PILGRIM'S PRIDE CORPORATION
and
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY and
SIGNATURE 1A (CAYMAN), LTD.
AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
Dated April 14, 1997
$85,000,000 Notes
TABLE OF CONTENTS
ARTICLE PAGE
EXHIBITS
A-1 Form of Fixed Note
A-2 Form of Floating Note
B Form of Texas Deed of Trust and Security Agreement
C Receipt of Funds
D Closing Certificate
E Form of Guaranty Agreement
F Officer's Certificate
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
This Amended and Restated Note Purchase Agreement (this "Agreement")
dated April 14, 1997, by and between ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance
Company ("▇▇▇▇▇▇▇"), Signature 1A (Cayman), Ltd. ("Signature") (▇▇▇▇▇▇▇ and
Signature are individually referred to as a "Purchaser" and collectively,
"Purchasers") and Pilgrim's Pride Corporation, a Delaware corporation (the
"Company").
R E C I T A L S :
WHEREAS, the Company previously sold to ▇▇▇▇▇▇▇ its 7.21% Fixed Rate
Note in the aggregate principal amount of $50,000,000 (the "1996 Note")
pursuant to a Note Purchase Agreement dated February 15, 1996 (the
"Original Note Purchase Agreement") between ▇▇▇▇▇▇▇ and the Company;
WHEREAS, in connection with the Green Acre Acquisition (as defined
herein), the Company will assume $7,238,195 of notes payable to ▇▇▇▇▇▇▇ and
desires to amend and restate such notes by the issuance of new fixed rate
notes to ▇▇▇▇▇▇▇;
WHEREAS, the Company desires to issue and sell to Purchasers an
additional $27,761,805 of its notes for the purpose of financing the Green
Acre Acquisition and for future expansion; and
WHEREAS, the parties desire to amend and restate the Original Note
Purchase Agreement in its entirety pursuant to the terms and conditions of
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in this Agreement, the parties to this Agreement
mutually agree as follows:
ARTICLE .."
DEFINITIONS
.. DEFINED TERMS... DEFINED TERMS." As used herein the following
terms have the following respective meanings:
ACQUIRED PROPERTY: the meaning specified in Section 9.4.
ADDITIONAL FIXED NOTES: the meaning specified in Section 2.5.
ADDITIONAL FLOATING NOTES: the meaning specified in Section 2.5.
ADDITIONAL NOTES: collectively, the Additional Fixed Notes and
Additional Floating Notes, if any.
ADVERSE ENVIRONMENTAL IMPACT: the meaning specified in Section 11.1.
AFFILIATE: with respect to any Person, (a) any other Person directly
or indirectly controlling, controlled by or under direct or indirect common
control with, such Person, or (b) any director, officer, partner or
employee of such Person. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by contract or
otherwise. The term "control" shall mean the possession, direct or
indirect, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and shall in any event include the
ownership or power to vote ten percent (10%) or more of the outstanding
equity interests of such other Person. For purposes hereof, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Midland Company ("ADM") shall not be deemed an Affiliate of the Company so
long as ADM does not own or control more than twenty percent (20%) of the
outstanding stock of the Company.
APPRAISED VALUE: The appraised value of the Mortgaged Properties, as
determined by ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, MIA, or such other appraiser selected by
Purchasers.
BANKRUPTCY CODE: the meaning provided in Section 14.1(f).
BUSINESS DAY: any day on which national banks are open in Dallas,
Texas and Boston, Massachusetts.
CALLED PRINCIPAL: with respect to any Fixed Note, the principal of
such Fixed Note that is to be prepaid pursuant to Section 8.2 or is
declared to be immediately due and payable pursuant to Article 14, as the
context requires.
CAPITAL EXPENDITURES: for any period, expenditures (including,
without limitation, the aggregate amount of Capital Lease Obligations
incurred during such period) made by the Company or any Subsidiary to
acquire or construct fixed assets, plant and equipment (including renewals,
improvements and replacements, but excluding repairs) during such period
computed in accordance with GAAP.
CAPITAL LEASE OBLIGATIONS: all obligations to pay rent or other
amounts under a lease of (or other agreement conveying the right to use)
Property to the extent such obligations are required to be classified and
accounted for as a capital lease on a balance sheet under GAAP, and for
purposes of this Agreement, the amount of such obligation shall be the
capitalized amount thereof, determined in accordance with GAAP.
CERTIFICATE: the meaning specified in Section 4.1(d).
CLOSING: the meaning specified in Article 3.
CLOSING DATE: the meaning specified in Article 3.
CODE: the Internal Revenue Code of 1986, as amended from time to
time.
COLLATERAL: the Mortgaged Properties and the properties described in
the Financing Statements.
COLLATERAL AGREEMENTS: the Security Documents, the Financing
Statements, the Receipt of Funds, the Certificate and all other documents
and instruments that may be executed or delivered hereunder or in
connection herewith.
COMMISSION: the Securities and Exchange Commission or any other
Federal agency at the time administering the Securities Act.
COMPANY: Pilgrim's Pride Corporation, a Delaware corporation, or any
successor thereto by merger, consolidation, or otherwise.
CONSOLIDATED INTEREST EXPENSE: for any period, the aggregate
consolidated interest expense of the Company and the Subsidiaries for such
period, as determined in accordance with GAAP (minus, to the extent
included therein, any interest expense not paid or payable in cash)
including, without limitation (and without duplication in any instance),
(a) all interest paid on Debt of the Company and the Subsidiaries, (b) all
commissions, discounts and other fees and charges owed with respect to
letters of credit and banker's acceptances allocable to or amortized over
such period, (c) net costs under Interest Rate Agreements and (d) the
portion of any amount payable under Capital Lease Obligations that is, in
accordance with GAAP, allocable to interest expense.
CONSOLIDATED NET INCOME: for any period means all amounts which, in
conformity with GAAP, would be included under net income (or deficit) on a
consolidated income statement of the Company and the Subsidiaries for such
period, after deducting all operating expenses, provisions for all taxes
and reserves (including, but not limited to, reserves for deferred income
taxes), and all other proper deductions, all in conformity with GAAP.
CONSOLIDATED WORKING CAPITAL: total Current Assets less Current
Liabilities of the Company and its Subsidiaries on a consolidated basis.
CURRENT ASSETS: the consolidated assets of the Company and its
Subsidiaries which can be readily converted into cash within one year and
all other assets deemed current assets in accordance with GAAP.
CURRENT LIABILITIES: Debt, trade payables, accrued expenses and other
obligations which must be satisfied or have maturities within one year,
including the outstanding balance of the Company's revolving credit
facility which may be due and payable within one year.
DEBT: (a) indebtedness for borrowed money, including long-term and
short-term debt, obligations and liabilities secured by any Lien existing
on property owned subject to such Lien, whether or not the indebtedness,
obligation or liability secured thereby shall have been assumed, and (b)
all guarantees given by such Person (other than with respect to the
Company, guarantees of trade payables of Pilgrim's Pride-Mexico).
DEFAULT RATE: an amount equal to the applicable interest rate for
each Note plus two percent (2%), but not to exceed the Highest Lawful Rate.
DISCOUNTED VALUE: with respect to the Called Principal of any Fixed
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on a semiannual basis) equal to the Reinvestment Yield with
respect to such Called Principal.
EBITDA: for any period, shall mean consolidated net income of the
Company and the Subsidiaries after restoring amounts deducted for
depreciation, amortization, interest expense and taxes.
ELIGIBLE SUBSIDIARY: any corporation or other legal entity organized
under the laws of a state of the United States and located entirely within
the United States and 100% of all equity interests of which is owned by the
Company either directly or through another Eligible Subsidiary.
ENVIRONMENTAL ACTIVITY: the meaning specified in Section 11.1.
ENVIRONMENTAL CERTIFICATE: the meaning specified in Section 4.1(o).
ENVIRONMENTAL CONDITION: the meaning specified in Section 11.1.
ENVIRONMENTAL DAMAGES: the meaning specified in Section 11.1.
ENVIRONMENTAL LAWS: the meaning specified in Section 11.1.
ERISA: the Employee Retirement Income Security Act of 1974, as
amended from time to time.
EVENT OF DEFAULT: the meaning specified in Section 14.1.
EXCHANGE ACT: the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission thereunder, all as the same
shall be in effect at the time.
FINANCIAL STATEMENTS: the meaning specified in Section 5.3.
FINANCING STATEMENTS: the meaning specified in Section 4.1(d).
FISCAL YEAR: the fiscal year of the Company for purposes of
Article 9.
FIXED CHARGE COVERAGE RATIO: the ratio of (A) EBITDA plus total lease
payments relating to non-cancelable operating leases (other than payments
under Capital Lease Obligations) to (B) the sum of (i) Consolidated
Interest Expense, (ii) total lease payments relating to non-cancelable
operating leases (other than Capital Lease Obligations), (iii) principal
payments due on or scheduled mandatory redemptions of Debt (including the
Notes) within one year, whether or not actually paid and (iv) the current
portion of Capital Lease Obligations, all determined on a consolidated
basis for the Company and its Subsidiaries.
FIXED NOTES: the 1997 Fixed-A Note, the 1997 Fixed-B Note and any
Additional Fixed Notes.
FLOATING NOTES: the 1997 Floating Notes and any Additional Floating
Notes.
GAAP: generally accepted accounting principles as set forth from time
to time in the opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements of the Financial
Accounting Standards Board or in such opinions and statements of such other
entities as shall be approved by a significant segment of the accounting
profession.
GOVERNMENTAL AUTHORITY: any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government.
GREEN ACRE: Green Acre Foods, Inc., a Texas corporation.
GREEN ACRE ACQUISITION: the acquisition by the Company of certain
assets from Green Acre, as contemplated by the Green Acre Purchase
Agreement.
GREEN ACRE NOTES: collectively, the Green Acre A Note and the Green
Acre B Note.
GREEN ACRE A NOTE: the Promissory Note dated April 26, 1990 in the
original principal amount of $16,000,000 issued by Green Acre and Green
Acre Farms, Inc. that is being assumed by the Company pursuant to the Green
Acre Acquisition.
GREEN ACRE B NOTE: the Promissory Note dated December 11, 1990 in the
original principal amount of $3,300,000 issued by Green Acre and Green Acre
Farms, Inc. that is being assumed by the Company pursuant to the Green Acre
Acquisition.
GREEN ACRE PURCHASE AGREEMENT: the Asset Purchase Agreement dated as
of February 21, 1997 between the Company and Green Acre, as delivered to
Purchasers.
HAZARDOUS SUBSTANCES: the meaning specified in Section 11.1.
HIGHEST LAWFUL RATE: the meaning specified in Section 16.4.
INDEMNIFIED PARTY: the meaning specified in Section 11.2.
INTEREST PERIOD: with respect to the Floating Notes, a period
commencing (i) in the case of the initial Interest Period thereunder, on
the Closing Date (with respect to the 1997 Floating Notes) or the date of
issuance thereof (with respect to any Additional Floating Notes) or (ii) in
the case of subsequent Interest Periods thereunder, on the termination date
of the immediately preceding Interest Period applicable thereto in the case
of a rollover to a new Interest Period in accordance with Section 7.2, and
ending in each case three months, six months or one year thereafter as the
Company shall select in accordance with Section 7.2; provided, however,
that (A) any Interest Period that would otherwise end on a day that is not
a LIBOR Business Day shall be extended to the next succeeding LIBOR
Business Day unless such next succeeding LIBOR Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding LIBOR Business Day and (B) any Interest Period that would
otherwise end after the Maturity Date shall end on the Maturity Date.
INTEREST RATE AGREEMENT: any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest
rate cap or other interest rate hedge or arrangement under which the
Company or any of the Subsidiaries is a party or a beneficiary.
INTEREST RATE SET WINDOW: the period of time not more than ten (10)
days nor less than five (5) days prior to the commencement of each Interest
Period.
INVESTMENT: any direct or indirect purchase or other acquisition by a
Person of stock or other securities of any other Person, or any direct or
indirect loan, advance or capital contribution by a Person to any other
Person, including all indebtedness and accounts receivable from such other
Person that did not arise from sales to such other Person in the ordinary
course of business.
LAW: the meaning specified in Section 11.4(c).
LIBOR BUSINESS DAY: a Business Day on which dealings in dollars are
carried out in the London interbank eurodollar market.
LIBOR PREMIUM: with respect to any Floating Note, a premium of (i)
three percent (3%) of the principal amount prepaid, if the prepayment
occurs on or before the date that is two years following the date of
issuance of such Floating Note, (ii) two percent (2%) of the principal
amount prepaid, if the prepayment occurs after the date that is two years
following and on or before the date that is three years following the date
of issuance of such Floating Note, and (iii) one percent (1%) of the
principal amount prepaid, if the prepayment occurs after the date that is
three years following and on or before the date that is four years
following the date of issuance of such Floating Note.
LIBOR RATE: for any Interest Period in effect under the Floating
Notes, the rate announced in THE WALL STREET JOURNAL (Northeast Edition) as
the London Interbank Offered Rates (LIBOR) for a period of corresponding
duration.
LIEN: with respect to any Property, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement, a Person shall be deemed to own,
subject to a Lien, any Property that it has acquired or holds subject to
the interest of a vendor or lessor under any conditional sale agreement,
capital lease or other title retention agreement (other than an operating
lease) relating to such Property.
MAKE-WHOLE PREMIUM: with respect to any Fixed Note (including any
Floating Note that becomes a Fixed Note pursuant to the Company's election
to fix the interest rate thereunder in accordance with Section 7.3), a
premium equal to the excess, if any, of the Discounted Value of the Called
Principal of such Fixed Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the
Settlement Date with respect to such Called Principal. The Make-Whole
Premium shall in no event be less than zero.
MATERIAL ADVERSE EFFECT: a material adverse effect on the business,
operations, affairs, condition, properties or prospects of the Company, or
the ability of the Company to perform its obligations hereunder or under
the Collateral Agreements.
MATURITY DATE: February 28, 2006 or March 1, 2003, as provided in
Sections 7.4 and 8.1(f) or such earlier date upon which the maturity of
the Notes is accelerated pursuant to Section 14.2.
MOODY'S: ▇▇▇▇▇'▇ Investors Services, Inc.
MORTGAGED PROPERTIES: the aggregate of all properties pledged,
conveyed and encumbered under or pursuant to the Security Documents.
NET TANGIBLE ASSETS: total consolidated assets of the Company and its
Subsidiaries less consolidated intangible assets of the Company and its
Subsidiaries such as goodwill, patents and similar assets that would be of
an intangible nature in accordance with GAAP.
1997 FIXED-A NOTE: the meaning specified in Section 2.2.
1997 FIXED-B NOTE: the meaning specified in Section 2.2.
1997 FLOATING NOTES: the meaning specified in Section 2.3.
1996 NOTE: the Company's 7.21% Fixed Rate Note in the original
principal amount of $50,000,000 issued to ▇▇▇▇▇▇▇ pursuant to the Original
Note Purchase Agreement.
1997 NOTES: collectively, the 1997 Fixed-A Note, the 1997 Fixed-B
Note and the 1997 Floating Notes.
NOTES: collectively, the 1996 Note, the 1997 Notes and the Additional
Notes, if any.
OFFICERS' CERTIFICATE: a certificate executed by the Chief Financial
Officer of the Company.
ORIGINAL SECURITY DOCUMENTS: the Texas Deed of Trust and Security
Agreement, the Arkansas Mortgage and Security Agreement and the Assignment
of Leases, each dated February 15, 1996, that were executed and delivered
by the Company pursuant to the Original Note Purchase Agreement.
PBGC: the Pension Benefit Guaranty Corporation or any governmental
authority succeeding to any of its functions.
PAYMENT DATE: the first day of each calendar month, but if such day
is not a Business Day, the first Business Day of such month.
PERMITTED EXCEPTIONS: those Liens permitted under the Security
Documents.
PERMITTED INVESTMENTS: (a) direct obligations of the United States,
or of any agency thereof, or obligations guaranteed as to principal and
interest by the United States, or of any agency thereof, in either case
maturing not more than one year from the date of acquisition thereof; (b)
direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality
thereof maturing within one year from the date of the acquisition thereof
and, at the time of such acquisition, having the highest rating obtainable
from either S&P or Moody's; (c) certificates of deposit issued by any bank
or trust company organized under the laws of the United States or any state
thereof and having capital, surplus and undivided profits of at least
$50,000,000, maturing not more than six months from the date of acquisition
thereof; (d) commercial paper rated A-1 or better or P-1 or better by S&P
or Moody's, respectively, maturing not more than six months from the date
of acquisition thereof; and (e) Eurodollar time deposits having a maturity
of less than six months purchased directly from any such bank (whether such
deposit is with such bank or any other such bank). Notwithstanding the
foregoing, the Company shall be permitted to have collected balances with
First State Bank of Pittsburg, Pittsburg, Texas, in an amount not to exceed
at any time 80% of such Bank's capital base.
