CREDIT AGREEMENT
(7-Year Convertible Term Revolving Loan)
(10-YEAR CONVERTIBLE TERM REVOLVING LOAN)
BY AND BETWEEN
COBANK, ACB,
as Lead Arranger and Book Manager, and as Administrative, Documentation and
Collateral Agent, and as a Syndication Party;
FARM CREDIT SERVICES OF AMERICA, FLCA
AS CO-ARRANGER and as a Syndication Party; AND
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC., CREDIT
AGRICOLE INDOSUEZ, HARRIS TRUST AND SAVINGS BANK, SUNTRUST BANK,
AND U.S. BANCORP AG CREDIT, INC.,
as SYNDICATION PARTIES,
AND
PILGRIM'S PRIDE CORPORATION, AS BORROWER
DATED AS OF DECEMBER 14, 1999
CREDIT AGREEMENT
(7-YEAR CONVERTIBLE TERM REVOLVING LOAN)
(10-Year Convertible Term Revolving Loan)
Pilgrim's Pride Corporation
THIS AGREEMENT ("CREDIT AGREEMENT") is entered into as of the 14th day
of December 1999, by and between COBANK, ACB ("COBANK") as the
Administrative, Documentation, and Collateral Agent for the benefit of the
present and future Syndication Parties (in that capacity "ADMINISTRATIVE
AGENT") and Lead Arranger and Book Manager and as a Syndication Party, FARM
CREDIT SERVICES OF AMERICA, FLCA, as Co-Arranger ("FCSA") and as a
Syndication Party, the Syndication Parties identified on SCHEDULE 1 hereto,
and PILGRIM'S PRIDE CORPORATION, a corporation formed under the laws of the
State of Delaware, whose address is 110 South Texas Street, Pittsburg,
Texas 95686 ("BORROWER").
Article 1. DEFINED TERMS
As used in this Credit Agreement, the following terms shall have the
meanings set forth below (and such meaning shall be equally applicable to
both the singular and plural form of the terms defined, as the context may
require):
1.1 ADMINISTRATIVE AGENT: SHALL MEAN COBANK, ACB.
1.2 ADMINISTRATIVE AGENT OFFICE: SHALL MEAN THE ADDRESS SET FORTH AT
SUBSECTION 15.4.2, AS IT MAY CHANGE FROM TIME TO TIME BY NOTICE TO ALL PARTIES
TO THIS CREDIT AGREEMENT.
1.3 ADVANCE: AN ADVANCE OF FUNDS UNDER EITHER THE 7 YEAR REVOLVING
LOAN OR THE 10 YEAR REVOLVING LOAN.
1.4 ADVANCE DATE: A DAY (WHICH SHALL BE A BANKING DAY) ON WHICH AN
ADVANCE IS MADE.
1.5 AGGREGATE COMMITMENT: COLLECTIVELY THE AGGREGATE 7 YEAR COMMITMENT
AND THE AGGREGATE 10 YEAR COMMITMENT.
1.6 AGGREGATE 7 YEAR COMMITMENT: SHALL BE $60,000,000.00, SUBJECT TO
REDUCTION AS PROVIDED IN SECTION 2.8 HEREOF.
1.7 AGGREGATE 10 YEAR COMMITMENT: SHALL BE $140,000,000.00, SUBJECT TO
REDUCTION AS PROVIDED IN SECTION 3.8 HEREOF.
1.8 AMORTIZATION: the total amortization of Borrower and its
Consolidated Subsidiaries as measured in accordance with GAAP.
1.9 APPLICABLE LENDING OFFICE: means, for each Syndication Party and
for each type of Advance, the lending office of such Syndication Party
designated as such for such type of Advance on its signature page hereof or in
the applicable Syndication Acquisition Agreement or such other office of such
Syndication Party as such Syndication Party may from time to time specify to
the Administrative Agent and Borrower as the office by which its Advances of
such type are to be made and maintained.
1.10 APPLICABLE MARGIN: MEANS THE 7 YEAR LIBOR MARGIN, THE 7 YEAR BASE
RATE MARGIN, THE 10 YEAR LIBOR MARGIN, OR THE 10 YEAR BASE RATE MARGIN, AS
APPLICABLE.
1.11 APPRAISAL: A WRITTEN APPRAISAL REPORT BY AN ARA OR MAI CERTIFIED
APPRAISER WITH A GENERAL CERTIFICATION FROM THE STATE OF TEXAS, WHICH REPORT
PROVIDES THE APPRAISER'S OPINION AS TO THE MARKET VALUE OF THE PROPERTY BEING
APPRAISED ON THE BASIS OF (A) COMPARABLE SALES AND (B) REPLACEMENT COST.
1.12 APPRAISED VALUE: THE VALUE OF AN ASSET INCLUDED WITHIN THE
COLLATERAL DETERMINED ON THE BASIS OF THE FAIR MARKET VALUE AS SET FORTH IN THE
MOST RECENT APPRAISAL.
1.13 AVAILABILITY PERIOD: shall mean the period from the Closing Date
until the Banking Day immediately prior to the fourth anniversary of the
Closing Date.
1.14 AVAILABLE AMOUNT: THE LESSER OF (A) $200,000,000.00 AND (B)
SEVENTY-FIVE PERCENT (75%) OF THE APPRAISED VALUE (AS SHOWN ON THE LATEST
AVAILABLE AMOUNT REPORT PURSUANT TO THE LATEST APPRAISAL) OF THE COLLATERAL IN
WHICH THE SYNDICATION PARTIES HAVE A PERFECTED FIRST PRIORITY LIEN (WITHOUT
CONSIDERING THE LIEN OF, BUT AFTER DEDUCTING FROM THE APPRAISED VALUE THE
AMOUNT OWING UNDER, ANY PARI PASSU LOAN SECURITY INTEREST); PROVIDED however
that (a) the portion of the Dallas facility which is included in determining
the Available Amount is limited as set forth in the Post Closing Letter, and
(b) in calculating the amount of the Appraised Value of the Pittsburg facility
which may be included in determining the Available Amount, such Appraised Value
shall be reduced by $1,250,000.00 until such time as Borrower has completed the
environmental cleanup matters described in the Post Closing Letter.
1.15 BANK DEBT: ALL AMOUNTS OWING UNDER OR ON ACCOUNT OF THE NOTES,
FUNDING LOSSES AND ALL INTEREST, FEES, EXPENSES, CHARGES AND OTHER AMOUNTS
PAYABLE BY BORROWER PURSUANT TO THE LOAN DOCUMENTS.
1.16 BANKING DAY: any day (a) other than a Saturday or Sunday and other
than a day which is a Federal legal holiday or a legal holiday for banks in the
States of Colorado or New York, and (b) if such day relates to a borrowing of,
a payment or prepayment of principal of or interest on, a continuation of or
conversion into, or a LIBO Rate Period for, a LIBO Rate Loan, or a notice by
Borrower with respect to any such borrowing, payment, prepayment, continuation,
conversion, or LIBO Rate Period, on which dealings in U.S. Dollar deposits are
carried out in the London interbank market.
1.17 BASE RATE: A RATE OF INTEREST PER ANNUM EQUAL TO THE "PRIME RATE"
AS PUBLISHED FROM TIME TO TIME IN THE EASTERN EDITION OF THE WALL STREET
JOURNAL as the average prime lending rate for seventy-five percent (75%) of the
United States' thirty (30) largest commercial banks, or if the WALL STREET
JOURNAL shall cease publication or cease publishing the "prime rate" on a
regular basis, such other regularly published average prime rate applicable to
such commercial banks as is acceptable to the Administrative Agent in its
reasonable discretion, with such rate modified by adding the 7 Year Base Rate
Margin or the 10 Year Base Rate Margin, depending on whether the Base Rate Loan
is being made under the 7 Year Revolving Loan or the 10 Year Revolving Loan,
respectively.
1.18 BORROWER'S ACCOUNT: shall mean Borrower's accoun at
Harris Trust and Savings Bank.
1.19 BORROWER BENEFIT PLAN: means (a) any funded "employee welfare
benefit plan," as that term is defined in Section 3(1) of ERISA; (b) any
"multiemployer plans," as defined in Section 3(37) of ERISA; (c) any "employee
pension benefit plan" as defined in Section 3(2) of ERISA; (d) any "employee
benefit plan", as such term is defined in Section 3(3) of ERISA; (e) any
"multiple employer plan" within the meaning of Section 413 of the Code; (f) any
"multiple employer welfare arrangement" within the meaning of Section 3(40) of
ERISA; (g) a "voluntary employees' beneficiary association" within the meaning
of Section 501(c)(9) of the Code; (h) a "welfare benefit fund" within the
meaning of Section 419 of the Code; or (i) any employee welfare benefit plan
within the meaning of Section 3(1) of ERISA for the benefit of retired or
former employees, which is maintained by the Borrower or in which Borrower
participates or to which Borrower is obligated to contribute, but excluding any
such plan, arrangement, association or fund that is maintained outside of the
United States primarily for the benefit of persons substantially all of whom
are nonresident aliens.
1.20 CAPITAL LEASE: means any lease of property (whether real, personal
or mixed) by a Person, the discounted present value of the rental obligations
of such Person as lessee under such lease, in accordance with GAAP, is required
to be capitalized on the balance sheet of such Person.
1.21 CAPITAL LEASE OBLIGATION: the discounted present value of the
rental obligation, under a Capital Lease.
1.22 CASUALTY EVENT: MEANS A LOSS OR TAKING CAUSED BY OR RESULTING FROM
A FIRE, EARTHQUAKE, EXPLOSION, WIND, RAIN, OR CONDEMNATION, OR SUBSTANTIALLY
SIMILAR OCCURRENCE.
1.23 CASUALTY PROCEEDS: THE AMOUNT RECEIVED ON ACCOUNT OF A CASUALTY
EVENT FROM INSURANCE, CONDEMNATION AWARD, JUDGMENT, OR SETTLEMENT.
1.24 CLOSING DATE: that date, which must occur on or before December
30, 1999, on which the Administrative Agent, the Syndication Parties, and
Borrower have executed all Loan Documents to which they are parties and on
which the conditions set forth in Section 9.1 of this Credit Agreement have
been met.
1.25 CODE: means the Internal Revenue Code of 1986, as amended from
time to time.
1.26 COMERICA LOAN: that loan in the current principal amount of not
more than $20,000,000.00 to Pilgrim's Pride S.A. de C.V. from Comerica Bank,
pursuant to that certain Revolving Credit Agreement dated as of March 9, 1998,
as it may be amended from time to time, and including any loan to refinance the
principal owing under such loan so long as the amount of such refinance loan
does not exceed $20,000,000.00 principal.
1.27 COMMITTED 10 YEAR ADVANCES: the principal amount of all 10 Year
Advances which any Syndication Party is obligated to make as a result of
Borrower having presented a Borrowing Notice to the Administrative Agent as
provided in Section 3.6 hereof, but which has not been funded.
1.28 COMMITTED 7 YEAR ADVANCES: the principal amount of all 7 Year
Advances which any Syndication Party is obligated to make as a result of
Borrower having presented a Borrowing Notice to the Administrative Agent
pursuant to Section 2.6 hereof, but which has not been funded.
1.29 COMPLIANCE CERTIFICATE: a certificate of the chief financial
officer of Borrower in the form attached hereto as EXHIBIT 1.29 and otherwise
reasonably acceptable to the Administrative Agent.
1.30 CONSOLIDATED CURRENT ASSETS: the total current assets of Borrower
and its Subsidiaries as measured in accordance with GAAP.
1.31 CONSOLIDATED CURRENT LIABILITIES: the total current liabilities of
Borrower and its Subsidiaries as measured in accordance with GAAP.
1.32 CONSOLIDATED INTEREST EXPENSE: all interest expense of Borrower
and its Consolidated Subsidiaries, as determined in accordance with GAAP.
1.33 CONSOLIDATED NET INCOME: the net income of Borrower and all its
Consolidated Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
1.34 CONSOLIDATED SUBSIDIARY: any Subsidiary whose accounts are
consolidated with those of Borrower in accordance with GAAP.
1.35 CONVERTED LOANS: COLLECTIVELY THE Converted 7 Year Loans and the
Converted 10 Year Loans.
1.36 CURRENT ASSETS: the current amount of assets of a Person which in
accordance with GAAP may be properly classified as current assets after
deducting adequate reserves where proper.
1.37 CURRENT LIABILITIES: all items (including taxes accrued as
estimated) which in accordance with GAAP may be properly classified as current
liabilities, and including in any event all amounts outstanding from time to
time.
1.38 CURRENT RATIO: the ratio of Current Assets to Current Liabilities
of Borrower and its Consolidated Subsidiaries.
1.39 DEBT: means as to any Person, without duplication: (a)
indebtedness, obligations, or liability of such Person for borrowed money
(including by the issuance of debt securities), or for the deferred purchase
price of property or services (excluding trade obligations); (b) the aggregate
of the principal components of all Capital Leases and other agreements for the
use, acquisition or retention of real or personal property which are required
to be capitalized under GAAP; (c) to the extent drawn upon, obligations of such
Person arising under bankers' or trade acceptance facilities, letters of
credit, customer advances and other extensions of credit whether or not
representing obligations for borrowed money; (d) all guarantees, endorsements
and other contingent obligations of such Person with respect to indebtedness
arising from money borrowed by others (with the exception of guarantees of
trade payables of Pilgrim's Pride S.A. de C.V., a Mexican corporation and a
wholly owned subsidiary of Borrower within the limits allowed under Section
11.5 hereof); (e) all obligations secured by a lien on property owned by such
Person, whether or not the obligations have been assumed; and (f) all
obligations of such Person under any agreement providing for an interest rate
swap, cap, cap and floor, contingent participation or other hedging mechanisms
with respect to interest payable on any of the items described in this
definition; provided that, notwithstanding the foregoing, the term "Debt" shall
not include the amount of indebtedness outstanding under the 10 7/8% Notes, so
long as the trustee for the 10 7/8% Notes shall hold cash in an amount
sufficient to repay the 10 7/8% Notes in full and so long as such cash is
treated as restricted cash.
1.40 DEFAULT INTEREST RATE: a rate of interest equal to 200 basis
points in excess of the Base Rate which would otherwise be applicable on the
Loan.
1.41 DEPRECIATION: the total depreciation of Borrower and its
Consolidated Subsidiaries as measured in accordance with GAAP.
1.42 EBITDA: for any period, for Borrower and its Consolidated
Subsidiaries, net income for such period, plus the sum of the amounts of (a)
Interest Expense, plus (b) federal and state income taxes, plus (c)
depreciation and amortization expenses, plus (d) extraordinary losses, minus
(e) extraordinary gains, in each case as charged against (or added to, as the
case may be) revenues to arrive at net income for such period, all as
determined by GAAP.
1.43 ENVIRONMENTAL LAWS: any federal, state, or local law, statute,
ordinance, rule, regulation, administration order, or permit now in effect or
hereinafter enacted, pertaining to the public health, safety, industrial
hygiene, or the environmental conditions on, under or about the Collateral,
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended, 42 U.S.C. 9601-9657
("CERCLA") and the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
6901-6987 ("RCRA").
1.44 ENVIRONMENTAL REGULATIONS: as defined in the definition of
Hazardous Substances.
1.45 ERISA: the Employee Retirement Income Security Act of 1974, as
amended, and the regulations thereunder.
1.46 ERISA AFFILIATE: means any corporation or trade or business which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Borrower or is under common control (within the
meaning of Section 414(c) of the Code) with Borrower, provided, however, that
for purposes of provisions herein concerning minimum funding obligations
(imposed under Section 412 of the Code or Section 302 of ERISA), the term
"ERISA Affiliate" shall also include any entity required to be aggregated with
Borrower under Section 414(m) or 414(o) of the Code.
1.47 FACILITIES: shall be a collective reference to the 7 Year
Revolving Loan and the 10 Year Revolving Loan.
1.48 FISCAL QUARTER: each of the four (4) quarter accounting periods of
thirteen (13) or fourteen (14) weeks of Borrower that together comprise a
Fiscal Year.
1.49 FISCAL YEAR: the 52 or 53 week period (a) ending on the Saturday
closest to September 30 in each calendar year, regardless of whether such
Saturday occurs in September or October of any calendar year and (b) beginning
on the day immediately following the end of the preceding Fiscal Year.
1.50 FIXED CHARGE COVERAGE RATIO: the ratio of (a) the sum of EBITDA
and all amounts payable under all non-cancelable Operating Leases (determined
on a consolidated basis in accordance with GAAP) for the period in question, to
(b) the sum of (without duplication) (i) Interest Expense for such period, (ii)
the sum of the scheduled current maturities (determined on a consolidated basis
in accordance with GAAP) of Debt during the period in question, (iii) all
amounts payable under non-cancelable Operating Leases (determined as aforesaid)
during such period, and (iv) all amounts payable with respect to Capital Leases
(determined on a consolidated basis in accordance with GAAP) for the period in
question.
1.51 FUNDING SHARE: shall mean the amount of any Advance which each
Syndication Party is required to fund, which shall be determined as follows:
(a) for an Advance under the 7 Year Revolving Loan, the amount of such Advance
multiplied by such Syndication Party's Individual 7 Year Pro Rata Share as of,
but without giving effect to, such Advance, and (b) for an Advance under the 10
Year Revolving Loan, the amount of such Advance multiplied by such Syndication
Party's Individual 10 Year Pro Rata Share as of, but without giving effect to,
such Advance.
1.52 GAAP: generally accepted accounting principles in the United
States of America, applied consistently, as in effect from time to time.
1.53 GOOD FAITH CONTEST: means the contest of an item if (a) the item
is diligently contested in good faith by appropriate proceedings timely
instituted, (b) either the item is (i) bonded or (ii) adequate reserves are
established with respect to the contested item if and to the extent reasonably
satisfactory to the Required Lenders, and (c) during the period of such
contest, the enforcement of any contested item is effectively stayed.
1.54 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.
1.55 HANCOCK LOAN: shall mean the loan to Borrower from John Hancock
Mutual Life Insurance Company and Signature 1A (Cayman), Ltd. in the maximum
principal amount of $85,000,000.00 made pursuant to that certain Amended and
Restated Note Purchase Agreement dated as of April 14, 1997, as it may be
amended from time to time (provided that the principal amount owing does not
exceed $85,000,000.00) and the notes issued thereunder and providing a maturity
date for said notes of February 28, 2006 or earlier.
1.56 HARRIS LOAN: the loans, letters of credit and reimbursement
obligations relating to letters of credit in the current principal amount of
not more than $75,239,727.00 to Borrower from Harris Trust and Savings Bank
(individually and as Agent), U.S. Bancorp Ag Credit, Inc., CoBank, ACB,
SunTrust Bank, Atlanta, and Credit Agricole Indosuez, and their respective
successors and assigns, pursuant to that certain Second Amended and Restated
Secured Credit Agreement dated as of November 5, 1999, as it may be amended
from time to time (provided that the principal amount owing does not exceed
$75,239,727.00).
1.57 HAZARDOUS SUBSTANCES: dangerous, toxic or hazardous pollutants,
contaminants, chemicals, wastes, materials or substances, as defined in or
governed by the provisions of any Environmental Laws or any other federal,
state or local law, statute, code, ordinance, regulation, requirement or rule
relating thereto ("ENVIRONMENTAL REGULATIONS"), and also including urea
formaldehyde, polychlorinated biphenyls, asbestos, asbestos-containing
materials, nuclear fuel or waste, and petroleum products, or any other waste,
material, substances, pollutant or contaminant which would subject an owner of
property to any damages, penalties or liabilities under any applicable
Environmental Regulations.
1.58 INDIVIDUAL COMMITMENT: shall mean with respect to any Syndication
Party, its Individual 10 Year Commitment or its Individual 7 Year Commitment,
as applicable.
1.59 INDIVIDUAL OUTSTANDING 7 YEAR OBLIGATIONS: shall mean with respect
to any Syndication Party the total at any time, without duplication, of (a) the
aggregate outstanding principal amount of all 7 Year Advances made by such
Syndication Party, and (b) all of such Syndication Party's Committed 7 Year
Advances.
1.60 INDIVIDUAL OUTSTANDING 10 YEAR OBLIGATIONS: shall mean with
respect to any Syndication Party the total at any time, without duplication, of
(a) the aggregate outstanding principal amount of all 10 Year Advances made by
such Syndication Party, (b) all of such Syndication Party's Committed 10 Year
Advances.
1.61 INDIVIDUAL PRO RATA SHARE: shall mean with respect to any
Syndication Party at any time, (a) the sum of its Individual 7 Year Commitment
plus its Individual 10 Year Commitment, divided by (b) the Aggregate
Commitment.
1.62 INDIVIDUAL 7 YEAR COMMITMENT: shall mean with respect to any
Syndication Party the amount shown as its Individual 7 Year Commitment on
SCHEDULE 1 hereto, subject to adjustment in the event of the sale of all or a
portion of a Syndication Interest in accordance with Section 14.27 hereof, or a
reduction in the Aggregate 7 Year Commitment in accordance with Section 2.8
hereof.
1.63 INDIVIDUAL 7 YEAR LENDING CAPACITY: shall mean with respect to any
Syndication Party the amount at any time of its Individual 7 Year Commitment,
less its Individual Outstanding 7 Year Obligations.
1.64 INDIVIDUAL 7 YEAR PRO RATA SHARE: shall mean with respect to any
Syndication Party a fraction, expressed as a percentage (rounded to 8 decimal
points), where the numerator is such Syndication Party's Individual 7 Year
Commitment; and the denominator is the Aggregate 7 Year Commitment, determined
(a) in the case of LIBO Rate Loans, at 12:00 noon (Central time) on the Banking
Day Borrower delivers a Borrowing Notice pursuant to which Borrower requests
such LIBOR Loan, and (b) in all other cases, 12:00 noon (Central time) on the
Banking Day Borrower delivers a Borrowing Notice.
1.65 INDIVIDUAL 10 YEAR COMMITMENT: shall mean with respect to any
Syndication Party the amount shown as its Individual 10 Year Commitment on
SCHEDULE 1 hereto, subject to adjustment in the event of the sale of all or a
portion of a Syndication Interest in accordance with Section 14.27 hereof, or a
reduction in the Aggregate 10 Year Commitment in accordance with Section 3.8
hereof.
1.66 INDIVIDUAL 10 YEAR LENDING CAPACITY: shall mean with respect to
any Syndication Party the amount at any time of its Individual 10 Year
Commitment, less its Individual Outstanding 10 Year Obligations.
1.67 INDIVIDUAL 10 YEAR PRO RATA SHARE: shall mean with respect to any
Syndication Party a fraction, expressed as a percentage (rounded to 8 decimal
points), where the numerator is such Syndication Party's Individual 10 Year
Commitment; and the denominator is the Aggregate 10 Year Commitment, determined
(a) in the case of LIBO Rate Loans, at 12:00 noon (Central time) on the Banking
Day Borrower delivers a Borrowing Notice pursuant to which Borrower requests
such LIBOR Loan, and (b) in all other cases, 12:00 noon (Central time) on the
Banking Day Borrower delivers a Borrowing Notice.
1.68 INTANGIBLE ASSET: means, license agreements, trademarks, trade
names, patents, capitalized research and development, proprietary products (the
results of past research and development treated as long term assets and
excluded from inventory) and goodwill (all determined on a consolidated basis
in accordance with GAAP.
1.69 INTEREST EXPENSE: means all interest charges during such period,
including all amortization of debt discount expense and imputed interest with
respect to Capital Lease obligations, determined on a consolidated basis in
accordance with GAAP.
1.70 INVESTMENT: means, with respect to any Person, (a) any loan or
advance by such Person to any other Person, (b) the purchase or other
acquisition by such Person of any capital stock, obligations or securities of,
or any capital contribution to, or investment in, or the acquisition by such
Person of all or substantially all of the assets of, or any interest in, any
other Person, (c) any performance or standby letter of credit where (i) that
Person has the reimbursement obligation to the issuer, and (ii) the proceeds of
such letter of credit are to be used for the benefit of any other Person, (d)
the agreement by such Person to make funds available for the benefit of another
Person to either cover cost overruns incurred in connection with the
construction of a project or facility, or to fund a debt service reserve
account, (e) the agreement by such Person to assume, guarantee, endorse or
otherwise be or become directly or contingently responsible or liable for the
obligations or Debts of any other Person (other than by endorsement for
collection in the ordinary course of business), (f) an agreement to purchase
any obligations, stocks, assets, goods or services but excluding an agreement
to purchase any assets, goods or services entered into in the ordinary course
of business, (g) an agreement to supply or advance any funds, assets, goods or
services entered into outside the ordinary course of business, or (h) an
agreement to maintain or cause such Person to maintain a minimum working
capital or net worth or otherwise to assure the creditors of any Person against
loss.
1.71 LEVERAGE RATIO: the ratio for the Borrower and its Consolidated
Subsidiaries of (a) the aggregate outstanding principal amount of all Debt ;
LESS unrestricted cash and cash equivalents, to (b) the sum of aggregate
outstanding principal amount of all Debt included in clause (a) above; LESS
unrestricted cash and cash equivalents PLUS Net Worth.
1.72 LIBO RATE: the rate (rounded upwards, if necessary, to the next
1/16{th} of one percent) for deposits in U.S. dollars with maturities
comparable to the selected LIBO Rate Period that appears on the display
designated as Page "3750" of the Telerate Service (or such other Page as may
replace the 3750 Page of that service or, if the Telerate Service shall cease
displaying such rates, as published by such other service or services as may be
nominated by the British Bankers' Association for the purpose of displaying
London Interbank Offered Rates for U.S. Dollar deposits or, if none, the
comparable reference on the Reuters Screen LIBOR Page or such other quotation
service as may be chosen by the Administrative Agent), determined effective as
of 1:00 P.M. (Central Time) on the day which is two (2) Banking Days prior to
the first day of each LIBO Rate Period, reserve adjusted basis for Regulation D
on a demonstrated basis, with such rate modified by adding the 7 Year LIBOR
Margin or the 10 Year LIBOR Margin, depending on whether the LIBO Rate Loan is
being made under the 7 Year Revolving Loan or the 10 Year Revolving Loan,
respectively.
1.73 LIEN: means with respect to any asset any mortgage, deed of trust,
pledge, security interest, hypothecation, assignment for security purposes,
encumbrance, lien (statutory or other), or other security agreement or charge,
or encumbrance of any kind or nature whatsoever (including, without limitation,
any conditional sale, Capital Lease or other title retention agreement related
to such asset).
1.74 LOANS: shall mean, collectively, all Base Rate Loans and all LIBO
Rate Loans outstanding at any time.
1.75 LOAN DOCUMENTS: this Credit Agreement, the Notes and the Security
Documents.
1.76 MATERIAL ADVERSE EFFECT: means: (a) a material adverse effect on
the financial condition, results of operation, business or property of Borrower
and the Subsidiaries, considered in the aggregate; or (b) a material adverse
effect on the ability of Borrower to perform its obligations under this Credit
Agreement and the other Loan Documents.
1.77 MATERIAL AGREEMENTS: all agreements of Borrower, the termination
or breach of which, based upon Borrower's knowledge as of the date of making
any representation with respect thereto, would have a Material Adverse Effect.
1.78 MULTIEMPLOYER PLAN: means a Plan defined as such in Section 3(37)
of ERISA.
1.79 NET TANGIBLE ASSETS: the excess of the value of total assets (as
determined in accordance with GAAP) over the value of Intangible Assets of the
Borrower and its Consolidated Subsidiaries.
1.80 NET WORKING CAPITAL: the excess for the Borrower and its
Consolidated Subsidiaries of Current Assets over Current Liabilities.
1.81 NET WORTH: the total assets (as determined in accordance with
GAAP) minus the Total Liabilities of the Borrower and its Consolidated
Subsidiaries, all determined on a consolidated basis as in accordance with
GAAP.
1.82 NOTE OR NOTES: the promissory notes executed by Borrower pursuant
to Sections 2.3 and 3.3 hereof, and all amendments, renewals, substitutions and
extensions thereof.
1.83 OPERATING LEASE: means any lease of property (whether real,
personal or mixed) for a period of longer than one year by a Person under which
such Person is lessee, other than a Capital Lease.
1.84 ORGANIZATIONAL DOCUMENTS: in the case of a corporation, its
articles or certificate of incorporation and bylaws; in the case of a
partnership, its partnership agreement and certificate of limited partnership,
if applicable; in the case of a limited liability company, its articles of
organization and its operating agreement, limited liability company agreement
or regulations.
1.85 PARI PASSU LOAN: shall mean a loan which meets all of the
following requirements: (a) the proceeds are all made available to Borrower;
(b) it is secured by all or a portion of the Collateral equally and ratably
with the Bank Debt on the same lien priority basis; (c) the lender thereunder
has executed an intercreditor agreement in form and substance substantially
identical to EXHIBIT 1.85 hereto ("INTERCREDITOR AGREEMENT"); (d) Borrower has
furnished to the Administrative Agent a pro-forma Available Amount Report with
such updated Appraisals as the Administrative Agent may reasonably require at,
or no more than ten (10) days prior to, the date the Administrative Agent is
requested to execute such intercreditor agreement; provided that no updated
Appraisals will be required so long as (i) the aggregate outstanding principal
balance of all Pari Passu Loans (including the proposed Pari Passu Loan)
incurred since the last Appraisal does not exceed $25,000,000.00 and (ii) the
Leverage Ratio is not greater than fifty five percent (55%); and (e) Borrower
demonstrates to the Administrative Agent, in each case on a pro-forma basis
(including, in each case, the proposed Pari Passu Loan), (i) that the aggregate
outstanding principal amounts owing under all 7 Year Revolving Notes and all 10
Year Revolving Notes will not exceed the Available Amount as determined
pursuant to clause (b) of Section 1.14 hereof (without regard to clause (a) of
such Section), and (ii) compliance with the financial covenants.
1.86 PERSON: any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, cooperative association, institution, or government or
governmental agency (whether national, federal, state, provincial, country,
city, municipal or otherwise, including without limitation, and
instrumentality, division, agency, body or department thereof), or other
entity.
1.87 PLAN: means any plan, agreement, arrangement or commitment which
is an employee benefit plan, as defined in Section 3(3) of ERISA, maintained by
Borrower or any Subsidiary or any ERISA Affiliate or with respect to which
Borrower or any Subsidiary or any ERISA Affiliate at any relevant time has any
liability or obligation to contribute, but excluding any such plan,
arrangement, association or fund that is maintained outside of the United
States primarily for the benefit of persons substantially all of whom are
nonresident aliens.
1.88 POTENTIAL DEFAULT: any event, other than an event described in
Section 13.1(a) hereof, which with the giving of notice or lapse of time, or
both, would become an Event of Default.
1.89 PROHIBITED TRANSACTION: means any transaction prohibited under
Section 406 of ERISA or Section 4975 of the Code.
1.90 REPORTABLE EVENT: means any of the events set forth in Section
4043(b) of ERISA or in the regulations thereunder.
1.91 REQUIRED LENDERS: shall mean (a) with respect to matters relating
only to the 7 Year Revolving Loan, Syndication Parties whose Individual 7 Year
Commitments constitute fifty-one percent (51%) of the Aggregate 7 Year
Commitment, (b) with respect to matters relating only to the 10 Year Revolving
Loan, Syndication Parties whose Individual 10 Year Commitments constitute
fifty-one percent (51%) of the Aggregate 10 Year Commitment, and (c) with
respect to all other matters, Syndication Parties whose Individual Commitments
constitute fifty-one percent (51%) of the sum of (i) the Aggregate 10 Year
Commitment and (ii) the Aggregate 7 Year Commitment. Pursuant to Section 14.26
hereof, Voting Participants shall, under the circumstances set forth therein,
be entitled to voting rights and to be included in determining whether certain
action is being taken by the Required Lenders.
