EXHIBIT 10.33
PILGRIM'S PRIDE CORPORATION
and
XXXX XXXXXXX LIFE INSURANCE COMPANY
(formerly known as Xxxx Xxxxxxx Mutual Life Insurance Company)
THIRD AMENDED AND RESTATED
NOTE PURCHASE AGREEMENT
Dated as of August 30, 2002
TABLE OF CONTENTS
ARTICLE PAGE
1.1. Defined Terms..........................................................
1.2. Miscellaneous..........................................................
ARTICLE 2. THE NOTES........................................................
2.1. Authorization of 2002 Notes............................................
2.2. Sale and Purchase of 2002 Notes........................................
2.3. Sale and Purchase of Additional Notes..................................
ARTICLE 3. CLOSING..........................................................
ARTICLE 4. CONDITIONS TO CLOSING............................................
4.1. Conditions to Purchase of 2002 Notes...................................
4.2. Conditions to Purchase of Additional Notes.............................
ARTICLE 5. REPRESENTATIONS AND WARRANTIES RELATING TO
THE COMPANY......................................................
5.1. Organization, Standing, etc............................................
5.2. Qualification..........................................................
5.3. Business and Financial Statements......................................
5.4. Adverse Changes........................................................
5.5. Tax Returns and Payments...............................................
5.6. Debt...................................................................
5.7. Title to Properties and Assets; Liens..................................
5.8. Litigation.............................................................
5.9. Compliance with Collateral Agreements..................................
5.10. Compliance with Other Instruments......................................
5.11. Governmental Consents..................................................
5.12. Permits and Licenses...................................................
5.13. Status Under Certain Federal Statutes..................................
5.14. Use of Proceeds; Margin Regulations....................................
5.15. Compliance with ERISA..................................................
5.16. Disclosure.............................................................
5.17. Solvency of the Company................................................
5.18. Environmental Matters..................................................
5.19. Brokers................................................................
5.20. No Defaults............................................................
5.21. Offer of Notes.........................................................
ARTICLE 6. REPRESENTATIONS AND WARRANTIES RELATING..........................
6.1. Easements and Utility Services.........................................
6.2. Contracts..............................................................
6.3. Permits................................................................
6.4. Reports of Engineers...................................................
6.5. Plans and Specifications...............................................
6.6. Soil Reports...........................................................
6.7. Zoning.................................................................
6.8. Certificates of Occupancy..............................................
6.9. Compliance with Laws...................................................
ARTICLE 7. INTEREST RATE PROVISIONS.........................................
7.1. Interest on Fixed Notes................................................
7.2. Interest on Floating Notes.............................................
7.3. Interest Rate Lock.....................................................
7.4. Setting of Interest Rates on Additional Notes..........................
7.5. Past Due Payments......................................................
ARTICLE 8. PAYMENT OF NOTES.................................................
8.1. Required Payments of Notes.............................................
8.2. Optional Prepayments of Notes; Allocations.............................
8.3. Notice of Prepayments; Officers' Certificate...........................
8.4. Maturity; Surrender....................................................
ARTICLE 9. ACCOUNTING, REPORTING AND INSPECTION COVENANTS...................
9.1. Accounting.............................................................
9.2. Financial Statements and Other Information.............................
9.3. Inspection.............................................................
9.4. Acquired Real Property.................................................
ARTICLE 10. BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY..................
10.1. Consolidated Net Worth.................................................
10.2. Consolidated Working Capital...........................................
10.3. Current Ratio..........................................................
10.4. Fixed Charge Coverage..................................................
10.5. Funded Debt to Capitalization..........................................
10.6. Liens..................................................................
10.7. Investments; Debt; Guarantees..........................................
10.8. Restricted Payments....................................................
10.9. Leases.................................................................
10.10.Consolidation, Merger and Sale of Substantially All Assets.............
10.11.Formation of Subsidiaries..............................................
10.12.Interested Party Transactions..........................................
10.13.Existence..............................................................
10.14.Payment of Taxes and Claims; Tax Consolidation.........................
10.15.Compliance with Laws...................................................
10.16.Compliance with ERISA..................................................
10.17.Maintenance of Properties; Insurance...................................
10.18.Title..................................................................
10.19.Conduct of Business....................................................
00.00.Xxxx of Assets.........................................................
10.21.Substitution of Collateral.............................................
10.22.Permits and Licenses...................................................
10.23.Further Assurances.....................................................
ARTICLE 11. ENVIRONMENTAL MATTERS............................................
11.1. Definitions............................................................
11.2. Indemnification........................................................
11.3. Agreement to Remediate.................................................
11.4. Covenants..............................................................
11.5. Site Assessments.......................................................
11.6. Default; Remedies; Subrogation.........................................
11.7. Survival...............................................................
11.8. Conflicts..............................................................
ARTICLE 12. REGISTRATION, TRANSFER, AND SUBSTITUTION OF NOTES................
12.1. Note Register; Ownership of Notes......................................
12.2. Transfer and Exchange of Notes.........................................
12.3. Replacement of Notes...................................................
ARTICLE 13. PAYMENTS ON NOTES................................................
ARTICLE 14. EVENTS OF DEFAULT AND ACCELERATION...............................
14.1. Events of Default......................................................
14.2. Acceleration...........................................................
14.3. Remedies...............................................................
ARTICLE 15. EXPENSES.........................................................
ARTICLE 16. MISCELLANEOUS....................................................
16.1. Survival...............................................................
16.2. Amendments and Waivers.................................................
16.3. Indemnification........................................................
16.4. Usury Not Intended.....................................................
16.5. Notices................................................................
16.6. Reproduction of Documents..............................................
16.7. Successors and Assigns.................................................
16.8. Entire Agreement.......................................................
16.9. GOVERNING LAW..........................................................
16.10.Invalid Provisions.....................................................
16.11.Headings...............................................................
16.12.Counterparts...........................................................
16.13.Further Action.........................................................
16.14.Creditors..............................................................
16.15.Waiver.................................................................
16.16.Release................................................................
EXHIBITS
A-1 Form of Fixed Note
A-2 Form of Floating Note
B-1 Form of Opinion (Closing)
B-2 Form of Opinion (Additional Notes)
C Receipt of Exchanged Notes
D Closing Certificate
E Officer's Certificate
F Closing Documents (Additional Notes)
THIRD AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
This Third Amended and Restated Note Purchase Agreement (this
"Agreement") dated as of August 30, 2002, by and between Xxxx Xxxxxxx Life
Insurance Company (formerly known as Xxxx Xxxxxxx Mutual Life Insurance
Company) ("Purchaser") and Pilgrim's Pride Corporation, a Delaware corporation
(the "Company").
R E C I T A L S :
WHEREAS, the Company, Purchaser and Signature 1A (Cayman), Ltd. have
heretofore entered into that certain Second Amended and Restated Note Purchase
Agreement dated July 15, 2000 (the "2000 Note Purchase Agreement"), which
amended and restated that certain Amended and Restated Note Purchase Agreement
dated April 14, 1997 (the "1997 Note Purchase Agreement"), which amended and
restated that certain Note Purchase Agreement dated February 15, 1996 (the
"Original Note Purchase Agreement") between the Company and Purchaser in its
entirety (collectively, the "Prior Note Purchase Agreements"); and
WHEREAS, pursuant to the Prior Note Purchase Agreements, the following
promissory notes remain outstanding: a 9.39% note in the original principal
amount of $5,624,071.72, a 9.45% note in the original principal amount of
$1,614,122.43, a 7.21% note in the original principal amount of $50,000,000.00,
two 7.11% notes in the original principal amounts of $9,761,805.00, and
$3,000,000.00, respectively, and a 7.07% note in the original principal amount
of $15,000,000.00 (each individually an "Old Note" and collectively, the "Old
Notes"); and
WHEREAS, the parties desire to amend and restate the 2000 Note Purchase
Agreement in its entirety pursuant to the terms and conditions of this
Agreement, and in connection therewith, the parties desire to modify and
restate the Old Notes through the issuance of new notes.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth in this Agreement, the parties to this Agreement mutually
agree as follows:
ARTICLE 1.
DEFINITIONS
1.1. Defined Terms. As used herein the following terms have the
following respective meanings:
Acquired Property: the meaning specified in Section 9.4.
Additional Fixed Notes: the meaning specified in Section 2.3.
Additional Floating Notes: the meaning specified in Section 2.3.
Additional Notes: collectively, the Additional Fixed Notes and
Additional Floating Notes, if any.
Adverse Environmental Impact: the meaning specified in Section 11.1.
Affiliate: with respect to any Person, (a) any other Person directly or
indirectly controlling, controlled by or under direct or indirect common
control with, such Person, or (b) any director, officer or partner of such
Person. A Person shall be deemed to control another Person if such Person
possesses, directly or indirectly, the power to direct or cause the direction
of the management and policies of such other Person, whether through the
ownership of voting securities, by contract or otherwise. The term "control"
shall mean the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and shall in any
event include the ownership or power to vote ten percent (10%) or more of the
outstanding equity interests of such other Person. For purposes hereof, Xxxxxx
Xxxxxxx Midland Company ("ADM") shall not be deemed an Affiliate of the Company
so long as ADM does not own or control more than twenty percent (20%) of the
outstanding stock of the Company.
Appraised Value: The appraised value of the Mortgaged Properties or
other Collateral acceptable to Purchaser, as determined by Xxxxx X. Xxxxxxx,
MIA, or such other appraiser selected by Purchaser.
Bankruptcy Code: the meaning provided in Section 14.1(f).
Business Day: any day on which national banks are open in Dallas, Texas
and Boston, Massachusetts.
Called Principal: with respect to any Fixed Note, the principal of such
Fixed Note that is to be prepaid pursuant to Section 8.2 or is declared to be
immediately due and payable pursuant to Article 14, as the context requires.
Capital Lease Obligations: all obligations to pay rent or other amounts
under a lease of (or other agreement conveying the right to use) Property to
the extent such obligations are required to be classified and accounted for as
a capital lease on a balance sheet under GAAP, and for purposes of this
Agreement, the amount of such obligation shall be the capitalized amount
thereof, determined in accordance with GAAP.
Capitalization: as at any date of determination, and in conformity with
GAAP, the amount of capital stock and additional paid-in-capital plus retained
earnings (or minus accumulated deficits) of the Company.
Cash Equivalents: any type of instrument that would qualify as a
Permitted Investment, but not otherwise.
Certificate: the meaning specified in Section 4.1(d).
Closing: the meaning specified in Article 3.
Closing Date: the meaning specified in Article 3.
Code: the Internal Revenue Code of 1986, as amended from time to time.
Collateral: the Mortgaged Properties and the properties described in the
Financing Statements.
Collateral Agreements: the Security Documents, the Financing Statements,
the Receipt of Exchanged Notes, the Certificate and all other documents and
instruments that may be executed or delivered hereunder or in connection
herewith.
Commission: the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act.
Company: Pilgrim's Pride Corporation, a Delaware corporation, or any
successor thereto by merger, consolidation, or otherwise.
Consolidated Free Cash Flow: in respect of any period, the sum of (a)
Consolidated Net Income for such period and (b) the amount of all depreciation
and amortization allowances and other non-cash expenses of the Company and its
Subsidiaries but only to the extent deducted in the determination of
Consolidated Net Income for such period.
Consolidated Intangible Assets: license agreements, trademarks, trade
names, patents, capitalized research and development, proprietary products (the
results of past research and development treated as long term assets and
excluded from inventory) and goodwill (all determined on a consolidated basis
in accordance with GAAP.
Consolidated Interest Expense: for any period, the aggregate
consolidated interest expense of the Company and the Subsidiaries for such
period, as determined in accordance with GAAP (minus, to the extent included
therein, any interest expense not paid or payable in cash) including, without
limitation (and without duplication in any instance), (a) all interest paid on
Debt of the Company and the Subsidiaries, (b) all commissions, discounts and
other fees and charges owed with respect to letters of credit and banker's
acceptances allocable to or amortized over such period, (c) net costs under
Interest Rate Agreements and (d) the portion of any amount payable under
Capital Lease Obligations that is, in accordance with GAAP, allocable to
interest expense.
Consolidated Net Income: for any period means all amounts which, in
conformity with GAAP, would be included under net income (or deficit) on a
consolidated income statement of the Company and the Subsidiaries for such
period, after deducting all operating expenses, provisions for all taxes and
reserves (including, but not limited to, reserves for deferred income taxes),
and all other proper deductions, all in conformity with GAAP.
Consolidated Net Worth: the total assets minus the total liabilities of
the Borrower and its Subsidiaries, all determined on a consolidated basis as in
accordance with GAAP.
Consolidated Working Capital: total Current Assets less Current
Liabilities of the Company and its Subsidiaries on a consolidated basis.
Current Assets: the consolidated assets of the Company and its
Subsidiaries which can be readily converted into cash within one year and all
other assets deemed current assets in accordance with GAAP.
Current Liabilities: Debt, trade payables, accrued expenses and other
obligations which must be satisfied or have maturities within one year,
including the outstanding balance of the Company's revolving credit facility to
the extent due and payable within one year.
Debt: (a) indebtedness for borrowed money, including long-term and
short-term debt, obligations and liabilities secured by any Lien existing on
property owned subject to such Lien, whether or not the indebtedness,
obligation or liability secured thereby shall have been assumed, and (b) all
guarantees given by such Person with respect to obligations described in clause
(a) of this definition (other than with respect to the Company, guarantees of
trade payables of Pilgrim's-Pride-Mexico).
Default Rate: an amount equal to the applicable interest rate for each
Note plus two percent (2%), but not to exceed the Highest Lawful Rate.
Discounted Value: with respect to the Called Principal of any Fixed
Note, the amount obtained by discounting all Remaining Scheduled Payments with
respect to such Called Principal from their respective scheduled due dates to
the Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on a semiannual
basis) equal to the Reinvestment Yield with respect to such Called Principal.
EBITDA: for any period, shall mean consolidated net income of the
Company and the Subsidiaries after restoring amounts deducted for depreciation,
amortization, interest expense and taxes.
Eligible Subsidiary: any corporation or other legal entity organized
under the laws of a state of the United States and located entirely within the
United States and 100% of all equity interests of which is owned by the Company
either directly or through another Eligible Subsidiary.
Environmental Activity: the meaning specified in Section 11.1.
Environmental Condition: the meaning specified in Section 11.1.
Environmental Damages: the meaning specified in Section 11.1.
Environmental Laws: the meaning specified in Section 11.1.
ERISA: the Employee Retirement Income Security Act of 1974, as amended
from time to time.
Event of Default: the meaning specified in Section 14.1.
Exchange Act: the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Commission thereunder, all as the same shall be in
effect at the time.
Financial Statements: the meaning specified in Section 5.3.
Financing Statements: the financing statements specified in
Section 4.1(d) and any other financing statements delivered by the Company to
the Purchaser evidencing the lien granted by the Security Documents.
Fiscal Year: the fiscal year of the Company.
Fixed Charge Coverage Ratio: the ratio of (a) EBITDA plus total lease
payments relating to non-cancelable operating leases (other than payments under
Capital Lease Obligations) to (b) the sum of (i) Consolidated Interest Expense,
(ii) total lease payments relating to non-cancelable operating leases (other
than Capital Lease Obligations), (iii) principal payments due on or scheduled
mandatory redemptions of Debt (including the Notes) within one year, whether or
not actually paid and (iv) the current portion of Capital Lease Obligations,
all determined on a consolidated basis for the Company and its Subsidiaries.
Fixed Notes: the 2002 Notes and any Additional Fixed Notes.
Floating Notes: any Additional Floating Notes.
Funded Debt: with respect to the Company and its Subsidiaries, all Debt
of the Company and its Subsidiaries which by its terms or by the terms of any
instrument or agreement relating thereto matures, or which is otherwise payable
or unpaid, one year or more from, or is directly or indirectly renewable or
extendible at the option of the obligor in respect thereof to a date one year
or more (including, without limitation, an option of such obligor under a
revolving credit or similar agreement obligating the lender or lenders to
extend credit over a period of one year or more) from, the date of the creation
thereof.
GAAP: generally accepted accounting principles as in effect from time to
time in the United States of America as set forth from time to time in the
opinions of the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements of the Financial Accounting
Standards Board or in such opinions and statements of such other entities as
shall be approved by a significant segment of the accounting profession.
Governmental Authority: any nation or government, any state or other
political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to any government.
Hazardous Substances: the meaning specified in Section 11.1.
Highest Lawful Rate: the meaning specified in Section 16.4.
Indemnified Party: the meaning specified in Section 11.2.
Interest Period: with respect to the Floating Notes, a period commencing
(a) the date of issuance thereof (with respect to any Additional Floating
Notes) or (b) in the case of subsequent Interest Periods under any Additional
Floating Notes or Interest Period under any other Floating Notes, on the
termination date of the immediately preceding Interest Period applicable
thereto in the case of a rollover to a new Interest Period in accordance with
Section 7.2, and ending in each case three (3) months, six (6) months or one
year thereafter as the Company shall select in accordance with Section 7.2;
provided, however, that (i) any Interest Period that would otherwise end on a
day that is not a LIBOR Business Day shall be extended to the next succeeding
LIBOR Business Day unless such next succeeding LIBOR Business Day falls in
another calendar month, in which case such Interest Period shall end on the
next preceding LIBOR Business Day and (ii) any Interest Period that would
otherwise end after the Maturity Date shall end on the Maturity Date.
Interest Rate Agreement: any interest rate protection agreement,
interest rate future, interest rate option, interest rate swap, interest rate
cap or other interest rate hedge or arrangement under which the Company or any
of the Subsidiaries is a party or a beneficiary.
Interest Rate Set Window: the period of time not more than ten (10) days
nor less than five (5) days prior to the commencement of each Interest Period.
Investment: any direct or indirect purchase or other acquisition by a
Person of stock or other securities of any other Person, or any direct or
indirect loan, advance or capital contribution by a Person to any other Person,
including all indebtedness and accounts receivable from such other Person that
did not arise from sales to such other Person in the ordinary course of
business.
LIBOR Business Day: a Business Day on which dealings in dollars are
carried out in the London interbank eurodollar market.
LIBOR Premium: with respect to any Floating Note, a premium of (a) five
percent (5%) of the principal amount prepaid, if the prepayment occurs after
the date that is five (5) years following and on or before the date that is six
(6) years following the date of issuance of such Floating Note; (b) four
percent (4%) of the principal amount prepaid, if the prepayment occurs after
the date that is six (6) years following and on or before the date that is
seven (7) years following the date of issuance of such Floating Note;
(c) three percent (3%) of the principal amount prepaid, if the prepayment
occurs after the date that is seven (7) years following and on or before the
date that is eight (8) years following the date of issuance of such Floating
Note; (d) two percent (2%) of the principal amount prepaid, if the prepayment
occurs after the date that is eight (8) years following and on or before the
date that is nine (9) years following the date of issuance of such Floating
Note; and (e) one percent (1%) of the principal amount prepaid, if the
prepayment occurs after the date that is nine (9) years following and on or
before the date that is ten (10) years following the date of issuance of such
Floating Note.
LIBOR Rate: for any Interest Period in effect under the Floating Notes,
the rate announced in The Wall Street Journal (Northeast Edition) as the London
Interbank Offered Rates (LIBOR) for a period of corresponding duration.
Lien: with respect to any Property, any mortgage, lien, pledge, charge,
security interest or encumbrance of any kind in respect of such Property. For
purposes of this Agreement, a Person shall be deemed to own, subject to a Lien,
any Property that it has acquired or holds subject to the interest of a vendor
or lessor under any conditional sale agreement, capital lease or other title
retention agreement (other than an operating lease) relating to such Property.
Make-Whole Premium: with respect to any Fixed Note (including any
Floating Note that becomes a Fixed Note pursuant to the Company's election to
fix the interest rate thereunder in accordance with Section 7.3), a premium
equal to the excess, if any, of (a) the Discounted Value of the Called
Principal of such Fixed Note over (b) such Called Principal. The Make-Whole
Premium shall in no event be less than zero.
Material Adverse Effect: a material adverse effect on the business,
operations, affairs, condition or properties of the Company or the ability of
the Company to perform its obligations hereunder or under the Collateral
Agreements.
Maturity Date: the stated date of maturity of a Note or such earlier
date upon which the maturity of the Note is accelerated pursuant to
Section 14.2.
Moody's: Xxxxx'x Investors Services, Inc.
Mortgaged Properties: the aggregate of all properties pledged, conveyed
and encumbered under or pursuant to the Security Documents.
Net Tangible Assets: total consolidated assets of the Company and its
Subsidiaries less Consolidated Intangible Assets of the Company and its
Subsidiaries determined in accordance with GAAP.
Note: collectively, any of the 2002 Notes and the Additional Notes, if
any.
Officers' Certificate: a certificate executed by the Chief Financial
Officer of the Company.
Old Notes: the meaning specified in the recitals.
Original Security Documents: the Texas Deed of Trust and Security
Agreement and the Assignment of Leases, each dated February 15, 1996, that were
executed and delivered by the Company pursuant to the Original Note Purchase
Agreement and the Texas Deed of Trust and Security Agreement and the Assignment
of Leases and Rents, each dated as of April 14, 1997, that were executed and
delivered by the Company pursuant to the 1997 Note Purchase Agreement, in each
case as amended.
PBGC: the Pension Benefit Guaranty Corporation or any Governmental
Authority succeeding to any of its functions.
Payment Date: the first day of each calendar month, but if such day is
not a Business Day, the first Business Day of such month.
Permitted Exceptions: those Liens permitted under the Security Documents
and this Agreement.
Permitted Investments: (a) direct obligations of the United States, or
of any agency thereof, or obligations guaranteed as to principal and interest
by the United States, or of any agency thereof, in either case maturing not
more than one year from the date of acquisition thereof; (b) direct obligations
issued by any state of the United States or any political subdivision of any
such state or any public instrumentality thereof maturing within one year from
the date of the acquisition thereof and, at the time of such acquisition,
having the highest rating obtainable from either S&P or Moody's;
(c) certificates of deposit and banker's acceptances issued by any bank or
trust company organized under the laws of the United States or any state
thereof and having capital, surplus and undivided profits of at least
$50,000,000, maturing not more than one year from the date of acquisition
thereof; (d) commercial paper rated A-1 or better or P-1 or better by S&P or
Moody's, respectively, maturing not more than six months from the date of
acquisition thereof; (e) Eurodollar time deposits having a maturity of less
than six months purchased directly from any such bank (whether such deposit is
with such bank or any other such bank); and (f) money market funds at least 95%
of the assets of which constitute Investments of the kinds described in clauses
(a) through (e) above. Notwithstanding the foregoing, the Company shall be
permitted to have collected balances with Pilgrim's Bank, Pittsburg, Texas, in
an amount not to exceed at any time 80% of such bank's capital base.
Person: a corporation, an association, a limited liability company, a
partnership, an organization, a business, an individual, a government or
political subdivision thereof or a governmental agency.
Pilgrim's Pride-Mexico: Avicola Pilgrim's Pride de Mexico S.A. de C.V.,
a Mexican corporation and a wholly owned Subsidiary of the Company, and its
Subsidiaries.
Plan: an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) that is or has been established or maintained, or to which contributions
are or have been made, by the Company or any of the Subsidiaries or any Related
Person with respect to any of them, or an employee pension benefit plan as to
which the Company or any of the Subsidiaries or any Related Person with respect
to any of them, would be treated as a contributory sponsor under Section 4069
of ERISA if it were to be terminated but excluding any such Plan that is
maintained outside of the United States primarily for the benefit of Persons
substantially all of whom are nonresident aliens.
Potential Event of Default: a default that, with notice or lapse of time
or both, becomes an Event of Default.
Premium: a LIBOR Premium or a Make-Whole Premium, as the case may be.
Property: any right or interest in or to property of any kind
whatsoever, whether real, personal (including, without limitation, cash) or
mixed and whether tangible or intangible.
Purchaser: Xxxx Xxxxxxx Life Insurance Company and its successors and
assigns.
Receipt of Exchanged Notes: the meaning specified in Section 4.1(d).
Reinvestment Yield: with respect to the Called Principal of any Fixed
Note, the yield to maturity implied by (a) the yields reported, as of
10:00 a.m. (New York City time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display
designated as "Page 678" on the Telerate Service (or such other display as may
replace Page 678 on the Telerate Service) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Life of such Called
Principal as of such Settlement Date, plus 100 basis points or (b) if such
yields shall not be reported as of such time or the yields reported as of such
time shall not be ascertainable, the Treasury Constant Maturity Series yields
reported, for the latest day for which such yields shall have been so reported
as of the Business Day next preceding the Settlement Date with respect to such
Called Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury securities
having a constant maturity equal to the Remaining Life of such Called Principal
as of such Settlement Date, plus 100 basis points. Such implied yield shall be
determined, if necessary, by (x) converting U.S. Treasury xxxx quotations to
bond-equivalent yields in accordance with accepted financial practice and
(y) interpolating linearly between reported yields.
Related Person: as to any Person, either (a) any corporation or trade or
business that is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as such Person, or (b) is under
common control (within the meaning of Section 414(c) of the Code) with such
Person, or (c) is a member of any affiliated service group (within the meaning
of Section 414(m) of the Code) that includes such Person, or (d) is otherwise
treated as part of the controlled group that includes such Person (within the
meaning of Section 414(o) of the Code).
Release: the meaning specified in Section 11.1.
Remaining Life: with respect to the Called Principal of any Fixed Note,
the number of years (calculated to the nearest one-twelfth year) that will
elapse between the Settlement Date with respect to such Called Principal and
the scheduled due date of such Remaining Scheduled Payment.
Remaining Scheduled Payments: with respect to the Called Principal of
any Fixed Note, all payments of such Called Principal and interest thereon that
would be due on or after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date.
Reportable Quantity: the meaning specified in Section 11.1.
Responsible Officer: the President, the Secretary, the Treasurer, the
Chief Executive Officer, the Chief Operating Officer or the Chief Financial
Officer of the Company.
S&P: Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx, Inc.
Schedule of Information for Payment and Notices: the meaning specified
in Article 13.
Securities Act: the Securities Act of 1933, as amended, or any similar
federal statute, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the time.
Security Documents: the Original Security Documents, the documents
delivered pursuant to clauses (i), (ii), and (iii) of Section 4.1(d) and any
other security agreements, mortgages, deeds of trust, leasehold mortgages or
deeds of trust, pledge agreements, leasehold assignment, and/or other documents
executed by the Company in favor of the Purchaser, to secure the Company's
performance of its obligations under the Notes and this Agreement with a lien
on the Collateral.
Settlement Date: with respect to the Called Principal of any Fixed Note,
the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or is declared to be immediately due and payable pursuant to
Article 14.
Special Counsel: Xxxxx Liddell & Xxxx LLP, as special counsel to
Purchaser in connection with this Agreement.
Subsidiary: any corporation or other entity of which more than fifty
percent (50%) of the outstanding voting shares are at the time owned (either
alone or through Subsidiaries or together with Subsidiaries) by the Company or
another Subsidiary.
2002 Notes: the meaning specified in Section 2.1.
Unfunded Current Liability: as to any Plan, the amount, if any, by which
the actuarial present value of the accumulated plan benefits under the Plan as
of the close of its most recent plan year, determined in accordance with
Statement of Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by the Plan's actuary in the most recent annual valuation of
the Plan, exceeds the fair market value of the assets allocable thereto,
determined in accordance with Section 412 of the Code.
Welfare Plan: an employee welfare benefit plan (as defined in
Section 3(1) of ERISA) or a group health plan (as defined in
Section 4980B(g)(2) of the Code) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any of the Subsidiaries or any Related Person with respect to any of them.
1.2. Miscellaneous. References herein to an "Exhibit" or "Schedule"
are, unless otherwise specified, to one of the exhibits or schedules attached
to this Agreement, and references herein to a "Section" are, unless otherwise
specified, to one of the Sections of this Agreement. As used in this
Agreement, the words "herein," "hereof," "hereby," and "hereunder" refer to
this Agreement as a whole and not to any particular Section or subdivision of
this Agreement. References herein to masculine or neuter are construed to
include masculine, feminine or neuter, where applicable, and references herein
to singular include plural and to plural include singular, where applicable.
ARTICLE 2.
THE NOTES
2.1. Authorization of 2002 Notes. The Company has authorized the issue
and sale of $60,960,846.08 aggregate principal amount of its 6.68% Fixed Notes
(together with all notes issued in substitution or exchange therefor pursuant
to Article 12, the "2002 Notes") pursuant to this Agreement in exchange for the
Old Notes. The 2002 Notes will bear interest on the unpaid principal balance
thereof from the date of such Notes as prescribed herein, payable as set forth
in Articles 7 and 8, will mature on August 30, 2012 and will be substantially
in the form of Exhibit A-1.
2.2. Sale and Purchase of 2002 Notes. The Company will issue and sell
to Purchaser and, subject to the terms and conditions hereof, at the Closing
provided for in Article 3, Purchaser will accept the 2002 Notes in exchange for
the Old Notes.
2.3. Sale and Purchase of Additional Notes.
(a) The Company may authorize the issue and sale from time to
time of up to an additional $50,000,000 of its notes ("Additional Notes"),
consisting of fixed rate notes (together with all notes issued in substitution
or exchange therefor pursuant to Article 12, the "Additional Fixed Notes") and
floating rate notes (together with all notes issued in substitution or exchange
therefor pursuant to Article 12, the "Additional Floating Notes") pursuant to
this Agreement. Each Additional Note will be in the amount of $5,000,000 (or
at Purchaser's option, such smaller denominations that in the aggregate equal
$5,000,000), will bear interest on the unpaid principal balance thereof from
the date of the Additional Note as prescribed herein, payable as set forth in
Articles 7 and 8, will mature on a date which is ten (10) years from the date
of issuance and sale and will be substantially in the form of Exhibit A-1 (in
the case of Additional Fixed Notes) or Exhibit A-2 (in the case of Additional
Floating Notes).
(b) The Company shall give Purchaser not less than ten (10)
Business Days prior written notice of its intent to issue and sell to Purchaser
an Additional Note, which at the Company's option may be either an Additional
Fixed Note or an Additional Floating Note, the issuance and sale of which shall
be subject to the conditions set forth in Section 4.2. Subject to the
satisfaction of the conditions set forth in Section 4.2, Purchaser agrees to
purchase the Additional Notes authorized by the Company under this Section 2.3.
No Additional Note may be issued and sold after August 30, 2005.
ARTICLE 3.
CLOSING
The closing of the sale of the 2002 Notes to Purchaser (the "Closing")
shall take place at the offices of Xxxxx Liddell & Xxxx LLP, 0000 Xxxx Xxxxxx,
Xxxxx 0000, Xxxxxx, Xxxxx 00000, at 10:00 a.m. Dallas, Texas time on such date
as the parties may mutually agree (the "Closing Date"). At the Closing, the
Company will deliver to Purchaser the 2002 Notes in the form of a single Note
or Notes as prescribed by Purchaser, dated the Closing Date and registered in
Purchaser's name (or the name of its nominee), against delivery by Purchaser to
the Company of the Old Notes.
ARTICLE 4.
CONDITIONS TO CLOSING
4.1. Conditions to Purchase of 2002 Notes. Purchaser's obligation to
accept the 2002 Notes in exchange for the Old Notes is subject to the
fulfillment to Purchaser's satisfaction, at or prior to the Closing, of the
following conditions:
(a) Opinion of Counsel. Purchaser shall have received an
opinion, dated the Closing Date and satisfactory in form and substance to
Purchaser, from Xxxxx & XxXxxxxx, counsel for the Company, in the form of
Exhibit B-1.
(b) Representations, Warranties and Covenants. The
representations and warranties of the Company contained in this Agreement shall
be true and correct at the time of Closing as if made at and as of such time,
and the Company shall have complied with all agreements and covenants hereunder
required to be performed by the Company on or prior to the time of Closing.
(c) Notes. The 2002 Notes (with appropriate insertions) to be
issued to and accepted by Purchaser, shall have been duly executed by the
Company and delivered to Purchaser and shall be in full force and effect and no
term or condition thereof shall have been amended, modified or waived, except
with the prior written consent of Purchaser and the Company.
(d) Collateral Agreements.
(i) Modifications and Extensions of Deed of Trust and Assignment
of Leases and Rents in form and substance satisfactory to Purchaser shall have
been duly executed and delivered by the Company for the benefit of Purchaser
and the registered holders from time to time of the Notes and shall be in full
force and effect.
(ii) A Texas Deed of Trust and Security Agreement in form and
substance satisfactory to Purchaser shall have been executed and delivered by
the Company for the benefit of Purchaser and the registered holders of the
Notes and shall be in full force and effect.
(iii) UCC Financing Statements and amendments shall have been
authorized by the Company for filing.
(iv) A Receipt of Exchanged Notes, substantially in the form of
Exhibit C (the "Receipt of Exchanged Notes"), shall have been duly executed and
delivered by the Company and shall be in full force and effect.
(v) A certificate, substantially in the form of Exhibit D (the
"Certificate"), shall have been duly executed and delivered by the Company and
shall be in full force and effect.
(e) Recordings, Filings and Priority. Except as waived in
writing by Purchaser, all recordings and filings of or with respect to the
Security Documents and the Financing Statements shall have been duly made and
all other instruments relating thereto shall have been duly executed, delivered
and recorded or filed, in all such places as may be required by law, or as may
be deemed necessary or desirable by Special Counsel, in order to establish,
protect and perfect as of the Closing Date the interests and rights (and the
priority thereof) created or intended to be created thereby. The Lien of the
Security Documents and Financing Statements shall constitute a first Lien of
record on and a first security interest of record in the Mortgaged Properties,
subject only to the Permitted Exceptions.
(f) Title Insurance. Purchaser shall have received title policy
endorsements to its existing mortgagee policies of title insurance issued by
Lawyers Title Insurance Corporation and Xxxxxxx Title Guaranty Company. Such
endorsements shall be subject only to the same exceptions to title as now are
specified in such policies and any additional conditions or exceptions to title
as may be acceptable to Purchaser.
(g) Compliance with Securities Laws. The offering and sale of
the 2002 Notes to be issued at the Closing shall have complied with all
applicable requirements of federal and state securities laws.
(h) Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated hereby and all
documents and instruments incident to such transactions shall be reasonably
satisfactory to Purchaser and Special Counsel, and Purchaser and Special
Counsel shall have received an original executed counterpart of this Agreement,
and all such other counterpart originals or certified or other copies of such
documents as Purchaser or Special Counsel may reasonably request.
(i) No Event of Default or Potential Event of Default. There
shall not exist and, upon consummation of the transactions contemplated hereby,
there shall not exist any Event of Default or Potential Event of Default.
(j) Payment of Closing Fees. The Company shall have paid the
reasonable fees, expenses and disbursements of Special Counsel and special
local counsel that are reflected in statements of such counsel rendered prior
to or on the Closing Date, without limitation on the Company's obligation to
pay any additional fees and disbursements of all such counsel pursuant to
Article 15.
(k) Loan to Appraised Values. Upon consummation of the
transactions contemplated at the Closing, the ratio of the aggregate principal
amount of the then outstanding Notes (including any Additional Notes to be
issued at the Closing) to Appraised Value shall not be greater than seventy-
five percent (75%).
(l) Insurance. Purchaser shall have received certificates
reasonably satisfactory to Purchaser as to, or copies of, all insurance
policies required by the Security Documents.
(m) Due Diligence. The results of any due diligence review of
the Company and the Subsidiaries and their respective Properties, businesses,
operations, affairs, results of operations, financial condition and prospects
and the proposed organizational, legal and tax aspects of the proposed
transactions, performed by or on behalf of Purchaser shall be reasonably
satisfactory to Purchaser and Special Counsel.
4.2. Conditions to Purchase of Additional Notes. Purchaser's obligation
to purchase each Additional Note is subject to the fulfillment to Purchaser's
satisfaction prior to each such purchase of an Additional Note, of the
following conditions:
(a) Representations, Warranties and Covenants. The
representations and warranties of the Company contained in this Agreement shall
be true and correct at the time of the purchase of each Additional Note, as if
made at and as of such time, and the Company shall have complied with all
agreements and covenants hereunder required to be performed at or prior to the
purchase of such Additional Note.
(b) Notes. The Additional Note, in the form and substance of
Exhibit A-1 (in the case of an Additional Fixed Note) or Exhibit A-2 (in the
case of an Additional Floating Note) (with appropriate insertions) to be issued
to and accepted by Purchaser, shall have been duly executed and delivered to
Purchaser by the Company and shall be in full force and effect and no term or
condition thereof shall have been amended, modified or waived, except with the
prior written consent of Purchaser and the Company.
(c) Opinion of Counsel. Purchaser shall have received an
opinion, dated the date of issuance of the Additional Note and satisfactory in
form and substance to Purchaser, from counsel for the Company, substantially
in the form of Exhibit B-2.
(d) Compliance with Securities Laws. The offering and sale of
each Additional Note to be issued shall have complied with all applicable
requirements of federal and state securities laws.
(e) No Event of Default or Potential Event of Default. There
shall not exist and, upon consummation of the transactions contemplated hereby,
there shall not exist any Event of Default or Potential Event of Default.
(f) No Material Adverse Effect. There shall not have been any
Material Adverse Effect on the Company since September 30, 2001, which Material
Adverse Effect is continuing.
(g) Loan to Appraised Value. Upon consummation of any purchase
of an Additional Note, the ratio of the aggregate principal amount of the then
outstanding Notes (including any Additional Notes to be issued pursuant
thereto) to Appraised Value immediately prior to the consummation of any such
transaction shall not be greater than seventy-five percent (75%). In the event
the Company desires or is required to pledge additional assets or property as
security for its obligations under this Agreement and the Collateral
Agreements, the appraised value of such assets or property shall be included
within the Appraised Value in calculating the Loan to Appraised Value ratio
pursuant to this Section 4.2(g), and Company shall execute (where required) and
cause to be delivered to Purchaser such closing documents, as Purchaser may
require, as set forth in Exhibit F.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES RELATING TO THE COMPANY
The Company represents and warrants to Purchaser as follows:
5.1. Organization, Standing, etc. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has all requisite power and authority (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 this Agreement, the Security Documents and each of
the other Collateral Agreements, (d) to issue and sell the Notes, and (e) to
carry out the terms of this Agreement, the Notes, the Security Documents and
each of the other Collateral Agreements. This Agreement, the 2002 Notes, the
Security Documents and the other Collateral Agreements (i) have been, and the
Additional Notes upon issuance thereof will be, duly authorized by all
necessary corporate action on the part of the Company, and duly executed and
delivered and (ii) are, and the Additional Notes upon issuance thereof will be,
valid and binding agreements of the Company, enforceable in accordance with
their terms, except as enforceability may be subject to and limited by
applicable principles of equity and by bankruptcy, reorganization, moratorium,
insolvency or other similar laws from time-to-time in effect affecting the
enforcement of creditors' rights generally.
5.2. Qualification. The Company is duly qualified and in good standing
as a foreign corporation authorized to do business in each jurisdiction in
which the nature of its activities or the character of the properties it owns
or leases makes such qualification necessary, other than those jurisdictions
where the failure to qualify would not have a Material Adverse Effect.
5.3. Business and Financial Statements. The Company has delivered to
Purchaser true, complete and correct copies of the Company's audited
consolidated financial statements for the Fiscal Year ended September 30, 2001,
and the unaudited financial statements for the nine months ended June 29, 2002
(collectively, the "Financial Statements"). The Financial Statements have been
prepared in accordance with GAAP (except that the unaudited financial
statements contain no footnotes) applied on a consistent basis throughout the
periods specified and present fairly in all material respects the historical
financial positions of the Company as of the respective dates and for the
respective periods specified.
5.4. Adverse Changes. There has been no Material Adverse Effect on the
Company since September 30, 2001 that is continuing.
5.5. Tax Returns and Payments. The Company is a corporation subject to
United States federal income taxation. The Company has timely and accurately
filed all tax returns required by law to be filed by it and has paid all taxes,
assessments and other governmental charges levied upon it or any of its
properties, assets, income or franchises that are due and payable, other than
those presently being contested in good faith by appropriate proceedings
diligently conducted for which such reserves and other appropriate provision as
are required by GAAP have been made or where the failure to make such filing or
payment could not reasonably be expected to result in a Material Adverse
Effect. As of the Closing Date, there are no material tax Liens upon any of
the assets of the Company except for statutory liens in respect of taxes or
assessments the payment of which is not yet delinquent. If the Company is
contesting any such tax or assessment in accordance with this Section 5.5, the
Company has disclosed to Purchaser, in writing, the nature and extent of such
contest.
5.6. Debt. Other than the Notes and the indebtedness disclosed in the
Financial Statements or as listed on Schedule 5.6, the Company has no secured
or unsecured Debt outstanding as of the Closing Date. Other than as provided
in this Agreement and the Collateral Agreements, or in the instruments and
agreements listed on Schedule 5.6 (as such schedule may be updated from time to
time), no instrument or agreement applicable to or binding on the Company
contains any restrictions on the incurrence by the Company of any Debt.
5.7. Title to Properties and Assets; Liens. The Company has good and
marketable fee title to all the real property purported to be owned by it and
good and marketable title to all other property and assets purported to be
owned by it, free and clear of all Liens, except for Liens and other matters
that constitute Permitted Exceptions. At the time of the Closing and upon
giving effect to the transactions contemplated hereby, and except for the
Permitted Exceptions, (a) no currently effective financing statement under the
Uniform Commercial Code that names the Company as debtor or lessee will be on
file in any jurisdiction in which the Company owns or leases real or personal
property or in which the inventory of the Company is located or in any other
jurisdiction, (b) neither the Company nor any Subsidiary has signed any
currently effective financing statement or any currently effective security
agreement authorizing any secured party thereunder to file any such financing
statement, except (i) as required to perfect the Liens created by the
Collateral Agreements, (ii) as listed on Schedule 5.7, or (iii) as evidenced by
any Permitted Exception, and (c) the personal property comprising any portion
of the Mortgaged Properties is free and clear of any and all purchase money
security interests and other Liens.
5.8. Litigation. Except as set forth on Schedule 5.8, there is no
action, proceeding or investigation pending or, to the best knowledge of the
Company, threatened (or any basis therefor known to the Company) against the
Company or any of its Subsidiaries or any of their respective Properties which
is not adequately covered by insurance, which could reasonably be expected to
have a Material Adverse Effect.
5.9. Compliance with Collateral Agreements. The Company has performed
and complied in all material respects with every term, covenant, condition and
provision of the Collateral Agreements to be performed or complied with by the
Company on or prior to the date hereof, every representation or warranty of the
Company contained in the Collateral Agreements is true and correct in all
material respects on and as of the date hereof, and no default or Event of
Default (as any such term may be defined in the Collateral Agreements) has
occurred and is continuing (without regard to any applicable cure period) under
the Collateral Agreements.
5.10. Compliance with Other Instruments. The Company (a) is not in
violation of any term of any agreement or instrument to which it is a party or
by which it is bound, or of any applicable law, ordinance, rule or regulation
of any Governmental Authority, or of any applicable order, judgment or decree
of any court, arbitrator or Governmental Authority (including, without
limitation, any such law, ordinance, rule, regulation, order, judgment or
decree relating to environmental protection or pollution control, occupational
health and safety standards and controls, consumer protection or equal
employment practice requirements), the consequence of any of which violations
would, with reasonable probability, result in a Material Adverse Effect; and
(b) is not in violation of any term of its Certificate of Incorporation or
Bylaws. Neither the execution, delivery and performance of this Agreement, any
Collateral Agreement, or the Notes nor the consummation of the transactions
contemplated hereby or thereby will result in any violation of or be in
conflict with or constitute a default under any such term or result in the
creation of (or impose any obligation on the Company to create) any Lien upon
any of the properties of the Company pursuant to any such term. There are no
such terms in the aforementioned documents that, either in any individual case
or in the aggregate, materially and adversely affect the business, operations,
affairs, condition or properties of the Company, including the Mortgaged
Properties.
5.11. Governmental Consents. Other than those that have been duly
obtained and are in full force and effect (copies of which have been delivered
to Purchaser or Special Counsel) and any filings contemplated by the Security
Documents and the Financing Statements (which filings will be made promptly
after Closing), no consent, approval or authorization of, or declaration or
filing with, any Governmental Authority on the part of the Company is currently
required for the valid execution and delivery of this Agreement or any
Collateral Agreement, or the consummation of the transactions contemplated
hereby or thereby, or the valid offer, issue, sale and delivery of the Notes
pursuant to this Agreement.
5.12. Permits and Licenses. Except for any failure to obtain or recover
permits and licenses that could not reasonably be expected to have a Material
Adverse Effect, the Company has all permits and licenses necessary for the
operation of its business as presently conducted.
5.13. Status Under Certain Federal Statutes. Neither the Company nor any
Subsidiary is subject to regulation under the Investment Company Act of 1940,
as amended, the Public Utility Holding Company Act of 1935, as amended, the
Interstate Commerce Act, as amended, or the Federal Power Act, as amended.
5.14. Use of Proceeds; Margin Regulations. The Company will apply the
proceeds of the sale of Additional Notes for general corporate purposes. No
part of the proceeds from the sale of the Notes hereunder will be used,
directly or indirectly, for the purpose of buying or carrying any margin stock
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System (12 CFR 221), or for the purpose of buying or carrying or
trading in any securities under such circumstances as to involve the Company in
a violation of Regulation X of said Board (12 CFR 224) or to involve any broker
or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin
stock does not constitute more than 10% of the value of the consolidated assets
of the Company and its Subsidiaries and the Company does not have any present
intention that margin stock will constitute more than 10% of the value of such
assets. As used in this Section, the terms "margin stock" and "purpose of
buying or carrying" shall have the meanings assigned to them in said Regulation
U.
5.15. Compliance with ERISA.
(a) As of the Closing Date, each Plan that is or has been
maintained for employees of the Company or any of the Subsidiaries, or any
Related Person with respect to any of them, or to which the Company or any of
the Subsidiaries, or any Related Person with respect to any of them, has made
or was required to make contributions has been administered in material
compliance with its terms and all applicable statutes (including but not
limited to ERISA and the Code, and all regulations and interpretations
thereunder). No reportable event (as defined in Section 4043 of ERISA and
regulations issued thereunder) has occurred with respect to any Plan that is a
defined benefit plan (as defined in Section 3(35) of ERISA and regulations
issued thereunder) and subject to Title IV of ERISA ("Title IV Plan"). As of
the Closing Date, no material liability to the PBGC has been incurred, or is
expected to be incurred, by the Company or any of the Subsidiaries or any
Related Person with respect to any Title IV Plan. The PBGC has not instituted
any proceedings, and there exists no event or condition that would constitute
grounds for institution of proceedings, against the Company, the Subsidiaries
or any Related Person by the PBGC to terminate any Title IV Plan under
Section 4042 of ERISA. No case, matter or action with respect to any Plan,
pursuant to any federal or state law, is pending or, to the Company's
knowledge, is threatened, against the Company or any of the Subsidiaries or any
Related Person with respect to any of them, or any officer, director or
employee of any of them, or any fiduciary of any Plan which could reasonably be
expected to result in a Material Adverse Effect.
(b) No Title IV Plan had an accumulated funding deficiency (as
such term is defined in Section 302 of ERISA and regulations issued thereunder)
as of the last day of the most recent plan year of such Plan ended prior to the
date hereof. All contributions payable to each qualified Plan of the Company
or any of the Subsidiaries (that is an employee pension benefit plan as defined
in Section 3(2) of ERISA and regulations issued thereunder and that is intended
to meet the qualification requirements of the Code ("Qualified Plan")), for all
benefits earned or other liabilities accrued through the end of the latest plan
year for such Qualified Plan, determined in accordance with the terms and
conditions of such Qualified Plan, ERISA and the Code, have been paid or
otherwise provided for, and to the extent unpaid are reflected in the pro forma
consolidated balance sheet of the Company. No waiver of the minimum funding
standard requirements of Section 302 of ERISA and Section 412 of the Code has
been obtained, applied for or is contemplated with respect to any Title IV
Plan.
(c) Except as disclosed to Purchaser in writing, none of the
Company or any of the Subsidiaries nor any Related Person with respect to any
of them, is or has been a contributor to any multi-employer plan within the
meaning of Section 3(37) of ERISA and regulations issued thereunder.
(d) The execution and delivery of this Agreement and the
Collateral Agreements, the issue of the Notes hereunder and the consummation of
the transactions contemplated hereby will not involve any transaction that is
subject to the prohibitions of Section 406 of ERISA or in connection with which
a tax would be imposed pursuant to Section 4975 of the Code.
(e) No Lien imposed under Section 412(n) of the Code exists in
favor of any Plan upon any property belonging to the Company or any of the
Subsidiaries, or any Related Person of any of them.
5.16. Disclosure. Neither this Agreement, the Financial Statements nor
any other document, certificate or instrument delivered to Purchaser by or on
behalf of the Company in connection with the transactions contemplated hereby,
when all such documents, certificates and instruments are taken as a whole,
contains any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein not
misleading. There is no fact actually known to the Company that could
reasonably be expected to have a Material Adverse Effect that 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.
5.17. Solvency of the Company. The fair saleable value of the business
and assets of the Company, upon giving effect to the transactions contemplated
hereby, will be in excess of the amount that will be required to pay the
probable liabilities of the Company (including contingent, subordinated,
unmatured and unliquidated liabilities) on existing debts as they may become
absolute and matured. The Company, upon giving effect to the transactions
contemplated hereby, will not be engaged in any business or transaction, or
about to engage in any business or transaction, for which the Company has an
unreasonably small capital, and the Company has no intent (a) to hinder, delay
or defraud any entity to which it is, or will become, on or after the Closing
Date, indebted, or (b) to incur debts that would be beyond its ability to pay
as they mature.
5.18. Environmental Matters. The Company has been complying with, and is
in compliance with, all Environmental Laws in each jurisdiction where it is
presently doing business except for failures to comply which would not have a
Material Adverse Effect. As of the Closing Date, to the best knowledge of the
Company, none of the Mortgaged Properties is impacted by Hazardous Substances
in any respect that would require investigation, reporting, monitoring, cleanup
or other response under any Environmental Law.
5.19. Brokers. The Company represents that it has not dealt with any
brokers or finders in connection with the transactions contemplated by this
Agreement.
5.20. No Defaults. At the time of the Closing, there exists no Event of
Default or Potential Event of Default.
5.21. Offer of Notes. Neither 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 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 that would subject the issuance and sale of
the Notes to the provisions of Section 5 of the Securities Act, 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.
ARTICLE 6.
REPRESENTATIONS AND WARRANTIES RELATING
TO SECURITY FOR THE NOTES
The Company represents and warrants to Purchaser as follows:
6.1. Easements and Utility Services. The Company has all easements and
other rights, including those for use, maintenance, repair and replacement of
and access to structures, facilities or space for support, mechanical systems,
roads, utilities (including electricity, gas, water, sewer disposal, telephone
and CATV) and any other private or municipal improvements, services and
facilities necessary or appropriate to the proper operation, repair,
maintenance, occupancy or use of the Mortgaged Properties as currently being
and proposed to be used.
6.2. Contracts. There are no service (other than utility) or
construction contracts currently outstanding relating to any part of the
Mortgaged Properties providing for payment in excess of $500,000 per year, per
contract (but not in excess of $5,000,000 in the aggregate), except those
contracts that have been delivered to Purchaser. As of the Closing Date, no
labor or materials have been supplied to the Mortgaged Properties, other than
in the ordinary course of business, that have not been fully paid for.
6.3. Permits. There are no permits, licenses, certificates or approvals
that are required to occupy or operate (except as specified in Section 5.12)
any part of the Mortgaged Properties as presently operated, except those
permits, licenses, certificates and approvals that have been delivered to
Purchaser.
6.4. Reports of Engineers. The Company does not possess and is not
aware of any reports of engineers, architects or other Persons relating to any
part of the Mortgaged Properties, except those reports that have been delivered
to Purchaser.
6.5. Plans and Specifications. The Company does not possess and is not
aware of any plans and specifications relating to any part of the Mortgaged
Properties, except those plans and specifications that have been delivered to
Purchaser.
6.6. Soil Reports. There are no soil reports in the possession of the
Company or its Affiliates relating to any part of the Mortgaged Properties
except as delivered to Purchaser.
6.7. Zoning. The Mortgaged Properties that constitute real property are
zoned in the manner that permits the use of the Mortgaged Properties as
currently being and proposed to be used by the Company and its Subsidiaries.
6.8. Certificates of Occupancy. A certificate of occupancy or similar
permit has been issued by the appropriate Governmental Authority for each of
the Mortgaged Properties that constitutes improvements to real property that
permits the occupancy of the Mortgaged Properties as currently occupied by the
Company.
6.9. Compliance with Laws. Each Mortgaged Property, and the current
activities at each Mortgaged Property, comply in all material respects with
applicable laws, ordinances, rules and regulations of any Governmental
Authority and any applicable order, judgment or decree of any court, arbitrator
or Governmental Authority.
ARTICLE 7.
INTEREST RATE PROVISIONS
7.1. Interest on Fixed Notes.
(a) Interest on the outstanding principal balance of the 2002
Notes shall accrue at the lesser of (i) 6.68% per annum or (ii) the Highest
Lawful Rate, and shall be due and payable in accordance with Section 8.1.
(b) In the event the Company elects to issue an Additional Fixed
Note pursuant to Section 2.3, not more than forty-five (45) nor less than five
(5) days prior to the issuance of such Additional Fixed Note, the Company shall
give written notice thereof to Purchaser, at which point the parties shall
determine the interest rate applicable to such Additional Fixed Note based on
the interest rates then quoted by Purchaser as provided in Section 7.4.
Interest on the outstanding principal balance of such Additional Fixed Note
shall accrue at the lesser of (i) the rate as so determined or (ii) the Highest
Lawful Rate, and shall be due and payable in accordance with Section 8.1.
(c) Interest on the unpaid principal of the Fixed Notes shall be
calculated on the basis of the actual days elapsed in a year consisting of 360
days.
7.2. Interest on Floating Notes.
(a) Interest on the outstanding principal balance of the Floating
Notes shall accrue at an interest rate per annum during the applicable Interest
Period equal to the lesser of (i) the LIBOR Rate plus the interest rate spread
as provided in Section 7.4 or (ii) the Highest Lawful Rate. Interest on the
Floating Notes accrued during a calendar month shall be due and payable in
accordance with Section 8.1. Interest on the unpaid principal of the Floating
Notes shall be calculated on the basis of the actual days elapsed in a year
consisting of 360 days.
(b) Not more than ten (10) days nor less than five (5) days prior
to Closing and during each Interest Rate Set Window, the Company shall notify
Purchaser of its selection of the duration of the immediately following
Interest Period with respect to the Floating Notes then outstanding, which may
be three (3) months, six (6) months or one year (the "Interest Option Notice").
The duration of the Interest Period selected shall be the same for all Floating
Notes with the same date of issuance. The Interest Option Notice must be in
writing and must be sent via telecopy, with the originally executed copy
delivered to Purchaser immediately thereafter. The LIBOR Rate for the
following Interest Period shall be the applicable rate for a period of
corresponding duration announced in The Wall Street Journal (Northeast Edition)
on the first Business Day following receipt of the Interest Option Notice.
(c) In connection with determining the applicable LIBOR Rate for
the following Interest Period, Purchaser shall calculate the principal and
interest payments due on the Floating Notes during such Interest Period, as
required under Section 8.1(b), and shall provide such amount to the Company.
7.3. Interest Rate Lock. With respect to the Floating Notes, during any
Interest Rate Set Window, the Company shall have the option to permanently set
the interest rate on the Floating Notes. The Company shall provide notice to
Purchaser of its desire to set the rate and Purchaser shall promptly thereafter
notify the Company of the then prevailing fixed interest rates (based on
Purchaser's interest rate spreads and the average remaining life of the
Floating Notes) (the "Fixed Rate"). If the Company elects to have the Floating
Notes accrue interest at the Fixed Rate, the Company shall so notify Purchaser
in the Interest Option Notice (which election shall be irrevocable) and
immediately following the then current Interest Period, the Floating Notes
shall thereafter accrue interest at the Fixed Rate, and the Floating Notes
shall for all purposes be deemed Fixed Notes. Any such election shall be with
respect to any or all of the then outstanding Floating Notes and shall be made
in full and not in part. Purchaser shall recompute the principal and interest
payments required under Section 8.1(b) based on the outstanding principal
balance on the Floating Notes and the Fixed Rate, and the Company shall
thereafter make principal and interest payments on such Notes equal to such
amount.
7.4. Setting of Interest Rates on Additional Notes. During the period
of time not more than thirty (30) days nor less than five (5) days prior to the
proposed issuance by the Company of any Additional Note(s), Purchaser shall set
the interest rate on any Additional Fixed Note and the interest rate spread on
any Additional Floating Note proposed to be issued. Purchaser shall consider
its then-current interest rate spreads (based on average remaining life of such
Additional Notes), the then-current financial condition of the Company and
then-current market conditions when establishing the rates and interest rate
spreads. The Company shall have no obligation to issue and sell any Additional
Notes if it is not satisfied with the rate or interest rate spreads established
by Purchaser. If the parties agree upon new rates, they shall promptly execute
an amendment to this Agreement and the Company shall execute and deliver to
Purchasers new notes reflecting the new rates.
7.5. Past Due Payments. All payments of principal and, to the extent
permitted by law, the applicable Premium (if any) and interest on or in respect
of any Note or this Agreement that are not made when due shall bear interest at
the Default Rate from the date due and payable to the date paid. Any payment
in respect of any other obligation or amount payable hereunder that is not paid
when due shall bear interest at the Default Rate for the 2002 Notes from the
date due and payable to the date paid.
ARTICLE 8.
PAYMENT OF NOTES
8.1. Required Payments of Notes.
(a) On each Payment Date while the 2002 Notes are outstanding,
the Company shall make a payment on the 2002 Notes, in cash, in an aggregate
amount equal to $537,085.21, which payment shall consist of principal and
accrued interest. Each payment shall be allocated pro rata among the 2002
Notes then outstanding.
(b) Upon the issuance of any Additional Floating Notes, Company
shall pay equal monthly payments of principal, plus interest accrued thereon,
on each Payment Date based on a fifteen (15) year amortization. With respect
to the issuance of each Additional Fixed Note, Purchaser shall compute the
equal monthly combined principal and interest payment for each such Fixed Note
based on a fifteen (15) year amortization. On each Payment Date following the
issuance of such Additional Note, the Company shall make a payment on such
Additional Note, in cash, in an amount equal to the payment calculated by
Purchaser in accordance with this Agreement for such Additional Note, which
shall consist of principal and accrued interest.
(c) If at any time the outstanding principal balance of the
remaining Notes exceeds seventy-five percent (75%) of the Appraised Value, the
Company shall immediately make a prepayment of principal of the Notes (together
with accrued interest thereon) in an amount such that following the prepayment,
the outstanding principal balance is less than or equal to seventy-five percent
(75%) of the Appraised Value. The prepayment shall be applied pro rata among
all of the Notes at the time outstanding.
(d) No partial prepayment of the Notes pursuant to Section 8.2
shall relieve the Company from its obligation to make the payments required
under this Section 8.1, except to the extent that the outstanding principal
balance of the Notes is less than the amount of the scheduled payment otherwise
due under this Section 8.1.
8.2. Optional Prepayments of Notes; Allocations.
(a) At any time or from time to time, the Company is hereby
granted the right, at its option, upon notice as provided in Section 8.3, to
prepay all or any part (in a minimum amount of $1,000,000 and in integral
multiples of $100,000 or the entire outstanding balance, if less) of the Fixed
Notes, which prepayment shall be applied pro rata among all of the Fixed Notes
at the time outstanding and shall be applied to the outstanding principal
amount thereof in the inverse order of maturity.
(b) From time to time from and after the date that is five (5)
years following the date of issuance of any Floating Note, the Company shall
have the right, at its option, upon notice as provided in Section 8.3, to
prepay all or any part (in a minimum amount of $1,000,000 and in integral
multiples of $100,000 or the entire outstanding balance, if less) of such
Floating Notes, which prepayment shall be applied to the outstanding principal
amount in the inverse order of maturity. Notwithstanding the foregoing, from
time to time from and after the date of issuance of any Floating Note until the
date that is five (5) years following the date of issuance of such Floating
Note, the Company shall have the right, at its option, upon notice as provided
in Section 8.3, to prepay, without Premium, up to ten percent (10%) of the
original principal balance of such Floating Note during each of the first five
(5) years following the date of issuance of such Floating Note; provided,
however, that the source of the funds used by the Company to make any such
prepayment shall be Consolidated Free Cash Flow generated from the Company's
normal and usual business operations or from contributions made to the capital
of the Company and shall exclude any funds generated by the Company through the
refinancing of any Debt or any sale, transfer, lease or other disposition of
any assets.
(c) Each such prepayment shall include the principal amount of
the Notes so prepaid, plus interest accrued thereon to the date of payment,
plus the Premium described in Section 8.2(d) (based on such principal amount so
prepaid). In the case of each partial prepayment of the Notes, the principal
amount of the Notes to be prepaid shall be allocated among all of the Notes at
the time outstanding (to the extent such Note may be prepaid) in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof not
theretofore called for prepayment, rounded upward to the nearest $1,000 for
each Note, with adjustments to the extent practicable, to compensate for any
prior prepayments not made exactly in such proportion.
(d) Any prepayment of the Fixed Notes shall be subject to and
include the Make-Whole Premium. Any prepayment of the Floating Notes shall be
subject to and include the LIBOR Premium. Notwithstanding the foregoing, no
Premium shall be due if (i) any of the Floating Notes are prepaid pursuant to
the provisions of the last sentence of Section 8.2(b), (ii) any of the Notes
are prepaid pursuant to Section 8.1(c) or (iii) any of the Notes are prepaid
with insurance proceeds or proceeds of any condemnation award in accordance
with the terms of the Security Documents.
8.3. Notice of Prepayments; Officers' Certificate. The Company will
give each registered holder of any Note written notice of each prepayment of
the Notes under Section 8.2 not less than thirty (30) days and not more than
sixty (60) days prior to the date fixed for such prepayment, which notice shall
be irrevocable. Each such notice and each such prepayment shall be accompanied
by an Officers' Certificate (a) stating the principal amount and serial number
of each Note to be prepaid and the principal amount thereof to be prepaid; (b)
stating the proposed date of prepayment; (c) stating the accrued interest on
each such Note to such date to be paid in accordance with Section 8.4; and (d)
estimating the applicable Premium required under Section 8.2 (calculated as of
the date of such prepayment and proffered solely as an estimate of the Premium
due upon prepayment) and setting forth the method of determination and
calculations used in computing such Premium, accompanied by a copy of the
Statistical Release H.15(519) (or other source of market data) used in
determining the United States Treasury Yield.
8.4. Maturity; Surrender. In the case of each prepayment of the Notes,
the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the Premium payable, if any. From
and after such date, unless the Company shall fail to pay such principal amount
when so due and payable, together with the interest and Premium, if any, as
aforesaid, interest on such principal amount shall cease to accrue. Any Note
paid or prepaid in full shall be surrendered to the Company and canceled and
shall not be reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
ARTICLE 9.
ACCOUNTING, REPORTING AND INSPECTION COVENANTS
OF THE COMPANY
From the date hereof through the Closing and thereafter so long as any
Note shall be outstanding, the Company will perform and comply with each of the
following covenants:
9.1. Accounting. The Company will maintain a system of accounting
established and administered in accordance with GAAP and will accrue all such
liabilities as shall be required by GAAP.
9.2. Financial Statements and Other Information. The Company will
deliver (in duplicate) to Purchaser (except as hereinafter provided) so long as
Purchaser or Purchaser's nominee shall hold any Note, and to each other
registered holder of a Note:
(a) within ninety (90) days after the end of each Fiscal Year,
the balance sheet of the Company as of the end of such Fiscal Year and the
related statements of income and retained earnings and of cash flows of the
Company for such Fiscal Year, setting forth in each case in comparative form
the figures for the previous Fiscal Year, all in reasonable detail and
(i) accompanied by the report thereon of any independent public accountants of
recognized national standing selected by the Company, which report shall state
that (x) such financial statements present fairly in all material respects, the
financial position of the Company as of the dates indicated and the results of
its operations and cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as otherwise specified
in the report), and (y) the audit by such accountants in connection with such
financial statements has been made in accordance with generally accepted
accounting principles, and (ii) certified by the Chief Financial Officer of the
Company as presenting fairly in all material respects, in accordance with GAAP,
applied (except as specifically set forth therein) on a basis consistent with
such prior fiscal periods, the information contained therein;
(b) within forty-five (45) days after the end of each of the
first three fiscal quarters of each Fiscal Year, the balance sheet of the
Company as of the end of such fiscal quarter and the related statements of
income and of cash flows of the Company for such fiscal quarter and for the
portion of the Fiscal Year from the first day of such Fiscal Year through the
end of such fiscal quarter, setting forth in each case in comparative form the
figures for the corresponding periods in the previous Fiscal Year, all in
reasonable detail and certified by the Chief Financial Officer of the Company
as presenting fairly, in accordance with GAAP, applied (except as specifically
set forth therein) on a basis consistent with such prior fiscal periods, the
information contained therein;
(c) together with each delivery of financial statements pursuant
to subsections (a) or (b) above, an officer's certificate in the form of
Exhibit E (i) showing in detail the determination of the ratios and other
financial calculations specified in Sections 10.1 through 10.6 during the
accounting period covered by such financial statements, (ii) stating that the
signer has reviewed the terms hereof and of the Notes and has made, or caused
to be made under his supervision, a review of the transactions and condition of
the Company during the accounting period covered by such financial statements
and that such review has not disclosed the existence during or at the end of
such accounting period, and that the signer does not have knowledge of the
existence as of the date of such officer's certificate, of any condition or
event that constitutes an Event of Default or Potential Event of Default, or,
if any such condition or event existed or exists, specifying the nature and
period of existence thereof and what action the Company has taken or is taking
or proposes to take with respect thereto; and (iii) if not specified in the
related financial statements being delivered pursuant to subsection (a) above,
specifying the aggregate amount of interest and rentals received or accrued by
the Company, and the aggregate amount of depreciation, depletion and
amortization charged on the books of the Company during the accounting period
covered by such financial statements;
(d) promptly upon receipt thereof, copies of all reports
submitted to the Company by independent public accountants in connection with
each annual audit, or special audit (if any) of the books of the Company made
by such accountants, including, without limitation, any comment letter
submitted to management by such accountants in connection with their annual
audit;
(e) promptly upon their becoming available, copies of all press
releases and other statements made available generally by the Company to the
public concerning material developments in the business of the Company;
(f) within five (5) days of any Responsible Officer of the
Company obtaining knowledge of any condition or event that constitutes an Event
of Default or Potential Event of Default, or that the registered holder of any
Note has given any notice or taken any other action with respect to a claimed
Event of Default or Potential Event of Default under this Agreement or that any
Person has given notice to the Company or taken any other action with respect
to a claimed default or event or condition of the type referred to in
Article 14, an Officers' Certificate describing the same and the period of
existence thereof and specifying what action the Company has taken, is taking
and proposes to take with respect thereto;
(g) promptly upon (and in any event within ten (10) Business Days
of) any Responsible Officer of the Company obtaining knowledge of the
occurrence of any (i) "reportable event," as such term is defined in
Section 4043 of ERISA, or (ii) "prohibited transaction," as such term is
defined in Section 4975 of the Code, that is not exempt by law or ruling in
connection with any Plan relating to the Company or any trust created
thereunder, a written notice specifying the nature thereof, what action the
Company has taken, is taking and proposes to take with respect thereto, and any
action taken or threatened by the Internal Revenue Service or the PBGC with
respect thereto, provided that, with respect to the occurrence of any
"reportable event" as to which the PBGC has waived the 30-day reporting
requirement, such written notice need not be given;
(h) immediately upon the occurrence of any of the following
events, an Officers' Certificate describing such event: (i) the Certificate of
Incorporation or Bylaws of the Company shall have been amended or the Company
shall have changed its jurisdiction of organization; or (ii) the Company shall
have changed its name or shall do business under any name other than as set
forth on Schedule 9.2; or (iii) the Company shall have changed its principal
place of business or its chief executive offices; or (iv) the Company shall
have become a party to any suit, action or proceeding that, if adversely
determined, would have a Material Adverse Effect or in which the projected
settlement amount involved therein could reasonably be expected to equal
$5,000,000 or more (in addition to any insurance coverage); or (v) the Company
shall have opened or closed any material place of business; or (vi) there shall
occur any strike, walkout, work stoppage or other material employee disruption
relating to any of the Mortgaged Properties, or the expiration of any labor
contract affecting any of the Mortgaged Properties (unless there exists a new
labor contract in substitution therefor) that reasonably could be expected to
have a Material Adverse Effect; or (vii) the Company shall have obtained
knowledge that any of its insurance policies or any insurance policies
affecting any of the Mortgaged Properties will be canceled or not renewed
(unless there exists a similar insurance policy in substitution therefor);
(i) promptly (i) upon receipt thereof, copies of any notices to
the Company from any federal or state administrative agency relating to any
order, ruling, statute or other law or regulation that would, with reasonable
probability, have a Material Adverse Effect; and (ii) following filing with the
Commission, any reports or statements filed with the Commission;
(j) promptly upon receipt thereof, copies of any notice delivered
pursuant to Article 14; and
(k) with reasonable promptness, such other information and data
with respect to the Company as from time to time may be reasonably requested by
any registered holder of a Note, including, without limitation, any projections
or business plans prepared by or for the Company.
9.3. Inspection. The Company will permit, subject to rights of parties
in possession, any authorized representatives designated by Purchaser, so long
as Purchaser or its nominee shall hold any Notes, or designated by any other
registered holder of any Notes, without expense to the Company, at such
reasonable times and as often as may be reasonably requested, to (a) visit and
inspect the Mortgaged Properties and other properties subject to the Collateral
Agreements, as well as the Company's books of account, and to make copies and
take extracts therefrom, and (b) upon the prior written consent of the Company,
which consent shall not be unreasonably withheld, discuss the Company's
affairs, finances and accounts with the Company's directors, officers and
independent public accountants (and by this provision the Company authorizes
such directors, officers and accountants to discuss with such representatives
the affairs, finances and accounts of the Company, whether or not an officer or
other representative of the Company is present, provided that the Company shall
receive notice of any such meeting and be given a reasonable opportunity to
have a representative attend); provided, however, that if any Event of Default
or Potential Event of Default then exists, no such written consent of the
Company shall be necessary.
9.4. Acquired Real Property. The Company shall deliver to Purchaser so
long as such Purchaser or Purchaser's nominee shall hold any Note, and to each
other registered holder of a Note, upon request of a Purchaser or any other
registered holder of a Note, but in any event not less than ninety (90) days
after the end of each Fiscal Year of the Company, a list and description of all
real property purchased or newly leased by the Company during the period
specified in such request or the past Fiscal Year, as applicable, that is to be
used for any new processing plant, hatchery or feed mill in which an existing
processing plant, hatchery or feed mill on any Mortgaged Property is to be shut
down or operations are to be substantially decreased ("Acquired Property"),
and, unless otherwise specified in this Agreement or by the registered holder
or registered holders (other than the Company or any Affiliate) of the Notes,
the Company shall execute and deliver a deed of trust or mortgage and
assignment of leases and rents, substantially in form and substance
satisfactory to Purchaser (with any changes to such form of mortgage as
appropriate in the applicable jurisdiction and as requested by Purchaser or
Purchaser's nominee or any registered holder of a Note other than the Company
or any of the Company's Affiliates), to Purchaser or a mortgage trustee, for
the benefit of Purchaser so long as Purchaser or Purchaser's nominee shall hold
any Note, and to each other registered holder of a Note or a mortgage trustee,
for the benefit of each such other holder, granting a first Lien of record on
and a first security interest in the Acquired Property, subject only to
existing Liens, the Permitted Exceptions, and any purchase money Liens incurred
by the Company in connection with the acquisition of any Acquired Property, and
the Acquired Property shall thereafter be part of the Mortgaged Properties.
The Company shall permit Purchaser so long as Purchaser or Purchaser's nominee
shall hold any Note, and each other registered holder of a Note, the right to
inspect any Acquired Property and to conduct such other investigation and due
diligence with respect to any Acquired Property that such Purchaser or such
other registered holder deems necessary, and to the extent the proposed
acquisition is in excess of $3,000,000, the Company shall pay all reasonable
costs of Purchaser or such other registered holder in inspecting any Acquired
Property and conducting such investigation, including, without limitation, any
costs of an environmental consulting firm and attorneys' fees.
ARTICLE 10.
BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY
So long as any Note shall be outstanding, the Company will perform and
comply, and will cause each Subsidiary to perform and comply, as applicable,
with each of the following covenants:
10.1. Consolidated Net Worth. The Company shall at all times maintain a
Consolidated Net Worth of not less than $250,000,000, as increased from time to
time by twenty-five percent (25%) of the Company's annual positive Consolidated
Net Income, if any.
10.2. Consolidated Working Capital. The Company shall at all times
maintain Consolidated Working Capital of not less than $65,000,000.
10.3. Current Ratio. The Company shall at all times maintain a ratio on
a consolidated basis of Current Assets to Current Liabilities of not less that
1.25:1.
10.4. Fixed Charge Coverage. The Company shall at all times maintain for
the period of eight (8) consecutive fiscal quarters then ended on a
consolidated basis a Fixed Charge Coverage Ratio of not less than 1.40:1.
10.5. Funded Debt to Capitalization. The Company shall at all times
maintain a ratio (a) of Funded Debt, less unrestricted cash and Cash
Equivalents to (b) the aggregate of Funded Debt included in clause (a), less
unrestricted cash and Cash Equivalents, plus Capitalization of no greater than
0.675:1.
10.6. Liens. The Company will not, and will not permit any Subsidiary
to, directly or indirectly, create, incur, assume or permit to exist any Lien
on or with respect to any property or asset of the Company or such Subsidiary,
whether now owned or held or hereafter acquired, or any income or profits
therefrom, other than (a) the Liens and security interests created to secure
the Notes, (b) Liens that constitute Permitted Exceptions, (c) any Lien on any
property acquired, constructed or improved by the Company after Closing and
created contemporaneously with or within twelve (12) months of such
acquisition, construction or improvement to secure Debt incurred to provide for
all or a portion of the purchase price of such property as acquired,
constructed or improved, (d) Liens on property of the Company in favor of the
United States of America or any political subdivision thereof to secure partial
payments pursuant to any contract, (e) pledges or deposits to secure
obligations under worker's compensation laws or similar judgments thereunder
that are not currently dischargeable, and pledges, deposits, performance bonds
or similar security interests in connection with bids, tenders, contracts and
leases to which the Company is a party (all of which are in the ordinary course
of business and which do not relate to indebtedness of the Company), (f) Liens
for taxes, assessments or governmental charges not then due and delinquent or
the validity of which is being contested in good faith and a bond or other
security satisfactory to Purchaser has been posted by the Company, (g) Liens
arising in connection with court proceedings, provided the execution of such
Liens is effectively stayed and such Liens are contested in good faith and a
bond or other security satisfactory to Purchaser has been posted by the
Company, (h) Liens arising in the ordinary course of business (including
easements and similar encumbrances) that are not incurred in connection with
the borrowing of money, provided that such Liens do not materially interfere
with the conduct of the business of the Company, (i) inchoate Liens, (j) any
Lien resulting from renewing, extending or refunding outstanding Secured Debt
provided that the principal amount of the Debt secured thereby is not increased
and the Lien is not extended to any other property, (k) Liens on assets (other
than the Collateral) to secure Debt provided that no Event of Default or
Potential Event of Default exists or would result therefrom, and (l) Liens
described on Schedule 10.6 hereto.
10.7. Investments; Debt; Guarantees.
(a) The Company shall not, and shall not permit any Subsidiary
to, directly or indirectly, make or own any Investment other than Permitted
Investments, except that the Company or a Subsidiary may (i) purchase or own
assets or stock and other securities of a Subsidiary; (ii) make loans to
officers, directors, stockholders, employees, contract growers or Subsidiaries
to the extent that following such loan, no Event of Default or Potential Event
of Default would exist; (iii) make investments, payments, loans and capital
contributions to entities other than Subsidiaries to the extent such Investment
is made from the net cash proceeds received by the Company from the issuance of
additional shares of capital stock or other securities subsequently converted
into capital stock; and (iv) Investments permitted under Section 10.10; and
(v) investments not covered by clauses (i) through (iv) above; provided that
after giving effect to such investment there would be no Event of Default or
Potential Event of Default.
(b) The Company shall not, and shall not permit any Subsidiary
to, directly or indirectly, create, assume, incur, or guarantee any Debt after
the Closing Date except (i) to the extent that following the creation,
assumption, incurrence or guarantee of such Debt, no Event of Default or
Potential Event of Default would exist and (ii) the Company may guarantee the
trade payables of Pilgrim's Pride-Mexico.
10.8. Restricted Payments. The Company shall not, and shall not permit
any Subsidiary to, directly or indirectly, redeem, purchase, or otherwise
acquire for value any shares of the Company's capital stock, except out of the
net cash proceeds received by the Company after Closing from the issuance of
additional shares of capital stock or other securities subsequently converted
into capital stock. Notwithstanding the foregoing restriction, the Company may
(a) redeem, purchase, or otherwise acquire for value up to an aggregate of
$25,000,000 of shares of the Company's capital stock, or (b) declare or pay any
dividends or any other distributions (other than dividends payable in shares of
capital stock of the Company) on any shares of the Company's capital stock
after Closing in excess of $3,400,000 in the aggregate in any Fiscal Year,
provided in each case that no Event of Default or Potential Event of Default
exists or would result therefrom.
10.9. Leases. The Company shall not, and shall not permit any Subsidiary
to, incur non-cancelable non-Capitalized Lease Obligations or sale and
leaseback transactions if the aggregate annual amount of all minimum or
guaranteed net rentals payable under such leases would exceed four percent (4%)
of Net Tangible Assets (as determined immediately preceding the execution of
such lease).
10.10.Consolidation, Merger and Sale of Substantially All Assets. The
Company shall not, and shall not permit any Subsidiary to, directly or
indirectly, (a) sell, transfer, lease, abandon or otherwise dispose of all or
substantially all of its assets in a single or series of related transactions;
or (b) consolidate with or merge into any other Person or permit any other
Person to consolidate with or merge into it. Notwithstanding the foregoing,
the Company or any Subsidiary may engage in any such consolidation or merger
if, after giving effect thereto, either clauses (i), (iii) or (iv) are
satisfied or clauses (ii), (iii) and (iv) are satisfied: (i) both the fair
market value of all consideration paid or payable to the Company and/or its
Subsidiaries on account of all such consolidations or mergers does not exceed
$50,000,000 in the aggregate in any Fiscal Year and the Company (or, if the
consolidation or merger is between a Subsidiary and any corporation or other
entity which is not a Subsidiary, then the Subsidiary) is the surviving entity;
(ii) the consolidation or merger is between (A) the Company and a Subsidiary
and the Company is the surviving entity, (B) an Eligible Subsidiary and another
Subsidiary and the Eligible Subsidiary is the surviving entity or (C) a
Subsidiary not organized under the laws of a state of the United States and
another Subsidiary not organized under the laws of a state of the United
States; (iii) no Event of Default or Potential Event of Default shall have
occurred and be continuing; and (iv) after giving effect to the consolidation
or merger on a proforma basis there would be no Event of Default or Potential
Event of Default.
10.11.Formation of Subsidiaries. Without the prior notice to Purchaser,
the Company shall not, and shall not permit any of its existing Subsidiaries
to, directly or indirectly, form or acquire any new Subsidiaries and in
connection therewith or thereafter transfer, assign or convey any material
assets of the Company to such new Subsidiary.
10.12.Interested Party Transactions. The Company shall not, nor permit
any Subsidiary to, conduct any transactions with any Affiliate on terms that
are not fair and reasonable and not materially less favorable to the Company or
such Subsidiary than it would obtain in a comparable arm's-length transaction
with a Person not an Affiliate other than ongoing transactions with Affiliates
of a similar nature to those disclosed in the Company's Proxy Statement
relating to the Fiscal Year-end September 30, 2001.
10.13.Existence. The Company will do, or will cause to be done, all
things necessary to, and cause the Company and each Subsidiary to, preserve,
keep and maintain in full force and effect its corporate existence, rights
(charter and statutory), franchises and authority to do business and the
corporate existence, rights (charter and statutory), franchises and authority
to do business of the Company and each of the Subsidiaries, except for such
matters that would not result in a Material Adverse Effect.
10.14.Payment of Taxes and Claims; Tax Consolidation. The Company will,
and cause the Subsidiaries to, pay and cause to be paid all taxes, assessments
and other governmental charges imposed upon it or any of its properties or
assets or in respect of any of the franchises, business, income or profits of
the Company before any penalty or interest accrues thereon, and all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and that by law have or
might become a Lien upon any of the properties or assets of the Company,
provided that (a) no such charge or claim need be paid if being contested in
good faith by appropriate proceedings promptly initiated and diligently
conducted, such bonds or escrows are in place as registered holders of the
Notes at the time shall request, or if such reserves or other appropriate
provision, if any, as shall be required by GAAP shall have been made therefor
or (b) in the case of all properties (other than the Mortgaged Properties), the
Company shall not be deemed to have breached this Section 10.14 where the
failure to pay such taxes, assessments, or other governmental charges could not
reasonably be expected to result in a Material Adverse Effect. The Company
will not file or permit the filing of any consolidated income tax return with
any Person (other than a Subsidiary).
10.15.Compliance with Laws. The Company will, and will cause its
Subsidiaries to, comply with all laws, statutes, rules, regulations and
ordinances of any Governmental Authority, the failure to comply with would have
a Material Adverse Effect.
10.16.Compliance with ERISA. The Company will not, and will not permit
any employee benefit plan (as that term is defined in Section 3 of ERISA)
maintained by the Company, any Subsidiary or any Related Person to (a) engage
in any "prohibited transaction" as such term is defined in Section 4975 of the
Code, as amended from time to time, which is likely to result in a liability
for such Person; (b) incur any "accumulated funding deficiency", as such term
is defined in Section 302 of ERISA, whether or not waived which is likely to
result in a liability of such Person; or (c) terminate any such benefit plan in
a manner which could result in the imposition of a lien or encumbrance on the
assets of such Person pursuant to Section 4068 of ERISA.
10.17.Maintenance of Properties; Insurance. The Company will maintain or
cause to be maintained in good repair, working order and condition (reasonable
wear and tear excepted) all properties used or useful in, and deemed material
to, the business of the Company or any Subsidiary and from time to time will
make or cause to be made all appropriate repairs, renewals and replacements
thereof as the Company in its judgment deems reasonably necessary. The Company
will maintain or cause to be maintained, with financially sound and reputable
insurers, insurance with respect to the properties and business of the Company
and its Subsidiaries, against loss or damage of the kinds customarily insured
against by companies of established reputation engaged in the same or similar
business and similarly situated, of such types and in such amounts as are
customarily carried under similar circumstances by such other companies. In
any event, the Company shall, at a minimum, comply with all maintenance,
insurance and similar requirements under the Security Documents.
10.18.Title. As of the Closing Date, except Liens and other matters that
may constitute Permitted Exceptions, the Company has good (and, with respect to
non-leasehold real property, indefeasible) title to all of its properties and
assets that are material to its business as presently conducted and as proposed
to be conducted and none of such properties or assets will be subject to any
Liens, other than Permitted Exceptions. As of the Closing Date, the Company
has good (and, with respect to non-leasehold real property, indefeasible) fee
simple title to the Mortgaged Properties subject only to the Permitted
Exceptions.
10.19.Conduct of Business. The Company will not, and will not permit any
Subsidiary to, directly or indirectly engage in any material respects in any
business other than businesses engaged in by the Company on the date hereof,
other operations or activities in the poultry industry and in the processing,
packaging, distribution and wholesales of poultry products and other businesses
or activities substantially similar or related thereto.
00.00.Xxxx of Assets. Except as permitted in Section 10.10, the Company
shall not, and shall not permit any Subsidiary to, voluntarily or by operation
of law, sell, lease, transfer, or otherwise dispose of Collateral in excess of
five percent (5%) in any instance or twenty percent (20%) in the aggregate of
the lower of the book value or fair market value of the Company's total assets.
Within twelve (12) months after the occurrence of any such permitted
disposition, the Company shall reinvest the entire proceeds resulting therefrom
in assets or property which are the same or substantially similar to the
transferred assets, which assets or property shall be subject to a first Lien
of record and a first security interest in favor of Purchaser, Purchaser's
nominee and any registered holder of a Note. The provisions of this Section
10.20 shall not restrict or impair the provisions of Section 10.21 regarding
substitution of Collateral.
10.21.Substitution of Collateral. The Company shall not, and shall not
permit any Subsidiary to, directly or indirectly, substitute or replace any
machinery or equipment constituting Collateral if (a) the fair market value of
such substitute or replacement machinery or equipment is materially less than
the fair market value of the substituted or replaced machinery or equipment,
(b) Purchaser's first Lien of record or first security interest in the
Collateral would be materially adversely effected or impaired or (c) the
Company would not be able to provide Purchaser a first Lien of record and a
first security interest therein. All substitute and replacement machinery and
equipment shall be at least equal in quality and class to the original
machinery and equipment.
10.22.Permits and Licenses. Except where the failure would not
reasonably be expected to result in a Material Adverse Effect, the Company
will, and will cause its Subsidiaries to, promptly obtain, maintain, apply for
renewal, and not allow to lapse, any authorization, consent, approval, permit,
license or order, and accomplish any filing or registration with, any
Governmental Authority which may be or may become necessary for the operation
of its business or in order that it perform all of its obligations under this
Agreement or the Collateral Agreements and in order that the same may be valid
and binding and effective in accordance with their terms and in order that
Purchaser may be able freely to exercise and enforce any and all of its rights
under this Agreement or the Collateral Agreements.
10.23.Further Assurances. The Company shall take, and shall cause each
Subsidiary to take, all such further actions and execute all further documents
and instruments as Purchaser may at any time reasonably determine in its sole
discretion to be necessary or desirable to further carry out and consummate the
transactions contemplated by this Agreement and the Collateral Agreements, to
cause the execution, delivery and performance of this Agreement and the
Collateral Agreements to be duly authorized and to perfect or protect the Liens
(and the priority status thereof) on the Collateral.
ARTICLE 11.
ENVIRONMENTAL MATTERS
11.1. Definitions. As used in this Article 11, the following terms shall
be defined as indicated:
(a) "Acquisition Date," with respect to any portion of the
Mortgaged Properties, means the date on which Purchaser or the registered
holder of any Note becomes an owner of such portion of the Mortgaged
Properties.
(b) "Adverse Environmental Impact" means (i) a Release of a
Hazardous Substance in a Reportable Quantity or (ii) any material adverse
impact on human health, livestock or the quality of any Mortgaged Property.
(c) "Environmental Activity" shall mean any storage, holding,
manufacture, emission, discharge, generation, processing, treatment, abatement,
removal, disposition, handling, transportation or disposal, or any actual or
threatened release of any "Hazardous Substances" from, under, into or on the
Mortgaged Properties or otherwise relating to the Mortgaged Properties,
including but not limited to (i) the migration or emanation of "Hazardous
Substances" from the Mortgaged Properties onto or into the environment beyond
the physical boundaries of the Mortgaged Properties; (ii) the off-site disposal
of Hazardous Substances from the Mortgaged Properties; and (iii) any of the
previously described activities occurring in connection with ambient air,
surface and subsurface soil conditions, and all surface and subsurface waters.
(d) "Environmental Condition" shall mean (i) the presence or
existence in, on, at, or under the Mortgaged Properties of any Hazardous
Substances, "industrial or solid waste," as that term is defined under the
Environmental Laws, and (ii) the presence or existence in, on, at, or under the
environment beyond the physical boundaries of the Mortgaged Properties of any
Hazardous Substances, that migrated or emanated from the Mortgaged Properties.
(e) "Environmental Damages" means all claims, judgments, damages,
losses, penalties, fines, liabilities (including strict liability),
encumbrances, liens, costs and expenses of investigation and defense of any
claim, whether or not such is ultimately defeated, and of any settlement of
judgment, of whatever kind or nature, contingent or otherwise, matured or
unmatured, foreseeable or unforeseeable, including, without limitation,
reasonable attorneys' fees and disbursements and consultants' fees, any of
which are incurred at any time, and including, but not limited to (i) damages
for personal injury, or injury to property or natural resources occurring upon
or off of the Mortgaged Properties, foreseeable or unforeseeable, including,
without limitation, lost profits, consequential damages, the cost of
demolition, redesign and rebuilding of any improvements on real property, and
interest and penalties as allowed by law; (ii) diminution in the value of the
Mortgaged Properties, and damages for the loss of or restriction on the use of
or adverse impact on the marketing of rentable or usable space or of any
amenity of the Mortgaged Properties; (iii) reasonable fees incurred for the
services of consultants, contractors, experts, laboratories and all other
reasonable costs incurred in connection with the investigation, remediation,
removal, or disposal of Hazardous Substances or violation of the Environmental
Laws, including, but not limited to, the preparation of any feasibility studies
or reports or the performance of any response, cleanup, remediation, removal,
abatement, containment, closure, restoration, disposal, or monitoring work
required by and in conformity with any federal, state or local governmental
agency or political subdivision, or reasonably necessary to make full economic
use of the Mortgaged Properties or any other property or otherwise expended in
connection with such conditions, and including, without limitation, any
reasonable attorneys' fees, costs and expenses incurred in connection with any
of the foregoing or in enforcing this Agreement or collecting any sums due
hereunder; and (iv) liability to any person or entity to indemnify such person
or entity for costs expended in connection with the items referenced in this
subsection (d).
(f) "Environmental Laws" means all federal, state or local laws,
rules or regulations pertaining to the protection of human health or the
environment, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. {section} 9601, et seq.),
the Resource Conservation and Recovery Act (42 U.S.C. {section} 6901, et seq.),
the Federal Clean Air Act (42 U.S.C. {section} 7401, et seq.), and the Federal
Clean Water Act (42 U.S.C. {section} 1251, et seq.), each as amended from time
to time, and regulations and rules issued thereunder.
(g) "Hazardous Substances" means (i) any "hazardous substance,"
as such term is defined in either the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C. {section} 9601 et seq.) and
the regulations promulgated thereunder (as amended, "CERCLA"); (ii) any
"hazardous waste," as such term is defined in the Resource Conservation and
Recovery Act of 1976 (42 U.S.C. {section} 6901 et seq.) and the regulations
promulgated thereunder (as amended, "RCRA"); (iii) any substances or materials
listed as hazardous or toxic in the United States Department of Transportation
Table, as amended from time to time; (iv) asbestos in any form or any asbestos
containing materials; (v) polychlorinated biphenyls ("PCB's"); (vi) any
explosive or radioactive materials; (vii) hydrocarbons, petroleum products, or
any derivative thereof; or (viii) any other chemical, material or substance
that is regulated as hazardous or toxic or exposure to which is prohibited,
limited or regulated by any federal, state, county, regional, local or other
Governmental Authority or that, even if not so regulated, poses a material
threat to the health and safety of the occupants or livestock of the Mortgaged
Properties or the owners or occupants of property adjacent thereto.
(h) "Release" means any spilling, leaking, pumping, pouring,
emitting, emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment (including, without limitation, the abandonment
or discarding of barrels, containers or other receptacles containing any
Hazardous Substance).
(i) "Reportable Quantity" means that quantity of a material as
set forth in 40 C.F.R. Part 302 or the quantity of a material that is
sufficient to trigger a remediation, response, closure or notification
obligation under applicable Environmental Laws.
11.2. Indemnification.
(a) Subject to subsections (b) and (c) below, notwithstanding any
provision in this Agreement or any Collateral Agreement limiting or negating
the Company's liability, the Company shall protect, indemnify, save harmless
and defend Purchaser and each present and former registered holder (or
beneficial holder through participation or otherwise) of a Note and their
respective past, present and future officers, directors, shareholders,
partners, managers, members, employees, agents, contractors, tenants and
representatives (individually, an "Indemnified Party," and collectively, the
"Indemnified Parties") from and against any and all Environmental Damages
imposed upon, suffered or incurred by or asserted against any Indemnified Party
or the Mortgaged Properties arising in any manner in connection with the
existence of an Environmental Condition at the Mortgaged Properties or the
occurrence of any Environmental Activity at the Mortgaged Properties, whether
arising, occurring, or in existence during or prior to the Company's ownership
or operation of the Mortgaged Properties, whether arising, occurring, or in
existence prior to the issuance of the Notes or at any time thereafter, whether
arising, occurring, or in existence before, during or after enforcement of the
rights and remedies of Purchaser or any other registered holder of a Note upon
default and whether or not the Company is responsible therefor, including,
without limitation, the violation of Environmental Laws, or any
representations, warranties or covenants contained herein, any imposition by
any Governmental Authority of any lien or so-called "super priority lien" upon
the Mortgaged Properties, cleanup costs, liability for personal injury or
property damage or damage to the environment and any fines, penalties and
punitive damages with respect thereto. An Indemnified Party may elect to
conduct its own defense through counsel of its own choice, and the Company
agrees to pay the reasonable fees and expenses of such counsel for conducting
such defense but only if an Indemnified Party determines in good faith that the
conduct of its defense by the Company could be materially prejudicial to the
Indemnified Party's interests. THESE PROVISIONS ARE INTENDED TO INDEMNIFY THE
INDEMNIFIED PARTIES AGAINST (i) THE RESULTS OF THEIR OWN NEGLIGENCE AND
(ii) ANY STRICT LIABILITY IMPOSED ON THE INDEMNIFIED PARTIES.
(b) Notwithstanding the foregoing, the Company's obligations
hereunder shall not apply with respect to an Environmental Condition or
Environmental Activity arising for the first time after the Acquisition Date
unless such Environmental Condition or Environmental Activity is caused by the
Company or its contractors, agents or representatives after the Acquisition
Date or arose out of an Environmental Condition or Environmental Activity,
whether caused by the Company or not, occurring or existing prior to the
Acquisition Date. For purposes of this Agreement, the Company shall bear the
burden of proving when an Environmental Condition or Environmental Activity
occurred or existed. In addition, any Hazardous Substances located upon, about
or beneath the Mortgaged Properties or having migrated to or from the Mortgaged
Properties shall be presumed to have been present prior to the Acquisition Date
unless the Company can demonstrate (i) that a portion of the Hazardous
Substances were introduced to the Mortgaged Properties after the Acquisition
Date and were not introduced by the Company, and (ii) the Environmental Damages
are divisible between the portion of the Hazardous Substances introduced before
and after the Acquisition Date. If the Company can demonstrate both
conditions, then its indemnity shall not extend to the portion of any divisible
Environmental Damages attributable to Hazardous Substances introduced to the
Mortgaged Properties after the Acquisition Date by parties other than the
Company.
(c) In no event shall the provisions of this Agreement be deemed
to constitute a waiver of, or to be in lieu of, any right or claim, including,
without limitation, any right of contribution or other right of recovery that
any person entitled to enforce this Agreement might otherwise have against the
Company under the Environmental Laws.
11.3. Agreement to Remediate. Notwithstanding the obligation of the
Company to indemnify the Indemnified Parties pursuant to this Agreement, the
Company shall upon demand of the registered holders (other than the Company or
any Affiliate) of, in the aggregate, sixty-six and two-thirds percent (66-2/3%)
or more in principal amount of the Notes at the time outstanding (excluding any
Notes directly or indirectly owned by the Company or any Affiliate), and at the
sole cost and expense of the Company, promptly take all actions in connection
with an Environmental Condition or Environmental Activity causing an Adverse
Environmental Impact that are required by any Governmental Authority or by
Environmental Laws. Such actions shall include, but not be limited to, the
investigation of the Environmental Condition of the Mortgaged Properties, the
preparation of any feasibility studies, reports or remedial plans, and the
performance of any cleanup, remediation, containment, operation, maintenance,
monitoring or restoration work, whether on or off of the Mortgaged Properties.
All such work shall be performed by one or more qualified and experienced
contractors, selected by the Company. The Company shall proceed continuously
and diligently with such investigatory and remedial actions, provided that in
all cases such actions shall be in accordance with all applicable requirements
of the appropriate governmental agencies. Any such actions shall be performed
in a good, safe and workmanlike manner and shall minimize any impact on the
business conducted at the Mortgaged Properties. The Company shall pay all
costs in connection with such investigatory and remedial activities, including,
but not limited to, all power and utility costs, and any and all taxes or fees
that may be applicable to such activities. The Company shall promptly provide
to Purchaser and the registered holder of any Note copies of testing results
and reports that are generated in connection with the above activities.
Promptly upon completion of such investigation and remediation, the Company
shall permanently seal or cap all monitoring xxxxx and test holes to industrial
standards as required by the Environmental Laws, remove all associated
equipment, and restore the Mortgaged Properties to the maximum extent possible,
which shall include, without limitation, the repair of any material surface
damage, including paving, and the repair, restoration or reconstruction of any
damaged improvements caused by such investigation or remediation.
11.4. Covenants. The Company shall during its ownership or operation of
the Mortgaged Properties (i) comply in all material respects with all
Environmental Laws relating to the Mortgaged Properties and the ownership or
operation of the Mortgaged Properties, and not engage in or permit others to
engage in any Environmental Activity in violation of the Environmental Laws;
(ii) establish and maintain, as required by the Environmental Laws, policies,
procedures and programs to monitor and assure compliance in all material
respects with the Environmental Laws relating to the Mortgaged Properties or
the ownership or operation of the Mortgaged Properties and provide an
Indemnified Party upon request with evidence of the existence and
implementation of these policies, procedures, and programs; (iii) deliver to
Purchaser and the registered holder of any Note within fifteen (15) days
following the occurrence of any such event, written notice of the discovery by
the Company of any event, the occurrence of which would render any
representation or warranty contained in Section 5.19 incorrect if made at the
time of such discovery; (iv) promptly comply in all material respects with
Environmental Laws requiring the remediation, abatement, removal, treatment or
disposal of Hazardous Substance with respect to the Mortgaged Properties or
remediation of an Environmental Condition; (v) cause any party who occupies the
Mortgaged Properties to comply with this Section 11.4; and (vi) not cause or
suffer any liens to be recorded against or imposed against any of the Mortgaged
Properties as a result of an Environmental Condition or Environmental Activity
and which liens violate the terms of Section 10.6. The Company shall work
diligently to complete all investigations of Environmental Issues needed to
make such a determination, shall correct any violation of Environmental Laws
identified, and shall remediate any Adverse Environmental Impact in the manner
described in Section 11.3. The Company acknowledges and agrees that these
Environmental Issues and any Environmental Damages related to them are within
the scope of the indemnification obligation of Section 11.2.
11.5. Site Assessments. The registered holders (other than the Company
or any Affiliate) of, in the aggregate, a majority of the principal amount of
the Notes at the time outstanding (excluding any Notes directly or indirectly
owned by the Company or any Affiliate) (by its officers, employees and agents,
as applicable) at any time and from time to time, either prior to or after the
occurrence of an Event of Default, may contract for the services of persons
(the "Site Reviewers") to perform environmental site assessments ("Site
Assessments") on the Mortgaged Properties for the purpose of determining
whether there exists on the Mortgaged Properties any Environmental Condition or
Environmental Activity, or other ownership or operation of the Mortgaged
Properties that is in violation of Environmental Laws or could reasonably be
expected to result in Environmental Damages. The Site Assessments may be
performed at any time or times, upon reasonable notice, and under reasonable
conditions established by the Company that do not unreasonably impede the
performance of the Site Assessments. The Company hereby grants, and shall
cause any tenant to grant, to an Indemnified Party, its agents, attorneys,
employees, consultants, and contractors and the Site Reviewers, an irrevocable
license and authorization to enter upon and inspect the Mortgaged Properties
and perform such tests, including, without limitation, subsurface testing, soil
and ground water testing, and other tests that may physically invade the
Mortgaged Properties, as the registered holders (other than the Company or any
Affiliate) of, in the aggregate, a majority of the principal amount of the
Notes at the time outstanding (excluding any Notes directly or indirectly owned
by the Company or any Affiliate), in their sole discretion, determine is
necessary to protect their liens, assignments, and/or security interests in the
Mortgaged Properties. The Company will supply to the Site Reviewers such
historical and operational information regarding the Mortgaged Properties as
may be reasonably requested by the Site Reviewers to facilitate the Site
Assessments and will make reasonably available for meetings with the Site
Reviewers appropriate personnel having knowledge of such matters. On request,
Purchaser (if it shall remain the holder of any Notes) or any registered holder
of any Note shall make the results of such Site Assessments fully available to
the Company within a reasonable period of time after such request, and the
Company (prior to an Event of Default) may at its election participate under
reasonable procedures in the direction of such Site Assessments and the
description of tasks of the Site Reviewers. The cost of performing such Site
Assessments shall be paid by the Company upon demand of the registered holders
(other than the Company or any Affiliate) of, in the aggregate, a majority of
the principal amount of the Notes at the time outstanding (excluding any Notes
directly or indirectly owned by the Company or any Affiliate).
11.6. Default; Remedies; Subrogation. If the Company fails to proceed
with any removal or remediation of Hazardous Substances causing any Adverse
Environmental Impact required by Environmental Laws or to comply with
Environmental Laws or otherwise fails to perform its obligations under this
Article 11, at the option of the registered holders (other than the Company or
any Affiliate) of, in the aggregate, a majority of the principal amount of the
Notes at the time outstanding (excluding any Notes directly or indirectly owned
by the Company or any Affiliate), such registered holders may, but shall not be
obligated to, do whatever is reasonable and in conformity with the
Environmental Laws at the Company's sole cost and expense to remove or
remediate such Hazardous Substances causing an Adverse Environmental Impact or
otherwise comply with Environmental Laws, and the indemnity provided in
Section 11.2 hereof shall cover all such reasonable and necessary costs and
expenses and shall be payable by the Company on demand. Without in any way
limiting or affecting the Company's liability hereunder, Purchaser and each
registered holder of a Note shall be subrogated to any rights the Company may
have under any indemnifications from or agreements entered into with any
present, future or former owners, tenants, occupants or other users of the
Mortgaged Properties.
11.7. Survival. The obligations of the Company under this Article 11
shall survive any payment of the Notes, any discharge, satisfaction, release or
assignment of any Security Document, the discharge of the Company's obligations
under the Collateral Agreements, any transfer of the Mortgaged Properties or
any part thereof, any exercise of remedies by Purchaser or the registered
holder of any Notes, including, without limitation, the appointment of a
receiver, any foreclosure of the Security Documents or any transfer of the
Mortgaged Properties (or any part thereof) by deed in lieu of foreclosure, any
investigation or any information that may be obtained by Purchaser or the
registered holder of any Notes before or after the Acquisition Date, and any
other event or circumstance whatsoever.
11.8. Conflicts. In the event of any conflict between the terms of this
Article 11 and those contained in the Mortgages, the terms hereof shall
control.
ARTICLE 12.
REGISTRATION, TRANSFER, AND SUBSTITUTION OF NOTES
12.1. Note Register; Ownership of Notes. The Company will keep at its
principal office a register in which the Company will provide for the
registration of the Notes and the registration of transfers of the Notes. The
Company may treat the Person in whose name any Note is registered on such
register as the owner thereof for the purpose of receiving payment of the
principal of and the applicable Premium, if any, and interest on such Note and
for all other purposes, whether or not such Note shall be overdue, and the
Company shall not be affected by any notice to the contrary.
12.2. Transfer and Exchange of Notes. Upon surrender of any Note for
registration of transfer or for exchange to the Company at its principal
office, at the expense of the transferring parties, the Company will execute
and the Company will authenticate and deliver in exchange therefor a new Note
or Notes in denominations, as requested by the registered holder or transferee,
which aggregate the unpaid principal amount of such surrendered Note. Each
such new Note shall be registered in the name of such Person as such registered
holder or transferee may request, shall be dated so that there will be no loss
of interest on such surrendered Note and shall be otherwise of like tenor.
12.3. Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Note and, in the case of any such loss, theft or destruction, upon delivery
of an indemnity agreement reasonably satisfactory to the Company from the
registered holder of such Note and financial information reasonably
satisfactory to the Company verifying such registered holder's ability to
provide such indemnification, or in the case of any such mutilation, upon the
surrender of such Note for cancellation to the Company at its principal office,
at the expense of the party requesting replacement, the Company will execute,
authenticate and deliver, in lieu thereof, a new Note of like tenor, dated so
that there will be no loss of interest on such lost, stolen, destroyed or
mutilated Note. Any Note in lieu of which any such new Note has been executed
and delivered by the Company shall not be deemed to be an outstanding Note for
any purpose hereof.
ARTICLE 13.
PAYMENTS ON NOTES
So long as Purchaser or its nominee shall hold any Note, the Company will
pay all sums becoming due on such Note for principal, the applicable Premium,
if any, and interest in immediately available funds by the method and at the
address specified for such purpose in the Schedule of Information for Payment
and Notices at the end hereof (the "Schedule of Information for Payment and
Notices"), or by such other method or at such other address as Purchaser shall
have specified from time to time to the Company in writing for such purpose,
without the presentation or surrender of such Note or the making of any
notation thereon, except that any Note paid or prepaid in full shall be
surrendered to the Company for cancellation at its principal office. Prior to
any sale or other disposition of any Note held by Purchaser or its nominee,
Purchaser will, at its election, either (a) endorse thereon the amount of
principal paid thereon and the last date to which interest has been paid
thereon, or (b) surrender such Note to the Company in exchange for a new Note
or Notes pursuant to Section 12.2. The Company will afford the benefits of
this Article 13 to any registered holder of a Note that has made the same
agreement relating to such Note as Purchaser has made in this Article 13.
ARTICLE 14.
EVENTS OF DEFAULT AND ACCELERATION
14.1. Events of Default. The occurrence of any of the following
conditions or events shall constitute an "Event of Default" under this
Agreement:
(a) Payments. The Company shall default in the payment when due
of any principal, Premium, if any, or interest on any Note (whether the same
becomes due and payable at maturity, by declaration or otherwise) or any other
amounts owing hereunder; or
(b) Representations, Etc. Any representation or warranty made in
writing by or on behalf of the Company herein or in any Collateral Agreement or
in any statement or certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or
(c) Breach of Certain Covenants. The Company shall default in
the due performance or observance by it of any term, covenant or agreement
contained in Section 10.6 (to the extent such default could reasonably be
expected to have a Material Adverse Effect or adversely affect Purchaser's
rights in the Collateral), 10.7, 10.8, 10.10, 10.11, 10.12, 10.13, 10.18 or
10.19; or
(d) Breach of Other Covenants. The Company shall default in the
due performance or observance by it of any term, covenant or agreement (other
than those referred to in subsections (a), (b) or (c) of this Section 14.1)
contained in this Agreement and such default shall continue unremedied for a
period of at least thirty (30) calendar days after the earlier of (i) written
notice to the defaulting party by any registered holder of a Note or (ii) a
Responsible Officer has knowledge of such default; or
(e) Default Under Other Agreements. (i) The Company shall
default in the payment when due of any principal of or interest on any Debt
(which Debt is in an aggregate principal amount of $10,000,000 or more) and
such default shall not be waived or cured within any applicable grace or cure
period; or (ii) the maturity of any Debt of the Company in an aggregate
principal amount of $10,000,000 or more shall be accelerated or subject to
acceleration due to a default thereunder; or
(f) Bankruptcy, etc. The Company shall commence a voluntary case
concerning itself under title 11 of the United States Code entitled
"Bankruptcy", as now or hereafter in effect, or any successor statute thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against the
Company under the Bankruptcy Code and the petition is not controverted within
ten (10) Business Days, or is not dismissed within sixty (60) days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
the Company; or the Company commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to the Company; or there is
commenced against the Company any such proceeding which remains undismissed for
a period of sixty (60) days; or the Company is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Company suffers any appointment of any custodian
or the like for it or any substantial part of its property to continue
undischarged or unstayed for a period of sixty (60) days; or the Company makes
a general assignment for the benefit of creditors; or any corporate action is
taken by the Company for the purpose of effecting any of the foregoing; or
(g) ERISA. (i) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code, any Plan is, shall have been or is reasonably likely
to be terminated or the subject of termination proceedings under ERISA, any
Plan shall have an Unfunded Current Liability, the Company or any Related
Person has incurred or is reasonably likely to incur a liability to or on
account of a Plan under Section 405, 409, 502(i), 501(1), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Code, or
the Company or any Related Person has incurred or is reasonably likely to incur
liabilities pursuant to one or more employee welfare benefit plan that provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA); and (ii) there shall result from any event or events
described in clause (i) of this subsection (f) the imposition or granting of a
Lien, or a liability or a material risk of incurring a liability; and (iii) any
Lien or liability referred to in clause (ii) of this subsection (f) could
reasonably be expected to have a Material Adverse Effect; or
(h) Judgments. There shall remain in force, undischarged,
unsatisfied, unstayed and unbonded, for more than sixty (60) days, any final
judgment entered against any one or more of the Company which is not funded by
insurance in due course in accordance with applicable insurance coverage, from
which no further appeal may be taken and which, with other outstanding
undischarged, unsatisfied, unstayed and unbonded final judgments against such
Person not funded by insurance in due course in accordance with applicable
insurance coverage, exceeds $10,000,000 in the aggregate.
14.2. Acceleration.
(a) Upon the occurrence of any Event of Default described in
Section 14.1(f), the unpaid principal amount of and accrued interest on the
Notes shall automatically become due and payable, and there shall also be due
and payable the applicable Premium in respect of the unpaid principal amount of
the Notes, all without presentment, demand, protest, notice of intent to
accelerate, notice of acceleration, or any other notice of any kind, which are
hereby waived.
(b) Upon the occurrence of any Event of Default other than as
described in Section 14.1(f), any registered holder or registered holders
(other than the Company or any Affiliate thereof) of, in the aggregate, fifty-
one percent (51%) or more in principal amount of the Notes at the time
outstanding (excluding any Notes directly or indirectly owned by the Company or
any Affiliate) may at any time (unless all defaults shall theretofore have been
remedied and all costs and expenses including, without limitation, reasonable
attorneys' fees and expenses incurred by or on behalf of the registered holders
of the Notes by reason thereof shall have been paid in full by the Company) at
its or their option, by written notice or notices to the Company, declare all
the Notes to be due and payable, whereupon the same shall forthwith mature and
become due and payable, together with interest accrued thereon, and there shall
also be due and payable the applicable Premium in respect of the principal
amount of the Notes so declared due and payable, all without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration, or any
other notice of any kind (except as otherwise specifically provided herein),
which are hereby waived. The Company acknowledges that Purchaser purchased the
Notes on the basis and assumption that Purchaser and the registered holders
from time to time of the Notes would receive the payments of principal and/or
interest set forth in Articles 2, 7 and 8 hereof for the full term of the
Notes; therefore, whenever the maturity of the Notes has been accelerated by
reason of an Event of Default, a tender of the amount necessary to satisfy any
part or all of the indebtedness represented by the Notes paid at any time
following such Event of Default and prior to a foreclosure or trustee's sale
shall be deemed a voluntary prepayment, and such payment shall include the
applicable Premium. Similarly, any purchase at a foreclosure sale or a
trustee's sale shall be deemed a voluntary prepayment, and the registered
holders of the Notes shall, to the extent permitted by law, receive out of the
proceeds of such sale, in addition to all other amounts to which they are
entitled, the applicable Premium.
14.3. Remedies. If any Event of Default shall occur and be continuing,
the registered holder of any Note at the time outstanding may proceed to
protect and enforce the rights available to such registered holder at law, in
equity, by statute or otherwise, whether for the specific performance of any
agreement contained herein or, in the case of any registered holder of Notes,
in such Note, or for an injunction against a violation of any of the terms
hereof or thereof, or in aid of the exercise of any power granted hereby or
thereby or by law or otherwise. In case of a default in the payment of any
principal of or applicable Premium, if any, or interest on any Note, the
Company will pay to the registered holder thereof such further amount as shall
be sufficient to cover the costs and expenses of collection, including, without
limitation, reasonable attorneys' fees, expenses and disbursements incurred in
connection therewith. No course of dealing and no delay on the part of any
registered holder of any Note in exercising any right, power or remedy shall
operate as a waiver thereof or otherwise prejudice such registered holder's
rights, powers or remedies except as expressly provided for herein. No right,
power or remedy conferred hereby upon any registered holder of any Note or by
any Note upon any registered holder thereof shall be exclusive of any other
right, power or remedy referred to herein or therein or now or hereafter
available at law, in equity, by statute or otherwise. Subject to
Section 14.2(b), any registered holder or registered holders (other than the
Company or any Affiliate) of, in the aggregate, a majority in principal amount
of the Notes at the time outstanding (excluding any Notes directly or
indirectly owned by the Company or any Affiliate) may at any time pursue any
remedies available under this Agreement or any of the Collateral Agreements.
ARTICLE 15.
EXPENSES
The Company will pay all reasonable expenses in connection with the
negotiation, execution and delivery, performance and enforcement, and amendment
or waiver of any terms or provisions of this Agreement, any Collateral
Agreement, and the Notes, including, without limitation: (a) the cost and
expenses of preparing and reproducing this Agreement, the Collateral Agreements
and the Notes, of furnishing all opinions of Special Counsel, Purchaser's
special local counsel, and counsel for the Company (including any opinions
requested by Special Counsel as to any legal matter arising hereunder) and all
certificates on behalf of the Company and of the Company's performance of and
compliance with all agreements and conditions contained therein on its part to
be performed or complied with; (b) all out of pocket expenses and fees,
expenses and disbursements of Special Counsel and Purchaser's special local
counsel in connection with the negotiation and preparation of this Agreement
and the Closing of the transactions contemplated hereunder; (c) the cost of
delivering to Purchaser's principal office, insured to Purchaser's
satisfaction, the Notes sold to Purchaser hereunder; (d) the reasonable out-of
pocket expenses and reasonable fees, expenses and disbursements of Special
Counsel and Purchaser's special local counsel in connection with any amendments
or waivers hereunder; and (e) the cost and expense related to title insurance
and charges, survey, environmental audit, engineering and architect fees,
recording fees, and real estate taxes contemplated herein or in the Collateral
Agreements. The Company also will pay, and will save Purchaser and each
registered holder of any Notes harmless from, (i) all claims in respect of the
fees of any brokers and finders, except those engaged by Purchaser, and
(ii) any and all liabilities with respect to any taxes (including interest and
penalties), other than federal income taxes, that may be payable in respect of
(A) the execution and delivery hereof and of the Collateral Agreements, (B) the
issue of the Notes hereunder, and (C) any amendment or waiver under or in
respect hereof, of any Collateral Agreement or of the Notes.
ARTICLE 16.
MISCELLANEOUS
16.1. Survival. All representations, warranties and covenants contained
herein, in the Notes and in any other Collateral Agreement or made in writing
by or on behalf of the Company in connection with the transactions contemplated
hereby and thereby shall survive the execution and delivery hereof, any
investigation at any time made by Purchaser or on Purchaser's behalf, the
purchase of the Notes hereunder, or any disposition or payment of the Notes.
All statements contained in any certificate delivered by or on behalf of the
Company pursuant hereto or in connection with the transactions contemplated
hereby shall be deemed representations and warranties of the Company hereunder.
16.2. Amendments and Waivers. Any term hereof or of the Notes may be
amended (with written consent of the Company), and the observance of any term
hereof or of the Notes may be waived (either generally or in a particular
instance and either retroactively or prospectively), only upon the written
consent of the registered holder or registered holders (other than the Company
or any Affiliate) of, in the aggregate, sixty-six and two-thirds percent (66-
2/3%) or more in principal amount of the Notes at the time outstanding
(excluding any Notes directly or indirectly owned by the Company or any
Affiliate), provided that without the prior written consent of the registered
holders of all the Notes at the time outstanding (excluding any Notes directly
or indirectly owned by the Company or any Affiliate), no such amendment or
waiver shall (a) extend the fixed maturity or reduce the amount or extend the
time of payment of any principal or Premium payable (whether as an installment
or upon any prepayment) on any Note of such class; (b) reduce the percentage
set forth above of the principal amount of the Notes, the registered holders of
which are required to consent to any amendment or waiver set forth in such
subdivision; or (c) change the percentage of the principal amount of the Notes,
the registered holders of which may declare the Notes to be due and payable as
provided in Section 14.2. Any amendment or waiver effected in accordance with
this Section 16.2 shall be binding upon each registered holder of any Note, at
the time outstanding, each future registered holder of any Note, and the
Company.
16.3. Indemnification. The Company will indemnify and hold harmless each
Indemnified Party from and against any and all losses, claims, damages and
liabilities, joint or several (including all reasonable legal fees or other
expenses reasonably incurred by any Indemnified Party in connection with the
preparation for or defense of any pending or threatened claim, action or
proceeding, whether or not resulting in any liability), to which such
Indemnified Party may become subject (whether or not such Indemnified Party is
a party thereto) under any applicable federal or state law or otherwise caused
by or arising out of, or allegedly caused by or arising out of, this Agreement,
any Collateral Agreement, or any transaction contemplated hereby, other than
losses, claims, damages or liabilities resulting from any grossly negligent or
unlawful act by Indemnified Party seeking indemnification hereunder. THESE
PROVISIONS ARE INTENDED TO INDEMNIFY THE INDEMNIFIED PARTIES AGAINST THE
RESULTS OF THEIR OWN NEGLIGENCE.
Promptly after receipt by an Indemnified Party of notice of any claim,
action or proceeding with respect to which an Indemnified Party is entitled to
indemnity hereunder, such Indemnified Party will notify the Company of such
claim or the commencement of such action or proceeding, provided that the
failure of an Indemnified Party to give notice as provided herein shall not
relieve the Company of its obligations under this Section 16.3 with respect to
such Indemnified Party, except to the extent that the Company is actually
prejudiced by such failure. The Company will assume the defense of such claim,
action or proceeding and will employ counsel satisfactory to the Indemnified
Party and will pay the fees and expenses of such counsel. Notwithstanding the
preceding sentence, the Indemnified Party will be entitled, at the expense of
the Company, to employ counsel separate from counsel for the Company, and for
any other party in such action, if the Indemnified Party reasonably determines
that a conflict of interest or other reasonable basis exists that makes
representation by counsel chosen by the Company not advisable. If an
Indemnified Party appears as a witness in any action or proceeding brought
against the Company or any of its Affiliates (or any of their partners,
managers, members, officers, directors or employees) in which an Indemnified
Party is not named as a defendant, the Company agrees to reimburse such
Indemnified Party for all out-of-pocket expenses incurred by it (including fees
and expenses of counsel) in connection with the appearance as a witness. The
Indemnified Party shall settle no claim or take any other action prejudicing
the Company's defense without the consent of the Company, which consent will
not be unreasonably withheld or delayed. Purchaser agrees to reasonably
cooperate with the Company in the defense of any such action or proceeding.
16.4. Usury Not Intended. The Company, Purchaser and all other
registered holders of any Notes intend to conform strictly to the usury laws in
force that apply to the transactions evidenced or contemplated hereby.
Accordingly, all agreements among the Company, Purchaser, and any other
registered holder of any Notes, whether now existing or hereafter arising and
whether written or oral, are hereby limited so that in no contingency, whether
by reason of acceleration of the maturity of the Notes, or otherwise, shall the
interest (and all other sums that are deemed to be interest) contracted for,
charged, received, paid or agreed to be paid exceed the Highest Lawful Rate (as
defined below). The Company and Purchaser stipulate and agree that the terms
and provisions contained in this Agreement and the Collateral Agreements are
not intended to and shall never be construed to create a contract to pay for
the use, forbearance or detention of money an amount in excess of the maximum
amount permitted to be charged by applicable law, if any.
Anything in this Agreement or the Collateral Agreements to the contrary
notwithstanding, neither the Company nor any other party now or hereafter
becoming liable for payment of the Notes shall ever be required to pay interest
on or with respect to the Notes or any other obligation hereunder at a rate in
excess of the Highest Lawful Rate, and if the effective rate of interest that
would otherwise be payable under this Agreement or on or with respect to the
Notes would exceed the Highest Lawful Rate, or if the registered holders of
such Notes or obligation shall receive anything of value that is deemed or
determined to constitute interest that would increase the effective rate of
interest payable under this Agreement or on or with respect to the Notes or the
Collateral Agreements to a rate in excess of the Highest Lawful Rate, then (a)
the amount of interest that would otherwise be payable under this Agreement,
the Notes or the Collateral Agreements shall be reduced to the amount allowed
at the Highest Lawful Rate under applicable law, and (b) any unearned interest
paid by the Company or any interest paid by the Company in excess of the
Highest Lawful Rate shall, at the option of the registered holders of the
Notes, be either refunded to the Company or credited on the principal of such
Notes. It is further agreed that, without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received by any
registered holder of the Notes, or under this Agreement, that are made for the
purpose of determining whether such rate exceeds the Highest Lawful Rate, shall
be made, to the extent permitted by applicable law (now or, to the extent
permitted by law, hereafter enacted) governing the Highest Lawful Rate, by
(i) characterizing any nonprincipal payment as an expense, fee or premium
rather than as interest, and (ii) amortizing, prorating, allocating and
spreading in equal parts during the period of the full term of the Notes
(including the period of any renewal or extension thereof), all interest at any
time contracted for, charged or received by such registered holder in
connection therewith. As used in this Section 16.4, the term "Highest Lawful
Rate" means the maximum nonusurious rate of interest permitted from time to
time to be contracted for, taken, charged or received with respect to the Notes
by the registered holders thereof, under applicable law as in effect with
respect to this Agreement or the Notes.
16.5. Notices.
(a) For all purposes under this Agreement, the address of the
Company shall be X.X. Xxx 00, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx 00000,
Attention: Xxxxxxx Xxxxxxx, Chief Financial Officer, telecopy no. 000-000-0000
and for Purchaser shall be the address set forth on the Schedule of Information
for Payment and Notices or such other address of which all such Persons have
received ten (10) days prior written notice.
(b) Any notice, demand, request or report required or permitted
to be given or made to the Company or Purchaser under this Agreement shall be
in writing and shall be deemed given or made when delivered in person, when
sent if by overnight courier or telecopy (if followed by hard copy) or five (5)
Business Days after the date when sent by United States registered or certified
mail to any such Person at its address referenced in Section 16.5(a) above.
16.6. Reproduction of Documents. This Agreement and all documents
relating thereto, including, without limitation, (a) consents, waivers and
modifications that may hereafter be executed, (b) documents received by
Purchaser at the Closing (except the Notes themselves), and (c) financial
statements, certificates and other information previously or hereafter
furnished to Purchaser, may be reproduced by Purchaser or the registered holder
of any Notes by any photographic, photostatic, microfilm, microcard, miniature
photographic or other similar process and Purchaser or the registered holder of
any Notes may destroy any original document so reproduced. The Company agrees
and stipulates that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by Purchaser or the registered holder of any Notes in the regular course of
business) and that any enlargement, facsimile or further reproduction of such
reproduction shall likewise be admissible in evidence.
16.7. Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the respective successors and assigns of the parties
hereto, whether so expressed or not, and shall inure to the benefit of and be
enforceable by any registered holder or registered holders from time to time of
any Notes. The representations, warranties and covenants of the Company
hereunder are intended to be for the benefit of, and inure to, all registered
holders from time to time of any of the Notes.
(b) The Company acknowledges that Purchaser intends to
participate all or a portion of the Notes to one or more of Purchaser's
Affiliates and that all of the representations, warranties, covenants and
agreements of the Company shall be for the benefit of Purchaser's Affiliates as
well as Purchaser.
16.8. Entire Agreement. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL
AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
16.9. GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS
(WITHOUT REGARD TO ITS CONFLICT OF LAW PROVISIONS).
16.10.Invalid Provisions. If any provision hereof or any application
thereof shall be invalid or unenforceable, the remainder hereof and any other
application of such provision shall not be affected thereby.
16.11.Headings. The Table of Contents and Section headings herein are
for purposes of reference only and shall not constitute a part hereof.
16.12.Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
16.13.Further Action. The parties shall execute all documents, provide
all information, and take or refrain from taking all actions as may be
necessary or appropriate to achieve the purposes of this Agreement.
16.14.Creditors. None of the provisions of this Agreement shall be for
the benefit of or enforceable by any creditors of the Company, except as
otherwise expressly provided herein.
16.15.Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement, or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute a waiver of any such breach or any other covenant, duty, agreement,
or condition. No single or partial exercise of any power or right shall
preclude any other or further exercise thereof or the exercise of any other
power or right. No waiver by a party of any right hereunder or of any default
by another shall be binding upon such party unless in writing.
16.16.Release. Purchaser acknowledges and agrees that at the Closing all
of Purchaser's security interests and other liens in all assets of the Company
located in Camp County, Texas, Upshur County, Texas, Angelina County, Texas,
Xxxxxx County, Arkansas and Xxxxxx County, Arkansas, which were granted to or
held by Purchaser as security for Company's obligations to Purchaser, shall be
forever satisfied, released and discharged. Purchaser hereby authorizes
Company to file at any time after the Closing such Uniform Commercial Code
financing statement amendments (including without Purchaser's signature) as may
be necessary to reflect in the public record the release of the security
interests and liens described above in favor of Purchaser. Purchaser will,
from and after the Closing, deliver such other financing statement amendments
or documents as Company may from time to time reasonably request to effectuate
or reflect of public record the release and discharge of such security
interests and liens.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
PILGRIM'S PRIDE CORPORATION
By:
Name:
Title:
XXXX XXXXXXX LIFE INSURANCE COMPANY
By:
Name:
Title:
