EXHIBIT 10.1
SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
by and between
NATIONAL BEEF PACKING COMPANY, LLC,
VARIOUS ISSUERS AND LENDERS,
COÖPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND", NEW YORK BRANCH,
as Documentation Agent
and
COBANK, ACB, as Lead Arranger,
Syndication Agent, Swing Line Lender
and Administrative Agent
Dated as of July 25, 2007
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS......................................................2
1.1 Terms Defined in Colorado Uniform Commercial Code...................2
1.2 Defined Terms.......................................................3
1.3 Accounting Terms...................................................24
ARTICLE II LOANS, SWING LINE AND LETTERS OF CREDIT.........................24
2.1 Loan Facilities....................................................24
2.1.1 Line of Credit............................................24
2.1.2 Term Loan.................................................25
2.1.3 Swing Line Loans..........................................25
2.1.4 Borrowing Procedures......................................27
2.1.5 General Terms regarding the Notes, the Loans and the
Swing Line Loans..........................................29
2.2 Letters of Credit..................................................30
ARTICLE III INTEREST........................................................32
3.1 Interest...........................................................32
3.2 Voluntary Conversion of Advance....................................34
ARTICLE IV PAYMENTS; PREPAYMENTS; ETC......................................34
4.1 Payment of Loans and Swing Line Loans..............................34
4.2 Optional Prepayments of the Loans..................................35
4.3 Term Loan Installments.............................................35
4.4 Mandatory Prepayments of Notes.....................................35
4.5 Termination of the Line of Credit Loan Commitments.................36
ARTICLE V LIBOR RATE LOANS; INCREASED COSTS; TAXES, ETC...................36
5.1 LIBOR Rate Advances................................................36
5.2 Increased Costs....................................................37
5.3 Funding Losses.....................................................37
5.4 Capital Adequacy Requirements......................................38
5.5 Taxes..............................................................39
ARTICLE VI FEES............................................................41
6.1 Non-Use Fee........................................................41
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6.2 LC Fees............................................................41
6.3 Calculation of Fees................................................41
6.4 Fees Not Interest; Nonpayment......................................41
ARTICLE VII REPRESENTATIONS AND WARRANTIES..................................42
7.1 Judgments, Claims Litigation and Proceedings.......................42
7.2 Contract Defaults and Disputes.....................................42
7.3 Licenses, Patents, Etc.............................................42
7.4 Title to Assets....................................................42
7.5 Tax Liabilities....................................................43
7.6 Indebtedness and Producer Payables.................................43
7.7 Other Fictitious Names.............................................43
7.8 Affiliates.........................................................43
7.9 Environmental Matters..............................................44
7.10 Bank Accounts......................................................44
7.11 Other Agreements or Restrictions...................................44
7.12 [Intentionally Omitted]............................................45
7.13 Existence..........................................................45
7.14 Authority..........................................................45
7.15 Binding Effect.....................................................45
7.16 Correctness of Financial Statements................................45
7.17 Employee Controversies.............................................46
7.18 Compliance with Laws and Regulations...............................46
7.19 Solvency...........................................................46
7.20 ERISA Matters......................................................46
7.21 Margin Security....................................................47
7.22 Investment Company Act Not Applicable..............................47
7.23 [Intentionally Omitted]............................................47
7.24 No Consent.........................................................47
7.25 Full Disclosure....................................................48
7.26 Intellectual Property..............................................48
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7.27 Compliance with Federal Food Security Act..........................48
7.28 Survival of Warranties.............................................49
7.29 CoBank Equity Interests............................................49
ARTICLE VIII CONDITIONS......................................................49
8.1 Conditions to the Restatement Date and the Initial Borrowing.......49
8.2 Conditions Precedent to All Borrowings, Conversions, Roll Overs and
Issuances of Letters of Credit.....................................51
ARTICLE IX AFFIRMATIVE COVENANTS...........................................52
9.1 Financial Statements...............................................52
9.2 Conduct of Business................................................53
9.3 Maintenance of Properties..........................................54
9.4 Liability Insurance................................................54
9.5 Property Insurance.................................................54
9.6 Fixed Charge Coverage Ratio........................................55
9.7 Pension Plans......................................................55
9.8 Notice of Suit, Adverse Change, ERISA Event or Default.............55
9.9 [Intentionally Omitted]............................................56
9.10 Books and Records; Separate Existence..............................56
9.11 Laws and Obligations...............................................56
9.12 Environmental Laws.................................................56
9.13 Trade Accounts Payable and Producer Payables.......................57
9.14 Compliance with National Security Laws.............................57
9.15 Post Closing Matters...............................................57
ARTICLE X NEGATIVE COVENANTS..............................................58
10.1 Encumbrances.......................................................58
10.2 Consolidations, Mergers or Acquisitions............................59
10.3 Deposits, Investments, Advances or Loans...........................59
10.4 Indebtedness.......................................................59
10.5 Guarantees and Other Contingent Obligations........................60
10.6 Disposition of Property............................................60
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(Continued)
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10.7 Capital Investment Limitations.....................................61
10.8 ERISA Matters......................................................61
10.9 [Intentionally Omitted]............................................61
10.10 Equity Distributions...............................................61
10.11 Amendment of Organizational Documents..............................61
10.12 Lease Limitations..................................................61
10.13 Use of Other Fictitious Names......................................62
10.14 Prepayment of Debt.................................................62
10.15 Fiscal Year........................................................62
10.16 Limitations on Bank Accounts.......................................62
10.17 Use of Trademarks..................................................62
10.18 Amendments of Other Documents......................................62
10.19 Ownership of Cattle and Deposits on Cattle with Feeders............63
10.20 Enforcement of Certain Documents...................................63
ARTICLE XI DEFAULT REMEDIES................................................63
11.1 Acceleration.......................................................63
11.2 Other Remedies.....................................................64
ARTICLE XII THE AGENT.......................................................64
12.1 Authorization and Action...........................................64
12.2 Agent's Reliance, Etc..............................................65
12.3 Notices of Defaults................................................65
12.4 The Agent as a Lender, Affiliates..................................66
12.5 Non Reliance on Agent and Other Lenders............................66
12.6 Indemnification of the Agent.......................................66
12.7 Successor Agent....................................................67
12.8 Verification of Borrowing Notices..................................67
12.9 Action Upon Instructions of the Lenders............................68
12.10 Action Upon Request of the Borrower................................68
12.11 Additional Functions of Certain Lenders............................69
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ARTICLE XIII MISCELLANEOUS...................................................69
13.1 Timing of Payments.................................................69
13.2 Attorneys' Fees and Costs..........................................69
13.3 Expenditures by the Agent..........................................70
13.4 The Agent's Costs as Additional Liabilities........................70
13.5 Indemnification....................................................70
13.6 Inspection.........................................................72
13.7 Examination of Banking Records.....................................73
13.8 Governmental Reports...............................................73
13.9 Reliance by the Agent, the Issuers and the Lenders.................73
13.10 Parties............................................................73
13.11 Applicable Law; Severability.......................................74
13.12 SUBMISSION TO JURISDICTION; WAIVER OF BOND AND TRIAL BY JURY.......74
13.13 Application of Payments............................................74
13.14 Marshaling; Payments Set Aside.....................................76
13.15 Section Titles.....................................................76
13.16 Continuing Effect..................................................76
13.17 No Waiver..........................................................77
13.18 Notices............................................................77
13.19 Maximum Interest...................................................78
13.20 Representations by the Lenders and Swing Line Lender...............79
13.21 Counterparts and Facsimile Signatures..............................79
13.22 Set-off............................................................79
13.23 Assignments and Participation......................................80
13.24 Loan Agreement Controls............................................83
13.25 Obligations Several................................................83
13.26 Pro Rata Treatment.................................................83
13.27 Confidentiality....................................................84
13.28 Independence of Covenants..........................................84
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13.29 Amendments and Waivers.............................................84
13.30 Binding Effect.....................................................85
13.31 FINAL AGREEMENT....................................................85
13.32 Water Rights Acquisition...........................................85
13.33 USA Patriot Act Notice.............................................86
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List of Exhibits
Exhibit 1A Lender Commitment Amounts
Exhibit 1B Borrowing Base Calculation
Exhibit 1C Borrowing Base Certificate
Exhibit 2A Line of Credit Note
Exhibit 2B Term Note
Exhibit 2C Swing Line Note
Exhibit 3A(i) Account Debtors of Borrower
Exhibit 3B(i) Borrower's Inventory Locations
Exhibit 7A Litigation
Exhibit 7B Material Contract Defaults
Exhibit 7C Intellectual Property
Exhibit 7D Existing Liens
Exhibit 7E Tax Liability Issues
Exhibit 7F Indebtedness
Exhibit 7G Prior Names
Exhibit 7H Affiliates
Exhibit 7I Environmental
Exhibit 7J Bank Accounts
Exhibit 7K Other Agreements
Exhibit 7L Intellectual Property Litigation
Exhibit 7.20(c) ERISA Issues
Exhibit 8A List of Closing Documents
Exhibit 9A Compliance Certificate
Exhibit 9B Property Insurance
Exhibit 13A Form of Assignment
Exhibit 13B List of Farm Credit System Participants
Exhibit 14B Form of Voting Participant Notice and Consent
SIXTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS SIXTH AMENDED AND RESTATED CREDIT AGREEMENT (as amended, modified,
supplemented, renewed or restated from time to time, this "Agreement") is made
as of July 25, 2007, by and between NATIONAL BEEF PACKING COMPANY, LLC, a
Delaware limited liability company (together with its successors as permitted
herein, the "Borrower"), the lenders from time to time party hereto
(collectively, the "Lenders" and individually, a "Lender"), COÖPERATIEVE
CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND", NEW YORK BRANCH,
("Rabobank") as Documentation Agent, and COBANK, ACB, an agricultural credit
bank ("CoBank"), as Lead Arranger, Syndication Agent, Swing Line Lender and
Administrative Agent for the Lenders, the Issuers and the Swing Line Lender
hereunder (in its capacity as Administrative Agent, together with its successors
and assigns in such capacity, the "Agent").
RECITALS
WHEREAS, the Borrower, Rabobank, and the Agent, and the lenders from time
to time party thereto (collectively, the "Existing Lenders") are parties to a
Fifth Amended and Restated Credit Agreement dated as of May 30, 2006, as amended
by a First Amendment to Fifth Amended and Restated Credit Agreement dated as of
March 21, 2007 (as so amended, together with its predecessor agreements, the
"Existing Credit Agreement"), pursuant to which the Existing Lenders have
extended certain revolving credit loans and term loans to the Borrower;
WHEREAS, the Borrower has requested that the Existing Lenders and certain
new Lenders increase and extend the Line of Credit Loan facility in the Existing
Credit Agreement, and that other changes be made to the terms of the Existing
Credit Agreement; and
WHEREAS, as of and on, but subject to the occurrence of, the Restatement
Date, the Existing Line of Credit Notes will be extended and renewed by the Line
of Credit Notes and the Existing Credit Agreement shall be amended and restated
as set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the terms and
conditions contained in this Agreement, and for any loans or extensions of
credit or other financial accommodations at any time made to or for the benefit
of the Borrower by the Agent or the Lenders, the parties hereto agree that as of
and on, but subject to the occurrence of, the Restatement Date, the Existing
Credit Agreement shall be amended and restated in its entirety to read as
follows:
ARTICLE I
DEFINITIONS
1.1 Terms Defined in Colorado Uniform Commercial Code. All capitalized
terms contained in this Agreement or any of the other Financing Documents which
are not specifically defined herein or therein shall have the meanings set forth
in the Uniform Commercial Code of Colorado ("Code") to the extent the same are
used or defined therein, specifically including, but not limited to the
following: Accounts, Account Debtor, Chattel Paper, Commercial Tort Claims,
Commodity Accounts, Commodity Contracts, Deposit Accounts, General Intangibles,
Goods,
Investment Property, Instruments, Letter of Credit Rights, Money, Payment
Intangibles, Securities Accounts and Tangible Chattel Paper.
1.2 Defined Terms.
When used herein, the following capitalized terms shall have the meanings
indicated, whether used in the singular or the plural:
"Advance" means any portion of the outstanding Line of Credit Loans or Term
Loans by a Lender as to which one of the available interest rate options and, if
pertinent, an Interest Period, is applicable. An Advance may be a Base Rate
Advance or a LIBOR Rate Advance.
"Affiliate" means any Person: (a) that directly or indirectly, through one
or more intermediaries, controls or is controlled by, or is under common control
with, the Borrower; (b) that directly or beneficially owns or holds ten percent
(10%) or more of any class of the Borrower's equity; (c) ten percent (10%) or
more of the equity interest of which is owned directly or beneficially or held
by the Borrower; or (d) that is a member of the Borrower.
"Agent" has the meaning set forth in the introduction hereof and shall
include any successor agent which has been appointed in accordance with Section
12.7.
"Agent's Letter" means the letter agreement between the Borrower and the
Agent dated June 26, 2007.
"Applicable Margin" means:
(a) with respect to Line of Credit Loans, Swing Line Loans, LC Fees or
Non-Use Fees, as the case may be, the rates per annum set forth below for
the then applicable "Borrowing Base Availability Level" referenced in the
first column below (each being called a "Borrowing Base Availability
Level"):
---------------------- -------------------------- -------------------------- --------------- ----------- -------------
Borrowing Base Rate Advance LIBOR
Base Average Amount of Line of Credit Loan Rate Line
Availability Borrowing Base and Swing Line of Credit Non-Use
Level Availability Loans Loan LC Fees Fee
---------------------- -------------------------- -------------------------- --------------- ----------- -------------
Greater than or equal to
Xxxxx 0 $150,000,000 0% 1.25% 1.25% 0.375%
---------------------- -------------------------- -------------------------- --------------- ----------- -------------
Less than $150,000,000
but greater than or
Level 2 equal to $50,000,000 0% 1.50 % 1.50% 0.250%
---------------------- -------------------------- -------------------------- --------------- ----------- -------------
Level 3 Less than $50,000,000 0% 1.75% 1.75% 0.250%
---------------------- -------------------------- -------------------------- --------------- ----------- -------------
The initial Borrowing Base Availability Level shall be Level 2. The Agent
will review each of the Borrower's Borrowing Base Certificates to determine the
daily average amount of Borrowing Base Availability during the period starting
on the day after the Borrowing Base
National Beef Packing Company Credit Agreement 3
measurement date referenced in the Borrower's immediately preceding Borrowing
Base Certificate and ending on the Borrowing Base measurement date referenced in
the Borrower's current Borrowing Base Certificate. Any change in the Borrowing
Base Availability will be effective five (5) days after receipt of the relevant
Borrowing Base Certificate; provided, however, that if any Borrower's Borrowing
Base Certificate is not delivered on a timely basis in accordance with Section
9.1, the Agent may, at its option, deem the Borrower's Borrowing Base
Availability Level to be Level 3 until ten (10) Business Days after the Agent's
receipt of such Borrowing Base Certificate; and
(b) with respect to Term Loans, the rates per annum set forth below
for the then applicable "Financial Performance Level" referenced in the
first column below (each being called a "Financial Performance Level"):
------------------------------- ---------------------------- ---------------------------- ----------------------------
Financial Funded Debt to Base Rate Advance
Performance Level EBITDA Ratio on Term Loan LIBOR Rate Term Loan
------------------------------- ---------------------------- ---------------------------- ----------------------------
Level 1 Greater than or equal to 0.25% 2.00%
3.50 to 1.00
------------------------------- ---------------------------- ---------------------------- ----------------------------
Level 2 Less than 3.50 to 1.00 0% 1.75%
------------------------------- ---------------------------- ---------------------------- ----------------------------
The initial Financial Performance Level shall be Level 1. The Agent will
review the Borrower's financial performance as of each fiscal quarter end, after
its receipt of the Borrower's financial statements and compliance certificate
for the relevant fiscal quarter. Any change in the Financial Performance Level
will be effective thirty (30) days after the Borrower's fiscal quarter end;
provided, however, that if the Borrower's financial statements and compliance
certificate for any fiscal quarter are not delivered to the Agent on a timely
basis, the Agent may, at its option, deem the Borrower's Financial Performance
Level to be Level 1 until ten (10) Business Days after the Agent's receipt of
such financial statements and compliance certificate.
Notwithstanding the foregoing, if at any time while any Commitment is in effect
or any of the Liabilities remain outstanding, any Borrowing Base Certificate,
financial statement or compliance certificate delivered by the Borrower is shown
to be inaccurate, and such inaccuracy, if it had been corrected prior to the
Borrower's delivery, would have caused the application of a higher Applicable
Margin (as defined by the foregoing paragraphs (a) and (b)) for any period than
the Applicable Margin that was actually applied for such period, then (i) within
five Business Days of discovery or notice of discovery of such inaccuracy the
Borrower shall deliver to the Agent for distribution to the Lenders a corrected
Borrowing Base Certificate, financial statement or compliance statement for such
period, (ii) the Applicable Margin for such period shall be recalculated and
applied as if the higher Applicable Margin had originally been applicable, and
(iii) within five Business Days of such recalculation the Borrower shall pay to
the Agent the additional amount of interest and fees owed as a result of such
higher Applicable Margin for such period to the extent accrued through the last
applicable payment date, and any subsequent payments required to be made on any
subsequent payment date shall be adjusted accordingly. Nothing contained in this
paragraph shall limit or otherwise prejudice any of the other rights and
remedies of the Agent or the Lenders under this Agreement.
National Beef Packing Company Credit Agreement 4
"Application" has the meaning set forth in Section 2.2(b) hereof.
"Assignee" has the meaning set forth in Section 13.23(a) hereof.
"Assignment and Acceptance" has the meaning set forth in Section 13.23(a)
hereof.
"Attributable Indebtedness" means, on any date, (a) in respect of any
capitalized lease of any Person, the capitalized amount thereof that would
appear on such Person's balance sheet prepared as of such date in accordance
with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized
amount of the remaining lease payments under the relevant lease that would
appear on such Person's balance sheet prepared as of such date in accordance
with GAAP if such lease were accounted for as a capitalized lease.
"Available Amount" means, at any time, an amount equal to (a) the aggregate
Line of Credit Loan Commitments minus (b) the sum of (i) the aggregate
outstanding principal amount of the Line of Credit Loans, (ii) the aggregate
outstanding amount of the LC Obligations and (iii) the aggregate outstanding
principal amount of all Swing Line Loans.
"Base Rate" means the greater of (a) the Prime Rate or (b) the Federal
Funds Rate plus one half of one percent (0.5%).
"Base Rate Advance" means an Advance with respect to which the interest
rate is determined by reference to the Base Rate.
"Xxxx of Sale" means that certain Xxxx of Sale dated as of December 1, 2004
from the Borrower to the City together with any and all amendments,
modifications, supplements, renewals or restatements thereof.
"Bond Documents" means, collectively, the Indenture, the Bonds, the Bond
Purchase Agreement, the Deed, the Xxxx of Sale, the Payment in Lieu of Tax
Agreement and the Lease.
"Bond Pledge Agreement" means that certain Bond Pledge Agreement dated
December 29, 2004, executed by the Borrower in favor of the Agent, and any and
all amendments, modifications, supplements, renewals or restatements thereof.
"Bond Purchase Agreement" means that certain Bond Purchase Agreement dated
as of December 1, 2004 between the City and the Borrower, together with any and
all amendments, modifications, supplements, renewals or restatements thereof.
"Bonds" means the Industrial Development Revenue Bonds (National Beef
Packing Company, LLC Project), Series 2004, issued by the City.
"Borrower" has the meaning set forth in the introduction hereof.
"Borrowing Base" means an amount determined as of the most recent date of
the Borrowing Base Certificate delivered pursuant to Section 9.1 and computed as
set forth in Exhibit 1B.
National Beef Packing Company Credit Agreement 5
"Borrowing Base Availability" means, at any time, an amount (if positive)
equal to (a) the Borrowing Base minus (b) the sum of (i) the aggregate
outstanding principal amount of the Line of Credit Loans, (ii) the aggregate
outstanding amount of the LC Obligations and (iii) the aggregate outstanding
principal amount of the Swing Line Loans.
"Borrowing Base Availability Level" has the meaning set forth in the
definition of Applicable Margin.
"Borrowing Base Certificate" means a certificate in substantially the form
of Exhibit 1C, signed as indicated thereon, setting forth the amount of the
Borrower's Borrowing Base.
"Borrowing Base Deficiency" means, at any time, the amount, if any, by
which (a) the sum of (i) the aggregate outstanding principal amount of the Line
of Credit Loans, (ii) the aggregate outstanding amount of the LC Obligations and
(iii) the aggregate outstanding principal amount of the Swing Line Loans exceeds
(b) the Borrowing Base.
"Brawley Beef" means Brawley Beef, LLC, a California limited liability
company.
"Brawley Beef Acquisition Documents" means, collectively, (a) the
Contribution Agreement and all disclosure schedules related thereto, and (b) the
documents, instruments and agreements referenced in Section 4.2 of the
Contribution Agreement.
"Business Day" means any day of the year, other than a Saturday or Sunday,
on which commercial banks in New York, New York and Denver, Colorado are not
required or authorized to close and, if such day relates to any LIBOR Rate
Advance, a day on which dealing in Dollar deposits is occurring among banks in
the London interbank market.
"Cash Equivalent Investments" means, at any time:
(a) any evidence of Indebtedness, maturing not more than one year
after such time, issued or guaranteed by the United States Treasury;
(b) commercial paper, maturing not more than nine months from the date
of issue, which is issued by
(i) a corporation (other than an Affiliate of the Borrower)
organized under the laws of any state of the United States or of the
District of Columbia and rated A-l by Standard & Poor's Rating
Services, a division of The McGraw Hill Companies, Inc. or P-l by
Xxxxx'x Investors Service, or
(ii) any Lender (or its holding company);
(c) any certificate of deposit or banker's acceptance, maturing not
more than one year after such time, which is issued by either
(i) a commercial banking institution that is a member of the
Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000 (or the equivalent
thereof in any other currency), or
National Beef Packing Company Credit Agreement 6
(ii) any Lender; or
(d) any repurchase agreement entered into with any Lender or other
commercial banking institution of the stature referred to in clause (c)(i)
which
(i) is secured by a fully perfected security interest in any
obligation of the type described in any of clauses (a) through (c);
and
(ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of
such Lender or other commercial banking institution thereunder.
"City" means the City of Dodge City, Kansas, a municipal corporation
organized under the law of the State of Kansas.
"Closing Date" means the date of this Agreement.
"CoBank" has the meaning set forth in the introduction hereof.
"Code" has the meaning set forth in Section 1.1 hereof.
"Collateral" means all real and personal property in which, pursuant to the
terms of the respective Security Documents, the Borrower or any third Person has
granted to the Agent a security interest or assigned to the Agent its right,
title and interest to secure the Liabilities; provided, however, that with
respect to any of the Security Documents executed and/or delivered after the
date of this Agreement, such property shall not become Collateral until such
Security Document has been executed and delivered to the Agent. The Borrower
acknowledges and agrees that all of its right, title and interest in and to the
Xxxxxxx Beef Acquisition Documents, the Intercompany Financing Documents and its
limited partnership interests in NBC constitute collateral under the Security
Documents.
"Collateral Accounts" means Deposit Accounts established and maintained in
accordance with Section 2.6 of the Security Agreement.
"Commitment" means, as to any Lender, such Lender's (a) Line of Credit Loan
Commitment, (b) obligation to purchase participations in LC Obligations, and/or
(c) obligation to purchase participations in Swing Line Loans, and, as the
context requires "Commitments" shall mean, collectively, such Commitments for
all the Lenders.
"Contribution Agreement" means that certain Contribution Agreement dated as
of May 19, 2006, by and between Xxxxxxx Beef, LLC, National Beef California, LP,
and National Beef Packing Company, LLC as guarantor.
"Deed" means that certain Kansas Special Warranty Deed dated as of December
1, 2004 from the Borrower to the City, together with any and all amendments,
modifications, supplements, renewals or restatements thereof.
National Beef Packing Company Credit Agreement 7
"Default" means the occurrence or existence of: (a) an event which, through
the passage of time or the service of notice or both, would (assuming no action
is taken by the Borrower or any other Person to cure the same) mature into a
Matured Default; or (b) an event which requires neither the passage of time nor
the service of notice to mature into a Matured Default.
"Default Rate" has the meaning set forth in Section 3.1(c) hereof.
"Dodge City Facilities" means the beef processing facilities located in
Dodge City, Kansas, as further described in the Kansas Mortgage.
"Dollars" and "$" mean lawful currency of the United States of America.
"EBITDA" means, for any period of determination, the consolidated net
income of the Borrower before provision for income taxes, interest expense
(including without limitation, implicit interest expense on capitalized leases),
depreciation, amortization and other noncash expenses or charges, excluding (to
the extent otherwise included): (a) nonoperating gains (including without
limitation, extraordinary or nonrecurring gains, gains from discontinuance of
operations and gains arising from the sale of assets other than Inventory or
property, plant and equipment) during the applicable period; and (b) similar
nonoperating losses during such period. Payments made under the Water Services
Agreement shall be treated as operating expenses for the purposes of calculating
EBITDA.
"Effective Date" means the "Effective Date" as defined in the Existing
Credit Agreement.
"Eligible Accounts" means Accounts which the Agent determines in the
exercise of the Agent's reasonable discretion are eligible for inclusion in the
Borrowing Base at any particular time. Without limiting the Agent's right to
determine that Accounts do not constitute Eligible Accounts, but without
duplication, the following Accounts shall not be Eligible Accounts: (a) all
Accounts which are at that time unpaid for a period exceeding twenty one (21)
days after the original invoice date of the original invoice related thereto,
except for Accounts which are covered by a letter of credit; (b) all Accounts
owing by an Account Debtor if more than twenty-five percent (25%) of the
Accounts owing by such Account Debtor are at that time unpaid for a period
exceeding that allowed by the preceding clause, except, in each case, Accounts
which are covered by a letter of credit in amount, form and substance
satisfactory to, and from an issuer acceptable to the Agent; (c)(i) those
Accounts, except Accounts owing from the Account Debtors listed on Exhibit
3A(i), of an Account Debtor, the aggregate face amount of which is in excess of
five percent (5%) of the aggregate face amount of all Eligible Accounts of all
Account Debtors (prior to eliminations based on concentration), (ii) those
Accounts of an Account Debtor listed on Exhibit 3A(i), the aggregate face amount
of which is in excess of ten percent (10%) of the aggregate face amount of all
Eligible Accounts of all Account Debtors (prior to eliminations based on
concentration), and (iii) those Accounts of Wal-Mart and Affiliates thereof
(Sam's Club, etc.), the aggregate face amount of which is in excess of fifteen
percent (15%) of the aggregate face amount of all Eligible Accounts of all
Account Debtors (prior to eliminations based on concentration), but in each case
only to the extent of such excess; (d) those Accounts owing from the United
States or any department, agency or instrumentality thereof unless the Borrower
shall have complied with the Assignment of Claims Act to the satisfaction of the
National Beef Packing Company Credit Agreement 8
Agent; (e) Accounts which arise out of transactions with Affiliates of the
Borrower, except Accounts owing from Beef Products, Inc. up to the aggregate
face amount of $4,000,000; (f) Accounts, except Accounts owing from the Account
Debtors listed on Exhibit 3A(i), of an Account Debtor that are located outside
the United States, unless such Accounts are covered by a letter of credit issued
or confirmed by a bank acceptable to the Agent; (g) Accounts which are or may be
subject to rights of setoff or counterclaim by the Account Debtor (to the extent
of the amount of such setoff or counterclaim); (h) Accounts in which the Agent
does not, for any reason, have a first priority perfected security interest; and
(i) Accounts which in the Agent's opinion may be subject to liens or conflicting
claims of ownership, whether such liens or conflicting claims are asserted or
could be asserted by any Person except for statutory liens or encumbrances
permitted by Section 10.1(a), (b) and (d). With regard to Accounts included in
the Borrowing Base by the Borrower in good faith, a determination by the Agent
that such Accounts are not Eligible Accounts in accordance with the foregoing
shall be effective on the third Business Day after notice thereof by the Agent
to the Borrower in accordance with Section 13.18.
"Eligible Inventory" means Inventory which the Agent determines in the
exercise of the Agent's reasonable discretion is eligible for inclusion in the
Borrowing Base at any particular time. Without limiting the Agent's right to
determine that Inventory does not constitute Eligible Inventory, but without
duplication, the following Inventory shall not be Eligible Inventory: (a)
Inventory deemed to be out-of-condition or otherwise unmerchantable by the
United States Department of Agriculture, any state's Department of Agriculture,
or any other Governmental Authority having regulatory authority over the
Borrower or any of the Borrower's assets or activities; (b) Inventory for which
a prepayment has been received; (c) Inventory in the possession of third
parties, unless it is Inventory: (i) at a location shown on Exhibit 3B, for
which the Agent has received a bailee letter satisfactory to the Agent, or (ii)
covered by negotiable warehouse receipts or negotiable bills of lading issued by
either: (A) a warehouseman licensed and bonded by the United States Department
of Agriculture or any state's Department of Agriculture, or (B) a recognized
carrier having an office in the United States and in a financial condition
reasonably acceptable to the Agent, which receipts or bills of lading designate
the Agent directly or by endorsement as the only Person to which or to the order
of which the warehouseman or carrier is legally obligated to deliver such Goods;
(d) Inventory in which the Agent does not, for any reason, have a first priority
perfected security interest; and (e) Inventory which in the Agent's opinion may
be subject to liens or conflicting claims of ownership, whether such liens or
conflicting claims are asserted or could be asserted by any Person except for
statutory liens or encumbrances permitted by Section 10.1(a), (b) and (d). With
regard to Inventory included in the Borrowing Base by the Borrower in good
faith, a determination by the Agent that such Inventory is not Eligible
Inventory in accordance with the foregoing shall be effective on the third
Business Day after notice thereof by the Agent to the Borrower in accordance
with Section 13.18.
"Environmental Laws" has the meaning set forth in Section 7.9 hereof.
"Equipment" means any and all Goods, other than Inventory (including
without limitation, equipment, machinery, motor vehicles, implements, tools,
parts and accessories) which are at any time owned by the Borrower, together
with any and all accessions, parts and appurtenances and any other "equipment"
(as defined in the Code).
National Beef Packing Company Credit Agreement 9
"Equity Distribution" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any membership interest or
other equity interest in the Borrower, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such membership or other equity interest or of any option,
warrant or other right to acquire any such membership or other equity interest.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended and in effect at any time, and all rules, regulations and rulings
thereof issued by the Internal Revenue Service or the Department of Labor
thereunder.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
under common control with the Borrower within the meaning of Section 414(b) or
(c) of the IRC (and Sections 414(m) and (o) of the IRC for purposes of
provisions relating to Section 412 of the IRC).
"ERISA Event" means (a) a Reportable Event with respect to a Pension Plan;
(b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Sections 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a Pension
Plan or Multiemployer Plan; (e) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; or (f) the imposition of any liability under Title IV of
ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.
"Excess" has the meaning set forth in Section 13.19 hereof.
"Excess Debt Proceeds" means, during any period of determination, the
Borrower's net cash proceeds from the incurrence of Indebtedness for borrowed
money, except for Indebtedness incurred under this Agreement and Indebtedness
permitted under Section 10.4(d), (e), and (f).
"Excess Disposition Proceeds" means, during any rolling twelve month
period, the Borrower's net cash proceeds, including insurance or condemnation
proceeds, from the sale or other disposition or loss of assets (other than the
sale of Inventory in the ordinary course of business or the casualty loss of
Inventory), which is not used by the Borrower for the replacement of the assets
sold, disposed of or lost or not used for the acquisition of other assets with
similar business utility, in excess of $100,000 in the aggregate during said
period.
"Excess Equity Proceeds" means, during any period of determination, the
Borrower's net cash proceeds from the sale or issuance of stock, membership,
partnership or other equity
National Beef Packing Company Credit Agreement 10
interests (or warrants or other options therefor), including capital
contributions in respect of any such interests previously issued.
"Existing Credit Agreement" has the meaning set forth in the recitals
hereof.
"Existing Financing Documents" means the "Financing Documents" under and as
defined in the Existing Credit Agreement.
"Existing Liabilities" means the "Liabilities" under and as defined in the
Existing Credit Agreement.
"Existing Line of Credit Notes" means the Line of Credit Notes of the
Borrower delivered to the Existing Lenders under the Existing Credit Agreement.
"Existing Term Notes" means the Term Notes of the Borrower delivered to the
Existing Lenders under the Existing Credit Agreement.
"Farm Credit System Participant" has the meaning set forth in Section
13.23(e) hereof.
"Farm Products" means all of the Borrower's harvested or unharvested crops
of all types and descriptions, whether annual or perennial and all other
personal property of the Borrower used or for use in farming or livestock
operations, including without limitation, native grass, grain, harvested crops,
feed, feed additives, feed ingredients, feed supplements, fertilizer, hay,
silage, supplies (including without limitation, veterinary supplies and related
Goods), livestock (including without limitation, the offspring of such livestock
and livestock in gestation) and any other "farm products" (as defined in the
Code).
"Federal Funds Rate" means, for any day, the rate of interest per annum
(rounded upward, if necessary, to the nearest whole multiple of 1/100th of 1%)
equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on such day, or if no such rate is so published on such day, on the most recent
day preceding such day on which such rate is so published.
"Feeder Deposits" has the meaning set forth in Section 10.19 hereof.
"Financial Performance Level" has the meaning set forth in the definition
of Applicable Margin.
"Financing Documents" means this Agreement, the Notes, the Agent's Letter,
all Security Documents, and all documents, instruments, certificates and
agreements at any time executed or delivered by the Borrower to any of the Agent
or any one or more of the Lenders pursuant to or in connection with any of the
foregoing, and any and all amendments, modifications, supplements, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.
"First Amendment Closing Date" means March 21, 2007.
National Beef Packing Company Credit Agreement 11
"Fiscal Year" means the Borrower's Fiscal Year, which shall be the twelve
month period ending on the last Saturday in August each year; references to a
Fiscal Year with a number corresponding to any calendar year (e.g., the "Fiscal
Year 2007") refer to the Fiscal Year ending on the last Saturday in August of
such calendar year.
"Fixed Charge Coverage Ratio" means, as of the end of any fiscal quarter,
the ratio of
(a) EBITDA during the four consecutive fiscal quarters then ended less
Net Capital Expenditures during such four fiscal quarter period to
(b) the aggregate amount of all scheduled payments of principal of and
interest on Funded Debt during such four fiscal quarter period plus Equity
Distributions made by the Borrower during such four fiscal quarter period.
"Funded Debt" means, for any date of determination, the then outstanding
principal amount of all of the Borrower's consolidated interest-bearing
Indebtedness (including without limitation, capitalized leases) plus the then
undrawn amount of all outstanding letters of credit (including without
limitation, the LCs); provided, however, that (i) LCs or indemnity obligations
issued to support other Indebtedness shall not be included in Funded Debt to the
extent that such other Indebtedness is, itself, included in Funded Debt; (ii)
the Borrower's Indebtedness under the Water Services Agreement shall not be
included in Funded Debt; (iii) the Borrower's Class A, B or C Units subject to
redemption rights shall not be included in Funded Debt; and (iv) the Borrower's
obligations under deferred compensation plans shall not be included in Funded
Debt.
"Funded Debt to EBITDA Ratio" means, for any date of determination, the
ratio of: (a) Funded Debt as of such date, over (b) EBITDA during the four
consecutive fiscal quarters most recently preceding such date.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
including without limitation, any arbitration panel, any court or any
commission.
"Governmental Requirement" means any material law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement of
any federal, state, county, municipal, parish, provincial or other Governmental
Authority or any department, commission, board, court, agency or any other
instrumentality of any of them.
"Guaranty Obligation" means, as to any Person, any (a) any obligation,
contingent or otherwise, of such Person guarantying or having the economic
effect of guaranteeing any
National Beef Packing Company Credit Agreement 12
Indebtedness or other obligation payable or performable by another Person (the
"primary obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or
other obligation, (ii) to purchase or lease property, securities or services for
the purpose of assuring the obligee in respect of such Indebtedness or other
obligation of the payment or performance of such Indebtedness or other
obligation, (iii) to maintain working capital, equity capital or any other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness or other obligation, or (iv)
entered into for the purpose of assuring in any other manner the obligees in
respect of such Indebtedness or other obligation of the payment or performance
thereof or to protect such obligees against loss in respect thereof (in whole or
in part), or (b) any Lien on any assets of such Person securing any Indebtedness
or other obligation of any other Person, whether or not such Indebtedness or
other obligation is assumed by such Person; provided, however, that the term
"Guaranty Obligation" shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, in respect of
which such Guaranty Obligation is made or, if not stated or determinable, the
maximum reasonably anticipated liability in respect thereof as determined by the
guaranteeing Person in good faith.
"Highest Lawful Rate" means, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged, or received with respect to the Notes
or on other amounts, if any, payable to such Lender pursuant to this Agreement
or any other Financing Document, under laws applicable to such Lender which are
presently in effect, or, to the extent allowed by law, under such applicable
laws which may hereafter be in effect and which allow a higher maximum
nonusurious interest rate than applicable laws now allow.
"Holding Account" means a deposit account belonging to the Agent into which
the Borrower may be required to make deposits pursuant to the provisions of this
Agreement, such account to be under the sole dominion and control of the Agent
and not subject to withdrawal by the Borrower, with any amounts therein to be
held for application toward payment of any outstanding LCs when drawn upon. The
Holding Account shall be a money market savings account or substantial
equivalent (or other appropriate investment medium as the Borrower may from time
to time request and to which the Agent in its sole discretion shall have
consented) and shall bear interest in accordance with the terms of similar
accounts held by the Agent for its customers.
"Indebtedness" shall mean with respect to any Person and without
duplication:
(a) All obligations of such Person for borrowed money (including,
without limitation, all notes payable and drafts accepted representing
extensions of credit, all obligations evidenced by credit agreements,
bonds, debentures, notes or other similar instruments and all obligations
upon which interest charges are customarily paid);
National Beef Packing Company Credit Agreement 13
(b) any direct or contingent obligations of such Person arising under
letters of credit (including standby and commercial), banker's acceptances,
bank guaranties, surety bonds and similar instruments;
(c) whether or not so included as liabilities in accordance with GAAP,
all obligations of such Person to pay the deferred purchase price of
property or services (other than trade accounts payable incurred in the
ordinary course of the Borrower's business), and indebtedness (excluding
prepaid interest thereon and excluding operating leases) secured by a Lien
on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements),
whether or not such indebtedness shall have been assumed by such Person or
is limited in recourse;
(d) capitalized leases and Synthetic Lease Obligations;
(e) net obligations under any Swap Contract in an amount equal to (i)
if such Swap Contract has been closed out, the termination value thereof,
or (ii) if such Swap Contract has not been closed out, the xxxx-to-market
value thereof determined on the basis of readily available quotations
provided by any recognized dealer in such Swap Contract; and
(f) all Guaranty Obligations of such Person in respect of any of the
foregoing.
For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture in which such Person is a
general partner or a joint venturer, unless such Indebtedness is expressly made
non-recourse to such Person except for customary exceptions acceptable to the
Required Lenders. The amount of any capitalized lease or Synthetic Lease
Obligation as of any date shall be deemed to be the amount of Attributable
Indebtedness in respect thereof as of such date.
"Indemnified Amounts" has the meaning set forth in Section 13.5(b) hereof.
"Indemnitee" has the meaning set forth in Section 13.5(b) hereof.
"Indenture" means that certain Trust Indenture dated as of December 1, 2004
between the City and Commerce Bank. N.A., as trustee, together with any and all
amendments, modifications, supplements, renewals or restatements thereof.
"Insurance Reserve" means a collateral reserve against casualty losses that
would not be covered by insurance as a result of the self-insured retention
deductible provision in the Borrower's property insurance (i) in an amount equal
to $10,000,000 when the self-insured retention deductible under the Borrower's
property insurance procured in accordance with Section 9.5 exceeds $15,000,000;
(ii) in an amount equal to $5,000,000 when the self-insured retention deductible
under the Borrower's property insurance procured in accordance with Section 9.5
exceeds $10,000,000 but is less than or equal to $15,000,000; and (iii) in an
amount equal to $0 when the self-insured retention deductible under the
Borrower's property insurance procured in accordance with Section 9.5 is less
than or equal to $10,000,000.
National Beef Packing Company Credit Agreement 14
"Intercompany Financing Documents" means: (a) the Loan Agreement dated as
of May 30, 2006, by and between the Borrower and NBC (the "Intercompany Loan
Agreement"), (b) the Security Agreement dated as of May 30, 2006, by NBC in
favor of the Borrower, (c) the Trademark License Agreement between NBC and the
Borrower dated as of May 30, 2006, (d) the Deed of Trust, Assignment of Rents
and Leases, Security Agreement and Fixture Filing from NBC to the Borrower dated
as of May 30, 2006, (e) the Note (as defined in the Intercompany Loan
Agreement), (f) the Security Agreement (Security Interest in Partnership
Interests) by NCI in favor of the Borrower dated as of May 30, 2006, (g) the
loan agreement dated as of August 6, 2003, between NCI, NCI Leasing and the
Borrower's predecessor in interest, (h) the security agreement dated as of
August 6, 2003, between NCI, NCI Leasing and the Borrower's predecessor in
interest, (i) the note dated as of August 6, 2003, from NCI and NCI Leasing to
the Borrower's predecessor in interest, (j) the Trademark Security Agreement
dated as of August 6, 2003, between NCI, NCI Leasing and the Borrower's
predecessor in interest, (k) the loan agreement dated as of May 29, 1998, as
amended by the loan extension agreement dated as of May 31, 2001 and the second
amendment dated as of August 21, 2001 between KC Steak and the Borrower's
predecessor in interest, (l) the first amended and rested security agreement
dated as of August 29, 2001, between KC Steak and the Borrower's predecessor in
interest, (m) the amended and restated note dated as of May 30, 2006, from KC
Steak to the Borrower, and any and all other agreements, chattel mortgages,
security agreements, pledges, guaranties, assignments of proceeds, assignments
of contract rights, assignments of partnership interest, assignments of
performance or other collateral assignments, trademark license agreements,
completion or surety bonds, standby agreements, subordination agreements,
undertakings and other similar documents, agreements, instruments and financing
statements at any time executed and delivered by any of the Borrower's
Subsidiaries or a third Person in connection with, or as security for the
payment or performance of, any agreements or documents that may from time to
time incur, evidence, or govern indebtedness that any Subsidiary owes from time
to time directly or indirectly to the Borrower, as the foregoing may be amended,
supplemented or otherwise modified from time to time in accordance with this
Agreement.
"Interest Period" means: the period of time for which the LIBOR Rate shall
be in effect as to any LIBOR Rate Advance and which shall be a one, two, three
or six month period of time, commencing with the borrowing date of such LIBOR
Rate Advance or the expiration date of the immediately preceding Interest
Period, as the case may be, applicable to and ending on the effective date of
any rate change or rate continuation made as provided herein as the Borrower may
specify in a notice of borrowing or a notice of interest conversion; provided,
however, all interest periods for all LIBOR Rate Advances outstanding under the
Existing Credit Agreement as of the Restatement Date shall be deemed to have
ended on the day immediately preceding the Restatement Date; and provided
further that: (a) any 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 next preceding Business Day, (b) no Interest
Period applicable to a Line of Credit Loan shall extend beyond the scheduled
Maturity Date applicable to the Line of Credit Loan; (c) no Interest Period for
a Term Advance shall extend beyond the Maturity Date applicable to the Term
Loan; (d) there shall be no more than five Interest Periods for LIBOR Rate
Advances outstanding at any one time under the Line of Credit; and (e) there
shall be no more than five Interest Periods for LIBOR Rate Advances at any one
time under the Term Loan.
National Beef Packing Company Credit Agreement 15
"Inventory" means any and all Goods which shall at any time constitute
"inventory" (as defined in the Code) or Farm Products of the Borrower, wherever
located (including without limitation, Goods in transit and Goods in the
possession of third parties), or which from time to time are held for sale,
lease or consumption in the Borrower's business, furnished under any contract of
service or held as raw materials, work in process, finished inventory or
supplies (including without limitation, packaging and/or shipping materials).
"IRC" means the Internal Revenue Code of 1986, as amended, as at any time
in effect, together with all regulations and rulings thereof or thereunder
issued by the Internal Revenue Service.
"Issuer" means CoBank or Rabobank, as issuers of LCs.
"Kansas Mortgage" means the Amended and Restated Mortgage, Assignment of
Rents and Leases, Security Agreement and Fixture Filing between the Borrower and
the Agent, dated December 29, 2004, together with any and all further
amendments, modifications, supplements, renewals or restatements thereof.
"KC Steak" means Kansas City Steak Company, LLC, a Missouri limited
liability company.
"LC" means a documentary, direct pay or standby letter of credit issued for
the account of the Borrower pursuant to Section 2.2, including any "LCs" issued
under (and as defined in) the Existing Credit Agreement.
"LC Fee" has the meaning set forth in Section 6.2 hereof.
"LC Obligations" means, at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the outstanding LCs plus (b) the
aggregate amount of drawings under LCs which have not then been reimbursed
pursuant to Section 2.2(f).
"Lease" means that certain Lease dated as of December 1, 2004 between the
City and the Borrower, together with any and all amendments, modifications,
supplements, renewals or restatements thereof.
"Lenders" has the meaning set forth in the introduction hereof.
"Liabilities" means any and all liabilities, obligations and indebtedness
of the Borrower to the Agent, the Lenders, the Swing Line Lender, the Issuers,
the Swap Parties and/or the Indemnitees of any and every kind and nature, at any
time owing, arising, due or payable and howsoever evidenced, created, incurred,
acquired or owing, primary, secondary, direct, contingent, fixed or otherwise
(including without limitation, LC Obligations, the Borrower's obligations under
any Swap Contracts with Swap Parties, fees, charges and obligations of
performance) arising or existing under this Agreement or any of the other
Financing Documents or by operation of law relating to this Agreement or any of
the other Financing Documents.
"LIBOR Rate" means, with respect to each day during each Interest Period
applicable to a LIBOR Rate Advance, the one, two, three or six month LIBOR rate
quoted by the Agent from
National Beef Packing Company Credit Agreement 16
Telerate Page 3750 or any successor thereto (which shall be the LIBOR rate in
effect two Business Days prior to such LIBOR Rate Advance) rounded up to the
nearest one hundredth of one percent.
"LIBOR Rate Advance" means an Advance with respect to which the interest
rate is determined by reference to the LIBOR Rate.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the Code
or comparable laws of any jurisdiction), including the interest of a purchaser
of accounts.
"Line of Credit Loan" has the meaning set forth in Section 2.1.1 hereof.
"Line of Credit Loan Commitment" means as to any Lender, such Lender's
obligation to make Line of Credit Loans up to its Pro Rata Percentage of
$200,000,000, as set forth opposite such Lender's name under the heading "Line
of Credit Loan Commitments" on Exhibit 1A, subject to Assignments and
Acceptances executed and delivered in accordance with Section 13.23, and as such
amount may be reduced or terminated from time to time pursuant to Section 4.5 or
11.1 or as such amount may be increased pursuant to Section 13.29; and "Line of
Credit Loan Commitments" means, collectively, the Line of Credit Loan
Commitments for all the Lenders.
"Line of Credit Notes" has the meaning set forth in Section 2.1.1 hereof.
"Loan" means each Line of Credit Loan and each Term Loan; however, unless
particularly specified in the relevant text, the term "Loan" does not include
Swing Line Loans.
"Loan Account" has the meaning set forth in Section 2.1.5(d) hereof.
"Loan Date" means the date of the making of any Line of Credit Loan or
Swing Line Loan hereunder.
"Margin Accounts" means, collectively, all Commodity Accounts and all
Commodity Contracts credited thereto.
"Matured Default" means the occurrence or existence of any one or more of
the following events: (a) the Borrower fails to pay any principal or interest
pursuant to any of the Financing Documents at the time such principal or
interest becomes due or is declared due; (b) the Borrower fails to pay any of
the Liabilities (other than principal and interest) on or before ten (10) days
after such Liabilities become due or are declared due; (c) the Borrower fails or
neglects to perform, keep or observe any of the covenants, conditions, promises
or agreements contained in Sections 2.2(a), 10.1, 10.2 or 10.4 of this
Agreement; (d) the Borrower fails or neglects to perform, keep or observe any of
the covenants, conditions, promises or agreements contained in this Agreement or
in any of the other Financing Documents (other than those covenants, conditions,
promises and agreements referred to or covered in (a), (b) or (c) above),
National Beef Packing Company Credit Agreement 17
and such failure continues for more than thirty (30) days after such failure or
neglect first occurs, provided that such grace period shall not apply, and a
Matured Default shall be deemed to have occurred and to exist immediately if
such failure or neglect is material and may not, in the Agent's reasonable
determination, be cured by the Borrower during such thirty (30) day grace
period; (e) the Borrower directly or indirectly contests in any manner the
validity, binding nature, or enforceability of any Financing Document, or, any
Lien securing any Liabilities; (f) any of the Borrower's Subsidiaries directly
or indirectly contests in any manner the validity, binding nature, or
enforceability of any of the Intercompany Financing Documents or the assignment
thereof to the Agent; (g) any warranty or representation at any time made by or
on behalf of either the Borrower or NBC in connection with this Agreement or any
of the other Financing Documents is untrue or incorrect in any material respect,
or any schedule, certificate, statement, report, financial data, notice, or
writing furnished at any time by or on behalf of either the Borrower or NBC to
the Agent or the Lenders is untrue or incorrect in any material respect on the
date as of which the facts set forth therein are stated or certified; (h) a
judgment in excess of $3,000,000 is rendered against either the Borrower or NBC
and such judgment remains unsatisfied or undischarged and in effect for
forty-five (45) consecutive days without a stay of enforcement or execution,
provided that this clause shall not apply to any judgment for which either the
Borrower or NBC is fully insured subject only to a deductible not exceeding
$500,000, and with respect to which the insurer has admitted liability in
writing for such judgment; (i) all or any part of either the Borrower's or NBC's
assets come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors and the same continues for a period of
forty-five (45) days; (j) a proceeding under any bankruptcy, reorganization,
arrangement of debt, insolvency, readjustment of debt or receivership law or
statute is filed against either the Borrower or NBC and such proceeding is not
dismissed within forty-five (45) days of the date of its filing, or a proceeding
under any bankruptcy, reorganization, arrangement of debt, insolvency,
readjustment of debt or receivership law or statute is filed by either the
Borrower or NBC, or either the Borrower or NBC applies for, consents to, or
acquiesces in, the appointment of a trustee, receiver, sequestrate, or other
custodian for either the Borrower or NBC or any of their respective property, or
either the Borrower or NBC makes an assignment for the benefit of creditors; (k)
either the Borrower or NBC becomes insolvent or generally fails to pay, or
admits in writing its inability to pay, debts as they become due; (l) either the
Borrower or NBC voluntarily or involuntarily dissolves or is dissolved,
terminates or is terminated; (m) either the Borrower or NBC is enjoined,
restrained, or in any way prevented by the order of any court or any
administrative or regulatory agency or by the termination or expiration of any
permit or license, from conducting all or any material part of its respective
business affairs; (n) either the Borrower or NBC fails to make any payment due
or otherwise defaults on any other obligation for borrowed money and the effect
of such failure or default is to cause or permit the holder of such obligation
or a trustee to cause such obligation to become due prior to its date of
maturity; (o) the Agent makes an expenditure under Section 13.3 of this
Agreement and such expenditure is not reimbursed within five (5) Business Days
after the Agent notifies either the Borrower or NBC, as applicable, of such
expenditure; (p) US Premium Beef ceases to own, directly or indirectly, a
controlling interest in the Borrower; (q) either the Borrower or NBC fail to pay
any Producer Payables in accordance with Section 9.13, and such failure
continues for a period of more than three (3) consecutive Business Days; (r) an
"event of default" as defined in the Lease shall occur and the effect is to
cause the Trustee to accelerate the Lease Payments (as defined in the Lease) or
act to dispossess the Borrower and such acceleration or action shall continue
National Beef Packing Company Credit Agreement 18
without waiver, cure, rescission or annulment for a period of thirty (30) days;
(s) (i) an ERISA Event occurs with respect to a Pension Plan or Multiemployer
Plan which has resulted or could reasonably be expected to result in liability
of either the Borrower or NBC under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $1,000,000,
or (ii) either the Borrower or NBC, or any ERISA Affiliate of either the
Borrower or NBC fails to pay when due, after the expiration of any applicable
grace period, any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in
excess of $1,000,000, or (t) the maturity of the Borrower's $160,000,000 10-1/2%
Senior Notes due August 1, 2011 has not (by February 1, 2011) been extended
(directly or by way of replacement Indebtedness with similar terms but in any
event satisfactory to the Agent) to November 30, 2016 or later.
"Maturity Date" means the earliest of (i) the date on which the Commitments
are terminated in whole pursuant to Section 11.1, (ii) the date on which the
Borrower voluntarily terminates the Commitments in whole and pays the
Liabilities in full, (iii) in the case of the Line of Credit Loans, July 25,
2012, (v) in the case of the Term Loans, May 30, 2016, (v) in the case of any
Swing Line Bond Loan, the Swing Line Lender's close of business of the relevant
Loan Date and (vi) in the case of any Regular Swing Line Loan, July 25, 2012, or
any earlier Business Day specified by notice from the Swing Line Lender to the
Borrower and the Lenders.
"Member" means any Person who holds directly or indirectly, an ownership
interest in the Borrower.
"Multiemployer Plan" means any employee benefit plan of the type described
in Section 4001(a)(3) of ERISA, to which the Borrower or any ERISA Affiliate
makes or is obligated to make contributions, or during the preceding three
calendar years, has made or been obligated to make contributions.
"NBC" means National Beef California, LP, a Delaware limited partnership.
"NCI" means National Carriers, Inc., a Kansas corporation, and a wholly
owned subsidiary of the Borrower.
"NCI Leasing" means NCI Leasing, Inc., a Kansas corporation, and a wholly
owned subsidiary of NCI.
"Net Capital Expenditures" means, during any period of determination: (a)
the Borrower's consolidated net property, plant and equipment at the end of such
period, less (b) the Borrower's consolidated net property, plant and equipment
at the beginning of such period, plus (c) the Borrower's consolidated
depreciation during such period; provided, however, that (i) the acquisition of
any intangible asset recognized as part of the Water Services Agreement shall
not be included in the calculation of Net Capital Expenditures, but (ii) the
acquisition of water rights and land as part of the Water Rights Acquisition
shall be treated as the acquisition of capital assets for purposes of
calculating Net Capital Expenditures.
"Non-Use Fee" has the meaning set forth in Section 6.1 hereof.
National Beef Packing Company Credit Agreement 19
"Note" or "Notes" shall mean any one or more of the Line of Credit Notes,
the Term Notes and/or the Swing Line Note, as the context may require.
"Owner/Operator Agreement" means an agreement with an owner-operator of a
tractor, for the use of the tractor, which is cancelable upon not more than
ninety days written notice by either party, which agreement has been or may be
considered a lease for accounting purposes.
"Payment in Lieu of Tax Agreement" means that certain Payment in Lieu of
Tax Agreement dated as of December 1, 2004 between the Borrower and the City,
together with any and all amendments, modifications, supplements, renewals or
restatements thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pennsylvania Mortgage" means the Amended and Restated Open-End Mortgage,
Assignment of Rents and Leases, Security Agreement and Fixture Filing between
the Borrower and the Agent, dated December 29, 2004, together with any and all
further amendments, modifications, supplements, renewals or restatements
thereof.
"Pension Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in Section 4064(a) of ERISA) has made contributions at any time
during the immediately preceding five plan years.
"Person" means an individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, limited liability partnership, institution, joint stock
company or government (whether national, federal, state, provincial, county,
city, municipal or otherwise, including without limitation, any instrumentality,
division, agency, body or department thereof).
"Plan" means any "employee benefit plan" (as such term is defined in
Section 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.
"Prime Rate" means the prime rate announced by the Agent from time to time,
which is a base rate that the Agent from time to time establishes and which
serves as the basis upon which effective rates of interest are calculated for
those loans which make reference thereto. The Prime Rate is not necessarily the
lowest rate offered by the Agent.
"Pro Rata Percentage" means with respect to any Lender at any time, a
fraction (expressed as a percentage), the numerator of which shall be such
Lender's Line of Credit Loan Commitment at such time, and the denominator of
which shall be the aggregate Line of Credit Commitments of all of the Lenders at
such time.
"Producer Payables" means with respect to any Person, all amounts at any
time payable by such Person for the purchase of cattle, feed, grain or other
farm products.
National Beef Packing Company Credit Agreement 20
"Property" means the land, the improvements, the Borrower's fixtures and
Equipment located in Ford or Xxxxxx Counties, Kansas and in Xxxxxx County,
Pennsylvania.
"Rabobank" means Cooperatieve Centrale Raiffeisen - Boerenleenbank, B.A.,
"Rabobank Nederland", New York Branch.
"Regular Swing Line Loan" has the meaning set forth in Section 2.1.3(a)
hereof.
"Regular Swing Line Sublimit" means an amount equal to the lesser of (a)
$30,000,000 and (b) the Line of Credit Loan Commitments. The Regular Swing Line
Sublimit is a part of, not an addition to, the Line of Credit Loan Commitments.
"Reportable Event" means any of the events set forth in Section 4043(c) of
ERISA, other than events for which the 30 day notice period has been waived.
"Required Lenders" means, at any time, Lenders having aggregate Total
Percentages of at least 51%.
"Restatement Date" means the date on or as of which the conditions
precedent set forth in Section 8.1 hereof are completed to the Agent's
satisfaction.
"Securities Act" has the meaning set forth in Section 13.20 hereof.
"Security Agreement" means that certain Fourth Amended and Restated
Security Agreement dated as of December 29, 2004, executed by the Borrower in
favor of the Agent, together with any and all amendments, modifications,
supplements, renewals or restatements thereof.
"Security Documents" means the Security Agreement, the Bond Pledge
Agreement, the Trademark License, the Kansas Mortgage, the Pennsylvania
Mortgage, the letter agreement dated May 30, 2006, pursuant to which the
Borrower (in its capacity as a limited partner of NBC) consented, among other
things, to NCI's pledge to the Borrower of NCI's general partnership interest in
NBC, the Assignment dated as of May 20, 2006 of the Deed of Trust, Assignment of
Rents and Leases, Security Agreement and Fixture Filing from NBC to the Borrower
dated as of May 30, 2006, as each may be amended, modified, renewed or extended
from time to time in accordance with this Agreement, and any and all other
agreements, chattel mortgages, security agreements, pledges, guaranties,
assignments of proceeds, assignments of contract rights, assignments of
partnership interest, assignments of performance or other collateral
assignments, trademark license agreements, completion or surety bonds, standby
agreements, subordination agreements, undertakings and other similar documents,
agreements, instruments and financing statements at any time executed and
delivered by the Borrower or a third Person in connection with, or as security
for the payment or performance of, any of the Liabilities.
"Senior Notes" means, the Borrower's $160,000,000 aggregate principal
amount of 10-1/2% Senior Notes due August 1, 2011 together with any unsecured
refinancing thereof permitted by Section 10.4(j).
National Beef Packing Company Credit Agreement 21
"Subsidiary" means, with respect to any Person, a corporation, partnership,
joint venture, limited liability company or other business entity of which a
majority of the shares of securities or other interests having ordinary voting
power for the election of directors or other governing body (other than
securities or interests having such power only by reason of the happening of a
contingency) are at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person.
"Swap Contract" means (a) any and all rate swap transactions, basis swaps,
credit derivative transactions, forward rate transactions, commodity swaps,
commodity options, forward commodity contracts, equity or equity index swaps or
options, bond or bond price or bond index swaps or options or forward bond or
forward bond price or forward bond index transactions, interest rate options,
forward foreign exchange transactions, cap transactions, floor transactions,
collar transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, but excluding any futures or
options contracts credited to any Margin Account, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., the Bond
Markets Association, any International Foreign Exchange Master Agreement, or any
other master agreement (any such master agreement, together with any related
schedules, a "Master Agreement"), including any such obligations or liabilities
under any Master Agreement.
"Swap Party" means any Lender (or affiliate thereof) that is a party to a
Swap Contract with the Borrower.
"Swing Line" means the revolving credit facility made available by the
Swing Line Lender pursuant to Section 2.1.3.
"Swing Line Bond Loan" means a Swing Line Loan, the proceeds of which are
to be used to finance the purchase price of, or the payment of principal of, the
Bonds or the payment of amounts due under the Lease.
"Swing Line Lender" means CoBank in its capacity as provider of Swing Line
Loans, or any successor swing line lender hereunder.
"Swing Line Loan" has the meaning specified in Section 2.1.3 hereof.
"Swing Line Note" has the meaning set forth in Section 2.1.3 hereof.
"Synthetic Lease Obligation" means the monetary obligation of a Person
under (a) a so-called synthetic, off-balance sheet or tax retention lease, or
(b) an agreement for the use or possession of property creating obligations that
do not appear on the balance sheet of such Person but which, upon the insolvency
or bankruptcy of such Person, would be characterized as the indebtedness of such
Person (without regard to accounting treatment).
"Taxes" has the meaning set forth in Section 5.5(a) and (b) hereof.
National Beef Packing Company Credit Agreement 22
"Term Loan" has the meaning set forth in Section 2.1.2 hereof.
"Term Notes" has the meaning set forth in Section 2.1.2 hereof.
"Total Percentage" means with respect to any Lender at any time, a fraction
(expressed as a percentage), the numerator of which shall be the combined amount
of
(a) such Lender's outstanding Term Loan principal balance and
(b) such Lender's Line of Credit Loan Commitment (or, if such Lender's
Line of Credit Loan Commitment shall have expired, the aggregate
outstanding principal balance of such Lender's Line of Credit Loans and
Swing Line Loans)
at such time, and the denominator of which shall be the combined amount of
all the outstanding Term Loan principal balances and Line of Credit Loan
Commitments (or, if the relevant Lenders' Line of Credit Loan Commitments shall
have expired, the aggregate outstanding principal balance of such Lenders' Line
of Credit Loans and Swing Line Loans) of all the Lenders at such time.
"Trademark License" means the Fourth Amended and Restated Trademark License
Agreement dated as of December 29, 2004 between the Borrower and the Agent,
together with any and all amendments, modifications, supplements, renewals or
restatements of such agreement.
"Type" means, with respect to any Advance, whether such Advance is a Base
Rate Advance or a LIBOR Rate Advance.
"UCP" has the meaning set forth in Section 2.2(c) hereof.
"Unallocated Cash Flow" means for any period of determination (a) EBITDA
during such period, minus (b) the amount of the Borrower's consolidated cash
income taxes paid during such period, minus (c) the amount of the Borrower's
consolidated cash dividends or distributions paid during such period, minus (d)
the net amount of the Borrower's consolidated capital expenditures during such
period (capital items purchased, minus capital items sold, and minus financing
for capital items purchased), with it being acknowledged that only fifty percent
(50%) of Advances under the Line of Credit during such period that are used for
capital expenditures related to the expansion of the Borrower's Dodge City
Facilities shall be included as "financing for capital items purchased" in the
foregoing calculation, minus (e) cash interest paid, minus (f) scheduled
principal payments made; provided, however, that no portion of the payments made
by the Borrower under the Water Services Agreement shall be considered to be
interest expense for the purposes of the calculation of Unallocated Cash Flow.
"Unfunded Pension Liability" means the excess of a Pension Plan's benefit
liabilities under Section 4001(a)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to Section 412 of the Code for the applicable
plan year.
"Unhedged Cattle" has the meaning set forth in Section 10.19 hereof.
National Beef Packing Company Credit Agreement 23
"US Premium Beef" means U.S. Premium Beef, LLC, a Delaware limited
liability company.