1.92 SECURITY DOCUMENTS: the security agreements, mortgages, deeds of
trust, leasehold mortgages or deeds of trust, financing statements, pledge
agreements, leasehold assignment and consents, and/or other documents executed
by Borrower in favor of the Administrative Agent, on behalf of the Syndication
Parties, to secure Borrower's performance of its obligations under the Notes
and other Loan Documents with a lien on the Collateral, all in form and
substance acceptable to the Administrative Agent.
1.93 7 YEAR MATURITY DATE: November 1, 2006.
1.94 7 YEAR REVOLVING LOAN: shall mean the loan facility made available
to Borrower under Article 2 of this Credit Agreement and shall include the
Converted 7 Year Loans.
1.95 SIGNIFICANT SOFTWARE: shall mean all software programs, equipment
containing embedded micro chips, tradeware, telecommunications, physical plant
and automated processes, regularly used by Borrower and/or each Subsidiary in
their business operations or financial accounting which, individually, or
together with one or more other such software programs, would, if it failed to
be Year 2000 Compliant, have a Material Adverse Effect.
1.96 SUBSIDIARY: means with respect to any Person: (a) any corporation
in which such Person, directly or indirectly, (i) owns fifty percent (50%) or
more of the outstanding stock thereof, or (ii) has the power under ordinary
circumstances to elect at least a majority of the directors thereof, or (b) any
partnership, association, joint venture, limited liability company, or other
unincorporated organization or entity with respect to which such Person,
directly or indirectly, (i) owns more than fifty percent (50%) of the
outstanding equity interest thereof, or (ii) has the power under ordinary
circumstances to directly or indirectly control the management thereof.
1.97 SUCCESSOR AGENT: such Person as may be appointed as successor to
the rights and duties of the Administrative Agent as provided in Section 14.20
of this Credit Agreement.
1.98 SYNDICATION PARTIES: shall mean those entities listed on SCHEDULE
1 hereto, including FCSA in its role as a lender hereunder, but not in its role
as Co-Arranger hereunder, and such Persons as shall from time to time execute a
Syndication Acquisition Agreement substantially in the form of EXHIBIT 14.25
hereto signifying their election to purchase all or a portion of the
Syndication Interest of any Syndication Party, in accordance with Section 14.25
hereof, and to become a Syndication Party hereunder.
1.99 TANGIBLE NET WORTH: the Net Worth minus the amount of all
Intangible Assets of the Borrower and its Consolidated Subsidiaries, determined
on a consolidated basis in accordance with GAAP.
1.100 10 YEAR FINANCIAL PROJECTIONS: Financial projections of the
operations of Borrower and its Subsidiaries for the Fiscal Year periods which
include the Closing Date and cover the period through the Fiscal Year which
includes the 10 Year Maturity Date.
1.101 10 YEAR MATURITY DATE: November 2, 2009.
1.102 10 YEAR REVOLVING LOAN: shall mean the loan facility made
available to Borrower under Article 3 of this Credit Agreement and shall
include the Converted 10 Year Loans.
1.103 THIRD PARTY PROVIDER: a third party vendor which provides
Significant Software.
1.104 TOTAL LIABILITIES: at any date, the aggregate amount of all
liabilities of the Borrower and its Consolidated Subsidiaries determined on a
consolidated basis in accordance with GAAP.
1.105 YEAR 2000 COMPLIANT: shall mean, with respect to software, (a)
that it shall include calendar year 2000 date conversion and compatibility
capabilities, including date data century recognition, same century and
multiple century formula and date value calculations and user interface date
data values that reflect the century so that it will (i) manage and manipulate
data involving dates, including single century and multiple century dates and
formulas, and will not cause an abnormally ending scenario within the
application or cause an abort or result in the generation of incorrect values
or invalid output involving such dates, (ii) include the indication of the
correct century in all date related user interface functions, and (iii) operate
in the same manner with year dates of 2000 and beyond as it operates with year
dates of 1900 to 1999; and (b) that it shall recognized the year 2000 as a year
containing February 29. Software that is Year 2000 Compliant shall be
considered to be in "YEAR 2000 COMPLIANCE".
1.106 Y2K COMPLIANCE TEST: shall mean those procedures adopted by
Borrower or the Subsidiaries, as applicable, for testing their respective
Significant Software for Year 2000 Compliance.
The following terms are defined in portions of this Credit Agreement
other than Article 1:
ADDITIONAL COSTS Section 15.12
ADMINISTRATIVE AGENT Introductory paragraph
ADVANCE PAYMENT Section 14.1
AFFECTED LOANS Section 9.5
AGGREGATE CONVERSION AMOUNT Subsection 5.1.1
AUTHORIZED OFFICER Subsection 9.1.10
AVAILABLE AMOUNT REPORT DEADLINE Subsection 10.2.11
AVAILABLE AMOUNT REPORT Subsection 10.2.11
BASE RATE LOANS Subsection 4.1.1
BORROWER Introductory paragraph
BORROWER PENSION PLAN Subsection 8.10.2
BORROWING NOTICE Section 9.2
CERCLA Section 1.47
CHANGE IN LAW Subsection 4.2.2
COBANK Introductory paragraph
COBRA Subsection 8.10.12
COLLATERAL Section 7.1
COMMITMENT FEE Subsection 4.5.1
COMMITMENT FEE FACTOR Subsection 4.6.1
COMMITMENT LETTER Subsection 9.1.9
CONTRIBUTING SYNDICATION PARTIES Section 14.3
CONVERSION DATE Subsection 5.1.1
CONVERSION ELECTION Subsection 5.1.1
CONVERTED 7 YEAR LOAN Subsection 5.1.1
CONVERTED 10 YEAR LOAN Subsection 5.1.1
CREDIT AGREEMENT Introductory paragraph
DELINQUENCY INTEREST Section 14.3
DELINQUENT AMOUNT Section 14.3
DELINQUENT SYNDICATION PARTY Section 14.3
ENVIRONMENTAL REGULATIONS Section 1.61
EVENT OF DEFAULT Section 15.1
EVENT OF SYNDICATION DEFAULT Subsection 14.28.1
FARM CREDIT LAW Section 13.4
FCSA Introductory paragraph
FEE LETTER Subsection 9.1.9
FUNDING LOSSES Section 5.8
FUNDING LOSS NOTICE Section 5.8
FUNDING NOTICE Section 9.2
GUARANTOR Section 7.2
GUARANTY Section 7.2
INDEMNIFIED AGENCY PARTIES Section 14.17
INDEMNIFIED PARTIES Section 12.1
INTERCREDITOR AGREEMENT Section 1.85
IRS Subsection 8.10.2
LIBO RATE LOAN Subsection 4.1.2
LIBO RATE PERIOD Subsection 4.1.2
LIBO REQUEST Subsection 4.1.2
LICENSING LAWS Section 8.4
MANDATORY PREPAYMENTS Section 5.4
MARGIN REPORT Subsection 4.6.2
MARGIN REPORT DEADLINE Subsection 4.6.2
MARGINS Subsection 4.6.1
PAYMENT ACCOUNT Section 14.8
PAYMENT DISTRIBUTION Section 14.8
PERMITTED ENCUMBRANCES Section 11.3
PLEDGED FACILITIES Section 7.1
POST CLOSING LETTER Section 15.8
PRINCIPAL PAYMENT SCHEDULE Subsection 5.1.3
RCRA Section 1.47
REGULATORY CHANGE Subsection 15.12
REQUIRED LICENSES Section 8.9
SCHEDULED PAYMENTS Section 5.1
SENIOR NOTES Section 11.14
7 YEAR ADVANCE Section 2.1
7 YEAR BASE RATE MARGIN Section 4.6
7 YEAR LIBOR MARGIN Section 4.6
7 YEAR REVOLVING NOTE(S) Section 2.3
SUCCESSOR AGENT Section 14.20
SYNDICATION ACQUISITION AGREEMENT Section 14.25
SYNDICATION INTEREST Section 14.1
SYNDICATION PARTY ADVANCE DATE Section 14.2
10 7/8% NOTES Section 11.14
10 YEAR ADVANCE Section 3.1
10 YEAR BASE RATE MARGIN Section 4.6
10 YEAR LIBOR MARGIN Section 4.6
10 YEAR REVOLVING NOTE(S) Section 3.3
TITLE INSURER Subsection 9.1.6
TITLE POLICY Subsection 9.1.6
TRANSFER Section 14.25
VOLUNTARY PREPAYMENTS Section 5.3
VOTING PARTICIPANTS Section 14.26
WIRE INSTRUCTIONS Section 14.27
YEAR 2000 COMPLIANCE Section 1.109
Article 2. 7 Year Revolving LOAN
2.1 7 Year Revolving Loan. On the terms and conditions set forth in
this Credit Agreement, and so long as no Event of Default or Potential Default
has occurred and is continuing, Borrower, may during the Availability Period,
request an Advance under the 7 Year Revolving Loan ("7 YEAR ADVANCE"), and each
of the Syndication Parties severally agrees, to fund its Individual 7 Year Pro
Rata Share of each 7 Year Advance from time to time during the Availability
Period, subject to the following:
2.1.1 INDIVIDUAL SYNDICATION PARTY 7 YEAR COMMITMENT. No
Syndication Party shall be required or permitted to fund 7 Year Advances in an
amount which would exceed its Individual 7 Year Lending Capacity as in effect
at the time of the Administrative Agent's receipt of the Borrowing Notice
requesting such Advance.
2.1.2 INDIVIDUAL SYNDICATION PARTY 7 YEAR PRO RATA SHARE. No
Syndication Party shall be required or permitted to fund 7 Year Advances in
excess of an amount equal to its Individual 7 Year Pro Rata Share multiplied by
the amount of the requested 7 Year Advance.
2.2 AGGREGATE 7 YEAR COMMITMENT; AVAILABLE AMOUNT. Borrower shall not
be entitled to request a 7 Year Advance in an amount which, (a) when added to
the aggregate Individual Outstanding 7 Year Obligations of all Syndication
Parties, would exceed the Aggregate 7 Year Commitment; or (b) when added to the
aggregate Individual Outstanding 7 Year Obligations of all Syndication Parties
and the aggregate Individual Outstanding 10 Year Obligations of all Syndication
Parties, would exceed the Available Amount.
2.3 7 YEAR REVOLVING PROMISSORY NOTES. Borrower's obligations to each
Syndication Party under the 7 Year Revolving Loan, including Borrower's payment
obligations with respect to all 7 Year Advances made by such Syndication Party
shall be (a) evidenced by, and bear interest in accordance with, a single
promissory note of Borrower in substantially the form of EXHIBIT 2.3 hereto
duly completed, in the stated maximum principal amount equal to such
Syndication Party's Individual 7 Year Commitment, dated the date such
Syndication Party becomes a Syndication Party, payable to such Syndication
Party for the account of its Applicable Lending Office, and maturing as to
principal on the 7 Year Maturity Date (each a "7 YEAR REVOLVING NOTE" and
collectively, the "7 YEAR REVOLVING NOTES"); and (b) repaid in accordance with
Article 5 hereof and such 7 Year Revolving Note.
2.4 SYNDICATION PARTY RECORDS. Each Syndication Party shall record on
its books and records the amount of each Advance, the rate and interest period
applicable thereto, all payments of principal and interest, and the principal
balance from time to time outstanding. Each Syndication Party's record thereof
shall be prima facie evidence as to all such amounts and shall be binding on
Borrower absent manifest error. Notwithstanding the foregoing, Borrower will
never be required to pay to any Syndication Party as principal more than the
principal amount of the Loans made by such Syndication Party.
2.5 USE OF PROCEEDS. The proceeds of the 7 Year Revolving Loans will
be used by Borrower to fund expansion of Borrower's production and processing
facilities, for future acquisitions, to repay existing indebtedness, and for
general corporate purposes, and Borrower agrees not to request or use such
proceeds for any other purpose. Borrower will not, directly or indirectly, use
any part of such proceeds for the purpose of purchasing or carrying any margin
stock within the meaning of Regulation U of the Board of Governors or to extend
credit to any Person for the purpose of purchasing or carrying any such margin
stock.
2.6 ADVANCES; FUNDING. Borrower may request, and the Syndication
Parties shall fund, Advances under the 7 Year Revolving Loan in the manner and
within the time deadlines as provided in Section 9.2 hereof.
2.7 SYNDICATION PARTY FUNDING FAILURE. The failure of any Syndication
Party to remit its funding share of any requested 7 Year Advance on the date
specified for such Advance shall not relieve any other Syndication Party of its
obligation (if any) to make any Advance on such date, but no Syndication Party
shall be responsible for the failure of any other Syndication Party to make any
Advance to be made by such other Syndication Party.
2.8 REDUCTION OF AGGREGATE 7 YEAR COMMITMENT. Borrower may, by written
notice to the Administrative Agent on or before 10:00 A.M. (Central time) on
any Banking Day, irrevocably reduce the Aggregate Commitment; provided that (a)
such reduction must be in minimum amounts of one million dollars
($1,000,000.00) and incremental multiples of $500,000.00; (b) such reduction
shall be allocated between the 7 Year Aggregate Commitment and the 10 Year
Aggregate Commitment on a pro rata basis so that (i) the portion of such
reduction allocated to the 7 Year Aggregate Commitment shall be determined by
multiplying the amount of the Aggregate Commitment reduction by a fraction the
numerator of which is the Aggregate 7 Year Commitment then in effect and the
denominator of which is the Aggregate Commitment then in effect, and (ii) the
portion of such reduction allocated to the 10 Year Aggregate Commitment shall
be determined by multiplying such reduction amount by a fraction the numerator
of which is the Aggregate 10 Year Commitment then in effect and the denominator
of which is the Aggregate Commitment then in effect; and (c) Borrower must
simultaneously make any principal payment necessary (along with any applicable
Funding Losses on account of such principal payment) so that (i) the principal
amount outstanding under the 7 Year Revolving Loan does not exceed the reduced
Aggregate 7 Year Commitment on the date of such reduction, (ii) the Individual
Outstanding 7 Year Obligations owing to any Syndication Party do not exceed the
Individual 7 Year Commitment of that Syndication Party (after reduction thereof
in accordance with the following sentence), (iii) the principal amount
outstanding under the 10 Year Revolving Loan does not exceed the reduced
Aggregate 10 Year Commitment on the date of such reduction, and (iv) the
Individual Outstanding 10 Year Obligations owing to any Syndication Party do
not exceed the Individual 10 Year Commitment of that Syndication Party (after
reduction thereof in accordance with the following sentence). Upon (y) the
reduction of the Aggregate 7 Year Commitment as provided in the preceding
sentence, then the Individual 7 Year Commitment of each Syndication Party shall
be reduced in the same proportion as the Individual 7 Year Commitment of such
Syndication Party bears to the Aggregate 7 Year Commitment before such
reduction, and (z) the reduction of the Aggregate 10 Year Commitment as
provided in the preceding sentence, then the Individual 10 Year Commitment of
each Syndication Party shall be reduced in the same proportion as the
Individual 10 Year Commitment of such Syndication Party bears to the Aggregate
10 Year Commitment before such reduction.
Article 3. 10 Year Loan
3.1 10 Year Loan. On the terms and conditions set forth in this Credit
Agreement, and so long as no Event of Default or Potential Default has occurred
and is continuing, Borrower may, during the Availability Period, request an
Advance under the 10 Year Revolving Loan ("10 YEAR ADVANCE"), and each of the
Syndication Parties severally agrees, to fund its Individual 10 Year Pro Rata
Share of each 10 Year Advance from time to time during the Availability Period,
subject to the following:
3.1.1 INDIVIDUAL SYNDICATION PARTY 10 YEAR COMMITMENT. No
Syndication Party shall be required or permitted to fund 10 Year Advances in an
amount which would exceed its Individual 10 Year Lending Capacity as in effect
at the time of the Administrative Agent's receipt of the Borrowing Notice
requesting such Advance.
3.1.2 INDIVIDUAL SYNDICATION PARTY 10 YEAR PRO RATA SHARE. No
Syndication Party shall be required or permitted to fund 10 Year Advances in
excess of an amount equal to its Individual 10 Year Pro Rata Share multiplied
by the amount of the requested 10 Year Advance.
3.2 AGGREGATE 10 YEAR COMMITMENT; AVAILABLE AMOUNT. Borrower shall not
be entitled to request a 10 Year Advance in an amount which, (a) when added to
the aggregate Individual Outstanding 10 Year Obligations of all Syndication
Parties, would exceed the Aggregate 10 Year Commitment; or (b) when added to
the aggregate Individual Outstanding 7 Year Obligations of all Syndication
Parties and the aggregate Individual Outstanding 10 Year Obligations of all
Syndication Parties, would exceed the Available Amount.
3.3 10 YEAR LOAN PROMISSORY NOTES. Borrower's obligations to each
Syndication Party under the 10 Year Revolving Loan, including Borrower's
payment obligations with respect to all 10 Year Advances made by each
Syndication Party shall (a) be evidenced by, and bear interest in accordance
with, a single promissory note of Borrower in substantially the form of EXHIBIT
3.3 hereto duly completed, in the stated maximum principal amount equal to such
Syndication Party's Individual 10 Year Commitment, dated the date such
Syndication Party becomes a Syndication Party, payable to such Syndication
Party for the account of its Applicable Lending Office, and maturing as to
principal on the 10 Year Maturity Date (each a "10 YEAR REVOLVING NOTE" and
collectively, the "10 YEAR REVOLVING NOTES") ; and (b) repaid in accordance
with Article 5 hereof and such 10 Year Revolving Note.
3.4 SYNDICATION PARTY RECORDS. Each Syndication Party shall record on
its books and records the amount of each Advance, the rate and interest period
applicable thereto, all payments of principal and interest, and the principal
balance from time to time outstanding. The Syndication Party's record thereof
shall be prima facie evidence as to all such amounts and shall be binding on
Borrower absent manifest error. Notwithstanding the foregoing, Borrower will
never be required to pay as principal more than the principal amount of the
Loans made by the Syndication Parties.
3.5 USE OF PROCEEDS. The proceeds of the 10 Year Revolving Loans will
be used by Borrower to fund expansion of Borrower's production and processing
facilities, for future acquisitions, to repay existing indebtedness, and for
general corporate purposes, and Borrower agrees not to request or use such
proceeds for any other purpose. Borrower will not, directly or indirectly, use
any part of such proceeds for the purpose of purchasing or carrying any margin
stock within the meaning of Regulation U of the Board of Governors or to extend
credit to any Person for the purpose of purchasing or carrying any such margin
stock.
3.6 ADVANCES; FUNDING. Borrower may request, and the Syndication
Parties shall fund, Advances under the 10 Year Revolving Loan in the manner and
within the time deadlines as provided in Section 9.2 hereof.
3.7 SYNDICATION PARTY FUNDING FAILURE. The failure of any Syndication
Party to remit its Funding Share of any requested 10 Year Advance on the date
specified for such Advance shall not relieve any other Syndication Party of its
obligation (if any) to make any Advance on such date, but no Syndication Party
shall be responsible for the failure of any other Syndication Party to make any
Advance to be made by such other Syndication Party.
3.8 REDUCTION OF AGGREGATE 10 YEAR COMMITMENT. Borrower may, by
written facsimile notice to the Administrative Agent on or before 10:00 A.M.
(Central time) on any Banking Day, irrevocably reduce the Aggregate 10 Year
Commitment; in the same manner and subject to the same conditions as set forth
in Section 2.8 hereof with respect to reduction of the Aggregate 7 Year
Commitment.
Article 4. INTEREST AND FEES
4.1 Interest. Interest on all Loans shall be calculated as follows:
4.1.1 BASE RATE OPTION. Unless Borrower requests and receives a
LIBO Rate Loan pursuant to Subsection 4.1.2 hereof, the outstanding principal
balance under the 7 Year Revolving Notes and the 10 Year Revolving Notes shall
bear interest at the Base Rate (each a "BASE RATE LOAN").
4.1.2 LIBO RATE OPTION. From time to time, and so long as no Event
of Default has occurred and is continuing, at the request of Borrower included
in a Borrowing Notice, all or any part of the outstanding principal balance
under the 7 Year Revolving Notes or the 10 Year Revolving Notes may bear
interest at the LIBO Rate (each a "LIBO RATE LOAN"); provided that Borrower may
have no more than ten (10) LIBO Rate Loans outstanding at any time. To effect
this option, the Borrowing Notice must specify (a) the principal amount that is
to bear interest at the LIBO Rate, which must be a minimum of $1,000,000.00 and
in incremental multiples of $500,000.00 and (b) the period selected by Borrower
during which the LIBO Rate is to be applied ("LIBO RATE PERIOD"), which may be
any period of one, two, three, or six months, provided that LIBO Rate Periods
which begin prior to the 7 Year Maturity Date must mature on or prior to the 7
Year Maturity Date and LIBO Rate Periods which begin on or after the 7 Year
Maturity Date must mature no later than the 10 Year Maturity Date. In
addition, for the purposes of determining a LIBOR Rate Period, a month means a
period starting on one day in a calendar month and ending on a numerically
corresponding day in the next calendar month; provided that if there is no
numerically corresponding day in the month in which a LIBO Rate Period is to
end, or if a LIBO Rate Period begins on the last day of a calendar month, then
such LIBO Rate Period shall end on the last Banking Day of the calendar month
in which such LIBO Rate Period is to end. Borrower may convert any Base Rate
Loan to a LIBO Rate Loan, or continue a LIBO Rate Loan, by making a written
request therefore ("LIBO REQUEST") to the Administrative Agent by facsimile,
specifying (y) the principal amount that is to bear interest at the LIBO Rate,
which must be a minimum of $1,000,000.00 and in incremental multiples of
$500,000.00 and (z) the LIBO Rate Period selected by Borrower during which the
LIBO Rate is to be applied. The Administrative Agent shall incur no liability
in acting upon a request which it believed in good faith had been made by a
properly authorized officer of Borrower. Following the expiration of the LIBO
Rate Period for any LIBO Rate Loan, interest shall automatically accrue at the
Base Rate unless Borrower requests and receives another LIBO Rate Loan as
provided in this Subsection.
4.2 ADDITIONAL PROVISIONS FOR LIBO RATE LOANS.
4.2.1 INAPPLICABILITY OR UNAVAILABILITY OF LIBO RATE. If the
Administrative Agent at any time shall reasonably determine that for any reason
adequate and reasonable means do not exist for ascertaining the LIBO Rate, then
the Administrative Agent shall promptly give notice thereof to Borrower. If
such notice is given and until such notice has been withdrawn by the
Administrative Agent, then any portion of the outstanding principal balance
hereof which bears interest determined in relation to the LIBO Rate shall,
subsequent to the end of the LIBO Rate Period applicable thereto, bear interest
at the Base Rate.
4.2.2 CHANGE IN LAW; LIBO RATE LOAN UNLAWFUL. If any law, treaty,
rule, regulation or determination of a court or governmental authority or any
change therein or in the interpretation or application thereof (each, a "CHANGE
IN LAW") shall make it unlawful for any of the Syndication Parties to (a)
advance its Funding Share of any LIBO Rate Loan or (b) maintain its share of
all or any portion of the LIBO Rate Loans, each such Syndication Party shall
promptly, by telephone or facsimile, notify the Administrative Agent thereof,
and of the reasons therefor and the Administrative Agent shall promptly notify
Borrower thereof and if the notice from such Syndication Party is in writing,
the Administrative Agent shall provide a copy of such notice to Borrower. In
the former event, any obligation of any such Syndication Party to make
available its Funding Share of any future LIBO Rate Loan shall immediately be
canceled (and, in lieu thereof shall be made as a Base Rate Loan), and in the
latter event, any such unlawful LIBO Rate Loans or portions thereof then
outstanding shall be converted, at the option of such Syndication Party, to a
Base Rate Loan; provided, however, that if any such Change in Law shall permit
the LIBO Rate to remain in effect until the expiration of the LIBO Rate Period
applicable to any such unlawful LIBO Rate Loan, then such LIBO Rate Loan shall
continue in effect until the expiration of such LIBO Rate Period. Upon the
occurrence of any of the foregoing events on account of any change in any law,
treaty, rule, regulation or determination of a court or governmental authority
or in the interpretation or application thereof, Borrower shall pay to the
Administrative Agent immediately upon demand such amounts as may be necessary
to compensate any such Syndication Party for any fees, charges, or other costs
incurred or payable by such Syndication Party as a result thereof and which are
attributable to any LIBO Rate Loan made available to Borrower hereunder, and
any reasonable allocation made by any such Syndication Party among its
operations shall be conclusive and binding upon Borrower absent manifest error.
In the event any Syndication Party provides the Administrative Agent a notice
under this Subsection, then Borrower shall have the right, but not the
obligation, upon written notice to the Administrative Agent, accompanied by the
payment of such amounts as are described above and any applicable Funding
Losses on account of the prepayment required below, on or before 10:00 A.M.
(Central time) on or before ten (10) Banking Days following receipt of such
notice, to reduce the Individual 7 Year Commitment and Individual 10 Year
Commitment of such Syndication Party to zero upon making a prepayment, to be
treated as a Voluntary Payment to the extent not inconsistent with the
provisions of this Subsection, equal to the amount of such Syndication Party's
Individual Outstanding 7 Year Obligations and Individual Outstanding 10 Year
Obligations. In the event Borrower makes such an election, then a reduction in
a dollar amount corresponding to such reduction in Individual 7 Year Commitment
and/or Individual 10 Year Commitment shall be made to the Aggregate 7 Year
Commitment and/or Aggregate 10 Year Commitment, as applicable, and,
notwithstanding any provisions of this Credit Agreement to the contrary,
including, without limitation, Sections 2.8 and 3.8: (y) the amount of such
prepayment shall be applied to outstanding LIBO Rate Loans to the extent of
such Syndication Party's Pro Rata Share thereof and, along with the amount paid
on account of such fees, charges, Funding Losses, or other costs, distributed
to the Syndication Party providing such notice and as to which Borrower has
made such election, and (z) any reduction in the Aggregate 7 Year Commitment on
account of the provisions of the immediately preceding sentence shall not
require or result in a reduction in the Aggregate 10 year Commitment, and any
reduction in the Aggregate 10 Year Commitment on account of the provisions of
the immediately preceding sentence shall not require or result in a reduction
in the Aggregate 7 Year Commitment.
4.3 DEFAULT INTEREST RATE. All past due payments on the Notes or of
any other Bank Debt (whether as a result of nonpayment by Borrower when due, at
maturity, or upon acceleration) shall bear interest at the Default Interest
Rate from and after the due date for the payment, or on the date of maturity or
acceleration, as the case may be.
4.4 INTEREST CALCULATION. Interest on LIBO Rate Loans and Base Rate
Loans shall be calculated on the actual number of days the principal owing
thereunder is outstanding with the daily rate calculated on the basis of a year
consisting of 360 days. In calculating interest, the Advance Date shall be
included and the date each payment is received shall be excluded.
4.5 FEES. Borrower shall pay or cause to be paid the following fees:
4.5.1 COMMITMENT FEE. A FEE FOR EACH DAY DURING THE AVAILABILITY
PERIOD ("COMMITMENT FEE") for each Facility (a) payable in arrears by the
fifteenth day of the month following the close of each Fiscal Quarter, and (b)
determined for each day during such Fiscal Quarter by (i) multiplying the
Commitment Fee Factor in effect on such day (expressed as a daily rate on the
basis of a year of 360 days) times (ii) the difference between the Aggregate 7
Year Commitment or the Aggregate 10 Year Commitment, as applicable, and the
outstanding principal balance owing under such Facility as of the close of the
Administrative Agent's business on such day. The Commitment Fee shall be
payable by Borrower to the Administrative Agent, and the Administrative Agent
shall distribute the portion of the Commitment Fee attributable to the 7 Year
Revolving Loan to the Syndication Parties based on their Individual 7 Year Pro
Rata Share and shall distribute the portion of the Commitment Fee attributable
to the 10 Year Revolving Loan to the Syndication Parties based on their
Individual 10 Year Pro Rata Share.
4.6 Interest Rate Margins; Commitment Fee Factor. The Margins and the
Commitment Fee Factor shall be determined as follows:
4.6.1 CALCULATION. "7 YEAR BASE RATE MARGIN", the "7 YEAR LIBOR
MARGIN", the "10 YEAR BASE RATE MARGIN", the "10 YEAR LIBOR MARGIN"
(collectively the "MARGINS"), and the "COMMITMENT FEE FACTOR" shall be
determined pursuant to the table below (expressed in basis points) based on the
Leverage Ratio, as of the end of each Fiscal Quarter, with such Margins
effective as of the fifth Banking Day after receipt of a Margin Report, except
that (a) the 7 Year LIBOR Margin and the 10 Year LIBOR Margin, once set for a
LIBO Rate Loan, will not change during the LIBOR Rate Period therefore; (b) the
Margins and Commitment Fee Factor effective as of the Closing Date shall be
based on a Leverage Ratio of 39.0% until changed based on a Margin Report as
provided in Subsection 4.6.2 hereof; (c) in the event that the final annual
audited financial statements establish the Borrower was not entitled to a
reduction in the Margin and the Commitment Fee Factor previously granted based
upon a Margin Report, Borrower shall, upon written demand by the Administrative
Agent, pay any excess amount which should have been charged based on such
annual audited financial statements, and (d) if the Margin Report is not
received by Administrative Agent by the Margin Report Deadline, the Margin and
the Commitment Fee Factor for the period commencing on the first Banking Day
after the Margin Report Deadline will each be based on a Leverage Ratio of
60.0% continuing until the fifth Banking Day after such time as Borrower
delivers the Margin Report to the Administrative Agent, after which time the
Margin and the Commitment Fee Factor will be based on the Margin Report:
7 Year 7 Year Commitment
LEVERAGE RATIO LIBOR RATE MARGIN BASE RATE MARGIN FEE FACTOR
* 35% xxxx basis points XXXX BASIS POINTS xxxx basis points
( 35% * 40% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(40% * 45% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(45% * 50% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(50% * 55% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(55% * 60% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(60% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
10 Year 10 Year Commitment
LEVERAGE RATIO LIBOR RATE MARGIN BASE RATE MARGIN FEE FACTOR
35% xxxx basis points XXXX BASIS POINTS xxxx basis points
(35% * 40% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(40% * 45% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(45% * 50% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(50% * 55% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(55% * 60% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
(60% XXXX BASIS POINTS XXXX BASIS POINTS XXXX BASIS POINTS
4.6.2 MARGIN REPORT. On or before the 45th day after the beginning
of the second, third and fourth Fiscal Quarter of each Fiscal Year and on or
before the 90{th} day after the beginning of the first Fiscal Quarter of each
Fiscal Year ("MARGIN REPORT DEADLINE"), commencing with the Fiscal Quarter
which begins in October of 1999, Borrower shall provide to the Administrative
Agent a statement, certified to by Borrower's chief financial officer, showing
the Leverage Ratio (including all components thereof) as of the last day of the
preceding Fiscal Quarter in the form of EXHIBIT 4.6.2 hereto ("MARGIN REPORT").
4.7 MAXIMUM INTEREST RATE. Borrower acknowledges and agrees that 12
U.S.C. (section) 2205 provides that institutions of the Farm Credit System are
not subject to any interest rate limitation imposed by any state constitution
or statute or other laws, and that any such limitations are preempted, and that
therefore interest owing under the Notes, to the extent funded by an
institution of the Farm Credit System, is not subject to any ceiling.
