SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from............to............
Commission File Number 0-12114
CADIZ LAND COMPANY, INC.
(Exact name of registrant specified in its charter)
DELAWARE 77-0313235
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10535 Foothill Boulevard, Suite 150
Rancho Cucamonga, CA 91730
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (909) 980-2738
Securities Registered Pursuant to Section 12(b) of the Act: None
Name of Each Exchange
Title of Each Class on Which Registered
None None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- ------
The number of shares outstanding of each of the Registrant's classes of Common
Stock at August 12, 1996 was 19,572,611 shares of Common Stock, par value
$0.01.
<PAGE>
Cadiz Land Company, Inc.
Index to the Condensed Consolidated Financial Statements
For the Three Months Ended June 30, 1996 Page(s)
I. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. Balance Sheet. . . . . . . . . . . . . . . . . . . . . . 1
B. Statement of Cash Flows. . . . . . . . . . . . . . . . . 3
C. Statement of Operations . . . . . . . . . . . . . . . . 4
D. Statement of Stockholders' Equity. . . . . . . . . . . . 5
E. Notes. . . . . . . . . . . . . . . . . . . . . . . . . . 6
II. SUPPLEMENTARY INFORMATION
A. Management's Discussion and Analysis of
Financial Condition and Results of Operations. . . . . . 8
B. Other Information. . . . . . . . . . . . . . . . . . . . 15
C. Signatures . . . . . . . . . . . . . . . . . . . . . . . 16
<PAGE>
<TABLE>
Cadiz Land Company, Inc.
Condensed Consolidated Balance Sheet
<CAPTION>
June 30, March 31,
Assets: 1996 1996
-------- ---------
($ in thousands) (unaudited)
<S> <C> <C>
Cash and cash equivalents $ 2,544 $ 5,153
Accounts receivable 614 443
Inventory 412 266
Property and equipment, net 2,157 2,252
Land and improvements, net:
Developed property 9,343 9,429
Unimproved land 12,351 12,236
Water transfer projects 2,555 2,496
Excess of purchase price over net
assets acquired, net 5,098 5,155
Debt issue costs and other assets 2,422 1,233
--------- --------
$37,496 $38,663
======= =======
<FN>
See accompanying notes to the consolidated financial statements.
</TABLE>
<TABLE>
Cadiz Land Company, Inc.
Condensed Consolidated Balance Sheet
<CAPTION>
June 30, March 31,
Liabilities and Stockholders' Equity: 1996 1996
--------- --------
($ in thousands except number of shares) (Unaudited)
<S> <C> <C>
Accounts payable $ 1,296 $ 1,772
Other liabilities 823 521
Debt 17,982 17,617
Contingencies (Note 5)
Stockholders' equity:
Common stock - $.01 par value;
24,000,000 shares authorized;
shares issued and outstanding -
19,400,389 at June 30, 1996
and 19,247,611 at March 31, 1996 194 192
Preferred stock - $.01 par value;
100,000 shares authorized; no shares
outstanding
Additional paid-in capital 73,584 72,957
Accumulated deficit (56,383) (54,396)
----------- ------------
Total stockholders' equity 17,395 18,753
----------- ------------
$37,496 $ 38,663
======= ========
<FN>
See accompanying notes to the consolidated financial statements.
</TABLE>
<TABLE>
Cadiz Land Company, Inc.
Condensed Consolidated Statement of Cash Flows
<CAPTION>
For the Three Months Ended June 30, 1996 1995
------- -------
($ in thousands)
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (1,987) $ (1,851)
Adjustments to reconcile net loss
to net cash used for continuing
operating activities:
Depreciation and amortization 473 470
Interest capitalized to debt 199 127
The effect on net cash used for continuing
operating activities from changes in
assets and liabilities:
Inventory and accounts receivable (319) (339)
Debt issue costs and other assets (46) (72)
Accounts payable and other liabilities (565) (27)
--------- --------
Net cash used for operating activities (2,245) (1,692)
--------- ---------
Cash flows from investing activities:
Land purchase and development (133) (135)
Water transfer projects (59) (419)
Additions to property and equipment (6) (175)
Sun World International, Inc. -
acquisition costs (897) -0-
-------- --------
Net cash used for investing activities (1,095) (729)
--------- --------
Cash flows from financing activities:
Net proceeds from issuance of
common stock 629 279
Proceeds from issuance of debt 112 155
Principal payments on debt (10) (2)
-------- --------
Net cash provided by financing activities 731 432
--------- --------
Net decrease in cash and cash equivalents (2,609) (1,989)
Cash and cash equivalents,
beginning of year 5,153 2,454
-------- --------
Cash and cash equivalents,
end of period $ 2,544 $ 465
<FN> ======= =======
See accompanying notes to the consolidated financial statements.
</TABLE>
<TABLE>
Cadiz Land Company, Inc.
Condensed Consolidated Statement of Operations
<CAPTION>
For the Three Months Ended June 30, 1996 1995
------ ------
($ in thousands except per share data)
(unaudited)
<S> <C> <C>
Revenues $ 82 $ 54
------- -----
Costs and expenses:
Resource development 580 434
Landfill prevention activities 127 356
General and administrative 934 415
Depreciation 200 202
Amortization 58 58
------- -------
1,899 1,465
------- -------
Operating loss (1,817) (1,411)
Interest expense, net (439) (440)
Litigation settlement (Note 5) 269 -0-
--------- --------
Net loss $ (1,987) $ (1,851)
========= =========
Net loss per share $ (0.12) $ (0.11)
========= ==========
<FN>
See accompanying notes to the consolidated financial statements.
</TABLE>
<TABLE>
Cadiz Land Company, Inc.
Condensed Consolidated Statement of Stockholders' Equity
<CAPTION>
For the Three Months Ended June 30, 1996
($ in thousands except number of shares)
(unaudited)
Additional Total
Common Stock Paid-In Accumulated Stockholders'
-----------------
Shares Amount Capital Deficit Equity
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance as of March 31, 1996 19,247,611 $ 192 $72,957 $(54,396) $18,753
Exercise of stock options
(Note 4) 152,778 2 627 629
Net loss (1,987) (1,987)
----------- ----- ------- --------- --------
Balance as of June 30, 1996 19,400,389 $ 194 $73,584 $(56,383) $17,395
=========== ===== ======= ========= ========
<FN>
See accompanying notes to the consolidated financial statements.
</TABLE>
NOTE 1 - DESCRIPTION OF BUSINESS
- ---------------------------------------------------
Business of the Company
- --------------------------------
Cadiz Land Company, Inc. (the "Company") identifies, acquires and
develops properties (to date in the desert regions of Southern California)
which have significant indigenous supplies of water. The Company
evaluates, on an ongoing basis, the various means by which the land and
water resources available to its portfolio of properties can be utilized for
the purposes of enhancing the long-term appreciation of its properties. The
Company currently owns or controls approximately 43,000 acres, with its
largest property totalling approximately 31,800 acres at Cadiz, California.
Basis of Presentation
- --------------------------------
The Condensed Consolidated Financial Statements have been prepared by
the Company without audit and should be read in conjunction with the
consolidated financial statements and notes thereto included in the
Company's latest Form 10-K for the year ended March 31, 1996. The
foregoing Condensed Consolidated Financial Statements include all
adjustments, consisting only of normal recurring adjustments which the
Company considers necessary for a fair presentation. The results of
operations for the three months ended June 30, 1996 are not necessarily
indicative of the results to be expected for the full fiscal year.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ------------------------------------------------------
See Note 2 to the Condensed Consolidated Financial Statements included
in the Company's latest Form 10-K for a discussion of the Company's
accounting policies.
Net loss per share is computed based on the weighted average number of common
shares outstanding of 19,257,667 and 17,023,069 for the quarters ending
June 30, 1996 and 1995, respectively.
NOTE 3-ACQUISITION OF SUN WORLD INTERNATIONAL, INC.
- -------------------------------------------------------
A consensual Plan of Reorganization (the "Plan") for the acquisition of Sun
World International, Inc. ("Sun World") by the Company (Debtors'
Modified Fourth Amended Consolidated Plan of Reorganization dated June
3, 1996) was confirmed at a hearing on July 12, 1996. Upon satisfaction of
all Plan requirements (including completion of satisfactory documentation),
ownership of Sun World is expected to be transferred to the Company
during the fiscal quarter ended September 30, 1996. For a detailed
description of the acquisition, see Note 8 to the Consolidated Financial
Statements, included in the Company's latest Form 10-K.
NOTE 4 - STOCK OPTIONS EXERCISED AND PRIVATE PLACEMENT
- --------------------------------------------------------
During the three months ended June 30, 1996, previously outstanding stock
options of 152,778 were exercised resulting in gross proceeds to the
Company of $629,000.
Subsequent to the quarter ended June 30, 1996, the Company completed a
private placement of 760 shares of 6% Convertible Series B Preferred Stock
resulting in gross proceeds to the Company of $7,600,000.
NOTE 5 - CONTINGENCIES
- ---------------------------------------
The Company was awarded full reimbursement for its legal fees and costs
incurred in defending a legal action for which the plaintiffs filed an appeal.
In August 1995, the Arizona Court of Appeals ruled in favor of the trial
court's judgment upholding the award for full reimbursement to the
Company for such legal fees and costs incurred. In addition, the Court of
Appeals has awarded the Company reimbursement for legal fees on appeal.
The plaintiffs posted a cash bond from which the Company collected its
judgment of approximately $269,000.
As further discussed in Note 9 to the Condensed Consolidated Financial
Statements included in the Company's latest Form 10-K, the Company filed
an action relative to the proposed construction and operation of a landfill to
be located adjacent to the Company's Cadiz property (the Rail Cycle
Project), with the Superior Court in San Bernardino County against the
County of San Bernardino and Rail Cycle, L.P., among others. The action
is currently in the discovery phase and the Company intends to continue to
vigorously prosecute its claims in this matter.
Results of Operations
- -------------------------------
Quarter ended June 30, 1996 Compared to Quarter ended June 30, 1995
- -------------------------------------------------------------------
During the quarter ended June 30, 1996, the Company incurred a net loss
of $1,987,000 compared to a loss of $1,851,000 during the same period in
1995. The following table summarizes the net loss for both periods (in
thousands):
1996 1995
-------- --------
Revenues $ 82 $ 54
------- --------
Costs and expenses:
Resource development 580 434
Landfill prevention activities 127 356
General and administrative 934 415
Depreciation 200 202
Amortization 58 58
Interest expense, net 439 440
Litigation settlement (269) -0-
--------- ---------
Net loss $ 1,987 $ 1,851
======= =========
Revenues
- -------------
Revenues are recognized from the Company's resource development as a
result of the Company's ability to enter into joint venture or leasing
arrangements with third party growers for the farming of crops on its
properties. Revenue in both periods consisted primarily of vineyard rent,
proceeds from other crops and gross profit from the produce brokerage
operation.
Resource Development
- -----------------------------
Expenses recorded in this category consist of costs incurred in the
agricultural, land and water resource development of the Company's
landholdings. As an integral part of its strategy to control the ultimate
use of the resources associated with the Cadiz project, the Company
continues to maintain control of management of both the infrastructure
associated with these properties as well as the development of the area
for agricultural use. Accordingly, costs related to the Company's
management of its infrastructure and agricultural development are
included in Resource Development, as well as the Company's share of
joint venture crop costs. Additionally, operating costs associated with
the Company's produce brokerage and the Company's continual
evaluation of additional potential land acquisition sites, such as overhead,
legal and travel are included within this category.
Resource development expenses totaled $580,000 for the quarter ended
June 30, 1996 as compared to $434,000 for the same period in 1995. The
increase is primarily attributable to the Company's share of joint venture
production costs associated with the development of an additional 240
acres to row crops at the beginning of the 1996 fiscal year, as well as an
increase in costs associated with the management of the Cadiz ranch with
respect to the additional acreage.
Landfill Prevention Activities
- -------------------------------------
The Company is engaged in vigorous opposition to the proposed
construction and operation of a landfill proposed to be located adjacent to
Company's Cadiz property, and has filed a lawsuit seeking, among other
things, to set aside regulatory approvals for the landfill project. See
"Item 3 - Legal Proceedings" in the Company's latest 10-K. During the
quarter ended June 30, 1996, expenses incurred in connection with
activities in opposition to the project, such as litigation costs and
professional fees and expenses, totalled $127,000 as compared to
$356,000 during the same period of the prior year.
General and Administrative
- -----------------------------------
General and administrative expenses during both periods consisted
primarily of corporate operating expenses, professional fees and salaries.
These expenses increased by $519,000 during the quarter ended June 30,
1996 as compared to the same period in 1995 due to an increase in the level
of activity primarily as a result of the acquisition of Sun World.
Depreciation
- ----------------
Depreciation totalled $200,000 for the quarter ended June 30, 1996 as
compared to $202,000 for the quarter ended June 30, 1995.
Interest Expense
- ------------------------
Net interest expense totaled $439,000 during the quarter ended June 30,
1996 as compared to $440,000 during the same period in 1995. The
following table summarizes the components of net interest expense for
the three month periods ended June 30, 1996 and 1995 (in thousands):
1996 1995
------ --------
Interest expense on outstanding debt $ 256 $ 246
Amortization of financing costs 210 210
Interest income (27) (16)
------- ---------
Net interest expense $ 439 $ 440
====== ======
Interest expense on outstanding debt increased during the period as a
result of an increased level of borrowing. Financing costs are
amortized over the life of the debt agreement.
Litigation Settlement
- -------------------------
The Company was awarded and received approximately $269,000 as
full reimbursement for its legal fees and costs incurred in defending a
legal action.
LIQUIDITY AND CAPITAL RESOURCES
- --------------------------------
Liquidity and Capital Resources
- --------------------------------
Pursuant to its business strategy, the Company has historically utilized
its working capital primarily for development purposes; that is, for
purposes designed to increase the long term value of its properties. As
the Company has not received significant revenues from its
development operations to date, the Company has been required to
obtain financing to bridge the gap between the time development
expenses are incurred and the time that a revenue stream will
commence. Accordingly, the Company has looked to outside funding
sources to address its liquidity and working capital needs. Historically,
the Company has addressed these needs primarily through secured debt
financing arrangements with its lenders, private equity placements and
the exercise of outstanding stock options. See "Current Financing
Arrangements" and "Equity Placements", below.
A consensual plan of reorganization for the acquisition by the
Company of all of the stock of a reorganized Sun World for total
consideration of approximately $175 million was confirmed by the
U.S. Bankruptcy Court on July 12, 1996. Of this amount,
approximately $153 million will be owed to Sun World's existing
secured lenders through a restructuring of existing debt. Substantially all
of the remainder of the purchase price will be funded by the Company
from the proceeds of the issuance of preferred stock. See "Equity
Placements", below. In addition, the Company will make a cash capital
contribution of $15 million into Sun World, with the intent of
eliminating the requirement for Sun World to have any additional debt
facilities beyond those owed to its existing secured creditors. As a
result, the Company believes that additional outside funding will not be
required in order for Sun World to meet its ongoing working capital
needs.
Current Financing Arrangements
- -------------------------------
The Company's two primary lenders are Cooperative Centrale
Raiffeisen-Boerenleenbank B.A., a Netherlands commercial bank
("Rabobank") and Henry Ansbacher & Co., Limited, a banking
corporation organized under the laws of England ("Ansbacher")
(collectively, the "Banks").
The Company's obligations to Rabobank and Ansbacher totalling
approximately $18,000,000 mature in January 1997. In July 1996, the
Company and Rabobank reached an agreement in principle whereby
the Company has been granted two one year extensions provided the
total debt outstanding to Rabobank at January 31, 1997 does not exceed
$8.5 million. In consideration for this agreement, the Company is
required to pay an initial commitment fee of $150,000 and issue 30,000
warrants to purchase the Company's common stock at $.05 per share
exercisable for five years following the date of issuance. Upon
exercise of the first and second extension, the Company would be
required to pay Rabobank certain fees. The interest rate in effect
pursuant to this agreement would be at Rabobank's cost of funds plus
one and one quarter percent (1 1/4%). The Company also currently
intends to replace or renegotiate the terms of its current obligations to
Ansbacher prior to January 1997. Ansbacher and Rabobank hold senior and
subordinate deeds of trust, respectively, on substantially all of the Company's
property.
As the Company continues to aggressively pursue its business strategy,
additional financing specifically in connection with the Company's
water projects will be required. The nature of such additional financing
for the water transfer projects will depend upon how the development
and ownership of each project is ultimately structured, and how much
of each project's funding will be the Company's responsibility. Should
the Company determine that it will be able to maximize its profit
potential through construction and ownership of the water delivery
systems used in the project, the Company will be required to obtain
long-term project financing. Based upon the results of analyses
performed by an investment banking firm retained by the Company,
management believes that several alternative long-term financing
arrangements are available to the Company which will be further
evaluated once funding responsibility and ownership alternatives are
determined.
The Company and the Banks have historically structured their
financing arrangements with a view towards effective implementation
of the Company's business plan. The Company may, if it deems
necessary, seek adjustments to these existing arrangements to
accommodate previously unforeseen developments, such as the Sun
World acquisition and/or any changes in the timetable for regulatory
approvals of the water transfer projects.
Equity Placements
- ------------------
During the fiscal year ended March 31, 1996, the Company completed
private placements of 2,114,157 shares of its common stock, resulting
in gross proceeds of $9,932,000. In addition, the Company received
proceeds of approximately $360,000 through the exercise of
outstanding stock options and warrants. The Company utilized such
proceeds to fund its capital projects related to development of its water
transfer projects, purchase of additional acreage and for operating
requirements, including the payment of expenses incurred in
connection with the planned acquisition of Sun World.
During the quarter ended June 30, 1996, the Company received gross
proceeds of $629,000 through the exercise of previously outstanding
stock options.
The principal source of funding for the Sun World acquisition is
expected to be obtained by the Company from exercise of Standby
Purchase Commitments issued to the Company in June 1996. The
Company has exercised its right to sell approximately $30,000,000 of
newly authorized Convertible Series A Preferred Stock ("Series A
Preferred Stock") to the institutions which have heretofore delivered
these Standby Purchase Commitments. The proceeds from the sale of the
Series A Preferred Stock will be deposited into escrow,
and may be used by the Company only for the acquisition. As the
issuance of Series A Preferred Stock is contingent upon the acquisition
of Sun World, if the acquisition of Sun World has not been completed
by September 15, 1996, funds deposited into escrow will be returned to
the subscribers and no Series A Preferred Stock will be issued. The
Series A Preferred Stock, once issued, will become convertible into
shares of common stock, at the option of the holder, at a price of $4.50
per share, following the filing of an amendment to the Company's
Certificate of Incorporation increasing the number of authorized shares
of common stock available for issuance by the Company. The initial
conversion price of the Series A Preferred Stock will automatically be
reduced to $3.75 per share if the bid price of the Company's common
stock has not averaged at least $5.25 per share during the ninety (90)
day period prior to the filing of the amendment. Holders will be
entitled to cumulative dividends initially payable at a rate of six percent
(6%) per annum.
In July 1996, in connection with a private placement to a limited
number of accredited investors of 6% Convertible Series B Preferred
Stock (the "Series B Preferred Stock"), the Company received gross
proceeds of $7.6 million. Shares of Series B Preferred Stock will be
convertible into shares of common stock at a price equal to the lower of
(a) $5.8125 per share or (b) eighty-five percent (85%) of the average
closing bid price over the ten trading-day period ending on the day
prior to the submission of any conversion notice. Holders will also be
entitled to cumulative dividends at the rate of six percent (6%) per
annum until conversion. The Company reserves the right to redeem
any convertible shares for their full cash equivalent by giving the
investors five (5) days notice. The proceeds from this issuance will
help fund the cash requirements of the Sun World transaction as well as
the capital and operating requirements of the Company.
Additional issuances of preferred stock may be utilized in connection
with the acquisition of Sun World following final determination of the
obligations payable at closing, however, the Company does not expect
that such additional issuances, if any, would exceed $5,000,000.
Working Capital Resources
- --------------------------
The Company has adopted an unclassified balance sheet (eliminating
the distinction between current assets and long-term assets and current
liabilities and long-term liabilities). Accordingly, any historical or
forward looking discussion of the Company's working capital
resources should focus on the receipt and use of cash as opposed to the
broader concepts of working capital and current ratio.
Cash used for continuing operating activities totalled $2,245,000 for the
three month period ended June 30, 1996 as compared to $1,692,000 for
the same period in 1995. During the 1996 quarter, the Company was
engaged in, among other things, the possible acquisition of Sun World;
negotiations and/or discussions with prospective purchasers regarding
several of the Company's water transfer projects and management of
the Company's permanent and seasonal crops. In the prior year's
quarter, by contrast, activities pertained to evaluation of only one water
transfer project and management of the Company's permanent and
seasonal crops. As a result of this increased level of activity, the
Company has incurred a corresponding increase in costs related to
overhead, professional fees, salaries and travel, among others. The
balance of the increase in cash for continuing operating activities
resulted from the payment by the Company, in June 1996, of fees
related to the funding of the Sun World acquisition.
Cash used for investing activities totalled $1,095,000 during the three
months ended June 30, 1996 as compared to $729,000 for the same
period in 1995.
Financing activities provided $731,000 for the three months ended June
30, 1996 as compared to $432,000 during the three months ended June
30, 1995. Proceeds from the issuance of common stock as a result of
the exercise of previously outstanding stock options totalled $629,000
and $279,000 during the 1996 and 1995 periods, respectively.
OUTLOOK
- -------
During fiscal 1996, the Company funded its working capital
requirements from the beginning cash balance as of April 1, 1995 of
$2.454 million, the additional loan facility provided by Ansbacher,
$.36 million received through the exercise of stock options during
fiscal 1996, and a portion of the $9.9 million resulting from the
completion of private placements during the year ended March 31,
1996. The Company expects that its current working capital, combined
with funds available from the placement of Series B Preferred Stock
(which are not conditioned upon the completion of the Sun World
acquisition), will be sufficient for its short term working capital needs.
The Company believes that an acquisition of Sun World upon the terms
currently proposed will enable Sun World to be self-sufficient
thereafter for working capital purposes. The Company intends as part
of the proposed Sun World plan of reorganization to make $15 million
of capital available to Sun World at closing, an amount estimated as
necessary to achieve this result. The Company does not expect, in the
foreseeable future, to make additional capital contributions to Sun
World, although no assurances can be given.
As the Company is actively pursuing the development of its water
resources, it is seeking the finalization of the regulatory approvals
needed to commence construction of a water delivery project at Cadiz.
Once the lengthy regulatory review process is finalized and
construction of the necessary delivery system has commenced, the
Company anticipates generating a revenue stream within less than a
year thereafter which will be sufficient to meet the operating
requirements of the Company although no assurances can be given.
Concurrently with the regulatory review process, the Company is also
negotiating the terms of water delivery arrangements with various
California water agencies, which include issues such as financing,
pricing concepts and formulas and ownership of the pipeline and the
delivery system.
In addition to the development of its water resources, the Company is
actively involved in further agricultural development of its
landholdings as a result of San Bernardino County's approval of a
General Plan Amendment covering 9,600 acres of the Company's
landholding at Cadiz and the increased grower interest in Cadiz as an
agricultural area. Such development will be systematic and in
furtherance of the Company's business strategy to provide for
maximization of the value of its assets. Such development is expected
to continue to be accomplished through negotiated arrangements with
third parties and/or, following the acquisition of Sun World, with Sun
World, which will significantly reduce any capital outlay required of
the Company in connection with such development activities and
provide a revenue stream in the future.
CADIZ LAND COMPANY INC.
OTHER INFORMATION
ITEM 1 - Legal Proceedings
- -------------------------------
See "Item 3. Legal Proceedings" included in the
Company's latest Form 10-K for a complete discussion.
ITEM 2 - Change in Securities
- ---------------------------------
Not applicable.
ITEM 3 - Defaults upon Senior Securities
- ---------------------------------------------
Not applicable.
ITEM 4 - Submission of Matter to a Vote of Security Holders
- ---------------------------------------------------------------
Not applicable.
ITEM 5 - Other Information
- -------------------------------
Not applicable.
ITEM 6 - Exhibits and Reports on Form 8-K
- ----------------------------------------------
A. EXHIBITS
1. Exhibit 27 - Financial Data Schedule
2. Exhibit 2.1 - Debtors' Modified Fourth
Amended Consolidated
Plan of Reorganization
dated June 3, 1996
(Modified)
3. Exhibit 2.2 - Plan Implementation
Agreement dated July 12, 1996
4. Exhibit 10.1 - Supplement to Plan
Support Agreement dated
June 3, 1996
B. Reports on Form 8-K
1. None
CADIZ LAND COMPANY, INC.
Signatures
- ---------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
Cadiz Land Company, Inc.
