[COMPOSITE CONFORMED COPY]
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DAKOTA GROWERS PASTA COMPANY
$18,000,000 7.04% Senior Secured Guaranteed Notes, Series A
due August 1, 2008
AND
$9,000,000 7.14% Senior Secured Guaranteed Notes, Series B,
due August 1, 2010
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NOTE PURCHASE AGREEMENT
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Dated as of July 15, 1998
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TABLE OF CONTENTS
(Not a part of the Agreement)
SECTION HEADING PAGE
SECTION 1. AUTHORIZATION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. ▇▇▇▇ AND PURCHASE OF NOTES . . . . . . . . . . . . . . . . . . . . . 1
SECTION 3. CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 4. CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . . . . 2
Section 4.1. Representations and Warranties . . . . . . . . . . . . . . . 2
Section 4.2. Performance; No Default. . . . . . . . . . . . . . . . . . . 2
Section 4.3. Compliance Certificates. . . . . . . . . . . . . . . . . . . 3
Section 4.4. Opinions of Counsel. . . . . . . . . . . . . . . . . . . . . 3
Section 4.5. Purchase Permitted by Applicable Law, Etc. . . . . . . . . . 3
Section 4.6. Sale of Other Notes. . . . . . . . . . . . . . . . . . . . . 3
Section 4.7. Payment of Special Counsel Fees. . . . . . . . . . . . . . . 4
Section 4.8. Private Placement Number . . . . . . . . . . . . . . . . . . 4
Section 4.9. Changes in Corporate Structure . . . . . . . . . . . . . . . 4
Section 4.10. Certain Agreements . . . . . . . . . . . . . . . . . . . . . 4
Section 4.11. Security Documents . . . . . . . . . . . . . . . . . . . . . 4
Section 4.12. Filing and Recording . . . . . . . . . . . . . . . . . . . . 4
Section 4.13. Title Insurance. . . . . . . . . . . . . . . . . . . . . . . 4
Section 4.14. Proceedings and Documents. . . . . . . . . . . . . . . . . . 4
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . 5
Section 5.1. Organization; Power and Authority. . . . . . . . . . . . . . 5
Section 5.2. Authorization, Etc . . . . . . . . . . . . . . . . . . . . . 5
Section 5.3. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 5.4. Organization and Ownership of Shares of Subsidiaries . . . . 6
Section 5.5. Financial Statements . . . . . . . . . . . . . . . . . . . . 6
Section 5.6. Compliance with Laws, Other Instruments, Etc . . . . . . . . 7
Section 5.7. Governmental Authorizations, Etc . . . . . . . . . . . . . . 7
Section 5.8. Litigation; Observance of Agreements, Statutes and Orders. . 7
Section 5.9. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 5.10. Title to Property; Leases. . . . . . . . . . . . . . . . . . 8
Section 5.11. Licenses, Permits, Etc . . . . . . . . . . . . . . . . . . . 8
Section 5.12. Compliance with ERISA. . . . . . . . . . . . . . . . . . . . 8
Section 5.13. Private Offering by the Company. . . . . . . . . . . . . . . 9
Section 5.14. Use of Proceeds; Margin Regulations. . . . . . . . . . . . . 9
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Section 5.15. Existing Debt; Future Liens. . . . . . . . . . . . . . . . . 10
Section 5.16. Foreign Assets Control Regulations, Etc. . . . . . . . . . . 10
Section 5.17. Status under Certain Statutes. . . . . . . . . . . . . . . . 10
Section 5.18. Environmental Matters. . . . . . . . . . . . . . . . . . . . 10
Section 5.19. Pari Passu Ranking . . . . . . . . . . . . . . . . . . . . . 11
SECTION 6. REPRESENTATIONS OF THE PURCHASER . . . . . . . . . . . . . . . . . . 11
Section 6.1. Purchase for Investment. . . . . . . . . . . . . . . . . . . 11
Section 6.2. Source of Funds. . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 7. INFORMATION AS TO COMPANY. . . . . . . . . . . . . . . . . . . . . . 13
Section 7.1. Financial and Business Information . . . . . . . . . . . . . 13
Section 7.2. Officer's Certificate. . . . . . . . . . . . . . . . . . . . 16
Section 7.3. Inspection . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 8. PREPAYMENT OF THE NOTES. . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.1. Required Prepayments . . . . . . . . . . . . . . . . . . . . 17
Section 8.2. Optional Prepayments with Make-Whole Amount. . . . . . . . . 18
Section 8.3. Change in Control. . . . . . . . . . . . . . . . . . . . . . 18
Section 8.4. Allocation of Partial Prepayments. . . . . . . . . . . . . . 20
Section 8.5. Maturity; Surrender, Etc . . . . . . . . . . . . . . . . . . 20
Section 8.6. Purchase of Notes. . . . . . . . . . . . . . . . . . . . . . 20
Section 8.7. Make-Whole Amount. . . . . . . . . . . . . . . . . . . . . . 21
SECTION 9. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.1. Compliance with Law. . . . . . . . . . . . . . . . . . . . . 22
Section 9.2. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 9.3. Maintenance of Properties. . . . . . . . . . . . . . . . . . 23
Section 9.4. Payment of Taxes and Claims. . . . . . . . . . . . . . . . . 23
Section 9.5. Corporate Existence, Etc . . . . . . . . . . . . . . . . . . 23
SECTION 10. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 10.1. Transactions with Affiliates . . . . . . . . . . . . . . . . 23
Section 10.3. Consolidated Net Worth . . . . . . . . . . . . . . . . . . . 24
Section 10.4. Certain Ratios . . . . . . . . . . . . . . . . . . . . . . . 25
Section 10.5. Sale of Assets, Etc. . . . . . . . . . . . . . . . . . . . . 25
Section 10.6. Disposal of Ownership of a Subsidiary. . . . . . . . . . . . 25
Section 10.7. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 10.8. Nature of Business . . . . . . . . . . . . . . . . . . . . . 28
Section 10.9. Distributions. . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 11. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . 29
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SECTION 12. REMEDIES ON DEFAULT, ETC . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.1. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12.2. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . 32
Section 12.3. Rescission . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 12.4. No Waivers or Election of Remedies, Expenses, Etc. . . . . . 32
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES. . . . . . . . . . . . 33
Section 13.1. Registration of Notes. . . . . . . . . . . . . . . . . . . . 33
Section 13.2. Transfer and Exchange of Notes . . . . . . . . . . . . . . . 33
Section 13.3. Replacement of Notes . . . . . . . . . . . . . . . . . . . . 33
SECTION 14. PAYMENTS ON NOTES. . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.1. Place of Payment . . . . . . . . . . . . . . . . . . . . . . 34
Section 14.2. Home Office Payment. . . . . . . . . . . . . . . . . . . . . 34
SECTION 15. EXPENSES, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 15.1. Transaction Expenses . . . . . . . . . . . . . . . . . . . . 34
Section 15.2. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT . . . . 35
SECTION 17. AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 17.1. Requirements . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 17.2. Solicitation of Holders of Notes . . . . . . . . . . . . . . 36
Section 17.3. Binding Effect, Etc. . . . . . . . . . . . . . . . . . . . . 36
Section 17.4. Notes Held by Company, Etc . . . . . . . . . . . . . . . . . 36
SECTION 18. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 19. REPRODUCTION OF DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . 37
SECTION 20. CONFIDENTIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 21. SUBSTITUTION OF PURCHASER. . . . . . . . . . . . . . . . . . . . . . 39
SECTION 22. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 22.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . 39
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Section 22.2. Payments Due on Non-Business Days. . . . . . . . . . . . . . 39
Section 22.3. Severability . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 22.4. Construction . . . . . . . . . . . . . . . . . . . . . . . . 39
Section 22.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 22.6. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 40
Section 22.7. Additional Debt. . . . . . . . . . . . . . . . . . . . . . . 40
Signature. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
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SCHEDULE A -- INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED TERMS
SCHEDULE 5.4 -- Subsidiaries of the Company and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.15 -- Existing Debt
EXHIBIT 1-A -- Form of 7.04% Senior Secured Guaranteed Note, Series A, due
August 1, 2008
EXHIBIT 1-B -- Form of 7.14% Senior Secured Guaranteed Note, Series B, due
August 1, 2010
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special Counsel for the Purchasers
EXHIBIT GA -- Form of Guaranty Agreement
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DAKOTA GROWERS PASTA COMPANY
ONE PASTA ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
7.04% Senior Secured Guaranteed Notes, Series A, due August 1, 2008
and
7.14% Senior Secured Guaranteed Notes, Series B, due August 1, 2010
Dated as of
July 15, 1998
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
LADIES AND GENTLEMEN:
DAKOTA GROWERS PASTA COMPANY, a North Dakota corporation (the "COMPANY"),
agrees with you as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale of (i) $18,000,000 aggregate
principal amount of its 7.04% Senior Secured Guaranteed Notes, Series A, due
August 1, 2008 (the "SERIES A NOTES") and (ii) $9,000,000 aggregate principal
amount of its 7.14% Senior Secured Guaranteed Notes, Series B, due August 1,
2010 (the "SERIES B NOTES" and, together with the Series A Notes, the "NOTES,"
such term to include any such notes issued in substitution for the appropriate
series pursuant to Section 13 of this Agreement or the Other Agreements (as
hereinafter defined)). The Series A Notes shall be substantially in the form
set out in Exhibit 1-A and the Series B Notes shall be substantially in the form
of Exhibit 1-B, in each case, with such changes therefrom, if any, as may be
approved by you and the Company. Certain capitalized terms used in this
Agreement are defined in Schedule B; references to a "Schedule" or an "Exhibit"
are, unless otherwise specified, to a Schedule or an Exhibit attached to this
Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company will
issue and sell to you and you will purchase from the Company, at the Closing
provided for in Section 3, Notes of the series and in the principal amount
specified opposite your name in Schedule A at the purchase price of 100% of the
principal amount thereof. Contemporaneously with entering into this Agreement,
the Company is entering into separate Note Purchase Agreements (the "OTHER
AGREEMENTS") identical with this Agreement with each of the other purchasers
named in Schedule A (the "OTHER PURCHASERS"), providing for the sale at such
Closing to each of the Other Purchasers of Notes in the principal amount and of
the series specified opposite its name in
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Schedule A. Your obligation hereunder, and the obligations of the Other
Purchasers under the Other Agreements, are several and not joint obligations,
and you shall have no obligation under any Other Agreement and no liability to
any Person for the performance or nonperformance by any Other Purchaser
thereunder.
The obligations of the Company under the Notes and this Agreement will be
guaranteed pursuant to the Guaranty Agreement and will be secured pursuant to
the Collateral Documents.
SECTION 3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, at 10:00 A.M. Chicago time, at a closing (the
"CLOSING") on August 7, 1998 or on such other Business Day thereafter on or
prior to August 14, 1998 as may be agreed upon by the Company and you and the
Other Purchasers. At the Closing the Company will deliver to you the Notes of
the appropriate series to be purchased by you in the form of a single Note (or
such greater number of Notes in denominations of at least $100,000 as you may
request) dated the date of the Closing and registered in your name (or in the
name of your nominee), against delivery by you to the Company or its order of
immediately available funds in the amount of the purchase price therefor by wire
transfer of immediately available funds for the account of the Company to
account number 380313 at St. ▇▇▇▇ Bank for Cooperatives, ABA number ▇▇▇▇▇▇▇▇▇.
If at the Closing the Company shall fail to tender such Notes to you as provided
above in this Section 3, or any of the conditions specified in Section 4 shall
not have been fulfilled to your satisfaction, you shall, at your election, be
relieved of all further obligations under this Agreement, without thereby
waiving any rights you may have by reason of such failure or such
nonfulfillment.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to your satisfaction, prior to or at the
Closing, of the following conditions:
SECTION 4.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company and the Guarantor in the Financing Agreements shall be
correct when made and at the time of the Closing.
SECTION 4.2. PERFORMANCE; NO DEFAULT. The Company and the Guarantor shall
have performed and complied with all agreements and conditions contained in the
Financing Agreements required to be performed or complied with by either of them
prior to or at the Closing, and after giving effect to the issue and sale of the
Notes (and the application of the proceeds thereof as contemplated by
Section 5.14), no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
Sections 10.1, 10.3 or 10.5 hereof had such Sections applied since such date.
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SECTION 4.3. COMPLIANCE CERTIFICATES.
(a) OFFICER'S CERTIFICATE. The Company and the Guarantor shall have
delivered to you an Officer's Certificate, dated the date of the Closing,
certifying that the conditions specified in Sections 4.1, 4.2 and 4.9 have been
fulfilled.
(b) SECRETARY'S CERTIFICATE. The Company and the Guarantor shall have
delivered to you certificates certifying as to the resolutions attached thereto
and other corporate proceedings relating to the authorization, execution and
delivery of the Notes and the Financing Agreements.
SECTION 4.4. OPINIONS OF COUNSEL. You shall have received opinions in
form and substance satisfactory to you, dated the date of the Closing (a) from
▇▇▇▇▇▇ ▇▇▇▇▇, Esq., counsel for the Company and the Guarantor, covering the
matters set forth in Exhibit 4.4(a) and covering such other matters incident to
the transactions contemplated hereby as you or your counsel may reasonably
request (and the Company hereby instructs such counsel to deliver such opinion
to you) and (b) from ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, your special counsel in connection with
such transactions, substantially in the form set forth in Exhibit 4.4(b) and
covering such other matters incident to such transactions as you may reasonably
request.
SECTION 4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC. On the date of
the Closing your purchase of Notes shall (a) be permitted by the laws and
regulations of each jurisdiction to which you are subject, without recourse to
provisions (such as Section 1405(a)(8) of the New York Insurance Law) permitting
limited investments by insurance companies without restriction as to the
character of the particular investment, (b) not violate any applicable law or
regulation (including, without limitation, Regulation U, T or X of the Board of
Governors of the Federal Reserve System) and (c) not subject you to any tax,
penalty or liability under or pursuant to any applicable law or regulation,
which law or regulation was not in effect on the date hereof. If requested by
you, you shall have received an Officer's Certificate certifying as to such
matters of fact as you may reasonably specify to enable you to determine whether
such purchase is so permitted.
SECTION 4.6. SALE OF OTHER NOTES. Contemporaneously with the Closing, the
Company shall sell to the Other Purchasers, and the Other Purchasers shall
purchase, the Notes to be purchased by them at the Closing as specified in
Schedule A.
SECTION 4.7. PAYMENT OF SPECIAL COUNSEL FEES. Without limiting the
provisions of Section 15.1, the Company shall have paid on or before the Closing
the fees, charges and disbursements of your special counsel referred to in
Section 4.4 to the extent reflected in a statement of such counsel rendered to
the Company at least one Business Day prior to the Closing.
SECTION 4.8. PRIVATE PLACEMENT NUMBER. A Private Placement Number issued
by Standard & Poor's CUSIP Service Bureau (in cooperation with the Securities
Valuation Office of the National Association of Insurance Commissioners) shall
have been obtained for the Notes.