"Water Rights Acquisition" means a series of transactions whereby, among
other things: (i) the Borrower has acquired or would acquire certain water
rights for use at its Dodge City Facilities, all or a substantial portion of
which water rights are or will be or become subject to a long term lease in
favor of the City; (ii) the Borrower has acquired or would acquire land
associated with said water rights that the Borrower may sell, trade or lease
out; and (iii) the Borrower would enter into and perform the Water Services
Agreement.
"Water Services Agreement" means one or more agreements with the City
whereby, among other things: (i) the Borrower would sublease certain water
rights from the City; (ii) the City has issued, or would issue bonds of the City
(the "City Bonds") and the proceeds thereof would be used to construct
improvements to the City's fresh water distribution and waste water treatment
systems, including the construction of a pipeline to bring the acquired water to
a location capable of serving the Dodge City Facilities; (iii) the Borrower
would purchase certain water and wastewater services from the City on terms
intended, in part, to provide approximately one-half of the funds necessary to
repay the City Bonds; (iv) the Borrower's performance would be secured by a
first priority lien and security interest in the water rights acquired as part
of the Water Rights Acquisition and (v) the Borrower would convey certain water
rights to the City.
1.3 Accounting Terms. Any accounting terms used in this Agreement which are
not specifically defined in this Agreement shall have the meanings customarily
given them in accordance with GAAP.
ARTICLE II
LOANS, SWING LINE AND LETTERS OF CREDIT
2.1 Loan Facilities.
2.1.1 Line of Credit. Each Lender severally agrees to make loans (each a
"Line of Credit Loan" and collectively, the "Line of Credit Loans") to the
Borrower from time to time on any one or more Business Days from and after the
Restatement Date (through the Agent as set forth in Section 2.1.4) to but
excluding the Maturity Date applicable to Line of Credit Loans, during which
period the Borrower may borrow, repay and re-borrow in accordance with the
provisions hereof up to an aggregate principal amount not exceeding each such
Lender's Pro Rata Percentage of the Available Amount on such Business Day, in
aggregate amounts up to the lesser of the Available Amount or the then-current
Borrowing Base Availability (the "Line of Credit"). The Borrower hereby
acknowledges that $52,375,550.72 of "Line of Credit Advances" and $0 of "Regular
Swing Line Loans" under the Existing Credit Agreement are outstanding as of the
date hereof, which shall be deemed to be Line of Credit Loans or Swing Line
Loans under this Agreement on and after the Restatement Date. Line of Credit
Loans may be made as LIBOR Rate Advances or Base Rate Advances. The Line of
Credit Loans shall be evidenced by and repayable in accordance with the terms of
the Borrower's promissory notes to each of the Lenders (as the same may be
amended, supplemented or otherwise modified from time to time, together with any
replacements thereof or substitutions therefor, the "Line of Credit Notes"), the
form of which is attached as Exhibit 2A. The Lenders, in their unanimous, sole
and absolute
National Beef Packing Company Credit Agreement 24
discretion, may elect to make Line of Credit Loans to the Borrower in excess of
the amounts available pursuant to the terms of this Agreement, and any such Line
of Credit Loans shall also be governed by the terms hereof. The Lenders shall
also have the option, in their unanimous, sole discretion and without any
obligation to do so, to extend the Maturity Date applicable to the Line of
Credit Loans. In the event that the Lenders elect to extend such Maturity Date,
the Agent shall give notice to the Borrower pursuant to Section 13.18.
2.1.2 Term Loan. The Borrower acknowledges that, as of the Restatement
Date, term loans (including the "Term Advances" under the Existing Credit
Agreement that were deemed to be Term Loans on the Effective Date) are
outstanding under this Section 2.1.2 and owed by the Borrower in the aggregate
principal amount of $202,615,872. On the Restatement Date, the lenders
(including the "Lenders" under the Existing Credit Agreement) will be deemed to
have assigned rights to outstanding term loans among themselves such that each
relevant ongoing Lender shall be allocated the principal amount of term loans
set forth opposite such Lender's name under the heading "Amount of Term Loan
Outstanding on Restatement Date" on Exhibit 1A. Each Lender's allocation of Term
Loans as of the Restatement Date is herein collectively called such Lender's
"Term Loan", and all such loans of all of the Lenders are herein collectively
called the "Term Loans". The Term Loans may be maintained as LIBOR Rate Advances
or Base Rate Advances. The Term Loans shall be evidenced by and repayable in
accordance with the terms of the Borrower's promissory notes to each of the
Lenders (as the same may be amended, supplemented or otherwise modified from
time to time, together with any replacements thereof or substitutions therefor,
the "Term Notes"), the form of which is attached as Exhibit 2B. Amounts
representing Term Loans which have been repaid by the Borrower may not be
reborrowed.
2.1.3 Swing Line Loans.
(a) The Swing Line Lender agrees to make loans (each a "Swing Line
Loan" and collectively, the "Swing Line Loans") to the Borrower from time
to time on any one or more Business Days from and after the Restatement
Date through the Maturity Date applicable to the Line of Credit Loans.
Swing Line Loans may be comprised of either Swing Line Bond Loans or loans
not associated with financing the Bonds (such latter loans being herein
called the "Regular Swing Line Loans"). The aggregate outstanding principal
amount of Regular Swing Line Loans must not at any time exceed the Regular
Swing Line Sublimit, and no Regular Swing Line Loans may be made to the
extent that the sum of (i) the aggregate outstanding principal amount of
the Line of Credit Loans, (ii) the aggregate outstanding amount of the LC
Obligations and (iii) the aggregate outstanding principal amount of all
Swing Line Loans would exceed either the Borrowing Base or the aggregate
Line of Credit Loan Commitments. The aggregate outstanding principal amount
of Swing Line Bond Loans must not at any time exceed the purchase price or
principal payment of the Bonds or payment under the Lease that the Borrower
is obligated to make on the relevant Loan Date pursuant to the Bond
Documents. Furthermore, no Swing Line Bond Loan may be made to the extent
that the sum of (i) the aggregate outstanding principal amount of the Line
of Credit Loans, (ii) the aggregate outstanding amount of the LC
Obligations and (iii) the aggregate outstanding principal amount of all
Swing Line Loans would exceed either the Borrowing Base or the aggregate
Line of Credit Loan Commitments. All Swing Line Loans shall bear interest
National Beef Packing Company Credit Agreement 25
as if they were Base Rate Advances; provided, however, that Swing Line
Loans that are disbursed and repaid on the same day shall bear one day's
interest. Within the foregoing limits, and subject to the other terms and
conditions hereof, the Borrower may borrow, repay and reborrow in
accordance with the terms hereof and prepay in accordance with Section 4.2,
provided, however, that the Swing Line Lender may terminate or suspend its
commitment to make the Swing Line Loans at any time in its sole discretion
upon notice to the Borrower. The Swing Line Loans shall be evidenced by and
repayable in accordance with the terms of the Borrower's promissory note to
the Swing Line Lender (as the same may be amended, supplemented or
otherwise modified from time to time, together with any replacements
thereof or substitutions therefor, the "Swing Line Note"), the form of
which is attached as Exhibit 2C. Immediately upon the making of a Swing
Line Loan, each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from Swing Line Lender a risk
participation in such Swing Line Loan in an amount equal to such Lender's
Pro Rata Percentage of such Swing Line Loan, which risk participation shall
be funded in accordance with Section 2.1.3(b). The Borrower shall make all
payments of principal and interest in respect of the Swing Line Loans
directly to Swing Line Lender.
(b) Refinancing of Swing Line Loans.
(i) In anticipation of the Maturity Date applicable to a Swing
Line Loan, or after the occurrence and during the continuance of any
Default or Matured Default, as the case may be, the Swing Line Lender
may request, on behalf of the Borrower (which hereby irrevocably
requests the Swing Line Lender to act on its behalf), that each Lender
make a Line of Credit Loan in an amount equal to such Lender's Pro
Rata Percentage of the amount of such Swing Line Loan. Such request
shall be made in accordance with the requirements of Article II,
without regard to the minimum and multiples specified therein for the
principal amount of Base Rate Advances. The Swing Line Lender shall
furnish the Borrower with a copy of the applicable borrowing notice
promptly after delivering such notice to the Agent. Each Lender shall
make an amount equal to its Pro Rata Percentage of the amount
specified in such borrowing notice available to the Agent in
immediately available funds for the account of the Swing Line Lender
at the Agent's office not later than 11:00 a.m., Denver time, on the
day specified in such borrowing notice, whereupon, subject to clause
(ii) below, each Lender that so makes funds available shall be deemed
to have made a Line of Credit Loan to the Borrower in such amount. The
Agent shall then remit the funds so received to the Swing Line Lender.
(ii) If for any reason any Advance cannot be requested in
accordance with clause (i) above or any Regular Swing Line Loan cannot
be refinanced by such an Advance, the borrowing notice submitted by
the Swing Line Lender shall be deemed to be a request by the Swing
Line Lender that each of the Lenders fund its participation in the
relevant Swing Line Loan, and each Lender's payment to the Agent for
the account of the Swing Line Lender pursuant to clause (i) above
shall be deemed to be the payment in respect of such participation.
National Beef Packing Company Credit Agreement 26
(iii) If any Lender fails to make available to the Agent for the
account of the Swing Line Lender any amount that such Lender is
required to pay pursuant to the foregoing provisions of this
subsection (b) by the time specified in clause (i) above, the Swing
Line Lender shall be entitled to recover from such Lender (acting
through the Agent), on demand, such amount with interest thereon for
the period from the date such payment is required to the date on which
such payment is immediately available to the Swing Line Lender at a
rate per annum equal to the Federal Funds Rate from time to time in
effect. A certificate of the Swing Line Lender submitted to any Lender
(directly or through the Agent) with respect to any amounts owing
under this clause (iii) shall be conclusive absent manifest error.
(iv) Each Lender's obligation to make Line of Credit Loans or to
purchase and fund participations in Swing Line Loans pursuant to this
subsection (b) shall be absolute and unconditional and shall not be
affected by any circumstance, including (A) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against
the Swing Line Lender, the Borrower or any other Person for any reason
whatsoever, (B) the occurrence or continuance of a Default or Matured
Default, or (C) any other occurrence, event or condition, whether or
not similar to any of the foregoing. Any such purchase of
participations shall not relieve or otherwise impair Borrower's
obligation to repay the Swing Line Loans, together with interest as
provided herein.
(c) Repayment of Participations.
(i) At any time after any Lender has purchased and funded a
participation in a Swing Line Loan, if the Swing Line Lender receives
any payment on account of such Swing Line Loan, Swing Line Lender will
distribute to such Lender its share of such payment in accordance with
such Lender's Pro Rata Percentage (appropriately adjusted, in the case
of interest payments, to reflect the period of time during which such
Lender's participation was outstanding and funded) in the same funds
as those received by the Swing Line Lender.
(ii) If any payment received by Swing Line Lender in respect of
any Swing Line Loan is required to be returned by the Swing Line
Lender, each Lender shall pay to the Swing Line Lender its Pro Rata
Percentage thereof on demand of the Swing Line Lender (or the Agent on
its behalf), plus interest thereon from the date of such demand to the
date such amount is returned, at a rate per annum equal to the Federal
Funds Rate. The Agent will make such demand upon the request of the
Swing Line Lender.
2.1.4 Borrowing Procedures.
(a) Procedure for Line of Credit Loans. Any request by the Borrower
for Line of Credit Loans hereunder must be given by the Borrower not later
than 11:00 a.m. (Denver time) on the third Business Day prior to the date
of any proposed LIBOR Rate
National Beef Packing Company Credit Agreement 27
Advance and not later than 11:00 a.m. (Denver time) on the Business Day on
which any proposed Base Rate Advance is proposed to be made. Each request
for Line of Credit Loans hereunder shall be irrevocable and shall be deemed
to be a representation by the Borrower that on the requested Loan Date and
after giving effect to the requested Line of Credit Loans the applicable
conditions specified in Article VIII have been and will be satisfied. Each
request for a Line of Credit Loan hereunder shall specify (i) the requested
Loan Date, (ii) the aggregate amount of the Line of Credit Loan to be made
on such date, which shall be in a minimum amount of $1,000,000 and an
integral multiple of $500,000, (iii) whether such Line of Credit Loans is
to be funded as a Base Rate Advances or LIBOR Rate Advances and (iv) in the
case of a LIBOR Rate Advance, the duration of the initial Interest Period
applicable thereto. Promptly upon receipt of such notice, the Agent shall
advise each Lender of the requested Line of Credit Loans and of such
Lender's ratable share of such Loans. At or before 1:00 p.m. (Denver time)
on the date of the requested Line of Credit Loans, each relevant Lender
shall provide the Agent at the Agent's principal office in Denver with
immediately available funds covering such Lender's Pro Rata Percentage of
the requested Loans. Unless the Agent determines that any applicable
condition specified in Article VIII has not been satisfied or waived, the
Agent will make available to the Borrower at the Agent's principal office
in Denver, Colorado in immediately available funds not later than 2:30 p.m.
(Denver time) on the requested Loan Date the amount of the requested Line
of Credit Loans to the extent received by the Agent.
(b) Procedure for Term Loans. As of the Restatement Date, all Term
Loans have already been disbursed.
(c) Procedure for Swing Line Loans. Unless the Swing Line Lender has
notified the Borrower that the Swing Line has been terminated or suspended
as provided in Section 2.1.3, each request by the Borrower for a Swing Line
Loan hereunder must be given by the Borrower to the Swing Line Lender and
the Agent not later than 1:00 p.m. (Denver time) on the Business Day on
which such Swing Line Loan is proposed to be made. Each request for a Swing
Line Loan hereunder shall be irrevocable and shall be deemed a
representation by the Borrower that on the requested Loan Date and after
giving effect to the requested Swing Line Loan the applicable conditions
specified in Article VIII have been and will be satisfied. Each request for
a Swing Line Loan hereunder shall specify (i) the requested Loan Date, (ii)
the amount of the Swing Line Loan to be made on such date (and, in the case
of a requested Swing Line Bond Loan, the amount of the purchase price or
principal payment of the Bonds to be financed by such Swing Line Bond
Loan), which shall be in a minimum amount of $100,000 and an integral
multiple of $100,000. Unless the Swing Line Lender has received written
notice from the Agent (i) directing the Swing Line Lender not to make such
Swing Line Loan as a result of the limitations set forth in the first
proviso to the first sentence of Section 2.1.3(a) or (ii) that any
applicable condition specified in Article VIII has not been satisfied or
waived, the Agent will make available to the Borrower at the Agent's
principal office in Denver, Colorado in immediately available funds not
later than 2:30 p.m. (Denver time) on the requested Loan Date the amount of
the requested Swing Line Loans to the extent received from the Swing Line
Lender.
National Beef Packing Company Credit Agreement 28
(d) Notices. All notices of the Borrower required under Section 2.1.4
shall be from such natural Persons as have been designated in a written
notice signed by the president, chief executive officer or chief financial
officer of the Borrower. Such notice shall provide the Agent and Swing Line
Lender with a specimen signature for each such natural Person so
designated. The natural Persons so designated are authorized to request
Loans and Swing Line Loans and direct the disposition of any such Loans and
Swing Line Loans until written notice of the revocation of such authority
is received by the Agent at its address designated below. Any such Loans or
Swing Line Loans shall be conclusively presumed to have been made to or for
the benefit of the Borrower when the Agent reasonably believes in good
faith that such notice was made by authorized Persons, or when said Loans
are deposited to the credit of the account of the Borrower regardless of
the fact that Persons other than those authorized hereunder may have
authority to draw against such account.
2.1.5 General Terms regarding the Notes, the Loans and the Swing Line
Loans.
(a) The Agent shall promptly notify each Lender of any notice that the
Agent receives from the Borrower pursuant to Section 3.2. In the case of a
proposed LIBOR Rate Advance, the Agent shall also promptly notify each
Lender of the applicable interest rate.
(b) Unless the Agent shall have received notice from a Lender prior to
the date of any borrowing of a Loan that such Lender will not make
available to the Agent such Lender's pro rata share of such Loan, the Agent
may assume that such Lender will make such portion available to the Agent
in accordance with Section 2.1.3 and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding
amount. If and to the extent that such Lender shall not have so made its
pro rata share available to the Agent in accordance with Section 2.1.3,
such Lender and the Borrower severally agree to repay to the Agent, within
five (5) Business Days after demand therefor, such corresponding amount
together with interest thereon, for each day from the date such amount is
made available to the Borrower until the date such amount is repaid to the
Agent, (i) in the case of the Borrower, at the interest rate applicable at
the time the Loans comprising such borrowing were made, and (ii) in the
case of such Lender, at the Federal Funds Rate. If such Lender shall repay
to the Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Loan as part of such borrowing for purposes of
this Agreement.
(c) The failure of any Lender to make any Loan or to fund any
participation to be made by it as required by this Agreement shall not
relieve any other Lender of its obligation, if any, to make its Loan on the
date the same is required to be made, but no Lender shall be responsible
for the failure of any other Lender to make Loans or to fund such other
Lender's participation.
(d) The Agent shall maintain a loan account ("Loan Account") on its
books in which the Agent will record the date and amount of: (i) all Loans
and Swing Line Loans to the Borrower pursuant to this Agreement; (ii) all
payments made by the Borrower on all Loans and Swing Line Loans; and (iii)
all other appropriate debits and credits as
National Beef Packing Company Credit Agreement 29
provided in this Agreement, including without limitation, all fees,
charges, expenses and interest. All entries in the Borrower's Loan Account
shall be made in accordance with the Agent's customary accounting practices
as in effect from time to time. The balance in the Borrower's Loan Account,
as set forth on the Agent's most recent printout, shall be rebuttable
presumptive evidence of the amounts due and owing to the Agent, the
Lenders, the Swing Line Lender and the Issuers by the Borrower.
(e) The proceeds of all Loans and Swing Line Loans shall be used for
the Borrower's working capital and general corporate purposes, for
financing acquisitions as permitted hereunder, for making capital
expenditures within the limitation set forth herein and, in the case of the
Swing Line Bond Loans, for financing payments of purchase price or
principal of the Bonds.
2.2 Letters of Credit.
(a) Subject to the terms and conditions of this Agreement, the
Borrower may from time to time request that an Issuer issue LCs for the
Borrower's account for any purpose acceptable to the Agent in its
reasonable discretion; provided, however, that no Issuer shall issue any
such LC in an amount exceeding the least of: (i) $75,000,000 minus the LC
Obligations; (ii) the Available Amount or (iii) the Borrowing Base
Availability. The proposed expiry date for any such LC shall not be later
than the earlier of one year from the date of issuance of such LC or the
scheduled Maturity Date applicable to the Line of Credit Loans.
(b) In order to effect the issuance of each LC, the Borrower shall
deliver to the Agent and the relevant Issuer a letter of credit application
(the "Application") not later than 11:00 a.m. (Denver time), five (5)
Business Days prior to the proposed date of issuance of the LC. The
Application shall be duly executed by a responsible officer of the
Borrower, shall be irrevocable and shall (i) specify the day on which such
LC is to be issued (which shall be a Business Day), and (ii) be accompanied
by a certificate executed by a responsible officer setting forth
calculations evidencing availability for the LC as required pursuant to
Section 2.2(a) and stating that all conditions precedent to such issuance
have been satisfied.
(c) Upon receipt of the Application, and satisfaction of the
applicable terms and conditions of this Agreement, and provided that no
Default or Matured Default exists, or would, after giving effect to the
issuance of the LC, exist, the relevant Issuer shall issue such LC no later
than the close of business, in Denver, Colorado, on the date so specified.
Such Issuer shall provide the Borrower, the Agent and each Lender with a
copy of the LC which has been issued. Each LC shall (i) provide for the
payment of drafts presented for honor thereunder by the beneficiary in
accordance with the terms thereof, when such drafts are accompanied by the
documents described in the LC, if any, and (ii) to the extent not
inconsistent with the express terms hereof or the applicable Application,
be subject to the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500
and/or the International Standby Practices (ISP98), International Chamber
of Commerce Publication No. 590, as the relevant Issuer shall determine to
be applicable (collectively, together
National Beef Packing Company Credit Agreement 30
with any subsequent revisions thereof approved by a Congress of the
International Chamber of Commerce and adhered to by the relevant Issuer,
the "UCP"), and shall, as to matters not governed by the UCP, be governed
by, and construed and interpreted in accordance with, the laws of the State
of Colorado (in the case of CoBank) or the State of New York (in the case
of Rabobank).
(d) Upon the issuance date of each LC, the relevant Issuer shall be
deemed, without further action by any party hereto, to have sold to each
other Lender, and each other Lender shall be deemed, without further action
by any party hereto, to have purchased from such Issuer, a participation,
to the extent of such Lender's Pro Rata Percentage, in such LC, the
obligations thereunder and in the Borrower's reimbursement obligations due
in respect of drawings made under such LC. If requested by such Issuer, the
other Lenders will execute any other documents reasonably requested by such
Issuer to evidence the purchase of such participation.
(e) Upon the relevant beneficiary's presentation of a draft for honor
under any LC which the relevant Issuer has determined is in compliance with
the conditions for payment thereunder, such Issuer shall promptly notify
the Borrower and the Agent. Each drawing under any LC shall (so long as no
Default or Matured Default shall have occurred and be continuing)
constitute a request by the Borrower to the Agent for a borrowing pursuant
to Section 2.1.1 of a Base Rate Advance in the amount of such drawing. If a
Default or Matured Default shall have occurred and be continuing, or if
Base Rate Advances are otherwise unavailable to the Borrower, at the time
when a beneficiary presents a draft for payment under an LC, the Borrower
agrees to reimburse the relevant Issuer for the amount of such draft
immediately upon such presentation.
(f) The Borrower's obligation to reimburse the relevant Issuer for the
amount of any draft drawn under any LC (whether directly or with the
proceeds of a Base Rate Advance) shall be absolute, unconditional and
irrevocable and shall be paid immediately to the Agent for the account of
the Lenders upon demand by the Agent, and otherwise strictly in accordance
with the terms of this Agreement, under all circumstances whatsoever,
including without limitation, the following circumstances:
(i) The existence of any claim, set-off, defense or other rights
which the Borrower may have at any time against any beneficiary or any
transferee of any LC (or any Person for whom any such beneficiary or
any such transferee may be acting), any Issuer, any Lender, the Agent
or any other Person, whether in connection with this Agreement, any
other Financing Document, the transactions contemplated herein or
therein or any unrelated transaction, unless otherwise provided by the
terms of such LC;
(ii) Any statement or any other document presented under any LC
proving to be forged, fraudulent or invalid in any respect or any
statement therein being untrue or inaccurate in any respect;
(iii) Payment by the relevant Issuer under any LC against
presentation of a draft or certificate which does not comply with the
terms of such LC,
National Beef Packing Company Credit Agreement 31
provided however, that such payment shall not have constituted gross
negligence or willful misconduct on the part of such Issuer; and
(iv) Any other circumstance or event whatsoever, whether or not
similar to the foregoing, provided however, that such other
circumstance or event shall not have been the result of gross
negligence or willful misconduct of the relevant Issuer.
(g) The Borrower assumes all risks of the acts or omissions of the
beneficiary and any transferee of each LC with respect to its use of such
LC. Neither the Agent, any Issuer nor any Lender shall be liable or
responsible for, and the Borrower indemnifies and holds each Issuer, the
Agent and each Lender harmless for: (i) the use which may be made of any LC
or for any acts or omissions of the beneficiary and any transferee thereof
in connection therewith, or (ii) the validity or genuineness of documents,
or of any endorsement(s) thereon, even if such documents should, in fact
prove to be in any or all respects invalid, fraudulent or forged, or any
other circumstances whatsoever in making or failing to make payment,
against the relevant Issuer, the Agent or any Lender, except damages
determined to have been caused by gross negligence or willful misconduct of
the relevant Issuer in determining whether documents presented under an LC
comply with the terms of such LC and there shall have been a wrongful
payment as a result thereof; provided, however, that it is the intention of
the Borrower to indemnify each Issuer, the Agent and each Lender for its
own negligence, other than negligence constituting gross negligence or
willful misconduct. In furtherance and not in limitation of the foregoing,
each Issuer may accept documents that appear on their face to be in order,
without responsibility for investigation, regardless of any notice or
information to the contrary.
(h) In the event that any provision of an Application is inconsistent,
or in conflict with, any provision of this Agreement, including provisions
for the rate of interest applicable to draws thereunder, delivery of
collateral or rights of set-off or any representations, warranties,
covenants or any events of default set forth therein, the provisions of
this Agreement shall govern.
ARTICLE III
INTEREST
3.1 Interest.
The Borrower shall pay interest on the unpaid principal amount of each Loan
and Swing Line Loan made by each Lender from the date of such Loan or Swing Line
Loan until such principal amount shall be paid in full, at the times and at the
rates per annum set forth below:
(a) Base Rate Advances and Swing Line Loans, so long as no Matured
Default has occurred and is continuing, shall bear interest at a rate per
annum equal to the lesser of (i) the sum of the Base Rate in effect from
time to time plus the then Applicable Margin (calculated according to the
Borrower's actual Financial Performance Level or Borrowing Base
Availability Level, as the case may be) and (ii) the Highest Lawful Rate;
National Beef Packing Company Credit Agreement 32
provided, however, that with respect to each Base Rate Advance, the rate of
interest accruing shall change concurrently with each change in the Prime
Rate as announced by CoBank or with each change in the Federal Funds Rate,
as the case may be. Such interest shall be payable (1) in the case of a
Swing Line Loan, on its Maturity Date, and (2) in the case of other Base
Rate Advances, monthly in arrears on the first day of each month and on the
Maturity Date applicable thereto.
(b) Each LIBOR Rate Advance, so long as no Matured Default has
occurred and is continuing, shall bear interest at a rate per annum during
each day of each Interest Period for such Advance equal to the lesser of
(i) the sum of the LIBOR Rate for such Interest Period for such Advance
plus the then Applicable Margin (calculated according to the Borrower's
actual Financial Performance Level or Borrowing Base Availability Level, as
the case may be) and (ii), the Highest Lawful Rate. Such interest shall be
payable in arrears on the last day of the relevant Interest Period, and, if
such Interest Period exceeds three months, the day which is three months
after the date on which the relevant LIBOR Rate Advance was disbursed.
(c) After the occurrence of a Matured Default and for so long as such
Matured Default is continuing, the Agent may (upon the direction of the
Required Lenders) notify the Borrower that any and all amounts due
hereunder, under the Notes or under any other Financing Document, whether
for principal, interest (to the extent permitted by applicable law), fees,
expenses or otherwise, shall bear interest, from the date of such notice by
the Agent and for so long as such Matured Default continues, payable on
demand, at a rate per annum (the "Default Rate") equal to the lesser of (A)
with respect to a Base Rate Advance, (i) the sum of two percent (2.0%) per
annum plus the Base Rate in effect from time to time plus the Applicable
Margin or (ii) the Highest Lawful Rate; or (B) with respect to a LIBOR Rate
Advance, (i) during the Interest Period in which the Matured Default has
occurred, the sum of two percent (2.0%) per annum plus the LIBOR Rate then
in effect for such LIBOR Rate Advance plus the Applicable Margin, and in
Interest Periods subsequent to that in which the Matured Default occurred,
the Default Rate applicable to a Base Rate Advance as calculated under (A)
hereof, or (ii) the Highest Lawful Rate.
(d) All computations of interest pursuant to Section 3.1(a) shall be
made by the Swing Line Lender or the Agent, each, as the case may be, by
reference to the actual number of days elapsed based on a year of 360 days
(in the case of fees and of LIBOR Rate Advances) or 365 or 366 days (in the
case of Base Rate Advances), as applicable. Each determination of an
interest rate by the Agent or the Swing Line Lender shall be conclusive and
binding for all purposes, absent manifest error. Any accrued interest
unpaid on the Maturity Date shall be due and payable on the Maturity Date.
(e) The Swing Line Lender shall be responsible for invoicing the
Borrower for interest on the Swing Line Loans. Until each Lender funds its
Line of Credit Loan or participation pursuant to Section 2.1.3 to refinance
such Lender's Pro Rata Percentage of any Swing Line Loan, interest in
respect of such Swing Line Loan shall be solely for the account of the
Swing Line Lender.
National Beef Packing Company Credit Agreement 33
3.2 Voluntary Conversion of Advance.
With respect to Loans, the Borrower may, upon written notice given by the
Borrower to the Agent not later than 11:00 a.m. (Denver time) on the third
Business Day prior to the date of any proposed interest conversion or roll over,
(a) convert Advances of one Type into Advances of another Type, or (b) continue
or roll over existing LIBOR Rate Advances; provided, however, that (i) with
respect to any conversion into or roll over of a LIBOR Rate Advance, no Default
or Matured Default shall have occurred and be continuing, (ii) with respect to
any facsimile notice of interest conversion, the Borrower shall promptly confirm
such notice by sending the original notice to the Agent and (iii) any
continuation or roll over of a LIBOR Rate Advance for the same or a different
Interest Period or into a Base Rate Advance, shall be made on, and only on, the
last day of an Interest Period for such LIBOR Rate Advance. Each such notice of
interest conversion shall specify therein the requested (x) date of such
conversion, (y) the Advances to be converted and whether such Advances
constitute LIBOR Rate Advances, and (z) if such interest conversion is into
LIBOR Rate Advances, the duration of the Interest Period for each such Advance.
The Agent shall promptly deliver a copy thereof to each Lender. Each such notice
shall be irrevocable and binding on the Borrower. If the Borrower shall fail to
give a notice of interest conversion with respect to any LIBOR Rate Advance as
set forth above, such Advance shall automatically convert to a Base Rate Advance
on the last day of the Interest Period with respect thereto. The provisions of
this Section 3.2 shall also apply to initial Advances on Loans made as LIBOR
Rate Advances.
ARTICLE IV
PAYMENTS; PREPAYMENTS; ETC.
4.1 Payment of Loans and Swing Line Loans.
(a) The outstanding principal balance of the Term Notes, Line of
Credit Notes and the Swing Line Notes shall be due and payable on their
respective Maturity Dates.
(b) Subject to the definition of Interest Period in the case of LIBOR
Rate Advances, whenever any payment hereunder or under any Note shall be
due on a day other than a Business Day, the date for payment of such
amounts shall be extended to the next succeeding Business Day.
(c) The Borrower shall make each payment hereunder and under the Term
Notes and Line of Credit Notes not later than 11:00 a.m. (Denver time) on
the day when due in Dollars and in immediately available funds to the Agent
for the account of the Lenders, unless such payment is scheduled to be made
with the proceeds of a Line of Credit Advance otherwise available
hereunder. Subject to Section 2.1.3, the Agent will promptly distribute in
Dollars and in immediately available funds to each Lender its Pro Rata
Percentage of each such payment received by the Agent for the account of
the Lenders.
(d) The Borrower shall make each Swing Line Loan payment not later
than 1:00 p.m. (Denver time) (in the case of Regular Swing Line Loans) or
5:00 p.m. (Denver time) (in the case of Swing Line Bond Loans) on the day
when due in Dollars and in
National Beef Packing Company Credit Agreement 34
immediately available funds to the Swing Line Lender unless such Swing Line
Loan is being refinanced through Line of Credit Loans.
4.2 Optional Prepayments of the Loans.
The Borrower may at any time prepay the outstanding principal amount of any
Loan or Swing Line Loan, in either case in whole or in part, in accordance with
this Section 4.2. With respect to any prepayment other than prepayments made
pursuant to the Agent's routine collection of Accounts in accordance with the
provisions of the Security Agreement, the Borrower shall give prior written
notice of any such prepayment to the Agent, which notice shall state the
proposed date of such prepayment (which shall be a Business Day), the Loan or
Swing Line Loan to be prepaid and the aggregate amount of the prepayment, and
which notice shall be delivered to the Agent not later than 11:00 a.m. (Denver
time): (a) with respect to any Base Rate Advance, on the date of the proposed
prepayment, and (b) with respect to any LIBOR Rate Advance, three (3) Business
Days prior to the date of the proposed prepayment. All prepayments of Base Rate
Advances shall be without premium or penalty of any kind. All such prepayments
of LIBOR Rate Advances shall be made together with accrued and unpaid interest
(if any) to the date of such prepayment on the principal amount prepaid without
premium or penalty thereon; provided, however, that funding losses incurred by
any Lender as described in Section 5.3 shall be payable with respect to each
such prepayment. All notices of prepayment shall be irrevocable and the payment
amount specified in each such notice shall be due and payable on the prepayment
date described in such notice, together with, in the case of LIBOR Rate
Advances, accrued and unpaid interest (if any) on the principal amount prepaid
and any amounts due under Section 5.3. The Borrower shall have no optional right
to prepay the principal amount of any LIBOR Rate Advance other than as provided
in this Section 4.2. Voluntary prepayments of the Term Notes shall be applied
pro rata to the remaining unpaid installments described in Section 4.3.
4.3 Term Loan Installments.
The principal amount outstanding under the Term Notes shall be payable in
semi-annual installments on the last Business Day of each June and December
commencing June 30, 2011 in equal installments of $3,500,133, and in any event
with any and all remaining principal outstanding on the Maturity Date being due
and payable on the Maturity Date.
4.4 Mandatory Prepayments of Notes.
(a) Mandatory Prepayments--Borrowing Base Deficiency. If at any time a
Borrowing Base Deficiency exists, the Borrower shall immediately pay on the
principal of the Swing Line Loans and the Line of Credit Loans an aggregate
amount equal to such Borrowing Base Deficiency. Any such payments shall be
applied to the Swing Line Loans first, then to the Line of Credit Loans
first against Base Rate Advances and then to LIBOR Rate Advances in order
starting with the LIBOR Rate Advances having the shortest time to the end
of the applicable Interest Period. Amounts paid on the Line of Credit Loans
under this Section 4.4(a) shall be for the account of each Lender in
proportion to its share of outstanding Swing Line Loans and Line of Credit
Loans. If, after paying all outstanding Line of Credit Loans, a Borrowing
Base Deficiency still
National Beef Packing Company Credit Agreement 35
exists, the Borrower shall pay into the Holding Account an amount equal to
the amount of the remaining Borrowing Base Deficiency.
(b) Other Mandatory Prepayments. Additional mandatory prepayments of
the Term Notes and Line of Credit Notes shall be payable as follows: (i) on
or before the 10th day after the receipt thereof, an amount equal to any
Excess Disposition Proceeds; (ii) on or before the 10th day after the
receipt thereof, an amount equal to any Excess Debt Proceeds; (iii) on or
before the 10th day after the receipt thereof, an amount equal to 50% of
any Excess Equity Proceeds; (iv) until the Funded Debt to EBITDA Ratio at
the end of a Fiscal Year is less than or equal to 4.00 to 1.00, but greater
than 3.50 to 1.00, on or before the 120th day after the end of each of the
Borrower's Fiscal Years, an amount equal to seventy-five percent (75%) of
any Unallocated Cash Flow during the relevant Fiscal Year, and (v)
thereafter, until the Funded Debt to EBITDA Ratio at the end of a Fiscal
Year is less than or equal to 3.50 to 1.00, on or before the 120th day
after the end of each of the Borrower's Fiscal Years, an amount equal to
fifty percent (50%) of any Unallocated Cash Flow during the relevant Fiscal
Year. All prepayments under this Section 4.4 shall be applied (pro rata
among the Lenders) first to the unpaid installments due under the Term
Notes in the inverse order of their maturity until all such installments
are paid, second to the outstanding principal of the Line of Credit Notes,
and third to the outstanding principal of the Swing Line Loans.
4.5 Termination of the Line of Credit Loan Commitments.
The Borrower shall have the right, upon at least five Business Days'
written notice to the Lenders, to terminate the Line of Credit Loan Commitments,
(i) in whole, or (ii) in part, in a minimum amount of $5,000,000 and an integral
multiple of $5,000,000, but not to an amount less than $50,000,000; provided,
however, that any such termination shall be accompanied, (i) in the case of a
termination in whole, by payment of the Liabilities in full and the return or
cash coverage (pursuant to documentation in form and substance satisfactory to
the Agent) of any LC then outstanding, or (ii) in the case of a partial
termination, payment of the Line of Credit Loans, the Regular Swing Line Loans
and/or the LC Obligations to the extent necessary to cause the Available Amount
to be not less than zero. Any partial reduction of the Line of Credit Loan
Commitments pursuant to this Section 4.5 shall result in a reduction pro rata of
the Line of Credit Loan Commitments of each of the Lenders.
ARTICLE V
LIBOR RATE LOANS; INCREASED COSTS; TAXES, ETC.
5.1 LIBOR Rate Advances.
Anything in this Agreement to the contrary notwithstanding:
(a) If any Lender shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes it
unlawful, or that any central bank or other Governmental Authority asserts
that it is unlawful, for such Lender to perform its obligations to make
LIBOR Rate Advances or to fund or maintain LIBOR Rate Advances (whether or
not such assertion carries the force of law), the obligation of
National Beef Packing Company Credit Agreement 36
such Lender to make, roll over or convert Loans into LIBOR Rate Advances
shall be suspended until the Agent shall notify the Borrower and such
Lender that the circumstances causing such suspension no longer exist, and
the existing LIBOR Rate Advances of such Lender shall automatically
convert, on and as of the date of such notification, into Base Rate
Advances; provided that each Lender represents and warrants to the Borrower
that as of the later of (i) the Closing Date or (ii) the date on which it
shall have executed an Assignment and Acceptance pursuant to Section
13.23(a), it has no actual knowledge that it would be unlawful for such
Lender to make LIBOR Rate Advances as contemplated.
(b) If the Required Lenders shall, not later than 11:00 a.m. (Denver
time) one Business Day before the date of any requested borrowing
consisting of LIBOR Rate Advances, notify the Agent that the LIBOR Rate for
LIBOR Rate Advances comprising such borrowing will not adequately reflect
the cost to such Required Lenders of making or funding their respective
LIBOR Rate Advances for such borrowing, the Borrower's right to select
LIBOR Rate Advances for such borrowing or any subsequent borrowing
respectively shall be suspended until the Required Lenders shall notify the
Agent that the circumstances causing such suspension no longer exist, and
the Advances comprising such requested borrowing shall be Base Rate
Advances.
5.2 Increased Costs.
If, due to either (a) introduction of or any change in or in the
interpretation of any law or regulation or (b) compliance with any guideline or
request from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost or reduction
in yield or rate of return to any Lender of agreeing to make or making or
maintaining any LIBOR Rate Advance or maintaining its Commitment or any to any
Issuer issuing or maintaining any LC, with respect thereto (other than any
increase in income or franchise taxes imposed on it by the jurisdiction under
the laws of which such Lender is organized or the jurisdiction in which such
Lender's relevant office is located), then the Borrower shall from time to time,
three (3) Business Days after written demand by such Lender (with a copy of such
demand to the Agent), pay to the Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost, reduction
in yield or rate of return over a period not to exceed one hundred eighty (180)
days, which amounts shall be due and payable at the end of such period, subject,
however, to the provisions of Section 12.10. Any request for payment under this
Section 5.2 will be submitted to the Borrower and the Agent by such Lender
within sixty (60) days of such occurrence described in this Section 5.2,
identifying with reasonable specificity the basis for and the amount of such
increased cost, and shall be conclusive and binding for all purposes, absent
manifest error.
5.3 Funding Losses.
The Borrower will indemnify each Lender against, and reimburse each Lender
on demand for, any loss, cost or expense incurred or sustained by such Lender
(including without limitation, any loss or expense incurred by reason of the
liquidation or redeployment of deposits or other funds acquired by such Lender
to fund or maintain any LIBOR Rate Advance and/or loss of net yield) as a result
of (a) any payment, conversion, roll over, or prepayment of all or a
National Beef Packing Company Credit Agreement 37
portion of any LIBOR Rate Advance on a day other than the last day of an
Interest Period for such LIBOR Rate Advance, (b) any payment, conversion, roll
over or prepayment (whether required hereunder or otherwise) of such Lender's
LIBOR Rate Advance made after the delivery of a notice of borrowing (whether
oral or written) but before the proposed date for such LIBOR Rate Advance if
such payment or prepayment prevents the proposed borrowing from becoming fully
effective, (c) after the Agent receives a notice of borrowing, the failure of
any LIBOR Rate Advance to be made or effected by such Lender due to any
condition precedent to a borrowing not being satisfied or due to any other
action or inaction of the Borrower or (d) any rescission of a notice of
borrowing or a notice of interest conversion. Any Lender demanding payment under
this Section 5.3 shall deliver to the Borrower and the Agent a statement
reasonably setting forth the amount and manner of determining such loss, cost or
expense, which statement shall be conclusive and binding for all purposes,
absent manifest error. Compensation owing to a Lender as a result of any such
loss, cost or expense resulting from a payment, prepayment, conversion or roll
over of a LIBOR Rate Advance shall include without limitation, an amount equal
to the sum of (i) the amount of the net yield that, but for such event, such
Lender would have earned for the remainder of the applicable Interest Period
plus (ii) any expense incurred by such Lender. Notwithstanding any provision
herein to the contrary, each Lender shall be entitled to fund and maintain its
funding of all of any part of the LIBOR Rate Advance in any manner it elects; it
being understood, however, that all determinations hereunder shall be made as if
the Lender had actually funded and maintained each LIBOR Rate Advance during the
Interest Period for such Advance through the purchase of deposits having a term
corresponding to such Interest Period and bearing an interest rate equal to the
LIBOR Rate for such Interest Period (whether or not the Lender shall have
granted any participations in such Loans).
5.4 Capital Adequacy Requirements.
(a) If any Lender or Issuer shall have determined that the adoption
after the date of this Agreement of any applicable law, rule or regulation
regarding capital adequacy, or any change therein after the date of this
Agreement, or any change in the interpretation or administration thereof
after the date of this Agreement by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by such Lender or Issuer 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 issued after
the date of this Agreement, affects or would affect the amount of capital
required or expected to be maintained by such Lender or Issuer or any
corporation controlling such Lender or Issuer, and that the amount of such
capital requirement is increased, or has or would have the effect of
reducing the rate of return on such Lender's or such Issuer's or such
corporation's capital to a level below that which such Lender or Issuer or
such corporation could have achieved but for such adoption, change or
compliance, in each case as a consequence of its obligations hereunder
(taking into consideration such Lender's or Issuer's policies with respect
to capital adequacy), then the Borrower shall pay to such Lender such
additional amount or amounts as such Lender or Issuer reasonably determines
to be sufficient to compensate such Lender or Issuer or such corporation in
the light of such circumstances, for a period not to exceed one hundred
eighty (180) days, which amounts shall be due and payable at the end of
such period, subject to the provisions of Section 12.10.
National Beef Packing Company Credit Agreement 38
(b) A certificate of such Lender or Issuer setting forth such amount
or amounts as shall be necessary to compensate such Lender or Issuer as
specified in Section 5.4(a) above shall be delivered within sixty (60) days
of such occurrence described in Section 5.4(a) above to the Borrower and
shall be conclusive and binding, absent manifest error. The Borrower shall
pay such Lender or Issuer the amount shown as due on any such certificate
within fifteen (15) days after such Lender or Issuer delivers such
certificate. In preparing such certificate, such Lender or Issuer may
employ such assumptions and allocations of costs and expenses as it shall
in good xxxxx xxxx reasonable and may use any reasonable averaging and
attribution method.
5.5 Taxes.
(a) Except as otherwise provided in Section 5.5(d), any and all
payments by the Borrower hereunder or under the other Financing Documents
shall be made free and clear of and without deduction for any and all
present or future taxes, deductions, charges or withholdings, and all
liabilities with respect thereto, including without limitation, such taxes,
deductions, charges, withholdings or liabilities whatsoever imposed,
assessed, levied or collected by any taxing authority and all (other than
to the extent due to the gross negligence or willful misconduct of the
relevant Lender, Issuer or Swing Line Lender) interest, penalties, expenses
or similar liabilities with respect thereto ("Taxes"), excluding, however,
from the definition of Taxes, in the case of each Lender, each Issuer, the
Swing Line Lender and the Agent, (i) taxes imposed on its income (including
penalties and interest payable in respect thereof), and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Lender,
such Issuer, the Swing Line Lender or the Agent (as the case may be) is
organized or any political subdivision thereof and (ii) taxes imposed on
its income (including penalties and interest payable in respect thereof),
and franchise taxes imposed on it, by the applicable jurisdiction in which
such Person's relevant office is located or any political subdivision
thereof. If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder or under any Note to any Lender,
any Issuer, the Swing Line Lender or the Agent (other than payments for
which taxes are withheld pursuant to the last sentence of Section 5.5(d)
under circumstances in which the recipient is able to deliver the relevant
forms under applicable law), (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 5.5)
such recipient receives an amount equal to the sum it would have received
had no such deductions been made and (ii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other authority in
accordance with applicable law, less any credits due to the Borrower.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from any payment made hereunder or under any
other Financing Document or from the execution, delivery or registration
of, or otherwise with respect to, this Agreement or any other Financing
Document (hereinafter included within the definition of "Taxes").
(c) The Borrower will indemnify each Lender, each Issuer, the Swing
Line Lender and the Agent for the full amount of Taxes (including without
limitation, any
National Beef Packing Company Credit Agreement 39
Taxes imposed by any jurisdiction on amounts payable under this Section
5.5) paid by such Person and any liability arising therefrom or with
respect thereto, whether or not such Taxes were correctly or legally
asserted. This indemnification shall be made within five (5) days from the
date such Person makes written demand therefor; provided, however, that to
the extent that any such recipient is reimbursed for any Taxes that were
incorrectly or illegally asserted with respect to the Borrower, such
recipient shall promptly return to the Borrower the amount of such
reimbursement net of any costs of recovery incurred by such recipient,
together with any interest that may have been paid by the taxing
jurisdiction with respect thereto, to the extent the Borrower has actually
paid such recipient with respect thereto.
(d) Prior to the date of any Lender becoming a Lender hereunder, and
from time to time thereafter if requested by the Borrower or the Agent (to
the extent that such Person is still able to do so under applicable law),
each Lender organized outside the United States shall provide the Agent and
the Borrower with the forms prescribed by the Internal Revenue Service of
the United States (including, without limitation, Form W-8BEN, Form W-8ECI,
or Form W-9) certifying such Lender's exemption from United States
withholding taxes with respect to all payments to be made to such Lender
hereunder and under the other Financing Documents. Unless the Borrower and
the Agent have received forms or other documents satisfactory to them
indicating that payments hereunder or under the other Financing Documents
are not subject to United States withholding tax or are subject to such tax
at a rate reduced by an applicable tax treaty, the Borrower or the Agent
shall withhold taxes from such payments for the account and benefit of the
Borrower at the applicable statutory rate in the case of payments to or for
any Lender organized under the laws of a jurisdiction outside the United
States; provided, however, that all such withholding for such Lender shall
cease upon delivery by such Lender of the applicable forms to the Borrower
and Agent.
(e) Promptly after the date on which payment of any Taxes are due
pursuant to applicable law, the Borrower will, at the request of the Agent,
any Issuer or any Lender, furnish to the Agent, such Issuer or such Lender
evidence in form and substance satisfactory to the Agent, such Issuer or
such Lender, that the Borrower has met its obligations under this Section
5.5.
(f) Without prejudice to the survival of the Borrower's other
agreements, the Borrower's agreements and obligations contained in this
Section 5.5 shall survive the payment in full of the Liabilities.
(g) Each Lender, each Issuer and the Swing Line Lender agrees that,
upon the occurrence of any event giving rise to any payment by the Borrower
pursuant to this Section 5.5 with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to its overall
policy considerations) to designate another lending office for any Loans
and other extensions of credit affected by such event with the object of
avoiding the consequences of such event; provided, that such designation is
made on terms that, in such Lender's sole judgment, cause such Lender and
its lending office(s) to suffer no economic, legal or regulatory
disadvantage.
National Beef Packing Company Credit Agreement 40
ARTICLE VI
FEES.
6.1 Non-Use Fee.
The Borrower agrees to pay to the Agent for distribution to the Lenders
(based on their respective Pro Rata Percentages) a quarterly non-use fee on the
daily average unused amount of the Line of Credit Loan Commitments at the rate
per annum for the relevant Borrowing Base Availability Level set forth in the
definition of Applicable Margin (the "Non-Use Fee"). The Non-Use Fee shall be
due and payable in arrears on the first day of each January, April, July and
October hereafter through the Maturity Date applicable to the Line of Credit
Loans. A pro-rated non-use fee shall be due and payable on the first day of the
quarter following the Restatement Date and on the Maturity Date applicable to
the Line of Credit Loans. The Non-Use Fee shall be earned as it accrues. A
pro-rated non-use fee shall be due and payable to the Lenders under the Existing
Credit Agreement on the Restatement Date. Swing Line Loans shall be considered
usage of the Line of Credit Loan Commitments for purposes of this Section 6.1.
6.2 LC Fees.
The Borrower agrees to pay to the Agent, for distribution to the Lenders
(based on their respective Pro Rata Percentages), a quarterly fee in respect of
each LC issued hereunder (the "LC Fee"), computed at the applicable rate per
annum set forth in the definition of Applicable Margin on the daily average
amount available to be drawn under such LC for as long as it is outstanding. The
quarterly letter of credit fee shall be due and payable in arrears on the first
day of each January, April, July and October hereafter through the Maturity Date
applicable to the Line of Credit Loans. A pro-rated letter of credit fee shall
be due and payable on the first day of the quarter following the Closing Date
and on the Maturity Date applicable to the Line of Credit Loans. Each quarterly
letter of credit fee shall be earned as it accrues. The Borrower shall also pay
to the Agent for the account of each Issuer the normal and customary processing
fees that such Issuer charges in connection with the issuance of or drawings
under each such LC. A pro-rated letter of credit fee shall be due and payable to
the Lenders under the Existing Credit Agreement on the Restatement Date.
6.3 Calculation of Fees.
The fees payable under Sections 6.1 and 6.2 shall be calculated by the
Agent on the basis of a 360-day year, for the actual days (including the first
day but excluding the last day) occurring in the period for which such fee is
payable. Each determination by the Agent of fees payable under Sections 6.1 and
6.2 shall be conclusive and binding for all purposes, absent manifest error.
6.4 Fees Not Interest; Nonpayment.
The fees described in this Agreement represent compensation for services
rendered and to be rendered separate and apart from the lending of money or the
provision of credit and do not constitute compensation for the use, detention,
or forbearance of money, and the Borrower's obligation to pay each fee described
herein shall be in addition to, and not in lieu of, the
National Beef Packing Company Credit Agreement 41
Borrower's obligation to pay interest and expenses otherwise described in this
Agreement. Fees shall be payable when due in Dollars and in immediately
available funds. All fees shall be non-refundable.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
In order to induce the Agent, each Issuer, the Swing Line Lender and the
Lenders to enter into this Agreement and to induce each Issuer to issue LCs
under this Agreement, the Borrower represents and warrants to the Agent, each
Issuer, the Swing Line Lender and the Lenders that the following statements are
and on each date hereafter that the Borrower is required to execute and deliver
a compliance certificate to the Agent, will be, true and correct:
7.1 Judgments, Claims Litigation and Proceedings.
Except as set forth on Exhibit 7A or as disclosed in writing to the Agent
from time to time hereafter, no judgments are outstanding against either the
Borrower or NBC, nor is there now pending or threatened any litigation,
contested claim, or governmental proceeding by or against either the Borrower or
NBC, except for judgments and pending or threatened litigation, contested claims
and governmental proceedings which are not, in the aggregate, material to the
Borrower's financial condition, results of operations or business.
7.2 Contract Defaults and Disputes.
Except as set forth on Exhibit 7B or as disclosed in writing to the Agent
from time to time hereafter, neither the Borrower nor NBC is in default under
any material contract, lease or commitment to which it is a party or by which it
is bound, and neither the Borrower nor NBC knows of any material dispute
relating to any contract, lease, or commitment which is material to the
continued financial success and well-being of the Borrower.
7.3 Licenses, Patents, Etc.
All of the Borrower's and NBC's licenses, patents, copyrights, trademarks
and trade names and all of the Borrower's and NBC's applications for any of the
foregoing are set forth on Exhibit 7C. There is no action, proceeding, claim or
complaint pending or threatened to be brought against either the Borrower or NBC
by any Person which might jeopardize any of the Borrower's or NBC's interest in
any of the foregoing licenses, patents, copyrights, trademarks, trade names or
applications and which, if successful, would have a material adverse effect on
the Borrower's consolidated financial condition, results of operations or
business.
7.4 Title to Assets.
Except for the security interests granted in the Security Documents, as
permitted under Section 10.1 or as set forth on Exhibit 7D, both the Borrower
and NBC own all of their respective assets free and clear of all security
interests, liens, claims, and encumbrances. No Goods held by the Borrower, NBC,
NCI, NCI Leasing or KC Steak on consignment or under sale or return contracts
have been represented to be Inventory and no amounts receivable by the Borrower,
NBC, NCI, NCI Leasing or KC Steak in respect of the sale of such Goods (except
National Beef Packing Company Credit Agreement 42
markups or commissions which have been fully earned by either the Borrower or
NBC) have been represented to be Accounts. The Borrower represents that all
amounts in the form of ordinary trade payables which are owing to suppliers of
any of the Inventory of the Borrower or NBC have been paid when due and that
none of such suppliers has asserted any interest in the Inventory. The Borrower
will furnish, at the Agent's request, the names and addresses of all Persons who
supply Inventory to the Borrower, NBC, NCI, NCI Leasing or KC Steak who deliver
Goods to the Borrower, NBC, NCI, NCI Leasing or KC Steak on consignment or under
sale or return contracts.
7.5 Tax Liabilities.
The Borrower and NBC each have filed all federal and all other material tax
reports and returns required by any law or regulation to be filed and the
Borrower and NBC each have either duly paid all taxes, duties and charges
indicated to be due on the basis of such returns and reports or have made
adequate provision for the payment thereof, and the assessment of any material
amount of additional taxes in excess of those paid and reported is not
reasonably expected. The reserves for taxes reflected on the Borrower's
consolidated balance sheet are materially adequate in amount for the payment of
all of the Borrower's consolidated liabilities for all taxes (whether or not
disputed) accrued through the date of such balance sheet. There are no material
unresolved questions or claims concerning any tax liability of either the
Borrower or NBC, except as described on Exhibit 7E or as disclosed in writing to
the Agent from time to time hereafter.
7.6 Indebtedness and Producer Payables.
Except (a) for the Loans and Swing Line Loans from the Lenders and the
Swing Line Lender respectively, and the LC Obligations, each as contemplated by
this Agreement; (b) as disclosed on Exhibit 7F; and (c) as disclosed on the
financial statements identified in Section 7.16 of this Agreement, neither the
Borrower nor NBC has any other indebtedness, known contingent obligations or
liabilities, outstanding bonds, letters of credit or acceptances to any other
Person or loan commitments from any other Person which in the aggregate, are
material to the Borrower's financial position. The Borrower's or NBC's Producer
Payables, other than those being contested in good faith by any of such Persons,
are not past due.
7.7 Other Fictitious Names.
During the preceding five (5) years, neither the Borrower nor NBC has been
known by or used any fictitious name, or changed its organizational form, the
location of its chief executive office, or the jurisdiction of its organization
except as disclosed on Exhibit 7G.
7.8 Affiliates.
Neither the Borrower nor NBC has any Affiliates, other than those Persons
disclosed on Exhibit 7H or those disclosed in writing to the Agent from time to
time hereafter, and the legal relationships of both the Borrower and NBC to each
such Affiliate are accurately and completely described thereon.
National Beef Packing Company Credit Agreement 43
7.9 Environmental Matters.
Except as disclosed on Exhibit 7I or as disclosed in writing to the Agent
from time to time hereafter, (a) neither the Borrower nor NBC has received any
notice to the effect, and does not have any knowledge, that their respective
operations are not in compliance with any of the requirements of applicable
federal, state and local environmental, health and safety statutes and
regulations ("Environmental Laws") or are the subject of any federal or state
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could have a material adverse effect on the
consolidated business, operations, assets or condition (financial or otherwise)
of the Borrower; (b) there have been no releases of hazardous materials at, on
or under either the Borrower's or NBC's premises that, singly or in the
aggregate, have, or may reasonably be expected to have, a material adverse
effect on the consolidated financial condition, operations, assets, business or
prospects of the Borrower; (c) there are no underground storage tanks, active or
abandoned, including petroleum storage tanks, on or under either the Borrower's
or NBC's premises that, singly or in the aggregate, have, or may reasonably be
expected to have, a material adverse effect on the consolidated financial
condition, operations, assets, business or prospects of the Borrower; (d)
neither the Borrower nor NBC has directly transported or directly arranged for
the transportation of any hazardous material to any location which is listed or
proposed for listing on the National Priorities List pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended from time to time, or on any similar federal, state or local list or
which is the subject of federal, state or local enforcement actions or other
investigations which may lead to claims against either the Borrower or NBC for
any remedial work, damage to natural resources or personal injury, including
claims under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time, that are material in the
aggregate to the Borrower's consolidated financial position; and (e) to the best
of both the Borrower's and NBC's knowledge, no conditions exist at, on or under
either the Borrower's or NBC's premises which, with the passage of time, or the
giving of notice or both, would give rise to any liability under any
Environmental Laws that would be material relative to the Borrower's
consolidated financial position.
7.10 Bank Accounts.
Exhibit 7J sets forth, as of the Closing Date, the account numbers and
location of each of the Borrower's and NBC's bank accounts (including blocked
accounts).
7.11 Other Agreements or Restrictions.
Except as disclosed on Exhibit 7K, neither the Borrower nor NBC is a party
to any contract or agreement or subject to any restriction which restricts the
conduct of its respective business which could have a material adverse effect on
the consolidated financial condition, operations, assets, business or prospects
of the Borrower. Neither the Borrower nor NBC is in default under or in
violation of any Governmental Requirement related to the Loans, the LCs, or the
Swing Line Loans or any other Governmental Requirement which default could have
a material adverse effect on the Borrower's consolidated financial condition,
operations, assets, business or prospects. Neither the execution and delivery of
the Financing Documents or the
National Beef Packing Company Credit Agreement 44
Bond Documents, nor the consummation of the transactions contemplated thereby,
nor fulfillment of and compliance with the respective terms, conditions and
provisions thereof, will conflict with or result in a breach of any of the
terms, conditions or provisions of, or constitute a default under, or result in
any material violation of, or result in the creation or imposition of any lien
or security interest on any of the Collateral pursuant to: (a) any agreement,
instrument or document pertaining to the governance of either the Borrower or
NBC; (b) any Governmental Requirement applicable to either the Borrower or NBC;
(c) any order, writ, injunction or decree of any court; or (d) the terms,
conditions or provisions of any material agreement or instrument to which either
the Borrower or NBC is a party or by which the Borrower, NBC or their respective
properties is bound or to which the Borrower, NBC or their respective properties
is subject in any material respect.
7.12 [Intentionally Omitted].
7.13 Existence.
The Borrower is a limited liability company duly organized and in existence
under the laws of the State of Delaware. The Borrower is duly licensed to do
business in all states where the nature and extent of the business it transacts
or the ownership of its assets make such licensing necessary, except for those
jurisdictions in which the failure to be so licensed would not, in the
aggregate, have a material adverse effect on the Borrower's consolidated
financial condition, results of operations or business.
7.14 Authority.
The Borrower's execution and delivery of this Agreement, the other
Financing Documents and the Bond Documents, and the performance of its
obligations hereunder and thereunder, (a) are within the Borrower's powers; (b)
are duly authorized by the Borrower's managers and, if necessary, the Borrower's
members; (c) are not in contravention of any material law or laws, or the terms
of the Borrower's operating agreement, or other organizational documents, or of
any indenture, agreement or undertaking to which the Borrower is a party or by
which the Borrower or any of the Borrower's property is bound; (d) do not
require any governmental consent, registration or approval; (e) do not
contravene any contractual or governmental restriction binding upon the
Borrower; and (f) will not, except as contemplated or permitted by this
Agreement, result in the imposition of any lien, charge, security interest or
encumbrance upon any of the Borrower's property under any existing indenture,
mortgage, deed of trust, loan or credit agreement or other material agreement or
instrument to which the Borrower is a party or by which the Borrower or any of
the Borrower's property may be bound or affected.
7.15 Binding Effect.
This Agreement, the other Financing Documents and the Bond Documents set
forth the legal, valid and binding obligations of the Borrower and are
enforceable against the Borrower in accordance with their respective terms.
7.16 Correctness of Financial Statements.
National Beef Packing Company Credit Agreement 45
The financial statements delivered by the Borrower and, after the Effective
Date, NBC to the Agent, the Swing Line Lender and the Lenders present fairly the
Borrower's and NBC's respective financial condition, and have been prepared in
accordance with GAAP consistently applied. Since the end of the Borrower's
Fiscal Year 2006, there has been no materially adverse change in the Borrower's
condition or operations, and neither the Borrower nor NBC has granted a Lien on
any of their respective assets or properties since such date other than as set
forth on Exhibit 7D. As of each date hereafter that the Borrower is required to
execute and deliver a compliance certificate to the Agent, there has been no
materially adverse change in the Borrower's condition or operation, and (unless
otherwise permitted in this Agreement) neither has the Borrower nor NBC has
granted a Lien on any of their respective assets or properties since the date of
the most recent financial statement delivered to the Agent and the Lenders.
7.17 Employee Controversies.
There are no controversies pending or threatened between the Borrower and
any of its employees, or between NBC and any of its employees, other than
employee grievances arising in the ordinary course of either the Borrower's or
NBC's respective business which are not, in the aggregate, material to the
Borrower's continued financial success and well-being and employee grievances
which are disclosed in writing to the Agent from time to time hereafter.
7.18 Compliance with Laws and Regulations.
The Borrower and NBC each are in compliance with all laws, orders,
regulations and ordinances of all federal, foreign, state and local Governmental
Authorities relating to the Borrower's and NBC's business operations and assets,
except for laws, orders, regulations and ordinances, the violation of which
would not have a material adverse effect on the value of the Collateral or the
Agent's interest in any of the Collateral and, in the aggregate, would not have
a material adverse effect on the Borrower's consolidated financial condition,
results of operations or business.
7.19 Solvency.
The Borrower and NBC each are solvent, able to pay their respective
debts generally as such debts mature, and have capital sufficient to carry on
their business and all businesses in which the Borrower and NBC each expect to
engage. The saleable value of each of the Borrower's and NBC's total assets at a
fair valuation, and at a present fair saleable value, are greater than the
amount of each of the Borrower's and NBC's total obligations to all Persons.
Neither the Borrower nor NBC will be rendered insolvent by the execution or
delivery of this Agreement, the other Financing Documents, the Xxxxxxx Beef
Acquisition Documents, the Intercompany Financing Documents, the Contribution
Agreement or by the transactions contemplated hereunder or thereunder.
7.20 ERISA Matters.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the IRC and other Federal or state Laws,
and each Plan that is intended to qualify under Section 401(a) of the IRC
has received a favorable determination letter from the IRS or an
application for such a letter is currently being
National Beef Packing Company Credit Agreement 46
processed by the IRS with respect thereto and, to both the Borrower's and
NBC's best knowledge, nothing has occurred which would prevent, or cause
the loss of, such qualification. The Borrower, and NBC and each of their
ERISA Affiliates have made all required contributions to each Plan subject
to Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the Code
has been made with respect to any Plan.
(b) There are no pending or, to either the Borrower's or NBC's best
knowledge, threatened claims, actions or lawsuits, or action by any
Governmental Authority, with respect to any Plan that could reasonably be
expected to have a material adverse effect on the Borrower's consolidated
financial condition, results of operations, business or prospects. There
has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan that has resulted or could be
reasonably expected to result in a material adverse effect on the
Borrower's consolidated financial condition, results of operations,
business or prospects.
(c) (i) No ERISA Event (except as set forth in Schedule 7.20(c)(i))
has occurred or is reasonably expected to occur; (ii) no Pension Plan has
any Unfunded Pension Liability; (iii) neither the Borrower, nor NBC, nor
any ERISA Affiliate of either has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under Section 4007 of ERISA);
(iv) neither the Borrower, nor NBC, nor any ERISA Affiliate of either has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
would result in such liability) under Sections 4201 or 4243 of ERISA with
respect to a Multiemployer Plan; and (v) neither the Borrower, nor NBC, nor
any ERISA Affiliate of either has engaged in a transaction that could be
subject to Sections 4069 or 4212(c) of ERISA.
7.21 Margin Security.
Neither the Borrower nor NBC owns any margin security and none of the loans
advanced hereunder shall be used for the purpose of purchasing or carrying any
margin securities or for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase any margin securities or for any other
purpose not permitted by Regulations T, U or X of the Board of Governors of the
Federal Reserve System.
7.22 Investment Company Act Not Applicable.
Neither the Borrower nor NBC is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
7.23 [Intentionally Omitted].
7.24 No Consent.
The Borrower's execution, delivery and performance of, and the effectuation
of the transactions contemplated under, this Agreement, the other Financing
Documents, the Xxxxxxx
National Beef Packing Company Credit Agreement 47
Beef Acquisition Documents and the Bond Documents, and the borrowings
contemplated herein, do not require the consent or approval of any other Person,
except such consents or approvals as have been obtained or will be obtained by
the Restatement Date, and such consents or approvals relating to the acquisition
of the assets of Xxxxxxx Beef for which the failure to obtain will not have a
material adverse effect on either the Borrower's or NBC's financial condition,
results of operations, business or prospects. Neither the Borrower nor NBC has
otherwise failed to obtain any material governmental consent, approval, license,
permit, franchise or other governmental authorization necessary to the ownership
of any of its properties or the conduct of its business.
7.25 Full Disclosure.
The factual information taken as a whole in the materials furnished by or
on behalf of the Borrower and NBC to the Agent, any Lender, any Issuer, the
Swing Line Lender, or any Existing Lender for purposes of or in connection with
the transactions contemplated under this Agreement, the Existing Credit
Agreement, the other Financing Documents and the Bond Documents does not contain
any untrue statement of a material fact or omit to state any material fact
necessary to keep the statements contained therein from being misleading as of
the date of this Agreement, and thereafter as supplemented by information
provided to the Agent and the Lenders, any Issuer and the Swing Line Lender in
writing pursuant to this Agreement. The financial projections and other
financial information furnished to the Agent and the Lenders by the Borrower and
NBC, and to be delivered under Section 9.1 of this Agreement, were prepared in
good faith on the basis of information and assumptions that the Borrower and NBC
each believed to be reasonable as of the date of such information.
7.26 Intellectual Property.
Except as set forth in Exhibit 7C, the Borrower and NBC each owns or
possesses (or will be licensed or otherwise have the full right to use) all
intellectual property which is necessary for the operation of their respective
businesses, without any known conflict with the rights of others. Except as set
forth in Exhibit 7L, no product of either the Borrower or NBC infringes upon any
intellectual property owned by any other Person and no claim or litigation is
pending or (to both the Borrower's and NBC's knowledge) threatened against or
affecting such Person, contesting either the Borrower's or NBC's right to sell
or to use any product or material, in any case which could have a material
adverse effect on the Borrower's consolidated financial condition, operations,
assets, or business. Neither the Borrower nor NBC has violated any of their
respective obligations with respect to any material patent, trademark, trade
name, service xxxx, copyright or license owned or used by either the Borrower or
NBC.
7.27 Compliance with Federal Food Security Act.
The Borrower and NBC each have adequate procedures in place to insure that
Collateral purchased by either the Borrower or NBC is free of security interests
in favor of Persons other than the Agent in accordance with the Federal Food
Security Act. The Borrower and NBC each will furnish, at the Agent's request,
the names and addresses of all Persons who supply Inventory to either the
Borrower or NBC or who deliver Goods to either the Borrower or NBC on
consignment or under sale or return contracts.
National Beef Packing Company Credit Agreement 48
7.28 Survival of Warranties.
All representations and warranties contained in this Agreement or any of
the other Financing Documents shall survive the execution and delivery of this
Agreement and shall be true on the date of this Agreement and on each date
hereafter on which the Borrower is required to execute and deliver a compliance
certificate to the Agent, until the Liabilities shall be paid in full and the
Commitments have been fully terminated in accordance with the provisions of this
Agreement.
7.29 CoBank Equity Interests.
So long as CoBank is a Lender under this Agreement, the Borrower will
acquire equity in CoBank in such amounts and at such times as CoBank may require
in accordance with CoBank's Bylaws and Capital Plan (as each may be amended from
time to time), except that the maximum amount of equity that the Borrower may be
required to purchase in CoBank in connection with the Loans and Swing Line Loans
made by CoBank under this Agreement shall not exceed the maximum amount
permitted by CoBank's Bylaws as of the date of this Agreement. The rights and
obligations of the parties with respect to such equity and any distributions
made on account thereof or on account of the Borrower's patronage with CoBank
shall be governed by CoBank's Bylaws, except that if CoBank sells a
participation in a portion of any Loans due to CoBank, such portion of the Loans
due to CoBank shall not be entitled to patronage distributions. A sale of a
participation interest may include certain voting rights of the participants
regarding the loans hereunder (including without limitation the administration,
servicing and enforcement thereof). The Borrower hereby consents and agrees that
the amount of any distributions with respect to the Borrower's patronage with
CoBank that are made in qualified written notices of allocation (as defined in
26 U.S.C. ss. 1388) and that are received by the Borrower from CoBank will be
taken into account by the Borrower at the stated Dollar amounts whether the
distribution is evidenced by a stock certificate or other form of written notice
that such distribution has been made and recorded in the Borrower's name on
CoBank's records. The Loans due to CoBank under this Agreement and other
Indebtedness due to CoBank hereunder shall be secured by a statutory first Lien
on all equity that the Borrower may now own or hereafter acquire in CoBank. Such
equity shall not, however, constitute security for Indebtedness due to any other
Lender under this Agreement. CoBank shall not be obligated to set off or
otherwise apply such equities to the Borrower's Indebtedness to CoBank.
ARTICLE VIII
CONDITIONS
8.1 Conditions to the Restatement Date and the Initial Borrowing.
The occurrence of the Restatement Date, each Lender's obligation to make
its Loans, the Swing Line Lender's obligation to make the Swing Line Loans, and
each Issuer's obligation to issue one or more LCs comprising a part of the
initial borrowing hereunder, are subject to the following conditions precedent:
(a) Documents.
National Beef Packing Company Credit Agreement 49
The Agent shall have received, appropriately dated and in form
and substance reasonably satisfactory to the Agent (together with
original counterparts or copies, as the case may be, for each Lender),
the documents listed on the List of Closing Documents which is
attached as Exhibit 8A.
(b) Actions and Events.
(i) Payment of Fees and Expenses.
The Borrower shall have paid all fees due on or before the
Restatement Date as specified herein or in the Agent's Letter and all
fees and expenses of or incurred by the Agent and its special and
local counsel to the extent billed on or before the Restatement Date;
(ii) No Prohibitions.
No law or regulation shall prohibit, and no order, judgment or
decree of any Governmental Authority shall prohibit, and no litigation
shall be pending or threatened which would enjoin, prohibit, restrain
or otherwise adversely affect the consummation of the transactions
contemplated under the Financing Documents, the Intercompany Financing
Documents and Xxxxxxx Beef Acquisition Documents, or which would
otherwise have a material adverse effect on either the Borrower's or
NBC's financial condition, results of operations or business;
(iii) Material Adverse Change.
No material adverse change shall have occurred since: (i) the end
of Fiscal Year 2006, or (ii) the date of the most recent Financial
Statement delivered to the Agent and the Lenders, as applicable, with
respect to:
(A) the Borrower's and its Subsidiaries' condition (financial or
otherwise), business, assets, liabilities (actual or contingent),
operations or prospects;
(B) the syndication markets for credit facilities similar in
nature to those discussed in this Agreement; or
(C) the financial, banking or capital markets, the effect of
which would have an adverse change or effect in the syndication
market;
in each case, as determined by the Agent in its sole discretion.
(iv) Wiring Instructions.
The Agent shall have received wiring instructions with respect to
the proceeds of the Loans and Swing Line Loans (if any) to be made on
the Restatement Date;
(v) Other Documents.
National Beef Packing Company Credit Agreement 50
The Borrower and NBC each shall have taken such actions, and the
Agent shall have received such other documents, as the Agent may
reasonably request; and
(vi) Compliance.
Each of the Borrower's and NBC's representations and warranties
contained in this Agreement shall be true on and as of the Restatement
Date as if such representations and warranties had been made on and as
of the Restatement Date, and no Default or Matured Default shall have
occurred and be continuing or shall exist, as evidence by a current
compliance certificate in the format required to be delivered to the
Agent from time to time in accordance with Section 9.1.
(vii) Availability.
Except in the case of a Swing Line Bond Loan, the Borrowing Base
Availability is not less than $50,000,000.
8.2 Conditions Precedent to All Borrowings, Conversions, Roll Overs and
Issuances of Letters of Credit.
Each Lender's obligation to make (or convert or roll over) a Loan, the
Swing Line Lender's obligation to make Swing Line Loans, and each Issuer's
obligation to issue an LC on the occasion of each borrowing (including the
initial borrowing), conversion, roll over or issuance of an LC shall be subject
to the further condition precedent that the following statements shall be true
(and the Borrower's acceptance of the proceeds of each borrowing, the delivery
of the notice of interest conversion under Section 3.2 in the case of a
conversion or roll over, or the delivery of the Application in the case of the
issuance of an LC, shall be deemed to constitute a representation and warranty
by the Borrower that on the date of such borrowing, conversion, roll over or
issuance of LC such statements are true) and on the date of each borrowing the
Agent shall have received a certificate (dated the date of such borrowing) from
a responsible officer of the Borrower certifying that all conditions under
Section 8.1 have been satisfied and that such statements are true:
(a) The Borrower is duly authorized and empowered to make such request
for borrowing, conversion, roll over or issuance of LC and such borrowing,
conversion, roll over or issuance of LC will not violate any Governmental
Requirement;
(b) No material adverse change has occurred with respect to the
Borrower's consolidated financial condition, business, operations or
prospects since the date of the last audited financial statements delivered
to the Agent and the Lenders;
(c) The representations and warranties set forth in Article 7 are true
and correct with the same effect as if then made (unless stated to relate
solely to an earlier date, in which case the representations and warranties
shall be true and correct as of such earlier date);
National Beef Packing Company Credit Agreement 51
(d) No event has occurred and is continuing, or would result from such
borrowing, conversion, roll over or issuance of LC, which constitutes a
Default or a Matured Default;
(e) The Borrower has delivered to the Agent its notice of borrowing or
notice of interest conversion;
(f) The Borrower has complied with any post-closing requirements of
the Agent by the deadline for such requirements; and
(g) With respect to the issuance of any LC, the Borrower has delivered
to the Agent an Application for such LC as described in Section 2.2(b).
ARTICLE IX
AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that from the date of execution hereof
until the Liabilities are paid in full, and the Commitments, all LCs and all
other obligations of the Agent, the Issuers, the Swing Line Lender and the
Lenders hereunder are finally terminated, the Borrower will comply (and will
cause NBC to comply) with the following provisions of this Article 9:
9.1 Financial Statements.
Except as otherwise expressly provided for in this Agreement, the Borrower
and NBC each shall keep proper books of record and account in which full and
true entries will be made of all dealings and transactions of or in relation to
the Borrower's and NBC's business and affairs, in accordance with GAAP
consistently applied in all material respects, and the Borrower shall cause to
be furnished to the Agent and the Lenders, from time to time and in a form
acceptable to the Agent, such information as the Agent may reasonably request,
including without limitation, the following as to the Borrower and/or NBC (as
the case may be):
(a) as soon as practicable and in any event
(1) within thirty (30) days after the end of each monthly
accounting period in each Fiscal Year (as measured at the end of such
monthly accounting period) or
(2) by the end of each Business Day (as measured at the end of
the immediately preceding Business Day) whenever the Borrowing Base
Availability at the end of any such monthly accounting period was less
than $60,000,000 until such time as the Borrowing Base Availability
exceeds $75,000,000 at the end of any subsequent monthly accounting
period,
a Borrowing Base Certificate of the chief financial or other authorized officer
of the Borrower;
(b) as soon as practicable and in any event within thirty (30)
days after the end of each fiscal quarter in each Fiscal Year (i)
consolidated (and, in the case of NBC, consolidating) statements of
income and retained earnings for such fiscal quarter and for
National Beef Packing Company Credit Agreement 52
the period from the beginning of the then current Fiscal Year to the
end of such fiscal quarter, and a consolidated (and, in the case of
NBC, consolidating) balance sheet as of the end of such fiscal
quarter, setting forth in each case in comparative form, figures for
the corresponding periods in the preceding Fiscal Year, all in
reasonable detail and certified as accurate by the chief financial or
other authorized officer, subject to changes resulting from normal
year-end adjustments, (ii) copies of statements of cash flow, and
(iii) a compliance certificate of the chief financial or other
authorized officer of the Borrower in substantially the form attached
as Exhibit 9A;
(c) as soon as practicable and in any event within one hundred
twenty (120) days after the end of each Fiscal Year, (i) audited
consolidated (and, in the case of NBC, consolidating) statements of
income, retained earnings and changes in the financial condition for
each year, and a consolidated (and, in the case of NBC, consolidating)
balance sheet for such year, setting forth in each case, in
comparative form, corresponding figures as of the end of the preceding
Fiscal Year, all in reasonable detail and satisfactory in scope to the
Agent and certified to the Borrower by KPMG LLP or such other
independent public accountants as are selected by the Borrower and
satisfactory to the Agent, whose opinion shall be in scope and
substance satisfactory to the Agent, (ii) a true and complete copy of
the management letter from KPMG LLP or such other independent public
accountants as are selected by the Borrower and satisfactory to the
Agent, in connection with such audited financial statements; and (iii)
a compliance certificate; and
(d) as soon as practicable and in any event within thirty (30)
days after the end of each Fiscal Year, a month by month operating and
capital budget for the then current Fiscal Year and annual operating
and capital budgets for the three following Fiscal Years.
9.2 Conduct of Business.
Except as contemplated by this Agreement, the Borrower and NBC each shall:
(a) not fail to maintain their respective existence and not fail to maintain in
full force and effect all material licenses, bonds, franchises, leases, patents,
contracts and other rights necessary or appropriate which if not maintained
could be reasonably expected to have a material adverse effect on the Borrower's
consolidated financial condition, operations, assets, business or prospects; (b)
continue in, and limit each of the Borrower's and NBC's operations to, the same
general line of business as that presently conducted by the Borrower and NBC;
(c) comply with all applicable laws and regulations of any Governmental
Authority, except for such laws and regulations the violation of which would
not, in the aggregate, have a material adverse effect on the Borrower's
consolidated financial condition, results of operations or business; and (d)
keep and conduct their respective businesses separate and apart from the
business of the Borrower's Affiliates; provided, however, that the Borrower may
enter into transactions with its Affiliates as long as such transactions are
entered into in the ordinary course of the Borrower's business, and as long as
such transactions are not less favorable to the Borrower than similar
transactions with non-Affiliates would be.
National Beef Packing Company Credit Agreement 53
9.3 Maintenance of Properties.
The Borrower and NBC each shall keep its real estate, leaseholds, equipment
and other fixed assets in good condition, repair and working order, normal wear
and tear excepted.
9.4 Liability Insurance.
The Borrower and NBC each shall maintain, at the Borrower's and/or NBC's
own expense (as the case may be), such public liability and property damage
insurance as is ordinarily maintained by other companies in similar businesses,
provided that in no event shall such public liability insurance provide for
coverage less than $10,000,000 per occurrence for personal injury and
$10,000,000 per occurrence for property damage. Each of the Borrower's and NBC's
public liability insurance may provide for a deductible of not more than
$500,000 per occurrence. All such policies of insurance shall be in form and
with insurers reasonably acceptable to the Agent and proper certificates
evidencing the same, shall be provided to the Agent within ten (10) days of
receipt thereof.
9.5 Property Insurance.
At the Borrower's own cost and expense, or at the cost and expense of a
Subsidiary, in the case of property owned by such Subsidiary, the Borrower shall
keep all of its and its Subsidiaries' assets fully insured, with carriers, and
in amounts acceptable to the Agent, against the hazards of fire, theft,
collision, spoilage, hail, those covered by extended or all risk coverage
insurance and such others as may reasonably be required by the Agent. The
Borrower shall cause to be delivered to the Agent the proper certificates
evidencing the same. All such policies covering the Borrower's assets shall
provide, in manner satisfactory to the Agent, that any amounts in excess of
$500,000 payable under such policies shall be payable first to the Agent (for
the ratable benefit of the Lenders), as the Agent's interest may appear. Each
such policy covering the Borrower's assets shall include a provision for thirty
(30) days' prior written notice to the Agent of any cancellation or expiration
thereof and show the Agent as lender loss payee as provided in a form of loss
payable endorsement in form and substance satisfactory to the Agent. In the
event of any loss covered by any such policy covering the Borrower's assets, the
Borrower shall direct the carrier named in such policy to make payment for such
loss to the Agent for application to the Liabilities and not to the Borrower, or
to the Borrower and the Agent jointly. The Borrower irrevocably makes,
constitutes and appoints the Agent (and all officers, employees or agents
designated by the Agent) as the Borrower's true and lawful attorney and
agent-in-fact for the purpose of making, settling or adjusting claims under such
policies of insurance after the occurrence of a Matured Default. If payment as a
result of any insurance losses under such policies of insurance covering the
Borrower's assets shall be paid by check, draft or other instrument payable to
the Borrower, or to the Borrower and the Agent jointly, the Agent (for the
ratable benefit of the Lenders) may endorse the Borrower's name on such check,
draft or other instrument, and may do such other things as the Agent may deem
advisable to reduce the same to cash. All loss recoveries received by the Agent
on account of any such insurance on the Collateral up to $2,500,000 may be
reinvested by the Borrower in the Collateral. All loss recoveries received by
the Agent on account of any such insurance on the Collateral in excess of
$2,500,000 may be applied and credited by the Agent to the Liabilities, to the
extent that there are at the time Liabilities outstanding, or reinvested by the
Borrower in the Collateral in the
National Beef Packing Company Credit Agreement 54
discretion of the Agent. The Borrower hereby assigns all of the Borrower's
insurance coverage proceeds to the Agent (for the ratable benefit of the
Lenders) as additional collateral security for the Liabilities. To the extent
actually received by the Agent in immediately available funds, the Agent shall
pay any surplus of insurance proceeds from such insurance policies in excess of
the Liabilities to the Borrower. If the Borrower fails to procure insurance as
provided in this Agreement, or to keep the same in force, or fails to perform
any of its other obligations hereunder, then the Agent may, at the Agent's
option, and without obligation to do so, obtain such insurance and pay the
premium thereon for the account of the Borrower, or make whatever other payments
the Agent may deem appropriate to protect the Agent's security for the
Liabilities. Any such payments shall be additional Liabilities of the Borrower,
each payable on demand and secured by the Collateral. Upon the Agent's written
request, copies of the policies of insurance referred to in this Section 9.5 and
in Section 9.4, together with all amendments and schedules thereto, shall be
provided to the Agent by the Borrower. The Borrower's insurance policies are
summarized on Exhibit 9B.
9.6 Fixed Charge Coverage Ratio.
If the Borrowing Base Availability is less than $50,000,000 for five (5)
consecutive Business Days, or less than $35,000,000 on any single Business Day,
during any fiscal quarter, the Borrower shall have a Fixed Charge Coverage Ratio
of at least 1.15 to 1.00 as at the end of such fiscal quarter. The Borrower
shall continue to maintain such minimum Fixed Charge Coverage Ratio at the end
of each subsequent fiscal quarter until the Borrowing Base Availability has been
greater than or equal to $50,000,000 for at least 90 consecutive days.
9.7 Pension Plans.
The Borrower and NBC each shall: (a) keep in full force and effect any and
all Plans which are presently in existence or may, from time to time, come into
existence under ERISA, unless such Plans can be terminated without material
liability to the Borrower in connection with such termination (as distinguished
from any continuing funding obligation); (b) make contributions to all Plans in
a timely manner and in an amount sufficient to comply with the requirements of
ERISA; (c) comply with all requirements of ERISA which relate to such Plans; and
(d) notify the Agent immediately upon the Borrower's or NBC's receipt of any
notice of the institution of any proceeding or other action which may result in
the termination of any Plan. Notwithstanding the requirements of this Section
9.7, either the Borrower's or NBC's failure to comply with any of said
requirements shall not constitute a Default or a Matured Default under this
Agreement, unless such failure could result in the imposition on the Borrower or
NBC of a liability in excess of $1,000,000 on a consolidated basis for both the
Borrower and NBC.
9.8 Notice of Suit, Adverse Change, ERISA Event or Default.
The Borrower and NBC each shall, as soon as possible, and in any event
within ten (10) Business Days after either the Borrower or NBC learns of the
following, give written notice to the Agent of (a) any proceeding being
instituted or threatened to be instituted by or against either the Borrower or
NBC in any federal, state, local or foreign court or before any commission or
other regulatory body (federal, state, local or foreign) for which claimed
damages exceed $2,000,000, (b) any material adverse change in the business,
assets or condition, financial or
National Beef Packing Company Credit Agreement 55
otherwise, of either the Borrower or NBC, (c) any ERISA Event and (d) the
occurrence of any Default or Matured Default. Within three (3) Business Days
after the Agent's receipt of such written notice, the Agent shall forward such
notice to the Lenders.
9.9 [Intentionally Omitted].
9.10 Books and Records; Separate Existence.
The Borrower and NBC each shall maintain proper books of record and account
in accordance with GAAP consistently applied in which true, full and correct
entries will be made of all of their respective dealings and business affairs.
If any changes in accounting principles from those used in the preparation of
the financial statements referenced in Section 7.16 are hereafter required or
permitted by GAAP and are adopted by either the Borrower or NBC with the
concurrence of its independent certified public accountants and such changes in
GAAP result in a change in the method of calculation or the interpretation of
any of the financial covenants, standards or terms found in Section 9.6 or any
other provision of this Agreement, the Borrower and NBC each agree and the
Required Lenders agree to amend any such affected terms and provisions so as to
reflect such changes in GAAP with the result that the criteria for evaluating
either the Borrower's or NBC's financial condition shall be the same after such
changes in GAAP as if such changes in GAAP had not been made. The Borrower and
NBC each shall do all things necessary to maintain its separate existence
vis-a-vis its members.
9.11 Laws and Obligations.
The Borrower and NBC each shall comply with all Governmental Requirements
in all material respects; and pay all taxes, assessments, governmental charges,
claims for labor, supplies and rent, including without limitation, taxes,
assessments, governmental charges, claims for labor, supplies and rent imposed
upon or against or with respect to the ownership, use, occupancy or enjoyment of
any real property owned by either the Borrower or NBC, or any utility service
thereon; provided, however, that the Borrower and NBC shall not be required to
pay any ad valorem or other real property taxes or any other taxes, assessments,
governmental charges or claims or charges of amounts claimed to be due in any
event, if, in any such case, the amount, applicability or validity thereof shall
currently be contested in good faith by appropriate proceedings diligently
conducted by or on behalf of either the Borrower or NBC and, if required under
GAAP, the Borrower and NBC each shall have set up adequate reserves therefor;
and provided further that, with respect to such other taxes, assessments,
governmental charges or claims, no lien is claimed by the United States or any
state or other political subdivision thereof which could have priority over the
liens and security interests granted to the Agent pursuant to the Security
Documents.
9.12 Environmental Laws.
The Borrower and NBC each shall at all times:
(a) use and operate all of its businesses and properties in compliance
in all material respects with all environmental laws; keep all necessary
permits relating to environmental and safety and health matters in effect
and remain in compliance in all material respects therewith; handle all
hazardous materials in compliance in all material
National Beef Packing Company Credit Agreement 56
respects with all applicable environmental laws; and dispose of all
hazardous materials generated by either the Borrower or NBC or at any
property owned or leased by either the Borrower or NBC at facilities or
with carriers that maintain valid permits for such disposal or
transportation under applicable environmental laws;
(b) promptly notify the Agent (and provide copies upon receipt) of all
material claims, complaints, notices or inquiries relating to the
environmental condition of its facilities and properties or its compliance
with environmental laws; and
(c) provide such other information and certifications which the Agent
may reasonably request from time to time to evidence compliance with this
Section 9.12.
9.13 Trade Accounts Payable and Producer Payables.
The Borrower and NBC each shall pay, within two (2) Business Days after the
Borrower's purchase of the related Inventory, all cattle Producer Payables other
than (a) those not yet due for livestock priced on a grade and yield matrix, and
(b) those which are not yet due and have deferred payment terms. The Borrower
and NBC each shall pay, within five (5) Business Days after either the
Borrower's or NBC's purchase of the related Inventory, all grain Producer
Payables. The Borrower and NBC may pay Producer Payables by wire transfer on the
date of presentment of checks representing payment of Producer Payables. The
Borrower and NBC each shall pay all cattle Producer Payables for livestock
priced on a grade and yield matrix and those which have deferred payment terms,
in accordance with the terms governing the same. The Borrower and NBC each shall
pay all trade accounts payable other than Producer Payables on a basis not more
than forty-five (45) days past due, except (a) accounts payable contested in
good faith or (b) accounts payable in an aggregate amount not to exceed at any
time outstanding $250,000 and with respect to which no proceeding to enforce
collection has been commenced or, to the knowledge of either the Borrower or
NBC, threatened. Packers and Stockyard Act claims shall remain: (i) unsecured at
all times; (ii) secured by LCs; (iii) secured by performance bonds satisfactory
to Agent; or (iv) secured by a trust account or other form of security permitted
by the Packers and Stockyards Act and satisfactory to the Agent.
9.14 Compliance with National Security Laws.
The Borrower shall (a) ensure, and cause each Subsidiary to ensure, that no
person who owns a controlling interest in or otherwise controls the Borrower or
any Subsidiary is or shall be listed on the Specially Designated Nationals and
Blocked Person List or other similar lists maintained by the Office of Foreign
Assets Control ("OFAC"), the Department of the Treasury, or included in any
Executive Orders, (b) not use or permit the use of the LCs or the proceeds of
the Loans or Swing Line Loans to violate any of the foreign asset control
regulations of OFAC or any enabling statute or Executive Order relating thereto,
and (c) comply, and cause each Subsidiary to comply, with all applicable Bank
Secrecy Act ("BSA") laws and regulations, as amended.
9.15 Post Closing Matters.
(a) The Borrower shall execute and deliver to the Agent, within ten
(10) days after the Restatement Date, amendments or modifications to the
Security Agreement, the
National Beef Packing Company Credit Agreement 57
Kansas Mortgage, the Pennsylvania Mortgage and the Intercompany Loan
Documents specified by the Agent in order to reflect the changes to the
Existing Credit Agreement that are set forth in this Agreement;
(b) The Borrower shall cause one or more opinions of its counsel,
covering the agreements referenced in the foregoing clause (a) in a manner
reasonably satisfactory to the Agent, to be delivered to the Agent and the
Lenders within ten (10) days after the Restatement Date; and
(c) The Borrower shall deliver to the Agent, within thirty (30) days
after the Restatement Date, agreements in form and substance satisfactory
to the Agent and meeting the requirements of Section 9-104(a)(2) of the
Code (in the case of deposit accounts) or Section 8-106(d)(2) of the Code
(in the case of securities accounts) relating to all Collateral Accounts
not at CoBank on which the Agent is not named as the bank customer (in the
case of deposit accounts) or as an entitlement holder (in the case of
securities accounts).
ARTICLE X
NEGATIVE COVENANTS
The Borrower covenants and agrees that from the date of execution hereof
until the Liabilities are paid in full, and the Commitments, all LCs and all
other obligations of the Agent, the Issuers, the Swing Line Lender and the
Lenders hereunder are finally terminated, the Borrower will comply (and will
cause NBC to comply) with the following provisions of this Article 10:
10.1 Encumbrances.
Except for those Liens presently in existence and reflected in either the
Borrower's or NBC's financial statements referred to in Section 7.16 or security
interests granted in the Security Documents or in the Intercompany Financing
Documents, neither the Borrower nor NBC shall create, incur, assume or suffer to
exist any Lien of any nature whatsoever on or with regard to any of its assets
(including, without limitation, the Collateral) other than: (a) Liens securing
the payment of taxes, either not yet due or the validity of which is being
contested in good faith by appropriate proceedings, and as to which the Borrower
or NBC (as the case may be) shall, if appropriate under GAAP, have set aside on
its books and records adequate reserves; (b) Liens securing deposits under
workers' compensation, unemployment insurance, social security and other similar
laws, or securing the performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, or securing indemnity, performance
or other similar bonds for the performance of bids, tenders, contracts (other
than for the repayment of borrowed money) or leases, or securing statutory
obligations or surety or appeal bonds, or securing indemnity, performance or
other similar bonds in the ordinary course of the Borrower's or NBC's business
(as the case may be); (c) Liens granted under the Bond Documents or pursuant to
the Water Services Agreement and Liens in favor of the Agent securing the
Liabilities; (d) zoning restrictions, easements, licenses, covenants and other
restrictions affecting the use of either the Borrower's or NBC's real property,
and other Liens on property which are subordinate to the Liens of the Agent
securing the Liabilities and which do not, in the
National Beef Packing Company Credit Agreement 58
determination of the Required Lenders (i) materially impair the use of such
property or (ii) materially lessen the value of such property for the purposes
for which the same is held by either the Borrower or NBC; (e) in the case of the
Borrower and NBC, purchase money security interests and capitalized leases
securing indebtedness permitted to be incurred under Section 10.4(d); (f) in the
case of the Borrower, Liens securing the interests of any broker in any Margin
Account; (g) in the case of the Borrower, Liens securing indebtedness permitted
to be incurred under Section 10.4(f); and (h) Liens permitted under Section
7.29.
10.2 Consolidations, Mergers or Acquisitions.
Neither the Borrower nor NBC shall recapitalize or consolidate with, merge
with, or otherwise acquire all or substantially all of the assets or properties
of any other Person; provided, however, that the Borrower may, subject to
pro-forma compliance with Section 9.6 and so long as no Default or Matured
Default is then continuing, make acquisitions for a purchase price or for
purchase prices not to exceed $25,000,000 in the aggregate in any Fiscal Year,
so long as no Default or Matured Default shall occur as a result of such
transaction.
10.3 Deposits, Investments, Advances or Loans.
Neither the Borrower nor NBC shall make or permit to exist deposits,
investments, advances or loans (other than those existing on the date of the
execution of this Agreement and disclosed to the Lenders in writing on or prior
to such date) in or to Affiliates or any other Person, except: (a) the
Collateral Accounts; (b) deposits under workers' compensation, unemployment
insurance, social security and other similar laws, or securing the performance
of bids, tenders, contracts (other than for the repayment of borrowed money) or
leases, or securing indemnity, performance or other similar bonds for the
performance of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, or securing statutory obligations or surety or appeal
bonds, or securing indemnity, performance or other similar bonds in the ordinary
course of the Borrower's or NBC's business (as the case may be); (c) in the case
of the Borrower, loans not exceeding $1,000,000 in the aggregate at any one time
outstanding; (d) demand deposits (other than payroll accounts and the Collateral
Accounts) not to exceed $250,000 in the aggregate for the Borrower and NBC
combined; (e) in the case of the Borrower, margin deposits required to be made
in connection with any Margin Account; (f) in the case of the Borrower, deposits
permitted by Section 10.19 of this Agreement; (g) in the case of the Borrower,
margin deposits required to be made in connection with the Borrower's
obligations under any Swap Contracts with any Lender or any Affiliates of a
Lender; (h) deposits in trust accounts required under the Packers and Stockyards
Act; (i) in the case of the Borrower, loans to KC Steak not to exceed
$16,000,000 in amount outstanding; (j) loans from the Borrower to NBC not to
exceed $85,000,000 in amount outstanding; (k) Cash Equivalent Investments in
which the Agent has a perfected first priority security interest, including
those credited to any deposit account or securities account (as the case may be)
at CoBank; (l) in the case of the Borrower, investments in the purchase of
Bonds; (m) in the case of the Borrower, loans to or investments in aLF Ventures
or other investments related to the development of lactoferrin not to exceed
$8,000,000 in the aggregate at any one time outstanding; (n) in the case of the
Borrower, loans to NCI and NCI Leasing not to exceed $10,000,000 in amount
outstanding; (o) investments permitted under Section 10.2; (p) in the case of
the Borrower, investments permitted under Section 7.29; (q) in the case of the
Borrower, purchases permitted by the proviso to Section
National Beef Packing Company Credit Agreement 59
10.14; (r) in the case of the Borrower and NBC, advances for travel and expenses
to the officers or managers or employees of the Borrower paid in the ordinary
course of the Borrower's business; and (s) in the case of the Borrower, other
investments not to exceed $1,000,000 in the aggregate. The Borrower shall not
permit to exist any other Deposit Accounts for the receipt of Collateral
proceeds of any type whatsoever, except the Collateral Accounts.
10.4 Indebtedness.
Except for those obligations and that Indebtedness presently in existence
and reflected in either the Borrower's or NBC's financial statements referred to
in Section 7.16 or referred to in Section 7.6, neither the Borrower nor NBC
shall incur, create, assume, become or be liable in any manner with respect to,
or permit to exist, any obligations or Indebtedness, direct or indirect, fixed
or contingent, except: (a) the Liabilities and, in the case of NBC, the
Indebtedness outstanding under the Intercompany Financing Documents; (b)
obligations secured by liens or security interests permitted under Section 10.1
or contingent obligations permitted under Section 10.5; (c) trade obligations,
Producer Payables and normal accruals in the ordinary course of either the
Borrower's or NBC's business (as the case may be) not yet due and payable, or
with respect to which the Borrower or NBC (as applicable) is contesting in good
faith the amount or validity thereof by appropriate proceedings, and then only
to the extent that either the Borrower or NBC (as applicable) has set aside on
its books adequate reserves therefor, if appropriate under GAAP; (d) other
indebtedness secured by Liens permitted under clause (e) of Section 10.1, not
exceeding $20,000,000 in the aggregate (on a combined basis for both the
Borrower and NBC) at any one time outstanding (not counting amounts referred to
in Section 13.32); (e) other unsecured Indebtedness not exceeding $5,000,000 in
the aggregate (on a combined basis for both the Borrower and NBC) at any one
time outstanding (not counting amounts referred to in Section 13.32); (f) in the
case of the Borrower, the Bonds; (g) in the case of the Borrower, the Borrower's
Class A, B or C Units subject to redemption rights to the extent classified as
debt and obligations arising from the exercise of those redemption rights; (h)
in the case of the Borrower, Swap Contracts with any Lender or any of its
Affiliates; (i) in the case of the Borrower, resales of Senior Notes previously
purchased pursuant to the proviso to Section 10.14 so long as no Default or
Matured Default shall have occurred and be continuing at the time of any such
resale or be caused by any such resale; and (j) in the case of the Borrower, any
unsecured refinancing of the Senior Notes up to $210,000,000 in aggregate
principal amount on terms reasonably satisfactory to the Required Lenders, so
long as no Default or Matured Default shall have occurred and be continuing or
would result from such refinancing.
10.5 Guarantees and Other Contingent Obligations.
Neither the Borrower nor NBC shall incur any Guaranty Obligations, except:
(a) for endorsements of negotiable Instruments for collection in the ordinary
course of business; and (in the case of the Borrower) (b) guaranties of the
Indebtedness (including capitalized leases) or operating lease obligations of
Subsidiaries of the Borrower to the extent permitted under Section 10.4 or
10.12, respectively; provided, however, that the amount payable under such
guaranties shall (i) in the case of guaranteed Indebtedness (including
capitalized lease obligations) be deemed to be "Funded Debt" for purposes of
Section 9.6 of this Agreement, and (2) in the case of guaranteed operating lease
obligations, the annual amount payable shall be included in the
National Beef Packing Company Credit Agreement 60
computation of the Borrower's annual financial obligations for purposes of
Section 10.12 of this Agreement.
10.6 Disposition of Property.
Neither the Borrower nor NBC shall sell, lease, transfer or otherwise
dispose of any of its properties, assets or rights, to any Person, except (a)
sales or other dispositions of Inventory or obsolete Equipment in the ordinary
course of the Borrower's or NBC's business (as applicable), (b) as permitted in
the Security Agreement, (c) the conveyances of the Dodge City Facilities
contemplated by the Bond Documents and (d) sales, transfers, dispositions of
assets other than as set forth above of up to $5,000,000 (on a combined basis
for both the Borrower and NBC) during any single Fiscal Year. The Agent hereby
covenants that upon the sale or disposition of any asset permitted hereunder it
shall release its Lien on such asset.
10.7 Capital Investment Limitations.
The Borrower shall not make or become legally obligated to make any Net
Capital Expenditures exceeding $50,000,000 in the aggregate during any Fiscal
Year.
10.8 ERISA Matters.
Neither the Borrower nor NBC shall at any time engage in a transaction
which could be subject to Section 4069 or 4212(c) of ERISA, or permit any Plan
to (a) engage in any non-exempt "prohibited transaction" (as defined in Section
4975 of the IRC); (b) fail to comply with ERISA or any other applicable laws; or
(c) incur any material "accumulated funding deficiency" (as defined in Section
302 of ERISA), which, with respect to each event listed above, could be
reasonably expected to have a material adverse effect on the Borrower's
consolidated business, assets, operations, financial condition or prospects.
10.9 [Intentionally Omitted].
10.10 Equity Distributions.
The Borrower shall not directly or indirectly, make any Equity
Distributions, except that (a) the Borrower may make quarterly distributions to
its Members in respect of Borrower's taxable income, in amounts proportionate to
the respective percentage interests of each of such Member so that each such
Member shall have received an amount equal to 48% of such Member's share of the
Borrower's net taxable income for the relevant quarter, provided that if the
aggregate distribution made during any calendar year exceeds 48% of the
Borrower's actual net taxable income for such year, then the excess distribution
for such tax year shall be applied to the permitted distributions for the
immediately subsequent quarters, Dollar-for-Dollar, until all such excess has
been applied to future permitted distributions, and (b) the Borrower may,
provided that no Default or Matured Default has occurred and is continuing or
would be caused thereby, make distributions to pay an annual 5% return on its
Class A Units.
10.11 Amendment of Organizational Documents.
National Beef Packing Company Credit Agreement 61
Neither the Borrower nor NBC shall amend any agreement, instrument or
document pertaining to either the Borrower's or NBC's governance, in any manner
that affects either of the Borrower's or NBC's name or jurisdiction of
organization or that otherwise could reasonably be expected to have a material
adverse effect on the rights, powers or remedies of the Agent and/or the
Lenders.
10.12 Lease Limitations.
The Borrower's and NBC's combined annual financial obligations under all
operating leases and other similar agreements (excluding capitalized leases,
Owner/Operator Agreements and the water sublease contemplated by the Water
Services Agreement) shall not exceed $20,000,000 in the aggregate in any of the
Borrower's Fiscal Years.
10.13 Use of Other Fictitious Names.
Neither the Borrower nor NBC shall use any fictitious name except for the
names referred to in Section 7.7 of this Agreement.
10.14 Prepayment of Debt.
The Borrower shall not directly or indirectly prepay, redeem or purchase
prior to maturity, or deposit funds or property for the prepayment, redemption
or purchase prior to maturity of (a) any Indebtedness of the Borrower which is
subordinated to the payment of any portion of the Liabilities or (b) the Senior
Notes; provided, however, that (i) the Borrower may make purchases of up to
$50,000,000 in cumulative purchase price (including any premium) of Senior Notes
so long as no Default or Matured Default shall have occurred and be continuing
at the time of any such purchase or be caused by any such purchase, and (ii) the
Borrower may refinance the Senior Notes in the manner contemplated in the
definition of Senior Notes and Section 10.4(j).
10.15 Fiscal Year.
Neither the Borrower nor NBC shall change its Fiscal Year or any of the
fiscal quarters or monthly accounting periods therein.
10.16 Limitations on Bank Accounts.
Neither the Borrower nor NBC shall maintain any cash in any bank accounts
other than those listed on Exhibit 7J or as approved by the Agent from time to
time.
10.17 Use of Trademarks.
Neither the Borrower nor NBC shall use any trademarks with respect to
Inventory except for such trademarks as have been properly licensed to the
Agent.
10.18 Amendments of Other Documents.
National Beef Packing Company Credit Agreement 62
The Borrower shall not without the Agent's advance written consent (which
shall not be unreasonably withheld) amend, waive any obligation owed to the
Borrower or NBC under, or grant any consents under (a) any Bond Document or any
Intercompany Financing Document, (b) in any material respect, any Xxxxxxx Beef
Acquisition Document, (c) any indenture or other document, instrument or
agreement relating to the Senior Notes to shorten the maturity of, change the
subordination provisions of, increase the rate of interest on or grant security
or any Subsidiary guaranty for such Senior Notes, or (d) the Water Services
Agreement dated as of December 29, 2004 by and between the Borrower and the
City, which constitutes a part of the Water Services Agreement (as defined in
the Article I), in any way that is reasonably likely to be prejudicial to the
interests of the Agent or the other holders of the Liabilities.
10.19 Ownership of Cattle and Deposits on Cattle with Feeders.
The Borrower and NBC together shall not at any time own more than 25,000
head of cattle, whether such cattle are hedged or unhedged. The Borrower and NBC
together shall not at any time own more than 10,000 head of Unhedged Cattle to
be finished in any single month. In determining the number of hedged or Unhedged
Cattle for purposes of this Section 10.19, any partial ownership interests of
either the Borrower or NBC in cattle shall be counted at the percentage of
interest owned. As used herein, the phrase "Unhedged Cattle" shall refer to
cattle which are not hedged with either futures contracts or option contracts at
prices that limit either the Borrower's or NBC's combined potential losses to no
more than $50 per head. Notwithstanding the provisions of Section 10.3, the
Borrower and NBC shall be allowed to make deposits on cattle with such feeders
as are approved by the Agent, up to $75 per head, not to exceed $2,000,000 (on a
combined basis for both the Borrower and NBC) at any time outstanding in the
aggregate (the "Feeder Deposits"). The Feeder Deposits may not be treated as
tangible assets of either the Borrower or NBC for the purposes of determining
compliance with the covenants set forth herein without the prior approval of the
Required Lenders.
10.20 Enforcement of Certain Documents.
The Borrower (and, in the case of the Xxxxxxx Beef Acquisition Documents,
NBC) shall not at any time fail to enforce, or fail to cause its relevant
Subsidiaries to enforce, in all material respects, any of the Intercompany
Financing Documents or the Xxxxxxx Beef Acquisition Documents. Furthermore, the
Borrower shall not permit the outstanding principal amount of NBC's indebtedness
to the Borrower under the Intercompany Loan Documents to which NBC is a party to
be less than $45,000,000 without the Agent's advance written consent.
ARTICLE XI
DEFAULT REMEDIES
11.1 Acceleration.
With respect to: (a) any Matured Default described in clauses (i), (j) and
(k) of the definition thereof, all of the Liabilities shall automatically become
immediately due and payable, the Borrower shall without demand pay into the
Holding Account an amount equal to the aggregate undrawn amount of all
outstanding LCs, and the obligations of the Lenders to make
National Beef Packing Company Credit Agreement 63
Loans, the Swing Line Lender to make Swing Line Loans, and the Issuers to issue
or cause the issuance of LCs and the Commitments shall automatically terminate,
without presentment, demand, protest or further notice (including without
limitation, notice of intent to accelerate and notice of acceleration) of any
kind, all of which are expressly waived by the Borrower, and (b) any other
Matured Default, the Agent may with the consent of the Required Lenders, and
shall at the request of the Required Lenders, by notice to the Borrower and the
Lenders, (i) declare the several obligations of the Lenders to make Loans, the
Swing Line Lender to make Swing Line Loans, and the Issuers and to issue or
cause the issuance of LCs and the Commitments to be terminated, whereupon such
obligations and the Commitments of each Lender shall terminate, and (ii) declare
all of the Liabilities to be due and payable, whereupon the Liabilities shall
become and be due and payable and the Borrower shall be required to pay into the
Holding Account an amount equal to the aggregate undrawn amount of all
outstanding LCs, without presentment, demand, protest or further notice
(including without limitation, notice of intent to accelerate and notice of
acceleration) of any kind, all of which are expressly waived by the Borrower.
11.2 Other Remedies.
Upon the occurrence and during the continuance of any Matured Default, the
Agent may with the consent of the Required Lenders (subject to the provisions of
the other Financing Documents), and shall at the direction of the Required
Lenders, proceed: (a) to protect and enforce the rights of the Lenders by suit
in equity, by action at law or both, whether for the specific performance of any
covenant or agreement contained in this Agreement or in any other Financing
Document or in aid of the exercise of any power granted in this Agreement or any
other Financing Document, (b) to enforce the payment of the Liabilities, or (c)
to foreclose upon any Liens granted pursuant to the Security Documents and other
Financing Documents in the manner set forth therein; it being intended that no
remedy conferred herein or in any of the other Financing Documents is to be
exclusive of any other remedy, and each and every remedy contained herein or in
any other Financing Document shall be cumulative and shall be in addition to
every other remedy given hereunder and under the other Financing Documents, or
at any time existing at law or in equity or by statute or otherwise.
ARTICLE XII
THE AGENT
12.1 Authorization and Action.
Each Lender and each Issuer appoints the Agent as its Agent under, and
irrevocably authorizes the Agent (subject to Section 12.7) to take such action
on its behalf and to exercise such powers under any Financing Document and under
any Bond Documents as are delegated to the Agent by the terms thereof, together
with such powers as are reasonably incidental thereto. Without limitation of the
foregoing, each Lender and each Issuer expressly authorizes the Agent to
execute, deliver, and perform its obligations under each of the Financing
Documents to which the Agent is a party, and to exercise all rights, powers, and
remedies that the Agent may have thereunder. As to any matters not expressly
provided for by this Agreement (including without limitation, enforcement or
collection of the Liabilities), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act, or to refrain from
acting
National Beef Packing Company Credit Agreement 64
(and shall be fully protected in so acting or refraining from acting), upon the
instructions of the Required Lenders (or such other groups of Lenders, the
relevant Issuer and/or the Swing Line Lender as may be required pursuant to a
particular provision of this Agreement or another Financing Document), and such
instructions shall be binding upon all the Lenders, the Issuers, the Swing Line
Lender and all holders of and participants in any Note; provided, however, that
the Agent shall not be required to take any action which exposes the Agent to
personal liability or which is contrary to this Agreement or applicable law. The
Agent agrees to give to each Lender and each Issuer prompt notice of each notice
given to it by either the Borrower or NBC, as applicable, pursuant to the terms
of any Financing Document.
12.2 Agent's Reliance, Etc.
Neither the Agent nor any of its directors, officers, agents or employees
shall be liable to any Lender or Issuer for any action taken or omitted to be
taken by it or them under or in connection with any Financing Document or Bond
Document, except for its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, the Agent: (a) may treat the
original or any successor holder of any Note as the holder thereof until it
receives notice from the Lender which is the payee of such Note concerning the
assignment of such Note; (b) may employ and consult with legal counsel
(including counsel for either the Borrower or NBC), independent public
accountants, and other experts selected by it and shall not be liable to any
Lender for any action taken, or omitted to be taken, in good faith by it or them
in accordance with the advice of such counsel, accountants, or experts received
in such consultations and shall not be liable for any negligence or misconduct
of any such counsel, accountants or other experts; (c) makes no warranty or
representation to any Lender or Issuer and shall not be responsible to any
Lender or Issuer for any opinions, certifications, statements, warranties or
representations made in or in connection with any Financing Document; (d) shall
not have any duty to any Lender or Issuer to ascertain or to inquire as to the
performance or observance of any of the terms, covenants, or conditions of any
Financing Document or any other instrument or document furnished pursuant
thereto or to satisfy itself that all conditions to and requirements for any
credit extension have been met or that the Borrower is entitled to any credit
extension or to inspect the property (including the books and records) of either
the Borrower or NBC; (e) shall not be responsible to any Lender or Issuer for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of any item of Collateral or Financing Document, Bond Document or any
other instrument or document furnished pursuant thereto or hereto, nor for the
creation, perfection or priority of any Liens purported to be created by any
Financing Documents; and (f) shall incur no liability under or in respect of
this Agreement by acting upon any notice, consent, certificate, or other
instrument or writing (which may be by telegram, cable, telex, or otherwise)
believed by it to be genuine and signed or sent by the proper party or parties.
12.3 Notices of Defaults.
Except as provided in this Section 12.3, the Agent shall not be deemed to
have knowledge of the occurrence of a Default or a Matured Default unless the
Agent has received written notice from a Lender, an Issuer or either the
Borrower or NBC specifying such Default or Matured Default and stating that such
notice is a "Notice of Default". Notwithstanding the foregoing, the Agent shall
be deemed to have knowledge of the occurrence of a Default or a
National Beef Packing Company Credit Agreement 65
Matured Default: (a) consisting of the non-payment of principal or interest, on
the due date such principal or interest, (b) on the date the Agent has received
a compliance certificate of the Borrower as required by Section 9.1, which
compliance certificate discloses (without review of any financial statements
attached thereto) the existence of any Default or Matured Default, and (c) ten
(10) Business Days after the date the Agent has received a compliance
certificate of the Borrower as required by Section 9.1, which compliance
certificate (after review of any financial statements attached thereto) would
disclose the existence of any Default or Matured Default. In the event that the
Agent obtains such knowledge of the occurrence of a Default or a Matured
Default, the Agent shall within three (3) Business Days thereafter, give prompt
notice thereof to the Lenders and the Issuers. The Agent shall (subject to
Section 11.1) take such action with respect to such Default as may be directed
by the Required Lenders; provided that, unless and until the Agent shall have
received the directions referred to in Section 11.1, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default as it shall deem advisable and in the best interest of
the Lenders and the Issuers.
12.4 The Agent as a Lender, Affiliates.
With respect to its Commitment, any Loan or Swing Line Loan made by it, any
LC issued by it and any Note issued to it, the Agent shall have the same rights
and powers under this Agreement as any other Lender and may exercise the same as
though it were not the Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include the Agent in its individual capacity. The
Agent and its affiliates may accept deposits from, lend money to, act as trustee
under indentures of, and generally engage in any kind of business with, the
Borrower, any of its respective Affiliates and any Person who may do business
with or own securities of the Borrower or any such Affiliate, all as if the
Agent were not the Agent and without any duty to account therefor to the
Lenders.
12.5 Non Reliance on Agent and Other Lenders.
Each Lender and each Issuer agrees that it has, independently and
without reliance on the Agent, any other Issuer, Lender or the Swing Line
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of both the Borrower and NBC and its
decision to enter into the transactions contemplated by the Financing Documents
and that it will, independently and without reliance upon the Agent, any other
Issuer, Lender or Swing Line Lender, 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 any Financing Document. The Agent
shall not be required to keep itself informed as to the performance or
observance by the Borrower, or NBC, or any other Person of any Financing
Document, Bond Document, Intercompany Financing Document or Xxxxxxx Beef
Acquisition Document, or to inspect the properties or books of either the
Borrower or NBC. Except for notices, reports, and other documents and
information expressly required to be furnished to the Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender 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. Notwithstanding the
foregoing, the Agent will, upon the request of any Lender or Issuer, provide to
such Person, at such Person's expense, copies of any and all
National Beef Packing Company Credit Agreement 66
written information provided to the Agent by either the Borrower or NBC (unless
concurrently delivered to such Person by either the Borrower or NBC).
12.6 Indemnification of the Agent.
Notwithstanding anything to the contrary herein contained, the Agent shall
be fully justified in failing or refusing to take any action unless it shall
first be indemnified to its satisfaction by the Lenders and the Issuers against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, and disbursements of any kind or nature
whatsoever which may be imposed on, incurred by or asserted against the Agent in
any way relating to or arising out of its taking or continuing to take any
action. Each Lender agrees to indemnify the Agent (to the extent not reimbursed
by the Borrower), according to such Lender's Total Percentage, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses and disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against the Agent
in any way relating to or arising out of any Financing Document, Intercompany
Loan Document, Xxxxxxx Beef Acquisition Document or Bond Document or any action
taken or omitted by the Agent under any Financing Document, Intercompany Loan
Document, Xxxxxxx Beef Acquisition Document or Bond Document (which indemnity
shall survive any termination of this Agreement); provided that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, or disbursements
resulting from the gross negligence or willful misconduct of the Person being
indemnified; and provided further, that it is the intention of each Lender to
indemnify the Agent against the consequences of the Agent's own negligence,
whether such negligence be sole, joint, concurrent, active or passive. Without
limiting the foregoing, each Lender agrees to reimburse the Agent promptly upon
demand for its Total Percentage of any out-of-pocket expenses (including
attorneys' fees) incurred by the Agent in connection with the preparation,
administration, or enforcement of, or legal advice in respect of rights or
responsibilities under, any Financing Document, Intercompany Loan Document,
Xxxxxxx Beef Acquisition Document or Bond Document, to the extent that the Agent
is not reimbursed for such expenses by the Borrower. If any indemnity in favor
of the Agent shall be or become, in the Agent's determination, inadequate, the
Agent may call for additional indemnification from the Lenders and/or the
Issuers and cease to do the acts indemnified against hereunder unless such
additional indemnity is given.
12.7 Successor Agent.
The Agent may resign at any time as Agent under the Financing Documents by
giving written notice thereof to the Lenders, the Issuers, the Swing Line Lender
and the Borrower and may be removed at any time with or without cause by the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint a successor Agent with the prior written consent
of the Borrower, such consent not to be unreasonably withheld. If no successor
Agent shall have been so appointed by the Required Lenders or shall have
accepted such appointment within sixty (60) days after the retiring Agent's
giving of notice of resignation or the Required Lenders' removal of the Agent,
then the retiring Agent may, on behalf of the Lenders and the Issuers, appoint a
successor Agent with the Borrower's prior written consent, such consent not to
be unreasonably withheld, which shall be a bank or other financial institution
having a combined capital and surplus of at least $500,000,000 or its
equivalent. Upon the
National Beef Packing Company Credit Agreement 67
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall be entitled to receive from the retiring Agent such
documents of transfer and assignment as such successor Agent shall reasonably
request and 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 under this Agreement. After
the retiring Agent's resignation or removal as Agent, the provisions of this
Article XII shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement.
12.8 Verification of Borrowing Notices.
The Agent shall have no duty to verify the authenticity of the signature
appearing on any notice of borrowing, and with respect to any oral request for
an advance, the Agent shall have no duty to verify the identity of any Person
representing himself as one of the natural Persons authorized to make such
request on behalf of the Borrower. Neither the Agent nor any Lender shall incur
any liability to the Borrower in acting upon any telephonic notice referred to
above which the Agent or such Lender believes in good faith to have been given
by a duly authorized Person authorized to borrow on behalf of the Borrower or
for otherwise acting in good faith.
12.9 Action Upon Instructions of the Lenders.
The Agent agrees, upon the written request of the Required Lenders (or such
other groups of Lenders, the Issuers and/or the Swing Line Lender as may be
required pursuant to a particular provision of this Agreement or another
Financing Document), to take any action of the type specified in the Financing
Documents or Bond Document as being within the Agent's rights, duties, power or
discretion. The Agent shall in all cases be fully protected in acting, or in
refraining from acting in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Required Lenders, the Issuers,
the Swing Line Lender and on all holders of the Notes. In the absence of a
request by the Required Lenders, the Agent shall have authority, in its sole
discretion, to take or not to take any action, unless the Financing Documents
specifically require the consent of the Required Lenders, of all of the Lenders
or of other specified Persons.
12.10 Action Upon Request of the Borrower.
If any of the events described in Sections 5.2, 5.3, 5.4 or 5.5 cause the
Borrower to be required to pay to any one of the Lenders other than the Agent,
costs associated with the LIBOR Rate Advances which are materially
disproportionate to such costs required to be paid to the other Lenders, the
Borrower may send a written request to the Agent to seek the approval of the
Required Lenders to require such Lender to assign all of its rights and
obligations under this Agreement to another Person in accordance with Section
13.23. The Agent may refuse to honor any such request for any reason in its sole
discretion, including without limitation, the Agent's inability to identify
another Person willing to be the Assignee. If the Agent does honor any such
request, the Agent shall send to all of the Lenders a written notice of its
intent to honor such request, which notice shall identify the proposed assigning
Lender and the proposed Assignee. If the Agent does not obtain the Required
Lenders' written approval of any such proposed assignment within ten (10)
Business Days after such written notice, the Required Lenders shall
National Beef Packing Company Credit Agreement 68
be conclusively deemed not to have consented to such request, and neither the
Agent nor any of the other Lenders shall be required to take further action with
respect thereto. If the Agent obtains the Required Lender's written approval of
any such proposed assignment within ten (10) Business Days after such written
notice, the Lender affected thereby shall promptly execute such agreements,
instruments and documents and take such actions as may be necessary or
appropriate to assign all of its rights and obligations under this Agreement to
the proposed Assignee in accordance with Section 13.23. Under no circumstances,
however, shall the Lender affected thereby be required to bear any of the costs
or expenses associated with the proposed assignment, all of which costs and
expenses shall be the sole responsibility of the Borrower, and the Lender
affected thereby may defer compliance with its obligations under this Section
12.10 until the Borrower has deposited with such Lender such amount as such
Lender reasonably believes will be sufficient to reimburse such Lender for such
costs and expenses.
12.11 Additional Functions of Certain Lenders.
The Lenders identified in this Agreement as a "Syndication Agent",
"Documentation Agent" and/or a "Lead Arranger" shall not have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such.
ARTICLE XIII
MISCELLANEOUS
13.1 Timing of Payments.
For purposes of determining the outstanding balance of the Liabilities,
including the computations of interest which may from time to time be owing to
the Lenders, the receipt by the Agent of any check or any other item of payment
whether through a blocked account or lockbox or otherwise, shall not be treated
as a payment on account of the Liabilities until such check or other item of
payment is actually received by the Agent at its office in Greenwood Village,
Colorado and is paid to the Agent in cash or a cash equivalent.
13.2 Attorneys' Fees and Costs.
If at any time or times hereafter the Agent employs counsel in connection
with protecting or perfecting the Agent's security interest in the Collateral or
in connection with any matters arising out of this Agreement, whether: (a) to
commence, defend or intervene in any litigation or to file a petition,
complaint, answer, motion or other pleading; (b) to take any other action in or
with respect to any suit or proceeding (bankruptcy or otherwise); (c) to consult
with officers of the Agent to advise the Agent or to draft documents for the
Agent in connection with any of the foregoing or in connection with any release
of the Agent's claims or security interests or any proposed extension, amendment
or refinancing of the Liabilities; (d) to protect, collect, lease, sell, take
possession of, or liquidate any of the Collateral; or (e) to attempt to enforce
or to enforce any security interest in any of the Collateral, or to enforce any
rights of the Agent, the Issuers, the Swing Line Lender or the Lenders to
collect any of the Liabilities; then in any of such events, all of the
reasonable attorneys' fees arising from such services, and any expenses, costs
and charges relating thereto, including without limitation, all fees of all
paralegals, legal assistants and other staff employed by such attorneys whether
outside the Agent or in the
National Beef Packing Company Credit Agreement 69
Agent's legal department, together with interest at the Default Rate provided
for in Section 3.1(c) if a Matured Default has occurred, or at the highest
interest rate set forth in any promissory note referred to herein, shall
constitute additional Liabilities, payable on demand and secured by the
Collateral. In addition, if the Liabilities have been accelerated in accordance
with Section 11.1, and thereafter any Lender employs counsel in connection with
protecting such Lender's interest in the Collateral or (f) to commence, defend
or intervene in any litigation or to file a petition, complaint, answer, motion
or other pleading; (g) to take any other action in or with respect to any suit
or proceeding (bankruptcy or otherwise); (h) to protect, collect, lease, sell,
take possession of, or liquidate any of the Collateral; or (i) to attempt to
enforce or to enforce any security interest in any of the Collateral, or to
enforce any of such Lender's rights to collect any of the Liabilities; then in
any of such events, all of the reasonable attorneys' fees arising from such
services, and any expenses, costs and charges relating thereto, including
without limitation, all fees of all paralegals, legal assistants and other staff
employed by such attorneys whether outside the Lender or in the Lender's legal
department, together with interest at the Default Rate provided for in Section
3.1(c), or at the highest interest rate set forth in any promissory note
referred to herein, shall constitute additional Liabilities, payable on demand
and secured by the Collateral. All of the rights to reimbursement of expenses
set forth in this Section 13.2 that are applicable to the Agent, shall also be
applicable to CoBank and Rabobank in their respective capacities as an Issuer
and/or as the Swing Line Lender.
13.3 Expenditures by the Agent.
In the event that the Borrower shall fail to pay taxes, insurance,
assessments, costs or expenses which the Borrower is, under any of the terms
hereof, or of any of the other Financing Documents or of any of the Bond
Documents, required to pay, or fails to keep its assets free from other security
interests, liens or encumbrances, except as permitted herein, the Agent may, in
its sole discretion and without obligation to do so, make expenditures for any
or all of such purposes, and the amount so expended, together with interest at
the Default Rate provided for in Section 3.1(c), shall constitute additional
Liabilities, payable on demand and secured by the Collateral.
13.4 The Agent's Costs as Additional Liabilities.
The Borrower shall reimburse the Agent for all expenses and fees paid or
incurred in connection with the documentation, negotiation and closing of the
loans and other financial accommodations described in this Agreement (including
without limitation, filing and recording fees, and the fees, Synd-Trak fees (up
to $6,000) and expenses of the Agent's attorneys, paralegals and legal
assistants, whether outside the Agent or in its legal department, and whether
such expenses and fees are incurred prior to or after the Closing Date). The
Borrower further agrees to reimburse the Agent for all expenses and fees paid or
incurred in connection with the documentation of any renewal or extension of the
loans, any additional financial accommodations, or any other amendments to this
Agreement. All costs and expenses incurred by the Agent with respect to such
negotiation and documentation together with interest at the highest interest
rate set forth in any promissory note referred to herein, shall constitute
additional Liabilities, payable on demand and secured by the Collateral. All of
the rights to reimbursement of expenses set forth in this Section 13.5 that are
applicable to the Agent, shall also be applicable
National Beef Packing Company Credit Agreement 70
to CoBank and Rabobank in their respective capacities as an Issuer and/or as the
Swing Line Lender.
13.5 Indemnification.
(a) The Borrower agrees to indemnify and hold the Agent, each Issuer,
the Swing Line Lender and the Lenders and each of their respective
officers, directors, employees and agents harmless from and against any and
all claims, demands, liabilities, losses, damages, penalties, costs, and
expenses (including without limitation, reasonable attorneys' fees)
relating to or in any way arising out of the possession, use, operation or
control of any of the Borrower's assets (irrespective of whether such party
is a party to the action for which indemnification hereunder is sought).
The Borrower shall pay or cause to be paid all license fees, bonding
premiums and related taxes and charges, and shall pay or cause to be paid
all of the Borrower's real and personal property taxes, assessments and
charges and all of the Borrower's franchise, income, unemployment, use,
excise, old age benefit, withholding, sales and other taxes and other
governmental charges assessed against the Borrower, or payable by the
Borrower, at such times and in such manner as to prevent any penalty from
accruing or any lien or charge from attaching to the Borrower's property,
provided that the Borrower shall have the right to contest in good faith,
by an appropriate proceeding promptly initiated and diligently conducted,
the validity, amount or imposition of any such tax, and upon such good
faith contest to delay or refuse payment thereof, if (i) the Borrower
establishes adequate reserves to cover such contested taxes; and (ii) such
contest does not and will not have a material adverse effect on the
Borrower's consolidated financial condition of the Borrower, the Borrower's
ability to pay any of the Liabilities or the priority or value of the
Agent's security interests in the Collateral.
(b) The Borrower further agrees to defend, protect, indemnify and hold
harmless the Agent, each Issuer, the Swing Line Lender, the Lenders, their
respective Affiliates and the respective directors, officers, employees,
attorneys and agents of each of such Persons (each of the foregoing being
an "Indemnitee" and all of the foregoing being collectively the
"Indemnitees") from and against any and all claims, actions, damages,
liabilities, judgments, costs and expenses, including all reasonable fees
and disbursements of counsel which may be incurred in the investigation or
defense of any matter (collectively the "Indemnified Amounts") imposed
upon, incurred by or asserted against any Indemnitee, whether direct,
indirect or consequential and whether based on any federal, state, local or
foreign laws or regulations (including without limitation securities laws,
Environmental Laws, commercial laws and regulations), under common law or
on equitable cause, or on contract or otherwise:
(i) by reason of, relating to or in connection with the
execution, delivery, performance or enforcement of any Financing
Document, Bond Document, Intercompany Financing Document, Xxxxxxx Beef
Acquisition Document or LC, any commitments relating thereto, or any
transaction contemplated by any Financing Document, Bond Document,
Intercompany Financing Document, Xxxxxxx Beef Acquisition Document or
LC; or
National Beef Packing Company Credit Agreement 71
(ii) by reason of, relating to or in connection with any
credit extended or used under, or transaction financed by, the
Financing Documents, the Bond Documents, the Intercompany
Financing Documents, the Xxxxxxx Beef Acquisition Documents or
any LC or any act done or omitted by any Person, or the exercise
of any rights or remedies thereunder, including the acquisition
of any Collateral by the Agent by way of foreclosure of the Lien
thereon, deed or xxxx of sale in lieu of such foreclosure or
otherwise;
provided, however, that the Borrower shall not be liable to any Indemnitee for
any portion of such Indemnified Amounts resulting from such Indemnitee's gross
negligence or willful misconduct. In the event this indemnity is unenforceable
as a matter of law as to a particular matter or consequence referred to herein,
it shall be enforceable to the full extent permitted by law. Furthermore, if and
to the extent that any of the foregoing agreements described in this Section
13.5 may be unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Amounts that is permissible under applicable law.
(c) The indemnification set forth in this Section 13.5 applies,
without limitation, to any act, omission, event or circumstance existing or
occurring on or prior to the later of the Termination Date or the date of
payment in full of the Liabilities, including specifically Liabilities
arising under clause (a)(ii) of this Section. The indemnification
provisions set forth above shall be in addition to any liability the
Borrower may otherwise have. Without prejudice to the survival of any other
obligation of the Borrower hereunder, the indemnities and obligations of
the Borrower contained in this Section shall survive the payment in full of
the Liabilities.
(d) Furthermore, as applied to Liabilities arising under Environmental
Laws, the indemnification set forth in this Section 13.5 (i) shall in no
way be waived, released, discharged, reduced, mitigated or otherwise
affected by the Agent's, any Issuer's, the Swing Line Lender's or any
Lender's extension of credit under the Financing Documents with knowledge
of the matters described in documents listed on Exhibit 7I or otherwise
made known to the Agent or the Agent's counsel in connection with this
Credit Agreement or the transactions contemplated hereby; and (ii) shall be
deemed continuing for the benefit of any purchaser at a foreclosure or
other sale under any mortgage and any transferee of the title from the
Agent, and shall survive the satisfaction or release of any mortgage, any
foreclosure of or other sale under a mortgage and/or any acquisition of
title to a mortgaged property or any part thereof by the Agent, or anyone
claiming by, through or under the Agent, by deed in lieu of foreclosure or
otherwise. Notwithstanding the foregoing, this indemnification shall not
apply with respect to any loss, damage, liability, cost or expense related
to a mortgaged property which the Borrower proves was caused solely by or
resulted solely from any act or omission of any Person, other than the
Borrower or an agent, employee, invitee or contractor of the Borrower,
which occurred after the Agent or anyone claiming by, through or under the
Agent acquired title to the relevant mortgaged property (by foreclosure of
the relevant mortgage or deed in lieu of foreclosure or otherwise) and
control of such mortgaged property. So long as the Borrower has control of
any such mortgaged properties, the Borrower agrees that the Indemnitees
shall have no responsibility for, and the Borrower hereby releases the
National Beef Packing Company Credit Agreement 72
Indemnitees from responsibility for, damage or injury to human health,
property, the environment or natural resources caused by hazardous
substances, pollutants or contaminants or for abatement, clean-up,
detoxification, removal or disposal of, or otherwise with respect to,
hazardous substance, pollutants and contaminants, provided, however, that
the Borrower shall not be liable to any Indemnitee for any portion of such
Liabilities resulting from such Indemnitee's gross negligence or willful
misconduct.
13.6 Inspection.
The Agent (by and through its officers and employees), or any Person
designated by the Agent in writing, shall have the right, from time to time upon
five (5) Business Days notice if there has not occurred a Matured Default and
without notice after the occurrence of a Matured Default, to call at the
Borrower's and/or any of its Subsidiaries' place or places of business (or any
other place where Collateral or any information relating thereto is kept or
located) during reasonable business hours, and without hindrance or delay, to:
(a) inspect, audit, check and make copies of and extracts from such Person's
books, records, journals, orders, receipts and any non-privileged correspondence
and other data relating to such Person's business or to any transactions between
the parties to this Agreement; (b) make such verification concerning the
Collateral (or any collateral underlying the Intercompany Loan Documents) as the
Agent may consider reasonable under the circumstances; and (c) review operating
procedures, review maintenance of property and discuss such Person's affairs,
finances and business with such Person's officers, employees or directors. The
Borrower agrees to pay to the Agent an annual audit fee in accordance with the
Agent's Letter. The Agent will, on the request of any Lender, provide to such
Lender a copy of any written report prepared by the Agent in connection with any
inspection or audit made pursuant to this Section 13.6.
13.7 Examination of Banking Records.
The Borrower consents to the examination by the Agent, the Agent's
officers, employees and agents, or any of them, whether or not there shall have
occurred a Matured Default, of any and all of the Borrower's banking records,
wherever they may be found, and directs any Person which may be in control or
possession of such records (including, without limitation, any bank, other
financial institution or accountant) to provide such records to the Agent and
the Agent's officers, employees and agents, upon their request. The Agent may
conduct such examination with reasonable notice to the Borrower at the option of
the Agent, any such notice being waived by the Borrower. Nothing in this Section
13.7 shall be construed to require any accountant to provide materials to the
Agent or the Agent's officers, employees and agents, which is subject to a valid
privilege.
13.8 Governmental Reports.
The Borrower will furnish to the Agent, upon the reasonable request of the
Agent, copies of the reports of examinations or inspections of the Borrower by
all Governmental Authorities, and if the Borrower fails to furnish such copies
to the Agent, the Borrower authorizes all such Government Authorities to furnish
to the Agent copies of their reports of examinations or inspections of the
Borrower.
National Beef Packing Company Credit Agreement 73
13.9 Reliance by the Agent, the Issuers and the Lenders.
All covenants, agreements, representations and warranties made herein by
the Borrower shall, notwithstanding any investigation by the Agent, any Issuer,
the Swing Line Lender or any of the Lenders, be deemed to be material to and to
have been relied upon by the Agent, the Issuers, the Swing Line Lender and the
Lenders.
13.10 Parties.
Whenever in this Agreement there is reference made to any of the parties
hereto, such reference shall be deemed to include, wherever applicable, a
reference to the respective successors and assigns of the Borrower, the Agent,
the Swing Line Lender, the Lenders and the Issuers.
13.11 Applicable Law; Severability.
This Agreement shall be construed in all respects in accordance with, and
governed by, the laws and decisions of the State of Colorado without regard to
the application of conflict of laws principles. Wherever possible, each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Agreement.
13.12 SUBMISSION TO JURISDICTION; WAIVER OF BOND AND TRIAL BY JURY.
THE BORROWER HEREBY CONSENTS TO THE JURISDICTION OF ANY LOCAL, STATE,
OR FEDERAL COURT LOCATED WITHIN THE CITY AND COUNTY OF DENVER, COLORADO AND
WAIVES ANY OBJECTION WHICH THE BORROWER MAY HAVE BASED ON IMPROPER VENUE OR
FORUM NON CONVENIENS TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURT, WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON THE BORROWER. THE BORROWER HEREBY
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY MAIL OR MESSENGER DIRECTED
TO THE BORROWER AT THE ADDRESS SET FORTH IN SECTION 13.18 OF THIS AGREEMENT.
SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON THE EARLIER OF ACTUAL
RECEIPT OR THREE (3) DAYS AFTER THE SAME SHALL HAVE BEEN POSTED TO THE
BORROWER'S ADDRESS BY THE BORROWER'S AGENT AS SET FORTH BELOW. THE BORROWER
HEREBY IRREVOCABLY APPOINTS THE CORPORATION COMPANY, WITH AN OFFICE ADDRESS
LOCATED AT 0000 XXXXXXXX, XXXXXX, XXXXXXXX 00000, AS THE BORROWER'S AGENT FOR
THE PURPOSE OF ACCEPTING THE SERVICE OF ANY PROCESS WITHIN THE STATE OF
COLORADO. AT THE OPTION OF THE AGENT, THE BORROWER WAIVES, TO THE EXTENT
PERMITTED BY LAW, TRIAL BY JURY, AND WAIVES ANY BOND OR SURETY OR SECURITY UPON
SUCH BOND WHICH MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE AGENT. THE
BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT
National Beef Packing Company Credit Agreement 74
CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF EACH OTHER
FINANCING DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE AGENT, EACH ISSUER, THE SWING LINE LENDER AND THE LENDERS TO
ENTER INTO THIS AGREEMENT AND EACH SUCH OTHER FINANCING DOCUMENT.
13.13 Application of Payments.
(a) Application of Payments and Collections Prior to a Matured
Default.
(i) Subject to subsection (b) below, the Agent shall
distribute all funds it receives in respect of any payments made
by or on behalf of the Borrower on the Notes or the Non-Use Fees
among the Lenders, in like currency and funds as received,
ratably according to each Lender's respective Line of Credit Loan
Commitment or the outstanding principal amount of each Lender's
respective Term Loan, as the case may be.
(ii) Subject to subsection (b) below, the Agent shall
distribute all funds it receives in respect of any payments made
by or on behalf of the Borrower on the Borrower's obligations
under a Swap Contract to the applicable Swap Party.
(iii) Subject to subsection (b) below, the Agent shall
distribute all funds it receives in respect of any payments made
by or on behalf of the Borrower on LC Obligations to the
applicable Issuer(s).
(iv) Subject to subsection (b) below, the Agent shall
distribute all funds it receives in respect of any payments made
by or on behalf of the Borrower on Swing Line Loans to the Swing
Line Lender.
(b) Application of Payments and Collections after a Matured
Default. After any Matured Default has occurred, all funds received by
the Agent, whether as payments by the Borrower or as realization on
Collateral or on any guaranties, shall (except as may otherwise be
required by law) be distributed by the Agent as follows:
(i) First, to pay any unreimbursed cost of collection with
respect to any Loan, any Swing Line Loan, any Note, any LC
Obligation, any Collateral or otherwise relating to this
Agreement to the Agent and each Issuer, Lender, Swing Line Lender
or Swap party who has incurred such costs;
(ii) Second, to pay the Agent and each Issuer, Lender, Swing
Line Lender or Swap Party to whom the Borrower owes any indemnity
obligation or other expense reimbursement obligation (other than
those described in the immediately preceding subsection (a)) with
respect to any Loan, any Swing Line Loan, any Note, any LC
Obligation, any Collateral or otherwise relating to this
Agreement, or relating to any Swap Contract, the amount thereof;
(iii) Third, (1) to the Lenders, accrued Non-Use Fees then
due and payable by the Borrower in accordance with their
respective Line of Credit Loan
National Beef Packing Company Credit Agreement 75
Commitments, (2) to pay to the Agent that portion of the accrued
fees payable to the Agent, and (3) to pay any fees then due and
payable to the Issuers pursuant to this Agreement;
(iv) Fourth, to pay (1) accrued interest that is payable on
the Loans to the Lenders, (2) accrued interest that is payable on
the Swing Line Loans to the Swing Line Lender, and (3) any
obligation (other than an early termination payment obligation)
owing to a Swap Party that is due and payable to such Swap Party
pursuant to any Swap Contract;
(v) Fifth, to pay (1) the principal of the Loans to the
Lenders, (2) the principal of the Swing Line Loans to the Swing
Line Lender, (3) any obligation that is due and payable to a Swap
Party as a result of an early termination of a Swap Contract, (4)
the aggregate amount of any drawings under LCs which have not yet
been reimbursed to the relevant Issuers, and (5) to the Holding
Account an amount equal to the aggregate undrawn amount of all
outstanding LCs;
(vi) Sixth, to the Borrower or as otherwise may be directed
by court order or by other applicable law.
To the extent that available funds are sufficient to pay only part of the
amount due to all Persons within any of the foregoing clauses, such funds shall
be allocated to all such Persons pro rata in accordance with the respective
amounts owed. Upon any sale of the Collateral by the Agent (including pursuant
to a power of sale granted by statute or under a judicial proceeding), the
receipt by the Agent or of the officer making the sale shall be a sufficient
discharge to the purchaser or purchasers of the Collateral so sold and such
purchaser or purchasers shall not be obligated to see to the application of any
part of the purchase money paid over to the Agent or such officer or be
answerable in any way for the misapplication thereof.
13.14 Marshaling; Payments Set Aside.
The Agent shall be under no obligation to marshal any assets in favor of
the Borrower or against or in payment of any or all of the Liabilities. To the
extent that the Borrower makes a payment or payments to the Agent or the Agent
receives any payment or proceeds of the Collateral for the Borrower's benefit or
enforces the Agent's security interests or exercises the Agent's rights of
set-off, and such payment or payments or the proceeds of such Collateral,
enforcement or set-off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied
shall be revived and continued in full force and effect as if such payment had
not been made or such enforcement or set-off had not occurred.
13.15 Section Titles.
The section titles contained in this Agreement shall be without
substantive meaning or content of any kind whatsoever and are not a part of the
agreement among the parties.
National Beef Packing Company Credit Agreement 76
13.16 Continuing Effect.
This Agreement, the Agent's security interests in the Collateral, and all
of the other Financing Documents shall continue in full force and effect so long
as any Liabilities shall be owed to the Agent and/or any of the Lenders and/or
the Issuers and/or the Swing Line Lender and (even if there shall be no
Liabilities outstanding) so long as the Agent and/or any of the Lenders remains
committed to make Loans under this Agreement and/or any Issuer remains committed
to issue LCs under this Agreement and/or the Swing Line Lender remains committed
to make Swing Line Loans under this Agreement.
13.17 No Waiver.
The Agent's, any Issuer's or the Required Lenders' failure, at any time or
times hereafter, to require strict performance by the Borrower of any provision
of this Agreement shall not waive, affect or diminish any right of the Agent or
the Required Lenders thereafter to demand strict compliance and performance
therewith. Any suspension or waiver by the Agent or the Required Lenders of any
Default or Matured Default under this Agreement or any of the other Financing
Documents, shall not suspend, waive or affect any other Default or Matured
Default under this Agreement or any of the other Financing Documents, whether
the same is prior or subsequent thereto and whether of the same or of a
different kind or character. None of the undertakings, agreements, warranties,
covenants and representations of the Borrower contained in this Agreement or any
of the other Financing Documents and no Default or Matured Default under this
Agreement or any of the other Financing Documents, shall be deemed to have been
suspended or waived by the Agent, the Issuers or the Required Lenders unless
such suspension or waiver is in writing signed by an officer of the Agent or
each of the Required Lenders (as applicable) and is directed to the Borrower
specifying such suspension or waiver.
13.18 Notices.
(a) All notices and other communications provided for herein shall be
in writing (including telex, facsimile, or cable communication) and shall
be mailed, telexed, cabled or delivered addressed as follows:
(i) If to the Agent at:
CoBank, ACB
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
Facsimile: 000-000-0000
(ii) If to the Borrower at:
National Beef Packing
Company, LLC 00000
Xxxxx Xxxxxxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxx X. Xxxxxxx, Chief Financial Officer
Facsimile: (000) 000-0000
National Beef Packing Company Credit Agreement 77
with copies to:
Xxxxxxxxx Xxxxxxx LLP
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxxxx, Esq.
Facsimile: (000) 000-0000
Xxxxx X. Xxxxx, Esq.
0000 Xxxxxxxx Xxxxx
Xxxx Xxxx, XX 00000
Facsimile: (000) 000-0000
U.S. Premium Beef, Ltd.
X.X. Xxx 00000
Xxxxxx Xxxx, XX 00000
Attn: Xxxxxx X. Xxxx, Chief Executive Officer
Facsimile: (000) 000-0000
(i) If to any of the Lenders or Issuers other than the Agent, at
the address for such Person provided in writing to the Agent and the
Borrower and, as to each party hereto, at such other address as shall
be designated by such party in a written notice to the other parties
hereto. All such notices and communications shall, when mailed,
telecopied, telexed, transmitted, or cabled, become effective when
deposited in the mail, confirmed by telex answerback, transmitted by
telecopier, or delivered to the cable company, respectively except
that notices and communications to the Agent shall not be effective
until actually received by the Agent.
(b) The timing of notices to the Agent of terminations or reductions
of the Commitment, of borrowings, conversions and prepayments of Loans and
Swing Line Loans and of the duration of Interest Periods and of a request
for the issuance of an LC is summarized below:
-------------------------------------------- ------------------
Borrowing of Base Rate Advances Same Business Day
and Swing Line Loans
-------------------------------------------- ------------------
Borrowing of LIBOR Rate Advances 3 Business Days
-------------------------------------------- ------------------
Conversion of Loans (including changes in
Interest Period for LIBOR Rate Advances) 3 Business Days
-------------------------------------------- ------------------
Prepayments of Base Rate Advances
and Swing Line Loans Same Business Day
-------------------------------------------- ------------------
Prepayments of LIBOR Rate Advances 3 Business Days
-------------------------------------------- ------------------
LCs 5 Business Days
-------------------------------------------- ------------------
13.19 Maximum Interest.
National Beef Packing Company Credit Agreement 78
No agreements, conditions, provisions or stipulations contained in this
Agreement or in any of the other Financing Documents, or any Matured Default, or
any exercise by the Agent of the right to accelerate the payment of the maturity
of principal and interest, or to exercise any option whatsoever, contained in
this Agreement or any of the other Financing Documents, or the arising of any
contingency whatsoever, shall entitle the Agent to collect, in any event,
interest exceeding the Highest Lawful Rate, and in no event shall the Borrower
be obligated to pay interest exceeding the Highest Lawful Rate, and all
agreements, conditions or stipulations, if any, which may in any event or
contingency whatsoever operate to bind, obligate or compel the Borrower to pay a
rate of interest exceeding the Highest Lawful Rate, shall be without binding
force or effect, at law or in equity, to the extent only of the excess of
interest over such Highest Lawful Rate. In the event any interest is charged in
excess of the Highest Lawful Rate ("Excess"), the Borrower acknowledges and
stipulates that any such charge shall be the result of an accidental and bona
fide error, and such Excess shall be, first, applied to reduce the principal of
any Liabilities due, and, second, returned to the Borrower, it being the
intention of the parties hereto not to enter at any time into a usurious or
otherwise illegal relationship. The Borrower and the Agent both recognize that,
with fluctuations in the Base Rate and the LIBOR Rate, such an unintentional
result could inadvertently occur. By the execution of this Agreement, the
Borrower covenants that (a) the credit or return of any Excess shall constitute
the acceptance by the Borrower of such Excess and (b) the Borrower shall not
seek or pursue any other remedy, legal or equitable, against the Agent, any
Issuer, the Swing Line Lender or the Lenders based, in whole or in part, upon
the charging or receiving of any interest in excess of the Highest Lawful Rate.
For the purpose of determining whether or not any Excess has been contracted
for, charged or received by the Agent, any Issuer, the Swing Line Lender or the
Lenders (as the case may be), all interest at any time contracted for, charged
or received by the Agent, the Issuers, the Swing Line Lender or the Lenders in
connection with the Liabilities shall be amortized, prorated, allocated and
spread in equal parts during the entire term of this Agreement.
13.20 Representations by the Lenders and Swing Line Lender.
Each Lender and the Swing Line Lender represents that it is such Person's
present intention, as of the date of its acquisition of its Notes, to acquire
such Notes for its account or for the account of its affiliates, and not with a
view to the distribution or sale thereof, and, subject to any applicable laws,
the disposition of such Lender's or the Swing Line Lender's property shall at
all times be within its control. The Notes have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and may not be
transferred, sold or otherwise disposed of except (a) in a registered offering
under the Securities Act; (b) pursuant to an exemption from the registration
provisions of the Securities Act; or (c) if the Securities Act shall not apply
to the Notes or the transactions contemplated by the Financing Documents.
Nothing in this Section 13.20 shall affect the characterization of the Loans,
the Swing Line Loans and the transactions contemplated hereunder as commercial
lending transactions.
13.21 Counterparts and Facsimile Signatures.
This Agreement, any other Financing Document and any subsequent amendment
to any of them may be executed in several counterparts and by the different
parties on separate counterparts, each of which together shall be construed as
one original and all of which shall constitute together but one and the same
agreement. Facsimile signatures on this Agreement,
National Beef Packing Company Credit Agreement 79
any other Financing Document and any subsequent amendment to any of them shall
be considered as original signatures.
13.22 Set-off.
The Borrower gives and confirms to each Lender and each Issuer a right of
set-off of all moneys, securities and other property of the Borrower (whether
special, general or limited) and the proceeds thereof, at any time delivered to
remain with or in transit in any manner to such Lender or Issuer, its
correspondent or its agents from or for the Borrower, whether for safekeeping,
custody, pledge, transmission, collection or otherwise or coming into possession
of such Lender or Issuer in any way, and also, any balance of any deposit
accounts and credits of the Borrower with, and any and all claims of security
for the payment of the Liabilities owed by the Borrower to such Lender or
Issuer, contracted with or acquired by the Lender or Issuer, whether such
liabilities and obligations be joint, several, absolute, contingent, secured,
unsecured, matured or unmatured, and the Borrower authorizes such Lender or
Issuer at any time or times, without prior notice, to apply such money,
securities, other property, proceeds, balances, credits of claims, or any part
of the foregoing, to such liabilities in such amounts as it may select, whether
such Liabilities be contingent, unmatured or otherwise, and whether any
collateral security therefor is deemed adequate or not. Each Lender and each
Issuer agrees to notify the Agent promptly after any such setoff and application
made by such Lender or Issuer; provided, however, that the failure to give such
notice shall not affect the validity of such setoff and application. The rights
described herein shall be in addition to any collateral security described in
any separate agreement executed by the Borrower and any other right of setoff
under applicable law or otherwise which each Lender and each Issuer may have.
13.23 Assignments and Participation.
(a) After the Restatement Date and (except in the case of an
assignment by a Lender or the Swing Line Lender to one or more of its
affiliates) subject to the prior written consent of the Agent and (so long
as no Default or Matured Default shall have occurred and be continuing) the
Borrower, which consent(s) shall not be unreasonably withheld, each Lender
and the Swing Line Lender may assign to any Person (the "Assignee") all or
a portion of its rights and obligations under this Agreement (including
without limitation, all or a portion of its Commitment and the Notes and/or
Swing Line Note held by it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of
the assigning Lender's rights and obligations under this Agreement, (ii)
the total amount of the Commitment (based on the original Commitment
without giving effect to any repayments or prepayments) so assigned to an
Assignee or to an Assignee and its affiliates taken as a whole shall equal
or exceed $5,000,000, (iii) the remaining Commitment (based on the original
Commitment without giving effect to any repayments or prepayments) held by
the assigning Lender after giving effect to any such assignment shall equal
or exceed $5,000,000, (iv) the assignment will not cause the Borrower to
incur any additional liability or expense and (v) the parties to each such
assignment shall execute and deliver to the Agent for its acceptance an
Assignment and Acceptance in substantially the form attached as Exhibit 13A
("Assignment and Acceptance"), together with any Note or Notes to be
exchanged in connection with such assignment and a processing and
recordation fee of $3,500 to the
National Beef Packing Company Credit Agreement 80
Agent. Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be the date on which such Assignment and Acceptance is
accepted by the Agent, (vi) the Assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned
to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender under the Financing Documents and (vii) the Lender
assignor thereunder shall be deemed to have relinquished its rights and to
be released from its obligations under the Financing Documents, to the
extent (and only to the extent) that its rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance (and,
in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under the Financing
Documents, such Lender shall cease to be a party thereto).
(b) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection with
the Financing Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Financing
Documents or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender makes no representation or warranty and assumes
no responsibility with respect to the financial condition of the Borrower
or the performance or observance by the Borrower of any of its obligations
under the Financing Documents, the Security Documents or any other
instrument or document furnished pursuant hereto; (iii) such Assignee
confirms that it has received a copy of the Financing Documents, together
with copies of the financial statements referred to in Section 7.16 and
such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such Assignee will, independently and without reliance
upon the Agent, such assigning Lender or any other Lender or Issuer or
Swing Line Lender and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such Assignee
appoints and authorizes the Agent to take such action as the Agent on its
behalf and to exercise such powers under the Financing Documents as are
delegated to the Agent by the terms thereof, together with such powers as
are reasonably incidental thereto; and (vi) such Assignee agrees that it
will perform in accordance with their terms all of the obligations which by
the terms of the Financing Documents are required to be performed by it as
a Lender.
(c) The Agent shall maintain at its address referred to in Section
13.18 a copy of each Assignment and Acceptance delivered to and accepted by
it.
(d) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, together with any Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance and (ii) give prompt
notice thereof to the Borrower. Within five (5) Business Days after its
receipt of such notice, the Borrower, at its own expense,
National Beef Packing Company Credit Agreement 81
shall execute and deliver to the Agent in exchange for the surrendered Note
a new Note to the order of such Assignee in an amount equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and, if
the assigning Lender has retained a Commitment hereunder, a new Note to the
order of the assigning Lender in an amount equal to the Commitment retained
by it hereunder. Such new Note or Notes shall be in an aggregate principal
amount equal to the aggregate principal amount of such surrendered Note or
Notes, shall be dated the effective date of such Assignment and Acceptance
and shall otherwise be in substantially the form of Exhibit 2A or Exhibit
2B, as the case may be. Upon the Agent's receipt of such new Note or Notes
conforming to the requirements set forth in the preceding sentences, the
Agent shall return to the Borrower such surrendered Note or Notes, marked
to show that such surrendered Note or Notes has (have) been replaced,
renewed and extended by such new Note or Notes.
(e) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement (including without limitation, all or a portion of its Commitment
and the Notes held by it); provided however, that (i) such Lender's
obligations under this Agreement (including without limitation, its
Commitments to the Borrower hereunder) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder
of any such Note for all purposes of this Agreement, (iv) the sale of the
participation will not cause the Borrower to incur any additional
liability, and (v) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement, provided that no
participant shall be entitled to recover under the above-described
provisions an amount in excess of the proportionate share which such
participant holds of the original aggregate principal amount hereunder to
which the assigning Lender would otherwise be entitled. Notwithstanding the
foregoing, in the case of participations sold to members of the Farm Credit
System (a "Farm Credit System Participant"), with the written consent of
the Agent and the Borrower and provided that such participation is not less
than $10,000,000, such participant shall have the right to vote on any
matter which requires the consent of the Lenders. For purposes of voting,
such Farm Credit Service Participant shall receive voting rights in
proportion to the interest purchased, and the voting right percentage of
the Lender selling the participation shall be correspondingly reduced. The
initial list of Farm Credit System Participants is set forth on Exhibit
13B. In the case of such participations to Farm Credit System Participants,
the Lender selling such participation shall promptly provide to the Agent a
Voting Participant Notice and Consent in the form of Exhibit 13C.
(f) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 13.23,
disclose to the assignee or participant or proposed assignee or
participant, any information relating to the Borrower furnished to such
Lender by or on behalf of the Borrower; provided that, prior to any such
disclosure, the assignee or participant or proposed assignee or participant
shall agree in writing to preserve the confidentiality of any confidential
information relating to the Borrower received by it from such Lender.
National Beef Packing Company Credit Agreement 82
(g) Any Lender may assign and pledge all or any of the instruments
held by it as collateral security; provided that any payment made by the
Borrower for the benefit of such assigning and/or pledging Lender in
accordance with the terms of the Financing Documents shall satisfy the
Borrower's obligations under the Financing Documents in respect thereof to
the extent of such payment. No such assignment and/or pledge shall release
the assigning and/or pledging Lender from its obligations hereunder.
13.24 Loan Agreement Controls.
If there are any conflicts or inconsistencies among this Agreement and any
of the other Financing Documents, the provisions of this Agreement shall prevail
and control.
13.25 Obligations Several.
Each Lender's, each Issuer's, the Agent's and the Swing Line Lender's
obligations under each Financing Document to which it is a party are several,
and no Lender, Issuer, Agent or Swing Line Lender shall be responsible for any
obligation or Commitment of any other such Person under any Financing Document
to which it is a party. Nothing contained in any Financing Document to which it
is a party, and no action taken by any Lender, Issuer, Agent or Swing Line
Lender pursuant thereto, shall be deemed to constitute such Persons (or any of
them) as a partnership, an association, a joint venture, or any other kind of
entity.
13.26 Pro Rata Treatment.
All Loans under, and all payments and other amounts received in connection
with this Agreement for application to the Loans (including, without limitation,
amounts received as a result of the exercise by any Lender of any right of
set-off) shall be effectively shared by the Lenders ratably in accordance with
their respective pro rata shares of the relevant type of Loan. If any Lender
shall obtain any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of the principal of, or
interest on, or fees in respect of, any Note held by it (other than pursuant to
Section 5.2, 5.3 or 5.4) in excess of its pro rata share of payments on account
of similar Notes obtained by all the Lenders, such Lender shall purchase from
the other Lenders such participation in the Notes or Loans made by them as shall
be necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion of (a) the
amount of such Lender's required repayment to (b) the total amount so recovered
from the purchasing Lender) of any interest or other amount paid or payable by
the purchasing Lender in respect of the total amount so recovered.
Disproportionate payments of interest shall be shared by the purchase of
separate participation in unpaid interest obligations, disproportionate payments
of fees shall be shared by the purchase of separate participation in unpaid fee
obligations, and disproportionate payments of principal shall be shared by the
purchase of separate participation in unpaid principal obligations. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 13.26 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with
National Beef Packing Company Credit Agreement 83
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. Notwithstanding
the foregoing, a Lender may receive and retain an amount in excess of its pro
rata share of the relevant type of Loan to the extent, but only to the extent,
that such excess results from such Lender's Highest Lawful Rate exceeding
another Lender's Highest Lawful Rate.
13.27 Confidentiality.
Each of the Agent, the Issuers, the Swing Line Lender and the Lenders
agrees that it will use its best efforts to keep confidential, in accordance
with its customary procedures for handling confidential information and in
accordance with safe and sound banking practices, any proprietary information of
the Borrower identified in writing by the Borrower to the Agent, as being
proprietary and confidential; provided that the Agent, any Issuer, the Swing
Line Lender or any Lender may disclose any such information (a) to enable it to
comply with any Governmental Requirement applicable to it, (b) in connection
with the defense of any litigation or other proceeding brought against it
arising out of the transactions contemplated by this Agreement and the other
Financing Documents, (c) in connection with the supervision and enforcement of
the rights and remedies of the Agent, the Issuers, the Swing Line Lender and/or
the Lenders under any Financing Document and (d) as set forth in Section
13.23(f).
13.28 Independence of Covenants.
All covenants under Section 10 shall be given independent effect so that if
a particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or be otherwise within the
limitations of, another covenant shall not avoid the occurrence of a Default or
a Matured Default if such action is taken or condition exists.
13.29 Amendments and Waivers.
Any term, covenant, agreement or condition of this Agreement or any
Financing Document may be amended only by a written amendment executed by the
Borrower, the Required Lenders and, if the rights or duties of the Agent are
affected thereby, the Agent, or compliance therewith only may be waived (either
generally or in a particular instance and either retroactively or
prospectively), if the Borrower shall have obtained the consent in writing of
the Required Lenders (or in the case of provisions relating to any Bond
Document, any Bond Document or the Bond Pledge Agreement, the Agent without
necessity of consent of the Required Lenders) and, if the rights or duties of
the Agent, Swing Line Lender and/or an Issuer are affected thereby, such Person;
provided, however, that without the consent in writing of the holders of all
outstanding Notes and LC Obligations, or of all Lenders and the Swing Line
Lender if no Notes or LCs are outstanding, no such amendment or waiver shall (a)
change the amount or postpone the date of payment of any scheduled payment or
required payment of principal of the Notes or reduce the rate or extend the time
of payment of interest on the Notes, or reduce the amount of principal thereof,
or modify any of the provisions of the Notes with respect to the payment or
prepayment thereof, (b) give to any Note any preference over any other Notes,
(c) amend the definition of Required Lenders, (d) alter, modify or amend the
provisions of this Section 13.29, (e) change the amount or term of any of the
Commitments or the fees required under Section 6, (f) alter, modify or amend the
provisions of Section 8 of this
National Beef Packing Company Credit Agreement 84
Agreement, (g) alter, modify or amend any Lender's right hereunder to consent to
any action, make any request or give any notice, or (h) release all or
substantially all of the Collateral (except such Collateral relating to the Bond
Documents, which release shall be at the Agent's sole discretion), unless such
release is permitted by the Financing Documents. Any such amendment or waiver
shall apply equally to all Lenders and all the holders of the Notes and/or LC
Obligations and shall be binding upon them, upon each future holder of any Note
or LC Obligation and upon the Borrower, whether or not such Note or LC shall
have been marked to indicate such amendment or waiver. No such amendment or
waiver shall extend to or affect any obligation not expressly amended or waived.
Notwithstanding the foregoing, the Borrower may increase the Line of Credit Loan
Commitment and the aggregate outstanding principal amount of the Term Loans from
time to time by obtaining applicable commitments from one or more Lenders (or
from other lenders reasonably acceptable to the Agent) so long as (a) no Default
or Matured Default shall have occurred and be continuing, (b) the cumulative
increase in the sum of the Line of Credit Loan Commitment and the aggregate
outstanding principal amount of the Term Loans may not exceed $100,000,000, and
(c) an amendment to this Agreement, in form satisfactory to the Agent, that
amends the definition of "Line of Credit Loan Commitment" and Exhibit 1A to
reflect such increase and that includes provisions to cause any outstandings
relating to the Line of Credit Loans or the Term Loans to be held by the Lenders
on a ratable basis after giving effect to the relevant increase, shall have been
executed and delivered by the Borrower and the Agent. Additionally, the amount
of the Term Loan shall not exceed 65% of the appraised value of fixed assets
pledged as security for the Line of Credit Loan or the Term Loan subsequent to
any requested increase to the Term Loan, and all new Term Loans and Line of
Credit Loans disbursed pursuant to any increase made under this Section 13.29
shall have the same Maturity Date as the previously outstanding Term Loans and
Revolving Loans (as the case may be).
13.30 Binding Effect.
This Agreement and the other Financing Documents set forth the legal, valid
and binding obligations of the Borrower, the Agent, the Issuers, the Swing Line
Lender and the Lenders and are enforceable against the Borrower in accordance
with their respective terms.
13.31 FINAL AGREEMENT.
THIS WRITTEN AGREEMENT, THE NOTES AND THE OTHER FINANCING DOCUMENTS
COLLECTIVELY REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
13.32 Water Rights Acquisition.
Notwithstanding Sections 10.1, 10.3, 10.4, 10.5, and 10.6 of this
Agreement, the Borrower may enter into and complete the Water Rights Acquisition
and the Water Service Agreement and the transactions contemplated thereby. The
Borrower's incurrence of Indebtedness per the Water Services Agreement shall not
be counted against (i) the $20,000,000 amount set forth in Section 10.4(d) or
(ii) the $5,000,000 amount set forth in Section 10.4(e).
National Beef Packing Company Credit Agreement 85
With respect to the Water Rights Acquisition, (i) the Borrower shall grant to
the Agent (to secure the payment and performance of the Liabilities) a second
priority lien and security interest in the water rights being acquired as part
of the Water Rights Acquisition (subject only to a prior lien and security
interest in favor of the City of Dodge City, Kansas to secure the Borrower's
obligations under the Water Services Agreement), which the Lenders acknowledge
will be encumbered, at least in part by a water rights lease in favor of the
City and corresponding sublease in favor of the Borrower; and (ii) the Borrower
shall grant to the Agent (to secure the payment and performance of the
Liabilities) a first priority lien and security interest in the sublease by the
Borrower from the City of the water rights under the lease in favor of the City,
all to be evidenced by documentation, in form and substance reasonably
acceptable to the Agent. The aforementioned lien and security interest in the
water rights being acquired as part of the Water Rights Acquisition shall be
documented and recorded as soon as practicable. The aforementioned lien and
security interest in the sublease by the Borrower from the City of the water
rights being acquired as part of the Water Rights Acquisition shall be
documented and recorded as soon as practicable. In the event that the
aforementioned lien and security interest in the water rights being acquired as
part of the Water Rights Acquisition in favor of the Lenders shall be documented
and recorded prior to the documentation of the aforementioned lease, lien or
security interest in the water rights in favor of the City, then the Agent shall
execute on behalf of the Lenders a subordination agreement in favor of the City,
reasonably acceptable to the Agent and to the City.
13.33 USA Patriot Act Notice.
Each Lender, each Issuer, the Swing Line Lender and the Agent (for itself
and not on behalf of any Lender) hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the "Act"), it is required to obtain, verify and
record information that identifies the Borrower, which information includes the
Borrower's name and address and other information that will allow such Lender,
such Issuer, the Swing Line Lender or the Agent, as applicable, to identify the
Borrower in accordance with the Act.
{SIGNATURE PAGES FOLLOW}
National Beef Packing Company Credit Agreement 86
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
first written above.
NATIONAL BEEF PACKING
COMPANY, LLC
By: /s/ Xxx X. Xxxxxxx
--------------------------------------
Its: Chief Financial Officer
-------------------------------------
COBANK, ACB, individually and as
Lead Arranger, Syndication Agent
and Administrative Agent
By: /s/ Xxxxxx Little
--------------------------------------
Its: Vice President
-------------------------------------
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A., "RABOBANK
NEDERLAND", NEW YORK
BRANCH, individually and as
Documentation Agent
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ Xxxxxx X. Xxxxxx
--------------------------- --------------------------------------
Its: Executive Director Its: Executive Director
------------------------- -------------------------------------
{SIGNATURE PAGE ONE OF THREE TO SIXTH AMENDED
AND RESTATED CREDIT AGREEMENT}
National Beef Packing Company Credit Agreement
THE CIT GROUP/BUSINESS CREDIT INC.
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Its: Vice President
------------------------------------
BANK OF OKLAHOMA, N.A.
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-------------------------------------
Its: Vice President
------------------------------------
BMO CAPITAL MARKETS FINANCING, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Its: Vice President
------------------------------------
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx Xxxx
-------------------------------------
Its: Vice President
------------------------------------
CALYON - NEW YORK BRANCH
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------------
Its: Director
------------------------------------
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Its: Managing Director
-------------------------------------
{SIGNATURE PAGE TWO OF THREE TO SIXTH AMENDED
AND RESTATED CREDIT AGREEMENT}
National Beef Packing Company Credit Agreement
FIRST NATIONAL BANK OF OMAHA
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Its: Vice President
------------------------------------
AMERICAN AGCREDIT, PCA, formerly known as
Pacific Coast Farm Credit Services, ACA
By: /s/ Xxxx Van Schuyver
-------------------------------------
Its: Vice President
------------------------------------
{SIGNATURE PAGE THREE OF THREE TO SIXTH AMENDED
AND RESTATED CREDIT AGREEMENT}
National Beef Packing Company Credit Agreement
Exhibit 1A to
Sixth Amended and
Restated Credit Agreement
Loan Commitment Amounts, Term Loan Outstanding Amounts and Percentages
Swing Line Loan Commitments
Name of Lender Pro Rata Percentage Commitment Amount
CoBank, ACB 100% $30,000,000.00 (Regular Swing Line Loans)
$102,300,000 (Swing Line Bond Loans)
Line of Credit Loan Commitments
Pro Rata Percentage Amount of Line of
Credit Loans
Outstanding on the
Name of Lender Commitment Amount Restatement Date
CoBank, ACB 65.225% $130,450,000.00 $22,828,750.00
Rabobank Nederland 12.400% $24,800,000.00 $4,340,000.00
First National Bank of Omaha 7.500% $15,000,000.00 $2,625,000.00
BMO Capital Markets 3.125% $6,250,000.00 $1,093,750.00
Bank of Oklahoma 3.000% $6,000,000.00 $1,050,000.00
American AgCredit 2.500% $5,000,000.00 $875,000.00
Calyon 2.500% $5,000,000.00 $875,000.00
LaSalle Bank National Association 1.875% $3,750,000.00 $656,250.00
The CIT Group/Business Credit, Inc 1.875% $3,750,000.00 $656,250.00
TOTAL: 100.000% $200,000,000.00 $35,000,000.00
Term Loans
Amount of Term Loan Outstanding on the
Name of Lender Pro Rata Percentage Restatement Date
CoBank, ACB 75.840984461% $153,665,872.00
Rabobank Nederland 14.905051466% $30,200,000.00
BMO Capital Markets 3.084654691% $6,250,000.00
American AgCredit 2.467723753% $5,000,000.00
LaSalle Bank National Association 1.850792815% $3,750,000.00
The CIT Group/Business Credit, Inc 1.850792814% $3,750,000.00
TOTAL: 100.000000000% $202,615,872.00
1-A-1
Exhibit 1B to
Sixth Amended and
Restated Credit Agreement
Formula for Borrowing Base Certificate
1. Borrowing Base. The "Borrowing Base" as of any date of determination shall
be:
(a) 100% of the available funds on deposit in Collateral Accounts that are
eligible for inclusion in the Borrowing Base according to Section 2.6 of the
Security Agreement, plus
(b) 100% of the net equity in Margin Accounts properly assigned to the
Agent, plus
(c) 90% of the amount of Eligible Accounts, plus
(d) 70% of the value of Eligible Inventory valued at the lower of cost or
market value in accordance with GAAP, plus
(e) Unless an event of the type described in one or more of clauses (i)
through (n) of the definition of Matured Default shall have occurred, and such
Default shall be continuing, with respect to NCI or NCI Leasing, the lesser of
(i) 100% of the principal amount outstanding under the Promissory Note from NCI
and NCI Leasing dated August 6, 2003 in the face amount of $10,000,000 or (ii)
90% of the Eligible NCI Accounts, plus
(f) Unless an event of the type described in one or more of clauses (i)
through (n) of the definition of Matured Default shall have occurred, and such
Default shall be continuing, with respect to KC Steak, the lesser of (i) 100% of
the principal amount outstanding under the Restated Promissory Note from KC
Steak dated August 29, 2001, and amended as of December 29, 2004 in the face
amount of $16,000,000 or (ii) the sum of (A) 90% of the Eligible KC Steak
Accounts and (B) 70% of the Eligible KC Steak Inventory, plus
(g) Unless an event of the type described in one or more of clauses (i)
through (n) of the definition of Matured Default shall have occurred, and such
Default shall be continuing, with respect to NBC, the lesser of (i) 100% of the
principal amount outstanding under the Intercompany Loan Agreement or (ii) the
sum of (A) 90% of the Eligible NBC Accounts and (B) 70% of the Eligible NBC
Inventory, minus
(h) 100% of Producer Payables owed by the Borrower, NCI, KC Steak and NBC,
minus
1-B-1
(i) 100% of the amounts of all uncleared checks or drafts issued by
Borrower, NCI, KC Steak, and NBC and related to Producer Payables owed by such
Person, minus
(j) The Insurance Reserve.
2. Definitions. Capitalized terms used herein that are defined in the Credit
Agreement are used herein with the respective meanings attributed thereto in the
Credit Agreement. In addition, for the purposes of this Exhibit 1B and for
determining the Borrowing Base, the following terms shall have the following
respective meanings; provided, however, that in the case of conflict, the
definitions contained in the Credit Agreement shall prevail:
"Eligible NCI Accounts" means accounts of NCI which the Agent determines in
the exercise of the Agent's reasonable discretion, are eligible for inclusion in
the Borrowing Base at any particular time. Without limiting the Agent's right to
determine that accounts of NCI do not constitute Eligible NCI Accounts, but
without duplication, the following accounts shall not be Eligible NCI Accounts:
(a) all accounts which are at that time unpaid for a period exceeding ninety
(90) days after the original invoice date of the original invoice related
thereto, except for Accounts which are covered by a letter of credit; (b) all
accounts owing by an account debtor if more than ten percent (10%) of the
accounts owing by such account debtor are at that time unpaid for a period
exceeding that allowed by the preceding subsection a; (c) those accounts of an
account debtor, the aggregate face amount of which is in excess of five percent
(5%) of the aggregate face amount of all other Eligible NCI Accounts of all
account debtors, but in each case only to the extent of such excess; (d) those
accounts owing from the United States or any department, agency or
instrumentality thereof unless NCI shall have complied with the Assignment of
Claims Act to the satisfaction of the Agent; (e) accounts which arise out of
transactions with affiliates of NCI; (f) accounts of account debtors that are
located outside the United States, unless such accounts are covered by a letter
of credit issued or confirmed by a bank acceptable to the Agent; (g) accounts
which are or may be subject to rights of setoff or counterclaim by the account
debtor (to the extent of the amount of such setoff or counterclaim); (h)
accounts in which the Agent does not, for any reason, have a first priority
perfected security interest; and (i) accounts which in the Agent's opinion may
be subject to liens or conflicting claims of ownership, whether such liens or
conflicting claims are asserted or could be asserted by any Person except for
statutory liens or encumbrances described in Section 10.1(a), (b) and (d).
"Eligible KC Steak Accounts" means accounts of KC Steak which the Agent
determines in the exercise of the Agent's reasonable discretion, are eligible
for inclusion in the Borrowing Base at any particular time. Without limiting the
Agent's right to determine that accounts of KC Steak do not constitute Eligible
KC Steak Accounts, but without duplication, the following accounts shall not be
Eligible KC Steak Accounts: (a) all accounts which are at that time unpaid for a
period exceeding ninety (90) days after the original invoice date of the
original invoice related thereto, except for Accounts which are covered by a
letter of credit; (b) all accounts owing by an account debtor if more than ten
percent (10%) of the accounts owing by such account debtor are at that time
unpaid for a period exceeding
1-B-2
that allowed by the preceding subsection a; (c) those accounts, except accounts
owing from the following account debtors: (i) Sysco, (ii) Outback Steakhouse,
(iii) QVC, (iv) IQVC, (v) Wal-Mart and affiliates, of an account debtor, the
aggregate face amount of which is in excess of five percent (5%) of the
aggregate face amount of all other Eligible KC Steak Accounts of all account
debtors, but in each case only to the extent of such excess; (d) those accounts
owing from the United States or any department, agency or instrumentality
thereof unless KC Steak shall have complied with the Assignment of Claims Act to
the satisfaction of the Agent; (e) accounts which arise out of transactions with
affiliates of KC Steak; (f) accounts of account debtors that are located outside
the United States, unless such accounts are covered by a letter of credit issued
or confirmed by a bank acceptable to the Agent; (g) accounts which are or may be
subject to rights of setoff or counterclaim by the account debtor (to the extent
of the amount of such setoff or counterclaim); (h) accounts in which the Agent
does not, for any reason, have a first priority perfected security interest; and
(i) accounts which in the Agent's opinion may be subject to liens or conflicting
claims of ownership, whether such liens or conflicting claims are asserted or
could be asserted by any Person except for statutory liens or encumbrances
described in Section 10.1(a), (b) and (d).
"Eligible KC Steak Inventory" means inventory of KC Steak which the Agent
determines in the exercise of the Agent's reasonable discretion is eligible for
inclusion in the Borrowing Base at any particular time. Without limiting the
Agent's right to determine that inventory of KC Steak does not constitute
Eligible KC Steak Inventory, but without duplication, the following inventory of
KC Steak shall not be Eligible KC Steak Inventory: (a) inventory deemed to be
out-of-condition or otherwise unmerchantable by the United States Department of
Agriculture, any state's Department of Agriculture, or any other Governmental
Authority having regulatory authority over the Borrower or any of the Borrower's
assets or activities; (b) inventory for which a prepayment has been received;
(c) inventory in the possession of third parties, unless it is inventory: (i) at
a location listed below, for which the Agent has received a bailee letter
satisfactory to the Agent (provided, however, that in the case of such inventory
in existence on the Effective Date, the Borrower need not deliver such letters
until 30 days after the Effective Date), or (ii) covered by negotiable warehouse
receipts or negotiable bills of lading issued by either: (A) a warehouseman
licensed and bonded by the United States Department of Agriculture or any
state's Department of Agriculture, or (B) a recognized carrier having an office
in the United States and in a financial condition reasonably acceptable to the
Agent, which receipts or bills of lading designate the Agent directly or by
endorsement as the only Person to which or to the order of which the
warehouseman or carrier is legally obligated to deliver such Goods; (d)
inventory in which the Agent does not, for any reason, have a first priority
perfected security interest; and (e) inventory which in the Agent's opinion may
be subject to liens or conflicting claims of ownership, whether such liens or
conflicting claims are asserted or could be asserted by any Person except for
statutory liens or encumbrances permitted by Section 10.1(a), (b) and (d).
KC Steak Bailee Location:
Midwest Cold Storage, LLC
1-B-3
0000 Xxxxx 0xx Xxxxxx
Xxxxxx Xxxx, XX 00000
"Eligible NBC Accounts" means accounts of NBC which the Agent determines in
the exercise of the Agent's reasonable discretion, are eligible for inclusion in
the Borrowing Base at any particular time. Without limiting the Agent's right to
determine that accounts of NBC do not constitute Eligible NBC Accounts, but
without duplication, the following accounts shall not be Eligible NBC Accounts:
(a) all Accounts which are at that time unpaid for a period exceeding twenty one
(21) days after the original invoice date of the original invoice related
thereto, except for Accounts which are covered by a letter of credit; (b) all
Accounts owing by an Account Debtor if more than twenty-five percent (25%) of
the Accounts owing by such Account Debtor are at that time unpaid for a period
exceeding that allowed by the preceding clause, except, in each case, Accounts
which are covered by a letter of credit in amount, form and substance
satisfactory to, and from an issuer acceptable to the Agent; (c)(i) those
Accounts, except Accounts owing from the Account Debtors listed on Exhibit
3A(i), of an Account Debtor, the aggregate face amount of which is in excess of
five percent (5%) of the aggregate face amount of all Eligible Accounts of all
Account Debtors (prior to eliminations based on concentration), (ii) those
Accounts of an Account Debtor listed on Exhibit 3A(i) of the Credit Agreement,
the aggregate face amount of which is in excess of ten percent (10%) of the
aggregate face amount of all Eligible Accounts of all Account Debtors (prior to
eliminations based on concentration), and (iii) those Accounts of Wal-Mart and
Affiliates thereof (Sam's Club, etc.), the aggregate face amount of which is in
excess of fifteen percent (15%) of the aggregate face amount of all Eligible
Accounts of all Account Debtors (prior to eliminations based on concentration),
but in each case only to the extent of such excess; (d) those Accounts owing
from the United States or any department, agency or instrumentality thereof
unless NBC shall have complied with the Assignment of Claims Act to the
satisfaction of the Agent; (e) Accounts which arise out of transactions with
Affiliates of NBC; (f) Accounts, except Accounts owing from the Account Debtors
listed on Exhibit 3A(i), of an Account Debtor that are located outside the
United States, unless such Accounts are covered by a letter of credit issued or
confirmed by a bank acceptable to the Agent; (g) Accounts which are or may be
subject to rights of setoff or counterclaim by the Account Debtor (to the extent
of the amount of such setoff or counterclaim); (h) Accounts in which the Agent
does not, for any reason, have a first priority perfected security interest; (i)
Accounts which in the Agent's opinion may be subject to liens or conflicting
claims of ownership, whether such liens or conflicting claims are asserted or
could be asserted by any Person except for statutory liens or encumbrances
permitted by Section 10.1(a), (b) and (d); and (j) any Account determined by the
Agent not to be an Eligible Account. With regard to Accounts included in the
Borrowing Base by the Borrower in good faith, a determination by the Agent that
such Accounts are not Eligible Account's in accordance with the foregoing shall
be effective on the third Business Day after notice thereof by the Agent to the
Borrower in accordance with Section 13.18.
"Eligible NBC Inventory" means inventory of NBC which the Agent determines
in the exercise of the Agent's reasonable discretion is eligible for inclusion
in the
1-B-4
Borrowing Base at any particular time. Without limiting the Agent's right to
determine that inventory of NBC does not constitute Eligible NBC Inventory, but
without duplication, the following inventory of NBC shall not be Eligible NBC
Inventory: (a) Inventory deemed to be out-of-condition or otherwise
unmerchantable by the United States Department of Agriculture, any state's
Department of Agriculture, or any other Governmental Authority having regulatory
authority over NBC or any of NBC's assets or activities; (b) Inventory for which
a prepayment has been received; (c) Inventory in the possession of third
parties, unless it is Inventory: (i) at a location shown below, for which the
Agent has received a bailee letter satisfactory to the Agent (provided, however,
that NBC need not deliver such letters until 30 days after the Effective Date)
or (ii) covered by negotiable warehouse receipts or negotiable bills of lading
issued by either: (A) a warehouseman licensed and bonded by the United States
Department of Agriculture or any state's Department of Agriculture, or (B) a
recognized carrier having an office in the United States and in a financial
condition reasonably acceptable to the Agent, which receipts or bills of lading
designate the Agent directly or by endorsement as the only Person to which or to
the order of which the warehouseman or carrier is legally obligated to deliver
such Goods; (d) Inventory in which the Agent does not, for any reason, have a
first priority perfected security interest; (e) Inventory which in the Agent's
opinion may be subject to liens or conflicting claims of ownership, whether such
liens or conflicting claims are asserted or could be asserted by any Person
except for statutory liens or encumbrances permitted by Section 10.1(a), (b) and
(d); and (f) any Inventory determined by the Agent not to be Eligible Inventory.
With regard to Inventory included in the Borrowing Base by the Borrower in good
faith, a determination by the Agent that such Inventory is not Eligible
Inventory in accordance with the foregoing shall be effective on the third
Business Day after notice thereof by the Agent to the Borrower in accordance
with Section 13.18.
NBC Bailee Location:
Inland Cold Storage
0000 Xxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
"Insurance Reserve" means a collateral reserve against casualty losses that
would not be covered by insurance as a result of the self-insured retention
deductible provision in the Borrower's property insurance (i) in an amount equal
to $10,000,000 when the self-insured retention deductible under the Borrower's
property insurance procured in accordance with Section 9.5 exceeds $15,000,000;
(ii) in an amount equal to $5,000,000 when the self-insured retention deductible
under the Borrower's property insurance procured in accordance with Section 9.5
exceeds $10,000,000 but is less than or equal to $15,000,000; and (iii) in an
amount equal to $0 when the self-insured retention deductible under the
Borrower's property insurance procured in accordance with Section 9.5 is less
than or equal to $10,000,000.
"Producer Payables" means with respect to any Person, all amounts at any
time payable by the such Person for the purchase of cattle, feed, grain or other
farm products.
1-B-5
Exhibit 2A to
Sixth Amended and
Restated Credit Agreement
Line of Credit Note
$______________ Greenwood Village, Colorado
___________, 2007
FOR VALUE RECEIVED, the undersigned National Beef Packing Company, LLC, a
Delaware limited liability company (together with its successors as permitted in
the Credit Agreement, the "Borrower"), promises to pay to the order of
______________ (hereinafter referred to as "Lender"), at such place as the Agent
(as hereinafter defined), may from time to time designate, in lawful money of
the United States of America and in immediately available funds, the principal
sum of ____________________ ($_______________) or, if less, the unpaid principal
amount of the Line of Credit Loans from the Lender to the Borrower outstanding
under the Credit Agreement (as hereinafter defined), together with interest on
any and all principal amounts outstanding calculated in accordance with the
provisions set forth below. This note is issued under that certain Sixth Amended
and Restated Credit Agreement dated as of July 25, 2007 (as the same may be
amended, replaced, restated and/or supplemented from time to time, the "Credit
Agreement") between the Borrower, CoBank, ACB, an agricultural credit bank, as
agent (in such capacity, together with its successors and assigns in such
capacity, the "Agent"), Lender and the other lenders identified therein
(collectively the "Lenders").
Capitalized terms used and not defined herein shall have the meanings given
to such terms in the Credit Agreement.
This note is the one of the Line of Credit Notes referred to in the Credit
Agreement, and is a replacement and substitute for, but does not constitute
payment of, one or more Line of Credit Notes that may have been previously
issued by the Borrower. This note is secured, is subject to scheduled payments
and certain permissive and mandatory prepayments, and is subject to
acceleration, in each case upon the terms provided in the Credit Agreement and
in the Security Documents referenced therein.
Borrower shall pay interest on the unpaid principal amount of each Loan
made by the Lender from the date of such Loan until such principal amount shall
be paid in full, at the times and at the rates per annum set forth in the Credit
Agreement.
In addition to the repayment requirements imposed upon the Borrower under
the Credit Agreement, together with the agreements referred to therein, the
principal and interest owing under this note shall be due and payable in full on
the Maturity Date applicable to the Line of Credit Loans, without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by the Borrower. Time is of the essence hereof.
2-A-1
The obligations of the Borrower to the Lender hereunder together with the
other Liabilities are secured by certain Collateral as set forth in the Credit
Agreement and in the Security Documents.
In the case of a Matured Default, the undersigned agrees to pay all costs
and expenses of collection, including reasonable attorneys' fees incurred by the
Agent or its successors and assigns.
This note shall be construed in accordance with, and governed by, the laws
of the State of Colorado, without regard to the conflict of laws principles
thereof.
NATIONAL BEEF PACKING COMPANY, LLC,
a Delaware limited liability company
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
2-A-2
Exhibit 2B to
Sixth Amended and
Restated Credit Agreement
Term Note
$______________ Greenwood Village, Colorado
_____________, 2007
FOR VALUE RECEIVED, the undersigned National Beef Packing Company, LLC, a
Delaware limited liability partnership (together with its successors as
permitted in the Credit Agreement, the "Borrower"), promises to pay to the order
of _________________ (hereinafter referred to as "Lender"), at such place as the
Agent (as hereinafter defined) may from time to time designate, in lawful money
of the United States of America and in immediately available funds, the
principal sum of _____________________ ($_____________) or, if less, the unpaid
principal amount of the Term Loans from the Lender to the Borrower outstanding
under the Credit Agreement (as hereinafter defined), together with interest on
any and all principal amounts outstanding calculated in accordance with the
provisions set forth below. This note is issued under that certain Sixth Amended
and Restated Credit Agreement dated as of July 25, 2007 (as the same may be
amended, replaced, restated and/or supplemented from time to time, the "Credit
Agreement") between the Borrower, CoBank, ACB, an agricultural credit bank, as
agent (in such capacity, together with its successors and assigns in such
capacity, the "Agent"), Lender and the other lenders identified therein
(collectively the "Lenders").
This note is one of the Term Notes referred to in the Credit Agreement, and
is a replacement and substitute for, but does not constitute payment of, one or
more Term Notes that may have been previously issued by the Borrower. This note
is secured, is subject to scheduled payments and certain permissive and
mandatory prepayments, and is subject to acceleration, in each case upon the
terms provided in the Credit Agreement and in the Security Documents referenced
therein.
Borrower shall pay interest on the unpaid principal amount of each Loan
made by the Lender from the date of such Loan until such principal amount shall
be paid in full, at the times and at the rates per annum set forth in the Credit
Agreement.
In addition to the repayment requirements imposed upon the Borrower under
the Credit Agreement, together with the agreements referred to therein, the
principal and interest owing under this note shall be due and payable in full on
the Maturity Date applicable to the Term Loans, without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by the
Borrower. Time is of the essence hereof.
The obligations of the Borrower to the Lender hereunder, together with the
other Liabilities, are secured by certain Collateral as set forth in the Credit
Agreement and in the Security Documents.
2-B-1
In the case of a Matured Default, the undersigned agrees to pay all costs
and expenses of collection, including reasonable attorneys' fees incurred by the
Agent or its successors and assigns.
This note shall be construed in accordance with, and governed by, the laws
of the State of Colorado without regard to the conflict of laws principles
thereof.
NATIONAL BEEF PACKING COMPANY, LLC,
a Delaware limited liability company
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
2-B-2
Exhibit 2C to
Sixth Amended and
Restated Credit Agreement
Swing Line Note
$_____________ Greenwood Village, Colorado
___________, 2007
FOR VALUE RECEIVED, the undersigned National Beef Packing Company, LLC, a
Delaware limited liability company (together with its successors as permitted in
the Credit Agreement, the "Borrower"), promises to pay to the order of CoBank,
ACB (hereinafter referred to as "Swing Line Lender"), at such place as the Swing
Line Lender may designate, in lawful money of the United States of America and
in immediately available funds, the principal sum of
________________________________ ($______________) or, if less, the unpaid
principal amount of the Swing Line Loans from the Swing Line Lender to the
Borrower outstanding under the Credit Agreement (as hereinafter defined),
together with interest on any and all principal amounts outstanding calculated
in accordance with the provisions set forth below. This note is issued under
that certain Sixth Amended and Restated Credit Agreement dated as of July 25,
2007 (as the same has been and may in the future be amended, replaced, restated
and/or supplemented from time to time, the "Credit Agreement") between the
Borrower, CoBank, ACB, an agricultural credit bank, as agent (in such capacity,
together with its successors and assigns in such capacity, the "Agent"), and the
lenders identified therein (the "Lenders").
Capitalized terms used and not defined herein shall have the meanings given
to such terms in the Credit Agreement.
This note is the Swing Line Note referred to in the Credit Agreement and is
a replacement and substitution for, but does not constitute payment of, any
Swing Line Note issued to the Swing Line Lender on March 21, 2007. This note is
secured, is subject to scheduled payments and certain permissive and mandatory
prepayments, and is subject to acceleration, in each case upon the terms
provided in the Credit Agreement and in the Security Documents referenced
therein.
Borrower shall pay interest on the unpaid principal amount of each Loan
made by the Swing Line Lender from the date of such Loan until such principal
amount shall be paid in full, at the times and at the rates per annum set forth
in the Credit Agreement.
In addition to the repayment requirements imposed upon the Borrower under
the Credit Agreement, together with the agreements referred to therein, the
principal and interest owing under this note shall be due and payable in full on
the Maturity Date applicable to the Swing Line Loans, without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by the Borrower. Time is of the essence hereof.
2-C-1
The obligations of the Borrower to the Lender hereunder together with the
other Liabilities are secured by certain Collateral as set forth in the Credit
Agreement and in the Security Documents.
In the case of a Matured Default, the undersigned agrees to pay all costs
and expenses of collection, including reasonable attorneys' fees incurred by the
Agent or its successors and assigns.
This note shall be construed in accordance with, and governed by, the laws
of the State of Colorado without regard to the conflict of laws principles
thereof.
NATIONAL BEEF PACKING COMPANY, LLC,
a Delaware limited liability company
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
2-C-2
