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AMENDED AND RESTATED CREDIT AGREEMENT
among
DARLING INTERNATIONAL INC.,
as the Borrower,
BANKBOSTON, N. A.,
as Agent,
COMERICA BANK
CREDIT LYONNAIS NEW YORK BRANCH
and
WELLS FARGO BANK (TEXAS), NATIONAL ASSOCIATION
as co-agents
and
the other banks named herein
22 January 1999
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TABLE OF CONTENTS
ARTICLE 1 - Definitions...................................................... 1
Section 1.1 Definitions............................................ 1
Section 1.2 Other Definitional Provisions.......................... 12
Section 1.3 Accounting Terms and Determinations.................... 13
Section 1.4 Time of Day............................................ 13
ARTICLE 2 - Revolving Credit Facility........................................ 14
Section 2.1 Revolving Commitments.................................. 14
Section 2.2 Notes.................................................. 15
Section 2.3 Repayment of Revolving Loans........................... 15
Section 2.4 Use of Proceeds........................................ 15
Section 2.5 Fees................................................... 15
Section 2.6 Reduction or Termination of Revolving Commitments...... 15
Section 2.7 Letters of Credit...................................... 16
(a) Commitment to Issue.................................... 16
(b) Letter of Credit Request Procedure..................... 16
(c) Letter of Credit Fees.................................. 17
(d) Funding of Drawings.................................... 17
(e) Reimbursements......................................... 17
(f) Reimbursement Obligations Absolute..................... 18
(g) Issuer Responsibility.................................. 18
Section 2.8 Swingline Loans........................................ 19
(a) Swingline Commitment................................... 19
(b) Swingline Note......................................... 19
(c) Repayment of Swingline Loans;
Funding of Participation............................... 19
(d) Use of Proceeds........................................ 20
(e) Reduction or Termination of Swingline Commitment....... 20
ARTICLE 3 - Term Loan........................................................ 20
Section 3.1 Notes.................................................. 20
Section 3.2 Repayment of Term Loans................................ 20
ARTICLE 4 - Interest and Fees................................................ 21
Section 4.1 Interest Rate.......................................... 21
Section 4.2 Payment Dates.......................................... 21
Section 4.3 Default Interest....................................... 21
Section 4.4 Conversion of Libor Accounts........................... 22
Section 4.5 Computations........................................... 22
ARTICLE 5 - Administrative Matters........................................... 22
Section 5.1 Borrowing Procedure.................................... 22
Section 5.2 Minimum Amounts........................................ 22
Section 5.3 Certain Notices........................................ 23
Section 5.4 Prepayments............................................ 23
(a) Voluntary Prepayments.............................. 23
(b) Mandatory Prepayments.............................. 24
(i) Asset Dispositions and Income Tax Refunds.. 24
(ii) Excess Cash Flow........................... 25
(iii) OverAdvance................................ 26
(iv) Control of Cash and Application to
Obligations................................ 26
(v) Breakfunding Costs......................... 27
Section 5.5 Method of Payment...................................... 27
Section 5.6 Pro Rata Treatment; Distribution of Proceeds of
Collateral and Collection on the Guaranty.............. 28
Section 5.7 Sharing of Payments.................................... 30
Section 5.8 Non-Receipt of Funds by the Agent...................... 30
Section 5.9 Withholding Taxes...................................... 30
Section 5.10 Withholding Tax Exemption.............................. 31
Section 5.11 Participation Obligations Absolute;
Failure to Fund Participation.......................... 31
ARTICLE 6 - Yield Protection and Illegality.................................. 32
Section 6.1 Additional Costs....................................... 32
Section 6.2 Illegality............................................. 33
Section 6.3 Compensation........................................... 33
Section 6.4 Capital Adequacy....................................... 33
Section 6.5 Replacement of a Bank.................................. 34
ARTICLE 7 - Conditions Precedent............................................. 34
Section 7.1 Effectiveness of Agreement............................. 34
Section 7.2 Loans and Letters of Credit............................ 36
ARTICLE 8 - Representations and Warranties................................... 37
Section 8.1 Corporate Existence.................................... 37
Section 8.2 Financial Statements................................... 37
Section 8.3 Corporate Action; No Breach............................ 37
Section 8.4 Operation of Business.................................. 37
Section 8.5 Litigation and Judgments............................... 38
Section 8.6 Rights in Properties; Liens; Nonproductive Assets...... 38
Section 8.7 Enforceability......................................... 38
Section 8.8 Approvals.............................................. 38
Section 8.9 Debt................................................... 38
Section 8.10 Taxes.................................................. 38
Section 8.11 Margin Securities...................................... 39
Section 8.12 ERISA.................................................. 39
Section 8.13 Disclosure............................................. 39
Section 8.14 Subsidiaries........................................... 39
Section 8.15 Agreements............................................. 40
Section 8.16 Compliance with Laws................................... 40
Section 8.17 Investment Company Act................................. 40
Section 8.18 Public Utility Holding Company Act..................... 40
Section 8.19 Environmental Matters.................................. 40
Section 8.20 Solvency............................................... 41
ARTICLE 9 - Positive Covenants............................................... 41
Section 9.1 Reporting Requirements................................. 41
Section 9.2 Maintenance of Existence; Conduct of Business.......... 44
Section 9.3 Maintenance of Properties.............................. 44
Section 9.4 Taxes and Claims....................................... 44
Section 9.5 Insurance; Casualty and Condemnation Proceeds.......... 44
Section 9.6 Inspection Rights...................................... 45
Section 9.7 Keeping Books and Records.............................. 45
Section 9.8 Compliance with Laws................................... 45
Section 9.9 Compliance with Agreements............................. 45
Section 9.10 Further Assurances; Post Closing Items; Exceptions to
Perfection and other Collateral Matters............ 45
(a) Further Assurance.................................. 45
(b) Post Closing Items; Perfection and Protection of
Liens on Personal Property......................... 46
(c) Deposit Accounts................................... 47
(d) Creation, Perfection and Protection of
Liens on Real Property............................. 47
(e) Insignificant Subsidiaries......................... 49
Section 9.11 ERISA.................................................. 49
Section 9.12 Packers and Stockyards Act Compliance.................. 49
ARTICLE 10 - Negative Covenants.............................................. 50
Section 10.1 Debt.................................................. 50
Section 10.2 Limitation on Liens and Restrictions on Subsidiaries.. 51
Section 10.3 Mergers, Etc.......................................... 52
Section 10.4 Restricted Junior Payments............................ 53
ii
Section 10.5 Investments........................................... 53
Section 10.6 Limitation on Issuance of Capital Stock............... 54
Section 10.7 Transactions With Affiliates.......................... 54
Section 10.8 Disposition of Assets................................. 54
Section 10.9 Sale and Leaseback.................................... 56
Section 10.10 Lines of Business..................................... 56
ARTICLE 11 - Financial Covenants 56 Section 11.1 Consolidated Net Worth 56
Section 11.2 Adjusted EBITDA 56 Section 11.3 Interest Coverage57
Section 11.4 Capital Expenditure Limits............................. 58
ARTICLE 12 - Default......................................................... 59
Section 12.1 Events of Default..................................... 59
Section 12.2 Remedies.............................................. 62
Section 12.3 Cash Collateral....................................... 62
Section 12.4 Performance by the Agent;............................. 63
Section 12.5 Set-off............................................... 63
Section 12.6 Continuing Event of Default........................... 63
ARTICLE 13 - The Agent....................................................... 64
Section 13.1 Appointment, Powers and Immunities.................... 64
Section 13.2 Rights of the Agent as a Bank......................... 64
Section 13.3 Defaults.............................................. 65
Section 13.4 Indemnification....................................... 65
Section 13.5 Independent Credit Decisions.......................... 66
Section 13.6 Several Commitments................................... 66
Section 13.7 Successor Agent....................................... 66
Section 13.8 Agent Fee............................................. 66
Section 13.9 Deposit Accounts held at Agent........................ 67
Section 13.10 Co-Agent.............................................. 67
Section 13.11 Approved Bank Affiliates Rights....................... 67
ARTICLE 14 - Miscellaneous................................................... 67
Section 14.1 Expenses.............................................. 67
Section 14.2 Indemnification....................................... 68
Section 14.3 Limitation of Liability............................... 69
Section 14.4 No Duty............................................... 69
Section 14.5 No Fiduciary Relationship............................. 69
Section 14.6 Equitable Relief...................................... 69
Section 14.7 No Waiver; Cumulative Remedies........................ 69
Section 14.8 Successors and Assigns................................ 69
Section 14.9 Survival.............................................. 72
Section 14.10 Entire Agreement; Amended and Restatement; Release.... 72
Section 14.11 Amendments............................................ 73
Section 14.12 Maximum Interest Rate................................. 74
Section 14.13 Notices............................................... 74
Section 14.14 Governing Law......................................... 74
Section 14.15 Counterparts.......................................... 75
Section 14.16 Severability.......................................... 75
Section 14.17 Headings.............................................. 75
Section 14.18 Non-Application of Chapter 346 of Texas Finance Code.. 75
Section 14.19 Construction.......................................... 75
Section 14.20 Independence of Covenants............................. 75
Section 14.21 Waiver of Jury Trial.................................. 75
Section 14.22 Confidentiality....................................... 75
Section 14.23 Waiver of Continuing Defaults......................... 76
iii
Section 14.24 Conflict with Loan Documents.......................... 76
iv
INDEX TO EXHIBITS
Exhibit Description of Exhibit
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"A" Revolving Note
"B" Swingline Note
"C" Term Note
"D" Guaranty
"E" Borrower Security Agreement
"F" Subsidiary Security Agreement
"G" Assignment and Acceptance
"H" Compliance Certificate
INDEX TO SCHEDULES
Schedule Description of Schedule
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1.1(a) Excluded Real Property
8.6 Title Exceptions
8.10 Pending Investigations by Taxing Authorities
2.7(a) Existing Letters of Credit
8.14 List of Subsidiaries
9.10(a) Vehicle Titles; Abandon Foreign
Registrations
10.1 Existing Debt
10.2 Existing Liens
10.5 Existing Investments
10.8 Nonproductive Assets
14.8 Ineligible Assignees
v
AMENDED AND RESTATED CREDIT AGREEMENT
-------------------------------------
THIS AMENDED AND RESTATED CREDIT AGREEMENT ("Agreement"), dated as of
January 22, 1999, is among DARLING INTERNATIONAL INC., a corporation duly
organized and validly existing under the laws of the State of Delaware (the
"Borrower"), each of the banks or other lending institutions which is or which
may from time to time become a signatory hereto or any successor or assignee
thereof (individually, a "Bank" and, collectively, the "Banks"), COMERICA BANK,
CREDIT LYONNAIS NEW YORK BRANCH and WELLS FARGO BANK (TEXAS), NATIONAL
ASSOCIATION, each individually as a Bank and as a co-agent and BANKBOSTON, N.A.,
individually as a Bank and as agent for itself, the other Banks and the other
Secured Parties (in its capacity as agent, together with its successors in such
capacity, the "Agent").
R E C I T A L S:
----------------
A. The Borrower, the Agent and the Banks are parties to that certain Credit
Agreement dated as of June 5, 1997 (as the same has been amended and otherwise
modified, the "Original Agreement").
B. Events of Default occurred under the Original Agreement as described in
that certain Forbearance Agreement dated as of December 14, 1998 among the
Borrower, the Banks and Agent (as modified, the "Forbearance Agreement"). The
Borrower and the Obligated Parties have requested that the Banks waive the
Continuing Defaults (as defined in the Forbearance Agreement) and amend and
restate the Original Agreement.
C. The Banks are willing to waive the Continuing Defaults and amend and
restate the Original Agreement upon the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions
-----------
Section 1.1 Definitions . As used in this Agreement, the following
terms have the following meanings:
"Acceleration Event" has the meaning specified in subsection 5.4(b)(iv).
"Account" means either a Base Rate Account or a Libor Account.
"Additional Costs" has the meaning specified in Section 6.1.
"Adjusted EBITDA" has the meaning specified in Section 11.2. "Affiliate"
means, as to any Person, any other Person (a) that directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with, such Person, (b) that directly or indirectly beneficially
owns or holds five percent (5%) or more of any class of voting stock of such
Person, or (c) five percent (5%) or more of the voting stock of which is
directly or indirectly
1
beneficially owned or held by the Person in question. The term "control" means
the possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract, or otherwise; provided, however, in
no event shall the Agent or any Bank be deemed an Affiliate of the Borrower or
any Subsidiary.
"Agent" has the meaning set forth in the introductory paragraph of this
Agreement.
"Agreement" has the meaning set forth in the introductory paragraph of this
Agreement. "Applicable Lending Office" means for each Bank and each type of
Account, the lending office of such Bank (or of an Affiliate of such Bank)
designated for such Account below its name on the signature pages hereof or such
other office of such Bank (or of an Affiliate of such Bank) as such Bank may
from time to time specify to the Borrower and the Agent as the office by which
its Loans subject to Accounts of such type are to be made and maintained.
"Approved Bank Affiliates" means, with respect to each Bank listed below, the
Person or Persons identified below opposite the name of such Bank:
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Bank Affiliate
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1. Wells Fargo Bank (Texas), National Association Wells Fargo Bank, National Association
Regulas West, LLC
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2. The First National Bank of Chicago NBD Bank
Banc One Leasing Corporation
- -----------------------------------------------------------=========================================================
3. SunTrust Bank, Atlanta STI Credit Corp
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4. Comerica Bank Comerica Bank, Texas
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"Assignment and Acceptance" means an assignment and acceptance entered into
by a Bank and its assignee and accepted by the Agent pursuant to Section 14.8,
in substantially the form of Exhibit "G".
"Available Cash" has the meaning set forth in Subsection 5.4(b)(iv).
"Bank" has the meaning set forth in the introductory paragraph of this
Agreement.
"BankBoston Accounts" has the meaning set forth in Section 13.9.
"Base Rate" means, at any time, the rate of interest per annum then most
recently established by BankBoston, N.A. as its base rate, which rate may not be
the lowest rate of interest charged by BankBoston, N.A. to its borrowers. Each
change in any interest rate provided for herein based upon the Base Rate
resulting from a change in the Base Rate shall take effect without notice to the
Borrower at the time of such change in the Base Rate.
"Base Rate Account" means a portion of a Loan that bears interest at a rate
based upon the Base Rate.
"Borrower" has the meaning set forth in the introductory paragraph of this
Agreement.
2
"Borrower Security Agreement" means the security agreement between the
Borrower and the Agent, for the benefit of the Secured Parties, in substantially
the form of Exhibit "E", as the same may be amended or otherwise modified.
"Business Day" means (a) any day excluding Saturday, Sunday, and any day
which either is a legal holiday under the laws of the States of Massachusetts or
Texas or is a day on which banking institutions located in either such State are
closed, and (b), with respect to all payments, Conversions, and notices in
connection with Loans subject to Libor Accounts, any day which is a Business Day
described in clause (a) above and which is also a day on which dealings in
Dollar deposits are carried out in the London interbank market.
"Capital Expenditures" means, for any period and any Person, all
expenditures of such Person which are classified as capital expenditures on the
consolidated statement of cash flows of such Person in accordance with GAAP,
including, without limitation, all such expenditures so classified as "recurring
capital expenditures" and all such expenditures associated with Capital Lease
Obligations.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Classified Subsidiary" has the meaning set forth in the definition of
Insignificant Subsidiary.
"Closing Date" means January 29, 1999.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means the property in which Liens have been granted to the
Agent for the benefit of the Secured Parties pursuant to the Borrower Security
Agreement, the Subsidiary Security Agreement, any Mortgage, or any other
agreement, document, or instrument executed by the Borrower or a Subsidiary in
accordance with Section 9.10, whether such Liens are now existing or hereafter
arise.
"Commercially Reasonable Efforts" means, with respect to the obligation to
obtain from a third party any of the documentation required by Section 9.10,
that the Borrower or applicable Obligated Party shall have expended, in good
faith and within the time period required by Section 9.10, all reasonable
efforts to obtain the applicable document, or an acceptable substitute, from
such third party.
"Commitment Percentage" means, as to any Bank, the percentage equivalent of
a fraction (a) the numerator of which is the amount of the Revolving Commitments
of such Bank and (b) the denominator of which is the aggregate amount of the
Revolving Commitments of all Banks.
"Commitments" means, as to each Bank, such Bank's Revolving Commitment,
and, if such Bank is the Agent, the Swingline Commitment.
"Compliance Certificate" means a certificate in substantially the form of
Exhibit "H" properly completed and executed by the chief financial officer or
treasurer of the Borrower.
3
"Concentration Account" means a deposit account established at the Agent by
the Borrower and controlled by the Agent for the benefit of the Secured Parties
in which all funds received through the Lockbox Accounts shall be deposited.
"Consolidated Net Worth" has the meaning specified in Section 11.1.
"Contingent Primary Obligations" means, at any time, all identifiable and
quantifiable contingent and unliquidated obligations, indebtedness, and
liabilities of the Borrower to any Secured Party arising from, pursuant to, or
in connection with the Loan Documents, the SWAP Documents and the Deposit and
Cash Management Services, whether direct, indirect, related, unrelated, joint,
several, or joint and several, including without limitation, the Reimbursement
Obligations and the potential liability of the Borrower under any SWAP
Documents.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 4.4 or Article 6 of a Libor Account into a Base Rate
Account.
"Debt" means as to any Person at any time (without duplication): (a) all
obligations of such Person for borrowed money; (b) all obligations of such
Person evidenced by bonds, notes, debentures, or other similar instruments; (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable of such Person arising in the ordinary
course of business that are not past due by more than ninety (90) days; (d) all
Capital Lease Obligations of such Person; (e) all Debt or other obligations of
others Guaranteed by such Person; (f) all obligations secured by a Lien existing
on property owned by such Person, whether or not the obligations secured thereby
have been assumed by such Person or are non-recourse to the credit of such
Person; (g) all reimbursement obligations of such Person (whether contingent or
otherwise) in respect of letters of credit, bankers' acceptances, surety or
other bonds, and similar instruments; (h) all liabilities of such Person in
respect of unfunded vested benefits under any Plan; and (i) all obligations of
such Person arising in connection with noncompete, consulting, and similar
agreements which are classified as liabilities on a balance sheet in accordance
with GAAP. In determining the Dollar amount of Debt of a Person for any purpose
of this Agreement, the Dollar amount of any Debt of the type described in clause
(f) which has not been assumed by such Person and which is non-recourse to the
credit of such Person, shall be equal to the lesser of the amount of the Debt so
secured or the fair market value of the applicable property.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default. The compliance with the financial covenants set forth in Sections 11.2
and 11.3 is tested as of the end of a Fiscal Quarter (the "Test Date") for a
trailing period of time specified therein (the "Test Period"). As of any date
after one Test Date but prior to the next Test Date, the financial performance
of the Borrower and the Subsidiaries for the period from the beginning of the
then current Test Period to any date prior to such next Test Date shall not be
an event or condition which with notice or lapse of time or both would become an
Event of Default for purposes of this definition of Default; provided the
foregoing provisions shall not prevent: (i) the characterization of a change in
the financial performance of the Borrower and the Subsidiaries as a "material
adverse change" for purposes of Section 8.2, if in fact such change is material
and adverse within the meaning of Section 8.2; (ii) the characterization of a
change in the financial performance of the Borrower and the Subsidiaries as
having a "Material Adverse Effect" for any purpose of this Agreement, if in fact
such change has or would have a "Material Adverse Effect"; or (iii) the
occurrence of an Event of Default for failure to comply with such financial
covenants on and at any time after such next Test Date as calculated for the
related Test Period.
"Default Rate" means a rate per annum equal to the Base Rate plus three
percent (3.0%).
4
"Deposit and Cash Management Services" means the deposit and/or cash
management products and services provided by a Secured Party in connection with
the maintenance of the Lockbox Accounts, the Concentration Account or any of the
other deposit or other accounts described on Schedule 3.2 to the Borrower
Security Agreement and the Subsidiary Security Agreement.
"Deposit and Cash Management Services Obligations" means all the
obligations of the Borrower to a Bank or an Approved Bank Affiliate (a) to pay
the fees charged for the Deposit and Cash Management Services and (b) to
reimburse such Bank or Approved Bank Affiliate for any credit extended on
uncollected funds in an amount not to exceed such uncollected funds or the
amount of any item (including checks and automated clearing house credits)
credited to an account but which is subsequently returned unpaid or returned for
any other reason.
"Designated Leased Property" has the meaning specified in subsection
9.10(d).
"Dollars" and "$" mean lawful money of the United States of America.
"EBITDA" means, for any period and any Person, the total of the following
each calculated without duplication for such Person on a consolidated basis for
such period: (a) Net Income; plus (b) any provision for (or less any benefit
from) income or franchise taxes included in determining Net Income; plus (c) Net
Interest Expense deducted in determining Net Income; plus (d) amortization and
depreciation expense deducted in determining Net Income.
"Eligible Assignee" has the meaning specified in Section 14.8.
"Environmental Laws" means any and all federal, state, and local laws,
regulations, and requirements pertaining to health, safety, or the environment,
as such laws, regulations, and requirements may be amended or supplemented from
time to time.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses, (including,
without limitation, all fees, disbursements, and expenses of counsel, expert and
consulting fees, and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim or demand,
by any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including, without limitation, any
Environmental Law, permit, order, or agreement with any Governmental Authority
or other Person, arising from environmental, health, or safety conditions or the
Release or threatened Release of a Hazardous Material into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"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 the Borrower or is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower.
"Event of Default" has the meaning specified in Section 12.1.
5
"Excess Cash Flow" has the meaning specified in subsection 5.4(b)(ii).
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (b) if such rate is not so published on such next
succeeding Business Day, the Federal Funds Rate for any day shall be the average
rate charged to the Agent on such day on such transactions as determined by the
Agent.
"Fee Owned Designated Property" means each parcel of real property owned by
Borrower or a Significant Subsidiary in fee other than those parcels described
on Schedule 1.1 (a).
"Fiscal Quarters" means the four (4) periods falling in each Fiscal Year,
each such period being thirteen (13) or fourteen (14) weeks in duration, as
applicable, with the first such period in any Fiscal Year beginning on the first
day of such Fiscal Year and the last such period in any Fiscal Year ending on
the last Saturday closest to December 31.
"Fiscal Year" means the fifty-two (52) or fifty-three (53) week period, as
the case may be, beginning on the date which is one day after the date of the
end of the similar preceding period and ending on the Saturday closest to
December 31. "Forbearance Agreement" has the meaning specified in the Recitals
to this Agreement.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants and/or in statements of
the Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a "consistent basis" when the accounting principles
applied in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
"General CAPEX Basket" has the meaning specified in Section 11.4.
"Governmental Authority" means any nation or government, any state or
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities, or services,
to take-or-pay, or to maintain financial statement conditions or otherwise) or
(b) entered into for the purpose of assuring in any other manner the obligee of
such Debt or other obligation of the payment thereof or to protect the obligee
against loss in respect thereof (in whole or in part); provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning.
6
"Guaranty" means the guaranty of a Significant Subsidiary in favor the
Secured Parties, in substantially the form of Exhibit "D", as the same may be
amended or otherwise modified from time to time.
"Hazardous Material" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law.
"Insignificant Subsidiary" means any Subsidiary (other than International
Processing Corporation, International Transportation Service, Inc., The Standard
Tallow Corporation, Esteem Products, Inc. or any other Subsidiary that has
executed and delivered a Guaranty) whose (a) net worth (calculated in accordance
with GAAP) at the time of determination does not exceed Seven Hundred Fifty
Thousand Dollars ($750,000) and (b) total assets (determined in accordance with
GAAP) does not exceed an amount equal to five percent (5%) of the total assets
of the Borrower and the Subsidiaries determined on a consolidated basis in
accordance with GAAP (a subsidiary that meets the foregoing requirements in this
definition is referred to as a "Classified Subsidiary"); provided, however, no
Classified Subsidiary shall be deemed an Insignificant Subsidiary if at the time
of determination (a) the aggregate net worth (calculated in accordance with
GAAP) of all Subsidiaries that are then Classified Subsidiaries exceeds Seven
Hundred Fifty Thousand Dollars ($750,000) and (b) the aggregate total assets
(determined in accordance with GAAP) of all Subsidiaries that are then
Classified Subsidiaries exceeds an amount equal to five percent (5%) of the
total assets of the Borrower and the Subsidiaries determined on a consolidated
basis in accordance with GAAP.
"Interest Period" means with respect to each Libor Account, the "Interest
Period" established therefore under the Original Agreement.
"Landlord Consent" has the meaning specified in subsection 9.10 (d).
"Leased Equipment" means any equipment of Borrower or a Significant
Subsidiary in which an Approved Bank Affiliate has either a first priority
perfected security interest or ownership interest under the terms of an
operating or capital lease entered into with Borrower or a Significant
Subsidiary.
"Letter of Credit Liabilities" means, at any time, the aggregate maximum
amount available to be drawn under all outstanding Letters of Credit (in each
case, determined without regard to whether any conditions to drawing could then
be met) and all unreimbursed drawings under Letters of Credit.
"Letters of Credit" has the meaning specified in subsection 2.7(a).
"Libor Accounts" means the following portions of the Revolving Loans:
================================================================================
Amount Last Day of Interest Period Fixed Rate
------ --------------------------- ----------
$24,000,000 February 22, 1999 8.2500%
================================================================================
"Lien" means any lien, mortgage, security interest, tax lien, financing
statement, pledge, charge, hypothecation, assignment, preference, priority, or
other encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or title retention agreement), whether arising
by contract, operation of law, or otherwise.
7
"Loans" means Revolving Loans, Swingline Loans, or Term Loans.
"Loan Documents" means this Agreement, the Notes, the Borrower Security
Agreement, the Guaranty, the Subsidiary Security Agreement, the Mortgages, and
all other promissory notes, security agreements, deeds of trust, mortgages,
assignments, guaranties, letters of credit, and other instruments, agreements,
and other documentation executed and delivered pursuant to or in connection with
this Agreement, as such instruments, agreements, and other documentation may be
amended or otherwise modified but excluding any operating or capital lease and
any other documentation evidencing or governing a Secondary Obligation.
"Lockbox Accounts" shall mean the lockbox accounts established from time to
time pursuant to the Lockbox Agreements in which all funds received pursuant to
the Lockbox Agreements shall be deposited.
"Lockbox Agreements" shall mean any lockbox or other agreement entered into
by the Borrower or a Significant Subsidiary with the Agent or any Bank pursuant
to which a lockbox and deposit account shall be established for the Borrower or
a Significant Subsidiary into which payments on the Borrower's or such
Subsidiary's accounts or other Collateral shall be sent and deposited, each in
form and substance satisfactory to the Agent, as the same may be amended or
otherwise modified.
"Material Adverse Effect" means (a) a material adverse effect on the
business, condition (financial or otherwise), operations, prospects, or
properties of the Borrower and the Subsidiaries taken as a whole, or (b) a
material adverse effect on the validity, perfection, priority, or ability of the
Agent to enforce the Agent's Lien on the Collateral or of the ability of the
Agent or any Bank to enforce a material provision of the Loan Documents. In
determining whether any individual event could reasonably be expected to result
in a Material Adverse Effect, notwithstanding that such event does not itself
have such effect, a Material Adverse Effect shall be deemed to have occurred if
the cumulative effect of such event and all other then existing events could
reasonably be expected to result in a Material Adverse Effect.
"Maximum Rate" means, at any time and with respect to any Bank, the maximum
rate of nonusurious interest under applicable law that such Bank may charge the
Borrower. The Maximum Rate shall be calculated in a manner that takes into
account any and all fees, payments, and other charges contracted for, charged,
or received in connection with the Loan Documents that constitute interest under
applicable law. Each change in any interest rate provided for herein based upon
the Maximum Rate resulting from a change in the Maximum Rate shall take effect
without notice to the Borrower at the time of such change in the Maximum Rate.
For purposes of determining the Maximum Rate under Texas law, the applicable
rate ceiling shall be the "weekly ceiling" described in, and computed in
accordance with, Article 5069, Vernon's Texas Civil Statutes.
"Mortgages" means each mortgage, deed of trust, leasehold mortgage,
leasehold deed of trust or other agreement executed by the Borrower or any
Obligated Party which creates a Lien on such Person's interests in real property
in favor of the Agent for the benefit of the Secured Parties as required
pursuant to the terms of Section 9.10, each of which shall be in form and
substance reasonably satisfactory to the Agent.
"Multiemployer Plan" means a multiemployer plan defined as such in Section
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
8
"Net Cash Proceeds" has the meaning specified in subsection 5.4(b)(i).
"Net Income" means, for any period and any Person, such Person's
consolidated net income (or loss) determined in conformity with GAAP, but
excluding: (a) the income of any other Person (other than its subsidiaries) in
which such Person or any of it subsidiaries has an ownership interest, unless
received by such Person or its subsidiary in a cash distribution; (b) any
after-tax gains or losses attributable to asset dispositions; and (c) to the
extent not included in clauses (a) and (b) above, any after-tax extraordinary,
non-cash, or nonrecurring gains or credits or extraordinary or non-cash losses
or charges.
"Net Interest Expense" means, for any period and any Person, the remainder
of the following for such Person calculated on a consolidated basis for such
period in accordance with GAAP: (a) interest expense, minus (b) interest income.
"Notes" means the Revolving Notes, the Swingline Note, and the Term Notes.
"Obligated Party" means the Significant Subsidiaries or any other Person
(exclusive of the Borrower) who is or becomes party to any agreement that
guarantees or secures payment and performance of the Obligations or any part
thereof.
"Obligations" means the Primary Obligations and the Secondary Obligations.
"Original Agreement" has the meaning specified in the Recitals to this
Agreement.
"Outstanding Revolving Credit" means, at any time of determination, the sum
of (a) the aggregate amount of Revolving Loans then outstanding, plus (b) the
aggregate amount of Letter of Credit Liabilities (or when calculated with
respect to a Bank, including the Agent as a Bank, such Bank's participation or
other interest in such Letter of Credit Liabilities), plus (c) the aggregate
amount of Swingline Loans (or when calculated with respect to a Bank, including
the Agent as a Bank, such Bank's participation or other interest in such
Swingline Loans) then outstanding.
"Payment Date" has the meaning specified in subsection 2.7(c).
"Payor" has the meaning specified in Section 5.8.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Perfection Event" has the meaning specified in subsection 9.10(a).
"Person" means any individual, corporation, business trust, association,
company, partnership, joint venture, Governmental Authority, or other entity.
"Plan" means any employee benefit plan established or maintained by the
Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Primary Obligations" means all obligations, indebtedness, and liabilities
of the Borrower to the Agent, the Banks, the Approved Bank Affiliates or any of
them arising from, pursuant to, or in connection with the Loan Documents and the
SWAP Documents and all the Deposit and Cash Management Services
9
Obligations, in each case whether now existing or hereafter arising, whether
direct, indirect, related, unrelated, fixed, contingent, liquidated,
unliquidated, joint, several, or joint and several, including without
limitation, the obligations of the Borrower to repay the Loans, the
Reimbursement Obligations, interest on the Loans and the Reimbursement
Obligations, and all fees, costs and expenses (including, without limitation,
reasonable attorney's fees) provided for in the Loan Documents, SWAP Documents
or in connection with the documentation governing the Deposit and Cash
Management Services. "Principal Office" means the principal office of the Agent,
located at 100 Federal Street, Boston, Massachusetts 02110.
"Prohibited Transaction" means any transaction set forth in Section 406 or
Section 407 of ERISA or Section 4975(c)(1) of the Code for which there does not
exist a statutory or administrative exemption.
"Quarterly CAPEX Basket" has the meaning specified in Section 11.4.
"Quarterly Payment Date" means the last day of March, June, September, and
December of each year, the first of which shall be the first such day after the
date of this Agreement.
"Raw Material Supplier" has the meaning specified in subsection 10.1(g).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended or supplemented from time to time.
"Regulatory Change" means, with respect to any Bank, any change after the
date of this Agreement in United States federal, state, or foreign laws or
regulations (including, without limitation, Regulation D) or the adoption or
making after such date of any interpretations, directives, or requests applying
to a class of banks including such Bank of or under any United States federal or
state, or any 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.
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Agent for any demand for payment or drawing under a Letter of
Credit.
"Release" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, disbursement, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment or into or out of
property owned by such Person, including, without limitation, the movement of
Hazardous Materials through or in the air, soil, surface water, ground water, or
property in violation of Environmental Laws.
"Remedial Action" means all actions required to (a) cleanup, remove, treat,
or otherwise address Hazardous Materials in the indoor or outdoor environment,
(b) prevent the Release or threat of Release or minimize the further Release of
Hazardous Materials so that they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment, or (c)
perform pre-remedial studies and investigations and post-remedial monitoring and
care.
"Replacement Candidate" has the meaning specified in Section 6.5.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
10
"Required Banks" means Banks having either a direct or, in the case of
Swingline Loans, participation interest in the following, calculated without
duplication: (a) sixty-six and two-thirds percent (66 %) or more of the
Revolving Commitments and the aggregate outstanding principal amount of the Term
Loans or (b) if the Revolving Commitments have terminated, sixty-six and
two-thirds percent (66 %) or more of the sum of (i) the outstanding principal
amount of the Loans and (ii) the participations in outstanding Letter of Credit
Liabilities.
"Required Payment" has the meaning specified in Section 5.8.
"Revolving Commitment" means, as to each Bank, the obligation of such Bank
to make advances of funds and purchase participation interests in (or with
respect to the Agent as a Bank, hold other interests in) Letters of Credit and
Swingline Loans in an aggregate principal amount at any one time outstanding up
to but not exceeding the amount set forth opposite the name of such Bank on the
signature pages hereto under the heading "Revolving Commitment", as the same may
be reduced or terminated pursuant to Section 2.6, Section 12.2, or Section 14.8
or, if applicable, in such Bank's most recent Assignment and Acceptance executed
after the Closing Date. As of the Closing Date, the aggregate amount of the
Revolving Commitments of all Banks equals One Hundred Thirty-five Million
Dollars ($135,000,000).
"Revolving Loans" means, as to any Bank, the advances made by such Bank
pursuant to Section 2.1 and the advances made by such Bank pursuant to Section
2.1 of the Original Agreement which are outstanding on the Closing Date.
"Revolving Notes" means the promissory notes provided for by Section 2.2
and all amendments or other modifications thereof.
"Secondary Obligations" means all obligations, indebtedness, and
liabilities of the Borrower to any Secured Party arising from, pursuant to, or
in connection with any operating or capital lease (including without limitation,
that certain Master Lease dated February 17, 1998 between the Borrower and NBD
Bank and that certain Master Equipment Lease dated May 14, 1998 between the
Borrower and STI Credit Corp., as either of the foregoing may be amended or
otherwise modified), whether such obligations, indebtedness and liabilities are
now existing or hereafter arising, whether direct, indirect, related, unrelated,
fixed, contingent, liquidated, unliquidated, joint, several, or joint and
several and all fees, costs and expenses (including, without limitation,
reasonable attorneys' fees) provided for in connection therewith.
"Secured Parties" means, the Agent, the Banks and the Approved Bank
Affiliates.
"Significant Subsidiary" means any Subsidiary that is organized under the
laws of a state located in the United States of America and is not an
Insignificant Subsidiary.
"Subsidiary" means any corporation (or other entity) of which at least a
majority of the outstanding shares of stock (or other ownership interests)
having by the terms thereof ordinary voting power to elect a majority of the
board of directors (or similar governing body) of such corporation (or other
entity) (irrespective of whether or not at the time stock (or other ownership
interests) of any other class or classes of such corporation (or other entity)
shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by the
Borrower or one or more of the Subsidiaries or by the Borrower and one or more
of the Subsidiaries.
"Subsidiary Security Agreement" means the security agreement between the
Significant
11
Subsidiaries and the Agent, for the benefit of the Secured Parties, in
substantially the form of Exhibit "F", as the same may be amended or otherwise
modified.
"SWAP Documents" means the following International SWAP Dealers
Association, Inc., Master Agreements entered into with the Borrower, all
schedules thereto and all confirmations delivered thereunder, as the same may be
amended or otherwise modified:
================================================================================
Secured Party Date
================================================================================
1. Wells Fargo Bank, National Association June 6, 1997
================================================================================
2. BankBoston, N.A. June 26, 1997
================================================================================
3. Credit Lyonnais June 6, 1997
================================================================================
"Swingline Commitment" means the obligation of the Agent to make advances
pursuant to subsection 2.8(a) in an aggregate principal amount at any one time
outstanding up to but not exceeding Seven Million Five Hundred Thousand Dollars
($7,500,000), as such amount may be reduced pursuant to subsection 2.8(e) or
Section 12.2.
"Swingline Loans" means the advances made by the Agent pursuant to
subsection 2.8(a) and the advances made by the Agent pursuant to subsection
2.8(a) of the Original Agreement which are outstanding on the Closing Date.
"Swingline Maturity" has the meaning specified in subsection 2.8(c).
"Swingline Note" means the promissory note provided for by subsection
2.8(b) and all amendments and other modifications thereto.
"Term Loan" means, as to any Bank, the advance made by such Bank to the
Borrower under the Original Agreement as a "Term Loan" to the extent outstanding
on the Closing Date. The principal amount of each such advance applicable to a
Bank outstanding as of the Closing Date is set forth opposite the name of such
Bank on the signature pages hereto under the heading "Term Loan". As of the
Closing Date, the aggregate outstanding principal amount of the Term Loans of
all Banks equals Thirty-Six Million Seven Hundred Two Thousand Dollars
($36,702,000).
"Term Notes" means the promissory notes provided for by Section 3.1 and all
amendments and other modifications thereto.
"Termination Date" means June 30, 2001, or such earlier date on which the
Commitments terminate as provided in this Agreement.
"UCC" means the Uniform Commercial Code as in effect in the State of Texas;
provided that, when applicable as determined in accordance with the Borrower
Security Agreement, "UCC" shall have the meaning provided for in the proviso to
the definition of UCC set forth in the Borrower Security Agreement.
Section 1.2O Other Definitional Provisions. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein",
12
and "hereunder" and words of similar import referring to this Agreement refer to
this Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise specified, all Article and Section references pertain to this
Agreement. Terms used herein that are defined in the UCC, unless otherwise
defined herein, shall have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Agent and the Banks hereunder
shall be prepared, in accordance with GAAP, on a basis consistent with those
used in the preparation of the financial statements referred to in Section 8.2.
All calculations made for the purposes of determining compliance with the
provisions of this Agreement shall be made by application of GAAP, on a basis
consistent with those used in the preparation of the financial statements
referred to in Section 8.2. To enable the ready and consistent determination of
compliance by the Borrower with its obligations under this Agreement, the
Borrower will not change the manner in which either the last day of its Fiscal
Year or the last days of the first three Fiscal Quarters of its Fiscal Years is
calculated. In the event any changes in accounting principles required by GAAP
or recommended by the Borrower's certified public accountants and implemented by
the Borrower occur and such changes result in a change in the method of the
calculation of financial covenants, standards, or terms under this Agreement,
then the Borrower, the Agent, and the Banks agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
changes with the desired result that the criteria for evaluating such covenants,
standards, or terms shall be the same after such changes as if such changes had
not been made. Until such time as such an amendment shall have been executed and
delivered by the Agent, the Borrower, and the Banks, all financial covenants,
standards, and terms in this Agreement shall continue to be calculated or
construed as if such changes had not occurred.
Section 1.4 Time of Day . Unless otherwise indicated, all references in
this Agreement to times of day shall be references to Boston, Massachusetts
time.
ARTICLE 2
Revolving Credit Facility
-------------------------
Section 2.1 Revolving Commitments. Subject to the terms and conditions of
this Agreement, each Bank severally agrees to make one or more advances to the
Borrower from time to time from and including the Closing Date to but excluding
the Termination Date in an aggregate principal amount at any time outstanding up
to but not exceeding the amount of such Bank's Revolving Commitment as then in
effect; provided, however, (a) the Outstanding Revolving Credit applicable to a
Bank (including the Agent as a Bank) shall not at any time exceed such Bank's
Revolving Commitment, and (b) the Outstanding Revolving Credit shall not at any
time exceed the aggregate Revolving Commitments. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, the Borrower
may borrow, prepay, and reborrow hereunder the amount of the Revolving
Commitments as Base Rate Accounts.
Section 2.2 Notes. The Revolving Loans made by a Bank shall be evidenced by
a single promissory note of the Borrower in substantially the form of Exhibit
"A", payable to the order of such Bank in a principal amount equal to its
Revolving Commitment as in effect on the Closing Date or, if applicable, on the
date of the most recent Assignment and Acceptance executed by such Bank after
the Closing Date, and otherwise duly completed.
Section 2.3 Repayment of Revolving Loans. Without limiting the effect of
Section 2.6, the Borrower shall pay to the Agent for the account of the Banks
the outstanding principal amount of all of the
13
Revolving Loans on the Termination Date.
Section 2.4 Use of Proceeds. The proceeds of Revolving Loans shall be used
by the Borrower (a) for working capital in the ordinary course of business,
including, without limitation, the satisfaction of Reimbursement Obligations in
accordance with subsection 2.7(e), and to repay Swingline Loans and (b) for
other general corporate purposes, including, without limitation, financing
Capital Expenditures and any acquisitions which may be permitted by the Banks
hereunder.
Section 2.5 Fees.
(a) Revolving Commitment Fee. The Borrower agrees to pay to
the Agent for the account of each Bank a commitment fee on the daily
average unused amount of such Bank's Revolving Commitment for the
period from and including the Closing Date to the Termination Date, at
a rate equal to three-eighths of one percent (0.375%) per annum. For
the purpose of calculating the commitment fee hereunder, the Revolving
Commitments shall be deemed utilized by all outstanding Revolving Loans
and all Letter of Credit Liabilities but shall not, for purposes of
this Section 2.5 only, be deemed utilized by any Swingline Loans.
Accrued commitment fees under this Section 2.5 and unpaid commitment
fees accrued under Section 2.5 of the Original Agreement shall be
payable in arrears on each Quarterly Payment Date and on the
Termination Date.
(b) Amendment Fees. On the Closing Date, Borrower shall pay
to the Agent, for the benefit of the Banks, the amendment fee described
in subsection 7.1(j). If on January 1, 2000, the Borrower owns,
directly or indirectly, any interest in the capital stock of
International Processing Corporation or International Transportation
Service, Inc., the Borrower shall pay to the Agent, for the benefit of
the Banks, a deferred amendment fee of Two Hundred Sixteen Thousand One
Hundred Ninety Dollars ($216,190).
Section 2.6 Reduction or Termination of Revolving Commitments.
(a) Mandatory Reduction. On March 31, 2001, without any
notice or other action by the Agent or any Bank, the aggregate amount
of the Revolving Commitments shall be automatically reduced by Two
Million Five Hundred Thousand Dollars ($2,500,000).
(b) Mandatory Prepayment Reduction. The aggregate amount of
the Revolving Commitments shall be automatically reduced by the amount
of any prepayment made on the Revolving Loans with Net Cash Proceeds
under the terms of subsection 5.4(b)(i).
(c) Voluntary Reductions. The Borrower shall have the right
to terminate or reduce in part the unused portion of the Revolving
Commitments at any time and from time to time, provided that: (i) the
Borrower shall give notice of each such termination or reduction as
provided in Section 5.3; (ii) each partial reduction shall be in an
aggregate amount at least equal to Five Million Dollars ($5,000,000);
and (iii) the Revolving Commitments may not be reduced to an amount
less than the sum of the Swingline Commitment plus the Letter of Credit
Liabilities then outstanding.
(d) Effect of Reduction. The Revolving Commitments may not be
reinstated after they have been terminated or reduced.
14
Section 2.7 Letters of Credit .
(a) Commitment to Issue. The Borrower may utilize the
Revolving Commitments by requesting that the Agent issue, and the
Agent, subject to the terms and conditions of this Agreement, shall
issue standby or documentary letters of credit for the Borrower's or
one of the Subsidiaries' account (such letters of credit, together with
the letters of credit described on Schedule 2.7(a) issued by the Agent
under the Original Agreement, being hereinafter referred to
collectively as the "Letters of Credit"); provided, however, (i) the
aggregate amount of outstanding Letter of Credit Liabilities shall not
at any time exceed Twenty-five Million Dollars ($25,000,000), (ii) the
Outstanding Revolving Credit shall not at any time exceed the aggregate
Revolving Commitments, and (iii) the Outstanding Revolving Credit
applicable to a Bank shall not at any time exceed such Bank's Revolving
Commitment. Upon the date of issue of a Letter of Credit, the Agent
shall be deemed, without further action by any party hereto, to have
sold to each other Bank, and each other Bank shall be deemed, without
further action by any party hereto, to have purchased from the Agent a
participation to the extent of such Bank's Commitment Percentage in
such Letter of Credit and the related Letter of Credit Liabilities. The
participations purchased by the Banks under the Original Agreement in
the Letters of Credit described on Schedule 2.7(a) shall continue under
the terms hereof.
(b) Letter of Credit Request Procedure. Except with respect
to the Letters of Credit described on Schedule 2.7(a), the Borrower
shall give the Agent at least five (5) Business Days irrevocable prior
notice (effective upon receipt) specifying the date of each Letter of
Credit to be issued and the nature of the transactions to be supported
thereby. Upon receipt of such notice the Agent shall promptly notify
each other Bank of the contents thereof and of such Bank's Commitment
Percentage of the amount of the proposed Letter of Credit. The Agent
shall provide a Bank a copy of each Letter of Credit issued hereunder
upon such Bank's request. Each Letter of Credit shall have an
expiration date that does not extend beyond a date which is thirty (30)
days prior to the Termination Date, shall be payable in Dollars, must
support a transaction entered into in the ordinary course of the
Borrower's or a Subsidiary's business, must be satisfactory in form and
substance to the Agent, and shall be issued pursuant to such
documentation as the Agent may require, including, without limitation,
the Agent's standard form letter of credit request and reimbursement
agreement; provided that, in the event of any conflict between the
terms of such agreement and the other Loan Documents, the terms of the
other Loan Documents shall control. Each standby Letter of Credit shall
have an expiration date that does not extend beyond one (1) year,
provided that any standby Letter of Credit may contain provisions
whereby its expiration date is automatically extended for additional
periods of one (1) year on any current or thereafter established
expiration date unless the Agent provides notice to the beneficiary of
the Letter of Credit that it will not be so extended. Each such standby
Letter of Credit must permit the Agent to give such notice of
nonextension at any time up to the date which is no greater than ninety
(90) days prior to the applicable expiration date.
(c) Letter of Credit Fees. The Borrower will pay to the
Agent for the account of each Bank an irrevocable letter of credit fee
on such Bank's Commitment Percentage of the amount available for
drawings under each Letter of Credit, such letter of credit fee (i) to
be paid in advance, on the date of the issuance of any Letter of Credit
(other than the existing Letters of Credit described on Schedule
2.7(a)), and on each Quarterly Payment Date thereafter (or with respect
to the existing Letters of Credit described on Schedule 2.7(a), on each
Quarterly Payment Date after the Closing Date) until the date of
expiration or termination thereof (each such date herein a "Payment
Date") and (ii) to be calculated for the period from and including one
Payment
15
Date to and excluding the next at a rate equal to two and one-half
percent (2.50%). After receiving any payment of any letter of credit
fees under this clause (c), the Agent will promptly pay to each Bank
the letter of credit fees then due such Bank. With respect to each
Letter of Credit, the Borrower will also pay to the Agent for its
account only the fees and expenses described in subsection 14.1(b), to
the extent applicable, and, on the date of the issuance of the Letter
of Credit, the fronting fee described in that certain commitment letter
dated May 15, 1997 among the Borrower, BankBoston, N.A., and BankBoston
Securities, Inc. calculated on the maximum amount available to be drawn
under the Letter of Credit.
(d) Funding of Drawings. Upon receipt from the beneficiary of
any Letter of Credit of any demand for payment or other drawing under
such Letter of Credit, the Agent shall promptly notify the Borrower and
each Bank as to the amount to be paid as a result of such demand or
drawing and the respective payment date. Not later than 11:00 a.m. on
the applicable payment date, each Bank will make available to the
Agent, at the Principal Office, in immediately available funds, an
amount equal to such Bank's Commitment Percentage of the amount to be
paid as a result of such demand or drawing even if the conditions to a
Loan under Article 7 have not been satisfied.
(e) Reimbursements. The Borrower shall be irrevocably and
unconditionally obligated to immediately reimburse the Agent for any
amounts paid by the Agent upon any demand for payment or drawing under
any Letter of Credit (regardless of whether such Letter of Credit is
issued for the account of the Borrower or one of the Subsidiaries),
without presentment, demand, protest, or other formalities of any kind.
All payments on the Reimbursement Obligations shall be made to the
Agent at the Principal Office for the account of the Agent in Dollars
and in immediately available funds, without set-off, deduction, or
counterclaim not later than 3:00 pm. on the date of the corresponding
payment under the Letter of Credit by the Agent. Subject to the other
terms and conditions of this Agreement, such reimbursement may be made
by the Borrower requesting a Revolving Loan in accordance with Section
5.1, the proceeds of which shall be credited against the Borrower's
Reimbursement Obligations. The Agent will pay to each Bank such Bank's
Commitment Percentage of all amounts received from the Borrower for
application in payment, in whole or in part, to the Reimbursement
Obligation in respect of any Letter of Credit, but only to the extent
such Bank has made payment to the Agent in respect of such Letter of
Credit pursuant to clause (d) of this Section 2.7.
(f) Reimbursement Obligations Absolute. The Reimbursement
Obligations of the Borrower under this Agreement shall be absolute,
unconditional, and irrevocable, and shall be performed strictly in
accordance with the terms of the Loan Documents under all circumstances
whatsoever and the Borrower hereby waives any defense to the payment of
the Reimbursement Obligations based on any circumstance whatsoever,
including, without limitation, in either case, the following
circumstances: (i) any lack of validity or enforceability of any Letter
of Credit or any other Loan Document; (ii) any amendment or waiver of
or any consent to departure from any Loan Document; (iii) the existence
of any claim, set-off, counterclaim, defense, or other rights which the
Borrower, any Obligated Party, or any other Person may have at any time
against any beneficiary of any Letter of Credit, the Agent, any Bank,
or any other Person, whether in connection with any Loan Document or
any unrelated transaction; (iv) any statement, draft, or other
documentation presented under any Letter of Credit proving to be
forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
(v) payment by the Agent under any Letter of Credit against
presentation of a draft or other document that does not comply with the
terms of such Letter of Credit; or (vi) any
16
any other circumstance whatsoever, whether or not similar to any of the
foregoing; provided that Reimbursement Obligations with respect to a
Letter of Credit may be subject to avoidance by the Borrower if the
Borrower proves in a final nonappealable judgment that it was damaged
and that such damage arose directly from the Agent's willful misconduct
or gross negligence in determining whether the documentation presented
under the Letter of Credit in question complied with the terms thereof.
