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EXHIBIT 10.1
NOTE PURCHASE AGREEMENT
dated as of
September 17, 1996
among
PREMIUM STANDARD FARMS, INC.,
PSF HOLDINGS L.L.C.,
as Guarantor
and
XXXXXX XXXXXXX GROUP INC.
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions......................... 1
SECTION 1.2. Accounting Terms and Determinations. 13
ARTICLE II
PURCHASE AND SALE OF NOTES
SECTION 2.1. Commitments to Purchase............. 14
SECTION 2.2. Closing............................. 14
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE GUARANTOR
SECTION 3.1. Corporate Existence and Power...... 15
SECTION 3.2. Authorization, Execution and
Enforceability..................... 16
SECTION 3.3. Governmental Authorization......... 16
SECTION 3.4. No Contravention................... 16
SECTION 3.5. Security Interests................. 17
SECTION 3.6. Financial Information.............. 17
SECTION 3.7. Full Disclosure.................... 18
SECTION 3.8. Real Property; Leasehold Interests. 18
SECTION 3.9. Capitalization..................... 19
SECTION 3.10. Solicitation; Access to Information 19
SECTION 3.11. Non-Fungibility.................... 20
SECTION 3.12. Not an Investment Company.......... 20
SECTION 3.13. Solvency........................... 20
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
SECTION 4.1. Purchase for Investment; Authority;
Binding Agreement................... 21
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. Conditions to Effectiveness.......... 21
SECTION 5.2. Conditions to each Purchaser's
Obligations to Purchase.............. 24
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SECTION 5.3. Conditions to the Company's Obligations
to Sell.............................. 25
ARTICLE VI
COVENANTS
SECTION 6.1. Information......................... 26
SECTION 6.2. Inspection of Property, Books and
Records; Consultation with
Management.......................... 27
SECTION 6.3. Supplemental Information............ 28
SECTION 6.4. Use of Proceeds..................... 28
SECTION 6.5. Restrictions on Certain Amendments.. 28
SECTION 6.6. Investment Company Act.............. 29
SECTION 6.7. Compliance with Third Priority Note
Indenture........................... 29
SECTION 6.8. Mergers, Consolidations, Etc........ 29
SECTION 6.9. Third Priority Notes................ 31
SECTION 6.10. Permitted Priority Liens............ 31
SECTION 6.11. Security Interests.................. 32
ARTICLE VII
TRANSFERS
SECTION 7.1. Restrictions on Transfer............ 33
SECTION 7.2. Restrictive Legends................. 33
SECTION 7.3. Notice of Proposed Transfers........ 33
SECTION 7.4. Transfer to Single Transferee....... 35
ARTICLE VIII
MISCELLANEOUS
section 8.1. Notices............................. 26
SECTION 8.2. No Waivers; Powers
and Remedies Cumulative; Amendments. 35
SECTION 8.3. Indemnification..................... 36
SECTION 8.4. Expenses; Documentary Taxes......... 38
SECTION 8.5. Payment............................. 38
SECTION 8.6. Successors and Assigns.............. 38
SECTION 8.7. Brokers............................. 39
SECTION 8.8. Collateral Agent; Security Documents 39
SECTION 8.9. Confidentiality..................... 40
SECTION 8.10. NEW YORK LAW; SUBMISSION TO
JURISDICTION; WAIVER OF JURY TRIAL.. 41
SECTION 8.11. Severability........................ 41
SECTION 8.12. Counterparts........................ 41
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EXHIBIT A Form of Note
EXHIBIT B Parent Guarantee Agreement
EXHIBIT C Subsidiary Guarantee Agreement
EXHIBIT D Security Agreement
EXHIBIT E Mortgage
EXHIBIT F Pledge Agreement
EXHIBIT G Intercreditor Agreement
EXHIBIT H Company Counsel Opinion
EXHIBIT I Missouri Company Counsel Opinion
EXHIBIT J Indemnity, Subrogation and Contribution Agreement
EXHIBIT K Assignment of Contracts
EXHIBIT L Consent and Agreement
Schedule 1.1(a) Mortgaged Properties
Schedule 1.1(b) Existing Liens
Schedule 3.9(a) Capitalization
Schedule 3.9(b) Subsidiaries
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NOTE PURCHASE AGREEMENT
NOTE PURCHASE AGREEMENT dated as of September 17, 1996 among PREMIUM
STANDARD FARMS, INC., PSF HOLDINGS L.L.C. and XXXXXX XXXXXXX GROUP INC.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions. The following terms, as used herein, have the
following meanings:
"Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common control
with such Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with") means, with respect to any Person, possession, directly
or indirectly, of the power to direct or cause the direction of the management
or policies of such Person, whether through the ownership of voting securities,
by contract or otherwise.
"Agreement" means this Agreement, as amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Asset Sale" means, with respect to any Person, any sale, lease, transfer,
condemnation, loss in an insured event or other disposition (including by way
of merger, consolidation or sale and leaseback transaction, but excluding any
sales of assets or property that (i) are substantially concurrently replaced
with the proceeds of such sale and (ii) are no longer used or useful in the
business of such Person) in one transaction or a series of related transactions
by such Person or any of its Subsidiaries to any Person other than the
Guarantor, the Company or any of its wholly owned Subsidiaries of (a) any of
the Capital Stock of any Subsidiary of such Person, (b) all or substantially
all of the Real Property, Leaseholds or Personal Property of such Person or any
of its Subsidiaries or (c) any other Real Property, Leaseholds or Personal
Property of such Person or any of its Subsidiaries, except, in the case of
clause (c), for (i) sales of inventory,
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livestock, processed pork inventories, breeding stock, grain, feedstock
or Hedging Contracts in the ordinary course of business and (ii) any sale,
lease, transfer or other disposition in one transaction or a series of related
transactions of Real Property, Leaseholds or Personal Property with a value not
in excess of $250,000.
"Assignment of Contracts" means the Assignment of Contracts between the
Company and the Collateral Agent, substantially in the form of Exhibit K, as
amended, supplemented or otherwise modified from time to time.
"Bankruptcy Code" means Title 11 of the United States Code entitled
"Bankruptcy", as now or hereafter in effect, or any successor thereto.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination
thereof, which obligations are required to be classified and accounted for as
capital leases on a balance sheet of such Person under GAAP, and the amount of
such obligations shall be the capitalized amount thereof determined in
accordance with GAAP.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated, whether
voting or nonvoting) of capital stock, partnership interests (whether general
or limited) or equivalent ownership interests in or issued by such Person, that
in each case are outstanding or issued on or after the date of this Agreement.
"Change in Control" shall be deemed to have occurred if (i)(a) any person
or group (within the meaning of Rule 13d-5 of the Exchange Act as in effect on
the date hereof) other than one or more Permitted Holders shall own directly or
indirectly, beneficially or of record, shares representing more than 35% of the
aggregate ordinary voting power represented by the issued and outstanding
membership interests of the Guarantor; (b) a majority of the seats (other than
vacant seats) on the board of directors of the Company shall at any time be
occupied by persons who were neither (i) nominated by the board of directors of
the Company nor (ii) appointed by directors so nominated; (c)
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any change in control (or similar event, however denominated) with
respect to the Company or the Guarantor shall occur under and as defined in any
indenture or agreement in respect of Debt to which the Company or the Guarantor
is a party; or (d) the Company ceases for any reason to be a wholly owned
Subsidiary of the Guarantor (other than as a result of the merger of the
Company into the Guarantor in a transaction permitted by Section 6.8) or (ii) a
"Change of Control", as defined in the Third Priority Note Documents, shall
have occurred.
"Closing" has the meaning set forth in Section 2.2(a).
"Collateral" means all "Collateral" as defined in the Security Agreement,
all "Pledged Collateral" as defined in the Pledge Agreement and all real
property, leasehold interests and other property subject to the Mortgages,
including the "Trust Premises" as defined in each Mortgage.
"Collateral Agent" has the meaning set forth in the Security Agreement.
"Commission" means the Securities and Exchange Commission.
"Company" means Premium Standard Farms, Inc., a Delaware corporation, and
its successors.
"Consent and Agreement" means the Consent and Agreement of Pig Improvement
Company, Inc., substantially in the form of Exhibit L.
"Consolidated Net Worth" of any Person as of any date of determination
means the stockholders' equity of such Person and its Subsidiaries at such date
determined on a consolidated basis.
"Consolidated Subsidiary" means at any date with respect to any Person any
Subsidiary or other entity, the accounts of which would be consolidated with
those of such Person in its consolidated financial statements if such
statements were prepared as of such date.
"Court" means the United States Bankruptcy Court for the District of
Delaware.
"Credit Agreement" means the Credit Agreement dated as of September 17,
1996 among the Company, the Guarantor, the Lenders party thereto and The Chase
Manhattan Bank, as Issuing Bank, Administrative Agent and Collateral
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Agent, as amended, supplemented or otherwise modified from time to
time. References to the Credit Agreement shall also include any credit
agreement or agreements entered into by the Company to replace, extend, renew,
refund or refinance all or a portion of the debt under the Credit Agreement,
provided that the aggregate principal amount of Debt available thereunder will
not be increased.
"Credit Availability Period" means the two-year period commencing on the
Effective Date.
"Debt" of any Person means, without duplication, (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid, (d) all obligations of
such Person under conditional sale or other title retention agreements relating
to property or assets purchased by such Person, (e) all obligations of such
Person issued or assumed as the deferred purchase price of property or services
(excluding trade accounts payable and accrued obligations incurred in the
ordinary course of business), (f) all Debt of others secured by (or for which
the holder of such Debt has an existing right, contingent or otherwise, to be
secured by) any Lien on property owned or acquired by such Person, whether or
not the obligations secured thereby have been assumed, (g) all Guarantees by
such Person of Debt of others, (h) all Capital Lease Obligations of such
Person, (i) all obligations of such Person in respect of interest rate
protection agreements, foreign currency exchange agreements or other interest
or exchange rate hedging arrangements and (j) all obligations of such Person as
an account party in respect of letters of credit and bankers' acceptances. The
Debt of any Person shall include the Debt of any partnership in which such
Person is a general partner.