PERSON: a corporation, an association, a partnership, an
organization, a business, an individual, a government or political
subdivision thereof or a governmental agency.
PILGRIM'S PRIDE-MEXICO: Pilgrim's Pride S.A. de C.V., a Mexican
corporation and a wholly owned subsidiary of the Company.
PLAN: an "employee pension benefit plan" (as defined in Section 3(2)
of ERISA) that is or has been established or maintained, or to which
contributions are or have been made, by the Company or any of the
Subsidiaries or any Related Person with respect to any of them, or an
employee pension benefit plan as to which the Company or any of the
Subsidiaries or any Related Person with respect to any of them, would be
treated as a contributory sponsor under Section 4069 of ERISA if it were to
be terminated.
POTENTIAL EVENT OF DEFAULT: a default that, with notice or lapse of
time or both, becomes an Event of Default.
PREMIUM: a LIBOR Premium or a Make-Whole Premium, as the case may be.
PROPERTY: any right or interest in or to property of any kind
whatsoever, whether real, personal (including, without limitation, cash) or
mixed and whether tangible or intangible.
PURCHASERS: ▇▇▇▇▇▇▇ and Signature and their respective successors and
assigns.
RECEIPT OF FUNDS: the meaning specified in Section 4.1(d).
REINVESTMENT YIELD: with respect to the Called Principal of any Fixed
Note, the yield to maturity implied by (a) the yields reported, as of 10:00
a.m. (New York City time) on the Business Day next preceding the Settlement
Date with respect to such Called Principal, on the display designated as
"Page 5" on the Telerate Service (or such other display as may replace Page
5 on the Telerate Service) for actively traded U.S. Treasury securities
having a maturity equal to the Remaining Life of such Called Principal as
of such Settlement Date, plus 100 basis points or (b) if such yields shall
not be reported as of such time or the yields reported as of such time
shall not be ascertainable, the Treasury Constant Maturity Series yields
reported, for the latest day for which such yields shall have been so
reported as of the Business Day next preceding the Settlement Date with
respect to such Called Principal, in Federal Reserve Statistical Release
H.15 (519) (or any comparable successor publication) for actively traded
U.S. Treasury securities having a constant maturity equal to the Remaining
Life of such Called Principal as of such Settlement Date, plus 100 basis
points. Such implied yield shall be determined, if necessary, by (x)
converting U.S. Treasury ▇▇▇▇ quotations to bond-equivalent yields in
accordance with accepted financial practice and (y) interpolating linearly
between reported yields.
RELATED PERSON: as to any Person, either (a) any corporation or trade
or business that is a member of the same controlled group of corporations
(within the meaning of Section 414(b) of the Code) as such Person, or
(b) is under common control (within the meaning of Section 414(c) of the
Code) with such Person, or (c) is a member of any affiliated service group
(within the meaning of Section 414(m) of the Code) that includes such
Person, or (d) is otherwise treated as part of the controlled group that
includes such Person (within the meaning of Section 414(o) of the Code).
RELEASE: the meaning specified in Section 11.1.
REMAINING LIFE: with respect to the Called Principal of any Fixed
Note, the number of years (calculated to the nearest one-twelfth year) that
will elapse between the Settlement Date with respect to such Called
Principal and the scheduled due date of such Remaining Scheduled Payment.
REMAINING SCHEDULED PAYMENTS: with respect to the Called Principal of
any Fixed Note, all payments of such Called Principal and interest thereon
that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date.
REPORTABLE QUANTITY: the meaning specified in Section 11.1
RESPONSIBLE OFFICER: the Executive President, the Secretary, the
Treasurer, the Chief Executive Officer, the Chief Operating Officer or the
Chief Financial Officer of the Company.
S&P: Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc.
SCHEDULE OF INFORMATION FOR PAYMENT AND NOTICES: the meaning
specified in Article 13.
SECURED DEBT: all indebtedness for borrowed money or evidenced by a
bond, debenture, note or similar evidence of indebtedness, which is secured
by a Lien on any assets of the Company or any Subsidiary or any shares of
stock or Debt of any Subsidiary.
SECURITIES ACT: the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
SECURITY DOCUMENTS: the Original Security Documents and the documents
delivered pursuant to clauses (i), (ii), and (iii) of Section 4.1(d).
SETTLEMENT DATE: with respect to the Called Principal of any Fixed
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or is declared to be immediately due and payable pursuant to
Article 14.
SPECIAL COUNSEL: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇ (A Professional
Corporation), as special counsel to Purchasers in connection with this
Agreement.
STOCK: all shares, options, warrants, interests, participations or
other equity equivalents (regardless of how designated) of a corporation or
equivalent entity whether voting or nonvoting, including, without
limitation, common stock, preferred stock, or any other "equity security"
(as such term is defined in Rule 3(a)11-1 of the General Rules and
Regulations promulgated by the Commission under the Exchange Act).
SUBORDINATED DEBT: all Debt of the Company that by its terms is
subordinated to any other Debt.
SUBSIDIARY: any corporation or other entity of which more than 50% of
the outstanding voting shares are at the time owned (either alone or
through Subsidiaries or together with Subsidiaries) by the Company or
another Subsidiary.
TOTAL LIABILITIES: total consolidated liabilities of the Company and
its Subsidiaries as shown on its annual audited balance sheet, determined
in accordance with GAAP.
UNFUNDED CURRENT LIABILITY: as to any Plan, the amount, if any, by
which the actuarial present value of the accumulated plan benefits under
the Plan as of the close of its most recent plan year, determined in
accordance with Statement of Financial Accounting Standards No. 35, based
upon the actuarial assumptions used by the Plan's actuary in the most
recent annual valuation of the Plan, exceeds the fair market value of the
assets allocable thereto, determined in accordance with Section 412 of the
Code.
WELFARE PLAN: an employee welfare benefit plan (as defined in
Section 3(1) of ERISA) or a group health plan (as defined in
Section 4980B(g)(2) of the Code) which is or has been established or
maintained, or to which contributions are or have been made, by the Company
or any of the Subsidiaries or any Related Person with respect to any of
them.
.. MISCELLANEOUS... MISCELLANEOUS." References herein to an
"Exhibit" or "Schedule" are, unless otherwise specified, to one of the
exhibits or schedules attached to this Agreement, and references herein to
a "Section" are, unless otherwise specified, to one of the Sections of this
Agreement. As used in this Agreement, the words "herein," "hereof,"
"hereby," and "hereunder" refer to this Agreement as a whole and not to any
particular Section or subdivision of this Agreement. References herein to
masculine or neuter are construed to include masculine, feminine or neuter,
where applicable, and references herein to singular include plural and to
plural include singular, where applicable.
ARTICLE .."
THE NOTES
.. ISSUANCE OF 1996 NOTE... ISSUANCE OF 1996 NOTE." The Company
previously issued and sold to ▇▇▇▇▇▇▇ $50,000,000 aggregate principal
amount of its 7.21% Fixed Rate Note pursuant to the Original Note Purchase
Agreement. The 1996 Note shall continue to remain outstanding in
accordance with the terms of this Agreement and shall be payable as set
forth in Articles 7 and 8 hereof.
.. AUTHORIZATION OF 1997 FIXED-A NOTE AND 1997 FIXED-B NOTE...
AUTHORIZATION OF 1997 FIXED-A NOTE AND 1997 FIXED-B NOTE." In connection
with the Green Acre Acquisition, the Company assumed from Green Acre Foods,
Inc. the Green Acre Notes. The Company has authorized the issue and sale
of (i) $5,624,071.72 aggregate principal amount of its 9.39% Fixed Rate
Note (together with all notes issued in substitution or exchange therefor
pursuant to Article 12, the "1997 Fixed-A Note") in modification and
renewal of (and not a novation of) the Green Acre A Note and
(ii) $1,614,122.43 aggregate principal amount of its 9.45% Fixed Rate Note
(together with all notes issued in substitution or exchange therefor
pursuant to Article 12, (the "1997 Fixed-B Note") in modification and
renewal of (and not a novation of) the Green Acre B Note. Each of the 1997
Fixed-A Note and the 1997 Fixed-B Note will bear interest on the unpaid
principal balance thereof from the date of the Note as prescribed herein,
payable as set forth in Articles 7 and 8, will mature on February 28, 2006
and will be substantially in the form of EXHIBIT A-1.
.. AUTHORIZATION OF 1997 FLOATING NOTES... AUTHORIZATION OF 1997
FLOATING NOTES." The Company has authorized the issue and sale of
$12,761,805 aggregate principal amount of its Floating Rate Notes (together
with all notes issued in substitution or exchange therefor pursuant to
Article 12, the "1997 Floating Notes") pursuant to this Agreement. The
1997 Floating Notes will bear interest on the unpaid principal balance
thereof from the date of such Notes as prescribed herein, payable as set
forth in Articles 7 and 8, will mature on February 28, 2006 and will be
substantially in the form of EXHIBIT A-2.
.. SALE AND PURCHASE OF 1997 NOTES... SALE AND PURCHASE OF 1997
NOTES." The Company will issue and sell to Purchasers and, subject to the
terms and conditions hereof, at the Closing provided for in Article 3,
(i) ▇▇▇▇▇▇▇ will accept the 1997 Fixed-A Note and 1997 Fixed-B Note in
modification and renewal of the Green Acre Notes and (ii) Purchasers will
purchase from the Company, $12,761,805 aggregate principal amount of the
1997 Floating Notes in the proportions indicated on SCHEDULE I attached
hereto.
.. SALE AND PURCHASE OF ADDITIONAL NOTES... SALE AND PURCHASE OF
ADDITIONAL NOTES."
() The Company has authorized the issue and sale from time to
time of up to an additional $15,000,000 of its notes, consisting of
fixed rate notes (together with all notes issued in substitution or
exchange therefor pursuant to Article 12, the "Additional Fixed
Notes") and floating rate notes (together with all notes issued in
substitution or exchange therefor pursuant to Article 12, the
"Additional Floating Notes") pursuant to this Agreement. Each
Additional Note will be in the amount of $5,000,000 (or at Purchasers'
option, such smaller denominations that in the aggregate equal
$5,000,000), will bear interest on the unpaid principal balance
thereof from the date of the Note as prescribed herein, payable as set
forth in Articles 7 and 8, will mature on February 28, 2006 and will
be substantially in the form of EXHIBIT A-1 (in the case of Additional
Fixed Notes) or EXHIBIT A-2 (in the case of Additional Floating
Notes).
() The Company shall give Purchasers not less than ten (10)
Business Days prior written notice of its intent to issue and sell to
Purchasers an Additional Note, which at the Company's option may be
either an Additional Fixed Note or an Additional Floating Note. Each
Additional Note shall be in the amount of $5,000,000 (or allocated
between Purchasers as they direct). Each Additional Note shall be
issued and sold prior to April 1, 1999.
ARTICLE .."
CLOSING
The closing of the sale of the 1997 Notes to Purchasers (the
"Closing") shall take place at the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇ Rain ▇▇▇▇▇▇▇ (A
Professional Corporation), ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, at 10:00 a.m. Dallas, Texas time (with funding to occur no later
than 12:00 p.m. Eastern time), on such date as the parties may mutually
agree (the "Closing Date"). At the Closing, the Company will deliver to
each Purchaser the 1997 Notes in the form of a single Note or Notes as
prescribed by each such Purchaser, dated the Closing Date and registered in
such Purchaser's name (or the name of its nominee), against delivery by
such Purchaser to the Company of immediately available funds in the
aggregate amount of the purchase price therefor in the case of the 1997
Floating Notes.
ARTICLE .."
CONDITIONS TO CLOSING
.. CONDITIONS TO PURCHASE OF 1997 NOTES.. CONDITIONS TO PURCHASE OF
1997 NOTES". ▇▇▇▇▇▇▇'▇ obligation to accept the 1997 Fixed-A Note and the
1997 Fixed-B Note in modification and renewal of the Green Acre Notes and
each Purchaser's obligation to purchase the 1997 Floating Notes is subject
to the fulfillment to such Purchaser's satisfaction, at or prior to the
Closing, of the following conditions:
() OPINION OF COUNSEL. Purchaser shall have received an
opinion, dated the Closing Date and satisfactory in form and substance
to Purchaser, from (i) ▇▇▇▇▇▇ & Carlton, A Professional Corporation,
counsel for the Company, and (ii) Special Counsel covering such
matters relevant to the transactions contemplated hereby as Purchaser
may reasonably request.
() REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Company contained in this
Agreement shall be true and correct at the time of Closing as if made
at and as of such time, and the Company shall have complied with all
agreements and covenants hereunder required to be performed by the
Company on or prior to the time of Closing.
() NOTES. The 1997 Notes (with appropriate insertions) to be
issued to and accepted by Purchaser, shall have been duly executed by
the Company and delivered to Purchaser and shall be in full force and
effect and no term or condition thereof shall have been amended,
modified or waived, except with the prior written consent of Purchaser
and the Company.
() COLLATERAL AGREEMENTS.
() The Texas Deed of Trust and Security Agreement
substantially in the form of EXHIBIT B shall have been duly
executed and delivered by the Company for the benefit of
Purchaser and the registered holders from time to time of the
Notes, the beneficiary named in the Security Documents and shall
be in full force and effect.
() Amendments to the Original Security Documents (in which
the 1997 Notes and the Additional Notes are added as additional
obligations to be secured under the Original Security Documents)
shall have been duly executed and delivered by the Company for
the benefit of Purchaser and the registered holders from time to
time of the Notes and shall be in full force and effect.
() UCC-1 Financing Statements (the "Financing Statements")
shall have been duly executed and delivered by the Company.
() A Receipt of Funds, substantially in the form of
EXHIBIT C (the "Receipt of Funds"), shall have been duly executed
and delivered by the Company and shall be in full force and
effect.
() A certificate, substantially in the form of EXHIBIT D
(the "Certificate"), shall have been duly executed and delivered
by the Company and shall be in full force and effect.
() RECORDINGS, FILINGS AND PRIORITY. Except as waived in
writing by Purchaser, all recordings and filings of or with respect to
the Security Documents and the Financing Statements shall have been
duly made and all other instruments relating thereto shall have been
duly executed, delivered and recorded or filed, in all such places as
may be required by law, or as may be deemed necessary or desirable by
Special Counsel, in order to establish, protect and perfect as of the
Closing Date the interests and rights (and the priority thereof)
created or intended to be created thereby. The Lien of the Security
Documents and Financing Statements shall constitute a first Lien of
record on and a first security interest of record in the Mortgaged
Properties, subject only to the Permitted Exceptions.
() TITLE INSURANCE; SURVEY. Purchaser shall have received
(i) a mortgagee policy of title insurance with respect to the
Mortgaged Properties in the form promulgated in the State of Texas,
issued by a title underwriter acceptable to Purchaser, and containing
affirmative coverages and reinsurance arrangements and agreements
satisfactory in form and substance to Purchaser and Special Counsel,
insuring in the amount of approximately $35,000,000, Purchaser's
interest under the Security Documents as the holder of a valid first
lien of record on the Mortgaged Properties or, in the case of leased
properties, a valid first Lien on the Company's leasehold interest,
subject only to the Permitted Exceptions, containing no exception as
to creditors' rights, and containing affirmative zoning endorsements,
affirmative coverage as to claims and liens of mechanics and
materialmen, affirmative endorsements as to claims relating to the
environmental conditions of the Mortgaged Properties, and such other
affirmative conditions and coverages as are available and as Purchaser
may request, all satisfactory in substance and form to Purchaser and
Special Counsel; (ii) reports of Uniform Commercial Code searches in
the Uniform Commercial Code central filing office of the Secretary of
State of Texas issued by the State of Texas, and such other evidence
concerning Uniform Commercial Code filings as is requested by
Purchaser, in each case reasonably satisfactory in form and substance
to Purchaser and Special Counsel; (iii) a report of a tax and judgment
lien search in the recording district of each county or similar
jurisdiction where each of the Mortgaged Properties is located,
satisfactory in form and substance to Purchaser and Special Counsel;
and (iv) surveys of each part of the Mortgaged Properties as Purchaser
shall approve in accordance with ALTA/ACSM Class A standards and
certificates.
() COMPLIANCE WITH SECURITIES LAWS. The offering and sale of
the 1997 Notes to be issued at the Closing shall have complied with
all applicable requirements of federal and state securities laws, and
Purchaser shall have received evidence thereof reasonably satisfactory
to Purchaser and Special Counsel.
() PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated hereby
and all documents and instruments incident to such transactions shall
be reasonably satisfactory to Purchaser and Special Counsel, and
Purchaser and Special Counsel shall have received an original executed
counterpart of this Agreement, and all such other counterpart
originals or certified or other copies of such documents as Purchaser
or Special Counsel may reasonably request.
