EXHIBIT B-4(i)(9)
EXECUTION COUNTERPART
CONSOLIDATED, AMENDED AND RESTATED
NOTE AGREEMENT
Dated as of November 3, 2000
between
GOLD ▇▇▇▇ INC.
and
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
TABLE OF CONTENTS
Page
1. PRELIMINARY STATEMENTS 1
1A. The Issued Notes and the Exchange Notes 1
1B. Purpose of Agreement 2
2. EXCHANGE OF NOTES 2
3. CONDITIONS OF CLOSING 2
3A. Certain Documents 2
3B. Opinion of Prudential's Special Counsel 3
3C. Representations and Warranties; No Default 3
3D. Purchase Permitted by Applicable Laws 3
3E. Payment of Fees 3
3F. No Material Adverse Change 3
3G. Guaranty Agreement 3
4. PREPAYMENTS 3
4A. Required Prepayments 3
4A(1)Required Prepayments of Series A Exchange Notes 3
4A(2)Required Prepayments of Series B Exchange Notes 3
4A(3)Required Prepayments of Series C Exchange Notes 4
4B. Optional Prepayment With Yield-Maintenance Amount 4
4C. Notice of Optional Prepayment 4
4D. Application of Prepayments 4
4E. Retirement of Notes 4
4F. Change of Control 4
5. AFFIRMATIVE COVENANTS 5
5A. Reporting Requirements 5
5A(1)General Information 5
5A(2)Quarterly Officer's Certificates 6
5A(3)Annual Accountant's Letter 6
5A(4)Special Information 6
5B. Inspection of Property 7
5C. Covenant to Secure Notes Equally 7
5D. Guaranteed Obligations 7
5E. Maintenance of Insurance 7
5F. Maintenance of Corporate Existence/Compliance with
Law/Preservation of Property 8
5G. Compliance with Environmental Laws 8
5H. No Integration 8
5I. Other Covenants 8
5J. Credit Facility 9
5K. Offer to Prepay 9
5L. Payment of Interest 9
6. NEGATIVE COVENANTS 9
6A(1)Minimum Quarterly EBITDA 9
6A(2)Minimum Consolidated Tangible Net Worth 10
6A(3)Current Ratio 10
6A(4)Interest Coverage Ratio 10
6A(5)Senior Debt Coverage 10
6A(6)Consolidated Total Adjusted Debt to Total
Capital Ratio 10
6A(7)Fixed Charge Coverage 11
6A(8)Consolidated Total Adjusted Debt to EBITDA 11
6B. Limitation on Restricted Payments 11
6C. Liens 12
6D. Restrictions on Loans, Advances, Investments,
Asset Acquisitions and Contingent Liabilities 12
6E. Sale of Stock and Debt of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. Merger and Sale of Assets 14
6G. Sale and Lease-Back 14
6H. Sale or Discount of Receivables 14
6I. Hedging Contracts 14
6J. Issuance of Stock by Subsidiaries 15
6K. Capital Expenditures 15
6L. Indebtedness for Money Borrowed 15
6M. Transactions with Affiliates 15
6N. Creation of Subsidiaries 15
6O. Bank Agreement 15
7. EVENTS OF DEFAULT 16
7A. Acceleration 16
7B. Rescission of Acceleration 18
7C. Notice of Acceleration or Rescission 18
7D. Other Remedies 18
8. REPRESENTATIONS, COVENANTS AND ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. Organization and Qualification 18
8B. Financial Statements 18
8C. Actions Pending 19
8D. Outstanding Debt 19
8E. Title to ▇▇▇▇▇▇▇▇▇▇ ▇▇
▇▇. Taxes 19
8G. Conflicting Agreements or Other Matters 19
8H. Offering of Exchange Notes 20
8I. Use of Proceeds/Margin Regulations, Etc. 20
8J. ERISA 20
8K. Foreign Assets Control Regulations 20
8L. Governmental Consent 20
8M. Possession of Franchises, Licenses, Etc. 20
8N. Pollution and Other Regulations 20
8O. Disclosure 21
9. REPRESENTATIONS OF PRUDENTIAL 21
10. DEFINITIONS; ACCOUNTING MATTERS 21
10A. Yield-Maintenance Terms 21
10B. Other Terms 22
10C. Accounting Principles, Terms and Determinations 31
11. MISCELLANEOUS 31
11A. Note Payments 31
11B. Expenses 31
11C. Consent to Amendments 32
11D. Form, Registration, Transfer and Exchange
of Notes; Lost Notes 32
11E. Persons Deemed Owners; Participations 32
11F. Survival of Representations and Warranties;
Entire Agreement 33
11G. Successors and Assigns 33
11H. Independence of Covenants 33
11I. Notices 33
11J. Payments Due on Non-Business Days 33
11K. Severability 33
11L. Descriptive Headings 33
11M. Satisfaction Requirement 33
11N. Governing Law 34
11O. Counterparts 34
11P. Binding Agreement 35
Purchaser Schedule
Information Schedule
Schedule 6C Liens
Schedule 6D Permitted Investments
Schedule 8G Debt Restrictions
Schedule 10B-1 Subordinated Debt
Schedule 10B-2 Subsidiaries
Exhibit A Form of Exchange Note
Exhibit B Form of Opinion of Counsel to the Company
Exhibit C Form of Amended and Restated Guaranty Agreement
Exhibit D Form of Amended and Restated Contribution Agreement
Gold ▇▇▇▇ Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
As of November 3, 2000
The Prudential Insurance Company
of America (on its own behalf and as
asset manager for the Gateway Recovery
Trust, "Prudential")
c/o Prudential Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, GOLD ▇▇▇▇ INC. (herein called the "Company") is a
party with you to that certain Note Agreement dated as of June 3, 1991 (as
amended, modified or supplemented from time to time, the "1991 Agreement")
and that certain Note Purchase and Private Shelf Agreement dated as of
February 11, 1997 (as amended, modified or supplemented from time to time,
the "1997 Agreement").
The Company and Prudential (both on its own behalf and in its capacity
as asset manager for Gateway Recovery Trust) are parties to the 1991
Agreement and 1997 Agreement as in effect on the date hereof. The Company
has requested and Prudential has agreed (on the terms and subject to the
conditions hereinafter set forth) to consolidate, amend and restate the
1991 Agreement and 1997 Agreement in their entirety as set forth herein.
NOW THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree that the 1991 Agreement and 1997
Agreement shall be and hereby are consolidated, amended and restated
effective as of November 3, 2000 to read in their entirety as follows:
1. PRELIMINARY STATEMENTS.
1A. The Issued Notes and the Exchange Notes. The Company has
authorized (i) the issue of its senior promissory notes (the "1997 Series A
Notes") in the aggregate original principal amount of $30,000,000, dated
February 11, 1997, to mature February 11, 2012; (ii) the issue of its
senior promissory notes (the "1997 Series B Notes") in the aggregate
principal amount of $25,000,000 dated May 30, 1997, to mature May 30, 2012;
and (iii) the issue of its senior promissory notes (the "1991 Notes") in
the aggregate original principal amount of $20,000,000, dated June 28, 1991
to mature June 28, 2001. The Company will authorize notes, in
substantially the form of Exhibit A, (i) in exchange for the 1991 Notes
(the "Series A Exchange Note") (ii) in exchange for the 1997 Series A Notes
(the "Series B Exchange Note") and (iii) in exchange for the 1997 Series B
Notes (the "Series C Exchange Note") (collectively, the Series A Exchange
Note, the Series B Exchange and the Series C Exchange Note, the "Exchange
Notes"). The terms "1997 Series A Note" and "1997 Series A Notes", and
"1997 Series B Note" and "1997 Series B Notes", and "1991 Note" and "1991
Notes" as used herein shall include, respectively, each 1997 Series A Note,
1997 Series B Note and 1991 Note previously delivered and any such Note
delivered in substitution or exchange therefor. The terms "Note" and
"Notes" as used herein shall include each Exchange Note delivered pursuant
to any provision of this Agreement and each Note delivered in substitution
or exchange for any such note pursuant to any such provision. Notes which
have (i) the same final maturity, (ii) the same principal prepayment dates,
(iii) the same principal prepayment amounts (as a percentage of the
original principal amount of each Note), (iv) the same interest rate, (v)
the same interest payment periods and (vi) the same date of issuance
(which, in the case of a Note issued in exchange for another Note, shall be
deemed for these purposes the date on which such Note's ultimate
predecessor Note was issued), are herein called a "Series" of Notes.
1B. Purpose of Agreement. The Company is, simultaneously with this
Agreement, entering into the Bank Agreement in order to amend certain
provisions, including the financial covenants. The Company has requested
similar amendments to the 1991 Agreement and 1997 Agreement. This Amended
and Restated Note Agreement (this "Agreement") provides for those
amendments and for the exchange of Notes pursuant to Section 2, among other
things.
2. EXCHANGE OF NOTES. On June 28, 1991, the Company sold to
Prudential the 1991 Notes. On February 11, 1997, the Company sold to
Prudential the 1997 Series A Notes. On May 30, 1997, the Company sold to
Prudential the 1997 Series B Notes. The Company hereby agrees to issue to
Prudential and, subject to the terms and conditions herein set forth,
Prudential agrees to accept from the Company, in exchange for each 1991
Note, 1997 Series A Note and 1997 Series B Note, an Exchange Note in
substantially the form of Exhibit A, in the principal amounts set forth on
the Purchaser Schedule hereto. Each exchange shall occur at the offices of
King & ▇▇▇▇▇▇▇▇, ▇▇▇▇ Avenue of the Americas, New York, New York, on the
date of closing, which shall be November 3, 2000 or any other date upon
which Prudential and the Company may mutually agree (herein called the
"Exchange Closing" or the "Exchange Closing Day").
3. CONDITIONS OF CLOSING. The obligation of Prudential to exchange
any 1991 Notes, 1997 Series A Notes or 1997 Series B Notes for Exchange
Notes is subject to the satisfaction, on or before the Exchange Closing
Day, of the following conditions:
3A. Certain Documents. Prudential shall have received the following,
each dated the date of the Exchange Closing Day:
(i) The Note(s) issued to you in exchange for the 1991 Notes as
a Series A Exchange Note, the 1997 Series A Notes as a Series B
Exchange Note and the 1997 Series B Notes as a Series C Exchange Note.
(ii) Certified copies of the resolutions of the Board of
Directors of the Company authorizing the execution and delivery of
this Agreement and the issuance of Exchange Notes, and of all
documents evidencing other necessary corporate action and governmental
approvals, if any, with respect to this Agreement and the Exchange
Notes.
(iii) A certificate of the Secretary or an Assistant
Secretary and one other officer of the Company certifying the names
and true signatures of the officers of the Company authorized to sign
this Agreement and the Exchange Notes and the other documents to be
delivered hereunder.
(iv) Certified copies of the Certificate of Incorporation and By-
laws of the Company.
(v) A favorable opinion of ▇▇▇▇▇▇ & Bird, special counsel to the
Company (or such other counsel designated by the Company and
satisfactory to Prudential and which addresses the matters set forth
in Exhibit B attached hereto and as to such other matters as
Prudential may reasonably request. The Company hereby directs such
counsel to deliver such opinion, agrees that the exchange of any Notes
will constitute a reconfirmation of such direction, and understands
and agrees that Prudential will and is hereby authorized to rely on
such opinion.
(vi) A good standing certificate for the Company from the
Secretary of State of Georgia dated of a recent date and good standing
or other certificates of qualification to do business as a foreign
corporation for the States of Alabama, Arkansas, Florida, Indiana,
Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, North
Dakota, Ohio, Oklahoma, South Carolina, Tennessee, Texas and Virginia.
(vii) Confirmation that all fees and disbursements of King &
Spalding, counsel to Prudential, have been paid in full.
(viii) Additional documents or certificates with respect to
legal matters or corporate or other proceedings related to the
transactions contemplated hereby as may be reasonably requested by
Prudential.
3B. Opinion of Prudential's Special Counsel. Prudential shall have
received from King & Spalding or such other counsel who is acting as
special counsel for it in connection with this transaction, a favorable
opinion satisfactory to Prudential as to such matters incident to the
matters herein contemplated as it may reasonably request.
3C. Representations and Warranties; No Default. The representations
and warranties contained in paragraph 8 shall be true on and as of the
Exchange Closing Day, except to the extent of changes caused by the
transactions herein contemplated; there shall exist on the Exchange Closing
Day no Event of Default or Default; and the Company shall have delivered to
Prudential an Officer's Certificate, dated the Exchange Closing Day, to
both such effects.
3D. Purchase Permitted by Applicable Laws. The exchange of Issued
Notes for Exchange Notes by Prudential, on the terms and conditions herein
provided (including the use of the proceeds of such Notes received or to be
received by the Company) shall not violate any applicable law or
governmental regulation (including, without limitation, Section 5 of the
Securities Act or Regulation U or X of the Board of Governors of the
Federal Reserve System) and shall not subject Prudential to any tax (other
than any income taxes arising from Prudential's ownership of the Notes),
penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and Prudential shall have
received such certificates or other evidences as it may request to
establish compliance with this condition.
3E. Payment of Fees. The Company shall have paid to Prudential any
fees due it pursuant to or in connection with this Agreement.
3F. No Material Adverse Change. Prudential shall have received a
certificate from the chief financial officer of the Company, dated the
Exchange Closing Day, saying that no material adverse change in the
financial condition, business, operations or prospects of the Company or
its subsidiaries, taken as a whole, (except as otherwise described in
subsequent unaudited quarterly financial statements and other
correspondence delivered to Prudential) has occurred since July 1, 1999.
3G. Guaranty Agreement. Prudential shall have received a duly
executed (i) Subsidiary Guaranty Agreement and (ii) Contribution Agreement.
4. PREPAYMENTS. The Notes shall be subject to required prepayment
as and to the extent provided in paragraphs 4A and 4B, respectively. Any
prepayment made by the Company pursuant to any other provision of this
paragraph 4 shall not reduce or otherwise affect its obligation to make any
required prepayment as specified in paragraph 4A or 4B.
4A. Required Prepayments.
4A(1) Required Prepayments of Series A Exchange Notes. The Series
A Exchange Notes shall be subject to prepayment only with respect to
optional prepayments specified in paragraph 4B.
4A(2) Required Prepayments of Series B Exchange Notes. Until the
Series B Exchange Notes shall be paid in full, the Company shall apply to
the prepayment of the Series B Exchange Notes, without Yield-Maintenance
Amount, the sum of $2,727,272.73 commencing on February 11, 2002 and each
February 11 thereafter to and including February 11, 2011, and such
principal amounts of the Series B Exchange Notes, together with interest
thereon to the payment dates, shall become due on such payment dates. The
remaining unpaid principal amount of the Series B Exchange Notes, together
with interest accrued thereon, shall become due on the maturity date of the
Series B Exchange Notes.
4A(3) Required Prepayments of Series C Exchange Notes. Until the
Series C Exchange Notes shall be paid in full, the Company shall apply to
the prepayment of the Series C Exchange Notes, without Yield-Maintenance
Amount, the sum of $2,272,727.27 commencing on May 30, 2002 and each May 30
thereafter to and including May 30, 2011, and such principal amounts of the
Series C Exchange Notes, together with interest thereon to the payment
dates, shall become due on such payment dates. The remaining unpaid
principal amount of the Series C Exchange Notes, together with interest
accrued thereon, shall become due on the maturity date of the Series C
Exchange Notes.
4B. Optional Prepayment With Yield-Maintenance Amount. The Notes of
each Series shall be subject to prepayment, in whole at any time or from
time to time in part (in integral multiples of $100,000 and in a minimum
amount of $1,000,000), (i) at the option of the Company and (ii) upon a
holder's election under paragraph 5K, at 100% of the principal amount so
prepaid plus interest thereon to the prepayment date and the Yield-
Maintenance Amount, if any, with respect to each such Note. Any partial
prepayment of a Series of the Notes pursuant to this paragraph 4B shall be
applied in satisfaction of required payments of principal in inverse order
of their scheduled due dates.
4C. Notice of Optional Prepayment. The Company shall give the holder
of each Note of a Series to be prepaid pursuant to paragraph 4B irrevocable
written notice of such prepayment not less than 10 Business Days prior to
the prepayment date, specifying such prepayment date, the aggregate
principal amount of the Notes of such Series to be prepaid on such date,
the principal amount of the Notes of such Series held by such holder to be
prepaid on that date and that such prepayment is to be made pursuant to
paragraph 4B. Notice of prepayment having been given as aforesaid, the
principal amount of the Notes specified in such notice, together with
interest thereon to the prepayment date and together with the Yield-
Maintenance Amount, if any, herein provided, shall become due and payable
on such prepayment date. The Company shall, on or before the day on which
it gives written notice of any prepayment pursuant to paragraph 4B, give
telephonic notice of the principal amount of the Notes to be prepaid and
the prepayment date to each Significant Holder which shall have designated
a recipient for such notices in the Purchaser Schedule attached hereto or
by notice in writing to the Company.
4D. Application of Prepayments. In the case of each prepayment of
less than the entire unpaid principal amount of all outstanding Notes of
any Series pursuant to paragraphs 4A or 4B, the amount to be prepaid shall
be applied pro rata to all outstanding Notes of such Series (including, for
the purpose of this paragraph 4D only, all Notes prepaid or otherwise
retired or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates other than by prepayment pursuant to paragraph
4A or 4B) according to the respective unpaid principal amounts thereof.
4E. Retirement of Notes. The Company shall not, and shall not permit
any of its Subsidiaries or Affiliates to, prepay or otherwise retire in
whole or in part prior to their stated final maturity (other than by
prepayment pursuant to paragraphs 4A or 4B or upon acceleration of such
final maturity pursuant to paragraph 7A), or purchase or otherwise acquire,
directly or indirectly, Notes of any Series held by any holder unless the
Company or such Subsidiary or Affiliate shall have offered to prepay or
otherwise retire or purchase or otherwise acquire, as the case may be, the
same proportion of the aggregate principal amount of Notes of such Series
held by each other holder of Notes of such Series at the time outstanding
upon the same terms and conditions. Any Notes so prepaid or otherwise
retired or purchased or otherwise acquired by the Company or any of its
Subsidiaries or Affiliates shall not be deemed to be outstanding for any
purpose under this Agreement, except as provided in ▇▇▇▇▇▇▇▇▇ ▇▇.
▇▇. Change of Control. The Company shall give written notice (a
"Change of Control Notice") to each holder of any Note not less than 30,
and not more than 60 days, prior to the occurrence of any event which will
result in a Change of Control. The Change of Control Notice shall identify
the event, the reason such event may result in a Change of Control and the
Persons involved, and shall include such financial and other information as
is available to the Company or which may be obtained by the Company with
reasonable effort that would be reasonably necessary for any holder of any
Note to make an informed decision as to whether to elect to require
prepayment of its Notes and shall set forth the proposed effective date for
such Change of Control. Any such holder of a Note, by giving written
notice to the Company of such election (an "Election Notice") not later
than 5 Business Days prior to the effective date of such Change of Control,
if the Change of Control Notice is given at least 30 days prior to such
effective date, shall have the option (A) to require the Company to prepay
all, but not less than all, of the Notes. Once given, any Election Notice
may be revoked by notice given at any time up to the last date an Election
Notice could have been given with respect to the Change of Control Notice.
If the proposed terms of a Change of Control change substantially, or if
any other event which may result in a Change of Control has occurred, the
Company shall give each holder of any Note a revised Change of Control
Notice and any holder of any Note shall then have another opportunity to
elect to require prepayment of the Notes under this paragraph 4F by
delivering to the Company a new Election Notice or to revoke, by written
notice to the Company, any prior Election Notice not later than 30 days
following the date such revised Change of Control Notice is given. The
prepayment of the Notes pursuant to this paragraph 4F shall occur on the
later of (a) the effective date of such Change of Control or (b) 5 Business
Days following the date any holder's Election Notice if given. If the
Company fails to give a Change of Control Notice and a Change of Control
occurs, or fails to give a proper Change of Control Notice as to a Change
of Control, without waiver of any right on the part of any holder of any
Note to accelerate payment of the Notes pursuant to paragraph 7A, any
holder of a Note may require the Company, on demand, to prepay all of the
Notes. Any prepayment on any Note pursuant to this paragraph 4F shall be
accompanied by the payment of the Yield Maintenance Amount with respect to
the prepaid principal.
5. AFFIRMATIVE COVENANTS. So long thereafter as any Note is
outstanding and unpaid, the Company covenants as follows:
5A. Reporting Requirements.
5A(1) General Information. The Company covenants that it will
deliver to each Significant Holder in triplicate:
(i) as soon as practicable and in any event within 45 days after
the end of each Fiscal Quarter (other than the fourth Fiscal Quarter)
in each Fiscal Year,
(1) statements of operations, patrons' and other equity and
comprehensive income (loss) and cash flows for the period from
the beginning of the current Fiscal Year to the end of such
Fiscal Quarter, and
(2) balance sheet as at the end of such Fiscal Quarter,
setting forth in each case in comparative form figures for the
corresponding period in the preceding Fiscal Year, all in reasonable
detail and satisfactory in form to the Required Holder(s) and
certified by an authorized financial officer of the Company as fairly
presenting, in all material respects, the financial condition of the
Company and its Consolidated Subsidiaries as of the end of such period
and the results of their operations for the period then ended in
accordance with GAAP, subject to changes resulting from normal year-
end adjustments and the inclusion of abbreviated footnotes; provided,
however, that delivery pursuant to clause (iii) below of copies of the
Quarterly Report on Form 10-Q of the Company for such Fiscal Quarter
filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements of this clause (i) with respect to the
Consolidated Statements;
(ii) as soon as practicable and in any event within 90 days after
the end of each Fiscal Year,
(1) statements of operations, patrons' and other equity and
comprehensive income (loss) and cash flows for such year, and
(2) a balance sheet as at the end of such year,
setting forth in each case in comparative form corresponding
Consolidated figures from the preceding annual audit, all in
reasonable detail and satisfactory in scope to the Required Holder(s)
and reported on by independent public accountants of recognized
standing selected by the Company whose report shall be without
limitation as to the scope of the audit and reasonably satisfactory in
substance to the Required Holder(s); provided, however, that delivery
pursuant to clause (iii) below of copies of the Annual Report on Form
10-K of the Company for such year filed with the Securities and
Exchange Commission shall be deemed to satisfy the requirements of
this clause (ii) with respect to the Consolidated statements;
(iii) if the Company or any of its Subsidiaries shall become
a public company, promptly upon transmission thereof, copies of all
such financial statements, proxy statements, notices and reports as it
shall send to its public stockholders and copies of all registration
statements (without exhibits) and all reports (other than any
registration statement filed on Form S-8) which it files with the
Securities and Exchange Commission (or any governmental body or agency
succeeding to the functions of the Securities and Exchange
Commission);
(iv) promptly upon receipt thereof, a copy of each other report
(including, without limitation, management letters) submitted to the
Company or any Subsidiary by independent accountants in connection
with any annual, interim or special audit made by them of the books of
the Company or any Subsidiary;
(v) promptly upon receipt thereof, a copy of each report,
survey, study, evaluation or assessment or, promptly upon request
therefor, any other document prepared by any consultant, engineer,
environmental authority or other Person (other than work product of
the Company's legal counsel) relating to compliance by the Company or
any Subsidiary with any Environmental Laws, if the cost of
remediation, repair or compliance may be reasonably expected to exceed
$1,000,000 in any one case or in the aggregate;
(vi) with reasonable promptness, upon the request of the holder
of any Note, provide such holder, and any qualified institutional
buyer designated by such holder, such financial and other information
as such holder may reasonably determine to be necessary in order to
permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes, except at
such times as the Company is subject to the reporting requirements of
section 13 or 15(d) of the Exchange Act. For the purpose of this
clause (vii), the term "qualified institutional buyer" shall have the
meaning specified in Rule 144A under the Securities Act;
(vii) immediately upon the effective date of any amendment or
modification of the Bank Agreement (including without limitation any
adjustment to the borrowing base thereunder), any such amendment or
modification; and
(viii) with reasonable promptness, such other financial data
as a Significant Holder may reasonably request.
5A(2) Quarterly Officer's Certificates. Together with each
delivery of financial statements required by clauses 5A(i) and (ii) above,
the Company will deliver to each Significant Holder an Officer's
Certificate demonstrating (with computations in reasonable detail)
compliance with the provisions of paragraphs 6A, 6B, 6C, 6D, 6E and 6G and
stating that there exists no Event of Default or Default, or, if any Event
of Default or Default exists, specifying the nature and period of existence
thereof and what action the Company has taken, is taking or proposes to
take with respect thereto;
5A(3) Annual Accountant's Letter. Together with each delivery of
financial statements required by clause 5A(ii) above, the Company will
deliver to each Significant Holder a certificate of the independent public
accountants giving the report on such financial statements stating that, in
making the audit necessary for their report, they have obtained no
knowledge of any Event of Default or Default, or, if they have obtained
knowledge of any Event of Default or Default, specifying the nature and
period of existence thereof. The accountants, however, shall not be liable
to anyone as a result of this provision by reason of their failure to
obtain knowledge of any Event of Default or Default which would not be
disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards;
5A(4) Special Information. The Company also covenants that as
soon as practicable but in no event later than five Business Days after any
Responsible Officer obtains knowledge of:
(i) an Event of Default or Default;
(ii) a material adverse change in the financial condition,
business or operations of the Company and its Subsidiaries, taken as a
whole;
(iii) legal proceedings filed against the Company and/or any
Subsidiary, which reasonably could be expected to have a Material
Adverse Effect, or which in any manner draws into question the
validity of or reasonably could be expected to impair the ability of
the Company to perform its obligations under this Agreement or the
Notes;
(iv) the occurrence of any other event that reasonably could be
expected to impair the ability of the Company to meet its obligations
hereunder;
(v) any (i) Environmental Liabilities, (ii) pending, threatened
or anticipated Environmental Proceedings, (iii) Environmental Notices,
(iv) Environmental Judgments and Orders, or (v) Environmental Releases
at, on, in, under or in any way affecting the Properties which
reasonably could be expected to have a Material Adverse Effect; or
(vi) with respect to any Plan that is subject to the funding
requirements of Section 302 of ERISA or Section 412 of the Code, the
Company (i) has given or is required to give notice to the Pension
Benefit Guaranty Corporation that a material reportable event has
occurred with respect to such Plan, (ii) has delivered notice to the
Pension Benefit Guaranty Corporation of any intent to withdraw from or
terminate any such Plan, or (iii) has failed to make timely a
contribution to any such Plan;
the Company will deliver to each Significant Holder an Officer's
Certificate specifying the nature and period of existence thereof and what
action the Company or the Subsidiary has taken, is taking or proposes to
take with respect thereto.
5B. Inspection of Property. The Company covenants that it will
permit any Person designated by any Significant Holder in writing, at such
Significant Holder's expense, to:
(i) visit and inspect any of the properties of the Company and
its Subsidiaries,
(ii) examine the corporate books and financial records of the
Company and its Subsidiaries and make copies thereof or extracts
therefrom;
(iii) discuss the affairs, finances and accounts of any of
such corporations with the principal officers of the Company and its
independent public accountants,
all at such reasonable times and as often as such Significant Holder may
reasonably request.
5C. Covenant to Secure Notes Equally. The Company covenants that, if
it or any Subsidiary shall create or assume any Lien upon any of its
property or assets, whether now owned or hereafter acquired, other than
Liens permitted by the provisions of paragraph 6C (unless prior written
consent to the creation or assumption thereof shall have been obtained
pursuant to paragraph 11C), it will make or cause to be made effective
provision whereby the Notes will be secured by such Lien equally and
ratably with any and all other Indebtedness thereby secured so long as any
such other Indebtedness shall be so secured.
5D. Guaranteed Obligations. The Company covenants that if any Person
(other than the Company) guarantees or provides collateral in any manner
for any Indebtedness of the Company or any Subsidiary (other than by
issuance of a stand-by letter of credit), it will simultaneously cause such
Person to guarantee or provide collateral for the Notes equally and ratably
with all Indebtedness guaranteed or secured by such Person pursuant to
documentation in form and substance reasonably satisfactory to such holder.
5E. Maintenance of Insurance. The Company covenants that it and each
Subsidiary will maintain, with responsible insurers, insurance with respect
to its properties and business against such casualties and contingencies
(including, but not limited to, public liability, larceny, embezzlement or
other criminal misappropriation) and in such amounts as is customary in the
case of similarly situated corporations engaged in the same or similar
businesses.
5F. Maintenance of Corporate Existence/Compliance with
Law/Preservation of Property. The Company covenants that, except as
permitted under paragraph 6F, it and each Subsidiary will do or cause to be
done all things necessary to:
(i) preserve, renew and keep in full force and effect the
corporate existence of the Company and its Subsidiaries (other than
those Subsidiaries not material to the financial condition, business
or operations of the Company and its Subsidiaries taken as a whole);
(ii) comply with all laws and regulations (including, without
limitation, laws and regulations relating to equal employment
opportunity and employee safety) applicable to it and any Subsidiary
except where the failure to comply could not reasonably be expected to
have a Material Adverse Effect on the business, operations or
financial condition of the Company and its Subsidiaries, taken as a
whole;
(iii) maintain, preserve and protect all material
intellectual property of the Company and its Subsidiaries; and
(iv) preserve all the remainder of its property used or useful in
the conduct of its business and keep the same in good repair, working
order and condition excluding normal wear and tear.
