▇▇▇▇▇▇ FOODS, INC.
Note Purchase Agreement
DATED AS OF DECEMBER 28, 1995
$55,000,000 6.69% SENIOR NOTES DUE DECEMBER 28, 2005
TABLE OF CONTENTS
(Not a Part of the Agreement)
PAGE
1.PURCHASE AND SALE OF NOTES............................................... 1
1.1 Issuance of Notes.............................................. 1
1.2 The Closing.................................................... 1
1.3 Purchase for Investment; ERISA................................. 2
1.4 Failure to Tender, Failure of Conditions....................... 3
1.5 Expenses....................................................... 3
2.WARRANTIES AND REPRESENTATIONS........................................... 4
2.1 Nature of Business............................................. 4
2.2 Financial Statements; Indebtedness; Material Adverse Change.... 4
2.3 Subsidiaries and Affiliates.................................... 5
2.4 Title to Properties; Leases; Patents, Trademarks, etc.......... 5
2.5 Taxes.......................................................... 6
2.6 Pending Litigation............................................. 7
2.7 Full Disclosure................................................ 7
2.8 Corporate Organization and Authority........................... 7
2.9 Charter Instruments, Other Agreements, etc..................... 8
2.10 Restrictions on Company and Subsidiaries....................... 8
2.11 Compliance with Law............................................ 8
2.12 ERISA.......................................................... 9
2.13 Certain Laws................................................... 10
2.14 Transactions are Legal and Authorized; Obligations are
Enforceable.................................................... 11
2.15 Governmental Consent; Certain Laws............................. 11
2.16 Private Offering of Notes...................................... 12
2.17 No Defaults; Transactions Prior to Closing Date, etc........... 12
2.18 Use of Proceeds of Notes....................................... 12
2.19 Solvency....................................................... 13
3.CLOSING CONDITIONS....................................................... 13
3.1 Opinions of Counsel............................................ 13
3.2 Warranties and Representations True............................ 13
3.3 Officers' Certificates......................................... 13
3.4 Good Standing Certificate...................................... 14
3.5 Legality....................................................... 14
3.6 Private Placement Number....................................... 14
3.7 Expenses....................................................... 14
3.8 Compliance with this Agreement................................. 14
3.9 Other Purchasers............................................... 14
3.10 Proceedings Satisfactory....................................... 14
4.PAYMENTS................................................................. 15
4.1 Mandatory Interest and Principal Prepayments................... 15
4.2 Optional Prepayments........................................... 15
4.3 Offer to Prepay upon Change in Control......................... 16
4.4 Pro Rata Payments.............................................. 18
4.5 Notation of Notes on Prepayment................................ 18
4.6 No Other Optional Prepayments; No Acquisition of Notes......... 18
5.REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES............................ 19
5.1 Registration of Notes.......................................... 19
5.2 Exchange of Notes.............................................. 19
5.3 Replacement of Notes........................................... 20
5.4 Issuance Taxes................................................. 20
6.COVENANTS................................................................ 20
6.1 Payment of Taxes and Claims.................................... 20
6.2 Maintenance of Properties; Corporate Existence; etc............ 21
6.3 Payment of Notes and Maintenance of Office..................... 22
6.4 Liens.......................................................... 22
6.5 Merger, Consolidation, Transfers of Property, etc.............. 25
6.6 Tangible Net Worth............................................. 26
6.7 Working Capital; Current Ratio................................. 27
6.8 Limitations on Indebtedness.................................... 27
6.9 Current Debt................................................... 30
6.10 Cash Flow Coverage Ratio....................................... 30
6.11 Dividends and Prepayments on Subordinated Debt................. 31
6.12 Capital Expenditures........................................... 32
6.13 Operating Lease Rentals........................................ 32
6.14 Nature of Business............................................. 33
6.15 Transactions with Affiliates................................... 33
6.16 Guaranties of Subsidiaries..................................... 33
6.17 Restricted Investments......................................... 34
6.18 ERISA.......................................................... 34
6.19 Private Offering............................................... 35
6.20 Certain Accounting Matters..................................... 36
7.INFORMATION AS TO COMPANY................................................ 36
7.1 Financial and Business Information............................. 36
7.2 Officer's Certificates......................................... 39
7.3 Accountants' Certificates...................................... 40
7.4 Inspection..................................................... 40
▇.▇▇▇▇▇▇ OF DEFAULT........................................................ 40
8.1 Nature of Events............................................... 40
8.2 Default Remedies............................................... 43
8.3 Annulment of Acceleration of Notes............................. 44
9.INTERPRETATION OF THIS AGREEMENT......................................... 45
9.1 Terms Defined.................................................. 45
9.2 GAAP........................................................... 56
9.3 Directly or Indirectly......................................... 56
9.4 Section Headings and Table of Contents and Construction........ 56
9.5 Governing Law.................................................. 57
10.MISCELLANEOUS........................................................... 57
10.1 Communications................................................ 57
10.2 Reproduction of Documents..................................... 58
10.3 Survival...................................................... 58
10.4 Successors and Assigns........................................ 58
10.5 Amendment and Waiver.......................................... 59
10.6 Expenses...................................................... 60
10.7 Payments on Notes............................................. 60
10.8 Jurisdiction; Service of Process.............................. 61
10.9 Entire Agreement.............................................. 62
10.10 Duplicate Originals, Execution in Counterpart................. 62
TABLE OF CONTENTS (Cont.)
iii
Annex 1 -- Information as to Purchasers
Annex 2 -- Payment Instructions at Closing
Annex 3 -- Information as to Company and Subsidiaries
Annex 4 -- Information as to Business Covenants
Exhibit A -- Form of 6.69% Senior Note Due December 28, 2005
Exhibit B1 -- Form of Company Counsel's Closing Opinion
Exhibit B2 -- Form of Special Counsel's Closing Opinion
Exhibit C -- Form of Company Officer's Certificate
Exhibit D -- Form of Company Secretary's Certificate
Exhibit E -- Form of Subsidiary Guaranty
▇▇▇▇▇▇ FOODS, INC.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
NOTE PURCHASE AGREEMENT
$55,000,000 6.69% SENIOR NOTES DUE DECEMBER 28, 2005
Dated as of December 28, 1995
Employers Life Insurance Company of Wausau
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (▇-▇▇-▇▇)
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
▇▇▇▇▇▇ FOODS, INC. (together with its successors and assigns permitted
pursuant to this Agreement, the "Company"), a Delaware corporation, hereby
agrees with you as follows:
1. PURCHASE AND SALE OF NOTES
1.1 Issuance of Notes.
The Company will authorize the issuance of Fifty-Five Million Dollars
($55,000,000) in aggregate principal amount of its six and sixty-nine
one-hundredths percent (6.69%) Senior Notes due December 28, 2005 (all such
notes, whether initially issued, or issued in exchange or substitution for, any
such note, in each case in accordance with the Note Purchase Agreements,
collectively, the "Notes"). The Notes shall be in the form of Exhibit A, and
shall have the terms as herein and therein provided.
1.2 The Closing.
(a) Purchase and Sale of Notes. The Company hereby agrees to sell to you
and you hereby agree to purchase from the Company, in accordance with the
provisions hereof, the aggregate principal amount of Notes set forth below
your name on Annex 1 at one hundred percent (100%) of the principal amount
thereof.
(b) The Closing. The closing (the "Closing") of the Company's sale of
Notes will be held on December 28, 1995 (the "Closing Date") at 9:00 a.m.,
local time, at the office of Metropolitan Life Insurance Company, One
Madison Avenue, New York, New York. At the Closing, the Company will deliver
to you one or more Notes (as set forth below your name on Annex 1), in the
denominations indicated on Annex 1, in the aggregate principal amount of
your purchase, dated the Closing Date and payable to you or payable as
indicated on Annex 1, against payment by federal funds wire transfer in
immediately available funds of the purchase price thereof, as directed by
the Company on Annex 2, which shall be an account at a bank located in the
United States of America.
(c) Other Purchasers. Contemporaneously with the execution and delivery
hereof, the Company is entering into separate note purchase agreements
identical (except for the name and signature of the purchaser) hereto (such
separate note purchase agreements, together with this Agreement,
collectively and as amended from time to time, the "Note Purchase
Agreements") with each other purchaser (each, an "Other Purchaser" and
collectively, the "Other Purchasers;" you and the Other Purchasers referred
to as the "Purchasers") listed on Annex 1, providing for the sale to each
Other Purchaser of Notes in the aggregate principal amount set forth below
its name on Annex 1. The sales of the Notes to you and to each Other
Purchaser are to be separate sales.
1.3 Purchase for Investment; ERISA.
(a) Purchase for Investment. You represent to the Company that you are
purchasing the Notes, in the aggregate amounts provided herein, for your own
account for investment and with no present intention of distributing the
Notes or any part thereof, but without prejudice to your right at all times
to:
(i) sell or otherwise dispose of all or any part of the Notes under a
registration statement filed under the Securities Act, or in a transaction
exempt from the registration requirements of the Securities Act; and
(ii) have control over the disposition of all of your respective assets
to the fullest extent required by any applicable insurance law.
It is understood that, in making the representations set out in Section 2.14(a)
and Section 2.15(a) of this Agreement, the Company is relying, to the extent
applicable, upon your representations in the immediately preceding sentence.
(b) ERISA. Each of you represent and warrant that, with respect to each
source of funds to be used by you to purchase the Notes on the Closing Date
(respectively, the "Source"), at least one (1) of the following statements
is accurate:
(i) the Source is assets of an insurance company general account and not
assets of an insurance company separate account (within the meaning of
Section 3(17) of ERISA), and that all requirements for an exemption under
Department of Labor Prohibited Transaction Exemption 95-60 (60 F.R. 35925,
July 12, 1995) have been satisfied; provided that in making such
representation you are relying on the Company's representations set forth in
Section 2.12(c), or;
(ii) the Source is a "governmental plan" as defined in Title I, Section
3(32) of ERISA;
(iii) the Source is either (A) an insurance company pooled separate
account, and the purchase is exempt in accordance with Department of Labor
Prohibited Transaction Exemption 90-1 (issued January 29, 1990), or (B) a
bank collective investment fund, in which case the purchase is exempt in
accordance with Department of Labor Prohibited Transaction Exemption 91-38
(issued July 12, 1991);
(iv) the Source is an "investment fund" managed by a qualified
professional asset manager" or "QPAM" (as such terms are defined in Part V
of Department of Labor Prohibited Transaction Exemption 84-14 (issued March
13, 1984)) which QPAM has been identified in writing, and the purchase is
exempt under Department of Labor Prohibited Transaction Exemption 84-14
provided that no other party to the transactions described in this Agreement
and no "affiliate" of such other party (as defined in Section V(c) of
Department of Labor Prohibited Transaction Exemption 84-14) has at the time
of the Closing Date, and has not exercised at any time during the
immediately preceding year, the authority to appoint or terminate said QPAM
as manager of the assets of any "plan" identified in writing pursuant to
this clause (iv) or to negotiate the terms of said QPAM's management
agreement on behalf of such identified "plans;" or
(v) the Source is one or more "plans," or a separate account or trust
fund comprised of one or more "plans," each of which has been identified to
the Company in writing pursuant to this clause (v).
As used in this Section 1.3(b), "plan" or "plans" shall have the meaning set
forth in Title I, section 3(3) of ERISA.
1.4 Failure to Tender, Failure of Conditions.
If at the Closing the Company fails to tender to you the Notes to be purchased
by you at the Closing, or if the conditions specified in Section 3 hereof have
not been fulfilled, you may thereupon elect to be relieved of all further
obligations hereunder. Nothing in this Section 1.4 shall operate to relieve the
Company from any of its obligations hereunder or to waive your respective rights
against the Company.
1.5 Expenses.
(a) Generally. Whether or not the Notes are sold, the Company will
promptly (and in any event within thirty (30) days of receiving any
statement or invoice therefor) pay all fees, expenses and costs relating
hereto, including, but not limited to:
(i) the reasonable cost of reproducing this Agreement, the Notes
and the other documents delivered in connection with the Closing;
(ii) the reasonable fees and disbursements of your special counsel
incurred in connection herewith;
(iii) the reasonable cost of delivering to your home office or
custodian bank, insured to your satisfaction, the Notes purchased by you;
(iv) the reasonable fees, expenses and costs incurred in complying
with each of the conditions to closing set forth in Section 3 hereof; and
(v) the cost of obtaining a private placement number for the
Notes.
(b) Counsel. Without limiting the generality of the foregoing, it is
agreed and understood that the Company will pay, at the Closing, the
statement for reasonable fees and disbursements of your special counsel
presented at the Closing and the Company will also pay, upon receipt of any
statement therefor, each additional statement for reasonable fees and
disbursements of your special counsel rendered after the Closing in
connection with the issuance of the Notes or the matters referred to in
Section 1.5(a) hereof.
(c) Survival. The obligations of the Company under this Section 1.5,
Section 5.4, Section 8.2(e) and Section 10.6 of this Agreement shall survive
the payment of the Notes and the termination hereof.
2. WARRANTIES AND REPRESENTATIONS
To induce you to enter into this Agreement and to purchase the Notes, the
Company warrants and represents, as of the Closing Date, as follows:
2.1 Nature of Business.
The Most Recent 10-K (a copy of which previously has been delivered to you),
correctly describes the general nature of the business and principal Properties
of the Company and the Subsidiaries as of the Closing Date.
2.2 Financial Statements; Indebtedness; Material Adverse Change.
(a) Financial Statements. The Company has provided you and each Other
Purchaser with its financial statements described in Part 2.2(a) of Annex 3
hereto. Such financial statements have been prepared in accordance with GAAP
consistently applied, and present fairly, in all material respects, the
financial position of the Company and its consolidated subsidiaries as of
such dates and the results of their operations and cash flows for such
periods. All such financial statements include the accounts of all
subsidiaries of the Company for the respective periods during which a
subsidiary relationship has existed.
(b) Indebtedness. Part 2.2(b) of Annex 3 hereto lists all Indebtedness
of the Company and the Subsidiaries as of the Closing Date, and provides the
following information with respect to each item of such Indebtedness:
(i) the holder thereof,
(ii) the outstanding amount,
(iii) the portion which is classified as current under GAAP, and
(iv) the collateral securing such Indebtedness, if any.
(c) Material Adverse Change. Since September 30, 1995, there has been no
change in the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company or any of the Subsidiaries, except
changes in the ordinary course of business that, in the aggregate for all
such changes, could not reasonably be expected to have a Material Adverse
Effect.
(d) Other Financial Information. All statements or summaries of
historical and pro forma financial condition and performance of the Company
and the Subsidiaries contained in the Most Recent 10K or described in Part
2.2(a) of Annex 3 have been in all material respects prepared in accordance
with GAAP, unless otherwise expressly noted therein. All assumptions and
estimates upon which any statements of pro forma financial condition or
performance have been based are reasonable in light of the circumstances
existing at the time such assumptions and estimates were made, based on the
best information available to management of the Company and the Subsidiaries
at the time of the preparation thereof. As of the Closing Date, and in light
of the circumstances existing on such date, such assumptions continue to be
reasonable, based on the best information available to the management of the
Company and the Subsidiaries.
2.3 Subsidiaries and Affiliates.
Part 2.3 of Annex 3 hereto sets forth:
(a) the name of each of the Subsidiaries, its jurisdiction of
incorporation and the percentage of its Voting Stock owned by the Company
and each other Subsidiary, and
(b) a description of the Affiliates (other than individuals) and the
nature of their affiliation.
Each of the Company and the Subsidiaries has good and marketable title to all of
the shares it purports to own of the stock of each Subsidiary, free and clear in
each case of any Lien. All such shares have been duly issued and are fully paid
and nonassessable.
2.4 Title to Properties; Leases; Patents, Trademarks, etc.
(a) Each of the Company and the Subsidiaries has good and marketable
title to all of the real Property, and good title to all of the other
Property, reflected in the most recent balance sheet referred to in Section
2.2(a) hereof (except as sold or otherwise disposed of in the ordinary
course of business), except where the failure to have such good and
marketable title (i) is immaterial to such financial statements, and (ii)
could not reasonably be expected to have a Material Adverse Effect. All such
Property is free from Liens not permitted by Section 6.4 hereof.
(b) Each of the Company and the Subsidiaries has complied with all
material obligations under all leases to which it is a party, except where
the failure to so comply could not reasonably be expected to have a Material
Adverse Effect. All such leases are in full force and effect and each of the
Company and the Subsidiaries enjoys peaceful and undisturbed possession
under all such leases.
(c) Each of the Company and the Subsidiaries owns, possesses or has the
right to use all of the patents, trademarks, service marks, trade names,
copyrights and licenses, and rights with respect thereto, necessary for the
present and currently planned future conduct of its business, without any
known conflict with the rights of others, except for such failures to own,
possess, or have the right to use, that, in the aggregate for all such
failures, could not reasonably be expected to have a Material Adverse
Effect.
2.5 Taxes.
(a) Returns Filed; Taxes Paid.
(i) All tax returns required to be filed by the Company and each
Subsidiary and any other Person with which the Company or any Subsidiary
files or has filed a consolidated return in any jurisdiction have been filed
on a timely basis, and all taxes, assessments, fees and other governmental
charges upon the Company, such Subsidiary and any such Person, and upon any
of their respective Properties, income or franchises, that are due and
payable have been paid, except for such tax returns and such tax payments
which are being contested in good faith and which could not, in the
aggregate for all such tax returns and payments, reasonably be expected to
have a Material Adverse Effect.
(ii) All liabilities of each of the Company, the Subsidiaries and
the other Persons referred to in the preceding clause (i) with respect to
federal income taxes have been finally determined except for the fiscal
years set forth in Part 2.5(a) of Annex 3 hereto, the only years not closed
by the completion of an audit or the expiration of the statute of
limitations.
(b) Book Provisions Adequate.
(i) The amount of the liability for taxes reflected in each of the
balance sheets referred to in Section 2.2(a) hereof is in each case an
adequate provision for taxes as of the dates of such balance sheets
(including, without limitation, any payment due pursuant to any tax sharing
agreement) as are or may become payable by any one or more of the Company
and the other Persons consolidated with the Company in such financial
statements in respect of all tax periods ending on or prior to such dates.
(ii) The Company does not know of any proposed additional tax
assessment against it or any such Person that is not reflected in full in
the most recent balance sheet referred to in Section 2.2(a) hereof.
2.6 Pending Litigation.
(a) There are no proceedings, actions or investigations pending or, to
the knowledge of the Company, threatened against or affecting the Company or
any Subsidiary in any court or before any Governmental Authority or
arbitration board or tribunal that, in the aggregate for all such
proceedings, actions and investigations, could reasonably be expected to
have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default with respect to
any judgment, order, writ, injunction or decree of any court, Governmental
Authority, arbitration board or tribunal that, in the aggregate for all such
defaults, could reasonably be expected to have a Material Adverse Effect.
2.7 Full Disclosure.
The financial statements referred to in Section 2.2(a) hereof do not, nor does
this Agreement, the Most Recent 10-K or any statement furnished by or on behalf
of the Company to you in connection with the negotiation or any closing of any
sale of the Notes, contain any untrue statement of a material fact or omit a
material fact necessary to make the statements contained therein and herein not
misleading. There is no fact that the Company has not disclosed to you in
writing that has had or, so far as the Company can now reasonably foresee, could
reasonably be expected to have a Material Adverse Effect.
2.8 Corporate Organization and Authority.
Each of the Company and the Subsidiaries:
(a) is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
(b) has all legal and corporate power and authority to own and operate
its Properties and to carry on its business as now conducted and as
presently proposed to be conducted;
(c) has all licenses, certificates, permits, franchises and other
governmental authorizations necessary to own and operate its Properties and
to carry on its business as now conducted and as presently proposed to be
conducted, except where the failure to have such licenses, certificates,
permits, franchises and other governmental authorizations, in the aggregate
for all such failures, could not reasonably be expected to have a Material
Adverse Effect; and
(d) has duly qualified or has been duly licensed, and is authorized to
do business and is in good standing, as a foreign corporation, in each state
(each of which states is listed in Part 2.8(d) of Annex 3 hereto) where the
failure to be so qualified or licensed and authorized and in good standing,
in the aggregate for all such failures, could reasonably be expected to have
a Material Adverse Effect.
2.9 Charter Instruments, Other Agreements, etc.
(a) Charter Instruments. Neither the Company nor any Subsidiary is in
violation in any respect of any term of any charter instrument or bylaw.
(b) Agreements Relating to Indebtedness. Neither the Company nor any
Subsidiary is in violation of any term in, and no default or event of
default exists under, any agreement or other instrument to which it is a
party or by which it or any of its Properties may be bound relating to, or
providing the terms of, any Indebtedness specified in Part 2.2(b) of Annex 3
hereto having a principal or stated amount equal to or in excess of Two
Hundred Fifty Thousand Dollars ($250,000).
(c) Other Agreements. Neither the Company nor any Subsidiary is in
violation of any term in, and no default or event of default exists under,
any agreement or other instrument to which it is a party or by which it or
any of its Properties may be bound (other than the agreements and other
instruments specified in clause (b) of this Section 2.9), which, in the
aggregate for all such violations, could reasonably be expected to have a
Material Adverse Effect.
2.10 Restrictions on Company and Subsidiaries.
Neither the Company nor any Subsidiary:
(a) is a party to any contract or agreement, or subject to any charter
or other corporate restriction that, in the aggregate for all such
contracts, agreements, charters and corporate restrictions, could reasonably
be expected to have a Material Adverse Effect;
(b) is a party to any contract or agreement that restricts the right or
ability of such corporation to incur Indebtedness, other than this Agreement
and the agreements listed in Part 2.10(b) of ▇▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇▇▇ of which
restricts the issuance and sale of the Notes or the performance by the
Company of its obligations under this Agreement or under the Notes; or
(c) has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its Property, whether now
owned or hereafter acquired, to be subject to a Lien not permitted by
Section 6.4 hereof.
True, correct and complete copies of each of the agreements listed in Part
2.10(b) of Annex 3 hereto have been provided to you and your special counsel.
2.11 Compliance with Law.
Neither the Company nor any Subsidiary is in violation of any law,
ordinance, governmental rule or regulation to which it is subject, which
violations, in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
2.12 ERISA.
(a) Prohibited Transactions. Neither the execution of this Agreement,
the purchase of the Notes by you nor the consummation of the transactions
contemplated by this Agreement will constitute a "prohibited transaction"
(as such term is defined in section 406(a) of ERISA) or result in a tax
under section 4975 of the IRC. The representation by the Company in the
preceding sentence is made in reliance upon your respective representations
in Section 1.3(b) hereof as to the source of funds to be used by you to
purchase the Notes.
(b) Pension Plans.
(i) Compliance with ERISA. The Company and the ERISA Affiliates are
in compliance with ERISA, except for such failures to comply that, in the
aggregate for all such failures, could not reasonably be expected to have a
Material Adverse Effect.
(ii) Funding Status; Relationship of Vested Benefits to Pension Plan
Assets.
(A) No "accumulated funding deficiency" (as defined in section
302 of ERISA and section 412 of the IRC), whether or not waived, exists with
respect to any Pension Plan.
(B) The present value of all benefits, determined as of the
most recent valuation date for such benefits as provided in Section 6.18
hereof, vested under each Pension Plan does not exceed the value of the
assets of such Pension Plan allocable to such vested benefits, determined as
of such date as provided in Section 6.18 hereof.
(iii) PBGC. No liability to the PBGC has been or is expected to be
incurred by the Company or any ERISA Affiliate with respect to any Pension
Plan that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect. No circumstance exists that constitutes
grounds under section 4042 of ERISA entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, any Pension
Plan or trust created thereunder, nor has the PBGC instituted any such
proceeding.
(iv) Multiemployer Plans. Neither the Company nor any ERISA
Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan.
There have been no "reportable events" (as such term is defined in section
4043 of ERISA) with respect to any Multiemployer Plan that could result in
the termination of such Multiemployer Plan and give rise to a liability of
the Company or any ERISA Affiliate in respect thereof.
(c) Disclosure. Part 2.12(c) of Annex 3 sets forth all ERISA Affiliates
and all "employee benefit plans" with respect to which the Company or any
"affiliate" of the Company is a "party-in-interest" or in respect of which
the Notes could constitute an "employer security" ("employee benefit plan"
and "party-in-interest" having the meanings specified in section 3 of ERISA
and "affiliate" and "employer security" having the meanings specified in
section 407(d) of ERISA).
2.13 Certain Laws.
(a) Environmental Protection Laws.
(i) Compliance. Each of the Company and the Subsidiaries is in
compliance with all Environmental Protection Laws in effect in each
jurisdiction where it is presently doing business and in which the failure
so to comply, in the aggregate for all such failures, could reasonably be
expected to have a Material Adverse Effect.
(ii) Liability. Neither the Company nor any Subsidiary is subject to
any liability under any Environmental Protection Law that, in the aggregate
for all such liabilities, could reasonably be expected to have a Material
Adverse Effect.
(iii) Notices. Neither the Company nor any Subsidiary has received
any:
(A) notice from any Governmental Authority by which any of
its present or previously-owned or leased Properties has been identified in
any manner by any Governmental Authority as a hazardous substance disposal
or removal site, "Super Fund" clean-up site or candidate for removal or
closure pursuant to any Environmental Protection Law;
(B) notice of any Lien arising under or in connection with
any Environmental Protection Law that has attached to any revenues of, or
to, any of its owned or leased Properties; or
(C) communication, written or oral, from any Governmental
Authority concerning any action or omission by the Company or such
Subsidiary in connection with its ownership or leasing of any Property
resulting in the release of any Hazardous Substance or resulting in any
violation of any Environmental Protection Law;
where the effect of which, in the aggregate for all such notices and
communications, could reasonably be expected to have a Material Adverse Effect.
(b) Health Laws.
(i) Compliance. Each of the Company and the Subsidiaries is in
compliance with all Health Laws in effect in each jurisdiction where it is
presently doing business and in which the failure so to comply, in the
aggregate for all such failures, could reasonably be expected to have a
Material Adverse Effect.
(ii) Liability. Neither the Company nor any Subsidiary is subject to
any liability under any Health Law that, in the aggregate for all such
liabilities, could reasonably be expected to have a Material Adverse Effect.
(iii) Notices. Neither the Company nor any Subsidiary has received
any notice from any Governmental Authority concerning any actual or alleged
violation of any Health Law where the effect of which, in the aggregate for
all such notices and communications, could reasonably be expected to have a
Material Adverse Effect.
2.14 Transactions are Legal and Authorized; Obligations are Enforceable.
(a) Transactions are Legal and Authorized. Each of the issuance, sale
and delivery of the Notes by the Company, the execution and delivery of this
Agreement by the Company, and compliance by the Company with all of the
provisions of this Agreement and of the Notes:
(i) is within the corporate powers of the Company; and
(ii) is legal and does not conflict with, result in any breach of
any of the provisions of, constitute a default under, or result in the
creation of any Lien upon any Property of the Company or any Subsidiary
under the provisions of, any agreement, charter instrument, bylaw or other
instrument to which any such Person is a party or by which any such Person
or any of such Person's respective Properties may be bound.
(b) Obligations are Enforceable. Each of this Agreement and the Notes
have been duly authorized by all necessary action on the part of the
Company, have been duly executed and delivered by authorized officers of the
Company and constitute legal, valid and binding obligations of the Company,
enforceable in accordance with their respective terms except that the
enforceability of this Agreement and of the Notes may be:
(i) limited by applicable bankruptcy, reorganization, arrangement,
insolvency, moratorium or other similar laws affecting the enforceability of
creditors' rights generally; and
(ii) subject to the availability of equitable remedies.
2.15 Governmental Consent; Certain Laws.
(a) Governmental Consent. Neither the nature of the Company or any
Subsidiary, or of any of their respective businesses or Properties, nor any
relationship between the Company or any Subsidiary and any other Person, nor
any circumstance in connection with the offer, issuance, sale or delivery of
the Notes and the execution and delivery of this Agreement, is such as to
require a consent, approval or authorization of, or filing, registration or
qualification with, any Governmental Authority on the part of the Company or
any Subsidiary as a condition to the execution and delivery of this
Agreement or the offer, issuance, sale or delivery of the Notes.
(b) Certain Laws. Neither the Company nor any Subsidiary is subject to
regulation under, or otherwise required to comply with any filing,
registration or notice provisions of, (i) the Investment Company Act of
1940, as amended, (ii) the Public Utility Holding Company Act of 1935, as
amended, (iii) the Transportation Acts (49 U.S.C.), as amended, or (iv) the
Federal Power Act, as amended, except that ▇▇▇▇ is subject to regulation
under the Transportation Acts (49 U.S.C.), as amended.
2.16 Private Offering of Notes.
Neither the Company nor any Subsidiary has offered any of the Notes or any
similar Security of the Company for sale to, or solicited offers to buy any
thereof from, or otherwise approached or negotiated with respect thereto with,
any prospective purchaser other than you and four (4) other Institutional
Investors, each of whom was offered all or a portion of the Notes at private
sale for investment.
2.17 No Defaults; Transactions Prior to Closing Date, etc.
(a) No event has occurred and no condition exists that, upon the
execution and delivery of this Agreement or the issuance of the Notes, would
constitute a Default or an Event of Default.
(b) Except as disclosed in Part 2.17(b) of Annex 3 hereto, neither the
Company nor any Subsidiary entered into any transaction during the period
beginning on September 30, 1995 and ending on the Closing Date that would
have been prohibited by Section 6.5, Section 6.11, Section 6.12 or Section
6.15 hereof had such Sections applied during such period.
2.18 Use of Proceeds of Notes.
(a) Use of Proceeds. The Company will generally apply the proceeds from
the sale of the Notes to finance Capital Expenditures of the Company.
(b) Margin Securities. None of the transactions contemplated herein and
in the Notes (including, without limitation, the use of the proceeds from
the sale of the Notes) violates, will violate or will result in a violation
of section 7 of the Exchange Act or any regulations issued pursuant thereto,
including, without limitation, Regulations G, T, U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R., Chapter II. The
obligations of the Company under this Agreement and the Notes are not and
will not be directly or indirectly secured (within the meaning of such
Regulation G) by any Margin Security, and no Notes are being sold on the
basis of any such collateral.
(c) Absence of Foreign or Enemy Status. Neither the sale of the Notes
nor the use of proceeds from the sale thereof will result in a violation of
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended), or any ruling issued
thereunder or any enabling legislation or Presidential Executive Order in
connection therewith.
2.19 Solvency.
The fair value of the business and assets of the Company is in excess of the
amount that will be required to pay its liabilities (including, without
limitation, contingent, subordinated, unmatured and unliquidated liabilities on
existing debts, as such liabilities may become absolute and matured), in each
case both prior to and after giving effect to the transactions contemplated by
this Agreement and the Notes. After giving effect to the transactions
contemplated by this Agreement and the Notes, the Company will not be engaged in
any business or transaction, or about to engage in any business or transaction,
for which it has unreasonably small capital, and the Company has or had no
intent to hinder, delay or defraud any entity to which it is, or will become, on
or after the Closing Date, indebted or to incur debts that would be beyond its
ability to pay as such debts mature.
3. CLOSING CONDITIONS
Your obligation to purchase and pay for the Notes at the Closing are subject to
the following conditions precedent:
3.1 Opinions of Counsel.
You shall have received from
(a) ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Company, and
(b) ▇▇▇▇ & ▇▇▇▇▇▇, a Professional Corporation, your special counsel,
closing opinions, each dated the Closing Date, substantially in the respective
forms set forth in Exhibit B1 and Exhibit B2 hereto and as to such other matters
as you may reasonably request. This Section 3.1 shall constitute direction by
the Company to such counsel named in the foregoing clause (a) to deliver such
closing opinion to you.
3.2 Warranties and Representations True.
The warranties and representations contained in Section 2 hereof shall be true
on the Closing Date with the same effect as though made on and as of that date.
3.3 Officers' Certificates.
You shall have received:
(a) a certificate dated the Closing Date and signed by a Senior Officer
of the Company, substantially in the form of Exhibit C hereto; and
(b) a certificate dated the Closing Date and signed by the Secretary or
an Assistant Secretary of the Company, substantially in the form of Exhibit
D hereto.
3.4 Good Standing Certificate.
You shall have received a certificate, dated on or immediately prior to the
Closing Date, from the Secretary of State (or other appropriate official) of
Delaware, certifying as to the due incorporation and good standing of the
Company.
3.5 Legality.
The Notes to be acquired by you shall, on the Closing Date, qualify as a legal
investment for you under applicable insurance law (without regard to any
"basket" or "leeway" provisions), and such acquisition shall not subject you to
any penalty or other onerous condition contained in or pursuant to any such law
or regulation, and you shall have received such evidence as you may reasonably
request to establish compliance with this condition.
3.6 Private Placement Number.
The Company shall have obtained or caused to be obtained a private placement
number for the Notes from the CUSIP Service Bureau of Standard & Poor's (a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc.) and you shall have been informed of such private
placement number.
3.7 Expenses.
All fees and disbursements required to be paid pursuant to Section 1.5(b) hereof
shall have been paid in full.
3.8 Compliance with this Agreement.
Each of the Company and the Subsidiaries shall have performed and complied with
all agreements and conditions contained herein that are required to be performed
or complied with by the Company and the Subsidiaries on or prior to the Closing
Date, and such performance and compliance shall remain in effect on the Closing
Date.
3.9 Other Purchasers
None of the Other Purchasers shall have failed to execute and deliver a Note
Purchase Agreement or to accept delivery of or make payment for the Notes to be
purchased by it on the Closing Date.
3.10 Proceedings Satisfactory.
All proceedings taken in connection with the issuance and sale of the Notes and
all documents and papers relating thereto shall be satisfactory to you and your
special counsel. You and your special counsel shall have received, in a timely
manner, copies of such documents and papers as you or they may request in
connection therewith or in connection with your special counsel's closing
opinion, all in form and substance satisfactory to you and your special counsel.
4. PAYMENTS
4.1 Mandatory Interest and Principal Prepayments.
(a) Interest. Interest on the Notes shall be computed and paid in the
manner and on the dates provided in the Notes.
(b) Principal. The Company shall pay, and there shall become due and
payable, Seven Million Eight Hundred Fifty-Seven Thousand One Hundred
Forty-Two and 86/100 Dollars ($7,857,142.86) in principal amount of the
Notes on December 28 in each year beginning on December 28, 1999, and ending
on December 28, 2004, inclusive (each, a "Required Principal Prepayment").
Each Required Principal Prepayment shall be at one hundred percent (100%) of
the principal amount paid, together with interest accrued thereon to the
date of payment. The entire principal of the Notes remaining outstanding on
December 28, 2005, together with interest accrued thereon, shall become due
and payable on December 28, 2005.
4.2 Optional Prepayments.
(a) Optional Prepayments. The Company may, at any time and from time to
time, prepay the principal amount of the Notes in part, in integral
multiples of One Million Dollars ($1,000,000), or in whole, in each case
together with:
(i) an amount equal to the Make-Whole Amount on such date in respect
of the principal amount of the Notes being so prepaid; and
(ii) interest on such principal amount then being prepaid accrued to
the prepayment date.
(b) Notice of Optional Prepayment. The Company will give notice of any
optional prepayment of the Notes to each holder of Notes not less than
thirty (30) days or more than sixty (60) days before the date fixed for
prepayment, specifying:
(i) such date;
(ii) that such prepayment is to be made pursuant to Section 4.2 of
this Agreement;
(iii) the principal amount of each Note to be prepaid on such date;
(iv) the interest to be paid on each such Note, accrued to the date
fixed for payment; and
(v) the calculation of an estimated Make-Whole Amount, if any
(calculated as if the date of such notice was the date of prepayment), due
in connection with such prepayment, accompanied by a copy of any applicable
documentation used in connection with determining the Make-Whole Discount
Rate in respect of such prepayment.
Notice of prepayment having been so given, the aggregate principal amount of the
Notes to be prepaid specified in such notice, together with the Make-Whole
Amount as of the specified prepayment date with respect thereto, if any, and
accrued interest thereon shall become due and payable on the specified
prepayment date. Two (2) Business Days prior to the making of such prepayment,
the Company shall deliver to each holder of Notes by facsimile transmission a
certificate of a Senior Financial Officer specifying the details of the
calculation of such Make-Whole Amount as of the specified prepayment date,
accompanied by a copy of any applicable documentation used in connection with
determining the Make-Whole Discount Rate in respect of such prepayment.
(c) Application of Prepayments. Upon any partial prepayment of the Notes
pursuant to this Section 4.2, the principal amount of Notes so prepaid shall
be applied to the Required Principal Prepayments with respect to such Notes,
and to the payment at maturity of such Notes, as provided in Section 4.1
hereof, in the inverse order of the due date of such payments.
4.3 Offer to Prepay upon Change in Control.
(a) Notice and Offer. In the event of either
(i) a Change in Control, or
(ii) the obtaining of knowledge of a Control Event by any officer of
the Company or any Subsidiary (including, without limitation, via the
receipt of notice of a Control Event from any holder of Notes), the Company
will, within three (3) Business Days of the occurrence of either of such
events, give written notice of such Change in Control or Control Event to
each holder of Notes by certified mail (with a copy thereof sent via an
overnight courier of national reputation) and, simultaneously with the
sending of such written notice, give telephonic advice of such Change in
Control or Control Event to an investment officer or other similar
representative or agent of each such holder specified on Annex 1 hereto at
the telephone number specified thereon, or to such other Person at such
other telephone number as any holder of a Note may specify to the Company in
writing.
In the event of a Change in Control, such written notice shall contain, and such
written notice shall constitute, an irrevocable offer to prepay all, but not
less than all, the Notes held by such holder on a date specified in such notice
(the "Control Prepayment Date") that is not less than thirty (30) days and not
more than sixty (60) days after the date of such notice. If the Control
Prepayment Date shall not be specified in such notice, the Control Prepayment
Date shall be the thirtieth (30th) day after the date of posting of such notice.
If the Company shall not have received a written response to such notice from
each holder of Notes within ten (10) days after the date of posting of such
notice to such holder of Notes, then the Company shall immediately send a second
written notice via an overnight courier of national reputation to each such
holder of Notes who shall have not previously responded to the Company, which
notice shall also specify the Control Prepayment Date.
(b) Acceptance and Payment. To accept or reject such offered prepayment,
a holder of Notes shall cause a notice of such acceptance or rejection to be
delivered to the Company on or prior to the fifteenth (15th) day after the
date of receipt by such holder of the latest written offer of such
prepayment (the "Offer Determination Date"). If so accepted, such offered
prepayment shall be due and payable on the Control Prepayment Date. Such
offered prepayment shall be made at one hundred percent (100%) of the
principal amount of such Notes, together with any Make-Whole Amount as of
the Control Prepayment Date with respect thereto and interest on the Notes
then being prepaid accrued to the Control Prepayment Date. If a holder of
Notes shall not have responded to such offered prepayment on or prior to the
Offer Determination Date, such holder shall be deemed to have accepted such
offered prepayment.
(c) Officer's Certificate. Each offer to prepay the Notes pursuant to
this Section 4.3 shall be accompanied by a certificate, executed by a Senior
Officer of the Company and dated the date of such offer, specifying:
(i) the Control Prepayment Date;
(ii) that such offer is made pursuant to Section 4.3 of this
Agreement;
(iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each such Note offered to be
prepaid, accrued to the date fixed for payment;
(v) the calculation of an estimated Make-Whole Amount, if any
(calculated as if the date of such notice was the date of prepayment), that
would be due in connection with such offered prepayment, accompanied by a
copy of any applicable documentation used in connection with determining the
Make-Whole Discount Rate in respect of such prepayment; and
(vi) in reasonable detail, the nature and date or proposed date of
the Change in Control.
Each such notice shall also contain a legend specifying that such holder shall
be deemed to have accepted such offered prepayment if such holder shall not have
responded to such offer on or prior to the fifteenth (15th) day following such
holder's receipt of such notice.
(d) Effect of Prepayment. Each partial prepayment of the principal of
the Notes made pursuant to this Section 4.3 shall be applied against and
reduce each of the then remaining Required Principal Prepayments of the
Notes and the payment of principal due at maturity by a percentage equal to
the aggregate principal amount of the Notes so prepaid divided by the
aggregate principal amount of the Notes outstanding immediately prior to
such prepayment.
(e) Notice Concerning Status of Holders of Notes. Promptly after each
Control Prepayment Date and the making of all prepayments contemplated on
such Control Prepayment Date under this Section 4.3 (and, in any event,
within thirty (30) days thereafter), the Company shall deliver to each
remaining holder of Notes a certificate signed by a Senior Officer of the
Company containing a list of the then current holders of Notes (together
with their addresses) and setting forth as to each such holder the
outstanding principal amount of Notes held by each such holder at such time.
4.4 Pro Rata Payments.
(a) Required Principal Prepayments. If at the time any Required
Principal Prepayment or the payment of principal due at maturity with
respect to the Notes is required to be made pursuant to Section 4.1 hereof,
there is more than one Note outstanding, the aggregate principal amount of
each such Required Principal Prepayment or such payment due at maturity (as
the case may be) shall be allocated among the Notes at the time outstanding
in proportion, as nearly as practicable, to the respective unpaid principal
amounts of the Notes then outstanding, with adjustments, to the extent
practicable, to equalize for any prior prepayments not in such proportion.
(b) Optional Prepayments. If at the time any prepayment under Section
4.2 hereof is due and there is more than one Note outstanding, the aggregate
principal amount of each such prepayment of the Notes shall be allocated
among the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts of the Notes then
outstanding.
4.5 Notation of Notes on Prepayment.
Upon any partial prepayment of a Note, such Note may, at the option of the
holder thereof, be (but shall not be required to be):
(a) surrendered to the Company pursuant to Section 5.2 hereof in
exchange for a new Note in a principal amount equal to the principal amount
remaining unpaid on the surrendered Note;
(b) made available to the Company for notation thereon of the portion of
the principal so prepaid; or
(c) marked by such holder with a notation thereon of the portion of the
principal so prepaid.
In case the entire principal amount of any Note has been paid, such Note shall
be surrendered to the Company for cancellation and shall not be reissued, and no
Note shall be issued in lieu of the paid principal amount of any Note.
4.6 No Other Optional Prepayments; No Acquisition of Notes.
Except for prepayments made in accordance with this Section 4, the Company may
not make any prepayment of principal in respect of the Notes. The Company will
not, and will not permit any Subsidiary or any Affiliate to, directly or
indirectly, acquire or make any offer to acquire any Notes.
5. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES
5.1 Registration of Notes.
The Company will cause to be kept at its office maintained pursuant to Section
6.3 hereof a register for the registration and transfer of Notes. The name and
address of each holder of one or more Notes, the outstanding principal amount of
each such Note, each transfer thereof and the name and address of each
transferee of one or more Notes shall be registered in such register. The Person
in whose name any Note shall be registered shall be deemed and treated as the
owner and holder thereof for all purposes hereof and the Company shall not be
affected by any notice or knowledge to the contrary.
5.2 Exchange of Notes.
(a) Upon surrender of any Note at the office of the Company maintained
pursuant to Section 6.3 hereof duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note
or such holder's attorney duly authorized in writing, the Company will
execute and deliver, at the Company's expense (except as provided below),
new Notes in exchange therefor, in denominations of at least One Hundred
Thousand Dollars ($100,000) (except as may be necessary to reflect any
principal amount not evenly divisible by One Hundred Thousand Dollars
($100,000)), in an aggregate principal amount equal to the unpaid principal
amount of the surrendered Note. Each such new Note shall be payable to such
Person as such holder may request and shall be substantially in the form of
Exhibit A hereto. Each such new Note shall be dated and bear interest from
the date to which interest shall have been paid on the surrendered Note or
dated the date of the surrendered Note if no interest shall have been paid
thereon. The Company may require payment of a sum sufficient to cover any
stamp tax or governmental charge imposed in respect of any such transfer of
Notes.
(b) The Company will pay the cost of delivering to or from such holder's
home office or custodian bank from or to the Company, insured to the
reasonable satisfaction of such holder, the surrendered Note and any Note
issued in substitution or replacement for the surrendered Note.
(c) Each holder of Notes agrees that, in the event it shall sell or
transfer any Note without surrendering such Note to the Company as set forth
in Section 5.2(a) hereof, it shall:
(i) prior to the delivery of such Note, make a notation thereon of
all principal, if any, paid on such Note and shall also indicate thereon the
date to which interest shall have been paid on such Note; and
(ii) promptly notify the Company of the name and address of the
transferee of any such Note so transferred and the effective date of such
transfer.
5.3 Replacement of Notes.
Upon receipt by the Company of evidence reasonably satisfactory to it of the
ownership of and the loss, theft, destruction or mutilation of any Note (which
evidence shall be, in the case of an Institutional Investor, notice from such
Institutional Investor of such ownership (or of ownership by such Institutional
Investor's nominee) and of such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to the Company (provided that if the holder of such Note is an
Institutional Investor or a nominee of such Institutional Investor, such
Institutional Investor's own unsecured agreement of indemnity shall be
deemed to be satisfactory for such purpose), or
(b) in the case of mutilation, upon surrender and cancellation thereof,
the Company at its own expense will execute and deliver, in lieu thereof, a
new Note, dated and bearing interest from the date to which interest shall
have been paid on such lost, stolen, destroyed or mutilated Note or dated
the date of such lost, stolen, destroyed or mutilated Note if no interest
shall have been paid thereon.
5.4 Issuance Taxes.
The Company will pay all taxes (if any) due in connection with and as the result
of the initial issuance and sale of the Notes and in connection with any
modification of this Agreement or the Notes and shall save each holder of Notes
harmless without limitation as to time against any and all liabilities with
respect to all such taxes. The obligations of the Company under this Section 5.4
shall survive the payment or prepayment of the Notes and the termination of this
Agreement.
6. COVENANTS
The Company covenants that on and after the Closing Date and so long as any of
the Notes shall be outstanding:
6.1 Payment of Taxes and Claims.
The Company will, and will cause each Subsidiary to, pay before they become
delinquent:
(a) all taxes, assessments and governmental charges or levies imposed
upon it or its Property; and
(b) all claims or demands of materialmen, mechanics, carriers,
warehousemen, vendors, landlords and other like Persons that, if unpaid,
might result in the creation of a Lien upon its Property; provided, that
items of the foregoing description need not be paid
(i) while being actively contested in good faith and by appropriate
proceedings as long as adequate book reserves have been established and
maintained and exist with respect thereto, and
(ii) so long as the title of the Company or the other Subsidiary, as
the case may be, to, and its right to use, such Property, is not materially
adversely affected thereby.
In the case of any such item being contested as described in the immediately
preceding sentence (other than the item described in Part 6.1 of Annex 4 hereto)
involving in excess of Two Million Dollars ($2,000,000), the appropriateness of
the proceedings will be supported by an opinion of the independent counsel
responsible for such proceedings and the adequacy of such reserves will be
supported by an opinion of the independent accountants of the Company or such
Subsidiary (which opinions will be delivered to the Purchasers and the other
holders of Notes as provided in Section 7.1(c) hereof), provided that, if the
aggregate amount of all such items shall at any time exceed Three Million
Dollars ($3,000,000), regardless of the amount of any individual item, the
adequacy of the reserves for all such items will be supported by opinions of the
independent accountants of the Company or such Subsidiary (which opinions will
be delivered to the Purchasers and the other holders of the Notes as provided in
Section 7.1(c) hereof).
6.2 Maintenance of Properties; Corporate Existence; etc.
The Company will, and will cause each Subsidiary to:
(a) Property -- maintain its Property in good condition and working
order, ordinary wear and tear excepted, and make all necessary renewals,
replacements, additions, betterments and improvements thereto;
(b) Insurance -- maintain, with financially sound and reputable insurers
accorded a rating by A.M. Best Company of "A" or better and a size rating of
"XII" or better (or a comparable rating by any comparable successor rating
agency), insurance with respect to its Property and business against such
casualties and contingencies, of such types (including, without limitation,
insurance with respect to losses arising out of Property loss or damage,
public liability, business interruption, larceny, workers' compensation,
embezzlement or other criminal misappropriation) and in such amounts as is
customary in accordance with sound business practices in the case of
corporations of established reputations engaged in the same or a similar
business and similarly situated;
(c) Financial Records -- keep accurate and complete books of records and
accounts in which accurate and complete entries shall be made of all its
business transactions and that will permit the provision of accurate and
complete financial statements in accordance with GAAP;
(d) Corporate Existence and Rights --
(i) do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence, rights (charter and
statutory) and franchises, except where the failure to do so, in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect, and
(ii) maintain each Subsidiary as a Subsidiary and each Wholly-Owned
Subsidiary as a Wholly-Owned Subsidiary,
in each case except as permitted by Section 6.5 hereof; and
(e) Compliance with Law -- not be in violation of any law, ordinance or
governmental rule or regulation to which it is subject (including, without
limitation, any Environmental Protection Law or any Health Law) and not fail
to obtain any license, certificate, permit, franchise or other governmental
authorization necessary to the ownership of its Properties or to the conduct
of its business if such violations or failures to obtain, in the aggregate,
could reasonably be expected to have (i) a Material Adverse Effect or (ii) a
material adverse effect on the ability of the Company or any Subsidiary to
conduct in the future the business it conducts at the time of such violation
or failure to obtain.
6.3 Payment of Notes and Maintenance of Office.
The Company will punctually pay, or cause to be paid, the principal of and
interest (and Make-Whole Amount, if any) on the Notes, as and when the same
shall become due according to the terms of this Agreement and of the Notes. The
Company will maintain an office at the address of the Company set forth in
Section 10.1 hereof where notices, presentations and demands in respect of this
Agreement or of the Notes may be made upon the Company. Such office will be
maintained at such address until such time as the Company shall notify the
Purchasers and the other holders of the Notes of any change of location of such
office, which will in any event be located within the United States of America.
6.4 Liens.
(a) Negative Pledge. The Company will not, and will not permit any
Subsidiary to, cause or permit to exist, or agree or consent to cause or
permit to exist in the future (upon the happening of a contingency or
otherwise), any of its Property, whether now owned or hereafter acquired, to
be subject to any Lien except:
(i) Taxes, etc. -- Liens securing Property taxes, assessments or
governmental charges or levies or the claims or demands of materialmen,
mechanics, carriers, warehousemen, vendors, landlords and other like
Persons, so long as
(A) the payment thereof is being actively contested in good
faith and by appropriate proceedings and adequate book reserves have been
established and maintained and exist with respect thereto, and
(B) the title of the Company or the Subsidiary, as the case may
be, to, and its right to use, such Property, is not materially adversely
affected thereby;
(ii) Judicial Liens -- Liens
(A) arising from judicial attachments and judgments,
(B) securing appeal bonds or supersedeas bonds, and
(C) arising in connection with court proceedings (including,
without limitation, surety bonds and letters of credit or any other
instrument serving a similar purpose),
provided that (1) the execution or other enforcement of such Liens is
effectively stayed, (2) the claims secured thereby are being actively contested
in good faith and by appropriate proceedings, (3) adequate book reserves shall
have been established and maintained and shall exist with respect thereto and
(4) the aggregate amount so secured shall not at any time exceed Two Million
Dollars ($2,000,000);
(iii) Ordinary Course Business Liens -- Liens incurred or deposits
made in the ordinary course of business
(A) in connection with workers' compensation, unemployment
insurance, social security and other like laws, and
(B) to secure the performance of letters of credit, bids,
tenders, sales contracts, leases, statutory obligations, surety and
performance bonds (of a type other than set forth in Section 6.4(a)(ii)
hereof) and other similar obligations not incurred in connection with the
borrowing of money, the obtaining of advances or the payment of the deferred
purchase price of Property;
provided, however, that all such Liens do not, in the aggregate, materially
detract from the value of such Property or materially interfere with the use of
such Property in the ordinary conduct of the business of the Company and the
Subsidiaries, taken as a whole;
(iv) Certain Encumbrances -- Liens in the nature of reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other similar title exceptions or encumbrances
affecting real Property, provided that such exceptions and encumbrances do
not in the aggregate materially detract from the value of such Properties or
materially interfere with the use of such Property in the ordinary conduct
of the business of the Company and the Subsidiaries, taken as a whole;
(v) Intergroup Liens -- Liens on Property of a Subsidiary, provided
that such Liens secure only obligations owing to the Company;
(vi) Closing Date Liens --
(A) Liens in existence on the Closing Date securing
Indebtedness, provided that such Liens and such Indebtedness are described
in Part 6.4(a)(vi) of Annex 4 hereto; and
(B) Liens securing renewals, extensions (as to time) and
refinancings of Indebtedness secured by the Liens described in Part
6.4(a)(vi) of Annex 4 hereto, provided that
(1) the amount of Indebtedness secured by each such Lien
is not increased in excess of the amount of such Indebtedness outstanding on
the date of such renewal, extension or refinancing, unless the aggregate
amount of Indebtedness in excess of such outstanding Indebtedness is
permitted to be outstanding under the terms and provisions of Section 6.8(b)
hereof,
(2) none of such Liens is extended to encumber or
otherwise relate to or cover any additional Property of the Company or any
Subsidiary, and
(3) immediately prior to, and immediately after the
consummation of such renewal, extension or refinancing, and after giving
effect thereto, no Default or Event of Default exists or would exist; and
(vii) Secured Indebtedness -- other Liens on Property of the Company
or the Subsidiaries as specified in Section 6.8(b) hereof securing
Indebtedness permitted pursuant to Section 6.8(b) hereof.
(b) Equal and Ratable Lien; Equitable Lien. In case any Property shall
be subjected to a Lien in violation of this Section 6.4, the Company will
forthwith make or cause to be made, to the fullest extent permitted by
applicable law, provision whereby the Notes will be secured equally and
ratably with all other obligations secured thereby pursuant to such
agreements and instruments as shall be approved by the Required Holders, and
the Company will cause to be delivered to each holder of a Note an opinion
of independent counsel to the effect that such agreements and instruments
are enforceable in accordance with their terms. Regardless of whether the
Company complies with the provisions of the immediately preceding sentence,
in case any Property shall be subjected to a Lien in violation of this
Section 6.4, the Notes shall have the benefit, to the fullest extent that,
and with such priority as, the holders of Notes may be entitled thereto
under applicable law, of an equitable Lien on such Property securing the
Notes. A violation of this Section 6.4 will constitute an Event of Default,
whether or not any such provision is made or action is taken pursuant to
this Section 6.4(b).
(c) Financing Statements. The Company will not, and will not permit any
Subsidiary to, sign or file a financing statement under the Uniform
Commercial Code of any jurisdiction that names the Company or such
Subsidiary as debtor, or sign any security agreement authorizing any secured
party thereunder to file any such financing statement, except, in any such
case, a financing statement filed or to be filed to perfect or protect a
security interest that the Company or such Subsidiary is entitled to create,
assume or incur, or permit to exist, under the foregoing provisions of this
Section 6.4 or to evidence for informational purposes a lessor's interest in
Property leased to the Company or any such Subsidiary.
6.5 Merger, Consolidation, Transfers of Property, etc.
(a) Merger and Consolidation. The Company will not, and will not permit
any Subsidiary to, merge with or into or consolidate with any other Person
or permit any other Person to merge or consolidate with or into it (except
that a Subsidiary may merge into or consolidate with the Company or a
Wholly-Owned Subsidiary), provided that the foregoing restriction does not
apply to the merger or consolidation of the Company with another corporation
if:
(i) the Company is the corporation that results from such merger or
consolidation (the "Surviving Corporation");
(ii) the due and punctual payment of the principal of and Make-Whole
Amount, if any, and interest on all of the Notes, according to their tenor,
and the due and punctual performance and observance of all the covenants in
the Notes and this Agreement to be performed or observed by the Company are
expressly assumed by the Surviving Corporation pursuant to such agreements
and instruments as shall be approved by the Required Holders, and the
Company causes to be delivered to each holder of Notes an opinion of
independent counsel to the effect that such agreements and instruments are
enforceable in accordance with their terms (subject to customary
qualifications); and
(iii) immediately prior to, and immediately after the consummation
of the transaction, and after giving effect thereto, no Default or Event of
Default exists or would exist.
(b) Acquisition of Stock, etc. The Company will not, and will not permit
any Subsidiary to, acquire any stock of any corporation if upon completion
of such acquisition such corporation would be a Subsidiary, or acquire all
of the Property of, or such of the Property as would permit the transferee
to continue any one or more integral business operations of, any Person
unless, immediately prior to, and immediately after the consummation of such
acquisition, and after giving effect thereto, no Default or Event of Default
exists or would exist.
(c) Transfers of Property. The Company will not, and will not permit any
Subsidiary to, sell, lease as lessor, transfer or otherwise dispose of any
Property (collectively, "Transfers"), except Transfers of inventory and
Transfers of other Property for Fair Market Value, in each case in the
ordinary course of business of the Company or any such Subsidiary.
6.6 Tangible Net Worth.
The Company will maintain, as of the last day of each fiscal quarter, a Tangible
Net Worth of not less than the sum of
(a) One Hundred Twenty-Nine Million Dollars ($129,000,000), plus
(b) the amount of all proceeds of any issuance of capital stock of the
Company after May 18, 1994, plus
(c) the amount of any Subordinated Debt which is converted into capital
stock of the Company after May 18, 1994, plus
(d) in the case of each fiscal quarter ending on or after October 1,
1994, the Applicable Net Income Carryover.
As used herein,
Tangible Net Worth -- means the excess of total assets over total
liabilities, as each of total assets and total liabilities would be shown on
a consolidated balance sheet for the Company and the Subsidiaries prepared
in accordance with GAAP consistent with GAAP applied in the preparation of
the financial statements referred to in Section 7.1(a) and Section 7.1(b)
hereof, excluding, however, Intangible Assets from such determination of
total assets.
Intangible Assets -- means (i) goodwill, organizational expenses,
research and development expenses, trademarks, trade names, copyrights,
patents, patent applications, licenses and rights in any thereof, and other
similar intangibles, (ii) treasury stock, (iii) Securities which are not
readily marketable, (iv) cash held in a sinking or other analogous fund
established for the purpose of redemption, retirement or prepayment of
capital stock, (v) any write-up in the book value of any asset resulting
from a revaluation thereof subsequent to May 18, 1994, and (vi) any items
not included in clauses (i) through (v) above, inclusive, which are treated
as intangibles in conformity with GAAP.
Applicable Net Income Carryover -- at any time that any
determination thereof is to be made means an amount equal to the sum of (i)
sixty percent (60%) of the net income of the Company and the Subsidiaries,
determined on a consolidated basis for such Persons in accordance with GAAP,
for the fiscal year of the Company ending on October 1, 1994, plus (ii)
sixty percent (60%) of the net income of the Company and the Subsidiaries,
determined on a consolidated basis for such Persons in accordance with GAAP,
for each and every fiscal year of the Company ending after October 1, 1994
which has ended on or before the date such determination of Applicable Net
Income Carryover is to be made; provided, however, that, in the event that
such net income for any fiscal year described above is less than zero (0),
the net income of the Company and the Subsidiaries for such fiscal year
shall be deemed to be zero (0) for purposes of calculating Applicable Net
Income Carryover.
6.7 Working Capital; Current Ratio.
The Company will maintain as of the last day of each fiscal quarter:
(a) a ratio of current assets to current liabilities (exclusive of
current deferred taxes), in each case as would be shown on a consolidated
balance sheet for the Company and the Subsidiaries at such time prepared in
accordance with GAAP, of not less than 1.5 to 1.0, and
(b) an excess of current assets over current liabilities (exclusive of
current deferred taxes), in each case as would be shown on a consolidated
balance sheet for the Company and the Subsidiaries at such time prepared in
accordance with GAAP, of not less than Sixty Million Dollars ($60,000,000).
6.8 Limitations on Indebtedness.
(a) Leverage Ratio. The Company will maintain, as of the last day of
each fiscal quarter, a Leverage Ratio of not more than 0.5 to 1.0.
As used herein:
Leverage Ratio -- means for any date of determination thereof, the
quotient (expressed as a ratio) of (x) Indebtedness with maturities of
greater than one (1) year (including, without limitation, all current
portions thereof and all Subordinated Debt) of the Company and the
Subsidiaries as would appear on a consolidated balance sheet prepared in
accordance with GAAP for such Persons at such time, divided by (y) the sum
of (i) Indebtedness with maturities of greater than one (1) year (including,
without limitation, all current portions thereof and all Subordinated Debt)
of the Company and the Subsidiaries as would appear on a consolidated
balance sheet prepared in accordance with GAAP for such Persons at such
time, plus (ii) stockholders' equity of the Company and the Subsidiaries
(excluding, in any event, any minority interests) as would appear on a
consolidated balance sheet prepared in accordance with GAAP for such Persons
at such time, plus (iii) long-term deferred taxes, attributable to the
Company's prior use of cash accounting, of the Company and the Subsidiaries
as would appear on a consolidated balance sheet prepared in accordance with
GAAP for such Persons at such time, plus (iv) deferred taxes, attributable
to the Company's use of the "farm price method" of accounting for deferred
taxes, of the Company and the Subsidiaries as would appear on a consolidated
balance sheet prepared in accordance with GAAP for such Persons at such
time.
(b) Limitation on Secured Indebtedness. The Company will not, and will
not permit any Subsidiary to, create, incur, assume or suffer to exist any
Indebtedness or other liabilities or obligations, whether matured or
unmatured, liquidated or unliquidated, direct or contingent, or joint or
several, which are secured by, or have the benefit of, any Lien except
Indebtedness secured by or having the benefit of, or in respect of:
(i) Liens outstanding on the Closing Date described in Part
6.4(a)(vi) of Annex 4 hereto;
(ii) purchase money Liens or purchase money security interests upon
or in any fixed assets acquired or held by the Company or any Subsidiary in
the ordinary course of business to secure the purchase price of such fixed
assets or to secure Indebtedness incurred solely for the purpose of
financing the acquisition of such fixed assets;
(iii) Liens or security interests existing on fixed assets at the
time of their acquisition;
(iv) Liens and security interests on previously acquired fixed
assets, the Fair Market Value of which assets does not exceed by more than
one hundred percent (100%) the amount of Indebtedness secured thereby, all
as determined by the Required Holders, in their sole, good faith discretion;
or
(v) Liens in respect of obligations for Capital Leases of real or
personal fixed assets acquired or held by the Company in the ordinary course
of business which are secured only by the fixed assets that are the subject
of such Capital Lease,
provided, however, that (x) the aggregate amount of any Indebtedness incurred in
connection with renewals, extensions (as to time) and refinancings of
Indebtedness described in Part 6.4(a)(vi) of Annex 4 hereto in excess of the
amount of such Indebtedness outstanding immediately prior to each such renewal,
extension or refinancing, plus (y) the aggregate principal amount of the
Indebtedness secured by the Liens or security interests referred to in clause
(ii), clause (iii) and clause (iv) of this Section 6.8(b), plus (z) the
aggregate amount of capitalized payment obligations under the Capital Leases
specified in clause (v) of this Section 6.8(b) shall not at any time exceed
Twenty-Five Million Dollars ($25,000,000).
(c) Limitation on Subsidiary Indebtedness. The Company shall not at any
time permit Total Subsidiary Indebtedness to exceed ten percent (10%) of
Consolidated Indebtedness at such time.
As used herein:
Total Subsidiary Indebtedness -- means, at any time (without
duplication),
(a) the aggregate Indebtedness of all Subsidiaries outstanding
at such time, plus
(b) the aggregate amount of claims in respect of the
redemption of, and accumulated unpaid dividends on, all preferred
stock (and other equity Securities and all other Securities
convertible into, exchangeable for, or representing the right to
purchase, preferred stock) of all Subsidiaries outstanding at such
time (whether or not any right of redemption or conversion is
exercisable by the holder thereof at such time),
determined, in each case, on a combined basis for such Persons, but
excluding from such calculation (i) any such Indebtedness of any
Subsidiary in respect of any Guaranty of the Notes provided pursuant to,
and in accordance with the provisions of, Section 6.16 hereof, (ii) any
such Indebtedness of any Subsidiary in respect of any Guaranty of any of
the obligations of the Company under (A) the Bank Credit Agreement and
(B) any other primary Indebtedness of the Company, so long as, in each
such case, such Subsidiary has entered into a Guaranty of the
obligations of the Company under the Notes and this Agreement, (iii) any
such Indebtedness of any Subsidiary existing on the Closing Date which
is described in Part 6.8(c) of Annex 4 hereto, and (iv) all such
preferred stock and other equity Securities which are legally and
beneficially owned by the Company.
Consolidated Indebtedness -- means, at any time, the aggregate amount of
Indebtedness of the Company and the Subsidiaries, determined on a
consolidated basis for such Persons at such time in accordance with
GAAP.
(d) Limitation on Indebtedness. The Company will not, and will not
permit any Subsidiary to, create, incur, assume or suffer to exist any
Indebtedness or other liabilities or obligations, whether matured or
unmatured, liquidated or unliquidated, direct or contingent, or joint or
several, except:
(i) liabilities of the Company in respect of the Notes, the Note
Purchase Agreements and the Bank Credit Agreement, and liabilities of
any Subsidiary in respect of any Guaranty of the obligations of the
Company under the Notes, the Note Purchase Agreements or the Bank Credit
Agreement;
(ii) long-term Indebtedness, provided the Company complies with
the provisions of Section 6.8(a) hereof;
(iii) Indebtedness secured by Liens permitted to be outstanding
pursuant to Section 6.8(b) hereof;
(iv) unsecured short-term Indebtedness of the Company incurred for
the purpose of funding the working capital requirements of the Company
and the Subsidiaries, provided the Company complies with the provisions
of Section 6.9 hereof;
(v) Indebtedness of Subsidiaries, provided the Company complies
with the provisions of Section 6.8(c) hereof; and
(vi) those liabilities listed in Part 6.8(d) of Annex 4 hereto.
(e) Loans, Guaranties, etc. The Company will not, and will not permit
any Subsidiary to, make any loans or advances to or investments in any
Person, or directly or indirectly enter into any Guaranty or otherwise
assure a creditor against loss in respect of any Indebtedness or other
obligations or liabilities (contingent or otherwise) of any Person unless
any such amounts have been included as Indebtedness in making calculations
with respect to each representation, warranty and covenant set forth in this
Agreement.
6.9 Current Debt.
The Company will not, and will not permit any Subsidiary to, have any Current
Debt outstanding on any day unless, within the period of three hundred
sixty-five (365) days immediately preceding such day, there shall have been at
least one (1) period of not less than forty-five (45) consecutive days during
which on each day of such period the aggregate Current Debt of all such Persons
did not exceed the amount of additional Funded Debt in favor of a Person other
than a Subsidiary that the Company would have been permitted to have outstanding
(but did not have outstanding) if the Company were required to maintain a
Leverage Ratio of not more than 0.5 to 1.0 on such day.
6.10 Cash Flow Coverage Ratio.
The Company will maintain, as of the last day of each fiscal quarter, a Cash
Flow Coverage Ratio of not less than 1.3 to 1.0 for the period of eight (8)
consecutive fiscal quarters then most recently ended.
As used herein:
Cash Flow Coverage Ratio -- means for any period of determination
thereof, the quotient (expressed as a ratio) of (x) the sum of (i)
Consolidated Net Income, plus (ii) income taxes of the Company and the
Subsidiaries, plus (iii) Consolidated Interest Expense, plus (iv)
Consolidated Lease Expense, plus (iv) depreciation and amortization of the
Company and the Subsidiaries, divided by (y) the sum of (i) Consolidated
Interest Expense, plus (ii) Consolidated Lease Expense, plus (iii) all
scheduled and optional principal payments on long-term Indebtedness
(including, without limitation, imputed principal on Capital Leases), other
than, in each such case, the principal amount of any such Indebtedness which
shall be paid during such period from the proceeds of Indebtedness incurred
in connection with any refinancing thereof prior to, or at the time of, the
maturity thereof, plus (iv) the sum of (a) dividends on the capital stock of
the Company or a Subsidiary (other than dividends paid to the Company or a
Subsidiary), (b) purchases or other acquisitions by the Company or any
Subsidiary of any capital stock of the Company, and (c) distributions of
assets to the Company's stockholders as such.
Consolidated Net Income -- means, for any period, net income (or loss)
from continuing operations (after income taxes) of the Company and the
Subsidiaries, excluding, in any event, net income (or loss) in respect of
extraordinary items, net income (or loss) from discontinued operations and
the cumulative effects of changes in accounting principles, all as
determined on a consolidated basis for such Persons in accordance with GAAP.
Consolidated Interest Expense -- means, for any period, the aggregate
amount of interest accrued or capitalized on, or with respect to,
Indebtedness (including, without limitation, amortization of debt discount,
imputed interest on Capital Leases and interest on the Notes), but without
giving effect to any deduction for any interest income, of the Company and
the Subsidiaries determined on a consolidated basis for such Persons for
such period in accordance with GAAP.
Consolidated Lease Expense -- means, for any period, the aggregate
amount of rentals payable in respect of Operating Leases for such period by
any one or more of the Company and the Subsidiaries, determined on a
consolidated basis for such Persons for such period in accordance with GAAP.
Operating Lease -- means, with respect to any Person, any lease other
than a Capital Lease.
6.11 Dividends and Prepayments on Subordinated Debt.
(a) Limit on Dividends and Other Distributions. The Company will not
declare or pay any dividends (whether in cash or other Property), purchase,
redeem, retire or otherwise acquire for value any of its capital stock (or
any warrants, rights or options to acquire any shares of such capital stock)
now or hereafter outstanding, or make any other distribution of Property to
its stockholders, or permit any of its Subsidiaries to purchase or otherwise
acquire for value any capital stock of the Company if:
(i) after giving effect to such dividend, distribution or other
payment, the aggregate amount of all such dividends, distributions and
other payments exceeds Two Million Seven Hundred Fifty Thousand Dollars
($2,750,000) during any fiscal year, or
(ii) at the time of the declaration of such dividend, distribution
or other payment, and immediately before, and after giving effect to the
payment thereof, an Event of Default exists or would exist.
(b) No Subordinated Debt Prepayments. The Company will not at any time,
and will not at any time permit any Subsidiary to, make any prepayments,
directly or indirectly, of principal on, or redeem, repurchase or retire,
any existing or future Subordinated Debt of the Company or any Subsidiary.
6.12 Capital Expenditures.
The Company will not, and will not permit any Subsidiary to, make any Capital
Expenditures, if:
(a) the aggregate amount of Capital Expenditures of the Company and the
Subsidiaries, determined on a consolidated basis for such Persons in
accordance with GAAP, in any one (1) fiscal year would be in excess of
twenty-five percent (25%) of stockholder's equity of the Company and the
Subsidiaries as would appear on a consolidated balance sheet prepared in
accordance with GAAP for such Persons as at the end of the fiscal year then
most recently ended; provided, however, that
(i) the amount of Capital Expenditures incurred in fiscal year 1996
and fiscal year 1997 of the Company in connection with the Company's
planned construction of a new processing facility in the state of
Kentucky, and
(ii) the portion of any purchase price in respect of any Capital
Expenditure which was paid for by the Company solely with shares of the
Company's capital stock, shall be excluded from the application of this
covenant; or
(b) at the time of such Capital Expenditure, and immediately before and
after giving effect thereto, a Default or an Event of Default exists or
would exist.
As used herein:
Capital Expenditure -- means, with respect to any Person, any payments
in respect of the acquisition or construction cost of Property (including,
without limitation, (i) the purchase price of tangible assets acquired by
such Person and (ii) the gross purchase price of assets or stock, as the
case may be, acquired by such Person in connection with any merger,
consolidation, asset acquisition, stock purchase or similar transaction
entered into by such Person) or other expenditures in respect of Property,
in each case that is, or is part of a group of related items of Property
substantially all of which are, required to be classified as long-term
assets on a balance sheet of such Person prepared in accordance with GAAP.
6.13 Operating Lease Rentals.
The Company will not create or suffer to exist, or permit any of the
Subsidiaries to create or suffer to exist, any obligations for the payment of
rent for any Property under leases or agreements to lease, which do or would
constitute Operating Leases, which in the aggregate have annual rental payments
for any fiscal year in excess of seven and one-half percent (7.5%) of Net
Tangible Assets determined at the end of such fiscal year; provided, however,
that leases for rolling stock shall be excluded from the foregoing calculation.
As used herein:
Net Tangible Assets -- means total assets minus Intangible Assets minus
current liabilities (exclusive of current deferred taxes) of the Company and
the Subsidiaries, in each case as would appear on a consolidated balance
sheet for such Persons prepared in accordance with GAAP.
6.14 Nature of Business.
The Company will not, and will not permit any Subsidiary to, engage in any
business if, as a result thereof, the principal businesses of the Company and
the Subsidiaries, taken as a whole, would not be substantially the same as the
businesses described in the Most Recent 10-K.
6.15 Transactions with Affiliates.
The Company will not, and will not permit any Subsidiary to, enter into any
transaction, including, without limitation, the purchase, sale or exchange of
Property or the rendering of any service, with any Affiliate, except in the
ordinary course of and pursuant to the reasonable requirements of the Company's
or such Subsidiary's business and upon fair and reasonable terms no less
favorable to the Company or such Subsidiary than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate.
6.16 Guaranties of Subsidiaries.
(a) New Subsidiaries. The Company shall cause each Subsidiary not
existing as of the Closing Date to execute and deliver to the holders of the
Notes a Subsidiary Guaranty, in substantially the form of Exhibit E hereto,
within ten (10) Business Days of the creation or acquisition of any such
Subsidiary.
(b) Certain Existing Subsidiaries. If ▇▇▇▇, ▇▇▇▇▇▇ Poland, ▇▇▇▇▇▇
Development or Hudson Foreign Sales shall at any time own or hold, directly
or indirectly, assets having a book value equal to or in excess of five
percent (5%) of the total assets of the Company and the Subsidiaries at such
time, as would be shown on a consolidated balance sheet for such Persons
prepared in accordance with GAAP, then the Company shall cause such Person
to execute and deliver to the holders of the Notes a Subsidiary Guaranty, in
substantially the form of Exhibit E hereto, within ten (10) Business Days of
such time.
(c) Delivery of Documents. The delivery of any agreements pursuant to
Section 6.16(a) or Section 6.16(b) hereof shall be accompanied by such other
documents as any Purchaser or other holder of Notes may reasonably request,
including, without limitation, charter documents, bylaws, and appropriate
resolutions of the Board of Directors of any such Subsidiary providing a
Subsidiary Guaranty.
(d) Guaranties of Bank Credit Agreement Obligations. Notwithstanding the
other terms and provisions of this Section 6.16, the Company will not at any
time permit any Subsidiary or Affiliate to provide to the Banks any Guaranty
of the Company's obligations under the Bank Credit Agreement unless such
Subsidiary or such Affiliate shall, at the same time, deliver a Subsidiary
Guaranty and other documents to the holders of the Notes as specified in
Section 6.16(c) hereof.
6.17 Restricted Investments.
The Company will not at any time, and will not at any time permit any Subsidiary
to, make any investments (including, without limitation, loans or other advances
to or for the benefit of any Subsidiary) except:
(a) investments in readily marketable obligations of the United States
of America maturing within one (1) year from date of purchase,
(b) investments in prime (by recognized United States financial
standards) commercial paper maturing within one (1) year from date of
purchase,
(c) investments in fully insured domestic certificates of deposit and
certificates of deposit issued by any Bank (provided such Bank's outstanding
long-term debt securities are rated at least "A" by Standard & Poor's (a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc.) or at least "A-1" by ▇▇▇▇▇'▇ Investors
Service, Inc.) maturing within one (1) year from the date of creation
thereof,
(d) endorsements of negotiable instruments for collection in the
ordinary course of business,
(e) investments in Subsidiaries that have complied with the requirements
of Section 6.16 hereof, and
(f) other investments so long as the aggregate book value of all such
investments does not at any time exceed ten percent (10%) of Tangible Net
Worth at such time;
provided, however, that this Section 6.17 shall not be deemed to prohibit the
Company from creating accounts receivable owing from any Subsidiary as a result
of the sale of inventory in accordance with Section 6.15 hereof.
6.18 ERISA.
(a) Compliance. The Company will, and will cause each ERISA Affiliate
to, at all times with respect to each Pension Plan, make timely payment of
contributions required to meet the minimum funding standard set forth in
ERISA or the IRC with respect thereto, and to comply with all other
applicable provisions of ERISA.
(b) Relationship of Vested Benefits to Pension Plan Assets. The Company
will not at any time permit the present value of all employee benefits
vested under each Pension Plan to exceed the assets of such Pension Plan
allocable to such vested benefits at such time, in each case determined
pursuant to Section 6.18(c) hereof.
(c) Valuations. All assumptions and methods used to determine the
actuarial valuation of vested employee benefits under Pension Plans and the
present value of assets of Pension Plans will be reasonable in the good
faith judgment of the Company and will comply with all requirements of law.
(d) Prohibited Actions. The Company will not, and will not permit any
ERISA Affiliate to:
(i) engage in any "prohibited transaction" (as such term is defined
in section 406 of ERISA or section 4975 of the IRC) that would result in
the imposition of a material tax or penalty;
(ii) incur with respect to any Pension Plan any "accumulated funding
deficiency" (as such term is defined in section 302 of ERISA), whether
or not waived;
(iii) terminate any Pension Plan in a manner that could result in
(A) the imposition of a Lien on the Property of the Company or
any Subsidiary pursuant to section 4068 of ERISA, or
(B) the creation of any liability under section 4062 of ERISA;
(iv) fail to make any payment required by section 515 of ERISA; or
(v) at any time be an "employer" (as such term is defined in
section 3(5) of ERISA) required to contribute to any Multiemployer Plan
if, at such time, it could reasonably be expected that the Company or
any Subsidiary will incur withdrawal liability in respect of such
Multiemployer Plan and such liability, if incurred, together with the
aggregate amount of all other withdrawal liability as to which there is
a reasonable expectation of incurrence by the Company or any Subsidiary
under any one or more Multiemployer Plans, could reasonably be expected
to have a Material Adverse Effect.
6.19 Private Offering.
The Company will not, and will not permit any Person acting on its behalf to,
offer the Notes or any part thereof or any similar Securities for issuance or
sale to, or solicit any offer to acquire any of the same from, any Person so as
to bring the issuance and sale of the Notes within the provisions of section 5
of the Securities Act.
6.20 Certain Accounting Matters.
The Company will not, at any time,
(a) change its methods of accounting, unless required in accordance with
GAAP, or
(b) change its fiscal year.
7. INFORMATION AS TO COMPANY
7.1 Financial and Business Information.
The Company will deliver to each Purchaser and to each other holder of Notes:
(a) Quarterly Statements -- as soon as practicable after the end of each
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), and in any event
within forty-five (45) days thereafter, duplicate copies of
(i) a consolidated balance sheet of the Company and the Subsidiaries
as at the end of such quarter, and
(ii) consolidated statements of operations and cash flows of the
Company and the Subsidiaries for such quarter and (in the case of the
second and third quarters) for the portion of the fiscal year ending
with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally and
certified as complete and correct, subject to changes resulting from year-end
adjustments, by a Senior Financial Officer, and accompanied by the certificate
required by Section 7.2 hereof;
(b) Annual Statements -- as soon as practicable after the end of each
fiscal year of the Company, and in any event within ninety (90) days
thereafter, duplicate copies of
(i) consolidated balance sheets of the Company and the Subsidiaries
as at the end of such year, and
(ii) consolidated statements of operations and cash flows of the
Company and the Subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP and
accompanied by
(A) an opinion of independent certified public accountants of
recognized national standing, which opinion shall, without
qualification (including, without limitation, qualifications related
to the scope of the audit or the ability of the Company or a
Subsidiary to continue as a going concern), state that such
financial statements present fairly, in all material respects, the
financial position of the companies being reported upon and their
results of operations and cash flows and have been prepared in
conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances,
(B) a certification by a Senior Financial Officer that such
consolidated financial statements are complete and correct, and
(C) the certificates required by Section 7.2 and Section 7.3
hereof;
(c) Opinions of Independent Accountants and Counsel -- as soon as
practicable after the end of each fiscal year of the Company, and in any
event within ninety (90) days thereafter, duplicate copies of all opinions
of independent accountants and counsel required pursuant to Section 6.1
hereof;
(d) Audit Reports -- promptly upon receipt thereof, a copy of each other
report submitted to the Company or any Subsidiary by independent accountants
in connection with any annual, interim or special audit made by them of the
books of the Company or any Subsidiary;
(e) SEC and Other Reports -- within fifteen (15) days of their becoming
available, one copy, without duplication, of (i) each financial statement,
report, notice or proxy statement sent by the Company or any Subsidiary to
public securities holders generally, and (ii) each regular or periodic
report (including, without limitation, each Annual Report on Form 10-K, each
Quarterly Report on Form 10-Q and each Current Report on Form 8-K), each
registration statement (other than registration statements on Form S-8)
which shall have become effective (without exhibits except as expressly
requested by a holder of Notes), and each final prospectus, and all
amendments to any of the foregoing, filed by the Company or any Subsidiary
with, or received by, such Person in connection therewith from, the
Securities and Exchange Commission or any successor agency;
(f) ERISA --
(i) immediately upon becoming aware of the occurrence of any
(A) "reportable event" (as such term is defined in section 4043
of ERISA), or
(B) "prohibited transaction" (as such term is defined in section
406 of ERISA or section 4975 of the IRC),
in connection with any Pension Plan or any trust created thereunder, a written
notice specifying the nature thereof, what action the Company is taking or
proposes to take with respect thereto and, when known, any action taken by the
IRS, the Department of Labor or the PBGC with respect thereto; and
(ii) prompt written notice of and, where applicable, a description
of
(A) any notice from the PBGC in respect of the commencement of
any proceedings pursuant to section 4042 of ERISA to terminate any
Pension Plan or for the appointment of a trustee to administer any
Pension Plan,
(B) any distress termination notice delivered to the PBGC under
section 4041 of ERISA in respect of any Pension Plan, and any
determination of the PBGC in respect thereof,
(C) the placement of any Multiemployer Plan in reorganization
status under Title IV of ERISA,
(D) any Multiemployer Plan becoming "insolvent" (as such term is
defined in section 4245 of ERISA) under Title IV of ERISA,
(E) the whole or partial withdrawal of the Company or any ERISA
Affiliate from any Multiemployer Plan and the withdrawal liability
incurred in connection therewith, and
(F) any material increase in contingent liabilities of the
Company or any Subsidiary in respect of any post-retirement employee
welfare benefits.
(g) Actions, Proceedings -- promptly after the commencement thereof,
written notice of any action or proceeding relating to the Company or any
Subsidiary in any court or before any Governmental Authority or arbitration
board or tribunal as to which there is a reasonable possibility of an
adverse determination and that, if adversely determined, is reasonably
likely to have a Material Adverse Effect;
(h) Certain Matters -- prompt written notice of and a description of any
event or circumstance that, had such event or circumstance occurred or
existed immediately prior to the Closing Date, would have been required to
be disclosed as an exception to any statement set forth in Section 2.13(a)
or Section 2.13(b) hereof;
(i) Notice of Default or Event of Default -- immediately upon becoming
aware of the existence of any condition or event that constitutes a Default
or an Event of Default, a written notice specifying the nature and period of
existence thereof and what action the Company is taking or proposes to take
with respect thereto;
(j) Notice of Claimed Default -- immediately upon becoming aware that
the holder of any Note, or of any Indebtedness or other Security of the
Company or any Subsidiary, shall have given notice or taken any other action
with respect to a claimed Default, Event of Default, default or event of
default, a written notice specifying the notice given or action taken by
such holder and the nature of the claimed Default, Event of Default, default
or event of default and what action the Company is taking or proposes to
take with respect thereto;
(k) Information Furnished to Other Creditors -- promptly after any
request therefor, copies of any statement, report or certificate furnished
to any holder of Indebtedness of the Company or any Subsidiary;
(l) Rule 144A -- promptly after any request therefor, information
requested to comply with 17 C.F.R. ss.230.144A, as amended from time to
time; and
(m) Requested Information -- promptly after any request therefor, such
other data and information as from time to time may be reasonably requested
by any holder of Notes, including, without limitation, data, information,
agreements, instruments or documents relating to the business or financial
operations or performance of the Company or any Subsidiary and any financial
statements prepared by the Company (in addition to the financial statements
specified in clause (a) and clause (b) of this Section 7.1), in each case
which may be reasonably requested by any holder of Notes.
7.2 Officer's Certificates.
Each set of financial statements delivered to each holder of Notes pursuant to
Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a certificate of
a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 6.4 through Section 6.13,
inclusive, and Section 6.17 hereof, during the period covered by the income
statement then being furnished (including with respect to each such Section,
where applicable, the calculations of the maximum or minimum amount, ratio
or percentage, as the case may be, permissible under the terms of such
Sections, and the calculation of the amounts, ratio or percentage then in
existence);
(b) Event of Default -- a statement that the signers have reviewed the
relevant terms hereof and have made, or caused to be made, under their
supervision, a review of the transactions and conditions of the Company and
the Subsidiaries from the beginning of the accounting period covered by the
income statement being delivered therewith to the date of the certificate
and that such review shall not have disclosed the existence during such
period of any condition or event that constitutes a Default or an 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 shall
have taken or proposes to take with respect thereto; and
(c) Investments -- a description of all investments of the Company and
the Subsidiaries made pursuant to Section 6.17(f) hereof during such
accounting period (which description shall specify the type of investment,
the cost thereof and the book value thereof), and, if any such investments
are made, a description of the Company's then-current investment policy.
7.3 Accountants' Certificates.
Each set of annual financial statements delivered pursuant to Section 7.1(b)
hereof shall be accompanied by a certificate of the accountants who certify such
financial statements, stating that
(a) they have reviewed this Agreement and stating further, whether, in
making their audit, such accountants have become aware of any condition or
event that then constitutes a Default or an Event of Default and, if such
accountants are aware that any such condition or event then exists,
specifying the nature and period of existence thereof, and
(b) they have reviewed the annual certificate of a Senior Financial
Officer of the Company provided pursuant to clause (a) of Section 7.2 hereof
and that they confirm the calculations contained therein.
7.4 Inspection.
The Company will permit, upon prior notice to the Company, the representatives
of each holder of Notes (at the expense of the Company at any time when a
Default or an Event of Default has occurred and is in existence, and otherwise
at the expense of such holder) to visit and inspect any of the Properties of the
Company or any Subsidiary, to examine all their respective books of account,
records, reports and other papers, to make copies and extracts therefrom and to
discuss their respective affairs, finances and accounts with their respective
officers, employees and independent public accountants (and by this provision
the Company authorizes such accountants to discuss the finances and affairs of
the Company and the Subsidiaries), all at such reasonable times and as often as
may be reasonably requested.
8. EVENTS OF DEFAULT
8.1 Nature of Events.
An "Event of Default" shall exist if any of the following occurs and is
continuing:
(a) Principal or Make-Whole Amount Payments -- the Company shall fail to
make any payment of principal or Make-Whole Amount on any Note on or before
the date such payment is due;
(b) Interest Payments -- the Company shall fail to make any payment of
interest on any Note on or before the date such payment is due;
(c) Certain Defaults -- the Company or any Subsidiary shall fail to
perform or observe any covenant contained in Section 6.1 hereof, in Section
6.2(b) hereof, in Section 7.1(a) through Section 7.1(h) hereof, inclusive,
or in Section 7.1(k) through Section 7.1(m) hereof, inclusive, and such
failure continues for more than ten (10) days after the earlier of (i)
receipt by the Company of written notice thereof from any Purchaser or any
other holder of Notes, or (ii) such time as such failure shall otherwise
first become known to any officer of the Company;
(d) Other Defaults -- the Company or any Subsidiary shall fail to
perform, observe or comply with any other term, covenant or agreement
contained in this Agreement, in the Notes or in any other document or
instrument delivered in connection herewith required to be performed by the
Company or such Subsidiary pursuant to the terms of this Agreement, of the
Notes or of such other document or instrument;
(e) Warranties or Representations -- any warranty, representation or
other statement by or on behalf of the Company (or any of its officers)
contained herein or in any certificate or instrument furnished in compliance
with or in reference hereto shall have been false or misleading in any
material respect when made;
(f) Default on Indebtedness or Security --
(i) the Company or any Subsidiary shall fail to make any payment on
any Indebtedness or any Security when due;
(ii) any event shall occur or any condition shall exist in respect
of any Indebtedness or any Security of the Company or any Subsidiary, or
under any agreement securing or relating to any such Indebtedness or
Security, that immediately or with any one or more of the passage of
time or the giving of notice:
(A) causes (or permits any holder thereof or a trustee therefor to
cause) such Indebtedness or Security, or a portion thereof, to
become due prior to its stated maturity or prior to its regularly
scheduled date or dates of payment; or
(B) permits any one or more of the holders thereof or a trustee
therefor to require the Company or any Subsidiary to repurchase such
Indebtedness or Security from such holder and any such holder or
trustee exercises (or attempts to exercise) such right; or
(iii) any "Event of Default" shall have occurred or shall exist
under, and as defined in, the Bank Credit Agreement, as amended and as
in effect at such time;
(g) Involuntary Bankruptcy Proceedings --
(i) a receiver, liquidator, custodian or trustee of the Company or
any Subsidiary, or of all or any part of the Property of any such
Person, shall be appointed by court order and such order shall remain in
effect for more than thirty (30) days, or an order for relief shall be
entered with respect to the Company or any Subsidiary, or the Company or
any Subsidiary shall be adjudicated a bankrupt or insolvent;
(ii) any of the Property of the Company or any Subsidiary shall be
sequestered by court order and such order shall remain in effect for
more than thirty (30) days; or
(iii) a petition shall be filed against the Company or any
Subsidiary under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect, and shall not be
dismissed within thirty (30) days after such filing;
(h) Voluntary Petitions -- the Company or any Subsidiary shall file a
petition in voluntary bankruptcy or seeking relief under any provision of
any bankruptcy, reorganization, arrangement, insolvency, readjustment of
debt, dissolution or liquidation law of any jurisdiction, whether now or
hereafter in effect, or shall consent to, or take any corporate action to
authorize, the filing of any petition against, or with respect to, any such
Person, under any such law;
(i) Assignments for Benefit of Creditors, etc. -- the Company or any
Subsidiary shall make an assignment for the benefit of its creditors, or
admit in writing its inability, or fail, to pay its debts generally as they
become due, or shall consent to the appointment of a receiver, liquidator or
trustee of the Company or any Subsidiary or of all or any part of the
Property of any such Person;
(j) Undischarged Final Judgments -- a final, nonappealable judgment or
final, nonappealable judgments for the payment of money aggregating in
excess of Two Million Dollars ($2,000,000) is or are outstanding against any
one or more of the Company or any Subsidiary and any one of such judgments
shall have been outstanding for more than ten (10) days from the date of its
entry and shall not have been discharged in full or stayed; or
(k) Subsidiary Guaranty --
(i) any Subsidiary Guaranty shall cease to be in full force and
effect or shall be declared by a court or Governmental Authority of
competent jurisdiction to be void, voidable or unenforceable against the
Subsidiary which is a guarantor thereunder;
(ii) the validity or enforceability of any Subsidiary Guaranty
against the Subsidiary which is a guarantor thereunder shall be
contested by such Subsidiary, or any subsidiary or affiliate thereof; or
(iii) any Subsidiary, or any subsidiary or affiliate thereof, shall
deny that such Subsidiary has any further liability or obligation under
the Subsidiary Guaranty to which such Subsidiary is a party.
If any action, condition, event or other matter would, at any time, constitute
an Event of Default under any provision of this Section 8.1, then an Event of
Default shall exist, regardless of whether the same or a similar action,
condition, event or other matter is addressed in a different provision of this
Section 8.1 and would not constitute an Event of Default at such time under such
different provision.
8.2 Default Remedies.
(a) Acceleration on Event of Default.
(i) If an Event of Default in respect of the Company specified in
clause (g), clause (h) or clause (i) of Section 8.1 hereof shall exist,
all of the Notes at the time outstanding shall automatically become
immediately due and payable together with interest accrued thereon and
the Make-Whole Amount (if any) in respect thereof, in each case without
presentment, demand, protest or notice of any kind, all of which are
hereby expressly waived, and the Company shall forthwith pay to the
holder or holders of all the Notes then outstanding the entire principal
of and interest accrued on the Notes and, to the extent permitted by
law, the Make-Whole Amount at such time with respect to such principal
amount of the Notes, and all other amounts owing under the Note Purchase
Agreements.
(ii) If an Event of Default other than those in respect of the
Company specified in clause (g), clause (h) or clause (i) of Section 8.1
hereof shall exist, the Required Holders may exercise any right, power
or remedy permitted to such holder or holders by law and shall have, in
particular, without limiting the generality of the foregoing, the right
to declare the entire principal of, and all interest accrued on and
Make-Whole Amount (if any) in respect of, all the Notes then outstanding
to be, and such Notes shall thereupon become, forthwith due and payable,
without any presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived, and the Company shall
forthwith pay to the holder or holders of all the Notes then outstanding
the entire principal of and interest accrued on such Notes and, to the
extent permitted by law, the Make-Whole Amount at such time with respect
to such principal amount of the Notes, and all other amounts owing under
the Note Purchase Agreements.
(b) Acceleration on Payment Default. During the existence of an Event of
Default described in Section 8.1(a) or Section 8.1(b) hereof, and
irrespective of whether the Notes then outstanding shall have been declared
to be due and payable pursuant to Section 8.2(a)(ii) hereof, any holder of
Notes that shall have not consented to any waiver with respect to such Event
of Default may, at such holder's option, by notice in writing to the
Company, declare the Notes then held by such holder to be, and such Notes
shall thereupon become, forthwith due and payable together with all interest
accrued thereon, and Make-Whole Amount (if any) in respect thereof, without
any presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, and the Company shall forthwith pay to such
holder the entire principal of and interest accrued on such Notes and, to
the extent permitted by law, the Make-Whole Amount at such time with respect
to such principal amount of such Notes and all other amounts owing under the
Note Purchase Agreements to such holder.
(c) Valuable Rights. The Company acknowledges, and the parties hereto
agree, that the right of each holder to maintain its investment in the Notes
free from repayment by the Company (except as herein specifically provided
for) is a valuable right and that the provision for payment of a Make-Whole
Amount by the Company, in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default under certain circumstances,
is intended to provide compensation for the deprivation of such right under
such circumstances.
(d) Other Remedies; Remedies Cumulative; Nonwaiver. During the existence
of an Event of Default and irrespective of whether the Notes then
outstanding shall have been declared to be due and payable pursuant to
Section 8.2(a)(ii) hereof and irrespective of whether any Purchaser or any
other holder of Notes then outstanding shall otherwise have pursued or be
pursuing any other rights or remedies, any Purchaser and any other holder of
Notes may proceed to protect and enforce its rights hereunder and under such
Notes by exercising such remedies as are available to such holder in respect
thereof under applicable law, either by suit in equity or by action at law,
or both, whether for specific performance of any agreement contained herein
or in aid of the exercise of any power granted herein, provided that the
maturity of such holder's Notes may be accelerated only in accordance with
Section 8.2(a) and Section 8.2(b) hereof. All rights and remedies of each
Purchaser and each other holder of Notes are cumulative to, and not
exclusive of, any rights or remedies any such Purchaser or such other holder
of Notes would otherwise have. No course of dealing on the part of any
Purchaser or any other holder of Notes nor any delay or failure on the part
of any Purchaser or any other holder of Notes to exercise any right shall
operate as a waiver of such right or otherwise prejudice such Purchaser's or
such other holder's rights, powers and remedies.
(e) Expenses. If the Company shall fail to pay when due any principal
of, or Make-Whole Amount or interest on, any Note, or shall fail to comply
with any other provision hereof, the Company shall pay to each Purchaser and
to each other holder of Notes, to the extent permitted by law, such further
amounts as shall be sufficient to cover the costs and expenses (including,
but not limited to, reasonable attorneys' fees) incurred by such Purchaser
or such other holder in collecting any sums due on such Notes or in
otherwise assessing, analyzing or enforcing any rights or remedies that are
or may be available to it.
8.3 Annulment of Acceleration of Notes.
If a declaration is made pursuant to Section 8.2(a)(ii) hereof, then and in
every such case, the Required Holders may, by written instrument filed with the
Company, rescind and annul such declaration and the consequences thereof,
provided that at the time such declaration is annulled and rescinded:
(a) no judgment or decree shall have been entered for the payment of any
moneys due on or pursuant hereto or the Notes;
(b) all arrears of interest upon all the Notes and all other sums
payable hereunder and under the Notes (except any principal of, or interest
or Make-Whole Amount on, the Notes that shall have become due and payable by
reason of such declaration under Section 8.2(a)(ii) hereof) shall have been
duly paid; and
(c) each and every other Default and Event of Default shall have been
waived pursuant to Section 10.5 hereof or otherwise made good or cured;
and provided further that no such rescission and annulment shall extend to or
affect any subsequent Default or Event of Default or impair any right consequent
thereon.
9. INTERPRETATION OF THIS AGREEMENT
9.1 Terms Defined.
As used herein, the following terms have the respective meanings set forth below
or set forth in the Section of this Agreement following such term:
Acceptable Control Persons -- means any members of the immediate family of, or
the respective heirs, executors or trustees holding for the sole benefit of such
heirs or members of the immediate family of, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
Affiliate -- means, at any time, a Person (other than a Subsidiary)
(a) that directly or indirectly through one or more intermediaries
Controls, or is Controlled by, or is under common Control with, the Company,
(b) that beneficially owns or holds five percent (5%) or more of any
class of the Voting Stock of the Company,
(c) five percent (5%) or more of the Voting Stock (or in the case of a
Person that is not a corporation, five percent (5%) or more of the equity
interest) of which is beneficially owned or held by the Company or a
Subsidiary,
(d) that is an officer or director (or a member of the immediate family
of an officer or director) of the Company or any Subsidiary, or
(e) that is an Acceptable Control Person, a natural Person in any manner
related by birth or marriage to any Acceptable Control Person or a Person
owned or Controlled by any such Person,
at such time.
As used in this definition:
Control -- means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or
otherwise.
Agreement, this -- means this Note Purchase Agreement, as it may be
amended and restated from time to time.
Applicable Net Income Carryover -- Section 6.6.
Bank Credit Agreement -- means the Revolving Credit Agreement, dated as
of April 26, 1994, by and among the Company, the Banks and Rabobank, as
agent, as the same shall have been amended, modified or restated from time
to time, and any substitute or replacement credit facility in respect
thereof.
Banks -- means each of Rabobank, Bank of America National Trust and
Savings Association, NationsBank of Texas, National Association, Caisse
Nationale de Credit Agricole, and ▇▇▇▇▇▇ Trust and Savings Bank.
Board of Directors -- means the board of directors of the Company or a
Subsidiary, as applicable, or any committee thereof that, in the instance,
shall have the lawful power to exercise the power and authority of such
board of directors.
Business Day -- means, at any time, a day other than a Saturday, a
Sunday or a day on which the bank designated by the holder of a Note to
receive (for such holder's account) payments on such Note is required by law
(other than a general banking moratorium or holiday for a period exceeding
four (4) consecutive days) to be closed.
Capital Expenditure -- Section 6.12.
Capital Lease -- means, at any time, a lease with respect to which the
lessee is required to recognize the acquisition of an asset and the
incurrence of a liability at such time in accordance with GAAP.
Cash Flow Coverage Ratio -- Section 6.10.
Change in Control -- means, at any time:
(a) the failure of Acceptable Control Persons to beneficially own,
in the aggregate, at least fifty-one percent (51%) (by number of votes)
of the aggregate voting power in respect of the Voting Stock of the
Company outstanding at such time; or
(b) the failure of Acceptable Control Persons to have the power to
elect or cause the election of at least fifty-one percent (51%) of the
members of the Board of Directors of the Company at such time.
Closing -- Section 1.2(b).
Closing Date -- Section 1.2(b).
Company -- has the meaning assigned to such term in the introductory
sentence hereof.
Consolidated Indebtedness -- Section 6.8(c).
Consolidated Interest Expense -- Section 6.10.
Consolidated Lease Expense -- Section 6.10.
Consolidated Net Income -- Section 6.10.
Control Event -- means:
(a) the execution by the Company, any Subsidiary, any Affiliate or
any Acceptable Control Person of any letter of intent or similar
agreement with respect to any proposed transaction or event or series of
transactions or events that, individually or in the aggregate, could
reasonably be expected to result in a Change in Control; or
(b) the execution of any written agreement that, when fully
performed by the parties thereto, would result in a Change in Control.
Control Prepayment Date -- Section 4.3(a).
Current Debt -- means, with respect to any Person, (without duplication)
(a) the portion of the amount of liabilities for borrowed money of
such Person pursuant to a credit facility, under which such Person
borrows (and re-borrows) money on a short-term basis for working capital
purposes in the ordinary course of such Person's business, that is at
such time classified in good faith by such Person as a current
liability, and
(b) all other liabilities for borrowed money, Capital Leases and all
liabilities secured by any Lien existing on Property owned by such
Person whether or not such liabilities have been assumed, which, in each
case are payable on demand or within one (1) year, except:
(i) any such liabilities which are renewable or extendable at
the option of such Person to a date more than one (1) year, and
(ii) any such liabilities which, although payable within one (1)
year, constitute payments required to be made on account of
principal of Indebtedness initially expressed to mature more than
one (1) year from origination.
Default -- means an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an Event of
Default.
Dollars or $ -- means United States of America dollars.
Environmental Protection Law -- means any federal, state, county,
regional or local law, statute or regulation (including, without limitation,
CERCLA, RCRA and ▇▇▇▇) enacted in connection with or relating to the
protection or regulation of the environment, including, without limitation,
those laws, statutes and regulations regulating the disposal, removal,
production, storing, refining, handling, transferring, processing or
transporting of Hazardous Substances, and any regulations issued or
promulgated in connection with such statutes by any Governmental Authority,
and any orders, decrees or judgments issued by any court of competent
jurisdiction in connection with any of the foregoing.
As used in this definition:
CERCLA -- means the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended from time to time
(by ▇▇▇▇ or otherwise), and all rules and regulations promulgated in
connection therewith.
RCRA -- means the Resource Conservation and Recovery Act of 1976, as
amended from time to time, and all rules and regulations promulgated in
connection therewith.
▇▇▇▇ -- means the Superfund Amendments and Reauthorization Act of
1986, as amended from time to time, and all rules and regulations
promulgated in connection therewith.
ERISA -- means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
ERISA Affiliate -- means any corporation or trade or business that:
(a) is a member of the same "controlled group of corporations"
(within the meaning of section 414(b) of the IRC) as the Company; or
(b) is under "common control" (within the meaning of section
414(c) of the IRC) with the Company.
Event of Default -- Section 8.1.
Exchange Act -- means the Securities Exchange Act of 1934, as amended
from time to time.
Fair Market Value -- means, at any time, with respect to any Property,
the sale value of such Property that would be realized in an arm's-length
sale at such time between an informed and willing buyer and an informed and
willing seller under no compulsion to buy or sell, respectively.
Funded Debt -- means, at any time, in respect of any Person,
Indebtedness of such Person with maturities of greater than one (1) year
(including, without limitation, all current portions thereof) as would
appear on a balance sheet of such Person prepared in accordance with GAAP at
such time.
GAAP -- means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of
Certified Public Accountants and the Financial Accounting Standards Board
and in such statements, opinions and pronouncements of such other entities
with respect to financial accounting of for-profit entities as shall be
accepted by a substantial segment of the accounting profession in the United
States of America.
Governmental Authority -- means:
(a) the government of
(i) the United States of America and any state or other
political subdivision thereof, or
(ii) any other jurisdiction (A) in which the Company or any
Subsidiary conducts all or any part of its business or (B) that
asserts jurisdiction over the conduct of the affairs or Properties
of the Company or any Subsidiary; and
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
Guaranty -- means, with respect to any Person (for the purposes of this
definition, the "Guarantor"), any obligation (except the endorsement in the
ordinary course of business of negotiable instruments for deposit or
collection) of the Guarantor guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person (the "Primary
Obligor") in any manner, whether directly or indirectly, including, without
limitation, obligations incurred through an agreement, contingent or
otherwise, by the Guarantor:
(a) to purchase such indebtedness or obligation or any Property
constituting security therefor;
(b) to advance or supply funds
(i) for the purpose of payment of such indebtedness, dividend or
other obligation, or
(ii) to maintain working capital or other balance sheet
condition or any income statement condition of the Primary Obligor
or otherwise to advance or make available funds for the purchase or
payment of such indebtedness, dividend or other obligation;
(c) to lease Property or to purchase Securities or other Property or
services primarily for the purpose of assuring the owner of such
indebtedness or obligation of the ability of the Primary Obligor to make
payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of the indebtedness or obligation
of the Primary Obligor against loss in respect thereof.
For purposes of computing the amount of any Guaranty in connection with any
computation of indebtedness or other liability, it shall be assumed that the
indebtedness or other liabilities that are the subject of such Guaranty are
direct obligations of the issuer of such Guaranty.
Hazardous Substances -- means any and all pollutants, contaminants,
toxic or hazardous wastes and any other substances that might pose a hazard
to health or safety, the removal of which may be required or the generation,
manufacture, refining, production, processing, treatment, storage, handling,
transportation, transfer, use, disposal, release, discharge, spillage,
seepage or filtration of which is or shall be, in each of the foregoing
cases, restricted, prohibited or penalized by any applicable law.
Health Laws -- means any federal, state, county, regional or local law,
statute or regulation enacted in connection with, or relating to, the
processing, production, use, marketing or sale of meat, poultry, feed and
other food products (and any similar businesses of the Company and the
Subsidiaries), including, without limitation, all regulations issued or
promulgated in connection with such laws and statutes by any Governmental
Authority (including, without limitation, the United States Department of
Agriculture and the United States Food and Drug Administration), and any
orders, decrees or judgments issued by any court of competent jurisdiction
in connection with any of the foregoing.
▇▇▇▇▇▇ Development -- means Hudson Development Corporation, an Arkansas
corporation.
Hudson Foreign Sales -- means ▇▇▇▇▇▇ Foods Foreign Sales, Inc., a
corporation organized under the laws of the United States Virgin Islands.
▇▇▇▇▇▇ Poland -- means ▇▇▇▇▇▇ Foods Poland s.p. zo.o, a limited
liability company organized under the laws of Poland.
Indebtedness -- means, at any time, with respect to any Person, without
duplication:
(a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of Property acquired by, or services rendered
to, such Person,
(b) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to any
Property acquired by such Person,
(c) the present value, determined in accordance with GAAP, of all
obligations of such Person under leases which shall have been or should
be recorded as Capital Leases in accordance with GAAP,
(d) all indebtedness or other payment obligations for the deferred
purchase price of property or services secured by any Lien upon or in
any Property owned by such Person whether or not such Person has assumed
or become liable for the payment of such indebtedness,
(e) indebtedness arising under acceptance facilities, in connection
with surety or other similar bonds, and the undrawn maximum face amount
of all outstanding letters of credit issued for the account of such
Person and, without duplication, the outstanding amount of all drafts
drawn thereunder,
(f) Swaps of such Person,
(g) all liabilities of such Person in respect of unfunded vested
benefits under Pension Plans and all asserted withdrawal liabilities of
such Person or a commonly controlled entity to a Multiemployer Plan, and
(h) all direct or indirect Guaranties by such Person of indebtedness
described in this definition of any other Person;
provided, that, for purposes of this definition, Trade Debt and Operating Leases
shall not be included.
As used in this definition:
Swaps -- means, with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps and similar
obligations obligating such Person to make payments, whether
periodically or upon the happening of a contingency. For purposes of
this Agreement, the amount of the obligation under any Swap shall be
the amount determined in respect thereof as of the end of the then
most recently ended fiscal quarter of such Person, based on the
assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating
to such Swap provides for the netting of amounts payable by and to
such Person thereunder or if any such agreement provides for the
simultaneous payment of amounts by and to such Person, then in each
such case, the amount of such obligation shall be the net amount so
determined.
Trade Debt -- means trade accounts payable incurred in the
ordinary course of business with an original maturity or due date of
not greater than one hundred eighty (180) days from the creation
thereof (and which are not overdue for more than thirty (30) days).
Institutional Investor -- means the Purchasers, any affiliate of any of
the Purchasers and any holder or beneficial owner of Notes that is an
"accredited investor" as defined in section 2(15) of the Securities Act.
Intangible Assets -- Section 6.6.
IRC -- means the Internal Revenue Code of 1986, together with all rules
and regulations promulgated pursuant thereto, as amended from time to time.
IRS -- means the Internal Revenue Service and any successor agency.
Leverage Ratio -- Section 6.8(a).
Lien -- means any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and including, but
not limited to, the security interest lien arising from a mortgage,
encumbrance, pledge, conditional sale, sale with recourse or a trust
receipt, or a lease, consignment or bailment for security purposes. The term
"Lien" includes, without limitation, reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting
real Property and includes, without limitation, with respect to stock,
stockholder agreements, voting trust agreements, buy-back agreements and all
similar arrangements. For the purposes hereof, the Company and each
Subsidiary shall be deemed to be the owner of any Property that it shall
have acquired or holds subject to a conditional sale agreement, Capital
Lease or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes, and such
retention or vesting is deemed a Lien. The term "Lien" does not include
negative pledge clauses in agreements relating to the borrowing of money.
Make-Whole Amount -- means, with respect to any date (a "Prepayment
Date") and any principal amount ("Prepaid Principal") of Notes required for
any reason to be paid prior to the regularly scheduled maturity thereof on
such Prepayment Date, the greater of
(a) Zero Dollars ($0), and
(b) (i) the sum of the present values of the then remaining
scheduled payments of principal and interest (minus, in the case of the
first of such interest payments, and prior to determining the present
value thereof, the amount of interest accrued on such Prepaid Principal
since the scheduled interest payment date immediately preceding such
Prepayment Date) that would be payable in respect of such Prepaid
Principal but for such prepayment, minus
(ii) such Prepaid Principal.
In determining such present values, a discount rate equal to the Make-Whole
Discount Rate with respect to such Prepayment Date and Prepaid Principal divided
by twelve (12), and a discount period of one (1) month of thirty (30) days,
shall be used.
Make-Whole Discount Rate -- means, with respect to any Prepayment Date
and Prepaid Principal, a rate equal to the sum of fifty one-hundredths
percent (.50%) plus the Treasury Rate determined as of such Prepayment Date.
As used in this definition:
Treasury Rate -- means, with respect to the calculation of a
Make-Whole Amount in respect of any prepayment or acceleration of any
Notes,
(a) the yield reported on the day on which such calculation is
being made, as the yield, based on the "bid" price, on the display
designated as "Page 678" on the Telerate Service (or such other
display as may replace Page 678 on the Telerate Service) providing
the most current yields for actively traded United States Treasury
securities with maturities corresponding to the remaining Weighted
Average Life to Maturity of the Prepaid Principal (such Weighted
Average Life to Maturity being determined as of the date of such
calculation and rounded to the nearest month), or
(b) if and only if the source of data described in clause (a)
ceases to exist or fails to report such yield, a reasonably
comparable electronic service as may be designated by the Required
Holders, or
(c) if and only if the source of data specified in clause (a) of
this definition ceases to exist or fails to report such yield and
the Required Holders shall fail to agree upon a comparable
electronic service pursuant to clause (b) of this definition, such
yield reported under the heading "This Week" and under the caption
"Treasury Constant Maturities" of the maturity corresponding to the
remaining Weighted Average Life to Maturity of the Prepaid Principal
(such Weighted Average Life to Maturity being determined as of the
date of such calculation and rounded to the nearest month) as most
recently published and made available to the public in the
statistical release designated "H.15(519)" or any successor
publication that is published weekly by the Federal Reserve System
and that establishes yields on actively traded United States
Treasury securities or, if no such successor publication is
available, then any other source of current information in respect
of interest rates on the securities of the United States of America
that is generally available and, in the judgment of the Required
Holders, provides information reasonably comparable to the H.15(519)
statistical release.
If no maturity exactly corresponds to such rounded Weighted
Average Life to Maturity, yields for the two (2) most closely
corresponding published maturities next above and below the rounded
Weighted Average Life to Maturity of the Prepaid Principal shall be
calculated pursuant to the immediately preceding sentence and the
Treasury Rate shall be interpolated from such yields on a
straight-line basis, rounding with respect to each such relevant
period to the nearest month.
Margin Security -- means "margin stock" within the meaning of
Regulations G, T and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R., Chapter II, as amended from time to time.
Material Adverse Effect -- means a material adverse effect on
(a) the business, prospects, profits, Properties or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a
whole,
(b) the ability of the Company to perform its obligations set forth
in this Agreement and in the Notes, or
(c) the validity or enforceability of any of the terms or provisions
of this Agreement or the Notes.
Most Recent 10-K -- means the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1995, as filed with the Securities and
Exchange Commission.
Multiemployer Plan -- means any "multiemployer plan" (as defined in
section 3(37) of ERISA) in respect of which the Company or any ERISA
Affiliate is an "employer" (as such term is defined in section 3 of ERISA).
Net Tangible Assets -- Section 6.13.
Note Purchase Agreements -- Section 1.2(c).
Notes -- Section 1.1.
Offer Determination Date -- Section 4.3(b).
▇▇▇▇ -- means ▇▇▇▇ Transportation, Inc., a Kansas corporation.
Operating Lease -- Section 6.10.
Other Purchaser -- Section 1.2(c).
PBGC -- means the Pension Benefit Guaranty Corporation and any successor
corporation or governmental agency.
Pension Plan -- means, at any time, any "employee pension benefit plan"
(as such term is defined in section 3 of ERISA) maintained at such time by
the Company or any ERISA Affiliate for employees of the Company or such
ERISA Affiliate, excluding any Multiemployer Plan.
Person -- means an individual, sole proprietorship, partnership,
corporation, trust, limited liability company, joint venture, unincorporated
organization, or a government or agency or political subdivision thereof.
Prepaid Principal -- has the meaning assigned to such term in the
definition of "Make-Whole Amount" set forth in this Section 9.1.
Prepayment Date -- has the meaning assigned to such term in the
definition of "Make-Whole Amount" set forth in this Section 9.1.
Property -- means any interest in any kind of property or asset, whether
real, personal or mixed, and whether tangible or intangible.
Purchasers -- Section 1.2(c).
Rabobank -- means Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.
("Rabobank Nederland"), New York Branch.
Required Holders -- means, at any time, the holders of more than
sixty-six and two-thirds percent (66-2/3%) in principal amount of the Notes
at the time outstanding (exclusive of Notes then owned by any one or more of
the Company, any Subsidiary and any Affiliate).
Required Principal Prepayment -- Section 4.1(b).
Securities Act -- means the Securities Act of 1933, as amended from time
to time.
Security -- means "security" as defined in section 2(1) of the
Securities Act.
Senior Financial Officer -- means the chief financial officer, the
principal accounting officer, the treasurer or the comptroller of the
Company.
Senior Officer -- means the chief executive officer, the chief operating
officer, the president, the chief financial officer, the treasurer or the
secretary of the Company.
Source -- Section 1.3(b).
Subordinated Debt -- means, at any time, any unsecured Indebtedness of
the Company or a Subsidiary that is in any respect subordinate or junior in
right of payment or otherwise to the Indebtedness evidenced by the Notes or
to any other Indebtedness of the Company or any Subsidiary.
Subsidiary -- means, at any time, any corporation of which the Company
owns, directly or indirectly, more than fifty percent (50%) (by number of
votes) of each class of the Voting Stock of such corporation at such time.
Subsidiary Guaranty -- means a Guaranty Agreement, substantially in the
form of Exhibit E hereto, executed by a Subsidiary in favor of the holders
of Notes pursuant to Section 6.16 hereof guarantying the Company's
obligations under the Note Purchase Agreements and the Notes.
Surviving Corporation -- Section 6.5(a).
Tangible Net Worth -- Section 6.6.
Total Subsidiary Indebtedness -- Section 6.8(c).
Transfers -- Section 6.5(c).
Voting Stock -- means capital stock of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect corporate directors (or Persons performing
similar functions).
Weighted Average Life to Maturity -- means, with respect to any
Prepayment Date and Prepaid Principal, the number of years obtained by
dividing (a) the Remaining Dollar-Years with respect to such Prepayment Date
and such Prepaid Principal by (b) such Prepaid Principal.
As used in this definition:
Remaining Dollar-Years -- means, with respect to any Prepayment Date
and Prepaid Principal, the result obtained by
(a) multiplying an amount equal to each then remaining required
payment of principal (including repayment at final maturity) of such
Indebtedness unpaid immediately prior to such date, by
(ii) the number of years (calculated to the nearest
one-twelfth (1/12)) that will elapse between such date and the
date each such required payment of principal is due, and
(b) calculating the sum of each of the products obtained in the
preceding clause (a).
Wholly-Owned Subsidiary -- means, at any time, any Subsidiary one
hundred percent (100%) of all of the equity Securities (except directors'
qualifying shares) and voting Securities of which are owned by any one or
more of the Company and the other Wholly-Owned Subsidiaries at such time.
9.2 GAAP.
Unless otherwise provided herein, all financial statements delivered in
connection herewith will be prepared in accordance with GAAP as in effect on the
date of, or during the period covered by, such financial statement. Where the
character or amount of any asset or liability or item of income or expense, or
any consolidation or other accounting computation is required to be made for any
purpose hereunder, it shall be done in accordance with GAAP as in effect on the
date of, or at the end of the period covered by, the financial statements from
which such asset, liability, item of income, or item of expense, is derived, or,
in the case of any such computation, as in effect on the date as of which such
computation is required to be determined, provided, that if any term defined
herein includes or excludes amounts, items or concepts that would not be
included in or excluded from such term if such term were defined with reference
solely to GAAP, such term will be deemed to include or exclude such amounts,
items or concepts as set forth herein. Whenever a calculation based on the
consolidated financial position or consolidated results of operations of a group
of Persons is required hereby, investments by members of the group in Persons
which are excluded hereby from such group shall be accounted for using the cost
method.
9.3 Directly or Indirectly.
Where any provision herein refers to action to be taken by any Person, or that
such Person is prohibited from taking, such provision shall be applicable
whether such action is taken directly or indirectly by such Person, including
actions taken by or on behalf of any partnership in which such Person is a
general partner.
9.4 Section Headings and Table of Contents and Construction.
(a) Section Headings and Table of Contents, etc. The titles of the
Sections of this Agreement and the Table of Contents of this Agreement
appear as a matter of convenience only, do not constitute a part of this
Agreement and shall not affect the construction hereof. The words
"herein," "hereof," "hereunder" and "hereto" refer to this Agreement as
a whole and not to any particular Section or other subdivision.
(b) Construction. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of
each other covenant contained herein, and compliance with any one
covenant shall not (absent such an express contrary provision) be deemed
to excuse compliance with one or more other covenants.
9.5 Governing Law.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, INTERNAL NEW YORK LAW.
10. MISCELLANEOUS
10.1 Communications.
(a) Method; Address. All communications hereunder or under the Notes
shall be in writing, shall be hand delivered, deposited into the United
States mail (registered or certified mail), postage prepaid, sent by
overnight courier or sent by facsimile transmission (confirmed by
delivery by overnight courier) and shall be addressed,
(i) if to the Company,
▇▇▇▇▇▇ Foods, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, Chief Financial Officer
and Executive Vice President, and ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Secretary and Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇,
or at such other address as the Company shall have furnished in
writing to each Purchaser and all other holders of the Notes at the time
outstanding, and
(ii) if to any of the holders of the Notes,
(A) if such holders are the Purchasers, at their respective
addresses set forth on Annex 1 hereto, and further including any parties
referred to on such Annex 1 that are required to receive notices in
addition to such holders of the Notes, and
(B) if such holders are not the Purchasers, at their respective
addresses set forth in the register for the registration and transfer of
Notes maintained pursuant to Section 5.1 hereof,
or to any such party at such other address as such party may designate by notice
duly given in accordance with this Section 10.1 to the Company (which other
address shall be entered in such register).
(b) When Given. Any communication properly addressed and sent in
accordance with Section 10.1(a) hereof shall be deemed to be received when
actually received at the address of the addressee.
10.2 Reproduction of Documents.
This Agreement and all documents relating hereto, including, without limitation,
(a) consents, waivers and modifications that may hereafter be executed,
(b) documents received by you at the Closing of your purchase of Notes
(except the Notes themselves), and
(c) financial statements, certificates and other information previously
or hereafter furnished to any Purchaser or any other holder of Notes,
may be reproduced by such Purchaser or such other holder of Notes by any
photographic, photostatic, microfilm, micro-card, miniature photographic,
digital or other similar process and each Purchaser or such other holder of
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 such
Purchaser or such other holder of Notes in the regular course of business) and
that any enlargement, facsimile or further reproduction of such reproduction
shall likewise be admissible in evidence. Nothing in this Section 10.2 shall
prohibit the Company or any Purchaser or any other holder of Notes from
contesting the validity or the accuracy of any such reproduction.
10.3 Survival.
All warranties, representations, certifications and covenants made by the
Company herein or in any certificate or other instrument delivered by the
Company or on behalf of the Company hereunder shall be considered to have been
relied upon by you and shall survive the delivery to you of the Notes regardless
of any investigation made by you or on your behalf. All statements in any such
certificate or other instrument shall constitute warranties and representations
by the Company hereunder.
10.4 Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto. The provisions hereof are intended to
be for the benefit of all holders, from time to time, of Notes, and shall be
enforceable by any such holder, whether or not an express assignment to such
holder of rights hereunder shall have been made by any Purchaser or any
Purchaser's successor or assign.
10.5 Amendment and Waiver.
(a) General Requirements. This Agreement may be amended, and the
observance of any term hereof may be waived, with (and only with) the
written consent of the Company and the Required Holders, provided that
(i) no such amendment or waiver shall, without the written consent
of the holders of all Notes (exclusive of Notes held by the Company, any
Subsidiary or any Affiliate) at the time outstanding,
(A) subject to Section 8 hereof, change the amount or time of
any prepayment or payment of principal or Make-Whole Amount or the
rate or time of payment of interest,
(B) amend Section 6.19 or Section 8 hereof,
(C) amend the definition of "Required Holders," or
(D) amend this Section 10.5; and
(ii) no amendment or waiver of any of the provisions of Section 1
through Section 4 hereof, inclusive, or any defined term used therein,
shall be effective as to any Purchaser or any other holder of Notes
unless agreed and consented to by such Purchaser or such other holder of
Notes in writing.
(b) Solicitation.
(i) Solicitation. The Company shall not solicit, request or
negotiate for or with respect to any proposed waiver or amendment of any
of the provisions hereof or the Notes unless each Purchaser and each
other holder of the Notes (irrespective of the amount of Notes then
owned by it) shall be provided by the Company with sufficient
information to enable it to make an informed decision with respect
thereto. Executed or true and correct copies of any waiver or consent
effected pursuant to the provisions of this Section 10.5 shall be
delivered by the Company to each Purchaser and each other holder of
outstanding Notes forthwith following the date on which the same shall
have been executed and delivered by all holders of outstanding Notes
required to consent or agree to such waiver or consent.
(ii) Payment. The Company shall not, directly or indirectly, pay or
cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, or grant any security, to any
Purchaser or any other holder of Notes as consideration for or as an
inducement to the entering into by any holder of Notes of any waiver or
amendment of any of the terms and provisions hereof unless such
remuneration is concurrently paid, or security is concurrently granted,
ratably to all of the Purchasers and the other holders of all Notes then
outstanding.
(iii) Scope of Consent. Any consent made pursuant to this Section
10.5 by a holder of Notes that has transferred or has agreed to transfer
its Notes to the Company, any Subsidiary or any Affiliate and has
provided or has agreed to provide such written consent as a condition to
such transfer shall be void and of no force and effect except solely as
to such holder, and any amendments effected or waivers granted or to be
effected or granted that would not have been or would not be so effected
or granted but for such consent (and the consents of all other holders
of Notes that were acquired under the same or similar conditions) shall
be void and of no force and effect, retroactive to the date such
amendment or waiver initially took or takes effect, except solely as to
such holder.
(c) Binding Effect. Except as provided in Section 10.5(a) and Section
10.5(b)(iii) hereof, any amendment or waiver consented to as provided in
this Section 10.5 shall apply equally to all Purchasers and all other
holders of Notes and shall be binding upon them and upon each future holder
of any Note and upon the Company whether or not such Note shall have been
marked to indicate such amendment or waiver. No such amendment or waiver
shall extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right
consequent thereon.
10.6 Expenses.
The Company shall pay when billed
(a) all expenses incurred by any Purchaser and any other holder of Notes
in connection with the enforcement of any rights under this Agreement and
the Notes (including, without limitation, all fees and expenses of such
Purchaser's or such other holder's special counsel), and
(b) all expenses relating to the consideration, negotiation, preparation
or execution of any amendments, waivers or consents pursuant to Section 10.5
and the other terms and provisions hereof, whether or not any such
amendments, waivers or consents are executed, including, without limitation
any amendments, waivers or consents resulting from any work-out,
restructuring or similar proceedings relating to the performance by the
Company of its obligations under this Agreement or the Notes.
10.7 Payments on Notes.
(a) Manner of Payment. The Company shall pay all amounts payable with
respect to each Note (without any presentment of such Notes and without any
notation of such payment being made thereon) by crediting, by federal funds
bank wire transfer, the account of the holder thereof in any bank in the
United States of America as may be designated in writing by such holder, or
in such other manner as may be reasonably directed or to such other address
in the United States of America as may be reasonably designated in writing
by such holder. Annex 1 hereto shall be deemed to constitute notice,
direction or designation (as appropriate) to the Company with respect to
payments as aforesaid. In the absence of such written direction, all amounts
payable with respect to each Note shall be paid by check mailed and
addressed to the registered holder of such Note at the address shown in the
register maintained by the Company pursuant to Section 5.1 hereof.
(b) Payments Due on Holidays. If any payment due on, or with respect to,
any Note shall fall due on a day other than a Business Day, then such
payment shall be made on the first Business Day following the day on which
such payment shall have so fallen due; provided that if all or any portion
of such payment shall consist of a payment of interest, for purposes of
calculating such interest, such payment shall be deemed to have been
originally due on such first following Business Day, such interest shall
accrue and be payable to (but not including) the actual date of payment, and
the amount of the next succeeding interest payment shall be adjusted
accordingly.
(c) Payments, When Received. Any payment to be made to the holders of
Notes hereunder or under the Notes shall be deemed to have been made on the
Business Day such payment actually becomes available to such holder at such
holder's bank prior to 11:00 a.m. (local time of such bank).
10.8 Jurisdiction; Service of Process
THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES, OR ANY
ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE ENFORCE ANY JUDGMENT IN RESPECT OF
ANY BREACH HEREUNDER OR UNDER THE NOTES, BROUGHT BY ANY PURCHASER OR ANY OTHER
REGISTERED HOLDER OF A NOTE AGAINST THE COMPANY OR ANY OF ITS PROPERTY, MAY BE
BROUGHT BY SUCH PERSON IN THE COURTS OF THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK OR ANY STATE COURT SITTING IN NEW YORK, NEW YORK,
AS SUCH PURCHASER OR OTHER REGISTERED HOLDER OF A NOTE MAY IN ITS SOLE
DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS AGREEMENT, THE
COMPANY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE IN PERSONAM
JURISDICTION OF EACH SUCH COURT, AND AGREES THAT PROCESS SERVED EITHER
PERSONALLY OR BY REGISTERED MAIL SHALL CONSTITUTE, TO THE EXTENT PERMITTED BY
LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUCH SUIT, AND THE COMPANY IRREVOCABLY
WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE,
ANY CLAIM THAT THE COMPANY IS NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF ANY
SUCH COURT. RECEIPT OF PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS
EVIDENCED BY A DELIVERY RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR
ANY COMMERCIAL DELIVERY SERVICE. IN ADDITION, THE COMPANY HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT THE COMPANY
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND/OR THE NOTES,
BROUGHT IN SUCH COURTS, AND HEREBY IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE
ABILITY OF ANY PURCHASER OR OTHER REGISTERED HOLDER OF A NOTE TO SERVE ANY SUCH
WRITS, PROCESS OR SUMMONSES IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO
OBTAIN JURISDICTION OVER THE COMPANY IN SUCH OTHER JURISDICTION, AND IN SUCH
MANNER, AS MAY BE PERMITTED BY APPLICABLE LAW. THE COMPANY AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
10.9 Entire Agreement.
This Agreement constitutes the final written expression of all of the terms
hereof and is a complete and exclusive statement of those terms.
10.10 Duplicate Originals, Execution in Counterpart.
Two (2) or more duplicate originals hereof may be signed by the parties, each of
which shall be an original but all of which together shall constitute one and
the same instrument. This Agreement may be executed in one or more counterparts
and shall be effective when at least one counterpart shall have been executed by
each party hereto, and each set of counterparts that, collectively, show
execution by each party hereto shall constitute one duplicate original.
[Remainder of page intentionally blank; next page is signature page.]
If this Agreement is satisfactory to you, please so indicate by
signing the acceptance at the foot of a counterpart hereof and returning such
counterpart to the Company, whereupon this Agreement shall become binding
between us in accordance with its terms.
Very truly yours,
▇▇▇▇▇▇ FOODS, INC.
By
Name:
Title:
Accepted:
[PURCHASER]
By
Name:
Title:
ANNEX 1
INFORMATION AS TO PURCHASERS
ANNEX 1
INFORMATION AS TO PURCHASER (Cont.)
NOTE PURCHASE AGREEMENT
Annex 1-1
NOTE PURCHASE AGREEMENT
Annex 2-1
ANNEX 2
PAYMENT INSTRUCTIONS AT CLOSING
NOTE PURCHASE AGREEMENT
Annex 3-1
ANNEX 3
INFORMATION AS TO COMPANY AND SUBSIDIARIES
ANNEX 2
INFORMATION AS TO COMPANY AND SUBSIDIARIES (Cont.)
NOTE PURCHASE AGREEMENT
Annex 3-1
NOTE PURCHASE AGREEMENT
Annex 4-1
ANNEX 4
INFORMATION AS TO BUSINESS COVENANTS
FORM OF NOTE
A-2
EXHIBIT A
FORM OF NOTE
▇▇▇▇▇▇ FOODS, INC.
6.69% SENIOR NOTE DUE DECEMBER 28, 2005
No. R-[_] PPN: 443782 A# 4
$[________] December 28, 1995
▇▇▇▇▇▇ FOODS, INC. (the "Company"), a Delaware corporation, for value received,
hereby promises to pay to [______] or registered assigns the principal sum of
[______] DOLLARS ($[______]) on December 28, 2005 and to pay interest (computed
on the basis of a 360-day year of twelve 30-day months) on the unpaid principal
balance hereof from the date of this Note at the rate of six and sixty-nine
one-hundreds percent (6.69%) per annum, payable monthly in arrears on the
twenty-eighth (28th) day of each calendar month in each year, commencing on the
later of January 28, 1996 or the first interest payment date following the date
of this Note, until the principal amount hereof shall become due and payable;
and to pay on demand interest on any overdue principal (including any overdue
partial payment of principal) and Make-Whole Amount, if any, and (to the extent
permitted by applicable law) on any overdue installment of interest (the due
date of such payments to be determined without giving effect to any grace
period), at a rate per annum equal to the lesser of (a) the highest rate allowed
by applicable law or (b) the greater of (i) eight and sixty-nine one-hundredths
percent (8.69%), or (ii) two percent (2%) per annum in excess of the prime rate
of interest of ▇▇▇▇▇▇ Guaranty Trust Company in New York City as publicly
announced and in effect on the first day of each calendar month, from month to
month.
Payments of principal, Make-Whole Amount, if any, and interest shall be made in
such coin or currency of the United States of America as at the time of payment
is legal tender for the payment of public and private debts to the registered
holder hereof at the address shown in the register maintained by the Company for
such purpose, in the manner provided in the Note Purchase Agreement (defined
below).
This Note is one of an issue of Notes of the Company issued in an aggregate
principal amount limited to Fifty-Five Million Dollars ($55,000,000) pursuant to
the Company's separate Note Purchase Agreements (collectively, as amended from
time to time, the "Note Purchase Agreement"), each dated as of December 28,
1995, with the purchasers listed on Annex 1 thereto, is entitled to the benefits
thereof and subject to the terms thereof, and the terms of which are
incorporated herein by reference. Capitalized terms used herein and not defined
herein have the meanings specified in the Note Purchase Agreement.
As provided in the Note Purchase Agreement, (i) a portion of the principal of
this Note must be repaid (and will become due and payable) prior to the stated
maturity hereof, (ii) all or a portion of the principal of this Note may be
repaid at the option of the Company (and will, on the exercise of such option,
become due and payable) prior to the stated maturity hereof and a Make-Whole
Amount may be due in connection therewith, and (iii) all of the principal of
this Note (together with any applicable Make-Whole Amount) may, under certain
circumstances, be declared due and payable in the manner and with the effect
provided in the Note Purchase Agreement.
This Note is a registered Note and is transferable only by surrender thereof at
the principal office of the Company as specified in the Note Purchase Agreement,
duly endorsed or accompanied by a written instrument of transfer duly executed
by the registered holder of this Note or its attorney duly authorized in
writing.
THIS NOTE AND THE NOTE PURCHASE AGREEMENT ARE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, INTERNAL NEW YORK LAW.
▇▇▇▇▇▇ FOODS, INC.
By:
Name:
Title:
FORM OF SUBSIDIARY GUARANTY
E-3
EXHIBIT E
FORM OF SUBSIDIARY GUARANTY
GUARANTY
THIS GUARANTY (as amended from time to time, this "Guaranty"), dated as of
[_______ __, ____], by [____________] (together with its successors and assigns,
the "Guarantor"), a[n] [__________] corporation, in favor of each of the holders
of Notes (as defined below).
W I T N E S S E T H:
WHEREAS, ▇▇▇▇▇▇ Foods, Inc., a Delaware corporation (together with its
successors, assigns and transferees, the "Company"), entered into those certain
separate Note Purchase Agreements (collectively, as amended, modified, waived or
restated from time to time, the "Note Purchase Agreement"), each dated as of
December 28, 1995, with, respectively, each of the purchasers listed on Annex 1
thereto (the "Purchasers"), which provide, among other things, for the issuance
and sale to the Purchasers of the Company's 6.69% Senior Notes due December 28,
2005 (which notes, together with any notes delivered in substitution or exchange
for any such notes, are herein referred to individually as a "Note," and
collectively, as the "Notes") in the aggregate principal amount of Fifty-Five
Million Dollars ($55,000,000); and
WHEREAS, the Purchasers, subject to the terms and conditions of the Note
Purchase Agreement, agreed to purchase the Notes from the Company on the
condition that, among other things, the Company shall, pursuant to Section 6.16
of the Note Purchase Agreement, cause the Guarantor to guaranty the payment and
performance of all obligations of the Company arising under, or in respect of,
the Notes, the Note Purchase Agreement, and all other documents executed in
connection therewith, and agree to be bound by the terms and provisions of the
Note Purchase Agreement, all as hereinafter provided; and
WHEREAS, the Guarantor is a [wholly-owned] subsidiary of the Company and has or
will derive direct and indirect economic, financial and other benefits from the
Indebtedness incurred under the Note Purchase Agreement and the Notes by the
Company, and under this Guaranty by the Guarantor, and the incurrence of such
Indebtedness is in the best interests of the Guarantor; and
WHEREAS, the Guarantor desires and is willing to execute this Guaranty in
accordance with the requirements of the Note Purchase Agreement, and all acts
and proceedings required by law and by the certificate of incorporation and
bylaws of the Guarantor necessary to constitute this Guaranty a valid and
binding agreement for the uses and purposes set forth herein in accordance with
its terms have been done and taken, and the execution and delivery hereof has
been in all respects duly authorized;
NOW THEREFORE, in consideration of the premises and mutual agreements set forth
herein, and other good and valuable consideration to the Guarantor paid (the
receipt and sufficiency of which are hereby acknowledged), the Guarantor hereby
agrees as follows:
11. GUARANTY AND OTHER RIGHTS AND UNDERTAKINGS
11.1 Guarantied Obligations
The Guarantor hereby irrevocably, unconditionally and absolutely guarantees to
each holder of Notes, as and for the Guarantor's own debt, until final and
indefeasible payment has been made:
(a) the due and punctual payment by the Company of the principal of, and
interest, and the Make-Whole Amount (if any) on, the Notes at any time
outstanding and the due and punctual payment of all other amounts payable,
and all other indebtedness owing, by the Company to the holders of the Notes
under the Note Purchase Agreement and the Notes (all such obligations so
guarantied are herein collectively referred to as the "Guarantied
Obligations"), in each case when and as the same shall become due and
payable, whether at maturity, pursuant to mandatory or optional prepayment,
by acceleration or otherwise, all in accordance with the terms and
provisions thereof; it being the intent of the Guarantor that the guaranty
set forth herein (the "Unconditional Guaranty") shall be a guaranty of
payment and not a guaranty of collection; and
(b) the punctual and faithful performance, keeping, observance, and
fulfillment by the Company of all duties, agreements, covenants and
obligations of the Company contained in the Note Purchase Agreement and the
Notes.
11.2 Performance Under Note Purchase Agreement
In the event the Company fails to make, on or before the due date thereof, any
payment of the principal of, or interest or the Make-Whole Amount (if any) on,
the Notes or of any other amounts payable, or any other indebtedness owing, to
the holders of the Notes under the Note Purchase Agreement or any of the Notes
or if the Company shall fail to perform, keep, observe, or fulfill any other
obligation referred to in clause (a) or clause (b) of Section 1.1 hereof in the
manner provided in the Notes or in the Note Purchase Agreement after, in each
case, giving effect to any applicable grace periods or cure provisions or
waivers or amendments, the Guarantor shall cause forthwith to be paid the
moneys, or to be performed, kept, observed, or fulfilled each of such
obligations, in respect of which such failure has occurred in accordance with
the terms and provisions of the Note Purchase Agreement and the Notes. In
furtherance of the foregoing, if an Event of Default shall exist, all of the
Guarantied Obligations shall, in the manner and subject to the limitations
provided in the Note Purchase Agreement for the acceleration of the Notes
(including, without limitation, the provisions related to the annulment
thereof), forthwith become due and payable without notice, regardless of whether
the acceleration of the Notes shall be stayed, enjoined, delayed or otherwise
prevented.
11.3 Waivers
To the fullest extent permitted by law, the Guarantor does hereby waive:
(a) notice of acceptance of this Guaranty;
(b) notice of any purchase of the Notes under the Note Purchase
Agreement, or the creation, existence or acquisition of any of the
Guarantied Obligations, subject to the Guarantor's right to make inquiry of
each holder of Notes to ascertain the amount of the Guarantied Obligations
at any reasonable time;
(c) notice of the amount of the Guarantied Obligations, subject to the
Guarantor's right to make inquiry of each holder of Notes to ascertain the
amount of the Guarantied Obligations at any reasonable time;
(d) notice of adverse change in the financial condition of the Company
or any other fact that might increase or expand the Guarantor's risk
hereunder;
(e) notice of presentment for payment, demand, protest, and notice
thereof as to the Notes or any other instrument;
(f) notice of any Default or Event of Default;
(g) all other notices and demands to which the Guarantor might otherwise
be entitled (except if such notice or demand is specifically otherwise
required to be given to the Guarantor pursuant to the terms of this
Guaranty);
(h) the right by statute or otherwise to require any holder of Notes to
institute suit against the Company or any other Person or to exhaust the
rights and remedies of such holder of Notes against the Company or any other
Person, the Guarantor being bound to the payment of each and all Guarantied
Obligations, whether now existing or hereafter accruing, as fully as if such
Guarantied Obligations were directly owing to the holders of Notes by the
Guarantor;
(i) any defense arising by reason of any disability or other defense
(other than the defense that the Guarantied Obligations shall have been
fully and finally performed and indefeasibly paid) of the Company or by
reason of the cessation from any cause whatsoever of the liability of the
Company in respect thereof, and any other defense that the Guarantor may
otherwise have against the Company or any holder of Notes; and
(j) any stay (except in connection with a pending appeal), valuation,
appraisal, redemption or extension law now or at any time hereafter in force
which, but for this waiver, might be applicable to any sale of Property of
the Guarantor made under any judgment, order or decree based on this
Guaranty, and the Guarantor covenants that it will not at any time insist
upon or plead, or in any manner claim or take the benefit or advantage of
such law.
11.4 Certain Waivers of Subrogation, Reimbursement and Indemnity.
The Guarantor hereby acknowledges and agrees that
(a) the Guarantor shall not have any right of subrogation, contribution,
reimbursement, or indemnity whatsoever in respect of the Guarantied
Obligations, and no right of recourse to or with respect to any assets or
Property of the Company,
(b) it will not file any claims against the Company or the estate of the
Company in the course of any proceeding under any applicable bankruptcy or
insolvency law in respect of the rights referred to in this Section 1.4, and
(c) each holder of Notes may specifically enforce the provisions of this
Section 1.4.
Nothing shall discharge or satisfy the obligations of the Guarantor hereunder
except the full and final performance and indefeasible payment of the Guarantied
Obligations.
11.5 Releases
The Guarantor consents and agrees that, without notice to or by the Guarantor
and without impairing, releasing, abating, deferring, suspending, reducing,
terminating or otherwise affecting the obligations of the Guarantor hereunder,
each holder of Notes, in the manner provided herein, by action or inaction, may:
(a) compromise or settle, renew or extend the period of duration or the
time for the payment, or discharge the performance of, or may refuse to, or
otherwise not, enforce, or may, by action or inaction, release all or any
one or more parties to, any one or more of the Notes or the Note Purchase
Agreement;
(b) assign, sell or transfer, or otherwise dispose of, any one or more
of the Notes;
(c) grant waivers, extensions, consents and other indulgences to the
Company or any other Person in respect of any one or more of the Notes or
the Note Purchase Agreement;
(d) amend, modify or supplement in any manner and at any time (or from
time to time) any one or more of the Notes or the Note Purchase Agreement;
(e) release or substitute any one or more of the endorsers or guarantors
of the Guarantied Obligations whether parties hereto or not;
(f) sell, exchange, release or surrender any Property at any time
pledged or granted as security in respect of the Guarantied Obligations,
whether so pledged or granted by the Guarantor or another guarantor of the
Company's obligations under the Note Purchase Agreement and the Notes; and
(g) exchange, enforce, waive, or release, by action or inaction, any
security for the Guarantied Obligations or any other guaranty of any of the
Notes.
11.6 Marshaling
The Guarantor consents and agrees that:
(a) no holder of Notes shall be under any obligation to marshal any
assets in favor of the Guarantor or against or in payment of any or all of
the Guarantied Obligations; and
(b) to the extent the Company or another Person makes a payment or
payments to any holder of Notes, which payment or payments or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside, or required, for any of the foregoing reasons or
for any other reason, to be repaid or paid over to a custodian, trustee,
receiver, or any other party under any bankruptcy law, common law, or
equitable cause, then to the extent of such payment or repayment, the
obligation or part thereof intended to be satisfied thereby shall be revived
and continued in full force and effect as if said payment or payments had
not been made and the Guarantor shall be primarily liable for such
obligation.
11.7 Liability
The Guarantor agrees that its liability in respect of this Guaranty shall be
immediate and shall not be contingent upon the exercise or enforcement by any
holder of Notes of whatever remedies any such holder may have against the
Company or any other Person or the enforcement of any Lien or realization upon
any security any such holder may at any time possess.
11.8 Primary Obligation
The Unconditional Guaranty set forth herein is a primary and original obligation
of the Guarantor and is an absolute, unconditional, continuing and irrevocable
guaranty of payment and performance and shall remain in full force and effect
(except as set forth in Section 1.16 hereof) until the full, final and
indefeasible payment of the Guarantied Obligations without respect to future
changes in conditions, including, without limitation:
(a) any change of law or any invalidity or irregularity with respect to
the issuance or assumption of any obligations (including, without
limitation, the Notes) of or by any of the Company or the Guarantor, or with
respect to the execution and delivery of any agreement (including, without
limitation, the Notes, the Note Purchase Agreement and this Guaranty) of or
by any of the Company or the Guarantor;
(b) the genuineness, validity, regularity or enforceability of any of
the Guarantied Obligations;
(c) any default, failure or delay, willful or otherwise, in the
performance of any obligations by the Company;
(d) any event or condition described in Section 1.5 hereof;
(e) the occurrence of any event or the existence of any condition
specified in Section 8.1(g), Section 8.1(h) or Section 8.1(i) of the Note
Purchase Agreement with respect to the Company or any Subsidiary;
(f) any change in the ownership of the Voting Stock or other equity
Securities of the Company or the Guarantor;
(g) the impossibility or illegality of performance on the part of the
Company under the Note Purchase Agreement, the Notes or this Guaranty;
(h) any change of circumstances of the Company, the Guarantor or any
other Person, whether or not foreseen or foreseeable, whether or not
imputable to the Company or the Guarantor, including, without limitation,
impossibility of performance through fire, explosion, accident, labor
disturbance, floods, droughts, embargoes, wars (whether or not declared),
civil commotions, acts of God or the public enemy, delays or failure of
suppliers or carriers, inability to obtain materials, economic or political
conditions, or any other causes affecting performance, or any other force
majeure, whether or not beyond the control of the Company or the Guarantor
and whether or not of the kind hereinbefore specified;
(i) any attachment, claim, demand, charge, lien, order, process,
encumbrance or any other happening or event or reason, similar or dissimilar
to the foregoing, or any withholding or diminution at the source, by reason
of any taxes, assessments, expenses, indebtedness, obligations or
liabilities of any character, foreseen or unforeseen, and whether or not
valid, incurred by or against any Person, or any claims, demands, charges,
liens or encumbrances of any nature, foreseen or unforeseen, incurred by any
Person, or against any sums payable under the Note Purchase Agreement or the
Notes, so that such sums would be rendered inadequate or would be
unavailable to make the payment herein provided;
(j) any order, judgment, decree, ruling or regulation (whether or not
valid) of any court of any nation or of any political subdivision thereof or
any body, agency, department, official or administrative or regulatory
agency of any nation or any political subdivision thereof; or
(k) any other change or circumstance whatsoever.
11.9 Election to Perform Obligations
Any election by the Guarantor to pay or otherwise perform any of the obligations
of the Company under the Notes or the Note Purchase Agreement shall not release
the Company from such obligations or any of the Company's other obligations
under the Notes or the Note Purchase Agreement.
11.10 No Election
Each holder of Notes shall, individually or collectively, have the right to seek
recourse against the Guarantor to the fullest extent provided for herein for the
Guarantor's obligations under this Guaranty in respect of the Notes. No election
to proceed in one form of action or proceeding, or against any party, or on any
obligation, shall constitute a waiver of such holder's right to proceed in any
other form of action or proceeding or against other parties unless such holder
has expressly waived such right in writing. Specifically, but without limiting
the generality of the foregoing, no action or proceeding by any holder of Notes
against the Company or the Guarantor under any document or instrument evidencing
obligations of the Company or the Guarantor to such holder of Notes shall serve
to diminish the liability of the Guarantor under this Guaranty, except to the
extent that such holder of Notes finally and unconditionally shall have realized
payment by such action or proceeding, notwithstanding the effect of any such
action or proceeding upon the Guarantor's right of subrogation against the
Company.
11.11 Severability
Subject to Section 8 of the Note Purchase Agreement, each of the rights and
remedies granted under this Guaranty to each holder of Notes in respect of the
Notes held by such holder may be exercised by such holder without notice by such
holder to, or the consent of or any other action by, any other holder of Notes.
11.12 Other Enforcement Rights
Each holder of Notes may proceed, as provided in Section 1.11 hereof, to protect
and enforce this Guaranty by suit or suits or proceedings in equity, at law or
in bankruptcy, and whether for the specific performance of any covenant or
agreement contained herein or in execution or aid of any power herein granted;
or for the recovery of judgment for the obligations hereby guarantied or for the
enforcement of any other proper, legal or equitable remedy available under
applicable law. Each holder of Notes shall have, to the fullest extent permitted
by law and this Guaranty, a right of set-off against any and all credits and any
and all other Property of the Guarantor, now or at any time whatsoever with, or
in the possession of, such holder of Notes, or anyone acting for such holder, to
ensure the full performance of any and all obligations of the Guarantor
hereunder.
11.13 Delay or Omission; No Waiver
No course of dealing on the part of any holder of Notes and no delay or failure
on the part of any such holder to exercise any right hereunder shall impair such
right or operate as a waiver of such right or otherwise prejudice such holder's
rights, powers and remedies hereunder. Every right and remedy given by this
Guaranty or by law to any holder of Notes may be exercised from time to time as
often as may be deemed expedient by such Person.
11.14 Restoration of Rights and Remedies
If any holder of Notes shall have instituted any proceeding to enforce any right
or remedy under this Guaranty, under the Note Purchase Agreement or under any
Note held by such holder of Notes, and such proceeding shall have been
dismissed, discontinued or abandoned for any reason, or shall have been
determined adversely to such holder, then and in every such case each such
holder, the Company and the Guarantor shall, except as may be limited or
affected by any determination (including, without limitation, any determination
in connection with any such dismissal) in such proceeding, be restored severally
and respectively to its respective former positions hereunder and thereunder,
and thereafter, subject as aforesaid, the rights and remedies of such holders of
Notes shall continue as though no such proceeding had been instituted.
11.15 Cumulative Remedies
No remedy under this Guaranty, the Note Purchase Agreement or the Notes is
intended to be exclusive of any other remedy, but each and every remedy shall be
cumulative and in addition to any and every other remedy given pursuant to this
Guaranty, the Note Purchase Agreement or the Notes.
11.16 Survival
So long as the Guarantied Obligations shall not have been fully and finally
performed and indefeasibly paid, the obligations of the Guarantor under this
Guaranty shall survive the transfer and payment of any Note and the payment in
full of all the Notes.
11.17 No Setoff, Counterclaim or Other Deduction
Except as otherwise required by law, each payment by the Guarantor shall be made
without setoff, counterclaim or other deduction.
11.18 Notices in Respect of Payments.
If the Guarantor shall pay to any holder of a Note any amount in respect of the
Guarantied Obligations, the Guarantor, within five (5) Business Days after
making such payment, shall provide notice of such payment to each other holder
of a Note.
INTERPRETATION OF THIS GUARANTYIS GUARANTY
12.1 Terms Defined
As used in this Guaranty, the capitalized terms have the meaning specified in
the Note Purchase Agreement unless otherwise set forth in this Guaranty (such
definitions, unless otherwise expressly provided, to be equally applicable to
both the singular and plural forms of the terms defined).
12.2 Paragraph Headings and Construction
(a) Paragraph Headings, etc. The titles of the paragraphs appear as a
matter of convenience only, do not constitute a part hereof and shall not
affect the construction hereof. The words "herein," "hereof," "hereunder"
and "hereto" refer to this Guaranty as a whole and not to any particular
paragraph or other subdivision.
(b) Construction. Each covenant contained herein shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant shall
not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
WARRANTIES AND REPRESENTATIONS
The Guarantor represents and warrants to each holder of Notes, as of the date of
effectiveness hereof, as follows:
13.1 Generally.
(a) The Guarantor is fully aware of the financial condition of the
Company. The Guarantor delivers this guaranty based solely upon its own
independent investigation and in no part upon any representation or
statement of any one or more of the holders of Notes with respect thereto.
The Guarantor is in a position to obtain, and hereby assumes full
responsibility for obtaining, any additional information concerning the
financial condition of the Company as the Guarantor may deem material to its
obligations hereunder, and the Guarantor is neither relying upon, nor
expecting, any holder of Notes to furnish it any information concerning the
financial condition of the Company.
(b) The Guarantor is a corporation duly organized and validly existing
and in good standing under the laws of if its jurisdiction of organization.
The Guarantor has the corporate power to own its properties and carry on its
business as it is now being conducted. The Guarantor has the valid authority
and the corporate power to enter into and perform, and has taken all
necessary action to authorize the entry into, and the performance and
delivery of, this Guaranty and the transactions contemplated hereby.
(c) This Guaranty has been duly authorized by all necessary action on
the part of the Guarantor, has been duly executed and delivered by a duly
authorized officer of the Guarantor, and constitutes a legal, valid and
binding obligation of the Guarantor.
(d) The entry into and performance of this Guaranty and the transactions
contemplated hereby do not and will not conflict with any applicable law or
regulation or official or judicial order, conflict with the certificate of
incorporation or bylaws of the Guarantor, conflict with any agreement or
document to which the Guarantor is a party or that is binding upon it or any
of its Properties, or result in the creation or imposition of any Lien on
any of its Properties pursuant to the provisions of any agreement or
document.
(e) Neither the legal nature of the Guarantor, nor any of its businesses
and Properties, nor any relationship between or among the Guarantor or any
other Person, nor any circumstance in connection with the execution or
delivery of this Guaranty, is such as to require any authorization, consent,
approval, license, registration, notarization, exemption or other action by
or notice to or filing with any court or administrative or governmental body
or agency having jurisdiction over the Guarantor or the Company or any of
their respective properties or businesses, in connection with the execution
and delivery of this Guaranty or the fulfillment of and compliance with the
terms and provisions hereof.
(f) The warranties and representations contained in Section 2 of the
Note Purchase Agreement are true in all material respects on the date hereof
with the same effect as though made on and as of the date hereof.
13.2 Nature of Business of Company and Subsidiaries.
The Company, the Guarantor and all of the other Subsidiaries are, and will be,
as to financing and capital raising activities, operated as part of one
consolidated business entity and the Guarantor is directly or indirectly
dependent upon the Company and each other Subsidiary for and in connection with
its business activities and its financial resources.
13.3 Solvency.
The fair value of the business and assets of the Company and the Guarantor is in
excess of the amount that will be required to pay its respective liabilities
(including, without limitation, contingent, subordinated, unmatured and
unliquidated liabilities on existing debts, as such liabilities may become
absolute and matured), in each case both prior to and after giving effect to the
transactions contemplated by this Guaranty. After giving effect to the
transactions contemplated by this Guaranty, neither the Company nor the
Guarantor will be engaged in any business or transaction, or about to engage in
any business or transaction, for which it has unreasonably small capital, and
neither the Company nor the Guarantor has or had any intent to hinder, delay or
defraud any entity to which it is, or will become, on or after the date hereof,
indebted or to incur debts that would be beyond its ability to pay as such debts
mature.
GENERAL COVENANTSL COVENANTS
The Guarantor covenants and agrees that on and after the date hereof and so long
as any of the Guarantied Obligations shall be outstanding:
14.1 Undertakings in Note Purchase Agreement
The Guarantor will be bound by the terms and provisions of the Note Purchase
Agreement. Without limiting the generality of the foregoing, the Guarantor will
comply with each of the undertakings of the Company in the Note Purchase
Agreement in respect of which the Company undertakes to cause a Subsidiary
generally or the Guarantor specifically to comply with such undertakings, as if
such undertakings (as they apply to the Guarantor) were set forth at length
herein as the undertakings of the Guarantor.
14.2 Payment of Notes and Maintenance of Office
The Guarantor will punctually pay, or cause to be paid, all of the Guarantied
Obligations when due and all other payment obligations required of it hereunder
and will maintain an office at its address as set forth in paragraph 5.3 where
notices, presentations and demands in respect of this Guaranty may be made upon
it. Such office will be maintained at such address until such time as the
Guarantor shall notify the holders of Notes of any change of location of such
office.
14.3 Further Assurances
The Guarantor will cooperate with the holders of Notes and execute such further
instruments and documents as the Required Holders shall reasonably request to
carry out, to the reasonable satisfaction of the Required Holders, the
transactions contemplated by this Guaranty and the Note Purchase Agreement.
15. MISCELLANEOUS
15.1 Successors and Assigns.
(a) Whenever the Guarantor or any of the parties to the Note Purchase
Agreement is referred to, such reference shall be deemed to include the
successors and assigns of such party, and all the covenants, promises and
agreements contained in this Guaranty by or on behalf of the Guarantor shall
bind the successors and assigns of the Guarantor and shall inure to the
benefit of each of the holders, from time to time, of the Notes, whether so
expressed or not and whether or not an assignment of the rights hereunder
shall have been delivered in connection with any assignment or other
transfer of Notes.
(b) The Guarantor agrees to take such action as may be reasonably
requested by any holder of Notes in connection with the purchase by such
holder or the transfer of the Notes of such holder in accordance with the
requirements of the Note Purchase Agreement in connection with providing an
executed copy of this Guaranty to the new holder or holders of such Notes,
provided that no additional obligations of the Guarantor shall thereby be
created (beyond what is provided by this Guaranty).
15.2 Partial Invalidity.
The unenforceability or invalidity of any provision or provisions hereof shall
not render any other provision or provisions contained herein unenforceable or
invalid.
15.3 Communications.
All communications to the holders of Notes or the Company hereunder shall be in
writing, shall be delivered in the manner, to the addresses, and with the
effect, as provided by the Note Purchase Agreement. Notices to the Guarantor
shall be addressed as indicated on Annex 1, or as the Guarantor shall from time
to time notify the holders of Notes in writing.
15.4 Governing Law.
THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE
WITH, INTERNAL NEW YORK LAW.
15.5 Jurisdiction; Service of Process
THE GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY, THE NOTES OR
THE NOTE PURCHASE AGREEMENT, OR ANY ACTION OR PROCEEDING TO EXECUTE OR OTHERWISE
ENFORCE ANY JUDGMENT IN RESPECT OF ANY BREACH HEREUNDER OR UNDER THE NOTES OR
THE NOTE PURCHASE AGREEMENT, BROUGHT BY ANY HOLDER OF A NOTE AGAINST THE
GUARANTOR OR ANY OF ITS PROPERTY, MAY BE BROUGHT BY SUCH HOLDER IN THE COURTS OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK OR ANY
STATE COURT SITTING IN NEW YORK, NEW YORK, AS SUCH HOLDER OF A NOTE MAY IN ITS
SOLE DISCRETION ELECT, AND BY THE EXECUTION AND DELIVERY OF THIS GUARANTY, THE
GUARANTOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE NON-EXCLUSIVE IN
PERSONAM JURISDICTION OF EACH SUCH COURT, AND AGREES THAT PROCESS SERVED EITHER
PERSONALLY OR BY REGISTERED MAIL SHALL CONSTITUTE, TO THE EXTENT PERMITTED BY
LAW, ADEQUATE SERVICE OF PROCESS IN ANY SUCH SUIT, AND THE GUARANTOR IRREVOCABLY
WAIVES AND AGREES NOT TO ASSERT, BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE,
ANY CLAIM THAT THE GUARANTOR IS NOT SUBJECT TO THE IN PERSONAM JURISDICTION OF
ANY SUCH COURT. RECEIPT OF PROCESS SO SERVED SHALL BE CONCLUSIVELY PRESUMED AS
EVIDENCED BY A DELIVERY RECEIPT FURNISHED BY THE UNITED STATES POSTAL SERVICE OR
ANY COMMERCIAL DELIVERY SERVICE. IN ADDITION, THE GUARANTOR HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT THE GUARANTOR
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY AND/OR THE NOTES AND/OR
THE NOTE PURCHASE AGREEMENT BROUGHT IN SUCH COURTS, AND HEREBY IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. NOTHING HEREIN SHALL IN ANY WAY
BE DEEMED TO LIMIT THE ABILITY OF ANY HOLDER OF A NOTE TO SERVE ANY SUCH WRITS,
PROCESS OR SUMMONSES IN ANY MANNER PERMITTED BY APPLICABLE LAW OR TO OBTAIN
JURISDICTION OVER THE GUARANTOR IN SUCH OTHER JURISDICTION, AND IN SUCH MANNER,
AS MAY BE PERMITTED BY APPLICABLE LAW. THE GUARANTOR AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW.
15.6 Effective Date.
This Guaranty shall be effective as of the date first written above.
FORM OF SUBSIDIARY GUARANTY
E-17
FORM OF SUBSIDIARY GUARANTY
E-12
15.7 Benefits of Guaranty Restricted to Noteholders.
Nothing express or implied in this Guaranty is intended or shall be construed to
give to any Person other than the Guarantor and the holders of Notes any legal
or equitable right, remedy or claim under or in respect hereof or any covenant,
condition or provision therein or herein contained; and all such covenants,
conditions and provisions are and shall be held to be for the sole and exclusive
benefit of the Guarantor and the holders of Notes.
15.8 Survival of Representations and Warranties.
All representations and warranties contained herein or made in writing by the
Guarantor in connection herewith shall survive the execution and delivery
hereof.
15.9 Expenses.
(a) The Guarantor shall pay when billed the reasonable costs and
expenses (including reasonable attorneys' fees) incurred by the holders of
Notes in connection with the consideration, negotiation, preparation or
execution of any amendments, waivers, consents, standstill agreements and
other similar agreements with respect hereto (whether or not any such
amendments, waivers, consents, standstill agreements or other similar
agreements are executed).
(b) At any time when the Company or the Guarantor and the holders of
Notes are conducting restructuring or workout negotiations in respect
hereof, or a Default or Event of Default exists, the Guarantor shall pay
when billed the reasonable costs and expenses (including reasonable
attorneys' fees and the reasonable fees of professional advisors) incurred
by the holders of Notes in connection with the assessment, analysis or
enforcement of any rights or remedies that are or may be available to the
holders of the Notes.
(c) If the Guarantor shall fail to pay when due any principal of, or
Make-Whole Amount or interest on, any Note, the Guarantor shall pay to each
holder of Notes, to the extent permitted by law, such amounts as shall be
sufficient to cover the costs and expenses, including but not limited to
reasonable attorneys' fees, incurred by such holder in collecting any sums
due on such Notes.
15.10 Amendment.
This Guaranty may be amended only in a writing executed by the Guarantor and the
Required Holders.
15.11 Entire Agreement.
This Guaranty constitutes the final written expression of all of the terms
hereof and is a complete and exclusive statement of those terms.
15.12 Duplicate Originals.
Two or more duplicate counterpart originals hereof may be signed by the parties,
each of which shall be an original but all of which together shall constitute
one and the same instrument.
[Remainder of page intentionally blank. Next page is signature page.]
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed on its
behalf by a duly authorized officer of the Guarantor.
[GUARANTOR]
By
Name:
Title:
▇-▇▇
▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇:
[To be added at the time of execution and delivery of the Guaranty.]