(g) Issuer Responsibility. The Borrower assumes all risks of
the acts or omissions of any beneficiary of any Letter of Credit with
respect to its use of such Letter of Credit. Neither the Agent, any
Bank, nor any of their respective officers or directors shall have any
responsibility or liability to the Borrower or any other Person for:
(a) the failure of any draft to bear any reference or adequate
reference to any Letter of Credit, or the failure of any documents to
accompany any draft at negotiation, or the failure of any Person to
surrender or to take up any Letter of Credit or to send documents apart
from drafts as required by the terms of any Letter of Credit, or the
failure of any Person to note the amount of any instrument on any
Letter of Credit, each of which requirements, if contained in any
Letter of Credit itself, it is agreed may be waived by the Agent; (b)
errors, omissions, interruptions, or delays in transmission or delivery
of any messages; (c) the validity, sufficiency, or genuineness of any
draft or other document, or any endorsement(s) thereon, even if any
such draft, document or endorsement should in fact prove to be in any
and all respects invalid, insufficient, fraudulent, or forged or any
statement therein is untrue or inaccurate in any respect; (d) the
payment by the Agent to the beneficiary of any Letter of Credit against
presentation of any draft or other document that does not comply with
the terms of the Letter of Credit; or (e) any other circumstance
whatsoever in making or failing to make any payment under a Letter of
Credit. The Borrower shall have a claim against the Agent, and the
Agent shall be liable to the Borrower, to the extent of any direct, but
not indirect, consequential or punitive, damages suffered by the
Borrower which the Borrower proves in a final nonappealable judgment
were caused by (i) the Agent's willful misconduct or gross negligence
in determining whether documents presented under any Letter of Credit
complied with the terms thereof or (ii) the Agent's willful failure to
pay under any Letter of Credit after presentation to it of
documentation strictly complying with the terms and conditions of such
Letter of Credit. The Agent may accept documents that appear on their
face to be in order, without responsibility for further investigation,
regardless of any notice or information to the contrary.
Section 2.8 Swingline Loans.
(a) Swingline Commitment. Subject to the terms and conditions
of this Agreement, the Agent agrees to make one or more advances to the
Borrower from time to time, from and including the Closing Date to but
excluding the Termination Date, in an aggregate principal amount at any
time outstanding up to but not exceeding the Swingline Commitment;
provided, however, (i) the Outstanding Revolving Credit shall never
exceed the aggregate Revolving Commitments and (ii) the Outstanding
Revolving Credit applicable to a Bank (including the Agent as a Bank)
shall never exceed such Bank's Revolving Commitment. Subject to the
foregoing limitations, and the other terms and provisions of this
Agreement, the Borrower may borrow, prepay, and reborrow hereunder the
amount of the Swingline Commitment as Base Rate Accounts thereunder. On
the date a Swingline Loan is made by the Agent under this subsection
2.8(a), the Agent shall be deemed without further action by any party
hereto, to have sold to each Bank, and each Bank shall be deemed,
without further action by any party hereto, to have purchased from the
Agent a participation to the extent of such Bank's Commitment
Percentage in the Swingline Loan so made, such participation to be
funded in accordance with clause (c) of this Section 2.8. The
17
participations purchased by the Banks under the Original Agreement in
the advances made by the Agent under subsection 2.8 (a) of the Original
Agreement shall continue under the terms hereof, including, without
limitation, the terms relating to the Banks' obligation to fund such
participation under clause (c) of this Section 2.8.
(b) Swingline Note. The Swingline Loans made by the Agent
shall be evidenced by a single promissory note of the Borrower in
substantially the form of Exhibit "B", payable to the order of the
Agent in a principal amount equal to the Swingline Commitment as in
effect on the Closing Date and otherwise duly completed.
(c) Repayment of Swingline Loans; Funding of Participation.
The Borrower shall pay to the Agent for its own account the outstanding
principal amount of each Swingline Loan on the earlier of (i) the
Termination Date or (ii) the date which is thirty (30) days after the
Swingline Loan is made (the earlier of such date with respect to a
Swingline Loan herein the "Swingline Maturity"). Subject to the other
terms and conditions of this Agreement, the Borrower may repay a
Swingline Loan on its Swingline Maturity or at any time prior thereto
by requesting a Revolving Loan in accordance with Section 5.1 with the
proceeds thereof payable to the Agent for its own account. The Agent,
at any time in its sole and absolute discretion and whether or not a
Swingline Maturity shall have occurred, may require that each Bank fund
its participation in the then outstanding principal amount of all
Swingline Loans by giving each Bank notice thereof. Additionally, if
the Borrower shall not have repaid a Swingline Loan by 1:00 p.m. on the
corresponding Swingline Maturity, the Agent will notify each Bank of
the aggregate principal amount of the Swingline Loan which has not been
repaid. Upon the giving of any notice by the Agent under either of the
preceding two sentences, each Bank shall make available to the Agent,
at the Principal Office, in immediately available funds, an amount
equal to its Commitment Percentage of the aggregate principal amount of
the Swingline Loan or Swingline Loans subject to such notice by not
later than 3:00 p.m. on the date such notice is received if such notice
is received by 1:00 p.m. or by 11:00 a.m. on the next Business Day, if
such notice is received after 1:00 p.m., whether or not the conditions
to a Loan under Article 7 are satisfied.
(d) Use of Proceeds(d) Use of Proceeds. The proceeds of
Swingline Loans shall be used by the Borrower for the same purposes as
Revolving Loans as described in Section 2.4.
(e) Reduction or Termination of Swingline Commitment(e)
Reduction or Termination of Swingline Commitment. The Borrower shall
have the right to terminate or reduce in part the unused portion of the
Swingline Commitment at any time and from time to time, provided that:
(i) the Borrower shall give notice of each such termination or
reduction as provided in Section 5.3; and (ii) each partial reduction
shall be in an aggregate amount at least equal to One Million Dollars
($1,000,000). The Swingline Commitment may not be reinstated after it
has been terminated or reduced.
ARTICLE 3
Term Loan
---------
Section 3.1 Notes. The Term Loan made by a Bank shall be evidenced by a
single promissory note of the Borrower in substantially the form of Exhibit "C",
payable to the order of such Bank in a principal amount equal to its Term Loan
as outstanding on the Closing Date or, if applicable, on the date of the most
recent Assignment and Acceptance executed by such Bank after the Closing Date,
and otherwise duly completed.
18
Section 3.2 Repayment of Term Loans. Subject to Section 10.8, the Borrower
shall pay to the Agent for the account of the Banks the outstanding principal
amount of all the Term Loans in quarterly installments due and payable on each
Quarterly Payment Date set forth below, each installment to be in an aggregate
principal amount equal to the principal amount set forth below opposite the
applicable Quarterly Payment Date:
Quarterly Payment Date Principal Amount
---------------------- ----------------
March 31, 1999 $1,800,000
June 30, 1999 $1,200,000
September 30, 1999 $2,000,000
December 31, 1999 $2,500,000
March 31, 2000 $2,500,000
June 30, 2000 $22,500,000
September 30, 2000 $2,500,000
The Borrower shall pay to the Agent for the account of the Banks all remaining
principal outstanding under the Term Loans on December 31, 2000.
ARTICLE 4
Interest and Fees
-----------------
Section 4.1 Interest Rate. The Borrower shall pay to the Agent, for the
account of each Bank, interest on the unpaid principal amount of each Loan made
by such Bank for the period commencing on the Closing Date or if later, the date
of such Loan but excluding the date such Loan is due, at a fluctuating rate per
annum equal to (i) during the period that such Loan or portions thereof are
subject to Base Rate Accounts, the sum of the Base Rate plus one percent (1.00%)
and (ii) during the period that such Loans or portions thereof are subject to
Libor Accounts (i.e., until the end of the Interest Period applicable thereto)
and with respect to such Libor Accounts, the fixed rate applicable to such Libor
Account specified in the definition of "Libor Accounts" or (iii) with respect to
all Loans, during any period of time when an Event of Default exists and the
Agent has notified the Borrower that the Default Rate is in effect (which the
Agent shall do at the direction of the Required Banks), the Default Rate.
Section 4.2 Payment Dates. Accrued interest on the Loans (including,
without limitation, any unpaid interest accrued on the Loans prior to the
Closing Date under the Original Agreement) shall be due and payable as follows:
(i) in the case of all Loans (including those subject to Base Rate Accounts and
Libor Accounts), on each Quarterly Payment Date; (ii) in addition to accrued
interest paid in accordance with the foregoing clause (i) and with respect to
Loans subject to Libor Accounts, on the last day of the Interest Period with
respect thereto; and (iii) on the Termination Date.
Section 4.3 Default Interest. Notwithstanding the foregoing, the Borrower
will pay to the Agent for the account of the party entitled thereto interest at
the Default Rate (to the fullest extent
19
permitted by law) on any amount payable by the Borrower under any Loan Document
to or for the account of the Agent or any Bank that is not paid in full when due
(whether at stated maturity, by acceleration, or otherwise), for the period from
and including the due date thereof to but excluding the date the same is paid in
full. Interest payable at the Default Rate with respect to past due amounts
shall be payable from time to time on demand.
Section 4.4 Conversion of Libor Accounts. Upon expiration of each Interest
Period applicable to a Libor Account, such Libor Account shall be automatically
converted to a Base Rate Account. No Base Rate Account may be Converted into a
Libor Account nor may the Borrower continue any Libor Account.
Section 4.5 Computations. Interest and fees payable by the Borrower
hereunder and under the other Loan Documents shall be computed as follows: (i)
with respect to Libor Accounts on the basis of a year of 360 days and the actual
number of days elapsed (including the first day but excluding the last day)
occurring in the period for which payable unless such calculation would result
in a usurious rate, in which case interest shall be calculated on the basis of a
year of 365 or 366 days, as the case may be and (ii) with respect to Base Rate
Accounts, interest calculated at the Default Rate and all fees payable
hereunder, on the basis of a year of 365 or 366 days, as the case may be and the
actual number of days elapsed (including the first day but excluding the last
day) occurring in the period for which payable.
ARTICLE 5
Administrative Matters
----------------------
Section 5.1 Borrowing Procedure. The Borrower shall give the Agent, and the
Agent will give the Banks, notice of each borrowing under any Commitment in
accordance with Section 5.3. Not later than 1:00 p.m. on the date specified for
each borrowing under the Revolving Commitment each Bank will make available the
amount of the Loan to be made by it on such date to the Agent, at the Principal
Office, in immediately available funds, for the account of the Borrower. The
amount so received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Borrower by (a) depositing the same, in
immediately available funds, in an account of the Borrower (designated by the
Borrower) maintained with the Agent at the Principal Office or (b) wire
transferring such funds to a Person or Persons designated by the Borrower in
writing. Not later than 3:00 p.m. on the date specified for each borrowing under
the Swingline Commitment, the Agent will make available the amount of the
Swingline Loan to be made by it on such date to the Borrower by (i) depositing
the same, in immediately available funds, in an account of the Borrower
(designated by the Borrower) maintained with the Agent at the Principal Office
or (ii) wire transferring such funds to a Person or Persons designated by the
Borrower in writing.
Section 5.2 Minimum Amounts. Except for prepayments pursuant to Article 6,
prepayments of Revolving Loans subject to Base Rate Accounts and mandatory
prepayments required by Section 5.4, each borrowing under a Revolving Loan or a
Swingline Loan and each prepayment of principal of a Loan shall be in an amount
at least equal to the amount set forth below for the applicable Loan or any
larger amounts in the increments set forth below:
Revolving Loan Swingline Loan Term Loan
-------------- -------------- ---------
$1,000,000 $25,000 $500,000
20
Revolving Loan Swingline Loan Term Loan
-------------- -------------- ---------
Increments
- -------------------------------------------------------------------------------
$500,000 $25,000 $100,000
Except for prepayments pursuant to Article 6 and mandatory prepayments required
by Section 5.4, each prepayment of Revolving Loans subject to Base Rate Accounts
shall be in an amount at least equal to Five Hundred Thousand Dollars ($500,000)
or any larger amount in increments of One Hundred Thousand Dollars ($100,000).
Section 5.3 Certain Notices. Notices by the Borrower to the Agent of
terminations or reductions of Commitments and of borrowings and prepayments of
Loans shall be irrevocable and shall be effective only if received by the Agent
not later than 1:00 p.m. (a) on the Business Day of the borrowing of a Swingline
Loan, (b) on the Business Day of any repayment of Swingline Loans or Revolving
Loans, or (c) on the Business Day prior to the date of the relevant termination,
reduction, borrowing, or other prepayment specified below:
Number of Business Days
Notice Prior
------ -----------------------
Termination or reduction of Commitments 3
Borrowing of Revolving Loans (other than Swingline Loans) 1
and prepayment of Term Loans
Prepayment or repayment of Loans subject to Libor Accounts 3
Any notices of the type described in this Section 5.3 which are received by the
Agent after 1:00 p.m. on a Business Day shall be deemed to be received and shall
be effective on the next Business Day. Each such notice of termination or
reduction shall specify the applicable Commitments to be affected and the amount
of the Commitments to be terminated or reduced. Each such notice of borrowing,
or prepayment shall (a) specify the Loans to be borrowed or prepaid; (b) the
amount (subject to Section 5.2) to be borrowed or prepaid; and (c) the date of
borrowing or prepayment (which shall be a Business Day). The Agent shall notify
the Banks of the contents of each such notice on the date of its receipt of the
same or, if received on or after 1:00 p.m. on a Business Day, on the next
Business Day. No notice of prepayment is necessary for prepayments required
under subsection 5.4 (b) and Article 6.
Section 5.4 Prepayments.
(a) Voluntary Prepayments(a) Voluntary Prepayments. Subject
to Section 5.2 and the provisions of this Section 5.4, the Borrower
may, at any time and from time to time without premium or penalty upon
prior notice to the Agent as specified in Section 5.3, prepay or repay
any Loan in full or in part. Any optional prepayment of the Term Loan
shall be accompanied with accrued interest on the amount prepaid to the
date of prepayment and any partial prepayments thereof shall be applied
to the principal installments due under the Term Loan in the inverse
order of maturity. Loans subject to a Libor Account may be voluntarily
prepaid or repaid only on the last day of the Interest Period
applicable thereto unless (i) the Borrower pays to the Agent for the
account of the applicable Banks any amounts due under Section 6.3 as a
result of such prepayment or repayment or (ii) after
21
giving effect to such prepayment or repayment the aggregate principal
amount of the Libor Accounts applicable to the Loan being prepaid or
repaid having Interest Periods that end after such payment date shall
be equal to or less than the principal amount of such Loan after such
prepayment or repayment.
(b) Mandatory Prepayments(b) Mandatory Prepayments.
(i) Asset Dispositions and Income Tax Refunds
(A) Required Prepayment. The Borrower shall make a
prepayment of the Loans in the amount of the Net Cash
Proceeds received from the following:
(1) any disposition of assets pursuant to the
permissions set forth in subsections 10.8
(e), (f), (g), or (h); or
(2) any disposition of an asset pursuant to
the permissions set forth in subsection
10.8 (b) if the Net Cash Proceeds from
such disposition equal or exceed One
Hundred Thousand Dollars ($100,000); or
(3) any income tax refund.
The Net Cash Proceeds from any asset disposition of the
type described in the foregoing clauses (1) or (2) shall
be delivered by the Borrower to the Agent, on the date
two (2) Business Days after the receipt thereof; provided
that the Net Cash Proceeds from the disposition of the
real property in Kearney, New Jersey shall be delivered
by the Borrower to the Agent on or before February 2,
1999. The Net Cash Proceeds from any income tax refund
shall be delivered by the Borrower to the Agent, on the
date two (2) Business Days after the receipt thereof;
provided that the Net Cash Proceeds from any income tax
refund received in Fiscal Year 1999 shall not be
delivered to the Agent until the date the financial
statements for the last month of the Fiscal Year 1999 are
delivered under subsection 9.1 (b).
(B) Application of Net Cash Proceeds; Las Vegas
Property Exception. Any Net Cash Proceeds so delivered
under this subsection 5.4 (b) (i) to the Agent shall be
applied as follows: (1) first, to the installments due
under the Term Loans in the direct order of maturity
thereof until the Term Loans have been paid in full; (2)
second, to the Swingline Loans until paid in full; (3)
third, to the Revolving Loans until paid in full, (4)
fourth, to unpaid accrued interest on the Primary
Obligations; (5) fifth, to any due and unpaid Primary
Obligation; and (6) sixth, as collateral (and held by the
Agent as such) in an interest bearing account over which
the Agent shall have the sole right of withdrawal) for
the Obligations. The amount of such proceeds so held as
collateral shall (x) not exceed an amount equal to One
Hundred Five percent (105%) of the sum of the maximum
anticipated amount of such Contingent Primary Obligations
plus the maximum anticipated amount of all Secondary
Obligations and (y) shall be applied to the Obligations
as proceeds of Collateral as set forth in subsection
5.6(b). No holder of any Secondary Obligation shall have
any right to such collateral until (x) all Primary
Obligations are paid in full and (y) all Contingent
Primary Obligations
22
are terminated, cash secured by an amount not to exceed
One Hundred Five Percent (105%) of the amount thereof or
otherwise satisfied. If no Event of Default exists and
any proceeds remain after the applications described
above, the remaining amount of such proceeds shall be
delivered to the Borrower. However, the Net Cash Proceeds
received from the disposition of the real property
located in Las Vegas, Nevada, shall be applied as
follows: (1) first, as a prepayment of the outstanding
Revolving Loans in an amount up to Three Million Dollars
($3,000,000); and (2) second, as a prepayment of the Term
Loans, applied to the installments due under the Term
Loans in the direct order of maturity.
(C) Definition of Net Cash Proceeds; Application of
Estimated Taxes. The phrase "Net Cash Proceeds" means
(1), with respect to a tax refund, the cash amount
thereof net of the costs of obtaining such refund
(including any accountant's or attorney's fees and other
professional fees attributable thereto irrespective of
when incurred or paid) and with respect to any refund
received in Fiscal Year 1999 only, net of any tax
liability paid by Borrower in Fiscal Year 1999 which is
required as a result of the current audit of the
Borrower's 1994 and 1995 Fiscal Years by the Internal
Revenue Service and (2), with respect to asset
dispositions, the cash proceeds received therefrom by the
Borrower or any Subsidiary (including, without
limitation, payments under notes or other debt securities
received in connection with any disposition of assets and
any proceeds received from any escrow or holdback, in
each case, as and when actually received) net of (x) the
costs of such disposition (including in such costs any
estimated federal capital gains taxes; title insurance
premiums; survey costs; costs of environmental reports
and assessments; purchase price adjustments; filing fees;
any transfer or documentary taxes; brokerage fees;
attorney's fees; and other professional fees attributable
thereto) and (y) amounts applied to repayment of Debt
(other than the Obligations) secured by a Lien prior to
the Lien of the Agent on the asset or property disposed.
The cash proceeds received from an asset disposition
subject to this subsection 5.4(b)(i) in an amount equal
to the estimated amount of any federal capital gains
taxes attributable thereto shall be applied as a
prepayment of the outstanding Revolving Loans without
reducing the Revolving Commitment.
(ii) Excess Cash Flow
(A) Required Prepayment. On or before March 31,
2000, the Borrower shall make a prepayment of the Term
Loans in the amount equal to fifty percent (50.0%) of the
Borrower's Excess Cash Flow calculated for the Fiscal
Year ended on the Saturday closest to December 31, 1999
if the Adjusted EBITDA for such Fiscal Year equaled or
exceeded Thirty Million Dollars ($30,000,000).
(B) Application. The amount of any prepayment
required by this clause (ii) shall be applied to the
installments due under the Term Loans in the inverse
order of maturity.
(C) Definition of Excess Cash Flow. The phrase
"Excess Cash Flow" means, for any period, the sum of the
following calculated for the
23
Borrower and the Subsidiaries on a consolidated basis:
(1) the Borrower's consolidated net income (or loss)
determined in conformity with GAAP; plus (2) to the
extent not included in clause (1) above, the consolidated
net income (or loss) determined in conformity with GAAP
of International Processing Corporation and International
Transportation Service, Inc.; plus (3) amortization and
depreciation expense deducted in determining such net
income; plus (4) any other noncash amounts deducted in
determining such net income; minus (5) any noncash
amounts added in determining such net income; minus (6)
Capital Expenditures; minus (7) to the extent not already
deducted in determining such net income and to the extent
actually incurred, restructuring and severance costs of
up to Two Million Five Hundred Thousand Dollars
($2,500,000) in the aggregate to the extent verified by
the Borrower's auditors, KPMG Peat Marwick LLP (or any
successor thereto); minus (8) all scheduled principal
payments on all Debt, including, without limitation,
scheduled principal payments on the Term Loans (but
excluding any prepayments of the Term Loans and/or
permanent reductions of the Revolving Commitments from
Net Cash Proceeds from permitted asset dispositions),
scheduled principal payments on Capital Lease
Obligations, and the principal portion of all payments
under non-compete and consulting contracts, as such
agreements are capitalized on the consolidated balance
sheet of the Borrower.
(iii) OverAdvance. If on any date the Outstanding
Revolving Credit exceeds the aggregate amount of the
Revolving Commitments, the Borrower shall pay the Agent
for the account of the applicable Banks on such date the
amount of the excess, with such amount so paid to be
applied to reduce the Swingline Loans and once the
Swingline Loans are paid in full, the Revolving Loans. If
the Outstanding Revolving Credit exceeds the aggregate
amount of the Revolving Commitments after giving effect
to such application, the remaining amount of the payments
so received shall be held as collateral by the Agent to
secure the outstanding Letter of Credit Liabilities and
other Obligations.
(iv) Control of Cash and Application to
Obligations(iv) Control of Cash and Application to
Obligations. The Borrower and the Significant
Subsidiaries have instructed all customers and other
Persons making payment on accounts and other Collateral
to make all payments thereon to a post office box or
boxes established in accordance with the Lockbox
Agreements or by wire transfer to the Concentration
Account or one of the Lockbox Accounts. The collected
funds on deposit in the Borrower's and each Significant
Subsidiary's Lockbox Accounts shall be paid to the Agent
on a daily basis by automated clearing house debit for
credit to the Concentration Account or by wire transfer.
The funds deposited in the Concentration Account (over
which the Borrower shall have no control) or wire
transferred to Agent from the Lockbox Accounts (the
"Available Cash") shall be applied by the Agent for the
benefit of the Secured Parties as follows:
(A) if no Acceleration Event exists, as follows:
(1) first, as a payment of the outstanding principal
amount of the Swingline Loans until paid in full; (2)
second, to the outstanding principal amount of the
Revolving Loans until paid in full; (3) third, to any
unpaid interest accrued on the Loans until paid in full;
(4) fourth, to the installments due on the Term Loans, in
the inverse order of maturity until the Term Loans are
paid in full; (5) fifth, to the repayment of any other
Obligations which are due and outstanding, and if after
the foregoing
24
applications, Available Cash remains available to be
disbursed and (x) if no Event of Default exists, the
Agent shall deposit such remaining amount to an account
of the Borrower or transfer such funds as the Borrower
shall direct; or (y) if an Event of Default exists and no
Acceleration Event exists, such remaining amount shall be
held by the Agent in an interest bearing account over
which the Agent shall have the sole right of withdrawal
as collateral for the Obligations until the Obligations
have been cash secured by an amount not less than One
Hundred Five Percent (105%) of the amount thereof and
then any portion of the remaining amount still available
shall be deposited in an account of the Borrower or
transferred as the Borrower shall direct.
(B) if an Acceleration Event exists, the Available
Cash shall be applied by the Agent for the benefit of the
Secured Parties to the Obligations in accordance with
subsection 5.6(b).
The term "Acceleration Event" means the acceleration of the
maturity of the Loans or the occurrence of an Event of Default
of type described in subsections 12.1(e) or (f).
(v) Breakfunding Costs. Any prepayment required
by this subsection 5.4(b) shall be accompanied by any amount
due under Section 6.3.
Section 5.5 Method of Payment. Except as otherwise expressly provided
herein, all payments of principal, interest, and other amounts to be made by the
Borrower or any Obligated Party under the Loan Documents shall be made to the
Agent at the Principal Office for the account of each Bank's Applicable Lending
Office in Dollars and in immediately available funds, without set-off,
deduction, or counterclaim, not later than 1:00 p.m. on the date on which such
payment shall become due (each such payment made after such time on such due
date to be deemed to have been made on the next succeeding Business Day). The
Borrower and each Obligated Party shall, at the time of making each such
payment, specify to the Agent the sums payable under the Loan Documents to which
such payment is to be applied (and in the event that the Borrower fails to so
specify and such payment can not otherwise be identified as a payment required
under subsection 5.4 (b), or if an Event of Default has occurred and is
continuing, the Agent may apply such payment and any proceeds of any Collateral
to the Obligations in such order and manner as it may elect in its sole
discretion, subject to Section 5.6); provided that any payment made within ten
(10) Business Days prior to a scheduled payment date under the Term Loans shall
be deemed a "payment" rather than a "prepayment" to the extent necessary to
discharge the next due installment. Each payment received by the Agent under any
Loan Document for the account of a Secured Party shall be paid to such Secured
Party by 3:00 p.m. on the date the payment is deemed made to the Agent in
immediately available funds, for the account of such Secured Party's Applicable
Lending Office, if any. Whenever any payment under any Loan Document shall be
stated to be due on a day that is not a Business Day, such payment may be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of the payment of interest and commitment
fee, as the case may be.
Section 5.6 Pro Rata Treatment; Distribution of Proceeds of Collateral and
Collection on the GuarantySection 5.6 Pro Rata Treatment; Distribution of
Proceeds of Collateral and Collection on the Guaranty.
(a) Pro Rata Treatment. Except to the extent otherwise
provided herein: (i) each Loan (other than the Swingline Loan) shall be
made by the Banks, each payment of fees under Section 2.5, subsection
7.1(j) and letter of credit fees under subsection 2.7(c) shall be made
for the account of the Banks, and each termination or reduction of the
Commitments shall be applied to
25
the Commitments of the Banks, pro rata according to their respective
Commitment Percentages; (ii) each payment and prepayment of principal
of or interest on Loans or Reimbursement Obligations by the Borrower
(including payments made under subsection 5.4(b)) shall be made to the
Agent for the account of the Agent or the Banks holding such Loans or
Reimbursement Obligations (or participation interests therein) pro rata
in accordance with the respective unpaid principal amounts of such
Loans or participation interests held by the Agent or such Banks
(provided that only the Agent shall be entitled to principal and
interest on the Swingline Loan unless the other Banks have funded their
participations therein in accordance with subsection 2.8(c)); and (iii)
the Banks (other than the Agent) shall purchase from the Agent
participations in the Letters of Credit and Swingline Loans to the
extent of their respective Commitment Percentages.
(b) Proceeds of Collateral and Collections under the
Guaranty. When an Acceleration Event exists, all Available Cash, all
other proceeds received by Agent from the Agent's sale or other
liquidation of the Collateral, and all proceeds from collections under
the Guaranty as a result of the enforcement of the terms thereof by the
Agent shall first be applied as payment of the accrued and unpaid fees
of the Agent hereunder and then to all other unpaid or unreimbursed
Obligations (including reasonable attorneys' fees and expenses) owing
to the Agent in its capacity as Agent only and then any remaining
amount of such proceeds shall be distributed:
(i) first, to the Secured Parties, pro rata in
accordance with the respective unpaid amounts of the Primary
Obligations (including in such Primary Obligations for
purposes of this calculation, all of the Contingent Primary
Obligations), until all the Primary Obligations are paid in
full and all Contingent Primary Obligations are terminated,
cash secured by an amount not to exceed One Hundred Five
Percent (105%) of the amount thereof or otherwise satisfied;
provided that each Bank's pro rata portion of such proceeds
applicable to the Contingent Primary Obligations shall be held
by the Agent as collateral in an interest bearing account over
which the Borrower shall have no right of withdrawal; and
(ii) second, to the Secured Parties, pro rata in
accordance with the respective unpaid amounts of the Secondary
Obligations.
After all the Primary Obligations are paid in full and all Contingent
Primary Obligations have terminated or are otherwise satisfied, all
remaining portions of the proceeds of Collateral then held by the Agent
as collateral for the Contingent Primary Obligations shall be
distributed to the Secured Parties, pro rata in accordance with the
respective unpaid amounts of the Secondary Obligations. Notwithstanding
the forgoing, if the Agent shall ever receive proceeds from the
disposition of any of the Leased Equipment prior to the payment and
satisfaction in full of all the Secondary Obligations secured thereby
or otherwise relating thereto, the Agent shall pay the amount of the
proceeds so received to the Bank or Approved Bank Affiliate entitled
thereto. If all the Secondary Obligations secured by or arising in
connection with a piece of Leased Equipment are paid and satisfied in
full, then each Bank and each Approved Bank Affiliate who receives any
proceeds from such Leased Equipment (other than through the Agent)
shall deliver the proceeds so received to the Agent for distribution in
accordance with clauses (i) and (ii) of this subsection 5.6 (b). After
all the Obligations (including without limitation, all contingent
Obligations) have been paid and satisfied in full, all Commitments
terminated and all other obligations of any Secured Party to the
Borrower or any Obligated Party otherwise satisfied, any proceeds of
Collateral shall
26
be delivered to the Person entitled thereto as determined by applicable
law or applicable court order.
(c) Noncash Proceeds. Notwithstanding anything contained
herein to the contrary, if the Agent shall ever acquire any Collateral
through foreclosure or by a conveyance in lieu of foreclosure or by
retaining any of the Collateral in satisfaction of all or part of the
Obligations or if any proceeds of Collateral received by the Agent to
be distributed and shared pursuant to this Section 5.6 are in a form
other than immediately available funds, the Agent shall not be required
to remit any share thereof under the terms hereof and the Secured
Parties shall only be entitled to their undivided interests in the
Collateral or noncash proceeds as determined by subsection 5.6(b). The
Secured Parties shall receive the applicable portions (in accordance
with the forgoing clause (b)) of any immediately available funds
consisting of proceeds from such Collateral or proceeds of such noncash
proceeds so acquired only if and when received by the Agent in
connection with the subsequent disposition thereof. While any
Collateral or other property to be shared pursuant to this Section 5.6
is held by the Agent pursuant to this clause (c), the Agent shall hold
such Collateral or other property for the benefit of the Secured
Parties and all matters relating to the management, operation, further
disposition or any other aspect of such Collateral or other property
shall be resolved by the agreement of the Required Banks.
(d) Return of Proceeds. If at any time payment, in whole or in
part, of any amount distributed by the Agent hereunder is rescinded or
must otherwise be restored or returned by the Agent as a preference,
fraudulent conveyance, or otherwise under any bankruptcy, insolvency,
or similar law, then each Person receiving any portion of such amount
agrees, upon demand, to return the portion of such amount it has
received to the Agent.
Section 5.7 Sharing of Payments. If a Bank, shall obtain payment of any
principal of or interest on any of the Obligations due to such Bank hereunder
directly (and not through the Agent) through the exercise of any right of
set-off, banker's lien, counterclaim or similar right, or otherwise, such Bank
shall promptly purchase from the other Banks participations in the Obligations
held by the other Banks in such amounts, and make such other adjustments from
time to time as shall be equitable to the end that all the Banks shall share the
benefit of such payment pro rata in accordance with the unpaid principal of and
interest on the Obligations then due to each of them. To such end, all of the
Banks shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if all or any portion of such excess payment
is thereafter rescinded or must otherwise be restored. The Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any Bank
so purchasing a participation in the Obligations held by the other Banks may
exercise all rights of set-off, banker's lien, counterclaim, or similar rights
with respect to such participation as fully as if such Bank were a direct holder
of Obligations in the amount of such participation. Nothing contained herein
shall require any Bank to exercise any such right or shall affect the right of
any Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Borrower.
Section 5.8 Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Bank or the Borrower (the "Payor") prior to the date on
which such Bank is to make payment to the Agent hereunder or the Borrower is to
make a payment to the Agent for the account of one or more of the Banks, as the
case may be (such payment being herein called the "Required Payment"), which
notice shall be effective upon receipt, that the Payor does not intend to make
the Required Payment to the Agent, the Agent may assume that the Required
Payment has been made and may, in reliance upon such assumption (but shall not
be required to), make the amount thereof available to the intended recipient on
such date and, if the Payor has not in fact made the Required Payment to the
Agent, (a) the recipient of such payment
27
shall, on demand, pay to the Agent the amount made available to it together with
interest thereon in respect of the period commencing on the date such amount was
so made available by the Agent until the date the Agent recovers such amount at
a rate per annum equal to the Federal Funds Rate for such period and (b) Agent
shall be entitled to offset against any and all sums to be paid to such
recipient, the amount calculated in accordance with the foregoing clause (a).
Section 5.9 Withholding Taxes. All payments by the Borrower of amounts
payable under any Loan Document shall be payable without deduction for or on
account of any present or future taxes, duties, or other charges levied or
imposed by the United States of America or by the government of any jurisdiction
outside the United States of America or by any political subdivision or taxing
authority of or in any of the foregoing through withholding or deduction with
respect to any such payments (but excluding any tax imposed on or measured by
the net income or profit of a Bank pursuant to the laws of the jurisdiction in
which it is organized or in which the principal office or Applicable Lending
Office of such Bank is located or any subdivision thereof or therein). If any
such taxes, duties, or other charges are so levied or imposed, the Borrower will
make additional payments in such amounts so that every net payment of amounts
payable by it under any Loan Document, after withholding or deduction for or on
account of any such present or future taxes, duties, or other charges, will not
be less than the amount provided for herein or therein, provided that the
Borrower may withhold to the extent required by law and shall have no obligation
to pay such additional amounts to any Bank to the extent that such taxes,
duties, or other charges are levied or imposed by reason of the failure or
inability of such Bank to comply with the provisions of Section 5.10. The
Borrower shall furnish promptly to the Agent for distribution to each affected
Bank, as the case may be, official receipts evidencing any such withholding or
reduction.
Section 5.10 Withholding Tax Exemption. Each Bank that is not
incorporated under the laws of the United States of America or a state thereof
agrees that it will deliver to the Borrower and the Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224, certifying
in either case that such Bank is entitled to receive payments from the Borrower
under any Loan Document without deduction or withholding of any United States
federal income taxes. Each Bank which so delivers a Form 1001 or 4224 further
undertakes to deliver to the Borrower and the Agent two (2) additional copies of
such form (or a successor form) on or before the date such form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent form so delivered by it, and such amendments thereto or extensions
or renewals thereof as may be reasonably requested by the Borrower or the Agent,
in each case certifying that such Bank is entitled to receive payments from the
Borrower under any Loan Document without deduction or withholding of any United
States federal income taxes, unless an event (including, without limitation, any
change in treaty, law, or regulation) has occurred prior to the date on which
any such delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Bank from duly completing and
delivering any such form with respect to it and such Bank advises the Borrower
and the Agent that it is not capable of receiving such payments without any
deduction or withholding of United States federal income tax.
Section 5.11 Participation Obligations Absolute; Failure to Fund
Participation. The obligations of a Bank to fund its participation in the
Swingline Loans and Letters of Credit in accordance with the terms hereof shall
be absolute, unconditional, and irrevocable and shall be performed strictly in
accordance with the terms of the Loan Documents under all circumstances
whatsoever, including, without limitation, the following circumstances: (a) any
lack of validity of any Loan Document; (b) the occurrence of any Default; (c)
the existence of any claim, set-off, counterclaim, defenses, or other rights
which such Bank, the Borrower, any Obligated Party, or any other Person may
have; (d) the occurrence of any event that has or could reasonably be expected
to have a Material Adverse Effect; (e) the failure of any condition to a Loan
under Article 7 to be satisfied; or (f) any other circumstance whatsoever,
whether or not similar to any of the foregoing; provided that, the obligations
of a Bank to fund its participation in a Swingline
28
Loan or a Letter of Credit may be subject to avoidance by a Bank if such Bank
proves in a final nonappealable judgment that it was damaged and that such
damage arose directly from the Agent's willful misconduct or gross negligence
(notwithstanding whether such misconduct or negligence is proven by the Bank or
is proven by the Borrower pursuant to Section 2.7(f)) in determining whether (i)
the conditions set forth in Article 7 to the issuance of the Letter of Credit in
question or the making of the Swingline Loan in question were satisfied at the
time of such issuance or such Loan or (ii) the documentation presented under the
Letter of Credit in question complied with the terms thereof. If a Bank fails to
fund its participation in a Swingline Loan or a Letter of Credit as required
hereby, such Bank shall, subject to the foregoing proviso, remain obligated to
pay to the Agent the amount it failed to fund on demand together with interest
thereon in respect of the period commencing on the date such amount should have
been funded until the date the amount was actually funded to the Agent at a rate
per amount equal to the Federal Funds Rate for such period and the Agent shall
be entitled to offset against any and all sums to be paid to such Bank hereunder
the amount due the Agent under this sentence.
ARTICLE 6
Yield Protection and Illegality
-------------------------------
Section 6.1 Additional Costs
(a) The Borrower shall pay directly to each Bank from time to
time such amounts as such Bank may determine to be necessary to
compensate it for any costs incurred by such Bank which such Bank
determines are attributable to its maintaining of any Loans subject to
Libor Accounts or Letters of Credit hereunder or its obligation to
issue or participate in any Letter of Credit, or any reduction in any
amount receivable by such Bank hereunder in respect of any such Loans
or Letters of Credit or such obligation (such increases in costs and
reductions in amounts receivable being herein called "Additional
Costs"), resulting from any Regulatory Change which:
(i) changes the basis of taxation of any amounts payable
to such Bank under this Agreement or its Notes in respect of
any of such Loans (other than franchise taxes and taxes
imposed on the overall net income of such Bank or its
Applicable Lending Office for any of such Loans by the United
States of America or the jurisdiction in which such Bank has
its principal office or such Applicable Lending Office);
(ii) imposes or modifies any reserve, special deposit,
minimum capital, capital ratio, or similar requirement
relating to any extensions of credit or other assets of, or
any deposits with or other liabilities or commitments of, such
Bank (including, without limitation, any of such Loans or any
deposits referred to in the definition of "Libor Rate" in
Section 1.1 of the Original Agreement); or
(iii) imposes any other condition affecting this Agreement
or the Notes or any of such extensions of credit or
liabilities or commitments.
Each Bank will notify the Borrower (with a copy to the Agent) of any
event occurring after the date of this Agreement which will entitle
such Bank to compensation pursuant to this subsection 6.1(a) as
promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and will designate a different
Applicable Lending Office for the Loans affected by such event if such
designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Bank, violate
any law, rule, or regulation or be in any
29
way disadvantageous to such Bank. Each Bank will furnish the Borrower
with a certificate setting forth the basis and the amount of each
request of such Bank for compensation under this subsection 6.1(a). A
Bank may only request compensation under this subsection 6.1(a) for
Additional Cost incurred (i) at any time after the date which is three
(3) months prior to the date the Bank requests such compensation and
(ii) at any time after it has notified the Borrower it will request
compensation under this subsection 6.1(a).
(b) Determinations and allocations by any Bank for purposes of
this Section 6.1 of the effect of any Regulatory Change on its costs of
maintaining Loans subject to a Libor Account or to issue or participate
in Letters of Credit or of maintaining Loans subject to a Libor Account
or issuing or participating in Letters of Credit or on amounts
receivable by it in respect of such Loans or Letters of Credit, and of
the additional amounts required to compensate such Bank in respect of
any Additional Costs, shall, absent manifest error, be conclusive,
provided that such determinations and allocations are made on a
reasonable basis.
Section 6.2 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to maintain Loans subject to a Libor Account hereunder, then such
Bank shall promptly notify the Borrower (with a copy to the Agent) thereof, such
Bank's obligation to maintain Loans subject to a Libor Account shall be
suspended until such time as such Bank may again maintain Loans subject to a
Libor Account and the Bank's Libor Accounts shall be automatically Converted
into Base Rate Accounts on such date as such Bank may specify to the Borrower
with a copy to the Agent. To the extent that such Bank's Libor Accounts have
been so Converted, all payments and prepayments of principal which would
otherwise be applied to such Bank's Libor Accounts shall be applied instead to
its Base Rate Accounts.
Section 6.3 Compensation. The Borrower shall pay to the Agent for the
account of each Bank, upon the request of such Bank, such amount or amounts as
shall be sufficient (in the reasonable opinion of such Bank) to compensate it
for any loss, cost, or expense incurred by it as a result of:
(a) Any payment or prepayment of a Loan subject to a Libor
Account or Conversion of a Libor Account for any reason (including,
without limitation, the mandatory prepayment of the Loans pursuant to
Section 5.4 or the acceleration of the outstanding Loans pursuant to
subsection 12.2(a)) on a date other than the last day of an Interest
Period for the applicable Libor Account; or
(b) Any failure by the Borrower for any reason to prepay a
Loan subject to a Libor Account, on the date for such prepayment
specified in the relevant notice of prepayment under this Agreement.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the excess, if any, of (i) the amount of interest
which otherwise would have accrued on the principal amount so paid or Converted
for the period from the date of such payment or Conversion to the last day of
the Interest Period for such Libor Account at the applicable rate of interest
for such Libor Account provided for herein over (ii) the interest component of
the amount such Bank would have bid in the London interbank market for Dollar
deposits of leading banks and amounts comparable to such principal amount and
with maturities comparable to such period.
Section 6.4 Capital Adequacy. If after the date hereof, any Bank shall
have determined that the adoption or implementation of any applicable law, rule,
or regulation regarding capital adequacy, or any change therein, or any change
in the interpretation or administration thereof by any central bank or
30
other Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Bank (or its parent) with any guideline, request,
or directive regarding capital adequacy (whether or not having the force of law)
of any central bank or other Governmental Authority has or would have the effect
of reducing the rate of return on such Bank's (or its parent's) capital as a
consequence of its obligations hereunder or the transactions contemplated hereby
to a level below that which such Bank (or its parent) could have achieved but
for such adoption, implementation, change, or compliance (taking into
consideration such Bank's policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within ten
(10) Business Days after demand by such Bank (with a copy to the Agent), the
Borrower shall pay to such Bank such additional amount or amounts as will
compensate such Bank (or its parent) for such reduction. A certificate of such
Bank claiming compensation under this Section and setting forth the additional
amount or amounts to be paid to it hereunder shall be conclusive, provided that
the determination thereof is made on a reasonable basis. In determining such
amount or amounts, such Bank may use any reasonable averaging and attribution
methods. With respect to each demand by a Bank under this Section 6.4, no Bank
shall have the right to demand compensation for amounts attributable to any
reduction in such Bank's rate of return occurring at any time before the date
which is three (3) months prior to the date the Bank gives such demand for
compensation to the Borrower.
Section 6.5 Replacement of a Bank. If a Bank (other than the Agent as a
Bank) becomes a Replacement Candidate, the Borrower shall have the right to
require such Bank to assign to an Eligible Assignee selected by the Borrower and
reasonably satisfactory to the Agent (which may be one or more of the Banks) the
Notes and participation interests in the Letter of Credit Liabilities and
Swingline Loans held by such Bank pursuant to the terms of an appropriately
completed Assignment and Acceptance in accordance with subsection 14.8(b);
provided that, neither the Agent nor any Bank shall have any obligation to the
Borrower to find any such Eligible Assignee and in order for the Borrower to
replace a Bank, the Borrower must require such replacement within three (3)
months of the date the Bank became a Replacement Candidate. Each Bank (other
than the Agent as a Bank) agrees to its replacement at the option of the
Borrower pursuant to this Section 6.5; provided that the Eligible Assignee
selected by the Borrower shall purchase such Bank's interest in the Obligations
owed herewith of the Borrower to such Bank for cash in an aggregate amount equal
to the aggregate unpaid principal thereof, all unpaid interest accrued thereon,
all unpaid commitment and letter of credit fees accrued for the account of such
Bank, any breakage costs incurred by the selling Bank because of the prepayment
of any Libor Accounts, all other fees (if any) applicable thereto and all other
amounts (including any amounts due under Section 6.1 or 6.4) then owing to such
Bank hereunder or under any other Loan Document. A Bank will become a
"Replacement Candidate" if (i) it has demanded compensation under Sections 5.9,
6.1 or 6.4, (ii) it has defaulted on any obligation under the Loan Documents or
(iii) it has become insolvent and its assets become subject to a receiver,
liquidator, trustee, custodian, or other officer having similar powers. The
rights of the Borrower under this Section 6.5 shall be in addition to any other
rights or remedies the Borrower may have at law or in equity as a result of the
events described in the definition of "Replacement Candidate".
ARTICLE 7
Conditions Precedent
--------------------
Section 7.1 Effectiveness of Agreement. The obligation of each Bank to
enter into this Agreement and the effectiveness hereof are subject to the
condition precedent that the Agent shall have received on or before the Closing
Date all of the following, each dated (unless otherwise indicated) the date
hereof, in form and substance satisfactory to the Agent:
(a) Resolutions. Resolutions of the Board of Directors of the
Borrower and each Significant Subsidiary certified by its Secretary or
an Assistant Secretary which authorize its execution, delivery, and
performance of the Loan Documents to which it is or is to be a party;
(b) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of the Borrower
and each Significant Subsidiary certifying the name of each of its
officers (i) who is authorized to sign the Loan Documents to which it
is or is to be a party (including, without limitation, the certificates
contemplated herein) together with specimen signatures of each such
officer and (ii) who will, until replaced by other officers duly
authorized for that purpose, act as its representative for the purposes
of signing documentation and giving notices and other communications in
connection with this Agreement and the transactions contemplated
hereby;
(c) Articles of Incorporation. The articles of incorporation
of the Borrower and each Significant Subsidiary certified by the
Secretary of State of the state of its incorporation and dated a
current date;
(d) Bylaws. The bylaws of the Borrower and each Significant
Subsidiary certified by its Secretary or an Assistant Secretary;
(e) Governmental Certificates. Certificates of the appropriate
government officials of the state of incorporation of the Borrower and
each Subsidiary as to its existence and good standing, all dated a
current date;
(f) Notes. The Notes executed by the Borrower;
(g) Guaranties. The Guaranty executed by the Significant
Subsidiaries;
(h) Personal Property Collateral Documents and Collateral.
Subject to the provisions of Section 9.10:
(i) The Borrower Security Agreement executed by the
Borrower and the Subsidiary Security Agreement executed by
each of the Significant Subsidiaries;
(ii) to the extent not already delivered under the
Original Agreement, certificates representing the capital
stock of the Subsidiaries pledged pursuant to the Borrower
Security Agreement and/or the Subsidiary Security Agreement,
together with undated stock powers duly executed in blank; and
(iii) executed documentation as Agent may deem
necessary to perfect its Liens, including, without limitation,
(A) financing statements under the UCC (or other applicable
documentation under the laws of any jurisdiction with respect
to the perfection of Liens) and (B) intellectual property
assignments for all intellectual property registered in the
United States of America; and
(i) Opinion of Counsel. A favorable opinion of legal counsel
to the Borrower and the Significant Subsidiaries, as to such matters as
the Agent or the Required Banks may reasonably request;
32
(j) Amendment Fees. An amendment fee in the amount of Three
Hundred Sixty-two Thousand Three Hundred Eighty Dollars ($362,380);
(k) Attorneys' Fees and Expenses. Evidence that the costs and
expenses (including, without limitation, attorneys' fees) referred to
in Section 14.1, to the extent incurred, shall have been paid in full
by the Borrower; and
(l) No Material Adverse Effect. Other than the "Continuing
Defaults" (as such term is defined in that the Forbearance Agreement),
since September 30, 1998, there shall not have occurred any event that
could reasonably be expected to have a Material Adverse Effect;
provided that for purposes of this clause (l) only, neither the decline
in commodity prices of the goods which compete with the type of goods
sold by the Borrower or any Obligated Party nor the Borrower's and the
Subsidiaries' financial and operating performance during the fourth
Fiscal Quarter of 1998 shall be deemed to create a Material Adverse
Effect (notwithstanding the forgoing, the Borrower acknowledges that
the failure to satisfy the financial covenants set forth herein
applicable to the fourth Fiscal Quarter of 1998 shall result in a
Default hereunder).
Section 7.2 Loans and Letters of Credit. The obligation of each Bank to
make any Loan and the obligation of the Agent to issue any Letter of Credit or
make any Swingline Loan are subject to the following additional conditions
precedent:
(a) No Default. No Default shall have occurred and be
continuing, or would result from such Loan or Letter of Credit;
(b) Representations and Warranties. All of the representations
and warranties contained in Article 8 and in the other Loan Documents
shall be true and correct in all material respects on and as of the
date of such Loan or Letter of Credit with the same force and effect as
if such representations and warranties had been made on and as of such
date except to the extent that such representations and warranties
relate specifically to another date; and
(c) Additional Documentation. The Agent shall have received
such additional approvals, opinions, or documents as the Agent or the
Required Banks may reasonably request.
Each notice of borrowing by the Borrower hereunder, and each request for the
issuance of a Letter of Credit, shall constitute a representation and warranty
by the Borrower that the conditions precedent set forth in subsections 7.2(a)
and (b) have been satisfied (both as of the date of such notice and, unless the
Borrower otherwise notifies the Agent prior to the date of such borrowing or
Letter of Credit, as of the date of such borrowing or Letter of Credit).
ARTICLE 8
Representations and Warranties
------------------------------
To induce the Agent and the Banks to enter into this Agreement, the
Borrower represents and warrants to the Agent and the Banks that:
Section 8.1 Corporate ExistenceSection 8.1 Corporate Existence. The
Borrower and each Subsidiary (a) is a corporation or other entity (as reflected
on Schedule 8.14) duly organized, validly existing, and in good standing under
the laws of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority to
33
own its assets and carry on its business as now being or as proposed to be
conducted, and (c) is qualified to do business in all jurisdictions in which the
nature of its business makes such qualification necessary and where failure to
so qualify would have a Material Adverse Effect. The Borrower and each Obligated
Party has the corporate power and authority to execute, deliver, and perform
their respective obligations under the Loan Documents to which it is or may
become a party.
Section 8.2 Financial Statements. The Borrower has delivered to the
Agent and the Banks audited consolidated financial statements of the Borrower
and the Subsidiaries as at and for the Fiscal Year ended on or about December
31, 1997 and unaudited consolidated financial statements of the Borrower and the
Subsidiaries for the Fiscal Quarter ended October 3, 1998. Such financial
statements, have been prepared in accordance with GAAP, and present fairly, on a
consolidated basis, the financial condition of the Borrower and the Subsidiaries
as of the respective dates indicated therein and the results of operations for
the respective periods indicated therein. Neither the Borrower nor any of the
Subsidiaries has any material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments, or unrealized or anticipated losses
from any unfavorable commitments except as referred to or reflected in such
financial statements. Except for the matters disclosed in subsection 7.1(l)
there has been no material adverse change in the business, condition (financial
or otherwise), operations, prospects, or properties of the Borrower and the
Subsidiaries taken as a whole since the effective date of the most recent
financial statements referred to in this Section.
Section 8.3 Corporate Action; No Breach. The execution, delivery, and
performance by the Borrower and each Obligated Party of the Loan Documents to
which each is or may become a party and compliance with the terms and provisions
hereof and thereof have been duly authorized by all requisite action on the part
of the Borrower and each Obligated Party and do not and will not (a) violate or
conflict with, or result in a breach of (i) the articles of incorporation or
bylaws of the Borrower or any of the Subsidiaries, (ii) any applicable law,
rule, or regulation or any order, writ, injunction, or decree of any
Governmental Authority or arbitrator other than such violations, conflicts, and
breaches which do not have a Material Adverse Effect, or (iii) any agreement or
instrument to which the Borrower or any of the Subsidiaries is a party or by
which any of them or any of their property is bound or subject other than such
violations, conflicts, and breaches which do not have a Material Adverse Effect,
or (b) constitute a default under any such agreement or instrument, or result in
the creation or imposition of any Lien (except as provided herein) upon any of
the revenues or assets of the Borrower or any Subsidiary other than such
defaults which do not have a Material Adverse Effect.
Section 8.4 Operation of Business. The Borrower and each of the
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, necessary to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted except those that the failure to so possess could not reasonably
be expected to have a Material Adverse Effect, and the Borrower and each of its
Subsidiaries are not in violation of any valid rights of others with respect to
any of the foregoing except violations that could not reasonably be expected to
have a Material Adverse Effect.
Section 8.5 Litigation and Judgments. Except as disclosed in the
Borrower's Form 10-Q for the Fiscal Quarter ended October 3, 1998, there is no
action, suit, investigation, or proceeding before or by any Governmental
Authority or arbitrator pending, or to the knowledge of the Borrower, threatened
against or affecting the Borrower or any Subsidiary, that is reasonably expected
to have a Material Adverse Effect. As of the Closing Date, there are no
outstanding judgments against the Borrower or any Subsidiary.