() NO EVENT OF DEFAULT OR POTENTIAL EVENT OF DEFAULT. There
shall not exist and, upon consummation of the transactions
contemplated hereby, there shall not exist any Event of Default or
Potential Event of Default.
() PAYMENT OF CLOSING FEES. The Company shall have paid the
reasonable fees, expenses and disbursements of Special Counsel and
special local counsel that are reflected in statements of such counsel
rendered prior to or on the Closing Date, without limitation on the
Company's obligation to pay any additional fees and disbursements of
all such counsel pursuant to Article 15.
() ORIGINAL DOCUMENTS. Purchaser shall have received an
original executed counterpart of the Notes, the Security Documents,
the Financing Statements, the Receipt of Funds, the Certificate, and
the title insurance policies and surveys referred to in
Section 4.1(f).
() LOAN TO APPRAISED VALUES. The Appraised Value of the
Mortgaged Properties shall be not less than $114,000,000.
() INSURANCE. Purchaser shall have received certificates
reasonably satisfactory to Purchaser as to, or copies of, all
insurance policies required by the Security Documents.
() DUE DILIGENCE. The results of any due diligence review of
the Company and the Subsidiaries and their respective Properties,
businesses, operations, affairs, results of operations, financial
condition and prospects and the proposed organizational, legal and tax
aspects of the proposed transactions, performed by or on behalf of
Purchaser shall be reasonably satisfactory to Purchaser and Special
Counsel.
() ENVIRONMENTAL MATTERS. The Company shall have delivered to
Purchaser a Phase I environmental assessment (either recently
completed at the request of Purchaser or previously completed for the
Company or to be completed together with updated reports with respect
thereto), addressed to Purchaser, in form and substance acceptable to
Purchaser and prepared by Law Engineering, Inc. (the "Environmental
Certificate"), to the effect that, except as otherwise disclosed in
writing, (i) all current activities at the Mortgaged Properties that
are acquired in the Green Acre Acquisition comply in all respects with
applicable requirements of any governmental authority relating to air
or water pollution, hazardous substance or waste management and
disposal, or other Environmental Laws, and (ii) none of the Mortgaged
Properties that are acquired in the Green Acre Acquisition is impacted
by Hazardous Substances in any respect that would require
investigation, reporting, monitoring, cleanup or other response under
current law.
() GUARANTY. Purchaser shall have received a Guaranty
Agreement substantially in the form of EXHIBIT E, executed by
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ with respect to the Company's obligations under the
Notes.
.. CONDITIONS TO PURCHASE OF ADDITIONAL NOTES.. CONDITIONS TO
PURCHASE OF ADDITIONAL NOTES". Each Purchaser's obligation to purchase
each Additional Note is subject to the fulfillment to Purchaser's
satisfaction prior to each such purchase of an Additional Note, of the
following conditions:
() REPRESENTATIONS, WARRANTIES AND COVENANTS. The
representations and warranties of the Company contained in this
Agreement shall be true and correct at the time of the purchase of
each Additional Note, as if made at and as of such time, and the
Company shall have complied with all agreements and covenants
hereunder required to be performed at or prior to the purchase of such
Additional Note.
() NOTES. The Additional Note, in the form and substance of
EXHIBIT A-1 (in the case of an Additional Fixed Note) or EXHIBIT A-2
(in the case of an Additional Floating Note) (with appropriate
insertions) to be issued to and accepted by Purchaser, shall have been
duly executed and delivered to Purchaser by the Company and shall be
in full force and effect and no term or condition thereof shall have
been amended, modified or waived, except with the prior written
consent of Purchaser and the Company.
() COMPLIANCE WITH SECURITIES LAWS. The offering and sale of
each Additional Note to be issued shall have complied with all
applicable requirements of federal and state securities laws, and
Purchaser shall have received evidence thereof reasonably satisfactory
to Purchaser and Special Counsel.
() NO EVENT OF DEFAULT OR POTENTIAL EVENT OF DEFAULT. There
shall not exist and, upon consummation of the transactions
contemplated hereby, there shall not exist any Event of Default or
Potential Event of Default.
() EVIDENCE OF EXPANSION EXPENDITURES. The Company shall have
provided documentation satisfactory to Purchaser evidencing
expenditures made by the Company in an aggregate amount of not less
than $5,000,000 (exclusive of expenditures made with respect to
previously issued Notes) for expansion of the Company's facilities.
ARTICLE .."
REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY
The Company represents and warrants to Purchasers as follows:
.. ORGANIZATION, STANDING, ETC.. ORGANIZATION, STANDING, ETC". The
Company is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has all requisite
power and authority (i) to own and operate its properties, (ii) to carry on
its business as now conducted and as proposed to be conducted, (iii) to
enter into this Agreement, the Security Documents and each of the other
Collateral Agreements, (iv) to issue and sell the Notes, and (v) to carry
out the terms of this Agreement, the Notes, the Security Documents and each
of the other Collateral Agreements. This Agreement, the Notes, the
Security Documents and the other Collateral Agreements have been duly
executed and delivered and are valid and binding agreements of the Company,
enforceable in accordance with their terms, except as enforceability may be
subject to and limited by applicable principles of equity and by
bankruptcy, reorganization, moratorium, insolvency or other similar laws
from time-to-time in effect affecting the enforcement of creditors' rights
generally.
.. QUALIFICATION... QUALIFICATION." The Company is duly qualified
and in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the nature of its activities or the character of
the properties it owns or leases makes such qualification necessary. Set
forth on SCHEDULE 5.2 is a list of each jurisdiction in which the Company
owns Property or otherwise conducts business, other than those
jurisdictions where the failure to qualify would not have a Material
Adverse Effect.
.. BUSINESS AND FINANCIAL STATEMENTS... BUSINESS AND FINANCIAL
STATEMENTS." The Company has delivered to Purchasers true, complete and
correct copies of the Company's audited consolidated financial statements
for the Fiscal Year ended September 30, 1996, and the unaudited financial
statements for the three months ended December 30, 1996 (collectively, the
"Financial Statements"). The Financial Statements have been prepared in
accordance with GAAP (except that the unaudited financial statements
contain no footnotes) applied on a consistent basis throughout the periods
specified and present fairly the historical financial positions of the
Company as of the respective dates and for the respective periods
specified.
.. ADVERSE CHANGES... ADVERSE CHANGES." There has been no Material
Adverse Effect on the Company since September 30, 1996.
.. TAX RETURNS AND PAYMENTS... TAX RETURNS AND PAYMENTS." The
Company is a corporation subject to United States federal income taxation.
The Company has timely and accurately filed all tax returns required by law
to be filed by it and has paid all taxes, assessments and other
governmental charges levied upon it or any of its properties, assets,
income or franchises that are due and payable, other than those presently
being contested in good faith by appropriate proceedings diligently
conducted for which such reserves and other appropriate provision as are
required by GAAP have been made. There are no material tax Liens upon any
of the assets of the Company except for statutory liens in respect of taxes
or assessments the payment of which is not yet delinquent. If the Company
is contesting any such tax or assessment in accordance with this
Section 5.5, the Company has disclosed to Purchasers, in writing, the
nature and extent of such contest.
.. DEBT... DEBT." Other than the Notes and the indebtedness
disclosed in the Financial Statements or as listed on SCHEDULE 5.6, the
Company has no secured or unsecured Debt outstanding. Other than as
provided in this Agreement and the Collateral Agreements, or in the
instruments or agreements listed on SCHEDULE 5.6, no instrument or
agreement applicable to or binding on the Company contains any restrictions
on the incurrence by the Company of any Debt.
.. TITLE TO PROPERTIES AND ASSETS; LIENS... TITLE TO PROPERTIES AND
ASSETS; LIENS." The Company has good and marketable fee title to all the
real property purported to be owned by it and good and marketable title to
all other property and assets purported to be owned by it, free and clear
of all Liens, except for Liens and other matters that constitute Permitted
Exceptions. At the time of the Closing and upon giving effect to the
transactions contemplated hereby, and except for the Permitted Exceptions,
(a) no currently effective financing statement under the Uniform Commercial
Code that names the Company as debtor or lessee will be on file in any
jurisdiction in which the Company owns or leases real or personal property
or in which the inventory of the Company is located or in any other
jurisdiction, (b) neither the Company nor any Subsidiary has signed any
currently effective financing statement or any currently effective security
agreement authorizing any secured party thereunder to file any such
financing statement, except (i) as required to perfect the Liens created by
the Collateral Agreements, (ii) as listed on SCHEDULE 5.7, or (iii) as
evidenced by any Permitted Exception, and (c) the personal property
comprising any portion of the Mortgaged Properties is free and clear of any
and all purchase money security interests and other Liens.
.. LITIGATION... LITIGATION." Except as set forth on SCHEDULE 5.8,
there is no action, proceeding or investigation pending or, to the best
knowledge of the Company, threatened (or any basis therefor known to the
Company) against the Company or any of its Subsidiaries or any of their
respective Properties which is not adequately covered by insurance, which
if adversely determined, could have a Material Adverse Effect.
.. COMPLIANCE WITH COLLATERAL AGREEMENTS... COMPLIANCE WITH
COLLATERAL AGREEMENTS." The Company has performed and complied in all
material respects with every term, covenant, condition and provision of the
Collateral Agreements to be performed or complied with by the Company on or
prior to the date hereof, every representation or warranty of the Company
contained in the Collateral Agreements is true and correct in all material
respects on and as of the date hereof, and no default or Event of Default
(as any such term may be defined in the Collateral Agreements) has occurred
and is continuing (without regard to any applicable cure period) under the
Collateral Agreements.
.. COMPLIANCE WITH OTHER INSTRUMENTS... COMPLIANCE WITH OTHER
INSTRUMENTS." The Company (a) is not in violation of any term of any
agreement or instrument to which it is a party or by which it is bound, or
of any applicable law, ordinance, rule or regulation of any governmental
authority, or of any applicable order, judgment or decree of any court,
arbitrator or governmental authority (including, without limitation, any
such law, ordinance, rule, regulation, order, judgment or decree relating
to environmental protection or pollution control, occupational health and
safety standards and controls, consumer protection or equal employment
practice requirements), the consequence of any of which violations would,
with reasonable probability, result in a Material Adverse Effect; and (b)
is not in violation of any term of its Certificate of Incorporation or
Bylaws. Neither the execution, delivery and performance of this Agreement,
any Collateral Agreement, or the Notes nor the consummation of the
transactions contemplated hereby or thereby will result in any violation of
or be in conflict with or constitute a default under any such term or
result in the creation of (or impose any obligation on the Company to
create) any Lien upon any of the properties of the Company pursuant to any
such term. There are no such terms in the aforementioned documents that,
either in any individual case or in the aggregate, materially and adversely
affect the business, operations, affairs, condition or properties of the
Company, including the Mortgaged Properties.
.. GOVERNMENTAL CONSENTS... GOVERNMENTAL CONSENTS." Other than
those that have been duly obtained and are in full force and effect (copies
of which have been delivered to Purchaser or Special Counsel) and any
filings contemplated by the Security Documents and the Financing Statements
(which filings will be made promptly after Closing), no consent, approval
or authorization of, or declaration or filing with, any governmental
authority on the part of the Company is currently required for the valid
execution and delivery of this Agreement or any Collateral Agreement, or
the consummation of the transactions contemplated hereby or thereby, or the
valid offer, issue, sale and delivery of the Notes pursuant to this
Agreement.
.. PERMITS AND LICENSES... PERMITS AND LICENSES." Except for any
failure to obtain or recover permits and licenses that could not reasonably
be expected to have a Material Adverse Effect, the Company has all permits
and licenses necessary for the operation of its business as presently
conducted.
.. FEDERAL RESERVE REGULATIONS... FEDERAL RESERVE REGULATIONS." The
Company will not use any of the proceeds of the sale of the Notes for the
purpose, whether immediate, incidental or ultimate, of buying any "margin
stock" or of maintaining, reducing or retiring any indebtedness originally
incurred to purchase a stock that is currently any "margin stock," or for
any other purpose that might constitute this transaction a "purpose
credit," in each case within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 C.F.R. 207, as amended), or
otherwise take or permit to be taken any action that would involve a
violation of such Regulation G or of Regulation T (12 C.F.R. 220, as
amended), Regulation U (12 C.F.R. 221, as amended) or Regulation X (12
C.F.R. 224, as amended) or any other regulation of such board. No
indebtedness being reduced or retired out of the proceeds of the sale of
the Notes was incurred for the purpose of purchasing or carrying any such
"margin stock," and the Company does not own and has no present intention
of acquiring any such "margin stock."
.. STATUS UNDER CERTAIN FEDERAL STATUTES... STATUS UNDER CERTAIN
FEDERAL STATUTES." The Company is not (a) a "holding company" or a
"subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company," as
such terms are defined in the Public Utility Holding Company Act of 1935,
as amended, (b) a "public utility," as such term is defined in the Federal
Power Act, as amended, (c) an "investment company," or a company
"controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended, or (d) a "rail carrier," or a
"person controlled by or affiliated with a rail carrier," within the
meaning of Title 49, U.S.C., or a "carrier" to which 49 U.S.C.
' 11301(b)(1) is applicable.
.. COMPLIANCE WITH ERISA... COMPLIANCE WITH ERISA."
() Each Plan that is or has been maintained for employees of
the Company or any of the Subsidiaries, or any Related Person with
respect to any of them, or to which the Company or any of the
Subsidiaries, or any Related Person with respect to any of them, has
made or was required to make contributions has been administered in
material compliance with its terms and all applicable statutes
(including but not limited to ERISA and the Code, and all regulations
and interpretations thereunder). No reportable event (as defined in
Section 4043 of ERISA and regulations issued thereunder) has occurred
with respect to any Plan that is a defined benefit plan (as defined in
Section 3(35) of ERISA and regulations issued thereunder) and subject
to Title IV of ERISA ("Title IV Plan"). No material liability to the
PBGC has been incurred, or is expected to be incurred, by the Company
or any of the Subsidiaries or any Related Person with respect to any
Title IV Plan. The PBGC has not instituted any proceedings, and there
exists no event or condition that would constitute grounds for
institution of proceedings, against the Company, the Subsidiaries or
any Related Person by the PBGC to terminate any Title IV Plan under
Section 4042 of ERISA. No case, matter or action with respect to any
Plan, pursuant to any federal or state law, has been brought, is
pending or is threatened, against the Company or any of the
Subsidiaries or any Related Person with respect to any of them, or any
officer, director or employee of any of them, or any fiduciary of any
Plan.
() No Title IV Plan had an accumulated funding deficiency (as
such term is defined in Section 302 of ERISA and regulations issued
thereunder) as of the last day of the most recent plan year of such
Plan ended prior to the date hereof. All contributions payable to
each qualified Plan of the Company or any of the Subsidiaries (that is
an employee pension benefit plan as defined in Section 3(2) of ERISA
and regulations issued thereunder and that is intended to meet the
qualification requirements of the Code ("Qualified Plan")), for all
benefits earned or other liabilities accrued through the end of the
latest plan year for such Qualified Plan, determined in accordance
with the terms and conditions of such Qualified Plan, ERISA and the
Code, have been paid or otherwise provided for, and to the extent
unpaid are reflected in the pro forma consolidated balance sheet of
the Company. No waiver of the minimum funding standard requirements
of Section 302 of ERISA and Section 412 of the Code has been obtained,
applied for or is contemplated with respect to any Title IV Plan.
() None of the Company or any of the Subsidiaries nor any
Related Person with respect to any of them, is or has been a
contributor to any multi-employer plan within the meaning of
Section 3(37) of ERISA and regulations issued thereunder.
() The execution and delivery of this Agreement and the
Collateral Agreements, the issue of the Notes hereunder and the
consummation of the transactions contemplated hereby will not involve
any transaction that is subject to the prohibitions of Section 406 of
ERISA or in connection with which a tax would be imposed pursuant to
Section 4975 of the Code.
() No Lien imposed under Section 412(n) of the Code exists in
favor of any Plan upon any property belonging to the Company or any of
the Subsidiaries, or any Related Person of any of them.
.. DISCLOSURE... DISCLOSURE." Neither this Agreement, the Financial
Statements nor any other document, certificate or instrument delivered to
Purchasers by or on behalf of the Company in connection with the
transactions contemplated hereby, when all such documents, certificates and
instruments are taken as a whole, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements contained herein or therein not misleading. There is no
fact actually known to the Company that may have a Material Adverse Effect
that has not been set forth herein or in the other documents, certificates
and instruments delivered to Purchasers by or on behalf of the Company
specifically for use in connection with the transactions contemplated
hereby.
.. USE OF PROCEEDS... USE OF PROCEEDS." The Company will apply the
proceeds of the sale of the 1997-C Notes to consummate the Green Acre
Acquisition and for general corporate purposes and will use the proceeds of
the sale of Additional Notes, if any, for expansion of its facilities.
.. SOLVENCY OF THE COMPANY... SOLVENCY OF THE COMPANY." The fair
saleable value of the business and assets of the Company, upon giving
effect to the transactions contemplated hereby, will be in excess of the
amount that will be required to pay the probable liabilities of the Company
(including contingent, subordinated, unmatured and unliquidated
liabilities) on existing debts as they may become absolute and matured.
The Company, upon giving effect to the transactions contemplated hereby,
will not be engaged in any business or transaction, or about to engage in
any business or transaction, for which the Company has an unreasonably
small capital, and the Company has no intent (a) to hinder, delay or
defraud any entity to which it is, or will become, on or after the Closing
Date, indebted, or (b) to incur debts that would be beyond its ability to
pay as they mature.
.. ENVIRONMENTAL MATTERS.. ENVIRONMENTAL MATTERS". The Company has
been complying with, and is in compliance with, all Environmental Laws in
each jurisdiction where it is presently doing business except for failures
to comply which would not have a Material Adverse Effect. To the best
knowledge of the Company, none of the Mortgaged Properties is impacted by
Hazardous Substances in any respect that would require investigation,
reporting, monitoring, cleanup or other response under any Environmental
Law.
.. BROKERS... BROKERS." The Company represents that it has not
dealt with any brokers or finders in connection with the transactions
contemplated by this Agreement.
.. NO DEFAULTS... NO DEFAULTS." At the time of the Closing, there
exists no Event of Default or Potential Event of Default.
ARTICLE .."
REPRESENTATIONS AND WARRANTIES RELATING
TO SECURITY FOR THE NOTES
The Company represents and warrants to Purchasers as follows:
.. EASEMENTS AND UTILITY SERVICES... EASEMENTS AND UTILITY
SERVICES." The Company has all easements and other rights, including those
for use, maintenance, repair and replacement of and access to structures,
facilities or space for support, mechanical systems, roads, utilities
(including electricity, gas, water, sewer disposal, telephone and CATV) and
any other private or municipal improvements, services and facilities
necessary or appropriate to the proper operation, repair, maintenance,
occupancy or use of the Mortgaged Properties as currently being and
proposed to be used.
.. CONTRACTS... CONTRACTS." There are no service (other than
utility) or construction contracts currently outstanding relating to any
part of the Mortgaged Properties providing for payment in excess of
$100,000 per year, per contract (but not in excess of $1,000,000 in the
aggregate), except those contracts that are set forth on SCHEDULE 6.2 and
have been delivered to Purchaser, nor have any labor or materials been
supplied to the Mortgaged Properties, other than in the ordinary course of
business, that have not been fully paid for.
.. PERMITS... PERMITS." There are no permits, licenses,
certificates or approvals that are required to occupy or operate (except as
specified in Section 5.8) any part of the Mortgaged Properties as presently
operated, except those permits, licenses, certificates and approvals that
are set forth on SCHEDULE 6.3 and have been delivered to Purchasers.
.. REPORTS OF ENGINEERS... REPORTS OF ENGINEERS." The Company does
not possess and is not aware of any reports of engineers, architects or
other Persons relating to any part of the Mortgaged Properties, except
those reports that are set forth on SCHEDULE 6.4 and have been delivered to
Purchasers.
.. PLANS AND SPECIFICATIONS... PLANS AND SPECIFICATIONS." The
Company does not possess and is not aware of any plans and specifications
relating to any part of the Mortgaged Properties, except those plans and
specifications that are set forth on SCHEDULE 6.5 and that will be
delivered to Purchasers upon request.
.. SOIL REPORTS... SOIL REPORTS." There are no soil reports in the
possession of the Company or its Affiliates relating to any part of the
Mortgaged Properties.
.. ZONING... ZONING." The Mortgaged Properties that constitutes
real property are zoned in the manner that permits the use of the Mortgaged
Properties as currently being and proposed to be used by the Company and
its Subsidiaries.
.. CERTIFICATES OF OCCUPANCY... CERTIFICATES OF OCCUPANCY." A
certificate of occupancy or similar permit has been issued by the
appropriate governmental authority for each of the Mortgaged Properties
that constitutes improvements to real property that permits the occupancy
of the Mortgaged Properties as currently or proposed to be occupied by the
Company.
ARTICLE .."
INTEREST RATE PROVISIONS
.. INTEREST ON FIXED NOTES... INTEREST ON FIXED NOTES."
() Interest on the outstanding principal balance of the 1996
Note shall accrue at the lesser of (i) 7.21% per annum or (ii) the
Highest Lawful Rate, and shall be due and payable in accordance with
Section 8.1.
() Interest on the outstanding principal balance of the 1997
Fixed-A Note shall accrue at the lesser of (i) 9.39% per annum or
(ii) the Highest Lawful Rate, and shall be due and payable in
accordance with Section 8.1.
() Interest on the outstanding principal balance of the 1997
Fixed-B Note shall accrue at the lesser of (i) 9.45% per annum or
(ii) the Highest Lawful Rate, and shall be due and payable in
accordance with Section 8.1.
() In the event the Company elects to issue an Additional Fixed
Note pursuant to Section 2.5, not more than thirty (30) nor less than
ten (10) days prior to the issuance of such Additional Fixed Note, the
Company shall give written notice thereof to Purchasers, at which
point the parties shall determine the interest rate applicable to such
Additional Fixed Note. Interest on the outstanding principal balance
of such Additional Fixed Note shall accrue at the lesser of (i) the
then-prevailing Reinvestment Yield plus 100 basis points or (ii) the
Highest Lawful Rate, and shall be due and payable in accordance with
Section 8.1.
() Interest on the unpaid principal of the Fixed Notes shall be
calculated on the basis of the actual days elapsed in a year
consisting of 360 days.
.. INTEREST ON FLOATING NOTES.. INTEREST ON FLOATING NOTES".
() Interest on the outstanding principal balance of the Floating
Notes shall accrue at an interest rate per annum during the applicable
Interest Period equal to the lesser of (i) the LIBOR Rate plus 2% or
(ii) the Highest Lawful Rate. Interest on the Floating Notes accrued
during a calendar month shall be due and payable in accordance with
Section 8.1. Interest on the unpaid principal of the Floating Notes
shall be calculated on the basis of the actual days elapsed in a year
consisting of 360 days.
() Not more than ten days nor less than five days prior to
Closing and during each Interest Rate Set Window, the Company shall
notify Purchasers of its selection of the duration of the immediately
following Interest Period with respect to the Floating Notes then
outstanding, which may be three months, six months or one year (the
"Interest Option Notice"). The duration of the Interest Period
selected shall be the same for all Floating Notes with the same date
of issuance. The Interest Option Notice must be in writing and may be
sent via telecopy, with the originally executed copy delivered to
Purchasers immediately thereafter. The LIBOR Rate for the following
Interest Period shall be the applicable rate for a period of
corresponding duration announced in THE WALL STREET JOURNAL (Northeast
Edition) on the first Business Day following receipt of the Interest
Option Notice.
() In connection with determining the applicable LIBOR Rate for
the following Interest Period, Purchasers shall calculate the
principal and interest payments due on the Floating Notes during such
Interest Period, as required under Section 8.1(d) or (e), and shall
provide such amount to the Company.
.. INTEREST RATE LOCK... INTEREST RATE LOCK." With respect to the
Floating Notes, during any Interest Rate Set Window prior to March 1, 2003,
the Company shall have the option to permanently set the interest rate on
the Floating Notes. The Company shall provide notice to Purchasers of its
desire to set the rate and Purchasers shall promptly thereafter notify the
Company of the then prevailing fixed interest rates (based on Purchasers'
interest rate spreads and the average remaining life of the Floating Notes)
(the "Fixed Rate"). If the Company elects to have the Floating Notes
accrue interest at the Fixed Rate, the Company shall so notify Purchasers
in the Interest Option Notice (which election shall be irrevocable) and
immediately following the then current Interest Period, the Floating Notes
shall thereafter accrue interest at the Fixed Rate, and the Floating Notes
shall for all purposes be deemed Fixed Notes. Any such election shall be
with respect to any or all of the then outstanding Floating Notes and shall
be made in full and not in part. Purchasers shall recompute the principal
and interest payments required under Section 8.1(d) or (e) based on the
outstanding principal balance on the Floating Notes and the Fixed Rate, and
the Company shall thereafter make principal and interest payments on such
Notes equal to such amount.
.. RESETTING OF INTEREST RATES.. RESETTING OF INTEREST RATES".
During the period of time not more than ten (10) days nor less than five
(5) days prior to March 1, 2003, provided that (i) no Event of Default or
Potential Event of Default has occurred and is continuing, and
(ii) Purchasers own the Notes at such time, Purchasers and the Company
shall in good faith attempt to reset the interest rate on any or all of the
Fixed Notes (including those Floating Notes for which a Fixed Rate has been
set in accordance with Section 7.3) and the interest rate spread on the
Floating Notes. The parties shall consider Purchasers' then-current
interest rate spreads (based on average remaining life of the Notes), the
then-current financial condition of the Company and then-current market
conditions when attempting to agree upon new rates. If the parties agree
upon new rates, they shall promptly execute an amendment to this Agreement
and the Company shall execute and deliver to Purchasers new notes
reflecting the new rates. In the event that the parties are unable to
reasonably agree upon new rates for any or all of the Fixed Notes or the
spread on the Floating Notes by March 1, 2003, (i) such Fixed Notes for
which a new rate is not agreed upon will become immediately due and payable
and (ii) the Floating Notes to the extent a new spread is not agreed to
will become due and payable at the conclusion of the then-existing Interest
Period, and the Company shall be required to pay all principal and accrued
interest thereon on such date. If the Company is obligated to prepay any
of the Fixed Notes or Floating Notes pursuant to this Section 7.4, no Make-
Whole Premium or LIBOR Premium, as the case may be, shall be due and owing
on such Fixed Notes or Floating Notes that are prepaid on March 1, 2003 (or
at the conclusion of the Interest Period, as provided in this Section 7.4).
Purchasers shall have no liability to the Company in the event the parties
are unable to agree upon new rates pursuant to this Section 7.4.
.. PAST DUE PAYMENTS.. PAST DUE PAYMENTS". All payments of
principal and, to the extent permitted by law, the applicable Premium (if
any) and interest on or in respect of any Note or this Agreement that are
not made when due shall bear interest at the Default Rate from the date due
and payable to the date paid. Any payment in respect of any other
obligation or amount payable hereunder that is not paid when due shall bear
interest at the Default Rate from the date due and payable to the date
paid.
ARTICLE .."
PAYMENT OF NOTES
.. REQUIRED PAYMENTS OF NOTES.. REQUIRED PAYMENTS OF NOTES".
() On each Payment Date while the 1996 Note is outstanding, the
Company shall make a payment on the 1996 Note, in cash, in an amount
equal to $455,304.80, which payment shall consist of principal and
accrued interest.
() On May 1, 1997, the Company shall pay all accrued and unpaid
interest on the 1997 Fixed-A Note. On each Payment Date thereafter
while the 1997 Fixed-A Note is outstanding, commencing June 1, 1997,
the Company shall make a payment on the 1997 Fixed-A Note, in cash, in
an amount equal to $61,839.41, which payment shall consist of
principal and accrued interest.
() On May 1, 1997, the Company shall pay all accrued and unpaid
interest on the 1997 Fixed-B Note. On each Payment Date thereafter
while the 1997 Fixed-B Note is outstanding, commencing June 1, 1997,
the Company shall make a payment on the 1997 Fixed-B Note, in cash, in
an amount equal to $23,860.11, which payment shall consist of
principal and accrued interest.
() On May 1, 1997, the Company shall pay all accrued and unpaid
interest on the 1997 Floating Notes. On each Payment Date thereafter
while the 1997 Floating Notes are outstanding, commencing June 1,
1997, the Company shall make a payment on the 1997 Floating Notes, in
cash, in an aggregate amount equal to $70,898.92 of principal plus
accrued and unpaid interest thereon. Each such payment shall be
allocated pro rata among the 1997 Floating Notes then outstanding.
() Upon the issuance of any Additional Fixed Notes or
Additional Floating Notes, Purchasers shall calculate the principal
and interest due on each Payment Date based on a fifteen (15) year
amortization. On each Payment Date following the issuance of such
Additional Note, the Company shall make a payment on such Additional
Note, in cash, in an amount equal to the payment calculated by
Purchasers for such Additional Note, which shall consist of principal
and accrued interest.
() If the interest rates on the Fixed Notes are reset in
accordance with Section 7.4, Purchasers shall recompute the monthly
principal and interest payments for each such Fixed Note, and the
Company shall thereafter be required to make payments equal to such
recomputed amount. On the Maturity Date, the entire outstanding
principal balance of all the Notes, together with interest accrued
thereon, shall be due and payable. Notwithstanding the foregoing, the
entire outstanding balance of all Fixed Notes (to the extent the
interest rate is not reset in accordance with Section 7.3) and all
Floating Notes (to the extent a Fixed Rate is not set in accordance
with Section 7.3 or a new interest rate spread is not agreed to in
accordance with Section 7.3) together with interest accrued thereon,
shall be due and payable on March 1, 2003, with respect to the Fixed
Notes, or at the conclusion of the then-existing Interest Period, with
respect to the Floating Notes.
() If at any time the outstanding principal balance of the
remaining Notes exceeds 75% of the Appraised Value, the Company shall
immediately make a prepayment of principal of the Notes (together with
accrued interest thereon) in an amount such that following the
prepayment, the outstanding principal balance is less than or equal to
75% of the Appraised Value. The prepayment shall be applied pro rata
among all of the Notes at the time outstanding.
() No partial prepayment of the Notes pursuant to Section 8.2
shall relieve the Company from its obligation to make the payments
required under this Section 8.1, except to the extent that the
outstanding principal balance of the Notes is less than the amount of
the scheduled payment otherwise due under this Section 8.1.
.. OPTIONAL PREPAYMENTS OF NOTES; ALLOCATIONS... OPTIONAL
PREPAYMENTS OF NOTES; ALLOCATIONS."
() At any time or from time to time, the Company is hereby
granted the right, at its option, upon notice as provided in
Section 8.3, to prepay all or any part (in integral multiples of
principal of $100,000) of the Fixed Notes, which prepayment shall be
applied pro rata among all of the Fixed Notes at the time outstanding
and shall be applied to the outstanding principal amount thereof in
the inverse order of maturity.
() From time to time from and after the date that is one year
following the date of issuance of any Floating Note, the Company shall
have the right, at its option, upon notice as provided in Section 8.3,
to prepay all or any part (in integral multiples of $100,000) of such
Floating Notes, which prepayment be applied to the outstanding
principal amount in the inverse order of maturity.
() Each such prepayment shall include the principal amount of
the Notes so prepaid, plus interest accrued thereon to the date of
payment, plus the Premium described in Section 8.2(b) (based on such
principal amount so prepaid). In the case of each partial prepayment
of the Notes, the principal amount of the Notes to be prepaid shall be
allocated among all of the Notes at the time outstanding (to the
extent such Note may be prepaid) in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment, rounded upward to the nearest
$1,000 for each Note, with adjustments to the extent practicable, to
compensate for any prior prepayments not made exactly in such
proportion.
() Any prepayment of the Fixed Notes shall be subject to and
include the Make-Whole Premium. Any prepayment of the Floating Notes
shall be subject to and include the LIBOR Premium. Notwithstanding
the foregoing, no Premium shall be due if (i) any of the Fixed Notes
are prepaid in full on ▇▇▇▇▇ ▇, ▇▇▇▇, (▇▇) any of the Notes are
prepaid pursuant to Section 7.4 as a result of the Company and
Purchasers being unable to agree upon mutually acceptable interest
rates or interest rate spreads or (iii) if any of the Notes are
prepaid pursuant to Section 8.1(g).
.. NOTICE OF PREPAYMENTS; OFFICERS' CERTIFICATE... NOTICE OF
PREPAYMENTS; OFFICERS' CERTIFICATE." The Company will give each registered
holder of any Note written notice of each prepayment of the Notes under
Section 8.2 not less than thirty (30) days and not more than sixty (60)
days prior to the date fixed for such prepayment, which notice shall be
irrevocable. Each such notice and each such prepayment shall be
accompanied by an Officers' Certificate (a) stating the principal amount
and serial number of each Note to be prepaid and the principal amount
thereof to be prepaid; (b) stating the proposed date of prepayment; (c)
stating the accrued interest on each such Note to such date to be paid in
accordance with Section 8.4; and (d) estimating the applicable Premium
required under Section 8.2 (calculated as of the date of such prepayment
and proffered solely as an estimate of the Premium due upon prepayment) and
setting forth the method of determination and calculations used in
computing such Premium, accompanied by a copy of the Statistical
Release H.15(519) (or other source of market data) used in determining the
United States Treasury Yield.
.. MATURITY; SURRENDER... MATURITY; SURRENDER." In the case of each
prepayment of the Notes, the principal amount of each Note to be prepaid
shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such
date and the Premium payable, if any. From and after such date, unless the
Company shall fail to pay such principal amount when so due and payable,
together with the interest and Premium, if any, as aforesaid, interest on
such principal amount shall cease to accrue. Any Note paid or prepaid in
full shall be surrendered to the Company and canceled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal
amount of any Note.
ARTICLE .."
ACCOUNTING, REPORTING AND INSPECTION COVENANTS
OF THE COMPANY
From the date hereof through the Closing and thereafter so long as any
Note shall be outstanding, the Company will perform and comply with each of
the following covenants:
.. ACCOUNTING... ACCOUNTING." The Company will maintain a system of
accounting established and administered in accordance with GAAP and will
accrue all such liabilities as shall be required by GAAP.
.. FINANCIAL STATEMENTS AND OTHER INFORMATION... FINANCIAL
STATEMENTS AND OTHER INFORMATION." The Company will deliver (in duplicate)
to each Purchaser (except as hereinafter provided) so long as such
Purchaser or Purchaser's nominee shall hold any Note, and to each other
registered holder of a Note:
() within ninety (90) days after the end of each Fiscal Year,
the balance sheet of the Company as of the end of such Fiscal Year and
the related statements of income and retained earnings and of cash
flows of the Company for such Fiscal Year, setting forth in each case
in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and (i) accompanied by the report thereon of any
independent public accountants of recognized national standing
selected by the Company, which report shall state that (v) such
financial statements present fairly the financial position of the
Company as of the dates indicated and the results of its operations
and cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as otherwise
specified in the report), and (w) the audit by such accountants in
connection with such financial statements has been made in accordance
with generally accepted accounting principles, (ii) accompanied by a
written statement of such accountants that without any independent
investigation except that conducted in the ordinary course of their
audit, the accountants do not have knowledge of the existence of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof, and
(iii) certified by the chief financial officer of the Company as
presenting fairly, in accordance with GAAP, applied (except as
specifically set forth therein) on a basis consistent with such prior
fiscal periods, the information contained therein;
() within forty-five (45) days after the end of the first three
fiscal quarters of each Fiscal Year, the balance sheet of the Company
as of the end of such fiscal quarter and the related statements of
income and of cash flows of the Company for such fiscal quarter and
for the portion of the Fiscal Year from the first day of such Fiscal
Year through the end of such fiscal quarter, setting forth in each
case in comparative form the figures for the corresponding periods in
the previous Fiscal Year, all in reasonable detail and certified by
the chief financial officer of the Company as presenting fairly, in
accordance with GAAP, applied (except as specifically set forth
therein) on a basis consistent with such prior fiscal periods, the
information contained therein;
() together with each delivery of financial statements pursuant
to subsections (a) or (b) above, an officer's certificate in the form
of EXHIBIT F (i) showing in detail the determination of the ratios and
other financial calculations specified in Sections 10.1 through 10.7
during the accounting period covered by such financial statements,
(ii) stating that the signer has reviewed the terms hereof and of the
Notes and has made, or caused to be made under his supervision, a
review of the transactions and condition of the Company during the
accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such
accounting period, and that the signer does not have knowledge of the
existence as of the date of such officer's certificate, of any
condition or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed or
exists, specifying the nature and period of existence thereof and what
action the Company has taken or is taking or proposes to take with
respect thereto; and (iii) if not specified in the related financial
statements being delivered pursuant to subsection (a) above,
specifying the aggregate amount of interest and rentals received or
accrued by the Company, and the aggregate amount of depreciation,
depletion and amortization charged on the books of the Company during
the accounting period covered by such financial statements;
() promptly upon receipt thereof, copies of all reports
submitted to the Company by independent public accountants in
connection with each annual audit, or special audit (if any) of the
books of the Company made by such accountants, including, without
limitation, any comment letter submitted to management by such
accountants in connection with their annual audit;
() promptly upon their becoming available, copies of all press
releases and other statements made available generally by the Company
to the public concerning material developments in the business of the
Company;
() within five (5) days of any Responsible Officer of the
Company obtaining knowledge of any condition or event that constitutes
an Event of Default or Potential Event of Default, or that the
registered holder of any Note has given any notice or taken any other
action with respect to a claimed Event of Default or Potential Event
of Default under this Agreement or that any person has given notice to
the Company or taken any other action with respect to a claimed
default or event or condition of the type referred to in Article 14,
an Officers' Certificate describing the same and the period of
existence thereof and specifying what action the Company has taken, is
taking and proposes to take with respect thereto;
() promptly upon (and in any event within ten (10) Business
Days of) any Responsible Officer of the Company obtaining knowledge of
the occurrence of any (i) "reportable event," as such term is defined
in Section 4043 of ERISA, or (ii) "prohibited transaction," as such
term is defined in Section 4975 of the Code, that is not exempt by law
or ruling in connection with any Plan relating to the Company or any
trust created thereunder, a written notice specifying the nature
thereof, what action the Company has taken, is taking and proposes to
take with respect thereto, and any action taken or threatened by the
Internal Revenue Service or the PBGC with respect thereto, provided
that, with respect to the occurrence of any "reportable event" as to
which the PBGC has waived the 30-day reporting requirement, such
written notice need not be given;
() immediately upon the occurrence of any of the following
events, an Officers' Certificate describing such event: (i) the
Certificate of Incorporation or Bylaws of the Company shall have been
amended or the Company shall have changed its jurisdiction of
organization; or (ii) the Company shall have changed its name or shall
do business under any name other than as set forth on SCHEDULE 9.2; or
(iii) the Company shall have changed its principal place of business
or its chief executive offices; or (iv) the Company shall have become
a party to any suit, action or proceeding that, if adversely
determined, would have a Material Adverse Effect or in which the
projected settlement amount involved therein could equal $3,000,000 or
more (in addition to any insurance coverage); or (v) the Company shall
have opened or closed any material place of business; or (vi) there
shall occur any strike, walkout, work stoppage or other material
employee disruption relating to any of the Mortgaged Properties, or
the expiration of any labor contract affecting any of the Mortgaged
Properties (unless there exists a new labor contract in substitution
therefor) that reasonably could be expected to have a Material Adverse
Effect; or (vii) the Company shall have obtained knowledge that any of
its insurance policies or any insurance policies affecting any of the
Mortgaged Properties will be canceled or not renewed (unless there
exists a similar insurance policy in substitution therefor);
() promptly (i) upon receipt thereof, copies of any notices to
the Company from any federal or state administrative agency relating
to any order, ruling, statute or other law or regulation that would,
with reasonable probability, have a Material Adverse Effect; and
(ii) following filing with the Commission, any reports or statements
filed with the Commission;
() promptly upon receipt thereof, copies of any notice
delivered pursuant to Article 14; and
() with reasonable promptness, such other information and data
with respect to the Company as from time to time may be reasonably
requested by any registered holder of a Note, including, without
limitation, any projections or business plans prepared by or for the
Company.
.. INSPECTION.. INSPECTION". The Company will permit, subject to
rights of parties in possession, any authorized representatives designated
by a Purchaser, so long as such Purchaser or its nominee shall hold any
Notes, or designated by any other registered holder of any Notes, without
expense to the Company, at such reasonable times and as often as may be
reasonably requested, to (a) visit and inspect the Mortgaged Properties,
including its books of account, and (b) upon the prior written consent of
the Company, which consent shall not be unreasonably withheld, discuss the
Company's affairs, finances and accounts with the Company's directors,
officers and independent public accountants (and by this provision the
Company authorizes such directors, officers and accountants to discuss with
such representatives the affairs, finances and accounts of the Company,
whether or not an officer or other representative of the Company is
present, provided that the Company shall receive notice of any such meeting
and be given a reasonable opportunity to have a representative attend).
.. ACQUIRED REAL PROPERTY... ACQUIRED REAL PROPERTY." The Company
shall deliver to each Purchaser so long as such Purchaser or Purchaser's
nominee shall hold any Note, and to each other registered holder of a Note,
upon request of a Purchaser or any other registered holder of a Note, but
in any event not less than ninety (90) days after the end of each Fiscal
Year of the Company, a list and description of all real property purchased
or newly leased by the Company during the period specified in such request
or the past Fiscal Year, as applicable, that is to be used for any new
processing plant, hatchery or feed mill in which an existing processing
plant, hatchery or feed mill on any Mortgaged Property is to be shut down
or operations are to be substantially decreased ("Acquired Property"), and,
unless otherwise specified in this Agreement or by the registered holder or
registered holders (other than the Company or any Affiliate) of the Notes,
the Company shall execute and deliver a deed of trust or mortgage and
assignment of leases and rents, substantially in form and substance
satisfactory to Purchasers, (with any changes to such form of mortgage as
appropriate in the applicable jurisdiction and as requested by a Purchaser
or Purchaser's nominee or any registered holder of a Note other than the
Company or any of the Company's Affiliates), to Purchasers or a mortgage
trustee, for the benefit of Purchasers so long as a Purchaser or a
Purchaser's nominee shall hold any Note, and to each other registered
holder of a Note or a mortgage trustee, for the benefit of each such other
holder, granting a first Lien of record on and a first security interest in
the Acquired Property, subject only to existing Liens, the Permitted
Exceptions, and any purchase money Liens incurred by the Company in
connection with the acquisition of any Acquired Property, and the Acquired
Property shall thereafter be part of the Mortgaged Properties. The Company
shall permit each Purchaser so long as such Purchaser or Purchaser's
nominee shall hold any Note, and each other registered holder of a Note,
the right to inspect any Acquired Property and to conduct such other
investigation and due diligence with respect to any Acquired Property that
such Purchaser or such other registered holder deems necessary, and to the
extent the proposed acquisition is in excess of $3,000,000, the Company
shall pay all reasonable costs of Purchasers or such other registered
holder in inspecting any Acquired Property and conducting such
investigation, including, without limitation, any costs of an environmental
consulting firm and attorneys' fees.
ARTICLE .."
BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY
So long as any Note shall be outstanding, the Company will perform and
comply, and will cause each Subsidiary (other than Pilgrim's Pride-Mexico
and any other Subsidiary located or doing business in Mexico or Central or
South America) to perform and comply, as applicable, with each of the
following covenants:
.. ASSET RATIO... ASSET RATIO." The Company shall at all times
maintain a ratio of Net Tangible Assets to Total Liabilities of not less
than 1.30:1.
.. CONSOLIDATED NET WORTH... CONSOLIDATED NET WORTH." The Company
shall at all times maintain a Consolidated Net Worth of not less than
$125,000,000, as increased from time to time by (i) the net proceeds of any
Stock of the Company or any Subsidiary issued and sold to third Persons,
(ii) the amount of Subordinated Debt of the Company or any Subsidiary owed
by third parties converted into or exchanged for Stock of the Company or
any Subsidiary, and (iii) 25% of the Company's annual positive Consolidated
Net Income, if any.
.. CONSOLIDATED WORKING CAPITAL... CONSOLIDATED WORKING CAPITAL."
The Company and its Subsidiaries shall at all times maintain Consolidated
Working Capital of not less than $40,000,000.
.. CURRENT RATIO... CURRENT RATIO." The Company shall at all times
maintain a ratio on a consolidated basis of Current Assets to Current
Liabilities of not less that 1.25:1.
.. FIXED CHARGE COVERAGE... FIXED CHARGE COVERAGE." The Company
shall at all times maintain for the period of eight consecutive fiscal
quarters then ended on a consolidated basis a Fixed Charge Coverage Ratio
of not less than 1.40:1.
.. CAPITAL EXPENDITURES... CAPITAL EXPENDITURES." The Company and
its Subsidiaries shall not incur Capital Expenditures in excess of
$37,227,600 in the aggregate for Fiscal Year 1997 (excluding the Capital
Expenditures incurred pursuant to the Green Acre Acquisition and related
expansion). Thereafter, the limitation on Capital Expenditures shall be
115% of the Company's consolidated total depreciation and amortization for
the immediately preceding Fiscal Year, as reflected on the Company's
consolidated audited financial statements for such Fiscal Year (excluding
Capital Expenditures incurred in expansion of the facilities acquired in
the Green Acre Acquisition). Any unused portion of the maximum permitted
amount of Capital Expenditures (up to $5,000,000 per Fiscal Year) may be
carried over to the next succeeding Fiscal Year, but not thereafter.
.. LIENS... LIENS." The Company will not, and will not permit any
Subsidiary to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of the Company
or such Subsidiary, whether now owned or held or hereafter acquired, or any
income or profits therefrom, other than (a) the Liens and security
interests created to secure the Notes, (b) Liens that constitute Permitted
Exceptions, (c) any Lien on any property acquired, constructed or improved
by the Company after Closing and created contemporaneously with or within
12 months of such acquisition, construction or improvement to secure Debt
incurred to provide for all or a portion of the purchase price of such
property as acquired, constructed or improved, (d) Liens on property of the
Company in favor of the United States of America or any political
subdivision thereof to secure partial payments pursuant to any contract,
(e) pledges or deposits to secure obligations under worker's compensation
laws or similar judgments thereunder that are not currently dischargeable,
and pledges, deposits, performance bonds or similar security interests in
connection with bids, tenders, contracts and leases to which the Company is
a party (all of which are in the ordinary course of business and which do
not relate to indebtedness of the Company), (f) Liens for taxes,
assessments or governmental charges not then due and delinquent or the
validity of which is being contested in good faith and a bond or other
security satisfactory to Purchaser has been posted by the Company, (g)
Liens arising in connection with court proceedings, provided the execution
of such Liens is effectively stayed and such Liens are contested in good
faith and a bond or other security satisfactory to Purchaser has been
posted by the Company, (h) Liens arising in the ordinary course of business
(including easements and similar encumbrances) that are not incurred in
connection with the borrowing of money, provided that such Liens do not
materially interfere with the conduct of the business of the Company,
(i) inchoate Liens, (j) any Lien resulting from renewing, extending or
refunding outstanding Secured Debt provided that the principal amount of
the Debt secured thereby is not increased and the Lien is not extended to
any other property, (k) Liens on assets (other than the Collateral) to
secure Debt provided that no Event of Default or Potential Event of Default
exists or would result therefrom; and (m) Liens on Collateral acquired
after the date hereof to secure financing from the Texas Capital Fund Real
Estate Development Program in an amount not to exceed $5,000,000 (and by
this provision, Purchaser agrees to execute a subordination agreement or
partial release with respect to such Lien, in a form satisfactory to
Purchaser).
.. INVESTMENTS; DEBT; GUARANTEES.
() The Company shall not, and shall not permit any Subsidiary
to, directly or indirectly, make or own any Investment other than
Permitted Investments, except that the Company or a Subsidiary may
(i) purchase or own assets or stock and other securities of a
Subsidiary; (ii) make loans to officers, directors, stockholders,
employees or Subsidiaries to the extent that following such loan, no
Event of Default or Potential Event of Default would exist; (iii) make
investments, payments, loans and capital contributions to entities
other than Subsidiaries to the extent such Investment is made from the
net cash proceeds received by the Company from the issuance of
additional shares of capital stock or other securities subsequently
converted into capital stock; (iv) consummate the Green Acre
Acquisition on the terms set forth in the Green Acre Purchase
Agreement; and (v) acquire all or substantially all of the Property of
any Person or acquire substantially as an entirety the business of any
other Person if the aggregate fair market value of all consideration
paid or payable by the Company in all such acquisitions made in any
Fiscal Year does not exceed 3% of Net Tangible Assets, as determined
at the conclusion of the fiscal month immediately preceding the date
of the proposed acquisition (excluding the Green Acre Acquisition).
() The Company shall not, and shall not permit any Subsidiary
to, directly or indirectly, create, assume, incur, or guarantee any
Debt except (i) to the extent that following the creation, assumption,
incurrence or guarantee of such Debt, no Event of Default or Potential
Event of Default would exist, and (ii) the Company may guarantee the
trade payables of Pilgrim's Pride-Mexico.
.. RESTRICTED PAYMENTS... RESTRICTED PAYMENTS." The Company shall
not, and shall not permit any Subsidiary to, directly or indirectly,
(i) redeem, purchase, or otherwise acquire for value any shares of the
Company's capital stock, except out of the net cash proceeds received by
the Company after Closing from the issuance of additional shares of capital
stock or other securities subsequently converted into capital stock, or
(ii) declare or pay any dividends or any other distributions (other than
dividends payable in shares of capital stock of the Company) on any shares
of the Company's capital stock after Closing in excess of $2,300,000 in the
aggregate in any Fiscal Year.
.. LEASES... LEASES." The Company shall not, and shall not permit
any Subsidiary to, incur non-cancelable non-Capitalized Lease Obligations
or sale and leaseback transactions if the aggregate annual amount of all
minimum or guaranteed net rentals payable under such leases would exceed 4%
of Consolidated Net Tangible Assets (as determined immediately preceding
the execution of such lease).