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SECTION 4.9. CHANGES IN CORPORATE STRUCTURE. Neither the Company nor the
Guarantor shall have changed its respective jurisdiction of incorporation or
been a party to any merger or consolidation nor shall have succeeded to all or
any substantial part of the liabilities of any other entity, at any time
following the date of the most recent financial statements referred to in
Schedule 5.5.
SECTION 4.10. CERTAIN AGREEMENTS. The Intercreditor Agreement and the Loan
Agreement shall be in form and substance satisfactory to you and your special
counsel, shall have been duly executed and delivered by the parties thereto and
shall be in full force and effect and you shall have received true, correct and
complete copies of each thereof.
SECTION 4.11. SECURITY DOCUMENTS. The Security Documents shall be in form
and substance satisfactory to you and your special counsel, shall have been duly
executed and delivered by the parties thereto and shall be in full force and
effect and you shall have received true, correct and complete copies of each
thereof.
SECTION 4.12. FILING AND RECORDING. The Security Documents (and/or
financing statements or similar notices thereof if and to the extent permitted
by applicable law) shall have been recorded or filed for record in such public
offices as may be deemed necessary or appropriate by you or your special counsel
in order to perfect the Liens and security interest granted or conveyed thereby.
SECTION 4.13. TITLE INSURANCE. The Company shall have delivered to you
endorsements to the existing title insurance policies or new title policies
covering the real property subject to a lien pursuant to the Security Documents
insuring the lien of the Mortgages and adding the collateral agent for the
holders of the Notes as an additional insured to the extent of the obligations
under the Notes; PROVIDED, HOWEVER, that the amounts of such insurance shall not
be increased in any event.
SECTION 4.14. PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated by this Agreement
and all documents and instruments incident to such transactions shall be
satisfactory to you and your special counsel, and you and your special counsel
shall have received all such counterpart originals or certified or other copies
of such documents as you or they may reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
SECTION 5.1. ORGANIZATION; POWER AND AUTHORITY. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. Each of
the Company and the Guarantor has the corporate
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power and authority to own or hold under lease the properties it purports to own
or hold under lease, to transact the business it transacts and proposes to
transact, to execute and deliver the Financing Agreements to which it is a party
and to perform the provisions hereof and thereof.
SECTION 5.2. AUTHORIZATION, ETC. The Financing Agreements have been duly
authorized by all necessary corporate action on the part of the Company and the
Guarantor, and each Financing Agreement constitutes a legal, valid and binding
obligation of the Company or Guarantor which is a party thereto enforceable
against the Company or the Guarantor, as the case may be, in accordance with its
terms, except as such enforceability may be limited by (i) applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
SECTION 5.3. DISCLOSURE. The Company, through its agents, SPP Hambro &
Co., LLC and St. ▇▇▇▇ Bank for Cooperatives, has delivered to you and each Other
Purchaser a copy of a Confidential Direct Placement Memorandum, dated June, 1998
(the "MEMORANDUM"), relating to the transactions contemplated hereby. The
Memorandum fairly describes, in all material respects, the general nature of the
business and principal properties of the Company and its Subsidiaries. This
Agreement, the Memorandum, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with the
transactions contemplated hereby and the financial statements listed in
Schedule 5.5, taken as a whole, do not contain any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading in light of the circumstances under which they
were made. Since July 31, 1997, there has been no change in the financial
condition, operations, business, properties or prospects of the Company or any
Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact
known to the Company that could reasonably be expected to have a Material
Adverse Effect that has not been set forth herein or in the Memorandum or in the
other documents, certificates and other writings delivered to you by or on
behalf of the Company specifically for use in connection with the transactions
contemplated hereby.
SECTION 5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES.
(a) Schedule 5.4 contains (except as noted therein) complete and correct lists
of the Company's Subsidiaries, showing, as to each Subsidiary, the correct name
thereof, the jurisdiction of its organization and the percentage of shares of
each class of its capital stock or similar equity interests outstanding owned by
the Company and each other Subsidiary.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or other
legal entity duly organized, validly existing and in good standing under the
laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good
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standing in each jurisdiction in which such qualification is required by law,
other than those jurisdictions as to which the failure to be so qualified or in
good standing could not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect. Each such Subsidiary has the
corporate or other power and authority to own or hold under lease the properties
it purports to own or hold under lease and to transact the business it transacts
and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than this Agreement, the agreements listed
on Schedule 5.4 and customary limitations imposed by corporate law statutes)
restricting the ability of such Subsidiary to pay dividends out of profits or
make any other similar distributions of profits to the Company or any of its
Subsidiaries that owns outstanding shares of capital stock or similar equity
interests of such Subsidiary.
SECTION 5.5. FINANCIAL STATEMENTS. The Company has delivered to each
Purchaser copies of the financial statements of the Company and its Subsidiaries
listed on Schedule 5.5. All of said financial statements (including in each case
the related schedules and notes) fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the
respective dates specified in such financial statements and the consolidated
results of their operations and cash flows for the respective periods so
specified and have been prepared in accordance with GAAP consistently applied
throughout the periods involved except as set forth in the notes thereto
(subject, in the case of any interim financial statements, to normal year-end
adjustments).
SECTION 5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The execution,
delivery and performance by the Company and the Guarantor of the Financing
Agreements to which each is a party will not (a) contravene, result in any
breach of, or constitute a default under, or result in the creation of any Lien
in respect of any property of the Company, the Guarantor or any Subsidiary
under, any indenture, mortgage, deed of trust, loan, purchase or credit
agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company, the Guarantor or any Subsidiary is bound or by
which the Company, the Guarantor or any Subsidiary or any of their respective
properties may be bound or affected, (b) conflict with or result in a breach of
any of the terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable to the
Company, the Guarantor or any Subsidiary or (c) violate any provision of any
statute or other rule or regulation of any Governmental Authority applicable to
the Company, the Guarantor or any Subsidiary.
SECTION 5.7. GOVERNMENTAL AUTHORIZATIONS, ETC. No consent, approval or
authorization of, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery or performance
by the Company or the Guarantor of the Financing Agreements.
SECTION 5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) There are no actions, suits or proceedings pending or, to the knowledge of
the Company, threatened against or affecting the Company or any
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Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any term
of any agreement or instrument to which it is a party or by which it is bound,
or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
SECTION 5.9. TAXES. The Company and its Subsidiaries have filed all tax
returns that are required to have been filed in any jurisdiction, and have paid
all taxes shown to be due and payable on such returns and all other taxes and
assessments levied upon them or their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent, except for any taxes and assessments (a) the amount
of which is not individually or in the aggregate Material or (b) the amount,
applicability or validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or a Subsidiary,
as the case may be, has established adequate reserves in accordance with GAAP.
The Company knows of no basis for any other tax or assessment that could
reasonably be expected to have a Material Adverse Effect. The charges, accruals
and reserves on the books of the Company and its Subsidiaries in respect of
Federal, state or other taxes for all fiscal periods are adequate. The Company
and its Subsidiaries have never been audited by the Internal Revenue Service nor
has the statute of limitations with regards to tax liabilities run for any
fiscal year of the Company and its Subsidiaries.
SECTION 5.10. TITLE TO PROPERTY; LEASES. The Company and its Subsidiaries
have good and sufficient title to their respective properties that individually
or in the aggregate are Material, including all such properties reflected in the
most recent audited balance sheet referred to in Section 5.5 or purported to
have been acquired by the Company or any Subsidiary after said date (except as
sold or otherwise disposed of in the ordinary course of business), in each case
free and clear of Liens prohibited by this Agreement. All leases that
individually or in the aggregate are Material are valid and subsisting and are
in full force and effect in all material respects.
SECTION 5.11. LICENSES, PERMITS, ETC. (a) The Company and its Subsidiaries
own or possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights thereto, that
individually or in the aggregate are Material, without known conflict with the
rights of others;
(b) to the best knowledge of the Company, no product of the Company or
any Subsidiary infringes in any Material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or other
right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material violation
by any Person of any right of the Company or any of its Subsidiaries with
respect to any patent,
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copyright, service mark, trademark, trade name or other right owned or used by
the Company or any of its Subsidiaries.
SECTION 5.12. COMPLIANCE WITH ▇▇▇▇▇. (a) The Company and each ERISA
Affiliate have operated and administered each Plan in compliance with all
applicable laws except for such instances of noncompliance as have not resulted
in and could not reasonably be expected to result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in Section 3 of ERISA), and no
event, transaction or condition has occurred or exists that could reasonably be
expected to result in the incurrence of any such liability by the Company or any
ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities. The term "BENEFIT LIABILITIES" has the
meaning specified in section 4001 of ERISA and the terms "CURRENT VALUE" and
"PRESENT VALUE" have the meanings specified in section 3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is not Material.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction prohibited by
section 406(a) of ERISA or in connection with which a tax could be imposed
pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation by the
Company in the first sentence of this Section 5.12(e) is made in reliance upon
and subject to the accuracy of your representation in Section 6.2 as to the
sources of the funds used to pay the purchase price of the Notes to be purchased
by you.
SECTION 5.13. PRIVATE OFFERING BY THE COMPANY. Neither the Company, the
Guarantor nor anyone acting on its behalf has offered the Notes, the Guaranty
Agreement or any similar securities for sale to, or solicited any offer to buy
any of the same from, or otherwise approached or negotiated in respect thereof
with, any Person other than you, the Other Purchasers and not
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more than forty-four (44) other Institutional Investors, each of which has been
offered the Notes at a private sale for investment. Neither the Company nor
anyone acting on its behalf has taken, or will take, any action that would
subject the issuance or sale of the Notes or the Guaranty Agreement to the
registration requirements of Section 5 of the Securities Act.
SECTION 5.14. USE OF PROCEEDS; MARGIN REGULATIONS. The Company will apply
the proceeds of the sale of the Notes to reduce long-term and short-term
borrowings and for general corporate proposes. No part of the proceeds from the
sale of the Notes hereunder will be used, directly or indirectly, for the
purpose of buying or carrying any margin stock within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System (12 CFR
221), or for the purpose of buying or carrying or trading in any securities
under such circumstances as to involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). Margin stock does not
constitute more than 1% of the value of the consolidated assets of the Company
and its Subsidiaries and the Company does not have any present intention that
margin stock will constitute more than 1% of the value of such assets. As used
in this Section, the terms "MARGIN STOCK" and "PURPOSE OF BUYING OR CARRYING"
shall have the meanings assigned to them in said Regulation U.
SECTION 5.15. EXISTING DEBT; FUTURE LIENS. (a) Except as described
therein, Schedule 5.15 sets forth a complete and correct list of all outstanding
Debt of the Company and its Subsidiaries as of July 30, 1998, since which date
there has been no Material change in the amounts, interest rates, sinking funds,
installment payments or maturities of the Debt of the Company or its
Subsidiaries. Neither the Company nor any Subsidiary is in default and no
waiver of default is currently in effect, in the payment of any principal or
interest on any Debt of the Company or such Subsidiary and no event or condition
exists with respect to any Debt of the Company or any Subsidiary that would
permit (or that with notice or the lapse of time, or both, would permit) one or
more Persons to cause such Debt to become due and payable before its stated
maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary 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 10.A.
SECTION 5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC. Neither the sale of
the Notes by the Company hereunder nor its use of the proceeds thereof will
violate the Trading with the Enemy Act, as amended, or any of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling legislation or executive order
relating thereto.
SECTION 5.17. STATUS UNDER CERTAIN STATUTES. Neither the Company nor any
Subsidiary is an "INVESTMENT COMPANY" registered or required to be registered
under the Investment Company Act of 1940, as amended, or is subject to
regulation under the Public Utility Holding
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Company Act of 1935, as amended, the ICC Termination Act of 1995, as amended, or
the Federal Power Act, as amended.
SECTION 5.18. ENVIRONMENTAL MATTERS. Neither the Company nor any
Subsidiary has knowledge of any claim or has received any notice of any claim,
and no proceeding has been instituted raising any claim against the Company or
any of its Subsidiaries or any of their respective real properties now or
formerly owned, leased or operated by any of them or other assets, alleging any
damage to the environment or violation of any Environmental Laws, except, in
each case, such as could not reasonably be expected to result in a Material
Adverse Effect. Except as otherwise disclosed to you in writing:
(a) neither the Company nor any Subsidiary has knowledge of any
facts which would give rise to any claim, public or private, of violation
of Environmental Laws or damage to the environment emanating from,
occurring on or in any way related to real properties now or formerly
owned, leased or operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be expected to result in
a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them or has disposed of any Hazardous Materials in a
manner contrary to any Environmental Laws in each case in any manner that
could reasonably be expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.19. PARI PASSU RANKING. The obligations of the Company and of
the Guarantor under the respective Financing Agreements to which each is a
party, and the Liens of the Collateral Documents constitute senior obligations
of the Company and of the Guarantor which rank at least PARI PASSU, without
preference or priority, with the obligations of the Company and the Guarantor
under the Loan Agreement and any guaranty thereof and security therefor. All
collateral securing the Loan Agreement and any guaranty thereof also secures the
Financing Agreements.
SECTION 6. REPRESENTATIONS OF THE PURCHASER.
SECTION 6.1. PURCHASE FOR INVESTMENT. You represent that you are
purchasing the Notes for your own account or for one or more separate accounts
maintained by you or for the account of one or more pension or trust funds and
not with a view to the distribution thereof, PROVIDED that the disposition of
your or their property shall at all times be within your or their control. You
understand that the Notes have not been registered under the Securities Act and
may be resold only if registered pursuant to the provisions of the Securities
Act or if an exemption
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from registration is available, except under circumstances where neither such
registration nor such an exemption is required by law, and that the Company is
not required to register the Notes. You, either alone or with the assistance of
your professional advisors, have such knowledge and experience in financial and
business matters that you are capable of evaluating the merits and risks of the
prospective investment in the Notes. You qualify as an "accredited investor" as
that term is defined and interpreted by applicable federal securities law. You
have obtained, to the extent you deem necessary, your own professional advice to
determine the suitability of your investment in the Notes in light of your
investment needs and applicable legal requirements. You have been given access
to information regarding the Company and have utilized such access to your
satisfaction for the purpose of obtaining information regarding the Company,
have received copies of the Company's Memorandum and all exhibits thereto, and
have either attended or been given the reasonable opportunity to attend a
meeting with representatives of the Company for the purpose of asking questions
of, and receiving answers from, such representatives concerning the Company.
SECTION 6.2. SOURCE OF FUNDS. You represent that at least one of the
following statements is an accurate representation as to each source of funds (a
"SOURCE") to be used by you to pay the purchase price of the Notes to be
purchased by you hereunder:
(a) the Source is an "insurance company general account" within
the meaning of Department of Labor Prohibited Transaction Exemption ("PTE")
95-60 (issued July 12, 1995) and there is no employee benefit plan,
treating as a single plan, all plans maintained by the same employer or
employee organization, with respect to which the amount of the general
account reserves and liabilities for all contracts held by or on behalf of
such plan, exceeds ten percent (10%) of the total reserves and liabilities
of such general account (exclusive of separate account liabilities) plus
surplus, as set forth in the NAIC Annual Statement filed with your state of
domicile; or
(b) the Source is either (i) an insurance company "pooled
separate account," within the meaning of PTE 90-1 (issued January 29,
1990), or (ii) a bank collective investment fund, within the meaning of the
PTE 91-38 (issued July 152, 1991) and, except as you have disclosed to the
Company in writing pursuant to this paragraph (b), no employee benefit plan
or group of plans maintained by the same employer or employee organization
beneficially owns more than 10% of all assets allocated to such pooled
separate account or collective investment fund; or
(c) the Source constitutes assets of an "investment fund" (within
the meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part l(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or
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controlled by the QPAM (applying the definition of "control" in
Section V(e) of the QPAM Exemption) owns a 5% or more interest in the
Company and (i) the identity of such QPAM and (ii) the names of all
employee benefit plans whose assets are included in such investment fund
have been disclosed to the Company in writing pursuant to this paragraph
(c); or
(d) the Source is a governmental plan; or
(e) the Source is one or more employee benefit plans, or a
separate account or trust fund comprised of one or more employee benefit
plans, each of which has been identified to the Company in writing pursuant
to this paragraph (e); or
(f) the Source does not include or is deemed not to include under
ERISA and the regulations thereunder, assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
If you or any subsequent transferee of the Notes indicates that your or
such transferee are relying on any representation contained in paragraph (b),
(c) or (e) above, the Company shall deliver on the date of Closing and on the
date of any applicable transfer a certificate, which shall either state that
(i) it is neither a party in interest nor a "disqualified person" (as defined in
Section 4975(e)(2) of the Internal Revenue Code of 1986, as amended), with
respect to any plan identified pursuant to paragraphs (b) or (e) above, or
(ii) with respect to any plan, identified pursuant to paragraph (c) above,
neither it nor any "affiliate" (as defined in Section V(c) of the QPAM
Exemption) has at such time, and during the immediately preceding one year,
exercised the authority to appoint or terminate said QPAM as manager of any plan
identified in writing pursuant to paragraph (c) above or to negotiate the terms
of said QPAM's management agreement on behalf of any such identified plan;
provided that if the Company cannot deliver the certificate required by this
paragraph with respect to any disclosure made pursuant to paragraph (b), (c) or
(e) above, such purchase or transfer shall not occur. As used in this
Section 6.2, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL PLAN", "PARTY IN
INTEREST" and "SEPARATE ACCOUNT" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO COMPANY.
SECTION 7.1. FINANCIAL AND BUSINESS INFORMATION. The Company shall
deliver to each holder of Notes that is an Institutional Investor:
(a) QUARTERLY STATEMENTS -- within 45 days 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), duplicate copies
of:
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
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(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
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 by a Senior Financial Officer as fairly
presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments, PROVIDED that
delivery within the time period specified above of copies of the Company's
Quarterly Report on Form 10-Q prepared in compliance with the requirements
therefor and filed with the Securities and Exchange Commission shall be
deemed to satisfy the requirements of this Section 7.1(a);
(b) ANNUAL STATEMENTS -- within 90 days after the end of each
fiscal year of the Company duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders' equity and cash flows of the Company and its
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 thereon of independent certified
public accountants of recognized national standing (which may
include ▇▇▇▇ ▇▇▇▇▇▇ LLP), which opinion shall state that
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, and
(B) a certificate of such accountants stating that
they have reviewed this Agreement and stating further
whether, in making their audit, they have become aware of any
condition or event that then constitutes a Default or an
Event of Default and, if they are aware that any such
condition or event then exists, specifying the nature and
period of the existence thereof (it being understood that
such accountants shall not be liable, directly or indirectly,
for any failure to obtain knowledge of any Default or Event
of Default unless such accountants should have obtained
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knowledge thereof in making an audit in accordance with
generally accepted auditing standards or did not make such an
audit);
PROVIDED that the delivery within the time period specified above of the
Company's Annual Report on Form 10-K for such fiscal year (together with
the Company's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in clause
(B) above, shall be deemed to satisfy the requirements of this
Section 7.1(b);
(c) SEC AND OTHER REPORTS -- promptly upon their becoming
available, one copy 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, each
registration statement (without exhibits except as expressly requested by
such holder), and each prospectus and all amendments thereto filed by the
Company or any Subsidiary with the Securities and Exchange Commission and
of all press releases and other statements made available generally by the
Company or any Subsidiary to the public concerning developments that are
Material;
(d) NOTICE OF DEFAULT OR EVENT OF DEFAULT -- promptly, and in any
event within five days after a Responsible Officer becoming aware of the
existence of any Default or Event of Default or that any Person has given
any notice or taken any action with respect to a claimed default hereunder
or that any Person has given any notice or taken any action with respect to
a claimed default of the type referred to in Section 11(f), 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;
(e) ERISA MATTERS -- promptly, and in any event within five days
after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations thereunder,
for which notice thereof has not been waived pursuant to such
regulations as in effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of
a trustee to administer, any Plan, or the receipt by the Company or
any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that could result
in the incurrence of any liability by the Company or any ERISA
Affiliate pursuant to Title
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I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, or in the imposition of any Lien
on any of the rights, properties or assets of the Company or any
ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty
or excise tax provisions, if such liability or Lien, taken together
with any other such liabilities or Liens then existing, could
reasonably be expected to have a Material Adverse Effect;
(f) NOTICES FROM GOVERNMENTAL AUTHORITY -- promptly, and in any
event within 30 days of receipt thereof, copies of any notice to the
Company or any Subsidiary from any Federal or state Governmental Authority
relating to any order, ruling, statute or other law or regulation that
could reasonably be expected to have a Material Adverse Effect; and
(g) REQUESTED INFORMATION -- with reasonable promptness, such
other data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Financing Agreements as from time to
time may be reasonably requested by any such holder of Notes.
SECTION 7.2. OFFICER'S CERTIFICATE. Each set of financial statements
delivered to a 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 10.2 through Section 10.7
hereof, inclusive, during the quarterly or annual period covered by the
statements 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 amount, ratio or
percentage then in existence); and
(b) EVENT OF DEFAULT -- a statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and conditions
of the Company and its Subsidiaries from the beginning of the quarterly or
annual period covered by the statements then being furnished 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
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
SECTION 7.3. INSPECTION. The Company shall permit the representatives of
each holder of Notes that is an Institutional Investor:
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(a) NO DEFAULT -- if no Default or Event of Default then exists,
at the expense of such holder and upon reasonable prior notice to the
Company, to visit the principal executive office of the Company, to discuss
the affairs, finances and accounts of the Company and its Subsidiaries with
the Company's officers, and (with the consent of the Company, which consent
will not be unreasonably withheld) its independent public accountants, and
(with the consent of the Company, which consent will not be unreasonably
withheld) to visit the other offices and properties of the Company and each
Subsidiary, all at such reasonable times and as often as may be reasonably
requested in writing; and
(b) DEFAULT -- if a Default or Event of Default then exists, at
the expense of the Company, to visit and inspect any of the offices or
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 and independent public
accountants (and by this provision the Company authorizes said accountants
to discuss the affairs, finances and accounts of the Company and its
Subsidiaries), all at such times and as often as may be requested.
SECTION 8. PREPAYMENT OF THE NOTES.
SECTION 8.1. REQUIRED PREPAYMENTS. (a) On August 1, 2002 and on each
August 1 thereafter to and including August 1, 2007 the Company will prepay
$2,571,000 principal amount (or such lesser principal amount as shall then be
outstanding) of the Series A Notes at par and without payment of the Make-Whole
Amount or any premium, PROVIDED that upon any partial prepayment of the Series A
Notes pursuant to Section 8.2 or 8.3 or purchase of the Series A Notes permitted
by Section 8.5, or application of casualty or condemnation proceeds pursuant to
Section 5 of the Intercreditor Agreement, the principal amount of each required
prepayment of the Notes becoming due under this Section 8.1 on and after the
date of such prepayment or purchase shall be reduced in the same proportion as
the aggregate unpaid principal amount of the Notes is reduced as a result of
such prepayment or purchase. Each prepayment pursuant to this Section 8.1(a)
shall be allocated among all Series A Notes at the time outstanding in
proportion, as nearby as practicable, to the respective unpaid principal amounts
thereof.
(b) On August 1, 2002 and on each August 1 thereafter to and including
August 1, 2009 the Company will prepay $1,000,000 principal amount (or such
lesser principal amount as shall then be outstanding) of the Series B Notes at
par and without payment of the Make-Whole Amount or any premium, PROVIDED that
upon any partial prepayment of the Series B Notes pursuant to Section 8.2 or 8.3
or purchase of the Series B Notes permitted by Section 8.5, or application of
casualty or condemnation proceeds pursuant to Section 5 of the Intercreditor
Agreement, the principal amount of each required prepayment of the Series B
Notes becoming due under this Section 8.1 on and after the date of such
prepayment or purchase shall be reduced in the same proportion as the aggregate
unpaid principal amount of the Series B Notes is reduced as a result of such
prepayment or purchase. Each prepayment pursuant to this Section 8.1(b) shall
be
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allocated among all Series B Notes at the time outstanding in proportion, as
nearly as practicable, to the respective unpaid principal amounts thereof.
SECTION 8.2. OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT. The Company
may, at its option, upon notice as provided below, prepay at any time all, or
from time to time any part of, the Notes, in an amount not less than 10% of the
aggregate principal amount of the Notes then outstanding in the case of a
partial prepayment, at 100% of the principal amount so prepaid, together with
interest accrued thereon to the date of such prepayment plus the Make-Whole
Amount determined for the prepayment date with respect to such principal amount.
The Company will give each holder of Notes written notice of each optional
prepayment under this Section 8.2 not less than 30 days and not more than 60
days prior to the date fixed for such prepayment. Each such notice shall
specify such date, the aggregate principal amount of the Notes to be prepaid on
such date, the principal amount of each Note held by such holder to be prepaid
(determined in accordance with Section 8.4), and the interest to be paid on the
prepayment date with respect to such principal amount being prepaid, and shall
be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amount due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment,
the Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amount as of the
specified prepayment date.
SECTION 8.3. CHANGE IN CONTROL.
(a) NOTICE OF CHANGE IN CONTROL OR CONTROL EVENT. The Company will,
within five (5) Business Days after any Responsible Officer has knowledge of the
occurrence of any Change in Control or Control Event, give written notice of
such Change in Control or Control Event to each holder of Notes UNLESS notice in
respect of such Change in Control (or the Change in Control contemplated by such
Control Event) shall have been given pursuant to subparagraph (b) of this
Section 8.3. If a Change in Control has occurred, such notice shall contain and
constitute an offer to prepay Notes as described in subparagraph (c) of this
Section 8.3 and shall be accompanied by the certificate described in
subparagraph (g) of this Section 8.3.
(b) CONDITION TO COMPANY ACTION. The Company will not take any action
that consummates or finalizes a Change in Control unless (i) at least
thirty (30) days prior to such action it shall have given to each holder of
Notes written notice containing and constituting an offer to prepay Notes as
described in subparagraph (c) of this Section 8.3, accompanied by the
certificate described in subparagraph (g) of this Section 8.3, and
(ii) contemporaneously with such action, it prepays all Notes required to be
prepaid in accordance with this Section 8.3.
(c) OFFER TO PREPAY NOTES. The offer to prepay Notes contemplated by
subparagraphs (a) and (b) of this Section 8.3 shall be an offer to prepay, in
accordance with and subject to this Section 8.3, all, but not less than all, the
Notes held by each holder (in this case only, "HOLDER" in respect of any Note
registered in the name of a nominee for a disclosed beneficial owner shall mean
such beneficial owner) on a date specified in such offer (the "PROPOSED
PREPAYMENT DATE").
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If such Proposed Prepayment Date is in connection with an offer contemplated by
subparagraph (a) of this Section 8.3, such date shall be not less than 30 days
and not more than 45 days after the date of such offer (if the Proposed
Prepayment Date shall not be specified in such offer, the Proposed Prepayment
Date shall be the 30th day after the date of such offer).
(d) ACCEPTANCE; REJECTION. A holder of Notes may accept the offer to
prepay made pursuant to this Section 8.3 by causing a notice of such acceptance
to be delivered to the Company at least ten (10) days prior to the Proposed
Prepayment Date. A failure by a holder of Notes to respond to an offer to
prepay made pursuant to this Section 8.3 shall be deemed to constitute a
rejection of such offer by such holder.
(e) PREPAYMENT. Prepayment of the Notes to be prepaid pursuant to this
Section 8.3 shall be at 100% of the principal amount of such Notes together with
interest on such Notes accrued to the date of prepayment but without payment of
a Make-Whole Amount. The prepayment shall be made on the Proposed Prepayment
Date except as provided in subparagraph (f) of this Section 8.3.
(f) DEFERRAL PENDING CHANGE IN CONTROL. The obligation of the Company
to prepay Notes pursuant to the offers required by subparagraph (b) and accepted
in accordance with subparagraph (d) of this Section 8.3 is subject to the
occurrence of the Change in Control in respect of which such offers and
acceptances shall have been made. In the event that such Change in Control does
not occur on the Proposed Prepayment Date in respect thereof, the prepayment
shall be deferred until and shall be made on the date on which such Change in
Control occurs. The Company shall keep each holder of Notes reasonably and
timely informed of (i) any such deferral of the date of prepayment, (ii) the
date on which such Change in Control and the prepayment are expected to occur,
and (iii) any determination by the Company that efforts to effect such Change in
Control have ceased or been abandoned (in which case the offers and acceptances
made pursuant to this Section 8.3 in respect of such Change in Control shall be
deemed rescinded).
(g) OFFICER'S CERTIFICATE. Each offer to prepay the Notes pursuant to
this Section 8.3 shall be accompanied by a certificate, executed by a Senior
Financial Officer of the Company and dated the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that such offer is made pursuant to this
Section 8.3; (iii) the principal amount of each Note offered to be prepaid;
(iv) the interest that would be due on each Note offered to be prepaid, accrued
to the Proposed Prepayment Date; (v) that the conditions of this Section 8.3
have been fulfilled; and (vi) in reasonable detail, the nature and date or
proposed date of the Change in Control.
(h) "CHANGE IN CONTROL" DEFINED. "CHANGE IN CONTROL" means any of the
following events or circumstances:
if any person (as such term is used in section 13(d) and
section 14(d)(2) of the Exchange Act as in effect on the date
of the Closing) or related persons constituting a group (as
such term is used in Rule 13d-5 under the Exchange Act),
other than the
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Current Management, become the "beneficial owners" (as such term is
used in Rule 13d-3 under the Exchange Act as in effect on the date
of the Closing), directly or indirectly, of more than 50% of the
total voting power of all classes then outstanding of the Company's
voting stock.
(i) "CURRENT MANAGEMENT" Defined. "CURRENT MANAGEMENT" means any one or
more of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, President and General Manager, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
Executive Vice President, Sales and Marketing, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice
President, Finance, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President, Operations (North
Dakota), ▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice President, Operations (Minnesota), ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Vice President, Ingredient and Foodservice, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Vice
President, Logistics.