By: /s/ Keith Brackpool August 14, 1996
------------------------- ------------------------------------
Keith Brackpool Date
Chief Executive Officer and Director
By: /s/ Susan K. Chapman August 14, 1996
--------------------------- ------------------------------------
Susan K. Chapman Date
Chief Financial Officer and Secretary
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,544
<SECURITIES> 0
<RECEIVABLES> 614
<ALLOWANCES> 0
<INVENTORY> 412
<CURRENT-ASSETS> 0
<PP&E> 2,157
<DEPRECIATION> 0
<TOTAL-ASSETS> 37,496
<CURRENT-LIABILITIES> 1,296
<BONDS> 0
0
0
<COMMON> 194
<OTHER-SE> 73,584
<TOTAL-LIABILITY-AND-EQUITY> 37,496
<SALES> 82
<TOTAL-REVENUES> 82
<CGS> 0
<TOTAL-COSTS> 1,899
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 439
<INCOME-PRETAX> (1,987)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,987)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,987)
<EPS-PRIMARY> (0.12)
<EPS-DILUTED> 0
</TABLE>
EXHIBIT 2.1
------------
LATHAM & WATKINS
Michael S. Lurey (Bar No. 48235)
Robert A. Klyman (Bar No. 142723)
Gregory O. Lunt (Bar No. 173297)
Michael J. Lawrence (Bar No. 180678)
633 West Fifth Street, Suite 4000
Los Angeles, California 90071-2007
(213) 485-1234
Attorneys for Debtors and Debtors-in-Possession
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re ) Case No. SB94-23212 DN
)
SUN WORLD INTERNATIONAL, INC.,) Chapter 11
SUN WORLD, INC. )
COACHELLA GROWERS, ) Jointly Administered
SUN DESERT, INC., )
AAI SERVICES, INC. ) DEBTORS' MODIFED FOURTH AMENDED
) FOURTH AMENDED CONSOLIDATED PLAN
Debtors-in-Possession ) OF REORGANIZATION DATED JUNE 3,
) 1996 (MODIFIED)
)
) [NO HEARING SET]
TO THE HONORABLE DAVID N. NAUGLE, UNITED STATES BANKRUPTCY JUDGE,
THE UNITED STATES TRUSTEE AND OTHER INTERESTED PARTIES AND THEIR
ATTORNEYS OF RECORD:
<PAGE>
I
INTRODUCTION
Sun World International, Inc., Sun World, Inc., Coachella
Growers and Sun Desert, Inc. (defined collectively herein as the
Debtors) hereby propose the following Modified Fourth Amended
Consolidated Plan of Reorganization (defined herein as the Plan) for
the resolution of the Debtors' outstanding creditor claims and equity
interests. Reference is made to the Disclosure Statement for Debtors'
Modified Fourth Amended Consolidated Plan of Reorganization Dated June
3, 1996 (defined herein as the Disclosure Statement) for a discussion
of the Debtors' history, business, properties and results of
operations, and for a summary of the Plan and certain related matters.
The Plan proposes a purchase by Cadiz of all of the New
Common Stock and all of the Old Securities to the extent that holders
of such Old Securities agree to sell their Old Securities to Cadiz, or
by another Buyer pursuant to an Overbid of (i) all or substantially
all of the Debtors' assets, (ii) all or part of the Old Securities, or
(iii) all or part of the New Common Stock. Under the Plan, holders of
Allowed Claims and Allowed Interests will receive distributions of
Cash or other property as described in Article IV of the Plan.
All holders of Claims and Interests are encouraged to read
the Plan and the Disclosure Statement in their entirety before voting
to accept or reject the Plan. No materials, other than the Disclosure
Statement and any exhibits and schedules attached thereto or
referenced therein, have been approved by the Debtors for use in
soliciting acceptances or rejections of the Plan.
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, ALL
STATEMENTS IN THIS PLAN AND THE ACCOMPANYING DISCLOSURE STATEMENT
CONCERNING THE HISTORY OF THE DEBTORS' BUSINESSES, THE PAST OR PRESENT
FINANCIAL CONDITION OF THE DEBTORS, TRANSACTIONS TO WHICH THE DEBTORS
WERE OR ARE PARTIES, OR THE EFFECT OF CONFIRMATION OF THE PLAN ON
SECURED CREDITORS, UNSECURED CREDITORS OR EQUITY SECURITY HOLDERS ARE
ATTRIBUTABLE EXCLUSIVELY TO THE DEBTORS AND NOT TO ANY OTHER PARTY.
II.
DEFINITIONS, INTERPRETATION AND RULES OF CONSTRUCTION
A. Definitions.
In addition to such other terms as are defined in other
sections of the Plan, the following terms (which appear in the Plan as
capitalized terms) have the following meanings as used in the Plan:
1. "AAI" means AAI Services, Inc., a California
corporation 100% of the stock of which is owned by Sun World. The
Plan does not provide for the reorganization of the estate of AAI or
the resolution of its outstanding third-party creditor claims and
equity interests.
2. "Administrative Claim" means a Claim for costs and
expenses of administration allowed under section 503(b) of the
Bankruptcy Code and referred to in section 507(a)(1) of the Bankruptcy
Code, including, without limitation: (a) the actual and necessary
costs and expenses incurred after the Petition Date of preserving the
Estates and operating the business of the Debtors (such as wages,
salaries or commissions for services, payments for inventory and all
principal, interest, fees, reimbursable expenses and other amounts
payable in connection with the DIP Agreement); (b) compensation for
legal, financial advisory, accounting and other services and
reimbursement of expenses awarded or allowed under sections 330(a) or
331 of the Bankruptcy Code; and (c) all fees and charges assessed
against the Estates under 28 U.S.C. section 1930.
3. "Allowed Claim" or "Allowed Interest" means a Claim
against or Interest in the Debtors to the extent that
a. a proof of the Claim or Interest
(1) was timely served upon the Debtors and no
objection to the Claim or Interest is Filed within the time fixed
by the Bankruptcy Court for such objections; or
(2) is deemed Filed under applicable law or
pursuant to a Final Order of the Bankruptcy Court and no
objection to the Claim or Interest is Filed within the time fixed
by the Bankruptcy Court for such objections; or
(3) is Allowed pursuant to subparagraph b of
this paragraph 3.
b. If the Debtors file an objection to a proof of
Claim or Interest within a time fixed by the Bankruptcy Court, the
Claim or Interest shall be Allowed to the extent of
(1) any amount of such Claim or Interest to
which the Debtors did not object;
(2) any amount otherwise authorized by Final
Order or the Plan; or
(3) any amount temporarily allowed by an Order
for purposes of voting on the Plan.
"Allowed Administrative Claim," "Allowed Priority Tax Claim," "Allowed
Secured Claim" and "Allowed Unsecured Claim" have correlative
meanings.
4. "Allowed Class ... Claim" means an Allowed Claim in
the particular Class described.
5. "Allowed Class ... Interest" means an Allowed Interest
in the particular Class described.
6. "Amended Sun World Bylaws" means the amended and
restated bylaws of Reorganized Sun World that will be effective on the
Effective Date, in the form which will be Filed, at or prior to the
commencement of the Confirmation Hearing.
7. "Amended Sun World Certificate" means the amended and
restated certificate of incorporation of Reorganized Sun World that
will be effective on the Effective Date, in the form which will be
Filed, at or prior to the commencement of the Confirmation Hearing.
8. "Balloting Deadline" shall have the definition given
to it in paragraph VIII G.
9. "Bankruptcy Code" means title 11 of the United States
Code, as now in effect or hereafter amended if such amendments are
made applicable to the Reorganization Cases.
10. "Bankruptcy Court" means the United States Bankruptcy
Court for the Central District of California or, if such Court ceases
to exercise jurisdiction over the Reorganization Cases, such court or
adjunct thereof that exercises jurisdiction over the Reorganization
Cases in lieu of the United States Bankruptcy Court for such District.
11. "Bankruptcy Rules" means the Federal Rules of
Bankruptcy Procedure, as applicable from time to time in the
Reorganization Cases.
12. "Blythe Ranch" means that certain parcel of real
property located in Riverside County, California in which SWII holds
an ownership interest and Zenith asserts a fifty percent (50%)
ownership interest.
13. "Business Day" means any day other than a Saturday,
a Sunday or a "legal holiday" (as defined in Bankruptcy Rule 9006(a)).
14. "Buyer" means Cadiz, or another purchaser pursuant to
an Overbid of (i) all or substantially all of the Debtors' assets, or
(ii) all of the New Common Stock and Old Securities to the extent that
holders of such Old Securities agree to sell their Old Securities to
the Buyer.
15. "Cadiz" means Cadiz Land Company, Inc., a publicly
held Delaware corporation (NASDAQ symbol: CLCI) involved in
agricultural development.
16. "Cadiz Board" means the board of directors of Cadiz.
17. "Cadiz Offer" means the offer by Cadiz to purchase all
of the Old Common Stock and Old Preferred Stock or all of the New
Common Stock pursuant to a Plan Implementation Agreement.
18. "Capital Contribution" means a Cash contribution by
the Buyer to the equity of Reorganized Sun World, either (i) without
consideration or (ii) solely in respect of the issuance of New Common
Stock.
19. "Cash" means currency, a certified check, a cashier's
check or a wire transfer of good funds from any source, or a check
from Reorganized Sun World or other Person making any distribution
under the Plan.
20. "Causes of Action" means any and all claims or causes
of action which any Debtor or any Subsidiary has or asserts against
any third party, including, without limitation, any claim or cause of
action arising pre-petition, any claim or cause of action arising
post-petition, any claim or cause of action arising under sections 541
through 550 of the Bankruptcy Code or state laws of similar effect,
and any claim or cause of action against insiders or affiliates of any
Debtor, those against insiders or affiliates of such insiders or
affiliates and entities controlled by them, but not including (a) any
Intercompany Claim, (b) any right to subordinate any Claim or Interest
of such third party pursuant to Bankruptcy Code section 510(c) or (c)
any Cause of Action arising post-Confirmation.
21. "Claim" means a claim against one or more of the
Debtors, whether or not asserted or allowed, as defined in section
101(5) of the Bankruptcy Code.
22. "Class" means a class of Claims or Interests
designated pursuant to the Plan.
23. "Class 8 Releasee" shall have the definition given to
it in paragraph VIII X.
24. "Class 9 Releasee" shall have the definition given to
it in paragraph VIII X.
25. "Class 10 Releasee" shall have the definition given
to it in paragraph VIII X.
26. "Clerk" means the Clerk of the Bankruptcy Court.
27. "Coachella" means Coachella Growers, a California non-profit
agricultural cooperative the sole member of which is Sun
Desert, as a debtor and debtor in possession in its Reorganization
Case under the Bankruptcy Code.
28. "Confirmation" means the conclusion of the
Confirmation Hearing.
29. "Confirmation Date" means the date on which the
Bankruptcy Court enters the Confirmation Order on the Docket.
30. "Confirmation Hearing" means the hearing on
confirmation of the Plan, as the Plan may be modified hereafter.
31. "Confirmation Order" means the Order of the Bankruptcy
Court confirming the Plan under section 1129 of the Bankruptcy Code.
32. "Credit Agricole" means Caisse Nationale de Credit
Agricole.
33. "Credit Agricole Cash Payment" shall have the
definition given to it in paragraph IV B 2a.
34. "Credit Agricole Releasees" shall have the definition
given to it in paragraph VIII X.
35. "Creditors' Committee" means the official committee
of holders of Unsecured Claims appointed in the Reorganization Cases
by the Office of the United States Trustee, as its composition may be
changed from time to time by the addition, resignation or removal of
its members.
36. "Debtors" means, collectively, SWII, Sun World,
Coachella, and Sun Desert, but does not include AAI.
37. "Debtors in Possession" means the Debtors (or a Debtor
when used in the singular), when acting in the capacity of
representative of the Estates in the Reorganization Cases.
38. "DIP Agreement" means the Amended and Restated Debtor
In Possession Credit Agreement dated as of February 28, 1996 among
SWII, Sun World and Credit Agricole.
39. "Disclosure Statement" means the Disclosure Statement
for Debtors' Fourth Amended Consolidated Plan of Reorganization Dated
June 3, 1996 (and all exhibits and schedules annexed thereto or
referred to therein), as it may be amended or supplemented from time
to time.
40. "Disputed Claim" means a Claim, not otherwise Allowed
or paid pursuant to the Plan, as to which (i) a proof of claim has
been Filed or deemed Filed and (ii) an objection has been Filed timely
and which objection, if timely Filed, has not been withdrawn on or
before any date fixed for Filing such objections by the Plan or Order
of the Bankruptcy Court and (if not withdrawn) has not been overruled
or denied by a Final Order. A Claim shall be considered a Disputed
Claim to the extent of any Filed objection.
41. "Disputed Interest" means an Interest as to which an
objection has been or may be timely Filed and which objection, if
timely Filed, has not been withdrawn on or before any date fixed for
Filing such objections by the Plan or Order of the Bankruptcy Court
and (if not withdrawn) has not been overruled or denied by a Final
Order. An Interest shall be considered a Disputed Interest to the
extent of any Filed objection.
42. "Docket" means the docket in the Reorganization Cases
maintained by the Clerk.
43. "Effective Date" means the first Business Day: (a)
(1) at least eight (8) Business Days after the Confirmation Date, or
(2) at least one (1) Business Day after the Confirmation Date, if the
Bankruptcy Court enters an order making Bankruptcy Rule 7062
inapplicable to the proceedings respecting the Confirmation Order or
otherwise determining that the Effective Date may occur immediately
following Confirmation; (b) on which: (1) no stay of the Confirmation
Order is in effect and (2) all conditions to the Effective Date have
been satisfied or, if waivable, waived by the party for whose benefit
such condition exists; and (c) as of which all conditions to the
consummation of (1) the Sale under the Plan Implementation Agreement
and (2) the restructuring of the claims of Hancock and Credit Agricole
under the New Hancock Credit Agreement and the New Credit Agricole
Credit Agreement, respectively, have been satisfied or waived by the
party for whose benefit such condition exists; provided, that in no
event shall the Effective Date be later than sixty (60) days after the
Confirmation Date; and provided that the Bankruptcy Court may extend
the deadline for the Effective Date to occur following notice and
hearing.
44. "Emergency Reserve" shall have the definition given
to it in paragraph VIII K.
45. "Equity Cash Payment" shall have the definition given
to it in paragraph IV C 5.
46. "Equity Committee" means the official committee of
holders of Interests in the Debtors appointed in the Reorganization
Cases by the Office of the United States Trustee, as its composition
may be changed from time to time by the addition, resignation or
removal of its members.
47. "Ernst & Young Causes of Action" shall have the
definition given to it in paragraph IV B 2a.
48. "Estates" means collectively the estate created in
each Debtor's Reorganization Case under section 541 of the Bankruptcy
Code.
49. "Excess Cash Flow" shall have the definition given to
it in paragraph IV B 2e.
50. "Fairchild Acres" means that certain parcel of real
property located in Riverside County, California, which was previously
owned by Sun World and was conveyed to Fairchild Acres, a general
partnership, by Sun World, Inc. on or about December 23, 1991.
51. "File" or "Filed" means filed with the Bankruptcy
Court in the Reorganization Cases.
52. "Final Order" means an order or judgment of the
Bankruptcy Court, as entered on the Docket in the Reorganization
Cases, which has not been reversed, stayed, modified or amended, and
as to which (a) the time to appeal or seek certiorari has expired and
no appeal or petition for certiorari has been timely filed, or (b) any
appeal that has been or may be taken or any petition for certiorari
that has been or may be filed has been resolved by the highest court
to which the order or judgment was appealed or from which certiorari
was sought.
53. "Grower Account" shall have the definition given to
it in paragraph VIII K.
54. "Grower Claims" means Allowed Claims against the
Debtors that are entitled to protection under PACA, whether the
holders of such Claims are entitled to lien rights under PACA or not.
55. "Growers" means the holders of Grower Claims.
56. "Hancock" means John Hancock Mutual Life Insurance
Company.
57. "Hancock Cash Payment" shall have the definition given
to it in paragraph IV B 1a.
58. "Hancock Releasees" shall have the definition given
to it in paragraph VIII X.
59. "Instrument" means any share of stock, security,
promissory note or other "instrument," within the meaning of that
term, as defined in section 9105(1)(i) of the UCC.
60. "Intercompany Claims" means any and all claims and
causes of action which any Debtor holds against any other Debtor or
which any Subsidiary holds against any Debtor.
61. "Intercreditor Agreement" means the Intercreditor and
Subordination Agreement dated as of October 31, 1990 between Hancock
and Credit Agricole, as the same may be amended from time to time.
62. "Interest" means the interest of any equity security
holder of SWII, whether or not asserted, as defined in section 101(17)
of the Bankruptcy Code.
63. "Interest Deferral Period" means the months of April,
May, June and July of each year while any balance is owed under the
New Hancock Note or the New Credit Agricole Note.
64. "Invalid Condition" shall have the definition given
to it in paragraph VIII G.
65. "Lender's Condition" shall have the definition given
to it in paragraph VIII G.
66. "LIBOR" means London Interbank Offered Rate determined
in accordance with the New Credit Agricole Credit Agreement.
67. "Local Bankruptcy Rules" means the local rules of the
Bankruptcy Court, as applicable from time to time in the
Reorganization Cases.
68. "Marguleas Rayo Water Rights" means those contract
rights, held by the Marguleas Family Partnership, to receive excess
water and related stock benefits pursuant to agreements with Rayo
Company and Rayo Water Company.
69. "Marguleas Releasees" shall have the definition given
to it in paragraph VIII X.
70. "Minimum Cash Balance" means, as of any date of
determination, an amount, determined in accordance with the New Credit
Agricole Credit Agreement and the New Hancock Credit Agreement,
between $34.69 million and $36 million.
71. "Mr. Marguleas" means Howard P. Marguleas, a holder
of Old Securities.
72. "Net Cash Proceeds" means, for any disposition of any
asset by any Person, the aggregate amount of Cash received by such
Person for such asset after deducting therefrom (a) all legal fees,
finder's fees, brokerage fees, sales commissions and other similar
fees and commissions paid in connection therewith, and (b) other out
of pocket costs incurred in connection therewith. Any proceeds which
are not Cash will become Net Cash Proceeds upon the conversion of such
proceeds to Cash.
73. "Net Overbid" means the amount of any Overbid less the
amount of any cost reimbursement owed to Cadiz under the Plan and less
any portion of such Overbid ordered by the Bankruptcy Court to be paid
to holders of Allowed Claims in Class 1 and Class 2.
74. "New Common Stock" means common stock of Reorganized
Sun World, par value $0.01 per share, which may be issued by
Reorganized Sun World on and after the Effective Date pursuant to the
Plan Implementation Agreement or otherwise.
75. "New Credit Agricole Credit Agreement" means the
Credit Agreement, dated as of a date no later than the Effective Date,
between Reorganized Sun World and Credit Agricole relating to the New
Credit Agricole Note, in substantially the form Filed, with the
consent of Cadiz and Credit Agricole, no later than five (5) Business
Days prior to the commencement of the Confirmation Hearing.
76. "New Credit Agricole Deed of Trust" means,
collectively, the deeds of trust executed by Reorganized Sun World in
favor of Credit Agricole to secure Reorganized Sun World's
indebtedness under the New Credit Agricole Note and which cover the
real property identified on schedules or exhibits to each such deed of
trust, in substantially the form Filed no later than five (5) Business
Days prior to the commencement of the Confirmation Hearing.
77. "New Credit Agricole Documents" means, collectively,
the New Credit Agricole Credit Agreement, the New Credit Agricole Deed
of Trust, the New Credit Agricole Note, and such other documentation
as may be required to be executed and delivered pursuant to the New
Credit Agricole Credit Agreement.
78. "New Credit Agricole Note" means the promissory note
executed by Reorganized Sun World in favor of Credit Agricole to
evidence Reorganized Sun World's indebtedness under the New Credit
Agricole Credit Agreement, in the form provided for therein.
79. "New Hancock Credit Agreement" means the Credit
Agreement, dated as of a date no later than the Effective Date,
between Reorganized Sun World and Hancock relating to the New Hancock
Note, in substantially the form Filed, with the consent of Cadiz and
Hancock, no later than five (5) Business Days prior to the
commencement of the Confirmation Hearing.
80. "New Hancock Deed of Trust" means, collectively, the
deeds of trust executed by Reorganized Sun World in favor of Hancock
to secure Reorganized Sun World's indebtedness under the New Hancock
Note and which cover the real property identified on schedules or
exhibits to each such deed of trust, in substantially the form Filed
no later than five (5) Business Days prior to the commencement of the
Confirmation Hearing.
81. "New Hancock Documents" means, collectively, the New
Hancock Credit Agreement, the New Hancock Deed of Trust, the New
Hancock Note, and such other documentation as may be required to be
executed and delivered pursuant to the New Hancock Credit Agreement.
82. "New Hancock Note" means the promissory note executed
by Reorganized Sun World in favor of Hancock to evidence Reorganized
Sun World's indebtedness under the New Hancock Credit Agreement, in
the form provided for therein.
83. "New Zenith Note" shall have the definition given to
it in paragraph IV B 3.
84. "Old Common Stock" means the common stock of SWII, par
value $1.00 per share, issued and outstanding as of the SWII Petition
Date.
85. "Old Preferred Stock" means the Series I Preferred
Stock of SWII, par value $300.00 per share, issued and outstanding as
of the SWII Petition Date.
86. "Old Securities" means, collectively, the Old Common
Stock and the Old Preferred Stock.
87. "Old Stock Rights" means, collectively, any warrants,
and any other rights, to purchase or otherwise acquire Old Securities,
and any stock appreciation or similar rights relating to Old
Securities, existing prior to the Effective Date. "Old Stock Rights"
do not include any rights arising out of the ownership of Old
Securities.
88. "Order" means an order or judgment of the Bankruptcy
Court as entered on the Docket.
89. "Other Secured Claim" means any Allowed Secured Claim
not classified in Classes 1, 2, 3 or 4A. Other Secured Claims are
classified in Class 4B et seq.
90. "Overbid" shall have the definition given to it in
Article V.
91. "PACA" means the federal Perishable Agricultural
Commodities Act.
92. "PACA Reserve" shall have the definition given to it
in paragraph VIII K.
93. "Person" means any individual, corporation, general
partnership, limited partnership, limited liability partnership,
limited liability company, association, joint stock company, joint
venture, government or political subdivision, official committee
appointed by the United States Trustee, unofficial committee of
creditors or equity holders, or other entity (as defined in the
Bankruptcy Code).
94. "Petition Date" means the date on which each of the
Reorganization Cases was Filed (October 3, 1994, as to SWII and Sun
World, and December 13, 1994, as to Coachella and Sun Desert).
95. "Plan" means this plan of reorganization for the
Debtors in the Reorganization Cases and all exhibits and schedules
annexed hereto or referred to herein, as such may be amended, modified
or supplemented from time to time.
96. "Plan Implementation Agreement" means (i) to the
extent the Buyer purchases Old Securities, an agreement between the
holders of such Old Securities, on the one hand, and the Buyer, on the
other, for the purchase by the Buyer of all of such Old Securities;
and (ii) an agreement between the Debtors, on the one hand, and the
Buyer, on the other, in which the Buyer agrees to purchase all of the
New Common Stock, if New Common Stock is issued pursuant to the Plan.
The Plan Implementation Agreement shall also include the Buyer's
agreement with the Debtors to take the actions required of it to
implement the Plan. The form of Plan Implementation Agreement shall
be Filed not later than five (5) Business Days prior to the
commencement of the Confirmation Hearing.
97. "Plan Release" shall have the definition given to it
in paragraph VIII X.
98. "Plan Releasees" shall have the definition given to
it in paragraph VIII X.
99. "Post-petition Tax Claims" means Administrative Claims
and other Claims by a governmental unit for taxes (and for interest
and/or penalties related to such taxes) for any tax year or period,
all or any portion of which occurs or falls within the period from and
including the Petition Date through and including the Effective Date.
100. "Pre-Identified Assets" means the ranches and other
parcels of real property subject to the New Hancock Deed of Trust and
the New Credit Agricole Deed of Trust, as identified on schedules to
the New Hancock Credit Agreement and the New Credit Agricole Credit
Agreement, which may be sold, under certain circumstances as provided
therein, without the approval of Hancock or Credit Agricole.
101. "Priority Claim" means an Allowed Claim entitled to
priority under sections 507(a)(3) through 507(a)(7) of the Bankruptcy
Code, and includes Priority Tax Claims.
102. "Priority Tax Claim" means an Allowed Claim for an
amount entitled to priority under section 507(a)(7) of the Bankruptcy
Code.
103. "Pro Fee Suspense Fund Account" shall have the
definition given to it in paragraph VIII K.
104. "Pro Rata" means proportionately so that, with respect
to any Class, the ratio of (a) the amount of consideration distributed
on account of a particular Allowed Claim or Allowed Interest to (b)
the amount of the Allowed Claim or Allowed Interest, is the same as
the ratio of (x) the amount of consideration distributed on account of
all Allowed Claims or Allowed Interests of the Class in which the
particular Allowed Claim or Allowed Interest is included to (y) the
aggregate amount of all Allowed Claims or Allowed Interests of that
Class.
105. "Protested Condition" shall have the definition given
to it in paragraph VIII G.
106. "PSA" means the Plan Support Agreement entered into
between Cadiz and the Creditors' Committee in December 1995, as the
same may have been amended from time to time, wherein the Creditors'
Committee agreed to pursue a sale of the Debtors' assets exclusively
with Cadiz and to implement certain overbid procedures.
107. "Real Property Proceeds Accounts" shall have the
definition given to it in paragraph VIII K.
108. "Record Date" means the date fixed by the Bankruptcy
Court as the record date for determining the holders of Claims and
Interests who are entitled to receive distributions under the Plan.
