1
EXHIBIT 10.2
$12,257,000.00
NOTE PURCHASE AGREEMENT
DATED AS OF
NOVEMBER 10, 1993
BETWEEN
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
AND
CAL-MAINE FOODS, INC.
2
TABLE OF CONTENTS
[Not a part of the Agreement]
SECTION 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.01 "Accounting Period(s)" . . . . . . . . . . . . . . . . . . . . . 1
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1.02 "Affiliates" . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.03 "Assets" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
------
1.04 "Business Day" . . . . . . . . . . . . . . . . . . . . . . . . . 1
------------
1.05 "Cash Flow" . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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1.06 "Closing" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.07 "Closing Date" . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.08 "Code" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
----
1.09 "Commitment" . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.10 "Committed Revolving Credit" . . . . . . . . . . . . . . . . . . 2
--------------------------
1.11 "Consolidated Basis" . . . . . . . . . . . . . . . . . . . . . . 2
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1.12 "Controlled Group" . . . . . . . . . . . . . . . . . . . . . . . 2
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1.13 "Current Assets" . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.14 "Current Liabilities" . . . . . . . . . . . . . . . . . . . . . . 2
-------------------
1.15 "Current Ratio" . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.16 "Debt Service" . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.17 "Deed of Trust" . . . . . . . . . . . . . . . . . . . . . . . . . 2
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1.18 "Employee Benefit Plan" . . . . . . . . . . . . . . . . . . . . . 3
---------------------
1.19 "Environmental Laws" . . . . . . . . . . . . . . . . . . . . . . 3
------------------
1.20 "ERISA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
-----
1.21 "ERISA Affiliate" . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.22 "Events of Default" . . . . . . . . . . . . . . . . . . . . . . . 3
-----------------
1.23 "Fiscal Year" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.24 "Funded Debt" . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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1.25 "GAAP" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
----
1.26 "Hazardous Material" . . . . . . . . . . . . . . . . . . . . . . 3
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1.27 "Historical Financial Statements" . . . . . . . . . . . . . . . . 3
-------------------------------
1.29 "Liabilities" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.30 "Lien" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
----
1.31 "Loan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
----
1.32 "Loan Documents" . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.33 "Mortgage" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
--------
1.34 "Most Recent Balance Sheets" . . . . . . . . . . . . . . . . . . 4
--------------------------
1.35 "Multiemployer Plan" . . . . . . . . . . . . . . . . . . . . . . 4
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1.36 "Multiple Employer Plan" . . . . . . . . . . . . . . . . . . . . 4
----------------------
1.37 "Net Income" . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.38 "Net Tangible Assets" . . . . . . . . . . . . . . . . . . . . . . 4
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1.39 "Net Worth" . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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1.40 "Notes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.41 "Obligations" . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.42 "Officer's Certificate" . . . . . . . . . . . . . . . . . . . . . 5
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1.43 "PBGC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
----
1.44 "Person" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.45 "Plan" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
----
1.46 "Plan Administrator" . . . . . . . . . . . . . . . . . . . . . . 5
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1.47 "Plan Sponsor" . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.48 "Responsible Officer" . . . . . . . . . . . . . . . . . . . . . . 5
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1.49 "Security Documents" . . . . . . . . . . . . . . . . . . . . . . 5
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1.50 "Security Property" . . . . . . . . . . . . . . . . . . . . . . . 5
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1.51 "Strip" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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1.53 "Subsidiary" . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.54 "Tangible Assets" . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.55 "Tangible Net Worth" . . . . . . . . . . . . . . . . . . . . . . 6
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1.56 "Taxes" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.57 "Waste" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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1.58 "Working Capital" . . . . . . . . . . . . . . . . . . . . . . . . 6
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SECTION 2. Purchase and Sale of Notes . . . . . . . . . . . . . . . . . . . 6
--------------------------
2.01 Authorization of Notes . . . . . . . . . . . . . . . . . . . . . 6
----------------------
2.02 Sale and Purchase of Notes . . . . . . . . . . . . . . . . . . . 6
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2.03 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
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SECTION 3. Conditions of Purchase . . . . . . . . . . . . . . . . . . . . . 7
----------------------
3.01 Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . 7
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3.02 Representations and Warranties . . . . . . . . . . . . . . . . . 8
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3.03 Performance; No Default . . . . . . . . . . . . . . . . . . . . . 8
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3.04 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . 8
----------------------
3.05 Opinions of Counsel . . . . . . . . . . . . . . . . . . . . . . . 8
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3.06 Recordation; Perfection . . . . . . . . . . . . . . . . . . . . . 9
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3.07 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
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3.08 Committed Revolving Credit . . . . . . . . . . . . . . . . . . . 9
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3.09 Legal Investment . . . . . . . . . . . . . . . . . . . . . . . . 9
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3.10 No Adverse Legislation, Action or Decision, etc. . . . . . . . . 9
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3.11 Compliance with Securities Laws . . . . . . . . . . . . . . . . . 10
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3.12 Environmental Information . . . . . . . . . . . . . . . . . . . . 10
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3.13 No Actions Pending . . . . . . . . . . . . . . . . . . . . . . . 10
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3.14 Proceedings and Documents . . . . . . . . . . . . . . . . . . . . 10
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3.15 Payment of Closing Fees . . . . . . . . . . . . . . . . . . . . . 10
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3.16 Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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SECTION 4. Representations and Warranties . . . . . . . . . . . . . . . . . 10
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4.01 Good Standing . . . . . . . . . . . . . . . . . . . . . . . . . . 10
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4.02 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.03 Binding Agreement . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.04 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.05 No Conflicting Agreements . . . . . . . . . . . . . . . . . . . . 11
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4.06 Financial Condition . . . . . . . . . . . . . . . . . . . . . . . 11
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4.07 Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.08 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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4.09 Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.10 Violation of Laws, etc. . . . . . . . . . . . . . . . . . . . . . 12
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4.11 Stock of the Company, etc. . . . . . . . . . . . . . . . . . . . 12
--------------------------
4.12 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . 12
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4.13 Business and Financial Statements . . . . . . . . . . . . . . . . 13
---------------------------------
4.14 Changes, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
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4.15 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . 13
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4.16 Funded Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.17 Committed Revolving Credit . . . . . . . . . . . . . . . . . . . 14
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4.18 Title to and Condition of Properties; Liens . . . . . . . . . . . 14
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4.19 Compliance with Other Instruments . . . . . . . . . . . . . . . . 15
---------------------------------
4.20 Governmental Consents . . . . . . . . . . . . . . . . . . . . . . 15
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4.21 Permits, Patents, Trademarks, etc. . . . . . . . . . . . . . . . 15
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4.22 Offer of Notes . . . . . . . . . . . . . . . . . . . . . . . . . 16
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4.23 Status Under Certain Federal Statutes . . . . . . . . . . . . . . 16
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4.24 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . 16
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4.25 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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4.26 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . 18
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4.27 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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4.28 Compliance with Covenants . . . . . . . . . . . . . . . . . . . . 18
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4.29 Employee Controversies . . . . . . . . . . . . . . . . . . . . . 18
----------------------
SECTION 5. Company's Covenants . . . . . . . . . . . . . . . . . . . . . . . 18
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5.01 Use of Loan Proceeds . . . . . . . . . . . . . . . . . . . . . . 18
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5.02 Annual Financials . . . . . . . . . . . . . . . . . . . . . . . . 18
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5.03 Interim Financials . . . . . . . . . . . . . . . . . . . . . . . 19
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5.04 Other Information . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.05 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.06 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.07 Preservation of Properties . . . . . . . . . . . . . . . . . . . 19
--------------------------
5.08 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.09 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.10 Maintain Existence . . . . . . . . . . . . . . . . . . . . . . . 19
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5.11 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . 20
--------------------
5.12 Reports to SEC and to Stockholders . . . . . . . . . . . . . . . 20
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5.13 Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . 20
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5.14 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . 20
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5.15 Working Capital . . . . . . . . . . . . . . . . . . . . . . . . . 20
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5.16 Working Capital Plus Committed Revolving Credit . . . . . . . . . 20
-----------------------------------------------
5.17 Net Tangible Asset Test . . . . . . . . . . . . . . . . . . . . . 20
-----------------------
5.18 Tangible Net Worth . . . . . . . . . . . . . . . . . . . . . . . 20
------------------
5.19 Cash Flow to Debt Service . . . . . . . . . . . . . . . . . . . . 21
-------------------------
5.20 Investment in Security Property . . . . . . . . . . . . . . . . . 21
-------------------------------
5.21 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
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5.22 Lease Obligations . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------------
5.23 Mergers, Consolidations . . . . . . . . . . . . . . . . . . . . . 21
-----------------------
5.24 Transfer of Stock in Company . . . . . . . . . . . . . . . . . . 21
----------------------------
5.25 Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
----------
5.26 Other Information . . . . . . . . . . . . . . . . . . . . . . . . 21
-----------------
5.27 Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
----------
5.28 Compliance with ERISA . . . . . . . . . . . . . . . . . . . . . . 24
---------------------
5.29 Maintenance of Properties; Insurance . . . . . . . . . . . . . . 25
------------------------------------
5.30 Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
------
5.31 Place of Payments . . . . . . . . . . . . . . . . . . . . . . . . 25
-----------------
SECTION 6. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . 26
-----------------
6.01 Principal, Interest or Premium . . . . . . . . . . . . . . . . . 26
------------------------------
6.02 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . 26
------------
6.03 Waste . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
-----
6.04 Other Default . . . . . . . . . . . . . . . . . . . . . . . . . . 26
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6.05 Foreclosure, Seizure, etc. . . . . . . . . . . . . . . . . . . . 26
--------------------------
6.06 Receiver, Bankruptcy, etc. . . . . . . . . . . . . . . . . . . . 26
--------------------------
6.07 Representations and Warranties . . . . . . . . . . . . . . . . . 27
------------------------------
6.08 Hazardous Material . . . . . . . . . . . . . . . . . . . . . . . 27
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SECTION 7. Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . 27
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7.01 Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . 27
------------
7.02 Exercise of Rights and Remedies . . . . . . . . . . . . . . . . . 27
-------------------------------
7.03 Remedies, etc., Cumulative . . . . . . . . . . . . . . . . . . . 27
--------------------------
7.04 No Waiver, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 27
---------------
7.05 Accounts and Set Off . . . . . . . . . . . . . . . . . . . . . . 28
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SECTION 8. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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8.01 Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 28
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8.02 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
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8.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.04 Change, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
------------
8.05 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.06 Terms Binding . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.07 Gender, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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8.08 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
--------
8.09 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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8.10 Further Assurances and Corrective Instruments . . . . . . . . . . 30
---------------------------------------------
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8.11 Estoppel Certificate . . . . . . . . . . . . . . . . . . . . . . 30
--------------------
8.12 Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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8.13 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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8.14 Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
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8.15 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 30
----------------
EXHIBIT A Form of Note
EXHIBIT B Opinion of Xxxxx Xxxxx Xxxxxxx & Xxxxx
EXHIBIT C Opinion of Xxxxxxx, Singleton, McNally, Xxxxxxxxxx & Xxxxxx
EXHIBIT D Opinion of Ohio Local Counsel for the Company
EXHIBIT E Opinion of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx
EXHIBIT F Capitalization of the Company/Options/Convertible Stock
EXHIBIT G Subsidiaries
EXHIBIT H Liabilities
EXHIBIT I Changes, etc.
EXHIBIT J Funded Debt/Restrictions on Liabilities
EXHIBIT J-1 Amount of Committed Revolving Credit
EXHIBIT K UCC Financing Statements
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NOTE PURCHASE AGREEMENT
THIS NOTE PURCHASE AGREEMENT (this "Agreement") is made as of the10th day
of November, 1993 by and between XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY, a
Massachusetts corporation (the "Purchaser"); and CAL-MAINE FOODS, INC., a
Delaware corporation (the "Company");
R E C I T A L S:
The Company has agreed to sell to Purchaser and Purchaser has agreed to
purchase from Company at private sale, at par, an aggregate of $12,257,000.00
in principal amount of Secured Notes due 2003, upon and subject to the terms,
conditions, and provisions of this Agreement.
NOW, THEREFORE, in consideration of the premises, the parties hereto agree
as follows:
SECTION 1. Definitions
All accounting terms not specifically defined herein shall have the
meanings assigned to them as determined by generally accepted accounting
principles, consistently applied. Unless the context otherwise requires, when
used herein, the following terms shall have the following meanings:
1.01 "Accounting Period(s)" shall mean the accounting periods during
each Fiscal Year of the Company which are determined as follows: Each Fiscal
Year of the Company has four quarters and each quarter has three (3) Accounting
Periods consisting of two (2) four-week Accounting Periods and one (1)
five-week Accounting Period. The Accounting Periods shall not be changed
without the prior written consent of the Purchaser.
1.02 "Affiliates" shall mean any Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with
the Company. A Person shall be deemed to control a corporation if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such corporation, whether through the
ownership of voting securities, by contract or otherwise.
1.03 "Assets" shall mean all assets owned or controlled by the
Company or any Subsidiary or any right or interest therein of the Company or
any Subsidiary, all determined on a Consolidated Basis.
1.04 "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which commercial banks in Boston, Massachusetts, are
required or authorized to be closed.
1.05 "Cash Flow" shall mean with respect to the applicable period,
the sum of (i) Net Income before interest and taxes, (ii) depreciation expense,
and (iii) amortization expense of the Company determined on a Consolidated
Basis.
8
1.06 "Closing" shall have the meaning ascribed to such term in
Section 2.03 of this Agreement.
1.07 "Closing Date" shall have the meaning ascribed to such term in
Section 2.03 of this Agreement.
1.08 "Code" means the Internal Revenue Code of 1986, as amended, or
any successor Federal tax code. Any reference to any provision of the Code
shall also be deemed to be a reference to any successor provision or provisions
thereof.
1.09 "Commitment" shall mean the commitment letter of the Purchaser
described in Section 3.16 of this Agreement.
1.10 "Committed Revolving Credit" shall mean revolving credit
facilities from institutional lenders in favor of Company evidenced by written
loan agreements, financing agreements or other similar agreements which are in
full force and effect obligating such institutional lenders to make loans or
advances to Company on a revolving basis.
1.11 "Consolidated Basis" means that all Assets, Liabilities,
income, equities, debts, or obligations, of the Company and any Subsidiary
shall be consolidated for accounting purposes in calculating the various
ratios, requirements, covenants, restrictions and agreements contained in this
Agreement.
1.12 "Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Company, are treated as a single
employer under Section 414 of the Code.
1.13 "Current Assets" shall mean, at any time, all Assets which
normally will be converted into cash within one year.
1.14 "Current Liabilities" shall mean, at any time, any Liabilities
which must be paid or satisfied within a year, excluding any deferred taxes,
but including advances on revolving lines of credit with a maturity of twelve
(12) months or less.
1.15 "Current Ratio" shall mean the ratio of (a) Current Assets to
(b) Current Liabilities.
1.16 "Debt Service" shall mean, with respect to each applicable
period, the sum of (i) interest charges plus (ii) principal payments or
principal maturities which become due within the applicable period relating to
Indebtedness.
1.17 "Deed of Trust" means the Deed of Trust, Assignment of Rents,
Security Agreement and Financing Statement of even date herewith from the
Company to The Fidelity Company, as trustee for the benefit of the Purchaser,
covering certain real and personal property located in Pitt County, North
Carolina, all as the same may be amended or modified from time to time.
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1.18 "Employee Benefit Plan" shall mean each Plan and each other
"employee benefit plan" as defined in Section 3(3) of ERISA, which is or,
during the six-year period ending on the date hereof, has been established or
maintained, or to which contributions are or, during the six-year period ending
on the date hereof, have been made by the Company or any Subsidiary of the
Company.
1.19 "Environmental Laws" shall mean any "Environmental Laws" as
defined in Section 32 of the Deed of Trust or any "Environmental Laws" as
defined in Section 32 of the Mortgage.
1.20 "ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor law. Any reference to any
provision of ERISA shall also be deemed to be a reference to any successor
provision or provisions thereof.
1.21 "ERISA Affiliate" means any member of the Controlled Group.
1.22 "Events of Default" means those events set forth in Section 6
hereof.
1.23 "Fiscal Year" or "fiscal year" shall mean the fiscal year of
the Company. Each fiscal year of the Company currently ends on the Saturday
which is closest to May 31 of each year. The fiscal year of the Company shall
not be changed without the prior written consent of Purchaser.
1.24 "Funded Debt" shall mean the sum of all Indebtedness of the
Company maturing more than one year after the date of determination whether
secured or unsecured, excluding, however, revolving lines of credit and
deferred taxes, all determined on a Consolidated Basis.
1.25 "GAAP" shall mean generally accepted accounting principles as
set forth in the opinions of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements of the Financial
Accounting Standards Board or in such opinions and statements of such other
entities as shall be approved by a significant segment of the accounting
profession, provided, however, that any reference in Section 5, or in the
definition of any term used in Section 5, to GAAP shall mean GAAP in effect on
the date hereof.
1.26 "Hazardous Material" shall mean any "Hazardous Material" as
defined in paragraph 32 of the Deed of Trust or any "Hazardous Material" as
defined in Section 32 of the Mortgage.
1.27 "Historical Financial Statements" shall have the meaning set
forth in Section 4.13 of this Agreement.
1.28 "Indebtedness" shall mean, as applied to any Person, (i)
obligations of such Person for borrowed money, (ii) obligations of such Persons
evidenced by bonds, debentures, notes or other similar instruments, (iii)
obligations of such Person to pay the deferred purchase price of property or
services, (iv) obligations of leases which would be classified as a capitalized
lease in accordance with GAAP, (v) obligations of such Person to reimburse
another Person in respect of amounts paid under a letter of credit or similar
instrument, (vi) obligations with respect to interest rate and currency swaps
and similar obligations obligating such Person to make payments, (vii)
indebtedness secured by (or for which the holder of such Indebtedness has an
existing right, contingent or otherwise, to be secured by)
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a Lien on any asset of such Person, (viii) any recourse obligation of such
Person in connection with a sale of receivables, and (ix) guarantees or similar
credit support by such Person of the Indebtedness of another Person.
1.29 "Liabilities" shall mean all Indebtedness or other obligations
of Company and its Subsidiaries, all determined on a Consolidated Basis.
1.30 "Lien" means any mortgage, deed of trust, pledge, security
interest, assignment, encumbrance, lien, or charge of any kind, including,
without limitation, any conditional sale or other title retention agreement,
any lease in the nature thereof, and the filing of or agreement to give any
financing statement under the Uniform Commercial Code of any jurisdiction.
1.31 "Loan" means the indebtedness in the aggregate principal amount
of $12,257,000.00 to be evidenced by the Notes purchased by the Purchaser
pursuant to the terms and conditions of this Agreement.
1.32 "Loan Documents" means collectively the Notes, this Agreement,
the Deed of Trust, the Mortgage and any other instrument, document, and
agreement now and hereafter evidencing, securing, guarantying, indemnifying,
and given by the Company or any third party in connection with the Loan or any
of the other Obligations (including those documents set forth in Section 3
hereof) and any and all amendments thereto and modifications thereof.
1.33 "Mortgage" means the Mortgage, Assignment of Rents, Security
Agreement and Financing Statement of even date herewith from the Company in
favor of the Purchaser covering certain real and personal property located in
Darke County, Ohio, all as the same may be amended or modified from time to
time.
1.34 "Most Recent Balance Sheets" means collectively the
consolidated balance sheets of the Company and their Subsidiaries dated as of
September 25, 1993.
1.35 "Multiemployer Plan" shall mean any plan described in Section
4001(a)(3) of ERISA to which contributions are or, during the six-year period
ending on the date hereof, have been made, or were required to have been made,
by the Company, any Subsidiary of the Company, or any of their respective ERISA
Affiliates, or as to which any such person has any obligation for contributions
or withdrawal liability.
1.36 "Multiple Employer Plan" means a Plan described in Section
4063(a) of ERISA.
1.37 "Net Income" means for any period the net income of the Company
and their Subsidiaries determined on a Consolidated Basis.
1.38 "Net Tangible Assets" shall mean Tangible Assets less Current
Liabilities.
1.39 "Net Worth" shall mean all Assets less all Liabilities.
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1.40 "Notes" mean collectively the Secured Notes described in
Section 2 hereof and any and all amendments thereto and modifications thereof
and all substitutions therefor.
1.41 "Obligations" means the obligation of the Company and its
Subsidiaries to (a) pay the unpaid principal amount of the Notes, plus all
accrued and unpaid interest thereon and (b) pay and perform all other charges,
interest, expenses, obligations, indemnifications, covenants and agreements
under this Agreement and the other Loan Documents.
1.42 "Officer's Certificate" shall mean a certificate executed on
behalf of the Company by a Responsible Officer.
1.43 "PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
1.44 "Person" includes a corporation, an association, a partnership,
an organization, a business, an individual, or a government or political
subdivision thereof or governmental agency.
1.45 "Plan" means any plan described in Section 4021(a) of ERISA and
not excluded pursuant to Section 4021(b) thereof, and any plan subject to
Section 412 of the Code or Section 302 of ERISA, which is or, during the
six-year period ending on the date hereof, was maintained, or to which
contributions are or, during the six-year period ending on the date hereof,
were made, or required to be made, by the Company, any Subsidiary or any of
their respective ERISA Affiliates, or as to which any such person has any
liability for contributions or withdrawal liability, but not including any
Multiemployer Plan.
1.46 "Plan Administrator" shall have the meaning assigned to the
term "administrator" in Section 3(16)(A) of ERISA.
1.47 "Plan Sponsor" shall have the meaning assigned to the term
"plan sponsor" in Section 3(16)(B) of ERISA.
1.48 "Responsible Officer" shall mean any of the Chairman or Vice
Chairman of the Board of Directors, the Chief Executive Officer, the President,
any Executive Vice President, the Vice President-Controller, any Vice President
or the Treasurer of the Company.
1.49 "Security Documents" shall mean the Deed of Trust, the
Mortgage, and all other assignments, documents or instruments, now or hereafter
securing the Notes, all as the same may be modified or amended from time to
time.
1.50 "Security Property" shall mean all the real property, personal
property and other property described in the Deed of Trust, the Mortgage or the
other Loan Documents and which has been granted or conveyed as security for the
Loan.
1.51 "Strip" shall mean an act of spoiling the Security Property or
the removal of items constituting Security Property from the land which
constitutes part of the Security Property.
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1.52 "Subordinated Debt" shall mean Indebtedness which is subject
and inferior in right of payment and otherwise to the indebtedness evidenced by
the Notes pursuant to subordination agreements in form satisfactory to the
Purchaser.
1.53 "Subsidiary" shall mean any corporation, partnership,
association, or other business entity a majority (by number of votes) of the
outstanding shares of any class or classes of which shall at the time be owned
or controlled by the Company (or by a Subsidiary of the Company), if the
holders of the shares of such class or classes (i) are ordinarily, in the
absence of contingencies, entitled to elect a majority of the directors (or
persons performing similar functions) of the issuer thereof, even though the
right to vote has been suspended by the happening of such a contingency, or
(ii) are at the time entitled, as such holders, to elect a majority of the
directors (or persons performing similar functions) of the issuer thereof,
whether or not the right to vote exists by reason of the happening of a
contingency.
1.54 "Tangible Assets" shall mean: (a) all Assets minus (b) all
intangible Assets including, without limitation, goodwill, licenses, patents,
trademarks, trade names, copyrights, service marks, and brand names.
1.55 "Tangible Net Worth" shall mean Tangible Assets less all
Liabilities.
1.56 "Taxes" means all taxes and assessments whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character (including all penalties or interest thereon), which at any time may
be assessed, levied, confirmed, or imposed on the Company or any of their
properties or assets or any part thereof or in respect of any of their
franchises, businesses, income, or profits, and all claims for sums which by
law have or might become a lien or charge upon any of their properties or
assets.
1.57 "Waste" shall mean the destruction or material alteration or
deterioration of the Security Property, or any improper use, abuse or
mismanagement of the Security Property.
1.58 "Working Capital" shall mean Current Assets less Current
Liabilities.
SECTION 2. Purchase and Sale of Notes
2.01 Authorization of Notes. The Company has authorized the issue
and sale of $12,257,000 aggregate principal amount of its Secured Notes due
December 1, 2003, to be substantially in the form of Exhibit A, with such
changes therefrom, if any, as may be approved by Company and Purchaser.
2.02 Sale and Purchase of Notes. The Company will issue and sell to
Purchaser and, subject to the terms and conditions hereof, the Purchaser will
purchase from the Company, at the Closing provided for in Section 2.03, two (2)
Secured Notes due December 1, 2003, one being in the principal amount of
$6,257,000.00 and the other being in the principal amount of $6,000,000.00, at
the purchase price of 100% of the principal amount thereof.
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2.03 Closing. The closing of the sale of the Notes to be purchased
by Purchaser (the "Closing") shall take place at the offices of Xxxxxx Xxxxxxx
Xxxxxxxxx & Xxxx, at 10:00 A.M., Winston-Salem, North Carolina time, on
November 3, 1993 or on such other Business Day thereafter on or prior to
November 30, 1993 as may be agreed upon by the Company and Purchaser (the
"Closing Date"). At the Closing, the Company will deliver to Purchaser the
Notes to be purchased by Purchaser, dated the Closing Date and payable to the
order of Purchaser (or Purchaser's nominee), against delivery by Purchaser to
the Company of immediately available funds in the aggregate amount of the
purchase price therefor, such delivery to be by wire transfer to the Company in
accordance with instructions provided by the Company. If at the Closing the
Company shall fail to tender such Notes to Purchaser as provided in this
Section, or any of the conditions specified in Section 3 shall not have been
fulfilled to Purchaser's satisfaction, Purchaser shall, at its election, be
relieved of all further obligations hereunder, without thereby waiving any
other rights Purchaser may have by reason of such failure or such
nonfulfillment.
SECTION 3. Conditions of Purchase
Conditions Precedent to the Purchase. The obligation of the Purchaser to
purchase the Notes is subject to the following express conditions precedent:
3.01 Loan Documents. The Company shall have delivered to the
Purchaser the following:
(a) Notes. The executed Notes;
(b) Deed of Trust. The executed Deed of Trust;
(c) Mortgage. The executed Mortgage;
(d) Assignment of Rents. Assignments of Leases, Rents and Profits
duly executed by the Company, one relating to the North Carolina Security
Property and the other relating to the Ohio Security Property.
(e) Environmental Indemnification. A Certificate and
Indemnification Regarding Environmental Matters duly executed by the Company.
(f) Authorization for Disbursement. An Authorization for
Disbursement of the proceeds of the Loan duly executed by the Company.
(g) UCC Financing Statements. UCC Financing Statements duly
executed by the Company covering the Security Property.
(h) Resolutions. A certified copy of resolutions of the Board of
Directors of the Company authorizing the execution, delivery, and performance
of this Agreement, the Notes, and the other Loan Documents.
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(i) Charter and By-Laws. A copy, certified by the corporate
secretary of the Company, of the charter and by-laws of the Company.
(j) Incumbency Certificate. A certificate of the corporate
secretary of the Company as to the incumbency and signatures of the officers
signing this Agreement, the Notes, the other Loan Documents, and any other
documents to be delivered pursuant hereto.
(k) Good Standing Certificate. A certificate, as of the most
recent date practicable, of the North Carolina Secretary of State as to the
good standing of the Company.
(l) Good Standing Certificate. A certificate, as of the most
recent date practicable, of the Delaware Secretary of State as to the good
standing of the Company.
(m) Good Standing Certificate. A certificate, as of the most
recent date practicable, of the Ohio Secretary of State as to the good standing
of the Company.
(n) Miscellaneous. Such other documents, instruments, opinions,
and agreements as the Purchaser and its counsel may require in their
discretion.
3.02 Representations and Warranties. The representations and
warranties of the Company contained herein and those otherwise made in writing
by or on behalf of the Company in connection with the transactions contemplated
hereby shall be correct in all material respects when made and at the time of
the Closing.
3.03 Performance; No Default. The Company shall have performed and
complied in all material respects with all agreements and conditions contained
herein required to be performed or complied with by the Company prior to or at
the Closing. At the time of the Closing no Event of Default shall have
occurred and be continuing.
3.04 Compliance Certificate. The Company shall have delivered to
Purchaser an Officer's Certificate, dated the Closing Date, certifying that the
conditions specified in sections 3.02 and 3.03 have been fulfilled and
certifying that, after giving effect to the issuance of all the Notes, the
Company will be in compliance with all limitations on the incurrence by the
Company of Liabilities contained in any instrument or agreement applicable to
or binding on the Company.
3.05 Opinions of Counsel. Purchaser shall have received favorable
opinions, dated the Closing Date and satisfactory to Purchaser, (a) from
Messrs. Xxxxx Xxxxx Xxxxxxx & Xxxxx, special counsel for the Company, covering
the matters set forth in Exhibit B and such other matters incident to the
transactions contemplated hereby as Purchaser or Purchaser's special counsel
may reasonably request, (b) from (i) Xxxxxxx, Singleton, McNally, Xxxxxxxxxx &
Xxxxxx, local counsel for the Company in North Carolina, and (ii) Marchal &
Marchal, local counsel for the Company in Ohio, covering the matters set forth
in Exhibit C and D, as the case may be, and such other matters incident to the
transactions contemplated hereby as Purchaser or Purchaser's special counsel
may reasonably request, and (c) from Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx,
Purchaser's special counsel in connection
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with such transactions, covering the matters set forth in Exhibit E and such
other matters incident to the transactions contemplated hereby as Purchaser may
reasonably request.
3.06 Recordation; Perfection. (a) Purchaser shall have received
proof that the Security Documents or appropriate financing statements and other
documents required by the Security Documents have been filed and/or recorded in
such jurisdictions as Purchaser or Purchaser's special counsel shall have
specified.
(b) The Company shall have duly paid all taxes, fees and other
governmental charges in connection with the execution, delivery, recording,
publication and filing of the Security Documents, and Purchaser shall have
received satisfactory evidence of such payment.
(c) Purchaser shall have received copies of searches of records of
financing statements filed under the Uniform Commercial Code, lien and judgment
searches, title searches and surveys (which may be updates of surveys done
previously under which have been furnished to and are satisfactory to
Purchaser), as appropriate, with respect to the Security Property, which
searches and surveys are reasonably satisfactory to Purchaser.
(d) The Purchaser shall have received binding policies of
mortgagee's title insurance (with such co-insurance and/or reinsurance
arrangements as are satisfactory to Purchaser) on each parcel of the Security
Property specified by Purchaser pursuant to policies on the applicable ALTA
form which will insure that the mortgagees thereunder will have a valid first
mortgage lien in the amount of the value of such Security Property as
reasonably determined by Purchaser, subject to such exceptions as are provided
for in the Security Documents.
3.07 Insurance. Purchaser shall have received insurance binders for
all policies of insurance required by this Agreement and any of the Security
Documents, together with the loss payable endorsements required hereby and
thereby.
3.08 Committed Revolving Credit. The Purchaser shall have received
true and complete copies of each agreement and instrument relating to Committed
Revolving Credit in effect on the Closing Date.
3.09 Legal Investment. On the Closing Date, Purchaser shall have
determined to its satisfaction that Purchaser's purchase of the Notes shall be
permitted by the laws and regulations of each jurisdiction to which Purchaser
is subject, but without recourse to provisions permitting limited investments
by insurance companies without restrictions as to the character of the
particular investment.
3.10 No Adverse Legislation, Action or Decision, etc. No
legislation shall have been enacted by either house of Congress or by any state
legislature, no other action shall have been taken by any United States or
state or local governmental authority, whether by order, regulation, rule,
ruing or otherwise, and no decision shall have been rendered by any court of
competent jurisdiction in the United States, which would materially adversely
affect the Notes being purchased at the Closing by Purchaser as an investment.
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3.11 Compliance with Securities Laws. The offering and sale of the
Notes at the Closing shall have complied with all applicable requirements of
federal and state securities laws, and Purchaser shall have received evidence
thereof satisfactory to Purchaser.
3.12 Environmental Information. Purchaser shall have received at
least 10 Business Days prior to the Closing Date such information regarding
environmental matters as may be reasonably requested by Purchaser or
Purchaser's special counsel, which information shall include environmental
surveys, reports or audits prepared by an environmental consulting or
engineering firm for or on behalf of the Company on any of the facilities,
properties or operations of the Company, its Subsidiaries and their joint
ventures, in scope, methodology and substance satisfactory to Purchaser.
3.13 No Actions Pending. There shall be no suit, action,
investigation, inquiry or any other proceeding by any governmental body or any
other Person, or any other legal or administrative proceeding pending or
threatened against the Company or any of their Affiliates, which questions the
validity, legality or enforceability of any of the Loan Documents and would
materially adversely affect any of the parties hereto or any of the
transactions contemplated hereby.
3.14 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be satisfactory to Purchaser
and Purchaser's special counsel, and Purchaser and Purchaser's special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as Purchaser or special counsel may reasonably request.
3.15 Payment of Closing Fees. The Company shall have paid the
reasonable fees, expenses and disbursements of Purchaser's special counsel
which are reflected in statements of such counsel rendered prior to or on the
Closing Date pursuant to section 8.01; and thereafter (without limiting the
provisions of section 8.01) the Company will pay, promptly upon receipt of any
supplemental statements therefor, additional reasonable fees, if any, and
disbursements of Purchaser's special counsel in connection with the closing
(including unpaid disbursements as of the Closing Date) and attention to
post-Closing matters.
3.16 Commitment. The Company shall have complied with all the
terms, conditions and covenants contained in that certain Loan Commitment dated
September 9, 1993, issued by the Purchaser to the Company, as amended.
SECTION 4. Representations and Warranties
To induce the Purchaser to purchase the Notes hereunder, the Company hereby
makes the following representations and warranties to the Purchaser:
4.01 Good Standing. The Company (a) is a corporation duly
organized, existing, and in good standing under the laws of the jurisdiction of
its formation, and (b) has the power to own its property and to carry on its
business and is qualified to do business and is in good standing in each
jurisdiction in which the character of properties owned by it or the
transaction of its business makes such qualification necessary.
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4.02 Authority. The Company has full power and authority to enter
into this Agreement, to issue and sell the Notes hereunder, to execute and
deliver the Notes and the other Loan Documents to which it is a party, and to
perform and comply with the terms, conditions, and agreements set forth herein
and therein, all of which have been duly authorized by all proper and necessary
corporate action. No consent or approval of the shareholders of the Company or
of any governmental authority is required as a condition to the validity of
this Agreement, the Notes, or the other Loan Documents.
4.03 Binding Agreement. This Agreement constitutes, and the Notes
and the other Loan Documents constitute the valid and legally binding
obligations of the Company enforceable in accordance with their respective
terms.
4.04 Litigation. There are no claims, actions, suits or proceedings
pending or, so far as any person signing below as or on behalf of the Company
knows, threatened or reasonably anticipated before any court or administrative
agency which will materially adversely affect the financial condition or
operations of the Company.
4.05 No Conflicting Agreements. There are no provisions of the
Company's charter and by-laws and no provisions of any existing mortgage, deed
of trust, indenture, contract, lease, or agreement binding on the Company or
affecting the Company's property which the execution, delivery or carrying out
of the terms of this Agreement, the Notes or the other Loan Documents would
result in a breach of or constitute a default thereunder or conflict with or in
any way prevent the execution, delivery, or carrying out of the terms of this
Agreement, the Notes, or the other Loan Documents.
4.06 Financial Condition. The financial statements of the Company,
copies of which have been furnished to the Purchaser, were prepared in
accordance with generally accepted accounting principles consistently applied
and are complete and correct and fairly and accurately present the financial
condition of the Company as of their date and the results of their operations
for the period then ended. There has been no material adverse change in the
financial condition of the Company or the results of the Company's operations
since the date of such financial statements.
4.07 Information. All information contained in any financial
statement, application, schedule, report, certificate, opinion, or any other
document given by the Company or by any other Person in connection with the
Loan or with any of the Loan Documents is in all respects true and accurate,
and the Company or such other person have not omitted to state any material
fact or any fact necessary to make such information not misleading.
4.08 Taxes. All Taxes imposed upon the Company and its properties,
operations, and income have been paid and discharged prior to the date when any
interest or penalty would accrue for the nonpayment thereof except for those
Taxes being contested in good faith, by appropriate proceedings by the Company
and the amount thereof is adequately reserved.
4.09 Margin Stock. The Company does not own and has no present
intention of acquiring any "margin stock" within the meaning of Regulation G
(12 C.F.R. Section 207) or within the meaning of Regulation U (12 C.F.R.
Section 221) of the Board of Governors of the Federal Reserve System. None of
the proceeds of the Loan will be used, directly or indirectly, by the Company
for the purpose of
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purchasing or carrying, or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry, any margin
stock or for any other purpose which might constitute the transactions
contemplated hereby a "purpose credit" within the meaning of Regulation G or
Regulation U, or cause this Agreement to violate any other regulation of the
Board of Governors of the Federal Reserve System or the Securities Exchange Act
of 1934 or the Small Business Investment Act of 1958, as amended, or any rules
or regulations promulgated under any of such statutes.
4.10 Violation of Laws, etc. Neither the consummation of the
purchase and sale of the Notes nor the use, directly or indirectly, of all or
any portion of the proceeds of the sale of the Notes hereunder will violate or
result in a violation of any provision of any applicable statute, regulation,
or order of, or any restriction imposed by, any state or the United States of
America or by any authorized official, board, department, instrumentality, or
agency thereof. The Company is in compliance with all applicable federal,
state and local laws, rules, and regulations and orders of any court of other
governmental authority having jurisdiction.
4.11 Stock of the Company, etc. The capitalization of the Company
is as set forth in Exhibit F. All shares of capital stock of the Company have
been duly authorized and validly issued and are fully paid and nonassessable.
No authorized but unissued or treasury shares of capital stock of the Company
are subject to any option, warrant, right to call or commitment of any kind or
character except as set forth on Exhibit F. The Company does not have any
outstanding stock or securities convertible into or exchangeable for any shares
of its capital stock, or any rights issued to any Person (either preemptive or
other) to subscribe for or to purchase, or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to any of its capital
stock or securities convertible into or exchangeable for any of its capital
stock except as set forth on Exhibit F. Neither the Company nor any Subsidiary
is subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock or any convertible
securities, rights or options of the type described in the preceding sentence
except as set forth on Exhibit F.
4.12 Subsidiaries. Exhibit G correctly lists (a) as to each
Subsidiary on the date of this Agreement (i) its name, (ii) the jurisdiction of
its incorporation, (iii) the percentage of its issued and outstanding shares
owned by the Company or another Subsidiary (specifying such other Subsidiary),
and (b) the name of each Person not included in clause (a) of this Section in
which the Company owns any direct or indirect equity interest. Each Subsidiary
is a corporation duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation and has all requisite
corporate power and authority (A) to own and operate its properties, (B) to
carry on its business as now conducted and as proposed to be conducted, (C) to
enter into each of the Documents to which it is a party, (D) to carry out the
terms of each of the Loan Documents to which it is a party, (E) to assign and
grant a security interest or mortgage in the Security in the manner and for the
purpose contemplated by the Security Documents, to which it is a party and (F)
to enter into and carry out the terms of all other agreements and instruments
executed and delivered by it pursuant to or in connection with the Loan
Documents to which it is a party. All the outstanding shares of capital stock
of each Subsidiary are validly issued, fully paid and nonassessable, and all
such shares indicated in Exhibit G as owned by the Company or by any other
Subsidiary are so owned beneficially and of record by
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the Company or by such other Subsidiary free and clear of any Lien. No
authorized but unissued or treasury shares of capital stock of any Subsidiary
are subject to any option, warrant, right to call or commitment of any kind or
character.
4.13 Business and Financial Statements. The Company have delivered
to Purchaser complete and correct copies of the audited balance sheets and
income statements of the Company as of May 29, 1993, and interim unaudited
financial statements for the seventeen (17) week period ending September 25,
1993 (collectively, the "Historical Financial Statements"). The Historical
Financial Statements present fairly the financial position and results from
operations of the Company, as of the respective dates and for the respective
periods specified. To the best of the Company's knowledge, except as set forth
in Exhibit H, neither the Company nor any of its Subsidiaries has any material
liabilities or obligations of any nature, whether absolute, accrued, contingent
or otherwise, or any material unsatisfied judgments or any leases for a period
in excess of five years which either individually or in the aggregate are
material, except those (x) which are fully reflected or reserved against on the
Most Recent Balance Sheets or (y) which are not in excess of and are incurred
subsequent to the date of such balance sheets in the ordinary course of
business consistent with past practice. The reserves reflected on the Most
Recent Balance Sheets are appropriate and reasonable.
4.14 Changes, etc. Except as disclosed in Exhibit I, since the date
of the Most Recent Balance Sheets, (a) there has been no change in the assets,
liabilities or financial condition of, the Company and its Subsidiaries, taken
as a whole, other than changes in the ordinary course of business which have
not been, either in any case or in the aggregate, materially adverse to, the
Company and its Subsidiaries, taken as a whole, and (b) neither the business,
operations, condition (financial or otherwise), properties or prospects of the
Company or any of its Subsidiaries have been affected by any occurrence or
development (whether or not insured against) which has been, either in any case
or in the aggregate, materially adverse to, as a whole, the Company and its
Subsidiaries.
4.15 Tax Returns and Payments. The Company and its Subsidiaries
have filed or caused to be filed all material tax returns which are required to
be filed and have paid or caused to be paid all material taxes shown to be due
and payable on said returns or on any assessments made against them or any of
their respective properties and all other material taxes, fees or other charges
imposed on them or any of their respective properties by any governmental
authority (other than those the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with generally accepted accounting principles have been
provided on the books of the Company or its Subsidiaries, as the case may be);
and no tax liens have been filed and no claims are being asserted with respect
to any such taxes, fees or other charges (other than such liens or claims, the
amount or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
generally accepted accounting principles have been provided). The Federal
income tax liabilities of the Company have been finally determined by the
Internal Revenue Service and satisfied, or the time for audit has expired, for
all fiscal periods through fiscal year 1989. The charges, accruals and
reserves on the books of the Company and its Subsidiaries in respect of
Federal, State and other income taxes for all fiscal periods through September
25, 1993 are adequate in the opinion of the Company, and the Company knows of
no unpaid assessment for additional Federal, state or other income taxes for
any period, or any basis for any assessment which would materially adversely
affect the Company.
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4.16 Funded Debt. Exhibit J correctly describes all Funded Debt of
the Company and its Subsidiaries (including any significant intercompany items)
outstanding, or for which the Company and its Subsidiaries have commitments, on
the date of this Agreement, in each case to the extent such Funded Debt or
commitment exceeds $500,000.00 individually, and identifies the collateral
securing any secured Funded Debt. Neither the Company nor any Subsidiary is in
default with respect to any Liabilities or any instrument or agreement relating
thereto, and, except as set forth on Exhibit J, no instrument or agreement
applicable to or binding on the Company or any Subsidiary contains any
restrictions on the incurrence by the Company of additional Liabilities. No
Indebtedness of the Company is senior in priority to payment of the
Indebtedness of the Company incurred pursuant to the Notes and the other Loan
Documents.
4.17 Committed Revolving Credit. The Company has provided the
Purchaser with correct and complete copies of each agreement and instrument
relating to Committed Revolving Credit in effect on the Closing Date. At the
time of Closing, outstanding borrowings under the Committed Revolving Credit
equal the amount set forth on Exhibit J-1. Neither the Company nor any
Subsidiary is in default with respect to the Committed Revolving Credit or any
instrument or agreement relating thereto.
4.18 Title to and Condition of Properties; Liens. At the time of
the Closing and after giving effect to the transactions contemplated hereby,
the Company and its Subsidiaries will have good and, in the case of real
property, marketable title to all of its owned properties and assets. At the
time of Closing, none of the Security Property will be subject to any Liens
except such as are permitted by the Security Documents. At the time of the
Closing and after giving effect to the transactions contemplated hereby, the
Company and its Subsidiaries will be entitled to enjoy peaceful and undisturbed
possession, as lessee, under all leases of real property on which facilities
owned or operated by it are situated, and all such leases will be valid and
subsisting and in full force and effect and no material default and, to the
Company's knowledge, no other default on the part of the Company or its
Subsidiaries shall exist thereunder. Substantially all items of real and
material personal property owned by, leased to or used by the Company and/or
each Subsidiary are in adequate operating condition and repair, ordinary wear
and tear excepted, are free and clear of any known defects, except such defects
as do not substantially interfere with the continued use thereof in the conduct
of normal operations, and are able to serve the function for which they are
currently being used. Neither this Agreement nor any other Loan Document, nor
any transaction contemplated under any such agreement, will affect any right,
title or interest of the Company or such Subsidiary in and to any of such
assets in a manner that would have or is reasonably likely to have a material
adverse effect on the business, operations, condition (financial or otherwise),
properties or prospect of the Company and its Subsidiaries, taken as a whole.
At the time of the Closing and immediately after giving effect to the
transactions contemplated hereby, (i) none of the Security Property will be
subject to presently effective financing statements under the Uniform
Commercial Code, except financing statements naming the Purchaser as secured
party, financing statements in respect of liens which will be discharged prior
to the Closing, and financing statements described on Exhibit K, and (ii)
neither the Company nor any Subsidiary has signed any presently effective
financing statement or any presently effective security agreement authorizing
any secured party thereunder to file any such financing statement describing
the Security Property.
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4.19 Compliance with Other Instruments. Neither the Company nor any
Subsidiary is in violation of any term of any agreement or instrument to which
it is a party or by which it is bound, or of any applicable law, ordinance,
rule or regulation of any governmental authority, or of any applicable order,
judgment or decree of any court, arbitrator or governmental authority
(including, without limitation, any such law, ordinance, rule, regulation,
order, judgment or decree relating to environmental protection and pollution
control, occupational health and safety standards and controls, consumer
protection or equal employment practice requirements), or of any term of its
charter or by-laws, the consequence of any of which violations could
reasonably be expected to have a material adverse effect on the business,
operations, condition (financial or otherwise), properties or prospects of the
Company and its Subsidiaries, taken as a whole; and neither the execution,
delivery and performance of this Agreement or any other Loan Document, nor the
consummation of the other transactions contemplated hereby or thereby will
result in any violation of or be in conflict with or constitute a default under
any such term or result in the creation of (or impose any obligation on the
Company or any Subsidiary to create) any Lien upon any of the properties of the
Company or any Subsidiary pursuant to any such term.
4.20 Governmental Consents. Except for the recordings and filings
of the Deed of Trust, the Mortgage and associated UCC Financing Statements, no
consent, approval or authorization of, or declaration or filing with, any
governmental authority on the part of the Company or any Subsidiary is required
for the valid execution and delivery of this Agreement, or any other Loan
Document, the valid offer, issue, sale and delivery of the Notes pursuant
hereto or the assignment of, and the grant of a security interest in or
mortgage on, the Security Property, in the manner and for the purpose
contemplated by the Security Documents.
4.21 Permits, Patents, Trademarks, etc. (a) The Company and each
Subsidiary has all permits and licenses for the operation of its business as
presently conducted which are material to the business, operations, condition
(financial or otherwise) or properties of the Company and its Subsidiaries,
taken as a whole.
(b) At the time of the Closing, the Company and its Subsidiaries
will own or possess (or will be licensed or otherwise have the full right to
use) all patents, trademarks, service marks, trade names and copy rights,
technology, know-how and processes, and all rights with respect to the
foregoing, which are necessary for the operation of its business as presently
conducted without any known material conflict with the rights of others. The
consummation of the transactions contemplated hereby will not alter or impair
in any material respect any of such rights of the Company. No product of the
Company infringes in any material respect or, to the Company's knowledge, in
any other respect on any patent, trademark, service xxxx, trade name,
copyright, license or other right owned by any other Person; no claim or
litigation is pending or (to the best knowledge of the Company) threatened
against or affecting the Company or any Subsidiary contesting its right to sell
or use any product or material. To the best knowledge of the Company, there is
no material violation by any Person of any right of the Company or any
Subsidiary with respect to any material patent, trademark, trade name or
service xxxx owned by the Company or such Subsidiary.
4.22 Offer of Notes. Neither the Company nor any Person acting on
its behalf has directly or indirectly offered the Notes or any part thereof or
any similar securities for sale to, or solicited any
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offer to buy any of the same from, or otherwise approached or negotiated in
respect thereof with anyone other than Purchaser. Neither the Company nor any
Person acting on its behalf has taken or will take any action which would
subject the issuance and sale of the Notes to the provisions of section 5 of
the Securities Act of 1933, as amended, or to the provisions of any state
securities law requiring registration of securities, notification of the
issuance or sale thereof or confirmation of the availability of any exemption
from such registration.
4.23 Status Under Certain Federal Statutes. The Company is not (a)
a "holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act
of 1935, as amended, (b) a "public utility", as such term is defined in the
Federal Power Act, as amended, or (c) an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended. Neither the Company nor any Subsidiary is a
"rail carrier", or a "person controlled by or affiliated with a rail carrier",
within the meaning of Title 49, U.S.C., and the Company is not a "carrier" to
which 49 U.S.C. Section 11301(b)(1) is applicable.
4.24 Compliance with ERISA. (a) No Plan and no trust created under
any Plan has been terminated, which termination resulted in any material
liability of the Company, any Subsidiary or any ERISA Affiliate which has not
been satisfied. All Employee Benefit Plans of the Company and all such plans
of its Subsidiaries have been operated and administered in compliance with
ERISA and the Code in all material respects. Neither the Company nor any of
its Subsidiaries has breached the fiduciary rules of ERISA in any material
respect or engaged in any transaction in connection with which any such entity
could be subjected to either a material civil penalty assessed pursuant to
Section 502(i) or 502(l) of ERISA or a material tax imposed by Section 4975 of
the Code. Full payment has been made of all amounts which the Company or any
of its Subsidiaries or any of their respective ERISA Affiliates is required
under the terms of each Employee Benefit Plan, ERISA, the Code or any
applicable contract or collective bargaining agreement to have paid as a
contribution to such Plan as of the date hereof. No accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, exists or has occurred with respect to any Plan. No
material liability to the PBGC, other than for premiums, has been or is
expected by the Company or any of its Subsidiaries or any of their respective
ERISA Affiliates to be incurred with respect to any Plan, and there has been no
Reportable Event which has not been waived and no event or condition exists
which presents a material risk of termination of any Plan by the PBGC.
(b) The aggregate fair market value of the assets of the Plans
equals or exceeds the aggregate present value of all benefit liabilities under
the Plans determined on a termination basis; with respect to any Plan the fair
market value of the assets of which does not exceed the present value of all
benefit liabilities thereunder (an "Underfunded Plan"), the amount by which the
present value of benefit liabilities under each Underfunded Plan (determined on
a termination basis) exceeds the fair market value of the assets of such
Underfunded Plan is not more than $0.00; and the aggregate amount by which the
present value of the benefit liabilities under all Underfunded Plans
(determined on a termination basis) exceeds the fair market value of the assets
of all such Underfunded Plans is not more than $0.00.
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(c) No withdrawal liability in excess of $0.00 for which the
Company, any Subsidiary or any of their respective ERISA Affiliates may be held
liable has been incurred and remains unsatisfied, or is expected to be incurred
by the Company or any of its Subsidiaries or any of their respective ERISA
Affiliates with respect to all Multiemployer Plans and Multiple Employer Plans
if a complete or partial withdrawal (within the meaning of Sections 4203 and
4205, respectively, of ERISA) from all Multiemployer Plans and Multiple
Employer Plans by all such persons were to occur. Full payment has been made
of all amounts which the Company or any of its Subsidiaries or any of their
respective ERISA Affiliates is required under the terms of any Multiemployer
Plan, ERISA, the Code or any collective bargaining agreement to have paid as a
contribution to such Multiemployer Plan as of the date hereof.
(d) The execution, performance and delivery of this Agreement and
the Loan Documents by any party thereto and the issuance and sale of the Notes
hereunder and thereunder, and any actions by any Subsidiary of the Company
related thereto, will not involve any non-exempt prohibited transaction within
the meaning of Section 406 of ERISA or Section 4975 of the Code. The Company
has delivered to each Purchaser, if requested, a complete and correct list of
all employee benefit plans with respect to which the Company is a party in
interest or with respect to which any of their securities are employer
securities. As used in this subsection 5.20(d), the terms "employee benefit
plans" and "party in interest" have the respective meanings specified in
section 3 of ERISA, and the term "employer securities" has the meaning
specified in section 407 (d) (1) of ERISA.
(e) The Company and its Subsidiaries have no obligations to provide
medical and life insurance benefits to former or retired employees.
4.25 Disclosure. Neither (a) the Historical Financial statements,
(b) any statement made by or on behalf of the Company or any Affiliate in this
Agreement or the other Loan Documents, nor (c) any other document, certificate
or instrument delivered to Purchaser by or on behalf of the Company in
connection with the transactions contemplated hereby contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein not misleading. There
is no fact known to the Company which materially adversely affects or in the
future may (so far as the Company can now reasonably foresee) materially
adversely affect the business, operations, condition (financial or otherwise),
properties or prospects of the Company which has not been set forth herein or
in the other documents, certificates and instruments delivered to Purchaser by
or on behalf of the Company specifically for use in connection with the
transactions contemplated hereby.
4.26 Compliance with Laws. Each of the Company and each Subsidiary
is in compliance in all material respects with all laws, regulations and
requirements applicable to its business and has obtained all authorizations,
consents, approvals, orders, permits, licenses, exemptions from, and has
accomplished all filings or registrations or qualifications with, any court or
governmental department, public body or authority, commission, board, bureau,
agency, or instrumentality, necessary for the transaction of its business,
except where the failure so to be in compliance or to obtain or accomplish any
of the matters referred to above would not materially adversely affect the
business, operations, condition (financial or otherwise), properties or
prospects of the Company and its Subsidiaries, taken as a whole.
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4.27 Solvency. The Company is solvent and will continue to be
solvent after giving effect to (i) the transactions contemplated by this
Agreement and the Loan Documents; and (ii) the payment of all fees, costs and
expenses payable by the Company on the Closing Date.
4.28 Compliance with Covenants. At the Closing and after giving
effect to the transactions contemplated by this Agreement and the Loan
Documents, the Company will be in compliance with the covenants contained in
subsections 5.14, 5.15, 5.16, 5.17, 5.18 and 5.19 hereof.
4.29 Employee Controversies. There are no strikes, work stoppages
or controversies pending or, to the Company's knowledge, threatened between the
Company or any of its Subsidiaries and any of their employees, which are, in
the aggregate, materially adverse to the financial condition, results of
operations or business of the Company and its Subsidiaries, taken as a whole.
SECTION 5. Company's Covenants
Until payment in full of all of the Obligations:
5.01 Use of Loan Proceeds. The Company will use the proceeds of the
Loan only for (a) the retirement of short-term debt of the Company in
connection with the acquisition of the Ohio Security Property, and (b) the
refinancing of Xxxx Xxxxxxx Loan #163392.
5.02 Annual Financials. The Company will furnish to the Purchaser
as soon as available but in no event more than ninety (90) days after the end
of each fiscal year financial statements of the Company on a Consolidated Basis
prepared in accordance with generally accepted accounting principles, including
balance sheet, statement of income and expense, statement of shareholder equity
and statement of changes in financial position, fully certified by independent
certified public accountants satisfactory to the Purchaser who are members of
the American Institute of Certified Public Accountants. Such financial
statements shall be accompanied by the accountants' statement that they are
familiar with the financial covenants and provisions of this Agreement and the
other Loan Documents and that no Event of Default exists hereunder or, if an
Event of Default exists, specifying the nature and period of the Event of
Default.
5.03 Interim Financials. The Company will furnish to the Purchaser
as soon as available but in no event more than thirty (30) days after the end
of each Accounting Period financial statements of the Company in the form of
those required under the immediately preceding section of this Agreement
prepared and certified by the chief financial officer of the Company. Once
every fiscal quarter, such financial statements shall be accompanied by a
certificate signed by the chief financial officer of the Company to the effect
that no Event of Default exists hereunder or, if an Event of Default exists,
specifying the Event of Default and the steps, if any, being taken to cure it.
5.04 Other Information. The Company will furnish to the Purchaser,
promptly from time to time, such information concerning the operations,
business, affairs, and financial condition of the Company as the Purchaser may
reasonably request.
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5.05 Books and Records. The Company will at all times (a) maintain
complete and accurate books and records; (b) keep and maintain all books and
records of the Company at the Company's principal place of business at 0000
Xxxxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000; and (c) give the Purchaser at
least thirty (30) days prior written notice before making a change in the
Company's principal place of business or in the location of such books and
records.
5.06 Litigation. The Company will promptly notify the Purchaser of
(a) any claims, actions, suits or litigation instituted, threatened or
reasonably anticipated against the Company which would materially and adversely
affect the condition (financial, business or otherwise) of the Company or the
Property, and (b) the entry of any judgment or Lien against the Company's
assets or properties in excess of $500,000.00.
5.07 Preservation of Properties. The Company will at all times (a)
maintain its properties, whether owned or leased, in good operating condition,
and from time to time will make all proper repairs, renewals, replacements,
additions, and improvements thereto needed to maintain such properties in good
operating condition, (b) comply with the provisions of all material leases to
which it is a party or under which it occupies, uses or possesses property so
as to prevent any loss or forfeiture thereof or thereunder, and (c) comply with
all laws, rules, regulations, and orders applicable to the properties or any
part thereof; provided, however, that nothing contained in this section shall
require the making of any repair, renewal, replacement, addition, or
improvement of or to a particular property or the continued maintenance of any
property which would not be required in the exercise of sound business
judgment.
5.08 Insurance. The Company will at all times maintain such
insurance on the Security Property as is required by the insurance covenants
contained in the Security Documents.
5.09 Taxes. Except to the extent that the validity or amount
thereof is being contested in good faith, by appropriate proceedings and the
amount thereof is adequately reserved, the Company will pay and discharge all
Taxes prior to the date when any interest or penalty would accrue for the
nonpayment thereof.
5.10 Maintain Existence. The Company will at all times maintain in
full force and effect its corporate existence, rights, privileges, licenses,
permits and franchises and qualify and remain qualified in all jurisdictions
where qualification is required; provided, however, that the provisions of this
subparagraph are subject to the terms of subparagraph 5.23 of the paragraph
below captioned "Mergers, Consolidations".
5.11 Compliance with Laws. The Company will at all times comply
with all applicable federal, state, and local laws, rules, and regulations, and
orders of any court or other governmental authority having jurisdiction and
which relate to the Security Property or the operations or business conducted
thereon.
5.12 Reports to SEC and to Stockholders. The Company will furnish
to the Purchaser, promptly upon the filing or making thereof, at least one (1)
copy of (a) all financial statements, reports, notices, and proxy statements
sent to stockholders, and (b) if the shares of the Company
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should become publicly traded, all regular and other reports filed by Company
or either of them with any securities and exchange or with the Securities and
Exchange Commission.
5.13 Adverse Change. The Company shall promptly notify the
Purchaser of any condition or event that constitutes, or with the lapse of
time, the giving of notice, or both, would constitute an Event of Default, and
promptly inform the Purchaser of any material adverse change in the condition
(financial, business or otherwise) of the Company.
5.14 Current Ratio. The Company will at all times maintain a
Current Ratio of not less than 1.25:1 determined quarterly on a Consolidated
Basis.
5.15 Working Capital. The Company will at all times maintain
Working Capital of at least $1 per laying hen determined quarterly on a
Consolidated Basis.
5.16 Working Capital Plus Committed Revolving Credit. The Company
will at all times maintain Working Capital plus Committed Revolving Credit of
at least $2 per laying hen determined quarterly on a Consolidated Basis.
5.17 Net Tangible Asset Test. The Company will at all times
maintain a ratio of Net Tangible Assets to Funded Debt of not less than (i)
1.80:1 for the Fiscal Year ending in 1994, (ii) 1.90:1 for the Fiscal Year
ending in 1995, and (iii) 2.00:1 for the Fiscal Year ending in 1996, and each
Fiscal Year thereafter, determined annually on a Consolidated Basis; provided,
however, if the Company issues equity securities or Subordinated Debt is
converted to equity, then the required ratio of Net Tangible Assets to Funded
Debt shall automatically increase to 2.00:1 for the Fiscal Year ending in which
the Company issues equity securities or Subordinated Debt is converted, as the
case may be.
5.18 Tangible Net Worth. The Company will not at any time permit
its Tangible Net Worth to be less than $38,000,000.00 plus (i) 50% of Net
Income (provided that such amount shall not be less than zero) plus (ii) 100%
of the proceeds from the issuance of equity securities plus (iii) 100% of the
amount of Subordinated Debt converted to equity, determined semi-annually on a
Consolidated Basis; provided, however, in no event shall the Tangible Net Worth
of the Company decrease from the previous date of determination.
5.19 Cash Flow to Debt Service. The Company's ratio of Cash Flow to
Debt Service averaged over twelve (12) rolling quarters shall be at all times
at least 1.50:1 determined on a Consolidated Basis.
5.20 Investment in Security Property. The Company shall reinvest
annually in capital improvements to or repair and maintenance of the Security
Property no less than twenty-five percent (25.0%) (determined on a Consolidated
Basis) of their annual depreciation as indicated on the financial reports and
statements delivered to Purchaser in accordance with this Agreement.
5.21 Dividends. Without the prior written consent of the Purchaser,
the Company shall not (i) declare or pay any dividend, (ii) make any
distribution on any shares of any class of its own stock,
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or (iii) redeem, retire, purchase or otherwise acquire for value any shares of
any class of its own stock, if in any Fiscal Year the aggregate amount of such
dividends and payments would exceed fifty percent (50%) of Net Income for such
Fiscal Year.
5.22 Lease Obligations. The Company will not enter into (i) any
leases of real or personal property whether as lessor or lessee or (ii) any
sale and lease back arrangements of any kind whereby the Company's aggregate
lease obligations for any fiscal year would exceed two and one-half of one
percent (2.5%) of Net Tangible Assets determined upon a Consolidated Basis;
provided, however, that leases of rolling stock shall be excluded for the
purposes of the foregoing calculation.
5.23 Mergers, Consolidations. The Company will not be a party to
any merger or consolidation with any other Person unless the Company shall be
the surviving corporation and, following such merger or consolidation, the
Company shall be in full compliance with all covenants, restrictions,
representations and warranties contained in this Agreement and in the other
Loan Documents, all determined on a Consolidated Basis. The Company shall,
however, give the Purchaser written notice of any merger or consolidations
permitted under this subparagraph within fifteen (15) days after the effective
date thereof.
5.24 Transfer of Stock in Company. The shares of stock in the
Company may be transferred subject, however, to the limitation that Xxxx Xxxxx
or members of his immediate family shall at all times own at least fifty-one
percent (51%) of the voting rights in the Company.
5.25 Accounting. The Company will maintain, and will cause each
Subsidiary to maintain, a system of accounting established and administered in
accordance with GAAP, and will accrue, and will cause each Subsidiary to
accrue, all such liabilities as shall be required by GAAP.
5.26 Other Information. The Company will deliver to Purchaser, so
long as any Obligations are outstanding:
(a) (i) within ten days after it or any of its Subsidiaries knows
or has reason to know that a Reportable Event has occurred with respect to any
Plan (whether or not the requirement for notice of such Reportable Event has
been waived by the PBGC), a certificate of a senior financial officer of the
Company setting forth the details of such Reportable Event and stating the
action, if any, that the Company or any ERISA Affiliate proposes to take with
respect thereto; (ii) upon request made from time to time and promptly
confirmed in writing, a copy of the most recent actuarial report and annual
report completed with respect to any Plan of the Company or any of its
Subsidiaries; (iii) within ten days after it or any of its Subsidiaries knows
or has reason to know that any of the following has occurred with respect to
any Plan: (A) any Plan has been terminated, (B) the Plan Sponsor intends to
terminate any Plan or amend any Plan in a manner that would be treated as a
termination under Section 4041(e) of ERISA, (C) a substantial cessation of
operations within the meaning of section 4068(f) of ERISA has occurred under
circumstances which could result in the treatment of the Company or any ERISA
Affiliate as a substantial employer under a Multiple Employer Plan or the
application of the provisions of section 4062, 4063 or 4064 of ERISA to the
Company or any ERISA Affiliate, or (D) the PBGC has instituted or indicated its
intention to institute proceedings under section 4042 of ERISA to terminate any
Plan or proceedings to appoint a trustee to administer any Plan or
Multiemployer
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Plan, a certificate of a senior financial officer of the Company setting forth
the details thereof and stating the action, if any, that the Company or any
ERISA Affiliate proposes to take with respect thereto; (iv) within ten days
after it or any of its Subsidiaries knows or has reason to know that (A) any of
them has experienced or caused a complete withdrawal or partial withdrawal
(within the meaning of section 4203, 4205 or 4063 of ERISA) from any Plan or
Multiemployer Plan, (B) a Multiemployer Plan is in reorganization or is
insolvent pursuant to sections 4241 or 4245 of ERISA or intends to terminate
under section 4041A of ERISA, or (C) a Multi-employer Plan intends to
terminate, a certificate of a senior financial officer of the Company setting
forth the details thereof and stating the action, if any, that the Company or
any ERISA Affiliate proposes to take with respect thereto; (v) within ten days
after it or any of its Subsidiaries knows or has reason to know that a
"prohibited transaction" within the meaning of section 406 of ERISA with
respect to any Employee Benefit Plan has occurred, a certificate of a senior
financial officer of the Company or Subsidiary, as the case may be, setting
forth the details of such prohibited transaction and the Company's or
Subsidiary's proposed response thereto; and (vi) within ten days after it, any
of its Subsidiaries or any of their respective ERISA Affiliates has any reason
to know of any event or series of events or conditions the occurrence or
existence of which could reasonably be expected to result in (A) a material
liability to the Company or any ERISA Affiliate under Title IV of ERISA, (B)
the institution of a proceeding against the Company or any ERISA Affiliate to
enforce section 515 of ERISA, or (C) the imposition of a lien on any property
of the Company or any ERISA Affiliate pursuant to section 4068 of ERISA or
section 412(n) of the Code, a certificate of a senior financial officer of the
Company setting forth the details of such event or condition and the action, if
any; that the Company, Subsidiary or ERISA Affiliate proposes to take with
respect thereto; provided that each certificate delivered pursuant to this
Section shall be accompanied by a copy of any notice or report filed with,
given to or received from the PBGC, the Internal Revenue Service or the
Department of labor with respect to the event or condition that is the subject
of the certificate;
(b) promptly, and in any event within five Business Days of the
occurrence of any of the following events, an Officer's Certificate describing
such event: (i) the Company or any Subsidiary shall have filed any amendment to
its charter documents or changed its jurisdiction of incorporation, or (ii) the
Company shall have changed its corporate name or shall do business under any
name other than Cal-Maine Foods, Inc., or (iii) the Company shall have changed
its principal place of business or its chief executive offices, or (iv) the
Company or any Subsidiary shall have become a party to any suit, action or
proceeding which, if adversely determined, would have a materially adverse
effect on the business, operations, condition (financial or otherwise),
properties or prospects of the Company and its Subsidiaries, taken as a whole,
or in which the uninsured portion of the projected settlement amount involved
therein could equal $2,000,000.00 or more, or (v) the Company or any Subsidiary
shall form or acquire any new Subsidiary, or (vi) any strike, walkout, work
stoppage or other material employee disruption relating to any plant or
facility owned or leased by the Company or any Subsidiary, or the expiration of
any labor contract to which the Company or any Subsidiary is a party or by
which it is bound (unless there exists a new labor contract in substitution
therefor), or (vii) the Company or any Subsidiary shall have obtained knowledge
that any of its insurance policies will be cancelled or not renewed and such
cancellation or failure to renew could reasonably be expected to have a
material adverse effect on the business, operations, condition (financial or
otherwise), properties or prospects of the Company and its Subsidiaries, taken
as a whole (unless there exists, or
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the Company reasonably expects to obtain upon such policy's termination, a
similar insurance policy in substitution therefor);
(c) promptly upon receipt thereof, copies of any notices to the
Company or any Subsidiary from any federal or state administrative agency
relating to any order, ruling, statute or other law or regulation which could
reasonably be expected to have a materially adverse effect on the business,
operations, condition (financial or otherwise), properties or prospects of the
Company and its Subsidiaries, taken as a whole;
(d) promptly, and in any event within five Business Days after the
Company shall become aware of the existence of an Event of Default, an
Officer's Certificate specifying the nature and period of existence thereof and
what action the Company or a Subsidiary, as the case may be, is taking or
proposes to take with respect thereto;
(e) promptly following the Company's receipt thereof but in no
event later than 10 Business Days after such receipt, copies of each
environmental report, audit or survey of the Security Property then or
previously owned by the Company or any Subsidiary prepared by the Company or by
an environmental consulting firm or other Person, whether at the expense of the
Company or of any previous owner of such Security Property;
(f) promptly after receiving (and in no event later than five days
after receipt thereof) a written audit adjustment proposal, notice of
deficiency, revenue agent's report or similar notice from the Internal Revenue
Service asserting a material deficiency with respect to the Company or any of
its Subsidiaries, a copy of any such written audit adjustment proposal, notice
of deficiency, revenue agent's report or similar notice;
(g) promptly following the Company's receipt of a request by
Purchaser therefor, any and all filing, recording, re-filing and rerecording of
the Security Documents and/or financing statements and continuation statements
with respect thereto as is necessary to protect and preserve the rights and
interests of the Purchaser in and to the Security Property and the Liens on and
in the Security Property created by the Security Documents; and
(h) with reasonable promptness, such other information and data
with respect to the Company or any Subsidiary as from time to time may be
reasonably requested.
5.27 Inspection. (a) Purchaser or Purchaser's representatives or
agents, shall have the right, upon reasonable notice to the Company and during
normal business hours, to visit and inspect any of the properties of the
Company and of its Subsidiaries, to examine the books of account and records of
the Company and of its Subsidiaries, to make copies and extracts therefrom, to
discuss the affairs, finances and accounts of the Company and of its
Subsidiaries with, and to be advised as to the same by, its and their officers,
employees, and independent public accountants and, subject to the prior written
consent of the Company, not to be unreasonably withheld, its and their
environmental consultants, all at such reasonable times and intervals as
Purchaser may desire; provided, however, that (i) Purchaser will offer the
Company the opportunity to be present at any such discussion and (ii) in each
case Purchaser agrees to comply with all applicable health and safety
regulations and that any
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such inspections or discussions shall not be disruptive to the normal business
activities of the Company or any Subsidiary, as the case may be. The Company
agrees to pay all reasonable fees of its environmental consultants and
accountants incurred by Purchaser in connection with Purchaser's exercise of
rights pursuant to this Section and if an Event of Default shall have occurred
and be continuing all out-of-pocket expenses incurred by Purchaser in
connection with Purchaser's exercise of rights pursuant to this Section. The
Company will, upon written request therefor, afford Purchaser the opportunity
to obtain any information, to the extent the Company possesses such information
or can acquire it without unreasonable effort or expense, necessary to verify
the accuracy of any of the representations and warranties made by the Company
hereunder.
5.28 Compliance with ERISA. The Company will not, and will not
permit any ERISA Affiliate to:
(a) (i) engage in any transaction in connection with which
the Company or any ERISA Affiliate could be subject to either a civil
penalty assessed pursuant to section 502(i) of ERISA or a tax imposed by
section 4975 of the Code, (ii) fail to make full payment when due of all
amounts which would be deductible by the Company or any ERISA Affiliate and
which, under the provisions of any Plan, applicable law or applicable
contract or collective bargaining agreement, the Company or any ERISA
Affiliate is required to pay as contributions thereto, or (iii) permit to
exist any accumulated funding deficiency, whether or not waived, with
respect to any Plan (other than a Multiemployer Plan or a Multiple Employer
Plan), if, in the case of any of subdivision (i), (ii) or (iii) above, such
penalty or tax, or the failure to make such payment, or the existence of
such deficiency, as the case may be, could have a material adverse effect
on the financial position of the Company; or
(b) permit the amount of unfunded benefit liabilities
(within the meaning of section 4001(a) (18) of ERISA) under each Plan
maintained at such time by the Company, any Subsidiary or any of their
respective ERISA Affiliates (other than Multiemployer Plans or Multiple
Employer Plans) to exceed $0.00 or permit the aggregate amount of such
unfunded benefit liabilities to exceed $0.00.
5.29 Maintenance of Properties; Insurance. The Company will
maintain or cause to be maintained in good repair, working order and condition
all properties used or useful in, and deemed material to, the business of the
Company and each Subsidiary and from time to time will make or cause to be made
all appropriate repairs, renewals and replacements thereof. The Company will
maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to its properties and business and the
properties and business of each Subsidiary against loss or damage of the kinds
customarily insured against by corporations of established reputation engaged
in the same or similar business and similarly situated, of such types and in
such amounts and with such deductibles and other self-insurance as are
customarily carried under similar circumstances by such other corporations.
5.30 Survey. On or before December 15, 1993, the Company shall
furnish the Purchaser a survey of the Ohio Security Property prepared,
certified and sealed by a surveyor satisfactory to the Purchaser showing, among
other things, the location of any existing improvements wholly within the
boundary lines of the Security Property and showing setback lines or building
lines, if any. The survey shall also show (a) the location of all easements
and rights of way and all other exceptions described in the title insurance
commitment heretofore submitted to the Purchaser (to the extent such
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matters can be shown) and (b) the courses and distances to and names of the
nearest intersecting public streets or roads. The survey shall include a
certification as to the location of the Security Property within any special
flood, mudslide or erosion hazard area and shall contain such other
certifications as Purchaser may require. The surveyor shall also execute such
survey reports and certifications as the title insurance company may require in
order to delete the survey exception contained in the Purchaser's title
insurance policy with respect to the Ohio Security Property. In addition, the
Company shall furnish to the Purchaser on or before December 15, 1993, (a) if
requested by Purchaser, a duly recorded modification to the Ohio Mortgage which
changes the legal description to match the description shown on the survey,
which modification will be prepared by counsel to Purchaser at the expense of
the Company, and (b) an endorsement to Purchaser's title insurance policy which
(i) adds the modification agreement as an additional insured instrument, (ii)
updates the effective date of the title policy to the date of recording of the
modification, without any further exceptions to title unless Purchaser consents
in writing thereto, (iii) providing a full ALTA 3.1 zoning endorsement and a
full comprehensive endorsement to the policy with respect to the Ohio Security
Property, (iv) deleting the survey exception with respect to the Ohio Security
Property and (v) providing such other affirmative coverage with respect to
matters of survey as Purchaser may require.
5.31 Place of Payments. All payments on account of the Notes or
other obligations in accordance with the provisions of this Agreement shall,
until changed by Purchaser as hereinafter provided, be made by delivery of the
Company's check or checks to:
Xxxx Xxxxxxx Mutual Life Insurance Company
Agricultural Xxxxxxxxxx Xxxxxxxxxx Xxxxxxx Xxxxxx
Xxxxx 000, 0000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
The place for or method of payment may be changed from time to time by
Purchaser by written notice to the Company setting forth the new place or
method of payment. The Purchaser expressly reserves the right to require that
payments be made by bank wire transfer of immediately available funds to a
destination designated by the Purchaser.
SECTION 6. Events of Default
The occurrence of any one or more of the following events (the "Events of
Default") shall constitute an event of default hereunder:
6.01 Principal, Interest or Premium.Any default in the payment of
the principal or interest or installments of principal and interest or premium
on any Note when the same shall be due and payable.
6.02 Indebtedness. Any default being made in payment of any
indebtedness secured by the Security Documents (other than specified in
paragraph 6.01 above) as such indebtedness becomes due, or in the payment of
the taxes, assessments or charges or insurance premiums as set forth in the
Security Documents.
6.03 Waste. If Strip or Waste be committed on or with respect to
the Security Property or improvements or other items constituting a part of the
Security Property be removed from the Security
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32
Property without the prior written consent of the Purchaser and shall not be
cured within sixty (60) days after written notice from Purchaser.
6.04 Other Default. Any default being made in the performance or
observance of any other terms, covenants or agreements of the Security
Documents or of the Notes or of this Agreement or of any other document or
instrument executed in connection therewith.
6.05 Foreclosure, Seizure, etc. The institution of any foreclosure
proceeding or proceeding to exercise a power of sale or other similar
proceeding or any attempted sale, seizure or other similar enforcement action
by the holder of any deed of trust, mortgage, security agreement or other lien
upon all or any part of the Security Property whether or not the deed of trust,
mortgage, security agreement or other lien is prior to or subordinate to any of
the Security Documents.
6.06 Receiver, Bankruptcy, etc. If by order of a court of competent
jurisdiction a receiver or liquidator or trustee of the Company or the record
owner for the time being of any part of the Security Property shall be
appointed and shall not have been discharged within sixty (60) days, or if by
decree of such court the Company or such owner shall be adjudicated bankrupt or
insolvent and such decree shall continue to be undischarged and unstayed for
thirty (30) days after the entry thereof, or if a petition to reorganize the
Company or such owner pursuant to the Federal Bankruptcy Code or any other
similar statute applicable to the Company or such owner as now or hereafter in
effect shall be filed against the Company or such owner and shall not be
dismissed within one hundred twenty (120) days after such filing, or the
Company or such owner shall file a petition in voluntary bankruptcy under any
provision of any bankruptcy law or shall consent to the filing of any
bankruptcy or reorganization petition under any such law, or if (without
limitation of the generality of the foregoing) the Company or such owner shall
file a petition for an arrangement or to reorganize the Company or such owner
pursuant to the Federal Bankruptcy Code or any other similar statute applicable
to such owner, as now or hereafter in effect, or if the Company or such owner
shall institute any proceeding for dissolution or liquidation, or shall make an
assignment for the benefit of creditors, or shall admit in writing inability to
pay his or its debts generally as they become due, or shall consent to the
appointment of a receiver or trustee or liquidator of the Company or such
owner.
6.07 Representations and Warranties. Any representation or warranty
by the Company contained in this Agreement or otherwise made in connection with
the loan evidenced by the Notes shall be false or erroneous in any material
respect including, without limitation any warranty or representation made in
the Commitment.
6.08 Hazardous Material. If at any time it shall be determined that
(1) any Hazardous Material shall be located upon or under the Security Property
which is not in full compliance with all applicable Environmental Laws, or (2)
the Security Property violates any applicable Environmental Laws, or (3) the
Company is in violation of any of the representations, warranties and
agreements contained in paragraph 32 of the Deed of Trust or in paragraph 32 of
the Mortgage.
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SECTION 7. Rights and Remedies
If any one or more Events of Default shall occur, then in each and every
such case, the Purchaser at its option may at any time thereafter exercise
and/or enforce any or all of the following rights and remedies:
7.01 Acceleration. Declare without notice to the Company all of the
Obligations to be immediately due and payable, whereupon the same shall become
due and payable, together with accrued and unpaid interest thereon, without
presentment, demand, protest, or notice, all of which the Company hereby waive.
7.02 Exercise of Rights and Remedies. Exercise any rights and
remedies available to the Purchaser under this Agreement, the Notes, the
Security Documents or the other Loan Documents, and under applicable laws.
7.03 Remedies, etc., Cumulative. Each right, power, and remedy of
the Purchaser as provided for in this Agreement or in the other Loan Documents
or now or hereafter existing at law or in equity or by statute or otherwise
shall be cumulative and concurrent and shall be in addition to every other
right, power, or remedy provided for in this Agreement or in the other Loan
Documents or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or beginning of the exercise by the Purchaser of
any one or more of such rights, powers, or remedies shall not preclude the
simultaneous or later exercise by the Purchaser of any or all such other
rights, powers, or remedies.
7.04 No Waiver, etc. No failure or delay by the Purchaser to insist
upon the strict performance of any term, condition, covenant, or agreement of
this Agreement or of any of the other Loan Documents, or to exercise any right,
power, or remedy consequent upon a breach thereof, shall constitute a waiver of
any such term, condition, covenant, or agreement or of any such breach, or
preclude the Purchaser from exercising any such right, power, or remedy at any
later time or times. By accepting payment after the due date of any amount
payable under this Agreement or under the Notes or under any of the other Loan
Documents, the Purchaser shall not be deemed to waive the right either to
require prompt payment when due of all other amounts payable under this
Agreement, the Notes, or any of the other Loan Documents, or to declare an
Event of Default for failure to effect such prompt payment of any such other
amount.
7.05 Accounts and Set Off. The Company hereby grants to the
Purchaser, as security for the full and punctual payment and performance of the
Obligations, a continuing lien on and security interest in all now or hereafter
existing balances, credits, accounts, deposits (general or special, time or
demand, provisional or final) and all other sums credited by, maintained with
or due from the Purchaser or any affiliate of the Purchaser to the Company or
subject to withdrawal by the Company; and regardless of the adequacy of any
collateral or other means of obtaining repayment of the Obligations, the
Purchaser may at any time and without notice to the Company set off the whole
or any portion or portions of any or all such balances, credits, accounts,
deposits and other sums against any and all of the Obligations.
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SECTION 8. Miscellaneous
8.01 Expenses, etc. Whether or not the transactions contemplated
hereby shall be consummated, the Company will pay all expenses incurred by
Purchaser in connection with such transactions and in connection with any
amendments or waivers (whether or not the same become effective) and in
connection with the enforcement of any of Purchaser's rights under or in
respect hereof or the Notes, including, without limitation: (a) the cost and
expenses of preparing and reproducing this Agreement and the other Loan
Documents, of furnishing all opinions by counsel for the Company (including any
opinions requested by Purchaser's special counsel as to any legal matter
arising hereunder) and all certificates on behalf of the Company; (b) the cost
of delivering to your principal office, insured to your satisfaction, the Notes
sold to you hereunder and any Notes delivered to you upon any substitution
thereof pursuant hereto or thereto and of your delivering any Notes, insured to
your satisfaction, upon any such substitution; (c) the reasonable fees,
expenses and disbursements of Purchaser's special counsel in connection with
such transactions and any such amendments or waivers; (d) the cost and expenses
of obtaining a Private Placement Number for the Notes; (e) the reasonable
out-of-pocket expenses incurred by Purchaser in connection with such
transactions and any such amendments or waivers; and (f) costs and expenses,
including attorneys' fees, incurred by Purchaser which shall hold any Notes in
enforcing any rights under any Loan Documents or in responding to any subpoena
or other legal process issued in connection with this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby or by reason of
Purchaser's having acquired any Note, including without limitation, costs and
expenses incurred in any bankruptcy case. The Company also agree to pay the
costs and expenses or other taxes, fees and charges incurred with respect to
the recording, registering or filing of financing statements in respect of any
Lien created by or to be maintained under any Security Document and compliance
with all statutes and regulations as may be necessary or desirable in order to
establish, protect, perfect and preserve any Lien created by or to be
maintained under any Security Document and the rights of the holders of the
Notes. The Company also will pay, and will save Purchaser and each holder of
any Notes harmless from, all claims in respect of the fees, if any, of brokers
and finders and any and all liabilities with respect to any taxes including
interest and penalties) which may be payable in respect of the execution and
delivery hereof, the issue of the Notes hereunder and any amendment or waiver
under or in respect hereof or of the Notes.
8.02 Survival. All covenants, agreements, representations, and
warranties made herein and in any other instruments or documents delivered
pursuant hereto shall survive the execution and delivery of the Notes and shall
continue in full force and effect so long as any of the Obligations are
outstanding and unpaid.
8.03 Notices. All notices, demands, requests and other
communications required under this Agreement or the Notes or the other Loan
Documents shall be in writing and shall be deemed to have been properly given,
if personally delivered, on the date of such delivery, or, if sent by Certified
U.S. Mail, return receipt requested, on the third (3rd) business day following
deposit in the U.S. mail, postage prepaid or if sent by overnight courier such
as Federal Express, Airborne, Xxxxx or similar reputable national courier with
guaranteed overnight delivery, on the day following the date delivered to such
overnight courier. All notices shall be addressed to the party to whom it is
intended at its address set forth below:
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Company: Cal-Maine Foods, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: X. X. Xxxxxx
Purchaser: Xxxx Xxxxxxx Mutual Life Insurance Company
Xxxx Xxxxxxx Place
Xxxx Xxxxxx Xxx 000
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Agribusiness Investment Group - T57
with a copy to: Xxxx Xxxxxxx Mutual Life Insurance Company
Office Manager
0000 Xxxxx Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Any party may designate a change of address by written notice to the other,
given at least ten (10) days before such change of address is to become
effective.
8.04 Change, etc. Neither this Agreement nor any term, condition,
representation, warranty, covenant, or agreement hereof may be changed, waived,
discharged, or terminated orally but only by an instrument in writing by the
party against whom such change, waiver, discharge, or termination is sought.
8.05 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.
8.06 Terms Binding. All of the terms, conditions, stipulations,
warranties, representations, and covenants of this Agreement shall apply to and
be binding upon, and shall inure to the benefit of, the Company and the
Purchaser and each of their respective heirs, personal representatives,
successors, and assigns.
8.07 Gender, etc. Whenever used herein, the singular number shall
include the plural, the plural the singular, and the use of the masculine,
feminine, or neuter gender shall include all genders.
8.08 Headings. The section and subsection headings in this
Agreement are for convenience only and shall not limit or otherwise affect any
of the terms hereof.
8.09 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one and the same instrument.
8.10 Further Assurances and Corrective Instruments. The parties
hereto agree that they will, from time to time, execute and deliver, or cause
to be executed and delivered, such supplements hereto
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36
and such further instruments as may reasonably be required for carrying out the
intention of the parties to, or facilitating the performance of, this
Agreement.
8.11 Estoppel Certificate. The Company will, upon not less than ten
(10) business days' request by the Purchaser or any other party to this
transaction, execute, acknowledge, and deliver to such person a statement in
writing, certifying (a) that this Agreement and the other Loan Documents are
unmodified and in full force and effect and the payments required thereunder to
be paid by the Company have been paid, and (b) the then unpaid principal
balance of the Notes; and stating whether or not to the knowledge of the signer
of such certificate any party to any of the Loan Documents is in default in the
performance of any covenant, agreement, or condition contained therein and, if
so, specifying each such default of which the signer may have knowledge, it
being intended that any such statement delivered pursuant to this section may
be relied upon by the Purchaser and the other parties to this transaction.
8.12 Illegality. If fulfillment of any provision hereof or any
transaction related hereto or to the other Loan Documents, at the time
performance of such provisions shall be due, shall involve transcending the
limit of validity prescribed by law, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity; and if any clause or
provision herein contained operates or would prospectively operate to
invalidate this Agreement or the other Loan Documents in whole or in part, then
such clause or provision only shall be void, as though not herein contained,
and the remainder of this Agreement and such other Loan Documents shall remain
operative and in full force and effect; provided, however, that if any such
provision pertains to the repayment of the Obligations, the occurrence of any
such invalidity shall constitute an Event of Default hereunder.
8.13 Assignment. This Agreement and the other Loan Documents may
not be assigned, in whole or in part, by the Company without the prior written
consent of the Purchaser.
8.14 Statements. All statements contained in any certificate or
other instrument delivered by or on behalf of the Company pursuant hereto or in
connection with the transactions contemplated hereby shall be deemed
representations and warranties of the Company hereunder unless such certificate
or instrument shall expressly state to the contrary.
8.15 Entire Agreement. This Agreement embodies the entire agreement
and understanding between you and the Company and supersedes all prior
agreements and understandings relating to the subject matter hereof.
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IN WITNESS WHEREOF, the Purchaser and the Company have each caused this
Agreement to be executed under seal as of the day and year first above written.
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY,
a Massachusetts corporation
By:
----------------------------------------
Title:
-------------------------------------
[Signatures Continued on Next Page]
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38
CAL-MAINE FOODS, INC., a
Delaware corporation
ATTEST: By:
---------------------------------------
Chief Executive Officer
--------------------------------
Secretary
-----------------
[CORPORATE SEAL]
-32-
39
EXHIBIT A
Form of Note
40
EXHIBIT B
Opinion of Xxxxx Xxxxx Xxxxxxx & Xxxxx
41
EXHIBIT C
Opinion of Xxxxxxx, Singleton, McNally, Xxxxxxxxxx & Xxxxxx
42
EXHIBIT D
Opinion of Ohio Local Counsel for the Company
43
EXHIBIT E
Opinion of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx
44
EXHIBIT F
(Section 4.11)
Capitalization of the Company
Options
Convertible Stock
45
EXHIBIT G
(Section 4.12)
Subsidiaries
46
EXHIBIT H
(Section 4.13)
Liabilities
47
EXHIBIT I
(Section 4.14)
Changes, etc.
48
EXHIBIT J
(Section 4.16)
Funded Debt
Restrictions on Liabilities
49
EXHIBIT J-1
(Section 4.17)
Amount of Committed Revolving Credit
50
EXHIBIT K
(Section 4.18)
UCC Financing Statements
51
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
Agricultural Investment Department
Agribusiness Investment Group
Xxxxx 000
0000 Xxxxx Xxxxxxx Xxxx [XXXX XXXXXXX FINANCIAL SERVICES LOGO]
Xxxxxx, XX 00000
(000) 000-0000
XXXXXXX X. XXXXXX
Agribusiness Investment Officer NOVEMBER 30, 1994
Xx. Xxxxx Xxxxxx
Cal-Maine Foods, Inc.
X.X. Xxx 0000
Xxxxxxx, XX 00000
Dear Xxxxx:
We have approved your request for a temporary waiver of the cash flow to debt
service covenant and your request for a permanent change of the cash flow to
debt service ratio from 1.55 : 1 to 1.25 : 1.
The formula for this covenant will be adjusted as follows:
The numerator would be comprised of:
Rolling four quarters depreciation
Rolling four quarters interest
Rolling 12 quarters pre-tax income divided by three
The denominator would be comprised of:
Current portion of long-term debt
Rolling four quarters interest
As we indicated in our meeting, we are concerned about Cal-Maine's level of
capital expenditures and the lack of material earnings, during the last three
years. We ask that the Company consider reducing its level of capital
expenditures until a recovery in earnings is fully underway.
We would like to have a follow-up meeting with you in April 1995 to get an
update on the capital expenditure program as well as your financial position.
Xxxxx, if you have any questions, please give me a call.
Sincerely,
/s/ XXXX XXXXXX
Xxxx Xxxxxx
cc: Xxxxx XxXxxxxxxx
52
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
Agricultural Investment Department
Agribusiness Investment Group
Suite 230
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, XX 00000 [XXXX XXXXXXX FINANCIAL SERVICES LOGO]
(000) 000-0000
XXXXXXX X. XXXXXX
Agribusiness Investment Officer
July 25, 1995
Xx. Xxxxx Xxxxxx
Cal-Maine Foods, Inc.
X.X. Xxx 0000
Xxxxxxx, XX 00000
Dear Xxxxx:
We have approved your request for a loan modification. The net tangible assets
to funded debt covenant shall be modified to reflect 1.80 to 1 for fiscal year
1995 and 1996, and 1.90 to 1 for fiscal year 1997 and thereafter. All
additional covenants shall remain the same.
As a condition of this modification, capital expenditures for fiscal year 1996
shall be limited to the sum of fiscal year 1996 depreciation plus amortization.
Xxxxx, if you have any questions, please give me a call.
Sincerely,
/s/ XXXX XXXXXX
Xxxx Xxxxxx
cc: Xxxxx XxXxxxxxxx
53
XXXX XXXXXXX MUTUAL LIFE INSURANCE COMPANY
Bond and Corporate
Finance Department [XXXX XXXXXXX OLYMPIC WORLDWIDE SPONSOR LOGO]
Xxxx Xxxxxxx Xxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxx, Xxxxxxxxxxxxx 00000
October 18, 1996
Cal-Maine Foods, Inc.
0000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: X.X. Xxxxxx
Re: Note Purchase Agreement dated as of November 10, 1993
Gentlemen:
Reference is made to that certain Note Purchase Agreement dated as of
November 10, 1993 between Xxxx Xxxxxxx Mutual Life Insurance Company and
Cal-Maine Foods, Inc., as amended by letter dated July 25, 1995 (the
"Agreement"). Unless otherwise defined herein, capitalized terms shall
have the meanings ascribed to them in the Agreement.
Section 5.21 of the Agreement is hereby deleted and replaced in its
entirety as follows:
"5.21 Dividends. The Company shall not declare or pay any
dividend if such payment would cause a violation of any other covenant
herein."
Please confirm your agreement with the foregoing by signing this
letter in the space indicated below.
Very truly yours,
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By: [sig]
-------------------------
Title: Investment Officer
AGREED:
CAL-MAINE FOODS, INC.
By: [sig]
--------------------------
Title: VP/CFO