.. CONSOLIDATION, MERGER AND SALE OF SUBSTANTIALLY ALL ASSETS...
CONSOLIDATION, MERGER AND SALE OF SUBSTANTIALLY ALL ASSETS." The Company
shall not, and shall not permit any Subsidiary to, directly or indirectly,
(a) consolidate with or merge into any other Person or permit any other
Person to consolidate with or merge into it (other than a consolidation or
merger between (i) the Company and an Eligible Subsidiary, and
(ii) Eligible Subsidiaries or any Subsidiary located or doing business in
Mexico or Central or South America); or (b) sell, transfer, lease, abandon
or otherwise dispose of all or substantially all of its assets in a single
or series of related transactions.
.. FORMATION OF SUBSIDIARIES.. FORMATION OF SUBSIDIARIES". Without
the prior written consent of Purchasers, which consent shall not be
unreasonably withheld, the Company shall not, and shall not permit any of
its existing Subsidiaries to, directly or indirectly, form or acquire any
new Subsidiaries other than Eligible Subsidiaries and Subsidiaries located
or doing business in Mexico or Central or South America or Eastern Europe.
The Company shall promptly give Purchasers written notice of the formation
of any Eligible Subsidiary or any Subsidiary located or doing business in
Mexico or Central or South America or Eastern Europe, but in any event
within ten (10) days following formation thereof.
.. INTERESTED PARTY TRANSACTIONS... INTERESTED PARTY TRANSACTIONS."
The Company shall not, nor permit any Subsidiary to, conduct any
transactions with any Affiliate on terms that are not fair and reasonable
and not materially less favorable to the Company or such Subsidiary than it
would obtain in a comparable arm's-length transaction with a Person not an
Affiliate other than ongoing transactions with Affiliates of a similar
nature to those disclosed in the Company's Proxy Statement relating to its
Fiscal Year-end September 30, 1996.
.. EXISTENCE... EXISTENCE." The Company will, or will cause to be
done, all things necessary to, and cause each Subsidiary to, preserve, keep
and maintain in full force and effect its corporate existence, rights
(charter and statutory), franchises and authority to do business and the
corporate existence, rights (charter and statutory), franchises and
authority to do business of each of the Subsidiaries, except for such
matters that would not result in a Material Adverse Effect.
.. PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION... PAYMENT OF
TAXES AND CLAIMS; TAX CONSOLIDATION." The Company will, and cause the
Subsidiaries to, pay and cause to be paid all taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or
in respect of any of the franchises, business, income or profits of the
Company before any penalty or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or
might become a Lien upon any of the properties or assets of the Company,
provided that no such charge or claim need be paid if being contested in
good faith by appropriate proceedings promptly initiated and diligently
conducted, such bonds or escrows are in place as registered holders of the
Notes at the time shall request, and if such reserves or other appropriate
provision, if any, as shall be required by GAAP shall have been made
therefor. The Company will not file or permit the filing of any
consolidated income tax return with any Person (other than a Subsidiary).
.. COMPLIANCE WITH LAWS... COMPLIANCE WITH LAWS." The Company will,
and will cause its Subsidiaries to, comply with all laws, statutes, rules,
regulations and ordinances of any Governmental Authority of a material
nature applicable to the Company or any Subsidiary.
.. COMPLIANCE WITH ERISA... COMPLIANCE WITH ERISA." The Company
will not, and will not permit any employee benefit plan (as that term is
defined in Section 3 of ERISA) maintained by the Company, any Subsidiary or
any Related Person to (a) engage in any "prohibited transaction" as such
term is defined in Section 4975 of the Code, as amended from time to time,
which is likely to result in a liability for such Person; (b) incur any
"accumulated funding deficiency", as such term is defined in Section 302 of
ERISA, whether or not waived which is likely to result in a liability of
such Person; or (c) terminate any such benefit plan in a manner which could
result in the imposition of a lien or encumbrance on the assets of such
Person pursuant to Section 4068 of ERISA.
.. MAINTENANCE OF PROPERTIES; INSURANCE... MAINTENANCE OF
PROPERTIES; INSURANCE." The Company will maintain or cause to be
maintained in good repair, working order and condition (reasonable wear and
tear excepted) all properties used or useful in, and deemed material to,
the business of the Company or any Subsidiary and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof. The Company will maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with respect to the
properties and business of the Company and its Subsidiaries, against loss
or damage of the kinds customarily insured against by companies of
established reputation engaged in the same or similar business and
similarly situated, of such types and in such amounts as are customarily
carried under similar circumstances by such other companies. In any event,
the Company shall, at a minimum, comply with all maintenance, insurance and
similar requirements under the Security Documents.
.. TITLE... TITLE."
() As of the Closing Date and upon giving effect to the
transactions contemplated hereby, except Liens and other matters that
may constitute Permitted Exceptions, the Company will have good (and,
with respect to non-leasehold real property, indefeasible) title to
all of its properties and assets that are material to its business as
presently conducted and as proposed to be conducted and none of such
properties or assets will be subject to any Liens, other than
Permitted Exceptions. As of the Closing Date and upon giving effect
to the transactions contemplated hereby, the Company will have good
(and, with respect to non-leasehold real property, indefeasible) fee
simple title to the Mortgaged Properties subject only to the Permitted
Exceptions.
() The Company acknowledges that its predecessor in title
acquired title to certain real property (which is part of the
Mortgaged Properties) described as Lots 1 through 3, Block 10 and
Lots 5 through 7, Block 11, all in Park Addition to the City of
DeQueen, Arkansas, a 2.78 acre tract and a 2.05 acre tract in
Section ▇▇, ▇▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇ 31 West, DeQueen, Arkansas, and
part of a 36.50 acre tract lying NE 1/4 NW 1/4 of Section 31, Township
8 South, Range 31 West, DeQueen, Arkansas (collectively, the "DEQUEEN
PROPERTY"), through a Tax Deed from the State of Arkansas, and that
such Tax Deed may not have extinguished the claim or interest in title
to the DeQueen Property (the "TITLE CLAIM") by certain heirs of such
predecessor in title. The Company covenants to Purchasers that until
the Title Claim is resolved in favor of the Company, and any exception
to title pertaining thereto, as may be reflected in the title policy
referred to in Section 4.6 hereof, is deleted by endorsement to such
policy, and evidence of same is furnished to Purchasers, without the
prior written consent of Purchasers, no improvements shall be
constructed on the DeQueen Property that are essential to the
operation of the Company's processing plant in DeQueen, Arkansas.
.. CONDUCT OF BUSINESS... CONDUCT OF BUSINESS." The Company will
not, and will not permit any Subsidiary to, engage in any business other
than businesses engaged in by the Company on the date hereof, other
businesses or activities substantially similar or related thereto, and
other lines of business consented to by the registered holders of the Notes
and businesses that are not material to the Company or its business or
operations.
.. CAPITAL IMPROVEMENTS... CAPITAL IMPROVEMENTS." Subject to the
limitations of Section 10.7, the Company and the Subsidiaries shall incur
not less than $3,000,000 in the aggregate per Fiscal Year for capital
improvements and repair and maintenance of the Collateral.
.. SALE OF ASSETS.. SALE OF ASSETS". The Company shall not, and
shall not permit any Subsidiary to, sell, lease, transfer, or otherwise
dispose of Collateral in excess of 5% of the lower of the book value or
fair market value of the Company's total assets.
ARTICLE .."
ENVIRONMENTAL MATTERS
.. DEFINITIONS... DEFINITIONS." As used in this Article 11, the
following terms shall be defined as indicated:
() "ACQUISITION DATE," with respect to any portion of the
Mortgaged Properties, means the date on which Purchaser or the
registered holder of any Note becomes an owner of such portion of the
Mortgaged Properties.
() "ADVERSE ENVIRONMENTAL IMPACT" means (i) a Release of a
Hazardous Substance in a Reportable Quantity or (ii) any material
adverse impact on human health, livestock or the quality of any
Property.
() "ENVIRONMENTAL ACTIVITY" shall mean any storage, holding,
manufacture, emission, discharge, generation, processing, treatment,
abatement, removal, disposition, handling, transportation or disposal,
or any actual or threatened release of any "Hazardous Substances"
from, under, into or on the Mortgaged Properties or otherwise relating
to the Mortgaged Properties, including but not limited to (i) the
migration or emanation of "Hazardous Substances" from the Mortgaged
Properties onto or into the environment beyond the physical boundaries
of the Mortgaged Properties; (ii) the off-site disposal of Hazardous
Substances from the Mortgaged Properties; and (iii) any of the
previously described activities occurring in connection with ambient
air, surface and subsurface soil conditions, and all surface and
subsurface waters.
() "ENVIRONMENTAL CONDITION" shall mean (i) the presence or
existence in, on, at, or under the Mortgaged Properties of any
Hazardous Substances, "industrial or solid waste," as that term is
defined under the Environmental Laws, and (ii) the presence or
existence in, on, at, or under the environment beyond the physical
boundaries of the Mortgaged Properties of any Hazardous Substances,
that migrated or emanated from the Mortgaged Properties.
() "ENVIRONMENTAL DAMAGES" means all claims, judgments,
damages, losses, penalties, fines, liabilities (including strict
liability), encumbrances, liens, costs and expenses of investigation
and defense of any claim, whether or not such is ultimately defeated,
and of any settlement of judgment, of whatever kind or nature,
contingent or otherwise, matured or unmatured, foreseeable or
unforeseeable, including without limitation reasonable attorneys' fees
and disbursements and consultants' fees, any of which are incurred at
any time, and including, but not limited to (i) damages for personal
injury, or injury to property or natural resources occurring upon or
off of the Mortgaged Properties, foreseeable or unforeseeable,
including, without limitation, lost profits, consequential damages,
the cost of demolition, redesign and rebuilding of any improvements on
real property, and interest and penalties as allowed by law;
(ii) diminution in the value of the Mortgaged Properties, and damages
for the loss of or restriction on the use of or adverse impact on the
marketing of rentable or usable space or of any amenity of the
Mortgaged Properties; (iii) reasonable fees incurred for the services
of consultants, contractors, experts, laboratories and all other
reasonable costs incurred in connection with the investigation,
remediation, removal, or disposal of Hazardous Substances or violation
of the Environmental Laws, including, but not limited to, the
preparation of any feasibility studies or reports or the performance
of any response, cleanup, remediation, removal, abatement,
containment, closure, restoration, disposal, or monitoring work
required by and in conformity with any federal, state or local
governmental agency or political subdivision, or reasonably necessary
to make full economic use of the Mortgaged Properties or any other
property or otherwise expended in connection with such conditions, and
including, without limitation, any reasonable attorneys' fees, costs
and expenses incurred in connection with any of the foregoing or in
enforcing this Agreement or collecting any sums due hereunder; and
(iv) liability to any person or entity to indemnify such person or
entity for costs expended in connection with the items referenced in
this subsection (d).
() "ENVIRONMENTAL LAWS" means all federal, state or local laws,
rules or regulations pertaining to the protection of human health or
the environment, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C.
' 9601, ET SEQ.), the Resource Conservation and Recovery Act (42
U.S.C. ' 6901, ET SEQ.), the Federal Clean Air Act (42 U.S.C. ' 7401,
ET SEQ.), and the Federal Clean Water Act (42 U.S.C. ' 1251, ET SEQ.),
each as amended from time to time, and regulations and rules issued
thereunder.
() "HAZARDOUS SUBSTANCES" means (i) any "hazardous substance,"
as such term is defined in either the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C. ' 9601 ET
SEQ.) and the regulations promulgated thereunder (as amended,
"CERCLA"); (ii) any "hazardous waste," as such term is defined in the
Resource Conservation and Recovery Act of 1976 (42 U.S.C. ' 6901 ET
SEQ.) and the regulations promulgated thereunder (as amended, "RCRA");
(iii) any substances or materials listed as hazardous or toxic in the
United States Department of Transportation Table, as amended from time
to time; (iv) asbestos in any form or any asbestos containing
materials; (v) polychlorinated biphenyls ("PCB's"); (vi) any explosive
or radioactive materials; (vii) hydrocarbons, petroleum products, or
any derivative thereof; or (viii) any other chemical, material or
substance that is regulated as hazardous or toxic or exposure to which
is prohibited, limited or regulated by any federal, state, county,
regional, local or other governmental authority or that, even if not
so regulated, poses a material threat to the health and safety of the
occupants or livestock of the Mortgaged Properties or the owners or
occupants of property adjacent thereto.
() "RELEASE" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching,
dumping or disposing into the environment (including, without
limitation, the abandonment or discarding of barrels, containers or
other receptacles containing any Hazardous Substance).
() "REPORTABLE QUANTITY" means that quantity of a material as
set forth in 40 C.F.R. Part 302 or the quantity of a material that is
sufficient to trigger a remediation, response, closure or notification
obligation under applicable Environmental Laws.
.. INDEMNIFICATION... INDEMNIFICATION."
() Subject to subsections (b) and (c) below, notwithstanding
any provision in this Agreement or any Collateral Agreement limiting
or negating the Company's liability, the Company shall protect,
indemnify, save harmless and defend Purchasers and each present and
former registered holder (or beneficial holder through participation
or otherwise) of a Note and their respective past, present and future
officers, directors, shareholders, partners, employees, agents,
contractors, tenants and representatives (individually, an
"Indemnified Party," and collectively, the "Indemnified Parties") from
and against any and all Environmental Damages imposed upon, suffered
or incurred by or asserted against any Indemnified Party or the
Mortgaged Properties arising in any manner in connection with the
existence of an Environmental Condition at the Mortgaged Properties or
the occurrence of any Environmental Activity at the Mortgaged
Properties, whether arising, occurring, or in existence during or
prior to the Company's ownership or operation of the Mortgaged
Properties, whether arising, occurring, or in existence prior to the
issuance of the Notes or at any time thereafter, whether arising,
occurring, or in existence before, during or after enforcement of the
rights and remedies of Purchaser or any other registered holder of a
Note upon default and whether or not the Company is responsible
therefor, including, without limitation, the violation of
Environmental Laws, or any representations, warranties or covenants
contained herein, any imposition by any governmental authority of any
lien or so-called "super priority lien" upon the Mortgaged Properties,
cleanup costs, liability for personal injury or property damage or
damage to the environment and any fines, penalties and punitive
damages with respect thereto. An Indemnified Party may elect to
conduct its own defense through counsel of its own choice, and the
Company agrees to pay the reasonable fees and expenses of such counsel
for conducting such defense but only if an Indemnified Party
determines in good faith that the conduct of its defense by the
Company could be materially prejudicial to the Indemnified Party's
interests. THESE PROVISIONS ARE INTENDED TO INDEMNIFY THE INDEMNIFIED
PARTIES AGAINST (i) THE RESULTS OF THEIR OWN NEGLIGENCE AND (ii) ANY
STRICT LIABILITY IMPOSED ON THE INDEMNIFIED PARTIES.
() Notwithstanding the foregoing, the Company's obligations
hereunder shall not apply with respect to an Environmental Condition
or Environmental Activity arising for the first time after the
Acquisition Date unless such Environmental Condition or Environmental
Activity is caused by the Company or its contractors, agents or
representatives after the Acquisition Date or arose out of an
Environmental Condition or Environmental Activity, whether caused by
the Company or not, occurring or existing prior to the Acquisition
Date. For purposes of this Agreement, the Company shall bear the
burden of proving when an Environmental Condition or Environmental
Activity occurred or existed. In addition, any Hazardous Substances
located upon, about or beneath the Mortgaged Properties or having
migrated to or from the Mortgaged Properties shall be presumed to have
been present prior to the Acquisition Date unless the Company can
demonstrate (i) that a portion of the Hazardous Substances were
introduced to the Mortgaged Properties after the Acquisition Date and
were not introduced by the Company, and (ii) the Environmental Damages
are divisible between the portion of the Hazardous Substances
introduced before and after the Acquisition Date. If the Company can
demonstrate both conditions, then its indemnity shall not extend to
the portion of any divisible Environmental Damages attributable to
Hazardous Substances introduced to the Mortgaged Properties after the
Acquisition Date by parties other than the Company.
() In no event shall the provisions of this Agreement be deemed
to constitute a waiver of, or to be in lieu of, any right or claim,
including without limitation any right of contribution or other right
of recovery that any person entitled to enforce this Agreement might
otherwise have against the Company under the Environmental Laws.
.. AGREEMENT TO REMEDIATE... AGREEMENT TO REMEDIATE."