Nonetheless, in the event it is ever determined by a court of competent
jurisdiction that interest owing on the Notes, or some of them, is subject to
any limitations imposed by the laws of the State of Colorado or Texas or any
other jurisdiction, it is the intent of Borrower, and the Syndication Parties
to, notwithstanding the provisions of Section 4.1 hereof, at all times comply
with the applicable usury laws relating to this Credit Agreement or the Notes
now or hereafter in effect including, without limitation, Title 4 of the Texas
Finance Code and any subsequent revisions or judicial interpretations thereof
if, and to the extent, determined by a court to be applicable to the Notes. It
is agreed that the aggregate of all interest and other charges constituting
interest, or adjudicated as constituting interest, and contracted for,
chargeable, or receivable in connection with the Notes shall under no
circumstances exceed the maximum nonusurious amount of interest permitted by
applicable law. If the applicable laws are ever revised or judicially
interpreted so as to render usurious any amount called for under this Credit
Agreement or the Notes or contracted for, charged, chargeable, received or
receivable with respect to this Credit Agreement or the Notes, or if the
exercise of the option to accelerate the maturity of the Notes, or if any
payment, results in Borrower having paid any interest on one or more of the
Notes in excess of that permitted by applicable law, any such construction
shall be subject to the provisions of this Section and, to the extent permitted
by applicable law all excess amounts collected on such Notes shall be credited
on the principal balance of such Notes (or, if it has been paid in full,
refunded to Borrower), and those provisions shall immediately be deemed
reformed and the amounts thereafter collectible will be reduced, without the
necessity of the execution of any new documents, so as to comply with the then
applicable law, but so as to permit the recovery of the fullest amount of
interest otherwise lawfully called for under this Credit Agreement or the
Notes. In the event the maturity of any Note is accelerated, then earned
interest may never include more than the maximum amount of interest permitted
by applicable law from the date of each advance of the proceeds of such Note
until paid. Specifically, but without in any way limiting the generality of
the foregoing, if from any circumstances whatsoever fulfillment of any
provision of this Credit Agreement or the Notes, at the time performance of
such provision is due, would cause the interest contracted for, charged,
chargeable, received or receivable with respect to this Credit Agreement or any
of the Notes to exceed the amount permitted by applicable law, then ipso facto
and notwithstanding anything to the contrary contained herein, Borrower shall
only be required to pay interest on each such Note in an amount equal to the
lesser of the amounts payable under this Credit Agreement and the maximum
amount permitted by applicable law. In determining whether the amount of
interest contracted for, charged, chargeable, received or receivable with
respect to this Credit Agreement or any of the Notes would ever exceed the
amount permitted by applicable law, all sums charged, paid or agreed to be paid
under this Credit Agreement for the use, forbearance, or detention of the
indebtedness of Borrower to the Administrative Agent and/or the Syndication
Parties shall, to the extent possible under applicable law, be amortized,
prorated, allocated, and spread throughout the full term of the Notes
(including any renewal or extension), until payment in full. The provisions of
this Section control all agreements between the Administrative Agent and/or the
Syndication Parties and Borrower relative to the Notes. In the event any
interest is required to be credited to principal or refunded to Borrower with
respect to some, but not all, of the Notes, such adjustment shall be for the
account of the Syndication Party which is the payee under such Note or Notes,
and shall not affect the other Notes or the Syndication Parties which are the
payees under such other Notes.
Article 5.PAYMENTS; FUNDING LOSSES
5.1 Principal Payments. Principal shall be payable under the 7 Year
Converted Loans and the 10 Year Converted Loans (including, in each case,
Converted Loans effected by an automatic conversion) in quarterly payments in
the amounts and on the dates set forth in the Principal Payment Schedule
("SCHEDULED PAYMENTS"), with all unpaid principal due on the 7 Year Maturity
Date or the 10 Year Maturity Date, as applicable.
5.1.1 CONVERTED LOANS. Borrower may, upon not more than seven and
not less than three Banking Day's advance notice to the Administrative Agent,
during the Availability Period elect ("CONVERSION ELECTION"), effective as of
the last Banking Day of each June and December (each a "CONVERSION DATE"), to
convert a specific dollar amount ("AGGREGATE CONVERSION AMOUNT") (a) of the 7
Year Revolving Loan into one or more term loans (each a "CONVERTED 7 YEAR
LOAN") having a final maturity on the 7 Year Maturity Date and with
amortization in equal quarterly payments of principal based on the period from
the Conversion Date to the sixth anniversary following the end of the
Availability Period (which will require a balloon payment on the 7 Year
Maturity Date) and (b) of the 10 Year Revolving Loan into one or more term
loans (each a "CONVERTED 10 YEAR LOAN") having a final maturity on the 10 Year
Maturity Date and with amortization in equal quarterly payments of principal
based on the period from the Conversion Date to the eleventh anniversary
following the end of the Availability Period (which will require a balloon
payment on the 10 Year Maturity Date); PROVIDED that (x) such conversion must
be in minimum amounts of $1,000,000.00 and incremental multiples of
$500,000.00, (y) the Aggregate Conversion Amount must be allocated between the
7 Year Revolving Loan and the 10 Year Revolving Loan on the basis of the ratio
of the Aggregate 7 Year Commitment or the Aggregate 10 Year Commitment, as
applicable, to the Aggregate Commitment in effect, in each case, on the
Conversion Date. Amounts converted to a Converted 7 Year Loan will permanently
reduce the Aggregate 7 Year Commitment dollar-for-dollar, and the aggregate
outstanding principal balance of the 7 Year Revolving Loan and Converted 7 Year
Loans may not at any time exceed the Aggregate 7 Year Commitment then in
effect, and amounts converted to a Converted 10 Year Loan will permanently
reduce the Aggregate 10 Year Commitment dollar-for-dollar, and the aggregate
outstanding principal balance of the 10 Year Revolving Loan and Converted 10
Year Loans may not at any time exceed the Aggregate 10 Year Commitment then in
effect.
5.1.2 AUTOMATIC CONVERSION. Outstanding balances of principal
under the 7 Year Revolving Loan (and not previously converted) will be
automatically converted into a Converted 7 Year Loan as of the last day of the
Availability Period, and outstanding balances of principal under the 10 Year
Revolving Loan (and not previously converted) will be automatically converted
into a Converted 10 Year Loan as of the last day of the Availability Period.
5.1.3 PRINCIPAL PAYMENT SCHEDULE. The Administrative Agent will
maintain, in the form of EXHIBIT 5.1.3 hereto, a schedule of principal payments
("PRINCIPAL PAYMENT SCHEDULE") showing (a) on a consolidated basis the schedule
of principal payments due under all Converted 7 Year Loans, and (b) on a
consolidated basis the schedule of principal payments due under all Converted
10 Year Loans. The Administrative Agent will update the Principal Payment
Schedule as of each Conversion Date with respect to which Borrower has made a
Conversion Election, and the Principal Payment Schedule as so updated will
automatically replace and supersede EXHIBIT 5.1.3 hereto.
5.2 INTEREST PAYMENTS. Interest shall be payable as follows: (a)
interest on Base Rate Loans shall be payable monthly in arrears on the
fifteenth day of the following month, (b) interest on LIBO Rate Loans shall be
payable in arrears on the last day of the LIBO Rate Period therefor unless the
LIBO Rate Period is longer than three (3) months, in which case interest shall
also be payable every three (3) months from the date of the relevant Advance
and (c) interest on all Loans then accrued and unpaid shall be payable on the 7
Year Maturity Date or 10 Year Maturity Date, as applicable.
5.3 VOLUNTARY PREPAYMENTS. Borrower shall have the right to prepay
("VOLUNTARY PREPAYMENTS") all or any part of the outstanding principal balance
under the Loans at any time in minimum amounts of $1,000,000.00 and in integral
multiples of $500,000.00 (or the entire outstanding balance, if less) on any
Banking Day; provided that (a) in the event of prepayment of any LIBO Rate Loan
(i) Borrower must provide three (3) Banking Days notice to the Administrative
Agent prior to making such prepayment, and (ii) Borrower must, at the time of
making such prepayment, pay all Funding Losses applicable to such prepayment.
Principal amounts paid or voluntarily prepaid (except as applied to a Converted
Loan) may be reborrowed under the terms and conditions of this Credit
Agreement.
5.4 MANDATORY PREPAYMENTS. Borrower shall be required to make
prepayments ("MANDATORY PREPAYMENTS") in each of the following events (a) in
the event any of the Collateral is the subject of a Casualty Event, a Mandatory
Prepayment equal to the amount of the Casualty Proceeds received by Borrower on
account thereof (subject to Borrower's right to use Casualty Proceeds for
repair or replacement for any casualty event if the amount of Casualty Proceeds
does not exceed $25,000,000.00 and so long as (i) a contract for such repair or
replacement is entered into within 180 days of such Casualty Event for such
repairs and/or the acquisition of such replacements, (ii) such repair or
replacement is effected within 360 days of such Casualty Event, and (iii) any
such replacements are covered by the lien in favor of the Administrative Agent
on the Collateral); (b) upon the issuance of any equity securities in a capital
raising transaction resulting in net proceeds to Borrower of an amount in
excess of $10,000,000.00, a Mandatory Prepayment equal to fifty percent (50%)
of net proceeds of such offering of equity securities to the extent they are
not used, under the conditions set forth below, for acquisitions and/or capital
investment within 360 days of receipt; (c) upon sale or other disposition of
any non-current assets (except for sales in the ordinary course of business)
(i) which are not a part of the Collateral, a Mandatory Prepayment equal to one
hundred percent (100%) of the net proceeds in excess of $5,000,000 received by
Borrower to the extent that they are not used, under the conditions set forth
below, for acquisitions and/or capital investment within 360 days of receipt by
the Borrower, or (ii) which are a part of the Collateral, a Mandatory
Prepayment equal to one hundred percent (100%) of the net proceeds in excess of
$5,000,000 received by Borrower to the extent that they are not used, under the
conditions set forth below, for acquisitions and/or capital investment within
360 days of receipt by the Borrower and covered by the lien in favor of the
Administrative Agent on the Collateral; and (d) at any time that the aggregate
outstanding principal balance owing (i) under the 7 Year Revolving Loan and the
10 Year Revolving Loan (including the Converted Loans) exceeds the Available
Amount or (ii) under either the 7 Year Revolving Loan or the 10 Year Revolving
Loan (including the 7 Year Converted Loans or the 10 Year Converted Loans, as
applicable) exceeds the Aggregate 7 Year Commitment or the Aggregate 10 Year
Commitment, respectively, as either of them may be reduced from time to time, a
Mandatory Prepayment equal to the amount of such excess. In each case of
proceeds from any offering of equity securities and from any sale or other
disposition of assets, to avoid Mandatory Prepayment based thereon, Borrower
must, within 180 days of receipt of such proceeds, have used such proceeds for
acquisitions and/or capital investments or executed a binding definitive
contract for such acquisitions and/or capital investments. Mandatory
Prepayments made (x) pursuant to clause (d) of this Section and applied to
Converted Loans or (z) pursuant to clauses (a), (b), and (c) of this Section,
will, in either case, result in a permanent reduction of the Aggregate 7 Year
Commitment and the Aggregate 10 Year Commitment to the extent of the Mandatory
Payments applied to each such Facility. Mandatory Prepayments under clauses
(a), (b), or (c) shall be due no later than 10 Banking Days after the
expiration of the applicable acquisition or capital investment period set forth
above, and Mandatory Prepayments under (d) shall be due the next Banking Day
following such occurrence. In determining the amount of Mandatory Prepayment
required under clauses (a) or (c)(ii), Borrower shall be permitted to make any
prepayment required on account of such Casualty Event or sale under any Pari
Passu Loan (in a maximum amount no greater than the pro rata portion based on
total outstanding principal balances of such loan and the Facilities), and in
determining the amount of Mandatory Prepayment required under clauses (b) and
(c)(i), Borrower shall, without duplication regarding payments made on account
of any Pari Passu Loan, be permitted to make any prepayment required on account
of such sale under any secured or unsecured credit facility which is not
expressly subordinate to the Facilities in a maximum amount, with respect only
to such unsecured facilities, of no greater than the pro rata portion based on
the total outstanding principal balances owing under such unsecured facility to
the sum of the total outstanding principal balances owing under all such
unsecured facilities and under the Facilities.
5.5 APPLICATION OF PRINCIPAL PAYMENTS.
5.5.1 SCHEDULED PAYMENTS. ALL SCHEDULED PAYMENTS SHALL BE APPLIED
TO ONE OR MORE 7 YEAR CONVERTED LOANS OR ONE OR MORE 10 YEAR CONVERTED LOANS IN
ACCORDANCE WITH THE PRINCIPAL PAYMENT SCHEDULE.
5.5.2 VOLUNTARY PREPAYMENTS. All Voluntary Prepayments shall be
applied to principal amounts owing under the 7 Year Revolving Loan and the 10
Year Revolving Loan in the ratio of the amount of the outstanding principal
balance owed under each, divided by the principal balance owed under both,
determined in each case on the date of such prepayment, and, unless Borrower
directs otherwise in writing (a) shall be applied first to balances other than
Converted Loans, and then to Converted Loans, and (b) to the extent consistent
with provision (a) hereof, first to Base Rate Loans and then to LIBO Rate
Loans. To the extent Voluntary Prepayments are applied to Converted Loans,
they shall be applied FIRST to the four principal installments next coming due,
and SECOND to remaining installments on a ratable basis. However,
notwithstanding any of the foregoing provisions of this Subsection, upon the
occurrence and during the continuance of an Event of Default, all prepayments
shall be applied, as the Administrative Agent in its sole discretion shall
determine, to fees, interest or principal indebtedness under the Notes, or to
any other Bank Debt.
5.5.3 MANDATORY PREPAYMENTS. All Mandatory Prepayments shall be
applied to principal amounts owing under the 7 Year Revolving Loan and the 10
Year Revolving Loan in the ratio of the amount of the outstanding principal
balance owed under each, divided by the principal balance owed under both,
determined in each case on the date of such prepayment, and (a) Mandatory
Prepayments made on account of clauses (a) or (c) of Section 5.4 hereof shall
be applied first to principal balances of Converted Loans, and Mandatory
Prepayments made on account of clauses (b) or (d) of Section 5.4 hereof shall
be applied first to principal balances other than under Converted Loans; and
(b) to the extent not inconsistent with clause (a) hereof, first to Base Rate
Loans and then to LIBO Rate Loans. To the extent Mandatory Prepayments are
applied to Converted Loans, on account of clauses (a) or (c)(ii) of Section
5.4, they shall be applied to Scheduled Payments in the inverse order of their
due date, so that such Mandatory Prepayments are applied first to the Scheduled
Payment last coming due, and to the extent Mandatory Prepayments are applied to
Converted Loans, on account of clauses (b), (c)(i), or (d) of Section 5.4, they
shall be applied FIRST to the four principal installments next coming due, and
SECOND to remaining installments on a ratable basis.
5.6 MANNER OF PAYMENT. All payments, including prepayments, that
Borrower is required or permitted to make under the terms of this Credit
Agreement shall be made in US dollars to the Administrative Agent (a) in
immediately available federal funds, to be received no later than 1:00 P.M.
Central time of the Banking Day on which such payment is due by wire transfer
through Federal Reserve Bank, Kansas City, Routing Number: 307088754, COBANK
ENGWD (or to such other account as the Administrative Agent may designate by
notice); and (b) without setoff or counterclaim and free and clear of and
without deduction for any taxes, levies, impost, duties, charges, fees,
deductions, withholding, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless Borrower is
required by law to make such deduction or withholding.
5.7 DISTRIBUTION OF PRINCIPAL AND INTEREST PAYMENTS. The
Administrative Agent shall distribute payments of principal and interest among
the Syndication Parties as follows:
5.7.1 PRINCIPAL AND INTEREST PAYMENTS ON 7 YEAR REVOLVING LOAN.
Principal and interest payments on or applied to the 7 Year Revolving Loan
(including 7 Year Converted Loans) shall be remitted to the Syndication Parties
in accordance with their Individual 7 Year Pro Rata Share.
5.7.2 PRINCIPAL AND INTEREST PAYMENTS ON 10 YEAR REVOLVING LOAN.
Principal and interest payments on or applied to the 10 Year Revolving Loan
(including 10 Year Converted Loans) shall be remitted to the Syndication
Parties in accordance with their Individual 10 Year Pro Rata Share.
5.8 FUNDING LOSSES. "FUNDING LOSSES" shall be determined on an
individual Syndication Party basis as the amount which would result in such
Syndication Party being made whole (on a present value basis) for the actual or
imputed funding losses (including, without limitation, any loss, cost or
expense incurred by reason of obtaining, liquidating or employing deposits or
other funds acquired by such Syndication Party to fund or maintain such LIBO
Rate Loan) incurred by such Syndication Party as a result of such prepayment of
LIBO Rate Loans on any day other than the last day of the LIBO Rate Period
applicable thereto. In the event of any such prepayment, each Syndication
Party which had funded the LIBO Rate Loan being prepaid shall, promptly after
being notified of such prepayment, send written notice ("FUNDING LOSS NOTICE")
to the Administrative Agent by facsimile setting forth the amount of
attributable Funding Losses and the method of calculating the same. The
Administrative Agent shall notify Borrower orally or in writing of the amount
of such Funding Losses. A determination by a Syndication Party as to the
amounts payable pursuant to this Section shall be conclusive absent manifest
error. Notwithstanding the foregoing, each Syndication Party is entitled to
fund all or any part of its Pro Rata Share of any LIBO Rate Loan in any manner
it selects, and it is understood that for the purposes of determining any
Funding Losses, determination shall be made by each Syndication Party as though
it had actually funded and maintained each LIBO Rate Loan through the purchase
of deposits in the relevant interbank market having a maturity corresponding to
the relevant LIBO Rate Period.
Article 6. BANK EQUITY INTERESTS
6.1 Purchase of Bank Equity Interests. Borrower agrees to purchase such
equity interests in FCSA ("BANK EQUITY INTERESTS") as FCSA may from time to
time require in accordance with its bylaws and capital plan in effect as of the
date hereof as applicable to non-cooperative borrowers generally. In
connection with the foregoing, Borrower hereby acknowledges receipt, prior to
the execution of this Credit Agreement, of the following with respect to FCSA
(a) the bylaws, (b) a written description of the terms and conditions under
which the Bank Equity Interests are issued, (c) the most recent annual report,
and if more recent than the latest annual report, the latest quarterly report.
Article 7. SECURITY
7.1 Borrower's Assets. As security for the payment and performance of
all obligations of Borrower to the Administrative Agent, to FCSA (with respect
to the obligations of Borrower under Article 6 hereof), and to all present and
future Syndication Parties, including but not limited to principal and interest
under the Notes, purchases of Bank Equity Interests, fees, Funding Losses,
reimbursements, and all other Bank Debt or obligations under any of the Loan
Documents, Borrower shall grant to, and maintain for, the Administrative Agent,
for the benefit of FCSA (to the extent of Borrower's obligations with respect
to Bank Equity Interests), and for the benefit of all present and future
Syndication Parties, a first lien and security interest, pursuant to the
Security Documents, subject only to Permitted Encumbrances, in the following
("COLLATERAL"): all of Borrower's real property interest, furniture, fixtures
and equipment located at, or used in connection with, the poultry hatching,
raising, slaughtering, processing, packaging, and shipping operations and
facilities identified on EXHIBIT 7.1 hereto ("PLEDGED FACILITIES") and
including, without limitation, insurance policies in connection therewith and
the proceeds thereof, whether now owned or hereafter acquired; provided only
FCSA shall have a lien on the Bank Equity Interests, and that none of the
Syndication Parties shall have a lien thereon. Borrower shall execute and
deliver to the Administrative Agent, for the benefit of the Syndication
Parties, the Security Documents to evidence the security interest of the
Administrative Agent, for the benefit of the Syndication Parties, in the
Collateral, together with such financing statements or other documents as the
Administrative Agent shall reasonably request. Borrower shall also execute
such further security agreements, mortgages, deeds of trust, financing
statements, assignments or other documents as the Administrative Agent shall
reasonably request from time to time, in form and substance as the
Administrative Agent shall specify, to establish, confirm, perfect or provide
notice of the Administrative Agent's security interest (for the benefit of the
Administrative Agent and all Syndication Parties) in the Collateral.
7.2 GUARANTY. Borrower's obligations under this Credit Agreement, the
Notes, and all other Loan Documents shall be guaranteed by Pilgrim Interests,
Ltd., a Texas limited partnership ("GUARANTOR") through the execution of a
guarantee in form and substance acceptable to the Administrative Agent and
delivered on the Closing Date ("GUARANTY").
Article 8 representations and warranties
To induce the Syndication Parties to make the Loans and recognizing that
the Syndication Parties and the Administrative Agent are relying thereon,
Borrower represents and warrants as follows:
8.1 ORGANIZATION, GOOD STANDING, ETC. Borrower: (a) is duly
organized, validly existing, and in good standing under the laws of its state
of incorporation; (b) is duly qualified to do business and is in good standing
in the states of Texas and Arkansas and each other jurisdiction in which the
transaction of its business makes such qualification necessary, except to the
extent that the failure to so qualify has not resulted in, and could not
reasonably be expected to cause, a Material Adverse Effect; and (c) has all
requisite corporate and legal power to own and operate its assets and to carry
on its business, and to enter into and perform the Loan Documents to which it
is a party. Each Subsidiary: (x) is duly organized, validly existing, and in
good standing under the laws of its jurisdiction of organization; (y) is duly
qualified to do business and is in good standing in each jurisdiction in which
the transaction of its business makes such qualification necessary, except to
the extent that the failure to so qualify has not resulted in, and could not
reasonably be expected to cause, a Material Adverse Effect; and (z) has all
requisite corporate and legal power to own and operate its assets and to carry
on its business.
8.2 CORPORATE AUTHORITY, DUE AUTHORIZATION; CONSENTS. Borrower has
taken all corporate action necessary to execute, deliver and perform its
obligations under the Loan Documents to which it is a party. All consents or
approvals of any Person which are necessary for, or are required as a condition
of Borrower's execution, delivery and performance of and under the Loan
Documents, have been obtained except where the failure to obtain such consent
or approval could not reasonably be expected to cause a Material Adverse
Effect.
8.3 LITIGATION. Except as described on EXHIBIT 8.3 hereto, there are
no pending legal or governmental actions, proceedings or investigations to
which Borrower or any Subsidiary is a party or to which any property of
Borrower or any Subsidiary is subject which could reasonably be expected to
result in any Material Adverse Effect and, to Borrower's knowledge, no such
actions or proceedings are threatened or contemplated by any federal, state,
county, or city (or similar unit) governmental agency or any other Person.
8.4 NO VIOLATIONS. The execution, delivery and performance of the Loan
Documents will not: (a) violate any provision of Borrower's Organizational
Documents, or any law, rule, regulation (including, without limitation,
Regulations T, U, and X of the Board of Governors of the Federal Reserve
System), or any judgment, order or ruling of any court or governmental agency;
(b) violate, require consent under (except such consent as has been obtained),
conflict with, result in a breach of, constitute a default under, or with the
giving of notice or the expiration of time or both, constitute a default under,
any existing real estate mortgage, indenture, lease, security agreement,
contract, note, instrument or any other agreements or documents binding on
Borrower or affecting its property which, in any such circumstance, could
reasonably be expected to result in any Material Adverse Effect; or (c)
violate, conflict with, result in a breach of, constitute a default under, or
result in the loss of, or restriction of rights under, any Required License or
any order, law, rule, or regulation under or pursuant to which any Required
License was issued or is maintained ("LICENSING LAWS") which, in any such
circumstance, could reasonably be expected to result in any Material Adverse
Effect.
8.5 BINDING AGREEMENT. Each of the Loan Documents to which Borrower is
a party is the legal, valid and binding obligation of Borrower, enforceable in
accordance with its terms, subject only to limitations on enforceability
imposed by applicable bankruptcy, insolvency, reorganization, moratorium, or
similar laws affecting creditors' rights generally and by general principles of
equity.
8.6 COMPLIANCE WITH LAWS. Borrower and each Subsidiary are in
compliance with all federal, state, and local laws, rules, regulations,
ordinances, codes and orders, including without limitation all Environmental
Laws and all Licensing Laws, with respect to which noncompliance would result
in a Material Adverse Effect.
8.7 PRINCIPAL PLACE OF BUSINESS. Borrower's place of business, or
chief executive office if it has more than one place of business, and the place
where the records required by Section 10.1 hereof are kept, is located at 110
South Texas Street, Pittsburg, Texas 75686.
8.8 PAYMENT OF TAXES. Except as shown on EXHIBIT 8.8 hereto, Borrower
and each Subsidiary have filed all required federal, state and local tax
returns and have paid all taxes as shown on such returns as they have become
due, and have paid when due all other taxes, assessments or impositions levied
or assessed against Borrower or any Subsidiary, or their business or
properties, except for those subject to a Good Faith Contest or where the
failure to make such filing or payment could not reasonably be expected to
result in a Material Adverse Effect. EXHIBIT 8.8 specifically indicates all
such taxes which are subject to a Good Faith Contest as of the Closing Date.
8.9 LICENSES AND APPROVALS. Borrower and each Subsidiary have
ownership of, or license to use, or have been issued, all trademarks, patents,
copyrights, franchises, certificates, approvals, permits, authorities,
agreements, and licenses which are used or necessary to permit it to own its
properties and to conduct the business as presently being conducted as to which
the termination or revocation thereof could reasonably be expected to have a
Material Adverse Effect ("REQUIRED LICENSES"). Each Required License is in
full force and effect, and there is no outstanding notice of cancellation or
termination or, to Borrower's knowledge, any threatened cancellation or
termination in connection therewith, nor has an event occurred with respect to
any Required License which, with the giving of notice or passage of time or
both, could result in the revocation or termination thereof or otherwise in any
impairment of Borrower's rights with respect thereto, which impairment could
reasonably be expected to have a Material Adverse Effect. Borrower is not
required to obtain any consent, permission, authorization, order, or license of
any governmental authority, in connection with the execution, delivery,
performance, or enforcement of and under the Loan Documents to which Borrower
is a party except such as have been obtained and are in full force and effect.
8.10 EMPLOYEE BENEFIT PLANS. EXCEPT AS OTHERWISE DISCLOSED IN WRITING
TO THE ADMINISTRATIVE AGENTS AND ON EXHIBIT 8.10:
8.10.1 Employee Benefit Plans; Multiemployer Plans. EXHIBIT 8.10
sets forth as of the Closing Date a true and complete list of each Borrower
Benefit Plan, Borrower Pension Plan, and Multiemployer Plan that is maintained
by Borrower or in which Borrower participates or to which Borrower is obligated
to contribute, in each case as of the Closing Date. Borrower has received no
written notification that any Multiemployer Plan to which Borrower currently
has any obligation to contribute which is an "employee pension benefit plan" as
such term is defined in Section 3(2) of ERISA fails to qualify under the Code.
8.10.2 Pension Benefit Plans. To the knowledge of Borrower, each
Borrower Benefit Plan that is an "employee pension benefit plan" as defined in
Section 3(2) of ERISA that is intended to satisfy the requirements of Section
401(a) of the Code (each a "Borrower Pension Plan"), and the trust, if any,
forming a part thereof, meets in all material respects, and, in all material
respects, since its inception has met, the requirements for qualification under
Section 401(a) of the Code, and for exemption from taxation under
Section 501(a) of the Code (except that these representations shall not be
deemed to have been made subsequent to the Closing Date). The Internal Revenue
Service ("IRS") has issued a favorable determination letter with respect to the
qualification of each Borrower Pension Plan as of the Closing Date and the
trust, if any, relating thereto, and, to the knowledge of Borrower, the IRS has
not taken any action to revoke any such letter.
8.10.3 Prohibited Transactions. With respect to each Borrower
Benefit Plan sponsored or maintained by Borrower or in which Borrower
participates or to which Borrower is obligated to contribute (with the
exception of any Multiemployer Plan), neither Borrower nor any Borrower Benefit
Plan or, to the knowledge of Borrower, a fiduciary thereof, is engaged or has
engaged in any transaction which is prohibited by Part 4 of Subtitle B of
Title I of ERISA or which might subject any such plan or related trust, or any
trustee or administrator thereof, to a tax or penalty imposed by Section 4975
of the Code or Section 502(i) of ERISA or to liability under Section 409 of
ERISA, any of which would have a Material Adverse Effect. With respect to each
Multiemployer Plan to which Borrower or a member of Borrower's "controlled
group" (as that term is defined in Section 414(b) or (c) of the Code) has any
obligation to contribute, to the knowledge of Borrower, neither Borrower nor
any Multiemployer Plan or a fiduciary thereof is engaged or has engaged in any
transaction which is prohibited by Part 4 of Subtitle B of Title I of ERISA or
which might subject Borrower to a tax or penalty imposed by Section 4975 of the
Code or Section 502(i) of ERISA or to liability under Section 409 of ERISA, any
of which would have a Material Adverse Effect.
8.10.4 Civil/Criminal Action. To the knowledge of Borrower, no
civil or criminal action brought pursuant to Part 5 of Subtitle B of Title I of
ERISA is pending, or, to the knowledge of Borrower, is threatened against
Borrower, any Borrower Benefit Plan or any fiduciary thereof with respect to
any Borrower Benefit Plan (except that these representations shall not be
deemed to have been made subsequent to the Closing Date).
8.10.5 Funding. (a) Each Borrower Pension Plan is in compliance
with the minimum funding standards of Section 412 of the Code and Part 3 of
Subtitle B of Title I of ERISA, and (b) no waivers of the minimum funding
standards have been requested, and no Borrower Pension Plan has any
"accumulated funding deficiency" within the meaning of Section 412 of the Code.
8.10.6 Compliance With Law. To the knowledge of Borrower, Borrower
is in compliance in all material respects with, and each Borrower Benefit Plan
has been operated in all material respects in accordance with, the provisions
of such plan and in compliance in all material respects with, ERISA, the Code
and all other applicable law governing each such Borrower Benefit Plan,
including but not limited to rules and regulations promulgated by the
Department of Labor, the Pension Benefit Guaranty Corporation, and the
Department of the Treasury pursuant to the provisions of ERISA and the Code,
including without limitation, the bonding requirements of Section 412 of ERISA
and the disclosure and reporting requirements of Part 1 of Subtitle B of Title
I of ERISA, except to the extent any such failure would not have a Material
Adverse Effect (except that these representations shall not be deemed to have
been made subsequent to the Closing Date).
8.10.7 Multiple Employer Plan. As of the Closing Date, Borrower
does not participate in any "multiple employer plan" within the meaning of
Section 413 of the Code.
8.10.8 Plan Termination Liability; Multiemployer Plan Withdrawal
Liability. (a) Borrower has not incurred any material liability under Title IV
of ERISA arising in connection with the termination of, or complete or partial
withdrawal from, any employee pension benefit plan (as defined in Section 3(2)
of ERISA), covered or previously covered by Title IV of ERISA, which liability,
or any portion thereof, will constitute a liability of Borrower at or after the
Closing Date except to the extent that any such liability would not have a
Material Adverse Effect, and (b) neither Borrower nor any member of Borrower's
"controlled group" as defined in Code Section 414(b), (c), (m), or (o) prior to
the Closing Date has incurred any liability under Title IV of ERISA arising in
connection with the complete or partial withdrawal from any Multiemployer Plan,
which liability, or any portion thereof, will constitute a liability of
Borrower at or after the Closing Date, except to the extent that any such
liability would not have a Material Adverse Effect.
8.10.9 Pension Plan Termination. No proceedings to terminate any
Borrower Pension Plan have been instituted under Subtitle C of Title IV of
ERISA.
8.10.10 Reportable Event. To the knowledge of Borrower, no
"reportable event" within the meaning of Section 4043 of ERISA and the
regulations thereunder has occurred with respect to any Borrower Pension Plan
(other than a Multiemployer Plan), other than a reportable event for which
notice or penalty for noncompliance has been waived by regulation or otherwise.
With respect to any Multiemployer Plan that is a defined benefit plan to which
Borrower has any obligation to contribute, to the knowledge of Borrower, no
such "reportable event" has occurred which would materially and adversely
affect such plan, and, to the knowledge of Borrower, no such plan is in
reorganization within the meaning of Part 3 of Subtitle E of Title IV of ERISA
(except that the representations contained in this sentence shall not be deemed
to have been made subsequent to the Closing Date).