34
Section 8.6 Rights in Properties; Liens; Nonproductive Assets. Except
as set forth on Schedule 8.6, the Borrower and each Subsidiary have good title
to or valid leasehold interests in their respective properties and assets, real
and personal, including the properties, assets, and leasehold interests
reflected in the financial statements described in Section 8.2 (except as sold
or otherwise disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted by this Agreement or the
Original Agreement), and none of the properties, assets, or leasehold interests
of the Borrower or any Subsidiary is subject to any Lien, except as permitted by
Section 10.2. The properties listed on Schedule 10.8 are not utilized by the
Borrower or any Subsidiary in the ordinary course of business and do not
contribute to the cash flow or earnings of the Borrower or any Subsidiary.
Section 8.7 Enforceability. The Loan Documents to which the Borrower or
any Obligated Party is party, when delivered, shall constitute the legal, valid,
and binding obligations of the Borrower or the Obligated Party, as applicable,
enforceable against the Borrower or the applicable Obligated Party in accordance
with their respective terms, except as limited by bankruptcy, insolvency, or
other laws of general application relating to the enforcement of creditors'
rights and general principles of equity.
Section 8.8 Approvals. No authorization, approval, or consent of, and
no filing or registration with, any Governmental Authority or third party is or
will be necessary for the execution, delivery, or performance by the Borrower or
any Obligated Party of the Loan Documents to which each is or may become a party
or for the validity or enforceability thereof except for such authorizations,
approvals, consents, filings and registrations which (i) have been obtained or
made or (ii) the failure to obtain or make will not have a Material Adverse
Effect.
Section 8.9 DebtSection 8.9 Debt. The Borrower and the Subsidiaries
have no Debt, except as permitted by Section 10.1.
Section 8.10 Taxes. The Borrower and each Subsidiary have filed all
material tax returns (federal, state, and local) required to be filed, including
all income, franchise, employment, property, and sales tax returns, and have
paid all of their respective liabilities for taxes, assessments, governmental
charges, and other levies that are due and payable other than those being
contested in good faith by appropriate proceedings diligently pursued for which
adequate reserves have been established. Except as reflected on Schedule 8.10,
the Borrower knows of no pending investigation of the Borrower or any Subsidiary
by any taxing authority or of any pending but unassessed tax liability of the
Borrower or any Subsidiary.
Section 8.11 Margin Securities. Neither the Borrower nor any Subsidiary
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulations T, U, or X of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock.
Section 8.12 ERISA. The Borrower and each Subsidiary are in compliance
with all applicable provisions of ERISA except for such events of noncompliance
that will not have a Material Adverse Effect. Neither a Reportable Event nor a
Prohibited Transaction has occurred and is continuing with respect to any Plan.
No notice of intent to terminate a Plan has been filed, nor has any Plan been
terminated. No circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings. Neither the Borrower nor
any ERISA Affiliate has completely or partially withdrawn from a Multiemployer
Plan. The Borrower and each ERISA Affiliate have met their minimum funding
35
requirements under ERISA with respect to all of their Plans except for those
instances of noncompliance with such requirements that will not have a Material
Adverse Effect. The present value of all vested benefits under each Plan do not
exceed the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
ERISA, by an amount that will have a Material Adverse Effect. Neither the
Borrower nor any ERISA Affiliate has incurred any liability to the PBGC under
ERISA in an amount that will have a Material Adverse Effect.
Section 8.13 Disclosure. All factual information (taken as a whole)
furnished by or on behalf of the Borrower in writing to the Agent or any Bank
(including, without limitation, all information contained in the Loan Documents)
for purposes of or in connection with this Agreement, the other Loan Documents
or any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of the
Borrower to the Agent or any Bank, will be true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information
(taken as a whole) not misleading in any material respect at such time in light
of the circumstances under which such information was provided. Without limiting
the generality of the foregoing, Borrower represents and warrants that all
information contained on the Schedules hereto is true and correct in all
material respects.
Section 8.14 Subsidiaries. As of the Closing Date the Borrower has no
Subsidiaries other than those listed on Schedule 8.14 hereto. Schedule 8.14 sets
forth the type of each Subsidiary listed thereon, the jurisdiction of
incorporation or organization of each such Subsidiary, the percentage of the
Borrower's ownership of the outstanding voting stock (or other ownership
interests) of each such Subsidiary, whether the Subsidiary is a Significant
Subsidiary, and with respect to each such Subsidiary that is a corporation, the
authorized, issued and outstanding capital stock of each such Subsidiary. All of
the outstanding capital stock of each Subsidiary listed on Schedule 8.14 has
been validly issued, is fully paid, and is nonassessable. There are no
outstanding subscriptions, options, warrants, calls, or rights (including
preemptive rights) to acquire, and no outstanding securities or instruments
convertible into, capital stock of any Subsidiary listed on Schedule 8.14.
Section 8.15 Agreements. Neither the Borrower nor any Subsidiary is a
party to any indenture, loan, or credit agreement, or to any lease or other
agreement or instrument, or subject to any charter or corporate restriction that
could reasonably be expected to have a Material Adverse Effect. Neither the
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 to which it is a party other than
defaults which will not have a Material Adverse Effect.
Section 8.16 Compliance with Laws. Neither the Borrower nor any
Subsidiary is in violation of any law, rule, regulation, order, or decree of any
Governmental Authority or arbitrator other than defaults which will not have a
Material Adverse Effect.
Section 8.17 Investment Company Act. Neither the Borrower nor any
Subsidiary is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 8.18 Public Utility Holding Company Act. Neither the Borrower
nor any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company" or an "affiliate" of a "holding company" or a "public utility"
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
Section 8.19 Environmental Matters. Except as disclosed in the
Borrower's Form 10-Q for the Fiscal Quarter ended October 3, 1998 and except for
those matters which will not have a Material Adverse
36
Effect:
(a) The Borrower, each Subsidiary, and all of their respective
properties, assets, and operations are in full compliance with all
Environmental Laws. The Borrower is not aware of, nor has the Borrower
received notice of, any past, present, or future conditions, events,
activities, practices, or incidents which may interfere with or prevent
the compliance or continued compliance of the Borrower and the
Subsidiaries with all Environmental Laws;
(b) The Borrower and each Subsidiary have obtained all
permits, licenses, and authorizations that are required under
applicable Environmental Laws, and all such permits are in good
standing and the Borrower and its Subsidiaries are in compliance with
all of the terms and conditions of such permits;
(c) No Hazardous Materials exist on, about, or within or have
been used, generated, stored, transported, disposed of on, or Released
from any of the properties or assets of the Borrower or any Subsidiary
except in compliance with Environmental Laws. The use which the
Borrower and the Subsidiaries make and intend to make of their
respective properties and assets will not result in the use,
generation, storage, transportation, accumulation, disposal, or Release
of any Hazardous Material on, in, or from any of their properties or
assets except in compliance with Environmental Laws;
(d) Neither the Borrower nor any of the Subsidiaries nor any
of their respective currently or previously owned or leased properties
or operations is subject to any outstanding or, to the best of its
knowledge, threatened order from or agreement with any Governmental
Authority or other Person or subject to any judicial or administrative
proceeding with respect to (i) failure to comply with Environmental
Laws, (ii) Remedial Action, or (iii) any Environmental Liabilities
arising from a Release or threatened Release;
(e) There are no conditions or circumstances associated with
the currently or previously owned or leased properties or operations of
the Borrower or any of the Subsidiaries that could reasonably be
expected to give rise to any Environmental Liabilities;
(f) Neither the Borrower nor any of the Subsidiaries is a
treatment, storage, or disposal facility requiring a permit under the
Resource Conservation and Recovery Act, 42 U.S.C. ss. 6901 et seq.,
regulations thereunder or any comparable provision of state law. The
Borrower and the Subsidiaries are compliance with all applicable
financial responsibility requirements of all Environmental Laws;
(g) Neither the Borrower nor any of the Subsidiaries has filed
or failed to file any notice required under applicable Environmental
Law reporting a Release; and
(h) No Lien arising under any Environmental Law has attached
to any property or revenues of the Borrower or the Subsidiaries.
Section 8.20 Solvency. As of and from and after the date of this
Agreement, the Borrower and the Subsidiaries on a consolidated basis: (a) own
and will own assets the fair saleable value of which are (i) greater than the
total amount of their liabilities (including contingent liabilities) and (ii)
greater than the amount that will be required to pay the probable liabilities of
their then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
37
them; (b) have capital that is not unreasonably small in relation to their
business as presently conducted or any contemplated or undertaken transaction;
and (c) do not intend to incur and do not believe that they will incur debts
beyond their ability to pay such debts as they become due.
ARTICLE 9
Positive Covenants
------------------
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any Commitment hereunder, the
Borrower will perform and observe the following positive covenants:
Section 9.1 Reporting Requirements. The Borrower will furnish to the Agent
and each Bank:
(a) Annual Financial Statements. As soon as available, and in any
event within one hundred fifteen (115) days after the end of each Fiscal
Year of the Borrower, beginning with the Fiscal Year ending on the Saturday
closest to December 31, 1998, (i) a copy of the annual audit report of the
Borrower and the Subsidiaries for such Fiscal Year containing, on a
consolidated basis, balance sheets and statements of income, retained
earnings, and cash flow as at the end of such Fiscal Year and for the
Fiscal Year then ended, in each case setting forth in comparative form the
figures for the preceding Fiscal Year, all in reasonable detail and audited
and certified by independent certified public accountants of recognized
standing acceptable to the Agent, to the effect that such report has been
prepared in accordance with GAAP;
(b) Monthly Financial Statements and other Reports; Delivery of
New Certificates of Title and other Collateral. As soon as available, and
in any event within forty-five (45) days after the end of each four (4)
week period during its Fiscal Year (or with respect to the last such period
in each such Fiscal Year, within ninety (90) days after the end of such
four (4) or, as the case may be, five (5) week period), a copy of an
unaudited financial report of the Borrower and the Subsidiaries as of the
end of such period and for the portion of the Fiscal Year then ended
containing, on a consolidated basis, balance sheets and statements of
income, retained earnings, and cash flow, in each case setting forth in
comparative form the figures for the corresponding period of the preceding
Fiscal Year, and the corresponding period in the projections delivered
pursuant to subsection 9.1(e), all in reasonable detail certified by the
chief financial officer or treasurer of the Borrower to have been prepared
in accordance with GAAP and to fairly present (subject to year-end audit
adjustments) the financial condition and results of operations of the
Borrower and the Subsidiaries, on a consolidated basis, at the date and for
the periods indicated therein and to be accompanied by the following each
to be in form and substance reasonably satisfactory to the Agent:
(i) a comparison of actual cash receipts for the prior
month to forecasted cash receipts as set forth on the forecast
delivered for the prior month;
(ii) an update of the status of all planned asset
dispositions,
(iii) a detail of the selling prices received from its
product during the prior month and the selling prices for the
commodities that its products compete with over the same period,
38
(iv) all Capital Expenditures of the Borrower and the
Subsidiaries during the prior month,
(v) such information relating to the performance at
each of its plants that the Agent may reasonably request;
(vi) such other information as the Agent may reasonably
require; and
(vii) subject to subsection 9.10 (a), any Collateral or
related documents required to be delivered in accordance with
this subsection 9.1 (b) pursuant to Article IV of the Borrower
Security Agreement or Article IV of the Subsidiary Security
Agreement, including but not limited to, all certificates of
title evidencing ownership of any equipment purchased since the
later of the Closing Date or the last date certificates of title
were delivered under this subsection 9.1 (b), together with such
documentation as the Agent may reasonably request to cause the
Agent's Lien held for the benefit of the Secured Parties to be
noted thereon;
(c) Semi-Monthly Status Report. On the first Business Day of each
month and on the fifteenth day (15th) of each month (or if such day is not
a Business Day, on the first Business Day thereafter), a forecast of cash
receipts, disbursements and projected availability under the Revolving
Commitment for the eight (8) week period then beginning, such forecast to
be in form and substance reasonably satisfactory to the Agent;
(d) Compliance Certificate. Within sixty (60) days after the end
of each Fiscal Quarter of each Fiscal Year, or with respect to the last
Fiscal Quarter of each Fiscal Year, within ninety (90) days of the end of
such Fiscal Quarter, a Compliance Certificate ;
(e) Projections and Bonus Plan. As soon as available and in any
event forty-five (45) days after the beginning of each Fiscal Year of the
Borrower, the Borrower will deliver (i) a forecasted consolidated balance
sheet and statements of income and cash flow of the Borrower and the
Subsidiaries on a Fiscal Quarter by Fiscal Quarter basis, including the
assumptions utilized in the preparation of such projections (in narrative
form) for the forthcoming Fiscal Year and a proforma projection of the
Borrower's compliance with the financial covenants in this Agreement for
the same period and (ii) a copy of the bonus compensation or incentive plan
adopted for such Fiscal Year by Borrower and the Subsidiaries for its
officers and employees;
(f) Management Letters. Promptly upon receipt thereof, a copy of
any final management letter or written report submitted to the Borrower or
any Subsidiary by independent certified public accountants with respect to
the business, condition (financial or otherwise), operations, prospects, or
properties of the Borrower or any Subsidiary;
(g) Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits, investigations (with respect to
investigations only, of which the Borrower has actual knowledge) and
proceedings before any Governmental Authority or arbitrator affecting the
Borrower or any Subsidiary which could reasonably be expected to have a
Material Adverse Effect;
(h) Notice of Default. As soon as possible and in any event
within five (5) Business Days after an officer of the Borrower has
knowledge of the occurrence of each Default, a written
39
notice setting forth the details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto;
(i) ERISA Reports. If requested by the Agent, promptly after the
filing or receipt thereof, copies of all reports, including, without
limitation, annual reports, and notices which the Borrower or any
Subsidiary files with or receives from the PBGC or the U.S. Department of
Labor under ERISA; and as soon as possible and in any event within five (5)
Business Days after the 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 PBGC or the Borrower or any Subsidiary has
instituted or will institute proceedings under Title IV of ERISA to
terminate any Plan, a certificate of the chief financial officer of the
Borrower setting forth the details as to such Reportable Event or
Prohibited Transaction or Plan termination and the action that the Borrower
proposes to take with respect thereto;
(j) Notice of Material Adverse Effect. As soon as possible and in
any event within five (5) Business Days after an officer of the Borrower
has knowledge of the occurrence thereof, written notice of any matter that
could reasonably be expected to have a Material Adverse Effect;
(k) Press Release; Proxy Statements, Etc. As soon as available,
one copy of each press release sent by the Borrower, one copy of each
financial statement, report, notice or proxy statement sent by the Borrower
or any Subsidiary to its stockholders generally and one copy of each
regular, periodic or special report, registration statement, or prospectus
filed by the Borrower or any Subsidiary with any securities exchange or the
Securities and Exchange Commission or any successor agency; and
(l) General Information. Promptly, such other information
concerning the Borrower or any Subsidiary as the Agent or any Bank may from
time to time reasonably request.
Section 9.2 Maintenance of Existence; Conduct of Business. Except as
permitted by Section 10.3, the Borrower will, and will cause each Subsidiary to,
preserve and maintain its corporate existence and all of its leases, privileges,
licenses, permits, franchises, qualifications, and rights that are necessary in
the ordinary conduct of its business. The Borrower will, and will cause each
Subsidiary to, conduct its business in an orderly and efficient manner in
accordance with good business practices.
Section 9.3 Maintenance of Properties. The Borrower will, and will cause
each Subsidiary to, maintain, keep, and preserve all of its material properties
necessary in the conduct of its business in good working order and condition
(exclusive of ordinary wear and tear).
Section 9.4 Taxes and Claims. The Borrower will, and will cause each
Subsidiary to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property which are material in
amount (either individually or in the aggregate), and (b) all lawful claims for
labor, material, and supplies, which are material in amount (either individually
or in the aggregate) and which, if unpaid, might become a Lien upon any of its
property; provided, however, that neither the Borrower nor any Subsidiary shall
be required to pay or discharge any tax, levy, assessment, or governmental
charge which is being contested in good faith by appropriate proceedings
diligently pursued, and for which adequate reserves have been established.
Section 9.5 Insurance; Casualty and Condemnation Proceeds. The Borrower
will, and will cause each Subsidiary to, maintain insurance with financially
sound and reputable insurance companies in
40
such amounts and covering such risks as are usually carried by corporations
engaged in similar businesses and owning similar properties in the same general
areas in which the Borrower and the Subsidiaries operate, provided that in any
event the Borrower will maintain and cause each Subsidiary to maintain workmen's
compensation insurance, property insurance, comprehensive general liability
insurance, and products liability insurance reasonably satisfactory to the
Agent. Each general liability insurance policy shall name the Agent as
additional insured, each insurance policy covering Collateral shall name the
Agent as loss payee and all such policies shall provide that they will not be
canceled or materially changed without thirty (30) days prior written notice to
the Agent. Borrower and the Subsidiaries may retain the proceeds of any payments
made under casualty insurance policies and any proceeds of any condemnation
action, if (i) no Event of Default exists at the time such proceeds are
received; and (ii) the Borrower or the applicable Subsidiary utilizes the
proceeds to repair or replace the property damaged or condemned, to construct a
replacement facility for the property damaged or condemned or to expand the
productive capacity of an existing facility.
Section 9.6 Inspection Rights. At any reasonable time and from time to time
prior to a Default upon one (1) Business Day's prior notice and at any
reasonable time after the occurrence and during the continuance of a Default,
the Borrower will, and will cause each Subsidiary to, permit representatives of
the Agent and each Bank to examine, copy, and make extracts from its books and
records, to visit and inspect its properties, and to discuss its business,
operations, and financial condition with its officers, employees, and
independent certified public accountants. The Agent and each Bank will give the
Borrower the opportunity to participate in any discussions they conduct with the
Borrower's independent certified public accountants.
Section 9.7 Keeping Books and Records. The Borrower will, and will cause
each Subsidiary to, maintain proper books of record and account in which full,
true, and correct entries in conformity with GAAP shall be made of all dealings
and transactions in relation to its business and activities.
Section 9.8 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all applicable laws (including, without limitation,
all Environmental Laws), rules, regulations, orders, and decrees of any
Governmental Authority or arbitrator other than such noncompliance which will
not have a Material Adverse Effect.
Section 9.9 Compliance with Agreements. The Borrower will, and will cause
each Subsidiary to, comply with all agreements, contracts, and instruments
binding on it or affecting its properties or business other than such
noncompliance which will not have a Material Adverse Effect.
Section 9.10 Further Assurances; Post Closing Items; Exceptions to
Perfection and other Collateral Matters.
(a) Further Assurance. The Borrower will, and will cause each
Subsidiary to, execute and deliver such further documentation and take such
further action as may be requested by the Agent to carry out the provisions
and purposes of the Loan Documents and to create, preserve, and perfect the
Liens of the Agent for the benefit of itself and the Secured Parties in the
Collateral; provided that (i) until a Perfection Event occurs, neither the
Borrower nor any Subsidiary shall be required to cause the Agent's Lien to
be noted on any certificate of title evidencing the ownership in any
equipment subject to an operating or capital lease now in existence or
hereafter entered into in accordance with this Agreement or any of the
vehicles identified on Schedule 9.10 (a) and (ii) neither the Borrower nor
any Subsidiary shall be required to cause the Agent's Lien on intellectual
property which is registered outside the United States of
41
America and is listed on Schedule 9.10 (a) to be recorded in any
jurisdiction outside the United States of America because the Borrower and
the Subsidiaries intend on abandoning the registrations listed on Schedule
9.10 (a). If a Perfection Event occurs and continues, the Borrower shall,
and shall cause the Significant Subsidiaries, to take such action as the
Agent may require to perfect and protect the Liens of the Agent in any of
such equipment or other vehicles as the Agent may specify. If the Borrower
or any Subsidiary determines not to abandon a registration listed on
Schedule 9.10 (a), the Borrower shall, or shall cause the applicable
Significant Subsidiary, to take such action as the Agent may require to
record its Liens against such registration. The term "Perfection Event"
means (i) the occurrence of a Default; (ii) with respect to any piece of
equipment which is subject to an operating or capital lease, the
acquisition by Borrower of ownership of such equipment either pursuant to
the exercise of a purchase option or otherwise at the expiration of the
applicable lease term; or (iii) with respect to the equipment listed on
Schedule 9.10 (a), the determination by Borrower or any Subsidiary not to
dispose of such equipment or the failure of such equipment to be disposed
of by December 31, 1999. Each Approved Bank Affiliate, by accepting the
benefits of the Liens granted in the Loan Documents: (A) consents to the
Liens granted in favor of the Agent in the Borrower's rights in and to the
operating and capital leases entered into with the Borrower and the
equipment the subject thereof and (B) agrees that when all obligations owed
to it arising in connection with any such operating or capital lease are
satisfied (provided that the Borrower becomes the owner of the equipment
subject to such lease), it will deliver any certificates of title
evidencing the ownership in such equipment to the Agent, with such
documentation as the Agent may require to release the Secured Party's Lien
thereon, transfer ownership to the Borrower and record the Agent's Lien
thereon. The Agent is authorized to record its Lien on any certificate of
title so received.
(b) Post Closing Items; Perfection and Protection of Liens on Personal
Property(b) Post Closing Items; Perfection and Protection of Liens on
Personal Property. Without limiting clause (a) of this Section 9.10 and to
the extent not delivered on or prior to the Closing Date, the Borrower
agrees that it shall, and shall cause each Significant Subsidiary, to:
(i) deliver to the Agent on or before February 15, 1999
certificates of the appropriate government officials of each state in
which the Borrower and each Significant Subsidiary is required to
qualify to do business and where failure to so qualify could
reasonably be expected to have a Material Adverse Effect, as to the
Borrower's and each such Subsidiary's qualification to do business and
good standing in such state, all dated a current date;
(ii) deliver to the Agent on or before March 1, 1999, (A) subject
to clause (a) of this Section 9.10, properly executed and completed
intellectual property assignments for all intellectual property of the
Borrower and the Significant Subsidiaries registered in jurisdictions
outside the United States of America and (B) sufficient real property
descriptions to attach to each UCC fixture filing financing statements
so that such statements can be filed in the real property records in
all jurisdictions in which the Borrower's and each Significant
Subsidiary owns any fixtures; provided, however, that neither the
Borrower nor any Significant Subsidiary shall have an obligation to
provide any such real property descriptions with respect to any of its
leasehold estates if (x) no such real property description is
available after Commercially Reasonable Efforts to obtain the same are
made or (b) the lease (or other agreement) governing such leasehold
estate prohibits liens on fixtures or the delivery of a real property
description and the Borrower is unable, after Commercially Reasonable
Efforts are made to obtain the applicable landlord's consent, to
obtain such consent;
42
(iii) use Commercially Reasonable Efforts to obtain and deliver
to the Agent on or before March 1, 1999 waivers, subordinations or
acknowledgments from all third parties who have possession or control
of any Collateral all in form and substance reasonably satisfactory to
the Agent, including, without limitation: (A) agreements with the
landlords of all premises leased by the Borrower and any Significant
Subsidiary containing such consents and waivers as the Agent may
reasonably require; (B) agreements from each bank or brokerage company
holding any deposit, commodity or securities account (excluding any
such accounts all the funds in which are held in trust for the benefit
of employees or in trust for the benefit of other third parties) of
the Borrower or any Significant Subsidiary with an average monthly
balance of over Twenty-Five Thousand Dollars ($25,000) in any
individual case (provided that the aggregate average monthly balance
of all accounts not subject to an agreement of the type described in
this clause (B) shall not exceed One Hundred Thousand Dollars
($100,000)) granting the Agent control over such accounts and
containing such other agreements as the Agent may reasonably require;
and (C) agreements with inventory processors governing inventory of
the Borrower or any Significant Subsidiary containing such consents
and waivers as the Agent may reasonably require; and
(iv) except as permitted by clause (a) of this Section 9.10,
deliver to the Agent on or before March 1, 1999 all certificates of
title evidencing ownership of equipment of the Borrower and the
Significant Subsidiaries with such documentation as the Agent may
require to cause the Lien of the Agent to be reflected thereon.
(c) Deposit Accounts(c) Deposit Accounts. In the event Borrower or a
Significant Subsidiary is not able by March 1, 1999 to obtain an agreement
of the type described in subsection 9.10(b)(iii)(B) from a bank holding a
deposit account with an average monthly balance of over Twenty-Five
Thousand Dollars ($25,000.00), Borrower or the applicable Significant
Subsidiary shall not use such account after, and shall close such account
by, March 31, 1999.
(d) Creation, Perfection and Protection of Liens on Real Property(d)
Creation, Perfection and Protection of Liens on Real Property. The Borrower
agrees it shall, and shall cause the Significant Subsidiaries to:
(i) Fee Owned Designated Property Mortgages. Execute and deliver
to the Agent on or before March 1, 1999 a Mortgage covering each
parcel of Fee Owned Designated Property, with a metes and bounds or
other description of each such parcel attached thereto sufficient to
permit the filing of such Mortgage in the applicable real property
records;
(ii) Fee Owned Designated Property Related Documents. Deliver to
the Agent on or before May 7, 1999, all of the following in form and
substance reasonably satisfactory to the Agent with respect to each
parcel of Fee Owned Designated Property:
(A) a title insurance commitment and all documentation
evidencing any exceptions to title reflected thereon;
(B) a survey of the parcel, certified by a licensed
surveyor;
(C) an environmental report for the parcel, prepared by a
third party environmental engineer reasonably acceptable to the
Agent; and
43
(D) a lender's title insurance policy (together with any
required endorsements thereto) issued by a title insurer
reasonably satisfactory to the Agent in an amount equal to the
fair market value of the underlying property.
(iii) Landlord Consents. Use Commercially Reasonable Efforts to
obtain by March 1, 1999 from each landlord of each parcel of
Designated Leased Property, a consent to the grant by the Borrower of
a Lien to the Agent in the Borrower's interest in the related
leasehold estate, such consent to contain customary consents,
estoppels and nondisturbance provisions and to otherwise be in form
and substance reasonably satisfactory to the Agent (each a "Landlord
Consent" and the term "Designated Leased Property" means leasehold
estates of the Borrower which the Agent has designated to be mortgaged
to the Agent for the benefit of the Secured Parties based on the value
of the leasehold estate, either in and of itself or because of its
importance to the operations of the Borrower and the Subsidiaries);
(iv) Leasehold Properties Mortgage. For each Designated Leased
Property for which a Landlord Consent has been delivered in accordance
with the forgoing clause (iii), execute and deliver to the Agent on or
before March 1, 1999 a Mortgage covering each such parcel of
Designated Leased Property, with a metes and bounds or other
description of the each such parcel attached thereto sufficient to
permit the filing of such Mortgage in the applicable real property
records;
(v) Designated Leased Property Related Documents. Deliver to the
Agent on or before May 7, 1999, all of the following in form and
substance reasonably satisfactory to the Agent with respect to each
parcel of Designated Leased Property for which a Landlord Consent has
been delivered in accordance with the foregoing clause (iii):
(A) a copy and, if available, a summary of, the lease
agreement;
(B) if the Agent reasonably requires, a title insurance
commitment and all documentation evidencing any exceptions to
title reflected thereon;
(C) if available or if the Agent otherwise reasonably
requires, a survey of the parcel, certified by a licensed
surveyor;
(D) an environmental report for the parcel, prepared by a
third party environmental engineer reasonably acceptable to the
Agent; and
(E) if required by the Agent, a lender's title insurance
policy (together with any required endorsements thereto) issued
by a title insurer satisfactory to the Agent in an amount equal
to the fair market value of the underlying property.
If requested by the Agent or required by applicable law, the Borrower
shall deliver or cause to be delivered from time to time to the Agent
a current appraisal of each parcel of property covered by a Mortgage
that has a material value (as determined by the Agent), such
appraisals to be in form and substance reasonably satisfactory to the
Agent; provided that unless required by applicable law or unless a
Default exists, the Agent shall not be permitted to require more than
one appraisal for each such parcel of property during any calendar
year at the Borrower's expense. With respect to
44
any parcel of property, without the consent of the Secured Parties,
the Agent may determine not to require the Borrower or a Significant
Subsidiary to grant a Lien in its favor thereon if the Agent finds
that the environmental condition of such property is not satisfactory
to the Agent.
(e) Insignificant Subsidiaries(e) Insignificant Subsidiaries.
If any Insignificant Subsidiary's (or the aggregate amount of the
Insignificant Subsidiaries') net worth or total assets increases so
that it and/or any other such Subsidiary becomes a Significant
Subsidiary, the Borrower shall cause each such Significant Subsidiary
to execute and deliver such documentation as the Agent may request to
cause such Significant Subsidiary to evidence, perfect, or otherwise
implement the guaranty of and security for the Obligations contemplated
by the Guaranty and the Subsidiary Security Agreement.
Section 9.11 ERISA. The Borrower will, and will cause each Subsidiary to,
comply with all minimum funding requirements and all other requirements of
ERISA, if applicable, so as not to give rise to any liability which will have a
Material Adverse Effect.
Section 9.12 Packers and Stockyards Act Compliance. If the Borrower or any
Subsidiary purchases livestock by purchase or cash sales, the Borrower shall at
its own expense take such steps to insure that any trust established under the
Packers and Stockyards Act, 1921, as amended (7 U.S.C. ss. 181 et seq.) shall
not arise for the benefit of all unpaid cash sellers on such livestock or on the
inventory derived therefrom.
45
ARTICLE 10
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any Commitment hereunder, the
Borrower will perform and observe the following negative covenants:
Section 10.1 Debt. The Borrower will not, and will not permit any
Subsidiary to, incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Banks pursuant to the Loan Documents;
(b) Debt described on Schedule 10.1 hereto, and any extensions,
renewals, or refinancings thereof so long as (i) the principal amount of
such Debt and the interest rate charged thereon after such renewal,
extension, or refinancing shall not exceed the principal amount of such
Debt which was outstanding and the interest rate which was in effect
immediately prior to such renewal, extension, or refinancing and (ii) such
Debt shall not be secured by any assets other than assets securing such
Debt, if any, prior to such renewal, extension, or refinancing;
(c) Intercompany Debt owed by one or more of the Subsidiaries to the
Borrower or to a Subsidiary or owed by Borrower to a Subsidiary; provided
that (i) the obligations of each obligor of such Debt shall be subordinated
in right of payment to the obligations under the Loan Documents from and
after such time as any portion of such obligations shall become due and
payable (whether at stated maturity, by acceleration or otherwise) and
shall have such other terms and provisions as the Agent may reasonably
require; (ii) the aggregate amount of such Debt outstanding at any time
which is owed by the Insignificant Subsidiaries shall not at any time
exceed Two Hundred Thousand Dollars ($200,000); and (iii) the aggregate
amount of such Debt outstanding at any time which is owed by any Subsidiary
organized in a jurisdiction outside of the United States of America to the
Borrower shall not at any time exceed One Million Dollars ($1,000,000);
provided that Borrower may loan to Darling International, Ltd. an aggregate
additional amount of up to One Million Dollars ($1,000,000) if necessary to
allow Darling International, Ltd. to pay any of its taxes or other
liability arising from the current tax audit of Darling International, Ltd.
conducted by Governmental Authorities in Canada;
(d) Debt (including Capital Lease Obligations and in addition to the
Debt described on Schedule 10.1) not to exceed Two Million Dollars
($2,000,000) in the aggregate at any time outstanding secured by purchase
money Liens permitted by Section 10.2;
(e) Guarantees incurred in the ordinary course of business with
respect to surety and appeal bonds, performance and return-of-money bonds,
and other similar obligations not exceeding at any time outstanding One
Million Dollars ($1,000,000) in aggregate liability;
(f) Debt arising in connection with non-compete, consulting, or other
similar agreements entered into after the Closing Date but only if the
aggregate annual payments to be made under such agreements entered into
after the Closing Date do not exceed Five Hundred Thousand Dollars
($500,000) annually and only if such agreements are approved by the
Required Banks, which approval may be given or withheld in each Bank's sole
discretion;
46
(g) Guarantees, incurred in the ordinary course of business, of Debt
of Persons who supply the Borrower or a Subsidiary with raw materials
utilized in the Borrower's or a Subsidiary's business (a "Raw Material
Supplier"); provided that (i) the Debt of the Raw Material Supplier is
incurred to enable such Person to provide raw materials to the Borrower or
a Subsidiary and (ii) the aggregate amount of the Debt of Raw Material
Suppliers at any time outstanding which is Guaranteed by the Borrower and
the Subsidiaries shall not exceed the sum of (A) Two Million Dollars
($2,000,000) minus (B) the aggregate amount of the advances made to Raw
Material Suppliers as prepayments on raw material purchases by the Borrower
and the Subsidiaries pursuant to the permissions of subsection 10.5(g);
(h) obligations arising under indemnity agreements to title insurers
to cause such title insurers to issue to the Agent the lender's title
insurance policies required hereby; and
(i) Debt in addition to that specifically described in clauses (a)
through (h) of this Section 10.1 which in the aggregate does not exceed One
Million Dollars ($1,000,000) at any time outstanding.
Section 10.2 Limitation on Liens and Restrictions on Subsidiaries. The
Borrower will not, and will not permit any Subsidiary to, incur, create, assume,
or permit to exist any Lien upon any of its property, assets, or revenues,
whether now owned or hereafter acquired, except the following:
(a) Liens disclosed on Schedule 10.2 hereto;
(b) Liens in favor of the Agent, for the benefit of the Secured
Parties, pursuant to the Loan Documents;
(c) Encumbrances consisting of minor easements, zoning restrictions,
or other restrictions on the use of real property that do not (individually
or in the aggregate) materially affect the value of the assets encumbered
thereby or materially impair the ability of the Borrower or the
Subsidiaries to use such assets in their respective businesses, and none of
which is violated in any material respect by existing or proposed
structures or land use;
(d) Liens (other than Liens relating to Environmental Liabilities or
ERISA) for taxes, assessments, or other governmental charges that are not
delinquent or, if the execution thereof is stayed, which are being
contested in good faith by appropriate proceedings diligently pursued and
for which adequate reserves have been established;
(e) Liens of mechanics, materialmen, warehousemen, carriers, landlords
or other similar statutory Liens securing obligations that are not yet due
and are incurred in the ordinary course of business or, if the execution
thereof is stayed, which are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves have been
established;
(f) Liens resulting from good faith deposits to secure payments of
workmen's compensation or other social security programs or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids or contracts (other than for payment of Debt);
(g) Liens for purchase money obligations; provided that: (i) the
purchase of the asset subject to any such Lien is permitted under Section
11.4; (ii) the Debt secured by any such Lien is permitted under Section
10.1; and (iii) any such Lien encumbers only the asset so purchased;
47
(h) Any attachment or judgment Lien not constituting an Event of
Default;
(i) Liens arising from filing UCC financing statements regarding
leases not prohibited by this Agreement; and
(j) Liens existing on the Closing Date and disclosed in the title
insurance policies delivered under subsection 9.10 (d).
Neither the Borrower nor any Subsidiary shall enter into or assume any agreement
(other than the Loan Documents) prohibiting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired;
provided that, in connection with the creation of purchase money Liens, the
Borrower or the Subsidiary may agree that it will not permit any other Liens to
encumber the asset subject to such purchase money Lien. Except as provided
herein and except for customary consensual encumbrances and restrictions
contained in a purchase and sale agreement and imposed on the Subsidiary (or its
assets) to be sold in a transaction permitted hereby or otherwise approved by
the number of Banks required hereby, the Borrower will not and will not permit
any Subsidiaries directly or indirectly to create or otherwise cause or suffer
to exist or become effective any consensual encumbrance or restriction of any
kind on the ability of any Subsidiary to: (1) pay dividends or make any other
distribution on any of such Subsidiary's capital stock owned by the Borrower or
any Subsidiary; (2) subject to subordination provisions, pay any Debt owed to
the Borrower or any other Subsidiary; (3) make loans or advances to the Borrower
or any other Subsidiary; or (4) transfer any of its property or assets to the
Borrower or any other Subsidiary.
Section 10.3 Mergers, Etc. The Borrower will not, and will not permit any
Subsidiary to, become a party to a merger or consolidation, or purchase or
otherwise acquire all or a substantial part of the business or assets of any
Person or of a division or branch of any Person or any shares or other equity
interest issued by any Person (whether or not certificated), or wind-up,
dissolve, or liquidate itself; provided that, if no Default exists or would
result therefrom and all applicable obligations under Section 9.10, the Borrower
Security Agreement and the Subsidiary Security Agreement are complied with: (i)
a Subsidiary may wind-up, dissolve, or liquidate if its assets are transferred
to the Borrower or a Significant Subsidiary, (ii) any Subsidiary may merge with
and into the Borrower if the Borrower is the surviving entity, (iii) any
Subsidiary may merge with and into any other Significant Subsidiary if the
Significant Subsidiary is the surviving entity, (iv) any Subsidiary organized
under the laws of a jurisdiction outside the United States of America may merge
with any other Subsidiary organized under the laws of a jurisdiction outside of
the United States of America, (v) any Significant Subsidiary or the Borrower may
acquire all or a substantial part of the business or assets of any Subsidiary;
and (vi) the Borrower may acquire the right to obtain from third parties the raw
materials utilized in the Borrower's business if the Required Banks approve of
each such acquisition, which approval may be given or withheld in each Bank's
sole discretion.
Section 10.4 Restricted Junior Payments. The Borrower will not and will not
permit any Subsidiary to directly or indirectly declare, order, pay, make, or
set apart any sum for (a) any dividend or other distribution, direct or
indirect, on account of any shares of any class of stock or other equity
interest of the Borrower or any Subsidiary now or hereafter outstanding, except
a dividend payable solely in shares of that class of stock or other equity
interest to the holders of that class, (b) any redemption, conversion, exchange,
retirement, sinking fund, or similar payment, purchase, or other acquisition for
value, direct or indirect, of any shares of any class of stock or other equity
interest of the Borrower or any Subsidiary now or hereafter outstanding, or (c)
any payment made to retire, or to obtain the surrender of, any outstanding
warrants, options, or other rights to acquire shares of any class of stock or
other equity interest of the
48
Borrower or any Subsidiary now or hereafter outstanding, except that any
Subsidiary may make, declare, and pay dividends and make other distributions
with respect to its common stock or other equity interests to the extent
necessary to permit the Borrower to pay the Obligations and to permit the
Borrower to pay expenses incurred in the ordinary course of business.
Section 10.5 Investments. The Borrower will not, and will not permit any
Subsidiary to, make or permit to remain outstanding any advance, loan, extension
of credit, or capital contribution to or investment in any Person, or purchase
or own any stock, bonds, notes, debentures, or other securities of any Person,
or be or become a joint venturer with or partner of any Person, except:
(a) the Borrower may own stock of the Subsidiaries existing on the
Closing Date and notes payable by Subsidiaries in accordance with the
restrictions set forth in Section 10.1;
(b) readily marketable direct obligations of the United States of
America or any agency thereof with maturities of one year or less from the
date of acquisition;
(c) fully insured certificates of deposit with maturities of one year
or less from the date of acquisition issued by any commercial bank
operating in the United States of America having capital and surplus in
excess of Fifty Million Dollars ($50,000,000);
(d) commercial paper of a domestic issuer if at the time of purchase
such paper is rated in one of the two highest rating categories of Standard
and Poor's Corporation or Moody's Investors Service, Inc.;
(e) loans and advances to employees for business expenses incurred in
the ordinary course of business not to exceed One Hundred Thousand Dollars
($100,000) in the aggregate at any time outstanding;
(f) existing investments described on Schedule 10.5 hereto and, with
respect to any investment listed on Schedule 10.5, the reinvestment of any
earnings on such investment or the proceeds payable at the maturity thereof
in the same, or same type of, investment;
(g) advances to Raw Material Suppliers as prepayments on raw material
purchases; provided that, (i) such raw materials are acquired and utilized
by the Borrower or a Subsidiary in the ordinary course of business and (ii)
the aggregate amount of such advances at any time outstanding shall never
exceed the remainder of (A) Two Million Dollars ($2,000,000) minus (B) the
aggregate principal amount of all Debt of Raw Material Suppliers which is
outstanding on the date of determination and which is Guaranteed by the
Borrower or any Subsidiary;
(h) loans evidencing the deferred payment of the purchase price of the
assets disposed of pursuant to subsection 10.8(d);
(i) extensions of trade credit in the ordinary course of business;
(j) any stock, bonds, notes, debentures, or other securities of any
Person received in connection with the bankruptcy or reorganization of
suppliers and customers and the settlement of their delinquent obligations;
and
(k) loans, advances, or investments in addition to those described in
clauses (a)
49
through (j) of this Section 10.5 if the aggregate principal amount of such
loans and advances outstanding plus the aggregate acquisition cost of the
outstanding investments never exceeds Five Hundred Thousand Dollars
($500,000).
Section 10.6 Limitation on Issuance of Capital Stock. The Borrower will not
permit any Subsidiary to, at any time issue, sell, assign, or otherwise dispose
of (a) any of its capital stock or other equity interests, (b) any securities
exchangeable for or convertible into or carrying any rights to acquire any of
its capital stock or other equity interests, or (c) any option, warrant, or
other right to acquire any of its capital stock or other equity interests.
Section 10.7 Transactions With Affiliates. The Borrower will not, and will
not permit any Subsidiary to, enter into any transaction, including, without
limitation, the purchase, sale, or exchange of property or the rendering of any
service, with any Affiliate of the Borrower or such Subsidiary, except in the
ordinary course of and pursuant to the reasonable requirements of the Borrower's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arms-length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary; provided that the Borrower and the Subsidiaries
shall be permitted to enter into transactions with Borrower and the other
Subsidiaries permitted hereby.
Section 10.8 Disposition of Assets. The Borrower will not, and will not
permit any Subsidiary to, sell, lease, assign, transfer, or otherwise dispose of
any of its assets, except:
(a) dispositions of inventory in the ordinary course of business;
(b) dispositions of unnecessary, obsolete or worn out equipment;
(c) sales, leases, or other dispositions of vehicles so long as the
Borrower uses the net proceeds of such sales to acquire replacement
vehicles;
(d) sales, leases, or other dispositions of assets by any Subsidiary
to a Significant Subsidiary or to the Borrower;
(e) the sale of the assets disclosed on Schedule 10.8 at any time that
no Event of Default exists in one or more arm's length transactions;
provided that, each asset is sold for fair value, no Default would result
therefrom, and the Net Cash Proceeds of such sale are delivered to the
Agent for repayment of the Loans as required by subsection 5.4(b)(i);
(f) the sale by the Borrower of the stock of International Processing
Corporation and International Transportation Service, Inc.; provided that
with respect to such sale: (i) the sale price therefor shall be paid all in
cash on the closing date thereof (subject to customary and reasonable
escrows); (ii) neither the Borrower nor any Subsidiary will have any
continuing liability in connection with such sale or with respect to the
indebtedness, liabilities, and obligations of International Processing
Corporation or International Transportation Service, Inc., or their
subsidiaries other than customary indemnifications and escrows in
reasonable amounts relating to customary representations and warranties
given by sellers in stock sale transactions; (iii) the Net Cash Proceeds
shall be delivered to the Agent for repayment of the Loans as required by
subsection 5.4(b)(i); and (iv) the Required Banks shall have given their
prior approval of the sale price, which approval shall not be unreasonably
withheld;
50
(g) the sale of real property located in (i) Milwaukee, Wisconsin,
(ii) Kearney, New Jersey, (iii) Chula Vista, California; and (iv) Las
Vegas, Nevada; provided that with respect to any such sale (i) the Net Cash
Proceeds of such sale shall be delivered to the Agent for repayment of the
Loans as required in subsection 5.4(b)(i); and (ii) the Agent shall have
given its prior approval of the sale price for each such asset sold, which
approval shall not be unreasonably withheld and which approval is hereby
granted with respect to the sales price for the Kearney, New Jersey real
property; and
(h) the sale of assets, in addition to the sales or other dispositions
listed in clauses (a) through (g) of this Section 10.8; provided that with
respect to any such sale (i) the Net Cash Proceeds of such sale shall be
delivered to the Agent for repayment of the Loans as required in subsection
5.4(b)(i) unless the Required Banks otherwise agree; (ii) the Required
Banks shall have given their prior approval of the sale which approval
shall not be unreasonably withheld; and (iii) the aggregate amount of the
sale prices for all assets previously sold under the permissions of this
clause (h), together with the sale price for the assets to be disposed of
pursuant to the sale in question, shall not exceed Eight Million Dollars
($8,000,000.00).
Upon the sale of any property by the Borrower or a Subsidiary under the
permissions of this Section 10.8 and delivery of the proceeds therefrom in
accordance with the terms of this Agreement, the Agent shall, without the
requirement of any consent or approval of any Bank or any other Secured Party,
execute and deliver to the buyer thereof such documentation as may be necessary
to evidence the termination of the Liens of the Agent for the benefit of the
Secured Parties therein and, if the stock of a Subsidiary is sold, the release
of such Subsidiary from the obligations arising under the Loan Documents to
which it is a party. If the Borrower, in good faith, seeks the approval from the
Banks under clause (iv) of subsection 10.8(f) to a proposed cash sale price for
International Processing Corporation and International Transportation Service,
Inc., the approval from the Required Banks is not obtained and the sale is not
consummated at another cash price, then the installment due under Section 3.2 on
June 30, 2000 shall be reduced by the amount of such proposed sale price, with
the amount of the reduction being due at the December 31, 2000 maturity.
Section 10.9 Sale and Leaseback. The Borrower will not, and will not permit
any Subsidiary to, enter into any arrangement with any Person pursuant to which
it leases from such Person real or personal property that has been or is to be
sold or transferred, directly or indirectly, by it to such Person.
Section 10.10 Lines of BusinessSection 10.10 Lines of Business. The
Borrower will not, and will not permit any Subsidiary to, engage in any line or
lines of business activity other than the businesses in which they are engaged
on the date hereof and any businesses which utilize processes similar to those
utilized by the Borrower.
ARTICLE 11
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any Commitment hereunder, the
Borrower will perform and observe the following financial covenants:
Section 11.1 Consolidated Net Worth. The Borrower will maintain at all
times Consolidated Net Worth in an amount not less than the following: (a)
Thirty Million Dollars ($30,000,000) at all times
51
during the Borrower's 1999Fiscal Year and (b) Twenty Million Dollars
($20,000,000) at all times thereafter. "Consolidated Net Worth" means, at any
particular time, all amounts which would be included as stockholders' equity on
a consolidated balance sheet of the Borrower and the Subsidiaries, excluding
from the calculation thereof any effect the following may have thereon: (i)
gains and/or losses from the sale of assets, discontinued operations and assets
held for sale, (ii) restructuring and severance costs of up to Two Million Five
Hundred Thousand Dollars ($2,500,000) in the aggregate to the extent incurred
and verified by the Borrower's auditors, KPMG Peat Marwick LLP (or any successor
thereto), (iii) adjustments resulting from audits of the Borrower by the
Internal Revenue Service of up to One Million Dollars ($1,000,000) in the
aggregate related to the 1994 and 1995 Fiscal Years, and (iv) the stockholder's
equity of International Processing Corporation and International Transportation
Service, Inc.
Section 11.2 Adjusted EBITDA. As of the end of each Fiscal Quarter, the
Borrower shall not permit its Adjusted EBITDA to be less than the Dollar amount
set forth in the table below opposite the applicable Fiscal Quarter end,
calculated: (a) for the fourth Fiscal Quarter of 1998, for the Fiscal Quarter
then ended; (b) for all Fiscal Quarters thereafter up to and including the
Fourth Fiscal Quarter of 1999, for the period from and including the first day
of Fiscal Year 1999; and (c) for all other Fiscal Quarters, for the four (4)
Fiscal Quarter period then ended:
================================================================================
Fiscal Quarter Adjusted EBITDA
4th Fiscal Quarter 1998 $1,700,000
- --------------------------------------------------------------------------------
1st Fiscal Quarter 1999 $1,700,000
- --------------------------------------------------------------------------------
2nd Fiscal Quarter 1999 $5,100,000
3rd Fiscal Quarter 1999 $8,600,000
4th Fiscal Quarter 1999 $13,500,000
1st Fiscal Quarter 2000 $14,400,000
2nd Fiscal Quarter 2000 $16,700,000
3rd Fiscal Quarter 2000 $19,000,000
4th Fiscal Quarter 2000 $21,100,000
1st Fiscal Quarter 2001 $22,900,000
2nd Fiscal Quarter 2001 $25,300,000
================================================================================
The phrase "Adjusted EBITDA" means, for any period, calculated without
duplication for such period, the Borrower's EBITDA, excluding from the
calculation thereof, to the extent not already excluded in the calculation of
EBITDA or Net Income of Borrower: (i) gains and/or losses from any disposition
of assets; (ii) gains or losses resulting from the classification of the
operations of International Processing Corporation and International
Transportation Service, Inc. as discontinued operations or assets held for sale;
(iii) restructuring and severance costs of up to Two Million Five Hundred
Thousand Dollars ($2,500,000) in the aggregate to the extent incurred and as
verified by the Borrower's auditors, KPMG Peat Marwick LLP (or any successor
thereto); and (iv) the EBITDA of International Processing Corporation and
International Transportation Service, Inc.
52
Section 11.3 Interest Coverage. As of the end of each Fiscal Quarter, the
Borrower shall not permit the ratio of its Adjusted EBITDA to its consolidated
interest expense (but excluding, to the extent included, the interest expense of
International Processing Corporation and International Transportation Service,
Inc.) to be less than the ratio set forth in the table below opposite the
applicable Fiscal Quarter end, calculated: (a) for all Fiscal Quarters prior to
the fourth Fiscal Quarter of the 1999 Fiscal Year, from and including the first
day of the 1999 Fiscal Year; and (b) for all other Fiscal Quarters, for the four
(4) Fiscal Quarter period then ended:
===============================================================================
Fiscal Quarter Ratio
===============================================================================
1st Fiscal Quarter 1999 0.50 to 1.00
- -------------------------------------------------------------------------------
2nd Fiscal Quarter 1999 0.75 to 1.00
3rd Fiscal Quarter 1999 0.84 to 1.00
4th Fiscal Quarter 1999 1.00 to 1.00
1st Fiscal Quarter 2000 1.10 to 1.00
2nd Fiscal Quarter 2000 1.30 to 1.00
3rd Fiscal Quarter 2000 1.60 to 1.00
4th Fiscal Quarter 2000 2.00 to 1.00
1st Fiscal Quarter 2001 2.20 to 1.00
2nd Fiscal Quarter 2001 2.50 to 1.00
================================================================================
Section 11.4 Capital Expenditure Limits. The aggregate amount of all
Capital Expenditures of the Borrower and the Subsidiaries (subject to the
exclusions set forth below) during the periods set forth below shall not exceed
the Dollar amount set out opposite the applicable period (the "General CAPEX
Basket"):
===============================================================================
Period Dollar Amount
Fiscal Year 1999 $9,500,000
Fiscal Year 2000 $13,000,000
1st Fiscal Quarter of 2001 $4,000,000
2nd Fiscal Quarter of 2001 $4,000,000
===============================================================================
The aggregate amount of all Capital Expenditures of the Borrower and the
Subsidiaries (subject to the exclusions set forth below) (A) during the first
Fiscal Quarter of the 1999 Fiscal Year shall not exceed Three Million Dollars
($3,000,000) and (B) during the first and second Fiscal Quarters of the 1999
Fiscal Year shall not exceed Seven Million Dollars ($7,000,000) (the "Quarterly
CAPEX Baskets").
53
The General CAPEX Basket for the Fiscal Year 2000 shall be increased by an
amount equal to twenty-five percent (25%) of the Excess Cash Flow generated
during Fiscal Year 1999.
The following Capital Expenditures shall not be counted against either the
General CAPEX Basket or the Quarterly CAPEX Basket, or with respect to clause
(iii) below, any other calculation of Capital Expenditures under this Section
11.4: (i) Capital Expenditures made by International Processing Corporation and
International Transportation Service, Inc.; (ii) Capital Expenditures made for
purposes of procuring and constructing a replacement grease recycling facility
in or near the Las Vegas, Nevada area; and (iii) Capital Expenditures made with
any casualty or condemnation proceeds turned over to the Borrower by the Agent
to (A) replace or repair the property damaged or condemned, (B) construct a new
facility to replace the property damaged or condemned or (C) expand the
productive capacity of an existing facility.
The Capital Expenditures made by the Borrower after the Closing Date for
the purpose of procuring and constructing a grease recycling facility in or near
Las Vegas, Nevada, shall not exceed Two Million Five Hundred Thousand Dollars
($2,500,000) in the aggregate and, during the periods set forth below shall not
exceed the Dollar amount set forth opposite the applicable period:
===============================================================================
Period Dollar Amount
===============================================================================
1st Fiscal Quarter of 1999 $750,000
- -------------------------------------------------------------------------------
1st and 2nd Fiscal Quarters of 1999 $1,500,000
===============================================================================
The aggregate amount of all Capital Expenditures made by International
Processing Corporation and International Transportation Service, Inc. during the
first Fiscal Quarter of 1999 shall not exceed Six Hundred Thousand Dollars
($600,000). As of each Fiscal Quarter end thereafter, the Capital Expenditures
of International Processing Corporation and International Transportation
Service, Inc. made during the period from the first day of the then current
Fiscal Year to such Fiscal Quarter end shall not exceed the combined EBITDA of
International Processing Corporation and International Transportation Service,
Inc. for the same period.
ARTICLE 12
Default
Section 12.1 Events of Default. Each of the following shall be deemed an
"Event of Default":
(a) The Borrower shall fail to pay (i) when due any principal payable
under any Loan Document or any part thereof; (ii) within three (3) Business
Days of the date due any interest or fees payable under the Loan Documents
or any part thereof; and (iii) within five (5) Business Days of the date
due any other Obligation or any part thereof.
(b) Any representation, warranty, or certification made or deemed made
by the Borrower or any Obligated Party (or any of their respective
officers) in any Loan Document or in any certificate, report, notice, or
financial statement furnished at any time in connection with any Loan
Document shall be false, misleading, or erroneous in any material respect
when made or deemed to have been made.
(c) The Borrower or any Significant Subsidiary shall fail to perform,
observe, or
54
comply with any covenant, agreement, or term contained in clauses (a), (b),
(c), (d), (h), or (j) of Section 9.1 or contained in Article 10 or Article
11 of this Agreement. The Borrower shall fail to perform, observe or comply
with any covenant, agreement, or term contained in Sections 4.2 through
4.11 of the Borrower Security Agreement. Any Significant Subsidiary shall
fail to perform, observe, or comply with any covenant, agreement, or term
contained in Sections 4.2 through 4.11 of the Subsidiary Security
Agreement.
(d) The Borrower or any Obligated Party shall fail to perform,
observe, or comply with any other covenant, agreement, or term contained in
any Loan Document (other than covenants to pay the Obligations and the
covenants described in subsection 12.1(c)) and such failure shall continue
for a period of fifteen (15) Business Days after the earlier of (i) the
date the Agent or any Bank provides the Borrower with notice thereof or
(ii) the date the Borrower should have notified the Agent thereof in
accordance with subsection 9.1(h).
(e) The Borrower, any Subsidiary, or any Obligated Party shall (i)
apply for or consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee, examiner, liquidator, or the like of itself
or of all or a substantial part of its property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary
case under the United States Bankruptcy Code (as now or hereafter in
effect, the "Bankruptcy Code"), (iv) institute any proceeding or file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, liquidation, dissolution, winding-up, or
composition or readjustment of debts, (v) fail to controvert in a timely
and appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code, (vi) admit in
writing its inability to, or be generally unable to pay its debts as such
debts become due, or (vii) take any corporate action for the purpose of
effecting any of the foregoing.
(f) A proceeding or case shall be commenced, without the application,
approval or consent of the Borrower, any Subsidiary, or any Obligated
Party, in any court of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or winding-up, or the
composition or readjustment of its debts, (ii) the appointment of a
receiver, custodian, trustee, examiner, liquidator, or the like of the
Borrower or such Subsidiary or Obligated Party or of all or any substantial
part of its property, or (iii) similar relief in respect of the Borrower or
such Subsidiary or Obligated Party under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or adjustment of
debts, and such proceeding or case shall continue undismissed, or an order,
judgment, or decree approving or ordering any of the foregoing shall be
entered and continue unstayed and in effect, for a period of sixty (60) or
more days; or an order for relief against the Borrower, any Subsidiary, or
any Obligated Party shall be entered in an involuntary case under the
Bankruptcy Code.
(g) The Borrower, any Subsidiary, or any Obligated Party shall fail to
discharge within a period of thirty (30) days after the commencement
thereof any attachment, sequestration, forfeiture, or similar proceeding or
proceedings involving an aggregate amount in excess of One Million Dollars
($1,000,000) against any of its assets or properties.
(h) A final judgment or judgments for the payment of money in excess
of One Million Dollars ($1,000,000) in the aggregate which are not
adequately covered by insurance or by a third party acceptable to the Agent
who has acknowledged responsibility for such judgment or judgments, shall
be rendered by a court or courts against the Borrower, any Subsidiary, or
any Obligated Party and the same shall not be discharged (or provision
shall not be made for such
55
discharge), or a stay of execution thereof shall not be procured, within
thirty (30) days from the date of entry thereof and the Borrower or the
relevant Subsidiary or Obligated Party shall not, within said period of
thirty (30) days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to
be stayed during such appeal.
(i) The Borrower, any Subsidiary, or any Obligated Party shall fail to
pay when due any principal of or interest on any Debt if the aggregate
principal amount of the affected Debt equals or exceeds One Million Dollars
($1,000,000) (other than the Obligations), or the maturity of any such Debt
shall have been accelerated, or any such Debt shall have been required to
be prepaid prior to the stated maturity thereof or any event shall have
occurred with respect to any Debt in the aggregate principal amount equal
to or in excess of Two Million Five Hundred Thousand Dollars ($2,500,000)
that permits (or, with the giving of notice or lapse of time or both, would
permit) any holder or holders of such Debt or any Person acting on behalf
of such holder or holders to accelerate the maturity thereof or require any
such prepayment.
(j) This Agreement, the Borrower Security Agreement, the Guaranty, the
Subsidiary Security Agreement, any Mortgage, or any Note shall cease to be
in full force and effect (other than, with respect to the Guaranty, as a
result of a permitted dissolution pursuant to Section 10.3 or a permitted
asset disposition pursuant to Section 10.8) or shall be declared null and
void or the validity or enforceability thereof shall be contested or
challenged by the Borrower, any Subsidiary, any Obligated Party or the
Borrower or any Obligated Party shall deny that it has any further
liability or obligation under any of the Loan Documents.
(k) Any lien or security interest created or required to be created by
the Loan Documents shall not for any reason (other than the negligence of
the Agent, the failure of the Borrower or a Subsidiary to comply with
Sections 4.2 through 4.11 of the Borrower Security Agreement or the
Subsidiary Security Agreement [such failure being an Event of Default under
subsection 12.1 (c)] or the release thereof in accordance with the Loan
Documents) be a valid and perfected security interest in and lien upon any
of the Collateral purported to be covered thereby with the priority
required by this Agreement within ten (10) days after notice thereof has
been provided to the Borrower by the Agent or any Bank.
(l) Any of the following events shall occur or exist with respect to
the Borrower or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; (ii) any Reportable Event with respect to any Plan;
(iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; (iv) any event or
circumstance that might constitute grounds entitling the PBGC to institute
proceedings under Section 4042 of ERISA for the termination of, or for the
appointment of a trustee to administer, any Plan, or the institution by the
PBGC of any such proceedings; or (v) complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan; and
in each case above, such event or condition, together with all other events
or conditions, if any, have subjected or could in the reasonable opinion of
Required Banks subject the Borrower to any tax, penalty, or other liability
to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any combination
thereof) which in the aggregate exceed or could reasonably be expected to
exceed One Million Dollars ($1,000,000).
(m) Any Person or group of related Persons for purposes of Section
13(d) of the Exchange Act other than Morgens Waterfall Vintiadis & Co.,
Inc. and its Affiliates, acquires
56
"beneficial ownership" (within the meaning of Section 13(d) under the
Exchange Act) in excess of fifty percent (50%) of the total voting power of
all classes of capital stock then outstanding of the Borrower entitled
(without regard to the occurrence of any contingency) to vote in elections
of directors of the Borrower.
Section 12.2 RemediesSection 12.2 Remedies. If any Event of Default shall
occur and be continuing, the Agent may (and if directed by the Required Banks,
shall) do any one or more of the following:
(a) Acceleration. By notice to the Borrower, declare all outstanding
principal of and accrued and unpaid interest on the Notes and all other
amounts payable by the Borrower under the Loan Documents immediately due
and payable, and the same shall thereupon become immediately due and
payable, without further notice, demand, presentment, notice of dishonor,
notice of acceleration, notice of intent to accelerate, protest, or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower;
(b) Termination of Commitments. Terminate the Commitments, including,
without limitation, the obligation of the Agent to issue Letters of Credit,
without notice to the Borrower;
(c) Judgment. Reduce any claim to judgment;
(d) Foreclosure. Foreclose or otherwise enforce any Lien granted to
the Agent, for the benefit of the Secured Parties, to secure payment and
performance of the Obligations in accordance with the terms of the Loan
Documents;
(e) Rights. Exercise any and all rights and remedies afforded by the
laws of the State of Texas or any other jurisdiction, by any of the Loan
Documents, by equity, or otherwise;
provided, however, that upon the occurrence of an Event of Default under Section
12.1(e) or Section 12.1(f), the Commitments of all of the Banks shall
automatically terminate (including, without limitation, the obligation of the
Agent to issue Letters of Credit), and the outstanding principal of and accrued
and unpaid interest on the Notes and all other amounts payable by the Borrower
under the Loan Documents shall thereupon become immediately due and payable
without notice, demand, presentment, notice of dishonor, notice of acceleration,
notice of intent to accelerate, protest, or other formalities of any kind, all
of which are hereby expressly waived by the Borrower.
Section 12.3 Cash Collateral. If an Event of Default shall have occurred
and be continuing the Borrower shall, if requested by the Agent or the Required
Banks, pledge to the Agent as security for the Obligations an amount in
immediately available funds equal to the then established Contingent Primary
Obligations, such funds to be held in an interest bearing cash collateral
account at the Agent without any right of withdrawal by the Borrower.
Section 12.4 Performance by the Agent; Advances to Cover Returned Checks
and Other Items. If the Borrower or any Obligated Party shall fail to perform
any covenant or agreement in accordance with the terms of the Loan Documents,
the Agent may, at the direction of the Required Banks, perform or attempt to
perform such covenant or agreement on behalf of the Borrower. In such event, the
Borrower shall, at the request of the Agent, promptly pay any amount expended by
the Agent or the Banks in connection with such performance or attempted
performance to the Agent at the Principal Office, together with interest thereon
at the Default Rate from and including the date of such expenditure to but
excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Agent nor any Bank shall have
any liability or responsibility for the performance of any obligation of the
Borrower or any Obligated Party under any Loan Document. Under certain of the
agreements the Agent has or may enter into under subsection 9.10(b)(iii)(B) with
any party maintaining a Lockbox Account or other deposit account, the Agent may
be obligated to pay certain amounts to the financial institution party thereto
from time to time, including, without limitation, fees owed to such financial
institutions arising from their lockbox and other deposit or cash management
services and amounts sufficient to reimburse such financial institutions for the
amount of any item deposited in or credited to the related account which is
returned unpaid. In the event the Agent is required to pay any such amounts, the
Agent shall notify the Borrower and the Borrower shall promptly pay to the Agent
any amount so expended by Agent, together with interest at the Default Rate from
and including the date of such expenditure to, but excluding the date that such
expenditure is paid in full and if Borrower fails to make such payment, Agent
shall have the option of automatically making a Swingline Loan in the amount so
expended.
Section 12.5 Set-off. If an Event of Default shall have occurred and be
continuing, each Bank is hereby authorized at any time and from time to time,
without notice to the Borrower (any such notice being hereby expressly waived by
the Borrower), to set-off and apply any and all deposits (general, time, demand,
provisional, or final) at any time held and other indebtedness at any time owing
by such Bank to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under any Loan
Document, irrespective of whether or not the Agent or such Bank shall have made
any demand under such Loan Documents and although such obligations may be
unmatured. Each Bank agrees promptly to notify the Borrower (with a copy to the
Agent) after any such set-off and application, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights and remedies of each Bank hereunder are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Bank may have.
Section 12.6 Continuing Event of Default. Any Default capable of being
remedied shall exist and therefor continue until Agent shall have been provided
evidence satisfactory to it that such Default has been remedied. Any Default not
capable of being remedied shall exist and therefor continue until waived by the
number of Banks required by Section 14.11.
ARTICLE 13
The Agent
---------
Section 13.1 Appointment, Powers and Immunities. Each Bank hereby appoints
and authorizes (and continues the authorization and appointment under the
Original Agreement of) BankBoston, N.A. to act as its agent hereunder and under
the other Loan Documents and to act as its Approved Bank Affiliates agent
hereunder and under the other Loan Documents (such Affiliate by acceptance of
the benefits of the Loan Documents hereby ratifying and continuing such
appointment) with such powers as are specifically delegated to the Agent by the
terms of the Loan Documents, together with such other powers as are reasonably
incidental thereto. Neither the Agent nor any of its Affiliates, officers,
directors, employees, attorneys, or agents shall be liable for any action taken
or omitted to be taken by any of them hereunder or otherwise in connection with
any Loan Document except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the preceding sentence, the Agent
(i) may treat each Secured Party as the party entitled to distributions
hereunder until it receives written notice of the assignment or transfer thereof
signed and in form satisfactory to the Agent, (ii) shall have no duties or
responsibilities except those expressly set forth in the Loan Documents, and
shall not by reason of any Loan Document be a trustee or fiduciary for any
Secured Party, (iii) shall not be required to initiate any
58
litigation or collection proceedings under any Loan Document except to the
extent requested by the Required Banks, (iv) shall not be responsible to any
Secured Party for any recitals, statements, representations, or warranties
contained in any Loan Document, or any certificate or other documentation
referred to or provided for in, or received by any of them under, any Loan
Document, or for the value, validity, effectiveness, enforceability, or
sufficiency of any Loan Document or any other documentation referred to or
provided for therein or for any failure by any Person to perform any of its
obligations thereunder, (v) may consult with legal counsel (including counsel
for the Borrower), independent public accountants, and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants, or
experts, and (vi) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate, or other instrument or
writing believed by it to be genuine and signed or sent by the proper party or
parties. As to any matters not expressly provided for by any Loan Document, the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by the Required Banks,
and such instructions of the Required Banks and any action taken or failure to
act pursuant thereto shall be binding on all of the Secured Parties; provided,
however, that the Agent shall not be required to take any action which exposes
it to personal liability or which is contrary to any Loan Document or applicable
law.
Section 13.2 Rights of the Agent as a Bank. With respect to its Commitment,
the Loans made by it and the Notes issued to it, BankBoston, N.A. (and any
successor acting as the Agent) in its capacity as a Bank hereunder shall have
the same rights and powers hereunder as any other Bank and may exercise the same
as though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may (without having to account therefor
to any Secured Party) accept deposits from, lend money to, act as trustee under
indentures of, provide merchant banking services to, and generally engage in any
kind of banking, trust, or other business with the Borrower, any of the
Subsidiaries, any Obligated Party, and any other Person who may do business with
or own securities of the Borrower, any Subsidiary, or any Obligated Party, all
as if it were not acting as the Agent and without any duty to account therefor
to the Secured Parties.
Section 13.3 Defaults. The Agent shall not be deemed to have knowledge or
notice of the occurrence of a Default (other than the non-payment of principal
of or interest on the Loans or of commitment fees) unless the Agent has received
notice from a Bank or the Borrower specifying such Default and stating that such
notice is a "Notice of Default." In the event that the Agent receives such a
notice of the occurrence of a Default, the Agent shall give prompt notice
thereof to the Banks (and shall give each Bank prompt notice of each such
non-payment). The Agent shall (subject to Section 13.1) take such action with
respect to such Default as shall be directed by the Required Banks, provided
that unless and until the Agent shall have received such directions, the Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Default as it shall deem advisable and in the
best interest of the Banks.
Section 13.4 Indemnification. THE BANKS HEREBY AGREE TO INDEMNIFY THE AGENT
FROM AND HOLD THE AGENT HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED UNDER
SECTIONS 14.1 AND 14.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE BORROWER
UNDER SECTIONS 14.1 AND 14.2), RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE
COMMITMENT PERCENTAGES, ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND
OR NATURE
59
WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT
IN ANY WAY RELATING TO OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION
TAKEN OR OMITTED TO BE TAKEN BY THE AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN
DOCUMENTS; PROVIDED, THAT NO BANK SHALL BE LIABLE FOR ANY PORTION OF THE
FOREGOING TO THE EXTENT CAUSED BY THE AGENT'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF
THE BANKS THAT THE AGENT SHALL BE INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS
AGAINST ALL OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES,
ACTIONS, JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING, WITHOUT
LIMITATION, REASONABLE ATTORNEYS' FEES), AND DISBURSEMENTS OF ANY KIND OR NATURE
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY
NEGLIGENCE OF THE AGENT. WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION,
EACH BANK AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA
SHARE (CALCULATED ON THE BASIS OF THE COMMITMENT PERCENTAGES) OF ANY AND ALL
OUT-OF-POCKET EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS'
FEES) INCURRED BY THE AGENT IN CONNECTION WITH THE PREPARATION, EXECUTION,
DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR ENFORCEMENT (WHETHER
THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF, OR LEGAL ADVICE IN
RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN DOCUMENTS, TO THE EXTENT
THAT THE AGENT IS NOT REIMBURSED FOR SUCH EXPENSES BY THE BORROWER.
Section 13.5 Independent Credit Decisions. Each Bank agrees that it has
independently and without reliance on the Agent or any other Bank, and based on
such documentation and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into any Loan Document and
that it will, independently and without reliance upon the Agent or any other
Bank, and based upon such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under any Loan Document. Except as otherwise specifically set
forth herein, the Agent shall not be required to keep itself informed as to the
performance or observance by the Borrower or any Obligated Party of any Loan
Document or to inspect the properties or books of the Borrower or any Obligated
Party. Except for notices, reports, and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder or under
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Bank with any credit or other financial information concerning the
affairs, financial condition, or business of the Borrower or any Obligated Party
(or any of their Affiliates) which may come into the possession of the Agent or
any of its Affiliates.
Section 13.6 Several Commitments. The Commitments and other obligations of
the Banks under any Loan Document are several. The default by any Bank in making
a Loan in accordance with its Commitment shall not relieve the other Banks of
their obligations under any Loan Document. In the event of any default by any
Bank in making any Loan, each nondefaulting bank shall be obligated to make its
Loan but shall not be obligated to advance the amount which the defaulting Bank
was required to advance hereunder. No Bank shall be responsible for any act or
omission of any other Bank.
Section 13.7 Successor Agent. Subject to the appointment and acceptance of
a successor Agent as provided below, the Agent may resign at any time by giving
notice thereof to the Banks and the Borrower and the Agent may be removed at any
time by the Required Banks if it has breached its
60
obligations under the Loan Documents. Upon any such resignation or removal, the
Required Banks will have the right to appoint a successor Agent with the
Borrower's consent, which shall not be unreasonably withheld. If no successor
Agent shall have been so appointed by the Required Banks and shall have accepted
such appointment within thirty (30) days after the retiring Agent's giving of
notice of resignation or the Required Banks' removal of the retiring Agent, then
the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United States of
America or any State thereof and having combined capital and surplus of at least
Five Hundred Million Dollars ($500,000,000). Upon the acceptance of its
appointment as successor Agent, such successor Agent shall thereupon succeed to
and become vested with all rights, powers, privileges, immunities, contractual
obligations, and duties of the resigning or removed Agent including, without
limitation, all obligations under any Letters of Credit and Swingline Loans, and
the resigning or removed Agent shall be discharged from its duties and
obligations under the Loan Documents, including, without limitation, its
obligations under all Letters of Credit and under the Swingline Commitment.
After any Agent's resignation or removal as the Agent, the provisions of this
Article 13 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was the Agent.
Section 13.8 Agent Fee. The Borrower agrees to pay to the Agent on June 5th
of each year the administrative agent fee described in that certain commitment
letter dated May 15, 1997, between the Borrower and BankBoston, N.A.
Section 13.9 Deposit Accounts held at Agent. The Concentration Account and
any other deposit account of Borrower or a Significant Subsidiary held at
BankBoston, N.A. (all such accounts, other than the Concentration Account,
herein the "BankBoston Accounts") are maintained by BankBoston, N.A., in its
capacity as Agent hereunder to perfect the security interest held for the
benefit of the Secured Parties therein. Withdrawals from the Concentration
Account shall only be made in accordance with subsection 5.4(b)(iv). When no
Event of Default exists, the Borrower or applicable Significant Subsidiary is
entitled to make withdrawals from and deposits into the BankBoston Accounts.
When an Event of Default exists, the Agent shall be the only party entitled to
make withdrawals from the BankBoston Accounts. If the Agent exercises any right
of setoff against any BankBoston Account, the amount so setoff shall be applied
as proceeds of Collateral in accordance with Section 5.6; provided that the
Agent shall be entitled to charge, or setoff against, the BankBoston Accounts
and retain for its own account, any customary fees, costs, charges and expenses
owed to it in connection with the opening, operating and maintaining the
BankBoston Accounts and for the amount of any item credited to a BankBoston
Account which is subsequently returned for any reason.
Section 13.10 Co-Agent. Comerica Bank, Credit Lyonnais New York Branch, and
Wells Fargo Bank (Texas), National Association have each been designated as a
co-agent hereunder for no reason other than in recognition of the level of their
respective Commitments. No such Bank is therefore an agent for the Banks nor
shall any such Bank have any obligations under the Loan Documents other than
those arising in its capacity as a Bank.
Section 13.11 Approved Bank Affiliates Rights. No Approved Bank Affiliate
shall have any right to give any direction to the Agent in the exercise of the
Agent's rights and obligations under the Loan Documents nor does an Approved
Bank Affiliate have any right to consent to, or vote on, any matter hereunder
except as specifically set forth in Section 14.11. As provided in Section 13.1,
the Agent shall have no duties or responsibilities to any Approved Bank
Affiliate except those expressly set forth in the Loan Documents.
61
ARTICLE 14
Miscellaneous
-------------
Section 14.1 Expenses. The Borrower hereby agrees to pay on demand: (a) all
costs and expenses of the Agent arising in connection with the preparation,
negotiation, execution, and delivery of the Loan Documents and any and all
amendments or other modifications to the Loan Documents, including, without
limitation, the reasonable fees and expenses of legal counsel for the Agent; (b)
all fees, costs, and expenses of the Agent arising in connection with any Letter
of Credit or any Swingline Loan, including the Agent's customary fees for
amendments, transfers, and drawings on Letters of Credit; (c) all costs and
expenses of the Agent and the Banks in connection with any Default and the
enforcement of any Loan Document, including, without limitation, the reasonable
fees and expenses of legal counsel for the Agent and each Bank; (d) all
transfer, stamp, documentary, or other similar taxes, assessments, or charges
levied by any Governmental Authority in respect of any Loan Document; (e) all
costs, expenses, assessments, and other charges incurred in connection with any
filing, registration, recording, or perfection of any security interest or Lien
contemplated by any Loan Document; (f) all costs, expenses, and other charges
incurred in obtaining any collateral audit or in obtaining any valuation or
appraisal of Borrower, any Subsidiary or any of the Collateral subject to the
limitations on the Borrower's obligation to pay the costs of appraisals set out
in subsection 9.10 (d) and provided that if no Default exists, Borrower shall
not have an obligation to pay for more than one (1) collateral audit each
calendar year; and (g) all other costs and expenses incurred by the Agent in
connection with any Loan Document. Notwithstanding the foregoing, the Borrower
shall not be obligated to pay the fees and expenses of Policano & Manzo, L.L.C.
incurred after the Closing Date in an amount in excess of Seventy-Five Thousand
Dollars ($75,000) during each calendar year; excluding in the calculation of
such cap, any fees and expenses incurred (i) prior to the Closing Date or (ii)
during the existence of an Event of Default. The Banks agree, absent conflicts
of interest, to employ one counsel to represent them in connection with the
matters described in clause (c); provided (i) Agent may retain separate counsel
to represent it in its capacity as Agent and (ii) the failure of the Banks to
employ one counsel, if such failure arose out of the need to avoid conflicts of
interest, shall not affect each Bank's right to receive reimbursement under this
Section 14.1.
Section 14.2 Indemnification. SUBJECT TO THE LIMITATION ON THE
REIMBURSEMENT OF EXPENSES SET FORTH IN SUBSECTION 9.10(d) AND SECTION 14.1, THE
BORROWER SHALL INDEMNIFY THE AGENT AND EACH BANK AND EACH AFFILIATE THEREOF AND
THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND
HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING,
WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) TO WHICH ANY OF THEM MAY BECOME
SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (A) THE
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, (B) ANY OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN
DOCUMENTS, (C) ANY BREACH BY THE BORROWER OR ANY OBLIGATED PARTY OF ANY
REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE
LOAN DOCUMENTS, (D) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL,
REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR
AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWER OR ANY SUBSIDIARY, (E)
THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT OR ANY PAYMENT OR FAILURE TO PAY
WITH RESPECT TO ANY LETTER OF CREDIT, (G) ANY AND ALL TAXES, LEVIES, DEDUCTIONS,
AND CHARGES IMPOSED ON THE AGENT OR ANY BANK IN RESPECT OF ANY LETTER OF CREDIT,
OR (G) ANY INVESTIGATION, LITIGATION,
62
OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED
INVESTIGATION, LITIGATION, OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING;
PROVIDED THAT THE PERSON ENTITLED TO BE INDEMNIFIED UNDER THIS SECTION SHALL NOT
BE INDEMNIFIED FROM OR HELD HARMLESS AGAINST ANY LOSSES, LIABILITIES, CLAIMS,
DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, OR EXPENSES ARISING OUT OF
OR RESULTING FROM ITS GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITING
ANY PROVISION OF ANY LOAN DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES
HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS SECTION SHALL BE
INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
Section 14.3 Limitation of Liability. None of the Agent, any Bank, or any
Affiliate, officer, director, employee, attorney, or agent thereof shall have
any liability with respect to, and the Borrower and, by the execution of the
Loan Documents to which it is a party each Obligated Party, hereby waives,
releases, and agrees not to sue any of them upon, any claim for any special,
indirect, incidental, consequential, or punitive damages suffered or incurred by
the Borrower or any Obligated Party in connection with, arising out of, or in
any way related to any of the Loan Documents, or any of the transactions
contemplated by any of the Loan Documents.
Section 14.4 No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by the Agent or any Bank shall
have the right to act exclusively in the interest of the Agent and the Banks and
shall have no duty of disclosure, duty of loyalty, duty of care, or other duty
or obligation of any type or nature whatsoever to the Borrower or any of the
Borrower's shareholders or any other Person.
Section 14.5 No Fiduciary Relationship. The relationship between the
Borrower and the Obligated Parties on the one hand and the Agent and each Bank
on the other is solely that of debtor and creditor, and neither the Agent nor
any Bank has any fiduciary or other special relationship with the Borrower or
any Obligated Parties, and no term or condition of any of the Loan Documents
shall be construed so as to deem the relationship between the Borrower and the
Obligated Parties on the one hand and the Agent and each Bank on the other hand
to be other than that of debtor and creditor.
Section 14.6 Equitable Relief. The Borrower recognizes that in the event
the Borrower or any Obligated Party fails to pay, perform, observe, or discharge
any or all of the obligations under the Loan Documents, any remedy at law may
prove to be inadequate relief to the Agent and the Banks. The Borrower therefore
agrees that the Agent and the Banks, if the Agent or the Required Banks so
request, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
Section 14.7 No Waiver; Cumulative Remedies. No failure on the part of the
Agent or any Bank to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in the Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
63
Section 14.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto, the Approved Bank Affiliates and their respective
successors and assigns. The Borrower may not assign or transfer any of its
rights or obligations hereunder without the prior written consent of the
Agent and all of the Banks. Any Bank may sell participations to one or more
banks or other institutions in or to all or a portion of its rights and
obligations under the Loan Documents (including, without limitation, all or
a portion of its Commitment, the Loans owing to it and the Letter of Credit
Liabilities and Swingline Loans which it has made or in which it has a
participating interest); provided, however, that (i) such Bank's
obligations under the Loan Documents (including, without limitation, its
Commitments) shall remain unchanged, (ii) such Bank shall remain solely
responsible to the Borrower for the performance of such obligations, (iii)
such Bank shall remain the holder of its Notes and owner of its
participation or other interests in Letter of Credit Liabilities and
Swingline Loans for all purposes of any Loan Document, (iv) the Borrower
shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations under the Loan Documents, and (v)
such Bank shall not sell a participation that conveys to the participant
the right to vote or give or withhold consents under any Loan Document,
other than the right to vote upon or consent to (1) any increase of such
Bank's Commitments, (2) any reduction of the principal amount of, or
interest to be paid on, the Loans or other Obligations of such Bank, (3)
any reduction of any commitment fee, letter of credit fee, or other amount
payable to such Bank under any Loan Document, (4) any postponement of any
date for the payment of any amount payable in respect of the Loans or other
Obligations of such Bank, or (5) the release of any Collateral or the
release of the Borrower or any Obligated Party from liability arising under
the Loan Documents (except as may otherwise result from a dissolution
permitted under Section 10.3).
(b) The Borrower and each of the Banks agree that any Bank (the
"Assigning Bank") may at any time assign to an Eligible Assignee all, or a
proportionate part of all, of its rights and obligations under the Loan
Documents (including, without limitation, its Commitments and Loans and
participation interests) (each an "Assignee"); provided, however, that:
(i) each such assignment shall be of a consistent, and not a
varying, percentage of all of the Assigning Bank's rights and
obligations under the Loan Documents;
(ii) except in the case of an assignment of all of a Bank's
rights and obligations under the Loan Documents, the amount of the
Commitments of the Assigning Bank being assigned or if any Commitment
has terminated, the outstanding principal amount of the related Loans,
pursuant to each assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall in no
event be less than Five Million Dollars ($5,000,000);
(iii) the parties to each such assignment shall execute and
deliver to the Agent for its acceptance and recording in the Register
(as defined below), an Assignment and Acceptance, together with the
Notes subject to such assignment, and shall deliver to the Agent a
processing and recordation fee of Three Thousand Dollars ($3,000)
payable by the Assigning Bank or the Assignee (and not the Borrower);
(iv) the Agent must consent to such assignment, which consent
shall not be
64
unreasonably withheld and shall be evidenced by the Agent's execution
of the Assignment and Acceptance; provided however, the Agent's
consent shall not be required if the Assignee is an Affiliate of the
Assigning Bank; and
(v) if no Default exists and such assignment will result in the
Assignee, along with its Affiliates, holding more than twenty-five
percent (25.0%) of the sum of (A) the unfunded Commitments, plus (B)
the outstanding Term Loans, plus (C) the Outstanding Revolving Credit,
then the Borrower must consent to such assignment, which consent shall
not be unreasonably withheld and shall be evidenced by the Borrower's
execution of the Assignment and Acceptance; provided however, the
Borrower's consent shall not be required if the Assignee is an
Affiliate of the Assigning Bank.
Upon such execution, delivery, acceptance, and recording, from and
after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five (5) Business Days after
the execution thereof, or, if so specified in such Assignment and
Acceptance, the date of acceptance thereof by the Agent, (x) the
assignee thereunder shall be a party hereto as a "Bank" and, to the
extent that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and under the Loan Documents and (y)
the Bank that is an assignor thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to
such Assignment and Acceptance, relinquish its rights (other than its
indemnity and expense reimbursement rights for the period prior to the
effective date of the assignment) and be released from its obligations
under the Loan Documents (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of a Bank's rights
and obligations under the Loan Documents, such Bank shall cease to be
a party thereto). The term "Eligible Assignee" means any Person;
provided that, any such Person (i) must, if no Event of Default
exists, represent that it is not, and is not acting on behalf of, any
Person identified on Schedule 14.8; (ii) must represent that it is not
subject to any legal or contractual restrictions on its ability to
fund the obligations of a Bank under the Loan Documents; and (iii)
must represent that it is capable of making revolving extensions of
credit of the type contemplated hereby in accordance with the terms
hereof. No Assigning Bank making an assignment to an Assignee in good
faith shall have any liability to the Borrower, Agent, any other Bank
or any Obligated Party for the failure of any of the representations
made by such Assignee to be true.
(c) The Agent shall maintain at its Principal Office a copy of
each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Banks
and the Commitments of, and principal amount of the Loans owing to and
Letter of Credit Liabilities and Swingline Loans participated in by,
each Bank from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower, the Agent, and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder
for all purposes under the Loan Documents. The Register shall be
available for inspection by the Borrower or any Bank at any reasonable
time and from time to time upon reasonable prior notice.
(d) Upon its receipt of an Assignment and Acceptance executed by
an Assigning Bank and Assignee representing that it is an Eligible
Assignee, together with any Notes subject to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and
is in substantially the form of Exhibit "F", (i) accept such
Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt written notice thereof
to the
65
Borrower. Within five (5) Business Days after its receipt of such
notice the Borrower, at its expense, shall execute and deliver to the
Agent in exchange for the surrendered Notes new Notes to the order of
such Eligible Assignee in an amount equal to the Commitments or Loans
assumed by it pursuant to such Assignment and Acceptance and, if the
Assigning Bank has retained Commitments or Loans, Notes to the order
of the Assigning Bank in an amount equal to the Commitments and Loans
retained by it hereunder (each such promissory note shall constitute a
"Note" for purposes of the Loan Documents). Such new Notes shall be in
an aggregate principal amount of the surrendered Notes, shall be dated
the effective date of such Assignment and Acceptance, and shall
otherwise be in substantially the form of the applicable Exhibit
hereto.
(e) Any Bank may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section, disclose to the Assignee or participant or proposed Assignee
or participant, any information relating to the Borrower or the
Subsidiaries furnished to such Bank by or on behalf of the Borrower or
the Subsidiaries.
Section 14.9 Survival. All representations and warranties made in any Loan
Document or in any document, statement, or certificate furnished in connection
with any Loan Document shall survive the execution and delivery of the Loan
Documents and no investigation by the Agent or any Bank or any closing shall
affect the representations and warranties or the right of the Agent or any Bank
to rely upon them. Without prejudice to the survival of any other obligation of
the Borrower hereunder, the obligations of the Borrower under Article 6, Section
14.1, and Section 14.2 shall survive repayment of the Notes and termination of
the Commitments and the Letters of Credit.
Section 14.10 Entire Agreement; Amended and Restatement; Release. THIS
AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE
FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR
COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR
ORAL, RELATING TO THE SUBJECT MATTER HEREOF (INCLUDING, WITHOUT LIMITATION, THAT
CERTAIN COMMITMENT LETTER DATED MAY 15, 1997 AMONG THE BORROWER, BANKBOSTON,
N.A., AND BANKBOSTON SECURITIES, INC. AND THE ORIGINAL AGREEMENT) AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES THERETO. This Agreement amends and restates in its
entirety the Original Agreement. The execution of this Agreement, the Notes and
the other Loan Documents executed in connection herewith does not extinguish the
indebtedness outstanding in connection with the Original Agreement nor does it
constitute a novation with respect to such indebtedness. THE BORROWER REPRESENTS
AND WARRANTS THAT AS OF THE CLOSING DATE THERE ARE NO CLAIMS OR OFFSETS AGAINST
OR DEFENSES OR COUNTERCLAIMS TO ITS OR ANY OBLIGATED PARTIES' OBLIGATIONS UNDER
THE ORIGINAL AGREEMENT, THE SWAP DOCUMENTS, THE DOCUMENTATION RELATING TO THE
DEPOSIT AND CASH MANAGEMENT SERVICES AND ANY OPERATING OR CAPITAL LEASE ENTERED
INTO WITH A SECURED PARTY (ANY OF THE DOCUMENTS EXECUTED IN CONNECTION WITH ANY
OF THE FORGOING OR ANY OF THE LOAN DOCUMENTS COLLECTIVELY, THE "TRANSACTION
DOCUMENTS"). TO INDUCE THE BANKS AND THE AGENT TO ENTER INTO THIS AGREEMENT, THE
BORROWER AND, BY THE EXECUTION OF THE LOAN DOCUMENTS TO WHICH IT IS A PARTY,
EACH OBLIGATED PARTY WAIVES ANY AND ALL CLAIMS, OFFSETS, DEFENSES OR
COUNTERCLAIMS, WHETHER KNOWN OR UNKNOWN, ARISING PRIOR TO THE DATE HEREOF AND
HEREBY RELEASES AGENT, THE BANKS,
66
THE OTHER SECURED PARTIES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS AND ATTORNEYS (COLLECTIVELY THE "RELEASED PARTIES") FROM ANY AND ALL
OBLIGATIONS, INDEBTEDNESS, LIABILITY, CLAIMS, RIGHTS, CAUSES OF ACTION OR
DEMANDS WHATSOEVER, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED WHICH THE
BORROWER OR ANY OBLIGATED PARTY EVER HAD, NOW HAS, CLAIMS TO HAVE OR MAY HAVE
AGAINST ANY RELEASED PARTY ARISING PRIOR TO THE CLOSING DATE AND FROM OR IN
CONNECTION WITH THE TRANSACTION DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
THEREBY.
Section 14.11 Amendments. No amendment or waiver of any provision of any
Loan Document to which the Borrower is a party, nor any consent to any departure
by the Borrower therefrom, shall in any event be effective unless the same shall
be agreed or consented to by the Required Banks and the Borrower, and each such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given; provided that no amendment, waiver, or consent
shall, unless in writing and signed by all of the Banks and the Borrower, do any
of the following: (a) increase the Commitments of the Banks; (b) reduce the
principal of, or interest on, the Notes, the Reimbursement Obligations, or any
fees or other amounts payable hereunder; (c) postpone any date fixed for any
payment of principal of, or interest on, the Notes, the Reimbursement
Obligations, or any fees or other amounts payable hereunder; (d) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Notes or the Letter of Credit Liabilities or the number of Banks which shall be
required for the Banks or any of them to take any action under any Loan
Document; (e) change any provision contained in this Section 14.11; (f) change
Section 10.8, Schedule 10.8, Section 5.6, the definition of the terms
Obligations, Primary Obligations, Secondary Obligations, or Secured Parties; (g)
except as permitted by Section 10.8, release any Collateral or release the
Borrower or any Obligated Party from any liability, including, but not limited
to, the release of any Obligated Party from a Guaranty or other Loan Document;
or (h) waive or amend any of the conditions specified in Article 7.
Notwithstanding anything to the contrary contained in this Section, (i) no
amendment, waiver, or consent shall be made with respect to Section 2.7, Section
2.8, or Article 13 without the prior written consent of the Agent; and (ii) no
amendment, waiver, or consent shall be made with respect to Section 5.6 or the
definitions of the terms Obligations, Primary Obligations, Secondary
Obligations, or Secured Parties in any manner that might adversely effect the
Approved Bank Affiliates without the prior written consent of the Approved Bank
Affiliates who hold at least sixty-six and two-thirds percent (66 2/3%) of the
then outstanding liquidated Obligations.
Section 14.12 Maximum Interest Rate.
(a) No interest rate specified in any Loan Document shall at any time
exceed the Maximum Rate. If at any time the interest rate (the "Contract
Rate") for any Obligation shall exceed the Maximum Rate, thereby causing
the interest accruing on such Obligation to be limited to the Maximum Rate,
then any subsequent reduction in the Contract Rate for such Obligation
shall not reduce the rate of interest on such Obligation below the Maximum
Rate until the aggregate amount of interest accrued on such Obligation
equals the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times been
in effect.
(b) No provision of any Loan Document shall require the payment or the
collection of interest in excess of the maximum amount permitted by
applicable law. If any excess of interest in such respect is hereby
provided for, or shall be adjudicated to be so provided, in any Loan
Document or otherwise in connection with this loan transaction, the
provisions of this Section shall govern and prevail and neither the
Borrower nor the sureties, guarantors, successors, or assigns of
67
the Borrower shall be obligated to pay the excess amount of such interest
or any other excess sum paid for the use, forbearance, or detention of sums
loaned pursuant hereto. In the event any Bank ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of
the maximum amount permitted by applicable law shall be applied as a
payment and reduction of the principal of the Obligations; and, if the
principal of the Obligations has been paid in full, any remaining excess
shall forthwith be paid to the Borrower. In determining whether or not the
interest paid or payable exceeds the Maximum Rate, the Borrower and each
Bank shall, to the extent permitted by applicable law, (a) characterize any
non-principal payment as an expense, fee, or premium rather than as
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
Obligations so that interest for the entire term does not exceed the
Maximum Rate.
Section 14.13 Notices. All notices and other communications provided for in
any Loan Document to which the Borrower or any Obligated Party is a party shall
be given or made in writing and telecopied, mailed by certified mail return
receipt requested, or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof and, if to an
Obligated Party, at the address for notices for the Borrower; or, as to any
party at such other address as shall be designated by such party in a notice to
each other party given in accordance with this Section. Except as otherwise
provided in any Loan Document, all such communications shall be deemed to have
been duly given when transmitted by telecopy, subject to telephone confirmation
of receipt, or when personally delivered or, in the case of a mailed notice,
three (3) Business Days after being duly deposited in the mails, in each case
given or addressed as aforesaid; provided, however, notices to the Agent
pursuant to Section 2.7 or Section 5.3 shall not be effective until received by
the Agent.
Section 14.14 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas and the applicable
laws of the United States of America.
Section 14.15 Counterparts. This Agreement may be executed in one or more
counterparts and on telecopy counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same agreement.
Section 14.16 Severability. Any provision of any Loan Document held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of any Loan Document and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 14.17 Headings. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 14.18 Non-Application of Chapter 346 of Texas Finance Code. The
provisions of Chapter 346 of the Texas Finance are specifically declared by the
parties hereto not to be applicable to any Loan Documents or to the transactions
contemplated thereby.
Section 14.19 Construction. The Borrower, each Obligated Party (by its
execution of the Loan Documents to which it is a party), the Agent, and each
Bank acknowledges that each of them has had the benefit of legal counsel of its
own choice and has been afforded an opportunity to review the Loan Documents
with its legal counsel and that the Loan Documents shall be construed as if
jointly drafted by the parties thereto.
68
Section 14.20 Independence of Covenants. All covenants under the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
such condition exists.
Section 14.21 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE AGENT OR ANY BANK IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF.
Section 14.22 Confidentiality. The Agent and each Bank (each a "Lending
Party") agrees to keep any Designated Information (as defined below) delivered
or made available by the Borrower to it confidential from anyone other than
Persons employed or retained by such Lending Party who are, or are expected to
be, engaged in evaluating, approving, structuring, or administering the credit
facility provided herein; provided that nothing herein shall prevent any Lending
Party from disclosing such Designated Information: (a) to any other Lending
Party, (b) to any other Person on a need to know basis if reasonably incidental
to the administration of the credit facility provided herein, (c) upon the order
of any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority, (e) which had been publicly disclosed other than
as a result of a disclosure by any Lending Party prohibited by this Agreement,
(f) in connection with any litigation to which such Lending Party or any of its
Affiliates may be a party, (g) to the extent necessary in connection with the
exercise of any remedy hereunder, (h) to such Lending Party's legal counsel and
independent auditors, (i) to any Affiliate of such Lending Party, solely in
connection with this Agreement, and (j) subject to written provisions
substantially similar (but no less stringent) to those contained in this
Section, to any actual or proposed participant or assignee of any of its rights
and obligations under the Loan Documents in accordance with the terms hereof.
The term "Designated Information" means any information which has been
designated by the Borrower in writing as confidential. Each Lending Party
acknowledges that the equity securities issued by Borrower are publicly traded,
the Borrower is subject to the reporting and certain other requirements of the
federal securities laws and such Lending Party is generally familiar with the
federal securities laws.
Section 14.23 Waiver of Continuing Defaults. Subject to the satisfaction of
the conditions set forth in Section 7.1, the Agent and the Banks waive the
Continuing Defaults (as defined in the Forbearance Agreement) and agree not to
exercise any rights and remedies available as a result of the occurrence
thereof. The Borrower and, by the execution of the Loan Documents to which it is
a party, each Obligated Party agree that the foregoing waiver shall not
constitute and shall not be deemed a waiver of any of the obligations under the
Loan Documents, or a waiver of any rights or remedies arising as a result of the
failure to observe and perform such obligations. The failure of the Borrower or
any Obligated Party to strictly comply with its obligations under the Loan
Documents will result in the occurrence of a Default in accordance with the
terms hereof.
Section 14.24 Conflict with Loan Documents. In the event of any direct
conflict between the provisions of this Agreement and the provisions of any
other Loan Document, the provisions of this Agreement shall control.
69
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
BORROWER:
DARLING INTERNATIONAL INC.
By:
----------------------------
Brad Phillips
Treasurer
Address for Notices:
251 O'Connor Ridge Blvd., Suite 300
Irving, Texas 75038
Fax No.: 972-717-1588
Telephone No.: 972-717-0300
Attention: Treasurer
70
AGENT:
Revolving Commitment: BANKBOSTON, N.A.,
- -------------------- individually as a Bank and as the Agent
$15,000,000.00
Swingline Commitment: By: ----------------------------------------
- -------------------- Peter Haley
$7,500,000.00 Vice President
Term Loan: Address for Notices:
- --------- -------------------
$4,078,000.11 100 Federal Street
Mail Stop 01-09-06
Boston, MA 02110
Fax No.: 617-434-2309
Telephone No.: 617-434-7860
Attention: ---------------------------------
With a copy to:
--------------
BankBoston, N.A.
100 Federal Street
MA BOS 01-06-01
Boston, Massachusetts 02110
Phone: 617-434-5478
Fax: 617-434-4775
Attention: Peter Haley
Applicable Lending Office:
-------------------------
100 Federal Street
Boston, MA 02110
71
CO-AGENTS:
---------
Revolving Commitment: CREDIT LYONNAIS NEW YORK BRANCH
- --------------------
$12,600,000.00
Term Loan: By: ----------------------------------------
- --------- Name: ----------------------------------
$3,425,519.98 Title: ---------------------------------
Address for Notices:
-------------------
Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, New York 10019
Fax No.: -----------------------------------
Telephone: ---------------------------------
Attention: ---------------------------------
Applicable Lending Office:
-------------------------
Credit Lyonnais New York Branch
1301 Avenue of the Americas
New York, New York 10019
72
Revolving Commitment: COMERICA BANK
- --------------------
$12,600,000.00
By: ----------------------------------------
Term Loan: Reginald M. Goldsmith, III
- --------- Vice President
$3,425,519.98
Address for Notices:
-------------------
4100 Spring Valley Road, Suite 900
Dallas, Texas 75244
Fax No.: 214-818-2550
Telephone No.: 214-818-2548
Attn: Reginald M. Goldsmith
Applicable Lending Office:
-------------------------
500 Woodward Avenue, 9th Floor
Detroit, MI 48266
Attn: Tina Azar
73
Revolving Commitment: WELLS FARGO BANK (TEXAS), NATIONAL
- -------------------- ASSOCIATION
$12,600,000.00
By: ----------------------------------------
Term Loan: Name: ----------------------------------
- --------- Title: ---------------------------------
$3,425,519.98
Address for Notices:
-------------------
Wells Fargo Bank
1000 Louisiana
Houston, Texas 77002
Phone: 713-319-1403
Fax: 713-250-7004
Attention: Roger Fruendt
With a copy to:
--------------
201 3rd Street, 8th Floor
San Francisco, CA 94103
Fax No.: 415-979-0675
Telephone No.: 415-477-5433
Attention: Judy Chan
Applicable Lending Office:
-------------------------
201 3rd Street, 8th Floor
San Francisco, CA 94103
74
OTHER BANKS:
-----------
Revolving Commitment: HARRIS TRUST AND SAVINGS BANK
- --------------------
$12,600,000.00
By: ----------------------------------------
Term Loan: Name: ----------------------------------
- --------- Title: ---------------------------------
$3,425,519.98
Address for Notices:
-------------------
111 West Monroe Street, 18 West Floor
Chicago, Illinois 60690
Fax No.: -----------------------------------
Telephone: ---------------------------------
Attention: ---------------------------------
Applicable Lending Office:
-------------------------
111 West Monroe
Chicago, Illinois 60603
75
Revolving Commitment: THE FIRST NATIONAL BANK OF CHICAGO
- --------------------
$12,600,000.00
By:-----------------------------------------
Term Loan: Name: ----------------------------------
- --------- Title: ---------------------------------
$3,425,519.98
Address for Notices:
-------------------
One First National Plaza, Suite 0631
Chicago, Illinois 60670
Fax No.: 312-732-1775
Telephone: 312-732-4728
Attention: Phillip D. Martin
Applicable Lending Office:
-------------------------
One First National Plaza
Suite 0318
Chicago, Illinois 60670
76
Revolving Commitment: HIBERNIA NATIONAL BANK
- --------------------
$7,800,000.00
By: ----------------------------------------
Term Loan: Name: ----------------------------------
- --------- Title: ---------------------------------
$2,120,560.01
Address for Notices:
-------------------
313 Carondelet, 12th Floor
New Orleans, LA 70131
Fax No.: 504-533-5344
Telephone No.: 504-533-2878
Attention: Christopher B. Pitre
Applicable Lending Office:
-------------------------
313 Carondelet, 12th Floor
New Orleans, LA 70131
77
Revolving Commitment: THE SUMITOMO BANK, LIMITED
- --------------------
$7,800,000.00
By: ----------------------------------------
Term Loan: Name: ----------------------------------
- --------- Title: ---------------------------------
$2,120,560.01
By: ------------------------------------
Name: ----------------------------------
Title: ---------------------------------
Address for Notices:
-------------------
450 Lexington Avenue, Suite 1700
New York, New York 10017
Fax No.: 212-818-0867
Telephone No.: 212-808-2325
Attention: Brian M. Smith
Applicable Lending Office:
-------------------------
450 Lexington Avenue, Suite 1700
New York, New York 10017
78
Revolving Commitment: SUNTRUST BANK, ATLANTA
- --------------------
$7,800,000.00
By: ----------------------------------------
Term Loan: Name: F. Steven Parrish
- --------- Title: Vice President
$2,120,560.01
By: ------------------------------------
Name: ----------------------------------
Title: ---------------------------------
Address for Notices:
-------------------
MC 176, 25th Floor
25 Park Place
Atlanta, GA 30302
Fax No.: 404-230-5305
Telephone No.: 404-724-3923
Attention: F. Steven Parrish
Applicable Lending Office:
-------------------------
MC 176, 25th Floor
25 Park Place
Atlanta, GA 30302
79
Revolving Commitment: CREDIT AGRICOLE INDOSUEZ, as assignee of
- -------------------- Caisse Nationale de Credit Agricole
$6,000,000.00
Term Loan: By: ----------------------------------------
- --------- Name: ----------------------------------
$1,631,199.98 Title: ---------------------------------
Address for Notices:
-------------------
55 East Monroe, Suite 4700
Chicago, Illinois 60603
Fax: No.: 312-372-3455
Telephone: 312-917-7568
Attention: Bradley Peterson
Applicable Lending Office:
-------------------------
55 East Monroe, Suite 4700
Chicago, Illinois 60603
80
Revolving Commitment: THE FUJI BANK, LIMITED - NEW YORK BRANCH
- ---------------------
$7,800,000.00
By: ----------------------------------------
Term Loan: Name: ----------------------------------
- --------- Title: ---------------------------------
$2,120,560.01
Address for Notices:
-------------------
Two World Trade Center
79th Floor
New York, New York 10048-0042
Fax No.: 212-321-9407
Telephone No.: 212-898-2497
Attn: Noshin Osman
With a copy to:
--------------
1 Houston Center
1221 McKinney, Suite 4100
Houston, Texas 77010
Fax No.: 713-759-0048
Telephone No.: 713-650-7863
Attn: Mark Polasek
Applicable Lending Office:
-------------------------
Two World Trade Center
79th Floor
New York, New York 10048-0042
81
Revolving Commitment: NATIONSBANK, N.A.
- --------------------
$6,000,000.00
By: ----------------------------------------
Term Loan: Name: ----------------------------------
- --------- Title: ---------------------------------
$1,631,199.98
Address for Notices:
-------------------
901 Main Street, 66th Floor
Dallas, Texas 75202
Fax No.: 214-508-3533
Telephone: 214-508-2023
Attn: William E. Livingstone
Applicable Lending Office:
-------------------------
901 Main Street, 66th Floor
Dallas, Texas 75202
82
Revolving Commitment: THE BANK OF NOVA SCOTIA
- --------------------
$7,800,000.00
By: ----------------------------------------
Term Loan: Name: ----------------------------------
- --------- Title: ---------------------------------
$2,120,560.01
Address for Notices:
-------------------
600 Peachtree Street, N.E., Suite 2700
Atlanta, Georgia 30308
Fax No.: 404-888-8798
Telephone No.: 404-877-1565
Attn: Dottie Legista
With a copy to:
--------------
1100 Louisiana, Suite 3000
Houston, Texas 77002
Fax No.: 713-752-2425
Telephone No.: 713-759-3443
Attn: Paul Gonin
Applicable Lending Office:
-------------------------
600 Peachtree Street, N.E., Suite 2700
Atlanta, Georgia 30308
83
Revolving Commitment: BANK ONE, TEXAS, N.A.
- --------------------
$6,000,000.00
By: ----------------------------------------
Term Loan: Name: ----------------------------------
- --------- Title: ---------------------------------
$1,631,199.98
Address for Notices:
-------------------
One First National Plaza, Suite 0631
Chicago, Illinois 60670
Fax No.: 312-732-1775
Telephone: 312-732-4728
Attention: Phillip D. Martin
Applicable Lending Office:
-------------------------
Bank One, Texas, N.A.
500 W. Throckmorton Street, PG6
Fort Worth, Texas 76101
84
INDEX TO EXHIBITS
-----------------
Exhibit Description of Exhibit
------- ----------------------
"A" Revolving Note
"B" Swingline Note
"C" Term Note
"D" Guaranty
"E" Borrower Security Agreement
"F" Subsidiary Security Agreement
"G" Assignment and Acceptance
"H" Compliance Certificate
INDEX TO SCHEDULES
------------------
Schedule Description of Schedule
-------- -----------------------
1.1(a) Excluded Real Property
8.6 Title Exceptions
8.10 Pending Investigations by Taxing Authorities
2.7(a) Existing Letters of Credit
8.14 List of Subsidiaries
9.10(a) Vehicle Titles; Abandon Foreign Registrations
10.1 Existing Debt
10.2 Existing Liens
10.5 Existing Investments
10.8 Nonproductive Assets
14.8 Ineligible Assignees
85
Schedule 1.1(a)
to
Darling International
Credit Agreement
Excluded Real Property
----------------------
================================================================================
State City Estimated Comment/Basis
Value
================================================================================
ID Twin Falls $32,000 3.37 acres, building is 4,648 sq.
ft. @ $5/per sq. ft., office is in
disrepair. 1989 relator estimate.
- --------------------------------------------------------------------------------
LA Crowly $10,000 9.6 acres, plus cement ramp. Lease
office at gas station. 1989
Realtor estimate.
- --------------------------------------------------------------------------------
MI Carrollton $26,735 2 acres, plus 6,416 sq ft.
building, 1988 Realtor estimate.
- --------------------------------------------------------------------------------
MN Chatfield $60,000 Approximately 4 acres, plus 9,600
sq. ft. building.
- --------------------------------------------------------------------------------
MO Republic $13,800 39.54 acres, plus building, 1989
Tax Assess.
- --------------------------------------------------------------------------------
OH Chandlersville $75,000 86 acres, 2 barns, trailer, 1989
Realtor estimate.
- --------------------------------------------------------------------------------
PA Philadelphia $25,000 1.62 acres, 1990 Realtor estimate.
- --------------------------------------------------------------------------------
PA Pittsburgh $20,000 4.5 acres, 1990 Realtor estimate.
- --------------------------------------------------------------------------------
TX Corpus Christi aka $36,000 3 acres, 1988 Realtor estimate.
Robbstown
- --------------------------------------------------------------------------------
WA Sunnyside $20,000 9.42 acres, 1990 Realtor estimate.
- --------------------------------------------------------------------------------
FL Jacksonville No Value Below sea level and Phase I
prohibits building on property.
- --------------------------------------------------------------------------------
IA Tama $25,000 General manager believes if we
could get $50,000 we would do
good. Only offer of $25,000.
- --------------------------------------------------------------------------------
MI Detroit (Wayne Soap) No Value Recommended to gift to city due to
disrepair. City does not want.
- --------------------------------------------------------------------------------
MI Grand Rapids $20,000 to We have received offers, as
$25,000 recently as January 1999
ranging from $20,000 to $25,000.
- --------------------------------------------------------------------------------
NC Goldsboro $50,000 Broker in 1997 estimated at
$50,000.
- --------------------------------------------------------------------------------
OH Dayton No Value Recommended by Realtor as gift to
city.
- --------------------------------------------------------------------------------
PA Matamoras $20,000 Broker estimates value at $20,000.
- --------------------------------------------------------------------------------
TX Big Springs $7,500 1996 received $7,500 for property,
returned due to tank removal.
- --------------------------------------------------------------------------------
TX Waco $10,000 1998 received offer of $10,000.
- --------------------------------------------------------------------------------
VA Bristol $40,000 1997 broker opinion estimate.
- --------------------------------------------------------------------------------
WI Fon du Lac $50,000 1997 broker opinion letter
estimate.
================================================================================
Schedule 2.7(a)
to
Darling International
Credit Agreement
Existing Letters of Credit
--------------------------
================================================================================
BENEFICIARY EXP. L/C # CURRENT BALANCE REASON FOR ISSUING L/C
DATE
================================================================================
Commissioner of 5/26/98 50102006 $750,000.00 Insurance Company of
Insurance Colorado, Inc.
State of In lieu of surety
Colorado bond.
- --------------------------------------------------------------------------------
Port of Tacoma 5/26/98 50102008 $61,908.00 Darling International
Inc.
Satisfy lease
agreement.
10/01/95
- --------------------------------------------------------------------------------
CIGNA Insurance 5/26/98 50102007 $2,390,000.00 Darling International
Inc.
Re-insurance
agreement
- --------------------------------------------------------------------------------
Robert Frish 5/6/98 50102263 $337,500.00 Darling International
Inc.
Standard Tallow
Acquisition
- --------------------------------------------------------------------------------
Burton A. Levy 5/6/98 50102264 $2,475,00.00 Darling International
Inc.
Standard Tallow
Acquisition
- --------------------------------------------------------------------------------
William Frish 5/6/98 50102265 $337,500.00 Darling International
Inc.
Standard Tallow
Acquisition
- --------------------------------------------------------------------------------
First Union 5/6/98 50102272 $84,375.00 Darling International
National Bank Inc.
Standard Tallow
Acquisition
- --------------------------------------------------------------------------------
Dewey R. Walker 11/11/97 50102396 $365,000.00 Darling International
Inc.
GREASCO Acquisition
- --------------------------------------------------------------------------------
St. Paul Fire & 4/1/99 50062910 $5,600,000.00 Darling International
Marine Insurance Inc.
Insurance coverage
================================================================================
Schedule 8.6
to
Darling International
Credit Agreement
Title Exceptions
----------------
Petaluma, Sonoma County, CA 94592
Clear Title in dispute due to portions of property lying in historic
riverbed of Petaluma River.
Schedule 8.10
to
Darling International
Credit Agreement
Pending Investigations by Taxing Authorities
--------------------------------------------
1. Darling International Inc. & Subsidiaries:
Internal Revenue Service investigation of Income Taxes for Years 1994,
1995, 1996, 1997
2. Darling International Inc.:
Illinois Department of Revenue investigation of Sales/Use Taxes for the
period July 1992 through June 1998
3. Darling International Ltd.:
Revenue Canada investigation of Income Taxes for Years 1992 through 1996
Schedule 8.14
to
Darling International
Credit Agreement
List of Subsidiaries
--------------------
=================================================
Ownership
================================================================================================================
Jurisdiction of
Incorporation Issued and
Name of or Borrower's Authorized Outstanding
Subsidiary Type Organization % Capital Capital
================================================================================================================
Darling Foreign Sales Corp. Virgin Islands 100% 1,000 1,000
Corporation
- ----------------------------------------------------------------------------------------------------------------
Darling International, Ltd. Corp. Ontario, Canada 100% 100,000 1,000
- ----------------------------------------------------------------------------------------------------------------
Food By-Product Recycling, Corp. Illinois * 30,000 13,500*
Inc.
- ----------------------------------------------------------------------------------------------------------------
Darling Properties, Inc. Corp. Delaware 100% 10 10
- ----------------------------------------------------------------------------------------------------------------
Eastern Shore Rendering Corp. Maryland 100% 100 100
Company
- ----------------------------------------------------------------------------------------------------------------
Insurance Company of Corp. Colorado 100% 400 400
Colorado, Inc.
- ----------------------------------------------------------------------------------------------------------------
International Processing Corp. Georgia 100% 1,500,000 Class A 750,000 Class A
Corporation** Common
1,500,000 Class B 750,000 Class B
Common
- ----------------------------------------------------------------------------------------------------------------
International Transportation Corp. Delaware 100% 50 Class A 7.5 Class A
Service, Inc.** 50 Class B 7.5 Class B
- ----------------------------------------------------------------------------------------------------------------
The Standard Tallow Corp. New Jersey 100% 228 Class A 58.0656 Class A
Corporation** 72 Class B 72 Class B
150 Class C 0 Class C
72.75 Class D 52.2094 Class D
75 Class E 75 Class E
- ----------------------------------------------------------------------------------------------------------------
Standard Rendering Company Corp. Delaware 100% 10 10
- ----------------------------------------------------------------------------------------------------------------
The Van Iderstine Company Corp. Delaware 100% 10 10
- ----------------------------------------------------------------------------------------------------------------
Darling Restaurant Services Corp. Delaware 100% 1,000 100
Inc.**
- ----------------------------------------------------------------------------------------------------------------
Esteem Products Inc.** Corp. Delaware 100% 1,000 100
================================================================================================================
*All of the outstanding stock of Food By-Product Recycling, Inc. is held by
International Transportation Service, Inc., a 100% owned subsidiary of Darling
International Inc.
** Indicates a Significant Subsidiary.
Schedule 9.10(a)
to
Darling International
Credit Agreement
A. Excluded Vehicle Titles
-----------------------
======================================================================================================
State Description Ledger Date Serial No. Net Book Value
Located @ 10-31-98
======================================================================================================
TRUCKS & TRACTORS
- ------------------------------------------------------------------------------------------------------
KS 1985 FORD C&C 1/2/94 1FDRRXOU6FVA62550 98.98
- ------------------------------------------------------------------------------------------------------
MD UNIT 6009 1989 FORD F&B TRUCK 1/2/94 1FDYW82A6JVA57048 293.27
- ------------------------------------------------------------------------------------------------------
MD #895 1985 WHITE TRACTOR 1/2/94 1WUBDCCE6FN105264 1,865.19
- ------------------------------------------------------------------------------------------------------
FL #F55 1994 PETERBUILT BULK GREASE PUMPER 3/16/1997 1XPMH77X3RM808220 35,674.11
- ------------------------------------------------------------------------------------------------------
MN 1986 VOLVO N-12 TRACTOR 1/2/94 YV5N2AXHU018233 1,937.30
- ------------------------------------------------------------------------------------------------------
MN 1986 WHITE TRUCK 1/2/94 1WXAAB5D7GN110792 1,778.83
- ------------------------------------------------------------------------------------------------------
MN 1985 INTERNATIONAL TRUCK 1/2/94 1HTZTLBN3FHA30750 1,468.18
- ------------------------------------------------------------------------------------------------------
NE 1989 FORD LN7000 1/2/94 1FDXK74P0KVA49046 1,869.65
- ------------------------------------------------------------------------------------------------------
IL 1977 CHEVROLET PICKUP T15 12/11/1997 CCE617V120051 3,493.58
- ------------------------------------------------------------------------------------------------------
OH UNIT 3007 1984 INTERNATIONAL T/A TRUCK 1/2/94 1HTZTLBN1EHA40823 1,204.46
- ------------------------------------------------------------------------------------------------------
NE 1993 BUICK LE SABRE 1/2/94 1G4HP53L3PH539432 2,667.26
- ------------------------------------------------------------------------------------------------------
ID 1985 INTERROGATORY DEAD STOCK TRUCK 1/2/94 1HTZTLBN1FHA30987 1,469.98
- ------------------------------------------------------------------------------------------------------
ID 76 KENWORTH TRUCK 1/2/94 1528005 1,067.84
- ------------------------------------------------------------------------------------------------------
TX #81 1988 NAVISTAR TRACTOR 1/2/94 1HSLRDDN8JH567132 1,794.82
- ------------------------------------------------------------------------------------------------------
LA #56 1986 FORD CITY S F 1/2/94 1FDXR80V7GBA20003 1,880.85
- ------------------------------------------------------------------------------------------------------
NV 79 GMC TRUCK (143) 1/2/94 T17DB9V602410 232.55
- ------------------------------------------------------------------------------------------------------
CA 92 MERCURY GRAND MARQUIS 1/2/94 2MECM74W8NX753372 2,664.91
- ------------------------------------------------------------------------------------------------------
CA 73 INTERNATIONAL TRUCK (255P) 1/2/94 71795CGB22651 549.26
- ------------------------------------------------------------------------------------------------------
CA 85 GMC TRACTOR (617) 1/2/94 1GDT9EC1FV611344 1,990.44
- ------------------------------------------------------------------------------------------------------
CA 80 INTERNATIONAL TRUCK 1/2/94 2HTNDHWN0ECB12606 873.92
- ------------------------------------------------------------------------------------------------------
CA 88 INTL TRACTOR (1147) 1/2/94 1HSLRZ6N6JH615382 2,979.77
- ------------------------------------------------------------------------------------------------------
1
======================================================================================================
State Description Ledger Date Serial No. Net Book Value
Located @ 10-31-98
======================================================================================================
CA 85 INTERNATIONAL TRUCK 1/2/94 1HTZTLBN9FHA13824 1,229.82
- ------------------------------------------------------------------------------------------------------
CA 87 INTL TRACTOR (684) 1/2/94 1HSLRDEN4JH65585 3,018.64
- ------------------------------------------------------------------------------------------------------
CA 87 WHITE TRACTOR 1/2/94 1WUBDCCE8HN120626 2,703.97
- ------------------------------------------------------------------------------------------------------
TX #161 '90 INT'L 8100 TRACTOR 1/2/1994 1HSHBGGN8LH208910 7,373.28
- ------------------------------------------------------------------------------------------------------
TX #127 1992 iNT'L 4900 4 X 2 SINGLE AXLE 1/2/1994 1HSSDN4N4NH400742 6,023.26
TRCTR
- ------------------------------------------------------------------------------------------------------
TX #130 '88 INT'L 1/2/1994 3,060.01
- ------------------------------------------------------------------------------------------------------
TX #134 - '88 INT'L TRACTOR 1/2/1994 1HSJYG2R8JH552177 4,519.84
- ------------------------------------------------------------------------------------------------------
CA 92 INTL TRACTOR 1/2/1994 1HSHGLKR1NH387105 4,611.95
- ------------------------------------------------------------------------------------------------------
CA '82 INT'L TRACTOR - (1551) 1/2/1994 1951CHA20596 437.87
- ------------------------------------------------------------------------------------------------------
CA '86 INT'L TRUCK - (909) 1/2/1994 1HTLDUGN6GHA21205 1,226.24
- ------------------------------------------------------------------------------------------------------
MT 1982 INTERNATIONAL 1954 1/2/1994 1HTAA1952CHA24236 50.86
- ------------------------------------------------------------------------------------------------------
TRAILERS
- ------------------------------------------------------------------------------------------------------
NJ #1564 1966 GARWOOD 1/2/1994 167795 39.29
- ------------------------------------------------------------------------------------------------------
MN UNIT 1553 1987 SUMMIT TUB TRLR (1977) 1/2/1994 1S8AD3823H0006544 1,598.73
- ------------------------------------------------------------------------------------------------------
MN UNIT 1554 1972 HEIL TUB TRLR 1/2/1994 HF4071 575.89
- ------------------------------------------------------------------------------------------------------
MN 1989 HAWKEYE EAGLE TRAILER 1/2/1994 1VFSS4224K1002064 1,353.39
- ------------------------------------------------------------------------------------------------------
MN 1977 STECCO DUMP TRAILER 1/2/1994 123177299 763.77
- ------------------------------------------------------------------------------------------------------
KS 1988 HAWKEYE DUMP TRAILER 1/2/1994 1VFSS4021K1002085 1,353.39
- ------------------------------------------------------------------------------------------------------
IL 1983 SCHN TRAILER 10936 1/2/1994 10936A8301001088 757.84
- ------------------------------------------------------------------------------------------------------
IL 1975 TRAILCO TRAILER 1/2/1994 10602 838.95
- ------------------------------------------------------------------------------------------------------
IL 1982 SCHN TRAILER 2142A88 1/2/1994 2142A882 555.91
- ------------------------------------------------------------------------------------------------------
IL 1988 MATE END DUMP TRAILER 4/7/1995 1M9A3852X4H036825 1,850.03
- ------------------------------------------------------------------------------------------------------
CA '79 BRENNER TANK TRAILER 1/2/1994 5134595 1,548.47
- ------------------------------------------------------------------------------------------------------
TX SAT T-219 1976 FRUEHAUF DUMP S TRAILER 1/2/1994 FWX831601 31.39
- ------------------------------------------------------------------------------------------------------
TX #T-215 SAT 1988 BRADLEY BOX TRAILER 1/2/1994 2001 1,296.20
- ------------------------------------------------------------------------------------------------------
TX #T-351 1967 TRAILMOBLIE TRAILER 1/2/1994 D31973 39.29
- ------------------------------------------------------------------------------------------------------
2
======================================================================================================
State Description Ledger Date Serial No. Net Book Value
Located @ 10-31-98
======================================================================================================
CA 73 WESTERN ALUMINUM DUMP TRAILER 1/2/1994 718773 87.01
- -------------------------------------------------------------------------------------------------------
CA WABO TRAILER - (657) 1/2/1994 B9102C00H1037025 2,052.71
- -------------------------------------------------------------------------------------------------------
CA 55 TRAILMOBILE TRAILER 1/2/1994 200276 254.13
- -------------------------------------------------------------------------------------------------------
3
B. Abandon Foreign Intellectual Property Registrations
---------------------------------------------------
I. Borrower
===============================================================================================
TRADEMARKS
- -----------------------------------------------------------------------------------------------
Owner of Trademark Serial No. Filing Country
Record Date of
Registration
===============================================================================================
Darling International Inc. Boss Hogg* 1,597,125 04/24/96 Argentina
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 575,471 05/02/96 Benelux
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 500,975 01/12/98 Chile
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 06961/1996 12/20/96 Denmark
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 95/980514 05/13/96 France
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 3,927,762 03/04/96 Germany
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 369,678 10/02/96 Indonesia
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 516,172 01/31/96 Mexico
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 101,270 09/04/98 Poland
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 72541 08/16/96 Taiwan
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 147,080 10/16/96 Russia
- -----------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 2,025,016 03/01/96 Gr. Britain
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 163,395 04/01/96 Austria
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 587,811 12/02/96 Benelux
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 03024/1997 07/18/97 Denmark
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 95602102 07/19/96 France
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 39550233 04/09/96 Germany
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 2,049,223 12/06/96 Gr. Britain
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 127,640 03/17/98 Greece
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 200,963 06/11/98 Ireland
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 4,113,142 02/13/98 Japan
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 9698 04/03/96 Liechtenstein
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 96.16682 02/05/95 Monaco
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 314,301 09/13/96 Portugal
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 2,003,549 12/20/.96 Spain
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 312,437 04/26/96 Sweden
- -----------------------------------------------------------------------------------------------
4
===============================================================================================
TRADEMARKS
- -----------------------------------------------------------------------------------------------
Owner of Trademark Serial No. Filing Country
Record Date of
Registration
===============================================================================================
Darling International Inc. CleanStar & Design** 447,992 01/05/98 Switzerland
- -----------------------------------------------------------------------------------------------
Darling International Inc. Promeal* 403,800 11/07/97 Indonesia
- -----------------------------------------------------------------------------------------------
Darling International Inc. Promeal (Class 31)* 556,525 08/28/97 Mexico
- -----------------------------------------------------------------------------------------------
Darling International Inc. Promeal (Class 5)* 556,526 08/28/97 Mexico
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 163,198 03/25/96 Austria
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 587,810 12/02/96 Benelux
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 00742/1996 02/02/96 Denmark
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 95/602,106 05/31/96 France
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 39550234 06/13/96 Germany
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 2,049,225 08/23/96 Gr. Britain
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 169,156 03/25/97 Ireland
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 9699 04.03.96 Liechtenstein
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 96.16681 02/21/96 Monaco
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 314,300 09/13/96 Portugal
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 2,003,550 06/05/96 Spain
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 312,436 04/26/96 Sweden
- -----------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 442,825 06/20/97 Switzerland
- -----------------------------------------------------------------------------------------------
Darling International Inc. CleanStar* RM95C/005929 12/20/95 Italy
- -----------------------------------------------------------------------------------------------
*Company Intellectual Property Counsel has been directed to abandon these
trademarks and to incur no further expenses to protect the marks because they
are not currently being used and there are no plans to use them in the subject
country.
**The Company is not currently using these marks, has no plans to use them in
the subject country and plans to direct that they be abandoned.
5
Schedule 10.1
to
Darling International
Credit Agreement
Existing Debt
-------------
================================================================================
Balance as of November 28, 1998
- --------------------------------------------------------------------------------
Michael Rosenberg Note Payable $ 84,375
- --------------------------------------------------------------------------------
Noncompete - G. Mullinex - Adrian 35,625
- --------------------------------------------------------------------------------
Consulting - G. Mullinex - Adrian 107,775
- --------------------------------------------------------------------------------
Noncompete - S. Buttrey - Stadler 1,090,331
- --------------------------------------------------------------------------------
Noncompete - L. Buttrey - Stadler 400,857
- --------------------------------------------------------------------------------
Noncompete - D. Walker - GREASCO 165,000
- --------------------------------------------------------------------------------
Noncompete - J. Fontaine - Enduro 264,000
- --------------------------------------------------------------------------------
Noncompete - T. Fontaine - Enduro 264,000
- --------------------------------------------------------------------------------
Noncompete - J. Jones - Enduro 132,000
- --------------------------------------------------------------------------------
Contingency Payable - Enduro 900,000
- --------------------------------------------------------------------------------
Noncompete - Zehe - Wolverine 190,000
- --------------------------------------------------------------------------------
Noncompete - Murray - Wolverine 195,000
- --------------------------------------------------------------------------------
Noncompete - B. Levy - Standard 2,866,665
- --------------------------------------------------------------------------------
Noncompete - R. Frish - Standard 378,638
- --------------------------------------------------------------------------------
Noncompete - I. Frish - Standard 358,172
- --------------------------------------------------------------------------------
Noncompete - W. Frish - Standard 520,655
- --------------------------------------------------------------------------------
Consulting - M. Michelstein - Standard 306,098
- --------------------------------------------------------------------------------
Noncompete - M. Rosenberg - Standard 264,980
- --------------------------------------------------------------------------------
Noncompete - J. Levy - Standard 47,932
- --------------------------------------------------------------------------------
Health expense obligations - B. Levy - Standard 90,000
- --------------------------------------------------------------------------------
Health expense obligations - I. Frish - Standard 20,000
- --------------------------------------------------------------------------------
Noncompete - D. Dykstra - Torvac 400,000
- --------------------------------------------------------------------------------
Noncompete - J. Fontaine - Midwest Recycling 130,000
- --------------------------------------------------------------------------------
1
- --------------------------------------------------------------------------------
Contingency Payable - Midwest Recycling 200,000
- --------------------------------------------------------------------------------
Noncompete - K. Miller - IPC 100,000
- --------------------------------------------------------------------------------
Mgmt. Fee - K. Miller - IPC 500,000
- --------------------------------------------------------------------------------
Asset Purchase - A&A Grease Co. 217,500
- --------------------------------------------------------------------------------
TOTAL DEBT $10,229,603
================================================================================
2
Schedule 10.2
to
Darling International
Credit Agreement
Existing Liens
--------------
1. Lien on property in or on the Premises as defined in the Lease dated
November 30, 1993, between the Port of Tacoma and the Borrower to secure
the Borrower's obligations under such Lease.
2. Liens of record encumbering certain equipment and fixtures granted pursuant
to the Security Agreement dated March 5, 1989, executed by Kark Rendering
Company as Debtor. The related debt has been paid and extinguished in full.
The Liens should be released.
3. Liens of record encumbering certain equipment and fixtures granted pursuant
to the Security Agreement dated March 5, 1989, executed by Blue Earth
Rendering Company as Debtor. The related debt has been paid and
extinguished in full. The Liens should be released.
4. Liens of record encumbering certain equipment and fixtures granted pursuant
to the Security Agreement dated March 5, 1989, executed by Blue Earth
Rendering company and Donald E. Kark, Trustee. The related debt has been
paid and extinguished in full. The Liens should be released.
Schedule 10.5
to
Darling International
Credit Agreement
Existing Investments
--------------------
Balances as of
November 28, 1998
Corporate:
Israeli Bonds $2,000
Texas International Raceway preferred seat license $6,000
Texas Stadium Bonds $26,700
BankBoston Sweep Repurchase Agreement $91,272
Insurance Company of Colorado:
First American Treasury Obligations Fund of 1st Bank System, Inc $564,500
Notes Receivable:
Bowling (Orville, OH) $6,025
Coulter (Caldwell, ID) $31,650
Avery (Wayne City, MI) $4,912
JKP Enterprises $47,125
Schedule 10.8
to
Darling International
Credit Agreement
List of Non-Productive Assets
-----------------------------
=============================================================================================
LOCATION ADDRESS DESCRIPTION
=============================================================================================
Scranton Vogelbacher Industrial Park 34.5 acres; closed transfer station
PA Langon Road, Pittson Township on property.
Luzerne County, PA 18640
- ---------------------------------------------------------------------------------------------
Petaluma 2592 Lakeville Highway 18.96 acres; closed transfer station
CA Petaluma, CA 94592 on property.
parcels: 005-060-41-3
005-060-42-1
- ---------------------------------------------------------------------------------------------
Big Springs Frontage road property along I-20 5.0 acres of raw land; Partial
TX outside Big Springs, TX building on property. Land is
SW/4 of Section 26, Block 33 TIN severely sloped.
- ---------------------------------------------------------------------------------------------
Goldsboro Just west of US 70 Bypass 12.89 acres with buildings remaining
NC US Hwy 117 from former rendering facility.
Wayne County, NC
- ---------------------------------------------------------------------------------------------
Fon du Lac 3422 Hwy. 16 at I45 30.0 acres; closed transfer station
WI Fon du Lac County, WI on property.
- ---------------------------------------------------------------------------------------------
Shelbyville Old Franklin Rd. 22 acres; closed transfer station on
IN Shelby County IN property.
Addison Township, IN 46176
- ---------------------------------------------------------------------------------------------
Dayton 1826 N. Gettysburg Rd. 5.63 acres. Closed transfer station.
OH Montgomery County, OH
- ---------------------------------------------------------------------------------------------
Wayne Soap 700 Leigh Ave. 4 acres. Former rendering facility;
Detroit MI 9101-9185 Thaddeus Avenue closed February 1990.
Wayne County, Detroit, MI
- ---------------------------------------------------------------------------------------------
Matamoras Westfall Township Approx. 2 acres of landlocked raw
PA Pike County, PA land; adjacent to larger portion
previously sold in 1989 which
contained former rendering facility.
- ---------------------------------------------------------------------------------------------
1
=============================================================================================
LOCATION ADDRESS DESCRIPTION
=============================================================================================
Bristol Rt. 11, Exit 5 39.02 acres of land adjacent to
VA Bordwine Rd. (State Route 625) closed rendering facility previously
Washington County, VA sold.
- ---------------------------------------------------------------------------------------------
Grand Rapids 1990 Bristol Rd. 2.26 acres. Closed transfer station.
MI Kent County, MI 49501
- ---------------------------------------------------------------------------------------------
Los Angeles Harriett & 26th Streets 2 acres; closed truck terminal.
CA Los Angeles, CA
- ---------------------------------------------------------------------------------------------
Tama Hwy 30 28 acre closed rendering plant.
IA Tama, IA
- ---------------------------------------------------------------------------------------------
Jacksonville 3rd Street between dead end and 6 vacant lots acquired with the
FL Moat Street GreaseCo transaction.
Duval County, FL
- ---------------------------------------------------------------------------------------------
New Brighton 19 NW 14th Street 6 acres, closed transfer station.
MN Ramsey County, MN
- ---------------------------------------------------------------------------------------------
Waco 131 Cottonbelt 3.9 acres, closed transfer station.
Texas McLennan County, TX
=============================================================================================
2
Schedule 14.8
to
Darling International
Credit Agreement
Ineligible Assignees
--------------------
================================================================================
Griffin Industries Anamax
Baker Commodities American Proteins (GA)
Scope Industries American Proteins (IA) m,,
Tyson Foods Seaboard Farms
IBPCargill & Subsidiaries Zapata
National By Products Continental Grain
Conagra & Subsidiaries Smithfield Foods
Perdue Hatfield Packing
Canada Packers Rothsay (Maple Leaf Foods)
Texas By Products and/or Bill Shirley Gardner Smith
Spiritas Holdings and/or Steve Spiritas Coast GrainsHuezinga Capital Mgt.
& family Florida Transport
Valley ProteinsSanimal Industries, Inc. Taylor Packing
Moyer Packing Kane Miller and/or Subsidiaries
Inland By-Products LG Korea
Henkel Charoen Pokophand, Thailand
Unichema (ICI) Great Wall, Taiwan
Koch Industries Bachoco, Mexico
Mitsubishi Quimic, MexicoLa Hacienda, Mexico
Kao Chemical Rethmann
Archer Daniels Midland
Packerland
Cardinal Investments
Central By-Products
Mendota Agri Products (Mahoney Rendering)
================================================================================
EXHIBIT "A"
TO
DARLING INTERNATIONAL INC.
AMENDED AND RESTATED CREDIT AGREEMENT
Revolving Note
--------------
AMENDED AND RESTATED REVOLVING NOTE
-----------------------------------
$---------------- Dallas, Texas ----------, ----
FOR VALUE RECEIVED, the undersigned, DARLING INTERNATIONAL INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
- ---------------- (the "Bank"), at the Principal Office of the Agent, in lawful
money of the United States of America and in immediately available funds, the
principal amount of ---------------------- ($-----------) or such lesser amount
as shall equal the aggregate unpaid principal amount of the Revolving Loans made
by the Bank to the Borrower under the Credit Agreement referred to below plus
the revolving loans made by the Bank under the Original Agreement and
outstanding on the date hereof, on the dates and in the principal amounts
provided in the Credit Agreement, and to pay interest on the unpaid principal
amount of each such Revolving Loan, at such office, in like money and funds, for
the period commencing on the date of such Revolving Loan until such Revolving
Loan shall be paid in full, at the rates per annum and on the dates provided in
the Credit Agreement.
The Borrower hereby authorizes the Bank to record in its records the amount
of each Revolving Loan and Type of Accounts established under each Revolving
Loan and all Conversions and payments of principal in respect thereof, which
records shall, in the absence of manifest error, be conclusive; provided,
however, that the failure to make such notation with respect to any such
Revolving Loan, Account, or payment shall not limit or otherwise affect the
obligations of the Borrower under the Credit Agreement or this Amended and
Restated Revolving Note ("Revolving Note").
This Revolving Note is one of the "Revolving Notes" referred to in the
certain Amended and Restated Credit Agreement dated as of January 22, 1999,
among the Borrower, the Bank, the other lenders named therein, and BankBoston,
N.A., as agent for such lenders (the "Agent") (such Amended and Restated Credit
Agreement, as the same may be amended or otherwise modified from time to time,
being referred to herein as the "Credit Agreement"). The Credit Agreement, among
other things, contains provisions for acceleration of the maturity of this
Revolving Note upon the happening of certain stated events and for prepayments
of Revolving Loans prior to the maturity of this Revolving Note upon the terms
and conditions specified in the Credit Agreement. Capitalized terms used in this
Revolving Note have the respective meanings assigned to them in the Credit
Agreement.
This Revolving Note shall be governed by and construed in accordance with
the laws of the State of Texas and the applicable laws of the United States of
America.
The Borrower and each surety, guarantor, endorser, and other party ever
liable for payment of any sums of money payable on this Revolving Note jointly
and severally waive notice, presentment, demand for payment, protest, notice of
protest and non-payment or dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, diligence in collecting, grace, and all
other formalities of any kind, and consent to all extensions without notice for
any
1
period or periods of time and partial payments, before or after maturity, and
any impairment of any collateral securing this Revolving Note, all without
prejudice to the holder. The holder shall similarly have the right to deal in
any way, at any time, with one or more of the foregoing parties without notice
to any other party, and to grant any such party any extensions of time for
payment of any of said indebtedness, or to release any such party or to release
or substitute part or all of the collateral securing this Revolving Note, or to
grant any other indulgences or forbearances whatsoever, without notice to any
other party and without in any way affecting the personal liability of any party
hereunder.
This Revolving Note amends and restates in its entirety that certain
Revolving Note dated as of June 5, 1997 executed by the Borrower pursuant to the
Original Agreement and payable to the order of the Bank (the "Prior Note"). This
Revolving Note does not extinguish the indebtedness outstanding under the Prior
Note nor does it constitute a novation with respect to such indebtedness. This
Revolving Note evidences the indebtedness outstanding on the date hereof under
the Prior Note and additional Revolving Loans made under the terms of the Credit
Agreement on and after the date hereof.
DARLING INTERNATIONAL INC.
By:---------------------------
Brad Phillips, Treasurer
2
EXHIBIT "B"
TO
DARLING INTERNATIONAL INC.
AMENDED AND RESTATED CREDIT AGREEMENT
Swingline Note
--------------
AMENDED AND RESTATED SWINGLINE NOTE
-----------------------------------
$7,500,000 Dallas, Texas January 22, 1999
FOR VALUE RECEIVED, the undersigned, DARLING INTERNATIONAL INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of BANKBOSTON,
N.A. (the "Bank"), at the Principal Office of the Agent, in lawful money of the
United States of America and in immediately available funds, the principal
amount of Seven Million Five Hundred Thousand Dollars ($7,500,000) or such
lesser amount as shall equal the aggregate unpaid principal amount of the
Swingline Loans made by the Bank to the Borrower under the Credit Agreement
referred to below plus the swingline loans made by the Bank pursuant to the
Original Agreement which are outstanding on the date hereof, on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount of each such Swingline Loan, at such office, in like
money and funds, for the period commencing on the date of such Swingline Loan
until such Swingline Loan shall be paid in full, at the rates per annum and on
the dates provided in the Credit Agreement.
The Borrower hereby authorizes the Bank to record in its records the amount
of each Swingline Loan made to the Borrower by the Bank and all payments of
principal in respect thereof, which records shall, in the absence of manifest
error, be conclusive; provided, however, that the failure to make such notation
with respect to any such Swingline Loan or payment shall not limit or otherwise
affect the obligations of the Borrower under the Credit Agreement or this
Amended and Restated Swingline Note ("Swingline Note").
This Swingline Note is the "Swingline Note" referred to in the certain
Amended and Restated Credit Agreement dated as of January 22, 1999, among the
Borrower, the Bank, the other lenders named therein, and BankBoston, N.A., as
agent for such lenders (the "Agent") (such Amended and Restated Credit
Agreement, as the same may be amended or otherwise modified from time to time,
being referred to herein as the "Credit Agreement"). The Credit Agreement, among
other things, contains provisions for acceleration of the maturity of this
Swingline Note upon the happening of certain stated events and for prepayments
of Swingline Loans prior to the maturity of this Swingline Note upon the terms
and conditions specified in the Credit Agreement. Capitalized terms used in this
Swingline Note have the respective meanings assigned to them in the Credit
Agreement.
This Swingline Note shall be governed by and construed in accordance with
the laws of the State of Texas and the applicable laws of the United States of
America.
The Borrower and each surety, guarantor, endorser, and other party ever
liable for payment of any sums of money payable on this Swingline Note jointly
and severally waive notice, presentment, demand for payment, protest, notice of
protest and non-payment or dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, diligence in collecting, grace, and all
other formalities of any kind, and consent to all extensions without notice for
any period or periods of time and partial payments, before or after maturity,
and any impairment of any collateral securing this Swingline Note, all without
prejudice to the holder. The holder shall similarly have the right to deal in
any way, at any time, with one or more of the foregoing parties without notice
to any other party, and to grant any such party any extensions of time for
payment of any of said indebtedness, or to release any such party or release or
substitute part or all of the collateral securing this Swingline Note, or to
grant any other indulgences or forbearances whatsoever, without notice to any
other party and without in any way affecting the personal liability of any party
hereunder.
This Swingline Note amends and restates in its entirety that certain
Swingline Note dated as of June 5, 1997 executed by the Borrower in connection
with the Original Agreement and payable to the order of the Bank (the "Prior
Note"). This Swingline Note does not extinguish the indebtedness outstanding
under the Prior Note nor does it constitute a novation with respect to such
indebtedness. This Swingline Note evidences the indebtedness outstanding on the
date hereof under the Prior Note and additional Swingline Loans made under the
terms of the Credit Agreement on and after the date hereof.
DARLING INTERNATIONAL INC.
By: ----------------------------
Brad Phillips, Treasurer
2
EXHIBIT "C"
TO
DARLING INTERNATIONAL INC.
AMENDED AND RESTATED CREDIT AGREEMENT
Term Note
---------
AMENDED AND RESTATED TERM NOTE
$---------------- Dallas, Texas ----------, ----
FOR VALUE RECEIVED, the undersigned, DARLING INTERNATIONAL INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
- ----------------- (the "Bank"), at the Principal Office of the Agent, in lawful
money of the United States of America and in immediately available funds, the
principal amount of ----------------------- ($------------), on the dates and in
the principal amounts provided in the Credit Agreement referred to below, and to
pay interest on the unpaid principal amount of each such Term Loan, at such
office, in like money and funds, for the period commencing on the date hereof
such Term Loan until such Term Loan shall be paid in full, at the rates per
annum and on the dates provided in the Credit Agreement.
The Borrower hereby authorizes the Bank to record in its records the amount
of the Term Loan and Type of Accounts established thereunder and all Conversions
and payments of principal in respect thereto, which records shall, in the
absence of manifest error, be conclusive; provided, however, that the failure to
make such notation with respect to any such Term Loan, Account, or payment shall
not limit or otherwise affect the obligations of the Borrower under the Credit
Agreement or this Amended and Restated Term Note ("Term Note").
This Term Note is one of the "Term Notes" referred to in the certain
Amended and Restated Credit Agreement dated as of January 22, 1999, among the
Borrower, the Bank, the other lenders named therein, and BankBoston, N.A., as
agent for such lenders (the "Agent") (such Amended and Restated Credit
Agreement, as the same may be amended or otherwise modified from time to time,
being referred to herein as the "Credit Agreement"), and evidences term loans
made by the Bank under the Original Agreement which are now governed by the
Credit Agreement. The Credit Agreement, among other things, contains provisions
for acceleration of the maturity of this Term Note upon the happening of certain
stated events and for prepayments of Term Loans prior to the maturity of this
Term Note upon the terms and conditions specified in the Credit Agreement.
Capitalized terms used in this Term Note have the respective meanings assigned
to them in the Credit Agreement.
This Term Note shall be governed by and construed in accordance with the
laws of the State of Texas and the applicable laws of the United States of
America.
1
The Borrower and each surety, guarantor, endorser, and other party ever
liable for payment of any sums of money payable on this Term Note jointly and
severally waive notice, presentment, demand for payment, protest, notice of
protest and non-payment or dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, diligence in collecting, grace, and all
other formalities of any kind, and consent to all extensions without notice for
any period or periods of time and partial payments, before or after maturity,
and any impairment of any collateral securing this Term Note, all without
prejudice to the holder. The holder shall similarly have the right to deal in
any way, at any time, with one or more of the foregoing parties without notice
to any other party, and to grant any such party any extensions of time for
payment of any of said indebtedness, or to release any such party or release or
substitute part or all of the collateral securing this Term Note, or to grant
any other indulgences or forbearances whatsoever, without notice to any other
party and without in any way affecting the personal liability of any party
hereunder.
This Term Note amends and restates in its entirety that certain Term Note
dated as of June 5, 1997, executed by the Borrower in connection with the
Original Agreement and payable to the order of the Bank (the "Prior Note"). This
Term Note does not extinguish the indebtedness outstanding under the Prior Note
nor does it constitute a novation with respect to such indebtedness. This Term
Note evidences the indebtedness outstanding on the date hereof under the Prior
Note.
DARLING INTERNATIONAL INC.
By: ----------------------------
Brad Phillips, Treasurer
2
EXHIBIT "D"
TO
DARLING INTERNATIONAL INC.
AMENDED AND RESTATED CREDIT AGREEMENT
Subsidiary Guaranty
-------------------
GUARANTY AGREEMENT
------------------
(Subsidiaries)
WHEREAS, DARLING INTERNATIONAL INC., (the "Borrower") has entered into that
certain Amended and Restated Credit Agreement dated January 22, 1999, among the
Borrower, the lenders party thereto (each individually a "Bank" and
collectively, the "Banks") and BANKBOSTON, N.A. as agent for the Secured Parties
(the "Agent") (such Amended and Restated Credit Agreement, as it may hereafter
be amended or otherwise modified from time to time is referred to herein as the
"Credit Agreement"; capitalized terms used herein that are not otherwise defined
herein shall have the meanings therefor specified in the Credit Agreement);
WHEREAS, the execution and delivery of this Guaranty Agreement
("Agreement") which is dated as of the same date as the Credit Agreement is a
condition to the Agent's and the Banks' entering into the Credit Agreement and
making the extensions of credit thereunder; and
WHEREAS, the Borrower, directly or indirectly, owns beneficially and of
record more than fifty percent (50.0%) of the capital stock or other equity
interests of each of the Guarantors, the Borrower and each of the Guarantors are
engaged in related businesses, each of the Guarantors will derive direct and
indirect economic benefits from the Loans, and the execution and delivery of
this Agreement is necessary or convenient to the conduct, promotion, or
attainment of the business of each of the Guarantors.
NOW, THEREFORE, for valuable consideration, the adequacy and receipt of
which are hereby acknowledged, and in order to induce the Agent and the Banks to
make the Loans and issue the Letters of Credit under the Credit Agreement, each
of the undersigned Subsidiaries (individually a "Guarantor" and collectively the
"Guarantors"), hereby irrevocably and unconditionally guarantees to the Agent
and each Secured Party the full and prompt payment and performance of the
Guaranteed Indebtedness (hereinafter defined) when due, this Agreement being
upon the following terms:
1. The term "Guaranteed Indebtedness", as used herein means all of the
"Obligations", as defined in the Credit Agreement, and shall include,
without limitation, any and all post-petition interest and expenses
(including, without limitation, reasonable attorneys' fees as provided
in the Credit Agreement) whether or not allowed under any bankruptcy,
insolvency, or other similar law; provided that the Guaranteed
Indebtedness shall be limited, with respect to each Guarantor, to an
aggregate amount equal to the largest amount that would not render
such Guarantor's obligations hereunder subject to avoidance under
Section 544 or Section 548 of the United States Bankruptcy Code or
under any applicable state law relating to fraudulent transfers or
conveyances.
2. The Guarantors collectively desire to allocate among themselves, in a
fair and equitable manner, their obligations arising under this
Agreement. Accordingly, in the event any payment or distribution is
made by a
1
Guarantor under this Agreement (a "Funding Guarantor") that exceeds
its Fair Share (as defined below), that Funding Guarantor shall be
entitled to a contribution from each of the other Guarantors in the
amount of such other Guarantor's Fair Share Shortfall (as defined
below), with the result that all such contributions will cause each
Guarantor's Aggregate Payments (as defined below) to equal its Fair
Share. "Fair Share" means, with respect to a Guarantor as of any date
of determination, an amount equal to (a) the ratio of (i) the Adjusted
Maximum Amount (as defined below) with respect to such Guarantor to
(ii) the aggregate of the Adjusted Maximum Amounts with respect to all
Guarantors, multiplied by (b) the aggregate amount paid or distributed
on or before such date by all Funding Guarantors under this Agreement
in respect of the obligations guaranteed. "Fair Share Shortfall"
means, with respect to a Guarantor as of any date of determination,
the excess, if any, of the Fair Share of such Guarantor over the
Aggregate Payments of such Guarantor. "Adjusted Maximum Amount" means,
with respect to a Guarantor as of any date of determination, the
maximum aggregate amount of the obligations of such Guarantor under
this Agreement determined in accordance with the provisions hereof,
provided that, solely for purposes of calculating the "Adjusted
Maximum Amount" with respect to any Guarantor for purposes of this
paragraph 2, the assets or liabilities arising by virtue of any rights
to or obligations of contribution hereunder shall not be considered as
assets or liabilities of such Guarantor. "Aggregate Payments" means,
with respect to a Guarantor as of any date of determination, the
aggregate amount of all payments and distributions made on or before
such date by such Guarantor in respect of this Agreement (including,
without limitation, in respect of this paragraph 2). The amounts
payable as contributions hereunder shall be determined as of the date
- on which the related payment or distribution is made by the
applicable Funding Guarantor. The allocation among Guarantors of their
obligations as set forth in this paragraph 2 shall not be construed in
any way to limit the liability of any Guarantor hereunder.
3. This instrument shall be an absolute, continuing, irrevocable, and
unconditional guaranty of payment and performance, and not a guaranty
of collection, and each Guarantor shall remain liable on its
obligations hereunder until the payment and performance in full of the
Guaranteed Indebtedness. No set-off, counterclaim, recoupment,
reduction, or diminution of any obligation or any defense of any kind
or nature which the Borrower may have against the Agent, any Secured
Party, or any other party, or which any Guarantor may have against the
Borrower, the Agent, any Secured Party, or any other party, shall be
available to, or shall be asserted by, any Guarantor against the
Agent, any Secured Party, or any subsequent holder of the Guaranteed
Indebtedness or any part thereof or against payment of the Guaranteed
Indebtedness or any part thereof other than payment in full of the
Guaranteed Indebtedness.
2
4. If a Guarantor becomes liable for any indebtedness owing by the
Borrower to the Agent or any Secured Party by endorsement or
otherwise, other than under this Agreement, such liability shall not
be in any manner impaired or affected hereby, and the rights of the
Agent and the Secured Parties hereunder shall be cumulative of any and
all other rights that the Agent and the Secured Parties may ever have
against such Guarantor. The exercise by the Agent and the Secured
Parties of any right or remedy hereunder or under any other
instrument, or at law or in equity, shall not preclude the concurrent
or subsequent exercise of any other right or remedy.
5. In the event of default by the Borrower in payment or performance of
the Guaranteed Indebtedness, or any part thereof, when such Guaranteed
Indebtedness becomes due, whether by its terms, by acceleration, or
otherwise, the Guarantors shall, jointly and severally, promptly pay
the amount due thereon to the Agent, for the benefit of the Secured
Parties, without notice or demand, in lawful currency of the United
States of America, and it shall not be necessary for the Agent or any
Secured Party, in order to enforce such payment by any Guarantor,
first to institute suit or exhaust its remedies against the Borrower
or others liable on such Guaranteed Indebtedness, or to enforce any
rights against any collateral which shall ever have been given to
secure such Guaranteed Indebtedness. In the event such payment is made
by a Guarantor, then such Guarantor shall be subrogated to the rights
then held by the Agent and any Secured Party with respect to the
Guaranteed Indebtedness to the extent to which the Guaranteed
Indebtedness was discharged by such Guarantor and, in addition, upon
payment by such Guarantor of any sums to the Agent and any Secured
Party hereunder, all rights of such Guarantor against the Borrower,
any other guarantor, or any Collateral arising as a result therefrom
by way of right of subrogation, reimbursement, or otherwise shall in
all respects be subordinate and junior in right of payment to the
prior indefeasible payment in full of the Guaranteed Indebtedness.
6. If acceleration of the time for payment of any amount payable by the
Borrower under the Guaranteed Indebtedness is stayed upon the
insolvency, bankruptcy, or reorganization of the Borrower, all such
amounts otherwise subject to acceleration under the terms of the
Guaranteed Indebtedness shall nonetheless be payable by the Guarantors
hereunder forthwith on demand by the Agent.
7. Each Guarantor hereby agrees that its obligations under this Agreement
shall not be released, discharged, diminished, impaired, reduced, or
affected for any reason or by the occurrence of any event, including,
without limitation, one or more of the following events, whether
3
or not with notice to or the consent of any Guarantor: (a) the taking
or accepting of collateral as security for any or all of the
Guaranteed Indebtedness or the release, surrender, exchange, or
subordination of any collateral now or hereafter securing any or all
of the Guaranteed Indebtedness; (b) any partial release of the
liability of any Guarantor hereunder, or the full or partial release
of any other guarantor from liability for any or all of the Guaranteed
Indebtedness; (c) any disability of the Borrower, or the dissolution,
insolvency, or bankruptcy of the Borrower, any Guarantor, or any other
party at any time liable for the payment of any or all of the
Guaranteed Indebtedness; (d) any renewal, extension, modification,
waiver, amendment, or rearrangement of any or all of the Guaranteed
Indebtedness or any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (e) any adjustment, indulgence, forbearance, waiver, or
compromise that may be granted or given by the Agent or any Secured
Party to the Borrower, any Guarantor, or any other party ever liable
for any or all of the Guaranteed Indebtedness; (f) any neglect, delay,
omission, failure, or refusal of the Agent or any Secured Party to
take or prosecute any action for the collection of any of the
Guaranteed Indebtedness or to foreclose or take or prosecute any
action in connection with any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the
Guaranteed Indebtedness; (g) the unenforceability or invalidity of any
or all of the Guaranteed Indebtedness or of any instrument, document,
or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (h) any payment by the Borrower or any
other party to the Agent or any Secured Party is held to constitute a
preference under applicable bankruptcy or insolvency law or if for any
other reason the Agent or any Secured Party is required to refund any
payment or pay the amount thereof to someone else; (i) the settlement
or compromise of any of the Guaranteed Indebtedness; (j) the
non-perfection of any security interest or lien securing any or all of
the Guaranteed Indebtedness; (k) any impairment of any collateral
securing any or all of the Guaranteed Indebtedness; (l) the failure of
the Agent or any Secured Party to sell any collateral securing any or
all of the Guaranteed Indebtedness in a commercially reasonable manner
or as otherwise required by law; (m) any change in the corporate
existence, structure, or ownership of the Borrower; or (n) any other
circumstance which might otherwise constitute a defense available to,
or discharge of, the Borrower or any Guarantor other than payment in
full and performance of the Guaranteed Indebtedness.
8. Each Guarantor represents and warrants to the Agent and the Secured
Parties as follows:
(a) All representations and warranties relating to
4
it in the Credit Agreement or in any Loan Document (including,
without limitation, this Agreement) to which it is a party
(collectively the "Guarantor Loan Documents") are true and
correct in all material respects as of the date hereof and on
each date the representations and warranties hereunder or
thereunder are restated pursuant to any of the Loan Documents,
with the same force and effect as if such representations and
warranties had been made on and as of such date, except to the
extent that such representations and warranties relate
specifically to another date.
(b) The value of the consideration received and to be received by
each Guarantor as a result of the Borrower's and the Banks'
entering into the Credit Agreement and the execution and delivery
by each Guarantor of its Guarantor Loan Documents is reasonably
worth at least as much as its liability and obligation
thereunder, and such liability and obligation and the Credit
Agreement have benefitted and may reasonably be expected to
benefit it directly or indirectly.
(c) It has, independently and without reliance upon the Agent or any
Secured Party and based upon such documents and information as it
has deemed appropriate, made its own analysis and decision to
enter into its Guarantor Loan Documents.
(d) It has adequate means to obtain from the Borrower on a continuing
basis information concerning the financial condition and assets
of the Borrower and the other Obligated Parties and it is not
relying upon the Agent or any Secured Party to provide (and
neither the Agent nor any Secured Party shall have any duty to
provide) any such information to such Guarantor either now or in
the future.
9. Each Guarantor covenants and agrees that, as long as the Guaranteed
Indebtedness or any part thereof is outstanding or any Bank has any
commitment under the Credit Agreement, such Guarantor will comply with
all covenants set forth in the Credit Agreement specifically
5
applicable to such Guarantor.
10. When an Event of Default exists, the Agent and each Bank shall have
the right to set-off and apply against this Agreement or the
Guaranteed Indebtedness or both, at any time and without notice to any
Guarantor, any and all deposits (general or special, time or demand,
provisional or final, but excluding amounts held by such Guarantor in
escrow or trust for third parties other than the Borrower or an
Obligated Party) or other sums at any time credited by or owing from
the Agent and the Banks to any Guarantor whether or not the Guaranteed
Indebtedness is then due and irrespective of whether or not the Agent
or any Bank shall have made any demand under this Agreement. Each Bank
shall promptly notify the Borrower (with a copy to the Agent) after
any such set-off and application, provided that the failure to give
such notice shall not affect the validity of such set-off and
application. The rights and remedies of the Agent and the Banks
hereunder are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which the Agent or any
Bank may have.
11. Each Guarantor hereby agrees that the Subordinated Indebtedness (as
defined below) shall be subordinate and junior in right of payment to
the prior payment in full of all Guaranteed Indebtedness as herein
provided. The Subordinated Indebtedness shall not be payable, and no
payment of principal, interest, or other amounts on account thereof,
and no property or guarantee of any nature to secure or pay the
Subordinated Indebtedness shall be made or given, directly or
indirectly by or on behalf of any Debtor (as hereinafter defined) or
received, accepted, retained, or applied by any Guarantor unless and
until the Guaranteed Indebtedness shall have been paid in full in
cash; except that if no Event of Default exists, a Guarantor shall
have the right to receive regularly scheduled installments of
principal and interest on the Subordinated Indebtedness. Whenever any
Event of Default exists, no payments of principal or interest may be
made or given, directly or indirectly, by or on behalf of any Debtor
or received, accepted, retained, or applied by any Guarantor unless
and until the Guaranteed Indebtedness shall have been paid in full in
cash. If any sums shall be paid to a Guarantor by any Debtor or any
other Person on behalf of any Debtor on account of the Subordinated
Indebtedness when such payment is not permitted hereunder, such sums
shall be held in trust by such Guarantor for the benefit of the Agent
and the Secured Parties and shall forthwith be paid to the Agent
without affecting the liability of any Guarantor under this Agreement
and may be applied by the Agent against the Guaranteed Indebtedness in
accordance with the Credit Agreement. Upon the request of the Agent, a
Guarantor shall execute, deliver, and endorse to the Agent such
documentation as the Agent may request to perfect, preserve, and
enforce its rights hereunder. For purposes of this Agreement and with
6
respect to a Guarantor, the term "Subordinated Indebtedness" means all
indebtedness, liabilities, and obligations of the Borrower or any
Obligated Party other than such Guarantor (each of the Borrower and
such Obligated Parties are referred to individually herein as a
"Debtor") to such Guarantor, whether such indebtedness, liabilities,
and obligations now exist or are hereafter incurred or arise, or are
direct, indirect, contingent, primary, secondary, several, joint and
several, or otherwise, and irrespective of whether such indebtedness,
liabilities, or obligations are evidenced by a note, contract, open
account, or otherwise, and irrespective of the Person or Persons in
whose favor such indebtedness, obligations, or liabilities may, at
their inception, have been, or may hereafter be, created or the manner
in which they have been or may hereafter be acquired by such
Guarantor.
(a) Each Guarantor agrees that any and all Liens (including, without
limitation, any judgment liens), upon any Debtor's assets
securing payment of any Subordinated Indebtedness shall be and
remain inferior and subordinate to any and all Liens upon any
Debtor's assets securing payment of the Guaranteed Indebtedness
or any part thereof, regardless of whether such Liens in favor of
a Guarantor, the Agent, or any Secured Party presently exist or
are hereafter created or attached. Without the prior written
consent of the Agent, no Guarantor shall (i) file suit against
any Debtor or exercise or enforce any other creditor's right it
may have against any Debtor, or (ii) foreclose, repossess,
sequester, or otherwise take steps or institute any action or
proceedings (judicial or otherwise, including, without
limitation, the commencement of, or joinder in, any liquidation,
bankruptcy, rearrangement, debtor's relief, or insolvency
proceeding) to enforce any obligations of any Debtor to such
Guarantor or any Liens held by such Guarantor on assets of any
Debtor.
(b) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding
involving any Debtor as debtor, the Agent shall have the right to
prove and vote any claim under the Subordinated Indebtedness and
to receive directly from the receiver, trustee, or other court
custodian all dividends, distributions, and payments made in
respect of the Subordinated Indebtedness until the Guaranteed
Indebtedness
7
has been paid in full in cash. The Agent may apply any such
dividends, distributions, and payments against the Guaranteed
Indebtedness in accordance with the Credit Agreement.
(c) Each Guarantor agrees that all promissory notes, accounts
receivable, ledgers, records, or any other evidence of
Subordinated Indebtedness shall contain a specific written notice
thereon that the indebtedness evidenced thereby is subordinated
under the terms of this Agreement.
12. No amendment or waiver of any provision of this Agreement or consent
to any departure by any Guarantor therefrom shall in any event be
effective unless the same shall be in writing and signed by the Agent
and the Required Banks except as otherwise provided in the Credit
Agreement. No failure on the part of the Agent or any Secured Party to
exercise, and no delay in exercising, any right, power, or privilege
hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power, or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other
right, power, or privilege. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
13. Any acknowledgment or new promise, whether by payment of principal or
interest or otherwise and whether by the Borrower or others
(including, without limitation, any Guarantor), with respect to any of
the Guaranteed Indebtedness shall, if the statute of limitations in
favor of a Guarantor against the Agent or any Secured Party shall have
commenced to run, toll the running of such statute of limitations and,
if the period of such statute of limitations shall have expired,
prevent the operation of such statute of limitations.
14. This Agreement is for the benefit of the Agent and the Secured Parties
and their successors and assigns, and in the event of an assignment of
the Guaranteed Indebtedness, or any part thereof pursuant to Section
14.8 of the Credit Agreement, the rights and benefits hereunder, to
the extent applicable to the indebtedness so assigned, may be
transferred with such indebtedness. This Agreement is binding not only
on each Guarantor, but on each Guarantor's successors and assigns.
15. Each Guarantor recognizes that the Agent and the Banks are relying
upon this Agreement and the undertakings of each Guarantor hereunder
and under the other Loan Documents to which each is a party in making
extensions of credit to the Borrower under the Credit Agreement
8
and further recognizes that the execution and delivery of this
Agreement and the other Loan Documents to which each Guarantor is a
party is a material inducement to the Agent and the Banks in entering
into the Credit Agreement and continuing to extend credit thereunder.
Each Guarantor hereby acknowledges that there are no conditions to the
full effectiveness of this Agreement or any other Loan Document to
which it is a party.
16. Any notice or demand to any Guarantor under or in connection with this
Agreement or any other Loan Document to which it is a party shall be
deemed effective if given to the Guarantor, care of the Borrower, in
accordance with the notice provisions in the Credit Agreement.
17. The Guarantors shall, jointly and severally, pay in accordance with
the terms of the Credit Agreement on demand all reasonable attorneys'
fees and all other costs and expenses incurred by the Agent and the
Secured Parties in connection with the enforcement of this Agreement.
18. Each Guarantor hereby waives promptness, diligence, notice of any
default under the Guaranteed Indebtedness, demand of payment, notice
of acceptance of this Agreement, presentment, notice of protest,
notice of dishonor, notice of the incurring by the Borrower of
additional indebtedness, and all other notices and demands with
respect to the Guaranteed Indebtedness and this Agreement.
19. The Credit Agreement, and all of the terms thereof, are incorporated
herein by reference, the same as if stated verbatim herein, and each
Guarantor agrees that the Agent and the Secured Parties may exercise
any and all rights granted to any of them under the Credit Agreement
and the other Loan Documents without affecting the validity or
enforceability of this Agreement.
20. THIS AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT OF EACH GUARANTOR,
THE AGENT, AND THE SECURED PARTIES WITH RESPECT TO EACH GUARANTOR'S
GUARANTY OF THE GUARANTEED INDEBTEDNESS AND SUPERSEDES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS,
WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF,
INCLUDING WITHOUT LIMITATION, ALL THE GUARANTIES EXECUTED IN
CONNECTION WITH THE ORIGINAL AGREEMENT. THIS AGREEMENT IS INTENDED BY
EACH GUARANTOR, THE AGENT AND THE SECURED PARTIES AS A FINAL AND
COMPLETE EXPRESSION OF THE TERMS OF THE GUARANTY AGREEMENT, AND NO
COURSE OF DEALING AMONG ANY GUARANTOR, THE AGENT, AND THE SECURED
9
PARTIES, NO COURSE OF PERFORMANCE, NO TRADE PRACTICES, AND NO EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR
DISCUSSIONS OR OTHER EXTRINSIC EVIDENCE OF ANY NATURE SHALL BE USED TO
CONTRADICT, VARY, SUPPLEMENT, OR MODIFY ANY TERM OF THIS AGREEMENT.
THERE ARE NO ORAL AGREEMENTS AMONG ANY GUARANTOR, THE AGENT, AND THE
SECURED PARTIES.
21. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Texas and applicable laws of the United
States of America.
EXECUTED as of the date first written above.
GUARANTORS:
DARLING RESTAURANT SERVICES, INC.
ESTEEM PRODUCTS, INC.
INTERNATIONAL PROCESSING CORPORATION
INTERNATIONAL TRANSPORTATION
SERVICE, INC.
THE STANDARD TALLOW CORPORATION
By: -------------------------------------
Brad Phillips, Treasurer of each
Guarantor
10
EXHIBIT "E"
TO
DARLING INTERNATIONAL INC.
AMENDED AND RESTATED CREDIT AGREEMENT
Borrower Security Agreement
---------------------------
SECURITY AGREEMENT
------------------
(Darling International Inc.)
THIS SECURITY AGREEMENT ("Agreement") dated as of January 22, 1999 is by
and between DARLING INTERNATIONAL INC., a Delaware corporation (the "Debtor")
and BANKBOSTON, N.A., as agent for the Secured Parties (the "Agent").
R E C I T A L S:
----------------
The Debtor is entering into that certain Amended and Restated Credit
Agreement dated of even date herewith with the lenders party thereto (each
individually a "Bank" and collectively, the "Banks"), and the Agent as agent for
the Banks and the other Secured Parties (such agreement as it may be amended or
otherwise modified from time to time is referred to herein as the "Credit
Agreement"). The execution and delivery of this Agreement is a condition to the
Agent's and the Banks' entering into the Credit Agreement and making the
extensions of credit thereunder.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy, receipt, and sufficiency of which are
hereby acknowledged, and in order to induce the Agent and the Banks to make the
Loans and issue the Letters of Credit under the Credit Agreement, the parties
hereto hereby agree as follows:
ARTICLE I.
Definitions
-----------
Section A. Definitions. As used in this Agreement, the following terms have
the following meanings:
"Account" means any "account," as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor, and,
in any event, shall include, without limitation, each of the following,
whether now owned or hereafter acquired by the Debtor: (a) all rights of
the Debtor to payment for goods sold or leased or services rendered or the
license of Intellectual Property, whether or not earned by performance; (b)
all accounts receivable of the Debtor; (c) all rights of the Debtor to
receive any payment of money or other form of consideration; (d) all
security pledged, assigned, or granted to or held by the Debtor to secure
any of the foregoing; (e) all letters of credit securing, guaranties of, or
indemnifications with respect to, any of the foregoing; and (f) all rights
of the Debtor as an unpaid seller of goods or services, including, but not
limited to, all rights of stoppage in transit, replevin, reclamation, and
resale.
"Chattel Paper" means any "chattel paper," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by the
Debtor.
"Collateral" has the meaning specified in Section 2.1.
1
"Copyright License" means any written agreement now or hereafter in
existence granting to the Debtor any right to use any Copyright including,
without limitation, the agreements identified on Schedule 3.5.
"Copyrights" means all of the following: (a) copyrights, works
protectable by copyright, copyright registrations, and copyright
applications (with respect to the Debtor, including, without limitation,
those identified on Schedule 3.5); (b) all renewals, extensions, and
modifications thereof; (c) all income, royalties, damages, profits, and
payments relating to or payable under any of the foregoing; (d) the right
to sue for past, present, or future infringements of any of the foregoing;
and (e) all other rights and benefits relating to any of the foregoing
throughout the world.
"Copyright Security Agreement" means a security agreement in a form
reasonably satisfactory to the Agent pursuant to which the Debtor grants to
the Agent, for the benefit of the Secured Parties, a first priority
security interest in the Copyrights and the Copyright Licenses for purposes
of recording such security interest with any copyright office of any
Governmental Authority, as such agreement may hereafter be amended,
supplemented, or otherwise modified from time to time.
"Deposit Accounts" means any and all deposit accounts or other bank
accounts now owned or hereafter acquired or opened by the Debtor, and any
account which is a replacement or substitute for any of such accounts
including, without limitation, those deposit accounts identified on
Schedule 3.2.
"Document" means any "document," as such term is defined in Article or
Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor,
including, without limitation, all documents of title and all receipts
covering, evidencing, or representing goods now owned or hereafter acquired
by the Debtor.
"Equipment" means any "equipment," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor and,
in any event, shall include, without limitation, all machinery, furniture,
trailers, rolling stock, vessels, aircraft, and vehicles now owned or
hereafter acquired by the Debtor and any and all additions, substitutions,
and replacements of any of the foregoing, wherever located, together with
all attachments, components, parts, equipment, and accessories installed
thereon or affixed thereto.
"Financial Assets" means any "financial asset," as such term is
defined in Article or Chapter 8 of the UCC.
"Fixtures" means all goods that are "fixtures" as determined in
accordance with Article or Chapter 9 of the UCC and applicable real
property law, now owned or hereafter acquired by the Debtor and wherever
located, and all additions and accessions thereto and replacements
therefor.
2
"General Intangibles" means any "general intangibles," as such term is
defined in Article or Chapter 9 of the UCC, now owned or hereafter acquired
by the Debtor and, in any event, shall include, without limitation, each of
the following, whether now owned or hereafter acquired by the Debtor: (a)
all of the Debtor's Intellectual Property together with all of the Debtor's
trade secrets, proprietary information, customer lists, designs, and
inventions; (b) all of the Debtor's books, records, data, plans, manuals,
computer software, computer tapes, computer disks, computer programs,
source codes, object codes, and all rights of the Debtor to retrieve data
and other information from third parties; (c) all of the Debtor's contract
rights, including, without limitation, those relating to Raw Inventory
Routes and all of the Debtor's right, title, and interest in and to the
Lockbox Agreements which include, without limitation, all rights of the
Debtor to receive moneys due and to become due under or pursuant to such
agreements; (d) all of the Debtor's partnership interests, joint venture
interests, and certificates of deposit; (e) all rights of the Debtor to
payment under letters of credit and similar agreements; (f) all tax refunds
and tax refund claims of the Debtor; (g) all choses in action and causes of
action of the Debtor (whether arising in contract, tort, or otherwise and
whether or not currently in litigation) and all judgments in favor of the
Debtor; (h) all rights and claims of the Debtor under warranties and
indemnities; and (i) all rights of the Debtor under any insurance, surety,
or similar contract or arrangement.
"Instrument" means any "instrument," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by the
Debtor, and, in any event, shall include, without limitation, all
promissory notes, drafts, bills of exchange, and trade acceptances of the
Debtor, whether now owned or hereafter acquired.
"Intellectual Property" means the Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, and Trademark Licenses.
"Inventory" means any "inventory," as such term is defined in Article
or Chapter 9 of the UCC, now owned or hereafter acquired by the Debtor,
and, in any event, shall include, without limitation, each of the
following, whether now owned or hereafter acquired by the Debtor: (a) all
goods and other personal property of the Debtor that are held for sale or
lease or to be furnished under any contract of service; (b) all raw
materials, work-in-process, finished goods, inventory, supplies, and
materials of the Debtor; (c) all wrapping, packaging, advertising, and
shipping materials of the Debtor; (d) all goods that have been returned to,
repossessed by, or stopped in transit by the Debtor; and (e) all Documents
evidencing any of the foregoing.
"Investment Property" means any "investment property" as such term is
defined in Article or Chapter 9 of the UCC, now owned or hereafter acquired
by the Debtor, and, in any event, shall include, without limitation, each
of the following, whether now owned or hereafter acquired by the Debtor:
(a) any security, whether certificated or uncertificated; (b) any security
entitlement; (c) any securities account (including, without limitation,
those described on Schedule 3.2); (d) any commodity contract; and (e) any
commodity account (including, without limitation, those identified on
Schedule 3.2).
3
"Patent License" means any written agreement now or hereafter in
existence granting to the Debtor any right to use any invention on which a
Patent is in existence, including, without limitation, the agreements
identified on Schedule 3.5.
"Patents" means all of the following: (a) patents, patent
applications, and patentable inventions (with respect to the Debtor,
including, without limitation, those identified on Schedule 3.5), and all
of the inventions and improvements described and claimed therein; (b) all
continuations, divisions, renewals, extensions, modifications,
substitutions, continuations-in-part, or reissues of any of the foregoing;
(c) all income, royalties, profits, damages, awards, and payments relating
to or payable under any of the foregoing; (d) the right to sue for past,
present, and future infringements of any of the foregoing; and (e) all
other rights and benefits relating to any of the foregoing throughout the
world.
"Patent Security Agreement" means a security agreement in a form
reasonably satisfactory to the Agent pursuant to which the Debtor grants to
the Agent, for the benefit of the Secured Parties, a first priority
security interest in the Patents and the Patent Licenses for purposes of
recording such security interest with any patent office of any Governmental
Authority, as such agreement may hereafter be amended, supplemented, or
otherwise modified from time to time.
"Pledged Collateral" means the Pledged Shares and the Instruments
evidencing the obligations of the Debtor's subsidiaries to the Debtor
described in Section 2.1(c).
"Pledged Shares" means the shares of capital stock or certificates
evidencing other equity, partnership, or membership interests identified on
Schedule 1.1 or on Schedule 1 to an amendment to this Agreement in the form
of Exhibit A.
"Proceeds" means any "proceeds," as such term is defined in Article or
Chapter 9 of the UCC and, in any event, shall include, but not be limited
to, (a) any and all proceeds of any insurance, indemnity, warranty, or
guaranty payable to the Debtor from time to time with respect to any of the
Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to the Debtor from time to time in connection with any
requisition, confiscation, condemnation, seizure, or forfeiture of all or
any part of the Collateral by any Governmental Authority (or any Person
acting, or purporting to act, for or on behalf of any Governmental
Authority), (c) all Instruments, Documents, Chattel Paper and General
Intangibles received or arising in connection with a disposition of the
Collateral, and (d) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.
"Raw Inventory Route" means the right to obtain from third parties the
raw materials of the type utilized in the Debtor's business.
"Trademark License" means any written agreement now or hereafter in
existence granting to the Debtor any right to use any Trademark, including,
without limitation, the
4
agreements identified on Schedule 3.5.
"Trademarks" means all of the following: (a) trademarks, trade names,
corporate names, company names, business names, fictitious business names,
trade styles, service marks, logos, other business identifiers, prints and
labels on which any of the foregoing appear, all registrations and
recordings thereof, and all applications in connection therewith,
including, without limitation, registrations, recordings, and applications
in the United States Patent and Trademark Office or in any similar office
or agency of the United States, any state thereof or any other country or
any political subdivision thereof (with respect to the Debtor, including,
without limitation, those identified in Schedule 3.5); (b) all reissues,
extensions, and renewals thereof; (c) all income, royalties, damages, and
payments now or hereafter relating to or payable under any of the
foregoing, including, without limitation, damages or payments for past or
future infringements of any of the foregoing; (d) the right to sue for
past, present, and future infringements of any of the foregoing; (e) all
rights corresponding to any of the foregoing throughout the world; and (f)
all goodwill associated with and symbolized by any of the foregoing.
"Trademark Security Agreement" means a security agreement in a form
reasonably satisfactory to the Agent pursuant to which the Debtor grants to
the Agent, for the benefit of the Secured Parties, a first priority
security interest in the Trademarks and the Trademark Licenses for purposes
of recording such security interest with any patent office of any
Governmental Authority, as such agreement may be amended, supplemented, or
otherwise modified from time to time.
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas provided, that if, by applicable law, the perfection or effect of
perfection or non-perfection of the security interest created hereunder in
any Collateral is governed by the Uniform Commercial Code as in effect on
or after the date hereof in any other jurisdiction, "UCC" means the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or the effect of perfection
or non-perfection.
Section B. Other Definitional Provisions. Terms used herein that are
defined in the Credit Agreement and are not otherwise defined herein shall have
the meanings therefor specified in the Credit Agreement. References to
"Sections," "subsections," "Exhibits," and "Schedules" shall be to Sections,
subsections, Exhibits, and Schedules, respectively, of this Agreement unless
otherwise specifically provided. All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms defined. All
references to statutes and regulations shall include any amendments of the same
and any successor statutes and regulations. Terms used herein, which are defined
in the UCC, unless otherwise defined herein or in the Credit Agreement, shall
have the meanings determined in accordance with the UCC.
ARTICLE II.
Security Interest
-----------------
5
Section A. Security Interest. As collateral security for the prompt payment
and performance in full when due of the Obligations (whether at stated maturity,
by acceleration, or otherwise), the Debtor hereby pledges and assigns to the
Agent, and grants to the Agent, for the benefit of the Secured Parties, a
continuing lien on and security interest in, all of the Debtor's right, title,
and interest in and to the following, whether now owned or hereafter arising or
acquired and wherever located (collectively, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments, including, without limitation, or in addition, all
instruments evidencing indebtedness from time to time owed to the
Debtor by the Subsidiaries of the Debtor, and all interest, cash, and
other property from time to time received, receivable, or otherwise
distributed or distributable in respect of or in exchange for any or
all of such indebtedness;
(d) all General Intangibles;
(e) all Documents;
(f) all Equipment,
(g) all Fixtures;
(h) all Inventory;
(i) all Financial Assets and Investment Property, including, without
limitation or in addition, the following:
(1) all the Pledged Shares and the certificates representing the
Pledged Shares, and all dividends, cash, Instruments, and other
property from time to time received, receivable, or otherwise
distributed or distributable in respect of or in exchange for any
or all of the Pledged Shares; and
(2) all additional shares of capital stock of the Subsidiaries of the
Debtor from time to time owned or acquired by the Debtor in any
manner, and all dividends, cash, Instruments, and other property
from time to time received, receivable, or otherwise distributed
or distributable in respect of or in exchange for any or all of
such shares; provided however, not more than sixty-six percent
(66%) of the capital stock or other ownership interest in each
Subsidiary organized in a jurisdiction located outside the United
States of America is, or is required to be, pledged to the Agent
under any provision of this Section 2.1;
6
(j) all Deposit Accounts of the Debtor and all funds, certificates,
Documents, Instruments, checks, drafts, wire transfer receipts, and
other earnings, profits, or other Proceeds from time to time
representing, evidencing, deposited into, or held in the Deposit
Accounts; and
(k) all products and Proceeds, in cash or otherwise, of any of the
property described in the foregoing clauses (a) through (j).
Section B. Debtor Remains Liable. Notwithstanding anything to the contrary
contained herein, (a) the Debtor shall remain liable under the documentation
included in the Collateral to the extent set forth therein to perform all of its
duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (b) the exercise by the Agent of any of its rights or
remedies hereunder shall not release the Debtor from any of its duties or
obligations under such documentation, (c) the Agent shall not have any
obligation under any such documentation included in the Collateral by reason of
this Agreement, and (d) the Agent shall not be obligated to perform any of the
obligations of the Debtor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.
ARTICLE III.
Representations and Warranties
------------------------------
To induce the Agent and the Banks to enter into the Credit Agreement, the
Debtor represents and warrants to the Agent and the Secured Parties that:
Section A. Location of Equipment, Fixtures, and Inventory; Third Parties in
Possession. All of the Equipment, Fixtures, and Inventory are located at the
places specified in Schedule 3.1, except to the extent any such Equipment,
Fixtures, or Inventory is in transit or being repaired elsewhere. Schedule 3.1
correctly identifies, as of the date hereof, the landlords, if any, of each
location identified in Schedule 3.1. Except for the Persons identified on
Schedule 3.1 or Persons in possession of any such Collateral which is in transit
or is out for repair, as of the date hereof, no Person other than the Debtor and
the Agent has possession of any of the Collateral. None of the Collateral has
been located in any location within the past four months other than as set forth
on Schedule 3.1. The Debtor has provided the Agent with accurate descriptions of
all the real property on which the Fixtures are located.
Section B. Deposit, Commodity, and Securities Accounts. Schedule 3.2
correctly identifies all deposit, commodity, and securities accounts owned by
the Debtor and the institutions holding such accounts. No Person other than the
Debtor has control over any Investment Property.
Section C. Office Locations; Fictitious Names; Tax I.D. Number. The
principal place of business and the chief executive office of the Debtor is
identified on Schedule 3.1. Schedule 3.1 also sets forth all other places where
the Debtor keeps its books and records and all other locations where the Debtor
has a place of business. The Debtor does not do business
7
and has not done business during the past five (5) years under any trade name or
fictitious business name except as disclosed on Schedule 3.3. The Debtor's
United States Federal Income Tax I.D. Number is 36-2495346.
Section D. Delivery of Collateral. Except as provided by Section 4.2, the
Debtor has delivered to the Agent all Collateral the possession of which is
necessary to perfect the security interest of the Agent therein. All
certificates of title evidencing Equipment shall be delivered to the Agent to
the extent required by Section 9.10 of the Credit Agreement in accordance with
Section 9.10 of the Credit Agreement.
Section E. Intellectual Property. All Intellectual Property of the Debtor
that is registered with or for which an application for registration has been
filed with any Governmental Authority is identified on Schedule 3.5, and such
information is true, correct, and complete in all material respects as of the
date hereof.
ARTICLE IV.
Covenants
---------
The Debtor covenants and agrees with the Agent that until this Agreement
terminates as provided in Section 7.11 and subject to Section 9.10 of the Credit
Agreement:
Section A. Accounts. The Debtor shall, in accordance with its customary
business practices, endeavor to collect or cause to be collected from each
account debtor under its Accounts, as and when due, any and all amounts owing
under such Accounts. Without the prior written consent of the Agent, the Debtor
shall not, except in the ordinary course of business and in no event after the
occurrence and during the continuance of an Event of Default, (a) grant any
extension of time for any payment with respect to any of the Accounts, (b)
compromise, compound, or settle any of the Accounts for less than the full
amount thereof, (c) release, in whole or in part, any Person liable for payment
of any of the Accounts, (d) allow any credit or discount for payment with
respect to any Account other than trade or other customary discounts granted in
the ordinary course of business, or (e) release any Lien or guaranty securing
any Account unless such Account has been paid.
Section B. Further Assurances. At any time and from time to time, upon the
reasonable request of the Agent, and at the sole expense of the Debtor, the
Debtor shall, subject to the exceptions to the creation, perfection, and/or
protection of Liens permitted by Section 9.10 of the Credit Agreement, promptly
execute and deliver all such further agreements, documents, and instruments and
take such further action as the Agent may reasonably deem necessary or
appropriate to preserve and perfect its security interest in the Collateral and
carry out the provisions and purposes of this Agreement or to enable the Agent
to exercise and enforce its rights and remedies hereunder with respect to any of
the Collateral. Without limiting the generality of the foregoing, the Debtor
shall upon reasonable request by the Agent, or if no request is made by the
Agent with each of the reports delivered to the Agent pursuant to Section 9.1(b)
of the Credit Agreement, but subject to the exceptions to the creation,
perfection, and/or protection of Liens permitted by Section 9.10 of the Credit
Agreement, (a) execute and deliver to
8
the Agent such financing statements as the Agent may from time to time
reasonably require, (b) take such action within its control as the Agent may
reasonably request to permit the Agent to have control over any Investment
Property, (c) deliver to the Agent all Collateral the possession of which is
necessary to perfect the security interest therein, duly endorsed and/or
accompanied by duly executed instruments of transfer or assignment, all in form
and substance reasonably satisfactory to the Agent; except that, prior to the
occurrence of a Default and when the same shall no longer be continuing, the
Debtor may: (i) retain any letters of credit received in the ordinary course of
business; (ii) retain and utilize in the ordinary course of business all cash
dividends and interest paid in respect to any of the Pledged Collateral or any
other Investment Property; (iii) retain any Documents received and further
negotiated in the ordinary course of business, (d) immediately when any Default
exists, deliver any and all certificates of title, applications for title, or
similar evidence of ownership of Equipment and cause the Agent to be named as
lienholder thereon, provided that each of such items shall be immediately
delivered to the Agent whenever any Default exists, and (e) execute and deliver
to the Agent such other agreements, documents, and instruments as the Agent may
reasonably require to perfect and maintain the validity, effectiveness, and
priority of the Liens intended to be created by the Loan Documents.
Section C. Third Parties in Possession of Collateral. Except as may
otherwise be permitted by Section 9.10 of the Credit Agreement, the Debtor shall
not permit any third Person (including any warehouseman, bailee, agent,
consignee, or processor) to hold any Collateral (other than Equipment, Fixtures,
and Inventory in transit or out for repairs), unless the Debtor shall: (i)
notify such third Person of the security interests created hereby; (ii) instruct
such Person to hold all such Collateral for the Agent's account subject to the
Agent's instructions; and (iii) take all other actions the Agent reasonably
deems necessary to perfect and protect its and the Debtor's interests in such
Collateral pursuant to the requirements of the UCC of the applicable
jurisdiction where the warehouseman, bailee, consignee, agent, processor, or
other third Person is located (including, without limitation, the filing of a
financing statement in the proper jurisdiction naming the applicable third
Person as debtor and the Debtor as secured party and notifying the third
Person's secured lenders of the Debtor's interest in such Collateral before the
third Person receives possession of the Collateral in question).
Section D. Corporate Changes. The Debtor shall not change its name,
identity, or corporate structure, in any manner that might make any financing
statement filed in connection with this Agreement seriously misleading and the
Debtor shall not change its United States Federal Tax I.D. Number unless, in
each case, the Debtor shall have given the Agent thirty (30) days, or such
shorter time as the Agent may agree to, prior written notice thereof and shall
have taken all action reasonably deemed necessary or desirable by the Agent to
protect its Liens with the perfection and priority thereof required by the Loan
Documents. The Debtor shall not change its principal place of business, chief
executive office, or the place where it keeps its books and records unless it
shall have given the Agent thirty (30) days, or such shorter time as the Agent
may agree to, prior written notice thereof and shall have taken all action
deemed necessary or desirable by the Agent to cause its security interest in the
Collateral to be perfected with the priority required by the Loan Documents.
9
Section E. Equipment, Fixtures, and Inventory. Except as otherwise
permitted by Section 4.3, the Debtor shall keep the Equipment, Fixtures, and
Inventory at (or in transit to) any of the locations specified on Schedule 3.1
or, upon completion of an amendment to Schedule 3.1 and thirty (30) days, or
such shorter time as the Agent may agree to, prior written notice to the Agent,
at such other places within the United States of America where all action
required to perfect the Agent's security interest in such Collateral with the
priority required by the Loan Documents shall have been taken.
Section F. Warehouse Receipts Non-Negotiable. The Debtor agrees that if any
"negotiable" (as such term is used in Section 7.104 of the UCC) warehouse
receipt or receipt in the nature of a warehouse receipt is issued in respect of
any portion of the Collateral, such warehouse receipt or receipt in the nature
thereof shall be delivered to the Agent promptly after the Agent's request, or
if no request is made with the next report delivered to the Agent pursuant to
Section 9.1(b) of the Credit Agreement.
Section G. Voting Rights; Distributions, Etc. So long as no Event of
Default shall have occurred and be continuing, the Debtor shall be entitled to
exercise any and all voting and other consensual rights (including, without
limitation, the right to give consents, waivers, and notifications) pertaining
to any of the Pledged Collateral or any other Investment Property; provided,
however, that no vote shall be cast or consent, waiver, or ratification given or
action taken without the prior written consent of the Agent which would be
inconsistent with or violate any provision of this Agreement or any other Loan
Document.
Section H. Transfers and Other Liens; Additional Investments. Except as
permitted by the terms of the Credit Agreement or this Agreement, the Debtor
agrees that it will (i) cause each issuer of any of the Pledged Collateral not
to issue any shares of stock, notes, or other securities or instruments in
addition to or in substitution for any of the Pledged Collateral, (ii) subject
to Section 2.1(i)(2), pledge hereunder, immediately upon its acquisition
(directly or indirectly) thereof, any and all such shares of stock, membership
interests, notes, or instruments, and (iii) with each of the reports delivered
to Agent pursuant to Section 9.1(b) of the Credit Agreement, deliver to the
Agent an Amendment, duly executed by the Debtor, in substantially the form of
Exhibit A (an "Amendment"), in respect of such shares of stock, membership
interests, notes, or instruments, together with all certificates, notes, or
other instruments representing or evidencing the same. The Debtor hereby (x)
authorizes the Agent to attach each Amendment to this Agreement, and (y) agrees
that all such shares of stock, membership interests, notes, or instruments
listed on any Amendment delivered to the Agent shall for all purposes hereunder
constitute Pledged Collateral.
Section I. Intellectual Property Covenants. If, before the Obligations are
paid in full, the Debtor obtains any new Intellectual Property or rights thereto
or becomes entitled to the benefit of any Intellectual Property, the Debtor
shall give written notice thereof to the Agent with the next report delivered to
the Agent pursuant to Section 9.1(b) of the Credit Agreement, and upon Agent's
request shall execute and deliver, in form and substance reasonably satisfactory
to the Agent, a Copyright Security Agreement, Patent Security Agreement, or
Trademark Security Agreement, as applicable, describing any such new
Intellectual Property. The Debtor shall: (a)
10
prosecute diligently any copyright, patent, trademark, or license application at
any time pending which is material to the conduct of the Debtor's business; (b)
make application on all new copyrights, patents, and trademarks as reasonably
deemed appropriate by the Debtor; (c) preserve and maintain all rights in the
Intellectual Property that are material to the conduct of the Debtor's business;
and (d) at the request of the Agent, upon and after the occurrence and during
the continuance of an Event of Default, use its reasonable efforts to obtain any
consents, waivers, or agreements necessary to enable the Agent to exercise its
remedies with respect to the Intellectual Property. The Debtor shall not abandon
any pending copyright, patent, or trademark application, or Copyright, Patent,
Trademark, or any other Intellectual Property which is material to the conduct
of the Debtor's business without the prior written consent of the Agent.
Section J. Lockbox of Proceeds. The Debtor shall instruct all customers and
other Persons obligated with respect to all Accounts and other Collateral to
make all payments with respect thereto to a post office box or boxes in
accordance with the terms of one or more of the Lockbox Agreements or by wire
transfer to the Concentration Account or any account established pursuant to the
Lockbox Agreements. The Debtor shall irrevocably instruct each depository bank
who has entered into a Lockbox Agreement and who receives proceeds of the
Debtor's Accounts to remit all proceeds of such payments directly to the Agent
on a daily basis by automated clearing house debit directly for credit to the
Concentration Account or by wire transfer to the Agent for application in
accordance with the Credit Agreement. Any income received by the Agent with
respect to the balance in the Concentration Account shall remain, or be
deposited, in the Concentration Account for the credit of the Debtor. In
addition to the foregoing, the Debtor agrees that if any Proceeds (including,
without limitation, the payments made in respect of Accounts) shall be received
by it, the Debtor shall as promptly as possible deposit such Proceeds into the
Concentration Account or a deposit account established pursuant to a Lockbox
Agreement. Until so deposited, all such Proceeds shall be held in trust by the
Debtor for the benefit of the Agent and shall be segregated from any other funds
or property of the Debtor.
Section K. Deposit, Commodity, and Security Accounts. The Debtor shall not
open any new deposit, commodity, or security account or otherwise utilize any
such account other than the deposit accounts identified on Schedule 3.2 unless
the Debtor shall have given the Agent thirty (30) days, or such shorter time as
the Agent may agree to, prior written notice thereof and shall have taken all
action within its control deemed necessary or desirable by the Agent to cause
its security interest therein to be perfected with the priority required by the
Loan Documents. Prior to the occurrence and continuance of an Event of Default,
the Debtor may make purchases and sales of Investment Property and Financial
Assets in accordance with the restrictions on investments set out in the Credit
Agreement. After the occurrence and during the continuance of an Event of
Default the Debtor shall not be authorized to make purchases and sales of the
Investment Property or Financial Assets and the Debtor shall take such steps
within its control as the Agent may reasonably request to give the Agent control
over all Investment Property and Financial Assets. The Debtor will not give any
party other than the Agent control over any Investment Property or Financial
Assets.
ARTICLE V.
11
Rights of the Agent
-------------------
Section A. Power of Attorney. THE DEBTOR HEREBY IRREVOCABLY CONSTITUTES AND
APPOINTS THE AGENT AND ANY OFFICER OR AGENT THEREOF, WITH FULL POWER OF
SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL IRREVOCABLE
POWER AND AUTHORITY IN THE NAME OF THE DEBTOR OR IN ITS OWN NAME, TO TAKE, AFTER
THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT, ANY AND ALL ACTIONS AND
TO EXECUTE ANY AND ALL DOCUMENTS AND INSTRUMENTS WHICH THE AGENT AT ANY TIME AND
FROM TIME TO TIME DEEMS NECESSARY OR DESIRABLE TO ACCOMPLISH THE PURPOSES OF
THIS AGREEMENT AND, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE DEBTOR
HEREBY GIVES THE AGENT THE POWER AND RIGHT ON BEHALF OF THE DEBTOR AND IN THE
AGENT'S OWN NAME TO DO ANY OF THE FOLLOWING AFTER THE OCCURRENCE AND DURING THE
CONTINUANCE OF A DEFAULT, WITHOUT NOTICE TO OR THE CONSENT OF THE DEBTOR:
(i) to demand, sue for, collect, or receive, in the name of the Debtor
or in the Agent's own name, any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral and, in
connection therewith, endorse checks, notes, drafts, acceptances, money
orders, documents of title, or any other instruments for the payment of
money under the Collateral or any policy of insurance;
(ii) to pay or discharge taxes, Liens, or other encumbrances levied or
placed on or threatened against the Collateral;
(iii) to notify post office authorities to change the address for
delivery of mail of the Debtor to an address designated by the Agent and to
receive, open, and dispose of mail addressed to the Debtor;
(iv) (A) to direct account debtors and any other parties liable for
any payment under any of the Collateral to make payment of any and all
monies due and to become due thereunder directly to the Agent or as the
Agent shall direct (the Debtor agrees that if any Proceeds of any
Collateral (including, without limitation, payments made in respect of
Accounts) shall be received by the Debtor while a Default exists, the
Debtor shall promptly deliver such Proceeds to the Agent with any necessary
endorsements, and until such Proceeds are delivered to the Agent, such
Proceeds shall be held in trust by the Debtor for the benefit of the Agent
and shall not be commingled with any other funds or property of the
Debtor); (B) to receive payment of and receipt for any and all monies,
claims, and other amounts due and to become due at any time in respect of
or arising out of any Collateral; (C) to sign and endorse any invoices,
freight, or express bills, bills of lading, storage or warehouse receipts,
drafts against debtors, assignments, proxies, stock powers, verifications,
and notices in connection with accounts and other documents relating to the
Collateral; (D) to commence and prosecute any suit, action, or proceeding
at law or in equity in any court of competent jurisdiction to collect the
Collateral or any
12
part thereof and to enforce any other right in respect of any Collateral;
(E) to defend any suit, action, or proceeding brought against the Debtor
with respect to any Collateral; (F) to settle, compromise, or adjust any
suit, action, or proceeding described above and, in connection therewith,
to give such discharges or releases as the Agent may deem appropriate; (G)
to exchange any of the Collateral for other property upon any merger,
consolidation, reorganization, recapitalization, or other readjustment of
the issuer thereof and, in connection therewith, deposit any of the
Collateral with any committee, depositary, transfer agent, registrar, or
other designated agency upon such terms as the Agent may determine; (H) to
add or release any guarantor, indorser, surety, or other party to any of
the Collateral; (I) to renew, extend, or otherwise change the terms and
conditions of any of the Collateral; (J) to grant or issue any exclusive or
nonexclusive license under or with respect to any of the Intellectual
Property (subject to the rights of third parties under pre-existing
licenses); (K) to endorse the Debtor's name on all applications, documents,
papers, and instruments necessary or desirable in order for the Agent to
use any of the Intellectual Property; (L) to make, settle, compromise, or
adjust any claims under or pertaining to any of the Collateral (including,
without limitation, claims under any policy of insurance); and (M) to sell,
transfer, pledge, convey, make any agreement with respect to, or otherwise
deal with any of the Collateral as fully and completely as though the Agent
were the absolute owner thereof for all purposes, and to do, at the Agent's
option and the Debtor's expense, at any time, or from time to time, all
acts and things which the Agent deems necessary to protect, preserve,
maintain, or realize upon the Collateral and the Agent's security interest
therein.
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH SECTION 7.11.
The Agent shall be under no duty to exercise or withhold the exercise of any of
the rights, powers, privileges, and options expressly or implicitly granted to
the Agent in this Agreement, and shall not be liable for any failure to do so or
any delay in doing so. Neither the Agent nor any Person designated by the Agent
shall be liable for any act or omission or for any error of judgment or any
mistake of fact or law. This power of attorney is conferred on the Agent solely
to protect, preserve, maintain, and realize upon its security interest in the
Collateral. The Agent shall not be responsible for any decline in the value of
the Collateral and shall not be required to take any steps to preserve rights
against prior parties or to protect, preserve, or maintain any Lien given to
secure the Collateral.
Section B. Assignment by the Agent. The Agent and each Secured Party may at
any time assign or otherwise transfer all or any portion of their rights and
obligations under this Agreement and the other Loan Documents (including,
without limitation, the Obligations) to any other Person (with respect to the
Banks, to the extent permitted by, and upon the conditions contained in, the
Credit Agreement), and such Person shall thereupon become vested with all the
benefits thereof granted to the Agent and the Secured Parties, respectively,
herein or otherwise.
Section C. Possession; Reasonable Care. The Agent may, from time to time,
in its sole discretion, appoint one or more agents to hold physical custody, for
the account of the Agent, of any or all of the Collateral that the Agent has a
right to possess. The Agent shall be
13
deemed to have exercised reasonable care in the custody and preservation of the
Collateral in its possession if the Collateral is accorded treatment
substantially equal to that which the Agent accords its own property, it being
understood that the Agent shall not have any responsibility for (a) ascertaining
or taking action with respect to calls, conversions, exchanges, maturities,
tenders, or other matters relative to any Collateral, whether or not the Agent
has or is deemed to have knowledge of such matters, or (b) taking any necessary
steps to preserve rights against any parties with respect to any Collateral.
ARTICLE VI.
Default
-------
Section A. Rights and Remedies. If an Event of Default shall have occurred
and be continuing, the Agent shall have the following rights and remedies:
(i) In addition to all other rights and remedies granted to the Agent
in this Agreement or in any other Loan Document or by applicable law, the
Agent shall have all of the rights and remedies of a secured party under
the UCC (whether or not the UCC applies to the affected Collateral).
Without limiting the generality of the foregoing, the Agent may (A) without
demand or notice to the Debtor, collect, receive, or take possession of the
Collateral or any part thereof and for that purpose the Agent may enter
upon any premises on which the Collateral is located and remove the
Collateral therefrom or render it inoperable, and/or (B) sell, lease, or
otherwise dispose of the Collateral, or any part thereof, in one or more
parcels at public or private sale or sales, at the Agent's offices or
elsewhere, for cash, on credit, or for future delivery, and upon such other
terms as the Agent may deem commercially reasonable or otherwise as may be
permitted by law. The Agent shall have the right at any public sale or
sales, and, to the extent permitted by applicable law, at any private sale
or sales, to bid (which bid may be, in whole or in part, in the form of
cancellation of indebtedness) and become a purchaser of the Collateral or
any part thereof free of any right or equity of redemption on the part of
the Debtor, which right or equity of redemption is hereby expressly waived
and released by the Debtor. Upon the request of the Agent, the Debtor shall
assemble the Collateral and make it available to the Agent at any place
designated by the Agent that is reasonably convenient to the Debtor and the
Agent. The Debtor agrees that the Agent shall not be obligated to give more
than ten (10) days prior written notice of the time and place of any public
sale or of the time after which any private sale may take place and that
such notice shall constitute reasonable notice of such matters. The Agent
shall not be obligated to make any sale of Collateral if it shall determine
not to do so, regardless of the fact that notice of sale of Collateral may
have been given. The Agent may, without notice or publication, adjourn any
public or private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for sale, and such sale may,
without further notice, be made at the time and place to which the same was
so adjourned. Subject to the provisions of Section 14.1 of the Credit
Agreement, the Debtor shall be liable for all expenses of retaking,
holding, preparing for sale, or the like, and all reasonable attorneys'
fees, legal expenses, and other costs and expenses incurred by the Agent in
connection with the collection of the Obligations and the enforcement of
the Agent's rights under this
14
Agreement. The Debtor shall remain liable for any deficiency if the
Proceeds of any sale or other disposition of the Collateral applied to the
Obligations are insufficient to pay the Obligations in full. The Agent may
apply the Collateral against the Obligations as provided in the Credit
Agreement. The Debtor waives all rights of marshaling, valuation, and
appraisal in respect of the Collateral. Any cash held by the Agent as
Collateral and all cash proceeds received by the Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and then or at any time thereafter applied in whole or in
part by the Agent against, the Obligations in the order permitted by the
Credit Agreement. Any surplus of such cash or cash proceeds and interest
accrued thereon, if any, held by the Agent and remaining after payment in
full of all the Obligations and termination of all commitments and Letters
of Credit shall be promptly paid over to the Debtor or to whomsoever may be
lawfully entitled to receive such surplus; provided that the Agent shall
have no obligation to invest or otherwise pay interest on any amounts held
by it in connection with or pursuant to this Agreement.
(ii) The Agent may cause any or all of the Collateral held by it to be
transferred into the name of the Agent or the name or names of the Agent's
nominee or nominees.
(iii) The Agent may exercise any and all of the rights and remedies of
the Debtor under or in respect of the Collateral, including, without
limitation, any and all rights of the Debtor to demand or otherwise require
payment of any amount under, or performance of any provision of, any of the
Collateral and any and all voting rights and corporate powers in respect of
the Collateral. The Debtor shall execute and deliver (or cause to be
executed and delivered) to the Agent all such proxies and other instruments
as the Agent may reasonably request for the purpose of enabling the Agent
to exercise the voting and other rights which it is entitled to exercise
pursuant to this clause (iii) and to receive the dividends, interest, and
other distributions which it is entitled to receive hereunder.
(iv) The Agent may collect or receive all money or property at any
time payable or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so.
(v) On any sale of the Collateral, the Agent is hereby authorized to
comply with any limitation or restriction with which compliance is
necessary, in the view of the Agent's counsel, in order to avoid any
violation of applicable law or in order to obtain any required approval of
the purchaser or purchasers by any applicable Governmental Authority.
(vi) For purposes of enabling the Agent to exercise its rights and
remedies under this Section 6.1 and enabling the Agent and its successors
and assigns to enjoy the full benefits of the Collateral in each case as
the Agent shall be entitled to exercise its rights and remedies under this
Section 6.1, the Debtor hereby grants to the Agent an irrevocable,
nonexclusive license (exercisable without payment of royalty or other
15
compensation to the Debtor) to use, assign, license, or sublicense any of
the Intellectual Property, including in such license reasonable access to
all media in which any of the licensed items may be recorded or stored and
all computer programs used for the completion or printout thereof and
further including in such license such rights of quality control and
inspection as are reasonably necessary to prevent the Trademarks included
in such license from claims of invalidation. This license shall also inure
to the benefit of all successors, assigns, and transferees of the Agent.
The Debtor agrees not to sell or assign its interest in, or grant any
sublicense under, the license granted under this Section 6.1(vi) without
the prior written consent of the Agent, provided that this license shall
not prevent the sale by the Debtor of any Intellectual Property subject
thereto (if such sale is otherwise permissible under the Loan Documents and
the Credit Agreement) and such Intellectual Property shall be sold free and
clear of the license to the Agent granted hereunder.
Section B. Private Sales. The Debtor recognizes that the Agent may be
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the laws of any jurisdiction outside the
United States, the Securities Act of 1933, as amended from time to time (the
"Securities Act") and applicable state securities laws, but may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
who will be obliged to agree, among other things, to acquire such Collateral for
their own account for investment and not with a view to the distribution or
resale thereof. The Debtor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall, to the extent permitted by law, be deemed to have been
made in a commercially reasonable manner. Neither the Agent nor the Secured
Parties shall be under any obligation to delay a sale of any of the Collateral
for the period of time necessary to permit the issuer of such securities to
register such securities under the laws of any jurisdiction outside the United
States, under the Securities Act, or under any applicable state securities laws,
even if such issuer would agree to do so. The Debtor further agrees to do or
cause to be done, to the extent that the Debtor may do so under applicable law,
all such other reasonable acts and things as may be necessary to make such sales
or resales of any portion or all of the Collateral valid and binding and in
compliance with any and all applicable laws, regulations, orders, writs,
injunctions, decrees, or awards of any and all courts, arbitrators, or
governmental instrumentalities, domestic or foreign, having jurisdiction over
any such sale or sales, all at the Debtor's expense.
ARTICLE VII.
Miscellaneous
-------------
Section A. No Waiver; Cumulative Remedies. No failure on the part of the
Agent to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power, or privilege under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power,
or privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power, or privilege. The rights and remedies
provided for in this Agreement are cumulative and not exclusive of any rights
and remedies provided by law.
16
Section B. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Debtor, the Agent, the Secured Parties and their
respective successors and assigns, except that the Debtor may not assign any of
its rights or obligations under this Agreement without the prior written consent
of the Agent and the Banks and the Agent may not appoint a successor to the
Agent except in accordance with the Credit Agreement.
Section C. Amendment; Entire Agreement; Continuation of Liens. THIS
AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND
SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF
(INCLUDING WITHOUT LIMITATION, THAT CERTAIN PLEDGE AGREEMENT DATED JUNE 5, 1997
EXECUTED BY DEBTOR IN FAVOR OF AGENT IN CONNECTION WITH THE ORIGINAL AGREEMENT,
THE "EXISTING PLEDGE AGREEMENT") AND MAY NOT BE CONTRADICTED OR VARIED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS
OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
HERETO. This Agreement amends and restates in its entirety the Existing Pledge
Agreement but does not extinguish the Liens created thereunder which Liens are
continued under the terms hereof. The provisions of this Agreement may be
amended or waived only by an instrument in writing signed by the parties hereto
and the number of Banks required by the terms of Section 14.11 of the Credit
Agreement.
Section D. Notices. All notices and other communications provided for in
this Agreement shall be given or made in accordance with the Credit Agreement.
Section E. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas and applicable laws
of the United States of America.
Section F. Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
Section G. Survival of Representations and Warranties. All representations
and warranties made in this Agreement or in any certificate delivered pursuant
hereto shall survive the execution and delivery of this Agreement, and no
investigation by the Agent or any Secured Party shall affect the representations
and warranties or the right of the Agent and each Secured Party to rely upon
them.
Section H. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section I. Waiver of Bond. In the event the Agent seeks to take possession
of any or all of the Collateral by judicial process, the Debtor hereby
irrevocably waives any bonds and any
17
surety or security relating thereto that may be required by applicable law as an
incident to such possession, and waives any demand for possession prior to the
commencement of any such suit or action.
Section J. Severability. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section K. Termination. If all of the Obligations shall have been paid and
performed in full, all commitments of the Agent and the Secured Parties to the
Debtor shall have expired or terminated, and no Letters of Credit shall remain
outstanding, the Agent shall, at the sole expense of and upon the written
request of the Debtor, execute and deliver to the Debtor a proper instrument or
instruments acknowledging the release and termination of the security interests
created by this Agreement (and such other documentation as the Debtor shall
reasonably request to evidence such termination), and shall duly assign and
deliver to the Debtor (without recourse and without any representation or
warranty other than as to authorization to enter into such assignments and
releases) such of the Collateral as may be in the possession of the Agent and
has not previously been sold or otherwise applied pursuant to this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
THE DEBTOR:
----------
DARLING INTERNATIONAL INC.
By: -------------------------------------
Brad Phillips, Treasurer
THE AGENT:
BANKBOSTON, N.A., as the Agent for the
Secured Parties
By: -------------------------------------
Peter Haley, Vice President
18
Schedule 1.1
TO
SECURITY AGREEMENT
Pledged Shares
--------------
A. DOMESTIC SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------
Subsidiary Type of Stock Par Value No. of Shares Certificate No.
- ----------------------------------------------------------------------------------------------------------------
Insurance Company of Common No 400 4
Colorado, Inc.
- ----------------------------------------------------------------------------------------------------------------
Standard Rendering Company Common $100 10 6
- ----------------------------------------------------------------------------------------------------------------
The Van Iderstine Company Common $100 10 6
- ----------------------------------------------------------------------------------------------------------------
The Standard Tallow Class A Voting None 58.0656 A43
Corporation Common Stock
- ----------------------------------------------------------------------------------------------------------------
The Standard Tallow Class B Non None 72 B16
Corporation Voting Common
Stock
- ----------------------------------------------------------------------------------------------------------------
The Standard Tallow Class D Non None 52.2094 D46
Corporation Voting Common
Stock
- ----------------------------------------------------------------------------------------------------------------
The Standard Tallow Class E Voting None 75 E29
Corporation Common Stock
- ----------------------------------------------------------------------------------------------------------------
International Processing Class A Common $1.00 750,000 A 13
Corporation Stock
- ----------------------------------------------------------------------------------------------------------------
International Processing Class B Common $1.00 750,000 B 14
Corporation Stock
- ----------------------------------------------------------------------------------------------------------------
International Transportation Class A Common $100 7.5 26
Service, Inc. Stock
- ----------------------------------------------------------------------------------------------------------------
International Transportation Class B Common $100 7.5 6
Service, Inc. Stock
- ----------------------------------------------------------------------------------------------------------------
Darling Restaurant Services Inc. Common $.01 100 1
- ----------------------------------------------------------------------------------------------------------------
Eastern Shore Rendering Company Common None 100 1
- ----------------------------------------------------------------------------------------------------------------
Darling Properties, Inc. Common $100 10 7
- ----------------------------------------------------------------------------------------------------------------
Esteem Products Inc. Common Stock $.01 100 1
- ----------------------------------------------------------------------------------------------------------------
B. FOREIGN SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------
Subsidiary Type of Stock Par Value No. of Shares Certificate No.
- ----------------------------------------------------------------------------------------------------------------
Darling International Ltd. Common No 660 C2
Subsidiary Type of Stock Par Value No. of Shares Certificate No.
- ----------------------------------------------------------------------------------------------------------------
Darling Foreign Sales Corp. Common No 660 1
Subsidiary Type of Stock Par Value No. of Shares Certificate No.
- ----------------------------------------------------------------------------------------------------------------
SCHEDULE 3.1
TO
SECURITY AGREEMENT
Locations
---------
I. Principal Place of Business/Chief Executive Office:
---------------------------------------------------
==================================================================================================================
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
==================================================================================================================
251 O'Connor Ridge Blvd. Office Lease Massachusetts Mutual
Irving (Dallas County), Texas 75038-6532 Life Ins. Co.
c/o Cornerstone Real
Estate Advisors,
Inc.
311 South Wacker Drive Suite
980
Chicago, Illinois 60606
- ------------------------------------------------------------------------------------------------------------------
1200 Walnut Hill Lane Tax Audit Lease Same as above
Irving (Dallas County), Texas 75038 "Mass Mutual"
==================================================================================================================
II. Other Locations:
---------------
==================================================================================================================
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
==================================================================================================================
4826 Otay Valley Road Land Own None
Chula Vista, San Diego County, CA 91911
- ------------------------------------------------------------------------------------------------------------------
2354 S. Fruit Ave. Plant Own None
Fresno, Fresno County, CA 93706
- ------------------------------------------------------------------------------------------------------------------
2626 E. 25th Street Plant Own None
Los Angeles, Los Angeles County, CA 90058
- ------------------------------------------------------------------------------------------------------------------
2592 Lakeville Hwy Closed Own None
Petaluma, Sonoma County, CA 94592 Transfer
Station
- ------------------------------------------------------------------------------------------------------------------
8096 Miramar Road Transfer Lease Dowdy Brothers
San Diego, San Diego County, CA 92126 Station P.O. Box 3145
Escondido, CA 92025
- ------------------------------------------------------------------------------------------------------------------
429 Amador Street Plant Lease Port of San Francisco
Pier 92 Ferry Building
San Francisco, San Francisco County, CA 92124 San Francisco, CA 94111
- ------------------------------------------------------------------------------------------------------------------
11946 Carpenter Road Plant Own None
Turlock, Stanislaus County, CA 95313
- ------------------------------------------------------------------------------------------------------------------
1
==================================================================================================================
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
==================================================================================================================
Harriet & 26th Street Land Own None
Los Angeles, Los Angeles County, CA 90058
- ------------------------------------------------------------------------------------------------------------------
Terminal 5, Pier 92 Terminal Lease Port of San Francisco
San Francisco, San Francisco County, CA 92124 Ferry Building
San Francisco, CA 94111
- ------------------------------------------------------------------------------------------------------------------
Lambeth, Ontario, Canada NOL 1S0 Transfer Own None
Station
- ------------------------------------------------------------------------------------------------------------------
4056 MeadowBrook, Unit 125 Office Lease Old Oak Properties Inc.
London, Ontario, Middlesex County 148 Fullarton Street
Canada N6L 1C7 Suite 2000
Talbot Centre
London, Ontario, Canada
N6A 5P3
- ------------------------------------------------------------------------------------------------------------------
1360 Industrial Park Road Plant Own None
Mulberry, Polk County, Florida 33860
- ------------------------------------------------------------------------------------------------------------------
3rd Street between dead end and Moat Street Land Own None
Jacksonville, Duval County, Florida 32254
- ------------------------------------------------------------------------------------------------------------------
700 N.W. 57th Street Trap Grease Lease Berry Hill Limited Partnership
Ft. Lauderdale, Broward County, Florida 33309 John A. Fontaine
16 Via Lago
Boynton Beach, FL 33435
- ------------------------------------------------------------------------------------------------------------------
Highway 10 East Plant Own None
P.O. Box 179
Alton, Sioux County, IA 51003
- ------------------------------------------------------------------------------------------------------------------
1900 Murray Plant Own None
Sioux City, Woodbury County, IA 51111
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 269, Highway 30 Closed Own None
Tama, Tama County, IA 52339
- ------------------------------------------------------------------------------------------------------------------
18305 S. Cole Road Plant Own None
Boise, Ada County, ID 83705
- ------------------------------------------------------------------------------------------------------------------
East Kimberly Road Transfer Own None
Twin Falls, Twin Falls County, ID 83301 Station
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 55 Plant Own None
St. Louis, St. Clair County, IL 62071
- ------------------------------------------------------------------------------------------------------------------
3000 West Wireton Road Trap Grease Own None
Blue Island, Cook County, IL 60406
- ------------------------------------------------------------------------------------------------------------------
2
==================================================================================================================
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
==================================================================================================================
13153 South Francisco Avenue Equip. Lease Three H. Enterprises LLC
Blue Island, Cook County, IL 60406 Storage 2200 West 138th Street
Blue Island, IL 60406
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 399, 74 South Closed Own None
Old Franklyn Road
Shelbyville, Shelby County, IN 46176
- ------------------------------------------------------------------------------------------------------------------
Indianapolis Transfer Station Transfer Lease Avanti Development, Inc.
1353 South Drover Street Station 1315 South Drover Street
Indianapolis, Marion County, IN 46221 Indianapolis, IN 46221
- ------------------------------------------------------------------------------------------------------------------
685 Adams Street Plant Own None
Kansas City, Wyandotte County, KS 66105
- ------------------------------------------------------------------------------------------------------------------
Parish Road Transfer Lease Wilton Thibodeaux
Crowly, Acadia Parish, LA 75026 Station 114 Webb Street
Crowley, LA 70526
(verbal lease month to month)
- ------------------------------------------------------------------------------------------------------------------
2521 Bayou Road Transfer Lease L.A.B. Properties LLC
Harvey, Jefferson Parish, LA 70058 Station 2521 Bayou Road
Harvey, LA 70058
- ------------------------------------------------------------------------------------------------------------------
Portion of land in Section 7, Township 10 South, Transfer Own None
Range 1 East, Acadia Parish, LA Station
Land
- ------------------------------------------------------------------------------------------------------------------
RFD 1, Box 125 Plant Own None
Linkwood, Dorchester County, MD 21835
- ------------------------------------------------------------------------------------------------------------------
340 Tyler Street Transfer Own None
Carrollton, Saginaw County, MI 48724 Station
- ------------------------------------------------------------------------------------------------------------------
600 Jay Street Plant Own None
Coldwater, Branch County, MI 49036
- ------------------------------------------------------------------------------------------------------------------
Leigh Ave. & 9101-9185 Thaddeus Avenue Closed Own None
Detroit, Wayne County, MI 48209
- ------------------------------------------------------------------------------------------------------------------
27240 Haggerty Road Office Lease Liberty Property Trust
Suite E-15 26911 Northwestern Highway,
Farmingon Hills, Oakland County, MI 48331 Suite 205
Southfield, MI 48034
- ------------------------------------------------------------------------------------------------------------------
1980 Bristol Road Transfer Own None
Grand Rapids, Kent County, MI 49501 Station
- ------------------------------------------------------------------------------------------------------------------
3350 Greenfield Road Plant Own None
Melvindale aka Dearborn, Wayne County MI 48122
- ------------------------------------------------------------------------------------------------------------------
3
==================================================================================================================
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
==================================================================================================================
Rural Route 3, Box 1 Plant Own None
Blue Earth, Faribault County, MN 56013
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 387 Transfer Own None
Chatfield, Filmore County, MN 55923 Station
- ------------------------------------------------------------------------------------------------------------------
19 NW 14th Street Closed Own None
P.O. Box 12785 Transfer
New Brighton, Ramsey County, MN 55112 Station
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 343 Transfer Own None
Republic, Christian County, MO 65610 Station
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 50548 Plant Own None
Billings, Yellowstone County, MT 59105
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 64 Closed Own None
U.S. Highway 117
Goldsboro, Wayne County, NC 27533-0064
- ------------------------------------------------------------------------------------------------------------------
Rural Route 4 Plant Own None
Norfolk, Stanton and Madison Counties, NE 68701
- ------------------------------------------------------------------------------------------------------------------
1100 Monroe Avenue Esteem Lease Donovan J. & Lorraine Becker
Norfolk, Madison County, NE 68701 Ware-house 503 North 4th
P.O. Box 167
O'Neill, NE 68763
- ------------------------------------------------------------------------------------------------------------------
4125 Dahlman Avenue Plant Lease Hillary Corp.
Omaha, Douglas County, NE 68107 P.O. Box 37647
14344 Y Street
Omaha, Nebraska 68137
- ------------------------------------------------------------------------------------------------------------------
11414 W. Center Road, Suite 300 Office Lease Lund Company
Omaha, Douglas County, NE 68155 120 Regency Parkway
Suite 116
Omaha, NE 68114
- ------------------------------------------------------------------------------------------------------------------
Metropolitan Business Center Office Lease Metro Omaha Associates
11128 John Galt Blvd. c/o MEGA
Omaha, Douglas County, NE 68137 12046 Pacific Street
Omaha, NE 68154
- ------------------------------------------------------------------------------------------------------------------
3811 Dahlman Avenue Plant Own None
Omaha, Douglas County, NE 68107
- ------------------------------------------------------------------------------------------------------------------
4734 S. 27th Street Plant Own None
Omaha, Douglas County NE 68107
- ------------------------------------------------------------------------------------------------------------------
4
==================================================================================================================
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
==================================================================================================================
Rural Route 1 Plant Own None
Box 75
Wahoo, Saunders County, NE 68066
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 31 Plant Own None
West Point, Cuming County, NE 68788
- ------------------------------------------------------------------------------------------------------------------
825 Wilson Avenue Plant Own None
Newark, Essex County, NJ 07106
- ------------------------------------------------------------------------------------------------------------------
Warm Springs & Gibson Roads Transfer Own None
P.O. Box 91000 Station/
Henderson, Clark County, NV 89009 Grease
Plant
- ------------------------------------------------------------------------------------------------------------------
Nellis Industrial Park, Unit No. 1 Land Own None
North Las Vegas, Clark County, NV
- ------------------------------------------------------------------------------------------------------------------
2000 Williams Street Transfer Own None
Buffalo, Erie County, NY 14206 Station
- ------------------------------------------------------------------------------------------------------------------
11720 Chandlersville Transfer Own None
Chandlersville, Muskingum County, OH 43727 Station
- ------------------------------------------------------------------------------------------------------------------
3275 W. 65th Street Plant Own None
Cleveland, Cuyahoga County, OH 44102
- ------------------------------------------------------------------------------------------------------------------
1826 N. Gettysburg Road Land Own None
Dayton, Montgomery County, OH 45414
- ------------------------------------------------------------------------------------------------------------------
96 Arndt Court Trap Grease Lease H & A Properties
Fairfield, Butler County, OH 45104 P.O. Box 43297
Cincinnati, OH 45208-0297
- ------------------------------------------------------------------------------------------------------------------
North 5th Street Plant Own None
Collinsville, Tulsa County, OK 74021
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 82505 Plant Own None
Stockyard Station
Oklahoma City, OK 73148
- ------------------------------------------------------------------------------------------------------------------
P.O. Box 17201 Transfer Own None
Portland, Multnomah County OR 97217 Station
- ------------------------------------------------------------------------------------------------------------------
Matamoras, Pike County, Westfall Township, PA Land Own None
- ------------------------------------------------------------------------------------------------------------------
Langdon Road in Vogelbacher Industrial Park Closed Own None
Pittston aka Scranton, Luzerne County, PA 18641
- ------------------------------------------------------------------------------------------------------------------
Belgrade & Luzerne St. Transfer Own None
Philadelphia, Philadelphia County, PA 19137 Station
- ------------------------------------------------------------------------------------------------------------------
5
==================================================================================================================
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
==================================================================================================================
RD 1, Box 77 Transfer Own None
Potato Garden Run Rd. Station
Imperial
Pittsburgh, Allegheny County, PA 15126
- ------------------------------------------------------------------------------------------------------------------
US Highway 81 Transfer Lease James & Debra Bohlen
Freeman, Station Rural Route 3, Box 49
Hutchinson County, SD 27538 Freeman, SD 57029
- ------------------------------------------------------------------------------------------------------------------
515 Real Industrial Blvd. Transfer Lease Twin Oaks Associates
Austin, Travis County, TX 78745 Station P.O. Box 668
Austin, TX 78767
(verbal lease month to month)
- ------------------------------------------------------------------------------------------------------------------
Rabb Road Transfer Own None
Corpus Christi aka Robbstown Station
Nueces County Texas 78380
- ------------------------------------------------------------------------------------------------------------------
1240 Sargent Rd. Plant Own None
Dallas, Dallas County, TX 75216
- ------------------------------------------------------------------------------------------------------------------
3701 Schalker St. Plant Own None
Houston, Harris County, TX 77226
- ------------------------------------------------------------------------------------------------------------------
1712 75th Street Plant Own None
Houston, Harris County, TX 77011
- ------------------------------------------------------------------------------------------------------------------
8394 FM Hwy 380 Plant Own None
P.O. Box 631
San Angelo, Tom Green County, TX 76902
- ------------------------------------------------------------------------------------------------------------------
8423 Quintanta Transfer Own None
P.O. Drawer DD Station
San Antonio, Bexar County, TX 78211
- ------------------------------------------------------------------------------------------------------------------
NE Loop 323 Transfer Own None
Tyler, Smith County, TX 75710 Station
- ------------------------------------------------------------------------------------------------------------------
I-10 Frontage Land Own None
Big Spring, Howard County, TX
- ------------------------------------------------------------------------------------------------------------------
1301 Cottonbelt Closed Own None
Waco, McLennan County, TX Transfer
Station
- ------------------------------------------------------------------------------------------------------------------
Bordwine Road, State Route 625 Closed Own None
Bristol, City of Bristol, VA 24202 Transfer
Station
- ------------------------------------------------------------------------------------------------------------------
6
==================================================================================================================
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
==================================================================================================================
Tracts A, E & F Land Own None
Lynchburg, City of Lynchburg, VA
- ------------------------------------------------------------------------------------------------------------------
1031 Midvale Rd Transfer Own None
Sunnyside, Yakima County, WA 98944 Station
- ------------------------------------------------------------------------------------------------------------------
2041 Marc Avenue Plant Lease Port of Tacoma
Tacoma, Pierce County, WA 98421 P.O. Box 1837
Tacoma WA 98401
- ------------------------------------------------------------------------------------------------------------------
Rt. 3 Closed Own None
Corner of Hwy K & I-45 Transfer
Fon Du Lac/Empire, Fon Du Lac County, WI 54835 Station
- ------------------------------------------------------------------------------------------------------------------
131 S. 7th Street Closed Own None
Milwaukee, Milwaukee County, WI 53233
==================================================================================================================
III. THIRD PARTIES IN POSSESSION
==================================================================================================================
Party Location of Property Capacity in Which Held
- ------------------------------------------------------------------------------------------------------------------
Mortimer & Wallace, Inc. Terminal Berth 187 Third party warehouse for spot
2422 E. Sepulveda Wilmington, Los Angeles County, CA basis inventory collection and
Long Beach, CA 90810 90744 shipping
- ------------------------------------------------------------------------------------------------------------------
Stolthaven (Chicago) Inc. 12200 South Stony Island Avenue Third party warehouse for spot
12200 S. Stony Island Avenue Chicago, IL 60633 basis inventory collection and
Chicago, IL 60633 shipping
- ------------------------------------------------------------------------------------------------------------------
Jacob Stern Port of Houston Third party warehouse for spot
Port of Houston Houston, TX basis inventory collection and
Houston, TX shipping
- ------------------------------------------------------------------------------------------------------------------
Hudson Tank Terminal 173 Export Street Third party warehouse for spot
173 Export Street Port Newark, NJ 07114 basis inventory collection and
Port Newark, NJ 07114 shipping
- ------------------------------------------------------------------------------------------------------------------
Pacific Northwest Terminal Inc. 1749 Marine View Drive Third party warehouse for spot
1749 Marine View Drive Tacoma, WA 98422 basis inventory collection and
Tacoma, WA 98422 shipping
- ------------------------------------------------------------------------------------------------------------------
Farmland Industries, Inc. (Muncie) 6833 Griffin Road Toll Milling Agreement
6833 Griffin Road Kansas City, Kansas 66111
Kansas City, Kansas 66111
- ------------------------------------------------------------------------------------------------------------------
MFA Incorporated (Feed Mill) MFA Incorporated (Feed Mill) Toll Milling Agreement
429 Cherokee Street 429 Cherokee Street
St. Joseph, Buchanan County, Missouri St. Joseph, Missouri
64504-1426
==================================================================================================================
7
SCHEDULE 3.2
TO
SECURITY AGREEMENT
Deposit, Commodity, and Security Accounts
-----------------------------------------
========================================================================================
Account Type Institution Name and Address Account Number
- ----------------------------------------------------------------------------------------
Master-Corporate Concentration BankBoston, N.A. 550-09780
Boston, MA
- ----------------------------------------------------------------------------------------
Corporate Depository Comerica Bank-TX 1880098536
Dallas, TX
- ----------------------------------------------------------------------------------------
Corporate Lockbox Comerica Bank-TX 891516
Dallas, TX
- ----------------------------------------------------------------------------------------
Corporate Depository Chase Bank-TX 43509121617
Dallas, TX
- ----------------------------------------------------------------------------------------
Corporate Investment Chase Bank-TX 331616
Houston, TX
- ----------------------------------------------------------------------------------------
Corporate Disbursement Harris Trust & Savings 237-611-9
Chicago, IL
- ----------------------------------------------------------------------------------------
Plant Payable Disbursement Harris Trust & Savings 237-608-5
Chicago, IL
- ----------------------------------------------------------------------------------------
Manual Plant Payable Harris Trust & Savings 237-597-0
Disbursement Chicago, IL
- ----------------------------------------------------------------------------------------
Co-Wide Payroll Disbursement Harris Trust & Savings 237-598-8
Chicago, IL
- ----------------------------------------------------------------------------------------
Flexible Benefit Plan-GP Harris Trust & Savings 237-612-7
Administered Chicago, IL
- ----------------------------------------------------------------------------------------
Eastern Region Concentration Harris Trust & Savings 237-563-2
Chicago, IL
- ----------------------------------------------------------------------------------------
Eastern Region Lockboxes Harris Trust & Savings Bank Cleveland 71813
Darling Int'l Inc. Coldwater 71778
P.O. Box xxxxxx Detroit 71737
Chicago, IL 60694-xxxx Linkwood 71885
Milwaukee 71878
Newark 71894
Omaha Blend 95921
Kansas City 71540
St. Louis 71668
Norfolk 95644
Sioux City 95363
Omaha 95251
Alton 95078
Blue Earth 95538
Tulsa 71076
Esteem 33284
- ----------------------------------------------------------------------------------------
1
- ----------------------------------------------------------------------------------------
Torvac Inc. Depository First Nat'l Bank of Blue Island 2100158011
- ----------------------------------------------------------------------------------------
Eastern Region Small Accounts Harris Trust & Savings Locations:
Depository Lockbox 780 31 - Cleveland
Chicago, IL 60690-0780 28 - Buffalo
Attn: Mail Teller #xx 21 - Detroit
(Specify Location Code) 70 - Coldwater
01 - Newark
26 - Milwaukee
82 - Region Office
81 - Feed Fat
52 - Ft. Lauderdale
57 - Tampa
- ----------------------------------------------------------------------------------------
Western Region Concentration Wells Fargo Bank 4159715879
Dallas, TX
- ----------------------------------------------------------------------------------------
Western Region Lockbox Wells Fargo Bank 4159291723
Concentration Los Angeles, CA
- ----------------------------------------------------------------------------------------
Western Region Lockboxes Wells Fargo Bank: California & Nevada:
Remittance Processing Billings 078980
1200 West 7th Street Boise 078979
MAC2801-525 Fresno 077297
Los Angeles, CA 90017-2361 Las Vegas 077329
Los Ang. 077298
San Fran 077299
Tacoma 077993
Turlock 077330
Wells Fargo Bank: Texas:
Darling Int'l Inc. Dallas 200196
P.O. Box 200xxx Houston
Dallas, TX 75320 Rendering 200198
Grease 200201
San Angelo 200207
========================================================================================
2
SCHEDULE 3.3
TO
SECURITY AGREEMENT
Trade and Other Names
---------------------
I. TRADE AND ASSUMED NAMES
a. Standard Rendering Company
b. The Van Iderstine Company
c. Wommack Grease Service, Inc.
d. Darling Restaurant Services
e. Esteem Products Inc.
f. Torvac, Inc.
g. Midwest Recycling
h. Greasco
i. Enduro
j. Aaron Corporation of Nebraska
k. Aaron-Omaha
l. Aaron South
m. Aaron Wahoo
n. Aaron West Point
o. A.W. Stadler, Inc.
p. Darling-Nevada Rendering, Inc.
q. Eastern Shores Rendering Company
r. Nevada Star Company
s. Omaha Edible Oils
t. Royal Tallow & Soap Company
SCHEDULE 3.5
TO
SECURITY AGREEMENT
Intellectual Property
---------------------
=============================================================================================================
PATENTS
=============================================================================================================
Owner of Record Patent No. Issue Date Title Expiration Country
Date of
Registration
=============================================================================================================
Darling International Inc. 4232425 11/11/80 Method of producing 11/30/99 U.S.
stabilized bone
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. 5433846 07/18/95 Grease-Trap wastewater 11/03/2012 U.S.
treatment system
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. 5437785 08/01/95 Apparatus for dissolved 09/30/2012 U.S.
gas flotation in
anaerobic wastewater
treatment
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. 5492630 02/20/96 Method and apparatus for 02/20/2013 U.S.
dissolved air flotation
with aeration
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. 5543050 08/06/96 Grease trap wastewater 08/06/2013 U.S.
treatment system
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. 5609193 03/11/97 Automated container for 08/17/2015 U.S.
waste grease
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. 5812060 09/22/98 Automated waste cooking 05/01/2017 U.S.
grease recycling tank
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. SN2202745 08/16/96 Automated container for pending Canada
waste grease
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. SN972812 08/16/96 Automated container for pending Mexico
waste grease
- -------------------------------------------------------------------------------------------------------------
Darling-Delaware Co., Inc. 4361590 11/30/82 Process for separating 11/30/99 U.S.
and recovering fat and
proteinaceous material
from raw organic material
=============================================================================================================
1
=============================================================================================================
TRADEMARKS
=============================================================================================================
Owner of Trademark Serial No. Filing Country
Record Date of
Registration
=============================================================================================================
Darling International Inc. DAIRY BOSS 74/359,703 02/17/93 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. HI EN 74/359,705 02/17/93 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. BEEF BOSS 74/359,706 02/17/93 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Miscellaneous Design 517,063 11/01/49 U.S.
(Triangle)
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg 2,149,597 04/07/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar 2000 2,076,211 07/01/97 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Dairy Boss 2,144,802 03/17/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Darling 118,391 09/04/17 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem 2,173,792 07/14/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Miscellaneous Design 2,204,928 11/24/98 U.S.
(New Triangle Design)
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Promeal 2,182,756 08/18/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Aqua Plus SN75/511,109 06/30/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. C-Food SN75/424, 531 01/27/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. C-Meal SN75/471,207 04/21/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar SN74/694,582 06/27/95 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Darling Restaurant SN75/511,204 06/30/98 U.S.
Services
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus SN75/270,633 03/25/97 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Potency Pass SN75/511,108 06/30/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Sea Meal SN75/510,650 06/30/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Sweet Pass SN75/511,239 06/30/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. The Grease Team SN75/510,949 06/30/98 U.S.
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 1,597,125 04/24/96 Argentina
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 575,471 05/02/96 Benelux
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 500,975 01/12/98 Chile
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 06961/1996 12/20/96 Denmark
- -------------------------------------------------------------------------------------------------------------
1
=============================================================================================================
Owner of Trademark Serial No. Filing Country
Record Date of
Registration
=============================================================================================================
Darling International Inc. Boss Hogg* 95/980514 05/13/96 France
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 3,927,762 03/04/96 Germany
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 369,678 10/02/96 Indonesia
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 516,172 01/31/96 Mexico
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 101,270 09/04/98 Poland
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 72541 08/16/96 Taiwan
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 147,080 10/16/96 Russia
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg* 2,025,016 03/01/96 Gr. Britain
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 163,395 04/01/96 Austria
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 587,811 12/02/96 Benelux
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 03024/1997 07/18/97 Denmark
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 95602102 07/19/96 France
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 39550233 04/09/96 Germany
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 2,049,223 12/06/96 Gr. Britain
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 127,640 03/17/98 Greece
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 200,963 06/11/98 Ireland
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 4,113,142 02/13/98 Japan
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 9698 04/03/96 Liechtenstein
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 96.16682 02/05/95 Monaco
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 314,301 09/13/96 Portugal
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 2,003,549 12/20/96 Spain
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar** 312,437 04/26/96 Sweden
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar & Design ** 447,992 01/05/98 Switzerland
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem 1,180,256 06/07/98 China
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem 412,959 06/05/97 Indonesia
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem 405,492 06/19/98 Korea
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem 549,373 05/27/97 Mexico
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus 10773/1998 10/21/98 Hong Kong
- -------------------------------------------------------------------------------------------------------------
2
=============================================================================================================
Owner of Trademark Serial No. Filing Country
Record Date of
Registration
=============================================================================================================
Darling International Inc. Peptide Plus 424,597 10/09/98 Korea
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus 562,438 10/31/97 Mexico
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Promeal* 403,800 11/07/97 Indonesia
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Promeal (Class 31)* 556,525 08/28/97 Mexico
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Promeal (Class 5)* 556,526 08/28/97 Mexico
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 163,198 03/25/96 Austria
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 587,810 12/02/96 Benelux
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 00742/1996 02/02/96 Denmark
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 95/602,106 05/31/96 France
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 39550234 06/13/96 Germany
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 2,049,225 08/23/96 Gr. Britain
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 169,156 03/25/97 Ireland
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 9699 04/03/96 Liechtenstein
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 96.16681 02/21/96 Monaco
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 314,300 09/13/96 Portugal
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 2,003,550 06/05/96 Spain
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 312,436 04/26/96 Sweden
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Trapper One* 442,825 06/20/97 Switzerland
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Boss Hogg SN787,059 06/27/95 Canada
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. C-Meal No Serial No. Yet New Mexico
application
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. C-Meal No Serial No. Yet New Philippines
application
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. C-Meal No Serial No. Yet New Thailand
application
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. CleanStar* RM95C/005929 12/20/95 Italy
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Darling Restaurant No Serial No. Yet New Canada
Services application
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem SN844,186 5/05/97 Canada
- -------------------------------------------------------------------------------------------------------------
3
=============================================================================================================
Owner of Trademark Serial No. Filing Country
Record Date of
Registration
=============================================================================================================
Darling International Inc. Esteem SN106,747 05/05/97 Egypt
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem SN112834/97 05/06/97 Japan
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem SN97-05509 04/29/97 Malaysia
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem SN120,514 05/09/97 Philippines
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem SN86-021753 05/02/97 Taiwan
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Esteem SN333,854 05/08/97 Thailand
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus SN855,053 09/07/97 Canada
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus SN970092164 09/02/97 China
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus SN108,623 07/26/97 Egypt
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus SND97-19074 09/08/97 Indonesia
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus SN153177/97 09/01/97 Japan
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus SN97-13765 09/24/97 Malaysia
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus SN125,036 09/24/97 Philippines
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus SN86-48943 09/20/97 Taiwan
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Peptide Plus No Serial No. Yet Thailand
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Promeal SN830,370 11/29/96 Canada
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. Sea Meal No Serial No. Yet New Canada
application
- -------------------------------------------------------------------------------------------------------------
Darling International Inc. The Grease Team No Serial No. Yet New Canada
application
=============================================================================================================
* Company Intellectual Property Counsel has been directed to abandon these
trademarks and to incur no further expenses to protect the marks because
they are not currently being used and there are no plans to use them in the
subject country.
** The Company is not currently using these marks, has no plant to use them in
the subject country and plans to direct that they be abandoned.
4
EXHIBIT A
TO
SECURITY AGREEMENT
AMENDMENT TO SECURITY AGREEMENT
This Amendment, dated _______________, _____, is delivered pursuant to
Section 4.8 of the Security Agreement (as herein defined) referred to below. The
undersigned hereby agrees that this Amendment may be attached to the Security
Agreement dated as of January 22, 1999, between the undersigned and BankBoston,
N. A., as agent for the ratable benefit of the Secured Parties referred to
therein (the "Security Agreement"), and that the shares of stock, membership
interests, notes, or other instruments listed on Schedule 1 annexed hereto shall
be and become part of the Collateral referred to in the Security Agreement and
shall secure payment and performance of all Obligations as provided in the
Security Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings therefor provided in the Security Agreement.
DARLING INTERNATIONAL INC.
By:
------------------------
Name:
----------------------
Title:
--------------------
Schedule 1
to
Amendment to Security Agreement
Percentage of
Stock Number Outstanding Shares
Stock Issuer Class of Stock Certificate No(s). Par Value of Shares Shares
------------ -------------- ------------------ --------- --------- ------------------
EXHIBIT "F"
TO
DARLING INTERNATIONAL INC.
AMENDED AND RESTATED CREDIT AGREEMENT
Subsidiary Security Agreement
-----------------------------
SECURITY AGREEMENT
(Subsidiary)
THIS SECURITY AGREEMENT ("Agreement") dated as of January 22, 1999 is
by and among each of the undersigned Subsidiaries (each a "Debtor" and
collectively the "Debtors") and BANKBOSTON, N.A., as agent for the Secured
Parties (the "Agent").
R E C I T A L S:
DARLING INTERNATIONAL INC. (the "Borrower") is entering into that
certain Amended and Restated Credit Agreement dated of even date herewith with
the lenders party thereto (each individually a "Bank" and collectively, the
"Banks") and the Agent, as agent for the Banks and the other Secured Parties
(such agreement as it may be amended or otherwise modified from time to time is
referred to herein as the "Credit Agreement"). The execution and delivery of
this Agreement is a condition to the Agent and the Banks' entering into the
Credit Agreement and making the extensions of credit thereunder.
WHEREAS, the Borrower, directly or indirectly, owns beneficially and of
record more than fifty percent (50.0%) of the capital stock or other equity
interests of each of the Debtors, the Borrower and each of the Debtors are
engaged in related businesses, each of the Debtors will derive direct and
indirect economic benefits from the Loans, and the execution and delivery of
this Agreement is necessary or convenient to the conduct, promotion, or
attainment of the business of each of the Debtors.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt, and sufficiency of which are hereby
acknowledged, and in order to induce the Agent and the Banks to make the Loans
and issue the Letters of Credit under the Credit Agreement, the parties hereto
hereby agree as follows:
ARTICLE I.
Definitions
Section A. Definitions. As used in this Agreement, the following terms
have the following meanings:
"Account" means any "account," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by a
Debtor, and, in any event, shall include, without limitation, each of
the following, whether now owned or hereafter acquired by a Debtor: (a)
all rights of such Debtor to payment for goods sold or leased, services
rendered or the license of Intellectual Property, whether or not earned
by performance; (b) all accounts receivable of such Debtor; (c) all
rights of such Debtor to receive any payment of money or other form of
consideration; (d) all security pledged, assigned, or granted to or
held by such Debtor to secure any of the foregoing; (e) all letters of
credit securing, guaranties of, or indemnifications with respect to,
any of the foregoing; and (f)
1
all rights of such Debtor as an unpaid seller of goods or services,
including, but not limited to, all rights of stoppage in transit,
replevin, reclamation, and resale.
"Chattel Paper" means any "chattel paper," as such term is
defined in Article or Chapter 9 of the UCC, now owned or hereafter
acquired by a Debtor.
"Collateral" has the meaning specified in Section 2.1.
"Copyright License" means any written agreement now or
hereafter in existence granting to a Debtor any right to use any
Copyright including, without limitation, the agreements identified on
Schedule 3.5.
"Copyrights" means all of the following: (a) copyrights, works
protectable by copyright, copyright registrations, and copyright
applications (with respect to a Debtor, including, without limitation,
those identified on Schedule 3.5); (b) all renewals, extensions, and
modifications thereof; (c) all income, royalties, damages, profits, and
payments relating to or payable under any of the foregoing; (d) the
right to sue for past, present, or future infringements of any of the
foregoing; and (e) all other rights and benefits relating to any of the
foregoing throughout the world.
"Copyright Security Agreement" means a security agreement in a
form reasonably satisfactory to Agent pursuant to which a Debtor grants
to the Agent, for the benefit of the Secured Parties, a first priority
security interest in such Debtor's Copyrights and Copyright Licenses
for purposes of recording such security interest with any copyright
office of a Governmental Authority, as such agreement may hereafter be
amended, supplemented, or otherwise modified from time to time.
"Deposit Accounts" means any and all deposit accounts or other
bank accounts now owned or hereafter acquired or opened by a Debtor,
and any account which is a replacement or substitute for any of such
accounts including, without limitation, those deposit accounts
identified on Schedule 3.2.
"Document" means any "document," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by a
Debtor, including, without limitation, all documents of title and all
receipts covering, evidencing, or representing goods now owned or
hereafter acquired by such Debtor.
"Equipment" means any "equipment," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by a
Debtor and, in any event, shall include, without limitation, all
machinery, furniture, trailers, rolling stock, vessels, aircraft, and
vehicles now owned or hereafter acquired by such Debtor and any and all
additions, substitutions, and replacements of any of the foregoing,
wherever located, together with all attachments, components, parts,
equipment, and accessories installed thereon or affixed thereto.
2
"Financial Assets" means any "financial asset," as such term
is defined in Article or Chapter 8 of the UCC.
"Fixtures" means all goods that are "fixtures" as determined
in accordance with Article or Chapter 9 of the UCC and applicable real
property law now owned or hereafter acquired by a Debtor and wherever
located, and all additions and accessions thereto and replacements
therefor.
"General Intangibles" means any "general intangibles," as such
term is defined in Article or Chapter 9 of the UCC, now owned or
hereafter acquired by a Debtor and, in any event, shall include,
without limitation, each of the following, whether now owned or
hereafter acquired by such Debtor: (a) all of such Debtor's
Intellectual Property together with all of such Debtor's trade secrets,
proprietary information, customer lists, designs, and inventions; (b)
all of such Debtor's books, records, data, plans, manuals, computer
software, computer tapes, computer disks, computer programs, source
codes, object codes, and all rights of such Debtor to retrieve data and
other information from third parties; (c) all of the Debtor's contract
rights, including, without limitation, those relating to Raw Inventory
Routes, all of such Debtor's right, title, and interest in and to the
Lockbox Agreements which include, without limitation, all rights of
such Debtor to receive moneys due and to become due under or pursuant
to such agreements; (d) all of such Debtor's partnership interests,
joint venture interests, and certificates of deposit; (e) all rights of
such Debtor to payment under letters of credit and similar agreements;
(f) all tax refunds and tax refund claims of such Debtor; (g) all
choses in action and causes of action of such Debtor (whether arising
in contract, tort or otherwise and whether or not currently in
litigation) and all judgments in favor of such Debtor; (h) all rights
and claims of such Debtor under warranties and indemnities; and (i) all
rights of such Debtor under any insurance, surety, or similar contract
or arrangement.
"Instrument" means any "instrument," as such term is defined
in Article or Chapter 9 of the UCC, now owned or hereafter acquired by
a Debtor, and, in any event, shall include, without limitation, all
promissory notes, drafts, bills of exchange, and trade acceptances of
such Debtor, whether now owned or hereafter acquired.
"Intellectual Property" means Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks, and Trademark Licenses.
"Inventory" means any "inventory," as such term is defined in
Article or Chapter 9 of the UCC, now owned or hereafter acquired by a
Debtor, and, in any event, shall include, without limitation, each of
the following, whether now owned or hereafter acquired by such Debtor:
(a) all goods and other personal property of such Debtor that are held
for sale or lease or to be furnished under any contract of service; (b)
all raw materials, work-in-process, finished goods, inventory,
supplies, and materials of such Debtor; (c) all wrapping, packaging,
advertising, and shipping materials of such Debtor; (d) all goods that
have been returned to, repossessed by, or stopped in transit by such
Debtor; and (e) all Documents evidencing any of the foregoing.
3
"Investment Property" means any "investment property" as such
term is defined in Article or Chapter 9 of the UCC, now owned or
hereafter acquired by a Debtor, and, in any event, shall include,
without limitation, each of the following, whether now owned or
hereafter acquired by such Debtor: (a) any security, whether
certificated or uncertificated; (b) any security entitlement; (c) any
securities account (including, without limitation, those described on
Schedule 3.2); (d) any commodity contract; and (e) any commodity
account (including, without limitation, those identified on Schedule
3.2).
"Obligations" means, with respect to each Debtor, all present
and future indebtedness, liabilities, and obligations of such Debtor to
the Agent and the Secured Parties under the Loan Documents, including,
without limitation, the "Guaranteed Indebtedness" as defined in the
Guaranty.
"Patent License" means any written agreement now or hereafter
in existence granting to a Debtor any right to use any invention on
which a Patent is in existence including, without limitation, the
agreements identified on Schedule 3.5.
"Patents" means all of the following: (a) patents, patent
applications, and patentable inventions (with respect to the Debtors,
including, without limitation, those identified on Schedule 3.5), and
all of the inventions and improvements described and claimed therein;
(b) all continuations, divisions, renewals, extensions, modifications,
substitutions, continuations-in-part, or reissues of any of the
foregoing; (c) all income, royalties, profits, damages, awards, and
payments relating to or payable under any of the foregoing; (d) the
right to sue for past, present, and future infringements of any of the
foregoing; and (e) all other rights and benefits relating to any of the
foregoing throughout the world.
"Patent Security Agreement" means a security agreement in a
form reasonably satisfactory to the Agent pursuant to which a Debtor
grants to the Agent, for the benefit of the Secured Parties, a first
priority security interest in such Debtor's Patents and Patent Licenses
for purposes of recording such security interest with any patent office
of a Governmental Authority, as such agreement may hereafter be
amended, supplemented, or otherwise modified from time to time.
"Pledged Collateral" means the Pledged Shares and the
Instruments evidencing the obligations of a Debtor's subsidiaries to
such Debtor described in Section 2.1(c).
"Pledged Shares" means, with respect to a Debtor, the shares
of capital stock or other equity, partnership, or membership interests
identified for such Debtor on Schedule 1.1 or on Schedule 1 to an
amendment to this Agreement in the form of Exhibit A.
"Proceeds" means any "proceeds," as such term is defined in
Article or Chapter 9 of the UCC and, in any event, shall include, but
not be limited to, (a) any and all proceeds of any insurance,
indemnity, warranty, or guaranty payable to a Debtor from time to time
4
with respect to any of the Collateral, (b) any and all payments (in any
form whatsoever) made or due and payable to a Debtor from time to time
in connection with any requisition, confiscation, condemnation,
seizure, or forfeiture of all or any part of the Collateral by any
Governmental Authority (or any Person acting, or purporting to act, for
or on behalf of any Governmental Authority), (c) all Instruments,
Documents, Chattel Paper and General Intangibles received or arising in
connection with a disposition of Collateral, and (d) any and all other
amounts from time to time paid or payable under or in connection with
any of the Collateral.
"Raw Inventory Route" means the right to obtain from third
parties the raw materials of the type utilized in the Debtor's
business.
"Trademark License" means any written agreement now or
hereafter in existence granting to a Debtor any right to use any
Trademark, including, without limitation, the agreements identified on
Schedule 3.5.
"Trademarks" means all of the following: (a) trademarks, trade
names, corporate names, company names, business names, fictitious
business names, trade styles, service marks, logos, other business
identifiers, prints and labels on which any of the foregoing appear,
all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, registrations,
recordings, and applications in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any
state thereof or any other country or any political subdivision thereof
(with respect to a Debtor, including, without limitation, those
identified in Schedule 3.5); (b) all reissues, extensions, and renewals
thereof; (c) all income, royalties, damages, and payments now or
hereafter relating to or payable under any of the foregoing, including,
without limitation, damages or payments for past or future
infringements of any of the foregoing; (d) the right to sue for past,
present, and future infringements of any of the foregoing; (e) all
rights corresponding to any of the foregoing throughout the world; and
(f) all goodwill associated with and symbolized by any of the
foregoing.
"Trademark Security Agreement" means a security agreement in a
form reasonably satisfactory to Agent which a Debtor grants to the
Agent, for the benefit of the Secured Parties, a first priority
security interest in such Debtor's Trademarks and Trademark Licenses
for purposes of recording such security interest with the trademark
office of any Governmental Authority, as such agreement may hereafter
be amended, supplemented, or otherwise modified from time to time.
"UCC" means the Uniform Commercial Code as in effect in the
State of Texas provided, that if, by applicable law, the perfection or
effect of perfection or non-perfection of the security interest created
hereunder in any Collateral is governed by the Uniform Commercial Code
as in effect on or after the date hereof in any other jurisdiction,
"UCC" means the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such
perfection or the effect of perfection or non-perfection.
5
Section B. Other Definitional Provisions. Terms used herein that are
defined in the Credit Agreement and are not otherwise defined herein shall have
the meanings therefor specified in the Credit Agreement. References to
"Sections," "subsections," "Exhibits," and "Schedules" shall be to Sections,
subsections, Exhibits, and Schedules, respectively, of this Agreement unless
otherwise specifically provided. All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms defined. All
references to statutes and regulations shall include any amendments of the same
and any successor statutes and regulations. Terms used herein, which are defined
in the UCC, unless otherwise defined herein or in the Credit Agreement, shall
have the meanings determined in accordance with the UCC.
ARTICLE II.
Security Interest
Section A. Security Interest. As collateral security for the prompt
payment and performance in full when due of its Obligations (whether at stated
maturity, by acceleration, or otherwise), each Debtor hereby pledges and assigns
to the Agent, and grants to the Agent, for the benefit of the Secured Parties, a
continuing lien on and security interest in, all of such Debtor's right, title,
and interest in and to the following, whether now owned or hereafter arising or
acquired and wherever located (collectively with respect to any Debtor or all
Debtors, as the context requires, the "Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Instruments, including, without limitation, or in
addition, all instruments evidencing indebtedness from time to
time owed to such Debtor by the subsidiaries of such Debtor,
and all interest, cash, and other property from time to time
received, receivable, or otherwise distributed or
distributable in respect of or in exchange for any or all of
such indebtedness;
(d) all General Intangibles;
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all Inventory;
(i) all Financial Assets and Investment Property, including,
without limitation or in addition, the following:
6
(1) all the Pledged Shares and the certificates
representing the Pledged Shares, and all dividends,
cash, Instruments, and other property from time to
time received, receivable, or otherwise distributed
or distributable in respect of or in exchange for any
or all of the Pledged Shares; and
(2) all additional shares of capital stock of the
subsidiaries of such Debtor from time to time owned
or acquired by such Debtor in any manner, and all
dividends, cash, Instruments, and other property from
time to time received, receivable, or otherwise
distributed or distributable in respect of or in
exchange for any or all of such shares; provided,
however, not more than sixty-six percent (66%) of the
capital stock or other ownership interests in each
subsidiary organized in a jurisdiction located
outside the United States of America is, or is
required to be, pledged to the Agent under any
provisions of this Section 2.1;
(j) all Deposit Accounts of the such Debtor and all funds,
certificates, Documents, Instruments, checks, drafts, wire
transfer receipts, and other earnings, profits, or other
Proceeds from time to time representing, evidencing, deposited
into, or held in the Deposit Accounts; and
(k) all products and Proceeds, in cash or otherwise, of any of the
property described in the foregoing clauses (a) through (j).
Section B. Debtor Remains Liable. Notwithstanding anything to the
contrary contained herein, (a) each Debtor shall remain liable under the
documentation included in the Collateral to the extent set forth therein to
perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Agent of any of
its rights or remedies hereunder shall not release any Debtor from any of its
duties or obligations under such documentation, (c) the Agent shall not have any
obligation under any such documentation included in the Collateral by reason of
this Agreement, and (d) the Agent shall not be obligated to perform any of the
obligations of any Debtor thereunder or to take any action to collect or enforce
any claim for payment assigned hereunder.
ARTICLE III.
Representations and Warranties
To induce the Agent and the Banks to enter into this Agreement and the
Credit Agreement, each Debtor represents and warrants to the Agent and the
Secured Parties that:
Section A. Location of Equipment, Fixtures, and Inventory; Third
Parties in Possession. All of its Equipment, Fixtures, and Inventory are located
at the places specified in Schedule 3.1 for such Debtor, except to the extent
any such Equipment, Fixtures, or Inventory is in transit or being repaired
elsewhere. Schedule 3.1 correctly identifies, as of the date hereof, the
7
landlords, if any, of each of its locations identified in Schedule 3.1. Except
for the Persons identified on Schedule 3.1 or Persons in possession of any such
Collateral which is in transit or is out for repair, as of the date hereof, no
Person other than such Debtor and the Agent has possession of any of the
Collateral. None of its Collateral has been located in any location within the
past four months other than as set forth on Schedule 3.1 for such Debtor. Such
Debtor has provided the Agent with accurate descriptions of all the real
property on which Fixtures are located.
Section B. Deposit, Commodity, and Securities Accounts. Schedule 3.2
correctly identifies all deposit, commodity, and securities accounts owned by
such Debtor and the institutions holding such accounts. No Person other than
such Debtor has control over any Investment Property.
Section C. Office Locations; Fictitious Names; Tax I.D. Number. Its
principal place of business and its chief executive office is located at the
place identified for such Debtor on Schedule 3.1. Schedule 3.1 also sets forth
all other places where it keeps its books and records and all other locations
where it has a place of business. It does not do business and has not done
business during the past five (5) years under any trade name or fictitious
business name except as disclosed on Schedule 3.3. Such Debtor's United States
Federal Income Tax I.D. Number identified for such Debtor on Schedule 3.3.
Section D. Delivery of Collateral. Except as provided by Section 4.2,
it has delivered to the Agent all Collateral the possession of which is
necessary to perfect the security interest of the Agent therein. All
certificates of title evidencing Equipment shall be delivered to the Agent to
the extent required by Section 9.10 of the Credit Agreement in accordance with
Section 9.10 of the Credit Agreement.
Section E. Intellectual Property. All of its Intellectual Property that
is registered with or for which an application for registration has been filed
with any Governmental Authority is identified on Schedule 3.5, and such
information is true, correct, and complete in all material respects.
ARTICLE IV.
Covenants
Each Debtor covenants and agrees with the Agent that until this
Agreement terminates as provided in Section 7.11 and subject to Section 9.10 of
the Credit Agreement:
Section A. Accounts. It shall, in accordance with its customary
business practices, endeavor to collect or cause to be collected from each
account debtor under its Accounts, as and when due, any and all amounts owing
under such Accounts. Without the prior written consent of the Agent, it shall
not, except in the ordinary course of business and in no event after the
occurrence and during the continuance of an Event of Default, (a) grant any
extension of time for any payment with respect to any of its Accounts, (b)
compromise, compound, or settle any of its
8
Accounts for less than the full amount thereof, (c) release, in whole or in
part, any Person liable for payment of any of its Accounts, (d) allow any credit
or discount for payment with respect to any of its Accounts other than trade or
other customary discounts granted in the ordinary course of business, or (e)
release any Lien or guaranty securing any of its Accounts unless such Account
has been paid.
Section B. Further Assurances; Exceptions to Perfection. At any time
and from time to time, upon the reasonable request of the Agent, and at its sole
expense, it shall, subject to the exceptions to the creation, perfection, and/or
protection of Liens permitted by Section 9.10 of the Credit Agreement, promptly
execute and deliver all such further agreements, documents, and instruments and
take such further action as the Agent may reasonably deem necessary or
appropriate to preserve and perfect its security interest in the Collateral and
carry out the provisions and purposes of this Agreement or to enable the Agent
to exercise and enforce its rights and remedies hereunder with respect to any of
the Collateral. Without limiting the generality of the foregoing, it shall upon
reasonable request by the Agent, or if no request is made by the Agent with each
of the reports delivered to the Agent pursuant to Section 9.1(b) of the Credit
Agreement, but subject to the exceptions to the creation, perfection, and/or
protection of Liens permitted by Section 9.10 of the Credit Agreement, (a)
execute and deliver to the Agent such financing statements as the Agent may from
time to time reasonably require, (b) take such action within its control as the
Agent may reasonably request to permit the Agent to have control over any
Investment Property or any Deposit Account; (c) deliver to the Agent all
Collateral the possession of which is necessary to perfect the security interest
therein, duly endorsed and/or accompanied by duly executed instruments of
transfer or assignment, all in form and substance reasonably satisfactory to the
Agent; except that, prior to the occurrence of a Default and when the same shall
no longer be continuing, such Debtor may: (i) retain any letters of credit
received in the ordinary course of business; (ii) retain and utilize in the
ordinary course of business all cash dividends and interest paid in respect to
any of the Pledged Collateral or any other Investment Property; and (iii) retain
any Documents received and further negotiated in the ordinary course of
business, (d) immediately when any Default exists, deliver any and all
certificates of title, applications for title, or similar evidence of ownership
of Equipment and cause the Agent to be named as lienholder thereon, provided
that each of such items shall be immediately delivered to the Agent whenever any
Default exists, and (e) execute and deliver to the Agent such other agreements,
documents, and instruments as the Agent may reasonably require to perfect and
maintain the validity, effectiveness, and priority of the Liens intended to be
created by the Loan Documents.
Section C. Third Parties in Possession of Collateral. Except as may be
permitted by Section 9.10 of the Credit Agreement, such Debtor shall not permit
any third Person (including any warehouseman, bailee, agent, consignee, or
processor) to hold any Collateral (other than Equipment, Fixtures, and Inventory
in transit or out for repairs), unless such Debtor shall: (i) notify such third
Person of the security interests created hereby; (ii) instruct such Person to
hold all such Collateral for the Agent's account subject to the Agent's
instructions; and (iii) take all other actions the Agent reasonably deems
necessary to perfect and protect its and such Debtor's interests in such
Collateral pursuant to the requirements of the UCC of the applicable
jurisdiction where the warehouseman, bailee, consignee, agent, processor, or
other third Person is located (including, without limitation, the filing of a
financing statement in the proper jurisdiction naming the applicable third
Person as debtor and such Debtor as secured party and notifying the third
Person's secured lenders of such Debtor's interest in such Collateral before the
third Person receives possession of the Collateral in question).
Section D. Corporate Changes. It shall not change its name, identity,
or corporate structure in any manner that might make any financing statement
filed in connection with this Agreement seriously misleading and it shall not
change its United States Federal Tax I.D. Number unless, in each case, it shall
have given the Agent thirty (30) days, or such shorter time as the Agent may
agree to, prior written notice thereof and shall have taken all action
reasonably deemed necessary or desirable by the Agent to protect the Agent's
Liens with the perfection and priority thereof required by the Loan Documents.
It shall not change its principal place of business, chief executive office, or
the place where it keeps its books and records unless it shall have given the
Agent thirty (30) days, or such shorter time as the Agent may agree to, prior
written notice thereof and shall have taken all action deemed necessary or
desirable by the Agent to cause the Agent's security interest in the Collateral
to be perfected with the priority required by the Loan Documents.
Section E. Equipment, Fixtures, and Inventory. Except as otherwise
permitted by Section 4.3, it shall keep its Equipment, Fixtures, and Inventory
at (or in transit to) any of its locations specified on Schedule 3.1 or, upon
completion of an amendment to Schedule 3.1 and thirty (30) days, or such shorter
time as the Agent may agree to, prior written notice to the Agent, at such other
places within the United States of America where all action required to perfect
the Agent's security interest in such Collateral with the priority required by
the Loan Documents shall have been taken.
Section F. Warehouse Receipts Non-Negotiable. It agrees that if any
"negotiable" (as such term is used in Section 7.104 of the UCC) warehouse
receipt or receipt in the nature of a warehouse receipt is issued in respect of
any portion of the Collateral, such warehouse receipt or receipt in the nature
thereof shall be delivered to the Agent promptly after the Agent's request, or
if no request is made with the next report delivered to the Agent pursuant to
Section 9.1(b) of the Credit Agreement.
Section G. Voting Rights; Distributions, Etc. So long as no Event of
Default shall have occurred and be continuing, it shall be entitled to exercise
any and all voting and other consensual rights (including, without limitation,
the right to give consents, waivers, and notifications) pertaining to any of the
Pledged Collateral or any other Investment Property; provided, however, that no
vote shall be cast or consent, waiver, or ratification given or action taken
without the prior written consent of the Agent which would be inconsistent with
or violate any provision of this Agreement or any other Loan Document.
Section H. Transfers and Other Liens; Additional Investments. Except as
permitted by the terms of the Credit Agreement or this Agreement, it agrees that
it will (i) cause each issuer of any of the Pledged Collateral not to issue any
shares of stock, notes, or other securities or instruments in addition to or in
substitution for any of the Pledged Collateral, (ii) subject to
10
Section 2.1(i)(2), pledge hereunder, immediately upon its acquisition (directly
or indirectly) thereof, any and all such shares of stock, membership interests,
notes, or instruments, and (iii) with each of the reports delivered to the Agent
pursuant to Section 9.1(b) of the Credit Agreement, deliver to the Agent an
Amendment, duly executed by it, in substantially the form of Exhibit A (an
"Amendment"), in respect of such shares of stock, membership interests, notes,
or instruments, together with all certificates, notes or other instruments
representing or evidencing the same. It hereby (x) authorizes the Agent to
attach each Amendment to this Agreement, and (y) agrees that all such shares of
stock, membership interests, notes, or instruments listed on any Amendment
delivered to the Agent shall for all purposes hereunder constitute Pledged
Collateral.
Section I. Intellectual Property Covenants. If, before the Obligations
are paid in full, it obtains any new Intellectual Property or rights thereto or
becomes entitled to the benefit of any Intellectual Property, it shall give
written notice thereof to the Agent with the next report delivered to the Agent
pursuant to Section 9.1(b) of the Credit Agreement, and upon Agent's request
shall execute and deliver, in form and substance reasonably satisfactory to the
Agent, a Copyright Security Agreement, Patent Security Agreement, or Trademark
Security Agreement, as applicable, describing any such new Intellectual
Property. It shall: (a) prosecute diligently any copyright, patent, trademark,
or license application at any time pending which is material to the conduct of
its business; (b) make application on all new copyrights, patents, and
trademarks as it may reasonably deem appropriate; (c) preserve and maintain all
rights in the Intellectual Property that are material to the conduct of its
business; and (d) at the request of the Agent, upon and after the occurrence and
during the continuance of an Event of Default, use its reasonable efforts to
obtain any consents, waivers, or agreements necessary to enable the Agent to
exercise its remedies with respect to the Intellectual Property. It shall not
abandon any pending copyright, patent, or trademark application, or Copyright,
Patent, Trademark, or any other Intellectual Property which is material to the
conduct of its business without the prior written consent of the Agent.
Section J. Lockbox of Proceeds. Each Debtor shall instruct all
customers and other Persons obligated with respect to all Accounts and other
Collateral to make all payments with respect thereto to a post office box or
boxes in accordance with the terms of one or more of the Lockbox Agreements or
by wire transfer to the Concentration Account or any account established
pursuant to the Lockbox Agreements. Each Debtor shall irrevocably instruct each
depository bank who has entered into a Lockbox Agreement and who receives
proceeds of such Debtor's Accounts to remit all proceeds of such payments
directly to the Agent on a daily basis by automated clearing house debit
directly for credit to the Concentration Account or by wire transfer to the
Agent for application in accordance with the Credit Agreement. Any income
received by the Agent with respect to the balance in the Concentration Account
shall remain, or be deposited, in the Concentration Account for the credit of
such Debtor. In addition to the foregoing, each Debtor agrees that if any
Proceeds (including, without limitation, the payments made in respect of such
Debtor's Accounts) shall be received by it, it shall as promptly as possible
deposit such Proceeds into the Concentration Account or a deposit account
established pursuant to a Lockbox Agreement. Until so deposited, all such
Proceeds shall be held in trust by such Debtor for the benefit of the Agent and
shall be segregated from any of such Debtor's other funds or property.
11
Section K. Deposit, Commodity, and Security Accounts. It shall not open
any new deposit, commodity, or security account or otherwise utilize any such
account other than the deposit accounts identified on Schedule 3.2 unless it
shall have given the Agent thirty (30) days, or such shorter time as the Agent
may agree to, prior written notice thereof and shall have taken all action
within its control deemed necessary or desirable by the Agent to cause its
security interest therein to be perfected with the priority required by the Loan
Documents. Prior to the occurrence and continuance of an Event of Default, it
may make purchases and sales of Investment Property and Financial Assets in
accordance with the restrictions on investments set out in the Credit Agreement.
After the occurrence and during the continuance of an Event of Default it shall
not be authorized to make purchases and sales of its Investment Property or
Financial Assets and it shall take such steps within its control as the Agent
may reasonably request to give the Agent control over all of such Debtor's
Investment Property and Financial Assets. No Debtor will give any party other
than the Agent control over any of such Debtor's Investment Property or
Financial Assets.
ARTICLE V.
Rights of the Agent
Section A. Power of Attorney. EACH DEBTOR HEREBY IRREVOCABLY
CONSTITUTES AND APPOINTS THE AGENT AND ANY OFFICER OR AGENT THEREOF, WITH FULL
POWER OF SUBSTITUTION, AS ITS TRUE AND LAWFUL ATTORNEY-IN-FACT WITH FULL
IRREVOCABLE POWER AND AUTHORITY IN THE NAME OF SUCH DEBTOR OR IN ITS OWN NAME,
TO TAKE, AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT, ANY AND
ALL ACTIONS AND TO EXECUTE ANY AND ALL DOCUMENTS AND INSTRUMENTS WHICH THE AGENT
AT ANY TIME AND FROM TIME TO TIME DEEMS NECESSARY OR DESIRABLE TO ACCOMPLISH THE
PURPOSES OF THIS AGREEMENT AND, WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, SUCH DEBTOR HEREBY GIVES THE AGENT THE POWER AND RIGHT ON BEHALF OF
SUCH DEBTOR AND IN THE AGENT'S OWN NAME TO DO ANY OF THE FOLLOWING AFTER THE
OCCURRENCE AND DURING THE CONTINUANCE OF A DEFAULT, WITHOUT NOTICE TO OR THE
CONSENT OF SUCH DEBTOR:
(i) to demand, sue for, collect, or receive, in the name of
such Debtor or in the Agent's own name, any money or property at any
time payable or receivable on account of or in exchange for any of the
Collateral and, in connection therewith, endorse checks, notes, drafts,
acceptances, money orders, documents of title, or any other instruments
for the payment of money under the Collateral or any policy of
insurance;
(ii) to pay or discharge taxes, Liens, or other encumbrances
levied or placed on or threatened against the Collateral;
(iii) to notify post office authorities to change the address
for delivery of mail
12
of such Debtor to an address designated by the Agent and to receive,
open, and dispose of mail addressed to such Debtor;
(iv) (A) to direct account debtors and any other parties
liable for any payment under any of the Collateral to make payment of
any and all monies due and to become due thereunder directly to the
Agent or as the Agent shall direct (each Debtor agrees that if any
Proceeds of any Collateral (including, without limitation, payments
made in respect of its Accounts) shall be received by such Debtor while
a Default exists, such Debtor shall promptly deliver such Proceeds to
the Agent with any necessary endorsements, and until such Proceeds are
delivered to the Agent, such Proceeds shall be held in trust by such
Debtor for the benefit of the Agent and shall not be commingled with
any other funds or property of such Debtor); (B) to receive payment of
and receipt for any and all monies, claims, and other amounts due and
to become due at any time in respect of or arising out of any
Collateral; (C) to sign and endorse any invoices, freight, or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, proxies, stock powers, verifications, and notices
in connection with accounts and other documents relating to the
Collateral; (D) to commence and prosecute any suit, action, or
proceeding at law or in equity in any court of competent jurisdiction
to collect the Collateral or any part thereof and to enforce any other
right in respect of any Collateral; (E) to defend any suit, action, or
proceeding brought against such Debtor with respect to any Collateral;
(F) to settle, compromise, or adjust any suit, action, or proceeding
described above and, in connection therewith, to give such discharges
or releases as the Agent may deem appropriate; (G) to exchange any of
the Collateral for other property upon any merger, consolidation,
reorganization, recapitalization, or other readjustment of the issuer
thereof and, in connection therewith, deposit any of the Collateral
with any committee, depositary, transfer agent, registrar, or other
designated agency upon such terms as the Agent may determine; (H) to
add or release any guarantor, indorser, surety, or other party to any
of the Collateral; (I) to renew, extend, or otherwise change the terms
and conditions of any of the Collateral; (J) to grant or issue any
exclusive or nonexclusive license under or with respect to any of such
Debtor's Intellectual Property (subject to the rights of third parties
under pre-existing licenses); (K) to endorse such Debtor's name on all
applications, documents, papers, and instruments necessary or desirable
in order for the Agent to use any of such Debtor's Intellectual
Property; (L) to make, settle, compromise, or adjust any claims under
or pertaining to any of the Collateral (including, without limitation,
claims under any policy of insurance); and (M) to sell, transfer,
pledge, convey, make any agreement with respect to, or otherwise deal
with any of the Collateral as fully and completely as though the Agent
were the absolute owner thereof for all purposes, and to do, at the
Agent's option and such Debtors' expense, at any time, or from time to
time, all acts and things which the Agent deems necessary to protect,
preserve, maintain, or realize upon the Collateral and the Agent's
security interest therein.
THIS POWER OF ATTORNEY IS A POWER COUPLED WITH AN INTEREST AND SHALL BE
IRREVOCABLE UNTIL TERMINATION OF THIS AGREEMENT IN ACCORDANCE WITH SECTION 7.11.
The Agent shall be under no duty to exercise or withhold the exercise of any of
the rights, powers, privileges, and options expressly or implicitly
13
granted to the Agent in this Agreement, and shall not be liable for any failure
to do so or any delay in doing so. Neither the Agent nor any Person designated
by the Agent shall be liable for any act or omission or for any error of
judgment or any mistake of fact or law. This power of attorney is conferred on
the Agent solely to protect, preserve, maintain, and realize upon its security
interest in the Collateral. The Agent shall not be responsible for any decline
in the value of the Collateral and shall not be required to take any steps to
preserve rights against prior parties or to protect, preserve, or maintain any
Lien given to secure the Collateral.
Section B. Assignment by the Secured Parties. The Agent and each
Secured Party may at any time assign or otherwise transfer all or any portion of
their rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, the Obligations) to any other Person, to the
extent permitted by, and upon the conditions contained in, the Credit Agreement,
and such Person shall thereupon become vested with all the benefits thereof
granted to the Agent and the Banks, respectively, herein or otherwise.
Section C. Possession; Reasonable Care. The Agent may, from time to
time, in its sole discretion, appoint one or more agents to hold physical
custody, for the account of the Agent, of any or all of the Collateral that the
Agent has a right to possess. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Agent accords its own property, it being understood that the Agent
shall not have any responsibility for (a) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders, or other matters
relative to any Collateral, whether or not the Agent has or is deemed to have
knowledge of such matters, or (b) taking any necessary steps to preserve rights
against any parties with respect to any Collateral.
ARTICLE VI.
Default
Section A. Rights and Remedies. If an Event of Default shall have
occurred and be continuing, the Agent shall have the following rights and
remedies:
(i) In addition to all other rights and remedies granted to
the Agent in this Agreement or in any other Loan Document or by
applicable law, the Agent shall have all of the rights and remedies of
a secured party under the UCC (whether or not the UCC applies to the
affected Collateral). Without limiting the generality of the foregoing,
the Agent may (A) without demand or notice to any Debtor, collect,
receive, or take possession of the Collateral or any part thereof and
for that purpose the Agent may enter upon any premises on which the
Collateral is located and remove the Collateral therefrom or render it
inoperable, and/or (B) sell, lease, or otherwise dispose of the
Collateral, or any part thereof, in one or more parcels at public or
private sale or sales, at the Agent's offices or elsewhere, for cash,
on credit, or for future delivery, and upon such other terms as the
Agent may deem commercially reasonable or otherwise as may be permitted
by law. The Agent shall have the right at any public sale or sales,
and, to the extent permitted by
14
applicable law, at any private sale or sales, to bid (which bid may be,
in whole or in part, in the form of cancellation of indebtedness) and
become a purchaser of the Collateral or any part thereof free of any
right or equity of redemption on the part of any Debtor, which right or
equity of redemption is hereby expressly waived and released by each
Debtor. Upon the request of the Agent, each Debtor shall assemble its
Collateral and make it available to the Agent at any place designated
by the Agent that is reasonably convenient to such Debtor and the
Agent. Each Debtor agrees that the Agent shall not be obligated to give
more than ten (10) days prior written notice of the time and place of
any public sale or of the time after which any private sale may take
place and that such notice shall constitute reasonable notice of such
matters. The Agent shall not be obligated to make any sale of
Collateral if it shall determine not to do so, regardless of the fact
that notice of sale of Collateral may have been given. The Agent may,
without notice or publication, adjourn any public or private sale or
cause the same to be adjourned from time to time by announcement at the
time and place fixed for sale, and such sale may, without further
notice, be made at the time and place to which the same was so
adjourned. Subject to the provisions of Section 14.1 of the Credit
Agreement, each Debtor shall be liable for all expenses of retaking,
holding, preparing for sale, or the like, and all reasonable attorneys'
fees, legal expenses, and other costs and expenses incurred by the
Agent in connection with the collection of the Obligations and the
enforcement of the Agent's rights under this Agreement. Each Debtor
shall remain liable for any deficiency if the Proceeds of any sale or
other disposition of the Collateral applied to its Obligations are
insufficient to pay its Obligations in full. The Agent may apply the
Collateral against the Obligations as provided in the Credit Agreement.
Each Debtor waives all rights of marshaling, valuation, and appraisal
in respect of the Collateral. Any cash held by the Agent as Collateral
and all cash proceeds received by the Agent in respect of any sale of,
collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Agent, be held by the Agent as
collateral for, and then or at any time thereafter applied in whole or
in part by the Agent against, the Obligations in the order permitted by
the Credit Agreement. Any surplus of such cash or cash proceeds and
interest accrued thereon, if any, held by the Agent and remaining after
payment in full of all the Obligations and termination of all
commitments and Letters of Credit shall be promptly paid over to the
Debtor entitled thereto or to whomsoever may be lawfully entitled to
receive such surplus; provided that the Agent shall have no obligation
to invest or otherwise pay interest on any amounts held by it in
connection with or pursuant to this Agreement.
(ii) The Agent may cause any or all of the Collateral held by
it to be transferred into the name of the Agent or the name or names of
the Agent's nominee or nominees.
(iii) The Agent may exercise any and all of the rights and
remedies of any Debtor under or in respect of the Collateral,
including, without limitation, any and all rights of such Debtor to
demand or otherwise require payment of any amount under, or performance
of any provision of, any of the Collateral and any and all voting
rights and corporate powers in respect of the Collateral. Each Debtor
shall execute and deliver (or cause to be executed and delivered) to
the Agent all such proxies and other instruments as the Agent may
reasonably request for the purpose of enabling the Agent to exercise
the
15
voting and other rights which it is entitled to exercise pursuant to
this clause (iii) and to receive the dividends, interest, and other
distributions which it is entitled to receive hereunder.
(iv) The Agent may collect or receive all money or property at
any time payable or receivable on account of or in exchange for any of
the Collateral, but shall be under no obligation to do so.
(v) On any sale of the Collateral, the Agent is hereby
authorized to comply with any limitation or restriction with which
compliance is necessary, in the view of the Agent's counsel, in order
to avoid any violation of applicable law or in order to obtain any
required approval of the purchaser or purchasers by any applicable
Governmental Authority.
(vi) For purposes of enabling the Agent to exercise its rights
and remedies under this Section 6.1 and enabling the Agent and its
successors and assigns to enjoy the full benefits of the Collateral in
each case as the Agent shall be entitled to exercise its rights and
remedies under this Section 6.1, each Debtor hereby grants to the Agent
an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to such Debtor) to use, assign, license,
or sublicense any of such Debtor's Intellectual Property, including in
such license reasonable access to all media in which any of the
licensed items may be recorded or stored and all computer programs used
for the completion or printout thereof and further including in such
license such rights of quality control and inspection as are reasonably
necessary to prevent the Trademarks included in such license from
claims of invalidation. This license shall also inure to the benefit of
all successors, assigns, and transferees of the Agent. Each Debtor
agrees not to sell or assign its interest in, or grant any sublicense
under, the license granted under this Section 6.1(vi) without the prior
written consent of the Agent; provided that this license shall not
prevent the sale by any Debtor of any Intellectual Property subject
thereto (if such sale is otherwise permissible under the Loan
Documents) and such Intellectual Property shall be sold free and clear
of the license to the Agent granted hereunder.
Section B. Private Sales. Each Debtor recognizes that the Agent may be
unable to effect a public sale of any or all of the Collateral by reason of
certain prohibitions contained in the laws of any jurisdiction outside the
United States, in the Securities Act of 1933, as amended from time to time (the
"Securities Act") and applicable state securities laws, but may be compelled to
resort to one or more private sales thereof to a restricted group of purchasers
who will be obliged to agree, among other things, to acquire such Collateral for
their own account for investment and not with a view to the distribution or
resale thereof. Each Debtor acknowledges and agrees that any such private sale
may result in prices and other terms less favorable to the seller than if such
sale were a public sale and, notwithstanding such circumstances, agrees that any
such private sale shall, to the extent permitted by law, be deemed to have been
made in a commercially reasonable manner. Neither the Agent nor the Banks shall
be under any obligation to delay a sale of any of the Collateral for the period
of time necessary to permit the issuer of such securities to register such
securities under the laws of any jurisdiction outside the United States, under
the Securities
16
Act, or under any applicable state securities laws, even if such issuer would
agree to do so. Each Debtor further agrees to do or cause to be done, to the
extent that it may do so under applicable law, all such other reasonable acts
and things as may be necessary to make such sales or resales of any portion or
all of the Collateral valid and binding and in compliance with any and all
applicable laws, regulations, orders, writs, injunctions, decrees, or awards of
any and all courts, arbitrators, or governmental instrumentalities, domestic or
foreign, having jurisdiction over any such sale or sales, all at each such
Debtor's expense.
ARTICLE VII.
Miscellaneous
Section A. No Waiver; Cumulative Remedies. No failure on the part of
the Agent to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power, or privilege under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power,
or privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power, or privilege. The rights and remedies
provided for in this Agreement are cumulative and not exclusive of any rights
and remedies provided by law.
Section B. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of each Debtor, the Agent and the Secured Parties and
their respective successors and assigns, except that no Debtor may assign any of
its rights or obligations under this Agreement without the prior written consent
of the Agent and the Banks, and the Agent may not appoint a successor to the
Agent except in accordance with the Credit Agreement.
Section C. Amendment; Entire Agreement. THIS AGREEMENT EMBODIES THE
FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO AND SUPERSEDES ANY AND ALL
PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE
CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES HERETO. The provisions of this Agreement may be
amended or waived only by an instrument in writing signed by the parties hereto
and the number of Banks required by the Credit Agreement.
Section D. Notices. All notices and other communications provided for
in this Agreement shall be given or made in accordance with the Credit
Agreement.
Section E. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Texas and applicable laws
of the United States of America.
Section F. Headings. The headings, captions, and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
17
Section G. Survival of Representations and Warranties. All
representations and warranties made in this Agreement or in any certificate
delivered pursuant hereto shall survive the execution and delivery of this
Agreement, and no investigation by the Agent shall affect the representations
and warranties or the right of the Agent to rely upon them.
Section H. Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section I. Waiver of Bond. In the event the Agent seeks to take
possession of any or all of the Collateral by judicial process, each Debtor
hereby irrevocably waives any bonds and any surety or security relating thereto
that may be required by applicable law as an incident to such possession, and
waives any demand for possession prior to the commencement of any such suit or
action.
Section J. Severability. Any provision of this Agreement which is
determined by a court of competent jurisdiction to be prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section K. Termination. If all of the Obligations shall have been paid
and performed in full, all commitments of the Agent and the Secured Parties
shall have expired or terminated, and no Letters of Credit shall remain
outstanding, the Agent shall, at the sole expense of and upon the written
request of a Debtor, execute and deliver to such Debtor a proper instrument or
instruments acknowledging the release and termination of the security interests
created by this Agreement (and such other documentation as the Debtor shall
reasonably request to evidence such termination), and shall duly assign and
deliver to such Debtor (without recourse and without any representation or
warranty other than as to authorization to enter into such assignments and
releases) such of such Debtor's property which is Collateral as may be in the
possession of the Agent and has not previously been sold or otherwise applied
pursuant to this Agreement.
Section L. Obligations Absolute. All rights and remedies of the Agent
hereunder, and all obligations of each Debtor hereunder, shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of any of the
Loan Documents;
(b) any change in the time, manner, or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from any of the
Loan Documents;
(c) any exchange, release, or nonperfection of any Collateral,
or any release or amendment or waiver of or consent to any departure
from any guarantee, for all or any of the Obligations; or
(d) any other circumstance that might otherwise constitute a
defense available to, or a discharge of, a third party pledgor.
Section M. Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH DEBTOR HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON
CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO THE LOAN DOCUMENTS
OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY BANK
IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first written above.
THE DEBTORS:
DARLING RESTAURANT SERVICES INC.
ESTEEM PRODUCTS INC.
INTERNATIONAL PROCESSING CORPORATION
INTERNATIONAL TRANSPORTATION SERVICE, INC.
THE STANDARD TALLOW CORPORATION
By:
-----------------------------------------
Brad Phillips, Treasurer of each Debtor
THE AGENT:
BANKBOSTON, N.A. as the Agent for the
Secured Parties
By:
----------------------------------------
Peter Haley, Vice President
19
Schedule 1.1
TO
SECURITY AGREEMENT
Pledged Shares
--------------
I. International Transportation Services, Inc.
Description of Each
State of Class and Series Number of
Name Incorporation (If Applicable) Par Value Issued Shares Certificate No.
- ---- ------------- --------------------- ---------- --------------- ---------------
Food By-Product Recycling, Inc. Illinois Common $0.10 13500 5
20
SCHEDULE 3.1
TO
SECURITY AGREEMENT
Locations
A. International Processing Corporation
a. Principal place of business/chief executive office:
Location Use Lease/Own Name and Address of Landlord of Premises
(if any)
International Processing Corp Office Lease Lavista Associates Inc. - landlord
Corporation 2163 Northlake Parkway, Suite 108
2191 Northlake Parkway, Suite Tucker, GA 30084
116
Tucker (DeKalb Co.), GA 30084
b. Other Locations:
Location Use Lease/Own Name and Address of Landlord of Premises
(if any)
International Processing Plant Own None
Corporation
1696 Joy Lake Road
Lake City (Clayton County)
Georgia 30260
International Processing Railroad Lease Norfolk Southern Corporation
Corporation easement P.O. Box 277531
Lake City (Clayton County), GA for Lake Atlanta, GA 30384-7531
30260 City
facility
International Processing Ware-house Lease Mimms Enterprises
Corporation 85-A Mill Street, Suite 100
3754 Zip Industrial Blvd. Roswell, GA 30075
Atlanta (Fulton County), GA
30321
International Processing Storage Lease Your Attic
Corporation Space 4268 Winters Chapel Road
4268 Winters Chapel Road Doraville, GA 30360
Doraville (DeKalb County), GA
30360
1
International Processing Plant Own None
Corporation
4413 Tanner Church Road
Conley (Clayton County)
Georgia 30288
International Processing Plant Lease American National Bank and Trust Company of
Corporation Chicago - landlord
6515 South Austin Ave. c/o Sinborg Industrial Real Estate
Bedford Park (Cook County) 1149 West 175th Street
Illinois 60638 Homewood, Illinois 60430
International Processing Parking Lot Lease American National Bank and Trust Company of
Corporation Chicago - landlord
65th & Narragansett Street D.B.A. The Cornerstone Company of Illinois
Chicago, IL 60638 P.O. Box 4401
Northbrook, IL 60065-4401
International Processing Plant Lease Donald J. and Joyce J. Cowan - landlord
Corporation P.O. Box 386
1150 Harlan Drive Terre Haute, Indiana 47808
Terre Haute, (Vigo County)
Indiana 47802
International Processing Plant Own None
Corporation
41 North James Street
Kansas City (Wyandotte County)
Kansas 66118
- -------------------------------------------------------------------------------------------------------------
International Processing Plant Lease Philip Mandelbaum & Sidney Krisen - landlord
Corporation 80 Main Street, P.O. Box 114
377 Roosevelt Avenue West Orange, New Jersey 07052
Carteret (Middlesex County)
New Jersey 07008
International Processing Plant Lease Charles and Jancey Ferrell - landlord
Corporation 917 Junction Road
917 Junction Road Durham, NC 27704
Durham (Durham County) North
Carolina 27704
International Processing Plant Lease Mac Storage Corporation - landlord
Corporation c/o DOBOSCO, Inc.
1382 Hicks Boulevard 2174 Seymour Avenue
Fairfield (Butler County) Ohio Cincinnati, Ohio 45237
45014
International Processing Parking Lot Lease Nanco Properties
Corporation 4917 Factory Drive
4917 Factory Drive Fairfield Oh 45014
Fairfield (Butler County) Ohio
45014
- -------------------------------------------------------------------------------------------------------------
2
International Processing Plant Lease James W. Speitel - landlord
Corporation 560 South Prince Street
127 Seymour Street, Lancaster, PA 17603
Lancaster (Lancaster County),
Pennsylvania 17603
International Processing Plant Own None
Corporation
1-30 West Exit 156
NE Corner 7
Mount Pleasant (Titus County),
Texas 75456
- -------------------------------------------------------------------------------------------------------------
c. Third Parties in Possession
None
3
B. International Transportation Services, Inc.
a. Principal place of business/chief executive office:
Location Use Lease/Own Name and Address of Landlord of Premises
(if any)
International Transportation Corp Office Lease Lavista Associates Inc. - landlord
Services, Inc. 2163 Northlake Parkway, Suite 108
2191 Northlake Parkway, Suite Tucker, GA 30084
116
Tucker (DeKalb County), GA 30084
- -------------------------------------------------------------------------------------------------------------
b. Other Locations:
None
c. Third Parties in Possession
None
4
C. The Standard Tallow Corporation
a. Principal place of business/chief executive office:
Location Use Lease/Own Name and Address of Landlord of Premises
(if any)
1215 Harrison Avenue Closed Own None
Kearny (Hudson County), New Facility
Jersey 07032-4310
- -------------------------------------------------------------------------------------------------------------
b. Other locations:
825 Wilson Avenue Plant Own None
Newark, Essex County, New
Jersey 07106
- -------------------------------------------------------------------------------------------------------------
c. Third Parties in Possession
None
5
D. Darling Restaurant Services Inc.
a. Principal place of business/chief executive office:
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
251 O'Connor Ridge Blvd. Office Leased by Massachusetts Mutual
Irving, Texas Darling Life Ins. Co.
International c/o Cornerstone Real
Inc. Estate Advisors, Inc.
311 South Wacker Drive Suite 980
Chicago, Illinois 60606
b. Other locations:
None
c. Third Parties in Possession
Party Location of Property Capacity in Which Held
Mortimer & Wallace, Inc. Terminal Berth 187 Third party warehouse for spot
2422 E. Sepulveda Wilmington, Los Angeles County, CA basis inventory collection and
Long Beach, CA 90810 90744 shipping
Stolthaven (Chicago) Inc. 12200 South Stoney Island Avenue Third party warehouse for spot
12200 S. Stony Island Avenue Chicago, IL 60633 basis inventory collection and
Chicago, IL 60633 shipping
Jacob Stern Port of Houston Third party warehouse for spot
Port of Houston Houston, TX basis inventory collection and
Houston, TX shipping
6
E. Esteem Products Inc.
a. Principal place of business; chief executive office:
Name and Address of Landlord
Address Use Lease/Own of Premises (if any)
251 O'Connor Ridge Blvd. Office Leased by Massachusetts Mutual
Irving (Dallas County), Texas 75038 Darling Life Ins. Co.
International c/o Cornerstone Real
Inc. Estate Advisors,
Inc.
311 South Wacker Drive Suite
980
Chicago, Illinois 60606
b. Other locations:
None
c. Third Parties in Possession
Party Location of Property Capacity in Which Held
Farmland Industries, Inc. (Muncie) Farmland Industries, Inc. (Muncie) Toll Milling Agreement
6833 Griffin Road 6833 Griffin Road
Kansas City, Kansas 66111 Kansas City, Kansas 66111
MFA Incorporated (Feed Mill) MFA Incorporated (Feed Mill) Toll Milling Agreement
429 Cherokee Street 429 Cherokee Street
St. Joseph (Buchanan County), Missouri St. Joseph Missouri
64504
7
SCHEDULE 3.2
TO
SECURITY AGREEMENT
BANK, COMMODITY AND SECURITY ACCOUNTS
A. International Processing Corporation
Account Type Institution Name and Address Account Number
International Processing Corporation NationsBank-TX 3750881660
Concentration Dallas, TX
International Processing Corporation NationsBank-GA Drawer CS 198218
Lockbox Atlanta, GA
International Processing Corporation NationsBank-GA 3299933434
Payroll Atlanta, GA
International Processing Corporation NationsBank-GA 3299933442
Disbursement Atlanta, GA
International Processing Corporation NationsBank-TX 3750881725
Depository Mt. Pleasant, TX
International Processing Corporation Merchant's Nat'l Bank 4392841
Depository Terre Haute, IN
International Processing Corporation NationsBank-GA 3750881712
Employee Benefit Trust Atlanta, GA
International Processing Corporation NationsBank-GA 3750881709
Flex Trust Account Atlanta, GA
B. Esteem Products Inc.
Account Type Institution Name and Address Account Number
Deposit BankBoston, N.A. 533-24496
Boston, MA
C. Darling Restaurant Services Inc.
Account Type Institution Name and Address Account Number
Deposit BankBoston, N.A. 533-24506
Boston, MA
D. All Other Debtors
None
1
SCHEDULE 3.3
TO
SECURITY AGREEMENT
I. Trade and Other Names
A. International Processing Corporation
International Bakerage, Inc.
American Processed By-Products, Inc.
Midwest Bakery Recyclers, Inc.
Atlanta Processing B, Inc.
IPC Processing Corporation
B. All Other Debtors
None
II. United States Federal Income Tax I.D. Number
Party Number
A. International Processing Corporation 58-2081829
B. International Transportation Service, Inc. 58-1107670
C. The Standard Tallow Corporation 22-1967795
D. Darling Restaurant Services Inc. 75-2732952
E. Esteem Products Inc. 75-2744094
SCHEDULE 3.5
TO
SECURITY AGREEMENT
Intellectual Property
A. International Processing Corporation
Copyright
Booklet entitled "Sani-Modular System For Food-Waste Handling." U.S.
Copyright Registration Certificate No. A159,998 in the name of
International Bakerage, Inc.
Trademark
"DBP": for Animal and Poultry Feed Ingredient derived from edible
bakery waste. U.S. Trademark Registration No. 776,282 in the name of
International Processing Corporation.
"Torvac": Waste System Maintenance. U.S. Trademark Registration No.
1,705,424 in the name of Darling Restaurant Services, Inc.
B. All Other Debtors
None
EXHIBIT A
TO
SECURITY AGREEMENT
AMENDMENT TO SECURITY AGREEMENT
This Amendment, dated _______________, _____, is delivered pursuant to
Section 4.8 of the Security Agreement (as herein defined) referred to below. The
undersigned hereby agrees that this Amendment may be attached to the Security
Agreement dated as of January 22, 1999 among the undersigned, certain of its
affiliates and BankBoston, N.A., as agent for the ratable benefit of the Banks
referred to therein (the "Security Agreement"), and that the shares of stock,
membership interests, notes, or other instruments listed on Schedule 1 annexed
hereto shall be and become part of the Collateral referred to in the Security
Agreement and shall secure payment and performance of all Obligations as
provided in the Security Agreement.
Capitalized terms used herein but not defined herein shall have the
meanings therefor provided in the Security Agreement.
[DEBTOR]
By:
-------------------------------
Name:
-----------------------------
Title:
-----------------------------
Schedule 1
to
Amendment to Security Agreement
Stock Number Percentage of
Stock Issuer Class of Stock Certificate No(s). Par Value of Shares Outstanding Shares
------------ -------------- ------------------ --------- --------- ------------------
EXHIBIT "G"
TO
DARLING INTERNATIONAL INC.
AMENDED AND RESTATED CREDIT AGREEMENT
Assignment and Acceptance
-------------------------
ASSIGNMENT AND ACCEPTANCE
Dated _______________, 19__
Reference is made to the Amended and Restated Credit Agreement dated as
of January 22, 1999 (as the same may be amended and in effect from time to time,
the "Credit Agreement"), among Darling International Inc., a Delaware
corporation (the "Borrower"), the lenders named therein (the "Banks"), and
BankBoston, N.A., as agent for the Banks (the "Agent"). Capitalized terms used
herein and not otherwise defined shall have the meanings assigned to such terms
in the Credit Agreement. This Assignment and Acceptance is being executed
pursuant to Section 14.8 of the Credit Agreement.
_________________________________________________________ (the "Assignor") and
_____________________________________________ (the "Assignee") agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee without
recourse, representation or warranty except as specifically set
forth herein, and the Assignee hereby purchases and assumes
from the Assignor, a ___________% interest in and to all the
Assignor's rights and obligations under the Credit Agreement
and the other Loan Documents as of the Effective Date (as
defined below) (including, without limitation, such percentage
interest in the Commitments of the Assignor on the Effective
Date and such percentage interest in the Loans owing to, and
Letter of Credit Liabilities (including participations
purchased pursuant to the Credit Agreement) held by, the
Assignor outstanding on the Effective Date together with such
percentage interest in all unpaid interest and fees accrued
from the Effective Date).
2. The Assignor (i) represents that as of the date hereof, its
Revolving Commitment is $_____________, the outstanding
principal balance of its Revolving Loans is $_____________, and
the outstanding Letter of Credit Liabilities (including
participations purchased pursuant to the Credit Agreement) held
by it is $____________, the outstanding Swingline Loans
(including participations purchased pursuant to the Credit
Agreement) held by it is $____________, and the outstanding
principal balance of its Term Loan is $____________ (all as
unreduced by any assignments which have not yet become
effective); (ii) makes no representation or warranty and
assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document or the execution,
legality, validity, enforceability, genuineness, sufficiency,
or value of the Credit Agreement or any other Loan Document,
other than that it is the legal and beneficial owner of the
interest being assigned by it hereunder and that such interest
is free and clear of any adverse claim; (iii) makes no
representation or warranty and
2
assumes no responsibility with respect to the financial
condition of the Borrower or any Obligated Party or the
performance or observance by the Borrower or any other
Obligated Party of any of their obligations under the Agreement
or any other Loan Document; and (iv) attaches the Notes held by
the Assignor and requests that the Agent exchange such Notes
for new Notes payable to the order of (A) the Assignee in
amounts equal to the Commitments assumed by the Assignee
pursuant hereto and the outstanding principal amount of the
Loans assigned to the Assignee pursuant hereto, as applicable,
and (B) the Assignor in amounts equal to the Commitments and
Loans retained by the Assignor under the Credit Agreement, as
specified above.
3. The Assignee (i) represents and warrants that it is legally
authorized to enter in this Assignment and Acceptance; (ii)
confirms that it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements
delivered pursuant to Section 9.1 thereof, and such other
documents and information as ----------- it has deemed
appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (iii) agrees that it
will, independently and without reliance upon the Agent, the
Assignor, or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action
under the Credit Agreement and the other Loan Documents; (iv)
confirms that it is eligible to be an Assignee; (v) appoints
and authorizes the Agent to take such action on its behalf and
to exercise such powers under the Loan Documents as are
delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (vi) agrees that
it will perform in accordance with their terms all obligations
which by the terms of the Credit Agreement and the other Loan
Documents are required to be performed by it as a Bank; [and
(vii) attaches the forms prescribed by the Internal Revenue
Service of the United States certifying as to the Assignee's
exemption from United States withholding taxes with respect to
all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate
that all such payments are subject to such tax at a rate
reduced by an applicable tax treaty].1
4. The effective date for this Assignment and Acceptance shall be
_______________, ____ (the "Effective Date").2 Following the
execution of this Assignment and Acceptance, it will be
delivered to the Agent for
- ----------------------------
1 If the Assignee is organized under the laws of a jurisdiction outside
the United States.
2 Such date shall be at least __________ (____) Business Days after the
execution of this Assignment and Acceptance and delviery thereof to
the Agent.
3
acceptance and recording by the Agent.
5. Upon such acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and
Acceptance, shall have the rights and obligations of a Bank
thereunder and under the other Loan Documents and (ii) the
Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Loan
Documents.
6. Upon such acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of
the interest assigned hereby (including payments of principal,
interest, fees, and other amounts) to the Assignee. The
Assignor and the Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Note
for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Texas
and applicable laws of the United States of America.
[NAME OF ASSIGNOR]
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[NAME OF ASSIGNEE]
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
ACCEPTED BY:
BANKBOSTON, N.A., as Agent
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
4
EXHIBIT "H"
to
DARLING INTERNATIONAL INC.
CREDIT AGREEMENT
Compliance Certificate
----------------------
COMPLIANCE CERTIFICATE
for the
quarter ending ________ __, ____
To: BankBoston, N.A.
100 Federal Street
Boston, MA 02110
and each Bank
Ladies and Gentlemen:
This Compliance Certificate (the "Certificate") is being delivered
pursuant to subsection 9.1(d) of that certain Amended and Restated Credit
Agreement (as amended, the "Agreement") dated as of January 22, 1999 among
DARLING INTERNATIONAL INC. (the "Borrower"), BANKBOSTON, N.A., as agent, and the
Banks named therein. All capitalized terms, unless otherwise defined herein,
shall have the same meanings as in the Agreement. All the calculations set forth
below shall be made pursuant to the terms of the Agreement.
The undersigned, an authorized financial officer of the Borrower, does
hereby certify to the Agent and the Banks that:
1. DEFAULT.
No Default has occurred and is continuing or if a Default has occurred
and is continuing, I have described on the attached Exhibit "A" the
nature thereof and the steps taken or proposed to remedy such Default.
Compliance
----------
2. SECTION 9.1 - Financial Statements and Records
(a) Annual audited financial statements of the Borrower on or Yes No N/A
before 115 days after the end of each Fiscal Year.
(b) Monthly unaudited financial statements, related reports Yes No N/A
of the Borrower and new certificates of title and other
collateral within forty-five (45) days after each 4 or 5
week period or within ninety (90) days of last such
period in a Fiscal Year.
(c) Semi-monthly status report of the Borrower on the first Yes No N/A
Business Day and fifteenth day of each month.
(d) Annual projections of Borrower within forty-five (45) Yes No N/A
days of the beginning of each Fiscal Year.
1
3. SECTION 10.1 - Debt
No additional Debt except:
(a) Debt described on Schedule 10.1 of the Agreement.
(b) Intercompany debt owed by Insignificant Subsidiaries not
to exceed: $200,000
Actual intercompany debt owed by Insignificant
Subsidiaries: $________ Yes No
(c) Actual intercompany owed by foreign Subsidiaries not to
exceed (plus $1,000,000 to Darling International, Ltd.,
----
if necessary to pay taxes): $1,000,000
Actual intercompany debt owed by foreign Subsidiaries:
(d) Purchase money Debt not to exceed (in addition to Debt $________ Yes No
disclosed on Schedule 10.1):
-------------
Actual Outstanding: $2,000,000
(e) Guarantees not to exceed: $________ Yes No
Actual Outstanding: $1,000,000
(f) Debt from noncompetes and similar agreements (if $________ Yes No
approved) entered into after the Closing Date with
payments in any Fiscal Year not to exceed:
Actual payment requirements under approved noncompetes $500,000
for the current Fiscal Year:
(g) Raw material Supplier Debt Guaranteed not to exceed: $________ Yes No
(i) $2,000,000, minus
-----
(ii) Prepayment for raw materials purchased from Raw
Material Suppliers: $2,000,000
(iii) Total
(iv) Actual Raw Material Supplier Debt Guaranteed: $________
(h) Other Debt not to exceed: $________
Actual Outstanding:
$________ Yes No
$1,000,000
$________ Yes No
5. SECTION 10.5 - Investments
(a) Existing Investments on the Closing Date:
(b) Employee loans and advances not to exceed: $100,000
Actual: $________ Yes No
(c) Advances for prepayment for raw materials purchased from
Raw Material Suppliers not to exceed $2,000,000 minus
line 3(g)(iv) above: $________
Actual: $________ Yes No
(d) Loans evidencing the deferred payment of assets sold
pursuant to subsection 10.8: $________ Yes No
---------------
(e) Other loans, advances or investments not to exceed : $500,000
Actual: $________ Yes No
6. SECTION 10.8 - Asset Sales Sales Price
-------------------------- -----------
(a) Schedule 10.8 assets sold in current period:
1.
2.
(b) International Processing Corporation ("IPC") stock:
(c) International Transportation Services, Inc. ("ITS")
stock:
2
(d) Permitted real property sales:
1.
2.
7. SECTION 11.1 - Consolidated Net Worth
(a) At all times during the 1999 Fiscal Year: $30,000,000;
At all times thereafter: $20,000,000
(b) Actual Consolidated Net Worth $__________
(i) stockholders' equity
(ii) gains and/or losses from sale of assets, $__________
discontinued operations or assets held for sale
(iii) restructuring and severance costs (not to exceed
$1,500,000) $__________
(iv) IRS Audit Adjustments (not to exceed $1,000,000)
(v) stockholders' equity of IPC and ITS $__________
(vi) 7(i) excluding 7(ii) through 7(v)
$__________
$__________ Yes No
$__________
8. SECTION 11.2 - Adjusted EBITDA
(a) (i) Net Income or loss, $__________
(ii) Less income of a Person not received, ($_________)
(iii) Less gains attributed to asset dispositions (or
plus losses attributed to asset dispositions), ($_________)
(iv) Less extraordinary, non-cash or nonrecurring
gains or credits (plus extraordinary, non-cash
or nonrecurring losses or debits), ($_________)
(v) Sum of 8(a)(i) through 8(a)(iv) (Net Income): $__________
(b) EBITDA
(i) Net Income (line 8(a)(v)), $__________
(ii) Plus, provisions for (or less any benefit from)
---- ----
taxes, $__________
(iii) Plus, Net Interest Expense, $__________
----
(iv) Plus, amortization and depreciation expense, $__________
----
(v) Less, gains (or plus losses) from dispositions
---- ----
of assets (to the extent not included in
8(a)(iii)), ($__________)
(vi) Less, gains (or plus losses) from the
---- ----
classification of the operations of IPC and ITS
as discontinued operations or assets held for ($__________)
sale (to the extent not included in 8(a)(iii)),
(vii) Less, gains (or plus losses) from restructuring ($__________)
and severance costs (up to $1,500,000),
(viii) Less IPC and ITS EBITDA
(c) Adjusted EBITDA (sum of 8(b)(i) through 8(b)(vii) for ($__________)
the periods set forth in Section 11.2): ($__________)
------------
(d) Minimum required Adjusted EBITDA (set forth in Section
11.2): $__________ Yes No
$__________
3
9. SECTION 11.3 - Interest Coverage
(a) Adjusted EBITDA (from 8(c); for the periods set forth in
$__________ Section 11.3):
(b) Consolidated Interest expense (excluding IPC and ITS
interest expense): $__________
(c) Actual Interest Coverage 9(a) / 9(b) = ____:1.00
(d) Minimum required Interest Coverage ____:1.00 Yes No
10. SECTION 11.4 - Capital Expenditure Limit
(a) (i) Limit set forth in Section 11.4 for the current
period end, $_________
(ii) Plus, 25% of Excess Cash Flow (for 2000 Fiscal
----
Year only), $_________
(iii) Capital Expenditure limit: $_________
(b) (i) Actual Capital Expenditures for the current
period end, $_________
(ii) Less, actual Capital Expenditures to replace
----
facility in Las Vegas, NV (applies only to 1FQ99
and 2FQ99), ($________)
(iii) Less IPC and ITS Capital Expenditures, ($________)
(iv) Less permitted reinvestment of casualty and
condemnation proceeds, ($________)
(iv) Actual Capital Expenditures (sum of 10(b)(i)
through 10(b)(iv)): $_________ Yes No
(c) 1FQ99 Capital Expenditures not to exceed: $3,000,000
(d) Actual Capital Expenditures for 1FQ99: $_________ Yes No
(e) 1FQ99 and 2FQ99 Capital Expenditures not to exceed:
(f) Actual Capital Expenditures for 1FQ99 and 2FQ99: $7,000,000
(g) IPC and ITS Capital Expenditures not to exceed in 1FQ99: $_________ Yes No
(h) Actual IPC and ITS Capital Expenditures for 1FQ99:
(i) IPC and ITS Capital Expenditures as of each Fiscal $600,000
Quarter end after 1FQ99 not to exceed combined EBITDA of
IPC and ITS for current Fiscal Year (as detailed on $_________ Yes No
Schedule):
(j) Actual IPC and ITS Capital Expenditures for current period:
(k) Limit on Capital Expenditures to replace facility in Las $_________
Vegas, NV
(i) $750,000 1FQ99: $_________ Yes No
(ii) Aggregate for 1FQ99 and 2FQ99:
(iii) Aggregate for 1FQ99, 2FQ99, and thereafter:
(l) Actual Capital Expenditures to replace facility in Las $750,000
Vegas, NV $1,500,000
(i) 1FQ99: $2,500,000
(ii) 1FQ99 plus 2FQ99:
(iii) 1FQ99, 2FQ99, and thereafter:
$_________ Yes No
$_________ Yes No
$_________ Yes No
4
12. ATTACHED SCHEDULES
Attached hereto as schedules are the calculations supporting the
computations set forth above in this Certificate. All information
contained herein and on the attached schedules is true and correct.
13. FINANCIAL STATEMENTS
The unaudited financial statements attached hereto were prepared in
accordance with GAAP and fairly present (subject to year end audit
adjustments) the financial conditions and the results of the operations
of the Persons reflected thereon, at the date and for the periods
indicated therein.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
effective this _______ day of ------------, -----.
DARLING INTERNATIONAL INC.
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
5