Notwithstanding the obligation of the Company to indemnify the Indemnified
Parties pursuant to this Agreement, the Company shall upon demand of the
registered holders (other than the Company or any Affiliate) of, in the
aggregate, sixty-six and two-thirds percent (66-2/3%) or more in principal
amount of the Notes at the time outstanding (excluding any Notes directly
or indirectly owned by the Company or any Affiliate), and at the sole cost
and expense of the Company, promptly take all actions in connection with an
Environmental Condition or Environmental Activity causing an Adverse
Environmental Impact that are required by any governmental agency or by
Environmental Laws. Such actions shall include, but not be limited to, the
investigation of the Environmental Condition of the Mortgaged Properties,
the preparation of any feasibility studies, reports or remedial plans, and
the performance of any cleanup, remediation, containment, operation,
maintenance, monitoring or restoration work, whether on or off of the
Mortgaged Properties. All such work shall be performed by one or more
qualified and experienced contractors, selected by the Company. The
Company shall proceed continuously and diligently with such investigatory
and remedial actions, provided that in all cases such actions shall be in
accordance with all applicable requirements of the appropriate governmental
agencies. Any such actions shall be performed in a good, safe and
workmanlike manner and shall minimize any impact on the business conducted
at the Mortgaged Properties. The Company shall pay all costs in connection
with such investigatory and remedial activities, including but not limited
to all power and utility costs, and any and all taxes or fees that may be
applicable to such activities. The Company shall promptly provide to
Purchasers and the registered holder of any Note copies of testing results
and reports that are generated in connection with the above activities.
Promptly upon completion of such investigation and remediation, the Company
shall permanently seal or cap all monitoring ▇▇▇▇▇ and test holes to
industrial standards as required by the Environmental Laws, remove all
associated equipment, and restore the Mortgaged Properties to the maximum
extent possible, which shall include, without limitation, the repair of any
material surface damage, including paving, and the repair, restoration or
reconstruction of any damaged improvements caused by such investigation or
remediation.
.. COVENANTS... COVENANTS."
() The Company shall during its ownership or operation of the
Mortgaged Properties (i) comply with all Environmental Laws relating
to the Mortgaged Properties and the ownership or operation of the
Mortgaged Properties, and not engage in or permit others to engage in
any Environmental Activity in violation of the Environmental Laws;
(ii) establish and maintain, as required by the Environmental Laws,
policies, procedures and programs to monitor and assure compliance
with the Environmental Laws relating to the Mortgaged Properties or
the ownership or operation of the Mortgaged Properties and provide an
Indemnified Party upon request with evidence of the existence and
implementation of these policies, procedures, and programs; (iii)
deliver to Purchasers and the registered holder of any Note within
fifteen (15) days following the occurrence of any such event, written
notice of the discovery by the Company of any event, the occurrence of
which would render any representation or warranty contained in
Section 6.2 incorrect if made at the time of such discovery; (iv)
promptly comply with Environmental Laws requiring the remediation,
abatement, removal, treatment or disposal of Hazardous Substances or
remediation of an Environmental Condition; (v) cause any party who
occupies the Mortgaged Properties to comply with this Section 11.4;
and (vi) not cause or suffer any liens to be recorded against or
imposed against any of the Mortgaged Properties as a result of an
Environmental Condition or Environmental Activity and which liens
violate the terms of Section 14.1(g). The Company shall work
diligently to complete all investigations of Environmental Issues
needed to make such a determination, shall correct any violation of
Environmental Laws identified, and shall remediate any Adverse
Environmental Impact in the manner described in Section 11.3. The
Company acknowledges and agrees that these Environmental Issues and
any Environmental Damages related to them are within the scope of the
indemnification obligation of Section 11.2.
() The Company hereby represents and warrants to Purchasers
that it engaged ROWEnvironmental to investigate each of the
environmental issues (the "Environmental Issues") identified on
EXHIBIT G to the Original Note Purchase Agreement in the manner and
within the time periods described in such EXHIBIT G and provided
Purchaser with a written report that concluded none of the issues
represented a violation of Environmental Laws or an Adverse
Environmental Impact.
() The Company hereby acknowledges that it has received the
results of a subsurface investigation conducted by Law Engineering and
Environmental Services, Inc. ("Law") in connection with the "Green
Acres Hatchery and Feed Mill" in Center, Shelby County, Texas (the
"Feed Mill") and specifically acknowledges receipt of a letter report
from Law, dated April 4, 1997, entitled "Revised Letter Report
Concerning Cost Estimates, Green Acres Feed Mill, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Law Project 60360-6-5829-
02 & 03-916" ("Law Letter Report"). The Company agrees that, at the
closing of the Green Acre Acquisition, the Company will require Green
Acre to enter into an Environmental Escrow Agreement with the Company,
in a form reasonably acceptable to Purchasers, which shall include the
following provisions: (i) Green Acre shall place the amount of
$110,000 in escrow ("Escrow") with ▇▇▇▇▇▇ Trust and Savings Bank
("Escrow Agent"); (ii) Green Acre shall perform a response action in
connection with the Environmental Conditions that are now known or may
be encountered during further investigation or remediation in
connection with "Area 1" and "Area 2" as defined in the Law Letter
Report; (iii) the response action shall commence on or prior to the
closing of the Green Acre Acquisition and Green Acre shall perform the
response action in compliance with all of the requirements of Section
11.3 of this Agreement that are binding on the Company; (iv) the
response action shall be deemed to be completed upon the receipt from
the Texas Natural Resource Conservation Commission ("TNRCC") of a
letter or certificate stating that the TNRCC is satisfied with the
response action performed and that no further activity is required
("Regulatory Closure"); (v) the Escrow shall be released to Green Acre
upon the receipt by the Company of reasonable evidence of Regulatory
Closure; (vi) the Escrow shall be forfeited to the Company in the
event of a default by Green Acre under the Environmental Escrow
Agreement, but shall remain in escrow with the Escrow Agent until
Regulatory Closure is attained at which time it will be released to
the Company upon the written consent of Purchasers; and (vii) the
forfeiture of the Escrow to the Company shall not release any rights
that the Company has against Green Acre for in connection with any
Environmental Condition. The Company further covenants that the
Company shall be liable to the Purchasers for the performance of the
obligations of Green Acre under the Environmental Escrow Agreement and
that a breach by Green Acre of the Environmental Escrow Agreement, if
not cured by the Company within a reasonable time of the Company's
knowledge of the breach, shall be an Event of Default.
.. SITE ASSESSMENTS... SITE ASSESSMENTS." The registered holders
(other than the Company or any Affiliate) of, in the aggregate, a majority
of the principal amount of the Notes at the time outstanding (excluding any
Notes directly or indirectly owned by the Company or any Affiliate) (by its
officers, employees and agents, as applicable) at any time and from time to
time, either prior to or after the occurrence of an Event of Default, may
contract for the services of persons (the "Site Reviewers") to perform
environmental site assessments ("Site Assessments") on the Mortgaged
Properties for the purpose of determining whether there exists on the
Mortgaged Properties any Environmental Condition or Environmental Activity,
or other ownership or operation of the Mortgaged Properties that is in
violation of Environmental Laws or could reasonably be expected to result
in Environmental Damages. The Site Assessments may be performed at any
time or times, upon reasonable notice, and under reasonable conditions
established by the Company that do not unreasonably impede the performance
of the Site Assessments. The Company hereby grants, and shall cause any
tenant to grant, to an Indemnified Party, its agents, attorneys, employees,
consultants, and contractors and the Site Reviewers, an irrevocable license
and authorization to enter upon and inspect the Mortgaged Properties and
perform such tests, including without limitation, subsurface testing, soil
and ground water testing, and other tests that may physically invade the
Mortgaged Properties, as the registered holders (other than the Company or
any Affiliate) of, in the aggregate, a majority of the principal amount of
the Notes at the time outstanding (excluding any Notes directly or
indirectly owned by the Company or any Affiliate), in their sole
discretion, determine is necessary to protect their liens, assignments,
and/or security interests in the Mortgaged Properties. The Company will
supply to the Site Reviewers such historical and operational information
regarding the Mortgaged Properties as may be reasonably requested by the
Site Reviewers to facilitate the Site Assessments and will make reasonably
available for meetings with the Site Reviewers appropriate personnel having
knowledge of such matters. On request, Purchaser (if it shall remain the
holder of any Notes) or any registered holder of any Note shall make the
results of such Site Assessments fully available to the Company within a
reasonable period of time after such request, and the Company (prior to an
Event of Default) may at its election participate under reasonable
procedures in the direction of such Site Assessments and the description of
tasks of the Site Reviewers. The cost of performing such Site Assessments
shall be paid by the Company upon demand of the registered holders (other
than the Company or any Affiliate) of, in the aggregate, a majority of the
principal amount of the Notes at the time outstanding (excluding any Notes
directly or indirectly owned by the Company or any Affiliate).
.. DEFAULT; REMEDIES; SUBROGATION... DEFAULT; REMEDIES;
SUBROGATION." If the Company fails to proceed with any removal or
remediation of Hazardous Substances causing any Adverse Environmental
Impact required by Environmental Laws or to comply with Environmental Laws
or otherwise fails to perform its obligations under this Article 11, at the
option of the registered holders (other than the Company or any Affiliate)
of, in the aggregate, a majority of the principal amount of the Notes at
the time outstanding (excluding any Notes directly or indirectly owned by
the Company or any Affiliate), such registered holders may, but shall not
be obligated to, do whatever is reasonable and in conformity with the
Environmental Laws at the Company's sole cost and expense to remove or
remediate such Hazardous Substances causing an Adverse Environmental Impact
or otherwise comply with Environmental Laws, and the indemnity provided in
11.2 hereof shall cover all such reasonable and necessary costs and
expenses and shall be payable by the Company on demand. Without in any way
limiting or affecting the Company's liability hereunder, Purchasers and
each registered holder of a Note shall be subrogated to any rights the
Company may have under any indemnifications from or agreements entered into
with any present, future or former owners, tenants, occupants or other
users of the Mortgaged Properties.
.. SURVIVAL... SURVIVAL." The obligations of the Company under this
Article 11 shall survive any payment of the Notes, any discharge,
satisfaction, release or assignment of any Security Document, the discharge
of the Company's obligations under the Collateral Agreements, any transfer
of the Mortgaged Properties or any part thereof, any exercise of remedies
by Purchaser or the registered holder of any Notes, including, without
limitation, the appointment of a receiver, any foreclosure of the Security
Documents or any transfer of the Mortgaged Properties (or any part thereof)
by deed in lieu of foreclosure, any investigation or any information that
may be obtained by Purchasers or the registered holder of any Notes before
or after the Acquisition Date, and any other event or circumstance
whatsoever.
.. CONFLICTS.. CONFLICTS". In the event of any conflict between the
terms of this Article 11 and those contained in the Mortgages, the terms
hereof shall control.
ARTICLE .."
REGISTRATION, TRANSFER, AND SUBSTITUTION OF NOTES
.. NOTE REGISTER; OWNERSHIP OF NOTES... NOTE REGISTER; OWNERSHIP OF
NOTES." The Company will keep at its principal office a register in which
the Company will provide for the registration of the Notes and the
registration of transfers of the Notes. The Company may treat the Person
in whose name any Note is registered on such register as the owner thereof
for the purpose of receiving payment of the principal of and the applicable
Premium, if any, and interest on such Note and for all other purposes,
whether or not such Note shall be overdue, and the Company shall not be
affected by any notice to the contrary.
.. TRANSFER AND EXCHANGE OF NOTES... TRANSFER AND EXCHANGE OF
NOTES." Upon surrender of any Note for registration of transfer or for
exchange to the Company at its principal office, at the expense of the
transferring parties, the Company will execute and the Company will
authenticate and deliver in exchange therefor a new Note or Notes in
denominations, as requested by the registered holder or transferee, which
aggregate the unpaid principal amount of such surrendered Note. Each such
new Note shall be registered in the name of such Person as such registered
holder or transferee may request, shall be dated so that there will be no
loss of interest on such surrendered Note and shall be otherwise of like
tenor.
.. REPLACEMENT OF NOTES... REPLACEMENT OF NOTES." Upon receipt of
evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of any Note and, in the case of any such loss,
theft or destruction, upon delivery of an indemnity agreement reasonably
satisfactory to the Company from the registered holder of such Note and
financial information reasonably satisfactory to the Company verifying such
registered holder's ability to provide such indemnification, or in the case
of any such mutilation, upon the surrender of such Note for cancellation to
the Company at its principal office, at the expense of the party requesting
replacement, the Company will execute, authenticate and deliver, in lieu
thereof, a new Note of like tenor, dated so that there will be no loss of
interest on such lost, stolen, destroyed or mutilated Note. Any Note in
lieu of which any such new Note has been executed and delivered by the
Company shall not be deemed to be an outstanding Note for any purpose
hereof.
ARTICLE .."
PAYMENTS ON NOTES
So long as a Purchaser or its nominee shall hold any Note, the Company
will pay all sums becoming due on such Note for principal, the applicable
Premium, if any, and interest in immediately available funds by the method
and at the address specified for such purpose in the Schedule of
Information for Payment and Notices at the end hereof (the "Schedule of
Information for Payment and Notices"), or by such other method or at such
other address as a Purchaser shall have specified from time to time to the
Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that any Note
paid or prepaid in full shall be surrendered to the Company for
cancellation at its principal office. Prior to any sale or other
disposition of any Note held by a Purchaser or its nominee, such Purchaser
will, at its election, either (a) endorse thereon the amount of principal
paid thereon and the last date to which interest has been paid thereon, or
(b) surrender such Note to the Company in exchange for a new Note or Notes
pursuant to Section 12.2. The Company will afford the benefits of this
Article 13 to any registered holder of a Note that has made the same
agreement relating to such Note as a Purchaser have made in this
Article 13.
ARTICLE .."
EVENTS OF DEFAULT AND ACCELERATION
.. EVENTS OF DEFAULT.. EVENTS OF DEFAULT". The occurrence of any of
the following conditions or events shall constitute an "Event of Default"
under this Agreement:
() PAYMENTS. The Company shall default in the payment when due
of any principal, Premium, if any, or interest on any Note (whether
the same becomes due and payable at maturity, by declaration or
otherwise) or any other amounts owing hereunder; or
() REPRESENTATIONS, ETC. Any representation or warranty made
in writing by or on behalf of the Company herein or in any Collateral
Agreement or in any statement or certificate delivered or required to
be delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
() BREACH OF CERTAIN COVENANTS. The Company shall default in
the due performance or observance by it of any term, covenant or
agreement contained in Section 10.7 (to the extent such default could
reasonably be expected to have a Material Adverse Effect or adversely
affect Purchaser's rights in the Collateral), 10.8, 10.9, 10.11,
10.12, 10.13, 10.14, 10.19(b) or 10.20; or
() BREACH OF OTHER COVENANTS. The Company shall default in the
due performance or observance by it of any term, covenant or agreement
(other than those referred to in subsections (a), (b) or (c) of this
Section 14.1) contained in this Agreement and such default shall
continue unremedied for a period of at least 30 calendar days after
the earlier of (x) written notice to the defaulting party by any
registered holder of a Note or (y) a Responsible Officer has knowledge
of such default; or
() DEFAULT UNDER OTHER AGREEMENTS. (i) The Company shall
default in the payment when due of any principal of or interest on any
Debt (which Debt is in an aggregate principal amount of $2,000,000 or
more) and such default shall not be waived or cured within any
applicable grace or cure period; or (ii) the maturity of any Debt of
the Company in an aggregate principal amount of $2,000,000 or more
shall be accelerated or subject to acceleration due to a default
thereunder; or
() BANKRUPTCY, ETC. The Company shall commence a voluntary
case concerning itself under title 11 of the United States Code
entitled "Bankruptcy", as now or hereafter in effect, or any successor
statute thereto (the "Bankruptcy Code"); or an involuntary case is
commenced against the Company under the Bankruptcy Code and the
petition is not controverted within 10 Business Days, or is not
dismissed within 60 days, after commencement of the case; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the property of the
Company; or the Company commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the
Company; or there is commenced against the Company any such proceeding
which remains undismissed for a period of 60 days; or the Company is
adjudicated insolvent or bankrupt; or any order of relief or other
order approving any such case or proceeding is entered; or the Company
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed
for a period of 60 days; or the Company makes a general assignment for
the benefit of creditors; or any corporate action is taken by the
Company for the purpose of effecting any of the foregoing; or
() ERISA. (i) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a
waiver of such standard or extension of any amortization period is
sought or granted under Section 412 of the Code, any Plan is, shall
have been or is reasonably likely to be terminated or the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded
Current Liability, the Company or any Related Person has incurred or
is reasonably likely to incur a liability to or on account of a Plan
under Section 405, 409, 502(i), 501(1), 515, 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Code, or
the Company or any Related Person has incurred or is reasonably likely
to incur liabilities pursuant to one or more employee welfare benefit
plan that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA); and
(ii) there shall result from any event or events described in clause
(i) of this subsection (f) the imposition or granting of a Lien, or a
liability or a material risk of incurring a liability; and (iii) any
Lien or liability referred to in clause (ii) of this subsection (f)
could reasonably be expected to have a Material Adverse Effect; or
() JUDGMENTS. There shall remain in force, undischarged,
unsatisfied, unstayed and unbonded, for more than 60 days, any final
judgment entered against any one or more of the Company which is not
funded by insurance in due course in accordance with applicable
insurance coverage, from which no further appeal may be taken and
which, with other outstanding undischarged, unsatisfied, unstayed and
unbonded final judgments against such Person not funded by insurance
in due course in accordance with applicable insurance coverage,
exceeds $5,000,000 in the aggregate.