(j) "CONTROL EVENT" DEFINED. "CONTROL EVENT" means:
(i) the execution by the Company or any of its Subsidiaries or
Affiliates of any agreement or letter of intent with respect to any
proposed transaction or event or series of transactions or events which,
individually or in the aggregate, may reasonably be expected to result in a
Change in Control, or
(ii) the execution of any written agreement which, when fully
performed by the parties thereto, would result in a Change in Control.
SECTION 8.4. ALLOCATION OF PARTIAL PREPAYMENTS. In the case of each
partial prepayment of the Notes pursuant to Section 8.2, the principal amount of
the Notes to be prepaid shall be allocated among all of the Notes at the time
outstanding in proportion, as nearly as practicable, to the respective unpaid
principal amounts thereof without distinction as to series.
SECTION 8.5. MATURITY; SURRENDER, ETC. In the case of each prepayment of
Notes pursuant to this Section 8, the principal amount of each Note to be
prepaid shall mature and become due and payable on the date fixed for such
prepayment, together with interest on such principal amount accrued to such date
and the applicable Make-Whole Amount, if any. From and after such date, unless
the Company shall fail to pay such principal amount when so due and payable,
together with the interest and Make-Whole Amount, if any, as aforesaid, interest
on such principal amount shall cease to accrue. Any Note paid or prepaid in
full shall be surrendered to the Company and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid principal amount of
any Note.
SECTION 8.6. PURCHASE OF NOTES. The Company will not and will not permit
any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or prepayment
of the Notes in accordance with the terms of this Agreement and the Notes. The
Company will promptly cancel all Notes acquired by it or any Affiliate pursuant
to any payment, prepayment or purchase of Notes pursuant to any provision of
this Agreement and no Notes may be issued in substitution or exchange for any
such Notes.
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SECTION 8.7. MAKE-WHOLE AMOUNT. The term "MAKE-WHOLE AMOUNT" means, with
respect to any Note of a given series, an amount equal to the excess, if any, of
the Discounted Value of the Remaining Scheduled Payments with respect to the
Called Principal of such Note over the amount of such Called Principal, PROVIDED
that the Make-Whole Amount may in no event be less than zero. For the purposes
of determining the Make-Whole Amount for a given series, the following terms
have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or has become or is
declared to be immediately due and payable pursuant to Section 12.1, as the
context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of
any Note, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the
Notes is payable) equal to the Reinvestment Yield with respect to such
Called Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of
any Note, .60 over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as Screen PX on the Bloomberg Financial Markets Services
Screen (or such other display as may replace Screen PX on the Bloomberg
Financial Markets Services Screen) for actively traded U.S. Treasury
securities having a maturity equal to the Remaining Average Life of such
Called Principal as of such Settlement Date, or (ii) if such yields are not
reported as of such time or the yields reported as of such time are not
ascertainable, the Treasury Constant Maturity Series Yields reported, for
the latest day for which such yields have been so reported as of the second
Business Day preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date. Such implied yield
will be determined, if necessary, by (a) converting U.S. Treasury bill
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the actively traded
U.S. Treasury security with the duration closest to and greater than the
Remaining Average Life and (2) the actively traded U.S. Treasury security
with the duration closest to and less than the Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called
Principal, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the sum of the
products obtained by multiplying (a) the principal component of each
Remaining Scheduled Payment with respect to such Called Principal by
(b) the number of years (calculated to the nearest one-twelfth year) that
will elapse
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between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, PROVIDED that if such Settlement Date is not a date
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2 or
12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or has become or is declared to be immediately due and payable
pursuant to Section 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
SECTION 9.1. COMPLIANCE WITH LAW. The Company will, and will cause each
of its Subsidiaries to, comply with all laws, ordinances or governmental rules
or regulations to which each of them is subject, including, without limitation,
Environmental Laws, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of their respective properties or to the conduct of
their respective businesses, in each case to the extent necessary to ensure that
non-compliance with such laws, ordinances or governmental rules or regulations
or failures to obtain or maintain in effect such licenses, certificates,
permits, franchises and other governmental authorizations could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 9.2. INSURANCE. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
SECTION 9.3. MAINTENANCE OF PROPERTIES. The Company will, and will cause
each of its Subsidiaries to, maintain and keep, or cause to be maintained and
kept, their respective properties in good repair, working order and condition
(other than ordinary wear and tear), so that the business carried on in
connection therewith may be properly conducted at all times, PROVIDED that this
Section shall not prevent the Company or any Subsidiary from discontinuing the
operation and the maintenance of any of its properties if such discontinuance is
desirable in the conduct of
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its business and the Company has concluded that such discontinuance could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 9.4. PAYMENT OF TAXES AND CLAIMS. The Company will, and will
cause each of its Subsidiaries to, file all tax returns required to be filed in
any jurisdiction and to pay and discharge all taxes shown to be due and payable
on such returns and all other taxes, assessments, governmental charges, or
levies imposed on them or any of their properties, assets, income or franchises,
to the extent such taxes and assessments have become due and payable and before
they have become delinquent and all claims for which sums have become due and
payable that have or might become a Lien on properties or assets of the Company
or any Subsidiary, PROVIDED that neither the Company nor any Subsidiary need pay
any such tax or assessment or claims if (i) the amount, applicability or
validity thereof is contested by the Company or such Subsidiary on a timely
basis in good faith and in appropriate proceedings, and the Company or a
Subsidiary has established adequate reserves therefor in accordance with GAAP on
the books of the Company or such Subsidiary or (ii) the nonpayment of all such
taxes and assessments in the aggregate could not reasonably be expected to have
a Material Adverse Effect.
SECTION 9.5. CORPORATE EXISTENCE, ETC. The Company will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 10.2 and 10.5, the Company will at all times preserve and keep in full
force and effect the corporate existence of each of its Subsidiaries and all
rights and franchises of the Company and its Subsidiaries unless, in the good
faith judgment of the Company, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise could
not, individually or in the aggregate, have a Material Adverse Effect.
SECTION 10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are outstanding:
SECTION 10.1. TRANSACTIONS WITH AFFILIATES. The Company will not and will
not permit any Subsidiary to enter into directly or indirectly any transaction
or Material group of related transactions (including without limitation the
purchase, lease, sale or exchange of properties of any kind or the rendering of
any service) with any Affiliate (other than the Company or another Subsidiary),
except in the ordinary course 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 be obtainable in a
comparable arm's-length transaction with a Person not an Affiliate.
SECTION 10.2. MERGER, CONSOLIDATION, ETC. The Company will not, and will
not permit any of its Subsidiaries to, consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person (except that a
Subsidiary of the Company may consolidate with or merge with, or convey,
transfer or lease substantially all of its assets in a single transaction or
series of transactions to, the Company or another Subsidiary of the Company so
long as in any such transaction involving the Guarantor and another Subsidiary
whereunder the Guarantor is not the surviving or purchasing
-28-
corporation, the successor shall be a solvent corporation organized under the
laws of the United States or any State thereof, shall have executed an
assumption of the due and punctual performance of each covenant and condition of
the Financing Agreements to which the Guarantor is a party and no Default or
Event of Default shall exist immediately after giving effect to such
transaction), PROVIDED that the foregoing restriction does not apply to the
consolidation or merger of the Company with, or the conveyance, transfer or
lease of substantially all of the assets of the Company in a single transaction
or series of transactions to, any Person so long as:
(a) the successor formed by such consolidation or the survivor of
such merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety, as the case
may be (the "SUCCESSOR CORPORATION"), shall be a solvent corporation
organized and existing under the laws of the United States of America, any
State thereof or the District of Columbia;
(b) if the Company is not the Successor Corporation, such
corporation shall have executed and delivered to each holder of Notes its
assumption of the due and punctual performance and observance of each
covenant and condition of the Financing Agreements in form and substance
reasonably satisfactory to the holders of the Notes; and
(c) immediately after giving effect to such transaction no
Default or Event of Default would exist.
No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any Successor
Corporation from its liability under this Agreement, the Other Agreements or the
Notes.
SECTION 10.3. CONSOLIDATED NET WORTH. The Company will not, at any time,
permit Consolidated Net Worth to be less than the sum of (a) $27,000,000, plus
(b) an aggregate amount equal to 30% of its Consolidated Net Income (but, in
each case, only if a positive number) for each completed fiscal year beginning
with the fiscal year ended July 31, 1998.
SECTION 10.4. CERTAIN RATIOS. (a) The Company will not at any time permit
the ratio of (1) Consolidated Cash Flow to (2) Consolidated Fixed Charges, to be
less than 2.00 to 1.0, determined as of the end of each fiscal quarter for the
immediately preceding four fiscal quarters (ending on the date of calculation)
treating such period of four fiscal quarters as a single accounting period.
(b) The Company will not at any time permit the ratio of (1)
Consolidated Funded Debt to (2) Consolidated Cash Flow to exceed (A) 4.00 to
1.00 for the period from the Closing to and including July 31, 1999, (B) 3.50 to
1.00 for the period from August 1, 1999 to and including January 31, 2000 and
(C) 3.00 to 1.00 at all times thereafter, in each case determined as of the end
of each fiscal quarter for the immediately preceding four fiscal quarters
(ending on the date of calculation) treating such period of four fiscal quarters
as a single accounting period.
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(c) The Company will not, at any time, permit Priority Debt to exceed an
amount equal to 10% (or, at all times from and after the Release Date, 15%) of
Consolidated Net Worth.
SECTION 10.5. SALE OF ASSETS, ETC. Except as permitted under Section 10.2,
the Company will not, and will not permit any of its Subsidiaries to, make any
Asset Disposition unless:
(a) in the good faith opinion of the Company, the Asset
Disposition is in exchange for consideration having a Fair Market Value at
least equal to that of the property exchanged and is in the best interest
of the Company or such Subsidiary; and
(b) immediately after giving effect to the Asset Disposition, no
Default or Event of Default would exist; and
(c) immediately after giving effect to the Asset Disposition, the
Disposition Value of all property that was the subject of any Asset
Disposition occurring on or after the date of Closing would not exceed 25%
of Consolidated Assets as of the end of the then most recently ended fiscal
year of the Company.
If the Net Proceeds Amount for any Transfer is applied to a Debt Purchase
Application or a Property Reinvestment Application or any combination thereof
within 360 days after such Transfer, then such Transfer, only for the purpose of
determining compliance with subsection (c) of this Section 10.5 as of a date on
or after the Net Proceeds Amount is so applied, shall be deemed not to be an
Asset Disposition.
SECTION 10.6. DISPOSAL OF OWNERSHIP OF A SUBSIDIARY. The Company will not,
and will not permit any of its Subsidiaries to, sell or otherwise dispose of any
shares of Subsidiary Stock, nor will the Company permit any such Subsidiary to
issue, sell or otherwise dispose of any shares of its own Subsidiary Stock,
PROVIDED that the foregoing restrictions do not apply to:
(a) the issue of directors' qualifying shares by any such
Subsidiary;
(b) any such Transfer of Subsidiary Stock constituting a Transfer
described in clause (a) of the definition of "Asset Disposition"; and
(c) the Transfer of all of the Subsidiary Stock of a Subsidiary
of the Company owned by the Company and its other Subsidiaries if:
(i) such Transfer satisfies the requirements of Section
10.5 hereof,
(ii) in connection with such Transfer the entire
Investment (whether represented by stock, Debt, claims or otherwise)
of the Company and its other Subsidiaries in such Subsidiary is
sold, transferred or otherwise disposed of to a
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Person other than (A) the Company, (B) another Subsidiary not being
simultaneously disposed of, or (C) an Affiliate, and
(iii) the Subsidiary being disposed of has no continuing Investment
in any other Subsidiary of the Company not being simultaneously disposed of
or in the Company.
Notwithstanding the foregoing, the Company shall at all times cause the
Guarantor to be a Subsidiary of the Company PROVIDED that the foregoing shall
not prohibit any transaction otherwise permitted by Section 10.2 hereof.
SECTION 10.7. LIENS. From and after the Release Date, the Company will
not, and will not permit any of its Subsidiaries to, directly or indirectly
create, incur, assume or permit to exist (upon the happening of a contingency or
otherwise) any Lien on or with respect to any property or asset (including,
without limitation, any document or instrument in respect of goods or accounts
receivable) of the Company or any such Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom or assign or otherwise
convey any right to receive income or profits (unless it makes, or causes to be
made, effective provision whereby the Notes will be equally and ratably secured
with any and all other obligations thereby secured, such security to be pursuant
to an agreement reasonably satisfactory to the Required Holders and, in any such
case, the Notes shall have the benefit, to the fullest extent that, and with
such priority as, the holders of the Notes may be entitled under applicable law,
of an equitable Lien on such property), except:
(a) Liens for taxes, assessments or other governmental charges
which are not yet due and payable or the payment of which is not at the
time required by Section 9.4;
(b) Liens of or resulting from any litigation or legal proceeding
which are currently being contested in good faith by appropriate
proceedings and for which the Company or such Subsidiary shall have set
aside on its books adequate reserves with respect thereto;
(c) Liens on property or assets of any Subsidiary securing Debt
owing to the Company or to any Subsidiary;
(d) Liens existing as of the Release Date and permitted by
Section 5 of the Security Agreements or Section 8 of the Mortgages;
(e) any Lien created to secure all or any part of the purchase
price, or to secure Debt incurred or assumed to pay all or any part of the
purchase price or cost of construction, of tangible property (or any
improvement thereon) acquired or constructed by the Company or a Subsidiary
after the date of the Closing including Liens existing on fixed assets at
the time of acquisition thereof or at the time of acquisition by the
Company or a Subsidiary of any business entity then owing such fixed
assets, whether or not such existing Liens were given to secure the payment
of the purchase price of the fixed assets
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to which they attach so long as they were not incurred, extended or renewed
in contemplation of such acquisition, PROVIDED that
(i) any such Lien shall extend solely to the item or
items of such property (or improvement thereon) so acquired or
constructed and, if required by the terms of the instrument
originally creating such Lien, other property (or improvement
thereon) which is an improvement to or is acquired for specific
use in connection with such acquired or constructed property (or
improvement thereon) or which is real property being improved by
such acquired or constructed property (or improvement thereon),
(ii) the principal amount of the Debt secured by any
such Lien shall at no time exceed an amount equal to 100% of the
Fair Market Value (as determined in good faith by the board of
directors of the Company) of such property (or improvement
thereon) at the time of such acquisition or construction, and
(iii) any such Lien shall be created contemporaneously
with, or within 180 days after, the acquisition or construction of
such property;
(f) Liens incidental to the conduct of business or the ownership
of properties and assets (including Liens in connection with worker's
compensation, unemployment insurance and other like laws, warehousemen's
and attorneys' liens and statutory landlords' liens) and Liens to secure
the performance of bids, tenders or trade contracts, or to secure statutory
obligations, indemnity, surety or appeal bonds or other Liens of like
general nature, in any such case not incurred in connection with the
incurrence of Debt; PROVIDED that such Liens do not, individually or in the
aggregate, materially impair the use of such property encumbered by any
such Lien in the operation of the business of the Company and its
Subsidiaries, taken as a whole, or the value of the property so encumbered
for purposes of such business; PROVIDED FURTHER in each case, the
obligation secured is not overdue or, if overdue, is being contested in
good faith by appropriate actions or proceedings;
(g) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities and other
similar purposes, or zoning or other restrictions as to the use of real
properties, which are necessary for the conduct of the activities of the
Company and its Subsidiaries or which customarily exist on properties of
Persons engaged in similar activities and similarly situated and which do
not in any event materially impair their use in the operation of the
business of the Company and its Subsidiaries, taken as a whole;
(h) any Lien renewing, extending or refunding any Lien permitted
by paragraph (d) of this Section 10.7, PROVIDED that (i) the principal
amount of Debt secured by such Lien immediately prior to such extension,
renewal or refunding is not increased or the maturity thereof reduced,
(ii) such Lien is not extended to any other property, and
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(iii) immediately after such extension, renewal or refunding no
Default or Event of Default would exist; and
(i) other Liens, not otherwise permitted by paragraphs (a)
through (h) hereof, securing Debt of the Company or any Subsidiary
permitted under Section 10.4(c).
For the purposes of this Section 10.7, any Person becoming a Subsidiary after
the date of this Agreement shall be deemed to have incurred all of its then
outstanding Liens at the time it becomes a Subsidiary, and any Person extending,
renewing or refunding any Debt secured by any Lien shall be deemed to have
incurred such Lien at the time of such extension, renewal or refunding.
SECTION 10.8. NATURE OF BUSINESS. The Company will not, and will not
permit any of its Subsidiaries to, engage in any business if, as a result, the
general nature of the business in which the Company and its Subsidiaries, taken
as a whole, would then be engaged would be substantially changed from the
general nature of the business in which the Company and its Subsidiaries, taken
as a whole, are engaged on the date of this Agreement as described in the
Memorandum.
SECTION 10.9. DISTRIBUTIONS. The Company will not pay cash dividends on
capital stock in excess of minimum requirements, as stated in the Company's
bylaws and/or stock certificates, without the prior written consent of the
Required Holders, which consent will not be unreasonably withheld. The Company
may pay cash patronage PROVIDED, that at the time thereof and after giving
effect thereto, no Default or Event of Default exists.
SECTION 11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions or
events shall occur and be continuing:
(a) the Company defaults in the payment of any principal or
Make-Whole Amount, if any, on any Note when the same becomes due and
payable, whether at maturity or at a date fixed for prepayment or by
declaration or otherwise; or
(b) the Company defaults in the payment of any interest on any
Note for more than five Business Days after the same becomes due and
payable; or
(c) the Company defaults in the performance of or compliance with
any term contained in Sections 10.2 through 10.7 or Section 7.1(d); or
(d) the Company defaults in the performance of or compliance with
any term contained herein (other than those referred to in paragraphs (a),
(b) and (c) of this Section 11) and such default is not remedied within 30
days after the earlier of (i) a Responsible Officer obtaining actual
knowledge of such default and (ii) the Company
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receiving written notice of such default from any holder of a Note (any
such written notice to be identified as a "notice of default" and to refer
specifically to this paragraph (d) of Section 11); or
(e) default shall occur in the observance or performance of any
provision of any Security Document by the Company or the Guarantor, as the
case may be, which is not remedied within 30 days after the earlier of (i)
the day on which a Responsible Officer of the Company first obtains
knowledge of such default, or (ii) the day on which written notice thereof
is given to the Company by the holder of any Note; or
(f) any representation or warranty made in writing by or on
behalf of the Company or the Guarantor or by any officer of the Company in
any Financing Agreement or in any writing furnished in connection with the
transactions contemplated hereby proves to have been false or incorrect in
any material respect on the date as of which made; or
(g) (i) the Company or any Subsidiary is in default (as principal
or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Debt that is outstanding in
an aggregate principal amount of at least $1,000,000 beyond any period of
grace provided with respect thereto, or (ii) the Company or any Subsidiary
is in default in the performance of or compliance with any term of any
evidence of any Debt in an aggregate outstanding principal amount of at
least $1,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and either (x) such default remains
uncured and unwaived for at least 90 days or (y) as a consequence of such
default or condition such Debt has become, or has been declared (or one or
more Persons are entitled to declare such Debt to be), due and payable
before its stated maturity or before its regularly scheduled dates of
payment, or (iii) as a consequence of the occurrence or continuation of any
event or condition (other than the passage of time or the right of the
holder of Debt to convert such Debt into equity interests), (x) the Company
or any Subsidiary has become obligated to purchase or repay Debt before its
regular maturity or before its regularly scheduled dates of payment in an
aggregate outstanding principal amount of at least $1,000,000, or (y) one
or more Persons have the right to require the Company or any Subsidiary so
to purchase or repay such Debt; or
(h) the Company or any Subsidiary (i) is generally not paying, or
admits in writing its inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the filing against it of,
a petition for relief or reorganization or arrangement or any other
petition in bankruptcy, for liquidation or to take advantage of any
bankruptcy, insolvency, reorganization, moratorium or other similar law of
any jurisdiction, (iii) makes an assignment for the benefit of its
creditors, (iv) consents to the appointment of a custodian, receiver,
trustee or other officer with similar powers with respect to it or with
respect to any substantial part of its property, (v) is adjudicated as
insolvent or to be liquidated, or (vi) takes corporate action for the
purpose of any of the foregoing; or
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(i) a court or governmental authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for
relief or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of the
Company or any of its Subsidiaries, or any such petition shall be filed
against the Company or any of its Subsidiaries and such petition shall not
be dismissed within 60 days; or
(j) a final judgment or judgments for the payment of money
aggregating in excess of $1,000,000 are rendered against one or more of the
Company and its Subsidiaries and which judgments are not, within 45 days
after entry thereof, bonded, discharged or stayed pending appeal, or are
not discharged within 45 days after the expiration of such stay; or
(k) any Financing Agreement shall cease to be in full force and
effect for any reason whatsoever, including, without limitation, a
determination by any governmental body or court that such agreement is
invalid, void or unenforceable or any obligor thereunder shall contest or
deny in writing the validity or enforceability of any of its obligations
under such Financing Agreement; or
(l) if (i) any Plan shall fail to satisfy the minimum funding
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the aggregate "amount
of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $100,000, (iv) the Company or any ERISA Affiliate shall have
incurred or is reasonably expected to incur any liability pursuant to Title
I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (v) the Company or any ERISA Affiliate
withdraws from any Multiemployer Plan, or (vi) the Company or any
Subsidiary establishes or amends any employee welfare benefit plan that
provides post-employment welfare benefits in a manner that would increase
the liability of the Company or any Subsidiary thereunder; and any such
event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
As used in Section 11(l), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
SECTION 12. REMEDIES ON DEFAULT, ETC.
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SECTION 12.1. ACCELERATION. (a) If an Event of Default with respect to the
Company or the Guarantor described in paragraph (h) or (i) of Section 11 (other
than an Event of Default described in clause (i) of paragraph (h) or described
in clause (vi) of paragraph (h) by virtue of the fact that such clause
encompasses clause (i) of paragraph (h)) has occurred, all the Notes then
outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 25% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
Upon any Note's becoming due and payable under this Section 12.1, whether
automatically or by declaration, such Note will forthwith mature and the entire
unpaid principal amount of such Note, plus (i) all accrued and unpaid interest
thereon and (ii) the Make-Whole Amount determined in respect of such principal
amount (to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without presentment, demand,
protest or further notice, all of which are hereby waived. The Company
acknowledges, and the parties hereto agree, that each holder of a Note has the
right to maintain its investment in the Notes free from repayment by the Company
(except as herein specifically provided for), 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, is intended to provide
compensation for the deprivation of such right under such circumstances.
SECTION 12.2. OTHER REMEDIES. If any Default or Event of Default has
occurred and is continuing, and irrespective of whether any Notes have become or
have been declared immediately due and payable under Section 12.1, the holder of
any Note at the time outstanding may proceed to protect and enforce the rights
of such holder by an action at law, suit in equity or other appropriate
proceeding (including, without limitations, all rights and remedies available to
such holder under any of the other Financing Agreements), whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
SECTION 12.3. RESCISSION. At any time after any Notes have been declared
due and payable pursuant to clause (b) or (c) of Section 12.1, the holders of
not less than 76% in principal amount of the Notes then outstanding, by written
notice to the Company, may rescind and annul any such declaration and its
consequences if (a) the Company has paid all overdue interest on the Notes, all
principal of and Make-Whole Amount, if any, on any Notes that are due and
payable and are unpaid other than by reason of such declaration, and all
interest on such overdue principal and Make-Whole Amount, if any, and (to the
extent permitted by applicable law) any overdue
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interest in respect of the Notes, at the Default Rate, (b) all Events of Default
and Defaults, other than non-payment of amounts that have become due solely by
reason of such declaration, have been cured or have been waived pursuant to
Section 17, and (c) no judgment or decree has been entered for the payment of
any monies due pursuant hereto or to the Notes. No rescission and annulment
under this Section 12.3 will extend to or affect any subsequent Event of Default
or Default or impair any right consequent thereon.
SECTION 12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC. No course
of dealing and no delay on the part of any holder of any Note in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such holder's rights, powers or remedies. No right, power or remedy conferred
by this Agreement or by any Note upon any holder thereof shall be exclusive of
any other right, power or remedy referred to herein or therein or now or
hereafter available at law, in equity, by statute or otherwise. Without
limiting the obligations of the Company under Section 15, the Company will pay
to the holder of each Note on demand such further amount as shall be sufficient
to cover all costs and expenses of such holder incurred in any enforcement or
collection under this Section 12, including, without limitation, reasonable
attorneys' fees, expenses and disbursements.
SECTION 13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
SECTION 13.1. REGISTRATION OF NOTES. The Company shall keep at its
principal executive office a register for the registration and registration of
transfers of Notes. The name and address of each holder of one or more Notes,
each transfer thereof and the name and address of each transferee of one or more
Notes shall be registered in such register. Prior to due presentment for
registration of transfer, 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. The Company shall give to any holder of a Note that is an
Institutional Investor promptly upon request therefor, a complete and correct
copy of the names and addresses of all registered holders of Notes.
SECTION 13.2. TRANSFER AND EXCHANGE OF NOTES. Upon surrender of any Note
at the principal executive office of the Company for registration of transfer or
exchange (and in the case of a surrender for registration of transfer, duly
endorsed or accompanied by a written instrument of transfer duly executed by the
registered holder of such Note or its attorney duly authorized in writing and
accompanied by the address for notices of each transferee of such Note or part
thereof), the Company shall execute and deliver, at the Company's expense
(except as provided below), one or more new Notes of the same series (as
requested by the holder thereof) in exchange therefor, 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 1-A or 1-B, as the case may be. 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. Notes shall not be transferred in
denominations of less than $100,000, PROVIDED that if necessary to enable the
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registration of transfer by a holder of its entire holding of Notes, one Note
may be in a denomination of less than $100,000. Any transferee, by its
acceptance of a Note registered in its name (or the name of its nominee), shall
be deemed to have made the representation set forth in Section 6.2.
SECTION 13.3. 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 and such loss, theft, destruction or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity
reasonably satisfactory to it (PROVIDED that if the holder of such Note is,
or is a nominee for, an original Purchaser or another holder of a Note with
a minimum net worth of at least $5,000,000, such Person's own unsecured
agreement of indemnity shall be deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall 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.
SECTION 14. PAYMENTS ON NOTES.
SECTION 14.1. PLACE OF PAYMENT. Subject to Section 14.2, payments of
principal, Make-Whole Amount, if any, and interest becoming due and payable on
the Notes shall be made in Carrington, North Dakota at the principal office of
the Company in such jurisdiction. The Company may at any time, by notice to
each holder of a Note, change the place of payment of the Notes so long as such
place of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
SECTION 14.2. HOME OFFICE PAYMENT. So long as you or your nominee shall be
the holder of any Note, and notwithstanding anything contained in Section 14.1
or in such Note to the contrary, the Company will pay all sums becoming due on
such Note for principal, Make-Whole Amount, if any, and interest by the method
and at the address specified for such purpose below your name in Schedule A, or
by such other method or at such other address as you shall have from time to
time specified to the Company in writing for such purpose, without the
presentation or surrender of such Note or the making of any notation thereon,
except that upon written request of the Company made concurrently with or
reasonably promptly after payment or prepayment in full of any Note, you shall
surrender such Note for cancellation, reasonably promptly after any such
request, to the Company at its principal executive office or at the place of
payment most recently designated by the Company pursuant to Section 14.1. Prior
to any sale or other disposition of any Note held by you or your nominee you
will, at your election, either endorse thereon the amount of principal paid
thereon and the last date to which interest has been paid thereon or surrender
such Note to the Company in exchange for a new Note or Notes pursuant to
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Section 13.2. The Company will afford the benefits of this Section 14.2 to any
Institutional Investor that is the direct or indirect transferee of any Note
purchased by you under this Agreement and that has made the same agreement
relating to such Note as you have made in this Section 14.2.
SECTION 15. EXPENSES, ETC.
SECTION 15.1. TRANSACTION EXPENSES. Whether or not the transactions
contemplated hereby are consummated, the Company will pay all costs and expenses
(including reasonable attorneys' fees of a special counsel and, if reasonably
required, local or other counsel) incurred by you and each Other Purchaser or
holder of a Note in connection with such transactions and in connection with any
amendments, waivers or consents under or in respect of the Financing Agreements
(whether or not such amendment, waiver or consent becomes effective), including,
without limitation: (a) the costs and expenses incurred in enforcing or
defending (or determining whether or how to enforce or defend) any rights under
the Financing Agreements or in responding to any subpoena or other legal process
or informal investigative demand issued in connection with the Financing
Agreements, or by reason of being a holder of any Note, and (b) the costs and
expenses, including financial advisors' fees, incurred in connection with the
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save you and each other holder of a Note
harmless from, all claims in respect of any fees, costs or expenses, if any, of
brokers and finders (other than those retained by you).
SECTION 15.2. SURVIVAL. The obligations of the Company under this
Section 15 will survive the payment or transfer of any Note, the enforcement,
amendment or waiver of any provision of the Financing Agreements, and the
termination of this Agreement.
SECTION 16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of the Financing Agreements, the purchase or transfer by
you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company or the Guarantor pursuant to any
Financing Agreement shall be deemed representations and warranties of the
Company or the Guarantor under such Financing Agreement. Subject to the
preceding sentence, the Financing Agreements embody the entire agreement and
understanding between you and the Company and supersede all prior agreements and
understandings relating to the subject matter hereof.
SECTION 17. AMENDMENT AND WAIVER.
SECTION 17.1. REQUIREMENTS. This Agreement and the Notes may be amended,
and the observance of any term hereof or of the Notes may be waived (either
retroactively or
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prospectively), with (and only with) the written consent of the Company, the
Guarantor and the Required Holders, except that (a) no amendment or waiver of
any of the provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined
term (as it is used therein), will be effective as to you unless consented to by
you in writing, and (b) no such amendment or waiver may, without the written
consent of the holder of each Note at the time outstanding affected thereby,
(i) subject to the provisions of Section 12 relating to acceleration or
rescission, change the amount or time of any prepayment or payment of principal
of, or reduce the rate or change the time of payment or method of computation of
interest or of the Make-Whole Amount on, the Notes, (ii) change the percentage
of the principal amount of the Notes the holders of which are required to
consent to any such amendment or waiver, or (iii) amend any of Sections 8,
11(a), 11(b), 12, 17 or 20.
SECTION 17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) SOLICITATION. The Company will provide each holder of the Notes
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and considered decision with respect to
any proposed amendment, waiver or consent in respect of any of the provisions
hereof or of the Notes. The Company will deliver executed or true and correct
copies of each amendment, waiver or consent effected pursuant to the provisions
of this Section 17 to each holder of outstanding Notes promptly following the
date on which it is executed and delivered by, or receives the consent or
approval of, the requisite holders of Notes.
(b) PAYMENT. The Company will 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 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 of any
Financing Agreement unless such remuneration is concurrently paid, or security
is concurrently granted, on the same terms, ratably to each holder of Notes then
outstanding whether or not such holder consented to such waiver or amendment.
SECTION 17.3. BINDING EFFECT, ETC. Any amendment or waiver consented to as
provided in this Section 17 applies equally to all holders of Notes and is
binding upon them and upon each future holder of any Note and upon the Company
and the Guarantor without regard to whether such Note has been marked to
indicate such amendment or waiver. No such amendment or waiver will extend to
or affect any obligation, covenant, agreement, Default or Event of Default not
expressly amended or waived or impair any right consequent thereon. No course
of dealing between the Company and the holder of any Note nor any delay in
exercising any rights hereunder or under any Note shall operate as a waiver of
any rights of any holder of such Note. As used herein, the term "this
Agreement" and references thereto or to any Financing Agreement shall mean this
Agreement as it may from time to time be amended or supplemented.
SECTION 17.4. NOTES HELD BY COMPANY, ETC. Solely for the purpose of
determining whether the holders of the requisite percentage of the aggregate
principal amount of Notes then outstanding approved or consented to any
amendment, waiver or consent to be given under this Agreement or the Notes, or
have directed the taking of any action provided herein or in the Notes
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to be taken upon the direction of the holders of a specified percentage of the
aggregate principal amount of Notes then outstanding, Notes directly or
indirectly owned by the Company or any of its Affiliates shall be deemed not to
be outstanding.
SECTION 18. NOTICES.
All notices and communications provided for hereunder shall be in writing
and sent (a) by telefacsimile if the sender on the same day sends a confirming
copy of such notice by a recognized overnight delivery service (charges
prepaid), or (b) by registered or certified mail with return receipt requested
(postage prepaid), or (c) by a recognized overnight delivery service (with
charges prepaid). Any such notice must be sent:
(i) if to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other address
as you or it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of Vice President-Finance, or at such
other address as the Company shall have specified to the holder of each
Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
SECTION 19. REPRODUCTION OF DOCUMENTS.
Any Financing Agreement and all documents relating thereto, including,
without limitation, (a) consents, waivers and modifications that may hereafter
be executed, (b) documents received by you at the Closing (except the Notes
themselves), and (c) financial statements, certificates and other information
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
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 you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
SECTION 20. CONFIDENTIAL INFORMATION.
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For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, PROVIDED that such term does not
include information that (a) was publicly known or otherwise known to you prior
to the time of such disclosure, (b) subsequently becomes publicly known through
no act or omission by you or any Person acting on your behalf, (c) otherwise
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you, PROVIDED that you may deliver or disclose Confidential
Information to (i) your directors, trustees, officers, employees, agents,
attorneys and affiliates (to the extent such disclosure reasonably relates to
the administration of the investment represented by your Notes), (ii) your
financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 20, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 20), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 20),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your investment portfolio or (viii) any other Person to which
such delivery or disclosure may be necessary or appropriate (w) to effect
compliance with any law, rule, regulation or order applicable to you, (x) in
response to any subpoena or other legal process, (y) in connection with any
litigation to which you are a party or (z) if an Event of Default has occurred
and is continuing, to the extent you may reasonably determine such delivery and
disclosure to be necessary or appropriate in the enforcement or for the
protection of the rights and remedies under your Notes and this Agreement. Each
holder of a Note, by its acceptance of a Note, will be deemed to have agreed to
be bound by and to be entitled to the benefits of this Section 20 as though it
were a party to this Agreement. On reasonable request by the Company in
connection with the delivery to any holder of a Note of information required to
be delivered to such holder under this Agreement or requested by such holder
(other than a holder that is a party to this Agreement or its nominee), such
holder will enter into an agreement with the Company embodying the provisions of
this Section 20.
SECTION 21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as the
purchaser of the Notes that you have agreed to purchase hereunder, by written
notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever
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the word "you" is used in this Agreement (other than in this Section 21), such
word shall be deemed to refer to such Affiliate in lieu of you. In the event
that such Affiliate is so substituted as a purchaser hereunder and such
Affiliate thereafter transfers to you all of the Notes then held by such
Affiliate, upon receipt by the Company of notice of such transfer, wherever the
word "you" is used in this Agreement (other than in this Section 21), such word
shall no longer be deemed to refer to such Affiliate, but shall refer to you,
and you shall have all the rights of an original holder of the Notes under this
Agreement.
SECTION 22. MISCELLANEOUS.
SECTION 22.1. SUCCESSORS AND ASSIGNS. All covenants and other agreements
contained in this Agreement by or on behalf of any of the parties hereto bind
and inure to the benefit of their respective successors and assigns (including,
without limitation, any subsequent holder of a Note) whether so expressed or
not.
SECTION 22.2. PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this
Agreement or the Notes to the contrary notwithstanding, any payment of principal
of or Make-Whole Amount or interest on any Note that is due on a date other than
a Business Day shall be made on the next succeeding Business Day without
including the additional days elapsed in the computation of the interest payable
on such next succeeding Business Day.
SECTION 22.3. SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall (to the full extent permitted by law)
not invalidate or render unenforceable such provision in any other jurisdiction.
SECTION 22.4. CONSTRUCTION. Each covenant contained herein shall be
construed (absent express provision to the contrary) as being independent of
each other covenant contained herein, so that compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with any other covenant. Where any provision herein refers to action
to be taken by any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
SECTION 22.5. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be an original but all of which together
shall constitute one instrument. Each counterpart may consist of a number of
copies hereof, each signed by less than all, but together signed by all, of the
parties hereto.
SECTION 22.6. GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with, and the rights of the parties shall be governed by,
the law of the State of North Dakota excluding choice-of-law principles of the
law of such State that would require the application of the laws of a
jurisdiction other than such State.
-43-
SECTION 22.7. ADDITIONAL DEBT. Subject to the terms and provisions hereof,
the Company may, from time to time, issue and sell additional senior promissory
notes and may, in connection with the documentation thereof, incorporate by
reference various provisions of this Agreement. Such incorporation by reference
shall not modify, dilute or otherwise affect the terms and provisions hereof.
* * * * *
-44-
If you are in agreement with the foregoing, please sign the form of
agreement on the accompanying counterpart of this Agreement and return it to the
Company, whereupon the foregoing shall become a binding agreement between you
and the Company.
Very truly yours,
DAKOTA GROWERS PASTA COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Its President
-45-
Accepted as of August 1, 1998:
MASSACHUSETTS MUTUAL LIFE
INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Managing Director
-46-
Accepted as of August 1, 1998:
BAYSTATE HEALTH SYSTEMS, INC.
By: Massachusetts Mutual Life
Insurance Company, its Investment
Adviser
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Investment Officer
-47-
Accepted as of August 1, 1998:
CM LIFE INSURANCE COMPANY
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its Investment Officer
-48-
Accepted as of August 1, 1998:
THE SECURITY MUTUAL LIFE INSURANCE
COMPANY OF LINCOLN, NEBRASKA
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its Vice President
Chief Investment Officer
-49-
Accepted as of August 1, 1998:
THE CANADA LIFE ASSURANCE COMPANY
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Its Assistant Treasurer
-50-
INFORMATION RELATING TO PURCHASERS
PRINCIPAL AMOUNT
AND SERIES OF NOTES
NAME AND ADDRESS OF PURCHASER TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE $2,500,000 Series A
COMPANY $1,500,000 Series B
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Investment Division
▇▇▇▇ ▇. ▇▇▇▇▇, Managing Director
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Dakota Growers Pasta Company, 7.04% Senior Secured Guaranteed Notes, Series A,
due 2008, PPN 23423# AA 5 and 7.14% Senior Secured Guaranteed Notes, Series B,
due 2010, PPN 23423# AB 3, principal, premium or interest") to:
Chase Manhattan Bank, N.A. (ABA #▇▇▇▇▇▇▇▇▇)
4 Chase MetroTech Center
New York, New York 10081
for credit to: MassMutual IFM Non-Traditional Account Number 910-2509073
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (▇▇▇) ▇▇▇-▇▇▇▇,
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
SCHEDULE A
(to Note Purchase Agreement)
PRINCIPAL AMOUNT
AND SERIES OF NOTES
NAME AND ADDRESS OF PURCHASER TO BE PURCHASED
MASSACHUSETTS MUTUAL LIFE INSURANCE $9,500,000 Series A
COMPANY $5,250,000 Series B
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Investment Division
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Dakota Growers Pasta Company, 7.04% Senior Secured Guaranteed Notes, Series A,
due 2008, PPN 23423# AA 5 and 7.14% Senior Secured Guaranteed Notes, Series B,
due 2010, PPN 23423# AB 3, principal, premium or interest") to:
Citibank, N.A. (ABA #▇▇▇▇▇▇▇▇▇)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
for credit to: MassMutual Long Term Pool Account Number 4067-3488
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (▇▇▇) ▇▇▇-▇▇▇▇,
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
-52-
PRINCIPAL AMOUNT
AND SERIES OF NOTES
NAME AND ADDRESS OF PURCHASER TO BE PURCHASED
BAYSTATE HEALTH SYSTEMS, INC. $500,000 Series A
(Intermediate Aggregate)
c/o Massachusetts Mutual Life Insurance Company
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Investment Division
▇▇▇▇▇▇ ▇▇, Managing Director
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Dakota Growers Pasta Company, 7.04% Senior Secured Guaranteed Notes, Series A,
due 2008, PPN 23423# AA 5 , principal, premium or interest") to:
Boston Safe Deposit and Trust Company
ABA #▇▇▇▇▇▇▇▇▇
DDA No. 048771
Ref: Baystate Health Systems Intermediate Aggregate
A/C #BPOF3001002
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (▇▇▇) ▇▇▇-▇▇▇▇,
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: MAC & Co.
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
-53-
PRINCIPAL AMOUNT
AND SERIES OF NOTES
NAME AND ADDRESS OF PURCHASER TO BE PURCHASED
CM LIFE INSURANCE COMPANY $500,000 Series A
c/o Massachusetts Mutual Life Insurance Company $250,000 Series B
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Securities Investment Division
▇▇▇▇ ▇. ▇▇▇▇▇, Managing Director
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Dakota Growers Pasta Company, 7.04% Senior Secured Guaranteed Notes, Series A,
due 2008, PPN 23423# AA 5 and 7.14% Senior Secured Guaranteed Notes, Series B,
due 2010, PPN 23423# AB 3, principal, premium or interest") to:
Citibank, N.A. (ABA #▇▇▇▇▇▇▇▇▇)
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
for credit to: Segment 43 - Universal Life Account Number 4068-6561
Re: Description of security, principal and interest split
with telephone advice of payment to the Securities Custody and Collection
Department of Massachusetts Mutual Life Insurance Company at (▇▇▇) ▇▇▇-▇▇▇▇.
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments, to be addressed Attention: Securities Custody
and Collection Department, F 381.
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
-54-
PRINCIPAL AMOUNT
AND SERIES OF NOTES
NAME AND ADDRESS OF PURCHASER TO BE PURCHASED
THE SECURITY MUTUAL LIFE INSURANCE $2,000,000 Series B
COMPANY OF LINCOLN, NEBRASKA
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds (identifying each payment as
"Dakota Growers Pasta Company, 7.14% Senior Secured Guaranteed Notes, Series B,
due 2010, PPN 23423# AB 3, principal, premium or interest") to:
National Bank of Commerce (ABA #1040-00045)
13th and O Street
Lincoln, Nebraska
for credit to: Security Mutual Life
Account Number ▇▇-▇▇▇-▇▇▇
Notices
All notices and communications to be addressed as first provided above, except
notices with respect to payments and written confirmation of each such payment
to be addressed:
The Security Mutual Life Insurance Company
of Lincoln, Nebraska
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Investment Department
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
-55-
PRINCIPAL AMOUNT
AND SERIES OF NOTES
NAME AND ADDRESS OF PURCHASER TO BE PURCHASED
THE CANADA LIFE ASSURANCE COMPANY $5,000,000 Series A
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: U.S. Private Placements, SP-11
▇▇▇▇▇ ▇▇▇▇▇, Treasurer, U.S.
Payments
All payments on or in respect of the Notes to be by bank wire transfer of
Federal or other immediately available funds to:
Chase Manhattan Bank
New York, New York
ABA #▇▇▇-▇▇▇-▇▇▇
Product Code CTR
For Credit to:
Beneficiary Bank Canadian Imperial Bank of Commerce (CIBC)
Head Office
Toronto, Ontario
UID# 015035
For further credit to: Canada Life Mortgage Swap
Account No. 05-90916
Notify ▇▇▇▇▇▇▇ ▇▇▇▇▇ (416) 597-1440 ext. 5691
Reference: Security/Issuer, ▇▇▇▇▇▇, Maturity, PPN
reference: name of issuer, rate, maturity date, type of security, whether
principal and/or interest and due date
Notices
All notices and communications to be addressed as first provided above, except
notice with respect to payment, and written confirmation of each such payment,
to be addressed:
The Canada Life Assurance Company
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇
-56-
Attention: Securities Accounting, SP-12
Name of Nominee in which Notes are to be issued: None
Taxpayer I.D. Number: ▇▇-▇▇▇▇▇▇▇
-57-
DEFINED TERMS
GENERAL PROVISIONS
Where the character or amount of any asset or liability or item of income
or expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, the same
shall be done in accordance with GAAP, to the extent applicable, except where
such principles are inconsistent with the express requirements of this
Agreement.
Where any provision in this Agreement refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether the action in question is taken directly or indirectly by
such Person.
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"AFFILIATE" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. 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.
Unless the context otherwise clearly requires, any reference to an "AFFILIATE"
is a reference to an Affiliate of the Company.
"ASSET DISPOSITION" means any Transfer except (a) any Transfer from a
Subsidiary to the Company or a Wholly-Owned Subsidiary and (b) any Transfer made
in the ordinary course of business and involving only property that is either
(i) inventory held for sale or (ii) equipment, fixtures, supplies or materials
no longer required in the operation of the business of the Company or any of its
Subsidiaries or that is obsolete.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which commercial banks in St. ▇▇▇▇, Minnesota are required or authorized to be
closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP or for which the amount of the
asset and liability thereunder should be in accordance with GAAP disclosed in a
note to such balance sheet as if so capitalized.
SCHEDULE B
(to Note Purchase Agreement)
"CAPITAL LEASE OBLIGATION" means, with respect to any Person and a Capital
Lease, the amount of the obligation of such Person as the lessee under such
Capital Lease which would, in accordance with GAAP, appear as a liability on a
balance sheet of such Person or for which the amount of the asset and liability
thereunder should be in accordance with GAAP disclosed in a note to such balance
sheet as if so capitalized.
"CLOSING" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COLLATERAL DOCUMENTS" shall mean the Security Agreements and each other
security, mortgage, pledge or deposit document or agreement that may from time
to time be executed pursuant to the terms of this Agreement or the Intercreditor
Agreement.
"COMPANY" means Dakota Growers Pasta Company, a North Dakota corporation,
incorporated as an agricultural cooperative.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED ASSETS" means, at any time, the total assets of the Company
and its Subsidiaries which would be shown as assets on a consolidated balance
sheet of the Company and its Subsidiaries as of such time prepared in accordance
with GAAP, after eliminating all amounts properly attributable to minority
interests, if any, in the stock and surplus of Subsidiaries.
"CONSOLIDATED CASH FLOW" means, in respect of any period, the sum of
(a) Consolidated Net Income for such period and (b) the amount of all
depreciation, amortization, and income taxes of the Company and its Subsidiaries
and (c) Consolidated Fixed Charges, but, in the case of (b) and (c) above, only
to the extent deducted in the determination of Consolidated Net Income for such
period. "CONSOLIDATED CASH FLOW" shall be adjusted retroactively to give effect
to earnings or losses of any other corporation the assets of which have been
acquired substantially as an entity by purchase, merger, consolidation or
otherwise after the beginning of such period and such acquisition is completed
prior to the end of such period and, if less than substantially all of the
assets of such other corporation are being or have been so acquired, and such
assets constitute substantially all of the assets theretofore employed by such
corporation in a divisional, branch or other unit operation, the earnings
determined to be properly attributable to the assets so acquired may be so
included.
"CONSOLIDATED FIXED CHARGES" means, with respect to any period, the sum of
(a) Interest Charges for such period and (b) Lease Rentals for such period,
determined, in the case of (a) and (b) above on a pro forma basis giving effect
as of the beginning of such period to the incurrence of any Funded Debt or Lease
Rentals thereof (including all amounts due and owing under any Capitalized
Leases), and the concurrent retirement of outstanding Funded Debt or Lease
Rentals or termination of any Capitalized Leases thereof. "CONSOLIDATED FIXED
CHARGES" shall be adjusted retroactively to give effect to the leases of real
and personal property and the Debt of any
B-59
business entity acquired by the Company or any Subsidiary and shall be computed
as though (x) such leases of real and personal property of such business entity
so acquired had been in effect, (y) such Debt of such business entity so
acquired had been owed by the Company and (z) such business entity had been a
Subsidiary, as the case may be, throughout the applicable period.
"CONSOLIDATED FUNDED DEBT" shall mean all Funded Debt of the Company and
its Subsidiaries determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Company and its Subsidiaries for such period (taken as a
cumulative whole), as determined in accordance with GAAP, after eliminating all
offsetting debits and credits between the Company and its Subsidiaries and all
other items required to be eliminated in the course of the preparation of
consolidated financial statements of the Company and its Subsidiaries in
accordance with GAAP, PROVIDED that there shall be excluded:
(a) the income (or loss) of any Person (other than a Subsidiary) in which
the Company or any Subsidiary has an ownership interest, except to the extent
that any such income has been actually received by the Company or such
Subsidiary in the form of cash dividends or similar cash distributions, and
(b) any net income or gain (but not any net loss) during such period from
change in accounting principles in accordance with GAAP or any extraordinary
items.
"CONSOLIDATED NET WORTH" means, at any time, the members' and stockholders'
investment determined in accordance with GAAP without reduction for intangible
assets.
"DEBT" with respect to any Person means, at any time, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under
any conditional sale or other title retention agreement with respect to any
such property);
(c) all Capital Lease Obligations;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has assumed
or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its account
by banks and other financial institutions (whether or not representing
obligations for borrowed money);
B-60
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.
Debt of any Person shall include all obligations of such Person of the character
described in clauses (a) through (g) to the extent such Person remains legally
liable in respect thereof notwithstanding that any such obligation is deemed to
be extinguished under GAAP. Debt of any Person shall exclude all amounts which
would otherwise be included in Debt which represent unfunded obligations under
any Plan.
"DEBT PURCHASE APPLICATION" means, with respect to any Transfer of
property, the application by the Company or its Subsidiaries of cash in an
amount up to the Net Proceeds Amount with respect to such Transfer to pay or
prepay Senior Debt of the Company which shall include a prepayment of the
principal amount of the Notes which bears the same ratio to the aggregate
principal amount of all Notes as the principal amount of all Notes bears to the
principal amount of all Senior Debt (other than Senior Debt owing to the
Company, any of its Subsidiaries or any Affiliate) which prepayment shall
include the Make-Whole Amount (and accrued and unpaid interest to the date of
prepayment on the principal being prepaid) calculated as if such prepayment were
a prepayment pursuant to Section 8.2.
"DEFAULT" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"DEFAULT RATE" with respect to each series of Notes means that rate of
interest that is the greater of (i) 2% per annum above the rate of interest
stated in clause (a) of the first paragraph of the Notes of such series or
(ii) 2% over the rate of interest publicly announced by St. ▇▇▇▇ Bank for
Cooperatives in St. ▇▇▇▇, Minnesota as its "base" or "prime" rate.
"DISPOSITION VALUE" means, at any time, with respect to any property
(a) in the case of property that does not constitute Subsidiary
Stock, the book value thereof, valued at the time of such disposition in
good faith by the Company, and
(b) in the case of property that constitutes Subsidiary Stock, an
amount equal to that percentage of book value of the assets of the
Subsidiary that issued such stock as is equal to the percentage that the
book value of such Subsidiary Stock represents of the book value of all of
the outstanding capital stock of such Subsidiary (assuming, in making such
calculations, that all Securities convertible into such capital stock are
so converted and giving full effect to all transactions that would occur or
be required in connection with such conversion) determined at the time of
the disposition thereof, in good faith by the Company.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants,
B-61
franchises, licenses, agreements or governmental restrictions relating to
pollution and the protection of the environment or the release of any materials
into the environment, including but not limited to those related to hazardous
substances or wastes, air emissions and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not incorporated)
that is treated as a single employer together with the Company under section 414
of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FAIR MARKET VALUE" means, at any time and 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 (neither being under a compulsion to buy or sell).
"FINANCING AGREEMENTS" shall mean and include this Agreement and the Other
Agreements, the Notes, the Security Documents and any additional collateral
documents or related agreements evidencing the obligations of the Company, the
Guarantor or any other guarantor or obligor with respect to the Notes or with
respect to any additional rights or remedies given to the holders of the Notes.
"FUNDED DEBT" means, with respect to any Person, all Debt of such Person
which by its terms or by the terms of any instrument or agreement relating
thereto matures, or which is otherwise payable or unpaid, one year or more from,
or is directly or indirectly renewable or extendible at the option of the
obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof PROVIDED that "FUNDED DEBT"
shall not include that portion of any Debt outstanding under a revolving credit
or similar agreement that has been paid down (and not refinanced during such
period with a short-term line of credit or similar agreement or otherwise) for a
period of at least thirty consecutive days during the immediately preceding
12-month period.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
B-62
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary
conducts all or any part of its business, or which asserts
jurisdiction over any properties of the Company or any Subsidiary, or
(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, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such indebtedness or obligation, or (ii) to maintain any working capital or
other balance sheet condition or any income statement condition of any
other Person or otherwise to advance or make available funds for the
purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"GUARANTOR" shall mean ▇▇▇▇▇ ▇▇▇▇▇▇, Inc., a Minnesota corporation.
"GUARANTY AGREEMENT" shall mean the Guaranty Agreement made by the
Guarantor in the form attached hereto as Exhibit GA.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or 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
B-63
of which is or shall be restricted, prohibited or penalized by any applicable
law (including, without limitation, asbestos, urea formaldehyde foam insulation
and polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to
Section 13.1.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 10% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTERCREDITOR AGREEMENT" shall mean that Agency and Intercreditor
Agreement dated as of July 15, 1998 among St. ▇▇▇▇ Bank for Cooperatives and the
Purchasers, as amended.
"INTEREST CHARGES" means, with respect to any period, the sum (without
duplication) of the following (in each case, eliminating all offsetting debits
and credits between the Company and its Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Subsidiaries in accordance with
GAAP): (a) all interest in respect of Debt of the Company and its Subsidiaries
(including imputed interest on Capital Lease Obligations) deducted in
determining Consolidated Net Income for such period, together with all interest
capitalized or deferred during such period and not deducted in determining
Consolidated Net Income for such period, and (b) all debt discount and expense
amortized or required to be amortized in the determination of Consolidated Net
Income for such period.
"INVESTMENT" means any investment, made in cash or by delivery of property,
by the Company or any of its Subsidiaries (i) in any Person, whether by
acquisition of stock, indebtedness of other obligation or Security, or by loan,
Guaranty, advance, capital contribution or otherwise, or (ii) in any property.
"LEASE RENTALS" means, with respect to any period, the sum of the rental
and other obligations required to be paid during such period by the Company or
any Subsidiary as lessee under all leases of real or personal property (other
than Capital Leases), excluding any amount required to be paid by the lessee
(whether or not therein designated as rental or additional rental) on account of
maintenance and repairs, insurance, taxes, assessments, water rates and similar
charges, PROVIDED that, if at the date of determination, any such rental or
other obligations (or portion thereof) are contingent or not otherwise
definitely determinable by the terms of the related lease, the amount of such
obligations (or such portion thereof) (i) shall be assumed to be equal to the
amount of such obligations for the period of 12 consecutive calendar months
immediately preceding the date of determination or (ii) if the related lease was
not in effect during such preceding 12-month period, shall be the amount
estimated by a Senior Financial Officer of the Company on a reasonable basis and
in good faith.
B-64
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"LOAN AGREEMENT" shall mean the Loan Agreement approved July 23, 1998
between the Company and St. ▇▇▇▇ Bank for Cooperatives, as amended or modified
from time to time.
"MAKE-WHOLE AMOUNT" is defined in Section 8.7.
"MATERIAL" means material in relation to the business, operations, affairs,
financial condition, assets, properties, or prospects of the Company and its
Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under the Financing Agreements and the Notes, or
(c) the validity or enforceability of the Financing Agreements or the Notes.
"MEMORANDUM" is defined in Section 5.3.
"MORTGAGES" shall mean that certain ▇▇▇▇▇ ▇▇▇▇▇▇ Real Estate Mortgage dated
as of the 11th day of August 1998 by the Guarantor to St. ▇▇▇▇ Bank for
Cooperatives, as agent, and that certain ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Pasta Company Real
Estate Mortgage dated as of the 11th day of August 1998 by the Company to
St. ▇▇▇▇ Bank for Cooperatives, as agent.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as such
term is defined in section 4001(a)(3) of ERISA).
"NET PROCEEDS AMOUNT" means, with respect to any Transfer of any Property
by any Person, an amount equal to the DIFFERENCE of
(a) the aggregate amount of the consideration (valued at the Fair
Market Value of such consideration at the time of the consummation of such
Transfer LESS any amount paid to release any Liens on such Property)
received by such Person in respect of such Transfer, MINUS
(b) all ordinary and reasonable out-of-pocket costs and expenses
actually incurred by such Person in connection with such Transfer.
"NOTES" is defined in Section 1.
"OBLIGORS" means the Company and the Guarantor.
B-65
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be made, by the Company or any ERISA Affiliate or
with respect to which the Company or any ERISA Affiliate may have any liability.
"PRIORITY DEBT" means and includes, at any time, all Debt of Subsidiaries,
PLUS, from and after the Release Date, all Debt of the Company secured by a Lien
other than a Lien permitted by subparagraphs (a) through (h) of Section 10.7.
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇ or
inchoate.
"PROPERTY REINVESTMENT APPLICATION" means, with respect to any Transfer of
property, the application by the Company or any Subsidiary of an amount up to
the Net Proceeds Amount with respect to such Transfer to the acquisition by the
Company or any Subsidiary of operating assets of the Company or any Subsidiary
to be used in the ordinary course of business of such Person.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
"RELEASE DATE" means the first date on which (i) each Collateral Document
has been released by the holders of the Notes in accordance with the terms
thereof and (ii) all liens securing the Loan Agreement have been released in
accordance with the terms thereof.
"REQUIRED HOLDERS" means, at any time, the holders of at least 66-2/3% in
principal amount of each series of the Notes at the time outstanding (exclusive
of Notes then owned by the Company or any of its Affiliates).
B-66
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time.
"SECURITY" has the meaning set forth in Section 2(1) of the Securities Act.
"SECURITY AGREEMENTS" shall mean that certain Dakota Growers Pasta Company
Security Agreement dated the 11th day of August securing the Company's
obligations under the Notes and that certain ▇▇▇▇▇ ▇▇▇▇▇▇, Inc. Security
Agreement dated the 11th day of August securing the Guarantor's obligations
under the Guaranty.
"SECURITY DOCUMENTS" means and includes the Guaranty Agreement and each
Collateral Document.
"SENIOR DEBT" means any Funded Debt of the Company which, by its terms, is
not subordinated to any other Debt of the Company.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"SUBSIDIARY" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to
a "Subsidiary" is a reference to a Subsidiary of the Company.
"SUBSIDIARY STOCK" means, with respect to any Person, the stock (or any
options or warrants to purchase stock or other Securities exchangeable for or
convertible into stock) of any Subsidiary of such Person.
"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 the 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
B-67
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.
"TRANSFER" means, with respect to any Person, any transaction in which such
Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Subsidiary Stock. For purposes of determining the
application of the Net Proceeds Amount in respect of any Transfer, the Company
may designate any Transfer as one or more separate Transfers each yielding a
separate Net Proceeds Amount. In any such case, (a) the Disposition Value of
any property subject to each such separate Transfer and (b) the amount of
Consolidated Assets attributable to any property subject to each such separate
Transfer shall be determined by ratably allocating the aggregate Disposition
Value of, and the aggregate Consolidated Assets attributable to, all property
subject to all such separate Transfers to each such separate Transfer on a
proportionate basis.
"WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Subsidiaries at such time.
B-68
SUBSIDIARIES
JURISDICTION OF PERCENTAGE
SUBSIDIARY INCORPORATION OWNERSHIP
Primo Piatto, Inc. Minnesota 100%
SCHEDULE 5.4
(to Note Purchase Agreement)
FINANCIAL STATEMENTS
1. Audited financials for each of the fiscal years ended July 31, 1993 through
July 31, 1997.
2. Financial statements set forth in the Company's 10-Q for the nine-month
period ended April 30, 1998.
SCHEDULE 5.5
(to Note Purchase Agreement)
DAKOTA GROWERS PASTA COMPANY
OUTSTANDING DEBT
JULY 30, 1998
INTEREST OUTSTANDING
RATE BALANCE
St. ▇▇▇▇ Bank for Cooperatives*
Variable Rate Term 8.14% $4,899,007.58
Maturing 10/30/98 10.08% 3,500,000.00
Maturing 3/31/99 - 9/30/99 8.38% 2,000,000.00
Maturing 10/29/98 10.22% 3,500,000.00
Maturing 12/31/99 - 9/30/00 8.49% 2,000,000.00
Maturing 12/29/00 - 9/30/01 8.54% 3,000,000.00
Maturing 12/31/01 - 9/30/02 8.59% 2,000,000.00
Maturing 12/31/02 - 9/30/03 8.68% 6,000,000.00
Maturing 12/31/03 - 9/30/04 8.76% 5,000,000.00
* St. ▇▇▇▇ Bank is lead bank, $8,996,856 held
by Bank of North Dakota and $9,627,900 held
by Farm Credit Services. Rates are
pre-patronage.
St. ▇▇▇▇ Bank for Cooperatives
Variable Rate Seasonal** 7.75% 9,700,000.00
Variable Rate Term** 8.14% 16,000,000.00
Maturing 7/31/08 5.71% 12,000,000.00
** Rates are pre-patronage.
City of ▇▇▇▇▇▇▇▇▇▇ 4.00% 277,037.30
Northern Plains Electric 0.00% 50,000.00
Dakota Central Telecommunications 0.00% 50,000.00
--------------
Total Outstanding Debt $69,976,044.88
--------------
--------------
SCHEDULE 5.15
(to Note Purchase Agreement)
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE LAW, AND MAY NOT BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
(a) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION OR (b) SUCH TRANSACTION IS
EXEMPT FROM REGISTRATION UNDER THE ACT.
[FORM OF SERIES A NOTE]
DAKOTA GROWERS PASTA COMPANY
7.04% SENIOR SECURED GUARANTEED NOTE, SERIES A, DUE AUGUST 1, 2008
No. AR- [Date]
$[________] PPN[________]
FOR VALUE RECEIVED, the undersigned, DAKOTA GROWERS PASTA COMPANY (herein
called the "COMPANY"), a corporation organized as an agricultural cooperative
organized and existing under the laws of the State of North Dakota, hereby
promises to pay to [________________], or registered assigns, the principal sum
of [________________] DOLLARS on August 1, 2008, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of 7.04% per annum from the date hereof, payable
semiannually, on the first day of February and August in each year, commencing
with the February 1 or August 1 next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 9.04% or (ii) 2% over the rate of interest publicly announced by
St. ▇▇▇▇ Bank for Cooperatives from time to time in St. ▇▇▇▇, Minnesota as its
"base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Series A Note are to be made in lawful money of the United
States of America at the principal office of the Company in Carrington, North
Dakota or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreements
referred to below.
This Series A Note is one of a series of Senior Secured Guaranteed Notes
(herein called the "SERIES A NOTES") issued (along with the 7.14% Senior Secured
Guaranteed Notes, Series B, due August 1, 2010) pursuant to separate Note
Purchase Agreements, dated as of July 15, 1998 (as from time to time amended,
the "NOTE PURCHASE AGREEMENTS"), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof. This Note is
secured
EXHIBIT 1-A
(to Note Purchase Agreement)
by the Security Documents (as such term is defined in the Note Purchase
Agreements) and reference is hereby made to the Security Documents for the terms
and conditions governing such security. Each holder of this Series A Note will
be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements PROVIDED that such holder may (in reliance upon information provided
by the Company, which shall not be unreasonably withheld), make a representation
to the effect that the purchase by such holder of any Series A Note will not
constitute a non-exempt prohibited transaction under Section 406(a) of ERISA.
This Series A Note is a registered Series A Note and, as provided in the
Note Purchase Agreements, upon surrender of this Series A Note for registration
of transfer, duly endorsed, or accompanied by a written instrument of transfer
duly executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series A Note for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series A Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
The Company will make required prepayments of principal on the dates and in
the amounts specified in the Note Purchase Agreements. This Series A Note is
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Series A Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Series A Note shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of North
Dakota excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
DAKOTA GROWERS PASTA COMPANY
By
[Title]
E-1-A-73
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY APPLICABLE STATE LAW, AND MAY NOT BE SOLD,
DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
(a) THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION OR (b) SUCH TRANSACTION IS
EXEMPT FROM REGISTRATION UNDER THE ACT.
[FORM OF SERIES B NOTE]
DAKOTA GROWERS PASTA COMPANY
7.14% SENIOR SECURED GUARANTEED NOTE, SERIES B, DUE AUGUST 1, 2010
No. BR- [Date]
$[_________] PPN[________]
FOR VALUE RECEIVED, the undersigned, DAKOTA GROWERS PASTA COMPANY (herein
called the "COMPANY"), a corporation organized as an agricultural cooperative
organized and existing under the laws of the State of North Dakota, hereby
promises to pay to [________________], or registered assigns, the principal sum
of [________________] DOLLARS on August 1, 2010, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
thereof at the rate of 7.14% per annum from the date hereof, payable
semiannually, on the first day of February and August in each year, commencing
with the February 1 or August 1 next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) to the extent
permitted by law on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any
Make-Whole Amount (as defined in the Note Purchase Agreements referred to
below), payable semiannually as aforesaid (or, at the option of the registered
holder hereof, on demand), at a rate per annum from time to time equal to the
greater of (i) 9.14% or (ii) 2% over the rate of interest publicly announced by
St. ▇▇▇▇ Bank for Cooperatives from time to time in St. ▇▇▇▇, Minnesota as its
"base" or "prime" rate.
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Series B Note are to be made in lawful money of the United
States of America at the principal office of the Company in Carrington, North
Dakota or at such other place as the Company shall have designated by written
notice to the holder of this Note as provided in the Note Purchase Agreements
referred to below.
This Series B Note is one of a series of Senior Secured Guaranteed Notes
(herein called the "SERIES B NOTES") issued (along with the 7.04% Senior Secured
Guaranteed Notes, Series A, due August 1, 2008) pursuant to separate Note
Purchase Agreements, dated as of July 15, 1998 (as from time to time amended,
the "NOTE PURCHASE AGREEMENTS"), between the Company and the respective
Purchasers named therein and is entitled to the benefits thereof. This Note is
secured
EXHIBIT 1-B
(to Note Purchase Agreement)
by the Security Documents (as such term is defined in the Note Purchase
Agreements) and reference is hereby made to the Security Documents for the terms
and conditions governing such security. Each holder of this Series B Note will
be deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements PROVIDED that such holder may (in reliance upon information provided
by the Company, which shall not be unreasonably withheld), make a representation
to the effect that the purchase by such holder of any Series B Note will not
constitute a non-exempt prohibited transaction under Section 406(a) of ERISA.
This Series B Note is a registered Series B Note and, as provided in the
Note Purchase Agreements, upon surrender of this Series B Note for registration
of transfer, duly endorsed, or accompanied by a written instrument of transfer
duly executed, by the registered holder hereof or such holder's attorney duly
authorized in writing, a new Series B Note for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Series B Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
The Company will make required prepayments of principal on the dates and in
the amounts specified in the Note Purchase Agreements. This Series B Note is
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreements, but not
otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Series B Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Series B Note shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of North
Dakota excluding choice-of-law principles of the law of such State that would
require the application of the laws of a jurisdiction other than such State.
DAKOTA GROWERS PASTA COMPANY
By
[Title]
E-1-B-75
FORM OF OPINION OF COUNSEL
TO THE COMPANY AND THE GUARANTOR
The closing opinion of ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., Counsel for the Company and the
Guarantor which is called for by Section 4.4(a) of the Note Purchase Agreements,
shall be dated the date of the Closing and addressed to you and each Other
Purchaser, shall be satisfactory in scope and form to you and each Other
Purchaser and shall be to the effect that:
1. The Company is a corporation, duly incorporated, validly existing
and in good standing under the laws of the State of North Dakota, has the
corporate power and the corporate authority to execute and perform the
Financing Agreements to which it is a party and to issue the Notes and has
the full corporate power and the corporate authority to conduct the
activities in which it is now engaged and is duly licensed or qualified and
is in good standing as a foreign corporation in each jurisdiction in which
the character of the Properties owned or leased by it or the nature of the
business transacted by it makes such licensing or qualification necessary.
2. Each Subsidiary is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of incorporation
and is duly licensed or qualified and is in good standing in each
jurisdiction in which the character of the Properties owned or leased by it
or the nature of the business transacted by it makes such licensing or
qualification necessary and all of the issued and outstanding shares of
capital stock of each such Subsidiary have been duly issued, are fully paid
and non-assessable and are owned by the Company, by one or more
Subsidiaries, or by the Company and one or more Subsidiaries.
3. The Guarantor is a corporation, duly incorporated, validly
existing and in good standing under the laws of the State of Minnesota, has
the corporate power and the corporate authority to execute and perform each
Financing Agreement to which it is a party and has the full corporate power
and the corporate authority to conduct the activities in which it is now
engaged and is duly licensed or qualified and is in good standing as a
foreign corporation in each jurisdiction in which the character of the
Properties owned or leased by it or the nature of the business transacted
by it makes such licensing or qualification necessary.
4. The issuance and sale of the Notes and the execution, delivery
and performance by the Company of the Financing Agreements do not conflict
with or result in any breach of any of the provisions of or constitute a
default under or result in the creation or imposition of any Lien upon any
of the property of the Company pursuant to the provisions of (i) any
indenture, mortgage, deed of trust, loan, purchase or credit agreement,
lease or the Restated Articles of Association or the By-laws of the Company
or any agreement or other instrument known to such counsel to which the
Company is a party or by which the Company or any of its Properties may be
bound or affected, (ii) any order, judgment, decree or ruling of any court,
arbitration board or Governmental
EXHIBIT 4.4(a)
(to Note Purchase Agreement)
Authority applicable to the Company, or (iii) any statute or other rule
or regulation of any Governmental Authority applicable to the Company.
5. There are no proceedings pending or, to the knowledge of such
counsel, threatened against or affecting the Company or any Subsidiary in
any court or before any Governmental Authority questioning the validity of
the Financing Agreements.
6. The Financing Agreements have been duly authorized by all
necessary corporate action on the part of each Obligor which is a party
thereto, have been duly executed and delivered by each Obligor which is a
party thereto and constitute the legal, valid and binding contracts of each
Obligor which is a party thereto enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent conveyance or similar
laws affecting creditors' rights generally, and general principles of
equity (regardless of whether the application of such principles is
considered in a proceeding in equity or at law).
7. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, have been duly executed and delivered by
the Company and constitute the legal, valid and binding obligations of the
Company enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance or similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
8. No approval, consent or withholding of objection on the part of,
or filing, registration or qualification with, any Governmental Authority,
is necessary in connection with the execution, delivery or performance by
the Company or the Guarantor of the Financing Agreements or the Notes.
9. The Mortgages and the Security Agreements, or financing states
relative thereto, have been recorded or filed for record in all pubic
offices, if any, wherein such filing or recordation is necessary to perfect
the lien thereof against creditors of and purchasers from the Company.
Such Mortgages and Security Agreement constitute a valid lien on the
Collateral specifically described in the Granting Clauses thereof.
10. Neither the Company nor any Subsidiary is an "investment
company", or a company "controlled" by an "investment company", as such
terms are defined in the Investment Company Act of 1940, as amended.
11. The issuance, sale and delivery of the Notes and the Guaranty
Agreement under the circumstances contemplated by the Financing Agreements
do not, under existing law, require the registration of the Notes or the
Guaranty Agreement under the Securities Act of 1933, as amended, or the
qualification of an indenture under the Trust Indenture Act of 1939, as
amended.
E-4.4(a)-77
The opinion of ▇▇▇▇▇▇ ▇▇▇▇▇, Esq., shall cover such other matters relating
to the sale of the Notes as you or any Other Purchaser may reasonably request.
Such opinion shall permit reliance by subsequent holders of the Notes. With
respect to matters of fact on which such opinion is based, such counsel shall be
entitled to rely on appropriate certificates of public officials and officers of
the Company and the Guarantor. This law firm did not prepare or solicit
investors for the Private Placement Memorandum distributed by SPP Hambro & Co.
and St. ▇▇▇▇ Bank for Cooperatives in connection with the Notes and makes no
warranty as to the accuracy or completeness of the information contained
therein.
E-4.4(a)-77
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
The closing opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, special counsel to you and the
Other Purchasers, called for by Section 4.4(a) of the Note Purchase Agreements,
shall be dated the date of the Closing and addressed to you and the Other
Purchasers, shall be satisfactory in form and substance to you and the Other
Purchasers and shall be to the effect that:
1. The Company is a corporation validly existing and in good
standing under the laws of the State of North Dakota and has the corporate
power and the corporate authority to execute and deliver the Note Purchase
Agreements and to issue the Notes.
2. Each Note Purchase Agreement has been duly authorized by all
necessary corporate action on the part of the Company, has been duly
executed and delivered by the Company and constitutes the legal, valid and
binding contract of the Company enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent conveyance and similar laws
affecting creditors' rights generally, and general principles of equity
(regardless of whether the application of such principles is considered in
a proceeding in equity or at law).
3. The Notes have been duly authorized by all necessary corporate
action on the part of the Company, and the Notes being delivered on the
date hereof have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent conveyance and similar laws affecting creditors'
rights generally, and general principles of equity (regardless of whether
the application of such principles is considered in a proceeding in equity
or at law).
4. The issuance, sale and delivery of the Notes under the
circumstances contemplated by the Note Purchase Agreements do not, under
existing law, require the registration of the Notes under the Securities
Act of 1933, as amended, or the qualification of an indenture under the
Trust Indenture Act of 1939, as amended.
The opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall also state that the opinion of
▇▇▇▇▇▇ ▇▇▇▇▇, Esq. is satisfactory in scope and form to ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ and
that, in their opinion, you and the Other Purchasers are justified in relying
thereon.
In rendering the opinion set forth in paragraph 1 above, ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇
may rely, as to matters referred to in paragraph 1, solely upon an examination
of the Restated Articles of Association certified by, a certificate of good
standing of the Company from, the Secretary of State of the State of North
Dakota, and the By-laws of the Company.
With respect to matters of fact upon which such opinion is based, ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ may rely on appropriate certificates of public officials and officers
of the Company and upon
ADDENDUM A
(to Note Purchase Agreement)
representations of the Company and you and the Other Purchasers delivered in
connection with the issuance and sale of the Notes.
The opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ is limited to the laws of the State of
Illinois and the Federal laws of the United States.
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