8.10.11 Payment of Contributions. In respect of each Borrower
Benefit Plan, Borrower has paid or will have paid or accrued as of the Closing
Date (a) all contributions or premiums required to be made by it for all plan
years ending on or prior to the Closing Date and, (b) for the plan year which
includes the Closing Date, any contributions or premiums required to be made by
it by the Closing Date under the terms of the Borrower Benefit Plan. Except as
disclosed in EXHIBIT 8.10, Borrower is not, as of the Closing Date, obligated
to pay any contributions or premiums to a Multiemployer Plan. Except as set
forth in EXHIBIT 8.10, all contributions paid or accrued by Borrower on or
prior to the Closing Date in respect of any Borrower Pension Plan that is a
defined benefit plan have been based on the actuarial assumptions and methods
used for the last plan year ended on or before the Closing Date, or if there is
no prior plan year for any such plan, contributions have been based upon
reasonable actuarial assumptions and methods.
8.10.12 Welfare Benefit Plans. As of the Closing Date, Borrower
does not participate in a "multiple employer welfare arrangement" within the
meaning of Section 3(40) of ERISA. Except as disclosed in Exhibit 8.10,
Borrower does not, as of the Closing Date, maintain or contribute to a
"voluntary employees' beneficiary association" within the meaning of Section
501(c)(9) of the Code or a "welfare benefit fund" within the meaning of Section
419 of the Code, nor does Borrower maintain or contribute to any employee
welfare benefit plan within the meaning of Section 3(1) of ERISA for the
benefit of retired or former employees (other than as required by Section 4980B
of the Code and Sections 601 through 608 of ERISA ("COBRA") or other applicable
law). Borrower has complied in all material respects with the applicable
provisions of COBRA with respect to the Borrower Benefit Plans.
8.11 Equity Investments. Borrower does not, AS OF THE CLOSING DATE, own
any stock or other voting or equity interest, directly or indirectly, in any
Person valued at the greater of book value or market value at $5,000,000 or
more, other than as set forth on EXHIBIT 8.11.
8.12 TITLE TO REAL AND PERSONAL PROPERTY. Borrower and each Subsidiary
(a) have all real and personal property necessary for the conduct of their
respective business, and (b) have good and marketable title to, or valid
leasehold interests in, all of their material properties and assets, real and
personal, including, as of the Closing Date, the properties and assets and
leasehold interests reflected in the financial statements of the Borrower and
its Subsidiaries referred to in Section 8.13 hereof, except (i) any properties
or assets disposed of in the ordinary course of business, (ii) rights of way,
easements, and similar interests in real property or defects in title which in
the aggregate could not reasonably be expected to result in a Material Adverse
Effect, and (iii) Permitted Encumbrances; and none of the properties of
Borrower or any Subsidiary are subject to any Lien, except Permitted
Encumbrances. All such property is in good operating condition and repair,
reasonable wear and tear excepted, and suitable in all material respects for
the purposes for which it is being utilized except where their failure to be in
good operating condition could not reasonably be expected to result in a
Material Adverse Effect. All of the leases of Borrower and each Subsidiary
which constitute Material Agreements are in full force and effect and afford
Borrower or such Subsidiary peaceful and undisturbed possession of the subject
matter thereof.
8.13 FINANCIAL STATEMENTS. The consolidated balance sheets of Borrower
and its Subsidiaries as of October 2, 1999, and the related consolidated
statements of operations, cash flows and consolidated statements of capital
shares and equities for the Fiscal Year then ended, and the accompanying
footnotes, together with the unqualified opinion thereon, dated November 2,
1999 of Ernst & Young, LLP, independent certified public accountants, copies of
which have been furnished to the Administrative Agent and the Syndication
Parties, fairly present in all material respects the consolidated financial
condition of Borrower and its Subsidiaries as at such dates and the results of
the consolidated operations of Borrower and its Subsidiaries for the periods
covered by such statements, all in accordance with GAAP. Between October 2,
1999 and the Closing Date, there has been no material adverse change in the
financial condition, results of operations, or business of Borrower or any of
its Subsidiaries taken as a whole. As of the Closing Date, there are no
liabilities of Borrower or any of its Subsidiaries, fixed or contingent, which
are material but are not reflected in the financial statements of Borrower and
its Subsidiaries referred to above or referred to in the notes thereto, other
than liabilities arising in the ordinary course of business since October 2,
1999 or referred to in periodic filings of Borrower with the Securities and
Exchange Commission subsequent to October 2, 1999 but prior to the Closing
Date, copies of which have been provided to the Administrative Agent by
Borrower. No information, exhibit, or report furnished by Borrower or any of
its Subsidiaries to the Administrative Agent and the Syndication Parties in
connection with Borrower's application for the Facilities and the negotiation
of this Credit Agreement contained any material misstatement of fact or omitted
to state a material fact or any fact necessary to make the statements contained
therein not materially misleading in light of the circumstances in which they
were made and taken together with the other information, exhibits and reports
furnished to the Administrative Agent and the Syndication Parties.
8.14 ENVIRONMENTAL COMPLIANCE. Except as set forth on EXHIBIT 8.14
hereto, Borrower and each Subsidiary have obtained all permits, licenses and
other authorizations which are required under all applicable Environmental
Laws, except to the extent failure to have any such permit, license or
authorization could not reasonably be expected to result in a Material Adverse
Effect. Except as set forth on EXHIBIT 8.14 hereto, Borrower and each
Subsidiary are in compliance with all Environmental Laws and the terms and
conditions of the required permits, licenses and authorizations, and are also
in compliance with all other limitations, restrictions, obligations, schedules
and timetables contained in those Laws or contained in any plan, order, decree,
judgment, injunction, notice or demand letter issued, entered, promulgated or
approved thereunder, except to the extent, in each case, failure to comply has
not resulted in, and could not reasonably be expected to result in, a Material
Adverse Effect.
8.15 FISCAL YEAR. Each fiscal year of Borrower is a year (a) ending on
the Saturday closest to September 30 in each calendar year, regardless of
whether such Saturday occurs in September or October of any calendar year and
(b) beginning on the day immediately following the end of the preceding Fiscal
Year.
8.16 MATERIAL AGREEMENTS. The periodic reports of Borrower filed with
the Securities and Exchange Commission, copies of which have been provided to
the Administrative Agent by Borrower, and/or EXHIBIT 8.16 hereto list each
Material Agreement of the Borrower and each Subsidiary as of the Closing Date.
Borrower is not in default under any Material Agreement, nor, to Borrower's
knowledge, (a) is any other party to any Material Agreement in default
thereunder, or (b) do any facts exist which with the giving of notice or the
passage of time, or both, would constitute such a default by any party to any
Material Agreement.
8.17 REGULATIONS U AND X. No portion of any Advance will be used for
the purpose of purchasing, carrying, or making loans to finance the purchase
of, any "margin security" or "margin stock" as such terms are used in
Regulations U or X of the Board of Governors of the Federal Reserve System, 12
C.F.R. Parts 221 and 224.
8.18 TRADEMARKS, TRADENAMES. Borrower and each Subsidiary have
ownership or the lawful right to use all tradenames, trademarks, patents, and
other intellectual property which they utilizes in their business as presently
being conducted and as anticipated to be conducted, except where the failure to
do so could not reasonably be expected to result in a Material Adverse Effect.
8.19 NO DEFAULT ON OUTSTANDING JUDGMENTS OR ORDERS. Borrower and each
Subsidiary have satisfied all final and non-appealable judgments and Borrower
and each Subsidiary are not in default with respect to any judgment, writ,
injunction, decree, rule or regulation of any court, arbitrator or federal,
state, municipal or other Governmental Authority, commission, board, bureau,
agency or instrumentality, domestic or foreign, except to the extent such
failure to satisfy any or all such final and non-appealable judgments or to be
in such a default has not resulted in, and could not reasonably be expected to
result in, a Material Adverse Effect.
8.20 NO DEFAULT IN OTHER AGREEMENTS. Neither Borrower nor any
Subsidiary is in default in any respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument where such failure to perform, observe or fulfill has
resulted in, or could reasonably be expected to result in, a Material Adverse
Effect.
8.21 LABOR MATTERS; LABOR AGREEMENTS. EXCEPT AS SET FORTH IN EXHIBIT
8.21 hereof: (a) As of the Closing Date, there are no collective bargaining
agreements or other labor agreements covering any employees of Borrower or any
Subsidiary the termination, cessation, or breach of which could reasonably be
expected to result in a Material Adverse Effect, and a true and correct copy of
each such agreement will be furnished to the Administrative Agent upon its
written request from time to time. (b) There is no organizing activity
involving Borrower or any Subsidiary pending or, to Borrower's knowledge,
threatened by any labor union or group of employees. (c) There are, to
Borrower's knowledge, no representation proceedings pending or threatened with
the National Labor Relations Board, and no labor organization or group of
employees of Borrower or any Subsidiary has made a pending demand for
recognition. (d) There are no complaints or charges against Borrower or any
Subsidiary pending or, to Borrower's knowledge threatened to be filed with any
federal, state, local or foreign court, governmental agency or arbitrator based
on, arising out of, in connection with, or otherwise relating to the employment
or termination of employment by Borrower or any Subsidiary of any individual.
(e) There are no strikes or other labor disputes against Borrower or any
Subsidiary that are pending or, to Borrower's knowledge, threatened. (f) Hours
worked by and payment made to employees of Borrower or any Subsidiary have not
been in violation of the Fair Labor Standards Act (29 U.S.C. (section) 201 et
seq.) or any other applicable law dealing with such matters. The
representations made in subparagraphs (b) through (f) of this Section are made
with respect to those occurrences described which could, considered in the
aggregate, reasonably be expected to have a Material Adverse Effect.
8.22 GOVERNMENTAL REGULATION. Neither Borrower nor any Subsidiary is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Investment Company Act of 1940, the Interstate Commerce Act, the Federal Power
Act or any statute or regulation, in each case, limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
8.23 YEAR 2000 COMPLIANCE. Borrower represents and warrants that: (a)
Borrower and each Subsidiary have conducted an analysis of, and developed a
compliance program with respect to, all of their Significant Software, designed
to ensure that it will be Year 2000 Compliant, and Borrower anticipates that
such compliance program will be completed on a timely basis. (b) To the best
of Borrower's knowledge, after due inquiry, the impact of year 2000 on Borrower
and each Subsidiary and the key suppliers of Borrower and each Subsidiary will
not be such as to materially adversely affect the business, condition
(financial or otherwise) or operation of the business of Borrower and each
Subsidiary, taken as a whole, or to prevent Borrower from performing its
obligations hereunder.
8.24 CONFIDENTIAL INFORMATION MEMORANDUM. To the best of Borrower's
knowledge, the information contained in, and all attachments to, the
Confidential Information Memorandum dated September 1999 provided by Borrower
to the Administrative Agent and to the Syndication Parties was as of such date,
and is as of the Closing Date, accurate, true, correct, and complete in all
material respects, and not misleading in any material respect.
8.25 10-YEAR FINANCIAL PROJECTIONS. The 10-Year Financial Projections
provided to the Administrative Agent and the Syndication Parties with respect
to Borrower and its Subsidiaries as of the Closing Date fairly present in all
material respects the projected operations, financial condition, assets and
liabilities as of the dates covered thereby. To Borrower's knowledge, no
undisclosed facts existed at the time of submission of the 10-Year Financial
Projections which, if taken into account, would have resulted in any material
change in any of the 10-Year Financial Projections. The 10-Year Financial
Projections were, at the time of submission, based upon reasonable estimates
and assumptions, all of which were fair in light of then-current conditions,
were prepared on the basis of the assumptions stated therein, and reflected the
reasonable estimate of Borrower of the results of operations and other
information projected therein. Nothing in this Section shall be deemed to
constitute an assurance by Borrower that it will meet the results contained in
the 10-Year Projections.
8.26 SOLVENCY. After giving effect to the consummation of each Loan to
be made under this Agreement as of the time this representation is given,
Borrower (a) will be able to pay its debts as they become due, (b) will have
funds and capital sufficient to carry on its business and all businesses in
which it is about to engage, and (c) will own property in the aggregate having
a value both at fair valuation and at fair saleable value in the ordinary
course of Borrower's business greater than the amount required to pay its Debt,
including for this purpose unliquidated, contingent, and disputed claims.
8.27 DISCLOSURE. The representations and warranties contained in this
Article 8 and in the other Loan Documents and in any financial statements
provided to the Administrative Agent do not contain any untrue statement of a
material fact or omit to state a material fact necessary to make such
representations or warranties not misleading; and all projections provided to
the Administrative Agent were prepared in good faith based on reasonable
assumptions.
Article 9. CONDITIONS TO ADVANCES
9.1 Conditions to Closing. The obligation of the Syndication Parties
to make the initial Advance is subject to satisfaction, in the sole discretion
of the Administrative Agent and the Syndication Parties, of each of the
following conditions precedent:
9.1.1 LOAN DOCUMENTS; POSSESSION OF COLLATERAL; AND GUARANTY. The
Administrative Agent shall have received: (a) duly executed originals of the
Loan Documents; (b) possession of such other instruments and documents in which
the Administrative Agent, on behalf of the Syndication Parties, has been
granted a security interest and of which the Administrative Agent is to have
possession under the terms of the Loan Documents; and (c) the Guaranty duly
executed by the Guarantor.
9.1.2 APPROVALS. The Administrative Agent shall have received
evidence satisfactory to it that all consents and approvals of governmental
authorities and third parties which are with respect to Borrower, necessary
for, or required as a condition of the validity and enforceability of the Loan
Documents to which it is a party.
9.1.3 ORGANIZATIONAL DOCUMENTS. The Administrative Agent shall
have received: (a) good standing certificate (or comparable), dated no more
than thirty (30) days prior to the Closing Date, for Borrower for its state of
incorporation and the states of Arkansas and Texas; (b) a copy of the
certificate of incorporation of Borrower certified by the Secretary of State of
its state of organization; and (c) a copy of the bylaws of Borrower, certified
as true and complete by the Secretary or Assistant Secretary of Borrower.
9.1.4 EVIDENCE OF INSURANCE. Borrower shall have provided the
Administrative Agent with insurance certificates and such other evidence, in
form and substance satisfactory to the Administrative Agent, of all insurance
required to be maintained by it under the Loan Documents.
9.1.5 UCC SEARCHES; FILINGS. The Administrative Agent shall have
received searches of appropriate filing offices showing that: (a) no state or
federal tax liens have been filed which remain in effect against Borrower; (b)
except with respect to Permitted Encumbrances no financing statements have been
filed by any Person against the Collateral, except to perfect the security
interests required by this Credit Agreement, which remain in effect against
Borrower or any of its assets; (c) all financing statements necessary to
perfect the security interests granted to Agent, on behalf of the Syndication
Parties, under the Loan Documents have been filed or recorded, to the extent
such security interests are capable of being perfected by such filing; and (d)
all of the Loan Documents required to be recorded or filed to perfect the
security interests and liens granted therein shall be so recorded and filed.
9.1.6 TITLE INSURANCE; SURVEY. Borrower shall have provided to the
Administrative Agent (a) in connection with all real property included in the
Collateral in which Borrower has a fee interest, (i) a mortgagees' title
insurance policy (Standard Texas Mortgagees Policy Form) ("TITLE POLICY") from
an insurer acceptable to the Administrative Agent ("TITLE INSURER") insuring
the lien in favor of the Administrative Agent, on behalf of the Syndication
Parties, as a first priority lien on each such parcel of real property, subject
only to Permitted Encumbrances, and (A) in such amount as the Administrative
Agent shall require, (B) deleting the standard printed exceptions (including
exceptions for mechanics liens and, with respect to those properties for which
a survey is to be provided as set forth on EXHIBIT 9.1.6 attached hereto,
exceptions based on lack of adequate survey) and the gap exception, (C)
containing only such exceptions to title as are reasonably acceptable to the
Administrative Agent, (D) providing access coverage, and (E) containing such
other endorsements as the Administrative Agent may reasonably require (but in
any event including the following endorsements: revolving credit), and (ii)
surveys on the properties described on EXHIBIT 9.1.6 attached hereto, which
surveys, the certifications thereon, and all information contained therein,
shall be acceptable to the Administrative Agent, and shall contain a legal
description and, except as specifically provided otherwise on EXHIBIT 9.1.6,
shall, at a minimum, show the location of all structures, visible utilities,
fences, hedges, or walls on the parcel and within 5 feet of all boundaries
thereof, any conflicting boundary evidence or visible encroachments, and all
easements, underground utilities, and tunnels for which properly recorded
evidence is available; and (b) in connection with any lease where Borrower is a
lessee of an interest in real property included in the Collateral and calling
for a rental payment equal to or in excess of $100,000.00 per annum, a Title
Policy and a leasehold assignment and lessor consent in form and content
satisfactory to the Administrative Agent and containing such estoppels of
lessor as the Administrative Agent shall specify.
9.1.7 APPOINTMENT OF AGENT FOR SERVICE. The Administrative Agent
shall have received evidence satisfactory to the Administrative Agent that
Borrower has appointed a Person with offices in Denver, Colorado and otherwise
reasonably acceptable to the Administrative Agent to serve as its agent for
service of process, and that said Person has accepted such appointment by
Borrower.
9.1.8 NO MATERIAL CHANGE. No change shall have occurred in the
condition or operations of Borrower or any Subsidiary since October 2, 1999
which, when considered in the aggregate, could reasonably be expected to result
in a Material Adverse Effect.
9.1.9 FEES AND EXPENSES. Borrower shall have paid the
Administrative Agent, by wire transfer of immediately available federal funds
all fees set forth in the Fee Letter between CoBank and Borrower dated August
25, 1999 ("FEE LETTER") and the Commitment Letter between CoBank and Borrower
dated August 25, 1999 ("COMMITMENT LETTER"), in each case executed by CoBank
and Borrower, and any other fees owing to the Administrative Agent which are
due on the Closing Date, and all expenses owing as of the Closing Date pursuant
to Section 15.1 hereof and for which Borrower has received an invoice.
9.1.10 EVIDENCE OF CORPORATE ACTION. The Administrative Agent
shall have received in form and substance satisfactory to the Administrative
Agent, documents evidencing all corporate action taken by Borrower to authorize
(including the specific names and titles of the persons authorized to so act
(each an "AUTHORIZED OFFICER")) the execution, delivery and performance of the
Loan Documents to which it is a party, certified to be true and correct by the
Secretary or Assistant Secretary of Borrower; and a certificate of the
Secretary or Assistant Secretary of Borrower, dated the Closing Date,
certifying the names and true signatures of the Authorized Officers.
9.1.11 OPINION OF COUNSEL. Borrower shall have provided a
favorable opinion of its counsel addressed to the Administrative Agent and each
of the present and future Syndication Parties, covering such matters as the
Administrative Agent may reasonably require, including, without limitation, due
incorporation, authorization and execution, enforceability, usury, creation and
perfection of real and personal property liens on the Collateral in relevant
jurisdiction, fees, taxes and qualifications requirements. In addition,
Borrower shall have provided a favorable opinion of counsel for Guarantor
addressed to the Administrative Agent and each of the present and future
Syndication Parties, covering such matters with respect to Guarantor and the
Guaranty as the Administrative Agent may reasonably require, including, without
limitation, due formation, authorization and execution, enforceability, fees,
taxes and qualifications requirements.
9.1.12 10 YEAR FINANCIAL PROJECTIONS. The Administrative Agent
shall have received in form and substance satisfactory to the Administrative
Agent the 10 Year Financial Projections and they must demonstrate to the
Administrative Agent the Borrower's reasonably adequate ability to repay
scheduled amortization of all Debt and to refinance any bullet maturities of
all Debt.
9.1.13 AVAILABLE AMOUNT REPORT; APPRAISALS. The Administrative
Agent shall have received an Available Amount Report dated as of the Closing
Date as well as an Appraisal with respect to all real property interests (fee
and leasehold) included within the Collateral.
9.1.14 FURTHER ASSURANCES. Borrower shall have provided and/or
executed and delivered to the Administrative Agent such further assignments,
documents or financing statements, in form and substance satisfactory to the
Administrative Agent, that Borrower is to execute and/or deliver pursuant to
the terms of the Loan Documents or as the Administrative Agent may reasonably
request.
9.2 BORROWING NOTICE; FUNDING NOTICE Borrower shall give the
Administrative Agent prior written notice by facsimile (effective upon receipt)
of each request for an Advance (a) in the case of a Base Rate Loan, on or
before 11:00 A.M. (Central time) on the day of making such Base Rate Loan, and
(b) in the case of a LIBO Rate Loan, on or before 11:00 A.M. (Central time) at
least three (3) Banking Days prior to the date of making such LIBO Rate Loan.
Each notice must be in substantially the form of EXHIBIT 9.2 hereto ("BORROWING
NOTICE") and must specify (c) the amount of such Advance, (d) the proposed date
of making such Advance, (e) whether Borrower requests that the Advance will
bear interest at (i) the Base Rate or (ii) the LIBO Rate, and (f) in the case
of a LIBO Rate Loan, the initial LIBO Rate Period applicable thereto. All
Advances shall be allocated between the 7 Year Revolving Loan and the 10 Year
Revolving Loan a pro rata basis so that (g) the portion of each Advance
allocated to the 7 Year Revolving Loan shall be determined by multiplying the
Advance amount by a fraction the numerator of which is the Aggregate 7 Year
Commitment then in effect and the denominator of which is the Aggregate
Commitment then in effect, and (h) the portion of each Advance allocated to the
10 Year Revolving Loan shall be determined by multiplying the Advance amount by
a fraction the numerator of which is the Aggregate 10 Year Commitment then in
effect and the denominator of which is the Aggregate Commitment then in effect.
The Administrative Agent shall, on or before 12:00 noon (Central time) of the
same Banking Day, notify each Syndication Party ("FUNDING NOTICE") of its
receipt of each such Borrowing Notice and the amount of such Syndication
Party's Funding Share thereunder. Not later than 2:00 P.M. (Central time) on
the date of an Advance, each Syndication Party will make available to the
Administrative Agent at the Administrative Agent's Office, in immediately
available funds, such Syndication Party's Funding Share of such Advance. After
the Administrative Agent's receipt of such funds, but not later than 3:00 P.M.
(Central time), and upon fulfillment of the applicable conditions set forth in
Article 9 hereof, the Administrative Agent will make such Advance available to
Borrower, in immediately available funds, and will transmit such funds by wire
transfer to Borrower's Account.
9.3 CONDITIONS TO ADVANCE. The Syndication Parties' obligation to fund
each Advance is subject to (a) receipt of a properly completed Borrowing
Notice, and (b) the satisfaction, in the sole discretion of the Administrative
Agent and the Syndication Parties, of each of the following conditions
precedent, and with respect to the initial Advance, those set forth in Section
9.1 hereof, and each request by Borrower for an Advance shall constitute a
representation by Borrower, upon which the Administrative Agent and Syndication
Parties may rely, that the conditions set forth in this Section have been
satisfied and that the amount of the Advance does not exceed the limits set
forth in Sections 2.1, 2.2, 3.1, and 3.2, as applicable:
9.3.1 DEFAULT. As of the Advance Date no Event of Default or
Potential Default shall have occurred and be continuing, and the disbursing of
the amount of the Advance requested shall not result in an Event of Default or
Potential Default.
9.3.2 AVAILABILITY PERIOD. The Borrowing Notice does not specify
an Advance Date which is later than the last Banking Day of the Availability
Period.
9.3.3 REPRESENTATIONS AND WARRANTIES; FEES AND EXPENSES. The
representations and warranties of Borrower herein shall be true and correct in
all material respects on and as of the date on which the Advance is to be made
as though made on such date. Borrower shall have paid the Administrative
Agent, by wire transfer of immediately available U.S. funds all fees set forth
in Section 4.5 hereof and in the Fee Letter and the Commitment Letter, in each
case executed by CoBank and Borrower, which are then due and payable, including
all expenses owing as of the Advance Date pursuant to Section 15.1 hereof for
which Borrower has received an invoice.
9.3.4 NO MATERIAL CHANGE. No change shall have occurred in the
condition or operations of Borrower or any Subsidiary since the date of the
financial statements (quarterly or annual, as applicable) most recently
provided by Borrower to the Administrative Agent pursuant to Subsection 10.2.1
or 10.2.2, as applicable, which, when considered in the aggregate, could
reasonably be expected to result in a Material Adverse Effect.
9.4 LIMITATION ON LIBO RATE LOANS. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of the LIBO Rate for any
LIBO Rate Period:
(a) The Administrative Agent determines (which determination shall be
conclusive) that quotations of interest rates in the definition of LIBO Rate
are not being provided in the relevant amounts or for the relevant maturities
for purposes of determining rates of interest for LIBO Rate Loans as provided
in this Credit Agreement; or
(b) any Syndication Party determines (which determination shall be
conclusive) that the relevant rates of interest referred to in the definition
of LIBO Rate upon the basis of which the rate of interest for LIBO Rate Loans
for such LIBO Rate Period is to be determined do not adequately cover the cost
to the Syndication Parties of making or maintaining such LIBO Rate Loans for
such LIBO Rate Period;
then the Administrative Agent shall give Borrower prompt notice thereof, and so
long as such condition remains in effect, in the case of clause (a) above, the
Syndication Parties, and in the case of clause (b) above, the Syndication Party
that makes the determination, shall be under no obligation to make LIBO Rate
Loans, convert Base Rate Loans into LIBO Rate Loans, or continue LIBO Rate
Loans, and Borrower shall, on the last day(s) of the then current applicable
LIBO Rate Period(s) for the outstanding LIBO Rate Loans, either prepay such
LIBO Rate Loans or convert such LIBO Rate Loans into a Base Rate Loan in
accordance with Section 4.1 hereof. In addition to the foregoing, in the event
a determination is made under clause (b) above, Borrower shall have the right,
but not the obligation, upon written notice to the Administrative Agent, on or
before 10:00 A.M. (Central time) on or before ten (10) Banking Days following
receipt of notice from the Administrative Agent of such condition, to reduce
the Individual 7 Year Commitment and Individual 10 Year Commitment of such
Syndication Party to zero upon making a prepayment, to be treated as a
Voluntary Payment to the extent not inconsistent with the provisions of this
Section, equal to the amount of such Syndication Party's Individual Outstanding
7 Year Obligations and Individual Outstanding 10 Year Obligations plus any
Funding Losses attributed to the portion of such payment applied to LIBO Rate
Loans as provided below. In the event Borrower makes such an election, then a
reduction in a dollar amount corresponding to such reduction in Individual 7
Year Commitment and/or Individual 10 Year Commitment shall be made to the
Aggregate 7 Year Commitment and/or Aggregate 10 Year Commitment, as applicable,
and, notwithstanding any provisions of this Credit Agreement to the contrary,
including, without limitation, Sections 2.8 and 3.8: (i) the amount of such
prepayment shall be applied to outstanding LIBO Rate Loans to the extent of
such Syndication Party's Pro Rata Share thereof and, along with the amount paid
on account of such Funding Losses, distributed to the Syndication Party making
such determination and as to which Borrower has made such election, and (ii)
any reduction in the Aggregate 7 Year Commitment on account of the provisions
of this Section shall not require or result in a reduction in the Aggregate 10
year Commitment, and any reduction in the Aggregate 10 Year Commitment on
account of the provisions of this Section shall not require or result in a
reduction in the Aggregate 7 year Commitment.
9.5 ILLEGALITY OF LOAN. Notwithstanding any other provision of this
Credit Agreement, in the event that it becomes unlawful for any Syndication
Party or its Applicable Lending Office to honor its obligation to make or
maintain LIBO Rate Loans hereunder or convert Base Rate Loans into LIBO Rate
Loans, then such Syndication Party shall promptly notify the Administrative
Agent and Borrower thereof and such Syndication Party's obligation to make or
continue, or to convert Base Rate Loans into, LIBO Rate Loans shall be
suspended until such time as such Syndication Party may again make and maintain
LIBO Rate Loans (in which case the provisions of Section 9.6 hereof shall be
applicable) and, unless and until Borrower exercises the rights granted in the
next sentence, such Syndication Party's Individual 7 Year Pro Rata Share or
Individual 10 Year Pro Rata Share, as applicable, of all Loans and all
subsequent Advances shall be made as Base Rate Loans (and such Syndication
Party's share of interest payments shall reflect the foregoing), in each case,
until such time as such Syndication Party may again make and maintain LIBO Rate
Loans (in which case the provisions of Section 9.6 hereof shall be applicable).
In the event a such a notification is made, Borrower shall have the right, but
not the obligation, upon written notice to the Administrative Agent, on or
before 10:00 A.M. (Central time) on or before ten (10) Banking Days following
receipt of notice from such Syndication Party, to reduce the Individual 7 Year
Commitment and Individual 10 Year Commitment of such Syndication Party to zero
upon making a prepayment, to be treated as a Voluntary Payment to the extent
not inconsistent with the provisions of this Section, equal to the amount of
such Syndication Party's Individual Outstanding 7 Year Obligations and
Individual Outstanding 10 Year Obligations plus any Funding Losses attributed
to the portion of such payment applied to LIBO Rate Loans as provided below.
In the event Borrower makes such an election, then a reduction in a dollar
amount corresponding to such reduction in Individual 7 Year Commitment and/or
Individual 10 Year Commitment shall be made to the Aggregate 7 Year Commitment
and/or Aggregate 10 Year Commitment, as applicable, and, notwithstanding any
provisions of this Credit Agreement to the contrary, including, without
limitation, Sections 2.8 and 3.8: (a) the amount of such prepayment shall be
applied to outstanding LIBO Rate Loans to the extent of such Syndication
Party's Pro Rata Share thereof and, along with the amount paid on account of
such Funding Losses, distributed to the Syndication Party making such
determination and as to which Borrower has made such election, and (b) any
reduction in the Aggregate 7 Year Commitment on account of the provisions of
this Section shall not require or result in a reduction in the Aggregate 10
year Commitment, and any reduction in the Aggregate 10 Year Commitment on
account of the provisions of this Section shall not require or result in a
reduction in the Aggregate 7 year Commitment.
9.6 TREATMENT OF AFFECTED LOANS. If the obligations of any Syndication
Party to make or continue LIBO Rate Loans, or to convert Base Rate Loans into
LIBO Rate Loans, are suspended pursuant to Section 9.4 or 9.5 hereof (all LIBO
Rate Loans so affected being herein called "AFFECTED LOANS"), such Syndication
Party's Affected Loans shall be automatically converted into Base Rate Loans on
the last day(s) of the then current LIBO Rate Period(s) for the Affected Loans
(or, in the case of a conversion required by Section 9.4 or 9.5, on such
earlier date as such Syndication Party may specify to Borrower). To the extent
that such Syndication Party's Affected Loans have been so converted, all
payments and prepayments of principal which would otherwise be applied to such
Syndication Party's Affected Loans shall be applied instead to its Base Rate
Loans. All Advances which would otherwise be made or continued by such
Syndication Party as LIBO Rate Loans shall be made or continued instead as Base
Rate Loans, and all Base Rate Loans of such Syndication Party which would
otherwise be converted into LIBO Rate Loans shall remain as Base Rate Loans.
Article 10. affirmative covenants
From and after the date of this Credit Agreement and until the Bank Debt
is indefeasibly paid in full and the Syndication Parties have no obligation to
make any Advance, Borrower agrees that it will observe and comply with the
following covenants for the benefit of the Administrative Agent and Syndication
Parties:
10.1 BOOKS AND RECORDS. Borrower shall at all times keep, and cause
each Subsidiary to keep, proper books of record and account, in which correct
and complete entries shall be made of all its dealings, in accordance with
GAAP.