.. ACCELERATION... ACCELERATION."
() Upon the occurrence of any Event of Default described in
Section 14.1(f), the unpaid principal amount of and accrued interest
on the Notes shall automatically become due and payable, and there
shall also be due and payable the applicable Premium in respect of the
unpaid principal amount of the Notes, all without presentment, demand,
protest, notice of intent to accelerate, notice of acceleration, or
any other notice of any kind, which are hereby waived.
() Upon the occurrence of any Event of Default other than as
described in Section 14.1(f), any registered holder or registered
holders (other than the Company or any Affiliate thereof) of, in the
aggregate, fifty-one percent (51%) or more in principal amount of the
Notes at the time outstanding (excluding any Notes directly or
indirectly owned by the Company or any Affiliate) may at any time
(unless all defaults shall theretofore have been remedied and all
costs and expenses including, without limitation, reasonable
attorneys' fees and expenses incurred by or on behalf of the
registered holders of the Notes by reason thereof shall have been paid
in full by the Company) at its or their option, by written notice or
notices to the Company, declare all the Notes to be due and payable,
whereupon the same shall forthwith mature and become due and payable,
together with interest accrued thereon, and there shall also be due
and payable the applicable Premium in respect of the principal amount
of the Notes so declared due and payable, all without presentment,
demand, protest, notice of intent to accelerate, notice of
acceleration, or any other notice of any kind (except as otherwise
specifically provided herein), which are hereby waived. The Company
acknowledges that Purchasers purchased the Notes on the basis and
assumption that Purchasers and the registered holders from time to
time of the Notes would receive the payments of principal and/or
interest set forth in Section 2.1 and Articles 7 and 8 hereof for the
full term of the Notes; therefore, whenever the maturity of the Notes
has been accelerated by reason of an Event of Default, a tender of the
amount necessary to satisfy any part or all of the indebtedness
represented by the Notes paid at any time following such Event of
Default and prior to a foreclosure or trustee's sale shall be deemed a
voluntary prepayment, and such payment shall include the applicable
Premium. Similarly, any purchase at a foreclosure sale or a trustee's
sale shall be deemed a voluntary prepayment, and the registered
holders of the Notes shall, to the extent permitted by law, receive
out of the proceeds of such sale, in addition to all other amounts to
which they are entitled, the applicable Premium.
.. REMEDIES... REMEDIES." If any Event of Default shall occur and
be continuing, the registered holder of any Note at the time outstanding
may proceed to protect and enforce the rights available to such registered
holder at law, in equity, by statute or otherwise, whether for the specific
performance of any agreement contained herein or, in the case of any
registered holder of Notes, in such Note, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the exercise
of any power granted hereby or thereby or by law or otherwise. In case of
a default in the payment of any principal of or applicable Premium, if any,
or interest on any Note, the Company will pay to the registered holder
thereof such further amount as shall be sufficient to cover the costs and
expenses of collection, including, without limitation, reasonable
attorneys' fees, expenses and disbursements incurred in connection
therewith. No course of dealing and no delay on the part of any registered
holder of any Note in exercising any right, power or remedy shall operate
as a waiver thereof or otherwise prejudice such registered holder's rights,
powers or remedies except as expressly provided for herein. No right,
power or remedy conferred hereby upon any registered holder of any Note or
by any Note upon any registered holder thereof shall be exclusive of any
other right, power or remedy referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise. Subject to
Section 14.2(b), any registered holder or registered holders (other than
the Company or any Affiliate) of, in the aggregate, a majority in principal
amount of the Notes at the time outstanding (excluding any Notes directly
or indirectly owned by the Company or any Affiliate) may at any time pursue
any remedies available under this Agreement or any of the Collateral
Agreements.
ARTICLE .."
EXPENSES
The Company will pay all reasonable expenses in connection with the
negotiation, execution and delivery, performance and enforcement, and
amendment or waiver of any terms or provisions of this Agreement, any
Collateral Agreement, and the Notes, including, without limitation: (a)
the cost and expenses of preparing and reproducing this Agreement, the
Collateral Agreements and the Notes, of furnishing all opinions of Special
Counsel, Purchasers' special local counsel, and counsel for the Company
(including any opinions requested by Special Counsel as to any legal matter
arising hereunder) and all certificates on behalf of the Company and of the
Company's performance of and compliance with all agreements and conditions
contained therein on its part to be performed or complied with; (b) the
cost of delivering to each Purchaser's principal office, insured to such
Purchaser's satisfaction, the Notes sold to each Purchaser hereunder; (c)
the reasonable out-of pocket expenses and reasonable fees, expenses and
disbursements of Special Counsel and Purchaser's special local counsel in
connection with any amendments or waivers hereunder; and (d) the cost and
expense related to title insurance and charges, survey, environmental
audit, engineering and architect fees, recording fees, and real estate
taxes contemplated herein or in the Collateral Agreements. The Company
also will pay, and will save each Purchaser and each registered holder of
any Notes harmless from, (i) all claims in respect of the fees of any
brokers and finders, except those engaged by such Purchaser, and (ii) any
and all liabilities with respect to any taxes (including interest and
penalties), other than federal income taxes, that may be payable in respect
of (A) the execution and delivery hereof and of the Collateral Agreements,
(B) the issue of the Notes hereunder, and (C) any amendment or waiver under
or in respect hereof, of any Collateral Agreement or of the Notes.
ARTICLE .."
MISCELLANEOUS
.. SURVIVAL... SURVIVAL." All representations, warranties and
covenants contained herein, in the Notes and in any other Collateral
Agreement or made in writing by or on behalf of the Company in connection
with the transactions contemplated hereby and thereby shall survive the
execution and delivery hereof, any investigation at any time made by a
Purchaser or on such Purchaser's behalf, the purchase of the Notes
hereunder, or any disposition or payment of the Notes. All statements
contained in any certificate delivered by or on behalf of the Company
pursuant hereto or in connection with the transactions contemplated hereby
shall be deemed representations and warranties of the Company hereunder.
.. AMENDMENTS AND WAIVERS... AMENDMENTS AND WAIVERS." Any term
hereof or of the Notes may be amended (with written consent of the
Company), and the observance of any term hereof or of the Notes may be
waived (either generally or in a particular instance and either
retroactively or prospectively), only upon the written consent of the
registered holder or registered holders (other than the Company or any
Affiliate) of, in the aggregate, sixty-six and two-thirds percent (66-2/3%)
or more in principal amount of the Notes at the time outstanding (excluding
any Notes directly or indirectly owned by the Company or any Affiliate),
provided that without the prior written consent of the registered holders
of all the Notes at the time outstanding (excluding any Notes directly or
indirectly owned by the Company or any Affiliate), no such amendment or
waiver shall (a) extend the fixed maturity or reduce the amount or extend
the time of payment of any principal or premium payable (whether as an
installment or upon any prepayment) on any Note of such class; (b) reduce
the percentage set forth above of the principal amount of the Notes, the
registered holders of which are required to consent to any amendment or
waiver set forth in such subdivision; or (c) change the percentage of the
principal amount of the Notes, the registered holders of which may declare
the Notes to be due and payable as provided in Section 14.2. Any amendment
or waiver effected in accordance with this Section 16.2 shall be binding
upon each registered holder of any Note, at the time outstanding, each
future registered holder of any Note, and the Company.
.. INDEMNIFICATION.. INDEMNIFICATION". The Company will indemnify
and hold harmless each Indemnified Party from and against any and all
losses, claims, damages and liabilities, joint or several (including all
reasonable legal fees or other expenses reasonably incurred by any
Indemnified Party in connection with the preparation for or defense of any
pending or threatened claim, action or proceeding, whether or not resulting
in any liability), to which such Indemnified Party may become subject
(whether or not such Indemnified Party is a party thereto) under any
applicable federal or state law or otherwise caused by or arising out of,
or allegedly caused by or arising out of, this Agreement, any Collateral
Agreement, or any transaction contemplated hereby, other than losses,
claims, damages or liabilities resulting from any grossly negligent or
unlawful act by Indemnified Party seeking indemnification hereunder. THESE
PROVISIONS ARE INTENDED TO INDEMNIFY THE INDEMNIFIED PARTIES AGAINST THE
RESULTS OF THEIR OWN NEGLIGENCE.
Promptly after receipt by an Indemnified Party of notice of any claim,
action or proceeding with respect to which an Indemnified Party is entitled
to indemnity hereunder, such Indemnified Party will notify the Company of
such claim or the commencement of such action or proceeding, provided that
the failure of an Indemnified Party to give notice as provided herein shall
not relieve the Company of its obligations under this Section 16.3 with
respect to such Indemnified Party, except to the extent that the Company is
actually prejudiced by such failure. The Company will assume the defense
of such claim, action or proceeding and will employ counsel satisfactory to
the Indemnified Party and will pay the fees and expenses of such counsel.
Notwithstanding the preceding sentence, the Indemnified Party will be
entitled, at the expense of the Company, to employ counsel separate from
counsel for the Company, and for any other party in such action, if the
Indemnified Party reasonably determines that a conflict of interest or
other reasonable basis exists that makes representation by counsel chosen
by the Company not advisable. If an Indemnified Party appears as a witness
in any action or proceeding brought against the Company or any of its
Affiliates (or any of their partners, officers, directors or employees) in
which an Indemnified Party is not named as a defendant, the Company agrees
to reimburse such Indemnified Party for all out-of-pocket expenses incurred
by it (including fees and expenses of counsel) in connection with the
appearance as a witness. The Indemnified Party shall settle no claim or
take any other action prejudicing the Company's defense without the consent
of the Company, which consent will not be unreasonably withheld or delayed.
Purchaser agrees to reasonably cooperate with the Company in the defense of
any such action or proceeding.
.. USURY NOT INTENDED... USURY NOT INTENDED." The Company, Purchasers
and all other registered holders of any Notes intend
to conform strictly to the usury laws in force that apply to the transactions
evidenced or contemplated hereby. Accordingly, all agreements among the
Company, Purchasers, and any other registered holder of any Notes, whether
now existing or hereafter arising and whether written or oral, are hereby
limited so that in no contingency, whether by reason of acceleration of the
maturity of the Notes, or otherwise, shall the interest (and all other sums
that are deemed to be interest) contracted for, charged, received, paid
or agreed to be paid exceed the Highest Lawful Rate (as defined below).
The Company and Purchasers stipulate and agree that the terms and provisions
contained in this Agreement and the Collateral Agreements are not intended to
and shall never be construed to create a contract to pay for the use,
forbearance or detention of money an amount in excess of the maximum amount
permitted to be charged by applicable law, if any.
Anything in this Agreement or the Collateral Agreements to the
contrary notwithstanding, neither the Company nor any other party now or
hereafter becoming liable for payment of the Notes shall ever be required
to pay interest on or with respect to the Notes or any other obligation
hereunder at a rate in excess of the Highest Lawful Rate, and if the
effective rate of interest that would otherwise be payable under this
Agreement or on or with respect to the Notes would exceed the Highest
Lawful Rate, or if the registered holders of such Notes or obligation shall
receive anything of value that is deemed or determined to constitute
interest that would increase the effective rate of interest payable under
this Agreement or on or with respect to the Notes or the Collateral
Agreements to a rate in excess of the Highest Lawful Rate, then (a) the
amount of interest that would otherwise be payable under this Agreement,
the Notes or the Collateral Agreements shall be reduced to the amount
allowed at the Highest Lawful Rate under applicable law, and (b) any
unearned interest paid by the Company or any interest paid by the Company
in excess of the Highest Lawful Rate shall, at the option of the registered
holders of the Notes, be either refunded to the Company or credited on the
principal of such Notes. It is further agreed that, without limitation of
the foregoing, all calculations of the rate of interest contracted for,
charged or received by any registered holder of the Notes, or under this
Agreement, that are made for the purpose of determining whether such rate
exceeds the Highest Lawful Rate, shall be made, to the extent permitted by
applicable law (now or, to the extent permitted by law, hereafter enacted)
governing the Highest Lawful Rate, by (i) characterizing any nonprincipal
payment as an expense, fee or premium rather than as interest, and
(ii) amortizing, prorating, allocating and spreading in equal parts during
the period of the full term of the Notes (including the period of any
renewal or extension thereof), all interest at any time contracted for,
charged or received by such registered holder in connection therewith. As
used in this Section 16.4, the term "Highest Lawful Rate" means the maximum
nonusurious rate of interest permitted from time to time to be contracted
for, taken, charged or received with respect to the Notes by the registered
holders thereof, under applicable law as in effect with respect to this
Agreement or the Notes.
.. NOTICES... NOTICES."
() For all purposes under this Agreement, the address of the
Company shall be ▇.▇. ▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Chief Financial Officer, telecopy
no. ▇▇▇-▇▇▇-▇▇▇▇ and for each Purchaser shall be the address set forth
on the Schedule of Information for Payment and Notices or such other
address of which all such Persons have received ten (10) days prior
written notice.
() Any notice, demand, request or report required or permitted
to be given or made to the Company or a Purchaser under this Agreement
shall be in writing and shall be deemed given or made when delivered
in person, when sent if by overnight courier or telecopy (if followed
by hard copy) or five (5) Business Days after the date when sent by
United States registered or certified mail to any such Person at its
address referenced in Section 16.5(a) above.
.. REPRODUCTION OF DOCUMENTS... REPRODUCTION OF DOCUMENTS." This
Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
executed, (b) documents received by Purchasers at the Closing (except the
Notes themselves), and (c) financial statements, certificates and other
information previously or hereafter furnished to Purchasers, may be
reproduced by a Purchaser or the registered holder of any Notes by any
photographic, photostatic, microfilm, microcard, miniature photographic or
other similar process and a Purchaser or the registered holder of any Notes
may destroy any original document so reproduced. The Company agrees and
stipulates that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether
or not the original is in existence and whether or not such reproduction
was made by a Purchaser or the registered holder of any Notes in the
regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
.. SUCCESSORS AND ASSIGNS... SUCCESSORS AND ASSIGNS."
(a) This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns
of the parties hereto, whether so expressed or not, and shall inure to
the benefit of and be enforceable by any registered holder or
registered holders from time to time of any Notes. The
representations, warranties and covenants of the Company hereunder are
intended to be for the benefit of, and inure to, all registered
holders from time to time of any of the Notes.
(b) The Company acknowledges that Purchasers intend to
participate all or a portion of the Notes to one or more of such
Purchasers' Affiliates and that all of the representations,
warranties, covenants and agreements of the Company shall be for the
benefit of Purchasers' Affiliates as well as Purchaser.
.. ENTIRE AGREEMENT.. ENTIRE AGREEMENT". THIS WRITTEN AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
.. GOVERNING LAW... GOVERNING LAW." THIS AGREEMENT AND THE NOTES
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF TEXAS (WITHOUT REGARD TO ITS CONFLICT OF LAW PROVISIONS).
.. INVALID PROVISIONS... INVALID PROVISIONS." If any provision
hereof or any application thereof shall be invalid or unenforceable, the
remainder hereof and any other application of such provision shall not be
affected thereby.
.. HEADINGS... HEADINGS." The Table of Contents and Section
headings herein are for purposes of reference only and shall not constitute
a part hereof.
.. COUNTERPARTS... COUNTERPARTS." This Agreement may be executed in
any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.
.. FURTHER ACTION.. FURTHER ACTION". The parties shall execute all
documents, provide all information, and take or refrain from taking all
actions as may be necessary or appropriate to achieve the purposes of this
Agreement.
.. CREDITORS.. CREDITORS". None of the provisions of this Agreement
shall be for the benefit of or enforceable by any creditors of the Company,
except as otherwise expressly provided herein.
.. WAIVER.. WAIVER". No failure by any party to insist upon the
strict performance of any covenant, duty, agreement, or condition of this
Agreement or to exercise any right or remedy consequent upon a breach
thereof shall constitute a waiver of any such breach or any other covenant,
duty, agreement, or condition. No single or partial exercise of any power
or right shall preclude any other or further exercise thereof or the
exercise of any other power or right. No waiver by a party of any right
hereunder or of any default by another shall be binding upon such party
unless in writing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PILGRIM'S PRIDE CORPORATION
By:
Name: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Executive President
▇▇▇▇ ▇▇▇▇▇▇▇ MUTUAL LIFE INSURANCE COMPANY
By:
Name:
Title:
SIGNATURE 1A (CAYMAN), LTD.
By: ▇▇▇▇ ▇▇▇▇▇▇▇ Mutual Life Insurance Company,
Portfolio Advisor
By:
Name:
Title:
