EXHIBIT 10.3
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NEW XXXXXXX
CREDIT AGREEMENT
by and between
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY,
a Massachusetts Mutual Life Insurance Company
TABLE OF CONTENTS
Page
R E C I T A L S. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . 2
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . 2
SECTION 1.2 Accounting Terms and Determinations 21
SECTION 1.3 Singular and Plural Terms . . . . . . . . . 21
ARTICLE 2 THE NEW XXXXXXX LOAN. . . . . . . . . . . . . . . . 21
SECTION 2.1 Post Reorganization Indebtedness 21
SECTION 2.2 New Xxxxxxx Note. . . . . . . . . . . . . . 22
SECTION 2.3 New Xxxxxxx Loan Security and
Priority Thereof. . . . . . . . . . . . . . 23
SECTION 2.4 Guaranties. . . . . . . . . . . . . . . . . 24
SECTION 2.5 Environmental Indemnity Agreement . . 24
SECTION 2.6 Subordination Agreement . . . . . . . . . . 24
SECTION 2.7 Financing Statements. . . . . . . . . . . . 25
SECTION 2.8 [Intentionally reserved]. . . . . . . . . . 25
SECTION 2.9 Closing . . . . . . . . . . . . . . . . . . 25
SECTION 2.10 Payments. . . . . . . . . . . . . . . . . . 25
SECTION 2.11 Interest. . . . . . . . . . . . . . . . . . 26
SECTION 2.12 Prepayments . . . . . . . . . . . . . . . . 27
SECTION 2.13 Principal Amortization. . . . . . . . . . . 29
ARTICLE 3 REPRESENTATIONS AND WARRANTIES . . . . . . . . . 29
SECTION 3.1 Corporate Existence and Power . . . . . . . 29
SECTION 3.2 Corporate and Governmental
Authorization: No Contravention. . . . . . 29
SECTION 3.3 Binding Effect. . . . . . . . . . . . . . . 30
SECTION 3.4 Litigation. . . . . . . . . . . . . . . . . 30
SECTION 3.5 Compliance with ERISA.. . . . . . . . . . . 30
SECTION 3.6 Taxes.. . . . . . . . . . . . . . . . . . . 31
SECTION 3.7 Compliance with Laws. . . . . . . . . . . . 31
SECTION 3.8 Investment Company Act; Certain Regulations 31
SECTION 3.9 Possession of Franchises, Licenses, etc. . .31
SECTION 3.10 Full Disclosure.. . . . . . . . . . . . . . 31
SECTION 3.11 Labor Disputes and Acts of God.. . . . . . 32
SECTION 3.12 Environmental Matters.. . . . . . . . . . .32
SECTION 3.13 Brokers' Fees.. . . . . . . . . . . . . . . 34
SECTION 3.14 Capitalization of Borrower. . . . . . . . . 34
SECTION 3.15 Subsidiaries and Ownership of Stock. . . . .34
SECTION 3.16 Properties and Assets . . . . . . . . . . . 35
SECTION 3.17 Preservation of Lender Rights . . . . . . . 35
SECTION 3.18 No Side Agreements. . . . . . . . . . . . . 35
ARTICLE 4 COVENANTS . . . . . . . . . . . . . . . . . . . . . .36
SECTION 4.1 Information.. . . . . . . . . . . . . . . . 36
SECTION 4.2 Payment of Obligations. . . . . . . . .. . . 40
SECTION 4.3 Maintenance and Preservation of Collateral. .40
SECTION 4.4 Insurance.. . . . . . . . . . . . . . . . . .43
SECTION 4.5 Inspection of Property, Books and Records. . 45
SECTION 4.6 Conduct of Business and
Maintenance of Subsidiaries. . . . . . . . . 46
SECTION 4.7 Debt; Debt Repayments and Cancellations. . . 47
SECTION 4.8 Liens.. . . . . . . . . . . . . . . . . . . .48
SECTION 4.9 Consolidations, Mergers,
Acquisitions and Dispositions of
Assets. . . . . . . . . . . . .. . . . . . . 48
SECTION 4.10 Further Assurances. . . . . . . . . . .. . . 48
SECTION 4.11 Restricted Payments.. . . . . . . . . . . . .48
SECTION 4.12 Financial Covenants.. . . . . . . . . . . . .48
SECTION 4.13 Limitations on Investments. . . . . . . . . .52
SECTION 4.14 Fiscal Year; Accounting Practices. .. 52
SECTION 4.15 Amendment of Debt, Corporate and
other Documents. . . . . . . . . . . .. . . 52
SECTION 4.16 Leases. . . . . . . . . . . . . . . . . . . .52
SECTION 4.17 Transactions with Affiliates. . . . . . . . .53
SECTION 4.18 Compliance with ERISA.. . . . . . . . . . . .54
SECTION 4.19 Sales and Leasebacks. . . . . . . . . . . . 54
SECTION 4.20 Other Payment Restrictions
Affecting Subsidiaries. . . . . .. . . . . . 54
SECTION 4.21 Compliance with Laws. . . . . . .. . . . . . 54
SECTION 4.22 Agricultural Consultant Review. . . . . . . .54
SECTION 4.23 Senior Executive Management . . . . . . . . .55
SECTION 4.24 Limitations on Dispositions of Collateral. . 55
SECTION 4.25 Equity Infusion.. . . . . . . . . . . . . . .57
SECTION 4.26 New Credit Agricole Obligations.. . . . . . .57
SECTION 4.27 Change of Control.. . . . . . . . . . . . . .57
SECTION 4.28 E & Y Causes of Action. . . . . . . . . . . .59
SECTION 4.29 Independent Boards of Directors . . . . . . .59
SECTION 4.30 Capital Expenditures. . . . . . . . . . . . .59
SECTION 4.31 Swaps and Similar Arrangements. . . . . . . .59
SECTION 4.32 Certain Insurance Policies. . . . . . . . . .60
SECTION 4.33 Title Insurance Commitment. . . . . .. . . . 60
ARTICLE 5 CONDITIONS. . . . . . . . . . . . . . . . . . . . . .60
SECTION 5.1 Lender's Conditions . . . . . . . . . . . . .60
ARTICLE 6 EVENTS OF DEFAULTS. . . . . . . . . . . . . . . . . .65
SECTION 6.1 Events of Defaults. . . . . . . . . . . . . 65
SECTION 6.2 Acceleration. . . . . . . . . . . . . . . . 68
SECTION 6.3 Remedies Upon an Event of Default.. . . . . 68
SECTION 6.4 Rescission of Acceleration. . . . . . . . . .69
ARTICLE 7 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . .70
SECTION 7.1 Notices.. . . . . . . . . . . . . . . . . . .70
SECTION 7.2 No Waivers. . . . . . . . . . . . . . . . . .70
SECTION 7.3 Expenses; Documentary Taxes;
Indemnification.. . . . . . . . . .. . . . . 70
SECTION 7.4 Amendments and Waivers. . . . . . . . . . .. 72
SECTION 7.5 Successors and Assigns;
Participations. . . . .. . . . . . . . . . . 72
SECTION 7.6 Governing Law; Jurisdiction;
Waiver of Jury Trial. . . . . . . .. . . . . 72
SECTION 7.7 Effectiveness.. . . . . . . . . . . . . . .. 73
SECTION 7.8 Collateral. . . . . . . . . . . . . . . . . .73
SECTION 7.9 Independence of Covenants.. . . . . . . . . .74
SECTION 7.10 Survival. . . . . . . . . . . . . . . . . . 74
SECTION 7.11 Incorporations; Captions. . . . . . . . . . .74
SECTION 7.12 Investigation.. . . . . . . . . . . . . . . .74
SECTION 7.13 Time is of the Essence. . . . . . . . . . . .74
SECTION 7.14 Prior Understandings. . . . . . . . . . . . 74
SECTION 7.15 Fair Construction.. . . . . . . . . . . . . .74
SECTION 7.16 Lender Borrower Relationship. . . . . . . . .75
SECTION 7.17 Lender as Attorney In Fact. . . . . . . . . .75
SECTION 7.18 Revival of Obligations. . . . . . . . . . . .76
SECTION 7.19 Submission of Agreement . . . . . . . . . . .76
SECTION 7.20 Third-Party Consultants . . . . . . . . . . 76
SECTION 7.21 Inconsistencies with Loan Documents. . . . . 77
SECTION 7.22 Counterparts. . . . . . . . . . . . . . . . .77
SECTION 7.23 No Novation . . . . . . . . . . . . . . . . .77
SECTION 7.24 Registration, Etc. of New Xxxxxxx Note. . . 77
SECTION 7.25 Waiver of Appraisement, Valuation, etc. . . .78
SECTION 7.26 Waiver of Marshalling and Other Defense. . . 78
SCHEDULES
1.1. . . . . . . . . . . . . . .Legal Description Of Blythe Ranch
1.1. . . . . . . . . . . . . . . . . . Crop Development Plan Data
1.1. . . . . . . . . . . . . . .List Of Debtors (Except Borrower)
1.1. . . . . . . . . . . . . . . . . . . . . . . . . . Make Whole
1.1. . . . . . . . . . . . . . . . . . . . . . MetLife Personalty
1.1. . . . . . . . . . . . .List of Certain Permitted Investments
as of the Effective Date
1.1. . . . . . . . . . . . . . . .List of Certain Permitted Liens
1.1. . . . . . . . . . . . . . . . . . . . Short Term Water Sales
2.10 . . . . . . . . . . . . . Xxxxxxx Wire Transfer Instructions
2.13 . . . . . . . . . . . . . . . . . . . .Amortization Schedule
3.4. . . . . . . . . . .List of Pending and Threatened Litigation
3.5. . . . . . . . . . . . . . . .List of ERISA Plan Terminations
3.6. . . . . . . . . . . . . . . . . . . . . .Certain Tax Matters
3.11 . . . . . . . . . . . . . . Collective Bargaining Agreements
3.12 . . . . . . . . . . . . . . . .Certain Environmental Matters
3.15 . . . . . . . . . . . .List of Borrower and all Subsidiaries
3.16 . . . . . . . . . . . . . . . .List of Properties and Assets
4.3(b)(xvi). . . . . . . . . . List of Key Man Insurance Policies
4.6(c) . . . . . . . . . . . . . . . . . . List of Joint Ventures
4.7. . . . . . . . . . . . . . . . . . . . Certain Permitted Debt
4.18 . . . . . . . . . . . . . . . . List of Existing ERISA Plans
4.24(b)(iv). . . . . . . . . . . . . . . .List of Direct Expenses
4.30 . . . . . . . . . . . . .Permanent Crop Capital Expenditures
4.32 . . . . . . . . . . . . . . . . . .Aurora Insurance Premiums
4.33 . . . . . . . . . . . . . . . . . Title Insurance Commitment
5.1(g) . . . . . . . . . . . . . . . . . .Title Commitment Letter
5.1(j) . . . . . . . . . . . . . . . . . . . . .Corporate Actions
5.1(v) . . . . . . . . . . . . . . . . . . . . . . . . . Releases
7.1. . . . . . . . . . . . . . . . . . . . .Addresses For Notices
EXHIBIT A. . . . . . . . . . . . .Form of Secured Promissory Note
NEW XXXXXXX
CREDIT AGREEMENT
This New Xxxxxxx Credit Agreement ("Credit Agreement")
dated as of September 13, 1996 is made by and between SUN
WORLD INTERNATIONAL, INC., a Delaware corporation and the
successor by merger on and after the Effective Date (as
defined below) to Sun World International, Inc. ("Old SWII")
and Sun World, Inc. ("Old SWI"), both Delaware corporations
and debtors in possession in the Chapter 11 Case (as defined
below), as borrower (the "Borrower"); and XXXX XXXXXXX MUTUAL
LIFE INSURANCE COMPANY, a Massachusetts mutual life insurance
company, as lender (the "Lender").
R E C I T A L S
A. The Borrower and the Lender (singly sometimes a
"Party," and collectively sometimes, the "Parties") are
entering into this Credit Agreement pursuant to the Debtors'
Fourth Amended Consolidated Plan of Reorganization (As
Amended) dated June 3, 1996 and the Debtors' Disclosure
Statement with respect thereto (singly and collectively, said
Plan and Disclosure Statement, the "Plan") filed in Chapter 11
Case (as defined below) pending before the United States
Bankruptcy Court for the Central District of California.
B. The Lender has a loan (the "Original Loan")
outstanding to Old SWI, pursuant to that (among other things)
certain Credit Agreement dated October 31, 1990 (the "Original
Credit Agreement") and that certain Promissory Note dated
October 31, 1990 in the original principal amount of Eighty
Two Million Dollars ($82,000,000) (the "Original Note").
C. This Credit Agreement constitutes (among other
things) a restatement and amendment of the Original Loan, the
Original Credit Agreement and the Original Note as
contemplated by Section IV.B.1. of the Plan, whereby (among
other things and in addition to certain other Collateral as
set forth below) the Lender shall have, and continue to have,
a security interest in and on all the collateral that as of
the Effective Date secured the Original Loan, with the same
priority as such security interest had.
D. The Lender is not advancing (or agreeing to advance)
new monies to the Borrower or any Affiliate (as defined below)
thereof pursuant hereto or otherwise, subject only to a
possible Re Advance (as defined below).
E. The execution and delivery of this Credit Agreement
and the other New Xxxxxxx Loan Documents (as defined below) by
all the parties hereto and thereto is a condition to the
Effective Date (as defined below), and the New Xxxxxxx Loan
Documents shall not be deemed legally delivered by the Parties
hereto or thereto, or otherwise effective, until and unless
such Effective Date occurs.
AGREEMENT
NOW, THEREFORE, THE PARTIES HERETO AGREE AS FOLLOWS:
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS. The following terms, as used herein, have
the following meanings:
"Acquisition" means the acquisition by Cadiz of all the
outstanding capital stock of Borrower pursuant to the Plan.
"Additional Interest" has the meaning set forth in
Section 2.11(d) hereof.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling, controlled by or
under common control with such Person. As used in this
definition of "AFFILIATE," the term "CONTROL" means the
possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a
Person, whether through ownership of voting securities, by
contract or otherwise.
"After Acquired Property" has the meaning set forth in
Section 2.3(b) hereof.
"Bankruptcy Code" means the provisions of Xxxxx 00,
Xxxxxx Xxxxxx Code, as the same may be amended from time to
time.
"Bankruptcy Court" means the United States Bankruptcy
Court for the Central District of California, wherein the
Chapter 11 Case is pending.
"Bank of Boston" means The First National Bank of Boston,
N.A., located at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
(02110).
"Blythe Ranch" means that certain parcel of real property
located in Riverside County, California, in which the Borrower
holds an ownership interest, more specifically identified in
Schedule 1.1 (Blythe Ranch) hereto, including the equipment
and fixtures therein, thereon or attached thereto and all
Water Rights appurtenant thereto.
"Borrower" means Sun World International, Inc., a
Delaware corporation, as described at the beginning of this
Credit Agreement, and, except where the context otherwise
requires, Old SWI and Old SWII.
"Business Day" means any day on which the Bank of Boston is
open for business.
"Business Plan" means, with respect to the Fiscal Year
ending December 31, 1996, the "1996 Business Plan" approved by
Lender pursuant to Section 5.1(k) hereof, and with respect to
any subsequent Fiscal Year, the final business plan delivered
to Lender pursuant to Section 4.1(a), in each case, as
amended, modified or supplemented from time to time with
Lender's reasonable prior written consent.
"Cadiz" means the Cadiz Land Company, Inc., a publicly
held Delaware corporation (NASDAQ symbol: CLCI), and any
successor, by merger, succession, acquisition of assets or
otherwise.
"Cadiz Lease" means the ranch lease executed by Cadiz,
Cadiz Valley Development Corporation, a California
corporation, Southwest Fruit Growers, L.P., a Delaware Limited
Partnership, and Borrower pursuant to the Cadiz Services
Agreement, as (subject to Section 4.15 hereof) amended,
modified or supplemented from time to time.
"Cadiz Agreement" means that certain agreement, dated as
of the date hereof, executed and delivered by Cadiz for the
benefit of Lender, in such form and substance as the Lender
may (in its sole and absolute discretion) require.
"Cadiz Services Agreement" means the agreement between
Cadiz and Borrower, dated as of the Effective Date, relating
to the provision of certain services to Borrower from Cadiz,
in form and substance satisfactory to Lender (in its sole and
absolute discretion), as (subject to Section 4.15 hereof)
amended, modified or supplemented from time to time.
"Capital Contribution" means a contribution to the equity
of Borrower, either (i) without consideration or (ii) solely
in respect of the issuance of common stock of Borrower.
"Capital Expenditures" means, for any period,
expenditures on capital assets (determined on a Consolidated
Basis) as the same would be characterized in accordance with
GAAP.
"Capital Lease", as applied to any Person, means any
lease of any property (whether real, personal or mixed) by
that Person as lessee that, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that
Person.
"CERCLA" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as heretofore or
hereafter amended or any successor statute.
"CERCLIS" means the Comprehensive Environmental Response
Compensation and Liability and Information System, as
heretofore or hereafter amended or any successor system.
"Change of Control" means the failure of Cadiz, for any
reason at any time (i) to hold, beneficially and (except for
the pledge to Credit Agricole under the New Credit Agricole
Documents until an exercise by Credit Agricole of its voting
or foreclosure rights or remedies thereunder) of record, one
hundred percent (100%) of the issued and outstanding equity
and voting shares of the Borrower (including all voting and
other rights or privileges appurtenant thereto), free and
clear of all Liens, encumbrances, options, rights of first
refusal or other rights of other Persons; or (ii) to be
legally entitled to vote such shares; or (iii) to be entitled
to elect all of the Borrower's Board of Directors or otherwise
to direct or cause the direction of the Borrower's management
and policies.
"Chapter 11 Case" means Case Nos. SB 94 23212 DN and SB
94 23213 DN commenced on October 3, 1994 in the Bankruptcy
Court, being jointly administered.
"Code" means the Internal Revenue Code of 1986, as
heretofore and hereafter amended, or any successor statute.
"Collateral" means all the real property and personal
property identified as collateral or security for the New
Xxxxxxx Loan in the New Xxxxxxx Security Documents, which real
property and personal property shall include (without
limitation): (i) all the real property and personal property
of Old SWII or Old SWI that secured the Original Loan,
including, without limitation, Water Rights, except for (a)
such portions thereof that the Lender may have voluntarily
reconveyed or released from its Lien under the Original Loan
prior to the Effective Date, and (b) that certain parcel of
real property known as Xxxxxxxxx Acres and located in
Riverside County, California, which was previously owned and
conveyed by Old SWI to Xxxxxxxxx Acres, a general partnership,
on or about December 23, 1991;(ii) the Xxxxxxxxx Xxxx Water
Rights; (iii) Blythe Ranch (except the undivided fifty percent
(50%) interest therein to be subject to a Lien in favor of
Zenith as security for the note issued thereto, all pursuant
to the Plan); (iv) the assets of each Debtor (other than
Borrower and Sun Desert, Inc.); (v) the MetLife Personalty;
(vi) the Intellectual Property Collateral; and (vii) After
Acquired Property.
"Commonly Controlled Entity" means an entity, whether or
not incorporated, which is under common control with the
Borrower or any of its Subsidiaries within the meaning of
Section 414(b), (c) or (o) of the Code.
"Computation Date" means the end of each quarter of the
Borrower's Fiscal Year.
"Condition" means, with respect to any Person, the
business, prospects, management, ownership, operations,
properties, assets or condition (financial or otherwise) of
such Person. For the purpose of this definition of Condition,
"prospects" refers to events that, in the foreseeable future,
will have, or can reasonably be expected to have, a material
effect on the other factors included in this definition of
Condition.
"Confirmation Order" means the order of the Bankruptcy
Court as entered on the docket in the Chapter 11 Case
confirming the Plan under Section 1129 of the Bankruptcy Code.
"Consolidated Basis" means that the assets, liabilities
and equities of the Borrower and its Subsidiaries shall be
deemed to be one for accounting purposes, and all intercompany
items shall be eliminated in accordance with GAAP.
"Control Event" means (i) the execution by Cadiz, the
Borrower or any of its Subsidiaries or Affiliates of any
agreement or letter of intent with respect to any proposed
transaction or event or series of transactions or events
which, individually or in the aggregate, may reasonably be
expected to result in a Change of Control, or (ii) the
execution of any written agreement which, when fully performed
by the parties thereto, would result in a Change of Control.
"Credit Agricole" means Caisse Nationale de Credit
Agricole, acting through its Grand Cayman Branch, a banking
corporation organized and existing under the laws of France.
"Credit Agricole Prime Rate" means the floating
commercial lending rate announced by Credit Agricole at its
branch office at Mid Continental Plaza Building, 55 East
Monroe Street, Chicago, Illinois (60603) as its "prime rate",
as in effect from time to time, it being understood that the
Credit Agricole Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged
to any customer, and that Credit Agricole may make commercial
loans or other loans at rates of interest at, above or below
the Credit Agricole Prime Rate.
"Crop Development Plan" means, with respect to the Fiscal
Year ending December 31, 1996, the crop development plan
delivered to Lender in accordance with Section 5.1(k), and
with respect to any subsequent Fiscal Year, the crop
development plan delivered to Lender pursuant to Section
4.1(a)(ii), in the form approved by Lender in writing, in each
case, as amended, modified or supplemented from time to time
with Lender's prior written consent; provided that in any case
each crop development plan shall contain the information
specified in Schedule 1.1 (Crop Development Plan Data) hereto
and any such other information as Lender may reasonably
require.
"Crop Value" has the meaning set forth in Section 4.24(b)
hereof.
"Current Assets" means on a Consolidated Basis, as of any
date of determination, all assets of Borrower and its
Subsidiaries that are treated as current assets in accordance
with GAAP, excluding, however, from the determination of
current assets, loans or advances to directors, officers,
employees or Affiliates.
"Current Liabilities" means on a Consolidated Basis, as
of any date of determination, all liabilities of Borrower and
its Subsidiaries that are treated as current liabilities in
accordance with GAAP, including, without limitation, (i) all
obligations payable on demand or within one (1) year after the
date on which the determination is made, and (ii) sinking fund
or mandatory redemption payments scheduled to be made within
one (1) year after the date on which the determination is
made, but excluding all such liabilities or obligations that,
pursuant to written agreement, are renewable or extendable at
the option of the debtor to a date more than one (1) year from
the date of the determination.
"Debt" of any Person means, at any date, without
duplication: (i) all obligations of such Person for borrowed
money; (ii) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments and all
securities providing for mandatory payments of money, whether
or not contingent; (iii) all obligations of such Person
pursuant to revolving credit agreements or similar
arrangements; (iv) all obligations of such Person to pay the
deferred purchase price of property or services, except trade
accounts payable (including, trade accounts payable to
professionals) arising in the ordinary course of business
(including, without limitation, in connection with the Chapter
11 Case); (v) all obligations of such Person as lessee under
Capital Leases; (vi) all obligations of such Person to
reimburse or prepay any bank, financial institution or other
Person in respect of amounts paid under a letter of credit,
banker's acceptance or similar instrument, whether drawn or
undrawn; (vii) to the extent not included in clause (iv), all
obligations of such Person to purchase securities (or other
property) which arise out of or in connection with the sale of
the same or substantially similar securities or property;
(viii) recourse or repurchase obligations in connection with
the sale of receivables; (ix) all liabilities of the type
described in any of clauses (i) through (viii) above of others
Guarantied by such Person; and (x) all obligations of such
Person of the character described in clauses (i) through (xii)
above to the extent such Person remains legally liable in
respect thereof notwithstanding such obligation is deemed to
be extinguished under GAAP.
"Debt Service Coverage Ratio" means on a Consolidated
Basis, with respect to any Fiscal Year of Borrower, the ratio
of (i) EBITDA for such fiscal year, to (ii) the sum of
interest expense of Borrower and its Subsidiaries for such
fiscal year, plus scheduled payments of principal on Debt of
Borrower and its Subsidiaries (after giving effect to the
application of prepayments of principal pursuant to this
Agreement and to the New Credit Agricole Credit Agreement) for
the immediately succeeding fiscal year.
"Debtor" means each of the Borrower and each of its
Subsidiaries that are identified in Schedule 1.1 (Debtors)
hereto.
"Debtor Guaranties" has the meaning set forth in Section
2.4 hereof.
"Default" means any condition or event which constitutes
an Event of Default or which, with the giving of notice or
lapse of time or both, would become an Event of Default.
"Default Rate" means the greater of (i) twelve and six
tenths percent (12.6%) per annum, and (ii) the sum of the
Credit Agricole Prime Rate plus four hundred (400) basis
points.
"Deferral Period" has the meaning set forth in Section
2.11(d) hereof.
"Deferred Interest" has the meaning set forth in Section
2.11(d) hereof.
"Dip Facility" means that certain Amended and Restated
Debtor in Possession Credit Agreement dated as of February 28,
1996 among Old SWI, Old SWII and Credit Agricole entered into
pursuant to the Second Order Authorizing Debtors to (1) Incur
Secured Indebtedness and Granting Security Interests and
Priority Pursuant to 11 U.S.C. Section 364 and (2) Use Cash
Collateral Pursuant To 11 U.S.C. Section 363(c)(2) entered by the
Bankruptcy Court on March 13, 1996.
"Disposition" means a sale, lease, hypothecation,
abandonment, assignment, encumbrance or other transfer or
disposition, whether voluntary or involuntary or by operation
of Law, except a return of leased property upon the expiration
or termination of the term of the subject lease.
"Dollars" and the sign "$" mean lawful money of the
United States of America.
"EBITDA" means, on a Consolidated Basis, for any fiscal
period, (i) the total amount of the Borrower's income before
interest and taxes, plus (ii) to the extent deducted in
determining such income, depreciation, amortization, and other
similar non cash charges, plus (iii) to the extent recognized
in determining such income, charges not arising from
operations, minus (iv) to the extent recognized in determining
such income, gains not arising from operations; provided,
however, that EBITDA shall be determined without regard to
minority interests.
"Effective Date" means the date hereof.
"Environmental Law" means any and all Laws (including,
without limitation, CERCLA and RCRA) (i) relating to the
environment or to emissions, discharges, releases or
threatened releases of or exposures to PCBs, pollutants,
contaminants, chemicals or industrial, agricultural, toxic or
hazardous substances, wastes or Hazardous Materials into the
environment, including, without limitation, ambient air,
surface water, ground water or land, or (ii) otherwise
relating to the manufacture, processing, distribution, use,
generation, recycling, release, processing, treatment,
storage, disposal, transport, or handling of such PCBs,
pollutants, contaminants, chemicals or industrial,
agricultural, toxic or hazardous substances, wastes or
Hazardous Materials.
"Equity Infusion" has the meaning set forth in Section
4.25 hereof.
"ERISA" means the Employee Retirement Income Security Act
of 1974, heretofore or hereafter amended, or any successor
statute.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) that, together with Borrower, would be treated
as a single employer under Section 4001 of ERISA.
"ERISA Plan" means any employee benefit plan which is
covered by ERISA and in respect of which any Debtor or a
Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be
deemed to be) an "employer" as defined in Section 3(5) of
ERISA. All references to "ERISA Plan" shall include, without
limitation, any employee benefit plan maintained by any Debtor
or any Commonly Controlled Entity in a jurisdiction outside of
the United States.
"Exception Ranch" means the Pre Identified Asset
identified as the Exception Ranch on the Minimum Release Price
Schedule.
"E & y causes of action" means the claims and causes of
action of Borrower (whether as successor to any Person or
otherwise) against Ernst & Young LLP, its former independent
public accountants, based on any and all theories of liability
which may be available to Borrower, and including all rights
to recover all monetary damages of any kind and amount which
Borrower may be entitled to recover from Ernst & Young LLP, in
connection with any and all professional services rendered by
Ernst & Young LLP, or any of its predecessors to Borrower, any
Borrower Subsidiary or any predecessor of any of the same at
any time, and including all defenses available to Borrower
under the Plan, the Bankruptcy Code or other applicable Law.
"Event of Default" has the meaning set forth in
Section 6.1 hereof.
"Final Order" means an order or judgment of the
Bankruptcy Court, as entered on the docket in the Chapter 11
Case, which has not been reversed, stayed, modified or
amended, and as to which (i) the time to appeal or seek
certiorari has expired and no appeal or petition for
certiorari has been timely filed, or (ii) any appeal that has
been or may be taken or any petition for certiorari that has
been or may be filed has been resolved by the highest court to
which the order or judgment was appealed or from which
certiorari was sought.
"Financing Statements" has the meaning set forth in
Section 2.7 hereof.
"Fiscal Year" means a fiscal year of the Borrower, which
is the twelve (12) month period ending on December 31 of each
calendar year.
"Foreign Grower Policies and Procedures" means the
policies and procedures governing advances to Growers located
outside the United States of America delivered to Lender
pursuant to Section 5.1(x), as from time to time amended with
Lender's prior written consent.
"Foreign Subsidiary" means any Subsidiary of the Borrower
which is not incorporated under the laws of a state of the
United States of America or of the District of Columbia.
"Funded Crop Costs" has the meaning set forth in Section
4.24(b) hereof.
"GAAP" means the generally accepted accounting principles
in the United States of America, as in effect from time to
time, applied on a consistent basis.
"Good Faith Contest" means, with respect to the payment
of taxes, fines, fees, penalties, judgments or any other
claims or liabilities, the satisfaction of each of the
following conditions: (i) the validity or amount thereof is
being diligently and promptly contested in good faith by the
Debtor by appropriate proceedings timely instituted; (ii) the
Debtor has established adequate reserves with respect to the
contested items in accordance with GAAP; (iii) during the
period of such contest, the enforcement of any contested item
is effectively stayed; and (iv) such failure to so pay or
discharge during the period of such contest would not result
in a Material Adverse Event.
"Governmental Body" shall mean any commonwealth,
national, state, territorial, regional, provincial, municipal,
parish or local jurisdiction of any kind (whether within or
outside the United States of America) (including, without
limitation, those of the United States of America, the
Netherlands, the Netherlands Antilles, the Grand Cayman
Islands or France, or any state, district, province, city or
town therein) or any governmental, legislative, executive or
monetary authority or regulatory body, or any subdivision,
agency, commission or authority of any such jurisdiction
(including, without limitation, those pertaining to
agriculture, agricultural marketing, water, environmental
protection, building and safety, land planning and zoning), or
any quasi-governmental or private body exercising any
regulatory authority thereunder, and any Person directly or
indirectly owned by and subject to the control of any of the
foregoing, or any court, arbitrator, grand jury or other
judicial or quasi-judicial tribunal, agency or department.
"Grower" means each Person engaged in the farming of
produce for whom or which Borrower provides marketing
services, whether or not the Borrower also provides
harvesting, hauling and packing services to such Person.
"Guaranty" by any Person means any obligation, contingent
or otherwise, of such Person directly or indirectly
guaranteeing any indebtedness, dividend or other obligation of
any other Person in any manner and, without limiting the
generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person with respect
to the Debt of such other Person.
"Xxxxxxx Cash Payment" means the cash sum of Two Million
Dollars ($2,000,000), which Cadiz is to deliver (whether
directly or through the Borrower) to the Lender on or before
the Effective Date.
"Hazardous Materials" has the meaning set forth in
Section 3.12 hereof.
"Indemnitees" has the meaning set forth in Section 7.3(b)
hereof.
"Intellectual Property Collateral" means the Patents,
Trademarks and Copyrights as defined in the New Xxxxxxx
Security Documents.
"Indemnified Liabilities" has the meaning set forth in
Section 7.3(b) hereof.
"Insurance Summary" has the meaning set forth in Section
4.4(a).
"Interest Rate" means ten and six tenths percent (10.6%)
per annum.
"Interest Coverage Ratio" means on a Consolidated Basis,
with respect to any fiscal period, the ratio of (i) EBITDA for
such fiscal period, to (ii) the sum of interest expense of
Borrower and its Subsidiaries for such fiscal period.
"Investment" means any direct or indirect investment by
any Person in any other Person, whether by means of share or
securities purchase, capital contribution, Capital
Contribution, loan, advance, time deposit, acquisition of
substantially all of the assets or business of such other
Person by purchase, merger, consolidation or other form of
acquisition of the operating assets or business of such other
Person, or otherwise.
"Joint Venture" means any special purpose corporation,
partnership (whether a general, limited or limited liability
partnership), limited liability company, trust, estate or
other entity created by (i) Borrower or any of its
Subsidiaries, and (ii) any Person or Persons other than
Borrower or any of its Subsidiaries, in order to conduct a
common business enterprise with such Person or Persons.
"Laws" means all applicable statutes, laws (federal,
state, local, foreign, common or otherwise), ordinances,
regulations, rules, codes, orders, judgments, permits,
licenses, certificates, orders, directives, requests for
information, notices, writs, injunctions, decrees or like
action of any Governmental Body, including, without
limitation, any of the foregoing pertaining to Hazardous
Materials, agriculture, water, land use or zoning, equal
employment opportunities, product labeling, food products,
food handling or marketing, or public health and safety.
"Lender" means Xxxx Xxxxxxx Mutual Life Insurance
Company, a Massachusetts mutual life insurance company, as
lender, and its successors and assigns.
"Lien" means, with respect to any asset (including,
without limitation, any real or personal property), any
mortgage, lien (statutory or other), pledge, charge, security
interest, claim, Capital Lease, sublease of a Capital Lease,
deed of trust, option, right of first refusal, easement,
servitude, transfer restriction (including in the case of
securities, under any shareholder voting trust agreements or
similar arrangements) or encumbrance, other similar
restriction, or other similar limitation in respect of such
asset whether or not recorded. For the purposes of this
Credit Agreement, any Debtor shall be deemed to own subject to
a Lien any asset which 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
relating to such asset.
"Long Term Debt" means on a Consolidated Basis, as of any
date of determination, all Debt of Borrower and its
Subsidiaries which is payable more than one (1) year after the
date on which the determination is being made and which is
shown on the balance sheet as a liability in accordance with
GAAP. Any obligation shall be treated as Long Term Debt if it
is renewable, pursuant to written agreement, at the option of
the debtor, under the terms thereof or of a revolving credit
agreement, to a date more than one (1) year after the date of
the determination.
"Make Whole Amount" has the meaning set forth in
Schedule 1.1 (Make Whole) hereto.
"Mandatory Prepayment" has the meaning set forth in
Section 2.12 hereof.
"Xxxxxxxxx Xxxx Water Rights" means the Water Rights,
whether in nature real or personal property, that Cadiz may
have previously acquired or may hereafter acquire pursuant to
that certain Agreement by and between the Marguleas Family
Partnership, a California general partnership and Cadiz, which
Water Rights (to the extent previously acquired) have been,
and (to the extent hereafter acquired) shall be, contributed
by Cadiz to the Borrower, which Water Rights specifically
include (without limitation) certain contract rights to use
waters of the Kaweah River and any claim, right, benefit or
cause of action (and any proceeds therefrom in settlement or
otherwise) arising out of or in connection with such contract
rights.
"Marketing Agreement" means each written agreement
between Borrower (whether as successor to any Person or
otherwise) and a Grower pursuant to which Borrower agrees to
purchase produce from such Grower for resale or to market such
Grower's produce on consignment or otherwise, whether or not
such agreement contemplates that Borrower shall provide
harvesting, hauling or packing services to such Grower and
whether or not such agreement provides that Borrower shall
have an interest in such produce.
"Material Adverse Event" means any fact, event,
occurrence, condition or circumstance that has the effect of
imposing a material liability on the Lender, or that
materially and adversely affects, or could reasonably be
expected to materially and adversely affect, any of the
following: (a) the Condition of the Borrower individually;
(b) the Condition of the Borrower and its Subsidiaries taken
as a whole; (c) the Condition or market value of any
Collateral which (prior to such fact, event, occurrence,
condition or circumstance) had (or could reasonably be
expected to have) an aggregate appraised fair market value of
Two Hundred and Fifty Thousand Dollars ($250,000) or more; (d)
the validity or the priority (as contemplated herein) of the
Lender's Lien and security interest in any Collateral with an
aggregate fair market value exceeding Two Hundred and Fifty
Thousand Dollars ($250,000) or the validity or enforceability
of any material provision of the New Xxxxxxx Loan Documents;
(e) the ability of any Debtor to perform its obligations under
the New Xxxxxxx Loan Documents; (f) the material rights and
remedies of the Lender under the New Xxxxxxx Loan Documents;
or (g) any business or other license, permit or other
authorization that is issued by a Governmental Body and that
is material to the continued ability of any Debtor to operate
its business in an efficient or profitable manner consistent
with Section 4.6 hereof, including, without limitation, those
required under PACA, or those required under the California
Food and Agriculture Code to operate as a "Producer Dealer" or
a "Processor".
"Maturity Date" means September 13, 2006.
"Maximum Rate" has the meaning set forth in Section
2.11(c) hereof.
"Merger" means the merger referenced at the beginning of
this Credit Agreement of Old SWII and Old SWI, pursuant to
which Old SWI is the surviving corporation and is the renamed
Sun World International, Inc. provided for under the Plan and
the Borrower hereunder.
"MetLife Personalty" means the personal property which
has been or will be purchased by the Borrower, Old SWI or Old
SWII from MetLife Capital as part of the settlement of its
claim in the Chapter 11 Case and which would have been subject
to, or would have contained or given rise to, a Lien of the
Lender thereon pursuant to the Original Credit Agreement had
such personal property been acquired prior to the Effective
Date, including, without limitation, the personal property
identified in Schedule 1.1 ("MetLife Personalty"), except that
identified therein as "Equipment which will be Sold."
"Minimum Release Price" means, with respect to any Pre
Identified Asset, the Dollar amount specified therefor on the
Minimum Release Price Schedule.
"Minimum Release Price Schedule" means the schedule
relating to Blythe Ranch and to the Minimum Release Prices
agreed to by Borrower, Lender and Credit Agricole on or before
the Effective Date pursuant to the Agreement Re Minimum
Release Price Schedule dated as of the Effective Date,
identifying (among other things) the Pre Identified Assets and
classifying certain of them as Tier A Pre Identified Assets or
Tier B Pre Identified Assets, listing the applicable Minimum
Release Price for each such Pre Identified Asset and setting
forth, for illustrative purposes only, the aggregate
adjustment to the Minimum Cash Balance (as defined in the New
Credit Agricole Credit Agreement, but subject to the
limitation set forth in the proviso therein) that would result
from the sale of such Pre Identified Asset in its entirety,
based on the circumstances existing as of June 30, 1996.
"Multiemployer Plan" means a Plan described in Section
4001(a)(3) of ERISA that covers employees of Borrower or any
ERISA Affiliate.
"Net Income" means, with respect to any period,
Borrower's net income for such period, determined on a
Consolidated Basis in accordance with GAAP.
"Net Sales Proceeds" means the cash amount equal to the
difference between (a) the gross consideration for any sale of
any Pre Identified Asset, minus (b) all bona fide third party
out of pocket costs or expenses paid or incurred by the
Borrower or any other Debtor selling the Pre Identified Asset,
as the case may be, through the consummation of (and directly
in connection with) such Disposition, such as reasonable
attorneys' fees, escrow costs and fees, title and insurance
premiums, brokerage or finder's fees, filing and recordation
fees, and transfer taxes, but excluding any delinquent or pro
rated non-delinquent real estate taxes or assessments and any
expenditures (paid by any Debtor through the Disposition
escrow) necessary to cause the subject Collateral to comply
with any Law.
"New Credit Agricole Credit Agreement" means that certain
Amended and Restated Credit Agreement, dated as of a date no
later than the Effective Date, between the Borrower and Credit
Agricole relating to the New Credit Agricole Note.
"New Credit Agricole Deed of Trust" means, collectively,
the deeds of trust executed by the Borrower in favor of Credit
Agricole to secure indebtedness under the New Credit Agricole
Note and which cover the real property identified on schedules
or exhibits to each such deed of trust.
"New Credit Agricole Loan Documents" means, collectively,
the New Credit Agricole Credit Agreement, the New Credit
Agricole Deed of Trust, the New Credit Agricole Note, and such
other documentation as may be required to be executed and
delivered pursuant to the New Credit Agricole Credit
Agreement, including, without limitation, the Cadiz Agreement
dated as of the Effective Date by and between Cadiz and Credit
Agricole.
"New Credit Agricole Note" means the promissory note
executed by the Borrower in favor of Credit Agricole to
evidence the Borrower's indebtedness under the New Credit
Agricole Credit Agreement.
"New Credit Agricole Obligations" means the obligations
of Borrower or any of its Subsidiaries to Credit Agricole
under the New Credit Agricole Credit Agreement or the other
New Credit Agricole Loan Documents.
"New Xxxxxxx Loan" has the meaning set forth in Section
2.3 hereof.
"New Xxxxxxx Loan Documents" means this Credit Agreement,
the New Xxxxxxx Note, the Debtor Guaranties, the New Xxxxxxx
Security Documents, any releases of the Lender executed by the
Debtors, the Environmental Indemnity, the Agreement Re Minimum
Release Prices dated as of the Effective Date, the Cadiz
Agreement and any other document contemplated hereby or
thereby and executed by any Debtor, except that
notwithstanding anything to the contrary expressed or implied
herein or in any New Xxxxxxx Security Document, the
obligations of any Debtor under the Environmental Indemnity or
of Cadiz under the Cadiz Agreement are not intended to be, and
shall not be, secured by any New Xxxxxxx Security Document or
the Collateral. Any reference to any New Xxxxxxx Loan
Document shall be deemed a reference to such document as
amended, supplemented or modified from time to time.
"New Xxxxxxx Note" has the meaning set forth in Section
2.2 hereof.
"New Xxxxxxx Security Documents" has the meaning set
forth in Section 2.3 hereof.
"New Intercreditor Agreement" means the Amended and
Restated Intercreditor and Subordination Agreement referred to
in Section 2.10(d) hereof.
"Officer's Certificate" means a certificate of any
Debtor, as the case may be, executed by a Responsible Officer;
provided, however, that every Officer's Certificate with
respect to the compliance with a condition precedent to the
consummation of the transactions contemplated hereby as of the
Effective Date shall include a statement that: (i) the
officer or officers making or giving such Officer's
Certificate have read such condition and any definitions or
other provisions contained in this Credit Agreement relating
thereto; (ii) in the opinion of the signers, they have made or
have caused to be made such examination or investigation, if
any, as is necessary in the sole reasonable judgment of the
signers to enable them to express an informed opinion as to
whether or not such condition has been complied with; and
(iii) in the opinion of the signers, such condition has been
complied with.
"Old SWI" means the pre Merger Sun World, Inc., a
Delaware corporation, as described at the beginning of this
Credit Agreement.
"Old SWII" means the pre Merger Sun World International,
Inc., a Delaware corporation, as described at the beginning of
this Credit Agreement.
"OSHA" means the Occupational Health and Safety Act and
the rules and regulations thereunder, as heretofore or
hereafter amended, or any successor statute.
"PACA" means the federal Perishable Agricultural
Commodities Act (7 U.S.C. Section 499a et seq.), as heretofore or
hereafter amended, or any successor statute.
"Party" has the meaning set forth in the Recitals hereto.
"Patents, Trademarks and Copyrights" means all present
and future patents (both U.S. and worldwide), trademarks,
tradenames, copyrights and other tangible or intangible
intellectual property of the Borrower and/or any other Debtor,
including, without limitation, (i) any of the same that
secured the Original Loan to the extent still existing, as
listed in Schedule 3.16 hereto, (ii) all copyrights, rights in
copyrights, and works subject to copyright protection, and all
renewals and extensions thereof throughout the world in
perpetuity, the right (but not the obligation) to register
claims under copyrights, the right (but not the obligation) to
renew and extend such copyrights, and the right (but not the
obligation) to xxx in the name of the Borrower or otherwise
for past, present and future infringement of copyright;
including in each case, without limitation, (A) all of the
Borrower's or any other Debtor's right, title and interest, if
any, in and to the copyrights or rights or interests in
copyrights registered or recorded in the United States
Copyright Office or in any copyright office in any foreign
country, (B) all of the Borrower's or any other Debtor's
right, title and interest in and to copyrights of all works
covered by such copyrights, if any, including, without
limitation, copyrights or rights or interests in copyrights
registered or recorded in the United States Copyright Office
or in any copyright office in any foreign country, (C) all of
the Borrower's or any other Debtor's right, title and
interest, if any, in and to all copyrights in musical
compositions and mechanical copyrights, (D) all of the
Borrower's or any other Debtor's right, title and interest, if
any, to all renewals and extensions of any such copyrights
that may be secured under the law now or hereafter in force
and effect in the United States or in any other country or
countries and (E) all of the Borrower's or any other Debtor's
right title and interest, if any, to make and exploit all
derivative works based on or adapted from all works covered by
the copyrights referred to herein; (iii) plant and other
patent applications and plant and other patents and plant
variety protection certificates and applications for plant
variety protection certificates under any Law, and including
all proceeds thereof (such as, by way of example and not by
way of limitation, license royalties and proceeds of
infringement suits), the right (but not the obligation) to
register claims under any such patent or patent application
law or regulation and to renew and extend any such patents and
patent applications, the right (but not the obligation) to xxx
for past, present and future infringements in the name of the
Borrower or otherwise, all rights (but not the obligations)
corresponding thereto throughout the world and all re issues,
divisions, continuations, renewals, extension and
continuations in part thereof; and (iv) service marks,
designs, logos, indicia, trade names, corporate names, company
names, business names, fictitious business names, trade styles
and/or other source and/or identifiers and applications
pertaining thereto, and the goodwill associated therewith,
including, without limitation, (A) all of the trademarks which
are presently or in the future may be owned or used by the
Borrower or any other Debtor in conducting its business and
including all federal, state and foreign registrations
therefor, heretofore or hereafter granted, (B) all proceeds
thereof (such as, by way of example and not by way of
limitation, license royalties and proceeds of infringement
suits), (C) the right (but not the obligation) to register
claims under any Law and to renew and extend trademarks and
registrations, and (D) the right (but not the obligation) to
xxx or bring opposition or cancellation proceedings in the
name of the Borrower or otherwise for past, present and future
infringements of the trademarks or registrations and all
rights (but not obligations) corresponding thereto throughout
the world.
"Payments" has the meaning set forth in Section 2.10
hereof.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to ERISA or any entity succeeding to any
or all of its functions under ERISA.
"PCBs" means polychlorinated biphenyls.
"Permanent Crop Capital Expenditures" means the Capital
Expenditures on, for or with respect to that portion of the
Collateral consisting of permanent crops (including, without
limitation, the planting and replanting of permanent crops,
trellises and irrigation systems), but excluding any
expenditures for routine cultivation, maintenance or repairs,
removals (other than removals that are part of, and
substantially contemporaneous with, replanting) or research
and development costs.
"Permitted Investments" means, as at any date of
determination, (i) marketable securities issued or directly
and unconditionally guaranteed by the United States Government
or issued by any agency thereof and backed by the full faith
and credit of the United States, in each case maturing within
one (1) year from the date of such acquisition; (ii)
marketable direct obligations issued by any state of the
United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing
within one (1) year from the date of such acquisition, and at
the time of acquisition thereof, having the highest rating
obtainable from both Standard & Poor's Corporation and Xxxxx'x
Investors Service, Inc.; (iii) commercial paper maturing no
more than one (1) year from the date of such acquisition and,
at the time of acquisition thereof, having a rating of at
least A 1 from Standard & Poor's Corporation and at least P 1
from Xxxxx'x Investors Service, Inc.; (iv) certificates of
deposit, Eurodollar time deposits, overnight bank deposits,
bankers' acceptances, repurchase agreements or reverse
repurchase agreements issued by any bank or trust company
having a combined capital and surplus of at least One Billion
Dollars ($1,000,000,000) and with a long term rated debt
having a rating of at least A 1 from Standard and Poor's
Corporation and at least P 1 from Xxxxx'x Investors Services,
Inc.; (v) advances to employees, officers or agents of a
Debtor for travel, relocation and other reasonable and
ordinary business expenses in an aggregate amount from time to
time outstanding not to exceed Fifty Thousand Dollars
($50,000.00); (vi) Investments existing as of the Effective
Date and listed on Schedule 1.1 (Permitted Investments); (vii)
the performance, by the employees of Borrower, in a prudent
manner consistent with standard industry practices, of
harvest, haul and pack services for any Grower pursuant to a
Marketing Agreement permitting Borrower to deduct its charges
for such services before remitting to such Grower such
Grower's share of the proceeds of sale of produce subject to
such Marketing Agreement; and (viii) Investments (excluding
advances of seed to Growers from excess inventory to the
extent that the aggregate fair market value of such seed so
advanced in any Fiscal Year exceeds Five Hundred Thousand
Dollars ($500,000)) consisting of working capital "grower
advances" not more than two hundred forty (240) days
outstanding, in accordance with standard industry practice
("Grower Advances"), (A)(I) either to Growers located in the
United States, that at the time of their entry into Marketing
Agreements are not, and have not previously been, Affiliates
of Borrower or any Debtor, provided that such Grower Advances
are secured by a perfected security interest of first priority
in those crops, or (II) to Growers located in Mexico, Chile or
South Africa made substantially in accordance with Foreign
Grower Policies and Procedures; (B) solely pursuant to
Marketing Agreements that permit Borrower to deduct all
amounts owed to it before remitting to such Growers their
respective shares of the proceeds of sale of crops marketed
pursuant to such Marketing Agreements; and (C) provided that
such advances are used by the Growers to finance their
respective working capital needs directly relating to the
crops subject to such Marketing Agreements.
"Permitted Liens" means the following encumbrances and
claims against any Debtor on the assets against which such
Lien has arisen: (i) Liens (other than a Lien imposed by
ERISA) for taxes or assessments or other governmental charges
or levies, either not yet due and payable or not paid to the
extent that nonpayment thereof is expressly permitted by the
terms of this Credit Agreement; (ii) workers', mechanics',
suppliers', carriers', landlords', warehousemen's, PACA or
other similar liens arising in the ordinary course of business
and securing obligations that are either (a) not more than
sixty (60) days past the date such obligation first became due
and payable, or (b) are the subject of a Good Faith Contest;
(iii) the Liens in favor of the Lender hereunder with respect
to the Collateral; (iv) Liens of record disclosed in the title
assurances described in Section 5.1(g) hereof; (v) Liens
arising from UCC financing statements regarding leases
expressly permitted by this Credit Agreement; (vi) the Liens
securing the New Credit Agricole Obligations; (vii) the Lien
on an undivided one half (1/2) interest in Blythe Ranch
granted to Zenith pursuant to the Plan; and (viii) such other
Liens as may be disclosed in Schedule 1.1 (Permitted Liens),
or as from time to time may be approved in writing by the
Lender acting in its sole discretion; provided, that none of
the foregoing Liens shall be pari passu with, or senior to,
the security interest and Lien on the Collateral in favor of
the Lender, except as expressly provided otherwise in Section
2.3(c) hereof. Nothwithstanding anything to the contrary
expressed or implied herein, the Liens securing the New Credit
Agricole Obligations shall not exceed the principal amount
stated in the New Credit Agricole Note as of the Effective
Date, as reduced from time to time by any payments of
principal made thereon, plus the following: (I) an increase,
on a single occasion, in the amount of Two Million Dollars
($2,000,000) arising from Credit Agricole's making of the Re
Advance (as defined in the New Credit Agricole Credit
Agreement), (II) accrued and unpaid interest on such principal
or such Re Advance (including, when applicable under the New
Credit Agricole Loan Documents, interest at the Default Rate
provided for therein) and (III) other costs, expenses and fees
and other amounts that, under the New Credit Agricole Loan
Documents are (A) payable by any Debtor (as defined in the New
Credit Agricole Credit Agreement ("Credit Agricole Debtor"))
and (B) secured by the liens arising under the New Credit
Agricole Loan Documents ("Credit Agricole Liens"), including,
but not limited to: (w) any late charges or prepayment
premiums, (x) any and all amounts advanced by Credit Agricole
for the protection or preservation of property subject to the
Credit Agricole Liens, including, but not limited to, payment
of real property taxes and assessments, insurance premiums,
attorneys' fees, fees for receivers, consultants' fees, and
all other fees, costs or expenses incurred or expended by
Credit Agricole in connection with the enforcement of any
rights, remedies or options it may have under the Credit
Agricole Loan Documents; (y) any environmental damages due
under any secured environmental indemnity agreement; and (z)
any damages, claims, actions or causes of action that Credit
Agricole may have against the Credit Agricole Debtors.
"Person" means an individual natural person, a
corporation, a partnership, an association, a trust or any
other entity or organization, including, without limitation, a
Governmental Body.
"Personal Property Security" means all items of personal
property that are part of the Collateral described in the New
Xxxxxxx Security Documents, which items shall include, without
limitation, those that are located on or included in or
appurtenant to and used in the operation of the other
Collateral, but do not include the Specified Credit Agricole
Collateral (as such term is defined in the deeds of trust
delivered to the Lender pursuant hereto).
"Plan" has the meaning set forth in the Recitals hereto.
"Plan Implementation Agreement" means the agreement
contemplated by the Plan whereby Cadiz shall (i) purchase all
the common stock and preferred stock of Old SWII and any
common stock of the Borrower, and (ii) otherwise take the
actions required of Cadiz to implement the Plan.
"Pre Identified Assets" means any asset listed on the
Minimum Release Price Schedule, except Blythe Ranch (if the
same is listed thereon).
"Prepayment Amount" has the meaning set forth in Section
2.12(a) hereof.
"Prepayment Commitment Notice" has the meaning set forth
in Section 2.12(a) hereof.
"Principal Amount" means Ninety One Million Eighty Three
Thousand Eight Hundred Fifty Three Dollars and Ninety Five
Cents ($91,083,853.95).
"Principal Payment Date" has the meaning set forth in
Section 2.13 hereof.
"Prohibited Transaction" means any transaction set forth
in Section 406 of ERISA or Section 4975 of the Code.
"Proposed Prepayment Date" has the meaning set forth in
Section 4.27(c) hereof.
"Qualification" means, with respect to any certificate
covering financial statements, a qualification to such
certificate (such as a "subject to" or "except for" statement
therein) (i) resulting from a limitation on the scope of
examination of such financial statements or the underlying
data, or (ii) which could be eliminated by changes in
financial statements or notes thereto covered by such
certificate (such as by the creation of or increase in a
reserve or a decrease in the carrying value of assets) and
which if so eliminated by the making of any such change and
after giving effect thereto would occasion a Default or Event
of Default; provided that, without limitation, none of the
following shall constitute a Qualification: (a) a consistency
exception relating to a change in accounting principles with
which the independent public accountants for the Person whose
financial statements are being certified have concurred, or
(b) a qualification relating to the outcome or resolution of
threatened litigation, pending litigation subject to a Good
Faith Contest, pending or threatened claims or other
contingencies, the impact of which litigation, claims or
contingencies cannot be determined with sufficient certainty
to permit quantification in such financial statements.
"RCRA" means the Resource Conservation and Recovery Act
of 1976 as may be amended from time to time, or any successor
statute thereto.
"Re Advance" has the meaning set forth in Section 2.1(b)
hereof.
"Release" has the meaning set forth in Section 3.12
hereof.
"Reportable Event" means any of the events set forth in
Section 4043 of ERISA.
"Responsible Officer" shall mean each of the Chairman,
the President, Chief Executive Officer, Chief Operating
Officer, the Controller, the Treasurer, the Chief Financial
Officer, any Vice President or the General Counsel of a
Person.
"Restricted Payment" means, with respect to any Debtor or
Subsidiary thereof: (i) any dividend or other distribution,
whether direct or indirect, on, or payment of cash or other
property in respect of, any shares of its capital stock
(except dividends payable by a Debtor to the Borrower); (ii)
any payment on account of the purchase, redemption, retirement
or acquisition of (A) any shares of its capital stock, (B) any
option, warrant or other right to acquire shares of its
capital stock or subordinated Debt issued by any such Debtor
or Subsidiary thereof or (C) any subordinated Debt issued by
any Debtor or Subsidiary thereof (including, without
limitation, any payment, prepayment, defeasance, redemption,
purchase pursuant to tender offer or other acquisition or
retirement for value prior to or at its scheduled maturity);
(iii) any prepayment or advance payment of any amount in
respect of any Debt, except prepayments to Lender, or payments
to Zenith of net proceeds from a sale of Blythe Ranch, or
payments to Credit Agricole expressly permitted in Section
4.26 hereof; (iv) any Investment in, or Guaranty on behalf of,
directly or indirectly, any Foreign Subsidiary; (v) any
payment to any officer, director or employee of any such
Debtor or Subsidiary that constitutes a "bonus" (except for
payments to Xxxxx Xxxxxxxxx pursuant to the express terms of
the Cadiz Services Agreement and for payments to officers or
employees that are required to be paid under an employment
agreement or a bonus compensation plan duly adopted by the
Borrower's board of directors); (vi) any fees or other
compensation to a Person (other than Cadiz pursuant to the
Cadiz Services Agreement, or a natural person who is a full
time officer or employee, or a director of the Borrower) for
performing or providing senior executive management services
to the Borrower; (vii) any payments to Cadiz in respect of
management services provided under the Cadiz Services
Agreement exceeding Three Hundred Seventy Five Thousand
Dollars ($375,000) per calendar quarter; (viii)
notwithstanding (vi) or (vii) above, any payments to Cadiz
(except for distributions of a Re Advance received from Lender
or Credit Agricole) whatsoever or any Cadiz Subsidiary not a
Subsidiary of Borrower, under the Cadiz Services Agreement,
the Tax Sharing Agreement, the Cadiz Lease or otherwise, at
any time during (A) the period commencing on the first (1st)
day of the Deferral Period and ending on the date on which all
interest accrued in respect of the New Xxxxxxx Loan during the
Deferral Period has been paid in full or (B) the continuance
of any Default or Event of Default; (ix) any payment in
respect of any Class 6 Claim or Class 8 Claim except (A) from
the funds transferred to the Unsecured Claims Disbursement
Account from the Unsecured Claims Reserve Account, as a
Capital Contribution by Cadiz to Borrower, and (B) following
compliance with Section 4.1(u); (x) any payment of any expense
of resolving any Disputed Claim (as defined in the Plan); (xi)
any issuance of securities other than common stock (except
preferred stock which will be issued by the Borrower upon
completion of the Merger and cancelled on the Effective Date,
or acquired by Cadiz and cancelled promptly thereafter); or
(xii) any payment to any Grower in the nature of a "rendering
up" payment if the aggregate of all such payments to all
Growers during the previous twelve (12) month period exceeds
One Hundred and Fifty Thousand Dollars ($150,000).
"Short Term Spot Market Water Sales" means a sale or
exchange or other transfer by the Borrower, in compliance with
all Laws, for cash or other consideration pursuant to an arm's
length written contract or written understanding, of legal
rights to use Excess Water (as hereinafter defined) for a
period (the "Contract Period") (after giving effect to any and
all options, extensions, renewals or similar rights held by
the buyer under such contract or understanding) not to exceed
twelve (12) calendar months; provided that (i) the Borrower
shall not enter into, or otherwise become legally obligated or
bound under, any such contract or understanding prior to a
date that is more than fifteen (15) days prior to the
commencement of the buyer's rights to use Excess Water under
such contract or understanding; (ii) such contract or
understanding shall include written provisions substantively
identical to those set forth in Schedule 1.1 (Short Term Water
Sales) hereto; and (iii) any contract or understanding not
satisfying (i) or (ii) above shall automatically be null and
void and of no force and effect. As used herein, "Excess
Water" means that volume of water (after giving effect to all
other existing or proposed Short Term Spot Market Water Sales)
that (a) Borrower is entitled to own, use or consume pursuant
to any Law, permit, contract, lease, deed or otherwise, and
(b) will not be needed for the ensuing Contract Period to
maintain, farm, cultivate, use or otherwise operate a given
parcel or parcels of real property or the aggregate of all
parcels located within a given water district in accordance
with the requirements of this Credit Agreement (including,
without limitation, Sections 4.3 and 4.6 hereof), or to
satisfy any other lawful commitment or obligation of Borrower
or any of its Subsidiaries.
"Subsidiary" means, as to any Person, (i) a corporation
of which shares of stock having ordinary voting power (other
than stock having such power only by reason of the happening
of a contingency) to elect a majority of the board of
directors or other managers of such corporation are at the
time owned, or the management of which is otherwise
controlled, directly or indirectly, through one or more
intermediaries, or both, by such Person and/or by one or more
Subsidiaries of such Person, (ii) a partnership a majority of
the equity interests in which is owned, or the management of
which is otherwise controlled, directly or indirectly, through
one or more intermediaries, or both, by such Person or by any
one or more Subsidiaries of such Person, (iii) as to Borrower
and Sun Desert, Coachella Growers; and (iv) as to Borrower,
Sun World (Europe) B.V.
"Subordination Agreement" has the meaning set forth in
Section 2.6 hereof.
"Tangible Assets" means, as of any date of determination,
the assets of Borrower and its Subsidiaries determined on a
Consolidated Basis, in accordance with GAAP; excluding,
however, all assets that would be classified as intangible
assets under GAAP (including, without limitation, goodwill,
patents, trademarks, trade names, copyrights and franchises).
"Tangible Net Worth" means on a Consolidated Basis, as of
any date of determination, for Borrower and its Subsidiaries,
the excess of (i) Tangible Assets over (ii) total liabilities
determined in accordance with GAAP.
"Tax Sharing Agreement" means the agreement between Cadiz
and Borrower, dated as of the Effective Date, relating to the
sharing of certain income tax obligations, in form and
substance acceptable to Lender, as (subject to Section 4.15
hereof) amended, modified or supplemented from time to time.
"Threshold Renewal Premium" has the meaning set forth in
Section 4.32 hereof.
"Tier A Pre Identified Asset" means a Pre Identified
Asset identified as such on the Minimum Release Price
Schedule.
"Tier B Pre Identified Asset" means a Pre Identified
Asset identified as such on the Minimum Release Price
Schedule.
"UCC" means the Uniform Commercial Code in effect from
time to time in the State of California or in any other
applicable state, as heretofore or hereafter amended.
"Unsecured Claims Disbursement Account" means the
"Unsecured Claims Disbursement Account" established and
maintained by Borrower pursuant to the Plan.
"Unsecured Claims Reserve Account" means the "Unsecured
Claims Reserve Account" established and maintained by Cadiz
pursuant to the Plan.
"Water Rights" means, with respect to any Person, all
right, title and interest of such Person in and to all water,
water rights and entitlements, and other rights to water or
water rights of every kind or nature whatsoever, including all
water inventory and rights to use, acquire, appropriate,
exchange or otherwise obtain the benefit of any water, such
as: (i) ground or subsurface water wherever located, whether
or not subject to pumping or other extraction from real
property or from any underground river, aquifer, storage basin
or other source, whether or not subject to removal, use or
extraction pursuant to any easement, license, contract,
servitude, covenant running with any land or other property,
permit, approval, consent, judicial or water authority
decision, by operation of Law or other basis of right,
including pursuant to any water related contract, water
approval, or water reallocation right or otherwise, and
including groundwater or water stored in a groundwater basin
which is made available to Borrower through any water district
or company or similar entity or otherwise; (ii) surface water
from any source, whether based upon any appropriative,
riparian, prescriptive or other right, or water approval,
water related contract or water reallocation right, whether
"preconsolidation" water from the California aqueduct or other
water authority water or subsequent to any such consolidation,
whether based upon any easement, license, contract, servitude,
covenant running with the land or other property, permit,
approval, consent, judicial or water authority decision, by
operation of Law, or other basis of right, including rights
accruing because of the location of any real property within
the boundaries of any water district or other water authority,
ownership of any securities or equity or other interest in any
water company or other water authority or otherwise; and (iii)
any right to acquire or transfer any water or water right, any
water allocation or distribution right, any storage, delivery
or transportation right, or other right, whether or not
appurtenant to any real property, whether based upon any water
related contract or any ownership or other interests in any
real property, any stock securities or other equity or other
interests in any water company or other water authority
(including any water reallocation right), or otherwise. For
purposes of this definition, the term "water" includes water
rights and rights to water or whatever rights to money,
property or other benefits are exchanged or received for or on
account of any water or any conservation or other nonuse of
water, including whatever rights are achieved by depositing
one's share of any water in any water bank or with any water
authority, and any other water reallocation rights.
"Wholly Owned Subsidiary" means any Subsidiary all of the
shares of capital stock of which (except directors' qualifying
shares) are at the time directly or indirectly owned by
another Person.
"Working Capital" means, at any time, the excess of
Current Assets over Current Liabilities.
"Zenith" means Zenith Insurance Company.
"Zenith Intercreditor Agreement" means the Intercreditor
Agreement, dated as of the Effective Date, between Lender and
Zenith, as amended, supplemented or modified from time to
time.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be
interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered
hereunder (including, without limitation, those under Section
4.1 and Section 4.12 hereof) shall be prepared, in accordance
with GAAP, applied on a basis consistent (except for changes
in accordance with Section 4.14 concurred in by the Borrower's
independent public accountants) with the most recent audited
financial statements of the Borrower delivered to the Lender.
SECTION 1.3 Singular and Plural Terms. Defined terms used herein in
the singular shall include the plural and vice versa.
ARTICLE 2
THE NEW XXXXXXX LOAN
SECTION 2.1 POST REORGANIZATION INDEBTEDNESS.
(a) The Borrower represents, warrants and agrees that
upon the Effective Date, the Borrower shall be indebted to the
Lender in the aggregate principal amount of the Principal
Amount, and that such indebtedness shall be subject to no
deductions, withholdings, defenses, counterclaims or rights of
set off of any kind whatsoever.
(b) Provided that, in the case of an event described in
either clause (i) or clause (iii) of Section 3(b) of the Cadiz
Agreement, (i) Cadiz pays in full the Two Million Dollar
($2,000,000) payment that it is required to make to Lender
thereunder; (ii) thereafter, both (A) the New Xxxxxxx Loan and
the New Credit Agricole Obligations are reinstated and (B) not
later than the third (3d) anniversary of the Effective Date,
Lender has received Net Sales Proceeds in an aggregate amount
equal to at least Thirty Million Dollars ($30,000,000), at
least Five Million Dollars ($5,000,000) of which shall have
come from the sale of Tier B Pre Identified Assets; (iii)
there shall not have occurred and then be continuing (or would
exist immediately thereafter) any Default or Event of Default;
and (iv) the conditions precedent set forth in subsection (c)
immediately below are satisfied, Lender shall readvance to
Borrower the sum of Two Million Dollars ($2,000,000) (the "Re
Advance"), and Borrower shall be permitted to distribute such
amount to Cadiz.
(c) Lender's obligation to make the Re Advance shall be
subject to the satisfaction of the following conditions
precedent (the satisfaction of which shall be determined, and
may be waived, by Lender on or prior to the date on which the
Re Advance is funded):
(i) The Lender shall have received a request for the Re
Advance, executed by Borrower, no later than eleven (11:00)
a.m., Boston time, at least four (4) Business Days prior to
the date on which Borrower desires the Re Advance to be
funded, designating the date on which the Re Advance is to be
funded.
(ii) All representations and warranties of Cadiz or
Borrower or any Subsidiary of either Cadiz or Borrower set
forth in the Cadiz Agreement or in any New Xxxxxxx Loan
Document (other than those that speak as of a specific date)
shall be true and correct in all material respects as if made
on and as of the date of the Re Advance.
(iii) As of the date of the Re Advance, there shall not
have occurred and then be continuing (or would exist
immediately after the Re Advance is made and the proceeds
thereof are used by Borrower) any Default or Event of Default.
(iv) Borrower shall have provided to Lender, at
Borrower's sole cost and expense, such endorsements as Lender
may reasonably request, dated as of the date of the Re
Advance, in form and substance satisfactory to Lender, to the
title assurances described in Section 5.1(g) hereto or any
successor assurances thereto insuring the Liens of the
Lender's deeds of trust on the Collateral, including, without
limitation, endorsements insuring Lender that the Liens on
real property Collateral continue to constitute valid Liens
upon the real property Collateral covered thereby in the full
amount of the outstanding principal of the New Xxxxxxx Loan
after giving effect to the Re Advance, subject only to such
title exceptions as Lender approved in writing in connection
with the satisfaction of Section 5.1(g) hereof on the
Effective Date.
(v) The Lender's satisfaction that any Re Advance that
Credit Agricole is obligated to make under the New Credit
Agricole Credit Agreement has been funded, or will be funded
concurrently with the Lender's Re Advance.
On the date on which the Re Advance is funded, Borrower shall
be deemed to have represented and warranted to Lender that
each of the conditions precedent to the funding of the Re
Advance not waived in writing by Lender has been satisfied.
SECTION 2.2 NEW XXXXXXX NOTE. The Borrower's obligation
to repay the Principal Amount shall be evidenced by a
promissory note (the "New Xxxxxxx Note") of the Borrower,
which New Xxxxxxx Note shall be for the Principal Amount, be
dated the Effective Date, bear interest at the Interest Rate
or the Default Rate (as the case may be) from the Effective
Date, be payable in the amounts and on the dates, and contain
the other terms and provisions set forth herein and in the
form of promissory note attached to this Credit Agreement as
Exhibit "A."
SECTION 2.3 NEW XXXXXXX LOAN SECURITY AND PRIORITY
THEREOF.
(a) The obligations owed to the Lender under this Credit
Agreement and the New Xxxxxxx Note and the loan contemplated
in and by such documents (collectively, the "New Xxxxxxx
Loan") shall be secured by perfected security interests and
Liens on all the Collateral with the priority set forth in
subsection (c) below. Such security interests and Liens shall
be established, evidenced and perfected by such deeds of
trust, security agreements, stock pledges, collateral
assignments, UCC financing statements, notices and other
documents, recordations and filings (collectively, the "New
Xxxxxxx Security Documents") in such form and substance as the
Lender (acting in its sole and absolute discretion) may
require, whether before, on or after the Effective Date.
Without limiting the generality of the foregoing, Borrower
shall cause the Merger documentation filed with the Delaware
Secretary of State to be recorded with (i) the United States
Patent and Trademark Office within sixty (60) days after the
date hereof, (ii) the United States Copyright Office within
fifteen (15) days after the date hereof, and (iii) with the
foreign patent and trademark offices as reasonably necessary
to protect any Debtor's interest in the Intellectual Property
Collateral.
(b) If any Debtor obtains title, whether ownership in
fee or otherwise, to any real property that is presently
leased or any personal property that would have been subject
to, or would have contained or given rise to, a Lien of the
Lender thereon pursuant to the Original Credit Agreement or
the New Xxxxxxx Loan Documents had title been obtained prior
to the Effective Date (collectively, "After Acquired
Property"), and the After Acquired Property is not covered by
the New Xxxxxxx Security Documents, or the Lender's security
interest or Lien upon such After Acquired Properties is not
perfected pursuant to the Laws of the jurisdiction where
perfection is necessary, the Borrower shall immediately notify
the Lender. Regardless of whether the Borrower shall have
given to the Lender notice as aforesaid, at the request of the
Lender, each Debtor having an ownership interest in such After
Acquired Property shall (i) execute and deliver to the Lender
such new agreement, document or filing, or such amended New
Xxxxxxx Security Document granting to the Lender a Lien on any
After Acquired Property that the Lender (acting in its sole
and absolute discretion) may specify, (ii) file a new or
amended financing statement or statements, and (iii) do such
other acts and things and execute and deliver such documents
and instruments as may be necessary or desirable to perfect
the Lender's security interest and Lien (and the priority
thereof required hereby) in and on such After Acquired
Property.
(c) Borrower agrees that notwithstanding anything to the
contrary expressed or implied herein or in any other New
Xxxxxxx Loan Document, the perfected security interests and
Liens of the Lender on the Collateral shall be senior to, and
have a first priority over, all security interests or Liens,
except that the perfected security interests and the Liens of
the Lender (i) as to Patents, Trademarks and Copyrights shall
be in parity to those of Credit Agricole arising under the New
Credit Agricole Documents so that Xxxxxxx and Credit Agricole
shall each hold equal security interests in the Patents,
Trademarks, and Copyrights; (ii) as to Blythe Ranch shall be
immediately junior to those of Credit Agricole arising under
the New Credit Agricole Documents; (iii) as to all real
property Collateral shall be junior to such security interests
and Liens as may be specifically disclosed as exceptions to
the seniority of the Lender's Liens in the title insurance and
title assurances described in Section 5.1(g) hereof and
approved by the Lender pursuant thereto; (iv) as to the
MetLife Personalty shall be junior to those of MetLife Capital
arising pursuant to MetLife Capital's financing of the
purchase thereof by Borrower, Old SWI or Old SWII; and (v)
Liens described in subclauses (i) or (ii) of "Permitted Liens"
in Section 1.1 and given priority equal or prior to those of
the Lender by operation of Law, provided that Borrower hereby
represents and warrants that no such Liens shall exist on the
Effective Date other than those (if any) not yet due and
payable.
SECTION 2.4 GUARANTIES. As a condition and inducement
for the New Xxxxxxx Loan, the Debtors or the successors
thereto (other than the Borrower) shall absolutely and
unconditionally guarantee, and assume the liability of the
Borrower for, the payment of all principal and interest due
under the New Xxxxxxx Note and the performance of each and
every monetary or non monetary obligation of the Borrower
under each of the New Xxxxxxx Loan Documents. Such Guaranties
(collectively, the "Debtor Guaranties") shall be in form and
substance completely satisfactory to the Lender (acting in its
sole and absolute discretion). In addition, the Guaranty of
Sun Desert, Inc., as the successor to Sun Desert, Inc., debtor
in possession in the Chapter 11 Case, shall be secured by a
first priority security interest and Lien on the property that
as of December 13, 1994 secured the Guaranty of such debtor in
possession pursuant to the Original Loan; the other Debtor
Guaranties shall be secured by a first priority Lien on the
assets of the Debtor guarantors thereunder except that Credit
Agricole may hold an equal security interest in the Patents,
Trademarks and Copyrights of the Debtor guarantors); and all
such first priority security interests and Liens shall be
established and perfected by such deeds of trust and other
security documents as the Lender (acting in its sole and
absolute discretion) may require, whether before, on or after
the Effective Date.
SECTION 2.5 ENVIRONMENTAL INDEMNITY AGREEMENT. In
addition to the Borrower's obligations elsewhere hereunder,
the Debtors shall make certain representations as to
environmental matters pertaining to the Collateral, and shall
indemnify the Lender, pursuant to an Environmental Indemnity
Agreement completely satisfactory to the Lender (acting in its
sole and absolute discretion). Notwithstanding anything to
the contrary express or implied herein, such Environmental
Indemnity Agreement shall be an unsecured obligation of each
obligor thereunder.
SECTION 2.6 SUBORDINATION AGREEMENT. Subject to (and
not in derogation of) Section 4.8 hereof, the Borrower agrees
that any existing or future Lien or charge securing any Debt
upon the Collateral shall at all times be and remain
subordinate and junior in priority to the Lender's first
priority security interests and Liens on the Collateral
(except as expressly provided to the contrary in Section
2.3(c) hereof); and to ensure that any such Lien or charge
shall be so, Borrower shall cause to be executed and delivered
to the Lender such subordination agreements executed by such
Persons (including, without limitation, Credit Agricole) and
in such form and substance as may be completely satisfactory
to Lender (acting in its sole and absolute discretion), such
subordination agreements (individually, and collectively, the
"Subordination Agreement") to be executed, acknowledged,
delivered and recorded (a) by the Effective Date with respect
to Liens existing on the Effective Date, and (b) promptly
after the Lender's demand therefor with respect to Liens
arising thereafter.
Section 2.7 FINANCING STATEMENTS. The Borrower agrees
that the security interest and Lien in any Collateral which
may constitute personal property or fixtures shall be
perfected by the Debtors' filing or recordation of such UCC 1
and UCC 2 financing statements (the "Financing Statements") as
the Lender may from time to time reasonably require.
SECTION 2.8 [Intentionally reserved]
SECTION 2.9 CLOSING. The Parties shall take the steps
necessary to consummate the transactions contemplated hereby
at or prior to the Effective Date, but the consummation of the
transactions contemplated hereby shall in any event be deemed
to have occurred and be effective on (and to be subject to)
the Effective Date; provided that no such consummation shall
occur unless all the conditions set forth in Article 5 hereto
have been fulfilled, or waived in writing by the Lender.
SECTION 2.10 PAYMENTS.
(a) All payments to be made to the Lender under (or
pursuant to) this Credit Agreement, the New Xxxxxxx Note or
any other New Xxxxxxx Loan Document, including, without
limitation, all interest, principal, prepayments, late
charges, costs, fees, expenses or otherwise (collectively,
"Payments") shall be made in Dollars, via wire transfer of
immediately available funds, without presentment, demand,
protest, notice, deduction, defense, withholding, set off or
counterclaim, and absolutely free and clear and net of any
Liens, charges, taxes or other amounts withheld, in the manner
and to the account and containing the information set forth in
Schedule 2.10 hereto, or to such other place or account as the
Lender may hereafter direct the Borrower in writing, by not
later than one (1) p.m. (Boston time) on the date on which
such Payment is due (each such Payment made after such time on
such due date shall be deemed to have been made on the next
succeeding Business Day).
(b) If the due date of any Payment would otherwise fall
on a day that is not a Business Day, such date shall be
extended to the next succeeding Business Day, and interest
shall accrue and be payable for any Payment so extended for
the period of such extension.
(c) Except as expressly provided otherwise herein,
provided that no Default or Event of Default shall have
occurred and be continuing, all payments shall be applied
first to the payment of fees, costs and expenses then due and
payable for which demand has been made to Borrower, second to
the payment of interest then due and payable, and third to the
payment of principal.
(d) Borrower acknowledges that, under the terms of the
Amended and Restated Intercreditor Agreement between Lender
and Credit Agricole dated the Effective Date, Lender may be
required to turn over to Credit Agricole certain amounts
debited by, or otherwise paid to, Lender in respect to
Borrower's obligations under the New Xxxxxxx Loan Documents,
and agrees that, in any such event, Borrower's obligation to
pay to Lender the amount so turned over to Credit Agricole
shall be reinstated (and interest shall resume accruing
thereon commencing as of the date of such turnover to Credit
Agricole), all as though such amount had never been debited by
or paid to Lender. Lender shall give notice to Borrower of
the date on which any amount is so turned over to Credit
Agricole and of the amount thereof; provided, however, that
Lender's failure to give such notice shall not limit or
otherwise affect the obligation of Borrower hereunder with
respect to such turnover.
SECTION 2.11 INTEREST.
(a) Interest on the unpaid principal balance due on the
New Xxxxxxx Note shall be payable monthly in arrears on the
first (1st) calendar day of each calendar month beginning with
the first (1st) such calendar day occurring after the
Effective Date, and shall accrue at the Interest Rate;
provided, however, that (i) certain scheduled interest
payments shall be deferred subject to, and in accordance with,
subsection (d) below; (ii) any Payment in respect of the New
Xxxxxxx Loan not paid when due, whether of principal, interest
or any other amount and whether on a scheduled payment date,
at stated maturity, by acceleration or otherwise, shall
thereafter bear interest (after as well as before judgment,
and during the pendency of any bankruptcy proceedings),
payable upon demand, at the Default Rate, and (iii) whenever a
Default or Event of Default has occurred and is continuing,
the entire outstanding principal amount of the New Xxxxxxx
Loan shall bear interest (after as well as before judgment,
and during the pendency of any bankruptcy proceedings) at the
Default Rate. The accrual of interest at the Default Rate
shall not excuse any default in payment. The Default Rate
shall change from time to time automatically and without
notice, effective as of the effective date of each change in
the Credit Agricole Prime Rate.
(b) All interest due hereunder (whether accruing at the
Interest Rate, the Default Rate or otherwise) shall be
computed on the basis of a year consisting of twelve (12)
thirty day months, except that for any interest period that is
less than thirty (30) days, interest shall be computed on the
basis of a year of three hundred sixty (360) days and the
actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable.
(c) In no event shall interest charged under any New
Xxxxxxx Loan Document, however such interest may be
characterized or computed, exceed the highest rate permissible
under any California or United States Law which a California
state or a United States Federal court of competent
jurisdiction applying California or United States Law shall,
in a final determination, deem applicable to this Credit
Agreement (the "Maximum Rate"). In the event that any such
court determines that the rate of interest charged hereunder
exceeded the Maximum Rate during any period or periods, the
rate of interest hereunder for such period or periods shall be
deemed to have been the Maximum Rate, and the rate of interest
hereunder shall be deemed to have continued to be and shall
continue to be the Maximum Rate for such period as is
necessary for the total amount of interest paid or accrued
hereunder to equal the amount of interest that would have been
paid or accrued hereunder had the interest rate hereunder at
all times remained as provided in the preceding subsections of
this Section 2.11. If, notwithstanding the foregoing interest
rate adjustment, any such court determines that the Lender has
received interest in excess of the Maximum Rate, any such
excess shall first, be applied to any unpaid costs and
expenses owed to the Lender under the New Xxxxxxx Loan
Documents and to the unpaid principal amount of the New
Xxxxxxx Loan and second, be refunded to the Borrower.
(d) Provided that (i) no Default or an Event of Default
has occurred and is continuing, and (ii) Borrower does not
make any payment (whether as a dividend, management services
or other fee or otherwise) to Cadiz either in advance with
respect to, or during the period May 1 through October 31 of
any calendar year (the "Deferral Period"), interest (but not
principal) otherwise scheduled to be paid hereunder on the
first (1st) calendar day in May, June, July and August of each
calendar year shall not be payable on such dates, but instead,
such interest shall accrue at the Interest Rate (compounded
monthly) from its otherwise scheduled due date until paid, and
all such deferred scheduled interest (the "Deferred Interest")
plus the interest accrued and compounded thereon ("Additional
Interest") shall be due and payable as follows: (i) one half
(1/2) of the Deferred Interest plus the Additional Interest
accrued through such date, shall be due and payable on
September 1 of each such calendar year, along with the
regularly scheduled interest due and payable on September 1
for the month of August; and (ii) the remaining one half (1/2)
of the Deferred Interest, plus the Additional Interest accrued
through such date, shall be due and payable on October 1,
along with the regularly scheduled interest due and payable on
October 1 for the month of September.
SECTION 2.12 PREPAYMENTS.
(a) The Borrower shall have no right to prepay the
outstanding principal balance due on the New Xxxxxxx Loan,
except (i) for the prepayments of principal that the Borrower
is required to make under Sections 4.24 or 4.27 of this Credit
Agreement (each a "Mandatory Prepayment"), or (ii) as
otherwise set forth expressly in this subsection (a). The
privilege is reserved to the Borrower to prepay voluntarily
the entire unpaid principal balance owed to the Lender, or
from time to time to make partial prepayments of such
principal of not less than (and in increments of) One Hundred
Thousand Dollars ($100,000) in such principal amount as is
specified in the Prepayment Commitment Notice; provided,
however, that (i) any prepayment of principal must be
accompanied by payment of the Make Whole Amount and all
accrued but unpaid interest on such principal prepayment (such
interest and the Make Whole Amount, collectively, along with
the principal amount being prepaid, "the Prepayment Amount");
(ii) Borrower shall have given written notice to the Lender of
the Borrower's commitment to make any such prepayment of
principal ("Prepayment Commitment Notice") on a date specified
therein ("Prepayment Date") not less than fifteen (15) days
prior to such Prepayment Date; and (iii) Borrower shall pay
the Prepayment Amount on the Prepayment Date specified in each
Prepayment Commitment Notice.
(b) Except as set forth in subsection (c) immediately
below, and provided no Default or Event of Default has
occurred and is continuing, all prepayments of principal
(whether voluntary or mandatory) shall be applied against the
principal due on the New Xxxxxxx Loan in inverse order of
maturity; provided, however, that the Borrower shall continue
to make the payments due under the New Xxxxxxx Note as if such
prepayment had not been made.
(c) All Net Sales Proceeds received by Xxxxxxx on or
before the third (3d) anniversary of the Effective Date, or
within six (6) months thereafter if the escrow therefor was
opened in good faith prior to such third (3d) anniversary and
was closed within six (6) months after the opening of such
escrow, pursuant to Section 4.24(b) hereof with respect to
sales of Pre Identified Assets shall be applied against
principal due on the New Xxxxxxx Loan, fifty percent (50%) in
the inverse order of maturity thereof, and fifty percent (50%)
in the order of principal payments as they become due (but
with no change to the original principal amortization
schedule); provided, however, that the foregoing part of this
Section 2.12(c) shall not apply to Net Sales Proceeds
exceeding Thirty Million Dollars ($30,000,000) or to Net Sales
Proceeds from the sale of Tier A Pre Identified Assets
exceeding Twenty Five Million Dollars ($25,000,000), or if any
of the following conditions then exist:
(i) The New Xxxxxxx Loan has been (and continues to be)
accelerated for any reason whatsoever pursuant to Section 6.2
hereof or otherwise;
(ii) A Default or an Event of Default has occurred and
is continuing by reason of the Borrower's failure to pay any
principal or any interest due under the New Xxxxxxx Note, and
the delinquent payment(s) have not been made;
(iii) A Default or an Event of Default has occurred and
is continuing by reason of the Borrower's failure to pay any
other amount due under the New Xxxxxxx Loan Documents within
ten (10) days after written demand from the Lender therefor,
provided that all such other amounts then aggregate at least
Two Hundred Fifty Thousand Dollars ($250,000), and the
delinquent payments have not been made; or
(iv) The occurrence of any of the following and the
continuation thereof:
(A) The receipt by Credit Agricole, and application by
Credit Agricole to the payment of the obligations of the
Borrower under the New Credit Agricole Credit Agreement, of
any dividends, cash, securities, instruments or other property
or distributions under Section 3, or the exercise (whether by
proxy or otherwise) by Credit Agricole of any voting or other
consensual right under Section 4, of that certain Stock Pledge
Agreement dated as of the date hereof given by Cadiz to Credit
Agricole;
(B) The acceleration by Credit Agricole of the
indebtedness due under the New Credit Agricole Loan Documents;
(C) The exercise by Credit Agricole, prior to any such
acceleration, of any right or remedy arising upon or after a
Default under the New Credit Agricole Loan Documents that (i)
results in the Borrower's loss of use or control of any assets
(other than the Cash Account or the cash therein) such that
the Borrower can no longer conduct business substantially in
the ordinary course, or (ii) constitutes a liquidation by
Credit Agricole of any material assets (other than the
Collateral) into cash proceeds for the benefit of Credit
Agricole; or
(D) The exercise by Credit Agricole of any set off or
offset right that Credit Agricole may have under Section 8.9
of the New Credit Agricole Credit Agreement or otherwise.
Notwithstanding anything to the contrary expressed or implied
herein, for purposes of this Section 2.12(c), amounts received
by the Lender from the Disposition of any Pre Identified
Assets shall not be deemed to have cured any Default or Event
of Default, and Borrower shall not assert or contend
otherwise.
(d) If for any reason the Lender has not received on or
prior to the third (3d) anniversary of the Effective Date
pursuant to Section 4.24(b) at least Thirty Million Dollars
($30,000,000) in Net Sales Proceeds from sales of all Pre
Identified Assets (including at least Five Million Dollars
($5,000,000) of Net Sales Proceeds from sales of Tier B Pre Identified
Assets), the Borrower shall cause Cadiz to pay to the Lender on or
before the next Business Day following such third (3d) anniversary the
cash sum of Two Million Dollars ($2,000,000), free and clear of Liens,
and upon receipt thereof, the Lender shall apply such sum against the
Borrower's indebtedness to the Lender in accordance with Section
2.12(b) hereof, and not Section 2.12(c) hereof.
SECTION 2.13 PRINCIPAL AMORTIZATION. Principal payments shall
be made on the Effective Date and thereafter on the first (1st)
calendar day of each January, April and September throughout the term
of the New Xxxxxxx Loan (singly, a "Principal Payment Date") in the
amounts specified in Schedule 2.13 hereto. Prepayments of principal
shall be credited against amounts due hereunder in accordance with the
terms of this Credit Agreement, but the amortization schedule set forth
in Schedule 2.13 shall not be recalculated by reason of any principal
prepayments of any kind (whether mandatory or voluntary).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents and warrants to the Lender (as
of the Effective Date and as of each subsequent date as of which
Borrower is required to make, or is deemed to have made, such
representation and warranty, as a condition or otherwise, and
including, without limitation, the date of any Re Advance) that:
SECTION 3.1 CORPORATE EXISTENCE AND POWER. Each of the Debtors
and their respective Subsidiaries (if any) (except for Sun Harvest,
Inc. and Pacific Farm Service, Inc., neither of which holds any
material assets or currently engages in any business whatsoever) (a) is
duly incorporated (if a corporation), validly existing and in good
standing under the laws of its jurisdiction of incorporation or
formation, and is in compliance with its partnership agreement or
corporate charter and by laws (as the case may be); (b) is duly
qualified as a foreign corporation or partnership, licensed and in good
standing in each jurisdiction where qualification or licensing is
required by the nature of its business or the character and location of
its property, business or customers, and where the failure to qualify
would constitute a Material Adverse Event; and (c) has the corporate or
partnership power and authority and all governmental licenses,
authorizations, consents and approvals and the legal right necessary or
advisable to own, pledge, mortgage or otherwise encumber and operate
its properties, to lease the property it operates under lease and to
conduct its business as now, heretofore and proposed to be conducted.
Sun World (Europe) B.V. has no significant assets and is inactive;
Borrower, acting alone or together with one or more of its
subsidiaries, has no authority to cause the direction of Sun World
(Europe) B.V.'s management.
SECTION 3.2 CORPORATE AND GOVERNMENTAL AUTHORIZATION: NO
CONTRAVENTION. The execution and delivery of the New Xxxxxxx Loan
Documents by each signatory thereto and the performance by such
signatory of its obligations hereunder and thereunder: (a) are within
the corporate or partnership power of such signatory; (b) have been
authorized by the Bankruptcy Court (except for such signatory that are
not debtors in the Chapter 11 Case); (c) have been duly authorized by
all necessary corporate or partnership action; (d) require no action
by, or in respect of, or registration or filing with, or consent,
approval or exemption action or confirmation from, any Governmental
Body; (e) will not contravene, or conflict with, or constitute (with or
without the giving of notice or lapse of time or both) a default or
breach under, or result in a termination event or an acceleration of
any obligation arising, existing or created by or under, or result in
the creation or imposition or material modification of (or obligation
to create or impose) any Lien (other than the Lien created hereby in
favor of the Lender) on any of the assets or properties of such
signatory under any provision of (i) any applicable Law, (ii) such
signatory partnership agreement or corporate charter and by laws (as
the case may be), (iii) any agreement or instrument evidencing or
governing Debt for borrowed money of such signatory, or (iv) any
material agreement or other material instrument binding upon such
signatory, and (f) do not require any approval of stockholders or other
equity holders or any approval or consent of any Person under any
contractual obligation of such signatory.
SECTION 3.3 BINDING EFFECT. The New Xxxxxxx Loan Documents
constitute valid and binding agreements of each signatory thereto
(other than Lender), enforceable against such signatory in accordance
with their respective terms, except to the extent that such
enforceability may be limited by applicable bankruptcy, insolvency, and
other similar laws affecting creditors' rights generally, or otherwise
limited by general principles of equity.
SECTION 3.4 LITIGATION. There is no action, suit or proceeding
that (a) is pending against, or to the knowledge of any Responsible
Officer of the Borrower threatened against, any Debtor or any
Subsidiary thereof before any Governmental Body, except for the matters
disclosed in Schedule 3.4 hereof, none of which matters would result,
if determined adversely to any Debtor, in a Material Adverse Event, or
(b) in any manner questions the validity or enforceability of, or
impedes the timely consummation of, any New Xxxxxxx Loan Document or
the priority of Lender's Lien on the Collateral as contemplated herein.
SECTION 3.5 COMPLIANCE WITH ERISA. Borrower, and each
Subsidiary of Borrower, is in compliance in all material respects with
all applicable provisions of ERISA. Neither a Reportable Event nor a
Prohibited Transaction has occurred and is continuing with respect to
any ERISA Plan; no notice of intent to terminate an ERISA Plan has been
filed, nor has any ERISA Plan been terminated, except as disclosed in
Schedule 3.5 hereto; no circumstances exist which constitute grounds
under Section 4042 of ERISA entitling the PBGC to institute proceedings
to terminate, or appoint a trustee to administrate, an ERISA Plan, nor
has the PBGC instituted any such proceedings; neither Borrower, nor any
ERISA Affiliate, nor any Person that was previously treated as a single
employer with any Borrower or any Subsidiary of Borrower under Section
4001 or ERISA, has completely or partially withdrawn under Sections
4201 or 4204 of ERISA from a Multiemployer Plan; Borrower, each ERISA
Affiliate and any Person that was previously treated as a single
employer with any Borrower or any Subsidiary of Borrower under Section
4001 or ERISA, has met its minimum funding requirements under ERISA
with respect to all of its ERISA Plans and the present value of all
vested benefits under each such ERISA Plan exceeds the fair market
value of all ERISA Plan assets allocable to such benefits, as
determined on the most recent valuation data of the ERISA Plan and in
accordance with the provisions of ERISA for calculating the potential
liability of Borrower or any ERISA Affiliate or any Person that was
previously treated as a single employer with Borrower or any Borrower
Subsidiary under Section 4001 of ERISA, to the PBGC or the ERISA Plan
under Title IV of ERISA; and neither Borrower nor any ERISA Affiliate
nor any Person that was previously treated as a single employer with
Borrower or any Borrower Subsidiary under Section 4001 of ERISA, has
incurred any liability to the PBGC under ERISA.
SECTION 3.6 TAXES. All federal, state, local, foreign and
other tax returns, reports and statements required to be filed by the
Debtors and their Subsidiaries have been filed with appropriate
Governmental Bodies in all jurisdictions in which such returns,
reports and statements are required to be filed, and all taxes and
other impositions, shown as due and payable, have been timely paid
prior to the date on which any fine, penalty, interest, late charge or
loss may be added thereto for nonpayment thereof. No Debtor or
Subsidiary thereof has given, or has been requested to give, a waiver
of the statute of limitations relating to the payment of federal,
state, local, foreign and other taxes or other impositions. Proper
and accurate amounts have been withheld by the Debtors and from their
employees for all periods to comply in all material respects with the
tax, social security and unemployment withholding provisions of
applicable Law. Timely payments of sales and use taxes required by
applicable Law have been made by the Debtors. Proper and accurate
federal and state returns have been filed by the Debtors and their
Subsidiaries for all periods for which returns were due with respect
to employee income tax withholding, social security and unemployment
taxes, and the amounts shown thereon to be due and payable have been
paid in full or adequate provision therefor is included on the books
of the Debtors and their Subsidiaries. The foregoing representations
are subject to the facts disclosed in Schedule 3.6 hereto.
SECTION 3.7 COMPLIANCE WITH LAWS. Each Debtor and each
Subsidiary thereof is in compliance with all Laws (including, without
limitation, PACA, the California Food and Agriculture Code,
Environmental Laws and OSHA) applicable to it and/or to any of the
Collateral, except for such Laws (if any) the violation of which,
individually or in the aggregate, would not constitute a Material
Adverse Event.
SECTION 3.8 INVESTMENT COMPANY ACT; CERTAIN REGULATIONS. No
Debtor and no Subsidiary thereof is (a) an "investment company", or a
company "controlled" by an "investment company," within the meaning of
the Investment Company Act of 1940, as amended, or (b) engaged
principally, or as one of its principal activities, in the business of
extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System or any interpretations or
rulings thereunder).
SECTION 3.9 POSSESSION OF FRANCHISES, LICENSES, ETC. Each
Debtor and Subsidiary thereof either owns or otherwise possesses all
(and is not in violation of any) franchises, Patents, Trademarks and
Copyrights, service marks, trade names, copyrights, leases, licenses,
Water Rights or other rights and governmental permits, certificates,
consents and approvals that are necessary for the ownership and
operation of its respective properties and businesses in accordance
with Section 4.6 hereof, except for those the absence of which,
individually or in the aggregate, would not constitute a Material
Adverse Event.
SECTION 3.10 FULL DISCLOSURE. Neither the information set
forth in the Plan, nor the New Xxxxxxx Loan Documents nor any report
or financial projection referred to herein, nor any certificate,
report or other statement delivered to the Lender by or on behalf of
the Borrower or Cadiz in connection with the negotiation of the New
Xxxxxxx Loan Documents or the transactions contemplated hereby or
thereby, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained
herein or therein not misleading. There is no fact known to the
Borrower that has not been disclosed to the Lender in writing that (a)
materially adversely affects or could adversely affect the business,
earnings, prospects, properties or condition (financial or other) of
the Borrower or Cadiz, or (b) adversely affects or could adversely
affect the ability of any Debtor or Cadiz to perform its obligations
under the New Xxxxxxx Loan Documents, or (c) constitutes a Material
Adverse Event. Each written projection heretofore delivered to
Lender, and each other written projection delivered hereafter to
Lender, by or on behalf of Borrower, Cadiz, Old SWII or Old SWI in
connection with the transactions contemplated by this Agreement, upon
delivery to Lender, will be prepared on the basis of the assumptions
set forth therein, such assumptions are (or will be, as the case may
be) reasonable in light of the financial condition and prospects of
the Person to which such projections; and each projection heretofore
delivered to Lender represented, and each such projection hereafter
delivered to Lender will represent, the good faith opinion of the
Chief Executive Officer and the Chief Financial Officer of Borrower,
Cadiz or Old SWII (as the case may be), at the time of delivery
thereof to Lender, as to the course of business of the Person to which
such projections relate during the period covered thereby.
SECTION 3.11 LABOR DISPUTES AND ACTS OF GOD. Neither the
business, nor the real property nor the personal property of any
Debtor or any Subsidiary thereof is currently affected by any fire,
explosion, accident, strike, lockout, work stoppage, slowdown or other
labor dispute, drought, storm, hail, earthquake, embargo, act of God
or of the public enemy, or other casualty (whether or not covered by
insurance) which would, individually or in the aggregate, constitute a
Material Adverse Event. Except as disclosed in Schedule 3.11 hereto,
no Debtor is a party to any collective bargaining or other agreement
with any labor union, and no employee of the Debtors (including
temporary and seasonal employees) are represented by any union nor is
there any organizing petition or effort known to the Borrower to
represent such employees or any of them.
SECTION 3.12 ENVIRONMENTAL MATTERS.
(a) Except for the matters disclosed in items 7, 8 and 9 of
Schedule 3.12 hereto, none of which matters constitutes or will
constitute a Material Adverse Event, no notice, notification, demand,
request for information, directive, citation, summons or order has
been issued, no complaint has been filed, no allegations have been
made, no penalty has been assessed and no investigation or review is
pending or threatened by any Governmental Body or other Person with
respect (i) to any alleged or actual failure by a Debtor or any
Subsidiary thereof to comply with any Environmental Law or to have any
permit, certificate, license, approval, registration or authorization
required in connection with the conduct of its business or with any
environmental investigation, remediation and clean up, or (ii) to any
handling, use, manufacture, presence, processing, distribution,
generation, treatment, storage, recycling, transportation, disposal or
release, as that term is defined in 42 U.S.C. Sectin 9601(22) or in other
Environmental Laws ("Release"), of, or exposure to, any hazardous,
carcinogenic or toxic material, substance or waste (including, without
limitation, PCBs, gasses, pesticides or any components thereof,
asbestos, pollutants, contaminants and petroleum products or any
fractions thereof) regulated or defined under any Environmental Law
("Hazardous Materials"), by or caused by Debtor or any Subsidiary
thereof.
(b) Except for the matters disclosed in Schedule 3.12 hereof,
none of which matters constitutes or will constitute a Material
Adverse Event, no Debtor or Subsidiary thereof has used, handled,
treated, stored, processed, generated or disposed of any Hazardous
Material at, on or about any property or facility now or previously
owned or leased by such Debtor or Subsidiary, which use, handling,
treatment, storage, processing, generation or disposal has resulted in
the release of a Hazardous Material;
(c) Except for the matters disclosed in items 6, 7, 8, 9 and 10
of Schedule 3.12 hereto, none of which matters constitutes or will
constitute a Material Adverse Event, no Hazardous Material is or has
been present at any property or facility now or previously owned or
leased by any Debtor or Subsidiary thereof in violation of any
Environmental Law;
(d) Except for the matters disclosed in Schedule 3.12 hereof,
none of which matters constitutes or will constitute a Material
Adverse Event, there are no underground storage tanks for Hazardous
Materials, active or abandoned, and there are no PCB's, transformers,
capacitors, ballasts, asbestos, asbestos containing materials,
formaldehyde containing materials or radon gas at any property now or
previously owned or leased by any Debtor or Subsidiary thereof;
(e) Except for the matters disclosed in items 6, 7, 8, 9 and 10
of Schedule 3.12, none of which matters constitutes or will constitute
a Material Adverse Event, no Hazardous Materials have been released
at, on or about any property now or previously owned or leased by any
Debtor or Subsidiary thereof and no condition at or activity on any
such property has or will create a nuisance or other tortious
condition;
(f) No Debtor or any Subsidiary thereof has transported or
arranged for the transportation of any Hazardous Material to any
location which is listed or proposed for listing under CERCLA, on
CERCLIS, on the National Priority List, or on any similar state list
or which is the subject of federal, state or local or third party
investigation or enforcement actions which may lead to claims against
such Debtor or Subsidiary for clean up costs, remedial work, damages
to natural resources or for personal injury or property damage claims,
including, but not limited to, claims under CERCLA;
(g) Except for the matters disclosed in items 6, 7, 8, 9 and 10
of Schedule 3.12, none of which matters constitutes or will constitute
a Material Adverse Event, no Hazardous Material has been used,
processed, handled, recycled, treated, stored, disposed of, or
transported to or from, or released by any Debtor or Subsidiary
thereof at any location in violation of any Environmental Law, or that
could lead to future liability under any Environmental Law;
(h) No oral or written notification of a Release of a Hazardous
Material has been filed by or on behalf of any Debtor or Subsidiary
thereof except for the matters disclosed in items 6, 7, 8, 9 and 10 of
Schedule 3.12, none of which matters constitutes or will constitute a
Material Adverse Event, and no property now or previously owned or
leased by any Debtor or Subsidiary thereof is listed on the National
Priority List promulgated pursuant to CERCLA, on CERCLIS or on any
similar state list of sites requiring investigation or clean up or
that are currently being investigated;
(i) Each Debtor and its Subsidiaries have obtained all
environmental permits, licenses and other authorizations necessary in
conjunction with operations at the real property or properties owned
or leased or previously owned or leased by such Debtor or Subsidiary;
(j) There are no Liens arising under Environmental Laws on any
of the real property or properties owned or leased, or previously
owned or leased, by any Debtor or Subsidiary thereof, and no
government actions have been taken or, to the knowledge of the
Responsible Officers of the Borrower, are in process which could
subject any of such properties to such Liens;
(k) No Debtor or Subsidiary thereof has been required by any
Environmental Law to place any notice or restriction relating to the
presence of Hazardous Material at any property owned or leased, or
previously owned or leased, by it, or on any deed to such property or
with the county or municipality in which such property is located;
(l) There have been no investigations, studies, audits, tests,
reviews or other analyses in connection with any Environmental Law or
Hazardous Material or environmental matter or business operation
conducted by or which are in the possession of any Debtor or
Subsidiary thereof or any third party relating to any property or
facility now or previously owned or leased by any Debtor or Subsidiary
thereof, that disclose facts or circumstances relating to this Section
3.12 and which have not been made available to the Lender;
(m) The Borrower has disclosed to the Lender in writing the
nature and amount of all actual or projected Capital Expenditures
necessary to be in compliance with any and all Environmental Laws
which affect the Debtors or any Subsidiary thereof.
SECTION 3.13 BROKERS' FEES. Any brokerage commission or
finder's fees payable in connection with this Credit Agreement or the
transactions contemplated hereby shall be payable by Cadiz, and not in
any event by the Lender. No Debtor or Subsidiary thereof has incurred
any obligation for such a brokerage commission or a finder's fee.
SECTION 3.14 CAPITALIZATION OF BORROWER. Except for
outstanding preferred stock that will be cancelled immediately after
the Effective Date, and for authorized but unissued preferred stock,
the authorized capital stock of the Borrower consists of 300,000
shares of common stock, par value $0.01 per share, of which 42,000
shares are issued and outstanding. All such outstanding shares of
such common stock were duly authorized and validly issued, are fully
paid and non assessable, and are owned of record and beneficially by
Cadiz. There are no outstanding Liens, encumbrances, subscriptions,
options, warrants, calls, rights (including preemptive rights) or
other agreements or commitments of any nature relating to any capital
stock of the Borrower, except for the pledge of Borrower's common
stock to Credit Agricole pursuant to the New Credit Agricole Loan
Documents. The Borrower is not subject to any obligation (contingent
or otherwise) to repurchase or otherwise acquire or retire any shares
of its capital stock.
SECTION 3.15 SUBSIDIARIES AND OWNERSHIP OF STOCK. A true and
correct list of all Subsidiaries of each Debtor is attached hereto as
Schedule 3.15, indicating, for each such Subsidiary (a) its true
corporate or partnership name, and (b) its jurisdiction of
organization, (c) the name of each record holder of all or any portion
of its outstanding capital stock or other outstanding equity interests
and the percentage of such capital stock or equity interest held by
each such record holder, (d) whether such Subsidiary is active or
inactive, and (e) whether or not it holds assets having a fair market
value in excess of Five Hundred Thousand Dollars ($500,000). All of
the outstanding capital stock of each such Subsidiary is validly
issued, fully paid and nonassessable, and is free and clear of all
Liens, except for Liens in favor of Lender and for the Liens in favor
of Credit Agricole pursuant to the New Credit Agricole Loan Documents.
SECTION 3.16 PROPERTIES AND ASSETS. Each of Borrower and each
Subsidiary thereof has good and valid title to, or valid leasehold
interests in, all of its assets and properties. Except for (a) as of
the Effective Date, the nonstandard exceptions to the title assurances
received by the Lender pursuant to Section 5.1(g) hereof and for the
Lien of the Credit Agricole Loan Documents, and (b) thereafter
Permitted Liens, there are no Liens on any Collateral. Without
limiting the generality of the foregoing, the Debtors own, free and
clear of all Liens (other than Permitted Liens) overlying groundwater
rights and other Water Rights to receive water on the real property
Collateral that are appurtenant to such real property Collateral.
Each Debtor has the right to, and does, enjoy peaceful and undisturbed
possession under all leases under which it is leasing property. All
such leases are valid, subsisting and in full force and effect, and
none of such leases is in default. Schedule 3.16 sets forth, with
respect to Borrower and each Subsidiary of Borrower, as of the date of
this Agreement, a complete and correct list of (a) each Patent and
Trademark; (b) all tradenames under which such Person currently
conducts, or has within the last five (5) years conducted, business;
(c) the addresses of all locations at which such Person conducts any
portion of its business; (d) all real property owned or leased by such
Person (as lessor or lessee) and indicating on which parcels such
Person grows, or intends to grow, crops and the Borrower's Ranch
number therefor; (e) all Investments of such Person, and (f) all
insurance policies under which such Person is either a loss payee or
an additional insured. Borrower has heretofore delivered to Lender a
schedule of all Marketing Agreements to which any such Person is a
party as of the date of this Agreement, including, with respect to
each such Marketing Agreement, the names of the parties thereto, the
crops and number of acres to which it applies, the term and payment
terms thereof, the date by which such Marketing Agreement must be
renewed or replaced by a new Marketing Agreement with the Grower party
thereto with respect to the next succeeding crop cycle, and the
percentage of the total units of produce projected to be sold by
Borrower under Marketing Agreements during the fiscal year ending
December 31, 1996 represented by such Marketing Agreement. Borrower's
chief executive office and chief place of business is located at the
address for notices set forth in Section 7.1 hereof.
SECTION 3.17 PRESERVATION OF LENDER RIGHTS. The satisfaction
(or the waiver by the Lender) of the condition set forth in Section
5.1(l) hereof shall not in any way impede, limit, impair or diminish
(or constitute a waiver of, or forbearance with respect to) any
Debtor's obligations or the Lender's rights and remedies under any New
Xxxxxxx Loan Document, or otherwise estop in any way the Lender from
exercising or enforcing such obligations, rights, and remedies, even
if (for example) any Debtor's future compliance with (or performance
of) such Debtor's obligations under (a) any New Xxxxxxx Loan Document
may result in (or otherwise cause or lead to) a default under any new
Credit Agricole Loan Document, or (b) any New Credit Agricole Loan
Document may result in (or otherwise cause or lead to) a default under
any New Xxxxxxx Loan Document. Notwithstanding anything to the
contrary expressed or implied herein, this Section 3.17 shall be
deemed renewed and remade continuously at and as of each date after
the Effective Date.
SECTION 3.18 NO SIDE AGREEMENTS. There are no agreements,
understandings, or arrangements of any kind, oral or written, between,
among, or binding upon any of Cadiz, Borrower, any of Borrower's
Subsidiaries, or any Affiliate of any such Person, on the one hand,
and Credit Agricole, Zenith, LSL Biotechnologies, Inc., The Irvine
Company, Xxxxxx X. Xxxxxxxxx, any other former shareholder of Old
SWII, the entities whose consent is required in Section 5.1(t) hereof,
Bank of Scotland, any past or present member of the Unsecured
Creditors' Committee, or any Affiliate of any such Person, on the
other hand, which have not been fully disclosed by Borrower to Lender
(including by delivery of copies of all relevant writings) or are not
a matter of public record.
ARTICLE 4
COVENANTS
The Borrower agrees that, from and including the Effective
Date and for so long thereafter as any amount owed hereunder or under
the New Xxxxxxx Loan remains unpaid:
SECTION 4.1 INFORMATION. The Borrower shall deliver or cause
to be delivered to the Lender:
(a) No later than December 1 of each year, (i) a final Business
Plan for the Fiscal Year ending December 31 of the following calendar
year, (A)(I) based on the then current Business Plan, revised to take
into account anticipated asset Dispositions, abandonments, new
plantings and other known changes, (II) including any then available
operating budgets for such succeeding Fiscal Year, (III) reflecting
estimated maximum expenditures during such succeeding Fiscal Year in
respect of Grower Advances, land leases and long term contracts for
the purchase of packaging materials, chemicals and other supplies,
based on then current contract negotiations, and (IV) explaining in
reasonable detail all variances from the then current Business Plan,
and (B) certified by the Chief Financial Officer of Borrower as having
been (I) approved by Borrower's Board of Directors in final form, (II)
prepared on the basis of reasonable assumptions and (III) representing
the good faith opinion of the Chief Executive Officer and the Chief
Financial Officer of Borrower, at the time of delivery thereof to
Lender, as to the course of business of Borrower during the period
covered thereby; and (ii) a final crop development plan for the Fiscal
Year ending December 31 of the following calendar year, in form and
substance reasonably satisfactory to Lender, based on the then current
Crop Development Plan, (A) revised to take into account asset sales,
abandonments, new plantings and other known changes, and (B)
explaining in reasonable detail all variances from the then current
Crop Development Plan;
(b) On June 1 and September 15 of each year commencing 1997, a
reforecast of Borrower's projected results for the Fiscal Year ending
December 31 of such year, including a comparison to the projections
included in the then current Business Plan;
(c) As soon as reasonably practicable but in any event within
one hundred and nine (109) days after the end of each Fiscal Year,
consolidated balance sheets in reasonable detail of the Borrower and
its Subsidiaries as of the end of such Fiscal Year and the related
consolidated statements of operations, of cash flows and of
stockholders' equity for such Fiscal Year, setting forth, in each
case, in comparative form the figures for the previous Fiscal Year,
all in reasonable detail and audited (for Fiscal Years 1997 and
thereafter without Qualification) on by a firm of independent public
accountants of nationally recognized standing selected by the Borrower
and reasonably approved by the Lender;
(d) As soon as reasonably practicable but in any event within
one hundred and nine (109) days after the end of each Fiscal Year, a
consolidating balance sheet in reasonable detail of the Borrower and
its Subsidiaries as of the end of such Fiscal Year and the related
consolidating statement of operations for such Fiscal Year, all
certified by the Chief Financial Officer of the Borrower as having
been used in connection with the preparation of the financial
statements referred to in paragraph (a) of this Section 4.1, and all
in reasonable detail and audited (for Fiscal Years 1997 and
thereafter without Qualification) on by a firm of independent public
accountants of nationally recognized standing selected by the Borrower
and reasonably approved by the Lender;
(e) [RESERVED]
(f) (i) With respect to each of the fiscal months of Borrower
ending on or before the first (1st) anniversary of the Effective Date
(other than the last fiscal month of Borrower's Fiscal Year): (A) as
soon as available and in any event within thirty (30) days after the
end of each such month, monthly and year to date financial statements,
prepared in a manner consistent with those delivered by the Debtors
during the year immediately preceding the Effective Date, (B) as soon
as available and in any event within sixty (60) days after the end of
each month, monthly and year to date financial statements, (I)
prepared in accordance with GAAP as applied in the preparation of the
balance sheets referred to in Section 5.1(p) hereof (subject to normal
year end adjustments) and so certified by Borrower's Chief Financial
Officer, and (II) prepared in accordance with GAAP, and so certified
by Borrower's Chief Financial Officer; and (ii) with respect to each
of Borrower's fiscal months ending after the first (1st) anniversary
of the Effective Date (other than the last fiscal month of a Fiscal
Year), as soon as available and in any event within thirty (30) days
after the end of each such month monthly and year to date financial
statements, prepared in accordance with GAAP and so certified by
Borrower's Chief Financial Officer; all such financial statements,
whether delivered pursuant to clause (i) or clause (ii) of this
subsection (f) shall include profit and loss statements and a balance
sheet of Borrower and its Subsidiaries, on a Consolidated Basis, as of
the end of such month, together with a comparison and reconciliation
of Borrower's actual performance for such month to the then current
Business Plan;
(g) Simultaneously with the delivery of each set of financial
statements referred to in paragraphs (c) or (d) of this Section 4.1,
an Officer's Certificate (i) setting forth in reasonable detail such
calculations as are required to establish whether the Borrower was in
compliance with the requirements of Section 4.12 on the date or for
the period, as the case may be, of such financial statements, (ii)
stating whether on the date of such certificate any Default or Event
of Default had occurred and, if so whether such Default or Event of
Default was continuing, setting forth the details thereof and the
action that the Borrower is taking or proposes to take with respect
thereto, (iii) stating whether, to the knowledge of such Responsible
Officer, since the date of the most recent previous delivery of
financial statements pursuant to paragraphs (c) or (d) of this
Section 4.1, there has been any Material Adverse Event.
(h) Simultaneously with the delivery of each set of financial
statements referred to in paragraph (c) of this Section 4.1, a
statement of the firm of independent public accountants that reported
on such statements (i) stating that their audit examination has
included a review of the terms of this Credit Agreement and the New
Xxxxxxx Note as they relate to financial or accounting matters; (ii)
stating whether anything has come to their attention to cause them to
believe that on the date of such statements any Default or Event of
Default had occurred and was continuing and (iii) confirming the
calculations set forth in the Officer's Certificate delivered
simultaneously therewith pursuant to subsection (g) of this Section
4.1; provided, however, that this Section 4.1(h) will not require any
such statement by such firm of independent public accountants to be
furnished or delivered to the extent nationally recognized firms of
independent public accountants are not then providing such statements
in the ordinary course of their business on behalf of their clients
which have borrowed money pursuant to loan or credit agreements;
(i) Forthwith upon (but no later than two (2) Business Days
after) any Responsible Officer of the Borrower confirming the
occurrence of any of the following, an Officer's Certificate of the
Borrower setting forth the details thereof and the action that the
Borrower is taking or proposes to take with respect thereto and
including a copy of all written communications received from or sent
to other Persons with respect thereto:
(i) a Default or an Event of Default;
(ii) any failure or alleged failure of any Debtor to comply
with any Environmental Law, or any notice of inquiry or
investigation with respect thereto;
(iii) any litigation or proceeding which may exist at any
time in which the amount involved exceeds One Hundred Thousand
Dollars ($100,000), or in which injunctive or similar relief is
sought (A) between any Debtor and any Governmental Body, or
(B) affecting the Collateral;
(iv) any claim exceeding One Hundred Thousand Dollars
($100,000) made under any insurance policy with respect to the
Collateral; and
(v) any proposed amendment, modification or supplement to
the partnership agreement, articles of incorporation, corporate
charter or bylaws of any Debtor at least fifteen (15) days prior
to the proposed effectuation thereof by the partners or
shareholders.
(j) Promptly upon the delivery to the shareholder of the
Borrower, copies of all final financial statements and related reports
so delivered;
(k) Promptly after the filing or receipt thereof, copies of all
reports (including annual reports) and notices that Borrower or any
Subsidiary of Borrower files with or receives from the PBGC or the
U.S. Department of Labor under ERISA; and as soon as possible after
Borrower or any Subsidiary of Borrower knows or has reason to know
that any actual or potential violation, Reportable Event or Prohibited
Transaction has occurred with respect to any ERISA Plan, or that the
PBGC or either Borrower or any such Subsidiary has instituted or will
institute proceedings under Title IV of ERISA to terminate any ERISA
Plan, a certificate of the Chief Executive Officer setting forth
details as to such Reportable Event or Prohibited Transaction or ERISA
Plan termination and the action Borrower proposes to take with respect
thereto;
(l) Promptly upon receipt thereof, copies of each report
submitted to the Board of Directors (or the Audit Committee thereof)
of any Debtor by independent public accountants in connection with any
annual, interim or special audit made by them of the consolidated
financial statements of such Debtor and its Subsidiaries, including,
without limitation, each report submitted to the Board of Directors
(or the Audit Committee thereof) of the Borrower concerning the
Borrower's accounting practices and systems and any final "management
letter" submitted by such accountants to management in connection with
the annual audit of the Borrower and its Subsidiaries;
(m) Promptly upon execution thereof, a copy of each amendment to
or modification or waiver of, any instrument evidencing Debt for
borrowed money, Capital Leases or letters of credit of any Debtor
showing the computation of compliance by the Debtor with the
requirements of such documents, together with a certificate from a
Responsible Officer of the Borrower to the effect that such
modification, amendment or waiver does not violate any of the terms of
any of the New Xxxxxxx Loan Documents;
(n) As soon as reasonably practicable after the end of each
Fiscal Year and in any event within thirty (30) days of the end of
each Fiscal Year, an Officer's Certificate identifying each Short Term
Spot Market Water Sale that occurred during the prior Fiscal Year, the
volume of water subject thereto, the buyer, the consideration received
therefor, the relevant water district, and the basis upon which such
water was determined to be Excess Water;
(o) As soon as possible and in any event within two (2) Business
Days after the Borrower knows or has reason to know thereof, notice of
any Material Adverse Event, and at the time of release thereof copies
of all press releases of any Debtor or Cadiz concerning any Material
Adverse Event;
(p) Not later than December 1 of any calendar year, any new,
modified or updated versions of the plans specified in Section
5.1(k)(ii) hereof, in such form and including such information as
Lender may reasonably request;
(q) Promptly following each (i) allocation or reallocation of
costs or other amounts under the Cadiz Services Agreement, (ii)
determination of any amount payable to or by Borrower under the Tax
Sharing Agreement, or (iii) determination of the annual rent payable
under the Cadiz Lease, notice thereof;
(r) No later than October 25, 1996, audited financial statements
of Old SWII and its Subsidiaries for each of the fiscal years of
Debtors ended December 31, 1994 and 1995, certified by Deloitte &
Touche LLP or other independent accountants selected by Borrower and
reasonably acceptable to Lender;
(s) A copy of such documents, reports, statements or other
communications that any Debtor or Cadiz is obligated to deliver (and
has delivered) to Credit Agricole pursuant to the New Credit Agricole
Loan Documents or the Cadiz Agreement (as such term is defined
therein).
(t) Promptly following each payment of Excess Cash (as defined
under the New Credit Agricole Agreement), such calculation and
information as may be reasonably required to enable the Lender to
confirm the correctness of the amount thereof and such other
information as the Lender may reasonably require related thereto;
(u) No later than two (2) Business Days prior to effecting any
payment from the Unsecured Claims Disbursement Account, notice of the
amount to be so paid, together with evidence, reasonably satisfactory
to Lender, that sufficient funds (i) have been made available to
Borrower by Cadiz from the Unsecured Claims Reserve Account, as a
Capital Contribution, and (ii) are held in the Unsecured Claims
Disbursement Account, to effect such payment; and
(v) From time to time such additional information as the Lender
may reasonably request regarding the Condition of the Debtors, the
Collateral, the Business Plan, the Crop Development Plan or any
reports or other information that the Borrower is required to produce
elsewhere under this Credit Agreement.
SECTION 4.2 PAYMENT OF OBLIGATIONS. Except as expressly
prohibited by this Credit Agreement (it being agreed that no such
exception to performance shall apply to repayment of the New Xxxxxxx
Loan and other amounts owing under the New Xxxxxxx Loan Documents),
each Debtor shall pay and discharge, as the same shall become due and
payable, all their respective material obligations and liabilities
(excluding any obligation to pay any Debt), including, without
limitation (a) all claims or demands of materialmen, mechanics,
carriers, warehousemen, landlords and other like Persons which, in any
such case, if unpaid, might by Law give rise to a Lien upon any of
such Debtor's property or assets, and (b) all taxes, assessments and
governmental charges or levies imposed upon it or upon such Debtor's
property or assets; and (c) all claims which, if unpaid, might by Law
become a Lien upon such Debtor's property or assets; provided,
however, that no Debtor shall be required to pay or discharge any such
obligations, liabilities, taxes, assessments, charges, claims, demands
or levies referred to in clause (a), (b) or (c) of this Section 4.2
if the same (i) are the subject of a Good Faith Contest, and (ii) have
not resulted in or caused the attachment and subsequent enforcement of
any Lien with respect thereto or any event which would permit (after
notice or lapse of time or both) the acceleration of the maturity of
any such obligations or liabilities. Nothing contained in this
Section 4.2 shall diminish any obligations that any Debtor may have
under Section 4.21 hereof or elsewhere hereunder.
SECTION 4.3 MAINTENANCE AND PRESERVATION OF COLLATERAL.
(a) The Debtors and their Subsidiaries shall at all times
maintain, preserve, protect and keep, or cause to be maintained,
preserved, protected and kept, their respective property (including,
without limitation, the Collateral) in compliance with (subject to
Section 4.21 hereof) all Laws (including, without limitation,
Environmental Laws), in good repair, working order and condition, and
from time to time shall make, or cause to be made, all repairs,
renewals, replacements, extensions, additions, betterments and
improvements to their respective property as are needed and proper, so
that the business carried on in connection therewith may be conducted
properly and efficiently at all times; provided, however, that the
foregoing shall not prevent any Debtor or any Subsidiary thereof from
making a Disposition of any property (other than Collateral) in the
ordinary course of business if in the reasonable opinion of the
Borrower, such Disposition is in the reasonable best interest of such
Debtor or such Subsidiary.
(b) In addition to, and not in derogation of, the provisions of
Section 4.3(a) above, but subject to Section 4.24 hereof, the Debtors
and their Subsidiaries shall with respect to the Collateral:
(i) properly care for and keep all of the Collateral
including buildings, structures, fixtures and other improvements
at all times in good condition and repair (except if the failure
to do so may be cured or rectified at an aggregate out of pocket
cost not exceeding Two Hundred Fifty Thousand Dollars ($250,000),
free (in all material respects) of dry rot, fungus, termites,
beetles, and all other wood boring, wood eating and other harmful
or destructive insects;
(ii) except for Short Term Spot Market Water Sales permitted
hereunder, preserve and protect all Water Rights (including,
without limitation, rights to irrigation water), and in all
material respects any irrigation item and equipment, and properly
lubricate, service and care for such equipment or item so as to
prevent undue wear and tear on such equipment or item; and
without limiting the foregoing, Borrower shall cause an
appropriately completed Form 7 2181 to be filed with the Xxxxx
Xxxxxx Water Storage District within thirty (30) days after the
Effective Date.
(iii) except for mobile equipment moved from time to time in
the ordinary course of business to another location in the State
of California for a period not to exceed (in any one instance)
ninety (90) days, not remove from the real property Collateral,
demolish, or in any material respect impair or alter (except such
alterations as may be required by Law) any buildings, structures,
fixtures, equipment, fence, canal, well or other material
improvement now or hereafter situated on the Collateral;
(iv) complete promptly and in good and workmanlike manner
any building or other improvement which may be constructed on (or
constituting a part of) the Collateral and promptly restore in
like manner any building or other improvement which may be
damaged or destroyed thereon, and pay when due all claims for
labor performed and materials furnished therefor;
(v) subject to Section 4.21 hereof, comply with all Laws
now or hereafter affecting the Collateral or requiring any
alterations or improvements to be made thereon, including but not
limited to those relating to conservation, environmental
protection, pollution, health and safety, building and zoning, or
special assessments of the Collateral as farmland;
(vi) not commit or permit any waste or deterioration of the
Collateral, including, without limitation, any waste or
deterioration associated with Hazardous Materials except for
waste or deterioration that may be cured or rectified at an
aggregate out of pocket cost not exceeding Two Hundred Fifty
Thousand Dollars ($250,000);
(vii) not commit, suffer or permit any act to be done in or
upon the Collateral that will damage or cause the Collateral or
any portion thereof to depreciate in value or (subject to Section
4.21 hereof) violate any Law except for damage, depreciation or
violations of Law that may be cured or rectified at an aggregate
out of pocket cost not exceeding Two Hundred Fifty Thousand
Dollars ($250,000);
(viii) plant, cultivate, irrigate, fertilize, fumigate,
spray, prune, harvest and otherwise employ proper farming,
husbandry and/or ranching practices and do any other act or acts
all in a timely and proper manner, which, from the character or
use of the Collateral, is or are necessary to protect and
preserve the Collateral and which is or are in accordance with
the best standards practiced by others engaged in similar
operations, the specific enumerations herein not excluding the
general;
(ix) not use the Collateral for any purpose other than for
purposes consistent with Section 4.6 hereof;
(x) not cut, remove, replace, graft, bud or otherwise alter
any trees or plantings, except in the ordinary course of business
consistent with Section 4.6 hereof;
(xi) not permit oil, gas or mineral explorations, operations
or related activities on any Collateral;
(xii) except for Short Term Spot Market Water Sales, not form
or enter into any agreement with any water or drainage district
or similar district or agency or water company, or terminate (or
allow to be terminated) or amend (or allow to be amended) any
existing agreements pertaining to any such district, agency or
company without the prior written consent of the Lender, which
consent the Lender may withhold, deny or delay in its complete
absolute discretion;
(xiii) use all diligence by the best means known for the
controlling and curing of pests and diseases which hinder and
menace permanent, row or growing crops, vines, plants or trees,
and use all required means to rid the Collateral of same and keep
the Collateral and the crops thereon free (in all material
respects) from all types of weeds;
(xiv) except to the extent (if any) specifically covered by,
and specifically and expressly approved by the Lender in
connection with the Lender's review of, the then current Crop
Development Plan, maintain and preserve all the permanent crop
plantings on any real property Collateral that have by the
Effective Date reached the age and size necessary for full
commercial production, in terms of the number, crop type and
quality thereof as well as the volume and quality of the
production therefrom, at no less than the levels thereof on the
Effective Date; provided that to the extent consistent with
prudent farming and ranching practices, the Debtors may replace
such plantings with new ones for the same or different crops, of
equivalent or better value, if (A) pursuant to (and consistent
with) its most recent Crop Development Plan, or (B) with Lender's
advance written approval;
(xv) farm all real property Collateral containing permanent
crops that have not by the Effective Date reached the age and
size necessary for full commercial production so as to bring such
permanent crops to commercial production in accordance with good
farming and ranching practices and the Crop Development Plan; and
(xvi) subject to Section 4.32 hereof, take all steps
necessary to preserve, and (if necessary to preserve) to renew,
extend or replace with equivalent policies (and make timely
payments of premiums with respect to), the key man life insurance
policies or any equivalent replacements thereof identified in
Schedule 4.3(b)(xvi) regardless of whether the key man insured is
or remains an employee of Borrower.
SECTION 4.4 INSURANCE. In addition to the insurance
described in Section 4.3(b)(xvi) hereof, the Borrower shall maintain,
or cause to be maintained, in full force and effect, with such
insurers, amounts, coverages and forms satisfactory to and approved by
the Lender, insurance as follows:
(a) REQUIRED INSURANCE COVERAGES AND LIMITS. The Borrower, at
its own cost and expense and at all times during the term, shall carry
and maintain or cause to be carried and maintained:
(i) CASUALTY INSURANCE "all risk" property insurance on
the Collateral, including, without limitation, flood insurance
(to the extent any of the Collateral constituting facilities or
buildings is located in flood zone A as designated by the Federal
Emergency Management Agency or any successor agency), in an
amount not less than the full replacement cost of the Collateral
(without regard to depreciation);
(ii) LIABILITY INSURANCE comprehensive general liability
(including, without limitation, blanket contractual, personal,
injury, products/completed operations, independent contractors,
sudden and accidental pollution liability for mobile equipment
and broad form property damage) and automobile liability
insurance applicable to the Collateral in such amounts as from
time to time are usually carried by corporations similar to the
Debtors and their Subsidiaries owning or leasing and operating
similar properties in similar locations; provided that sudden and
accidental pollution liability for mobile equipment shall be
subject to availability on commercially practicable terms; and
provided, further, that the Borrower shall be required to carry
and maintain liability insurance applicable to the Collateral in
a minimum amount of not less than Fifty Million Dollars
($50,000,000);
(iii) BUSINESS INTERRUPTION INSURANCE business
interruption insurance and/or loss of rental value insurance in
amounts at least equal to those currently in effect, as reflected
in the Insurance Summary, dated August 5, 1996, prepared by Aon
Risk Services, Inc. of Northern California with respect to
insurance coverages maintained by the Debtors and their
Subsidiaries (the "Insurance Summary");
(iv) DIRECTOR/OFFICER LIABILITY INSURANCE directors' and
officers' insurance, providing aggregate coverage for claims
brought during the then current annual policy period in an amount
no less than Five Million Dollars ($5,000,000);
(v) INSURANCE SUMMARY insurance providing such other
coverages, and in such amounts, as are reflected in the Insurance
Summary;
(vi) WORKER'S COMPENSATION worker's compensation
insurance with respect to employees of the Debtors and their
Subsidiaries sufficient to meet the statutory requirements of the
State of California; and
(vii) OTHER INSURANCE such other insurance with
respect to its property and business of such a nature, with such
terms and in such amounts, as a prudent person would maintain
with respect to similar properties and a similar business, and,
in any event, each Debtor and each Subsidiary thereof shall
maintain insurance on all its property of a character usually
insured by corporations engaged in the same or a similar business
similarly situated against loss or damage of the kinds and in the
amounts customarily insured against and for by such corporation.
All the foregoing insurance policies shall be subject to
such deductible amounts and retention as are usual and customary for
corporations similar to the Debtors and their Subsidiaries owning or
leasing and operating similar properties, but in no event greater than
reasonably acceptable to the Lender. In addition, the Debtors and
their Subsidiaries shall require worker's compensation and liability
coverage by contractors and major subcontractors at all times that any
of the foregoing shall be performing services on the Collateral.
(b) ADDITIONAL INSUREDS; LOSS PAYEES. All insurance hereunder
shall name the Lender and such other parties as the Lender may
designate as additional insureds as their respective interests may
appear (in the case of insurance required by clauses (a)(iii) (iv),
to the extent permitted under applicable Law and available from the
respective insurers). All insurance referred to in clause (a)(i)
above (except with respect to Blythe Ranch) shall name the Lender as
first loss payee. The Borrower shall effect all insurance provided
for in this Section 4.4 with insurance companies legally qualified to
issue insurance in California, reasonably acceptable to the Lender,
and rated A8 or higher by AM Best's Insurance Reports. All such
policies referred to in clauses (a)(i) and (a)(ii) and such other
policies as to which the Lender is named as an additional insured or
first loss payee, as the case may be, shall (A) provide that the same
shall not be cancelled or terminated, nor shall there be any reduction
in any limitation of liability, any increase in any deductible or co
insurance or any exclusions added to the same, without at least thirty
(30) days' prior written notice (or ten (10) days' prior written
notice in the case of non payment of premium or fraud) to each insured
and each loss payee named therein, (B) provide for at least thirty
(30) days' prior written notice (or ten (10) days' prior written
notice in the case of non payment of premium or fraud) to each insured
and each loss payee named therein of the date on which such policies
shall terminate by lapse of time if not renewed, (C) with respect to
the insurance referred to in clause (a)(i) above, contain a breach of
warranty clause providing that the respective interests of the Lender
or any other additional insured or loss payee shall not be invalidated
by any action or inaction of any Debtor or any other Person, (D) with
respect to the insurance referred to in clause (a)(i) above insure the
Lender and any other additional insured or loss payee regardless of
any breach or violation by any Debtor or any other Person of any
warranties, declarations, or conditions contained in the policies
related to such insurance, (E) provide that the insurer thereunder
waives all right of subrogation against the Lender and waives any
right of set off or counterclaim and any other right of deduction
whether by attachment or otherwise, (F) be primary without right of
contribution from any other insurance carried by or on behalf of any
Lender with respect to any interest in the Collateral, (G) provide
that no Person other than the Borrower shall have any liability for
any premiums with respect thereto and (H) include a cross liability
endorsement providing that inasmuch as the policies are written to
cover more than one insured, all terms and conditions, insuring
agreements and endorsements, with the exception of limits of
liability, shall operate in the same manner as if there were a
separate policy covering each insured. The Lender shall not, by
reason of accepting, rejecting, approving or obtaining insurance incur
any liability for the existence, nonexistence, form or legal
sufficiency thereof, the solvency of any insurer, or the payment of
any losses.
(c) CERTIFICATE. On or prior to the Effective Date, and
thereafter not less than ten (10) days after the expiration dates of
the expiring policies required pursuant to this Section 4.4, the
Borrower shall deliver to the Lender certificates of insurance issued
by the insurers thereunder or by an insurance broker authorized to
bind such insurers evidencing the insurance maintained pursuant to
this Section 4.4.
(d) PERFORMANCE BY LENDER. In the event that any Debtor or
Subsidiary thereof shall fail to maintain insurance as herein
provided, the Lender may at its option, but without obligation,
provide such insurance and, in such event, the Borrower shall, within
ten (10) days after written demand from time to time, reimburse the
Lender for the cost thereof, together with interest at the Default
Rate on such cost from the date of payment of such cost to the date of
reimbursement.
(e) PROCEEDS. The amount collected under any such insurance
policies maintained pursuant to this Section 4.4 shall be distributed
or applied in accordance with the terms and provisions of the New
Xxxxxxx Security Documents.
(f) SEPARATE INSURANCE OF LENDER. Nothing in this Section 4.4
shall be construed to prohibit the Lender from insuring at its own
expense its interest in the Collateral or otherwise, and any insurance
so maintained shall not provide for or result in a reduction of the
coverage or the amounts payable under any of the insurance required to
be maintained by any Debtor or Subsidiary thereof under this Section
4.4.
(g) SEPARATE INSURANCE OF DEBTORS. No Debtor or Subsidiary
thereof will obtain or carry separate insurance concurrent in form or
contributing in the event of loss with that required by this Section
4.4, unless the Lender is the additional insured thereunder, with loss
payable as provided herein. The Borrower shall immediately notify the
Lender whenever any such separate insurance is obtained and shall
deliver to the Lender the certificates evidencing the same. The
Borrower shall furnish to the Lender information describing in
reasonable detail the insurance maintained by the Debtors and their
Subsidiaries not later than thirty (30) days after the effective date
with respect to each policy of such insurance.
SECTION 4.5 INSPECTION OF PROPERTY, BOOKS AND RECORDS.
(a) The Debtors and their respective Subsidiaries shall permit
representatives of the Lender (including, without limitation, any
accounting firm, legal counsel, consultant or other professional
advisor to the Lender), at the reasonable expense of the Borrower if
prior to the occurrence and continuation of any Default or Event of
Default, and otherwise at the expense of Borrower, to visit, inspect
and investigate (including, without limitation, if without
unreasonable interference with the Debtors' and their Subsidiaries'
ordinary business operations and subject to such reasonable procedures
as the Borrower may set forth, by testing, drilling, coring, or other
physical invasion or alteration of the Collateral) any of their
respective properties (whether Collateral or otherwise), to examine
their respective corporate, financial and operating records and make
copies thereof or abstracts therefrom, to assess the Borrower's
Condition and compliance with the New Xxxxxxx Loan Documents
(including, without limitation, Section 4.3 hereof), to ascertain
compliance with Environmental Laws and other Laws and to discuss their
respective affairs, finances and accounts with their respective
directors, officers, employees, legal counsel and independent public
accountants, all at such reasonable times and as often as may
reasonably be desired, upon reasonable advance notice to the Borrower.
This Section 4.5 shall constitute (without further act of any Person)
the Borrower's irrevocable authorization and direction to the
aforementioned directors, officers, employees, legal counsel,
consultants and independent public accountants to provide such records
to such representatives of the Lender and to discuss such affairs,
finances and accounts with such representatives of the Lender.
(b) The Debtors and their Subsidiaries shall make and keep
proper books, records and accounts in which full, true and correct
entries shall be made of all dealings and transactions in relation to
its business and activities, including, without limitation, their
respective transactions and Dispositions of their respective assets,
and each shall maintain a system of internal accounting controls
sufficient to provide reasonable assurances that (i) transactions are
executed in accordance with management's general or specific
authorization, (ii) transactions are recorded as necessary (A) to
permit preparation of financial statements in conformity with GAAP
except as previously disclosed to the Lender and (B) to maintain
accountability for assets, and (iii) the recorded accountability for
assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
SECTION 4.6 CONDUCT OF BUSINESS AND MAINTENANCE OF
SUBSIDIARIES.
(a) Each Debtor and its Subsidiaries shall (i) continue to
engage in business of the same general type as conducted by it on the
Effective Date and other lines of business reasonably related thereto,
(ii) not engage, and shall not permit any of its respective
Subsidiaries to engage, in any other business, and (iii) preserve,
renew and keep in full force and effect its corporate or partnership
existence and all material rights, privileges, licenses, permits and
franchises necessary or desirable in the normal conduct of its
business, including, without limitation, those required under PACA or
the California Food and Agriculture Code. Without limiting the
generality of the foregoing, each Debtor and its Subsidiaries shall
maintain Marketing Agreements with each Grower for whom or which
Borrower provides marketing services and keep in force, and diligently
perform its obligations and enforce its rights under, all Marketing
Agreements, including, without limitation, by all appropriate legal
proceedings and without waiver or amendment except with Lender's prior
written consent. Furthermore, by October 15, 1996, Borrower shall
obtain the license required under PACA and referenced in Section
5.1(q) hereof and deliver a copy thereof to Lender.
(b) Notwithstanding subsection (a) above, Borrower shall not
(and shall not permit any Subsidiary of Borrower to) (i) make a
Disposition of any shares of capital stock of any Subsidiary of
Borrower (except for Permitted Liens), (ii) issue any shares of its
capital stock or any other
equity interests, (iii) issue warrants to purchase its capital stock
or other equity interests or securities, or (iv) issue Debt
instruments convertible into its capital stock or any other equity
interest.
(c) Borrower shall not create or acquire, or permit any
Subsidiary of Borrower to create or acquire, any Subsidiary, or enter
into or remain a party to, or permit any Subsidiary of Borrower to
enter into or remain a party to, any Joint Venture, other than
(i) Joint Ventures consisting of partnerships existing as of the
Effective Date and listed on Schedule 4.6(c), and (ii) Joint Ventures
with Growers relating to the production and sale of row crops, entered
into in the ordinary course or business and substantially in
accordance with the Debtors' past practices.
(d) The cash amount maintained by the Borrower in the Cash
Account (as defined in the New Credit Agricole Credit Agreement) shall
not exceed the greater of (i) the amount required to be maintained
therein by the New Credit Agricole Credit Agreement, and (ii) the
amount required by prudent cash management practices.
SECTION 4.7 DEBT; DEBT REPAYMENTS AND CANCELLATIONS.
(a) No Debtor shall incur, create, issue, assume, guarantee or
in any manner or at any time become or remain liable for, contingently
or otherwise in respect of, or suffer to exist, any (i) outstanding
indebtedness aggregating at any one (1) time more than Twenty Five
Million Dollars ($25,000,000) by any Debtor in the ordinary course of
business to trade creditors and other Persons that does not constitute
obligations for borrowed money or have a repayment term exceeding
ninety (90) days; or (ii) Debt, except the following:
(A) Debt outstanding under the New Xxxxxxx Obligations;
(B) Debt the proceeds of which are used solely for payment
of the purchase price of assets (other than renewals, replacements,
extensions, additions, betterments, or improvements of Collateral)
acquired by a Debtor after the Effective Date in an aggregate amount
not exceeding in any Fiscal Year the lesser of (I) One Million Five
Hundred Thousand Dollars ($1,500,000) and (II) the difference (if a
positive number) between the total Capital Expenditures made by the
Debtors in such Fiscal Year and the total of all Capital Expenditures
made by the Debtors in such Fiscal Year on the Collateral;
(C) The New Credit Agricole Obligations, provided that the
principal amount thereof shall not exceed the principal amount thereof
as of the Effective Date, as reduced from time to time by any payments
of principal made thereon (but without limiting in any manner the
provisions of Section 4.26) and subject to an increase, on a single
occasion, in the amount of Two Million Dollars ($2,000,000) arising
from Credit Agricole's making of the Re Advance (as such term is
defined in the New Credit Agricole Credit Agreement) or
(D) Debt that exists as of the Effective Date and is listed
on Schedule 4.7 hereto; provided that the Plan does not require such
Debt so listed to be paid upon or prior to the Effective Date, and the
principal amount thereof shall not exceed the principal amount thereof
as of the Effective Date, as reduced from time to time by any payments
of principal made thereon (but without limiting in any manner the
provisions of Section 4.26).
(b) No Debtor shall cancel any claim or Debt owing to it, except
for reasonable consideration and in the ordinary course of business,
and for the settlement of intercompany accounts with the Borrower.
SECTION 4.8 LIENS. No Debtor or Subsidiary thereof shall
create, incur or permit to exist any Lien on any Collateral, except
for Permitted Liens.
SECTION 4.9 CONSOLIDATIONS, MERGERS, ACQUISITIONS AND
DISPOSITIONS OF ASSETS.
(a) Borrower shall not merge (whether as the disappearing or the
surviving Person) or consolidate with, or sell, assign, lease, or
otherwise make a Disposition of (whether in one transaction or in a
series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to any Person, or permit any
Subsidiary of Borrower to do so, except for a Disposition by Sun World
Brands of its interest in American Sun Melon as a Pre Identified Asset
in accordance with Section 4.24(b) hereof or for a Disposition that
constitutes a Permitted Lien.
(b) Neither Borrower nor any Subsidiary thereof shall acquire
any fee interest in (i) any real property, or (ii) (except for
Permitted Investments, or in the ordinary course of business) in any
other asset or property.
SECTION 4.10 FURTHER ASSURANCES. The Debtors and their
Subsidiaries shall execute, deliver, record, register and file all
such notices, statements and other documents and take such other
steps, including but not limited to the amendment of the New Xxxxxxx
Loan Documents and any Financing Statements prepared thereunder, as
may be reasonably necessary or advisable, or that the Lender may
reasonably request, to render fully valid and enforceable under all
applicable Laws, the rights, Liens and priorities of the Lender with
respect to all Collateral from time to time furnished under this
Credit Agreement or any other New Xxxxxxx Loan Document or intended to
be so furnished, or otherwise in order more fully to carry out the
provisions and intentions of this Agreement, in each case in such form
and at such times as shall be reasonably satisfactory to Lender.
SECTION 4.11 RESTRICTED PAYMENTS. No Debtor and no Subsidiary
thereof shall declare, set aside, make or permit any Restricted
Payment.
SECTION 4.12 FINANCIAL COVENANTS. The Borrower shall do as
follows:
(a) Maintain, as of the last day of each fiscal year listed
below, Working Capital in an amount equal to at least the amount set
forth opposite such fiscal year:
FISCAL YEAR ENDING MINIMUM WORKING CAPITAL
December 31, 1996 $35.2 million
December 31, 1997 34.5 million
December 31, 1998 34.4 million
December 31, 1999 34.1 million
December 31, 2000 34.0 million
December 31, 2001 36.0 million
December 31, 2002 36.0 million
December 31, 2003 36.0 million
December 31, 2004 36.0 million
December 31, 2005 and thereafter 36.0 million
(b) Maintain, as of the last day of each fiscal quarter listed
below, Working Capital in an amount equal to at least the amount set
forth opposite such fiscal quarter:
FISCAL QUARTER ENDING MINIMUM WORKING CAPITAL
March 31 of any fiscal year $25.0 million
June 30 of any fiscal year 10.0 million
September 30 of any fiscal year 27.0 million
(c) Maintain, as of the last day of each fiscal year listed
below, a ratio of Current Assets to Current Liabilities of not less
than the ratio set forth opposite such fiscal year:
FISCAL YEAR ENDING MINIMUM RATIO
December 31, 1996 3.16 to 1
December 31, 1997 3.06 to 1
December 31, 1998 2.93 to 1
December 31, 1999 2.72 to 1
December 31, 2000 2.67 to 1
December 31, 2001 2.71 to 1
December 31, 2002 2.71 to 1
December 31, 2003 2.71 to 1
December 31, 2004 2.71 to 1
December 31, 2005 and thereafter 2.71 to 1
(d) Maintain, as of the last day of each fiscal quarter listed
below, a ratio of Current Assets to Current Liabilities of not less
than the ratio set forth opposite such fiscal quarter:
FISCAL QUARTER ENDING MINIMUM RATIO
March 31 of any fiscal year 2.50 to 1
June 30 of any fiscal year 1.22 to 1
September 30 of any fiscal year 2.30 to 1
(e) Maintain, as of the last day of each fiscal year listed
below, a Debt Service Coverage Ratio for such fiscal year of not less
than the ratio set forth opposite such fiscal year:
FISCAL YEAR ENDING MINIMUM RATIO
December 31, 1996 0.68 to 1
December 31, 1997 1.01 to 1
December 31, 1998 1.16 to 1
December 31, 1999 1.12 to 1
December 31, 2000 1.05 to 1
December 31, 2001 1.25 to 1
December 31, 2002 1.25 to 1
December 31, 2003 1.25 to 1
December 31, 2004 1.25 to 1
December 31, 2005 and thereafter 1.25 to 1
(f) Maintain, as of the last day of each fiscal year listed
below, an Interest Coverage Ratio for such fiscal year of not less
than the ratio set forth opposite such fiscal year:
FISCAL YEAR ENDING MINIMUM RATIO
December 31, 1996 1.10 to 1
December 31, 1997 1.38 to 1
December 31, 1998 1.73 to 1
December 31, 1999 2.01 to 1
December 31, 2000 2.33 to 1
December 31, 2001 2.94 to 1
December 31, 2002 2.94 to 1
December 31, 2003 2.94 to 1
December 31, 2004 2.94 to 1
December 31, 2005 and thereafter 2.94 to 1
(g) Maintain, as of the last day of each fiscal year listed
below, a ratio of (i) Debt as of the last day of such fiscal year to
(ii) EBITDA for such fiscal year, of not greater than the ratio set
forth opposite such fiscal year:
FISCAL YEAR ENDING MAXIMUM RATIO
December 31, 1996 8.69 to 1
December 31, 1997 6.81 to 1
December 31, 1998 5.42 to 1
December 31, 1999 4.54 to 1
December 31, 2000 3.85 to 1
December 31, 2001 2.99 to 1
December 31, 2002 2.99 to 1
December 31, 2003 2.99 to 1
December 31, 2004 2.99 to 1
December 31, 2005 and thereafter 2.99 to 1
(h) Maintain, as of the last day of each fiscal year listed
below, a Tangible Net Worth of not less than the amount set forth
below opposite such fiscal year:
FISCAL YEAR ENDING MINIMUM TANGIBLE NET WORTH
December 31, 1996 $20.0 million
December 31, 1997 22.5 million
December 31, 1998 26.5 million
December 31, 1999 31.9 million
December 31, 2000 37.7 million
December 31, 2001 45.3 million
December 31, 2002
through December 31,
2005 and thereafter $45.3 million plus one hundred
percent (100%) of the
cumulative aggregate
Net Income of Borrower
for each fiscal year
of Borrower beginning
with and including
fiscal year 2002.
(i) Maintain, as of the end of each fiscal year of Borrower
indicated below, a ratio of (i) Debt to (ii) Borrower's stockholder's
equity, no greater than the ratio set forth below opposite such fiscal
year:
FISCAL YEAR ENDING MAXIMUM RATIO
December 31, 1996 5.76 to 1
December 31, 1997 4.59 to 1
December 31, 1998 3.53 to 1
December 31, 1999 2.84 to 1
December 31, 2000 2.21 to 1
December 31, 2001 1.66 to 1
December 31, 2002 1.66 to 1
December 31, 2003 1.66 to 1
December 31, 2004 1.66 to 1
December 31, 2005 and thereafter 1.66 to 1
(j) Borrower's compliance with the covenants contained in
subsections (b) and (d) shall be determined as of the end of each
fiscal quarter of Borrower indicated in the relevant Section, and
Borrower's compliance with the covenants contained in subsections (a),
(c), and (e) through (i) shall be determined as of the end of each
fiscal year of Borrower. For purposes of determining Borrower's
compliance with any of subsections (e), (f) and (g) with respect to
the fiscal year ending December 31, 1996, (i) all calculations shall
be based on Borrower's and its Subsidiaries'
operations for the entire calendar year 1996 determined on a
Consolidated Basis, excluding (A) the effects of (I) the Acquisition
and (II) the application of purchase accounting; and (B)(I) adequate
protection payments made in such entities' bankruptcy cases and
recorded as expenses on such entities' income statement, (II)
professional fees paid in connection with such entities' bankruptcy
cases, (III) (without duplication of amounts excluded under clause
(B)(I)) expenses recorded by such entities to reflect increases in
liabilities relating to (X) interest accruals at contracted default
rates and contractually reimbursable costs and expenses (including,
without limitation, professional fees) incurred by third parties, and
(Y) adjudication or settlement of claims against such entities in
amounts greater than the amount recorded by such entities for such
claims on their financial statements, and (IV) income arising from the
adjudication or settlement of claims against such entities in amounts
less than the amounts recorded by such entities for such claims on
their financial statements; and (C) interest expense for the period
from January 1, 1996 through September 13, 1996 shall be deemed to be
Eleven Million Two Hundred Twenty Seven Thousand Three Hundred Seventy
Four Dollars ($11,227,374).
SECTION 4.13 LIMITATIONS ON INVESTMENTS. No Debtor or
Subsidiary thereof shall make or acquire any Investment in any Person,
except Permitted Investments.
SECTION 4.14 FISCAL YEAR; ACCOUNTING PRACTICES. The Borrower
shall not (a) change its fiscal year from that set forth in the
definition of Fiscal Year, or (b) except as may be required by reason
of a change in GAAP, change the accounting principles and practices
reflected in the financial statements referred to in Section 4.1(c) in
any manner which would materially affect any accounting determination
contemplated by this Credit Agreement.
SECTION 4.15 AMENDMENT OF DEBT, CORPORATE AND OTHER DOCUMENTS.
No Debtor or Subsidiary thereof shall without the prior written
consent of the Lender, which consent the Lender may deny, withhold or
delay in its sole and absolute discretion, permit or consent to any
amendment, modification, supplement, waiver or termination of any of
the following: (i) any of the documentation governing or relating to
the New Credit Agricole Obligations, the New Credit Agricole Loan
Documents or any other Debt permitted under Section 4.7, including,
without limitation, any change to the definition of "Minimum Cash
Balance" in the New Credit Agricole Credit Agreement that causes such
Minimum Cash Balance definition to mean (currently or potentially)
less than Thirty Five Million Dollars ($35,000,000) (if the Exception
Ranch is not sold) or Thirty Four Million Six Hundred Ninety Thousand
Dollars ($34,690,000) (if the Exception Ranch is sold); (ii) any
Debtor or Debtor Subsidiary charter, certificate of incorporation,
bylaws or any other constituent documents; (iii) any Crop Development
Plan or Business Plan previously approved by Lender; (iv) the Cadiz
Services Agreement; (v) the Tax Sharing Agreement; or (vi) the Cadiz
Lease.
SECTION 4.16 LEASES. Except for the Cadiz Lease and for
leases of space (each lease for a term, including any extensions or
renewals, not exceeding six (6) months) for the purpose of storing
equipment, inventory and other personal property and if the aggregate
rent due under all such leases in any Fiscal Year does not exceed One
Hundred Thousand Dollars ($100,000), Borrower shall not create, incur,
assume, or suffer to exist, or permit any Subsidiary of Borrower to
create, incur, assume, or suffer to exist, any obligation (as lessee,
license or otherwise) for the rental, hire or use of (a) any personal
property, other than in the ordinary course of business; or (b) any
real property, other than to replace land owned or leased as of the
Effective Date (or land subsequently leased to replace such land in
accordance with this Section 4.16) for the growing of row crops and
provided that the then current Business Plan calls for such row crops
to continue to be grown in quantities necessitating Borrower's entry
into such replacement lease.
SECTION 4.17 TRANSACTIONS WITH AFFILIATES. No Debtor or
Subsidiary thereof shall, directly or indirectly, do any of the
following:
(a) Enter into or continue any transaction, including, without
limitation, the Disposition of property or the rendering of any
service, with any Affiliate (including, without limitation, Cadiz), or
permit any Subsidiary of Borrower to enter into or continue any
transaction, including, without limitation, the Disposition of
property or the rendering of any service, with any Affiliate, except
(i) if otherwise not prohibited by this Credit Agreement and with an
Affiliate that is (A) Borrower or a Subsidiary of Borrower, or (B) an
Affiliate of Cadiz that owns ten percent (10%) or less of the
outstanding voting securities of Cadiz (I) upon fair and reasonable
terms no less favorable to Borrower or such Subsidiary than those
which would be obtainable in a comparable arm's length transaction
with a Person not an Affiliate and (II) (except for the Cadiz Lease)
in the ordinary course of Borrower's (or such Subsidiary's) business;
or (ii) if such Affiliate is (A) Cadiz or a Subsidiary of Cadiz other
than Borrower or any of its Subsidiaries, or (B) an Affiliate of Cadiz
that owns more than ten percent (10%) of the outstanding voting
securities of Cadiz: (X) pursuant to a Marketing Agreement upon fair
and reasonable terms no less favorable to Borrower or such Subsidiary
than those which would be obtainable in a comparable arm's length
transaction with a Person not an Affiliate, or (Y) in accordance with
the Cadiz Services Agreement or the Tax Sharing Agreement.
(b) Except in accordance with either the Cadiz Services
Agreement, the Cadiz Lease or the Tax Sharing Agreement, permit, or
permit any Subsidiary of Borrower to permit, Cadiz or any Affiliate of
Cadiz other than Borrower or its Subsidiaries to (i) pay Borrower's or
such Subsidiary's expenses; (ii) except to the extent expressly
provided in the New Xxxxxxx Loan Documents or in the Cadiz Agreement
(as defined in the New Credit Agricole Credit Agreement), guaranty
Borrower's (or any Subsidiary's) obligations; or (iii) advance funds
to Borrower or such Subsidiary, for the payment of expenses or
otherwise; provided, however, that Cadiz may from time to time make
Capital Contributions to Borrower (including, without limitation, in
connection with the transfer of funds into the Unsecured Claims
Reserve Account as required to comply with Cadiz's obligations under
the Plan);
(c) Act, or permit any Subsidiary of Borrower to act, as agent
for Cadiz; or
(d) Except in accordance with either the Cadiz Services
Agreement, the Cadiz Lease or the Tax Sharing Agreement, take any
action or permit any action to be taken on its behalf, or permit any
Subsidiary of Borrower to take any action or permit any action to be
taken on its behalf (or, in either such case, fail to take any action
or cause any action to be taken on its behalf), if the effect of
taking or not taking such action, as the case may be, could result in
Borrower's being substantively consolidated in the estate of another
Person in the event of a bankruptcy or insolvency of any such Person.
SECTION 4.18 COMPLIANCE WITH ERISA. No Debtor or Subsidiary
thereof shall create, sponsor, participate in, or otherwise incur any
liabilities or obligations contingent or otherwise under any ERISA
Plan, except those set forth in Schedule 4.18 hereto.
SECTION 4.19 SALES AND LEASEBACKS. No Debtor or Subsidiary
thereof shall enter into any arrangement or a series of arrangements
with any Person or to which such Person is a party providing for the
leasing by such Debtor or Subsidiary of any real property and/or
personal property that constitutes a sale by such Debtor or Subsidiary
to such Person (or an entity with which such Person has an interest,
directly or indirectly, with such Person as investor or lender) to
whom or which funds have been or are to be advanced by a lender,
investor or any other Person on the security of such property or
rental obligations of such Debtor or Subsidiary.
SECTION 4.20 OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES.
No Debtor or Subsidiary thereof shall create, assume or otherwise
cause or suffer to exist or to become effective any contractual
restriction on the ability of such Debtor or Subsidiary to make
payments in respect of any Debt or trade payable owed to the Borrower
or any of its Subsidiaries (other than as permitted or required by any
of the New Xxxxxxx Loan Documents, and other than contractual
restrictions under the New Credit Agricole Loan Documents, and
contractual restrictions binding upon any Person at the time such
Person becomes a Subsidiary of the Borrower so long as such
contractual restrictions are not created, incurred or assumed in
contemplation of such Person becoming a Subsidiary of the Borrower).
SECTION 4.21 COMPLIANCE WITH LAWS.
(a) Each Debtor and Subsidiary thereof shall comply with all
Laws (other than Environmental Laws, which are addressed separately in
Section 4.21(b) herein) applicable to such Debtor or Subsidiary or the
Collateral (including, without limitation, OSHA and other health and
safety Laws), except for such Laws (i) the absence of compliance from
which does not constitute a Material Adverse Event, or (ii) the
compliance with which is the subject of a Good Faith Contest.
(b) Each Debtor and Subsidiary thereof shall comply with all
Environmental Laws applicable to such Debtor or Subsidiary or the
Collateral, except for such Environmental Laws (i) the absence of
compliance from which does not constitute a Material Adverse Event, or
(ii) the compliance with which is the subject of a Good Faith Contest,
and during the pendency of such Good Faith Contest, (A) the condition
of the Collateral shall not be in danger of worsening or of being
forfeited, lost or otherwise made the subject of a Disposition;
(B) the Borrower shall have provided such additional security as the
Lender may reasonably request or as may be required as part of such
Good Faith Contest; and (C) the Lender shall not be subjected to any
risk of loss or liability by reason of such Good Faith Contest.
SECTION 4.22 AGRICULTURAL CONSULTANT REVIEW. The Lender shall
have the right (at the Borrower's expense not to exceed Fifty Thousand
Dollars ($50,000) a year if prior to the occurrence and continuation
of a Default or an Event of Default, and otherwise at the Borrower's
expense) to engage an agricultural consultant selected by the Lender
to review annually each Crop Development Plan and the Debtors'
compliance with this Credit Agreement, including, without limitation,
Section 4.1(a), Section 4.1 (b) and Section 4.3 hereof, and to prepare
a written report of the results of such review.
SECTION 4.23 SENIOR EXECUTIVE MANAGEMENT. Borrower shall
employ at all times, as chief executive officer of Borrower, a person
having experience in the management of companies engaged in
agriculture and in marketing activities such as those currently
engaged in by Borrower. The chief executive officer shall have the
chief executive authority for Borrower and each Subsidiary of
Borrower. On and after the Effective Date, no individual who performs
the duties and responsibilities customarily associated with the senior
executive management of an entity comparable to the Borrower,
including, without limitation, the Borrower's president, chief
executive officer, chief operating officer and chief financial officer
shall be (a) a past or present director, officer or shareholder of any
Debtor or pre Effective Date predecessor thereof, or (b) elected or
appointed to any of the aforementioned positions, or perform the
duties and responsibilities customarily associated therewith.
SECTION 4.24 LIMITATIONS ON DISPOSITIONS OF COLLATERAL.
(a) Notwithstanding anything to the contrary express or implied
herein, but subject to the express terms of subsections (b), (c), (d)
and (e) of this Section 4.24, none of the Collateral shall be the
subject of any Disposition (except for Permitted Liens, leases
expressly permitted under Section 4.16 hereof and licenses of Patents,
Trademarks and Copyrights to third parties in the ordinary course of
business on commercially reasonable terms) without the Lender's prior
written consent, which consent the Lender may in its sole and absolute
discretion deny, withhold or delay.
(b) Pre Identified Assets may be the subject of a third party
sale by the Borrower, through a third party escrow and entirely for
cash, without the prior written consent of the Lender, provided that:
(i) Lender must receive directly from the sale escrow
concurrently with the closing thereof, as a Mandatory Prepayment
pursuant to Section 2.12 hereof, in cash free and clear of all
Liens, the Net Sales Proceeds resulting from such sale, provided
that such Net Sales Proceeds must not be less than the Minimum
Release Price for the Pre Identified Asset in question. Net
Sales Proceeds in the foregoing sentence shall not include Crop
Value, if any, or any sale transaction expense or cost properly
and entirely allocable to Crop Value; provided, however that any
such expense or cost which cannot be determined as properly and
entirely allocable to either the sale of a Pre Identified Asset
or the sale of the growing crops underlying the Crop Value shall
be allocated based on the gross sales prices of the Pre
Identified Asset and the Crop Value. "Crop Value" means, if
growing crops are sold, the cash sales price for any growing
crops (if any) on the Pre Identified Asset to be sold, if such
sale and price for the growing crops is set forth in an arms'
length, good faith written agreement between the Borrower and the
buyer, and such price is readily distinguishable from the sales
price for such Pre Identified Asset.
(ii) Not later than ten (10) Business Days prior to the
proposed date of sale, the Lender shall have received an
Officer's Certificate from the Borrower (with a copy of any
written sale agreement pertaining to the Pre Identified Asset
attached) stating:
A. That the Borrower, acting in good faith in an
arm's length transaction, has entered into the attached
agreement, and that such agreement is a bona fide
contract with a third party for the sale in cash of a
specified Pre Identified Asset;
B. That no Default or Event of Default occurred and
is continuing, or if one exists, describing the nature
and extent thereof;
C. The expected escrow closing date for such sale;
D. The gross sales price and anticipated Net Sales
Proceeds;
E. That such Pre Identified Asset to be sold
constitutes a properly created parcel under the
California Subdivision Map Act and implements local
ordinances pursuant to a parcel or subdivision map, if
applicable, and that any real property Collateral
adjacent to the Pre Identified Asset to be sold shall
also comply with such Act and ordinances and shall
retain adequate access to a public street and utility
easements, and attaching to such Certificate evidence
satisfactory to the Lender of such compliance; and
F. A computation of the Minimum Cash Balance (as such
term is defined in the New Credit Agricole Credit
Agreement) reflecting the proposed sale.
(iii) Each of the procedural requirements for a release
of the Lender's Lien set forth in the applicable New Xxxxxxx
Security Documents shall have been satisfied in all respects.
(iv) The Borrower must obtain the Lender's prior
written consent to any sale of a Pre Identified Asset if, in connection
with the sale of such Pre Identified Asset, (A) a Crop Value
exists, and (B) such Crop Value is greater than one hundred and
twenty percent (120%) of Funded Crop Costs. "Funded Crop Costs"
means costs and expenses (except those that are or will or must
be capitalized in accordance with GAAP by the Borrower) that are
both directly attributable to the growing crops included in Crop
Value and accounted for in the Borrower's books and records
within any of the categories of Direct Expenses set forth in
Schedule 4.24(b)(iv) hereto. Direct Expenses must be determined
and accounted for in accordance with the pre Effective Date
accounting and budget practices of the Debtors' predecessors
during their bankruptcy (regardless of whether such practices
conformed to GAAP).
(c) Short Term Spot Market Water Sales shall not require any
prior consent or approval of the Lender; provided, however, that the
Lender shall receive from the Borrower at least ten (10) days' advance
written notice thereof along with a copy of the proposed written
agreement pertaining thereto, and no Default or Event of Default has
occurred and is continuing when such notice is given or when any such
Short Term Spot Market Water Sale is consummated.
(d) The Borrower may renew or replace machinery, equipment and
other tangible personal property constituting Personal Property
Security with like property having a fair market value, useful life,
utility and condition at least equal to that of such Personal Property
Security so replaced (assuming Borrower's prior compliance with
Section 4.3 hereof); provided that the Lender shall have a first
priority Lien and security interest on and in any such replacement
personal property.
(e) Borrower may sell Blythe Ranch to a third party without the
Lender's prior consent; provided that the net proceeds shall be
applied by Credit Agricole, subject to the rights (if any) of Zenith
to any net proceeds, against the principal then outstanding under the
New Credit Agricole Obligations in accordance with the application
rules set forth in Section 2.4.1(d) of the New Credit Agricole Credit
Agreement, and then (after payment in full of the New Credit Agricole
Obligations) to the extent of any remaining net proceeds and the
Lender's receipt thereof, by the Lender.
SECTION 4.25 EQUITY INFUSION. On or before the Effective Date,
the Borrower shall cause Cadiz to contribute to the Borrower's equity
a cash amount equal to not less than Fifteen Million Dollars
($15,000,000) (the "Equity Infusion"). Borrower shall use the Equity
Infusion for general corporate purposes consistent with Section 4.6
hereof. The Borrower's use of such Equity Infusion shall be and
remain subject to its obligations elsewhere hereunder, but otherwise
substantially unrestricted by the Borrower's Debt or other obligations
to other Persons, except as expressly provided in the New Credit
Agricole Loan Documents.
SECTION 4.26 NEW CREDIT AGRICOLE OBLIGATIONS. Notwithstanding
anything to the contrary expressed or implied herein, except for
payments of Excess Cash (as defined in the New Credit Agricole Credit
Agreement) and of net proceeds from the sale of Blythe Ranch required
to be made to Credit Agricole pursuant to the New Credit Agricole
Credit Agreement, the Borrower shall not, under any circumstances,
make any prepayment of amounts due on the New Credit Agricole
Obligations unless and until the repayment of the New Xxxxxxx Loan in
full occurs.
SECTION 4.27 CHANGE OF CONTROL. No Change of Control shall
occur for any reason, except as set forth below:
(a) The Borrower shall, within two (2) Business Days after any
Responsible Officer has knowledge of the occurrence of any Change of
Control or Control Event, give written notice of such Change of
Control or Control Event to Lender unless notice in respect of such
Change of Control (or the Change of Control contemplated by such
Control Event) shall have been given pursuant to subparagraph (b) of
this Section 4.27. If a Change of Control has occurred, such notice
shall contain and constitute an offer to prepay the New Xxxxxxx Note
as described in section (c) of this Section 4.27 and shall be
accompanied by the Officer's Certificate described in section (g) of
this Section 4.27.
(b) The Borrower shall not take any action that consummates or
finalizes a Change of Control unless (i) at least thirty (30) days
prior to such action, the Borrower shall have given to the Lender
written notice containing and constituting an offer to prepay the New
Xxxxxxx Note as described in section (c) of this Section 4.27,
accompanied by the Officer's Certificate described in section (g) of
this Section 4.27, and (ii) contemporaneously with such action, the
Borrower prepays the New Xxxxxxx Note as required to be prepaid in
accordance with this Section 4.27.
(c) The offer to prepay the New Xxxxxxx Note contemplated by
subsections (a) and (b) of this Section 4.27 shall be an offer to
prepay, in accordance with and subject to this Section 4.27, the New
Xxxxxxx Note on a date specified in such offer (the "Proposed
Prepayment Date"). If such Proposed Prepayment Date is in connection
with an offer contemplated by subsection (a) of this Section 4.27,
such date shall be not less than thirty (30) days and not more than
ninety (90) days after the date of such offer (if the Proposed
Prepayment Date shall not be specified in such offer, the Proposed
Prepayment Date shall be the thirtieth (30th) day after the date of
such offer).
(d) The Lender may accept the offer to prepay made pursuant to
this Section 4.27 by causing a notice of such acceptance to be
delivered to the Borrower at least ten (10) days prior to the Proposed
Prepayment Date. A failure by the Lender to respond to an offer to
prepay made pursuant to this Section 4.27 shall be deemed to
constitute an acceptance of such offer by the Lender.
(e) Any prepayment of the New Xxxxxxx Note pursuant to this
Section 4.27 shall be at one hundred percent (100%) of the principal
amount of the New Xxxxxxx Note, plus the Make Whole Amount determined
for the date of prepayment with respect to such principal amount,
together with interest on such New Xxxxxxx Note accrued to the date of
prepayment, plus any other amounts then due and payable under the New
Xxxxxxx Loan Documents. The prepayment shall be made on the Proposed
Prepayment Date except as provided in subparagraph (f) of this Section
4.27.
(f) The obligation of the Borrower to prepay the New Xxxxxxx
Note pursuant to the offer required by subsection (b) and accepted in
accordance with subsection (d) of this Section 4.27 is subject to the
occurrence of the Change of Control in respect of which such offer and
acceptance shall have been made. In the event that such Change of
Control does not occur on the Proposed Prepayment Date in respect
thereof, the prepayment shall be deferred until, and shall be
recalculated as of, and made on, the date on which such Change of
Control occurs. The Borrower shall keep the Lender reasonably and
timely informed of (i) any such deferral of the date of prepayment,
(ii) the date on which such Change of Control and the prepayment are
expected to occur, and (iii) any determination by the Borrower that
efforts to effect such Change of Control have ceased or been abandoned
(in which case the offers and acceptances made pursuant to this
Section 4.27 in respect of such Change of Control shall be deemed
rescinded).
(g) The offer to prepay the New Xxxxxxx Note pursuant to this
Section 4.27 shall be accompanied by an Officer's Certificate dated
the date of such offer, specifying: (i) the Proposed Prepayment Date;
(ii) that such offer is made pursuant to this Section 4.27; (iii) the
estimated Make Whole Amount due in connection with such prepayment
(calculated as if the date of such notice were the date of the
prepayment), setting forth the details of such computation; (iv) the
interest that would be due on the New Xxxxxxx Note, accrued to the
Proposed Prepayment Date; (v) that the conditions of this Section 4.27
have been fulfilled; and (vi) in reasonable detail, the nature and
date or proposed date of the Change of Control.
SECTION 4.28 E & Y CAUSES OF ACTION. Lender acknowledges that
Borrower has assigned the Debtors' rights and interests in the E & Y
Causes of Action to Credit Agricole pursuant to a written assignment.
Notwithstanding anything to the contrary expressed or implied in such
assignment, the Borrower and its Subsidiaries shall not pay or incur
any material out of pocket cost, expense or other amount with respect
to the E & Y Causes of Action.
SECTION 4.29 INDEPENDENT BOARDS OF DIRECTORS. Borrower shall
maintain at all times a Board of Directors (a) a majority of the
members of which are "Independent" with the meaning that term as used
in Section 3 of the New York Stock Exchange Listed Company Manual, and
(b) none of whom was or is at any time a director or shareholder of
any Debtor or any Subsidiary of any Debtor. For purposes of this
Section 4.29, (a) Xxxxxx Xxxxxx, current chair of the Board of
Directors of Cadiz, shall be deemed independent, notwithstanding the
foregoing sentence, but (b) no other individual who, at the time he or
she becomes a director of Borrower or any of its Subsidiaries, is (or
becomes) or has been a director or officer or other employee of Cadiz
or any of its Affiliates (including Borrower and its Subsidiaries)
shall be considered independent, and (c) no individual who, after
becoming a director of Borrower or any of its Subsidiaries, becomes
(i) a director, officer or other employee of Cadiz or any of its
Affiliates (other than Borrower and its Subsidiaries) or (ii) an
officer or other employee of Borrower or any of its Subsidiaries,
shall be considered independent.
SECTION 4.30 CAPITAL EXPENDITURES. The Borrower shall make
both (a) Capital Expenditures on or with respect to the Collateral in
an aggregate amount of not less than (i) (for each calendar year
through 1998) seventy percent (70%) of the sum of (A) all Capital
Expenditures less (B) Capital Expenditures made on assets other than
the Collateral or computer software in an aggregate amount of up to
Two Hundred Fifty Thousand Dollars ($250,000), less (C) Capital
Expenditures made on computer software up to an aggregate amount (from
the Effective Date through calendar year 1998) of One Million Dollars
($1,000,000), (ii) (for calendar year 1999) seventy percent (70%) of
the sum of (A) all Capital Expenditures less (B) Capital Expenditures
made on assets other than the Collateral in an aggregate amount of up
to Two Hundred Fifty Thousand Dollars ($250,000), and (iii) (for each
calendar year after 1999) seventy five percent (75%) of the sum of (A)
all Capital Expenditures less (B) Capital Expenditures made on assets
other than the Collateral in an aggregate amount of up to Two Hundred
Fifty Thousand Dollars ($250,000); and (b) Permanent Crop Capital
Expenditures in an aggregate amount of not less than the amount
specified for the corresponding calendar year as set forth in Schedule
4.30 hereto, except that such minimum amounts under (a) and (b) above
shall be pro rated for the calendar year during which repayment in
full of the New Xxxxxxx Loan occurs based on the number of days
elapsed during such calendar year.
SECTION 4.31 SWAPS AND SIMILAR ARRANGEMENTS. No Debtor shall
enter into, or otherwise incur, or permit to exist, any obligation in
respect of any interest rate or currency swap, collar, floor or cap or
other similar agreement, whether or not such agreement would be
accounted for as a hedging obligation under GAAP, or whether or not
payments thereunder are to be made periodically or upon the happening
of a contingency.
SECTION 4.32 CERTAIN INSURANCE POLICIES. If, for any reason,
on or before September 28, 1998, (a) Borrower is unable to obtain a
continuation, extension or equivalent replacement of each of the two
(2) insurance policies issued by Aurora National Life Assurance
Company and identified as Policy Nos. C 11634064L and C 11640005L (the
"Aurora Policies") for a term extending until at least one (1) month
after the Maturity Date, or (b) Borrower is able to do so, but (i) the
first (1st) aggregate annual premiums for the Aurora Policies due for
coverage after November 27, 1998 will exceed One Hundred Twenty Five
Thousand Four Hundred and Seventy Two Dollars ($125,472) (the
"Threshold Renewal Premium") and (ii) the average annual increase to
such Threshold Renewal Premium for the remainder of the term of the
New Xxxxxxx Loan will exceed Seventeen Thousand Five Dollars
($17,005), Borrower shall so notify Lender in writing on or before
September 30, 1998, whereupon the following shall occur:
(1) Borrower shall elect, by written notice to Lender delivered
on or before October 30, 1998, either (A) (in lieu of obtaining a
continuation, extension or equivalent replacement of the Aurora
Policies) to pay to the Lender on November 27, 1998 a cash amount
equal to the Threshold Renewal Premium, and on each subsequent
November 27 thereafter a cash amount equal to the amounts set forth in
Schedule 4.32 hereto, or (B) to procure a continuation, extension or
equivalent replacement of the Aurora Policies for such aggregate face
amount as may be obtainable for the annual amounts otherwise payable
by Borrower under (A) above. If, for any reason, Borrower fails to
issue the written notice of election required under this subsection
(1), Borrower shall be deemed to have elected the choice described in
clause (1)(A) above.
(2) Borrower shall cause Aurora National Life Assurance Company
(or any successor thereto) to pay directly to Lender any and all cash
surrender value payable under the Aurora Policies upon any expiration
or termination thereof.
Provided that no Default or Event of Default has occurred
and is continuing, Lender shall credit all payments received by Lender
pursuant to this Section 4.32 against the principal due on the New
Xxxxxxx Loan in the inverse order of maturity thereof (with no
recalculation of the principal amortization schedule).
SECTION 4.33 TITLE INSURANCE COMMITMENT. Borrower shall cause
Chicago Title Insurance Company to perform all its obligations under
the commitment letter referenced in Section 5.1(g) hereof, including,
without limitation, its obligation to issue to Lender the endorsements
and title policy referenced therein and to obtain the reinsurance
referenced therein.
ARTICLE 5
CONDITIONS
SECTION 5.1 LENDER'S CONDITIONS. The Lender's obligation
hereunder to consummate the transactions contemplated hereby shall be,
unless waived in writing by the Lender, subject to the satisfaction of
the following conditions precedent:
(a) Timely and full performance by the Debtors prior to or at
the Effective Date of all of the agreements theretofore to be
performed by them under, pursuant to or contemplated by the Plan or
this Credit Agreement (including, without limitation, all requirements
specified in Article 2 and in Section 4.28 hereof);
(b) The accuracy of the Debtors' respective representations and
warranties contained in the New Xxxxxxx Loan Documents and the
Lender's receipt of (i) an Officer's Certificate to that effect dated
the Effective Date executed by a Responsible Officer of the Borrower
certifying that (A) no Default or Event of Default shall have occurred
and be continuing or shall exist immediately following the Effective
Date; (B) all representations and warranties set forth herein or in an
any other New Xxxxxxx Loan Document (other than those that speak as of
a specific date) are true and correct in all material respects on the
Effective Date as if made on and as of the Effective Date; and (C)
all other conditions precedent set forth in this Article V have been
satisfied; and (ii) an Officer's Certificate of the Chief Executive
Officer and Chief Financial Officer of Cadiz certifying that (A) no
Default or Event of Default with respect to Cadiz or any of its
Subsidiaries (other than Borrower and Borrower's Subsidiaries) shall
have occurred and be continuing or shall exist immediately following
the Effective Date; and (B) all representations and warranties of
Cadiz set forth in the Cadiz Agreement or in any other New Xxxxxxx
Loan Document (other than those that speak as of a specific date)
executed and delivered by Cadiz are true and correct in all material
respects on the Effective Date as if made on and as of the Effective
Date.
(c) The Lender's receipt, at the expense of the Borrower, of
legal opinions, dated the Effective Date, in form and substance
reasonably satisfactory to the Lender, from each of the following:
(i) Xxxxxx & Xxxxxx, as special counsel to the Lender;
(ii) Xxxxxx & Xxxxxxx, as special counsel to Cadiz;
(iii) Xxxxxx & Xxxxxxx, as special counsel to the Borrower;
(iv) Young Xxxxxxxxxx, as special Water Rights counsel to
the Lender; and
(v) Poms, Xxxxx, Xxxxx & Xxxx, as special Patents,
Trademarks and Copyrights counsel to the Lender; and
(vi) Xxxxxxx, Triester & Xxxxx (or other legal counsel
satisfactory to Lender), as legal counsel to Xxxxxx X. Xxxxxxxxx.
(d) The Lender's receipt of (and in its sole and absolute
discretion, complete satisfaction with) each of the New Xxxxxxx Loan
Documents duly executed, acknowledged and delivered to the Lender by
all parties thereto (other than the Lender), and without limiting the
generality of the foregoing, the Borrower shall have executed the New
Xxxxxxx Note in the aggregate amount of the Principal Amount payable
to the Lender, as well as the New Xxxxxxx Security Documents;
(e) The due filing or recordation of such New Xxxxxxx Loan
Documents and such other documents, notices, filings or instruments as
may be necessary or appropriate to establish and perfect, to the
complete satisfaction of the Lender (acting in its sole and absolute
discretion), the Lender's security interest and Lien on the Collateral
with the priority thereof contemplated herein, including, without
limitation, evidence that the Debtors have given all notices to, and
obtained all consents of, third parties, with respect to the security
interests to be created under the New Xxxxxxx Security Documents to
the extent such notice and/or consent is necessary to create, perfect
or maintain such security interests;
(f) The Lender's receipt of (and in its sole and absolute
discretion, complete satisfaction with) (i) evidence that the
insurance contemplated in this Credit Agreement and the New Xxxxxxx
Security Documents is in place; (ii) endorsements of all policies of
insurance required to be maintained under the New Xxxxxxx Loan
Documents, naming the Lender as loss payee or additional insured, as
the case may be; and (iii) evidence that written notice of the
security interest granted to the Lender in such policies of insurance
has been given to the insurers as required to perfect such security
interest under the UCC, and that such perfected security interest has
a first priority with respect to the policies referred to in Section
4.3(b)(xvi) hereof;
(g) The Lender's receipt of (and in its sole and absolute
discretion, complete satisfaction with) four (4) pro forma CLTA Form
110.5 endorsements issued by Chicago Title Insurance Company to Title
Policy Nos. 519396, 32757, D620713 and 6056267 and a pro forma ALTA
Loan Policy (with ALTA Endorsement Form I coverage) re Blythe Ranch,
along with a commitment letter from Chicago Title Insurance Company
substantially in the form and substance of Schedule 5.1(g) hereof with
such reinsurance to be issued, pursuant to ALTA Facultative
Reinsurance Policies, as may be referenced in such letter or otherwise
required by the Lender (acting in its sole and absolute discretion);
(h) In the Lender's sole and absolute discretion, the Lender's
complete satisfaction with the form and substance of the Plan, the
Confirmation Order and the Final Order, and the implementation of the
Plan as contemplated therein in accordance with the terms thereof,
including, without limitation, (i) the termination of the DIP Facility
and all letters of credit, security interests, mortgages and other
Liens issued pursuant thereto or contemplated thereby, (ii) the
satisfaction (or waiver by the Person or Persons entitled to the
benefit thereof) of all conditions precedent to the occurrence of the
Effective Date (including, without limitation, the consummation of
each of the Acquisition and the Merger in accordance with the terms of
the Plan), other than the conditions set forth herein; (iii) Cadiz's
payment in full, as provided in the Plan, of the Three Million Dollars
($3,000,000) in aggregate payments to be made under the Plan to the
holders of Interests in Classes 9 and 10 as defined in the Plan; (iv)
Cadiz's funding of at least Fifteen Million Dollars ($15,000,000) into
the Unsecured Claims Reserve Account or such lesser amount as Lender
may agree to; (v) Cadiz's funding to Borrower, as a Capital
Contribution, of an amount not less than the aggregate amount required
to be paid under the Plan on the Effective Date in respect of Class 6
Claims (as defined in the Plan), which amount shall be free of Liens
of Credit Agricole and any other Person; and (vi) if Borrower has
reached a settlement with LSL Biotechnologies, Inc., documentation
effecting the settlement by Borrower of its disputes with LSL
Biotechnologies, Inc. on terms and conditions providing, among other
things, for the release by LSL Biotechnologies, Inc. of all of its
claims against Borrower and its Subsidiaries.
(i) In the Lender's sole and absolute discretion, the Lender's
complete satisfaction with all proceedings to be taken in connection
with the transactions contemplated by this Credit Agreement and the
other New Xxxxxxx Loan Documents and any documents incident to such
transactions;
(j) The Lender's receipt of (and in its sole and absolute
discretion, complete satisfaction with) all documents or other
evidence which it may reasonably have requested in connection with
such transactions, including, without limitation, those set forth in
Schedule 5.1(j) hereof;
(k) The Lender's receipt of (and in its sole and absolute
discretion, complete satisfaction with): (i) Borrower's written plans
for Capital Expenditures (including, without limitation, as a separate
item, Permanent Crop Capital Expenditures) for the year ended December
31, 1996; and (ii) the Borrower's Crop Development Plan and its
Business Plan (including, without limitation, asset Disposition and
financial projections) for its 1996 Fiscal Year;
(l) (i) The Lender's delivery to Borrower of written
acknowledgement of the Lender's receipt of the New Credit Agricole
Loan Documents and its complete satisfaction (acting in its sole and
absolute discretion) with the terms and provisions of the New Credit
Agricole Obligations and the New Credit Agricole Loan Documents,
subject in any case to Section 3.17 hereof, and (ii) the Lender's
receipt of a certificate from Credit Agricole, in form and substance
reasonably satisfactory to Lender, confirming the satisfaction of, or
Credit Agricole's waiver of, all conditions precedent to the full
effectiveness of the New Credit Agricole Credit Agreement;
(m) The Equity Infusion shall have been made upon the Effective
Date, and no Material Adverse Event shall have occurred since December
31, 1995;
(n) (i) The Lender's and Credit Agricole's mutual execution and
delivery of the New Intercreditor Agreement, (ii) the recordations of
Subordination Agreements, all of the foregoing completely satisfactory
to the Lender acting in the Lender's sole and absolute discretion;
(o) The Lender's receipt of the Xxxxxxx Cash Payment and all
adequate protection and other payments owed to the Lender through and
on the Effective Date by the Borrower and any other Debtors,
including, without limitation, all net proceeds from the pre Effective
Date sale of any Collateral, except for the fifteen percent (15%)
portion of such net proceeds payable to Credit Agricole for sales of
certain of the so called Xxxxxxx Properties.
(p) Lender shall have received pro forma (i) balance sheets of
Borrower and its Subsidiaries prepared on a Consolidated Basis and a
consolidating basis, and (ii) a balance sheet of Cadiz and its
Subsidiaries (including Borrower and Borrower's Subsidiaries), in each
case (A) prepared on a Consolidated Basis and a purchase accounting
basis as of the Effective Date and immediately after giving effect to
the consummation of the Plan and of all transactions contemplated by
the Plan to be consummated thereon (including, without limitation, the
Acquisition and the Merger, all Capital Contributions to be made to
Borrower by Cadiz on the Effective Date pursuant to the Plan, all
payments to be made by the Borrower and its Subsidiaries or Cadiz on
the Effective Date pursuant to the Plan, the payment of any tax
liability arising by reason of, or otherwise in connection with, the
Acquisition, and the restructuring of the pre petition claims of
Lender and Credit Agricole as contemplated hereby; and (B) excluding
(I) any amounts remaining in the bankruptcy estates of the Borrower
and its Subsidiaries and (II) any obligations that remain obligations
of such estates, rather than of Borrower or any Subsidiary of
Borrower; in each case (i) and (ii), together with a certification by
the Chief Executive Officer and Chief Financial Officer of Borrower or
Cadiz, as the case may be, to the effect that such pro forma balance
sheets (x) are reasonably stated in light of the actual (to the extent
available) or reasonably anticipated (to the extent that actual
results are not available) yields and prices of crops as of the
Effective Date and (y) have been prepared on a purchase accounting
basis in accordance with GAAP, and have been reviewed by Price
Waterhouse LLP, in connection with such accountants' standard
procedures relating to the preparation of audited financial statements
for Cadiz for the fiscal year ending March 31, 1997, and that such
accountants have orally informed such officers that such pro forma
balance sheets appear to have been properly prepared;
(q) The Lender's complete satisfaction (acting in its sole and
absolute discretion) that (i) no Material Adverse Event exists on (or
shall exist immediately after) the Effective Date, (ii) all licenses
that the Borrower and its Subsidiaries may need under PACA or the
California Food and Agriculture Code, including, without limitation,
"Producer Dealer" and "Processor" licenses issued by the California
Department of Food and Agriculture, to operate their businesses in
accordance with Section 4.6 hereof and otherwise to comply with this
Credit Agreement are in full force and effect, including, without
limitation, a written commitment from the United States Department of
Agriculture, in form and substance acceptable to Lender, to issue to
Borrower the license required under PACA to permit the marketing by
Borrower of produce on behalf of Growers; and (iii) no Default or
Event of Default shall exist immediately after the Effective Date.
(r) The Borrower's payment in full of all costs and expenses
arising out of or in connection with the New Xxxxxxx Loan Documents
and/or the consummation of the transactions contemplated hereby on the
Effective Date, including, without limitation, the out of pocket costs
of the Lender for attorneys' or consultants' fees;
(s) The Lender's complete satisfaction (acting in its sole and
absolute discretion) with (i) the terms and conditions of the Cadiz
Agreement, the Cadiz Services Agreement, the Cadiz Lease, the Tax
Sharing Agreement and any agreement that Cadiz and any Debtor may
enter into on or before the Effective Date, and (ii) the Borrower's
compliance with Section 4.3(b)(xvi);
(t) The Lender's receipt of (and in its sole and absolute
discretion, complete satisfaction with) written evidence that (i) each
of Cooperative Centrale Raiffeisen Boerenleenbank B.A. and Xxxxx
Xxxxxxxxx & Co., Limited has consented to Cadiz's performance of the
actions to be taken by Cadiz or the Borrower (as the case may be) as
contemplated by the Plan, the New Xxxxxxx Loan Documents and the New
Credit Agricole Loan Documents, and (ii) all conditions to the
Effective Date set forth in the New Credit Agricole Credit Agreement
have been fulfilled to Credit Agricole's satisfaction or waived by
Credit Agricole;
(u) Lender's receipt of evidence, in form and substance
reasonably acceptable to it, that as of July 31, 1996 and determined
on a Consolidated Basis as if the Effective Date had occurred on such
date (and, without limitation, reflecting Borrower's expenditure of
all amounts required to obtain all bonds necessary to secure the
issuance of all licenses, under PACA or other applicable Law, required
for the conduct of Borrower's business), the total of all (i) cash
(including all funds held in deposit or other accounts) of Debtors and
their Subsidiaries and (ii) cash equivalent investments of Debtors and
their Subsidiaries that qualify as Permitted Investments under this
Credit Agreement was at least Five Million Dollars ($5,000,000);
(v) The Lender's receipt of (and in its sole and absolute
discretion, satisfaction with) the written releases necessary to
effect the releases of Lender set forth in Schedule 5.1(v) hereof;
(w) An agreement setting forth the Minimum Release Price
Schedule shall have been executed and delivered by Borrower, Lender
and Credit Agricole;
(x) Borrower shall have delivered to Lender the set of policies
and procedures, in form and substance acceptable to Lender, that will
apply initially to Borrower's making of advances to Growers located
outside the United States of America, including, among other things,
separate aggregate dollar limits on cultural, packing and crossing
advances.
(y) Lender shall have received copies, certified by Borrower as
true and complete copies of the originals thereof, of each assessment,
report, study or other investigation, produced at any time after
December 8, 1989 and prior to the Effective Date, regarding the
actual, alleged or possible production, use, presence, treatment,
storage, transportation, disposal, Release or threatened Release of
any Hazardous Materials at, on or about any real property or personal
property currently or formerly owned, leased or operated by Borrower
or any Subsidiary of Borrower.
(z) Lender shall have received the Water Rights Plans referred
to in Section 4(e) of the Cadiz Agreement.
ARTICLE 6
EVENTS OF DEFAULTS
SECTION 6.1 EVENTS OF DEFAULTS. The occurrence of any one or
more of the following events, regardless of the reason therefor, shall
constitute an "Event of Default" hereunder:
(a)(i) The Borrower shall fail to pay when due any principal due
on the New Xxxxxxx Loan or the New Xxxxxxx Note, whether at the due
date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise, or (ii) any Debtor shall fail to
pay on the due date thereof any other amounts owed by it (including,
without limitation, any interest, Mandatory Prepayment, Make Whole
Amount, fees, costs or expenses) under the New Xxxxxxx Note or the
other New Xxxxxxx Loan Documents or (if no due date is specified)
within ten (10) days after written demand therefor; or
(b) The Borrower shall fail to observe or perform any of its
covenants or obligations contained in Sections 4.1(f), 4.1(i)(i),
4.3(b)(ix), 4.3(b)(xi), 4.3(b)(xii), 4.3(b)(xvi), 4.4, 4.6 (except
subsection (d) thereof), 4.7, 4.9, 4.11, 4.12, 4.15, 4.17, 4.18, 4.24,
4.25, 4.26, 4.27, 4.28, 4.29, 4.30, 4.31 or 4.32 inclusive; or
(c) Any representation, warranty, certification or statement
made in any of the New Xxxxxxx Loan Documents or in any certificate,
financial statement or other document delivered pursuant thereto shall
have been incorrect in any material respect when made (or deemed
made); or
(d) Any "default" or "event of default" under any New Credit
Agricole Document, as in effect on the Effective Date (and
irrespective of any waivers, consents, amendments, supplements or
other modifications becoming effective thereafter except to the extent
expressly consented to by the Lender), shall occur, or any default
shall occur under any other Debt of the Borrower, if such other Debt
individually or in the aggregate exceeds Two Hundred and Fifty
Thousand Dollars ($250,000);
(e) Except to the extent covered elsewhere in this Section 6.1,
any Debtor shall fail to observe or perform any of its covenants or
agreements contained in any of the New Xxxxxxx Loan Documents for
fifteen (15) days after the earlier of (i) written notice from the
Lender, and (ii) a Responsible Officer of any Debtor obtains knowledge
of such failure; or
(f) Any Debtor or Cadiz shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or thereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay, or shall
admit in writing its general inability to pay, its debts as they
become due, or shall take any corporate action to authorize any of the
foregoing; or
(g) An involuntary case or other proceeding shall be commenced
against any Debtor or Cadiz seeking liquidation, reorganization or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed for a period of sixty (60) days; or an order for relief shall
be entered against any Debtor or Cadiz under the federal bankruptcy
laws as now or hereafter in effect; or
(h) Any judgment or order shall be rendered against any Debtor
for the payment of money in excess of Two Hundred and Fifty Thousand
Dollars ($250,000) or which otherwise constitutes a Material Adverse
Event, and there shall be any period of thirty (30) consecutive days
during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(i) The failure of the Lender for any reason to hold and have a
perfected security interest and Lien on the Collateral with an
aggregate fair market value exceeding Twenty Five Thousand Dollars
($25,000) with the priority set forth herein for any reason
whatsoever, except Lender's voluntary release of such security
interest and Lien or Lender's failure to make a timely filing of a
required UCC 2 Continuation Statement, or any Debtor or Cadiz shall so
assert in writing; or
(j) The filing or other commencement by Borrower, Cadiz or any
Subsidiary of either of them of any adversary proceeding against the
Lender or any of its Affiliates in respect of any matter arising out
of or related to the New Xxxxxxx Loan Documents or the transactions
contemplated by the New Xxxxxxx Loan Documents; or
(k) Any material provision of any of the New Xxxxxxx Loan
Documents or of the Cadiz Agreement shall, for any reason, cease to be
valid, binding or enforceable as to any signatory thereof (other than
the Lender), or any such signatory shall so assert in writing or shall
deny that it has any further liability or obligation thereunder;
(l) The failure by any Debtor to hold or obtain, or any loss,
termination, expiration or suspension of, any business or other
license, permit or other authorization that is issued by a
Governmental Body and that is material to the continued ability of any
Debtor to operate its business in an efficient or profitable manner
consistent with Section 4.6 hereof, including, without limitation, any
post Effective Date failure of the Debtors to keep in full force and
effect the licenses described in Section 5.01(p) hereof; or
(m) Cadiz shall fail to pay any amounts owed by Cadiz under the
Cadiz Agreement to the Lender or to perform any other obligations owed
by it thereunder to the Lender within two (2) Business Days of the due
date thereof; or
(n) Any of the following events occur or exist with respect to
Borrower or any ERISA Affiliate: (i) any Prohibited Transaction
involving any ERISA Plan; (ii) any Reportable Event with respect to
any ERISA Plan; (iii) the filing under Section 4041 of ERISA of a
notice of intent to terminate any ERISA Plan or the termination of any
ERISA Plan; (iv) any event or circumstance that might constitute
grounds entitling the PBGC to institute proceedings under Section 4042
of ERISA for the termination of, or for the appointment of a trustee
to administer, any ERISA Plan, or the institution by the PBGC of any
such proceedings; (v) the complete or partial withdrawal under Section
4201 or 4204 of ERISA from a Multiemployer Plan or the reorganization,
insolvency, or termination of a Multiemployer Plan; and in each any
such case, such event or condition, together with all other events or
conditions, if any, could in the opinion of Lender subject Borrower to
any tax, penalty, or other liability to an ERISA Plan, a Multiemployer
Plan, the PBGC, or otherwise (or any combination thereof) which in the
aggregate exceed or may exceed Fifty Thousand Dollars ($50,000.00); or
(o) Any attachment, execution, garnishment, tax lien or any
other Lien shall be issued against any property of Borrower or Cadiz
or any of their respective Subsidiaries for an amount in excess of Two
Hundred and Fifty Thousand Dollars ($250,000) and shall not be
vacated, discharged, satisfied or stayed or bonded pending appeal
within thirty (30) days after such issuance; or
(p) Any amendment, modification, waiver or supplement of the
Cadiz Agreement (as defined in the New Credit Agricole Credit
Agreement); or
(q) The failure of the Lender to receive Net Sales Proceeds
aggregating at least Five Million Dollars ($5,000,000) on or before the
third (3d) anniversary of the Effective Date from the sale of Tier B Pre
Identified Assets; or
(r) The imposition by Credit Agricole of any material
restrictions on the Cash Account (as defined in the New Credit Agricole
Credit Agreement) or on the right of the Borrower to withdraw the monies
therein for any use not in contravention of the New Credit Agricole Loan
Documents; or
(s) Borrower shall fail to observe or perform its covenants
under Section 4.6(d) hereof for thirty (30) days after written notice of
such failure from the Lender.
SECTION 6.2 ACCELERATION. Upon the occurrence and continuance of
any of the Events of Default set forth in subsections (f) or (g) of
Section 6.1, the entire New Xxxxxxx Loan shall automatically mature and
become due and payable, together with interest accrued thereon, plus any
Make Whole Amount or other premium, without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived. Upon
the occurrence and continuance of any of the Events of Default set forth
in any subsection of Section 6.1 other than subsections (f) or (g), the
Lender may at its option, by written notice or notices to the Borrower,
declare the entire New Xxxxxxx Loan to be due and payable, together with
interest accrued thereon, plus any Make Whole Amount or other premium,
without presentment, demand, protest or further notice of any kind, all
of which are hereby expressly waived. Upon any acceleration of the New
Xxxxxxx Loan under this Section 6.2, there shall become due and payable
(and the Borrower shall pay), as compensation to the Lender for the loss
of its investment opportunity and not as a penalty, a Make Whole Amount.
The Borrower hereby acknowledges that its agreement to pay the Make Whole
Amount if the New Xxxxxxx Loan is accelerated under this Section 6.2 was
separately negotiated with the Lender, that the economic value of the
various elements of this waiver and agreement was discussed, that the
consideration given by the Borrower for the New Xxxxxxx Loan was adjusted
to reflect the specific waiver and agreement negotiated between the
Parties and contained herein, and that this waiver is intended to comply
with California Civil Code Section 2954.10.
BORROWER'S INITIALS __________
SECTION 6.3 REMEDIES UPON AN EVENT OF DEFAULT. Upon the
occurrence of an Event of Default hereunder and the acceleration of the
New Xxxxxxx Loan pursuant to Section 6.2 hereof, the Lender may, at its
option, and in addition to all other rights and remedies available to the
Lender, without further notice of the Borrower, do any one or more of the
following:
(i) Proceed to protect and enforce the rights, privileges and
remedies granted to the Lender by this Credit Agreement or any other New
Xxxxxxx Loan Document by such judicial proceedings as the Lender shall
deem necessary or appropriate, either at law, in equity, in bankruptcy or
otherwise, whether for specific enforcement of any covenant or agreement
contained in the New Xxxxxxx Loan Documents, or in aid of the exercise of
any right, power, privilege or remedy therein or herein granted;
(ii) Foreclose or otherwise enforce the Lender's security
interest or Lien on the Collateral in any manner permitted by Law, or
provided for in any New Xxxxxxx Loan Document, and exercise at any time
all rights and remedies of a secured party under the UCC or otherwise for
any foreclosure of the Collateral under any judgment or decree in any
judicial proceeding, or to enforce any other legal or equitable right or
remedy granted or otherwise available to the Lender hereunder, under the
other New Xxxxxxx Loan Documents, or at law or in equity;
(iii) Enter onto, and take possession of, any Collateral with or
without judicial action;
(iv) Prior to the Disposition of the Collateral, store,
process, repair or recondition it or otherwise prepare it for Disposition
in any manner, and to the extent the Lender deems appropriate and in
connection with such preparation and Disposition, without charge, use any
Patents, Trademarks and Copyrights, technical process, permit, approval,
license, consent or governmental approval used or held by the Borrower or
any other Debtor;
(v) Demand, xxx for, collect or receive any money or property
at any time payable to or receivable by the Borrower on account of or in
exchange for any part of the Collateral;
(vi) Secure the appointment of a receiver without notice to the
Borrower;
(vii) Make a Disposition of any Collateral at one or more public
or private sales, whether or not such Collateral is present at the place
of sale, without assumption of any credit risk, for cash or credit or
future delivery, on such terms and in such manner as the Lender may
determine in its sole and absolute discretion and in light of the
Lender's own best interest, with or without any previous demand on (or
notice to) the Borrower or advertisement of any such sale or other
Disposition, and for the aforesaid purposes, all notice of sale,
advertisement and demand and any right or equity of redemption otherwise
required by, or available to the Borrower under Law, are hereby waived by
the Borrower to the fullest extent permitted by Law; the power of sale
hereunder shall not be exhausted by one or more sales, and the Lender may
from time to time adjourn any sale to be made hereunder; the Lender or
any other Person may be the purchaser of any or all of the Collateral so
sold and thereafter hold the same absolutely free from any claim or right
of whatsoever kind, including any equity of redemption, of the Borrower;
to the extent permitted by Law, the Borrower waives all claims, damages
and demands against the Lender arising out of the repossession, retention
or Disposition of the Collateral, except for claims based on the gross
negligence or wilful misconduct of the Lender; and
(viii) Take any other action and seek any other remedy available
to a secured party under Law.
The enumeration of the foregoing rights and remedies is not
intended to be exhaustive, and the exercise of any right or remedy shall
not preclude the exercise of any other rights or remedies, all of which
shall be cumulative and not alternative.
SECTION 6.4 RESCISSION OF ACCELERATION. If (a) the outstanding
principal amount of the New Xxxxxxx Note shall have become immediately
due and payable, (b) no judgment or decree for any amounts so becoming
due and payable shall have been entered, (c) all amounts of principal,
Make Whole Amount, if any, and interest which shall have become due and
payable in respect of all of the New Xxxxxxx Note (other than pursuant to
any acceleration) shall have been paid in full, including interest on all
overdue principal, the Make Whole Amount, if any, and (to the extent
permitted by applicable Law) interest at the applicable rate or rates
provided for in the Credit Agreement, (d) the Lender shall have been paid
an amount sufficient to cover all costs and expenses of collection
incurred by or on behalf of the Lender (including, without limitation,
counsel fees and expenses), (e) all other obligations then due and owing
by any Debtor shall have been paid in full, and (f) every other Event of
Default shall have been remedied or waived to the satisfaction of the
Lender (acting in its sole and absolute discretion), then the Lender may,
by written notice or notices to the Borrower, rescind and annul any
acceleration of the New Xxxxxxx Loan and its consequences, but no such
rescission and annulment shall extend to, or affect, any subsequent
Default or Event of Default or impair any right consequent thereon, or
require the Lender to repay any interest, principal or Make Whole Amount
actually paid as a result of such acceleration.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 NOTICES. All notices, requests, demands and other
communications to any Party under this Credit Agreement shall be in
writing and shall be given to such Party at its address or telecopy
number set forth in Schedule 7.1 hereto or such other address or telecopy
number as such Party may hereafter specify for the purpose of notice to
the Lender and the Borrower. Each such notice, request or other
communication shall be effective if given (i) by telecopy, when such
telecopy is transmitted to the telecopy number specified pursuant to this
Section 7.1 and a confirmation report is produced by the sender's
telecopier, (ii) by registered or certified mail, return receipt
requested, seventy two (72) hours after such communication is deposited
in the U.S. mails with postage prepaid, addressed as aforesaid, or (iii)
by any other means (including, without limitation, reputable overnight
courier service) when delivered at the address specified pursuant to this
Section 7.1.
SECTION 7.2 NO WAIVERS. No failure or delay by the Lender in
exercising any right, power or privilege under any New Xxxxxxx Loan
Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof
or the exercise of any other right, power or privilege. The rights and
remedies provided in the New Xxxxxxx Loan Documents shall be cumulative
and not exclusive of any rights or remedies provided by law.
SECTION 7.3 EXPENSES; DOCUMENTARY TAXES; INDEMNIFICATION.
(a) The Borrower shall pay (to the extent not included in the
Principal Amount as of the Effective Date) all the Borrower's and the
Lender's out of pocket costs, fees and expenses, including, without
limitation, search fees; filing or recording taxes, fees and other
charges; appraisal fees; title or other insurance fees; escrow charges;
travel expenses; all reasonable fees, disbursements, and other charges of
accountants, legal counsel, appraisers and other experts, consultants and
professional advisors to the Lender (including, without limitation,
Xxxxxxx Xxxxxx Incorporated, Xxxxxx & Associates, Coopers & Xxxxxxx,
Xxxxxx & Xxxxxx Incorporated, local counsel, foreign counsel,
environmental counsel, special Patents, Trademarks and Copyrights counsel
and special Water Rights counsel) arising out of or in connection with
any of the following: (i) the Lender's consideration, negotiation,
documentation, consummation, administration, monitoring or enforcement of
this Credit Agreement and the other New Xxxxxxx Loan Documents
(including, without limitation, such on going review or inspection of the
Condition of the Debtors or the Collateral under Section 4.5 or otherwise
as the Lender shall deem necessary); (ii) any waiver or consent or full
or partial release of security thereunder or any amendment thereof or any
Default or Event of Default or alleged Default or Event of Default
thereunder; and (iii) any collection and other enforcement proceedings
resulting therefrom. All amounts payable by the Borrower on the
Effective Date pursuant to this Section 7.3 shall be paid by the Borrower
within ten (10) days after written demand is made by the Lender therefor.
(b) In addition to the payment of expenses pursuant to Section
7.3(a), whether or not the transactions contemplated hereby shall be
consummated, the Borrower agrees to defend (with counsel reasonably
acceptable to the Lender), indemnify, pay and hold harmless the Lender
and the officers, directors, employees, representatives, agents and
Affiliates of the Lender (collectively, the "Indemnitees") from and
against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, expenses and
disbursements of any kind or nature whatsoever (including, without
limitation, the reasonable fees and disbursements of counsel for such
Indemnitees) in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not
any such Indemnitee shall be designated as a party (or a potential party
thereto), whether direct, indirect or consequential and whether based on
any Laws (including, without limitation, securities and commercial laws,
statutes, rules or regulations and Environmental Laws), or equitable
cause or on contract or otherwise, that may be imposed on, incurred by,
or asserted against any such Indemnitee, in any manner relating to or
arising out of the Collateral, this Credit Agreement or any other New
Xxxxxxx Loan Document or the transactions contemplated hereby or thereby,
including, without limitation, any transfer taxes, documentary taxes,
assessment or charges (other than income and franchise taxes based on or
measured by the net income of the Lender) made by any Governmental Body
by reason of the execution and delivery of the New Xxxxxxx Loan Documents
or the consummation of any of the transactions contemplated thereby, or
Lender's agreement to make the New Xxxxxxx Loan hereunder (collectively,
the "Indemnified Liabilities"); provided, however, that the Borrower
shall not have any obligation to any Indemnitee hereunder with respect to
any Indemnified Liabilities to the extent such Indemnified Liabilities
arise solely from the gross negligence or willful misconduct of that
Indemnitee as determined by a final judgment of a court of competent
jurisdiction. To the extent that the undertaking to defend, indemnify,
pay and hold harmless set forth in the preceding sentence may be
determined by a final judgment of a court of competent jurisdiction to be
unenforceable because it is violative of any Law or public policy, the
Borrower shall contribute the maximum portion that the Borrower is
permitted to pay and satisfy under applicable Law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees
or any of them. Neither the making of the New Xxxxxxx Loan hereunder nor
the exercise of the rights or duties of the Lender shall impose, or be
deemed to impose, on the Lender any liability to the Borrower or any
other Person and the Lender shall not be deemed to be in control of the
operations of the Borrower as a result of any action taken pursuant to or
in connection with this Credit Agreement or other New Xxxxxxx Loan
Document.
(c) In furtherance and not in limitation of the foregoing, the
indemnification, defense and reimbursement obligations of the Borrower
contained in this Section 7.3 shall include, without limitation, and
regardless of when discovered or incurred, all liabilities, losses,
damages (including, without limitation, punitive and consequential
damages), costs and expenses incurred by or alleged or assessed against
the Lender as a result of any claim, order, directive, request for
information, action, allegation, suit, proceeding, loss, cost, damage,
liability, deficiency, fine, penalty, punitive or consequential damage or
expense (including reasonable attorneys' and consultants' fees,
investigation and laboratory fees, court costs and litigation expenses),
directly or indirectly resulting from, arising out of, or based upon (i)
the presence, Release, use, handling, processing, recycling, treatment,
manufacture, installation, generation, discharge, storage or disposal, at
any time, of any Hazardous Materials at, on, under, in, from or about, or
migrating to or from, any Collateral, or the transportation or disposal
of any such Hazardous Materials to or from any Collateral, or (ii) the
violation or alleged violation by any Debtor of any Law, Environmental
Law, permit, judgment or license relating to the presence, handling,
processing, recycling, treatment, use, generation, manufacture,
installation, Release, discharge, storage or disposal, at any time, of
Hazardous Materials at, on, under, in, from or about, or migrating to or
from any Collateral, or the transportation or disposal of any such
Hazardous Materials to or from any Collateral, which indemnity shall
include, without limitation (A) any damage, liability, fine, penalty,
punitive damage, cost or expense arising from or out of any claim,
action, allegation, suit or proceeding for personal injury (including
sickness, disease, death, pain or suffering), tangible or intangible
property damage, compensation for lost wages, business income, profits or
other economic loss, damage to the natural resources or the environment,
nuisance, pollution, contamination, leak, spill, Release or other effect
on the environment, and (B) the cost of any required or necessary repair,
investigation, cleanup, treatment, remediation or detoxification of the
Collateral and the preparation and implementation of any closure,
disposal, remedial or other required reports or actions in connection
with the Collateral. To the extent that the undertaking to indemnify,
pay and hold harmless set forth in the preceding sentence shall be
determined in a final judgment of a court of competent jurisdiction to be
unenforceable under Law, the Borrower shall contribute the maximum
portion that it is permitted to pay and satisfy under the applicable Law,
to the payment and satisfaction of all indemnified liabilities incurred
by the Lender.
(d) The Borrower, for itself and on behalf of its successors and
assigns, hereby waives, releases and forever discharges any now existing
or hereafter created or arising right or claim against the Lender and its
assigns for contribution, reimbursement, indemnity or other similar
rights against the Lender and its successors and assigns in any way
related to any Hazardous Materials at, on, under, in, from or about, or
migrating to or from, any Collateral, or the transportation or disposal
of any such Hazardous Materials to or from any Collateral, including,
without limitation, any right to contribution that may exist in the
Borrower's favor pursuant to CERCLA or any other similar Law or
Environmental Law.
(e) The Borrower hereby acknowledges and agrees that (i) the Lender
is not now, and has not ever been, in control of the Collateral or of the
Borrower's affairs; and (ii) the Lender does not have the capacity to
influence the Borrower's conduct with respect to the ownership, operation
or management of the Collateral.
SECTION 7.4 AMENDMENTS AND WAIVERS. Any provision of the New
Xxxxxxx Loan Documents may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by both the Debtor
signatory thereto and the Lender.
SECTION 7.5 SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
This Credit Agreement shall be binding upon, and inure to the
benefit of, the Parties hereto and their respective successors and
assigns, except that the Borrower shall not assign or transfer any of its
rights or obligations under this Credit Agreement without the prior
written consent of the Lender, which consent the Lender may deny,
withhold or delay in the Lender's sole and absolute discretion.
SECTION 7.6 GOVERNING LAW; JURISDICTION; WAIVER OF JURY TRIAL.
(a) THIS CREDIT AGREEMENT, THE NEW XXXXXXX NOTE AND ANY OTHER NEW
XXXXXXX LOAN DOCUMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH,
THE LAWS OF THE STATE OF CALIFORNIA (WITHOUT REGARD
TO ANY PRINCIPLES OF CONFLICTS OF LAW).
(b) THE BORROWER HEREBY CONSENTS AND SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF ALL FEDERAL AND STATE COURTS IN THE STATE OF
CALIFORNIA FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR
RELATING TO THE NEW XXXXXXX LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY. EACH OF THE BORROWER AND THE LENDER AGREES THAT
SUCH COURTS SHALL HAVE JURISDICTION FOR ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO ANY NEW XXXXXXX LOAN DOCUMENT. EACH OF THE
BORROWER AND THE LENDER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO THE RESPECTIVE PARTY AT ITS ADDRESS FOR NOTICES PURSUANT
TO SECTION 7.1 IN ACCORDANCE WITH THE RULES OF THE COURT. NOTHING
HEREIN SHALL ADVERSELY AFFECT THE RIGHT OF THE LENDER TO SERVE PROCESS
IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS
OR OTHERWISE PROCEED AGAINST THE BORROWER OR THE COLLATERAL IN ANY
OTHER JURISDICTION.
(c) EACH PARTY HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER
THIS CREDIT AGREEMENT OR ANY OTHER NEW XXXXXXX LOAN DOCUMENT OR
INSTRUMENT ATTACHED HERETO OR THERETO, REFERRED TO HEREIN OR THEREIN
OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR (ii) IN ANY WAY
CONNECTED HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN
EACH CASE WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND EACH
PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT EACH PARTY TO THIS CREDIT AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY GOVERNMENTAL BODY AS
WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF
THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY. THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE LENDER MAKING THE NEW XXXXXXX LOAN TO THE
BORROWER.
LENDER'S INITIALS: ; BORROWER'S INITIALS: .
SECTION 7.7 EFFECTIVENESS. In addition to any other
preconditions to effectiveness hereunder, this Credit Agreement shall
become effective when the Lender shall have received counterparts
hereof signed by the Parties hereto.
SECTION 7.8 COLLATERAL. The security interests and Liens
created by this Credit Agreement in the Collateral shall be and remain
valid and perfected without the necessity that financing statements be
filed, any deed of trust be recorded or any other action be taken
under applicable Law to perfect the security interests or Liens
granted hereby or thereby.
SECTION 7.9 INDEPENDENCE OF COVENANTS. All covenants of the
Borrower hereunder shall be given independent effect so that, if a
particular action or condition is prohibited by any such covenants,
the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid
the occurrence or continuance of a Default or Event of Default if such
action is taken or such condition exists.
SECTION 7.10 SURVIVAL. All covenants, agreements,
representations and warranties made by the Borrower in this Credit
Agreement and in any certificates or other documents delivered
pursuant to this Credit Agreement shall survive the making of the New
Xxxxxxx Loan and the execution and delivery of the New Xxxxxxx Note,
and shall continue in full force and effect until the New Xxxxxxx Loan
in its entirety is repaid in full. All such covenants, agreements,
representations and warranties shall be binding upon any successors
and assigns of the Borrower.
SECTION 7.11 INCORPORATIONS; CAPTIONS. The preamble, recitals,
schedules and exhibits hereto are hereby incorporated into this Credit
Agreement and made a part hereof, but the table of contents, captions
and section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Credit Agreement.
SECTION 7.12 INVESTIGATION. Notwithstanding any past, present
or future right of the Lender to investigate the affairs of any Debtor
and notwithstanding any past, present or future knowledge of facts
determined or determinable by the Lender pursuant to such
investigation or right of investigation, the Lender has the right to
rely fully upon the representations, warranties, covenants and
agreements now or hereafter made by the Debtors under (or pursuant to)
any of the New Xxxxxxx Loan Documents.
SECTION 7.13 TIME IS OF THE ESSENCE. Time is of the essence of
this Credit Agreement.
SECTION 7.14 PRIOR UNDERSTANDINGS. This Credit Agreement
supersedes all prior understandings and agreements (whether written,
oral or otherwise), and constitutes the entire agreement between the
Parties hereto relating to the subject matter hereof and the
transactions provided for herein.
SECTION 7.15 FAIR CONSTRUCTION. The terms of this Credit
Agreement and the other New Xxxxxxx Loan Documents have been
negotiated by the Parties hereto, and the language used in this Credit
Agreement and the other New Xxxxxxx Loan Documents shall be deemed to
be the language chosen by the Parties hereto to express their mutual
intent. This Credit Agreement and the other New Xxxxxxx Loan
Documents shall be construed without regard to any presumption or rule
requiring construction against the Party causing such instrument or
any portion thereof to be drafted, or in favor of the Party receiving
a particular benefit under the same. Without limiting the generality
of the foregoing, this Credit Agreement and the other New Xxxxxxx Loan
Documents shall be construed without regard to, or aid of, California
Civil Code Section 1654 or California Code of Civil Procedure Section
1864, and shall not be construed against the Lender because of the
Lender's involvement in their preparation or drafting.
SECTION 7.16 LENDER BORROWER RELATIONSHIP. Notwithstanding any
provision of this Credit Agreement or any document or transaction
contemplated hereby to the contrary: (a) the relationship between
the Lender on the one hand and the Borrower on the other in connection
with this Credit Agreement and the other New Xxxxxxx Loan Documents is
intended to be, and the Parties specifically agree that it is, limited
to the relationship of a lender to a borrower in a commercial loan
transaction between sophisticated commercial entities dealing with
each other on an arm's length basis, and (b) the Lender is not
intended to be, and the Parties specifically agree that Lender is not,
by virtue of this Credit Agreement and the other New Xxxxxxx Loan
Documents or the transactions contemplated hereby or thereby, a
partner, joint venturer, fiduciary, quasi fiduciary, alter ego,
manager, shareholder, controlling person or other business associate
or participant of any kind of the Borrower, and the Lender intends to
assume no such status or any duties, obligations or limitations
associated therewith.
SECTION 7.17 LENDER AS ATTORNEY IN FACT.
(a) The Borrower hereby appoints the Lender as attorney in fact
for the Borrower, with full power of substitution, for the purposes of
carrying out the provisions of this Credit Agreement and the other New
Xxxxxxx Loan Documents and taking any action and executing any
instrument and obtaining any governmental consent or approval that the
Lender may deem necessary or desirable for the purposes of carrying
out the provisions hereof or thereof. Without limiting the generality
of the foregoing, the Borrower hereby gives the Lender the power and
right, in the name and on behalf of the Borrower, to do any and all of
the following: (i) to ask or make demand for, collect, receive
payment of, and receipt for, all moneys, claims, and other amounts due
at any time in respect of, or arising out of, any Collateral; (ii) to
commence and prosecute any suits, actions, or proceedings at law or in
equity in any court of competent jurisdiction to collect all or part
of any Collateral and to enforce any other right with respect to any
Collateral; (iii) to defend any suit, action, or proceeding brought
against the Borrower with respect to any Collateral; and (iv)
generally, to sell, transfer, pledge, and make any agreement with
respect to, or otherwise deal with, any of the Collateral as fully and
completely as though the Lender were the absolute owner thereof for
all purposes, and to do, at the Lender's discretion and the Borrower's
expense, at any time or from time to time, all acts and things which
the Lender deems necessary to protect, preserve, or realize upon the
Collateral, all as fully and effectively as the Borrower might do.
(b) The Borrower also authorizes the Lender at any time and from
time to time to execute any endorsements, assignments, or other
instruments of conveyance or transfer with respect to the Collateral
that the Lender deems necessary or desirable in order to give effect
to the purposes of this Credit Agreement and the other New Xxxxxxx
Loan Documents, and to make inquiries of third parties regarding the
status of the Collateral. By execution and delivery of this Credit
Agreement and the other New Xxxxxxx Loan Documents, the Borrower
hereby authorizes each Person obligated (or otherwise having
information relating to) any Collateral to provide to the Lender
copies of the monthly installments or other information relating
thereto and otherwise to respond to such inquiries of the Lender.
(c) The Borrower hereby ratifies all that said attorney(s) shall
lawfully do or cause to be done by virtue hereof. Such powers, being
coupled with an interest, are irrevocable while the New Xxxxxxx Loan
or any other amount payable by the Borrower under any of the New
Xxxxxxx Loan Documents shall remain unpaid, and may be exercised at
any time and from time to time by any employee or representative of
the Lender.
(d) The powers conferred on the Lender under this Section 7.17
are solely to protect the Lender's interest in the Collateral and
shall not impose any duty upon the Lender to exercise any such rights
and powers except to the extent required by, and in accordance with
such standards of conduct as would be applicable under, the UCC. The
Lender shall have no obligation to make any payment, and shall have no
liability for payment or non payment, of any expenses or obligations
of the Borrower.
SECTION 7.18 REVIVAL OF OBLIGATIONS. To the extent that the
Borrower makes a payment or payments to the Lender or the Lender
enforces its security interests, or the Lender exercises any rights of
set off, and such payment or payments or the proceeds of such
enforcement or set off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside,
recovered from, disgorged by or are required to be refunded, repaid or
otherwise restored to the Borrower, a trustee, receiver or any other
Person under any Law, including without limitation any bankruptcy Law
or equitable cause, then to the extent of any such restoration, the
obligation or part thereof originally intended to be satisfied shall
be revived and continued in full force and effect as if such payment
had not been made or such enforcement or set off had not occurred.
SECTION 7.19 SUBMISSION OF AGREEMENT. The submission of this
Credit Agreement to the Borrower or its agent or attorney for review
or signature does not constitute a commitment by the Lender to make
the New Xxxxxxx Loan to the Borrower, and this Credit Agreement shall
have no binding force or effect unless and until the Effective Date
occurs.
SECTION 7.20 THIRD-PARTY CONSULTANTS. The Lender may hire such
third-party experts, advisors or other consultants (including, without
limitation, attorneys, accountants, appraisers, environmental
consultants and agricultural production or marketing experts) as the
Lender reasonably deems necessary, the reasonable costs of which shall
be paid by Borrower, to provide the following services: (a) inspect
or investigate the Collateral or Borrower's books and records,
properties and environmental compliance at any time; (b) evaluate any
reports, or financial or other information heretofore or hereafter
prepared or submitted by or on behalf of the Borrower and delivered to
the Lender; (c) perform such additional investigations and tests of
the Collateral as may be necessary to perform such evaluation; (d)
investigate or ascertain the Borrower's compliance with the New
Xxxxxxx Loan Documents; (e) establish the existence or nonexistence of
any fact or facts, the existence or nonexistence of which is a
condition or requirement of this Credit Agreement; and (f) perform
such other services as may, from time to time, be required by the
Lender. If the Borrower fails to do so, the Borrower hereby
authorizes the Lender to pay for such third party consultants on the
Borrower's behalf, and any such disbursements shall, at the Lender's
option, be added to the outstanding principal balance of the New
Xxxxxxx Note; provided, however, that no such disbursement shall be
construed as a waiver by the Lender of the Borrower's breach of its
obligation to make such disbursement itself. The authorization
granted hereby shall be irrevocable, and no further direction or
authorization from the Borrower shall be necessary to make such
disbursements.
SECTION 7.21 INCONSISTENCIES WITH LOAN DOCUMENTS. Except as
otherwise provided in any other New Xxxxxxx Loan Document by specific
reference to the applicable provision of this Credit Agreement, in the
event of any direct conflicts or inconsistencies between the terms of
this Credit Agreement and the terms of any other New Xxxxxxx Loan
Document, the terms of this Credit Agreement shall govern and prevail.
SECTION 7.22 COUNTERPARTS. This Credit Agreement may be
executed in any number of counterparts each of which shall be deemed
an original and all of which shall constitute one and the same
agreement with the same effect as if all Parties had signed the same
signature page. Any signature page of this Credit Agreement may be
detached from any counterpart of this Agreement and reattached to any
other counterpart of this Credit Agreement identical in form hereto
but having attached to it one or more additional signature pages.
SECTION 7.23 NO NOVATION. This Credit Agreement and the other
New Xxxxxxx Loan Documents are not intended to effect a satisfaction
or novation of Lender's pre petition claims against the Debtors, but
rather to restructure, in their entirety, the obligations of Borrower
and its Affiliates relating thereto.
SECTION 7.24 REGISTRATION, ETC. OF NEW XXXXXXX NOTE.
(a) The Borrower shall keep at its principal executive office a
register for the registration and registration of transfers of the New
Xxxxxxx Note. The name and address of the Lender, each transfer
thereof and the name and address of each transferee of the New Xxxxxxx
Note shall be registered in such register. Prior to due presentment
for registration of transfer, the Person in whose name any New Xxxxxxx
Note shall be registered shall be deemed and treated as the owner and
holder thereof for all purposes hereof, and the Borrower shall not be
affected by any notice or knowledge to the contrary. The Borrower
shall give to any holder of a New Xxxxxxx Note promptly upon written
request therefor, a complete and correct copy of the name and address
of the registered holder of the New Xxxxxxx Note.
(b) Upon surrender of the New Xxxxxxx Note at the principal
executive office of the Borrower for registration of transfer or
exchange (and in the case of a surrender for registration of transfer,
duly endorsed or accompanied by a written instrument of transfer duly
executed by the registered holder of such New Xxxxxxx Note or its
attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such New Xxxxxxx Note or part thereof),
the Borrower shall execute and deliver, at the Borrower's expense
(except as provided below), one or more new New Xxxxxxx Notes (as
requested by the holder thereof) in exchange therefor, in an aggregate
principal amount equal to the unpaid principal amount of the
surrendered New Xxxxxxx Note. Each such new New Xxxxxxx Note shall be
payable to such Person as such holder may request and shall be
substantially in the form of the New Xxxxxxx Note. Each such new Note
shall be dated and bear interest from the date to which interest shall
have been paid on the surrendered New Xxxxxxx Note or dated the date
of the surrendered New Xxxxxxx Note if no interest shall have been
paid thereon. The Borrower may require payment of a sum sufficient to
cover any stamp tax or governmental charge imposed in respect of any
such transfer of any New Xxxxxxx Note. No New Xxxxxxx Note shall be
transferred in denominations of less than One Hundred Thousand Dollars
($100,000), provided that if necessary to enable the registration of
transfer by a holder of its entire holding of New Xxxxxxx Notes, one
New Xxxxxxx Note may be in a denomination of less than One Hundred
Thousand Dollars ($100,000).
(c) Upon receipt by the Borrower of evidence reasonably
satisfactory to it of the ownership of and the loss, theft,
destruction or mutilation of any New Xxxxxxx Note, and
(i) in the case of loss, theft or destruction, of an
unsecured indemnity reasonably satisfactory to the Borrower (provided
that if the holder of such New Xxxxxxx Note is, or is a nominee for,
the Lender or another holder of a New Xxxxxxx Note with a minimum net
worth of at least $100 Million, such Person's own unsecured agreement
of indemnity shall be deemed to be satisfactory), or
(ii) in the case of mutilation, upon surrender and
cancellation of the New Xxxxxxx Note,
the Borrower at its own expense shall execute and deliver, in lieu
thereof, a new New Xxxxxxx Note in the same principal amount as is
then outstanding on the New Xxxxxxx Note, dated and bearing interest
from the date to which interest shall have been paid on such lost,
stolen, destroyed
or mutilated New Xxxxxxx Note or dated the date of such lost, stolen,
destroyed or mutilated New Xxxxxxx Note if no interest shall have been
paid thereon.
SECTION 7.25 WAIVER OF APPRAISEMENT, VALUATION, ETC. To the
full extent that the Borrower may lawfully do so, the Borrower, for
itself and for any other Person who or which may claim through or
under it, hereby (a) agrees that neither it nor any such Person shall
set up, plead, claim or in any manner whatsoever take advantage of,
any appraisal, valuation, stay, moratorium, extension or redemption
laws, now or hereafter in force, (b) waives all benefit or advantage
of any such Laws and waives and releases any and all such rights and
covenants not to hinder, delay or impede the exercise of any right or
remedy permitted herein or in any New Xxxxxxx Loan Document but to
suffer and permit every such right or remedy as though no such Laws
were in effect, (c) consents and agrees that the Collateral may be
sold by the Lender as an entirety or in parts and (d) agrees that the
Borrower shall neither claim, demand or otherwise be entitled to any
credit against or deduction from the principal, the Make Whole Amount,
if any, or the interest on the New Xxxxxxx Note or any other sums
which may become payable under the terms of the New Xxxxxxx Loan by
reason of the payment of any tax, assessment or other municipal or the
governmental charge or imposition on (or relating to) the Collateral
or any part thereof, nor claim or otherwise be entitled to any
deduction from the taxable or assessed value of the Collateral or any
part thereof by reason of any New Xxxxxxx Loan Document.
SECTION 7.26 WAIVER OF MARSHALLING AND OTHER DEFENSES.
Borrower hereby (a) waives any and all rights to require any
marshalling of assets in favor of Borrower or any other Person and
specifically agrees that in the event of any sale of the Collateral or
any part thereof by foreclosure or otherwise, whether by action or
advertisement or otherwise, all of the Collateral and all interests in
the Collateral offered for sale may, at the option of the Lender, be
sold together, in a single sale, and (b) agrees that the Lien of the
New Xxxxxxx Loan Documents as to the interests of the Borrower will
not be released, impaired or subordinated by any amendment to or
termination of any New Xxxxxxx Loan Document, any extension of time or
waiver of right or remedy under any New Xxxxxxx Loan Document, or any
other act, inaction or thing which, but for this provision, would so
release, impair or subordinate such Lien.
IN WITNESS WHEREOF, the Parties hereto have caused this
Credit Agreement to be duly executed by their respective authorized
signatories as of the day and year first above written.
BORROWER: SUN WORLD INTERNATIONAL, INC.
By: /S/ Xxxxxxx X. Xxxxxxx
---------------------------------
Chief Executive Officer
LENDER: XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By: /S/ Xxxxx Xxxxx
---------------------------------------
Second Vice President
SCHEDULE 1.1 (Blythe Ranch)
LEGAL DESCRIPTION OF BLYTHE RANCH
PARCEL 1
The west 30.00 feet of the North Half of the Southwest Quarter of
Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 22 East, San Bernardino Meridian,
in the County of Riverside, State of California, according to the
Official Plat thereof, which lies north of the north line of the state
highway acquired by order of condemnation, recorded March 3, 1969 as
Instrument No. 20981, Official Records.
Except that portion described by deed to the State of California
recorded May 19, 1946 as Instrument No. 2906, Official Records.
PARCEL 2
Parcels 1 through 11 inclusive and 12 through 16 inclusive of Parcel
Map 16920, in the County of Riverside, State of California, as per map
recorded in Book 112, Pages 44 through 49, inclusive of parcel maps,
in the Office of the County Recorder of said county.
Except all oil, gas, oilshale, coal, phosphate, sodium, gold, silver
and all other mineral deposits, as reserved by the State of California
in patent recorded April 8, 1954 as Instrument No. 17593, Official
Records.
PARCEL 3
A non exclusive easement for ingress, egress and public utilities and
public roads over, under and across the following described real
property, to wit:
The east 30.00 feet and the south 30.00 feet of the Northeast Quarter
of Section 18, Township 6 South; Range 22 East, San Bernardino
Meridian, in the County of Riverside, State of California, according
to the Official Plat thereof.
PARCEL 4
A non exclusive easement for ingress, egress and public utilities and
public roads over, under and across that portion Township 6 South,
Range 22 East, San Bernardino Meridian, in the County of Riverside,
State of California, described as follows:
The east 30.00 feet, the south 30.00 feet, the west 30.00 feet and the
north 30.00 feet of the Northwest Quarter of Section 17; the east
30.00 feet, the south 30.00 feet, the west 30.00 feet and the north
30.00 feet of Section 16; the south 30.00 feet of the Southeast
Quarter; the west 30.00 feet of the North Half of the Southwest
Quarter and the west 30.00 feet of the Northwest Quarter of
Section 15.
PARCEL 5
Parcels 1 through 46 inclusive of Parcel Map 14093, in the County of
Riverside, State of California, as per map recorded in Book 105,
Pages 78 through 87, inclusive of parcel maps, in the Office of the
County Recorder of said county.
PARCEL 6
The West Half of the Southeast Quarter of Section 0, Xxxxxxxx 0 Xxxxx,
Xxxxx 22 East, San Bernardino Meridian, in the County of Riverside,
State of California, according to the Official Plat thereof.
PARCEL 7
A non exclusive conditional easement and right of way over the east
30.00 feet of Sections 16, 21, 28 and that portion of Section 00,
Xxxxxxxx 0 Xxxxx, Xxxxx 22 East, San Bernardino Meridian, in the
County of Riverside, State of California, according to the Official
Plat thereof, which lies north of old California Highway 60-70 known
as Xxxxxx Way and over the north 15.00 feet of the East Half of the
Northeast Quarter of Section 17, and over the north 15.00 feet of
Section 00, Xxxxxxxx 0 Xxxxx, Xxxxx 00 Xxxx, Xxx Xxxxxxxxxx Meridian
and over the south 15.00 feet of the East Half of the Southeast
Quarter of Section 8 and over the south 15.00 feet of the West 3/4ths
of Section 0, Xxxxxxxx 0 Xxxxx, Xxxxx 22 East, San Bernardino
Meridian, upon the conditions and agreements contained in the
documents recorded January 12, 1977 as Instrument Nos. 6140, 6141 and
6142, all of Official Records, Riverside County Records.
PARCEL 8
That portion of the Xxxxxxxxx Xxxxxxx xx Xxxxxxx 00, Xxxxxxxx 0 Xxxxx,
Xxxxx 22 East, San Bernardino Meridian, in the County of Riverside,
State of California, according to the Official Plat thereof, described
as follows:
Beginning at the northwest xxxxxx of said Section 23; thence south
01 18' 06" east, on the westerly line of said Section 23, 1,289.56
feet to the southwest corner of the Northwest Quarter of the Northwest
Quarter of said Section 23; thence north 88 41' 17" east on the
southerly line of said Northwest Quarter, 178.85 feet; thence north
01 49' 44" west, 1,290.32 feet to a point on the northerly line of
said Section 23; Thence south 88 26' 38" west, on the northerly line
of said Section 23, 166.98 feet to the point of beginning.
Except all mineral rights under said land, as reserved in deed
recorded June 8, 1983 as Instrument No. 112847, Official Records.
PARCEL 9
A non exclusive easement for the placement, use and maintenance of a
water transmission line across and under the following described
property:
The south 30.00 feet of the west 2,700.00 feet of Section 00,
Xxxxxxxx 0 Xxxxx, Xxxxx 22 East, San Bernardino Meridian, in the
County of Riverside, State of California, according to the Official
Plat thereof.
PARCEL 10
Parcels 1 through 4 inclusive of Parcel Map 14293, in the County of
Riverside, State of California, as per map recorded in Book 108,
Pages 11 through 20, inclusive of parcel maps, in the Office of the
County Recorder of said county.
PARCEL 11
Parcels 5 through 34, inclusive of Parcel Map 14293, in the County of
Riverside, State of California, as per map recorded in Book 108, Pages
11 through 20, inclusive of parcel maps, in the office of the County
Recorder of said county.
SCHEDULE 1.1 (Blythe Ranch)
SCHEDULE 1.1
(CROP DEVELOPMENT PLAN DATA)
(1) A summary of current land then owned or leased by each
Debtor showing in reasonable detail (i) for the Borrower and
each other Debtor individually and in the aggregate and (ii)
on a ranch by ranch basis, the following:
(a) Permanent Plantings
(b) Developing Plantings
(c) Row crop land
(d) Fallow land
(e) Facilities
(f) Other land (i.e., roads, etc.)
and for each such category further showing:
(a) The owner of such land (and lessee, if
appropriate)
(b) The crop or crops grown thereon
(c) The age of such crop
(d) The anticipated productive life of such crop
(2) A listing of any Disposition of any real estate constituting
Collateral occurring from the previous report showing in
reasonable detail the following:
(a) identity of real estate
(b) Net Sale Proceeds
(c) identity of buyer
(3) A listing of crop abandonments occurring from the previous
report showing in reasonable detail the following:
(a) identity of crop having been abandoned
(b) current use of land on which crop was abandoned
(4) A listing of any acquisitions of real estate from the
previous report.
(5) A listing of new plantings and replanting anticipated during
the immediately succeeding year, a description thereof
including location (along with revised crop map) and the
estimated cost thereof.
SCHEDULE 1.1
(CROP DEVELOPMENT PLAN DATA)
SCHEDULE 1.1 (DEBTORS)
LIST OF DEBTORS (EXCEPT BORROWER)
1. Sun Desert, Inc., a Delaware corporation as the successor to Sun
Desert, Inc., a Debtor in Possession in the Chapter 11 Case.
2. Sun World Brands, a California corporation.
3. Sun World Management Corporation, a California corporation.
4. Sun World/Rayo, a California corporation.
5. Superior Farming Europe N.V., a Netherlands Antilles corporation.
6. Superior Farming Europe B.V., a Netherlands corporation.
SCHEDULE 1.1
(LIST OF DEBTORS, EXCEPT BORROWER)
SCHEDULE 1.1 (MAKE WHOLE)
"Make Whole Amount" means an amount equal to the excess, if any,
of the Discounted Value of the Remaining Scheduled Payments with
respect to Called Principal over the amount of such Called Principal.
For purposes of determining the Make Whole Amount under this Schedule,
the following terms have the following meanings:
(a) "Applicable Spread" means as follows:
(i) Whenever either a Default or an Event of Default
has occurred and is continuing, Section 4.27
applies or the principal of the New Xxxxxxx Note
has become or is declared to be immediately due
and payable pursuant to Section 6.2, zero (0)
basis points.
(ii) Except when subsection (i) above applies, the
following:
(A) for the period from the third (3d) anniversary of
the Effective Date through and including the
fourth (4th) anniversary of the Effective Date,
two hundred and fifty (250) basis points;
(B) for the period from the fourth (4th) anniversary
of the Effective Date through and including the
fifth (5th) anniversary of the Effective Date, two
hundred (200) basis points;
(C) for the period from the fifth (5th) anniversary of
the Effective Date through and including the sixth
(6th) anniversary of the Effective Date, one
hundred and fifty basis (150) points;
(D) for the period from the sixth (6th) anniversary of
the Effective Date through and including the
seventh (7th) anniversary of the Effective Date,
one hundred (100) basis points; and
(E) thereafter, fifty (50) basis points.
(b) "Called Principal" means the principal of the New
Xxxxxxx Note that is to be prepaid or has become or is
declared to be immediately due and payable pursuant to
Section 6.2, as the context requires.
(c) "Discount Factor" means the sum of the Reinvestment
Yield plus the Applicable Spread.
(d) "Discounted Value" means, with respect to the Called
Principal, 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 the Discount Factor (applied on a
monthly basis).
(e) "Reinvestment Yield" means, with respect to the Called
Principal, the yield to maturity implied by (i) the
yields reported, as of 10:00 A.M. (New York City time)
on the second Business Day preceding the Settlement
Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Access
Service (or such other display as may replace Page 678
on Telerate Access Service) for actively traded U.S.
Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of
such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of
such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for
which such yields have been so reported, as of the
second Business Day 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 Average Life of such Called Principal as
of such Settlement Date. Such implied yield will be
determined, if necessary, by (a) converting U.S.
Treasury xxxx quotations to bond equivalent yields in
accordance with accepted financial practice and (b)
interpolating linearly between (1) the actively traded
U.S. Treasury security with the maturity closest to and
greater than the Remaining Average Life and (2) the
actively traded U.S. Treasury security with the
maturity closest to and less than the Remaining Average
Life.
(f) "Remaining Average Life" means, with respect to any
Called Principal, the number of years (calculated to
the nearest one twelfth year) obtained by dividing (i)
such Called Principal into (ii) the sum of the products
obtained by multiplying (a) the principal component of
each Remaining Scheduled Payment with respect to such
Called Principal by (b) 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.
(g) "Remaining Scheduled Payments" means, with respect to
the Called Principal, all payments of such Called
Principal and interest thereon that would be due 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; provided that if
such Settlement Date is not a date on which interest
payments are due to be made under the terms of the New
Xxxxxxx Note, then the amount of the next succeeding
scheduled interest payment will be reduced by the
amount of interest which is accrued to such Settlement
Date and required to be paid on such Settlement Date or
which has become or is declared to be immediately due
and payable pursuant to Section 6.2, as the context
requires.
(h) "Settlement Date" means, with respect to the Called
Principal, the date on which such Called Principal is
to be prepaid or has become or is declared to be
immediately due and payable pursuant to Section 6.2, as
the context requires.
Notwithstanding anything to the contrary expressed herein,
the Make Whole Amount shall never be less than zero, and shall be zero
(0) (i) through and including the third (3d) anniversary of the
Effective Date if section (a)(ii) applies, and (ii) with respect to a
Mandatory Prepayment Payment pursuant to Section 4.24(b) hereof
received prior to an acceleration of the New Xxxxxxx Loan under
Section 6.2 hereof.
SCHEDULE 1.1 (Make Whole)
SCHEDULE 1.1 (PERMITTED INVESTMENTS)
LIST OF CERTAIN PERMITTED INVESTMENTS
AS OF THE EFFECTIVE DATE
Investment at book value
As of July 31, 1996
COMPANY
Sun Date (1) 46,523 Sun World Management
American Sunmelon (1) 1,940,883 Sun World Brands
XxXxxxxxx Vineyards (8,374) Sun World International, Inc.
-----------
1,979,032
==========
Other
Trademarks & Patents 3,236,059 Sun World, Inc.
Rayo Water Rights 500,000 Sun World Rayo, Inc.
Product Sales Retention (2) 263,332 Sun World, Inc.
California Ammonia 25,000 Sun World, Inc.
---------
4,024,391
==========
(1) Sun World's interest in partnership
(2) Citrus and Raisin
Other Investment
Sun World (Europe) B.V., an inactive, limited liability company,
organized in The Netherlands. Sixty (60) percent of outstanding
stock owned by Sun World International, Inc. Control of
management requires two thirds vote of outstanding shares.
SCHEDULE 1.1 (PERMITTED INVESTMENTS)
SCHEDULE 1.1 (PERMITTED LIENS)
LIST OF CERTAIN PERMITTED LIENS
Such equipment leases listed on List B attached hereto as
may have been assumed by the Borrower in connection with the
reorganization of Old SWI and Old SWII pursuant to the Chapter 11
Case.
SCHEDULE 1.1 (PERMITTED LIENS)
Schedule 1.1 (short term water sales)
[Language for Agreements Re Short Term Spot Market Water Sales.]
NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS AGREEMENT:
1. Unless sooner terminated or expired in accordance with
the terms hereof, this agreement shall, automatically
and without further oral or written notice to anyone,
expire and be of no further force or effect on the date
which is the earlier of (a) twelve (12) calendar months
after the date hereof, and (b) the day when either
party hereto becomes aware that this agreement violates
any applicable law.
2. The parties hereto acknowledge that Xxxx Xxxxxxx Mutual
Life Insurance Company (the "Lender") has a first
priority security interest and lien in the water and/or
water rights covered by this agreement, and
accordingly, the rights, titles and interests of the
transferee of the water and/or water rights covered by
this agreement are subject and subordinate to such
first lien security interest, and this agreement shall
not be amended or modified in any way without the
Lender's prior written consent, which consent the
Lender may deny, withhold or delay in its sole and
absolute discretion. Under no circumstances shall this
agreement be deemed to create, nor shall buyer
otherwise be deemed to hold by reason of the
transactions contemplated hereby or the performance or
nonperformance of either party hereunder, any security
interest or lien upon all or any portion of the assets
of seller (including, without limitation, the water
and/or water rights that are the subject of this
agreement).
3. Any provision herein or any other actual or purported
agreement between the parties hereto that is contrary
to, or inconsistent with, paragraphs 1 and 2 above
shall be null and void, and of no force and effect.
Schedule 1.1 (short erm water sales)
SCHEDULE 2.10
[XXXXXXX WIRE TRANSFER INSTRUCTIONS]
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
All payments on account of the New
Xxxxxxx Note shall be made in
immediately available funds at the
opening of business on the due date
via electronic funds transfer,
properly identified, through the
Automated Clearing House system to
the following account:
Federal Reserve Bank of Chicago for
the account of Bank Illinois,
Champaign, Illinois (0711 0199 6)
For further credit to
Xxxx Xxxxxxx Mutual Life Insurance
Company,
Loan Number 163335
All payments shall reference the New Xxxxxxx Note and shall
include a breakdown of the amount of principal (including
referencing whether such payment is a prepayment of principal),
interest and Make Whole Amount, if any, in the wire transfer
instructions.
SCHEDULE 2.10
(XXXXXXX WIRE TRANSFER INSTRUCTIONS)
SCHEDULE 2.13
AMORTIZATION SCHEDULE
Principal Amount $91,083,853.95
DUE DATE SCHEDULED PRINCIPAL PAYMENT
Effective Date 1,518,064.23
1/1/1997 1,518,064.23
4/1/1997 1,518,064.23
9/1/1997 1,518,064.23
1/1/1998 1,518,064.23
4/1/1998 1,518,064.23
9/1/1998 1,518,064.23
1/1/1999 1,518,064.23
4/1/1999 1,518,064.23
9/1/1999 2,277,096.35
1/1/2000 2,277,096.35
4/1/2000 2,277,096.35
9/1/2000 2,277,096.35
1/1/2001 2,277,096.35
4/1/2001 2,277,096.35
9/1/2001 2,277,096.35
1/1/2002 2,277,096.35
4/1/2002 2,277,096.35
9/1/2002 2,277,096.35
1/1/2003 2,277,096.35
4/1/2003 2,277,096.35
9/1/2003 2,277,096.35
1/1/2004 2,277,096.35
4/1/2004 2,277,096.35
9/1/2004 2,277,096.35
1/1/2005 2,277,096.35
4/1/2005 2,277,096.35
9/1/2005 2,277,096.35
1/1/2006 2,277,096.35
4/1/2006 2,277,096.35
9/1/2006 2,277,096.35
9/13/2006 27,325,156.18
SCHEDULE 2.13
(AMORTIZATION SCHEDULE)
SCHEDULE 3.4 (LITIGATION)
PENDING AND THREATENED LITIGATION
See attached list.
SCHEDULE 3.4 (LITIGATION)
(PENDING AND THREATENED LITIGATION)
SCHEDULE 3.5
ERISA PLAN TERMINATIONS
Subsequent to execution of the Amended and Restated
Credit Agreement, in December, 1989, with Caisse Nationale de
Credit Agricole, Sun World terminated the Superior Farming
Company money purchased pension plans for salaried and hourly
employees. Form 5500's for each plan for the years 1991, 1992
and 1993 have previously been provided to Lender.
During 1994, Sun World terminated its participation in
the multi employer Western Growers Pension trust.
SCHEDULE 3.5
(ERISA PLAN TERMINATIONS)
SCHEDULE 3.11
COLLECTIVE BARGAINING AGREEMENTS
The following collective bargaining agreements have
been entered into by Debtors; in addition, a collective
bargaining agreement to which Coachella Growers is a party has
been included although Coachella Growers is not a Debtor.
1. Collective Bargaining Agreement Between Coachella
Growers and United Farm Workers of America, AFL CIO (Sun Desert
Ranch in Blythe, CA) effective August 21, 1995.
2. Collective Bargaining Agreement Between Sun
Desert, Inc. and United Farm Workers of America, AFL CIO,
effective November 12, 1995.
3. Collective Bargaining Agreement Between Sun World,
Inc. and United Farm Workers of America, AFL CIO, effective
February 1, 1995.
SCHEDULE 3.11
(COLLECTIVE BARGAINING AGREEMENTS)
SCHEDULE 3.15
LIST OF BORROWER AND ALL SUBSIDIARIES
See attached data.
SCHEDULE 3.15
(LIST OF BORROWERS AND ALL SUBSIDIARIES)
SCHEDULE 3.16
LIST OF PROPERTIES AND ASSETS
See attached lists.
SCHEDULE 3.16
(LIST OF PROPERTIES AND ASSETS)
SCHEDULE 4.3(b)(xvi)
(LIST OF KEY MAN INSURANCE POLICIES)
1. Philadelphia Life Insurance Company, Policy No. 8404003;
Insured: Xxxxxx X. Xxxxxxxxx; Face Amount: $7,000,000.
2. Aurora National Life Assurance Company, Policy No.
C11634064L; Insured: Xxxxxx X. Xxxxxxxxx; Face Amount:
$1,000,000.
3. Aurora National Life Assurance Company, Policy No.
C11640005L; Insured: Xxxxxx X. Xxxxxxxxx; Face Amount:
$5,000,000.
SCHEDULE 4.3(b)(xvi)
(LIST OF KEY MAN INSURANCE POLICIES)
SCHEDULE 4.6(c)
LIST OF JOINT VENTURES
Sun Date, a general partnership.
American Sunmelon, a general partnership.
Sun World/North, a general partnership.
Sun World (Europe), B.V., a limited liability company.
SCHEDULE 4.6(c)
(LIST OF JOINT VENTURES)
NEW XXXXXXX CREDIT AGREEMENT
SCHEDULE 4.7
DEBT
CERTAIN CLAIMS AND OBLIGATIONS OF THE BORROWER ARISING UNDER THE
PLAN (All capitalized terms used below shall have the respective
meanings given to such terms in the Plan.)
I. Administrative Claims
II. Tax Claims
III. Weyerhaeuser's Allowed Secured Claim
IV. Allowed Other Secured Claims
V. Allowed Unsecured Claims
VI. Class 6 Claims
VII. Class 8 Claims
(The funds to pay Class 6 and 8 claims, including, without
limitation, any amount payable to LSL Biotechnologies, Inc.
pursuant to a settlement of its claims or otherwise, with respect
to its pre petition claims against the Debtors, shall be provided
by Cadiz and such funds shall ultimately be disbursed through Sun
World's Unsecured Claims Disbursement Account)
SCHEDULE 4.18
LIST OF EXISTING ERISA PLANS
See attached list.
SCHEDULE 4.18
(LIST OF EXISTING ERISA PLANS)
SCHEDULE 4.24(b)(iv)
SUN WORLD
Farming Enterprise
Source: 1996 Budget
LIST OF DIRECT EXPENSES:
Fertilization
Weed Control/Hoeing
Cultivation
Irrigation
Insect & Disease Control
Repair Trellis, Wire & Stakes
Pruning, Tying and Training
Thinning
Fruit Enlarge/Pollin/Growth Hormone
Girdling
Irrigation Equipment Expense
Cover Crop & Brush Removal
Budding and Grafting (with respect to row crops only)
Xxxxx Suckering
Drop Bunch/Crown Sucker/Side Lateraling
Cane Turning/Leafing/Cane Trimming
Land Preparation (with respect to row crops only)
Cost of Seed, Trees or Plants (with respect to row crops only)
Planting (with respect to row crops only)
Frost Protection
Fumigation
Tissue Cultures (with respect to row crops only)
Harvest/Haul/Pack
SCHEDULE 4.24(b)(iv)
SCHEDULE 4.30
Required Minimum Permanent Crop Capital Expenditures
By Calendar Year:
CALENDAR YEAR ENDED DEC. 31: MINIMUM $ AMOUNT
1996 $0 (from Effective Date to year end)
1997 $1,200,000
1998 $1,500,000
1999 $1,800,000
2000 $2,000,000
2001 $2,000,000
2002 $2,000,000
2003 $2,000,000
2004 $2,000,000
2005 $2,000,000
2006 and thereafter $2,000,000
SCHEDULE 4.30
SCHEDULE 4.32
(AURORA INSURANCE PREMIUMS)
DUE DATE NOVEMBER 27: DOLLAR AMOUNT
1999 $138,019
2000 $151,821
2001 $167,003
2002 $183,704
2003 $202,074
2004 $222,281
2005 $244,509
SCHEDULE 4.32
(AURORA INSURANCE PREMIUMS)
SCHEDULE 5.1(j)
CORPORATE ACTIONS
(i) resolutions of the Board of Directors of each
of Cadiz, Borrower and each Debtor guarantor authorizing (a) the
execution, delivery and performance of such of the New Xxxxxxx
Loan Documents as have been or are to be executed by such Person,
(b) the consummation of the transactions contemplated hereby and
thereby, and (c) all other actions to be taken by such Person in
connection herewith, each certified by the secretary or an
assistant secretary of such Person as being in full force and
effect, without amendment, as of the Effective Date;
(ii) a certificate of the Secretary or Assistant
Secretary of each of Cadiz, Borrower and each Debtor guarantor
certifying the incumbency, names and true signatures of the
officers of such Person authorized to sign such of the Loan
Documents to which such Person is or is to become a party
pursuant hereto;
(iii) a copy of each of (a) the Certificate or
Articles of Incorporation and (b) bylaws of each of Cadiz,
Borrower and each Debtor guarantor, certified by the Secretary or
an Assistant Secretary of such Person as being a true and
complete copy thereof, including all amendments, as in full force
and effect on the Effective Date and after giving effect to the
Merger;
(iv) a certificate or certificates of the
Secretary of State or other appropriate official of the State of
incorporation of each of Cadiz, Borrower and each Debtor
guarantor, and of each other State in which such Person is
qualified to do business, dated as of a date close to the
Effective Date, to the effect that (a) such Person is validly
existing (or qualified to do business, as the case may be) and in
good standing in such State, or the equivalent thereof, and (b)
if generally available in such State, to the effect that such
Person is in good standing with the tax authorities of such
State, or the equivalent thereof; and
(v) A copy of the Agreement of Merger between Old
SWI and Old SWII giving effect to the Merger, certified by the
Secretary of State of the State of Delaware as being a true and
correct copy of the original, as filed.
SCHEDULE 5.1(j)
(CORPORATE ACTIONS)
SCHEDULE 5.1(v)
RELEASES
1. BORROWER. Borrower and each of Borrower's
Subsidiaries, on behalf of themselves and their respective
controlled Affiliates and their and such Affiliates' respective
predecessors, successors and assigns on one hand, and Lender on
the other shall have executed and delivered mutual general
releases of each other and their respective stockholders,
directors, employees, agents, representatives and attorneys, and
the predecessors, successors, assigns and personal
representatives of each of the foregoing Persons, with respect to
any and all claims and other obligations or liabilities, of any
nature whatsoever, whether known or unknown, in any way relating
to the credit relationship between Lender and Borrower and any of
its Affiliates, or to the Debtors' bankruptcy proceedings, and
arising from any action or omission occurring on or before the
Effective Date; provided, however, that such releases shall not
include any claims, obligations or liabilities arising under
documents executed in connection with the consummation of the
Plan.
2. CREDIT AGRICOLE. Credit Agricole on one hand, and
Lender on the other, shall have executed and delivered mutual
general releases of each other and their respective stockholders,
directors, employees, agents, representatives and attorneys, and
the predecessors, successors, assigns and personal
representatives of each of the foregoing Persons, with respect to
any and all claims and other obligations or liabilities, of any
nature whatsoever, whether known or unknown, in any way relating
to their respective claims against Borrower or any Affiliate of
Borrower, or to the Debtors' bankruptcy proceedings, and arising
from any action or omission occurring on or before the Effective
Date; provided, however, that such releases shall not include any
claims, obligations or liabilities arising under documents
executed in connection with the consummation of the Plan.
3. FORMER STOCKHOLDERS. Each of the former
stockholders of Old SWII (except the Xxxxxx and Xxxxxxxxx X. Xxxx
Revocable Trust dated 6 15 88), on behalf of themselves and their
respective controlled Affiliates and their and such Affiliates'
respective predecessors, successor and assigns on one hand, and
Lender on the other shall have executed and delivered mutual
general releases of each other and their respective stockholders,
directors, employees, agents, representatives and attorneys, and
the predecessors, successor, assigns and personal representatives
of each of the foregoing Person, with respect to any and all
claims and other obligations or liabilities, of any nature
whatsoever, whether known or unknown, in any way relating to the
credit relationship between Lender and Borrower and any of its
Affiliates, to any transaction between Borrower or any of its
Affiliates and such other Person, or to the Debtors' bankruptcy
proceedings, and arising from any action or omission occurring on
or before the Effective Date; provided, however, that such
releases shall not include any claims, obligations or liabilities
arising under documents executed in connection with the
consummation of the Plan.
4. ZENITH. Zenith, on behalf of itself and its
respective controlled Affiliates and its and such Affiliates'
respective predecessors, successors and assigns on one hand, and
Lender on the other shall have executed and delivered mutual
general releases of each other and their respective stockholders,
directors, employees, agents, representatives and attorneys, and
the predecessors, successors, assigns and personal
representatives of each of the foregoing Persons, with respect to
any and all claims and other obligations or liabilities, of any
nature whatsoever, whether known or unknown, in any way relating
to the credit relationship between Lender and Borrower and any of
its Affiliates, to the transactions between Zenith and Borrower
or any of its Affiliates, or to the Debtors' bankruptcy
proceedings, and arising from any action or omission occurring on
or before the Effective Date; provided, however, that such
releases shall not include any claims, obligations or liabilities
arising under documents executed in connection with the
consummation of the Plan.
5. CADIZ. Cadiz, on behalf of itself and its
controlled Affiliates and its and such Affiliates' respective
predecessors, successors and assigns on one hand, and Lender on
the other shall have executed and delivered mutual general
releases of each other and their respective stockholders,
directors, employees, agents, representatives and attorneys, and
the predecessors, successors, assigns and personal
representatives of each of the foregoing Persons, with respect to
any and all claims and other obligations or liabilities, of any
nature whatsoever, whether known or unknown, in any way relating
to the Acquisition, the Merger or the other transactions
contemplated thereby, or to the credit relationship between
Lender and Borrower and any of its Affiliates, or to the Debtors'
bankruptcy proceedings, in each case, arising from any action or
omission occurring on or before the Effective Date; provided,
however, that such releases shall not include any claims,
obligations or liabilities arising under documents executed in
connection with the consummation of the Plan.
SCHEDULE 5.1(v)
(RELEASES)
SCHEDULE 7.1
(ADDRESSES)
Borrower: Sun World International, Inc.
0000 Xxxxxxxxxx Xxxxxx, #000
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
FAX: (000) 000 0000
With a copy to: Cadiz Land Company, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxxx
FAX: (000) 000 0000
and
Xxxxxx & Xxxxxxx
0000 Xxxxxxx Xxxx Xxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx Xxxxxxxxxxx, Esq.
FAX: (000) 000 0000
Lender: Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Bond and Corporate Finance Group,
Agricultural Team, T 57
FAX: (000) 000 0000
With a copy to: Office Manager
Xxxx Xxxxxxx Mutual Life Insurance Company
0000 Xxxxx Xxxx Xxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
FAX: (000) 000 0000
and
Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Investment Law, T 50
FAX: (000) 000 0000
and
Xxxxxx & Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000 3101
Attn: Xxxxxxx X. Xxxxxxxx, Esq.
FAX: (000) 000 0000
SCHEDULE 7.1
(ADDRESSES)
SECURED PROMISSORY NOTE
$ [Principal Amount] ________________, California
[Effective Date], 1996
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of
which is hereby acknowledged, SUN WORLD INTERNATIONAL, INC., a
Delaware corporation and the successor by merger to Sun World
International, Inc. and Sun World, Inc. ("Borrower"), hereby
promises to pay to XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY, a
Massachusetts mutual life insurance company, or registered
assigns (collectively "Lender"), in lawful money of the United
States of America, the principal sum of [insert Principal
Amount] Dollars ($____________), together with
interest on the unpaid principal amount from the date hereof as
specified below and at the place and in the manner provided in
the Credit Agreement referred to below. Under certain
circumstances, such Credit Agreement provides for the making of a
Re advance. The Re Advance, if made, shall constitute a portion
of the outstanding principal of the New Xxxxxxx Loan and of this
Note, and Borrower's obligation to repay the Re Advance shall be
evidenced by this Note.
This Secured Promissory Note (the "Note") is the New
Xxxxxxx Note referred to in that certain New Xxxxxxx Credit
Agreement dated as of the Effective Date between Borrower and
Lender (as modified and supplemented and in effect from time to
time, the "Credit Agreement"). Terms used but not otherwise
defined herein shall have the meanings ascribed to them in the
Credit Agreement. Reference should be made to such Credit
Agreement for additional provisions pertaining to this Note, the
repayment or prepayment hereof, the principal amortization and
interest due hereunder, the enforcement and administration
hereof, and otherwise.
Principal and interest due under this Note shall be
paid and (when paid) applied in accordance with the Credit
Agreement, including, without limitation, Sections 2.10 through
2.13 (inclusive). Subject to the Maximum Rate (as defined in the
Credit Agreement), interest due hereunder shall accrue in
accordance with Section 2.11 of the Credit Agreement at the
Interest Rate or the Default Rate. The Interest Rate hereunder
is ten and six tenths percent (10.6%) per annum, and the Default
Rate is the greater of (i) twelve and six tenths percent (12.6%)
per annum, and (ii) the sum of the Credit Agricole Prime Rate (as
such term is defined in the Credit Agreement) plus four hundred
(400) basis points.
EXHIBIT A
Upon any Event of Default as defined under the Credit
Agreement or any other New Xxxxxxx Loan Document, as set forth in
Section 6.2 of the Credit Agreement either (i) Lender shall have
the right, upon written notice to Borrower, to declare the
entire, unpaid balance hereof, together with all accrued and
unpaid interest hereon, immediately due and payable, whereupon
such balance and interest shall be immediately due and payable,
or (ii) such balance and interest shall automatically be
immediately due and payable.
Whenever the maturity of this Note has been accelerated
automatically or by Lender or otherwise, a tender of the amount
necessary to satisfy the entire indebtedness evidenced hereby,
paid at any time following such acceleration and prior to a
foreclosure or trustee's sale, shall include a Make Whole Amount.
Furthermore, upon a purchase by any Person at a foreclosure sale
or trustee's sale of any of the Collateral following such
acceleration, the Lender hereof shall, to the extent permitted by
Law, receive out of the proceeds of such sale as indebtedness due
under this Note, in addition to all other amounts to which Lender
is entitled, a Make Whole Amount.
This Note is secured by the New Xxxxxxx Security
Documents. Further reference is made to the Credit Agreement and
to such New Xxxxxxx Security Documents for events or conditions
upon the occurrence of which Lender will have the right to
accelerate the maturity of this Note and require immediate
payment of all outstanding principal and accrued and unpaid
interest hereon. The rights and remedies of Lender as provided
herein, in the New Xxxxxxx Loan Documents and otherwise by Law,
shall be cumulative and concurrent, may be pursued singularly,
successively or together at the sole and absolute discretion of
Lender, and may be exercised as often as occasion therefor may
arise.
Borrower, any and all endorsers and guarantors hereof
and all other Persons who may become liable for all or any part
of the indebtedness evidenced by this Note hereby jointly and
severally waive presentment and demand for payment, notice of
dishonor, protest and notice of protest and any and all lack of
diligence or delay in the collection or enforcement hereof, and
further hereby agree that any waiver, modification, forbearance
or extension of the terms of payment made by Lender at the
request of any Person liable hereon shall not diminish or impair
the liability of any of them for the payment hereof.
Borrower shall pay any and all costs and expenses,
including, without limitation, attorneys' fees, incurred by
Lender in collecting amounts due hereunder or enforcing any of
Lender's rights or remedies provided in this Note, the New
Xxxxxxx Loan Documents or otherwise at Law, whether or not suit
is filed thereon; and every amount of such cost or expenses shall
bear interest from the date Lender incurs the same, at the
Interest Rate or (if applicable) the Default Rate.
THIS NOTE AND ANY OTHER NEW XXXXXXX LOAN DOCUMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF CALIFORNIA (WITHOUT REGARD TO ANY PRINCIPLES OF
CONFLICTS OF LAW).
BORROWER HEREBY CONSENTS AND SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF ALL FEDERAL AND STATE COURTS IN THE
STATE OF CALIFORNIA FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING
OUT OF OR RELATING TO THIS NOTE AND THE OTHER NEW XXXXXXX LOAN
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
BORROWER AGREES THAT SUCH COURTS SHALL HAVE JURISDICTION FOR ALL
LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS NOTE AND ANY
OTHER NEW XXXXXXX LOAN DOCUMENT. BORROWER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OUT OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE RESPECTIVE
PARTY AT ITS ADDRESS FOR NOTICES PURSUANT TO SECTION 7.1 OF THE
CREDIT AGREEMENT IN ACCORDANCE WITH THE RULES OF THE COURT.
NOTHING HEREIN SHALL ADVERSELY AFFECT THE RIGHT OF LENDER TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE BORROWER OR
THE COLLATERAL IN ANY OTHER JURISDICTION.
BORROWER HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING
UNDER THIS NOTE OR ANY OTHER NEW XXXXXXX LOAN DOCUMENT OR
INSTRUMENT ATTACHED HERETO OR THERETO, REFERRED TO HEREIN OR
THEREIN, OR DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR
(ii) IN ANY WAY CONNECTED HEREWITH OR THEREWITH, OR THE
TRANSACTIONS RELATED HERETO OR THERETO, IN EACH CASE WHETHER
SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND BORROWER HEREBY
AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE
OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT EACH PARTY TO THE CREDIT AGREEMENT MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY GOVERNMENTAL BODY
AS WRITTEN EVIDENCE OF THE CONSENT OF BORROWER TO THE WAIVER OF
BORROWER'S RIGHTS TO TRIAL BY JURY. THIS PROVISION IS A MATERIAL
INDUCEMENT FOR LENDER MAKING THE NEW XXXXXXX LOAN TO BORROWER.
LENDER'S INITIALS: ; BORROWER'S INITIALS: .
This Note is a registered note and, as provided in the
Credit Agreement, upon surrender of this Note for registration of
transfer, duly endorsed, or accompanied by a written instrument
of transfer duly executed, by the registered holder hereof or
such holder's attorney duly authorized in writing, a new note for
a like principal amount will be issued to, and registered in the
name of, the transferee. Prior to due presentment for
registration of transfer, the Borrower may treat the Person in
whose name this Note is registered as the owner hereof for the
purpose of receiving payment and for all other purposes, and the
Borrower will not be affected by any notice to the contrary.
This Note, which replaces the Original Note, has been
executed and delivered in connection with the restructuring of
the Original Loan and the loan documentation related thereto,
including, without limitation, the Original Credit Agreement, all
pursuant to the Plan and the Final Order. Such restructuring is
not intended to effect a novation of the obligations of the
Borrower or any other obligors to Lender under the Original Loan,
which obligations (as modified by the New Xxxxxxx Loan Documents)
shall survive the execution and delivery of the New Xxxxxxx Loan
Documents.
SUN WORLD INTERNATIONAL, INC., a
Delaware corporation
By: /S/
--------------------------------
Name:
Title:
