries or an ERISA Affiliate or
which otherwise could have a material
adverse effect on the financial
condition, assets, business, operations,
liabilities or property of Borrower, any
of its Subsidiaries or such ERISA
Affiliate; (ii) the disqualification or
involuntary termination of a Plan for any
reason which could result in a material
liability for Borrower, any of its
Subsidiaries or an ERISA Affiliate or
which otherwise could have a material
adverse effect on the financial
condition, assets, business, operations,
liabilities or property of Borrower, any
of its Subsidiaries or such ERISA
Affiliate; (iii) the voluntary
termination of any Plan while such Plan
has a funding deficiency (as determined
under Section 412 of the Code) which
could result in a material liability for
Borrower, any of its Subsidiaries or an
ERISA Affiliate or which otherwise could
have a material adverse effect on the
financial condition, assets, business,
operations, liabilities or property of
Borrower, any of its Subsidiaries or such
ERISA Affiliate; (iv) the appointment of
a trustee by an appropriate United States
district court to administer any such
Plan; (v) the institution of any
proceedings by the PBGC to terminate any
such Plan or to appoint a trustee to
administer any such Plan; (vi) the
failure of Borrower to notify the Agent
and the Banks promptly upon receipt by
Borrower or any of its Subsidiaries of
any notice of the institution of any
proceeding or other actions which may
result in the termination of any such
Plan.
h. Voluntary Bankruptcy.
Borrower or any of its Subsidiaries
shall: (a) file a voluntary petition or
assignment in bankruptcy or a voluntary
petition or assignment or answer seeking
liquidation, reorganization, arrangement,
readjustment of its debts, or any other
relief under the Bankruptcy Code, or
under any other act or law pertaining to
insolvency or debtor relief, whether
State, Federal, or foreign, now or
hereafter existing; (b) enter into any
agreement indicating consent to, approval
of, or acquiescence in, any such petition
or proceeding; (c) apply for or permit
the appointment, by consent or
acquiescence, of a receiver, custodian or
trustee of Borrower or any of its
Subsidiaries or for all or a substantial
part of its property; (d) make a general
assignment for the benefit of creditors;
or (e) be unable or shall fail to pay its
debts generally as such debts become due,
admit in writing its inability or failure
to pay its debts generally as such debts
become due, or otherwise become
insolvent.
i. Involuntary Bankruptcy. There
shall have been filed against Borrower or
any of its Subsidiaries an involuntary
petition in bankruptcy or seeking
liquidation, reorganization, arrangement,
readjustment of its debts or any other
relief under the Bankruptcy Code, or
under any other act or law pertaining to
insolvency or debtor relief, whether
State, Federal or foreign, now or
hereafter existing; Borrower or any of
its Subsidiaries shall suffer or permit
the involuntary appointment of a
receiver, custodian or trustee of
Borrower or any of its Subsidiaries or
for all or a substantial part of its
property; or Borrower or any of its
Subsidiaries shall suffer or permit the
issuance of a warrant of attachment,
execution or similar process against all
or any substantial part of the property
of Borrower or any of its Subsidiaries.
j. Suspension of Business. The
suspension of the transaction of the
usual business of the Borrower or of the
usual business of any of its Subsidiaries
or the involuntary dissolution of the
Borrower or the involuntary dissolution
of any of its Subsidiaries.
k. Judgments. Any judgment,
decree or order for the payment of money
which, when aggregated with all other
judgments, decrees or orders for the
payment of money pending against Borrower
or any of its Subsidiaries, exceeds the
sum of $1,000,000, shall be rendered
against Borrower or any of its
Subsidiaries and remain unsatisfied and
in effect for a period of sixty (60)
consecutive days without being vacated,
discharged, satisfied or stayed or bonded
pending appeal.
l. Change in Control. There
occurs a "Change in Control" as such term
is defined on the date hereof in the
Subordinated Notes Indenture.
m. Event of Default under Deed of
Trust, Second Deed of Trust or Third Deed
of Trust. There occurs an "Event of
Default" under the Deed of Trust, the
Second Deed of Trust or the Third Deed of
Trust.
10. REMEDIES
Upon the occurrence or existence of any Event of Default,
and during the continuation thereof, without prejudice to the rights
of the Agent and the Banks to enforce their claims against Borrower
for damages for failure by Borrower to fulfill any of the obligations
hereunder, the Agent and the Banks shall have the following rights and
remedies, in addition to any other rights and remedies available to
the Agent and the Banks at law, in equity or otherwise:
a. Default Rate. At the election
of the Majority Banks, evidenced by
written notice to the Borrower, the
outstanding principal balance of the
Obligations and, to the extent permitted
by applicable law, accrued and unpaid
interest thereon, shall bear interest at
the Default Rate until paid in full.
b. Acceleration of the
Obligations. In the event of the
occurrence of an Event of Default set
forth in Sections 9.8 or 9.9 hereof, the
Obligations shall automatically and
immediately become due and payable; and
any other Event of Default, the Majority
Banks, at their option, may declare all
of the Obligations to be immediately due
and payable, whereupon all of the
Obligations shall become immediately due
and payable, in either case without
presentment, demand, protest, notice of
non-payment or any other notice required
by law relative thereto, all of which are
hereby expressly waived by Borrower,
anything contained herein to the contrary
notwithstanding.
c. Set-Off. The right of each
Bank to set-off, without notice to
Borrower, any and all deposits at any
time credited by or due from such Bank to
Borrower, whether in a general or
special, time or demand, final or
provisional account or any other account
or represented by a certificate of
deposit and whether or not unmatured or
contingent.
d. Rights and Remedies of a
Secured Party. All of the rights and
remedies of a secured party under the UCC
or under other applicable law, all of
which rights and remedies shall be
cumulative, and none of which shall be
exclusive, to the extent permitted by
law, in addition to any other rights and
remedies contained in this Agreement, and
in any of the other Loan Documents.
e. Take Possession of Collateral.
The right of the Agent to (a) enter upon
the Land, or any other place or places
where the Collateral is located and kept,
through self-help and without judicial
process, without first obtaining a final
judgment or giving Borrower notice and
opportunity for a hearing on the validity
of the Agent's or the Banks' claim and
without any obligation to pay rent to
Borrower, and remove the Collateral
therefrom to the premises of Agent or any
agent of Agent, for such time as Agent
may desire, in order to effectively
collect or liquidate the Collateral,
and/or (b) require Borrower to assemble
the Collateral and make it available to
Agent at a place to be designated by
Agent which is reasonably convenient to
both Borrower and Agent.
f. Sale of Collateral. The right
of the Agent to sell or to otherwise
dispose of all or any of the Collateral,
at public or private sale or sales, with
such notice as may be required by law, in
lots or in bulk, for cash or on credit,
all as Agent, in its sole discretion, may
deem advisable; such sales may be
adjourned from time to time with or
without notice. Agent shall have the
right to conduct such sales on Borrower's
premises or elsewhere and shall have the
right to use Borrower's premises without
charge for such sales for such time or
times as Agent may see fit. Agent is
hereby granted a license or other right
to use, without charge, Borrower's
labels, patents, copyrights, rights of
use of any name, trade secrets, trade
names, trademarks, service marks and
advertising matter, or any property of a
similar nature, whether owned by Borrower
or with respect to which Borrower has
rights under license, sublicense or other
agreements, as it pertains to the
Collateral, in preparing for sale,
advertising for sale and selling any
Collateral and Borrower's rights under
all licenses and all franchise agreements
shall inure to the benefit of the Agent
and the Banks. Agent shall have the
right to sell, lease or otherwise dispose
of the Collateral, or any part thereof,
for cash, credit or any combination
thereof, and the Agent or any Bank may
purchase all or any part of the
Collateral at public or, if permitted by
law, private sale and, in lieu of actual
payment of such purchase price, may set
off the amount of such price against the
Obligations. The proceeds realized from
the sale of any Collateral shall be
applied first to the costs, expenses and
reasonable attorneys' fees and expenses
incurred by Agent for collection and for
acquisition, completion, protection,
removal, storage, sale and delivery of
the Collateral; second to interest due
upon any of the Obligations; and third to
the principal of the Obligations. If any
deficiency shall arise, Borrower shall
remain liable to the Banks therefor.
g. Remedies Under Deed of Trust,
Second Deed of Trust and Third Deed of
Trust. The right of the Agent to sell or
otherwise dispose of all or any of the
Mortgaged Property, in the manner
provided for in the Deed of Trust, the
Second Deed of Trust, and the Third Deed
of Trust all other rights and remedies
available to the Agent under the Deed of
Trust, the Second Deed of Trust and the
Third Deed of Trust.
h. Notice. Any notice required
to be given by Agent of a sale, lease,
other disposition of the Collateral or
any other intended action by Agent, given
to Borrower in the manner set forth in
Section 13.8 below, ten (10) days prior
to such proposed action, shall constitute
commercially reasonable and fair notice
thereof to Borrower.
i. Appointment of Agent as
Borrower's Lawful Attorney. Borrower
irrevocably designates, makes,
constitutes and appoints Agent (and all
persons designated by Agent) as
Borrower's true and lawful attorney, and
Agent or Agent's agent, may, without
notice to Borrower, and at such time or
times thereafter as Agent or said agent,
in its sole discretion, may determine, in
Borrower's or Agent's name do all acts
and things necessary, in Agent's sole
discretion, to fulfill Borrower's
obligations under this Agreement.
11. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement, it
is understood and agreed that the Banks shall have no obligation to
make any Loan unless and until the following conditions have been met,
to the sole and complete satisfaction of the Banks, the Agent and
their respective counsel:
a. No Injunction. No action,
proceeding, investigation, regulation or
legislation shall have been instituted,
threatened or proposed before any court,
governmental agency or legislative body
to enjoin, restrain, or prohibit, or to
obtain substantial damages in respect of,
or which is related to or arises out of
this Agreement or the making of such
Loan, or which in the Banks' sole
discretion, would make it inadvisable to
make such Loan.
b. No Material Adverse Change.
Since [October 1, 1994] there shall not
have occurred any material adverse change
in Borrower's or any Subsidiary's
business, or any event, condition, or
state of facts which would be expected
materially and adversely to affect the
prospects of Borrower or any of its
Subsidiaries subsequent to consummation
of the transactions contemplated by this
Agreement as determined by the Majority
Banks in their sole discretion.
c. No Default or Event of
Default. There shall exist no Default or
Event of Default or any event or
condition which, with the making of the
Loans would constitute a Default or Event
of Default.
d. Regulatory Restrictions.
Neither Borrower nor any of its
Subsidiaries shall be subject to any
applicable statute, rule, regulation,
order, writ or injunction of any court or
governmental authority or agency which
would materially restrict or hinder the
conduct of Borrower's or such
Subsidiary's business as conducted on the
date hereof or which would have a
material adverse affect on the business,
property, assets, operations or
condition, financial or otherwise of
Borrower or such Subsidiary.
e. Compliance with Law. The
Agent shall have received such evidence
as it may reasonably request that the
Land and the Mortgaged Property and the
uses thereof comply in all material
respects with all applicable laws,
regulations, codes, orders, ordinances,
rules and statutes, including, without
limitation, those relating to zoning and
environmental protection.
f. Documentation. The Agent and
the Banks shall have received the
following, each duly executed and
delivered to the Agent and the Banks, and
each to be satisfactory in form and
substance to Agent and its counsel:
i. the Notes;
ii. the Deed of Trust;
iii. the Second Deed of Trust;
iv. the Third Deed of Trust;
v. a Reaffirmation of that certain
Environmental Indemnity Agreement dated June 3,
1993, reaffirming the warranties and
representations made by Borrower thereunder;
vi. a certificate signed by the chief
executive officer and chief financial officer of
Borrower dated as of the Closing Date, stating
that the representations and warranties set forth
in Article 5 hereof are true and correct in all
material respects on and as of such date with the
same effect as though made on and as of such date,
stating that Borrower is on such date in
compliance with all the terms and conditions set
forth in this Agreement on its part to be observed
and performed, and stating that on such date, and
after giving effect to the making of any initial
Loan no Default or Event of Default has occurred
or is continuing;
vii. a certificate executed by the
chief financial officer of Borrower dated
as of the Closing Date with respect to
the Equipment owned by Borrower;
viii. a certificate of the Secretary
of Borrower dated as of the Closing Date
certifying (ii) that attached thereto is
a true and correct copy of the By-Laws of
Borrower, as in effect on the date of
such certification, (ii) that attached
thereto is a true and complete copy of
Resolutions adopted by the Board of
Directors of Borrower, authorizing the
execution, delivery and performance of
this Agreement and the other Loan
Documents; and (iii) as to the incumbency
and genuineness of the signatures of the
officers of Borrower executing this
Agreement or any of the other Loan
Documents;
ix. a copy of the Articles of Incorporation
of the Borrower, and all amendments thereto,
certified by the Secretary of State of the State
of Delaware dated as of a date close to the
Closing Date;
x. copies of all filing receipts or
acknowledgements issued by any governmental
authority to evidence any filing or recordation
necessary to perfect the Liens of Agent in the
Collateral and evidence in a form acceptable to
the Majority Banks that such Liens constitute
valid and perfected first priority Liens;
xi. a Good Standing Certificate for Borrower,
issued by the Secretary of State of Texas, dated
as of a date close to the Closing Date;
xii. certified copies of Borrower's
casualty and liability insurance policies
with evidence of the payment of the
premium therefor, together, in the case
of such casualty policies, with loss
payable and mortgagee endorsements on
Agent's standard form naming Agent as
loss payee;
xiii. the written opinion of Xxxxxx
& Carlton, counsel to Borrower, dated as
of the Closing Date, in the form attached
hereto as Exhibit E hereto, as to the
transactions contemplated by this
Agreement;
xiv. assurance from a title
insurance company satisfactory to the
Agent and the Banks that such title
insurance company is committed to cause
the Third Deed of Trust to be recorded
and, upon recordation of the Third Deed
of Trust, to issue its ALTA lender's
title insurance policies in a form
acceptable to the Agent and in amounts
satisfactory to the Agent, showing the
Third Deed of Trust as the "insured
mortgage" and insuring the validity and
priority of the Third Deed of Trust as a
Lien upon the specified Owned Real
Property, subject only to the First Deed
of Trust and the Second Deed of Trust and
to the Permitted Liens described in
clauses (b) - (d) of the definition
thereof; and
xv. such other documents, instruments and
agreements with respect to the transactions
contemplated by this Agreement, in each case in
such form and containing such additional terms and
conditions as may be reasonably satisfactory to
the Majority Banks, and containing, without
limitation, representations and warranties which
are customary and usual in such documents.
12. THE AGENT
a. Appointment, Powers and
Immunities. Each Bank hereby irrevocably
appoints and authorizes the Agent to act
as its agent hereunder with such powers
as are specifically delegated to the
Agent by the terms of this Agreement,
together with such other powers as are
reasonably incidental thereto. The Agent
(which term as used in this sentence and
in Section 12.5 and the first sentence of
Section 12.6 hereof shall include
reference to its Affiliates and its own
and its Affiliates' officers, directors,
employees and agents): shall have no
duties or responsibilities except those
expressly set forth in this Agreement,
and shall not by reason of this Agreement
be a trustee for any Bank; shall not be
responsible to the Banks for any
recitals, statements, representations or
warranties contained in this Agreement or
any of the other Loan Documents, or in
any certificate or other instrument,
document or agreement referred to or
provided for in, or received by any of
them under, this Agreement or any of the
other Loan Documents, or for the value,
validity, effectiveness, genuineness,
enforceability or sufficiency of this
Agreement, any Note or any of the other
Loan Documents or for any failure by any
Borrower or any other Person to perform
any of its obligations hereunder or
thereunder; subject to Section 12.3
hereof, shall not be required to initiate
or conduct any litigation or collection
proceedings hereunder; and shall not be
responsible for any action taken or
omitted to be taken by it hereunder or
under any other agreement, document or
instrument referred to or provided for
herein or in connection herewith, except
for its own gross negligence or willful
misconduct. The Agent may employ agents
and attorneys-in-fact and shall not be
responsible for the negligence or
misconduct of any such agents or
attorneys-in-fact selected by it in good
faith. The Agent may deem and treat the
payee of any Note as the holder thereof
for all purposes hereof unless and until
a written notice of the assignment or
transfer.
b. Reliance by Agent. The Agent
shall be entitled to rely upon any
certification, notice or other
communication (including any thereof by
telephone, telex, facsimile, telegram or
cable) believed by it to be genuine and
correct and to have been signed or sent
by or on behalf of the proper Person or
Persons, and upon advice and statements
of legal counsel, independent accountants
and other experts selected by the Agent.
As to any matters not expressly provided
for by this Agreement, the Agent shall in
all cases be fully protected in acting,
or in refraining from acting, hereunder
in accordance with instructions signed by
the Majority Banks, and such instructions
of the Majority Banks and any action
taken or failure to act pursuant thereto
shall be binding on all of the Banks.
c. Defaults. The Agent shall not
be deemed to have knowledge or notice of
the occurrence of a Default or Event of
Default (other than the non-payment of
principal of or interest on Loans) unless
the Agent has received notice from a Bank
or the Borrower specifying such Default
or Event of Default and stating that such
notice is a "Notice of Default". In the
event that the Agent receives such a
notice of the occurrence of a Default or
Event of Default, the Agent shall give
prompt notice thereof to the Banks (and
shall give each Bank prompt notice of
each such non-payment). The Agent shall
(subject to Section 12.7 hereof) take
such action with respect to such Default
or Event of Default as shall be directed
by the Majority Banks, provided that,
unless and until the Agent shall have
received such directions, the Agent may
(but shall not be obligated to) take such
action, or refrain from taking such
action, with respect to such Default or
Event of Default as it shall deem
advisable in the best interest of the
Banks.
d. Rights as a Bank. With
respect to its Loan Percentage and the
Loans made by it, Creditanstalt (and any
successor acting as Agent) in its
capacity as a Bank hereunder shall have
the same rights and powers hereunder as
any other Bank and may exercise the same
as though it were not acting as the
Agent, and the term "Bank" or "Banks"
shall, unless the context otherwise
indicates, include the Agent in its
individual capacity. Creditanstalt (and
any successor acting as Agent) and its
Affiliates may (without having to account
therefor to any Bank) accept deposits
from, lend money to and generally engage
in any kind of banking, trust or other
business with Borrower (and any of its
Affiliates) as if it were not acting as
the Agent, and Creditanstalt and its
Affiliates may accept fees and other
consideration from Borrower for services
in connection with this Agreement or
otherwise without having to account for
the same to the Banks.
e. Indemnification. The Banks
agree to indemnify the Agent (to the
extent not reimbursed under Sections 13.6
or 13.14 hereof, but without limiting the
obligations of Borrower under said
Sections 13.6 and 13.14), for their Loan
Percentage of any and all liabilities,
obligations, losses, damages, penalties,
actions, judgments, suits, costs,
expenses or disbursements of any kind and
nature whatsoever which may be imposed
on, incurred by or asserted against the
Agent in any way relating to or arising
out of this Agreement or any other
instruments, documents or agreements
contemplated by or referred to herein or
the transactions contemplated hereby
(including, without limitation, the costs
and expenses which Borrower is obligated
to pay under Section 13.6 hereof but
excluding, unless an Event of Default has
occurred and is continuing, normal
administrative costs expenses incident to
the performance of its agency duties
hereunder) or the enforcement of any of
the terms hereof or of any such other
instruments, documents or agreements,
provided that no Bank shall be liable for
any of the foregoing to the extent they
arise from the gross negligence or
willful misconduct of the party to be
indemnified.
f. Non-Reliance on Agent and
other Banks. Each Bank agrees that it
has, independently and without reliance
on the Agent or any other Bank, and based
on such documents and information as it
has deemed appropriate, made its own
credit analysis of the Borrower and its
own decision to enter into this Agreement
and that it will, independently and
without reliance upon the Agent or any
other Bank, and based on such documents
and information as it shall deem
appropriate at the time, continue to make
its own analysis and decisions in taking
or not taking action under this
Agreement. The Agent shall not be
required to keep itself informed as to
the performance or observance by the
Borrower of this Agreement or any other
instrument, document or agreement
referred to or provided for herein or to
inspect the properties or books of the
Borrower. Except for notice, reports and
other documents and information expressly
required to be furnished to the Banks by
the Agent hereunder, the Agent shall not
have any duty or responsibility to
provide any Bank with any credit or other
information concerning the affairs,
financial condition or business of the
Borrower (or any of its Affiliates) which
may come into the possession of the Agent
or any of its Affiliates.
g. Failure to Act. Except for
action expressly required of the Agent
hereunder, the Agent shall in all cases
be fully justified in failing or refusing
to act hereunder unless it shall receive
further assurances to its satisfaction
from the Banks of their indemnification
obligations under Section 12.5 hereof
against any and all liability and expense
which may be incurred by it by reason of
taking or continuing to take any such
action.
h. Resignation or Removal of
Agent; Co-Agent.
i. Subject to the appointment and acceptance
of a successor Agent as provided below, the Agent
may resign at any time by giving notice thereof to
the Banks and the Borrower and the Agent may be
removed at any time with cause by the Majority
Banks. Upon any such resignation or removal, the
Majority Banks shall have the right to appoint a
successor Agent. If no successor Agent shall have
been so appointed by the Majority Banks and shall
have accepted such appointment with 30 days after
the retiring Agent's giving of notice of
resignation or the Majority Bank's removal of the
retiring Agent, the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which
shall be a bank which has a combined capital and
surplus of at least Five Hundred Million Dollars
($500,000,000). Upon the acceptance of any
appointment as Agent, such successor Agent shall
thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations
hereunder. After any retiring Agent's resignation
or removal hereunder as Agent, the provisions of
this Section 12 shall continue in effect for its
benefit in respect of any actions taken or omitted
to be taken by it while it was acting as the
Agent.
ii. In the event that applicable law imposes
any restrictions on the identity of an agent such
as the Agent or requires the appointment of any
co-agent in connection therewith, the Agent may,
in its discretion, for the purpose of complying
with such restrictions, appoint one or more co-agents
hereunder. Any such Co-Agent(s) shall have
the same rights, powers, privileges and
obligations as the Agent and shall be subject to
and entitled to the benefits of all provisions of
this Agreement and the Loan Documents relative to
the Agent. In addition to any rights of the
Majority Banks set forth in subsection (a) above,
any such Co-Agent may be removed at any time by
the Agent.
13. MISCELLANEOUS
a. Intellectual Property License.
Agent is hereby granted a non-exclusive,
assignable license or other right to use,
without charge, Borrower's copyrights,
patents, patent applications, designs,
rights of use, or any property of a
similar nature, whether owned by Borrower
or with respect to which Borrower has
rights under license, sublicense or other
agreements (collectively, the
"Intellectual Property Rights"), to the
extent such Intellectual Property Rights
are necessary for the proper operation
of, or are used by Borrower in the
operation of, the Collateral or the
Mortgaged Property. Such license may
only be used in connection with the
operation of the Collateral and the
Mortgaged Property, shall terminate upon
the payment in full of the Obligations at
any time when there does not exist an
Event of Default, and shall become
perpetual (and shall survive the
termination of this Agreement) upon the
transfer of any of the Collateral or the
Mortgaged Property in foreclosure of the
Agent's Liens in such Collateral or
Mortgaged Property, whether such
foreclosure is by right of private sale,
judicial sale, deed in lieu, retention in
satisfaction of the Obligations or
otherwise. Borrower agrees, at the
request of the Agent or the Majority
Banks, to take any and all actions and to
execute, deliver and/or record any and
all instruments, documents, licenses or
agreements, as may be necessary or
appropriate to confirm the foregoing
license and/or evidence such license in
any public record.
b. Waiver. Each and every right
and remedy granted to the Agent and the
Banks under this Agreement, or any other
document delivered hereunder or in
connection herewith or allowed it by law
or in equity, shall be cumulative and may
be exercised from time to time. No
failure on the part of the Agent or any
Bank to exercise, and no delay in
exercising, any right or remedy shall
operate as a waiver thereof, nor shall
any single or partial exercise by the
Agent or any Bank of any right or remedy
preclude any other or future exercise
thereof or the exercise of any other
right or remedy. No waiver by the Agent
or the Banks of any Default or Event of
Default shall constitute a waiver of any
subsequent Default or Event of Default.
c. Survival. All
representations, warranties and covenants
made herein shall survive the execution
and delivery of all of the Loan
Documents. The terms and provisions of
this Agreement shall continue in full
force and effect until all of the
Obligations have been indefeasibly paid
in full; provided, further, that
Borrower's obligations under Sections
3.6, 3.7, 13.6 and 13.14 shall survive
the termination of this Agreement.
d. Assignments; Successors and
Assigns.
i. This Agreement is a continuing obligation
and binds, and the benefits hereof shall inure to,
Borrower, Agent and each Bank and their respective
successors and assigns provided, that Borrower may
not transfer or assign any or all of its rights or
obligations hereunder without the prior written
consent of all of the Banks.
ii. Any Bank may, in the ordinary course of
its commercial banking business and in accordance
with the applicable law, at any time sell to one
or more banks or other entities ("Participants")
participating interests in any Loans owing to such
Bank, any of the Notes held by such Bank, or any
other interests of such Bank hereunder. Borrower
agrees that each Participant shall be entitled to
the benefits of Section 3.7 and 13.14 with respect
to its participation; provided that no Participant
shall be entitled to receive any greater amount
pursuant to such Section than such Bank would have
been entitled to receive in respect of the amount
of the participation transferred by such Bank to
such Participant had no such transfer occurred.
iii. Each Bank may, in the ordinary
course of its commercial banking business
and in accordance with applicable law, at
any time assign, pursuant to an
assignment substantially in the form of
Exhibit F attached hereto and
incorporated herein by reference, without
the Borrower's consent, to one or more
banks having unimpaired capital and
surplus of $250,000,000 or more or may
assign with the Borrower's consent (which
shall not be unreasonably withheld) to
any other entities (in either case,
"Assignees") all or any part of any Loans
owing to such Bank, any of the Notes held
by such Bank, or any other interest of
such Bank hereunder; provided, however,
that any such assignment shall be in a
minimum principal amount of Two Million
Dollars ($2,000,000). Borrower and the
Banks agree that to the extent of any
assignment the Assignee shall be deemed
to have the same rights and benefits with
respect to Borrower under this Agreement
and any of the Notes as it would have had
if it were a Bank hereunder on the date
hereof and the assigning Bank shall be
released from its obligations hereunder,
to the extent of such assignment.
iv. Borrower authorizes each Bank to disclose
to any Participant or Assignee ("Transferee") and
any prospective Transferee any and all financial
information in such Bank's possession concerning
Borrower which has been delivered to such Bank by
Borrower pursuant to this Agreement or which has
been delivered to such Bank by Borrower in
connection with such Bank's credit evaluation of
Borrower prior to entering into this Agreement.
v. Any Bank shall be entitled to have any
Note held by it subdivided in connection with a
permitted assignment of all or any portion of such
Note and the respective Loans evidenced thereby
pursuant to Section 13.4(c) above. In the case of
any such subdivision, the new Note (the "New
Note") issued in exchange for a Note (the "Old
Note") previously issued hereunder shall be
substantially in the form of Exhibit B hereto,
shall be dated the date of such assignment, shall
be otherwise duly completed and shall bear a
legend, to the effect that such New Note is issued
in exchange for such Old Note and that the
indebtedness represented by such Old Note shall
not have been extinguished by reason of such
exchange. Without limiting the obligations of
Borrower under Section 13.6 hereof, the Banks
shall use reasonable best efforts to ensure that
any such assignment does not result in the
imposition of any intangibles, documentary stamp
and other taxes, if any, which may be payable in
connection with the execution and delivery of any
such New Note.
vi. If, pursuant to this subsection, any
interest in this Agreement or any of the Notes is
transferred to any Transferee which is organized
under the laws of any jurisdiction other than the
United States or any State thereof, the Bank
making such transfer shall cause such Transferee,
concurrently with the effectiveness of such
transfer, (i) to represent to such Bank (for the
benefit of such Bank and Borrower) that under
applicable law and treaties no taxes will be
required to be withheld by such Bank or Borrower
with respect to any payments to be made to such
Transferee hereunder or in respect of the Loans,
(ii) to furnish to such Bank and Borrower either
U.S. Internal Revenue Service Form 4224 or U.S.
Internal Revenue Service Form 1001 (wherein such
Transferee claims entitlement to complete
exemption from U.S. federal withholding tax on all
payments hereunder) and (iii) to agree (for the
benefit of such Bank and Borrower) to provide such
Bank and Borrower a new Form 4224 or Form 1001
upon the obsolescence of any previously delivered
form and comparable statements in accordance with
applicable U.S. laws and regulations and
amendments duly executed and completed by such
Transferee, and to comply from time to time with
all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
e. Counterparts. This Agreement
may be executed in two or more
counterparts, each of which when fully
executed shall be an original, and all of
said counterparts taken together shall be
deemed to constitute one and the same
agreement. Any signature page to this
Agreement may be witnessed by a telecopy
or other facsimile of any original
signature page and any signature page of
any counterpart hereof may be appended to
any other counterpart hereof to form a
completely executed counterpart hereof.
f. Expense Reimbursement.
Borrower agrees to reimburse the Agent
for all of the Agent's expenses incurred
in connection with the development,
preparation, execution, delivery,
modification, regular review and
administration of this Agreement, the
Notes and the other Loan Documents,
including audit costs, appraisal costs,
the cost of searches, filings and filing
fees, taxes and the fees and
disbursements of Agent's attorneys,
Messrs. Xxxxxxxx Xxxxxxx, and any counsel
retained by them, and all costs and
expenses incurred by the Agent and the
Banks (including attorney's fees and
disbursements) to: (i) commence, defend
or intervene in any court proceeding;
(ii) file a petition, complaint, answer,
motion or other pleading, or to take any
other action in or with respect to any
suit or proceeding (bankruptcy or
otherwise) relating to the Collateral,
the Mortgaged Property or this Agreement,
the Deed of Trust, the Second Deed of
Trust, the Third Deed of Trust, the Notes
or any of the other Loan Documents;
(iii) protect, collect, lease, sell, take
possession of, or liquidate any of the
Collateral or the Mortgaged Property;
(iv) attempt to enforce any Lien in any
of the Collateral or the Mortgaged
Property or to seek any advice with
respect to such enforcement; and
(v) enforce any of the Agent's and the
Banks' rights to collect any of the
Obligations. Borrower also agrees to
pay, and to save harmless the Agent and
the Banks from any delay in paying, any
intangibles, mortgage, documentary stamp
and other taxes, if any, which may be
payable in connection with the execution
and delivery of this Agreement, the Notes
or any of the other Loan Documents, or
the recording of any thereof, or in any
modification hereof or thereof.
Additionally, Borrower shall pay to the
Agent and each Bank on demand any and all
fees, costs and expenses which the Agent
or such Bank pays to a bank or other
similar institution arising out of or in
connection with (a) the forwarding to
Borrower or any other Person on
Borrower's behalf, by the Agent or such
Bank of proceeds of any Loan and (b) the
depositing for collection by of any check
or item of payment received by or
delivered to the Agent or such Bank on
account of the Obligations. Borrower's
obligations under this Section shall
survive the termination of this Agreement
and the repayment of the Obligations.
g. Severability. If any
provision of this Agreement or any of the
Loan Documents or the application thereof
to any party thereto or circumstances
shall be invalid or unenforceable to any
extent, the remainder of this Agreement
or such Loan Documents and the
application of such provisions to any
other party thereto or circumstance shall
not be affected thereby and shall be
enforced to the greatest extent permitted
by law.
h. Notices. All notices,
requests, demands and other
communications under this Agreement shall
be in writing and shall be deemed to have
been given or made when (a) delivered by
hand, (b) sent by telex or telecopier
(with receipt confirmed), provided that a
copy is mailed by certified mail, return
receipt requested, or (c) except as
otherwise provided herein, deposited in
the mail, registered or certified mail,
postage prepaid, addressed to such party
at the "Address for Notices" specified
below its name on the signature pages
hereto or to such other address as may be
designated hereafter in writing by the
respective parties hereto.
i. Entire Agreement - Amendment.
This Agreement and the Loan Documents
constitute the entire agreement between
the parties hereto with respect to the
subject matter hereof and supersede all
prior negotiations, understandings and
agreements between such parties in
respect of such subject matter,
including, without limitation, as set
forth in that certain proposal letter
dated June 9, 1995 from Creditanstalt to
Borrower, accepted by Borrower June 13,
1995. Neither this Agreement nor any
provision hereof may be changed, waived,
discharged, modified or terminated except
pursuant to a written instrument signed
by Borrower, the Agent and the Majority
Banks or by the Borrower and the Agent
acting with the consent of the Majority
Banks; provided, however, that no such
amendment, waiver, discharge,
modification or termination shall, except
pursuant to an instrument signed by
Borrower, the Agent and all of the Banks
or by the Borrower and the Agent acting
with the consent of all of the Banks,
extend the date fixed for the payment of
principal of, or interest on, any Loan;
reduce the amount of any payment of
principal of, or the rate of interest on,
any Loan (except for changes in interest
rates pursuant to Section 3.1(b) hereof);
reduce any fee payable hereunder; alter
the terms of this Section 13.9; release
any collateral securing the Loans, or any
portion thereof; change the Loan
Percentage of any Bank; or amend the
definitions of the term "Majority Banks"
set forth in Section 1.1 hereof;
provided, further, that any amendment,
waiver, discharge modification or
termination of any provision of
Section 12 hereof, or which increases the
obligations of the Agent hereunder, shall
require the written consent of the Agent.
j. Time of the Essence. Time is
of the essence in this Agreement and the
other Loan Documents.
k. Interpretation. No provision
of this Agreement shall be construed
against or interpreted to the
disadvantage of any party hereto by any
court or other governmental or judicial
authority by reason of such party having
or being deemed to have structured or
dictated such provision.
x. Xxxxx Not a Joint Venturer.
Neither this Agreement nor any
agreements, instruments, documents or
transactions contemplated hereby
(including the Loan Documents) shall in
any respect be interpreted, deemed or
construed as making the Agent or the
Banks a partner or joint venturer with
Borrower or as creating any similar
relationship or entity, and Borrower
agrees that it will not make any
assertion, contention, claim or
counterclaim to the contrary in any
action, suit or other legal proceeding
involving the Agent or the Banks and
Borrower.
m. Cure of Defaults by Banks.
If, hereafter, Borrower defaults in the
performance of any duty or obligation to
the Agent and the Banks hereunder, the
Agent or any Bank may, at its option, but
without obligation, cure such default and
any costs, fees and expenses incurred by
the Agent or such Bank in connection
therewith including, without limitation,
for payment on mortgage or note
obligations, for the purchase of
insurance, the payment of taxes and the
removal or settlement of Liens and
claims, shall be included in the
Obligations and be secured by the
Collateral and the Mortgaged Property.
n. Indemnity. In addition to any
other indemnity provided for herein, or
in the other Loan Documents, Borrower
hereby indemnifies the Agent and each
Bank from and against any and all
liabilities, obligations, losses,
damages, penalties, actions, judgments,
suits, costs, expenses or disbursements
of any kind or nature whatsoever
(including, without limitation, fees and
disbursements of counsel) which may be
imposed on, incurred by, or asserted
against the Agent or such Bank in any
litigation, proceeding or investigation
instituted or conducted by any
governmental agency or instrumentality or
any other Person (other than Borrower)
with respect to any aspect of, or any
transaction contemplated by, or referred
to in, or any matter related to, this
Agreement or the other Loan Documents, or
the other transactions contemplated
hereby, whether or not Agent or such Bank
is a party thereto, except to the extent
that any of the foregoing arises out of
gross negligence or willful misconduct of
Agent or such Bank, as the case may be.
Borrower's obligations under this Section
shall survive the termination of this
Agreement and the repayment of the
Obligations.
o. Attorney-in-Fact. Borrower
hereby designates, appoints and empowers
Agent irrevocably as its
attorney-in-fact, at Borrower's cost and
expense, to do in the name of Borrower
any and all actions which Agent may deem
necessary or advisable to carry out the
terms hereof upon the failure, refusal or
inability of Borrower to do so, and
Borrower hereby agrees to indemnify and
hold Agent harmless from any costs,
damages, expenses or liabilities arising
against or incurred by the Agent in
connection therewith except to the extent
that any of such costs, damages, expenses
or liabilities arise out of Agent's gross
negligence or willful misconduct.
p. Sole Benefit. The rights and
benefits set forth in this Agreement and
in the other Loan Documents are for the
sole and exclusive benefit of the parties
thereto and may be relied upon only by
them.
q. Termination Statements.
Borrower acknowledges and agrees that it
is Borrower's intent that all financing
statements filed hereunder shall remain
in full force and effect until this
Agreement shall have been terminated in
accordance with the provisions hereof,
even if, at any time or times prior to
such termination, no loans or Loans shall
be outstanding hereunder. Accordingly,
Borrower waives any right which it may
have under Section 9-404(1) of the UCC to
demand the filing of termination
statements with respect to the
Collateral, and agrees that the Agent
shall not be required to send such
termination statements to Borrower, or to
file them with any filing office, unless
and until this Agreement shall have been
terminated in accordance with its terms
and all Obligations paid in full in
immediately available funds. Upon such
termination and payment in full, Agent
shall execute appropriate termination
statements and deliver the same to
Borrower.
r. Governing Law; Jurisdiction.
THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER,
SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK (WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW). BORROWER HEREBY (A)
SUBMITS TO THE NONEXCLUSIVE JURISDICTION
OF THE UNITED STATES DISTRICT COURT FOR
THE SOUTHERN DISTRICT OF NEW YORK AND OF
ANY NEW YORK STATE COURT SITTING IN NEW
YORK CITY FOR THE PURPOSES OF ALL LEGAL
PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS AGREEMENT AND (B) IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF THE VENUE
OF ANY SUCH PROCEEDING BROUGHT IN SUCH A
COURT OR ANY CLAIM THAT ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
NOTWITHSTANDING ANYTHING HEREIN TO THE
CONTRARY, NOTHING HEREIN SHALL LIMIT THE
RIGHT OF THE AGENT OR THE BANKS TO BRING
PROCEEDINGS AGAINST BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION.
s. Waiver of Jury Trial.
BORROWER, AGENT AND EACH BANK EACH HEREBY
KNOWINGLY, INTELLIGENTLY AND
INTENTIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY
AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LEGAL PROCEEDING
BASED ON OR ARISING OUT OF, UNDER, IN
CONNECTION WITH, OR RELATING TO THIS
AGREEMENT, ANY OF THE NOTES, ANY OF THE
OTHER LOAN DOCUMENTS, THE TRANSACTIONS
CONTEMPLATED HEREBY, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN), OR ACTIONS OF
BORROWER, AGENT OR ANY BANK. THIS
PROVISION IS A MATERIAL INDUCEMENT FOR
THE BANKS MAKING THE LOANS TO BORROWER.
IN WITNESS WHEREOF, each of Borrower, the Agent and the
Banks has set its hand and seal as of the day and year first above
written.
"BORROWER"
PILGRIM'S PRIDE CORPORATION
By: Xxxxxx Xx Xxxxxxx
Chief Executive Office
Attest: Xxxxxxxx X. Xxxxxx
Chief Financial Officer
[CORPORATE SEAL]
Address for Notices:
Pilgrim's Pride Corporation
000 Xxxxx Xxxxx
X.X. Xxx 00
Xxxxxxxxx, Xxxxx 00000
Attn: Xx. Xxxxxxxx X. Xxxxxx
Telecopy Number: (000) 000-0000
with a copy to:
Xxxxxx & Carlton
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telecopy Number: (000) 000-0000
"AGENT"
CREDITANSTALT-BANKVEREIN
By:Xxxxxx X. Xxxxxxxx
Senior Vice President
By:Xxxxxx X. Lensgras
Senior Associate
Address for Notices:
Creditanstalt-Bankverein
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X'Xxxx
Telecopy Number: (000) 000-0000
with copies to:
Creditanstalt-Bankverein
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx/Xxxxxx X. Xxxxxxx
Telecopy Number: (000) 000-0000
and
Xxxxxxxx Xxxxxxx
NationsBank Plaza, Suite 5200
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
Loan Percentage
"BANKS"
100%
CREDITANSTALT-BANKVEREIN
By: Xxxxxx X. Xxxxxxxx
Senior Vice President
By: Xxxxxx X. Lensgras
Senior Associate
Address for Notices:
Creditanstalt-Bankverein
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X'Xxxx
Telecopy Number: (000) 000-0000
with copies to:
Creditanstalt-Bankverein
Xxx Xxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx/Xxxxxx X. Xxxxxxx
Telecopy Number: (000) 000-0000
and
Xxxxxxxx Xxxxxxx
NationsBank Plaza, Suite 5200
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Esq.
Telecopy Number: (000) 000-0000