5G. Compliance with Environmental Laws. The Company covenants that
it and each Subsidiary will, comply in a timely fashion with, or operate
pursuant to valid waivers of the provisions of, all applicable
Environmental Laws, including, without limitation, the emission of
wastewater effluent, solid and hazardous waste and air emissions together
with any other applicable Environmental Laws for conducting, on a timely
basis, periodic tests and monitoring for contamination of ground water,
surface water, air and land and for biological toxicity of the aforesaid,
and all applicable regulations of the Environmental Protection Agency or
other relevant federal, state or local governmental authority, except where
the failure to comply could not reasonably be expected to have a Material
Adverse Effect. The Company agrees to indemnify and hold you, your
officers, agents and employees (each an "Indemnified Person") harmless from
any loss, liability, claim or expense that you may incur or suffer as a
result of a breach by the Company or any Subsidiary, as the case may be, of
this covenant other than as a result of the gross negligence or willful
misconduct of such Indemnified Person. The Company shall not be deemed to
have breached or violated this paragraph 5G if the Company or any
Subsidiary is challenging in good faith by appropriate proceedings
diligently pursued the application or enforcement of such Environmental
Laws for which adequate reserves have been established in accordance with
GAAP.
5H. No Integration. The Company covenants that it has taken and will
take all necessary action so that the exchange of the Notes does not and
will not require registration under the Securities Act. The Company
covenants that no future offer and sale of debt securities of the Company
of any class will be made if there is a reasonable possibility that such
offer and sale would, under the doctrine of "integration", subject the
exchange of the Notes to you to the registration requirements of the
Securities Act.
5I. Other Covenants. If at any time, after the date hereof, any of
the terms, covenants or events of default contained in the Bank Agreement
or any other financing agreements (the Bank Agreement and such other
financing agreements, collectively, "Financing Agreements") is more
favorable to the parties under the Financing Agreements than are the terms
of this Agreement to the holders of the Notes, this Agreement shall be
amended to contain each such more favorable term, covenant or event of
default (together with any grace periods for such term, covenant or event
of default as provided in the Financing Agreements), and the Company hereby
agrees to so amend this Agreement and to execute and deliver all such
documents requested by the holders of the Notes to reflect such amendment.
Prior to the execution and delivery of such documents by the Company, this
Agreement shall be deemed to contain each such more favorable term,
covenant or event of default, for purposes of determining the rights and
obligations hereunder. As used in this Section 5I the phrase "terms,
covenants or events of default" (including both the singular and plural)
shall not have reference to interest rate, maturity, amortization
prepayment or similar financial terms of the Notes or the Indebtedness
governed by the Financing Agreements.
5J. Credit Facility. On and after the date of this Agreement, the
Company shall maintain at all times a credit facility or facilities
providing at least $75,000,000 in aggregate commitments available under a
364-day facility and at least $125,000,000 of term loans having a term of
at least two years and otherwise in form and substance satisfactory to
Prudential.
5K. Offer to Prepay. The Company shall:
(i) offer to prepay the Notes pursuant to paragraph 4B, as
provided in clause (ii) below:
(a) annually in an amount equal to 100% of the Excess Cash
Flow for the preceding Fiscal Year. Each such prepayment shall be
payable on the date which is 120 days after the end of each
Fiscal Year and shall be calculated based on the financial
statements delivered pursuant to paragraph 5A(1) hereof; and
(b) in amounts equal to (A) 100% of the net proceeds from
any sale or other disposition, or series of related sales or
dispositions, by the Company of any assets (other than inventory)
where the net proceeds exceed $1,000,000, other than (x) any sale
of the SSC Securities, or (y) any sale of the assets of the Pork
Division or the Aquaculture Division, (B) 100% of the net
proceeds of any offering by the Company of equity or subordinated
debt (other than an offering which increases the outstandings
under the Company's existing subordinated loan certificates or
subordinated capital certificates), (C) 100% of the net proceeds
from any sale or other disposition, or series of related sales or
dispositions, by the Company of any inventory (other than for
sales of inventory in the ordinary course), or (D) 50% of the net
proceeds of any sale by the Company of any of the SSC Securities.
(ii) Make an offer to prepay the Notes as contemplated by the
foregoing in writing to each holder of a Note at least ten Business
Days before the proposed date of prepayment specifying such proposed
date and the amount available therefor. A holder of Note may accept
such offer to prepay by causing a notice of such acceptance to be
delivered to the Company within seven Business Days after receipt of
the notice required pursuant to this clause (ii). A failure by a
holder of Notes to respond to an offer to prepay made pursuant to this
clause (ii) within such period shall be deemed to constitute a
rejection of such offer by such holder. The amount of all prepayments
pursuant to clause (i) above shall be made (A) ratably to each holder
of a Note accepting an offer to prepay made under this paragraph 5K
and (B) ratably to the agent on behalf of the banks under the Bank
Agreement. The offer to prepay the Notes required by subsection 5K(i)
shall be distributed to the Senior Note Holders and the banks a party
to the Bank Agreement pro rata, based upon the principal outstanding
under their respective notes and the loans.
5L. Payment of Interest. By 2:00 p.m. on November 8, 2000, the
Company shall pay the accrued but unpaid interest on the 1997 Series A
Notes, the 1997 Series B Notes and the 1991 Notes through November 2, 2000.
6. NEGATIVE COVENANTS.
6A(1) Minimum Quarterly EBITDA. The Company shall have as of the
last day of the first Fiscal Quarter of Fiscal Year 2001 EBITDA for such
Fiscal Quarter in an amount not less than ($5,000,000), and shall have as
of the last day of each of the remaining Fiscal Quarters during its Fiscal
Year 2001 EBITDA for such Fiscal Quarter in an amount not less than that
set forth for such Fiscal Quarter below:
Fiscal Quarter Minimum EBITDA
Second Fiscal Quarter Fiscal Year 2001 $2,000,000
Third Fiscal Quarter Fiscal Year 2001 $20,000,000
Fourth Fiscal Quarter Fiscal Year 2001 $29,000,000
6A(2) Minimum Consolidated Tangible Net Worth. The Company's
Consolidated Tangible Net Worth (less any amount shown as "unrealized gain
on marketable equity securities" on the Company's financial statements most
recently delivered pursuant to paragraph 5A(1)) will at July 1, 2000, be at
least $193,000,000, and will at no time thereafter be less than
$190,000,000 plus the sum of (i) 50% of the cumulative Reported Net Income
of the Company and its Consolidated Subsidiaries during the period
commencing with Company's first Fiscal Quarter 2001 (taken as one
accounting period), calculated quarterly at the end of each Fiscal Quarter,
and (ii) 100% of the cumulative Net Proceeds of Capital Stock received
during any period after the Exchange Closing Date, but excluding from such
calculations of Reported Net Income for purposes of this clause any Fiscal
Quarter in which the Reported Net Income of the Company and its
Consolidated Subsidiaries is negative.
6A(3) Current Ratio. The Company shall not permit the ratio of
Consolidated Current Assets to Consolidated Current Liabilities to be less
than 1.10 to 1.00 (as shown on the Company's financial statements delivered
pursuant to paragraph 5A(1)), calculated as of the last day of each of the
Company's Fiscal Quarter.
6A(4) Interest Coverage Ratio. The Company shall not permit the
ratio of EBIT for the quarter to Interest Expense for the quarter to be
less than 1.00 to 1.00 as of the end of the third Fiscal Quarter of Fiscal
Year 2001, or to be less than 1.40 to 1.00 as of the end of each Fiscal
Quarter thereafter.
6A(5) Senior Debt Coverage. The Company shall not permit the
ratio of (a) Consolidated Senior Debt as of the end of any Fiscal Quarter
to (b) the sum of EBITDA for the Fiscal Quarter then ending and the
preceding seven Fiscal Quarters (divided by two), to be greater than the
ratio set forth opposite the relevant Fiscal Quarter in the following
table:
Fiscal Quarter Minimum EBITDA
First Fiscal Quarter Fiscal Year 2001 6.00 to 1.00
Second Fiscal Quarter Fiscal Year 2001 9.50 to 1.00
Third Fiscal Quarter Fiscal Year 2001 8.50 to 1.00
Fourth Fiscal Quarter Fiscal Year 2001 8.00 to 1.00
First Fiscal Quarter Fiscal Year 2002 7.50 to 1.00
Second Fiscal Quarter Fiscal Year 2002 7.25 to 1.00
Third Fiscal Quarter Fiscal Year 2002 5.50 to 1.00
Fourth Fiscal Quarter Fiscal Year 2002 4.50 to 1.00
First Fiscal Quarter Fiscal Year 2003 4.00 to 1.00
Second Fiscal Quarter Fiscal Year 2003 3.50 to 1.00
Third Fiscal Quarter Fiscal Year 2003 3.50 to 1.00
Thereafter 3.00 to 1.00
6A(6) Consolidated Total Adjusted Debt to Total Capital Ratio.
The Company shall not permit the ratio of Consolidated Total Adjusted Debt
to Total Capital to exceed the ratio set forth opposite the relevant Fiscal
Quarter in the following table:
First Fiscal Quarter Fiscal Year 2001 through
Third Fiscal Quarter Fiscal Year 2001 0.70 to 1.00
Fourth Fiscal Quarter Fiscal Year 2001 through
Fourth Fiscal Quarter Fiscal Year 2002 0.65 to 1.00
Thereafter 0.60 to 1.00
6A(7) Fixed Charge Coverage. The Company shall not permit the
ratio of (i) EBIT plus Consolidated Lease Expense, in each case for the
period of eight Fiscal Quarters of the Company most recently ended at such
time, to (ii) Consolidated Interest Expense plus Consolidated Lease Expense
for such period to be less than the ratio set forth opposite the relevant
Fiscal Quarter in the following table:
First Fiscal Quarter Fiscal Year 2001 0.50 to 1.00
Second Fiscal Quarter Fiscal Year 2001 0.00 to 1.00
Third Fiscal Quarter Fiscal Year 2001 0.25 to 1.00
Fourth Fiscal Quarter Fiscal Year 2001 0.25 to 1.00
First Fiscal Quarter Fiscal Year 2002 0.35 to 1.00
Second Fiscal Quarter Fiscal Year 2002 0.50 to 1.00
Third Fiscal Quarter Fiscal Year 2002 0.65 to 1.00
Fourth Fiscal Quarter Fiscal Year 2002 0.80 to 1.00
First Fiscal Quarter Fiscal Year 2003 1.00 to 1.00
Second Fiscal Quarter Fiscal Year 2003 1.25 to 1.00
Third Fiscal Quarter Fiscal Year 2003 1.25 to 1.00
Thereafter 1.75 to 1.00
6A(8) Consolidated Total Adjusted Debt to EBITDA. The Company
shall not permit the ratio of Consolidated Total Adjusted Debt as of the
end of any Fiscal Quarter of the Company to the sum of EBITDA for the
Fiscal Quarter then ending and the preceding seven Fiscal Quarters (divided
by two), to be greater than the ratio set forth opposite the relevant
Fiscal Quarter in the following table:
First Fiscal Quarter Fiscal Year 2001 6.75 to 1.00
Second Fiscal Quarter Fiscal Year 2001 10.60 to 1.00
Third Fiscal Quarter Fiscal Year 2001 9.25 to 1.00
Fourth Fiscal Quarter Fiscal Year 2001 8.50 to 1.00
First Fiscal Quarter Fiscal Year 2002 7.75 to 1.00
Second Fiscal Quarter Fiscal Year 2002 7.25 to 1.00
Third Fiscal Quarter Fiscal Year 2002 6.00 to 1.00
Fourth Fiscal Quarter Fiscal Year 2002 4.50 to 1.00
First Fiscal Quarter Fiscal Year 2003 4.00 to 1.00
Second Fiscal Quarter Fiscal Year 2003 3.75 to 1.00
Third Fiscal Quarter Fiscal Year 2003 3.75 to 1.00
Thereafter 3.50 to 1.00
6B. Limitation on Restricted Payments. The Company will not pay or
declare any dividend or make any other distribution on or on account of any
class of its stock or other equity or make cash distributions of equity
(including cash patronage refunds), or make interest payments on equity, or
redeem, purchase or otherwise acquire, directly or indirectly, any shares
of its stock or other equity, or redeem, purchase or otherwise acquire,
directly or indirectly, any Subordinated Debt, including, but not limited
to, its Subordinated Capital Certificates of Interest, Subordinated Loan
Certificates and Cumulative Preferred Certificates of Interest (except
required redemptions as provided in the indentures pursuant to which such
Subordinated Debt was issued), or permit any Subsidiary to do any of the
above (all of the foregoing being herein called "Restricted Payments"')
except that the Company may make (a) cash patronage refunds in Fiscal Year
2001 and thereafter in an amount, for each Fiscal Year, not to exceed 10%
of the member earnings for such Fiscal Year, and (b) present value cashing
retirement and death payments (net of any amount the Company receives as
insurance proceeds) in an amount not to exceed $5,000,000 in any Fiscal
Year; provided that the Company shall not make any Restricted Payments upon
the occurrence and during the continuance of a Default or Event of Default.
So long as no Default or Event of Default shall have occurred and be
continuing, there shall not be included in the definition of Restricted
Payments: (x) dividends paid, or distributions made, in stock of the
Company or (y) exchanges of stock of one or more classes of the Company,
except to the extent that cash or other value is involved in such exchange
or (z) dividends payable by any Subsidiary to the Company. The term
`equity' as used in this Section 6B shall include the Company's common
stock, preferred stock, if any, other equity certificates, and notified
equity accounts of patrons.
6C. Liens. The Company shall not, and shall not permit any
Subsidiary to, create, assume or suffer to exist any Lien upon any of its
property or assets whether now owned or hereafter acquired, except:
(a) Liens existing prior to the date of this Agreement, as set
forth on Schedule 6C attached hereto;
(b) Liens for taxes not yet due, and Liens for taxes or Liens
imposed by ERISA which are being contested in good faith by
appropriate proceedings and with respect to which adequate reserves
are being maintained;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens imposed by law
created in the ordinary course of business for amounts not yet due or
which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves are being maintained;
(d) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, performance and return-of-
money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);
(e) Liens securing purchase money debt, provided that (i) the
Lien in each instance does not extend beyond the assets acquired with
the purchase money debt, and (ii) the aggregate of such debt so
secured does not exceed five percent (5%) of Consolidated Net Worth;
(f) Liens consisting of encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the
use of real property, which do not materially detract from the value
of such property or impair the use thereof in the business of such
Person;
(g) Liens securing the obligations due to the parties to the
Intercreditor Agreement; and
(h) Liens against the ADM Shares created in connection with the
Rabobank Total Return Swap.
6D. Restrictions on Loans, Advances, Investments, Asset Acquisitions
and Contingent Liabilities. The Company shall not and shall not permit any
Subsidiary to (i) make or permit to remain outstanding any loan or advance
to, or extend credit other than credit extended in the normal course of
business to any Person which is not an Affiliate of the Company, or (ii)
guarantee, endorse or otherwise be or become contingently liable, directly
or indirectly, in connection with the obligations, stock or dividends of
any Person, or (iii) own, purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution
to, any Person except as permitted by paragraph 6N, or (iv) acquire all, or
substantially all, of the assets of any Person, in a single or a series of
related transactions; except that the Company or any Subsidiary may:
(a) make or permit to remain outstanding loans, advances,
indemnities, or guarantees to any Subsidiary that has executed and
delivered a Subsidiary Guaranty;
(b) acquire and own stock, obligations or securities received in
settlement of debts (created in the ordinary course of business) owing
to the Company or any Subsidiary;
(c) own, purchase or acquire prime commercial paper and
certificates of deposit in United States commercial banks (whose long-
term debt is rated `A' or better by ▇▇▇▇▇'▇ Investors Service or
Standard and Poor's Corporation), in each case due within one year
from the date of purchase and payable in the United States in Dollars;
(d) own, purchase and acquire obligations of the United States
Government or any agency thereof, in each case due within one year
from the date of purchase;
(e) own, purchase and acquire obligations guaranteed by the
United States Government, in each case due within one year from the
date of purchase;
(f) own, purchase and acquire repurchase agreements of United
States commercial banks (whose long-term debt is rated `A' or better
by ▇▇▇▇▇'▇ Investors Service or Standard and Poor's Corporation) for
terms of less than one year in respect of the foregoing certificates
and obligations;
(g) own, purchase and acquire tax-exempt securities maturing
within one year from the date of purchase and rated `A' or better by
▇▇▇▇▇'▇ Investors Service or Standard and Poor's Corporation;
(h) own, purchase and acquire adjustable rate preferred stocks
rated `A' or better by ▇▇▇▇▇'▇ Investors Service or Standard and
Poor's Corporation;
(i) endorse negotiable instruments for collection in the
ordinary course of business;
(j) make or permit to remain outstanding travel and other like
advances to officers and employees in the ordinary course of business;
(k) make or permit to remain outstanding investments as a member
in Golden Peanut in amount not to exceed $27,500,000;
(l) make or permit to remain outstanding loans from Agratrade
Financing, Inc., a wholly-owned subsidiary of the Company, to members
and non-members of the Company (provided that all such loans are made
to facilitate the business of the Company) in an amount not to exceed
$20,000,000.
(m) make or permit to remain outstanding investments in the
▇▇▇▇▇▇-▇▇▇▇▇▇▇ Midland Company existing on the date hereof plus
increases due to normal dividend reinvestment plans, stock splits,
stock dividends or similar arrangements;
(n) make or permit to remain outstanding investments described
on Schedule 6D attached hereto;
(o) make or permit to remain outstanding investments in GC
Properties;
(p) guarantee or otherwise be or become liable for obligations
of Young Pecan not to exceed an aggregate amount of $65,000,000;
(q) guarantee or otherwise be or become liable for obligations
of ▇.▇. ▇▇▇▇▇▇▇▇ Company, LLC, not to exceed an aggregate amount of
$8,000,000;
(r) have increases in existing investments arising from non-cash
notified equity or other equity methods of accounting for equity
increases which are non-cash;
(s) guarantee the obligations of GK Finance arising pursuant to
the Rabobank Total Return Swap;
(t) make or permit to remain outstanding investments in money
market funds which invest only in investments described in clauses (c)
through (h) above.
6E. Sale of Stock and Debt of Subsidiaries. Without the prior
written consent of Prudential, which consent shall be at its sole
discretion, the Company shall not and shall not permit any Subsidiary to
sell or otherwise dispose of, or part with control of, any shares of stock
or Indebtedness of any Subsidiary, except to the Company or another
Subsidiary, and except that all shares of stock and Indebtedness of any
Subsidiary at the time owned by or owed to the Company and all Subsidiaries
may be sold as an entirety for a cash consideration which represents the
fair value (as determined in good faith by the Board of Directors of the
Company) at the time of sale of the shares of stock and Indebtedness so
sold, provided that the assets of such Subsidiary do not constitute a
Substantial Part of the consolidated assets of the Company and all
Subsidiaries and that the earnings of such Subsidiary shall not have
constituted a Substantial Part of Consolidated Net Earnings for any of the
three Fiscal Years then most recently ended, and further provided that, at
the time of such sale, such Subsidiary shall not own, directly or
indirectly, any shares of stock or Indebtedness of any other Subsidiary
(unless all of the shares of stock and Indebtedness of such other
Subsidiary owned, directly or indirectly, by the Company and all
Subsidiaries are simultaneously being sold as permitted by this paragraph
6E).
6F. Merger and Sale of Assets. The Company shall not and shall not
permit any Subsidiary to enter into any transaction of merger,
consolidation, pooling of interest, joint venture, syndicate or other
combination with any other Person or sell, lease, transfer, contribute as
capital, or otherwise dispose of all or a Substantial Part of the
consolidated assets of the Company and all Subsidiaries or assets which
shall have contributed a Substantial Part of Consolidated Net Earnings for
any of the three Fiscal Years then most recently ended, in any single
transaction or series of related transactions, to any Person, except that:
(a) any Subsidiary may merge with the Company, provided that the
Company shall be the continuing or surviving corporation, or with any
one or more other Subsidiaries;
(b) any Subsidiary may sell, lease or otherwise dispose of any
of its assets to the Company or another Subsidiary; and
(c) any Subsidiary may sell or otherwise dispose of all or
substantially all of its assets subject to the conditions specified in
paragraph 6E with respect to a sale of the stock of such Subsidiary.
6G. Sale and Lease-Back. The Company shall not and shall not permit
any Subsidiary to enter into any arrangement, with any Person or under
which such other Person is a party, providing for the leasing by the
Company or any Subsidiary of real or personal property, used by the Company
or any Subsidiary in the operations of the Company or any Subsidiary, which
has been or is sold or transferred by the Company or any Subsidiary to any
other Person to whom funds have been or are to be advanced by such other
Person on the security of such rental obligations of the Company or such
Subsidiary except to the extent that the total amount of such arrangements
involve, at any one time, assets or property which constitute an amount
equal to or less than ten percent (10%) of Consolidated Total Capital
Assets.
6H. Sale or Discount of Receivables. The Company shall not and shall
not permit any Subsidiary to sell with recourse or discount or otherwise
sell for less than the face value thereof, any of its notes or accounts
receivable.
6I. Hedging Contracts. The Company shall not, and shall not permit
any Subsidiary to, enter into any Hedging Contract except: (a) bona fide
hedging transactions in commodities that represent production inputs or
products to be marketed, or in commodities needed in operations to meet
manufacturing or market demands, provided that (i) long positions and/or
options sold on corn and wheat shall in no event cover more than six months
of the Company's anticipated requirements for feed ingredients, and none of
such positions and/or options shall cover more than six and one half weeks
of such anticipated requirements unless they have been entered into in
compliance with the Company's Corporate Policy For Future Contracts
approved by the Board of Directors on April 24, 1998 and have been approved
by the Company's Hedging Committee, (ii) long positions and/or options sold
on soybean meal shall in no event cover more than six months of the
Company's anticipated requirements for feed ingredients, and none of such
positions and/or options shall cover more than six and one half weeks of
such anticipated requirements unless they have been entered into in
compliance with the Company's Corporate Policy For Future Contracts
approved by the Board of Directors on April 24, 1998 and have been approved
by the Company's Hedging Committee, (iii) short positions on corn shall not
exceed 2,000,000 bushels, and shall at all times relate to corn owned or
contracted for purchase; and (b) foreign exchange contracts, currency swap
agreements, interest rate exchange agreements, interest rate cap
agreements, interest rate collar agreements, and other similar agreements
and arrangements which are reasonably related to existing indebtedness or
to monies to be received or paid in foreign currencies.
6J. Issuance of Stock by Subsidiaries. The Company shall not permit
any Subsidiary (either directly or indirectly by the issuance of rights or
options for, or securities convertible into, such shares) to issue, sell or
dispose of any shares of its stock of any class (other than directors'
qualifying shares, if any) except to the Company or another Subsidiary.
6K. Capital Expenditures. The Company and its Subsidiaries shall
not, on a consolidated basis, directly or indirectly, make Capital
Expenditures in the aggregate (i) in Fiscal Year 2001 exceeding $40,000,000
(provided that, the Company may make an additional $10,000,000 in Capital
Expenditures in Fiscal year 2001 at its Live Oak, Florida processing plant
to the extent necessary to supply the product under the contract the
Company is negotiating as of the date hereof, (ii) in Fiscal Year 2002
exceeding $45,000,000 plus the amount of any available but unused Capital
Expenditures from Fiscal Year 2001, and (iii) in any Fiscal Year
thereafter, exceeding $45,000,000 plus the amount, (if any), up to
$15,000,000 by which the Company's Capital Expenditures for the previous
Fiscal Year were less than the amount permitted hereunder.
6L. Indebtedness for Money Borrowed. The Company shall not, and
shall not permit any Subsidiary to, create, incur, assume, or suffer to
exist any Indebtedness for Money Borrowed, except for the following:
(i) the Notes;
(ii) Indebtedness (including guaranties) which may be deemed to
exist pursuant to any performance, surety, appeal or similar bonds
obtained by the Company or any of its Subsidiaries in the ordinary
course of business;
(iii) Indebtedness for Money Borrowed in existence on the
date hereof and set forth on Schedule 5.8;
(iv) Subordinated Debt; and
(v) reimbursement obligations under letters of credit issued by
any of the banks a party to the Bank Agreement, provided that the
aggregate principal amount of such reimbursement obligations does not
exceed $20,000,000 at any one time.
6M. Transactions with Affiliates. The Company shall not, and shall
not permit any Subsidiary to, enter into or be a party to any transaction
or arrangement with any Affiliate (including, without limitation, the
purchase from, sale to or exchange of property with, or the rendering of
any service by or for, any Affiliate), except in the ordinary course of and
pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable
to the Company or such Subsidiary than would obtain in a comparable arm's-
length transaction with a Person other than an Affiliate.
6N. Creation of Subsidiaries. The Company shall not, and shall not
permit any Subsidiary to, create any Subsidiary except for the Argentine
Subsidiary and for the creation of a Wholly Owned Subsidiary, provided that
(i) such Subsidiary is organized under the laws of a jurisdiction within
the United States of America, (ii) such Subsidiary executes at the time of
its creation the Subsidiary Guaranty Agreement and the Contribution
Agreement, (iii) an opinion of counsel, acceptable to Prudential, is
delivered to Prudential confirming the due organization of such Subsidiary,
the enforceability of the Subsidiary Guaranty Agreement and the
Contribution Agreement against such Subsidiary, and such other matters as
Prudential may reasonably request, and (iv) no Default exists immediately
prior to or after the creation of the Subsidiary.
6O. Bank Agreement. The Company will not amend, modify or supplement
the Bank Agreement to (i) permit any additional mandatory prepayments
thereunder, (ii) require the reduction of the commitments to lend
thereunder (iii) change the amortization of any term loan thereunder or
(iv) permit the prepayment of any term loan thereunder.
7. EVENTS OF DEFAULT.
7A. Acceleration. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law
or otherwise):
(i) the Company defaults in the payment of any principal of, or
Yield-Maintenance Amount payable with respect to, any Note when the
same shall become due, either by the terms thereof or otherwise as
herein provided; or
(ii) the Company defaults in the payment of any interest on any
Note for more than 5 days after the date due; or
(iii) the Company or any Subsidiary defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on any other obligation for Money Borrowed
(or any Capitalized Lease Obligation, any obligation under a
conditional sale or other title retention agreement, any obligation
issued or assumed as full or partial payment for property whether or
not secured by a purchase money mortgage or any obligation under notes
payable or drafts accepted representing extensions of credit) beyond
any period of grace provided with respect thereto, or the Company or
any Subsidiary fails to perform or observe any other agreement, term
or condition contained in any agreement under which any such
obligation is created (or if any other event thereunder or under any
such agreement shall occur and be continuing) and the effect of such
failure or other event is to cause, or to permit the holder or holders
of such obligation (or a trustee on behalf of such holder or holders)
to cause, such obligation to become due (or to be repurchased by the
Company or any Subsidiary) prior to any stated maturity; or
(iv) any representation or warranty made by the Company herein or
by the Company or any of its officers in any writing furnished in
connection with or pursuant to this Agreement shall be false in any
material respect on the date as of which made; or
(v) the Company fails to perform or observe any agreement
contained in paragraphs 5I, 5K, 5L or 6; or
(vi) the Company fails to perform or observe any other agreement,
term or condition contained herein and such failure shall not be
remedied within 20 days after any Responsible Officer obtains actual
knowledge thereof; or
(vii) the Company or any Subsidiary makes an assignment for
the benefit of creditors or is generally not paying its debts as such
debts become due; or
(viii) any decree or order for relief in respect of the
Company or any Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar law, whether now or
hereafter in effect (herein called the "Bankruptcy Law"), of any
jurisdiction; or
(ix) the Company or any Subsidiary petitions or applies to any
tribunal for, or consents to, the appointment of, or taking possession
by, a trustee, receiver, custodian, liquidator or similar official of
the Company or any Subsidiary, or of any substantial part of the
assets of the Company or any Subsidiary, or commences a voluntary case
under the Bankruptcy Law of the United States or any proceedings
(other than proceedings for the voluntary liquidation and dissolution
of a Subsidiary) relating to the Company or any Subsidiary under the
Bankruptcy Law of any other jurisdiction; or
(x) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Subsidiary and
the Company or such Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition
in any such proceedings, and such order, judgment or decree remains
unstayed and in effect for more than 30 days; or
(xi) any order, judgment or decree is entered in any proceedings
against the Company decreeing the dissolution of the Company and such
order, judgment or decree remains unstayed and in effect for more than
60 days: or
(xii) any order, judgment or decree is entered in any
proceedings against the Company or any Subsidiary decreeing a split-up
of the Company or such Subsidiary which requires the divestiture of
assets representing a substantial part, or the divestiture of the
stock of a Subsidiary whose assets represent a substantial part, of
the consolidated assets of the Company and its Subsidiaries
(determined in accordance with GAAP) or which requires the divestiture
of assets, or stock of a Subsidiary, which shall have contributed a
Substantial Part of the Consolidated Net Earnings of the Company and
its Subsidiaries (determined in accordance with GAAP) for any of the
three Fiscal Years then most recently ended, and such order, judgment
or decree remains unstayed and in effect for more than 30 days; or
(xiii) one or more final judgments in an aggregate amount in
excess of $1,000,000 is rendered against the Company or any Subsidiary
and, within 30 days after entry thereof, any such judgment is not
discharged or execution thereof stayed pending appeal, or within 30
days after the expiration of any such stay, such judgment is not
discharged; or
(xiv) the Company or any ERISA Affiliate, in its capacity as
an employer under a Multiemployer Plan, makes a complete or partial
withdrawal from such Multiemployer Plan resulting in the incurrence by
such withdrawing employer of a withdrawal liability in an amount
exceeding $1,000,000;
(xv) the Company or any Guarantor or any other Person shall
disavow or attempt to terminate any or all of the Related Documents or
any or all of the Related Documents shall cease to be in full force
and effect in whole or in part for any reason whatsoever; or
(xvi) any of the Security Documents shall be cancelled,
terminated, revoked or rescinded or the security interests, mortgages
or liens in any of the Collateral shall cease to be perfected, or
shall cease to have the priority contemplated by the Security
Documents, or any action at law, suit or in equity or other legal
proceeding to cancel, revoke or rescind any of the Related Documents
shall be commenced by or on behalf of the Company or any of its
Subsidiaries party thereto or any of their respective stockholders or
any other Person, or any court or any other governmental or regulatory
authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Security Documents is illegal,
invalid or unenforceable in accordance with the terms thereof; or
(xvii) (i) an event of default shall have occurred under the
Credit Agreement (without giving effect to any amendment, consent or
waiver thereof), or (ii) the banks party to the Credit Agreement shall
accelerate the maturity of all or any part of the indebtedness
thereunder, or (iii) the commitments under the Credit Agreement shall
be terminated in whole or in part, or (iv) the bank a party to the
Credit Agreement shall refuse to advance funds under the Credit
Agreement for any reason whatsoever;
then:
(a) if such event is an Event of Default specified in clause (i)
or (ii) of this paragraph 7A, any holder of any Note may at its option
during the continuance of such Event of Default, by notice in writing
to the Company declare all of the Notes held by such holder to be, and
all of the Notes held by such holder shall thereupon be and become,
immediately due and payable at par together with interest accrued
thereon, without presentment, demand, protest or notice of any kind,
all of which are hereby waived by the Company,
(b) if such event is an Event of Default specified in clause
(viii), (ix) or (x) of this paragraph 7A with respect to the Company,
all of the Notes at the time outstanding shall automatically become
immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any, with respect to
each Note, without presentment, demand, protest or notice of any kind,
all of which are hereby waived by the Company, and
(c) with respect to any event constituting an Event of Default,
the Required Holder(s) of the Notes of any Series may at its or their
option during the continuance of such Event of Default, by notice in
writing to the Company, declare all of the Notes of such Series to be,
and all of the Notes of such Series shall thereupon be and become,
immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any, with respect to
each Note of such Series, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company.
7B. Rescission of Acceleration. At any time after any or all of the
Notes of any Series shall have been declared immediately due and payable
pursuant to paragraph 7A, the Required Holder(s) of the Notes of such
Series may, by notice in writing to the Company, rescind and annul such
declaration and its consequences if (i) the Company shall have paid all
overdue interest on the Notes of such Series, the principal of and Yield-
Maintenance Amount, if any, payable with respect to any Notes of such
Series which have become due otherwise than by reason of such declaration,
and interest on such overdue interest and overdue principal and Yield-
Maintenance Amount at the rate specified in the Notes of such Series,
(ii) the Company shall not have paid any amounts which have become due
solely by reason of such declaration, (iii) all Events of Default and
Defaults, other than non-payment of amounts which have become due solely by
reason of such declaration, shall have been cured or waived pursuant to
paragraph 11C, and (iv) no judgment or decree shall have been entered for
the payment of any amounts due pursuant to the Notes of such Series or this
Agreement. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising
therefrom.
7C. Notice of Acceleration or Rescission. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each
Note of each Series at the time outstanding.
7D. Other Remedies. If any Event of Default or Default shall occur
and be continuing, the holder of any Note may proceed to protect and
enforce its rights under this Agreement and such Note by exercising such
remedies as are available to such holder in respect thereof under
applicable law, either by suit in equity or by action at law, or both,
whether for specific performance of any covenant or other agreement
contained in this Agreement or in aid of the exercise of any power granted
in this Agreement. No remedy conferred in this Agreement upon the holder
of any Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every
other remedy conferred herein or now or hereafter existing at law or in
equity or by statute or otherwise.
8. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
8A. Organization and Qualification. The Company is an agricultural
membership cooperative duly incorporated and existing in good standing
under the Cooperating Marketing Act of the State of Georgia, each
Subsidiary is duly incorporated and existing in good standing under the law
of the jurisdiction in which it is incorporated, the Company and each
Subsidiary has the corporate power to own its respective property and to
carry on its respective business as now being conducted, and the Company
and each Subsidiary is duly qualified as a foreign corporation to do
business and in good standing in every jurisdiction in which the nature of
the respective business conducted by property owned by it legally requires
such qualification except to the extent failure to so qualify does not
result in a Material Adverse Effect.
8B. Financial Statements. The Company has furnished you with the
following financial statements, identified by a principal financial officer
of the Company: consolidated balance sheets of the Company and its
Subsidiaries as at June 30, in the years of 1994 through 2000, consolidated
statements of operations and statements of patrons' and other equity and
comprehensive income (loss) and cash flows of the Company and its
Subsidiaries for such years, all certified by KPMG Peat Marwick,
consolidated balance sheets of the Company and its Subsidiaries as at
July 1, 2000 and consolidated statements of operations and statements of
patrons' and other equity and comprehensive income (loss) and cash flows of
the Company and its Subsidiaries for the Fiscal Year ending on July 1,
2000. Such financial statements (including any related schedules and/or
notes) are true and correct in all material respects (subject, as to
interim statements, to changes resulting from audits and year-end
adjustments), have been prepared in accordance with GAAP consistently
followed throughout the periods involved and show all liabilities, direct
and contingent, of the Company and its Subsidiaries required to be shown in
accordance with such principles. The balance sheets fairly present the
condition of the Company and its Subsidiaries as at the dates thereof, and
the statements of operations and statements of patrons' and other equity
and comprehensive income (loss) and cash flows fairly present the results
of the operations of the Company and its Subsidiaries for the periods
indicated. There has been no material change in the business, condition or
operations (financial or otherwise) of the Company and its Subsidiaries
taken as a whole (except as otherwise described in subsequent unaudited
quarterly financial statements and other correspondence delivered to
Prudential) since July 1, 1999.
8C. Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, or any properties or rights of the
Company or any of its Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which might result in any material
adverse change in the business, condition or operations of the Company and
its Subsidiaries as a whole.
8D. Outstanding Debt. Neither the Company nor any of its
Subsidiaries has outstanding any Indebtedness, on a consolidated basis
except as permitted by paragraph 6A. There exists no default under the
provisions of any instrument evidencing such Indebtedness or of any
agreement relating thereto.
8E. Title to Properties. The Company has and each of its Subsidiaries
has good and marketable title to its respective real properties (other than
properties which it leases) and good title to all of its other properties
or assets, including the properties and assets reflected in the balance
sheet as at July 1, 1999 hereinabove described (other than properties and
assets disposed of in the ordinary course of business), subject to no Lien
of any kind except Liens permitted by paragraph 6C. The Company and its
Subsidiaries enjoy peaceful and undisturbed possession under all leases
necessary in any material respect for the operation of their respective
properties and assets, none of which contains any unusual or burdensome
provisions which might materially affect or impair the operation of such
properties or assets. All such leases are valid and subsisting and are in
full force and effect.
8F. Taxes. The Company has and each of its Subsidiaries has filed
all Federal, State and other income tax returns, which, to the best
knowledge of the officers of the Company, are required to be filed, and
each has paid all taxes as shown on said returns and on all assessments
received by it to the extent that such taxes have become due or except such
as are being contested in good faith by appropriate proceedings for which
adequate reserves have been established in accordance with GAAP. Federal
income tax returns of the Company and its Subsidiaries have been examined
and reported on by the taxing authorities or closed by applicable statutes
and satisfied for all Fiscal Years prior to and including the Fiscal Year
ended in 1996. Income taxes of the Company and its Subsidiaries filed with
the State of Georgia have been examined and reported on by the taxing
authorities or closed by applicable statutes and satisfied for all Fiscal
Years prior to and including the Fiscal Year ended in 1998.
8G. Conflicting Agreements or Other Matters. Neither the Company nor
any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other corporate restriction which materially and
adversely affects its business, property or assets, or financial condition.
Neither the execution nor delivery of this Agreement nor of the Exchange
Notes, nor the offering, issuance and exchange of the Exchange Notes, nor
fulfillment of nor compliance with the terms and provisions hereof and of
the Exchange Notes will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation of any Lien upon any of the
properties or assets of the Company or any of its Subsidiaries pursuant to,
the charter or by-laws of the Company or any of its Subsidiaries, any award
of any arbitrator or any agreement (including any agreement with
stockholders), instrument, order, judgment, decree, statute, law, rule or
regulation to which the Company or any of its Subsidiaries is subject.
Neither the Company nor any of its Subsidiaries is a party to, or otherwise
subject to any provision contained in, any instrument evidencing
Indebtedness of the Company or such Subsidiary, any agreement relating
thereto or any other contract or agreement (including its charter) which
limits the amount of, or otherwise imposes restrictions on the incurring
of, Indebtedness of the Company of the type to be evidenced by the Exchange
Notes except as set forth in the agreements listed in Schedule 8G attached
hereto.
8H. Offering of Exchange Notes. Neither the Company nor any agent
acting on its behalf has, directly or indirectly, offered the Exchange
Notes or any similar security of the Company for sale to, or solicited any
offers to buy the Exchange Notes or any similar security of the Company
from, or otherwise approached or negotiated with respect thereto with, any
Person other than you, and neither the Company nor any agent acting on its
behalf has taken or will take any action which would subject the exchange
of the Exchange Notes to the provisions of Section 5 of the Securities Act
of 1933, as amended, or to the provisions of any securities or Blue Sky law
of any applicable jurisdiction. The Company hereby represents and warrants
to you that, within the preceding twelve months, neither the Company nor
any Person acting on behalf of the Company has offered or sold to any
Person, any notes, or any securities of the same or similar class as the
Exchange Notes, or any other substantially similar securities of the
Company.
8I. Use of Proceeds/Margin Regulations, Etc. The proceeds of the
1991 Notes, 1997 Series A Notes and 1997 Series B Notes were used for
general working capital purposes. Neither the Company nor any agent acting
on its behalf has taken or will take any action which might cause this
Agreement or the Exchange Notes to violate Regulation U or X or (to our
best knowledge) any other regulation of the Board of Governors of the
Federal Reserve System, or to violate the Securities Exchange Act of 1934,
as amended, in each case as in effect now or as the same may hereafter be
in effect.
8J. ERISA. No accumulated funding deficiency (as defined in
section 302, of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No
liability to the Pension Benefit Guaranty Corporation has been or is
expected by the Company to be incurred with respect to any Plan (other than
a Multiemployer Plan) by the Company or any of its Subsidiaries which is or
would be materially adverse to the Company and its Subsidiaries taken as a
whole. Neither the Company nor any of its Subsidiaries has incurred or
presently expects to incur any withdrawal liability under Title IV of
ERISA which respect to any Multiemployer Plan which is or would be
materially adverse to the Company and its Subsidiaries taken as a whole.
The execution and delivery of this Agreement and the issue or exchange of
the Exchange Notes will not involve any prohibited transaction within the
meaning of ERISA or in connection with which a tax could be imposed
pursuant to section 4975 of the Code or a violation of Section 406 or
Section 407 of ERISA.
8K. Foreign Assets Control Regulations. Neither the borrowing by the
Company hereunder nor its use of the proceeds thereof violated the Foreign
Assets Control Regulations, the Cuban Assets Control Regulations or the
Iranian Assets Control Regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V).
8L. Governmental Consent. Neither the nature of the Company or of
any Subsidiary, nor any of their respective businesses or properties, nor
any relationship between the Company or any Subsidiary and any other
Person, nor any circumstance in connection with the offer, issue, exchange
or delivery of the Exchange Notes is such as to require any authorization,
consent, approval, exemption or other action by or notice to or filing with
any court or administrative or governmental body (other than routine
filings after the date of closing with the Securities and Exchange
Commission and/or state Blue Sky authorities) in connection with the
execution and delivery of this Agreement, the offer, issue, exchange or
delivery of the Exchange Notes or fulfillment of or compliance with the
terms and provisions hereof or of the Exchange Notes.
8M. Possession of Franchises, Licenses, Etc. The Company and its
Subsidiaries possess all franchise, certificates, licenses, permits, and
other authorizations from governmental political subdivisions or regulatory
authorities, and all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions,
that are necessary in any material respect for the ownership, maintenance
and operation of their respective properties and assets and neither the
Company nor any Subsidiary is in violation of any thereof in any material
respect.
8N. Pollution and Other Regulations. The Company and each Subsidiary
have obtained all material permits, licenses and other authorizations which
are required under, and are in material compliance with, Federal, State and
local laws and regulations relating to pollution, reclamation, or
protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases or pollutants, contaminants, or
hazardous or toxic materials or wastes into air, water, or land, or
otherwise relating to the manufacture, processing distribution, use,
treatment, storage, disposal, transport, or handling of pollutants,
contaminants or hazardous or toxic materials or wastes. The Company and
each Subsidiary are in material compliance with all laws and regulations
relating to equal employment opportunity and employee health and safety,
and health and sanitary codes, in all jurisdictions in which the Company
and each Subsidiary are presently doing business. The Company will and
will cause each Subsidiary to be in material compliance with all laws and
regulations which may be legally imposed in the future in jurisdictions in
which the Company and any Subsidiary may then be doing business.
8O. Disclosure. Neither this Agreement nor any other document,
certificate or statement furnished to you by or on behalf of the Company in
connection herewith contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact peculiar to
the Company or any of its Subsidiaries which materially adversely affects
or in the future may (so far as the Company can now foresee) materially
adversely affect the business, property or assets, or financial condition
of the Company or any of its Subsidiaries which has not been set forth in
this Agreement or in the other documents, certificates and statements
furnished to you by or on behalf of the Company contemplated hereby.
9. REPRESENTATIONS OF PRUDENTIAL. Prudential represents that it
acquired the 1991 Notes, the 1997 Series A Notes and the 1997 Series B
Notes for investment for its own account, not as a nominee or agent, and
not with a view to, or for resale in connection with, any distribution
thereof within the meaning of the Securities Act, provided that the
disposition of Prudential's property shall at all times be and remain
within its control.
10. DEFINITIONS; ACCOUNTING MATTERS. For the purpose of this
Agreement, the terms defined in paragraphs 10A and 10B (or within the text
of any other paragraph) shall have the respective meanings specified
therein and all accounting matters shall be subject to determination as
provided in paragraph 10C.
10A. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Note, the principal
of such Note that is to be prepaid pursuant to paragraph 4B or paragraph 4F
or is declared to be immediately due and payable pursuant to paragraph 7A,
as the context requires.
"Designated Spread" shall mean .50% of 1%.
"Discounted Value" shall mean, 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 (as converted to reflect the periodic basis on which interest on
such Note is payable, if interest is payable other than on a semi-annual
basis) equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal
of any Note, the Designated Spread over the yield to maturity implied by
(i) the yields reported, as of 10:00 A.M. (New York City local time) on the
Business Day next preceding the Settlement Date with respect to such Called
Principal, on the display designated as "Page 678" on the Bridge Telerate
Service (or such other display as may replace page 678 on the Bridge
Telerate Service) 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 if such yields shall not be reported as of such
time or the yields reported as of such time shall not be ascertainable,
(ii) the Treasury Constant Maturity Series yields reported, for the latest
day for which such yields shall have been so reported as of the Business
Day next preceding the Settlement Date with respect to such Called
Principal, in Federal Reserve Statistical Release H.15 (519) (or any
comparable successor publication) for actively traded U.S. Treasury
securities having a constant maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date. Such implied yield
shall be determined, if necessary, by (a) converting U.S. Treasury ▇▇▇▇
quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between yields reported for various
maturities. The Reinstatement Yield will be rounded to that number of
decimal places as appears in the Applicable Rate for the Notes.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Note, 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) each Remaining Scheduled
Payment of such Called Principal (but not of interest thereon) by (b) the
number of years (calculated to the nearest one-twelfth year) which will
elapse between the Settlement Date with respect to such Called Principal
and the scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to
such Called Principal if no payment of such Called Principal were made
prior to its scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant
to paragraph 4A or paragraph 4F or is declared to be immediately due and
payable pursuant to paragraph 7A, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus
(ii) interest accrued thereon as of (including interest due on) the
Settlement Date with respect to such Called Principal. The Yield-
Maintenance Amount shall in no event be less than zero.
10B. Other Terms.
"ADM Shares" shall mean the 3,659,368 shares of the common stock of
▇▇▇▇▇▇-▇▇▇▇▇▇-Midland Company owned by GK Finance.
"Affiliate" shall mean, with respect to any Person, a Person directly
or indirectly controlling or controlled by, or under direct or indirect
common control with, such Person. A Person shall be deemed to be
`controlled by' any other Person if such other Person possesses, directly
or indirectly, the power (a) to vote 10% or more of the securities having
ordinary voting power for the election of directors of such Person or (b)
to direct or cause the direction of the management and policies of such
corporation, whether through the ownership of voting securities, by
contract or otherwise. Additionally, for purposes of this Agreement,
Golden Peanut and Young Pecan shall be considered Affiliates of the Company
and its Subsidiaries notwithstanding anything else to the contrary
contained herein.
"Agreement" shall mean this Note Agreement, together with all Exhibits
and Schedules hereto, as from time to time amended and supplemented.
"Applicable Rate" shall mean the interest rate of the Notes as
adjusted, at the end of each of its Fiscal Quarters (calculated as of
September 30, 2000 for the Applicable Rate applicable immediately following
the Exchange Closing Day) based upon the Company's ratio of Consolidated
Total Adjusted Debt to EBITDA as calculated pursuant to paragraph 6A(8), as
follows for each Note:
TAD to Greater Less Less Less Less Less Less Less
EBITDA than than than than than than than than
5.0 or or or or or or or
equal equal equal equal equal equal equal
to 5.0 to 4.5 to 4.0 to 3.75 to 3.25 to 2.75 to 2.25
or or or or or or or
greater greater greater greater greater greater greater
than than than than than than than
4.5 4.0 3.75 3.25 2.75 2.25 2.25
Series C 11.50% 11.00% 11.00% 10.75% 10.50% 10.25% 9.25% 8.75%
Exchange
Notes due
May 2012
Series B 11.25% 10.75% 10.75% 10.50% 10.25% 10.00% 9.00% 8.50%
Exchange
Notes due
February
2012
Series A 11.50% 11.50%
Exchange
Notes due
June 2001
"Aquaculture Division" shall mean the assets and facilities of the
Company located in Indianola, Mississippi, utilized in research,
development and marketing of superior breeding stock for catfish
production.
"Argentine Subsidiary" shall mean an investment by Gold ▇▇▇▇ or one of
its Subsidiaries in a Subsidiary to be formed in Argentina, provided that
the total of all loans to and investments in such Subsidiary by Gold ▇▇▇▇
or any Subsidiary does not exceed the statutorily required minimum capital
under the laws of Argentina and in no event more than US$1,000,000.
"Authorized Officer" shall mean (i) in the case of the Company, its
chief executive officer, its chief financial officer, its Treasurer, any
vice president of the Company designated as an "Authorized Officer" of the
Company in the Information Schedule attached hereto or any vice president
of the Company designated as an "Authorized Officer" of the Company for the
purpose of this Agreement in an Officer's Certificate executed by the
Company's chief executive officer or chief financial officer and delivered
to Prudential, and (ii) in the case of Prudential, any officer of
Prudential designated as its "Authorized Officer" in the Information
Schedule or any officer of Prudential designated as its "Authorized
Officer" for the purpose of this Agreement in a certificate executed by one
of its Authorized Officers. Any action taken under this Agreement on
behalf of the Company by any individual who on or after the date of this
Agreement shall have been an Authorized Officer of the Company and whom
Prudential in good faith believes to be an Authorized Officer of the
Company at the time of such action shall be binding on the Company even
though such individual shall have ceased to be an Authorized Officer of the
Company, and any action taken under this Agreement on behalf of Prudential
by any individual who on or after the date of this Agreement shall have
been an Authorized Officer of Prudential and whom the Company in good faith
believes to be an Authorized Officer of Prudential at the time of such
action shall be binding on Prudential even though such individual shall
have ceased to be an Authorized Officer of Prudential.
"Bank Agreement" shall mean that certain Amended and Restated Credit
Agreement dated as of November 3, 2000 among the Company, various banks,
lending institutions and institutional investors a party thereto and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland",
New York Branch, as Agent, as it may be amended, modified or supplemented
in a manner acceptable to Prudential.
"Bankruptcy Law" shall have the meaning specified in clause (viii) of
paragraph 7A.
"Business Day" shall mean any day other than (i) a Saturday or a
Sunday, (ii) a day on which commercial banks in New York City are required
or authorized to be closed.
"Capital Asset" shall mean fixed assets, both tangible and intangible,
provided that Capital Asset shall not include any item customarily charged
directly to expense or depreciated over a useful life of twelve (12) months
or less in accordance with GAAP, and shall not include any good will
created on the balance sheet of the Company from the purchase of the common
stock of Golden Poultry Company, Inc.
"Capital Expenditures" shall mean amounts paid or indebtedness
incurred by the Company or any of its Subsidiaries in connection with the
purchase or lease by the Company or any of its Subsidiaries of Capital
Assets that would be required to be capitalized and shown on the balance
sheet of such Person in accordance with GAAP.
"Capitalized Lease Obligation or Capital Leases" shall mean any rental
obligation which, under GAAP, is or will be required to be capitalized on
the books of the Company or any Subsidiary, taken at the amount thereof
accounted for as indebtedness (net of interest expenses) in accordance with
such principles.
"Change of Control" shall mean the acquisition or possession by any
Person and its Affiliates, directly or indirectly, of (1) the power (A) to
vote 40% or more of the securities having ordinary voting power for the
election of directors of the Company or (B) to direct or cause the
direction of the management and policies of the Company, whether through
the ownership of voting securities, by contract or otherwise or (2) 40% of
the outstanding securities of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Collateral" shall have the meaning specified in the Intercreditor
Agreement.
"Company" shall mean Gold ▇▇▇▇ Inc.
"Consolidated Current Assets" shall mean the current assets of the
Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Current Liabilities" shall mean the current liabilities
of the Company and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any period, total
interest expense for such period of the Company and its Subsidiaries
(including without limitation, interest expense attributable to Capital
Leases in accordance with GAAP, all commissions, discounts and other fees
and charges owed with respect to bankers acceptance financing, and total
interest expense (whether shown as interest expense or as loss and expenses
on sale of receivables) under a receivables purchase facility) determined
on a consolidated basis in accordance with GAAP.
"Consolidated Lease Expense" shall mean, for any period, the total
rental obligations under operating leases for such period of the Company
and its Subsidiaries determined on a consolidated basis in accordance with
GAAP.
"Consolidated Net Earnings" shall mean consolidated gross revenues of
the Company and its Subsidiaries before extraordinary items (but after
giving effect to the credit resulting from any tax loss carry forwards)
less all operating and non-operating expenses of the Company and its
Subsidiaries including all charges of a proper character (including current
and deferred taxes on income and current additions to reserves), but not
including in gross revenues any gains (net of expenses and taxes applicable
thereto) in excess of losses resulting from the sale, conversion or other
disposition of capital assets (i.e., assets other than current assets), any
gains resulting from the write-up of assets, or any earnings of any Person
acquired by the Company or any Subsidiary through purchase, merger or
consolidation or otherwise for any year prior to the year of acquisition,
or any deferred credit representing the excess of equity in any Subsidiary
at the date of acquisition over the cost of investment in such Subsidiary;
all determined in accordance with GAAP.
"Consolidated Net Worth" shall mean the net worth of the Company and
its Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Senior Debt" shall mean the sum of (a) Consolidated
Total Adjusted Debt, less (b) any amounts outstanding under any
subordinated certificates issued by the Company, and less (c) any other
Consolidated Total Adjusted Debt subordinated to the repayment of the
Company's obligations to the Notes in form and substance satisfactory to
the Required Holders.
"Consolidated Tangible Net Worth" shall mean Consolidated Net Worth,
less the intangible assets of the Company and its Subsidiaries, but
including the good will (as reflected on the Company's financial statements
delivered pursuant to paragraph 5A from time to time, but not to exceed
$23,900,000) created in connection with the acquisition by the Company of
the outstanding equity of Golden Poultry in September, 1997.
"Consolidated Total Adjusted Debt" shall mean (a) Total Debt of the
Company and its Subsidiaries, less (b) any obligations under the Rabobank
Total Return Swap (to the extent included in Consolidated Total Debt), plus
(c) the Debt of any other Person which (i) has been guaranteed by the
Company or any Subsidiary or (ii) is supported by a letter of credit issued
for the account of the Company or any Subsidiary, all consolidated in
accordance with GAAP.
"Consolidated Total Assets" shall mean all assets of the Company and
its Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Total Capital Assets" shall mean all Capital Assets of
the Company and its Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Total Debt" shall mean (a) Total Debt of the Borrower
and its Subsidiaries, plus (b) the Total Debt of any other Person (other
than Young Pecan, Golden Peanut, or ▇.▇. ▇▇▇▇▇▇▇▇) which (i) has been
guaranteed by the Borrower or any Subsidiary or (ii) is supported by a
letter of credit issued for the account of the Borrower or any Subsidiary,
all consolidated in accordance with GAAP.
"Contribution Agreement" shall mean the Amended and Restated
Contribution Agreement, substantially in the form of Exhibit C, as it may
be amended, modified, supplemented or restated from time to time.
"Cumulative Preferred Certificates of Interest" shall mean those debt
instruments issued by the Company to the public prior to 1977, and which
have no maturity dates.
"EBIT" shall mean, for any period, an amount equal to (a) the sum for
such period of Consolidated Net Earnings plus, to the extent subtracted in
determining such Consolidated Net Earnings, provisions for taxes based on
income and Consolidated Interest Expense, minus (b) any items of gain or
plus any items of loss, which were included in determining such
Consolidated Net Earnings and were (1) not realized in the ordinary course
of business or (2) the result of any sale of assets.
"EBITDA" shall mean for the Company and its Subsidiaries, for any
period, an amount equal to the sum of (a) EBIT for such period, plus (b)
depreciation and amortization of assets for such period.
"Environmental Judgments and Orders" shall mean all judgments, decrees
or orders arising from or in any way associated with any Environmental
Requirements, whether or not entered upon consent or written agreements
with an Environmental Authority or other entity arising from or in any way
associated with any Environmental Requirement, whether or not incorporated
in a judgment, degree or order.
"Environmental Laws" shall mean all federal, state, local and foreign
statutes and codes or regulations, rules or ordinances issued, promulgated,
or approved thereunder, now or hereafter in effect (including, without
limitation, those with respect to asbestos or asbestos containing material
or exposure to asbestos or asbestos containing material), relating to
pollution or protection of the environment and relating to public health
and safety, relating to (i) emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial toxic or
hazardous constituents, substances or wastes, including, without
limitation, any Hazardous Substances, petroleum, including crude oil or any
fraction thereof, any petroleum product or other waste, chemicals or
substances regulated by any Environmental Law into the environment
(including, without limitation, ambient air, surface water, ground water,
land surface or subsurface strata), or (ii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of any Hazardous Substances, petroleum, including crude oil or any
fraction thereof, any petroleum product or other waste, chemicals or
substances regulated by any Environmental Law, and (iii) underground
storage tanks and related piping, and emissions, discharges and releases or
threatened releases therefrom, such Environmental Laws to include, without
limitation, (i) the Clean Air Act (42 U.S.C. 7401 et seq.), (ii) the
Clean Water Act (33 U.S.C. 1251 et seq.), (iii) the Resource Conservation
and Recovery Act (42 U.S.C. 6901 et seq.), (iv) the Toxic Substances
Control Act (15 U.S.C. 2601 et seq.), and (v) the Comprehensive
Environmental Response Compensation and Liability Act, as amended by the
Superfund Amendments and Reauthorization Act (42 U.S.C. 9601 et seq.).
"Environmental Liabilities" shall mean any liabilities, whether
accrued or contingent, arising from or relating in any way to any
Environmental Requirements.
"Environmental Notices" shall mean any written communication from any
Environmental Authority stating possible or alleged noncompliance with or
possible or alleged liability under any Environmental Requirement,
including without limitation any complaints, citations, demands or requests
from any Environmental Authority for correction of any purported violation
of any Environmental Requirements or any investigation concerning any
purported violation of any Environmental Requirements. Environmental
Notices also shall mean (i) any written communication from any other Person
threatening litigation or administrative proceedings against or involving
the Company relating to alleged violation of any Environmental Requirements
and (ii) any complaint, petition or similar documents filed by any other
Person commencing litigation or administrative proceedings against or
involving the Company relating to alleged violation of any Environmental
Requirements.
"Environmental Proceedings" shall mean any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" shall mean releases (as defined in CERCLA or
under any applicable state or local environmental law or regulation) of
Hazardous Materials. Environmental Releases does not include releases for
which no remediation or reporting is required by applicable Environmental
Requirements and which do not present a danger to health, safety or the
environment.
"Environmental Requirements" shall mean any applicable local, state or
federal law, rule, regulation, permit, order, decision, determination or
requirement relating in any way to Hazardous Materials or to health, safety
or the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"Event of Default" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection
with such event for the giving of notice, or the lapse of time, or the
happening of any further condition, event or act, and "Default" shall mean
any of such events, whether or not any such requirement has been satisfied.
"Excess Cash Flow" shall mean, for any period, the sum of net income
and depreciation, less Capital Expenditures, less required repayments of
Total Debt paid (other than required repayments of Total Debt that are
refinanced), less cash patronage dividends, less present value cashing and
death payments (net of insurance proceeds received).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exchange Closing" or "Exchange Closing Day" shall have the meaning
specified in paragraph 2.
"Fiscal Quarter" shall mean the applicable fiscal quarter of the
Company.
"Fiscal Year" shall mean the applicable fiscal year of the Company.
"Exchange Notes" shall have the meaning specified in paragraph 1A.
"GAAP" shall mean generally accepted accounting principles as set
forth in statements from Auditing Standards No. 69 issued by the Auditing
Standards Board of the American Institute of Certified Public Accountants
as well as statements and pronouncements of the Financial Accounting
Standards Board that are applicable, in each case as such principles are
supplemented and amended from time to time.
"GC Properties" shall mean GC Properties, a general partnership formed
under the laws of the State of Georgia, with the Company and Cotton States
Insurance Companies acting as the general partners.
"GK Finance" shall mean GK Finance Corporation, a corporation
organized and existing under the laws of the State of Delaware, which is a
wholly-owned Subsidiary of the Company.
"Golden Peanut" shall mean Golden Peanut Company, a limited liability
company formed under the laws of the State of Georgia with the Company,
Alimenta Holdings, Inc., a Delaware corporation, ▇▇▇▇▇▇-▇▇▇▇▇▇▇-Midland
Company, a Delaware corporation and ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, a Delaware
corporation, as its members.
"Golden Poultry" shall mean Golden Poultry Company, Inc., a
corporation formerly organized under the laws of the State of Georgia but
no longer in existence, which was a Subsidiary of the Company.
"Guarantee or Guaranty" shall mean, with respect to any Person, any
direct or indirect liability, contingent or otherwise, of such Person with
respect to any indebtedness, lease, dividend or other obligation of
another, including, without limitation, any such obligation directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit
in the ordinary course of business) or discounted or sold with recourse by
such Person, or in respect of which such Person is otherwise directly or
indirectly liable, including, without limitation, any such obligation in
effect guaranteed by such Person through any agreement (contingent or
otherwise) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of
such obligation (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain the solvency or any
balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or
for any transportation or service, regardless of the non-delivery or non-
furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with,
or that the holders of such obligation will be protected against loss in
respect thereof. The amount of any Guarantee or Guaranty shall be equal to
the outstanding principal amount of the obligation guaranteed or such
lesser amount to which the maximum exposure of the guarantor shall have
been specifically limited.
"Guarantor" shall have the meaning specified in the Intercreditor
Agreement.
"Guaranty Agreement " shall have the meaning assigned to the term
Guaranties in the Intercreditor Agreement.
"Hazardous Substances" shall have the meaning assigned to that term in
the Comprehensive Environmental Response Compensation and Liability Act of
1980, as amended by the Superfund Amendments and Reauthorization Acts of
1986.
"Hedging Contracts" shall mean any forward contracts, futures
contracts, foreign exchange contracts, currency swap agreements, interest
rate exchange agreements, interest rate cap agreements, interest rate
collar agreements, and other similar agreements and arrangements entered
into by any Person designed to protect against fluctuations in either
foreign exchange rates or interest rates.
"including" shall mean, unless the context clearly requires otherwise,
"including without limitation".
"Indebtedness" of any Person shall mean, without duplication (i) all
obligations of such Person which in accordance with GAAP would be shown on
the balance sheet of such Person as a liability (including, without
limitation, obligations for borrowed money and for the deferred purchase
price of property or services, and obligations evidenced by bonds,
debentures, notes or other similar instruments); (ii) all rental
obligations under leases required to be capitalized under GAAP; (iii) all
Guaranties of such Person (including contingent reimbursement obligations
under undrawn letters of credit); (iv) Indebtedness of others secured by
any Lien upon property owned by such Person, whether or not assumed; and
(v) obligations or other liabilities under Hedging Contracts, or similar
agreements or combinations thereof which are disclosed as liabilities on
the balance sheet of such Person in accordance with GAAP.
"Intercreditor Agreement" shall mean that certain Amended and Restated
Intercreditor Agreement dated as of November 3, 2000 among the Company, the
various banks, lending institutions and institutional investors a party to
the Bank Agreement, and Cooperatieve Centrale Raiffeisen-Boerenleenbank
B.A., "Rabobank Nederland", New York Branch, as amended, modified,
supplemented or restated from time to time in accordance with its terms.
"Lien" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any lease in the nature thereof, and the filing
of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction) or any other type of preferential
arrangement for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation,
including any rights of setoff (whether by statute, common law, contract or
otherwise).
"Material Adverse Effect" shall mean any material adverse change in
(i) the business, results of operations, financial condition, assets or
prospects of the Company and its Subsidiaries, taken as a whole, (ii) the
ability of Company or its Subsidiaries to perform their obligations under
this Agreement, (iii) the validity or enforceability of the Notes or this
Agreement, or (iv) the rights or remedies of Prudential under any of the
Notes or this Agreement.
"Money Borrowed" shall mean, as applied to the Indebtedness of a
Person,
(a) Indebtedness for money borrowed including all revolving and
term Indebtedness and all other lines of credit; or
(b) Indebtedness (other than trade debt of such Person incurred
in the ordinary course of business), whether or not in any such case
the same was for money borrowed:
(i) represented by notes payable, and drafts accepted, that
represent extensions of credit;
(ii) constituting obligations evidenced by bonds,
debentures, notes or similar instruments; or
(iii) constituting purchase money indebtedness,
conditional sales contracts, title retention debt instruments or
other similar instruments upon which interest charges are
customarily paid or that are issued or assumed as full or partial
payment for property; or
(c) all reimbursement obligations under any letters of credit or
acceptances; or
(d) Indebtedness that is such by virtue of subsection (iii) of
the definition of Indebtedness, but only to the extent that the
obligations guaranteed are obligations that would constitute
Indebtedness for Money Borrowed.
"Multiemployer Plan" shall mean any Plan which is a "multiemployer
plan" (as such term is defined in section 4001(a)(3) of ERISA.
"Net Proceeds of Capital Stock" shall mean any proceeds received by
the Company or a Consolidated Subsidiary in respect of the issuance of
Capital Stock, after deducting therefrom all reasonable and customary costs
and expenses incurred by the Company or such Consolidated Subsidiary
directly in connection with the issuance of such Capital Stock, including
without limitation any underwriter's discounts and commissions.
"1991 Notes" shall have the meaning specified in paragraph 1.
"1997 Series A Notes" shall have the meaning specified in paragraph 1.
"1997 Series B Notes" shall have the meaning specified in paragraph 1.
"Notes" shall have the meaning specified in paragraph 1.
"Officer's Certificate" shall mean a certificate signed in the name of
the Company by an Authorized Officer of the Company.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a limited liability corporation or partnership, a
trust, an unincorporated organization and a government or any department or
agency thereof.
"Plan" shall mean any employee pension benefit plan (as such term is
defined in section 3 of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company
or any ERISA Affiliate.
"Pork Division" shall mean those operations and facilities of the
Company utilized for the production and marketing of hogs.
"Prudential" shall mean The Prudential Insurance Company of America
and its successors and assigns.
"Prudential Affiliate" shall mean any corporation or other entity all
of the Voting Stock (or equivalent voting securities or interests) of which
is owned by Prudential either directly or through Prudential Affiliates.
"Rabobank Total Return Swap" shall mean the total return swap
involving the ADM Shares as described in that certain letter and term sheet
from Rabobank to the Company dated March 3, 1998.
"Related Documents" shall mean this Agreement, the Notes, the
Subsidiary Guaranty Agreement, the Contribution Agreement, any Security
Agreement, the Intercreditor Agreement and any other document delivered in
connection herewith or therewith.
"Reported Net Income" shall mean, for any period, the Net Income as
reflected on the financial statements delivered pursuant to paragraph 5A
hereof.
"Required Holder(s)" shall mean the holder or holders of at least
66 2/3% of the aggregate principal amount of the Notes or of a Series of
Notes, as the context may require, from time to time outstanding.
"Responsible Officer" shall mean the chief executive officer, chief
operating officer, chief financial officer, treasurer or chief accounting
officer of the Company, general counsel of the Company or any other officer
of the Company involved principally in its financial administration or its
controllership function.
"Restricted Payments" has the meaning set forth in paragraph 6B of
this Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Senior Note Holders" shall mean the holders, from time to time, of
(i) the notes issued pursuant to that certain Master Loan Agreement, dated
as of August 1, 1996, with CoBank, ACB, as amended December 23, 1997, and
that certain multiple Advance Term Loan Supplement dated September 1, 1997
with CoBank, ACB, as such notes or agreements may be modified, amended,
renewed, refinanced or replaced, or (ii) the Notes.
"Security Agreement" shall have the meaning specified in the
Intercreditor Agreement.
"Series" shall have the meaning specified in paragraph 1A.
"Shareholders' Equity" shall mean, with respect to any Person as at
any date of determination, shareholders' equity of such Person determined
on a consolidated basis in conformity with GAAP.
"Significant Holder" shall mean (i) Prudential, so long as Prudential
or any Prudential Affiliate shall hold (or be committed under this
Agreement to purchase) any Note, or (ii) any other holder of at least 5% of
the aggregate principal amount of the Notes of any Series from time to time
outstanding.
"SSC Securities" shall mean the $40,000,000 Series B Cumulative
Redeemable Preferred Stock and the $60,000,000 Series B Capital Securities
issued by Southern States Cooperative or Southern States Capital Trust,
respectively, and purchased by the Company pursuant to the Commitment
Letter between the Company and Southern States Cooperative dated as of
October 13, 1998.
"Subordinated Capital Certificates of Interest" shall mean those debt
instruments issued by the Company to the public under Trust Indentures with
SunTrust Bank, Atlanta, Georgia, as Trustee, registered with the United
States Securities and Exchange Commission and having maturities of greater
than one year.
"Subordinated Debt" shall mean all Indebtedness for Money Borrowed
wherein the principal and premium, if any, and interest is subordinated and
junior in right of payment to the prior payment in full of all other
Indebtedness of the Company for Money Borrowed except other Subordinated
Debt including, but not limited to, the Subordinated Capital Certificates
of Interest, Subordinated Loan Certificates, Subordinated Large
Denomination Loan Certificates, and Cumulative Preferred Capital
Certificates of Interest, issued by the Company, an example of whose
subordination provisions is annexed hereto as Schedule 10B-1.
"Subordinated Loan Certificates" shall mean those debt instruments
issued by the Company to the public under Trust Indentures with SunTrust
Bank, Atlanta, Georgia, as Trustee, registered with the United Stated
Securities and Exchange Commission and having maturities of one year or
less.
"Subsidiary" shall mean any corporation, association or partnership
organized under the laws of any State of the United States of America,
Canada, or any Province of Canada, which conducts the major portion of its
business in and makes the major portion of its sales to Persons located in
the United States of America, Canada, and at least a majority of the Voting
Stock of which shall, at the time as of which any determination is being
made, be owned by the Company either directly or through Subsidiaries,
including, without limitation, as of the date thereof, those Subsidiaries
listed on Schedule 10B-2 hereto.
"Subsidiary Guaranty Agreement" shall mean the Amended and Restated
Subsidiary Guaranty Agreement, substantially in the form of Exhibit D, as
it may be amended, modified, supplemented or restated from time to time.
"Substantial Part" shall mean, with respect to the consolidated assets
of the Company and all Subsidiaries, assets which, as a whole, (x)
constitute more than 10% of Consolidated Total Assets or (y) contributed
more than 15% of Consolidated Net Earnings for any one or more of the three
prior Fiscal Years of the Company.
"Total Capital" shall mean the sum of Consolidated Total Adjusted Debt
and Shareholders' Equity (less any amount shown as "unrealized gain on
marketable equity securities" on the Company's financial statement most
recently delivered pursuant to paragraph 5A(1).
"Total Debt" shall mean, as to any Person, and include without
duplication:
(a) all Indebtedness for Money Borrowed, including, without
limitation, purchase money mortgages, Capital Leases, any asset
securitization programs that are not non-recourse, conditional sales
contracts and similar title retention debt instruments (including any
current maturities of such indebtedness), which under GAAP is shown on
the balance sheet as a liability (but excluding reserves for deferred
income taxes and other reserves to the extent such reserves do not
constitute an obligations); and
(b) Guarantees, endorsements (other than endorsements of
negotiable instruments for collection in the ordinary course of
business) and other contingent liabilities (whether direct or
indirect) in connection with the obligations, stock or dividends of
any other Person; and
(c) obligations under any other contract in connection with any
borrowing which, in effect, is substantially equivalent to a guarantee
(other than any undertaking with respect to the obligations of Young
Pecan, Golden Peanut and ▇.▇. ▇▇▇▇▇▇▇▇); and
(d) obligations with respect to any redeemable preferred stock
which is required or scheduled to be redeemed within one year from the
date of calculation.
Any obligation secured by a Lien on, or payable out of the proceeds of
production from, property of the Company or any Subsidiary shall be deemed
to be Total Debt of the Company or such Subsidiary even though such
obligation shall not be assumed by the Company or such Subsidiary.
"Transferee" shall mean any direct or indirect transferee of all or
any part of any Note purchased by Prudential under this Agreement.
"Voting Stock" shall mean, with respect to any corporation, any shares
of stock of such corporation whose holders are entitled under ordinary
circumstances to vote for the election of directors of such corporation
(irrespective of whether at the time stock of any other class or classes
shall have or might have voting power by reason of the happening of any
contingency).
"Young Pecan" shall mean Young Pecan Company, a general partnership
formed under the laws of the State of South Carolina with GK Pecans, Inc.
and Y Pecans, Inc., a South Carolina corporation, as general partners.
10C. Accounting Principles, Terms and Determinations. Unless
otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters
hereunder shall be made, and all unaudited financial statements and
certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with GAAP applied on a basis
consistent with the most recent audited financial statements delivered
pursuant to clause (ii) of paragraph 5A or, if no such statements have been
so delivered, the most recent audited financial statements referred to in
clause (i) of paragraph 8B.
11. MISCELLANEOUS.
11A. Note Payments. The Company agrees that, so long as Prudential
shall hold any Note, it will make payments of principal of, interest on,
and any Yield-Maintenance Amount payable with respect to, such Note, which
comply with the terms of this Agreement, by wire transfer of immediately
available funds for credit (not later than 12:00 noon, New York City local
time, on the date due) to (i) the account or accounts of Prudential
specified in the Purchaser Schedule attached hereto in the case of any Note
or (ii) such other account or accounts in the United States as Prudential
may from time to time designate in writing, notwithstanding any contrary
provision herein or in any Note with respect to the place of payment.
Prudential agrees that, before disposing of any Note, it will make a
notation thereon (or on a schedule attached thereto) of all principal
payments previously made thereon and of the date to which interest thereon
has been paid. The Company agrees to afford the benefits of this paragraph
11A to any Transferee which shall have made the same agreement as
Prudential has made in this paragraph 11A.
11B. Expenses. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential and
any Transferee harmless against liability for the payment of, all out-of-
pocket expenses arising in connection with such transactions, including (i)
all document production and duplication charges and the fees and expenses
of any special counsel (including, without limitation, allocated costs of
in-house counsel) engaged by Prudential or any Transferee in connection
with this Agreement (other than with respect to the initial transfer to the
Transferee), the transactions contemplated hereby and any subsequent
proposed modification of, or proposed consent under, this Agreement,
whether or not such proposed modification shall be effected or proposed
consent granted, and (ii) the costs and expenses, including attorneys'
fees, (including, without limitation, allocated costs of in-house counsel)
incurred by Prudential or any Transferee in enforcing (or determining
whether or how to enforce) any rights under this Agreement or the Notes or
in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the
transactions contemplated hereby or by reason of any Transferee's having
acquired any Note, including without limitation costs and expenses incurred
in any bankruptcy case. The obligations of the Company under this
paragraph 11B shall survive the transfer of any Note or portion thereof or
interest therein by Prudential or any Transferee and the payment of any
Note.
11C. Consent to Amendments. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the
written consent to such amendment, action or omission to act, of the
Required Holder(s) of the Notes of each Series except that, (i) with the
written consent of the holders of all Notes of a particular Series, and if
an Event of Default shall have occurred and be continuing, of the holders
of all Notes of all Series, at the time outstanding (and not without such
written consents), the Notes of such Series may be amended or the
provisions thereof waived to change the maturity thereof, to change or
affect the principal thereof, or to change or affect the rate or time of
payment of interest on or any Yield-Maintenance Amount payable with respect
to the Notes of such Series, and (ii) without the written consent of the
holder or holders of all Notes at the time outstanding, no amendment to or
waiver of the provisions of this Agreement shall change or affect the
provisions of paragraph 7A or this paragraph 11C insofar as such provisions
relate to proportions of the principal amount of the Notes of any Series,
or the rights of any individual holder of Notes, required with respect to
any declaration of Notes to be due and payable or with respect to any
consent, amendment, waiver or declaration. Each holder of any Note at the
time or thereafter outstanding shall be bound by any consent authorized by
this paragraph 11C, whether or not such Note shall have been marked to
indicate such consent, but any Notes issued thereafter may bear a notation
referring to any such consent. 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 shall mean this Agreement as it may from time to time be amended or
supplemented.
11D. Form, Registration, Transfer and Exchange of Notes; Lost Notes.
The Notes are issuable as registered notes without coupons in denominations
of at least $1,000,000, except as may be necessary to reflect any principal
amount not evenly divisible by $1,000,000. The Company shall keep at its
principal office a register in which the Company shall provide for the
registration of Notes and of transfers of Notes. Upon surrender for
registration or transfer of any Note at the principal office of the
Company, the Company shall, at its expense, execute and deliver one or more
new Notes of like tenor and of a like aggregate principal amount,
registered in the name of such Transferee or Transferees. At the option of
the holder of any Note, such Note may be exchanged for other Notes of like
tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office
of the Company. Whenever any Notes are so surrendered for exchange, the
Company shall, at its expense, execute and deliver the Notes which the
holder making the exchange is entitled to receive. Each installment of
principal payable on each installment date upon each new Note issued upon
any such transfer or exchange shall be in the same proportion to the unpaid
principal amount of such new Note as the installment of principal payable
on such date on the Note surrendered for registration of transfer or
exchange bore to the unpaid principal amount of such Note. No reference
need be made in any such new Note to any installment or installments of
principal previously due and paid upon the Note surrendered for
registration of transfer or exchange. Every Note surrendered for
registration of transfer or exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the
holder of such Note or such holder's attorney duly authorized in writing.
Any Note or Notes issued in exchange for any Note or upon transfer thereof
shall carry the rights to unpaid interest and interest to accrue which were
carried by the Note so exchanged or transferred, so that neither gain nor
loss of interest shall result from any such transfer or exchange. Upon
receipt of written notice from the holder of any Note of the loss, theft,
destruction or mutilation of such Note and, in the case of any such loss,
theft or destruction, upon receipt of such holder's unsecured indemnity
agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of
like tenor, in lieu of the lost, stolen, destroyed or mutilated Note.
11E. Persons Deemed Owners; Participations. Prior to due presentment
for registration of transfer, the Company may treat the Person in whose
name any Note is registered as the owner and holder of such Note for the
purpose of receiving payment of principal of and interest on, and any Yield-
Maintenance Amount payable with respect to, such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and the
Company shall not be affected by notice to the contrary. Subject to the
preceding sentence, the holder of any Note may from time to time grant
participations in all or any part of such Note to any Person on such terms
and conditions as may be determined by such holder in its sole and absolute
discretion.
11F. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein or made in writing by
or on behalf of the Company in connection herewith shall survive the
execution and delivery of this Agreement and the Notes, the transfer by
Prudential of any Note or portion thereof or interest therein and the
payment of any Note, and may be relied upon by any Transferee, regardless
of any investigation made at any time by or on behalf of Prudential or any
Transferee. Subject to the preceding sentence, this Agreement and the
Notes embody the entire agreement and understanding between the parties
hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings relating to such subject matter.
11G. Successors and Assigns. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of
the parties hereto (including, without limitation, any Transferee) whether
so expressed or not.
11H. Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is
prohibited by any one of such covenants, the fact that it would be
permitted by an exception to, or otherwise be in compliance within the
limitations of, another covenant shall not avoid the occurrence of a
Default or Event of Default if such action is taken or such condition
exists.
11I. Notices. All written communications provided for hereunder shall
be sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and (i) if to Prudential, addressed as specified for such
communications in the Purchaser Schedule attached hereto or at such other
address as Prudential shall have specified to the Company in writing, (ii)
if to any other holder of any Note, addressed to it at such address as it
shall have specified in writing to the Company or, if any such holder shall
not have so specified an address, then addressed to such holder in care of
the last holder of such Note which shall have so specified an address to
the Company and (iii) if to the Company, addressed to it at Gold ▇▇▇▇ Inc.,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Telecopier: ▇▇▇-▇▇▇-▇▇▇▇,
provided, however, that any such communication to the Company may also, at
the option of the Person sending such communication, be delivered by any
other means either to the Company at its address specified above or to any
Authorized Officer of the Company.
11J. Payments Due on Non-Business Days. Anything in this Agreement or
the Notes to the contrary notwithstanding, any payment of principal of or
interest on, or Yield-Maintenance Amount payable with respect to, any Note
that is due on a date other than a Business Day shall be made on the next
succeeding Business Day. If the date for any payment is extended to the
next succeeding Business Day by reason of the preceding sentence, the
period of such extension shall not be included in the computation of the
interest payable on such Business Day.
11K. Severability. Any provision of this Agreement which 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 not
invalidate or render unenforceable such provision in any other
jurisdiction.
11L. Descriptive Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
11M. Satisfaction Requirement. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to Prudential, to any holder of Notes
or to the Required Holder(s), the determination of such satisfaction shall
be made by Prudential, such holder or the Required Holder(s), as the case
may be, in the sole and exclusive judgment (exercised in good faith) of the
Person or Persons making such determination.
11N. 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 New York. THE COMPANY HEREBY SUBMITS TO THE
JURISDICTION OF THE SUPREME COURT OF THE STATE OF NEW YORK LOCATED IN NEW
YORK COUNTY, NEW YORK AND THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK AND IRREVOCABLY AGREES THAT, SUBJECT TO THE SOLE AND
ABSOLUTE ELECTION OF THE REQUIRED HOLDER(S) AND TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ALL ACTIONS OR PROCEEDINGS RELATING TO THIS AGREEMENT OR
THE NOTES SHALL BE LITIGATED IN SUCH COURTS, AND THE COMPANY WAIVES ANY
OBJECTION WHICH IT MAY HAVE BASED ON IMPROPER VENUE OR FORUM NON CONVENIENS
TO THE CONDUCT OF ANY PROCEEDING IN ANY SUCH COURTS.
11O. 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.
11P. Binding Agreement. When this Agreement is executed and delivered
by the Company, Prudential, it shall become a binding agreement between the
Company, and Prudential. This Agreement shall also inure to the benefit of
each Purchaser which shall have executed and delivered a Confirmation of
Acceptance, and each such Purchaser shall be bound by this Agreement to the
extent provided in such Confirmation of Acceptance.
Very truly yours,
GOLD ▇▇▇▇ INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: CFO and Treasurer
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President
THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, as asset manager
for Gateway Recovery Trust
By: /s/ ▇▇▇▇ ▇▇▇▇▇
Vice President
EXHIBIT A
[FORM OF EXCHANGE NOTE]
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY
NOT BE OFFERED OR SOLD IN VIOLATION OF SUCH ACT
THIS NOTE IS GIVEN IN SUBSTITUTION AND WITHOUT NOVATION OF A PROMISSORY
NOTE DATED ____ ISSUED BY GOLD ▇▇▇▇ INC.
GOLD ▇▇▇▇ INC.
SERIES __ SENIOR NOTE DUE _____
No. R- _____ ___, 2000
$_______
FOR VALUE RECEIVED, the undersigned, GOLD ▇▇▇▇ INC. (herein called the
"Company"), a corporation organized and existing under the laws of the
State of Georgia, hereby promises to pay to THE PRUDENTIAL INSURANCE
COMPANY OF AMERICA, or registered assigns, the principal sum of ______ on
_______, with interest (computed on the basis of a 360-day year--30-day
month) (a) on the unpaid balance thereof at the Applicable Rate (as defined
in the Note Agreement, referenced below) from the date hereof, payable
quarterly on the __th day of ___, ___, ___ and ___ in each year, commencing
with the ___, ___, ___ and ___ next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) on any overdue
payment (including any overdue prepayment) of principal, any overdue
payment of Yield Maintenance Amount and any overdue payment of interest,
payable quarterly as aforesaid (or at the option of the registered holder
hereof, on demand), or if an Event of Default under the Note Agreement
shall have occurred and be continuing, at a rate per annum from time to
time equal to the greater of (i) Applicable Rate plus 2% or (ii) 2% over
the rate of interest publicly announced by Bank of New York from time to
time in New York City as its prime rate.
Payments of principal, Yield Maintenance Amount, if any, and interest
are to be made at the main office of Bank of New York in New York City or
at such other place as the holder hereof shall designate to the Company in
writing, in lawful money of the United States of America.
This Note is one of a Series of Exchange Notes (as amended or
substituted, the "Notes") issued pursuant to a Consolidated, Amended and
Restated Note Agreement, dated as of November 3, 2000 (as it has been and
may be amended, the "Note Agreement"), between the Company, on the one
hand, and The Prudential Insurance Company of America and each Prudential
Affiliate which becomes party thereto, on the other hand, and is entitled
to the benefits thereof. As provided in the Agreement, this Note is
subject to prepayment, in whole or from time to time in part, with the
Yield Maintenance Amount as specified in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this 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 Note for the then outstanding 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 Note is registered as the owner hereof for the purpose
of receiving payment and for all other purposes, and the Company shall not
be affected by any notice to the contrary.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable
in the manner and with the effect provided in the Agreement.
Capitalized terms used and not otherwise defined herein shall have the
meanings (if any) provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE INTERNAL LAW OF SUCH
STATE.
GOLD ▇▇▇▇ INC.
By: ____________________________
Title: ___________________________
EXHIBIT B
[FORM OF OPINION OF COMPANY'S COUNSEL]
[Closing Date]
The Prudential Insurance Company of America
(on its own behalf and as asset manager for the
Gateway Recovery Trust, "Prudential")
c/o Prudential Capital Group
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We have acted as counsel for Gold ▇▇▇▇ Inc. (the "Company"), in
connection with the Consolidated, Amended and Restated Note Agreement dated
as of November 3, 2000 (the "Agreement"), between the Company and
Prudential and each Prudential Affiliate which becomes a party thereto,
pursuant to which the Company has issued to you today (i) in exchange for
the Company's senior promissory notes in the aggregate original principal
amount of $20,000,000, dated June 28, 1991 to mature June 28, 2001, the
Series A Exchange Note (the "Series A Exchange Note"); (ii) in exchange for
the Company's senior promissory notes in the aggregate original principal
amount of $30,000,000, dated February 11, 1997, to mature February 11,
2012, the Series B Exchange Note (the "Series B Exchange Note"); and
(iii) in exchange for the Company's senior promissory notes in the
aggregate principal amount of $25,000,000 dated May 30, 1997, to mature May
30, 2012, the Series C Exchange Note (the "Series C Exchange Note") (the
Series A Exchange Note, the Series B Exchange Note and the Series C
Exchange Note hereinafter referred to as the "Notes"). Capitalized terms
used and not otherwise defined herein shall have the meanings provided in
the Agreement. This letter is being delivered to you in satisfaction of
the condition set forth in paragraph 3A(v) of the Agreement and with the
understanding you are purchasing the Notes in reliance on the opinions
expressed herein.
In this connection, we have examined such certificates of public
officials, certificates of officers of the Company and copies certified to
our satisfaction of corporate documents and records of the Company and of
other papers, and have made such other investigations, as we have deemed
relevant and necessary as a basis for our opinion hereinafter set forth.
We have relied upon such certificates of public officials and of officers
of the Company with respect to the accuracy of material factual matters
contained therein which were not independently established. With respect
to the opinion expressed in paragraph 3 below, we have also relied upon
the representation made by you in paragraph 8H of the Agreement.
Based on the foregoing, it is our opinion that:
1. The Company is a corporation duly organized and validly existing
in good standing under the laws of the State of Georgia. The Company has
the corporate power to carry on its businesses as now being conducted.
2. The Agreement, the Notes and all other Related Documents have
been duly authorized by all requisite corporate action and duly executed
and delivered by authorized officers of the Company, and are valid
obligations of the Company, legally binding upon and enforceable against
the Company in accordance with their respective terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization
or other similar laws affecting the enforcement of creditors' rights
generally and (b) general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law). The
Notes are entitled to the benefits of the Note Agreement.
3. It is not necessary in connection with the offering, issuance,
sale and delivery of the Notes under the circumstances contemplated by the
Agreement to register the Notes under the Securities Act or to qualify an
indenture in respect of the Notes under the Trust Indenture Act of 1939, as
amended.
4. The extension, arranging and obtaining of the credit represented
by the Notes do not result in any violation of regulation T, U or X of the
Board of Governors of the Federal Reserve System.
5. The execution and delivery of the Agreement, the Notes and all
other Related Documents, the offering, issuance and sale of the Notes and
fulfillment of and compliance with the respective provisions of the
Agreement, the Notes and all other Related Documents do not conflict with,
or result in a breach of the terms, conditions or provisions of, or
constitute a default under, or result in any violation of, or result in the
creation of any Lien upon any of the properties or assets of the Company
pursuant to, or require any authorization, consent, approval, exemption, or
other action by or notice to or filing with any court, administrative or
governmental body or other Person (other than routine filings after the
date hereof with the Securities and Exchange Commission and/or state Blue
Sky authorities) pursuant to, the charter or by-laws of the Company, any
applicable law (including any securities or Blue Sky law), statute, rule or
regulation or (insofar as is known to us after having made due inquiry with
respect thereto) any agreement (including, without limitation, any
agreement listed in Schedule 8G to the Agreement), instrument, order,
judgment or decree to which the Company is a party or otherwise subject.
6. A Georgia court or a federal court sitting in Georgia in a
diversity action would, under conflicts of law principles observed by the
courts of Georgia, give effect to the provisions of the Agreement, the
Notes and all other Related Documents providing that such documents are to
be governed by and construed in accordance with the laws of the State of
New York insofar as such provisions relate to the substantive laws of the
State of New York and to the validity, nature, interpretation and effect of
the Agreement, the Notes and all other Related Documents except (i) to the
extent, if any, that federal law applies, (ii) to the extent that
procedural (as opposed to substantive) laws are involved or (iii) to the
extent the applicable law of the State of New York violates a public policy
of Georgia.
This opinion is limited to matters governed by the federal laws of the
United States of America and the laws of the States of New York and the
State of Georgia.
This opinion may be relied upon by King & Spalding and any Transferee.
Very truly yours,
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