109. "Released Claims" shall have the definition given to
it in paragraph IV B 2a.
110. "Released Matters" shall have the definition given to
it in paragraph VIII X.
111. "Releasees" shall have the definition given to it in
paragraph VIII X.
112. "Reorganization Cases" means all Debtors' cases under
chapter 11 of the Bankruptcy Code.
113. "Reorganized Sun World" means Sun World International,
Inc., a Delaware corporation, as the successor by merger to SWII and
Sun World on and after the Effective Date.
114. "Required Consenting Interest Holders" means Domenick
Bianco, Carl Sam Maggio, Martin Gans and the Tostado Family Trust.
115. "Required Minimum" means the minimum sale prices for
the Pre-identified Assets as set forth in the New Hancock Credit
Agreement and the New Credit Agricole Credit Agreement.
116. "Sale" means the closing of the transaction under the
Plan Implementation Agreement.
117. "Scheduled" means set forth on the Schedules of Asset
and Liabilities.
118. "Schedules of Assets and Liabilities" means the
Schedules of Assets and Liabilities which were Filed by the Debtors
with the Bankruptcy Court, as the same may be amended from time to
time prior to the Effective Date.
119. "Secured Claim" means any Claim that is secured by a
lien on property in which the Estates have an interest or that is
subject to setoff under section 553 of the Bankruptcy Code, to the
extent of the value of the Claim holder's interest in the Estates'
interest in such property or to the extent of the amount subject to
setoff, as applicable, as determined pursuant to section 506(a) of the
Bankruptcy Code.
120. "Securities Claim" means (a) any Claim arising from
rescission of a purchase or sale of Old Securities or for damages
arising from the purchase or sale of Old Securities, or (b) any Claim
for indemnity, reimbursement, or contribution on account of any such
Claim.
121. "Subsidiary" means any directly or indirectly wholly
owned subsidiary of any Debtor, including, without limitation, AAI,
but not including Coachella Growers.
122. "Sun Desert" means Sun Desert, Inc., a Delaware
corporation 100% of the stock of which is owned by SWII, as a debtor
and debtor in possession in its Reorganization Case under the
Bankruptcy Code.
123. "Sun World" means Sun World, Inc., a Delaware
corporation 100% of the stock of which is owned by SWII, as a debtor
and debtor in possession in its Reorganization Case under the
Bankruptcy Code.
124. "SWII" means Sun World International, Inc. a Delaware
corporation, as a debtor and debtor in possession in its
Reorganization Case under the Bankruptcy Code.
125. "UCC" means the California Uniform Commercial Code,
as in effect at any relevant time.
126. "Unsecured Claim" means any Claim that is not an
Administrative Claim, Priority Claim or Secured Claim.
127. "Unsecured Claims Disbursement Account" shall have the
definition given to it in paragraph IV B 8.
128. "Unsecured Claims Reserve Account" shall have the
definition given to it in paragraph IV B 8.
129. "Weyerhaeuser" means The Weyerhaeuser Company.
130. "Weyerhaeuser Order" means the Order Approving (i)
Stipulation Modifying Executory Contract And (ii) Assumption Of
Executory Contract As Modified, entered by the Bankruptcy Court on
November 15, 1995
131. "Zenith" means Zenith Insurance Company.
132. "Zenith Settlement Agreement" means that agreement
among SWII, Cadiz and Zenith resolving the disputes among these
parties relating to the Blythe Ranch and the Debtors' transactions
with Zenith, the form of which must be Filed not later than five (5)
Business Days prior to the commencement of the Confirmation Hearing.
B. INTERPRETATION AND COMPUTATION OF TIME.
1. DEFINED TERMS.
Any term used in the Plan that is not defined in the Plan,
either in Article II (Definitions) or elsewhere, but that is used in
the Bankruptcy Code, the Bankruptcy Rules or the Local Bankruptcy
Rules, has the meaning assigned to that term in the Bankruptcy Code,
the Bankruptcy Rules or the Local Bankruptcy Rules, as the case may
be.
2. RULES OF INTERPRETATION.
For purposes of the Plan: (a) whenever it appears
appropriate from the context, each term, whether stated in the
singular or the plural, shall include both the singular and the
plural; (b) any reference in the Plan to a contract, instrument,
release or other agreement or document being in a particular form or
on particular terms and conditions means that such document shall be
substantially in such form or substantially on such terms and
conditions; provided, however, that any change to such form, terms, or
conditions which is material to a party to such document shall not be
made without such party's consent; (c) any reference in the Plan to an
existing document or exhibit Filed or to be Filed means such document
or exhibit, as it may have been or (to the extent otherwise permitted,
hereafter) may be amended, modified or supplemented from time to time;
(d) unless otherwise specified in a particular reference, all
references in the Plan to paragraphs, Articles and Exhibits are
references to paragraphs, Articles and Exhibits of or to the Plan; (e)
the words "herein," "hereof," "hereto," "hereunder" and others of
similar import refer to the Plan in its entirety rather than to only
a particular portion of the Plan; (f) captions and headings to
Articles and paragraphs are inserted for convenience of reference only
and are not intended to be a part of or to affect the interpretations
of the Plan; (g) the rules of construction set forth in section 102 of
the Bankruptcy Code shall apply; and (h) all exhibits to the Plan are
incorporated into the Plan, and shall be deemed to be included in the
Plan, provided that they are Filed no later than five (5) days prior
to the Confirmation Hearing.
3. TIME PERIODS.
In computing any period of time prescribed or allowed by
the Plan, the provisions of Bankruptcy Rule 9006(a) shall apply.
III.
DESIGNATION OF CLASSES OF CLAIMS AND INTERESTS
The following is a designation of the Classes of Claims and
Interests under the Plan. In accordance with section 1123(a)(1) of
the Bankruptcy Code, Administrative Claims and Priority Tax Claims
have not been classified and are excluded from the following Classes.
A Claim or Interest is classified in a particular Class only to the
extent that the Claim or Interest qualifies within the description of
that Class, and is classified in another Class or Classes to the
extent that any remainder of the Claim or Interest qualifies within
the description of such other Class or Classes. A Claim or Interest
is classified in a particular Class only to the extent that the Claim
or Interest is an Allowed Claim or Allowed Interest in that Class and
has not been paid, released or otherwise satisfied before the
Effective Date; a Claim or Interest which is not an Allowed Claim or
Allowed Interest is not in any Class. A Disputed Claim or Disputed
Interest, to the extent that it subsequently becomes an Allowed Claim
or Allowed Interest, shall be included in the Class for which it would
have qualified had it not been disputed. Notwithstanding anything to
the contrary contained in the Plan, no distribution shall be made on
account of any Claim or Interest which is not an Allowed Claim or an
Allowed Interest.
A. SECURED CLAIMS.
Class 1: Hancock
Class 2: Credit Agricole
Class 3: Zenith
Class 4A: The Allowed Secured Claim of Weyerhaeuser
Classes 4B et seq.: All Allowed Secured Claims that are
not included in Class 1, 2, 3 or 4A, including
without limitation, Claims of lessors under
equipment leases.
B. UNSECURED CLAIMS.
Class 5: Allowed Unsecured Priority Claims that are
specified as having priority in sections
507(a)(3), 507(a)(4), 507(a)(5), or 507(a)(6) of
the Bankruptcy Code.
Class 6: Non-priority Allowed Unsecured Claims against
the Debtors in an amount equal to, reduced to or
less than two hundred fifty dollars ($250.00),
including, without limitation, Allowed Unsecured
Claims arising from the purchase of goods and
services or arising from the rejection of
executory contracts or unexpired leases.
Class 7: Grower Claims.
Class 8: Allowed Unsecured Claims against the Debtors
that are not classified in any other Class,
including, without limitation, Claims arising
from the purchase of goods and services or
arising from the rejection of executory
contracts and unexpired leases.
C. INTERESTS AND CLAIMS RELATING TO INTERESTS.
Class 9: Allowed Interests of holders of Old Preferred
Stock (other than the Allowed Interests of Mr.
Marguleas).
Class 9A: Allowed Interests of Mr. Marguleas arising from
or relating to his Old Preferred Stock.
Class 10: Allowed Interests of holders of Old Common Stock
(other than the Allowed Interests of Mr.
Marguleas).
Class 10A: Allowed Interests of Mr. Marguleas arising
from or relating to his Old Common Stock.
Class 11: Allowed Interests of holders of Old Stock Rights
and all Allowed Claims arising out of any such
Old Stock Rights, including, without limitation,
all Claims arising out of the rejection of Old
Stock Rights.
Class 12: Allowed Securities Claims.
Class 13: Allowed Interests of holders of Sun Desert's
common stock.
Class 14: Sun Desert's membership Interest in Coachella.
Class 15: SWII's Interest in Sun World.
Class 16: Intercompany Claims.
IV.
GENERAL PROVISIONS FOR TREATMENT OF CLAIMS AND INTERESTS
A. UNCLASSIFIED CLAIMS.
1. ADMINISTRATIVE CLAIMS.
a. GENERAL.
Subject to the bar date provisions herein, Reorganized Sun
World shall pay to each holder of an Allowed Administrative Claim, on
account of its Administrative Claim and in full satisfaction thereof,
Cash equal to the allowed amount of such Administrative Claim, unless
the holder agrees or shall have agreed to other treatment of such
Claim. Payment on an Administrative Claim will not be made until such
payment would have become due in the ordinary course of each Debtor's
business or under the terms of the Claim in the absence of the
Reorganization Cases.
b. PAYMENT OF STATUTORY FEES.
On or before the Effective Date, all fees payable pursuant
to 28 U.S.C. section 1930, as determined by the Bankruptcy Court at the
hearing on Confirmation, shall be paid in Cash equal to the amount of
such Administrative Claim.
c. BAR DATE FOR ADMINISTRATIVE CLAIMS.
(1) GENERAL PROVISIONS.
Except as provided below in paragraphs IV A 1c(3) and IV A
1c(4), respectively, for (i) non-tax liabilities incurred in the
ordinary course of business by the Debtors in Possession and (ii)
Post-petition Tax Claims, requests for payment of Administrative
Claims must be Filed and served on counsel for the Debtors, the
Creditors' Committee and the Equity Committee and Reorganized Sun
World no later than (x) sixty (60) days after the Effective Date, or
(y) such later date, if any, as the Bankruptcy Court shall order upon
application made prior to the end of such 60-day period. Holders of
Administrative Claims (including, without limitation, professionals
requesting compensation or reimbursement of expenses and the holders
of any Claims for federal, state or local taxes) that are required to
File a request for payment of such Claims and that do not File such
requests by the applicable bar date shall be forever barred from
asserting such Claims against any of the Debtors or Reorganized Sun
World, or any of their respective properties.
(2) PROFESSIONALS.
All professionals or other Persons requesting compensation
or reimbursement of expenses pursuant to any of sections 327, 328,
330, 331, 503(b) and 1103 of the Bankruptcy Code for services rendered
on or before the Effective Date (including, without limitation, any
compensation requested by any professional or any other Person for
making a substantial contribution in the Reorganization Cases) shall
File and serve on Reorganized Sun World an application for final
allowance of compensation and reimbursement of expenses no later than
(i) sixty (60) days after the Effective Date, or (ii) such later date
as the Bankruptcy Court shall order upon application made prior to the
end of such 60-day period. Objections to applications of
professionals for compensation or reimbursement of expenses must be
Filed and served on Reorganized Sun World and the professionals to
whose application the objections are addressed on or before the later
of (x) ninety (90) days after the Effective Date and (y) thirty (30)
days after such date as the Bankruptcy Court shall establish as the
bar date for such applications. Any professional fees and
reimbursements or expenses incurred by Reorganized Sun World
subsequent to the Effective Date may be paid by Reorganized Sun World
without application to the Bankruptcy Court.
(3) ORDINARY COURSE LIABILITIES.
Holders of Administrative Claims based on liabilities
incurred in the ordinary course of the Debtors' business (other than
Claims of governmental units for taxes or Claims and/or penalties
related to such taxes) shall not be required to File any request for
payment of such Claims. Such Administrative Claims shall be assumed
and paid by Reorganized Sun World pursuant to the terms and conditions
of the particular transaction giving rise to such Administrative
Claim, without any further action by the holders of such Claims.
(4) TAX CLAIMS.
All requests for payment of Post-petition Tax Claims, for
which no bar date has otherwise been previously established, must be
Filed on or before the later of (i) sixty (60) days following the
Effective Date; and (ii) 120 days following the filing of the tax
return for such taxes for such tax year or period with the applicable
governmental unit. Any holder of any Post-petition Tax Claim that is
required to File a request for payment of such taxes and that does not
File such a Claim by the applicable bar date shall be forever barred
from asserting any such Post-petition Tax Claim against any of the
Debtors, Reorganized Sun World, or any of their respective properties,
whether any such Post-petition Tax Claim is deemed to arise prior to,
on, or subsequent to, the Effective Date.
2. TREATMENT OF PRIORITY TAX CLAIMS.
Except as otherwise agreed to by Reorganized Sun World and
the applicable taxing agency, Reorganized Sun World shall pay to each
holder of an Allowed Priority Tax Claim deferred Cash payments, over
a period not exceeding six years from the date of assessment of such
Claim, in an aggregate amount equal to the amount of such Allowed
Priority Tax Claim, plus interest from the Effective Date on the
unpaid portion of such Allowed Priority Tax Claim (without penalty of
any kind) at the rate prescribed below. Payment of the amount of each
such Allowed Priority Tax Claim shall be made in equal semiannual
installments payable on March 31 and September 30, with the first
installment due on the first March 31 or September 30 after the latest
of: (a) the Effective Date, (b) 30 days after the date on which an
Order allowing such Priority Tax Claim becomes a Final Order, and (c)
such other time or times as may be agreed to by the holder of such
Claim and Reorganized Sun World. Each installment shall include
interest on the unpaid portion of such Allowed Priority Tax Claim,
without penalty of any kind, at the statutory rate of interest
provided for such taxes under applicable nonbankruptcy law; provided,
however, that Reorganized Sun World shall have the right to pay any
Allowed Priority Tax Claim, or any remaining balance of such Claim, in
full, at any time on or after the Effective Date, without premium or
penalty of any kind.
B. TREATMENT OF CLAIMS.
1. CLASS 1 (HANCOCK).
Class 1 consists of the Claims of Hancock. Hancock is
impaired under this Plan. The Debtors intend to recognize Hancock's
Claims as fully secured for purposes of this Plan. On the Effective
Date, Reorganized Sun World and Hancock shall execute or shall have
previously executed the New Hancock Credit Agreement, the New Hancock
Deed of Trust, the New Hancock Note and the other New Hancock
Documents. Pursuant to such documents, the Allowed Secured Claim of
Hancock shall be satisfied as follows:
a. PAYMENTS ON THE EFFECTIVE DATE
On or before the Effective Date, the Buyer shall pay
Hancock $2,000,000 in Cash (the "Hancock Cash Payment") which shall be
applied to the original principal amount of the New Hancock Note.
Additionally, as of the Effective Date, Hancock shall receive in Cash
any adequate protection payments owed to it in the Reorganization
Cases at that time remaining unpaid.
b. TERMS OF THE NEW HANCOCK NOTE
Hancock shall receive the New Hancock Note reflecting a
principal indebtedness of approximately $95,000,000 (as of June 30,
1996), but which in any event shall be in an amount equal to the full
amount of Hancock's Claims, including outstanding principal, fees,
expenses and interest (calculated at 12.6% per annum from the date the
Debtors defaulted on their pre-petition indebtedness to Hancock
through the Effective Date) incurred during the Reorganization Cases
less adequate protection payments paid during the Reorganization Cases
and the amounts, if any, held in the Real Property Proceeds Account to
the extent paid to Hancock as set forth in paragraph VIII K of the
Plan. The Hancock Cash Payment shall be used to reduce the principal
amount of the New Hancock Note. Interest on the New Hancock Note
shall accrue at a non-default rate of 10.6% per annum and a default
rate equal to the greater of (i) 12.6% per annum and (ii) 400 points
over Credit Agricole's prime rate. Accrued interest shall be payable
monthly, except that for so long as no default or event of default
exists under the New Hancock Documents, accrued interest which would
otherwise be payable during the Interest Deferral Period of each year
shall be payable in two equal installments on August 31 and September
30 of each year. Interest so deferred shall earn interest, compounded
monthly, at the rate applicable under the New Hancock Note, from the
date it otherwise would have been payable until paid. Principal under
the New Hancock Note, less the Hancock Cash Payment, shall be
amortized prior to the maturity of the New Hancock Note as follows:
(i) during each of the first three years after the Effective Date,
five percent (5%) of the initial principal amount of the New Hancock
Note (reduced as described above) shall be payable annually in three
equal installments payable on March 31, August 31 and December 31 of
each year, commencing with the first such date to occur following the
Effective Date; (ii) during each of the fourth through tenth years
after the Effective Date, seven and one half percent (7.5%) of the
initial principal amount of the New Hancock Note (reduced as described
above) shall be payable annually in three equal installments payable
on the same dates; and (iii) the balance of all unpaid principal shall
be repaid on the tenth anniversary of the Effective Date.
c. COLLATERAL SECURING THE NEW HANCOCK NOTE
The New Hancock Note shall be secured by all of the real
and personal property of Reorganized Sun World which was Hancock's
pre-petition collateral to the extent not disposed of as of the
Effective Date free of Hancock's liens, including, without limitation,
a first lien on the keyman life insurance policies maintained by the
Debtors on the life of Mr. Marguleas and a pledge of all of the
outstanding shares of and guarantees by certain of the Subsidiaries,
but not including Fairchild Acres. In addition, Reorganized Sun
World's indebtedness under the New Hancock Note shall be secured by
(i) a first lien on the Marguleas Rayo Water Rights, (ii) a lien on
Reorganized Sun World's undivided fifty-percent (50%) interest in
Blythe Ranch which is not encumbered in favor of Zenith, which lien
shall be immediately junior to the lien granted to Credit Agricole on
the Debtors' interest in Blythe Ranch and (iii) to the extent Hancock
has a pre-petition lien on the stock of any Subsidiary, a lien on the
otherwise unencumbered assets of such Subsidiary. Except as otherwise
expressly set forth herein, Hancock's security interests on account of
the New Hancock Note shall be of the same priority as Hancock's prepetition
security interests. In addition, Hancock shall have (i) a
first priority lien on any real property, in which the Debtors
currently hold a leasehold interest, if and when Reorganized Sun World
obtains fee title to such real property and (ii) a first priority lien
on any personal property that would have been subject to Hancock's
pre-petition liens had the Debtors obtained title to such property
prior to the relevant Petition Date. However, the New Hancock Note
shall not be secured by Fairchild Acres, and Hancock's pre-petition
lien shall be terminated with respect to Fairchild Acres as of the
Effective Date.
The New Hancock Documents shall contain provisions,
including affirmative and negative covenants with respect to, among
other matters, the operation and preservation of Hancock's collateral.
d. SALE OF CERTAIN COLLATERAL
All post-Effective Date sales of collateral on which
Hancock has a first lien shall be subject to the prior written
approval of Hancock, except for Cash sales of the Pre-identified
Assets for no less than the Required Minimums. Whenever a PreIdentified
Asset is sold, Hancock shall receive the greater of (i) the
Net Cash Proceeds thereof and (ii) ninety-five percent (95%) of the
relevant Required Minimum. All Cash from the sale of Pre-Identified
Assets received by Hancock shall be applied to unpaid principal under
the New Hancock Note in the inverse order of maturity thereof, except
that if such Cash is received at a time when no default has occurred
with respect to certain payments due under the New Hancock Note, or,
if such a default has occurred, the overdue payment(s) have been made,
all Cash paid to Hancock with respect to sales of the Pre-Identified
Assets, up to a total of $30,000,000, on or before the third
anniversary of the Effective Date shall be applied against principal
fifty percent (50%) in the inverse order of maturity thereof and fifty
percent (50%) in the order of principal payments as they become due
(but with no change to the principal amortization schedule). For
purposes of the Plan, a Pre-Identified Asset shall be deemed to have
been sold on or before the third anniversary of the Effective Date if
(1) the sale closes on or before such date, or (2) a contract for the
sale of such Pre-Identified Asset has been executed and delivered, and
an escrow has been opened, on or before such date, and such sale
closes on or before the date that is six months after the date on
which escrow was opened.
If, as of the third anniversary of the Effective Date,
Hancock has not received at least $25,000,000 in principal payments of
Cash from sales of Pre-Identified Assets, Buyer shall pay to Hancock
$2,000,000 to be applied against principal installments due under the
New Hancock Note in the inverse order of their maturity (with no
change in the principal amortization schedules).
e. RELEASE OF HANCOCK
Hancock shall be entitled to receive a release of all
Causes of Action which the Debtors hold, and a mutual release of all
claims and causes of action relating to the Released Matters which
other Plan Releasees hold, as set forth in paragraph VIII X.
f. EXECUTION OF DOCUMENTS
The forms of the New Hancock Documents must be agreed upon
by Cadiz and Hancock.
2. CLASS 2 (CREDIT AGRICOLE).
Class 2 consists of the Claims of Credit Agricole. Credit
Agricole is impaired under this Plan. The Debtors intend to recognize
Credit Agricole's Claims as fully secured for the purposes of this
Plan. On the Effective Date, Reorganized Sun World and Credit
Agricole shall execute the New Credit Agricole Credit Agreement, the
New Credit Agricole Deed of Trust, the New Credit Agricole Note and
the other New Credit Agricole Documents. Pursuant to such documents,
the Allowed Secured Claim of Credit Agricole shall receive the
following treatment.
a. PAYMENTS ON THE EFFECTIVE DATE
(1) On the Effective Date, the Buyer shall pay
Credit Agricole $1,500,000 in Cash (the "Credit Agricole Cash
Payment"). The Credit Agricole Cash Payment shall be applied to
reduce the original principal amount of the New Credit Agricole Note.
(2) On the Effective Date, the Buyer shall pay
to Credit Agricole an additional $2,000,000 in Cash, in consideration
of the release by Credit Agricole of its security interest in Causes
of Action being released by the Debtors ("Released Claims"), but which
in any event shall not include those against Ernst & Young (the "Ernst
& Young Causes of Action"). Credit Agricole shall reduce the original
principal amount of the New Credit Agricole Note, dollar for dollar,
upon receipt of such $2,000,000 in Cash.
b. TERMS OF THE NEW CREDIT AGRICOLE NOTE
Credit Agricole shall receive the New Credit Agricole Note
reflecting a principal indebtedness of approximately $58,000,000 (as
of June 30, 1996), but in any event in an amount equal to the full
amount of Credit Agricole's Claims including outstanding principal,
fees and expenses incurred during the Reorganization Cases, and
interest at the default rate provided in Credit Agricole's prepetition
loan documentation from the date of Debtors' default
thereunder, less adequate protection payments paid during the
Reorganization Cases and the amounts, if any, held in the Real
Property Proceeds Account to the extent paid to Credit Agricole as set
forth in paragraph VIII K of the Plan. The Credit Agricole Cash
Payment and any Cash payment in respect of Credit Agricole's release
of its security interest in the Released Claims shall be used to
reduce the original principal amount of the New Credit Agricole Note.
The New Credit Agricole Note shall be due and payable in full on the
tenth anniversary of the Effective Date.
Principal shall be amortized prior to maturity as follows:
(i) during each of the first three years after the Effective Date,
five percent (5%) of the original principal amount of the New Credit
Agricole Note (reduced as described above) shall be payable annually,
in three equal installments, payable on the last Business Day of
March, August and December of each year, commencing with the first
such date to occur following the Effective Date; and (ii) during each
of the fourth through tenth years after the Effective Date, seven and
one half percent (7.5%) of the original principal amount of the New
Credit Agricole Note (reduced as described above) shall be payable
annually, in three equal installments, payable on the same dates.
Provided that no default or event of default exists,
interest under the New Credit Agricole Note shall be payable at an
annual rate equal to LIBOR plus 300 basis points, calculated on the
basis of a year of 360 days and for the actual number of days elapsed.
A single LIBOR interest period, as set forth in the New Credit
Agricole Documents and selected by Reorganized Sun World, shall apply
to the entire outstanding principal balance under the New Credit
Agricole Note. Interest shall be payable monthly in arrears on the
last Business Day of each calendar month, commencing with the first
such date after the Effective Date, except that, provided no default
or event of default exists under the New Credit Agricole Documents,
accrued interest that would otherwise be payable during the Interest
Deferral Period of any year shall be payable (i) one-half on August 31
of that year and (ii) one-half on September 30 of that year. Interest
so deferred shall earn interest, compounded monthly, at the rate
applicable under the New Credit Agricole Note, from the date it would
otherwise have been payable until the date it is actually paid. Upon
the occurrence of any default, the New Credit Agricole Note shall bear
interest at a per annum rate equal to the higher of (A) 12.6% and (B)
Credit Agricole's prime rate plus 400 basis points.
c. COLLATERAL SECURING THE NEW CREDIT AGRICOLE NOTE
The New Credit Agricole Note shall be secured by (i)
substantially the same collateral which secured its pre-petition
Claims against the Debtors (to the extent that such collateral has not
been disposed of prior to the Effective Date free of Credit Agricole's
liens but not including Fairchild Acres); (ii) all other assets of
Reorganized Sun World and its Subsidiaries (including former Debtors,
if any) including, without limitation, (A) a lien on the Marguleas
Rayo Water Rights that is immediately junior to the lien thereon
granted to Hancock, and (B) a first lien upon Reorganized Sun World's
undivided fifty percent (50%) interest in the Blythe Ranch which is
not encumbered in favor of Zenith; and (iii) a pledge by Cadiz of all
of the capital stock of Reorganized Sun World; provided, however,
that, effective as of the Effective Date, Credit Agricole shall
release all of its security interests in the Released Claims. Except
as otherwise expressly set forth herein, Credit Agricole's security
interests on account of the New Credit Agricole Note shall be at the
same priority as Credit Agricole's pre-petition security interests.
However, the New Credit Agricole Note shall not be secured by
Fairchild Acres, and Credit Agricole's pre-petition lien shall be
terminated with respect to Fairchild Acres as of the Effective Date.
The New Credit Agricole Documents shall contain provisions relating to
the prosecution and settlement by Reorganized Sun World of the Ernst
& Young Causes of Action consistent with Credit Agricole's retention
of its security interest in those Causes of Action and in the proceeds
thereof, including, without limitation, provisions granting Credit
Agricole the right to approve or disapprove of any settlement of such
Causes of Action.
The New Credit Agricole Documents shall contain provisions,
including affirmative and negative covenants, relating to the
protection of Credit Agricole's interests.
d. SALE OF CERTAIN COLLATERAL
Sales of Pre-Identified Assets shall be permitted on the
conditions described above with respect to the New Hancock Documents
and as provided in the New Credit Agricole Documents.
If, as of the third anniversary of the Effective Date,
Hancock has not received at least $25,000,000 in principal payments as
Net Cash Proceeds of sales of Pre-Identified Assets, Buyer shall pay
to Credit Agricole, $2,000,000 in Cash to be applied against principal
installments due under the New Credit Agricole Note in the inverse
order of their maturity.
e. APPLICATION OF EXCESS CASH; MAINTENANCE OF A
MINIMUM CASH BALANCE
"Excess Cash," as defined in the New Credit Agricole
Documents, greater than that amount required to maintain the Minimum
Cash Balance, at December 31 of each year, shall be paid to Credit
Agricole on the fifth succeeding Business Day and applied to the
principal due under the New Credit Agricole Note (i) fifty percent
(50%) to the payment of the installments of principal due thereunder
in the order of their maturity and (ii) fifty percent (50%) to the
payment of installments of principal due thereunder in the inverse
order of their maturity.
The Minimum Cash Balance shall be adjusted annually
pursuant to a schedule attached to the New Credit Agricole Documents.
These adjustments include specified decreases in the Minimum Cash
Balance resulting from the sale of Pre-Identified Assets.
f. RELEASE OF CREDIT AGRICOLE
Credit Agricole shall be entitled to receive a release of
all Causes of Action which the Debtors hold, and a mutual release of
all claims and causes of action relating to the Released Matters which
other Plan Releasees hold, as set forth in paragraph VIII X.
g. EXECUTION OF DOCUMENTS
The Forms of the New Credit Agricole Documents must be
agreed upon by Cadiz and Credit Agricole.
3. CLASS 3 (ZENITH).
Class 3 consists of the Secured Claims and Unsecured
Claims, if any, of Zenith. Zenith is impaired under this Plan. The
Plan represents a compromise of Zenith's Claims relating to, and
ownership interests in, the Blythe Ranch. The treatment of Zenith's
Claims shall be as follows: Zenith shall be treated as a lender with
an Allowed Secured Claim in the original principal amount of two
million five hundred seventy-five thousand dollars ($2,575,000)
secured by a first priority deed of trust on an undivided one-half
interest in the Blythe Ranch. The Zenith secured claim shall be
evidenced by a promissory note (the "New Zenith Note"). On the
Effective Date, the Buyer, if it is Cadiz, shall issue eighty thousand
(80,000) shares of Cadiz Common Stock to Zenith. In addition,
Reorganized Sun World shall pay Zenith Cash in the amount of two
hundred fifty thousand dollars ($250,000) and shall issue the New
Zenith Note to Zenith. Payments of principal under the New Zenith
note will be based on a ten year straight-line amortization. Interest
under the New Zenith Note shall accrue at seven and seventy-five one
hundredths percent (7.75%) per annum. The New Zenith Note may be
prepaid in whole or in part at any time without penalty. No later
than three years after the Effective Date, Reorganized Sun World or
Cadiz shall be obligated to provide Zenith with additional collateral
to the extent necessary to achieve a loan to value ratio acceptable to
Zenith and Cadiz. Zenith shall be entitled to a release as set forth
in paragraph VIII X 8. In exchange for the treatment described above,
Zenith shall withdraw all proofs of claim it Filed against any Debtor
and shall grant a release to the Plan Releasees as described in
paragraph VIII X and the Zenith Settlement Agreement.
4A. CLASS 4A (WEYERHAEUSER).
Weyerhaeuser's Allowed Secured Claim in the amount of $2.5
million, as fixed by the Weyerhaeuser Order, will be placed in Class
4A and shall be treated in accordance with the terms of the
Weyerhaeuser Order. The Allowed Class 4A Claim shall be paid in full
through fully amortizing payments in the amount of $103,797.57 on the
first Business Day of every month commencing with the month following
the Effective Date and continuing through March 1, 1998, when the
unpaid balance of Weyerhaeuser's Allowed Secured Claim is due and
payable in full. Payments on account of the Class 4A Allowed Claim
shall include interest payable monthly in arrears on the principal
amount of such Claim at the rate of ten percent (10%) per annum from
the Effective Date. Therefore, Class 4A is unimpaired and will not be
entitled to vote on the Plan. Weyerhaeuser's Allowed Unsecured Claim
shall be classified in Class 8 and treated on a Pro Rata basis with
the other Allowed Unsecured Claims in such Class.
4B. CLASSES 4B ET SEQ. (OTHER SECURED CLAIMS).
All Secured Claims that are not included in any of Classes
1, 2, 3 and 4A (defined in the Plan as the Other Secured Claims) shall
be classified in Classes 4B et seq. These classes will be further
divided into subclasses designated by letters of the alphabet (Class
4B, Class 4C, and so on), so that each holder of an Other Secured
Claim is in a Class by itself, except to the extent that there are
Other Secured Claims that are substantially similar to each other and
may be included within a single Class. The Debtors shall File a
schedule of each Other Secured Claim on or before twenty (20) days
prior to the commencement of the Confirmation Hearing. Each Allowed
Other Secured Claim will be treated as follows: Either (a) the Plan
shall leave unaltered the legal, equitable and contractual rights to
which such Claim entitles the holder; (b) (i) the Debtors shall cure
any default with respect to such Claim that occurred before or after
the relevant Petition Date, (ii) the maturity of such Claim shall be
reinstated as such maturity existed before any such default, (iii) the
holder of such Claim shall be compensated for any damages incurred as
a result of any reasonable reliance by the holder on any right to
accelerate its Claim, and (iv) the legal, equitable, and contractual
rights of such holder will not otherwise be altered; (c) such Claim
shall receive such other treatment as the holder shall consent to; or
(d) all of the collateral for such Claim shall be surrendered by the
Debtors to the holder of such Claim on the Effective Date or as soon
as practicable thereafter. The holder of each Allowed Other Secured
Claim which is treated as set forth in clause (a), (b), (c) or (d) of
this paragraph will be unimpaired and will not be entitled to vote for
or against the Plan.
5. CLASS 5 (PRIORITY UNSECURED CLAIMS).
Class 5 consists of Allowed Unsecured Claims against the
Debtors entitled to priority in accordance with 11 U.S.C. 507(a)
(other than Priority Tax Claims), including, without limitation, (a)
Unsecured Claims for accrued employee compensation earned within 90
days prior to the relevant Petition Date, to the extent of $2,000 per
employee in the cases of SWII and Sun World and $4,000 per employee in
the cases of Sun Desert and Coachella (less any post-petition payments
made on account of any such Claim prior to the Effective Date); and
(b) contributions to employee benefit plans arising from services
rendered within 180 days prior to the relevant Petition Date, but
only, with respect to any such plan, to the extent of an amount equal
to (i) the number of employees covered by such plan multiplied by
$2,000 in the cases of SWII and Sun World and $4,000 in the cases of
Sun Desert and Coachella, less (ii) the sum of (A) the aggregate
amount paid to such employees under section 507(a)(3) of the
Bankruptcy Code, plus (B) the aggregate amount paid by the estate on
behalf of such employees to any other employee benefit plan. Class 5
is not impaired and therefore is not entitled to vote to accept or
reject the Plan. Reorganized Sun World shall pay, in full in Cash,
each Allowed Class 5 Claim that has not been paid prior to the
Effective Date, on the later of (x) the Effective Date, or as soon as
practicable thereafter, and (y) the date such payment would have
become due in the ordinary course of Debtors' business or under the
terms of the Claim in the absence of the Reorganization Cases.
6. CLASS 6 (UNSECURED NON-PRIORITY CLAIMS OF $250.00 OR
LESS).
Class 6 consists of Non-Priority Allowed Unsecured Claims
against the Debtors in an amount equal to, reduced to, or less than,
two hundred fifty dollars ($250.00). The Allowed Unsecured Claims in
Class 6 shall be treated as follows: On the Effective Date or as soon
as practicable thereafter, the Buyer shall cause to be paid to each
member of this Class, from funds provided by the Buyer, Cash in the
amount of one hundred percent (100%) of its Claim in full and final
satisfaction of such Claim. This Class is unimpaired and will not be
entitled to vote on the Plan. Holders of Allowed Unsecured Claims in
excess of $250 who elect to reduce their Claim to $250 must check the
appropriate box on the ballot. Failure to so timely elect will cause
a Claim to be treated as set forth in Class 8.
7. CLASS 7 (GROWER CLAIMS).
Class 7 consists of Allowed Claims against the Debtors that
constitute Grower Claims. On the Effective Date or as soon as
practicable thereafter, each holder of a Grower Claim in this Class,
which has not previously been paid in full, shall receive Cash in the
amount of one hundred percent (100%) of its Claim in full and final
satisfaction of such Claim. This Class is unimpaired and will not be
entitled to vote on the Plan.
8. CLASS 8 (UNSECURED NON-PRIORITY CLAIMS IN EXCESS OF
$250.00).
Class 8 consists of Allowed Unsecured Claims against the
Debtors that are not classified in any other Class, including, without
limitation, Claims of trade creditors for goods and services provided
prior to the Petition Date and Claims arising from the rejection of
executory contracts or unexpired leases. On the Effective Date or as
soon as practicable thereafter, the Buyer shall cause to be paid to
each holder of an Allowed Class 8 Claim, from funds provided by the
Buyer, Cash in an amount equal to sixty percent (60%) of such holder's
Allowed Class 8 Claim in full and final satisfaction of such Claim.
Prior to or on the Effective Date, the Buyer shall deposit $15,000,000
into an interest-bearing trust account held by the Buyer for the sole
purpose of providing funds for payment of Allowed Class 8 Claims (the
"Unsecured Claims Reserve Account "). If the Cash payments to be made
to holders of Allowed Class 8 Claims exceed the initial $15,000,000
provided by the Buyer, the Buyer shall deposit additional funds into
the Unsecured Claims Reserve Account as and when required, and in an
amount sufficient, to pay all Allowed Class 8 Claims. Upon
determination that a Class 8 Claim is Allowed, the Buyer shall
promptly transfer funds sufficient to pay such Claim from the
Unsecured Claims Reserve Account into a trust account held by
Reorganized Sun World for the sole purpose of making payments to
satisfy Allowed Class 8 Claims (the "Unsecured Claims Disbursement
Account "). Reorganized Sun World shall then make payments to the
holders of such Allowed Class 8 Claims from the funds in the Unsecured
Claims Disbursement Account. If at any time the undisbursed balance
of funds deposited by the Buyer into the Unsecured Claims Reserve
Account exceeds the maximum unpaid amount payable on account of Class
8 Claims, including all Disputed Claims at the full amount asserted,
the Buyer may withdraw such excess funds from the Unsecured Claims
Reserve Account, plus the pro rata portion of interest earned on the
funds in such account.
Both the Unsecured Claims Reserve Account and the Unsecured
Claims Disbursement Account shall be free and clear of all liens and
security interests. Holders of Allowed Class 8 Claims shall have
recourse to Reorganized Sun World for payments required by the Plan on
account of their Claims. Reorganized Sun World shall have recourse to
the Buyer for the full amount payable under the Plan on account of all
Allowed Class 8 Claims. Credit Agricole, for the benefit of
Reorganized Sun World in the event that Reorganized Sun World provides
funds to the Unsecured Claims Disbursement Account or otherwise makes
payment on account of Allowed Class 8 Claims, shall have recourse to
the Buyer for the amount provided or paid. Each holder of a Class 8
Claim shall have recourse to the Buyer for the full amount payable
under the Plan on account of such holder's Claim.
Holders of Allowed Class 8 Claims shall not be entitled to
receive in respect of their Claims either (x) interest which would
have accrued on or after the relevant Petition Date but for the
commencement of the Reorganization Cases or (y) post-Confirmation
interest, except as set forth in paragraph VIII R 2 below.
All payments to holders of Allowed Class 8 Claims are
subject to the limitation that no such holder will receive under the
Plan, in respect of such holder's Allowed Class 8 Claim, an aggregate
amount in excess of the Allowed amount of such Claim.
C. INTERESTS.
1. CLASS 9 consists of the Interests of holders of Old
Preferred Stock of SWII other than Mr. Marguleas. Class 9 is impaired
under the Plan. The holders of Allowed Class 9 Interests shall
receive a share of the Equity Cash Payment as set forth in paragraph
IV C 5 below. In the event Class 9 does not accept the Plan,
then (x) no holder of any Interest junior to the Allowed Class 9
Interests and Allowed Class 9A Interests shall receive or retain any
interest or property under the Plan, and (y) the holders of Allowed
Class 9 Interests and Allowed Class 9A Interests shall not receive or
retain any interest or property under the Plan until the holders of
Allowed Class 8 Claims receive property equal in value to the full
Allowed Amount of their Claims.
2. CLASS 9A consists of the Interests of Mr. Marguleas
resulting from his ownership of Old Preferred Stock. Class 9A is
impaired under the Plan. Class 9A shall be treated as set forth in
paragraph IV C 6 below. For purposes of this Plan, Class 9A has equal
priority with Class 9.
3. CLASS 10 consists of the Interests of holders of Old
Common Stock in SWII other than Mr. Marguleas. Class 10 is impaired
under the Plan. The holders of Allowed Interests in Class 10 shall
receive a share of the Equity Cash Payment as set forth in paragraph
IV C 5 below. In the event Class 10 does not accept the Plan,
then (x) no holder of any Interest junior to the Allowed Class 10
Interests and Class 10A Interest shall receive or retain any interest
or property under the Plan, and (y) the holders of Allowed Class 10
Interests and Allowed Class 10A Interests shall not receive or retain
any interest or property under the Plan until the holders of Allowed
Class 8 Claims, Allowed Class 9 Interests and the Allowed Class 9A
Interests receive property equal in value to the full Allowed Amount
of their Claims and the liquidation preference and any lawful and
valid accrued and unpaid dividends on such Interests, respectively.
4. CLASS 10A consists of the Interests of Mr. Marguleas
resulting from his ownership of Old Common Stock. Class 10A is
impaired under the Plan. Class 10A shall be treated as set forth in
paragraph IV C 6 below. For purposes of this Plan, Class 10A has
equal priority with Class 10.
5. COMPROMISE WITH MINORITY SHAREHOLDERS. The Plan
constitutes a compromise of (i) all Causes of Action which the Debtors
have against holders of Allowed Class 9 Interests and Allowed Class 10
Interests, (ii) all Interests of holders of Allowed Class 9 and
Allowed Class 10 Interests and (iii) the claims and causes of action
held or asserted by the Required Consenting Interest Holders against
Plan Releasees relating to the Released Matters, except for those
claims and causes of action set forth in Exhibit "A" which are
preserved by the applicable Required Consenting Interest Holder and
are not deemed compromised under the Plan. The claims and causes of
action of holders of Allowed Class 9 and Allowed Class 10 Interests,
other than the Required Consenting Interest Holders, against Plan
Releasees relating to the Released Matters shall be released to the
extent such holders enter into releases as set forth in paragraph VIII
X. Under the Plan, on the Effective Date, the Buyer shall pay, or
shall provide funds to Reorganized Sun World with which it will pay on
the Effective Date, a total of $3,000,000 in Cash (the "Equity Cash
Payment") to the holders of Allowed Interests in Class 9 and Class 10.
Each of Class 9 and Class 10 shall receive one-half, or $1,500,000, of
the Equity Cash Payment which shall be shared Pro Rata among the
members of each such Class.
Each holder of an Allowed Class 9 Interest or an Allowed
Class 10 Interest who accepts the Plan shall be entitled to receive a
release of all Causes of Action which the Debtors have, or may have,
against them and any of their related or affiliated entities, and a
mutual release of all claims and causes of action relating to the
Released Matters which the Plan Releasees have, or may have, against
them and any of their related or affiliated entities, except for the
claims and causes of action set forth on Exhibit "A", as set forth and
subject to the limitations in paragraph VIII X.
6. COMPROMISE WITH MR. MARGULEAS. The Plan constitutes
a compromise of all Causes of Action which the Debtors have against
Mr. Marguleas and related entities controlled by him and of all Claims
and Interests which Mr. Marguleas and related entities controlled by
him have in or against the Debtors. Under the Plan, Classes 9A and
10A shall receive the following cumulative treatment:
a. Prior to the Effective Date, Mr. Marguleas shall
cause the Marguleas Family Partnership to grant to Cadiz an
option to purchase the Marguleas Rayo Water Rights for one
million five hundred thousand dollars ($1,500,000) and shall have
received Cash in the amount of five hundred thousand dollars
($500,000 dollars) in exchange for such option, which amount
shall be applied against the purchase price. The remainder of
the purchase price for the Marguleas Rayo Water Rights shall be
payable in one hundred eighty-one thousand, eight hundred
eighteen (181,818) shares of Cadiz common stock. If Cadiz
exercises its option and purchases the Marguleas Rayo Water
Rights, Cadiz shall immediately contribute the Marguleas Rayo
Water Rights to Reorganized Sun World.
b. Mr. Marguleas shall receive eight hundred
twenty-nine thousand ninety (829,090) shares of Cadiz common
stock.
c. Mr. Marguleas shall enter into an employment
agreement with Reorganized Sun World for a period of three (3)
years following the Effective Date, under which Mr. Marguleas
will be entitled to receive compensation in the amount of
$175,000 per year for services described in said agreement.
d. Mr. Marguleas and all entities he controls
(including, without limitation, Fairchild Acres) shall withdraw
all proofs of claim they Filed against any of the Debtors.
e. Mr. Marguleas and the entities he controls which
are in the business of growing crops as of the Effective Date
shall enter into marketing agreements with Reorganized Sun World
for a period of five (5) years following the Effective Date.
f. If Mr. Marguleas accepts the Plan, he and all
entities he controls as of the Effective Date shall be entitled
to receive (i) a release of all Causes of Action which the
Debtors hold, subject to the vesting requirements set forth in
paragraph VIII X 7, and (ii) a mutual release of all claims and
causes of action relating to the Released Matters which other
Plan Releasees hold, except as set forth on Exhibit "A", as set
forth, and subject to the limitations, in paragraph VIII X;
provided, however, pursuant to this Plan, Mr. Marguleas shall not
be deemed to release any claims or causes of action set forth on
Exhibit "A".
7. CLASS 11 consists of Interests of holders of Old Stock
Rights and all Claims arising out of any such Old Stock Rights,
including, without limitation, all Claims arising out of the rejection
of Old Stock Rights. The holders of Allowed Class 11 Interests, if
any, shall not receive any interests or property on account of their
Interests. The Debtors do not believe that any Class 11 Interests
exist.
8. CLASS 12 consists of Securities Claims. The holders
of Allowed Class 11 Interests, if any, shall not receive any interests
or property on account of their Interests. The Debtors do not believe
that any Class 12 Interests exist.
D. OTHER INTERESTS AND INTERCOMPANY CLAIMS
1. Class 13 consists of SWII's 100% ownership Interest
in Sun Desert. SWII will retain its ownership in Sun Desert.
Therefore, this Class is unimpaired and shall not be entitled to vote
for or against the Plan.
2. Class 14 consists of Sun Desert's membership Interest
in Coachella. Sun Desert will retain its membership Interest in
Coachella. Therefore, this Class is unimpaired and shall not be
entitled to vote for or against the Plan.
3. Class 15 consists of SWII's 100% ownership Interest
in Sun World. Pursuant to the Plan, SWII and Sun World will be
merged. Therefore, this Class is not impaired and shall not be
entitled to vote for or against the Plan.
4. Class 16 consists of holders of Intercompany Claims.
The holders of Intercompany Claims in Class 16 shall not receive or
retain any property on account of these Claims; nor shall these Claims
be voted for or against the Plan. All Intercompany Claims shall be
cancelled under the Plan, including such Claims asserted by non-debtor
Subsidiaries against any Debtor, as though all such entities had
commenced chapter 11 cases and the Plan substantively consolidated
their estates. Sun World shall request the Bankruptcy Court to find
that such treatment of Intercompany Claims does not alter or adversely
affect the rights of the holders of these Claims.
V.
OVERBID
A. Overbid Procedure.
1. Any overbid by a potential Buyer must (i) be presented
to the Debtors, the Creditors' Committee, the Equity Committee, Mr.
Marguleas, Hancock and Credit Agricole no later than ten (10) Business
Days prior to the scheduled commencement of the Confirmation Hearing,
and (ii) be accompanied by evidence of such Buyer's ability to
consummate the Sale and to timely perform (or cause the timely
performance of) all obligations owed to the holders of Claims and
Interest of all Classes under the Plan (an "Overbid"). Without
limiting the other provisions of this Article, the Bankruptcy Court
shall not approve an Overbid unless (i) the Bankruptcy Court
determines that the Overbid has an aggregate value of at least
$2,000,000 more than the Cadiz Offer; (ii) the Buyer has the ability
to consummate the Sale and to timely perform its obligations under the
Plan; (iii) the Buyer offers Hancock and Credit Agricole treatment
identical to that offered them under (A) paragraphs IV B 1 and IV B 2,
respectively, and (B) the forms of New Hancock Documents and New
Credit Agricole Documents, respectively, unless they otherwise consent
to different treatment; and (iv) acceptance of the Overbid is in the
best interests of these estates.
2. The Bankruptcy Court shall be required to find that
any Overbid meets the "feasibility test" set forth in Bankruptcy Code
section 1129(a)(11), including, without limitation, (i) that
Reorganized Sun World will have sufficient working capital for its
operations without having to subordinate Credit Agricole's or
Hancock's liens or security interests to any new lender and (ii) that
such Overbid provides Hancock and Credit Agricole adequate assurance
of Reorganized Sun World's future performance of its obligations to
such lenders.
3. If there is a successful Overbid, Cadiz shall
consummate the purchase of Reorganized Sun World in accordance with
the terms of the last Offer made by Cadiz at the Confirmation Hearing
in the event the Bidder fails to consummate the purchase provided that
the Confirmation of the Plan under which Cadiz is the Buyer shall
occur on or before August 15, 1996.
4. If Cadiz has not withdrawn the Cadiz Offer, Cadiz is
not in default under the Plan Support Agreement, a successful Overbid
is made and the Bidder consummates the purchase of Reorganized Sun
World, then the Debtors shall reimburse Cadiz for its reasonable and
actual third-party charges up to $750,000 incurred in connection with
the preparation and pursuit of the Cadiz Offer, including, without
limitation, attorneys' fees, investment banking fees and accounting
fees and expenses, but not including any charge for the time and
services of Cadiz employees.
5. If an Overbid is presented pursuant to the terms of
paragraph V A 1, the Confirmation Hearing shall proceed with respect
to consideration of the Cadiz Offer and the Overbid and the Debtors
will request that the Bankruptcy Court take all actions necessary to
Confirm the Plan other than (i) giving final approval of the Overbid
and the credit-worthiness of the party making the Overbid and (ii)
determining whether any portion of the Overbid should be allocated to
holders of Claims in Class 1 and Class 2. Further, unless the Court
determines that Cadiz shall be the Buyer, the Debtors will request
that the Court continue the Confirmation Hearing as to the Overbid and
allocation of any portion of the Overbid to holders of Claims in Class
1 and Class 2 for ten (10) Business Days. In the event the allocation
of any Overbid has not been determined by the Bankruptcy Court at the
time the Plan is otherwise capable of being confirmed, the Plan may be
confirmed with the party making the Overbid as the Buyer and the Court
shall thereafter hold appropriate proceedings to allocate the Overbid.
In such event, each party in interest shall be entitled to assert that
all or any part of the Overbid (other than any portion payable to
Cadiz as expense reimbursement in accordance with the Plan) shall be
distributed to it.
B. DISTRIBUTION OF NET OVERBID.
In the event of a successful Overbid, the following
provisions shall apply:
1. Holders of Allowed Class 8 Unsecured Claims shall
receive Pro Rata (x) seventy-five percent (75%) of any Net Overbid
until holders of Allowed Class 8 Claims have received eighty-five
percent (85%) of the Allowed Amount of such Claims, not including any
post-petition interest, and (y) fifty percent (50%) of the amount of
any Net Overbid after holders of Allowed Class 8 Claims have received
at least eighty-five percent (85%) of the Allowed Amount of such
Claims, until such Claims are paid in full, excluding post-petition
interest.
2. Holders of Allowed Class 9 Interests and Class 10
Interests shall collectively receive fifty percent (50%) of the amount
of any Net Overbid which is not paid to holders of Allowed Claims in
Class 8. Any amount payable to Class 9 and Class 10 on account of an
Overbid shall be allocated as follows: (i) Class 10 shall receive the
first $1,500,000, which amount shall be shared Pro Rata by the members
of Class 10 and (ii) any amount in excess of $1,500,000 shall be
allocated fifty percent (50%) to Class 9 and fifty percent (50%) to
Class 10, with the portion allocated to each Class being shared Pro
Rata by the holders of Allowed Interests in such Class.
3. Mr. Marguleas, as the holder of the Class 9A and Class
10A Interests, shall receive fifty percent (50%) of the amount of any
Net Overbid which is not paid to holders of Allowed Claims in Class 8.
VI.
INDIVIDUAL HOLDER PROOFS OF INTEREST
The Debtors have Scheduled as undisputed and non-contingent
the number of issued and outstanding shares of Old Common Stock and
Old Preferred Stock represented by Classes 9, 9A, 10 and 10A under the
Plan as of the Petition Date. Accordingly, individual holders of
Interests in Classes 9, 9A, 10 and 10A are not required to File proofs
of Claims or Interests unless they disagree with the number of shares
Scheduled by the Debtors with respect to their Interests or assert
Claims other than Interests based on ownership of the Old Common Stock
and Old Preferred Stock.
VII.
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
All pre-petition contracts and unexpired leases to which
any Debtor is a party and which are not (i) assumed on or before the
Confirmation Date, or (ii) the subject of a Filed motion to assume as
of the Confirmation Date, shall be deemed rejected. The Confirmation
Order shall state that such pre-petition contracts and unexpired
leases are deemed rejected under the Plan.
Any monetary defaults under an executory contract or
unexpired lease to be assumed shall be cured, pursuant to section
365(b)(1) of the Bankruptcy Code, in one of the following manners:
(i) by payment of the defaulted amounts in Cash on the Effective Date
or as soon thereafter as practicable, unless such defaulted amounts
have previously been paid; or (ii) on such other terms as may be
agreed to by Reorganized Sun World and the non-Debtor party(ies) to
such executory contract or unexpired lease. In the event of a dispute
with any non-Debtor party regarding (1) the amount of any cure
payments required to be made, (2) the ability of Reorganized Sun World
to provide adequate assurance of future performance under the contract
or lease to be assumed, or (3) any other matter pertaining to
assumption (or assumption and assignment), the cure payments required
by section 365(b)(1) of the Bankruptcy Code shall be made within ten
(10) Business Days following the entry of a Final Order resolving the
dispute and approving assumption.
Any Claim for damages arising from the rejection of an
executory contract or unexpired lease or claims for cure or
compensation arising from its assumption must be Filed within thirty
(30) days after the order of the Bankruptcy Court approving such
rejection becomes a Final Order or be (i) forever barred and
unenforceable against any of the Debtors, their Estates, and
Reorganized Sun World and their respective properties, and (ii) barred
from receiving any distribution under the Plan.
VIII.
MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN
A. OVERVIEW OF PLAN IMPLEMENTATION.
Upon Confirmation of the Plan, all of the New Common Stock
and the Old Securities, to the extent the holders of such Old
Securities agree to sell their Old Securities, will be sold to the
Buyer. Under the Cadiz Offer, Cadiz will purchase all of the New
Common Stock and the Old Securities, to the extent that the holders of
such Old Securities agree to sell their Old Securities to Cadiz (with
any remaining Old Securities being cancelled), such that Reorganized
Sun World will become a wholly-owned subsidiary of Cadiz. To the
extent Old Securities are sold to the Buyer, the Plan shall be
implemented by the Plan Implementation Agreement executed by the
Buyer, the Debtors and the holders of Old Securities who agree to sell
their Old Securities. No later than the Effective Date, the Buyer
shall fund, from its own sources: (i) the Equity Cash Payment; (ii)
the Hancock Cash Payment, the Credit Agricole Cash Payment, and the
additional $2,000,000 Cash payment to Credit Agricole described above;
(iii) the $15,000,000 deposit into the Unsecured Claims Reserve
Account; (iv) the amounts required to pay Allowed Class 6 Claims; and
(v) $15,000,000 as a Capital Contribution for Reorganized Sun World's
working capital purposes.
B. DISTRIBUTIONS.
For purposes of the Plan, all distributions on account of
Allowed Claims and Allowed Interests shall be payable to the record
holders of such Claims and Interests as of the Record Date. Subject
to the provisions of the Plan, and except as otherwise provided
herein, property to be distributed hereunder to an impaired Class
shall be distributed on or as soon as practicable after (i) the
Effective Date, to each holder of a Claim or an Interest in that Class
that is an Allowed Claim or an Allowed Interest as of the Effective
Date, and (ii) the Order of the Bankruptcy Court allowing such Claim
or Interest becomes a Final Order, to each holder of an Allowed Claim
or an Allowed Interest of that Class that is allowed after the
Effective Date, to the extent allowed. Property to be distributed
under the Plan to a Class that is not impaired or on account of a
Claim of a kind described in Bankruptcy Code section 507(a)(1) shall
be distributed on the later of (x) the date specified in the preceding
clauses (i) and (ii) applicable to the Claims or Interests and (y) the
date on which the distribution to the holder of the Claim would have
been due and payable in the ordinary course of business or under the
terms of the Claim in the absence of the Reorganization Cases.
Notwithstanding any other provision of the Plan, the Buyer, the
Debtors and Reorganized Sun World shall not be obligated to make any
distribution with respect to any unclassified Claim, any Allowed Claim
in Class 6 or Class 8, or any Allowed Interest in Class 9, 9A, 10 or
10A other than in the hands of the holders shown on the books and
records of the Debtors as of the date hereof, until the earlier of:
(a) the Buyer determining that it will not assert any objection to
allowance of the Claim or Interest, and (b) the deadline for the
Filing of any such objection passes without such an objection being
Filed.
C. PRO RATA DISTRIBUTION.
Where the Plan provides for Pro Rata distribution, the
property to be distributed to each of Classes 8, 9 and 10 under the
Plan shall be divided Pro Rata among the holders of Allowed Claims or
Allowed Interests of the relevant Class. Solely for the purpose of
applying the definition of "Pro Rata" to the distributions within such
Classes: (i) the amount of the Claims in Class 8 shall be the Allowed
Amounts of such Claims determined as of the relevant Petition Date,
and (ii) the "amount" of an Allowed Interest in Class 9 or 10 shall be
the number of shares held by the holder of the Interest in Class 9 or
10, as applicable, as of the Record Date.
D. TERMINATION OF CONTRACTUAL SUBORDINATION RIGHTS.
Any right of a creditor of the Debtors to enforce a
contractual subordination provision, any right arising out of any such
subordination provision and any right to receive from the legal or
beneficial holder of any Claim the consideration distributed under the
Plan to such holder, will terminate upon the Effective Date. The
distribution to any Class containing the Claims of beneficiaries of
such subordination provisions shall be in full satisfaction of any
such subordination rights. Nothing in this paragraph shall affect the
right of any party to seek to have any Claim or Interest subordinated
on equitable grounds.
The relative priority and scope of the liens of Hancock and
Credit Agricole, with respect to the assets of the Debtors and the
Subsidiaries, which existed as of the Filing Date will be preserved
under the Plan, except as expressly set forth in the Plan to the
contrary.
E. SUBSTANTIVE CONSOLIDATION.
The Plan provides for substantive consolidation of the
estates of all of the Debtors. All assets and liabilities of all of
the Debtors shall be treated as if the Debtors were merged into a
single entity for purposes of distributions under the Plan. All
claims against any Debtor held by any Subsidiary shall be cancelled;
all guarantees of any Debtor of the payment, performance or collection
of an obligation of any other Debtor shall be eliminated and
cancelled; any obligation of any Debtor for a Claim and the obligation
of any other Debtor for the same Claim shall be treated as a single
obligation against the consolidated estate; and all joint obligations
of two or more Debtors and all multiple Claims against such entities
on account of such joint obligations shall be treated as a single
Claim against the consolidated estate, in each case, except as
otherwise expressly provided in the Plan, and except that the
obligations of any Subsidiary to Hancock or Credit Agricole under any
Claim or guaranty shall not be cancelled under the Plan, but shall be
deemed to be modified or amended as set forth in the New Hancock
Documents and the New Credit Agricole Documents.
Pursuant to the Plan, SWII will merge with and into Sun
World on the Effective Date, with the surviving corporation having the
name of "Sun World International, Inc." Reorganized Sun World will
determine whether to merge Sun Desert with and into Reorganized Sun
World or to maintain its separate corporate existence. Any such
merger will be in accordance with applicable non-bankruptcy law.
Reorganized Sun World will also determine whether to liquidate
Coachella or to maintain its separate existence. The disposition of
Sun Desert and Coachella might not be determined until after the
Effective Date, and is not a condition to Confirmation.
F. CANCELLATION OF OLD SECURITIES AND RELATED AGREEMENTS.
Except for Old Securities purchased pursuant to the Plan
Implementation Agreement, on the Effective Date, the Old Securities
and the Old Stock Rights, and all obligations of the Debtors under any
of the foregoing, shall be terminated, canceled and extinguished.
G. NEW CREDIT AGRICOLE CREDIT AGREEMENT, NEW CREDIT AGRICOLE
DEED OF TRUST AND NEW CREDIT AGRICOLE NOTE; NEW HANCOCK
CREDIT AGREEMENT, NEW HANCOCK DEED OF TRUST AND NEW HANCOCK
NOTE.
1. On the Effective Date, (i) Reorganized Sun World,
Credit Agricole and any other parties thereto will enter into the New
Credit Agricole Credit Agreement, the New Credit Agricole Deed of
Trust and the New Credit Agricole Note and the other New Credit
Agricole Documents, and (ii) Reorganized Sun World, Hancock and any
other parties thereto will enter into the New Hancock Credit
Agreement, the New Hancock Deed of Trust, the New Hancock Note and the
other New Hancock Documents. The New Credit Agricole Documents and
the New Hancock Documents shall be deemed to have been entered into as
of the Effective Date.
2. Any Debtor, the Creditors' Committee or any holder of
a Class 8 Claim shall have the right, provided that notice of
objection is given in accordance with the following paragraph VIII G
3, to contend at the Confirmation Hearing that the satisfaction of a
condition (a "Lender's Condition") that (i) is required to be
satisfied on or before the Effective Date under the New Hancock Credit
Agreement or the New Credit Agricole Credit Agreement (whether or not
denominated therein as a "condition precedent" to the Effective Date)
and (ii) is not expressly required by the Plan itself, would result in
treatment of a Class 8 Claim that would violate section 1123(a)(4) of
the Bankruptcy Code (an "Invalid Condition").
3. Objection to any allegedly Invalid Condition shall be
given as follows:
a. Not later than the date that is twenty (20) days
prior to the deadline set by the Bankruptcy Court for balloting on the
Plan (the "Balloting Deadline"), any holder of a Class 8 Claim who
wishes to review drafts of the proposed New Hancock Credit Agreement
and New Credit Agricole Credit Agreement shall deliver a written
request to Hancock or Credit Agricole, as the case may be, for copies
of such drafts.
b. Not later than the date that is fifteen (15) days
prior to the Balloting Deadline, Hancock and Credit Agricole shall
each serve copies of drafts of the proposed New Hancock Credit
Agreement and New Credit Agricole Credit Agreement, respectively, by
overnight mail, facsimile or hand delivery on (i) the Debtor, (ii) the
Creditors' Committee and (iii) each holder of a Class 8 Claim who has
delivered to it a timely written request for such copies. Each
recipient of such copies shall have ten (10) days from the date of
service thereof to file a written objection with the Bankruptcy Court
and serve a written notice of such objection, by hand or by
telecopier, on Hancock and Credit Agricole, that such party objects to
one or more Lender's Conditions contained in those documents on the
grounds, and solely on the grounds, that they constitute Invalid
Conditions (any Lender's Condition identified in any objection filed
and served in accordance with this paragraph VIII G 3, a "Protested
Condition").
4. Upon receipt of service of notice identifying one or
more Protested Conditions, Hancock and/or Credit Agricole, as the case
may be, shall have the right (i) at any time prior to the conclusion
of the Confirmation Hearing, to modify the Protested Condition in a
manner mutually acceptable to Hancock and/or Credit Agricole, as
applicable, to Cadiz, and to the party(ies) that gave the notice(s)
objecting to such Protested Condition(s), so that all objections
thereto are withdrawn, (ii) at any time prior to the conclusion of the
Confirmation Hearing, to waive satisfaction of the Protested
Condition(s) (in which case all objections thereto shall be deemed to
have been withdrawn), and/or (iii) to contend at the Confirmation
Hearing that any such Protested Condition is not an Invalid Condition.
5. If Hancock and/or Credit Agricole, as applicable,
disputes the status of any Protested Condition as an alleged Invalid
Condition under Clause (iii) of paragraph VIII G 4 and if the
Bankruptcy Court, at the Confirmation Hearing, nonetheless finds that
any such Protested Condition is an Invalid Condition, (i) such
Protested Condition (a) if it can be modified so that it does not
constitute an Invalid Condition, shall be modified by the Bankruptcy
Court to the minimum extent necessary so that the Protested Condition
does not constitute an Invalid Condition, and, as so modified, shall
remain a Lender's Condition, or (b) if it cannot be so modified, shall
be deemed to be deleted from the New Hancock Credit Agreement or New
Credit Agricole Credit Agreement, as applicable, and (ii) the Plan, if
otherwise confirmable, may be confirmed over the objection of Hancock
and/or Credit Agricole, as applicable, that such Protested Condition
did not constitute an Invalid Condition.
6. Except as expressly provided in this Section VIII G,
no modification, whether material or immaterial, may be made to any
of the New Hancock Documents or the New Credit Agricole Documents
without the express consent of Hancock or Credit Agricole.
H. CHANGES OF CORE BUSINESS AND SALES OF PROPERTY.
The New Hancock Credit Agreement and the New Credit
Agricole Credit Agreement shall permit the Debtors to sell the PreIdentified
Assets on the terms of such agreements. The Debtors shall
not change their core business without the prior consent of Hancock
and Credit Agricole until the indebtedness under the New Credit
Agricole Note and the New Hancock Note has been paid in full.
I. WORKING CAPITAL.
Funds for working capital, in the amount of $15,000,000,
shall be provided to Reorganized Sun World by the Buyer as a Capital
Contribution. In no case shall the liens or security interests of
Hancock or Credit Agricole, respectively, be subordinated to any new
lenders without, as the case may be, Credit Agricole's or Hancock's
consent.
J. COMMITTEES.
On the Effective Date, both the Creditors' Committee and
the Equity Committee shall be dissolved and the members of such
committees shall be released and discharged from all further rights
and duties arising from or related to the Reorganization Cases. The
professionals retained by such committees and the members thereof
shall not be entitled to compensation or reimbursement of expenses
incurred for services rendered after the Effective Date other than for
services rendered pursuant to the Plan or in connection with other
activities reserved to such committees or such professionals under the
Plan or the Confirmation Order or in connection with any application
for allowance of compensation and reimbursement of expenses pending as
of, or Filed after, the Effective Date. To the extent retainers or
funds held in the Pro Fee Suspense Fund Account are insufficient to
pay professional fees allowed by the Bankruptcy Court consistent with
the Plan, Reorganized Sun World shall be liable for such deficiency.
K. DISPOSITION OF RESERVE ACCOUNTS.
1. Following Confirmation, Reorganized Sun World shall
continue to maintain the segregated "Pro Fee Suspense Fund Account"
established pursuant to an Order of the Bankruptcy Court. Funds held
by the Debtors in the Pro Fee Suspense Fund Account on the Effective
Date shall continue to be held by Reorganized Sun World in that
account and shall be paid to professionals employed by the Estates
from time to time after the Effective Date as and to the extent
approved by the Bankruptcy Court. After all professionals employed by
the Estates have made their final applications for payment of fees and
expenses and Reorganized Sun World has paid all allowed fees and
expenses to such professionals, Reorganized Sun World shall close the
Pro Fee Suspense Fund Account, and any remaining funds in the account
shall become the property of Reorganized Sun World, subject to the
security interest of Credit Agricole.
2. On the Effective Date, Reorganized Sun World shall
close the segregated "Emergency Reserve" account established pursuant
to the Interim Order Authorizing Use Of Cash Collateral Pursuant to 11
U.S.C. section 363(c)(2) entered by the Bankruptcy Court on October 4,
1994, as amended. Any funds remaining in the Emergency Reserve as of
the Effective Date shall become the property of Reorganized Sun World,
subject to the security interest of Credit Agricole.
3. On the Effective Date, Reorganized Sun World shall be
authorized to close the segregated "Grower Account" established
pursuant to the Order Authorizing Debtor to Establish Segregated
Account for Net Proceeds of Post-petition Sales of Produce and
Granting Other Relief entered by the Bankruptcy Court on November 4,
1994, as amended. If Reorganized Sun World determines to close the
Grower Account, any funds remaining in the Grower Account as of the
Effective Date shall become the property of Reorganized Sun World,
subject to the security interest of Credit Agricole.
4. Following Confirmation, Reorganized Sun World shall
maintain the segregated "Real Property Proceeds Account" established
by the Debtors pursuant to the Order Authorizing Debtors to (1) Incur
Secured Indebtedness and Granting Security Interests and Priority
Pursuant to 11 U.S.C. Sec. 364 and (2) Use Cash Collateral Pursuant to 11
U.S.C. Section 363(c)(2), entered by the Bankruptcy Court in the
Reorganization Cases. After the Effective Date, Reorganized Sun World
shall remit funds in the Real Property Proceeds Account to Hancock or
to Credit Agricole, as the case may be, in partial payment of their
respective Allowed Claims, as and when the issue of their application
is resolved. Such payment shall be credited against the indebtedness
under the New Hancock Note or the New Credit Agricole Note, as the
case may be, without prepayment fee or premium.
5. On the Effective Date, subject to any limitations
imposed by its marketing agreements with growers, Reorganized Sun
World may close the segregated "PACA Reserve" account established
pursuant to the Final Order Authorizing Use of Cash Collateral
Pursuant to 11 U.S.C. section 362(c)(2) entered by the Bankruptcy
Court on December 6, 1994, as extended from time to time thereafter.
If Reorganized Sun World elects to close this account, any funds
remaining in the PACA Reserve as of the Effective Date shall become
the property of Reorganized Sun World, subject to the security
interest of Credit Agricole.
L. VESTING OF ASSETS.
Except as otherwise provided in any provision of the Plan,
on the Effective Date, all property of the Estates shall vest in
Reorganized Sun World, all free and clear of all Claims, liens,
encumbrances and Interests of holders of Claims and holders of Old
Securities and Old Stock Rights. From and after the Effective Date,
Reorganized Sun World may operate its business and use, acquire, and
dispose of property and settle and compromise claims or interests
arising post-Confirmation without supervision by the Bankruptcy Court
and free of any restrictions of the Bankruptcy Code, the Bankruptcy
Rules or the Local Bankruptcy Rules, other than those restrictions
expressly imposed by the Plan and the Confirmation Order.
M. PRESERVATION OF CAUSES OF ACTION.
Except as otherwise provided herein, or in any contract,
instrument, release, or other agreement entered into in connection
with the Plan, in accordance with section 1123(b) of the Bankruptcy
Code, Reorganized Sun World shall retain (and may enforce) any claims,
rights and causes of action (defined herein as Causes of Action) that
the Debtors or the Estates may hold against any Person, including,
inter alia, any claims, rights or causes of action under sections 544
through 550 of the Bankruptcy Code or any similar provisions of state
law, or any other statute or legal theory.
N. PROSECUTION OF CAUSES OF ACTION AND LITIGATION RECOVERIES.
Under the Plan, Reorganized Sun World will retain all
Causes of Action except for (i) the Released Claims and (ii) other
Causes of Action and rights to subordinate on equitable grounds any
Claim or Interest which are expressly released under the Plan.
Reorganized Sun World shall pursue, as representative of these
Estates, all Causes of Action which have not been released pursuant to
the Plan and which Reorganized Sun World determines in the reasonable
exercise of its business judgment should be pursued; provided that the
prosecution of the Ernst & Young Causes of Action shall be subject to
the provisions of the New Credit Agricole Documents and the New
Hancock Documents. Reorganized Sun World shall bear the expense of
all litigation commenced by it to enforce Causes of Action. Subject
to any applicable provisions of the New Credit Agricole Documents and
the New Hancock Documents with respect to the proceeds of the Ernst &
Young Causes of Action, all recoveries on the basis of Causes of
Action shall be retained by Reorganized Sun World as working capital,
but subject to the security interest of Credit Agricole, or used to
pay the costs of pursuing such Causes of Action.
Neither Reorganized Sun World (subject to the terms of the
New Credit Agricole Documents and New Hancock Documents, with respect
to the prosecution of the Ernst & Young Causes of Action) nor any
stockholder, officer, director, employee, agent, representative or
advisor of Reorganized Sun World, shall have any responsibility or
shall be liable to, any Person whatsoever, under any theory of
liability (whether in law, equity, admiralty or otherwise and
including, inter alia, claims based upon any claim of negligence or
gross negligence), for any act or omission related to the prosecution,
abandonment, compromise or other disposition, or the collection, of
any Cause of Action.
O. CERTIFICATE OF INCORPORATION AND BYLAW AMENDMENTS.
On the Effective Date, Reorganized Sun World shall adopt
the Amended Sun World Certificate and the Amended Sun World Bylaws
pursuant to applicable non-bankruptcy law and section 1123(a)(5)(I) of
the Bankruptcy Code. The Amended Sun World Certificate and Amended
Sun World Bylaws will, among other provisions: (i) authorize the
issuance of the New Common Stock; and (ii) prohibit the issuance of
nonvoting equity securities to the extent required by section
1123(a)(6) of the Bankruptcy Code. The Amended Sun World Certificate
and Amended Sun World Bylaws will become effective upon (1)
Confirmation of the Plan, (2) the occurrence of the Effective Date and
(3) the filing with the Delaware Secretary of State of the Amended Sun
World Certificate.
P. MANAGEMENT OF REORGANIZED SUN WORLD.
The Buyer shall be entitled to propose, with the consent of
Hancock and Credit Agricole, the members for the initial post-Confirmation
Board by filing notice thereof at least five (5) Business
Days prior to the commencement of the Confirmation Hearing. If the
Bankruptcy Court rejects the composition of the Board or any person
proposed by the Buyer for the Board, then the Buyer shall have the
right to propose a different composition or a replacement member for
the Board. The initial post-Confirmation Board shall take office as
of the Effective Date. After Confirmation, Directors shall be elected
pursuant to the terms of the Amended Sun World Certificate and Amended
Sun World Bylaws, subject to any required approval by Hancock and
Credit Agricole.
Reorganized Sun World, acting through the post-Confirmation
Board of Directors, may authorize an appropriate compensation and
bonus plan for permanent senior management employed by Reorganized Sun
World post-Confirmation, which may include provisions for the issuance
of Cadiz stock options to such permanent senior management.
Q. OBJECTIONS TO CLAIMS.
Except as otherwise provided for applications of
professionals for compensation and reimbursement of expenses under
paragraph IV A 1c(2), and except as otherwise ordered by the
Bankruptcy Court after notice and a hearing, objections to Claims,
including, without limitation, Administrative Claims, shall be Filed
and served upon the holder of such Claim or Administrative Claim not
later than the later of (i) ninety (90) days after the Effective Date,
and (ii) ninety (90) days after a proof of claim or request for
payment of such Claim or Administrative Claim is served on the Debtor;
provided that such period may be extended by the Court on the
application of Reorganized Sun World, which application may be made on
notice and hearing to any holder of any affected Claim or
Administrative Claim. Reorganized Sun World, at Cadiz's sole expense,
shall have standing to object to any asserted Class 8 Claims. For
purposes of this Plan, Allowed Class 1 and Allowed Class 2 Claims
shall be in the amounts agreed to in the New Hancock Documents and the
New Credit Agricole Documents.
R. DISTRIBUTION OF PROPERTY UNDER THE PLAN.
1. DISBURSING AGENT.
Reorganized Sun World or the Buyer, as provided above,
shall make all distributions required to be made under the Plan to
holders or Allowed Claims and Allowed Interests. Reorganized Sun
World may employ or contract with other Persons to assist in or
perform the distributions of property to be distributed. Such Persons
shall serve without bond. Each Person employed by Reorganized Sun
World hereunder shall receive, without the need for further Bankruptcy
Court approval, from Reorganized Sun World (x) reasonable compensation
for distribution services rendered pursuant to the Plan, and (y)
reimbursement of reasonable out-of-pocket expenses incurred in
connection with such services, in each case, in accordance with such
terms as may be agreed to with Reorganized Sun World.
Prior to or on the Effective Date, the Buyer shall
establish the Unsecured Claims Reserve Account into which it shall
deposit no less than $15,000,000. On the Effective Date, the Buyer
shall promptly transfer from the Unsecured Claims Reserve Account into
the Unsecured Claims Disbursement Account the estimated amount of Cash
payable to holders of Class 8 Claims whose Claims the Buyer intends to
pay on or as soon as practicable after the Effective Date. In
addition, the Buyer shall provide funds to pay Allowed Class 6 Claims
by depositing an amount into the Unsecured Claims Reserve Account
equal to the estimated amount payable to holders of Allowed Class 6
Claims on account of their Claims pursuant to the Plan. On the
Effective Date or as soon as practicable thereafter, holders of such
Allowed Class 6 and Class 8 Claims will receive Cash distributions, as
set forth in the Plan, from the Unsecured Claims Disbursement Account.
Thereafter, at any time a Class 6 or Class 8 Claim is determined to be
Allowed, the Buyer shall transfer from the Unsecured Claims Reserve
Account into the Unsecured Claims Disbursement Account funds
sufficient to pay such Allowed Claim, and Reorganized Sun World will
promptly pay, from the funds in the Unsecured Claims Disbursement
Account, to the holder of such Allowed Claim the amounts required to
be paid to such holder on account of its Claim pursuant to the Plan.
If at any time, the funds in the Unsecured Claims Reserve Account are
insufficient to make such required transfers into the Unsecured Claims
Disbursement Account, the Buyer shall promptly deposit an amount into
the Unsecured Claims Reserve Account which is no less than the amount
needed to make such transfers.
2. DISPUTED CLAIMS AND INTERESTS.
Notwithstanding any other provisions of the Plan, no
payments or distributions shall be made on account of any Disputed
Claim or Disputed Interest until such Claim or Interest becomes an
Allowed Claim or Allowed Interest, and then only to the extent that it
becomes an Allowed Claim or Allowed Interest. Any portion of a
distribution that is withheld on account of a Disputed Claim or
Disputed Interest and that (upon resolution of the dispute with
respect thereto) is ultimately determined not to be payable to the
holder of such Claim or Interest, shall thereafter be available for
distribution to all of the holders of Allowed Claims or Allowed
Interests in the affected Class on a Pro Rata basis to the extent that
such distribution was made on a Pro Rata basis within the affected
Class. The Buyer shall bear the expense of resolving all Disputed
Claims in Class 8.
Upon resolution of any Disputed Claim, the holder of such
Claim shall be entitled to the actual interest which accrued on the
Allowed portion, if any, of his or her Claim for the period in which
such portion was held in the Unsecured Claims Reserve Account.
3. DISTRIBUTIONS TO NON-DISPUTED CLAIMS.
At any time that a distribution is made to any Class
under the Plan that is required to be made Pro Rata to the members of
such Class, such distribution shall be made to all of the holders of
Allowed Claims or Allowed Interests in such Class, and the Pro Rata
portion of such distribution which would be distributed to the holders
of Disputed Claims or Disputed Interests in the event such Claim or
Interest becomes an Allowed Claim or an Allowed Interest in the amount
sought by the holder shall be withheld by Reorganized Sun World
pending resolution of the Disputed Claim or Disputed Interest. Except
for interest payable pursuant to paragraph VIII R 2, no interest or
additional compensation shall be payable to the holder of a Disputed
Claim or Disputed Interest by reason of any delay in making a
distribution to such holder pending resolution of the dispute with
such holder.
4. MANNER OF PAYMENT UNDER THE PLAN.
Cash payments made pursuant to the Plan shall be paid in
U.S. dollars, by check drawn on a domestic bank selected by
Reorganized Sun World or the Buyer, as the case may be, or by wire
transfer from a domestic bank, at Reorganized Sun World's or the
Buyer's option, respectively; provided that any payment required to be
made to a foreign trade creditor holding an Allowed Claim may be paid,
at the option of the Buyer, in such funds, and by such means, as are
necessary or customary for similar payments to Persons located in the
relevant foreign jurisdiction.
5. SURRENDER OF INSTRUMENTS.
a. REQUIREMENTS TO SURRENDER INSTRUMENTS.
To the extent the Buyer purchases Old Securities, a holder
of certificates representing shares of such Old Securities who agrees
to sell such Old Securities shall surrender the share certificate or
certificates representing such Old Securities to the Buyer or its
designee on or prior to the Effective Date pursuant to the terms of
the Plan Implementation Agreement.
If a holder of Old Securities refuses to agree to sell such
Old Securities to the Buyer prior to Confirmation or breaches any
agreement to sell such Old Securities to the Buyer, then on the
Effective Date, the stock certificates representing such Old
Securities will be canceled and represent only the right to receive
the distributions to which the holder is entitled under the Plan in
respect of the Old Securities previously represented thereby.
EXCEPT AS SET FORTH BELOW, THE SURRENDER OF CERTIFICATES
REPRESENTING SHARES OF OLD SECURITIES IS A CONDITION TO THE RECEIPT OF
ANY DISTRIBUTION UNDER THE PLAN.
b. LOST, STOLEN, MUTILATED OR DESTROYED
INSTRUMENTS.
If any Interest holder agrees to sell its Old Securities
and the Instrument representing such Interest is lost, stolen,
mutilated or destroyed, such certificate shall be deemed surrendered
when the holder of a Claim or Interest based thereon delivers to
Reorganized Sun World or its respective designees, as applicable: (i)
evidence satisfactory to Reorganized Sun World or its designee, as
applicable, of the loss, theft, mutilation, or destruction of such
Instrument or (ii) such security or indemnity as may be required by
Reorganized Sun World or its designee, as applicable, to save each of
them harmless with respect thereto. If any Interest holder fails to
sell its Old Securities and the Instrument representing such Interest
is lost, stolen, mutilated or destroyed, such holder shall not be
entitled to any distribution under the Plan until it likewise
satisfies the requirements of this paragraph.
c. EFFECT OF FAILURE TO SURRENDER INSTRUMENTS.
Any holder of an Instrument of the Debtors that (i) fails
to surrender the Instrument pursuant to the terms of the Plan
Implementation Agreement or (ii) fails to satisfy the requirements of
subparagraph b of this paragraph 5 with respect to the Instrument
within one year after the Effective Date shall be forever barred from
receiving any distribution under the Plan in respect of any Claim or
Interest of such holder based thereon. In either case, any property
held for distribution on account of a Claim or Interest based on such
Instrument shall become property of Reorganized Sun World in the
manner provided in paragraph VIII R 6b(2) for unclaimed distributions.
6. DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR
UNCLAIMED DISTRIBUTIONS.
a. DELIVERY OF DISTRIBUTIONS IN GENERAL.
Except as provided below in this paragraph for holders of
undeliverable distributions, distributions to holders of Allowed
Claims and Allowed Interests shall be distributed by mail to each
holder (i) if such holder files a proof of Claim or proof of Interest,
(A) at the address set forth on the proof of Claim or proof of
Interest Filed by such holder, or (B) if such holder subsequently
delivers a written notice of change in address to Reorganized Sun
World at the address set forth in such notice; or (ii) if no proof of
Claim or proof of Interest is Filed by such holder, (A) unless
Reorganized Sun World shall have received a written notice of a change
of address from such holder, at the address for such holder reflected
on the Schedule of Assets and Liabilities, and (B) if Reorganized Sun
World shall have received a written notice of a change of address from
such holder, at the address set forth in such notice.
b. UNDELIVERABLE DISTRIBUTIONS.
(1) HOLDING AND INVESTMENT OF UNDELIVERABLE
PROPERTY.
If any distribution to the holder of any Claim or Interest
is returned to Reorganized Sun World as undeliverable, no further
distribution shall be made to such holder unless and until Reorganized
Sun World is notified in writing of such holder's then current
address. Subject to paragraph VIII R 6b(2) below, undeliverable
distributions shall remain in the possession of Reorganized Sun World
until such time as a distribution becomes possible.
Unclaimed Cash shall be held in trust in a segregated bank
account in the name of Reorganized Sun World (or, if such Cash is to
be paid by Cadiz under the Plan, Cadiz) for the benefit of the
potential claimants to such funds, and shall be accounted for
separately. Such funds shall be held in interest-bearing accounts to
the extent practicable, and the parties entitled to such funds shall
be entitled to any interest earned on such funds. Any undeliverable
securities shall be held in trust for the benefit of the potential
claimants of such securities by Reorganized Sun World and shall be
accounted for separately.
(2) DISTRIBUTION OF UNDELIVERABLE PROPERTY
AFTER IT BECOMES DELIVERABLE AND FAILURE
TO CLAIM UNDELIVERABLE PROPERTY.
Any holder of an Allowed Claim or Allowed Interest who does
not assert a claim for an undeliverable distribution held by
Reorganized Sun World or the Buyer within one (1) year after such
distribution is first attempted to be made by Reorganized Sun World or
the Buyer, as the case may be, shall no longer have any claim to or
interest in such undeliverable distribution, and shall be forever
barred from receiving any further distributions under the Plan. In
such cases, any property held for distribution on account of the
Claims or Interests of such holder shall be retained by Reorganized
Sun World or the Buyer, as the case may be. Nothing contained in the
Plan shall require any Debtor, Reorganized Sun World or the Buyer to
attempt to locate any holder of an Allowed Claim or an Allowed
Interest.
7. COMPLIANCE WITH TAX REQUIREMENTS.
In connection with the Plan, to the extent applicable,
Reorganized Sun World or the Buyer, as applicable, in its capacity as
disbursing agent, shall comply with all withholding and reporting
requirements imposed on it by any governmental unit, and all
distributions pursuant to the Plan shall be subject to such
withholding and reporting requirements.
8. SETOFFS.
Except to the extent any Claims or Causes of Action are
released under the Plan, nothing in this Plan shall impair the right
of any Person, including each Debtor, to set off any obligation which
it has against any mutual obligation of another party in accordance
with applicable non-bankruptcy law. Reorganized Sun World may, but
shall not be required to, set off against any Allowed Claim or Allowed
Interest, and against the distributions to be made by Reorganized Sun
World pursuant to the Plan on account of such Claim or Interest,
claims of any nature that the Debtors or Reorganized Sun World may
have against the holder of such Allowed Claim or Allowed Interests
which are not released pursuant to the Plan; provided, however, that
neither the failure to effect such a setoff, nor the allowance of any
Claim or Interest against the Debtors or Reorganized Sun World, shall
constitute a waiver or release by the Debtors or Reorganized Sun World
of any claim that the Debtors or Reorganized Sun World may possess
against such holder.
S. DISCHARGE OF DEBTORS AND INJUNCTION.
The rights afforded in the Plan and the treatment of all
Claims and Interests therein shall be in exchange for and in complete
satisfaction, discharge, and release of all Claims and Interests of
any nature whatsoever, including any interest accrued on such Claims
from and after the relevant Petition Date, against the Debtors and the
Debtors in Possession or any of their assets or properties. Except as
otherwise provided in the Plan or the Confirmation Order: (i) on the
Effective Date, the Debtors shall be deemed discharged and released to
the fullest extent permitted by section 1141 of the Bankruptcy Code
from all Claims and Interests, including, but not limited to, demands,
liabilities, Claims and Interests that arose before the Confirmation
Date and all debts of the kind specified in sections 502(g), 502(h) or
502(i) of the Bankruptcy Code, whether or not: (A) a proof of Claim
or proof of Interest based on such debt or Interest is Filed or deemed
Filed pursuant to section 501 of the Bankruptcy Code, (B) a Claim or
Interest based on such debt or Interest is allowed pursuant to section
502 of the Bankruptcy Code or (C) the holder of a Claim or Interest
based on such debt or Interest has accepted the Plan; and (ii) all
Persons shall be precluded from asserting against Reorganized Sun
World, its successors, or their assets or properties any other or
further Claims or Interests based upon any act or omission,
transaction, or other activity of any kind or nature that occurred
prior to the Confirmation Date. Except as otherwise provided in the
Plan or the Confirmation Order, the Confirmation Order shall act as a
discharge of any and all Claims against and all debts and liabilities
of the Debtors, as provided in sections 524 and 1141 of the Bankruptcy
Code, and such discharge shall void any judgment against any of the
Debtors at any time obtained to the extent that it relates to a Claim
discharged.
Except as otherwise provided in the Plan or the
Confirmation Order, on and after the Effective Date, all Persons who
have held, currently hold or may hold a debt, Claim or Interest
discharged pursuant to the terms of the Plan are permanently enjoined
from taking any of the following actions on account of any such
discharged debt, Claim or Interest: (i) commencing or continuing in
any manner any action or other proceeding against the Debtors or
Reorganized Sun World or their successors or their respective
properties; (ii) enforcing, attaching, collecting or recovering in any
manner any judgment, award, decree or order against the Debtors or
Reorganized Sun World, or their successors or their respective
properties; (iii) creating, perfecting or enforcing any lien or
encumbrance against the Debtors or Reorganized Sun World, or their
successors or their respective properties; and (iv) commencing or
continuing any action, in any manner, in any place that does not
comply with or is inconsistent with the provisions of the Plan or the
Confirmation Order. Any Person injured by any willful violation of
such injunction shall recover actual damages, including costs and
attorneys' fees, and, in appropriate circumstances, may recover
punitive damages, from the willful violator.
T. NO LIABILITY FOR SOLICITATION OR PARTICIPATION.
As specified in section 1125(e) of the Bankruptcy
Code, Persons that solicit acceptances or rejections of the Plan
and/or that participate in the offer, issuance, sale, or purchase of
securities offered or sold under the Plan, in good faith and in
compliance with the applicable provisions of the Bankruptcy Code,
shall not be liable, on account of such solicitation or participation,
for violation of any applicable law, rule, or regulation governing the
solicitation of acceptances or rejections of the Plan or the offer,
issuance, sale, or purchase of securities.
U. LIMITATION OF LIABILITY.
Neither (a) the Debtors, the Debtors in Possession nor
Reorganized Sun World, or any of their respective post-Petition Date
employees, officers, directors, agents, or representatives, or any
professional persons employed by any of them, nor (b) the Creditors'
Committee or the Equity Committee, or any of their respective post
Petition Date members, agents, employees, directors, officers,
representatives, or professional advisors, shall have any
responsibility, or have or incur any liability, to any Person
whatsoever, under any theory of liability (except for any claim based
upon wilful misconduct or gross negligence), for any act taken or
omission made in good faith directly related to formulating,
implementing, confirming, or consummating the Plan, the Disclosure
Statement, or any contract, instrument, release, or other agreement or
document created in connection with the Plan, provided that nothing in
this paragraph shall limit the liability of any Person for breach of
any express obligation it has under the terms of this Plan or under
any agreement or other document entered into by such Person either
post-petition or in accordance with the terms of this Plan or for any
breach of a duty of care owed to any other Person occurring after the
Effective Date.
V. OTHER DOCUMENTS AND ACTIONS.
The Debtors, the Debtors in Possession and Reorganized Sun
World may, and shall, execute such documents and take such other
actions as are necessary to effectuate the transactions provided for
in the Plan.
W. CORPORATE ACTION.
The issuance of New Common Stock, the adoption of the
Amended Sun World Certificate and Amended Sun World Bylaws and the
selection of the Persons who will serve as the initial directors and
officers of Reorganized Sun World as of the Effective Date, and other
matters under the Plan involving the corporate structure of the
Debtors or corporate action by the Debtors, shall be deemed to have
occurred and be effective on and after the Effective Date without any
requirement of further action by the stockholders or directors of the
Debtors. Without limiting the foregoing, upon entry of the
Confirmation Order by the Clerk, the filing by the Debtors or
Reorganized Sun World of the Amended Sun World Certificate and the
adoption of the Amended Sun World Bylaws shall be authorized and
approved in all respects. On the Effective Date or as soon thereafter
as is practicable, pursuant to applicable state law, Reorganized Sun
World shall file with the applicable state governmental agencies or
offices the Amended Sun World Certificate, and the Amended Sun World
Bylaws shall be the bylaws of Reorganized Sun World.
X. RELEASES.
The Plan does not provide releases for any Causes of Action
which the Debtors or any holder of any Claim or Interest, or any other
interested party, has against any third party except as expressly
provided herein.
1. On the Effective Date, the Debtors and the
Subsidiaries will release unconditionally, and hereby are deemed to
release unconditionally, (a) each of the Debtors' post-Petition Date
officers, directors, employees, consultants, attorneys and
accountants, (b) the Buyer and each of its present officers,
directors, employees, consultants, attorneys and accountants, and (c)
the members of the Creditors' Committee and the Equity Committee
solely in their respective capacities as members or representatives of
the Creditors' Committee or Equity Committee, and each post-Petition
Date consultant, attorney and accountant of the Creditors' Committee
or the Equity Committee (the Persons specified in clauses (a) and (b)
are referred to collectively as, the "Releasees"), from any and all
claims, obligations, suits, judgments, damages, rights, causes of
action and liabilities whatsoever, whether known or unknown, foreseen
or unforeseen, existing or hereafter arising, in law, equity or
otherwise, based in whole or in part upon any act or omission,
transaction, event or other occurrence in any way directly relating to
the Plan taking place at any time (whether before or after the
Petition Date) on or prior to the Effective Date, provided that
nothing in this paragraph shall release any Person from liability for
breach of any express obligation it has under the terms of this Plan
or under any agreement or other document entered into by such Person
in accordance with the terms of this Plan.
2. In the event Hancock consents to the Plan, the Plan
shall release and discharge, and the Debtors and the Subsidiaries
shall be deemed to have unconditionally released and discharged,
Hancock and Hancock's present and former officers, directors,
stockholders, employees, consultants, attorneys, accountants and other
representatives (the foregoing Persons are referred to collectively as
the "Hancock Releasees"), from any and all claims, obligations, suits,
judgments, damages, rights, causes of action and liabilities
whatsoever, including, without limitation, any right of equitable
subordination, which any Debtor or Subsidiary asserts or may assert,
including any and all claims, obligations, suits, judgments, damages,
rights, causes of action and liabilities whatsoever arising prepetition
and any avoiding power or other claim or cause of action
arising post-petition arising from, based upon, or related to
Hancock's transactions and relationships with the Debtors, the
Reorganization Cases, or the Plan; in each case, whether known or
unknown, foreseen or unforeseen (including, without limitation, any
and all claims that might be brought by the stockholders of any Debtor
as a derivative action, any and all actions for the avoidance or
recovery of preferences or other avoidance or recovery actions
available under the Bankruptcy Code or other applicable law and any
unknown or unsuspected claims within the meaning of section 1542 of
the California Civil Code), existing or hereafter arising, in law,
equity or otherwise, based in whole or in part upon any act or
omission, transaction, event or other occurrence in any way taking
place at any time (whether before or after the Petition Dates) on or
prior to the Effective Date, provided that nothing in this paragraph
shall release any Person from liability for breach of any express
obligation it has under the terms of this Plan or under any agreement
or other document entered into by such Person in accordance with the
terms of this Plan.
3. In the event Credit Agricole consents to the Plan, the
Plan shall release and discharge, and the Debtors and the Subsidiaries
shall be deemed to have unconditionally released and discharged,
Credit Agricole and Credit Agricole's present and former officers,
directors, stockholders, employees, consultants, attorneys,
accountants and other representatives (the foregoing Persons are
referred to collectively as the "Credit Agricole Releasees"), from any
and all claims, obligations, suits, judgments, damages, rights, causes
of action and liabilities whatsoever, including, without limitation,
any right of equitable subordination, which any Debtor or Subsidiary
asserts or may assert, including any and all claims, obligations,
suits, judgments, damages, rights, causes of action and liabilities
whatsoever arising pre-petition and any avoiding power or other claim
or cause of action arising post-petition arising from, based upon, or
related to Credit Agricole's transactions and relationships with the
Debtors, the Reorganization Cases, or the Plan; in each case, whether
known or unknown, foreseen or unforeseen (including, without
limitation, any and all claims that might be brought by the
stockholders of any Debtor as a derivative action, any and all actions
for the avoidance or recovery of preferences or other avoidance or
recovery actions available under the Bankruptcy Code or other
applicable law and any unknown or unsuspected claims within the
meaning of section 1542 of the California Civil Code), existing or
hereafter arising, in law, equity or otherwise, based in whole or in
part upon any act or omission, transaction, event or other occurrence
in any way taking place at any time (whether before or after the
Petition Dates) on or prior to the Effective Date, provided that
nothing in this paragraph shall release any Person from liability for
breach of any express obligation it has under the terms of this Plan
or under any agreement or other document entered into by such Person
in accordance with the terms of this Plan.
4. Except as set forth in paragraph VIII X 10, for each
holder of a Class 8 Claim who consents to the Plan and does not
withhold releases in accordance with paragraph XII J, the Plan shall
release and discharge, and the Debtors and the Subsidiaries shall be
deemed to have unconditionally released and discharged, such holder,
and such holder's present and former consultants, attorneys,
accountants and other representatives (the foregoing Persons are
referred to collectively with released holders of Class 8 Claims as
the "Class 8 Releasees"), from any and all claims, obligations, suits,
judgments, damages, rights, causes of action and liabilities
whatsoever, including, without limitation, any right of equitable
subordination, which any Debtor or Subsidiary asserts or may assert
against any of them arising from or relating to their transactions and
relationships with the Debtors, the Reorganization Cases, or the Plan,
including any and all claims, obligations, suits, judgments, damages,
rights, causes of action and liabilities whatsoever arising prepetition
and any avoiding power or other claim or cause of action
arising post-petition, arising from, based upon, or related to such
Class 8 Releasee's transactions and relationships with the Debtors,
the Reorganization Cases, or the Plan, in each case, whether known or
unknown, foreseen or unforeseen (including, without limitation, any
and all claims that might be brought by any stockholders of any Debtor
as a derivative action, any and all actions for the avoidance or
recovery of preferences or other avoidance or recovery actions
available under the Bankruptcy Code or other applicable law and any
unknown or unsuspected claims within the meaning of section 1542 of
the California Civil Code), existing or hereafter arising, in law,
equity or otherwise, based in whole or in part upon any act or
omission, transaction, event or other occurrence in any way taking
place at any time (whether before or after the Petition Dates) on or
prior to the Effective Date, provided that nothing in this paragraph
shall release any Person from liability for breach of any express
obligation it has under the terms of this Plan or under any agreement
or other document entered into by such Person in accordance with the
terms of this Plan.
5. Except as set forth in paragraph VIII X 10, for each
holder of a Class 9 Interest who consents to the Plan, executes a Plan
Implementation Agreement, if required to do so, and does not withhold
releases in accordance with paragraph XII J, the Plan shall release
and discharge, and the Debtors and the Subsidiaries shall be deemed to
have unconditionally released and discharged, such holder and the
related and affiliated entities set forth in Exhibit B, and such
holder's present and former consultants, attorneys, accountants and
other representatives (the foregoing Persons are referred to
collectively with the released holders of Class 9 Interests as the
"Class 9 Releasees"), from any and all claims, obligations, suits,
judgments, damages, rights, causes of action and liabilities
whatsoever, including, without limitation, any right of equitable
subordination, which any Debtor or Subsidiary asserts or may assert
against any of them arising from or relating to their transactions and
relationships with the Debtors, the Reorganization Cases, or the Plan,
including any and all claims, obligations, suits, judgments, damages,
rights, causes of action and liabilities whatsoever arising prepetition
and any avoiding power or other claim or cause of action
arising post-petition, arising from, based upon, or related to such
Class 9 Releasee's transactions and relationships with the Debtors,
the Reorganization Cases, or the Plan, in each case, whether known or
unknown, foreseen or unforeseen (including, without limitation, any
and all claims that might be brought by any of the other stockholders
of any Debtor as a derivative action, any and all actions for the
avoidance or recovery of preferences or other avoidance or recovery
actions available under the Bankruptcy Code or other applicable law
and any unknown or unsuspected claims within the meaning of section
1542 of the California Civil Code), existing or hereafter arising, in
law, equity or otherwise, based in whole or in part upon any act or
omission, transaction, event or other occurrence in any way taking
place at any time (whether before or after the Petition Dates) on or
prior to the Effective Date, provided that nothing in this paragraph
shall release any Person from liability for breach of any express
obligation it has under the terms of this Plan or under any agreement
or other document entered into by such Person in accordance with the
terms of this Plan.
6. Except as set forth in paragraph VIII X 10, for each
holder of a Class 10 Interest who consents to the Plan, executes a
Plan Implementation Agreement, if required to do so, and does not
withhold releases in accordance with paragraph XII J, the Plan shall
release and discharge, and the Debtors and the Subsidiaries shall be
deemed to have unconditionally released and discharged, such holder
and the related or affiliated entities set forth in Exhibit B, and
such holder's present and former consultants, attorneys, accountants
and other representatives (the foregoing Persons are referred to
collectively with the holders of Class 10 Interests as the "Class 10
Releasees"), from any and all claims, obligations, suits, judgments,
damages, rights, causes of action and liabilities whatsoever,
including, without limitation, any right of equitable subordination,
which any Debtor or Subsidiary asserts or may assert against any of
them arising from or relating to their transactions and relationships
with the Debtors, the Reorganization Cases, or the Plan, including any
and all claims, obligations, suits, judgments, damages, rights, causes
of action and liabilities whatsoever arising pre-petition and any
avoiding power or other claim or cause of action arising post petition,
arising from, based upon, or related to such Class 10
Releasee's transactions and relationships with the Debtors, the
Reorganization Cases, or the Plan, in each case, whether known or
unknown, foreseen or unforeseen (including, without limitation, any
and all claims that might be brought by any of the other stockholders
of any Debtor as a derivative action, any and all actions for the
avoidance or recovery of preferences or other avoidance or recovery
actions available under the Bankruptcy Code or other applicable law
and any unknown or unsuspected claims within the meaning of section
1542 of the California Civil Code), existing or hereafter arising, in
law, equity or otherwise, based in whole or in part upon any act or
omission, transaction, event or other occurrence in any way taking
place at any time (whether before or after the Petition Dates) on or
prior to the Effective Date, provided that nothing in this paragraph
shall release any Person from liability for breach of any express
obligation it has under the terms of this Plan or under any agreement
or other document entered into by such Person in accordance with the
terms of this Plan.
7. Subject to the limitation provided below in connection
with the five year marketing agreements as it relates to Causes of
Action of the Debtors, in the event that Mr. Marguleas consents to the
Plan and executes a Plan Implementation Agreement, if required to do
so, the Plan shall release and discharge, and the Debtors and their
Subsidiaries shall be deemed to have unconditionally released and
discharged, Mr. Marguleas and all entities he controls who are engaged
in the business of growing crops as of the Effective Date, including
without limitation Ag-Accounting, Inc., and their present and former
consultants, attorneys, accountants and other representatives (the
foregoing Persons are referred to collectively with Mr. Marguleas and
all entities he controls who are engaged in the business of growing
crops as of the Effective Date as the "Marguleas Releasees"), from any
and all claims, obligations, suits, judgments, damages, rights, causes
of action and liabilities whatsoever, including, without limitation,
any right of equitable subordination, which any Debtor or Subsidiary
asserts or may assert against any of them arising from or relating to
their transactions and relationships with the Debtors, the
Reorganization Cases, or the Plan, including any and all claims,
obligations, suits, judgments, damages, rights, causes of action and
liabilities whatsoever arising pre-petition and any avoiding power or
other claim or cause of action arising post-petition, arising from,
based upon, or related to such Person's transactions and relationships
with the Debtors, the Reorganization Cases, or the Plan, in each case,
whether known or unknown, foreseen or unforeseen (including, without
limitation, any and all claims that might be brought by any
stockholder of any Debtor as a derivative action, any and all actions
for the avoidance or recovery of preferences or other avoidance or
recovery actions available under the Bankruptcy Code or other
applicable law and any unknown or unsuspected claims within the
meaning of section 1542 of the California Civil Code), existing or
hereafter arising, in law, equity or otherwise, based in whole or in
part upon any act or omission, transaction, event or other occurrence
in any way taking place at any time (whether before or after the
Petition Dates) on or prior to the Effective Date, provided that Mr.
Marguleas and all other Marguleas Releasees which are engaged in the
business of growing crops as of the Effective Date enter into
marketing agreements with Reorganized Sun World for all crops produced
by him and such Marguleas Releasees for a period of five (5) years
following the Effective Date, on market terms; and the release granted
to (x) Mr. Marguleas shall become effective over that period so that
the portion of any Causes of Action of the Debtors against Mr.
Marguleas released is equal to that portion of the five year period
that marketing agreements entered into by all Marguleas Releasees
which are engaged in the business of growing crops as of the Effective
Date remain in effect, except for those Marguleas Releasees which (1)
sell their ranches or remove Mr. Marguleas from his control position,
in either case over the opposition of Mr. Marguleas, and (2) terminate
or breach their marketing agreements, and (y) any other Marguleas
Releasee shall become effective so that the portion of any Causes of
Action of the Debtors against such Marguleas Releasee released is
equal to that portion of the five year period the marketing agreement
entered into by such Marguleas Releasee remains in effect; and
provided further that nothing in this paragraph shall release any
Person from liability for breach of any express obligation it has
under the terms of this Plan or under any agreement or other document
entered into by such Person in accordance with the terms of this Plan.
8. On the Effective Date, (a) each holder of a Claim or
Interest (other than a holder of a Class 8 Claim or a Class 9, 9A, 10
or 10A Interest) (i) who has accepted the Plan, (ii) whose Claim or
Interest is in a Class that has accepted or is deemed to have accepted
the Plan pursuant to section 1126 of the Bankruptcy Code or (iii) who
may be entitled to receive a distribution of property pursuant to the
Plan and (b) each holder of Class 8 Claim or Class 9, 9A, 10 or 10A
Interest who has not checked the "Withhold Release" box on such
holder's ballot, as described in paragraph XII J, shall be deemed to
have unconditionally released the Debtors, the Releasees, the Hancock
Releasees, the Credit Agricole Releasees, the Class 9 Releasees, the
Class 10 Releasees, the Marguleas Releasees, Zenith and all holders of
Class 8 Claims and Class 9 and Class 10 Interests except those who
check the "Withhold Release" box (collectively, the "Plan Releasees"),
from any and all rights, claims, causes of action, obligations, suits,
judgments, damages and liabilities whatsoever, including, without
limitation, any right of equitable subordination, which such holder
has or may be entitled to assert, whether known or unknown, foreseen
or unforeseen, existing or hereafter arising, in law, equity or
otherwise, based in whole or in part upon any act or omission,
transaction, event or other occurrence in any way relating to the
Plan, the Reorganization Cases or transactions involving the Debtors
(collectively, the "Released Matters") taking place at any time
(whether before or after the Petition Dates) on or prior to the
Effective Date except as set forth in Exhibit "A", and provided that
nothing in this paragraph shall release any Person from liability for
breach of any express obligation it has under the terms of this Plan
or under any agreement or other document entered into by such Person
in accordance with the terms of this Plan.
9. On the Effective Date, Cadiz and Reorganized Sun World
shall be deemed to have unconditionally released the Plan Releasees
(subject to the provisions of VIII X 7 as applicable) from any and all
rights, claims, causes of action, obligations, suits, judgments,
damages and liabilities whatsoever, including, without limitation, any
right of equitable subordination, which Cadiz or Reorganized Sun World
has or may be entitled to assert, whether known or unknown, foreseen
or unforeseen, existing or hereafter arising, in law, equity or
otherwise, based in whole or in part upon any act or omission,
transaction, event or other occurrence in any way relating to the
Released Matters taking place at any time (whether before or after the
Petition Dates) on or prior to the Effective Date, provided that
nothing in this paragraph shall release any Person from liability for
breach of any express obligation it has under the terms of this Plan
or under any agreement or other document entered into by such Person
in accordance with the terms of this Plan.
10. Notwithstanding the provisions of paragraphs VIII X
1 through 9 above:
a. If and to the extent that the Bankruptcy Court
concludes that the Plan cannot be confirmed with any portion of the
releases set forth in the foregoing paragraphs, then the Plan may be
confirmed with that portion of such release excised so as to give
effect as much as possible to the releases under this Plan without
precluding Confirmation of the Plan.
b. The releases made pursuant to the Plan (the "Plan
Releases") shall not release or be deemed to release any Debtor,
Reorganized Sun World or any other Person from their respective rights
and obligations under (i) any pre-petition unexpired lease or
executory contract of any Debtor which is assumed in accordance with
applicable bankruptcy law, (ii) any contract or agreement entered into
by any Debtor post-petition, or (iii) any other relationship arising
in the ordinary course of any Debtor's business while its
Reorganization Case is pending.
c. The Plan Releases shall not release or be deemed
to release the Debtors' obligations under Allowed or Disputed Claims
or Allowed or Disputed Interests, or the Debtors' setoffs,
counterclaims or defenses to any Disputed Claim or Disputed Interest,
provided, however, that any right of a Debtor to obtain an affirmative
recovery on account of any such setoff, counterclaim or defense shall
be released by a Plan Release granted by such Debtor to the holder of
such Disputed Claim or Disputed Interest. Allowed and Disputed Claims
and Allowed and Disputed Interests not released hereunder shall be
satisfied and discharged by the holders' receipt of the Cash and other
property to which they are entitled under the Plan.
d. The Plan Releases, as between the Marguleas
Releasees and the Class 9 and Class 10 Releasees only, shall not
release or be deemed to release Mr. Marguleas or the holders of Class
9 and Class 10 Interests from the claims and causes of action set
forth on Exhibit "A".
e. The Debtors' Plan Releases shall not release or
be deemed to release any Cause of Action any Debtor has or may have
against Ernst & Young, whether Ernst & Young has an Allowed Claim or
Disputed Claim or grants a Plan Release in favor of any Debtor.
11. The Plan contemplates the consent of the holders of
Class 1, Class 2 and Class 3 Claims and Mr. Marguleas and the Required
Consenting Interest Holders. Pursuant to the Plan, the Required
Consenting Interest Holders shall not have the right to withhold the
releases contemplated in paragraph VIII X 8. Any attempt by any of
the Required Consenting Interest Holders to withhold the releases
contemplated in paragraph VIII X 8 by marking the "Withhold Release"
box on the ballot shall be ineffective with respect to withholding the
releases contemplated in paragraph VIII X 8, but the ballot shall
remain effective with respect to acceptance or rejection of the Plan.
Y. RETIREE BENEFITS.
On and after the Effective Date, to the extent required by
section 1129(a)(13) of the Bankruptcy Code, Reorganized Sun World
shall continue to pay all retiree benefits (if any), as the term
"retiree benefits" is defined in section 1114(a) of the Bankruptcy
Code, maintained or established by the Debtors prior to the
Confirmation Date.
IX.
CONFIRMATION AND EFFECTIVE DATE CONDITIONS
A. CONDITIONS TO CONFIRMATION.
It shall be a condition to Confirmation that each of the
events and actions required by the Plan to occur or to be taken prior
to Confirmation shall have occurred or be taken, or the Debtors, or
the party whose obligations are conditioned by such occurrence or
actions, as applicable, shall have waived such occurrence or action
and the Bankruptcy Court shall confirm the Plan without such
occurrence or action.
B. CONDITIONS TO EFFECTIVE DATE.
The Plan shall not be consummated, and the Effective Date
shall not occur, unless and until each of the following conditions
precedent has been satisfied or (if waivable) duly waived as specified
below:
1. all conditions to Confirmation shall have been
satisfied or duly waived in writing by the Debtors or the party
entitled to waive such conditions;
2. the statutory fees owing the U.S. Trustee shall have
been paid in full;
3. the Buyer shall have exercised its option and
purchased the Marguleas Rayo Water Rights;
4. the New Hancock Documents shall have been executed and
delivered in form and substance acceptable to Hancock, and all
conditions precedent to the effectiveness thereof shall have been
satisfied (or waived by Hancock, in its sole discretion);
5. the New Credit Agricole Documents shall have been
executed and delivered in form and substance acceptable to Credit
Agricole, and all conditions precedent to the effectiveness thereof
shall have been satisfied (or waived by Credit Agricole, in its sole
discretion);
6. all payments required to be made on the Effective Date
shall have been made unless some other arrangement acceptable to
Credit Agricole and Hancock has been made among the Buyer, the Debtors
and the party to which such payment is required to be made; and
7. all other actions and documents necessary to implement
the provisions of the Plan shall have been effected or executed or, if
waivable, waived by the Person or Persons entitled to the benefit
thereof.
X.
CONFIRMABILITY OF PLAN AND CRAMDOWN
In the event at least one impaired Class of Claims votes to
accept the Plan (and at least one impaired Class either votes to
reject the Plan or is deemed to have rejected the Plan), the Debtors
shall request the Bankruptcy Court to confirm the Plan under the
cramdown provisions of the Bankruptcy Code.
XI.
RETENTION OF JURISDICTION
Notwithstanding the entry of the Confirmation Order or the
occurrence of the Effective Date, the Bankruptcy Court shall retain
such jurisdiction over the Reorganization Cases after the Effective
Date as is legally permissible, including, without limitation,
jurisdiction to:
1. Allow, disallow, determine, liquidate, classify or
establish the priority or secured or unsecured status of or estimate
any Claim or Interest, including, without limitation, the resolution
of any request for payment of any Administrative Claim and the
resolution of any and all objections to the allowance or priority of
Claims or Interests;
2. Grant or deny any and all applications for allowance
of compensation or reimbursement of expenses authorized pursuant to
the Bankruptcy Code or the Plan, for periods ending on or before the
Effective Date;
3. Resolve any motions pending on the Effective Date to
assume, assume and assign or reject any executory contract or
unexpired lease to which the Debtors are a party or with respect to
which the Debtors may be liable and to hear, determine and, if
necessary, liquidate, any and all Claims arising therefrom;
4. Ensure that distributions to holders of Allowed Claims
and Allowed Interests are accomplished pursuant to the provisions of
the Plan;
5. Decide or resolve any and all applications, motions,
adversary proceedings, or contested matters and any other matters
involving the Debtors or Debtors In Possession that may be pending on
the Effective Date;
6. Enter such Orders as may be necessary or appropriate
to implement or consummate the provisions of the Plan and all
contracts, instruments, releases, and other agreements or documents
created in connection with the Plan or the Disclosure Statement;
7. Resolve any and all controversies, suits or issues
that may arise in connection with the consummation, interpretation or
enforcement of the Plan or any Person's obligations incurred in
connection with the Plan;
8. Modify the Plan before or after the Effective Date
pursuant to section 1127 of the Bankruptcy Code, or modify the
Disclosure Statement or any contract, instrument, release, or other
agreement or document created in connection with the Plan or the
Disclosure Statement; or remedy any defect or omission or reconcile
any inconsistency in any Order, the Plan, the Disclosure Statement or
any contract, instrument, release, or other agreement or document
created in connection with the Plan or the Disclosure Statement, in
such manner as may be necessary or appropriate to consummate the Plan,
to the extent authorized by the Bankruptcy Code;
9. Issue injunctions, enter and implement other Orders
or take such other actions as may be necessary or appropriate to
restrain interference by any Person with consummation, performance or
enforcement of the Plan;
10. Enter and implement such Orders as are necessary or
appropriate if the Confirmation Order is for any reason modified,
stayed, reversed, revoked or vacated;
11. Determine any other matters that may arise in
connection with or related to the Plan, the Disclosure Statement, the
Confirmation Order or any contract, instrument, release, or other
agreement or document created in connection with the Plan or the
Disclosure Statement;
12. Determine the allocation of any Overbid in the event
such determination is not made by Confirmation; and
13. Enter an Order concluding the Reorganization Cases.
If the Bankruptcy Court abstains from exercising
jurisdiction or is otherwise without jurisdiction over any matter
arising out of the Reorganization Cases, including without limitation
the matters set forth in this Article, this Article shall have no
effect upon and shall not control, prohibit, or limit the exercise of
jurisdiction by any other court having competent jurisdiction with
respect to such matter.
XII.
MISCELLANEOUS PROVISIONS
A. MODIFICATION OF THE PLAN.
Subject to the restrictions on modifications of plans of
reorganization set forth in section 1127 of the Bankruptcy Code, the
Debtors reserve the right to alter, amend or modify the Plan before
its substantial consummation.
B. REVOCATION OF THE PLAN.
The Debtors reserve the right to revoke or withdraw the
Plan prior to the Confirmation Date. If the Debtors revoke or
withdraw the Plan, or if Confirmation does not occur, then the Plan
shall be null and void, and nothing contained in the Plan shall: (i)
constitute a waiver or release of any Claims by or against, or any
Interests in, the Debtors; or (ii) prejudice in any manner the rights
of the Debtors in any further proceedings involving the Debtors.
C. SUCCESSORS AND ASSIGNS.
The rights, benefits and obligations of any Person named or
referred to in the Plan shall be binding on, and shall inure to the
benefit of, any heir, executor, trustee, administrator, successor or
assign of such Person.
D. EXHIBITS.
Because the Exhibits to the Plan are voluminous, some of
those Exhibits may not be served with copies of the Plan. Any party
in interest may obtain a copy of such excluded Exhibits by
transmitting a written request for same to:
Laura J. Gordon
Latham & Watkins
633 West 5th Street, Suite 4000
Los Angeles, California 90071 (fax no. (213) 891-8763)
E. SATURDAY, SUNDAY OR LEGAL HOLIDAY.
If any payment or act under the Plan is required to be made
or performed on a date that is not a Business Day, then the making of
such payment or the performance of such act may be completed on the
next succeeding Business Day, but shall be deemed to have been
completed as of the required date.
F. POST-EFFECTIVE DATE EFFECT OF EVIDENCES OF CLAIMS OR
INTERESTS.
Notes, bonds, stock certificates and other evidences of
Claims against or Interests in the Debtors, and all Instruments of the
Debtors (in either case, other than those executed and delivered as
contemplated hereby in connection with the consummation of the Plan),
shall, effective upon the Effective Date, represent only the right to
participate in the distributions contemplated by the Plan.
G. HEADINGS.
The headings used in the Plan are inserted for convenience
only and neither constitute a portion of the Plan nor in any manner
affect the provisions of the Plan.
H. GOVERNING LAW.
Unless a rule of law or procedure is supplied by (i)
federal law (including the Bankruptcy Code, the Bankruptcy Rules or
the Local Bankruptcy Rules), or (ii) an express choice of law
provision in any agreement, contract, instrument, or document provided
for, or executed in connection with, the Plan, or (iii) applicable
non-bankruptcy law, the rights and obligations arising under the Plan
and any agreements, contracts, documents, and instruments executed in
connection with the Plan shall be governed by, and construed and
enforced in accordance with, the laws of the State of California
without giving effect to the principles of conflict of laws thereof.
I. SEVERABILITY OF PLAN PROVISIONS.
If, prior to Confirmation, any term or provision of the
Plan which does not govern the treatment of Claims or Interests
provided for herein or the conditions to the Effective Date is held by
the Bankruptcy Court to be invalid, void, or unenforceable, the
Bankruptcy Court shall have the power to alter and interpret such term
or provision to make it valid or enforceable to the maximum extent
practicable, consistent with the original purpose of the term or
provision held to be invalid, void, or unenforceable, and such term or
provision shall then be applicable as altered or interpreted.
Notwithstanding any such holding, alteration or interpretation, the
remainder of the terms and provisions of the Plan will remain in full
force and effect and will in no way be affected, impaired, or
invalidated by such holding, alteration, or interpretation. The
Confirmation Order shall constitute a judicial determination, and
shall provide, that each term and provision of the Plan, as it may
have been altered or interpreted in accordance with the foregoing, is
valid and enforceable pursuant to its terms.
J. BALLOTING.
Each holder of Allowed Claim or an Allowed Interest
entitled to vote on the Plan will receive a ballot. The ballot will
contain two boxes, one indicating acceptance of the Plan and the other
indicating rejection of the Plan. Holders of Allowed Claims or
Allowed Interests who elect to vote on the Plan must mark one or the
other box pursuant to the instructions contained on the ballot. Any
executed Ballot that does not indicate acceptance or rejection of the
Plan will be considered a non-vote and will not be counted as an
acceptance or rejection of the Plan.
In addition to the boxes on the Ballot described above, the
Ballots for holders of Allowed Class 8 Claims and Allowed Class 9, 9A,
10 and 10A Interests shall contain an additional box entitled
"Withhold Release." As set forth in paragraph VIII X above,
Confirmation of the Plan will release certain parties from all claims
and causes of action which the Debtors and/or holders of Allowed
Claims and Allowed Interests have against such parties arising from
their transactions with and relationship to the Debtors or their
involvement in the Reorganization Cases. If a holder of an Allowed
Class 8 Claim or an Allowed Class 9, 9A, 10 or 10A Interest desires to
withhold this release as it applies to claims or causes of action
which the holder may have against such parties, the holder must mark
the "Withhold Release" box on the Ballot. Failure to mark the
"Withhold Release" box will be deemed a consent to granting the
releases set forth in the Plan and described above. Holders of
Allowed Class 8 Claims and Allowed Class 9, 9A, 10 and 10A Interests
which do not mark the "Withhold Release" box will be released from any
Causes of Action which the Debtors have or may have against them, as
well as claims and causes of action which the parties set forth in
paragraph VIII X 8 hold or may hold against them. Holders of Allowed
Class 8 Claims and Allowed Class 9, 9A, 10 and 10A Interests which
mark the "Withhold Release" box shall not be entitled to such a
release by the Debtors and will not be deemed to be released from
claims and causes of action held, or which may be held, by the parties
set forth in VIII X 8.
If Confirmation does not occur on or prior to August 16,
1996, the Creditors' Committee, in its sole discretion, acting on
behalf of the holders of Class 8 Claims, may declare the Ballots of
holders of Class 8 Claims to be invalid and require that Class 8 be
resolicited or that the Plan be confirmed pursuant to section 1129(b)
of the Bankruptcy Code.
K. NO ADMISSIONS OR WAIVER OF OBJECTIONS.
Notwithstanding anything herein to the contrary, nothing
contained in the Plan shall be deemed as an admission by the Debtors
or any other party with respect to any matter set forth herein
including, without limitation, liability on any Claim or the propriety
of any Claims classification. Because this Plan is premised on a
consensual arrangement and subject to the consent of Classes 1 and 2,
prior to Confirmation of this Plan, no party, including, without
limitation, the Debtors, the Creditors' Committee, the Equity
Committee, any Secured or Unsecured creditor or any Interest holder,
shall be deemed to have waived any objection which it may have to this
or any other plan of reorganization which may be filed in the
Reorganization Cases. The Debtors are not bound by any statements
herein or in the Disclosure Statement as judicial admissions.
DATED: June 3, 1996:
SUN WORLD INTERNATIONAL, INC.,
a Delaware corporation
By /s/ Richard Nevins
------------------------------------
Richard Nevins
Acting Chief Operating Officer
SUN WORLD, INC.,
a Delaware corporation
By /s/ Richard Nevins
----------------------------------------
Richard Nevins
Acting Chief Operating Officer
COACHELLA GROWERS,
a California non-profit
agricultural cooperative
By /s/ Richard Nevins
-------------------------------------
Richard Nevins
Acting Chief Operating Officer
SUN DESERT, INC.,
a Delaware corporation
By /s/ Richard Nevins
---------------------------------------
Richard Nevins
Acting Chief Operating Officer
Presented by:
LATHAM & WATKINS
Michael S. Lurey
Robert A. Klyman
Gregory O. Lunt
By_________________________________
Michael S. Lurey
Attorneys for Debtors and
Debtor-in-Possession
<PAGE>
TABLE OF CONTENTS
Page
I. INTRODUCTION. . . . . . . . . . . . . . . . . . . 2
II. DEFINITIONS, INTERPRETATION AND RULES OF
CONSTRUCTION. . . . . . . . . . . . . . . . . . . 3
A. Definitions. . . . . . . . . . . . . . . . . 3
B. Interpretation And Computation Of Time.. . . 16
1. Defined Terms.. . . . . . . . . . . . . 16
2. Rules Of Interpretation.. . . . . . . . 16
3. Time Periods. . . . . . . . . . . . . . 17
III. DESIGNATION OF CLASSES OF CLAIMS AND INTERESTS. . 17
A. Secured Claims . . . . . . . . . . . . . . . 18
B. Unsecured Claims.. . . . . . . . . . . . . . 18
C. Interests And Claims Relating To Interests.. 19
IV. GENERAL PROVISIONS FOR TREATMENT OF CLAIMS
AND INTERESTS . . . . . . . . . . . . . . . . . . 19
A. Unclassified Claims. . . . . . . . . . . . . 19
1. Administrative Claims.. . . . . . . . . 19
a. General. . . . . . . . . . . . . . 19
b. Payment Of Statutory Fees. . . . . 20
c. Bar Date For Administrative Claims. 20
(1) General Provisions. . . . . . 20
(2) Professionals.. . . . . . . . 20
(3) Ordinary Course Liabilities.. 21
(4) Tax Claims. . . . . . . . . . 21
2. Treatment Of Priority Tax Claims. . . . 21
B. Treatment of Claims. . . . . . . . . . . . . 22
1. Class 1 (Hancock).. . . . . . . . . . . 22
a. Payments on the Effective Date . . 22
b. Terms of the New Hancock Note. . . 22
c. Collateral Securing the New Hancock
Note . . . . . . . . . . . . . . . .23
d. Sale Of Certain Collateral . . . . 24
e. Release of Hancock . . . . . . . . 25
f. Execution of Documents . . . . . . 25
2. Class 2 (Credit Agricole).. . . . . . . 25
a. Payments on the Effective Date . . 25
b. Terms of the New Credit Agricole
Note. . . . . . . . . . . . . . . . 26
c. Collateral Securing the New Credit
Agricole Note . . . . . . . . . . 27
d. Sale Of Certain Collateral . . . . 28
e. Application of Excess Cash;
Maintenance of a
Minimum Cash Balance . . . . . . . 28
f. Release of Credit Agricole . . . . 28
g. Execution of Documents .. . . . . . 29
3. Class 3 (Zenith).. . . .. . . . . . 29
4A. Class 4A (Weyerhaeuser).. . . . . . . . 29
4B. Classes 4B et seq.
(Other Secured Claims). . . . . . . . . 30
5. Class 5 (Priority Unsecured Claims). . .31
6. Class 6 (Unsecured Non-Priority
Claims of $250.00 or
Less).. . . . . . . . . . . . . . . . 31
7. Class 7 (Grower Claims).. . . . . . . . 32
8. Class 8 (Unsecured Non
Priority Claims In Excess of
$250.00). . . . . . . . . . . . . . . 32
C. Interests . . . . . . . . . . . . . . . 33
1. Class 9. . . . . . . . . . . . . . 33
2. Class 9A . . . . . . . . . . . . . . . . . 33
3. Class 10 . . . . . . . . . . . . . . . . . 34
4. Class 10A. . . . . . . . . . . . . . . . . 34
5. Compromise with Minority Shareholders. . . 34
6. Compromise with Mr. Marguleas. . . . . . . 35
7. Class 11 . . . . . . . . . . . . . . . . . 36
8. Class 12 . . . . . . . . . . . . . . . . . 36
D. Other Interests and Intercompany Claims . . . . 36
1. Class 13 . . . . . . . . . . . . . . . . . 36
2. Class 14 . . . . . . . . . . . . . . . . . 36
3. Class 15 . . . . . . . . . . . . . . . . . 37
4. Class 16 . . . . . . . . . . . . . . . . . 37
V. OVERBID. . . . . . . . . . . . . . . . . . . . . . . 37
A. Overbid Procedure.. . . . . . . . . . . . . . . 37
B. Distribution of Net Overbid . . . . . . . . . . 39
VI. INDIVIDUAL HOLDER PROOFS OF INTEREST . . . . . . . . 39
VII. TREATMENT OF EXECUTORY CONTRACTS AND
UNEXPIRED LEASES. . . . . . . . . . . . . . . . 40
VIII. MEANS FOR EXECUTION AND IMPLEMENTATION OF
THE PLAN. . . . . . . . . . . . . . . . . . . . 40
A. Overview of Plan Implementation . . . . . . . . 40
B. Distributions.. . . . . . . . . . . . . . . . . 41
C. Pro Rata Distribution.. . . . . . . . . . . . . 42
D. Termination Of Contractual Subordination
Rights. . . . . . . . . . . . . . . . . . . . . 42
E. Substantive Consolidation.. . . . . . . . . . . 42
F. Cancellation Of Old Securities And Related
Agreements. . . . . . . . . . . . . . . . . . . 43
G. New Credit Agricole Credit Agreement, New
Credit Agricole Deed of Trust and New
Credit Agricole Note; New Hancock
Credit Agreement, New Hancock Deed of Trust
and New Hancock Note. . . . . . . . . . . . . . 43
H. Changes of Core Business and Sales of Property. 45
I. Working Capital.. . . . . . . . . . . . . . . . 46
J. Committees. . . . . . . . . . . . . . . . . . . 46
K. Disposition of Reserve Accounts.. . . . . . . . 46
L. Vesting Of Assets.. . . . . . . . . . . . . . . 48
M. Preservation Of Causes Of Action. . . . . . . . 48
N. Prosecution Of Causes of Action and
Litigation Recoveries. . . . . . . . . . . . . .48
O. Certificate Of Incorporation And Bylaw
Amendments. . . . . . . . . . . . . . . . . . . 49
P. Management Of Reorganized Sun World.. . . . . . 49
Q. Objections To Claims. . . . . . . . . . . . . . 50
R. Distribution Of Property Under The Plan.. . . . 50
1. Disbursing Agent.. . . . . . . . . . . . . 50
2. Disputed Claims and Interests. . . . . . . 51
3. Distributions to Non-Disputed Claims.. . . 52
4. Manner Of Payment Under The Plan.. . . . . 52
5. Surrender of Instruments.. . . . . . . . . 52
a. Requirements to Surrender Instruments. 52
b. Lost, Stolen, Mutilated Or Destroyed
Instruments. . . . . . . . . . . 53
c. Effect Of Failure To Surrender
Instruments. . . . . . . . . . . 53
6. Delivery Of Distributions And
Undeliverable Or Unclaimed Distributions. 54
a. Delivery Of Distributions In General. 54
b. Undeliverable Distributions.. . . . . 54
(1) Holding And Investment Of
Undeliverable Property. . . 54
(2) Distribution Of Undeliverable
Property After It Becomes
Deliverable And Failure To
Claim Undeliverable
Property. . . . . . . . . . 55
7. Compliance With Tax Requirements.. . . . . 55
8. Setoffs. . . . . . . . . . . . . . . . . . 55
S. Discharge Of Debtors And Injunction.. . . . . . 56
T. No Liability For Solicitation Or Participation. 57
U. Limitation Of Liability.. . . . . . . . . . . . 57
V. Other Documents And Actions.. . . . . . . . . . 58
W. Corporate Action. . . . . . . . . . . . . . . . 58
X. Releases. . . . . . . . . . . . . . . . . . . . 58
Y. Retiree Benefits. . . . . . . . . . . . . . . . 67
IX. CONFIRMATION AND EFFECTIVE DATE CONDITIONS . . . . . 67
A. Conditions To Confirmation. . . . . . . . . . . 67
B. Conditions To Effective Date. . . . . . . . . . 67
X. CONFIRMABILITY OF PLAN AND CRAMDOWN. . . . . . . . . 68
XI. RETENTION OF JURISDICTION. . . . . . . . . . . . . . 68
XII. MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . 70
A. Modification Of The Plan. . . . . . . . . . . . 70
B. Revocation Of The Plan. . . . . . . . . . . . . 70
C. Successors And Assigns. . . . . . . . . . . . . 70
D. Exhibits. . . . . . . . . . . . . . . . . . . . 71
E. Saturday, Sunday Or Legal Holiday.. . . . . . . 71
F. Post-Effective Date Effect Of Evidences Of
Claims Or Interests . . . . . . . . . . . . . . 71
G. Headings. . . . . . . . . . . . . . . . . . . . 71
H. Governing Law.. . . . . . . . . . . . . . . . . 71
I. Severability Of Plan Provisions.. . . . . . . . 72
J. Balloting . . . . . . . . . . . . . . . . . . . 72
K. No Admissions or Waiver of Objections.. . . . . 74
Exhibit "A": Shareholder Reserved Claims. . . . . . . . 76
Exhibit "B": Related and Affiliated Entities. . . . . . 78
EXHIBIT 2.2
-------------
PLAN IMPLEMENTATION AGREEMENT
This Plan Implementation Agreement (this "Agreement") is
made and entered into as of July 12, 1996, by and among Sun World
International, Inc., a Delaware corporation ("SWII"), Sun World, Inc.,
a Delaware corporation ("Sun World"), Coachella Growers, a California
non-profit agricultural cooperative ("Coachella"), and Sun Desert,
Inc., a Delaware corporation ("Sun Desert") (collectively, the
"Debtors"), and Cadiz Land Company, Inc., a Delaware corporation
("Cadiz").
RECITALS
A. On October 3, 1994 (the "SWII Petition Date"), SWII and Sun
World filed for protection under Chapter 11 of the United States
Bankruptcy Code. On December 13, 1994, Sun Desert, AAI Services,
Inc., a wholly owned subsidiary of Sun Desert ("AAI"), and Coachella
filed for protection under Chapter 11 of the United States Bankruptcy
Code ("Chapter 11"). The filings of SWII, Sun World, Sun Desert, AAI,
and Coachella have been administratively consolidated (Case No. SB 94-23212 DN,
U.S.B.C., C.D. Cal.) (the "Case").
B. The Debtors have filed a plan of reorganization entitled
the Modified Fourth Amended Consolidated Plan of Reorganization dated
June 3, 1996, a copy of which is attached hereto as Exhibit A (as the
same may be further amended, restated, modified or supplemented, the
"Plan"). Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to them under the Plan.
C. Pursuant to the Plan, the parties hereto desire that, as of
the Effective Date, each of the following events occur concurrently
therewith, assuming all other conditions set forth in or required to
be satisfied pursuant to the Plan have been satisfied: (i) SWII merge
into and with Sun World, with Sun World being the surviving
corporation, (ii) Sun World, as the surviving corporation, be renamed
"Sun World International, Inc." (the "Successor Sun World"), (iii)
Cadiz offer to purchase all of the capital stock of Successor Sun
World, issued and outstanding as of the Effective Date, and (iv) Cadiz
purchase all of the capital stock of Successor Sun World tendered by
the holders of any such capital stock (with any outstanding capital
stock not so tendered being immediately cancelled (the "Cancellation")
and thereafter representing only the right to receive certain
distributions to which the holder is entitled under the Plan in
respect of such securities), such that immediately following such
purchase and sale (and Cancellation, if applicable), Cadiz will own
100% of the issued and outstanding capital stock of Successor Sun
World. On and after the Effective Date, Successor Sun World shall be
referred to as Reorganized Sun World, as contemplated by the Plan.
D. This Agreement is the Plan Implementation Agreement
referred to in the Plan.
NOW, THEREFORE, in consideration of the promises, covenants
and conditions contained herein and for other valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
AGREEMENT
1. COVENANTS OF CADIZ.
(a) PERFORMANCE OF THE PLAN. Cadiz hereby agrees to use
its best efforts to take all actions which are necessary or
desirable to perform the terms of the Plan and/or have the terms
of the Plan performed, pursuant to the terms therein, including,
without limitation, (i) purchasing from the holders thereof (the
"Common Holders") all of the common stock of Successor Sun World,
par value $1.00 per share, issued and outstanding as of the
Effective Date (the "New Common Stock"), (ii) purchasing from the
holders thereof (the "Preferred Holders") all of the Series I
preferred stock of Successor Sun World, par value $300.00 per
share, issued and outstanding as of the Effective Date (the "New
Preferred Stock"), in either case pursuant to the terms of those
certain stock purchase agreements, in substantially the forms
attached hereto as Exhibit B-1 and Exhibit B-2, (iii) making all
payments in full to the Common Holders, the Preferred Holders and
the holders of any shares of capital stock which were cancelled,
as required under the Plan (including without limitation,
pursuant to Section C.5 of Article IV of the Plan), and (iv) if
Cadiz does not purchase any shares of the New Common Stock or New
Preferred Stock pursuant to (i) or (ii) above, purchasing one or
more newly issued shares of capital stock of Successor Sun World
at an aggregate purchase price of $3,000,000.
(b) FULFILLMENT OF CONDITIONS AND COVENANTS. Cadiz shall
not voluntarily undertake any course of action inconsistent with
the satisfaction of the requirements or conditions applicable to
Cadiz as set forth in this Agreement or made applicable pursuant
to the Plan and shall promptly do all acts and take all such
steps necessary or desirable to enable Cadiz to perform as early
as possible the obligations herein and therein provided.
(c) SUPPORT FOR PLAN. Cadiz shall support confirmation
of the Plan and shall take all steps reasonable or desirable to
assist the Debtors in securing confirmation of the Plan.
(d) IMPLEMENTATION OF PLAN. Cadiz shall take any and all
actions necessary or desirable to implement the Plan, including
without limitation, those actions required by Article VIII of the
Plan (including without limitation, Cadiz' obligation to fund,
from its own sources, (i) the Equity Cash Payment (pursuant to
Section C.5 of Article IV of the Plan), (ii) the Hancock Cash
Payment, the Credit Agricole Cash Payment, and the additional
$2,000,000 Cash payment to Credit Agricole in consideration of
the Released Claims (as further described in Section B.2 of
Article IV of the Plan), (iii) the $15,000,000 deposit into the
Unsecured Claims Reserve Account and all further amounts required
by the Plan to satisfy Allowed Unsecured Claims, (iv) the amounts
required to pay Allowed Class 6 Claims and (v) $15,000,000 as a
Capital Contribution for Reorganized Sun World's working capital
purposes), and will not voluntarily undertake any course of
action inconsistent with the satisfaction of the requirements or
conditions applicable to Cadiz as set forth in the Plan.
(e) EXPENSES OF AAI. Reorganized Sun World shall pay all
expenses of administration arising out of AAI's Chapter 11 case
that are incurred after the Effective Date.
2. COVENANTS OF DEBTORS.
(a) PERFORMANCE OF THE PLAN. Each Debtor hereby agrees
to use its best efforts to take all actions which are necessary
or desirable to perform the terms of the Plan and/or have the
terms of the Plan performed, pursuant to the terms therein,
including, without limitation, (i) causing SWII to merge with and
into Sun World, with Sun World as the surviving corporation, and
(ii) causing Sun World, as the surviving corporation, to be
renamed "Sun World International, Inc."
(b) FULFILLMENT OF CONDITIONS AND COVENANTS. The Debtors
shall not voluntarily undertake any course of action inconsistent
with the satisfaction of the requirements or conditions
applicable to the Debtors as set forth in this Agreement or made
applicable pursuant to the Plan and shall promptly do all acts
and take all such steps necessary or desirable to enable the
Debtors to perform as early as possible the obligations herein
and therein provided.
(c) SUPPORT FOR PLAN. Pursuant to the terms therein, the
Debtors shall support confirmation of the Plan and shall take all
steps reasonable or desirable to assist Cadiz in securing
confirmation of the Plan.
3. REPRESENTATIONS AND WARRANTIES OF CADIZ. Cadiz hereby
represents and warrants to the Debtors that, as of the date hereof:
(a) ORGANIZATION. Cadiz has been duly incorporated and
is validly existing and in good standing under the laws of the
State of Delaware with corporate power and authority to enter
into this Agreement and to consummate the transactions
contemplated hereby.
(b) AUTHORITY. The execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated hereby have been authorized by all necessary
corporate action of Cadiz, and this Agreement and any related
documents have been duly executed and delivered by Cadiz.
(c) ENFORCEABILITY. This Agreement (including exhibits)
constitutes the legal, valid and binding obligation of Cadiz,
enforceable against Cadiz in accordance with its terms.
(d) NO VIOLATION. The execution and delivery of this
Agreement and the performance of the terms hereunder do not: (i)
violate any statute, rule or regulation applicable to Cadiz, (ii)
violate the provisions of the Certificate of Incorporation or
Bylaws of Cadiz, or (iii) result in the breach of or a default
under any lease, contract, document, understanding, agreement or
instrument affecting Cadiz or its assets, in any material
respect, or require any consents, approvals, authorizations,
registrations, declarations or filings by Cadiz under any
statute, rule or regulation applicable to Cadiz, except as
contemplated by the Plan.
4. REPRESENTATIONS AND WARRANTIES OF THE DEBTORS. The Debtors
hereby represent and warrant to Cadiz that, as of the date hereof:
(a) AUTHORITY. The execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary
corporate action of the Debtors, and this Agreement has been duly
executed and delivered by the Debtors.
(b) ENFORCEABILITY. Subject to Section 8 hereof, this
Agreement constitutes a legal, valid and binding obligation of
the Debtors, enforceable against the Debtors in accordance with
its terms.
(c) NO VIOLATION. The execution and delivery of this
Agreement and the performance of the terms hereunder do not: (i)
violate any statute, rule or regulation applicable to the
Debtors, (ii) violate the provisions of the Articles of
Incorporation or Certificate of Incorporation, as the case may
be, or Bylaws of the Debtors, or (iii) result in the breach of
or a default under any lease, contract, document, understanding,
agreement or instrument affecting the Debtors or any of its
assets, in any material respect, or require any consents,
approvals, authorizations, registrations, declarations or filings
by the Debtors under any statute, rule or regulation applicable
to the Debtors, except as contemplated by the Plan.
5. REMEDIES. The parties hereto hereby consent to the
jurisdiction of the United States Bankruptcy Court for the Central
District of California (or, such other court as may exercise
jurisdiction over the Case or any part thereof) to enforce the terms
of this Agreement, including entry of orders to compel one or all of
the parties to perform in accordance with the terms hereof.
6. AGREEMENT TO THE PLAN. Cadiz acknowledges and agrees that
(a) this Agreement is being executed pursuant to, and is subject in
all respects to, the Plan, the terms and conditions of which are
incorporated herein as if set forth fully herein, and (b) the
execution of this Agreement by Cadiz is material inducement for the
Debtors to sponsor the Plan. Cadiz is familiar with, and acknowledges
and agrees to, all the terms, conditions and provisions of the Plan.
7. THIRD PARTY BENEFICIARY. The parties hereto hereby agree
that (a) AAI is a third party beneficiary of this Agreement with full
rights to enforce this Agreement as if it were a party hereto and (b)
AAI may rely upon the terms and provisions of Section 1(e) of this
Agreement, which provision is entered into for the protection and
benefit of AAI.
8. COURT APPROVAL. The obligations of the Debtors hereunder
shall be subject to the approval of the United States Bankruptcy
Court, Central District of California, which approval will be sought
by the Debtors pursuant to the Plan.
9. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement, together with all
exhibits hereto, and all documents referred to herein (including
the Plan), shall constitute the entire agreement between the
parties with respect to the subject matter hereof, supersedes all
other and prior agreements on the same subject, whether written
or oral, and contains all of the covenants and agreements between
the parties with respect to the subject matter hereof. Each
party to this Agreement acknowledges that no representations,
inducements, promises, or agreements, orally or otherwise, have
been made by the other party(ies), or by anyone acting on behalf
of any party, that are not embodied herein, and that no other
agreement, statement, or promise not contained in this Agreement
shall be valid or binding. In any conflict between the terms and
provisions of this Agreement and the terms and provisions of the
Plan, the terms and provisions of the Plan shall govern.
(b) SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the parties and
their respective heirs (as applicable), legal representatives,
and permitted successors and assigns. No party may assign this
Agreement or the rights, interests or obligations hereunder. Any
assignment or delegation in contravention of this Section shall
be null and void.
(c) COUNTERPARTS. This Agreement, and any amendments
thereto, may be executed in counterparts, each of which shall
constitute an original document, but which together shall
constitute one and the same instrument.
(d) HEADINGS. The section headings contained in this
Agreement are inserted for convenience only and shall not affect
in any way the meaning or interpretation of this Agreement.
(e) NOTICES. Any notices required or permitted to be
given hereunder by any party to the other shall be in writing and
shall be deemed delivered upon personal delivery; twenty-four
(24) hours following deposit with a courier for overnight
delivery; or seventy-two (72) hours following deposit in the U.S.
Mail, registered or certified mail, postage prepaid, return receipt
requested, addressed to the parties at the last known
address of such party or such other addresses as the parties may
specify in writing.
(f) GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of
California.
(g) AMENDMENT. This Agreement may be amended at any time
by agreement of the parties, provided that any amendment shall
be in writing and executed by all parties; provided, however,
that no amendment may contain provisions in conflict with or
inconsistent with the rights and obligations of the parties
hereto under the Plan.
(h) SEVERABILITY. If any provision of this Agreement is
held by a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions will nevertheless
continue in full force and effect, unless such invalidity or
unenforceability would defeat an essential business purpose of
this Agreement.
(i) FEES AND EXPENSES. Unless specifically provided to
the contrary herein, each party agrees to bear its own expenses
including, without limitation, attorneys' and accountants' fees
in connection with the preparation of this Agreement and the
transactions contemplated hereby.
(j) ATTORNEYS' FEES. Should any of Cadiz or the Debtors
institute any action or procedure to enforce this Agreement or
any provision hereof, or for damages by reason of any alleged
breach of this Agreement or of any provision hereof, or for a
declaration of rights hereunder, the prevailing party in any such
action or proceeding shall be entitled to receive from the other
party all costs and expenses, including without limitation
reasonable attorneys' fees, incurred by the prevailing party in
connection with such action or proceeding.
(k) FURTHER ASSURANCES. The parties shall take such
actions and execute and deliver such further documentation as may
reasonably be required in order to give effect to the
transactions contemplated by this Agreement and the intentions
of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Plan Implementation Agreement to be duly executed as of the date first
above written.
CADIZ LAND COMPANY, INC.,
a Delaware corporation
By: /s/ Keith Brackpool
____________________________________________
Name: Keith Brackpool
Title: Chief Executive Officer
SUN WORLD INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Richard Nevins
____________________________________________
Name: Richard Nevins
Title: Chief Restructure Officer
SUN WORLD, INC.,
a Delaware corporation
By: /s/ Richard Nevins
____________________________________________
Name: Richard Nevins
Title: Chief Restructure Officer
COACHELLA GROWERS,
a California non-profit agricultural cooperative
By: /s/ Richard Nevins
____________________________________________
Name: Richard Nevins
Title: Chief Restructure Officer
SUN DESERT, INC.,
a Delaware corporation
By: /s/ Richard Nevins
____________________________________________
Name: Richard Nevins
Title: Chief Restructure Officer
ACCEPTED AND AGREED:
AAI SERVICES, INC.,
a California corporation
By: /s/ Richard Nevins
____________________________________________
Name: Richard Nevins
Title: Chief Restructure Officer
PLAN IMPLEMENTATION AGREEMENT
EXHIBIT A
PLAN
Not to be attached.
PLAN IMPLEMENTATION AGREEMENT
EXHIBIT B-1
STOCK PURCHASE AGREEMENT
Not to be attached.
PLAN IMPLEMENTATION AGREEMENT
EXHIBIT B-2
STOCK PURCHASE AGREEMENT
Not to be attached.
EXHIBIT 10.1
SUPPLEMENT TO PLAN SUPPORT AGREEMENT
This Supplement to Plan Support Agreement (the
"Supplement"), dated as of June 3, 1996, is entered into by and
between Cadiz Land Company, Inc. ("Cadiz") and the Official
Committee of Creditors Holding Unsecured Claims in the jointly
administered Chapter 11 cases of Sun World International, Inc.
and Sun World, Inc., Case No. SB 94-23212 DN, U.S.B.C., C.D.
Cal. (the "Committee" and, together with Cadiz, the "Parties").
This Supplement is entered into in light of each of the
following facts:
A. The Parties entered into that certain Plan Support
Agreement (the "PSA") as of December 11, 1995.
B. In connection with the execution of the PSA, Cadiz
delivered to the Committee, and the Committee deposited in its
counsel's client trust account, $1 million (referred to in the
PSA, together with interest earned thereon, as the Special
Deposit).
C. On January 2, 1996, the Court entered its "Order
Authorizing Creditors' Committee to enter into Plan Support
Agreement with Cadiz Land Company, Inc.; and (2) Approving
Overbid Procedures, Expense Reimbursement to Cadiz Land Company,
Inc. and Disposition of Special Deposit" (the "Order"). The
Order reflects certain modifications to the PSA to which the
Parties consented.
D. Effective January 12, 1996, the Parties waived certain
provisions of the PSA in order to permit the PSA to become
effective notwithstanding an appeal of the Order by Caisse
Nationale de Credit Agricole (the "Waiver").
E. Effective March 13, 1996, the Parties executed a
Modification of the PSA (the "Modification") that, among other
things, extended the deadline to confirm the New Plan. (The
PSA, subject to the Modifications contained in the Order, the
Waiver and the Modification, is referred to as the "Agreement.")
F. The definition of "New Plan" in the Agreement includes
"any plan of reorganization proposed by Cadiz that materially
conforms to the current Plan as modified by Exhibit A, together
with any modification required to comply with the Code or that
increases the prospects for confirmation and that does not have
a materially adverse effect on Cadiz."
G. Since March 13, 1996, the Parties have negotiated over
the terms of a consensual plan with each other and other
creditors and interest holders and, subject to the provisions
below, the Parties have modified the provisions of the New Plan
and the timetable for its confirmation. The modifications to
the New Plan are reflected in the Debtors' Fourth Amended
Consolidated Plan of Reorganization dated June 3, 1996, which
has been filed with the Bankruptcy Court (the "Filed Plan").
H. Cadiz has agreed to support and pursue confirmation of
the Filed Plan, and pursuant to the terms hereof, the Committee
has agreed to support it in accordance with its terms.
In light of the foregoing, the Parties agree as follows:
1. DEFINITIONS.
Otherwise undefined capitalized terms in the Supplement
shall have the meanings ascribed to them herein or in the
Agreement. Undefined terms that are used in the Bankruptcy Code
or Rules shall be accorded the meanings given them in the
Bankruptcy Code or Rules, as applicable.
2. THE FILED PLAN.
2.1 The Parties hereby agree (i) that the Filed plan falls
within the definition of the "New Plan" set forth in the
Agreement and quoted above and (ii), to the extent it does not,
that any provision of the Agreement or of this Supplement
applicable to the New Plan shall be applicable to the Filed
Plan.
2.2 The Parties affirm that their rights and obligations
under the Agreement and this Supplement with respect to the Firm
Proposal and the New Plan apply equally with respect to the
Filed Plan.
3. TIMING OF CONFIRMATION
3.1 Pursuant to Sections 4.2(c) and 4.3(a)(v) of the
Agreement, the Committee hereby designates August 25, 1996 as
the last day by which there shall be a Final Order confirming
the New Plan.
4. DISPOSITION OF THE SPECIAL DEPOSIT
4.1 Pursuant to the Section 4.1 of the Agreement, on, or
as soon as practicable after, the Effective Date, the Committee
will disburse the Special Deposit to Cadiz or its nominee in
accordance with written instructions to be provided by Cadiz.
5. COUNTERPARTS
This Supplement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original; but such counterparts together shall constitute but
one and the same instrument.
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IN WITNESS WHEREOF, each of the parties hereto has caused
this Supplement to be duly executed as of the date first above
written.
CADIZ LAND COMPANY, INC.
a Delaware Corporation
By: /s/ Keith Brackpool
----------------------------
Keith Brackpool,
Chief Executive Officer
THE OFFICIAL COMMITTEE OF
CREDITORS HOLDING UNSECURED
CLAIMS
By: /s/ Michael D. McKee
---------------------------------
Michael D. McKee,
Chair