10.2 REPORTS AND NOTICES. Borrower shall provide to the Administrative
Agent the following reports, information and notices:
10.2.1 ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
no event later than ninety (90) days after the end of any Fiscal Year of
Borrower occurring during the term hereof one copy of the audit report for such
year and accompanying consolidated financial statements (including all
footnotes thereto), including a consolidated balance sheet, a consolidated
statement of earnings, a consolidated statement of capital, and a consolidated
statement of cash flow for the Borrower and its Subsidiaries, showing in
comparative form the figures for the previous Fiscal Year, all in reasonable
detail, prepared in conformance with GAAP consistently applied and certified
without qualification by Ernst & Young, LLP, or other independent public
accountants of nationally recognized standing selected by the Borrower and
reasonably satisfactory to the Administrative Agent, and to be accompanied by a
copy of any management letter of such accountants addressed to and received by
the board of directors of Borrower related to such annual audit and annual
financial statements. Such annual financial statements required pursuant to
this Subsection shall be accompanied by a Compliance Certificate signed by
Borrower's Chief Financial Officer.
10.2.2 QUARTERLY FINANCIAL STATEMENTS. As soon as available but in
no event more than forty-five (45) days after the end of each Fiscal Quarter
(excluding the last Fiscal Quarter of Borrower's Fiscal Year) the following
financial statements or other information concerning the operations of Borrower
and its Subsidiaries for such Fiscal Quarter, the Fiscal Year to date, and for
the corresponding periods of the preceding Fiscal Year, all prepared in
accordance with GAAP consistently applied: (a) a consolidated balance sheet,
(b) a consolidated summary of earnings, (c) a consolidated statement of cash
flows, and (d) such other statements as the Administrative Agent may reasonably
request. Such quarterly financial statements required pursuant to this
Subsection shall be accompanied by a Compliance Certificate signed by
Borrower's Chief Financial Officer or other officer of Borrower acceptable to
the Administrative Agent (subject to normal year end adjustments).
10.2.3 NOTICE OF DEFAULT. As soon as the existence of any Event of
Default or Potential Default becomes known to any officer of Borrower, prompt
written notice of such Event of Default or Potential Default, the nature and
status thereof, and the action being taken or proposed to be taken with respect
thereto.
10.2.4 ERISA REPORTS. As soon as possible and in any event within
twenty (20) days after Borrower or any Subsidiary knows or has reason to know
that any Reportable Event or Prohibited Transaction has occurred with respect
to any Plan or that the Pension Benefit Guaranty Corporation or Borrower or any
Subsidiary has instituted or will institute proceedings under Title IV of ERISA
to terminate any Plan, or that Borrower, any Subsidiary or any ERISA Affiliate
has completely or partially withdrawn from a Multiemployer Plan, or that a Plan
which is a Multiemployer Plan is in reorganization (within the meaning of
Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA) or is terminating, a certificate of the Chief Financial Officer of
Borrower or such Subsidiary setting forth details as to such Reportable Event
or Prohibited Transaction or Plan termination or withdrawal or reorganization
or insolvency and the action Borrower or such Subsidiary proposes to take with
respect thereto, provided, however, that notwithstanding the foregoing, no
reporting is required under this Subsection unless the matter(s), individually
or in the aggregate, result, or could be reasonably expected to result, in
aggregate obligations or liabilities of Borrower and/or the Subsidiaries in
excess of five million dollars ($5,000,000).
10.2.5 NOTICE OF LITIGATION. Promptly after the commencement
thereof, notice of all actions, suits, arbitration and any other proceedings
before any Governmental Authority, affecting Borrower or any Subsidiary which,
if determined adversely to Borrower or any Subsidiary, could reasonably be
expected to require Borrower or any Subsidiary to have to pay or deliver assets
having a value of five million dollars ($5,000,000) or more (whether or not the
claim is covered by insurance) or could reasonably be expected to result in a
Material Adverse Effect.
10.2.6 NOTICE OF MATERIAL ADVERSE EFFECT. Promptly after Borrower
obtains knowledge thereof, notice of any matter which, alone or when considered
together with other matters, has resulted or could reasonably be expected to
result in, a Material Adverse Effect.
10.2.7 NOTICE OF ENVIRONMENTAL PROCEEDINGS. Without limiting the
provisions of Subsection 10.2.5 hereof, promptly after Borrower's receipt
thereof, notice of the receipt of all pleadings, orders, complaints,
indictments, or other communication alleging a condition that may require
Borrower or any Subsidiary to undertake or to contribute to a cleanup or other
response under Environmental Regulations, or which seeks penalties, damages,
injunctive relief, or criminal sanctions related to alleged violations of such
laws, or which claims personal injury or property damage to any person as a
result of environmental factors or conditions or which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
10.2.8 REGULATORY AND OTHER NOTICES. Promptly after Borrower's
receipt thereof, copies of any notices or other communications received from
any Governmental Authority with respect to any matter or proceeding the effect
of which could reasonably be expected to have a Material Adverse Effect.
10.2.9 ADVERSE ACTION REGARDING REQUIRED LICENSES. As soon as
Borrower learns that any petition, action, investigation, notice of violation
or apparent liability, notice of forfeiture, order to show cause, complaint or
proceeding is pending, or, to the best of Borrower's knowledge, threatened, to
seek to revoke, cancel, suspend, modify, or limit any of the Required Licenses,
prompt written notice thereof and Borrower shall contest any such action in a
Good Faith Contest.
10.2.10 NOTICE OF CERTAIN CHANGES. Borrower shall: (a) notify the
Administrative Agent at least ten (10) Banking Days prior to the occurrence of
any change in the name or business form of Borrower; and (b) take all actions
necessary or reasonably requested by Agent in order to maintain the perfected
status of the first lien and security interest of Agent and the Syndication
Parties (subject only to Permitted Encumbrances) in the Collateral.
10.2.11 AVAILABLE AMOUNT REPORTS. If any Advance is made during
any Fiscal Quarter, then, no later than forty-five (45) days after the end of
such Fiscal Quarter, unless the outstanding principal balance owing under the
Facilities on any Advance Date (including the Advance requested for such date
in a Borrowing Notice) exceeds ninety percent (90%) of the Aggregate
Commitment, in which case an Available Amount Report effective as of the date
of such Borrowing Notice must accompany the Borrowing Notice (the appropriate
date in either case being the "AVAILABLE AMOUNT REPORT DEADLINE"), a report in
the form of EXHIBIT 10.2.11 attached hereto ("AVAILABLE AMOUNT REPORT")
effective as of the last day of such Fiscal Quarter or the date of such
Borrowing Notice, as applicable. Any time that, in connection with a Pari
Passu Loan, Borrower requests the Administrative Agent to execute an
Intercreditor Agreement, Borrower shall provide to the Administrative Agent an
endorsement to the Title Policy increasing the amount of insurance provided
thereby (or a new Title Policy in the full amount, including any such increase)
if the following two conditions have occurred: (a) the maximum amount
available under such Pari Passu Loan, together with the maximum amounts
available under all Pari Passu Loans entered into since the most recent
increase in the amount of the Title Policy, is equal to or greater than
$25,000,000.00, and (b) Borrower has since the most recent increase in the
amount of the Title Policy, provided to the Administrative Agent one or more
Available Amount Reports which, in the aggregate, reflect an increase in the
Appraised Value of the real estate (including any structures or other
improvements thereon, other than equipment) included in the Collateral in an
amount equal to or greater than $25,000,000.00. In the event an increase in
the amount of insurance available under the Title Policy is required pursuant
to the preceding sentence, the amount of such increase shall be the amount of
the aggregate increase in Appraised Value determined as provided in clause (b)
thereof; provided that in no event shall Borrower be required to increase the
amount of insurance provided under the Title Policy to the extent it would
result in the amount thereof being an amount in excess of (x) during the
Availability Period, the Aggregate Commitment, or (y) at any time after the end
of the Availability Period, the amount of Bank Debt owing. In the event the
parcel or parcels of real estate with respect to which there has been an
increase in Appraised Value are insured by separate Title Policies, the
increase in insured amount required above need only be provided with respect to
those Title Policies.
10.2.12 APPRAISALS. Borrower shall provide the Administrative
Agent with Appraisals covering all real property interests (fee and leasehold)
required to be included within the Collateral: (a) on the Closing Date; (b) on
each two year anniversary of the Closing Date, provided that if the Leverage
Ratio for the Fiscal Quarter immediately preceding (or ending on) such date is
less than fifty percent (50%), this requirement will be deferred on a Fiscal
Quarter basis so long as such ratio is maintained, provided further that,
unless otherwise agreed by the Required Lenders, any such deferrals shall be
for no more than 24 months, so that in any event an Appraisal will be required
no later than four years after the date the last previous Appraisal was
required; and (c) as may be required in connection with Pari Passu Loans as
provided herein.
10.2.13 FILINGS AND REPORTS. Promptly upon their becoming
available, copies of all registration statements and regular periodic reports,
if any, which Borrower shall have filed with the Securities and Exchange
Commission or any governmental agency substituted therefor, or any national
securities exchange, including copies of Borrower's form 10-K annual report,
form 10-Q quarterly report and any Form 8-K report filed with the Securities
and Exchange Commission.
10.2.14 ADDITIONAL INFORMATION. With reasonable promptness, such
other information respecting the condition or operations, financial or
otherwise, of Borrower or any Subsidiary as any Syndication Party may from time
to time reasonably request.
10.3 [THIS SECTION INTENTIONALLY OMITTED]
10.4 MAINTENANCE OF EXISTENCE AND QUALIFICATION. Borrower shall
maintain its corporate existence in good standing under the laws of its state
of organization. Borrower shall, and shall cause each Subsidiary to, qualify
and remain qualified as a foreign corporation or other entity in each
jurisdiction in which such qualification is necessary in view of its business,
operations and properties except where the failure to so qualify has not and
could not reasonably be expected to result in a Material Adverse Effect.
10.5 COMPLIANCE WITH LEGAL REQUIREMENTS AND AGREEMENTS. Borrower shall,
and shall cause each Subsidiary to: (a) comply with all laws, rules,
regulations and orders applicable to Borrower (or such Subsidiary, as
applicable) or its business unless such failure to comply is the subject of a
Good Faith Contest; and (b) comply with all agreements, indentures, mortgages,
and other instruments to which it (or any Subsidiary, as applicable) is a party
or by which it or any of its (or any Subsidiary, or any of such Subsidiary's,
as applicable) property is bound; provided, however, that the failure of
Borrower to comply with this sentence in any instance not directly involving
the Administrative Agent or a Syndication Party shall not constitute a
Potential Default or an Event of Default unless such failure would have a
Material Adverse Effect.
10.6 COMPLIANCE WITH ENVIRONMENTAL LAWS. Without limiting the
provisions of Section 10.5 of this Credit Agreement, Borrower shall, and shall
cause Subsidiary to, comply in all material respects with, and take all
reasonable steps necessary to cause all persons occupying or present on any
properties owned or leased by Borrower (or any Subsidiary, as applicable) to
comply with, all Environmental Regulations, the failure to comply with which
would have a Material Adverse Effect or unless such failure to comply is the
subject of a Good Faith Contest.
10.7 TAXES. Borrower shall cause to be paid, and shall cause each
Subsidiary to pay, when due all taxes, assessments, and other governmental
charges upon it, its income, its sales, its properties (or upon Subsidiary and
its income, sales, and properties, as applicable), and federal and state taxes
withheld from its (or Subsidiary's, as applicable) employees' earnings, unless
(a) the failure to pay such taxes, assessments, or other governmental charges
could not reasonably be expected to result in a Material Adverse Effect, or (b)
such taxes, assessments, or other governmental charges are the subject of a
Good Faith Contest.
10.8 INSURANCE. Borrower shall, and shall cause each Subsidiary to,
maintain insurance coverage by good and responsible insurance underwriters in
such forms and amounts and against such risks and hazards as are customary for
companies engaged in similar businesses and owing and operating similar
properties, provided that Borrower and its Subsidiaries may self-insure for
workmen's compensation, group health risks and their live chicken inventory in
accordance with applicable industry standards. In any event, Borrower will
insure any of the Collateral which is insurable against loss or damage by fire,
theft, burglary, pilferage and loss in transit. In addition, to the extent
that any real property interests which constitute a part of the Collateral lie
within a designated flood plain, Borrower must provide flood insurance with
respect to such real property interests. All such policies of insurance shall
be issued by sound and reputable insurers accorded a rating of A-XII or better
by A.M. Best Company or A or better by Standard & Poor's Corporation or Moody's
Investors Service, Inc. All liability policies shall name the Administrative
Agent, for the benefit of the Syndication Parties, as additional insured as its
interests may appear. All such insurance policies shall be endorsed with a
mortgagee's or loss payable clause, as appropriate, in favor of the
Administrative Agent, for the benefit of the Syndication Parties. Copies of
the policy or policies evidencing all insurance referred to in this Section and
receipts for the payment of premiums thereon or certificates of such insurance
satisfactory to the Administrative Agent shall be delivered to and held by the
Administrative Agent. All such insurance policies shall contain a provision
requiring at least ten (10) days' notice to the Administrative Agent prior to
any cancellation for non-payment of premiums. Borrower shall give the
Administrative Agent satisfactory written evidence of renewal or substitution
of all such policies. Borrower agrees to pay, or cause to be paid, all
premiums on such insurance as they become due, and will not permit any
condition to exist on or with respect to its assets which would wholly or
partially invalidate any insurance thereon. Borrower shall give immediate
written notice to the insurance carrier and the Administrative Agent of any
loss. Borrower hereby authorizes and empowers the Administrative Agent upon
the occurrence and during the continuation of an Event of Default, at the
Administrative Agent's option and in the Administrative Agent's sole
discretion, to, in so far as affects the Collateral, act as attorney-in-fact
for Borrower to make proof of loss, to adjust and compromise any claim under
insurance policies, to collect and receive insurance proceeds, and to deduct
therefrom the Administrative Agent's expenses incurred in the collection of
such proceeds, and all insurance policies of Borrower shall provide that the
Administrative Agent may act as Borrower's attorney-in-fact for such purposes.
10.9 TITLE TO AND MAINTENANCE OF PROPERTIES. Borrower shall defend and
maintain title to, and shall maintain, keep and preserve, and cause each
Subsidiary to maintain, keep and preserve, all of its material properties
(tangible and intangible) necessary or used in the proper conduct of its
business in good working order and condition, ordinary wear and tear excepted,
and shall cause to be made all repairs, renewals, replacements, betterments and
improvements thereof, all as in the sole judgment of Borrower or such
Subsidiary may be reasonably necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times.
10.10 PAYMENT OF LIABILITIES. Borrower shall pay, and shall cause its
Subsidiaries to pay, all liabilities (including, without limitation: (a) any
indebtedness for borrowed money or for the deferred purchase price of property
or services; (b) any obligations under leases which have or should have been
characterized as Capitalized Leases; and (c) any contingent liabilities, such
as guaranties, for the obligations of others relating to indebtedness for
borrowed money or for the deferred purchase price of property or services or
relating to obligations under leases which have or should have been
characterized as Capitalized Leases) as they become due beyond any period of
grace under the instrument creating such liabilities, unless (with the
exception of the Bank Debt and Pari Passu Loans) (y) the failure to pay such
liabilities within such time period could not reasonably be expected to result
in a Material Adverse Effect, or (z) they are the subject of a Good Faith
Contest.
10.11 INSPECTION. Borrower (a) shall permit, and cause its Subsidiaries
to permit, the Administrative Agent or any Syndication Party or their agents,
during normal business hours or at such other times as the parties may agree,
to examine, and make copies of or abstracts from, Borrower's properties, books,
and records, and to discuss Borrower's affairs, finances, operations, and
accounts with its respective officers, directors, employees, and independent
certified public accountants; and (b) shall permit the Administrative Agent to
obtain periodic verification of the existence and condition, of the Collateral
and Borrower shall reimburse the Administrative Agent for the reasonable costs
incurred in connection with such verification, provided that so long as no
Event of Default has occurred and is continuing, Borrower shall not be required
to reimburse the Administrative Agent for costs incurred under this clause (b)
with respect to more than one such verification in each Fiscal Year.
10.12 REQUIRED LICENSES; PERMITS; ETC. Borrower shall duly and lawfully
obtain and maintain in full force and effect, and shall cause its Subsidiaries
to obtain and maintain in full force and effect, all Required Licenses as
appropriate for the business being conducted and properties owned by Borrower
or such Subsidiaries at any given time except where the failure to obtain or
maintain such Required Licenses could not reasonably be expected to result in a
Material Adverse Effect.
10.13 ERISA. Borrower shall: (a) cause Borrower's Benefit Plans to
comply in all material respects with the Code and ERISA; (b) cause any Borrower
Benefit Plan that is intended to satisfy the requirements of Section 401(a) of
the Code to satisfy such requirements in all material respects; (c) prepare and
deliver each material report, statement or other document required by ERISA and
the Code within the period specified therein and conforming in form and
substance in all material respects to the provisions thereof; and (d) cause
Borrower Benefit Plans (other than a Multiemployer Plan) to be administered in
all material respects in accordance with the terms of each such plan and with
ERISA, the Code, and any other applicable law, except to the extent any failure
to comply with the preceding clauses (a), (b) (c), or (d) would not have a
Material Adverse Effect. Within ten (10) Banking Days after receiving such
notice, Borrower shall furnish to Administrative Agent any written notice
received by Borrower relating to an assertion of withdrawal liability imposed
by any Multiemployer Plan upon Borrower or Borrower's controlled group, as
defined in Code Section 414(b), (c), (m), or (o), or relating to any violation
of the provisions of the Code or ERISA asserted by the Department of Labor, the
Pension Benefit Guaranty Corporation or the Department of the Treasury with
respect to any Borrower Benefit Plan that could reasonably be expected to have
a Material Adverse Effect. Borrower shall notify the Administrative Agent
within sixty (60) days after: (l) commencing participation in any "multiple
employer plan" within the meaning of Section 413 of the Code; (m) commencing
PARTICIPATION IN A "MULTIPLE EMPLOYER WELFARE ARRANGEMENT" WITHIN THE MEANING
OF SECTION 3(40) OF ERISA; OR (N) ESTABLISHING OR BECOMING OBLIGATED TO
CONTRIBUTE TO ANY EMPLOYEE "RETIREE HEALTH PLAN" WITHIN THE MEANING OF SECTION
3(1) OF ERISA FOR THE BENEFIT OF RETIRED OR FORMER EMPLOYEES (OTHER THAN AS
REQUIRED BY SECTION 4980B OF THE CODE AND SECTIONS 601 THROUGH 608 OF ERISA
("COBRA") OR OTHER APPLICABLE LAW). Borrower shall notify the Administrative
Agent within sixty (60) days after Borrower has knowledge of the occurrence of
any fact or event which would make any of the representations contained in
Subsections 8.10.2, 8.10.4, 8.10.6, or 8.10.10 hereof incorrect if such
representations were made as of the date of such occurrence WITH RESPECT TO ANY
BORROWER BENEFIT PLAN THAT IS A MULTIEMPLOYER PLAN.
10.14 FINANCIAL COVENANTS. Borrower shall maintain the following
financial covenants, measured on the consolidated results of Borrower and its
Subsidiaries:
10.14.1 LEVERAGE RATIO. A Leverage Ratio of not in excess of 0.625
at any time.
10.14.2 TANGIBLE NET WORTH. Tangible Net Worth at all times during
the periods specified below in an amount not less than the minimum required
amount for each such period set forth below:
(a) from the Closing Date through the next to last day of the Fiscal Year
ending in calendar year 2000, not less than $181,000,000.00; and
(b) on the last day of the Fiscal Year ending in calendar year 2000, not
less than $181,000,000.00 plus an amount equal to (i) 75% of Consolidated Net
Income (but not less than zero) during such Fiscal Year if the Leverage Ratio
for such Fiscal Year is equal to or greater than 0.5 to 1.00 or (ii) 50% of
Consolidated Net Income (but not less than zero) during such Fiscal Year if the
Leverage Ratio for such Fiscal Year is less than 0.5 to 1.00
(c) at all times from the first day of the Fiscal Year commencing in
calendar year 2000 and during each day of each Fiscal Year thereafter, an
amount equal to the minimum amount required to be maintained during the
preceding Fiscal Year plus an amount equal to (i) 75% of Consolidated Net
Income (but not less than zero) during such Fiscal Year if the Leverage Ratio
for such Fiscal Year is equal to or greater than 0.5 to 1.00 or (ii) 50% of
Consolidated Net Income (but not less than zero) during such Fiscal Year if the
Leverage Ratio for such Fiscal Year is less than 0.5 to 1.00.
10.14.3 CURRENT RATIO A Current Ratio measured as of the last day
of each Fiscal Quarter of not less than 1.35 to 1.00.
10.14.4 NET TANGIBLE ASSETS TO TOTAL LIABILITIES. A ratio of Net
Tangible Assets to Total Liabilities measured as of the last day of each Fiscal
Quarter of not less than 1.30 to 1.00.
10.14.5 FIXED CHARGE COVERAGE RATIO. The Fixed Charge Coverage
Ratio over the most recent eight consecutive Fiscal Quarters, measured as of
the last day of each Fiscal Quarter, of not less than 1.50 to 1.00.
10.14.6 NET WORKING CAPITAL. Net Working Capital, measured as of
the last day of each Fiscal Quarter, of not less than $55,000,000.00.
10.15 YEAR 2000 COMPLIANCE AND REPORTS. Borrower agrees: (a) to cause
all of the Significant Software of Borrower and each Subsidiary to be Year 2000
Compliant no later than December 1, 1999; (b) require all Third Party Providers
of Significant Software to provide to Borrower, no later than December 1, 1999,
reasonable assurance that such software is Year 2000 Compliant; (c) to request
from all key third party suppliers of Borrower and each Subsidiary which are,
to Borrower's knowledge, dependent upon software in the conduct of their
business such that the failure of such software to be Year 2000 Compliant could
reasonably be expected to have a material adverse effect on the business
condition (financial or otherwise) of Borrower and/or each Subsidiary or the
operation of the business of Borrower and/or each Subsidiary, or Borrower's
ability to perform its obligations under this Credit Agreement, to provide to
Borrower, no later than December 1, 1999, reasonable assurance that such
software is Year 2000 Compliant; and (d) to provide to the Administrative
Agent, no later than December 1, 1999, the written certification of Borrower's
Chief Financial Officer, or other corporate officer satisfactory to the
Administrative Agent, that all of Borrower's Significant Software has been
tested and is Year 2000 Compliant except, in each case, where the failure to be
Year 2000 Compliant could not reasonably be expected to result in a Material
Adverse Effect.
10.16 APPRAISED PROPERTY. No Available Amount Report will be based in
any part on the Appraised Value of any real property, or improvements,
fixtures, machinery or equipment located on any real property, not, in either
case, described in the deeds of trust executed, on or prior to the date of such
Available Amount Report, by Borrower in connection with this Credit Agreement.
ARTICLE 11. NEGATIVE COVENANTS
From and after the date of this Credit Agreement until the Bank Debt is
indefeasibly paid in full, and the Syndication Parties have no obligation to
make any Advance, Borrower agrees that it will observe and comply with, and, to
the extent applicable, will cause its Subsidiaries to observe and comply with,
the following covenants:
11.1 BORROWING. Borrower shall not (nor shall it permit any of its
Subsidiaries to) create, incur, or assume, directly or indirectly, any Debt,
except for:
(a) indebtedness of Borrower arising under this Credit Agreement and the
other Loan Documents;
(b) trade payables arising in the ordinary course of business;
(c) Capital Leases in existence from time to time;
(d) current operating liabilities (other than trade payables or for
borrowed money) incurred in the ordinary course of business;
(e) the Pari Passu Loans;
(f) secured Debt (other than Bank Debt and the Pari Passu Loans) in an
aggregate amount at any time outstanding of up to the sum of (i) eighty-five
percent (85%) of the book value of the outstanding accounts receivable of
Borrower and its Subsidiaries (as such account receivable would be shown on a
consolidated balance sheet of Borrower and its Subsidiaries prepared in
accordance with GAAP), less allowance for doubtful accounts, PLUS (ii) seventy-
five percent (75%) of the higher of book value or fair market value, determined
in accordance with GAAP, of the assets of Borrower and its Subsidiaries, but
excluding from such calculation under this clause (ii), the assets covered by
clause (i), the Collateral, and good will, MINUS (iii) amounts owing under the
Harris Loan and under the Hancock Loan;
(g) unsecured Debt in any amount provided that no more than
$50,000,000.00 of unsecured indebtedness outstanding at any time (but excluding
from such restriction, the Comerica Loan) may provide for scheduled principal
payments prior to November 2, 2009, and provided that with respect to
individual indebtedness of greater than $10,000,000.00 incurred after the
Closing Date, pro forma covenant compliance must be established to the
Administrative Agent before such indebtedness is incurred;
(h) loans between Subsidiaries or between Borrower and Subsidiaries, in
each case in the ordinary course and pursuant to the reasonable requirements of
Borrower's business and consistent with demonstratable past practices; provided
that any such loans to Borrower are expressly subordinated to the prior payment
in full in cash of all of Borrower's indebtedness, obligations and liabilities
to the Administrative Agent and the Syndication Parties under this Credit
Agreement and the other Loan Documents; and
(i) the incurrence by Borrower of Debt to Harris Trust and Savings Bank
pursuant to the Reimbursement Agreement dated June 15, 1999 between Borrower
and Harris Trust and Savings Bank, or under an irrevocable letter of credit,
surety bond, insurance policy or other similar instrument issued by any Person
to support Borrower's obligations pursuant to that certain Loan Agreement dated
as of June 15, 1999, between Borrower and the Camp County Industrial
Development Corporation or in connection with the related bonds issued by the
Camp County Industrial Development Corporation (and reimbursement and similar
agreements in respect thereof).
11.2 NO OTHER BUSINESSES. Borrower shall not, and shall not permit its
Subsidiaries to, engage in any material respects in any business activity or
operations other than operations or activities (a) in the poultry industry, (b)
in the processing, packaging, distribution, and wholesale sales of poultry
products, or (c) which are not substantially different from or are related to
its present business activities or operations.
11.3 LIENS. Borrower shall not (nor shall it permit any of its
Subsidiaries to) create, incur, assume or suffer to exist any mortgage, pledge,
lien, charge or other encumbrance on, or any security interest in, any of its
real or personal properties (including, without limitation, leasehold
interests, leasehold improvements and any other interest in real property or
fixtures), now owned or hereafter acquired, except the following ("PERMITTED
ENCUMBRANCES"):
(a) Liens for taxes or assessments or other charges or levies of any
Governmental Authority, that are not delinquent or if delinquent are the
subject of a Good Faith Contest;
(b) Liens imposed by law, such as mechanic's, worker's, repairman's,
miner's, agister's, attorney's, materialmen's, landlord's, warehousemen's and
carrier's Liens and other similar Liens which are securing obligations incurred
in the ordinary course of business for sums not yet due and payable or, if due
and payable, which (i) do not exceed an aggregate at any one time of
$10,000,000.00 or (ii) are the subject of a Good Faith Contest;
(c) Liens under workers' compensation, unemployment insurance, social
security or similar legislation (other than ERISA), or to secure payments of
premiums for insurance purchased in the ordinary course of business, or to
secure the performance of tenders, statutory obligations, surety and appearance
bonds and bids, bonds for release of an attachment, stay of execution or
injunction, leases, government contracts, performance and return-of-money bonds
and other similar obligations, all of which are incurred in the ordinary course
of business and not in connection with the borrowing of money;
(d) Any attachment or judgment Lien, the time for appeal or petition for
rehearing of which shall not have expired or in respect of which Borrower or
the Subsidiary is protected in all material respects by insurance or for the
payment of which adequate reserves have been provided, provided that the
execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are the subject of a Good Faith Contest, and provided
further that the aggregate amount of liabilities of Borrower and its
Subsidiaries so secured (including interest and penalties) shall not be in
excess of $5,000,000 at any one time outstanding;
(e) Easements, rights-of-way, restrictions, encroachments, covenants,
servitudes, zoning and other similar encumbrances which, in the aggregate, do
not materially interfere with the occupation, use and enjoyment by Borrower or
any Subsidiary of the property or assets encumbered thereby in the normal
course of its business or materially impair the value of the property subject
thereto;
(f) All precautionary filings of financing statements under the Uniform
Commercial Code which cover property that is made available to or used by
Borrower or any Subsidiary pursuant to the terms of an Operating Lease or
Capital Lease;
(g) Liens, other than on the Collateral, securing its reimbursement
obligations under any letter of credit issued in connection with the
acquisition of an asset; provided that (i) the lien attaches only to such
asset, and (ii) the lien is released upon satisfaction of such reimbursement
obligation;
(h) Liens on the Collateral in connection with any permitted Pari Passu
Loan;
(i) Liens on assets of Borrower or its Subsidiaries, other than on the
Collateral, to secure indebtedness permitted under Sections 11.1(f) and
11.1(i); and
(j) Liens existing on the Closing Date and described on EXHIBIT 11.3
hereto (as such Exhibit may be approved by the Administrative Agent).
11.4 SALE OF ASSETS. Borrower shall not (nor shall it permit any of its
Subsidiaries to) sell, convey, assign, lease or otherwise transfer or dispose
of, voluntarily, by operation of law or otherwise, any of the Collateral except
the sale of assets disposed of in the ordinary course of business, and which
are either replaced or are no longer necessary or useful for the business
conducted at the facilities which are included within the Collateral.
11.5 LIABILITIES OF OTHERS. Borrower shall not (nor shall it permit any
of its Subsidiaries to) assume, guarantee, become liable as a surety, endorse,
contingently agree to purchase, or otherwise be or become liable, directly or
indirectly (including, but not limited to, by means of a maintenance agreement,
or any other agreement designed to ensure any creditor against loss), for or on
account of the obligation of any Person, except (a) by the endorsement of
negotiable instruments for deposit or collection or similar transactions in the
ordinary course of the Borrower's or any Subsidiary's business, (b) the
guarantee of the obligations of Borrower's wholly owned Subsidiaries, (c)
guarantees by any Subsidiary of the indebtedness of Borrower under the Senior
Notes; provided that each such Subsidiary also executes a guaranty reasonably
satisfactory in form and substance to the Administrative Agent guaranteeing all
of Borrower's obligations under this Credit Agreement, the Notes, and all other
Loan Documents; and (d) without duplication of clauses (b) or (c), guarantees
made from time to time by Borrower and its Subsidiaries in the ordinary course
of their respective businesses; provided, however, that the aggregate amount of
all indebtedness guaranteed at any time under this clause (d) shall not exceed
$10,000,000 in the aggregate.
11.6 LOANS. Borrower shall not (nor shall it permit any of its
Subsidiaries to) lend or advance money, credit, or property to any Person,
except for:
(a) loans between Subsidiaries or between Borrower and Subsidiaries, in
each case in the ordinary course and pursuant to the reasonable requirements of
Borrower's business and consistent with demonstratable past practices;
(b) trade credit extended in the ordinary course of business;
(C) LOANS AND ADVANCES TO EMPLOYEES AND CONTRACT GROWERS (OTHER THAN
EXECUTIVE OFFICERS AND DIRECTORS OF THE BORROWER OR ITS SUBSIDIARIES) FOR
REASONABLE EXPENSES INCURRED IN THE ORDINARY COURSE OF BUSINESS AND MADE ON AN
ARMS LENGTH BASIS; AND
(d) loans and advances to officers and employees of Borrower and its
Subsidiaries made in connection with such officer's or employee's housing
related expenses or loans associated with the procurement or sale of personal
residences or necessary for the moving of key personnel, in an aggregate amount
outstanding at any time not to exceed $3,000,000.00.
11.7 MERGER; ACQUISITIONS; BUSINESS FORM; ETC. Borrower shall not (nor
shall it permit any of its Subsidiaries to) merge or consolidate with any
entity, or acquire all or substantially all of the assets of any person or
entity, nor shall Borrower change its business form from a corporation;
provided, however, that the foregoing shall not prevent any such acquisition,
consolidation, or merger if after giving effect thereto either clauses (a), (c)
and (d) are satisfied or clauses (b), (c), and (d) are satisfied, as such
clauses are set forth below:
(a) Both (i) the fair market value of all consideration paid or payable
(whether paid or payable in money, stock, or some other form, including,
without limitation, by promissory note or some other installment obligation) by
Borrower and/or its Subsidiaries on account of all such mergers, consolidations
or acquisitions does not exceed $50,000,000.00 in any Fiscal Year of Borrower,
and (ii) Borrower (or, if the consolidation or merger is by a Subsidiary, then
the Subsidiary) is the surviving entity;
(b) The consolidation or merger is between Borrower and a Subsidiary or
subsidiary of a Subsidiary, and Borrower is the surviving entity, or the
consolidation or merger is between a Subsidiary and another Subsidiary or a
Subsidiary and the subsidiary of a Subsidiary, and the Subsidiary is the
surviving entity;
(c) No Event of Default or Potential Default shall have occurred and be
continuing;
(d) After giving effect to the merger or consolidation on a pro forma
basis, there would be no Event of Default or Potential Default.
11.8 INVESTMENTS. Borrower shall not (nor shall it permit any of its
Subsidiaries to) own, purchase or acquire any stock, obligations or securities
of, or any other interest in, or make any capital contribution to, any Person,
except that Borrower and the Subsidiaries may own, purchase or acquire:
(a) commercial paper maturing not in excess of one year from the date of
acquisition and rated P1 by Moody's Investors Service, Inc. or A1 by Standard
& Poor's Corporation on the date of acquisition;
(b) certificates of deposit in North American commercial banks rated C or
better by Keefe, Bruyette & Woods, Inc. or 3 or better by Cates Consulting
Analysts, maturing not in excess of one year from the date of acquisition;
(c) obligations of the United States government or any agency thereof,
the obligations of which are guaranteed by the United States government,
maturing, in each case, not in excess of one year from the date of acquisition;
(d) repurchase agreements of any bank or trust company incorporated under
the laws of the United States of America or any state thereof and fully secured
by a pledge of obligations issued or fully and unconditionally guaranteed by
the United States government;
(e) Investments permitted under Sections 11.5, 11.6, 11.7, and 11.9;
(f) Investments made prior to the Closing Date in Persons, which are not
Subsidiaries, identified on EXHIBIT 11.8 hereto;
(g) Investments in the Subsidiaries; and
(h) Investments not covered by clauses (a) through (g) above, in an
amount not to exceed at any time an aggregate of $25,000,000.00.
11.9 TRANSACTIONS WITH RELATED PARTIES. Borrower shall not purchase,
acquire, provide, or sell any equipment, other personal property, real property
or services from or to any Subsidiary, except in the ordinary course and
pursuant to the reasonable requirements of Borrower's business and consistent
with demonstratable past practices of the type disclosed in Borrower's proxy
statement for its Fiscal Year ended September 1998.
11.10 DIVIDENDS, ETC. Borrower shall not, directly or indirectly,
declare or pay any dividends (other than dividends payable solely in stock of
Borrower) on account of any shares of any class (including common or preferred
stock) of its capital stock now or hereafter outstanding, or set aside or
otherwise deposit or invest any sums for such purpose, or redeem, retire,
defease, purchase or otherwise acquire any shares of any class of its capital
stock (or set aside or otherwise deposit or invest any sums for such purpose)
for any consideration other than common stock or apply or set apart any sum, or
make any other distribution (by reduction or capital or otherwise) in respect
of any such shares or agree to do any of the foregoing; provided that if no
Potential Default or Event of Default shall exist before and after giving
effect thereto, Borrower may (a) pay dividends in an aggregate amount not to
exceed $3,400,000.00 in any Fiscal Year; (b) pay dividends permitted under
clause (a) hereof during the immediately preceding Fiscal Year that were
declared but not paid in the immediately preceding Fiscal Year (without giving
effect to any carry over); and (c) repurchase its shares of capital stock in an
amount not to exceed $25,000,000.00 in the aggregate.
11.11 ERISA. Borrower shall not: (a) engage in or permit any
transaction which could result in a "prohibited transaction" (as such term is
defined in Section 406 of ERISA) or in the imposition of an excise tax pursuant
to Section 4975 of the Code; (b) engage in or permit any transaction or other
event which could result in a "reportable event" as such term is defined in
Section 4043 of ERISA for any Borrower Pension Plan; (c) fail to make full
payment when due of all amounts which, under the provisions of any Borrower
Benefit Plan, Borrower is required to pay as contributions thereto; (d) permit
to exist any "accumulated funding deficiency" (as such term is defined in
Section 302 of ERISA) in excess of $25,000.00, whether or not waived, with
respect to any Borrower Pension Plan; (e) fail to make any payments to any
"multiemployer plan" that Borrower may be required to make under any agreement
relating to such "multiemployer plan" or any law pertaining thereto; or
(f) terminate any Borrower Pension Plan in a manner which could result in the
imposition of a lien on any property of Borrower pursuant to Section 4068 of
ERISA. Borrower shall not terminate any Borrower Pension Plan so as to result
in any liability to the Pension Benefit Guaranty Corporation. As used in this
Section, all terms enclosed in quotation marks shall have the meanings set
forth in ERISA. Borrower's failure to comply with any of the foregoing
provisions of this Section shall not constitute a breach of this Agreement or
an Event of Default unless such failure has a Material Adverse Effect.
11.12 CHANGE IN FISCAL YEAR. Borrower shall not change its Fiscal Year
unless required to do so by the Internal Revenue Service, in which case
Borrower agrees to such amendment of the terms Fiscal Quarter and Fiscal Year,
as used herein, as the Administrative Agent reasonably deems necessary.
11.13 LEASES. Borrower shall not, and shall not permit any Subsidiary
to, incur non-cancelable obligations on Operating Leases or sale and leaseback
transactions if the aggregate annual amount of all minimum or guaranteed net
rentals payable under such leases would exceed four percent (4%) of the Net
Tangible Assets of Borrower and its Consolidated Subsidiaries (as determined
immediately preceding the execution of such lease).
11.14 PRINCIPAL PAYMENTS. Borrower shall not make any principal payments
on any subordinated or unsecured debt instruments or related documents unless
and until 105 days have passed since November 2, 2009 without a voluntary or
involuntary petition having been filed against Borrower under the federal
bankruptcy laws during that period, other than (a) payments under debt
instruments between and among Borrower and its Subsidiaries, (b) scheduled
payments on its 10 7/8% Senior Subordinated Notes Due 2003 ("10 7/8% NOTES"),
(c) payments on its 10 7/8% Notes with the proceeds of the issuance of new
unsecured senior notes regardless of amount ("SENIOR NOTES"), (d) prepayments
required on account of asset sales, change of control, or similar events, (e)
repayment of the Comerica Loan, and (f) payments of up to $50,000,000.00 as
permitted by Section 11.1(g) hereof.
Article 12. INDEMNIFICATION
12.1 General; Stamp Taxes; Intangibles Tax. Borrower agrees to
indemnify and hold the Administrative Agent and each Syndication Party and
their directors, officers, employees, agents, professional advisers and
representatives ("INDEMNIFIED PARTIES") harmless from and against any and all
claims, damages, losses, liabilities, costs or expenses whatsoever which the
Administrative Agent or any other Indemnified Party may incur (or which may be
claimed against any such Indemnified Party by any Person), including attorneys'
fees incurred by any Indemnified Party, arising out of or resulting from: (a)
the material inaccuracy of any representation or warranty of or with respect to
Borrower in this Credit Agreement or the other Loan Documents; (b) the material
failure of Borrower to perform or comply with any covenant or obligation of
Borrower under this Credit Agreement or the other Loan Documents; or (c) the
exercise by the Administrative Agent of any right or remedy set forth in this
Credit Agreement or the other Loan Documents, provided that Borrower shall have
no obligation to indemnify any Indemnified Party against claims, damages,
losses, liabilities, costs or expenses to the extent that a court of competent
jurisdiction renders a final non-appealable determination that the foregoing
are solely the result of the willful misconduct or gross negligence of such
Indemnified Party. In addition, Borrower agrees to indemnify and hold the
Indemnified Parties harmless from and against any and all claims, damages,
losses, liabilities, costs or expenses whatsoever which the Administrative
Agent or any other Indemnified Party may incur (or which may be claimed against
any such Indemnified Party by any Person), including attorneys' fees incurred
by any Indemnified Party, arising out of or resulting from the imposition or
nonpayment by Borrower of any stamp tax, intangibles tax, or similar tax
imposed by any state, including any amounts owing by virtue of the assertion
that the property valuation used to calculate any such tax was understated.
Borrower shall have the right to assume the defense of any claim as would give
rise to Borrower's indemnification obligation under this Section with counsel
of Borrower's choosing so long as such defense is being diligently and properly
conducted and Borrower shall establish to the Indemnified Party's satisfaction
that the amount of such claims are not, and will not be, material in comparison
to the liquid and unrestricted assets of Borrower available to respond to any
award which may be granted on account of such claim. So long as the conditions
of the preceding sentence are met, Indemnified Party shall have no further
right to reimbursement of attorneys' fees incurred thereafter. The obligation
to indemnify set forth in this Section shall survive the termination of this
Credit Agreement and other covenants.
12.2 INDEMNIFICATION RELATING TO HAZARDOUS SUBSTANCES. Borrower shall
not, and shall cause the Subsidiaries not to, locate, produce, treat,
transport, incorporate, discharge, emit, release, deposit or dispose of any
Hazardous Substance in, upon, under, over or from any property owned or held by
Borrower or such Subsidiary, except in accordance with all Environmental
Regulations; Borrower shall not, and shall cause the Subsidiaries not to,
permit any Hazardous Substance to be located, produced, treated, transported,
incorporated, discharged, emitted, released, deposited, disposed of or to
escape in, upon, under, over or from any property owned or held by Borrower or
such Subsidiary, except in accordance with Environmental Regulations; and
Borrower shall, and shall cause each Subsidiary to, comply with all
Environmental Regulations which are applicable to such property except where
the failure to comply could not reasonably be expected to result in a Material
Adverse Effect. Borrower shall indemnify the Indemnified Parties against, and
shall reimburse the Indemnified Parties for, any and all claims, demands,
judgments, penalties, liabilities, costs, damages and expenses, including court
costs and attorneys' fees incurred by the Indemnified Parties (prior to trial,
at trial and on appeal) in any action against or involving the Indemnified
Parties, resulting from any breach of the foregoing covenants in this Section
or the covenants in Section 10.6 hereof, or from the discovery of any Hazardous
Substance in, upon, under or over, or emanating from, such property, it being
the intent of Borrower and the Indemnified Parties that the Indemnified Parties
shall have no liability or responsibility for damage or injury to human health,
the environmental or natural resources caused by, for abatement and/or clean-up
of, or otherwise with respect to, Hazardous Substances as the result of the
Administrative Agent or any Syndication Party exercising any of its rights or
remedies with respect thereto, including but not limited to becoming the owner
thereof by foreclosure, including foreclosure on a judgment lien, or conveyance
in lieu of foreclosure; PROVIDED that such indemnification as it applies to the
exercise by the Administrative Agent or any Syndication Party of its rights or
remedies with respect to the Loan Documents shall not apply to claims arising
solely with respect to Hazardous Substances brought onto such property by the
Administrative Agent or such Syndication Party while engaged in activities
other than operations substantially the same as the operations previously
conducted on such property by Borrower. The foregoing covenants of this
Section shall be deemed continuing covenants for the benefit of the Indemnified
Parties, and any successors and assigns of the Indemnified Parties, including
but not limited to, any transferee of the title of the Administrative Agent or
any Syndication Party or any subsequent owner of the property, and shall
survive the satisfaction or release of any lien, any foreclosure of any lien
and/or any acquisition of title to the property or any part thereof by the
Administrative Agent or any Syndication Party, or anyone claiming by, through
or under the Administrative Agent or any Syndication Party or Borrower by deed
in lieu of foreclosure or otherwise. Any amounts covered by the foregoing
indemnification shall bear interest from the date incurred at the Default
Interest Rate, shall be payable on demand, and shall be secured by the Security
Documents. The indemnification and covenants of this Section shall survive the
termination of this Credit Agreement and other covenants.
Article 13. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
13.1 Events of Default. The occurrence of any of the following events
(each an "EVENT OF DEFAULT") shall, at the option of the Administrative Agent,
make the entire Bank Debt immediately due and payable (provided, that in the
case of an Event of Default under Subsection 13.1(f) all amounts owing under
the Notes and the other Loan Documents shall automatically and immediately
become due and payable without any action by or on behalf of the Administrative
Agent), and the Administrative Agent may exercise all rights and remedies for
the collection of any amounts outstanding hereunder and take whatever action it
deems necessary to secure itself, all without notice of default, presentment or
demand for payment, protest or notice of nonpayment or dishonor, or other
notices or demands of any kind or character:
(a) Failure of Borrower to pay (i) when due, whether by acceleration or
otherwise, any principal in accordance with this Credit Agreement or the other
Loan Documents, or (ii) within five (5) Banking Days of the date when due,
whether by acceleration or otherwise, any interest or amounts other than
principal in accordance with this Credit Agreement or the other Loan Documents.
(b) Any representation or warranty set forth in any Loan Document, any
Borrowing Notice, any financial statements or reports, or in connection with
any transaction contemplated by any such document, shall prove in any material
respect to have been false or misleading when made or furnished by Borrower.
(c) Any default by Borrower in the performance or compliance with the
covenants, promises, conditions or provisions of Sections 10.11, 11.1, 11.3,
11.4, 11.5, 11.7, 11.10, 11.13, or 11.14 of this Credit Agreement.
(d) Any default by Borrower in the performance or compliance with the
covenants, promises, conditions or provisions of Sections 10.2, 10.3, 10.5,
10.6, 10.7, 10.8, 10.9, 10.10, (except as provided in Section 13.1(f)), 10.12,
10.13, 10.14, 10.15, 11.6, 11.8, 11.9, 11.11, or 11.12 of this Credit
Agreement, and such failure continues for fifteen (15) days after Borrower
learns of such failure to comply, whether by Borrower's own discovery or
through notice from the Administrative Agent.
(e) Failure of Borrower to comply with any other provision of this Credit
Agreement or the other Loan Documents not constituting an Event of Default
under any of the preceding subparagraphs of this Section 13.1, and such failure
continues for thirty (30) days after Borrower learns of such failure to comply,
whether by Borrower's own discovery or through notice from the Administrative
Agent.
(f) The failure of Borrower to pay when due, or failure to perform or
observe any other obligation or condition with respect to any of the following
obligations to any Person, beyond any period of grace under the instrument
creating such obligation: (i) any indebtedness for borrowed money or for the
deferred purchase price of property or services, (ii) any obligations under
leases which have or should have been characterized as Capital Leases, or
(iii) any contingent liabilities, such as guaranties and letters of credit, for
the obligations of others relating to indebtedness for borrowed money or for
the deferred purchase price of property or services or relating to obligations
under leases which have or should have been characterized as Capital Leases;
provided that no such failure will be deemed to be an Event of Default
hereunder unless the amount owing under the obligation with respect to which
such failures have occurred and are continuing is at least $10,000,000.00, or
unless it is with respect to a Pari Passu Loan.
(g) Borrower, Guarantor, or any Subsidiary applies for or consents to the
appointment of a trustee or receiver for any part of its properties; any
bankruptcy, reorganization, debt arrangement, dissolution or liquidation
proceeding is commenced or consented to by Borrower, Guarantor, or any
Subsidiary; or any application for appointment of a receiver or a trustee, or
any proceeding for bankruptcy, reorganization, debt management or liquidation
is filed for or commenced against Borrower, Guarantor, or any Subsidiary, and
is not withdrawn or dismissed within ninety (90) days thereafter; provided that
no such consent or filing by or against a Subsidiary shall constitute an Event
of Default under this clause (g) unless it could reasonably be expected to
result in a Material Adverse Effect.
(h) The entry of one or more judgments in an aggregate amount in excess
of $10,000,000.00 against Borrower not stayed, discharged or paid within thirty
(30) days after entry.
(i) In the event (i) Guarantor, Lonnie A. "Bo" Pilgrim, his spouse, his
issue, his estate and/or any trust, partnership, or other entity, primarily for
the benefit of his spouse and/or issue shall (A) cease to own more than fifty
percent (50%) of the total voting power generally entitled to vote in the
election of directors, managers or trustees of Borrower or (B) cease to own
more than fifty percent (50%) of all non-voting classes of capital stock of
Borrower, (ii) during any period of two (2) consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of Borrower
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the stockholders of Borrower was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of Borrower then if office, or (iii) the
stockholders of Borrower shall approve any plan for the liquidation or
dissolution of Borrower.
13.2 NO ADVANCE. The Syndication Parties shall have no obligation to
make any Advance if a Potential Default or an Event of Default shall occur and
be continuing.
13.3 RIGHTS AND REMEDIES. In addition to the remedies set forth in
Section 13.1 and 13.2 hereof, upon the occurrence of an Event of Default, the
Administrative Agent shall be entitled to exercise all the rights and remedies
provided in the Loan Documents and by any applicable law. Each and every right
or remedy granted to the Administrative Agent pursuant to this Credit Agreement
and the other Loan Documents, or allowed the Administrative Agent by law or
equity, shall be cumulative. Failure or delay on the part of the
Administrative Agent to exercise any such right or remedy shall not operate as
a waiver thereof. Any single or partial exercise by the Administrative Agent
of any such right or remedy shall not preclude any future exercise thereof or
the exercise of any other right or remedy.
13.4 AGREEMENT REGARDING, AND WAIVER OF, CERTAIN RIGHTS. Borrower
acknowledges and agrees as follows: (a) no part of the Agricultural Credit Act
of 1987, including, without limitation, those sections thereof designated as 12
U.S.C. Sections 2199 through 2202e, and the implementing Farm Credit
Administration regulations (collectively "FARM CREDIT LAW") applies to CoBank
or to any Syndication Parties which are commercial banks, nor to the collection
of any funds Advanced by any of them hereunder and that Borrower will not at
any time attempt to assert against CoBank or any such Syndication Parties any
rights or obligations contained in or arising out of the Farm Credit Law; (b)
in the event it is ever determined that the Farm Credit Law applies to any
funds Advanced by FCSA hereunder or to the collection of any such funds or to
the foreclosure on any property securing any such funds, Borrower hereby
waives, and agrees to execute any document reasonably requested by FCSA and/or
the Administrative Agent in the future to effect such waiver, any rights it may
have under any such Farm Credit Law, including any rights with respect to the
acceleration and/or restructuring of any Bank Debt Advanced by or owed to FCSA
hereunder as to which an Event of Default has occurred and is continuing and
any rights applicable with respect to foreclosure of liens securing any such
Bank Debt; (c) in the event it is ever determined that the Farm Credit Law
applies to any of the Bank Debt described in clause (a) of this Section or to
the collection of any such funds or to the foreclosure of any liens securing
any such funds, Borrower hereby waives any rights it may have under any such
Farm Credit Law, including any rights with respect to the acceleration and/or
restructuring of any such Bank Debt as to which an Event of Default has
occurred and is continuing and any rights applicable with respect to
foreclosure of any liens securing any such Bank Debt; and (d) in addition to,
but not in contradiction of, the waiver set forth in clause (b) hereof, to the
extent any such Farm Credit Law is ever construed to apply to the acceleration
of any Bank Debt described in clause (b) hereof or to the foreclosure of any
liens securing any such funds, or to give Borrower any rights with respect
thereto, Borrower agrees that it shall not exercise any such rights if the
effect thereof would be to restrict, or in any way delay, the acceleration of,
or foreclosure of liens securing, any of the Bank Debt described in clause (a)
of this Section; and (e) in the event, in connection with the collection of any
of the Bank Debt described in clause (a) of this Section or the foreclosure of
any liens securing any such funds, any one or more of the Syndication Parties
described in clause (a) hereof purchases the Bank Debt described in clause (b)
hereto, Borrower waives and agrees that it shall not exercise any rights
arising under the Farm Credit Laws with respect to the acceleration of, or
foreclosure of liens securing, any such Bank Debt. Borrower acknowledges and
agrees that (i) its agreements and waivers as contained in this Section 13.4
were not required as a condition to obtaining the Loan, but rather were given
(A) to induce the commercial banks and other non-Farm Credit institutions and
CoBank to become Syndication Parties and to agree to provide a portion of the
available funds under the Loan, in accordance with Borrower's wishes, and (B)
to enable Borrower to avoid the additional costs of granting liens to secure
any Advances by FCSA with a separate set of Security Documents from the
Security Documents used to grant liens to secure the funds described in clause
(a) hereof, which would also impair Borrower's ability to obtain Pari Passu
Loans, and (ii) neither the provisions of this Section 13.4 nor the delivery to
Borrower of any summary of any rights under, or any notice pursuant to, the
Farm Credit Law shall in any way be deemed to be, or be construed to in any way
indicate, the determination or agreement by Borrower, the Administrative Agent,
any Syndication Party, and/or any Voting Participants, that the Farm Credit
Law, or any rights thereunder, are or will in fact be applicable to Borrower,
the Loan, or the Loan Documents.
Article 14. agency agreement
14.1 Funding of Syndication Interest. Each Syndication Party, severally
but not jointly, hereby irrevocably agrees to fund its Funding Share of the
Advances ("ADVANCE PAYMENT") as determined pursuant to the terms and conditions
contained herein and in particular, Articles 2 and 3 hereof. Each Syndication
Party's interest ("SYNDICATION INTEREST") in each Advance hereunder shall be
without recourse to the Administrative Agent or any other Syndication Party and
shall not be construed as a loan from any Syndication Party to the
Administrative Agent or to any other Syndication Party.
14.2 SYNDICATION PARTIES' OBLIGATIONS TO REMIT FUNDS. Each Syndication
Party agrees to remit its Funding Share to the Administrative Agent as, and
within the time deadlines ("SYNDICATION PARTY ADVANCE DATE"), required in this
Credit Agreement. Unless the Administrative Agent shall have received notice
from a Syndication Party prior to the date on which such Syndication Party is
to provide funds to the Administrative Agent for an Advance to be made by such
Syndication Party that such Syndication Party will not make available to the
Administrative Agent such funds, the Administrative Agent may assume that such
Syndication Party has made such funds available to the Administrative Agent on
the date of such Advance in accordance with the terms of this Credit Agreement
and the Administrative Agent in its sole discretion may, but shall not be
obligated to, in reliance upon such assumption, make available to Borrower on
such date a corresponding amount. If and to the extent such Syndication Party
shall not have made such funds available to the Administrative Agent by 2:00
P.M. (Central time) on the Banking Day due, such Syndication Party agrees to
repay the Administrative Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to Borrower until the Banking Day such amount is repaid to the
Administrative Agent (assuming payment is received by the Administrative Agent
at or prior to 2:00 P.M. (Central time), and until the next Banking Day if
payment is not received until after 2:00 P.M.), at the customary rate set by
the Administrative Agent for the correction of errors among banks for three
(3) Banking Days and thereafter at the Base Rate. If such Syndication Party
shall repay to the Administrative Agent such corresponding amount, such amount
so repaid shall constitute such Syndication Party's Advance for purposes of
this Credit Agreement. If such Syndication Party does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify Borrower, and Borrower shall
immediately pay such corresponding amount to the Administrative Agent with the
interest thereon, for each day from the date such amount is made available to
Borrower until the date such amount is repaid to the Administrative Agent, at
the rate of interest applicable at the time to such Advance.
14.3 SYNDICATION PARTY'S FAILURE TO REMIT FUNDS. If a Syndication Party
("DELINQUENT SYNDICATION PARTY") fails to remit its Funding Share in full by
the date and time required (the unpaid amount of any such payment being
hereinafter referred to as the "DELINQUENT AMOUNT"), in addition to any other
remedies available hereunder, any other Syndication Party or Syndication
Parties may, but shall not be obligated to, advance the Delinquent Amount (the
Syndication Party or Syndication Parties which advance such Delinquent Amount
are referred to as the "CONTRIBUTING SYNDICATION PARTIES"), in which case (a)
the Delinquent Amount which any Contributing Syndication Party advances shall
be treated as a loan to the Delinquent Syndication Party and shall not be
counted in determining the Individual Outstanding 7 Year Obligations or
Individual Outstanding 10 Year Obligations, as applicable, of any Contributing
Syndication Party, and (b) the Delinquent Syndication Party shall be obligated
to pay to the Administrative Agent, for the account of the Contributing
Syndication Parties, interest on the Delinquent Amount at a rate of interest
equal to the rate of interest which Borrower is obligated to pay on the
Delinquent Amount plus 200 basis points ("DELINQUENCY INTEREST") until the
Delinquent Syndication Party remits the full Delinquent Amount and remits all
Delinquency Interest to the Administrative Agent, which will distribute such
payments to the Contributing Syndication Parties (pro rata (if more than one)
based on the amount of the Delinquent Amount which each of them advanced) on
the same Banking Day as such payments are received by the Administrative Agent
if received no later than 11:00 A.M. Central time or the next Banking Day if
received by the Administrative Agent thereafter. In addition, the Contributing
Syndication Parties shall be entitled to share, on the same pro rata basis, and
the Administrative Agent shall pay over to them, for application against
Delinquency Interest and the Delinquent Amount, the Delinquent Syndication
Party's Payment Distribution and any fee distributions or distributions made
under Section 14.10 hereof until the Delinquent Amount and all Delinquency
Interest have been paid in full. For voting purposes the Administrative Agent
shall readjust the Individual Commitments of such Delinquent Syndication Party
and the Contributing Syndication Parties from time to time first to reflect the
advance of the Delinquent Amount by the Contributing Syndication Parties, and
then to reflect the full or partial reimbursement to the Contributing
Syndication Parties of such Delinquent Amount. As between the Delinquent
Syndication Party and the Contributing Syndication Parties, the Delinquent
Syndication Party's interest in its Notes shall be deemed to have been
partially assigned to the Contributing Syndication Parties in the amount of the
Delinquent Amount and Delinquency Interest owing to the Contributing
Syndication Parties from time to time. For the purposes of calculating
interest owed by a Delinquent Syndication Party, payments received on other
than a Banking Day shall be deemed to have been received on the next Banking
Day, and payments received after 2:00 P.M. (Central time) shall be deemed to
have been received on the next Banking Day.
14.4 AGENCY APPOINTMENT. Each of the Syndication Parties hereby
designates and appoints the Administrative Agent to act as agent to service and
collect the Loans and its respective Notes and to take such action on behalf of
such Syndication Party with respect to the Loans and such Notes, and to execute
such powers and to perform such duties, as specifically delegated or required
herein, as well as to exercise such powers and to perform such duties as are
reasonably incident thereto, and to receive and benefit from such fees and
indemnifications as are provided for or set forth herein, until such time as a
successor is appointed and qualified to act as the Administrative Agent.
14.5 POWER AND AUTHORITY OF THE ADMINISTRATIVE AGENT. Without limiting
the generality of the power and authority vested in the Administrative Agent
pursuant to Section 14.4 hereof, the power and authority vested in the
Administrative Agent includes, but is not limited to, the following:
14.5.1 ADVICE. To solicit the advice and assistance of each of the
Syndication Parties and Voting Participants concerning the administration of
the Loans and the exercise by the Administrative Agent of its various rights,
remedies, powers, and discretions with respect thereto. As to any matters not
expressly provided for by this Credit Agreement or any other Loan Document, the
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by all
of the Syndication Parties or the Required Lenders, as the case may be (and
including in each such case, Voting Participants), and any action taken or
failure to act pursuant thereto shall be binding on all of the Syndication
Parties, Voting Participants, and the Administrative Agent.
14.5.2 DOCUMENTS; INTERCREDITOR AGREEMENT. To execute, seal,
acknowledge, and deliver as the Administrative Agent, (a) all such instruments
as may be appropriate in connection with the administration of the Loans and
the exercise by the Administrative Agent of its various rights with respect
thereto; and (b) upon Borrower's satisfaction of each condition thereto as
specified in Section 1.85 hereof, one or more Intercreditor Agreements,
including agreements by a lender under a Pari Passu Loan adopting and agreeing
to be bound by the same, and the Administrative Agent agrees to execute an
Intercreditor Agreement (or agreement by a lender under a Pari Passu Loan
adopting and being bound by an Intercreditor Agreement) upon the request of
Borrower and upon Borrower's satisfaction of each condition thereto as
specified in Section 1.85 hereof; provided that the Administrative Agent shall
not exercise any rights under an Intercreditor Agreement after its execution
except as directed by the Required Lenders.
14.5.3 PROCEEDINGS. To initiate, prosecute, defend, and to
participate in, actions and proceedings in its name as the Administrative Agent
for the ratable benefit of the Syndication Parties.
14.5.4 RETAIN PROFESSIONALS. To retain attorneys, accountants, and
other professionals to provide advice and professional services to the
Administrative Agent, with their fees and expenses reimbursable to the
Administrative Agent by Syndication Parties pursuant to Section 14.16 hereof.
14.5.5 INCIDENTAL POWERS. To exercise powers reasonably incident
to the Administrative Agent's discharge of its duties enumerated in
Section 14.6 hereof.
14.6 DUTIES OF THE ADMINISTRATIVE AGENT. The duties of the
Administrative Agent hereunder shall consist of the following:
14.6.1 POSSESSION OF DOCUMENTS. To safekeep one original of each
of the Loan Documents other than the Notes (which will be in the possession of
the Syndication Party named as payee therein).
14.6.2 DISTRIBUTE PAYMENTS. To receive and distribute to the
Syndication Parties payments made by Borrower pursuant to the Loan Documents,
as provided herein.
14.6.3 LOAN ADMINISTRATION. Subject to the provisions of
Section 14.7 hereof, to, on behalf of and for the ratable benefit of all
Syndication Parties, in accordance with customary banking practices, exercise
all rights, powers, privileges, and discretion to which the Administrative
Agent is entitled to administer the Loans.
14.6.4 ACTION UPON DEFAULT. Each Syndication Party agrees that
upon its learning of any facts which would constitute a Potential Default or
Event of Default, it shall promptly notify the Administrative Agent by a
writing designated as a notice of default specifying in detail the nature of
such facts and default, and the Administrative Agent shall promptly send a copy
of such notice to all other Syndication Parties. The Administrative Agent
shall be entitled to assume that no Event of Default or Potential Default has
occurred or is continuing unless an officer thereof primarily responsible for
the Administrative Agent's duties as such with respect to the Loans or
primarily responsible for the credit relationship, if any, between the
Administrative Agent and Borrower has actual knowledge of facts which would
result in or constitute a Potential Default or Event of Default, or has
received written notice from Borrower of such fact, or has received written
notice of default from a Syndication Party. In the event the Administrative
Agent has obtained actual knowledge (in the manner described above) or received
written notice of the occurrence of a Potential Default or Event of Default as
provided in the preceding sentences, the Administrative Agent may, but is not
required to exercise or refrain from exercising any rights which may be
available under the Loan Documents or at law on account of such occurrence and
shall be entitled to use its discretion with respect to exercising or
refraining from exercising any such rights, unless and until the Administrative
Agent has received specific written instruction from the Required Lenders to
refrain from exercising such rights or to take specific designated action, in
which case it shall follow such instruction; provided that the Administrative
Agent shall not be required to take any action which will subject it to
personal liability, or which is or may be contrary to any provision of the Loan
Documents or applicable law. The Administrative Agent shall not be subject to
any liability by reason of its acting or refraining from acting pursuant to any
such instruction.
14.6.5 INDEMNIFICATION AS CONDITION TO ACTION. Except for action
expressly required of the Administrative Agent hereunder, the Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have received further assurances (which may include
cash collateral) of the indemnification obligations of the Syndication Parties
under Section 14.17 hereof in respect of any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action.
14.6.6 FORWARDING OF INFORMATION. The Administrative Agent shall,
within a reasonable time after receipt thereof, forward to the Syndication
Parties and the Voting Participants notices and reports provided to the
Administrative Agent by the Borrower pursuant to Section 10.2 hereof.
14.7 CONSENT REQUIRED FOR CERTAIN ACTIONS. Notwithstanding the fact
that this Credit Agreement may otherwise provide that the Administrative Agent
may act at its discretion, the Administrative Agent may not take any of the
following actions with respect to, or under, the Loan Documents (nor may the
Syndication Parties or the Voting Participants take the action described in
Subsection 14.7.1(c)) without the prior written consent, given after
notification by the Administrative Agent of its intention to take any such
action (or notification by such Syndication Parties or the Voting Participants
as are proposing the action described in Subsection 14.7.1(c) of their
intention to do so), of:
14.7.1 UNANIMOUS. Each of the Syndication Parties and Voting
Participants holding, directly or, in the case of Voting Participants,
indirectly, an Individual 7 Year Commitment or an Individual 10 Year
Commitment, as applicable, before:
(a) Agreeing to an increase in the Aggregate 7 Year Commitment or the
Aggregate 10 Year Commitment, as applicable, or an extension of the 7 Year
Maturity Date or the 10 Year Maturity Date, as applicable;
(b) Agreeing to a reduction in the amount, or to a delay in the due date,
of any payment by Borrower of interest, principal, or fees with respect to the
7 Year Revolving Loan or the 10 Year Revolving Loan, as applicable;
(c) Amending any provisions of this Subsection 14.7.1 or Section 15.20;
or
(d) Agreeing to release any Collateral from the lien of the Security
Documents except where Borrower is entitled to such release pursuant to Section
11.4 hereof.
14.7.2 REQUIRED LENDERS. The Required Lenders before:
(a) Consenting to any action or amendment, or granting any waiver with
respect to, either the 7 Year Revolving Loan or the 10 Year Revolving Loan, not
covered in Subsection 14.7.1; or
(b) Agreeing to amend Article 14 of this Credit Agreement (other than
Subsection 14.7.1).
14.7.3 ACTION WITHOUT VOTE. Notwithstanding any other provisions
of this Section, the Administrative Agent may, without obtaining the consent of
the Syndication Parties or Voting Participants, determine (a) whether the
conditions to an Advance have been met, and (b) the amount of such Advance;
14.7.4 VOTE OF PARTICIPANTS. Under the circumstances set forth in
Section 14.26 hereof, each Voting Participant shall be accorded voting rights
as though such Person was a Syndication Party.
14.8 DISTRIBUTION OF PRINCIPAL AND INTEREST. The Administrative Agent
will receive and accept all payments (including prepayments) of principal and
interest made by Borrower on the Loans and the Notes and will hold all such
payments in trust for the benefit of all present and future Syndication
Parties, and, if requested in writing by the Required Lenders, in an account
segregated from the Administrative Agent's other funds and accounts ("PAYMENT
ACCOUNT"). After the receipt by the Administrative Agent of any payment
representing interest or principal on the Loans, the Administrative Agent shall
remit to each Syndication Party its share of such payment as provided in
Article 5 hereof in US dollars ("PAYMENT DISTRIBUTION") no later than 3:00 P.M.
(Central time) on the same Banking Day as such payment is received by the
Administrative Agent if received no later than 1:00 P.M. (Central time) or the
next Banking Day if received by the Administrative Agent thereafter. Any
Syndication Party's rights to its Payment Distribution shall be subject to the
rights of any Contributing Syndication Parties to such amounts as set forth in
Section 14.3 hereof.
14.9 DISTRIBUTION OF CERTAIN AMOUNTS. The Administrative Agent shall
(a) receive and hold in trust for the benefit of all present and future
Syndication Parties, in the Payment Account and, if requested in writing by the
Required Lenders, segregated from the Administrative Agent's other funds and
accounts and (b) shall remit to the Syndication Parties, as indicated, the
amounts described below:
14.9.1 FUNDING LOSSES. To each Syndication Party the amount of any
Funding Losses paid by Borrower to the Administrative Agent in connection with
a prepayment of any portion of a LIBO Rate Loan, in accordance with the Funding
Loss Notice such Syndication Party provided to the Administrative Agent, no
later than 3:00 P.M. (Central time) on the same Banking Day that payment of
such Funding Losses is received by the Administrative Agent, if received no
later than 1:00 P.M. (Central time), or the next Banking Day if received by the
Administrative Agent thereafter.
14.9.2 FEES. To each Syndication Party its share of the Commitment
Fee paid by Borrower to the Administrative Agent, no later than 3:00 P.M.
(Central time) on the same Banking Day that payment of such fee is received by
the Administrative Agent, if received no later than 1:00 P.M. (Central time),
or the next Banking Day if received by the Administrative Agent thereafter.
14.10 POSSESSION OF LOAN DOCUMENTS. The Loan Documents (other than the
Notes) shall be held by the Administrative Agent in its name, for the ratable
benefit of itself and the other Syndication Parties without preference or
priority.
14.11 COLLATERAL APPLICATION. The Syndication Parties shall have no
interest in any other loans made to Borrower by any other Syndication Party
other than the Loans, or in any property taken as security for any other loan
or loans made to Borrower by any other Syndication Party, or in any property
now or hereinafter in the possession or control of any other Syndication Party,
which may be or become security for the Loans solely by reason of the
provisions of a security instrument that would cause such security instrument
and the property covered thereby to secure generally all indebtedness owing by
Borrower to such other Syndication Party. Notwithstanding the foregoing, to
the extent such other Syndication Party applies such funds or the proceeds of
such property to reduction of the Loans, such other Syndication Party shall
share such funds or proceeds with all Syndication Parties according to their
respective Individual Pro Rata Shares. In the event that any Syndication Party
shall obtain payment, whether partial or full, from any source in respect of
the Loans, including without limitation payment by reason of the exercise of a
right of offset, banker's lien, general lien, or counterclaim, such Syndication
Party shall promptly make such adjustments (which may include payment in cash
or the purchase of further syndications or participations in the Loans) to the
end that such excess payment shall be shared with all other Syndication Parties
in accordance with their respective Individual Pro Rata Shares.
14.12 AMOUNTS REQUIRED TO BE RETURNED. If the Administrative Agent makes
any payment to a Syndication Party in anticipation of the receipt of final
funds from Borrower, and such funds are not received from Borrower, or if
excess funds are paid by the Administrative Agent to any Syndication Party as
the result of a miscalculation by the Administrative Agent, then such
Syndication Party shall, on demand of the Administrative Agent, forthwith
return to the Administrative Agent any such amounts, plus interest thereon
(from the day such amounts were transferred by the Administrative Agent to the
Syndication Party to, but not including, the day such amounts are returned by
Syndication Party) at a rate per annum equal to the customary rate set by the
Administrative Agent for the correction of errors among banks for three (3)
Banking Days and thereafter at the Base Rate. If the Administrative Agent is
required at any time to return to Borrower or a trustee, receiver, liquidator,
custodian, or similar official any portion of the payments made by Borrower to
the Administrative Agent, whether pursuant to any bankruptcy or insolvency law
or otherwise, then each Syndication Party shall, on demand of the
Administrative Agent, forthwith return to the Administrative Agent any such
payments transferred to such Syndication Party by the Administrative Agent but
without interest or penalty (unless the Administrative Agent is required to pay
interest or penalty on such amounts to the person recovering such payments).
14.13 REPORTS AND INFORMATION TO SYNDICATION PARTIES. The Administrative
Agent shall use reasonable efforts to provide to the Syndication Parties, as
soon as practicable after actual knowledge thereof is acquired by an officer
thereof primarily responsible for the Administrative Agent's duties as such
with respect to the Loans or primarily responsible for the credit relationship,
if any, between the Administrative Agent and Borrower, any material factual
information which has a material adverse effect on the creditworthiness of
Borrower and Borrower hereby authorizes such disclosure by the Administrative
Agent to the Syndication Parties (and by the Syndication Parties to any of
their participants). Failure of the Administrative Agent to provide the
information referred to in this Section or in Subsection 14.6.4 hereof shall
not result in any liability upon, or right to make a claim against, the
Administrative Agent except where a court of competent jurisdiction renders a
final non-appealable determination that such failure is a result of the willful
misconduct or gross negligence of the Administrative Agent. The Syndication
Parties acknowledge and agree that all information and reports received
pursuant to this Credit Agreement will be received in confidence in connection
with their Syndication Interest, and that such information and reports
constitute confidential information and shall not, without the prior written
consent of the Administrative Agent or Borrower, as applicable, be (x)
disclosed to any third party (other than the Administrative Agent, another
Syndication Party or potential Syndication Party, or a participant or potential
participant in the interest of a Syndication Party, which disclosure is hereby
approved by Borrower), except pursuant to appropriate legal or regulatory
process, or (y) used by the Syndication Party except in connection with the
Loans and its Syndication Interest.
14.14 STANDARD OF CARE. The Administrative Agent shall not be liable to
the Syndication Parties for any error in judgment or for any action taken or
not taken by the Administrative Agent or its agents, except for its gross
negligence or willful misconduct. Subject to the preceding sentence, the
Administrative Agent will exercise the same care in administering the Loans and
the Loan Documents as it exercises for similar loans which it holds for its own
account and risk, and the Administrative Agent shall not have any further
responsibility to the Syndication Parties. Without limiting the foregoing, the
Administrative Agent may rely on the advice of counsel concerning legal matters
and on any written document it believes to be genuine and correct and to have
been signed or sent by the proper Person or Persons.
14.15 NO TRUST RELATIONSHIP. Neither the execution of this Credit
Agreement, nor the sharing in the Loans, nor the holding of the Loan Documents
in its name by the Administrative Agent, nor the management and administration
of the Loans and Loan Documents by the Administrative Agent (including the
obligation to hold certain payments and proceeds in the Payment Account in
trust for the Syndication Parties), nor any other right, duty or obligation of
the Administrative Agent under or pursuant to this Credit Agreement, is
intended to be or create, and none of the foregoing shall be construed to be or
create, any express, implied or constructive trust relationship between the
Administrative Agent and any Syndication Party. Each Syndication Party hereby
agrees and stipulates that the Administrative Agent is not acting as trustee
for such Syndication Party with respect to the Loans, this Credit Agreement, or
any aspect of either, or in any other respect.
14.16 SHARING OF COSTS AND EXPENSES. To the extent not paid by Borrower,
each Syndication Party will promptly upon demand reimburse the Administrative
Agent for its Individual Pro Rata Share of all reasonable costs, disbursements,
and expenses incurred by the Administrative Agent on or after the date of this
Credit Agreement for legal, accounting, consulting, and other services rendered
to the Administrative Agent in its role as the Administrative Agent in the
administration of the Loans, interpreting the Loan Documents, and protecting,
enforcing, or otherwise exercising any rights, both before and after default by
Borrower under the Loan Documents, and including, without limitation, all costs
and expenses incurred in connection with any bankruptcy proceedings; provided,
however, that the costs and expenses to be shared in accordance with this
Section shall not include any costs or expenses incurred by the Administrative
Agent solely as a Syndication Party in connection with the Loans, nor the
Administrative Agent's internal costs and expenses.
14.17 SYNDICATION PARTIES' INDEMNIFICATION OF THE ADMINISTRATIVE AGENT.
Each of the Syndication Parties agree to indemnify the Administrative Agent,
including any Successor Agent, and their respective directors, officers,
employees, agents, professional advisers and representatives ("INDEMNIFIED
AGENCY PARTIES"), (to the extent not reimbursed by Borrower, and without in any
way limiting the obligation of Borrower to do so), ratably (based on their
Individual Pro Rata Shares), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans
and/or the expiration or termination of this Credit Agreement) be imposed on,
incurred by or asserted against the Administrative Agent (or any of the
Indemnified Agency Parties while acting for the Administrative Agent or for any
Successor Agent) in any way relating to or arising out of this Credit Agreement
or the Loan Documents, or the performance of the duties of the Administrative
Agent hereunder or thereunder or any action taken or omitted while acting in
the capacity of the Administrative Agent under or in connection with any of the
foregoing; provided that the Syndication Parties shall not be liable for the
payment of any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of an
Indemnified Agency Party to the extent that any of the forgoing result from the
gross negligence or willful misconduct of that Indemnified Agency Party as
determined by the final non-appealable judgment of a court of competent
jurisdiction. The agreements and obligations in this Section shall survive the
payment of the Loans and the expiration or termination of this Credit
Agreement.
14.18 BOOKS AND RECORDS. The Administrative Agent shall maintain such
books of account and records relating to the Loans as it maintains with respect
to other loans of similar type and amount, and which shall clearly and
accurately reflect the Syndication Interest of each Syndication Party.
Syndication Parties, or their agents, may inspect such books of account and
records at all reasonable times during the Administrative Agent's regular
business hours.
14.19 ADMINISTRATIVE AGENT FEE. The Administrative Agent and any
Successor Agent shall be entitled to the Administrative Agent Fee (as such fee
is set forth in the Fee Letter) for acting as the Administrative Agent. In the
event the Successor Agent is contractually entitled to an additional fee, each
Syndication Party will be responsible for its proportionate share (based on its
Individual Pro Rata Share) thereof.
14.20 THE ADMINISTRATIVE AGENT'S RESIGNATION OR REMOVAL. The
Administrative Agent may resign at any time by giving at least sixty (60) days'
prior written notice of its intention to do so to each of the Syndication
Parties and Borrower. After the receipt of such notice, the Required Lenders
shall appoint a successor ("SUCCESSOR AGENT"). If (a) no Successor Agent shall
have been so appointed which is either (i) a Syndication Party, or (ii) if not
a Syndication Party, which is a Person approved by Borrower, or (b) if such
Successor Agent has not accepted such appointment, in either case within forty-
five (45) days after the retiring Administrative Agent's giving of such notice
of resignation, then the retiring Administrative Agent may, after consulting
with, but without requiring the approval of, Borrower, appoint a Successor
Agent which shall be a bank or a trust company organized under the laws of the
United States of America or any state thereof and having a combined capital,
surplus and undivided profit of at least $250,000,000.00. Any Administrative
Agent may be removed upon the written demand of the Required Lenders, which
demand shall also appoint a Successor Agent. Upon the appointment of a
Successor Agent hereunder, (y) the term "Administrative Agent" shall for all
purposes of this Credit Agreement thereafter mean such Successor Agent, and (z)
the Successor Agent shall notify Borrower of its identity and of the
information called for in Subsection 15.4.2 hereof. After any retiring
Administrative Agent's resignation hereunder as the Administrative Agent, or
the removal hereunder of any Administrative Agent, the provisions of this
Credit Agreement shall continue to inure to the benefit of such Administrative
Agent as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under this Credit Agreement.
14.21 REPRESENTATIONS AND WARRANTIES OF ALL PARTIES. The Administrative
Agent and each Syndication Party represents and warrants that: (a) the
execution and delivery of, and performance of its obligations under, this
Credit Agreement is within its power and has been duly authorized by all
necessary corporate and other action by it; (b) this Credit Agreement is in
compliance with all applicable laws and regulations promulgated under such laws
and does not conflict with nor constitute a breach of its charter or by-laws
nor any agreements by which it is bound, and does not violate any judgment,
decree or governmental or administrative order, rule or regulation applicable
to it; (c) no approval, authorization or other action by, or declaration to or
filing with, any governmental or administrative authority or any other Person
is required to be obtained or made by it in connection with the execution and
delivery of, and performance of its obligations under, this Credit Agreement;
and (d) this Credit Agreement has been duly executed by it, and constitutes the
legal, valid, and binding obligation of such Person, enforceable in accordance
with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the rights of creditors generally and general equitable principles
(regardless of whether such enforceability is considered in a proceeding at law
or in equity). Each Syndication Party that is a state or national bank
represents and warrants that the act of entering into and performing its
obligations under this Credit Agreement has been approved by its board of
directors or its loan committee and such action was duly noted in the written
minutes of the meeting of such board or committee, and that it will furnish the
Administrative Agent with a certified copy of such minutes or an excerpt
therefrom reflecting such approval.
14.22 REPRESENTATIONS AND WARRANTIES OF COBANK. Except as expressly set
forth in Section 14.21 hereof, the Administrative Agent makes no express or
implied representation or warranty and assumes no responsibilities with respect
to the due authorization, execution, or delivery of the Loan Documents; the
accuracy of any information, statements, or certificates provided by Borrower,
the legality, validity, or enforceability of the Loan Documents; the filing or
recording of any document; the collectibility of the Loans; the performance by
Borrower of any of its obligations under the Loan Documents; or the financial
condition or solvency of Borrower or any other party obligated with respect to
the Loans or the Loan Documents.
14.23 SYNDICATION PARTIES' INDEPENDENT CREDIT ANALYSIS. Each Syndication
Party acknowledges receipt of true and correct copies of all Loan Documents
(other than any Note payable to another Syndication Party) from the
Administrative Agent. Each Syndication Party agrees and represents that it has
relied upon its independent review (a) of the Loan Documents, and (b) any
information independently acquired by such Syndication Party from Borrower or
otherwise in making its decision to acquire an interest in the Loans
independently and without reliance on the Administrative Agent. Each
Syndication Party represents and warrants that it has obtained such information
as it deems necessary (including any information such Syndication Party
independently obtained from Borrower or others) prior to making its decision to
acquire an interest in the Loans. Each Syndication Party further agrees and
represents that it has made its own independent analysis and appraisal of and
investigation into each Borrower's authority, business, operations, financial
and other condition, creditworthiness, and ability to perform its obligations
under the Loan Documents and has relied on such review in making its decision
to acquire an interest in the Loans. Each Syndication Party agrees that it
will continue to rely solely upon its independent review of the facts and
circumstances related to Borrower, and without reliance upon the Administrative
Agent, in making future decisions with respect to all matters under or in
connection with the Loan Documents and the Loans. The Administrative Agent
assumes no responsibility for the financial condition of Borrower or for the
performance of Borrower's obligations under the Loan Documents. Except as
otherwise expressly provided herein, no Syndication Party shall have any duty
or responsibility to furnish to any other Syndication Parties any credit or
other information concerning Borrower which may come into its possession.
14.24 NO JOINT VENTURE OR PARTNERSHIP. Neither the execution of this
Credit Agreement, the sharing in the Loans, nor any agreement to share in
payments or losses arising as a result of this transaction is intended to be or
to create, and the foregoing shall not be construed to be, any partnership,
joint venture or other joint enterprise between the Administrative Agent and
any Syndication Party, nor between or among any of the Syndication Parties.
14.25 PURCHASE FOR OWN ACCOUNT; RESTRICTIONS ON TRANSFER; PARTICIPATIONS.
Each Syndication Party represents that it has acquired and is retaining its
interest in the Loans for its own account in the ordinary course of its banking
or financing business. Each Syndication Party agrees that it will not sell,
assign, convey or otherwise dispose of ("TRANSFER") to any Person, or create or
permit to exist any lien or security interest on, all or any part of its
interest in the Loans without the prior written consent of the Administrative
Agent and Borrower (which consent will not be unreasonably withheld); provided
that: (a) any such Transfer (except a Transfer to another Syndication Party)
must be in a minimum amount of $5,000,000.00; (b) each Syndication Party must
maintain an Individual Commitment of no less than $5,000,000.00, unless it
Transfers its entire interest in the Loans; (c) the transferee must execute an
agreement substantially in the form of EXHIBIT 14.25 hereto ("SYNDICATION
ACQUISITION AGREEMENT") and assume all of the transferor's obligations
hereunder and execute such documents as the Administrative Agent may reasonably
require; and (d) the Syndication Party making such Transfer must pay the
Administrative Agent an assignment fee of $3,500.00. Upon receipt of such fee
and the properly executed Syndication Acquisition Agreement, the assignee of
such Transfer shall thereafter be treated as the Syndication Party with respect
to the Syndication Interest subject to the Transfer and shall receive all
future Payment Distributions, and the assignor and assignee shall make all
adjustments and payments between themselves appropriate with respect to such
future Payment Distributions. Any Syndication Party may participate any part
of its interest in the Loans to any Person with the prior written consent of
the Administrative Agent and Borrower (which consent will not be unreasonably
withheld), provided that no such consent shall be required where the
participant is a Person at least fifty percent (50%) the equity interest in
which is owned by such Syndication Party or which owns at least fifty percent
(50%) of the equity interest in such Syndication Party or at least fifty
percent (50%) of the equity interest of which is owned by the same Person which
owns at least fifty percent (50%) of the equity interest of such Syndication
Party, and each Syndication Party understands and agrees that in the event of
any such participation: (y) its obligations hereunder will not change on
account of such participation, and (z) except as provided in Section 14.26
hereof with respect to voting rights, (i) the participant will have no rights
under this Credit Agreement, including, without limitation, voting rights or
the right to receive payments or distributions; and (ii) the Administrative
Agent shall continue to deal directly with the Syndication Party with respect
to the Loans (including with respect to voting rights) as though no
participation had been granted and will not be obligated to deal directly with
any participant. Notwithstanding any provision contained herein to the
contrary, any Syndication Party may at any time pledge or assign all or any
portion of its interest in the Loans to any Federal Reserve Bank or any Federal
Farm Credit Bank in accordance with applicable law.
14.26 CERTAIN PARTICIPANTS' VOTING RIGHTS. All Persons ("VOTING
PARTICIPANTS") who (a) have, directly or indirectly, purchased a participation
interest in the minimum amount of $10,000,000.00 in a Syndication Party's
Syndication Interest as of the Closing Date and (b) have on the Closing Date
been designated in writing to Borrower and the Administrative Agent as having
such entitlement (as evidenced by their name and dollar participation amount
appearing on EXHIBIT 14.26 hereto), shall be entitled to vote (and such
Syndication Party's voting rights shall be correspondingly reduced), on a
dollar basis, as if such participant were a Syndication Party, on any matter
requiring or allowing a Syndication Party, to provide or withhold its consent,
or to otherwise vote on any proposed action.
14.27 METHOD OF MAKING PAYMENTS. Payment and transfer of all amounts
owing or to be paid or remitted hereunder to the Administrative Agent by the
Syndication Parties, including, without limitation, payment of the Advance
Payment, shall be by wire transfer in accordance with the instructions
contained on EXHIBIT 14.27 hereto ("WIRE INSTRUCTIONS"). Payment and transfer
of all amounts to be paid or remitted hereunder to the Syndication Parties by
the Administrative Agent, including, without limitation, Payment Distributions,
shall be by wire transfer in accordance with the instructions contained on
their respective signature pages hereto.
14.28 EVENTS OF SYNDICATION DEFAULT/REMEDIES.
14.28.1 SYNDICATION PARTY DEFAULT. Any of the following
occurrences, failures or acts, with respect to any of the Syndication Parties
shall constitute an "EVENT OF SYNDICATION DEFAULT" hereunder by such
Syndication Party: (a) if any representation or warranty made by such
Syndication Party in this Credit Agreement shall be found to have been untrue
in any material respect; (b) if such Syndication Party fails to make any
distributions or payments required under this Credit Agreement within five (5)
days of the date required; (c) if such Syndication Party breaches any other
covenant, agreement, or provision of this Credit Agreement which breach shall
have continued uncured for a period of thirty (30) consecutive days after such
breach first occurs, unless a shorter period is required to avoid prejudicing
the rights and position of the other Syndication Parties; (d) if any agency
having supervisory authority over such Syndication Party, or any creditors
thereof, shall file a petition to reorganize or liquidate such Syndication
Party pursuant to any applicable federal or state law or regulation and such
petition shall not be discharged or denied within fifteen (15) days after the
date on which it is filed; (e) if by the order of a court of competent
jurisdiction or by any appropriate supervisory agency, a receiver, trustee or
liquidator shall be appointed for such Syndication Party or for all or any
material part of its property or if such Syndication Party shall be declared
insolvent; or (f) if such Syndication Party shall be dissolved, or shall make
an assignment for the benefit of its creditors, or shall file a petition
seeking to take advantage of any debtors' act, including the bankruptcy act, or
shall admit in writing its inability to pay its debts generally as they become
due, or shall consent to the appointment of a receiver or liquidator of all or
any material part of its property.
14.28.2 REMEDIES. Upon the occurrence of an Event of Syndication
Default, the non-defaulting Syndication Parties, acting by, or through the
direction of, a simple majority of the non-defaulting Syndication Parties
(determined based on the ratio of the total of their Individual Commitments to
the Aggregate Commitment), may, in addition to any other remedy specifically
set forth in this Credit Agreement, have and exercise any and all remedies
available generally at law or equity, including the right to damages and to
specific performance.
14.29 WITHHOLDING TAXES. Each Syndication Party represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Administrative Agent and to
Borrower such forms, certifications, statements and other documents as the
Administrative Agent or Borrower may request from time to time to evidence such
Syndication Party's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Administrative Agent or Borrower, as the case may
be, to comply with any applicable laws or regulations relating thereto.
Without limiting the effect of the foregoing, if any Syndication Party is not
created or organized under the laws of the United States of America or any
state thereof, such Syndication Party will furnish to the Administrative Agent
and Borrower IRS Form 4224 or Form 1001, or such other forms, certifications,
statements or documents, duly executed and completed by such Syndication Party,
as evidence of such Syndication Party's exemption from the withholding of
United States tax with respect thereto. Notwithstanding anything herein to the
contrary, Borrower shall not be obligated to make any payments hereunder to or
for the benefit of such Syndication Party until such Syndication Party shall
have furnished to the Administrative Agent and Borrower the requested form,
certification, statement or document.
14.30 AMENDMENTS CONCERNING AGENCY FUNCTION. THE Administrative Agent
shall not be bound by any waiver, amendment, supplement or modification of this
Credit Agreement or any other Loan Document which affects its duties hereunder
or thereunder unless it shall have given its prior written consent thereto.
14.31 FURTHER ASSURANCES. The Administrative Agent and each Syndication
Party agree to take whatever steps and execute such documents as may be
reasonable and necessary to implement this Article 14 and to carry out fully
the intent thereof.
Article 15. MISCELLANEOUS
15.1 Costs and Expenses. To the extent permitted by law, Borrower
agrees to pay to the Administrative Agent and/or the Syndication Parties, as
applicable, on demand, all out-of-pocket costs and expenses (a) reasonably
incurred by the Administrative Agent (including, without limitation, the
reasonable fees and expenses of counsel retained by the Administrative Agent,
and including fees and expenses incurred for consulting, appraisal,
engineering, inspection, and environmental assessment services) in connection
with the preparation, negotiation, and execution of the Fee Letter, mandate
letter, Summary of Terms and Conditions, and the Loan Documents and the
transactions contemplated thereby, processing the Borrowing Notices, and
processing requests for and implementing Pari Passu Loans, and (b) incurred by
the Administrative Agent or any Syndication Party (including, without
limitation, the reasonable fees and expenses of counsel retained by the
Administrative Agent and the Syndication Parties) in connection with the
enforcement or protection of the Syndication Parties' rights under the Loan
Documents upon the occurrence of an Event of Default, including without
limitation collection of the Loan (regardless of whether such enforcement or
collection is by court action or otherwise) or, unless it is determined by a
final non-appealable judgment that the Administrative Agent or such Syndication
Party, as applicable, has acted in a grossly negligent or willful manner, upon
the commencement of an action by Borrower against the Administrative Agent or
any Syndication Party. Borrower shall not be obligated to pay the costs or
expenses of any Person whose only interest in the Loan is as a holder of a
participation interest.
15.2 SERVICE OF PROCESS AND CONSENT TO JURISDICTION. Borrower hereby
agrees that any litigation with respect to this Credit Agreement or to enforce
any judgment obtained against Borrower for breach of this Credit Agreement or
under the Notes or other Loan Documents may be brought in the courts of the
State of Colorado and in the United States District Court for the District of
Colorado (if applicable subject matter jurisdictional requirements are
present), as the Administrative Agent may elect; and, by execution and delivery
of this Credit Agreement, Borrower irrevocably submits to such jurisdiction.
With respect to litigation concerning this Credit Agreement or under the Notes
or other Loan Documents within the jurisdiction of the courts of the State of
Colorado or the United States District Court for the District of Colorado,
Borrower hereby agrees to irrevocably appoint a Person with offices in Denver,
Colorado and otherwise reasonably acceptable to the Administrative Agent to
serve, until six (6) months after the 10 Year Maturity Date, to serve as the
agent of Borrower to receive for and on behalf of Borrower at such agent's
Denver, Colorado office, service of process, which service may be made by
mailing a copy of any summons or other legal process to Borrower in care of
such agent. Borrower agrees that Borrower shall maintain a duly appointed
agent in Colorado for service of summons and other legal process as long as
Borrower remains obligated under this Credit Agreement and shall keep the
Administrative Agent advised in writing of the identity and location of such
agent. The receipt by such agent and/or by Borrower of such summons or other
legal process in any such litigation shall be deemed personal service and
acceptance by Borrower for all purposes of such litigation.
15.3 JURY WAIVER. IT IS MUTUALLY AGREED BY AND BETWEEN THE
ADMINISTRATIVE AGENT, EACH SYNDICATION PARTY, AND BORROWER THAT THEY EACH WAIVE
TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM BROUGHT BY ANY OF THEM
AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF OR IN ANY WAY
CONNECTED WITH THIS CREDIT AGREEMENT, THE NOTES, OR THE OTHER LOAN DOCUMENTS.
15.4 NOTICES. All notices, requests and demands required or permitted
under the terms of this Credit Agreement shall be in writing and (a) shall be
addressed as set forth below or at such other address as either party shall
designate in writing, (b) shall be deemed to have been given or made: (i) if
delivered personally, immediately upon delivery, (ii) if by telex, telegram, or
facsimile transmission, immediately upon sending and upon confirmation of
receipt, (iii) if by nationally recognized overnight courier service with
instructions to deliver the next Banking Day, one (1) Banking Day after
sending, and (iv) if by United States Mail, certified mail, return receipt
requested, five (5) days after mailing.
15.4.1 BORROWER:
Pilgrim's Pride Corporation
110 South Texas Street
Pittsburg, Texas 75686
FAX: (903) 856-7505
Attention: Chief Financial Officer
with a copy to:
Baker & McKenzie
4500 Trammell Crow Center
2001 Ross Avenue
Dallas, Texas 75201
FAX: (214) 965-5902
Attention: Alan G. Harvey
15.4.2 ADMINISTRATIVE AGENT:
CoBank, ACB
5500 South Quebec Street
Englewood, Colorado 80111
FAX: (303) 694-5830
Attention: Syndications Coordinator, Corporate Finance Division
15.4.3 FCSA:
Farm Credit Services of America, FLCA
206 South 19{th} Street
Omaha, Nebraska 68102
FAX: (402) 348-3324
Attention: Jim Knuth
15.4.4 SYNDICATION PARTIES:
See signature pages hereto.
15.5 LIABILITY OF ADMINISTRATIVE AGENT. Neither the Administrative
Agent nor the Co-Arrangers shall have any liabilities or responsibilities to
Borrower or any Subsidiary on account of the failure of any Syndication Party
to perform its obligations hereunder or to any Syndication Party on account of
the failure of Borrower or any Subsidiary to perform their respective
obligations hereunder or under any other Loan Document.
15.6 SUCCESSORS AND ASSIGNS. This Credit Agreement shall be binding
upon and inure to the benefit of Borrower, the Administrative Agent, the Co-
Arrangers, and the Syndication Parties, and their respective successors and
assigns, except that Borrower may not assign or transfer its rights or
obligations hereunder without the prior written consent of all of the
Syndication Parties.
15.7 SEVERABILITY. The invalidity or unenforceability of any provision
of this Credit Agreement or the other Loan Documents shall not affect the
remaining portions of such documents or instruments; in case of such invalidity
or unenforceability, such documents or instruments shall be construed as if
such invalid or unenforceable provisions had not been included therein.
15.8 ENTIRE AGREEMENT. This Credit Agreement (together with all
exhibits hereto, which are incorporated herein by this reference), the other
Loan Documents, and the letter of even date herewith between Borrower and the
Administrative Agent regarding certain post-closing matters ("POST CLOSING
LETTER"), represent the entire understanding of the Administrative Agent, the
Co-Arrangers, each Syndication Party, and Borrower with respect to the subject
matter hereof and shall replace and supersede any previous agreements of the
parties with respect to the subject matter hereof.
15.9 APPLICABLE LAW. To the extent not governed by federal law, this
Credit Agreement and the other Loan Documents, and the rights and obligations
of the parties hereto and thereto shall be governed by and interpreted in
accordance with the internal laws of the State of Colorado, without giving
effect to any otherwise applicable rules concerning conflicts of law.
15.10 CAPTIONS. The captions or headings in this Credit Agreement and
any table of contents hereof are for convenience only and in no way define,
limit or describe the scope or intent of any provision of this Credit
Agreement.
15.11 COMPLETE AGREEMENT; AMENDMENTS. This Credit Agreement, the Notes,
and the other Loan Documents are intended by the parties hereto to be a
complete and final expression of their agreement and may not be contradicted by
evidence of any prior or contemporaneous oral agreement. The Administrative
Agent, each Syndication Party, and Borrower acknowledge and agree that there is
no unwritten oral agreement between them with respect to the subject matter of
this Credit Agreement. This Credit Agreement may not be modified or amended
unless such modification or amendment is in writing and is signed by Borrower,
the Administrative Agent, the Co-Arrangers, and the Required Lenders or, where
this Credit Agreement requires the consent of all Syndication Parties, then by
all of the Syndication Parties (and each Syndication Party hereby agrees to
execute any such amendment approved pursuant to Section 14.7 hereof). Borrower
agrees that it shall reimburse the Administrative Agent for all reasonable fees
and expenses incurred by the Administrative Agent in retaining outside legal
counsel in connection with any amendment or modification to this Credit
Agreement.
15.12 ADDITIONAL COSTS OF MAINTAINING LOAN. Borrower shall pay to the
Administrative Agent from time to time such amounts as the Administrative Agent
may determine to be necessary to compensate any Syndication Party for any
increase in costs to such Syndication Party which the Administrative Agent
reasonably determines, based on information presented to it by such Syndication
Party, are attributable to such Syndication Party's making or maintaining an
Advance hereunder or its obligation to make such Advance, or any reduction in
any amount receivable by such Syndication Party under this Credit Agreement or
the Notes payable to it in respect to such Advance or such obligation (such
increases in costs and reductions in amounts receivable being herein called
"ADDITIONAL COSTS"), resulting from any change after the date of this Credit
Agreement in United States federal, state, municipal, or foreign laws or
regulations (including Regulation D of the Federal Reserve Board), or the
adoption or making after such date of any interpretations, directives, or
requirements applying to a class of banks including such Syndication Party of
or under any United States federal, state, municipal, or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof ("REGULATORY CHANGE"), which: (a) changes the basis of
taxation of any amounts payable to such Syndication Party under this Credit
Agreement or the Notes payable to such Syndication Party in respect of such
Advance (other than taxes imposed on the overall net income of such Syndication
Party); or (b) imposes or modifies any reserve, special deposit, or similar
requirements relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Syndication Party; or (c) imposes
any other condition affecting this Credit Agreement or the Notes payable to
such Syndication Party (or any of such extensions of credit or liabilities).
The Administrative Agent will notify Borrower of any event occurring after the
date of this Credit Agreement which will entitle such Syndication Party to
compensation pursuant to this Section as promptly as practicable after it
obtains knowledge thereof and determines to request such compensation. The
Administrative Agent shall include with such notice, a certificate from such
Syndication Party setting forth in reasonable detail the calculation of the
amount of such compensation. Determinations by the Administrative Agent for
purposes of this Section of the effect of any Regulatory Change on the costs of
such Syndication Party of making or maintaining an Advance or on amounts
receivable by such Syndication Party in respect of Advances, and of the
additional amounts required to compensate such Syndication Party in respect of
any Additional Costs, shall be conclusive absent manifest error, provided that
such determinations are made on a reasonable basis.
15.13 CAPITAL REQUIREMENTS. In the event after the date of this Credit
Agreement of the introduction of or any change in: (a) any law or regulation;
(b) the judicial, administrative, or other governmental interpretation of any
law or regulation; or (c) compliance by any Syndication Party or any
corporation controlling any such Syndication Party with any guideline or
request from any governmental authority (whether or not having the force of
law) has the effect of requiring an increase in the amount of capital required
or expected to be maintained by such Syndication Party or any corporation
controlling such Syndication Party, and such Syndication Party certifies, based
on a reasonable determination, that such increase is based in any part upon
such Syndication Party's obligations hereunder with respect to the 7 Year
Revolving Loan and/or the 10 Year Revolving Loan, and other similar
obligations, Borrower shall pay to such Syndication Party such additional
amount as shall be certified by such Syndication Party to the Administrative
Agent and to Borrower to be the net present value of (y) the amount by which
such increase in capital reduces the rate of return on capital which such
Syndication Party could have achieved over the period remaining until the 7
Year Maturity Date or the 10 Year Maturity Date, as applicable (depending upon
which Facility or Facilities such claim to increased costs is based), but for
such introduction or change, (z) multiplied by the product of such Syndication
Party's Individual 7 Year Pro Rata Share times the Aggregate 7 Year Commitment
or such Syndication Party's Individual 10 Year Pro Rata Share times the
Aggregate 10 Year Commitment, as applicable. The Administrative Agent will
notify Borrower of any event occurring after the date of this Credit Agreement
that will entitle any such Syndication Party to compensation pursuant to this
Section as promptly as practicable after it obtains knowledge thereof and of
such Syndication Party's determination to request such compensation. The
Administrative Agent shall include with such notice, a certificate from such
Syndication Party setting forth in reasonable detail the calculation of the
amount of such compensation. Determinations by any Syndication Party for
purposes of this Section of the effect of any increase in the amount of capital
required to be maintained by any such Syndication Party and of the amount of
compensation owed to any such Syndication Party under this Section shall be
conclusive absent manifest error, provided that such determinations are made on
a reasonable basis.
15.14 REPLACEMENT NOTES. Upon receipt by Borrower of evidence
satisfactory to it of: (a) the loss, theft, destruction or mutilation of any
Note, and (in case of loss, theft or destruction) of the agreement of the
Syndication Party to which the Note was payable to indemnify Borrower, and upon
surrender and cancellation of such Note, if mutilated; or (b) the assignment by
any Syndication Party of all or a portion of its Syndication Interest hereunder
and the Note relating thereto, pursuant to this Credit Agreement, then Borrower
will pay any unpaid principal and interest (and Funding Losses, if applicable)
then or previously due and payable on such Note and will (upon delivery of such
Note for cancellation, unless covered by subparagraph (a) of this Section)
deliver in lieu of such Note a new Note or, in the case of an assignment of a
portion of a Syndication Interest, new Notes, for any remaining balance.
15.15 MUTUAL RELEASE. Upon full indefeasible payment and satisfaction of
the Bank Debt and Notes and the other obligations contained in this Credit
Agreement, the parties, including Borrower, the Administrative Agent, the Co-
Arrangers, and each Syndication Party shall, except as provided in Article 14
hereof, thereupon automatically each be fully, finally, and forever released
and discharged from any further claim, liability, or obligation in connection
with the Bank Debt.
15.16 LIBERAL CONSTRUCTION. This Credit Agreement constitutes a fully
negotiated agreement between commercially sophisticated parties, each assisted
by legal counsel, and shall not be construed and interpreted for or against any
party hereto.
15.17 COUNTERPARTS. This Credit Agreement may be executed by the parties
hereto in separate counterparts, each of which, when so executed and delivered,
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof, each signed by less than all, but together signed by all, of the
parties hereto.
15.18 CONFIDENTIALITY. Each Syndication Party shall, subject to the
exceptions below, maintain the confidential nature of, and shall not use or
disclose, any of Borrower's financial information, confidential information or
trade secrets without first obtaining Borrower's written consent. Nothing in
this Section shall require any Syndication Party to obtain such consent
following the occurrence and during the continuation of an Event of Default in
connection with the exercise by the Administrative Agent or any Syndication
Party of its or their rights and remedies hereunder or under any of the other
Loan Documents. The obligations of the Syndication Parties shall in no event
apply to: (a) providing information about Borrower to any financial
institution contemplated in Sections 14.6, 14.13, and 14.25 hereof or to such
Syndication Party's parent holding company or any of such Syndication Party's
affiliates (provide such Person is bound by similar confidentiality provisions
limiting further disclosure); (b) any situation in which any Syndication Party
is required by law, regulation, or subpoena or required by any Governmental
Authority to disclose information; (c) providing information to counsel to the
Administrative Agent or any Syndication Party in connection with the
transactions contemplated by the Loan Documents or in connection with the
exercise of its or their rights or remedies thereunder; (d) providing
information to officers, directors, employees, agents and representatives of
such Syndication Party as need to know such information or to independent
auditors retained by such Syndication Party (it being understood that they
shall be informed by such Syndication Party of the confidential nature of such
information and that such Syndication Party shall take reasonable steps to
cause them to treat such information on a confidential basis); (e) any
information that is in or becomes part of the public domain otherwise than
through a wrongful act of such Syndication Party or any of its employees or
agents thereof; (f) any information that is in the possession of any
Syndication Party prior to receipt thereof from Borrower or any other Person
known to such Syndication Party to be acting on behalf of Borrower; (g) any
information that is independently developed by any Syndication Party; and (h)
any information that is disclosed to any Syndication Party by a third party
that has no obligation of confidentiality with respect to the information
disclosed. A Syndication Party's confidentiality requirements continue after
it is no longer a Syndication Party under this Credit Agreement.
15.19 LIMITATION OF LIABILITY. NEITHER BORROWER NOR ANY SUBSIDIARY MAY
MAKE ANY CLAIM AGAINST THE ADMINISTRATIVE AGENT, ANY SYNDICATION PARTY, OR THE
AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS THEREOF FOR ANY
SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES IN RESPECT OF ANY BREACH OR WRONGFUL
CONDUCT (WHETHER BASED IN CONTRACT, TORT, OR OTHERWISE) IN CONNECTION WITH,
ARISING OUT OF OR IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS
CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY ACT, OMISSION OR
EVENT OCCURRING IN CONNECTION THEREWITH. BORROWER HEREBY WAIVES, RELEASES AND
AGREES NOT TO SUE (AND AGREES NOT TO CONSENT TO ANY SUCH SUIT BY A SUBSIDIARY)
UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT
KNOWN OR SUSPECTED TO EXIST. IN ADDITION, BORROWER ACKNOWLEDGES AND AGREES
THAT NEITHER THE ADMINISTRATIVE AGENT NOR ANY SYNDICATION PARTY HAS ANY DUTY OR
REVIEW OR ADVISE BORROWER WITH RESPECT TO ANY PHASE OF ITS BUSINESS OPERATIONS
OF CONDITION, THE RELATIONSHIP BEING SOLELY THAT OF DEBTOR AND CREDITORS AND
THEIR BEING NO TRUST RELATIONSHIP OR RELIANCE.
15.20 INCREASE IN INDIVIDUAL COMMITMENT AMOUNTS. Neither the Individual 7
Year Commitment nor the Individual 10 Year Commitment, as applicable, of any
Syndication Party may be increased without (a) the prior written consent of
such Syndication Party and (b) if such increase would result in an increase in
the Aggregate 7 Year Commitment or the Aggregate 10 Year Commitment, as
applicable, compliance with Subsection 14.7.1(a) hereof.
[SIGNATURES BEGIN ON PAGE 80]
IN WITNESS WHEREOF, the parties have executed this Credit Agreement as of
the date first above written.
BORROWER:
PILGRIM'S PRIDE CORPORATION, a corporation formed
under the laws of the State of Delaware
By: _________________________________
Name: _________
Title: _________
ADMINISTRATIVE AGENT:
COBANK, ACB
By:
Name: Antony Bahr
Title: Vice President
CO-ARRANGER:
FARM CREDIT SERVICES OF AMERICA, FLCA
By:
Name: _________
Title: ___________
SYNDICATION PARTIES:
FARM CREDIT SERVICES OF AMERICA, FLCA
By: __________________________________
Name: _____
Title: _______
Contact Name: _________
Title: _________
Address: 206 South 19{th} Street
Omaha, NE 68102
Phone No.: ____
Fax No.: ________
e-mail address: _______-
Individual 7 Year Commitment: $__ZERO____.__
Individual 10 Year Commitment: $36,000,000.00
Payment Instructions:
Farm Credit Services of America, FLCA
ABA No.: _________
Acct. Name: ___________
Account No.: ________
Attn: ______________
Reference: Pilgrim's Pride
SYNDICATION PARTIES:
COBANK, ACB
By: __________________________________
Name: ___________
Title: _______
Contact Name: _________
Title: _________
Address: 5500 South Quebec Street
Englewood, CO 80111
Phone No.: 303/740-____
Fax No.: 303/740-____
e-mail address: _______-
Individual 7 Year Commitment: $5,000,000.00
Individual 10 Year Commitment: $94,000,000.00
Payment Instructions:
CoBank, ACB
ABA No.: _________
Acct. Name: ___________
Account No.: ________
Attn: ______________
Reference: Pilgrim's Pride
SYNDICATION PARTIES:
BANK AUSTRIA CREDITANSTALT CORPORATE FINANCE, INC.
By: __________________________________
Name: John G. Taylor
Title: _________________________________
By: __________________________________
Name: ________________________________
Title: _________________________________
Contact Name: John G. Taylor
Title: ___________________
Address: Two Ravinia Drive, Suite 1680
Atlanta, GA 30346
Phone No.: 770/390-1852
Fax No.: 770/390-1851
e-mail address: john.taylor@us.bacai.com-
Individual 7 Year Commitment: $10,000,000.00
Individual 10 Year Commitment: $10,000,000.00
Payment Instructions:
Chase Manhattan Bank NY
ABA:
For account of: Bank Austria AG
Account No.:
Ref: Pilgrim's Pride
SYNDICATION PARTIES:
CREDIT AGRICOLE INDOSUEZ
By: __________________________________
Name: Katherine L. Abbott
Title: _________________________________
By: __________________________________
Name: ________________________________
Title: _________________________________
Contact Name: Robert K. Hughes
Title: ___________________
Address: 55 East Monroe Street, Suite 4700
Chicago, IL 60603
Phone No.: 312/917-7442
Fax No.: 312/372-3455
e-mail address: _______-
Individual 7 Year Commitment: $15,000,000.00
Individual 10 Year Commitment: $__ZERO__.__
Payment Instructions:
Citibank, NA - New York
ABA:
Swift Code:
For account of: Credit Agricole Indosuez
Chicago Branch
Account No.:
Ref: Pilgrim's Pride
SYNDICATION PARTIES:
HARRIS TRUST AND SAVINGS BANK
By: __________________________________
Name: Curtis M. Flammini
Title: Vice President
Contact Name: Curtis M. Flammini
Title: Vice President
Address: 111 West Monroe Street
18{th} Floor West
Chicago, IL 60603
Phone No.: 312/461-4694
Fax No.: 312/765-8095
e-mail address: _______-
Individual 7 Year Commitment: $7,500,000.00
Individual 10 Year Commitment: $__ZERO__.__
Payment Instructions:
Harris Trust and Savings Bank Chicago, IL
ABA:
For account of Harris Trust & Savings
Bank
Account No.:
Ref: Pilgrim's Pride
SYNDICATION PARTIES:
SUNTRUST BANK, ATLANTA
By: __________________________________
Name: F. Steven Parrish
Title: _________________________________
Contact Name: Steve Parrish
Title: ____________
Address: 303 Peachtree Street NE, 3{rd} Floor
Atlanta, GA 30308
Phone No.: 404/724-3923
Fax No.: 404/230-5305
e-mail address: _______-
Individual 7 Year Commitment: $7,500,000.00
Individual 10 Year Commitment: $___ZERO_.__
Payment Instructions:
SunTrust Bank, Atlanta
ABA:
For account of Wire Clearing General
Account No.:
Attn: Patrice Ransom
Ref: Pilgrim's Pride Corporation
SYNDICATION PARTIES:
U.S. BANCORP AG CREDIT, INC.
By: __________________________________
Name: Douglas S. Hoffner
Title: Vice President
Contact Name: Douglas S. Hoffner
Title: Vice President
Address: 950 17{th} Street, Suite 350
Mail Station CNDT0321
Denver, CO 80202-2868
Phone No.: 303/585-6789
Fax No.: 303/585-4732
e-mail address: douglas.hoffner@usbank.com
Individual 7 Year Commitment: $15,000,000.00
Individual 10 Year Commitment: $___ZERO_.__
Payment Instructions:
U.S. Bancorp Ag Credit, Inc.
ABA:
For account of __________________
Account No.: ________
Attn: _________
Ref: Pilgrim's Pride
TABLE OF CONTENTS
1.1 Administrative Agent
1.2 Administrative Agent Office
1.3 Advance
1.4 Advance Date
1.5 Aggregate Commitment
1.6 Aggregate 7 Year Commitment
1.7 Aggregate 10 Year Commitment
1.8 Amortization
1.9 Applicable Lending Office
1.10 Applicable Margin
1.11 Appraisal
1.12 Appraised Value
1.13 Availability Period
1.14 Available Amount
1.15 Bank Debt
1.16 Banking Day
1.17 Base Rate
1.18 Borrower's Account
1.19 Borrower Benefit Plan
1.20 Capital Lease
1.21 Capital Lease Obligation
1.22 Casualty Event
1.23 Casualty Proceeds
1.24 Closing Date
1.25 Code
1.26 Comerica Loan
1.27 Committed 10 Year Advances
1.28 Committed 7 Year Advances
1.29 Compliance Certificate
1.30 Consolidated Current Assets
1.31 Consolidated Current Liabilities
1.32 Consolidated Interest Expense
1.33 Consolidated Net Income
1.34 Consolidated Subsidiary
1.35 Converted Loans
1.36 Current Assets
1.37 Current Liabilities
1.38 Current Ratio
1.39 Debt
1.40 Default Interest Rate
1.41 Depreciation
1.42 EBITDA
1.43 Environmental Laws
1.44 Environmental Regulations
1.45 ERISA
1.46 ERISA Affiliate
1.47 Facilities
1.48 Fiscal Quarter
1.49 Fiscal Year
1.50 Fixed Charge Coverage Ratio
1.51 Funding Share
1.52 GAAP
1.53 Good Faith Contest
1.54 Governmental Authority
1.55 Hancock Loan
1.56 Harris Loan
1.57 Hazardous Substances
1.58 Individual Commitment
1.59 Individual Outstanding 7 Year Obligations
1.60 Individual Outstanding 10 Year Obligations
1.61 Individual Pro Rata Share
1.62 Individual 7 Year Commitment
1.63 Individual 7 Year Lending Capacity
1.64 Individual 7 Year Pro Rata Share
1.65 Individual 10 Year Commitment
1.66 Individual 10 Year Lending Capacity
1.67 Individual 10 Year Pro Rata Share
1.68 Intangible Asset
1.69 Interest Expense
1.70 Investment
1.71 Leverage Ratio
1.72 LIBO Rate
1.73 Lien
1.74 Loans
1.75 Loan Documents
1.76 Material Adverse Effect
1.77 Material Agreements
1.78 Multiemployer Plan
1.79 Net Tangible Assets
1.80 Net Working Capital
1.81 Net Worth
1.82 Note or Notes
1.83 Operating Lease
1.84 Organization Documents
1.85 Pari Passu Loan
1.86 Person
1.87 Plan
1.88 Potential Default
1.89 Prohibited Transaction
1.90 Reportable Event
1.91 Required Lenders
1.92 Security Documents
1.93 7 Year Maturity Date
1.94 7 Year Revolving Loan
1.95 Significant Software
1.96 Subsidiary
1.97 Successor Agent
1.98 Syndication Parties
1.99 Tangible Net Worth
1.100 10 Year Financial Projections
1.101 10 Year Maturity Date
1.102 10 Year Revolving Loan
1.103 Third Party Provider
1.104 Total Liabilities
1.105 Year 2000 Compliant
1.106 Y2K Compliance Test
ARTICLE 2. 7 YEAR REVOLVING LOAN
2.1 7 Year Revolving Loan
2.1.1 Individual Syndication Party 7 Year Commitment
2.1.2 Individual Syndication Party 7 Year Pro Rata Share
2.2 Aggregate 7 Year Commitment; Available Amount
2.3 7 Year Revolving Promissory Notes
2.4 Syndication Party Records
2.5 Use of Proceeds
2.6 Advances; Funding
2.7 Syndication Party Funding Failure
2.8 Reduction of Aggregate 7 Year Commitment
ARTICLE 3. 10 YEAR LOAN
3.1 10 Year Loan
3.1.1 Individual Syndication Party 10 Year Commitment
3.1.2 Individual Syndication Party 10 Year Pro Rata Share
3.2 Aggregate 10 Year Commitment; Available Amount
3.3 10 Year Loan Promissory Notes
3.4 Syndication Party Records
3.5 Use of Proceeds
3.6 Advances; Funding
3.7 Syndication Party Funding Failure
3.8 Reduction of Aggregate 10 Year Commitment
ARTICLE 4. INTEREST AND FEES
4.1 Interest
4.1.1 Base Rate Option
4.1.2 LIBO Rate Option
4.2 Additional Provisions for LIBO Rate Loans
4.2.1 Inapplicability or Unavailability of LIBO Rate
4.2.2 Change in Law; LIBO Rate Loan Unlawful
4.3 Default Interest Rate
4.4 Interest Calculation
4.5 Fees
4.5.1 Commitment Fee
4.6 Interest Rate Margins; Commitment Fee Factor
4.6.1 Calculation
4.6.2 Margin Report
4.7 Maximum Interest Rate
ARTICLE 5.PAYMENTS; FUNDING LOSSES
5.1 Principal Payments
5.1.1 Converted Loans
5.1.2 Automatic Conversion
5.1.3 Principal Payment Schedule
5.2 Interest Payments
5.3 Voluntary Prepayments
5.4 Mandatory Prepayments
5.5 Application of Principal Payments
5.5.1 Scheduled Payments
5.5.2 Voluntary Prepayments
5.5.3 Mandatory Prepayments
5.6 Manner of Payment
5.7 Distribution of Principal and Interest Payments
5.7.1 Principal and Interest Payments on 7 Year Revolving Loan
5.7.2 Principal and Interest Payments on 10 Year Revolving Loan
5.8 Funding Losses
ARTICLE 6. BANK EQUITY INTERESTS
ARTICLE 7. SECURITY
7.1 Borrower's Assets
7.2 Guaranty
ARTICLE 8 REPRESENTATIONS AND WARRANTIES
8.1 Organization, Good Standing, Etc.
8.2 Corporate Authority, Due Authorization; Consents
8.3 Litigation
8.4 No Violations
8.5 Binding Agreement
8.6 Compliance with Laws
8.7 Principal Place of Business
8.8 Payment of Taxes
8.9 Licenses and Approvals
8.10 Employee Benefit Plans
8.10.1 Employee Benefit Plans; Multiemployer Plans
8.10.2 Pension Benefit Plans
8.10.3 Prohibited Transactions
8.10.4 Civil/Criminal Action
8.10.5 Funding
8.10.6 Compliance With Law
8.10.7 Multiple Employer Plan
8.10.8 Plan Termination Liability; Multiemployer Plan Withdrawal
Liability
8.10.9 Pension Plan Termination
8.10.10 Reportable Event
8.10.11 Payment of Contributions
8.10.12 Welfare Benefit Plans
8.11 Equity Investments
8.12 Title to Real and Personal Property
8.13 Financial Statements
8.14 Environmental Compliance
8.15 Fiscal Year
8.16 Material Agreements
8.17 Regulations U and X
8.18 Trademarks, Tradenames
8.19 No Default on Outstanding Judgments or Orders
8.20 No Default in Other Agreements
8.21 Labor Matters; Labor Agreements
8.22 Governmental Regulation
8.23 Year 2000 Compliance
8.24 Confidential Information Memorandum
8.25 10-Year Financial Projections
8.26 Solvency
8.27 Disclosure
ARTICLE 9. CONDITIONS TO ADVANCES
9.1 Conditions to Closing
9.1.1 Loan Documents; Possession of Collateral; and Guaranty
9.1.2 Approvals
9.1.3 Organizational Documents
9.1.4 Evidence of Insurance
9.1.5 UCC Searches; Filings
9.1.6 Title Insurance; Survey
9.1.7 Appointment of Agent for Service
9.1.8 No Material Change
9.1.9 Fees and Expenses
9.1.10 Evidence of Corporate Action
9.1.11 Opinion of Counsel
9.1.12 10 Year Financial Projections
9.1.13 Available Amount Report; Appraisals
9.1.14 Further Assurances
9.2 Borrowing Notice; Funding Notice
9.3 Conditions to Advance
9.3.1 Default
9.3.2 Availability Period
9.3.3 Representations and Warranties; Fees and Expenses
9.3.4 No Material Change
9.4 Limitation on LIBO Rate Loans
9.5 Illegality of Loan
9.6 Treatment of Affected Loans
ARTICLE 10. AFFIRMATIVE COVENANTS
10.1 Books and Records
10.2 Reports and Notices
10.2.1 Annual Financial Statements
10.2.2 Quarterly Financial Statements
10.2.3 Notice of Default
10.2.4 ERISA Reports
10.2.5 Notice of Litigation
10.2.6 Notice of Material Adverse Effect
10.2.7 Notice of Environmental Proceedings
10.2.8 Regulatory and Other Notices
10.2.9 Adverse Action Regarding Required Licenses
10.2.10 Notice of Certain Changes
10.2.11 Available Amount Reports
10.2.12 Appraisals
10.2.13 Filings and Reports
10.2.14 Additional Information
10.3 [This Section Intentionally Omitted]
10.4 Maintenance of Existence and Qualification
10.5 Compliance with Legal Requirements and Agreements
10.6 Compliance with Environmental Laws
10.7 Taxes
10.8 Insurance
10.9 Title to and Maintenance of Properties
10.10 Payment of Liabilities
10.11 Inspection
10.12 Required Licenses; Permits; Etc.
10.13 ERISA
10.14 Financial Covenants
10.14.1 Leverage Ratio
10.14.2 Tangible Net Worth
10.14.3 Current Ratio.
10.14.4 Net Tangible Assets to Total Liabilities
10.14.5 Fixed Charge Coverage Ratio
10.14.6 Net Working Capital
10.15 Year 2000 Compliance and Reports
10.16 Appraised Property
ARTICLE 11. NEGATIVE COVENANTS
11.1 Borrowing
11.2 No Other Businesses
11.3 Liens
11.4 Sale of Assets
11.5 Liabilities of Others
11.6 Loans
11.7 Merger; Acquisitions; Business Form; Etc.
11.8 Investments
11.9 Transactions With Related Parties
11.10 Dividends, etc.
11.11 ERISA
11.12 Change in Fiscal Year
11.13 Leases
11.14 Principal Payments
ARTICLE 12. INDEMNIFICATION
12.1 General; Stamp Taxes; Intangibles Tax
12.2 Indemnification Relating to Hazardous Substances
ARTICLE 13. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
13.1 Events of Default
13.2 No Advance
13.3 Rights and Remedies
13.4 Agreement Regarding, and Waiver of, Certain Rights
ARTICLE 14. AGENCY AGREEMENT
14.1 Funding of Syndication Interest
14.2 Syndication Parties' Obligations to Remit Funds
14.3 Syndication Party's Failure to Remit Funds
14.4 Agency Appointment
14.5 Power and Authority of the Administrative Agent
14.5.1 Advice
14.5.2 Documents; Intercreditor Agreement
14.5.3 Proceedings
14.5.4 Retain Professionals
14.5.5 Incidental Powers
14.6 Duties of the Administrative Agent
14.6.1 Possession of Documents
14.6.2 Distribute Payments
14.6.3 Loan Administration
14.6.4 Action Upon Default
14.6.5 Indemnification as Condition to Action
14.6.6 Forwarding of Information
14.7 Consent Required for Certain Actions
14.7.1 Unanimous
14.7.2 Required Lenders
14.7.3 Action Without Vote
14.7.4 Vote of Participants
14.8 Distribution of Principal and Interest
14.9 Distribution of Certain Amounts
14.9.1 Funding Losses
14.9.2 Fees
14.10 Possession of Loan Documents
14.11 Collateral Application
14.12 Amounts Required to be Returned
14.13 Reports and Information to Syndication Parties
14.14 Standard of Care
14.15 No Trust Relationship
14.16 Sharing of Costs and Expenses
14.17 Syndication Parties' Indemnification of the Administrative Agent
14.18 Books and Records
14.19 Administrative Agent Fee
14.20 The Administrative Agent's Resignation or Removal
14.21 Representations and Warranties of All Parties
14.22 Representations and Warranties of CoBank
14.23 Syndication Parties' Independent Credit Analysis
14.24 No Joint Venture or Partnership
14.25 Purchase for Own Account; Restrictions on Transfer; Participations
14.26 Certain Participants' Voting Rights
14.27 Method of Making Payments
14.28 Events of Syndication Default/Remedies
14.28.1 Syndication Party Default
14.28.2 Remedies
14.29 Withholding Taxes
14.30 Amendments Concerning Agency Function
14.31 Further Assurances
ARTICLE 15. MISCELLANEOUS
15.1 Costs and Expenses
15.2 Service of Process and Consent to Jurisdiction
15.3 Jury Waiver
15.4 Notices
15.4.1 Borrower
15.4.2 Administrative Agent
15.4.3 FCSA
15.4.4 Syndication Parties
15.5 Liability of Administrative Agent
15.6 Successors and Assigns
15.7 Severability
15.8 Entire Agreement
15.9 Applicable Law
15.10 Captions
15.11 Complete Agreement; Amendments
15.12 Additional Costs of Maintaining Loan
15.13 Capital Requirements
15.14 Replacement Notes
15.15 Mutual Release
15.16 Liberal Construction
15.17 Counterparts
15.18 Confidentiality
15.19 Limitation of Liability
EXHIBITS
Exhibit 1.29 Compliance Certificate
Exhibit 1.85 Intercreditor Agreement Form
Exhibit 2.3 7 Year Revolving Loan Note Form
Exhibit 3.3 10 Year Revolving Loan Note Form
Exhibit 4.6.2 Margin Report Form
Exhibit 5.1.3 Principal Payment Schedule
Exhibit 7.1 Pledged Facilities
Exhibit 8.3 Litigation
Exhibit 8.8 Payment of Taxes
Exhibit 8.10 Employee Benefit Plans, Borrower Pension Plans, Multiemployer
Plans
Exhibit 8.11 Equity Investments
Exhibit 8.14 Environmental Compliance
Exhibit 8.16 Material Agreements
Exhibit 8.21 Labor Matters and Agreements
Exhibit 9.1.6 Survey Exhibit
Exhibit 9.2 Borrowing Notice Form
Exhibit 10.2.11 Available Amount Report Form
Exhibit 11.3 Liens on Closing Date
Exhibit 11.8 Investments
Exhibit 14.25 Syndication Acquisition Agreement
Exhibit 14.26 Participants with Voting Rights
Exhibit 14.27 Wire Instructions
Schedule 1 Syndication Parties and Individual Commitments