"Debtors" means PSF Finance, L.P., Xxxxxxxx Farm, Inc., Premium Standard
Farms, Inc., Premium Holdings Corp. and PSF Finance Holdings, Inc., as debtors
and debtors in possession under the Bankruptcy Code.
"Default" means any Event of Default or any event or condition that
constitutes an Event of Default or that with the giving of notice or lapse of
time or both would, unless cured or waived, become an Event of Default.
"Effective Date" has the meaning set forth in Section 5.1.
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"Event of Default" has the meaning set forth in the Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" has the meaning assigned to it in Section 1.2.
"Guarantee" of or by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Debt of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, and including any obligation of such
Person, direct or indirect, (a) to purchase or pay (or advance or supply funds
for the purchase or payment of) such Debt or to purchase (or to advance or
supply funds for the purchase of) any security for the payment of such Debt,
(b) to purchase or lease property, securities or services for the purpose of
assuring the owner of such Debt of the payment of such Debt or (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Debt; provided, however, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Agreements" means the Parent Guarantee Agreement and the
Subsidiary Guarantee Agreement.
"Guarantor" means PSF Holdings L.L.C., a Delaware limited liability
company, and its successors.
"Hedging Contracts" means all contracts for, or options, puts, foreign
exchange contracts, currency swap agreements or similar arrangements relating
to, the purchase by the Company of (a) grain, soy meal and other feed
ingredients or relating hedging activities conducted in accordance with prudent
business practice and (b) hogs and related hedging activities conducted in
accordance with prudent business practice, in each case that are created to
protect the Company against price fluctuations and not for speculative
purposes.
"Inactive Subsidiary" means, at any time, any Subsidiary of the Company
that has no Debt at such time, less than $1,000 in assets at such time and has
not engaged in any business activities within the previous six months.
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"Indemnity Agreement" has the meaning set forth in Section 6.11(c).
"Initial Purchaser" means MS Group and/or, subject to Section 8.6(b), any
of its Affiliates designated as an "Initial Purchaser" in writing to the
Company on or prior to the initial Time of Purchase, and their respective
successors.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of
September 17, 1996 among the Guarantor, the Company, The Chase Manhattan Bank,
as Administrative Agent and Collateral Agent for the Lenders, and the
Collateral Agent, substantially in the form of Exhibit G, as amended,
supplemented or otherwise modified from time to time in accordance with its
terms.
"Leaseholds" of any Person means all the right, title and interest of such
Person as lessee or licensee in, to and under leases or licenses or Real
Property or fixtures annexed or to be annexed thereto.
"Lender Documents" means the Credit Agreement, together with all notes,
collateral and security documents, guarantees and other documents delivered at
any time in connection therewith, all as amended, supplemented or otherwise
modified from time to time in accordance with their respective terms.
"Lenders" means the banks and other financial institutions from time to
time party to the Credit Agreement.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, encumbrance, charge or security interest in or on such asset, (b)
the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or title retention agreement (or any financing lease having
substantially the same economic effect as any of the foregoing) relating to
such asset and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities.
"Majority Holders" means (i) at any time during the Credit Availability
Period, the Initial Purchaser, and (ii) at any time thereafter, the holders of
more than 50% in aggregate principal amount of the Notes outstanding at such
time; provided, however, that, for purposes of determining the Majority Holders
at any time, those Notes shall not be deemed outstanding which are held at such
time in the name
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of, or beneficially by, the Company or any Affiliate of the Company
(other than a member of the Xxxxxx Xxxxxxx Group).
"Margin Stock" has the meaning assigned thereto in Regulation G, U or X of
the Board of Governors of the Federal Reserve, as the same may be amended,
supplemented or modified from time to time.
"Material Adverse Effect" means (a) a materially adverse effect on the
business, assets, operations, prospects or condition, financial or otherwise,
of the Company and the Subsidiaries (taken as a whole), (b) a material
impairment of the ability of any Obligor to perform any of its obligations
under any Note Document to which it is or will be a party or (c) a material
impairment of the rights of or benefits available to the Purchasers or holders
of Notes under any Note Document.
"Mineral Rights" means rights and interests held by third parties in the
oil, gas and other minerals estate (including mineral and royalty interests).
"Xxxxxx Xxxxxxx" means Xxxxxx Xxxxxxx & Co. Incorporated, a Delaware
corporation, and its successors.
"Xxxxxx Xxxxxxx Group" means the group consisting of MS Group, Xxxxxx
Xxxxxxx, MSLEF II, MSCP III, MSCP III Investors, MSCP Investors and all parents
and Subsidiaries of any one or more of the foregoing.
"Mortgage" has the meaning assigned to that term in Section 5.1(c).
"Mortgaged Properties" means the owned real properties of the Company
specified on Schedule 1.1(a), but shall not include any such real property sold
or otherwise disposed of by the Company in accordance with the provisions of
this Agreement.
"MS Group" means Xxxxxx Xxxxxxx Group Inc., a Delaware corporation, and
its successors.
"MSCP Investors" means Xxxxxx Xxxxxxx Capital Investors, L.P., a Delaware
limited partnership, and its successors.
"MSCP III" means Xxxxxx Xxxxxxx Capital Partners, III, L.P., a Delaware
limited partnership, and its successors.
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"MSCP III Investors" means MSCP III 892 Investors, L.P., a Delaware
limited partnership, and its successors.
"MSLEF II" means The Xxxxxx Xxxxxxx Leveraged Equity Fund II, L.P., a
Delaware limited partnership, and its successors.
"Net Cash Proceeds" means (a) with respect to any Asset Sale, the proceeds
of such Asset Sale in the form of cash or cash equivalents, including payments
in respect of deferred payment obligations (to the extent corresponding to the
principal, but not interest, component thereof) when received in the form of
cash or cash equivalents and proceeds from the conversion of other Real
Property, Leaseholds and Personal Property received when converted to cash or
cash equivalents, net of (i) brokerage commissions and other reasonable fees
and expenses (including fees and expenses of counsel and investment bankers)
related to such Asset Sale; (ii) taxes actually paid or payable in the year
such Asset Sale occurs or in the following year as a result thereof; (iii)
payments required to be made to repay Debt or any other obligation then
outstanding that is secured by a Lien on the property if such Lien is senior to
the Lien thereon of the Collateral Agent for the benefit of the Secured Parties
and is permitted to exist under Section 6.10; and (iv) appropriate amounts to
be provided as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale (provided that to the extent and at such time
any such amounts are released, such amounts shall constitute Net Cash
Proceeds); and (b) with respect to any issuance of Debt or equity securities,
the cash proceeds thereof net of (i) underwriting or placement fees and
expenses directly incurred in connection therewith (including fees and expenses
of counsel) and (ii) taxes actually paid or payable in the year such issuance
occurs or in the following year as a result thereof.
"Note Documents" means this Agreement, the Notes, the Guarantee
Agreements, the Indemnity Agreement, the Intercreditor Agreement and the
Security Documents.
"Notes" means the Company's Senior Secured Second Priority Notes
substantially in the form set forth as Exhibit A hereto.
"Obligor" means the Company, the Guarantor and any Subsidiary Guarantor.
"Order" means the Order entered by the Court approving confirmation of the
Plan of Reorganization, the Recapitalization, the Note Documents, the Other
Transaction
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Documents and all related documentation contemplated herein or therein.
"Other Transaction Documents" means the Lender Documents, the Third
Priority Note Documents and the Recapitalization Documents.
"Parent Guarantee Agreement" means the Parent Guarantee Agreement,
substantially in the form of Exhibit B, made by the Guarantor in favor of the
Purchasers and the holders of the Notes, as amended, supplemented or otherwise
modified from time to time.
"Permitted Cash Equivalents" means any investment in:
(i) certificates of deposit with final maturities of two years or
less issued by commercial banks organized under the laws of the United
States of America having capital and surplus in excess of $100,000,000;
(ii) commercial paper with minimum grade of A-1 by Standard & Poor's
Corporation or P-1 by Xxxxx'x Investors Service, Inc.;
(iii) a direct obligation of the United States of America or of a
United States of America agency with a maturity of two years or less;
(iv) money market preferred stock rated "A" or above by Standard &
Poor's Corporation or Xxxxx'x Investors Service, Inc.;
(v) shares of money market mutual or similar funds having assets in
excess of $100,000,000; and
(vi) bank accounts maintained in any commercial bank.
"Permitted Holders" means any of Xxxxxx Xxxxxxx, Xxxxxx Investment
Management, GEM Capital Management Inc., The Prudential Insurance Company of
America, Loews Corporation and Hanwa Co., Limited, or any of their respective
Affiliates or any funds or institutional accounts managed or advised by any of
the foregoing.
"Permitted Priority Liens" means:
(i) Liens securing the obligations of the Company under the Lender
Documents;
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(ii) Liens securing Debt permitted pursuant to, and subject to the
terms and conditions set forth in, Section 6.01(c) of the Credit
Agreement (as in effect on the Effective Date); provided, however, that
no Lien securing Debt permitted pursuant to Section 6.01(c) of the Credit
Agreement (as in effect on the Effective Date) shall extend to or cover
any Real Property, Leaseholds or Personal Property other than the
equipment being financed with such Debt or other equipment financed by
such lender or lessor or its Affiliates;
(iii) Liens in effect on the Real Property, Leaseholds or Personal
Property of the Company, the Guarantor or any Subsidiary of the Company
at the time of purchase thereof by the Company, the Guarantor or such
Subsidiary or at the time of purchase of such Subsidiary by the Company
or another Subsidiary of the Company (in each case whether by merger,
consolidation, purchase of assets or otherwise); provided, however, that
(x) such Liens are not incurred, created or assumed in connection with,
or in contemplation of, such purchase, (y) such Liens do not extend to or
cover any Real Property, Leaseholds or Personal Property of the Company,
the Guarantor or any Subsidiary of the Company other than the Real
Property, Leaseholds or Personal Property that are, or the Real Property,
Leaseholds or Personal Property of the Subsidiary that is, the subject of
such purchase and (z) such Liens do not (A) materially interfere with the
use, occupancy and operation of any Mortgaged Property or (B) materially
reduce the fair market value of such Mortgaged Property but for such
Lien;
(iv) Liens for taxes not yet due and payable, and Liens for taxes
being contested in good faith;
(v) Liens imposed or given by law, which were incurred in the
ordinary course of business, such as carriers', warehousemen's and
mechanics' liens, Liens imposed under the Packers and Stockyards Act of
1921, as amended from time to time, and other similar Liens arising in
the ordinary course of business and (x) which do not in the aggregate
materially detract from the value of such assets or materially impair the
use thereof in the operation of the business of the Company, the
Guarantor or any Subsidiary of the Company or (y) which are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the assets
subject to any such Lien;
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(vi) Liens consisting of pledges or deposits in connection with
workers' compensation, unemployment insurance and other social security
legislation;
(vii) Liens consisting of deposits made in the ordinary course of
business (including surety bonds and appeal bonds) to secure the
performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness), statutory obligations and other similar
obligations;
(viii) Liens, easements, rights-of-way, zoning restrictions,
Mineral Rights and other similar restrictions, charges or encumbrances
that do not interfere with the ordinary conduct of the business of the
Company and which do not materially detract from the value of the
property to which they attach or materially impair the use thereof by the
Company, the Guarantor or any Subsidiary of the Company;
(ix) Liens upon hog finishing facilities acquired or constructed by
the Company after the Effective Date to secure New Finishing Facility
Debt (as defined in the Credit Agreement, as in effect on the Effective
Date) incurred (x) in accordance with Section 6.01(f) of the Credit
Agreement (as in effect on the Effective Date) or (y) in the form of
Capital Lease Obligations in transactions permitted by Section 6.03 of
the Credit Agreement (as in effect on the Effective Date);
(x) Liens on any Hedging Contract resulting solely from the purchase
of such Hedging Contract on margin; and
(xi) Liens (including Liens consisting of Mineral Rights) in
existence on the Effective Date and identified on Schedule 1.1(b).
"Person" means an individual or a corporation, partnership, trust,
incorporated or unincorporated association, joint venture, joint stock company,
government (or any agency or political subdivision thereof) or other entity of
any kind.
"Personal Property" of any Person means all the right, title and interest
of such Person in assets, properties and items, other than Real Property and
Leaseholds.
"Plan of Reorganization" means the Debtors' Second Amended Joint Plan of
Reorganization under Chapter 11 of the
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Bankruptcy Code dated September 5, 1996 and confirmed by the Court on
September 6, 1996.
"Pledge Agreement" has the meaning set forth in Section 5.1(b).
"Purchaser" means the Initial Purchaser and each other Person that becomes
a Purchaser pursuant to Section 8.6, and their respective successors, and
"Purchasers" means all of the foregoing.
"Purchase Commitment" means, (i) with respect to the Initial Purchaser,
initially $10,000,000 less any amount assigned to another Person that becomes a
Purchaser after the date hereof (a "Subsequent Purchaser") pursuant to Section
8.6 and (ii) with respect to any Subsequent Purchaser, the amount of Purchase
Commitment assigned to such Purchaser.
"Real Property" of any Person means all the fee ownership right, title and
interest of such Person in and to land, improvements therein and thereon and
fixtures annexed or to be annexed thereto, other than Leaseholds.
"Recapitalization" means the recapitalization of the Company in accordance
with the Recapitalization Documents.
"Recapitalization Documents" means the Plan of Reorganization and the
Debtors' Amended Joint Disclosure Statement to the Plan of Reorganization dated
July 29, 1996, and approved by the Court on September 6, 1996, including the
exhibits and schedules thereto, and all material agreements, documents and
instruments executed and delivered pursuant thereto or in connection therewith,
in each case as amended, supplemented or otherwise modified from time to time
in accordance with the terms thereof and hereof.
"Reduction Event" means (i) any issuance of Debt or equity securities by
the Company, the Guarantor or any Subsidiary, other than any issuance of Debt
or equity securities (x) pursuant to this Agreement or the Credit Agreement or
(y) pursuant to any Other Transaction Document (other than the Credit
Agreement) as in effect on the date hereof or (ii) an Asset Sale by the
Company, the Guarantor or any Subsidiary.
"Secured Parties" has the meaning set forth in the Security Agreement.
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"Securities Act" means the Securities Act of 1933, as amended.
"Security Agreement" has the meaning set forth in Section 5.1(b).
"Security Documents" means the Security Agreement, the Pledge Agreement,
the Assignment of Contracts, the Mortgages and all other instruments or
documents delivered by any Obligor in order to grant, perfect or protect Liens
in favor of the Collateral Agent for its benefit and the benefit of the
Purchasers and the holders of the Notes and securing the Obligors' obligations
hereunder and under such instruments and documents, as such instruments and
documents may be amended, supplemented, or otherwise modified from time to
time.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which a majority of the capital stock or other ownership interests
having ordinary voting power to elect a majority of the board of directors or
other persons performing similar functions are at the time directly or
indirectly controlled by such Person. Unless specified to the contrary,
"Subsidiary" means a Subsidiary of the Company.
"Subsidiary Guarantee Agreement" means the Subsidiary Guarantee Agreement,
substantially in the form of Exhibit C, made by each Subsidiary Guarantor in
favor of the Purchasers and the holders of the Notes, as amended, supplemented
or otherwise modified from time to time.
"Subsidiary Guarantor" means each direct or indirect domestic Subsidiary
of the Company other than any Inactive Subsidiary.
"Third Priority Note Documents" means the Third Priority Notes, the Third
Priority Note Indenture, and all material agreements, documents and instruments
executed and delivered pursuant thereto or in connection therewith, in each
case as amended, supplemented or otherwise modified from time to time in
accordance with the terms thereof and hereof.
"Third Priority Note Indenture" means the Indenture dated as of September
17, 1996 among the Company, the Guarantor and the Third Priority Note Trustee.
"Third Priority Note Trustee" means Fleet National Bank, as Trustee for
the holders of Third Priority Notes.
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"Third Priority Notes" means the Company's 11% Senior Secured Notes due
2003 (Partial Pay-in-Kind).
"Time of Purchase" has the meaning set forth in Section 2.2(a).
"Transfer" means any disposition of Notes that would constitute a sale
thereof under the Securities Act.
SECTION 1.2. Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted and all
financial statements required to be delivered hereunder shall be prepared in
accordance with generally accepted accounting principles as in effect as of the
date of this agreement in the United States of America, applied on a consistent
basis (except for changes concurred in by the Company's independent public
accountants) ("GAAP"); provided, however, that for purposes of determining
compliance with the covenants contained in Article VI, all accounting terms
herein shall be interpreted and all accounting determinations hereunder shall
be made in accordance with GAAP as in effect on the date of this Agreement and
applied on a basis consistent with the application used in the financial
statements referred to in Section 3.6.
ARTICLE II
PURCHASE AND SALE OF NOTES
SECTION 2.1. Commitments to Purchase. (a) From time to time during the
Credit Availability Period, the Company may issue and sell to each Purchaser
and, subject to the terms and conditions set forth herein and in reliance on
the representations and warranties of the Company contained herein, such
Purchaser agrees to purchase from the Company, Notes in an aggregate principal
amount at any one time outstanding not to exceed such Purchaser's Purchase
Commitment. The purchase price for the Notes shall be 100% of the principal
amount thereof. Within the foregoing limits, the Company may prepay Notes
pursuant to Section 4 of the Notes and sell additional Notes to each Purchaser
at any time during the Credit Availability Period.
(b) The obligation of each Purchaser hereunder to purchase the Notes will
expire on the earliest of (i) the delivery to the Purchasers by the Company of
a notice of termination of the obligations of the Purchasers hereunder, (ii)
September 17, 1998 and (iii) the occurrence of any
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Event of Default specified in clause (vi) or (vii) of Section 3(a) of
the Notes.
SECTION 2.2. Closing. (a) The Company shall give each Purchaser not less
than five Business Days' notice of the closing of each purchase and sale of the
Notes pursuant to Section 2.1(a) (each such closing, a "Closing"). The notice
of each Closing shall specify (i) the date (which date shall be a Business Day)
and time of such Closing and (ii) the aggregate principal amount of Notes to be
purchased at such Closing. The date and time of any Closing is referred to
herein as a "Time of Purchase."
(b) Unless any applicable condition specified in Article V has not been
satisfied with respect to any purchase and sale of Notes, such Purchaser shall,
not later than the Time of Purchase with respect to such purchase and sale,
deliver by wire transfer to the account number of the Company specified by the
Company in writing no later than 9:00 a.m. (New York City time) on the Business
Day immediately preceding such Time of Purchase immediately available funds in
an amount equal to the aggregate purchase price of the Notes so purchased.
(c) At each Closing, against payment as set forth in subsection (b)
above, the Company shall deliver to each Purchaser a single Note representing
the aggregate principal amount of Notes purchased hereunder at such Closing,
registered in the name of such Purchaser, or, if requested by such Purchaser,
separate Notes in other denominations of not less than $500,000 and registered
in such name or names as shall be designated by such Purchaser by notice to the
Company at least two Business Days prior to the Time of Purchase applicable to
such Closing.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
AND THE GUARANTOR
Each of the Company and the Guarantor represents and warrants (including,
in the case of any such representation and warranty made or deemed made before
the consummation of the Recapitalization, at the time such representation and
warranty is made or deemed made and immediately after giving effect to the
consummation of the Recapitalization) that as of the Effective Date and each
Time of Purchase:
SECTION 3.1. Corporate Existence and Power. The Company is a corporation
duly incorporated, validly existing and in good standing under the laws of the
State of Delaware, and is duly qualified to do business in, and is in good
standing under, the laws of the State of Missouri, Texas and every jurisdiction
in which the Company is required to be so qualified except where the failure so
to qualify would not result in a Material Adverse Effect. The Company is duly
qualified under the laws of the State of Missouri to engage in farming and to
own agricultural land in the State of Missouri. The Guarantor is a limited
liability company duly organized, validly existing and in good standing under
the laws of the State of Delaware, and is duly qualified to do business in, and
is in good standing under the laws of every jurisdiction where such
qualification is required except where the failure to so qualify would not
result in a Material Adverse Effect.
SECTION 3.2. Authorization, Execution and Enforceability. The execution,
delivery and performance by each Obligor of each of the Note Documents and the
Other Transaction Documents to which it is a party and the issuance by the
Company of the Notes have been duly and validly authorized and are within the
corporate powers of such Obligor or the Company, as the case may be. Each of
the Note Documents (other than the Notes) and the Other Transaction Documents
to which any Obligor is a party has been duly executed and delivered by such
Obligor and constitutes its valid and binding agreement, enforceable in
accordance with its terms except to the extent that enforcement may be limited
by applicable bankruptcy, insolvency, reorganization or other similar laws
affecting creditors' rights generally and by equitable principles (regardless
of whether enforcement is sought in equity or at law). When executed and
delivered by the Company against payment therefor in accordance with the terms
hereof, the Notes will constitute valid and binding obligations of the
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Company, enforceable in accordance with their terms except to the
extent that enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting creditors' rights generally and
by equitable principles (regardless of whether enforcement is sought in equity
or at law).
SECTION 3.3. Governmental Authorization. The execution and delivery by
each Obligor of each of the Note Documents (other than the Notes) and the Other
Transaction Documents to which it is a party did not and will not, the issuance
and sale by the Company of the Notes will not, and the consummation of the
transactions contemplated hereby and thereby will not, require any action by or
in respect of, or filing with, any governmental body, agency or governmental
official, except (i) such actions or filings that have been undertaken or made
prior to the Effective Date and that will be in full force and effect on and
after the Effective Date or that are not required to be filed on or prior to
the Effective Date and (ii) the filing of financing statements, Mortgages and
other documents delivered to the Initial Purchaser or the Collateral Agent for
filing pursuant to Section 5.1.
SECTION 3.4. No Contravention. The execution and delivery by each Obligor
of the Note Documents (other than the Notes) and the Other Transaction
Documents to which it is a party did not and will not, the issuance and sale by
the Company of the Notes will not, and the consummation of the transactions
contemplated hereby and thereby will not, contravene, violate or constitute a
default under any provision of applicable law or regulation, the certificate of
incorporation, by-laws or limited liability agreement of any Obligor or any
agreement, judgment, injunction, order, decree or other instrument binding upon
any Obligor or any of such Obligor's Subsidiaries or result in the creation or
imposition of any Lien on any asset of such Obligor or any of its Subsidiaries
other than Liens created pursuant to the Security Documents and the Other
Transaction Documents consisting of security agreements and instruments.
SECTION 3.5. Security Interests. Upon the due filing or recordation
thereof, the Security Documents will create, as security for the obligations
purported to be secured thereby, a valid and enforceable perfected security
interest in and Lien on all of the Collateral and all collateral consisting of
Real Property or Leaseholds that are then owned by any Obligor that are then
the subject of the Security Documents, subject only to Liens permitted pursuant
to Section 6.10; provided, however, that neither of the following shall cause
this representation and warranty
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to be deemed inaccurate: (i) with respect to any Collateral, failure
to file any financing statement (but only if a duly completed financing
statement shall have been delivered to the Initial Purchaser or the Collateral
Agent in accordance with Section 5.1(e)); and (ii) with respect to any such
Collateral consisting of Real Property or Leaseholds, failure to record any
Mortgage (but only if a duly executed counterpart of such Mortgage shall have
been delivered to the Initial Purchaser or the Collateral Agent in accordance
with Section 5.1(c)).
SECTION 3.6. Financial Information.
(a) The consolidated balance sheets of PSF, Inc. and PSF Finance L.P.
as of December 31, 1995 and the related statements of income and cash flow for
the fiscal year then ended, reported on by Ernst & Young LLP, copies of which
have been delivered to the Initial Purchaser, fairly present, in conformity
with GAAP, the financial position as of such date and the results of operations
and cash flows for such fiscal year of PSF, Inc., PSF Finance L.P. and PSF,
Inc. and PSF Finance L.P., combined.
(b) The combined and combining balance sheets of PSF, Inc. and PSF
Finance L.P. as of June 30, 1996 and the related statements of income and cash
flow for the three months then ended, copies of which have been delivered to
the Initial Purchaser, fairly present, in conformity with GAAP, the financial
position as of such date and the results of operations and cash flows for such
three-month period (subject to normal year-end adjustments) of PSF, Inc., PSF
Finance L.P. and PSF, Inc. and PSF Finance L.P., combined.
(c) Each of the Company and the Guarantor has heretofore delivered to
the Initial Purchaser the unaudited pro forma balance sheet of each of
the Company and the Guarantor as of June 30, 1996, as adjusted for the issuance
and sale of the Notes and the consummation of the transactions contemplated by
the Note Documents and the Other Transaction Documents. Such pro forma balance
sheets have been prepared in good faith by the Company according to "fresh
start" reporting principles, based on the assumptions used to prepare the pro
forma financial information contained in the Business Plan (as defined in the
Credit Agreement (as in effect on the Effective Date)) (which assumptions are
believed by the Company and the Guarantor on the date hereof to be reasonable),
are based on the best information available to the Company and the Guarantor as
of the date of delivery thereof, accurately reflect all adjustments required to
be made to give effect to the transactions contemplated by the Note Documents
and Other
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Transaction Documents and present fairly on a pro forma basis the estimated
consolidated financial position of the Company and the Guarantor and their
respective Consolidated Subsidiaries as of June 30, 1996, assuming that the
transactions contemplated by the Note Documents and the Other Transaction
Documents had actually occurred on such date.
SECTION 3.7. Full Disclosure. The information heretofore furnished by the
Company or any other Obligor to any Purchaser for purposes of or in connection
with this Agreement or any transaction contemplated hereby does not, and all
such information hereafter furnished by the Company or any other Obligor to any
Purchaser will not (in each case taken together and on the date as of which
such information is furnished), contain any untrue statement of a material fact
or omit to state a material fact necessary in order to make the statements
contained therein, in the light of the circumstances under which they are made,
not misleading. The Company has disclosed to each Purchaser any and all facts
that materially and adversely affect the business, operations or financial
condition of the Company and its Subsidiaries, taken as a whole, or the ability
of the Company to perform its obligations under any Note Document or any Other
Transaction Document.
SECTION 3.8. Real Property; Leasehold Interests. (a) Each Obligor has
good and marketable title to, or valid leasehold interests in, all its material
properties and assets, except for minor defects in title that do not interfere
with its ability to conduct its business as currently conducted or to utilize
such properties and assets for their intended purposes. All such material
properties and assets are free and clear of Liens, other than Liens expressly
permitted by Section 6.10 and Liens that will be discharged in accordance with
the Plan of Reorganization.
(b) Since the Effective Date, each Obligor has complied with all
obligations under all material leases to which it is a party and all such
leases are in full force and effect. Each Obligor enjoys peaceful and
undisturbed possession under all such material leases.
(c) As of the Effective Date, no Obligor has received any notice of, nor
has any knowledge of, any pending or contemplated condemnation proceeding
affecting the Mortgaged Properties or any sale or disposition thereof in lieu
of condemnation.
(d) As of the Effective Date, no Obligor is obligated under any right of
first refusal, option or other
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contractual right to sell, assign or otherwise dispose of any Mortgaged
Property or any interest therein.
SECTION 3.9. Capitalization. As of the Effective Date, the authorized
Capital Stock of the Company consists of 1,000 shares of common stock, $.01 par
value. After giving effect to the transactions contemplated by the Note
Documents and the Other Transaction Documents, on the Effective Date (i)
10,000,000 membership interests of the Guarantor will be issued and outstanding
and (ii) 1,000 shares of common stock of the Company will be issued and
outstanding, and each will be owned by such persons and to such extent as set
forth on 3.9(a). The shares of Capital Stock so indicated on Schedule 3.9(a)
have been duly and validly issued, and are fully paid and non-assessable.
Schedule 3.9(b) sets forth as of the Effective Date the name and jurisdiction
of incorporation of each Subsidiary of the Guarantor or the Company and, as to
each such Subsidiary, the percentage of each class of capital stock owned by
the Guarantor, the Company or any Subsidiary of the Guarantor or the Company.
SECTION 3.10. Solicitation; Access to Information. Neither the Company
nor any Person acting on behalf of the Company has, either directly or
indirectly, sold or offered for sale to any Person any of the Notes or any
other similar security of the Company except as contemplated by this Agreement
and by the Other Transaction Documents, and the Company represents that neither
the Company nor any person acting on its behalf other than the Purchasers and
their respective Affiliates will sell or offer for sale to any Person any such
security to, or solicit any offers to buy any such security from, or otherwise
approach or negotiate in respect thereof with, any Person or Persons so as
thereby to bring the issuance or sale of any of the Notes within the provisions
of Section 5 of the Securities Act.
SECTION 3.11. Non-Fungibility. When the Notes are issued and delivered
pursuant to this Agreement, the Notes will not be of the same class (within the
meaning of Rule 144A under the Securities Act) as securities that are (i)
listed on a national securities exchange registered under Section 6 of the
Exchange Act or (ii) quoted in a U.S. automated inter-dealer quotation system.
SECTION 3.12. Not an Investment Company. The Company is not an investment
company, open-end investment trust, unit investment trust or face-amount
certificate company within the meaning of the Investment Company Act of 1940,
as amended.
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SECTION 3.13. Solvency. Immediately after the consummation of the
transactions contemplated by the Note Documents and the Other Transaction
Documents to occur on the Effective Date, (i) the fair value of the assets of
each Obligor, at a fair valuation, will exceed its debts and liabilities,
subordinated, contingent or otherwise; (ii) the present fair saleable value of
the property of each Obligor will be greater than the amount that will be
required to pay the probable liability of its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other liabilities
become absolute and matured; (iii) each Obligor will be able to pay its debts
and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) each Obligor will not have
unreasonably small capital with which to conduct the business in which it is
engaged as such business is now conducted and is proposed to be conducted
following the Effective Date.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
SECTION 4.1. Purchase for Investment; Authority; Binding Agreement. Each
Purchaser represents and warrants to the Company that at each Time of Purchase:
(a) such Purchaser is acquiring its Notes solely for investment
purposes and not with a view toward, or for sale in connection with, any
distribution thereof;
(b) such Purchaser is an Accredited Investor within the meaning of
Rule 501(a) under the Securities Act and the Notes to be acquired by it
pursuant to this Agreement are being acquired for its own account and
such Purchaser will not offer, sell, transfer, pledge, hypothecate or
otherwise dispose of the Notes unless pursuant to a transaction
either registered under, or exempt from registration under, the
Securities Act; and
(c) such Purchaser has such knowledge and experience in financial
and business matters so as to be capable of evaluating the merits and
risks of its investment in the Notes and such Purchaser is capable of
bearing the economic risks of such investment.
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ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. Conditions to Effectiveness. This Agreement shall become
effective on the date (the "Effective Date") on which all of the following
conditions have been satisfied:
(a) this Agreement shall have been duly executed and delivered by
the Company to the Initial Purchaser;
(b) a security agreement, substantially in the form of Exhibit D
(such agreement, as amended, supplemented or otherwise modified from time
to time, being the "Security Agreement"), and a pledge agreement,
substantially in the form of Exhibit F (such agreement, as amended,
supplemented or otherwise modified from time to time, being the "Pledge
Agreement"), shall be duly executed and delivered by the Company and in
favor of the Collateral Agent for its benefit and the benefit of the
Purchasers, the holders of the Notes and the other secured parties named
therein;
(c) deeds of trust or mortgages covering the Real Property and
Leasehold Interests of each Obligor shall have been duly executed and
delivered by the relevant Obligor in favor of the Collateral Agent for
its benefit and the benefit of the Purchasers, the holders of the Notes
and the other secured parties named therein, substantially in the form of
Exhibit C (such deeds of trust or mortgages (as amended, supplemented or
otherwise modified from time to time) that are executed by the Obligors,
being the "Mortgages");
(d) each of the Parent Guarantee Agreement, the Subsidiary
Guarantee Agreement, the Assignment of Contracts, the Indemnity Agreement
and the Intercreditor Agreement shall have been duly executed and
delivered by each of the parties thereto;
(e) Uniform Commercial Code financing statements showing each
Obligor as debtor and the Collateral Agent as secured party shall have
been filed or delivered to the Initial Purchaser or the Collateral Agent
for filing and all Pledged Securities (as defined in the Pledge
Agreement) shall have been duly and validly pledged thereunder to the
Collateral Agent and certificates representing such securities,
accompanied by instruments of transfer and stock powers endorsed in
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blank, shall be in the actual possession of the Senior Collateral Agent
(as defined in the Security Agreement);
(f) each of the Other Transaction Documents shall be in full force
and effect and in form and substance satisfactory to the Initial
Purchaser and each of the conditions to the parties' obligations under
the Other Transaction Documents shall be satisfied or, with the prior
written consent of the Initial Purchaser, waived and the Initial
Purchaser shall have received a copy of each opinion, report or other
document required to be delivered by or on behalf of any Obligor, with a
letter from each person delivering any such opinion, report or other
document authorizing reliance thereon by the Initial Purchaser, all in
form and substance satisfactory to the Initial Purchaser;
(g) the Recapitalization shall have been consummated in accordance
with the Other Transaction Documents;
(h) the Initial Purchaser shall have received evidence satisfactory
to it of the consummation of all other financings and transactions
contemplated to be consummated prior to or on the Effective Date,
including without limitation (i) the closing of the Credit Agreement,
(ii) the issuance of the Third Priority Notes, (iii) the entry by the
Court, on or prior to December 31, 1996, of the Order approving
confirmation of the Plan of Reorganization, the Note Documents and the
Other Transaction Documents and the transactions contemplated thereby,
which Order shall not be subject to any appeal or stay and with respect
to which the Court shall not have entered any reversal, modification or
vacatur, in whole or in part, and (iv) the emergence of the Company and
the Guarantor from Chapter 11 proceedings and the consummation of the
transactions contemplated by the Plan of Reorganization in accordance
with the Plan of Reorganization, all on terms and conditions satisfactory
to the Initial Purchaser;
(i) the Initial Purchaser shall have received an opinion, dated the
Effective Date, of each of Weil, Gotshal & Xxxxxx LLP, counsel for the
Company and the Guarantor, and Sonnenschein, Nath & Xxxxxxxxx, Missouri
counsel for the Company, in each case in form and substance satisfactory
to the Initial Purchaser and substantially to the effect set forth in
Exhibits H and I respectively, and shall have received, in form and
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substance satisfactory to the Initial Purchaser, such corporate
resolutions, certificates and other documents as the Initial Purchaser
shall reasonably request in writing prior to the Effective Date;
(j) the Initial Purchaser shall have received evidence satisfactory
to it that all governmental, shareholder and third party consents and
approvals necessary in connection with the Recapitalization and the other
transactions contemplated by the Note Documents and by the Other
Transaction Documents have been received;
(k) there shall exist no action, suit, investigation, litigation or
proceeding pending or threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect the Recapitalization
or the Notes or any of the transactions contemplated by the Note
Documents or by the Other Transaction Documents or that could have a
material adverse effect on the Recapitalization or the Notes or any of
the other transactions contemplated by the Note Documents or the Other
Transaction Documents or on the business, condition (financial or
otherwise), operations, performance, properties or prospects of the
Company;
(l) there shall not exist any Default or Event of Default;
(m) the representations and warranties of the Company contained in
each Note Document shall be true and correct in all material respects on
and as of the Effective Date as if made on and as of such time and the
Company shall have performed and complied in all material respects with
all covenants and agreements required by each Note Document to be
performed by it or complied with by it at or prior to the Effective Date;
and
(n) all reasonable expenses due and payable to the Initial
Purchaser or any of its Affiliates in connection with the transactions
contemplated by the Note Documents or the Other Transaction Documents
shall have been paid or duly provided for in full.
Upon the satisfaction of the foregoing conditions, the Initial Purchaser shall
promptly notify the Company of the Effective Date, and such notice shall be
conclusive and binding on all parties hereto.
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SECTION 5.2. Conditions to each Purchaser's Obligations to Purchase. The
obligation of each Purchaser to purchase the Notes to be issued and sold by the
Company hereunder pursuant to Section 2.1(a) is subject to the satisfaction of
the following conditions contemporaneously with each Time of Purchase:
(a) the fact that, immediately prior to such Time of Purchase, the
sum of the aggregate amount available for borrowing by the Company under
the Credit Agreement plus the aggregate amount of cash, cash equivalents
and Permitted Cash Equivalents of the Company and its Subsidiaries shall
be less than $5,000,000 and such Purchaser shall have received a
certificate from the Company to the foregoing effect;
(b) the fact that, immediately after such Time of Purchase, the
aggregate outstanding principal amount of the Notes will not exceed the
aggregate amount of the Purchase Commitments;
(c) the fact that the representations and warranties of each
Obligor contained herein and in the other Note Documents shall be true
and correct in all material respects on and as of such Time of Purchase
as if made on and as of such time;
(d) each Purchaser shall have received the Notes, duly executed by
the Company in the denominations and registered in the names specified in
or pursuant to Section 2.2(c);
(e) the fact that, immediately before and after such Time of
Purchase, there shall exist no Default or Event of Default specified in
Section 3(a)(i), 3(a)(vi), 3(a)(vii) or 3(a)(viii) of the Notes;
(f) all reasonable expenses due and payable to such Purchaser or
any of its Affiliates in connection with the transactions contemplated by
the Note Documents shall have been paid or duly provided for in full;
(g) the fact that, at the time of their issuance, the Notes shall
not be of the same class (within the meaning of Rule 144A under the
Securities Act) as securities that are (i) listed on a national
securities exchange registered under Section 6 of the Exchange Act or
(ii) quoted in a U.S. automated inter-dealer quotation system; and
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(h) the fact that no order, decree, injunction or judgment
enjoining the issuance of the Notes shall be in effect.
Each purchase and sale of Notes hereunder shall be deemed to be a
representation and warranty by the Company at the Time of Purchase of such
purchase and sale as to the facts specified in clauses (a), (b), (c), (e), (g)
and (h) of this section.
SECTION 5.3. Conditions to the Company's Obligations to Sell. The
obligations of the Company to issue and sell to each Purchaser the Notes
pursuant to this Agreement are subject to the satisfaction, at or prior to each
Time of Purchase, of the following conditions:
(a) the representations and warranties of such Purchaser contained
herein shall be true and correct in all material respects on and as of
such Time of Purchase as if made on and as of such time and such
Purchaser shall have performed and complied in all material respects with
all agreements required by this Agreement to be performed or complied
with by such Purchaser at or prior to such Time of Purchase; and
(b) the issue and sale of the Notes by the Company shall not be
prohibited by any applicable law, court order or governmental regulation.
ARTICLE VI
COVENANTS
Each of the Company and the Guarantor hereby agrees that during the Credit
Availability Period and thereafter so long as any Notes remain outstanding and
unpaid or any other amount is owing to any Purchaser or any holder from time to
time of the Notes, and for the benefit of such Purchasers and such holders:
SECTION 6.1. Information. The Company and the Guarantor will deliver to
each Purchaser and each holder of Notes:
(a) as soon as available and in any event within 90 days after the
end of each fiscal year of the Company, the consolidated balance sheets
of the Company and the Guarantor as of the end of such fiscal year and
the related consolidated statements of income and cash flows for such
fiscal year, setting forth in each case
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in comparative form the figures for the previous fiscal year and the
figures for such fiscal year, all reported on in a manner acceptable to
the Commission without qualification by independent public accountants of
nationally recognized standing;
(b) as soon as available and in any event within 45 days after the
end of each of the first three fiscal quarters of each fiscal year of the
Company, the consolidated balance sheets of the Company and the Guarantor
as of the end of such quarter and the related consolidated statements of
income and cash flows for such quarter and for the portion of the fiscal
year of the Company and the Guarantor ended at the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding quarter and the corresponding portion of the Company's and
the Guarantor's previous fiscal year, all certified (subject to footnote
presentation and normal year-end adjustments) as to fairness of
presentation, generally accepted accounting principles and consistency by
the chief financial officer or the chief accounting officer of each of
the Company and the Guarantor;
(c) simultaneously with the delivery of each set of financial
statements referred to in clauses (a) and (b) above, a certificate of the
chief financial officer or the chief accounting officer of each of the
Company and the Guarantor stating that no Default has occurred and is
continuing on such date or, if as of the date of such delivery a Default
shall have occurred and be continuing, setting forth the details of such
Default and the action that the Company or the Guarantor, as the case may
be, is taking or proposes to take with respect thereto;
(d) together with each delivery of financial statements pursuant to
(a) above, a written statement by the independent public accountants
giving the report thereon (i) stating that their audit examination has
included a review of the terms of this Agreement as it relates to
accounting matters, (ii) stating whether, in connection with their audit
examination, any Default has come to their attention, and if such a
condition or event has come to their attention, specifying the nature and
period of existence thereof, and (iii) stating that based on their audit
examination nothing has come to their attention that causes them to
believe that the information contained in the certificate delivered
therewith pursuant to (c) above is not correct;
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(e) within ten days after any officer of the Company or the
Guarantor obtains knowledge of a Default, a certificate of the chief
financial officer or the chief accounting officer of the relevant entity
setting forth the details thereof and the action that such entity is
taking or proposes to take with respect thereto;
(f) promptly upon the mailing thereof to the members of the
Guarantor or the shareholders of the Company generally, copies of all
financial statements, reports and proxy statements so mailed;
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent) and reports on Forms 10-K, 10-Q
and 8-K (or their equivalents) that the Company or the Guarantor has
filed with the Commission; and
(h) from time to time such additional information regarding the
financial position or business of any of the Guarantor, the Company and
its Subsidiaries as any Purchaser or the holder of any Note may
reasonably request.
SECTION 6.2. Inspection of Property, Books and Records; Consultation with
Management. (a) Each of the Company and the Guarantor will keep, and will
cause each Subsidiary of the Company to keep, proper books of record and
account in which full, true and correct entries shall be made of all dealings
and transactions in relation to their respective businesses and activities; and
will permit, and will cause each Subsidiary of the Company to permit,
representatives of the Purchasers to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books
and records and to discuss their respective affairs, finances and accounts with
their respective directors, officers, employees and independent public
accountants, all at such reasonable times and as often as may be desired.
(b) In addition to the foregoing, the Company and the Guarantor will make
their respective officers and directors available from time to time to
representatives of the Purchasers for consultation and advice regarding their
affairs and operations, at such times and in such manner as may be requested by
the Purchasers.
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SECTION 6.3. Supplemental Information. If at any time the Company is not
subject to the requirements of Section 13 or 15(d) of the Exchange Act, the
Company will promptly furnish at its expense, upon request, for the benefit of
holders from time to time of Notes, to holders of Notes and prospective
purchasers of Notes information satisfying the requirements of subsection
(d)(4)(i) of Rule 144A (or any successor provision thereof) under the
Securities Act.
SECTION 6.4. Use of Proceeds. The proceeds from the issuance and sale of
the Notes by the Company pursuant to this Agreement shall be used for general
corporate purposes, including the repayment or prepayment of any Debt to the
extent permitted hereunder. None of the proceeds from the Notes have been or
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose which might cause any of the loans under this Agreement to be
considered a "purpose credit" within the meaning of Regulation G, U or X of the
Board of Governors of the Federal Reserve.
SECTION 6.5. Restrictions on Certain Amendments. Without the consent of
the Majority Holders, neither the Company nor the Guarantor will permit any
waiver, modification, amendment or release of any Third Priority Note Document
that would shorten the average life or stated final maturity of, or require any
earlier scheduled principal payment date or date for the payment of any cash
interest on, any Debt outstanding thereunder.
SECTION 6.6. Investment Company Act. Neither the Company nor the
Guarantor will be or become an investment company, open-end investment trust,
unit investment trust or face-amount certificate company within the meaning of
the Investment Company Act of 1940, as amended.
SECTION 6.7. Compliance with Third Priority Note Indenture. Each of the
Company and the Guarantor will comply with each of the covenants set forth in
Article X of the Third Priority Note Indenture as in effect on the Effective
Date.
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SECTION 6.8. Mergers, Consolidations, Etc. (a) The Guarantor shall not
consolidate with or merge into any other Person or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all its properties
and assets as an entirety, unless either (i) the Guarantor shall be the
continuing Person, or (ii) the Person (if other than the Guarantor) formed by
such consolidation or into which the Guarantor is merged or the Person which
acquires by conveyance, transfer, lease or disposition the properties and
assets of the Guarantor (the "Surviving Entity") shall be a corporation duly
organized and validly existing under the laws of the United States of America
or any state thereof and shall expressly assume, by an amendment or supplement
hereto, executed and delivered to each Purchaser and each holder of Notes, in
form satisfactory to each such Purchaser and holder, the Parent Guarantee
Agreement and the performance and observance of any covenant of this Agreement
and the Security Documents on the part of the Guarantor to be performed and
observed and this Agreement and the Security Documents shall remain in full
force and effect; and
(i) immediately after giving effect to such
transaction, and treating any Debt incurred by the
Guarantor as a result of such transaction as having been
incurred at the time of such transaction, (A) the Guarantor
or the Surviving Entity would not be liable with respect to
any Debt which is not permitted under Section 10.8 of the
Third Priority Note Indenture (as in effect on the date
hereof) and (B) the Consolidated Net Worth of the
Guarantor, the Company or the Surviving Entity and their
Subsidiaries would be no less than the Consolidated Net
Worth of the Guarantor, the Company and their Subsidiaries
immediately prior to such transaction;
(ii) no Event of Default under Section 3 of the Notes
has occurred or is continuing at the time of such
transaction; and
(iii) the Guarantor has delivered to each Purchaser
and each holder of Notes a certificate signed by the
chairman of the board, the chief executive officer, the
president or the treasurer of the Guarantor, stating that
such consolidation, merger, conveyance, transfer, lease or
acquisition and, if an amendment or supplement is
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required in connection with such transaction, such amendment
or supplement complies with this Section and that all conditions
precedent herein provided for relating to such transaction have
been complied with.
(b) The Company shall not consolidate with or merge into any other Person
or permit any other Person to consolidate with or merge into the Company or
transfer, convey, sell, lease or otherwise dispose of all or substantially all
of its properties or assets as an entirety, unless:
(1) the Company is the surviving Person; or
(2) in case the Company shall consolidate with or merge with or into
another Person or transfer, convey, sell, lease or otherwise dispose of
all or substantially all of its properties or assets as an entirety, and
the Company is not the surviving Person (a "Non-Surviving Combination"),
the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by transfer, conveyance, sale, lease
or otherwise the assets of the Company substantially as an entirety (for
purposes of this Section 6.8, a "Successor Company") shall be a
corporation organized and validly existing under the laws of the United
States of America, any State thereof or the District of Columbia and
shall expressly assume, by an amendment or supplement hereto, executed
and delivered to each Purchaser and each holder of Notes in form
satisfactory to each such Purchaser and holder, the due and punctual
payment of the principal of (and premium, if any) and interest on all the
Notes and the performance of every covenant of this Agreement on the part
of the Company to be performed or observed; and
(i) immediately after giving effect to such
transaction, and treating any Debt incurred by the Company
as a result of such transaction as having been incurred at
the time of such transaction, (A) the Company or the
Successor Company would not be liable with respect to any
Debt which is not permitted under Section 10.8 of the Third
Priority Note Indenture (as in effect on the date hereof)
and (B) the Consolidated Net Worth of the Guarantor, the
Company or the Successor Company and their Subsidiaries
would be no less than the Consolidated Net Worth of the
Guarantor, the Company and their
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Subsidiaries immediately prior to such transaction;
(ii) no Event of Default under Section 3 of the Notes
has occurred or is continuing at the time of such
transaction; and
(iii) the Company has delivered to each Purchaser and
each holder of Notes a certificate signed by the chairman
of the board, the chief executive officer, the president or
the treasurer of the Company, stating that such
consolidation, merger, conveyance, transfer, lease or
acquisition and, if an amendment or supplement is required
in connection with such transaction, such amendment or
supplement complies with this Section and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 6.9. Third Priority Notes. Neither the Guarantor nor
the Company shall permit, nor suffer any of its Subsidiaries to, purchase,
redeem, retire, defease or otherwise acquire for value, deposit any monies with
any Person with respect to, or make any payment or prepayment of the principal
of or interest on, or any other amount owing in respect of, any Third Priority
Notes other than the payment of interest on the Third Priority Notes required
pursuant to the terms thereof.
SECTION 6.10. Permitted Priority Liens. Other than Permitted
Priority Liens, the Company will not, and will not permit any
Subsidiary to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets of the Company or any Subsidiary of the
Company having equal or greater priority than the Liens on the Collateral
securing the obligations of the Company under the Note Documents.
SECTION 6.11. Security Interests. (a) Except as otherwise
specified in the Security Documents or in the Intercreditor Agreement,
upon a request by the Collateral Agent, each Obligor will, and will cause each
of its Subsidiaries to, perform any and all acts and execute any and all
documents (including, without limitation, the execution, amendment or
supplementation of any financing statement and continuation statement or other
statement) for filing under the provisions of the Uniform Commercial Code and
the rules and regulations thereunder, or any other statute, rule or regulation
of any applicable federal, state
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or local jurisdiction, including any filings in local real estate land
record offices which are necessary or advisable, from time to time, in order to
grant and maintain in favor of the Collateral Agent for its benefit and the
benefit of the Purchasers and the holders of Notes a valid and perfected Lien
on the Collateral.
(b) Each Obligor shall undertake to deliver or cause to be delivered to
the Collateral Agent from time to time such other documentation, instruments,
consents, authorizations, approvals and orders as may be required pursuant to
this Section 6.11 or as the Collateral Agent or the Majority Holders shall deem
reasonably necessary or advisable to perfect or maintain the Liens or the
priority thereof for its benefit and the benefit of the Purchasers and the
holders of Notes, including, without limitation, assets that may become
Collateral after the Effective Date.
(c) The Company will cause each of its subsequently acquired or organized
Subsidiaries (other than any Inactive Subsidiary) and each of its Subsidiaries
that ceases to be an Inactive Subsidiary to execute a supplement to the
Subsidiary Guarantee Agreement and, at such time as there shall be two or more
Subsidiary Guarantors, the Company shall, and shall cause each Subsidiary
Guarantor to, execute and deliver to the Collateral Agent the Indemnity,
Subrogation and Contribution Agreement substantially in the form of Exhibit J
(as amended or modified and in effect from time to time, the "Indemnity
Agreement") and each other applicable Security Document in favor of the
Collateral Agent as shall be deemed necessary by the Majority Holders to create
a valid, perfected and enforceable Lien on and security interest in the
Collateral of such Subsidiary in favor of the Collateral Agent for its benefit
and the benefit of the Purchasers and the holders of the Notes, and the
Collateral Agent shall receive a favorable opinion, in form and substance
satisfactory to the Majority Holders, as to the legal, valid, binding and
enforceable nature of the agreements and instruments delivered to the
Collateral Agent in accordance with this clause (c).
ARTICLE VII
TRANSFERS
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SECTION 7.1. Restrictions on Transfer. From and after their respective
dates of issuance, none of the Notes shall be transferable except upon the
conditions specified in Sections 7.2 and 7.3 (which conditions are intended to
ensure compliance with the provisions of the Securities Act in respect of the
Transfer of any of such Notes or any interest therein) and Section 7.4. Each
Purchaser will cause any proposed transferee of any Notes (or any interest
therein) held by it to agree to take and hold such Notes (or any interest
therein) subject to the provisions and upon the conditions specified in this
Section 7.1 and in Sections 7.2 through 7.4.
SECTION 7.2. Restrictive Legends. (a) Each certificate for the Notes
issued to any Purchaser or to a subsequent transferee shall (unless otherwise
permitted by the provisions of Section 7.2(b) or Section 7.3) include a legend
in substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD
UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE,
AND THEN ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH
IN THE NOTE PURCHASE AGREEMENT DATED AS OF SEPTEMBER 17, 1996 A COPY OF
WHICH MAY BE OBTAINED FROM THE COMPANY AT ITS PRINCIPAL EXECUTIVE OFFICE.
(b) Any holders of Notes registered pursuant to the Securities Act and
qualified under applicable state securities laws may exchange such Notes on
transfer for new securities that shall not bear the legend set forth in
paragraph (a) of this Section 7.2.
SECTION 7.3. Notice of Proposed Transfers. (a) Five Business Days prior
to any proposed Transfer (other than Transfers of Notes (i) registered under
the Securities Act, (ii) to an Affiliate of any Purchaser or a general
partnership, limited liability company or similar entity in which such
Purchaser or an Affiliate of such Purchaser is one of the general partners,
managers or entities performing similar functions or (iii) to be made in
reliance on Rule 144A under the Securities Act) of any Notes, the holder
thereof shall give written notice to the Company of such Notes of such holder's
intention to effect such Transfer, setting forth the manner and circumstances
of the proposed Transfer, and shall be accompanied by (i) such representation
letters in form and substance reasonably satisfactory to the Company to ensure
compliance with the
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provisions of the Securities Act and (ii) such letters in form and
substance reasonably satisfactory to the Company from each such transferee
stating such transferee's agreement to be bound by the terms of this Agreement.
Such proposed Transfer may be effected only if the Company shall have received
such notice of transfer, representation letters and other letters referred to
in the immediately preceding sentence, whereupon the holder of such Notes shall
be entitled to Transfer such Notes in accordance with the terms of the notice
delivered by the holder to the Company, subject to Section 7.4. Each
certificate evidencing the Notes transferred as above provided shall bear the
legend set forth in Section 7.2(a) except that such certificate shall not bear
such legend if an opinion of counsel reasonably satisfactory to the Company
addressed to the Company to the effect that neither such legend nor the
restrictions on Transfer in Sections 7.1 through 7.3 are required in order to
ensure compliance with the provisions of the Securities Act.
(b) Five Business Days prior to any proposed Transfer of any Notes to be
made in reliance on Rule 144A under the Securities Act ("Rule 144A"), the
holder thereof shall give written notice to the Company of such holder's
intention to effect such Transfer, setting forth the manner and circumstances
of the proposed Transfer and certifying that such Transfer will be made (i) in
full compliance with Rule 144A and (ii) to a transferee that (A) such holder
reasonably believes to be a "qualified institutional buyer" within the meaning
of Rule 144A and (B) is aware that such Transfer will be made in reliance on
Rule 144A. Such proposed Transfer may be effected only if the Company shall
have received such notice of transfer, whereupon the holder of such Notes shall
be entitled to Transfer such Notes in accordance with the terms of the notice
delivered by the holder to the Company. Each certificate evidencing the Notes
transferred as above provided shall bear the legend set forth in Section
7.2(a).
SECTION 7.4. Transfer to Single Transferee. Unless the Company has
otherwise consented, any Transfer of Notes at any time by any holder thereof,
except in the case of any transfer by the Initial Purchaser or any of its
Affiliates to any of their respective Affiliates, shall be made to a single
transferee and shall include all Notes held by such holder at such time.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Notices. All notices, demands and other communications to
any party hereunder shall be in writing (including telecopier or similar
writing) and shall be given to such party at its address set forth on the
signature pages hereof, or such other address as such party may hereinafter
specify for the purpose to the other parties. Each such notice, demand or
other communication shall be effective (i) if given by telecopy, when such
telecopy is transmitted to the telecopy number specified on the signature page
hereof, (ii) if given by mail, four days after such communication is deposited
in the mail with first class postage prepaid, addressed as aforesaid or (iii)
if given by any other means, when delivered at the address specified in this
Section.
SECTION 8.2. No Waivers; Powers and Remedies Cumulative; Amendments. (a)
No failure or delay on the part of any party in exercising any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
(b) No right or remedy herein conferred upon or reserved to the Purchasers
or the holders from time to time of Notes is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy. Every power and remedy given by this Agreement,
by the Notes or any other Note Document or by law may be exercised from time to
time, and as often as shall be deemed expedient, by the Purchasers or the
holders from time to time of the Notes.
(c) Any provision of this Agreement or the Notes may be amended,
supplemented or waived if, but only if, such amendment, supplement or waiver is
in writing and is signed by the Company and the Majority Holders, any provision
of the Security Documents may be amended, supplemented or waived in accordance
with the terms thereof, and the security interest in any Collateral may be
released only with the consent of the Majority Holders; provided, that without
the consent of each Purchaser and each holder of any
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Note affected thereby, an amendment, supplement or waiver may not (a)
reduce the aggregate principal amount of Notes whose holders must consent to an
amendment, supplement or waiver, (b) reduce the rate or extend the time for
payment of interest on any Note, (c) reduce the principal amount of or extend
the stated maturity of any Note, (d) make any Note payable in money or property
other than as stated in the Notes or (e) release all or substantially all of
the Collateral.
SECTION 8.3. Indemnification. The Company agrees to indemnify and hold
harmless each Purchaser, its Affiliates, each Person, if any, who controls such
Purchaser, within the meaning of the Securities Act or the Exchange Act (a
"Controlling Person"), each other holder of Notes and the respective limited or
general partners, agents, employees, officers, trustees and directors of any
such Purchaser, its Affiliates, any such Controlling Person and any such holder
(each an "Indemnified Party" and collectively, the "Indemnified Parties"), from
and against any and all losses, claims, damages, liabilities and expenses
(including, without limitation and as incurred, reasonable costs of
investigating, preparing or defending any such claim or action, whether or not
such Indemnified Party is a party thereto, provided that the Company shall not
be obligated to advance such costs to any Indemnified Party other than the
Initial Purchaser unless it has received from such Indemnified Party an
undertaking to repay the Company the costs so advanced if it should be
determined by final judgment of a court of competent jurisdiction that such
Indemnified Party was not entitled to indemnification hereunder with respect to
such costs) that may be incurred by such Indemnified Party in connection with
any investigative, administrative or judicial proceeding brought or threatened
that relates to or arises out of or is in connection with any activities
contemplated by this Agreement, any other Note Document or any other services
rendered in connection herewith, including, but not limited to, losses, claims,
damages, liabilities or expenses arising out of or based upon any untrue
statement or any alleged untrue statement of a material fact or any omission or
any alleged omission to state a material fact in any of the disclosure or
offering or confidential information documents (the "Disclosure Documents")
pertaining to any of the transactions or proposed transactions contemplated
herein (all of the foregoing, "Indemnified Liabilities"), provided that the
Company will not be responsible for any claims, liabilities, losses, damages or
expenses that are determined by final judgment of a court of competent
jurisdiction to result from such Indemnified Party's gross negligence, willful
misconduct or bad faith. To the extent that the
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undertaking to indemnify and hold harmless set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Company shall contribute the maximum portion which it is permitted
to pay and satisfy under applicable law to the payment and satisfaction of all
Indemnified Liabilities incurred by the Indemnities or any of them except to
the extent set forth in the proviso of the preceding sentence. THE FOREGOING
INDEMNIFICATION SHALL APPLY WHETHER OR NOT SUCH INDEMNIFIED LIABILITIES ARE IN
ANY WAY OR TO ANY EXTENT CAUSED, IN WHOLE OR IN PART, BY ANY NEGLIGENT ACT OR
OMISSION OF ANY KIND BY, OR ARISING UNDER STRICT LIABILITY OF, ANY PURCHASER OR
ANY OTHER HOLDER OF NOTES, PROVIDED ONLY THAT NEITHER ANY PURCHASER NOR ANY
OTHER HOLDER OF NOTES SHALL BE ENTITLED UNDER THIS SECTION TO RECEIVE
INDEMNIFICATION FOR THAT PORTION, IF ANY, OF ANY INDEMNIFIED LIABILITIES WHICH
ARISES FROM ITS OWN INDIVIDUAL GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS
DETERMINED IN A FINAL JUDGEMENT. The Company also agrees that no Indemnified
Party shall have any liability for claims, liabilities, damages, losses or
expenses, including legal fees, incurred by the Company in connection with this
Agreement or any other Note Document unless they are determined by final
judgment of a court of competent jurisdiction to result from such Indemnified
Party's gross negligence, willful misconduct or bad faith.
The indemnification, contribution and expense reimbursement obligations
set forth in this Section 8.3 (i) shall be in addition to any liability the
Indemnifying Parties may have to any Indemnified Party at common law or
otherwise, (ii) shall survive the termination of this Agreement and the other
Note Documents and the payment in full of the Notes and (iii) shall remain
operative and in full force and effect regardless of any investigation made by
or on behalf of any Purchaser or any other Indemnified Party.
SECTION 8.4. Expenses; Documentary Taxes. The Company agrees to pay all
reasonable out-of-pocket costs, expenses and other payments in connection with
the purchase and sale of the Notes as contemplated by this Agreement including
without limitation (i) fees and disbursements of special counsel for the
Initial Purchaser incurred in connection with the preparation of the Note
Documents, (ii) all out-of-pocket expenses of the Initial Purchaser, including
fees and disbursements of counsel, in connection with any waiver or consent
hereunder or under the other Note Documents or any amendment hereof or thereof
or any Default or alleged Default hereunder or thereunder and (iii) all
reasonable out-of-pocket expenses of each Purchaser and each holder of Notes,
including fees and disbursements of
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counsel, in connection with any collection, bankruptcy, insolvency and other
enforcement proceedings resulting therefrom. In addition, the Company agrees to
pay any and all stamp, transfer and other similar taxes, assessments or charges
payable in connection with the execution and delivery of this Agreement or any
other Note Document or the issuance of the Notes.
SECTION 8.5. Payment. The Company agrees that, so long as MS Group shall
own any Notes purchased by it from the Company hereunder, the Company will make
payments to MS Group of all amounts due thereon by wire transfer by 1:00 P.M.
(New York City time) on the date of payment to such account as specified
beneath the MS Group's name on the signature page hereof or to such other
account or in such other similar manner as MS Group may designate to the
Company in writing.
SECTION 8.6. Successors and Assigns. (a) This Agreement shall be binding
upon the parties hereto and their respective successors and assigns except that
the Company may not assign or otherwise transfer its rights or obligations
under this Agreement or the other Note Documents to any other Person without
the prior written consent of the Majority Holders. Subject to the provisions
of Article VII, any holder of Notes may transfer its Notes to any Person, and,
subject to Section 8.6(b), any Purchaser may assign all or any part of its
Purchase Commitment to any Person. Upon execution and delivery of an
instrument of assignment and assumption by such transferee to such transferor
Purchaser and the Company, such transferee shall be a Purchaser party to this
Agreement and shall have the rights and obligations of a Purchaser party to
this Agreement as set forth in such instrument, and the transferor Purchaser
shall be released from its obligations hereunder to a corresponding extent.
All provisions hereunder purporting to give rights to Xxxxxx Xxxxxxx and its
Affiliates or to holders of Notes are for the express benefit of such Persons.
(b) If any Purchaser shall fail to perform its obligation to purchase
Notes hereunder, the amount of the Purchase Commitment of such Purchaser shall,
at the time of any such failure, be immediately assumed by MS Group so that the
aggregate amount of the Purchase Commitments to purchase Notes provided for
herein shall not be reduced. No such assumption shall relieve any Purchaser
from its Purchase Commitment, and each such defaulting Purchaser agrees to
repay on demand MS Group any Notes purchased by MS Group in respect of such
assumed Purchase Commitment, together with interest thereon from the date of
such purchase to but
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excluding the date of repayment at the rate of 12% per annum.
SECTION 8.7. Brokers. The Company represents and warrants that it has
not employed any broker or finder who might be entitled to any brokerage,
finder's or other fee or commission in connection with the Recapitalization or
the sale of the Notes.
SECTION 8.8. Collateral Agent; Security Documents. In order to secure
the due and punctual payment of the obligations under the Note Documents and
the Third Priority Notes, the Company, the Guarantor and the Collateral Agent
have entered into or will enter into, as the case may be, the Security
Agreement and the other Security Documents to grant, bargain, sell, release,
hypothecate, assign, mortgage, pledge, transfer, confirm and grant to the
Collateral Agent for the benefit of the Secured Parties (as defined therein) a
security interest in the property constituting the Collateral described
therein. The Collateral Agent is hereby expressly authorized and directed to
enter into, and to exercise the rights and powers granted by, the Intercreditor
Agreement, the Security Agreement and any other Security Documents. Each
Purchaser and each subsequent holder of the Notes hereby expressly agrees to be
bound by the Intercreditor Agreement and the Security Documents and
acknowledges that, so long as the Notes remain outstanding, the Collateral and
Real Property (as defined in the Security Agreement) are to be held by the
Collateral Agent for the benefit of the Purchasers, the other holders of Notes
and the holders of the Third Priority Notes, and their respective successors
and assigns, without distinction, except that, after foreclosure or upon the
exercise of remedies pursuant to the Security Documents, any proceeds shall be
applied first to the payment in full of all obligations owing hereunder and
under the Notes and thereafter to the payment of the Third Priority Notes.
SECTION 8.9. Confidentiality. Each Purchaser agrees to keep
confidential (and to use its best efforts to cause its respective agents and
representatives to keep confidential) the Information (as defined below) and
all copies thereof, extracts therefrom and analyses or other materials based
thereon, except that any Purchaser or holder of Notes shall be permitted to
disclose Information (a) to such of its respective officers, directors,
employees, agents, affiliates and representatives as need to know such
Information, (b) to the extent requested by any regulatory authority, (c) to
the extent otherwise required by applicable laws and regulations or by any
subpoena or similar legal process, (d) in connection with any suit,
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action or proceeding relating to the enforcement of its rights hereunder or
under the other Note Documents, (e) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this Section
8.9 or (ii) becomes available to any Purchaser or holder of Notes or the
Collateral Agent on a nonconfidential basis from a source other than the
Company or the Guarantor (other than information that clearly indicates that it
is intended to be confidential) or (f) to any actual or prospective assignee of
or participant in any of its rights under this Agreement or the Notes, provided
that such assignee or participant first executes and delivers to such party a
confidentiality letter containing substantially the undertakings set forth in
this Section 8.9. For the purposes of this Section, "Information" shall mean
all financial statements, certificates, reports, agreements and information
(including all analyses, compilations and studies prepared by any Purchase or
holder of Notes based on any of the foregoing) that are received from the
Company or the Guarantor and related to the Company or the Guarantor, any
shareholder of the Company or the Guarantor or any employee, customer or
supplier of the Company or the Guarantor, other than any of the foregoing that
were available to any Purchaser or holder of Notes on a nonconfidential basis
prior to its disclosure thereto by the Company or the Guarantor, and which are
in the case of Information provided after the date hereof, clearly identified
at the time of delivery as confidential. The provisions of this Section 8.9
shall remain operative and in full force and effect regardless of the
expiration and term of this Agreement.
SECTION 8.10. NEW YORK LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK. EACH PARTY HERETO HEREBY SUBMITS TO THE
NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY
FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE OTHER NOTE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY. EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE OTHER NOTE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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SECTION 8.11. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to
be invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
SECTION 8.12. Counterparts. This Agreement may be executed in any number
of counterparts each of which shall be an original with the same effect as if
the signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers, as of the date first
above written.
PREMIUM STANDARD FARMS, INC.
By /s/ X.X. Xxxxxxxxx
----------------------------
Name:
Title:
PSF HOLDINGS L.L.C.
By /s/ X.X. Xxxxxxxxx
----------------------------
Name:
Title:
XXXXXX XXXXXXX GROUP INC.
By /s/ Xxxxxx X. Xxxx
----------------------------
Name: Xxxxxx X. Xxxx
Title: Chief Financial Officer
43
